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POOLING AND SERVICING AGREEMENT
Relating to
HOME EQUITY LOAN TRUST 2007-FRE1
Among
NATIONSTAR FUNDING LLC,
as Depositor,
NATIONSTAR MORTGAGE LLC,
as
Seller,
NATIONSTAR MORTGAGE LLC,
as
Servicer,
WELLS FARGO BANK, N.A.,
as Master
Servicer and Securities Administrator
and
THE BANK OF NEW YORK
as Trustee
Dated as of June 1, 2007
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; RULES
OF CONSTRUCTION
2
Section 1.01.
Definitions.
2
Section 1.02.
Use of Words and Phrases.
42
Section 1.03.
Captions, Table of Contents.
42
Section 1.04.
Opinions.
42
ARTICLE II ESTABLISHMENT AND
ORGANIZATION OF THE TRUST
44
Section 2.01.
Establishment of the Trust.
44
Section 2.02.
Office.
44
Section 2.03.
Purposes and Powers.
44
Section 2.04.
Appointment of the Trustee; Declaration of Trust.
44
Section 2.05.
Expenses of the Trust.
44
Section 2.06.
Ownership of the Trust.
45
Section 2.07.
Situs of the Trust.
45
Section 2.08.
Miscellaneous REMIC Provisions.
54
Section 2.09.
Supplemental Interest Trust.
55
ARTICLE III REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE
DEPOSITOR, THE MASTER SERVICER THE SERVICER AND THE
SELLER;
COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS
56
Section 3.01.
Representations and Warranties of the Depositor.
56
Section 3.02.
Representations and Warranties of the Servicer and Master
Servicer.
58
Section 3.03.
Representations and Warranties of the Seller.
61
Section 3.04.
Covenants of Seller to Take Certain Actions with Respect to the
Home
Equity Loans in Certain Situations.
64
Section 3.05.
Sale Treatment of the Home Equity Loans and Qualified
Replacement
Mortgages.
82
Section 3.06.
Acceptance by Trustee; Certain Substitutions of Home Equity
Loans;
Certification by Trustee.
86
Section 3.07.
High-Cost Home Loans.
88
Section 3.08.
Custodian.
88
Section 3.09.
Cooperation Procedures.
88
Section 3.10.
Payment of Taxes, Insurance and Other Charges.
89
ARTICLE IV ISSUANCE AND SALE
OF CERTIFICATES
90
Section 4.01.
Issuance of Certificates.
90
Section 4.02.
Sale of Certificates.
90
ARTICLE V CERTIFICATES AND
TRANSFER OF INTERESTS
91
Section 5.01.
Terms.
91
Section 5.02.
Forms.
91
Section 5.03.
Execution, Authentication and Delivery.
91
Section 5.04.
Registration and Transfer of Certificates.
92
Section 5.05.
Mutilated, Destroyed, Lost or Stolen Certificates.
94
Section 5.06.
Persons Deemed Owners.
95
Section 5.07.
Cancellation.
95
Section 5.08.
Limitation on Transfer of Ownership Rights.
95
Section 5.09.
Assignment of Rights.
98
ARTICLE VI
COVENANTS
99
Section 6.01.
Distributions.
99
Section 6.02.
Money for Distributions to be Held in Trust; Withholding.
99
Section 6.03.
Protection of Trust Estate.
100
Section 6.04.
Performance of Obligations.
101
Section 6.05.
Negative Covenants.
101
Section 6.06.
No Other Powers.
102
Section 6.07.
Limitation of Suits.
102
Section 6.08.
Unconditional Rights of Owners to Receive Distributions.
102
Section 6.09.
Rights and Remedies Cumulative.
103
Section 6.10.
Delay or Omission Not Waiver.
103
Section 6.11.
Control by Owners.
103
Section 6.12.
Indemnification by Nationstar Mortgage.
103
ARTICLE VII ACCOUNTS,
DISBURSEMENTS AND RELEASES
105
Section 7.01.
Collection of Money.
105
Section 7.02.
Establishment of Accounts.
105
Section 7.03.
Flow of Funds.
105
Section 7.04.
Net WAC Cap Carryover Reserve Fund.
111
Section 7.05.
Investment of Accounts.
112
Section 7.06.
Payment of Trust Expenses.
113
Section 7.07.
Eligible Investments.
113
Section 7.08.
[Reserved]
115
Section 7.09.
Reports by Securities Administrator to Owners.
115
Section 7.10.
Reports by Securities Administrator.
119
Section 7.11.
Allocation of Losses.
120
Section 7.12.
Swap Account.
120
Section 7.13.
Tax Treatment of the Offered Certificates: Class X-IO
Shortfall Amounts
and Net WAC Cap Carryover Amounts.
122
ARTICLE VIII SERVICING AND
ADMINISTRATION OF HOME EQUITY
LOANS
124
Section 8.01.
Servicer and Sub-Servicers.
124
Section 8.02.
Collection of Certain Home Equity Loan Payments.
125
Section 8.03.
Sub-Servicing Agreements Between Servicer and Sub-Servicers.
126
Section 8.04.
Successor Sub-Servicers.
126
Section 8.05.
Liability of Servicer; Indemnification.
127
Section 8.06.
No Contractual Relationship Between Sub-Servicer, the Master
Servicer,
the Securities Administrator, the Trustee or the Owners.
127
Section 8.07.
Assumption or Termination of Sub-Servicing Agreement by Master
Servicer.
127
Section 8.08.
Principal and Interest Account.
128
Section 8.09.
Delinquency Advances and Servicing Advances.
130
Section 8.10.
Compensating Interest; Repurchase of Home Equity Loans.
131
Section 8.11.
Maintenance of Insurance.
132
Section 8.12.
Due-on-Sale Clauses; Assumption and Substitution Agreements.
133
Section 8.13.
Realization Upon Defaulted Home Equity Loans; Workout of Home
Equity
Loans.
133
Section 8.14.
Trustee to Cooperate; Release of Files.
135
Section 8.15.
Servicing Compensation.
137
Section 8.16.
Notice of Servicer or Master Servicer Termination Event.
137
Section 8.17.
[Reserved].
137
Section 8.18.
Access to Certain Documentation and Information Regarding the
Home
Equity Loans.
137
Section 8.19.
Assignment of Agreement.
137
Section 8.20.
Removal of Servicer; Retention of Servicer; Resignation of
Servicer.
138
Section 8.21.
Inspections; Errors and Omissions Insurance.
142
Section 8.22.
Additional Servicing Responsibilities for Second Mortgage
Loans.
142
Section 8.23.
The Adjustable Rate Home Equity Loans.
143
Section 8.24.
Merger, Conversion, Consolidation or Succession to Business of
Servicer
or Master Servicer.
143
Section 8.25.
Notices of Material Events.
144
Section 8.26.
Indemnification by the Servicer.
144
Section 8.27.
Reports on Foreclosure and Abandonment of Properties.
145
Section 8.28.
[Reserved].
145
Section 8.29.
Advance Facility.
145
ARTICLE VIIIA MASTER SERVICING
AND ADMINISTRATION OF HOME
EQUITY LOANS
148
Section 8A.01.
Master Servicer to Act as Master Servicer
148
Section 8A.02.
Monitoring of Servicer.
149
Section 8A.03.
Power to Act; Procedures.
149
Section 8A.04.
Due-on-Sale Clauses; Assumption Agreements.
150
Section 8A.05.
Documents, Records and Funds in Possession of Master Servicer to be
Held
for Trustee.
150
Section 8A.06.
Compensation for the Master Servicer.
150
Section 8A.07.
Compensating Interest.
151
Section 8A.08.
Certain Duties and Responsibilities of the Master Servicer
151
Section 8A.09.
Master Servicer Termination Events
151
Section 8A.10.
Limitation on Resignation of the Master Servicer
153
Section 8A.11.
Assignment of Master Servicing
153
Section 8A.12.
Successor Master Servicer
154
Section 8A.13.
Trustee to Act; Appointment of Successor Master Servicer
154
ARTICLE IX TERMINATION OF
TRUST
155
Section 9.01.
Termination of Trust.
155
Section 9.02.
Termination Upon Option of the Servicer or Master Servicer.
156
Section 9.03.
Disposition of Proceeds.
157
ARTICLE X THE TRUSTEE AND
SECURITIES ADMINISTRATOR
158
Section 10.01.
Certain Duties and Responsibilities.
158
Section 10.02.
Removal of Trustee for Cause; Resignation and Removal of the
Securities
Administrator
160
Section 10.03.
Certain Rights of the Trustee and Securities Administrator.
162
Section 10.04.
Not Responsible for Recitals or Issuance of Certificates.
164
Section 10.05.
May Hold Certificates.
165
Section 10.06.
Money Held in Trust.
165
Section 10.07.
Compensation and Reimbursement.
165
Section 10.08.
Corporate Trustee Required; Eligibility.
166
Section 10.09.
Resignation and Removal; Appointment of Successor.
166
Section 10.10.
Acceptance of Appointment by Successor Trustee or Successor
Securities
Administrator.
168
Section 10.11.
Merger, Conversion, Consolidation or Succession to Business of
the
Trustee or Securities Administrator.
169
Section 10.12.
Reporting; Withholding.
169
Section 10.13.
Indemnification and Liability of the Trustee and Securities
Administrator.
170
Section 10.14.
Appointment of Co-Trustee or Separate Trustee.
171
Section 10.15.
Appointment of Custodians.
172
ARTICLE XI
MISCELLANEOUS
173
Section 11.01.
Compliance Certificates and Opinions.
173
Section 11.02.
Form of Documents Delivered to the Trustee and Securities
Administrator.
173
Section 11.03.
Acts of Owners.
174
Section 11.04.
Notices, etc. to Trustee and Securities Administrator.
175
Section 11.05.
Notices and Reports to Owners; Waiver of Notices.
175
Section 11.06.
Rules by Securities Administrator.
175
Section 11.07.
Successors and Assigns.
176
Section 11.08.
Severability.
176
Section 11.09.
Benefits of Agreement; Third-Party Beneficiaries.
176
Section 11.10.
Legal Holidays.
176
Section 11.11.
Governing Law; Submission to Jurisdiction.
176
Section 11.12.
Counterparts.
177
Section 11.13.
Usury.
177
Section 11.14.
Amendment.
178
Section 11.15.
Paying Agent; Appointment and Acceptance of Duties.
179
Section 11.16.
REMIC Status.
179
Section 11.17.
Additional Limitation on Action and Imposition of Tax.
181
Section 11.18.
Appointment of Tax Matters Person.
182
Section 11.19.
Notices.
182
Section 11.20.
Rule 144A Information.
185
ARTICLE XII EXCHANGE ACT
REPORTING
186
Section 12.01.
Form 10-D Reporting.
186
Section 12.02.
Form 10-K Reporting.
187
Section 12.03.
Form 8-K Reporting.
189
Section 12.04.
Delisting; Amendment; Late Filing of Reports.
190
Section 12.05.
Annual Statements of Compliance.
191
Section 12.06.
Annual Assessments of Compliance.
191
Section 12.07.
Accountant’s Attestation.
193
Section 12.08.
Sarbanes-Oxley Certification.
194
Section 12.09.
Indemnification.
195
Section 12.10.
Additional Information.
197
Section 12.11.
Intention of the Parties and Interpretation.
197
Section 12.12.
Notice under Article XII.
197
SCHEDULE I-A
SCHEDULE OF THE GROUP 1 HOME EQUITY LOANS
SCHEDULE I-B
SCHEDULE OF THE GROUP 2 HOME EQUITY LOANS
SCHEDULE I-C
PREPAYMENT CHARGE SCHEDULE
SCHEDULE I-D
EARLY PAYMENT DEFAULT SCHEDULE
SCHEDULE I-E
EARLY PAYMENT DEFAULT SCHEDULE
SCHEDULE I-F
[RESERVED]
SCHEDULE I-G
[RESERVED]
SCHEDULE I-H
SWAP AGREEMENT SCHEDULE OF NOTIONAL AMOUNTS
EXHIBIT A-1
FORM OF CLASS 1-AV-1 CERTIFICATE
EXHIBIT A-2
FORM OF CLASS 2-AV-1 CERTIFICATE
EXHIBIT A-3
FORM OF CLASS 2-AV-2 CERTIFICATE
EXHIBIT A-4
FORM OF CLASS 2-AV-3 CERTIFICATE
EXHIBIT A-5
FORM OF CLASS 2-AV-4 CERTIFICATE
EXHIBIT A-6
FORM OF CLASS M-1 CERTIFICATE
EXHIBIT A-7
FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-8
FORM OF CLASS M-3 CERTIFICATE
EXHIBIT A-9
FORM OF CLASS M-4 CERTIFICATE
EXHIBIT A-10
FORM OF CLASS M-5 CERTIFICATE
EXHIBIT A-11
FORM OF CLASS M-6 CERTIFICATE
EXHIBIT A-12
FORM OF CLASS M-7A CERTIFICATE
EXHIBIT A-13
FORM OF CLASS M-7B CERTIFICATE
EXHIBIT A-14
FORM OF CLASS M-8 CERTIFICATE
EXHIBIT A-15
FORM OF CLASS M-9A CERTIFICATE
EXHIBIT A-16
FORM OF CLASS M-9B CERTIFICATE
EXHIBIT B-1
FORM OF CLASS X-IO CERTIFICATE
EXHIBIT B-2
FORM OF CLASS P CERTIFICATE
EXHIBIT C
FORM OF CLASS R CERTIFICATE
EXHIBIT D
FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN FULL
AFTER THE CUT-OFF DATE
EXHIBIT E-1
FORM OF SECURITIES ADMINISTRATOR’S ACKNOWLEDGEMENT OF
RECEIPT
EXHIBIT E-2
FORM OF CUSTODIAN’S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT E-3
[RESERVED]
EXHIBIT F
FORM OF POOL CERTIFICATION
EXHIBIT G
FORM OF DELIVERY ORDER
EXHIBIT H
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
EXHIBIT I-1
FORM OF CERTIFICATE REGARDING TRANSFER (ACCREDITED INVESTOR)
EXHIBIT I-2
FORM OF CERTIFICATE OF TRANSFER (RULE 144A)
EXHIBIT J
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
EXHIBIT K
FORM 10-D, FORM 8-K AND FORM 10-K REPORTING
RESPONSIBILITY
EXHIBIT L
ADDITIONAL DISCLOSURE NOTIFICATION
EXHIBIT M
[RESERVED]
EXHIBIT N
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT O
FORM OF SERVICER INFORMATION
EXHIBIT P
[RESERVED]
EXHIBIT Q-1
FORM OF ANNUAL CERTIFICATION
EXHIBIT Q-2
FORM OF ANNUAL CERTIFICATION
EXHIBIT R
SWAP AGREEMENT
EXHIBIT S
[RESERVED]
EXHIBIT T
[RESERVED]
EXHIBIT U
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE STATEMENT
EXHIBIT V
[RESERVED]
EXHIBIT W
FORM OF SARBANES-OXLEY CERTIFICATION
POOLING AND SERVICING AGREEMENT, relating to
HOME EQUITY LOAN TRUST 2007-FRE1, dated as of June 1, 2007 by
and among NATIONSTAR FUNDING LLC, a Delaware limited liability
company, in its capacity as the depositor (the
“Depositor”), NATIONSTAR MORTGAGE LLC, a Delaware
limited liability company, (“Nationstar
Mortgage”) in its capacities as the seller (in such
capacity, the “Seller”) and as the servicer (in
such capacity, the “Servicer”), WELLS FARGO
BANK, N.A., a national banking association, in its
capacities as the master servicer (in such capacity, the
“Master Servicer”) and as the securities
administrator (in such capacity, the “Securities
Administrator”) and THE BANK OF NEW YORK, a New York
banking corporation, in its capacity as the trustee (the
“Trustee”).
WHEREAS, the Seller wishes to establish a trust
and two subtrusts and provide for the allocation and sale of the
beneficial interests therein and the maintenance and
distribution of the trust estate;
WHEREAS, the Seller wishes to sell to the
Depositor, the Depositor wishes to purchase from the Seller and
to sell to the Trustee on behalf of the Trust, and the Trustee
wishes to purchase on behalf of the Trust, the Home Equity Loans
and all payments thereon, including all Prepayment Charges;
WHEREAS, the Servicer has agreed to service the
Home Equity Loans, which constitute the principal assets of the
trust estate;
WHEREAS, Wells Fargo Bank, N.A. is willing to
serve in the capacity of Master Servicer and Securities
Administrator hereunder;
WHEREAS, all things necessary to make the
Certificates, when executed and authenticated by the Securities
Administrator, valid instruments, and to make this Agreement a
valid agreement, in accordance with their and its terms, have
been done; and
WHEREAS, The Bank of New York is willing to
serve in the capacity of Trustee hereunder.
NOW, THEREFORE, in consideration of the premises
and the mutual agreements herein contained, the Depositor, the
Seller, the Servicer, the Master Servicer, the Securities
Administrator and the Trustee hereby agree as follows:
CONVEYANCE
The Seller hereby
bargains, sells, conveys, assigns and transfers to the
Depositor, in trust, without recourse and for the exclusive
benefit of the Owners of the Certificates, all of its right,
title and interest in and to (a) all principal collected on
the Home Equity Loans on and after the Cut-Off Date and all
interest due on the Home Equity Loans after the Cut-Off Date,
and any and all other benefits accruing from the Home Equity
Loans which the Depositor is causing to be delivered to the
Custodian on behalf of the Trustee herewith, together with the
related Home Equity Loan documents and the Depositor’s
interest in any Property, and all payments thereon, including
all Prepayment Charges, and proceeds of the conversion,
voluntary or involuntary, of the foregoing, and
(b) proceeds of all the foregoing (including, but not by
way of limitation, all proceeds of any mortgage insurance, flood
insurance, hazard insurance and title insurance policy relating
to the Home Equity Loans, cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and
other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any
of the foregoing) to pay the Certificates as specified
herein (the “Home Equity Loan Assets”).
The Depositor, concurrently with the execution
and delivery hereof, hereby bargains, sells, conveys, assigns
and transfers to the Trustee for the benefit of the Owners of
the Certificates, without recourse, all the right, title and
interest of the Depositor in and to the Trust Estate.
The Trustee acknowledges such sale, accepts the
trusts hereunder in accordance with the provisions hereof and
agrees to perform the duties herein in accordance with the
provisions of the Operative Documents.
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01.
Definitions.
For all purposes of this Agreement, the
following terms shall have the meanings set forth below, unless
the context clearly indicates otherwise:
“Accepted Master Servicing
Practices”: With respect to any Home Equity Loan, as
applicable, either (x) those customary home equity loan
master servicing practices of prudent mortgage servicing
institutions that master service home equity loans of the same
type and quality as such Home Equity Loan in the jurisdiction
where the related Property is located, to the extent applicable
to the Master Servicer (except in its capacity as successor to
the Servicer) or (y) as provided in Section 8A.01
hereof, but in no event below the standard set forth in
clause (x).
“Account”: Any account
established in accordance with Section 7.02 or 8.08
hereof.
“Accountant”: A Person engaged in
the practice of accounting who may be employed by or affiliated
with the Depositor or an Affiliate of the Depositor.
“Accountant’s
Attestation”: The attestation required from an
Accountant for each of the Master Servicer, the Servicer, the
Securities Administrator, the Custodian and each Servicing
Function Participant pursuant to Section 12.07.
“Additional Disclosure
Notification”: As defined in Section 12.01.
“Additional Form 10-D
Disclosure”: As defined in Section 12.01.
“Additional Form 10-K
Disclosure”: As defined in Section 12.02.
“Adjustable Rate Home Equity
Loans”: With respect to the Home Equity Loans, the
adjustable rate Home Equity Loans identified as such in
Schedule I-A or Schedule I-B hereto, including any
Qualified Replacement Mortgages delivered in replacement
thereof.
“Advance Facility”: As defined
in Section 8.29(a) hereof.
“Advancing Person”: As defined
in Section 8.29(a) hereof.
“Affiliate”: With respect to
any specified Person, any other Person controlling or controlled
by or under common control with such specified Person. For
the purposes of this definition, “control” when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise and the terms “controlling”
and “controlled” have meanings correlative to the
foregoing.
“Aggregate Principal
Amount”: As to any Distribution Date, the sum of the
Basic Principal Amounts for each Home Equity Loan
Group .
“Agreement”: This Pooling and
Servicing Agreement, as it may be amended from time to time,
including the Exhibits and Schedules hereto.
“Annual Independent Public
Accountants’ Servicing Report”: A report of a
firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants to the effect
that such firm has examined certain documents and records
relating to the servicing of the Home Equity Loans or home
equity loans similar in nature to the Home Equity Loans by the
relevant Servicing Function Participant and that such firm is of
the opinion that the provisions of this Agreement have been
complied with, and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, nothing has come to
the attention of such firm which would indicate that such
servicing has not been conducted in compliance therewith, except
(i) such exceptions such firm shall believe to be immaterial,
and (ii) such other exceptions as shall be set forth in such
report. No Annual Independent Public Accountants’
Servicing Report shall contain any provision restricting the use
of such report the Servicing Function Participant, including any
prohibition on the inclusion of any such report in any filing
with the Commission.
“Applied Realized Loss
Amounts”: As to any Distribution Date, an amount
equal to the excess, if any, of (i) the aggregate
Certificate Principal Balance of the Offered Certificates, after
giving effect to all distributions on such Distribution Date
over (ii) the Pool Balance as of the last day of the
related Remittance Period.
“Appraised Value”: The
appraised value of any Property based upon the appraisal made at
the time of the origination or an updated appraisal made after
the time of origination, but prior to the Cut-off Date, of the
related Home Equity Loan, or, in the case of a Home Equity Loan
which is a purchase money mortgage, the sales price of the
Property, if such sales price is less than such appraised
value.
“Assessment of Compliance”: The
certification required from each of the Master Servicer, the
Servicer, the Securities Administrator, the Custodian and each
Servicing Function Participant pursuant to
Section 12.06.
“Authorized Officer”: With
respect to any Person, any officer of such Person who is
authorized to act for such Person in matters relating to this
Agreement, and whose action is binding upon such Person; with
respect to the Depositor, the Seller, the Master Servicer and
the Servicer, initially including those individuals whose names
appear on the lists of Authorized Officers delivered at the
Closing; with respect to the Trustee or the Securities
Administrator, any officer assigned to the Corporate Trust
Office (or any successor thereto), including any Vice President,
Assistant Vice President, Trust Officer, Assistant Secretary or
any other officer of the Trustee or the Securities
Administrator, as applicable, customarily performing functions
similar to those performed by any of the above designated
officers and having direct responsibility for the administration
of this Agreement or any other officers of the Trustee or the
Securities Administrator, as applicable, to whom a matter
arising under this Agreement may be referred.
“Basic Principal Amount”: With
respect to each Home Equity Loan Group and each
Distribution Date shall be the sum of (without duplication):
(a)
the principal portion of all scheduled monthly
payments on the Home Equity Loans related to the Home Equity
Loan Group actually received by the Servicer during the
related Remittance Period and any Prepayments on the Home Equity
Loans made on behalf of the obligors on Home Equity Loans in the
related Home Equity Loan Group actually received by the
Servicer during the related Remittance Period in each case to
the extent the amounts are received by the Securities
Administrator on or prior to the Monthly Remittance Date;
(b)
the outstanding principal balance of each Home
Equity Loan in the related Home Equity Loan Group that was
purchased or repurchased by the Seller or purchased by the
Servicer on or prior to the related Monthly Remittance Date in
each case to the extent the amounts are received by the
Securities Administrator on or prior to the Monthly Remittance
Date;
(c)
any Substitution Amounts relating to principal,
delivered by the Seller on the related Monthly Remittance Date
in connection with a substitution of a Home Equity Loan in the
related Home Equity Loan Group , in each case to the extent
the amounts are received by the Securities Administrator on or
prior to the Monthly Remittance Date;
(d)
all Net Liquidation Proceeds and Recoveries
actually collected by or on behalf of the Servicer with respect
to the Home Equity Loans in the related Home Equity Loan
Group during the related Remittance Period (to the extent
the Net Liquidation Proceeds and Recoveries relate to
principal) in each case to the extent the amounts are
received by the Securities Administrator on or prior to the
Monthly Remittance Date; and
(e)
the principal portion of the proceeds received
by the Securities Administrator with respect to the related Home
Equity Loan Group upon termination of the Trust.
“Business Day”: Any day other
than a Saturday, Sunday or a day on which commercial banking
institutions in New York, New York, Dallas, Texas, the city in
which the Corporate Trust Office of the Trustee or the
Securities Administrator is located or, with respect to the
obligations of the Custodian hereunder, the State of Texas or
any other state where the principal office of the Custodian is
located, are authorized or obligated by law or executive order
to be closed.
“Certificate”: Any one of the
Offered Certificates, the Class X-IO Certificates, the
Class P Certificates or the Class R Certificates, each
representing the interests and the rights described in this
Agreement.
“Certificate Account”: The
segregated certificate account established in accordance with
Section 7.02 hereof and maintained at the applicable
Corporate Trust Office entitled “Wells Fargo Bank, N.A.,
as Securities Administrator on behalf of the Owners of the Home
Equity Loan Trust 2007-FRE1, Home Equity Loan Asset-Backed
Certificates, Series 2007-FRE1.” The Certificate
Account shall be an Eligible Account.
“Certificate Group ” or
“Group ”: The Group 1 Certificates or
the Group 2 Certificates, as the case may be.
“Certificate Principal
Balance”: As of the Startup Day as to each of the
following Classes of Offered Certificates and Class P
Certificates, the principal balances thereof, as
follows:
|
|
|
|
Class 1-AV-1 Certificates
|
-
|
$635,924,000
|
|
Class 2-AV-1 Certificates
|
-
|
$371,224,000
|
|
Class 2-AV-2 Certificates
|
-
|
$42,555,000
|
|
Class 2-AV-3 Certificates
|
-
|
$98,990,000
|
|
Class 2-AV-4 Certificates
|
-
|
$49,154,000
|
|
Class M-1 Certificates
|
-
|
$64,330,000
|
|
Class M-2 Certificates
|
-
|
$58,630,000
|
|
Class M-3 Certificates
|
-
|
$35,830,000
|
|
Class M-4 Certificates
|
-
|
$32,572,000
|
|
Class M-5 Certificates
|
-
|
$30,944,000
|
|
Class M-6 Certificates
|
-
|
$27,686,000
|
|
Class M-7A Certificates
|
-
|
$5,000,000
|
|
Class M-7B Certificates
|
-
|
$21,058,000
|
|
Class M-8 Certificates
|
-
|
$24,429,000
|
|
Class M-9A Certificates
|
-
|
$12,000,000
|
|
Class M-9B Certificates
|
-
|
$13,244,000
|
|
Class P Certificates
|
-
|
$100
|
As of any time of determination after the
Startup Day, the Certificate Principal Balance of a
Class of Offered Certificates and the Class P
Certificates shall be the Certificate Principal Balance of such
Class as of the Startup Day less the aggregate of all
amounts actually distributed to such Class in reduction of
such Class’s Certificate Principal Balance pursuant to
Section 7.03 hereof on all prior Distribution Dates and, in
the case of any Class of Subordinate Certificates, reduced
by any Applied Realized Loss Amounts and increased by any
Recoveries allocated to such Class on prior Distribution
Dates.
The Class X-IO Certificates and the
Class R Certificates do not have a Certificate Principal
Balance.
“Certificate Rate”: Any of the
Class 1-AV-1 Certificate Rate, Class 2-AV-1
Certificate Rate, the Class 2-AV-2 Certificate Rate, the
Class 2-AV-3 Certificate Rate, the Class 2-AV-4
Certificate Rate, the Class M-1 Certificate Rate, the
Class M-2 Certificate Rate, the Class M-3 Certificate
Rate, the Class M-4 Certificate Rate, the Class M-5
Certificate Rate, the Class M-6 Certificate Rate, the
Class M-7 Certificate Rate, the Class M-8 Certificate
Rate or the Class M-9 Certificate Rate.
“Certification Parties”: As
defined in Section 12.08.
“Certifying Person”: As defined
in Section 12.08.
“Class”: Any class of the
Offered Certificates, the Class X-IO Certificates, the
Class P Certificates or the Class R Certificates.
“Class 1-AV-1
Certificate”: Any one of the Certificates designated
on the face thereof as a Class 1-AV-1 Certificate,
substantially in the form annexed hereto as Exhibit A-1
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class 1-AV-1 Certificate
Rate”: With respect to any Distribution Date and the
Class 1-AV-1 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 0.19% per annum (or 0.38% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Group 1 Net WAC Cap for the
Distribution Date.
“Class 2-AV-1
Certificate”: Any one of the Certificates designated
on the face thereof as a Class 2-AV-1 Certificate,
substantially in the form annexed hereto as Exhibit A-2
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class 2-AV-1 Certificate
Rate”: With respect to any Distribution Date and the
Class 2-AV-1 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 0.13% per annum (or 0.26% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Group 2 Net WAC Cap for the
Distribution Date.
“Class 2-AV-2
Certificate”: Any one of the Certificates designated
on the face thereof as a Class 2-AV-2 Certificate,
substantially in the form annexed hereto as Exhibit A-3
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class 2-AV-2 Certificate
Rate”: With respect to any Distribution Date and the
Class 2-AV-2 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 0.16% per annum (or 0.32% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Group 2 Net WAC Cap for the
Distribution Date.
“Class 2-AV-3
Certificate”: Any one of the Certificates designated
on the face thereof as a Class 2-AV-3 Certificate,
substantially in the form annexed hereto as Exhibit A-4
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class 2-AV-3 Certificate
Rate”: With respect to any Distribution Date and the
Class 2-AV-3 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 0.23% per annum (or 0.46% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Group 2 Net WAC Cap for the
Distribution Date.
“Class 2-AV-4
Certificate”: Any one of the Certificates designated
on the face thereof as a Class 2-AV-4 Certificate,
substantially in the form annexed hereto as Exhibit A-5
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class 2-AV-4 Certificate
Rate”: With respect to any Distribution Date and the
Class 2-AV-4 Certificates, the lesser of (A) the
sum of (1) LIBOR and (2) 0.34% per annum (or 0.68% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Group 2 Net WAC Cap for the
Distribution Date.
“Class Interest Carryover
Shortfall”: As to any Class of Offered
Certificates and any Distribution Date, an amount equal to the
sum of (i) the excess of the related Class Monthly
Interest Amount for the preceding Distribution Date and any
outstanding Class Interest Carryover Shortfall with respect
to such Class on any preceding Distribution Date, over the
amount in respect of interest that is actually distributed to
the Owners of such Class on such preceding Distribution
Date plus (ii) one month’s interest on such excess,
to the extent permitted by law, at the Certificate Rate for such
Class.
“Class M-1
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-1 Certificate,
substantially in the form annexed hereto as Exhibit A-6
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-1 Certificate
Rate”: With respect to any Distribution Date and the
Class M-1 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 0.50% per annum (or 0.75% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the
Distribution Date.
“Class M-1 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount and Group 2
Principal Distribution Amount and (ii) the Certificate
Principal Balance of the Class M-1 Certificates immediately
prior to the applicable Distribution Date and (b) on or
after the Stepdown Date, (x) 100% of the remaining
Principal Distribution Amount if the Certificate Principal
Balance of each Class of the Senior Certificates has been
reduced to zero and a Trigger Event exists, or (y) if a
Trigger Event is not in effect, the excess of (1) the sum
of (A) the aggregate Certificate Principal Balance of the
Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution
Date) and (B) the Certificate Principal Balance of the
Class M-1 Certificates immediately prior to such
Distribution Date over (2) the lesser of (A) 55.00% of
the Pool Balance as of the last day of the related Remittance
Period and (B) the Pool Balance as of the last day of the
related Remittance Period minus the OC Floor.
“Class M-2
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-2 Certificate,
substantially in the form annexed hereto as Exhibit A-7
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-2 Certificate
Rate”: With respect to any Distribution Date and the
Class M-2 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 0.65% per annum (or 0.98% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the
Distribution Date.
“Class M-2 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount and Class M-1 Principal
Distribution Amount and (ii) the Certificate Principal
Balance of the Class M-2 Certificates immediately prior to
the applicable Distribution Date and (b) on or after the
Stepdown Date, (x) 100% of the remaining Principal
Distribution Amount if the Certificate Principal Balance of each
of the Senior and Class M-1 Certificates has been reduced
to zero and a Trigger Event exists, or (y) if a Trigger
Event is not in effect, the excess of (1) the sum of
(A) the aggregate Certificate Principal Balance of the
Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution
Date), (B) the Certificate Principal Balance of the
Class M-1 Certificates (after giving effect to distribution
of the Class M-1 Principal Distribution Amount for such
Distribution Date) and (C) the Certificate Principal
Balance of the Class M-2 Certificates immediately prior to
such Distribution Date over (2) the lesser of
(A) 62.20% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC
Floor.
“Class M-3
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-3 Certificate,
substantially in the form annexed hereto as Exhibit A-8
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-3 Certificate
Rate”: With respect to any Distribution Date and the
Class M-3 Certificates, the lesser of (A) the sum of
(1) LIBOR and (2) 0.75% per annum (or 1.13% per annum
for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the
Distribution Date.
“Class M-3 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount, Class M-1 Principal
Distribution Amount and Class M-2 Principal Distribution
Amount and (ii) the Certificate Principal Balance of the
Class M-3 Certificates immediately prior to the applicable
Distribution Date and (b) on or after the Stepdown Date,
(x) 100% of the remaining Principal Distribution Amount if
the Certificate Principal Balance of each of the Senior,
Class M-1 and Class M-2 Certificates has been reduced
to zero and a Trigger Event exists, or (y) if a Trigger
Event is not in effect, the excess of (1) the sum of
(A) the aggregate Certificate Principal Balance of the
Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution
Date), (B) the Certificate Principal Balance of the
Class M-1 Certificates (after giving effect to distribution
of the Class M-1 Principal Distribution Amount for such
Distribution Date), (C) the Certificate Principal Balance
of the Class M-2 Certificates (after giving effect to
distribution of the Class M-2 Principal Distribution Amount
for such Distribution Date) and (D) the Certificate
Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (2) the lesser of
(A) 66.60% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC
Floor.
“Class M-4
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-4 Certificate,
substantially in the form annexed hereto as Exhibit A-9
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-4 Certificate
Rate”: With respect to any Distribution Date and the
Class M-4 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 1.15% per annum (or 1.73% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the
Distribution Date.
“Class M-4 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution
Amount and Class M-3 Principal Distribution Amount and
(ii) the Certificate Principal Balance of the
Class M-4 Certificates immediately prior to the applicable
Distribution Date and (b) on or after the Stepdown Date,
(x) 100% of the remaining Principal Distribution Amount if
the Certificate Principal Balance of each of the Senior,
Class M-1, Class M-2 and Class M-3 Certificates
has been reduced to zero and a Trigger Event exists, or
(y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for
such Distribution Date), (B) the Certificate Principal
Balance of the Class M-1 Certificates (after giving effect
to distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after
giving effect to distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the
Certificate Principal Balance of the Class M-3 Certificates
(after giving effect to distribution of the Class M-3
Principal Distribution Amount for such Distribution
Date) and (E) the Certificate Principal Balance of the
Class M-4 Certificates immediately prior to such
Distribution Date over (2) the lesser of (A) 70.60% of
the Pool Balance as of the last day of the related Remittance
Period and (B) the Pool Balance as of the last day of the
related Remittance Period minus the OC Floor.
“Class M-5
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-5 Certificate,
substantially in the form annexed hereto as Exhibit A-10
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-5 Certificate
Rate”: With respect to any Distribution Date and the
Class M-5 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 1.50% per annum (or 2.25% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the
Distribution Date.
“Class M-5 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount and
Class M-4 Principal Distribution Amount and (ii) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to the applicable Distribution Date and
(b) on or after the Stepdown Date, (x) 100% of the
remaining Principal Distribution Amount if the Certificate
Principal Balance of each of the Senior, Class M-1,
Class M-2, Class M-3 and Class M-4 Certificates
has been reduced to zero and a Trigger Event exists, or
(y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for
such Distribution Date), (B) the Certificate Principal
Balance of the Class M-1 Certificates (after giving effect
to distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after
giving effect to distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the
Certificate Principal Balance of the Class M-3 Certificates
(after giving effect to distribution of the Class M-3
Principal Distribution Amount for such Distribution Date),
(E) the Certificate Principal Balance of the Class M-4
Certificates (after giving effect to distribution of the
Class M-4 Principal Distribution Amount for such
Distribution Date) and (F) the Certificate Principal
Balance of the Class M-5 Certificates immediately prior to
such Distribution Date over (2) the lesser of
(A) 74.40% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC
Floor.
“Class M-6
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-6 Certificate,
substantially in the form annexed hereto as Exhibit A-11
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-6 Certificate
Rate”: With respect to any Distribution Date and the
Class M-6 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 1.80% per annum (or 2.70% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the
Distribution Date.
“Class M-6 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount,
Class M-4 Principal Distribution Amount and Class M-5
Principal Distribution Amount and (ii) the Certificate
Principal Balance of the Class M-6 Certificates immediately
prior to the applicable Distribution Date and (b) on or
after the Stepdown Date, (x) 100% of the remaining
Principal Distribution Amount if the Certificate Principal
Balance of each of the Senior, Class M-1, Class M-2,
Class M-3, Class M-4 and
Class M-5 Certificates has been reduced to zero and a
Trigger Event exists, or (y) if a Trigger Event is not in
effect, the excess of (1) the sum of (A) the aggregate
Certificate Principal Balance of the Senior Certificates (after
giving effect to distributions of the Senior Principal
Distribution Amount for such Distribution Date), (B) the
Certificate Principal Balance of the
Class M-1 Certificates (after giving effect to
distribution of the Class M-1 Principal Distribution Amount
for such Distribution Date), (C) the Certificate Principal
Balance of the Class M-2 Certificates (after giving
effect to distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the
Certificate Principal Balance of the
Class M-3 Certificates (after giving effect to
distribution of the Class M-3 Principal Distribution Amount
for such Distribution Date), (E) the Certificate Principal
Balance of the Class M-4 Certificates (after giving
effect to distribution of the Class M-4 Principal
Distribution Amount for such Distribution Date), (F) the
Certificate Principal Balance at the
Class M-5 Certificates (after giving effect to
distribution of the Class M-5 Principal Distribution Amount
for such Distribution Date), and (G) the Certificate
Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (2) the
lesser of (A) 77.80% of the Pool Balance as of the last day
of the related Remittance Period and (B) the Pool Balance
as of the last day of the related Remittance Period minus the OC
Floor.
“Class M-7A
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-7A Certificate,
substantially in the form annexed hereto as Exhibit A-12
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-7B
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-7B Certificate,
substantially in the form annexed hereto as Exhibit A-13
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-7 Certificate
Rate”: With respect to any Distribution Date and the
Class M-7A and Class M-7B Certificates, the
lesser of (A) the sum of (1) LIBOR and (2) 2.00%
per annum (or 3.00% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (B) the Subordinate
Net WAC Cap for the Distribution Date.
“Class M-7 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5
Principal Distribution Amount and Class M-6 Principal
Distribution Amount and (ii) the aggregate Certificate
Principal Balance of the Class M-7A and Class M-7B
Certificates immediately prior to the applicable Distribution
Date and (b) on or after the Stepdown Date, (x) 100%
of the remaining Principal Distribution Amount if the
Certificate Principal Balance of each of the Senior,
Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates has been reduced
to zero and a Trigger Event exists, or (y) if a Trigger
Event is not in effect, the excess of (1) the sum of
(A) the aggregate Certificate Principal Balance of the
Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution
Date), (B) the Certificate Principal Balance of the
Class M-1 Certificates (after giving effect to
distribution of the Class M-1 Principal Distribution Amount
for such Distribution Date), (C) the Certificate Principal
Balance of the Class M-2 Certificates (after giving
effect to distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the
Certificate Principal Balance of the Class M-3 Certificates
(after giving effect to distribution of the Class M-3
Principal Distribution Amount for such Distribution Date),
(E) the Certificate Principal Balance of the Class M-4
Certificates (after giving effect to distribution of the
Class M-4 Principal Distribution Amount for such
Distribution Date), (F) the Certificate Principal Balance
of the Class M-5 Certificates (after giving effect to
distribution of the Class M-5 Principal Distribution Amount
for such Distribution Date), (G) the Certificate Principal
Balance of the Class M-6 Certificates (after giving effect
to distribution of the Class M-6 Principal Distribution
Amount for such Distribution Date) and (H) the
aggregate Certificate Principal Balance of the Class M-7A
and Class 7B Certificates immediately prior to such
Distribution Date over (2) the lesser of (A) 81.00% of
the Pool Balance as of the last day of the related Remittance
Period and (B) the Pool Balance as of the last day of the
related Remittance Period minus the OC Floor.
“Class M-8
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-8 Certificate,
substantially in the form annexed hereto as Exhibit A-14
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-8 Certificate
Rate”: With respect to any Distribution Date and the
Class M-8 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 2.00% per annum (or 3.00% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the
Distribution Date.
“Class M-8 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5
Principal Distribution Amount, Class M-6 Principal
Distribution Amount and Class M-7 Principal Distribution
Amount and (ii) the Certificate Principal Balance of the
Class M-8 Certificates immediately prior to the applicable
Distribution Date and (b) on or after the Stepdown Date,
(x) 100% of the remaining Principal Distribution Amount if
the Certificate Principal Balance each Class of Senior
Certificates, the Class M-1 Certificates, the
Class M-2 Certificates, the Class M-3 Certificates,
the Class M-4 Certificates, the Class M-5
Certificates, the Class M-6 Certificates, the
Class M-7A Certificates and the Class 7B Certificates
has been reduced to zero and a Trigger Event exists, or
(y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to the
distribution of the Senior Principal Distribution Amount on such
Distribution Date), (B) the Certificate Principal Balance
of the Class M-1 Certificates (after giving effect to the
distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Certificate Principal
Balance of the Class M-2 Certificates (after giving effect
to the distribution of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Certificate
Principal Balance of the Class M-3 Certificates (after
giving effect to the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date),
(E) the Certificate Principal Balance of the Class M-4
Certificates (after giving effect to the distribution of the
Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Certificate Principal Balance
of the Class M-5 Certificates (after giving effect to the
distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Certificate Principal
Balance of the Class M-6 Certificates (after giving effect
to the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the aggregate
Certificate Principal Balance of the Class M-7A and
Class M-7B Certificates (after giving effect to the
distribution of the Class M-7 Principal Distribution Amount
on such Distribution Date) and (I) the Certificate
Principal Balance of the Class M-8 Certificates immediately
prior to such Distribution Date, over (2) the lesser of
(A) 84.00% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC
Floor.
“Class M-9A
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-7A Certificate,
substantially in the form annexed hereto as Exhibit A-15
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-9B
Certificate”: Any one of the Certificates designated
on the face thereof as a Class M-7B Certificate,
substantially in the form annexed hereto as Exhibit A-16
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-9 Certificate
Rate”: With respect to any Distribution Date and the
Class M-9A and Class M-9B Certificates, the
lesser of (A) the sum of (1) LIBOR and (2) 2.00%
per annum (or 3.00% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (B) the Subordinate
Net WAC Cap for the Distribution Date.
“Class M-9 Principal Distribution
Amount”: As to any Distribution Date (a) prior
to the Stepdown Date, the lesser of (i) the remaining
Principal Distribution Amount after the distribution of the
Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5
Principal Distribution Amount, Class M-6 Principal
Distribution Amount, Class M-7 Principal Distribution
Amount and Class M-8 Principal Distribution Amount and
(ii) the aggregate Certificate Principal Balance of the
Class M-9A and Class 9-B Certificates immediately prior to
the applicable Distribution Date and (b) on or after the
Stepdown Date, (x) 100% of the remaining Principal
Distribution Amount if the Certificate Principal Balance each
Class of Senior Certificates, the Class M-1
Certificates, the Class M-2 Certificates, the
Class M-3 Certificates, the Class M-4 Certificates,
the Class M-5 Certificates, the Class M-6
Certificates, the Class M-7A Certificates, the
Class M-7B Certificates and the Class M-8 Certificates
has been reduced to zero and a Trigger Event exists, or
(y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to the
distribution of the Senior Principal Distribution Amount on such
Distribution Date), (B) the Certificate Principal Balance
of the Class M-1 Certificates (after giving effect to the
distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Certificate Principal
Balance of the Class M-2 Certificates (after giving effect
to the distribution of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Certificate
Principal Balance of the Class M-3 Certificates (after
giving effect to the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date),
(E) the Certificate Principal Balance of the Class M-4
Certificates (after giving effect to the distribution of the
Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Certificate Principal Balance
of the Class M-5 Certificates (after giving effect to the
distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Certificate Principal
Balance of the Class M-6 Certificates (after giving effect
to the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the aggregate
Certificate Principal Balance of the Class M-7A and
Class M-7B Certificates (after giving effect to the
distribution of the Class M-7 Principal Distribution Amount
on such Distribution Date), (I) the Certificate Principal
Balance of the Class M-8 Certificates (after giving effect
to the distribution of the Class M-8 Principal Distribution
Amount on such Distribution Date) and (J) the
aggregate Certificate Principal Balance of the Class M-9A
and Class 9B Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) 87.10%
of the Pool Balance as of the last day of the related Remittance
Period and (B) the Pool Balance as of the last day of the
related Remittance Period minus the OC Floor.
“Class Monthly Interest
Amount”: With respect to each Class of Offered
Certificates means, with respect to any Distribution Date, the
aggregate amount of interest accrued during the related Interest
Period at the related Certificate Rate on the Certificate
Principal Balance of the Class of Offered Certificates.
“Class P Certificate”: Any
one of the Certificates designated on the face thereof as a
Class P Certificate, substantially in the form annexed
hereto as Exhibit B-2 authenticated and delivered by the
Securities Administrator, representing the right to
distributions as set forth herein and each evidencing a
percentage ownership of the Prepayment Charges and ownership of
an interest designated as a “regular interest” in
the Master REMIC created hereunder for purposes of the
REMIC provisions.
“Class Principal Carryover
Shortfall”: As to any Class of Subordinate
Certificates and any Distribution Date, the excess, if any, of
(i) the sum of (x) the amount of the reduction in the
Certificate Principal Balance of that Class of Subordinate
Certificates on such Distribution Date as a result of the
application of Applied Realized Loss Amounts for such
Distribution Date and (y) the amount of such reductions on
prior Distribution Dates over (ii) the sum of (x) the
amount distributed in respect of the Class Principal
Carryover Shortfall to such Class of Subordinate
Certificates on prior Distribution Dates and (y) the amount
of any increases in the Certificate Principal Balance of that
Class of Subordinate Certificates on such Distribution Date
and any prior Distribution Dates as a result of the application
of Recoveries to such Class as provided in
Section 7.11(b) hereof.
“Class Principal Distribution
Amount”: The Senior Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount, the Class M-3
Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution
Amount, the Class M-6 Principal Distribution Amount, the
Class M-7 Principal Distribution Amount, the Class M-8
Principal Distribution Amount or the Class M-9 Principal
Distribution Amount, as the case may be.
“Class R Certificate”: Any
one of the Certificates designated on the face thereof as a
Class R Certificate, substantially in the form annexed
hereto as Exhibit C, authenticated and delivered by the
Securities Administrator, representing the right to
distributions as set forth herein. For the purposes of the
REMIC Provisions, the Class R Certificate shall
evidence (i) an interest designated as the R-1 Interest,
which is the “residual interest” in REMIC I,
the R-2 Interest, which is the “residual interest”
in REMIC II and (ii) an interest designated as the R-3
Interest, which is the “residual interest” in the
Master REMIC. The Owner of the Class R Certificate
shall be entitled to separate such Certificate into its
component R-1 Interest, R-2 Interest and R-3 Interest
parts, as further described in the Class R Certificate
attached hereto as Exhibit C.
“Class X-IO
Certificate”: Any one of the Certificates designated
on the face thereof as a Class X-IO Certificate,
substantially in the form annexed hereto as Exhibit B-1,
authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein, and
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for the purposes of the REMIC Provisions.
“Class X-IO Distribution
Amount”: With respect to any Distribution Date, the
lesser of (i) the aggregate funds, if any, remaining after
the making of all applications, transfers and disbursements
described in Section 7.03(b) clause A.1. through
7.03(b) clause C.19. hereof and (ii) the amount
described in footnote (2) of Section 2.08(g) for
the current and for all prior Distribution Dates less amounts
treated as distributed to the Class X-IO Certificates on
prior Distribution Dates pursuant to
Section 7.03(b) clauses C.15 and C.20.
“Class X-IO Shortfall
Amount”: For any Distribution Date, the excess, if
any, of (i) any Net Swap Payment or Swap Termination
Payment (other than a Swap Termination Payment attributable to a
Swap Provider Trigger Event) owed by the Supplemental
Interest Trust to the Swap Provider on such Distribution Date
over (ii) the amount of interest distributable with respect
to the Class T2-IO Interest in REMIC II for such
Distribution Date as described in Section 2.08(f) at
footnote (2).
“Clean-Up Call Date”: The first
Distribution Date following the last day of the Remittance
Period on which the Pool Balance has declined to 10% or less of
the Pool Balance as of the Cut-Off Date.
“Closing”: As defined in
Section 4.02 hereof.
“Code”: The Internal Revenue
Code of 1986, as amended.
“Combined Loan-to-Value Ratio or
CLTV”: With respect to any Home Equity Loan as of any
date of determination, the ratio on such date of the outstanding
principal amount of the Home Equity Loan and any other home
equity loan which is secured by a lien on the related Property
to the Appraised Value of the Property.
“Commission”: The Securities
and Exchange Commission.
“Compensating Interest”: As
defined in Section 8.10(a) hereof.
“Corporate Trust
Office”: (i) with respect to the Trustee the
principal office of the Trustee at 101 Barclay Street Floor 4W,
New York, New York 10286, Attention: Structured Finance
Services, Home Equity Loan Trust 2007-FRE1 or at such other
address as the Trustee may designate by notice to the Depositor,
the Seller, the Servicer, the Securities Administrator, the
Master Servicer and the Owners, or the principal office of any
successor Trustee hereunder and (ii) with respect to the
Securities Administrator, (A) for certificate transfers and
final payment, at Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate
Trust-Nationstar 2007-FRE1 and (B) for all other
purposes, 9062 Old Annapolis Road, Columbia, Maryland 24015,
Attention: Client Manager-Nationstar 2007-FRE1 or at
such other address as the Securities Administrator may designate
by notice to the Depositor, the Seller, the Servicer, the Master
Servicer, the Trustee and the Owners, or the principal office of
any successor Securities Administrator hereunder.
“Coupon Rate”: The rate of
interest borne by each Note from time to time.
“Cram Down Loss”: With respect
to a Home Equity Loan, if a court of appropriate jurisdiction in
an insolvency proceeding shall have issued an order reducing the
Loan Balance of such Home Equity Loan, the amount of such
reduction. A “Cram Down Loss” shall be deemed
to have occurred on the date of issuance of such order.
“Cumulative Loss Trigger
Event”: With respect to any Distribution Date and the
Home Equity Loans, shall have occurred if the fraction,
expressed as a percentage, obtained by dividing (x) the
aggregate amount of cumulative Realized Losses incurred on the
Home Equity Loans from the Cut-Off Date through the last day of
the related Remittance Period (less the aggregate amount of
Recoveries during such period) by (y) the aggregate
Loan Balance of the Home Equity Loans as of the Cut-Off Date,
exceeds the applicable percentage described below with respect
to such Distribution Date:
|
|
|
Distribution Date
|
Loss Percentage
|
|
July 2009 to June 2010
|
1.80% for the first month, plus an additional 1/12 th of
2.25% for each month thereafter.
|
|
July 2010 to June 2011
|
4.05% for the first month, plus an additional 1/12 th of
2.30% for each month thereafter.
|
|
July 2011 to June 2012
|
6.35% for the first month, plus an additional 1/12 th of
1.85% for each month thereafter.
|
|
July 2012 to June 2013
|
8.20% for the first month, plus an additional 1/12 th of
1.05% for each month thereafter.
|
|
July 2013 to June 2014
|
9.25% for the first month, plus an additional 1/12 th of
0.10% for each month thereafter.
|
|
July 2014 and thereafter
|
9.35%.
|
“Custodial Agreement”: The
Custodial Agreement dated as of June 1, 2007 among the
Custodian, the Servicer and the Trustee.
“Custodian”: Wells Fargo Bank,
N.A., as Custodian on behalf of the Trustee pursuant to the
Custodial Agreement and any successor Custodian.
“Cut-Off Date”: June 1,
2007.
“Delinquency Advance”: As
defined in Section 8.09(a) hereof.
“Delinquency Event”: A
Delinquency Event shall have occurred and be continuing if, at
any time, the 60+ Delinquency Percentage (Rolling Three
Month) exceeds 30.25% of the Senior Enhancement Percentage
from the prior period.
“Delinquent”: A Home Equity
Loan is “Delinquent” if any payment due thereon is
not made by the Mortgagor by the close of business on the
related Due Date. A Home Equity Loan is “30 days
Delinquent” if such payment has not been received by the
close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due,
or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due
on the 31 st day of such month) then on the last
day of such immediately succeeding month. Similarly for
“60 days Delinquent,” “90 days
Delinquent” and so on.
“Delivery Order”: The delivery
order in the form set forth as Exhibit G hereto and
delivered by the Depositor to the Trustee and the Securities
Administrator on the Startup Day pursuant to Section 4.01
hereof.
“Depositor”: Nationstar Funding
LLC, a Delaware limited liability company, or any successor
thereto.
“Depository”: The Depository
Trust Company, 7 Hanover Square, New York, New York, 10004, and
any successor Depository.
“Designated Depository
Institution”: With respect to the Principal and
Interest Account, a trust account maintained by the trust
department of a federal or state chartered depository
institution, acting in its fiduciary capacity, having combined
capital and surplus of at least $100,000,000; provided, however,
that if the Principal and Interest Account is not maintained
with the Securities Administrator, (i) such institution
shall have a long-term debt rating of at least “A”
by Standard & Poor’s, “A2” by
Moody’s and, if rated by Fitch, “A” by Fitch
and (ii) the Servicer shall provide the Securities
Administrator and the Master Servicer with a statement.
“Direct Participant” or “DTC
Participant”: Any broker-dealer, bank or other
financial institution for which the Depository holds Offered
Certificates from time to time as a securities depository.
“Discount Factor”: With respect to
each Distribution Date, the product of each Projected Zero
Factor for each preceding Distribution Date, including such
Distribution Date, with the Projected Zero Factor for the
Significance Percentage Calculation Date equal to 1.
“Disqualified
Organization”: The meaning set forth from time to
time in the definition thereof at
Section 860E(e)(5) of the Code (or any successor
statute thereto).
“Distribution Date”: Any date
on which the Securities Administrator is required to make
distributions to the Owners, which shall be the 25 th
day of each month or if such day is not a Business Day, the next
Business Day thereafter, commencing in July 2007.
“Downgrade
Provisions”: Provisions of the Swap Agreement which
are triggered if the short-term or long-term credit ratings of
the Swap Provider fall below certain levels specified in the
Swap Agreement.
“Due Date”: With respect to any
Home Equity Loan, the date on which the Monthly Payment with
respect to such Home Equity Loan is required to be paid pursuant
to the related Note exclusive of any days of grace.
“EDGAR”: The Commission’s
Electronic Data Gathering, Analysis and Retrieval system.
“Eligible Account”: Either
(A) a segregated account or accounts maintained with an
institution whose deposits are insured by the FDIC, the
unsecured and uncollateralized debt obligations of which
institution shall be rated “AA-” or higher by
Standard & Poor’s and, in the case of any institution
other than Wells Fargo Bank, N.A., “Aa2” or higher
by Moody’s and, if rated by Fitch, “AA” or
higher by Fitch, (in the case of its long-term obligations), and
“A-2” or higher by Standard & Poor’s and
in the highest short term rating category by each of
Moody’s and, if rated by Fitch, Fitch (in the case of its
short-term obligations), and which is (i) a federal savings
and loan association duly organized, validly existing and in
good standing under the federal banking laws, (ii) an
institution duly organized, validly existing and in good
standing under the applicable banking laws of any state,
(iii) a national banking association duly organized,
validly existing and in good standing under the federal banking
laws, (iv) a principal subsidiary of a bank holding
company, or (v) approved in writing by each of the Rating
Agencies or (B) a segregated trust account or accounts
maintained with the Corporate Trust Office of the Securities
Administrator, or the trust department of a federal or state
chartered depository institution acceptable to each Rating
Agency, having capital and surplus of not less than
$100,000,000, acting in its fiduciary capacity.
“Eligible Investments”: Those
investments so designated pursuant to Section 7.07
hereof.
“ERISA”: The Employee
Retirement Income Security Act of 1974, as amended.
“ERISA-Qualifying
Underwriting”: A best efforts or firm commitment
underwriting or private placement that meets the requirements of
an Underwriter’s Exemption.
“ERISA-Restricted
Certificate”: Any Class M-7B, Class M-8,
Class M-9B, Class X-IO, Class P and Class R
Certificate and any Certificate with a rating below the lowest
applicable rating permitted under an Underwriter’s
Exemption.
“ERISA-Restricted Swap
Certificate”: Any Offered Certificate other than the
Class M-7B, Class M-8, Class M-9B
Certificates.
“Events of Default”: Under the
Swap Agreement (each a “Swap Default”), among
others, the following standard events of default under the ISDA
Master Agreement, as described in Sections 5(a)(i),
5(a)(vii) and 5(a)(viii) of the ISDA Master
Agreement:
·
Failure to Pay or
Deliver,
·
“Bankruptcy” (as amended in the
Swap Agreement) and
·
“Merger
without Assumption” (but only with respect to the Swap
Provider).
“Excess Interest”: As to any
Distribution Date, the amounts remaining after the application
of payments pursuant to
Section 7.03(b) clauses A., B. and C.1. through
C.12.
“Excess Overcollateralization
Amount”: As to any Distribution Date, the lesser of
(i) the Aggregate Principal Amount for that Distribution
Date and (ii) the excess, if any, of (x) the
Overcollateralization Amount (assuming 100% of the Aggregate
Principal Amount is distributed on the Senior and Subordinate
Certificates) over (y) the Required
Overcollateralization Amount.
“Exchange Act”: The Securities
Exchange Act of 1934, as amended.
“Exchange Act Reports”: Any
reports on Form 10-D, Form 8-K and Form 10-K
required to be filed by the Depositor with respect to the Trust
Estate under the Exchange Act.
“FAS 140”: The Statement of
Financial Accounting Standards No. 140 issued by the Financial
Accounting Standards Board, dated September 2000.
“FDIC”: The Federal Deposit
Insurance Corporation, a corporate instrumentality of the United
States, or any successor thereto.
“FHLMC”: The Federal Home Loan
Mortgage Corporation, a corporate instrumentality of the United
States created pursuant to the Emergency Home Finance Act of
1970, as amended, or any successor thereof.
“File”: The documents delivered
to the Custodian on behalf of the Trustee pursuant to
Section 3.05(b) hereof pertaining to a particular Home
Equity Loan and any additional documents required to be added to
the File pursuant to this Agreement.
“Final Certification”: As
defined in Section 3.06(c) hereof.
“Final Recovery
Determination”: With respect to any defaulted Home
Equity Loan or REO Property (other than a Home Equity Loan
purchased by the Seller, the Depositor or the Servicer), a
determination made by the Servicer that all recoveries which the
Servicer, in its reasonable business judgment, expects to be
finally recoverable in respect thereof have been so recovered or
that the Servicer believes in its reasonable business judgment
the cost of obtaining any additional recoveries therefrom would
exceed the amount of such recoveries. The Servicer shall
maintain records of each Final Recovery Determination.
“Final Scheduled Distribution
Date”: As set out in Section 2.08(g) hereof
with respect to each Certificate.
“First Mortgage Loan”: A Home
Equity Loan which constitutes a first priority mortgage lien
with respect to any Property.
“Fitch”: Fitch Ratings or any
successor thereto.
“Fixed Rate Home Equity
Loan”: With respect to the Home Equity Loans, the
fixed rate Home Equity Loans identified as such in
Schedule I-A or Schedule I-B hereto, including any
Qualified Replacement Mortgages delivered in replacement
thereof.
“Fixed Swap Payment”: With
respect to any Distribution Date, an amount equal to the product
of (i) 5.400% (ii) the lesser of (a) the related
Scheduled Notional Amount (as set forth on Schedule I-H
hereto), and (b) (x) the aggregate Certificate
Principal Balance of the Offered Certificates (other than the
Class M-7B, Class M-8 and Class M-9B
Certificates) as of such Distribution Date prior to giving
effect to any payments on such Distribution Date divided by
(y) 100, (iii) a fraction, the numerator of which is
30 (except for with respect to the first Distribution Date, in
which case the numerator will be the number of days from the
Startup Day to, but excluding, the first Distribution
Date) and the denominator of which is 360 and (iv) the
related Payment Factor (as set forth on Schedule I-H
hereto).
“Floating Swap Payment”: With
respect to any Distribution Date, a floating amount equal to the
product of (i) LIBOR (as determined pursuant to the Swap
Agreement for such Distribution Date), (ii) the lesser of
(a) the related Scheduled Notional Amount (as set forth on
Schedule I-H hereto), and (b) (x) the aggregate
Certificate Principal Balance of the Offered Certificates (other
than the Class M-7B, Class M-8 and Class M-9B
Certificates) as of such Distribution Date prior to giving
effect to any payments on such Distribution Date divided by
(y) 100, (iii) a fraction, the numerator of which is
the actual number of days elapsed from and including the
previous Distribution Date to but excluding the current
Distribution Date (except for with respect to the first
Distribution Date, in which case the numerator will be the
number of days from the Startup Day to, but excluding, the first
Distribution Date) and the denominator of which is 360 and
(iv) the related Payment Factor (as set forth on
Schedule I-H hereto).
“Flood Zone Service
Contract”: A transferable contract maintained for the
Property with a nationally recognized flood zone service
provider for the purpose of obtaining the current flood zone
status relating to such Property.
“FNMA”: The Federal National
Mortgage Association, a federally-chartered and privately-owned
corporation existing under the Federal National Mortgage
Association Charter Act, as amended, or any successor
thereof.
“FNMA Guide”: FNMA’s
Servicing Guide, as the same may be amended by FNMA from time to
time.
“Form 8-K Disclosure
Information”: As defined in Section 12.03.
“Group Balance”: With
respect to any date and Home Equity Loan Group , the
aggregate of the Loan Balances of all Home Equity Loans of the
related Home Equity Loan Group as of such date.
“Group ”: Any of
Group 1 or Group 2, as applicable.
“Group 1”: With respect to
the Home Equity Loans, the pool of Home Equity Loans identified
in Schedule I-A hereto, including any Qualified Replacement
Mortgages delivered in replacement thereof. With respect to
the Offered Certificates, the Group 1 Certificates.
“Group 1 Allocation
Percentage”: With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is
the Basic Principal Amount derived from the Group 1 Home
Equity Loans, and the denominator of which is the Aggregate
Principal Amount.
“Group 1
Certificates”: The Class 1-AV-1
Certificates.
“Group 1 Monthly Remittance
Amount”: As of any Monthly Remittance Date,
(A) the sum, without duplication, of (i) all interest
received (other than interest received on or after the Cut-off
Date that accrued on the Group 1 Home Equity Loans during
May 2007) (including any related Delinquency
Advances) during the related Remittance Period with respect
to the Home Equity Loans in Group 1 (net of the Servicing
Fee related to the Group 1 Home Equity Loans),
(ii) all Compensating Interest paid by the Servicer or
Master Servicer on such Monthly Remittance Date with respect to
Group 1, (iii) the portion of the Loan Purchase Price
amounts, and Substitution Amounts relating to interest on the
Home Equity Loans in Group 1 paid by Nationstar Mortgage or
the Servicer on or prior to such Monthly Remittance Date,
(iv) the interest portion of all Net Liquidation Proceeds
actually collected by the Servicer with respect to the Home
Equity Loans in Group 1 during the related Remittance
Period, (v) the principal actually collected by the
Servicer with respect to Home Equity Loans in Group 1
during the related Remittance Period, (vi) the outstanding
principal balance of each Home Equity Loan in Group 1 that
was purchased from the Trustee on or prior to such Monthly
Remittance Date, to the extent such outstanding principal
balance was actually deposited in the Principal and Interest
Account on or prior to such Monthly Remittance Date,
(vii) any Substitution Amounts relating to principal
delivered by Nationstar Mortgage in connection with a
substitution of a Home Equity Loan in Group 1, to the
extent such Substitution Amounts were actually deposited in the
Principal and Interest Account on or prior to such Monthly
Remittance Date, (viii) the principal portion of all Net
Liquidation Proceeds and Recoveries actually collected by the
Servicer with respect to Home Equity Loans in Group 1
during the related Remittance Period and (ix) the amount of
investment losses required to be deposited pursuant to
Section 8.08(b); minus (B) any amounts netted from the
foregoing or withdrawn from the Principal and Interest Account
by the Servicer as permitted by this Agreement.
“Group 1 Net WAC
Cap”: With respect to any Distribution Date, and the
Group 1 Certificates, a rate per annum equal to the product
of (i) the excess, if any, of (a) the weighted average
of the Net Coupon Rates on the Group 1 Home Equity Loans as
of the beginning of the related Remittance Period over
(b) the Swap Expense Fee Rate and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the
actual number of days in the related interest period.
“Group 1 Net WAC Cap
Carryover”: With respect to any Distribution Date,
and the Group 1 Certificates, the sum of (A) the
excess of (1) the amount of interest that the Group 1
Certificates would otherwise be entitled to receive on the
Distribution Date had the Certificate Rate for such
Class been calculated at the Certificate Rate for such
Class and Distribution Date without regard to the
Group 1 Net WAC Cap over (2) the amount of interest
payable on such Class at the respective Certificate Rate
for such Class for the Distribution Date and (B) the
excess described in clause (A) for such Class for
all previous Distribution Dates (including any interest accrued
on that amount at the related Certificate Rate without regard to
the Group 1 Net WAC Cap) not previously paid to such
Class.
“Group 1 Principal Distribution
Amount”: The product of (i) the Principal
Distribution Amount for that Distribution Date and (ii) the
Group 1 Allocation Percentage.
“Group 1 Senior Principal
Distribution Amount”: The excess, if any, of
(1) the aggregate Certificate Principal Balances of the
Group 1 Certificates immediately prior to that Distribution
Date over (i) the lesser of (a) 47.10% of the
aggregate Loan Balance of the Group 1 Home Equity Loans as
of the last day of the related Remittance Period and
(b) the aggregate Loan Balance of the Group 1 Home
Equity Loans as of the last date of the related Remittance
Period minus 0.50% of the aggregate Loan Balance of the
Group 1 Home Equity Loans as of the Cut-Off Date.
“Group 2”: With respect to
the Home Equity Loans, the pool of Home Equity Loans identified
in Schedule I-B hereto, including any Qualified Replacement
Mortgages delivered in replacement thereof. With respect to the
Offered Certificates, the related Class or Classes of
Group 2 Certificates, as the context requires.
“Group 2 Allocation
Percentage”: With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is
the Basic Principal Amount derived from the Group 2 Home
Equity Loans, and the denominator of which is the Aggregate
Principal Amount.
“Group 2
Certificates”: The Class 2-AV-1,
Class 2-AV-2, Class 2-AV-3 and Class 2-AV-4
Certificates.
“Group 2 Monthly Remittance
Amount”: As of any Monthly Remittance Date,
(A) the sum, without duplication, of (i) all interest
received (other than interest received on or after the Cut-off
Date relating to interest that accrued on the Group 2 Home
Equity Loans during May 2007) (including any related
Delinquency Advances) during the related Remittance Period
with respect to the Home Equity Loans in Group 2 (net of
the Servicing Fee relating to the Group 2 Home Equity
Loans), (ii) all Compensating Interest paid by the Servicer
or Master Servicer on such Monthly Remittance Date with respect
to Group 2, (iii) the portion of the Loan Purchase
Price amounts and Substitution Amounts relating to interest on
the Home Equity Loans in Group 2 paid by Nationstar
Mortgage or the Servicer on or prior to such Monthly Remittance
Date, (iv) the interest portion of all Net Liquidation
Proceeds actually collected by the Servicer with respect to the
Home Equity Loans in Group 2 during the related Remittance
Period, (v) the principal actually collected by the
Servicer with respect to Home Equity Loans in Group 2
during the related Remittance Period, (vi) the outstanding
principal balance of each Home Equity Loan in Group 2 that
was purchased from the Trustee on or prior to such Monthly
Remittance Date, to the extent such outstanding principal
balance was actually deposited in the Principal and Interest
Account on or prior to such Monthly Remittance Date,
(vii) any Substitution Amounts relating to principal
delivered by Nationstar Mortgage in connection with a
substitution of a Home Equity Loan in Group 2, to the
extent such Substitution Amounts were actually deposited in the
Principal and Interest Account on or prior to such Monthly
Remittance Date, (viii) the principal portion of all Net
Liquidation Proceeds and Recoveries actually collected by the
Servicer with respect to Home Equity Loans in Group 2
during the related Remittance Period and (ix) the amount of
investment losses required to be deposited pursuant to
Section 8.08(b); minus (B) any amounts netted from the
foregoing or withdrawn from the Principal and Interest Account
by the Servicer as permitted by this Agreement.
“Group 2 Net WAC
Cap”: With respect to any Distribution Date, and for
any Class of Group 2 Certificates, a rate per annum
equal to the product of (i) the excess, if any, of
(a) the weighted average of the Net Coupon Rates on the
Group 2 Home Equity Loans as of the beginning of the
related Remittance Period over (b) the Swap Expense Fee
Rate and (ii) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days in the
related interest period.
“Group 2 Net WAC Cap
Carryover”: With respect to any Distribution Date and
the Group 2 Certificates, the sum of (A) the excess of
(1) the amount of interest the related Class of
Group 2 Certificates would otherwise be entitled to receive
on the Distribution Date had its Certificate Rate been
calculated at the Certificate Rate for such Class and
Distribution Date without regard to the Group 2 Net WAC Cap
over (2) the amount of interest payable on such
Class at the Certificate Rate for such Class for the
Distribution Date and (B) the excess described in
clause (A) for such Class for all previous
Distribution Dates (including any interest accrued thereon at
the related Certificate Rate without regard to the Group 2
Net WAC Cap) not previously paid to such Class.
“Group 2 Principal Distribution
Amount”: The product of (i) the Principal
Distribution Amount for that Distribution Date and (ii) the
Group 2 Allocation Percentage.
“Group 2 Senior Principal
Distribution Amount”: The excess, if any, of
(1) the aggregate Certificate Principal Balances of the
Group 2 Certificates immediately prior to that Distribution
Date over (i) the lesser of (a) 47.10% of the
aggregate Loan Balance of the Group 2 Home Equity Loans as
of the last day of the related Remittance Period and
(b) the aggregate Loan Balance of the Group 2 Home
Equity Loans as of the last date of the related Remittance
Period minus 0.50% of the aggregate Loan Balance of the
Group 2 Home Equity Loans as of the Cut-Off Date.
“Group Subordinate
Amount”: With respect to each Group and any
Distribution Date, is the excess of the aggregate Loan Balance
of the related Group as of the first day of the related
Remittance Period, over the aggregate Certificate Principal
Balance of the Senior Certificates of such
Group immediately prior to such Distribution Date.
“Highest Lawful Rate”: As
defined in Section 11.13 hereof.
“Home Equity Loan Assets”: The
meaning set forth under the heading “CONVEYANCE”
herein.
“Home Equity Loan Group ” or
“Group ”: Group 1 or Group 2, as
the case may be. References herein to the related
Class of Offered Certificates, when used with respect to a
Home Equity Loan Group or Group , shall mean
(A) in the case of Group 1, the Group 1
Certificates and (B) in the case of Group 2, the
related Class of Group 2 Certificates.
“Home Equity Loans”: The Home
Equity Loans together with any Qualified Replacement Mortgages
substituted therefor in accordance with this Agreement, as from
time to time are held as a part of the Trust Estate. Where
applicable, the term “Home Equity Loan” includes
(i) the terms “First Mortgage Loan” and
“Second Mortgage Loan”, and (ii) any Home
Equity Loan which is Delinquent, relates to a foreclosure or
relates to a Property which is REO Property prior to such REO
Property’s disposition by the Trust. Any home equity
loan which, although intended by the parties hereto to have
been, and which purportedly was, transferred and assigned to the
Trust by the Depositor, in fact was not transferred and assigned
to the Trust for any reason whatsoever, including, without
limitation, the incorrectness of the statement set forth in
Section 3.04(b)(1)(x) hereof with respect to such home
equity loan, shall nevertheless be considered a “Home
Equity Loan” for all purposes of this Agreement.
“Indirect Participant”: Any
financial institution for whom any Direct Participant holds an
interest in an Offered Certificate.
“Insurance Policy”: Any hazard,
flood, title or primary mortgage insurance policy relating to a
Home Equity Loan plus any amount remitted under
Section 8.11 hereof.
“Interest Period”: With respect
to each Distribution Date and the Offered Certificates, the
period from and including the preceding Distribution Date (or
the Startup Day in the case of the first Distribution
Date) to and including the day preceding the related
Distribution Date with interest accruing on the basis of the
actual number of days elapsed in the related Interest Period and
a year of 360 days. In the case of each REMIC I
Regular Interest and Each REMIC II Regular Interest and any
Distribution Date, the calendar month preceding the month in
which such Distribution occurs with all interest accruing on the
basis of a 30-day month and a year of 360 days.
“Item 1123 Certification”: The
certification required from each of the Master Servicer, the
Servicer and the Securities Administrator pursuant to
Section 12.05.
“Latest Possible Maturity
Date”: The date determined as of the Cut-Off Date
that is the first Distribution Date following the third
anniversary of the scheduled maturity of the Home Equity Loan
with the latest scheduled maturity.
“LIBOR”: With respect to any
Interest Period for the Offered Certificates, the rate
determined by the Securities Administrator on the related LIBOR
Determination Date on the basis of the offered rate for
one-month U.S. dollar deposits as such rate appears on Reuters
Screen LIBOR01 Page as of 11:00 a.m. (London time) on such
date; provided that if such rate does not appear on Reuters
Screen LIBOR01 Page, the rate for such date will be determined
on the basis of the rates at which one-month U.S. dollar
deposits are offered by the Reference Banks at approximately
11:00 a.m. (London time) on such date to prime banks in the
London interbank market. In such event, the Securities
Administrator will request the principal London office of each
of the Reference Banks to provide a quotation of its
rate. If at least two such quotations are provided, the
rate for that date will be the arithmetic mean of the quotations
(rounded upwards if necessary to the nearest whole multiple of
1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by
the Servicer, at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to
leading European banks.
“LIBOR Determination
Date”: With respect to any Interest Period for the
Offered Certificates, the second London Business Day preceding
the commencement of such Interest Period.
“Liquidated Loan”: A Home
Equity Loan as to which a Final Recovery Determination has been
made.
“Liquidation Proceeds”: With
respect to any Liquidated Loan, all amounts (including the
proceeds of any Insurance Policy) recovered by the Servicer
in connection with such Liquidated Loan, whether through
trustee’s sale, foreclosure sale or otherwise.
“Loan Balance”: With respect to
each Home Equity Loan and as of any date of determination, the
actual outstanding principal balance thereof on the Cut-Off Date
or relevant Replacement Cut-Off Date with respect to a Qualified
Replacement Mortgage less any principal payments relating to
such Home Equity Loan included in previous Monthly Remittance
Amounts, provided, however, that the Loan Balance for any Home
Equity Loan that has become a Liquidated Loan shall be zero as
of the first day of the Remittance Period following the
Remittance Period in which such Home Equity Loan becomes a
Liquidated Loan, and at all times thereafter.
“Loan Purchase Price”: With
respect to any Home Equity Loan purchased from the Trust on or
prior to a Monthly Remittance Date pursuant to
Section 3.04, 3.06(b) or 8.10(b) hereof, an
amount equal to the outstanding principal balance of such Home
Equity Loan as of the date of purchase (assuming that the
Monthly Remittance Amount remitted by the Servicer on such
Monthly Remittance Date has already been remitted), plus all
accrued and unpaid interest on such Home Equity Loan at the
Coupon Rate to but not including the date of such purchase
together with (without duplication) the aggregate amounts
of (i) all unreimbursed Delinquency Advances and Servicing
Advances theretofore made with respect to such Home Equity Loan,
(ii) all Delinquency Advances which the Servicer has
theretofore failed to remit with respect to such Home Equity
Loan, (iii) all reimbursed Delinquency Advances and
Servicing Advances to the extent that reimbursement is not made
from the Mortgagor and (iv) any costs and damages incurred
by the Trust in connection with any violation by the Home Equity
Loan of any predatory or abusive lending law.
“Loan-to-Value Ratio”: As of
any particular date (i) with respect to any First Mortgage
Loan, the percentage obtained by dividing the Appraised Value
into the original principal balance of the Note relating to such
First Mortgage Loan and (ii) with respect to any Second
Mortgage Loan, the percentage obtained by dividing the Appraised
Value as of the date of origination of such Second Mortgage Loan
into an amount equal to the sum of (a) the remaining
principal balance of the Senior Lien relating to such Second
Mortgage Loan as of the date of origination of the related
Second Mortgage Loan and (b) the original principal balance
of the Note relating to such Second Mortgage Loan.
“London Business Day”: Any day
on which dealings in deposits of United States dollars are
transacted in the London interbank market.
“Manufactured Home”: A unit of
manufactured housing, including all accessions thereto, securing
the indebtedness of the Mortgagor under the related Home Equity
Loan treated as real estate under applicable state law.
“Master Mortgage Loan Purchase and Interim
Servicing Agreement”: The master mortgage loan
purchase and interim servicing agreement, dated as of March 15,
2007, by and among Nationstar Mortgage LLC and Fremont
Investment & Loan.
“Master REMIC”: The segregated
group of assets consisting of the REMIC II Regular
Interests (as defined in Section 2.08 hereof) and
constituting a REMIC created hereunder.
“Master Servicer”: Wells Fargo
and any successors in interest who meet the qualifications of
the Master Servicer under this Agreement or any successor
appointed hereunder. The Master Servicer and Securities
Administrator shall at all times be the same Person.
“Master Servicing
Compensation”: The meaning specified in
Section 8A.06.
“Master Servicing Fee”: With
respect to each Home Equity Loan, the amount of the annual fee
paid to the Master Servicer, which shall, for each Remittance
Period, be equal to one-twelfth of the product of (a) the
Master Servicing Fee Rate (without regard to the words
“per annum”) and (b) the Stated Principal
Balance of such Home Equity Loans as of the first day of the
related Remittance Period.
“Master Servicing Fee
Rate”: With respect to each Home Equity Loan, the
rate of 0.0075% per annum.
“Master Servicer Termination
Event”: One or more of the events described in
Section 8A.09.
“Master Servicing Transfer
Costs”: Shall mean all reasonable out-of-pocket costs
and expenses incurred by the Trustee in connection with the
transfer of master servicing from a predecessor master servicer,
including, without limitation, any reasonable costs or expenses
associated with the complete transfer of all servicing data and
master 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 enable the Trustee to master service
the Home Equity Loans properly and effectively.
“Maximum Rate”: With respect to
any Home Equity Loan, means the maximum rate at which interest
may accrue on such Home Equity Loan.
“MERS”: Mortgage Electronic
Registration Systems, Inc., a corporation organized and existing
under the laws of the State of Delaware, or any successor
thereto.
“MERS Loan”: Any Mortgage Loan
where MERS acts as the mortgagee of record of such Home Equity
Loan, solely as nominee for the originator of such Home Equity
Loan and its successors and assigns, at the origination
thereof.
“MIN”: The Mortgage
Identification Number of Home Equity Loans registered with MERS
on the MERS® System.
“Monthly Payment”: With respect
to any Home Equity Loan and any Remittance Period, the payment
of principal, if any, and interest due on the Due Date in such
Remittance Period pursuant to the related Note.
“Monthly Remittance
Amount”: The sum of the Group 1 Monthly
Remittance Amount and the Group 2 Monthly Remittance
Amount.
“Monthly Remittance Date”: The
18 th day of each month, or if the 18 th
day is not a Business Day, the preceding Business Day.
“Moody’s”: Moody’s
Investors Service, Inc. or any successor thereto.
“Mortgage”: The mortgage, deed
of trust or other instrument creating a first or second lien on
an estate in fee simple interest in real property securing a
Note.
“Mortgagor”: Each obligor on a
Note.
“Nationstar
Mortgage”: Nationstar Mortgage LLC, a Delaware
limited liability company.
“Net Coupon Rate”: With respect
to any Home Equity Loan, means a rate per annum equal to the
Coupon Rate of such Home Equity Loan minus the sum of
(i) the rate at which the Servicing Fee accrues (expressed
as a per annum percentage of the aggregate Loan Balance of the
Home Equity Loans) and (ii) the Master Servicing Fee
Rate.
“Net Liquidation Proceeds”: As
to any Liquidated Loan, Liquidation Proceeds net of expenses
incurred by the Servicer (including unreimbursed Servicing
Advances) in connection with the liquidation of such Home
Equity Loan, unreimbursed Delinquency Advances relating to such
Home Equity Loan. In no event shall Net Liquidation
Proceeds with respect to any Liquidated Loan be less than
zero.
“Net Subordination
Deficiency” With respect to any Distribution Date,
the excess, if any, of (1) the Subordination Deficiency for
that Distribution Date over (2) the Excess Interest for
that Distribution Date.
“Net Swap Payment”: In the case
of payments made by the Supplemental Interest Trust, the excess,
if any, of (x) the Fixed Swap Payment over (y) the
Floating Swap Payment. In the case of payments made by the
Swap Provider, the excess, if any, of (x) the Floating Swap
Payment over (y) the Fixed Swap Payment. In each case,
the Net Swap Payment shall not be less than zero.
“Net WAC Cap”: The Group 1
Net Rate Cap, the Group 2 Net WAC Cap or the Subordinate
Net WAC Cap, as applicable.
“Net WAC Cap Carryover”: The
Group 1 Net WAC Cap Carryover, the Group 2 Net WAC Cap
Carryover or the Subordinate Net WAC Cap Carryover, as
applicable.
“Net WAC Cap Carryover Reserve
Fund”: The Net WAC Cap Carryover Reserve Fund
established pursuant to Section 7.02 and maintained as
described in Section 7.04.
“Nonrecoverable Advance”: With
respect to any Home Equity Loan for which a Final Recovery
Determination has been made, means any Delinquency Advance or
Servicing Advance previously made and not reimbursed from
proceeds on the related Home Equity Loan which the Servicer has
determined, in good faith business judgment, as evidenced by an
Officer’s Certificate delivered to the Master Servicer and
the Securities Administrator no later than the Business Day
following such determination, would not be ultimately
recovered.
“Note”: The note or other
evidence of indebtedness evidencing the indebtedness of a
Mortgagor under a Home Equity Loan.
“OC Floor”: An amount equal to
0.50% of the Pool Balance as of the Cut-Off Date.
“Offered Certificate”: Any one
of the Class 1-AV-1, Class 2-AV-1, Class 2-AV-2,
Class 2-AV-3, Class 2-AV-4, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7A, Class M-7B,
Class M-8, Class M-9A and Class M-9B
Certificates.
“Officer’s
Certificate”: A certificate signed by any Authorized
Officer of any Person delivering such certificate and delivered
to the Trustee or Securities Administrator.
“Operative
Documents”: Collectively, this Agreement, the
Certificates and the Custodial Agreement.
“Opinion of Counsel”: A written
opinion of counsel acceptable, in form and substance, to the
Trustee and the Securities Administrator and delivered to the
Trustee, the Securities Administrator and the Rating
Agencies.
“Original Aggregate Loan
Balance”: The sum of the Original Group 1 Loan
Balance and the Original Group 2 Loan Balance.
“Original Group 1 Loan
Balance”: The aggregate Loan Balance of all the Home
Equity Loans in Group 1 as of the Cut-Off Date, which is
$905,773,494.
“Original Group 2 Loan
Balance”: The aggregate Loan Balance of all the Home
Equity Loans in Group 2 as of the Cut-Off Date, which is
$814,049,212.
“Outstanding”: With respect to
all Certificates of a Class, as of any date of determination,
all such Certificates theretofore executed and delivered
hereunder except:
(i)
Certificates
theretofore canceled by the Registrar or delivered to the
Registrar for cancellation;
(ii)
Certificates or
portions thereof for which full and final payment of money in
the necessary amount has been theretofore deposited with the
Securities Administrator or any Paying Agent in trust for the
Owners of such Certificates;
(iii)
Certificates in
exchange for or in lieu of which other Certificates have been
executed and delivered pursuant to this Agreement, unless proof
satisfactory to the Securities Administrator is presented that
any such Certificates are held by a bona fide
purchaser;
(iv)
Certificates
alleged to have been destroyed, lost or stolen for which
replacement Certificates have been issued as provided for in
Section 5.05 hereof; and
(v)
Certificates as to
which the Securities Administrator has made the final
distribution thereon, whether or not such Certificate is ever
returned to the Securities Administrator.
“Overcollateralization
Amount”: With respect to any Distribution Date, the
excess, if any, of (1) the aggregate Loan Balance of the
Home Equity Loans as of the close of business on the last day of
the related Remittance Period over (2) the aggregate
outstanding Certificate Principal Balance of the Offered
Certificates and the Class P Certificates as of that
Distribution Date (after taking into account the payment of the
Principal Distribution Amount on that Distribution Date).
“Owner” or
“Certificateholder”: The Person in whose name a
Certificate is registered in the Register.
“Paying Agent”: Initially, the
Securities Administrator, and thereafter, the Securities
Administrator or any other Person that meets the eligibility
standards for the Paying Agent specified in Section 11.15
hereof and is authorized by the Securities Administrator and the
Depositor to make payments on the Certificates on behalf of the
Securities Administrator.
“Percentage Interest”: With
respect to any Offered Certificates of any Class, a fraction,
expressed as a decimal, the numerator of which is the principal
balance represented by such Offered Certificate as of the
Startup Day and the denominator of which is the Certificate
Principal Balance represented by all the Offered Certificates of
such Class as of the Startup Day. With respect to the
Class X-IO, Class P or Class R Certificates, the
portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate, all of
which shall total 100% with respect to the related Class.
“Person”: Any individual,
corporation, limited partnership, limited liability company,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision thereof.
“Pool Balance”: With respect to
any date, the aggregate of the Loan Balance of all Home Equity
Loans as of such date.
“Prepayment”: Any payment of
principal of a Home Equity Loan which is received by the
Servicer which is not a Scheduled Principal Payment and which is
not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or
months subsequent to the month of prepayment, the portion of
Substitution Amounts representing principal, the portion of the
Loan Purchase Price of any Home Equity Loan purchased from the
Trust pursuant to Section 3.04, 3.06(b) or
8.10(b) hereof representing principal and the proceeds of
any Insurance Policy which are to be applied as a payment of
principal on the related Home Equity Loan shall be deemed to be
Prepayments for all purposes of this Agreement.
“Prepayment Charge”: With
respect to any Prepayment, any prepayment premium, penalty or
charge payable by a Mortgagor in connection with any Prepayment
on a Home Equity Loan pursuant to the terms of the related Note,
as set forth on the Prepayment Charge Schedule.
“Prepayment Charge
Schedule”: As of any date, the list of Home Equity
Loans providing for a Prepayment Charge included in the Trust
Fund on such date, attached hereto as Schedule I-C
(including the prepayment charge summary attached
thereto). The Prepayment Charge Schedule shall set
forth the following information with respect to each Prepayment
Charge:
(i)
the Home Equity Loan identifying number;
(ii)
a code indicating whether the related Home Equity Loan is in
Group 1 or Group 2;
(iii)
a code indicating the type of Prepayment Charge;
(iv)
the date on which the first Monthly Payment was due on the related
Home Equity Loan;
(v)
the term of the related Prepayment Charge;
(vi)
the original Loan Balance of the related Home Equity Loan; and
(vii)
the Loan Balance of the related Home Equity Loan as of the Cut-Off
Date.
“Present Value Maximum Probable
Exposure”: With respect to each Distribution Date, the sum
of each Present Value Probable Cash Flow from, and including,
such Distribution Date to, and including, the termination date
in such derivative confirmation.
“Present Value Probable Cash Flow”:
With respect to each Distribution Date, the product of
(i) the Probable Cash Flow and (ii) the Discount
Factor applicable for such Distribution Date.
“Preservation
Expenses”: Expenditures made by the Servicer in
connection with a foreclosed Home Equity Loan prior to the
liquidation thereof, including, without limitation, expenditures
for real estate property taxes, hazard insurance premiums,
property restoration or preservation.
“Principal and Interest
Account”: The principal and interest account created
by the Servicer pursuant to
Section 8.08(a) hereof. The Principal and
Interest Account shall be an Eligible Account.
“Principal Distribution
Amount”: As to any Distribution Date, the lesser of
(a) the aggregate Certificate Principal Balance of the
Offered Certificates immediately preceding such Distribution
Date and (b) the sum of (i) the Aggregate Principal
Amount for such Distribution Date minus the Excess
Overcollateralization Amount, if any, for such Distribution Date
and (ii) the Subordination Increase Amount, if any, for
such Distribution Date.
“Probable Cash Flow”: With respect
to each Distribution Date, the product of (i) the Scheduled
Notional Amount in the derivative confirmation attached hereto
as Exhibit R for such Distribution Date, divided by 12, and
(ii) the excess, if any, of (a) the Projected Forward
Rate over (b) the cap rate, as defined in such derivative
confirmation or the fixed rate, as defined in such derivative
confirmation. The Probable Cash Flow for each Distribution Date
that precedes the Significance Percentage Calculation Date shall
equal zero.
“Projected Forward Rate”: With
respect to each Distribution Date, the product of (i) LIBOR
(expressed as a percentage) for the related Interest Period
made available at Bloomberg Financial Markets, L.P.
("Bloomberg") by typing in the following keystrokes: FWCV
<go>US<go>3<go> and inputting “1”
as Forwards and Intervals, and (ii) the sum of 1 and the
product of (a) a percentage volatility level, linearly
interpolated based on "Mid USD Cap" volatility levels as
obtained from Bloomberg within 15 calendar days of such
Distribution Date by typing the keystrokes: TTCF <go>, 1
<go>, whose maturity date corresponds to the termination
date in such derivative confirmation, (b) a factor of 1.3,
and (c) the square root of the number of days from the
Significance Percentage Calculation Date to the first day of the
Interest Period for each related Distribution Date divided by
360.
“Projected Zero Factor”: With
respect to each Distribution Date, a fraction, the numerator of
which is 1 and the denominator of which is the sum of (i) 1
and (ii) the Projected Forward Rate divided by 12.
“Prohibited Transaction”: The
meaning set forth from time to time in the definition thereof at
Section 860F(a)(2) of the Code (or any successor
statute thereto) and applicable to the Trust.
“Property”: The underlying
property securing a Home Equity Loan.
“Prospectus”: The
Depositor’s Prospectus dated June 26, 2007 constituting
part of the Registration Statement.
“Prospectus Supplement”: The
Home Equity Loan Trust 2007-FRE1 Prospectus Supplement dated
June 28, 2007 to the Prospectus.
“QSPE”: A qualifying special
purpose entity that meets the requirements of FAS 140.
“Qualified Liquidation”: The
meaning set forth from time to time in the definition thereof at
Section 860F(a)(4) of the Code (or any successor
statute thereto) and applicable to the Trust.
“Qualified Mortgage”: The
meaning set forth from time to time in the definition thereof at
Section 860G(a)(3) of the Code (or any successor
statute thereto) and applicable to the Trust.
“Qualified Replacement
Mortgage”: A Home Equity Loan substituted for another
pursuant to Section 3.04, 3.05(b) or
3.06(b) hereof, which (i) has a Coupon Rate at least
equal to the Coupon Rate of the Home Equity Loan being replaced,
(ii) is secured by Property that is of the same or better
property type as, or is a single family dwelling and the same or
better occupancy status as, the Property securing the Home
Equity Loan being replaced or is a primary residence,
(iii) shall mature no later than the latest Final Scheduled
Distribution Date, (iv) has a Loan-to-Value Ratio as of the
Replacement Cut-Off Date no higher than the Loan-to-Value Ratio
of the replaced Home Equity Loan at such time, (v) shall be
of the same or higher credit quality classification (determined
in accordance with the Seller’s credit underwriting
guidelines set forth in the Seller’s underwriting
manual) as the Home Equity Loan which such Qualified
Replacement Mortgage replaces, (vi) shall be a First
Mortgage Loan if the Home Equity Loan which such Qualified
Replacement Mortgage replaces was a First Mortgage Loan and
shall be a First Mortgage Loan or Second Mortgage Loan if the
Home Equity Loan which such Qualified Replacement Mortgage
replaces was a Second Mortgage Loan, (vii) has an
outstanding principal balance as of the related Replacement
Cut-Off Date equal to or less than the outstanding principal
balance of the replaced Home Equity Loan as of such Replacement
Cut-Off Date, (viii) shall not provide for a
“balloon” payment if the related Home Equity Loan
did not provide for a “balloon” payment (and if such
related Home Equity Loan provided for a “balloon”
payment, such Qualified Replacement Mortgage shall have an
original maturity of not less than the original maturity of such
related Home Equity Loan), (ix) shall be a fixed rate Home
Equity Loan if the Home Equity Loan being replaced is a Fixed
Rate Home Equity Loan or an adjustable rate Home Equity Loan if
the Home Equity Loan being replaced is an Adjustable Rate Home
Equity Loan, (x) satisfies the criteria set forth from time
to time in the definition thereof at
Section 860G(a)(4) of the Code (or any successor
statute thereto) and applicable to the Trust,
(xi) satisfies the representations and warranties set forth
in Section 3.04(b)(1) or (b)(2), as applicable,
hereof, (xii) shall not be 30 days or more Delinquent and
(xiii) if such Home Equity Loan being replaced is an
Adjustable Rate Home Equity Loan, shall adjust based on the same
index as, have no lower margin than, have the same interval
between adjustment dates as and have a maximum Coupon Rate no
lower than, and a minimum Coupon Rate no lower than, the Home
Equity Loan being replaced.
“Rating
Agencies”: Collectively, Moody’s and Standard
& Poor’s.
“Realized Loss”: As to any
Liquidated Loan (or, in the case of a Cram Down Loss, a Home
Equity Loan that is not a Liquidated Loan), the amount (not less
than zero), if any, by which (A) the sum of (x) the
Loan Balance thereof as of the date of liquidation, (y) the
amount of accrued but unpaid interest thereon and (z) the
amount of any Cram Down Loss with respect thereto is in excess
of (B) the Net Liquidation Proceeds, if any, realized
thereon.
“Record Date”: With respect to
(i) any Distribution Date and the Class R and
Class P Certificates, the last Business Day of the calendar
month immediately preceding the calendar month in which such
Distribution Date occurs and (ii) any Distribution Date and
each Class of Offered Certificates and the Class X-IO
Certificates, the Business Day immediately preceding such
Distribution Date, or if definitive Offered Certificates have
been issued, the last Business Day of the calendar month
immediately preceding the calendar month in which such
Distribution Date occurs.
“Recoveries”: With respect to
any Liquidated Loan, an amount received in respect of principal
on that Liquidated Loan, which amount has previously been
allocated as an Applied Realized Loss Amount to a Class or
Classes of Subordinate Certificates, net of reimbursable
expenses due and owing to the Servicer or Master Servicer.
“Reference Banks”: Bankers
Trust Company, Barclays Bank PLC, The Bank of Tokyo and National
Westminster Bank PLC, provided that if any of the foregoing
banks are not suitable to serve as a Reference Bank, then any
leading banks selected by Nationstar Mortgage which are engaged
in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of
business in London, (ii) which are not Affiliates of the
Seller, (iii) whose quotations appear on Reuters Screen
LIBOR01 Page on the relevant LIBOR Determination Date and
(iv) which have been designated as such by the Seller.
“Register”: The register
maintained by the Registrar in accordance with
Section 5.04 hereof, in which the names of the Owners
are set forth.
“Registrar”: The Securities
Administrator, acting in its capacity as Registrar appointed
pursuant to Section 5.04 hereof, or any duly appointed and
eligible successor thereto.
“Registration Statement”: The
Registration Statement filed by the Depositor with the
Commission (Registration Number 333-130642), including all
amendments thereto and including the Prospectus and Prospectus
Supplement relating to the Offered Certificates.
“Regulation AB”: Subpart
229.1100 – Asset Backed Securities (Regulation AB), 17
C.F.R. §§229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the
adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7,
2005)) or by the staff of the Commission, or as may be
provided by the Commission or its staff from time to time.
“Relevant Servicing Criteria”: The
Servicing Criteria applicable to the various parties, as set
forth on Exhibit U attached hereto. For clarification
purposes, multiple parties can have responsibility for the same
Relevant Servicing Criteria. With respect to a Servicing
Function Participant engaged by the Master Servicer, the
Servicer, the Securities Administrator, the Trustee or the
Custodian, the term “Relevant Servicing Criteria”
may refer to a portion of the Relevant Servicing Criteria
applicable to such parties.
“REMIC”: A “real estate
mortgage investment conduit” within the meaning of
Section 860D of the Code.
“REMIC I”: The segregated
group of assets consisting of all of the assets of the Trust
Estate other than the Net WAC Cap Carryover Reserve Fund, the
Supplemental Interest Trust, the Swap Agreement and the
REMIC interests issued by REMIC I, REMIC II and
the Master REMIC as defined in Section 2.08 hereof,
and constituting a REMIC created hereunder.
“REMIC II”: The segregated
group of assets consisting of all the interests issued by
REMIC I as defined in Section 2.08 hereof, and
constituting a REMIC created hereunder.
“REMIC II Net WAC
Cap”: For any Distribution Date (and the related
Interest Period) and any Class of Offered
Certificates, the product of (i) the REMIC II Net WAC
(as defined in Section 2.08(f) at footnote
(1)) multiplied by (ii) the quotient of 30 divided by
the actual number of days in the related Interest Period for the
Offered Certificates.
“REMIC Opinion”: As
defined in Section 3.04 hereof.
“REMIC Provisions”: Provisions of the
federal income tax law relating to real estate mortgage
investment conduits, which appear at Section 860A through
860G of subchapter M of chapter 1 of the Code, and related
provisions, and regulations and revenue rulings promulgated
thereunder, as the foregoing may be in effect from time to
time.
“Remittance Period”: With
respect to each Monthly Remittance Date, the calendar month
immediately preceding such Monthly Remittance Date.
“REO Property”: A Property
acquired by the Servicer on behalf of the Trust through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Home Equity Loan.
“Replacement Cut-Off
Date”: With respect to any Qualified Replacement
Mortgage, the opening of business of the first day of the
calendar month in which such Qualified Replacement Mortgage is
conveyed to the Trust.
“Reportable Event”: Has the
meaning set forth in Section 12.03.
“Representation
Letter”: Letters to, or agreements with, the
Depository to effectuate a book-entry system with respect to the
Offered Certificates registered in the Register under the
nominee name of the Depository.
“Required Overcollateralization
Amount”: As to any Distribution Date (1) prior
to the Stepdown Date, the product of (x) 6.45%, and
(y) the Original Aggregate Loan Balance; and (2) on
and after the Stepdown Date, the greater of (i) the lesser
of (x) the product of 6.45% and the Pool Balance as of the
Cut-Off Date, and (y) the product of 12.90% and the Pool
Balance as of the end of the related Remittance Period and
(ii) the OC Floor; provided, however, that on each
Distribution Date during the continuance of a Trigger Event the
Required Overcollateralization Amount will equal the Required
Overcollateralization Amount in effect as of the Distribution
Date immediately preceding the date on which such Trigger Event
first occurred.
“Residential Dwelling”: Any one
of the following: (i) a detached one-family dwelling,
(ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a FNMA eligible condominium project,
or (iv) a detached one-family dwelling in a planned unit
development, none of which is a co-operative, mobile or
manufactured home (other than a manufactured home which is
considered to be real property under the laws of state in which
such property is located).
“Reuters Screen LIBOR01
Page”: means the display page so designated on the
Reuters Monitor Money Rates, or such other page as may replace
that page on that service, or such other service as may be
nominated as the information vendor for the purposes of
displaying comparable rates or prices.
“Sarbanes-Oxley
Certification”: The certification delivered by the
Master Servicer pursuant to Section 12.08.
“Schedule of Home Equity
Loans”: Schedule I-A hereto or Schedule I-B
hereto, as the context may require.
“Scheduled Notional
Amount”: The amount set forth with respect to each
Distribution Date on Schedule I-H hereto.
“Scheduled Principal
Payment”: As of any date of calculation, with respect
to a Home Equity Loan, the then stated scheduled monthly
installment of principal payable thereunder which, if timely
paid, would result in the full amortization of principal over
the term thereof (or, in the case of a “balloon”
Note, the term to the nominal maturity date for amortization
purposes, without regard to the actual maturity date), without
taking into account any Prepayment made on such Home Equity Loan
during the then-current Remittance Period.
“Second Mortgage Loan”: A Home
Equity Loan which constitutes a second priority mortgage lien
with respect to the related Property.
“Securities Act”: The
Securities Act of 1933, as amended.
“Securities
Administrator”: Wells Fargo Bank, N.A., a national
banking association, not in its individual capacity but solely
as Securities Administrator under this Agreement, and any
successor hereunder.
“Seller”: Nationstar Mortgage
LLC, a Delaware limited liability company.
“Senior Certificate”: Any one
of the Class 1-AV-1, Class 2-AV-1, Class 2-AV-2,
Class 2-AV-3 or Class 2-AV-4 Certificates.
“Senior Enhancement
Percentage”: As to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is
the sum of (i) the aggregate Certificate Principal Balance
of the Subordinate Certificates and (ii) the
Overcollateralization Amount (in each case, after taking into
account the distribution of the Principal Distribution Amount on
that Distribution Date) and the denominator of which is the
Pool Balance as of the last day of the related Remittance
Period.
“Senior Lien”: With respect to
any Second Mortgage Loan, the home equity loan relating to the
corresponding Property having a first priority lien.
“Senior Principal Distribution
Amount”: The sum of the Group 1 Senior Principal
Distribution Amount and the Group 2 Senior Principal
Distribution Amount.
“Servicer”: Nationstar Mortgage
LLC, a Delaware limited liability company, and its permitted
successors and assigns.
“Servicer Termination
Event”: As defined in
Section 8.20(a) hereof.
“Servicing Advance”: As defined
in Section 8.09(b) and
Section 8.13(a) hereof.
“Servicing Criteria”: The
criteria set forth in paragraph (d) of Item 1122 of
Regulation AB, as such may be amended from time to time.
“Servicing Fee”: With respect
to any Home Equity Loan Group and a Remittance Period, an
amount retained by the Servicer as compensation for servicing
and administration duties relating to the Home Equity Loans in
such Home Equity Loan Group pursuant to Section 8.15
hereof and equal to one month’s interest at 0.500% per
annum of the then aggregate outstanding Loan Balance of such
Home Equity Loans as of the first day of each Remittance Period
payable on a monthly basis; provided, however, that if a
successor Servicer is appointed pursuant to Section 8.20
hereof, the Servicing Fee shall be the amount as agreed upon by
the Trustee and the successor Servicer, and the per annum rate
at which the Servicing Fee is calculated shall not exceed 0.500%
per annum.
“Servicing Function Participant”:
Any Sub-Servicer, Subcontractor or any other Person, other than
each Servicer, the Master Servicer, the Trustee, the Securities
Administrator and each Custodian, that is performing material
activities addressed by the Servicing Criteria.
“Significance Percentage”: The
percentage equivalent of a fraction, the numerator of which is
the highest of each Present Value Maximum Probable Exposure and
the denominator of which is the aggregate Certificate Principal
Balance of the Offered Certificates (other than the
Class M-7B, Class M-8 and Class M-9B
Certificates) (after giving effect to all distributions on
such Distribution Date in such derivative confirmation).
“Significance Percentage Calculation
Date”: Shall mean no later than the respective
Distribution Date.
“60-Day Delinquent Loan”: With
respect to any Remittance Period, and without duplication,
(i) all REO Properties as of the last day of such
Remittance Period, (ii) each Home Equity Loan with respect
to which any portion of a Monthly Payment is, as of the last day
of such Remittance Period 60 or more days Delinquent (without
giving effect to any grace period), (iii) each Home Equity
Loan in foreclosure as of the last day of such Remittance Period
and (iv) each Home Equity Loan described in
clause (ii) that is also in bankruptcy.
“60+ Delinquency Percentage (Rolling Three
Month)”: With respect to any Distribution Date, the
average of the percentage equivalents of the fractions
determined for each of the three immediately preceding
Remittance Periods (or such fewer number of Remittance Periods
since the Cut-Off Date, in the case of the first two
Distribution Dates) the numerator of each of which is equal
to the sum of (without duplication) the aggregate Loan
Balance of 60-Day Delinquent Loans for such Remittance Period,
and the denominator of which is the Loan Balance of all of the
Home Equity Loans as of the end of such Remittance Period.
“Standard &
Poor’s”: Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc. or any
successor thereto.
“Startup Day”: July 10,
2007.
“Stepdown Date”: The earlier to
occur of (1) the Distribution Date immediately following
the Distribution Date on which the aggregate Certificate
Principal Balance of the Senior Certificates is reduced to zero,
and (2) the later to occur of (A) the Distribution
Date in July 2010, and (B) the first Distribution Date on
which the Senior Enhancement Percentage, calculated for this
purpose, before giving effect to any distribution of principal
on the Offered Certificates on that Distribution Date but after
giving effect to the distribution of the Aggregate Principal
Amount on the Home Equity Loans, is at least equal to
52.90%.
“Subcontractor”: Any vendor,
subcontractor or other Person that is not responsible for the
overall servicing (as “servicing” is commonly
understood by participants in the mortgage-backed securities
market) of Home Equity Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation
AB with respect to Home Equity Loans under the direction or
authority of the Servicer, the Master Servicer, the Securities
Administrator or a Subservicer or the Trustee, as the case may
be.
“Subordinate Certificates”: Any
of the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7A,
Class M-7B, Class M-8, Class M-9A or
Class M-9B Certificates.
“Subordinate Net WAC Cap”: With
respect to any Distribution Date and for each Class of
Subordinate Certificates, the per annum rate equal to the
weighted average of (i) the Group 1 Net WAC Cap and
(ii) the Group 2 Net WAC Cap, weighted on the basis of
the related Group Subordinate Amount for such Distribution
Date.
“Subordinate Net WAC Cap
Carryover”: With respect to any Distribution Date,
and for any Class of Subordinate Certificates, the sum of
(A) the excess of (1) the amount of interest that such
Class of Subordinate Certificates, as applicable, would
otherwise be entitled to receive on the Distribution Date had
the Certificate Rate for such Class been calculated at the
Certificate Rate for such Class and Distribution Date
without regard to the Subordinate Net WAC Cap over (2) the
amount of interest payable on such Class at the respective
Certificate Rate for such Class for the Distribution Date
and (B) the excess described in clause (A) for
such Class for all previous Distribution Dates (including
any interest accrued on that amount at the related Certificate
Rate without regard to the Subordinate Net WAC Cap) not
previously paid to such Class.
“Subordination
Deficiency”: As to any Distribution Date, the excess,
if any, of (1) the Required Overcollateralization Amount
for such Distribution Date over (2) the
Overcollateralization Amount for such Distribution Date after
giving effect to the distribution of the Aggregate Principal
Amount on such Distribution Date.
“Subordination Increase
Amount”: As to any Distribution Date, the lesser of
(1) the Subordination Deficiency and (2) the Excess
Interest.
“Sub-Servicer”: Any Person with
whom the Servicer has entered into a Sub-Servicing Agreement and
who satisfies any requirements set forth in Section 8.03
hereof in respect of the qualification of a
Sub-Servicer.
“Sub-Servicing Agreement”: The
written contract between the Servicer and any Sub-Servicer
relating to servicing and/or administration of certain Home
Equity Loans as permitted by Section 8.03.
“Substitution Amount”: With
respect to the substitution of any Qualified Replacement
Mortgage for any Home Equity Loan, as of the related Replacement
Cut-Off Date, an amount equal to the excess, if any, of the
outstanding principal balance of such Home Equity Loan over the
outstanding principal balance of the Qualified Replacement
Mortgage, together with (without duplication) the aggregate
amount of (1) all unreimbursed Delinquency Advances and
unreimbursed Servicing Advances made, (2) all accrued and
unpaid interest, and (3) any costs and damages incurred by
the Trust in connection with any violation of any predatory or
abusive lending law, with respect to such Home Equity Loan.
“Supplemental Interest
Trust”: The trust established pursuant to
Section 2.10.
“Supplemental Interest
Trustee”: Wells Fargo Bank, N.A., a national banking
association, not in its individual capacity but solely as
Supplemental Interest Trustee under this Agreement, and any
successor hereunder.
“Swap Account”: The segregated
swap account established in accordance with
Section 7.02 hereof and maintained in accordance with
Section 7.12 hereof at the applicable Corporate Trust
Office of the Securities Administrator entitled “Wells
Fargo Bank, N.A., as Supplemental Interest Trustee on behalf of
the Owners of the Home Equity Loan Trust 2007-FRE1, Home Equity
Loan Asset-Backed Certificates,
Series 2007-FRE1.” The Swap Account shall be an
Eligible Account.
“Swap Agreement”: The Swap
Agreement entered into with the Swap Provider and attached
hereto as Exhibit R.
“Swap Default”: An event of
default under the Swap Agreement.
“Swap Early Termination”: The
occurrence of an Early Termination Date (as defined in the Swap
Agreement) under the Swap Agreement.
“Swap LIBOR”: For any
Distribution Date (and the related Interest Period) a per
annum rate equal to the product of (i) the interest rate
used to compute the Floating Swap Payment for such Distribution
Date multiplied by (ii) the quotient of the actual number
of days in the related Interest Period divided by 30, multiplied
by (iii) 2.
“Swap Provider”: The Royal Bank
of Scotland plc and any successor thereto.
“Swap Provider Trigger
Event”: A Swap Termination Payment that is triggered
upon: (i) an event of default under the Swap Agreement
with respect to which the Swap Provider is the Defaulting Party
(as defined in the Swap Agreement), (ii) a Termination
Event under the Swap Agreement with respect to which the Swap
Provider is the sole Affected Party (as defined in the Swap
Agreement) or (iii) an “Additional Termination
Event” (as defined in the Swap Agreement) under the
Swap Agreement with respect to which the Swap Provider is the
sole Affected Party.
“Swap Termination Payment”: The
amount, if any, owed by the Supplemental Interest Trust or the
Swap Provider upon a Swap Early Termination.
“Swap Expense Fee Rate”: With
respect to each Distribution Date, a per annum rate, equal to
the product of (x) the sum of (i) any Net Swap Payment
owed to the Swap Provider for that Distribution Date and
(ii) any Swap Termination Payment for that Distribution
Date (other than any Swap Termination Payment resulting from a
Swap Provider Trigger Event) payable by the Supplemental
Interest Trust, and (y) 12 divided by the aggregate Loan
Balance of the Home Equity Loans as of the first day of the
related Remittance Period.
“Tangible Net Worth”: Shall
mean the difference between: (A) the tangible assets
of the Seller or Servicer, as applicable, and its Affiliates
calculated in
accordance with generally accepted accounting principles, as
reduced by adequate reserves in each case where a reserve is
appropriate; and (B) all indebtedness, including
subordinated debt, of the Seller or Servicer, as applicable, and
its Affiliates; provided, however, that (i) intangible
assets such as patents, trademarks, trade names, copyrights,
licenses, good will, organization costs, advances or loans to,
or receivables from, directors, officers, employees or
affiliates, prepaid assets, amounts relating to covenants not to
compete, pension assets, deferred charges or treasury stock of
any securities unless the same are readily marketable in the
United States of America or are entitled to be used as a credit
against federal income tax liabilities, shall not be included in
the calculation of (A) above, (ii) securities included
as tangible assets shall be valued at their current market price
or cost, whichever is lower and (iii) any write-up in book
value of any assets shall not be taken into account.
“Tax Matters Person”: The
Person designated pursuant to Section 11.18 hereof to act
as the Tax Matters Person under the Code (or where the context
requires, the Securities Administrator acting as agent for the
Tax Matters Person).
“Tax Service Contract”: A
transferable contract maintained for the Property with a tax
service provider for the purpose of obtaining current
information from local taxing authorities relating to such
Property.
“Termination Event”: Under the
Swap Agreement, the following standard events under the ISDA
Master Agreement:
·
“Illegality” (which generally
relates to changes in law causing it to become unlawful for
either party to perform its obligations under the Swap
Agreement),
·
“Tax
Event” (which generally relates to either party to the
Swap Agreement receiving a payment under the Swap Agreement from
which an amount has been deducted or withheld for or on account
of taxes) and
·
“Tax Event
Upon Merger” (solely with respect to the Swap Provider as
merging party) (which generally relates to the Swap
Provider’s receiving a payment under the Swap Agreement
from which an amount has been deducted or withheld for or on
account of taxes resulting from a merger),
as described in Sections 5(b)(i),
5(b)(ii) and 5(b)(iii) of the ISDA Master
Agreement. In addition, there are “Additional
Termination Events” (as defined in the Swap
Agreement) including if this Agreement or other transaction
documents are amended or modified without the prior written
consent of the Swap Provider where written consent is required
or if, pursuant to the terms of Section 9.02 of this
Agreement, the Servicer exercises its option to purchase the
Home Equity Loans. With respect to the Swap Provider, an
Additional Termination Event will occur if the Swap Provider
fails to comply with the Downgrade Provisions or if the Swap
Provider fails to comply with certain obligations with respect
to Regulation AB, as described in the Swap Agreement.
“Termination Price”: Means,
with respect to Sections 9.02 and 9.03 hereof, and on any date
of determination thereof, an amount equal to the greater of
(A) the sum of (x) the aggregate outstanding Loan
Balance of the Home Equity Loans (other than those described in
clause (y) below), including accrued interest thereon,
as of such date and (y) in the case of any REO Property and
Home Equity Loans with respect to which foreclosure proceedings
have been initiated or are otherwise 120 days or more Delinquent
as of such date, the fair market value of such REO Property and
Home Equity Loans (disregarding accrued interest
thereon) and (B) the sum of (w) the aggregate
outstanding Certificate Principal Balance of the Offered
Certificates (other than any Class Principal Carryover
Shortfalls), (x) all accrued and unpaid interest on the
Offered Certificates (other than any Group 1 Net WAC Cap
Carryover, Group 2 Net WAC Cap Carryover and Subordinate
Net WAC Cap Carryover) , (y) the sum of the aggregate
amount of any unreimbursed Delinquency Advances, unreimbursed
Servicing Advances, unreimbursed Delinquency Advances which the
Servicer has theretofore failed to remit and (z) any Net
Swap Payments or Swap Termination Payments payable to any swap
provider then remaining unpaid or which are due to the exercise
of such option.
“Transaction Documents”: This
Agreement, the Swap Agreement and any other document or
agreement entered into in connection with the Trust Estate, the
Certificates or the Home Equity Loans.
“Transition Expenses”: Shall
mean all reasonable out-of-pocket costs and expenses incurred by
the Master Servicer in connection with the transfer of servicing
upon the termination of the Servicer for a Servicer Termination
Event including, without limitation, any reasonable 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 Master Servicer to
correct any errors or insufficiencies in the servicing data or
otherwise enable the Master Servicer to service the Home Equity
Loans properly and effectively.
“Trigger Event”: The existence
of a Delinquency Event or Cumulative Loss Trigger Event.
“Trust”: Home Equity Loan Trust
2007-FRE1, the trust created under this Agreement which shall be
comprised of two subtrusts: (i) one for Group 1
and any Trust assets allocable to such Group 1 and
(ii) one for Group 2 and any Trust assets allocable to
such Group 2.
“Trust Estate”: (a) The
Home Equity Loan Assets, (b) such amounts as may be held by
the Securities Administrator in the Certificate Account together
with investment earnings on such amounts, (c) such amounts
as may be held by the Securities Administrator in the Net WAC
Cap Carryover Reserve Fund together with investment earnings on
such amounts, (d) any amounts received by the Supplemental
Interest Trustee on the Swap Agreement and such amounts as may
be held by the Supplemental Interest Trustee in the Swap
Account, excluding any investment earnings on such amounts,
(e) such amounts as may be held in the name of the
Securities Administrator in the Principal and Interest Account,
if any, inclusive of investment earnings thereon, whether in the
form of cash, instruments, securities or other properties
(including any Eligible Investments held by the
Servicer) and (f) the Prepayment Charges.
“Trustee”: The Bank of New
York, a New York banking corporation, not in its individual
capacity but solely as Trustee under this Agreement, and any
successor hereunder.
“Trustee Fee”: The fee payable
to the Trustee by the Master Servicer as set forth in a separate
agreement.
“Trustee Reimbursable
Expenses”: As of any Distribution Date, the sum of
any amounts owed to the Trustee pursuant to Sections 2.05, 6.12,
7.06, 8A.13, 10.07 and 10.13 hereof (including all attorney fees
and expenses).
“Underwriters”: Greenwich
Capital Markets, Inc, Banc of America Securities LLC,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner
& Smith Incorporated.
“Underwriter’s
Exemption”: Prohibited Transaction Exemption 2007-5,
72 Fed. Reg. 13130 (2007) (or any successor thereto) or any
substantially similar administrative exemption granted by the
U.S. Department of Labor.
“Voting Rights”: The portion of
the voting rights of all of the Certificates which is allocated
to any Certificate. As of any date of determination,
(a) 1% of all Voting Rights shall be allocated to the
Class X-IO Certificates (such Voting Rights to be allocated
among the Owners of Certificates of such Class in
accordance with their respective Percentage Interests),
(b) 1% of all Voting Rights shall be allocated to the
Class P Certificates (such Voting Rights to be allocated
among the Owners of Certificates of such Class in
accordance with their respective Percentage Interests),
(c) 1% of all Voting Rights shall be allocated to the
Class R Certificates in the aggregate, or if separate R-1
and R-3 Interests are issued, 1/2 to each such Class of
Interests (such Voting Rights to be allocated among the Owners
of Certificates of each such Class in accordance with their
respective Percentage Interests), and (d) the remaining
Voting Rights shall be allocated among Owners of the Classes of
Offered Certificates in proportion to the Certificate Principal
Balances of their respective Offered Certificates on such
date.
Section
1.02.
Use of Words and
Phrases.
“Herein,” “hereby,”
“hereunder,” “hereof,”
“hereinbefore,” “hereinafter” and other
equivalent words refer to this Agreement as a whole and not
solely to the particular section of this Agreement in which any
such word is used. The definitions set forth in
Section 1.01 hereof include both the singular and the
plural. Whenever used in this Agreement, any pronoun shall
be deemed to include both singular and plural and to cover all
genders.
Section
1.03.
Captions, Table of
Contents.
The captions or headings in this Agreement and
the Table of Contents are for convenience only and in no way
define, limit or describe the scope and intent of any provisions
of this Agreement.
Section
1.04.
Opinions.
Each opinion with respect to the validity,
binding nature and enforceability of documents or Certificates
may be qualified to the extent that the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally
and by general principles of equity (whether considered in a
proceeding or action in equity or at law) and may state
that no opinion is expressed on the availability of the remedy
of specific enforcement, injunctive relief or any other
equitable remedy. Any opinion required to be furnished by
any Person hereunder must be delivered by counsel upon whose
opinion the addressee of such opinion may reasonably rely, and
such opinion may state that it is given in reasonable reliance
upon an opinion of another, a copy of which must be attached,
concerning the laws of a foreign jurisdiction. Any opinion
delivered hereunder shall be addressed to the Rating Agencies,
the Securities Administrator and the Trustee.
END OF ARTICLE I
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE
TRUST
Section
2.01.
Establishment of
the Trust.
The parties hereto do hereby create and
establish, pursuant to the laws of the State of New York
and this Agreement, the Trust, which, for convenience, shall be
known as “Home Equity Loan Trust 2007-FRE1” and
which shall contain two subtrusts.
Section
2.02.
Office.
The office of the Trust shall be in care of the
Trustee, addressed to The Bank of New York, at its applicable
Corporate Trust Office.
Section
2.03.
Purposes and
Powers.
The purpose of the Trust is to engage in the
following activities and only such activities: (i) the
issuance of the Certificates and the acquiring, owning and
holding of Home Equity Loans and the Trust Estate (including the
Swap Agreement) in connection therewith;
(ii) activities that are necessary, suitable or convenient
to accomplish the foregoing or are incidental thereto or
connected therewith, including the investment of moneys in
accordance with this Agreement; and (iii) such other
activities as may be required in connection with conservation of
the Trust Estate and distributions to the Owners in accordance
with the provisions of this Agreement; provided, however, that
nothing contained herein shall permit the Trustee or the
Securities Administrator to take any action which would
adversely affect the status of any REMIC created
hereunder.
Section
2.04.
Appointment of the
Trustee; Declaration of Trust.
The Depositor hereby appoints the Trustee as
trustee of the Trust effective as of the Startup Day, to have
all the rights, powers and duties set forth herein. The
Trustee hereby acknowledges and accepts such appointment,
represents and warrants its eligibility as of the Startup Day to
serve as Trustee pursuant to Section 10.08 hereof and
declares that it will hold the Trust Estate in trust upon and
subject to the conditions set forth herein for the benefit of
the Owners.
Section
2.05.
Expenses of the
Trust.
All expenses of the Trust, including
(i) the fees and reimbursable expenses of the
Trustee and the Securities Administrator in connection with
the performance of its duties hereunder and (ii) to the
extent not set forth herein, any other expenses of the Trustee
and the Securities Administrator that have been reviewed and
approved by the Seller (such approval not to be unreasonably
withheld), which review shall not be required in connection with
the enforcement of a remedy by the Trustee resulting from a
default under this Agreement, shall be paid pursuant to
Section 7.03(b).
Section
2.06.
Ownership of the
Trust.
On the Startup Day the ownership interests in
the Trust shall be transferred as set forth in Section 4.02
hereof, such transfer to be evidenced by sale of the
Certificates as described therein. Thereafter, transfer of
any ownership interest shall be governed by Sections 5.04 and
5.08 hereof.
Section
2.07.
Situs of the
Trust.
It is the intention of the parties hereto that
the Trust constitute a trust under the laws of the State of New
York. The Trust will be created in the State of New
York. The Trust’s only office will be at the office
of the Trustee as set forth in Section 2.02 hereof.
Section 2.08.
Designation of Interests in REMICs.
(a)
As provided herein,
the Securities Administrator shall elect that the Trust Estate
(exclusive of the assets held in the Net WAC Cap Carryover
Reserve Fund, the Supplemental Interest Trust, and the Swap
Account and the Swap Agreement) be treated for federal
income tax purposes as comprising three real estate mortgage
investment conduits (each a “REMIC” or, in the
alternative, “REMIC I,”
“REMIC II” and the “Master
REMIC”). Each Certificate, other than the
Class R Certificates, represents ownership of a regular
interest in the Master REMIC for purposes of the
REMIC Provisions. Each Certificate, other than the
Class X-IO, Class R and Class P Certificates,
also represents rights with respect to payments in respect of
Net WAC Cap Carryovers from the Net WAC Cap Carryover Reserve
Fund, as further described in Section 7.04 of this
Agreement. Moreover, each Certificate other than the
Class X-IO, Class R .Class P, Class M-7B,
Class M-8, and Class M-9B Certificates represent the
right to receive payments in respect of Net WAC Cap Carryovers
from the Swap Account, as further described in Section 7.12
of this Agreement. The Class X-IO Certificates also
evidence ownership of the assets held from time to time in the
Net WAC Cap Carryover Reserve Fund, as further described in
Section 7.04(b) hereof, and those held from time to
time in the Swap Account, as further described in
Section 7.12(d) hereof. The Class R
Certificate represents ownership of the sole class of residual
interest in each REMIC for purposes of the
REMIC Provisions.
(b)
The Master
REMIC shall hold as its assets the several classes of
uncertificated REMIC II Interests, other than the R-2
Interest, and each such REMIC II Interest (other than the
R-2 Interest) is hereby designated as a regular interest in
REMIC II for purposes of the
REMIC Provisions. REMIC II shall hold as its
assets the several classes of uncertificated REMIC I
Interests, other than the R-1 Interest, and each such
REMIC I Interest (other than the R-1 Interest) is
hereby designated as a regular interest in REMIC I for
purposes of the REMIC Provisions. REMIC I shall
hold as its assets the Home Equity Loans and all collections and
accounts related thereto, other than the assets held in the Net
WAC Cap Carryover Reserve Fund, the Supplemental Interest
Trust, and the Swap Account and the Swap
Agreement.
(c)
For purposes of the
REMIC Provisions, the latest possible maturity date for
each regular interest in each REMIC created hereby is the
Latest Possible Maturity Date.
(d)
[Reserved].
(e)
REMIC I. The following table sets
forth (or describes) the class designation, interest rate,
and initial principal balance for each REMIC I Interest
(each such Interest other than the R-1 Interest, a
“REMIC I Regular Interest”):
REMIC I:
The following table sets forth the designations,
principal balances, and interest rates for each interest in
REMIC I, each of which (other than the R-1
interest) is hereby designated as a regular interest in
REMIC I (the “REMIC I Regular
Interests”):
|
|
|
|
REMIC Interest
|
Initial Principal Balance of
REMIC Interest
|
Interest Rate
|
|
T1-A
|
$ 148,102,705.91
|
(1)
|
|
T1-F1
|
$ 13,456,986.50
|
(2)
|
|
T1-V1
|
$ 13,456,986.50
|
(3)
|
|
T1-F2
|
$ 15,676,680.00
|
(2)
|
|
T1-V2
|
$ 15,676,680.00
|
(3)
|
|
T1-F3
|
$ 17,851,027.00
|
(2)
|
|
T1-V3
|
$ 17,851,027.00
|
(3)
|
|
T1-F4
|
$ 19,947,829.00
|
(2)
|
|
T1-V4
|
$ 19,947,829.00
|
(3)
|
|
T1-F5
|
$ 21,921,574.50
|
(2)
|
|
T1-V5
|
$ 21,921,574.50
|
(3)
|
|
T1-F6
|
$ 23,643,783.50
|
(2)
|
|
T1-V6
|
$ 23,643,783.50
|
(3)
|
|
T1-F7
|
$ 24,906,887.50
|
(2)
|
|
T1-V7
|
$ 24,906,887.50
|
(3)
|
|
T1-F8
|
$ 25,406,527.50
|
(2)
|
|
T1-V8
|
$ 25,406,527.50
|
(3)
|
|
T1-F9
|
$ 24,814,604.50
|
(2)
|
|
T1-V9
|
$ 24,814,604.50
|
(3)
|
|
T1-F10
|
$ 23,917,490.00
|
(2)
|
|
T1-V10
|
$ 23,917,490.00
|
(3)
|
|
T1-F11
|
$ 23,055,397.50
|
(2)
|
|
T1-V11
|
$ 23,055,397.50
|
(3)
|
|
T1-F12
|
$ 22,224,538.50
|
(2)
|
|
T1-V12
|
$ 22,224,538.50
|
(3)
|
|
T1-F13
|
$ 21,425,161.00
|
(2)
|
|
T1-V13
|
$ 21,425,161.00
|
(3)
|
|
T1-F14
|
$ 20,747,239.50
|
(2)
|
|
T1-V14
|
$ 20,747,239.50
|
(3)
|
|
T1-F15
|
$ 20,270,401.00
|
(2)
|
|
T1-V15
|
$ 20,270,401.00
|
(3)
|
|
T1-F16
|
$ 20,523,252.50
|
(2)
|
|
T1-V16
|
$ 20,523,252.50
|
(3)
|
|
T1-F17
|
$ 26,095,292.50
|
(2)
|
|
T1-V17
|
$ 26,095,292.50
|
(3)
|
|
T1-F18
|
$ 42,290,959.00
|
(2)
|
|
T1-V18
|
$ 42,290,959.00
|
(3)
|
|
T1-F19
|
$ 47,190,009.00
|
(2)
|
|
T1-V19
|
$ 47,190,009.00
|
(3)
|
|
T1-F20
|
$ 41,342,478.50
|
(2)
|
|
T1-V20
|
$ 41,342,478.50
|
(3)
|
|
T1-F21
|
$ 30,774,425.00
|
(2)
|
|
T1-V21
|
$ 30,774,425.00
|
(3)
|
|
T1-F22
|
$ 21,123,200.00
|
(2)
|
|
T1-V22
|
$ 21,123,200.00
|
(3)
|
|
T1-F23
|
$ 20,651,146.00
|
(2)
|
|
T1-V23
|
$ 20,651,146.00
|
(3)
|
|
T1-F24
|
$ 26,695,583.50
|
(2)
|
|
T1-V24
|
$ 26,695,583.50
|
(3)
|
|
T1-F25
|
$ 28,156,327.00
|
(2)
|
|
T1-V25
|
$ 28,156,327.00
|
(3)
|
|
T1-F26
|
$ 32,005,479.00
|
(2)
|
|
T1-V26
|
$ 32,005,479.00
|
(3)
|
|
T1-F27
|
$ 16,526,395.50
|
(2)
|
|
T1-V27
|
$ 16,526,395.50
|
(3)
|
|
T1-F28
|
$ 5,596,638.50
|
(2)
|
|
T1-V28
|
$ 5,596,638.50
|
(3)
|
|
T1-F29
|
$ 6,260,580.50
|
(2)
|
|
T1-V29
|
$ 6,260,580.50
|
(3)
|
|
T1-F30
|
$ 7,108,584.50
|
(2)
|
|
T1-V30
|
$ 7,108,584.50
|
(3)
|
|
T1-F31
|
$ 8,160,157.00
|
(2)
|
|
T1-V31
|
$ 8,160,157.00
|
(3)
|
|
T1-F32
|
$ 10,192,266.50
|
(2)
|
|
T1-V32
|
$ 10,192,266.50
|
(3)
|
|
T1-F33
|
$ 5,860,368.50
|
(2)
|
|
T1-V33
|
$ 5,860,368.50
|
(3)
|
|
T1-F34
|
$ 2,730,219.00
|
(2)
|
|
T1-V34
|
$ 2,730,219.00
|
(3)
|
|
T1-F35
|
$ 2,613,853.00
|
(2)
|
|
T1-V35
|
$ 2,613,853.00
|
(3)
|
|
T1-F36
|
$ 2,509,224.50
|
(2)
|
|
T1-V36
|
$ 2,509,224.50
|
(3)
|
|
T1-F37
|
$ 2,411,884.50
|
(2)
|
|
T1-V37
|
$ 2,411,884.50
|
(3)
|
|
T1-F38
|
$ 2,318,116.00
|
(2)
|
|
T1-V38
|
$ 2,318,116.00
|
(3)
|
|
T1-F39
|
$ 2,228,000.50
|
(2)
|
|
T1-V39
|
$ 2,228,000.50
|
(3)
|
|
T1-F40
|
$ 2,141,490.00
|
(2)
|
|
T1-V40
|
$ 2,141,490.00
|
(3)
|
|
T1-F41
|
$ 2,058,319.00
|
(2)
|
|
T1-V41
|
$ 2,058,319.00
|
(3)
|
|
T1-F42
|
$ 1,978,504.00
|
(2)
|
|
T1-V42
|
$ 1,978,504.00
|
(3)
|
|
T1-F43
|
$ 1,901,619.50
|
(2)
|
|
T1-V43
|
$ 1,901,619.50
|
(3)
|
|
T1-F44
|
$ 1,827,248.50
|
(2)
|
|
T1-V44
|
$ 1,827,248.50
|
(3)
|
|
T1-F45
|
$ 1,754,919.50
|
(2)
|
|
T1-V45
|
$ 1,754,919.50
|
(3)
|
|
T1-F46
|
$ 1,686,405.00
|
(2)
|
|
T1-V46
|
$ 1,686,405.00
|
(3)
|
|
T1-F47
|
$ 1,621,103.50
|
(2)
|
|
T1-V47
|
$ 1,621,103.50
|
(3)
|
|
T1-F48
|
$ 1,558,421.00
|
(2)
|
|
T1-V48
|
$ 1,558,421.00
|
(3)
|
|
T1-F49
|
$ 1,498,215.00
|
(2)
|
|
T1-V49
|
$ 1,498,215.00
|
(3)
|
|
T1-F50
|
$ 1,440,368.50
|
(2)
|
|
T1-V50
|
$ 1,440,368.50
|
(3)
|
|
T1-F51
|
$ 1,388,402.50
|
(2)
|
|
T1-V51
|
$ 1,388,402.50
|
(3)
|
|
T1-F52
|
$ 1,350,614.50
|
(2)
|
|
T1-V52
|
$ 1,350,614.50
|
(3)
|
|
T1-F53
|
$ 1,285,136.00
|
(2)
|
|
T1-V53
|
$ 1,285,136.00
|
(3)
|
|
T1-F54
|
$ 1,253,522.50
|
(2)
|
|
T1-V54
|
$ 1,253,522.50
|
(3)
|
|
T1-F55
|
$ 1,257,707.50
|
(2)
|
|
T1-V55
|
$ 1,257,707.50
|
(3)
|
|
T1-F56
|
$ 1,309,717.50
|
(2)
|
|
T1-V56
|
$ 1,309,717.50
|
(3)
|
|
T1-F57
|
$ 1,144,470.00
|
(2)
|
|
T1-V57
|
$ 1,144,470.00
|
(3)
|
|
T1-F58
|
$ 1,032,888.00
|
(2)
|
|
T1-V58
|
$ 1,032,888.00
|
(3)
|
|
T1-F59
|
$ 993,188.00
|
(2)
|
|
T1-V59
|
$ 993,188.00
|
(3)
|
|
T1-F60
|
$ 955,010.00
|
(2)
|
|
T1-V60
|
$ 955,010.00
|
(3)
|
|
T1-F61
|
$ 918,295.00
|
(2)
|
|
T1-V61
|
$ 918,295.00
|
(3)
|
|
T1-F62
|
$ 882,987.00
|
(2)
|
|
T1-V62
|
$ 882,987.00
|
(3)
|
|
T1-F63
|
$ 849,032.50
|
(2)
|
|
T1-V63
|
$ 849,032.50
|
(3)
|
|
T1-F64
|
$ 816,380.00
|
(2)
|
|
T1-V64
|
$ 816,380.00
|
(3)
|
|
T1-F65
|
$ 784,979.00
|
(2)
|
|
T1-V65
|
$ 784,979.00
|
(3)
|
|
T1-F66
|
$ 754,782.00
|
(2)
|
|
T1-V66
|
$ 754,782.00
|
(3)
|
|
T1-F67
|
$ 725,743.50
|
(2)
|
|
T1-V67
|
$ 725,743.50
|
(3)
|
|
TI-F68
|
$ 697,818.00
|
(2)
|
|
TI-V68
|
$ 697,818.00
|
(3)
|
|
TI-F69
|
$ 670,964.50
|
(2)
|
|
TI-V69
|
$ 670,964.50
|
(3)
|
|
TI-F70
|
$ 645,139.50
|
(2)
|
|
TI-V70
|
$ 645,139.50
|
(3)
|
|
TI-F71
|
$ 620,307.00
|
(2)
|
|
TI-V71
|
$ 620,307.00
|
(3)
|
|
TI-F72
|
$ 15,425,734.00
|
(2)
|
|
TI-V72
|
$ 15,425,734.00
|
(3)
|
|
R-1
|
(4)
|
(4)
|
(1)
The interest rate with respect to any Distribution
Date (and the related Interest Period) for the T1-A Interest
is a per annum rate equal to the weighted average of the Net Coupon
Rates of all the Home Equity Loans as of the first day of the
related Remittance Period, weighted on their outstanding loan
balances of such day and adjusted to take into account any
prepayments occurring after such day that were distributed in the
prior calendar month (the “REMIC Net WAC
Rate”).
(2)
The interest rate with respect to any Distribution Date (and the
related Interest Period) for each of these interests is a per
annum rate equal to the lesser of (i) 10.8%, and (ii) the
product of (a) the REMIC Net WAC Rate and (b) 2.
(3)
For any Distribution Date (and the related Interest
Period) the interest rate for each of these Lower Tier
Interests shall be the excess, if any, of (i) the product of
(a) the REMIC Net WAC Rate and (b) 2, over (ii) 10.8
%.
(4)
The R-I interest shall not have a principal balance and shall not
bear interest. The R-I interest is hereby designated as the
sole class of residual interest in REMIC I.
(i)
On each Distribution Date, all Realized Losses
and all payments of principal shall be allocated in the
following order of priority:
(i)
First, to the T1-A Interest until the
outstanding principal balance of such interest is reduced to
zero; and
(ii)
Second, to the remaining REMIC I Regular
Interests sequentially in ascending numerical order, and with
respect to each pair of REMIC I Regular Interests having
the same numerical designation, pro rata between the two
REMIC I Regular Interests, until the principal balance of
each such REMIC I Regular Interest is reduced to zero.
(ii)
On each Distribution Date, all Prepayment
Charges shall be allocated to the Class T1-V72
Interest.
(f)
REMIC II:
The following table sets forth the designations,
principal balances, and interest rates for each interest in
REMIC II, each of which (other than the R-2
interest) is hereby designated as a regular interest in
REMIC II (the “REMIC II Regular
Interests”):
|
|
|
|
|
REMIC Interest
|
Initial Principal Balance of
REMIC Interest
|
Interest Rate
|
Corresponding Class
of REMIC III Interest
|
|
T2-1-AV-1
|
$ 333,098,500.00
|
(1)
|
1-AV-1
|
|
T2-2-AV-1
|
$ 198,065,000.00
|
(1)
|
2-AV-1
|
|
T2-2-AV-2
|
$ 22,728,000.00
|
(1)
|
2-AV-2
|
|
T2-2-AV-3
|
$ 51,107,500.00
|
(1)
|
2-AV-3
|
|
T2-2-AV-4
|
$ 25,966,000.00
|
(1)
|
2-AV-4
|
|
T2-M1
|
$ 33,966,500.00
|
(1)
|
M-1
|
|
T2-M2
|
$ 30,957,000.00
|
(1)
|
M-2
|
|
T2-M3
|
$ 18,693,000.00
|
(1)
|
M-3
|
|
T2-M4
|
$ 17,198,000.00
|
(1)
|
M-4
|
|
T2-M5
|
$ 16,338,500.00
|
(1)
|
M-5
|
|
T2-M6
|
$ 14,618,500.00
|
(1)
|
M-6
|
|
T2-M7A
|
$ 2,500,000.00
|
(1)
|
M-7A
|
|
T2-M7B
|
$ 11,258,500.00
|
(1)
|
M-7B
|
|
T2-M8
|
$ 12,898,500.00
|
(1)
|
M-8
|
|
T2-M9A
|
$ 6,000,000.00
|
(1)
|
M-9A
|
|
T2-M9B
|
$ 7,328,500.00
|
(1)
|
M-9B
|
|
T2-P
|
$ 50.00
|
0.00%
|
P
|
|
T2-Accrual Interest
|
$ 917,100,655.91
|
(1)
|
N/A
|
|
T2-IO
|
(2)
|
(2)
|
N/A
|
|
R-2
|
(3)
|
(3)
|
N/A
|
(1)
The interest rate for each of these interests (the
“REMIC II Net WAC”) with respect to any
Distribution Date (and the related Interest Period) is a per
annum rate equal to the weighted average of the interest rates on
the REMIC I Regular Interests, provided ,
however , that for any Distribution Date on which the
Class T2-IO Interest is entitled to a portion of the interest
accruals on a REMIC I interest having an “F” in
its class designation, as described in footnote two below, such
weighted average shall be computed by first subjecting the rate on
such REMIC I interest to a cap equal to Swap LIBOR for such
Distribution Date.
(2)
The Class T2-IO is an interest only class that
does not have a principal balance. For only those Distribution
Dates listed in the first column in the table below, the
Class T2-IO shall be entitled to interest accrued on the
REMIC I Regular Interests listed in the second column in the
table below at a per annum rate equal to the excess, if any, of
(i) the interest rate for such REMIC I Regular Interest
for such Distribution Date over (ii) Swap LIBOR for such
Distribution Date.
|
|
|
Distribution
Dates
|
REMIC I
Class Designation
|
|
1
|
Class T1-F1 through
T1-F72
|
|
2
|
Class T1-F2 through
T1-F72
|
|
3
|
Class T1-F3 through
T1-F72
|
|
4
|
Class T1-F4 through
T1-F72
|
|
5
|
Class T1-F5 through
T1-F72
|
|
6
|
Class T1-F6 through
T1-F72
|
|
7
|
Class T1-F7 through
T1-F72
|
|
8
|
Class T1-F8 through
T1-F72
|
|
9
|
Class T1-F9 through
T1-F72
|
|
10
|
Class T1-F10 through
T1-F72
|
|
11
|
Class T1-F11 through
T1-F72
|
|
12
|
Class T1-F12 through
T1-F72
|
|
13
|
Class T1-F13 through
T1-F72
|
|
14
|
Class T1-F14 through
T1-F72
|
|
15
|
Class T1-F15 through
T1-F72
|
|
16
|
Class T1-F16 through
T1-F72
|
|
17
|
Class T1-F17 through
T1-F72
|
|
18
|
Class T1-F18 through
T1-F72
|
|
19
|
Class T1-F19 through
T1-F72
|
|
20
|
Class T1-F20 through
T1-F72
|
|
21
|
Class T1-F21 through
T1-F72
|
|
22
|
Class T1-F22 through
T1-F72
|
|
23
|
Class T1-F23 through
T1-F72
|
|
24
|
Class T1-F24 through
T1-F72
|
|
25
|
Class T1-F25 through
T1-F72
|
|
26
|
Class T1-F26 through
T1-F72
|
|
27
|
Class T1-F27 through
T1-F72
|
|
28
|
Class T1-F28 through
T1-F72
|
|
29
|
Class T1-F29 through
T1-F72
|
|
30
|
Class T1-F30 through
T1-F72
|
|
31
|
Class T1-F31 through
T1-F72
|
|
32
|
Class T1-F32 through
T1-F72
|
|
33
|
Class T1-F33 through
T1-F72
|
|
34
|
Class T1-F34 through
T1-F72
|
|
35
|
Class T1-F35 through
T1-F72
|
|
36
|
Class T1-F36 through
T1-F72
|
|
37
|
Class T1-F38 through
T1-F72
|
|
38
|
Class T1-F37 through
T1-F72
|
|
39
|
Class T1-F39 through
T1-F72
|
|
40
|
Class T1-F40 through
T1-F72
|
|
41
|
Class T1-F41 through
T1-F72
|
|
42
|
Class T1-F42 through
T1-F72
|
|
43
|
Class T1-F43 through
T1-F72
|
|
44
|
Class T1-F44 through
T1-F72
|
|
45
|
Class T1-F45 through
T1-F72
|
|
46
|
Class T1-F46 through
T1-F72
|
|
47
|
Class T1-F47 through
T1-F72
|
|
48
|
Class T1-F48 through
T1-F72
|
|
49
|
Class T1-F49 through
T1-F72
|
|
50
|
Class T1-F50 through
T1-F72
|
|
51
|
Class T1-F51 through
T1-F72
|
|
52
|
Class T1-F52 through
T1-F72
|
|
53
|
Class T1-F53 through
T1-F72
|
|
54
|
Class T1-F54 through
T1-F72
|
|
55
|
Class T1-F55 through
T1-F72
|
|
56
|
Class T1-F56 through
T1-F72
|
|
57
|
Class T1-F57 through
T1-F72
|
|
58
|
Class T1-F58 through
T1-F72
|
|
59
|
Class T1-F59 through
T1-F72
|
|
60
|
Class T1-F60 through
T1-F72
|
|
61
|
Class T1-F61 through
T1-F72
|
|
62
|
Class T1-F62 through
T1-F72
|
|
63
|
Class T1-F63 through
T1-F72
|
|
64
|
Class T1-F64 through
T1-F72
|
|
65
|
Class T1-F65 through
T1-F72
|
|
66
|
Class T1-F66 through
T1-F72
|
|
67
|
Class T1-F67 through
T1-F72
|
|
68
|
Class T1-F68 through
T1-F72
|
|
69
|
Class T1-F69 through
TI-F7272
|
|
70
|
Class TI-F70 through
TI-F7272
|
|
71
|
Class TI-F71 through
TI-F7272
|
|
72
|
Class TI-F72
|
(3)
The R-2 interest shall not have a principal amount
and shall not bear interest. The R-2 interest is hereby
designated as the sole class of residual interest in
REMIC II.
On each Distribution Date, interest shall be
allocated with respect to the REMIC II Regular Interests
based on the above-described interest rates, provided
however , that interest that accrues on the T2-Accrual
Interest shall be deferred to the extent necessary to make the
distributions of principal described below. Any interest so
deferred shall itself bear interest at the interest rate for the
T2-Accrual Interest.
On each Distribution Date the principal
distributed on the REMIC interests (together with an amount
equal to the interest deferred on the T2-Accrual Interest for
such Distribution Date) shall be distributed, and Realized
Losses shall be allocated, among the interests in REMIC II
in the following order of priority:
(i)
First, to each REMIC II Regular Interest
having a Corresponding Class in the Master REMIC until
the outstanding principal amount of each such REMIC II
Regular Interest equals one-half of the outstanding principal
amount of such Corresponding Class for such REMIC II
Regular Interest immediately after such Distribution Date;
and
(ii)
Second, to the T2-Accrual Interest, any
remaining amounts.
On each Distribution Date, all Prepayment
Charges distributed to the T1-V67 interest shall be distributed
to the Class T2-P Interest.
(g)
The Master
REMIC. The Class 1-AV-1, Class 2-AV-1,
Class 2-AV-2, Class 2-AV-3, Class 2-AV-4,
Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7A,
Class M-7B, Class M-8, Class M-9A,
Class M-9B, Class P and Class X-IO Certificates
are hereby designated as “regular interests” with
respect to the Master REMIC (the “Master
REMIC Regular Certificates”) and the R-III
Interest is hereby designated as the single “residual
interest” with respect to the Master
REMIC.
The beneficial ownership interest in the Master
REMIC created hereunder shall be evidenced by the interests
having the following characteristics and terms:
|
|
|
|
|
Class Designation
|
Initial Certificate
Principal Balance
|
Certificate Interest Rate
|
Final Scheduled
Distribution Date
|
|
Class 1-AV-1
|
$ 666,197,000.00
|
(1)
|
April 2037
|
|
Class 2-AV-1
|
$ 396,130,000.00
|
(1)
|
April 2037
|
|
Class 2-AV-2
|
$ 45,456,000.00
|
(1)
|
April 2037
|
|
Class 2-AV-3
|
$ 102,215,000.00
|
(1)
|
April 2037
|
|
Class 2-AV-4
|
$ 51,932,000.00
|
(1)
|
April 2037
|
|
Class M-1
|
$ 67,933,000.00
|
(1)
|
April 2037
|
|
Class M-2
|
$ 61,914,000.00
|
(1)
|
April 2037
|
|
Class M-3
|
$ 37,386,000.00
|
(1)
|
April 2037
|
|
Class M-4
|
$ 34,396,000.00
|
(1)
|
April 2037
|
|
Class M-5
|
$ 32,677,000.00
|
(1)
|
April 2037
|
|
Class M-6
|
$ 29,237,000.00
|
(1)
|
April 2037
|
|
Class M-7A
|
$ 5,000,000.00
|
(1)
|
April 2037
|
|
Class M-7B
|
$ 22,517,000.00
|
(1)
|
April 2037
|
|
Class M-8
|
$ 25,797,000.00
|
(1)
|
April 2037
|
|
Class M-9A
|
$ 12,000,000.00
|
(1)
|
April 2037
|
|
Class M-9B
|
$ 14,657,000.00
|
(1)
|
April 2037
|
|
Class X-IO
|
(2)
|
(2)
|
April 2037
|
|
Class P
|
$ 100.00
|
(3)
|
April 2037
|
|
Class R
|
(4)
|
(4)
|
April 2037
|
(1)
For any Interest Period and for each Class of
Offered Certificates, the applicable Certificate Rate for such
Class of Offered Certificates for such Interest
Period. For purposes of the REMIC Provisions, the
reference to “Group 1 Net WAC Cap,”
“Group II Net WAC Cap,” or “Subordinate Net
WAC Cap,” as applicable, in the definition of Certificate
Rate for any Class of Offered Certificates shall be deemed to
be a reference to the REMIC II Net WAC Cap; therefore, for any
Interest Period for which the Certificate Rate for any
Class of Offered Certificates exceeds the REMIC II Net
WAC Cap, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate for any Class of Offered Certificates is
based on the applicable Net WAC Cap, the amount of interest that
would have accrued on such Class of Certificates if the
REMIC II Net WAC Cap were substituted for the applicable Net
WAC Cap shall be treated as having been paid by the holder of such
Offered Certificate to the Swap Account, all pursuant to and as
further provided in Section 7.13 hereof.
(2)
he Class X-IO Certificate shall have an
initial principal balance equal to the excess of the aggregate
principal balance of the Home Equity Loans as of the Cut-Off Date
over the aggregate of the Certificate Principal Balances of the
Offered Certificates and the Class P Certificates on the
Startup Day. The Class X-IO Certificates shall not accrue
interest on such principal balance. The Class X-IO
Certificates shall also comprise two notional components. For
any Distribution Date, the Class X-IO Certificate shall be
entitled to receive interest on its notional balance at a per annum
rate equal to the excess of (i) the REMIC II Net WAC over
(ii) the product of (a) the weighted average of the
interest rates of the REMIC II Regular Interests (other than
the Class T2-IO Interest) computed for this
purpose by subjecting the interest rate on the
Class T2-Accrual Interest to a cap equal to zero and by
subjecting the interest rate on each remaining REMIC II
Regular Interest to a cap equal to the Certificate Rate on its
Corresponding Class, determined for this purpose by substituting
the REMIC II Net WAC Rate for the applicable Net WAC Cap,
multiplied by (ii) the quotient of the actual number of days
in the Interest Period divided by 30. The second notional
component represents the right to receive all distributions in
respect of the Class T2-IO Interest in
REMIC II.
(3)
The Class P Certificates shall not be entitled
to any payments of interest but shall be entitled to all Prepayment
Charges.
(4)
The Class R Certificates represent ownership
of the R-1, R-2 and R-3 Interests. The Class R
Certificates do not have either a principal balance or an interest
rate.
(h)
The foregoing
REMIC structure is intended to cause all of the cash from
the Home Equity Loans to flow through to the Master
REMIC as cash flow on a REMIC regular interest,
without creating any shortfall—actual or potential (other
than for credit losses) to any REMIC regular
interest. To the extent that the structure is believed to
diverge from such intention the Securities Administrator shall
resolve ambiguities to accomplish such result and shall to the
extent necessary rectify any drafting errors or seek
clarification to the structure without Certificateholder
approval (but with guidance of counsel) to accomplish such
intention. The party discovering such ambiguity shall
promptly notify each of the other parties hereto and the parties
hereto shall attempt to resolve such ambiguity in accordance
with Section 11.14.
Section
2.08.
Miscellaneous
REMIC Provisions.
(a)
The Startup Day is
hereby designated as the “startup day” of each
REMIC created hereunder within the meaning of
Section 860G(a)(9) of the Code.
(b)
The Owner of the
Tax Matters Person Residual Interest in each REMIC created
hereunder is hereby designated as “tax matters
person” as defined in the REMIC Provisions with
respect to the REMIC.
(c)
The Trust and each
REMIC created hereunder shall, for federal income tax
purposes, maintain books on a calendar year basis and report
income on an accrual basis.
(d)
The Securities
Administrator shall cause each REMIC created hereunder to
elect to be treated as a REMIC under Section 860D of
the Code. Any inconsistencies or ambiguities in this
Agreement or in the administration of the Trust shall be
resolved in a manner that preserves the validity of such
election to be treated as a REMIC. The party discovering
such inconsistency or ambiguity shall promptly notify each of
the other parties hereto and the parties hereto shall attempt to
resolve such inconsistency or ambiguity in accordance with
Section 11.14. The Securities Administrator shall report
all expenses of the Trust Estate to each REMIC created
hereunder.
(e)
For all federal tax
law purposes, amounts transferred by the Securities
Administrator to the Owners of the Class R Certificates
shall be treated as distributions by each respective
REMIC created hereunder.
(f)
The Securities
Administrator shall provide to the Internal Revenue Service and
to the person described in Section 860E(e)(3) and
(6) of the Code the information described in Treasury
Regulation Section 1.860D-1(b)(5)(ii), or any successor
regulation thereto with respect to each REMIC created
hereunder. Such information will be provided in the manner
described in Treasury Regulation Section 1.860E-2(a)(5), or
any successor regulation thereto.
Section
2.09.
Supplemental
Interest Trust.
A separate trust is hereby established (the
“Supplemental Interest Trust”), the corpus of which
shall be held by the Supplemental Interest Trustee, in trust,
for the benefit of the holders of the Offered Certificates.
END OF ARTICLE II
ARTICLE III
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF
THE DEPOSITOR, THE MASTER SERVICER THE SERVICER AND THE SELLER;
COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS
Section
3.01.
Representations and
Warranties of the Depositor.
The Depositor hereby represents, warrants and
covenants to the Trustee, the Master Servicer and Securities
Administrator that as of the Startup Day:
(a)
The Depositor is a
limited liability company duly formed and validly existing under
the laws governing its creation and existence, is not in
violation of the laws of any state in which any Property or the
Depositor is located or doing business which violation would
materially and adversely affect the condition (financial or
other) or the operations of the Depositor or its properties
or the ability of the Trust to collect amounts due on any Home
Equity Loan and is in good standing in each jurisdiction in
which the nature of its business or the properties owned or
leased by it make such qualification necessary. The
Depositor has all requisite limited liability company power and
authority to own and operate its properties, to carry out its
business as presently conducted and as proposed to be conducted
and to enter into and discharge its obligations under this
Agreement and the other Operative Documents to which it is a
party.
(b)
The execution and
delivery of this Agreement and the other Operative Documents to
which it is a party by the Depositor and its performance and
compliance with the terms of this Agreement and the other
Operative Documents to which it is a party have been duly
authorized by all necessary limited liability company action on
the part of the Depositor and will not violate the
Depositor’s certificate of formation or amended and
restated limited liability company agreement or constitute a
default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in a
breach of, any material contract, agreement or other instrument
to which the Depositor is a party or by which the Depositor is
bound or violate any statute or any order, rule or
regulation of any court, governmental agency or body or other
tribunal having jurisdiction over the Depositor or any of its
properties.
(c)
This Agreement and
the other Operative Documents to which the Depositor is a party,
assuming due authorization, execution and delivery by the other
parties hereto and thereto, each constitutes a valid, legal and
binding obligation of the Depositor, enforceable against it in
accordance with the terms hereof and thereof, except as the
enforcement hereof and thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and by
general principles of equity (whether considered in a proceeding
or action in equity or at law).
(d)
The Depositor is
not in default with respect to any order or decree of any court
or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default could materially
and adversely affect the condition (financial or other) or
operations of the Depositor or its properties or the
consequences of which could materially and adversely affect its
performance hereunder and under the other Operative Documents to
which the Depositor is a party.
(e)
No litigation,
proceeding or investigation is pending with respect to which the
Depositor has received service of process or, to the best of the
Depositor’s knowledge, threatened against the Depositor
which litigation, proceeding or investigation might have
consequences that would prohibit its entering into this
Agreement or any other Operative Documents to which it is a
party or that would materially and adversely affect the
condition (financial or otherwise) or operations of the
Depositor or its properties or might have consequences that
would materially and adversely affect the validity or
enforceability of the Home Equity Loans or the Depositor’s
performance hereunder and under the other Operative Documents to
which the Depositor is a party.
(f)
The statements
contained in the Registration Statement which describe the
Depositor or matters or activities for which the Depositor is
responsible in accordance with the Operative Documents or which
are attributed to the Depositor therein are true and correct in
all material respects, and the Registration Statement does not
contain any untrue statement of a material fact with respect to
the Depositor or omit to state a material fact required to be
stated therein or necessary in order to make the statements
contained therein with respect to the Depositor not
misleading.
(g)
Immediately prior
to the sale and assignment by the Depositor to the Trustee on
behalf of the Trust of each Home Equity Loan, the Depositor had
good title to each Home Equity Loan (insofar as such title was
conveyed to it by the Seller) subject to no prior lien,
claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any
nature (other than liens which will be simultaneously
released).
(h)
As of the Startup
Day, the Depositor has transferred all right, title and interest
in the Home Equity Loans to the Trustee on behalf of the
Trust.
(i)
The Depositor has
not transferred the Home Equity Loans to the Trustee on behalf
of the Trust with any intent to hinder, delay or defraud any of
its creditors.
(j)
All actions,
approvals, consents, waivers, exemptions, variances, franchises,
orders, permits, authorizations, rights and licenses required to
be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other
than any such actions, approvals, etc. under any state
securities laws, real estate syndication or “Blue
Sky” statutes, as to which the Depositor makes no such
representation or warranty), that are necessary or advisable in
connection with the purchase and sale of the Certificates and
the execution and delivery by the Depositor of the Operative
Documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either
the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof
may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by
this Agreement and the other Operative Documents on the part of
the Depositor and the performance by the Depositor of its
obligations under this Agreement and such of the other Operative
Documents to which it is a party.
Section
3.02.
Representations and
Warranties of the Servicer and Master Servicer.
(1) The Servicer hereby represents,
warrants and covenants to the Depositor, the Trustee, the Master
Servicer, Securities Administrator and the Owners that as of the
Startup Day:
(a)
The Servicer is a
limited liability company duly formed and validly existing under
the laws governing its creation and existence, is in compliance
with the laws of each state in which any Property is located to
the extent necessary to enable it to perform its obligations
hereunder and is in good standing in each jurisdiction in which
the nature of its business or the properties owned or leased by
it make such qualification necessary. The Servicer has all
requisite limited liability company power and authority to own
and operate its properties, to carry out its business as
presently conducted and as proposed to be conducted and to enter
into and discharge its obligations under this Agreement and the
other Operative Documents to which the Servicer is a
party.
(b)
The execution and
delivery of this Agreement and any other Operative Document to
which it is a party by the Servicer and its performance and
compliance with the terms hereof and thereof have been duly
authorized by all necessary limited liability company action on
the part of the Servicer and will not violate the
Servicer’s certificate of formation or limited liability
company agreement or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Servicer is
a party or by which the Servicer is bound or violate any statute
or any order, rule or regulation of any court, governmental
agency or body or other tribunal having jurisdiction over the
Servicer or any of its properties.
(c)
This Agreement and
the other Operative Documents to which the Servicer is a party,
assuming due authorization, execution and delivery by the other
parties hereto and thereto, each constitutes a valid, legal and
binding obligation of the Servicer, enforceable against it in
accordance with the terms hereof and thereof, except as the
enforcement hereof and thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and by
general principles of equity (whether considered in a proceeding
or action in equity or at law).
(d)
The Servicer is not
in default with respect to any order or decree of any court or
any order, regulation or demand of any federal, state, municipal
or governmental agency, which default could materially and
adversely affect the condition (financial or otherwise) or
operations of the Servicer or its properties or the consequences
of which could materially and adversely affect its performance
hereunder or under the other Operative Documents to which the
Servicer is a party.
(e)
No litigation,
proceeding or investigation is pending with respect to which the
Servicer has received service of process or, to the best of the
Servicer’s knowledge, threatened against the Servicer
which litigation, proceeding or investigation might have
consequences that would prohibit its entering into this
Agreement or any other Operative Documents to which it is a
party or that would materially and adversely affect the
condition (financial or otherwise) or operations of the
Servicer or its properties or might have consequences that would
materially and adversely affect the validity or the
enforceability of the Home Equity Loans or the Servicer’s
performance hereunder and under the other Operative Documents to
which the Servicer is a party.
(f)
The statements
contained in the Registration Statement which describe the
Servicer or matters or activities for which the Servicer is
responsible in accordance with the Operative Documents or which
are attributed to the Servicer therein are true and correct in
all material respects, and the Registration Statement does not
contain any untrue statement of a material fact with respect to
the Servicer or omit to state a material fact required to be
stated therein or necessary to make the statements contained
therein with respect to the Servicer not misleading.
(g)
The Servicing Fee
is a “current (normal) servicing fee rate” as
that term is used in Statement of Financial Accounting Standards
No. 65 issued by the Financial Accounting Standards
Board. Neither the Servicer nor any Affiliate thereof will
report on any financial statements any part of the Servicing Fee
as an adjustment to the sales price of the Home Equity
Loans.
(h)
All actions,
approvals, consents, waivers, exemptions, variances, franchises,
orders, permits, authorizations, rights and licenses required to
be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other
than any such actions, approvals, etc. under any state
securities laws, real estate syndication or “Blue
Sky” statutes, as to which the Servicer makes no such
representation or warranty), that are necessary or advisable in
connection with the execution and delivery by the Servicer of
the Operative Documents to which it is a party, have been duly
taken, given or obtained, as the case may be, are in full force
and effect on the date hereof, are not subject to any pending
proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal
therefrom may be taken or review thereof may be obtained has
expired or no review thereof may be obtained or appeal therefrom
taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other
Operative Documents on the part of the Servicer and the
performance by the Servicer of its obligations under this
Agreement and such of the other Operative Documents to which it
is a party.
(i)
The collection
practices used by the Servicer with respect to the Home Equity
Loans have been, in all material respects, legal, proper,
prudent and customary in the home equity mortgage servicing
business.
(j)
The transactions
contemplated by this Agreement are in the ordinary course of
business of the Servicer.
(k)
The Servicer is not
in default under any agreement involving financial obligations
or on any outstanding obligation, in any such case which could
materially adversely impact the financial condition or
operations of the Servicer or adversely impact the
Servicer’s performance of its obligations under the
Operative Documents.
(l)
There are no
Sub-Servicers as of the Startup Day.
It is understood and agreed that the
representations and warranties set forth in this
Section 3.02(1) shall survive delivery of the Home
Equity Loans to the Trustee or the Custodian on its
behalf.
Upon discovery by any of the Depositor, the
Seller, the Master Servicer, the Servicer, the Securities
Administrator, the Custodian, any Sub-Servicer, any Owner or the
Trustee (each, for purposes of this paragraph, a party) of
a breach of any of the representations and warranties set forth
in this Section 3.02(1) which materially and adversely
affects the interests of the Owners, the party discovering such
breach shall give prompt written notice to the other
parties. As promptly as practicable, but in any event
within 60 days of its discovery or its receipt of notice of
breach, the Servicer shall cure such breach in all material
respects.
(2) The Master Servicer hereby represents,
warrants and covenants to the Depositor, the Trustee, the
Servicer and the Owners that as of the Startup Day:
(a)
The Master Servicer
is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of
America and is duly authorized and qualified to transact any and
all business contemplated by this Agreement to be conducted by
the Master Servicer;
(b)
The Master Servicer
has the full power and authority to conduct its business as
presently conducted by it and to execute, deliver and perform,
and to enter into and consummate, all transactions contemplated
by this Agreement. The Master Servicer has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the
Depositor and the Trustee, constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable against
it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity;
(c)
The execution and
delivery of this Agreement by the Master Servicer, the
consummation by the Master Servicer of any other of the
transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of
business of the Master Servicer and will not (A) result in
a breach of any term or provision of charter and by-laws of the
Master Servicer or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which the
Master Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Master Servicer
of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Master Servicer;
and the Master Servicer is not a party to, bound by, or in
breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order
or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Master
Servicer’s knowledge, would in the future materially and
adversely affect, the ability of the Master Servicer to perform
its obligations under this Agreement;
(d)
The Master Servicer
or an Affiliate thereof is an approved seller/servicer for FNMA
or FHLMC in good standing and is a HUD approved mortgagee
pursuant to Section 203 of the National Housing
Act;
(e)
The Master Servicer
does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant made by
it and contained in this Agreement;
(f)
No litigation is
pending against the Master Servicer that would materially and
adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Master Servicer to perform
any of its other obligations hereunder in accordance with the
terms hereof;
(g)
There are no
actions or proceedings against, or investigations known to it
of, the Master Servicer before any court, administrative or
other tribunal (A) that might prohibit its entering into
this Agreement, (B) seeking to prevent the consummation of
the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the
performance by the Master Servicer of its obligations under, or
validity or enforceability of, this Agreement; and
(h)
No consent,
approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the
Master Servicer with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Startup Day.
It is understood and agreed that the
representations, warranties and covenants set forth in this
Section 2.05 shall survive delivery of the Files to the
Custodian and shall inure to the benefit of the Trustee, the
Depositor, the Servicer and the Certificateholders. Upon
discovery by any of the Depositor, the Servicer, the Master
Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and
adversely affects the value of any Home Equity Loan or the
interests therein of the Certificateholders, the party
discovering such breach shall give prompt written notice (but in
no event later than two Business Days following such
discovery) to other parties to this Agreement.
Section
3.03.
Representations and
Warranties of the Seller.
The Seller hereby represents, warrants and
covenants to the Depositor, the Master Servicer, the Securities
Administrator, the Trustee and the Owners that as of the Startup
Day:
(a)
The Seller is a
limited liability company, duly formed and validly existing
under the laws governing its creation and existence, the Seller
is not in violation of the laws of any state in which any
Property or the Seller is located or doing business which
violation would materially and adversely affect the condition
(financial or otherwise) or operations of the Seller or its
properties or the ability of the Trust to collect any amounts on
any Home Equity Loan and the Seller is in good standing in each
jurisdiction in which the nature of its business or the
properties owned or leased by it make such qualification
necessary. The Seller has all requisite limited liability
company power and authority to own and operate its properties,
to carry out its business as presently conducted and as proposed
to be conducted and to enter into and discharge its obligations
under this Agreement and the other Operative Documents to which
it is a party.
(b)
The execution and
delivery of this Agreement and the other Operative Documents to
which the Seller is a party and its performance and compliance
with the terms of this Agreement and the other Operative
Documents to which it is a party have been duly authorized by
all necessary limited liability company action and will not
violate its certificate of formation or amended and restated
limited liability company agreement, or constitute a default (or
an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in a breach of, any
material contract, agreement or other instrument to which it is
a party or by which it is bound or violate any statute or any
order, rule or regulation of any court, governmental agency
or body or other tribunal having jurisdiction over it or any of
its properties.
(c)
This Agreement and
the other Operative Documents to which the Seller is a party,
assuming due authorization, execution and delivery by the other
parties hereto and thereto, each constitutes a valid, legal and
binding obligation of the Seller enforceable hereof and thereof
against it in accordance with the terms hereof and thereof,
except as the enforcement hereof and thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally
and by general principles of equity (whether considered in a
proceeding or action in equity or at law).
(d)
The Seller is not
in default with respect to any order or decree of any court or
any order, regulation or demand of any federal, state, municipal
or governmental agency, which default could materially and
adversely affect the condition (financial or other) or
operations of the Seller or its properties or the consequences
of which could materially and adversely affect its performance
hereunder and under the other Operative Documents to which it is
a party.
(e)
No litigation,
proceeding or investigation is pending with respect to which the
Seller has received service of process or, to the best of its
knowledge, threatened against it which litigation, proceeding or
investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to
which it is a party or that would materially and adversely
affect the condition (financial or otherwise) or operations
of the Seller or its properties or might have consequences that
would materially and adversely affect the validity or
enforceability of the Home Equity Loans or its performance
hereunder and under the other Operative Documents to which it is
a party.
(f)
The statements
contained in the Registration Statement which describe the
Seller or matters or activities for which it is responsible in
accordance with the Operative Documents or which are attributed
to it therein are true and correct in all material respects, and
the Registration Statement does not contain any untrue statement
of a material fact with respect to the Seller or omit to state a
material fact required to be stated therein or necessary in
order to make the statements contained therein with respect to
the Seller not misleading.
(g)
[Reserved].
(h)
All actions,
approvals, consents, waivers, exemptions, variances, franchises,
orders, permits, authorizations, rights and licenses required to
be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other
than any such actions, approvals, etc. under any state
securities laws, real estate syndication or “Blue
Sky” statutes, as to which the Seller makes no such
representation or warranty), that are necessary or advisable in
connection with the purchase and sale of the Certificates and
the execution and delivery by the Seller of the Operative
Documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either
the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof
may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by
this Agreement and the other Operative Documents on the part of
the Seller and the performance by the Seller of its obligations
under this Agreement and such of the other Operative Documents
to which it is a party.
(i)
The origination
practices used by the Seller with respect to the Home Equity
Loans have been, in all material respects, legal, proper,
prudent and customary in the home equity lending
business. All of the Home Equity Loans were originated by
the Seller, an Affiliate of the Seller or a broker for
simultaneous assignment to the Seller or were acquired by the
Seller from correspondent lenders and are underwritten to comply
with the Seller’s underwriting standards.
(j)
The transactions
contemplated by this Agreement are in the ordinary course of
business of the Seller.
(k)
The Trustee and the
Seller have no obligation to register the Trust and the Trust
has no obligation to register as an investment company under the
Investment Company Act of 1940, as amended.
(l)
The Seller is not
insolvent, nor will it be made insolvent by the transfer of the
Home Equity Loans, nor is the Seller aware of any pending
insolvency.
(m)
The Seller received
fair consideration and reasonably equivalent value in exchange
for the sale of the interests in the Home Equity Loans
transferred by it.
(n)
The Seller did not
sell any interest in any Home Equity Loan with any intent to
hinder, delay or defraud any of its creditors.
(o)
No material adverse
change affecting any security for the Offered Certificates has
occurred prior to delivery of and payment for the Offered
Certificates.
(p)
The Seller is not
in default under any agreement involving financial obligations
or on any outstanding obligation, in any such case which would
materially adversely impact the financial condition or
operations of the Seller or its obligations under the Operative
Documents.
(q)
[Reserved].
(r)
The sale, transfer,
assignment and conveyance of Home Equity Loans by the Seller
pursuant to this Agreement is not subject to and will not result
in any tax, fee or governmental charge payable by the Seller,
the Depositor or the Trustee to any federal, state or local
government (“Transfer Taxes”) other than
Transfer Taxes which have been or will be paid as due by the
Seller. The Seller shall pay any and all such Transfer
Taxes.
(s)
No certificate of
an officer, statement furnished in writing or report delivered
pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not
misleading.
It is understood and agreed that the
representations and warranties set forth in this
Section 3.03 shall survive delivery of the respective Home
Equity Loans to the Trustee.
Section
3.04.
Covenants of Seller
to Take Certain Actions with Respect to the Home Equity Loans in
Certain Situations.
(a)
Upon the discovery
by the Depositor, the Seller, the Master Servicer, the Servicer,
any Sub-Servicer, any Owner, the Custodian, the Securities
Administrator or the Trustee (each, for purposes of this
paragraph, a party) that the representations and warranties
set forth in clause (b)(1) or (b)(2) below were
untrue in any material respect, without regard to any limitation
set forth therein concerning the knowledge of the Seller or the
Servicer as to the facts stated therein, as of the Startup Day
(or in the case of a Qualified Replacement Mortgage, as of the
respective Replacement Cut-Off Date), with the result that the
interests of the Owners in the related Home Equity Loan or
Prepayment Charge are, or may be, materially and adversely
affected, the party discovering such breach shall give prompt
written notice to the other parties. Notwithstanding the
foregoing, any breach of a representation or warranty set forth
in (b)(2) below shall be deemed to be untrue in a material
respect. Upon the earliest to occur of Nationstar
Mortgage’s discovery, its receipt of notice of breach from
any one of the other parties or such time as a situation
resulting from an existing statement which is untrue materially
and adversely affects the interests of the Owners, without
regard to any limitation set forth therein concerning the
knowledge of Nationstar Mortgage as to the facts stated therein,
Nationstar Mortgage hereby covenants and warrants that it shall
promptly cure such breach in all material respects or that it
shall on or before the second Monthly Remittance Date next
succeeding such discovery, receipt of notice or such time
(i) substitute in lieu of each Home Equity Loan which has
given rise to the requirement for action by Nationstar Mortgage
a Qualified Replacement Mortgage and deliver the Substitution
Amount to the Servicer for deposit in the Principal and Interest
Account or (ii) purchase such Home Equity Loan from the
Trust at a purchase price equal to the Loan Purchase Price
thereof, which purchase price shall be delivered to the Servicer
for deposit in the Principal and Interest Account. It is
understood and agreed that the obligation of Nationstar Mortgage
so to substitute or purchase any Home Equity Loan as to which
such a statement set forth below in this Section 3.04 is
untrue in any material respect and has not been remedied shall
constitute the sole remedy respecting a discovery of any such
statement which is untrue in any material respect available to
the Owners and the Trustee on behalf of the
Owners. Notwithstanding any provision of this Agreement to
the contrary, with respect to any Home Equity Loan which is not
in default or as to which no default is imminent, no repurchase
or substitution pursuant to Section 3.04 or 3.06 shall be
made unless Nationstar Mortgage obtains for the Trustee and the
Securities Administrator at its expense an Opinion of Counsel
experienced in federal income tax matters to the effect that
such a repurchase or substitution would not constitute a
Prohibited Transaction for the Trust or any REMIC created
hereunder or otherwise subject the Trust or any
REMIC created hereunder to tax and would not jeopardize the
status of any REMIC created hereunder as a REMIC (a
“REMIC Opinion”) addressed to the Trustee
and the Securities Administrator and acceptable to the Trustee
and the Securities Administrator. Nationstar Mortgage shall
also deliver an Officer’s Certificate to the Trustee and
the Securities Administrator concurrently with the delivery of a
Qualified Replacement Mortgage pursuant to Sections 3.04 and
3.06(b) stating that such Home Equity Loan meets the
requirements of the definition of a Qualified Replacement
Mortgage and that all other conditions to the substitution
thereof have been satisfied. Any Home Equity Loan as to
which repurchase or substitution was delayed pursuant to this
Section shall be repurchased or substituted for (subject to
compliance with Section 3.04 or 3.06(b), as the case may
be) upon the earlier of (a) the occurrence of a
default or imminent default with respect to such Home Equity
Loan and (b) receipt by the Trustee and the Securities
Administrator of a REMIC Opinion.
(b)
(1)
The Seller, with respect to the Home Equity
Loans hereby represents, warrants and covenants to the Trustee,
the Securities Administrator, the Depositor, the Master
Servicer, the Servicer and the Owners that as of the Startup Day
(or the Replacement Cut-Off Date, with respect to a Qualified
Replacement Mortgage):
(i)
The information
with respect to each Home Equity Loan set forth in the related
Schedule of Home Equity Loans is true and correct in all
material respects as of the Cut-Off Date;
(ii)
Except as otherwise
disclosed on the related Schedule of Home Equity Loans, all
payments required to be made up to the close of business on the
Startup Day for such Home Equity Loan under the terms of the
Note have been made; neither the Seller nor the Servicer has
advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the
related Property, directly or indirectly, for the payment of any
amount required by the Note or Mortgage;
(iii)
There are no
delinquent taxes, ground rents, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding
charges affecting the related Property;
(iv)
The terms of the
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 Custodian; the substance of any such waiver,
alteration or modification has been approved by the title
insurer, to the extent required by the related policy, and is
reflected on the related Schedule of Home Equity Loans. 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 title insurer, to the extent required by the policy, and
which assumption agreement has been delivered to the Custodian
and the terms of which are reflected in the related
Schedule of Home Equity Loans;
(v)
The 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 Note and the
Mortgage, or the exercise of any right thereunder, render 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. Each Prepayment Charge or penalty with respect to
any Home Equity Loan is permissible, enforceable and collectible
under applicable federal, state and local law;
(vi)
All buildings upon
the Property are insured by a Qualified Insurer acceptable to
FNMA and FHLMC against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area
where the Property is located, pursuant to insurance policies
providing coverage in an amount not less than the greatest of
(i) 100% of the replacement cost of all improvements to the
Property, (ii) either (A) the outstanding principal
balance of the Home Equity Loan with respect to each first lien
Home Equity Loan or (B) with respect to each second lien
Home Equity Loan, the sum of the outstanding principal balance
of the related first lien mortgage loan and the outstanding
principal balance of the second lien Home Equity Loan, or
(iii) the amount necessary to avoid the operation of any
co-insurance provisions with respect to the Property, and
consistent with the amount that would have been required as of
the date of origination in accordance with the Underwriting
Guidelines; provided that, such amount shall not exceed the
amount provided under applicable law. All such insurance
policies contain a standard mortgagee clause naming the
Seller, its successors and assigns as mortgagee and all premiums
thereon have been paid. If the 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 and 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;
(vii)
Any and all
requirements of any federal, state or local law including,
without limitation, usury, truth in lending, real estate
settlement procedures, predatory, abusive and fair lending laws,
consumer credit protection, equal credit opportunity, fair
housing or disclosure laws and orders from regulatory
authorities applicable to the origination and servicing of
mortgage loans of a type similar to the Home Equity Loans and
applicable to any prepayment penalty associated with the Home
Equity Loans at origination have been complied with in all
material respects;
(viii)
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