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EXECUTION COPY
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
Dated as of November 1, 2006,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of November 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
SERIES 2006-QH1
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS...............................................................4
Section 1.01.
Definitions.......................................................4
Section 1.02. Determination of
LIBOR...........................................29
Section 1.03. Use of Words and
Phrases.........................................30
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..........30
Section 2.01. Conveyance of Mortgage
Loans.....................................30
Section 2.02. Acceptance by
Trustee............................................30
Section 2.03. Representations, Warranties and Covenants of the
Master
Servicer and the
Company.........................................30
Section 2.04. Representations and Warranties of Sellers.(See
Section 2.04
of the Standard
Terms)...........................................33
Section 2.05. Execution and Authentication of
Certificates/Issuance of
Certificates Evidencing Interests in
REMICs......................33
Section 2.06. Conveyance of REMIC I Regular Interests and REMIC
II Regular
Interests SB-IO and SB-PO; Acceptance by the
Trustee.............33
Section 2.07. Issuance of Certificates Evidencing Interest in
REMIC II and
REMIC
III........................................................34
Section 2.08. Purposes and Powers of the
Trust.................................34
Section 2.09. Agreement Regarding Ability to
Disclose..........................34
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS...........................35
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS...........................................39
Section 4.01. Certificate
Account..............................................39
Section 4.02.
Distributions....................................................39
Section 4.03. Statements to Certificateholders; Statements to
the Rating
Agencies; Exchange Act
Reporting.................................43
Section 4.04. Distribution of Reports to the Trustee and the
Company;
Advances by the Master
Servicer..................................43
Section 4.05. Allocation of Realized
Losses....................................44
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property....46
Section 4.07. Optional Purchase of Defaulted Mortgage
Loans....................46
Section 4.08. Surety
Bond......................................................46
Section 4.09. Yield Maintenance
Agreements.....................................46
Section 4.10. The Certificate
Policy...........................................47
ARTICLE V THE
CERTIFICATES.........................................................49
ARTICLE VI THE COMPANY AND THE MASTER
SERVICER......................................50
Section 6.01. Respective Liabilities of the Company and Master
Servicer........50
Section 6.02. Merger or Consolidation of the Company or Master
Servicer;
Assignment of Rights and Delegation of Duties by the Master
Servicer.........................................................50
Section 6.03. Limitation on Liability of the Company, Master
Servicer and
Others...........................................................50
Section 6.04. Company and Master Servicer Not to
Resign........................50
ARTICLE VII
DEFAULT..................................................................51
ARTICLE VIII CONCERNING THE
TRUSTEE...................................................52
ARTICLE IX
TERMINATION..............................................................53
ARTICLE X REMIC
PROVISIONS.........................................................54
Section 10.01. REMIC
Administration.............................................54
Section 10.02. Master Servicer; REMIC Administrator and
Trustee
Indemnification..................................................54
Section 10.03. Designation of
REMICs............................................54
Section 10.04. Distributions on the REMIC I Regular
Interests...................54
Section 10.05. Compliance with Withholding
Requirements.........................54
ARTICLE XI MISCELLANEOUS
PROVISIONS.................................................55
Section 11.01.
Amendment........................................................55
Section 11.02. Recordation of Agreement;
Counterparts...........................55
Section 11.03. Limitation on Rights of
Certificateholders.......................55
Section 11.04. Governing
Law....................................................55
Section 11.05.
Notices..........................................................55
Section 11.06. Required Notices to Rating Agency and
Subservicer................56
Section 11.07. Severability of
Provisions.......................................56
Section 11.08. Supplemental Provisions for
Resecuritization.....................56
Section 11.09. Allocation of Voting
Rights......................................56
Section 11.10. No
Petition......................................................56
ARTICLE XII....COMPLIANCE WITH REGULATION AB 60
EXHIBITS
Exhibit One: Mortgage Loan Schedule
Exhibit Two: Information to be Included in Monthly Distribution
Date Statement
Exhibit Three:Standard Terms of Pooling and Servicing Agreement,
dated as of November
1, 2006
This is a Series Supplement, dated as of November 1, 2006 (the
"Series Supplement"),
to the Standard Terms of Pooling and Servicing Agreement, dated
as of November 1, 2006 and
attached as Exhibit Four hereto (the "Standard Terms" and,
together with this Series
Supplement, the "Pooling and Servicing Agreement" or
"Agreement"), among RESIDENTIAL
ACCREDIT LOANS, INC., as the company (together with its
permitted successors and assigns,
the "Company"), RESIDENTIAL FUNDING COMPANY, LLC as master
servicer (together with its
permitted successors and assigns, the "Master Servicer"), and
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Trustee (together with its permitted successors and
assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell mortgage asset-backed pass-through
certificates
(collectively, the "Certificates"), to be issued hereunder in
multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest
in the Mortgage Loans.
The terms and provisions of the Standard Terms are hereby
incorporated by reference
herein as though set forth in full herein. If any term or
provision contained herein shall
conflict with or be inconsistent with any provision contained in
the Standard Terms, the
terms and provisions of this Series Supplement shall govern. All
capitalized terms not
otherwise defined herein shall have the meanings set forth in
the Standard Terms. The
Pooling and Servicing Agreement shall be dated as of the date of
this Series Supplement.
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
subject to this Agreement (but excluding the Yield Maintenance
Agreements) as a real estate
mortgage investment conduit (a "REMIC") for federal income tax
purposes, and such segregated
pool of assets will be designated as "REMIC I." The Class R-I
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 Class R-I
Certificates will not bear
interest or have a Certificate Principal Balance. 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 LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY
DATE
LT1 Variable(1) $340,431,657.46 December 26, 2036
LT2 Variable(1) $12,116.90 December 26, 2036
LT3 0.00% $21,931.86 December 26, 2036
LT4 Variable(1) $21,931.86 December 26, 2036
____________
(1) Calculated in accordance with the definition of
"Uncertificated REMIC I Pass Through
Rate" herein.
REMIC II
As provided herein, the REMIC Administrator will elect to treat
the segregated pool
of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax
purposes, and such segregated pool of assets will be designated
as REMIC II. The Class R-II
Certificates will represent ownership of the sole Class of
"residual interests" in REMIC II
for purposes of the REMIC Provisions under federal income tax
law. The Class R-II
Certificates will not bear interest and will not have a
Certificate Principal Balance. The
following table irrevocably sets forth the designation, type,
Pass-Through Rate, aggregate
Initial Certificate Principal Balance, Maturity Date, initial
ratings and certain features
for each Class of Certificates that evidence "regular interests"
in REMIC II and the REMIC
II Regular Interests SB-IO and SB-PO (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
and the Certificates shall
be the Maturity Date. The REMIC II Regular Interests SB-IO and
SB-PO will not be
certificated.
AGGREGATE
INITIAL S&P/
CERTIFICATE MOODY'S/
PASS-THROUGH PRINCIPAL MATURITY ----------- MINIMUM
DESIGNATION RATE BALANCE FEATURES DATE DBRS DENOMINATION
Class A-1 Adjustable $192,035,000.00 Adjustable Rate December
AAA/Aaa/AAA $100,000.00
Rate(1)(2) 26, 2036
Class A-2 Adjustable $80,014,000.00 Adjustable Rate December
AAA/Aaa/AAA $100,000.00
Rate(1)(2) 26, 2036
Class A-3 Adjustable $48,009,000.00 Adjustable December
AAA/Aaa/AAA $100,000.00
Rate(1)(2) Rate/Insured 26, 2036
Class M-1 Adjustable $8,342,000.00 Mezzanine/AdjustableDecember
AA/Aa2/AA $100,000.00
Rate(1)(2) Rate 26, 2036
Class M-2 Adjustable $4,426,000.00 Mezzanine/AdjustableDecember
A/A2/A $100,000.00
Rate(1)(2) Rate 26, 2036
Class M-3 Adjustable $1,703,000.00 Mezzanine/AdjustableDecember
A-/ $100,000.00
Rate(1)(2) Rate 26, 2036 Baa1/A(low)
Class M-4 Adjustable $1,702,000.00 Mezzanine/AdjustableDecember
BBB/Baa2/BBB $100,000.00
Rate(1)(2) Rate 26, 2036
Class M-5 Adjustable $1,702,000.00 Mezzanine/AdjustableDecember
NR/Baa3/B(low)$100,000.00
Rate(1)(2) Rate 26, 2036
SB-PO $2,544,638.08 N/A Subordinate/PrincipaDecember N/A N/A
(3) Only 26, 2036
SB-IO (4) N/A Subordinate/InterestDecember N/A N/A
Only 26, 2036
(1) The REMIC II Regular Interests, ownership of which is
represented by the Class A
Certificates and Class M Certificates, will accrue interest at a
per annum rate equal to the
lesser of (i) LIBOR plus the applicable Margin and (ii) the Net
Rate Cap.
(2) The Class A Certificates and Class M Certificates will also
entitle their holders to
receive certain payments from the Holder of the Class SB
Certificates from amounts to which
the Holder of the Class SB Certificates is entitled, which will
not be a part of their
ownership of the related REMIC II Regular Interests.
(3) The REMIC II Regular Interest SB-PO will have no entitlement
to interest, and will be
entitled to distributions of principal in an aggregate amount
equal to the
Overcollateralization Amount pursuant to the terms and
conditions of this Agreement.
(4) The REMIC II Regular Interest SB-IO will have no entitlement
to principal, and will
be entitled to distributions of interest in an aggregate amount
equal to the interest
distributable with respect to the Class SB Certificates pursuant
the terms and conditions of
this Agreement.
REMIC III
As provided herein, the REMIC Administrator will make an
election to treat the
segregated pool of assets consisting of REMIC II Regular
Interests SB-IO and SB-PO as a
REMIC for federal income tax purposes, and such segregated pool
of assets will be designated
as "REMIC III." The Class R-X Certificates will represent the
sole Class of "residual
interests" in REMIC III for purposes of the REMIC Provisions
under federal income tax law.
The Class R-X Certificates will not bear interest or have
Certificate Principal Balance.
The following table irrevocably sets forth the designation,
Pass-Through Rate, aggregate
Initial Certificate Principal Balance, Maturity Date, initial
ratings and certain features
for the Class SB Certificates which represent the single
"regular interest" in REMIC III
designated the "REMIC III Regular Interest." The "latest
possible maturity date"
(determined solely for purposes of satisfying Treasury
regulation Section
1.860G-1(a)(4)(iii)) for the REMIC III Regular Interest shall be
the Maturity Date.
AGGREGATE
INITIAL S&P/
CERTIFICATE MOODY'S/
PASS-THROUGH PRINCIPAL MATURITY ----------- MINIMUM
DESIGNATION RATE BALANCE FEATURES DATE DBRS DENOMINATION
Class SB Variable(1) $2,544,638.08 Subordinate/Adjustable
December NR/NR/NR N/A
Rate 26, 2036
____________
(1) 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 REMIC III Regular
Interest will not have a
Pass-Through Rate, but will be entitled to 100% of all amounts
paid or deemed paid on
REMIC II Regular Interests SB-IO and SB-PO.
The Mortgage Loans have an aggregate Cut-off Date Principal
Balance equal to
$340,487,638.08.
The Mortgage Loans are payment-option adjustable-rate first lien
mortgage loans with
a negative amortization feature having terms to maturity at
origination or modification of
generally not more than 30 years.
In consideration of the mutual agreements herein contained, the
Company, 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 at the Pass-Through Rate on the
Certificate Principal Balance
thereof immediately prior to such Distribution Date at the
Pass-Through Rate for that
Distribution Date.
The amount of Accrued Certificate Interest on each Class of
Class A Certificates and
Class M Certificates shall be reduced by the amount of
Prepayment Interest Shortfalls on the
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 Mortgage Loans during
the related Due Period. All such reductions with respect to the
Mortgage Loans will be
allocated among the Class A Certificates and Class M
Certificates in proportion to the
amount of Accrued Certificate Interest payable on such
Certificates on such Distribution
Date absent such reductions.
Accrued Certificate Interest, with respect to any Class of Class
A-2, Class A-3 or
Class M Certificates for any Distribution Date, shall further be
reduced by the interest
portion of Realized Losses allocated to any Class of Class M
Certificates pursuant to
Section 4.05.
Accrued Certificate Interest with respect to the Class A
Certificates and Class M
Certificates shall accrue on the basis of a 360-day year and the
actual number of days in
the related Interest Accrual Period.
If any interest portion of a Realized Loss is allocated to the
Class A-3
Certificates, subject to the terms of the Certificate Policy,
the amount of the allocated
shortfall will be drawn under the Certificate Policy and
distributed to the Holders of the
Class A-3 Certificates. In addition, to the extent the Available
Distribution Amount with
respect to the Class A-3 Certificates is less than Accrued
Certificate Interest on the Class
A-3 Certificates, other than as a result of Prepayment Interest
Shortfalls, Deferred
Interest, the Net WAC Cap Rate and Relief Act Shortfalls, the
shortfall will be covered by
the Certificate Policy, in accordance with its terms.
With respect to each Distribution Date and the Class SB
Certificates, interest
accrued during the related 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)(iii) and (iv).
Accrued Certificate Interest on the Class SB Certificates shall
accrue on the basis of a
360-day year and the actual number of days in the related
Interest Accrual Period.
Adjustment Date: With respect to each 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.
Available Distribution Amount: As 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,
(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), (iv) any amount deposited
in the Certificate Account
pursuant to Section 4.07 or Section 9.01, (v) any amount that
the Master Servicer is not
permitted to withdraw from the Custodial Account or the
Certificate Account pursuant to
Section 3.16(e), (vi) any amount received by the Trustee
pursuant to the Surety Bond in
respect of such Distribution Date and (vii) the proceeds of any
Pledged Assets received by
the Master Servicer, reduced by (b) the sum as of the close of
business on the immediately
preceding Determination Date of (v) any payments or collections
consisting of Prepayment
Charges on the Mortgage Loans that were received during the
related Prepayment Period; (w)
aggregate Foreclosure Profits, (x) the Amount Held for Future
Distribution, and (y) 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) and (z) the
Certificate Insurer Premium paid to the Certificate Insurer.
Available Funds Rate: With respect to any Distribution Date, a
per annum rate equal
to (i) the product of (x) the Interest Remittance Amount plus
full and partial Principal
Prepayments available to be distributed on such Distribution
Date and (y) a fraction, the
numerator of which is 12 and the denominator of which is the
aggregate Stated Principal
Balance of the Mortgage Loans as of such Distribution Date,
adjusted to an actual/360 rate.
Basis Risk Shortfall: With respect to the Class A Certificates
and Class M
Certificates and any Distribution Date, the sum of (a) an amount
equal to the excess of (x)
Accrued Certificate Interest for such Class of Certificates
calculated at a per annum rate
equal to LIBOR plus the related Margin for such Distribution
Date (not to exceed 10.00% per
annum with respect to any Offered Certificate other than the
Class A-3 Certificates, and not
to exceed 11.50% per annum with respect to the Class A-3
Certificates), over (y) Accrued
Certificate Interest for such Class calculated assuming the Net
Rate Cap was equal to the
Net WAC Cap Rate for such Distribution Date, (b) any shortfalls
for such Class calculated
pursuant to clause (a) above remaining unpaid from prior
Distribution Dates, and
(c) interest on the amount in clause (b) to the extent not
previously paid from Excess Cash
Flow or the Yield Maintenance Agreements from the Distribution
Date on which such amount was
incurred at a per annum rate equal to One-Month LIBOR plus the
related Margin (not to exceed
10.00% per annum with respect to any Offered Certificate other
than the Class A-3
Certificates, and not to exceed 11.50% per annum with respect to
the Class A-3 Certificates)
for the current Distribution Date.
Book-Entry Certificate: The Class A Certificates and Class M
Certificates.
Capitalization Reimbursement Amount: As 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), plus the
Capitalization Reimbursement Shortfall Amount remaining
unreimbursed from any prior
Distribution Date and reimbursed to the Master Servicer or
Subservicer on or prior to such
Distribution Date.
Capitalization Reimbursement Shortfall Amount: As to any
Distribution Date, the
amount, if any, by which the amount of Advances or Servicing
Advances that were added to the
Stated Principal Balance of the Mortgage Loans during the
preceding calendar month exceeds
the amount of principal payments on the Mortgage Loans included
in the Available
Distribution Amount for that Distribution Date.
Certificate: Any Class A, Class M, Class SB or Class R
Certificate.
Certificate Account: The separate account or accounts created
and maintained
pursuant to Section 4.01 of the Standard Terms, which shall be
entitled "DEUTSCHE BANK TRUST
COMPANY AMERICAS, as trustee, in trust for the registered
holders of Residential Accredit
Loans, Inc., Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QH1" and which
must be an Eligible Account.
Certificate Insurer: Ambac Assurance Corporation, a
Wisconsin-domiciled stock
insurance corporation or any successor thereto.
Certificate Insurer Account: An account of the Certificate
Insurer maintained at
Citibank, N.A. (ABA No. 021000089), Account No. 40609486, or
such other account as may be
designated by the Certificate Insurer to the Trustee in writing
not less than five Business
Days prior to the related Distribution Date.
Certificate Insurer Default: As defined in Section 4.10 (h).
Certificate Insurer Premium: The premium payable to the
Certificate Insurer on each
Distribution Date in an amount equal to one twelfth of the
product of the Certificate
Insurer Premium Rate and the Certificate Principal Balance of
the Class A-3 Certificates
immediately prior to such Distribution Date.
Certificate Insurer Premium Modified Rate: With respect to any
date of
determination, the Certificate Insurer Premium Rate times a
fraction equal to (x) the
Certificate Principal Balance of the Class A-3 Certificates as
of such date over (y) the
aggregate Stated Principal Balance of the Mortgage Loans as of
such date.
Certificate Insurer Premium Rate: With respect to any
Distribution Date, the premium
percentage set forth in the commitment letter dated November 29,
2006 between the
Certificate Insurer and Residential Funding.
Certificate Policy: The Certificate Guaranty Insurance Policy
(No. AB1044BE), issued
by the Certificate Insurer in favor of the Trustee for the
benefit of the Class A-3
Certificates.
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) in the case of any Class of
Class A-2, Class A-3 or
Class M Certificates, 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, other than
any Insured Payment in respect of such amount that has been paid
by the Certificate Insurer
and is included in clause (x) above; provided, that with respect
to any Distribution Date,
the Certificate Principal Balance of the Class A-2, Class A-3,
Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates, in that order, will
be increased to the extent of
Realized Losses previously allocated thereto and remaining
unreimbursed, but only to the
extent of Subsequent Recoveries received during the preceding
calendar month. With respect
to each 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 Principal
Balance of the REMIC II Regular Interest SB-PO, as reduced by
Realized Losses allocated
thereto and payments deemed made thereon, and (ii) accrued and
unpaid interest on the REMIC
II Regular Interest SB-IO, as reduced by Realized Losses
allocated thereto. The Class R
Certificates will not have a Certificate Principal Balance.
Class A Certificate: Any one of the Class A-1, Class A-2 or
Class A-3 Certificates,
executed by the Trustee and authenticated by the Certificate
Registrar substantially in the
form annexed to the Standard Terms 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 II for purposes of the REMIC
Provisions and (ii) the right to
receive Basis Risk Shortfalls.
Class A-3 Yield Maintenance Agreement: The yield maintenance
agreement, entered into
for the benefit of the Class A-3 Certificates, dated as of the
Closing Date between the
Yield Maintenance Agreements Provider and the Trustee.
Class A/Class M Yield Maintenance Agreement: The yield
maintenance agreement,
entered into for the benefit of the Class A and Class M
Certificates, dated as of the
Closing Date between the Yield Maintenance Agreements Provider
and the Trustee.
Class A Principal Distribution Amount: With respect to any
Distribution Date (i)
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
(ii) 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: The Class A-1 Certificates, executed by
the Trustee and
authenticated by the Certificate Registrar substantially in the
form annexed to the Standard
Terms as Exhibit A.
Class A-1 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 0.190% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 0.380% per annum.
Class A-2 Certificate: The Class A-2 Certificates, executed by
the Trustee and
authenticated by the Certificate Registrar substantially in the
form annexed to the Standard
Terms as Exhibit A.
Class A-2 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 0.230% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 0.460% per annum.
Class A-3 Certificate: The Class A-3 Certificates, executed by
the Trustee and
authenticated by the Certificate Registrar substantially in the
form annexed to the Standard
Terms as Exhibit A.
Class A-3 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 0.200% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 0.400% per annum.
Class A-P Certificates: None.
Class M Certificates: Collectively, the Class M-1, Class M-2,
Class M-3, Class M-4
and Class M-5 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 to the
Standard Terms as Exhibit B, senior to the Class M-2, Class M-3,
Class M-4, Class M-5, Class
SB 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 II for purposes of the REMIC Provisions and
(ii) the right to receive
Basis Risk Shortfalls.
Class M-1 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 0.420% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 0.630% per annum.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date (i)
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 (ii) 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 to the
Standard Terms as Exhibit B, senior to the Class M-3, Class M-4,
Class M-5, Class SB 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 II for purposes of the REMIC Provisions and (ii) the
right to receive Basis Risk
Shortfalls.
Class M-2 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 0.620% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 0.930% per annum.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date (i)
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
Class M-1 Principal Distribution Amount or (ii) 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, Class M-5, Class SB 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 II for purposes
of the REMIC Provisions and (ii) the right to receive Basis Risk
Shortfalls.
Class M-3 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 1.100% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 1.650% per annum.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date (i)
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, Class M-1
Principal Distribution Amount and Class M-2 Principal
Distribution Amount or (ii) 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, Class
M-1 Principal Distribution
Amount and 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, Class M-1 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, Class SB 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 II for purposes of
the REMIC Provisions and (ii) the right to receive Basis Risk
Shortfalls.
Class M-4 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 1.450% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 2.175% per annum.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date (i)
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, Class M-1
Principal Distribution Amount, Class M-2 Principal Distribution
Amount and Class M-3
Principal Distribution Amount or (ii) 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, Class
M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount and 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, Class M-1, Class M-2 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 SB 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 II for
purposes of the REMIC Provisions
and (ii) the right to receive Basis Risk Shortfalls.
Class M-5 Margin: With respect to any Distribution Date prior to
the second
Distribution Date after the first possible Optional Termination
Date, 1.50% per annum, and
on any Distribution Date on or after the second Distribution
Date after the first possible
Optional Termination Date, 2.250% per annum.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date (i)
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, Class M-1
Principal Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal
Distribution Amount and Class M-4 Principal Distribution Amount
or (ii) 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, Class
M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, Class M-3
Principal Distribution Amount
and 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, Class M-1, Class M-2, Class M-3 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 R Certificate: Any one of the Class R-I Certificates,
Class R-II Certificates
or Class R-X Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates
executed by the Trustee
and authenticated by the Certificate Registrar substantially in
the form annexed to the
Standard Terms as Exhibit D and evidencing an interest
designated as a "residual interest"
in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates
executed by the
Trustee and authenticated by the Certificate Registrar
substantially in the form annexed to
the Standard Terms as Exhibit D and evidencing an interest
designated as a "residual
interest" in REMIC II for purposes of the REMIC Provisions.
Class R-X Certificate: Any one of the Class R-X Certificates
executed by the Trustee
and authenticated by the Certificate Registrar substantially in
the form annexed to the
Standard Terms as Exhibit D and evidencing an interest
designated as a "residual interest"
in REMIC III for purposes of the REMIC Provisions.
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 R, 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 ownership of the REMIC III Regular Interest, together
with certain obligations to
pay Basis Risk Shortfalls.
Closing Date: November 29, 2006.
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
1761 East St. Andrew Place, Santa Ana, California 92705-4934,
Attention: Residential Funding
Company, LLC, RALI 2006-QH1.
Cumulative Insurance Payments: As of any time of determination,
(i) the aggregate
amount of all Insured Payments previously made by the
Certificate Insurer under the
Certificate Policy plus interest thereon from the date such
amounts became due until paid in
full, at a rate of interest equal to the Late Payment Rate minus
(ii) the sum of the
aggregate of all payments previously made to the Certificate
Insurer pursuant to Section
4.02 hereof as reimbursement for such amounts.
Cut-off Date Balance: $340,487,638.08.
Cut-off Date: November 1, 2006.
Deferred Interest: The amount of interest which is deferred and
added to the
principal balance of a Mortgage Loan due to negative
amortization. For purposes of REMIC I,
Deferred Interest shall be allocated to REMIC I Regular Interest
LT1 in reduction of the
portion of the Uncertificated Accrued Interest thereon
distributable on the related
Distribution Date and shall result in an increase in the
principal balance thereof to the
extent of such reduction.
Deficiency Amount: As defined in the Certificate Policy.
Determination Date: With respect to any Distribution Date, the
second Business Day
prior to each Distribution Date.
Discount Net Mortgage Rate: Not applicable.
Due Period: With respect to each Distribution Date, the calendar
month in which such
Distribution Date occurs.
Excess Bankruptcy Loss: Not applicable.
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, (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 and (c)
reimbursements to the Certificate Insurer for Insured Payments
and (B) the
Overcollateralization Reduction Amount, if any, for that
Distribution Date.
Excess Fraud Loss: Not applicable.
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.
Excess Special Hazard Loss: Not applicable.
Excess Subordinate Principal Amount: Not applicable.
Expense Fee Rate: With respect to any Mortgage Loan as of any
date of determination,
the sum of the Servicing Fee Rate and the rate per annum at
which the Subservicing Fee
accrues.
Gross Margin: With respect to each Mortgage Loan, the fixed
percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan
Schedule attached hereto 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.
Index: With respect to any Mortgage Loan and as to any
Adjustment Date therefor, the
related index as stated in the related Mortgage Note.
Initial Subordinate Class Percentage: Not applicable.
Insured Payment: With respect to the Class A-3 Certificates, as
of any Distribution
Date, the Deficiency Amount, if any, for such Distribution Date
paid by the Certificate
Insurer pursuant to the Certificate Policy.
Interest Accrual Period: With respect to the Distribution Date
in December 2006, the
period commencing on the Closing Date and ending on the day
immediately preceding the
Distribution Date in December 2006, and with respect to any
Distribution Date after the
Distribution Date in December 2006, 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 immediately preceding such Distribution Date.
Interest Carryforward Amount: With respect to any Class of Class
A Certificates or
Class M Certificates and any Distribution Date, the sum of (a)
on any Distribution Date on
which the Pass-Through Rate is equal to the Available Funds
Rate, the excess, if any, of (i)
Accrued Certificate Interest for such Class assuming the Net
Rate Cap for such Distribution
Date was equal to the Net WAC Cap Rate over (ii) Accrued
Certificate Interest calculated
based on such Available Funds Rate and (b) interest on the
amount calculated pursuant to
clause (a) for any prior Distribution Date that remains
unreimbursed at the related
Pass-Through Rate for such Distribution Date.
Interest Distribution Amount: For any Distribution Date, the
aggregate of the
amounts payable pursuant to Section 4.02(c)(i).
Interest Only Certificates: None.
Interest Remittance Amount: With respect to any Distribution
Date, the portion of
the Available Distribution Amount for such Distribution Date
attributable to interest
received or advanced with respect to the Mortgage Loans, net of
the Expense Fee Rate and the
Certificate Insurer Premium.
Late Payment Rate: As defined in the Certificate Policy.
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 to by law to be
closed.
LIBOR Certificates: 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.
Liquidation Proceeds: As defined in the Standard Terms but
excluding Subsequent
Recoveries.
Margin: The Class A-1 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 and Class
M-5 Margin , as applicable.
Marker Rate: With respect to the Class SB Certificates or REMIC
II Regular Interest
SB-IO and any Distribution Date, a per annum rate equal to two
(2) times the weighted
average of the Uncertificated REMIC I Pass-Through Rates for
REMIC I Regular Interest LT2
and REMIC I Regular Interest LT3.
Maturity Date: December 26, 2036, the Distribution Date in the
month of the latest
scheduled maturity date of any Mortgage Loan.
Maximum Mortgage Rate: As to any Mortgage Loan, the per annum
rate indicated in
Mortgage Loan Schedule hereto attached hereto 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: As to any Mortgage Loan and any date
of determination,
the Maximum Mortgage Rate minus the Expense Fee Rate.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans
attached hereto as
Exhibit One ( and as amended from time to time to reflect the
addition of Qualified
Substitute Mortgage Loans), which list or lists shall set forth
the following information as
to each Mortgage Loan:
(i)....the Mortgage Loan identifying number ("RFC LOAN #");
(ii)...the maturity of the Mortgage Note ("MATURITY DATE");
(iii)..the Mortgage Rate as of origination ("ORIG RATE");
(iv)...the Mortgage Rate as of the Cut-off Date ("CURR
RATE");
(v)....the Net Mortgage Rate as of the Cut-off Date ("CURR
NET");
(vi)...the scheduled monthly payment of principal, if any, and
interest as of the
Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I");
(vii)..the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(viii).the Maximum Mortgage Rate ("NOTE CEILING");
(ix)...the maximum Net Mortgage Rate ("NET CEILING");
(x)....the Note Margin ("NOTE MARGIN");
(xi)...the Note Margin ("NOTE MARGIN");
(xii)..the Periodic Cap ("PERIODIC DECR" or "PERIODIC
INCR");
(xiii).the rounding of the semi-annual or annual adjustment to
the Mortgage Rate
("NOTE METHOD");
(xiv)..the Loan-to-Value Ratio at origination ("LTV");
(xv)...the rate at which the Subservicing Fee accrues ("SUBSERV
FEE") and at which
the Servicing Fee accrues ("MSTR SERV FEE");
(xvi)..a code "T," "BT" or "CT" under the column "LN FEATURE,"
indicating that the
Mortgage Loan is secured by a second or vacation residence;
and
(xvii).a code "N" under the column "OCCP CODE," indicating that
the Mortgage Loan is
secured by a non-owner occupied residence.
Such schedule may consist of multiple reports that collectively
set forth all of the
information required.
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 each Mortgage Loan 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 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.
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 Rate Cap: With respect to any Class of Class A Certificates
and Class M
Certificates and any Distribution Date, the least of (i) the Net
WAC Cap Rate, (ii) the
Available Funds Rate, and (iii) (A) with respect to the Class
A-1, Class A-2 and Class M
Certificates, 10.000% per annum and (B) with respect to the
Class A-3 Certificates 11.500%
per annum.
Net WAC Cap Rate: With respect to the Offered Certificates and
any Distribution
Date, a per annum rate (which will not be less than zero) equal
to the weighted average of
the Net Mortgage Rates of the Mortgage Loans using the Net
Mortgage Rates in effect on such
Mortgage Loans during the related Due Period (minus, with
respect to the Class A-3
Certificates, the Certificate Insurer Premium Rate), multiplied
by a fraction, expressed as
a percentage, the numerator of which is 30 and the denominator
of which is the actual number
of days in the related Interest Accrual Period for such
Certificates.
Note Margin: With respect to each Mortgage Loan, the fixed
percentage set forth in
the related Mortgage Note and indicated in Exhibit One hereto 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 Mortgage Loan until the
next Adjustment Date.
Notional Amount: With respect to the Class SB Certificates or
the REMIC II Regular
Interest SB-IO, immediately prior to any Distribution Date is
equal to the aggregate of the
Uncertificated Principal Balances of the REMIC I Regular
Interests.
Offered Certificates: The Class A Certificates and the Class M
Certificates.
Optional Termination Date: Any Distribution Date on or after
which the aggregate
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.
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 sum
of (i) the aggregate Certificate Principal Balance of the Class
A Certificates and Class M
Certificates before taking into account distributions of
principal to be made on such
Distribution Date and (ii) any Interest Carryforward Amounts
(without taking into account
interest payable thereon) payable to such Certificates on such
Distribution 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)(v) and (vi) of the
definition of Principal Distribution
Amount as of such Distribution Date) and (b) the excess 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 l
of (i) the Excess
Overcollateralization Amount for that Distribution Date and (ii)
the Principal Remittance
Amount on such Distribution Date.
Pass-Through Rate: With respect to each class of Certificates
(other than the Class
SB Certificates and Class R Certificates), and any Distribution
Date, a per annum rate equal
to the lesser of (i) LIBOR plus the related Margin for such
Distribution Date and (ii) the
Net Rate Cap for such Distribution Date.
With respect to the Class SB Certificates and any Distribution
Date or REMIC II
Regular Interest SB-IO, a rate per annum equal to the percentage
equivalent of a fraction,
the numerator of which is the sum of the amounts calculated
pursuant to clauses (i) through
(iii) below, and the denominator of which is the aggregate
principal balance of the REMIC I
Regular Interests. For purposes of calculating the Pass-Through
Rate for the Class SB
Certificates or the REMIC II Regular Interest SB-IO, the
numerator is equal to the sum of
the following components:
(i)....the Uncertificated Pass-Through Rate for REMIC I Regular
Interest LT1 minus
the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal Balance
of REMIC I Regular Interest LT1;
(ii)...the Uncertificated Pass-Through Rate for REMIC I Regular
Interest LT2 minus
the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal Balance
of REMIC I Regular Interest LT2; and
(iii)..the Uncertificated Pass-Through Rate for REMIC I Regular
Interest LT4 minus
twice the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal
Balance of REMIC I Regular Interest LT4.
Prepayment Assumption: The prepayment assumption to be used for
determining the
accrual of original issue discount and premium and market
discount on the Certificates for
federal income tax purposes, which assumes a constant prepayment
rate of 25% per annum of
the then outstanding principal balance of the Mortgage
Loans.
Prepayment Charge: With respect to any Mortgage Loan, the
charges or premiums, if
any, received in connection with a full or partial prepayment of
such Mortgage Loan in
accordance with the terms thereof.
Prepayment Charge Loan: Any Mortgage Loan for which a Prepayment
Charge may be
assessed and to which such Prepayment Charge the Class SB
Certificates are entitled, as
indicated on the Mortgage Loan Schedule.
Principal Distribution Amount: With respect to any Distribution
Date, the lesser of
(a) the excess of (x) Available Distribution Amount over (y) the
sum of (1) the Interest
Distribution Amount and (2) reimbursements to the Certificate
Insurer for the Insured
Payments made with respect to interest 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 prior calendar
month;
(iii)..the principal portion of all other unscheduled
collections, other than
Subsequent Recoveries, on the Mortgage Loans received (or deemed
to have been so received)
during the prior calendar month or, in the case of Principal
Prepayments in Full, during the
related Prepayment Period, including, without limitation,
Curtailments, Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and, except to the extent
applied to offset Deferred
Interest, Principal Prepayments, to the extent applied by the
Master Servicer as recoveries
of principal pursuant to Section 3.14;
(iv)...the lesser of (A) Subsequent Recoveries for such
Distribution Date and
(B) the principal portion of any Realized Losses allocated to
the Class M Certificates on a
prior Distribution Date and remaining unpaid;
(v)....the lesser of (A) the sum 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) payments received by the Trustee under the Class
A/Class M Yield Maintenance
Agreement in respect of Realized Losses to the extent necessary
to maintain the Required
Overcollateralization Amount and (B) 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 that are allocated to any Class of
Certificates; and
(vi)...the lesser of (a) the Excess Cash Flow for such
Distribution Date, to the
extent not used pursuant to clause (v) of this definition on
such Distribution Date, and (b)
the amount of any 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 Only Certificates: None.
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.
Record Date: With respect to each Distribution Date and each
Class of Book Entry
Certificates, the Business Day immediately preceding such
Distribution Date. With respect
to each Class of Definitive 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.
Regular Certificates: The Class A, Class M and Class SB
Certificates.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans
resulting from the
Relief Act or similar legislation or regulations.
REMIC I: The segregated pool of assets with respect to which a
REMIC election is to
be made, consisting of:
(i)....the Mortgage Loans and the related Mortgage Files,
(ii)...all payments 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, if any, and
(v)....all proceeds of clauses (i) through (iv) above.
Notwithstanding the foregoing, the REMIC election with respect
to REMIC I
specifically excludes the Yield Maintenance Agreements.
REMIC I Distribution Amount: For any Distribution Date, the
Available Distribution
Amount shall be distributed to the REMIC I Regular Interests and
the Class R-I Certificates
in the following amounts and priority:
(i) to the extent of the Available Distribution Amount, to REMIC
II as the
holder of REMIC I Regular Interests LT1, LT2, LT3 and LT4, pro
rata, in an amount equal to
(A) their Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts
in respect thereof remaining unpaid from previous Distribution
Dates, in the case of REMIC I
Regular Interest LT1 each such amount having first been reduced
by any Deferred Interest for
the related Distribution Date; and
(ii) to the extent of the Available Distribution Amount
remaining after the
distributions made pursuant to clause (i) above, to REMIC II as
the holder of the REMIC I
Regular Interests, in an amount equal to:
(A) in respect of REMIC I Regular Interests LT2, LT3 and LT4,
their
respective Principal Distribution Amounts;
(B) in respect of REMIC I Regular Interest LT1 any remainder
until
the Uncertificated Principal Balance thereof is reduced to
zero;
(C) any remainder in respect of REMIC I Regular Interests LT2,
LT3
and LT4, pro rata according to their respective Uncertificated
Principal Balances as reduced
by the distributions deemed made pursuant to (A) above, until
their respective
Uncertificated Principal Balances are reduced to zero; and
(iii) any remaining amounts to the Holders of the Class R-I
Certificates.
REMIC I Principal Reduction Amounts: For any Distribution Date,
the amounts by which
the principal balances of REMIC I 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 aggregate principal balance of REMIC I Regular
Interest LT1 after
distributions on the prior Distribution Date.
Y2 =...the principal balance of REMIC I Regular Interest LT2
after distributions on
the prior Distribution Date.
Y3 =...the principal balance of REMIC I Regular Interest LT3
after distributions on
the prior Distribution Date.
Y4 =...the principal balance of REMIC I Regular Interest LT4
after distributions on
the prior Distribution Date (note: Y3 = Y4).
AY1 =..the REMIC I Regular Interest LT1 Principal Reduction
Amount.
AY2 =..the REMIC I Regular Interest LT2 Principal Reduction
Amount.
AY3 =..the REMIC I Regular Interest LT3 Principal Reduction
Amount.
AY4 =..the REMIC I Regular Interest LT4 Principal Reduction
Amount.
P0 =...the aggregate principal balance of REMIC I 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 REMIC I Regular
Interests LT1, LT2, LT3
and LT4 after distributions and the allocation of Realized
Losses to be made on such
Distribution Date.
AP =...P0 - P1 = the aggregate of REMIC I 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 Net WAC Cap Rate (stated as a monthly rate) after
giving effect to
amounts distributed and Realized Losses allocated on the prior
Distribution Date.
R1 =...the Net WAC Cap Rate (stated as a monthly rate) after
giving effect to
amounts to be distributed and Realized Losses to be allocated on
such Distribution Date.
a =....(Y2 + Y3)/P0. The initial value of a on the Closing Date
for use on the
first Distribution Date shall be 0.0001.
a0 =...the lesser of (A) the sum for all Classes of
Certificates, other than the
Class SB Certificates, of the product for each Class of (i) the
monthly interest rate (as
limited by the Net WAC Cap 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.
a1 =..the lesser of (A) the sum for all Classes of Certificates,
other than the
Class SB Certificates, of the product for each Class of (i) the
monthly interest rate (as
limited by the Net WAC Cap 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:
AY1 =..AP - AY2 - AY3 - AY4;
AY2 =..(a/2){( a0R1 - a1R0)/R0R1};
AY3 =..aAP - AY2; and
AY4 =..AY3.
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1)....If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
(2)....If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a1R0P0 - a0R1P1}/{2R1R0P1 - a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
REMIC I Realized Losses: Realized Losses on the Mortgage Loans
shall be allocated to
the REMIC I Regular Interests as follows: The interest portion
of Realized Losses on the
Mortgage Loans, if any, shall be allocated among REMIC I 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
on the Mortgage Loans, if
any, shall be allocated first, to REMIC I Regular Interests LT2,
LT3 and LT4 pro rata
according to their respective Principal Reduction Amounts to the
extent thereof in reduction
of the Uncertificated Principal Balance of such REMIC I Regular
Interests and, second, the
remainder, if any, of such principal portion of such Realized
Losses shall be allocated to
REMIC I Regular Interest LT1 in reduction of the Uncertificated
Principal Balance thereof.
REMIC I Regular Interests: REMIC I Regular Interests LT1, LT2,
LT3 and LT4.
REMIC I Regular Interest LT1: 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 I Regular Interest LT1 Principal Distribution Amount: For
any Distribution
Date, the excess, if any, of the REMIC I Regular Interest LT1
Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest
LT1 on such Distribution Date.
REMIC I Regular Interest LT2: 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 I Regular Interest LT2 Principal Distribution Amount: For
any Distribution
Date, the excess, if any, of the REMIC I Regular Interest LT2
Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest
LT2 on such Distribution Date.
REMIC I Regular Interest LT3: 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 I Regular Interest LT3 Principal Distribution Amount: For
any Distribution
Date, the excess, if any, of the REMIC I Regular Interest LT3
Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest
LT3 on such Distribution Date.
REMIC I Regular Interest LT4: 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 I Regular Interest LT4 Principal Distribution Amount: For
any Distribution
Date, the excess, if any, of the REMIC I Regular Interest LT4
Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest
LT4 on such Distribution Date.
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. The
REMIC election with respect to REMIC II specifically excludes
the Yield Maintenance
Agreements.
REMIC II Regular Interest: Any one of REMIC II Regular Interest
A-1, REMIC II
Regular Interest A-2, REMIC II Regular Interest A-3, REMIC II
Regular Interest M-1, REMIC II
Regular Interest M-2, REMIC II Regular Interest M-3, REMIC II
Regular Interest M-4, REMIC II
Regular Interest M-5, REMIC II Regular Interest SB-IO or REMIC
II Regular Interest SB-PO.
REMIC II Regular Interest A-1: A regular interest in REMIC II
which has a principal
balance equal to the principal balance of the Class A-1
Certificates and which is entitled
to interest at a rate equal to the lesser of (i) LIBOR plus the
Class A-1 Margin and (ii)
the Net WAC Cap Rate. Interest accrued in any Interest Accrual
Period and not paid on the
related Distribution Date shall carry forward to each succeeding
Distribution Date without
interest until paid.
REMIC II Regular Interest A-2: A regular interest in REMIC II
which is has a
principal balance equal to the principal balance of the Class
A-2 Certificates and which is
entitled to interest at a rate equal to the lesser of (i) LIBOR
plus the Class A-2 Margin
and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid
on the related Distribution Date shall carry forward to each
succeeding Distribution Date
without interest until paid.
REMIC II Regular Interest A-3: A regular interest in REMIC II
which is has a
principal balance equal to the principal balance of the Class
A-3 Certificates and which is
entitled to interest at a rate equal to the lesser of (i) LIBOR
plus the Class A-3 Margin
and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid
on the related Distribution Date shall carry forward to each
succeeding Distribution Date
without interest until paid.
REMIC II Regular Interest M-1: A regular interest in REMIC II
which is has a
principal balance equal to the principal balance of the Class
M-1 Certificates and which is
entitled to interest at a rate equal to the lesser of (i) LIBOR
plus the Class M-1 Margin
and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid
on the related Distribution Date shall carry forward to each
succeeding Distribution Date
without interest until paid.
REMIC II Regular Interest M-2: A regular interest in REMIC II
which is has a
principal balance equal to the principal balance of the Class
M-2 Certificates and which is
entitled to interest at a rate equal to the lesser of (i) LIBOR
plus the Class M-2 Margin
and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid
on the related Distribution Date shall carry forward to each
succeeding Distribution Date
without interest until paid.
REMIC II Regular Interest M-3: A regular interest in REMIC II
which is has a
principal balance equal to the principal balance of the Class
M-3 Certificates and which is
entitled to interest at a rate equal to the lesser of (i) LIBOR
plus the Class M-3 Margin
and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid
on the related Distribution Date shall carry forward to each
succeeding Distribution Date
without interest until paid.
REMIC II Regular Interest M-4: A regular interest in REMIC II
which is has a
principal balance equal to the principal balance of the Class
M-4 Certificates and which is
entitled to interest at a rate equal to the lesser of (i) LIBOR
plus the Class M-4 Margin
and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid
on the related Distribution Date shall carry forward to each
succeeding Distribution Date
without interest until paid.
REMIC II Regular Interest M-5: A regular interest in REMIC II
which is has a
principal balance equal to the principal balance of the Class
M-5 Certificates and which is
entitled to interest at a rate equal to the lesser of (i) LIBOR
plus the Class M-5 Margin
and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid
on the related Distribution Date shall carry forward to each
succeeding Distribution Date
without interest until paid.
REMIC II Regular Interest SB-IO: A regular interest in REMIC II
that has no initial
principal, that bears interest at the related Pass-Through Rate,
and that has such other
terms as are described herein.
REMIC II Regular Interest SB-PO: A regular interest in REMIC II
that has an initial
principal balance equal to the initial principal balance for the
Class SB Certificates, as
set forth in the Preliminary Statement, that bears no interest,
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 SB-IO
and SB-PO.
REMIC III Regular Interest: The separate beneficial ownership
interest in REMIC III
issued hereunder and designated as a "regular interest" in REMIC
III, the ownership of which
is evidenced by the Class SB Certificates. The REMIC III Regular
Interest will not have a
Pass-Through Rate, but will be entitled to 100% of all amounts
distributed or deemed
distributed on REMIC II Regular Interests SB-IO and SB-PO.
Required Overcollateralization Amount: With respect to any
Distribution Date (i)
prior to the Stepdown Date, an amount equal to 0.75% of the
aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; (ii) on or
after the Stepdown Date but
prior to the Distribution Date in December 2012, provided a
Trigger Event is not in effect,
the greater of (x) 1.875% of the outstanding aggregate Stated
Principal Balance of the
Mortgage Loans after giving effect to distributions made on that
Distribution Date and (y)
the Overcollateralization Floor; (iii) on or after the Stepdown
Date and on or after the
Distribution Date in December 2012, provided a Trigger Event is
not in effect, the greater
of (x) 1.50% of the outstanding aggregate Stated Principal
Balance of the Mortgage Loans
after giving effect to distributions made on that Distribution
Date and (y) the
Overcollateralization Floor; and (iv) on or after the Stepdown
Date if a Trigger Event is in
effect, the Required Overcollateralization Amount for the
immediately preceding Distribution
Date; provided that the Required Overcollateralization Amount
may be reduced so long as
written confirmation is obtained from each rating agency that
the reduction will not reduce
the ratings assigned to the Class A Certificates and Class M
Certificates by that rating
agency (without regard to the Certificate Policy) below the
lower of the then-current
ratings or the ratings assigned to those certificates as of the
closing date by that rating
agency.
Senior Certificate: Any one of the Class A Certificates.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage
obtained by dividing (x) 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, by (y) the
aggregated Stated Principal Balance of the Mortgage Loans after
giving effect to
distributions to be made on that Distribution Date.
Sixty-Plus Delinquency Percentage: With respect to any
Distribution Date on or after
the Stepdown Date, the arithmetic average, for each of the three
consecutive 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 the
applicable Due Date preceding that
Distribution Date, including Mortgage Loans in foreclosure, REO
Properties and Mortgage
Loans in bankruptcy over (y) the aggregate Stated Principal
Balance of all of the Mortgage
Loans immediately preceding that Distribution Date.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property,
and as of any date of determination, (i) the sum of (a) the
Cut-off Date Principal Balance
of the Mortgage Loan plus (b) any amount by which the Stated
Principal Balance of the
Mortgage Loan has been increased pursuant to a Servicing
Modification and (c) any amount by
which the Stated Principal Balance of the Mortgage Loan has been
increased for Deferred
Interest pursuant to the terms of the related Mortgage Note on
or prior to the Distribution
Date, 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: The earlier to occur of (1) the Distribution Date
immediately
following the Distribution Date on which the aggregate
Certificate Principal Balance of the
Class A Certificates has been reduced to zero and (2) the later
to occur of (x) the
Distribution Date in December 2009 and (y) the first
Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to (a) on any
Distribution Date prior to the
Distribution Date in December 2012, approximately 15.00% and (b)
on any Distribution Date on
or after the Distribution Date in December 2012, 12.00%.
Subordination Percentage: With respect to each class of Class A
Certificates and
Class M Certificates, the respective approximate percentage set
forth in the table below:
Class Percentage (1) Percentage (2)
A 85.000% 88.000%
M-1 91.125% 92.900%
M-2 94.375% 95.500%
M-3 95.625% 96.500%
M-4 96.875% 97.500%
M-5 98.125% 98.500%
(1) For any Distribution Date prior to the Distribution Date
in
December 2012.
(2) For any Distribution Date in December 2012 or
thereafter.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date if
(a) the Sixty-Plus Delinquency Percentage, as determined on that
Distribution Date, exceeds
40.00% of the Senior Enhancement Percentage for that
Distribution Date or (b) the aggregate
amount of Realized Losses on the Mortgage Loans as a percentage
of the initial aggregate
Stated Principal Balance as of the Cut-off Date exceeds the
applicable amount set forth
below:
o December 2008 to November 2009: 0.150% with respect to
December 2008, plus an
additional 1/12th of 0.250% for each month through November
2009.
o December 2009 to November 2010: 0.400% with respect to
December 2009, plus an
additional 1/12th of 0.300% for each month through November
2010.
o December 2010 to November 2011: 0.700% with respect to
December 2010, plus an
additional 1/12th of 0.300% for each month through November
2011.
o December 2011 to November 2012: 1.000% with respect to July
2011, plus an
additional 1/12th of 0.350% for each month through November
2012.
o December 2012 to November 2013: 1.350% with respect to
December 2012, plus an
additional 1/12th of 0.150% for each month through November
2013.
o July 2013 and thereafter: 1.500%.
2006-QH1 REMIC: Any of REMIC I, REMIC II or REMIC III, as the
case may be.
Uncertificated Accrued Interest: With respect to the REMIC I
Regular Interests for
any Distribution Date, one month's interest at the related
Uncertificated REMIC I
Pass-Through Rate for such Distribution Date, accrued on its
Uncertificated Principal
Balance, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for
the REMIC I 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) relating to the Mortgage Loans for any Distribution
Date shall be allocated among
REMIC I Regular Interests LT1, LT2, LT3 and LT4, pro rata, based
on, and to the extent of,
Uncertificated Accrued Interest, as calculated without
application of this sentence.
Uncertificated Accrued Interest on REMIC II Regular Interest
SB-PO shall be zero.
Uncertificated Accrued Interest on REMIC II Regular Interest
SB-IO for each Distribution
Date shall equal Accrued Certificate Interest for the Class SB
Certificates.
Uncertificated Principal Balance: The principal amount of any
REMIC I Regular
Interest outstanding as of any date of determination. The
Uncertificated Principal Balance
of each REMIC I Regular Interest shall be reduced first by
Realized Losses allocated thereto
by the definition of REMIC I Realized Losses, and by all
distributions of principal deemed
made on such REMIC I Regular Interest on such Distribution Date.
The Uncertificated
Principal Balance of each REMIC I Regular Interest shall never
be less than zero. With
respect to the REMIC II 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 REMIC I Pass-Through Rate: With respect to any
Distribution Date and
(i) REMIC I Regular Interests LT1 and LT2, the Net WAC Cap Rate,
(ii) REMIC I Regular
Interest LT3, zero (0.00%) and (iii) REMIC I Regular Interest
LT4, twice the Net WAC Cap
Rate.
Underwriter: Goldman, Sachs & Co.
Yield Maintenance Agreements: The Class A-3 Yield Maintenance
Agreement together with
the Class A/Class M Yield Maintenance Agreement.
Yield Maintenance Agreements Provider: Bear Stearns Financial
Products Inc.
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 Dow Jones
Telerate Screen Page 3750 as of
11:00 a.m., London time, on such LIBOR Rate Adjustment Date.
"Dow Jones Telerate Screen
Page 3750" means the display designated as page 3750 on the
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 will request the principal London office of each of the
reference banks to provide a
quotation of its rate. If at least two such quotations are
provided, the rate 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 and the Master
Servicer on any LIBOR Rate
Adjustment Date and the Master Servicer's subsequent calculation
of the Pass-Through Rate
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 will supply to any Certificateholder so requesting
by telephone by calling (800)
735-7777 the Pass-Through Rate on the LIBOR Certificates for the
current and the immediately
preceding Interest Accrual Period.
SECTION 1.03. USE OF WORDS AND PHRASES.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other
equivalent words refer to the Pooling and Servicing Agreement as
a whole. All references
herein to Articles, Sections or Subsections shall mean the
corresponding Articles, Sections
and Subsections in the Pooling and Servicing Agreement. The
definitions set forth herein
include both the singular and the plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. CONVEYANCE OF MORTGAGE LOANS.
(A) The Company, concurrently with the execution and delivery
hereof, does hereby assign
to the Trustee for the benefit of the Certificateholders and the
Certificate Insurer without
recourse all the right, title and interest of the Company in and
to the Mortgage Loans,
including all interest and principal received on or with respect
to the Mortgage Loans after
the Cut-off Date (other than payments of principal and interest
due on the Mortgage Loans in
the month of the Cut-off Date). In connection with such transfer
and assignment, the
Company does hereby deliver to the Trustee the Certificate
Policy (as defined in the Series
Supplement), if any for the benefit of the Holders of the Class
A-3 Certificates.
(B) In connection with such assignment, except as set forth in
Section 2.01(c) and
subject to Section 2.01(d) below, the Company does hereby (1)
with respect to each Mortgage
Loan (other than a Cooperative Loan or a Sharia Mortgage Loan),
deliver to the Master
Servicer (or an Affiliate of the Master Servicer) each of the
documents or instruments
described in clause (I)(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 on behalf of the
Trustee, the documents or
instruments described in clauses (I)(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 to the Custodian on behalf of the Trustee,
the documents or instruments
described in clauses (I)(i), (iv) and (v) below, (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 to the Custodian on behalf of the Trustee, the
documents or instruments
described in clauses (I)(i), (iii), (iv) and (v) below, and (5)
with respect to each
Cooperative Loan and Sharia Mortgage Loan, deliver to and
deposit with the Trustee, or to
the Custodian on behalf of the Trustee, the documents and
instruments described in clause
(II) and clause (III) below:
(I) with respect to each Mortgage Loan so assigned (other than
a
Cooperative Loan or a Sharia Mortgage Loan):
(I) The original Mortgage Note, endorsed without recourse in
blank or 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
Mortgage with evidence of recording indicated thereon;
(III) The original Assignment 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 thereof 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; and
(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
(II) with respect to each Cooperative Loan so assigned:
(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) A counterpart of the Cooperative Lease and the Assignment
of Proprietary Lease to the
originator of the Cooperative Loan with intervening assignments
showing an
unbroken chain of title from such originator to the Trustee or a
copy of such
Cooperative Lease and Assignment of Proprietary Lease and copies
of such
intervening assignments;
(III) The related Cooperative Stock Certificate, representing
the related Cooperative Stock
pledged with respect to such Cooperative Loan, together with an
undated stock
power (or other similar instrument) executed in blank or copies
thereof;
(IV) The original recognition agreement by the Cooperative of
the interests of the
mortgagee with respect to the related Cooperative Loan or a copy
thereof;
(V) The Security Agreement or a copy thereof;
(VI) Copies of the original UCC-1 financing statement, and any
continuation statements,
filed by the originator of such Cooperative Loan as secured
party, each with
evidence of recording thereof, evidencing the interest of the
originator under
the Security Agreement and the Assignment of Proprietary
Lease;
(VII) Copies of the filed UCC-3 assignments of the security
interest referenced in clause
(vi) above showing an unbroken chain of title from the
originator to the
Trustee, each with evidence of recording thereof, evidencing the
interest of
the originator under the Security Agreement and the Assignment
of Proprietary
Lease;
(VIII) An executed assignment of the interest of the originator
in the Security Agreement,
Assignment of Proprietary Lease and the recognition agreement
referenced in
clause (iv) above, showing an unbroken chain of title from the
originator to
the Trustee, or a copy thereof;
(IX) The original of each modification, assumption agreement or
preferred loan agreement,
if any, relating to such Cooperative Loan or a copy of each
modification,
assumption agreement or preferred loan agreement; and
(X) A duly completed UCC-1 financing statement showing the
Master Servicer as debtor, the
Company as secured party and the Trustee as assignee and a duly
completed
UCC-1 financing statement showing the Company as debtor and the
Trustee as
secured party, each in a form sufficient for filing, evidencing
the interest
of such debtors in the Cooperative Loans or copies thereof;
(III) with respect to each Sharia Mortgage Loan so assigned:
(I) The original Obligation to Pay, endorsed without recourse in
blank or 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 Obligation to Pay, an original affidavit from the
related Seller or
Residential Funding stating that the original Obligation to Pay
was lost,
misplaced or destroyed, together with a copy of the related
Obligation to Pay;
(II) The original Sharia Mortgage Loan Security Instrument, with
evidence of recording
indicated thereon or a copy of the Sharia Mortgage Loan Security
Instrument
with evidence of recording indicated thereon;
(III) An original Assignment and Amendment of Security
Instrument, assigned to the Trustee
with evidence of recording indicated thereon or a copy of such
Assignment and
Amendment of Security Instrument with evidence of recording
indicated thereon;
(IV) The original recorded assignment or assignments of the
Sharia Mortgage Loan Security
Instrument showing an unbroken chain of title from the
originator thereof to
the Person assigning it to the Trustee with evidence of
recordation noted
thereon or attached thereto, or a copy of such assignment or
assignments of
the Sharia Mortgage Loan Security Instrument with evidence of
recording
indicated thereon;
(V) The original Sharia Mortgage Loan Co-Ownership Agreement
with respect to the related
Sharia Mortgage Loan or a copy of such Sharia Mortgage Loan
Co-Ownership
Agreement; and
(VI) The original of each modification or assumption agreement,
if any, relating to such
Sharia Mortgage Loan or a copy of each modification or
assumption agreement.
(C) The Company may, in lieu of delivering the original of the
documents set forth in
Sections 2.01(b)(I)(iii), (iv) and (v), Sections (b)(II)(ii),
(iv), (vii), (ix) and (x) and
Sections 2.01(b)(III)(ii), (iii), (iv), (v) and (vi) (or copies
thereof) to the Trustee or
to the Custodian on behalf of the Trustee, 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 and the Certificate
Insurer 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 Sections
2.01(b)(I)(iii), (iv) and (v), Sections (b)(II)(ii), (iv),
(vii), (ix) and (x) and Sections
2.01(b)(III)(ii), (iii), (iv), (v) and (vi) (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 to
the Custodian on behalf of the
Trustee.
The parties hereto 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
Mortgage 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 House Enrolled
Act No. 1229, effective as of January 1, 2005.
(D) Notwithstanding the provisions of Section 2.01(c), in
connection with any Mortgage
Loan, if the Company 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 Company
shall deliver or cause to be delivered to the Trustee or to the
Custodian on behalf of the
Trustee a copy of such Mortgage, assignment, modification,
assumption agreement or preferred
loan agreement.
The Company (i) shall promptly cause to be recorded in the
appropriate public office
for real property records the Assignment referred to in clause
(I)(iii) of Section 2.01(b),
except (a) in states where, in the opinion of counsel acceptable
to the Trustee and the
Master Servicer, such recording is not required to protect the
Trustee's interests in the
Mortgage Loan against the claim of any subsequent transferee or
any successor to or creditor
of the Company or the originator of such Mortgage Loan or (b) if
MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as
the mortgagee of record
solely as nominee for the Seller and its successors and assigns,
(ii) shall promptly cause
to be filed the Form UCC-3 assignment and UCC-1 financing
statement referred to in clauses
(II)(vii) and (x), respectively, of Section 2.01(b) and (iii)
shall promptly cause to be
recorded in the appropriate public recording office for real
property records the Assignment
Agreement and Amendment of Security Instrument referred to in
clause (III)(iii) of Section
2.01(b). If any Assignment, Assignment Agreement and Amendment
of Security Instrument, Form
UCC-3 or Form UCC-1, as applicable, is lost or returned
unrecorded to the Company because of
any defect therein, the Company shall prepare a substitute
Assignment, Assignment Agreement
and Amendment of Security Instrument, Form UCC-3 or Form UCC-1,
as applicable, or cure such
defect, as the case may be, and cause such Assignment or
Assignment Agreement and Amendment
of Security Instrument to be recorded in accordance with this
paragraph. The Company shall
promptly deliver or cause to be delivered to the applicable
person described in Section
2.01(b), any Assignment, substitute Assignment, Assignment
Agreement and Amendment of
Security Instrument or Form UCC-3 or Form UCC-1, as applicable,
(or copy thereof) recorded
in connection with this paragraph, with evidence of recording
indicated thereon at the time
specified in Section 2.01(c). In connection with its servicing
of Cooperative Loans, the
Master Servicer will use its best efforts to file timely
continuation statements with regard
to each financing statement and assignment relating to
Cooperative Loans as to which the
related Cooperative Apartment is located outside of the State of
New York.
If the Company delivers to the Trustee or to the Custodian on
behalf of the Trustee
any Mortgage Note, Obligation to Pay, Assignment Agreement and
Amendment of Security
Instrument or Assignment of Mortgage in blank, the Company
shall, or shall cause the
Custodian to, complete the endorsement of the Mortgage Note,
Obligation to Pay, Assignment
Agreement and Amendment of Security Instrument and 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 Company further agrees that it will cause, at the
Company'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 Company 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 Company 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.
(E) Residential Funding hereby assigns to the Trustee its
security interest in and to any
Additional Collateral or Pledged Assets, its right to receive
amounts due or to become due
in respect of any Additional Collateral or Pledged Assets
pursuant to the related
Subservicing Agreement and its rights as beneficiary under the
Surety Bond in respect of any
Additional Collateral Loans. With respect to any Additional
Collateral Loan or Pledged
Asset Loan, Residential Funding shall cause to be filed in the
appropriate recording office
a UCC-3 statement giving notice of the assignment of the related
security interest to the
Trust Fund and shall thereafter cause the timely filing of all
necessary continuation
statements with regard to such financing statements.
(F) It is intended that the conveyance by the Company to the
Trustee of the Mortgage
Loans as provided for in this Section 2.01 be and the
Uncertificated REMIC Regular
Interests, if any (as provided for in Section 2.06), be
construed as a sale by the Company
to the Trustee of the Mortgage Loans and any Uncertificated
REMIC Regular Interests for the
benefit of the Certificateholders. Further, it is not intended
that such conveyance be
deemed to be a pledge of the Mortgage Loans and any
Uncertificated REMIC Regular Interests
by the Company to the Trustee to secure a debt or other
obligation of the Company.
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
conveyance provided for in
Section 2.01 shall be deemed to be, and hereby is, (1) a grant
by the Company to the Trustee
of a security interest in all of the Company's right (including
the power to convey title
thereto), title and interest, whether now owned or hereafter
acquired, in and to 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
following: (A) the Mortgage Loans, including (i) with respect to
each Cooperative Loan, the
related Mortgage Note, Security Agreement, Assignment of
Proprietary Lease, Cooperative
Stock Certificate and Cooperative Lease, (ii) with respect to
each Sharia Mortgage Loan, the
related Sharia Mortgage Loan Security Instrument, Sharia
Mortgage Loan Co-Ownership
Agreement, Obligation to Pay and Assignment Agreement and
Amendment of Security Instrument,
(iii) with respect to each Mortgage Loan other than a
Cooperative Loan or a Sharia Mortgage
Loan, the related Mortgage Note and Mortgage, and (iv) any
insurance policies and all other
documents in the related Mortgage File, (B) all amounts payable
pursuant to the Mortgage
Loans in accordance with the terms thereof, (C) any
Uncertificated REMIC Regular Interests
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 Company 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
Company pursuant to the
Assignment Agreement; (c) the possession by the Trustee, any
Custodian on behalf of the
Trustee 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, 9-314 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 Company and, at the Company'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 determined to
create a security interest in
the Mortgage Loans, any Uncertificated REMIC Regular Interests
and the other property
described above, such security interest would be determined 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 Company
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 Company, 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 any
Uncertificated REMIC Regular Interests, as evidenced by an
Officers' Certificate of the
Company, 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
Company 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 type or jurisdiction of
organization of Residential Funding or the Company, (3) any
transfer of any interest of
Residential Funding or the Company in any Mortgage Loan or (4)
any transfer of any interest
of Residential Funding or the Company in any Uncertificated
REMIC Regular Interest.
(G) The Master Servicer hereby acknowledges the receipt by it of
the Initial Monthly
Payment Fund. The Master Servicer shall hold such Initial
Monthly Payment Fund in the
Custodial Account and shall include such Initial Monthly Payment
Fund in the Available
Distribution Amount for the initial Distribution Date.
Notwithstanding anything herein to
the contrary, the Initial Monthly Payment Fund shall not be an
asset of any REMIC. To the
extent that the Initial Monthly Payment Fund constitutes a
reserve fund for federal income
tax purposes, (1) it shall be an outside reserve fund and not an
asset of any REMIC, (2) it
shall be owned by the Seller and (3) amounts transferred by any
REMIC to the Initial Monthly
Payment Fund shall be treated as transferred to the Seller or
any successor, all within the
meaning of Section 1.860G-2(h) of the Treasury Regulations.
(H) The Company agrees that the sale of each Pledged Asset Loan
pursuant to this
Agreement will also constitute the assignment, sale,
setting-over, transfer and conveyance
to the Trustee, without recourse (but subject to the Company's
covenants, representations
and warranties specifically provided herein), of all of the
Company's obligations and all of
the Company's right, title and interest in, to and under,
whether now existing or hereafter
acquired as owner of the Mortgage Loan with respect to any and
all money, securities,
security entitlements, accounts, general intangibles, payment
intangibles, instruments,
documents, deposit accounts, certificates of deposit,
commodities contracts, and other
investment property and other property of whatever kind or
description consisting of,
arising from or related to (i) the Assigned Contracts, (ii) all
rights, powers and remedies
of the Company as owner of such Mortgage Loan under or in
connection with the Assigned
Contracts, whether arising under the terms of such Assigned
Contracts, by statute, at law or
in equity, or otherwise arising out of any default by the
Mortgagor under or in connection
with the Assigned Contracts, including all rights to exercise
any election or option or to
make any decision or determination or to give or receive any
notice, consent, approval or
waiver thereunder, (iii) the Pledged Amounts and all money,
securities, security
entitlements, accounts, general intangibles, payment
intangibles, instruments, documents,
deposit accounts, certificates of deposit, commodities
contracts, and other investment
property and other property of whatever kind or description and
all cash and non-cash
proceeds of the sale, exchange, or redemption of, and all stock
or conversion rights, rights
to subscribe, liquidation dividends or preferences, stock
dividends, rights to interest,
dividends, earnings, income, rents, issues, profits, interest
payments or other
distributions of cash or other property that secures a Pledged
Asset Loan, (iv) all
documents, books and records concerning the foregoing (including
all computer programs,
tapes, disks and related items containing any such information)
and (v) all insurance
proceeds (including proceeds from the Federal Deposit Insurance
Corporation or the
Securities Investor Protection Corporation or any other
insurance company) of any of the
foregoing or replacements thereof or substitutions therefor,
proceeds of proceeds and the
conversion, voluntary or involuntary, of any thereof. The
foregoing transfer, sale,
assignment and conveyance does not constitute and is not
intended to result in the creation,
or an assumption by the Trustee, of any obligation of the
Company, or any other person in
connection with the Pledged Assets or under any agreement or
instrument relating thereto,
including any obligation to the Mortgagor, other than as owner
of the Mortgage Loan.
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 required to be delivered to the Trustee (or the
Custodian on behalf of the
Trustee) pursuant to Section 2.01(b) above (except that for
purposes of such acknowledgement
only, a Mortgage Note may be endorsed 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, and the rights of
Residential Funding with respect to any Pledged Assets,
Additional Collateral and the Surety
Bond assigned to the Trustee pursuant to Section 2.01, in trust
for the use and benefit of
all present and future Certificateholders and the Certificate
Insurer. The Trustee or
Custodian (the Custodian being so obligated under a Custodial
Agreement) agrees, for the
benefit of Certificateholders and the Certificate Insurer, to
review each Custodial File
delivered to it pursuant to Section 2.01(b) within 45 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
Company 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(c) 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, the Trustee shall
promptly so notify the Master Servicer and the Company. Pursuant
to Section 2.3 of the
Custodial Agreement, the Custodian will notify the Master
Servicer, the Company 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 reviewed by it pursuant to the
Custodial Agreement. If such
omission or defect materially and adversely affects the
interests of the Certificateholders
or the Certificate Insurer, the Master Servicer shall promptly
notify Residential Funding of
such omission or defect and request Residential Funding to
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 Residential Funding does not correct or cure such
omission or defect within
such period, require Residential Funding to purchase such
Mortgage Loan from the Trust Fund
at its Purchase Price, 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 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 Master Servicer,
the Trustee 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 owners'
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 Residential Funding or its designee any
Mortgage Loan released pursuant
hereto and thereafter such Mortgage Loan shall not be part of
the Trust Fund. It is
understood and agreed that the obligation of Residential Funding
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 the
Certificateholders or the
Certificate Insurer.
SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
MASTER SERVICER AND THE
COMPANY.
(A) For representations, warranties and covenants of the Master
Servicer, see Section
2.03(a) of the Standard Terms.
(B) The Company hereby represents and warrants to the Trustee
for the benefit of
Certificateholders and the Certificate Insurer that as of the
Closing Date (or, if otherwise
specified below, as of the date so specified):
(I) No Mortgage Loan is 30 or more days Delinquent in payment of
principal and interest
as of the Cut-off Date and no Mortgage Loan has been so
Delinquent more than
once in the 12-month period prior to the Cut-off Date;
(II) The information set forth in Exhibit One hereto with
respect to each Mortgage Loan or
the Mortgage Loans, as the case may be, is true and correct in
all material
respects at the date or dates respecting which such information
is furnished;
(III) The Mortgage Loans are payment-option adjustable-rate
mortgage loans with a negative
amortization feature with Monthly Payments due, with respect to
a majority of
the Mortgage Loans, on the first day of each month and terms to
maturity at
origination or modification of not more than 40 years;
(IV) To the best of the Company's knowledge, except with respect
to two Mortgage Loans,
representing no more than 4.9% of the aggregate Stated Principal
Balance of
the Mortgage Loans, if a Mortgage Loan is secured by a Mortgaged
Property with
a Loan-to-Value Ratio at origination in excess of 80%, such
Mortgage Loan is
the subject of a Primary Insurance Policy that insures (a) at
least 35% of the
Stated Principal Balance of the Mortgage Loan at origination if
the
Loan-to-Value Ratio is between 100.00% and 95.01%, (b) at least
30% of the
Stated Principal Balance of the Mortgage Loan at origination if
the
Loan-to-Value Ratio is between 95.00% and 90.01%, (c) at least
25% of such
balance if the Loan-to-Value Ratio is between 90.00% and 85.01%
and (d) at
least 12% of such balance if the Loan-to-Value Ratio is between
85.00% and
80.01%. To the best of the Company's knowledge, each such
Primary Insurance
Policy is in full force and effect and the Trustee is entitled
to the benefits
thereunder;
(V) The issuers of the Primary Insurance Policies are insurance
companies whose
claims-paying abilities are currently acceptable to each Rating
Agency;
(VI) No more than 0.9% of the Mortgage Loans by aggregate Stated
Principal Balance as of
the Cut-off Date are secured by Mortgaged Properties located in
any one zip
code area in California, and no more than 0.5% of the Mortgage
Loans by
aggregate Stated Principal Balance as of the Cut-off Date are
secured by
Mortgaged Properties located in any one zip code area outside
California;
(VII) The improvements upon the Mortgaged Properties are insured
against loss by fire and
other hazards as required by the Program Guide, including flood
insurance if
required under the National Flood Insurance Act of 1968, as
amended. The
Mortgage requires the Mortgagor to maintain such casualty
insurance at the
Mortgagor's expense, and on the Mortgagor's failure to do so,
authorizes the
holder of the Mortgage to obtain and maintain such insurance at
the
Mortgagor's expense and to seek reimbursement therefor from the
Mortgagor;
(VIII) Immediately prior to the assignment of the Mortgage Loans
to the Trustee, the Company
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 assignment
validly transfers
ownership of the Mortgage Loans to the Trustee free and clear of
any pledge,
lien, encumbrance or security interest;
(IX) No more than 88.48% of the Mortgage Loans by aggregate
Stated Principal Balance as of
the Cut-off Date were underwritten under a reduced loan
documentation program,
none of the Mortgage Loans as of the Cut-off Date were
underwritten under a
no-stated income program, and none of the Mortgage Loans as of
the Cut-off
Date were underwritten under a no income/no asset program;
(X) Except with respect to no more than 5.8% of the Mortgage
Loans by aggregate Stated
Principal Balance as of the Cut-off Date, the Mortgagor
represented in its
loan application with respect to the related Mortgage Loan that
the Mortgaged
Property would be owner-occupied;
(XI) None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(XII) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of
the Code and Treasury Regulation Section 1.860G-2(a)(1), (2),
(4), (5), (6),
(7) and (9) without reliance on the provisions of Treasury
Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G-2(f)(2) or
any other
provision that would allow a Mortgage Loan to be treated as a
"qualified
mortgage" notwithstanding its failure to meet the requirements
of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9);
(XIII) A policy of title insurance was effective as of the
closing of each Mortgage Loan and
is valid and binding and remains in full force and effect,
unless the
Mortgaged Properties are located in the State of Iowa and an
attorney's
certificate has been provided as described in the Program
Guide;
(XIV) No Mortgage Loan is a Cooperative Loan;
(XV) With respect to each Mortgage Loan originated under a
"streamlined" Mortgage Loan
program (through which no new or updated appraisals of Mortgaged
Properties
are obtained in connection with the refinancing thereof), the
related Seller
has represented that either (a) the value of the related
Mortgaged Property as
of the date the Mortgage Loan was originated was not less than
the appraised
value of such property at the time of origination of the
refinanced Mortgage
Loan or (b) the Loan-to-Value Ratio of the Mortgage Loan as of
the date of
origination of the Mortgage Loan generally meets the Company's
underwriting
guidelines;
(XVI) Interest on each Mortgage Loan is calculated on the basis
of a 360-day year
consisting of twelve 30-day months;
(XVII) None of the Mortgage Loans contain in the related
Mortgage File a Destroyed Mortgage
Note;
(XVIII) Five of the Mortgage Loans, representing no more than
0.1% of the Mortgage Loans by
aggregate Stated Principal Balance, have been made to
International Borrowers;
(XIX) No Mortgage Loan provides for payments that are subject to
reduction by withholding
taxes levied by any foreign (non-United States) sovereign
government; and
(XX) None of the Mortgage Loans are Additional Collateral Loans
and none of the Mortgage
Loans are Pledged Asset Loans.
It is understood and agreed that the representations and
warranties set forth in this
Section 2.03(b) shall survive delivery of the respective
Mortgage Files to the Trustee or
any Custodian.
Upon discovery by any of the Company, the Master Servicer, the
Trustee or any
Custodian of a breach of any of the representations and
warranties set forth in this Section
2.03(b) that materially and adversely affects the interests of
the Certificateholders or the
Certificate Insurer in any Mortgage Loan, the party discovering
such breach shall give
prompt written notice to the other parties (any 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)(xii), 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 Company 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 Company
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 or
repurchase must occur within 90
days from the date such breach was discovered. Any such
substitution shall be effected by
the Company 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 Company 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 or the Certificate Insurer.
SECTION 2.04.
REPRESENTATIONS AND WARRANTIES OF SELLERS.
The Company, as assignee of Residential Funding under the
Assignment Agreement,
hereby assigns to the Trustee for the benefit of
Certificateholders and the Certificate
Insurer all of its right, title and interest in respect of the
Assignment Agreement
applicable to a Mortgage Loan. 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 and the Certificate Insurer.
Upon the discovery by the
Company, the Master Servicer, the Trustee or the Custodian of a
breach of any of the
representations and warranties made in the Assignment Agreement
(which, for purposes hereof,
will be deemed to include any other cause giving rise to a
repurchase obligation under the
Assignment Agreement) in respect of any Mortgage Loan which
materially and adversely affects
the interests of the Certificateholders or the Certificate
Insurer 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 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
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, repurchase
or substitution must occur within 90 days from the date the
breach was discovered. If a
breach of the Compliance With Laws Representation has given rise
to the obligation to
repurchase or substitute a Mortgage Loan pursuant to Section 4
of the Assignment Agreement,
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 or the Custodian for the benefit of the
Certificateholders and the Certificate
Insurer with respect to such Qualified Substitute Mortgage Loan
or Loans, the original
Mortgage Note, the Mortgage, an Assignment of the Mortgage in
recordable form, if required
pursuant to Section 2.01, 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, and, if
the Deleted Mortgage Loan was a Discount Mortgage Loan, the
Schedule of Discount Fractions,
for the benefit of the Certificateholders and the Certificate
Insurer 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, and, if
the Deleted Mortgage Loan was a Discount Mortgage Loan, the
amended Schedule of Discount
Fractions, 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
contained in the related Assignment Agreement, and the Company
and the Master Servicer shall
be deemed to have made with respect to any Qualified Substitute
Mortgage Loan or Loans, as
of the date of substitution, the covenants, representations and
warranties set forth in this
Section 2.04, in Section 2.03 hereof and in Section 4 of the
Assignment Agreement, and the
Master Servicer shall be obligated to repurchase or substitute
for any Qualified Substitute
Mortgage Loan as to which a Repurchase Event (as defined in the
Assignment Agreement) has
occurred pursuant to Section 4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified
Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Master
Servicer will 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 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 to fail to qualify
as such at any time that any Certificate is outstanding.
It is understood and agreed that the obligation of Residential
Funding to cure such
breach or purchase, or to substitute for, a 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 Compliance With
Laws Representation shall
constitute the sole remedy respecting such breach available to
the Certificateholders or the
Trustee on behalf of 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/ISSUANCE OF CERTIFICATES
EVIDENCING INTERESTS IN REMICS.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery
of the Mortgage Files to it, or any Custodian on its behalf,
subject to any exceptions
noted, together with the assignment to it of all other assets
included in the Trust Fund
and/or the applicable REMIC, receipt of which is hereby
acknowledged. Concurrently with
such delivery and in exchange therefor, the Trustee, pursuant to
the written request of the
Company executed by an officer of the Company, has executed and
caused to be authenticated
and delivered to or upon the order of the Company the Class R-I
Certificates in authorized
denominations which, together with the REMIC I Regular
Interests, evidence the beneficial
interest in REMIC I, and the Class R-II Certificates in
authorized denominations which,
together with the REMIC II Regular Interests, evidence the
beneficial interest in REMIC II.
SECTION 2.06. CONVEYANCE OF REMIC I REGULAR INTERESTS AND REMIC
II REGULAR INTERESTS SB-IO
AND SB-PO; ACCEPTANCE BY THE TRUSTEE.
The Company, as of the Closing Date, and concurrently with the
execution and delivery
hereof, does hereby assign without recourse all the right, title
and interest of the Company
in and to the REMIC I Regular Interests to the Trustee for the
benefit of the Holders of
each Class of Certificates (other than the Class R-I
Certificates) and the REMIC II Regular
Interests SB-IO and SB-PO to the Trustee for the benefit of the
Holders of the Class SB
Certificates and the Class R-X Certificates. The Trustee
acknowledges receipt of the REMIC
I Regular Interests and declares that it holds and will hold the
same in trust for the
exclusive use and benefit of all present and future Holders of
each Class of Certificates
(other than the Class R-I Certificates). The rights of the
Holders of each Class of
Certificates (other than the Class R-I Certificates) to receive
distributions from the
proceeds of REMIC II and the Holders of the Class SB
Certificates and Class R-X Certificates
to receive distributions from the proceeds of REMIC III in
respect of such Classes, and all
ownership interests of the Holders of such Classes in such
distributions, shall be as set
forth in this Agreement.
SECTION 2.07. ISSUANCE OF CERTIFICATES EVIDENCING INTEREST IN
REMIC II AND REMIC III.
The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and
the REMIC II Regular Interests SB-IO and SB-PO, and,
concurrently therewith and in exchange
therefor, pursuant to the written request of the Company
executed by an officer of the
Company, the Trustee has executed and caused to be authenticated
and delivered to or upon
the order of the Company, all Classes of Certificates (other
than the Class R-I
Certificates, the Class R-X Certificates and Class SB
Certificates) in authorized
denominations, which, together with the REMIC II Regular
Interests SB-IO and SB-PO, evidence
the beneficial interest in the entire REMIC II, and the Class SB
Certificates and Class R-X
Certificates which evidence the beneficial interests in the
entire REMIC III.
SECTION 2.08. PURPOSES AND POWERS OF THE TRUST. (See Section
2.08 of the Standard Terms.)
SECTION 2.09. AGREEMENT REGARDING ABILITY TO DISCLOSE.
The Company, the Master Servicer and the Trustee hereby agree,
notwithstanding any
other express or implied agreement to the contrary, that 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 treatment" and
"tax structure" 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. (See Section
3.01 of the Standard
Terms)
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers;
Enforcement of Subservicers' and Sellers' Obligations. (See
Section
3.02 of the Standard Terms)
Section 3.03 Successor Subservicers. (See Section 3.03 of the
Standard Terms)
Section 3.04 Liability of the Master Servicer. (See Section 3.04
of the Standard
Terms)
Section 3.05 No Contractual Relationship Between Subservicer and
Trustee or
Certificateholders. (See Section 3.05 of the Standard Terms)
Section 3.06 Assumption or Termination of Subservicing
Agreements by Trustee. (See
Section 3.06 of the Standard Terms)
Section 3.07 Collection of Certain Mortgage Loan Payments;
Deposit to Custodial
Account.
(a) (See Section 3.07(a) of the Standard Terms)
(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 principal and interest on the
Mortgage Loans due on or before
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 Buydown Funds, if any, and 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
Compliance With Laws
Representation 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;
(v) Any amounts required to be deposited pursuant to Section
3.07(c) or
3.21;
(vi) All amounts transferred from the Certificate Account to the
Custodial
Account in accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by
the Master
Servicer in respect of any Additional Collateral;
(viii) Any amounts received by the Master Servicer in respect of
Pledged
Assets; and
(ix) Any amounts received by the Master Servicer in connection
with any
Prepayment Charges on the Prepayment Charge Loans.
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 payments
in respect of principal and interest on the Mortgage Loans due
on or before the Cut-off
Date) and payments or collections in the nature 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 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) (See Section 3.07(c) of the Standard Terms)
(d) (See Section 3.07(d) of the Standard Terms)
(e) Notwithstanding Section 3.07(a), The Master Servicer shall
not waive (or
permit a Subservicer to waive) any Prepayment Charge unless: (i)
the enforceability thereof
shall have been limited by bankruptcy, insolvency, moratorium,
receivership and other
similar laws relating to creditors' rights generally, (ii) the
enforcement thereof is
illegal, or any local, state or federal agency has threatened
legal action if the prepayment
penalty is enforced, (iii) the collectability thereof shall have
been limited due to
acceleration in connection with a foreclosure or other
involuntary payment or (iv) such
waiver is standard and customary in servicing similar Mortgage
Loans and relates to a
default or a reasonably foreseeable default and would, in the
reasonable judgment of the
Master Servicer, maximize recovery of total proceeds taking into
account the value of such
Prepayment Charge and the related Mortgage Loan. In no event
will the Master Servicer waive
a Prepayment Charge in connection with a refinancing of a
Mortgage Loan that is not related
to a default or a reasonably foreseeable default. If a
Prepayment Charge is waived, but
does not meet the standards described above, then the Master
Servicer is required to deposit
into the Custodial Account the amount of such waived Prepayment
Charge at the time that the
amount prepaid on the related Mortgage Loan is required to be
deposited into the Custodial
Account. Notwithstanding any other provisions of this Agreement,
any payments made by the
Master Servicer in respect of any waived Prepayment Charges
pursuant to this Section shall
be deemed to be paid outside of the Trust Fund and not part of
any REMIC.
Section 3.08. Subservicing Accounts; Servicing Accounts (See
Section 3.08 of the
Standard Terms)
Section 3.09. Access to Certain Documentation and Information
Regarding the Mortgage
Loans (See Section 3.09 of the Standard Terms)
Section 3.10. Permitted Withdrawals from the Custodial Account
(See Section 3.10 of
the Standard Terms)
Section 3.11. Maintenance of the Primary Insurance Policies;
Collections Thereunder
(See Section 3.11 of the Standard Terms)
Section 3.12. Maintenance of Fire Insurance and Omissions and
Fidelity Coverage (See
Section 3.12 of the Standard Terms)
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification
Agreements; Certain Assignments (See Section 3.13 of the
Standard
Terms)
Section 3.14. Realization Upon Defaulted Mortgage Loans (See
Section 3.14 of the
Standard Terms)
Section 3.15. Trustee to Cooperate; Release of Mortgage Files
(See Section 3.15 of
the Standard Terms)
Section 3.16. Servicing and Other Compensation; Compensating
Interest
(a) (See Section 3.16(a) of the Standard Terms)
(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 (but not including Prepayment
Charges) 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) (See Section 3.16(c) of the Standard Terms)
(d) (See Section 3.16(d) of the Standard Terms)
(e) (See Section 3.16(e) of the Standard Terms)
Section 3.17. Reports to the Trustee and the Company (See
Section 3.17 of the
Standard Terms)
Section 3.18. Annual Statement as to Compliance
The Master Servicer will deliver to the Company, the Certificate
Insurer, if any, 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 Company'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 1122 and 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 Company'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,
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 Company, the
Certificate Insurer, if any, 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. Rights of the Company in Respect of the Master
Servicer (See Section
3.20 of the Standard Terms)
Section 3.21. Administration of Buydown Funds (See Section 3.21
of the Standard
Terms)
Section 3.22 Advance Facility (See Section 3.22 of the Standard
Terms)
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. CERTIFICATE ACCOUNT. (See Section 4.01 of the
Standard Terms.)
SECTION 4.02. DISTRIBUTIONS.
(A) On each Distribution Date, the Trustee (or the Paying Agent
on behalf of the Trustee)
shall allocate and distribute the Available Distribution Amount
to the extent on deposit in
the Certificate Account for such date to the interests issued in
respect of REMIC I, REMIC
II and REMIC III as specified in this Section; provided,
however, that on each Distribution
Date, prior to making any other distributions referred to in
this Section 4.02, the Trustee
shall withdraw from the Certificate Account and pay to the
Certificate Insurer, by wire
transfer of immediately available funds to the Certificate
Insurer Account, the Certificate
Insurer Premium for such Distribution Date.
(B) (1) On each Distribution Date, the REMIC I Distribution
Amount shall be
distributed by REMIC I to REMIC II on account of the REMIC I
Regular Interests in the
amounts and with the priorities set forth in the definition
thereof.
(2) Notwithstanding the distributions on the REMIC I Regular
Interests described in this Section 4.02(b), distribution of
funds from the Certificate
Account shall be made only in accordance with Section
4.02(c).
(C) On each Distribution Date (x) the Master Servicer on behalf
of the Trustee or (y) the
Paying Agent appointed by the Trustee, shall distribute to each
Certificateholder of record
on the next preceding Record Date (other than as provided in
Section 9.01 of the Standard
Terms respecting the final distribution) either in immediately
available funds (by wire
transfer or otherwise) to the account of such Certificateholder
at a bank or other entity
having appropriate facilities therefor, if such
Certificateholder has so notified the Master
Servicer or the Paying Agent, as the case may be, or, if such
Certificateholder has not so
notified the Master Servicer or the Paying Agent by the Record
Date, by check mailed to such
Certificateholder at the address of such Holder appearing in the
Certificate Register such
Certificateholder's share (which share with respect to each
Class of Certificates, shall be
based on the aggregate of the Percentage Interests represented
by Certificates of the
applicable Class held by such Holder of the following amounts),
in the order of priority set
forth below, in each case to the extent of the Available
Distribution Amount on deposit in
the Certificate Account (except, with respect to clause
(viii)(B) below, to the extent of
Prepayment Charges on deposit in the Certificate Account).
Distributions of amounts
received under the Yield Maintenance Agreements will be made in
accordance with Section
4.09, and distributions of amounts received under the
Certificate Policy will be made in
accordance with Section 4.10.
(I) The Interest Distribution Amount, sequentially:
(A) first, to the Class A-1, Class A-2 and Class A-3
Certificates, Accrued Certificate Interest due thereon for such
Distribution
Date plus any Accrued Certificate Interest due thereon remaining
unpaid from
any prior Distribution Date, together with interest thereon at
the related
Pass-Through Rate in effect for such Distribution Date, on a pro
rata basis in
accordance with the Accrued Certificate Interest and any
interest thereon due
to each such class;
(B) second, to the Certificate Insurer, reimbursement for
any Insured Payments made with respect to interest;
(C) third, to the Class M-1 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued
Certificate Interest due thereon remaining unpaid from any prior
Distribution
Date, together with interest thereon at the related Pass-Through
Rate in
effect for such Distribution Date;
(D) fourth, to the Class M-2 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued
Certificate Interest due thereon remaining unpaid from any prior
Distribution
Date, together with interest thereon at the related Pass-Through
Rate in
effect for such Distribution Date;
(E) fifth, to the Class M-3 Certificates Accrued Certificate
Interest due thereon for such Distribution Date plus any related
Accrued
Certificate Interest due thereon remaining unpaid from any prior
Distribution
Date, together with interest thereon at the related Pass-Through
Rate in
effect for such Distribution Date;
(F) sixth, to the Class M-4 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued
Certificate Interest due thereon remaining unpaid from any prior
Distribution
Date, together with interest thereon at the related Pass-Through
Rate in
effect for such Distribution Date;
(G) seventh, to the Class M-5 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued
Certificate Interest due thereon remaining unpaid from any prior
Distribution
Date, together with interest thereon at the related Pass-Through
Rate in
effect for such Distribution Date;
(II) to the Class A Certificateholders, the Class M
Certificateholders from the amount, if
any, of Available Distribution Amount remaining after the
foregoing
distributions, the Principal Distribution Amount, which amount
shall be
allocated in the manner and priority set forth in Section
4.02(d), until the
aggregate Certificate Principal Balance of each Class of Class A
Certificates,
Class M Certificates and the applicable amounts payable to the
Certificate
Insurer has been reduced to zero;
(III) to the Certificate Insurer from the amount, if any, of
Excess Cash Flow after the
foregoing distributions, the amount of any unpaid Certificate
Insurer Premiums;
(IV) to the Class A Certificateholders, Class M
Certificateholders from the amount, if
any, of Excess Cash Flow remaining after the foregoing
distributions, the
amount of any related Prepayment Interest Shortfalls with
respect to the
Mortgage Loans for that Distribution Date, to the extent not
covered by
Compensating Interest on such Distribution Date, which amount
shall be
allocated to the Class A Certificateholders and Class M
Certificateholders on
a pro rata basis, based on the amount of Prepayment Interest
Shortfalls
allocated thereto for such Distribution Date;
(V) to the Class A Certificateholders and Class M
Certificateholders from the amount, if
any, of Excess Cash Flow remaining after the foregoing
distributions, the
amount of any Prepayment Interest Shortfalls allocated thereto
remaining
unpaid from prior Distribution Dates together with interest
thereon at the
related Pass-Through Rate in effect for such Distribution Date,
which amount
shall be allocated to the Class A Certificateholders and Class
M
Certificateholders on a pro rata basis, based on the amount of
Prepayment
Interest Shortfalls remaining unpaid;
(VI) to the Holders of the Class A Certificates, pro rata, and
then sequentially to the
Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificateholders,
in that order, any Interest Carryforward Amounts allocated
thereto that remain
unreimbursed;
(VII) to the Class A Certificates and Class M Certificates from
the amount, if any, of
Excess Cash Flow remaining after the foregoing distributions the
amount of any
Basis Risk Shortfall on such Certificates, which amount shall be
allocated
first, to the Class A Certificates on a pro rata basis, based on
their
respective Basis Risk Shortfall for such Distribution Date, and
then,
sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4
and Class M-5
Certificateholders, in that order;
(VIII) to pay the Holders of the Class A and Class M
Certificates, on a pro rata basis,
based on Relief Act Shortfalls allocated thereto for such
Distribution Date,
the amount of any Relief Act Shortfalls allocated thereto with
respect to the
Mortgage Loans for such Distribution Date,
(IX) to the Class M Certificateholders, the principal portion of
any Realized Losses
previously allocated to those Certificates and remaining
unreimbursed, which
amount shall be allocated sequentially, to the Class M-1, Class
M-2, Class
M-3, Class M-4 and Class M-5 Certificateholders, in that
order;
(X) to the Class SB Certificates, (A) from the amount, if any,
of the 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 A Certificate and Class M Certificate 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.
(XI) to the Class R Certificateholders, the balance, if any, of
the Available Distribution
Amount.
All payments of amounts in respect of Basis Risk Shortfalls made
pursuant to Section
4.02(c)(vii) shall, for federal income tax purposes, be deemed
to have been distributed from
REMIC II to REMIC III as Holder of the REMIC II Regular
Interests SB-IO and SB-PO, and from
REMIC III to the Holder of the Class SB Certificates and then
paid outside of any REMIC to
the recipients thereof pursuant to an interest rate cap
contract. By accepting their
Certificates the Holders of the Certificates agree to treat such
payments in the manner
described in the preceding sentence for purposes of filing their
income tax returns.
(D) The Principal Distribution Amount payable to the Class A
Certificateholders and the
Class M Certificateholders shall be distributed as follows:
(I) first, the Class A Principal Distribution Amount shall be
distributed concurrently,
on a pro rata basis in accordance with their respective
Certificate Principal
Balances, to the Class A-1, Class A-2 and Class A-3
Certificates, until the
Certificate Principal Balances thereof have been reduced to
zero;
(II) second, to the Certificate Insurer, reimbursement for any
Insured Payments made with
respect to principal;
(III) third, the Class M-1 Principal Distribution Amount shall
be distributed to the Class
M-1 Certificates until the Certificate Principal Balance thereof
has been
reduced to zero;
(IV) fourth, the Class M-2 Principal Distribution Amount shall
be distributed to the Class
M-2 Certificates until the Certificate Principal Balance thereof
has been
reduced to zero;
(V) fifth, the Class M-3 Principal Distribution Amount shall be
distributed to the Class
M-3 Certificates until the Certificate Principal Balance thereof
has been
reduced to zero; and
(VI) sixth, the Class M-4 Principal Distribution Amount shall be
distributed to the Class
M-4 Certificates until the Certificate Principal Balance thereof
has been
reduced to zero.
(E) Notwithstanding the foregoing clauses (c) and (d), upon the
reduction of the
Certificate Principal Balance of a Class of Class A Certificates
or Class M Certificates to
zero, such Class of Certificates will not be entitled to further
distributions pursuant to
Section 4.02, including, without limitation, the payment of
current and unreimbursed
Prepayment Interest Shortfalls pursuant to clauses (c)(iii) and
(iv) and Basis Risk
Shortfall pursuant to clause (c)(vi).
(F) Each distribution with respect to a Book-Entry Certificate
shall be paid to the
Depository, as Holder thereof, and the Depository shall be
solely responsible for crediting
the amount of such distribution to the accounts of its
Depository Participants in accordance
with its normal procedures. Each Depository Participant shall be
responsible for disbursing
such distribution to the Certificate Owners that it represents
and to each indirect
participating brokerage firm (a "brokerage firm") for which it
acts as agent. Each
brokerage firm shall be responsible for disbursing funds to the
Certificate Owners that it
represents. None of the Trustee, the Certificate Registrar, the
Company or the Master
Servicer shall have any responsibility therefor.
(G) Except as otherwise provided in Section 9.01 of the Standard
Terms, if the Master
Servicer anticipates that a final distribution with respect to
any Class of Certificates
will be made on a future Distribution Date, the Master Servicer
shall, no later than 40 days
prior to such final Distribution Date, notify the Trustee and
the Trustee shall, not earlier
than the 15th day and not later than the 25th day of the month
next preceding the month of
such final distribution, distribute, or cause to be distributed,
to each Holder of such
Class of Certificates a notice to the effect that: (i) the
Trustee anticipates that the
final distribution with respect to such Class of Certificates
will be made on such
Distribution Date but only upon presentation and surrender of
such Certificates at the
office of the Trustee or as otherwise specified therein, and
(ii) no interest shall accrue
on such Certificates from and after the end of the related
Interest Accrual Period. In the
event that Certificateholders required to surrender their
Certificates pursuant to Section
9.01(c) of the Standard Terms do not surrender their
Certificates for final cancellation,
the Trustee shall cause funds distributable with respect to such
Certificates to be
withdrawn from the Certificate Account and credited to a
separate escrow account for the
benefit of such Certificateholders as provided in Section
9.01(d) of the Standard Terms.
(H) On the initial Distribution Date, Basis Risk Shortfall
amounts with respect to the
initial Distribution Date, if any, will be paid to the Holders
of the Class A Certificates
and Class M Certificates, pro rata, based on the amount of Basis
Risk Shortfalls for such
Classes.
SECTION 4.03. STATEMENTS TO CERTIFICATEHOLDERS; STATEMENTS TO
THE RATING AGENCIES; EXCHANGE
ACT REPORTING.
(A) Concurrently with each distribution charged to the
Certificate Account and with
respect to each Distribution Date the Master Servicer shall
forward to the Trustee and the
Trustee shall either forward by mail or make available to each
Holder, the Certificate
Insurer, if any, and the Company, via the Trustee's internet
website, a statement (and at
its option, any additional files containing the same information
in an alternative format)
setting forth information as to each Class of Certificates, the
Mortgage Pool and, if the
Mortgage Pool is comprised of two or more Loan Groups, each Loan
Group, to the extent
applicable. This statement will include the information set
forth in Exhibit 2 of this
Agreement. The Trustee shall mail to each Holder that requests a
paper copy by telephone a
paper copy via first class mail. The Trustee may modify the
distribution procedures set
forth in this Section provided that such procedures are no less
convenient for the
Certificateholders. The Trustee shall provide prior notification
to the Company, the Master
Servicer and the Certificateholders regarding any such
modification. In addition, the
Master Servicer shall provide to any manager of a trust fund
consisting of some or all of
the Certificates, upon reasonable request, such additional
information as is reasonably
obtainable by the Master Servicer at no additional expense to
the Master Servicer. Also, at
the request of a Rating Agency, the Master Servicer shall
provide the information relating
to the Reportable Modified Mortgage Loans substantially in the
form attached hereto as
Exhibit Q to such Rating Agency within a reasonable period of
time; provided, however, that
the Master Servicer shall not be required to provide such
information more than four times
in a calendar year to any Rating Agency.
(B) (See Section 4.03(b) of the Standard Terms.)
(C) (See Section 4.03(c) of the Standard Terms.)
(D) (See Section 4.03(d) of the Standard Terms.)
(E) (See Section 4.03(e) of the Standard Terms.)
(F) (See Section 4.03(f) of the Standard Terms.)
(G) (See Section 4.03(g) of the Standard Terms.)
(H) (See Section 4.03(h) of the Standard Terms.)
(I) (See Section 4.03(i) of the Standard Terms.)
SECTION 4.04. DISTRIBUTION OF REPORTS TO THE TRUSTEE AND THE
COMPANY; ADVANCES BY THE
MASTER SERVICER.
(A) Prior to the close of business on the Determination Date,
the Master Servicer shall
furnish a written statement to the Trustee, any Paying Agent and
the Company (the
information in such statement to be made available to the
Certificate Insurer and
Certificateholders by the Master Servicer on request) setting
forth (i) the Available
Distribution Amount, (ii) the amounts required to be withdrawn
from the Custodial Account
and deposited into the Certificate Account on the immediately
succeeding Certificate Account
Deposit Date pursuant to clause (iii) of Section 4.01(a), (iii)
the Certificate Insurer
Premium, if any, (iv) if the Master Servicer determines that the
Deficiency Amount for such
Distribution Date is greater than zero, the amount necessary to
complete the notice in the
form of Exhibit A to the Policy (the "Notice"); and (v)
Cumulative Insurance Payments. The
determination by the Master Servicer of such amounts shall, in
the absence of obvious error,
be presumptively deemed to be correct for all purposes hereunder
and the Trustee shall be
protected in relying upon the same without any independent check
or verification.
(B) On or before 2:00 P.M. New York time on each Certificate
Account Deposit Date, the
Master Servicer shall either (i) deposit in the Certificate
Account from its own funds, or
funds received therefor from the Subservicers, an amount equal
to the Advances to be made by
the Master Servicer in respect of the related Distribution Date,
which shall be in an
aggregate amount equal to the aggregate amount of Monthly
Payments (with each interest
portion thereof adjusted to the Net Mortgage Rate), less the
amount of any related Servicing
Modifications, Debt Service Reductions or reductions in the
amount of interest collectable
from the Mortgagor pursuant to the Servicemembers Civil Relief
Act, as amended, or similar
legislation or regulations then in effect, on the Outstanding
Mortgage Loans as of the
related Due Date, which Monthly Payments were not received as of
the close of business as of
the related Determination Date; provided that no Advance shall
be made if it would be a
Nonrecoverable Advance; and provided, further, that the Monthly
Payment for purposes of this
Section 4.04 shall mean the minimum monthly payment due under
the Mortgage Note, net of the
Servicing Fee and Subservicing Fee, (ii) withdraw from amounts
on deposit in the Custodial
Account and deposit in the Certificate Account all or a portion
of the Amount Held for
Future Distribution in discharge of any such Advance, or (iii)
make advances in the form of
any combination of (i) and (ii) aggregating the amount of such
Advance. Any portion of the
Amount Held for Future Distribution so used shall be replaced by
the Master Servicer by
deposit in the Certificate Account on or before 11:00 A.M. New
York time on any future
Certificate Account Deposit Date to the extent that funds
attributable to the Mortgage Loans
that are available in the Custodial Account for deposit in the
Certificate Account on such
Certificate Account Deposit Date shall be less than payments to
Certificateholders required
to be made on the following Distribution Date. The Master
Servicer shall be entitled to use
any Advance made by a Subservicer as described in Section
3.07(b) that has been deposited in
the Custodial Account on or before such Distribution Date as
part of the Advance made by the
Master Servicer pursuant to this Section 4.04. The amount of any
reimbursement pursuant to
Section 4.02(a) in respect of outstanding Advances on any
Distribution Date shall be
allocated to specific Monthly Payments due but delinquent for
previous Due Periods, which
allocation shall be made, to the extent practicable, to Monthly
Payments which have been
delinquent for the longest period of time. Such allocations
shall be conclusive for
purposes of reimbursement to the Master Servicer from recoveries
on related Mortgage Loans
pursuant to Section 3.10.
The determination by the Master Servicer that it has made a
Nonrecoverable Advance or
that any proposed Advance, if made, would constitute a
Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate of the Master Servicer
delivered to the Company and
the Trustee.
If the Master Servicer determines as of the Business Day
preceding any Certificate
Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount
equal to the Advance required to be made for the immediately
succeeding Distribution Date,
it shall give notice to the Trustee of its inability to advance
(such notice may be given by
telecopy), not later than 3:00 P.M., New York time, on such
Business Day, specifying the
portion of such amount that it will be unable to deposit. Not
later than 3:00 P.M., New
York time, on the Certificate Account Deposit Date the Trustee
shall, unless by 12:00 Noon,
New York time, on such day the Trustee shall have been notified
in writing (by telecopy)
that the Master Servicer shall have directly or indirectly
deposited in the Certificate
Account such portion of the amount of the Advance as to which
the Master Servicer shall have
given notice pursuant to the preceding sentence, pursuant to
Section 7.01, (a) terminate all
of the rights and obligations of the Master Servicer under this
Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the
Master Servicer hereunder,
including the obligation to deposit in the Certificate Account
an amount equal to the
Advance for the immediately succeeding Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this
Section 4.04 into
the Certificate Account.
SECTION 4.05. ALLOCATION OF REALIZED LOSSES.
(A) Prior to each Distribution Date, the Master Servicer shall
determine the total amount
of Realized Losses, if any, that resulted from any Cash
Liquidation, Servicing
Modifications, Debt Service Reduction, Deficient Valuation or
REO Disposition that occurred
during the related Prepayment Period or, in the case of a
Servicing Modification that
constitutes a reduction of the interest rate on a Mortgage Loan,
the amount of the reduction
in the interest portion of the Monthly Payment due in the month
in which such Distribution
Date occurs. The amount of each Realized Loss shall be evidenced
by an Officers'
Certificate. All Realized Losses on the Mortgage Loans shall be
allocated as follows:
first, to the Excess Cash Flow as part of the Principal
Distribution Amount as
provided in Section 4.02(c), to the extent of the Excess Cash
Flow for such Distribution
Date,
second, in reduction of the Overcollateralization Amount, until
such amount has been
reduced to zero;
third, to the Class M-5 Certificates, first, in reduction of the
related Interest
Carryforward Amount (without taking into account interest
payable thereon), if any,
outstanding with respect to the Class M-5 Certificates, and
second, to the Certificate
Principal Balance of the Class M-5 Certificates, until the
Certificate Principal Balance
thereof has been reduced to zero;
fourth, to the Class M-4 Certificates, first, in reduction of
the related Interest
Carryforward Amount (without taking into account interest
payable thereon), if any,
outstanding with respect to the Class M-4 Certificates, and
second, to the Certificate
Principal Balance of the Class M-4 Certificates, until the
Certificate Principal Balance
thereof has been reduced to zero;
fifth, to the Class M-3 Certificates, first, in reduction of the
related Interest
Carryforward Amount (without taking into account interest
payable thereon), if any,
outstanding with respect to the Class M-3 Certificates, and
second, to the Certificate
Principal Balance of the Class M-3 Certificates, until the
Certificate Principal Balance
thereof has been reduced to zero;
sixth, to the Class M-2 Certificates, first, in reduction of the
related Interest
Carryforward Amount (without taking into account interest
payable thereon), if any,
outstanding with respect to Class M-2 Certificates, and second,
to the Certificate Principal
Balance of Class M-2 Certificates, until the Certificate
Principal Balance thereof has been
reduced to zero;
seventh, to the Class M-1 Certificates, first, in reduction of
the related Interest
Carryforward Amount (without taking into account interest
payable thereon), if any,
outstanding with respect to Class M-1 Certificates, and second,
to the Certificate Principal
Balance of Class M-1 Certificates, until the Certificate
Principal Balance thereof has been
reduced to zero;
eight, to the Class A-3 Certificates, first, in reduction of the
related Interest
Carryforward Amount (without taking into account interest
payable thereon), if any,
outstanding with respect to Class A-3 Certificates, and second,
to the Certificate Principal
Balance of Class A-3 Certificates, until the Certificate
Principal Balance thereof has been
reduced to zero; and
ninth, to the Class A-2 Certificates, first, in reduction of the
related Interest
Carryforward Amount (without taking into account interest
payable thereon), if any,
outstanding with respect to Class A-2 Certificates, and second,
to the Certificate Principal
Balance of Class A-2 Certificates, until the Certificate
Principal Balance thereof has been
reduced to zero.
(B) Any allocation of the principal portion of Realized Losses
(other than Debt Service
Reductions) to the Class M Certificates on any Distribution Date
shall be made first, in
reduction of the related Interest Carryforward Amount (without
taking into account interest
payable thereon), if any, that is outstanding with respect to
such Class of Certificates,
and second, by reducing the Certificate Principal Balance
thereof by the amount so
allocated, which allocation shall be deemed to have occurred on
such Distribution Date,
until the Certificate Principal Balance thereof has been reduced
to zero; provided, that no
such reduction shall reduce the aggregate Certificate Principal
Balance of the Certificates
below the aggregate Stated Principal Balance of the Mortgage
Loans. Allocations of the
interest portions of Realized Losses (other than any interest
rate reduction resulting from
a Servicing Modification) to any Class of Class M Certificates
on any Distribution Date
shall be made by operation of the definition of "Accrued
Certificate Interest" for each
Class for such Distribution Date. Allocations of the interest
portion of a Realized Loss
resulting from an interest rate reduction in connection with a
Servicing Modification shall
be made by operation of the priority of payment provisions of
Section 4.02(c). All Realized
Losses and all other losses allocated to a Class of Certificates
hereunder will be allocated
among the Certificates of such Class in proportion to the
Percentage Interests evidenced
thereby.
(C) Realized Losses shall be allocated among the REMIC I Regular
Interests pursuant to
the definition of REMIC I Realized Losses.
(D) Realized Losses allocated to the Excess Cash Flow or the
Overcollateralization Amount
pursuant to paragraphs (a), (b) or (c) of this Section, the
definition of Accrued
Certificate Interest and the operation of Section 4.02(c) shall
be deemed allocated to the
Class SB Certificates. Realized Losses allocated to the Class SB
Certificates shall, to the
extent such Realized Losses represent Realized Losses on an
interest portion, be allocated
to REMIC II Regular Interest SB-IO. Realized Losses allocated to
the Excess Cash Flow
pursuant to paragraph (b) of this Section shall be deemed to
reduce Accrued Certificate
Interest on REMIC II Regular Interest SB-IO. Realized Losses
allocated to the
Overcollateralization Amount pursuant to paragraph (b) of this
Section shall be deemed first
to reduce the principal balance of REMIC II Regular Interest
SB-PO until such principal
balance shall have been reduced to zero and thereafter to reduce
accrued and unpaid interest
on REMIC II Regular Interest SB-IO.
SECTION 4.06. REPORTS OF FORECLOSURES AND ABANDONMENT OF
MORTGAGED PROPERTY. (See Section
4.06 of the Standard Terms.)
SECTION 4.07. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
(See Section 4.07 of the
Standard Terms.)
SECTION 4.08. SURETY BOND. (See Section 4.08 of the Standard
Terms.)
SECTION 4.09. YIELD MAINTENANCE AGREEMENTS.
(A) On the Closing Date, Trustee shall, for the benefit of the
RALI Series 2006-QH1
Trust, enter in the Class A/Class M Yield Maintenance Agreement
with the Yield Maintenance
Agreements Provider. On the Business Day prior to each
Distribution Date from and including
the Distribution Date in January 2007 to and including the
Distribution Date in October
2011, the Trustee shall deposit any amounts received under the
Class A/Class M Yield
Maintenance Agreements into the Certificate Account. On each
Distribution Date from and
including the Distribution Date in January 2007 to and including
the Distribution Date in
October 2011, the Trustee shall withdraw from the Certificate
Account any amounts received
under the Class A/Class M Yield Maintenance Agreement and
distribute such amounts as
follows: (i) first, to the Holders of the Offered Certificates
in the order of priority set
forth in Section 4.02(c)(i), to cover Accrued Certificate
Interest (after taking into
account the distributions made pursuant to Section 4.02(c)(i) on
that Distribution Date);
(ii) second, to the Holders of the Offered Certificates in the
order of priority set forth
in Section 4.02(d), to cover Realized Losses to extent necessary
to maintain the Required
Overcollateralization Amount; (iii) third, to the Holders of the
Offered Certificates in the
order of priority set forth in Sections 4.02(c)(vi) and (vii),
to cover Interest
Carryforward Amounts and Basis Risk Shortfalls (after taking
into account the distributions
made pursuant to Sections 4.02(c)(vi) and (vii) on that
Distribution Date); and (iv) fourth,
to the Holders of the Class SB Certificates.
(B) On the Closing Date, Trustee shall, for the benefit of the
RALI Series 2006-QH1
Trust, enter in the Class A-3 Yield Maintenance Agreement with
the Yield Maintenance
Agreements Provider. On the Business Day prior to each
Distribution Date from and including
the Distribution Date in January 2007 to and including the
Distribution Date in October
2011, the Trustee shall deposit any amounts received under the
Class A-3 Yield Maintenance
Agreement into the Certificate Account. On each Distribution
Date from and including the
Distribution Date in January 2007 to and including the
Distribution Date in October 2011,
the Trustee shall withdraw from the Certificate Account any
amounts received under the Class
A-3 Yield Maintenance Agreement and distribute such amounts as
follows: (i) first, to the
Holders of the Class A-3 Certificates, to cover Accrued
Certificate Interest (after taking
into account the distributions made pursuant to Section
4.02(c)(i) on that Distribution
Date); (ii) second, to the Holders of the Class A-3
Certificates, to cover Interest
Carryforward Amounts and Basis Risk Shortfalls (after taking
into account the distributions
made pursuant to Sections 4.02(c)(vi) and (vii) on that
Distribution Date); and (iii) third,
to the Holders of the Class SB Certificates.
(C) In the event that the either of the Yield Maintenance
Agreements, or any replacement
of them, terminates prior to the Distribution Date in December
2009, the Master Servicer,
but at no expense to the Master Servicer, on behalf of the
Trustee, to the extent that the
termination value under the Yield Maintenance Agreements are
sufficient therefor and only to
the extent of the termination payment received from the Yield
Maintenance Agreements
Provider, shall (i) cause a new yield maintenance agreement
provider to assume the
obligations of the terminated Yield Maintenance Agreements
Provider or (ii) cause a new
yield maintenance agreement or agreements provider to enter into
a new yield maintenance
agreement with RALI Series 2006-QH1 Trust, having substantially
similar terms as those set
forth in the either of the applicable Yield Maintenance
Agreements.
SECTION 4.10. THE CERTIFICATE POLICY.
(A) If, pursuant to Section 4.04(a)(iv), the Master Servicer
determines that the
Deficiency Amount for such Distribution Date is greater than
zero, the Trustee shall
complete the Notice and submit such Notice in accordance with
the Certificate Policy to the
Certificate Insurer no later than 12:00 P.M., New York City
time, on the Business Day
immediately preceding each Distribution Date, as a claim for an
Insured Payment (provided
that the Trustee shall submit such notice on the second Business
Day immediately preceding
such Distribution Date if it is able to do so) in an amount
equal to such Deficiency Amount.
(B) Upon receipt of an Insured Payment from the Certificate
Insurer on behalf of the
Class A-3 Certificateholders, the Trustee shall deposit such
Insured Payment in the
Certificate Account. The Trustee shall distribute on each
Distribution Date the Deficiency
Amount for such Distribution Date from the Certificate Account,
together with the
distributions due to the Class A-3 Certificateholders on such
Distribution Date, as follows:
(i) the portion of any such Deficiency Amount related to clause
(i) of the definition of
Deficiency Amount shall be distributed to the Class A-3
Certificateholders in accordance
with Section 4.02(c)(i), (ii) the portion of any such Deficiency
Amount related to clause
(ii) of the definition of Deficiency Amount shall be distributed
to the Class A-3
Certificateholders in accordance with Section 4.02(d); and (iii)
the portion of any such
Deficiency Amount related to clause (iii) of the definition of
Deficiency Amount shall be
distributed to the Class A-3 Certificateholders in accordance
with Section 9.01(c).
(C) The Trustee shall (i) receive as attorney-in-fact of each
Class A-3 Certificateholder
any Insured Payment from the Certificate Insurer and (ii)
distribute such Insured Payment to
such Class A-3 Certificateholders as set forth in subsection (b)
above. Insured Payments
disbursed by the Trustee from proceeds of the Certificate Policy
shall not be considered
payment by the Trust Fund with respect to the Class A-3
Certificates, nor shall such
disbursement of such Insured Payments discharge the obligations
of the Trust Fund with
respect to the amounts thereof, and the Certificate Insurer
shall become owner of such
amounts to the extent covered by such Insured Payments as the
deemed assignee and subrogee
of such Class A-3 Certificateholders. The Trustee hereby agrees
on behalf of each Class A-3
Certificateholder (and each Class A-3 Certificateholder, by its
acceptance of its Class A-3
Certificates, hereby agrees) for the benefit of the Certificate
Insurer that the Trustee
shall recognize that to the extent the Certificate Insurer makes
Insured Payments, either
directly or indirectly (as by paying through the Trustee), to
the Class A-3
Certificateholders, the Certificate Insurer will be entitled to
be subrogated to the rights
of the Class A-3 Certificateholders to the extent of such
payments.
(D) In the event the Trustee receives a certified copy of an
order of the appropriate
court that any scheduled payment of principal or interest on the
Class A-3 Certificates has
been voided in whole or in part as a preference payment under
applicable bankruptcy law, the
Trustee shall (i) promptly notify the Certificate Insurer and
(ii) comply with the
provisions of the Certificate Policy, to obtain payment by the
Certificate Insurer of such
voided scheduled payment. In addition, the Trustee shall mail
notice to all Holders of the
Class A-3 Certificates so affected that, in the event that any
such Holder's scheduled
payment is so recovered, such Holder will be entitled to payment
pursuant to the terms of
the Certificate Policy, a copy of which shall be made available
to such Holders by Trustee.
The Trustee shall furnish to the Certificate Insurer its records
listing the payments on the
Class A-3 Certificates, if any, that have been made by the
Trustee and subsequently
recovered from the affected Holders, and the dates on which such
payments were made by the
Trustee.
(E) Upon its becoming aware of the occurrence of an Event of
Default, the Trustee shall
promptly notify the Certificate Insurer of such Event of
Default.
(F) The Trustee shall promptly notify the Certificate Insurer of
either of the following
as to which it has knowledge: (A) the commencement of any
proceeding by or against the
Company commenced under the United States bankruptcy code or any
other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar
law (an "Insolvency
Proceeding") and (B) the making of any claim in connection with
any Insolvency Proceeding
seeking the avoidance as a preferential transfer (a "Preference
Claim") of any distribution
made with respect to the Class A-3 Certificates as to which it
has actual knowledge. Each
Holder of a Class A-3 Certificate, by its purchase of Class A-3
Certificates, and the
Trustee hereby agrees that the Certificate Insurer (so long as
no Certificate Insurer
Default exists) may at any time during the continuation of any
proceeding relating to a
Preference Claim direct all matters relating to such Preference
Claim, including, without
limitation, (i) the direction of any appeal of any order
relating to any Preference Claim
and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal.
In addition and without limitation of the foregoing, the
Certificate Insurer shall be
subrogated to the rights of the Trustee and each Holder of a
Class A-3 Certificate in the
conduct of any Preference Claim, including, without limitation,
all rights of any party to
an adversary proceeding action with respect to any court order
issued in connection with any
such Preference Claim.
(G) The Master Servicer shall provide the Certificate Insurer
with reasonable access to
information regarding the Mortgage Loans.
(H) For so long as there is no continuing default by the
Certificate Insurer under its
obligations under the Certificate Policy (a "Certificate Insurer
Default"), each Holder of a
Class A-3 Certificate agrees that the Certificate Insurer shall
be treated by the Company,
the Servicer and the Trustee as if the Certificate Insurer were
the Holder of all of the
Class A-3 Certificates, for the purpose (and solely for the
purpose) of the giving of any
consent, the making of any direction or the exercise of any
voting or other control rights
otherwise given to the Holders of the Class A-3 Certificates
under this Agreement.
(I) The Trustee shall keep complete and accurate records in
respect of (i) all funds
remitted to by the Certificate Insurer and deposited into the
Certificate Account and (ii)
the allocations of such funds to payments of interest and
principal in respect of the Class
A-3 Certificates. The Certificate Insurer shall have the right
to inspect such records at
reasonable times during normal business hours upon three
Business Day's prior notice to the
Trustee.
(J) With respect to this Section 4.10 the terms "Receipt" and
"Received" shall mean
actual delivery to the Certificate Insurer, if any, prior to
12:00 p.m., New York time, on a
Business Day; delivery either on a day that is not a Business
Day or after 12:00 p.m., New
York time, shall be deemed to be Received on the next succeeding
Business Day. If any
notice or certificate given under the Certificate Policy by the
Trustee is not in proper
form or is not properly completed, executed or delivered, it
shall be deemed not to have
been Received. The Certificate Insurer shall promptly so advise
the Trustee and the Trustee
may submit an amended notice.
(K) All notices, statements reports, certificates or opinions
required by this Agreement
to be sent to the Rating Agencies or the Class A-3
Certificateholders shall also be sent at
such time to the Certificate Insurer at the notice address set
forth in Section 11.05.
(L) The Certificate Insurer shall be an express third party
beneficiary of this Agreement
for the purpose of enforcing the provisions hereof to the extent
of the Certificate
Insurer's rights explicitly specified herein as if a party
hereto.
(M) All references in this Agreement to the ratings assigned to
the Certificates and to
the interests of any Certificateholders shall be without regard
to the Certificate Policy,
in the case of the Class A-3 Certificates.
(N) Payments to the Certificate Insurer will be made by wire
transfer of immediately
available funds to the Certificate Insurer Account, unless the
Certificate Insurer notifies
the Trustee in writing.
(O) Upon payment in full of the Class A-3 Certificates, the
Trustee shall surrender the
Certificate Policy to the Certificate Insurer.
ARTICLE V
THE CERTIFICATES
(See Article V of the Standard Terms)
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
(See Article VI of the Standard Terms)
ARTICLE VII
DEFAULT
(See Article VII of the Standard Terms.)
ARTICLE VIII
CONCERNING THE TRUSTEE
(See Article VIII of the Standard Terms.)
SECTION 1.01.
ARTICLE IX
TERMINATION
SECTION 9.01. OPTIONAL PURCHASE BY THE MASTER SERVICER OF ALL
CERTIFICATES; TERMINATION
UPON PURCHASE BY THE MASTER SERVICER OR LIQUIDATION OF ALL
MORTGAGE LOANS.
(A) Subject to Section 9.02, the respective obligations and
responsibilities of the
Company, the Master Servicer and the Trustee created hereby in
respect of the Certificates
(other than the obligation of the Trustee to make certain
payments after the Final
Distribution Date to Certificateholders and the obligation of
the Company to send certain
notices as hereinafter set forth) shall terminate upon the last
action required to be taken
by the Trustee on the Final Distribution Date pursuant to this
Article IX following the
earlier of:
(I) the later of the final payment or other liquidation (or any
Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund
or the
disposition of all property acquired upon foreclosure or deed in
lieu of
foreclosure of any Mortgage Loan, or
(II) the purchase by the Master Servicer of all Mortgage Loans
and all property acquired
in respect of any Mortgage Loan remaining in the Trust Fund at a
price equal
to 100% of the unpaid principal balance of each Mortgage Loan
or, if less than
such unpaid principal balance, the fair market value of the
related underlying
property of such Mortgage Loan with respect to Mortgage Loans as
to which
title has been acquired if such fair market value is less than
such unpaid
principal balance (net of any unreimbursed Advances attributable
to principal)
on the day of repurchase plus accrued interest thereon at the
Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of any Modified
Mortgage Loan)
plus the Certificate Insurer Premium Modified Rate, to, but not
including, the
first day of the month in which such repurchase price is
distributed plus any
amounts due to the Certificate Insurer under the Certificate
Policy, provided,
however, that in no event shall the trust created hereby
continue beyond the
expiration of 21 years from the death of the last survivor of
the descendants
of Joseph P. Kennedy, the late ambassador of the United States
to the Court of
St. James, living on the date hereof and provided further that
the purchase
price set forth above shall be increased as is necessary, as
determined by the
Master Servicer, to avoid disqualification of any portion of any
REMIC formed
under the Series Supplement as a REMIC. The purchase price paid
by the Master
Servicer shall also include any amounts owed by 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
Compliance With Laws Representation, that remain unpaid on the
date of such
purchase.
The right of the Master Servicer to purchase all the assets of
the Trust Fund
pursuant to clause (ii) above is conditioned upon the Pool
Stated Principal Balance as of
the Final Distribution Date, prior to giving effect to
distributions to be made on such
Distribution Date, being less than ten percent of the Cut-off
Date Principal Balance of the
Mortgage Loans.
If such right is exercised by the Master Servicer, the Master
Servicer shall be
deemed to have been reimbursed for the full amount of any
unreimbursed Advances theretofore
made by it with respect to the Mortgage Loans. In addition, the
Master Servicer shall
provide to the Trustee the certification required by Section
3.15 and the Trustee and any
Custodian shall, promptly following payment of the purchase
price, release to the Master
Servicer the Custodial Files pertaining to the Mortgage Loans
being purchased. No purchase
pursuant to clause (ii) of this Section 9.01(a) is permitted if
(1) a net interest margin
transaction with respect to the Class SB Certificates is
outstanding unless the Underwriter
consents in writing and (2) it would result in a draw on the
Certificate Policy unless the
Certificate Insurer consents in writing.
In addition to the foregoing, on any Distribution Date on which
the Pool Stated
Principal Balance, prior to giving effect to distributions to be
made on such Distribution
Date, is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans,
the Master Servicer shall have the right, at its option, to
purchase the Certificates in
whole, but not in part, at a price equal to the outstanding
Certificate Principal Balance of
such Certificates plus the sum of Accrued Certificate Interest
thereon for the related
Interest Accrual Period and any previously unpaid Accrued
Certificate Interest. If the
Master Servicer exercises this right to purchase the outstanding
Certificates, the Master
Servicer will promptly terminate the respective obligations and
responsibilities created
hereby in respect of the Certificates pursuant to this Article
IX.
(B) (See Section 9.01(b) of the Standard Terms)
(C) (See Section 9.01(c) of the Standard Terms)
(D) (See Section 9.01(d) of the Standard Terms)
(E) (See Section 9.01(e) of the Standard Terms)
SECTION 9.02. ADDITIONAL TERMINATION REQUIREMENTS. (See Section
9.02 of the
Standard Terms)
SECTION 9.03. TERMINATION OF MULTIPLE REMICS. (See Section 9.03
of the Standard
Terms)
ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC ADMINISTRATION. (See Section 10.01 of the
Standard Terms.)
SECTION 10.02. MASTER SERVICER; REMIC ADMINISTRATOR AND TRUSTEE
INDEMNIFICATION. (See
Section 10.02 of the Standard Terms.)
SECTION 10.03. DESIGNATION OF REMICS.
The REMIC Administrator will make an election to treat the
segregated pool of assets
described in the definition of REMIC I (as defined herein)
(including the Mortgage Loans but
excluding the Yield Maintenance Agreements), and subject to this
Agreement, as a REMIC
(REMIC I) for federal income tax purposes. The REMIC
Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I
Regular Interests as a REMIC
(REMIC II) for federal income tax purposes. The REMIC
Administrator will make an election
to treat the pool of assets comprised of REMIC II Regular
Interests SB-IO and SB-PO as a
REMIC (REMIC III) for federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in
REMIC I and the Class
R-I Certificates will be the sole class of "residual interests"
in REMIC I for purposes of
the REMIC Provisions (as defined herein) under the federal
income tax law.
The Class A-1 Certificates, Class A-2 Certificates, Class A-3
Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates,
Class M-5 Certificates and REMIC II Regular Interests SB-IO and
SB-PO will be "regular
interests" in REMIC II, and the Class R-II Certificates will
represent the sole class of
"residual interests" in REMIC II for purposes of the REMIC
Provisions (as defined herein)
under federal income tax law.
The REMIC III Regular Interest will be the "regular interest" in
REMIC III, ownership
of which will be represented by the Class SB Certificates, and
the Class R-X Certificates
will represent the sole class of "residual interests" in REMIC
III for purposes of the REMIC
Provisions under federal income tax law.
SECTION 10.04. DISTRIBUTIONS ON THE REMIC I REGULAR INTERESTS.
(See Section 4.02(c) of this
Series Supplement.)
SECTION 10.05. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement, the
Trustee or any Paying
Agent, as applicable, shall comply with all federal withholding
requirements respecting
payments to Certificateholders, including interest or original
issue discount payments or
advances thereof that the Trustee or any Paying Agent, as
applicable, reasonably believes
are applicable under the Code. The consent of Certificateholders
shall not be required for
such withholding. In the event the Trustee or any Paying Agent,
as applicable, does
withhold any amount from interest or original issue discount
payments or advances thereof to
any Certificateholder pursuant to federal withholding
requirements, the Trustee or any
Paying Agent, as applicable, shall indicate the amount withheld
to such Certificateholder
pursuant to the terms of such requirements.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. AMENDMENT. (See Section 11.01 of the Standard
Terms.)
SECTION 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS. (See
Section 11.02 of the Standard
Terms.)
SECTION 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (See
Section 11.03 of the
Standard Terms.)
SECTION 11.04. GOVERNING LAW. (See Section 11.04 of the Standard
Terms.)
SECTION 11.05.
NOTICES. All demands and notices hereunder shall be in writing
and shall be deemed
to have been duly given if personally delivered at or mailed by
registered mail, postage
prepaid (except for notices to the Trustee which shall be deemed
to have been duly given
only when received), to the appropriate address for each
recipient listed in the table below
or, in each case, such other address as may hereafter be
furnished in writing to the Master
Servicer, the Trustee and the Company, as applicable:
-------------------------------------
-----------------------------------------------------------
RECIPIENT ADDRESS
-------------------------------------
-----------------------------------------------------------
-------------------------------------
-----------------------------------------------------------
Company 8400 Normandale Lake Boulevard
Suite 250
Minneapolis, Minnesota 55437
Attention: President
-------------------------------------
-----------------------------------------------------------
-------------------------------------
-----------------------------------------------------------
Master Servicer 2255 N. Ontario Street, Suite 400
Burbank, California 91504-2130
Attention: Managing Director/Master Servicing
-------------------------------------
-----------------------------------------------------------
-------------------------------------
-----------------------------------------------------------
Trustee Corporate Trust Office
1761 East St. Andrew Place
Santa Ana, California 92705-4934,
Attention: Residential Accredit Loans, Inc. Series
2006-QH1
The Trustee designates its offices located at DB Services
Tennessee, 648 Grassmere Park Road, Nashville, TN
37211-3658, Attn: Transfer Unit, for the purposes of
Section 8.12 of the Standard Terms
-------------------------------------
-----------------------------------------------------------
-------------------------------------
-----------------------------------------------------------
Moody's Investors Service, Inc. 99 Church Street, 4th Floor
New York, New York 10004
-------------------------------------
-----------------------------------------------------------
-------------------------------------
-----------------------------------------------------------
Standard & Poor's Ratings Services, 55 Water Street
a division of The McGraw-Hill 41st Floor
Companies, Inc. New York, New York 10041
-------------------------------------
-----------------------------------------------------------
-------------------------------------
-----------------------------------------------------------
Dominion Bond Rating Service 55 Broadway
New York, New York 10006
-------------------------------------
-----------------------------------------------------------
-------------------------------------
-----------------------------------------------------------
Certificate Insurer Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
-------------------------------------
-----------------------------------------------------------
Any notice required or permitted to be mailed to a
Certificateholder shall be given by first
class mail, postage prepaid, at the address of such Holder as
shown in the Certificate
Register. Any notice so mailed within the time prescribed in
this Agreement shall be
conclusively presumed to have been duly given, whether or not
the Certificateholder receives
such notice.
SECTION 11.06. REQUIRED NOTICES TO RATING AGENCY AND
SUBSERVICER. (See Section 11.06 of the
Standard Terms.)
SECTION 11.07. SEVERABILITY OF PROVISIONS. (See Section 11.07 of
the Standard Terms.)
SECTION 11.08. SUPPLEMENTAL PROVISIONS FOR RESECURITIZATION.
(See Section 11.08 of the
Standard Terms.)
SECTION 11.09. ALLOCATION OF VOTING RIGHTS.
98.0% 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; 1.0% of all
Voting Rights shall be
allocated among the Holders of Class SB Certificates; and 1.0%
of all of the Voting Rights
shall be allocated to the Holders of each Class of the Class
R-I, Class R-II and Class R-X
Certificates; in each case to be allocated among the
Certificates of such Class in
accordance with their respective Percentage Interests. Voting
Rights of the Class A-3
Certificateholders may be exercised by the Certificate Insurer
without the consent of such
Holders and may only be exercised by such Holders with the prior
written consent of the
Certificate Insurer so long as there does not exist a failure by
the Certificate Insurer to
make a required payment under the Certificate Policy.
SECTION 11.10. NO PETITION.
The Company, Master Servicer and the Trustee, by entering into
this Agreement, and
each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will
not at any time institute against the Trust Fund, or join in any
institution against the
Trust Fund of, any bankruptcy proceedings under any United
States federal or state
bankruptcy or similar law in connection with any obligation with
respect to the Certificates
or this Agreement.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
(See Article XII of the Standard Terms)
OHS West:260130781.5
IN WITNESS WHEREOF, the Company, the Master Servicer and the
Trustee have caused
their names to be signed hereto by their respective officers
thereunto duly authorized and
their respective seals, duly attested, to be hereunto affixed,
all as of the day and year
first above written.
RESIDENTIAL ACCREDIT LOANS, INC.
[Seal]
By: /s/Heather Anderson
Name: Heather Anderson
Title: Vice President
Attest: /s/Christopher Martinez
Name: Christopher Martinez
Title: Associate
RESIDENTIAL FUNDING COMPANY, LLC
[Seal]
By: /s/Christopher Martinez
Name: Christopher Martinez
Title: Associate
Attest: /s/Heather Anderson
Name: Heather Anderson
Title: Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS, as
[Seal] Trustee
By: /s/
Name:
Title: Authorized Signer
By: /s/
Name:
Title:
Attest: /s/
Name:
Title: Authorized Signer
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of November, 2006 before me, a notary public in
and for said State,
personally appeared ________________ known to me to be a
___________ of Residential Accredit
Loans, Inc., one of the corporations that executed the within
instrument, and also known to
me to be the person who executed it on behalf of said
corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day
and year in this certificate first above written.
/s/
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of November, 2006 before me, a notary public in
and for said State,
personally appeared Christopher Martinez known to me to be a(n)
Associate of Residential
Funding Company, LLC, one of the corporations that executed the
within instrument, and also
known to me to be the person who executed it on behalf of said
corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day
and year in this certificate first above written.
/s/
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of November, 2006 before me, a notary public in
and for said State,
personally appeared __________________ known to me to be a(n)
__________________ of DEUTSCHE
BANK TRUST COMPANY AMERICAS, the New York banking corporation
that executed the within
instrument, and also known to me to be the person who executed
it on behalf of said banking
corporation and acknowledged to me that such banking corporation
executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day
and year in this certificate first above written.
/s/
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of November, 2006 before me, a notary public in
and for said State,
personally appeared ____________ known to me to be a(n)
___________ of DEUTSCHE BANK TRUST
COMPANY AMERICAS, the New York banking corporation that executed
the within instrument, and
also known to me to be the person who executed it on behalf of
said banking corporation and
acknowledged to me that such banking corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day
and year in this certificate first above written.
/s/
Notary Public
[Notarial Seal]
EXHIBIT ONE
MORTGAGE LOAN SCHEDULE
EXHIBIT TWO
INFORMATION TO BE INCLUDED IN
MONTHLY DISTRIBUTION DATE STATEMENT
(i) the applicable Record Date, Determination Date and
Distribution Date, and the
date on which the applicable interest accrual period
commenced;
(ii) the aggregate amount of payments received with respect to
the Mortgage Loans,
including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the
Master Servicer and the
Subservicer;
(iv) the amount of any other fees or expenses paid, and the
identity of the party
receiving such fees or expenses;
(v) (a) the amount of such distribution to the
Certificateholders of such Class
applied to reduce the Certificate Principal Balance thereof, and
(b) the aggregate
amount included therein representing Principal Prepayments;
(vi) the amount of such distribution to Holders of such Class of
Certificates
allocable to interest;
(vii) if the distribution to the Holders of such Class of
Certificates is less than
the full amount that would be distributable to such Holders if
there were sufficient
funds available therefor, the amount of the shortfall;
(viii) the aggregate Certificate Principal Balance of each Class
of Certificates,
before and after giving effect to the amounts distributed on
such Distribution Date,
separately identifying any reduction thereof due to Realized
Losses other than
pursuant to an actual distribution of principal;
(ix) the aggregate Certificate Principal Balance of each of the
Class A, Class M and
Class SB Certificates as of the Closing Date.
(x) the weighted average remaining term to maturity of the
Mortgage Loans after
giving effect to the amounts distributed on such Distribution
Date;
(xi) the weighted average Mortgage Rates of the Mortgage Loans
after giving effect to
the amounts distributed on such Distribution Date;
(xii) the number and Pool Stated Principal Balance of the
Mortgage Loans after giving
effect to the distribution of principal on such Distribution
Date and the number of
Mortgage Loans at the beginning and end of the related Due
Period;
(xiii) on the basis of the most recent reports furnished to it
by Sub-Servicers, the
number and Stated Principal Balances of Mortgage Loans that are
Delinquent (A) 30-59
days, (B) 60-89 days and (C) 90 or more days and the number and
Stated Principal
Balances of Mortgage Loans that are in foreclosure;
(xiv) the aggregate amount of Realized Losses for such
Distribution Date;
(xv) the amount, terms and general purpose of any Advance by the
Master Servicer
pursuant to Section 4.04 and the amount of all Advances that
have been reimbursed
during the related Due Period;
(xvi) any material modifications, extensions or waivers to the
terms of the Mortgage
Loans during the Due Period or that have cumulatively become
material over time;
(xvii) any material breaches of Mortgage Loan representations or
warranties or
covenants in the Agreement.
(xviii) the number, stated and aggregate principal balance of
any REO Properties;
(xix) the aggregate Accrued Certificate Interest remaining
unpaid, if any, for each
Class of Certificates, after giving effect to the distribution
made on such
Distribution Date;
(xx) the Pass-Through Rates on each Class of Certificates, the
Net WAC Cap Rate and
the Available Funds Rate for such Distribution Date, separately
identifying LIBOR for
such Distribution Date;
(xxi) the Basis Risk Shortfall and Interest Carryforward Amount,
if any, for each
Class of Certificates, and Prepayment Interest Shortfalls;
(xxii) the related Senior Enhancement Percentage for such
Distribution Date;
(xxiii) the Overcollateralization Amount and Required
Overcollateralization Amount
following such Distribution Date;
(xxiv) the occurrence of the Stepdown Date, and the aggregate
amount of Realized
Losses since the Cut-off Date for the Mortgage Loans;
(xxv) the occurrence of the Credit Support Depletion Date;
(xxvi) the aggregate amount of any recoveries on previously
foreclosed loans from
Sellers; and
(xxvii) the amount of any Insured Payment made on such
Distribution Date, the amount
of any reimbursement payment made to the Certificate Insurer on
such Distribution
Date pursuant to Sections 4.02(c) and (d) and the aggregate
amount of prior draws not
yet reimbursed.
In the case of information furnished pursuant to clauses (v)(a)
and (vi) above, the
amounts shall be expressed as a dollar amount per Certificate
with a $1,000 denomination.
The Trustee's internet website will initially be located at
www.tss.db.com/invr. To
receive this statement via first class mail, telephone the
trustee at (800) 735-7777.
EXHIBIT THREE
STANDARD TERMS OF POOLING AND SERVICING
AGREEMENT DATED AS OF NOVEMBER 1, 2006
==============================================================================
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2006
Residential Accredit Loans, Inc.
Mortgage Asset-Backed Pass-Through Certificates
==============================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS...................................................2
Section 1.01.
Definitions.............................................2
Section 1.02. Use of Words and
Phrases...............................35
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE
OF
CERTIFICATES.................................................36
Section 2.01. Conveyance of Mortgage
Loans...........................36
Section 2.02. Acceptance by
Trustee..................................43
Section 2.03. Representations, Warranties and Covenants of
the
Master Servicer and the Company........................44
Section 2.04. Representations and Warranties of Residential
Funding................................................45
Section 2.05. Execution and Authentication of
Certificates/Issuance of Certificates Evidencing
Interests in REMIC I Certificates......................47
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC
II
Regular Interests; Acceptance by the Trustee...........47
Section 2.07. Issuance of Certificates Evidencing Interests
in
REMIC II...............................................47
Section 2.08. Purposes and Powers of the
Trust.......................48
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS...............48
Section 3.01. Master Servicer to Act as
Servicer.....................48
Section 3.02. Subservicing Agreements Between Master
Servicer
and Subservicers; Enforcement of Subservicers' and
Sellers' Obligations...................................50
Section 3.03. Successor
Subservicers.................................51
Section 3.04. Liability of the Master
Servicer.......................51
Section 3.05. No Contractual Relationship Between
Subservicer
and Trustee or Certificateholders......................51
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee..................................52
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account..........................52
Section 3.08. Subservicing Accounts; Servicing
Accounts..............55
Section 3.09. Access to Certain Documentation and
Information
Regarding the Mortgage Loans...........................56
Section 3.10. Permitted Withdrawals from the Custodial
Account.......57
Section 3.11. Maintenance of the Primary Insurance Policies;
Collections Thereunder.................................59
Section 3.12. Maintenance of Fire Insurance and Omissions
and
Fidelity Coverage......................................59
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption
and Modification Agreements; Certain Assignments......61
Section 3.14. Realization Upon Defaulted Mortgage
Loans..............63
Section 3.15. Trustee to Cooperate; Release of Custodial
Files.......66
Section 3.16. Servicing and Other Compensation; Compensating
Interest...............................................68
Section 3.17. Reports to the Trustee and the
Company.................69
Section 3.18. Annual Statement as to Compliance and
Servicing
Assessment.............................................69
Section 3.19. Annual Independent Public Accountants'
Servicing
Report.................................................69
Section 3.20. Rights of the Company in Respect of the Master
Servicer...............................................70
Section 3.21. Administration of Buydown
Funds........................70
Section 3.22. Advance
Facility.......................................71
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS...............................75
Section 4.01. Certificate
Account....................................75
Section 4.02. Distributions.
....................................75
Section 4.03. Statements to Certificateholders; Statements
to
Rating Agencies; Exchange Act Reporting................75
Section 4.04. Distribution of Reports to the Trustee and the
Company; Advances by the Master Servicer...............78
Section 4.05. Allocation of Realized
Losses..........................79
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property.....................................79
Section 4.07. Optional Purchase of Defaulted Mortgage
Loans..........79
Section 4.08. Surety
Bond............................................80
ARTICLE V THE
CERTIFICATES.............................................81
Section 5.01. The
Certificates.......................................81
Section 5.02. Registration of Transfer and Exchange of
Certificates...........................................83
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates......89
Section 5.04. Persons Deemed
Owners..................................89
Section 5.05. Appointment of Paying
Agent............................89
Section 5.06. U.S.A. Patriot Act
Compliance..........................90
ARTICLE VI THE COMPANY AND THE MASTER
SERVICER..........................91
Section 6.01. Respective Liabilities of the Company and the
Master Servicer........................................91
Section 6.02. Merger or Consolidation of the Company or the
Master Servicer; Assignment of Rights and
Delegation of Duties by Master Servicer................91
Section 6.03. Limitation on Liability of the Company, the
Master Servicer and Others.............................92
Section 6.04. Company and Master Servicer Not to
Resign..............93
ARTICLE VII
DEFAULT......................................................94
Section 7.01. Events of
Default......................................94
Section 7.02. Trustee or Company to Act; Appointment of
Successor....96
Section 7.03. Notification to
Certificateholders.....................97
Section 7.04. Waiver of Events of
Default............................97
ARTICLE VIII CONCERNING THE
TRUSTEE.......................................98
Section 8.01. Duties of
Trustee......................................98
Section 8.02. Certain Matters Affecting the
Trustee..................99
Section 8.03. Trustee Not Liable for Certificates or
Mortgage
Loans.................................................101
Section 8.04. Trustee May Own
Certificates..........................101
Section 8.05. Master Servicer to Pay Trustee's Fees and
Expenses; Indemnification.............................101
Section 8.06. Eligibility Requirements for
Trustee..................102
Section 8.07. Resignation and Removal of the
Trustee................103
Section 8.08. Successor
Trustee.....................................104
Section 8.09. Merger or Consolidation of
Trustee....................104
Section 8.10. Appointment of Co-Trustee or Separate
Trustee.........104
Section 8.11. Appointment of the
Custodian..........................105
Section 8.12. Appointment of Office or
Agency.......................106
ARTICLE IX TERMINATION OR OPTIONAL PURCHASE OF ALL
CERTIFICATES........107
Section 9.01. Optional Purchase by the Master Servicer of
All
Certificates; Termination Upon Purchase by the
Master Servicer or Liquidation of All Mortgage
Loans.................................................107
Section 9.02. Additional Termination
Requirements...................110
Section 9.03. Termination of Multiple
REMICs........................111
ARTICLE X REMIC
PROVISIONS............................................112
Section 10.01. REMIC
Administration..................................112
Section 10.02. Master Servicer, REMIC Administrator and
Trustee
Indemnification.......................................115
Section 10.03. Designation of
REMIC(s)...............................116
Section 10.04. Distributions on the Uncertificated REMIC I
and
REMIC II Regular Interests............................116
Section 10.05. Compliance with Withholding
Requirements..............116
ARTICLE XI MISCELLANEOUS
PROVISIONS....................................117
Section 11.01.
Amendment.............................................117
Section 11.02. Recordation of Agreement;
Counterparts................119
Section 11.03. Limitation on Rights of
Certificateholders............120
Section 11.04. Governing
Law.........................................120
Section 11.05.
Notices...............................................121
Section 11.06. Required Notices to Rating Agency and
Subservicer.....121
Section 11.07. Severability of
Provisions............................122
Section 11.08. Supplemental Provisions for
Resecuritization..........122
Section 11.09. Allocation of Voting
Rights...........................122
Section 11.10. No
Petition...........................................122
ARTICLE XII COMPLIANCE WITH REGULATION
AB...............................123
Section 12.01. Intent of the Parties;
Reasonableness.................123
Section 12.02. Additional Representations and Warranties of
the
Trustee...............................................123
Section 12.03. Information to Be Provided by the
Trustee.............124
Section 12.04. Report on Assessment of Compliance and
Attestation....124
Section 12.05. Indemnification;
Remedies.............................125
EXHIBITS
Exhibit A: Form of Class A Certificate
Exhibit A-I: Form of Class X Certificate
Exhibit B: Form of Class M Certificate
Exhibit C: Form of Class B Certificate
Exhibit C-I: Form of Class P Certificate
Exhibit C-II: Form of Class SB Certificate
Exhibit D: Form of Class R Certificate
Exhibit E: Form of Seller/Servicer Contract
Exhibit F: Forms of Request for Release
Exhibit G-1: Form of Transfer Affidavit and Agreement
Exhibit G-2: Form of Transferor Certificate
Exhibit H: Form of Investor Representation Letter
Exhibit I: Form of Transferor Representation Letter
Exhibit J: Form of Rule 144A Investment Representation
Letter
Exhibit K: Text of Amendment to Pooling and Servicing
Agreement
Pursuant to Section 11.01(e) for a Limited Guaranty
Exhibit L: Form of Limited Guaranty
Exhibit M: Form of Lender Certification for Assignment of
Mortgage Loan
Exhibit N: Request for Exchange Form
Exhibit O: Form of Form 10-K Certification
Exhibit P: Form of Back-Up Certification to Form 10-K
Certificate
Exhibit Q: Information to be Provided by the Master Servicer to
the
Rating Agencies Relating to Reportable Modified Mortgage
Loans
Exhibit R: Servicing Criteria
This is the Standard Terms of Pooling and Servicing Agreement,
dated as
of November 1, 2006 (the "Standard Terms", and as incorporated
by reference
into a Series Supplement dated as of the Cut-off Date, the
"Pooling and
Servicing Agreement" or "Agreement"), among RESIDENTIAL ACCREDIT
LOANS, INC.,
as the company (together with its permitted successors and
assigns, the
"Company"), RESIDENTIAL FUNDING COMPANY, LLC, as master servicer
(together
with its permitted successors and assigns, the "Master
Servicer"), and the
trustee named in the applicable Series Supplement (together with
its
permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell certain mortgage asset-backed
pass-through
certificates (collectively, the "Certificates"), to be issued
under the
Agreement in multiple classes, which in the aggregate will
evidence the
entire beneficial ownership interest in the Mortgage Loans.
In consideration of the mutual agreements herein contained,
the
Company, 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.
Accretion Termination Date: As defined in the Series
Supplement.
Accrual Certificates: As defined in the Series Supplement.
Accrued Certificate Interest: With respect to each Distribution
Date,
as to any Class or Subclass of Certificates (other than any
Principal Only
Certificates), interest accrued during the related Interest
Accrual Period at
the related Pass-Through Rate on the Certificate Principal
Balance or
Notional Amount thereof immediately prior to such Distribution
Date. Accrued
Certificate Interest will be calculated on the basis of a
360-day year,
consisting of twelve 30-day months. In each case Accrued
Certificate Interest
on any Class or Subclass of Certificates will be reduced by the
amount of:
(i) Prepayment Interest Shortfalls on all Mortgage Loans or, if
the
Mortgage Pool is comprised of two or more Loan Groups, on
the
Mortgage Loans in the related Loan Group (to the extent not
offset by the Master Servicer with a payment of Compensating
Interest as provided in Section 4.01),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or
the
Modified Net Mortgage Rate in the case of a Modified
Mortgage
Loan)) of Realized Losses on all Mortgage Loans or, if the
Mortgage Pool is comprised of two or more Loan Groups, on
the
Mortgage Loans in the related Loan Group (including Excess
Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy
Losses and Extraordinary Losses) not allocated solely to one
or
more specific Classes of Certificates pursuant to Section
4.05,
(iii) the interest portion of Advances that were (A)
previously
made with respect to a Mortgage Loan or REO Property on all
Mortgage Loans or, if the Mortgage Pool is comprised of two
or
more Loan Groups, on the Mortgage Loans in the related Loan
Group, which remained unreimbursed following the Cash
Liquidation
or REO Disposition of such Mortgage Loan or REO Property and
(B)
made with respect to delinquencies that were ultimately
determined to be Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses,
and
(iv) any other interest shortfalls not covered by the
subordination
provided by the Class M Certificates and Class B
Certificates,
including interest that is not collectible from the
Mortgagor
pursuant to the Servicemembers Civil Relief Act of 1940, as
amended, or similar legislation or regulations as in effect
from
time to time,
with all such reductions allocated (A) among all of the
Certificates in
proportion to their respective amounts of Accrued Certificate
Interest
payable on such Distribution Date absent such reductions or (B)
if the
Mortgage Pool is comprised of two or more Loan Groups, the
related Senior
Percentage of such reductions among the related Senior
Certificates in
proportion to the amounts of Accrued Certificate Interest
payable from the
related Loan Group on such Distribution Date absent such
reductions, with the
remainder of such reductions allocated among the holders of the
Class M
Certificates and Class B Certificates in proportion to their
respective
amounts of Accrued Certificate Interest payable on such
Distribution Date
absent such reductions. In addition to that portion of the
reductions
described in the preceding sentence that are allocated to any
Class of Class
B Certificates or any Class of Class M Certificates, Accrued
Certificate
Interest on such Class of Class B Certificates or such Class of
Class M
Certificates will be reduced by the interest portion (adjusted
to the Net
Mortgage Rate) of Realized Losses that are allocated solely to
such Class of
Class B Certificates or such Class of Class M Certificates
pursuant to
Section 4.05.
Addendum and Assignment Agreement: The Addendum and
Assignment
Agreement, dated as of January 31, 1995, between MLCC and the
Master Servicer.
Additional Collateral: Any of the following held, in addition to
the
related Mortgaged Property, as security for a Mortgage Loan: (i)
all money,
securities, security entitlements, accounts, general
intangibles, payment
rights, instruments, documents, deposit accounts, certificates
of deposit,
commodities contracts and other investment property and other
property of
whatever kind or description now existing or hereafter acquired
which is
pledged as security for the repayment of such Mortgage Loan,
(ii) third-party
guarantees, and (A) all money, securities, security
entitlements, accounts,
general intangibles, payment rights, instruments, documents,
deposit
accounts, certificates of deposit, commodities contracts and
other investment
property and other property of whatever kind or description now
existing or
hereafter acquired which is pledged as collateral for such
guarantee or (B)
any mortgaged property securing the performance of such
guarantee, or (iii)
such other collateral as may be set forth in the Series
Supplement.
Additional Collateral Loan: Each Mortgage Loan that is supported
by
Additional Collateral.
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.
Advance: As to any Mortgage Loan, any advance made by the
Master
Servicer, pursuant to Section 4.04.
Advance Facility: As defined in Section 3.22.
Advance Facility Notice: As defined in Section 3.22.
Advance Facility Trustee: As defined in Section 3.22.
Advancing Person: As defined in Section 3.22.
Advance Reimbursement Amounts: As defined in Section 3.22.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person.
For the
purposes of this definition, "control" means the power to direct
the
management and policies of such Person, directly or indirectly,
whether
through the ownership of voting securities, by contract or
otherwise; and the
terms "controlling" and "controlled" have meanings correlative
to the
foregoing.
Ambac: Ambac Assurance Corporation (formerly known as AMBAC
Indemnity
Corporation).
Amount Held for Future Distribution: As to any Distribution Date
and,
with respect to any Mortgage Pool that is comprised of two or
more Loan
Groups, each Loan Group, 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, Curtailments, 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, Insurance 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
Principal
Prepayments in Full made after the related Prepayment Period,
and (ii)
payments which represent early receipt of scheduled payments of
principal and
interest due on a date or dates subsequent to the related Due
Date.
Appraised Value: As 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 determined above or
the
appraised value determined in an appraisal at the time of
refinancing or
modification, as the case may be.
Assigned Contracts: With respect to any Pledged Asset Loan: the
Credit
Support Pledge Agreement; the Funding and Pledge Agreement,
among GMAC
Mortgage, LLC, National Financial Services Corporation and the
Mortgagor or
other person pledging the related Pledged Assets; the Additional
Collateral
Agreement, between GMAC Mortgage, LLC and the Mortgagor or other
person
pledging the related Pledged Assets; or such other contracts as
may be set
forth in the Series Supplement.
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 Company
relating to the
transfer and assignment of the Mortgage Loans.
Assignment Agreement and Amendment of Security Instrument: With
respect
to a Sharia Mortgage Loan, the agreement between the consumer
and the
co-owner pursuant to which all of the co-owner's interest as a
beneficiary
under the related Sharia Mortgage Loan Security Instrument and
the co-owner's
interest in the related Mortgaged Property is conveyed to a
subsequent owner,
which may take the form of an "Assignment Agreement" and an
"Amendment of
Security Instrument" or an "Assignment Agreement and Amendment
of Security
Instrument", as applicable.
Assignment of Proprietary Lease: With respect to a Cooperative
Loan,
the assignment of the related Cooperative Lease from the
Mortgagor to the
originator of the Cooperative Loan.
Available Distribution Amount: As to any Distribution Date and,
with
respect to any Mortgage Pool comprised of two or more Loan
Groups, each Loan
Group, 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, (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), (iv) any amount deposited in the
Certificate
Account pursuant to Section 4.07 or Section 9.01, (v) any amount
that the
Master Servicer is not permitted to withdraw from the Custodial
Account or
the Certificate Account pursuant to Section 3.16(e), (vi) any
amount received
by the Trustee pursuant to the Surety Bond in respect of such
Distribution
Date and (vii) the proceeds of any Pledged Assets received by
the Master
Servicer, reduced by (b) the sum as of the close of business on
the
immediately preceding Determination Date of (w) aggregate
Foreclosure
Profits, (x) the Amount Held for Future Distribution, and (y)
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). Such amount shall be determined separately for
each Loan
Group. Additionally, with respect to any Mortgage Pool that is
comprised of
two or more Loan Groups, if on any Distribution Date
Compensating Interest
provided pursuant to this Section 3.16(e) is less than
Prepayment Interest
Shortfalls incurred on the Mortgage Loans in connection with
Principal
Prepayments in Full and Curtailments made in the prior calendar
month, such
Compensating Interest shall be allocated on such Distribution
Date to the
Available Distribution Amount for each Loan Group on a pro rata
basis in
accordance with the respective amounts of such Prepayment
Interest Shortfalls
incurred on the Mortgage Loans in such Loan Group in respect of
such
Distribution Date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a
Deficient
Valuation or Debt Service Reduction; provided, however, that
neither a
Deficient Valuation nor a Debt Service Reduction shall be deemed
a Bankruptcy
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.
Book-Entry Certificate: Any Certificate registered in the name
of the
Depository or its nominee, and designated as such in the
Preliminary
Statement to the Series Supplement.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a
day on which banking institutions in the State of New York, the
State of
Michigan, the State of California, the State of Illinois or the
State of
Minnesota (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.
Buydown Funds: Any amount contributed by the seller of a
Mortgaged
Property, the Company or other source in order to enable the
Mortgagor to
reduce the payments required to be made from the Mortgagor's
funds in the
early years of a Mortgage Loan. Buydown Funds are not part of
the Trust Fund
prior to deposit into the Custodial or Certificate Account.
Buydown Mortgage Loan: Any Mortgage Loan as to which a
specified
amount of interest is paid out of related Buydown Funds in
accordance with a
related buydown agreement.
Calendar Quarter: A Calendar Quarter shall consist of one of
the
following time periods in any given year: January 1 through
March 31, April
1 through June 30, July 1 through September 30, and October 1
through
December 31.
Capitalization Reimbursement Amount: With respect to any
Distribution
Date and, with respect to any Mortgage Pool comprised of two or
more Loan
Groups, each Loan Group, the amount of Advances or Servicing
Advances that
were added to the Stated Principal Balance of all Mortgage Loans
or, if the
Mortgage Pool is comprised of two or more Loan Groups, on the
Mortgage Loans
in the related Loan Group, 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), plus the Capitalization
Reimbursement
Shortfall Amount remaining unreimbursed from any prior
Distribution Date and
reimbursed to the Master Servicer or Subservicer on or prior to
such
Distribution Date.
Capitalization Reimbursement Shortfall Amount: With respect to
any
Distribution Date and, with respect to any Mortgage Pool
comprised of two or
more Loan Groups, each Loan Group, the amount, if any, by which
the amount of
Advances or Servicing Advances that were added to the Stated
Principal
Balance of all Mortgage Loans (or, if the Mortgage Pool is
comprised of two
or more Loan Groups, on the Mortgage Loans in the related Loan
Group) during
the preceding calendar month exceeds the amount of principal
payments on the
Mortgage Loans included in the Available Distribution Amount
(or, if the
Mortgage Pool is comprised of two or more Loan Groups, Available
Distribution
Amount for the related Loan Group) for that Distribution
Date.
Cash Liquidation: As 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 Account Deposit Date: As 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, and, in respect of any
Insured
Certificates, the Certificate Insurer to the extent of
Cumulative Insurance
Payments, except that neither a Disqualified Organization nor a
Non-United
States Person shall be a holder of a Class R Certificate for
purposes hereof
and, 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 Company, 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 Insurer: As defined in the Series Supplement.
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 each Certificate
(other
than any Interest Only 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, plus
(ii) any Subsequent Recoveries added to the Certificate
Principal
Balance of such Certificate pursuant to Section 4.02, plus
(iii) in the case of each Accrual Certificate, an amount equal
to the
aggregate Accrued Certificate Interest added to the
Certificate
Principal Balance thereof prior to such date of
determination,
minus
(iv) 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(a) 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 the Certificate Principal Balance of each
Certificate of the
Class of Subordinate Certificates with the Lowest Priority at
any given time
shall be further reduced by an amount equal to the Percentage
Interest
represented by such Certificate multiplied by the excess, if
any, of (A) the
then aggregate Certificate Principal Balance of all Classes of
Certificates
then outstanding over (B) the then aggregate Stated Principal
Balance of the
Mortgage Loans.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section
5.02.
Class: Collectively, all of the Certificates bearing the
same
designation. The initial Class A-V Certificates and any Subclass
thereof
issued pursuant to Section 5.01(c) shall be a single Class for
purposes of
this Agreement.
Class A-P Certificate: Any one of the Certificates designated as
a
Class A-P Certificate.
Class A-P Collection Shortfall: With respect to the Cash
Liquidation
or REO Disposition of a Discount Mortgage Loan, any Distribution
Date and,
with respect to any Mortgage Pool comprised of two or more Loan
Groups, each
Loan Group, the excess of the amount described in clause (C)(1)
of the
definition of Class A-P Principal Distribution Amount (for the
related Loan
Group, if applicable) over the amount described in clause (C)(2)
of such
definition.
Class A-P Principal Distribution Amount: With respect to any
Distribution Date and, with respect to any Mortgage Pool
comprised of two or
more Loan Groups, each Loan Group, an amount equal to the
aggregate of:
(A) the related Discount Fraction of the principal portion
of
each Monthly Payment on each Discount Mortgage Loan (or, with
respect
to any Mortgage Pool comprised of two or more Loan Groups,
each
Discount Mortgage Loan in the related Loan Group) due during
the
related Due Period, whether or not received on or prior to the
related
Determination Date, minus the Discount Fraction of the
principal
portion of any related Debt Service Reduction which together
with other
Bankruptcy Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion
of
all unscheduled collections on each Discount Mortgage Loan (or,
with
respect to any Mortgage Pool comprised of two or more Loan
Groups, each
Discount Mortgage Loan in the related Loan Group) received
during the
preceding calendar month or, in the case of Principal
Prepayments in
Full, during the related Prepayment Period (other than amounts
received
in connection with a Cash Liquidation or REO Disposition of a
Discount
Mortgage Loan described in clause (C) below), including
Principal
Prepayments in Full, Curtailments, Subsequent Recoveries and
repurchases (including deemed repurchases under Section 3.07(b))
of
such Discount Mortgage Loans (or, in the case of a substitution
of a
Deleted Mortgage Loan, the Discount Fraction of the amount of
any
shortfall deposited in the Custodial Account in connection with
such
substitution);
(C) in connection with the Cash Liquidation or REO
Disposition
of a Discount Mortgage Loan (or, with respect to any Mortgage
Pool
comprised of two or more Loan Groups, each Discount Mortgage
Loan in
the related Loan Group) that occurred during the preceding
calendar
month (or was deemed to have occurred during such period in
accordance
with Section 3.07(b)) that did not result in any Excess Special
Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary
Losses, an amount equal to the lesser of (1) the applicable
Discount
Fraction of the Stated Principal Balance of such Discount
Mortgage Loan
immediately prior to such Distribution Date and (2) the
aggregate
amount of the collections on such Mortgage Loan to the extent
applied
as recoveries of principal;
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through
(C)
above) that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for
such
Distribution Date and the related Loan Group, if applicable, and
the
amount of any Class A-P Collection Shortfalls (for the related
Loan
Group, if applicable) remaining unpaid for all previous
Distribution
Dates, but only to the extent of the Eligible Funds for such
Distribution Date; minus
(F) the related Discount Fraction of the portion of the
Capitalization Reimbursement Amount (for the related Loan Group,
if
applicable) for such Distribution Date, if any, related to
each
Discount Mortgage Loan (in the related Loan Group, if
applicable).
Notwithstanding the foregoing, with respect to any Distribution
Date on
and after the Credit Support Depletion Date, the Class A-P
Principal
Distribution Amount (for a Loan Group, if applicable) shall
equal the excess
of (i) the sum of (a) the related Discount Fraction of the
principal portion
of each Monthly Payment on each Discount Mortgage Loan (in the
related Loan
Group, if applicable) received or advanced prior to the related
Determination
Date and not previously distributed minus the Discount Fraction
of the
principal portion of any related Debt Service Reduction which
together with
other Bankruptcy Losses exceeds the Bankruptcy Amount and (b)
the related
Discount Fraction of the aggregate amount of unscheduled
collections
described in clauses (B) and (C) above over (ii) the amount
calculated
pursuant to clause (F) above.
Class A-V Certificate: Any one of the Certificates designated as
a
Class A-V Certificate, including any Subclass thereof.
Class B Certificate: Any one of the Certificates designated as a
Class
B-1 Certificate, Class B-2 Certificate or Class B-3
Certificate.
Class M Certificate: Any one of the Certificates designated as a
Class
M-1 Certificate, Class M-2 Certificate or Class M-3
Certificate.
Class P Certificate: Any one of the Certificates designated as a
Class
P Certificate.
Class SB Certificate: Any one of the Certificates designated as
a
Class SB Certificate.
Class X Certificate: Any one of the Certificates designated as a
Class
X Certificate.
Closing Date: As defined in the Series Supplement.
Code: The Internal Revenue Code of 1986, as amended.
Combined Collateral LLC: Combined Collateral LLC, a Delaware
limited
liability company.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date,
an
amount equal to Prepayment Interest Shortfalls resulting from
Principal
Prepayments in Full during the related Prepayment Period and
Curtailments
during the prior calendar month and included in the Available
Distribution
Amount for such Distribution Date, but not more than the lesser
of (a)
one-twelfth of 0.125% of the Stated Principal Balance of the
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.
Compliance With Laws Representation: The following
representation and
warranty (or any representation and warranty that is
substantially similar)
made by Residential Funding in Section 4 of Assignment
Agreement: "Each
Mortgage Loan at the time it was made complied in all material
respects with
applicable local, state, and federal laws, including, but not
limited to, all
applicable anti-predatory lending laws".
Cooperative: A private, cooperative housing corporation which
owns or
leases land and all or part of a building or buildings,
including apartments,
spaces used for commercial purposes and common areas therein and
whose board
of directors authorizes, among other things, the sale of
Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling
building
owned or leased by a Cooperative, which unit the Mortgagor has
an exclusive
right to occupy pursuant to the terms of a proprietary lease or
occupancy
agreement.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary
lease or occupancy agreement with respect to the Cooperative
Apartment
occupied by the Mortgagor and relating to the related
Cooperative Stock,
which lease or agreement confers an exclusive right to the
holder of such
Cooperative Stock to occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of
a
Cooperative Apartment, evidenced by a Mortgage Note and secured
by (i) a
Security Agreement, (ii) the related Cooperative Stock
Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements
and (v) a
stock power (or other similar instrument), and ancillary
thereto, a
recognition agreement between the Cooperative and the originator
of the
Cooperative Loan, each of which was transferred and assigned to
the Trustee
pursuant to Section 2.01 and are from time to time held as part
of the Trust
Fund.
Cooperative Stock: With respect to a Cooperative Loan, the
single
outstanding class of stock, partnership interest or other
ownership
instrument in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative
Loan, the
stock certificate or other instrument evidencing the related
Cooperative
Stock.
Credit Repository: Equifax, Transunion and Experian, or
their
successors in interest.
Credit Support Depletion Date: The first Distribution Date on
which
the Certificate Principal Balances of the Subordinate
Certificates have been
reduced to zero.
Credit Support Pledge Agreement: The Credit Support Pledge
Agreement,
dated as of November 24, 1998, among the Master Servicer, GMAC
Mortgage, LLC,
Combined Collateral LLC and The First National Bank of Chicago
(now known as
Bank One, National Association), as custodian.
Cumulative Insurance Payments: As defined in the Series
Supplement.
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
Company, the Master Servicer, the Trustee and a Custodian
pursuant to which
the Custodian will hold certain documents relating to the
Mortgage Loans on
behalf of the Trustee.
Custodial File: Any mortgage loan document in the Mortgage File
that
is required to be delivered to the Trustee or Custodian pursuant
to Section
2.01(b) of this Agreement.
Custodian: A custodian appointed pursuant to a Custodial
Agreement.
Cut-off Date Principal Balance: As 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 during
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.
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 Certificate other than a
Book-Entry
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 last
business day immediately prior to 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 last
business day immediately prior to 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 July 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.
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 Securities Exchange Act of 1934, as
amended.
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.
Destroyed Obligation to Pay: An Obligation to Pay the original
of
which was permanently lost or destroyed and has not been
replaced.
Determination Date: As defined in the Series Supplement.
Discount Fraction: With respect to each Discount Mortgage Loan,
the
fraction expressed as a percentage, the numerator of which is
the Discount
Net Mortgage Rate minus the Net Mortgage Rate (or the initial
Net Mortgage
Rate with respect to any Discount Mortgage Loans as to which the
Mortgage
Rate is modified pursuant to 3.07(a)) for such Mortgage Loan and
the
denominator of which is the Discount Net Mortgage Rate. The
Discount
Fraction with respect to each Discount Mortgage Loan is set
forth as an
exhibit attached to the Series Supplement.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage
Rate
(or the initial Net Mortgage Rate) of less than the Discount Net
Mortgage
Rate per annum and any Mortgage Loan deemed to be a Discount
Mortgage Loan
pursuant to the definition of Qualified Substitute Mortgage
Loan.
Discount Net Mortgage Rate: As defined in the Series
Supplement.
Disqualified Organization: Any organization defined as a
"disqualified
organization" under Section 860E(e)(5) of the Code, and 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), (iv) rural electric and
telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v)
any
"electing large partnership," as defined in Section 775(a) of
the Code and
(vi) 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 the Trust Fund 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 the
month
immediately following the month of the initial issuance of the
Certificates
or, if such 25th day is not a Business Day, the Business Day
immediately
following such 25th day.
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
one-month
period set forth in the Series Supplement.
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 the Trustee, or (iv) in the case
of the
Certificate Account, a trust account or accounts maintained in
the corporate
trust department of the Trustee, 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).
Event of Default: As defined in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof,
which
exceeds the then applicable Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which
exceeds
the then applicable Fraud Loss Amount.
Excess Special Hazard Loss: Any Special Hazard Loss, or
portion
thereof, that exceeds the then applicable Special Hazard
Amount.
Excess Subordinate Principal Amount: With respect to any
Distribution
Date on which the aggregate Certificate Principal Balance of the
Class of
Subordinate Certificates then outstanding with the Lowest
Priority is to be
reduced to zero and on which Realized Losses are to be allocated
to such
class or classes, the excess, if any, of (i) the amount that
would otherwise
be distributable in respect of principal on such class or
classes of
Certificates on such Distribution Date over (ii) the excess, if
any, of the
aggregate Certificate Principal Balance of such class or classes
of
Certificates immediately prior to such Distribution Date over
the aggregate
amount of Realized Losses to be allocated to such classes of
Certificates on
such Distribution Date as reduced by any amount calculated
pursuant to clause
(E) of the definition of Class A-P Principal Distribution
Amount. With
respect to any Mortgage Pool that is comprised of two or more
Loan Groups,
the Excess Subordinate Principal Amount will be allocated
between each Loan
Group on a pro rata basis in accordance with the amount of
Realized Losses
attributable to each Loan Group and allocated to the
Certificates on such
Distribution Date.
Exchange Act: The Securities and Exchange Act of 1934, as
amended.
Extraordinary Events: Any of the following conditions with
respect to
a Mortgaged Property (or, with respect to a Cooperative Loan,
the Cooperative
Apartment) or Mortgage Loan causing or resulting in a loss which
causes the
liquidation of such Mortgage Loan:
(a) losses that are of the type that would be covered by the
fidelity bond
and the errors and omissions insurance policy required to be
maintained
pursuant to Section 3.12(b) but are in excess of the
coverage
maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all
whether controlled or uncontrolled, and whether such loss be
direct or
indirect, proximate or remote or be in whole or in part caused
by,
contributed to or aggravated by a peril covered by the
definition of
the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war, including
action in
hindering, combating or defending against an actual, impending
or
expected attack:
1. by any government or sovereign power, de jure or de facto, or
by
any authority maintaining or using military, naval or air
forces;
or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(d) any weapon of war employing atomic fission or radioactive
force whether
in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped
power or action
taken by governmental authority in hindering, combating or
defending
against such an occurrence, seizure or destruction under
quarantine or
customs regulations, confiscation by order of any government or
public
authority; or risks of contraband or illegal transportation or
trade.
Extraordinary Losses: Any loss incurred on a Mortgage Loan
caused by
or resulting from an Extraordinary Event.
Fannie Mae: Federal National Mortgage Association, 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.
Fitch: Fitch Ratings or its successor in interest.
Foreclosure Profits: As 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).
Fraud Losses: Realized Losses on Mortgage Loans as to which
there was
fraud in the origination of such Mortgage Loan.
Freddie Mac: Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States created and existing under
Title III of
the Emergency Home Finance Act of 1970, as amended, or any
successor thereto.
Highest Priority: As of any date of determination, the Class
of
Subordinate Certificates then outstanding with a Certificate
Principal
Balance greater than zero, with the earliest priority for
payments pursuant
to Section 4.02(a), in the following order: Class M-1, Class
M-2, Class M-3,
Class B-1, Class B-2 and Class B-3 Certificates.
Independent: When used with respect to any specified Person,
means
such a Person who (i) is in fact independent of the Company, 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
Company, the Master Servicer or the Trustee or in an Affiliate
thereof, and
(iii) is not connected with the Company, the Master Servicer or
the Trustee
as an officer, employee, promoter, underwriter, trustee,
partner, director or
person performing similar functions.
Initial Certificate Principal Balance: With respect to each
Class of
Certificates, the Certificate Principal Balance of such Class of
Certificates
as of the Cut-off Date, as set forth in the Series
Supplement.
Initial Monthly Payment Fund: An amount representing
scheduled
principal amortization and interest at the Net Mortgage Rate for
the Due Date
in the first Due Period commencing subsequent to the Cut-off
Date for those
Mortgage Loans for which the Trustee will not be entitled to
receive such
payment, and as more specifically defined in the Series
Supplement.
Initial Notional Amount: With respect to any Class or Subclass
of
Interest Only Certificates, the amount initially used as the
principal basis
for the calculation of any interest payment amount, as more
specifically
defined in the Series Supplement.
Initial Subordinate Class Percentage: As defined in the
Series
Supplement.
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 (excluding any Certificate
Policy (as defined
in the Series Supplement)), 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, with respect to a Cooperative Loan, the related
Cooperative
Apartment) 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.
Insurer: Any named insurer under any Primary Insurance Policy or
any
successor thereto or the named insurer in any replacement
policy.
Interest Accrual Period: As defined in the Series
Supplement.
Interest Only Certificates: A Class or Subclass of Certificates
not
entitled to payments of principal, and designated as such in the
Series
Supplement. The Interest Only Certificates will have no
Certificate Principal
Balance.
Interim Certification: As defined in Section 2.02.
International Borrower: In connection with any Mortgage Loan,
a
borrower who is (a) a United States citizen employed in a
foreign country,
(b) a non-permanent resident alien employed in the United States
or (c) a
citizen of a country other than the United States with income
derived from
sources outside the United States.
Junior Certificateholder: The Holder of not less than 95% of
the
Percentage Interests of the Junior Class of Certificates.
Junior Class of Certificates: The Class of Subordinate
Certificates
outstanding as of the date of the repurchase of a Mortgage Loan
pursuant to
Section 4.07 herein that has the Lowest Priority.
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.
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.
Loan Group: Any group of Mortgage Loans designated as a separate
loan
group in the Series Supplement. The Certificates relating to
each Loan Group
will be designated in the Series Supplement.
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.
Lower Priority: As of any date of determination and any Class
of
Subordinate Certificates, any other Class of Subordinate
Certificates then
outstanding with a later priority for payments pursuant to
Section 4.02 (a).
Lowest Priority: As of any date of determination, the Class
of
Subordinate Certificates then outstanding with a Certificate
Principal
Balance greater than zero, with the latest priority for payments
pursuant to
Section 4.02(a), in the following order: Class B-3, Class B-2,
Class B-1,
Class M-3, Class M-2 and Class M-1 Certificates.
Maturity Date: 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 Class of Certificates
(other than the
Interest Only Certificates which have no Certificate Principal
Balance) and
each Uncertificated REMIC Regular Interest would be reduced to
zero, as
designated in the Series Supplement.
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.
MLCC: Merrill Lynch Credit Corporation, or its successor in
interest.
Modified Mortgage Loan: Any Mortgage Loan that has been the
subject of
a Servicing Modification.
Modified Net Mortgage Rate: As 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 any Due Date, 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 successor in
interest.
Mortgage: With respect to each Mortgage Note related to a
Mortgage
Loan which is not a Cooperative Loan, the mortgage, deed of
trust or other
comparable instrument creating a first lien on an estate in fee
simple or
leasehold interest in real property securing a Mortgage Note.
With respect
to each Obligation to Pay related to a Sharia Mortgage Loan, the
Sharia
Mortgage Loan Security Instrument.
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, including any
Sharia
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, (i)
with respect to each Cooperative Loan, the related Mortgage
Note, Security
Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate,
Cooperative Lease and Mortgage File and all rights appertaining
thereto, (ii)
with respect to each Sharia Mortgage Loan, the related
Obligation to Pay,
Sharia Mortgage Loan Security Instrument, Sharia Mortgage Loan
Co-Ownership
Agreement, Assignment Agreement and Amendment of Security
Instrument and
Mortgage File and all rights appertaining thereto and (iii) with
respect to
each Mortgage Loan other than a Cooperative Loan or a Sharia
Mortgage Loan,
each related Mortgage Note, Mortgage and Mortgage File and all
rights
appertaining thereto.
Mortgage Loan Schedule: As defined in the Series Supplement.
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. With respect to
each Sharia
Mortgage Loan, the related Obligation to Pay.
Mortgage Pool: The pool of mortgage loans, including all Loan
Groups,
if any, consisting of the Mortgage Loans.
Mortgage Rate: As to any Mortgage Loan, the interest rate borne
by the
related Mortgage Note, or any modification thereto other than a
Servicing
Modification. As to any Sharia Mortgage Loan, the profit factor
described in
the related Obligation to Pay, or any modification thereto other
than a
Servicing Modification.
Mortgaged Property: The underlying real property securing a
Mortgage
Loan or, with respect to a Cooperative Loan, the related
Cooperative Lease
and Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note, or with respect to a
Sharia
Mortgage Loan, the consumer on an Obligation to Pay.
Net Mortgage Rate: As to each Mortgage Loan, a per annum rate
of
interest equal to the Adjusted Mortgage Rate less the per annum
rate at which
the Servicing Fee is calculated.
Non-Discount Mortgage Loan: A Mortgage Loan that is not a
Discount
Mortgage Loan.
Non-Primary Residence Loans: The Mortgage Loans designated as
secured
by second or vacation residences, or by non-owner occupied
residences, on the
Mortgage Loan Schedule.
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, REO
Proceeds or
amounts reimbursable to the Master Servicer pursuant to Section
4.02(a)
hereof. 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 or
that any
proposed Advance would constitute a Nonrecoverable Advance,
shall be
evidenced by an Officers' Certificate delivered to the Company,
the Trustee
and any Certificate Insurer.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the
time of
reference thereto, is not subject to a Subservicing
Agreement.
Notional Amount: With respect to any Class or Subclass of
Interest Only
Certificates, an amount used as the principal basis for the
calculation of
any interest payment amount, as more specifically defined in the
Series
Supplement.
Obligation to Pay: The originally executed obligation to pay
or
similar agreement evidencing the obligation of the consumer
under a Sharia
Mortgage Loan, together with any modification thereto.
Officers' Certificate: A certificate signed by the Chairman of
the
Board, the President or a Vice President or Assistant Vice
President, or a
Director or Managing Director, and by the Treasurer, the
Secretary, or one of
the Assistant Treasurers or Assistant Secretaries of the Company
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
Company 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 formed under the Series Supplement or
compliance
with the REMIC Provisions must, unless otherwise specified, be
an opinion of
Independent counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage
Loan
(including an REO Property) which was not the subject of a
Principal
Prepayment in Full, Cash Liquidation or REO Disposition and
which was not
purchased, deleted or substituted for prior to such Due Date
pursuant to
Section 2.02, 2.03, 2.04 or 4.07.
Ownership Interest: As 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: As defined in the Series Supplement.
Paying Agent: The Trustee or any successor Paying Agent
appointed by
the Trustee.
Percentage Interest: With respect to any Certificate (other than
a
Class R 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
or Initial Notional Amount (in the case of any Interest Only
Certificate)
thereof divided by the aggregate Initial Certificate Principal
Balance or the
aggregate of the Initial Notional Amounts, as applicable, of all
the
Certificates of the same Class. With respect to a Class R
Certificate, the
interest in distributions to be made with respect to such Class
evidenced
thereby, expressed as a percentage, as stated on the face of
each such
Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to timely payment of
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 short-term debt 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 shall have a
remaining
maturity of not more than 30 days;
(v) any mutual fund, money market fund, common trust fund or
other pooled
investment vehicle, the assets of which are limited to
instruments that
otherwise would constitute Permitted Investments hereunder and
have
been rated by each Rating Agency in its highest short-term
rating
available (in the case of Standard & Poor's such rating
shall be either
AAAm or AAAm-G), including any such fund that is managed by the
Trustee
or any affiliate of the Trustee or for which the Trustee or any
of its
affiliates acts as an adviser; 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
(without giving effect to any Certificate Policy (as defined in
the
Series Supplement) in the case of Insured Certificates (as
defined in
the Series Supplement) below the lower of the then-current
rating
assigned to such Certificates by such Rating Agency, as
evidenced in
writing;
provided, however, 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 and 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,
P-1 in the case of
Moody's and F-1 in the case of Fitch; 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 held 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.
Pledged Amount: With respect to any Pledged Asset Loan, the
amount of
money remitted to Combined Collateral LLC, at the direction of
or for the
benefit of the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged
Assets or
such other collateral, other than the related Mortgaged
Property, set forth
in the Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all
money,
securities, security entitlements, accounts, general
intangibles, payment
intangibles, instruments, documents, deposit accounts,
certificates of
deposit, commodities contracts and other investment property and
other
property of whatever kind or description pledged by Combined
Collateral LLC
as security in respect of any Realized Losses in connection with
such
Mortgage Loan up to the Pledged Amount for such Mortgage Loan,
and any
related collateral, or such other collateral as may be set forth
in the
Series Supplement.
Pledged Asset Mortgage Servicing Agreement: The Pledged Asset
Mortgage
Servicing Agreement, dated as of February 28, 1996 between MLCC
and the
Master Servicer.
Pooling and Servicing Agreement or Agreement: With respect to
any
Series, this Standard Terms together with the related Series
Supplement.
Pool Stated Principal Balance: As to any Distribution Date,
the
aggregate of the Stated Principal Balances of each Mortgage
Loan.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum
rate
equal to the excess of (a) the Net Mortgage Rate of such
Mortgage Loan over
(b) the Discount Net Mortgage Rate (but not less than 0.00%) per
annum.
Prepayment Distribution Trigger: With respect to any
Distribution Date
and any Class of Subordinate Certificates (other than the Class
M-1
Certificates), a test that shall be satisfied if the fraction
(expressed as a
percentage) equal to the sum of the Certificate Principal
Balances of such
Class and each Class of Subordinate Certificates with a Lower
Priority than
such Class immediately prior to such Distribution Date divided
by the
aggregate Stated Principal Balance of all of the Mortgage Loans
(or related
REO Properties) immediately prior to such Distribution Date is
greater than
or equal to the sum of the related Initial Subordinate Class
Percentages of
such Classes of Subordinate Certificates.
Prepayment Interest Shortfall: As 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
portion of
the related Prepayment Period that falls during the prior
calendar month, an
amount equal to the excess of one month's interest at the 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 Net Mortgage Rate (or Modified Net
Mortgage Rate in
the case of a Modified Mortgage Loan)) paid by the Mortgagor for
such month
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 Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified
Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: As to any Distribution Date and Principal
Prepayment in Full, the period commencing on the 16th day of the
month prior
to the month in which that Distribution Date occurs and ending
on the 15th
day of the month in which such Distribution Date occurs.
Primary Insurance Policy: Each primary policy of mortgage
guaranty
insurance or any replacement policy therefor referred to in
Section
2.03(b)(iv) and (v).
Principal Only Certificates: A Class of Certificates not
entitled to
payments of interest, and more specifically designated as such
in the Series
Supplement.
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 of the
entire
principal balance of a Mortgage Loan that is made by the
Mortgagor.
Program Guide: Collectively, the Client Guide and the Servicer
Guide
for Residential Funding's Expanded Criteria Mortgage
Program.
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 the
Adjusted
Mortgage Rate (or Modified Net Mortgage Rate plus the rate per
annum at which
the Servicing Fee is calculated in the case of a Modified
Mortgage Loan) (or
at the Net Mortgage Rate (or Modified Net Mortgage Rate in the
case of a
Modified Mortgage Loan) in the case of a purchase made by the
Master
Servicer) on the Stated Principal Balance thereof to the Due
Date in the Due
Period related to the Distribution Date occurring in the month
following the
month of purchase from the Due Date to which interest was last
paid by the
Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted
by
Residential Funding or the Company for a Deleted Mortgage Loan
which must, on
the date of such substitution, as confirmed in an Officers'
Certificate
delivered to the Trustee, with a copy to the Custodian,
(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; and
(vi) have a Pool Strip Rate equal to or greater than that of
the
Deleted Mortgage Loan.
Notwithstanding any other provisions herein, (x) with respect to
any
Qualified Substitute Mortgage Loan substituted for a Deleted
Mortgage Loan
which was a Discount Mortgage Loan, such Qualified Substitute
Mortgage Loan
shall be deemed to be a Discount Mortgage Loan and to have a
Discount
Fraction equal to the Discount Fraction of the Deleted Mortgage
Loan and (y)
in the event that the "Pool Strip Rate" of any Qualified
Substitute Mortgage
Loan as calculated pursuant to the definition of "Pool Strip
Rate" is greater
than the Pool Strip Rate of the related Deleted Mortgage
Loan
(i) the Pool Strip Rate of such Qualified Substitute Mortgage
Loan
shall be equal to the Pool Strip Rate of the related Deleted
Mortgage Loan for purposes of calculating the Pass-Through
Rate
on the Class A-V Certificates and
(ii) the excess of the Pool Strip Rate on such Qualified
Substitute
Mortgage Loan as calculated pursuant to the definition of
"Pool
Strip Rate" over the Pool Strip Rate on the related Deleted
Mortgage Loan shall be payable to the Class R Certificates
pursuant to Section 4.02 hereof.
Rating Agency: Each of the statistical credit rating
agencies
specified in the Preliminary Statement of the Series Supplement.
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 Company, 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):
(a) 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 Due Date in the Due Period
related
to the Distribution Date on which such Realized Loss will be
allocated pursuant to Section 4.05 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,
(b) which is the subject of a Servicing Modification, (i) (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
(ii)
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,
(c) 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, or
(d) 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.
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, the close
of
business on the last Business Day of the month next preceding
the month in
which the related Distribution Date occurs.
Regular Certificate: Any of the Certificates other than a Class
R
Certificate.
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.
Reimbursement Amounts: As defined in Section 3.22.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of Section 860D of the Code.
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 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: As to any REO Property, a determination by the
Master
Servicer that it has received 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: As to any REO Property, for any period,
an
amount equivalent to interest (at 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 or, with respect to a Cooperative
Loan, the
related Cooperative Apartment) 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
through foreclosure or deed in lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i)
has been
subject to an interest rate reduction, (ii) has been subject to
a term
extension or (iii) 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 clause
(i) 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.
Request for Release: A request for release, the forms of which
are
attached as Exhibit F 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 Surety Payment: With respect to any Additional
Collateral
Loan that becomes a Liquidated Mortgage Loan, the lesser of (i)
the principal
portion of the Realized Loss with respect to such Mortgage Loan
and (ii) the
excess, if any, of (a) the amount of Additional Collateral
required at
origination with respect to such Mortgage Loan over (b) the net
proceeds
realized by the Subservicer from the related Additional
Collateral.
Residential Funding: Residential Funding Company, LLC, a
Delaware
limited liability company, in its capacity as seller of the
Mortgage Loans to
the Company 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 customarily performing functions
similar to
those performed by any of the above designated officers to whom,
with respect
to a particular matter, such matter is referred, in each case
with direct
responsibility for the administration of the Agreement.
Retail Certificates: A Senior Certificate, if any, offered in
smaller
minimum denominations than other Senior Certificates, and
designated as such
in the Series Supplement.
Schedule of Discount Fractions: The schedule setting forth
the
Discount Fractions with respect to the Discount Mortgage Loans,
attached as
an exhibit to the Series Supplement.
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.
Security Agreement: With respect to a Cooperative Loan, the
agreement
creating a security interest in favor of the originator in the
related
Cooperative Stock.
Seller: As 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 Company, each containing
representations and
warranties in respect of one or more Mortgage Loans consistent
in all
material respects with those set forth in the Program Guide.
Senior Accelerated Distribution Percentage: With respect to
any
Distribution Date occurring on or prior to the 60th Distribution
Date and,
with respect to any Mortgage Pool comprised of two or more Loan
Groups, any
Loan Group, 100%. With respect to any Distribution Date
thereafter and any
such Loan Group, if applicable, as follows:
(i) for any Distribution Date after the 60th Distribution Date
but on or
prior to the 72nd Distribution Date, the related Senior
Percentage for
such Distribution Date plus 70% of the related Subordinate
Percentage
for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date
but on or
prior to the 84th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 60% of the related Subordinate
Percentage
for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date
but on or
prior to the 96th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 40% of the related Subordinate
Percentage
for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date
but on or
prior to the 108th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 20% of the related Subordinate
Percentage
for such Distribution Date; and
(v) for any Distribution Date thereafter, the Senior Percentage
for such
Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated
Distribution
Percentage described above shall not occur as of any
Distribution Date unless
either
(a)(1)(X) the outstanding principal balance of the Mortgage
Loans
delinquent 60 days or more (including Mortgage Loans which are
in
foreclosure, have been foreclosed or otherwise liquidated, or
with
respect to which the Mortgagor is in bankruptcy and any REO
Property)
averaged over the last six months, as a percentage of the
aggregate
outstanding Certificate Principal Balance of the Subordinate
Certificates, is less than 50% or (Y) the outstanding principal
balance
of Mortgage Loans delinquent 60 days or more (including Mortgage
Loans
which are in foreclosure, have been foreclosed or otherwise
liquidated,
or with respect to which the Mortgagor is in bankruptcy and any
REO
Property) averaged over the last six months, as a percentage of
the
aggregate outstanding principal balance of all Mortgage Loans
averaged
over the last six months, does not exceed 2% and (2) Realized
Losses on
the Mortgage Loans to date for such Distribution Date if
occurring
during the sixth, seventh, eighth, ninth or tenth year (or any
year
thereafter) after the Closing Date are less than 30%, 35%, 40%,
45% or
50%, respectively, of the sum of the Initial Certificate
Principal
Balances of the Subordinate Certificates or
(b)(1) the outstanding principal balance of Mortgage Loans
delinquent 60 days or more (including Mortgage Loans which are
in
foreclosure, have been foreclosed or otherwise liquidated, or
with
respect to which the Mortgagor is in bankruptcy and any REO
Property)
averaged over the last six months, as a percentage of the
aggregate
outstanding principal balance of all Mortgage Loans averaged
over the
last six months, does not exceed 4% and (2) Realized Losses on
the
Mortgage Loans to date for such Distribution Date, if occurring
during
the sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the Closing Date are less than 10%, 15%, 20%,
25% or
30%, respectively, of the sum of the Initial Certificate
Principal
Balances of the Subordinate Certificates, and
(ii) that for any Distribution Date on which the Senior
Percentage is
greater than the Senior Percentage as of the Closing Date, the
Senior
Accelerated Distribution Percentage for such Distribution Date
shall be 100%,
or, if the Mortgage Pool is comprised of two or more Loan
Groups, for any
Distribution Date on which the weighted average of the Senior
Percentages for
each Loan Group, weighted on the basis of the Stated Principal
Balances of
the Mortgage Loans in the related Loan Group (excluding the
Discount Fraction
of the Discount Mortgage Loans in such Loan Group) exceeds the
weighted
average of the initial Senior Percentages (calculated on such
basis) for each
Loan Group, each of the Senior Accelerated Distribution
Percentages for such
Distribution Date will equal 100%.
Notwithstanding the foregoing, upon the reduction of the
Certificate
Principal Balances of the related Senior Certificates (other
than the Class
A-P Certificates, if any) to zero, the related Senior
Accelerated
Distribution Percentage shall thereafter be 0%.
Senior Certificate: As defined in the Series Supplement.
Senior Percentage: As defined in the Series Supplement.
Senior Support Certificate: A Senior Certificate that
provides
additional credit enhancement to certain other classes of Senior
Certificates
and designated as such in the Preliminary Statement of the
Series Supplement.
Series: All of the Certificates issued pursuant to a Pooling
and
Servicing Agreement and bearing the same series designation.
Series Supplement: The agreement into which this Standard Terms
is
incorporated and pursuant to which, together with this Standard
Terms, a
Series of Certificates is issued.
Servicing Accounts: The account or accounts created and
maintained
pursuant to Section 3.08.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d)
of Regulation AB, as such may be amended from time to time.
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
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 Advance Reimbursement Amounts: As defined in Section
3.22.
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 designated
on the
Mortgage Loan Schedule as the "MSTR SERV FEE" for such Mortgage
Loan, as may
be adjusted with respect to successor Master Servicers as
provided in Section
7.02.
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
outstanding
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, as such list may from
time to time be
amended.
Sharia Mortgage Loan: A declining balance co-ownership
transaction,
structured so as to comply with Islamic religious law.
Sharia Mortgage Loan Co-Ownership Agreement: The agreement that
defines
the relationship between the consumer and co-owner and the
parties'
respective rights under a Sharia Mortgage Loan, including their
respective
rights with respect to the indicia of ownership of the related
Mortgaged
Property.
Sharia Mortgage Loan Security Instrument: The mortgage,
security
instrument or other comparable instrument creating a first lien
on an estate
in fee simple or leasehold interest in real property securing an
Obligation
to Pay.
Special Hazard Loss: Any Realized Loss not in excess of the cost
of
the lesser of repair or replacement of a Mortgaged Property (or,
with respect
to a Cooperative Loan, the related Cooperative Apartment)
suffered by such
Mortgaged Property (or Cooperative Apartment) on account of
direct physical
loss, exclusive of (i) any loss of a type covered by a hazard
policy or a
flood insurance policy required to be maintained in respect of
such Mortgaged
Property pursuant to Section 3.12(a), except to the extent of
the portion of
such loss not covered as a result of any coinsurance provision
and (ii) any
Extraordinary Loss.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies, Inc., or its successor in
interest.
Stated Principal Balance: With respect to any Mortgage Loan or
related
REO Property, as of any Distribution Date, (i) the sum of (a)
the Cut-off
Date Principal Balance of the Mortgage Loan plus (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 related to the
previous
Distribution Date which were received or with respect to which
an Advance was
made, and (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
allocated to
Certificateholders with respect thereto for any previous
Distribution Date.
Subclass: With respect to the Class A-V Certificates, any
Subclass
thereof issued pursuant to Section 5.01(c). Any such Subclass
will represent
the Uncertificated Class A-V REMIC Regular Interest or Interests
specified by
the initial Holder of the Class A-V Certificates pursuant to
Section 5.01(c).
Subordinate Certificate: Any one of the Class M Certificates or
Class
B Certificates, executed by the Trustee and authenticated by the
Certificate
Registrar substantially in the form annexed hereto as Exhibit B
and Exhibit
C, respectively.
Subordinate Class Percentage: With respect to any Distribution
Date
and any Class of Subordinate Certificates, a fraction, expressed
as a
percentage, the numerator of which is the aggregate Certificate
Principal
Balance of such Class of Subordinate Certificates immediately
prior to such
date and the denominator of which is the aggregate Stated
Principal Balance
of all of the Mortgage Loans (or related REO Properties) (other
than the
related Discount Fraction of each Discount Mortgage Loan)
immediately prior
to such Distribution Date.
Subordinate Percentage: As of any Distribution Date and, with
respect
to any Mortgage Pool comprised of two or more Loan Groups, any
Loan Group,
100% minus the related Senior Percentage as of such Distribution
Date.
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 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 Company.
With respect to Additional Collateral Loans subserviced by MLCC,
the
Subservicing Agreement shall also include the Addendum and
Assignment
Agreement and the Pledged Asset Mortgage Servicing Agreement.
With respect to
any Pledged Asset Loan subserviced by GMAC Mortgage, LLC, the
Addendum and
Assignment Agreement, dated as of November 24, 1998, between the
Master
Servicer and GMAC Mortgage, LLC, as such agreement may be
amended from time
to time.
Subservicing Fee: As 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 at an annual rate equal to the excess of the
Mortgage Rate borne
by the related Mortgage Note over the rate per annum designated
on the
Mortgage Loan Schedule as the "CURR NET" for such Mortgage
Loan.
Successor Master Servicer: As defined in Section 3.22.
Surety: Ambac, or its successors in interest, or such other
surety as
may be identified in the Series Supplement.
Surety Bond: The Limited Purpose Surety Bond (Policy No.
AB0039BE),
dated February 28, 1996 in respect to Mortgage Loans originated
by MLCC, or
the Surety Bond (Policy No. AB0240BE), dated March 17, 1999 in
respect to
Mortgage Loans originated by Novus Financial Corporation, in
each case issued
by Ambac for the benefit of certain beneficiaries, including the
Trustee for
the benefit of the Holders of the Certificates, but only to the
extent that
such Surety Bond covers any Additional Collateral Loans, or such
other Surety
Bond as may be identified in the Series Supplement.
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 formed under the Series Supplement
and 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.
Transaction Party: As defined in Section 12.02(a).
Transfer: Any direct or indirect transfer, sale, pledge,
hypothecation
or other form of assignment of any Ownership Interest in a
Certificate.
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.
Trust Fund: The segregated pool of assets related to a Series,
with
respect to which one or more REMIC elections are to be made
pursuant to this
Agreement, consisting of:
(i) the Mortgage Loans and the related Mortgage Files and
collateral
securing such Mortgage Loans,
(ii) all payments on and collections in respect of the Mortgage
Loans due
after 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, including the proceeds from the liquidation of
Additional
Collateral for any Additional Collateral Loan or Pledged Assets
for any
Pledged Asset Loan, but not including amounts on deposit in the
Initial
Monthly Payment Fund,
(iii) property that secured a Mortgage Loan and that 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, if any,
the Pledged Assets with respect to each Pledged Asset Loan, and
the
interest in the Surety Bond transferred to the Trustee pursuant
to
Section 2.01, and
(v) all proceeds of clauses (i) through (iv) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
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 or U.S. Person: (i) A citizen or resident
of the
United States, (ii) a corporation, partnership or other entity
treated as a
corporation or partnership for United States federal income tax
purposes
organized in or under the laws of the United States or any state
thereof or
the District of Columbia (unless, in the case of a partnership,
Treasury
regulations provide otherwise), provided that, for purposes
solely of the
restrictions on the transfer of residual interests, no
partnership or other
entity treated as a partnership for United States federal income
tax purposes
shall be treated as a United States Person or U.S. Person unless
all persons
that own an interest in such partnership either directly or
indirectly
through any chain of entities no one of which is a corporation
for United
States federal income tax purposes are required by the
applicable operating
agreement to be United States Persons, (iii) an estate the
income of which
is includible in gross income for United States tax purposes,
regardless of
its source, or (iv) a trust if a court within the United States
is able to
exercise primary supervision over the administration of the
trust and one or
more United States persons have authority to control all
substantial
decisions of the trust. Notwithstanding the preceding sentence,
to the
extent provided in Treasury regulations, certain Trusts in
existence on
August 20, 1996, and treated as United States persons prior to
such date,
that elect to continue to be treated as United States persons
will also be a
U.S. Person.
U.S.A. Patriot Act: Uniting and Strengthening America by
Providing
Appropriate Tools to Intercept and Obstruct Terrorism Act of
2001, as amended.
Voting Rights: The portion of the voting rights of all of
the
Certificates which is allocated to any Certificate, and more
specifically
designated in Article XI of the Series Supplement.
Section 1.02 Use of Words and Phrases.
"Herein," "hereby," "hereunder," `hereof," "hereinbefore,"
"hereinafter" and other equivalent words refer to the Pooling
and Servicing
Agreement as a whole. All references herein to Articles,
Sections or
Subsections shall mean the corresponding Articles, Sections and
Subsections
in the Pooling and Servicing Agreement. The definitions set
forth herein
include both the singular and the plural.
References in the Pooling and Servicing Agreement to "interest"
on and
"principal" of the Mortgage Loans shall mean, with respect to
the Sharia
Mortgage Loans, amounts in respect profit payments and
acquisition payments,
respectively.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery
hereof, does
hereby assign to the Trustee for the benefit of the
Certificateholders
without recourse all the right, title and interest of the
Company in and to
the Mortgage Loans, including all interest and principal
received on or with
respect to the Mortgage Loans after the Cut-off Date (other than
payments of
principal and interest due on the Mortgage Loans in the month of
the Cut-off
Date). In connection with such transfer and assignment, the
Company does
hereby deliver to the Trustee the Certificate Policy (as defined
in the
Series Supplement), if any for the benefit of the Holders of the
Insured
Certificates (as defined in the Series Supplement).
(b) In connection with such assignment, except as set forth in
Section
2.01(c) and subject to Section 2.01(d) below, the Company does
hereby (1)
with respect to each Mortgage Loan (other than a Cooperative
Loan or a Sharia
Mortgage Loan), deliver to the Master Servicer (or an Affiliate
of the Master
Servicer) each of the documents or instruments described in
clause (I)(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 on behalf of the
Trustee, the
documents or instruments described in clauses (I)(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 to
the Custodian on
behalf of the Trustee, the documents or instruments described in
clauses
(I)(i), (iv) and (v) below, (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 to the Custodian on behalf of the
Trustee, the
documents or instruments described in clauses (I)(i), (iii),
(iv) and (v)
below, and (5) with respect to each Cooperative Loan and Sharia
Mortgage
Loan, the documents and instruments described in clause (II) and
clause (III)
below:
(I) with respect to each Mortgage Loan so assigned (other than
a
Cooperative Loan or a Sharia Mortgage Loan):
(i) The original Mortgage Note, endorsed without recourse in
blank or 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 Mortgage with evidence of recording
indicated
thereon;
(iii) The original Assignment 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 thereof 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; and
(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.
(II) with respect to each Cooperative Loan so assigned:
(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) A counterpart of the Cooperative Lease and the Assignment
of
Proprietary Lease to the originator of the Cooperative Loan
with
intervening assignments showing an unbroken chain of title from
such
originator to the Trustee or a copy of such Cooperative Lease
and
Assignment of Proprietary Lease and copies of such
intervening
assignments;
(iii) The related Cooperative Stock Certificate, representing
the related
Cooperative Stock pledged with respect to such Cooperative
Loan,
together with an undated stock power (or other similar
instrument)
executed in blank or copies thereof;
(iv) The original recognition agreement by the Cooperative of
the interests
of the mortgagee with respect to the related Cooperative Loan or
a copy
thereof;
(v) The Security Agreement or a copy thereof;
(vi) Copies of the original UCC-1 financing statement, and any
continuation
statements, filed by the originator of such Cooperative Loan as
secured
party, each with evidence of recording thereof, evidencing the
interest
of the originator under the Security Agreement and the
Assignment of
Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest
referenced in clause (vi) above showing an unbroken chain of
title from
the originator to the Trustee, each with evidence of recording
thereof,
evidencing the interest of the originator under the Security
Agreement
and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator
in the
Security Agreement, Assignment of Proprietary Lease and the
recognition
agreement referenced in clause (iv) above, showing an unbroken
chain of
title from the originator to the Trustee, or a copy thereof;
(ix) The original of each modification, assumption agreement or
preferred
loan agreement, if any, relating to such Cooperative Loan or a
copy of
each modification, assumption agreement or preferred loan
agreement; and
(x) A duly completed UCC-1 financing statement showing the
Master Servicer
as debtor, the Company as secured party and the Trustee as
assignee and
a duly completed UCC-1 financing statement showing the Company
as
debtor and the Trustee as secured party, each in a form
sufficient for
filing, evidencing the interest of such debtors in the
Cooperative
Loans or copies thereof.
(III) with respect to each Sharia Mortgage Loan so assigned:
(i) The original Obligation to Pay, endorsed without
recourse
in blank or 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 Obligation to
Pay, an
original affidavit from the related Seller or Residential
Funding
stating that the original Obligation to Pay was lost, misplaced
or
destroyed, together with a copy of the related Obligation to
Pay;
(ii) The original Sharia Mortgage Loan Security Instrument,
with
evidence of recording indicated thereon or a copy of the
Sharia
Mortgage Loan Security Instrument with evidence of recording
indicated
thereon;
(iii) An original Assignment and Amendment of Security
Instrument, assigned to the Trustee with evidence of
recording
indicated thereon or a copy of such Assignment and Amendment
of
Security Instrument with evidence of recording indicated
thereon;
(iv) The original recorded assignment or assignments of the
Sharia Mortgage Loan Security Instrument showing an unbroken
chain of
title from the originator thereof to the Person assigning it to
the
Trustee with evidence of recordation noted thereon or attached
thereto,
or a copy of such assignment or assignments of the Sharia
Mortgage Loan
Security Instrument with evidence of recording indicated
thereon;
(v) The original Sharia Mortgage Loan Co-Ownership Agreement
with respect to the related Sharia Mortgage Loan or a copy of
such
Sharia Mortgage Loan Co-Ownership Agreement; and
(vi) The original of each modification or assumption
agreement,
if any, relating to such Sharia Mortgage Loan or a copy of
each
modification or assumption agreement.
(c) The Company may, in lieu of delivering the original of the
documents
set forth in Sections 2.01(b)(I)(iii), (iv) and (v), Sections
2.01
(b)(II)(ii), (iv), (vii), (ix) and (x) and Se
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