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EXHIBIT 4
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BANC OF AMERICA MORTGAGE SECURITIES, INC.,
as Depositor,
BANK OF AMERICA, N.A.,
as Servicer,
and
WELLS FARGO BANK, N.A.,
as Trustee
POOLING AND SERVICING AGREEMENT
Dated December 29, 2004
---------------------------
Mortgage Pass-Through Certificates
Series 2004-L
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<PAGE>
TABLE OF CONTENTS
PRELIMINARY
STATEMENT.......................................................
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms.................................................
Section 1.02 Interest
Calculations.........................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage
Loans..................................
Section 2.02 Acceptance by the Trustee of the Mortgage
Loans...............
Section 2.03 Representations, Warranties and Covenants of the
Servicer.....
Section 2.04 Representations and Warranties of the Depositor as
to
the Mortgage
Loans...........................................
Section 2.05 Designation of Interests in the
REMICs........................
Section 2.06 Designation of Start-up
Day...................................
Section 2.07 REMIC Certificate Maturity
Date...............................
Section 2.08 Execution and Delivery of
Certificates........................
Section 2.09 Repurchase of Converted Mortgage
Loans........................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage
Loans............................
Section 3.02 Subservicing; Enforcement of the Obligations of
Servicer......
Section 3.03 Fidelity Bond; Errors and Omissions
Insurance.................
Section 3.04 Access to Certain
Documentation...............................
Section 3.05 Maintenance of Primary Insurance Policy; Claims;
Collections
of BPP Mortgage Loan
Payments................................
Section 3.06 Rights of the Depositor and the Trustee in Respect
of the
Servicer.....................................................
Section 3.07 Trustee to Act as
Servicer....................................
Section 3.08 Collection of Mortgage Loan Payments; Servicer
Custodial
Account and Certificate
Account..............................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow
Accounts.....................................................
Section 3.10 Access to Certain Documentation and Information
Regarding
the Mortgage
Loans...........................................
Section 3.11 Permitted Withdrawals from the Servicer Custodial
Account
and Certificate Account.....................................
Section 3.12 Maintenance of Hazard
Insurance...............................
Section 3.13 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.....
Section 3.14 Realization Upon Defaulted Mortgage Loans; REO
Property.......
Section 3.15 Trustee to Cooperate; Release of Mortgage
Files...............
Section 3.16 Documents, Records and Funds in Possession of the
Servicer
to be Held for the
Trustee...................................
Section 3.17 Servicing
Compensation........................................
Section 3.18 Annual Statement as to
Compliance.............................
Section 3.19 Annual Independent Public Accountants' Servicing
Statement;
Financial
Statements.........................................
Section 3.20
Advances......................................................
Section 3.21 Modifications, Waivers, Amendments and
Consents...............
Section 3.22 Reports to the Securities and Exchange
Commission.............
Section 3.23 Buy-Down Account; Application of Buy-Down
Funds...............
ARTICLE IV
SERVICER'S CERTIFICATE
Section 4.01 Servicer's
Certificate........................................
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01
Distributions.................................................
Section 5.02 Priorities of
Distributions...................................
Section 5.03 Allocation of
Losses..........................................
Section 5.04 Statements to
Certificateholders..............................
Section 5.05 Tax Returns and Reports to
Certificateholders.................
Section 5.06 Tax Matters
Person............................................
Section 5.07 Rights of the Tax Matters Person in Respect of the
Trustee....
Section 5.08 REMIC Related
Covenants.......................................
ARTICLE VI
THE CERTIFICATES
Section 6.01 The
Certificates..............................................
Section 6.02 Registration of Transfer and Exchange of
Certificates.........
Section 6.03 Mutilated, Destroyed, Lost or Stolen
Certificates.............
Section 6.04 Persons Deemed
Owners.........................................
ARTICLE VII
THE DEPOSITOR AND THE SERVICER
Section 7.01 Respective Liabilities of the Depositor and the
Servicer......
Section 7.02 Merger or Consolidation of the Depositor or the
Servicer......
Section 7.03 Limitation on Liability of the Depositor, the
Servicer
and
Others...................................................
Section 7.04 Depositor and Servicer Not to
Resign..........................
ARTICLE VIII
DEFAULT
Section 8.01 Events of
Default.............................................
Section 8.02 Remedies of
Trustee...........................................
Section 8.03 Directions by Certificateholders and Duties of
Trustee
During Event of
Default......................................
Section 8.04 Action upon Certain Failures of the Servicer and
upon
Event of
Default.............................................
Section 8.05 Trustee to Act; Appointment of
Successor......................
Section 8.06 Notification to
Certificateholders............................
ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of
Trustee.............................................
Section 9.02 Certain Matters Affecting the
Trustee.........................
Section 9.03 Trustee Not Liable for Certificates or Mortgage
Loans.........
Section 9.04 Trustee May Own
Certificates..................................
Section 9.05 Eligibility Requirements for
Trustee..........................
Section 9.06 Resignation and Removal of
Trustee............................
Section 9.07 Successor
Trustee.............................................
Section 9.08 Merger or Consolidation of
Trustee............................
Section 9.09 Appointment of Co-Trustee or Separate
Trustee.................
Section 9.10 Authenticating
Agents.........................................
Section 9.11 Trustee's Fees and
Expenses...................................
Section 9.12 Appointment of
Custodian......................................
Section 9.13 Paying
Agents.................................................
Section 9.14 Limitation of
Liability.......................................
Section 9.15 Trustee May Enforce Claims Without Possession of
Certificates.
Section 9.16 Suits for
Enforcement.........................................
Section 9.17 Waiver of Bond
Requirement....................................
Section 9.18 Waiver of Inventory, Accounting and Appraisal
Requirement.....
ARTICLE X
TERMINATION
Section 10.01 Termination upon Purchase by the Depositor or
Liquidation
of All Mortgage
Loans........................................
Section 10.02 Additional Termination
Requirements...........................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment.....................................................
Section 11.02 Recordation of
Agreement......................................
Section 11.03 Limitation on Rights of
Certificateholders....................
Section 11.04 Governing
Law.................................................
Section 11.05
Notices.......................................................
Section 11.06 Severability of
Provisions....................................
Section 11.07 Certificates Nonassessable and Fully
Paid.....................
Section 11.08 Access to List of
Certificateholders..........................
Section 11.09
Recharacterization............................................
EXHIBITS
Exhibit A-1-A-1 - Form of Face of Class 1-A-1 Certificate
Exhibit A-1-A-R - Form of Face of Class 1-A-R Certificate
Exhibit A-1-A-LR - Form of Face of Class 1-A-LR Certificate
Exhibit A-2-A-1 - Form of Face of Class 2-A-1 Certificate
Exhibit A-3-A-1 - Form of Face of Class 3-A-1 Certificate
Exhibit A-4-A-1 - Form of Face of Class 4-A-1 Certificate
Exhibit A-1-IO - Form of Face of Class 1-IO Certificate
Exhibit A-2-IO - Form of Face of Class 2-IO Certificate
Exhibit A-3-IO - Form of Face of Class 3-IO Certificate
Exhibit A-4-IO - Form of Face of Class 4-IO Certificate
Exhibit B-1 - Form of Face of Class B-1 Certificate
Exhibit B-2 - Form of Face of Class B-2 Certificate
Exhibit B-3 - Form of Face of Class B-3 Certificate
Exhibit B-4 - Form of Face of Class B-4 Certificate
Exhibit B-5 - Form of Face of Class B-5 Certificate
Exhibit B-6 - Form of Face of Class B-6 Certificate
Exhibit C - Form of Reverse of all Certificates
Exhibit D-1 - Mortgage Loan Schedule (Loan Group 1)
Exhibit D-2 - Mortgage Loan Schedule (Loan Group 2)
Exhibit D-3 - Mortgage Loan Schedule (Loan Group 3)
Exhibit D-4 - Mortgage Loan Schedule (Loan Group 4)
Exhibit E - Request for Release of Documents
Exhibit F - Form of Certification of Establishment of
Account
Exhibit G-1 - Form of Transferor's Certificate
Exhibit G-2A - Form 1 of Transferee's Certificate
Exhibit G-2B - Form 2 of Transferee's Certificate
Exhibit H - Form of Transferee Representation Letter for
ERISA
Restricted Certificates
Exhibit I - Form of Affidavit Regarding Transfer of Residual
Certificates
Exhibit J - Contents of Servicing File
Exhibit K - Form of Special Servicing Agreement
Exhibit L - List of Recordation States
Exhibit M - Form of Initial Certification
Exhibit N - Form of Final Certification
Exhibit O - Form of Certification
Exhibit P - Form of Trustee's Certification
<PAGE>
POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated December 29, 2004,
is
hereby executed by and among BANC OF AMERICA MORTGAGE
SECURITIES, INC., as
depositor (together with its permitted successors and assigns,
the "Depositor"),
BANK OF AMERICA, N.A., as servicer (together with its permitted
successors and
assigns, the "Servicer"), and WELLS FARGO BANK, N.A., as trustee
(together with
its permitted successors and assigns, the "Trustee").
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained,
the
Depositor, the Servicer and the Trustee agree as follows:
PRELIMINARY STATEMENT
In exchange for the Certificates, the Depositor hereby conveys
the
Trust Estate to the Trustee to create the Trust. The Trust
Estate for federal
income tax purposes will be treated as two separate real estate
mortgage
investment conduits (the "Upper-Tier REMIC" and "Lower-Tier
REMIC,"
respectively, and each, a "REMIC"). The Certificates (other than
the Class 1-A-R
and Class 1-A-LR Certificates) are referred to collectively as
the "Regular
Certificates" and shall constitute "regular interests" in the
Upper-Tier REMIC.
The Uncertificated Lower-Tier Interests shall constitute the
"regular interests"
in the Lower-Tier REMIC. The Class 1-A-R Certificate shall be
the "residual
interest" in the Upper-Tier REMIC and the Class 1-A-LR
Certificate shall be the
"residual interest" in the Lower-Tier REMIC. The Certificates
and the
Uncertificated Lower-Tier Interests will represent the entire
beneficial
ownership interest in the Trust. The "latest possible maturity
date" for federal
income tax purposes of all interests created hereby will be the
REMIC
Certificate Maturity Date.
The following table sets forth characteristics of the
Certificates,
together with the minimum denominations and integral multiples
in excess thereof
in which the Classes of Certificates shall be issuable (except
that one
Certificate of each Class of Certificates may be issued in any
amount in excess
of the minimum denomination, but less than the integral multiple
in excess of
the minimum):
<PAGE>
================= ================= ========== ===============
============
Initial Class Integral
Certificate Multiples
Balance or Pass-Thro Minimum in Excess
Classes Notional Amount ugh Rate Denomination of Minimum
----------------- ----------------- ---------- ---------------
------------
Class 1-A-1 $126,563,000.00 (1) $1,000 $1
----------------- ----------------- ---------- ---------------
------------
Class 1-A-R $50.00 (1) $50 N/A
----------------- ----------------- ---------- ---------------
------------
Class 1-A-LR $50.00 (1) $50 N/A
----------------- ----------------- ---------- ---------------
------------
Class 2-A-1 $453,292,000.00 (2) $1,000 $1
----------------- ----------------- ---------- ---------------
------------
Class 3-A-1 $50,152,000.00 (3) $1,000 $1
----------------- ----------------- ---------- ---------------
------------
Class 4-A-1 $79,927,000.00 (4) $1,000 $1
----------------- ----------------- ---------- ---------------
------------
Class B-1 $12,863,000.00 (5) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class B-2 $4,777,000.00 (5) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class B-3 $2,940,000.00 (5) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class B-4 $1,470,000.00 (5) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class B-5 $1,102,000.00 (5) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class B-6 $1,838,240.00 (5) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class 1-IO $131,018,167.70 (6) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class 2-IO $469,247,002.46 (7) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class 3-IO $51,918,157.68 (8) $25,000 $1
----------------- ----------------- ---------- ---------------
------------
Class 4-IO $82,741,012.26 (9) $25,000 $1
(1)For each Distribution Date occurring prior to and including
the Distribution
Date in November 2007, interest will accrue on these
Certificates at a per
annum rate equal to the Net WAC for the Group 1 Mortgage Loans
minus 0.105%.
For each Distribution Date occurring on and after the
Distribution Date in
December 2007, interest will accrue on these Certificates at a
per annum rate
equal to the Net WAC for the Group 1 Mortgage Loans.
(2)For each Distribution Date occurring prior to and including
the Distribution
Date in November 2009, interest will accrue on these
Certificates at a per
annum rate equal to the Net WAC for the Group 2 Mortgage Loans
minus 0.256%.
For each Distribution Date occurring on and after the
Distribution Date in
December 2009, interest will accrue on these Certificates at a
per annum rate
equal to the Net WAC for the Group 2 Mortgage Loans.
(3)For each Distribution Date occurring prior to and including
the Distribution
Date in November 2011, interest will accrue on these
Certificates at a per
annum rate equal to the Net WAC for the Group 3 Mortgage Loans
minus 0.0185%.
For each Distribution Date occurring on and after the
Distribution Date in
December 2011, interest will accrue on these Certificates at a
per annum rate
equal to the Net WAC for the Group 3 Mortgage Loans.
(4)For each Distribution Date occurring prior to and including
the Distribution
Date in November 2014, interest will accrue on these
Certificates at a per
annum rate equal to the Net WAC for the Group 4 Mortgage Loans
minus
0.06787%. For each Distribution Date occurring on and after the
Distribution
Date in December 2014, interest will accrue on these
Certificates at a per
annum rate equal to the Net WAC for the Group 4 Mortgage
Loans.
(5)For each Distribution Date, interest will accrue on these
Certificates at a
per annum rate equal to the weighted average (based on the Group
Subordinate
Amount for each Loan Group) of (i) with respect to Loan Group 1,
prior to and
including the Distribution Date in November 2007, the Net WAC
for the Group 1
Mortgage Loans minus 0.105% and on and after the Distribution
Date in
December 2007, the Net WAC for the Group 1 Mortgage Loans, (ii)
with respect
to Loan Group 2, prior to and including the Distribution Date in
November
2009, the Net WAC of the Group 2 Mortgage Loans minus 0.256% and
on and after
the Distribution Date in December 2009, the Net WAC for the
Group 2 Mortgage
Loans, (iii) with respect to Loan Group 3, prior to and
including the
Distribution Date in November 2011, the Net WAC of the Group 3
Mortgage Loans
minus 0.0185% and on and after the Distribution Date in December
2011, the
Net WAC for the Group 3 Mortgage Loans and (iv) with respect to
Loan Group 4,
prior to and including the Distribution Date in November 2014,
the Net WAC
for the Group 4 Mortgage Loans minus 0.06787% and on and after
the
Distribution Date in December 2014, the Net WAC for the Group 4
Mortgage
Loans.
(6)For each Distribution Date occurring prior to the
Distribution Date in
December 2007, interest will accrue on the Class 1-IO
Certificates at a per
annum rate equal to 0.105%. For each Distribution Date occurring
on and after
the Distribution Date in December 2007, the Pass-Through Rate on
the Class
1-IO Certificates will be zero.
(7)For each Distribution Date occurring prior to the
Distribution Date in
December 2009, interest will accrue on the Class 2-IO
Certificates at a per
annum rate equal to 0.256%. For each Distribution Date occurring
on and after
the Distribution Date in December 2009, the Pass-Through Rate on
the Class
2-IO Certificates will be zero.
(8)For each Distribution Date occurring prior to the
Distribution Date in
December 2011, interest will accrue on the Class 3-IO
Certificates at a per
annum rate equal to 0.0185%. For each Distribution Date
occurring on and
after the Distribution Date in December 2011, the Pass-Through
Rate on the
Class 3-IO Certificates will be zero.
(9)For each Distribution Date occurring prior to the
Distribution Date in
December 2014, interest will accrue on the Class 4-IO
Certificates at a per
annum rate equal to 0.06787%. For each Distribution Date
occurring on and
after the Distribution Date in December 2014, the Pass-Through
Rate on the
Class 4-IO Certificates will be zero.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement,
the
following words and phrases, unless the context otherwise
requires, shall have
the meanings specified in this Article:
1933 Act: The Securities Act of 1933, as amended.
Accrued Certificate Interest: For any Distribution Date and
each
interest-bearing Class, one month's interest accrued during the
related Interest
Accrual Period at the applicable Pass-Through Rate on the
applicable Class
Certificate Balance or Notional Amount.
Adjusted Pool Amount: With respect to any Distribution Date and
Loan
Group, the Cut-off Date Pool Principal Balance of the Mortgage
Loans in such
Loan Group minus the sum of (i) all amounts in respect of
principal received in
respect of the Mortgage Loans in such Loan Group (including,
without limitation,
amounts received as Monthly Payments, Periodic Advances,
Principal Prepayments,
Liquidation Proceeds and Substitution Adjustment Amounts) and
distributed to
Holders of the Certificates on such Distribution Date and all
prior Distribution
Dates and (ii) the principal portion of all Realized Losses
(other than Debt
Service Reductions) incurred on such Mortgage Loans from the
Cut-off Date
through the end of the month preceding such Distribution
Date.
Advance: A Periodic Advance or a Servicing Advance.
Aggregate Subordinate Percentage: As to any Distribution Date,
the
aggregate Class Certificate Balance of the Subordinate
Certificates divided by
the aggregate Pool Stated Principal Balance for all Loan
Groups.
Agreement: This Pooling and Servicing Agreement together with
all
amendments hereof and supplements hereto.
Amount Held for Future Distribution: As to any Distribution Date
and
Loan Group, the total of the amounts held in the Servicer
Custodial Account at
the close of business on the preceding Determination Date on
account of (i)
Principal Prepayments and Liquidation Proceeds received or made
on the Mortgage
Loans in such Loan Group in the month of such Distribution Date
and (ii)
payments which represent receipt of Monthly Payments on the
Mortgage Loans in
such Loan Group in respect of a Due Date or Due Dates subsequent
to the related
Due Date.
Ancillary Income: All prepayment premiums (if any), assumption
fees,
late payment charges and all other ancillary income and fees
with respect to the
Mortgage Loans.
Appraised Value: With respect to any Mortgaged Property, either
(i)
the lesser of (a) the appraised value determined in an appraisal
obtained by the
originator at origination of such Mortgage Loan and (b) the
sales price for such
property, except that, in the case of Mortgage Loans the
proceeds of which were
used to refinance an existing mortgage loan, the Appraised Value
of the related
Mortgaged Property is the appraised value thereof determined in
an appraisal
obtained at the time of refinancing, or (ii) the appraised value
determined in
an appraisal made at the request of a Mortgagor subsequent to
origination in
order to eliminate the Mortgagor's obligation to keep a Primary
Insurance Policy
in force.
Assignment of Mortgage: An individual 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 give record notice of the sale of the Mortgage.
Authenticating Agents: As defined in Section 9.10.
Bank of America: Bank of America, N.A., a national banking
association, or its successor in interest.
Book-Entry Certificate: Any Class of Certificates other than
the
Physical Certificates.
BPP Mortgage Loan: Any Mortgage Loan which includes a
Borrowers
Protection Plan(R) addendum to the related Mortgage Note whereby
Bank of America
agrees to cancel (i) certain payments of principal and interest
on such Mortgage
Loan for up to twelve months upon the disability or involuntary
unemployment of
the Mortgagor or (ii) the outstanding principal balance of the
Mortgage Loan
upon the accidental death of the Mortgagor; provided that such
Borrowers
Protection Plan(R) has not been terminated in accordance with
its terms.
BPP Mortgage Loan Payment: With respect to any BPP Mortgage
Loan,
the Monthly Covered Amount or Total Covered Amount, if any,
payable by Bank of
America pursuant to Section 5 of the Mortgage Loan Purchase
Agreement.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii)
a day on which banking institutions in the State of North
Carolina, the State of
New York, the State of Minnesota, the state in which the
servicing offices of
the Servicer is located or the state in which the Corporate
Trust Office is
located are required or authorized by law or executive order to
be closed.
Buy-Down Account: The separate Eligible Account or Accounts
created
and maintained by the Servicer pursuant to Section 3.23.
Buy-Down Agreement: An agreement governing the application
of
Buy-Down Funds with respect to a Buy-Down Mortgage Loan.
Buy-Down Funds: Money advanced by a builder, seller or other
interested party to reduce a Mortgagor's monthly payment during
the initial
years of a Buy-Down Mortgage Loan.
Buy-Down Mortgage Loan: Any Mortgage Loan in respect of
which,
pursuant to a Buy-Down Agreement, the monthly interest payments
made by the
related Mortgagor will be less than the scheduled monthly
interest payments on
such Mortgage Loan, with the resulting difference in interest
payments being
provided from Buy-Down Funds.
Calculated Principal Distribution: As defined in Section
5.03(d).
Certificate: Any of the Banc of America Mortgage Securities,
Inc.
Mortgage Pass-Through Certificates, Series 2004-L that are
issued pursuant to
this Agreement.
Certificate Account: The Eligible Account created and maintained
by
the Trustee pursuant to Section 3.08(c) in the name of the
Trustee for the
benefit of the Certificateholders and designated "Wells Fargo
Bank, N.A., in
trust for registered holders of Banc of America Mortgage
Securities, Inc.
Mortgage Pass-Through Certificates, Series 2004-L." The
Certificate Account
shall be deemed to consist of five sub-accounts; one for each
Group and a fifth
sub-account referred to herein as the Upper-Tier Certificate
Sub-Account. Funds
in the Certificate Account shall be held in trust for the
Holders of the
Certificates of such Group for the uses and purposes set forth
in this
Agreement.
Certificate Balance: With respect to any Certificate at any
date,
the maximum dollar amount of principal to which the Holder
thereof is then
entitled hereunder, such amount being equal to the product of
the Percentage
Interest of such Certificate and the Class Certificate Balance
of the Class of
Certificates of which such Certificate is a part.
Certificate Custodian: Initially, Wells Fargo Bank, N.A.;
thereafter
any other Certificate Custodian acceptable to the Depository and
selected by the
Trustee.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of a Book-Entry Certificate.
With respect to
any Definitive Certificate, the Certificateholder of such
Certificate.
Certificate Register: The register maintained pursuant to
Section
6.02.
Certificate Registrar: The registrar appointed pursuant to
Section
6.02.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for
the purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor, the Servicer or any affiliate thereof
shall be deemed not
to be outstanding and the Percentage Interest and Voting Rights
evidenced
thereby shall not be taken into account in determining whether
the requisite
amount of Percentage Interests or Voting Rights, as the case may
be, necessary
to effect any such consent has been obtained, unless such entity
is the
registered owner of the entire Class of Certificates, provided
that the Trustee
shall not be responsible for knowing that any Certificate is
registered in the
name of such an affiliate unless one of its Responsible Officers
has actual
knowledge.
Certification: As defined in Section 3.22(b).
Class: As to the Certificates, the Class 1-A-1, Class 1-A-R,
Class
1-A-LR, Class 2-A-1, Class 3-A-1, Class 4-A-1, Class 1-IO, Class
2-IO, Class
3-IO, Class 4-IO, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and
Class B-6 Certificates, as the case may be.
Class 1-IO Notional Amount: As to any Distribution Date, the
aggregate Stated Principal Balance of the Group 1 Mortgage Loans
on the Due Date
in the month preceding the month of such Distribution Date.
Class 2-IO Notional Amount: As to any Distribution Date, the
aggregate Stated Principal Balance of the Group 2 Mortgage Loans
on the Due Date
in the month preceding the month of such Distribution Date.
Class 3-IO Notional Amount: As to any Distribution Date, the
aggregate Stated Principal Balance of the Group 3 Mortgage Loans
on the Due Date
in the month preceding the month of such Distribution Date.
Class 4-IO Notional Amount: As to any Distribution Date, the
aggregate Stated Principal Balance of the Group 4 Mortgage Loans
on the Due Date
in the month preceding the month of such Distribution Date.
Class A Certificates: The Class 1-A-1, Class 1-A-R, Class
1-A-LR,
Class 2-A-1, Class 3-A-1 and Class 4-A-1 Certificates.
Class B Certificates: The Class B-1, Class B-2, Class B-3,
Class
B-4, Class B-5 and Class B-6 Certificates.
Class Certificate Balance: With respect to any Class (other than
the
Class 1-IO, Class 2-IO, Class 3-IO and Class 4-IO Certificates)
and any date of
determination, and subject to Section 5.03(f), the Initial Class
Certificate
Balance of such Class minus the sum of (i) all distributions of
principal made
with respect thereto and (ii) all reductions in Class
Certificate Balance
previously allocated thereto pursuant to Section 5.03(b). The
Class 1-IO, Class
2-IO, Class 3-IO and Class 4-IO Certificates are Interest-Only
Certificates and
have no Class Certificate Balance.
Class Interest Shortfall: For any Distribution Date and each
interest-bearing Class, the amount by which Accrued Certificate
Interest for
such Class (as reduced pursuant to Section 5.02(c)) exceeds the
amount of
interest actually distributed on such Class on such Distribution
Date pursuant
to clause (i) of the definition of "Interest Distribution
Amount."
Class Unpaid Interest Shortfall: As to any Distribution Date
and
each interest-bearing Class, the amount by which the aggregate
Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds
the amount of
interest actually distributed on such Class on such prior
Distribution Dates
pursuant to clause (ii) of the definition of "Interest
Distribution Amount."
Closing Date: December 29, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest: With respect to each Distribution Date,
the
least of (a) the aggregate Servicing Fee for such Distribution
Date (before
giving effect to any reduction pursuant to Section 3.17), (b)
the Prepayment
Interest Shortfall for such Distribution Date and (c)
one-twelfth of 0.25% of
the Pool Stated Principal Balances of the Loan Groups. To the
extent that the
aggregate Prepayment Interest Shortfall for a Distribution Date
exceeds
Compensating Interest, the Compensating Interest for such
Distribution Date
shall be allocated among the Loan Groups in proportion to the
respective
Prepayment Interest Shortfalls relating to such Loan Groups.
Conversion Date: The date on which a Mortgage Loan becomes a
Converted Mortgage Loan.
Converted Mortgage Loan: Any Mortgage Loan as to which the
related
Mortgagor has exercised its option pursuant to the related
Mortgage Note to
convert the adjustable rate of interest on such Mortgage Loan to
a fixed rate of
interest.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: The principal corporate trust office of
the
Trustee at which at any particular time its corporate trust
business with
respect to this Agreement is conducted, which office at the date
of the
execution of this instrument is located at 9062 Old Annapolis
Road, Columbia,
Maryland 21045-1951, Attention: Corporate Trust Services - BOAMS
2004-L, and for
certificate transfer purposes is located at Sixth Street and
Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services - BOAMS
2004-L, or at such other address as the Trustee may designate
from time to time
by notice to the Certificateholders, the Depositor and the
Servicer.
Custodian: Initially, the Trustee, and thereafter the Custodian,
if
any, hereafter appointed by the Trustee pursuant to Section
9.12. The Custodian
may (but need not) be the Trustee or any Person directly or
indirectly
controlling or controlled by or under common control of either
of them. Neither
the Servicer nor the Depositor, nor any Person directly or
indirectly
controlling or controlled by or under common control with any
such Person may be
appointed Custodian.
Customary Servicing Procedures: With respect to the
Servicer,
procedures (including collection procedures) that the Servicer
customarily
employs and exercises in servicing and administering mortgage
loans for its own
account and which are in accordance with accepted mortgage
servicing practices
of prudent lending institutions servicing mortgage loans of the
same type as the
Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties
are located.
Cut-off Date: December 1, 2004.
Cut-off Date Pool Principal Balance: For each Loan Group the
aggregate of the Cut-off Date Principal Balances of the Mortgage
Loans in such
Loan Group which is $131,018,167.70 for Loan Group 1,
$469,247,002.46 for Loan
Group 2, $51,918,157.68 for Loan Group 3 and $82,741,012.26 for
Loan Group 4.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
Cut-off Date,
reduced by all installments of principal due on or prior thereto
whether or not
paid.
Debt Service Reduction: As to any Mortgage Loan and any
Determination Date, the excess of (i) the Monthly Payment due on
the related Due
Date under the terms of such Mortgage Loan over (ii) the amount
of the monthly
payment of principal and/or interest required to be paid with
respect to such
Due Date by the Mortgagor as established by a court of competent
jurisdiction
(pursuant to an order which has become final and nonappealable)
as a result of a
proceeding initiated by or against the related Mortgagor under
the Bankruptcy
Code, as amended from time to time (11 U.S.C.); provided that no
such excess
shall be considered a Debt Service Reduction so long as (a) the
Servicer is
pursuing an appeal of the court order giving rise to any such
modification and
(b)(1) such Mortgage Loan is not in default with respect to
payment due
thereunder in accordance with the terms of such Mortgage Loan as
in effect on
the Cut-off Date or (2) Monthly Payments are being advanced by
the Servicer in
accordance with the terms of such Mortgage Loan as in effect on
the Cut-off
Date.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became
the subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required to
be
cured, repurchased or substituted for pursuant to Section 2.02
or 2.04.
Deficient Valuation: As to any Mortgage Loan and any
Determination
Date, the excess of (i) the then outstanding indebtedness under
such Mortgage
Loan over (ii) the secured valuation thereof established by a
court of competent
jurisdiction (pursuant to an order which has become final and
nonappealable) as
a result of a proceeding initiated by or against the related
Mortgagor under the
Bankruptcy Code, as amended from time to time (11 U.S.C.),
pursuant to which
such Mortgagor retained such Mortgaged Property; provided that
no such excess
shall be considered a Deficient Valuation so long as (a) the
Servicer is
pursuing an appeal of the court order giving rise to any such
modification and
(b)(1) such Mortgage Loan is not in default with respect to
payments due
thereunder in accordance with the terms of such Mortgage Loan as
in effect on
the Cut-off Date or (2) Monthly Payments are being advanced by
the Servicer in
accordance with the terms of such Mortgage Loan as in effect on
the Cut-off
Date.
Deficient Valuation Mortgage Loan: Any Mortgage Loan that became
the
subject of a Deficient Valuation.
Definitive Certificates: As defined in Section 6.02(c)(iii).
Depositor: Banc of America Mortgage Securities, Inc., a
Delaware
corporation, or its successor in interest, as depositor of the
Trust Estate.
Depository: The Depository Trust Company, the nominee of which
is
Cede & Co., as the registered Holder of the Book-Entry
Certificates or any
successor thereto appointed in accordance with this Agreement.
The Depository
shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of
the Uniform Commercial Code of the State of New York.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
Determination Date: As to any Distribution Date, the 16th day of
the
month of the related Distribution Date or, if such 16th day is
not a Business
Day, the Business Day immediately preceding such 16th day.
Distribution Date: The 25th day of each month beginning in
January
2005 (or, if such day is not a Business Day, the next Business
Day).
Due Date: As to any Distribution Date and each Mortgage Loan,
the
first day in the calendar month of such Distribution Date.
Eligible Account: Any of (i) an account or accounts maintained
with
(a) Bank of America, or (b) a federal or state chartered
depository institution
or trust company the short-term unsecured debt obligations of
which (or, in the
case of a depository institution or trust company that is the
principal
subsidiary of a holding company, the debt obligations of such
holding company)
have the highest short-term ratings of each Rating Agency at the
time any
amounts are held on deposit therein, or (ii) an account or
accounts in a
depository institution or trust company in which such accounts
are insured by
the FDIC (to the limits established by the FDIC) and the
uninsured deposits in
which accounts are otherwise secured such that, as evidenced by
an Opinion of
Counsel delivered to the Trustee and to each Rating Agency,
the
Certificateholders have a claim with respect to the funds in
such account or a
perfected first priority 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 or
trust company in which such account is maintained, or (iii) a
trust account or
accounts maintained with the trust department of a federal or
state chartered
depository institution or trust company, acting in its fiduciary
capacity or
(iv) any other account acceptable to each Rating Agency.
Eligible Accounts may
bear interest and may include, if otherwise qualified under this
definition,
accounts maintained with the Trustee or Bank of America.
ERISA: The Employee Retirement Income Security Act of 1974,
as
amended.
ERISA Restricted Certificates: Any Class 1-IO, Class 2-IO,
Class
3-IO, Class 4-IO, Class B-4, Class B-5 or Class B-6
Certificate.
Escrow Account: As defined in Section 3.09(a).
Escrow Payments: The amounts constituting taxes,
assessments,
Primary Insurance Policy premiums, fire and hazard insurance
premiums and other
payments as may be required to be escrowed by the Mortgagor with
the mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Events of Default: As defined in Section 8.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds of
such Mortgage
Loan received in the calendar month in which such Mortgage Loan
became a
Liquidated Mortgage Loan, net of any amounts previously
reimbursed to the
Servicer as Nonrecoverable Advance(s) with respect to such
Mortgage Loan
pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid
principal balance of
such Liquidated Mortgage Loan as of the Due Date in the month in
which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii)
accrued interest at
the Mortgage Interest Rate from the Due Date as to which
interest was last paid
or for which a Periodic Advance was made (and not reimbursed) up
to the Due Date
applicable to the Distribution Date immediately following the
calendar month
during which such liquidation occurred.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FHLMC: The Federal Home Loan Mortgage 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
10.01.
Financial Market Service: Bloomberg Financial Service and any
other
financial information provider designated by the Depositor by
written notice to
the Trustee.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement
Act of 1989, as amended.
Fitch: Fitch Ratings, or any successor thereto.
FNMA: Fannie Mae, or any successor thereto.
Form 10-K: As defined in Section 3.22(a).
Fractional Interest: As defined in Section 5.02(d).
Gross Margin: As to each Mortgage Loan, the fixed percentage
set
forth in the related Mortgage Note and indicated in the Mortgage
Loan Schedule
as the "Gross Margin," which percentage is added to the Index on
each Rate
Adjustment Date to determine (subject to rounding, the Periodic
Cap and the
Lifetime Cap) the Mortgage Interest Rate on such Mortgage Loan
until the next
Rate Adjustment Date.
Group: Any of Group 1, Group 2, Group 3 or Group 4.
Group 1: The Group 1-A Certificates and Class 1-IO
Certificates.
Group 1 Lower-Tier Rate: For each Distribution Date occurring
prior
to and including the Distribution Date in November 2007,
interest will accrue on
these Certificates at a per annum rate equal to the Net WAC for
the Group 1
Mortgage Loans minus 0.105% per annum. For each Distribution
Date occurring on
and after the Distribution Date in December 2007, interest will
accrue on these
Certificates at a per annum rate equal to the Net WAC for the
Group 1 Mortgage
Loans.
Group 1 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-1
hereto.
Group 2: The Group 2-A Certificates and Class 2-IO
Certificates.
Group 2 Lower-Tier Rate: For each Distribution Date occurring
prior
to and including the Distribution Date in November 2009,
interest will accrue on
these Certificates at a per annum rate equal to the Net WAC for
the Group 2
Mortgage Loans minus 0.256% per annum. For each Distribution
Date occurring on
and after the Distribution Date in December 2009, interest will
accrue on these
Certificates at a per annum rate equal to the Net WAC for the
Group 2 Mortgage
Loans.
Group 2 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-2
hereto.
Group 3: The Group 3-A Certificates and Class 3-IO
Certificates.
Group 3 Lower-Tier Rate: For each Distribution Date occurring
prior
to and including the Distribution Date in November 2011,
interest will accrue on
these Certificates at a per annum rate equal to the Net WAC for
the Group 3
Mortgage Loans minus 0.0185% per annum. For each Distribution
Date occurring on
and after the Distribution Date in December 2011, interest will
accrue on these
Certificates at a per annum rate equal to the Net WAC for the
Group 3 Mortgage
Loans.
Group 3 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-3
hereto
Group 4: The Group 4-A Certificates and Class 4-IO
Certificates.
Group 4 Lower-Tier Rate: For each Distribution Date occurring
prior
to and including the Distribution Date in November 2014,
interest will accrue on
these Certificates at a per annum rate equal to the Net WAC for
the Group 4
Mortgage Loans minus 0.06787% per annum. For each Distribution
Date occurring on
and after the Distribution Date in December 2014, interest will
accrue on these
Certificates at a per annum rate equal to the Net WAC for the
Group 4 Mortgage
Loans.
Group 4 Mortgage Loan: Each Mortgage Loan listed on Exhibit
D-4
hereto.
Group 1-A Certificates: Class 1-A-1, Class 1-A-R and Class
1-A-LR
Certificates.
Group 2-A Certificates: Class 2-A-1 Certificates.
Group 3-A Certificates: Class 3-A-1 Certificates.
Group 4-A Certificates: Class 4-A-1 Certificates.
Group Subordinate Amount: With respect to any Distribution Date
and
any Loan Group, the excess of the Pool Stated Principal Balance
for such Loan
Group over the aggregate Class Certificate Balance of the Senior
Certificates of
the Related Group immediately prior to such date.
Holder: A Certificateholder.
Independent: When used with respect to any specified Person
means
such a Person who (i) is in fact independent of the Depositor
and the Servicer,
(ii) does not have any direct financial interest or any material
indirect
financial interest in the Depositor or the Servicer or in an
affiliate of either
of them, and (iii) is not connected with the Depositor or the
Servicer as an
officer, employee, promoter, underwriter, trustee, partner,
director or person
performing similar functions.
Index: As to any Mortgage Loan and Rate Adjustment Date, a rate
per
annum that is defined to be the arithmetic mean of the London
interbank offered
rate quotations for one year U.S. Dollar-denominated deposits,
as published in
The Wall Street Journal and most recently available either (i)
as of the first
Business Day in the month preceding the month of the applicable
Rate Adjustment
Date or (ii) forty-five days before the applicable Rate
Adjustment Date or, in
the event that such index is no longer available, a substitute
index selected by
the Servicer in accordance with the terms of the related
Mortgage Note.
Initial Class Certificate Balance: As to each Class of
Certificates
(other than the Class 1-IO, Class 2-IO, Class 3-IO and Class
4-IO Certificates),
the Class Certificate Balance set forth in the Preliminary
Statement. The Class
1-IO, Class 2-IO, Class 3-IO and Class 4-IO Certificates are
Interest-Only
Certificates and have no Initial Class Certificate Balance.
Initial Notional Amount: As to each Class of Interest-Only
Certificates, the Notional Amount set forth in the Preliminary
Statement.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Estate, any related insurance policy, including all riders
and
endorsements thereto in effect, including any replacement policy
or policies for
any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to
any
Insurance Policy, in each case other than any amount included in
such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: As to any Distribution Date and each
Class
of Certificates, the period from and including the first day of
the calendar
month preceding the calendar month of such Distribution Date to
but not
including the first day of the calendar month of such
Distribution Date.
Interest Distribution Amount: For any Distribution Date and
each
interest-bearing Class, the sum of (i) the Accrued Certificate
Interest, subject
to reduction pursuant to Section 5.02(c) and (ii) any Class
Unpaid Interest
Shortfall for such Class.
Interest-Only Certificates: Any Class of Certificates entitled
to
distributions of interest, but no distributions of principal.
The Class 1-IO,
Class 2-IO, Class 3-IO and Class 4-IO Certificates are the only
Classes of
Interest-Only Certificates.
Lifetime Cap: As to any Mortgage Loan, the maximum Mortgage
Interest
Rate set forth in the related Mortgage Note and indicated in the
Mortgage Loan
Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) that was
liquidated in the
calendar month preceding the month of such Distribution Date and
as to which the
Servicer has certified (in accordance with this Agreement) that
it has received
all proceeds it expects to receive in connection with the
liquidation of such
Mortgage Loan including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation
of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale
or otherwise or
amounts received in connection with any condemnation or partial
release of a
Mortgaged Property and any other proceeds received in connection
with an REO
Property, less the sum of related unreimbursed Servicing Fees
and Advances.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 or
Loan
Group 4.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Group 3: The Group 3 Mortgage Loans.
Loan Group 4: The Group 4 Mortgage Loans.
Loan-to-Value Ratio: With respect to any Mortgage Loan and any
date
of determination, the fraction, expressed as a percentage, the
numerator of
which is the outstanding 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-Tier Distribution Amount: As defined in Section
5.02(a).
Lower-Tier REMIC: As defined in the Preliminary Statement,
the
assets of which consist of the Mortgage Loans, such amounts as
shall from time
to time be held in the Certificate Account (other than Ancillary
Income and
amounts held in respect of the Upper-Tier Certificate
Sub-Account), the
insurance policies, if any, relating to a Mortgage Loan and
property which
secured a Mortgage Loan and which has been acquired by
foreclosure or deed in
lieu of foreclosure.
MERS: As defined in Section 2.01(b)(iii).
Monthly Covered Amount: As defined in the Mortgage Loan
Purchase
Agreement.
Monthly Form 8-K: As defined in Section 3.22(a).
Monthly Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal and/or interest on
such Mortgage Loan
which, unless otherwise specified herein, shall give effect to
any related Debt
Service Reduction and any Deficient Valuation that affects the
amount of the
monthly payment due on such Mortgage Loan or the Monthly Covered
Amount
representing such scheduled monthly payment.
Moody's: Moody's Investors Service, Inc., or any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument
creating a
first lien on a Mortgaged Property securing a Mortgage Note or
creating a first
lien on a leasehold interest.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum
rate
of interest at which interest accrues on the principal balance
of such Mortgage
Loan, as adjusted from time to time in accordance with the
provisions of the
related Mortgage Note, which rate is (a) prior to the first Rate
Adjustment Date
for each such Mortgage Loan, the initial Mortgage Interest Rate
for such
Mortgage Loan indicated on the Mortgage Loan Schedule and (b)
from and after
such Rate Adjustment Date, the sum of the Index, as of the Rate
Adjustment Date
applicable to such Due Date, and the Gross Margin, rounded as
set forth in such
Mortgage Note, subject to the Periodic Cap and the Lifetime Cap
applicable to
such Mortgage Loan at any time during the life of such Mortgage
Loan.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated December 29, 2004, between Bank of America, as
seller, and the
Depositor, as purchaser.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to
time amended by the Servicer to reflect the addition of
Substitute Mortgage
Loans and the deletion of Defective Mortgage Loans pursuant to
the provisions of
this Agreement) transferred to the Trustee as part of the Trust
Estate and from
time to time subject to this Agreement, attached hereto as
Exhibit D-1, Exhibit
D-2, Exhibit D-3 and Exhibit D-4, setting forth the following
information with
respect to each Mortgage Loan: (i) the Mortgage Loan identifying
number; (ii) a
code indicating whether the Mortgaged Property is
owner-occupied; (iii) the
property type for each Mortgaged Property; (iv) the original
months to maturity
or the remaining months to maturity from the Cut-off Date; (v)
the Loan-to-Value
Ratio at origination; (vi) the Mortgage Interest Rate as of the
Cut-off Date;
(vii) the date on which the first Monthly Payment was due on the
Mortgage Loan,
and, if such date is not the Due Date currently in effect, such
Due Date; (viii)
the stated maturity date; (ix) the amount of the Monthly Payment
as of the
Cut-off Date; (x) the paid-through date; (xi) the original
principal amount of
the Mortgage Loan; (xii) the principal balance of the Mortgage
Loan as of the
close of business on the Cut-off Date, after application of
payments of
principal due on or before the Cut-off Date, whether or not
collected, and after
deduction of any payments collected of scheduled principal due
after the Cut-off
Date; (xiii) a code indicating the purpose of the Mortgage Loan;
(xiv) a code
indicating the documentation style; (xv) the Appraised Value;
(xvi) the first
Rate Adjustment Date; (xvii) the Rate Ceiling; (xviii) the
Periodic Cap; (xix)
the Gross Margin; (xx) whether such Mortgage Loan has an option
to convert from
an adjustable rate of interest to a fixed rate of interest; and
(xxi) the
closing date of such Mortgage Loan. With respect to the Mortgage
Loans in each
Loan Group in the aggregate, the Mortgage Loan Schedule shall
set forth the
following information, as of the Cut-off Date: (i) the number of
Mortgage Loans;
(ii) the current aggregate outstanding principal balance of the
Mortgage Loans;
(iii) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and
(iv) the weighted average months to maturity of the Mortgage
Loans.
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to Section 2.01 as from time to time are
held as a part
of the Trust Estate (including any Substitute Mortgage Loans and
REO Property),
the Mortgage Loans originally so held being identified in the
Mortgage Loan
Schedule.
Mortgage Note: The originally executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan,
together with all riders thereto and amendments thereof.
Mortgaged Property: The underlying property securing a
Mortgage
Loan, which may include Co-op Shares or residential long-term
leases.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: As to any Mortgage Loan and
Distribution
Date, such Mortgage Loan's Mortgage Interest Rate thereon on the
first day of
the month preceding the month of the related Distribution Date
reduced by (i)
the Servicing Fee Rate and (ii) the Trustee Fee Rate.
Net WAC: As to any Loan Group and any Distribution Date, the
weighted average of the Net Mortgage Interest Rates of the
Mortgage Loans in
such Loan Group (based on Stated Principal Balances of the
Mortgage Loans in
such Loan Group on the Due Date in the month preceding the month
of such
Distribution Date).
Non-Supported Interest Shortfalls: As to any Distribution Date,
the
amount, if any, by which the aggregate of Prepayment Interest
Shortfalls exceeds
Compensating Interest for such Distribution Date.
Non-U.S. Person: A Person other than a U.S. Person.
Nonrecoverable Advance: Any portion of an Advance previously
made or
proposed to be made in respect of a Mortgage Loan which has not
been previously
reimbursed and which, in the good faith judgment of the
Servicer, will not or,
in the case of a proposed Advance, would not be ultimately
recoverable from the
related Mortgagor, related Liquidation Proceeds, or other
recoveries in respect
of the related Mortgage Loan.
Notional Amount: With respect to: (i) the Class 1-IO
Certificates
and any date of determination, the Class 1-IO Notional Amount,
(ii) the Class
2-IO Certificates and any date of determination, the Class 2-IO
Notional Amount,
(iii) the Class 3-IO Certificates and any date of determination,
the Class 3-IO
Notional Amount and (iv) the Class 4-IO Certificates and any
date of
determination, the Class 4-IO Notional Amount.
Offered Certificates: The Class A, Class B-1, Class B-2 and
Class
B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of
the
Board, Vice Chairman of the Board, President or a Vice President
and by the
Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant
Secretaries, or any other duly authorized officer of the
Depositor or the
Servicer, as the case may be, and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel acceptable to
the
Trustee, who may be counsel for the Depositor or the Servicer,
except that any
opinion of counsel relating to the qualification of the Trust
Estate as two
separate REMICs or compliance with the REMIC Provisions must be
an opinion of
Independent counsel.
Original Fractional Interest: With respect to each of the
following
Classes of Subordinate Certificates, the corresponding
percentage described
below, as of the Closing Date:
Class B-1 1.65%
Class B-2 1.00%
Class B-3 0.60%
Class B-4 0.40%
Class B-5 0.25%
Class B-6 0.00%
Original Subordinate Class Certificate Balance:
$24,990,240.10.
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
which
was not the subject of a Principal Prepayment in Full prior to
such Due Date,
which did not become a Liquidated Mortgage Loan prior to such
Due Date and which
was not purchased from the Trust prior to such Due Date pursuant
to Section 2.02
or 2.04.
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 to each Class of interest-bearing
Certificates, the per annum rate set forth or described in the
Preliminary
Statement.
Paying Agent: As defined in Section 9.13.
Percentage Interest: As to any Certificate, the percentage
obtained
by dividing the initial Certificate Balance of such Certificate
(or the initial
notional amount for a Class 1-IO, Class 2-IO, Class 3-IO or
Class 4-IO
Certificate) by the Initial Class Certificate Balance or Initial
Notional
Amount, as applicable, of the Class of which such Certificate is
a part.
Periodic Advance: The payment required to be made by the
Servicer
with respect to any Distribution Date pursuant to Section 3.20,
the amount of
any such payment being equal to the aggregate of Monthly
Payments (net of the
Servicing Fee) on the Mortgage Loans (including any REO
Property) that were due
on the related Due Date and not received as of the close of
business on the
related Determination Date, less the aggregate amount of any
such delinquent
payments that the Servicer has determined would constitute a
Nonrecoverable
Advance if advanced.
Periodic Cap: For each Mortgage Loan, the applicable limit
on
adjustment of the Mortgage Interest Rate for each Rate
Adjustment Date specified
in the applicable Mortgage Note and designated as such in the
Mortgage Loan
Schedule.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and
interest
by the United States, FHLMC, FNMA or any agency or
instrumentality
of the United States when such obligations are backed by the
full
faith and credit of the United States; provided that such
obligations of FHLMC or FNMA shall be limited to senior debt
obligations and mortgage participation certificates other
than
investments in mortgage-backed or mortgage participation
securities
with yields evidencing extreme sensitivity to the rate of
principal
payments on the underlying mortgages, which shall not
constitute
Permitted Investments hereunder;
(ii) repurchase agreements on obligations specified in
clause
(i) maturing not more than one month from the date of
acquisition
thereof with a corporation incorporated under the laws of the
United
States or any state thereof rated not lower than "P-1" by
Moody's
and "F-1" by Fitch;
(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, rated not lower than "P-1"
by
Moody's and "F-1" by Fitch;
(iv) commercial paper (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 is rated not lower
than
"P-1" by Moody's and "F-1" by Fitch;
(v) investments in money market funds (including funds of
the
Trustee or its affiliates, or funds for which an affiliate of
the
Trustee acts as advisor, as well as funds for which the Trustee
and
its affiliates may receive compensation) rated either "AAA" by
Fitch
(if rated by Fitch) and Aaa by Moody's or otherwise approved
in
writing by each Rating Agency; and
(vi) other obligations or securities that are acceptable to
each Rating Agency and, as evidenced by an Opinion of
Counsel
obtained by the Servicer, will not affect the qualification of
the
Trust Estate as two separate REMICs;
provided, however, that no instrument shall be a Permitted
Investment if it
represents either (a) the right to receive only interest
payments with respect
to the underlying debt instrument or (b) the right to receive
both principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest with respect to such instrument provide a
yield to
maturity greater than 120% of the yield to maturity at par of
such underlying
obligations.
Permitted Transferee: Any Person other than (i) the United
States,
or any State or any political subdivision thereof, or any agency
or
instrumentality of any of the foregoing, (ii) a foreign
government,
international organization or any agency or instrumentality of
either of the
foregoing, (iii) an organization which is exempt from tax
imposed by Chapter 1
of the Code (including the tax imposed by Section 511 of the
Code on unrelated
business taxable income) (except certain farmers' cooperatives
described in Code
Section 521), (iv) rural electric and telephone cooperatives
described in Code
Section 1381(a)(2)(C), (v) a Person with respect to whom the
income on a
Residual Certificate is allocable to a foreign permanent
establishment or fixed
base, within the meaning of an applicable income tax treaty, of
such Person or
any other Person, and (vi) any other Person so designated by the
Servicer based
on an Opinion of Counsel to the effect that any transfer to such
Person may
cause the Trust or any other Holder of a Residual Certificate to
incur tax
liability that would not be imposed other than on account of
such transfer. The
terms "United States," "State" and "international organization"
shall have the
meanings set forth in Code Section 7701 or successor
provisions.
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.
Physical Certificates: The Class 1-A-R, Class 1-A-LR, Class
1-IO,
Class 2-IO, Class 3-IO, Class 4-IO, Class B-4, Class B-5 and
Class B-6
Certificates.
Plan: As defined in Section 6.02(e).
Pool Distribution Amount: As to any Distribution Date and
Loan
Group, the excess of (a) the sum of (i) the aggregate of (A) the
interest
portion of any Monthly Payment on a Mortgage Loan in such Loan
Group (net of the
Servicing Fee) and the principal portion of any Monthly Payment
on a Mortgage
Loan in such Loan Group due on the Due Date in the month in
which such
Distribution Date occurs and which is received prior to the
related
Determination Date (or in the case of any Monthly Covered
Amount, the related
Remittance Date) and (B) all Periodic Advances and payments of
Compensating
Interest made by the Servicer in respect of such Loan Group and
Distribution
Date deposited to the Servicer Custodial Account pursuant to
Section
3.08(b)(vii); (ii) all Liquidation Proceeds received on the
Mortgage Loans in
such Loan Group during the preceding calendar month and
deposited to the
Servicer Custodial Account pursuant to Section 3.08(b)(iii);
(iii) all Principal
Prepayments (other than Total Covered Amounts) received on the
Mortgage Loans in
such Loan Group during the month preceding the month of such
Distribution Date
and deposited to the Servicer Custodial Account pursuant to
Section 3.08(b)(i)
during such period and all Total Covered Amounts received and
deposited in the
Servicer Custodial Account by the related Remittance Date; (iv)
in connection
with Defective Mortgage Loans in such Loan Group or Converted
Mortgage Loans, as
applicable, the aggregate of the Repurchase Prices and
Substitution Adjustment
Amounts deposited on the related Remittance Date pursuant to
Section
3.08(b)(vi); (v) any other amounts in the Servicer Custodial
Account deposited
therein pursuant to Sections 3.08(b)(iv), (v) and (ix) in
respect of such
Distribution Date and such Loan Group; (vi) any Reimbursement
Amount required to
be included pursuant to Section 5.02(a) and (vii) any Recovery
with respect to
such Distribution Date over (b) any (i) amounts permitted to be
withdrawn from
the Servicer Custodial Account pursuant to clauses (i) through
(vii), inclusive,
of Section 3.11(a) in respect of such Loan Group and (ii)
amounts permitted to
be withdrawn from the Certificate Account pursuant to clauses
(i) and (ii) of
Section 3.11(b) in respect of such Loan Group.
Pool Stated Principal Balance: As to any Distribution Date and
Loan
Group, the aggregate Stated Principal Balances of all Mortgage
Loans in such
Loan Group that were Outstanding Mortgage Loans immediately
following the Due
Date in the month preceding the month in which such Distribution
Date occurs.
Prepayment Interest Shortfall: As to any Distribution Date and
each
Mortgage Loan subject to a Principal Prepayment received during
the calendar
month preceding such Distribution Date, the amount, if any, by
which one month's
interest at the related Mortgage Interest Rate (net of the
Servicing Fee) on
such Principal Prepayment exceeds the amount of interest paid in
connection with
such Principal Prepayment.
Primary Insurance Policy: Each policy of primary mortgage
guaranty
insurance or any replacement policy therefor with respect to any
Mortgage Loan,
in each case issued by an insurer acceptable to FNMA or
FHLMC.
Principal Amount: As to any Distribution Date and Loan Group,
the
sum of (i) the sum of (a) the principal portion of each Monthly
Payment due on
each Mortgage Loan in such Loan Group on the related Due Date,
(b) the Stated
Principal Balance, as of the date of repurchase, of each
Mortgage Loan in such
Loan Group that was repurchased by the Depositor pursuant to
this Agreement as
of such Distribution Date, (c) any Substitution Adjustment
Amount in connection
with a Defective Mortgage Loan in such Loan Group received with
respect to such
Distribution Date, (d) any Liquidation Proceeds allocable to
recoveries of
principal of Mortgage Loans in such Loan Group that are not yet
Liquidated
Mortgage Loans received during the calendar month preceding the
month of such
Distribution Date, (e) with respect to each Mortgage Loan in
such Loan Group
that became a Liquidated Mortgage Loan during the calendar month
preceding the
month of such Distribution Date, the amount of Liquidation
Proceeds (excluding
Excess Proceeds) allocable to principal received with respect to
such Mortgage
Loan during the calendar month preceding the month of such
Distribution Date and
(f) all Principal Prepayments on the Mortgage Loans in such Loan
Group received
during the calendar month preceding the month of such
Distribution Date; and
(ii) the Recovery for such Distribution Date.
Principal Prepayment: Any payment or other recovery of principal
on
a Mortgage Loan (other than Liquidation Proceeds) which is
received in advance
of its scheduled Due Date and is not accompanied by an amount of
interest
representing scheduled interest due on any date or dates in any
month or months
subsequent to the month of prepayment including the principal
portion of any
Total Covered Amount.
Principal Prepayment in Full: Any Principal Prepayment of the
entire
principal balance of a Mortgage Loan.
Private Certificates: The Class 1-IO, Class 2-IO, Class 3-IO,
Class
4-IO, Class B-4, Class B-5 and Class B-6 Certificates.
Pro Rata Share: As to any Distribution Date and any Class of
Subordinate Certificates that is not a Restricted Class, the
portion of the
Subordinate Principal Distribution Amounts allocable to such
Class, equal to the
product of the Subordinate Principal Distribution Amounts for
such Distribution
Date and a fraction, the numerator of which is the related Class
Certificate
Balance thereof and the denominator of which is the aggregate
Class Certificate
Balance of the Subordinate Certificates that are not Restricted
Classes. The Pro
Rata Share of a Restricted Class shall be 0%. The Pro Rata Share
of a Class of
Subordinate Certificates may be computed for each of clause (i)
and clause (ii)
of the definition of "Subordinate Principal Distribution Amount"
in the event
the Restricted Classes differ with respect to each clause.
Qualified Appraiser: An appraiser of a Mortgaged Property
duly
appointed by the originator of the related Mortgage Loan, who
had no interest,
direct or indirect, in such Mortgaged Property or in any loan
made on the
security thereof, whose compensation is not affected by the
approval or
disapproval of the related Mortgage Loan and who met the minimum
qualifications
of FNMA or FHLMC.
Rate Adjustment Date: As to each Mortgage Loan, the Due Date
on
which date an adjustment to the Mortgage Interest Rate of such
Mortgage Loan
becomes effective under the related Mortgage Note, which Due
Date is the date
set forth in the Mortgage Loan Schedule as the first Rate
Adjustment Date and
each subsequent anniversary thereof.
Rate Ceiling: The maximum per annum Mortgage Interest Rate
permitted
under the related Mortgage Note.
Rating Agency: Each of Fitch and Moody's. If any such
organization
or a successor is no longer in existence, "Rating Agency" shall
be such
nationally recognized statistical rating organization, or other
comparable
Person, as is designated by the Depositor, notice of which
designation shall be
given to the Trustee. References herein to a given rating or
rating category of
a Rating Agency shall mean such rating category without giving
effect to any
modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount as of the date of such liquidation, equal to (i) the
unpaid principal
balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus
(ii) interest at the Net Mortgage Interest Rate from the Due
Date as to which
interest was last paid or advanced (and not reimbursed) to
Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are
required to be
distributed on the Stated Principal Balance of such Liquidated
Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any,
received during
the month in which such liquidation occurred, to the extent
applied as
recoveries of interest at the Net Mortgage Interest Rate and to
principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan
that has become the
subject of a Deficient Valuation, if the principal amount due
under the related
Mortgage Note has been reduced, the difference between the
principal balance of
the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the
Deficient
Valuation. With respect to each Mortgage Loan that has become
the subject of a
Debt Service Reduction and any Distribution Date, the amount, if
any, by which
the principal portion of the related Monthly Payment has been
reduced.
Record Date: The last day of the month (or, if such day is not
a
Business Day, the preceding Business Day) preceding the month of
the related
Distribution Date.
Recovery: As to any Distribution Date and Loan Group, the sum of
all
amounts received during the calendar month preceding the month
of such
Distribution Date on each Mortgage Loan in such Loan Group
subsequent to such
Mortgage Loan being determined to be a Liquidated Mortgage
Loan.
Refinance Mortgage Loan: Any Mortgage Loan the proceeds of
which
were not used to purchase the related Mortgaged Property.
Regular Certificates: As defined in the Preliminary
Statement
hereto.
Reimbursement Amount: As defined in Section 2.04.
Related Group: For Loan Group 1, Group 1; for Loan Group 2,
Group 2;
for Loan Group 3, Group 3; and for Loan Group 4, Group 4.
Related Loan Group: For Group 1, Loan Group 1; for Group 2,
Loan
Group 2; for Group 3, Loan Group 3; and for Group 4, Loan Group
4.
Relief Act: The Servicemembers Civil Relief Act, as it may
be
amended from time to time.
Relief Act Reduction: With respect to any Distribution Date, for
any
Mortgage Loan as to which there has been a reduction in the
amount of interest
collectible thereon for the most recently ended calendar month
as a result of
the application of the Relief Act or comparable state
legislation, the amount,
if any, by which (i) interest collectible on such Mortgage Loan
for the most
recently ended calendar month is less than (ii) interest accrued
pursuant to the
terms of the Mortgage Note on the same principal amount and for
the same period
as the interest collectible on such Mortgage Loan for the most
recently ended
calendar month.
REMIC: A "real estate mortgage investment conduit" within
the
meaning of Section 860D of the Code.
REMIC Certificate Maturity Date: The "latest possible maturity
date"
of the Regular Certificates as that term is defined in Section
2.07.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits, which appear at
Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and
related provisions,
and regulations promulgated thereunder, as the foregoing may be
in effect from
time to time, as well as provisions of applicable state
laws.
Remittance Date: As to any Distribution Date, by 2:00 p.m.
Eastern
time on the Business Day immediately preceding such Distribution
Date.
REO Disposition Period: As defined in Section 3.14.
REO Proceeds: Proceeds, net of any related expenses of the
Servicer,
received in respect of any REO Property (including, without
limitation, proceeds
from the rental of the related Mortgaged Property) which are
received prior to
the final liquidation of such Mortgaged Property.
REO Property: A Mortgaged Property acquired by the Servicer
on
behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure in
connection with a defaulted Mortgage Loan.
Repurchase Price: As to any Defective Mortgage Loan repurchased
on
any date pursuant to Section 2.02 or 2.04 and, as to any
Converted Mortgage Loan
repurchased on any date pursuant to Section 2.09, an amount
equal to the sum of
(i) the unpaid principal balance thereof and (ii) the unpaid
accrued interest
thereon at the applicable Mortgage Interest Rate 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 Mortgage Loan became eligible to be
repurchased.
Request for Release: The Request for Release submitted by
the
Servicer to the Trustee or the Custodian on behalf of the
Trustee, substantially
in the form of Exhibit E.
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 in respect of such Mortgage Loan.
Residual Certificates: The Class 1-A-R and Class 1-A-LR
Certificates.
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 and having responsibility for
the
administration of this Agreement.
Restricted Classes: As defined in Section 5.02(d).
Seller: Bank of America, a national banking association, or
its
successor in interest, as seller of the Mortgage Loans under the
Mortgage Loan
Purchase Agreement.
Senior Certificates: The Class A, Class 1-IO, Class 2-IO, Class
3-IO
and Class 4-IO Certificates.
Senior Credit Support Depletion Date: The date on which the
aggregate Class Certificate Balance of the Subordinate
Certificates is reduced
to zero.
Senior Percentage: With respect to any Distribution Date and
Loan
Group, the percentage, carried six places rounded up, obtained
by dividing (i)
the aggregate Class Certificate Balance of the Class A
Certificates of the
Related Group immediately prior to such Distribution Date by
(ii) the Pool
Stated Principal Balance of such Loan Group immediately prior to
such
Distribution Date.
Senior Prepayment Percentage: For any Distribution Date and
Loan
Group during the seven years beginning on the first Distribution
Date, 100%. The
Senior Prepayment Percentage for any Distribution Date and Loan
Group occurring
on or after the seventh anniversary of the first Distribution
Date will, except
as provided herein, be as follows: for any Distribution Date in
the first year
thereafter, the Senior Percentage for such Loan Group plus 70%
of the
Subordinate Percentage for such Loan Group for such Distribution
Date; for any
Distribution Date in the second year thereafter, the Senior
Percentage for such
Loan Group plus 60% of the Subordinate Percentage for such Loan
Group for such
Distribution Date; for any Distribution Date in the third year
thereafter, the
Senior Percentage for such Loan Group plus 40% of the
Subordinate Percentage for
such Loan Group for such Distribution Date; for any Distribution
Date in the
fourth year thereafter, the Senior Percentage for such Loan
Group plus 20% of
the Subordinate Percentage for such Loan Group for such
Distribution Date; and
for any Distribution Date in the fifth or later years
thereafter, the Senior
Percentage for such Loan Group for such Distribution Date,
unless (i) on any of
the foregoing Distribution Dates the Total Senior Percentage
exceeds the initial
Total Senior Percentage, in which case the Senior Prepayment
Percentage for Loan
Group 1, Loan Group 2, Loan Group 3 and Loan Group 4 for such
Distribution Date
will once again equal 100%, (ii) on any Distribution Date before
the
Distribution Date occurring in January 2008, the Aggregate
Subordinate
Percentage for such Distribution Date is greater than or equal
to twice the
initial Aggregate Subordinate Percentage, in which case the
Senior Prepayment
Percentage for Loan Group 1 for such Distribution Date will
equal the Senior
Percentage for Loan Group 1 plus 50% of the Subordinate
Percentage for Loan
Group 1, the Senior Prepayment Percentage for Loan Group 2 for
such Distribution
Date will equal the Senior Percentage for Loan Group 2 plus 50%
of the
Subordinate Percentage for Loan Group 2, the Senior Prepayment
Percentage for
such Distribution Date will equal the Senior Percentage for Loan
Group 3 plus
50% of the Subordinate Percentage for Loan Group 3 and the
Senior Prepayment
Percentage for Loan Group 4 for such Distribution Date will
equal the Senior
Percentage for Loan Group 4 plus 50% of the Subordinate
Percentage for Loan
Group 4, or (iii) on any Distribution Date occurring on or after
the
Distribution Date in January 2008, the Aggregate Subordinate
Percentage for such
Distribution Date is greater than or equal to twice the initial
Aggregate
Subordinate Percentage, in which case the Senior Prepayment
Percentage for Loan
Group 1 for such Distribution Date will equal the Senior
Percentage for Loan
Group 1, the Senior Prepayment Percentage for Loan Group 2 for
such Distribution
Date will equal the Senior Percentage for Loan Group 2, the
Senior Prepayment
Percentage for Loan Group 3 for such Distribution Date will
equal the Senior
Percentage for Loan Group 3 and the Senior Prepayment Percentage
for Loan Group
4 for such Distribution Date will equal the Senior Percentage
for Loan Group 4.
Notwithstanding the foregoing, no decrease in the share of the
applicable
Subordinate Percentage (for calculating the applicable Senior
Prepayment
Percentage for any Loan Group) will occur and the Senior
Prepayment Percentage
for all Loan Groups will be calculated without regard to clause
(ii) or (iii) in
the preceding sentence unless both of the Senior Step Down
Conditions are
satisfied.
Senior Principal Distribution Amount: As to any Distribution
Date
and Loan Group, the sum of (i) the Senior Percentage for such
Loan Group of the
amounts described in clauses (i)(a) through (d) of the
definition of "Principal
Amount" for such Distribution Date and Loan Group and (ii) the
Senior Prepayment
Percentage for such Loan Group of the amounts described in
clauses (i)(e) and
(f) and the amount described in clause (ii) of the definition of
"Principal
Amount" for such Distribution Date and Loan Group.
Senior Step Down Conditions: As of any Distribution Date as to
which
any decrease in the Senior Prepayment Percentage for any Loan
Group applies, (i)
the outstanding principal balance of all Mortgage Loans
(including, for this
purpose, any Mortgage Loans in foreclosure or any REO Property
and any Mortgage
Loan for which the Mortgagor has filed for bankruptcy after the
Closing Date)
delinquent 60 days or more (averaged over the preceding six
month period), as a
percentage of the aggregate Class Certificate Balance of the
Subordinate
Certificates, is not equal to or greater than 50% or (ii)
cumulative Realized
Losses with respect to the Mortgage Loans as of the applicable
Distribution Date
do not exceed the percentages of the Original Subordinate Class
Certificate
Balance set forth below:
Percentage of
Original Subordinate Class
Distribution Date Occurring Certificate Balance
January 2005 through December 2007 20%
January 2008 through December 2012 30%
January 2013 through December 2013 35%
January 2014 through December 2014 40%
January 2015 through December 2015 45%
January 2016 and thereafter 50%
Servicer: Bank of America, a national banking association, or
its
successor in interest, in its capacity as servicer of the
Mortgage Loans, or any
successor servicer appointed as herein provided.
Servicer Advance Date: As to any Distribution Date, 11:30
a.m.,
Eastern time, on the Business Day immediately preceding such
Distribution Date.
Servicer Custodial Account: The separate Eligible Account or
Accounts created and maintained by the Servicer pursuant to
Section 3.08(b).
Servicer Custodial Account Reinvestment Income: For each
Distribution Date, all income and gains net of any losses
realized since the
preceding Distribution Date from Permitted Investments of funds
in the Servicer
Custodial Account.
Servicer's Certificate: The monthly report required by Section
4.01.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the performance by the
Servicer of its
servicing obligations, including, but not limited to (i) the
preservation,
restoration and protection of a Mortgaged Property, (ii)
expenses reimbursable
to the Servicer pursuant to Section 3.14 and any enforcement or
judicial
proceedings, including foreclosures, (iii) the management and
liquidation of any
REO Property and (iv) compliance with the obligations under
Section 3.12.
Servicing Compensation: With respect to each Distribution Date,
the
sum of (i) the aggregate Servicing Fee for such Distribution
Date subject to
reduction as provided in Section 3.17, (ii) any Ancillary
Income, (iii) Excess
Proceeds for the preceding month and (iv) the Servicer Custodial
Account
Reinvestment Income for such Distribution Date.
Servicing Fee: With respect to each Mortgage Loan and
Distribution
Date, the amount of the fee payable to the Servicer, which
shall, for such
Distribution Date, be equal to one-twelfth of the product of the
Servicing Fee
Rate with respect to such Mortgage Loan and the Stated Principal
Balance of such
Mortgage Loan. Such fee shall be payable monthly, computed on
the basis of the
same Stated Principal Balance and period respecting which any
related interest
payment on a Mortgage Loan is computed. The Servicer's right to
receive the
Servicing Fee is limited to, and payable solely from, the
interest portion
(including recoveries with respect to interest from Liquidation
Proceeds and
other proceeds, to the extent permitted by Section 3.11) of
related Monthly
Payments collected by the Servicer, or as otherwise provided
under Section 3.11.
Servicing Fee Rate: With respect to each Group 1 Mortgage
Loan,
0.375% per annum, and with respect to each Group 2 Mortgage
Loan, Group 3
Mortgage Loan and Group 4 Mortgage Loan, 0.250% per annum.
Servicing File: The items pertaining to a particular Mortgage
Loan
referred to in Exhibit J hereto, and any additional documents
required to be
added to the Servicing File pursuant to the Agreement.
Servicing Officer: Any officer of the Servicer involved in,
or
responsible for, the administration and servicing of the
Mortgage Loans whose
name appears on a list of servicing officers furnished to the
Trustee by the
Servicer, as such list may from time to time be amended.
Servicing Transfer Costs: All reasonable costs and expenses
incurred
by the Trustee in connection with the transfer of servicing from
a predecessor
servicer, including, without limitation, any costs or expenses
associated with
the complete transfer of all servicing data and the completion,
correction or
manipulation of such servicing data as may be required by the
Trustee to correct
any errors or insufficiencies in the servicing data or otherwise
to enable the
Trustee to service the Mortgage Loans properly and
effectively.
Similar Law: As defined in Section 6.02(e).
Stated Principal Balance: As to any Mortgage Loan and date,
the
unpaid principal balance of such Mortgage Loan as of the Due
Date immediately
preceding such date as specified in the amortization schedule at
the time
relating thereto (before any adjustment to such amortization
schedule by reason
of any moratorium or similar waiver or grace period) after
giving effect to any
previous partial Principal Prepayments and Liquidation Proceeds
allocable to
principal (other than with respect to any Liquidated Mortgage
Loan) and to the
payment of principal due on such Due Date and irrespective of
any delinquency in
payment by the related Mortgagor, and after giving effect to any
Deficient
Valuation.
Subordinate Balance Ratio: As of any date of determination,
the
ratio among the principal balances of the Class 1-LS Interest,
Class 2-LS
Interest, Class 3-LS Interest and the Class 4-LS Interest, equal
to the ratio
among the Group Subordinate Amount of Loan Group 1, the Group
Subordinate Amount
of Loan Group 2, the Group Subordinate Amount for Loan Group 3
and the Group
Subordinate Amount of Loan Group 4.
Subordinate Certificates: The Class B Certificates.
Subordinate Percentage: As of any Distribution Date and Loan
Group,
100% minus the Senior Percentage for such Loan Group for such
Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date
and
Loan Group, 100% minus the Senior Prepayment Percentage for such
Loan Group for
such Distribution Date.
Subordinate Principal Distribution Amount: With respect to
any
Distribution Date and Loan Group, an amount equal to the sum of
(i) the
Subordinate Percentage for such Loan Group of all amounts
described in clauses
(i)(a) through (d) of the definition of "Principal Amount" for
such Distribution
Date and Loan Group and (ii) the Subordinate Prepayment
Percentage of the
amounts described in clauses (i)(e) and (f) and the amount
described in clause
(ii) of the definition of "Principal Amount" for such
Distribution Date and Loan
Group.
Subservicer: Any Person with which the Servicer has entered into
a
Subservicing Agreement and which satisfies the requirements set
forth therein.
Subservicing Agreement: Any subservicing agreement (which, in
the
event the Subservicer is an affiliate of the Servicer, need not
be in writing)
between the Servicer and any Subservicer relating to servicing
and/or
administration of certain Mortgage Loans as provided in Section
3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted for a
Defective Mortgage Loan which must, on the date of such
substitution (i) have a
Stated Principal Balance, after deduction of the principal
portion of the
Monthly Payment due in the month of substitution, not in excess
of, and not more
than 10% less than, the Stated Principal Balance of the
Defective Mortgage Loan;
(ii) have a Net Mortgage Interest Rate equal to that of the
Defective Mortgage
Loan; (iii) have a Loan-to-Value Ratio not higher than that of
the Defective
Mortgage Loan; (iv) have a Gross Margin equal to that of the
Defective Mortgage
Loan; (v) have a Periodic Cap and Rate Ceiling equal to that of
the Defective
Mortgage Loan; (vi) have the same Index and frequency of
mortgage interest rate
adjustment as the Deleted Mortgage Loan; (vii) have a remaining
term to maturity
not greater than (and not more than one year less than) that of
the Defective
Mortgage Loan; and (viii) comply with each Mortgage Loan
representation and
warranty set forth in this Agreement relating to the Defective
Mortgage Loan.
More than one Substitute Mortgage Loan may be substituted for a
Defective
Mortgage Loan if such Substitute Mortgage Loans meet the
foregoing attributes in
the aggregate.
Substitution Adjustment Amount: As defined in Section 2.02.
Tax Matters Person: Any person designated as "tax matters
person" in
accordance with Section 5.06 and the manner provided under
Treasury Regulation
ss. 1.860F-4(d) and Treasury Regulation ss.
301.6231(a)(7)-1.
Total Covered Amount: As defined in the Mortgage Loan
Purchase
Agreement.
Total Senior Percentage: With respect to any Distribution Date,
the
percentage, carried six places rounded up, obtained by dividing
the aggregate
Class Certificate Balance of the Class A Certificates
immediately prior to such
Distribution Date by the aggregate Pool Stated Principal Balance
of all Loan
Groups immediately prior to such Distribution Date.
Treasury Regulations: The final and temporary regulations
promulgated under the Code by the U.S. Department of the
Treasury.
Trust: The trust created by this Agreement.
Trust Estate: The corpus of the Trust created to the extent
described herein, consisting of the Mortgage Loans, such assets
as shall from
time to time be identified as deposited in the Servicer
Custodial Account or the
Certificate Account, in accordance with this Agreement, REO
Property, the
Primary Insurance Policies, any other Required Insurance Policy
and the right to
receive (i) amounts, if any, payable on behalf of any Mortgagor
from the
Buy-Down Account relating to any Buy-Down Mortgage Loan and (ii)
any BPP
Mortgage Loan Payment. The Buy-Down Account shall not be part of
the Trust
Estate.
Trustee: Wells Fargo Bank, N.A., and its successors-in-interest
and,
if a successor trustee is appointed hereunder, such successor,
as trustee.
Trustee Fee: As to any Distribution Date and Loan Group, an
amount
equal to one-twelfth of the Trustee Fee Rate multiplied by the
aggregate Stated
Principal Balance of the Mortgage Loans in the Related Loan
Group immediately
following the Due Date in the month preceding the month in which
such
Distribution Date occurs.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0035%
per
annum.
Uncertificated Lower-Tier Interest: A regular interest in
the
Lower-Tier REMIC which is held as an asset of the Upper-Tier
REMIC and is
entitled to monthly distributions as provided in Section 5.02(a)
hereof. Any of
the Class 1-L Interest, Class 1-LS Interest, Class 1-LIO
Interest, Class 2-L
Interest, Class 2-LS Interest, Class 2-LIO Interest, Class 3-L
Interest, Class
3-LS Interest, Class 3-LIO Interest, Class 4-L Interest, Class
4-LS Interest and
Class 4-LIO Interest are Uncertificated Lower-Tier
Interests.
Underwriting Guidelines: The underwriting guidelines of Bank
of
America.
Unscheduled Principal Amount: As to any Distribution Date and
Loan
Group, the sum of (a) with respect to each Mortgage Loan in such
Loan Group that
became a Liquidated Mortgage Loan during the calendar month
preceding the month
of such Distribution Date, the amount of Liquidation Proceeds
(excluding Excess
Proceeds) allocable to principal received with respect to such
Mortgage Loan
during the calendar month preceding the month of such
Distribution Date and (b)
all Principal Prepayments on the Mortgage Loans in such Loan
Group received
during the calendar month preceding the month of such
Distribution Date.
Upper-Tier Certificate: Any one of the Senior Certificates
(other
than the Class 1-A-LR Certificate) and the Class B
Certificates.
Upper-Tier Certificate Sub-Account: The sub-account of the
Certificate Account designated by the Trustee pursuant to
Section 3.08(f).
Upper-Tier REMIC: As defined in the Preliminary Statement,
the
assets of which consist of the Uncertificated Lower-Tier
Interests and such
amounts as shall from time to time be deemed to be held in the
Upper-Tier
Certificate Sub-Account.
U.S. Person: A citizen or resident of the United States, a
corporation or partnership (unless, in the case of a
partnership, Treasury
Regulations are adopted that provide otherwise) created or
organized in or under
the laws of the United States, any state thereof or the District
of Columbia,
including an entity treated as a corporation or partnership for
federal income
tax purposes, an estate whose income is subject to United States
federal income
tax regardless of its source, or a trust if a court within the
United States is
able to exercise primary supervision over the administration of
such trust, and
one or more such U.S. Persons have the authority to control all
substantial
decisions of such trust (or, to the extent provided in
applicable Treasury
Regulations, certain trusts in existence on August 20, 1996
which are eligible
to elect to be treated as U.S. Persons).
Voting Rights: The portion of the voting rights of all of
the
Certificates which is allocated to any Certificate. As of any
date of
determination, (a) 1% of all Voting Rights shall be allocated to
the Holders of
the Residual Certificates, (b) 1% of the all Voting Rights shall
be allocated to
the Holders of the Class 1-IO, Class 2-IO, Class 3-IO and Class
4-IO
Certificates and (c) the remaining Voting Rights shall be
allocated among
Holders of the remaining Classes of Certificates in proportion
to the
Certificate Balances of their respective Certificates on such
date.
Section 1.02 Interest Calculations. All calculations of interest
will be made on
a 360-day year consisting of twelve 30-day months. All dollar
amounts calculated
hereunder shall be rounded to the nearest penny with one-half of
one penny being
rounded down.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans. (a) The
Depositor,
concurrently with the execution and delivery hereof, hereby
sells, transfers,
assigns, sets over and otherwise conveys to the Trustee on
behalf of the Trust
for the benefit of the Certificateholders, without recourse, all
the right,
title and interest of the Depositor in and to the Mortgage
Loans, including all
interest and principal received on or with respect to the
Mortgage Loans (other
than payments of principal and interest due and payable on the
Mortgage Loans on
or before the Cut-off Date). The foregoing sale, transfer,
assignment and set
over does not and is not intended to result in a creation of an
assumption by
the Trustee of any obligation of the Depositor or any other
Person in connection
with the Mortgage Loans or any agreement or instrument relating
thereto, except
as specifically set forth herein. In addition, the Depositor,
concurrently with
the execution and delivery hereof, hereby sells, transfers,
assigns, sets over
and otherwise conveys to the Trustee on behalf of the Trust for
the benefit of
the Certificateholders, without recourse, the Depositor's rights
to receive any
BPP Mortgage Loan Payment. It is agreed and understood by the
parties hereto
that it is not intended that any mortgage loan be included in
the Trust that is
a "High-Cost Home Loan" as defined in any of (i) the New Jersey
Home Ownership
Act effective November 27, 2003, (ii) the New Mexico Home Loan
Protection Act
effective January 1, 2004 or (iii) the Massachusetts Predatory
Home Loan
Practices Act effective November 7, 2004.
(b) In connection with such transfer and assignment, the
Depositor
shall deliver or cause to be delivered to the Trustee, for the
benefit of the
Certificateholders, the following documents or instruments with
respect to each
Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed by manual or
facsimile
signature in the following form: "Pay to the order of Wells
Fargo Bank,
N.A., as trustee for the holders of the Banc of America
Mortgage
Securities, Inc. Mortgage Pass-Through Certificates, Series
2004-L,
without recourse," with all necessary intervening endorsements
showing a
complete chain of endorsement from the originator to the Trustee
(each
such endorsement being sufficient to transfer all right, title
and
interest of the party so endorsing, as noteholder or assignee
thereof, in
and to that Mortgage Note);
(ii) except as provided below, the original recorded Mortgage
with
evidence of a recording thereon, or if any such Mortgage has not
been
returned from the applicable recording office or has been lost,
or if such
public recording office retains the original recorded Mortgage,
a copy of
such Mortgage certified by the Depositor as being a true and
correct copy
of the Mortgage;
(iii) subject to the provisos at the end of this paragraph, a
duly
executed Assignment of Mortgage to "Wells Fargo Bank, N.A., as
trustee for
the holders of the Banc of America Mortgage Securities, Inc.
Mortgage
Pass-Through Certificates, Series 2004-L" (which may be included
in a
blanket assignment or assignments), together with, except as
provided
below, originals of all interim recorded assignments of such
mortgage or a
copy of such interim assignment certified by the Depositor as
being a true
and complete copy of the original recorded intervening
assignments of
Mortgage (each such assignment, when duly and validly completed,
to be in
recordable form and sufficient to effect the assignment of and
transfer to
the assignee thereof, under the Mortgage to which the assignment
relates);
provided that, if the related Mortgage has not been returned
from the
applicable public recording office, such Assignment of Mortgage
may
exclude the information to be provided by the recording office;
and
provided, further, if the related Mortgage has been recorded in
the name
of Mortgage Electronic Registration Systems, Inc. ("MERS") or
its
designee, no Assignment of Mortgage in favor of the Trustee will
be
required to be prepared or delivered and instead, the Servicer
shall take
all actions as are necessary to cause the Trust to be shown as
the owner
of the related Mortgage Loan on the records of MERS for purposes
of the
system of recording transfers of beneficial ownership of
mortgages
maintained by MERS;
(iv) the originals of all assumption, modification,
consolidation or
extension agreements, if any, with evidence of recording
thereon, if any;
(v) any of (A) the original or duplicate original mortgagee
title
insurance policy and all riders thereto; (B) a title search
showing no
lien (other than standard exceptions of the type described in
Section
2.04(viii)) on the Mortgaged Property senior to the lien of the
Mortgage
or (C) an opinion of counsel of the type customarily rendered in
the
applicable jurisdiction in lieu of a title insurance policy;
(vi) the original of any guarantee executed in connection with
the
Mortgage Note;
(vii) for each Mortgage Loan, if any, which is secured by a
residential long-term lease, a copy of the lease with evidence
of
recording indicated thereon, or, if the lease is in the process
of being
recorded, a photocopy of the lease, certified by an officer of
the
respective prior owner of such Mortgage Loan or by the
applicable title
insurance company, closing/settlement/escrow agent or company or
closing
attorney to be a true and correct copy of the lease transmitted
for
recordation;
(viii) the original of any security agreement, chattel mortgage
or
equivalent document executed in connection with the Mortgage;
and
(ix) for each Mortgage Loan secured by Co-op Shares, the
originals
of the following documents or instruments:
(A) The stock certificate;
(B) The stock power executed in blank;
(C) The executed proprietary lease;
(D) The executed recognition agreement;
(E) The executed assignment of recognition agreement, if
any;
(F) The executed UCC-1 financing statement with evidence of
recording thereon; and
(G) Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee
with
evidence of recording thereon (or in a form suitable for
recordation).
provided, however, that on the Closing Date, with respect to
item (iii), the
Depositor has delivered to the Trustee a copy of such Assignment
of Mortgage in
blank and has caused the Servicer to retain the completed
Assignment of Mortgage
for recording as described below, unless such Mortgage has been
recorded in the
name of MERS or its designee. In addition, if the Depositor is
unable to deliver
or cause the delivery of any original Mortgage Note due to the
loss of such
original Mortgage Note, the Depositor may deliver a copy of such
Mortgage Note,
together with a lost note affidavit, and shall thereby be deemed
to have
satisfied the document delivery requirements of this Section
2.01(b).
If in connection with any Mortgage Loans, the Depositor
cannot
deliver (A) the Mortgage, (B) all interim recorded assignments,
(C) all
assumption, modification, consolidation or extension agreements,
if any, or (D)
the lender's title policy (together with all riders thereto)
satisfying the
requirements of clause (ii), (iii), (iv) or (v) above,
respectively,
concurrently with the execution and delivery hereof because such
document or
documents have not been returned from the applicable public
recording office in
the case of clause (ii), (iii) or (iv) above, or because the
title policy has
not been delivered to either the Servicer or the Depositor by
the applicable
title insurer in the case of clause (v) above, the Depositor
shall promptly
deliver or cause to be delivered to the Trustee or the Custodian
on behalf of
the Trustee, in the case of clause (ii), (iii) or (iv) above,
such Mortgage,
such interim assignment or such assumption, modification,
consolidation or
extension agreement, as the case may be, with evidence of
recording indicated
thereon upon receipt thereof from the public recording office,
but in no event
shall any such delivery of any such documents or instruments be
made later than
one year following the Closing Date, unless, in the case of
clause (ii), (iii)
or (iv) above, there has been a continuing delay at the
applicable recording
office or, in the case of clause (v), there has been a
continuing delay at the
applicable insurer and the Depositor has delivered the Officer's
Certificate to
such effect to the Trustee. The Depositor shall forward or cause
to be forwarded
to the Trustee (1) from time to time additional original
documents evidencing an
assumption or modification of a Mortgage Loan and (2) any other
documents
required to be delivered by the Depositor or the Servicer to the
Trustee or the
Custodian on the Trustee's behalf. In the event that the
original Mortgage is
not delivered and in connection with the payment in full of the
related Mortgage
Loan the public recording office requires the presentation of a
"lost
instruments affidavit and indemnity" or any equivalent document,
because only a
copy of the Mortgage can be delivered with the instrument of
satisfaction or
reconveyance, the Servicer shall prepare, execute and deliver or
cause to be
prepared, executed and delivered, on behalf of the Trust, such a
document to the
public recording office.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within 30 days thereafter, the
Servicer shall
(except for any Mortgage which has been recorded in the name of
MERS or its
designee) (i) cause each Assignment of Mortgage to be in proper
form for
recording in the appropriate public office for real property
records within 30
days of the Closing Date and (ii) at the Depositor's expense,
cause to be
delivered for recording in the appropriate public office for
real property
records the Assignments of the Mortgages to the Trustee, except
that, with
respect to any Assignment of a Mortgage as to which the Servicer
has not
received the information required to prepare such assignment in
recordable form,
the Servicer's obligation to do so and to deliver the same for
such recording
shall be as soon as practicable after receipt of such
information and in any
event within 30 days after the receipt thereof and, no recording
of an
Assignment of Mortgage will be required in a state if either (i)
the Depositor
furnishes to the Trustee an unqualified Opinion of Counsel
reasonably acceptable
to the Trustee to the effect that recordation of such assignment
is not
necessary under applicable state law to preserve the Trustee's
interest in the
related Mortgage Loan against the claim of any subsequent
transferee of such
Mortgage Loan or any successor to, or creditor of, the Depositor
or the
originator of such Mortgage Loan or (ii) the recordation of an
Assignment of
Mortgage in such state is not required by either Rating Agency
in order to
obtain the initial ratings on the Certificates on the Closing
Date. Set forth on
Exhibit L attached hereto is a list of all states where
recordation is required
by either Rating Agency to obtain the initial ratings of the
Certificates. The
Trustee may rely and shall be protected in relying upon the
information
contained in such Exhibit L.
In the case of Mortgage Loans that have been prepaid in full as
of
the Closing Date, the Depositor, in lieu of delivering the above
documents to
the Trustee, or the Custodian on the Trustee's behalf, will
cause the Servicer
to deposit in the Servicer Custodial Account the portion of such
payment that is
required to be deposited in the Servicer Custodial Account
pursuant to Section
3.08.
Section 2.02 Acceptance by the Trustee of the Mortgage
Loans.
Subject to the provisions of the following paragraph, the
Trustee declares that
it, or the Custodian as its agent, will hold the documents
referred to in
Section 2.01 and the other documents delivered to it
constituting the Mortgage
Files, and that it will hold such other assets as are included
in the Trust
Estate, in trust for the exclusive use and benefit of all
present and future
Certificateholders. Upon execution and delivery of this
document, the Trustee
shall deliver or cause the Custodian to deliver to the Depositor
and the
Servicer a certification in the form of Exhibit M hereto (the
"Initial
Certification") to the effect that, except as may be specified
in a list of
exceptions attached thereto, it has received the original
Mortgage Note relating
to each of the Mortgage Loans listed on the Mortgage Loan
Schedule.
Within 90 days after the execution and delivery of this
Agreement,
the Trustee shall review, or cause the Custodian to review, the
Mortgage Files
in its possession, and shall deliver to the Depositor and the
Servicer a
certification in the form of Exhibit N hereto (the ("Final
Certification") to
the effect that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule,
except as may be specified in a list of exceptions attached to
such Final
Certification, such Mortgage File contains all of the items
required to be
delivered pursuant to Section 2.01(b).
If, in the course of such review, the Trustee or the Custodian
finds
any document constituting a part of a Mortgage File which does
not meet the
requirements of Section 2.01 or is omitted from such Mortgage
File, the Trustee
shall promptly so notify the Servicer and the Depositor, or
shall cause the
Custodian to promptly so notify the Servicer and the Depositor.
In performing
any such review, the Trustee or the Custodian may conclusively
rely on the
purported genuineness of any such document and any signature
thereon. It is
understood that the scope of the Trustee's or the Custodian's
review of the
Mortgage Files is limited solely to confirming that the
documents listed in
Section 2.01 have been received and further confirming that any
and all
documents delivered pursuant to Section 2.01 appear on their
face to have been
executed and relate to the Mortgage Loans identified in the
Mortgage Loan
Schedule based solely upon the review of items (i) and (xi) in
the definition of
Mortgage Loan Schedule. Neither the Trustee nor the Custodian
shall have any
responsibility for determining whether any document is valid and
binding,
whether the text of any assignment or endorsement is in proper
or recordable
form, whether any document has been recorded in accordance with
the requirements
of any applicable jurisdiction, or whether a blanket assignment
is permitted in
any applicable jurisdiction. The Depositor hereby covenants and
agrees that it
will promptly correct or cure such defect within 90 days from
the date it was so
notified of such defect and, if the Depositor does not correct
or cure such
defect within such period, the Depositor will either (a)
substitute for the
related Mortgage Loan a Substitute Mortgage Loan, which
substitution shall be
accomplished in the manner and subject to the conditions set
forth below or (b)
purchase such Mortgage Loan from the Trustee at the Repurchase
Price for such
Mortgage Loan; provided, however, that in no event shall such a
substitution
occur more than two years from the Closing Date; provided,
further, that such
substitution or repurchase shall occur within 90 days of when
such defect was
discovered if such defect will cause the Mortgage Loan not to be
a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the
Code.
With respect to each Substitute Mortgage Loan the Depositor
shall
deliver to the Trustee, for the benefit of the
Certificateholders, the Mortgage
Note, the Mortgage, the related Assignment of Mortgage (except
for any Mortgage
which has been recorded in the name of MERS or its designee),
and such other
documents and agreements as are otherwise required by Section
2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No
substitution is permitted to be made in any calendar month after
the
Determination Date for such month. Monthly Payments due with
respect to any such
Substitute Mortgage Loan in the month of substitution shall not
be part of the
Trust Estate and will be retained by the Depositor. For the
month of
substitution, distributions to Certificateholders will include
the Monthly
Payment due for such month on any Defective Mortgage Loan for
which the
Depositor has substituted a Substitute Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule for the
benefit
of the Certificateholders to reflect the removal of each
Mortgage Loan that has
become a Defective Mortgage Loan and the substitution of the
Substitute Mortgage
Loan or Loans and the Servicer shall deliver the amended
Mortgage Loan Schedule
to the Trustee and the Custodian. Upon such substitution, each
Substitute
Mortgage Loan shall be subject to the terms of this Agreement in
all respects,
and the Depositor shall be deemed to have made to the Trustee
with respect to
such Substitute Mortgage Loan, as of the date of substitution,
the
representations and warranties made pursuant to Section 2.04.
Upon any such
substitution and the deposit to the Servicer Custodial Account
of any required
Substitution Adjustment Amount (as described in the next
paragraph) and receipt
of a Request for Release, the Trustee shall release, or shall
direct the
Custodian to release, the Mortgage File relating to such
Defective Mortgage Loan
to the Depositor and shall execute and deliver at the
Depositor's direction such
instruments of transfer or assignment prepared by the Depositor,
in each case
without recourse, as shall be necessary to vest title in the
Depositor, or its
designee, to the Trustee's interest in any Defective Mortgage
Loan substituted
for pursuant to this Section 2.02.
For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Defective Mortgage
Loans, the amount
(if any) by which the aggregate principal balance of all such
Substitute
Mortgage Loans in a Loan Group as of the date of substitution is
less than the
aggregate Stated Principal Balance of all such Defective
Mortgage Loans in such
Loan Group (after application of the principal portion of the
Monthly Payments
due in the month of substitution) (the "Substitution Adjustment
Amount" for such
Loan Group) plus an amount equal to the aggregate of any
unreimbursed Advances
with respect to such Defective Mortgage Loans shall be deposited
into the
Servicer Custodial Account by the Depositor on or before the
Remittance Date for
the Distribution Date in the month succeeding the calendar month
during which
the related Mortgage Loan is required to be purchased or
replaced hereunder.
The Trustee shall retain or shall cause the Custodian to
retain
possession and custody of each Mortgage File in accordance with
and subject to
the terms and conditions set forth herein. The Servicer shall
promptly deliver
to the Trustee, upon the execution or, in the case of documents
requiring
recording, receipt thereof, the originals of such other
documents or instruments
constituting the Mortgage File as come into the Servicer's
possession from time
to time.
It is understood and agreed that the obligation of the Depositor
to
substitute for or to purchase any Mortgage Loan which does not
meet the
requirements of Section 2.01 shall constitute the sole remedy
respecting such
defect available to the Trustee and any Certificateholder
against the Depositor.
The Trustee or the Custodian, on behalf of the Trustee, shall
be
under no duty or obligation (i) to inspect, review or examine
any such
documents, instruments, certificates or other papers to
determine that they are
genuine, enforceable, or appropriate for the represented purpose
or that they
are other than what they purport to be on their face or (ii) to
determine
whether any Mortgage File should include any of the documents
specified in
Section 2.01(b)(iv), (vi), (vii), (viii) and (ix). In connection
with making the
certifications required hereunder, to the extent a title search
or opinion of
counsel has been provided in lieu of a title policy for any
Mortgage Loan, the
Trustee shall only be responsible for confirming that a title
search or opinion
of counsel has been provided for such Mortgage Loan and shall
not be deemed to
have certified that the content of the title search or opinion
of counsel is
sufficient to meet the requirements of Section 2.01(b)(v).
Section 2.03 Representations, Warranties and Covenants of
the
Servicer. The Servicer hereby makes the following
representations and warranties
to the Depositor and the Trustee, as of the Closing Date:
(i) The Servicer is a national banking association duly
organized,
validly existing, and in good standing under the federal laws of
the
United States of America and has all licenses necessary to carry
on its
business as now being conducted and is licensed, qualified and
in good
standing in each of the states where a Mortgaged Property is
located if
the laws of such state require licensing or qualification in
order to
conduct business of the type conducted by the Servicer. The
Servicer has
power and authority to execute and deliver this Agreement and to
perform
in accordance herewith; the execution, delivery and performance
of this
Agreement (including all instruments of transfer to be delivered
pursuant
to this Agreement) by the Servicer and the consummation of
the
transactions contemplated hereby have been duly and validly
authorized.
This Agreement, assuming due authorization, execution and
delivery by the
other parties hereto, evidences the valid, binding and
enforceable
obligation of the Servicer, subject to applicable law except
as
enforceability may be limited by (A) bankruptcy, insolvency,
liquidation,
receivership, moratorium, reorganization or other similar laws
affecting
the enforcement of creditors' rights generally or creditors of
national
banks and (B) general principles of equity, whether enforcement
is sought
in a proceeding in equity or at law. All requisite corporate
action has
been taken by the Servicer to make this Agreement valid and
binding upon
the Servicer in accordance with its terms.
(ii) No consent, approval, authorization or order is required
for
the transactions contemplated by this Agreement from any
court,
governmental agency or body, or federal or state regulatory
authority
having jurisdiction over the Servicer is required or, if
required, such
consent, approval, authorization or order has been or will,
prior to the
Closing Date, be obtained.
(iii) The consummation of the transactions contemplated by
this
Agreement are in the ordinary course of business of the Servicer
and will
not result in the breach of any term or provision of the charter
or
by-laws of the Servicer or result in the breach of any term or
provision
of, or conflict with or constitute a default under or result in
the
acceleration of any obligation under, any agreement, indenture
or loan or
credit agreement or other instrument to which the Servicer or
its property
is subject, or result in the violation of any law, rule,
regulation,
order, judgment or decree to which the Servicer or its property
is
subject.
(iv) There is no action, suit, proceeding or investigation
pending
or, to the best knowledge of the Servicer, threatened against
the Servicer
which, either individually or in the aggregate, would result in
any
material adverse change in the business, operations, financial
condition,
properties or assets of the Servicer, or in any material
impairment of the
right or ability of the Servicer to carry on its business
substantially as
now conducted or which would draw into question the validity of
this
Agreement or the Mortgage Loans or of any action taken or to be
taken in
connection with the obligations of the Servicer contemplated
herein, or
which would materially impair the ability of the Servicer to
perform under
the terms of this Agreement.
The representations and warranties made pursuant to this
Section
2.03 shall survive delivery of the respective Mortgage Files to
the Trustee for
the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor as
to
the Mortgage Loans. The Depositor hereby represents and warrants
to the Trustee
with respect to the Mortgage Loans or each Mortgage Loan, as the
case may be, as
of the date hereof or such other date set forth herein that as
of the Closing
Date:
(i) The information set forth in the Mortgage Loan Schedule is
true
and correct in all material respects.
(ii) There are no delinquent taxes, ground rents,
governmental
assessments, insurance premiums, leasehold payments, including
assessments
payable in future installments or other outstanding charges
affecting the
lien priority of the related Mortgaged Property.
(iii) The terms of the Mortgage Note and the Mortgage have not
been
impaired, waived, altered or modified in any respect, except by
written
instruments, recorded in the applicable public recording office
if
necessary to maintain the lien priority of the Mortgage, and
which have
been delivered to the Trustee; the substance of any such
waiver,
alteration or modification has been approved by the insurer
under the
Primary Insurance Policy, if any, the title insurer, to the
extent
required by the related policy, and is reflected on the Mortgage
Loan
Schedule. No instrument of waiver, alteration or modification
has been
executed, and no Mortgagor has been released, in whole or in
part, except
in connection with an assumption agreement approved by the
insurer under
the Primary Insurance Policy, if any, the title insurer, to the
extent
required by the policy, and which assumption agreement has been
delivered
to the Trustee.
(iv) The Mortgage Note and the Mortgage are not subject to any
right
of rescission, set-off, counterclaim or defense, including the
defense of
usury, nor will the operation of any of the terms of the
Mortgage Note and
the Mortgage, or the exercise of any right thereunder, render
either the
Mortgage Note or the Mortgage unenforceable, in whole or in
part, or
subject to any right of rescission, set-off, counterclaim or
defense,
including the defense of usury and no such right of rescission,
set-off,
counterclaim or defense has been asserted with respect
thereto.
(v) All buildings upon the Mortgaged Property are insured by
an
insurer generally acceptable to prudent mortgage lending
institutions
against loss by fire, hazards of extended coverage and such
other hazards
as are customary in the area the Mortgaged Property is located,
pursuant
to insurance policies conforming to the requirements of
Customary
Servicing Procedures and this Agreement. All such insurance
policies
contain a standard mortgagee clause naming the originator of the
Mortgage
Loan, its successors and assigns as mortgagee and all premiums
thereon
have been paid. If the Mortgaged Property is in an area
identified on a
flood hazard map or flood insurance rate map issued by the
Federal
Emergency Management Agency as having special flood hazards (and
such
flood insurance has been made available), a flood insurance
policy meeting
the requirements of the current guidelines of the Federal
Insurance
Administration is in effect which policy conforms to the
requirements of
FNMA or FHLMC. The Mortgage obligates the Mortgagor thereunder
to maintain
all such insurance at the Mortgagor's cost and expense, and on
the
Mortgagor's failure to do so, authorizes the holder of the
Mortgage to
maintain such insurance at Mortgagor's cost and expense and to
seek
reimbursement therefor from the Mortgagor.
(vi) Any and all requirements of any federal, state or local
law
including, without limitation, usury, truth in lending, real
estate
settlement procedures, consumer credit protections, all
applicable
predatory and abusive lending laws, equal credit opportunity or
disclosure
laws applicable to the origination and servicing of Mortgage
Loan have
been complied with.
(vii) The Mortgage has not been satisfied, canceled,
subordinated or
rescinded, in whole or in part (other than as to Principal
Prepayments in
full which may have been received prior to the Closing Date),
and the
Mortgaged Property has not been released from the lien of the
Mortgage, in
whole or in part, nor has any instrument been executed that
would effect
any such satisfaction, cancellation, subordination, rescission
or release.
(viii) The Mortgage is a valid, existing and enforceable first
lien
on the Mortgaged Property, including all improvements on the
Mortgaged
Property subject only to (A) the lien of current real property
taxes and
assessments not yet due and payable, (B) covenants, conditions
and
restrictions, rights of way, easements and other matters of the
public
record as of the date of recording being acceptable to mortgage
lending
institutions generally and specifically referred to in the
lender's title
insurance policy delivered to the originator of the Mortgage
Loan and
which do not adversely affect the Appraised Value of the
Mortgaged
Property, (C) if the Mortgaged Property consists of Co-op
Shares, any lien
for amounts due to the cooperative housing corporation for
unpaid
assessments or charges or any lien of any assignment of rents
or
maintenance expenses secured by the real property owned by the
cooperative
housing corporation, and (D) other matters to which like
properties are
commonly subject which do not materially interfere with the
benefits of
the security intended to be provided by the Mortgage or the
use,
enjoyment, value or marketability of the related Mortgaged
Property. Any
security agreement, chattel mortgage or equivalent document
related to and
delivered in connection with the Mortgage Loan establishes and
creates a
valid, existing and enforceable first lien and first priority
security
interest on the property described therein and the Depositor has
the full
right to sell and assign the same to the Trustee.
(ix) The Mortgage Note and the related Mortgage are genuine and
each
is the legal, valid and binding obligation of the maker
thereof,
enforceable in accordance with its terms except as
enforceability may be
limited by (A) bankruptcy, insolvency, liquidation,
receivership,
moratorium, reorganization or other similar laws affecting the
enforcement
of the rights of creditors and (B) general principles of equity,
whether
enforcement is sought in a proceeding in equity or at law.
(x) All parties to the Mortgage Note and the Mortgage had
legal
capacity to enter into the Mortgage Loan and to execute and
deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the
Mortgage
have been duly and properly executed by such parties.
(xi) The proceeds of the Mortgage Loan have been fully disbursed
to
or for the account of the Mortgagor and there is no obligation
for the
Mortgagee to advance additional funds thereunder and any and
all
requirements as to completion of any on-site or off-site
improvements and
as to disbursements of any escrow funds therefor have been
complied with.
All costs fees and expenses incurred in making or closing the
Mortgage
Loan and the recording of the Mortgage have been paid, and the
Mortgagor
is not entitled to any refund of any amounts paid or due to the
Mortgagee
pursuant to the Mortgage Note or Mortgage.
(xii) To the best of the Depositor's knowledge, all parties
which
have had any interest in the Mortgage Loan, whether as
mortgagee,
assignee, pledgee or otherwise, are (or, during the period in
which they
held and disposed of such interest, were) in compliance with any
and all
applicable "doing business" and licensing requirements of the
laws of the
state wherein the Mortgaged Property is located.
(xiii)(A) the Mortgage Loan is covered by an ALTA lender's
title
insurance policy, acceptable to FNMA or FHLMC, issued by a title
insurer
acceptable to FNMA or FHLMC and qualified to do business in
the
jurisdiction where the Mortgaged Property is located, insuring
(subject to
the exceptions contained in (viii)(A) and (B) above) the Seller,
its
successors and assigns as to the first priority lien of the
Mortgage in
the original principal amount of the Mortgage Loan, (B) a title
search has
been done showing no lien (other than the exceptions contained
in
(viii)(A) and (B) above) on the related Mortgaged Property
senior to the
lien of the Mortgage or (C) in the case of any Mortgage Loan
secured by a
Mortgaged Property located in a jurisdiction where such policies
are
generally not available, an opinion of counsel of the type
customarily
rendered in such jurisdiction in lieu of title insurance is
instead
received. For each Mortgage Loan covered by a title insurance
policy (x)
the Depositor is the sole insured of such lender's title
insurance policy,
and such lender's title insurance policy is in full force and
effect and
will be in full force and effect upon the consummation of the
transactions
contemplated by this Agreement and (y) no claims have been made
under such
lender's title insurance policy, and the Depositor has not done,
by act or
omission, anything which would impair the coverage of such
lender's title
insurance policy.
(xiv) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note
and no event
which, with the passage of time or with notice and the
expiration of any
grace or cure period, would constitute a default, breach,
violation or
event of acceleration, and the Seller has not waived any
default, breach,
violation or event of acceleration.
(xv) As of the date of origination of the Mortgage Loan, there
had
been no mechanics' or similar liens or claims filed for work,
labor or
material (and no rights are outstanding that under law could
give rise to
such lien) affecting the relating Mortgaged Property which are
or may be
liens prior to, or equal or coordinate with, the lien of the
related
Mortgage.
(xvi) All improvements which were considered in determining
the
Appraised Value of the related Mortgaged Property lay wholly
within the
boundaries and building restriction lines of the Mortgaged
Property, and
no improvements on adjoining properties encroach upon the
Mortgaged
Property.
(xvii)The Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union,
insurance
company, or similar institution which is supervised and examined
by a
federal or state authority, or by a mortgagee approved by the
Secretary of
Housing and Urban Development pursuant to sections 203 and 211
of the
National Housing Act.
(xviii) Principal payments on the Mortgage Loan commenced no
more
than sixty days after the proceeds of the Mortgaged Loan were
disbursed.
The Mortgage Loans are 15 to 30-year adjustable rate mortgage
loans having
an original term to maturity of not more than 30 years, with
interest
payable in arrears on the first day of the month. Each Mortgage
Note
requires a monthly payment which is sufficient to fully amortize
the
original principal balance over the original term thereof and to
pay
interest at the related Mortgage Interest Rate. The Mortgage
Note does not
permit negative amortization.
(xix) There is no proceeding pending or, to the Depositor's
knowledge, threatened for the total or partial condemnation of
the
Mortgaged Property. The Mortgaged Property is in good repair and
is
undamaged by waste, fire, earthquake or earth movement,
windstorm, flood,
tornado or other casualty, so as to affect adversely the value
of the
Mortgaged Property as security for the Mortgage Loan or the use
for which
the premises were intended.
(xx) The Mortgage and related Mortgage Note contain customary
and
enforceable provisions such as to render the rights and remedies
of the
holder thereof adequate for the realization against the
Mortgaged Property
of the benefits of the security provided thereby, including (A)
in the
case of a Mortgage designated as a deed of trust, by trustee's
sale, and
(B) otherwise by judicial foreclosure. To the best of the
Depositor's
knowledge, following the date of origination of the Mortgage
Loan, the
Mortgaged Property has not been subject to any bankruptcy
proceeding or
foreclosure proceeding and the Mortgagor has not filed for
protection
under applicable bankruptcy laws. There is no homestead or other
exemption
or right available to the Mortgagor or any other person which
would
interfere with the right to sell the Mortgaged Property at a
trustee's
sale or the right to foreclose the Mortgage.
(xxi) Other than any Borrowers Protection Plan(R) addendum to
the
Mortgage Note of a BPP Mortgage Loan, the Mortgage Note and
Mortgage are
on forms acceptable to FNMA or FHLMC.
(xxii) The Mortgage Note is not and has not been secured by
any
collateral except the lien of the corresponding Mortgage on the
Mortgaged
Property and the security interest of any applicable security
agreement or
chattel mortgage referred to in (viii) above.
(xxiii) Each appraisal of the related Mortgaged Property is in
a
form acceptable to FNMA or FHLMC and such appraisal complies
with the
requirements of FIRREA, and was made and signed, prior to the
approval of
the Mortgage Loan application, by a Qualified Appraiser.
(xxiv) In the event the Mortgage constitutes a deed of trust,
a
trustee, duly qualified under applicable law to serve as such,
has been
properly designated and currently so serves, and no fees or
expenses are
or will become payable by the Trustee to the trustee under the
deed of
trust, except in connection with a trustee's sale after default
by the
Mortgagor.
(xxv) No Mortgage Loan is a graduated payment mortgage loan,
no
Mortgage Loan has a shared appreciation or other contingent
interest
feature, and no more than 0.00%, 0.00%, 0.92% and 0.00% (by
Cut-off Date
Principal Balance) of the Group 1, Group 2, Group 3 and Group 4
Mortgage
Loans, respectively, are Buy-Down Mortgage Loans.
(xxvi)The Mortgagor has received all disclosure materials
required
by applicable law with respect to the making of mortgage loans
of the same
type as the Mortgage Loan and rescission materials required by
applicable
law if the Mortgage Loan is a Refinance Mortgage Loan.
(xxvii) Each Primary Insurance Policy to which any Mortgage Loan
is
subject, will be issued by an insurer acceptable to FNMA or
FHLMC, which
insures that portion of the Mortgage Loan in excess of the
portion of the
Appraised Value of the Mortgaged Property required by FNMA. All
provisions
of such Primary Insurance Policy have been and are being
complied with,
such policy is in full force and effect, and all premiums due
thereunder
have been paid. Any Mortgage subject to any such Primary
Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance
and to pay
all premiums and charges in connection therewith at least
until
Loan-to-Value Ratio of such Mortgage Loan is reduced to less
than 80%. The
Mortgage Interest Rate for the Mortgage Loan does not include
any such
insurance premium.
(xxviii) To the best of the Depositor's knowledge as of the date
of
origination of the Mortgage Loan, (A) the Mortgaged Property is
lawfully
occupied under applicable law, (B) all inspections, licenses
and
certificates required to be made or issued with respect to all
occupied
portions of the Mortgaged Property and, with respect to the use
and
occupancy of the same, including but not limited to certificates
of
occupancy, have been made or obtained from the appropriate
authorities and
(C) no improvement located on or part of the Mortgaged Property
is in
violation of any zoning law or regulation.
(xxix)The Assignment of Mortgage (except with respect to any
Mortgage that has been recorded in the name of MERS or its
designee) is in
recordable form and is acceptable for recording under the laws
of the
jurisdiction in which the Mortgaged Property is located.
(xxx) All payments required to be made prior to the Cut-off Date
for
such Mortgage Loan under the terms of the Mortgage Note have
been made and
no Mortgage Loan has been more than 30 days delinquent more than
once in
the twelve month period immediately prior to the Cut-off
Date.
(xxxi) With respect to each Mortgage Loan, the Depositor or
Servicer
is in possession of a complete Mortgage File except for the
documents
which have been delivered to the Trustee or which have been
submitted for
recording and not yet returned.
(xxxii) Immediately prior to the transfer and assignment
contemplated herein, the Depositor was the sole owner and holder
of the
Mortgage Loans. The Mortgage Loans were not assigned or pledged
by the
Depositor and the Depositor had good and marketable title
thereto, and the
Depositor had full right to transfer and sell the Mortgage Loans
to the
Trustee free and clear of any encumbrance, participation
interest, lien,
equity, pledge, claim or security interest and had full right
and
authority subject to no interest or participation in, or
agreement with
any other party to sell or otherwise transfer the Mortgage
Loans.
(xxxiii) Any future advances made prior to the Cut-off Date
have
been consolidated with the outstanding principal amount secured
by the
Mortgage, and the secured principal amount, as consolidated,
bears a
single interest rate and single repayment term. The lien of the
Mortgage
securing the consolidated principal amount is expressly insured
as having
first lien priority by a title insurance policy, an endorsement
to the
policy insuring the mortgagee's consolidated interest or by
other title
evidence acceptable to FNMA and FHLMC. The consolidated
principal amount
does not exceed the original principal amount of the Mortgage
Loan.
(xxxiv) The Mortgage Loan was underwritten in accordance with
the
applicable Underwriting Guidelines in effect at the time of
origination
with exceptions thereto exercised in a reasonable manner.
(xxxv)If the Mortgage Loan is secured by a long-term
residential
lease, (1) the lessor under the lease holds a fee simple
interest in the
land; (2) the terms of such lease expressly permit the
mortgaging of the
leasehold estate, the assignment of the lease without the
lessor's consent
and the acquisition by the holder of the Mortgage of the rights
of the
lessee upon foreclosure or assignment in lieu of foreclosure or
provide
the holder of the Mortgage with substantially similar
protections; (3) the
terms of such lease do not (a) allow the termination thereof
upon the
lessee's default without the holder of the Mortgage being
entitled to
receive written notice of, and opportunity to cure, such
default, (b)
allow the termination of the lease in the event of damage or
destruction
as long as the Mortgage is in existence, (c) prohibit the holder
of the
Mortgage from being insured (or receiving proceeds of insurance)
under the
hazard insurance policy or policies relating to the Mortgaged
Property or
(d) permit any increase in the rent other than pre-established
increases
set forth in the lease; (4) the original term of such lease in
not less
than 15 years; (5) the term of such lease does not terminate
earlier than
five years after the maturity date of the Mortgage Note; and (6)
the
Mortgaged Property is located in a jurisdiction in which the use
of
leasehold estates in transferring ownership in residential
properties is a
widely accepted practice.
(xxxvi) The Mortgaged Property is located in the state
identified in
the Mortgage Loan Schedule and consists of a parcel of real
property with
a detached single family residence erected thereon, or a two-
to
four-family dwelling, or an individual condominium unit, or an
individual
unit in a planned unit development, or, in the case of Mortgage
Loans
secured by Co-op Shares, leases or occupancy agreements;
provided,
however, that any condominium project or planned unit
development
generally conforms with the applicable Underwriting Guidelines
regarding
such dwellings, and no residence or dwelling is a mobile home or
a
manufactured dwelling.
(xxxvii) The Depositor used no adverse selection procedures
in
selecting the Mortgage Loan for inclusion in the Trust
Estate.
(xxxviii) Each Mortgage Loan is a "qualified mortgage"
within
Section 860G(a)(3) of the Code.
(xxxix) With respect to each Mortgage where a lost note
affidavit
has been delivered to the Trustee in place of the related
Mortgage Note,
the related Mortgage Note is no longer in existence.
(xl) No Mortgage Loan is a "high cost" loan as defined under
any
federal, state or local law applicable to such Mortgage Loan at
the time
of its origination.
Notwithstanding the foregoing, no representations or warranties
are
made by the Depositor as to the environmental condition of any
Mortgaged
Property; the absence, presence or effect of hazardous wastes or
hazardous
substances on any Mortgaged Property; any casualty resulting
from the presence
or effect of hazardous wastes or hazardous substances on, near
or emanating from
any Mortgaged Property; the impact on Certificateholders of any
environmental
condition or presence of any hazardous substance on or near any
Mortgaged
Property; or the compliance of any Mortgaged Property with any
environmental
laws, nor is any agent, Person or entity otherwise affiliated
with the Depositor
authorized or able to make any such representation, warranty or
assumption of
liability relative to any Mortgaged Property. In addition, no
representations or
warranties are made by the Depositor with respect to the absence
or effect of
fraud in the origination of any Mortgage Loan.
It is understood and agreed that the representations and
warranties
set forth in this Section 2.04 shall survive delivery of the
respective Mortgage
Files to the Trustee or the Custodian and shall inure to the
benefit of the
Trustee, notwithstanding any restrictive or qualified
endorsement or assignment.
Upon discovery by either the Depositor, the Servicer, the
Trustee or
the Custodian that any of the representations and warranties set
forth in this
Section 2.04 is not accurate (referred to herein as a "breach")
and that such
breach materially and adversely affects the interests of the
Certificateholders
in the related 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 that any such breach that
causes the
Mortgage Loan not to be a "qualified mortgage" within the
meaning of Section
860G(a)(3) of the Code shall be deemed to materially and
adversely affect the
interests of the Certificateholders. Within 90 days of its
discovery or its
receipt of notice of any such breach, the Depositor shall cure
such breach in
all material respects or shall either (i) repurchase the
Mortgage Loan or any
property acquired in respect thereof from the Trustee at a price
equal to the
Repurchase Price or (ii) if within two years of the Closing
Date, substitute for
such Mortgage Loan in the manner described in Section 2.02;
provided that if the
breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as
defined in Section 860G(a)(3) of the Code, any such repurchase
or substitution
must occur within 90 days from the date the breach was
discovered. In addition
to the foregoing, if a breach of the representation set forth in
clause (vi) of
this Section 2.04 occurs as a result of a violation of an
applicable predatory
or abusive lending law, the Depositor shall reimburse the Trust
for all costs or
damages incurred by the Trust as a result of the violation of
such law (such
amount, the "Reimbursement Amount"). The Repurchase Price of any
repurchase
described in this paragraph, the Substitution Adjustment Amount,
if any, and any
Reimbursement Amount shall be deposited in the Servicer
Custodial Account. It is
understood and agreed that, except with respect to the second
preceding
sentence, the obligation of the Depositor to repurchase or
substitute for any
Mortgage Loan or Mortgaged Property as to which such a breach
has occurred and
is continuing shall constitute the sole remedy respecting such
breach available
to Certificateholders, or to the Trustee on behalf of
Certificateholders, and
such obligation shall survive until termination of the Trust
hereunder.
Section 2.05 Designation of Interests in the REMICs. The
Depositor
hereby designates the Classes of Senior Certificates (other than
the Class 1-A-R
and Class 1-A-LR Certificates) and the Classes of Class B
Certificates as
"regular interests" and the Class 1-A-R Certificate as the
single class of
"residual interest" in the Upper-Tier REMIC for the purposes of
Code Sections
860G(a)(1) and 860G(a)(2), respectively. The Depositor hereby
further designates
the Class 1-L Interest, Class 1-LS Interest, Class 1-LIO
Interest, Class 2-L
Interest, Class 2-LS Interest, Class 2-LIO Interest, Class 3-L
Interest, Class
3-LS Interest, Class 3-LIO Interest, Class 4-L Interest, Class
4-LS Interest and
Class 4-LIO Interest as classes of "regular interests" and the
Class 1-A-LR
Certificate as the single class of "residual interest" in the
Lower-Tier REMIC
for the purposes of Code Sections 860G(a)(1) and 860G(a)(2),
respectively.
Section 2.06 Designation of Start-up Day. The Closing Date is
hereby
designated as the "start-up day" of each of the Upper-Tier REMIC
and Lower-Tier
REMIC within the meaning of Section 860G(a)(9) of the Code.
Section 2.07 REMIC Certificate Maturity Date. Solely for
purposes of
satisfying Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest
possible maturity date" of the regular interests in the
Upper-Tier REMIC and
Lower-Tier REMIC is January 25, 2035.
Section 2.08 Execution and Delivery of Certificates. The Trustee
(i)
acknowledges the issuance of and hereby declares that it holds
the
Uncertificated Lower-Tier Interests on behalf of the Upper-Tier
REMIC and the
Certificateholders and (ii) has executed and delivered to or
upon the order of
the Depositor, in exchange for the Mortgage Loans and
Uncertificated Lower-Tier
Interests, together with all other assets included in the
definition of "Trust
Estate," receipt of which is hereby acknowledged, Certificates
in authorized
denominations which, together with the Uncertificated Lower-Tier
Interests,
evidence ownership of the entire Trust Estate.
Section 2.09 Repurchase of Converted Mortgage LoansSection 2.10
.
The Depositor shall repurchase from the Trust any Converted
Mortgage Loan prior
to the first Due Date for such Mortgage Loan following the
Conversion Date. Any
such repurchase shall be at the Repurchase Price. The Repurchase
Price for any
repurchased Converted Mortgage Loan shall be deposited by the
Depositor in the
Servicer Custodial Account and, upon receipt by the Trustee of
written
notification of any such deposit signed by an officer of the
Depositor and a
Request for Release, the Trustee shall release to the Depositor
the related
Mortgage File and shall execute and deliver such instruments of
transfer or
assignment prepared by the Depositor, in each case without
recourse, as shall be
necessary to vest in the Depositor legal and beneficial
ownership of such
Converted Mortgage Loan.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. For and on
behalf
of the Certificateholders, the Servicer shall service and
administer the
Mortgage Loans, all in accordance with the terms of this
Agreement, Customary
Servicing Procedures, applicable law and the terms of the
Mortgage Notes and
Mortgages. In connection with such servicing and administration,
the Servicer
shall have full power and authority, acting alone and/or through
Subservicers as
provided in Section 3.02, to do or cause to be done any and all
things that it
may deem necessary or desirable in connection with such
servicing and
administration including, but not limited to, the power and
authority, subject
to the terms hereof, (a) to execute and deliver, on behalf of
the
Certificateholders and the Trustee, customary consents or
waivers and other
instruments and documents, (b) to consent, with respect to the
Mortgage Loans it
services, to transfers of any Mortgaged Property and assumptions
of the Mortgage
Notes and related Mortgages (but only in the manner provided in
this Agreement),
(c) to collect any Insurance Proceeds and other Liquidation
Proceeds relating to
the Mortgage Loans it services, and (d) to effectuate
foreclosure or other
conversion of the ownership of the Mortgaged Property securing
any Mortgage Loan
it services. The Servicer shall represent and protect the
interests of the Trust
in the same manner as it protects its own interests in mortgage
loans in its own
portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan and
shall not make or permit any modification, waiver or amendment
of any term of
any Mortgage Loan, except as provided pursuant to Section 3.21.
Without limiting
the generality of the foregoing, the Servicer, in its own name
or in the name of
any Subservicer or the Depositor and the Trustee, is hereby
authorized and
empowered by the Depositor and the Trustee, when the Servicer or
any
Subservicer, as the case may be, believes it appropriate in its
reasonable
judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the
Certificateholders or any of them, any and all instruments of
satisfaction or
cancellation, or of partial or full release or discharge, and
all other
comparable instruments, with respect to the Mortgage Loans it
services, and with
respect to the related Mortgaged Properties held for the benefit
of the
Certificateholders. The Servicer shall prepare and deliver to
the Depositor
and/or the Trustee such documents requiring execution and
delivery by either or
both of them as are necessary or appropriate to enable the
Servicer to service
and administer the Mortgage Loans it services to the extent that
the Servicer is
not permitted to execute and deliver such documents pursuant to
the preceding
sentence. Upon receipt of such documents, the Depositor and/or
the Trustee, upon
the direction of the Servicer, shall promptly execute such
documents and deliver
them to the Servicer.
In accordance with the standards of the preceding paragraph,
the
Servicer shall advance or cause to be advanced funds as
necessary for the
purpose of effecting the payment of taxes and assessments on the
Mortgaged
Properties relating to the Mortgage Loans it services, which
Servicing Advances
shall be reimbursable in the first instance from related
collections from the
Mortgagors pursuant to Section 3.09, and further as provided in
Section 3.11.
The costs incurred by the Servicer, if any, in effecting the
timely payments of
taxes and assessments on the Mortgaged Properties and related
insurance premiums
shall not, for the purpose of calculating monthly distributions
to the
Certificateholders, be added to the Stated Principal Balances of
the related
Mortgage Loans, notwithstanding that the terms of such Mortgage
Loans so permit.
The relationship of the Servicer (and of any successor to
the
Servicer as servicer under this Agreement) to the Trustee under
this Agreement
is intended by the parties to be that of an independent
contractor and not that
of a joint venturer, partner or agent.
Section 3.02 Subservicing; Enforcement of the Obligations of
Servicer. (a) The Servicer may arrange for the subservicing of
any Mortgage Loan
it services by a Subservicer pursuant to a Subservicing
Agreement; provided,
however, that such subservicing arrangement and the terms of the
related
Subservicing Agreement must provide for the servicing of such
Mortgage Loan in a
manner consistent with the servicing arrangements contemplated
hereunder.
Notwithstanding the provisions of any Subservicing Agreement,
any of the
provisions of this Agreement relating to agreements or
arrangements between the
Servicer and a Subservicer or reference to actions taken through
a Subservicer
or otherwise, the Servicer shall remain obligated and liable to
the Depositor,
the Trustee and the Certificateholders for the servicing and
administration of
the Mortgage Loans it services in accordance with the provisions
of this
Agreement without diminution of such obligation or liability by
virtue of such
Subservicing Agreements or arrangements or by virtue of
indemnification from the
Subservicer and to the same extent and under the same terms and
conditions as if
the Servicer alone were servicing and administering those
Mortgage Loans. All
actions of each Subservicer performed pursuant to the related
Subservicing
Agreement shall be performed as agent of the Servicer with the
same force and
effect as if performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed
to
have received any collections, recoveries or payments with
respect to the
Mortgage Loans it services that are received by a Subservicer
regardless of
whether such payments are remitted by the Subservicer to the
Servicer.
(c) As part of its servicing activities hereunder, the Servicer,
for
the benefit of the Trustee and the Certificateholders, shall use
its best
reasonable efforts to enforce the obligations of each
Subservicer engaged by the
Servicer under the related Subservicing Agreement, to the extent
that the
non-performance of any such obligation would have a material and
adverse effect
on a Mortgage Loan. Such enforcement, including, without
limitation, the legal
prosecution of claims, termination of Subservicing Agreements
and the pursuit of
other appropriate remedies, shall be in such form and carried
out to such an
extent and at such time as the Servicer, in its good faith
business judgment,
would require were it the owner of the related Mortgage Loans.
The Servicer
shall pay the costs of such enforcement at its own expense, and
shall be
reimbursed therefor only (i) from a general recovery resulting
from such
enforcement to the extent, if any, that such recovery exceeds
all amounts due in
respect of the related Mortgage Loan or (ii) from a specific
recovery of costs,
expenses or attorneys fees against the party against whom such
enforcement is
directed.
(d) Any Subservicing Agreement entered into by the Servicer
shall
provide that it may be assumed or terminated by the Trustee, if
the Trustee has
assumed the duties of the Servicer, or any successor Servicer,
at the Trustee's
or successor Servicer's option, as applicable, without cost or
obligation to the
assuming or terminating party or the Trust Estate, upon the
assumption by such
party of the obligations of the Servicer pursuant to Section
8.05.
Section 3.03 Fidelity Bond; Errors and Omissions Insurance.
The
Servicer shall maintain, at its own expense, a blanket fidelity
bond and an
errors and omissions insurance policy, with broad coverage on
all officers,
employees or other persons acting in any capacity requiring such
persons to
handle funds, money, documents or papers relating to the
Mortgage Loans it
services. These policies must insure the Servicer against losses
resulting from
dishonest or fraudulent acts committed by the Servicer's
personnel, any
employees of outside firms that provide data processing services
for the
Servicer, and temporary contract employees or student interns.
Such fidelity
bond shall also protect and insure the Servicer against losses
in connection
with the release or satisfaction of a Mortgage Loan without
having obtained
payment in full of the indebtedness secured thereby. No
provision of this
Section 3.03 requiring such fidelity bond and errors and
omissions insurance
shall diminish or relieve the Servicer from its duties and
obligations as set
forth in this Agreement. The minimum coverage under any such
bond and insurance
policy shall be at least equal to the corresponding amounts
required by FNMA in
the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers' &
Servicers' Guide,
as amended or restated from time to time, or in an amount as may
be permitted to
the Servicer by express waiver of FNMA or FHLMC.
Section 3.04 Access to Certain Documentation. The Servicer
shall
provide to the OTS and the FDIC and to comparable regulatory
authorities
supervising Holders of Subordinate Certificates and the
examiners and
supervisory agents of the OTS, the FDIC and such other
authorities, access to
the documentation required by applicable regulations of the OTS
and the FDIC
with respect to the Mortgage Loans. Such access shall be
afforded without
charge, but only upon reasonable and prior written request and
during normal
business hours at the offices designated by the Servicer.
Nothing in this
Section 3.04 shall limit the obligation of the Servicer to
observe any
applicable law and the failure of the Servicer to provide access
as provided in
this Section 3.04 as a result of such obligation shall not
constitute a breach
of this Section 3.04.
Section 3.05 Maintenance of Primary Insurance Policy;
Claims;
Collections of BPP Mortgage Loan Payments. (a) With respect to
each Mortgage
Loan with a Loan-to-Value Ratio in excess of 80% or such other
Loan-to-Value
Ratio as may be required by law, the Servicer shall, without any
cost to the
Trust Estate, maintain or cause the Mortgagor to maintain in
full force and
effect a Primary Insurance Policy insuring that portion of the
Mortgage Loan in
excess of a percentage in conformity with FNMA requirements. The
Servicer shall
pay or shall cause the Mortgagor to pay the premium thereon on a
timely basis,
at least until the Loan-to-Value Ratio of such Mortgage Loan is
reduced to 80%
or such other Loan-to-Value Ratio as may be required by law. If
such Primary
Insurance Policy is terminated, the Servicer shall obtain from
another insurer a
comparable replacement policy, with a total coverage equal to
the remaining
coverage of such terminated Primary Insurance Policy. If the
insurer shall cease
to be an insurer acceptable to FNMA or FHLMC, the Servicer shall
notify the
Trustee in writing, it being understood that the Servicer shall
not have any
responsibility or liability for any failure to recover under the
Primary
Insurance Policy for such reason. If the Servicer determines
that recoveries
under the Primary Insurance Policy are jeopardized by the
financial condition of
the insurer, the Servicer shall obtain from another insurer
which meets the
requirements of this Section 3.05 a replacement insurance
policy. The Servicer
shall not take any action that would result in noncoverage under
any applicable
Primary Insurance Policy of any loss that, but for the actions
of the Servicer,
would have been covered thereunder. In connection with any
assumption or
substitution agreement entered into or to be entered into
pursuant to Section
3.13, the Servicer shall promptly notify the insurer under the
related Primary
Insurance Policy, if any, of such assumption or substitution of
liability in
accordance with the terms of such Primary Insurance Policy and
shall take all
actions which may be required by such insurer as a condition to
the continuation
of coverage under such Primary Insurance Policy. If such Primary
Insurance
Policy is terminated as a result of such assumption or
substitution of
liability, the Servicer shall obtain a replacement Primary
Insurance Policy as
provided above.
In connection with its activities as servicer, the Servicer
agrees
to prepare and present, on behalf of itself, the Trustee and
the
Certificateholders, claims to the insurer under any Primary
Insurance Policy in
a timely fashion in accordance with the terms of such Primary
Insurance Policy
and, in this regard, to take such action as shall be necessary
to permit
recovery under any Primary Insurance Policy respecting a
defaulted Mortgage
Loan. Pursuant to Section 3.09(a), any amounts collected by the
Servicer under
any Primary Insurance Policy shall be deposited in the related
Escrow Account,
subject to withdrawal pursuant to Section 3.09(b).
The Servicer will comply with all provisions of applicable state
and
federal law relating to the cancellation of, or collection of
premiums with
respect to, Primary Mortgage Insurance, including, but not
limited to, the
provisions of the Homeowners Protection Act of 1998, and all
regulations
promulgated thereunder, as amended from time to time.
(b) The Servicer shall take all actions necessary to collect,
on
behalf of the Trust, any BPP Mortgage Loan Payments required to
be made to the
Trust pursuant to the Mortgage Loan Purchase Agreement.
Section 3.06 Rights of the Depositor and the Trustee in Respect
of
the Servicer. The Depositor may, but is not obligated to,
enforce the
obligations of the Servicer hereunder and may, but is not
obligated to, perform,
or cause a designee to perform, any defaulted obligation of the
Servicer
hereunder and in connection with any such defaulted obligation
to exercise the
related rights of the Servicer hereunder; provided that the
Servicer shall not
be relieved of any of its obligations hereunder by virtue of
such performance by
the Depositor or its designee. Neither the Trustee nor the
Depositor shall have
any responsibility or liability for any action or failure to act
by the Servicer
nor shall the Trustee or the Depositor be obligated to supervise
the performance
of the Servicer hereunder or otherwise.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans
involving a Subservicer
in its capacity as such shall be deemed to be between the
Subservicer and the
Servicer alone, and the Trustee and Certificateholders shall not
be deemed
parties thereto and shall have no claims, rights, obligations,
duties or
liabilities with respect to the Subservicer except as set forth
in Section 3.07.
The Servicer shall be solely liable for all fees owed by it to
any Subservicer,
irrespective of whether the Servicer's compensation pursuant to
this Agreement
is sufficient to pay such fees.
Section 3.07 Trustee to Act as Servicer. If the Servicer shall
for
any reason no longer be the Servicer hereunder (including by
reason of an Event
of Default), the Trustee shall within 90 days of such time,
assume, if it so
elects, or shall appoint a successor Servicer to assume, all of
the rights and
obligations of the Servicer hereunder arising thereafter (except
that the
Trustee shall not be (a) liable for losses of the Servicer
pursuant to Section
3.12 or any acts or omissions of the predecessor Servicer
hereunder, (b)
obligated to make Advances if it is prohibited from doing so by
applicable law
or (c) deemed to have made any representations and warranties of
the Servicer
hereunder). Any such assumption shall be subject to Sections
7.02 and 8.05. If
the Servicer shall for any reason no longer be the Servicer
(including by reason
of any Event of Default), the Trustee or the successor Servicer
may elect to
succeed to any rights and obligations of the Servicer under each
Subservicing
Agreement or may terminate each Subservicing Agreement. If it
has elected to
assume the Subservicing Agreement, the Trustee or the successor
Servicer shall
be deemed to have assumed all of the Servicer's interest therein
and to have
replaced the Servicer as a party to any Subservicing Agreement
entered into by
the Servicer as contemplated by Section 3.02 to the same extent
as if the
Subservicing Agreement had been assigned to the assuming party
except that the
Servicer shall not be relieved of any liability or obligations
under any such
Subservicing Agreement.
The Servicer that is no longer the Servicer hereunder shall,
upon
request of the Trustee, but at the expense of such predecessor
Servicer, deliver
to the assuming party all documents and records relating to each
Subservicing
Agreement or substitute servicing agreement and the Mortgage
Loans then being
serviced thereunder and an accounting of amounts collected or
held by it and
otherwise use its best efforts to effect the orderly and
efficient transfer of
such substitute Subservicing Agreement to the assuming party.
The Trustee shall
be entitled to be reimbursed from the predecessor Servicer (or
the Trust if the
predecessor Servicer is unable to fulfill its obligations
hereunder) for all
Servicing Transfer Costs.
Section 3.08 Collection of Mortgage Loan Payments; Servicer
Custodial Account and Certificate Account. (a) Continuously from
the date hereof
until the principal and interest on all Mortgage Loans are paid
in full, the
Servicer will proceed diligently, in accordance with this
Agreement, to collect
all payments due under each of the Mortgage Loans it services
when the same
shall become due and payable. Further, the Servicer will in
accordance with all
applicable law and Customary Servicing Procedures ascertain and
estimate taxes,
assessments, fire and hazard insurance premiums, mortgage
insurance premiums and
all other charges with respect to the Mortgage Loans it services
that, as
provided in any Mortgage, will become due and payable to the end
that the
installments payable by the Mortgagors will be sufficient to pay
such charges as
and when they become due and payable. Consistent with the
foregoing, the
Servicer may in its discretion (i) waive any late payment charge
or any
prepayment charge or penalty interest in connection with the
prepayment of a
Mortgage Loan it services and (ii) extend the due dates for
payments due on a
Mortgage Note for a period not greater than 120 days; provided,
however, that
the Servicer cannot extend the maturity of any such Mortgage
Loan past the date
on which the final payment is due on the latest maturing
Mortgage Loan as of the
Cut-off Date. In the event of any such arrangement, the Servicer
shall make
Periodic Advances on the related Mortgage Loan in accordance
with the provisions
of Section 3.20 during the scheduled period in accordance with
the amortization
schedule of such Mortgage Loan without modification thereof by
reason of such
arrangements. The Servicer shall not be required to institute or
join in
litigation with respect to collection of any payment (whether
under a Mortgage,
Mortgage Note or otherwise or against any public or governmental
authority with
respect to a taking or condemnation) if it reasonably believes
that enforcing
the provision of the Mortgage or other instrument pursuant to
which such payment
is required is prohibited by applicable law.
(b) The Servicer shall establish and maintain the Servicer
Custodial
Account. The Servicer shall deposit or cause to be deposited
into the Servicer
Custodial Account, all on a daily basis within one Business Day
of receipt,
except as otherwise specifically provided herein, the following
payments and
collections remitted by Subservicers or received by the Servicer
in respect of
the Mortgage Loans subsequent to the Cut-off Date (other than in
respect of
principal and interest due on the Mortgage Loans on or before
the Cut-off Date)
and the following amounts required to be deposited hereunder
with respect to the
Mortgage Loans it services:
(i) all payments on account of principal of the Mortgage
Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net
of the Servicing Fee;
(iii) (A) all Insurance Proceeds and Liquidation Proceeds,
other
than Insurance Proceeds to be (1) applied to the restoration or
repair of
the Mortgaged Property, (2) released to the Mortgagor in
accordance with
Customary Servicing Procedures or (3) required to be deposited
to an
Escrow Account pursuant to Section 3.09(a), and other than any
Excess
Proceeds and (B) any Insurance Proceeds released from an Escrow
Account
pursuant to Section 3.09(b)(iv);
(iv) any amount required to be deposited by the Servicer
pursuant to
Section 3.08(d) in connection with any losses on Permitted
Investments
with respect to the Servicer Custodial Account;
(v) any amounts required to be deposited by the Servicer
pursuant to
Section 3.14;
(vi) all Repurchase Prices, all Substitution Adjustment Amounts
and
all Reimbursement Amounts, to the extent received by the
Servicer;
(vii) Periodic Advances made by the Servicer pursuant to
Section
3.20 and any Compensating Interest;
(viii) any Buy-Down Funds required to be deposited pursuant
to
Section 3.23; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposits to the Servicer
Custodial
Account by the Servicer shall be exclusive, it being understood
and agreed that,
without limiting the generality of the foregoing, Ancillary
Income need not be
deposited by the Servicer. If the Servicer shall deposit in the
Servicer
Custodial Account any amount not required to be deposited, it
may at any time
withdraw or direct the institution maintaining the Servicer
Custodial Account to
withdraw such amount from the Servicer Custodial Account, any
provision herein
to the contrary notwithstanding. The Servicer 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 Servicer or serviced by the
Servicer on behalf
of others; provided that such commingling of funds shall not be
permitted at any
time during which Fitch's senior long-term unsecured debt rating
of Bank of
America is below "A". Notwithstanding such commingling of funds,
the Servicer
shall keep records that accurately reflect the funds on deposit
in the Servicer
Custodial Account that have been identified by it as being
attributable to the
Mortgage Loans it services. The Servicer shall maintain adequate
records with
respect to all withdrawals made pursuant to this Section 3.08.
All funds
required to be deposited in the Servicer Custodial Account shall
be held in
trust for the Certificateholders until withdrawn in accordance
with Section
3.11.
(c) The Trustee shall establish and maintain, on behalf of
the
Certificateholders, the Certificate Account, which shall be
deemed to consist of
five sub-accounts. The Trustee shall, promptly upon receipt,
deposit in the
Certificate Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee
pursuant to Section 3.11(a)(viii);
(ii) any amount paid by the Trustee pursuant to Section 3.08(d)
in
connection with any losses on Permitted Investments with respect
to the
Certificate Account; and
(iii) any other amounts deposited hereunder which are required
to be
deposited in the Certificate Account.
If the Servicer shall remit any amount not required to be
remitted,
it may at any time direct the Trustee to withdraw such amount
from the
Certificate Account, any provision herein to the contrary
notwithstanding. Such
direction may be accomplished by delivering an Officer's
Certificate to the
Trustee which describes the amounts deposited in error in the
Certificate
Account. All funds required to be deposited in the Certificate
Account shall be
held by the Trustee in trust for the Certificateholders until
disbursed in
accordance with this Agreement or withdrawn in accordance with
Section 3.11. In
no event shall the Trustee incur liability for withdrawals from
the Certificate
Account at the direction of a the Servicer.
(d) Each institution at which the Servicer Custodial Account or
the
Certificate Account is maintained shall invest the funds therein
as directed in
writing by the Servicer, in the case of the Servicer Custodial
Account, or the
Trustee, in the case of the Certificate Account, in Permitted
Investments, which
shall mature not later than (i) in the case of the Servicer
Custodial Account,
the Business Day next preceding the related Remittance Date
(except that if such
Permitted Investment is an obligation of the institution that
maintains such
account, then such Permitted Investment shall mature not later
than such
Remittance Date) and (ii) in the case of the Certificate
Account, the Business
Day next preceding the Distribution Date (except that if such
Permitted
Investment is an obligation of the institution that maintains
such account, then
such Permitted Investment shall mature not later than such
Distribution Date)
and, in each case, shall not be sold or disposed of prior to its
maturity. All
such Permitted Investments shall be made in the name of the
Trustee, for the
benefit of the Certificateholders. All Servicer Custodial
Account Reinvestment
Income shall be for the benefit of the Servicer as part of its
Servicing
Compensation and shall be retained by it monthly as provided
herein. All income
or gain (net of any losses) realized from any such investment of
funds on
deposit in the Certificate Account shall be for the benefit of
the Trustee as
additional compensation and shall be retained by it monthly as
provided herein.
The amount of any losses realized in the Servicer Custodial
Account or the
Certificate Account incurred in any such account in respect of
any such
investments shall promptly be deposited by the Servicer in the
Servicer
Custodial Account or by the Trustee in the Certificate Account,
as applicable.
(e) The Servicer shall give notice to the Trustee of any
proposed
change of the location of the Servicer Custodial Account
maintained by the
Servicer not later than 30 days and not more than 45 days prior
to any change
thereof. The Trustee shall give notice to the Servicer, each
Rating Agency and
the Depositor of any proposed change of the location of the
Certificate Account
not later than 30 days after and not more than 45 days prior to
any change
thereof. The creation of the Servicer Custodial Account shall be
evidenced by a
certification substantially in the form of Exhibit F hereto. A
copy of such
certification shall be furnished to the Trustee.
(f) The Trustee shall designate the Upper-Tier Certificate
Sub-Account as a sub-account of the Certificate Account. On each
Distribution
Date (other than the Final Distribution Date, if such Final
Distribution Date is
in connection with a purchase of the assets of the Trust Estate
by the
Depositor), the Trustee shall, from funds available on deposit
in the
Certificate Account, be deemed to deposit into the Upper-Tier
Certificate
Sub-Account, the Lower-Tier Distribution Amount.
Section 3.09 Collection of Taxes, Assessments and Similar
Items;
Escrow Accounts. (a) To the extent required by the related
Mortgage Note and not
violative of current law, the Servicer shall segregate and hold
all funds
collected and received pursuant to each Mortgage Loan which
constitute Escrow
Payments in trust separate and apart from any of its own funds
and general
assets and for such purpose shall establish and maintain one or
more escrow
accounts (collectively, the "Escrow Account"), titled "Bank of
America, N.A., in
trust for registered holders of Banc of America Mortgage
Securities, Inc.
Mortgage Pass-Through Certificates, Series 2004-L and various
Mortgagors." The
Escrow Account shall be established with a commercial bank, a
savings bank or a
savings and loan association that meets the guidelines set forth
by FNMA or
FHLMC as an eligible institution for escrow accounts and which
is a member of
the Automated Clearing House. In any case, the Escrow Account
shall be insured
by the FDIC to the fullest extent permitted by law. The Servicer
shall deposit
in the appropriate Escrow Account on a daily basis, and retain
therein: (i) all
Escrow Payments collected on account of the Mortgage Loans, (ii)
all amounts
representing proceeds of any hazard insurance policy which are
to be applied to
the restoration or repair of any related Mortgaged Property and
(iii) all
amounts representing proceeds of any Primary Insurance Policy.
Nothing herein
shall require the Servicer to compel a Mortgagor to establish an
Escrow Account
in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts
may
be made by the Servicer only (i) to effect timely payment of
taxes, assessments,
mortgage insurance premiums, fire and hazard insurance premiums,
condominium or
PUD association dues, or comparable items constituting Escrow
Payments for the
related Mortgage, (ii) to reimburse the Servicer out of related
Escrow Payments
made with respect to a Mortgage Loan for any Servicing Advance
made by the
Servicer pursuant to Section 3.09(c) with respect to such
Mortgage Loan, (iii)
to refund to any Mortgagor any sums determined to be overages,
(iv) for transfer
to the Servicer Custodial Account upon default of a Mortgagor or
in accordance
with the terms of the related Mortgage Loan and if permitted by
applicable law,
(v) for application to restore or repair the Mortgaged Property,
(vi) to pay to
the Mortgagor, to the extent required by law, any interest paid
on the funds
deposited in the Escrow Account, (vii) to pay to itself any
interest earned on
funds deposited in the Escrow Account (and not required to be
paid to the
Mortgagor), (viii) to the extent permitted under the terms of
the related
Mortgage Note and applicable law, to pay late fees with respect
to any Monthly
Payment which is received after the applicable grace period,
(ix) to withdraw
suspense payments that are deposited into the Escrow Account,
(x) to withdraw
any amounts inadvertently deposited in the Escrow Account or
(xi) to clear and
terminate the Escrow Account upon the termination of this
Agreement in
accordance with Section 10.01. Any Escrow Account shall not be a
part of the
Trust Estate.
(c) With respect to each Mortgage Loan, the Servicer shall
maintain
accurate records reflecting the status of taxes, assessments and
other charges
which are or may become a lien upon the Mortgaged Property and
the status of
Primary Insurance Policy premiums and fire and hazard insurance
coverage. The
Servicer shall obtain, from time to time, all bills for the
payment of such
charges (including renewal premiums) and shall effect payment
thereof prior to
the applicable penalty or termination date and at a time
appropriate for
securing maximum discounts allowable, employing for such purpose
deposits of the
Mortgagor in the Escrow Account, if any, which shall have been
estimated and
accumulated by the Servicer in amounts sufficient for such
purposes, as allowed
under the terms of the Mortgage. To the extent that a Mortgage
does not provide
for Escrow Payments, the Servicer shall determine that any such
payments are
made by the Mortgagor. The Servicer assumes full responsibility
for the timely
payment of all such bills and shall effect timely payments of
all such bills
irrespective of each Mortgagor's faithful performance in the
payment of same or
the making of the Escrow Payments. The Servicer shall advance
any such payments
that are not timely paid, but the Servicer shall be required so
to advance only
to the extent that such Servicing Advances, in the good faith
judgment of the
Servicer, will be recoverable by the Servicer out of Insurance
Proceeds,
Liquidation Proceeds or otherwise.
Section 3.10 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall afford the
Trustee reasonable
access to all records and documentation regarding the Mortgage
Loans and all
accounts, insurance information and other matters relating to
this Agreement,
such access being afforded without charge, but only upon
reasonable request and
during normal business hours at the office designated by the
Servicer.
Upon reasonable advance notice in writing, the Servicer will
provide
to each Certificateholder which is a savings and loan
association, bank or
insurance company certain reports and reasonable access to
information and
documentation regarding the Mortgage Loans sufficient to permit
such
Certificateholder to comply with applicable regulations of the
OTS or other
regulatory authorities with respect to investment in the
Certificates; provided
that the Servicer shall be entitled to be reimbursed by each
such
Certificateholder for actual expenses incurred by the Servicer
in providing such
reports and access.
Section 3.11 Permitted Withdrawals from the Servicer
Custodial
Account and Certificate Account. (a) The Servicer may from time
to time make
withdrawals from the Servicer Custodial Account, for the
following purposes:
(i) to pay to the Servicer (to the extent not previously
retained),
the Servicing Compensation to which it is entitled pursuant to
Section
3.17;
(ii) to reimburse the Servicer for unreimbursed Advances made by
it,
such right of reimbursement pursuant to this clause (ii) being
limited to
amounts received on the Mortgage Loan(s) (including amounts
received in
respect of BPP Mortgage Loan Payments for such Mortgage Loan) in
respect
of which any such Advance was made;
(iii) to reimburse the Servicer for any Nonrecoverable
Advance
previously made, such right of reimbursement pursuant to this
clause (iii)
being limited to amounts received on the Mortgage Loans in the
same Loan
Group as the Mortgage Loan(s) in respect of which such
Nonrecoverable
Advance was made;
(iv) to reimburse the Servicer for Insured Expenses from the
related
Insurance Proceeds; (v) to pay to the purchaser, with respect to
each
Mortgage Loan or REO Property that has been purchased pursuant
to Section
2.02, 2.04 or 2.09, all amounts received thereon after the date
of such
purchase;
(vi) to reimburse the Servicer or the Depositor for expenses
incurred by any of them and reimbursable pursuant to Section
7.03;
(vii) to withdraw any amount deposited in the Servicer
Custodial
Account and not required to be deposited therein;
(viii) on or prior to the Remittance Date, to withdraw an
amount
equal to the related Pool Distribution Amount (less, at the
Servicer's
option, but only for so long as Bank of America is the Servicer
and Bank
of America or an affiliate is the sole Holder of the Class 1-IO,
Class
2-IO, Class 3-IO and Class 4-IO Certificates, an amount up to
the sum of
the Interest Distribution Amounts for such Certificates for the
related
Distribution Date, which amount shall be withdrawn on the
related
Distribution Date and remitted to the Holders of the Class 1-IO,
Class
2-IO, Class 3-IO and Class 4-IO Certificates on behalf of the
Trustee),
the related Trustee Fee and any other amounts due to the Trustee
under
this Agreement (other than pursuant to Section 3.11(b)(ii)) for
such
Distribution Date, to the extent on deposit, and remit such
amount in
immediately available funds to the Trustee for deposit in the
Certificate
Account; and
(ix) to clear and terminate the Servicer Custodial Account
upon
termination of this Agreement pursuant to Section 10.01.
The Servicer shall keep and maintain separate accounting, on
a
Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any
withdrawal from the Servicer Custodial Account pursuant to
clauses (i), (ii),
(iv) and (v). The Servicer shall keep and maintain such separate
accounting for
each Loan Group. Prior to making any withdrawal from the
Servicer Custodial
Account pursuant to clause (iii), the Servicer shall deliver to
the Trustee an
Officer's Certificate of a Servicing Officer indicating the
amount of any
previous Advance determined by the Servicer to be a
Nonrecoverable Advance and
identifying the related Mortgage Loan(s) and their respective
portions of such
Nonrecoverable Advance.
(b) The Trustee shall be deemed to withdraw funds from the
applicable Certificate Account sub-accounts to deposit the
Lower-Tier
Distribution Amount into the Upper-Tier Certificate Sub-Account
and for
distributions to Certificateholders in the manner specified in
this Agreement.
In addition, the Trustee may from time to time make withdrawals
from the
Certificate Account for the following purposes:
(i) to pay to itself the Trustee Fee and any other amounts due
to
the Trustee under this Agreement for the related Distribution
Date;
(ii) to pay to itself as additional compensation earnings on
or
investment income with respect to funds in the Certificate
Account;
(iii) to withdraw and return to the Servicer any amount
deposited in
the Certificate Account and not required to be deposited
therein; and
(iv) to clear and terminate the Certificate Account upon
termination
of this Agreement pursuant to Section 10.01.
(c) On each Distribution Date, funds on deposit in the
Certificate
Account and deemed to be on deposit in the Upper-Tier
Certificate Sub-Account
shall be used to make payments on the Regular Certificates, the
Class 1-A-R
Certificate, the Class 1-IO Certificates, Class 2-IO
Certificates, Class 3-IO
Certificates and Class 4-IO Certificates as provided in Sections
5.01 and 5.02.
The Certificate Account shall be cleared and terminated upon
termination of this
Agreement pursuant to Section 10.01.
Section 3.12 Maintenance of Hazard Insurance. The Servicer
shall
cause to be maintained for each Mortgage Loan, fire and hazard
insurance with
extended coverage customary in the area where the Mortgaged
Property is located
in an amount which is at least equal to the lesser of (a) the
full insurable
value of the Mortgaged Property or (b) the greater of (i) the
outstanding
principal balance owing on the Mortgage Loan and (ii) an amount
such that the
proceeds of such insurance shall be sufficient to avoid the
application to the
Mortgagor or loss payee of any coinsurance clause under the
policy. If the
Mortgaged Property is in an area identified in the Federal
Register by the
Federal Emergency Management Agency as having special flood
hazards (and such
flood insurance has been made available) the Servicer will cause
to be
maintained a flood insurance policy meeting the requirements of
the current
guidelines of the Federal Insurance Administration and the
requirements of FNMA
or FHLMC. The Servicer shall also maintain on REO Property, fire
and hazard
insurance with extended coverage in an amount which is at least
equal to the
maximum insurable value of the improvements which are a part of
such property,
liability insurance and, to the extent required, flood insurance
in an amount
required above. Any amounts collected by the Servicer under any
such policies
(other than amounts to be deposited in an Escrow Account and
applied to the
restoration or repair of the property subject to the related
Mortgage or
property acquired in liquidation of the Mortgage Loan, or to be
released to the
Mortgagor in accordance with Customary Servicing Procedures)
shall be deposited
in the Servicer Custodial Account, subject to withdrawal
pursuant to Section
3.11(a). It is understood and agreed that no earthquake or other
additional
insurance need be required by the Servicer of any Mortgagor or
maintained on REO
Property, other than pursuant to such applicable laws and
regulations as shall
at any time be in force and as shall require such additional
insurance. All
policies required hereunder shall be endorsed with standard
mortgagee clauses
with loss payable to the Servicer, and shall provide for at
least 30 days prior
written notice of any cancellation, reduction in amount or
material change in
coverage to the Servicer.
The hazard insurance policies for each Mortgage Loan secured by
a
unit in a condominium development or planned unit development
shall be
maintained with respect to such Mortgage Loan and the related
development in a
manner which is consistent with FNMA requirements.
Notwithstanding the foregoing, the Servicer may maintain a
blanket
policy insuring against hazard losses on all of the Mortgaged
Properties
relating to the Mortgage Loans in lieu of maintaining the
required hazard
insurance policies for each Mortgage Loan and may maintain a
blanket policy
insuring against special flood hazards in lieu of maintaining
any required flood
insurance. Any such blanket policies shall (A) be consistent
with prudent
industry standards, (B) name the Servicer as loss payee, (C)
provide coverage in
an amount equal to the aggregate unpaid principal balance on the
related
Mortgage Loans without co-insurance, and (D) otherwise comply
with the
requirements of this Section 3.12. Any such blanket policy may
contain a
deductible clause; provided that if any Mortgaged Property is
not covered by a
separate policy otherwise complying with this Section 3.12 and a
loss occurs
with respect to such Mortgaged Property which loss would have
been covered by
such a policy, the Servicer shall deposit in the Servicer
Custodial Account the
difference, if any, between the amount that would have been
payable under a
separate policy complying with this Section 3.12 and the amount
paid under such
blanket policy.
Section 3.13 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. (a) Except as otherwise provided in this Section
3.13, when any
Mortgaged Property subject to a Mortgage has been conveyed by
the Mortgagor, the
Servicer shall use reasonable efforts, to the extent that it has
actual
knowledge of such conveyance, to enforce any due-on-sale clause
contained in any
Mortgage Note or Mortgage, to the extent permitted under
applicable law and
governmental regulations, but only to the extent that such
enforcement will not
adversely affect or jeopardize coverage under any Required
Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to
exercise such
rights with respect to a Mortgage Loan if the Person to whom the
related
Mortgaged Property has been conveyed or is proposed to be
conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage
related thereto
and the consent of the mortgagee under such Mortgage Note or
Mortgage is not
otherwise required under such Mortgage Note or Mortgage as a
condition to such
transfer. If (i) the Servicer is prohibited by law from
enforcing any such
due-on-sale clause, (ii) coverage under any Required Insurance
Policy would be
adversely affected, (iii) the Mortgage Note does not include a
due-on-sale
clause or (iv) nonenforcement is otherwise permitted hereunder,
the Servicer is
authorized, subject to Section 3.13(b), to take or enter into an
assumption and
modification agreement from or with the Person to whom such
Mortgaged Property
has been or is about to be conveyed, pursuant to which such
Person becomes
liable under the Mortgage Note and, unless prohibited by
applicable state law,
the Mortgagor remains liable thereon; provided that the Mortgage
Loan shall
continue to be covered (if so covered before the Servicer enters
such agreement)
by the applicable Required Insurance Policies. The Servicer,
subject to Section
3.13(b), is also authorized with the prior approval of the
insurers under any
Required Insurance Policies to enter into a substitution of
liability agreement
with such Person, pursuant to which the original Mortgagor is
released from
liability and such Person is substituted as Mortgagor and
becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer
shall not be
deemed to be in default under this Section 3.13 by reason of any
transfer or
assumption which the Servicer reasonably believes it is
restricted by law from
preventing, for any reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale
clause
to the extent set forth in Section 3.13(a), in any case in which
a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such
Person is to
enter into an assumption agreement or modification agreement or
supplement to
the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if
an instrument of release signed by the Trustee is required
releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer
shall prepare and
deliver or cause to be prepared and delivered to the Trustee for
signature and
shall direct, in writing, the Trustee to execute the assumption
agreement with
the Person to whom the Mortgaged Property is to be conveyed and
such
modification agreement or supplement to the Mortgage Note or
Mortgage or other
instruments as are reasonable or necessary to carry out the
terms of the
Mortgage Note or Mortgage or otherwise to comply with any
applicable laws
regarding assumptions or the transfer of the Mortgaged Property
to such Person.
In no event shall the Trustee incur liability for executing any
document under
this Section 3.13 at the direction of the Servicer. In
connection with any such
assumption, no material term of the Mortgage Note may be
changed. In addition,
the substitute Mortgagor and the Mortgaged Property must be
acceptable to the
Servicer in accordance with its underwriting standards as then
in effect.
Together with each such substitution, assumption or other
agreement or
instrument delivered to the Trustee for execution by it, the
Servicer shall
deliver an Officer's Certificate signed by a Servicing Officer
stating that the
requirements of this subsection have been met. The Servicer
shall notify the
Trustee that any such substitution or assumption agreement has
been completed by
forwarding to the Trustee (or at the direction of the Trustee,
the Custodian)
the original of such substitution or assumption agreement, which
in the case of
the original shall be added to the related Mortgage File and
shall, for all
purposes, be considered a part of such Mortgage File to the same
extent as all
other documents and instruments constituting a part thereof. Any
fee collected
by the Servicer for entering into an assumption or substitution
of liability
agreement may be retained by the Servicer as additional
Servicing Compensation.
Notwithstanding the foregoing, to the extent permissible under
applicable law
and at the request of the Servicer, the Trustee shall execute
and deliver to the
Servicer any powers of attorney and other documents prepared by
the Servicer
that are reasonably necessary or appropriate to enable the
Servicer to execute
any assumption agreement or modification agreement required to
be executed by
the Trustee under this Section 3.13.
Section 3.14 Realization Upon Defaulted Mortgage Loans; REO
Property. (a) Subject to Section 3.21, the Servicer shall use
reasonable efforts
to foreclose upon or otherwise comparably convert the ownership
of Mortgaged
Properties securing such of the Mortgage Loans as come into and
continue in
default and as to which no satisfactory arrangements can be made
for collection
of delinquent payments. In connection with such foreclosure or
other conversion,
the Servicer shall follow Customary Servicing Procedures and
shall meet the
requirements of the insurer under any Required Insurance Policy;
provided,
however, that the Servicer may enter into a special servicing
agreement with an
unaffiliated Holder of 100% Percentage Interest of a Class of
Class B
Certificates or a holder of a class of securities representing
interests in the
Class B Certificates alone or together with other subordinated
mortgage
pass-through certificates. Such agreement shall be substantially
in the form
attached hereto as Exhibit K or subject to each Rating Agency's
acknowledgment
that the ratings of the Certificates in effect immediately prior
to the entering
into such agreement would not be qualified, downgraded or
withdrawn and the
Certificates would not be placed on credit review status (except
for possible
upgrading) as a result of such agreement. Any such agreement may
contain
provisions whereby such holder may instruct the Servicer to
commence or delay
foreclosure proceedings with respect to delinquent Mortgage
Loans and will
contain provisions for the deposit of cash by the holder that
would be available
for distribution to Certificateholders if Liquidation Proceeds
are less than
they otherwise may have been had the Servicer acted in
accordance with its
normal procedures. Notwithstanding the foregoing, the Servicer
shall not be
required to expend its own funds in connection with any
foreclosure or towards
the restoration of any Mortgaged Property unless it shall
determine (i) that
such restoration and/or foreclosure will increase the proceeds
of liquidation of
the Mortgage Loan after reimbursement to itself of such expenses
and (ii) that
such expenses will be recoverable to it through proceeds of the
liquidation of
the Mortgage Loan (respecting which it shall have priority for
purposes of
withdrawals from the Servicer Custodial Account). Any such
expenditures shall
constitute Servicing Advances for purposes of this
Agreement.
The decision of the Servicer to foreclose on a defaulted
Mortgage
Loan shall be subject to a determination by the Servicer that
the proceeds of
such foreclosure would exceed the costs and expenses of bringing
such a
proceeding.
With respect to any REO Property, the deed or certificate of
sale
shall be taken in the name of the Trustee for the benefit of
the
Certificateholders, or its nominee, on behalf of the
Certificateholders. The
Trustee's name shall be placed on the title to such REO Property
solely as the
Trustee hereunder and not in its individual capacity. The
Servicer shall ensure
that the title to such REO Property references this Agreement
and the Trustee's
capacity hereunder. Pursuant to its efforts to sell such REO
Property, the
Servicer shall either itself or through an agent selected by the
Servicer
manage, conserve, protect and operate such REO Property in the
same manner that
it manages, conserves, protects and operates other foreclosed
property for its
own account and in the same manner that similar property in the
same locality as
the REO Property is managed. Incident to its conservation and
protection of the
interests of the Certificateholders, the Servicer may rent the
same, or any part
thereof, as the Servicer deems to be in the best interest of
the
Certificateholders for the period prior to the sale of such REO
Property. The
Servicer shall prepare for and deliver to the Trustee a
statement with respect
to each REO Property that has been rented, if any, showing the
aggregate rental
income received and all expenses incurred in connection with the
management and
maintenance of such REO Property at such times as is necessary
to enable the
Trustee to comply with the reporting requirements of the REMIC
Provisions;
provided, however, that the Servicer shall have no duty to rent
any REO Property
on behalf of the Trust. The net monthly rental income, if any,
from such REO
Property shall be deposited in the Servicer Custodial Account no
later than the
close of business on each Determination Date. The Servicer shall
perform, with
respect to the Mortgage Loans, the tax reporting and withholding
required by
Sections 1445 and 6050J of the Code with respect to foreclosures
and
abandonments, the tax reporting required by Section 6050H of the
Code with
respect to the receipt of mortgage interest from individuals
and, if required by
Section 6050P of the Code with respect to the cancellation of
indebtedness by
certain financial entities, by preparing such tax and
information returns as may
be required, in the form required. The Servicer shall deliver
copies of such
reports to the Trustee.
If the Trust acquires any Mortgaged Property as described above
or
otherwise in connection with a default or a default which is
reasonably
foreseeable on a Mortgage Loan, the Servicer shall dispose of
such Mortgaged
Property prior to the end of the third calendar year following
the year of its
acquisition by the Trust (such period, the "REO Disposition
Period") unless (A)
the Trustee shall have been supplied by the Servicer with an
Opinion of Counsel
to the effect that the holding by the Trust of such Mortgaged
Property
subsequent to the REO Disposition Period will not result in the
imposition of
taxes on "prohibited transactions" (as defined in Section 860F
of the Code) on
either of the Upper-Tier REMIC or the Lower-Tier REMIC or cause
either REMIC to
fail to qualify as a REMIC at any time that any Certificates are
outstanding, or
(B) the Trustee (at the Servicer's expense) or the Servicer
shall have applied
for, prior to the expiration of the REO Disposition Period, an
extension of the
REO Disposition Period in the manner contemplated by Section
856(e)(3) of the
Code. If such an Opinion of Counsel is provided or such an
exemption is
obtained, the Trust may continue to hold such Mortgaged Property
(subject to any
conditions contained in such Opinion of Counsel) for the
applicable period.
Notwithstanding any other provision of this Agreement, no
Mortgaged Property
acquired by the Trust shall be rented (or allowed to continue to
be rented) or
otherwise used for the production of income by or on behalf of
the Trust in such
a manner or pursuant to any terms that would (i) cause such
Mortgaged Property
to fail to qualify as "foreclosure property" within the meaning
of Section
860G(a)(8) of the Code or (ii) subject either REMIC to the
imposition of any
federal, state or local income taxes on the income earned from
such Mortgaged
Property under Section 860G(c) of the Code or otherwise, unless
the Servicer has
agreed to indemnify and hold harmless the Trust with respect to
the imposition
of any such taxes. The Servicer shall identify to the Trustee
any Mortgaged
Property relating to a Mortgage Loan held by the Trust for 30
months for which
no plans to dispose of such Mortgaged Property by the Servicer
have been made.
After delivery of such identification, the Servicer shall
proceed to dispose of
any such Mortgaged Property by holding a commercially reasonable
auction for
such property.
The income earned from the management of any REO Properties, net
of
reimbursement to the Servicer for expenses incurred (including
any property or
other taxes) in connection with such management and net of
unreimbursed
Servicing Fees, Periodic Advances and Servicing Advances, shall
be applied to
the payment of principal of and interest on the related
defaulted Mortgage Loans
(solely for the purposes of allocating principal and interest,
interest shall be
treated as accruing as though such Mortgage Loans were still
current) and all
such income shall be deemed, for all purposes in this Agreement,
to be payments
on account of principal and interest on the related Mortgage
Notes and shall be
deposited into the Servicer Custodial Account. To the extent the
net income
received during any calendar month is in excess of the amount
attributable to
amortizing principal and accrued interest at the related
Mortgage Interest Rate
on the related Mortgage Loan for such calendar month, such
excess shall be
considered to be a partial prepayment of principal of the
related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
any
income from an REO Property, will be applied in the following
order of priority:
first, to reimburse the Servicer for any related unreimbursed
Servicing Advances
and Servicing Fees; second, to reimburse the Servicer for any
unreimbursed
Periodic Advances and to reimburse the Servicer Custodial
Account for any
Nonrecoverable Advances (or portions thereof) that were
previously withdrawn by
the Servicer pursuant to Section 3.11(a)(iii) that related to
such Mortgage
Loan; third, to accrued and unpaid interest (to the extent no
Periodic Advance
has been made for such amount or any such Periodic Advance has
been reimbursed)
on the Mortgage Loan or related REO Property, at the Mortgage
Interest Rate to
the Due Date occurring in the month in which such amounts are
required to be
distributed; and fourth, as a recovery of principal of the
Mortgage Loan. Excess
Proceeds, if any, from the liquidation of a Liquidated Mortgage
Loan will be
retained by the Servicer as additional Servicing Compensation
pursuant to
Section 3.17.
(b) The Servicer shall promptly notify the Depositor of any
Mortgage
Loan which comes into default. The Depositor shall be entitled,
at its option,
to repurchase (i) any such defaulted Mortgage Loan from the
Trust Estate if (a)
in the Depositor's judgment, the default is not likely to be
cured by the
Mortgagor and (b) such Mortgage Loan is 180 days or more
delinquent or (ii) any
Mortgage Loan in the Trust Estate which pursuant to Section 4(b)
of the Mortgage
Loan Purchase Agreement the Seller requests the Depositor to
repurchase and to
sell to the Seller to facilitate the exercise of the Seller's
rights against the
originator or prior holder of such Mortgage Loan. The purchase
price for any
such Mortgage Loan shall be 100% of the unpaid principal balance
of such
Mortgage Loan plus accrued interest thereon at the Mortgage
Interest Rate
through the last day of the month in which such repurchase
occurs. Upon the
receipt of such purchase price, the Servicer shall provide to
the Trustee the
notification required by Section 3.15 and the Trustee or the
Custodian shall
promptly release to the Depositor the Mortgage File relating to
the Mortgage
Loan being repurchased.
Section 3.15 Trustee to Cooperate; Release of Mortgage Files.
Upon
the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a
notification that payment in full will be escrowed in a manner
customary for
such purposes, the Servicer will immediately notify the Trustee
(or, at the
direction of the Trustee, the Custodian) by delivering, or
causing to be
delivered, two copies (one of which will be returned to the
Servicer with the
Mortgage File) of a Request for Release (which may be delivered
in an electronic
format acceptable to the Trustee and the Servicer). Upon receipt
of such
request, the Trustee or the Custodian, as applicable, shall
within seven
Business Days release the related Mortgage File to the Servicer.
The Trustee
shall at the Servicer's direction execute and deliver to the
Servicer the
request for reconveyance, deed of reconveyance or release or
satisfaction of
mortgage or such instrument releasing the lien of the Mortgage,
in each case
provided by the Servicer, together with the Mortgage Note with
written evidence
of cancellation thereon. If the Mortgage has been recorded in
the name of MERS
or its designee, the Servicer shall take all necessary action to
reflect the
release of the Mortgage on the records of MERS. Expenses
incurred in connection
with any instrument of satisfaction or deed of reconveyance
shall be chargeable
to the related Mortgagor. From time to time and as shall be
appropriate for the
servicing or foreclosure of any Mortgage Loan, including for
such purpose
collection under any policy of flood insurance, any fidelity
bond or errors or
omissions policy, or for the purposes of effecting a partial
release of any
Mortgaged Property from the lien of the Mortgage or the making
of any
corrections to the Mortgage Note or the Mortgage or any of the
other documents
included in the Mortgage File, the Trustee or the Custodian, as
applicable,
shall, upon delivery to the Trustee (or, at the direction of the
Trustee, the
Custodian) of a Request for Release signed by a Servicing
Officer, release the
Mortgage File within seven Business Days to the Servicer.
Subject to the further
limitations set forth below, the Servicer shall cause the
Mortgage File so
released to be returned to the Trustee or the Custodian, as
applicable, when the
need therefor by the Servicer no longer exists, unless the
Mortgage Loan is
liquidated and the proceeds thereof are deposited in the
Servicer Custodial
Account, in which case the Servicer shall deliver to the Trustee
or the
Custodian, as applicable, a Request for Release, signed by a
Servicing Officer.
The Trustee shall execute and deliver to the Servicer any powers
of
attorney and other documents prepared by the Servicer that are
reasonably
necessary or appropriate to enable the Servicer to carry out its
servicing and
administrative duties under this Agreement, upon the request of
the Servicer. In
addition, upon prepayment in full of any Mortgage Loan or the
receipt of notice
that funds for such purpose have been placed in escrow, the
Servicer is
authorized to give, as attorney-in-fact for the Trustee and the
mortgagee under
the Mortgage, an instrument of satisfaction (or Assignment of
Mortgage without
recourse) regarding the Mortgaged Property relating to such
Mortgage Loan, which
instrument of satisfaction or Assignment of Mortgage, as the
case may be, shall
be delivered to the Person entitled thereto against receipt of
the prepayment in
full. If the Mortgage is registered in the name of MERS or its
designee, the
Servicer shall take all necessary action to reflect the release
on the records
of MERS. In lieu of executing such satisfaction or Assignment of
Mortgage, or if
another document is required to be executed by the Trustee, the
Servicer may
deliver or cause to be delivered to the Trustee, for signature,
as appropriate,
any court pleadings, requests for trustee's sale or other
documents necessary to
effectuate such foreclosure or any legal action brought to
obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to
obtain a
deficiency judgment or to enforce any other remedies or rights
provided by the
Mortgage Note or the Mortgage or otherwise available at law or
in equity.
Section 3.16 Documents, Records and Funds in Possession of
the
Servicer to be Held for the Trustee. The Servicer shall transmit
to the Trustee
or, at the direction of the Trustee, the Custodian as required
by this Agreement
all documents and instruments in respect of a Mortgage Loan
coming into the
possession of the Servicer from time to time and shall account
fully to the
Trustee for any funds received by the Servicer or which
otherwise are collected
by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any
Mortgage Loan. The documents constituting the Servicing File
shall be held by
the Servicer as custodian and bailee for the Trustee. All
Mortgage Files and
funds collected or held by, or under the control of, the
Servicer in respect of
any Mortgage Loans, whether from the collection of principal and
interest
payments or from Liquidation Proceeds, including but not limited
to, any funds
on deposit in the Servicer Custodial Account, shall be held by
the Servicer for
and on behalf of the Trustee and shall be and remain the sole
and exclusive
property of the Trustee, subject to the applicable provisions of
this Agreement.
The Servicer also agrees that it shall not knowingly create,
incur or subject
any Mortgage File or any funds that are deposited in the
Servicer Custodial
Account, Certificate Account or any Escrow Account, or any funds
that otherwise
are or may become due or payable to the Trustee for the benefit
of the
Certificateholders, to any claim, lien, security interest,
judgment, levy, writ
of attachment or other encumbrance created by the Servicer, or
assert by legal
action or otherwise any claim or right of setoff against any
Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan,
except, however,
that the Servicer shall be entitled to set off against and
deduct from any such
funds any amounts that are properly due and payable to the
Servicer under this
Agreement.
Section 3.17 Servicing Compensation. The Servicer shall be
entitled
out of each payment of interest on a Mortgage Loan (or portion
thereof) and
included in the Trust Estate to retain or withdraw from the
Servicer Custodial
Account an amount equal to the Servicing Fee for such
Distribution Date;
provided, however, that the aggregate Servicing Fee for the
Servicer relating to
the Mortgage Loans shall be reduced (but not below zero) by an
amount equal to
the Compensating Interest.
Any additional Servicing Compensation shall be retained by
the
Servicer to the extent not required to be deposited in the
Servicer Custodial
Account pursuant to Section 3.08(b). The Servicer shall be
required to pay all
expenses incurred by it in connection with its servicing
activities hereunder
and shall not be entitled to reimbursement therefor except as
specifically
provided in this Agreement.
Section 3.18 Annual Statement as to Compliance. Commencing in
the
calendar year following the date of this Agreement, the Servicer
shall deliver
to the Trustee and each Rating Agency on or before the 30th day
(or if not a
Business Day, the immediately preceding Business Day) preceding
the latest day
in each year on which an annual report on Form 10-K may be
timely filed with the
Securities and Exchange Commission (without regard to any
extension), an
Officer's Certificate stating, as to the signer thereof, that
(a) a review of
the activities of the Servicer during the preceding calendar
year and of the
performance of the Servicer under this Agreement has been made
under such
officer's supervision, and (b) to the best of such officer's
knowledge, based on
such review, the Servicer has fulfilled all its obligations
under this Agreement
throughout such year, or, if there has been a default in the
fulfillment of any
such obligation, specifying each such default known to such
officer and the
nature and status thereof.
Section 3.19 Annual Independent Public Accountants'
Servicing
Statement; Financial Statements. Commencing in the calendar year
following the
date of this Agreement, the Servicer shall, at its own expense,
on or before the
30th day (or if not a Business Day, the immediately preceding
Business Day)
preceding the latest day in each year on which an annual report
on Form 10-K may
be timely filed with the Securities and Exchange Commission
(without regard to
any extension), cause a firm of independent public accountants
(who may also
render other services to the Servicer or any affiliate thereof)
which is a
member of the American Institute of Certified Public Accountants
to furnish a
statement to the Trustee to the effect that such firm has with
respect to the
Servicer's overall servicing operations, examined such
operations in accordance
with the requirements of the Uniform Single Attestation Program
for Mortgage
Bankers, stating such firm's conclusions relating thereto.
Section 3.20 Advances. The Servicer shall determine on or
before
each Servicer Advance Date whether it is required to make a
Periodic Advance
pursuant to the definition thereof. If the Servicer determines
it is required to
make a Periodic Advance, it shall, on or before the Servicer
Advance Date,
either (a) deposit into the Servicer Custodial Account an amount
equal to the
Advance and/or (b) make an appropriate entry in its records
relating to the
Servicer Custodial Account that any portion of the Amount Held
for Future
Distribution with respect to a Loan Group in the Servicer
Custodial Account has
been used by the Servicer in discharge of its obligation to make
any such
Periodic Advance on a Mortgage Loan in such Loan Group. Any
funds so applied
shall be replaced by the Servicer by deposit in the Servicer
Custodial Account
no later than the close of business on the Business Day
preceding the next
Servicer Advance Date. The Servicer shall be entitled to be
reimbursed from the
Servicer Custodial Account for all Advances of its own funds
made pursuant to
this Section 3.20 as provided in Section 3.11(a). The obligation
to make
Periodic Advances with respect to any Mortgage Loan shall
continue until the
ultimate disposition of the REO Property or Mortgaged Property
relating to such
Mortgage Loan. The Servicer shall inform the Trustee of the
amount of the
Periodic Advance to be made by the Servicer with respect to each
Loan Group on
each Servicer Advance Date no later than the related Remittance
Date.
The Servicer shall deliver to the Trustee on the related
Servicer
Advance Date an Officer's Certificate of a Servicing Officer
indicating the
amount of any proposed Periodic Advance determined by the
Servicer to be a
Nonrecoverable Advance. Notwithstanding anything to the
contrary, the Servicer
shall not be required to make any Periodic Advance or Servicing
Advance that
would be a Nonrecoverable Advance.
Section 3.21 Modifications, Waivers, Amendments and Consents.
(a)
Subject to this Section 3.21, the Servicer may agree to any
modification,
waiver, forbearance, or amendment of any term of any Mortgage
Loan without the
consent of the Trustee or any Certificateholder. All
modifications, waivers,
forbearances or amendments of any Mortgage Loan shall be in
writing and shall be
consistent with Customary Servicing Procedures.
(b) The Servicer shall not agree to enter into, and shall not
enter
into, any modification, waiver (other than a waiver referred to
in Section 3.13,
which waiver, if any, shall be governed by Section 3.13),
forbearance or
amendment of any t
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