EXECUTION COPY
RESIDENTIAL ASSET SECURITIES
CORPORATION,
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
U.S. BANK NATIONAL
ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2005
Home Equity Mortgage Asset-Backed Pass-Through
Certificates
Series 2005-KS4
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS..................................................................3
Section 1.01.
Definitions.......................................................3
Section 1.02.
Determination of LIBOR...........................................42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.............43
Section 2.01.
Conveyance of Mortgage Loans.....................................43
Section 2.02.
Acceptance by Trustee............................................46
Section 2.03.
Representations, Warranties and Covenants of the Master Servicer
and the
Depositor........................................................47
Section 2.04.
Representations and Warranties of Sellers........................49
Section 2.05.
Execution and Authentication of Certificates; Conveyance of REMIC I
Regular
Interests........................................................51
Section 2.06.
Purposes and Powers of the Trust.................................52
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS..............................53
Section 3.01.
Master Servicer to Act as Servicer...............................53
Section 3.02.
Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement
of Subservicers' Obligations.....................................55
Section 3.03.
Successor Subservicers...........................................56
Section 3.04.
Liability of the Master Servicer.................................56
Section 3.05.
No Contractual Relationship Between Subservicer and Trustee or
Certificateholders...............................................57
Section 3.06.
Assumption or Termination of Subservicing Agreements by Trustee..57
Section 3.07.
Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account57
Section 3.08.
Subservicing Accounts; Servicing Accounts........................59
Section 3.09.
Access to Certain Documentation and Information Regarding the
Mortgage Loans
61
Section 3.10.
Permitted Withdrawals from the Custodial Account.................61
Section 3.11.
Maintenance of Primary Insurance Coverage........................63
Section 3.12.
Maintenance of Fire Insurance and Omissions and Fidelity Coverage63
Section 3.13.
Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements;
Certain Assignments..............................................64
Section 3.14.
Realization Upon Defaulted Mortgage Loans........................66
Section 3.15.
Trustee to Cooperate; Release of Mortgage Files..................68
Section 3.16.
Servicing and Other Compensation; Compensating Interest..........69
Section 3.17.
Reports to the Trustee and the Depositor.........................70
Section 3.18.
Annual Statement as to Compliance................................70
Section 3.19.
Annual Independent Public Accountants' Servicing Report..........71
Section 3.20.
Right of the Depositor in Respect of the Master Servicer.........71
Section 3.21.
[Reserved].......................................................72
Section 3.22.
Advance Facility.................................................72
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS..............................................76
Section 4.01.
Certificate Account..............................................76
Section 4.02.
Distributions....................................................76
Section 4.03.
Statements to Certificateholders; Statements to Rating Agencies;
Exchange Act
Reporting........................................................80
Section 4.04.
Distribution of Reports to the Trustee and the Depositor; Advances
by the
Master Servicer..................................................83
Section 4.05.
Allocation of Realized Losses....................................84
Section 4.06.
Reports of Foreclosures and Abandonment of Mortgaged Property....86
Section 4.07.
Optional Purchase of Defaulted Mortgage Loans....................86
Section 4.08.
[Reserved].......................................................86
Section 4.09.
[Reserved].......................................................86
Section 4.10.
Hedge Agreements.................................................86
ARTICLE V
THE
CERTIFICATES............................................................88
Section 5.01.
The Certificates.................................................88
Section 5.02.
Registration of Transfer and Exchange of Certificates............89
Section 5.03.
Mutilated, Destroyed, Lost or Stolen Certificates................94
Section 5.04.
Persons Deemed Owners............................................94
Section 5.05.
Appointment of Paying Agent......................................95
ARTICLE VI
THE DEPOSITOR AND THE MASTER
SERVICER.......................................96
Section 6.01.
Respective Liabilities of the Depositor and the Master Servicer..96
Section 6.02.
Merger or Consolidation of the Depositor or the Master Servicer;
Assignment
of Rights and Delegation of Duties by Master Servicer............96
Section 6.03.
Limitation on Liability of the Depositor, the Master Servicer and
Others
97
Section 6.04.
Depositor and Master Servicer Not to Resign......................97
ARTICLE VII
DEFAULT.....................................................................98
Section 7.01.
Events of Default................................................98
Section 7.02.
Trustee or Depositor to Act; Appointment of Successor............99
Section 7.03.
Notification to Certificateholders..............................100
Section 7.04.
Waiver of Events of Default.....................................101
ARTICLE VIII
CONCERNING THE
TRUSTEE.....................................................102
Section 8.01.
Duties of Trustee...............................................102
Section 8.02.
Certain Matters Affecting the Trustee...........................103
Section 8.03.
Trustee Not Liable for Certificates or Mortgage Loans...........104
Section 8.04.
Trustee May Own Certificates....................................105
Section 8.05.
Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification105
Section 8.06.
Eligibility Requirements for Trustee............................106
Section 8.07.
Resignation and Removal of the Trustee..........................106
Section 8.08.
Successor Trustee...............................................107
Section 8.09.
Merger or Consolidation of Trustee..............................107
Section 8.10.
Appointment of Co-Trustee or Separate Trustee...................107
Section 8.11.
Appointment of Custodians.......................................108
Section 8.12.
Appointment of Office or Agency.................................109
Section 8.13.
DTC Letter of Representations...................................109
Section 8.14.
Hedge Agreements................................................109
ARTICLE IX
TERMINATION................................................................110
Section 9.01.
Termination Upon Purchase or Liquidation of All Mortgage Loans..110
Section 9.02.
Additional Termination Requirements.............................114
ARTICLE X
REMIC
PROVISIONS...........................................................115
Section 10.01.
REMIC Administration............................................115
Section 10.02.
Master Servicer, REMIC Administrator and Trustee Indemnification118
ARTICLE XI
MISCELLANEOUS
PROVISIONS...................................................119
Section 11.01.
Amendment.......................................................119
Section 11.02.
Recordation of Agreement; Counterparts..........................121
Section 11.03.
Limitation on Rights of Certificateholders......................121
Section 11.04.
Governing Law...................................................122
Section 11.05.
Notices.........................................................122
Section 11.06.
Notices to Rating Agencies......................................122
Section 11.07.
Severability of Provisions......................................123
Section 11.08.
Supplemental Provisions for Resecuritization....................123
Exhibit A
Form of Class A
Certificate................................................A-1
Exhibit B-1
Form of Class M
Certificate..............................................B-1-1
Exhibit B-2
Form of Class B
Certificate..............................................B-2-1
Exhibit C
Form of Class SB
Certificate...............................................C-1
Exhibit D
Form of Class R
Certificate................................................D-1
Exhibit E
Form of Custodial
Agreement................................................E-1
Exhibit F
Mortgage Loan
Schedule.....................................................F-1
Exhibit G
Form of Request for
Release................................................G-1
Exhibit H-1
Form of Transfer Affidavit and
Agreement.................................H-1-1
Exhibit H-2
Form of Transferor
Certificate...........................................H-2-1
Exhibit I
Form of Investor Representation
Letter.....................................I-1
Exhibit J
Form of Transferor Representation
Letter...................................J-1
Exhibit K
Text of Amendment to Pooling and Servicing Agreement Pursuant to
Section 11.01(e) for a Limited
Guaranty....................................K-1
Exhibit L
Form of Limited
Guaranty...................................................L-1
Exhibit M
Form of Lender Certification for Assignment of Mortgage
Loan...............M-1
Exhibit N
Form of Rule 144A Investment
Representation................................N-1
Exhibit O
[Reserved].................................................................O-1
Exhibit P
Form of ERISA
Letter.......................................................P-1
Exhibit Q
Reserved...................................................................Q-1
Exhibit R
Assignment
Agreement......................................................R-1
Exhibit S
[Reserved].................................................................S-1
Exhibit T-1
Form of 10-K
Certification...............................................T-1-1
Exhibit T-2
Form of Back-Up
Certification............................................T-2-1
Exhibit U
Information to be Provided by the Master Servicer to the Rating
Agencies Relating to
Reportable Modified Mortgage
Loans.........................................U-1
This
Pooling and Servicing Agreement, effective as of April 1,
2005, among RESIDENTIAL ASSET SECURITIES CORPORATION, as the
depositor (together with its permitted successors and assigns, the
“Depositor”), RESIDENTIAL FUNDING CORPORATION, as
master servicer (together with its permitted successors and
assigns, the “Master Servicer”), and U.S. BANK NATIONAL
ASSOCIATION, a banking association organized under the laws of the
United States, as trustee (together with its permitted successors
and assigns, the “Trustee”).
PRELIMINARY STATEMENT:
The
Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the “Certificates”), to be
issued hereunder in sixteen Classes, which in the aggregate will
evidence the entire beneficial ownership interest in the Mortgage
Loans (as defined herein) and certain other related
assets.
REMIC I
As
provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage
Loans and certain other related assets (exclusive of the Hedge
Agreements) subject to this Agreement as a real estate mortgage
investment conduit (a “REMIC”) for federal income tax
purposes, and such segregated pool of assets will be designated as
“REMIC I.” The Class R-I Certificates will
represent the sole Class of “residual interests”
in REMIC I for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the
“Uncertificated REMIC I Pass-Through Rate”) and
initial Uncertificated Principal Balance for each of the
“regular interests” in REMIC I (the
“REMIC I Regular Interests”). The “latest
possible maturity date” (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii))
for each REMIC I Regular Interest shall be the Maturity Date.
None of the REMIC I Regular Interests will be
certificated.
Uncertificated
INITIAL UNCERTIFICATED
REMIC I
REMIC I
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
LT1
Variable(1)
$414,309,777.72
May 2035
LT2
Variable(1)
$
5,560.97
May 2035
LT3
0.00%
$
35,877.74
May 2035
LT4
Variable(1)
$
35,877.74
May 2035
______________
(1) Calculated as provided in the definition of Uncertificated
REMIC I Pass-Through Rate.
REMIC II As provided herein, the REMIC
Administrator will make an election to treat the segregated pool of
assets consisting of the REMIC I Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets
will be designated as REMIC II. The Class R-II Certificates will
represent the sole Class of "residual interests" in REMIC II for
purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation,
Pass-Through Rate, aggregate Initial Certificate Principal Balance,
certain features, month of Final Scheduled Distribution Date and
initial ratings for each Class of Certificates comprising the
interests representing "regular interests" in REMIC II. The "latest
possible maturity date" (determined solely for purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii)) for
each Class of REMIC II Regular Interests shall be the Maturity
Date.
AGGREGATE INITIAL
MONTH OF
PASS-THROUGH
CERTIFICATE
FINAL SCHEDULED
DESIGNATION
TYPE
RATE
PRINCIPAL BALANCE
FEATURES
DISTRIBUTION DATE
INITIAL RATINGS
S&P
Moody's
Fitch
Class A-1
Regular(1)
Adjustable(2)(3)
$146,700,000.00
Super Senior/
June 2026
AAA
Aaa
AAA
Adjustable Rate
Class A-2
Regular(1)
Adjustable(2)(3)
$122,400,000.00
Super Senior/
April 2034
AAA
Aaa
AAA
Adjustable Rate
Class A-3
Regular(1)
Adjustable(2)(3)
$ 16,245,000.00
Super Senior/
May 2035
AAA
Aaa
AAA
Adjustable Rate
Class A-4A
Regular(1)
Adjustable(2)(3)
$ 38,594,000.00
Super Senior
May 2035
N/R
Aaa
AAA
Support/
Adjustable Rate
Class A-4B
Regular(1)
Adjustable(2)(3)
$ 7,570,000.00
Super Senior
May 2035
N/R
Aaa
AAA
Support/
Adjustable Rate
Class M-1
Regular(1)
Adjustable(2)(3)
$ 20,927,000.00
Mezzanine/
May 2035
AA
Aa2
AA
Adjustable Rate
Class M-2
Regular(1)
Adjustable(2)(3)
$ 17,404,000.00
Mezzanine/
May 2035
A+
A1
AA-
Adjustable Rate
Class M-3
Regular(1)
Adjustable(2)(3)
$ 7,873,000.00
Mezzanine/
May 2035
A
A2
A
Adjustable Rate
Class M-4
Regular(1)
Adjustable(2)(3)
$ 5,594,000.00
Mezzanine/
May 2035
A-
A3
A
Adjustable Rate
Class M-5
Regular(1)
Adjustable(2)(3)
$ 7,045,000.00
Mezzanine/
May 2035
BBB+
Baa1
BBB+
Adjustable Rate
Class M-6
Regular(1)
Adjustable(2)(3)
$ 4,351,000.00
Mezzanine/
May 2035
BBB
Baa2
BBB
Adjustable Rate
Class M-7
Regular(1)
Adjustable(2)(3)
$ 5,180,000.00
Mezzanine/
May 2035
BBB-
Baa3
BBB
Adjustable Rate
Class B-1
Regular(1)
Adjustable(2)(3)
$ 5,801,000.00
Subordinate/
May 2035
BB+
Ba2
BB+
Adjustable Rate
Class B-2
Regular(1)
Adjustable(2)(3)
$ 5,387,000.00
Subordinate/
May 2035
BB
N/R
N/R
Adjustable Rate
Class SB
Regular (4)
(4)
$ 3,316,094.17
Subordinate
May 2035
N/R
N/R
N/R
_______________
(1) The
Class A, Class M and Class B Certificates will
represent ownership of REMIC II Regular Interests together
with certain rights to payments to be made from amounts received
under the related Hedge Agreement which will be deemed made for
federal income tax purposes outside of REMIC II by the holder
of the Class SB Certificates as the owner of the Hedge
Agreements.
(2) The
REMIC II Regular Interests ownership of which is represented
by the Class A, Class M and Class B Certificates,
will accrue interest at a per annum rate equal to the lesser of (i)
LIBOR plus the applicable Margin and (ii) the REMIC Net WAC Cap
Rate and the provisions for the payment of Basis Risk Shortfalls
herein, which payments will not be part of the entitlement of the
REMIC II Regular Interests related to such Certificates. (3) The
Class A, Class M and Class B Certificates will also
entitle their holders to certain payments from the Holder of the
Class SB Certificates from amounts to which the related REMIC
II Regular Interest is entitled and from amounts received under the
Hedge Agreements, which will not be a part of their ownership of
the REMIC II Regular Interests.
(4) The
Class SB Certificates will accrue interest as described in the
definition of Accrued Certificate Interest. The Class SB
Certificates will not accrue interest on their Certificate
Principal Balance. The Class SB Certificates will represent
ownership of two REMIC II Regular Interests, a principal only
regular interest designated REMIC II Regular Interest SB-PO and an
interest only regular interest designated REMIC II Regular Interest
SB-IO, which will be entitled to distributions as set forth herein.
The rights of the Holder of the Class SB Certificates to
payments from the Hedge Agreements shall be outside and apart from
its rights under the REMIC II Regular Interests SB-IO and
SB-PO.
In
consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions
.
Whenever
used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in
this Article.
Accrued Certificate Interest : With respect to each
Distribution Date and each Class of Class A Certificates,
Class M Certificates and Class B Certificates, interest
accrued during the related Interest Accrual Period on the
Certificate Principal Balance thereof immediately prior to such
Distribution Date at the related Pass-Through Rate for that
Distribution Date.
The
amount of Accrued Certificate Interest on each Class of
Certificates shall be reduced by the amount of Prepayment Interest
Shortfalls on the related Mortgage Loans during the prior calendar
month to the extent not covered by Compensating Interest pursuant
to Section 3.16, and by Relief Act Shortfalls on the related
Mortgage Loans during the related Due Period. All such reductions
with respect to the Mortgage Loans will be allocated among the
Certificates in proportion to the amounts of Accrued Certificate
Interest payable on such Certificates on such Distribution Date
absent such reductions.
Accrued
Certificate Interest on each Class of Class A Certificates,
Class M Certificates and Class B Certificates for any
Distribution Date shall also be reduced by any interest shortfalls
resulting from the failure of the Hedge Agreements Provider to make
the related required Hedge Payment for such Distribution Date, with
all such reductions on the Class A Certificates allocated to
the Class A Certificates on a pro rata basis, based on the
portion of the Class A Hedge Payment each such Class was
entitled to, but did not receive, on such Distribution Date and all
such reductions on the Class M Certificates and Class B
Certificates allocated to the Class M Certificates and
Class B Certificates on a pro rata basis, based on the portion
of the Subordinate Hedge Payment each such Class was entitled
to, but did not receive, on such Distribution Date.
Accrued
Certificate Interest for any Distribution Date shall further be
reduced by the interest portion of Realized Losses allocated to any
Class of Certificates pursuant to Section 4.05.
Accrued
Certificate Interest shall accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual
Period.
With
respect to each Distribution Date and the Class SB
Certificates, interest accrued during the preceding Interest
Accrual Period at the related Pass-Through Rate on the Notional
Amount as specified in the definition of Pass-Through Rate,
immediately prior to such Distribution Date, reduced by any
interest shortfalls with respect to the Mortgage Loans, including
Prepayment Interest Shortfalls to the extent not covered by
Compensating Interest pursuant to Section 3.16 or by Excess
Cash Flow pursuant to Section 4.02(c)(v) and (vi). Accrued
Certificate Interest on the Class SB Certificates shall accrue
on the basis of a 360-day year and the actual number of days in the
related Interest Accrual Period.
Adjusted Mortgage Rate : With respect to any Mortgage Loan
and any date of determination, the Mortgage Rate borne by the
related Mortgage Note, less the rate at which the related
Subservicing Fee accrues.
Adjustment Date : With respect to each adjustable-rate
Mortgage Loan, each date set forth in the related Mortgage Note on
which an adjustment to the interest rate on such Mortgage Loan
becomes effective.
Advance : With respect to any Mortgage Loan, any advance
made by the Master Servicer, pursuant to
Section 4.04.
Affiliate : With respect to any Person, any other Person
controlling, controlled by or under common control with such first
Person. For purposes of this definition, “control”
means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have
meanings correlative to the foregoing.
Agreement: This Pooling and Servicing
Agreement and all amendments hereof and supplements hereto.
Amount Held for Future Distribution : With respect to any
Distribution Date, the total of the amounts held in the Custodial
Account at the close of business on the preceding Determination
Date on account of (i) Liquidation Proceeds, Subsequent
Recoveries, Insurance Proceeds, REO Proceeds, Principal
Prepayments, Mortgage Loan purchases made pursuant to
Section 2.02, 2.03, 2.04 or 4.07 and Mortgage Loan
substitutions made pursuant to Section 2.03 or 2.04 received
or made in the month of such Distribution Date (other than such
Liquidation Proceeds, Subsequent Recoveries, Insurance Proceeds,
REO Proceeds and purchases of Mortgage Loans that the Master
Servicer has deemed to have been received in the preceding month in
accordance with Section 3.07(b)) and (ii) payments which
represent early receipt of scheduled payments of principal and
interest due on a date or dates subsequent to the Due Date in the
related Due Period.
Appraised Value : With respect to any Mortgaged Property,
the lesser of (i) the appraised value of such Mortgaged Property
based upon the appraisal made at the time of the origination of the
related Mortgage Loan, and (ii) the sales price of the Mortgaged
Property at such time of origination, except in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan
as to which it is either the appraised value based upon the
appraisal made at the time of origination of the loan which was
refinanced or modified or the appraised value determined in an
appraisal at the time of refinancing or modification, as the case
may be.
Assignment : An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage
Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in
the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to that
effect.
Assignment Agreement : The Assignment and Assumption
Agreement, dated the Closing Date, between Residential Funding and
the Depositor relating to the transfer and assignment of the
Mortgage Loans, attached hereto as Exhibit R.
Available Distribution Amount : With respect to any
Distribution Date, an amount equal to (a) the sum of (i) the amount
relating to the Mortgage Loans on deposit in the Custodial Account
as of the close of business on the immediately preceding
Determination Date, including any Subsequent Recoveries, and
amounts deposited in the Custodial Account in connection with the
substitution of Qualified Substitute Mortgage Loans, (ii) the
amount of any Advance made on the immediately preceding Certificate
Account Deposit Date with respect to the Mortgage Loans, (iii) any
amount deposited in the Certificate Account on the related
Certificate Account Deposit Date pursuant to the second paragraph
of Section 3.12(a) in respect of the Mortgage Loans, (iv) any
amount that the Master Servicer is not permitted to withdraw from
the Custodial Account pursuant to Section 3.16(e) in respect
of the Mortgage Loans, and (v) any amount deposited in the
Certificate Account pursuant to Section 4.07 or 9.01 in
respect of the Mortgage Loans, reduced by (b) the sum as of the
close of business on the immediately preceding Determination Date
of (x) the Amount Held for Future Distribution with respect to the
Mortgage Loans, and (y) amounts permitted to be withdrawn by the
Master Servicer from the Custodial Account in respect of the
Mortgage Loans pursuant to clauses (ii)-(x), inclusive, of
Section 3.10(a).
Balloon Loan : Each of the Mortgage Loans having an original
term to maturity that is shorter than the related amortization
term.
Balloon Payment : With respect to any Balloon Loan, the
related Monthly Payment payable on the stated maturity date of such
Balloon Loan.
Bankruptcy Code: The Bankruptcy Code of 1978,
as amended.
Basis Risk Shortfalls : With respect to any Distribution
Date and any Class of Class A Certificates, Class M
Certificates or Class B Certificates, the sum of (a) with
respect to any Distribution Date on which the related Net WAC Cap
Rate is used to determine the Pass-Through Rate of such Class, an
amount equal to the excess of (x) Accrued Certificate Interest
for such Class calculated at a per annum rate equal to the lesser
of (i) LIBOR plus the related Margin for such Distribution Date and
(ii) the Weighted Average Maximum Net Mortgage Rate, over (y)
Accrued Certificate Interest for such Class calculated using the
related Net WAC Cap Rate plus, an amount equal to any reduction in
the Accrued Certificate Interest of such Class due to the failure
of the Hedge Agreements Provider to make any related required Hedge
Payment with respect to such Distribution Date, (b) any shortfalls
for such Class calculated pursuant to clause (a) above remaining
unpaid from prior Distribution Dates, and (c) one month’s
interest on the amount in clause (b) (based on the number of days
in the preceding Interest Accrual Period) at a per annum rate equal
to LIBOR plus the related Margin for such Distribution
Date.
Book-Entry Certificate : Any Certificate registered in the
name of the Depository or its nominee.
Business Day : Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the State of
California, the State of Minnesota, the State of Texas, the State
of New York or the State of Illinois (and such other state or
states in which the Custodial Account or the Certificate Account
are at the time located) are required or authorized by law or
executive order to be closed.
Capitalization Reimbursement Amount : With respect to any
Distribution Date, the amount of Advances or Servicing Advances
that were added to the Stated Principal Balance of the Mortgage
Loans during the prior calendar month and reimbursed to the Master
Servicer or Subservicer on or prior to such Distribution Date
pursuant to Section 3.10(a)(vii).
Cash Liquidation : With respect to any defaulted Mortgage
Loan other than a Mortgage Loan as to which an REO Acquisition
occurred, a determination by the Master Servicer that it has
received all Insurance Proceeds, Liquidation Proceeds and other
payments or cash recoveries which the Master Servicer reasonably
and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
Certificate: Any Class A
Certificate, Class M Certificate, Class B Certificate,
Class SB Certificateor
Class R Certificate.
Certificate Account : The account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled
“U.S. Bank National Association, as trustee, in trust for the
registered holders of Residential Asset Securities Corporation,
Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series
2005-KS4” and which account shall be held for the benefit of
the Certificateholders and which must be an Eligible
Account.
Certificate Account Deposit Date : With respect to any
Distribution Date, the Business Day prior thereto.
Certificateholder or Holder : The Person in whose name a
Certificate is registered in the Certificate Register, except that
neither a Disqualified Organization nor a Non-United States Person
shall be a holder of a Class R Certificate for any purpose
hereof. Solely for the purpose of giving any consent or direction
pursuant to this Agreement, any Certificate, other than a
Class R Certificate, registered in the name of the Depositor,
the Master Servicer or any Subservicer or any Affiliate thereof
shall be deemed not to be outstanding and the Percentage Interest
or Voting Rights evidenced thereby shall not be taken into account
in determining whether the requisite amount of Percentage Interests
or Voting Rights necessary to effect any such consent or direction
has been obtained. All references herein to “Holders”
or “Certificateholders” shall reflect the rights of
Certificate Owners as they may indirectly exercise such rights
through the Depository and participating members thereof, except as
otherwise specified herein; provided, however , that the
Trustee shall be required to recognize as a “Holder” or
“Certificateholder” only the Person in whose name a
Certificate is registered in the Certificate Register. Unless
otherwise indicated in this Agreement, the Custodial Agreement or
the Assignment Agreement, whenever reference is made to the actions
taken by the Trustee on behalf of the
Certificateholders.
Certificate Owner : With respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such
Certificate, as reflected on the books of an indirect participating
brokerage firm for which a Depository Participant acts as agent, if
any, and otherwise on the books of a Depository Participant, if
any, and otherwise on the books of the Depository.
Certificate Principal Balance : With respect to any
Class A Certificate, Class M Certificate or Class B
Certificate, on any date of determination, an amount equal to (i)
the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, minus (ii) the sum of (x) the
aggregate of all amounts previously distributed with respect to
such Certificate (or any predecessor Certificate) and applied to
reduce the Certificate Principal Balance thereof pursuant to
Section 4.02(c) and (y) the aggregate of all reductions
in Certificate Principal Balance deemed to have occurred in
connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to this
Agreement; provided , that with respect to any Distribution
Date, the Certificate Principal Balance of any outstanding Class of
Class A Certificates, Class M Certificates and
Class B Certificates (with respect to the Class A
Certificates, on a pro rata basis based on the amount of Realized
Loss previously allocated thereto and remaining unreimbursed) to
which a Realized Loss was previously allocated and remains
unreimbursed will be increased, to the extent of Realized Losses
previously allocated thereto and remaining unreimbursed, but only
to the extent of Subsequent Recoveries received during the
preceding calendar month.
With
respect to any Class SB Certificate, on any date of
determination, an amount equal to the Percentage Interest evidenced
by such Certificate, multiplied by an amount equal to (i) the
excess, if any, of (A) the then aggregate Stated Principal Balance
of the Mortgage Loans over (B) the then aggregate Certificate
Principal Balance of the Class A Certificates, Class M
Certificates and Class B Certificates then outstanding, which
represents the sum of (i) the Initial Principal Balance of the
REMIC II Regular Interest SB-PO, as reduced by Realized Losses
allocated thereto and payments deemed made thereon, and (ii)
accrued and unpaid interest on the REMIC II Regular Interest SB-IO,
as reduced by Realized Losses allocated thereto.
The
Class R Certificates will not have a Certificate Principal
Balance.
Certificate Register and Certificate Registrar : The
register maintained and the registrar appointed pursuant to
Section 5.02.
Class: Collectively, all of the Certificates
or uncertificated interests bearing the same designation.
Class A-1 Certificate : Any one of the Class A-1
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Class A Hedge Agreement.
Class A-2 Certificate : Any one of the Class A-2
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Class A Hedge Agreement.
Class A-3 Certificate : Any one of the Class A-3
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Class A Hedge Agreement.
Class A-4 Certificates : Collectively, the
Class A-4A Certificates and Class A-4B
Certificates.
Class A-4 Trigger Event : A Class A-4 Trigger
Event shall be in effect on any Distribution Date if, (i) beginning
on the Distribution Date in October 2006, the aggregate amount of
Realized Losses incurred since the Cut-Off Date through the last
day of the related Due Period, divided by the sum of the aggregate
principal balance of the Mortgage Loans as of the Cut-Off Date,
exceeds 2.85%, or (ii) on or after the Stepdown Date, a Trigger
Event is in effect.
Class A-4A Certificate : Any one of the Class A-4A
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Class A Hedge Agreement.
Class A-4B Certificate : Any one of the Class A-4B
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Class A Hedge Agreement.
Class A Certificates : Collectively, the Class A-1
Certificates, Class A-2 Certificates, Class A-3
Certificates and Class A-4 Certificates.
Class A Hedge Agreement : The confirmation, dated as of
the Closing Date, between the Trustee, on behalf of the Trust Fund,
and the Hedge Agreements Provider, relating to the Class A
Certificates and Class SB Certificates or any replacement,
substitute, collateral or other arrangement in lieu
thereof.
Class A Hedge Payment : For any Distribution Date, the
payment, if any, due under the Class A Hedge Agreement in
respect of such Distribution Date.
Class A Interest Remittance Amount : With respect to
any Distribution Date, the portion of the Available Distribution
Amount for that Distribution Date attributable to interest received
or advanced with respect to the Mortgage Loans plus, with respect
to payments on the Class A Certificates pursuant to
Section 4.02(c)(iii)(A) only, the amount necessary to make
such payments paid from amounts received on the Hedge Agreement for
such Distribution Date.
Class A Net WAC Cap Rate : With respect to the
Class A Certificates and any Distribution Date, the sum of
(a) the REMIC Net WAC Cap Rate and (b) a per annum rate equal
to (i) the Class A Hedge Payment, if any, with respect to such
Distribution Date, divided by (ii) the aggregate Certificate
Principal Balance of the Class A Certificates immediately
prior to such Distribution Date.
Class A Principal Distribution Amount : With respect to
any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the Principal Distribution Amount for that
Distribution Date or (b) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser
of:
|
|
(i)
|
the Principal
Distribution Amount for that Distribution Date; and
|
|
|
(ii)
|
the excess, if
any, of (A) the aggregate Certificate Principal Balance of the
Class A Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date and (y) the excess, if any, of
the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
|
Class B-1 Certificate : Any one of the Class B-1
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-2 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class B-1 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount and the Class M Principal
Distribution Amount or (b) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount and
the Class M Principal Distribution Amount; and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates and Class M Certificates
(after taking into account the payment of the Class A
Principal Distribution Amount and the Class M Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class B-1 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
|
Class B-2 Certificate : Any one of the Class B-2
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-2 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class B-2 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M Principal
Distribution Amount and the Class B-1 Principal Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, the
Class M Principal Distribution Amount and the Class B-1
Principal Distribution Amount; and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates, Class M Certificates and
Class B-1 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount, the Class M
Principal Distribution Amount and the Class B-1 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class B-2 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
|
Class B Certificates: Collectively, the Class B-1 Certificates and
Class B-2 Certificates.
Class M-1 Certificate : Any one of the Class M-1
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-1 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under
the Subordinate Hedge Agreement.
Class M-1 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount or (b) on or after the Stepdown Date
if a Trigger Event is not in effect for that Distribution Date, the
lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount;
and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of the
Class M-1 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization
Floor.
|
Class M-2 Certificate : Any one of the Class M-2
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-1 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class M-2 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on
or after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount and the Class M-1 Principal
Distribution Amount or (b) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount and
the Class M-1 Principal Distribution Amount; and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates and Class M-1 Certificates
(after taking into account the payment of the Class A
Principal Distribution Amount and the Class M-1 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-2 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
|
Class M-3 Certificate : Any one of the Class M-3
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-1 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class M-3 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount and the Class M-2 Principal Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount and the Class M-2
Principal Distribution Amount; and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates, Class M-1 Certificates and
Class M-2 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount and the Class M-2
Principal Distribution Amount for that Distribution Date) and (2)
the Certificate Principal Balance of the Class M-3
Certificates immediately prior to that Distribution Date over (B)
the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of
the Mortgage Loans after giving effect to distributions to be made
on that Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
|
Class M-4 Certificate : Any one of the Class M-4
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-1 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class M-4 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution
Amount and the Class M-3 Principal Distribution Amount or (b)
on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount; and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates and Class M-3 Certificates (after
taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount and the
Class M-3 Principal Distribution Amount for that Distribution
Date) and (2) the Certificate Principal Balance of the
Class M-4 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization
Floor.
|
Class M-5 Certificate : Any one of the Class M-5
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-1 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class M-5 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution
Amount, the Class M-3 Principal Distribution Amount and the
Class M-4 Principal Distribution Amount or (b) on or after the
Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount and the Class M-4 Principal Distribution
Amount; and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates and
Class M-4 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount and the Class M-4 Principal Distribution
Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-5 Certificates immediately
prior to that Distribution Date over (B) the lesser of (x) the
product of (1) the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date
and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the
Overcollateralization Floor.
|
Class M-6 Certificate : Any one of the Class M-6
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-1 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class M-6 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution
Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount and the Class M-5
Principal Distribution Amount or (b) on or after the Stepdown Date
if a Trigger Event is not in effect for that Distribution Date, the
lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount and the Class M-5 Principal Distribution Amount;
and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates and Class M-5 Certificates (after
taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4
Principal Distribution Amount and the Class M-5 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-6 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
|
Class M-7 Certificate : Any one of the Class M-7
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit B-1 and evidencing (i) an interest designated as a
“regular interest” in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive payments under the
Subordinate Hedge Agreement.
Class M-7 Principal Distribution Amount : With respect
to any Distribution Date (a) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the remaining Principal Distribution Amount for
that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution
Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount and the Class M-6 Principal
Distribution Amount or (b) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
|
|
(i)
|
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount and the
Class M-6 Principal Distribution Amount; and
|
|
|
(ii)the
|
excess, if any,
of (A) the sum of (1) the aggregate Certificate Principal Balance
of the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates and
Class M-6 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount and the
Class M-6 Principal Distribution Amount for that Distribution
Date) and (2) the Certificate Principal Balance of the
Class M-7 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date and (y) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
|
Class M Certificates : Collectively, the Class M-1
Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates and Class M-7
Certificates.
Class M Principal Distribution Amount : With respect to
any Distribution Date, the sum of the 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 for such
Distribution Date.
Class R Certificate: Collectively, the Class
R-I Certificates and Class R-II Certificates.
Class R-I Certificate : Any one of the Class R-I
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit D and evidencing an interest designated as a
“residual interest” in REMIC I for purposes of the
REMIC Provisions.
Class R-II Certificate : Any one of the Class R-II
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit D and evidencing an interest designated as a
“residual interest” in REMIC II for purposes of
the REMIC Provisions.
Class SB Certificate : Any one of the Class SB
Certificates executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit C and evidencing an interest comprised of
“regular interests” in REMIC II for purposes of
the REMIC Provisions, together with certain rights to payments
under the Hedge Agreements.
Closing
Date: May 5, 2005.
Code:
The Internal Revenue Code of 1986.
Commission: The Securities and Exchange
Commission. Compensating Interest: With respect to any Distribution
Date, any amount paid by the Master Servicer in accordance with
Section 3.16(f).
Corporate Trust Office : The principal office of the Trustee
at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at
the date of the execution of this instrument is located at U.S.
Bank National Association, EP-MN-WS3D, 60 Livingston Avenue,
St. Paul MN 55107, Attn: RASC 2005-KS4.
Credit Repository: Equifax, Transunion and
Experian, or their successors in interest. Curtailment: Any
Principal Prepayment made by a Mortgagor which is not a Principal
Prepayment in Full.
Custodial Account : The custodial account or accounts
created and maintained pursuant to Section 3.07 in the name of
a depository institution, as custodian for the holders of the
Certificates, for the holders of certain other interests in
mortgage loans serviced or sold by the Master Servicer and for the
Master Servicer, into which the amounts set forth in
Section 3.07 shall be deposited directly. Any such account or
accounts shall be an Eligible Account.
Custodial Agreement : An agreement that may be entered into
among the Depositor, the Master Servicer, the Trustee and a
Custodian in substantially the form of Exhibit E
hereto.
Custodian: Wells Fargo Bank, N.A., or any
successor custodian appointed pursuant to a Custodial
Agreement.
Cut-off
Date: April 1, 2005.
Cut-off
Date Balance: $414,387,094.17.
Cut-off Date Principal Balance : With respect to any
Mortgage Loan, the unpaid principal balance thereof at the Cut-off
Date after giving effect to all installments of principal due on or
prior thereto (or due in the month of the Cut-off Date), whether or
not received.
Debt Service Reduction : With respect to any Mortgage Loan,
a reduction in the scheduled Monthly Payment for such Mortgage Loan
by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code, except such a reduction constituting a Deficient
Valuation or any reduction that results in a permanent forgiveness
of principal.
Deficient Valuation : With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged
Property in an amount less than the then outstanding indebtedness
under the Mortgage Loan, or any reduction in the amount of
principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the
Bankruptcy Code.
Definitive Certificate: Any definitive, fully
registered Certificate. Deleted Mortgage Loan: A Mortgage Loan
replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Delinquent : As used herein, a Mortgage Loan is considered
to be: “30 to 59 days” or “30 or more days”
delinquent when a payment due on any scheduled due date remains
unpaid as of the close of business on the next following monthly
scheduled due date; “60 to 89 days” or “60 or
more days” delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the second
following monthly scheduled due date; and so on. The determination
as to whether a Mortgage Loan falls into these categories is made
as of the close of business on the last business day of each month.
For example, a Mortgage Loan with a payment due on July 1 that
remained unpaid as of the close of business on August 31 would then
be considered to be 30 to 59 days delinquent. Delinquency
information as of the Cut-off Date is determined and prepared as of
the close of business on the last business day immediately prior to
the Cut-off Date.
Depositor: As defined in the preamble
hereto.
Depository : The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository
for purposes of registering those Certificates that are to be
Book-Entry Certificates is Cede & Co. The Depository shall at
all times be a “clearing corporation” as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the
State of New York and a “clearing agency” registered
pursuant to the provisions of Section 17A of the Exchange
Act.
Depository Participant : A broker, dealer, bank or other
financial institution or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities
deposited with the Depository.
Destroyed Mortgage Note : A Mortgage Note the original of
which was permanently lost or destroyed and has not been
replaced.
Determination Date : With respect to any Distribution Date,
the 20th day (or if such 20th day is not a Business Day, the
Business Day immediately following such 20th day) of the month of
the related Distribution Date.
Disqualified Organization : Any organization defined as a
“disqualified organization” under
Section 860E(e)(5) of the Code, including, if not otherwise
included, any of the following: (i) the United States, any State or
political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its
activities are subject to tax and, except for Freddie Mac, a
majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international
organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain
farmers’ cooperatives described in Section 521 of the
Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on
unrelated business taxable income) and (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of
the Code. A Disqualified Organization also includes any
“electing large partnership,” as defined in
Section 775(a) of the Code and any other Person so designated
by the Trustee based upon an Opinion of Counsel that the holding of
an Ownership Interest in a Class R Certificate by such Person
may cause any REMIC or any Person having an Ownership Interest in
any Class of Certificates (other than such Person) to incur a
liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest
in a Class R Certificate to such Person. The terms
“United States,” “State” and
“international organization” shall have the meanings
set forth in Section 7701 of the Code or successor
provisions.
Distribution Date : The 25th day of any month beginning in
May 2005 or, if such 25th day is not a Business Day, the
Business Day immediately following such 25th day.
DTC Letter : The Letter of Representations, dated
May 4, 2005, among the Trustee on behalf of the Trust Fund,
U.S. Bank National Association, in its individual capacity as agent
thereunder and the Depository.
Due Date : With respect to any Distribution Date and any
Mortgage Loan, the day during the related Due Period on which the
Monthly Payment is due.
Due Period : With respect to any Distribution Date, the
calendar month of such Distribution Date.
Eligible Account : An account that is any of the following:
(i) maintained with a depository institution the debt obligations
of which have been rated by each Rating Agency in its highest
rating available, or (ii) an account or accounts in a depository
institution in which such accounts are fully insured to the limits
established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced
in writing, be maintained such that (as evidenced by an Opinion of
Counsel delivered to the Trustee and each Rating Agency) the
registered Holders of Certificates have a claim with respect to the
funds in such account or a perfected first security interest
against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with
which such account is maintained, or (iii) in the case of the
Custodial Account, a trust account or accounts maintained in the
corporate trust department of U.S. Bank National Association, or
(iv) in the case of the Certificate Account, a trust account or
accounts maintained in the corporate trust division of U.S. Bank
National Association, or (v) an account or accounts of a depository
institution acceptable to each Rating Agency (as evidenced in
writing by each Rating Agency that use of any such account as the
Custodial Account or the Certificate Account will not reduce the
rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned
to such Certificates as of the Closing Date by such Rating
Agency).
Eligible Master Servicing Compensation : With respect to any
Distribution Date, the lesser of (a) one-twelfth of 0.125% of
the Stated Principal Balance of the related Mortgage Loans
immediately preceding such Distribution Date and (b) the sum of the
Servicing Fee and all income and gain on amounts held in the
Custodial Account and the Certificate Account and payable to the
Certificateholders with respect to such Distribution Date;
provided that for purposes of this definition the amount of
the Servicing Fee will not be reduced pursuant to
Section 7.02(a) except as may be required pursuant to the last
sentence of such Section.
ERISA: The Employee Retirement Income Security
Act of 1974, as amended.
Event
of Default: As defined in Section 7.01.
Excess Cash Flow : With respect to any Distribution Date, an
amount equal to the sum of (A) the excess of (i) the Available
Distribution Amount for that Distribution Date increased by the
amount, if any, paid from the Hedge Payments for that Distribution
Date pursuant to Section 4.02(c)(iii) over (ii) the sum of (a)
the Interest Distribution Amount for that Distribution Date and (b)
the lesser of (1) the aggregate Certificate Principal Balance
of Class A Certificates, Class M Certificates and
Class B Certificates immediately prior to such Distribution
Date and (2) the Principal Remittance Amount for that Distribution
Date to the extent not applied to pay interest on the Class A
Certificates, Class M Certificates and Class B
Certificates on such Distribution Date and (B) the
Overcollateralization Reduction Amount, if any, for that
Distribution Date.
Excess Overcollateralization Amount : With respect to any
Distribution Date, the excess, if any, of (a) the
Overcollateralization Amount on such Distribution Date over (b) the
Required Overcollateralization Amount for such Distribution
Date.
Exchange Act: The Securities Exchange Act of
1934, as amended.
Expense Fee Rate : With respect to any Mortgage Loan as of
any date of determination, the sum of the applicable Servicing Fee
Rate and the per annum rate at which the applicable Subservicing
Fee accrues.
Fannie Mae : Fannie Mae, a federally chartered and privately
owned corporation organized and existing under the Federal National
Mortgage Association Charter Act, or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or
any successor thereto.
Final Distribution Date : The Distribution Date on which the
final distribution in respect of the Certificates will be made
pursuant to Section 9.01, which Final Distribution Date shall
in no event be later than the end of the 90-day liquidation period
described in Section 9.02.
Final Scheduled Distribution Date : Solely for purposes of
the face of the Certificates, as follows: with respect to the
Class A-1 Certificates, the Distribution Date occurring in
June 2026; with respect to the Class A-2 Certificates, the
Distribution Date occurring in April 2034; with respect to the
Class A-3 Certificates, and each Class of Class A-4
Certificates, Class M Certificates and Class B
Certificates, the Distribution Date occurring in May 2035. No
event of default under this Agreement will arise or become
applicable solely by reason of the failure to retire the entire
Certificate Principal Balance of any Class of Class A
Certificates, Class M Certificates or Class B
Certificates on or before its Final Scheduled Distribution
Date.
Fitch: Fitch Ratings, or its successors in
interest.
Foreclosure Profits : With respect to any Distribution Date
or related Determination Date and any Mortgage Loan, the excess, if
any, of Liquidation Proceeds, Insurance Proceeds and REO Proceeds
(net of all amounts reimbursable therefrom pursuant to
Section 3.10(a)(ii)) in respect of each Mortgage Loan or REO
Property for which a Cash Liquidation or REO Disposition occurred
in the related Prepayment Period over the sum of the unpaid
principal balance of such Mortgage Loan or REO Property
(determined, in the case of an REO Disposition, in accordance with
Section 3.14) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which
interest was last paid by the Mortgagor to the first day of the
month following the month in which such Cash Liquidation or REO
Disposition occurred.
Form 10-K Certification: As defined in Section
4.03(e).
Freddie Mac : Freddie Mac, a corporate instrumentality of
the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Gross Margin : With respect to each adjustable-rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note
and indicated on the Mortgage Loan Schedule as the “NOTE
MARGIN,” which percentage is added to the related Index on
each Adjustment Date to determine (subject to rounding in
accordance with the related Mortgage Note, the Periodic Cap, the
Maximum Mortgage Rate and the Minimum Mortgage Rate) the interest
rate to be borne by such Mortgage Loan until the next Adjustment
Date.
Hedge Agreement: The Class A Hedge Agreement
or Subordinate Hedge Agreement, as applicable.
Hedge Agreements Provider : Bear Stearns Financial Products
Inc., and its successors and assigns or any party to any
replacement, substitute, collateral or other arrangement in lieu
thereof.
Hedge Payment: The Class A Hedge Payment or
Subordinate Hedge Payment, as applicable.
Hedge Shortfall Amount : For any Distribution Date, the
amount, if any, by which the payment on the Class A
Certificates, Class M Certificates and Class B
Certificates pursuant to Section 4.02(c)(iii) is paid from the
Hedge Payments for such Distribution Date pursuant to the
provisions thereof or would have been so paid but for the failure
of the Hedge Agreements Provider to make a payment required under
the Hedge Agreements.
Hedge Shortfall Carry-Forward Amount : For any Distribution
Date, the aggregate Hedge Shortfall Amounts for prior Distribution
Dates to the extent not reimbursed to the Class SB
Certificates pursuant to Section 4.02(c)(x).
HUD: The United States Department of Housing
and Urban Development.
Independent : When used with respect to any specified
Person, means such a Person who (i) is in fact independent of the
Depositor, the Master Servicer and the Trustee, or any Affiliate
thereof, (ii) does not have any direct financial interest or any
material indirect financial interest in the Depositor, the Master
Servicer or the Trustee or in an Affiliate thereof, and (iii) is
not connected with the Depositor, the Master Servicer or the
Trustee as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar
functions.
Index : With respect to any adjustable-rate Mortgage Loan
and as to any Adjustment Date therefor, the related index as stated
in the related Mortgage Note.
Initial Certificate Principal Balance : With respect to each
Class of Certificates (other than the Class R Certificates),
the Certificate Principal Balance of such Class of Certificates as
of the Closing Date as set forth in the Preliminary Statement
hereto.
Insurance Proceeds : Proceeds paid in respect of the
Mortgage Loans pursuant to any Primary Insurance Policy or any
other related insurance policy covering a Mortgage Loan, to the
extent such proceeds are payable to the mortgagee under the
Mortgage, any Subservicer, the Master Servicer or the Trustee and
are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing
mortgage loans held for its own account.
Interest Accrual Period : With respect to the Distribution
Date in May 2005, the period commencing the Closing Date and
ending on the day preceding the Distribution Date in May 2005,
and with respect to any Distribution Date after the Distribution
Date in May 2005, the period commencing on the Distribution
Date in the month immediately preceding the month in which such
Distribution Date occurs and ending on the day preceding such
Distribution Date.
Interest Distribution Amount : For any Distribution Date,
the amounts payable pursuant to
Section 4.02(c)(i)-(iii).
Interim
Certification: As defined in Section 2.02.
Late Collections : With respect to any Mortgage Loan, all
amounts received during any Due Period, whether as late payments of
Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or
otherwise, which represent late payments or collections of Monthly
Payments due but delinquent for a previous Due Period and not
previously recovered.
LIBOR : With respect to any Distribution Date, the
arithmetic mean of the London interbank offered rate quotations for
one-month U.S. Dollar deposits, expressed on a per annum basis,
determined in accordance with Section 1.02.
LIBOR Business Day : Any day other than (i) a Saturday or
Sunday or (ii) a day on which banking institutions in London,
England are required or authorized by law to be closed.
LIBOR Certificates : Collectively, the Class A
Certificates, Class M Certificates and Class B
Certificates.
LIBOR Rate Adjustment Date : With respect to each
Distribution Date, the second LIBOR Business Day immediately
preceding the commencement of the related Interest Accrual
Period.
Liquidation Proceeds : Amounts (other than Insurance
Proceeds) received by the Master Servicer in connection with the
taking of an entire Mortgaged Property by exercise of the power of
eminent domain or condemnation or in connection with the
liquidation of a defaulted Mortgage Loan through trustee’s
sale, foreclosure sale or otherwise, other than REO Proceeds and
Subsequent Recoveries.
Loan-to-Value Ratio : As of any date, the fraction,
expressed as a percentage, the numerator of which is the current
principal balance of the related Mortgage Loan at the date of
determination and the denominator of which is the Appraised Value
of the related Mortgaged Property.
Margin : With respect to each Class of Class A,
Class M and Class B Certificates and any Distribution
Date, the related margin set forth in the table below:
RELATED MARGIN
CLASS
(1)
(2)
A-1
0.080%
0.160%
A-2
0.200%
0.400%
A-3
0.300%
0.600%
A-4A
0.200%
0.400%
A-4B
0.350%
0.700%
M-1
0.410%
0.615%
M-2
0.580%
0.870%
M-3
0.630%
0.945%
M-4
0.670%
1.005%
M-5
1.200%
1.800%
M-6
1.250%
1.875%
M-7
1.700%
2.550%
B-1
3.000%
4.500%
B-2
2.850%
4.275%
________________________
|
|
(1)
|
For any
Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date.
|
|
|
(2)
|
For any
Distribution Date on or after the second Distribution Date after
the first possible Optional Termination Date.
|
Marker Rate : With respect to the Class SB Certificates
or the REMIC II Regular Interest SB-IO and any Distribution Date, a
per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC I Pass-Through Rates for REMIC I Regular
Interest LT2 and REMIC I Regular Interest LT3.
Master Servicer: As defined in the preamble
hereto.
Maturity Date : With respect to each Class of Certificates
representing ownership of REMIC II Regular Interests or REMIC I
Regular Interests issued by each of REMIC I and REMIC II,
the latest possible maturity date, solely for purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, by
which the Certificate Principal Balance of each such Class of
Certificates representing a regular interest in the Trust Fund
would be reduced to zero, which is, for each such regular interest,
February 25, 2035, which is the Distribution Date occurring in the
month following the last scheduled monthly payment of the Mortgage
Loans.
Maximum Mortgage Rate : With respect to any adjustable-rate
Mortgage Loan, the per annum rate indicated on the Mortgage Loan
Schedule as the “NOTE CEILING,” which rate is the
maximum interest rate that may be applicable to such Mortgage Loan
at any time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate : With respect to any
adjustable-rate Mortgage Loan and any date of determination, the
Maximum Mortgage Rate minus the Expense Fee Rate.
MERS: Mortgage Electronic Registration
Systems, Inc., a corporation organized and existing under the laws
of the State of Delaware, or any successor thereto.
MERS® System : The system of recording transfers of
Mortgages electronically maintained by MERS.
MIN : The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS® System.
Minimum Mortgage Rate : With respect to any adjustable-rate
Mortgage Loan, a per annum rate equal to the greater of
(i) the Note Margin and (ii) the rate indicated on the
Mortgage Loan Schedule as the “NOTE FLOOR,” which rate
may be applicable to such Mortgage Loan at any time during the life
of such Mortgage Loan.
Modified Mortgage Loan : Any Mortgage Loan that has been the
subject of a Servicing Modification.
Modified Net Mortgage Rate : With respect to any Mortgage
Loan that is the subject of a Servicing Modification, the Net
Mortgage Rate minus the rate per annum by which the Mortgage Rate
on such Mortgage Loan was reduced.
MOM Loan : With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at
the origination thereof.
Monthly Payment : With respect to any Mortgage Loan
(including any REO Property) and the Due Date in any Due Period,
the payment of principal and interest due thereon in accordance
with the amortization schedule at the time applicable thereto
(after adjustment, if any, for Curtailments and for Deficient
Valuations occurring prior to such Due Date but before any
adjustment to such amortization schedule by reason of any
bankruptcy, other than a Deficient Valuation, or similar proceeding
or any moratorium or similar waiver or grace period and before any
Servicing Modification that constitutes a reduction of the interest
rate on such Mortgage Loan).
Moody's: Moody's Investors Service, Inc., or
its successors in interest.
Mortgage : With respect to each Mortgage Note, the mortgage,
deed of trust or other comparable instrument creating a first or
junior lien on an estate in fee simple or leasehold interest in
real property securing a Mortgage Note.
Mortgage File : The mortgage documents listed in
Section 2.01 pertaining to a particular Mortgage Loan and any
additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage Loans : Such of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 as from time
to time are held or deemed to be held as a part of the Trust Fund,
the Mortgage Loans originally so held being identified in the
initial Mortgage Loan Schedule, and Qualified Substitute Mortgage
Loans held or deemed held as part of the Trust Fund including,
without limitation, each related Mortgage Note, Mortgage and
Mortgage File and all rights appertaining thereto.
Mortgage Loan Schedule : The lists of the Mortgage Loans
attached hereto as Exhibit F (as amended from time to time to
reflect the addition of Qualified Substitute Mortgage Loans), which
lists shall set forth at a minimum the following information as to
each Mortgage Loan:
|
|
(i)
|
the Mortgage
Loan identifying number (“RFC LOAN #”);
|
|
|
(iii)
|
the maturity of
the Mortgage Note (“MATURITY DATE,” or “MATURITY
DT”);
|
|
|
(iv)
|
for the
adjustable-rate Mortgage Loans, the Mortgage Rate as of origination
(“ORIG RATE”);
|
|
|
(v)
|
the Mortgage
Rate as of the Cut-off Date (“CURR RATE”);
|
|
|
(vi)
|
the Net
Mortgage Rate as of the Cut-off Date (“CURR
NET”);
|
|
|
(vii)
|
the scheduled
monthly payment of principal, if any, and interest as of the
Cut-off Date (“ORIGINAL P & I” or “CURRENT P
& I”);
|
|
|
(viii)
|
the Cut-off
Date Principal Balance (“PRINCIPAL BAL”);
|
|
|
(ix)
|
the
Loan-to-Value Ratio at origination (“LTV”);
|
|
|
(x)
|
a code
“T,” “BT” or “CT” under the
column “LN FEATURE,” indicating that the Mortgage Loan
is secured by a second or vacation residence (the absence of any
such code means the Mortgage Loan is secured by a primary
residence);
|
|
|
(xi)
|
a code
“N” under the column “OCCP CODE,”
indicating that the Mortgage Loan is secured by a non-owner
occupied residence (the absence of any such code means the Mortgage
Loan is secured by an owner occupied residence);
|
|
|
(xii)
|
for the
adjustable-rate Mortgage Loans, the Maximum Mortgage Rate
(“NOTE CEILING”);
|
|
|
(xiii)
|
for the
adjustable-rate Mortgage Loans, the maximum Net Mortgage Rate
(“NET CEILING”);
|
|
|
(xiv)
|
for the
adjustable-rate Mortgage Loans, the Note Margin (“NOTE
MARGIN”);
|
|
|
(xv)
|
for the
adjustable-rate Mortgage Loans, the first Adjustment Date after the
Cut-off Date (“NXT INT CHG DT”);
|
|
|
(xvi)
|
for the
adjustable-rate Mortgage Loans, the Periodic Cap (“PERIODIC
DECR” or “PERIODIC INCR”);
|
|
|
(xviii)
|
for the
adjustable-rate Mortgage Loans, the rounding of the semi-annual or
annual adjustment to the Mortgage Rate (“NOTE
METHOD”).
|
Such
schedules may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Note : The originally executed note or other
evidence of indebtedness evidencing the indebtedness of a Mortgagor
under a Mortgage Loan, together with any modification
thereto.
Mortgage Rate : With respect to any Mortgage Loan, the
interest rate borne by the related Mortgage Note, or any
modification thereto other than a Servicing Modification. The
Mortgage Rate on the adjustable-rate Mortgage Loans will adjust on
each Adjustment Date to equal the sum (rounded to the nearest
multiple of one-eighth of one percent (0.125%) or up to the nearest
one-eighth of one percent, which are indicated by a “U”
on the Mortgage Loan Schedule, except in the case of the
adjustable-rate Mortgage Loans indicated by an “X” on
the Mortgage Loan Schedule under the heading “NOTE
METHOD”), of the related Index plus the Note Margin, in each
case subject to the applicable Periodic Cap, Maximum Mortgage Rate
and Minimum Mortgage Rate.
Mortgaged Property: The underlying real
property securing a Mortgage Loan. Mortgagor: The obligor on a
Mortgage Note.
Net Mortgage Rate : With respect to any Mortgage Loan as of
any date of determination, a per annum rate equal to the Mortgage
Rate for such Mortgage Loan as of such date minus the related
Expense Fee Rate.
Net WAC Cap Rate : The Class A Net WAC Cap Rate or
Subordinate Net WAC Cap Rate, as applicable.
Non-United States Person: Any Person other
than a United States Person.
Nonrecoverable Advance : Any Advance previously made or
proposed to be made by the Master Servicer or Subservicer in
respect of a Mortgage Loan (other than a Deleted Mortgage Loan)
which, in the good faith judgment of the Master Servicer, will not,
or, in the case of a proposed Advance, would not, be ultimately
recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds or REO Proceeds. To the
extent that any Mortgagor is not obligated under the related
Mortgage documents to pay or reimburse any portion of any Servicing
Advances that are outstanding with respect to the related Mortgage
Loan as a result of a modification of such Mortgage Loan by the
Master Servicer, which forgives amounts which the Master Servicer
or Subservicer had previously advanced, and the Master Servicer
determines that no other source of payment or reimbursement for
such advances is available to it, such Servicing Advances shall be
deemed to be Nonrecoverable Advances. The determination by the
Master Servicer that it has made a Nonrecoverable Advance shall be
evidenced by a certificate of a Servicing Officer, Responsible
Officer or Vice President or its equivalent or senior officer of
the Master Servicer, delivered to the Depositor, the Trustee, and
the Master Servicer setting forth such determination, which shall
include any other information or reports obtained by the Master
Servicer such as property operating statements, rent rolls,
property inspection reports and engineering reports, which may
support such determinations. Notwithstanding the above, the Trustee
shall be entitled to rely upon any determination by the Master
Servicer that any Advance previously made is a Nonrecoverable
Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance.
Nonsubserviced Mortgage Loan : Any Mortgage Loan that, at
the time of reference thereto, is not subject to a Subservicing
Agreement.
Note Margin : With respect to each adjustable-rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note
and indicated on the Mortgage Loan Schedule as the “NOTE
MARGIN,” which percentage is added to the Index on each
Adjustment Date to determine (subject to rounding in accordance
with the related Mortgage Note, the Periodic Cap, the Maximum
Mortgage Rate and the Minimum Mortgage Rate) the interest rate to
be borne by such Mortgage Loan until the next Adjustment
Date.
Notional Amount : With respect to the Class SB
Certificates or the REMIC II Regular Interest SB-IO,
immediately prior to any Distribution Date, the aggregate of the
Uncertificated Principal Balances of the REMIC I Regular
Interests.
Officers’ Certificate : A certificate signed by the
Chairman of the Board, the President, a Vice President, Assistant
Vice President, Director, Managing Director, the Treasurer, the
Secretary, an Assistant Treasurer or an Assistant Secretary of the
Depositor or the Master Servicer, as the case may be, and delivered
to the Trustee, as required by this Agreement.
Opinion of Counsel : A written opinion of counsel acceptable
to the Trustee and the Master Servicer and which counsel may be
counsel for the Depositor or the Master Servicer, provided that any
opinion of counsel (i) referred to in the definition of
“Disqualified Organization” or (ii) relating to the
qualification of any REMIC hereunder as a REMIC or compliance with
the REMIC Provisions must, unless otherwise specified, be an
opinion of Independent counsel.
Optional Termination Date : Any Distribution Date on or
after which the Stated Principal Balance (after giving effect to
distributions to be made on such Distribution Date) of the Mortgage
Loans is less than 10.00% of the Cut-off Date Balance.
Outstanding Mortgage Loan : With respect to the Due Date in
any Due Period, a Mortgage Loan (including an REO Property) that
was not the subject of a Principal Prepayment in Full, Cash
Liquidation or REO Disposition and that was not purchased, deleted
or substituted for prior to such Due Date pursuant to
Section 2.02, 2.03, 2.04 or 4.07.
Overcollateralization Amount : With respect to any
Distribution Date, the excess, if any, of (a) the aggregate
Stated Principal Balance of the Mortgage Loans before giving effect
to distributions of principal to be made on such Distribution Date
over (b) the aggregate Certificate Principal Balance of the
Class A Certificates, Class M Certificates and
Class B Certificates immediately prior to such
date.
Overcollateralization Floor : An amount equal to the product
of 0.50% and the Cut-off Date Balance.
Overcollateralization Increase Amount : With respect to any
Distribution Date, the lesser of (a) Excess Cash Flow for that
Distribution Date (to the extent not used to cover the amounts
described in clauses (b)(iv) and (b)(v) of the definition of
Principal Distribution Amount as of such Distribution Date) and (b)
the excess of (1) the Required Overcollateralization Amount for
such Distribution Date over (2) the Overcollateralization
Amount for such Distribution Date.
Overcollateralization Reduction Amount : With respect to any
Distribution Date on which the Excess Overcollateralization Amount
is, after taking into account all other distributions to be made on
such Distribution Date, greater than zero, the
Overcollateralization Reduction Amount shall be equal to the lesser
of (i) the Excess Overcollateralization Amount for that
Distribution Date and (ii) the Principal Remittance Amount on such
Distribution Date.
Ownership Interest : With respect to any Certificate, any
ownership or security interest in such Certificate, including any
interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial,
as owner or as pledgee.
Pass-Through Rate : With respect to each Class of
Class A Certificates, Class M Certificates and
Class B Certificates and any Distribution Date, the lesser of
(i) a per annum rate equal to LIBOR plus the related Margin for
such Distribution Date and (ii) the Net WAC Cap Rate for such
Distribution Date.
With
respect to the Class SB Certificates or the REMIC II Regular
Interest SB-IO, a per annum rate equal to the percentage equivalent
of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (i) through (iii) below, and the
denominator of which is the aggregate principal balance of the
REMIC I Regular Interests. For purposes of calculating the
Pass-Through Rate for the Class SB Certificates or the REMIC
II Regular Interest SB-IO, the numerator is equal to the sum of the
following components:
|
|
(i)
the Uncertificated Pass-Through Rate for REMIC I Regular Interest
LT1 minus the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT1;
|
|
|
(ii)
the Uncertificated Pass-Through Rate for REMIC I Regular Interest
LT2 minus the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT2; and
|
|
|
(iii)
the Uncertificated Pass-Through Rate for REMIC I Regular Interest
LT4 minus twice the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC I
Regular Interest LT4.
|
Paying Agent: U.S. Bank National Association or any successor
Paying Agent appointed by the Trustee.
Percentage Interest : With respect to any Class A
Certificate, Class M Certificate or Class B Certificate,
the undivided percentage ownership interest in the related Class
evidenced by such Certificate, which percentage ownership interest
shall be equal to the Initial Certificate Principal Balance thereof
divided by the aggregate Initial Certificate Principal Balance of
all of the Certificates of the same Class. The Percentage Interest
with respect to a Class SB Certificate or Class R
Certificate shall be stated on the face thereof.
Periodic Cap : With respect to each adjustable-rate Mortgage
Loan, the periodic rate cap that limits the increase or the
decrease of the related Mortgage Rate on any Adjustment Date
pursuant to the terms of the related Mortgage Note.
Permitted Investments: One or more of the
following:
|
|
(i)
|
obligations of
or guaranteed as to principal and interest by the United States or
any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United
States;
|
|
|
(ii)
|
repurchase
agreements on obligations specified in clause (i) maturing not more
than one month from the date of acquisition thereof, provided that
the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in its
highest short-term rating available;
|
|
|
(iii)
|
federal funds,
certificates of deposit, demand deposits, time deposits and
bankers’ acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of
bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than
30 days) denominated in United States dollars of any U.S.
depository institution or trust company incorporated under the laws
of the United States or any state thereof or of any domestic branch
of a foreign depository institution or trust company; provided that
the debt obligations of such depository institution or trust
company at the date of acquisition thereof have been rated by each
Rating Agency in its highest short-term rating available; and,
provided further that, if the original maturity of such short-term
obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term
rating of such institution shall be A-1+ in the case of Standard
& Poor’s if Standard & Poor’s is a Rating
Agency;
|
|
|
(iv)
|
commercial
paper and demand notes (having original maturities of not more than
365 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in its highest
short term rating available; provided that such commercial paper
and demand notes shall have a remaining maturity of not more than
30 days;
|
|
|
(v)
|
a money market
fund or a qualified investment fund rated by each Rating Agency in
its highest long-term rating available (which may be managed by the
Trustee or one of its Affiliates); and
|
|
|
(vi)
|
other
obligations or securities that are acceptable to each Rating Agency
as a Permitted Investment hereunder and will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below
the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency, as
evidenced in writing;
|
provided, however
, that no instrument shall be a
Permitted Investment if it represents, either (1) the right to
receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest
payments derived from obligations underlying such instrument and
the principal and interest payments with respect to such instrument
provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations. References herein
to the highest rating available on unsecured long-term debt shall
mean AAA in the case of Standard & Poor’s and Fitch and
Aaa in the case of Moody’s, and for purposes of this
Agreement, any references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall
mean the following: A-1 in the case of Standard & Poor’s,
P-1 in the case of Moody’s and F-1 in the case of Fitch;
provided, however, that any Permitted Investment that is a
short-term debt obligation rated A-1 by Standard & Poor’s
must satisfy the following additional conditions: (i) the total
amount of debt from A-1 issuers must be limited to the investment
of monthly principal and interest payments (assuming fully
amortizing collateral); (ii) the total amount of A-1 investments
must not represent more than 20% of the aggregate outstanding
Certificate Principal Balance of the Certificates and each
investment must not mature beyond 30 days; (iii) the terms of
the debt must have a predetermined fixed dollar amount of principal
due at maturity that cannot vary; and (iv) if the investments may
be liquidated prior to their maturity or are being relied on to
meet a certain yield, interest must be tied to a single interest
rate index plus a single fixed spread (if any) and must move
proportionately with that index. Any Permitted Investment may be
purchased by or through the Trustee or its Affiliates.
Permitted Transferee : Any Transferee of a Class R
Certificate, other than a Disqualified Organization or Non-United
States Person.
Person : Any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Prepayment Assumption : With respect to the Class A,
Class M and Class B Certificates, the prepayment
assumption to be used for determining the accrual of original issue
discount and premium and market discount on such Certificates for
federal income tax purposes, which (a) with respect to the
fixed-rate Mortgage Loans, assumes a constant prepayment rate of
one-tenth of 23% per annum of the then outstanding Stated Principal
Balance of the fixed-rate Mortgage Loans in the first month of the
life of such Mortgage Loans and an additional one-tenth of 23% per
annum in each month thereafter until the tenth month, and beginning
in the tenth month and in each month thereafter during the life of
the fixed-rate Mortgage Loans, a constant prepayment rate of 23%
per annum each month (“23% HEP”) and (b) with respect
to the adjustable-rate Mortgage Loans assumes a prepayment
assumption of 2% of the constant prepayment rate in month one,
increasing by approximately 2.545% from month 2 until
month 12, a constant prepayment rate of 30% from month 12 to
month 22, a constant prepayment rate of 50% from month 23 to month
27, and a constant prepayment rate of 35% thereafter, used for
determining the accrual of original issue discount and premium and
market discount on the Class A, Class M and Class B
Certificates for federal income tax purposes. The constant
prepayment rate assumes that the stated percentage of the
outstanding Stated Principal Balance of the adjustable-rate
Mortgage Loans is prepaid over the course of a year.
Prepayment Interest Shortfall : With respect to any
Distribution Date and any Mortgage Loan (other than a Mortgage Loan
relating to an REO Property) that was the subject of (a) a
Principal Prepayment in Full during the related Prepayment Period,
an amount equal to the excess of one month’s interest at the
related Net Mortgage Rate (or Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan) on the Stated Principal Balance
of such Mortgage Loan over the amount of interest (adjusted to the
related Net Mortgage Rate (or Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan)) paid by the Mortgagor for such
Prepayment Period to the date of such Principal Prepayment in Full
or (b) a Curtailment during the prior calendar month, an amount
equal to one month’s interest at the related Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) on the amount of such Curtailment.
Prepayment Period : With respect to any Distribution Date,
the calendar month preceding the month of distribution.
Primary Insurance Policy : Each primary policy of mortgage
guaranty insurance as indicated by a numeric code on the Mortgage
Loan Schedule with the exception of code “A23,”
“A34” or “A96” under the column “MI
CO CODE.”
Principal Distribution Amount : With respect to any
Distribution Date, the lesser of (a) the excess of (x) the
Available Distribution Amount over (y) the Interest Distribution
Amount, and (b) the sum of:
|
|
(i)
|
the principal
portion of each Monthly Payment received or Advanced with respect
to the related Due Period on each Outstanding Mortgage
Loan;
|
|
|
(ii)
|
the Stated
Principal Balance of any Mortgage Loan repurchased during the
related Prepayment Period (or deemed to have been so repurchased in
accordance with Section 3.07(b)) pursuant to
Section 2.02, 2.03, 2.04 or 4.07 and the amount of any
shortfall deposited in the Custodial Account in connection with the
substitution of a Deleted Mortgage Loan pursuant to
Section 2.03 or 2.04 during the related Prepayment
Period;
|
|
|
(iii)
|
the principal
portion of all other unscheduled collections, other than Subsequent
Recoveries, on the Mortgage Loans (including, without limitation,
Principal Prepayments in Full, Curtailments, Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) received during the related
Prepayment Period (or deemed to have been so received) to the
extent applied by the Master Servicer as recoveries of principal of
the Mortgage Loans pursuant to Section 3.14;
|
|
|
(iv)
|
the lesser of
(1) the Subsequent Recoveries for such Distribution Date and (2)
the principal portion of any Realized Losses allocated to any Class
of Certificates on a prior Distribution Date and remaining
unpaid;
|
|
|
(v)
|
the lesser of
(1) the Excess Cash Flow for such Distribution Date (to the extent
not used pursuant to clause (iv) of this definition on such
Distribution Date) and (2) the principal portion of any Realized
Losses incurred (or deemed to have been incurred) on any Mortgage
Loans in the calendar month preceding such Distribution;
and
|
|
|
(vi)
|
the lesser of
(1) the Excess Cash Flow for that Distribution Date (to the extent
not used pursuant to clauses (iv) and (v) of this definition on
such Distribution Date) and (2) the Overcollateralization Increase
Amount for such Distribution Date;
|
minus
|
|
(vii)
|
(A) the amount
of any Overcollateralization Reduction Amount for such Distribution
Date and (B) the amount of any Capitalization Reimbursement Amount
for such Distribution Date.
|
Principal Prepayment : Any payment of principal or other
recovery on a Mortgage Loan, including a recovery that takes the
form of Liquidation Proceeds or Insurance Proceeds, which is
received in advance of its scheduled Due Date and is not
accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or
months subsequent to the month of prepayment.
Principal Prepayment in Full : Any Principal Prepayment made
by a Mortgagor of the entire principal balance of a Mortgage
Loan.
Principal Remittance Amount : With respect to any
Distribution Date, all amounts described in clauses (b)(i) through
(iii) of the definition of Principal Distribution Amount for that
Distribution Date.
Program Guide : The AlterNet Seller Guide as incorporated
into the Residential Funding Seller Guide for mortgage collateral
sellers that participate in Residential Funding’s AlterNet
Mortgage Program, and Residential Funding’s Servicing Guide
and any other subservicing arrangements which Residential Funding
has arranged to accommodate the servicing of the Mortgage Loans and
in each case all supplements and amendments thereto published by
Residential Funding.
Purchase Price : With respect to any Mortgage Loan (or REO
Property) required to be or otherwise purchased on any date
pursuant to Section 2.02, 2.03, 2.04 or 4.07, an amount equal
to the sum of (i) 100% of the Stated Principal Balance thereof plus
the principal portion of any related unreimbursed Advances and (ii)
unpaid accrued interest at either (a) the Adjusted Mortgage Rate
(or Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) plus the rate per annum at which the Servicing Fee is
calculated, or (b) in the case of a purchase made by the Master
Servicer, at the Net Mortgage Rate (or Modified Net Mortgage Rate
in the case of a Modified Mortgage Loan), in each case on the
Stated Principal Balance thereof to the first day of the month
following the month of purchase from the Due Date to which interest
was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan : A Mortgage Loan
substituted by Residential Funding or the Depositor for a Deleted
Mortgage Loan which must, on the date of such substitution, as
confirmed in an Officers’ Certificate delivered to the
Trustee, (i) have an outstanding principal balance, after deduction
of the principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding
principal balance, after such deduction), not in excess of the
Stated Principal Balance of the Deleted Mortgage Loan (the amount
of any shortfall to be deposited by Residential Funding, in the
Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more
than 1% per annum higher than the Mortgage Rate and Net Mortgage
Rate, respectively, of the Deleted Mortgage Loan as of the date of
substitution; (iii) have a Loan-to-Value Ratio at the time of
substitution no higher than that of the Deleted Mortgage Loan at
the time of substitution; (iv) have a remaining term to stated
maturity not greater than (and not more than one year less than)
that of the Deleted Mortgage Loan; (v) comply with each
representation and warranty set forth in Sections 2.03 and 2.04
hereof and Section 4 of the Assignment Agreement (other than
the representations and warranties set forth therein with respect
to the number of loans (including the related percentage) in excess
of zero which meet or do not meet a specified criteria); (vi) not
be 30 days or more Delinquent; (vii) not be subject to the
requirements of HOEPA (as defined in the Assignment Agreement);
(viii) have a policy of title insurance, in the form and amount
that is in material compliance with the Program Guide, that was
effective as of the closing of such Mortgage Loan, is valid and
binding, and remains in full force and effect, unless the Mortgage
Property is located in the State of Iowa where an attorney’s
certificate has been provided as described in the Program Guide;
(ix) if the Deleted Loan is not a Balloon Loan, not be a Balloon
Loan; (x) have a Mortgage Rate that adjusts with the same frequency
and based upon the same Index as that of the Deleted Mortgage Loan;
(xi) have a Note Margin not less than that of the Deleted Mortgage
Loan; (xii) have a Periodic Rate Cap that is equal to that of the
Deleted Mortgage Loan; and (xiii) have a next Adjustment Date no
later than that of the Deleted Mortgage Loan.
Rating Agency : Each of Standard & Poor’s and
Moody’s. If any agency or a successor is no longer in
existence, “Rating Agency” shall be such statistical
credit rating agency, or other comparable Person, designated by the
Depositor, notice of which designation shall be given to the
Trustee and the Master Servicer.
Realized Loss : With respect to each Mortgage Loan (or REO
Property) as to which a Cash Liquidation or REO Disposition has
occurred, an amount (not less than zero) equal to (i) the Stated
Principal Balance of the Mortgage Loan (or REO Property) as of the
date of Cash Liquidation or REO Disposition, plus (ii) interest
(and REO Imputed Interest, if any) at the Net Mortgage Rate from
the Due Date as to which interest was last paid or advanced to
Certificateholders up to the last day of the month in which the
Cash Liquidation (or REO Disposition) occurred on the Stated
Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid
or advanced, minus (iii) the proceeds, if any, received during the
month in which such Cash Liquidation (or REO Disposition) occurred,
to the extent applied as recoveries of interest at the Net Mortgage
Rate and to principal of the Mortgage Loan, net of the portion
thereof reimbursable to the Master Servicer or any Subservicer with
respect to related Advances, Servicing Advances or other expenses
as to which the Master Servicer or Subservicer is entitled to
reimbursement thereunder but which have not been previously
reimbursed. With respect to each Mortgage Loan which is the subject
of a Servicing Modification, (a) (1) the amount by which the
interest portion of a Monthly Payment or the principal balance of
such Mortgage Loan was reduced or (2) the sum of any other amounts
owing under the Mortgage Loan that were forgiven and that
constitute Servicing Advances that are reimbursable to the Master
Servicer or a Subservicer, and (b) any such amount with respect to
a Monthly Payment that was or would have been due in the month
immediately following the month in which a Principal Prepayment or
the Purchase Price of such Mortgage Loan is received or is deemed
to have been received. With respect to each Mortgage Loan which has
become the subject of a Deficient Valuation, the difference between
the principal balance of the Mortgage Loan outstanding immediately
prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the object of a Debt Service
Reduction, the amount of such Debt Service Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt
Service Reduction shall be deemed a Realized Loss hereunder so long
as the Master Servicer has notified the Trustee in writing that the
Master Servicer is diligently pursuing any remedies that may exist
in connection with the representations and warranties made
regarding the related Mortgage Loan and either (A) the related
Mortgage Loan is not in default with regard to payments due
thereunder or (B) delinquent payments of principal and interest
under the related Mortgage Loan and any premiums on any applicable
primary hazard insurance policy and any related escrow payments in
respect of such Mortgage Loan are being advanced on a current basis
by the Master Servicer or a Subservicer, in either case without
giving effect to any Debt Service Reduction.
Realized
Losses allocated to the Class SB Certificates shall be
allocated first to the REMIC II Regular Interest SB-IO in
reduction of the accrued but unpaid interest thereon until such
accrued and unpaid interest shall have been reduced to zero and
then to the REMIC II Regular Interest SB-PO in reduction of
the Principal Balance thereof.
To
the extent the Master Servicer receives Subsequent Recoveries with
respect to any Mortgage Loan, the amount of the Realized Loss with
respect to that Mortgage Loan will be reduced to the extent such
recoveries are applied to reduce the Certificate Principal Balance
of any Class of Certificates on any Distribution Date.
Record Date : With respect to each Distribution Date and the
LIBOR Certificates, the Business Day immediately preceding such
Distribution Date. With respect to each Distribution Date and the
Certificates (other than the LIBOR Certificates), the close of
business on the last Business Day of the month next preceding the
month in which the related Distribution Date occurs, except in the
case of the first Record Date which shall be the Closing
Date.
Reference Bank Rate: As defined in Section
1.02.
Regular
Certificates: The Class A Certificates, Class M
Certificates, Class B Certificates and
Class SB
Certificates.
Relief Act: The Servicemembers Civil Relief
Act, formerly known as the Soldiers' and Sailors' Civil Relief Act
of 1940. Relief Act Shortfalls: Interest shortfalls on the Mortgage
Loans resulting from the Relief Act or similar legislation or
regulations.
REMIC : A “real estate mortgage investment
conduit” within the meaning of Section 860D of the Code. As
used herein, the term “REMIC” shall mean REMIC I or
REMIC II.
REMIC I : The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and to
be administered hereunder, exclusive of the Hedge Agreement, which
are not assets of any REMIC, with respect to which a separate REMIC
election is to be made, consisting of:
|
|
(i)
the Mortgage Loans and the related Mortgage Files;
|
|
|
(ii)
all payments on and collections in respect of the Mortgage Loans
due after the Cut-off Date (other than Monthly Payments due in the
month of the Cut-off Date) as shall be on deposit in the Custodial
Account or in the Certificate Account and identified as belonging
to the Trust Fund;
|
|
|
(iii)
property which secured a Mortgage Loan and which has been acquired
for the benefit of the Certificateholders by foreclosure or deed in
lieu of foreclosure;
|
|
|
(iv)
the hazard insurance policies and Primary Insurance Policies
pertaining to the Mortgage Loans, if any; and
|
|
|
(v)
all proceeds of clauses (i) through (iv) above.
|
REMIC I Distribution Amount : For any Distribution
Date, the Available Distribution Amount shall be distributed to the
REMIC I Regular Interests and the Class R-I Certificates in
the following amounts and priority:
(i)
to the extent of the Available Distribution Amount, to REMIC II as
the holder of REMIC I Regular Interests LT1, LT2, LT3 and LT4, pro
rata, in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates;
and
(ii)
to the extent of the Available Distribution Amount remaining after
the distributions made pursuant to clause (i) above, to REMIC II as
the holder of the REMIC I Regular Interests, in an amount equal
to:
(A)
in respect of the REMIC I Regular Interests LT2, LT3 and LT4, their
respective
Principal Distribution
Amounts;
(B)
in respect of the REMIC I Regular Interest LT1 any remainder until
the Uncertificated Principal Balance thereof is reduced to
zero;
(C)
any remainder in respect of the REMIC I Regular Interests LT2, LT3
and LT4, pro rata according to their respective Uncertificated
Principal Balances as reduced by the distributions deemed made
pursuant to (A) above, until their respective Uncertificated
Principal Balances are reduced to zero; and
(iii)
any remaining amounts to the Holders of the Class R-I
Certificates.
REMIC I Principal Reduction Amounts : For any
Distribution Date, the amounts by which the principal balances of
the REMIC I Regular Interests LT1, LT2, LT3 and LT4,
respectively, will be reduced on such Distribution Date by the
allocation of Realized Losses and the distribution of principal,
determined as follows:
For
purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y
1 = the aggregate principal balance of the REMIC I
Regular Interest LT1 after distributions on the prior Distribution
Date.
Y
2 = the principal balance of the REMIC I Regular
Interest LT2 after distributions on the prior Distribution
Date.
Y
3 = the principal balance of the REMIC I Regular
Interest LT3 after distributions on the prior Distribution
Date.
Y
4 = the principal balance of the REMIC I Regular
Interest LT4 after distributions on the prior Distribution Date
(note: Y 3 = Y 4 ).
ÄY
1 = the REMIC I Regular Interest LT1 Principal
Reduction Amount.
ÄY
2 = the REMIC I Regular Interest LT2 Principal
Reduction Amount.
ÄY
3 = the REMIC I Regular Interest LT3 Principal
Reduction Amount.
ÄY
4 = the REMIC I Regular Interest LT4 Principal
Reduction Amount.
P
0 = the aggregate principal balance of the REMIC I
Regular Interests LT1, LT2, LT3 and LT4 after distributions and the
allocation of Realized Losses on the prior Distribution
Date.
P
1 = the aggregate principal balance of the REMIC I
Regular Interests LT1, LT2, LT3 and LT4 after distributions and the
allocation of Realized Losses to be made on such Distribution
Date.
ÄP
= P 0 — P 1 = the aggregate of the
REMIC I Regular Interests LT1, LT2, LT3 and LT4 Principal
Reduction Amounts.
=the
aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made on, the
Certificates on such Distribution Date (including distributions of
accrued and unpaid interest on the Class SB Certificates for
prior Distribution Dates).
R
0 = the Net WAC Cap Rate (stated as a monthly rate)
after giving effect to amounts distributed and Realized Losses
allocated on the prior Distribution Date.
R
1 = the Net WAC Cap Rate (stated as a monthly rate)
after giving effect to amounts to be distributed and Realized
Losses to be allocated on such Distribution Date.
á
= (Y 2 + Y 3 )/P 0 . The initial
value of á on the Closing Date for use on the first
Distribution Date shall be 0.0001.
ã
0 = the lesser of (A) the sum for all Classes of
Certificates, other than the Class SB Certificates, of the
product for each Class of (i) the monthly interest rate (as limited
by the REMIC Net WAC Rate, if applicable) for such Class applicable
for distributions to be made on such Distribution Date and (ii) the
aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior
Distribution Date and (B) R 0 *P 0
.
ã
1 = the lesser of (A) the sum for all Classes of
Certificates, other than the Class SB Certificates, of the
product for each Class of (i) the monthly interest rate (as limited
by the REMIC Net WAC Cap Rate, if applicable) for such Class
applicable for distributions to be made on the next succeeding
Distribution Date and (ii) the aggregate Certificate Principal
Balance for such Class after distributions and the allocation of
Realized Losses to be made on such Distribution Date and (B) R
1 *P 1 .
Then,
based on the foregoing definitions:
AY1 = AP - AY2 - AY3 - AY4;
ÄY
2 = (á/2){( ã 0 R 1
— ã 1 R 0 )/R 0 R
1 };
AY3 = aAP - AY2; and
ÄY
4 = ÄY 3 .
if both AY2 and AY3, as so determined, are
non-negative numbers. Otherwise:
(1)
If ÄY 2 , as so determined, is negative,
then
ÄY
2 = 0;
ÄY
3 = á{ã 1 R 0 P
0 — ã 0 R 1 P
1 }/{ã 1 R 0
};
ÄY
4 = ÄY 3 ; and
ÄY
1 = ÄP — ÄY 2 — ÄY
3 — ÄY 4 .
(2)
If ÄY 3 , as so determined, is negative,
then
ÄY
3 = 0;
ÄY
2 = á{ã 1 R 0 P
0 — ã 0 R 1 P
1 }/{2R 1 R 0 P 1
— ã 1 R 0 };
ÄY
4 = ÄY 3 ; and
ÄY
1 = ÄP — ÄY 2 — ÄY
3 — ÄY 4 .
REMIC I Realized Losses : Realized Losses on the Mortgage
Loans shall be allocated to the REMIC I Regular Interests as
follows: The interest portion of Realized Losses on the Mortgage
Loans, if any, shall be allocated among the REMIC I Regular
Interests LT1, LT2 and LT4 pro rata according to the amount of
interest accrued but unpaid thereon, in reduction thereof. Any
interest portion of such Realized Losses in excess of the amount
allocated pursuant to the preceding sentence shall be treated as a
principal portion of Realized Losses not attributable to any
specific Mortgage Loan and allocated pursuant to the succeeding
sentences. The principal portion of Realized Losses on the Mortgage
Loans, if any, shall be allocated first, to the REMIC I Regular
Interests LT2, LT3 and LT4 pro rata according to their respective
Principal Reduction Amounts to the extent thereof in reduction of
the Uncertificated Principal Balance of such REMIC I Regular
Interests and, second, the remainder, if any, of such principal
portion of such Realized Losses shall be allocated to the REMIC I
Regular Interest LT1 in reduction of the Uncertificated Principal
Balance thereof.
REMIC I Regular Interests : REMIC I Regular
Interest LT1, REMIC II Regular Interest LT2, REMIC II
Regular Interest LT3 and REMIC II Regular Interest
LT4.
REMIC I Regular Interest LT1 : A regular interest in
REMIC I that is held as an asset of REMIC II, that has an
initial principal balance equal to the related Uncertificated
Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such
other terms as are described herein.
REMIC I Regular Interest LT1 Principal Distribution
Amount : For any Distribution Date, the excess, if any, of the
REMIC I Regular Interest LT1 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest LT1 on such Distribution
Date.
REMIC I Regular Interest LT2 : A regular interest in
REMIC I that is held as an asset of REMIC II, that has an
initial principal balance equal to the related Uncertificated
Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such
other terms as are described herein.
REMIC I Regular Interest LT2 Principal Distribution
Amount : For any Distribution Date, the excess, if any, of the
REMIC I Regular Interest LT2 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest LT2 on such Distribution
Date.
REMIC I Regular Interest LT3 : A regular interest in
REMIC II that is held as an asset of REMIC II, that has
an initial principal balance equal to the related Uncertificated
Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such
other terms as are described herein.
REMIC I Regular Interest LT3 Principal Distribution
Amount : For any Distribution Date, the excess, if any, of the
REMIC I Regular Interest LT3 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest LT3 on such Distribution
Date.
REMIC I Regular Interest LT4 : A regular interest in
REMIC II that is held as an asset of REMIC II, that has
an initial principal balance equal to the related Uncertificated
Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such
other terms as are described herein.
REMIC I Regular Interest LT4 Principal Distribution
Amount : For any Distribution Date, the excess, if any, of the
REMIC I Regular Interest LT4 Principal Reduction Amount for
such Distribution Date over the Realized Losses allocated to the
REMIC I Regular Interest LT4 on such Distribution
Date.
REMIC II : The segregated pool of assets subject
hereto, constituting a portion of the primary trust created hereby
and to be administered hereunder, with respect to which a separate
REMIC election is to be made, consisting of the REMIC I
Regular Interests.
REMIC II Regular Interest SB-PO : A separate
non-certificated beneficial ownership interest in REMIC II
issued hereunder and designated as a REMIC II Regular Interest.
REMIC II Regular Interest SB-PO shall have no entitlement to
interest, and shall be entitled to distributions of principal
subject to the terms and conditions hereof, in aggregate amount
equal to the initial Certificate Principal Balance of the
Class SB Certificates as set forth in the Preliminary
Statement hereto.
REMIC II Regular Interest SB-IO : A separate
non-certificated beneficial ownership interest in REMIC II
issued hereunder and designated as a REMIC II Regular Interest.
REMIC II Regular Interest SB-IO shall have no entitlement to
principal, and shall be entitled to distributions of interest
subject to the terms and conditions hereof, in aggregate amount
equal to the interest distributable with respect to the
Class SB Certificates pursuant to the terms and conditions
hereof.
REMIC II Regular Interests : REMIC II Regular
Interests SB-IO and SB-PO, together with the regular interests in
REMIC II represented by the Class A Certificates, Class M
Certificates and Class B Certificates exclusive of the rights
of such Certificates to payments of Basis Risk Shortfall Amounts
and to payments derived from the Hedge Agreement.
REMIC Administrator : Residential Funding Corporation. If
Residential Funding Corporation is found by a court of competent
jurisdiction to no longer be able to fulfill its obligations as
REMIC Administrator under this Agreement the Master Servicer or
Trustee acting as successor Master Servicer shall appoint a
successor REMIC Administrator, subject to assumption of the REMIC
Administrator obligations under this Agreement.
REMIC Interest Amount : For any Distribution Date and
each Class of Class A Certificates, Class M Certificates
and Class B Certificates, the Accrued Certificate Interest for
such Class reduced by the portion thereof attributable to the
excess, if any, of the related Pass-Through Rate for such
Distribution Date over the related REMIC Net WAC Cap Rate for such
Distribution Date.
REMIC Net WAC Cap Rate : For any Distribution Date, a per
annum rate equal to the product of (i) the weighted average of
the Net Mortgage Rates (or, if applicable, the Modified Net
Mortgage Rates) on the Mortgage Loans using the Net Mortgage Rates
in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the
respective Stated Principal Balances thereof for such Distribution
Date and (ii) a fraction equal to 30 divided by the actual number
of days in the related Interest Accrual Period.
REMIC Provisions : Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear
at Sections 860A through 860G of Subchapter M of Chapter 1 of
the Code, and related provisions, and temporary and final
regulations (or, to the extent not inconsistent with such temporary
or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing
may be in effect from time to time.
REO Acquisition : The acquisition by the Master Servicer on
behalf of the Trustee for the benefit of the Certificateholders of
any REO Property pursuant to Section 3.14.
REO Disposition : With respect to any REO Property, a
determination by the Master Servicer that it has received
substantially all Insurance Proceeds, Liquidation Proceeds, REO
Proceeds and other payments and recoveries (including proceeds of a
final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO
Property.
REO Imputed Interest : With respect to any REO Property, for
any period, an amount equivalent to interest (at a rate equal to
the Net Mortgage Rate that would have been applicable to the
related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of
acquisition thereof for such period.
REO Proceeds : Proceeds, net of expenses, received in
respect of any REO Property (including, without limitation,
proceeds from the rental of the related Mortgaged Property) which
proceeds are required to be deposited into the Custodial Account
only upon the related REO Disposition.
REO Property : A Mortgaged Property acquired by the Master
Servicer on behalf of the Trust Fund for the benefit of the
Certificateholders through foreclosure or deed in lieu of
foreclosure in connection with a defaulted Mortgage
Loan.
Reportable Modified Mortgage Loan : Any Mortgage Loan that
(a) has been subject to an interest rate reduction, (b) has been
subject to a term extension or (c) has had amounts owing on such
Mortgage Loan capitalized by adding such amount to the Stated
Principal Balance of such Mortgage Loan; provided ,
however , that a Mortgage Loan modified in accordance with
(a) above for a temporary period shall not be a Reportable Modified
Mortgage Loan if such Mortgage Loan has not been delinquent in
payments of principal and interest for six months since the date of
such modification if that interest rate reduction is not made
permanent thereafter.
Repurchase Event: As defined in the Assignment
Agreement.
Request for Release : A request for release, the form of
which is attached as Exhibit G hereto, or an electronic
request in a form acceptable to the Custodian.
Required Insurance Policy : With respect to any Mortgage
Loan, any insurance policy which is required to be maintained from
time to time under this Agreement, the Program Guide or the related
Subservicing Agreement in respect of such Mortgage Loan.
Required Overcollateralization Amount : With respect to any
Distribution Date, (a) prior to the Stepdown Date, an amount equal
to 0.80% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date, (b) on or after the Stepdown Date if
a Trigger Event is not in effect, the greater of (i) an amount
equal to 1.60% of the aggregate outstanding Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
made on that Distribution Date and (ii) the Overcollateralization
Floor and (c) on or after the Stepdown Date if a Trigger Event is
in effect, an amount equal to the Required Overcollateralization
Amount from the immediately preceding Distribution Date. The
Required Overcollateralization Amount may be reduced so long as
written confirmation is obtained from each Rating Agency that such
reduction shall not reduce the ratings assigned to any Class of
Certificates by such Rating Agency below the lower of the then
current rating or the rating assigned to such Certificates as of
the Closing Date by such Rating Agency.
Residential Funding : Residential Funding Corporation, a
Delaware corporation, in its capacity as seller of the Mortgage
Loans to the Depositor and any successor thereto.
Responsible Officer : When used with respect to the Trustee,
any officer of the Corporate Trust Department of the Trustee,
including any Senior Vice President, any Vice President, any
Assistant Vice President, any Assistant Secretary, any Trust
Officer or Assistant Trust Officer, or any other officer of the
Trustee, in each case, with direct responsibility for the
administration of this Agreement.
RFC
Exemption: As defined in Section 5.02(e)(ii).
Rule 144A : Rule 144A under the Securities Act of 1933, as
in effect from time to time.
Seller : With respect to any Mortgage Loan, a Person,
including any Subservicer, that executed a Seller’s Agreement
applicable to such Mortgage Loan.
Seller’s Agreement : An agreement for the origination
and sale of Mortgage Loans generally in the form of the seller
contract referred to or contained in the Program Guide, or in such
other form as has been approved by the Master Servicer and the
Depositor.
Senior Enhancement Percentage : For any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is
the sum of (i) the aggregate Certificate Principal Balance of the
Class M Certificates and Class B Certificates and (ii)
the Overcollateralization Amount, in each case prior to the
distribution of the Principal Distribution Amount on such
Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to distributions to be made on that Distribution Date.
Sequential Certificates: Collectively, the
Class A-1, Class A-2 and Class A-3 Certificates. Servicing
Accounts: The account or accounts created and maintained pursuant
to Section 3.08.
Servicing Advances : All customary, reasonable and necessary
“out of pocket” costs and expenses incurred in
connection with a default, delinquency or other unanticipated event
by the Master Servicer or a Subservicer in the performance of its
servicing obligations, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged
Property or, with respect to a cooperative loan, the related
cooperative apartment, (ii) any enforcement or judicial
proceedings, including foreclosures, including any expenses
incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS® System, (iii) the
management and liquidation of any REO Property, (iv) any mitigation
procedures implemented in accordance with Section 3.07, and
(v) compliance with the obligations under Sections 3.01, 3.08,
3.11, 3.12(a) and 3.14, including, if the Master Servicer or any
Affiliate of the Master Servicer provides services such as
appraisals and brokerage services that are customarily provided by
Persons other than servicers of mortgage loans, reasonable
compensation for such services.
Servicing Fee : With respect to any Mortgage Loan and
Distribution Date, the fee payable monthly to the Master Servicer
in respect of master servicing compensation that accrues at an
annual rate equal to the Servicing Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the related
Due Date in the related Due Period, as may be adjusted pursuant to
Section 3.16(e).
Servicing Fee Rate : With respect to any Mortgage Loan, the
per annum rate designated on the Mortgage Loan Schedule as the
“MSTR SERV FEE,” as may be adjusted with respect to
successor Master Servicers as provided in Section 7.02, which
rate shall never be greater than the Mortgage Rate of such Mortgage
Loan.
Servicing Modification : Any reduction of the interest rate
on or the outstanding principal balance of a Mortgage Loan, any
extension of the final maturity date of a Mortgage Loan, and any
increase to the Stated Principal Balance of a Mortgage Loan by
adding to the Stated Principal Balance unpaid principal and
interest and other amounts owing under the Mortgage Loan, in each
case pursuant to a modification of a Mortgage Loan that is in
default, or for which, in the judgment of the Master Servicer,
default is reasonably foreseeable in accordance with
Section 3.07(a).
Servicing Officer : Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing
of the Mortgage Loans whose name and specimen signature appear on a
list of servicing officers furnished to the Trustee by the Master
Servicer on the Closing Date, as such list may from time to time be
amended.
Sixty-Plus Delinquency Percentage : With respect to any
Distribution Date and the Mortgage Loans, the arithmetic average,
for each of the three Distribution Dates ending with such
Distribution Date, of the fraction, expressed as a percentage,
equal to (x) the aggregate Stated Principal Balance of the Mortgage
Loans that are 60 or more days delinquent in payment of principal
and interest for that Distribution Date, including Mortgage Loans
in foreclosure and REO, over (y) the aggregate Stated Principal
Balance of all of the Mortgage Loans immediately preceding that
Distribution Date.
Standard & Poor's: Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. or
its successors in interest. Startup Date: The day designated as
such pursuant to Article X hereof.
Stated Principal Balance : With respect to any Mortgage Loan
or related REO Property, at any given time, (i) the sum of (a) the
Cut-off Date Principal Balance of the Mortgage Loan and (b) any
amount by which the Stated Principal Balance of the Mortgage Loan
has been increased pursuant to a Servicing Modification, minus (ii)
the sum of (a) the principal portion of the Monthly Payments due
with respect to such Mortgage Loan or REO Property during each Due
Period ending with the Due Period relating to the most recent
Distribution Date which were received or with respect to which an
Advance was made, (b) all Principal Prepayments with respect to
such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the
Master Servicer as recoveries of principal in accordance with
Section 3.14 with respect to such Mortgage Loan or REO
Property, in each case which were distributed pursuant to
Section 4.02 on any previous Distribution Date, and (c) any
Realized Loss incurred with respect to such Mortgage Loan allocated
to Certificateholders with respect thereto for any previous
Distribution Date.
Stepdown Date : That Distribution Date which is the earlier
to occur of (a) the Distribution Date immediately succeeding the
Distribution Date on which the aggregate Certificate Principal
Balance of the Class A Certificates has been reduced to zero
and (b) the later to occur of (i) the Distribution Date in
May 2008 and (ii) the first Distribution Date on which the
Senior Enhancement Percentage is equal to or greater than
40.00%.
Subordinate Hedge Agreement : The confirmation, dated as of
the Closing Date, between the Trustee, on behalf of the Trust Fund,
and the Hedge Agreements Provider, relating to the Class M
Certificates, Class B Certificates and Class SB
Certificates or any replacement, substitute, collateral or other
arrangement in lieu thereof.
Subordinate Hedge Payment : For any Distribution Date, the
payment, if any, due under the Subordinate Hedge Agreement in
respect of such Distribution Date.
Subordinate Net WAC Cap Rate : With respect to the
Class M Certificates and Class B Certificates and any
Distribution Date, the sum of (a) the REMIC Net WAC Cap Rate
and (b) a per annum rate equal to (i) the Subordinate Hedge
Payment, if any, with respect to such Distribution Date, divided by
(ii) the aggregate Certificate Principal Balance of the
Class M Certificates and Class B Certificates immediately
prior to such Distribution Date.
Subordination: The provisions described in
Section 4.05 relating to the allocation of Realized Losses.
Subordination Percentage: With respect to each Class of Class A
Certificates, Class M Certificates and Class B Certificates, the
respective percentage set forth below.
Class Percentage
A 60.00% M-1 70.10% M-2 78.50% M-3 82.30% M-4
85.00% M-5 88.40% M-6 90.50% M-7 93.00% B-1 95.80% B-2 98.40%
Subsequent Recoveries : As of any Distribution Date, amounts
received by the Master Servicer (net of any related expenses
permitted to be reimbursed pursuant to Section 3.10) or
surplus amounts held by the Master Servicer to cover estimated
expenses (including, but not limited to, recoveries in respect of
the representations and warranties made by the related Seller
pursuant to the applicable Seller’s Agreement and assigned to
the Trustee pursuant to Section 2.04) specifically related to
a Mortgage Loan that was the subject of a Cash Liquidation or an
REO Disposition prior to the related Prepayment Period and that
resulted in a Realized Loss.
Subserviced Mortgage Loan : Any Mortgage Loan that, at the
time of reference thereto, is subject to a Subservicing
Agreement.
Subservicer : Any Person with whom the Master Servicer has
entered into a Subservicing Agreement and who generally satisfied
the requirements set forth in the Program Guide in respect of the
qualification of a Subservicer as of the date of its approval as a
Subservicer by the Master Servicer.
Subservicer Advance : Any delinquent installment of
principal and interest on a Mortgage Loan which is advanced by the
related Subservicer (net of its Subservicing Fee) pursuant to the
Subservicing Agreement.
Subservicing Account: An account established
by a Subservicer in accordance with Section 3.08.
Subservicing Agreement : The written contract between the
Master Servicer and any Subservicer relating to servicing and
administration of certain Mortgage Loans as provided in
Section 3.02, generally in the form of the servicer contract
referred to or contained in the Program Guide or in such other form
as has been approved by the Master Servicer and the
Depositor.
Subservicing Fee : With respect to any Mortgage Loan, the
fee payable monthly to the related Subservicer (or, in the case of
a Nonsubserviced Mortgage Loan, to the Master Servicer) in respect
of subservicing and other compensation that accrues with respect to
each Distribution Date at an annual rate designated as
“SUBSERV FEE” on the Mortgage Loan Schedule.
Tax Returns : The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment
Conduit Income Tax Return, including Schedule Q thereto, Quarterly
Notice to Residual Interest Holders of REMIC Taxable Income or Net
Loss Allocation, or any successor forms, to be filed on behalf of
any REMIC hereunder due to its classification as a REMIC under
the REMIC Provisions, together with any and all other information,
reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or
any other governmental taxing authority under any applicable
provisions of federal, state or local tax laws.
Telerate Screen Page 3750: As defined in
Section 1.02. Transfer: Any direct or indirect transfer, sale,
pledge, hypothecation or other form of assignment of any Ownership
Interest in a Certificate.
Transfer Affidavit and Agreement : As defined in Section
5.02(e).
Transferee: Any Person who is acquiring by
Transfer any Ownership Interest in a Certificate. Transferor: Any
Person who is disposing by Transfer of any Ownership Interest in a
Certificate.
Trigger Event : A Trigger Event is in effect with respect to
any Distribution Date on or after the Stepdown Date if either (a)
the product of 2.50 and the Sixty-Plus Delinquency Percentage, as
determined on that Distribution Date, equals or exceeds the Senior
Enhancement Percentage for that Distribution Date or (b) on or
after the Distribution Date in May 2007, the aggregate amount
of Realized Losses on the Mortgage Loans as a percentage of the
Cut-Off Date Balance exceeds the applicable amount set forth
below:
May 2007 to April 2008:
1.50% with respect to
May 2007,
plus an
additional
1/12th of
1.50% for each month thereafter.
May 2008 to April 2009:
3.00% with
respect to May 2008,
plus an
additional
1/12th of
1.75% for each month thereafter.
May 2009 to April 2010:
4.75% with
respect to May 2009,
plus an
additional
1/12th of
1.25% for each month thereafter.
May 2010 to April 2011:
6.00% with
respect to May 2010,
plus an
additional
1/12th of
0.75% for each month thereafter.
May 2011 and thereafter:
6.75%.
Trustee: As defined in the preamble
hereto.
Trust Fund : The segregated pool of assets subject hereto,
consisting of: (i) the Mortgage Loans and the related Mortgage
Files; (ii) all payments on and collections in respect of the
Mortgage Loans due after the Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date) as shall be on
deposit in the Custodial Account or in the Certificate Account and
identified as belonging to the Trust Fund; (iii) property
which secured a Mortgage Loan and which has been acquired for the
benefit of the Certificateholders by foreclosure or deed in lieu of
foreclosure; (iv) the hazard insurance policies and Primary
Insurance Policies pertaining to the Mortgage Loans, if any; and
(v) all proceeds of clauses (i) through (iv)
above.
Uncertificated Accrued Interest : With respect to any REMIC
I Regular Interest for any Distribution Date, one month’s
interest at the related Uncertificated REMIC I Pass-Through Rate
for such Distribution Date, accrued on its Uncertificated Principal
Balance immediately prior to such Distribution Date. Uncertificated
Accrued Interest for the REMIC I Regular Interests shall accrue on
the basis of a 360-day year consisting of twelve 30-day months. For
purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution
Date, any Prepayment Interest Shortfalls and Relief Act Shortfalls
(to the extent not covered by Compensating Interest) relating to
the Mortgage Loans for any Distribution Date shall be allocated
among REMIC I Regular Interests LT1, LT2, LT3 and LT4 pro rata,
based on, and to the extent of, Uncertificated Accrued Interest, as
calculated without application of this sentence. Uncertificated
Accrued Interest on REMIC II Regular Interest SB-PO shall be zero.
Uncertificated Accrued Interest on REMIC II Regular
Interest SB-IO for each Distribution Date shall equal Accrued
Certificate Interest for the Class SB Certificates.
Uncertificated Principal Balance : The principal amount of
any REMIC I Regular Interest outstanding as of any date of
determination. The Uncertificated Principal Balance of each REMIC I
Regular Interest shall never be less than zero. With respect to the
REMIC II Regular Interest SB-PO the initial amount set forth with
respect thereto in the Preliminary Statement as reduced by
distributions deemed made in respect thereof pursuant to
Section 4.02 and Realized Losses allocated thereto pursuant to
Section 4.05.
Uncertificated REMIC I Pass-Through Rate : With respect to
any Distribution Date and (i) REMIC I Regular Interests LT1
and LT2, the weighted average of the Net Mortgage Rates of the
Mortgage Loans, (ii) REMIC I Regular Interest LT3, zero (0.00%),
and (iii) REMIC I Regular Interest LT4, twice the weighted average
of the Net Mortgage Rates of the Mortgage Loans.
Uniform Single Attestation Program for Mortgage Bankers :
The Uniform Single Attestation Program for Mortgage Bankers, as
published by the Mortgage Bankers Association of America and
effective with respect to fiscal periods ending on or after
December 15, 1995.
Uninsured Cause : Any cause of damage to property subject to
a Mortgage such that the complete restoration of such property is
not fully reimbursable by the hazard insurance policies.
United States Person : A citizen or resident of the United
States, a corporation, partnership or other entity (treated as a
corporation or partnership for United States federal income tax
purposes) created or organized in, or under the laws of, the United
States, any state thereof, or the District of Columbia (except in
the case of a partnership, to the extent provided in Treasury
regulations) provided that, for purposes solely of the
restrictions on the transfer of Class R Certificates, no
partnership or other entity treated as a partnership for United
States federal income tax purposes shall be treated as a United
States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a
corporation for United States federal income tax purposes are
required by the applicable operative agreement to be United States
Persons, or an estate that is described in
Section 7701(a)(30)(D) of the Code, or a trust that is
described in Section 7701(a)(30)(E) of the Code.
Voting Rights : The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. 98.00% of
all of the Voting Rights shall be allocated among Holders of the
Class A Certificates, Class M Certificates and
Class B Certificates, in proportion to the outstanding
Certificate Principal Balances of their respective Certificates; 1%
of all of the Voting Rights shall be allocated to the Holders of
the Class SB Certificates; and 0.50% of all of the Voting
Rights shall be allocated to each of the Holders of the
Class R-I Certificates and the Class R-II Certificates;
in each case to be allocated among the Certificates of such Class
in accordance with their respective Percentage
Interests.
Weighted Average Maximum Net Mortgage Rate : For any
Distribution Date, the weighted average of the Maximum Net Mortgage
Rates of the adjustable-rate Mortgage Loans, or Net Mortgage Rates
in the case of the fixed-rate Mortgage Loans, multiplied by a
fraction equal to 30 divided by the actual number of days in the
related Interest Accrual Period.
Section 1.02. Determination of
LIBOR .
LIBOR
applicable to the calculation of the Pass-Through Rate on the LIBOR
Certificates for any Interest Accrual Period will be determined as
of each LIBOR Rate Adjustment Date. On each LIBOR Rate Adjustment
Date, or if such LIBOR Rate Adjustment Date is not a Business Day,
then on the next succeeding Business Day, LIBOR shall be
established by the Trustee and, as to any Interest Accrual Period,
will equal the rate for one month United States dollar deposits
that appears on the Telerate Screen Page 3750 as of 11:00 a.m.,
London time, on such LIBOR Rate Adjustment Date. “Telerate
Screen Page 3750” means the display designated as page
3750 on the Bridge Telerate Service (or such other page as may
replace page 3750 on that service for the purpose of displaying
London interbank offered rates of major banks). If such rate does
not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered,
LIBOR shall be so established by use of such other service for
displaying LIBOR or comparable rates as may be selected by the
Trustee after consultation with the Master Servicer), the rate will
be the Reference Bank Rate. The “Reference Bank Rate”
will be determined on the basis of the rates at which deposits in
U.S. Dollars are offered by the reference banks (which shall be any
three major banks that are engaged in transactions in the London
interbank market, selected by the Trustee after consultation with
the Master Servicer) as of 11:00 a.m., London time, on the LIBOR
Rate Adjustment Date to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the
aggregate Certificate Principal Balance of the LIBOR Certificates
then outstanding. The Trustee shall request the principal London
office of each of the reference banks to provide a quotation of its
rate. If at least two such quotations are provided, the rate will
be the arithmetic mean of the quotations rounded up to the next
multiple of 1/16%. If on such date fewer than two quotations are
provided as requested, the rate will be the arithmetic mean of the
rates quoted by one or more major banks in New York City, selected
by the Trustee after consultation with the Master Servicer, as of
11:00 a.m., New York City time, on such date for loans in U.S.
Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal
Balance of the LIBOR Certificates then outstanding. If no such
quotations can be obtained, the rate will be LIBOR for the prior
Distribution Date; provided however, if, under the priorities
described above, LIBOR for a Distribution Date would be based on
LIBOR for the previous Distribution Date for the third consecutive
Distribution Date, the Trustee, shall select an alternative
comparable index (over which the Trustee has no control), used for
determining one-month Eurodollar lending rates that is calculated
and published (or otherwise made available) by an independent
party. The establishment of LIBOR by the Trustee on any LIBOR Rate
Adjustment Date and the Trustee’s subsequent calculation of
the Pass-Through Rates applicable to the LIBOR Certificates for the
relevant Interest Accrual Period, in the absence of manifest error,
will be final and binding. Promptly following each LIBOR Rate
Adjustment Date the Trustee shall supply the Master Servicer with
the results of its determination of LIBOR on such date.
Furthermore, the Trustee shall supply to any Certificateholder so
requesting by calling 1-800-934-6802 the Pass-Through Rate on
the LIBOR Certificates for the current and the immediately
preceding Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage
Loans.
(a) The
Depositor, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee in respect of the Trust Fund
without recourse all the right, title and interest of the Depositor
in and to (i) the Mortgage Loans, including all interest and
principal on or with respect to the Mortgage Loans due on or after
the Cut-off Date (other than Monthly Payments due in the month of
the Cut-off Date); and (ii) all proceeds of the
foregoing.
(b) In
connection with such assignment, and contemporaneously with the
delivery of this Agreement, the Depositor delivered or caused to be
delivered hereunder to the Trustee, the Hedge Agreements (the
delivery of which shall evidence that the fixed payments for the
Hedge Agreements have been paid and the Trustee and the Trust Fund
shall have no further payment obligation thereunder and that such
fixed payments have been authorized hereby), and except as set
forth in Section 2.01(c) below and subject to
Section 2.01(d) below, the Depositor does hereby deliver to,
and deposit with, the Trustee, or to and with one or more
Custodians, as the duly appointed agent or agents of the Trustee
for such purpose, the following documents or instruments (or copies
thereof as permitted by this Section) with respect to each Mortgage
Loan so assigned:
(i) The
original Mortgage Note, endorsed without recourse to the order of
the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or
with respect to any Destroyed Mortgage Note, an original lost note
affidavit from the related Seller or Residential Funding stating
that the original Mortgage Note was lost, misplaced or destroyed,
together with a copy of the related Mortgage Note;
(ii) The
original Mortgage, noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan
if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon or, if the original Mortgage has not yet been
returned from the public recording office, a copy of the original
Mortgage with evidence of recording indicated thereon;
(iii)
Unless the Mortgage Loan is registered on the MERS® System,
the assignment (which may be included in one or more blanket
assignments if permitted by applicable law) of the Mortgage to the
Trustee with evidence of recording indicated thereon or a copy of
such assignment with evidence of recording indicated
thereon;
(iv) The
original recorded assignment or assignments of the Mortgage showing
an unbroken chain of title from the originator to the Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS® System and noting the presence of a
MIN) with evidence of recordation noted thereon or attached
thereto, or a copy of such assignment or assignments of the
Mortgage with evidence of recording indicated thereon;
and
(v) The
original of each modification, assumption agreement or preferred
loan agreement, if any, relating to such Mortgage Loan, or a copy
of each modification, assumption agreement or preferred loan
agreement.
The
Depositor may, in lieu of delivering the original of the documents
set forth in Section 2.01(b)(ii), (iii), (iv) and (v) (or
copies thereof as permitted by Section 2.01(b)) to the Trustee
or the Custodian or Custodians, deliver such documents to the
Master Servicer, and the Master Servicer shall hold such documents
in trust for the use and benefit of all present and future
Certificateholders until such time as is set forth in the next
sentence. Within thirty Business Days following the earlier of (i)
the receipt of the original of all of the documents or instruments
set forth in Section 2.01(b)(ii), (iii), (iv) and (v) (or
copies thereof as permitted by such Section) for any Mortgage Loan
and (ii) a written request by the Trustee to deliver those
documents with respect to any or all of the Mortgage Loans then
being held by the Master Servicer, the Master Servicer shall
deliver a complete set of such documents to the Trustee or the
Custodian or Custodians that are the duly appointed agent or agents
of the Trustee.
The
Depositor, the Master Servicer and the Trustee agree that it is not
intended that any mortgage loan be included in the Trust Fund that
is (i) a “High-Cost Home Loan” as defined in the New
Jersey Home Ownership Act effective November 27, 2003, (ii) a
“High-Cost Home Loan” as defined in the New Mexico Home
Loan Protection Act effective January 1, 2004, (iii) a “High
Cost Home Mortgage Loan” as defined in the Massachusetts
Predatory Home Practices Act effective November 7, 2004 or (iv) a
“High-Cost Home Loan” as defined in the Indiana High
Cost Home Loan Law effective January 1, 2005.
(c)
Notwithstanding the provisions of Section 2.01(b), in the
event that in connection with any Mortgage Loan, if the Depositor
cannot deliver the original of the Mortgage, any assignment,
modification, assumption agreement or preferred loan agreement (or
copy thereof as permitted by Section 2.01(b)) with evidence of
recording thereon concurrently with the execution and delivery of
this Agreement because of (i) a delay caused by the public
recording office where such Mortgage, assignment, modification,
assumption agreement or preferred loan agreement as the case may
be, has been delivered for recordation, or (ii) a delay in the
receipt of certain information necessary to prepare the related
assignments, the Depositor shall deliver or cause to be delivered
to the Trustee or the respective Custodian a copy of such Mortgage,
assignment, modification, assumption agreement or preferred loan
agreement.
The
Depositor shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment referred to
in clause (iii) of Section 2.01(b), except (a) in states
where, in the opinion of counsel acceptable to the Master Servicer,
such recording is not required to protect the Trustee’s
interests in the Mortgage Loan or (b) if MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage, as
applicable, as the mortgagee of record solely as nominee for
Residential Funding and its successors and assigns. If any
Assignment is lost or returned unrecorded to the Depositor because
of any defect therein, the Depositor shall prepare a substitute
Assignment or cure such defect, as the case may be, and cause such
Assignment to be recorded in accordance with this paragraph. The
Depositor shall promptly deliver or cause to be delivered to the
Trustee or the respective Custodian such Mortgage or Assignment, as
applicable (or copy thereof as permitted by Section 2.01(b)),
with evidence of recording indicated thereon upon receipt thereof
from the public recording office or from the related Subservicer or
Seller.
If
the Depositor delivers to the Trustee or Custodian any Mortgage
Note or Assignment of Mortgage in blank, the Depositor shall, or
shall cause the Custodian to, complete the endorsement of the
Mortgage Note and the Assignment of Mortgage in the name of the
Trustee in conjunction with the Interim Certification issued by the
Custodian, as contemplated by Section 2.02.
Any
of the items set forth in Sections 2.01(b)(ii), (iii), (iv) and (v)
and that may be delivered as a copy rather than the original may be
delivered to the Trustee or the Custodian.
In
connection with the assignment of any Mortgage Loan registered on
the MERS® System, the Depositor further agrees that it will
cause, at the Depositor’s own expense, within 30 Business
Days after the Closing Date, the MERS® System to indicate that
such Mortgage Loans have been assigned by the Depositor to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code in the field which
identifies the specific Trustee and (b) the code in the field
“Pool Field” which identifies the series of the
Certificates issued in connection with such Mortgage Loans. The
Depositor further agrees that it will not, and will not permit the
Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the
terms of this Agreement.
(d) It is
intended that the conveyances by the Depositor to the Trustee of
the Mortgage Loans as provided for in this Section 2.01 and
the Uncertificated Regular Interests be construed as a sale by the
Depositor to the Trustee of the Mortgage Loans and the
Uncertificated Regular Interests for the benefit of the
Certificateholders. Further, it is not intended that any such
conveyance be deemed to be a pledge of the Mortgage Loans and the
Uncertificated Regular Interests by the Depositor to the Trustee to
secure a debt or other obligation of the Depositor. Nonetheless,
(a) this Agreement is intended to be and hereby is a security
agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any
other applicable jurisdiction; (b) the conveyances provided for in
this Section 2.01 shall be deemed to be (1) a grant by the
Depositor to the Trustee of a security interest in all of the
Depositor’s right (including the power to convey title
thereto), title and interest, whether now owned or hereafter
acquired, in and to (A) the Mortgage Loans, including the related
Mortgage Note, the Mortgage, any insurance policies and all other
documents in the related Mortgage File, (B) all amounts payable
pursuant to the Mortgage Loans in accordance with the terms
thereof, (C) any Uncertificated Regular Interests and any and all
general intangibles, payment intangibles, accounts, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit and investment
property and other property of whatever kind or description now
existing or hereafter acquired consisting of, arising from or
relating to any of the foregoing, and (D) all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including without
limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form
of cash, instruments, securities or other property and (2) an
assignment by the Depositor to the Trustee of any security interest
in any and all of Residential Funding’s right (including the
power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in
the foregoing clauses (1)(A), (B), (C) and (D) granted by
Residential Funding to the Depositor pursuant to the Assignment
Agreement; (c) the possession by the Trustee, the Custodian or any
other agent of the Trustee of Mortgage Notes or such other items of
property as constitute instruments, money, payment intangibles,
negotiable documents, goods, deposit accounts, letters of credit,
advices of credit, investment property, certificated securities or
chattel paper shall be deemed to be “possession by the
secured party,” or possession by a purchaser or a person
designated by such secured party, for purposes of perfecting the
security interest pursuant to the Minnesota Uniform Commercial Code
and the Uniform Commercial Code of any other applicable
jurisdiction as in effect (including, without limitation, Sections
8-106, 9-313 and 9-106 thereof); and (d) notifications to
persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations
from, securities intermediaries, bailees or agents of, or persons
holding for, (as applicable) the Trustee for the purpose of
perfecting such security interest under applicable law.
The
Depositor and, at the Depositor’s direction, Residential
Funding and the Trustee shall, to the extent consistent with this
Agreement, take such reasonable actions as may be necessary to
ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans and the Uncertificated Regular
Interests and the other property described above, such security
interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such
throughout the term of this Agreement. Without limiting the
generality of the foregoing, the Depositor shall prepare and
deliver to the Trustee not less than 15 days prior to any filing
date and, the Trustee shall forward for filing, or shall cause to
be forwarded for filing, at the expense of the Depositor, all
filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code as in effect in
any jurisdiction to perfect the Trustee’s security interest
in or lien on the Mortgage Loans and the Uncertificated Regular
Interests, as evidenced by an Officers Certificate of the
Depositor, including without limitation (x) continuation
statements, and (y) such other statements as may be occasioned by
(1) any change of name of Residential Funding, the Depositor
or the Trustee (such preparation and filing shall be at the expense
of the Trustee, if occasioned by a change in the Trustee’s
name), (2) any change of location of the place of business or the
chief executive office of Residential Funding or the Depositor,
(3) any transfer of any interest of Residential Funding or the
Depositor in any Mortgage Loan or (4) any transfer of any interest
of Residential Funding or the Depositor in any Uncertificated
Regular Interests.
Section 2.02. Acceptance by
Trustee .
The
Trustee acknowledges receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, and based solely upon a receipt
or certification executed by the Custodian, receipt by the
respective Custodian as the duly appointed agent of the Trustee) of
the documents referred to in Section 2.01(b)(i) above (except
that for purposes of such acknowledgement only, a Mortgage Note may
be endorsed in blank and an Assignment of Mortgage may be in blank)
and declares that it, or a Custodian as its agent, holds and will
hold such documents and the other documents constituting a part of
the Mortgage Files delivered to it, or a Custodian as its agent, in
trust for the use and benefit of all present and future
Certificateholders. The Trustee or Custodian (such Custodian being
so obligated under a Custodial Agreement) agrees, for the benefit
of Certificateholders, to review each Mortgage File delivered to it
pursuant to Section 2.01(b) within 90 days after the Closing
Date to ascertain that all required documents (specifically as set
forth in Section 2.01(b)), have been executed and received,
and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, as supplemented, that have been
conveyed to it, and to deliver to the Trustee a certificate (the
“Interim Certification”) to the effect that all
documents required to be delivered pursuant to Section 2.01(b)
above have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan
Schedule, except for any exceptions listed on Schedule A attached
to such Interim Certification. Upon delivery of the Mortgage Files
by the Depositor or the Master Servicer, the Trustee shall
acknowledge receipt (or, with respect to Mortgage Loans subject to
a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective
Custodian as the duly appointed agent of the Trustee) of the
documents referred to in Section 2.01(b) above.
If
the Custodian, as the Trustee’s agent, finds any document or
documents constituting a part of a Mortgage File to be missing or
defective, upon receipt of notification from the Custodian as
specified in the succeeding sentence, the Trustee shall promptly so
notify or cause the Custodian to notify the Master Servicer and the
Depositor. Pursuant to Section 2.3 of the Custodial Agreement,
the Custodian will notify the Master Servicer, the Depositor and
the Trustee of any such omission or defect found by it in respect
of any Mortgage File held by it in respect of the items received by
it pursuant to the Custodial Agreement. If such omission or defect
materially and adversely affects the interests in the related
Mortgage Loan of the Certificateholders, the Master Servicer shall
promptly notify the related Subservicer or Seller of such omission
or defect and request that such Subservicer or Seller correct or
cure such omission or defect within 60 days from the date the
Master Servicer was notified of such omission or defect and, if
such Subservicer or Seller does not correct or cure such omission
or defect within such period, that such Subservicer or Seller
purchase such Mortgage Loan from the Trust Fund at its Purchase
Price, in either case within 90 days from the date the Master
Servicer was notified of such omission or defect; provided that if
the omission or defect would cause the Mortgage Loan to be other
than a “qualified mortgage” as defined in
Section 860G(a)(3) of the Code, any such cure or repurchase
must occur within 90 days from the date such breach was discovered.
The Purchase Price for any such Mortgage Loan shall be deposited or
caused to be deposited by the Master Servicer in the Custodial
Account maintained by it pursuant to Section 3.07 and, upon
receipt by the Trustee of written notification of such deposit
signed by a Servicing Officer, the Trustee or any Custodian, as the
case may be, shall release to the Master Servicer the related
Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment prepared by the Master
Servicer, in each case without recourse, as shall be necessary to
vest in the Subservicer or Seller or its designee, as the case may
be, any Mortgage Loan released pursuant hereto and thereafter such
Mortgage Loan shall not be part of the Trust Fund. In furtherance
of the foregoing and Section 2.04, if the Subservicer or
Seller or Residential Funding that repurchases the Mortgage Loan is
not a member of MERS and the Mortgage is registered on the
MERS® System, the Master Servicer, at its own expense and
without any right of reimbursement, shall cause MERS to execute and
deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to such Subservicer or Seller or
Residential Funding and shall cause such Mortgage to be removed
from registration on the MERS® System in accordance with
MERS’ rules and regulations. It is understood and agreed that
the obligation of the Subservicer or Seller, to so cure or purchase
any Mortgage Loan as to which a material and adverse defect in or
omission of a constituent document exists shall constitute the sole
remedy respecting such defect or omission available to
Certificateholders or the Trustee on behalf of
Certificateholders.
Section 2.03. Representations, Warranties and
Covenants of the Master Servicer and the Depositor.
(a) The
Master Servicer hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that:
(i) The
Master Servicer is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and
existence and is or will be in compliance with the laws of each
state in which any Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan in
accordance with the terms of this Agreement;
(ii) The
execution and delivery of this Agreement by the Master Servicer and
its performance and compliance with the terms of this Agreement
will not violate the Master Servicer’s Certificate of
Incorporation or Bylaws or constitute a material default (or an
event which, with notice or lapse of time, or both, would
constitute a material default) under, or result in the material
breach of, any material contract, agreement or other instrument to
which the Master Servicer is a party or which may be applicable to
the Master Servicer or any of its assets;
(iii)
This Agreement, assuming due authorization, execution and delivery
by the Trustee and the Depositor, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it
in accordance with the terms hereof subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors’ rights generally and
to general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at
law;
(iv) The
Master Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default
might have consequences that would materially and adversely affect
the condition (financial or other) or operations of the Master
Servicer or its properties or might have consequences that would
materially adversely affect its performance hereunder;
(v) No
litigation is pending or, to the best of the Master
Servicer’s knowledge, threatened against the Master Servicer
which would prohibit its entering into this Agreement or performing
its obligations under this Agreement;
(vi) The
Master Servicer shall comply in all material respects in the
performance of this Agreement with all reasonable rules and
requirements of each insurer under each Required Insurance
Policy;
(vii) No
information, certificate of an officer, statement furnished in
writing or report delivered to the Depositor, any Affiliate of the
Depositor or the Trustee by the Master Servicer will, to the
knowledge of the Master Servicer, contain any untrue statement of a
material fact or omit a material fact necessary to make the
information, certificate, statement or report not
misleading;
(viii)
The Master Servicer has examined each existing, and will examine
each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing
Agreement and each designated Subservicer are acceptable to the
Master Servicer and any new Subservicing Agreements will comply
with the provisions of Section 3.02;
(ix) The
Master Servicer is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that
are registered with MERS; and
(x) The
Servicing Guide of the Master Servicer requires that the
Subservicer for each Mortgage Loan accurately and fully reports its
borrower credit files to each of the Credit Repositories in a
timely manner.
It is understood and agreed that
the representations and warranties set forth in this
Section 2.03(a) shall survive delivery of the respective
Mortgage Files to the Trustee or any Custodian. Upon discovery by
either the Depositor, the Master Servicer, the Trustee or any
Custodian of a breach of any representation or warranty set forth
in this Section 2.03(a) which materially and adversely affects
the interests of the Certificateholders in any Mortgage Loan, the
party discovering such breach shall give prompt written notice to
the other parties (any Custodian being so obligated under a
Custodial Agreement). Within 90 days of its discovery or its
receipt of notice of such breach, the Master Servicer shall either
(i) cure such breach in all material respects or (ii) to the extent
that such breach is with respect to a Mortgage Loan or a related
document, purchase such Mortgage Loan from the Trust Fund at the
Purchase Price and in the manner set forth in Section 2.02;
provided that if the breach would cause the Mortgage Loan to be
other than a “qualified mortgage” as defined in
Section 860G(a)(3) of the Code, any such cure or repurchase
must occur within 90 days from the date such breach was discovered.
The obligation of the Master Servicer to cure such breach or to so
purchase such Mortgage Loan shall constitute the sole remedy in
respect of a breach of a representation and warranty set forth in
this Section 2.03(a) available to the Certificateholders or
the Trustee on behalf of the Certificateholders.
(b) The
Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date (or,
if otherwise specified below, as of the date so specified): (i)
immediately prior to the conveyance of the Mortgage Loans to the
Trustee, the Depositor had good title to, and was the sole owner
of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest (other than rights to servicing
and related compensation) and such conveyance validly transfers
ownership of the Mortgage Loans to the Trustee free and clear of
any pledge, lien, encumbrance or security interest; and (ii) each
Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1).
It
is understood and agreed that the representations and warranties
set forth in this Section 2.03(b) shall survive delivery of
the respective Mortgage Files to the Trustee or any
Custodian.
Upon
discovery by any of the Depositor, the Master Servicer, the Trustee
or any Custodian of a breach of any of the representations and
warranties set forth in this Section 2.03(b) which materially
and adversely affects the interests of the Certificateholders in
any Mortgage Loan, the party discovering such breach shall give
prompt written notice to the other parties(any Custodian being so
obligated under a Custodial Agreement); provided, however ,
that in the event of a breach of the representation and warranty
set forth in Section 2.03(b)(ii), the party discovering such
breach shall give such notice within five days of discovery. Within
90 days of its discovery or its receipt of notice of breach, the
Depositor shall either (i) cure such breach in all material
respects or (ii) purchase such Mortgage Loan from the Trust Fund at
the Purchase Price and in the manner set forth in
Section 2.02; provided that the Depositor shall have the
option to substitute a Qualified Substitute Mortgage Loan or Loans
for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the omission or defect
would cause the Mortgage Loan to be other than a “qualified
mortgage” as defined in Section 860G(a)(3) of the Code,
any such cure, substitution or repurchase must occur within 90 days
from the date such breach was discovered. Any such substitution
shall be effected by the Depositor under the same terms and
conditions as provided in Section 2.04 for substitutions by
Residential Funding. It is understood and agreed that the
obligation of the Depositor to cure such breach or to so purchase
or substitute for any Mortgage Loan as to which such a breach has
occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Certificateholders or the
Trustee on behalf of the Certificateholders. Notwithstanding the
foregoing, the Depositor shall not be required to cure breaches or
purchase or substitute for Mortgage Loans as provided in this
Section 2.03(b) if the substance of the breach of a
representation set forth above also constitutes fraud in the
origination of the Mortgage Loan.
Section 2.04. Representations and Warranties
of Sellers.
The
Depositor, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect
of the Assignment Agreement and each Seller’s Agreement
applicable to a Mortgage Loan as and to the extent set forth in the
Assignment Agreement. Insofar as the Assignment Agreement or such
Seller’s Agreement relates to the representations and
warranties made by Residential Funding or the related Seller in
respect of such Mortgage Loan and any remedies provided thereunder
for any breach of such representations and warranties, such right,
title and interest may be enforced by the Master Servicer on behalf
of the Trustee and the Certificateholders. Upon the discovery by
the Depositor, the Master Servicer, the Trustee or any Custodian of
a breach of any of the representations and warranties made in a
Seller’s Agreement or the Assignment Agreement in respect of
any Mortgage Loan or of any Repurchase Event which materially and
adversely affects the interests of the Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties(any Custodian being so
obligated under a Custodial Agreement). The Master Servicer shall
promptly notify the related Seller and Residential Funding of such
breach or Repurchase Event and request that such Seller or
Residential Funding either (i) cure such breach or Repurchase Event
in all material respects within 90 days from the date the Master
Servicer was notified of such breach or Repurchase Event or
(ii) purchase such Mortgage Loan from the Trust Fund at the
Purchase Price and in the manner set forth in
Section 2.02.
Upon
the discovery by the Depositor, the Master Servicer, the Trustee or
any Custodian of a breach of any of such representations and
warranties set forth in the Assignment Agreement in respect of any
Mortgage Loan which materially and adversely affects the interests
of the Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the
other parties (any Custodian being so obligated under a Custodial
Agreement) at the same time as notice is given pursuant to the
preceding paragraph of any corresponding breach of representation
or warranty made in Seller’s Agreement. The Master Servicer
shall promptly notify Residential Funding of such breach of a
representation or warranty set forth in the Assignment Agreement
and request that Residential Funding either (i) cure such breach in
all material respects within 90 days from the date the Master
Servicer was notified of such breach or (ii) purchase such Mortgage
Loan from the Trust Fund within 90 days of the date of such written
notice of such breach at the Purchase Price and in the manner set
forth in Section 2.02, but only if the Mortgage Loan has not
been purchased by the Seller due to a breach of representation and
warranty of the related Seller’s Agreement as set forth in
the preceding paragraph; provided that Residential Funding shall
have the option to substitute a Qualified Substitute Mortgage Loan
or Loans for such Mortgage Loan if such substitution occurs within
two years following the Closing Date; provided that if the breach
would cause the Mortgage Loan to be other than a “qualified
mortgage” as defined in Section 860G(a)(3) of the Code,
any such cure or substitution must occur within 90 days from the
date the breach was discovered. If the breach of representation and
warranty that gave rise to the obligation to repurchase or
substitute a Mortgage Loan pursuant to Section 4 of the
Assignment Agreement was the representation and warranty set forth
in clause (xlvii) of Section 4 thereof, then the Master
Servicer shall request that Residential Funding pay to the Trust
Fund, concurrently with and in addition to the remedies provided in
the preceding sentence, an amount equal to any liability, penalty
or expense that was actually incurred and paid out of or on behalf
of the Trust Fund, and that directly resulted from such breach, or
if incurred and paid by the Trust Fund thereafter, concurrently
with such payment. In the event that Residential Funding elects to
substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04,
Residential Funding shall deliver to the Trustee for the benefit of
the Certificateholders with respect to such Qualified Substitute
Mortgage Loan or Loans, the original Mortgage Note, the Mortgage,
an Assignment of the Mortgage in recordable form, and such other
documents and agreements as are required by Section 2.01, with
the Mortgage Note endorsed as required by Section 2.01. No
substitution will be made in any calendar month after the
Determination Date for such month. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of
substitution shall not be part of the Trust Fund and will be
retained by the Master Servicer and remitted by the Master Servicer
to Residential Funding on the next succeeding Distribution Date.
For the month of substitution, distributions to the
Certificateholders will include the Monthly Payment due on a
Deleted Mortgage Loan for such month and thereafter Residential
Funding shall be entitled to retain all amounts received in respect
of such Deleted Mortgage Loan. The Master Servicer shall amend or
cause to be amended the Mortgage Loan Schedule for the benefit of
the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Qualified Substitute
Mortgage Loan or Loans and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Qualified Substitute Mortgage Loan or Loans shall
be subject to the terms of this Agreement and the related
Subservicing Agreement in all respects, the related Seller shall be
deemed to have made the representations and warranties with respect
to the Qualified Substitute Mortgage Loan made in the related
Seller Agreements as of the date of substitution, Residential
Funding shall be deemed to have made the representations and
warranties with respect to the Qualified Substitute Mortgage Loan
(other than those of a statistical nature) contained in the
Assignment Agreement as of the date of substitution, and the
covenants, representations and warranties set forth in this
Section 2.04, and in Section 2.03(b) hereof.
In
connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Master Servicer shall determine the amount (if any) by which
the aggregate principal balance of all such Qualified Substitute
Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (in each case after application of the principal portion of
the Monthly Payments due in the month of substitution that are to
be distributed to the Certificateholders in the month of
substitution). Residential Funding shall deposit or cause the
related Seller to deposit the amount of such shortfall into the
Custodial Account on the day of substitution, without any
reimbursement therefor. Residential Funding shall give notice in
writing to the Trustee of such event, which notice shall be
accompanied by an Officers’ Certificate as to the calculation
of such shortfall and (subject to Section 10.01(f)) by an
Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on
“prohibited transactions” under Section 860F(a)(1)
of the Code or on “contributions after the startup
date” under Section 860G(d)(1) of the Code or (b) any
portion of any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificate is outstanding.
It
is understood and agreed that the obligation of the Seller or
Residential Funding, as the case may be, to cure such breach or
purchase (and in the case of Residential Funding to substitute for)
such Mortgage Loan as to which such a breach has occurred and is
continuing and to make any additional payments required under the
Assignment Agreement in connection with a breach of the
representation and warranty in clause (xlvii) of Section 4
thereof shall constitute the sole remedy respecting such breach
available to the Certificateholders or the Trustee on behalf of the
Certificateholders. If the Master Servicer is Residential Funding,
then the Trustee shall also have the right to give the notification
and require the purchase or substitution provided for in the second
preceding paragraph in the event of such a breach of a
representation or warranty made by Residential Funding in the
Assignment Agreement. In connection with the purchase of or
substitution for any such Mortgage Loan by Residential Funding, the
Trustee shall assign to Residential Funding all of the right, title
and interest in respect of the Seller’s Agreement and the
Assignment Agreement applicable to such Mortgage Loan.
Section 2.05. Execution and Authentication of
Certificates; Conveyance of REMIC I Regular Interests.
(a) The
Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Mortgage Files to it, or any Custodian on its
behalf, subject to any exceptions noted, together with the
assignment to it of all other assets included in the Trust Fund,
receipt of which is hereby acknowledged. Concurrently with such
delivery and in exchange therefor, the Trustee, pursuant to the
written request of the Depositor executed by an officer of the
Depositor, has executed and caused to be authenticated and
delivered to or upon the order of the Depositor the Certificates in
authorized denominations which evidence ownership of the entire
Trust Fund.
(b) The
Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the Depositor in and to the REMIC I Regular
Interests for the benefit of the holders of the Regular
Certificates and the Class R-II certificates. The Trustee
acknowledges receipt of the REMIC I Regular Interests (each of
which are uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders
of the Regular Certificates and the Class R-II Certificates.
The interests evidenced by the Class R-II Certificate,
together with the Regular Certificates, constitute the entire
beneficial ownership interest in REMIC II.
Section 2.06. Purposes and Powers of the
Trust.
The
purpose of the trust, as created hereunder, is to engage in the
following activities:
(a)
to sell the Certificates to the Depositor in exchange for the
Mortgage Loans;
(b)
to enter into and perform its obligations under this
Agreement;
(c)
to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or
connected therewith; and
(d)
subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of
the Trust Fund and the making of distributions to the
Certificateholders.
The
trust is hereby authorized to engage in the foregoing activities.
Notwithstanding the provisions of Section 11.01, the trust
shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of
this Agreement while any Certificate is outstanding, and this
Section 2.06 may not be amended, without the consent of the
Certificateholders evidencing a majority of the aggregate Voting
Rights of the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS
Section 3.01. Master Servicer to Act as
Servicer.
(a) The
Master Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement and the respective
Mortgage Loans, following such procedures as it would employ in its
good faith business judgment and which are normal and usual in its
general mortgage servicing activities, and shall have full power
and authority, acting alone or through Subservicers as provided in
Section 3.02, to do any and all things which it may deem
necessary or desirable in connection with such servicing and
administration. Without limiting the generality of the foregoing,
the Master Servicer in its own name or in the name of a Subservicer
is hereby authorized and empowered by the Trustee when the Master
Servicer or the Subservicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf
of the Certificateholders and the Trustee or any of them, any and
all instruments of satisfaction or cancellation, or of partial or
full release or discharge, or of consent to assumption or
modification in connection with a proposed conveyance, or of
assignment of any Mortgage and Mortgage Note in connection with the
repurchase of a Mortgage Loan and all other comparable instruments,
or with respect to the modification or re-recording of a Mortgage
for the purpose of correcting the Mortgage, the subordination of
the lien of the Mortgage in favor of a public utility company or
government agency or unit with powers of eminent domain, the taking
of a deed in lieu of foreclosure, the commencement, prosecution or
completion of judicial or non-judicial foreclosure, the conveyance
of a Mortgaged Property to the related insurer, the acquisition of
any property acquired by foreclosure or deed in lieu of
foreclosure, or the management, marketing and conveyance of any
property acquired by foreclosure or deed in lieu of foreclosure
with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. The Master Servicer further is authorized and
empowered by the Trustee, on behalf of the Certificateholders and
the Trustee, in its own name or in the name of the Subservicer,
when the Master Servicer or the Subservicer, as the case may be,
believes it is appropriate in its best judgment to register any
Mortgage Loan on the MERS® System, or cause the removal from
the registration of any Mortgage Loan on the MERS® System, to
execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS,
solely as nominee for the Trustee and its successors and assigns.
Any expenses incurred in connection with the actions described in
the preceding sentence shall be borne by the Master Servicer in
accordance with Section 3.16(c), with no right of
reimbursement; provided, that if, as a result of MERS discontinuing
or becoming unable to continue operations in connection with the
MERS® System, it becomes necessary to remove any Mortgage Loan
from registration on the MERS® System and to arrange for the
assignment of the related Mortgages to the Trustee, then any
related expenses shall be reimbursable to the Master Servicer as
set forth in Section 3.10(a)(ii). Notwithstanding the
foregoing, subject to Section 3.07(a), the Master Servicer
shall not permit any modification with respect to any Mortgage Loan
that would both constitute a sale or exchange of such Mortgage Loan
within the meaning of Section 1001 of the Code and any
proposed, temporary or final regulations promulgated thereunder
(other than in connection with a proposed conveyance or assumption
of such Mortgage Loan that is treated as a Principal Prepayment in
Full pursuant to Section 3.13(d) hereof) and cause any REMIC
created hereunder to fail to qualify as a REMIC under the Code. The
Trustee shall furnish the Master Servicer with any powers of
attorney and other documents necessary or appropriate to enable the
Master Servicer to service and administer the Mortgage Loans. The
Trustee shall not be liable for any action taken by the Master
Servicer or any Subservicer pursuant to such powers of attorney or
other documents. In servicing and administering any Nonsubserviced
Mortgage Loan, the Master Servicer shall, to the extent not
inconsistent with this Agreement, comply with the Program Guide as
if it were the originator of such Mortgage Loan and had retained
the servicing rights and obligations in respect thereof.
If
the Mortgage relating to a Mortgage Loan did not have a lien senior
to the Mortgage Loan on the related Mortgaged Property as of the
Cut-off Date, then the Master Servicer, in such capacity, may not
consent to the placing of a lien senior to that of the Mortgage on
the related Mortgaged Property. If the Mortgage relating to a
Mortgage Loan had a lien senior to the Mortgage Loan on the related
Mortgaged Property as of the Cut-off Date, then the Master
Servicer, in such capacity, may consent to the refinancing of the
prior senior lien, provided that the following requirements are
met:
(i)
(A) the Mortgagor’s debt-to-income ratio resulting from such
refinancing is less than the original debt-to-income ratio as set
forth on the Mortgage Loan Schedule; provided, however, that in no
instance shall the resulting Combined Loan-to-Value Ratio
(“Combined Loan-to-Value Ratio”) of such Mortgage Loan
be higher than that permitted by the Program Guide; or
(B)
the resulting Combined Loan-to-Value Ratio of such Mortgage Loan is
no higher than the Combined Loan-to-Value Ratio prior to such
refinancing; provided, however, if such refinanced mortgage loan is
a “rate and term” mortgage loan (meaning, the Mortgagor
does not receive any cash from the refinancing), the Combined
Loan-to-Value Ratio may increase to the extent of either (x) the
reasonable closing costs of such refinancing or (y) any decrease in
the value of the related Mortgaged Property, if the Mortgagor is in
good standing as defined by the Program Guide;
(ii)
the interest rate, or, in the case of an adjustable rate existing
senior lien, the maximum interest rate, for the loan evidencing the
refinanced senior lien is no more than 2.0% higher than the
interest rate or the maximum interest rate, as the case may be, on
the loan evidencing the existing senior lien immediately prior to
the date of such refinancing; provided, however (A) if the loan
evidencing the existing senior lien prior to the date of
refinancing has an adjustable rate and the loan evidencing the
refinanced senior lien has a fixed rate, then the current interest
rate on the loan evidencing the refinanced senior lien may be up to
2.0% higher than the then-current loan rate of the loan evidencing
the existing senior lien and (B) if the loan evidencing the
existing senior lien prior to the date of refinancing has a fixed
rate and the loan evidencing the refinanced senior lien has an
adjustable rate, then the maximum interest rate on the loan
evidencing the refinanced senior lien shall be less than or equal
to (x) the interest rate on the loan evidencing the existing senior
lien prior to the date of refinancing plus (y) 2.0%;
and
(iii)
the loan evidencing the refinanced senior lien is not subject to
negative amortization.
(b) The
Master Servicer shall, to the extent consistent with the servicing
standards set forth herein, take whatever actions as may be
necessary to file a claim under or enforce or allow the Trustee to
file a claim under or enforce any title insurance policy with
respect to any Mortgage Loan including, without limitation, joining
in or causing any Seller or Subservicer (or any other party in
possession of any title insurance policy) to join in any claims
process, negotiations, actions or proceedings necessary to make a
claim under or enforce any title insurance policy. Notwithstanding
anything in this Agreement to the contrary, the Master Servicer
shall not (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Master
Servicer, reasonably foreseeable) make or permit any modification,
waiver, or amendment of any term of any Mortgage Loan that would
both (i) effect an exchange or reissuance of such Mortgage
Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) (other than
in connection with a proposed conveyance or assumption of such
Mortgage Loan that is treated as a Principal Prepayment in Full
pursuant to Section 3.13(d) hereof) and (ii) cause any REMIC
formed hereunder to fail to qualify as a REMIC under the Code or
the imposition of any tax on “prohibited transactions”
or “contributions” after the startup date under the
REMIC Provisions.
(c) In
connection with servicing and administering the Mortgage Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may
perform services such as appraisals and brokerage services that are
customarily provided by Persons other than servicers of mortgage
loans, and shall be entitled to reasonable compensation therefor in
accordance with Section 3.10 and (ii) may, at its own
discretion and on behalf of the Trustee, obtain credit information
in the form of a “credit score” from a Credit
Repository.
(d) All
costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the
properties subject to the Mortgage Loans shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be
added to the amount owing under the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loan so permit, and
such costs shall be recoverable to the extent permitted by
Section 3.10(a)(ii).
(e) The
Master Servicer may enter into one or more agreements in connection
with the offering of pass-through certificates evidencing interests
in one or more of the Certificates providing for the payment by the
Master Servicer of amounts received by the Master Servicer as
servicing compensation hereunder and required to cover certain
Prepayment Interest Shortfalls on the Mortgage Loans, which payment
obligation will thereafter be an obligation of the Master Servicer
hereunder.
(f) The
relationship of the Master Servicer (and of any successor to the
Master Servicer) to the Depositor under this Agreement is intended
by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
(g) The
Master Servicer shall comply with the terms of Section 9 of
the Assignment Agreement.
|
|
Section
|
3.02.
Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers’ Obligations
.
|
(a) The
Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the
execution and delivery of this Agreement, and may enter into new
Subservicing Agreements with Subservicers, for the servicing and
administration of all or some of the Mortgage Loans. Each
Subservicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages
in the business of originating or servicing mortgage loans, and in
either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable
law to enable the Subservicer to perform its obligations hereunder
and under the Subservicing Agreement, and in either case shall be a
Freddie Mac, Fannie Mae or HUD approved mortgage servicer. Each
Subservicer of a Mortgage Loan shall be entitled to receive and
retain, as provided in the related Subservicing Agreement and in
Section 3.07, the related Subservicing Fee from payments of
interest received on such Mortgage Loan after payment of all
amounts required to be remitted to the Master Servicer in respect
of such Mortgage Loan. For any Mortgage Loan that is a
Nonsubserviced Mortgage Loan, the Master Servicer shall be entitled
to receive and retain an amount equal to the Subservicing Fee from
payments of interest. Unless the context otherwise requires,
references in this Agreement to actions taken or to be taken by the
Master Servicer in servicing the Mortgage Loans include actions
taken or to be taken by a Subservicer on behalf of the Master
Servicer. Each Subservicing Agreement will be upon such terms and
conditions as are generally required by, permitted by or consistent
with the Program Guide and are not inconsistent with this Agreement
and as the Master Servicer and the Subservicer have agreed. With
the approval of the Master Servicer, a Subservicer may delegate its
servicing obligations to third-party servicers, but such
Subservicer will remain obligated under the related Subservicing
Agreement. The Master Servicer and a Subservicer may enter into
amendments thereto or a different form of Subservicing Agreement,
and the form referred to or included in the Program Guide is merely
provided for information and shall not be deemed to limit in any
respect the discretion of the Master Servicer to modify or enter
into different Subservicing Agreements; provided, however, that any
such amendments or different forms shall be consistent with and not
violate the provisions of either this Agreement or the Program
Guide in a manner which would materially and adversely affect the
interests of the Certificateholders. The Program Guide and any
other Subservicing Agreement entered into between the Master
Servicer and any Subservicer shall require the Subservicer to
accurately and fully report its borrower credit files to each of
the Credit Repositories in a timely manner.
(b) As
part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall
use its best reasonable efforts to enforce the obligations of each
Subservicer under the related Subservicing Agreement and of each
Seller under the related Seller’s Agreement, to the extent
that the non-performance of any such obligation would have a
material and adverse effect on a Mortgage Loan, including, without
limitation, the obligation to purchase a Mortgage Loan on account
of defective documentation, as described in Section 2.02, or
on account of a breach of a representation or warranty, as
described in Section 2.04. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of
Subservicing Agreements or Seller’s Agreements, as
appropriate, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time
as the Master Servicer would employ in its good faith business
judgment and which are normal and usual in its general mortgage
servicing activities. The Master Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds all
amounts due in respect of the related Mortgage Loan or (ii) from a
specific recovery of costs, expenses or attorneys fees against the
party against whom such enforcement is directed. For purposes of
clarification only, the parties agree that the foregoing is not
intended to, and does not, limit the ability of the Master Servicer
to be reimbursed for expenses that are incurred in connection with
the enforcement of a Seller’s obligations and are
reimbursable pursuant to Section 3.10(a)(vii).
Section 3.03. Successor
Subservicers .
The
Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and
conditions of such Subservicing Agreement and without any
limitation by virtue of this Agreement; provided, however, that in
the event of termination of any Subservicing Agreement by the
Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a
Subservicing Agreement with a successor Subservicer which will be
bound by the terms of the related Subservicing Agreement. If the
Master Servicer or any Affiliate of Residential Funding acts as
servicer, it will not assume liability for the representations and
warranties of the Subservicer which it replaces. If the Master
Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to
have the successor Subservicer assume liability for the
representations and warranties made by the terminated Subservicer
in respect of the related Mortgage Loans and, in the event of any
such assumption by the successor Subservicer, the Master Servicer
may, in the exercise of its business judgment, release the
terminated Subservicer from liability for such representations and
warranties.
Section 3.04. Liability of the Master
Servicer.
Notwithstanding
any Subservicing Agreement, any of the provisions of this Agreement
relating to agreements or arrangements between the Master Servicer
or a Subservicer or reference to actions taken through a
Subservicer or otherwise, the Master Servicer shall remain
obligated and liable to the Trustee, and Certificateholders for the
servicing and administering of the Mortgage Loans in accordance
with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Subservicing Agreements
or arrangements or by virtue of indemnification from the
Subservicer or the Depositor and to the same extent and under the
same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. The Master Servicer
shall be entitled to enter into any agreement with a Subservicer or
Seller for indemnification of the Master Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05. No Contractual Relationship
Between Subservicer and Trustee or Certificateholders.
Any
Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a
Subservicer in its capacity as such and not as an originator shall
be deemed to be between the Subservicer and the Master Servicer
alone, and the Trustee and Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations,
duties or liabilities with respect to the Subservicer in its
capacity as such except as set forth in Section 3.06. The
foregoing provision shall not in any way limit a
Subservicer’s obligation to cure an omission or defect or to
repurchase a Mortgage Loan as referred to in Section 2.02
hereof.
Section 3.06. Assumption or Termination of
Subservicing Agreements by Trustee.
(a) In
the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of an Event of Default), the
Trustee, as successor Master Servicer, its designee or its
successor shall thereupon assume all of the rights and obligations
of the Master Servicer under each Subservicing Agreement that may
have been entered into. The Trustee, its designee or the successor
servicer for the Trustee shall be deemed to have assumed all of the
Master Servicer’s interest therein and to have replaced the
Master Servicer as a party to the Subservicing Agreement to the
same extent as if the Subservicing Agreement had been assigned to
the assuming party except that the Master Servicer shall not
thereby be relieved of any liability or obligations under the
Subservicing Agreement.
(b) The
Master Servicer shall, upon request of the Trustee but at the
expense of the Master Servicer, deliver to the assuming party all
documents and records relating to each Subservicing Agreement and
the Mortgage Loans then being serviced and an accounting of amounts
collected and held by it and otherwise use its best efforts to
effect the orderly and efficient transfer of each Subservicing
Agreement to the assuming party.
Section 3.07. Collection of Certain Mortgage
Loan Payments; Deposits to Custodial Account.
(a) The
Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage
Loans, and shall, to the extent such procedures shall be consistent
with this Agreement and the terms and provisions of any related
Primary Insurance Policy, follow such collection procedures as it
would employ in its good faith business judgment and which are
normal and usual in its general mortgage servicing activities.
Consistent with the foregoing, the Master Servicer may in its
discretion (subject to the terms and conditions of the Assignment
Agreement) (i) waive any late payment charge or any prepayment
charge or penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) extend the Due Date for payments due on a
Mortgage Loan in accordance with the Program Guide, provided
, however , that the Master Servicer shall first determine
that any such waiver or extension will not impair the coverage of
any related Primary Insurance Policy or materially adversely affect
the lien of the related Mortgage. Notwithstanding anything in this
Section to the contrary, the Master Servicer or any
Subservicer shall not enforce any prepayment charge to the extent
that such enforcement would violate any applicable law. In the
event of any such arrangement, the Master Servicer shall make
timely advances on the related Mortgage Loan during the scheduled
period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such
arrangements unless otherwise agreed to by the Holders of the
Classes of Certificates affected thereby; provided, however, that
no such extension shall be made if any advance would be a
Nonrecoverable Advance. Consistent with the terms of this
Agreement, the Master Servicer may also waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to
any Mortgagor if in the Master Servicer’s determination such
waiver, modification, postponement or indulgence is not materially
adverse to the interests of the Certificateholders(taking into
account any estimated Realized Loss that might result absent such
action), provided , however , that the Master
Servicer may not modify materially or permit any Subservicer to
modify any Mortgage Loan, including without limitation any
modification that would change the Mortgage Rate, forgive the
payment of any principal or interest (unless in connection with the
liquidation of the related Mortgage Loan or except in connection
with prepayments to the extent that such reamortization is not
inconsistent with the terms of the Mortgage Loan), capitalize any
amounts owing on the Mortgage Loan by adding such amount to the
outstanding principal balance of the Mortgage Loan, or extend the
final maturity date of such Mortgage Loan, unless such Mortgage
Loan is in default or, in the judgment of the Master Servicer, such
default is reasonably foreseeable. No such modification shall
reduce the Mortgage Rate on a Mortgage Loan below the greater of
(A) one-half of the Mortgage Rate as in effect on the Cut-off
Date and (B) one-half of the Mortgage Rate as in effect on the
date of such modification, but not less than the sum of the
Servicing Fee Rate and the per annum rate at which the Subservicing
Fee accrues. The final maturity date for any Mortgage Loan shall
not be extended beyond the Maturity Date. Also, the aggregate
principal balance of all Reportable Modified Mortgage Loans subject
to Servicing Modifications (measured at the time of the Servicing
Modification and after giving effect to any Servicing Modification)
can be no more than five percent of the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date, provided, that such
limit may be increased from time to time if each Rating Agency
provides written confirmation that an increase in excess of that
limit will not reduce the rating assigned to any Class of
Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency. In addition, any amounts
owing on a Mortgage Loan added to the outstanding principal balance
of such Mortgage Loan must be fully amortized over the term of such
Mortgage Loan, and such amounts may be added to the outstanding
principal balance of a Mortgage Loan only once during the life of
such Mortgage Loan. Also, the addition of such amounts described in
the preceding sentence shall be implemented in accordance with the
Program Guide and may be implemented only by Subservicers that have
been approved by the Master Servicer for such purposes. In
connection with any Curtailment of a Mortgage Loan, the Master
Servicer, to the extent not inconsistent with the terms of the
Mortgage Note and local law and practice, may permit the Mortgage
Loan to be re-amortized such that the Monthly Payment is
recalculated as an amount that will fully amortize the remaining
principal balance thereof by the original maturity date based on
the original Mortgage Rate; provided, that such reamortization
shall not be permitted if it would constitute a reissuance of the
Mortgage Loan for federal income tax purposes.
(b) The
Master Servicer shall establish and maintain a Custodial Account in
which the Master Servicer shall deposit or cause to be deposited on
a daily basis, except as otherwise specifically provided herein,
the following payments and collections remitted by Subservicers or
received by it in respect of the Mortgage Loans subsequent to the
Cut-off Date (other than in respect of Monthly Payments due before
or in the month of the Cut-off Date):
(i) All
payments on account of principal, including Principal Prepayments
made by Mortgagors on the Mortgage Loans and the principal
component of any Subservicer Advance or of any REO Proceeds
received in connection with an REO Property for which an REO
Disposition has occurred;
(ii) All
payments on account of interest at the Adjusted Mortgage Rate on
the Mortgage Loans, including the interest component of any
Subservicer Advance or of any REO Proceeds received in connection
with an REO Property for which an REO Disposition has
occurred;
(iii)
Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds
(net of any related expenses of the Subservicer);
(iv) All
proceeds of any Mortgage Loans purchased pursuant to
Section 2.02, 2.03, 2.04 or 4.07 (including amounts received
from Residential Funding pursuant to the last paragraph of
Section 4 of the Assignment Agreement in respect of any
liability, penalty or expense that resulted from a breach of the
representation and warranty set forth in clause (xlvii) of
Section 4 of the Assignment Agreement) and all amounts
required to be deposited in connection with the substitution of a
Qualified Substitute Mortgage Loan pursuant to Section 2.03 or
2.04; and
(v) Any
amounts required to be deposited pursuant to Section 3.07(c)
and any payments or collections received in the nature of
prepayment charges.
The foregoing requirements for
deposit in the Custodial Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the
foregoing, payments on the Mortgage Loans which are not part of the
Trust Fund (consisting of Monthly Payments due before or in the
month of the Cut-off Date) and payments or collections consisting
of late payment charges or assumption fees may but need not be
deposited by the Master Servicer in the Custodial Account. In the
event any amount not required to be deposited in the Custodial
Account is so deposited, the Master Servicer may at any time
withdraw such amount from the Custodial Account, any provision
herein to the contrary notwithstanding. The Custodial Account may
contain funds that belong to one or more trust funds created for
mortgage pass-through certificates of other series and may contain
other funds respecting payments on mortgage loans belonging to the
Master Servicer or serviced or master serviced by it on behalf of
others. Notwithstanding such commingling of funds, the Master
Servicer shall keep records that accurately reflect the funds on
deposit in the Custodial Account that have been identified by it as
being attributable to the Mortgage Loans. With respect to Insurance
Proceeds, Liquidation Proceeds, REO Proceeds, Subsequent Recoveries
and the proceeds of the purchase of any Mortgage Loan pursuant to
Sections 2.02, 2.03, 2.04 and 4.07 received in any calendar month,
the Master Servicer may elect to treat such amounts as included in
the Available Distribution Amount for the Distribution Date in the
month of receipt, but is not obligated to do so. If the Master
Servicer so elects, such amounts will be deemed to have been
received (and any related Realized Loss shall be deemed to have
occurred) on the last day of the month prior to the receipt
thereof.
(c) The
Master Servicer shall use its best efforts to cause the institution
maintaining the Custodial Account to invest the funds in the
Custodial Account attributable to the Mortgage Loans in Permitted
Investments which shall mature not later than the Certificate
Account Deposit Date next following the date of such investment
(with the exception of the Amount Held for Future Distribution) and
which shall not be sold or disposed of prior to their maturities.
All income and gain realized from any such investment shall be for
the benefit of the Master Servicer as additional servicing
compensation and shall be subject to its withdrawal or order from
time to time. The amount of any losses incurred in respect of any
such investments attributable to the investment of amounts in
respect of the Mortgage Loans shall be deposited in the Custodial
Account by the Master Servicer out of its own funds immediately as
realized.
(d) The
Master Servicer shall give notice to the Trustee and the Depositor
of any change in the location of the Custodial Account and the
location of the Certificate Account prior to the use
thereof.
Section 3.08. Subservicing Accounts; Servicing
Accounts.
(a) In
those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall
cause the Subservicer, pursuant to the Subservicing Agreement, to
establish and maintain one or more Subservicing Accounts which
shall be an Eligible Account or, if such account is not an Eligible
Account, shall generally satisfy the requirements of the Program
Guide and be otherwise acceptable to the Master Servicer and each
Rating Agency. The Subservicer will be required thereby to deposit
into the Subservicing Account on a daily basis all proceeds of
Mortgage Loans received by the Subservicer, less its Subservicing
Fees and unreimbursed advances and expenses, to the extent
permitted by the Subservicing Agreement. If the Subservicing
Account is not an Eligible Account, the Master Servicer shall be
deemed to have received such monies upon receipt thereof by the
Subservicer. The Subservicer shall not be required to deposit in
the Subservicing Account payments or collections in the nature of
late charges or assumption fees, or payments or collections
received in the nature of prepayment charges to the extent that the
Subservicer is entitled to retain such amounts pursuant to the
Subservicing Agreement. On or before the date specified in the
Program Guide, but in no event later than the Determination Date,
the Master Servicer shall cause the Subservicer, pursuant to the
Subservicing Agreement, to remit to the Master Servicer for deposit
in the Custodial Account all funds held in the Subservicing Account
with respect to each Mortgage Loan serviced by such Subservicer
that are required to be remitted to the Master Servicer. The
Subservicer will also be required, pursuant to the Subservicing
Agreement, to advance on such scheduled date of remittance amounts
equal to any scheduled monthly installments of principal and
interest less its Subservicing Fees on any Mortgage Loans for which
payment was not received by the Subservicer. This obligation to
advance with respect to each Mortgage Loan will continue up to and
including the first of the month following the date on which the
related Mortgaged Property is sold at a foreclosure sale or is
acquired by the Trust Fund by deed in lieu of foreclosure or
otherwise. All such advances received by the Master Servicer shall
be deposited promptly by it in the Custodial Account.
(b) The
Subservicer may also be required, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the
Custodial Account interest at the Adjusted Mortgage Rate (or
Modified Net Mortgage Rate plus the rate per annum at which the
Servicing Fee accrues in the case of a Modified Mortgage Loan) on
any Curtailment received by such Subservicer in respect of a
Mortgage Loan from the related Mortgagor during any month that is
to be applied by the Subservicer to reduce the unpaid principal
balance of the related Mortgage Loan as of the first day of such
month, from the date of application of such Curtailment to the
first day of the following month. Any amounts paid by a Subservicer
pursuant to the preceding sentence shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be
subject to its withdrawal or order from time to time pursuant to
Sections 3.10(a)(iv) and (v).
(c) In
addition to the Custodial Account and the Certificate Account, the
Master Servicer shall for any Nonsubserviced Mortgage Loan, and
shall cause the Subservicers for Subserviced Mortgage Loans to,
establish and maintain one or more Servicing Accounts and deposit
and retain therein all collections from the Mortgagors (or advances
from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items for the account of the Mortgagors.
Each Servicing Account shall satisfy the requirements for a
Subservicing Account and, to the extent permitted by the Program
Guide or as is otherwise acceptable to the Master Servicer, may
also function as a Subservicing Account. Withdrawals of amounts
related to the Mortgage Loans from the Servicing Accounts may be
made only to effect timely payment of taxes, assessments, hazard
insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items, to reimburse the Master Servicer
or Subservicer out of related collections for any payments made
pursuant to Sections 3.11 (with respect to the Primary Insurance
Policy) and 3.12(a) (with respect to hazard insurance), to refund
to any Mortgagors any sums as may be determined to be overages, to
pay interest, if required, to Mortgagors on balances in the
Servicing Account or to clear and terminate the Servicing Account
at the termination of this Agreement in accordance with
Section 9.01 or in accordance with the Program Guide. As part
of its servicing duties, the Master Servicer shall, and the
Subservicers will, pursuant to the Subservicing Agreements, be
required to pay to the Mortgagors interest on funds in this account
to the extent required by law.
(d) The
Master Servicer shall advance the payments referred to in the
preceding subsection that are not timely paid by the Mortgagors or
advanced by the Subservicers on the date when the tax, premium or
other cost for which such payment is intended is due, but the
Master Servicer shall be required so to advance only to the extent
that such advances, in the good faith judgment of the Master
Servicer, will be recoverable by the Master Servicer out of
Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation
and Information Regarding the Mortgage Loans.
In
the event that compliance with this Section 3.09 shall make
any Class of Certificates legal for investment by federally insured
savings and loan associations, the Master Servicer shall provide,
or cause the Subservicers to provide, to the Trustee, the Office of
Thrift Supervision or the FDIC and the supervisory agents and
examiners thereof access to the documentation regarding the
Mortgage Loans required by applicable regulations of the Office of
Thrift Supervision, such access being afforded without charge but
only upon reasonable request and during normal business hours at
the offices designated by the Master Servicer. The Master Servicer
shall permit such representatives to photocopy any such
documentation and shall provide equipment for that purpose at a
charge reasonably approximating the cost of such photocopying to
the Master Servicer.
Section 3.10. Permitted Withdrawals from the
Custodial Account.
(a) The
Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit
therein pursuant to Section 3.07 that are attributable to the
Mortgage Loans for the following purposes:
(i) to
make deposits into the Certificate Account in the amounts and in
the manner provided for in Section 4.01;
(ii) to
reimburse itself or the related Subservicer for previously
unreimbursed Advances, Servicing Advances or other expenses made
pursuant to Sections 3.01, 3.07(a), 3.08, 3.11, 3.12(a), 3.14 and
4.04 or otherwise reimbursable pursuant to the terms of this
Agreement, such withdrawal right being limited to amounts received
on the related Mortgage Loans (including, for this purpose, REO
Proceeds, Insurance Proceeds, Liquidation Proceeds and proceeds
from the purchase of a Mortgage Loan pursuant to Section 2.02,
2.03, 2.04 or 4.07) which represent (A) Late Collections of Monthly
Payments for which any such advance was made in the case of
Subservicer Advances or Advances pursuant to Section 4.04 and
(B) recoveries of amounts in respect of which such advances
were made in the case of Servicing Advances;
(iii) to
pay to itself or the related Subservicer (if not previously
retained by such Subservicer) out of each payment received by the
Master Servicer on account of interest on a Mortgage Loan as
contemplated by Sections 3.14 and 3.16, an amount equal to that
remaining portion of any such payment as to interest (but not in
excess of the Servicing Fee and the Subservicing Fee, if not
previously retained) which, when deducted, will result in the
remaining amount of such interest being interest at a rate per
annum equal to the Net Mortgage Rate (or Modified Net Mortgage Rate
in the case of a Modified Mortgage Loan) on the amount specified in
the amortization schedule of the related Mortgage Loan as the
principal balance thereof at the beginning of the period respecting
which such interest was paid after giving effect to any previous
Curtailments;
(iv) to
pay to itself as additional servicing compensation any interest or
investment income earned on funds and other property deposited in
or credited to the Custodial Account that it is entitled to
withdraw pursuant to Section 3.07(c);
(v) to
pay to itself as additional servicing compensation any Foreclosure
Profits, and any amounts remitted by Subservicers as interest in
respect of Curtailments pursuant to
Section 3.08(b);
(vi) to
pay to itself, a Subservicer, a Seller, Residential Funding, the
Depositor or any other appropriate Person, as the case may be, with
respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased or otherwise transferred pursuant
to Section 2.02, 2.03, 2.04, 4.07 or 9.01, all amounts
received thereon and not required to be distributed to
Certificateholders as of the date on which the related Stated
Principal Balance or Purchase Price is determined;
(vii) to
reimburse itself or the related Subservicer for any Nonrecoverable
Advance or Advances in the manner and to the extent provided in
subsection (c) below, and any Advance or Servicing Advance made in
connection with a modified Mortgage Loan that is in default or, in
the judgment of the Master Servicer, default is reasonably
foreseeable pursuant to Section 3.07(a), to the extent the
amount of the Advance or Servicing Advance was added to the Stated
Principal Balance of the Mortgage Loan in a prior calendar
month;
(viii) to
reimburse itself or the Depositor for expenses incurred by and
reimbursable to it or the Depositor pursuant to
Section 3.01(a), 3.11, 3.13, 3.14(c), 6.03, 10.01 or
otherwise, or in connection with enforcing any repurchase,
substitution or indemnification obligation of any Seller (other
than the Depositor or an Affiliate of the Depositor) pursuant to
the related Seller’s Agreement;
(ix) to
reimburse itself for amounts expended by it (a) pursuant to
Section 3.14 in good faith in connection with the restoration
of property damaged by an Uninsured Cause, and (b) in
connection with the liquidation of a Mortgage Loan or disposition
of an REO Property to the extent not otherwise reimbursed pursuant
to clause (ii) or (viii) above; and
(x) to
withdraw any amount deposited in the Custodial Account that was not
required to be deposited therein pursuant to Section 3.07,
including any payoff fees or penalties or any other additional
amounts payable to the Master Servicer or Subservicer pursuant to
the terms of the Mortgage Note.
(b)
Since, in connection with withdrawals pursuant to clauses (ii),
(iii), (v) and (vi), the Master Servicer’s entitlement
thereto is limited to collections or other recoveries on the
related Mortgage Loan, the Master Servicer shall keep and maintain
separate accounting, on a Mortgage Loan by Mortgage Loan basis, for
the purpose of justifying any withdrawal from the Custodial Account
pursuant to such clauses.
(c) The
Master Servicer shall be entitled to reimburse itself or the
related Subservicer for any advance made in respect of a Mortgage
Loan that the Master Servicer determines to be a Nonrecoverable
Advance by withdrawal from the Custodial Account of amounts on
deposit therein attributable to the Mortgage Loans on any
Certificate Account Deposit Date succeeding the date of such
determination. Such right of reimbursement in respect of a
Nonrecoverable Advance relating to an Advance made pursuant to
Section 4.04 on any such Certificate Account Deposit Date
shall be limited to an amount not exceeding the portion of such
advance previously paid to Certificateholders (and not theretofore
reimbursed to the Master Servicer or the related
Subservicer).
Section 3.11. Maintenance of Primary Insurance
Coverage.
(a) The
Master Servicer shall not take, or permit any Subservicer to take,
any action which would result in noncoverage under any applicable
Primary Insurance Policy of any loss which, but for the actions of
the Master Servicer or Subservicer, would have been covered
thereunder. To the extent coverage is available, the Master
Servicer shall keep or cause to be kept in full force and effect
each such Primary Insurance Policy until the principal balance of
the related Mortgage Loan secured by a Mortgaged Property is
reduced to 80% or less of the Appraised Value at origination in the
case of such a Mortgage Loan having a Loan-to-Value Ratio at
origination in excess of 80%, provided that such Primary Insurance
Policy was in place as of the Cut-off Date and the Master Servicer
had knowledge of such Primary Insurance Policy. The Master Servicer
shall not cancel or refuse to renew any such Primary Insurance
Policy applicable to a Nonsubserviced Mortgage Loan, or consent to
any Subservicer canceling or refusing to renew any such Primary
Insurance Policy applicable to a Mortgage Loan subserviced by it,
that is in effect at the date of the initial issuance of the
Certificates and is required to be kept in force hereunder unless
the replacement Primary Insurance Policy for such canceled or
non-renewed policy is maintained with an insurer whose
claims-paying ability is acceptable to each Rating Agency for
mortgage pass-through certificates having a rating equal to or
better than the lower of the then-current rating or the rating
assigned to the Certificates as of the Closing Date by such Rating
Agency.
(b) In
connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present or to cause
the related Subservicer to present, on behalf of the Master
Servicer, the Subservicer, if any, the Trustee and
Certificateholders, claims to the insurer under any Primary
Insurance Policies, in a timely manner in accordance with such
policies, and, in this regard, to take or cause to be taken such
reasonable action as shall be necessary to permit recovery under
any Primary Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 3.07, any Insurance Proceeds collected by
or remitted to the Master Servicer under any Primary Insurance
Policies shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.10.
Section 3.12. Maintenance of Fire Insurance
and Omissions and Fidelity Coverage.
(a) The
Master Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage in an amount which is equal
to the lesser of the principal balance owing on such Mortgage Loan
(together with the principal balance of any mortgage loan secured
by a lien that is senior to the Mortgage Loan) or 100% of the
insurable value of the improvements; provided, however ,
that such coverage may not be less than the minimum amount required
to fully compensate for any loss or damage on a replacement cost
basis. To the extent it may do so without breaching the
related Subservicing Agreement, the Master Servicer shall replace
any Subservicer that does not cause such insurance, to the extent
it is available, to be maintained. The Master Servicer shall also
cause to be maintained on property acquired upon foreclosure, or
deed in lieu of foreclosure, of any Mortgage Loan, fire insurance
with extended coverage in an amount which is at least equal to the
amount necessary to avoid the application of any co-insurance
clause contained in the related hazard insurance policy. Pursuant
to Section 3.07, any amounts collected by the Master Servicer
under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or property
thus acquired or amounts released to the Mortgagor in accordance
with the Master Servicer’s normal servicing procedures) shall
be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.10. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the
purpose of calculating monthly distributions to Certificateholders,
be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such
costs shall be recoverable by the Master Servicer out of related
late payments by the Mortgagor or out of Insurance Proceeds and
Liquidation Proceeds to the extent permitted by Section 3.10.
It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant
to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. Whenever the
improvements securing a Mortgage Loan are located at the time of
origination of such Mortgage Loan in a federally designated special
flood hazard area, the Master Servicer shall cause flood insurance
(to the extent available) to be maintained in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i)
the amount required to compensate for any loss or damage to the
Mortgaged Property on a replacement cost basis and (ii) the maximum
amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that
the area in which such Mortgaged Property is located is
participating in such program).
In
the event that the Master Servicer shall obtain and maintain a
blanket fire insurance policy with extended coverage insuring
against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set
forth in the first sentence of this Section 3.12(a), it being
understood and agreed that such policy may contain a deductible
clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged
Property a policy complying with the first sentence of this
Section 3.12(a) and there shall have been a loss which would
have been covered by such policy, deposit in the Certificate
Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master
Servicer shall be made on the Certificate Account Deposit Date next
preceding the Distribution Date which occurs in the month following
the month in which payments under any such policy would have been
deposited in the Custodial Account. In connection with its
activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee
and Certificateholders, claims under any such blanket
policy.
(b) The
Master Servicer shall obtain and maintain at its own expense and
keep in full force and effect throughout the term of this Agreement
a blanket fidelity bond and an errors and omissions insurance
policy covering the Master Servicer’s officers and employees
and other persons acting on behalf of the Master Servicer in
connection with its activities under this Agreement. The amount of
coverage shall be at least equal to the coverage that would be
required by Fannie Mae or Freddie Mac, whichever is greater, with
respect to the Master Servicer if the Master Servicer were
servicing and administering the Mortgage Loans for Fannie Mae or
Freddie Mac. In the event that any such bond or policy ceases to be
in effect, the Master Servicer shall obtain a comparable
replacement bond or policy from an issuer or insurer, as the case
may be, meeting the requirements, if any, of the Program Guide and
acceptable to the Depositor. Coverage of the Master Servicer under
a policy or bond obtained by an Affiliate of the Master Servicer
and providing the coverage required by this Section 3.12(b)
shall satisfy the requirements of this
Section 3.12(b).
Section 3.13. Enforcement of
Due-on-Sale Clauses; Assumption and Modification Agreements;
Certain Assignments .
(a) When
any Mortgaged Property is conveyed by the Mortgagor, the Master
Servicer or Subservicer, to the extent it has knowledge of such
conveyance, shall enforce any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable
law and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under
any Required Insurance Policy. Notwithstanding the foregoing: (i)
the Master Servicer shall not be deemed to be in default under this
Section 3.13(a) by reason of any transfer or assumption which
the Master Servicer is restricted by law from preventing; and (ii)
if the Master Servicer determines that it is reasonably likely that
any Mortgagor will bring, or if any Mortgagor does bring, legal
action to declare invalid or otherwise avoid enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage, the
Master Servicer shall not be required to enforce the due-on-sale
clause or to contest such action.
(b)
Subject to the Master Servicer’s duty to enforce any
due-on-sale clause to the extent set forth in Section 3.13(a),
in any case in which a Mortgaged Property is to be conveyed to a
Person by a Mortgagor, and such Person is to enter into an
assumption or modification agreement or supplement to the Mortgage
Note or Mortgage which requires the signature of the Trustee, or if
an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the
Master Servicer is authorized, subject to the requirements of the
sentence next following, to execute and deliver, on behalf of the
Trustee, the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms
of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the
Mortgaged Property to such Person; provided, however , none
of such terms and requirements shall both constitute a
“significant modification” effecting an exchange or
reissuance of such Mortgage Loan under the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder)
and cause any REMIC created hereunder to fail to qualify as a
REMIC under the Code or the imposition of any tax on
“prohibited transactions” or
“contributions” after the Startup Date under the REMIC
Provisions. The Master Servicer shall execute and deliver such
documents only if it reasonably determines that (i) its execution
and delivery thereof will not conflict with or violate any terms of
this Agreement or cause the unpaid balance and interest on the
Mortgage Loan to be uncollectible in whole or in part, (ii) any
required consents of insurers under any Required Insurance Policies
have been obtained and (iii) subsequent to the closing of the
transaction involving the assumption or transfer (A) the Mortgage
Loan will continue to be secured by a first mortgage lien pursuant
to the terms of the Mortgage, (B) such transaction will not
adversely affect the coverage under any Required Insurance
Policies, (C) the Mortgage Loan will fully amortize over the
remaining term thereof, (D) no material term of the Mortgage Loan
(including the interest rate on the Mortgage Loan) will be altered
nor will the term of the Mortgage Loan be changed and (E) if the
seller/transferor of the Mortgaged Property is to be released from
liability on the Mortgage Loan, the buyer/transferee of the
Mortgaged Property would be qualified to assume the Mortgage Loan
based on generally comparable credit quality and such release will
not (based on the Master Servicer’s or Subservicer’s
good faith determination) adversely affect the collectability of
the Mortgage Loan. Upon receipt of appropriate instructions from
the Master Servicer in accordance with the foregoing, the Trustee
shall execute any necessary instruments for such assumption or
substitution of liability as directed by the Master Servicer. Upon
the closing of the transactions contemplated by such documents, the
Master Servicer shall cause the originals or true and correct
copies of the assumption agreement, the release (if any), or the
modification or supplement to the Mortgage Note or Mortgage to be
delivered to the Trustee or the Custodian and deposited with the
Mortgage File for such Mortgage Loan. Any fee collected by the
Master Servicer or such related Subservicer for entering into an
assumption or substitution of liability agreement will be retained
by the Master Servicer or such Subservicer as additional servicing
compensation.
(c) The
Master Servicer or the related Subservicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for a
partial release of the related Mortgaged Property, the granting of
an easement thereon in favor of another Person, any alteration or
demolition of the related Mortgaged Property or other similar
matters if it has determined, exercising its good faith business
judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and
full collectability of, such Mortgage Loan would not be adversely
affected thereby and that any REMIC created hereunder would not
fail to continue to qualify as a REMIC under the Code as a result
thereof and (subject to Section 10.01(f)) that no tax on
“prohibited transactions” or
“contributions” after the Startup Date would be imposed
on any REMIC created hereunder as a result thereof. Any fee
collected by the Master Servicer or the related Subservicer for
processing such a request will be retained by the Master Servicer
or such Subservicer as additional servicing
compensation.
(d)
Subject to any other applicable terms and conditions of this
Agreement, the Trustee and Master Servicer shall be entitled to
approve an assignment in lieu of satisfaction with respect to any
Mortgage Loan, provided the obligee with respect to such Mortgage
Loan following such proposed assignment provides the Trustee and
Master Servicer with a “Lender Certification for Assignment
of Mortgage Loan” in the form attached hereto as
Exhibit M, in form and substance satisfactory to the Trustee
and Master Servicer, providing the following: (i) that the Mortgage
Loan is secured by Mortgaged Property located in a jurisdiction in
which an assignment in lieu of satisfaction is required to preserve
lien priority, minimize or avoid mortgage recording taxes or
otherwise comply with, or facilitate a refinancing under, the laws
of such jurisdiction; (ii) that the substance of the assignment is,
and is intended to be, a refinancing of such Mortgage Loan and that
the form of the transaction is solely to comply with, or facilitate
the transaction under, such local laws; (iii) that the Mortgage
Loan following the proposed assignment will have a rate of interest
more than the greater of (A) 3% and (B) 5% of the annual yield of
the unmodified Mortgage Loan, below or above the rate of interest
on such Mortgage Loan prior to such proposed assignment; and (iv)
that such assignment is at the request of the borrower under the
related Mortgage Loan. Upon approval of an assignment in lieu of
satisfaction with respect to any Mortgage Loan, the Master Servicer
shall receive cash in an amount equal to the unpaid principal
balance of and accrued interest on such Mortgage Loan, and the
Master Servicer shall treat such amount as a Principal Prepayment
in Full with respect to such Mortgage Loan for all purposes
hereof.
Section 3.14. Realization Upon Defaulted
Mortgage Loans.
(a) The
Master Servicer shall foreclose upon or otherwise comparably
convert (which may include an REO Acquisition) the ownership of
properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments pursuant to
Section 3.07. Alternatively, the Master Servicer may take
other actions in respect of a defaulted Mortgage Loan, which may
include (i) accepting a short sale (a payoff of the Mortgage Loan
for an amount less than the total amount contractually owed in
order to facilitate a sale of the Mortgaged Property by the
Mortgagor) or permitting a short refinancing (a payoff of the
Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate refinancing transactions
by the Mortgagor not involving a sale of the Mortgaged Property),
(ii) arranging for a repayment plan or (iii) agreeing to a
modification in accordance with Section 3.07. In connection
with such foreclosure or other conversion or action, the Master
Servicer shall, consistent with Section 3.11, follow such
practices and procedures as it shall deem necessary or advisable,
as shall be normal and usual in its general mortgage servicing
activities and as shall be required or permitted by the Program
Guide; provided that the Master Servicer shall not be liable in any
respect hereunder if the Master Servicer is acting in connection
with any such foreclosure or other conversion or action in a manner
that is consistent with the provisions of this Agreement. The
Master Servicer, however, shall not be required to expend its own
funds or incur other reimbursable charges in connection with any
foreclosure, or attempted foreclosure which is not completed, or
towards the correction of any default on a related senior mortgage
loan, or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to
Holders of Certificates of one or more Classes after reimbursement
to itself for such expenses or charges and (ii) that such expenses
and charges will be recoverable to it through Liquidation Proceeds,
Insurance Proceeds, or REO Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Custodial Account
pursuant to Section 3.10, whether or not such expenses and
charges are actually recoverable from related Liquidation Proceeds,
Insurance Proceeds or REO Proceeds). In the event of such a
determination by the Master Servicer pursuant to this
Section 3.14(a), the Master Servicer shall be entitled to
reimbursement of its funds so expended pursuant to
Section 3.10. In addition, the Master Servicer may pursue any
remedies that may be available in connection with a breach of a
representation and warranty with respect to any such Mortgage Loan
in accordance with Sections 2.03 and 2.04. However, the Master
Servicer is not required to continue to pursue both foreclosure (or
similar remedies) with respect to the Mortgage Loans and remedies
in connection with a breach of a representation and warranty if the
Master Servicer determines in its reasonable discretion that one
such remedy is more likely to result in a greater recovery as to
the Mortgage Loan. Upon the occurrence of a Cash Liquidation or REO
Disposition, following the deposit in the Custodial Account of all
Insurance Proceeds, Liquidation Proceeds and other payments and
recoveries referred to in the definition of “Cash
Liquidation” or “REO Disposition,” as applicable,
upon receipt by the Trustee of written notification of such deposit
signed by a Servicing Officer, the Trustee or any Custodian, as the
case may be, shall release to the Master Servicer the related
Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment prepared by the Master
Servicer, in each case without recourse, as shall be necessary to
vest in the Master Servicer or its designee, as the case may be,
the related Mortgage Loan, and thereafter such Mortgage Loan shall
not be part of the Trust Fund. Notwithstanding the foregoing
or any other provision of this Agreement, in the Master
Servicer’s sole discretion with respect to any defaulted
Mortgage Loan or REO Property as to either of the following
provisions, (i) a Cash Liquidation or REO Disposition may be deemed
to have occurred if substantially all amounts expected by the
Master Servicer to be received in connection with the related
defaulted Mortgage Loan or REO Property have been received, and
(ii) for purposes of determining the amount of any Liquidation
Proceeds, Insurance Proceeds, REO Proceeds or other unscheduled
collections or the amount of any Realized Loss, the Master Servicer
may take into account minimal amounts of additional receipts
expected to be received or any estimated additional liquidation
expenses expected to be incurred in connection with the related
defaulted Mortgage Loan or REO Property.
(b) In
the event that title to any Mortgaged Property is acquired by the
Trust Fund as an REO Property by foreclosure or by deed in lieu of
foreclosure, the deed or certificate of sale shall be issued to the
Trustee or to its nominee on behalf of Certificateholders.
Notwithstanding any such acquisition of title and cancellation of
the related Mortgage Loan, such REO Property shall (except as
otherwise expressly provided herein) be considered to be an
Outstanding Mortgage Loan held in the Trust Fund until such time as
the REO Property shall be sold. Consistent with the foregoing for
purposes of all calculations hereunder so long as such REO Property
shall be considered to be an Outstanding Mortgage Loan it shall be
assumed that, notwithstanding that the indebtedness evidenced by
the related Mortgage Note shall have been discharged, such Mortgage
Note and the related amortization schedule in effect at the time of
any such acquisition of title (after giving effect to any previous
Curtailments and before any adjustment thereto by reason of any
bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period) remain in effect.
(c) In
the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer on behalf of the
Trust Fund shall dispose of such REO Property as soon as
practicable, giving due consideration to the interests of the
Certificateholders, but in all cases, within three full years after
the taxable year of its acquisition by the Trust Fund for purposes
of Section 860G(a)(8) of the Code (or such shorter period as
may be necessary under applicable state (including any state in
which such property is located) law to maintain the status of each
REMIC created hereunder as a REMIC under applicable state law and
avoid taxes resulting from such property failing to be foreclosure
property under applicable state law) or, at the expense of the
Trust Fund, request, more than 60 days before the day on which such
grace period would otherwise expire, an extension of such grace
period unless the Master Servicer (subject to
Section 10.01(f)) obtains for the Trustee an Opinion of
Counsel, addressed to the Trustee and the Master Servicer, to the
effect that the holding by the Trust Fund of such REO Property
subsequent to such period will not result in the imposition of
taxes on “prohibited transactions” as defined in
Section 860F of the Code or cause any REMIC created hereunder
to fail to qualify as a REMIC (for federal (or any applicable State
or local) income tax purposes) at any time that any Certificates
are outstanding, in which case the Trust Fund may continue to hold
such REO Property (subject to any conditions contained in such
Opinion of Counsel). The Master Servicer shall be entitled to be
reimbursed from the Custodial Account for any costs incurred in
obtaining such Opinion of Counsel, as provided in
Section 3.10. Notwithstanding any other provision of this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or allowed to continue to be rented) or otherwise used by
or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such REO Property to fail to qualify as
“foreclosure property” within the meaning of
Section 860G(a)(8) of the Code or (ii) subject any REMIC
created hereunder to the imposition of any federal income taxes on
the income earned from such REO Property, including any taxes
imposed by reason of Section 860G(c) of the Code, unless the
Master Servicer has agreed to indemnify and hold harmless the Trust
Fund with respect to the imposition of any such taxes.
(d) The
proceeds of any Cash Liquidation, REO Disposition or purchase or
repurchase of any Mortgage Loan pursuant to the terms of this
Agreement, as well as any recovery (other than Subsequent
Recoveries) resulting from a collection of Liquidation Proceeds,
Insurance Proceeds or REO Proceeds, will be applied in the
following order of priority: first , to reimburse the Master
Servicer or the related Subservicer in accordance with
Section 3.10(a)(ii); second , to the Certificateholders
to the extent of accrued and unpaid interest on the Mortgage Loan,
and any related REO Imputed Interest, at the Net Mortgage Rate (or
the Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan), to the Due Date in the related Due Period prior to the
Distribution Date on which such amounts are to be distributed;
third , to the Certificateholders as a recovery of principal
on the Mortgage Loan (or REO Property); fourth , to all
Servicing Fees and Subservicing Fees payable therefrom (and the
Master Servicer and the Subservicer shall have no claims for any
deficiencies with respect to such fees which result from the
foregoing allocation); and fifth , to Foreclosure
Profits.
(e) In
the event of a default on a Mortgage Loan one or more of whose
obligors is not a United States Person, in connection with any
foreclosure or acquisition of a deed in lieu of foreclosure
(together, “foreclosure”) in respect of such Mortgage
Loan, the Master Servicer shall cause compliance with the
provisions of Treasury Regulation Section 1.1445-2(d)(3) (or
any successor thereto) necessary to assure that no withholding tax
obligation arises with respect to the proceeds of such foreclosure
except to the extent, if any, that proceeds of such foreclosure are
required to be remitted to the obligors on such Mortgage
Loan.
Section 3.15. Trustee to Cooperate; Release of
Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or upon
the receipt by the Master Servicer of a notification that payment
in full will be escrowed in a manner customary for such purposes,
the Master Servicer shall immediately notify the Trustee (if it
holds the related Mortgage File) or the Custodian by a
certification of a Servicing Officer (which certification shall
include a statement to the effect that all amounts received or to
be received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 3.07
have been or will be so deposited), substantially in the form
attached hereto as Exhibit G, or, in the case of a Custodian,
an electronic request in a form acceptable to the Custodian,
requesting delivery to it of the Mortgage File. Upon receipt of
such certification and request, the Trustee shall promptly release,
or cause the Custodian to release, the related Mortgage File to the
Master Servicer. The Master Servicer is authorized to execute and
deliver to the Mortgagor the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such
instrument releasing the lien of the Mortgage, together with the
Mortgage Note with, as appropriate, written evidence of
cancellation thereon and to cause the removal from the registration
on the MERS® System of such Mortgage and to execute and
deliver, on behalf of the Trustee and the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation or
of partial or full release, including any applicable UCC
termination statements. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be
chargeable to the Custodial Account or the Certificate
Account.
(b) From
time to time as is appropriate for the servicing or foreclosure of
any Mortgage Loan, the Master Servicer shall deliver to the
Custodian, with a copy to the Trustee, a certificate of a Servicing
Officer substantially in the form attached as Exhibit G
hereto, or, in the case of a Custodian, an electronic request in a
form acceptable to the Custodian, requesting that possession of
all, or any document constituting part of, the Mortgage File be
released to the Master Servicer and certifying as to the reason for
such release and that such release will not invalidate any
insurance coverage provided in respect of the Mortgage Loan under
any Required Insurance Policy. Upon receipt of the foregoing, the
Trustee shall deliver, or cause the Custodian to deliver, the
Mortgage File or any document therein to the Master Servicer. The
Master Servicer shall cause each Mortgage File or any document
therein so released to be returned to the Trustee, or the Custodian
as agent for the Trustee when the need therefor by the Master
Servicer no longer exists, unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the
Mortgage File or such document has been delivered directly or
through a Subservicer to an attorney, or to a public trustee or
other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered directly or
through a Subservicer to the Trustee a certificate of a Servicing
Officer certifying as to the name and address of the Person to
which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. In the event of the
liquidation of a Mortgage Loan, the Trustee shall deliver the
Request for Release with respect thereto to the Master Servicer
upon the Trustee’s receipt of notification from the Master
Servicer of the deposit of the related Liquidation Proceeds in the
Custodial Account.
(c) The
Trustee or the Master Servicer on the Trustee’s behalf shall
execute and deliver to the Master Servicer, if necessary, any court
pleadings, requests for trustee’s sale or other documents
necessary to the foreclosure or trustee’s sale in respect of
a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or
to obtain a deficiency judgment, or to enforce any other remedies
or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Together with such documents or
pleadings (if signed by the Trustee), the Master Servicer shall
deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the
Trustee and certifying as to the reason such documents or pleadings
are required and that the execution and delivery thereof by the
Trustee shall not invalidate any insurance coverage under any
Required Insurance Policy or invalidate or otherwise affect the
lien of the Mortgage, except for the termination of such a lien
upon completion of the foreclosure or trustee’s
sale.
Section 3.16. Servicing and Other
Compensation; Compensating Interest.
(a) &
