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RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
Depositor,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
Series 2006-RZ5
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS............................................................................................4
Section 1.01.
Definitions.......................................................................4
Section 1.02. Determination of
LIBOR...........................................................50
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES......................................51
Section 2.01. Conveyance of Mortgage
Loans.....................................................51
Section 2.02. Acceptance by
Trustee............................................................54
Section 2.03. Representations, Warranties and Covenants of the
Master Servicer and the
Depositor.
.....................................................................55
Section 2.04. Representations and Warranties of
Sellers........................................57
Section 2.05. Execution and Authentication of Certificates;
Conveyance of Uncertificated REMIC Regular
Interests........................................................................59
Section 2.06. Purposes and Powers of the
Trust.................................................60
Section 2.07. Agreement Regarding Ability to
Disclose..........................................60
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS......................................................61
Section 3.01. Master Servicer to Act as
Servicer...............................................61
Section 3.02. Subservicing Agreements Between Master Servicer
and Subservicers; Enforcement of Subservicers'
Obligations......................................................................62
Section 3.03. Successor
Subservicers...........................................................63
Section 3.04. Liability of the Master
Servicer.................................................63
Section 3.05. No Contractual Relationship Between Subservicer
and Trustee or Certificateholders.64
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee..................64
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account......64
Section 3.08. Subservicing Accounts; Servicing
Accounts........................................67
Section 3.09. Access to Certain Documentation and Information
Regarding the Mortgage Loans.....68
Section 3.10. Permitted Withdrawals from the Custodial
Account.................................68
Section 3.11. Maintenance of Primary Insurance
Coverage........................................70
Section 3.12. Maintenance of Fire Insurance and Omissions and
Fidelity Coverage................70
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain
Assignments......................................................................71
Section 3.14. Realization Upon Defaulted Mortgage
Loans........................................73
Section 3.15. Trustee to Cooperate; Release of Custodial
Files.................................75
Section 3.16. Servicing and Other Compensation; Compensating
Interest..........................76
Section 3.17. Reports to the Trustee and the
Depositor.........................................77
Section 3.18. Annual Statement as to Compliance and Servicing
Assessment.......................77
Section 3.19. Annual Independent Public Accountants' Servicing
Report..........................78
Section 3.20. Right of the Depositor in Respect of the Master
Servicer.........................78
Section 3.21.
[Reserved].......................................................................79
Section 3.22. Advance
Facility.................................................................79
Section 3.23. Credit Risk
Manager..............................................................82
Section 3.24. Limitation Upon Liability of the Credit Risk
Manager.............................82
Section 3.25. Removal of the Credit Risk
Manager...............................................82
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS.......................................................................83
Section 4.01. Certificate
Account..............................................................83
Section 4.02.
Distributions....................................................................83
Section 4.03. Statements to Certificateholders; Statements to
Rating Agencies; Exchange
Act Reporting.
.................................................................87
Section 4.04. Distribution of Reports to the Trustee and the
Depositor; Advances by the Master
Servicer.
......................................................................91
Section 4.05. Allocation of Realized
Losses....................................................92
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property....................94
Section 4.07. Optional Purchase of Defaulted Mortgage
Loans....................................94
Section 4.08.
[Reserved].......................................................................95
Section 4.09.
[Reserved].......................................................................95
Section 4.10. Swap
Agreement...................................................................95
Section 4.11. Posted Collateral
Account........................................................97
ARTICLE V THE
CERTIFICATES......................................................................................98
Section 5.01. The
Certificates.................................................................98
Section 5.02. Registration of Transfer and Exchange of
Certificates...........................100
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates...............................104
Section 5.04. Persons Deemed
Owners...........................................................104
Section 5.05. Appointment of Paying
Agent.....................................................105
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER...............................................................106
Section 6.01. Respective Liabilities of the Depositor and the
Master Servicer.................106
Section 6.02. Merger or Consolidation of the Depositor or the
Master Servicer; Assignment of Rights and
Delegation of Duties by Master
Servicer.........................................106
Section 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others........107
Section 6.04. Depositor and Master Servicer Not to
Resign.....................................107
ARTICLE VII
DEFAULT............................................................................................108
Section 7.01. Events of
Default...............................................................108
Section 7.02. Trustee or Depositor to Act; Appointment of
Successor...........................109
Section 7.03. Notification to
Certificateholders..............................................110
Section 7.04. Waiver of Events of
Default.....................................................111
ARTICLE VIII CONCERNING THE
TRUSTEE............................................................................112
Section 8.01. Duties of
Trustee...............................................................112
Section 8.02. Certain Matters Affecting the
Trustee...........................................113
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans...........................115
Section 8.04. Trustee May Own
Certificates....................................................115
Section 8.05. Master Servicer to Pay Trustee's Fees and
Expenses; Indemnification.............115
Section 8.06. Eligibility Requirements for
Trustee............................................116
Section 8.07. Resignation and Removal of the
Trustee..........................................116
Section 8.08. Successor
Trustee...............................................................117
Section 8.09. Merger or Consolidation of
Trustee..............................................117
Section 8.10. Appointment of Co-Trustee or Separate
Trustee...................................118
Section 8.11. Appointment of
Custodians.......................................................119
Section 8.12. Appointment of Office or
Agency.................................................119
Section 8.13. DTC Letter of
Representations...................................................119
Section 8.14. Swap
Agreement..................................................................119
ARTICLE IX
TERMINATION.........................................................................................120
Section 9.01. Termination Upon Purchase or Liquidation of All
Mortgage Loans..................120
Section 9.02. Additional Termination
Requirements.............................................124
ARTICLE X REMIC
PROVISIONS.....................................................................................125
Section 10.01. REMIC
Administration............................................................125
Section 10.02. Master Servicer, REMIC Administrator and Trustee
Indemnification................128
ARTICLE XI MISCELLANEOUS
PROVISIONS............................................................................129
Section 11.01.
Amendment.......................................................................129
Section 11.02. Recordation of Agreement;
Counterparts..........................................131
Section 11.03. Limitation on Rights of
Certificateholders......................................131
Section 11.04. Governing
Law...................................................................132
Section 11.05.
Notices.........................................................................132
Section 11.06. Notices to Rating
Agencies......................................................133
Section 11.07. Severability of
Provisions......................................................133
Section 11.08. Supplemental Provisions for
Resecuritization....................................133
Section 11.09. Third-Party
Beneficiary.........................................................134
Section 11.10. Tax
Treatment...................................................................134
ARTICLE XII COMPLIANCE WITH REGULATION
AB......................................................................134
Section 12.01. Intent of Parties;
Reasonableness...............................................134
Section 12.02. Additional Representations and Warranties of the
Trustee........................135
Section 12.03. Information to be Provided by the
Trustee.......................................135
Section 12.04. Report on Assessment of Compliance and
Attestation..............................136
Section 12.05. Indemnification;
Remedies.......................................................136
Exhibit A Form of Class A
Certificate..................................................................A-1
Exhibit B Form of Class M
Certificate..................................................................B-1
Exhibit C Form of Class SB
Certificate.................................................................C-1
Exhibit D Form of Class R
Certificate..................................................................D-1
Exhibit E Form of Custodial
Agreement..................................................................E-1
Exhibit F Mortgage Loan
Schedule.......................................................................F-1
Exhibit G Form of Request for
Release..................................................................G-1
Exhibit H-1 Form of Transfer Affidavit and
Agreement...................................................H-1-1
Exhibit H-2 Form of Transferor
Certificate.............................................................H-2-1
Exhibit I Form of Investor Representation
Letter.......................................................I-1
Exhibit J Form of Transferor Representation
Letter.....................................................J-1
Exhibit K Text of Amendment to Pooling and Servicing Agreement
Pursuant to
Section 11.01(e) for a Limited
Guaranty......................................................K-1
Exhibit L Form of Limited
Guaranty.....................................................................L-1
Exhibit M Form of Lender Certification for Assignment of
Mortgage Loan.................................M-1
Exhibit N Form of Rule 144A Investment
Representation..................................................N-1
Exhibit O Swap
Agreement...............................................................................N-1
Exhibit P Form of ERISA Representation Letter for Class SB
Certificates................................P-1
Exhibit Q Form of ERISA Representation Letter for Class M
Certificates.................................Q-1
Exhibit R Form of SB-AM Swap
Agreement.................................................................R-1
Exhibit S Assignment
Agreement........................................................................S-1
Exhibit T Servicing
Criteria...........................................................................T-1
Exhibit U-1 Form of 10-K
Certification.................................................................U-1-1
Exhibit U-2 Form of Back-Up
Certification..............................................................U-2-1
Exhibit V Information to be Provided by the Master Servicer to
the Rating Agencies Relating to Reportable Modified
Mortgage
Loans...............................................................................V-1
Exhibit W Form of Certificate to be Given by Certificate
Owner.........................................W-1
Exhibit X Form of Certificate to be Given by Euroclear or
Cedel........................................X-1
This Pooling and Servicing Agreement, effective as of December
1, 2006, among RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., as
the depositor (together with its permitted successors and
assigns, the "Depositor"), RESIDENTIAL FUNDING COMPANY, LLC, as
master
servicer (together with its permitted successors and assigns,
the "Master Servicer"), and U.S. BANK NATIONAL ASSOCIATION, a
banking
association organized under the laws of the United States, as
trustee and supplemental interest trust trustee (together with
its
permitted successors and assigns, the "Trustee" and the
"Supplemental Interest Trust Trustee", respectively).
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be
issued hereunder in sixteen Classes, which in the aggregate will
evidence the entire beneficial ownership interest in the
Mortgage
Loans (as defined herein) and certain other related assets.
REMIC I
As provided herein, the REMIC Administrator will make an
election to treat the segregated pool of assets consisting of
the
Mortgage Loans and certain other related assets (exclusive of
any Premium received pursuant to Section 9 of the Assignment
Agreement,
the Supplemental Interest Trust Account, the Swap Agreement and
the SB-AM Swap Agreement) subject to this Agreement as a real
estate
mortgage investment conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of assets will be designated
as
"REMIC I." Component I of the Class R Certificates will
represent the sole Class of "residual interests" in REMIC I for
purposes of
the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the
designation,
remittance rate (the "Uncertificated REMIC I Pass-Through Rate")
and initial Uncertificated Principal Balance for each of the
"regular interests" in REMIC I (the "REMIC I Regular
Interests"). The "latest possible maturity date" (determined solely
for purposes
of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii))
for each REMIC I Regular Interest shall be the Maturity Date. None
of
the REMIC I Regular Interests will be certificated.
UNCERTIFICATED REMIC I INITIAL UNCERTIFICATED REMIC I
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
I-1-A Variable(1) $252,540,000.00
I-1-B Variable(1) $252,540,000.00
A-I Variable(1) $16,693,616.86
_______________
(1) Calculated as provided in the definition of Uncertificated
REMIC I Pass-Through Rate.
REMIC II
As provided herein, the REMIC Administrator will make an
election to treat the segregated pool of assets consisting of
the
REMIC I Regular Interests as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as
"REMIC
II." Component II of the Class R Certificates will represent the
sole Class of "residual interests" in REMIC II for purposes of
the
REMIC Provisions under federal income tax law. The following
table irrevocably sets forth the designation, remittance rate
(the
"Uncertificated REMIC II Pass-Through Rate") and initial
Uncertificated Principal Balance for each of the "regular
interests" in
REMIC II (the "REMIC II Regular Interests"). The "latest
possible maturity date" (determined solely for purposes of
satisfying
Treasury Regulation Section 1.860G-1(a)(4)(iii)) for each REMIC
II Regular Interest shall be the Maturity Date. None of the REMIC
II
Regular Interests will be certificated.
UNCERTIFICATED REMIC II INITIAL UNCERTIFICATED REMIC II
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
LT-1 Variable(1) $ 521,689,063.35
LT-2 Variable(1) $ 19,801.21
LT-3 Variable(1) $ 32,376.15
LT-4 Variable(1) $ 32,376.15
LT-IO Variable(1) (2)
_______________
(1) Calculated as provided in the definition of Uncertificated
REMIC II Pass Through Rate.
(2) REMIC II Regular Interest LT-IO will not have an
Uncertificated Principal Balance but will accrue interest on its
uncertificated
notional amount calculated in accordance with the definition of
"Uncertificated Notional Amount" herein.
REMIC III
As provided herein, the REMIC Administrator will make an
election to treat the segregated pool of assets consisting of
the
REMIC II Regular Interests as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated
as
"REMIC III". Component III of the Class R Certificates will
represent the sole Class of "residual interests" in REMIC III
for
purposes of the REMIC Provisions (as defined herein) under
federal income tax law. The following table irrevocably sets forth
the
designation, Pass-Through Rate, aggregate Initial Certificate
Principal Balance, certain features, month of Final Scheduled
Distribution Date and initial ratings for each Class of
Certificates comprising the interests representing "regular
interests" in
REMIC III. The "latest possible maturity date" (determined
solely for purposes of satisfying Treasury Regulation
Section 1.860G-1(a)(4)(iii)) for each Class of REMIC III Regular
Interests shall be the Maturity Date.
AGGREGATE MONTH OF
INITIAL FINAL
CERTIFICATE SCHEDULED
PASS-THROUGH PRINCIPAL DISTRIBUTION
DESIGNATION TYPE RATE BALANCE FEATURES DATE
S&P Fitch Moody's
Class A-1 Regular(1) Adjustable(2)(3)$100,000,000.00
Senior/Adjustable April 2030 AAA AAA Aaa
Rate
Class A-1A Regular(1) Adjustable(2)(3)$88,500,000.00 Super April
2030 AAA AAA Aaa
Senior/Adjustable
Rate
Class A-1B Regular(1) Adjustable(2)(3)$29,500,000.00 Senior
April 2030 AAA AAA Aaa
Support/Adjustable
Rate
Class A-2 Regular(1) Adjustable(2)(3$126,000,000.00
Senior/Adjustable August 2036 AAA AAA Aaa
Rate
Class A-3 Regular(1) Adjustable(2)(3)$32,720,000.00
Senior/Adjustable August 2046 AAA AAA Aaa
Rate
Class M-1 Regular(1) Adjustable(2)(3)$50,870,000.00
Mezzanine/Adjustable August 2046 N/R AA+ Aa1
Rate
Class M-2 Regular(1) Adjustable(2)(3)$18,260,000.00
Mezzanine/Adjustable August 2046 N/R AA Aa2
Rate
Class M-3 Regular(1) Adjustable(2)(3)$10,960,000.00
Mezzanine/Adjustable August 2046 N/R AA- Aa3
Rate
Class M-4 Regular(1) Adjustable(2)(3)$10,170,000.00
Mezzanine/Adjustable August 2046 N/R A+ A1
Rate
Class M-5 Regular(1) Adjustable(2)(3) $9,390,000.00
Mezzanine/Adjustable August 2046 N/R A A2
Rate
Class M-6 Regular(1) Adjustable(2)(3) $8,870,000.00
Mezzanine/Adjustable August 2046 N/R A- A3
Rate
Class M-7 Regular(1) Adjustable(2)(3) $8,350,000.00
Mezzanine/Adjustable August 2046 N/R BBB+ Baa1
Rate
Class M-8 Regular(1) Adjustable(2)(3) $6,260,000.00
Mezzanine/Adjustable August 2046 N/R BBB Baa2
Rate
Class M-9 Regular(1) Adjustable(2)(3) $5,230,000.00
Mezzanine/Adjustable August 2046 N/R BBB- Baa3
Rate
Class SB Regular (4) $16,693,616.86 Subordinate N/R N/R N/R
(4)
IO Regular (6) (7) Interest Only N/R N/R N/R
(5)
_______________
(1) This Class of Certificates represents ownership of a REMIC
III Regular Interest together with (i) certain rights to payments
to
be made from amounts received under the Swap Agreement which
will be deemed made for federal income tax purposes outside of
REMIC III by the holder of the Class SB Certificates as the
owner of the Swap Agreement and (ii) the obligation to pay the
Class
IO Distribution Amount (as defined in Section 4.10(f)). Any
amount distributed on this Class of Certificates on any
Distribution
Date in excess of the amount distributable on the related REMIC
III Regular Interest on such Distribution Date shall be treated
for federal income tax purposes as having been paid from the
Supplemental Interest Trust Account and any amount distributable
on
such REMIC III Regular Interest on such Distribution Date in
excess of the amount distributable on such Class of Certificates
on
such Distribution Date shall be treated as having been paid to
the Supplemental Interest Trust Account, all pursuant to and as
further provided in Section 4.10 hereof.
(2) The REMIC III Regular Interests, ownership of which is
represented by the Class A Certificates and the Class M
Certificates, will
accrue interest at a per annum rate equal to LIBOR plus the
applicable Margin, each subject to a payment cap as described in
the
definition of "Pass-Through Rate" and the provisions for the
payment of Basis Risk Shortfalls herein, which payments will not
be
part of the entitlement of the REMIC III Regular Interests
related to such Certificates.
(3) The Class A Certificates and Class M Certificates will also
entitle their holders to certain payments from the Holder of
the
Class SB Certificates from amounts to which the related REMIC
III Regular Interest is entitled and from amounts received
under
the Swap Agreement, which will not be a part of their ownership
of the REMIC III Regular Interests.
(4) The Class SB Certificates will accrue interest as described
in the definition of Accrued Certificate Interest. The Class SB
Certificates will not accrue interest on their Certificate
Principal Balance. The Class SB Certificates will be comprised of
two
REMIC III regular interests, a principal only regular interest
designated SB-PO and an interest only regular interest
designated
SB-IO, which will be entitled to distributions as set forth
herein. The rights of the Holder of the Class SB Certificates
to
payments from the Swap Agreement shall be outside and apart from
its rights under the REMIC III Regular Interests SB-IO and
SB-PO.
(5) REMIC III Regular Interest IO will be held as an asset of
the Supplemental Interest Trust Account established by the Trustee
and
will be treated for federal income tax purposes as owned by the
holder of the Class SB Certificates.
(6) For federal income tax purposes, REMIC III Regular Interest
IO will not have a Pass-Through Rate, but will be entitled to 100%
of
the amounts distributed on REMIC II Regular Interest LT-IO.
(7) For federal income tax purposes, REMIC III Regular Interest
IO will not have an Uncertificated Principal Balance, but will have
a
notional amount equal to the Uncertificated Notional Amount of
REMIC II Regular Interest LT-IO.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
meanings specified in this Article.
Accrued Certificate Interest: With respect to each Distribution
Date and each Class of Class A Certificates and Class M
Certificates, interest accrued during the related Interest
Accrual Period on the Certificate Principal Balance thereof
immediately
prior to such Distribution Date at the related Pass-Through Rate
for that Distribution Date.
Accrued Certificate Interest for any Distribution Date shall
further be reduced by the interest portion of Realized Losses
allocated to any Class of Certificates pursuant to Section
4.05.
With respect to each Distribution Date and the Class SB
Certificates, interest accrued during the preceding Interest
Accrual
Period at the Pass-Through Rate on the Notional Amount as
specified in the definition of Pass-Through Rate, immediately prior
to such
Distribution Date, reduced by any interest shortfalls with
respect to the Mortgage Loans, including Prepayment Interest
Shortfalls to
the extent not covered by Compensating Interest pursuant to
Section 3.16 or by Excess Cash Flow pursuant to Section 4.02(c)(v)
and
(vi).
Accrued Certificate Interest on each Class of Certificates shall
accrue on the basis of a 360-day year and the actual number
of days in the related Interest Accrual Period.
The amount of Accrued Certificate Interest on each Class of
Certificates shall be reduced by the amount of Prepayment
Interest Shortfalls on the related Mortgage Loans during the
prior calendar month to the extent not covered by Compensating
Interest
pursuant to Section 3.16, and by Relief Act Shortfalls on the
related Mortgage Loans during the related Due Period. All such
reductions with respect to the related Mortgage Loans will be
allocated among the Certificates in proportion to the amount of
Accrued
Certificate Interest payable on such Certificates on such
Distribution Date absent such reductions.
Adjusted Available Distribution Amount: With respect to any
Distribution Date, the Available Distribution Amount increased
by the excess, if any, of the Net Swap Payment owed to the Swap
Counterparty over the amount distributable on such Distribution
Date
in respect of the REMIC III Regular Interest IO.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and
any date of determination, the Mortgage Rate borne by the
related Mortgage Note, less the rate at which the related
Subservicing Fee accrues.
Adjustment Date: With respect to each adjustable-rate Mortgage
Loan, each date set forth in the related Mortgage Note on
which an adjustment to the interest rate on such Mortgage Loan
becomes effective.
Advance: With respect to any Mortgage Loan, any advance made by
the Master Servicer, pursuant to Section 4.04.
Affected Party: As defined in the Swap Agreement.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such
first
Person. For purposes of this definition, "control" means the
power to direct the management and policies of such Person,
directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
Amount Held for Future Distribution: With respect to any
Distribution Date, the total of the amounts held in the
Custodial
Account at the close of business on the preceding Determination
Date on account of (i) Liquidation Proceeds, Subsequent
Recoveries,
Insurance Proceeds, REO Proceeds, Principal Prepayments,
Mortgage Loan purchases made pursuant to Section 2.02, 2.03, 2.04
or 4.07
and Mortgage Loan substitutions made pursuant to Section 2.03 or
2.04 received or made in the month of such Distribution Date
(other
than such Liquidation Proceeds, Subsequent Recoveries, Insurance
Proceeds, REO Proceeds and purchases of Mortgage Loans that the
Master Servicer has deemed to have been received in the
preceding month in accordance with Section 3.07(b)) and (ii)
payments which
represent early receipt of scheduled payments of principal and
interest due on a date or dates subsequent to the Due Date in
the
related Due Period.
Appraised Value: With respect to any Mortgaged Property, the
lesser of (i) the appraised value of such Mortgaged Property
based upon the appraisal made at the time of the origination of
the related Mortgage Loan, and (ii) the sales price of the
Mortgaged
Property at such time of origination, except in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan
as
to which it is either the appraised value based upon the
appraisal made at the time of origination of the loan which was
refinanced
or modified or the appraised value determined in an appraisal at
the time of refinancing or modification, as the case may be.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the
Mortgage
Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be
in
the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to
that effect.
Assignment Agreement: The Assignment and Assumption Agreement,
dated the Closing Date, between Residential Funding and the
Depositor relating to the transfer and assignment of the
Mortgage Loans, attached hereto as Exhibit R.
Available Distribution Amount: With respect to any Distribution
Date, an amount equal to (a) the sum of (i) the amount
relating to the Mortgage Loans on deposit in the Custodial
Account as of the close of business on the immediately
preceding
Determination Date, including any Subsequent Recoveries, and
amounts deposited in the Custodial Account in connection with
the
substitution of Qualified Substitute Mortgage Loans, (ii) the
amount of any Advance made on the immediately preceding
Certificate
Account Deposit Date with respect to the Mortgage Loans, (iii)
any amount deposited in the Certificate Account on the related
Certificate Account Deposit Date pursuant to the second
paragraph of Section 3.12(a) in respect of the Mortgage Loans, (iv)
any
amount that the Master Servicer is not permitted to withdraw
from the Custodial Account pursuant to Section 3.16(e) in respect
of the
Mortgage Loans, and (v) any amount deposited in the Certificate
Account pursuant to Section 4.07 or 9.01 in respect of the
Mortgage
Loans, reduced by (b) the sum as of the close of business on the
immediately preceding Determination Date of (w) the Amount Held
for
Future Distribution with respect to the Mortgage Loans, (x)
amounts permitted to be withdrawn by the Master Servicer from
the
Custodial Account in respect of the Mortgage Loans pursuant to
clauses (ii)-(x), inclusive, of Section 3.10(a), (y) any
Premium
received pursuant to Section 9 of the Assignment Agreement and
(z) any Net Swap Payments required to be made to the Swap
Counterparty
and Swap Termination Payments not due to a Swap Counterparty
Trigger Event for such Distribution Date.
Balloon Loan: Each of the Mortgage Loans having an original term
to maturity that is shorter than the related amortization
term.
Balloon Payment: With respect to any Balloon Loan, the related
Monthly Payment payable on the stated maturity date of such
Balloon Loan.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basis Risk Shortfalls: With respect to each Class of the Class A
Certificates and Class M Certificates, and any
Distribution Date, the sum of (a) with respect to any
Distribution Date on which the Net WAC Cap Rate is used to
determine the
Pass-Through Rate of such Class, an amount equal to the excess
of (x) Accrued Certificate Interest for such Class calculated at a
per
annum rate equal to LIBOR plus the related Margin for such
Distribution Date (which shall not exceed 14.000% per annum),
over
(y) Accrued Certificate Interest for such Class calculated using
the Net WAC Cap Rate, (b) any Basis Risk Shortfalls for such
Class calculated pursuant to clause (a) above remaining unpaid
from prior Distribution Dates, and (c) one month's interest on
the
amount in clause (b) (based on the number of days in the
preceding Interest Accrual Period) at a per annum rate equal to
the
Pass-Through Rate for such period.
Book-Entry Certificate: Any Certificate registered in the name
of the Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of
California, the State of Minnesota, the State of Texas, the
State of New York or the State of Illinois (and such other state
or
states in which the Custodial Account or the Certificate Account
are at the time located) are required or authorized by law or
executive order to be closed.
Capitalization Reimbursement Amount: With respect to any
Distribution Date, the amount of Advances or Servicing Advances
that were added to the Stated Principal Balance of the Mortgage
Loans during the prior calendar month and reimbursed to the
Master
Servicer or Subservicer on or prior to such Distribution Date
pursuant to Section 3.10(a)(vii).
Cash Liquidation: With respect to any defaulted Mortgage Loan
other than a Mortgage Loan as to which an REO Acquisition
occurred, a determination by the Master Servicer that it has
received all Insurance Proceeds, Liquidation Proceeds and other
payments
or cash recoveries which the Master Servicer reasonably and in
good faith expects to be finally recoverable with respect to
such
Mortgage Loan.
Certificate: Any Class A Certificate, Class M Certificate, Class
SB Certificate or Class R Certificate.
Certificate Account: The account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled
"U.S.
Bank National Association, as trustee, in trust for the
registered holders of Residential Asset Mortgage Products, Inc.,
Mortgage
Asset-Backed Pass-Through Certificates, Series 2006-RZ5" and
which account shall be held for the benefit of the
Certificateholders
and which must be an Eligible Account.
Certificate Account Deposit Date: With respect to any
Distribution Date, the Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register, except
that
neither a Disqualified Organization nor a Non-United States
Person shall be a holder of a Class R Certificate for any
purpose
hereof. Solely for the purpose of giving any consent or
direction pursuant to this Agreement, any Certificate, other than a
Class R
Certificate, registered in the name of the Depositor, the Master
Servicer or any Subservicer or any Affiliate thereof shall be
deemed
not to be outstanding and the Percentage Interest or Voting
Rights evidenced thereby shall not be taken into account in
determining
whether the requisite amount of Percentage Interests or Voting
Rights necessary to effect any such consent or direction has
been
obtained. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners
as they may
indirectly exercise such rights through the Depository and
participating members thereof, except as otherwise specified
herein;
provided, however, that the Trustee shall be required to
recognize as a "Holder" or "Certificateholder" only the Person in
whose name
a Certificate is registered in the Certificate Register.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate, as
reflected on the books of an indirect participating brokerage
firm for which a Depository Participant acts as agent, if any,
and
otherwise on the books of a Depository Participant, if any, and
otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Class A
Certificate or Class M Certificate, on any date of
determination, an amount equal to (i) the Initial Certificate
Principal Balance of such Certificate as specified on the face
thereof,
minus (ii) the sum of (x) the aggregate of all amounts
previously distributed with respect to such Certificate (or any
predecessor
Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02(c) and (y) the aggregate
of all
reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were
previously
allocated to such Certificate (or any predecessor Certificate)
pursuant to Section 4.05; provided, that with respect to any
Distribution Date, the Certificate Principal Balances of the
Class A Certificates and Class M Certificates will be increased, in
each
case to the extent of Realized Losses previously allocated
thereto and remaining unreimbursed, to the extent of Subsequent
Recoveries
in the following order of priority: first to the Class A
Certificates, pro rata, and then to the Class M-1 Certificates,
Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates,
Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates,
Class M-8 Certificates, and Class M-9 Certificates, in that
order with respect to any Class SB Certificate, on any date of
determination, an amount equal to the Percentage Interest
evidenced by such Certificate multiplied by an amount equal to (i)
the
excess, if any, of (A) the then aggregate Stated Principal
Balance of the Mortgage Loans over (B) the then aggregate
Certificate
Principal Balance of the Class A Certificates and Class M
Certificates then outstanding, which represents the sum of (i) the
initial
Uncertificated Principal Balance of REMIC III Regular Interest
SB-PO, as reduced by Realized Losses allocated thereto and
payments
deemed made thereon, and (ii) accrued and unpaid interest on
REMIC III Regular Interest SB-IO, as reduced by Realized Losses
allocated thereto. The Class R Certificates will not have a
Certificate Principal Balance.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to
Section 5.02.
Class: Collectively, all of the Certificates or uncertificated
interests bearing the same designation.
Class A Certificates: Collectively, the Class A-1 Certificates,
Class A-1A Certificates, Class A-1B Certificates, Class A-2
Certificates and Class A-3 Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after
the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the Principal Distribution Amount for that
Distribution
Date or (b) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the Principal Distribution Amount for that Distribution
Date; and
(ii) the excess, if any, of (A) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to
that
Distribution Date over (B) the lesser of (x) the product of (1)
the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class A-1 Certificate: Any one of the Class A-1 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit A,
senior to the Class M Certificates, Class SB Certificates and
Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing
(i) an interest designated as a "regular interest" in REMIC III
for purposes of the REMIC Provisions, (ii) the right to receive
payments with respect to Basis Risk Shortfalls and under the
Swap Agreement and the SB-AM Swap Agreement and (iii) the
obligation to
pay the Class IO Distribution Amount.
Class A-1 Margin: 0.100% per annum and on any Distribution Date
on and after the second Distribution Date after the first
possible Optional Termination Date, 0.200% per annum.
Class A-1A Certificate: Any one of the Class A-1A Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit A,
senior to the Class M Certificates, Class SB Certificates and
Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing
(i) an interest designated as a "regular interest" in REMIC III
for purposes of the REMIC Provisions, (ii) the right to receive
payments with respect to Basis Risk Shortfalls and under the
Swap Agreement and the SB-AM Swap Agreement and (iii) the
obligation to
pay the Class IO Distribution Amount.
Class A-1A Margin: 0.100% per annum and on any Distribution Date
on and after the second Distribution Date after the first
possible Optional Termination Date, 0.200% per annum.
Class A-1B Certificate: Any one of the Class A-1B Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit A,
senior to the Class M Certificates, Class SB Certificates and
Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing
(i) an interest designated as a "regular interest" in REMIC III
for purposes of the REMIC Provisions, (ii) the right to receive
payments with respect to Basis Risk Shortfalls and under the
Swap Agreement and the SB-AM Swap Agreement and (iii) the
obligation to
pay the Class IO Distribution Amount.
Class A-1B Margin: 0.100% per annum and on any Distribution Date
on and after the second Distribution Date after the first
possible Optional Termination Date, 0.200% per annum.
Class A-2 Certificate: Any one of the Class A-2 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit A,
senior to the Class M Certificates, Class SB Certificates and
Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing
(i) an interest designated as a "regular interest" in REMIC III
for purposes of the REMIC Provisions, (ii) the right to receive
payments with respect to Basis Risk Shortfalls and under the
Swap Agreement and the SB-AM Swap Agreement and (iii) the
obligation to
pay the Class IO Distribution Amount.
Class A-2 Margin: Initially, 0.180% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 0.360% per
annum.
Class A-3 Certificate: Any one of the Class A-3 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit A,
senior to the Class M Certificates, Class SB Certificates and
Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing
(i) an interest designated as a "regular interest" in REMIC III
for purposes of the REMIC Provisions, (ii) the right to receive
payments with respect to Basis Risk Shortfalls and under the
Swap Agreement and the SB-AM Swap Agreement and (iii) the
obligation to
pay the Class IO Distribution Amount.
Class A-3 Margin: Initially, 0.250% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 0.500% per
annum.
Class M Certificates: Collectively, the Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates,
Class M-7 Certificates, Class M-8 Certificates and Class M-9
Certificates.
Class M-1 Certificate: Any one of the Class M-1 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-2 Certificates, Class M-3 Certificates,
Class
M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates, Class M-8 Certificates, Class
M-9
Certificates, Class SB Certificates and Class R Certificates
with respect to distributions and the allocation of Realized Losses
as
set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the
REMIC
Provisions, (ii) the right to receive payments with respect to
Basis Risk Shortfalls and under the Swap Agreement and the SB-AM
Swap
Agreement and (iii) the obligation to pay the Class IO
Distribution Amount.
Class M-1 Margin: Initially, 0.360% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 0.540% per
annum.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
Principal Distribution Amount or (b) on or after the Stepdown Date
if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates
(after
taking into account the payment of the Class A Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-1 Certificates
immediately prior to that Distribution Date over (B) the
lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-2 Certificate: Any one of the Class M-2 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-3 Certificates, Class M-4 Certificates,
Class
M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class
SB
Certificates and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in
Section
4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC III for purposes of the REMIC Provisions, (ii)
the
right to receive payments with respect to Basis Risk Shortfalls
and under the Swap Agreement and the SB-AM Swap Agreement and
(iii)
the obligation to pay the Class IO Distribution Amount.
Class M-2 Margin: Initially, 0.400% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 0.600% per
annum.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
Principal Distribution Amount and the Class M-1 Principal
Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event
is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal
Distribution Amount and the Class M-1 Principal Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates and
Class M-1 Certificates (after taking into account the payment of
the Class A Principal Distribution Amount and the
Class M-1 Principal Distribution Amount for that Distribution
Date) and (2) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and
(y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over
the Overcollateralization Floor.
Class M-3 Certificate: Any one of the Class M-3 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-4 Certificates, Class M-5 Certificates,
Class
M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class SB Certificates and
Class R
Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i)
an
interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions, (ii) the right to receive
payments
with respect to Basis Risk Shortfalls and under the Swap
Agreement and the SB-AM Swap Agreement and (iii) the obligation to
pay the
Class IO Distribution Amount.
Class M-3 Margin: Initially, 0.450% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 0.675% per
annum.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution
Amount
and the Class M-2 Principal Distribution Amount or (b) on or
after the Stepdown Date if a Trigger Event is not in effect for
that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount
and the Class M-2 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates, Class
M-1
Certificates and Class M-2 Certificates (after taking into
account the payment of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount and the
Class M-2 Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of
the Class M-3 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1)
the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-4 Certificate: Any one of the Class M-4 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-5 Certificates, Class M-6 Certificates,
Class
M-7 Certificates, Class M-8 Certificates, Class M-9
Certificates, Class SB Certificates and Class R Certificates with
respect to
distributions and the allocation of Realized Losses as set forth
in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC III for purposes of the REMIC
Provisions, (ii) the right to receive payments with respect to
Basis Risk
Shortfalls and under the Swap Agreement and the SB-AM Swap
Agreement and (iii) the obligation to pay the Class IO Distribution
Amount.
Class M-4 Margin: Initially, 0.500% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 0.750% per
annum.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution
Amount,
the Class M-2 Principal Distribution Amount and the Class M-3
Principal Distribution Amount or (b) on or after the Stepdown Date
if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount and the
Class M-3 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates, Class
M-1
Certificates, Class M-2 Certificates and Class M-3 Certificates
(after taking into account the payment of the Class A
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution
Amount
and the Class M-3 Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of
the Class M-4 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1)
the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and
(y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over
the Overcollateralization Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-6 Certificates, Class M-7 Certificates,
Class
M-8 Certificates, Class M-9 Certificates, Class SB Certificates
and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing (i) an interest designated as a "regular interest"
in
REMIC III for purposes of the REMIC Provisions, (ii) the right
to receive payments with respect to Basis Risk Shortfalls and
under
the Swap Agreement and the SB-AM Swap Agreement and (iii) the
obligation to pay the Class IO Distribution Amount.
Class M-5 Margin: Initially, 0.600% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 0.900% per
annum.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution
Amount,
the Class M-2 Principal Distribution Amount, the Class M-3
Principal Distribution Amount and the Class M-4 Principal
Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event
is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount and the Class M-4
Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates and
Class M-4 Certificates (after taking into account the
payment of the Class A Principal Distribution Amount, the Class
M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount and the Class M-4 Principal Distribution
Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-5 Certificates immediately
prior to that Distribution Date over (B) the lesser of (x) the
product of (1) the applicable Subordination Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on
that Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-6 Certificate: Any one of the Class M-6 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-7 Certificates, Class M-8 Certificates,
Class
M-9 Certificates, Class SB Certificates and Class R Certificates
with respect to distributions and the allocation of Realized
Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of
the
REMIC Provisions, (ii) the right to receive payments with
respect to Basis Risk Shortfalls and under the Swap Agreement and
the SB-AM
Swap Agreement and (iii) the obligation to pay the Class IO
Distribution Amount.
Class M-6 Margin: Initially, 0.750% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 1.125% per
annum.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
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
and the Class M-5 Principal Distribution Amount or (b) on or
after the Stepdown Date if a Trigger Event is not in effect for
that
Distribution Date, the lesser of:
(iii) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A 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 and the Class M-5 Principal
Distribution Amount; and
(iv) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates and Class M-5 Certificates (after
taking into account the payment of the Class A 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 and the Class M-5 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-6 Certificates
immediately prior to that Distribution Date over (B) the
lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance
of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization
Floor.
Class M-7 Certificate: Any one of the Class M-7 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-8 Certificates, Class M-9 Certificates,
Class
SB Certificates and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in
Section
4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC III for purposes of the REMIC Provisions, (ii)
the
right to receive payments with respect to Basis Risk Shortfalls
and under the Swap Agreement and the SB-AM Swap Agreement and
(iii)
the obligation to pay the Class IO Distribution Amount.
Class M-7 Margin: Initially, 1.750% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 2.250% per
annum.
Class M-7 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
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 and the
Class M-6 Principal Distribution Amount or (b) on or after the
Stepdown
Date if a Trigger Event is not in effect for that Distribution
Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A 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
and
the Class M-6 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates and
Class M-6 Certificates (after taking into account the payment of
the Class A 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 and the
Class M-6 Principal Distribution Amount for that Distribution
Date) and (2) the Certificate Principal Balance of the
Class M-7 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and
(y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over
the Overcollateralization Floor.
Class M-8 Certificate: Any one of the Class M-8 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class M-9 Certificates, Class SB Certificates and
Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing
(i) an interest designated as a "regular interest" in REMIC III
for purposes of the REMIC Provisions, (ii) the right to receive
payments with respect to Basis Risk Shortfalls and under the
Swap Agreement and the SB-AM Swap Agreement and (iii) the
obligation to
pay the Class IO Distribution Amount.
Class M-8 Margin: Initially, 2.000% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 2.500% per
annum.
Class M-8 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
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 and the Class M-7 Principal
Distribution Amount or (b) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser
of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A 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
and the Class M-7 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates and Class M-7 Certificates (after taking into
account the payment of the Class A 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 and the Class M-7
Principal Distribution Amount for that Distribution Date)
and (2) the Certificate Principal Balance of the Class M-8
Certificates immediately prior to that Distribution Date over
(B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to
be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-9 Certificate: Any one of the Class M-9 Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B,
senior to the Class SB Certificates and Class R Certificates
with
respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of
the REMIC Provisions, (ii) the right to receive payments with
respect
to Basis Risk Shortfalls and under the Swap Agreement and the
SB-AM Swap Agreement and (iii) the obligation to pay the Class
IO
Distribution Amount.
Class M-9 Margin: Initially, 2.500% per annum, and on any
Distribution Date on and after the second Distribution Date
after
the first possible Optional Termination Date, 3.000% per
annum.
Class M-9 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount
for
that Distribution Date after distribution of the Class A
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 and the Class M-8 Principal Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event is
not in
effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A 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 and the
Class M-8 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates, Class
M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates and Class M-8 Certificates
(after taking into account the payment of the Class A
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 and the
Class M-8 Principal Distribution Amount for that Distribution
Date) and (2) the Certificate Principal Balance of the
Class M-9 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and
(y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over
the Overcollateralization Floor.
Class R Certificate: Any one of the Class R Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit D
and evidencing an interest designated as a "residual interest" in
the
REMICs for purposes of the REMIC Provisions. Component I of the
Class R Certificates is designated as the sole class of
"residual
interest" in REMIC I, Component II of the Class R Certificates
is designated as the sole class of "residual interest" in REMIC II
and
Component III of the Class R Certificates is designated as the
sole class of "residual interest" in REMIC III.
Class SB Certificate: Any one of the Class SB Certificates
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit C,
subordinate to the Class A Certificates and Class M
Certificates
with respect to distributions and the allocation of Realized
Losses as set forth in Section 4.05, and evidencing an interest
comprised of "regular interests" in REMIC III together with
certain rights to payments under the Swap Agreement for purposes of
the
REMIC Provisions and certain obligations with respect to
payments of Basis Risk Shortfalls.
Clearance System: Euroclear, Clearstream or both, as
applicable.
Clearstream: Clearstream Banking, societe anonyme.
Closing Date: December 21, 2006.
Code: The Internal Revenue Code of 1986.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date,
any amount paid by the Master Servicer in accordance with
Section 3.16(f).
Corporate Trust Office: The principal office of the Trustee at
which at any particular time its corporate trust business
with respect to this Agreement shall be administered, which
office at the date of the execution of this instrument is located
at U.S.
Bank National Association, EP-MN-WS3D, 60 Livingston Avenue, St.
Paul, Minnesota 55107, Attn: Structured Finance/RAMP 2006-RZ5.
Credit Repository: Equifax, Transunion and Experian, or their
successors in interest.
Credit Risk Management Agreement: The Credit Risk Management
Agreement, dated December 21, 2006, between the Master
Servicer and the Credit Risk Manager.
Credit Risk Manager: Clayton Fixed Income Services Inc., a
Colorado corporation, its successors and assigns.
Credit Risk Manager Fee: With respect to any Mortgage Loan and
Distribution Date, the premium payable to the Credit Risk
Manager at the Credit Risk Manager Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the first day
of
the related Due Period, divided by 12. With respect to each
Mortgage Loan, the Credit Risk Manager Fee will be paid monthly
from the
related Mortgage Rate in accordance with this Agreement.
Credit Risk Manager Fee Rate: With respect to any Distribution
Date, a rate equal to 0.0155% per annum.
Curtailment: Any Principal Prepayment made by a Mortgagor which
is not a Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07 in the name of a
depository institution, as custodian for the holders of the
Certificates, for the holders of certain other interests in
mortgage
loans serviced or sold by the Master Servicer and for the Master
Servicer, into which the amounts set forth in Section 3.07 shall
be
deposited directly. Any such account or accounts shall be an
Eligible Account.
Custodial Agreement: An agreement that may be entered into among
the Depositor, the Master Servicer, the Trustee and a
Custodian in substantially the form of Exhibit E hereto.
Custodial File: Any mortgage loan document in the Mortgage File
that is required to be delivered to the Trustee or the
Custodian pursuant to Section 2.01(b) of this Agreement.
Custodian: Wells Fargo Bank, N.A., or any successor custodian
appointed pursuant to a Custodial Agreement.
Cut-off Date: September 1, 2006.
Cut-off Date Balance: $521,773,616.86.
Cut-off Date Principal Balance: With respect to any Mortgage
Loan, the unpaid principal balance thereof at the Cut-off Date
after giving effect to all installments of principal due on or
prior thereto (or due in the month of the Cut-off Date), whether
or
not received.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage
Loan by a court of competent jurisdiction in a proceeding under
the Bankruptcy Code, except such a reduction constituting a
Deficient
Valuation or any reduction that results in a permanent
forgiveness of principal.
Defaulting Party: As defined in the Swap Agreement.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged
Property in an amount less than the then outstanding
indebtedness under the Mortgage Loan, or any reduction in the
amount of
principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal,
which
valuation or reduction results from a proceeding under the
Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered
Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced with a Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be:
"30 to 59 days" or "30 or more days" delinquent when a
payment due on any scheduled due date remains unpaid as of the
close of business on the next following monthly scheduled due
date;
"60 to 89 days" or "60 or more days" delinquent when a payment
due on any scheduled due date remains unpaid as of the close of
business on the second following monthly scheduled due date; and
so on. The determination as to whether a Mortgage Loan falls
into
these categories is made as of the close of business on the last
business day of each month. For example, a Mortgage Loan with a
payment due on July 1 that remained unpaid as of the close of
business on August 31 would then be considered to be 30 to 59
days
delinquent. Delinquency information as of the Cut-off Date is
determined and prepared as of the close of business on the last
business day immediately prior to the Cut-off Date.
Depositor: As defined in the preamble hereto.
Depository: The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial
Depository for purposes of registering those Certificates that
are to be Book-Entry Certificates is Cede & Co. The Depository
shall
at all times be a "clearing corporation" as defined in Section
8-102(a)(5) of the Uniform Commercial Code of the State of New
York
and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time
a
Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Destroyed Mortgage Note: A Mortgage Note, the original of which
was permanently lost or destroyed and has not been replaced.
Determination Date: With respect to any Distribution Date, the
20th day (or if such 20th day is not a Business Day, the
Business Day immediately following such 20th day) of the month
of the related Distribution Date.
Disqualified Organization: Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the
Code,
including, if not otherwise included, any of the following: (i)
the United States, any State or political subdivision thereof,
any
possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an
instrumentality which is a
corporation if all of its activities are subject to tax and,
except for Freddie Mac, a majority of its board of directors is
not
selected by such governmental unit), (ii) a foreign government,
any international organization, or any agency or instrumentality
of
any of the foregoing, (iii) any organization (other than certain
farmers' cooperatives described in Section 521 of the Code) which
is
exempt from the tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated
business
taxable income) and (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code. A
Disqualified
Organization also includes any "electing large partnership," as
defined in Section 775(a) of the Code and any other Person so
designated by the Trustee based upon an Opinion of Counsel that
the holding of an Ownership Interest in a Class R Certificate by
such
Person may cause any REMIC or any Person having an Ownership
Interest in any Class of Certificates (other than such Person) to
incur
a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an
Ownership
Interest in a Class R Certificate to such Person. The terms
"United States," "State" and "international organization" shall
have the
meanings set forth in Section 7701 of the Code or successor
provisions.
Distribution Date: The 25th day of any month beginning in
January 2007 or, if such 25th day is not a Business Day, the
Business Day immediately following such 25th day.
DTC Letter: The Letter of Representations, dated December 20,
2006, between the Trustee on behalf of the Trust Fund and the
Depository.
Due Date: With respect to any Distribution Date and any Mortgage
Loan, the day during the related Due Period on which the
Monthly Payment is due.
Due Period: With respect to any Distribution Date, the calendar
month of such Distribution Date.
Early Termination Date: Shall have the meaning set forth in the
Swap Agreement.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the debt
obligations of which have been rated by each Rating Agency in
its highest rating available, or (ii) an account or accounts in
a
depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits
not
so insured shall, to the extent acceptable to each Rating
Agency, as evidenced in writing, be maintained such that (as
evidenced by
an Opinion of Counsel delivered to the Trustee and each Rating
Agency) the registered Holders of Certificates have a claim
with
respect to the funds in such account or a perfected first
security interest against any collateral (which shall be limited
to
Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) in
the case of the Custodial Account, a trust account or accounts
maintained in the corporate trust department of U.S. Bank
National Association, or (iv) in the case of the Certificate
Account, a
trust account or accounts maintained in the corporate trust
division of U.S. Bank National Association, or (v) an account or
accounts
of a depository institution acceptable to each Rating Agency (as
evidenced in writing by each Rating Agency that use of any such
account as the Custodial Account or the Certificate Account will
not reduce the rating assigned to any Class of Certificates by
such
Rating Agency below the then-current rating assigned to such
Certificates by such Rating Agency).
Eligible Master Servicing Compensation: With respect to any
Distribution Date, the lesser of (a) one-twelfth of 0.125% of
the Stated Principal Balance of the related Mortgage Loans
immediately preceding such Distribution Date and (b) the sum of
the
Servicing Fee and all income and gain on amounts held in the
Custodial Account and the Certificate Account and payable to
the
Certificateholders with respect to such Distribution Date;
provided that for purposes of this definition the amount of the
Servicing
Fee will not be reduced pursuant to Section 7.02(a) except as
may be required pursuant to the last sentence of such Section.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Euroclear: Euroclear Bank S.A./N.V.
Event of Default: As defined in Section 7.01.
Excess Cash Flow: With respect to any Distribution Date, an
amount equal to the sum of (A) the excess of (i) the Available
Distribution Amount for that Distribution Date over (ii) the sum
of (a) the Interest Distribution Amount for that Distribution
Date
and (b) the lesser of (1) the aggregate Certificate Principal
Balance of Class A Certificates and Class M Certificates
immediately
prior to such Distribution Date and (2) the Principal Remittance
Amount for that Distribution Date to the extent not applied to
pay
interest on the Class A Certificates and Class M Certificates on
such Distribution Date, (B) the Overcollateralization Reduction
Amount, if any, for that Distribution Date and (C) any Net Swap
Payments received by the Supplemental Interest Trust Trustee
under
the Swap Agreement for that Distribution Date and deposited in
the Supplemental Interest Trust Account pursuant to Section
4.10(c).
Excess Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of (a) the
Overcollateralization Amount on such Distribution Date over (b)
the Required Overcollateralization Amount for such Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Expense Fee Rate: With respect to any Mortgage Loan as of any
date of determination, the sum of the (i) applicable
Servicing Fee Rate , (ii) the per annum rate at which the
applicable Subservicing Fee accrues and (iii) the related Credit
Risk
Manager Fee Rate.
Fannie Mae: Fannie Mae, a federally chartered and privately
owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
Final Distribution Date: The Distribution Date on which the
final distribution in respect of the Certificates will be made
pursuant to Section 9.01, which Final Distribution Date shall in
no event be later than the end of the 90-day liquidation period
described in Section 9.02.
Final Scheduled Distribution Date: Solely for purposes of the
face of the Certificates, as follows: with respect to the
Class A-1 Certificates, the Class A-1A Certificates, the Class
A-1B Certificates, the Distribution Date occurring in April 2030;
with
respect to the Class A-2 Certificates, the Distribution Date
occurring in August 2036; and with respect to the Class A-3
Certificates
and each Class of Class M Certificates, the Distribution Date
occurring in August 2046. No event of default under this
Agreement
will arise or become applicable solely by reason of the failure
to retire the entire Certificate Principal Balance of any Class
of
Class A Certificates or Class M Certificates on or before its
Final Scheduled Distribution Date.
Fitch: Fitch Ratings, or its successors in interest.
Fixed Swap Payment: With respect to any Distribution Date on or
prior to the distribution date in December 2011, an amount
equal to the product of (x) a fixed rate equal to 5.15% per
annum, (y) the Swap Agreement Notional Balance for that
Distribution Date
and (z) a fraction, the numerator of which is (a) 34 for the
Distribution Date in January 2007 and (b) 30 for any Distribution
Date
occurring after the Distribution Date in January 2007, and the
denominator of which is 360. As described in the swap agreement,
the
fixed rate payer period end dates are not adjusted in accordance
with the business day convention.
Floating Swap Payment: With respect to any Distribution Date on
or prior to the Distribution Date in December 2011, an
amount equal to the product of (x) Swap LIBOR, (y) the Swap
Agreement Notional Balance for that Distribution Date and (z) a
fraction,
the numerator of which is equal to the number of days in the
related calculation period as provided in the Swap Agreement and
the
denominator of which is 360. As described in the Swap Agreement,
the floating rate payer period end dates are adjusted in
accordance
with the business day convention.
Foreclosure Profits: With respect to any Distribution Date or
related Determination Date and any Mortgage Loan, the excess,
if any, of Liquidation Proceeds, Insurance Proceeds and REO
Proceeds (net of all amounts reimbursable therefrom pursuant to
Section 3.10(a)(ii)) in respect of each Mortgage Loan or REO
Property for which a Cash Liquidation or REO Disposition occurred
in the
related Prepayment Period over the sum of the unpaid principal
balance of such Mortgage Loan or REO Property (determined, in the
case
of an REO Disposition, in accordance with Section 3.14) plus
accrued and unpaid interest at the Mortgage Rate on such unpaid
principal balance from the Due Date to which interest was last
paid by the Mortgagor to the first day of the month following
the
month in which such Cash Liquidation or REO Disposition
occurred.
Form 10-K Certification: As defined in Section 4.03(e).
Freddie Mac: Freddie Mac, a corporate instrumentality of the
United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Gross Margin: With respect to each adjustable-rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage
Note and indicated on the Mortgage Loan Schedule as the "NOTE
MARGIN," which percentage is added to the related Index on each
Adjustment Date to determine (subject to rounding in accordance
with the related Mortgage Note, the Periodic Cap, the Maximum
Mortgage Rate and the Minimum Mortgage Rate) the interest rate
to be borne by such Mortgage Loan until the next Adjustment
Date.
HUD: The United States Department of Housing and Urban
Development.
Independent: When used with respect to any specified Person,
means such a Person who (i) is in fact independent of the
Depositor, the Master Servicer and the Trustee, or any Affiliate
thereof, (ii) does not have any direct financial interest or
any
material indirect financial interest in the Depositor, the
Master Servicer or the Trustee or in an Affiliate thereof, and
(iii) is
not connected with the Depositor, the Master Servicer or the
Trustee as an officer, employee, promoter, underwriter,
trustee,
partner, director or person performing similar functions.
Index: With respect to any adjustable-rate Mortgage Loan and as
to any Adjustment Date therefor, the related index as
stated in the related Mortgage Note.
Initial Certificate Principal Balance: With respect to each
Class of Certificates (other than the Class R Certificates),
the Certificate Principal Balance of such Class of Certificates
as of the Closing Date as set forth in the Preliminary
Statement
hereto.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans pursuant to any Primary Insurance Policy or any other
related insurance policy covering a Mortgage Loan, to the extent
such proceeds are payable to the mortgagee under the Mortgage,
any
Subservicer, the Master Servicer or the Trustee and are not
applied to the restoration of the related Mortgaged Property or
released
to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for
its own
account.
Interest Accrual Period: With respect to the Distribution Date
in January 2007, the period commencing the Closing Date and
ending on the day preceding the Distribution Date in January
2007, and with respect to any Distribution Date after the
Distribution
Date in January 2007, the period commencing on the Distribution
Date in the month immediately preceding the month in which such
Distribution Date occurs and ending on the day preceding such
Distribution Date.
Interest Distribution Amount: For any Distribution Date, the
amounts payable pursuant to Section 4.02(c)(i) and (ii).
Interim Certification: As defined in Section 2.02.
Late Collections: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments
of Monthly Payments or as Insurance Proceeds, Liquidation
Proceeds or otherwise, which represent late payments or collections
of
Monthly Payments due but delinquent for a previous Due Period
and not previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic
mean of the London interbank offered rate quotations for
one-month U.S. Dollar deposits, expressed on a per annum basis,
determined in accordance with Section 1.02.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday
or (ii) a day on which banking institutions in London,
England are required or authorized by law to be closed.
LIBOR Certificates: Collectively, the Class A Certificates and
Class M Certificates.
LIBOR Rate Adjustment Date: With respect to each Distribution
Date, the second LIBOR Business Day immediately preceding the
commencement of the related Interest Accrual Period.
Limited Repurchase Right Holder: RFC Asset Holdings II, Inc., or
its successor.
Liquidation Proceeds: Amounts (other than Insurance Proceeds)
received by the Master Servicer in connection with the taking
of an entire Mortgaged Property by exercise of the power of
eminent domain or condemnation or in connection with the
liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale
or otherwise, other than REO Proceeds and Subsequent
Recoveries.
Loan-to-Value Ratio: As of any date, the fraction, expressed as
a percentage, the numerator of which is the current
principal balance of the related Mortgage Loan at the date of
determination and the denominator of which is the Appraised Value
of
the related Mortgaged Property.
Margin: The Class A-1 Margin, Class A-1A Margin, Class A-1B
Margin, Class A-2 Margin, Class A-3 Margin, Class M-1 Margin,
Class M-2 Margin, Class M-3 Margin, Class M-4 Margin, Class M-5
Margin, Class M-6 Margin, Class M-7 Margin, Class M-8 Margin,
or
Class M-9 Margin as applicable.
Marker Rate: With respect to the Class SB Certificates or REMIC
III Regular Interest SB-IO and any Distribution Date, in
relation to the REMIC II Regular Interests LT1, LT2, LT3, and
LT4, a per annum rate equal to two (2) times the weighted average
of
the Uncertificated REMIC II Pass-Through Rates for REMIC II
Regular Interest LT2 and REMIC II Regular Interest LT3.
Master Servicer: As defined in the preamble hereto.
Maturity Date: With respect to each Class of Certificates
representing ownership of regular interests and each
Uncertificated Regular Interest issued by any of REMIC I, REMIC
II or REMIC III, the latest possible maturity date, solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, by which the Certificate Principal Balance of each
such Class of
Certificates or Uncertificated Principal Balance of each such
Uncertificated Regular Interest representing a regular interest in
the
Trust Fund would be reduced to zero, which is, for each such
regular interest, August 25, 2046, which is the Distribution
Date
occurring in the month following the last scheduled monthly
payment of the Mortgage Loans.
Maximum Mortgage Rate: With respect to any adjustable-rate
Mortgage Loan, the per annum rate indicated on the Mortgage
Loan
Schedule as the "NOTE CEILING," which rate is the maximum
interest rate that may be applicable to such Mortgage Loan at any
time
during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: With respect to any adjustable-rate
Mortgage Loan and any date of determination, the Maximum
Mortgage Rate minus the Expense Fee Rate. With respect to any
fixed-rate Mortgage Loan and any date of determination, the Net
Mortgage Rate.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State
of
Delaware, or any successor thereto.
MERS(R)System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R)System.
Minimum Mortgage Rate: With respect to any adjustable-rate
Mortgage Loan, a per annum rate equal to the greater of (i) the
Note Margin and (ii) the rate indicated on the Mortgage Loan
Schedule as the "NOTE FLOOR," which rate may be applicable to
such
Mortgage Loan at any time during the life of such Mortgage
Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the
subject of a Servicing Modification.
Modified Net Mortgage Rate: With respect to any Mortgage Loan
that is the subject of a Servicing Modification, the Net
Mortgage Rate minus the rate per annum by which the Mortgage
Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns,
at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including
any REO Property) and the Due Date in any Due Period, the
payment of principal and interest due thereon in accordance with
the amortization schedule at the time applicable thereto (after
adjustment, if any, for Curtailments and for Deficient
Valuations occurring prior to such Due Date but before any
adjustment to such
amortization schedule by reason of any bankruptcy, other than a
Deficient Valuation, or similar proceeding or any moratorium or
similar waiver or grace period and before any Servicing
Modification that constitutes a reduction of the interest rate on
such
Mortgage Loan).
Moody's: Moody's Investors Service, Inc., or its successors in
interest.
Mortgage: With respect to each Mortgage Note, the mortgage, deed
of trust or other comparable instrument creating a first
or junior lien on an estate in fee simple or leasehold interest
in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional
documents required to be added to the Mortgage File pursuant to
this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 as from time
to
time are held or deemed to be held as a part of the Trust Fund,
the Mortgage Loans originally so held being identified in the
initial
Mortgage Loan Schedule, and Qualified Substitute Mortgage Loans
held or deemed held as part of the Trust Fund including,
without
limitation, each related Mortgage Note, Mortgage and Mortgage
File and all rights appertaining thereto.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached
hereto as Exhibit F (as amended from time to time to
reflect the addition of Qualified Substitute Mortgage Loans),
which lists shall set forth at a minimum the following information
as
to each Mortgage Loan:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) [reserved];
(iii) the maturity of the Mortgage Note ("MATURITY DATE," or
"MATURITY DT");
(iv) for the adjustable-rate Mortgage Loans, the Mortgage Rate
as of origination ("ORIG RATE");
(v) the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(vi) the Net Mortgage Rate as of the Cut-off Date ("CURR
NET");
(vii) the scheduled monthly payment of principal, if any, and
interest as of the Cut-off Date ("ORIGINAL P & I" or "CURRENT P
&
I");
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T," "BT" or "CT" under the column "LN FEATURE,"
indicating that the Mortgage Loan is secured by a second or
vacation
residence (the absence of any such code means the Mortgage Loan
is secured by a primary residence);
(xi) a code "N" under the column "OCCP CODE," indicating that
the Mortgage Loan is secured by a non-owner occupied residence
(the
absence of any such code means the Mortgage Loan is secured by
an owner occupied residence);
(xii) for the adjustable-rate Mortgage Loans, the Maximum
Mortgage Rate ("NOTE CEILING");
(xiii) for the adjustable-rate Mortgage Loans, the maximum Net
Mortgage Rate ("NET CEILING");
(xiv) for the adjustable-rate Mortgage Loans, the Note Margin
("NOTE MARGIN");
(xv) for the adjustable-rate Mortgage Loans, the first
Adjustment Date after the Cut-off Date ("NXT INT CHG DT");
(xvi) for the adjustable-rate Mortgage Loans, the Periodic Cap
("PERIODIC DECR" or "PERIODIC INCR");
(xvii) [reserved]; and
(xviii) for the adjustable-rate Mortgage Loans, the rounding of
the semi-annual or annual adjustment to the Mortgage Rate
("NOTE
METHOD").
Such schedule may consist of multiple reports that collectively
set forth all of the information required.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor
under a Mortgage Loan, together with any modification
thereto.
Mortgage Rate: With respect to any Mortgage Loan, the interest
rate borne by the related Mortgage Note, or any modification
thereto other than a Servicing Modification. The Mortgage Rate
on the adjustable-rate Mortgage Loans will adjust on each
Adjustment
Date to equal the sum (rounded to the nearest multiple of
one-eighth of one percent (0.125%) or up to the nearest one-eighth
of one
percent, which are indicated by a "U" on the Mortgage Loan
Schedule, except in the case of the adjustable-rate Mortgage
Loans
indicated by an "X" on the Mortgage Loan Schedule under the
heading "NOTE METHOD"), of the related Index plus the Note Margin,
in
each case subject to the applicable Periodic Cap, Maximum
Mortgage Rate and Minimum Mortgage Rate.
Mortgaged Property: The underlying real property securing a
Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: With respect to any Mortgage Loan as of any
date of determination, a per annum rate equal to the
Mortgage Rate for such Mortgage Loan as of such date minus the
related Expense Fee Rate.
Net Swap Payment: With respect to each Distribution Date, the
net payment required to be made pursuant to the terms of the
Swap Agreement by either the Swap Counterparty or the
Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest
Trust, which net payment shall not take into account any Swap
Termination Payment.
Net WAC Cap Rate: With respect to any Distribution Date, a per
annum rate (which will not be less than zero) equal to
(i) the product of (a) the weighted average of the Net Mortgage
Rates (or, if applicable, the Modified Net Mortgage Rates) on
the
Mortgage Loans using the Net Mortgage Rates in effect for the
Monthly Payments due on such Mortgage Loans during the related
Due
Period, weighted on the basis of the respective Stated Principal
Balances thereof for such Distribution Date, and (b) a fraction
expressed as percentage, the numerator of which is 30 and the
denominator of which is the actual number of days in the
related
Interest Accrual Period minus (ii) the product of (a) a fraction
expressed as a percentage, the numerator of which is the amount
of
any Net Swap Payments or Swap Termination Payment not due to a
Swap Counterparty Trigger Event owed to the Swap Counterparty as
of
such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans for
such
Distribution Date, and (b) a fraction expressed as percentage,
the numerator of which is 360 and the denominator of which is
the
actual number of days in the related Interest Accrual
Period.
Non-United States Person: Any Person other than a United States
Person.
Nonrecoverable Advance: Any Advance previously made or proposed
to be made by the Master Servicer or Subservicer in respect
of a Mortgage Loan (other than a Deleted Mortgage Loan) which,
in the good faith judgment of the Master Servicer, will not, or,
in
the case of a proposed Advance, would not, be ultimately
recoverable by the Master Servicer from related Late Collections,
Insurance
Proceeds, Liquidation Proceeds or REO Proceeds. To the extent
that any Mortgagor is not obligated under the related Mortgage
documents to pay or reimburse any portion of any Servicing
Advances that are outstanding with respect to the related Mortgage
Loan as
a result of a modification of such Mortgage Loan by the Master
Servicer, which forgives amounts which the Master Servicer or
Subservicer had previously advanced, and the Master Servicer
determines that no other source of payment or reimbursement for
such
advances is available to it, such Servicing Advances shall be
deemed to be Nonrecoverable Advances. The determination by the
Master
Servicer that it has made a Nonrecoverable Advance shall be
evidenced by a certificate of a Servicing Officer, Responsible
Officer or
Vice President or its equivalent or senior officer of the Master
Servicer, delivered to the Depositor, the Trustee, and the
Master
Servicer setting forth such determination, which shall include
any other information or reports obtained by the Master Servicer
such
as property operating statements, rent rolls, property
inspection reports and engineering reports, which may support
such
determinations. Notwithstanding the above, the Trustee shall be
entitled to rely upon any determination by the Master Servicer
that
any Advance previously made is a Nonrecoverable Advance or that
any proposed Advance, if made, would constitute a
Nonrecoverable
Advance.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the
time of reference thereto, is not subject to a Subservicing
Agreement.
Note Margin: With respect to each adjustable-rate Mortgage Loan,
the fixed percentage set forth in the related Mortgage
Note and indicated on the Mortgage Loan Schedule as the "NOTE
MARGIN," which percentage is added to the Index on each Adjustment
Date
to determine (subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and
the
Minimum Mortgage Rate) the interest rate to be borne by such
adjustable-rate Mortgage Loan until the next Adjustment Date.
Notional Amount: With respect to the Class SB Certificates or
REMIC III Regular Interest SB-IO, immediately prior to any
Distribution Date, the aggregate of the Uncertificated Principal
Balances of the REMIC II Regular Interests.
Officers' Certificate: A certificate signed by the Chairman of
the Board, the President, a Vice President, Assistant Vice
President, Director, Managing Director, the Treasurer, the
Secretary, an Assistant Treasurer or an Assistant Secretary of
the
Depositor or the Master Servicer, as the case may be, and
delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to
the Trustee and the Master Servicer who may be counsel for
the Depositor or the Master Servicer, provided that any Opinion
of Counsel (i) referred to in the definition of "Disqualified
Organization" or (ii) relating to the qualification of any REMIC
hereunder as a REMIC or compliance with the REMIC Provisions
must,
unless otherwise specified, be an opinion of Independent
counsel.
Optional Termination Date: Any Distribution Date on or after
which the Stated Principal Balance (after giving effect to
distributions to be made on such Distribution Date) of the
Mortgage Loans is less than 10.00% of the Cut-off Date Balance.
Outstanding Mortgage Loan: With respect to the Due Date in any
Due Period, a Mortgage Loan (including an REO Property) that
was not the subject of a Principal Prepayment in Full, Cash
Liquidation or REO Disposition and that was not purchased, deleted
or
substituted for prior to such Due Date pursuant to Section 2.02,
2.03, 2.04 or 4.07.
Overcollateralization Amount: With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated
Principal Balance of the Mortgage Loans before giving effect to
distributions of principal to be made on such Distribution Date
over
(b) the aggregate Certificate Principal Balance of the Class A
Certificates and Class M Certificates immediately prior to such
date.
Overcollateralization Floor: An amount equal to the product of
0.50% and the Cut-off Date Balance.
Overcollateralization Increase Amount: With respect to any
Distribution Date, the lesser of (a) Excess Cash Flow for that
Distribution Date (to the extent not used to cover the amounts
described in clauses (b)(iv) and (v) of the definition of
Principal
Distribution Amount as of such Distribution Date) and (b) the
excess, if any, of (1) the Required Overcollateralization Amount
for
such Distribution Date over (2) the Overcollateralization Amount
for such Distribution Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date on which the Excess Overcollateralization
Amount is, after taking into account all other distributions to
be made on such Distribution Date, greater than zero, the
Overcollateralization Reduction Amount shall be equal to the
lesser of (i) the Excess Overcollateralization Amount for that
Distribution Date and (ii) the Principal Remittance Amount on
such Distribution Date.
Ownership Interest: With respect to any Certificate, any
ownership or security interest in such Certificate, including
any
interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or
beneficial,
as owner or as pledgee.
Pass-Through Rate: With respect to each Class of Class A
Certificates and Class M Certificates and any Distribution
Date,
the least of (i) a per annum rate equal to LIBOR plus the
related Margin for such Distribution Date, (ii) 14.000% per annum
and (iii)
the Net WAC Cap Rate for such Distribution Date.
With respect to the Class SB Certificates or REMIC III Regular
Interest SB-IO and any Distribution Date, a per annum rate
equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses
(i)
through (iii) below, and the denominator of which is the
aggregate principal balance of the REMIC II Regular Interests. For
purposes
of calculating the Pass-Through Rate for the Class SB
Certificates or the REMIC III Regular Interest SB-IO, the numerator
is equal to
the sum of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT1 minus the Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT2 minus the Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest LT2; and
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT4 minus twice the Marker Rate, applied
to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT4.
Paying Agent: U.S. Bank National Association or any successor
Paying Agent appointed by the Trustee.
Percentage Interest: With respect to any Class A Certificate or
Class M Certificate, the undivided percentage ownership
interest in the related Class evidenced by such Certificate,
which percentage ownership interest shall be equal to the
Initial
Certificate Principal Balance thereof divided by the aggregate
Initial Certificate Principal Balance of all of the Certificates
of
the same Class. The Percentage Interest with respect to a Class
SB Certificate or Class R Certificate shall be stated on the
face
thereof.
Periodic Cap: With respect to each adjustable-rate Mortgage
Loan, the periodic rate cap that limits the increase or the
decrease of the related Mortgage Rate on any Adjustment Date
pursuant to the terms of the related Mortgage Note.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by
the United States or any agency or instrumentality
thereof when such obligations are backed by the full faith and
credit of the United States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of
acquisition thereof, provided that the unsecured obligations of
the party agreeing to repurchase such obligations
are at the time rated by each Rating Agency in its highest
short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each
have an original maturity of not more than 90 days and, in the
case of bankers' acceptances, shall in no event have
an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United
States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States
or any state thereof or of any domestic branch of a foreign
depository institution or trust company; provided that
the debt obligations of such depository institution or trust
company at the date of acquisition thereof have been
rated by each Rating Agency in its highest short-term rating
available; and, provided further that, if the original
maturity of such short-term obligations of a domestic branch of
a foreign depository institution or trust company
shall exceed 30 days, the short-term rating of such institution
shall be A-1+ in the case of Standard & Poor's if
Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original
maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been
rated by each Rating Agency in its highest short term rating
available; provided that such commercial paper and
demand notes shall have a remaining maturity of not more than 30
days;
(v) a money market fund or a qualified investment fund rated by
each Rating Agency in its highest long-term rating
available (which may be managed by the Trustee or one of its
Affiliates); and
(vi) other obligations or securities that are acceptable to each
Rating Agency as a Permitted Investment hereunder and
will not reduce the rating assigned to any Class of Certificates
by such Rating Agency below the then-current rating
assigned to such Certificates by such Rating Agency, as
evidenced in writing;
provided, however, that no instrument shall be a Permitted
Investment if it represents, either (1) the right to receive only
interest
payments with respect to the underlying debt instrument or (2)
the right to receive both principal and interest payments derived
from
obligations underlying such instrument and the principal and
interest payments with respect to such instrument provide a yield
to
maturity greater than 120% of the yield to maturity at par of
such underlying obligations. References herein to the highest
rating
available on unsecured long-term debt shall mean AAA in the case
of Standard & Poor's, AAA in the case of Fitch and Aaa in the
case
of Moody's, and for purposes of this Agreement, any references
herein to the highest rating available on unsecured commercial
paper
and short-term debt obligations shall mean the following: A-1 in
the case of Standard & Poor's and P-1 in the case of
Moody's;
provided, however, that any Permitted Investment that is a
short-term debt obligation rated A-1 by Standard & Poor's must
satisfy the
following additional conditions: (i) the total amount of debt
from A-1 issuers must be limited to the investment of monthly
principal
and interest payments (assuming fully amortizing collateral);
(ii) the total amount of A-1 investments must not represent more
than
20% of the aggregate outstanding Certificate Principal Balance
of the Certificates and each investment must not mature beyond
30
days; (iii) the terms of the debt must have a predetermined
fixed dollar amount of principal due at maturity that cannot vary;
and
(iv) if the investments may be liquidated prior to their
maturity or are being relied on to meet a certain yield, interest
must be
tied to a single interest rate index plus a single fixed spread
(if any) and must move proportionately with that index. Any
Permitted Investment may be purchased by or through the Trustee
or its Affiliates.
Permitted Transferee: Any Transferee of a Class R Certificate,
other than a Disqualified Organization or Non-United States
Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Posted Collateral Account: The separate account created and
maintained by the Supplemental Interest Trust Trustee, on
behalf of the Supplemental Interest Trust, pursuant to Section
4.11.
Premium: Any amounts paid with respect to any Mortgage Loan
repurchased by Residential Funding pursuant to Section 9 of the
Assignment Agreement that are in excess of the Purchase Price
for the related Mortgage Loan.
Premium Letter: The letter among the Company, the Trustee, the
Seller and the Master Servicer that is available from the
Trustee at the request of a Certificateholder.
Premium Rate: The rate set forth in the Premium Letter.
Prepayment Assumption: With respect to the Class A Certificates
and Class M Certificates, the prepayment assumption to be
used for determining the accrual of original issue discount and
premium and market discount on such Certificates for federal
income
tax purposes, which (a) with respect to the fixed rate Mortgage
Loans, assumes a constant prepayment rate of 4% per annum of the
then
outstanding principal balance of the Mortgage Loans in the first
month of the life of the fixed-rate Mortgage Loans, and an
additional approximate 21/11% per annum in each month thereafter
until the twelfth month, and then beginning in the twelfth month
and
in each month thereafter during the life of the fixed-rate
Mortgage Loans, a constant prepayment rate of 25.0% per annum each
month
and (b) with respect to the adjustable-rate Mortgage Loans,
assumes a constant prepayment rate of 4% per annum of the then
outstanding principal balance of the adjustable-rate Mortgage
Loans in the first month of the life of the adjustable-rate
Mortgage
Loans, and an additional approximate 26/11% per annum in each
month thereafter until the twelfth month, and then beginning in
the
twelfth month and in each month thereafter during the life of
the adjustable-rate Mortgage Loans, a constant prepayment rate of
30%
per annum each month.
Prepayment Interest Shortfall: With respect to any Distribution
Date and any Mortgage Loan (other than a Mortgage Loan
relating to an REO Property) that was the subject of (a) a
Principal Prepayment in Full during the related Prepayment Period,
an
amount equal to the excess of one month's interest at the
related Net Mortgage Rate (or Modified Net Mortgage Rate in the
case of a
Modified Mortgage Loan) on the Stated Principal Balance of such
Mortgage Loan over the amount of interest (adjusted to the
related
Net Mortgage Rate (or Modified Net Mortgage Rate in the case of
a Modified Mortgage Loan)) paid by the Mortgagor for such
Prepayment
Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to
one
month's interest at the related Net Mortgage Rate (or Modified
Net Mortgage Rate in the case of a Modified Mortgage Loan) on
the
amount of such Curtailment.
Prepayment Period: With respect to any Distribution Date, the
calendar month preceding the month of distribution.
Primary Insurance Policy: Each primary policy of mortgage
guaranty insurance as indicated by a numeric code on the
Mortgage
Loan Schedule with the exception of code "A23," "A34" or "A96"
under the column "MI CO CODE."
Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (a) the excess of (x) the sum of (A)
the Available Distribution Amount and (B) with respect to
clauses (b)(v) and (vi) below, the amounts received by the
Supplemental
Interest Trust Trustee under the Swap Agreement for that
Distribution Date, over (y) the Interest Distribution Amount, and
(b) the
sum of:
(i) the principal portion of each Monthly Payment received or
Advanced with respect to the related Due Period on each
Outstanding Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period (or deemed to have
been
so repurchased in accordance with Section 3.07(b)) pursuant to
Section 2.02, 2.03, 2.04 or 4.07 and the amount of any
shortfall deposited in the Custodial Account in connection with
the substitution of a Deleted Mortgage Loan pursuant to
Section 2.03 or 2.04 during the related Prepayment Period;
(iii) the principal portion of all other unscheduled
collections, other than Subsequent Recoveries, on the Mortgage
Loans
(including, without limitation, Principal Prepayments in Full,
Curtailments, Insurance Proceeds, Liquidation Proceeds
and REO Proceeds) received during the related Prepayment Period
(or deemed to have been so received) to the extent
applied by the Master Servicer as recoveries of principal of the
Mortgage Loans pursuant to Section 3.14;
(iv) the lesser of (1) Subsequent Recoveries for such
Distribution Date and (2) the principal portion of any Realized
Losses
allocated to any Class of Certificates on a prior Distribution
Date and remaining unpaid;
(v) the lesser of (1) the Excess Cash Flow for such Distribution
Date (to the extent not used pursuant to clause (iv) of this
definition on such Distribution Date) and (2) the principal
portion of any Realized Losses incurred (or deemed to have
been incurred) on any Mortgage Loans in the calendar month
preceding such Distribution Date; and
(vi) the lesser of (1) the Excess Cash Flow for that
Distribution Date (to the extent not used pursuant to clauses (iv)
and
(v) of this definition on such Distribution Date) and (2) the
Overcollateralization Increase Amount for such
Distribution Date;
minus
(vii) (A) the amount of any Overcollateralization Reduction
Amount for such Distribution Date and (B) the amount of any
Capitalization Reimbursement Amount for such Distribution
Date.
Principal Prepayment: Any payment of principal or other recovery
on a Mortgage Loan, including a recovery that takes the
form of Liquidation Proceeds or Insurance Proceeds, which is
received in advance of its scheduled Due Date and is not
accompanied by
an amount as to interest representing scheduled interest on such
payment due on any date or dates in any month or months
subsequent
to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage
Loan.
Principal Remittance Amount: With respect to any Distribution
Date, all amounts described in clauses (b)(i) through (iii)
of the definition of Principal Distribution Amount for that
Distribution Date.
Program Guide: The Residential Funding Seller Guide for mortgage
collateral sellers that participate in Residential
Funding's standard mortgage programs, and Residential Funding's
Servicing Guide and any other subservicing arrangements which
Residential Funding has arranged to accommodate the servicing of
the Mortgage Loans and in each case all supplements and
amendments
thereto published by Residential Funding.
Purchase Price: With respect to any Mortgage Loan (or REO
Property) required to be or otherwise purchased on any date
pursuant to Section 2.02, 2.03, 2.04 or 4.07, an amount equal to
the sum of (i) 100% of the Stated Principal Balance thereof plus
the
principal portion of any related unreimbursed Advances and (ii)
unpaid accrued interest at either (a) the Adjusted Mortgage Rate
(or
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) plus the rate per annum at which the Servicing Fee is
calculated,
or (b) in the case of a purchase made by the Master Servicer, at
the Net Mortgage Rate (or Modified Net Mortgage Rate in the case
of
a Modified Mortgage Loan) plus the Credit Risk Manager Fee Rate,
in each case on the Stated Principal Balance thereof to the
first
day of the month following the month of purchase from the Due
Date to which interest was last paid by the Mortgagor. With respect
to
any Mortgage Loan (or REO Property) required to be or otherwise
purchased on any date pursuant to Section 4.08, an amount equal
to
the greater of (i) the sum of (a) 100% of the Stated Principal
Balance thereof plus the principal portion of any related
unreimbursed
Advances of such Mortgage Loan (or REO Property) and (b) unpaid
accrued interest at either (1) the Adjusted Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) plus the rate per annum at which the Servicing Fee is
calculated,
or (2) in the case of a purchase made by the Master Servicer, at
the Net Mortgage Rate (or Modified Net Mortgage Rate in the case
of
a Modified Mortgage Loan), in each case on the Stated Principal
Balance thereof to the first day of the month following the month
of
purchase from the Due Date to which interest was last paid by
the Mortgagor, and (ii) the fair market value of such Mortgage Loan
(or
REO Property). The Purchase Price for any Mortgage Loan shall
also include any Premium paid by RFC pursuant to Section 9 of
the
Assignment and Assumption Agreement. Such Premium shall not be
an asset of the REMIC.
Qualified Institutional Buyer: The meaning specified in Rule
144A under the Securities Act.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted
by Residential Funding or the Depositor for a Deleted
Mortgage Loan which must, on the date of such substitution, as
confirmed in an Officers' Certificate delivered to the Trustee,
(i)
have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate
outstanding
principal balance, after such deduction), not in excess of the
Stated Principal Balance of the Deleted Mortgage Loan (the amount
of
any shortfall to be deposited by Residential Funding, in the
Custodial Account in the month of substitution); (ii) have a
Mortgage
Rate and a Net Mortgage Rate no lower than and not more than 1%
per annum higher than the Mortgage Rate and Net Mortgage Rate,
respectively, of the Deleted Mortgage Loan as of the date of
substitution; (iii) have a Loan-to-Value Ratio at the time of
substitution no higher than that of the Deleted Mortgage Loan at
the time of substitution; (iv) have a remaining term to stated
maturity not greater than (and not more than one year less than)
that of the Deleted Mortgage Loan; (v) comply with each
representation and warranty set forth in Sections 2.03 and 2.04
hereof and Section 4 of the Assignment Agreement, (other than
the
representations and warranties set forth therein with respect to
the number of loans (including the related percentage) in excess
of
zero which meet or do not meet a specified criteria); (vi) not
be 30 days or more Delinquent; (vii) not be subject to the
requirements of HOEPA (as defined in the Assignment Agreement);
(viii) have a policy of title insurance, in the form and amount
that
is in material compliance with the Program Guide, that was
effective as of the closing of such Mortgage Loan, is valid and
binding,
and remains in full force and effect, unless the Mortgage
Property is located in the State of Iowa where an attorney's
certificate
has been provided as described in the Program Guide; (ix) if the
Deleted Loan is not a Balloon Loan, not be a Balloon Loan; (x)
with
respect to adjustable rate Mortgage Loans, have a Mortgage Rate
that adjusts with the same frequency and based upon the same Index
as
that of the Deleted Mortgage Loan; (xi) with respect to
adjustable rate Mortgage Loans, have a Note Margin not less than
that of the
Deleted Mortgage Loan; (xii) with respect to adjustable rate
Mortgage Loans, have a Periodic Rate Cap that is equal to that of
the
Deleted Mortgage Loan; (xiii) with respect to adjustable rate
Mortgage Loans, have a next Adjustment Date no later than that of
the
Deleted Mortgage Loan, and (xiv) be secured by a lien with the
same lien priority as the Deleted Loan.
Rating Agency: Each of Standard & Poor's, Moody's and Fitch.
If any agency or a successor is no longer in existence,
"Rating Agency" shall be such statistical credit rating agency,
or other comparable Person, designated by the Depositor, notice
of
which designation shall be given to the Trustee and the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has
occurred, an amount (not less than zero) equal to (i) the Stated
Principal Balance of the Mortgage Loan (or REO Property) as of
the
date of Cash Liquidation or REO Disposition, plus (ii) interest
(and REO Imputed Interest, if any) at the Net Mortgage Rate from
the
Due Date as to which interest was last paid or advanced to
Certificateholders up to the last day of the month in which the
Cash
Liquidation (or REO Disposition) occurred on the Stated
Principal Balance of such Mortgage Loan (or REO Property)
outstanding during
each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in
which
such Cash Liquidation (or REO Disposition) occurred, to the
extent applied as recoveries of interest at the Net Mortgage Rate
and to
principal of the Mortgage Loan, net of the portion thereof
reimbursable to the Master Servicer or any Subservicer with respect
to
related Advances, Servicing Advances or other expenses as to
which the Master Servicer or Subservicer is entitled to
reimbursement
thereunder but which have not been previously reimbursed. With
respect to each Mortgage Loan which is the subject of a
Servicing
Modification, (a) (1) the amount by which the interest portion
of a Monthly Payment or the principal balance of such Mortgage
Loan
was reduced or (2) the sum of any other amounts owing under the
Mortgage Loan that were forgiven and that constitute Servicing
Advances that are reimbursable to the Master Servicer or a
Subservicer, and (b) any such amount with respect to a Monthly
Payment
that was or would have been due in the month immediately
following the month in which a Principal Prepayment or the Purchase
Price of
such Mortgage Loan is received or is deemed to have been
received. With respect to each Mortgage Loan which has become the
subject
of a Deficient Valuation, the difference between the principal
balance of the Mortgage Loan outstanding immediately prior to
such
Deficient Valuation and the principal balance of the Mortgage
Loan as reduced by the Deficient Valuation. With respect to
each
Mortgage Loan which has become the object of a Debt Service
Reduction, the amount of such Debt Service Reduction.
Notwithstanding
the above, neither a Deficient Valuation nor a Debt Service
Reduction shall be deemed a Realized Loss hereunder so long as the
Master
Servicer has notified the Trustee in writing that the Master
Servicer is diligently pursuing any remedies that may exist in
connection with the representations and warranties made
regarding the related Mortgage Loan and either (A) the related
Mortgage Loan
is not in default with regard to payments due thereunder or (B)
delinquent payments of principal and interest under the related
Mortgage Loan and any premiums on any applicable primary hazard
insurance policy and any related escrow payments in respect of
such
Mortgage Loan are being advanced on a current basis by the
Master Servicer or a Subservicer, in either case without giving
effect to
any Debt Service Reduction.
Realized Losses allocated to the Class SB Certificates shall be
allocated first to REMIC III Regular Interest SB-IO in
reduction of the accrued but unpaid interest thereon until such
accrued and unpaid interest shall have been reduced to zero and
then
to REMIC III Regular Interest SB-PO in reduction of the
Uncertificated Principal Balance thereof.
To the extent the Master Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the
Realized Loss with respect to that Mortgage Loan will be reduced
to the extent such recoveries are applied to reduce the
Certificate
Principal Balance of any Class of Certificates on any
Distribution Date.
Record Date: With respect to each Distribution Date and the
LIBOR Certificates, the Business Day immediately preceding such
Distribution Date. With respect to each Distribution Date and
the Certificates (other than the LIBOR Certificates), the close
of
business on the last Business Day of the month next preceding
the month in which the related Distribution Date occurs, except in
the
case of the first Record Date which shall be the Closing
Date.
Reference Bank Rate: As defined in Section 1.02.
Regular Certificates: The Class A Certificates, Class M
Certificates and Class SB Certificates.
Regular Interest: Any one of the regular interests in the
REMICs.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R.ss.ss.229.1100-229.1123, as such may
be
amended from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the
adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005))
or by the
staff of the Commission, or as may be provided by the Commission
or its staff from time to time.
Relief Act: The Servicemembers Civil Relief Act, formerly known
as the Soldiers' and Sailors' Civil Relief Act of 1940.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans
resulting from the Relief Act or similar legislation or
regulations.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code. As used herein, the
term "REMIC" shall mean REMIC I, REMIC II or REMIC III.
REMIC Administrator: Residential Funding Company, LLC. If
Residential Funding Company, LLC is found by a court of
competent jurisdiction to no longer be able to fulfill its
obligations as REMIC Administrator under this Agreement the
Master
Servicer or Trustee acting as successor Master Servicer shall
appoint a successor REMIC Administrator, subject to assumption of
the
REMIC Administrator obligations under this Agreement.
REMIC I: The segregated pool of assets subject hereto (exclusive
of any Premium received pursuant to Section 9 of the
Assignment Agreement, the Supplemental Interest Trust Account,
the Swap Agreement and the SB-AM Swap Agreement), constituting
a
portion of the primary trust created hereby and to be
administered hereunder, with respect to which a separate REMIC
election is to
be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files;
(ii) all payments on and collections in respect of the Mortgage
Loans due after the Cut-off Date (other than
Monthly Payments due in the month of the Cut-off Date) as shall
be on deposit in the Custodial Account or in the Certificate
Account and identified as belonging to the Trust Fund;
(iii) property which secured a Mortgage Loan and which has been
acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of
foreclosure;
(iv) the hazard insurance policies and Primary Insurance
Policies pertaining to the Mortgage Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I Available Distribution Amount: The Available
Distribution Amount increased by the amount of any Net Swap
Payment
described in clause (b)(z) thereof.
REMIC I Distribution Amount: For any Distribution Date, the
REMIC I Available Distribution Amount shall be distributed to
REMIC II in respect of the REMIC I Regular Interests and
Component I of the Class R Certificates in the following amounts
and
priority:
(a) to each REMIC I Regular Interest, pro rata, in an amount
equal to (i) Uncertificated Accrued Interest for
such REMIC I Regular Interest for such Distribution Date, plus
(ii) any amounts payable in respect thereof remaining unpaid
from
previous Distribution Dates;
(b) to the extent of amounts remaining after the distributions
made pursuant to clause (a) above, payments of
principal shall be allocated as follows: first, to REMIC I
Regular Interests I-1-A and I-1-B pro rata until the aggregate
Uncertificated Principal Balance of REMIC I Regular Interests
I-1-A and I-1-B is equal to the aggregate Certicificate
Principal
Balance of the Class A Certificates and Class M Certificates on
such Distribution Date (after giving effect to amounts to be
distributed and Realized Losses to be allocated on such
Distribution Date); and second, to the extent of any
Overcollateralization
Reduction Amount to REMIC I Regular Interest A-I until the
Uncertificated Principal Balance of such REMIC I Regular Interest
is
reduced to zero; and
(c) any remaining amounts to the Class R Certificates in respect
of Component I thereof.
REMIC I Interests: The REMIC I Regular Interests and Component I
of the Class R Certificates.
REMIC I Realized Losses: All Realized Losses on the Mortgage
Loans shall be allocated on each Distribution Date as follows:
first, to REMIC I Regular Interests I-1-A and I-1-B, pro rata in
an amount equal to the aggregate amount of such Realized Losses
allocated to the Class A Certificates and Class M Certificates
on such Distribution Date; and second, to REMIC I Regular Interest
A-I
until the Uncertificated Principal Balance of such REMIC I
Regular Interest has been reduced to zero.
REMIC I Regular Interest. Any of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder
and designated as a "regular interest" in REMIC I. Each REMIC I
Regular Interest shall accrue interest at the related
Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms
and
conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto. The designations for the respective REMIC I
Regular Interests are set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest A-I: A regular interest in REMIC I that
is held as an asset of REMIC II, that has an initial
principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated REMIC
I
Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II: The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and
to
be administered hereunder, with respect to which a separate
REMIC election is to be made, consisting of the REMIC I Regular
Interests.
REMIC II Available Distribution Amount: For any Distribution
Date, the amount distributed from REMIC I to REMIC II on such
Distribution Date in respect of the REMIC I Regular
Interests.
REMIC II Distribution Amount: For any Distribution Date, the
REMIC II Available Distribution Amount shall be distributed to
REMIC III in respect of the REMIC II Regular Interests and
Component II of the Class R Certificates in the following amounts
and
priority:
(a) to REMIC II Regular Interest LT-IO, in an amount equal to
(i) Uncertificated Accrued Interest for such
REMIC II Regular Interest for such Distribution Date, plus (ii)
any amounts in respect thereof remaining unpaid from previous
Distribution Dates;
(b) to the extent of amounts remaining after the distributions
made pursuant to clause (a) above, to REMIC II
Regular Interests LT1, LT2, LT3 and LT4, pro rata, in an amount
equal to (i) their Uncertificated Accrued Interest for such
Distribution Date, plus (ii) any amounts in respect thereof
remaining unpaid from previous Distribution Dates; and
(c) to the extent of amounts remaining after the distributions
made pursuant to clauses (a) and (b) above:
(i) to REMIC II Regular Interests LT2, LT3 and LT4, their
respective Principal
Distribution Amounts;
(ii) to REMIC II Regular Interest LT1 any remainder until the
Uncertificated
Principal Balance thereof is reduced to zero;
(iii) any remainder to REMIC II Regular Interests LT2, LT3 and
LT4, pro rata according
to their respective Uncertificated Principal Balances as reduced
by the distributions deemed made pursuant
to (i) above, until their respective Uncertificated Principal
Balances are reduced to zero; and
(d) to the extent of amounts remaining after the distributions
made pursuant to clauses (a) through (c) above:
(i) first, to each of the REMIC II Regular Interests, pro rata
according to the
amount of unreimbursed Realized Losses allocable to principal
previously allocated to each such REMIC II
Regular Interest, the aggregate amount of any distributions to
the Certificates as reimbursement of such
Realized Losses on such Distribution Date pursuant to clause
(ix) in Section 4.02(c); provided, however,
that any amounts distributed pursuant to this paragraph (d)(i)
of this definition of "REMIC II Distribution
Amount" shall not cause a reduction in the Uncertificated
Principal Balances of any of the REMIC II Regular
Interests; and
(ii) second, to Component II of the Class R Certificates, any
remaining amount.
REMIC II Net WAC Rate: With respect to any Distribution Date, a
per annum rate equal to the weighted average of (x) the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest I-1-B, (y) the Uncertificated REMIC I Pass-Through Rate
for
REMIC I Regular Interest A-I, and (z) with respect to REMIC I
Regular Interest I-1-A, two (2) multiplied by Swap LIBOR, subject
to a
maximum rate equal to its Uncertificated REMIC I Pass-Through
Rate, weighted on the basis of the Uncertificated Principal Balance
of
each such REMIC I Regular Interest for such Distribution
Date.
REMIC II Principal Reduction Amounts: For any Distribution Date,
the amounts by which the principal balances of the
REMIC II Regular Interests LT1, LT2, LT3 and LT4, respectively
will be reduced on such Distribution Date by the allocation of
Realized
Losses and the distribution of principal, determined as
follows:
For purposes of the succeeding formulas the following symbols
shall have the meanings set forth below:
Y1 = the principal balance of the REMIC II Regular Interest LT1
after distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2
after distributions on the prior Distribution Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3
after distributions on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4
after distributions on the prior Distribution Date
(note: Y3 = Y4).
(DELTA)Y1 = the REMIC II Regular Interest LT1 Principal
Reduction Amount.
(DELTA)Y2 = the REMIC II Regular Interest LT2 Principal
Reduction Amount.
(DELTA)Y3 = the REMIC II Regular Interest LT3 Principal
Reduction Amount.
(DELTA)Y4 = the REMIC II Regular Interest LT4 Principal
Reduction Amount.
P0 = the aggregate principal balance of REMIC II Regular
Interests LT1, LT2, LT3 and LT4 after distributions and the
allocation of Realized Losses on the prior Distribution
Date.
P1 = the aggregate principal balance of the REMIC II Regular
Interests LT1, LT2, LT3 and LT4 after distributions and the
allocation of Realized Losses to be made on such Distribution
Date.
(DELTA)P = P0 - P1 = the aggregate of the REMIC II Regular
Interests LT1, LT2, LT3 and LT4 Principal Reduction Amounts.
= the aggregate of the principal portions of Realized Losses to
be allocated to, and the principal distributions to be
made on, the Certificates on such Distribution Date (including
distributions of accrued and unpaid interest on the
Class SB Certificates for prior Distribution Dates).
R0 = the REMIC II Net WAC Rate (stated as a monthly rate) after
giving effect to amounts distributed and Realized Losses
allocated on the prior Distribution Date.
R1 = the REMIC II Net WAC Rate (stated as a monthly rate) after
giving effect to amounts to be distributed and Realized
Losses to be allocated on such Distribution Date.
(alpha) = (Y2 + Y3)/P0. The initial value of (alpha) on the
Closing Date for use on the first Distribution Date
shall be 0.0001.
(gamma)0 = the lesser of (A) the sum for all Classes of
Certificates other than the Class SB Certificates and Class IO
Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the REMIC II Net WAC
Rate, if applicable) for such Class applicable for distributions
to be made on such Distribution Date and (ii) the
aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on
the prior Distribution Date and (B) R0*P0.
(gamma)1 = the lesser of (A) the sum for all Classes of
Certificates other than the Class SB Certificates and Class IO
Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the REMIC II Net WAC
Rate, if applicable) for such Class applicable for distributions
to be made on the next succeeding Distribution Date
and (ii) the aggregate Certificate Principal Balance for such
Class after distributions and the allocation of
Realized Losses to be made on such Distribution Date and (B)
R1*P1.
Then, based on the foregoing definitions:
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - Y3 - Y4;
(DELTA)Y2 = (a/2){(a0R1 - a1R0)/R0R1};
(DELTA)Y3 = (a(DELTA)P - (DELTA)Y2); and
(DELTA)Y4 = (DELTA)Y3.
if both (DELTA)Y2 and (DELTA)Y3, as so determined, are
non-negative numbers. Otherwise:
(1) If (DELTA)Y2, as so determined, is negative, then
(DELTA)Y2 = 0
(DELTA)Y3 = a{a1R0P0 - a0R1P1}/{a1R0};
(DELTA)Y4 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
(2) If (DELTA)Y3, as so determined, is negative, then
(DELTA)Y3 = 0;
(DELTA)Y2 = a{a0R1P1 - a1R0P0}/{2R1R0P1 - a1R0};
(DELTA)Y4 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
REMIC II Realized Losses: Realized Losses on the Mortgage Loans
shall be allocated to the REMIC II Regular Interests as
follows. The interest portion of Realized Losses on the Mortgage
Loans, if any, shall be allocated among REMIC II Regular
Interests
LT1, LT2 and LT4, pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof. Any interest
portion of such Realized Losses in excess of the amount
allocated pursuant to the preceding sentence shall be treated as a
principal
portion of Realized Losses not attributable to any specific
Mortgage Loan and allocated pursuant to the succeeding sentences.
The
principal portion of Realized Losses with respect to the
Mortgage Loans shall be allocated to the REMIC II Regular Interests
as
follows: first, to REMIC II Regular Interests LT2, LT3 and LT4,
pro-rata according to their respective REMIC II Principal
Reduction
Amounts to the extent thereof in reduction of the Uncertificated
Principal Balance of such REMIC II Regular Interests and,
second,
the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to REMIC II Regular Interest LT1
in
reduction of the Uncertificated Principal Balance thereof.
REMIC II Regular Interests: REMIC II Regular Interest LT1, REMIC
II Regular Interest LT2, REMIC II Regular Interest LT3,
REMIC II Regular Interest LT4 and REMIC II Regular Interest
LT-IO.
REMIC II Regular Interest LT1: A regular interest in REMIC II
that is held as an asset of REMIC III, that has an initial
principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated REMIC
II
Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT1 Principal Distribution Amount: For
any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT1 Principal Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT1 on such Distribution Date.
REMIC II Regular Interest LT2: A regular interest in REMIC II
that is held as an asset of REMIC III, that has an initial
principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated REMIC
II
Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT2 Principal Distribution Amount: For
any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT2 Principal Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT2 on such Distribution Date.
REMIC II Regular Interest LT3: A regular interest in REMIC II
that is held as an asset of REMIC III, that has an initial
principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated REMIC
II
Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT3 Principal Distribution Amount: For
any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT3 Principal Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT3 on such Distribution Date.
REMIC II Regular Interest LT4: A regular interest in REMIC II
that is held as an asset of REMIC III, that has an initial
principal balance equal to the related Uncertificated Principal
Balance, that bears interest at the related Uncertificated REMIC
II
Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT4 Principal Distribution Amount: For
any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT4 Principal Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT4 on such Distribution Date.
REMIC II Regular Interest LT-IO: A regular interest in REMIC II
that is held as an asset of REMIC III, that has no initial
principal balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate on its Uncertificated
Notional
Amount, and that has such other terms as are described
herein.
REMIC III: The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and
to
be administered hereunder, with respect to which a separate
REMIC election is to be made, consisting of the REMIC II
Regular
Interests.
REMIC III Available Distribution Amount: For any Distribution
Date, the amount distributed from REMIC II to REMIC III on
such Distribution Date in respect of the REMIC II Regular
Interests.
REMIC III Distribution Amount: For any Distribution Date, the
REMIC III Available Distribution Amount shall be deemed
distributed to the Class A, Class M and Class SB Certificates in
respect of the portion of such Certificates representing
ownership
of REMIC III Regular Interests and Component III of the Class R
Certificates in the following amounts and priority:
(i) to the Class SB Certificateholders in respect of the REMIC
III Regular Interest IO, the amount distributable with
respect to such REMIC III Regular Interest as described in the
Preliminary Statement, being paid from and in reduction of the
REMIC III Available Distribution Amount for such Distribution
Date;
(ii) to the Class A Certificateholders, the Accrued Certificate
Interest payable on the Class A Certificates with respect
to such Distribution Date, plus any related amounts accrued
pursuant to this clause (i) but remaining unpaid from any prior
Distribution Date, being paid from and in reduction of the REMIC
III Available Distribution Amount for such Distribution Date;
(iii) to the Class M Certificateholders, from the amount, if
any, of the Available Distribution Amount remaining after the
foregoing distributions, Accrued Certificate Interest payable on
the Class M Certificates with respect to such Distribution
Date,
plus any related amounts accrued pursuant to this clause (ii)
but remaining unpaid from any prior Distribution Date,
sequentially, to
the Class M-1 Certificateholders, Class M-2 Certificateholders,
Class M-3 Certificateholders, Class M-4 Certificateholders, Class
M-5
Certificateholders, Class M-6 Certificateholders, Class M-7
Certificateholders, Class M-8 Certificateholders and Class M-9
Certificateholders, in that order, being paid from and in
reduction of the REMIC III Available Distribution Amount for
such
Distribution Date;
(iv) the Principal Distribution Amount shall be distributed as
follows, to be applied to reduce the principal balance of
the REMIC III Regular Interest related to the applicable
Certificates in each case to the extent of the remaining
Principal
Distribution Amount:
(A) first, the Class A Principal Distribution Amount shall be
distributed sequentially to (i) the Class A-1,
Class A-1A and Class A-1B Certificateholders, pro rata, (ii) the
Class A-2 Certificateholders and (iii) the Class A-3
Certificateholders, in that order, in each case until the
Certificate Principal Balance thereof is reduced to zero;
(B) second, to the Class M-1 Certificateholders, the Class M-1
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-1 Certificates has
been reduced to zero;
(C) third, to the Class M-2 Certificateholders, the Class M-2
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-2 Certificates has
been reduced to zero;
(D) fourth, to the Class M-3 Certificateholders, the Class M-3
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-3 Certificates has
been reduced to zero;
(E) fifth, to the Class M-4 Certificateholders, the Class M-4
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-4 Certificates has
been reduced to zero;
(F) sixth, to the Class M-5 Certificateholders, the Class M-5
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-5 Certificates has
been reduced to zero;
(G) seventh, to the Class M-6 Certificateholders, the Class M-6
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-6 Certificates has
been reduced to zero;
(H) eighth, to the Class M-7 Certificateholders, the Class M-7
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-7 Certificates has
been reduced to zero;
(I) ninth, to the Class M-8 Certificateholders, the Class M-8
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-8 Certificates has
been reduced to zero; and
(J) tenth, to the Class M-9 Certificateholders, the Class M-9
Principal Distribution Amount, until the
Certificate Principal Balance of the Class M-9 Certificates has
been reduced to zero; and
(v) to the Class A Certificateholders and Class M
Certificateholders, the amount of any Prepayment Interest
Shortfalls
allocated thereto for such Distribution Date, on a pro rata
basis based on Prepayment Interest Shortfalls allocated thereto to
the
extent not offset by Eligible Master Servicing Compensation on
such Distribution Date;
(vi) to the Class A Certificateholders and Class M
Certificateholders, the amount of any Prepayment Interest
Shortfalls
previously allocated thereto remaining unpaid from prior
Distribution Dates together with interest thereon at the related
Pass
Through Rate, on a pro rata basis based on unpaid Prepayment
Interest Shortfalls previously allocated thereto;
(vii) to the Class SB Certificateholders, (A) from the amount,
if any, of the REMIC III Available Distribution Amount
remaining after the foregoing distributions, the sum of (I)
Accrued Certificate Interest thereon, (II) the amount of any
Overcollateralization Reduction Amount for such Distribution
Date and (III) for any Distribution Date after the Certificate
Principal
Balance of each Class of Class A Certificates and Class M
Certificates has been reduced to zero, the Overcollateralization
Amount and
(B) from prepayment charges on deposit in the Certificate
Account, any prepayment charges received on the Mortgage Loans
during the
related Prepayment Period; and
(viii) to the Holders of the Class R Certificates, the balance,
if any, of the REMIC III Available Distribution Amount, in
respect of Component III thereof.
REMIC III Regular Interest SB-PO: A separate non-certificated
beneficial ownership interest in REMIC III issued hereunder
and designated as a Regular Interest in REMIC III. REMIC III
Regular Interest SB-PO shall have no entitlement to interest, and
shall
be entitled to distributions of principal subject to the terms
and conditions hereof, in aggregate amount equal to the initial
Certificate Principal Balance of the Class SB Certificates as
set forth in the Preliminary Statement hereto.
REMIC III Regular Interest SB-IO: A separate non-certificated
beneficial ownership interests in REMIC III issued hereunder
and designated as a Regular Interest in REMIC III. REMIC III
Regular Interest SB-IO shall have no entitlement to principal,
and
shall be entitled to distributions of interest subject to the
terms and conditions hereof, in aggregate amount equal to the
interest
distributable with respect to the Class SB Certificates pursuant
to the terms and conditions hereof.
REMIC III Regular Interest IO: A separate non-certificated
beneficial ownership interest in REMIC III issued hereunder and
designated as a Regular Interest in REMIC III. REMIC III Regular
Interest IO shall have no entitlement to principal, and shall
be
entitled to distributions of interest subject to the terms and
conditions hereof, in aggregate amount equal to the interest
distributable with respect to REMIC II Regular Interest
LT-IO.
REMIC III Regular Interests: REMIC III Regular Interests SB-IO,
SB-PO and IO, together with the Class A Certificates and
Class M Certificates exclusive of their respective rights to
receive the payment of Basis Risk Shortfalls and other amounts
pursuant
to the SB-AM Swap Agreement.
REMIC Administrator: Residential Funding Company, LLC. If
Residential Funding Company, LLC is found by a court of
competent jurisdiction to no longer be able to fulfill its
obligations as REMIC Administrator under this Agreement the
Master
Servicer or Trustee acting as successor Master Servicer shall
appoint a successor REMIC Administrator, subject to assumption of
the
REMIC Administrator obligations under this Agreement
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which
appear at Sections 860A through 860G of Subchapter M of Chapter
1 of the Code, and related provisions, and temporary and final
regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and
published
rulings, notices and announcements promulgated thereunder, as
the foregoing may be in effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on
behalf of the Trustee for the benefit of the Certificateholders
of any REO Property pursuant to Section 3.14.
REO Disposition: With respect to any REO Property, a
determination by the Master Servicer that it has received
substantially all Insurance Proceeds, Liquidation Proceeds, REO
Proceeds and other payments and recoveries (including proceeds of
a
final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO
Property.
REO Imputed Interest: With respect to any REO Property, for any
period, an amount equivalent to interest (at a rate equal
to the Net Mortgage Rate that would have been applicable to the
related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of
acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of
any REO Property (including, without limitation, proceeds
from the rental of the related Mortgaged Property) which
proceeds are required to be deposited into the Custodial Account
only upon
the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master
Servicer on behalf of the Trust Fund for the benefit of the
Certificateholders through foreclosure or deed in lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (a)
has been subject to an interest rate reduction, (b) has been
subject to a term extension or (c) has had amounts owing on such
Mortgage Loan capitalized by adding such amount to the Stated
Principal Balance of such Mortgage Loan; provided, however, that
a Mortgage Loan modified in accordance with (a) above for a
temporary period shall not be a Reportable Modified Mortgage
Loan if such Mortgage Loan has not been delinquent in payments
of
principal and interest for six months since the date of such
modification if that interest rate reduction is not made
permanent
thereafter.
Repurchase Event: As defined in the Assignment Agreement.
Request for Release: A request for release, the form of which is
attached as Exhibit G hereto, or an electronic request in
a form acceptable to the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy which is required to be maintained from
time to time under this Agreement, the Program Guide or the
related Subservicing Agreement in respect of such Mortgage
Loan.
Required Overcollateralization Amount: With respect to any
Distribution Date, (a) prior to the Stepdown Date, an amount
equal to 3.20% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date, (b) on or after the
Stepdown
Date if a Trigger Event is not in effect, the greater of (i) an
amount equal to 6.40% of the aggregate outstanding Stated
Principal
Balance of the Mortgage Loans after giving effect to
distributions made on that Distribution Date and (ii) the
Overcollateralization
Floor and (c) on or after the Stepdown Date if a Trigger Event
is in effect, an amount equal to the Required
Overcollateralization
Amount from the immediately preceding Distribution Date. The
Required Overcollateralization Amount may be reduced so long as
written
confirmation is obtained from each Rating Agency that such
reduction shall not reduce the ratings assigned to any Class of
Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as
of the
Closing Date by such Rating Agency.
Residential Funding: Residential Funding Company, LLC, a
Delaware limited liability company, in its capacity as seller
of
the Mortgage Loans to the Depositor and any successor
thereto.
Responsible Officer: When used with respect to the Trustee, any
officer of the Corporate Trust Department of the Trustee,
including any Senior Vice President, any Vice President, any
Assistant Vice President, any Assistant Secretary, any Trust
Officer or
Assistant Trust Officer, or any other officer of the Trustee, in
each case with direct responsibility for the administration of
this
Agreement.
RFC Exemption: As defined in Section 5.02(e)(ii).
Rule 144A: Rule 144A under the Securities Act of 1933, as in
effect from time to time.
SB-AM Swap Agreement: The swap between the Class SB
Certificateholder and the Class A Certificateholders and Class
M
Certificateholders evidenced by the confirmation attached hereto
as Exhibit Q and incorporated herein by reference.
Securitization Transaction: Any transaction involving a sale or
other transfer of mortgage loans directly or indirectly to
an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed
securities.
Seller: With respect to any Mortgage Loan, a Person, including
any Subservicer, that executed a Seller's Agreement
applicable to such Mortgage Loan.
Seller's Agreement: An agreement for the origination and sale of
Mortgage Loans generally in the form of the seller
contract referred to or contained in the Program Guide, or in
such other form as has been approved by the Master Servicer and
the
Depositor.
Senior Enhancement Percentage: For any Distribution Date, the
fraction, expressed as a percentage, the numerator of which
is the sum of (i) the aggregate Certificate Principal Balance of
the Class M Certificates and (ii) the Overcollateralization
Amount,
in each case prior to the distribution of the Principal
Distribution Amount on such Distribution Date and the denominator
of which is
the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that
Distribution
Date.
Servicing Accounts: The account or accounts created and
maintained pursuant to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out
of pocket" costs and expenses incurred in connection with
a default, delinquency or other unanticipated event by the
Master Servicer or a Subservicer in the performance of its
servicing
obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property
or,
with respect to a cooperative loan, the related cooperative
apartment, (ii) any enforcement or judicial proceedings,
including
foreclosures, including any expenses incurred in relation to any
such proceedings that result from the Mortgage Loan being
registered
on the MERS(R)System, (iii) the management and liquidation of
any REO Property, (iv) any mitigation procedures implemented in
accordance with Section 3.07, and (v) compliance with the
obligations under Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14,
including,
if the Master Servicer or any Affiliate of the Master Servicer
provides services such as appraisals and brokerage services that
are
customarily provided by Persons other than servicers of mortgage
loans, reasonable compensation for such services.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time
to time.
Servicing Fee: With respect to any Mortgage Loan and
Distribution Date, the fee payable monthly to the Master Servicer
in
respect of master servicing compensation that accrues at an
annual rate equal to the Servicing Fee Rate multiplied by the
Stated
Principal Balance of such Mortgage Loan as of the related Due
Date in the related Due Period, as may be adjusted pursuant to
Section 3.16(e).
Servicing Fee Rate: With respect to any Mortgage Loan, the per
annum rate designated on the Mortgage Loan Schedule as the
"MSTR SERV FEE," as may be adjusted with respect to successor
Master Servicers as provided in Section 7.02, which rate shall
never be
greater than the Mortgage Rate of such Mortgage Loan.
Servicing Modification: Any reduction of the interest rate on or
the outstanding principal balance of a Mortgage Loan, any
extension of the final maturity date of a Mortgage Loan, and any
increase to the Stated Principal Balance of a Mortgage Loan by
adding to the Stated Principal Balance unpaid principal and
interest and other amounts owing under the Mortgage Loan, in each
case
pursuant to a modification of a Mortgage Loan that is in
default, or for which, in the judgment of the Master Servicer,
default is
reasonably foreseeable in accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of
the Mortgage Loans whose name and specimen signature appear on a
list of servicing officers furnished to the Trustee by the
Master
Servicer on the Closing Date, as such list may from time to time
be amended.
Sixty-Plus Delinquency Percentage: With respect to any
Distribution Date and the Mortgage Loans, the arithmetic
average,
for each of the three Distribution Dates ending with such
Distribution Date, of the fraction, expressed as a percentage,
equal to (x)
the aggregate Stated Principal Balance of the Mortgage Loans
that are 60 or more days delinquent in payment of principal and
interest
for that Distribution Date, including Mortgage Loans in
foreclosure and REO, over (y) the aggregate Stated Principal
Balance of all
of the Mortgage Loans immediately preceding that Distribution
Date.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. or its successors
in
interest.
Startup Date: The day designated as such pursuant to Article X
hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property, as of any date of determination, (i)
the sum of (a) the Cut-off Date Principal Balance of the
Mortgage Loan and (b) any amount by which the Stated Principal
Balance of
the Mortgage Loan has been increased pursuant to a Servicing
Modification, minus (ii) the sum of (a) the principal portion of
the
Monthly Payments due with respect to such Mortgage Loan or REO
Property during each Due Period ending with the Due Period relating
to
the most recent Distribution Date which were received or with
respect to which an Advance was made, (b) all Principal
Prepayments
with respect to such Mortgage Loan or REO Property, and all
Insurance Proceeds, Liquidation Proceeds and REO Proceeds, to the
extent
applied by the Master Servicer as recoveries of principal in
accordance with Section 3.14 with respect to such Mortgage Loan or
REO
Property, in each case which were distributed pursuant to
Section 4.02 on any previous Distribution Date, and (c) any
Realized Loss
incurred with respect to such Mortgage Loan allocated to
Certificateholders with respect thereto for any previous
Distribution Date.
Stepdown Date: That Distribution Date which is the earlier to
occur of (a) the Distribution Date immediately succeeding the
Distribution Date on which the aggregate Certificate Principal
Balance of the Class A Certificates has been reduced to zero and
(b)
the later to occur of (i) the Distribution Date in January 2010
and (ii) the first Distribution Date on which the Senior
Enhancement
Percentage is equal to or greater than 55.60%.
Subordination: The provisions described in Section 4.05 relating
to the allocation of Realized Losses.
Subordination Percentage: With respect to the Class A
Certificates and any Class of Class M Certificates, the
respective
percentage set forth below.
Subordination
Class Percentage
A 44.40%
M-1 63.90%
M-2 70.90%
M-3 75.10%
M-4 79.00%
M-5 82.60%
M-6 86.00%
M-7 89.20%
M-8 91.60%
M-9 93.60%
Subsequent Recoveries: As of any Distribution Date, amounts
received by the Master Servicer (net of any related expenses
permitted to be reimbursed pursuant to Section 3.10) or surplus
amounts held by the Master Servicer to cover estimated expenses
(including, but not limited to, recoveries in respect of the
representations and warranties made by the related Seller pursuant
to
the applicable Seller's Agreement and assigned to the Trustee
pursuant to Section 2.04) specifically related to a Mortgage Loan
that
was the subject of a Cash Liquidation or an REO Disposition
prior to the related Prepayment Period and that resulted in a
Realized
Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time
of reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has
entered into a Subservicing Agreement and who generally
satisfied
the requirements set forth in the Program Guide in respect of
the qualification of a Subservicer as of the date of its approval
as a
Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and
interest on a Mortgage Loan which is advanced by the
related Subservicer (net of its Subservicing Fee) pursuant to
the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master
Servicer and any Subservicer relating to servicing and
administration of certain Mortgage Loans as provided in Section
3.02, generally in the form of the servicer contract referred to
or
contained in the Program Guide or in such other form as has been
approved by the Master Servicer and the Depositor.
Subservicing Fee: With respect to any Mortgage Loan, the fee
payable monthly to the related Subservicer (or, in the case of
a Nonsubserviced Mortgage Loan, to the Master Servicer) in
respect of subservicing and other compensation that accrues with
respect
to each Distribution Date at an annual rate designated as
"SUBSERV FEE" on the Mortgage Loan Schedule.
Supplemental Interest Trust Account: The separate trust account
created and maintained by the Supplemental Interest Trust
Trustee pursuant to Section 4.10(a).
Supplemental Interest Trust: The separate trust created and
maintain by the Supplemental Interest Trust Trustee pursuant to
Section 4.10(a). The primary activities of the Supplemental
Interest Trust created pursuant to this Agreement shall be:
(i) holding the Swap Agreement;
(ii) receiving collections or making payments with respect to
the Swap Agreement; and
(iii) engaging in other activities that are necessary or
incidental to accomplish these
limited purposes, which activities cannot be contrary to the
status of the Supplemental Interest Trust as a
qualified special purpose entity under existing accounting
literature.
Supplemental Interest Trust Trustee: As defined in the preamble
hereto.
Swap Agreement: The interest rate swap agreement between the
Swap Counterparty and the Supplemental Interest Trust Trustee,
on behalf of the Supplemental Interest Trust, which agreement
provides for Net Swap Payments and Swap Termination Payments to
be
paid, as provided therein, together with any schedules,
confirmations, credit support annexes or other agreements relating
thereto,
attached hereto as Exhibit O.
Swap Agreement Notional Balance: As to the Swap Agreement and
each Floating Rate Payer Payment Date and Fixed Rate Payer
Payment Date (each as defined in the Swap Agreement) the amount
as determined under the Swap Agreement for such Floating Rate
Payer
Payment Date.
Swap Counterparty: The swap counterparty under the Swap
Agreement either (a) entitled to receive payments from the
Supplemental Interest Trust Trustee from amounts payable by the
Supplemental Interest Trust under this Agreement or (b) required
to
make payments to the Supplemental Interest Trust Trustee for
payment to the Supplemental Interest Trust, in either case pursuant
to
the terms of the Swap Agreement, and any successor in interest
or assign. Initially, the Swap Counterparty shall be Credit
Suisse
International.
Swap Counterparty Trigger Event: With respect to any
Distribution Date, (i) an Event of Default under the Swap
Agreement
with respect to which the Swap Counterparty is a Defaulting
Party, (ii) a Termination Event under the Swap Agreement with
respect to
which the Swap Counterparty is the sole Affected Party, or (iii)
an additional termination event under the Swap Agreement with
respect to which the Swap Counterparty is the sole Affected
Party.
Swap LIBOR: USD-LIBOR-BBA as determined pursuant to the Swap
Agreement.
Swap Payment Date: With respect to each distribution date is the
business day (as defined in the swap agreement)
immediately preceding the 25th day of the related month,
beginning in January 2007, to and including the termination date
(being in
December 2011).
Swap Termination Payment: Upon the occurrence of an Early
Termination Date, the payment to be made by the Supplemental
Interest Trust Trustee on behalf of the Supplemental Interest
Trust to the Swap Counterparty from payments from the
Supplemental
Interest Trust, or by the Swap Counterparty to the Supplemental
Interest Trust Trustee for payment to the Supplemental Interest
Trust, as applicable, pursuant to the terms of the Swap
Agreement.
Tax Returns: The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment
Conduit Income Tax Return, including Schedule Q thereto,
Quarterly Notice to Residual Interest Holders of REMIC Taxable
Income or Net
Loss Allocation, or any successor forms, to be filed on behalf
of any REMIC hereunder due to its classification as a REMIC under
the
REMIC Provisions, together with any and all other information,
reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or
any other governmental taxing authority under any applicable
provisions of federal, state or local tax laws.
Telerate Screen Page 3750: As defined in Section 1.02.
Transfer: Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership
Interest in a Certificate.
Transfer Affidavit and Agreement: As defined in Section
5.02(f).
Transferee: Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if either
(a) the related Sixty-Plus Delinquency Percentage, as determined
on that Distribution Date, equals or exceeds 28.80% of the
Senior
Enhancement Percentage for that Distribution Date or (b) on or
after the Distribution Date in January 2009, the aggregate amount
of
Realized Losses on the Mortgage Loans as a percentage of the
Cut-Off Date Balance exceeds the applicable amount set forth
below:
January 2009 to December 2009: 1.60% with respect to January
2009, plus an additional 1/12th of 2.00% for
each month thereafter.
January 2010 to December 2010: 3.60% with respect to January
2010, plus an additional 1/12th of 2.10% for
each month thereafter.
January 2011 to December 2011: 5.70% with respect to January
2011, plus an additional 1/12th of 1.70% for
each month thereafter.
January 2012 to December 2012: 7.40% with respect to January
2012, plus an additional 1/12th of 0.95% for
each month thereafter.
January 2013 to December 2013: 8.35% with respect to January
2013, plus an additional 1/12th of 0.10% for
each month thereafter.
January 2014 and thereafter: 8.45%.
Trustee: As defined in the preamble hereto.
Trust Fund: Collectively, the assets of each REMIC hereunder and
the assets in the Supplemental Interest Trust.
Uncertificated Accrued Interest: With respect to any
Uncertificated Regular Interest for any Distribution Date, one
month's
interest at the related Uncertificated Pass Through Rate for
such Distribution Date, accrued on the Uncertificated Principal
Balance
or Uncertificated Notional Amount, as applicable, immediately
prior to such Distribution Date. Uncertificated Accrued Interest
for
the Uncertificated Regular Interests shall accrue on the basis
of a 360 day year consisting of twelve 30 day months. For purposes
of
calculating the amount of Uncertificated Accrued Interest for
the REMIC I Regular Interests for any Distribution Date, any
Prepayment
Interest Shortfalls and Relief Act Shortfalls (to the extent not
covered by Compensating Interest) shall be allocated among REMIC
I
Regular Interests, pro rata, based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application
of
this sentence. For purposes of calculating the amount of
Uncertificated Accrued Interest for the REMIC II Regular Interests
for any
Distribution Date, any Prepayment Interest Shortfalls and Relief
Act Shortfalls (to the extent not covered by Compensating
Interest)
shall be allocated among the REMIC II Regular Interests, pro
rata, based on, and to the extent of, Uncertificated Accrued
Interest,
as calculated without application of this sentence.
Uncertificated Interest on REMIC III Regular Interest SB-PO shall
be zero.
Uncertificated Accrued Interest on the REMIC III Regular
Interest SB-IO for each Distribution Date shall equal Accrued
Certificate
Interest for the Class SB Certificates.
Uncertificated Notional Amount: With respect to the Class SB
Certificates or the REMIC III Regular Interest SB-IO,
immediately prior to any Distribution Date, the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular
Interests. With respect to REMIC II Regular Interest LT-IO,
immediately prior to any Distribution Date, the Uncertificated
Principal
Balance of REMIC I Regular Interest I-1-A. With respect to REMIC
III Regular Interest IO, immediately prior to any Distribution
Date,
an amount equal to the Uncertificated Notional Amount of REMIC
II Regular Interest LT-IO.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate or the Uncertificated REMIC II Pass-Through
Rate, as applicable.
Uncertificated Principal Balance: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of
determination. The Uncertificated Principal Balance of each
REMIC Regular Interest shall never be less than zero. With respect
to
REMIC III Regular Interest SB-PO the initial amount set forth
with respect thereto in the Preliminary Statement as reduced by
distributions deemed made in respect thereof pursuant to Section
4.02 and Realized Losses allocated thereto pursuant to Section
4.05.
Uncertificated Regular Interests: The REMIC I Regular Interests
and the REMIC II Regular Interests.
Uncertificated REMIC I Pass-Through Rate: With respect to any
Distribution Date and (A) REMIC I Regular Interest I-1-A, a
per annum rate equal to twice the weighted average Net Mortgage
Rate of the Mortgage Loans, subject to a maximum rate of twice
the
fixed rate specified in the definition of Fixed Swap Payment;
(B) REMIC I Regular Interest I-1-B, the greater of (x) a per annum
rate
equal to the excess, if any, of (i) twice the weighted average
Net Mortgage Rate of the Mortgage Loans over (ii) twice the fixed
rate
specified in the definition of Fixed Swap Payment and (y)
0.00000%, and (C) REMIC I Regular Interest A-I, the weighted
average Net
Mortgage Rate of the Mortgage Loans.
Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date and (A) REMIC II Regular Interests LT1 and
LT2, the REMIC II Net WAC Rate, (B) REMIC II Regular Interest
LT3, zero (0.00%), (C) REMIC II Regular Interest LT4, twice the
REMIC II Net WAC Rate, and (D) REMIC II Regular Interest LT-IO,
the excess of (i) the Uncertificated REMIC I Pass-Through Rate
for
REMIC I Regular Interest I-1-A over (ii) two (2) multiplied by
Swap LIBOR.
Uniform Single Attestation Program for Mortgage Bankers: The
Uniform Single Attestation Program for Mortgage Bankers, as
published by the Mortgage Bankers Association of America and
effective with respect to fiscal periods ending on or after
December 15,
1995.
Uninsured Cause: Any cause of damage to property subject to a
Mortgage such that the complete restoration of such property
is not fully reimbursable by the hazard insurance policies.
United States Person: Either (i) a citizen or resident of the
United States, a corporation, partnership or other entity
(treated as a corporation or partnership for United States
federal income tax purposes) created or organized in, or under the
laws
of, the United States, any state thereof, or the District of
Columbia (except in the case of a partnership, to the extent
provided in
Treasury regulations) provided that, for purposes solely of the
restrictions on the transfer of Class R Certificates, no
partnership
or other entity treated as a partnership for United States
federal income tax purposes shall be treated as a United States
Person
unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation
for
United States federal income tax purposes are required by the
applicable operative agreement to be United States Persons, or
an
estate that is described in Section 7701(a)(30)(D) of the Code,
or a trust that is described in Section 7701(a)(30)(E) of the
Code,
or (ii) as defined in Regulation S, as the context may
require.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. 98.00% of
all of the Voting Rights shall be allocated among Holders of the
Class A Certificates and Class M Certificates, in proportion to
the
outstanding Certificate Principal Balances of their respective
Certificates; 1% of all of the Voting Rights shall be allocated to
the
Holders of the Class SB Certificates, and 1% of all of the
Voting Rights shall be allocated to the Holders of the Class R
Certificates; in each case to be allocated among the
Certificates of such Class in accordance with their respective
Percentage
Interests.
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on
the LIBOR Certificates for any Interest Accrual Period will
be determined as of each LIBOR Rate Adjustment Date. On each
LIBOR Rate Adjustment Date, or if such LIBOR Rate Adjustment Date
is
not a Business Day, then on the next succeeding Business Day,
LIBOR shall be established by the Trustee and, as to any
Interest
Accrual Period, will equal the rate for one month United States
dollar deposits that appears on the Telerate Screen Page 3750 as
of
11:00 a.m., London time, on such LIBOR Rate Adjustment Date.
"Telerate Screen Page 3750" means the display designated as page
3750
on the Bridge Telerate Service (or such other page as may
replace page 3750 on that service for the purpose of displaying
London
interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page
on
that service, or if such service is no longer offered, LIBOR
shall be so established by use of such other service for
displaying
LIBOR or comparable rates as may be selected by the Trustee
after consultation with the Master Servicer), the rate will be
the
Reference Bank Rate. The "Reference Bank Rate" will be
determined on the basis of the rates at which deposits in U.S.
Dollars are
offered by the reference banks (which shall be any three major
banks that are engaged in transactions in the London interbank
market,
selected by the Trustee after consultation with the Master
Servicer) as of 11:00 a.m., London time, on the LIBOR Rate
Adjustment Date
to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the aggregate
Certificate
Principal Balance of the LIBOR Certificates then outstanding.
The Trustee shall request the principal London office of each of
the
reference banks to provide a quotation of its rate. If at least
two such quotations are provided, the rate will be the
arithmetic
mean of the quotations rounded up to the next multiple of 1/16%.
If on such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean of the rates
quoted by one or more major banks in New York City, selected by
the
Trustee after consultation with the Master Servicer, as of 11:00
a.m., New York City time, on such date for loans in U.S. Dollars
to
leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance
of the
LIBOR Certificates then outstanding. If no such quotations can
be obtained, the rate will be LIBOR for the prior Distribution
Date;
provided however, if, under the priorities described above,
LIBOR for a Distribution Date would be based on LIBOR for the
previous
Distribution Date for the third consecutive Distribution Date,
the Trustee, after consultation with the Master Servicer, shall
select
an alternative comparable index (over which the Trustee has no
control), used for determining one-month Eurodollar lending rates
that
is calculated and published (or otherwise made available) by an
independent party. The establishment of LIBOR by the Trustee on
any
LIBOR Rate Adjustment Date and the Trustee's subsequent
calculation of the Pass-Through Rates applicable to the LIBOR
Certificates
for the relevant Interest Accrual Period, in the absence of
manifest error, will be final and binding. Promptly following each
LIBOR
Rate Adjustment Date the Trustee shall supply the Master
Servicer with the results of its determination of LIBOR on such
date.
Furthermore, the Trustee shall supply to any Certificateholder
so requesting by calling the Trustee's bondholders services group
at
1-800-934-6802, the Pass-Through Rate on the LIBOR Certificates
for the current and the immediately preceding Interest Accrual
Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby assign to the Trustee in respect of the
Trust Fund without recourse all the right, title and interest of
the Depositor in and to (i) the Mortgage Loans, including all
interest and principal on or with respect to the Mortgage Loans
due on or after the Cut-off Date (other than Monthly Payments due
in
the month of the Cut-off Date); and (ii) all proceeds of the
foregoing. The Depositor, the Master Servicer and the Trustee
agree
that it is not intended that any mortgage loan be included in
the Trust Fund that is either (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
Loan as defined in the Massachusetts Predatory Home Loan
Practices
Act effective November 7, 2004 or (iv) a High-Cost Home Loan as
defined in the Indiana High Cost Home Loan Law Act effective
January
1, 2005.
(b) In connection with such assignment, and contemporaneously
with the delivery of this Agreement, except as set forth in
Section 2.01(c) below and subject to Section 2.01(d) below, the
Depositor does hereby (1) with respect to each Mortgage Loan,
deliver
to the Master Servicer (or an Affiliate of the Master Servicer)
each of the documents or instruments described in clause (ii)
below
(and the Master Servicer shall hold (or cause such Affiliate to
hold) such documents or instruments in trust for the use and
benefit
of all present and future Certificateholders), (2) with respect
to each MOM Loan, deliver to, and deposit with, the Trustee, or
the
Custodian, as the duly appointed agent of the Trustee for such
purpose, the documents or instruments described in clauses (i) and
(v)
below, (3) with respect to each Mortgage Loan that is not a MOM
Loan but is registered on the MERS(R)System, deliver to, and
deposit
with, the Trustee, or the Custodian, as the duly appointed agent
of the Trustee for such purpose, the documents or instruments
described in clauses (i), (iv) and (v) below and (4) with
respect to each Mortgage Loan that is not a MOM Loan and is not
registered
on the MERS(R)System, deliver to, and deposit with, the Trustee,
or the Custodian, as the duly appointed agent of the Trustee for
such
purpose, the documents or instruments described in clauses (i),
(iii), (iv) and (v) below.
(i) The original Mortgage Note, endorsed without recourse to the
order of the Trustee and showing an unbroken chain of
endorsements from the originator thereof to the Person endorsing
it to the Trustee, or with respect to any Destroyed Mortgage
Note,
an original lost note affidavit from the related Seller or
Residential Funding stating that the original Mortgage Note was
lost,
misplaced or destroyed, together with a copy of the related
Mortgage Note.
(ii) The original Mortgage, noting the presence of the MIN of
the Mortgage Loan and language indicating that the Mortgage Loan
is
a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon or a copy of the original Mortgage
with
evidence of recording indicated thereon.
(iii) The assignment (which may be included in one or more
blanket assignments if permitted by applicable law) of the Mortgage
to
the Trustee with evidence of recording indicated thereon or a
copy of such assignment with evidence of recording indicated
thereon.
(iv) The original recorded assignment or assignments of the
Mortgage showing an unbroken chain of title from the originator
to
the Person assigning it to the Trustee (or to MERS, if the
Mortgage Loan is registered on the MERS(R)System and noting the
presence of
a MIN) with evidence of recordation noted thereon or attached
thereto, or a copy of such assignment or assignments of the
Mortgage
with evidence of recording indicated thereon.
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage
Loan,
or a copy of each modification, assumption agreement or
preferred loan agreement.
The Depositor may, in lieu of delivering the original of the
documents set forth in Section 2.01(b)(iii), (iv) and (v) (or
copies thereof) to the Trustee or the Custodian, deliver such
documents to the Master Servicer, and the Master Servicer shall
hold
such documents in trust for the use and benefit of all present
and future Certificateholders until such time as is set forth in
the
next sentence. Within thirty Business Days following the earlier
of (i) the receipt of the original of all of the documents or
instruments set forth in Section 2.01(b) (iii), (iv) and (v) (or
copies thereof) for any Mortgage Loan and (ii) a written request
by
the Trustee to deliver those documents with respect to any or
all of the Mortgage Loans then being held by the Master Servicer,
the
Master Servicer shall deliver a complete set of such documents
to the Trustee or the Custodian, as duly appointed agent of the
Trustee.
(c) Notwithstanding the provisions of Section 2.01(b), in the
event that in connection with any Mortgage Loan, if the
Depositor
cannot deliver the original of the Mortgage, any assignment,
modification, assumption agreement or preferred loan agreement (or
copy
thereof as permitted by Section 2.01(b)) with evidence of
recording thereon concurrently with the execution and delivery of
this
Agreement because of (i) a delay caused by the public recording
office where such Mortgage, assignment, modification,
assumption
agreement or preferred loan agreement as the case may be, has
been delivered for recordation, or (ii) a delay in the receipt
of
certain information necessary to prepare the related
assignments, the Depositor shall deliver or cause to be delivered
to the Trustee
or the respective Custodian a copy of such Mortgage, assignment,
modification, assumption agreement or preferred loan agreement.
The Depositor shall promptly cause to be recorded in the
appropriate public office for real property records the
Assignment
referred to in clause (iii) of Section 2.01(b), except (a) in
states where, in an Opinion of Counsel acceptable to the Master
Servicer, such recording is not required to protect the
Trustee's interests in the Mortgage Loan or (b) if MERS is
identified on the
Mortgage or on a properly recorded assignment of the Mortgage,
as applicable, as the mortgagee of record solely as nominee for
Residential Funding and its successors and assigns. If any
Assignment is lost or returned unrecorded to the Depositor because
of any
defect therein, the Depositor shall prepare a substitute
Assignment or cure such defect, as the case may be, and cause
such
Assignment to be recorded in accordance with this paragraph. The
Depositor shall promptly deliver or cause to be delivered to
the
applicable person described in Section 2.01(b), any Assignment
or substitute Assignment (or copy thereof) recorded in connection
with
this paragraph, with evidence of recording indicated thereon
upon receipt thereof from the public recording office or from
the
related Subservicer or Seller.
If the Depositor delivers to the Trustee or Custodian any
Mortgage Note or Assignment of Mortgage in blank, the Depositor
shall, or shall cause the Custodian to, complete the endorsement
of the Mortgage Note and the Assignment of Mortgage in the name
of
the Trustee in conjunction with the Interim Certification issued
by the Custodian, as contemplated by Section 2.02.
In connection with the assignment of any Mortgage Loan
registered on the MERS(R)System, the Depositor further agrees that
it
will cause, at the Depositor's own expense, within 30 Business
Days after the Closing Date, the MERS(R)System to indicate that
such
Mortgage Loans have been assigned by the Depositor to the
Trustee in accordance with this Agreement for the benefit of
the
Certificateholders by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this
Agreement)
in such computer files (a) the code in the field which
identifies the specific Trustee and (b) the code in the field "Pool
Field"
which identifies the series of the Certificates issued in
connection with such Mortgage Loans. The Depositor further agrees
that it
will not, and will not permit the Master Servicer to, and the
Master Servicer agrees that it will not, alter the codes referenced
in
this paragraph with respect to any Mortgage Loan during the term
of this Agreement unless and until such Mortgage Loan is
repurchased
in accordance with the terms of this Agreement.
(d) It is intended that the conveyances by the Depositor to the
Trustee of the Mortgage Loans as provided for in this
Section 2.01 and the Uncertificated Regular Interests be
construed as a sale by the Depositor to the Trustee of the Mortgage
Loans and
the Uncertificated Regular Interests for the benefit of the
Certificateholders. Further, it is not intended that any such
conveyance
be deemed to be a pledge of the Mortgage Loans and the
Uncertificated Regular Interests by the Depositor to the Trustee to
secure a
debt or other obligation of the Depositor. Nonetheless, (a) this
Agreement is intended to be and hereby is a security agreement
within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction; (b) the conveyances provided for in
this Section 2.01 shall be deemed to be (1) a grant by the
Depositor to
the Trustee of a security interest in all of the Depositor's
right (including the power to convey title thereto), title and
interest,
whether now owned or hereafter acquired, in and to (A) the
Mortgage Loans, including the related Mortgage Note, the Mortgage,
any
insurance policies and all other documents in the related
Mortgage File, (B) all amounts payable pursuant to the Mortgage
Loans or
the Swap Agreement in accordance with the terms thereof, (C) any
Uncertificated Regular Interests and any and all general
intangibles, payment intangibles, accounts, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit,
goods, letters of credit, advices of credit and investment
property and other property of whatever kind or description now
existing
or hereafter acquired consisting of, arising from or relating to
any of the foregoing, and (D) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including without
limitation all
amounts from time to time held or invested in the Certificate
Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment
by the Depositor to the Trustee of any security interest in any
and
all of Residential Funding's right (including the power to
convey title thereto), title and interest, whether now owned or
hereafter
acquired, in and to the property described in the foregoing
clauses (1)(A), (B), (C) and (D) granted by Residential Funding to
the
Depositor pursuant to the Assignment Agreement; (c) the
possession by the Trustee, the Custodian or any other agent of the
Trustee of
Mortgage Notes or such other items of property as constitute
instruments, money, payment intangibles, negotiable documents,
goods,
deposit accounts, letters of credit, advices of credit,
investment property, certificated securities or chattel paper shall
be deemed
to be "possession by the secured party," or possession by a
purchaser or a person designated by such secured party, for
purposes of
perfecting the security interest pursuant to the Minnesota
Uniform Commercial Code and the Uniform Commercial Code of any
other
applicable jurisdiction as in effect (including, without
limitation, Sections 8-106, 9-313 and 9-106 thereof); and (d)
notifications
to persons holding such property, and acknowledgments, receipts
or confirmations from persons holding such property, shall be
deemed
notifications to, or acknowledgments, receipts or confirmations
from, securities intermediaries, bailees or agents of, or
persons
holding for, (as applicable) the Trustee for the purpose of
perfecting such security interest under applicable law.
The Depositor and, at the Depositor's direction, Residential
Funding and the Trustee shall, to the extent consistent with
this Agreement, take such reasonable actions as may be necessary
to ensure that, if this Agreement were deemed to create a
security
interest in the Mortgage Loans and the Uncertificated Regular
Interests and the other property described above, such security
interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as
such
throughout the term of this Agreement. Without limiting the
generality of the foregoing, the Depositor shall prepare and
deliver to
the Trustee not less than 15 days prior to any filing date and,
the Trustee shall forward for filing, or shall cause to be
forwarded
for filing, at the expense of the Depositor, all filings
necessary to maintain the effectiveness of any original filings
necessary
under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest in or lien
on the
Mortgage Loans and the Uncertificated Regular Interests, as
evidenced by an Officers' Certificate of the Depositor, including
without
limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of
Residential
Funding, the Depositor or the Trustee (such preparation and
filing shall be at the expense of the Trustee, if occasioned by a
change
in the Trustee's name), (2) any change of location of the place
of business or the chief executive office of Residential Funding
or
the Depositor, (3) any transfer of any interest of Residential
Funding or the Depositor in any Mortgage Loan or (4) any transfer
of
any interest of Residential Funding or the Depositor in any
Uncertificated Regular Interests.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage
Loans subject to a Custodial Agreement, and based solely upon
a receipt or certification executed by the Custodian, receipt by
the respective Custodian as the duly appointed agent of the
Trustee)
of the documents referred to in Section 2.01(b)(i) above (except
that for purposes of such acknowledgement only, a Mortgage Note
may
be endorsed in blank and an Assignment of Mortgage may be in
blank) and declares that it, or the Custodian as its agent, holds
and
will hold such documents and the other documents constituting a
part of the Custodial Files delivered to it, or a Custodian as
its
agent, in trust for the use and benefit of all present and
future Certificateholders. The Trustee or Custodian (the Custodian
being
so obligated under a Custodial Agreement) agrees, for the
benefit of Certificateholders, to review each Custodial File
delivered to
it pursuant to Section 2.01(b) within 90 days after the Closing
Date to ascertain that all required documents (specifically as
set
forth in Section 2.01(b)), have been executed and received, and
that such documents relate to the Mortgage Loans identified on
the
Mortgage Loan Schedule, as supplemented, that have been conveyed
to it, and to deliver to the Trustee a certificate (the
"Interim
Certification") to the effect that all documents required to be
delivered pursuant to Section 2.01(b) above have been executed
and
received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any
exceptions
listed on Schedule A attached to such Interim Certification.
Upon delivery of the Custodial Files by the Depositor or the
Master
Servicer, the Trustee shall acknowledge receipt (or, with
respect to Mortgage Loans subject to a Custodial Agreement, and
based
solely upon a receipt or certification executed by the
Custodian, receipt by the respective Custodian as the duly
appointed agent of
the Trustee) of the documents referred to in Section 2.01(b)
above.
If the Custodian, as the Trustee's agent, finds any document or
documents constituting a part of a Custodial File to be
missing or defective, upon receipt of notification from the
Custodian as specified in the succeeding sentence, the Trustee
shall
promptly so notify or cause the Custodian to notify the Master
Servicer and the Depositor. Pursuant to Section 2.3 of the
Custodial
Agreement, the Custodian will notify the Master Servicer, the
Depositor and the Trustee of any such omission or defect found by
it in
respect of any Custodial File held by it in respect of the items
received by it pursuant to the Custodial Agreement. If such
omission or defect materially and adversely affects the
interests in the related Mortgage Loan of the Certificateholders,
the Master
Servicer shall promptly notify the related Subservicer or Seller
of such omission or defect and request that such Subservicer or
Seller correct or cure such omission or defect within 60 days
from the date the Master Servicer was notified of such omission
or
defect and, if such Subservicer or Seller does not correct or
cure such omission or defect within such period, that such
Subservicer
or Seller purchase such Mortgage Loan from the Trust Fund at its
Purchase Price, in either case within 90 days from the date the
Master Servicer was notified of such omission or defect;
provided that if the omission or defect would cause the Mortgage
Loan to be
other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur
within 90 days
from the date such breach was discovered. The Purchase Price for
any such Mortgage Loan shall be deposited or caused to be
deposited
by the Master Servicer in the Custodial Account maintained by it
pursuant to Section 3.07 and, upon receipt by the Trustee of
written
notification of such deposit signed by a Servicing Officer, the
Trustee, Master Servicer or the Custodian, as the case may be,
shall
release the contents of any related Mortgage File in its
possession to the owner of such Mortgage Loan (or such owner's
designee) and
the Trustee shall execute and deliver such instruments of
transfer or assignment prepared by the Master Servicer, in each
case
without recourse, as shall be necessary to vest in the
Subservicer or Seller or its designee, as the case may be, any
Mortgage Loan
released pursuant hereto and thereafter such Mortgage Loan shall
not be part of the Trust Fund. In furtherance of the foregoing
and
Section 2.04, if the Subservicer or Seller or Residential
Funding that repurchases the Mortgage Loan is not a member of MERS
and the
Mortgage is registered on the MERS(R)System, the Master
Servicer, at its own expense and without any right of
reimbursement, shall
cause MERS to execute and deliver an assignment of the Mortgage
in recordable form to transfer the Mortgage from MERS to such
Subservicer or Seller or Residential Funding and shall cause
such Mortgage to be removed from registration on the MERS(R)System
in
accordance with MERS' rules and regulations. It is understood
and agreed that the obligation of the Subservicer or Seller, to
so
cure or purchase any Mortgage Loan as to which a material and
adverse defect in or omission of a constituent document exists
shall
constitute the sole remedy respecting such defect or omission
available to Certificateholders or the Trustee on behalf of
Certificateholders.
Section 2.03. Representations, Warranties and Covenants of the
Master Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws governing its
creation and existence and is or will be in compliance with the
laws of each state in which any Mortgaged Property is located to
the
extent necessary to ensure the enforceability of each Mortgage
Loan in accordance with the terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of
this Agreement will not violate the Master Servicer's
Certificate of Incorporation or Bylaws or constitute a material
default (or an
event which, with notice or lapse of time, or both, would
constitute a material default) under, or result in the material
breach of,
any material contract, agreement or other instrument to which
the Master Servicer is a party or which may be applicable to the
Master
Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Depositor, constitutes a valid,
legal and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof subject to
applicable
bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally and
to
general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law;
(iv) The Master 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 might have consequences that would materially and
adversely
affect the condition (financial or other) or operations of the
Master Servicer or its properties or might have consequences
that
would materially adversely affect its performance hereunder;
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer
which
would prohibit its entering into this Agreement or performing
its obligations under this Agreement;
(vi) The Master Servicer shall comply in all material respects
in the performance of this Agreement with all reasonable rules
and
requirements of each insurer under each Required Insurance
Policy;
(vii) No information, certificate of an officer, statement
furnished in writing or report delivered to the Depositor, any
Affiliate of the Depositor or the Trustee by the Master Servicer
will, to the knowledge of the Master Servicer, contain any
untrue
statement of a material fact or omit a material fact necessary
to make the information, certificate, statement or report not
misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be
familiar
with the terms thereof. The terms of each existing Subservicing
Agreement and each designated Subservicer are acceptable to the
Master Servicer and any new Subservicing Agreements will comply
with the provisions of Section 3.02;
(ix) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the
Mortgage Loans that are registered with MERS; and
(x) The Servicing Guide of the Master Servicer requires that the
Subservicer for each Mortgage Loan accurately and fully reports
its borrower credit files to each of the Credit Repositories in
a timely manner.
It is understood and agreed that the representations and
warranties set forth in this Section 2.03(a) shall survive delivery
of the
respective Custodial Files to the Trustee or the Custodian. Upon
discovery by either the Depositor, the Master Servicer, the
Trustee
or the Custodian of a breach of any representation or warranty
set forth in this Section 2.03(a) which materially and
adversely
affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt
written
notice to the other parties (the Custodian being so obligated
under a Custodial Agreement). Within 90 days of its discovery or
its
receipt of notice of such breach, the Master Servicer shall
either (i) cure such breach in all material respects or (ii) to
the
extent that such breach is with respect to a Mortgage Loan or a
related document, purchase such Mortgage Loan from the Trust Fund
at
the Purchase Price and in the manner set forth in Section 2.02;
provided that if the breach would cause the Mortgage Loan to be
other
than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure or repurchase must occur within 90 days
from
the date such breach was discovered. The obligation of the
Master Servicer to cure such breach or to so purchase such Mortgage
Loan
shall constitute the sole remedy in respect of a breach of a
representation and warranty set forth in this Section 2.03(a)
available
to the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) The Depositor hereby represents and warrants to the Trustee
for the benefit of the Certificateholders that as of the
Closing
Date (or, if otherwise specified below, as of the date so
specified): immediately prior to the conveyance of the Mortgage
Loans to
the Trustee, the Depositor had good title to, and was the sole
owner of, each Mortgage Loan free and clear of any pledge,
lien,
encumbrance or security interest (other than rights to servicing
and related compensation) and such conveyance validly transfers
ownership of the Mortgage Loans to the Trustee free and clear of
any pledge, lien, encumbrance or security interest; and (ii)
each
Mortgage Loan constitutes a qualified mortgage under Section
860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1).
It is understood and agreed that the representations and
warranties set forth in this Section 2.03(b) shall survive
delivery
of the respective Custodial Files to the Trustee or the
Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the
Trustee or the Custodian of a breach of any of the
representations and warranties set forth in this Section 2.03(b)
which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties
(the
Custodian being so obligated under a Custodial Agreement);
provided, however, that in the event of a breach of the
representation and
warranty set forth in Section 2.03(b)(ii), the party discovering
such breach shall give such notice within five days of
discovery.
Within 90 days of its discovery or its receipt of notice of
breach, the Depositor shall either (i) cure such breach in all
material
respects or (ii) purchase such Mortgage Loan from the Trust Fund
at the Purchase Price and in the manner set forth in Section
2.02;
provided that the Depositor shall have the option to substitute
a Qualified Substitute Mortgage Loan or Loans for such Mortgage
Loan
if such substitution occurs within two years following the
Closing Date; provided that if the omission or defect would cause
the
Mortgage Loan to be other than a "qualified mortgage" as defined
in Section 860G(a)(3) of the Code, any such cure, substitution
or
repurchase must occur within 90 days from the date such breach
was discovered. Any such substitution shall be effected by the
Depositor under the same terms and conditions as provided in
Section 2.04 for substitutions by Residential Funding. It is
understood
and agreed that the obligation of the Depositor to cure such
breach or to so purchase or substitute for any Mortgage Loan as to
which
such a breach has occurred and is continuing shall constitute
the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of the
Certificateholders. Notwithstanding the foregoing, the Depositor
shall not be
required to cure breaches or purchase or substitute for Mortgage
Loans as provided in this Section 2.03(b) if the substance of
the
breach of a representation set forth above also constitutes
fraud in the origination of the Mortgage Loan.
Section 2.04. Representations and Warranties of Sellers.
The Depositor, as assignee of Residential Funding under the
Assignment Agreement, hereby assigns to the Trustee for the
benefit of the Certificateholders all of its right, title and
interest in respect of the Assignment Agreement applicable to a
Mortgage Loan as and to the extent set forth in the Assignment
Agreement. Insofar as the Assignment Agreement relates to the
representations and warranties made by Residential Funding in
respect of such Mortgage Loan and any remedies provided thereunder
for
any breach of such representations and warranties, such right,
title and interest may be enforced by the Master Servicer on behalf
of
the Trustee and the Certificateholders. Upon the discovery by
the Depositor, the Master Servicer, the Trustee or the Custodian of
a
breach of any of the representations and warranties made in the
Assignment Agreement in respect of any Mortgage Loan or of any
Repurchase Event which materially and adversely affects the
interests of the Certificateholders in such Mortgage Loan, the
party
discovering such breach shall give prompt written notice to the
other parties (the Custodian being so obligated under a
Custodial
Agreement). The Master Servicer shall promptly notify
Residential Funding of such breach or Repurchase Event and request
that
Residential Funding either (i) cure such breach or Repurchase
Event in all material respects within 90 days from the date the
Master
Servicer was notified of such breach or Repurchase Event or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase
Price and in the manner set forth in Section 2.02.
Upon the discovery by the Depositor, the Master Servicer, the
Trustee or the Custodian of a breach of any of such
representations and warranties set forth in the Assignment
Agreement in respect of any Mortgage Loan which materially and
adversely
affects the interests of the Certificateholders in such Mortgage
Loan, the party discovering such breach shall give prompt
written
notice to the other parties (the Custodian being so obligated
under a Custodial Agreement). The Master Servicer shall
promptly
notify Residential Funding of such breach of a representation or
warranty set forth in the Assignment Agreement and request that
Residential Funding either (i) cure such breach in all material
respects within 90 days from the date the Master Servicer was
notified of such breach or (ii) purchase such Mortgage Loan from
the Trust Fund within 90 days of the date of such written notice
of
such breach at the Purchase Price and in the manner set forth in
Section 2.02; provided that Residential Funding shall have the
option to substitute a Qualified Substitute Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within
two
years following the Closing Date; provided that if the breach
would cause the Mortgage Loan to be other than a "qualified
mortgage"
as defined in Section 860G(a)(3) of the Code, any such cure or
substitution must occur within 90 days from the date the breach
was
discovered. If the breach of representation and warranty that
gave rise to the obligation to repurchase or substitute a
Mortgage
Loan pursuant to Section 4 of the Assignment Agreement was the
representation and warranty set forth in clause (x) of Section
4
thereof, then the Master Servicer shall request that Residential
Funding pay to the Trust Fund, concurrently with and in addition
to
the remedies provided in the preceding sentence, an amount equal
to any liability, penalty or expense that was actually incurred
and
paid out of or on behalf of the Trust Fund, and that directly
resulted from such breach, or if incurred and paid by the Trust
Fund
thereafter, concurrently with such payment. In the event that
Residential Funding elects to substitute a Qualified Substitute
Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to
this Section 2.04, Residential Funding shall deliver to the
Trustee
for the benefit of the Certificateholders with respect to such
Qualified Substitute Mortgage Loan or Loans, the original
Mortgage
Note, the Mortgage, an Assignment of the Mortgage in recordable
form, and such other documents and agreements as are required
by
Section 2.01, with the Mortgage Note endorsed as required by
Section 2.01. No substitution will be made in any calendar month
after
the Determination Date for such month. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of
substitution shall not be part of the Trust Fund and will be
retained by the Master Servicer and remitted by the Master Servicer
to
Residential Funding on the next succeeding Distribution Date.
For the month of substitution, distributions to the
Certificateholders
will include the Monthly Payment due on a Deleted Mortgage Loan
for such month and thereafter Residential Funding shall be
entitled
to retain all amounts received in respect of such Deleted
Mortgage Loan. The Master Servicer shall amend or cause to be
amended the
Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Qualified Substitute Mortgage Loan or Loans
and the Master Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms
of
this Agreement and the related Subservicing Agreement in all
respects, Residential Funding shall be deemed to have made the
representations and warranties with respect to the Qualified
Substitute Mortgage Loan (other than those of a statistical
nature)
contained in the Assignment Agreement as of the date of
substitution, and the covenants, representations and warranties set
forth in
this Section 2.04, and in Section 2.03(b) hereof.
In connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Master Servicer shall determine the amount (if any)
by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans (in each case after application of the principal
portion of the Monthly Payments due in the month of substitution
that
are to be distributed to the Certificateholders in the month of
substitution). Residential Funding shall deposit or cause the
related Seller to deposit the amount of such shortfall into the
Custodial Account on the day of substitution, without any
reimbursement therefor. Residential Funding shall give notice in
writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of
such shortfall and (subject to Section 10.01(f)) by an Opinion
of
Counsel to the effect that such substitution will not cause (a)
any federal tax to be imposed on the Trust Fund, including
without
limitation, any federal tax imposed on "prohibited transactions"
under Section 860F(a)(1) of the Code or on "contributions after
the
startup date" under Section 860G(d)(1) of the Code or (b) any
portion of any REMIC created hereunder to fail to qualify as a
REMIC at
any time that any Certificate is outstanding.
It is understood and agreed that the obligation of the Seller or
Residential Funding, as the case may be, to cure such
breach or purchase (and in the case of Residential Funding to
substitute for) such Mortgage Loan as to which such a breach
has
occurred and is continuing and to make any additional payments
required under the Assignment Agreement in connection with a breach
of
the representation and warranty in clause (x) of Section 4
thereof shall constitute the sole remedy respecting such breach
available
to the Certificateholders or the Trustee on behalf of the
Certificateholders. If the Master Servicer is Residential Funding,
then
the Trustee shall also have the right to give the notification
and require the purchase or substitution provided for in the
second
preceding paragraph in the event of such a breach of a
representation or warranty made by Residential Funding in the
Assignment
Agreement. In connection with the purchase of or substitution
for any such Mortgage Loan by Residential Funding, the Trustee
shall
assign to Residential Funding all of the Trustee's right, title
and interest in respect of the Assignment Agreement applicable
to
such Mortgage Loan.
Section 2.05. Execution and Authentication of Certificates;
Conveyance of Uncertificated REMIC Regular Interests.
(a) The Trustee acknowledges the assignment to it of the
Mortgage Loans and the delivery of the Custodial Files to it, or
the
Custodian on its behalf, subject to any exceptions noted,
together with the assignment to it of all other assets included in
the
Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant
to the written request of the Depositor executed by an officer
of the Depositor, has executed and caused to be authenticated
and
delivered to or upon the order of the Depositor the Certificates
in authorized denominations which evidence ownership of the
entire
Trust Fund.
(b) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise
convey in trust to the Trustee without recourse all the right,
title and interest of the Depositor in and to the REMIC I
Regular
Interests and the REMIC II Regular Interests for the benefit of
the Holders of each Class of Certificates (other than Component I
and
Component II of the Class R Certificates). The Trustee
acknowledges receipt of the REMIC I Regular Interests and REMIC II
Regular
Interests, and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the Holders of each
Class
of Certificates (other than Component I and Component II of the
Class R Certificates). The interests evidenced by Component III
of
the Class R Certificates, together with the REMIC III Regular
Interests, constitute the entire beneficial ownership interest in
REMIC
III.
Section 2.06. Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in
the following activities:
(a) to sell the Certificates to the Depositor in exchange for
the Mortgage Loans;
(b) to enter into and perform its obligations under this
Agreement;
(c) to engage in those activities that are necessary, suitable
or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(d) subject to compliance with this Agreement, to engage in such
other activities as may be required in connection with
conservation of the Trust Fund and the making of distributions
to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities. Notwithstanding the provisions of Section 11.01,
the
trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by
the
terms of this Agreement while any Certificate is outstanding,
and this Section 2.06 may not be amended, without the consent of
the
Certificateholders evidencing a majority of the aggregate Voting
Rights of the Certificates.
Section 2.07. Agreement Regarding Ability to Disclose.
The Depositor, the Master Servicer and the Trustee hereby agree
that, notwithstanding any other express or implied agreement
to the contrary, any and all Persons, and any of their
respective employees, representatives, and other agents may
disclose,
immediately upon commencement of discussions, to any and all
Persons, without limitation of any kind, the tax treatment and
tax
structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to any
of
them relating to such tax treatment and tax structure. For
purposes of this paragraph, the terms "tax," "tax treatment,"
"tax
structure," and "tax benefit" are defined under Treasury
Regulationss.1.6011 4(c)
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and
the
respective Mortgage Loans, following such procedures as it would
employ in its good faith business judgment and which are normal
and
usual in its general mortgage servicing activities, and shall
have full power and authority, acting alone or through Subservicers
as
provided in Section 3.02, to do any and all things which it may
deem necessary or desirable in connection with such servicing
and
administration. Without limiting the generality of the
foregoing, the Master Servicer in its own name or in the name of
a
Subservicer is hereby authorized and empowered by the Trustee
when the Master Servicer or the Subservicer, as the case may
be,
believes it appropriate in its best judgment, to execute and
deliver, on behalf of the Certificateholders and the Trustee or any
of
them, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge, or of consent to
assumption or modification in connection with a proposed
conveyance, or of assignment of any Mortgage and Mortgage Note in
connection
with the repurchase of a Mortgage Loan and all other comparable
instruments, or with respect to the modification or re-recording of
a
Mortgage for the purpose of correcting the Mortgage, the
subordination of the lien of the Mortgage in favor of a public
utility
company or government agency or unit with powers of eminent
domain, the taking of a deed in lieu of foreclosure, the
commencement,
prosecution or completion of judicial or non-judicial
foreclosure, the conveyance of a Mortgaged Property to the related
insurer, the
acquisition of any property acquired by foreclosure or deed in
lieu of foreclosure, or the management, marketing and conveyance
of
any property acquired by foreclosure or deed in lieu of
foreclosure with respect to the Mortgage Loans and with respect to
the
Mortgaged Properties. The Master Servicer further is authorized
and empowered by the Trustee, on behalf of the
Certificateholders
and the Trustee, in its own name or in the name of the
Subservicer, when the Master Servicer or the Subservicer, as the
case may be,
believes it is appropriate in its best judgment to register any
Mortgage Loan on the MERS(R)System, or cause the removal from
the
registration of any Mortgage Loan on the MERS(R)System, to
execute and deliver, on behalf of the Trustee and the
Certificateholders or
any of them, any and all instruments of assignment and other
comparable instruments with respect to such assignment or
re-recording
of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred
in
connection with the actions described in the preceding sentence
shall be borne by the Master Servicer in accordance with
Section 3.16(c), with no right of reimbursement; provided, that
if, as a result of MERS discontinuing or becoming unable to
continue
operations in connection with the MERS(R)System, it becomes
necessary to remove any Mortgage Loan from registration on the
MERS(R)
System and to arrange for the assignment of the related
Mortgages to the Trustee, then any related expenses shall be
reimbursable to
the Master Servicer as set forth in Section 3.10(a)(ii).
Notwithstanding the foregoing, subject to Section 3.07(a), the
Master
Servicer shall not permit any modification with respect to any
Mortgage Loan that would both constitute a sale or exchange of
such
Mortgage Loan within the meaning of Section 1001 of the Code and
any proposed, temporary or final regulations promulgated
thereunder
(other than in connection with a proposed conveyance or
assumption of such Mortgage Loan that is treated as a Principal
Prepayment in
Full pursuant to Section 3.13(d) hereof) and cause any REMIC
created hereunder to fail to qualify as a REMIC under the Code.
The
Trustee shall furnish the Master Servicer with any powers of
attorney and other documents necessary or appropriate to enable
the
Master Servicer to service and administer the Mortgage Loans.
The Trustee shall not be liable for any action taken by the
Master
Servicer or any Subservicer pursuant to such powers of attorney
or other documents. In servicing and administering any
Nonsubserviced
Mortgage Loan, the Master Servicer shall, to the extent not
inconsistent with this Agreement, comply with the Program Guide as
if it
were the originator of such Mortgage Loan and had retained the
servicing rights and obligations in respect thereof.
(b) In connection with servicing and administering the Mortgage
Loans, the Master Servicer and any Affiliate of the Master
Servicer (i) may perform services such as appraisals and
brokerage services that are customarily provided by Persons other
than
servicers of mortgage loans, and shall be entitled to reasonable
compensation therefor in accordance with Section 3.10 and (ii)
may,
at its own discretion and on behalf of the Trustee, obtain
credit information in the form of a "credit score" from a
Credit
Repository.
(c) All costs incurred by the Master Servicer or by Subservicers
in effecting the timely payment of taxes and assessments on the
properties subject to the Mortgage Loans shall not, for the
purpose of calculating monthly distributions to the
Certificateholders,
be added to the amount owing under the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loan so permit,
and
such costs shall be recoverable to the extent permitted by
Section 3.10(a)(ii).
(d) The Master Servicer may enter into one or more agreements in
connection with the offering of pass-through certificates
evidencing interests in one or more of the Certificates
providing for the payment by the Master Servicer of amounts
received by the
Master Servicer as servicing compensation hereunder and required
to cover certain Prepayment Interest Shortfalls on the Mortgage
Loans, which payment obligation will thereafter be an obligation
of the Master Servicer hereunder.
(e) The relationship of the Master Servicer (and of any
successor to the Master Servicer) to the Depositor under this
Agreement
is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(f) The Master Servicer shall comply with the terms of Section 8
of the Assignment Agreement.
Section 3.02. Subservicing Agreements Between Master Servicer
and Subservicers; Enforcement of Subservicers' Obligations.
(a) The Master Servicer may continue in effect Subservicing
Agreements entered into by Residential Funding and Subservicers
prior to the execution and delivery of this Agreement, and may
enter into new Subservicing Agreements with Subservicers, for
the
servicing and administration of all or some of the Mortgage
Loans. Each Subservicer shall be either (i) an institution the
accounts
of which are insured by the FDIC or (ii) another entity that
engages in the business of originating or servicing mortgage loans,
and
in either case shall be authorized to transact business in the
state or states in which the related Mortgaged Properties it is
to
service are situated, if and to the extent required by
applicable law to enable the Subservicer to perform its obligations
hereunder
and under the Subservicing Agreement, and in either case shall
be a Freddie Mac, Fannie Mae or HUD approved mortgage servicer.
Each
Subservicer of a Mortgage Loan shall be entitled to receive and
retain, as provided in the related Subservicing Agreement and
in
Section 3.07, the related Subservicing Fee from payments of
interest received on such Mortgage Loan after payment of all
amounts
required to be remitted to the Master Servicer in respect of
such Mortgage Loan. For any Mortgage Loan that is a
Nonsubserviced
Mortgage Loan, the Master Servicer shall be entitled to receive
and retain an amount equal to the Subservicing Fee from payments
of
interest. Unless the context otherwise requires, references in
this Agreement to actions taken or to be taken by the Master
Servicer
in servicing the Mortgage Loans include actions taken or to be
taken by a Subservicer on behalf of the Master Servicer. Each
Subservicing Agreement will be upon such terms and conditions as
are generally required by, permitted by or consistent with the
Program Guide and are not inconsistent with this Agreement and
as the Master Servicer and the Subservicer have agreed. With
the
approval of the Master Servicer, a Subservicer may delegate its
servicing obligations to third-party servicers, but such
Subservicer
will remain obligated under the related Subservicing Agreement.
The Master Servicer and a Subservicer may enter into amendments
thereto or a different form of Subservicing Agreement, and the
form referred to or included in the Program Guide is merely
provided
for information and shall not be deemed to limit in any respect
the discretion of the Master Servicer to modify or enter into
different Subservicing Agreements; provided, however, that any
such amendments or different forms shall be consistent with and
not
violate the provisions of either this Agreement or the Program
Guide in a manner which would materially and adversely affect
the
interests of the Certificateholders. The Program Guide and any
other Subservicing Agreement entered into between the Master
Servicer
and any Subservicer shall require the Subservicer to accurately
and fully report its borrower credit files to each of the
Credit
Repositories in a timely manner.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the
Certificateholders, shall use its best reasonable efforts to
enforce the obligations of each Subservicer under the related
Subservicing Agreement and of each Seller under the related
Seller's Agreement, to the extent that the non-performance of any
such
obligation would have a material and adverse effect on a
Mortgage Loan, including, without limitation, the obligation to
purchase a
Mortgage Loan on account of defective documentation, as
described in Section 2.02, or on account of a breach of a
representation or
warranty, as described in Section 2.04. Such enforcement,
including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements or Seller's Agreements,
as appropriate, and the pursuit of other appropriate remedies,
shall
be in such form and carried out to such an extent and at such
time as the Master Servicer would employ in its good faith
business
judgment and which are normal and usual in its general mortgage
servicing activities. The Master Servicer shall pay the costs
of
such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds
all amounts due in respect of the related Mortgage Loan or (ii)
from a
specific recovery of costs, expenses or attorneys fees against
the party against whom such enforcement is directed. For purposes
of
clarification only, the parties agree that the foregoing is not
intended to, and does not, limit the ability of the Master
Servicer
to be reimbursed for expenses that are incurred in connection
with the enforcement of a Seller's obligations and are
reimbursable
pursuant to Section 3.10(a)(vii).
Section 3.03. Successor Subservicers.
The Master Servicer shall be entitled to terminate any
Subservicing Agreement that may exist in accordance with the
terms
and conditions of such Subservicing Agreement and without any
limitation by virtue of this Agreement; provided, however, that in
the
event of termination of any Subservicing Agreement by the Master
Servicer or the Subservicer, the Master Servicer shall either act
as
servicer of the related Mortgage Loan or enter into a
Subservicing Agreement with a successor Subservicer which will be
bound by the
terms of the related Subservicing Agreement. If the Master
Servicer or any Affiliate of Residential Funding acts as servicer,
it
will not assume liability for the representations and warranties
of the Subservicer which it replaces. If the Master Servicer
enters
into a Subservicing Agreement with a successor Subservicer, the
Master Servicer shall use reasonable efforts to have the
successor
Subservicer assume liability for the representations and
warranties made by the terminated Subservicer in respect of the
related
Mortgage Loans and, in the event of any such assumption by the
successor Subservicer, the Master Servicer may, in the exercise of
its
business judgment, release the terminated Subservicer from
liability for such representations and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or
arrangements
between the Master Servicer or a Subservicer or reference to
actions taken through a Subservicer or otherwise, the Master
Servicer
shall remain obligated and liable to the Trustee, and
Certificateholders for the servicing and administering of the
Mortgage Loans in
accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such
Subservicing
Agreements or arrangements or by virtue of indemnification from
the Subservicer or the Depositor and to the same extent and under
the
same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. The Master
Servicer
shall be entitled to enter into any agreement with a Subservicer
or Seller for indemnification of the Master Servicer and
nothing
contained in this Agreement shall be deemed to limit or modify
such indemnification.
Section 3.05. No Contractual Relationship Between Subservicer
and Trustee or Certificateholders.
Any Subservicing Agreement that may be entered into and any
other transactions or services relating to the Mortgage Loans
involving a Subservicer in its capacity as such and not as an
originator shall be deemed to be between the Subservicer and the
Master
Servicer alone, and the Trustee and Certificateholders shall not
be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the
Subservicer in its capacity as such except as set forth in Section
3.06. The
foregoing provision shall not in any way limit a Subservicer's
obligation to cure an omission or defect or to repurchase a
Mortgage
Loan as referred to in Section 2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee.
(a) In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of an Event
of
Default), the Trustee, as successor Master Servicer, its
designee or its successor shall thereupon assume all of the rights
and
obligations of the Master Servicer under each Subservicing
Agreement that may have been entered into. The Trustee, its
designee or
the successor servicer for the Trustee shall be deemed to have
assumed all of the Master Servicer's interest therein and to
have
replaced the Master Servicer as a party to the Subservicing
Agreement to the same extent as if the Subservicing Agreement had
been
assigned to the assuming party except that the Master Servicer
shall not thereby be relieved of any liability or obligations
under
the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but
at the expense of the Master Servicer, deliver to the assuming
party all documents and records relating to each Subservicing
Agreement and the Mortgage Loans then being serviced and an
accounting
of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of each
Subservicing Agreement to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account.
(a) The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the
Mortgage Loans, and shall, to the extent such procedures shall
be consistent with this Agreement and the terms and provisions of
any
related Primary Insurance Policy, follow such collection
procedures as it would employ in its good faith business judgment
and which
are normal and usual in its general mortgage servicing
activities. Consistent with the foregoing, the Master Servicer may
in its
discretion (subject to the terms and conditions of the
Assignment Agreement) (i) waive any late payment charge or any
prepayment
charge or penalty interest in connection with the prepayment of
a Mortgage Loan and (ii) extend the Due Date for payments due on
a
Mortgage Loan in accordance with the Program Guide, provided,
however, that the Master Servicer shall first determine that any
such
waiver or extension will not impair the coverage of any related
Primary Insurance Policy or materially adversely affect the lien
of
the related Mortgage. Notwithstanding anything in this Section
to the contrary, the Master Servicer or any Subservicer shall
not
enforce any prepayment charge to the extent that such
enforcement would violate any applicable law. In the event of any
such
arrangement, the Master Servicer shall make timely advances on
the related Mortgage Loan during the scheduled period in
accordance
with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements unless
otherwise
agreed to by the Holders of the Classes of Certificates affected
thereby; provided, however, that no such extension shall be made
if
any advance would be a Nonrecoverable Advance. Consistent with
the terms of this Agreement, the Master Servicer may also
waive,
modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any
manner
grant indulgence to any Mortgagor if in the Master Servicer's
determination such waiver, modification, postponement or indulgence
is
not materially adverse to the interests of the
Certificateholders (taking into account any estimated Realized Loss
that might result
absent such action), provided, however, that the Master Servicer
may not modify materially or permit any Subservicer to modify
any
Mortgage Loan, including without limitation any modification
that would change the Mortgage Rate, forgive the payment of any
principal or interest (unless in connection with the liquidation
of the related Mortgage Loan or except in connection with
prepayments to the extent that such reamortization is not
inconsistent with the terms of the Mortgage Loan), capitalize any
amounts
owing on the Mortgage Loan by adding such amount to the
outstanding principal balance of the Mortgage Loan, or extend the
final
maturity date of such Mortgage Loan, unless such Mortgage Loan
is in default or, in the judgment of the Master Servicer, such
default
is reasonably foreseeable. No such modification shall reduce the
Mortgage Rate on a Mortgage Loan below the greater of (A)
one-half
of the Mortgage Rate as in effect on the Cut-off Date and (B)
one-half of the Mortgage Rate as in effect on the date of such
modification, but not less than the sum of the Servicing Fee
Rate and the per annum rate at which the Subservicing Fee accrues.
The
final maturity date for any Mortgage Loan shall not be extended
beyond the Maturity Date. Also, the aggregate principal balance
of
all Reportable Modified Mortgage Loans subject to Servicing
Modifications (measured at the time of the Servicing Modification
and
after giving effect to any Servicing Modification) can be no
more than five percent of the aggregate principal balance of
the
Mortgage Loans as of the Cut-off Date, provided, that such limit
may be increased from time to time if each Rating Agency
provides
written confirmation that an increase in excess of that limit
will not reduce the rating assigned to any Class of Certificates
by
such Rating Agency below the lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date
by
such Rating Agency. In addition, any amounts owing on a Mortgage
Loan added to the outstanding principal balance of such
Mortgage
Loan must be fully amortized over the term of such Mortgage
Loan, and such amounts may be added to the outstanding principal
balance
of a Mortgage Loan only once during the life of such Mortgage
Loan. Also, the addition of such amounts described in the
preceding
sentence shall be implemented in accordance with the Program
Guide and may be implemented only by Subservicers that have
been
approved by the Master Servicer for such purposes. In connection
with any Curtailment of a Mortgage Loan, the Master Servicer,
to
the extent not inconsistent with the terms of the Mortgage Note
and local law and practice, may permit the Mortgage Loan to be
re-amortized such that the Monthly Payment is recalculated as an
amount that will fully amortize the remaining principal balance
thereof by the original maturity date based on the original
Mortgage Rate; provided, that such reamortization shall not be
permitted
if it would constitute a reissuance of the Mortgage Loan for
federal income tax purposes.
(b) The Master Servicer shall establish and maintain a Custodial
Account in which the Master Servicer shall deposit or cause to
be deposited on a daily basis, except as otherwise specifically
provided herein, the following payments and collections remitted
by
Subservicers or received by it in respect of the Mortgage Loans
subsequent to the Cut-off Date (other than in respect of
Monthly
Payments due before or in the month of the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the
principal component of any Subservicer Advance or of any REO
Proceeds received in connection with an REO Property for which an
REO
Disposition has occurred;
(ii) All payments on account of interest at the Adjusted
Mortgage Rate on the Mortgage Loans, including the interest
component of
any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has
occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02, 2.03, 2.04 or 4.07 (including amounts received
from
Residential Funding pursuant to the last paragraph of Section 4
of the Assignment Agreement in respect of any liability, penalty
or
expense that resulted from a breach of the representation and
warranty set forth in clause (x) of Section 4 of the Assignment
Agreement) and all amounts required to be deposited in
connection with the substitution of a Qualified Substitute Mortgage
Loan
pursuant to Section 2.03 or 2.04; and
(v) Any amounts required to be deposited pursuant to Section
3.07(c) and any payments or collections received in the nature
of
prepayment charges.
The foregoing requirements for deposit in the Custodial Account
shall be exclusive, it being understood and agreed that,
without
limiting the generality of the foregoing, payments on the
Mortgage Loans which are not part of the Trust Fund (consisting of
Monthly
Payments due before or in the month of the Cut-off Date) and
payments or collections consisting of late payment charges or
assumption
fees may but need not be deposited by the Master Servicer in the
Custodial Account. In the event any amount not required to be
deposited in the Custodial Account is so deposited, the Master
Servicer may at any time withdraw such amount from the
Custodial
Account, any provision herein to the contrary notwithstanding.
The Custodial Account may contain funds that belong to one or
more
trust funds created for mortgage pass-through certificates of
other series and may contain other funds respecting payments on
mortgage loans belonging to the Master Servicer or serviced or
master serviced by it on behalf of others. Notwithstanding such
commingling of funds, the Master Servicer shall keep records
that accurately reflect the funds on deposit in the Custodial
Account
that have been identified by it as being attributable to the
Mortgage Loans. With respect to Insurance Proceeds, Liquidation
Proceeds, REO Proceeds, Subsequent Recoveries and the proceeds
of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.03,
2.04 and 4.07 received in any calendar month, the Master
Servicer may elect to treat such amounts as included in the
Available
Distribution Amount for the Distribution Date in the month of
receipt, but is not obligated to do so. If the Master Servicer
so
elects, such amounts will be deemed to have been received (and
any related Realized Loss shall be deemed to have occurred) on
the
last day of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the
institution maintaining the Custodial Account to invest the
funds in the Custodial Account attributable to the Mortgage
Loans in Permitted Investments which shall mature not later than
the
Certificate Account Deposit Date next following the date of such
investment (with the exception of the Amount Held for Future
Distribution) and which shall not be sold or disposed of prior
to their maturities. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer as
additional servicing compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses
incurred in respect of any such investments attributable to the
investment of amounts in respect of the Mortgage Loans shall be
deposited in the Custodial Account by the Master Servicer out of
its
own funds immediately as realized.
(d) The Master Servicer shall give written notice to the Trustee
and the Depositor of any change in the location of the
Custodial Account and the location of the Certificate Account
prior to the use thereof.
Section 3.08. Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage
Loan pursuant to a Subservicing Agreement, the Master Servicer
shall cause the Subservicer, pursuant to the Subservicing
Agreement, to establish and maintain one or more Subservicing
Accounts
which shall be an Eligible Account or, if such account is not an
Eligible Account, shall generally satisfy the requirements of
the
Program Guide and be otherwise acceptable to the Master Servicer
and each Rating Agency. The Subservicer will be required thereby
to
deposit into the Subservicing Account on a daily basis all
proceeds of Mortgage Loans received by the Subservicer, less
its
Subservicing Fees and unreimbursed advances and expenses, to the
extent permitted by the Subservicing Agreement. If the
Subservicing
Account is not an Eligible Account, the Master Servicer shall be
deemed to have received such monies upon receipt thereof by the
Subservicer. The Subservicer shall not be required to deposit in
the Subservicing Account payments or collections in the nature
of
late charges or assumption fees, or payments or collections
received in the nature of prepayment charges to the extent that
the
Subservicer is entitled to retain such amounts pursuant to the
Subservicing Agreement. On or before the date specified in the
Program Guide, but in no event later than the Determination
Date, the Master Servicer shall cause the Subservicer, pursuant to
the
Subservicing Agreement, to remit to the Master Servicer for
deposit in the Custodial Account all funds held in the
Subservicing
Account with respect to each Mortgage Loan serviced by such
Subservicer that are required to be remitted to the Master
Servicer. The
Subservicer will also be required, pursuant to the Subservicing
Agreement, to advance on such scheduled date of remittance
amounts
equal to any scheduled monthly installments of principal and
interest less its Subservicing Fees on any Mortgage Loans for
which
payment was not received by the Subservicer. This obligation to
advance with respect to each Mortgage Loan will continue up to
and
including the first of the month following the date on which the
related Mortgaged Property is sold at a foreclosure sale or is
acquired by the Trust Fund by deed in lieu of foreclosure or
otherwise. All such advances received by the Master Servicer shall
be
deposited promptly by it in the Custodial Account.
(b) The Subservicer may also be required, pursuant to the
Subservicing Agreement, to remit to the Master Servicer for deposit
in
the Custodial Account interest at the Adjusted Mortgage Rate (or
Modified Net Mortgage Rate plus the rate per annum at which the
Servicing Fee accrues in the case of a Modified Mortgage Loan)
on any Curtailment received by such Subservicer in respect of a
Mortgage Loan from the related Mortgagor during any month that
is to be applied by the Subservicer to reduce the unpaid
principal
balance of the related Mortgage Loan as of the first day of such
month, from the date of application of such Curtailment to the
first
day of the following month. Any amounts paid by a Subservicer
pursuant to the preceding sentence shall be for the benefit of
the
Master Servicer as additional servicing compensation and shall
be subject to its withdrawal or order from time to time pursuant
to
Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate
Account, the Master Servicer shall for any Nonsubserviced
Mortgage
Loan, and shall cause the Subservicers for Subserviced Mortgage
Loans to, establish and maintain one or more Servicing Accounts
and
deposit and retain therein all collections from the Mortgagors
(or advances from Subservicers) for the payment of taxes,
assessments,
hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items for the account of the
Mortgagors.
Each Servicing Account shall satisfy the requirements for a
Subservicing Account and, to the extent permitted by the Program
Guide or
as is otherwise acceptable to the Master Servicer, may also
function as a Subservicing Account. Withdrawals of amounts related
to
the Mortgage Loans from the Servicing Accounts may be made only
to effect timely payment of taxes, assessments, hazard
insurance
premiums, Primary Insurance Policy premiums, if applicable, or
comparable items, to reimburse the Master Servicer or Subservicer
out
of related collections for any payments made pursuant to
Sections 3.11 (with respect to the Primary Insurance Policy) and
3.12(a)
(with respect to hazard insurance), to refund to any Mortgagors
any sums as may be determined to be overages, to pay interest,
if
required, to Mortgagors on balances in the Servicing Account or
to clear and terminate the Servicing Account at the termination
of
this Agreement in accordance with Section 9.01 or in accordance
with the Program Guide. As part of its servicing duties, the
Master
Servicer shall, and the Subservicers will, pursuant to the
Subservicing Agreements, be required to pay to the Mortgagors
interest on
funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to
in the preceding subsection that are not timely paid by the
Mortgagors or advanced by the Subservicers on the date when the
tax, premium or other cost for which such payment is intended is
due,
but the Master Servicer shall be required so to advance only to
the extent that such advances, in the good faith judgment of
the
Master Servicer, will be recoverable by the Master Servicer out
of Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and Information
Regarding the Mortgage Loans.
In the event that compliance with this Section 3.09 shall make
any Class of Certificates legal for investment by federally
insured savings and loan associations, the Master Servicer shall
provide, or cause the Subservicers to provide, to the Trustee,
the
Office of Thrift Supervision or the FDIC and the supervisory
agents and examiners thereof access to the documentation regarding
the
Mortgage Loans required by applicable regulations of the Office
of Thrift Supervision, such access being afforded without charge
but
only upon reasonable request and during normal business hours at
the offices designated by the Master Servicer. The Master
Servicer
shall permit such representatives to photocopy any such
documentation and shall provide equipment for that purpose at a
charge
reasonably approximating the cost of such photocopying to the
Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial
Account.
(a) The Master Servicer may, from time to time as provided
herein, make withdrawals from the Custodial Account of amounts
on
deposit therein pursuant to Section 3.07 that are attributable
to the Mortgage Loans for the following purposes:
(i) to make deposits into the Certificate Account in the amounts
and in the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for
previously unreimbursed Advances, Servicing Advances or other
expenses
made pursuant to Sections 3.01, 3.07(a), 3.08, 3.11, 3.12(a),
3.14 and 4.04 or otherwise reimbursable pursuant to the terms of
this
Agreement, such withdrawal right being limited to amounts
received on the related Mortgage Loans (including, for this
purpose, REO
Proceeds, Insurance Proceeds, Liquidation Proceeds and proceeds
from the purchase of a Mortgage Loan pursuant to Section 2.02,
2.03,
2.04 or 4.07) which represent (A) Late Collections of Monthly
Payments for which any such advance was made in the case of
Subservicer
Advances or Advances pursuant to Section 4.04 and (B) recoveries
of amounts in respect of which such advances were made in the
case
of Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not
previously retained by such Subservicer) out of each payment
received by
the Master Servicer on account of interest on a Mortgage Loan as
contemplated by Sections 3.14 and 3.16, an amount equal to that
remaining portion of any such payment as to interest (but not in
excess of the Servicing Fee and the Subservicing Fee, if not
previously retained) which, when deducted, will result in the
remaining amount of such interest being interest at a rate per
annum
equal to the Net Mortgage Rate (or Modified Net Mortgage Rate in
the case of a Modified Mortgage Loan) on the amount specified in
the
amortization schedule of the related Mortgage Loan as the
principal balance thereof at the beginning of the period respecting
which
such interest was paid after giving effect to any previous
Curtailments;
(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds and other
property
deposited in or credited to the Custodial Account that it is
entitled to withdraw pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, and any amounts remitted by Subservicers
as
interest in respect of Curtailments pursuant to Section
3.08(b);
(vi) to pay to itself, a Subservicer, a Seller, Residential
Funding, the Depositor or any other appropriate Person, as the
case
may be, with respect to each Mortgage Loan or property acquired
in respect thereof that has been purchased or otherwise
transferred
pursuant to Section 2.02, 2.03, 2.04, 4.07 or 9.01, all amounts
received thereon and not required to be distributed to
Certificateholders as of the date on which the related Stated
Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the
extent
provided in subsection (c) below, and any Advance or Servicing
Advance made in connection with a modified Mortgage Loan that is
in
default or, in the judgment of the Master Servicer, default is
reasonably foreseeable pursuant to Section 3.07(a), to the extent
the
amount of the Advance or Servicing Advance was added to the
Stated Principal Balance of the Mortgage Loan in a prior calendar
month;
(viii) to reimburse itself or the Depositor for expenses
incurred by and reimbursable to it or the Depositor pursuant to
Section 3.01(a), 3.11, 3.13, 3.14(c), 6.03, 10.01 or otherwise,
or in connection with enforcing any repurchase, substitution or
indemnification obligation of any Seller (other than the
Depositor or an Affiliate of the Depositor) pursuant to the related
Seller's
Agreement;
(ix) to reimburse itself for amounts expended by it (a) pursuant
to Section 3.14 in good faith in connection with the
restoration
of property damaged by an Uninsured Cause, and (b) in connection
with the liquidation of a Mortgage Loan or disposition of an
REO
Property to the extent not otherwise reimbursed pursuant to
clause (ii) or (viii) above;
(x) to pay the Credit Risk Manager the Credit Risk Manager Fee;
and
(xi) to withdraw any amount deposited in the Custodial Account
that was not required to be deposited therein pursuant to
Section 3.07, including any payoff fees or penalties or any
other additional amounts payable to the Master Servicer or
Subservicer
pursuant to the terms of the Mortgage Note.
(b) Since, in connection with withdrawals pursuant to clauses
(ii), (iii), (v) and (vi), the Master Servicer's entitlement
thereto is limited to collections or other recoveries on the
related Mortgage Loan, the Master Servicer shall keep and
maintain
separate accounting, on a Mortgage Loan by Mortgage Loan basis,
for the purpose of justifying any withdrawal from the Custodial
Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or
the related Subservicer for any advance made in respect of a
Mortgage Loan that the Master Servicer determines to be a
Nonrecoverable Advance by withdrawal from the Custodial Account of
amounts
on deposit therein attributable to the Mortgage Loans on any
Certificate Account Deposit Date succeeding the date of such
determination. Such right of reimbursement in respect of a
Nonrecoverable Advance relating to an Advance made pursuant to
Section 4.04 on any such Certificate Account Deposit Date shall
be limited to an amount not exceeding the portion of such
advance
previously paid to Certificateholders (and not theretofore
reimbursed to the Master Servicer or the related Subservicer).
Section 3.11. Maintenance of Primary Insurance Coverage.
(a) The Master Servicer shall not take, or permit any
Subservicer to take, any action which would result in noncoverage
under
any applicable Primary Insurance Policy of any loss which, but
for the actions of the Master Servicer or Subservicer, would have
been
covered thereunder. To the extent coverage is available, the
Master Servicer shall keep or cause to be kept in full force and
effect
each such Primary Insurance Policy until the principal balance
of the related Mortgage Loan secured by a Mortgaged Property is
reduced to 80% or less of the Appraised Value at origination in
the case of such a Mortgage Loan having a Loan-to-Value Ratio
at
origination in excess of 80%, provided that such Primary
Insurance Policy was in place as of the Cut-off Date and the Master
Servicer
had knowledge of such Primary Insurance Policy. The Master
Servicer shall not cancel or refuse to renew any such Primary
Insurance
Policy applicable to a Nonsubserviced Mortgage Loan, or consent
to any Subservicer canceling or refusing to renew any such
Primary
Insurance Policy applicable to a Mortgage Loan subserviced by
it, that is in effect at the date of the initial issuance of
the
Certificates and is required to be kept in force hereunder
unless the replacement Primary Insurance Policy for such canceled
or
non-renewed policy is maintained with an insurer whose
claims-paying ability is acceptable to each Rating Agency for
mortgage
pass-through certificates having a rating equal to or better
than the lower of the then-current rating or the rating assigned to
the
Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to
present
or to cause the related Subservicer to present, on behalf of the
Master Servicer, the Subservicer, if any, the Trustee and
Certificateholders, claims to the insurer under any Primary
Insurance Policies, in a timely manner in accordance with such
policies,
and, in this regard, to take or cause to be taken such
reasonable action as shall be necessary to permit recovery under
any Primary
Insurance Policies respecting defaulted Mortgage Loans. Pursuant
to Section 3.07, any Insurance Proceeds collected by or remitted
to
the Master Servicer under any Primary Insurance Policies shall
be deposited in the Custodial Account, subject to withdrawal
pursuant
to Section 3.10.
Section 3.12. Maintenance of Fire Insurance and Omissions and
Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage in an
amount
which is equal to the lesser of the principal balance owing on
such Mortgage Loan or 100% of the insurable value of the
improvements;
provided, however, that such coverage may not be less than the
minimum amount required to fully compensate for any loss or damage
on
a replacement cost basis. To the extent it may do so without
breaching the related Subservicing Agreement, the Master Servicer
shall
replace any Subservicer that does not cause such insurance, to
the extent it is available, to be maintained. The Master
Servicer
shall also cause to be maintained on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan,
fire
insurance with extended coverage in an amount which is at least
equal to the amount necessary to avoid the application of any
co-insurance clause contained in the related hazard insurance
policy. Pursuant to Section 3.07, any amounts collected by the
Master
Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the related Mortgaged
Property or
property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing
procedures)
shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.10. Any cost incurred by the
Master
Servicer in maintaining any such insurance shall not, for the
purpose of calculating monthly distributions to Certificateholders,
be
added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such
costs shall
be recoverable by the Master Servicer out of related late
payments by the Mortgagor or out of Insurance Proceeds and
Liquidation
Proceeds to the extent permitted by Section 3.10. It is
understood and agreed that no earthquake or other additional
insurance is to
be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage Loan other than pursuant to such
applicable
laws and regulations as shall at any time be in force and as
shall require such additional insurance. Whenever the
improvements
securing a Mortgage Loan are located at the time of origination
of such Mortgage Loan in a federally designated special flood
hazard
area, the Master Servicer shall cause flood insurance (to the
extent available) to be maintained in respect thereof. Such
flood
insurance shall be in an amount equal to the lesser of (i) the
amount required to compensate for any loss or damage to the
Mortgaged
Property on a replacement cost basis and (ii) the maximum amount
of such insurance available for the related Mortgaged Property
under
the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in
such
program).
In the event that the Master Servicer shall obtain and maintain
a blanket fire insurance policy with extended coverage
insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as
set
forth in the first sentence of this Section 3.12(a), it being
understood and agreed that such policy may contain a deductible
clause,
in which case the Master Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property
a
policy complying with the first sentence of this Section 3.12(a)
and there shall have been a loss which would have been covered
by
such policy, deposit in the Certificate Account the amount not
otherwise payable under the blanket policy because of such
deductible
clause. Any such deposit by the Master Servicer shall be made on
the Certificate Account Deposit Date next preceding the
Distribution Date which occurs in the month following the month
in which payments under any such policy would have been deposited
in
the Custodial Account. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master
Servicer
agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own
expense and keep in full force and effect throughout the term
of
this Agreement a blanket fidelity bond and an errors and
omissions insurance policy covering the Master Servicer's officers
and
employees and other persons acting on behalf of the Master
Servicer in connection with its activities under this Agreement.
The
amount of coverage shall be at least equal to the coverage that
would be required by Fannie Mae or Freddie Mac, whichever is
greater,
with respect to the Master Servicer if the Master Servicer were
servicing and administering the Mortgage Loans for Fannie Mae
or
Freddie Mac. In the event that any such bond or policy ceases to
be in effect, the Master Servicer shall obtain a comparable
replacement bond or policy from an issuer or insurer, as the
case may be, meeting the requirements, if any, of the Program Guide
and
acceptable to the Depositor. Coverage of the Master Servicer
under a policy or bond obtained by an Affiliate of the Master
Servicer
and providing the coverage required by this Section 3.12(b)
shall satisfy the requirements of this Section 3.12(b).
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor,
the Master Servicer or Subservicer, to the extent it has
knowledge
of such conveyance, shall enforce any due-on-sale clause
contained in any Mortgage Note or Mortgage, to the extent permitted
under
applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or
jeopardize
coverage under any Required Insurance Policy. Notwithstanding
the foregoing: (i) the Master Servicer shall not be deemed to be
in
default under this Section 3.13(a) by reason of any transfer or
assumption which the Master Servicer is restricted by law from
preventing; and (ii) if the Master Servicer determines that it
is reasonably likely that any Mortgagor will bring, or if any
Mortgagor does bring, legal action to declare invalid or
otherwise avoid enforcement of a due-on-sale clause contained in
any
Mortgage Note or Mortgage, the Master Servicer shall not be
required to enforce the due-on-sale clause or to contest such
action.
(b) Subject to the Master Servicer's or Subservicer's duty to
enforce any due-on-sale clause to the extent set forth in
Section 3.13(a), in any case in which a Mortgaged Property is to
be conveyed to a Person by a Mortgagor, and such Person is to
enter
into an assumption or modification agreement or supplement to
the Mortgage Note or Mortgage which requires the signature of
the
Trustee, or if an instrument of release signed by the Trustee is
required releasing the Mortgagor from liability on the Mortgage
Loan, the Master Servicer is authorized, subject to the
requirements of the sentence next following, to execute and
deliver, on
behalf of the Trustee, the assumption agreement with the Person
to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to
carry
out the terms of the Mortgage Note or Mortgage or otherwise to
comply with any applicable laws regarding assumptions or the
transfer
of the Mortgaged Property to such Person; provided, however,
none of such terms and requirements shall both constitute a
"significant
modification" effecting an exchange or reissuance of such
Mortgage Loan under the Code (or final, temporary or proposed
Treasury
regulations promulgated thereunder) and cause any REMIC created
hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or
"contributions" after the Startup Date under the REMIC Provisions.
The Master
Servicer shall execute and deliver such documents only if it
reasonably determines that (i) its execution and delivery thereof
will
not conflict with or violate any terms of this Agreement or
cause the unpaid balance and interest on the Mortgage Loan to
be
uncollectible in whole or in part, (ii) any required consents of
insurers under any Required Insurance Policies have been
obtained
and (iii) subsequent to the closing of the transaction involving
the assumption or transfer (A) the Mortgage Loan will continue to
be
secured by a first mortgage lien pursuant to the terms of the
Mortgage, (B) such transaction will not adversely affect the
coverage
under any Required Insurance Policies, (C) the Mortgage Loan
will fully amortize over the remaining term thereof, (D) no
material
term of the Mortgage Loan (including the interest rate on the
Mortgage Loan) will be altered nor will the term of the Mortgage
Loan
be changed and (E) if the seller/transferor of the Mortgaged
Property is to be released from liability on the Mortgage Loan,
the
buyer/transferee of the Mortgaged Property would be qualified to
assume the Mortgage Loan based on generally comparable credit
quality and such release will not (based on the Master
Servicer's or Subservicer's good faith determination) adversely
affect the
collectability of the Mortgage Loan. Upon receipt of appropriate
instructions from the Master Servicer in accordance with the
foregoing, the Trustee shall execute any necessary instruments
for such assumption or substitution of liability as directed by
the
Master Servicer. Upon the closing of the transactions
contemplated by such documents, the Master Servicer shall cause the
originals
or true and correct copies of the assumption agreement, the
release (if any), or the modification or supplement to the Mortgage
Note
or Mortgage to be deposited with the Mortgage File for such
Mortgage Loan. Any fee collected by the Master Servicer or such
related
Subservicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer or
such
Subservicer as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case
may be, shall be entitled to approve a request from a Mortgagor
for a partial release of the related Mortgaged Property, the
granting of an easement thereon in favor of another Person, any
alteration or demolition of the related Mortgaged Property or
other similar matters if it has determined, exercising its good
faith
business judgment in the same manner as it would if it were the
owner of the related Mortgage Loan, that the security for, and
the
timely and full collectability of, such Mortgage Loan would not
be adversely affected thereby and that any REMIC created
hereunder
would not fail to continue to qualify as a REMIC under the Code
as a result thereof and (subject to Section 10.01(f)) that no tax
on
"prohibited transactions" or "contributions" after the Startup
Date would be imposed on any REMIC created hereunder as a
result
thereof. Any fee collected by the Master Servicer or the related
Subservicer for processing such a request will be retained by
the
Master Servicer or such Subservicer as additional servicing
compensation.
(d) Subject to any other applicable terms and conditions of this
Agreement, the Trustee and Master Servicer shall be entitled to
approve an assignment in lieu of satisfaction with respect to
any Mortgage Loan, provided the obligee with respect to such
Mortgage
Loan following such proposed assignment provides the Trustee and
Master Servicer with a "Lender Certification for Assignment of
Mortgage Loan" in the form attached hereto as Exhibit M, in form
and substance satisfactory to the Trustee and Master Servicer,
providing the following: (i) that the Mortgage Loan is secured
by Mortgaged Property located in a jurisdiction in which an
assignment in lieu of satisfaction is required to preserve lien
priority, minimize or avoid mortgage recording taxes or
otherwise
comply with, or facilitate a refinancing under, the laws of such
jurisdiction; (ii) that the substance of the assignment is, and
is
intended to be, a refinancing of such Mortgage Loan and that the
form of the transaction is solely to comply with, or facilitate
the
transaction under, such local laws; (iii) that the Mortgage Loan
following the proposed assignment will have a rate of interest
at
least 0.25% below or above the rate of interest on such Mortgage
Loan prior to such proposed assignment; and (iv) that such
assignment is at the request of the borrower under the related
Mortgage Loan. Upon approval of an assignment in lieu of
satisfaction
with respect to any Mortgage Loan, the Master Servicer shall
receive cash in an amount equal to the unpaid principal balance of
and
accrued interest on such Mortgage Loan, and the Master Servicer
shall treat such amount as a Principal Prepayment in Full with
respect to such Mortgage Loan for all purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise
comparably convert (which may include an REO Acquisition) the
ownership of properties securing such of the Mortgage Loans as
come into and continue in default and as to which no
satisfactory
arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. Alternatively, the Master Servicer may
take
other actions in respect of a defaulted Mortgage Loan, which may
include (i) accepting a short sale (a payoff of the Mortgage
Loan
for an amount less than the total amount contractually owed in
order to facilitate a sale of the Mortgaged Property by the
Mortgagor)
or permitting a short refinancing (a payoff of the Mortgage Loan
for an amount less than the total amount contractually owed in
order
to facilitate refinancing transactions by the Mortgagor not
involving a sale of the Mortgaged Property), (ii) arranging for
a
repayment plan or (iii) agreeing to a modification in accordance
with Section 3.07. In connection with such foreclosure or other
conversion or action, the Master Servicer shall, consistent with
Section 3.11, follow such practices and procedures as it shall
deem
necessary or advisable, as shall be normal and usual in its
general mortgage servicing activities and as shall be required
or
permitted by the Program Guide; provided that the Master
Servicer shall not be liable in any respect hereunder if the Master
Servicer
is acting in connection with any such foreclosure or other
conversion or action in a manner that is consistent with the
provisions of
this Agreement. The Master Servicer, however, shall not be
required to expend its own funds or incur other reimbursable
charges in
connection with any foreclosure, or attempted foreclosure which
is not completed, or towards the correction of any default on a
related senior mortgage loan, or towards the restoration of any
property unless it shall determine (i) that such restoration
and/or
foreclosure will increase the proceeds of liquidation of the
Mortgage Loan to Holders of Certificates of one or more Classes
after
reimbursement to itself for such expenses or charges and (ii)
that such expenses and charges will be recoverable to it
through
Liquidation Proceeds, Insurance Proceeds, or REO Proceeds
(respecting which it shall have priority for purposes of
withdrawals from
the Custodial Account pursuant to Section 3.10, whether or not
such expenses and charges are actually recoverable from related
Liquidation Proceeds, Insurance Proceeds or REO Proceeds). In
the event of such a determination by the Master Servicer pursuant
to
this Section 3.14(a), the Master Servicer shall be entitled to
reimbursement of its funds so expended pursuant to Section
3.10.
In addition, the Master Servicer may pursue any remedies that
may be available in connection with a breach of a
representation and warranty with respect to any such Mortgage
Loan in accordance with Sections 2.03 and 2.04. However, the
Master
Servicer is not required to continue to pursue both foreclosure
(or similar remedies) with respect to the Mortgage Loans and
remedies
in connection with a breach of a representation and warranty if
the Master Servicer determines in its reasonable discretion that
one
such remedy is more likely to result in a greater recovery as to
the Mortgage Loan. Upon the occurrence of a Cash Liquidation or
REO
Disposition, following the deposit in the Custodial Account of
all Insurance Proceeds, Liquidation Proceeds and other payments
and
recoveries referred to in the definition of "Cash Liquidation"
or "REO Disposition," as applicable, upon receipt by the Trustee
of
written notification of such deposit signed by a Servicing
Officer, the Trustee or the Custodian, as the case may be, shall
release
to the Master Servicer the related Custodial File and the
Trustee shall execute and deliver such instruments of transfer
or
assignment prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Master Servicer
or
its designee, as the case may be, the related Mortgage Loan, and
thereafter such Mortgage Loan shall not be part of the Trust
Fund.
Notwithstanding the foregoing or any other provision of this
Agreement, in the Master Servicer's sole discretion with respect to
any
defaulted Mortgage Loan or REO Property as to either of the
following provisions, (i) a Cash Liquidation or REO Disposition may
be
deemed to have occurred if substantially all amounts expected by
the Master Servicer to be received in connection with the
related
defaulted Mortgage Loan or REO Property have been received, and
(ii) for purposes of determining the amount of any Liquidation
Proceeds, Insurance Proceeds, REO Proceeds or other unscheduled
collections or the amount of any Realized Loss, the Master
Servicer
may take into account minimal amounts of additional receipts
expected to be received or any estimated additional liquidation
expenses
expected to be incurred in connection with the related defaulted
Mortgage Loan or REO Property.
(b) In the event that title to any Mortgaged Property is
acquired by the Trust Fund as an REO Property by foreclosure or by
deed
in lieu of foreclosure, the deed or certificate of sale shall be
issued to the Trustee or to its nominee on behalf of
Certificateholders. Notwithstanding any such acquisition of
title and cancellation of the related Mortgage Loan, such REO
Property
shall (except as otherwise expressly provided herein) be
considered to be an Outstanding Mortgage Loan held in the Trust
Fund until
such time as the REO Property shall be sold. Consistent with the
foregoing for purposes of all calculations hereunder so long as
such REO Property shall be considered to be an Outstanding
Mortgage Loan it shall be assumed that, notwithstanding that
the
indebtedness evidenced by the related Mortgage Note shall have
been discharged, such Mortgage Note and the related
amortization
schedule in effect at the time of any such acquisition of title
(after giving effect to any previous Curtailments and before
any
adjustment thereto by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period)
remain in
effect.
(c) In the event that the Trust Fund acquires any REO Property
as aforesaid or otherwise in connection with a default or
imminent default on a Mortgage Loan, the Master Servicer on
behalf of the Trust Fund shall dispose of such REO Property as soon
as
practicable, giving due consideration to the interests of the
Certificateholders, but in all cases, within three full years after
the
taxable year of its acquisition by the Trust Fund for purposes
of Section 860G(a)(8) of the Code (or such shorter period as may
be
necessary under applicable state (including any state in which
such property is located) law to maintain the status of each
REMIC
created hereunder as a REMIC under applicable state law and
avoid taxes resulting from such property failing to be
foreclosure
property under applicable state law) or, at the expense of the
Trust Fund, request, more than 60 days before the day on which
such
grace period would otherwise expire, an extension of such grace
period unless the Master Servicer (subject to Section 10.01(f))
obtains for the Trustee an Opinion of Counsel, addressed to the
Trustee and the Master Servicer, to the effect that the holding
by
the Trust Fund of such REO Property subsequent to such period
will not result in the imposition of taxes on "prohibited
transactions"
as defined in Section 860F of the Code or cause any REMIC
created hereunder to fail to qualify as a REMIC (for federal (or
any
applicable State or local) income tax purposes) at any time that
any Certificates are outstanding, in which case the Trust Fund
may
continue to hold such REO Property (subject to any conditions
contained in such Opinion of Counsel). The Master Servicer shall
be
entitled to be reimbursed from the Custodial Account for any
costs incurred in obtaining such Opinion of Counsel, as provided
in
Section 3.10. Notwithstanding any other provision of this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or
allowed to continue to be rented) or otherwise used by or on
behalf of the Trust Fund in such a manner or pursuant to any terms
that
would (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of
the Code
or (ii) subject any REMIC created hereunder to the imposition of
any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Section
860G(c) of the Code, unless the Master Servicer has agreed to
indemnify
and hold harmless the Trust Fund with respect to the imposition
of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or
purchase or repurchase of any Mortgage Loan pursuant to the
terms
of this Agreement, as well as any recovery (other than
Subsequent Recoveries) resulting from a collection of Liquidation
Proceeds,
Insurance Proceeds or REO Proceeds, will be applied in the
following order of priority: first, to reimburse the Master
Servicer or
the related Subservicer in accordance with Section 3.10(a)(ii);
second, to the Certificateholders to the extent of accrued and
unpaid
interest on the Mortgage Loan, and any related REO Imputed
Interest, at the Net Mortgage Rate (or the Modified Net Mortgage
Rate in
the case of a Modified Mortgage Loan), to the Due Date in the
related Due Period prior to the Distribution Date on which such
amounts
are to be distributed; third, to the Certificateholders as a
recovery of principal on the Mortgage Loan (or REO Property);
fourth, to
all Servicing Fees and Subservicing Fees payable therefrom (and
the Master Servicer and the Subservicer shall have no claims for
any
deficiencies with respect to such fees which result from the
foregoing allocation); and fifth, to Foreclosure Profits.
(e) In the event of a default on a Mortgage Loan one or more of
whose obligors is not a United States Person, in connection
with
any foreclosure or acquisition of a deed in lieu of foreclosure
(together, "foreclosure") in respect of such Mortgage Loan, the
Master Servicer shall cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto)
necessary to assure that no withholding tax obligation arises
with respect to the proceeds of such foreclosure except to the
extent,
if any, that proceeds of such foreclosure are required to be
remitted to the obligors on such Mortgage Loan.
Section 3.15. Trustee to Cooperate; Release of Custodial
Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan, or upon the receipt by the Master Servicer of a
notification that payment in full will be escrowed in a manner
customary for such purposes, the Master Servicer shall
immediately
notify the Trustee (if it holds the related Custodial File) or
the Custodian by a certification of a Servicing Officer (which
certification shall include a statement to the effect that all
amounts received or to be received in connection with such
payment
which are required to be deposited in the Custodial Account
pursuant to Section 3.07 have been or will be so deposited),
substantially in the form attached hereto as Exhibit G, or, in
the case of a Custodian, an electronic request in a form acceptable
to
the Custodian, requesting delivery to it of the Custodial File.
Upon receipt of such certification and request, the Trustee
shall
promptly release, or cause the Custodian to release, the related
Custodial File to the Master Servicer. The Master Servicer is
authorized to execute and deliver to the Mortgagor the request
for reconveyance, deed of reconveyance or release or satisfaction
of
mortgage or such instrument releasing the lien of the Mortgage,
together with the Mortgage Note with, as appropriate, written
evidence of cancellation thereon and to cause the removal from
the registration on the MERS(R)System of such Mortgage and to
execute
and deliver, on behalf of the Trustee and the Certificateholders
or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release, including any
applicable UCC termination statements. No expenses incurred in
connection
with any instrument of satisfaction or deed of reconveyance
shall be chargeable to the Custodial Account or the Certificate
Account.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Master Servicer shall
deliver
to the Custodian, with a copy to the Trustee, a certificate of a
Servicing Officer substantially in the form attached as Exhibit
G
hereto, or, in the case of a Custodian, an electronic request in
a form acceptable to the Custodian, requesting that possession
of
all, or any document constituting part of, the Custodial File be
released to the Master Servicer and certifying as to the reason
for
such release and that such release will not invalidate any
insurance coverage provided in respect of the Mortgage Loan under
any
Required Insurance Policy. Upon receipt of the foregoing, the
Trustee shall deliver, or cause the Custodian to deliver, the
Custodial File or any document therein to the Master Servicer.
The Master Servicer shall cause each Custodial File or any
document
therein so released to be returned to the Trustee, or the
Custodian as agent for the Trustee when the need therefor by the
Master
Servicer no longer exists, unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the
Mortgage
Loan have been deposited in the Custodial Account or (ii) the
Custodial File or such document has been delivered directly or
through
a Subservicer to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating
or
pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and
the
Master Servicer has delivered directly or through a Subservicer
to the Trustee a certificate of a Servicing Officer certifying as
to
the name and address of the Person to which such Custodial File
or such document was delivered and the purpose or purposes of
such
delivery. In the event of the liquidation of a Mortgage Loan,
the Trustee shall deliver the Request for Release with respect
thereto
to the Master Servicer upon the Trustee's receipt of
notification from the Master Servicer of the deposit of the related
Liquidation
Proceeds in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf
shall execute and deliver to the Master Servicer, if necessary,
any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect
of a
Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or
to
obtain a deficiency judgment, or to enforce any other remedies
or rights provided by the Mortgage Note or Mortgage or
otherwise
available at law or in equity. Together with such documents or
pleadings (if signed by the Trustee), the Master Servicer shall
deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the
Trustee
and certifying as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the
Trustee
shall not invalidate any insurance coverage under any Required
Insurance Policy or invalidate or otherwise affect the lien of
the
Mortgage, except for the termination of such a lien upon
completion of the foreclosure or trustee's sale.
Section 3.16. Servicing and Other Compensation; Compensating
Interest.
(a) The Master Servicer, as compensation for its activities
hereunder, shall be entitled to receive on each Distribution
Date
the amounts provided for by clauses (iii), (iv), (v) and (vi) of
Section 3.10(a), subject to clause (e) below. The amount of
servicing compensation provided for in such clauses shall be
accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the
event
that Liquidation Proceeds, Insurance Proceeds and REO Proceeds
(net of amounts reimbursable therefrom pursuant to
Section 3.10(a)(ii)) in respect of a Cash Liquidation or REO
Disposition exceed the unpaid principal balance of such Mortgage
Loan
plus unpaid interest accrued thereon (including REO Imputed
Interest) at a per annum rate equal to the related Net Mortgage
Rate (or
the Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan), the Master Servicer shall be entitled to retain
therefrom
and to pay to itself and/or the related Subservicer, any
Foreclosure Profits and any Servicing Fee or Subservicing Fee
considered to
be accrued but unpaid.
(b) Additional servicing compensation in the form of assumption
fees, late payment charges, investment income on amounts in the
Custodial Account or the Certificate Account or otherwise shall
be retained by the Master Servicer or the Subservicer to the
extent
provided herein, subject to clause (e) below. Prepayment charges
shall be deposited into the Certificate Account and shall be
paid
on each Distribution Date to the holders of the Class SB
Certificates.
(c) The Master Servicer shall be required to pay, or cause to be
paid, all expenses incurred by it in connection with its
servicing activities hereunder (including payment of premiums
for the Primary Insurance Policies, if any, to the extent such
premiums
are not required to be paid by the related Mortgagors, and the
fees and expenses of the Trustee and the Custodian) and shall not
be
entitled to reimbursement therefor except as specifically
provided in Sections 3.10 and 3.14.
(d) The Master Servicer's right to receive servicing
compensation may not be transferred in whole or in part except
in
connection with the transfer of all of its responsibilities and
obligations of the Master Servicer under this Agreement.
(e) Notwithstanding clauses (a) and (b) above, the amount of
servicing compensation that the Master Servicer shall be
entitled
to receive for its activities hereunder for the period ending on
each Distribution Date shall be reduced (but not below zero) by
the
amount of Compensating Interest (if any) for such Distribution
Date used to cover Prepayment Interest Shortfalls as provided
in
Section 3.16(f) below. Such reduction shall be applied during
such period as follows: first, to any Servicing Fee or Subservicing
Fee
to which the Master Servicer is entitled pursuant to Section
3.10(a)(iii); and second, to any income or gain realized from
any
investment of funds held in the Custodial Account or the
Certificate Account to which the Master Servicer is entitled
pursuant to
Sections 3.07(c) or 4.01(c), respectively. In making such
reduction, the Master Servicer shall not withdraw from the
Custodial
Account any such amount representing all or a portion of the
Servicing Fee to which it is entitled pursuant to Section
3.10(a)(iii)
and shall not withdraw from the Custodial Account or Certificate
Account any such amount to which it is entitled pursuant to
Section 3.07(c) or 4.01(c).
(f) With respect to any Distribution Date, Prepayment Interest
Shortfalls on the Mortgage Loans will be covered first, by the
Master Servicer, but only to the extent such Prepayment Interest
Shortfalls do not exceed Eligible Master Servicing
Compensation.
Section 3.17. Reports to the Trustee and the Depositor.
Not later than fifteen days after it receives a written request
from the Trustee or the Depositor, the Master Servicer shall
forward to the Trustee and the Depositor a statement, certified
by a Servicing Officer, setting forth the status of the
Custodial
Account as of the close of business on such Distribution Date as
it relates to the Mortgage Loans and showing, for the period
covered
by such statement, the aggregate of deposits in or withdrawals
from the Custodial Account in respect of the Mortgage Loans for
each
category of deposit specified in Section 3.07 and each category
of withdrawal specified in Section 3.10.
Section 3.18. Annual Statement as to Compliance and Servicing
Assessment.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before the earlier of (a) March 31 of each year
or
(b) with respect to any calendar year during which the
Depositor's annual report on Form 10-K is required to be filed in
accordance
with the Exchange Act and the rules and regulations of the
Commission, the date on which the annual report on Form 10-K is
required
to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, (i) a servicing assessment
as
described in Section 4.03(f)(ii) and (ii) a servicer compliance
statement, signed by an authorized officer of the Master Servicer,
as
described in Items 1122(a), 1122(b) and 1123 of Regulation AB,
to the effect that:
(A) A review of the Master Servicer's activities during the
reporting period and of its performance under this
Agreement has been made under such officer's supervision.
(B) To the best of such officer's knowledge, based on such
review, the Master Servicer has fulfilled all of its
obligations under this Agreement in all material respects
throughout the reporting period or, if there has been a failure to
fulfill
any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status
thereof.
The Master Servicer shall use commercially reasonable efforts to
obtain from all other parties participating in the
servicing function any additional certifications required under
Item 1123 of Regulation AB to the extent required to be included in
a
Report on Form 10-K; provided, however, that a failure to obtain
such certifications shall not be a breach of the Master
Servicer's
duties hereunder if any such party fails to deliver such a
certification.
Section 3.19. Annual Independent Public Accountants' Servicing
Report.
On or before the earlier of (a) March 31 of each year or (b)
with respect to any calendar year during which the Depositor's
annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the
Commission, the date on which the annual report is required to
be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the Master Servicer at its
expense shall cause a firm of independent public accountants, which
shall
be members of the American Institute of Certified Public
Accountants, to furnish to the Depositor and the Trustee the
attestation
required under Item 1122(b) of Regulation AB. In rendering such
statement, such firm may rely, as to matters relating to the
direct
servicing of mortgage loans by Subservicers, upon comparable
statements for examinations conducted by independent public
accountants
substantially in accordance with standards established by the
American Institute of Certified Public Accountants (rendered within
one
year of such statement) with respect to such Subservicers.
Section 3.20. Right of the Depositor in Respect of the Master
Servicer.
The Master Servicer shall afford the Depositor and the Trustee,
upon reasonable notice, during normal business hours access
to all records maintained by the Master Servicer in respect of
its rights and obligations hereunder and access to officers of
the
Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish the Depositor with its most
recent
financial statements and such other information as the Master
Servicer possesses regarding its business, affairs, property
and
condition, financial or otherwise. The Master Servicer shall
also cooperate with all reasonable requests for information
including,
but not limited to, notices, tapes and copies of files,
regarding itself, the Mortgage Loans or the Certificates from any
Person or
Persons identified by the Depositor or Residential Funding. The
Depositor may enforce the obligation of the Master Servicer
hereunder and may, but it is not obligated to, perform or cause
a designee to perform, any defaulted obligation of the Master
Servicer hereunder or exercise the rights of the Master Servicer
hereunder; provided that the Master Servicer shall not be
relieved
of any of its obligations hereunder by virtue of such
performance by the Depositor or its
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