BEAR STEARNS ASSET BACKED SECURITIES
I LLC
Depositor
NEW CENTURY MORTGAGE
CORPORATION
Servicer
and
DEUTSCHE BANK NATIONAL TRUST
COMPANY
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2005
Carrington Mortgage Loan Trust, Series
2005-NC2
Asset Backed Pass-Through
Certificates
Series 2005-NC2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
|
SECTION 1.01
|
Defined Terms.
|
|
SECTION 1.02
|
Allocation of Certain Interest
Shortfalls.
|
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
|
SECTION 2.01
|
Conveyance of the Mortgage Loans.
|
|
SECTION 2.02
|
Acceptance of REMIC I by Trustee.
|
|
SECTION 2.03
|
Repurchase or Substitution of Mortgage Loans by
the Responsible Party and the Seller.
|
|
SECTION 2.04
|
Reserved.
|
|
SECTION 2.05
|
Representations, Warranties and Covenants of the
Servicer.
|
|
SECTION 2.06
|
Issuance of the REMIC I Regular Interests and
the Class R-I Interest.
|
|
SECTION 2.07
|
Conveyance of the REMIC I Regular Interests;
Acceptance of REMIC II by the Trustee.
|
|
SECTION 2.08
|
Issuance of Class R Certificates.
|
ARTICLE III
ADMINISTRATION AND SERVICING OF THE
MORTGAGE LOANS
|
SECTION 3.01
|
Servicer to Act as Servicer.
|
|
SECTION 3.02
|
Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
|
|
SECTION 3.03
|
Successor Sub-Servicers.
|
|
SECTION 3.04
|
Liability of the Servicer.
|
|
SECTION 3.05
|
No Contractual Relationship Between
Sub-Servicers, the Trustee or the Certificateholders.
|
|
SECTION 3.06
|
Assumption or Termination of Sub-Servicing
Agreements by the Trustee.
|
|
SECTION 3.07
|
Collection of Certain Mortgage Loan
Payments.
|
|
SECTION 3.08
|
Sub-Servicing Accounts.
|
|
SECTION 3.09
|
Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
|
|
SECTION 3.10
|
Collection Account and Distribution
Account.
|
|
SECTION 3.11
|
Withdrawals from the Collection Account and
Distribution Account.
|
|
SECTION 3.12
|
Investment of Funds in the Collection Account
and the Distribution Account.
|
|
SECTION 3.13
|
[Reserved].
|
|
SECTION 3.14
|
Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
|
|
SECTION 3.15
|
Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
|
|
SECTION 3.16
|
Realization Upon Defaulted Mortgage
Loans.
|
|
SECTION 3.17
|
Trustee to Cooperate; Release of Mortgage
Files.
|
|
SECTION 3.18
|
Servicing Compensation.
|
|
SECTION 3.19
|
Reports to the Trustee and Others; Collection
Account Statements.
|
|
SECTION 3.20
|
Statement as to Compliance.
|
|
SECTION 3.21
|
Independent Public Accountants’ Servicing
Report.
|
|
SECTION 3.22
|
Access to Certain Documentation.
|
|
SECTION 3.23
|
Title, Management and Disposition of REO
Property.
|
|
SECTION 3.24
|
Obligations of the Servicer in Respect of
Prepayment Interest Shortfalls.
|
|
SECTION 3.25
|
Obligations of the Servicer in Respect of
Mortgage Rates and Monthly Payments.
|
|
SECTION 3.26
|
Advance Facility.
|
|
SECTION 3.27
|
[Reserved].
|
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS
|
SECTION 4.01
|
Distributions.
|
|
SECTION 4.02
|
Statements to Certificateholders.
|
|
SECTION 4.03
|
Remittance Reports; Advances.
|
|
SECTION 4.04
|
Allocation of Realized Losses.
|
|
SECTION 4.05
|
Compliance with Withholding
Requirements
|
|
SECTION 4.06
|
Exchange Commission; Additional
Information.
|
ARTICLE V
THE CERTIFICATES
|
SECTION 5.01
|
The Certificates.
|
|
SECTION 5.02
|
Registration of Transfer and Exchange of
Certificates.
|
|
SECTION 5.03
|
Mutilated, Destroyed, Lost or Stolen
Certificates.
|
|
SECTION 5.04
|
Persons Deemed Owners.
|
|
SECTION 5.05
|
Certain Available Information.
|
ARTICLE VI
THE DEPOSITOR AND THE
SERVICER
|
SECTION 6.01
|
Liability of the Depositor and the
Servicer.
|
|
SECTION 6.02
|
Merger or Consolidation of the Depositor or the
Servicer.
|
|
SECTION 6.03
|
Limitation on Liability of the Depositor, the
Servicer and Others.
|
|
SECTION 6.04
|
Limitation on Resignation of the
Servicer.
|
|
SECTION 6.05
|
Rights of the Depositor in Respect of the
Servicer.
|
ARTICLE VII
DEFAULT
|
SECTION 7.01
|
Servicer Events of Default.
|
|
SECTION 7.02
|
Trustee to Act; Appointment of
Successor.
|
|
SECTION 7.03
|
Notification to Certificateholders.
|
|
SECTION 7.04
|
Waiver of Servicer Events of Default.
|
ARTICLE VIII
CONCERNING THE TRUSTEE
|
SECTION 8.01
|
Duties of Trustee.
|
|
SECTION 8.02
|
Certain Matters Affecting the
Trustee.
|
|
SECTION 8.03
|
Trustee Not Liable for Certificates or Mortgage
Loans.
|
|
SECTION 8.04
|
Trustee May Own Certificates.
|
|
SECTION 8.05
|
Trustee’s Fees and Expenses.
|
|
SECTION 8.06
|
Eligibility Requirements for Trustee.
|
|
SECTION 8.07
|
Resignation and Removal of the
Trustee.
|
|
SECTION 8.08
|
Successor Trustee.
|
|
SECTION 8.09
|
Merger or Consolidation of Trustee.
|
|
SECTION 8.10
|
Appointment of Co-Trustee or Separate
Trustee.
|
|
SECTION 8.11
|
Reserved.
|
|
SECTION 8.12
|
Appointment of Office or Agency.
|
|
SECTION 8.13
|
Representations and Warranties of the
Trustee.
|
ARTICLE IX
TERMINATION
|
SECTION 9.01
|
Termination Upon Repurchase or Liquidation of
All Mortgage Loans.
|
|
SECTION 9.02
|
Additional Termination Requirements.
|
ARTICLE X
REMIC PROVISIONS
|
SECTION 10.01
|
REMIC Administration.
|
|
SECTION 10.02
|
Prohibited Transactions and
Activities.
|
|
SECTION 10.03
|
Servicer and Trustee Indemnification.
|
ARTICLE XI
MISCELLANEOUS PROVISIONS
|
SECTION 11.01
|
Amendment.
|
|
SECTION 11.02
|
Recordation of Agreement;
Counterparts.
|
|
SECTION 11.03
|
Limitation on Rights of
Certificateholders.
|
|
SECTION 11.04
|
Governing Law.
|
|
SECTION 11.05
|
Notices.
|
|
SECTION 11.06
|
Severability of Provisions.
|
|
SECTION 11.07
|
Notice to Rating Agencies.
|
|
SECTION 11.08
|
Article and Section References.
|
|
SECTION 11.09
|
Grant of Security Interest.
|
|
SECTION 11.10
|
Intention of Parties.
|
|
SECTION 11.11
|
Assignment.
|
|
SECTION 11.12
|
Inspection and Audit Rights.
|
|
SECTION 11.13
|
Certificates Nonassessable and Fully
Paid.
|
ARTICLE XII
RIGHTS OF THE CLASS CE
CERTIFICATEHOLDER
|
SECTION 12.01
|
Reports and Notices.
|
|
SECTION 12.02
|
Class CE Certificateholder’s Directions
With Respect to Defaulted Mortgage Loans.
|
Exhibits
|
Exhibit A-1
|
Form of Class A-1 Certificate
|
|
Exhibit A-2
|
Form of Class A-2 Certificate
|
|
Exhibit A-3
|
Form of Class A-3 Certificate
|
|
Exhibit A-4
|
Form of Class M-1 Certificate
|
|
Exhibit A-5
|
Form of Class M-2 Certificate
|
|
Exhibit A-6
|
Form of Class M-3 Certificate
|
|
Exhibit A-7
|
Form of Class M-4 Certificate
|
|
Exhibit A-8
|
Form of Class M-5 Certificate
|
|
Exhibit A-9
|
Form of Class M-6 Certificate
|
|
Exhibit A-10
|
Form of Class M-7 Certificate
|
|
Exhibit A-11
|
Form of Class M-8 Certificate
|
|
Exhibit A-12
|
Form of Class M-9 Certificate
|
|
Exhibit A-13
|
Form of Class CE Certificate
|
|
Exhibit A-14
|
Form of Class P Certificate
|
|
Exhibit A-15
|
Form of Class R Certificate
|
|
Exhibit B
|
[Reserved]
|
|
Exhibit C-1
|
Form of Trustee’s Initial
Certification
|
|
Exhibit C-2
|
Form of Trustee’s Final
Certification
|
|
Exhibit D
|
Form of Mortgage Loan Purchase
Agreement
|
|
Exhibit E
|
Request for Release
|
|
Exhibit F-1
|
Form of Transferor Representation Letter and
Form of Transferee Representation Letter in Connection with
Transfer of the Private Certificates Pursuant to Rule 144A Under
the 1933 Act
|
|
Exhibit F-2
|
Form of Transfer Affidavit and Agreement and
Form of Transferor Affidavit in Connection with Transfer of
Residual Certificates
|
|
Exhibit G
|
Form of Certification with respect to ERISA and
the Code
|
|
Exhibit H
|
Form of Lost Note Affidavit
|
|
Exhibit I-1
|
Form of Certification to Be Provided by the
Servicer with Form 10-K
|
|
Exhibit I-2
|
Form of Certification to Be Provided to Servicer
by the Trustee
|
|
Exhibit J
|
Form of Annual Statement as to
Compliance
|
|
Exhibit K
|
Form of Cap Contracts
|
|
Exhibit L
|
Form of Report Pursuant to Section
12.01
|
|
Schedule 1
|
Mortgage Loan Schedule
|
|
Schedule 2
|
Prepayment Charge Schedule
|
This Pooling and Servicing
Agreement, is dated and effective as of May 1, 2005, among BEAR
STEARNS ASSET BACKED SECURITIES I LLC as Depositor, NEW CENTURY
MORTGAGE CORPORATION as Servicer and DEUTSCHE BANK NATIONAL TRUST
COMPANY as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell
pass-through certificates to be issued hereunder in multiple
classes, which in the aggregate will evidence the entire beneficial
ownership interest in each REMIC (as defined herein) created
hereunder. The Trust Fund will consist of a segregated pool of
assets comprised of the Mortgage Loans and certain other related
assets subject to this Agreement.
REMIC I
As provided herein, the Trustee will
elect to treat the segregated pool of assets consisting of the
Mortgage Loans and certain other related assets (other than any
Servicer Prepayment Charge Payment Amounts, the Net WAC Rate
Carryover Reserve Account and the Cap Contracts) subject to this
Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as “REMIC
I.” The Class R-I Interest will be the sole class of
“residual interests” in REMIC I for purposes of the
REMIC Provisions (as defined herein). The following table
irrevocably sets forth the designation, the REMIC I Remittance
Rate, the initial Uncertificated Balance and, for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC I
Regular Interests (as defined herein). None of the REMIC I Regular
Interests will be certificated.
|
|
|
Initial
Uncertificated
Balance
|
Latest Possible
Maturity Date
(1)
|
|
I-LTAA
|
Variable (2)
|
$
|
705,589,628.75
|
May 25, 2035
|
|
I-LTA1
|
Variable (2)
|
$
|
2,599,110.00
|
September 25, 2025
|
|
I-LTA2
|
Variable (2)
|
$
|
2,504,520.00
|
January 25, 2034
|
|
I-LTA3
|
Variable (2)
|
$
|
432,970.00
|
May 25, 2035
|
|
I-LTM1
|
Variable (2)
|
$
|
281,410.00
|
May 25, 2035
|
|
I-LTM2
|
Variable (2)
|
$
|
255,830.00
|
May 25, 2035
|
|
I-LTM3
|
Variable (2)
|
$
|
153,500.00
|
May 25, 2035
|
|
I-LTM4
|
Variable (2)
|
$
|
266,790.00
|
May 25, 2035
|
|
I-LTM5
|
Variable (2)
|
$
|
120,600.00
|
May 25, 2035
|
|
I-LTM6
|
Variable (2)
|
$
|
109,640.00
|
May 25, 2035
|
|
I-LTM7
|
Variable (2)
|
$
|
98,680.00
|
May 25, 2035
|
|
I-LTM8
|
Variable (2)
|
$
|
87,710.00
|
May 25, 2035
|
|
I-LTM9
|
Variable (2)
|
$
|
76,740.00
|
May 25, 2035
|
|
I-LTZZ
|
Variable (2)
|
$
|
7,412,288.34
|
May 25, 2035
|
|
I-LTP
|
Variable (2)
|
$
|
100.00
|
May 25, 2035
|
_______________
|
(1)
|
For purposes of Section 1.860G-1(a)(4)(iii) of
the Treasury regulations, the Distribution Date immediately
following the maturity date for the Mortgage Loan with the latest
maturity date has been designated as the “latest possible
maturity date” for each REMIC I Regular Interest.
|
|
(2)
|
Calculated in accordance with the definition of
“REMIC I Remittance Rate” herein.
|
REMIC II
As provided herein, the Trustee will
elect to treat the segregated pool of assets consisting of the
REMIC I Regular Interests as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as
“REMIC II.” The Class R-II Interest will evidence 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, the
Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the “latest possible maturity
date” for the indicated Classes of Certificates.
|
Designation
|
|
Pass-Through Rate
|
|
Initial Aggregate Certificate
Principal Balance
|
|
Latest Possible Maturity Date
(1)
|
|
|
Class A-1
|
|
Variable (2)
|
|
$
|
259,222,569.00
|
|
September 25, 2025
|
|
|
Class A-2
|
|
Variable (2)
|
|
$
|
250,452,000.00
|
|
January 25, 2034
|
|
|
Class A-3
|
|
Variable (2)
|
|
$
|
43,297,000.00
|
|
May 25, 2035
|
|
|
Class M-1
|
|
Variable (2)
|
|
$
|
28,141,000.00
|
|
May 25, 2035
|
|
|
Class M-2
|
|
Variable (2)
|
|
$
|
25,583,000.00
|
|
May 25, 2035
|
|
|
Class M-3
|
|
Variable (2)
|
|
$
|
15,350,000.00
|
|
May 25, 2035
|
|
|
Class M-4
|
|
Variable (2)
|
|
$
|
26,679,000.00
|
|
May 25, 2035
|
|
|
Class M-5
|
|
Variable (2)
|
|
$
|
12,060,000.00
|
|
May 25, 2035
|
|
|
Class M-6
|
|
Variable (2)
|
|
$
|
10,964,000.00
|
|
May 25, 2035
|
|
|
Class M-7
|
|
Variable (2)
|
|
$
|
9,868,000.00
|
|
May 25, 2035
|
|
|
Class M-8
|
|
Variable (2)
|
|
$
|
8,771,000.00
|
|
May 25, 2035
|
|
|
Class M-9
|
|
Variable (2)
|
|
$
|
7,674,000.00
|
|
May 25, 2035
|
|
|
Class CE
|
|
Variable (2)
|
|
$
|
21,927,948.09
|
|
May 25, 2035
|
|
|
Class P
|
|
N/A (2)
|
|
$
|
100.00
|
|
May 25, 2035
|
|
_______________
|
(1)
|
For purposes of Section 1.860G-1(a)(4)(iii) of
the Treasury regulations, the Distribution Date immediately
following the maturity date for the Mortgage Loans with the latest
maturity date has been designated as the “latest possible
maturity date” for each Class of Certificates.
|
|
(2)
|
Calculated in accordance with the definition of
“Pass-Through Rate” herein.
|
|
(3)
|
The Class CE Certificates will accrue interest
at its variable Pass-Through Rate on the Notional Amount of the
Class CE Certificates outstanding from time to time which shall
equal the aggregate Uncertificated Balance of the REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP). The Class CE
Certificates will not accrue interest on its Certificate Principal
Balance.
|
|
(4)
|
The Class P Certificates will not accrue
interest.
|
As of the Cut-off Date, the Mortgage
Loans had an aggregate Stated Principal Balance equal to
$719,989,517.09.
In consideration of the mutual
agreements herein contained, the Depositor, the Servicer and the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
|
SECTION 1.01
|
Defined Terms.
|
Whenever used in this Agreement,
including, without limitation, in the Preliminary Statement hereto,
the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article. Unless
otherwise specified, all calculations described herein shall be
made on the basis of a 360-day year consisting of twelve 30-day
months.
“Accepted Servicing
Practices”: The servicing standards set forth in Section
3.01.
“Accrued Certificate
Interest”: With respect to any Class A Certificate, Mezzanine
Certificate and the Class CE Certificates and each Distribution
Date, interest accrued during the related Interest Accrual Period
at the Pass-Through Rate for such Certificate for such Distribution
Date on the Certificate Principal Balance, in the case of the Class
A Certificates and the Mezzanine Certificates, or on the Notional
Amount, in the case of the Class CE Certificates, of such
Certificate immediately prior to such Distribution Date. The Class
P Certificates is not entitled to distributions in respect of
interest and, accordingly, will not accrue interest. All
distributions of interest on the Class A Certificates and the
Mezzanine Certificates will be calculated on the basis of a 360-day
year and the actual number of days in the applicable Interest
Accrual Period. All distributions of interest on the Class CE
Certificates will be based on a 360-day year consisting of twelve
30-day months. Accrued Certificate Interest with respect to each
Distribution Date, as to any Class A Certificate, Mezzanine
Certificate or the Class CE Certificates, shall be reduced by an
amount equal to the portion allocable to such Certificate pursuant
to Section 1.02 hereof of the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such Distribution Date to the
extent not covered by payments pursuant to Section 3.24 and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any, for
such Distribution Date. In addition, Accrued Certificate Interest
with respect to each Distribution Date, as to the Class CE
Certificates shall be reduced by an amount equal to the portion
allocable to the Class CE Certificates of Realized Losses, if any,
pursuant to Section 4.04 hereof.
“Adjustable-Rate Mortgage
Loan”: Each of the Mortgage Loans identified on the Mortgage
Loan Schedule as having a Mortgage Rate that is subject to
adjustment.
“Adjustment Date”: With
respect to each Adjustable-Rate Mortgage Loan, the first day of the
month in which the Mortgage Rate of such Mortgage Loan changes
pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-off Date as to each Adjustable-Rate Mortgage Loan
is set forth in the Mortgage Loan Schedule.
“Advance”: As to any
Mortgage Loan or REO Property, any advance made by the Servicer in
respect of any Distribution Date pursuant to Section
4.03.
“Advancing Person”: As
defined in Section 3.26(a) hereof.
“Affiliate”: With
respect to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person.
For the purposes of this definition, “control” when
used with respect to any specified Person means the power to direct
the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the
foregoing.
“Agreement”: This
Pooling and Servicing Agreement and all amendments hereof and
supplements hereto.
“Allocated Realized Loss
Amount”: With respect to any Distribution Date and any Class
of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on such Distribution Date
and (ii) the amount of any Allocated Realized Loss Amount for such
Class of Certificates remaining unpaid from the previous
Distribution Date minus the amount of the increase in the related
Certificate Principal Balance due to the receipt of Subsequent
Recoveries as provided in Section 4.01.
“Assignment”: An
assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required
pursuant to Section 2.01 hereof or returned by the applicable
recorder’s office), which is sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale of the Mortgage, 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.
“Available Distribution
Amount”: With respect to any Distribution Date, an amount
equal to (1) the sum of (a) the aggregate of the amounts on deposit
in the Collection Account and Distribution Account as of the close
of business on the related Determination Date, (b) the aggregate of
any amounts received in respect of an REO Property withdrawn from
any REO Account and deposited in the Distribution Account for such
Distribution Date pursuant to Section 3.23, (c) the aggregate of
any amounts deposited in the Distribution Account by the Servicer
in respect of Prepayment Interest Shortfalls for such Distribution
Date pursuant to Section 3.24, (d) the aggregate of any Advances
made by the Servicer for such Distribution Date pursuant to Section
4.03 and (e) the aggregate of any advances made by the Trustee as
successor Servicer or any other successor Servicer for such
Distribution Date pursuant to Section 7.02, reduced (to not less
than zero), by (2) the portion of the amount described in clause
(1)(a) above that represents (i) Monthly Payments on the Mortgage
Loans received from a Mortgagor on or prior to the Determination
Date but due during any Due Period subsequent to the related Due
Period, (ii) Principal Prepayments on the Mortgage Loans received
after the related Prepayment Period (together with any interest
payments received with such Principal Prepayments to the extent
they represent the payment of interest accrued on the Mortgage
Loans during a period subsequent to the related Prepayment Period)
(other than Prepayment Charges), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Mortgage Loans after
the related Prepayment Period, (iv) amounts reimbursable or payable
to the Depositor, the Servicer, the Trustee, the Seller or any
Sub-Servicer pursuant to Section 3.11, Section 3.12, Section 8.05
or otherwise payable in respect of Extraordinary Trust Fund
Expenses, (v) the Trustee Fee payable from the Distribution Account
pursuant to Section 8.05, (vi) amounts deposited in the
Collection
Account or the Distribution Account
in error and (vii) the amount of any Prepayment Charges collected
by the Servicer in connection with the Principal Prepayment of any
of the Mortgage Loans or any Servicer Prepayment Charge Payment
Amount.
“Bankruptcy Code”: The
Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
as amended.
“Bankruptcy Loss”: With
respect to any Mortgage Loan, a Realized Loss resulting from a
Deficient Valuation or Debt Service Reduction.
“Book-Entry
Certificate”: The Class A Certificates and the Mezzanine
Certificates for so long as the Certificates of such Class shall be
registered in the name of the Depository or its nominee.
“Book-Entry Custodian”:
The custodian appointed pursuant to Section 5.01.
“Business Day”: Any day
other than a Saturday, a Sunday or a day on which banking or
savings and loan institutions in the State of California, the State
of New York or in the city in which the Corporate Trust Office of
the Trustee is located, are authorized or obligated by law or
executive order to be closed.
“Cap Contracts”:
Collectively, the Class A Cap Contract and the Mezzanine Cap
Contract.
“Cash-Out Refinancing”:
A Refinanced Mortgage Loan the proceeds of which are more than a
nominal amount in excess of the principal balance of any existing
first mortgage or subordinate mortgage on the related Mortgaged
Property and related closing costs.
“Certificate”: Any one
of the Carrington Mortgage Loan Trust, Series 2005-NC2, Asset
Backed Pass-Through Certificates, Class A-1, Class A-2, Class A-3,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class CE, Class P and Class R
issued under this Agreement.
“Certificate Factor”:
With respect to any Class of Regular Certificates as of any
Distribution Date, a fraction, expressed as a decimal carried to
six places, the numerator of which is the aggregate Certificate
Principal Balance (or the Notional Amount, in the case of the Class
CE Certificates) of such Class of Certificates on such Distribution
Date (after giving effect to any distributions of principal and in
the case of the Mezzanine Certificates and the Class CE
Certificates, the allocations of Realized Losses in reduction of
the Certificate Principal Balance (or the Notional Amount, in the
case of the Class CE Certificates) of such Class of Certificates to
be made on such Distribution Date), and the denominator of which is
the initial aggregate Certificate Principal Balance (or the
Notional Amount, in the case of the Class CE Certificates) of such
Class of Certificates as of the Closing Date.
“Certificate Margin”:
With respect to the Class A Certificates and Mezzanine Certificates
and, for purposes of the Marker Rate and the Maximum I-LTZZ
Uncertificated Interest Deferral Amount, the specified REMIC I
Regular Interest, as follows:
|
|
|
|
|
|
|
|
|
|
A-1
|
I-LTA1
|
0.130%
|
0.260%
|
|
A-2
|
I-LTA2
|
0.240%
|
0.480%
|
|
A-3
|
I-LTA3
|
0.330%
|
0.660%
|
|
M-1
|
I-LTM1
|
0.450%
|
0.675%
|
|
M-2
|
I-LTM2
|
0.480%
|
0.720%
|
|
M-3
|
I-LTM3
|
0.500%
|
0.750%
|
|
M-4
|
I-LTM4
|
0.680%
|
1.020%
|
|
M-5
|
I-LTM5
|
0.750%
|
1.125%
|
|
M-6
|
I-LTM6
|
1.350%
|
2.025%
|
|
M-7
|
I-LTM7
|
1.450%
|
2.175%
|
|
M-8
|
I-LTM8
|
1.850%
|
2.775%
|
|
M-9
|
I-LTM9
|
3.000%
|
4.500%
|
__________
|
(1)
|
For each Interest Accrual Period for each
Distribution Date on or prior to the Optional Termination
Date.
|
|
(2)
|
For each other Interest Accrual
Period.
|
“Certificateholder” or
“Holder”: The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified
Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the
purposes of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or the Servicer
or any Affiliate thereof shall be deemed not to be outstanding and
the Voting Rights to which it is entitled shall not be taken into
account in determining whether the requisite percentage of Voting
Rights necessary to effect any such consent has been obtained,
except as otherwise provided in Section 11.01. The Trustee may
conclusively rely upon a certificate of the Depositor or the
Servicer in determining whether a Certificate is held by an
Affiliate thereof. All references herein to “Holders”
or “Certificateholders” shall reflect the rights of
Certificate Owners as they may indirectly exercise such rights
through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee
shall be required to recognize as a “Holder” or
“Certificateholder” only the Person in whose name a
Certificate is registered in the Certificate Register.
“Certificate Owner”:
With respect to a Book-Entry Certificate, the Person who is the
beneficial owner of such Certificate as reflected on the books of
the Depository or on the books of a Depository Participant or on
the books of an indirect participating brokerage firm for which a
Depository Participant acts as agent.
“Certificate Principal
Balance”: With respect to each Class A Certificate, Mezzanine
Certificate or Class P Certificate as of any date of determination,
the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination
plus any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 4.01, minus all
distributions allocable to principal made thereon and, in the case
of the Mezzanine Certificates, Realized Losses allocated thereto on
such immediately prior Distribution Date (or, in the case of any
date of determination up to and including the first Distribution
Date, the initial Certificate Principal Balance of such
Certificate, as stated on the face thereof). With respect to each
Class CE Certificates as of any date of determination, an amount
equal to the Percentage Interest evidenced by such Certificate
times the excess, if any, of (A) the then aggregate Uncertificated
Balance of the REMIC I Regular
Interests over (B) the then
aggregate Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates and the Class P
Certificates then outstanding.
“Certificate Register”:
The register maintained pursuant to Section 5.02.
“Class”: Collectively,
all of the Certificates bearing the same class
designation.
“Class A Cap Contract”:
The cap contract between the Trustee on behalf of the Trust and the
counterparty thereunder for the benefit of the Holders of the Class
A Certificates in the form attached hereto as Exhibit K.
“Class A-1
Certificates”: Any one of the Class A-1 Certificates
executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-1 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC
Provisions.
“Class A-2
Certificates”: Any one of the Class A-2 Certificates
executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-2 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC
Provisions.
“Class A-3
Certificates”: Any one of the Class A-3 Certificates
executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-3 and evidencing a Regular
Interest in REMIC II for purposes of the REMIC
Provisions.
“Class A Certificates”:
Collectively, the Class A-1 Certificates, the Class A-2
Certificates and the Class A-3 Certificates.
“Class A Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the aggregate Certificate Principal Balance of
the Class A Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 53.61% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period minus the Overcollateralization Floor
Amount.
“Class CE Certificate”:
Any one of the Class CE Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-13 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M Certificates”:
Collectively, the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class M-7 Certificates, the Class M-8
Certifiactes and the Class M-9 Certificates.
“Class M-1 Certificate”:
Any one of the Class M-1 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-4 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-1 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal
Distribution
Amount on such Distribution Date)
and (ii) the Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 61.42% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due
Period minus the Overcollateralization Floor Amount.
“Class M-2 Certificate”:
Any one of the Class M-2 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-5 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-2 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date) and (iii) the Certificate Principal Balance
of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i)
68.53% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period minus the
Overcollateralization Floor Amount.
“Class M-3 Certificate”:
Any one of the Class M-3 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-6 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-3 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (iv) the Certificate Principal Balance of
the Class M-3 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 72.79% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period minus the Overcollateralization Floor
Amount.
“Class M-4 Certificate”:
Any one of the Class M-4 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-7 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-4 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of
the Class M-2
Certificates (after taking into
account the distribution of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account
the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date) and (v) the Certificate Principal Balance
of the Class M-4 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i)
80.20% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period minus the
Overcollateralization Floor Amount.
“Class M-5 Certificate”:
Any one of the Class M-5 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-8 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-5 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (vi) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 83.55% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (B) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period
minus the Overcollateralization Floor Amount.
“Class M-6 Certificate”:
Any one of the Class M-6 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-9 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-6 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date) and (vii) the Certificate Principal Balance of
the Class M-6 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 86.60% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period minus the Overcollateralization Floor
Amount.
“Class M-7 Certificate”:
Any one of the Class M-7 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-10 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-7 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date (after taking into
account the distribution of the Class M-5 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates immediately prior to such
Distribution Date (after taking into account the distribution of
the Class M-6 Principal Distribution Amount on such Distribution
Date), the Certificate Principal Balance of the Class M-6
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date) and (viii) the
Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 89.34% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (B) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period
minus the Overcollateralization Floor Amount.
“Class M-8 Certificate”:
Any one of the Class M-8 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-11 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-8 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3
Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such
Distribution Date (after taking into account the distribution of
the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the
Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date (after taking into
account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), the Certificate Principal
Balance of the Class M-6 Certificates immediately prior to such
Distribution Date (after taking into account the distribution of
the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-7 Principal
Distribution Amount on such Distribution Date), the Certificate
Principal Balance of the Class M-7 Certificates immediately prior
to such Distribution Date (after taking into account the
distribution of the Class M-7 Principal Distribution Amount on such
Distribution Date), and (ix) the Certificate Principal Balance of
the Class M-8 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 91.78% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period minus the Overcollateralization Floor
Amount.
“Class M-9 Certificate”:
Any one of the Class M-9 Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-12 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class M-9 Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution
Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of
the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the distribution
of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date (after taking into
account the distribution of the Class M-5 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates immediately prior to such
Distribution Date (after taking into account the distribution of
the Class M-6 Principal Distribution Amount on such Distribution
Date), the Certificate Principal Balance of the Class M-6
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the
Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date (after taking into
account the distribution of the
Class M-7 Principal Distribution
Amount on such Distribution Date), the Certificate Principal
Balance of the Class M-7 Certificates immediately prior to such
Distribution Date (after taking into account the distribution of
the Class M-7 Principal Distribution Amount on such Distribution
Date), (ix) the Certificate Principal Balance of the Class M-8
Certificates immediately prior to such Distribution Date (after
taking into account the distribution of the Class M-8 Principal
Distribution Amount on such Distribution Date), the Certificate
Principal Balance of the Class M-8 Certificates immediately prior
to such Distribution Date (after taking into account the
distribution of the Class M-8 Principal Distribution Amount on such
Distribution Date), and (x) the Certificate Principal Balance of
the Class M-9 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 93.91% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period minus the Overcollateralization Floor
Amount.
“Class P Certificate”:
Any one of the Class P Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-14 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
“Class Principal Distribution
Amount”: The Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount, Class M-4
Principal Distribution Amount, Class M-5 Principal Distribution
Amount, Class M-6 Principal Distribution Amount, Class M-7
Principal Distribution Amount, Class M-8 Principal Distribution
Amount or Class M-9 Principal Distribution Amount.
“Class R Certificate”:
Any one of the Class R Certificates executed, authenticated and
delivered by the Trustee, substantially in the form annexed hereto
as Exhibit A-15 and evidencing the ownership of the Class R-I
Interest and the Class R-II Interest.
“Class R-I Interest”:
The uncertificated Residual Interest in REMIC I.
“Class R-II Interest”:
The uncertificated Residual Interest in REMIC II.
“Closing Date”: May 4,
2005.
“Code”: The Internal
Revenue Code of 1986, as amended.
“Collection Account”:
The account or accounts created and maintained, or caused to be
created and maintained, by the Servicer pursuant to Section
3.10(a), which shall be entitled “New Century Mortgage
Corporation, as Servicer for Deutsche Bank National Trust Company,
as Trustee, in trust for the registered holders of Carrington
Mortgage Loan Trust, Series 2005-NC2, Asset Backed Pass-Through
Certificates.” The Collection Account must be an Eligible
Account.
“Commission”: The
Securities and Exchange Commission.
“Corporate Trust
Office”: The principal corporate trust office of the Trustee
at which at any particular time its corporate trust business in
connection with this Agreement shall
be administered, which office at the
date of the execution of this instrument is located at 1761 East
St. Andrew Place, Santa Ana, California 92705-4934, Attn: CA0502,
or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor and the
Servicer.
“Corresponding
Certificate”: With respect to each REMIC I Regular Interest
set forth below, the Regular Certificate set forth in the table
below:
|
|
|
|
I-LTA1
|
Class A-1
|
|
I-LTA2
|
Class A-2
|
|
I-LTA3
|
Class A-3
|
|
I-LTM1
|
Class M-1
|
|
I-LTM2
|
Class M-2
|
|
I-LTM3
|
Class M-3
|
|
I-LTM4
|
Class M-4
|
|
I-LTM5
|
Class M-5
|
|
I-LTM6
|
Class M-6
|
|
I-LTM7
|
Class M-7
|
|
I-LTM8
|
Class M-8
|
|
I-LTM9
|
Class M-9
|
|
I-LTP
|
Class P
|
“Credit Enhancement
Percentage”: For any Distribution Date, the percentage
equivalent of a fraction, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine
Certificates and the Class CE Certificates calculated after taking
into account payments of principal on the Mortgage Loans and
distribution of the Principal Distribution Amount to the
Certificates then entitled to distributions of principal on such
Distribution Date, and the denominator of which is the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period.
“Cumulative Loss
Percentage”: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date
to the last day of the preceding calendar month and the denominator
of which is the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date.
“Cut-off Date”: With
respect to each Original Mortgage Loan, May 1, 2005. With respect
to all Qualified Substitute Mortgage Loans, their respective dates
of substitution. References herein to the “Cut-off
Date,” when used with respect to more than one Mortgage Loan,
shall be to the respective Cut-off Dates for such Mortgage
Loans.
“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 resulting from a Deficient
Valuation.
“Deficient Valuation”:
With respect to any Mortgage Loan, a valuation of the related
Mortgaged Property by a court of competent jurisdiction in an
amount less than the then
outstanding Stated Principal Balance
of the Mortgage Loan, which valuation results from a proceeding
initiated under the Bankruptcy Code.
“Definitive
Certificates”: As defined in Section 5.01(b).
“Deleted Mortgage Loan”:
A Mortgage Loan replaced or to be replaced by a Qualified
Substitute Mortgage Loan.
“Delinquency
Percentage”: As of the last day of the related Due Period,
the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of the Mortgage Loans that,
as of the last day of the previous calendar month, are 60 or more
days delinquent, are in foreclosure, have been converted to REO
Properties or have been discharged by reason of bankruptcy, and the
denominator of which is the aggregate Stated Principal Balance of
the Mortgage Loans and REO Properties as of the last day of the
previous calendar month; provided, however, that any Mortgage Loan
purchased by the Servicer pursuant to Section 3.16(c) shall not be
included in either the numerator or the denominator for purposes of
calculating the Delinquency Percentage.
“Depositor”: Bear
Stearns Asset Backed Securities I LLC, a Delaware limited liability
company, or its successor in interest.
“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(3) of the Uniform Commercial Code of the State of New York
and a “clearing agency” registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934,
as amended.
“Depository
Institution”: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of
the United States of America or any State thereof, (b) is subject
to supervision and examination by federal or state banking
authorities and (c) has outstanding unsecured commercial paper or
other short-term unsecured debt obligations (or, in the case of a
depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial
paper or other short-term unsecured debt obligations) that are
rated at least P-1 by Moody’s, F-1 by Fitch (if rated by
Fitch) and A-1+ by S&P.
“Depository
Participant”: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited
with the Depository.
“Determination Date”:
With respect to each Distribution Date, the 15 th day of
the calendar month in which such Distribution Date occurs or, if
such 15 th day is not a Business Day, the Business Day
immediately preceding such 15 th day.
“Directly Operate”: With
respect to any REO Property, the furnishing or rendering of
services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any
construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I
other than through an Independent Contractor; provided, however,
that the Trustee (or the Servicer on behalf of the Trustee) shall
not be considered to Directly Operate an REO Property solely
because the Trustee (or the Servicer on behalf of the Trustee)
establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to
repairs or capital expenditures with respect to such REO
Property.
“Disqualified
Organization”: 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) any foreign government, any international
organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain
farmers’ cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated
business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an
“electing large partnership” and (vi) any other Person
as set forth in an Opinion of Counsel delivered to the Trustee and
the Depositor to the effect that the holding of an Ownership
Interest in a Residual Certificate by such Person may cause any
Trust 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 Residual
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 Account”:
The trust account or accounts created and maintained by the Trustee
pursuant to Section 3.10(b), which shall be entitled
“Deutsche Bank National Trust Company, as Trustee, in trust
for the registered holders of Carrington Mortgage Loan Trust,
Series 2005-NC2, Asset Backed Pass-Through Certificates.” The
Distribution Account must be an Eligible Account.
“Distribution Date”: The
25 th day of any month, or if such 25 th day
is not a Business Day, the Business Day immediately following such
25 th day, commencing in June 2005.
“Due Date”: With respect
to each Mortgage Loan and any Distribution Date, the first day of
the calendar month in which such Distribution Date occurs on which
the Monthly Payment for such Mortgage Loan was due (or, in the case
of any Mortgage Loan under terms of which the Monthly Payment for
such Mortgage Loan was due on a day other than the first day of the
calendar month in which such Distribution Date occurs, the day
during the related Due Period on which such Monthly Payment was
due), in each case exclusive of any days of grace.
“Due Period”: With
respect to any Distribution Date, the period commencing on the
second day of the month immediately preceding the month in which
such Distribution Date occurs and ending on the first day of the
month of such Distribution Date.
“Eligible Account”: Any
of (i) an account or accounts maintained with a Depository
Institution, (ii) an account or accounts the deposits in which are
fully insured by the
FDIC or (iii) a segregated
non-interest bearing trust account or accounts maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the
Code of Federal Regulation Section 9.10(b), which, in either case,
has corporate trust powers, acting in its fiduciary
capacity.
“ERISA”: The Employee
Retirement Income Security Act of 1974, as amended.
“Estate in Real
Property”: A fee simple estate in a parcel of
land.
“Excess Overcollateralized
Amount”: With respect to the Class A Certificates and the
Mezzanine Certificates and any Distribution Date, the excess, if
any, of (i) the Overcollateralized Amount for such Distribution
Date (calculated for this purpose only after assuming that 100% of
the Principal Remittance Amount on such Distribution Date has been
distributed) over (ii) the Overcollateralization Target Amount for
such Distribution Date.
“Expense Adjusted Maximum
Mortgage Rate”: With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Maximum Mortgage Rate (or
the applicable Mortgage Rate in the case of any Fixed-Rate Mortgage
Loan) thereon as of the first day of the related Due Period minus
the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.
“Expense Adjusted Mortgage
Rate”: With respect to any Mortgage Loan (or the related REO
Property), as of any date of determination, a per annum rate of
interest equal to the applicable Mortgage Rate thereon as of the
first day of the related Due Period minus the sum of (i) the
Trustee Fee Rate and (ii) the Servicing Fee Rate.
“Extraordinary Trust Fund
Expense”: Any amounts reimbursable to the Trustee or any
director, officer, employee or agent of the Trustee from the Trust
Fund pursuant to Section 8.05 or Section 10.01(c) and any amounts
payable from the Distribution Account in respect of taxes pursuant
to Section 10.01(g)(iii) and any costs of the Trustee for the
recording of the Assignments pursuant to Section 2.01 (to the
extent the Seller is unable to pay such costs).
“Fannie Mae”: Fannie
Mae, formally known as the Federal National Mortgage Association,
or any successor thereto.
“FDIC”: Federal Deposit
Insurance Corporation or any successor thereto.
“Final Recovery
Determination”: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Responsible Party, the Depositor or the Servicer
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01), a determination made by the Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made
thereby.
“Fitch”: Fitch Ratings,
or its successor in interest.
“Formula Rate”: For any
Distribution Date and the Class A Certificates and the Mezzanine
Certificates, the lesser of (i) One-Month LIBOR plus the related
Certificate Margin and (ii) the Maximum Cap Rate.
“Freddie Mac”: Freddie
Mac, formally known as the Federal Home Loan Mortgage Corporation,
or any successor thereto.
“Gross Margin”: With
respect to each Adjustable-Rate Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note that is added to the Index
on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such
Adjustable-Rate Mortgage Loan.
“Highest Priority”: As
of any date of determination, the Class of Mezzanine Certificates
then outstanding with a Certificate Principal Balance greater than
zero, with the highest priority for payments pursuant to Section
4.01, in the following order: Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates.
“Indenture”: An
indenture relating to the issuance of notes secured by the Class CE
Certificates, the Class P Certificates and/or the Class R
Certificates (or any portion thereof).
“Independent”: When used
with respect to any specified Person, any such Person who (a) is in
fact independent of the Depositor, the Servicer, the Seller and
their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the
Depositor, the Servicer, the Seller or any Affiliate thereof, and
(c) is not connected with the Depositor, the Servicer, the Seller
or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail
to be Independent of the Depositor, the Servicer, the Seller or any
Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the
Depositor, the Servicer, the Seller or any Affiliate thereof, as
the case may be.
“Independent
Contractor”: Either (i) any Person (other than the Servicer)
that would be an “independent contractor” with respect
to REMIC I within the meaning of Section 856(d)(3) of the Code if
REMIC I were a real estate investment trust (except that the
ownership tests set forth in that section shall be considered to be
met by any Person that owns, directly or indirectly, 35% or more of
any Class of Certificates), so long as REMIC I does not receive or
derive any income from such Person and provided that the
relationship between such Person and REMIC I is at arm’s
length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer) if
the Trustee has received an Opinion of Counsel to the effect that
the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as
“foreclosure property” within the meaning of Section
860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause
any income realized in respect of such REO Property to fail to
qualify as Rents from Real Property.
“Index”: With respect to
each Adjustable-Rate Mortgage Loan and each related Adjustment
Date, the index specified in the related Mortgage Note.
“Insurance Proceeds”:
Proceeds of any title policy, hazard policy or other insurance
policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing mortgage
loans held for its own account, subject to the terms and conditions
of the related Mortgage Note and Mortgage.
“Interest Accrual
Period”: With respect to any Distribution Date and the Class
A Certificates and the Mezzanine Certificates, the period
commencing on the Distribution Date of the month immediately
preceding the month in which such Distribution Date occurs (or, in
the case of the first Distribution Date, commencing on the Closing
Date) and ending on the day preceding such Distribution Date. With
respect to any Distribution Date and the Class CE Certificates and
the REMIC I Regular Interests, the one-month period ending on the
last day of the calendar month preceding the month in which such
Distribution Date occurs.
“Interest Carry Forward
Amount”: With respect to any Distribution Date and the Class
A Certificates or the Mezzanine Certificates, the sum of (i) the
amount, if any, by which (a) the Interest Distribution Amount for
such Class of Certificates as of the immediately preceding
Distribution Date exceeded (b) the actual amount distributed on
such Class of Certificates in respect of interest on such
immediately preceding Distribution Date, (ii) the amount of any
Interest Carry Forward Amount for such Class of Certificates
remaining unpaid from the previous Distribution Date and (iii)
accrued interest on the sum of (i) and (ii) above calculated at the
related Pass-Through Rate for the most recently ended Interest
Accrual Period.
“Interest Determination
Date”: With respect to the Class A Certificates, the
Mezzanine Certificates, REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I
Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8 and REMIC
I Regular Interest I-LTM9 and any Interest Accrual Period therefor,
the second London Business Day preceding the commencement of such
Interest Accrual Period.
“Interest Distribution
Amount”: With respect to any Distribution Date and the Class
A Certificates, the Mezzanine Certificates and the Class CE
Certificates, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.
“Interest Remittance
Amount”: For any Distribution Date, that portion of the
Available Distribution Amount for the related Distribution Date
that represents interest received or advanced on the Mortgage
Loans.
“Late Collections”: With
respect to any Mortgage Loan and any Due Period, all amounts
received subsequent to the Determination Date immediately following
such Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest
due
(without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but
delinquent for such Due Period and not previously
recovered.
“Liquidation Event”:
With respect to any Mortgage Loan, any of the following events: (i)
such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from REMIC I, by reason of its being
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03, Section 3.16(c) or Section 9.01. With respect to any
REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO
Property is removed from REMIC I by reason of its being purchased
pursuant to Section 9.01.
“Liquidation Proceeds”:
The amount (other than Insurance Proceeds or amounts received in
respect of the rental of any REO Property prior to REO Disposition)
received by the Servicer in connection with (i) the taking of all
or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted
Mortgage Loan through a trustee’s sale, foreclosure sale or
otherwise, or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by
Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.
“Loan-to-Value Ratio”:
As of any date of determination, the fraction, expressed as a
percentage, the numerator of which is the principal balance of the
related Mortgage Loan at such date and the denominator of which is
the Value of the related Mortgaged Property.
“London Business Day”:
Any day on which banks in the City of London and New York are open
and conducting transactions in United States dollars.
“Marker Rate”: With
respect to the Class CE Certificates and any Distribution Date, a
per annum rate equal to two (2) times the weighted average of the
REMIC I Remittance Rate for each of the REMIC I Regular Interests
(other than REMIC I Regular Interest I-LTP), with the rate on each
such REMIC I Regular Interest (other than REMIC I Regular Interest
I-LTZZ) subject to a cap equal to the lesser of (i) One-Month LIBOR
plus the related Certificate Margin for the related Corresponding
Certificate and (ii) the Net WAC Pass-Through Rate for the related
Corresponding Certificate for the purpose of this calculation for
such Distribution Date and with the rate on REMIC I Regular
Interest I-LTZZ subject to a cap of zero for the purpose of this
calculation; provided, however, each cap shall be multiplied by a
fraction, the numerator of which is the actual number of days
elapsed in the related Interest Accrual Period and the denominator
of which is 30.
“Maximum Cap Rate”: For
any Distribution Date and the Class A Certificates and the
Mezzanine Certificates, a per annum rate equal to the product of
(x) the weighted average of the Expense Adjusted Maximum Mortgage
Rates of the Mortgage Loans, in each case, weighted on the basis of
the outstanding Stated Principal Balances of the Mortgage Loans as
of the first day of the month preceding the month of such
Distribution Date and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed
in the related Interest Accrual Period.
“Maximum I-LTZZ Uncertificated
Interest Deferral Amount”: With respect to any Distribution
Date, the excess of (i) accrued interest at the REMIC I Remittance
Rate
applicable to REMIC I Regular
Interest I-LTZZ for such Distribution Date on a balance equal to
the Uncertificated Balance of REMIC I Regular Interest I-LTZZ minus
the REMIC I Overcollateralized Amount, in each case for such
Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
Regular Interest I-LTM8 and REMIC I Regular Interest I-LTM9 for
such Distribution Date, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the lesser of (i) One-Month
LIBOR plus the related Certificate Margin for the related
Corresponding Certificate and (ii) the Net WAC Pass-Through Rate
for the related Corresponding Certificate; provided, however, each
cap shall be multiplied by a fraction, the numerator of which is
the actual number of days elapsed in the related Interest Accrual
Period and the denominator of which is 30.
“Maximum Mortgage Rate”:
With respect to each Adjustable-Rate Mortgage Loan, the percentage
set forth in the related Mortgage Note as the maximum Mortgage Rate
thereunder.
“Mezzanine Cap
Contract”: The cap contract between the Trustee on behalf of
the Trust and the counterparty thereunder for the benefit of the
Holders of the Mezzanine Certificates in the form attached hereto
as Exhibit K.
“Mezzanine
Certificates”: The Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class M-7 Certificates, the Class M-8
Certificates and the Class M-9 Certificates.
“Minimum Mortgage Rate”:
With respect to each Adjustable-Rate Mortgage Loan, the percentage
set forth in the related Mortgage Note as the minimum Mortgage Rate
thereunder.
“Monthly Payment”: With
respect to any Mortgage Loan, the scheduled monthly payment of
principal and interest on such Mortgage Loan which is payable by
the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient
Valuation and/or Debt Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in the amount of interest
collectible from the related Mortgagor pursuant to the Relief Act;
(b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.07 and (c) on the assumption
that all other amounts, if any, due under such Mortgage Loan are
paid when due.
“Moody’s”:
Moody’s Investors Service, Inc., or its successor in
interest.
“Mortgage”: The
mortgage, deed of trust or other instrument creating a first lien
or second lien on, or first or second priority security interest
in, a Mortgaged 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 Loan”: Each
mortgage loan transferred and assigned to the Trustee and delivered
to the Trustee pursuant to Section 2.01 or Section 2.03(b) of this
Agreement, as held from time to time as a part of the Trust Fund,
the Mortgage Loans so held being identified in the Mortgage Loan
Schedule.
“Mortgage Loan Purchase
Agreement”: The agreement among the Seller, the Responsible
Party and the Depositor, regarding the sale of the Mortgage Loans
by the Seller to the Depositor, substantially in the form of
Exhibit D annexed hereto.
“Mortgage Loan
Schedule”: As of any date, the list of Mortgage Loans
included in REMIC I on such date, attached hereto as Schedule 1.
The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:
|
(i)
|
the Mortgage Loan identifying
number;
|
|
(ii)
|
[reserved];
|
|
(iii)
|
the state and zip code of the
Mortgaged Property;
|
|
(iv)
|
a code indicating whether the
Mortgaged Property is owner-occupied;
|
|
(v)
|
the type of Residential Dwelling
constituting the Mortgaged Property;
|
|
(vi)
|
the original months to
maturity;
|
|
(vii)
|
the stated remaining months to
maturity from the Cut-off Date based on the original amortization
schedule;
|
|
(viii)
|
the Loan-to-Value Ratio at
origination;
|
|
(ix)
|
the Mortgage Rate in effect
immediately following the Cut-off Date;
|
|
(x)
|
(A) the date on which the first
Monthly Payment was due on the Mortgage Loan and (B) if such date
is not consistent with the Due Date currently in effect, such Due
Date;
|
|
(xi)
|
the stated maturity
date;
|
|
(xii)
|
the amount of the Monthly Payment
at origination;
|
|
(xiii)
|
the amount of the Monthly Payment
due on the first Due Date after the Cut-off Date;
|
|
(xiv)
|
the last Due Date on which a
Monthly Payment was actually applied to the unpaid Stated Principal
Balance;
|
|
(xv)
|
the original principal amount of
the Mortgage Loan;
|
|
(xvi)
|
the Stated Principal Balance of
the Mortgage Loan as of the close of business on the Cut-off
Date;
|
|
(xvii)
|
with respect to each
Adjustable-Rate Mortgage Loan, the Adjustment Dates, the Gross
Margin, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the
Periodic Rate Cap, the maximum first Adjustment Date Mortgage Rate
adjustment, the first Adjustment Date immediately following the
origination date and the rounding code (i.e., nearest 0.125%, next
highest 0.125%);
|
|
(xviii)
|
a code indicating the purpose of
the Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing,
Cash-Out Refinancing);
|
|
(xix)
|
the Mortgage Rate at
origination;
|
|
(xx)
|
a code indicating the
documentation program (i.e., Full Documentation, Limited
Documentation, Stated Income Documentation);
|
|
(xxi)
|
the risk grade;
|
|
(xxii)
|
the Value of the Mortgaged
Property;
|
|
(xxiii)
|
the sale price of the Mortgaged
Property, if applicable;
|
|
(xxiv)
|
the actual unpaid principal
balance of the Mortgage Loan as of the Cut-off Date;
|
|
(xxv)
|
the type and term of the related
Prepayment Charge;
|
|
(xxvi)
|
the program code; and
|
|
(xxvii)
|
the total amount of points and
fees charged such Mortgage Loan.
|
The Mortgage Loan Schedule shall set
forth the following information with respect to the Mortgage Loans
in the aggregate as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the current Stated Principal Balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans
and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the
Depositor in accordance with the provisions of this Agreement. With
respect to any Qualified Substitute Mortgage Loan, the Cut-off Date
shall refer to the related Cut-off Date for such Mortgage Loan,
determined in accordance with the definition of Cut-off Date
herein.
“Mortgage Note”: The
original executed note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
“Mortgage Pool”: The
pool of Mortgage Loans, identified on Schedule 1 and existing from
time to time thereafter, and any REO Properties acquired in respect
thereof.
“Mortgage Rate”: With
respect to each Mortgage Loan, the annual rate at which interest
accrues on such Mortgage Loan from time to time in accordance with
the provisions of the related Mortgage Note, which rate, with
respect to the Adjustable-Rate Mortgage Loans, (A) as of any date
of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date and (B) as of any date of determination thereafter
shall be the rate as adjusted on the most recent Adjustment Date
equal to the sum, rounded as provided in the Mortgage Note, of the
Index, as most recently available as of a date prior to the
Adjustment Date as set forth in the related Mortgage Note, plus the
related Gross Margin; provided that the Mortgage Rate on such
Adjustable-Rate Mortgage Loan on any Adjustment Date shall never be
more than the lesser of (i) the sum of the Mortgage Rate in effect
immediately prior to the Adjustment Date plus the related Periodic
Rate Cap, if any, and (ii) the related Maximum Mortgage Rate, and
shall never be less than the greater of (i) the Mortgage Rate in
effect immediately prior to the Adjustment Date less the Periodic
Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of
any date of determination, the annual rate determined in accordance
with the immediately preceding sentence as of the date such
Mortgage Loan became an REO Property.
“Mortgaged Property”:
The underlying property securing a Mortgage Loan, including any REO
Property, consisting of an Estate in Real Property improved by a
Residential Dwelling.
“Mortgagor”: The obligor
on a Mortgage Note.
“Net Monthly Excess
Cashflow”: With respect to any Distribution Date, the sum of
(i) any Overcollateralization Reduction Amount and (ii) the excess
of (x) the Available Distribution Amount for such Distribution Date
over (y) the sum for such Distribution Date of (A) the Senior
Interest Distribution Amount distributable to the holders of the
Class A Certificates and the Interest Distribution Amount
distributable to the holders of the Mezzanine Certificates and (B)
the Principal Remittance Amount.
“Net Mortgage Rate”:
With respect to any Mortgage Loan (or the related REO Property) as
of any date of determination, a per annum rate of interest equal to
the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate.
“Net WAC Pass-Through
Rate”: With respect to the Class A Certificates and the
Mezzanine Certificates and any Distribution Date, a rate per annum
equal to the product of (x) the weighted average of the Expense
Adjusted Net Mortgage Rates of the Mortgage Loans, weighted on the
basis of the outstanding Stated Principal Balances of the Mortgage
Loans as of the first day of the month preceding the month of such
Distribution Date and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed
in the related Interest Accrual Period. For federal income tax
purposes, the equivalent of the
foregoing shall be expressed as the weighted
average of the REMIC I Remittance Rate on the REMIC I Regular
Interests, weighted on the basis of the aggregate Uncertificated
Balance of such REMIC I Regular Interests. With respect to each
REMIC I Regular Interest and any Distribution Date, a rate per
annum equal to the weighted average of the Expense Adjusted
Mortgage Rates of the Mortgage Loans, weighted based on their
Stated Principal Balances as of the first day of the related Due
Period.
“Net WAC Rate Carryover
Amount”: With respect to any Class of the Class A
Certificates and the Mezzanine Certificates and any Distribution
Date, the sum of (A) the positive excess of (i) the amount of
interest accrued on such Class of Certificates for such
Distribution Date calculated at the related Formula Rate for such
Distribution Date over (ii) the amount of interest accrued on such
Class of Certificates at the Net WAC Pass-Through Rate for such
Distribution Date and (B) the related Net WAC Rate Carryover Amount
for the previous Distribution Date not previously distributed,
together with interest thereon at a rate equal to the related
Formula Rate for such Class of Certificates for such Distribution
Date.
“Net WAC Rate Carryover
Reserve Account”: As defined in Section 3.28.
“New Lease”: Any lease
of REO Property entered into on behalf of REMIC I, including any
lease renewed or extended on behalf of REMIC I, if REMIC I has the
right to renegotiate the terms of such lease.
“Nonrecoverable
Advance”: Any Advance previously made or proposed to be made
in respect of a Mortgage Loan or REO Property that, in the good
faith business judgment of the Servicer, will not or, in the case
of a proposed Advance, would not be ultimately recoverable from
related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided
herein.
“Nonrecoverable Servicing
Advance”: Any Servicing Advance previously made or proposed
to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Servicer, will not or, in
the case of a proposed Servicing Advance, would not be ultimately
recoverable from related Late Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.
“Non-United States
Person”: Any Person other than a United States
Person.
“Notional Amount”: With
respect to the Class CE Certificates and any Distribution Date, the
aggregate Uncertificated Balance of the REMIC I Regular Interests
(other than REMIC I Regular Interest I-LTP) for such Distribution
Date.
“Officers’
Certificate”: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice
president (however denominated), and by the Treasurer, the
Secretary, or one of the assistant treasurers or assistant
secretaries of the Servicer, the Seller or the Depositor, as
applicable.
“One-Month LIBOR”: With
respect to the Class A Certificates, the Mezzanine Certificates and
for purposes of the Marker Rate and Maximum I-LTZZ Uncertificated
Interest Deferral Amount, REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2,
REMIC I Regular Interest I-LTA3,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2,
REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4,
REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6,
REMIC I Regular Interest I-LTM7, REMIC I Regular Interest I-LTM8
and REMIC I Regular Interest I-LTM9 and any Interest Accrual Period
therefor, the rate determined by the Trustee on the related
Interest Determination Date on the basis of the offered rate for
one-month U.S. dollar deposits, as such rate appears on Telerate
Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on
the basis of the offered rates of the Reference Banks for one-month
U.S. dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. In such event, the Trustee will
request the principal London office of each of the Reference Banks
to provide a quotation of its rate. If on such Interest
Determination Date, two or more Reference Banks provide such
offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole
multiple of 1/16%). If on such Interest Determination Date, fewer
than two Reference Banks provide such offered quotations, One-Month
LIBOR for the related Interest Accrual Period shall be the higher
of (i) LIBOR as determined on the previous Interest Determination
Date and (ii) the Reserve Interest Rate. Notwithstanding the
foregoing, if, under the priorities described above, LIBOR for an
Interest Determination Date would be based on LIBOR for the
previous Interest Determination Date for the third consecutive
Interest Determination Date, the Trustee, after consultation with
the Depositor, 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.
“Opinion of Counsel”: A
written opinion of counsel, who may, without limitation, be
salaried counsel for the Depositor or the Servicer, acceptable to
the Trustee, if such opinion is delivered to the Trustee, except
that any opinion of counsel relating to (a) the qualification of
any Trust REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
“Original Mortgage
Loan”: Any of the Mortgage Loans included in REMIC I as of
the Closing Date.
“Originator”: New
Century Mortgage Corporation, or its successor in
interest.
“Overcollateralization
Deficiency Amount”: With respect to any Distribution Date,
the excess, if any, of (a) the Overcollateralization Target Amount
applicable to such Distribution Date over (b) the
Overcollateralized Amount applicable to such Distribution Date
(calculated for this purpose only after assuming that 100% of the
Principal Remittance Amount on such Distribution Date has been
distributed).
“Overcollateralization Floor
Amount”: With respect to any Distribution Date, the amount
equal to 0.50% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
“Overcollateralization
Increase Amount”: With respect to any Distribution Date, the
lesser of (a) the Overcollateralization Deficiency Amount as of
such Distribution Date
(calculated for this purpose only
after assuming that 100% of the Principal Remittance Amount on such
Distribution Date has been distributed) and (b) the amount of
Accrued Certificate Interest payable on the Class CE Certificates
on such Distribution Date as reduced by Realized Losses allocated
thereto with respect to such Distribution Date pursuant to Section
4.04.
“Overcollateralization
Reduction Amount”: With respect to any Distribution Date, an
amount equal to the lesser of (a) the Principal Remittance Amount
on such Distribution Date and (b) the Excess Overcollateralized
Amount.
“Overcollateralization Target
Amount”: With respect to any Distribution Date, (i) prior to
the Stepdown Date, an amount equal to 3.05% of the aggregate
outstanding Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date, (ii) on or after the Stepdown Date provided a
Trigger Event is not in effect, the greater of (x) 6.10% of the
then current aggregate outstanding Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (y)
the Overcollateralization Floor Amount, or (iii) on or after the
Stepdown Date and if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding
Distribution Date. Notwithstanding the foregoing, on and after any
Distribution Date following the reduction of the aggregate
Certificate Principal Balance of the Class A Certificates and the
Mezzanine Certificates to zero, the Overcollateralization Target
Amount shall be zero.
“Overcollateralized
Amount”: With respect to any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties as of the last day of the related
Due Period over (b) the sum of the aggregate Certificate Principal
Balance of the Class A Certificates, the Mezzanine Certificates and
the Class P Certificates after giving effect to distributions to be
made on such Distribution Date.
“Ownership Interest”: As
to any Certificate, any ownership or security interest in such
Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal or beneficial, as owner or as pledgee.
“Pass-Through Rate”:
With respect to the Class A Certificates and the Mezzanine
Certificates and any Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution Date and (y) the Net WAC
Rate for such Distribution Date. With respect to the Class CE
Certificates and any Distribution Date, (i) a per annum rate equal
to the percentage equivalent of a fraction, the numerator of which
is (x) the interest on the Uncertificated Principal Balance of each
REMIC I Regular Interest listed in clause (y) below at a rate equal
to the related REMIC I Remittance Rate minus the Marker Rate and
the denominator of which is (y) the aggregate Uncertificated
Balance of REMIC I Regular Interest I-LTAA, I-LTA1, I-LTM1, I-LTM2,
I-LTM3, I-LTM4, I-LTM5, I-LTM6, I-LTM7, I-LTM8, I-LTM9, I-LTTZZ and
(ii) 100% of the interest on REMIC I Regular Interest I-LTP,
expressed as a per annum rate.
“Percentage Interest”:
With respect to any Class of Certificates (other than the Residual
Certificates), the undivided percentage ownership in such Class
evidenced by such Certificate, expressed as a percentage, the
numerator of which is the initial Certificate Principal Balance or
Notional Amount represented by such Certificate and the denominator
of which is the aggregate initial Certificate Principal Balance or
initial Notional Amount of all of the Certificates of such Class.
The Class A Certificates and the Mezzanine Certificates are
issuable only in
minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of
$25,000 and integral multiples of $1.00 in excess thereof. The
Class P Certificates are issuable only in Percentage Interests
corresponding to initial Certificate Principal Balances of $20 and
integral multiples thereof. The Class CE Certificates are issuable
only in minimum Percentage Interests corresponding to minimum
initial Certificate Principal Balances of $100,000 and integral
multiples of $1.00 in excess thereof; provided, however, that a
single Certificate of each such Class of Certificates may be issued
having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance or Notional Amount
of such Class or to an otherwise authorized denomination for such
Class plus such remainder. With respect to any Residual
Certificate, the undivided percentage ownership in such Class
evidenced by such Certificate, as set forth on the face of such
Certificate. The Residual Certificates are issuable in Percentage
Interests of 20% and multiples thereof.
“Periodic Rate Cap”:
With respect to each Adjustable-Rate Mortgage Loan and any
Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the
Mortgage Rate for such Mortgage Loan may increase or decrease
(without regard to the Maximum Mortgage Rate or the Minimum
Mortgage Rate) on such Adjustment Date from the Mortgage Rate in
effect immediately prior to such Adjustment Date.
“Permitted Investments”:
Any one or more of the following obligations or securities acquired
at a purchase price of not greater than par, regardless of whether
issued or managed by the Depositor, the Servicer, the Trustee or
any of their respective Affiliates:
(i) direct
obligations of, or obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United
States;
(ii) demand
and time deposits in, certificates of deposit of, or bankers’
acceptances issued by, any Depository Institution;
(iii) repurchase
obligations with respect to any security described in clause (i)
above entered into with a Depository Institution (acting as
principal);
(iv) securities
bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States of
America or any state thereof and that are rated by each Rating
Agency that rates such securities in its highest long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified
date not more than 30 days after the date of acquisition thereof)
that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time
of such investment;
(vi) units
of money market funds, including those managed or advised by the
Trustee or its Affiliates, that have been rated “AAA”
by Fitch (if rated by Fitch) and “AAAm” or
“AAAm-G” by S&P and “Aaa” by
Moody’s; and
(vii) if
previously confirmed in writing to the Trustee, any other demand,
money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies as a
permitted investment of funds backing securities having ratings
equivalent to its highest initial rating of the Class A
Certificates;
provided, however, that no
instrument described hereunder shall evidence either the right to
receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest
payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument
provide a yield to maturity at par greater than 120% of the yield
to maturity at par of the underlying obligations.
“Permitted Transferee”:
Any Transferee of a Residual Certificate other than a Disqualified
Organization or Non-United States Person.
“Person”: Any
individual, corporation, partnership, limited liability company,
joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or
political subdivision thereof.
“Plan”: Any employee
benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans
and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements
are invested, that are subject to ERISA or Section 4975 of the
Code.
“Prepayment Assumption”:
As defined in the Prospectus Supplement.
“Prepayment Charge”:
With respect to any Prepayment Period, any prepayment premium,
penalty or charge payable by a Mortgagor in connection with any
Principal Prepayment on a Mortgage Loan pursuant to the terms of
the related Mortgage Note (other than any Servicer Prepayment
Charge Payment Amount).
“Prepayment Charge
Schedule”: As of any date, the list of Prepayment Charges
included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached
thereto). The Prepayment Charge Schedule shall set forth the
following information with respect to each Prepayment
Charge:
|
(i)
|
the Mortgage Loan
identifying number;
|
|
(ii)
|
a code indicating
the type of Prepayment Charge;
|
|
(iii)
|
the date on which
the first Monthly Payment was due on the related Mortgage
Loan;
|
|
(iv)
|
the term of the
related Prepayment Charge;
|
|
(v)
|
the original Stated
Principal Balance of the related Mortgage Loan; and
|
|
(vi)
|
the Stated
Principal Balance of the related Mortgage Loan as of the Cut-off
Date.
|
“Prepayment Interest
Shortfall”: With respect to any Distribution Date, for each
Mortgage Loan that was, during the related Prepayment Period, the
subject of a Principal Prepayment in full or in part that was
applied by the Servicer to reduce the outstanding principal balance
of such loan on a date preceding the Due Date in the succeeding
Prepayment Period, an amount equal to one month’s interest at
the applicable Net Mortgage Rate less any payments made by the
Mortgagor. The obligations of the Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section
3.24.
“Prepayment Period”:
With respect to any Distribution Date, the calendar month preceding
the calendar month in which such Distribution Date
occurs.
“Principal Distribution
Amount”: With respect to any Distribution Date, an amount,
not less than zero, equal to the sum of:
(i) the
principal portion of each Monthly Payment on the Mortgage Loans due
during the related Due Period, whether or not received on or prior
to the related Determination Date;
(ii) the
Stated Principal Balance of any Mortgage Loan that was purchased
during the related Prepayment Period pursuant to or as contemplated
by Section 2.03, Section 3.16(c) or Section 9.01 and the amount of
any shortfall deposited in the Collection Account in connection
with the substitution of a Deleted Mortgage Loan pursuant to
Section 2.03 during the related Prepayment Period;
(iii) the
principal portion of all other unscheduled collections (including,
without limitation, Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and REO Principal
Amortization) received during the related Prepayment Period, net of
any portion thereof that represents a recovery of principal for
which an Advance was made by the Servicer pursuant to Section 4.03
in respect of a preceding Distribution Date; and
(iv) the
amount of any Overcollateralization Increase Amount for such
Distribution Date; minus
(v)
the amount of any
Overcollateralization Reduction Amount for such Distribution
Date.
“Principal Prepayment”:
Any payment of principal made by the Mortgagor on a Mortgage Loan
which is received in advance of its scheduled Due Date and which is
not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or
months subsequent to the month of prepayment.
“Principal Remittance
Amount”: The sum of the amounts set forth in (i) through
(iii) of the definition of Principal Distribution
Amount.
“Private Certificates”:
As defined in Section 5.02(b).
“Prospectus Supplement”:
The Prospectus Supplement, dated May 2, 2005, relating to the
public offering of the Class A Certificates and the Mezzanine
Certificates (other than the Class M-8 Certificates and Class M-9
Certificates).
“PTCE”: A Prohibited
Transaction Class Exemption issued by the United States Department
of Labor which provides that exemptive relief is available to any
party to any transaction which satisfies the conditions of the
exemption.
“Purchase Price”: With
respect to any Mortgage Loan or REO Property to be purchased
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as confirmed by a certification from a Servicing
Officer to the Trustee, an amount equal to the sum of (i) 100% of
the Stated Principal Balance thereof as of the date of purchase (or
such other price as provided in Section 9.01), (ii) in the case of
(x) a Mortgage Loan, accrued interest on such Stated Principal
Balance at the applicable Net Mortgage Rate in effect from time to
time from the Due Date as to which interest was last covered by a
payment by the Mortgagor or an Advance by the Servicer, which
payment or Advance had as of the date of purchase been distributed
pursuant to Section 4.01, through the end of the calendar month in
which the purchase is to be effected plus and (y) an REO Property,
the sum of (1) accrued interest on such Stated Principal Balance at
the applicable Net Mortgage Rate in effect from time to time from
the Due Date as to which interest was last covered by a payment by
the Mortgagor or an Advance by the Servicer through the end of the
calendar month immediately preceding the calendar month in which
such REO Property was acquired, plus (2) REO Imputed Interest for
such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending
with the calendar month in which such purchase is to be effected,
net of the total of all net rental income, Insurance Proceeds,
Liquidation Proceeds and Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant
to Section 4.01, (iii) any unreimbursed Servicing Advances and
Advances (including Nonrecoverable Advances and Nonrecoverable
Servicing Advances) and any unpaid Servicing Fees allocable to such
Mortgage Loan or REO Property, (iv) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Section 3.11(a)(ix) and Section
3.16(b), and (v) in the case of a Mortgage Loan required to be
purchased pursuant to Section 2.03, expenses reasonably incurred or
to be incurred by the Servicer or the Trustee in respect of the
breach or defect giving rise to the purchase obligation including
any costs and damages incurred by the Trust Fund in connection with
any violation by such loan of any predatory or abusive lending
law.
“Qualified Substitute Mortgage
Loan”: A mortgage loan substituted for a Deleted Mortgage
Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding Stated Principal
Balance, after application of all scheduled payments of principal
and interest due during or prior to the month of substitution, not
in excess of the Stated Principal Balance of the Deleted Mortgage
Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Rate not less than (and
not more than one percentage point in excess of) the Mortgage Rate
of the Deleted Mortgage Loan,
(iii) with respect to any
Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not
less than the Maximum Mortgage Rate on the Deleted Mortgage Loan,
(iv) with respect to any Adjustable-Rate Mortgage Loan, have a
Minimum Mortgage Rate not less than the Minimum Mortgage Rate of
the Deleted Mortgage Loan, (v) with respect to any Adjustable-Rate
Mortgage Loan, have a Gross Margin equal to the Gross Margin of the
Deleted Mortgage Loan, (vi) with respect to any Adjustable-Rate
Mortgage Loan, have a next Adjustment Date not more than two months
later than the next Adjustment Date on the Deleted Mortgage Loan,
(vii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan,
(viii) have the same Due Date as the Due Date on the Deleted
Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date, (x) have a risk grading
determined by the Originator at least equal to the risk grading
assigned on the Deleted Mortgage Loan and (xi) conform to each
representation and warranty set forth in Section 6 of the Mortgage
Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In
the event that one or more mortgage loans are substituted for one
or more Deleted Mortgage Loans, the amounts described in clause (i)
hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Rates described in clause (ii) hereof shall
be determined on the basis of weighted average Mortgage Rates, the
terms described in clause (vii) hereof shall be determined on the
basis of weighted average remaining term to maturity, the
Loan-to-Value Ratios described in clause (ix) hereof shall be
satisfied as to each such mortgage loan, the risk gradings
described in clause (x) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause
(xi) hereof must be satisfied as to each Qualified Substitute
Mortgage Loan or in the aggregate, as the case may be.
“Rate/Term Refinancing”:
A Refinanced Mortgage Loan, the proceeds of which are not more than
a nominal amount in excess of the existing first mortgage loan and
any subordinate mortgage loan on the related Mortgaged Property and
related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan
and any subordinate mortgage loan of the Mortgagor on the related
Mortgaged Property and to pay related closing costs.
“Rating Agency or Rating
Agencies”: Fitch, Moody’s and S&P or their
successors. If such agencies or their successors are no longer in
existence, “Rating Agencies” shall be such nationally
recognized statistical rating agencies, or other comparable
Persons, designated by the Depositor, notice of which designation
shall be given to the Trustee and the Servicer.
“Realized Loss”: With
respect to each Mortgage Loan as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal
to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery
Determination was made, plus (ii) accrued interest from the Due
Date as to which interest was last paid by the Mortgagor through
the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual
rate at which interest was then accruing on such Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance of
such Mortgage Loan as of the close of business on the Distribution
Date during such calendar month, plus (iii) any amounts previously
withdrawn from the Collection Account in
respect of such Mortgage Loan
pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during
the calendar month in which such Final Recovery Determination was
made, net of amounts that are payable therefrom to the Servicer
with respect to such Mortgage Loan pursuant to Section
3.11(a)(iii).
With respect to any REO Property as
to which a Final Recovery Determination has been made, an amount
(not less than zero) equal to (i) the unpaid principal balance of
the related Mortgage Loan as of the date of acquisition of such REO
Property on behalf of REMIC I, plus (ii) accrued interest from the
Due Date as to which interest was last paid by the Mortgagor in
respect of the related Mortgage Loan through the end of the
calendar month immediately preceding the calendar month in which
such REO Property was acquired, calculated in the case of each
calendar month during such period (A) at an annual rate equal to
the annual rate at which interest was then accruing on the related
Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus
(iii) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property
was acquired and ending with the calendar month in which such Final
Recovery Determination was made, plus (iv) any amounts previously
withdrawn from the Collection Account in respect of the related
Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b),
minus (v) the aggregate of all Advances and Servicing Advances (in
the case of Servicing Advances, without duplication of amounts
netted out of the rental income, Insurance Proceeds and Liquidation
Proceeds described in clause (vi) below) made by the Servicer in
respect of such REO Property or the related Mortgage Loan for which
the Servicer has been or, in connection with such Final Recovery
Determination, will be reimbursed pursuant to Section 3.23 out of
rental income, Insurance Proceeds and Liquidation Proceeds received
in respect of such REO Property, minus (vi) the total of all net
rental income, Insurance Proceeds and Liquidation Proceeds received
in respect of such REO Property that has been, or in connection
with such Final Recovery Determination, will be transferred to the
Distribution Account pursuant to Section 3.23.
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 subject of a Debt Service Reduction, the
portion, if any, of the reduction in each affected Monthly Payment
attributable to a reduction in the Mortgage Rate imposed by a court
of competent jurisdiction. Each such Realized Loss shall be deemed
to have been incurred on the Due Date for each affected Monthly
Payment.
If the 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 principal distributions
on any Distribution Date.
“Record Date”: With
respect to each Distribution Date and any Book-Entry Certificate,
the Business Day immediately preceding such Distribution Date. With
respect to each Distribution Date and any other Certificates,
including any Definitive Certificates, the last
Business Day of the month
immediately preceding the month in which such Distribution Date
occurs.
“Reference Banks”:
Deutsche Bank AG, Barclays’ Bank PLC, The Tokyo Mitsubishi
Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are
not suitable to serve as a Reference Bank, then any leading banks
selected by the Trustee, after consultation with the Depositor,
which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of
business in London and (ii) not controlling, under the control of
or under common control with the Depositor or any Affiliate
thereof.
“Refinanced Mortgage
Loan”: A Mortgage Loan the proceeds of which were not used to
purchase the related Mortgaged Property.
“Regular Certificate”:
Any Class A Certificate, Mezzanine Certificate, Class CE
Certificate or Class P Certificate.
“Regular Interest”: A
“regular interest” in a REMIC within the meaning of
Section 860G(a)(1) of the Code.
“Relief Act”: The
Servicemembers Civil Relief Act.
“Relief Act Interest
Shortfall”: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest collectible
on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.
“REMIC”: A “real
estate mortgage investment conduit” within the meaning of
Section 860D of the Code.
“REMIC I”: The
segregated pool of assets subject hereto, constituting the primary
trust created hereby and to be administered hereunder, with respect
to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges related thereto as from time
to time are subject to this Agreement, together with the Mortgage
Files relating thereto, and together with all collections thereon
and proceeds thereof; (ii) any REO Property, together with all
collections thereon and proceeds thereof; (iii) the Trustee’s
rights with respect to the Mortgage Loans under all insurance
policies required to be maintained pursuant to this Agreement and
any proceeds thereof; (iv) the Depositor’s rights under the
Mortgage Loan Purchase Agreement (including any security interest
created thereby); and (v) the Collection Account (other than any
amounts representing any Servicer Prepayment Charge Payment
Amount), the Distribution Account (other than any amounts
representing any Servicer Prepayment Charge Payment Amount) and any
REO Account, and such assets that are deposited therein from time
to time and any investments thereof, together with any and all
income, proceeds and payments with respect thereto. Notwithstanding
the foregoing, however, REMIC I specifically excludes all payments
and other collections of principal and interest due on the Mortgage
Loans on or before the Cut-off Date, all Prepayment Charges payable
in connection with Principal Prepayments on the Mortgage Loans made
before the Cut-off Date, the Net WAC Rate Carryover Reserve Account
and the Cap Contracts.
“REMIC I Interest Loss
Allocation Amount”: With respect to any Distribution Date, an
amount equal to (a) the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I
Regular Interest I-LTAA minus the Marker Rate, divided by (b)
12.
“REMIC I Overcollateralized
Amount”: With respect to any date of determination, (i) 1% of
the aggregate Uncertificated Balance of the REMIC I Regular
Interests minus (ii) the aggregate Uncertificated Balance of REMIC
I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC
I Regular Interest I-LTP, in each case as of such date of
determination.
“REMIC I Principal Loss
Allocation Amount”: With respect to any Distribution Date, an
amount equal to the product of (i) the aggregate Stated Principal
Balance of the Mortgage Loans and REO Properties then outstanding
and (ii) 1 minus a fraction, the numerator of which is two times
the aggregate Uncertificated Balance of REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8 and REMIC I Regular Interest I-LTM9 and the denominator of
which is the aggregate Uncertificated Balance of REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9 and REMIC I
Regular Interest I-LTZZ.
“REMIC I Regular
Interest”: Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a
“regular interest” in REMIC I. Each REMIC I Regular
Interest shall accrue interest at the related REMIC I Remittance
Rate in effect from time to time or shall otherwise be entitled to
interest as set forth herein, and shall be entitled to
distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set
forth in the Preliminary Statement hereto.
“REMIC I Regular
Interest”: Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a
“regular interest” in REMIC I. Each REMIC I Regular
Interest shall accrue interest at the related REMIC I Remittance
Rate in effect from time to time or shall otherwise be entitled to
interest as set forth herein, and shall be entitled to
distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto. The REMIC
I Regular Interests are as follows: REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTA2, REMIC
I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I
Regular Interest I-LTZZ and REMIC I Regular Interest
I-LTP.
“REMIC I Remittance
Rate”: With respect to each REMIC I Regular Interest and any
Distribution Date, the weighted average of the Expense Adjusted
Mortgage Rates of the Mortgage Loans, weighted based on their
Stated Principal Balances as of the first day of the related Due
Period.
“REMIC I Required
Overcollateralized Amount”: 1% of the Overcollateralization
Target Amount.
“REMIC II”: The
segregated pool of assets consisting of all of the REMIC I Regular
Interests conveyed in trust to the Trustee, for the benefit of the
Class A Certificates, the Mezzanine Certificates, the Class CE
Certificates, the Class P Certificates and the Class R-II Interest
and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
“REMIC Provisions”:
Provisions of the federal income tax law relating to real estate
mortgage investment conduits, which appear at Section 860A through
860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
“Remittance Report”: A
report in form and substance acceptable to the Trustee on an
electronic data file or tape prepared by the Servicer pursuant to
Section 4.03 with such additions, deletions and modifications as
agreed to by the Trustee and the Servicer.
“Rents from Real
Property”: With respect to any REO Property, gross income of
the character described in Section 856(d) of the Code as being
included in the term “rents from real
property.”
“REO Account”: The
account or accounts maintained, or caused to be maintained, by the
Servicer in respect of an REO Property pursuant to Section
3.23.
“REO Disposition”: The
sale or other disposition of an REO Property on behalf of REMIC
I.
“REO Imputed Interest”:
As to any REO Property, for any calendar month during which such
REO Property was at any time part of REMIC I, one month’s
interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of such REO Property (or, in the case of the
first such calendar month, of the related Mortgage Loan, if
appropriate) as of the close of business on the Distribution Date
in such calendar month.
“REO Principal
Amortization”: With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all
amounts received in respect of such REO Property during such
calendar month, whether in the form of rental income, sale proceeds
(including, without limitation, that portion of the Termination
Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable
to such REO Property) or otherwise, net of any portion of such
amounts (i) payable pursuant to Section 3.23(c) in respect of the
proper operation, management and maintenance of such REO Property
or (ii) payable or reimbursable to the Servicer pursuant to Section
3.23(d) for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in
respect of such REO Property or the related Mortgage Loan, over (b)
the REO Imputed Interest in respect of such REO Property for such
calendar month.
“REO Property”: A
Mortgaged Property acquired by the Servicer on behalf of REMIC I
through foreclosure or deed-in-lieu of foreclosure, as described in
Section 3.23.
“Request for Release”: A
release signed by a Servicing Officer, in the form of Exhibit E
attached hereto.
“Reserve Interest Rate”:
With respect to any Interest Determination Date, the rate per annum
that the Trustee determines to be either (i) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of
1/16%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee, after consultation with the
Depositor, are quoting on the relevant Interest Determination Date
to the principal London offices of leading banks in the London
interbank market or (ii) in the event that the Trustee can
determine no such arithmetic mean, the lowest one-month U.S. dollar
lending rate which New York City banks selected by the Trustee,
after consultation with the Depositor, are quoting on such Interest
Determination Date to leading European banks.
“Residential Dwelling”:
Any one of the following: (i) an attached, detached or
semi-detached one-family dwelling, (ii) an attached, detached or
semi-detached two-to four-family dwelling, (iii) a one-family
dwelling unit in a Fannie Mae eligible condominium project, or (iv)
an attached, detached or semi-detached one-family dwelling in a
planned unit development, none of which is a co-operative or mobile
home (as defined in 42 United States Code, Section
5402(6)).
“Residual Certificates”:
The Class R Certificates.
“Residual Interest”: The
sole class of “residual interests” in a REMIC within
the meaning of Section 860G(a)(2) of the Code.
“Responsible Officer”:
When used with respect to the Trustee, any vice president, managing
director, director, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer,
any associate, any trust officer or assistant trust officer or any
other officer of the Trustee having direct responsibility over this
Agreement or otherwise engaged in performing functions similar to
those performed by any of the above designated officers and, with
respect to a particular matter, to whom such matter is referred
because of such officer’s knowledge of and familiarity with
the particular subject.
“Responsible Party”: NC
Capital Corporation, in its capacity as responsible party under the
Mortgage Loan Purchase Agreement.
“S&P”: Standard
& Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc., or its successor in interest.
“Seller”: Stanwich Asset
Acceptance Company, L.L.C. or its successor in interest, in its
capacity as seller under the Mortgage Loan Purchase
Agreement.
“Senior Interest Distribution
Amount”: With respect to any Distribution Date, an amount
equal to the sum of (i) the Interest Distribution Amount for such
Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date
for the Class A Certificates.
“Servicer”: New Century
Mortgage Corporation or any successor servicer appointed as herein
provided, in its capacity as Servicer hereunder.
“Servicer
Certification”: A written certification covering servicing of
the Mortgage Loans by the Servicer and signed by an officer of the
Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement
by the Staff of the Division of Corporation Finance of the
Securities and Exchange Commission Regarding Compliance by
Asset-Backed Issuers with Exchange Act Rules 13a-14 and 15d-14, as
in effect from time to time; provided that if, after the Closing
Date (a) the Sarbanes-Oxley Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is modified or superceded by
any subsequent statement, rule or regulation of the Securities and
Exchange Commission or any statement of a division thereof, or (c)
any future releases, rules and regulations are published by the
Securities and Exchange Commission from time to time pursuant to
the Sarbanes-Oxley Act of 2002, which in any such case affects the
form or substance of the required certification and results in the
required certification being, in the reasonable judgment of the
Servicer, materially more onerous than the form of the required
certification as of the Closing Date, the Servicer Certification
shall be as agreed to by the Servicer, the Depositor and the Seller
following a negotiation in good faith to determine how to comply
with any such new requirements.
“Servicer Event of
Default”: One or more of the events described in Section
7.01.
“Servicer Prepayment Charge
Payment Amount”: The amounts payable by the Servicer in
respect of any waived Prepayment Charges pursuant to Section
3.01.
“Servicer Remittance
Date”: With respect to any Distribution Date, by 3:00 p.m.
New York time on the Business Day preceding the related
Distribution Date.
“Servicer Termination
Test”: The Servicer Termination Test will be failed with
respect to any Distribution Date if the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last
day of the related Due Period (reduced by the aggregate amount of
Subsequent Recoveries received from the Cut-off Date through the
last day of the related Due Period) divided by aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date
exceeds the applicable percentages set forth below with respect to
such Distribution Date:
Payment Date Occurring
In
|
|
|
June 2008 through May
2009
|
3.50%
|
|
June 2009 through May
2010
|
5.25%
|
|
June 2010 through May
2011
|
6.75%
|
|
June 2011 and thereafter
|
7.25%
|
“Servicing Account”: The
account or accounts created and maintained pursuant to Section
3.09.
“Servicing Advances”:
The reasonable “out-of-pocket” costs and expenses
incurred by the Servicer in connection with a default, delinquency
or other unanticipated event by the Servicer 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, (ii) any enforcement or judicial proceedings, including
but not limited to foreclosures, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in
connection therewith) and liquidation of any REO Property and (iv)
the performance of its obligations under Section 3.01, Section
3.09, Section 3.14, Section 3.16 and Section 3.23. The Servicer
shall not be required to make any Nonrecoverable Servicing
Advances.
“Servicing Fee”: With
respect to each Mortgage Loan and for any calendar month, an amount
equal to the Servicing Fee Rate accrued for one month (or in the
event of any payment of interest which accompanies a Principal
Prepayment in full or in part made by the Mortgagor during such
calendar month, interest for the number of days covered by such
payment of interest) on the same principal amount on which interest
on such Mortgage Loan accrues for such calendar month, calculated
on the basis of a 360-day year consisting of twelve 30-day months.
A portion of such Servicing Fee may be retained by any Sub-Servicer
as its servicing compensation.
“Servicing Fee Rate”:
0.50% per annum.
“Servicing Officer”: Any
officer of the Servicer involved in, or responsible for, the
administration and servicing of Mortgage Loans, whose name and
specimen signature appear on a list of Servicing Officers furnished
by the Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.
“Servicing Transfer
Costs”: Shall mean all reasonable costs and expenses incurred
by the Trustee in connection with the transfer of servicing from a
predecessor servicer, including, without limitation, any reasonable
costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee (or any successor servicer appointed pursuant to
Section 7.02) to service the Mortgage Loans properly and
effectively.
“Single Certificate”:
With respect to any Class of Certificates (other than the Class P
Certificates and the Residual Certificates), a hypothetical
Certificate of such Class evidencing a Percentage Interest for such
Class corresponding to an initial Certificate Principal
Balance of $1,000. With respect to
the Class P Certificates and the Residual Certificates, a
hypothetical Certificate of such Class evidencing a 100% Percentage
Interest in such Class.
“Startup Day”: With
respect to each Trust REMIC, the day designated as such pursuant to
Section 10.01(b) hereof.
“Stated Principal
Balance”: With respect to any Mortgage Loan: (a) as of any
date of determination up to but not including the Distribution Date
on which the proceeds, if any, of a Liquidation Event with respect
to such Mortgage Loan would be distributed, the principal balance
of such Mortgage Loan as of the Cut-off Date, as shown in the
Mortgage Loan Schedule, minus the sum of (i) the principal portion
of each Monthly Payment due on a Due Date subsequent to the Cut-off
Date, to the extent received from the Mortgagor or advanced by the
Servicer and distributed pursuant to Section 4.01 on or before such
date of determination, (ii) all Principal Prepayments received
after the Cut-off Date, to the extent distributed pursuant to
Section 4.01 on or before such date of determination, (iii) all
Liquidation Proceeds and Insurance Proceeds applied by the Servicer
as recoveries of principal in accordance with the provisions of
Section 3.16, to the extent distributed pursuant to Section 4.01 on
or before such date of determination, and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation
made during or prior to the Prepayment Period for the most recent
Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds,
if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a)
as of any date of determination up to but not including the
Distribution Date on which the proceeds, if any, of a Liquidation
Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance
of the related Mortgage Loan as of the date on which such REO
Property was acquired on behalf of REMIC I, minus the sum of (i) if
such REO Property was acquired before the Distribution Date in any
calendar month, the principal portion of the Monthly Payment due on
the Due Date in the calendar month of acquisition, to the extent
advanced by the Servicer and distributed pursuant to Section 4.01
on or before such date of determination, and (ii) the aggregate
amount of REO Principal Amortization in respect of such REO
Property for all previously ended calendar months, to the extent
distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds,
if any, of a Liquidation Event with respect to such REO Property
would be distributed, zero.
“Stepdown Date”: The
earlier to occur of (i) the Distribution Date on which the
aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (a) the
Distribution Date occurring in June 2008 and (b) the first
Distribution Date on which the Credit Enhancement Percentage
(calculated for this purpose only prior to any distribution of the
Principal Distribution Amount to the Certificates then entitled to
distributions of principal on such Distribution Date) is equal to
or greater than 45.70%.
“Sub-Servicer”: Any
Person with which the Servicer has entered into a Sub-Servicing
Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
“Sub-Servicing
Agreement”: The written contract between the Servicer and a
Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
“Subsequent Recoveries”:
As of any Distribution Date, unexpected amounts received by the
Servicer (net of any related expenses permitted to be reimbursed to
the Servicer) specifically related to a Mortgage Loan that was the
subject of a liquidation or an REO Disposition prior to the related
Prepayment Period that resulted in a Realized Loss.
“Substitution Shortfall
Amount”: As defined in Section 2.03(b).
“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 the Trust Fund due to the
classification of portions thereof as REMICs 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 Page 3750”:
The display designated as page “3750” on the Dow Jones
Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London
interbank offered rates of major banks).
“Termination Price”: As
defined in Section 9.01.
“Terminator”: As defined
in Section 9.01.
“Transfer”: Any direct
or indirect transfer, sale, pledge, hypothecation, or other form of
assignment of any Ownership Interest in a Certificate.
“Transferee”: Any Person
who is acquiring by Transfer any Ownership Interest in a
Certificate.
“Transferor”: Any Person
who is disposing by Transfer of any Ownership Interest in a
Certificate.
“Trigger Event”: A
Trigger Event is in effect on any Distribution Date on or after the
Stepdown Date if:
(a) the
Delinquency Percentage exceeds 34.00% of the then current Credit
Enhancement Percentage; or
(b) the
aggregate amount of Realized Losses incurred since the Cut-off Date
through the last day of the related Due Period (reduced by the
aggregate amount of Subsequent Recoveries received since the
Cut-off Date through the last day of the related Due Period)
divided by aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date exceeds the applicable percentages set forth
below with respect to such Distribution Date:
Distribution Date Occurring
In
|
|
|
June 2008 through May
2009
|
3.50%
|
|
June 2009 through May
2010
|
5.25%
|
|
June 2010 through May
2011
|
6.75%
|
|
June 2011 and thereafter
|
7.25%
|
“Trust Fund”:
Collectively, all of the assets of each Trust REMIC, the Net WAC
Rate Carryover Reserve Account, the Cap Contracts and the other
assets conveyed by the Depositor to the Trustee pursuant to Section
2.01.
“Trust REMIC”: Any of
REMIC I or REMIC II.
“Trustee”: Deutsche Bank
National Trust Company, a national banking association, or its
successor in interest, or any successor trustee appointed as herein
provided.
“Trustee Fee”: The
amount payable to the Trustee on each Distribution Date pursuant to
Section 8.05 as compensation for all services rendered by it in the
execution of the trust hereby created and in the exercise and
performance of any of the powers and duties of the Trustee
hereunder, which amount shall equal the Trustee Fee Rate accrued
for one month on the aggregate Stated Principal Balance of the
Mortgage Loans and any REO Properties as of the first day of the
related Due Period (or, in the case of the initial Distribution
Date, as of the Cut-off Date), calculated on the basis of a 360-day
year consisting of twelve 30-day months.
“Trustee Fee Rate”:
0.0043% per annum.
“Uncertificated
Balance”: The amount of any REMIC I Regular Interest
outstanding as of any date of determination. As of the Closing
Date, the Uncertificated Balance of each REMIC I Regular Interest
shall equal the amount set forth in the Preliminary Statement
hereto as its initial uncertificated balance. On each Distribution
Date, the Uncertificated Balance of each REMIC I Regular Interest
shall be reduced by all distributions of principal made on such
REMIC I Regular Interest on such Distribution Date pursuant to
Section 4.01 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.04. The Uncertificated Balance of
REMIC I Regular Interest I-LTZZ shall be increased by interest
deferrals as provided in Section 4.01(a)(1)(A)(i). The
Uncertificated Balance of each REMIC I Regular Interest shall never
be less than zero.
“Uncertificated
Interest”: With respect to any REMIC I Regular Interest for
any Distribution Date, one month’s interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for
such Distribution Date, accrued on the Uncertificated Balance
thereof immediately prior to such Distribution Date. Uncertificated
Interest in respect of any REMIC I Regular Interest shall accrue on
the basis of a 360-day year consisting of twelve 30-day months.
Uncertificated Interest with respect to each Distribution Date, as
to any REMIC I Regular Interest, shall be reduced by an amount
equal to the sum of (a) the aggregate Prepayment Interest
Shortfall, if any, for such Distribution Date to the extent not
covered by payments pursuant to Section 3.24 and (b) the aggregate
amount of any Relief Act Interest Shortfall, if any allocated, in
each case, to such REMIC I Regular Interest pursuant to Section
1.02. In addition, Uncertificated Interest with respect to each
Distribution Date, as to any REMIC
I Regular Interest shall be reduced
by Realized Losses, if any, allocated to such REMIC I Regular
Interest pursuant to Section 1.02 and Section 4.04.
“Underwriters’
Exemption”: An individual exemption issued by the United
States Department of Labor, Prohibited Transaction Exemption 90-30,
as amended, to Bear, Stearns & Co. Inc, for specific offerings
in which Bear, Stearns & Co. Inc. or any person directly or
indirectly, through one or more intermediaries, controlling,
controlled by or under common control with Bear, Stearns & Co.
Inc. is an underwriter, placement agent or a manager or co-manager
of the underwriting syndicate or selling group where the trust and
the offered certificates meet specified conditions. The
Underwriters’ Exemption, as amended, provides a partial
exemption for transactions involving certificates representing a
beneficial interest in a trust and entitling the holder to
pass-through payments of principal, interest and/or other payments
with respect to the trust’s assets.
“Uninsured Cause”: Any
cause of damage to a Mortgaged Property such that the complete
restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to
Section 3.14.
“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 the
income of which from sources without the United States is
includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade
or business within the United States, or a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons
have authority to control all substantial decisions of the trust.
The term “United States” shall have the meaning set
forth in Section 7701 of the Code or successor
provisions.
“Value”: With respect to
any Mortgaged Property, the lesser of (i) the lesser of (a) the
value thereof as determined by an appraisal made for the Originator
of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of Fannie Mae
and Freddie Mac and (b) the value thereof as determined by a review
appraisal conducted by the Originator in accordance with the
Originator’s underwriting guidelines, and (ii) the purchase
price paid for the related Mortgaged Property by the Mortgagor with
the proceeds of the Mortgage Loan; provided, however, (A) in the
case of a Refinanced Mortgage Loan, such value of the Mortgaged
Property is based solely upon the lesser of (1) the value
determined by an appraisal made for the Originator of such
Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum
requirements of Fannie Mae and Freddie Mac and (2) the value
thereof as determined by a review appraisal conducted by the
Originator in accordance with the Originator’s underwriting
guidelines, and (B) in the case of a Mortgage Loan originated in
connection with a
“lease-option purchase,”
such value of the Mortgaged Property is based on the lower of the
value determined by an appraisal made for the Originator of such
Mortgage Loan at the time of origination or the sale price of such
Mortgaged Property if the “lease option purchase price”
was set less than 12 months prior to origination, and is based on
the value determined by an appraisal made for the Originator of
such Mortgage Loan at the time of origination if the “lease
option purchase price” was set 12 months or more prior to
origination.
“Voting Rights”: The
portion of the voting rights of all of the Certificates which is
allocated to any Certificate. With respect to any date of
determination, 98% of all Voting Rights will be allocated among the
holders of the Class A Certificates, the Mezzanine Certificates and
the Class CE Certificates in proportion to the then outstanding
Certificate Principal Balances of their respective Certificates, 1%
of all Voting Rights will be allocated to the holders of the Class
P Certificates and 1% of all Voting Rights will be allocated among
the holders of the Residual Certificates. The Voting Rights
allocated to each Class of Certificate shall be allocated among
Holders of each such Class in accordance with their respective
Percentage Interests as of the most recent Record Date.
|
SECTION 1.02
|
Allocation of Certain Interest
Shortfalls.
|
For purposes of calculating the
amount of Accrued Certificate Interest and the amount of the
Interest Distribution Amount for the Class A Certificates, the
Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment
Interest Shortfalls (to the extent not covered by payments by the
Servicer pursuant to Section 3.24) and any Relief Act Interest
Shortfall incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to the Class CE
Certificates based on, and to the extent of, one month’s
interest at the then applicable Pass-Through Rate on the Notional
Amount of the Class CE Certificates and, thereafter, among the
Class A Certificates and the Mezzanine Certificates on a pro
rata basis based on, and to the extent of, one month’s
interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance of each such Certificate
and (2) the aggregate amount of any Realized Losses incurred for
any Distribution Date shall be allocated to the Class CE
Certificates based on, and to the extent of, one month’s
interest at the then applicable Pass-Through Rate on the Notional
Amount of the Class CE Certificates.
For purposes of calculating the
amount of Uncertificated Interest for the REMIC I Regular Interests
for any Distribution Date, the aggregate amount of any Prepayment
Interest Shortfalls (to the extent not covered by payments by the
Servicer pursuant to Section 3.24) and any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA3, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8 and REMIC I Regular
Interest I-LTM9 and REMIC I Regular Interest I-LTZZ pro rata
based on, and to the extent of, one month’s interest at the
then applicable respective Pass-Through Rate on the respective
Uncertificated Balance of each such REMIC I Regular
Interest.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF
CERTIFICATES
|
SECTION 2.01
|
Conveyance of the Mortgage
Loans.
|
The Depositor, concurrently with the
execution and delivery hereof, does hereby transfer, assign, set
over and otherwise convey to the Trustee without recourse, for the
benefit of the Certificateholders, all the right, title and
interest of the Depositor, including any security interest therein
for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the
Depositor under the Mortgage Loan Purchase Agreement, and all other
assets included or to be included in REMIC I. Such assignment
includes all interest and principal received by the Depositor or
the Servicer on or with respect to the Mortgage Loans (other than
payments of principal and interest due on such Mortgage Loans on or
before the Cut-off Date). The Depositor herewith delivers to the
Trustee an executed copy of the Mortgage Loan Purchase
Agreement.
In connection with such transfer and
assignment, the Depositor, does hereby deliver to, and deposit with
the Trustee the following documents or instruments with respect to
each Mortgage Loan so transferred and assigned (in each case, a
“Mortgage File”):
(i) the
original Mortgage Note, endorsed in blank or in the following form
“Pay to the order of Deutsche Bank National Trust Company, as
Trustee under the applicable agreement, without recourse,”
with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to the Person so endorsing
to the Trustee;
(ii) the
original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording
thereon;
|
(iii)
|
an original Assignment in
blank;
|
(iv) the
original recorded Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the
Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii);
(v) the
original or copies of each assumption, modification or substitution
agreement, if any; and
(vi) the
original lender’s title insurance policy or, if the original
title policy has not been issued, the irrevocable commitment to
issue the same.
With respect to a maximum of
approximately 2.0% of the Original Mortgage Loans, by outstanding
Stated Principal Balance of the Original Mortgage Loans as of the
Cut-off Date, if any original Mortgage Note referred to in Section
2.01(i) above cannot be located, the obligations of the Depositor
to deliver such documents shall be deemed to be satisfied
upon
delivery to the Trustee of a
photocopy of such Mortgage Note, if available, with a lost note
affidavit substantially in the form of Exhibit H attached hereto.
If any of the original Mortgage Notes for which a lost note
affidavit was delivered to the Trustee is subsequently located,
such original Mortgage Note shall be delivered to the Trustee
within three Business Days.
If any of the documents referred to
in Sections 2.01(ii), (iii) or (iv) above has, as of the Closing
Date, been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original
of such document, the obligations of the Depositor to deliver such
documents shall be deemed to be satisfied upon (1) delivery to the
Trustee of a copy of each such document certified by the Originator
in the case of (x) above or the applicable public recording office
in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is
certified by the Originator, delivery to the Trustee promptly upon
receipt thereof of either the original or a copy of such document
certified by the applicable public recording office to be a true
and complete copy of the original. Notice shall be provided to the
Trustee and the Rating Agencies by the Depositor if delivery
pursuant to clause (2) above will be made more than 180 days after
the Closing Date. If the original lender’s title insurance
policy was not delivered pursuant to Section 2.01(vi) above, the
Depositor shall deliver or cause to be delivered to the Trustee,
promptly after receipt thereof, the original lender’s title
insurance policy. The Depositor shall deliver or cause to be
delivered to the Trustee promptly upon receipt thereof any other
original documents constituting a part of a Mortgage File received
with respect to any Mortgage Loan, including, but not limited to,
any original documents evidencing an assumption or modification of
any Mortgage Loan.
The Trustee shall enforce the
obligations of the Seller under the Mortgage Loan Purchase
Agreement to promptly (within sixty Business Days following the
later of the Closing Date and the date of receipt by the Trustee of
the recording information for a Mortgage, but in no event later
than ninety days following the Closing Date) submit or cause to be
submitted for recording, at the expense of the Responsible Party
and at no expense to the Trust Fund, the Trustee or the Depositor,
in the appropriate public office for real property records, each
Assignment referred to in Sections 2.01(iii) and (iv) above and the
Depositor shall execute each original Assignment or cause each
original Assignment to be executed in the following form:
“Deutsche Bank National Trust Company, as Trustee under the
applicable agreement.” In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the
Seller shall promptly prepare or cause to be prepared (at the
expense of the Responsible Party) a substitute Assignment or cure
or cause to be cured such defect, as the case may be, and
thereafter cause each such Assignment to be duly recorded. If the
Responsible Party is unable to pay the cost of recording the
Assignments, such expense will be paid by the Trustee and shall be
reimbursable to the Trustee as an Extraordinary Trust Fund Expense.
Notwithstanding the foregoing, the Trustee shall not be responsible
for determining whether any Assignment delivered by the Depositor
hereunder is in recordable form.
Notwithstanding the foregoing,
however, for administrative convenience and facilitation of
servicing and to reduce closing costs, the Assignments shall not be
required to be submitted for recording (except with respect to any
Mortgage Loan located in Maryland) unless the Trustee or the
Depositor receives written notice that such failure to record would
result in a withdrawal or a downgrading by any Rating Agency of the
rating on any Class of Certificates; provided ,
however , the Trustee shall enforce the obligations of the
Seller under the Mortgage
Loan Purchase Agreement to submit or
cause to be submitted each Assignment for recording in the manner
described above, at no expense to the Trust Fund or the Trustee,
upon the earliest to occur of: (i) reasonable direction by Holders
of Certificates entitled to at least 25% of the Voting Rights, (ii)
the occurrence of a Servicer Event of Default, (iii) the occurrence
of a bankruptcy, insolvency or foreclosure relating to the
Servicer, (iv) the occurrence of a servicing transfer as described
in Section 7.02 hereof, (v) with respect to any one Assignment, the
occurrence of a bankruptcy, insolvency or foreclosure relating to
the Mortgagor under the related Mortgage and (vi) any Mortgage Loan
that is 90 days or more Delinquent. Upon receipt of written notice
by the Trustee from the Servicer that recording of the Assignments
is required pursuant to one or more of the conditions set forth in
the preceding sentence, the Depositor shall be required to deliver
such Assignments or shall cause such Assignments to be delivered
within 30 days following receipt of such notice.
All original documents relating to
the Mortgage Loans that are not delivered to the Trustee are and
shall be held by or on behalf of the Seller, the Depositor or the
Servicer, as the case may be, in trust for the benefit of the
Trustee on behalf of the Certificateholders. In the event that any
such original document is required pursuant to the terms of this
Section 2.01 to be a part of a Mortgage File, such document shall
be delivered promptly to the Trustee. Any such original document
delivered to or held by the Depositor that is not required pursuant
to the terms of this Section to be a part of a Mortgage File, shall
be delivered promptly to the Servicer.
The parties hereto understand and
agree that it is not intended that any Mortgage Loan be included in
the Trust that is a “high-cost home loan” as defined by
the Homeownership and Equity Protection Act of 1994 or any other
applicable predatory or abusive lending laws.
The Depositor hereby directs the
Trustee to execute, deliver and perform its obligations under the
Cap Contracts on the Closing Date and thereafter on behalf of the
Holders of the Class A Certificates and the Mezzanine Certificates.
The Depositor, the Servicer and the Holders of the Class A
Certificates and the Mezzanine Certificates by their acceptance of
such Certificates acknowledge and agree that the Trustee shall
execute, deliver and perform its obligations under the Cap
Contracts and shall do so solely in its capacity as Trustee of the
Trust Fund and not in its individual capacity.
|
SECTION 2.02
|
Acceptance of REMIC I by
Trustee.
|
The Trustee, acknowledges receipt,
subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next
paragraph below, of the documents referred to in Section 2.01
(other than such documents described in Section 2.01(v)) above and
all other assets included in the definition of “REMIC
I” under clauses (i), (iii), (iv) and (v) (to the extent of
amounts attributable thereto deposited into the Distribution
Account) and declares that it holds and will hold such documents
and the other documents delivered to it constituting a Mortgage
File, and that it holds or will hold all such assets and such other
assets included in the definition of “REMIC I” in trust
for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee agrees, for the benefit
of the Certificateholders, to review each Mortgage File on or
before the Closing Date and to certify in substantially the form
attached hereto as Exhibit C-1 that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid
in full or any Mortgage Loan specifically identified in the
exception report annexed thereto as not being covered by such
certification), (i) all documents constituting part of such
Mortgage File (other than such documents described in Section
2.01(v)) required to be delivered to it pursuant to this Agreement
are in its possession, (ii) such documents have been reviewed by it
and appear regular on their face and relate to such Mortgage Loan
and (iii) based on its examination and only as to the foregoing,
the information set forth in the Mortgage Loan Schedule that
corresponds to items (i), (iii), (xi), (xii) and (xv) of the
definition of “Mortgage Loan Schedule” accurately
reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trustee was under
no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine
whether they are genuine, enforceable, valid, legally binding,
effective or appropriate for the represented purpose or whether
they have actually been recorded or are in recordable form or that
they are other than what they purport to be on their face, (ii) to
determine whether any Mortgage File should include any of the
documents specified in clause (v) of Section 2.01 or (iii) to
determine the perfection or priority of any security interest in
any such documents or instruments. Notwithstanding the foregoing,
in conducting the review described in this Section 2.02, the
Trustee shall not be responsible for determining (i) if an
Assignment is sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the
sale of the Mortgage or (ii) if a Mortgage creates a first lien on,
or first priority security interest in, a Mortgaged
Property.
Prior to the first anniversary date
of this Agreement, the Trustee shall deliver to the Depositor and
the Servicer a final certification in the form annexed hereto as
Exhibit C-2 evidencing the completeness of the Mortgage Files, with
any applicable exceptions noted thereon, and the Servicer shall
forward a copy thereof to any Sub-Servicer.
If in the process of reviewing the
Mortgage Files and making or preparing, as the case may be, the
certifications referred to above, the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or
defective in any material respect, at the conclusion of its review
the Trustee shall so notify the Depositor and the Servicer. In
addition, upon the discovery by the Depositor, the Servicer or the
Trustee of a breach of any of the representations and warranties
made by either the Responsible Party or the Seller in the related
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan
which materially adversely affects such Mortgage Loan or the
interests of the Certificateholders in such Mortgage Loan, the
party discovering such breach shall give prompt written notice to
the other parties.
The Trustee shall, at the written
request and expense of any Certificateholder, provide a written
report to such Certificateholder of all Mortgage Files released to
the Servicer for servicing purposes.
The Depositor and the Trustee intend
that the assignment and transfer herein contemplated constitute a
sale of the Mortgage Loans, the related Mortgage Notes and the
related documents, conveying good title thereto free and clear of
any liens and encumbrances, from the Depositor to the Trustee in
trust for the benefit of the Certificateholders and that such
property not be part of the Depositor’s estate or property of
the Depositor in the event of any insolvency by the Depositor. In
the event that such conveyance is deemed to be, or to be made as
security for, a loan, the parties intend that the Depositor shall
be deemed to have granted and does hereby grant to the Trustee a
first priority perfected security interest in all of the
Depositor’s right, title
and interest in and to the Mortgage
Loans, the related Mortgage Notes and the related documents, and
that this Agreement shall constitute a security agreement under
applicable law.
|
SECTION 2.03
|
Repurchase or Substitution of Mortgage Loans by
the Responsible Party and the Seller.
|
(a) Upon
discovery or receipt of notice of any materially defective document
in, or that a document is missing from, a Mortgage File or of the
breach by the Responsible Party or the Seller of any
representation, warranty or covenant under the Mortgage Loan
Purchase Agreement in respect of any Mortgage Loan that materially
adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly
notify the Seller, the Responsible Party and the Servicer of such
defect, missing document or breach and request that the Responsible
Party or the Seller, as applicable, deliver such missing document
or cure such defect or breach within 60 days from the date the
Responsible Party or the Seller, as applicable, was notified of
such missing document, defect or breach, and if the Responsible
Party or the Seller, as applicable, does not deliver such missing
document or cure such defect or breach in all material respects
during such period, the Trustee shall enforce the obligations of
the Responsible Party or the Seller, as applicable, under the
Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan
from REMIC I at the Purchase Price within 90 days after the date on
which the Responsible Party or the Seller, as applicable, was
notified (subject to Section 2.03(c)) of such missing document,
defect or breach, if and to the extent that the Responsible Party
or the Seller, as applicable, is obligated to do so under the
Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be remitted to the Servicer for
deposit in the Collection Account and the Trustee, upon receipt of
written certification from the Servicer of such deposit, shall
release to the Responsible Party or the Seller, as applicable, the
related Mortgage File and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without
recourse, as the Responsible Party or the Seller, as applicable,
shall furnish to it and as shall be necessary to vest in the
Responsible Party or the Seller, as applicable, any Mortgage Loan
released pursuant hereto. The Trustee shall not have any further
responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so
provided in the Mortgage Loan Purchase Agreement, the Responsible
Party or the Seller, as applicable, may cause such Mortgage Loan to
be removed from REMIC I (in which case it shall become a Deleted
Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans in the manner and subject to the limitations set
forth in Section 2.03(b); provided, however, the Responsible Party
may not substitute a Qualified Substitute Mortgage Loan for any
Deleted Mortgage Loan that violates any predatory or abusive
lending law. It is understood and agreed that the obligation of the
Responsible Party and the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as
to which such a breach has occurred and is continuing shall
constitute the sole remedy respecting such omission, defect or
breach available to the Trustee and the
Certificateholders.
(b) Any
substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the date which is two years after the Startup Day for
REMIC I.
As to any Deleted Mortgage Loan for
which the Responsible Party or the Seller, as applicable,
substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Responsible Party or the
Seller, as applicable, delivering to the Trustee, for such
Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents
and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officers’
Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in
connection with such substitution. The Trustee shall acknowledge
receipt for such Qualified Substitute Mortgage Loan or Loans and,
within ten Business Days thereafter, shall review such documents as
specified in Section 2.02 and deliver to the Depositor and the
Servicer, with respect to such Qualified Substitute Mortgage Loan
or Loans, a certification substantially in the form attached hereto
as Exhibit C-1, with any applicable exceptions noted thereon.
Within one year of the date of substitution, the Trustee shall
deliver to the Depositor and the Servicer a certification
substantially in the form of Exhibit C-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of
substitution are not part of REMIC I and will be retained by the
Responsible Party or the Seller, as applicable. For the month of
substitution, distributions to Certificateholders will reflect the
Monthly Payment due on such Deleted Mortgage Loan on or before the
Due Date in the month of substitution, and the Responsible Party or
the Seller, as applicable, shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Depositor shall give or cause to be given
written notice to the Certificateholders that such substitution has
taken place, shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage
Loan or Loans and shall deliver a copy of such amended Mortgage
Loan Schedule to the Trustee. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall constitute part
of the Mortgage Pool and shall be subject in all respects to the
terms of this Agreement and the Mortgage Loan Purchase Agreement,
including, all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement.
For any month in which the
Responsible Party or the Seller, as applicable, substitutes one or
more Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the Servicer will determine the amount (the
“Substitution Shortfall Amount”), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans exceeds
the aggregate of, as to each such Qualified Substitute Mortgage
Loan, the Stated Principal Balance thereof as of the date of
substitution, together with one month’s interest on such
Stated Principal Balance at the applicable Net Mortgage Rate, plus
all outstanding Advances and Servicing Advances (including
Nonrecoverable Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, the Responsible
Party or the Seller, as applicable, will deliver or cause to be
delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Shortfall Amount, if any, and the
Trustee, upon receipt of the related Qualified Substitute Mortgage
Loan or Loans and certification by the Servicer of such deposit,
shall release to the Responsible Party or the Seller, as
applicable, the related Mortgage File or Files and the Trustee
shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, the Responsible Party or
the Seller, as applicable, shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released
pursuant hereto.
In addition, the Responsible Party
or the Seller, as applicable, shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed
on any Trust REMIC, 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 Trust
REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(c) Upon
discovery by the Depositor, the Servicer or the Trustee that any
Mortgage Loan does not constitute a “qualified
mortgage” within the meaning of Section 860G(a)(3) of the
Code, the party discovering such fact shall within two Business
Days give written notice thereof to the other parties. In
connection therewith, the Responsible Party shall repurchase or,
subject to the limitations set forth in Section 2.03(b), substitute
one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt
of such notice with respect to such affected Mortgage Loan. Such
repurchase or substitution shall be made by (i) the Responsible
Party or the Seller, as the case may be, if the affected Mortgage
Loan’s status as a non-qualified mortgage is or results from
a breach of any representation, warranty or covenant made by the
Responsible Party or the Seller, as the case may be, under the
Mortgage Loan Purchase Agreement, or (ii) the Depositor, if the
affected Mortgage Loan’s status as a non-qualified mortgage
is a breach of no representation or warranty. Any such repurchase
or substitution shall be made in the same manner as set forth in
Section 2.03(a). The Trustee shall reconvey to the Responsible
Party the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or
warranty.
|
SECTION 2.04
|
Reserved.
|
|
|
SECTION 2.05
|
Representations, Warranties and
Covenants of the Servicer.
|
The Servicer hereby represents,
warrants and covenants to the Trustee, for the benefit of the
Certificateholders and to the Depositor that as of the Closing Date
or as of such date specifically provided herein:
(i) The
Servicer is a corporation duly organized and validly existing under
the laws of the State of California and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by the Servicer in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is
in compliance with the doing business laws of any such State, to
the extent necessary to ensure its ability to enforce each Mortgage
Loan and to service the Mortgage Loans in accordance with the terms
of this Agreement;
(ii) The
Servicer has the full power and authority to conduct its business
as presently conducted by it and to execute, deliver and perform,
and to enter into and consummate, all transactions contemplated by
this Agreement. The Servicer has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and
delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Depositor and the
Trustee, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against it in accordance with its
terms
except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting the enforcement of creditors’ rights generally
and by general principles of equity;
(iii) The
execution and delivery of this Agreement by the Servicer, the
servicing of the Mortgage Loans by the Servicer hereunder, the
consummation by the Servicer of any other of the transactions
herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Servicer
and will not (A) result in a breach of any term or provision of the
charter or by-laws of the Servicer or (B) conflict with, result in
a breach, violation or acceleration of, or result in a default
under, the terms of any other material agreement or instrument to
which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Servicer; and the Servicer is not a
party to, bound by, or in breach or violation of any indenture or
other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects or, to the
Servicer’s knowledge, would in the future materially and
adversely affect, (x) the ability of the Servicer to perform its
obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Servicer taken as
a whole;
(iv) The
Servicer is a HUD approved servicer. No event has occurred,
including but not limited to a change in insurance coverage, that
would make the Servicer unable to comply with HUD eligibility
requirements or that would require notification to HUD;
(v) The
Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant made by it
and contained in this Agreement;
(vi) No
litigation is pending against the Servicer that would materially
and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Servicer to service the
Mortgage Loans or to perform any of its other obligations hereunder
in accordance with the terms hereof;
(vii) There
are no actions or proceedings against, or investigations known to
it of, the Servicer before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement,
(B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Servicer of
its obligations under, or validity or enforceability of, this
Agreement;
(viii) No
consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Servicer of, or compliance by the Servicer
with, this Agreement or the consummation by it of the transactions
contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date;
(ix) The
Servicer will not waive any Prepayment Charge unless it is waived
in accordance with the standard set forth in Section 3.01;
and
(x) The
Servicer has fully furnished and will continue to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company or their successors on a
monthly basis.
It is understood and agreed that the
representations, warranties and covenants set forth in this Section
2.05 shall survive delivery of the Mortgage Files to the Trustee
and shall inure to the benefit of the Trustee, the Depositor and
the Certificateholders. Upon discovery by any of the Depositor, the
Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests
therein of the Certificateholders, the party discovering such
breach shall give prompt written notice (but in no event later than
two Business Days following such discovery) to the Trustee. Subject
to Section 7.01, unless such breach shall not be susceptible of
cure within 90 days, the obligation of the Servicer set forth in
this Section 2.05 to cure breaches shall constitute the sole remedy
against the Servicer available to the Certificateholders, the
Depositor and the Trustee on behalf of the Certificateholders
respecting a breach of the representations, warranties and
covenants contained in this Section 2.05. Notwithstanding the
foregoing, within 90 days of the earlier of discovery by the
Servicer or receipt of notice by the Servicer of the breach of the
representation or covenant of the Servicer set forth in Section
2.05(ix) above, which breach materially and adversely affects the
interests of the Holders of the Class P Certificates in any
Prepayment Charge, the Servicer shall pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection
Account.
|
SECTION 2.06
|
Issuance of the REMIC I Regular Interests and
the Class R-I Interest.
|
The Trustee acknowledges the
assignment to it of the Mortgage Loans and the delivery to it of
the Mortgage Files, subject to the provisions of Section 2.01 and
Section 2.02, together with the assignment to it of all other
assets included in REMIC I, the receipt of which is hereby
acknowledged. Concurrently with such assignment and delivery and in
exchange therefor, the Trustee, pursuant to the written request of
the Depositor executed by an officer of the Depositor, has
executed, authenticated and delivered to or upon the order of the
Depositor, the Class R Certificates (in respect of the Class R-I
Interest) in authorized denominations. The interests evidenced by
the Class R-I Interest, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in
REMIC I. The rights of the Class R-I Interest and REMIC II (as
holder of the REMIC I Regular Interest) to receive distributions
from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, and all ownership interests
evidenced or constituted by the Class R-I Interest and the REMIC I
Regular Interests, shall be as set forth in this
Agreement.
|
SECTION 2.07
|
Conveyance of the REMIC I Regular Interests;
Acceptance of REMIC II by the Trustee.
|
The Depositor, concurrently with the
execution and delivery hereof, does hereby transfer, assign, set
over and otherwise convey 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 Class R-II Interest and
REMIC II (as holder of the REMIC I Regular Interests). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares
that it holds and will hold the same in trust for the exclusive use
and benefit of all present and future Class R-II Interest and REMIC
II (as holder of the REMIC I Regular Interests). The rights of the
Class R-II Interest and REMIC II (as holder of the REMIC I Regular
Interests) to receive distributions from the proceeds of REMIC II
in respect of the Class R-II Interest and REMIC II Regular
Interests, respectively, and all ownership interests evidenced or
constituted by the Class R-II Interest and the REMIC II Regular
Interests, shall be as set forth in this Agreement.
|
SECTION 2.08
|
Issuance of Class R
Certificates.
|
The Trustee acknowledges the
assignment to it of the REMIC Regular Interests and, concurrently
therewith and in exchange therefor, pursuant to the written request
of the Depositor executed by an officer of the Depositor, the
Trustee has executed, authenticated and delivered to or upon the
order of the Depositor, the Class R Certificates in authorized
denominations.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
|
SECTION 3.01
|
Servicer to Act as
Servicer.
|
The Servicer shall service and
administer the Mortgage Loans on behalf of the Trust Fund and in
the best interests of and for the benefit of the Certificateholders
(as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in
the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to
customary and usual standards of practice of mortgage lenders and
loan servicers administering similar mortgage loans but without
regard to:
(i) any
relationship that the Servicer, any Sub-Servicer or any Affiliate
of the Servicer or any Sub-Servicer may have with the related
Mortgagor;
(ii) the
ownership or non-ownership of any Certificate by the Servicer or
any Affiliate of the Servicer;
|
(iii)
|
the Servicer’s obligation to
make Advances or Servicing Advances; or
|
(iv) the
Servicer’s or any Sub-Servicer’s right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the
foregoing, the Servicer (a) shall seek to maximize the timely and
complete recovery of principal and interest on the Mortgage Notes
and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such
waiver is standard and customary in servicing similar Mortgage
Loans and (ii) such waiver would, in the reasonable judgement of
the Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related
Mortgage Loan and, if such waiver is made in connection with a
refinancing of the related Mortgage Loan, such refinancing is
related to a default or a reasonably foreseeable default or (iii)
collection of the related Prepayment Charge would violate
applicable law. If a Prepayment Charge is waived as permitted by
meeting both of the standards described in clauses (i) and (iii)
above, then the Servicer is required to pay the amount of such
waived Prepayment Charge, for the benefit of the Holders of the
Class P Certificates, by depositing such amount into the Collection
Account together with and at the time that the amount prepaid on
the related Mortgage Loan is required to be deposited into the
Collection Account. Notwithstanding any other provisions of this
Agreement, any payments made by the Servicer in respect of any
waived Prepayment Charges pursuant to clauses (i) and (iii) shall
be deemed to be paid outside of the Trust Fund.
Subject only to the above-described
servicing standards and the terms of this Agreement and of the
respective Mortgage Loans, the Servicer shall have full power and
authority, acting alone or through Sub-Servicers as provided in
Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may
deem
necessary or desirable. Without
limiting the generality of the foregoing, the Servicer in its own
name or in the name of a Sub-Servicer is hereby authorized and
empowered by the Trustee when the Servicer believes it appropriate
in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Trust Fund,
the Certificateholders and the Trustee or any of them, and upon
written notice to the Trustee, any and all instruments of
satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to
the Mortgage Loans and the Mortgaged Properties and to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so
as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee
and Certificateholders. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be
provided to them thereby. The Servicer shall also comply in the
performance of this Agreement with all reasonable rules and
requirements of each insurer under any standard hazard insurance
policy. Subject to Section 3.17, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and
any Sub-Servicer any special or limited powers of attorney and
other documents necessary or appropriate to enable the Servicer or
any Sub-Servicer to carry out their servicing and administrative
duties hereunder and the Trustee shall not be liable for the
actions of the Servicer or any Sub-Servicers under such powers of
attorney.
Subject to Section 3.09 hereof, in
accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary
for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and
further as provided in Section 3.11. Any cost incurred by the
Servicer or by Sub-Servicers in effecting the timely payment of
taxes and assessments on a Mortgaged Property shall not, for the
purpose of calculating distributions to Certificateholders, be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so
permit.
Notwithstanding anything in this
Agreement to the contrary, the Servicer may not make any future
advances with respect to a Mortgage Loan (except as provided in
Section 4.03) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change
the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or
change the final maturity date on such Mortgage Loan (unless, as
provided in Section 3.07, the Mortgagor is in default with respect
to the Mortgage Loan or such default is, in the judgment of the
Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan
under Section 1001 of the Code (or Treasury regulations promulgated
thereunder) and (B) cause any Trust REMIC 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 Servicer may delegate its
responsibilities under this Agreement; provided, however, that no
such delegation shall release the Servicer from the
responsibilities or liabilities arising under this
Agreement.
|
SECTION 3.02
|
Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
|
(a) The
Servicer may enter into Sub-Servicing Agreements with Sub-Servicers
for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a
withdrawal or a downgrading by any Rating Agency of the rating on
any Class of Certificates. The Trustee is hereby authorized to
acknowledge, at the request of the Servicer, any Sub-Servicing
Agreement that, based on an Officers’ Certificate of the
Servicer delivered to the Trustee (upon which the Trustee can
conclusively rely), meets the requirements applicable to
Sub-Servicing Agreements set forth in this Agreement and that is
otherwise permitted under this Agreement.
Each Sub-Servicer shall be (i)
authorized to transact business in the state or states where the
related Mortgaged Properties it is to service are situated, if and
to the extent required by applicable law to enable the Sub-Servicer
to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the
Sub-Servicer requirements conforming to the provisions set forth in
Section 3.08 and provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement. The Servicer will
examine each Sub-Servicing Agreement and will be familiar with the
terms thereof. The terms of any Sub-Servicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The
Servicer and the Sub-Servicers may enter into and make amendments
to the Sub-Servicing Agreements or enter into different forms of
Sub-Servicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such
amendment or different form shall be made or entered into which
could be reasonably expected to be materially adverse to the
interests of the Certificateholders without the consent of the
Holders of Certificates entitled to at least 66% of the Voting
Rights; provided, further, that the consent of the Holders of
Certificates entitled to at least 66% of the Voting Rights shall
not be required (i) to cure any ambiguity or defect in a
Sub-Servicing Agreement, (ii) to correct, modify or supplement any
provisions of a Sub-Servicing Agreement, or (iii) to make any other
provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be
inconsistent with the provisions of this Agreement. Any variation
without the consent of the Holders of Certificates entitled to at
least 66% of the Voting Rights from the provisions set forth in
Section 3.08 relating to insurance or priority requirements of
Sub-Servicing Accounts, or credits and charges to the Sub-Servicing
Accounts or the timing and amount of remittances by the
Sub-Servicers to the Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The
Servicer shall deliver to the Trustee, upon its request, copies of
all Sub-Servicing Agreements, and any amendments or modifications
thereof, promptly upon the Servicer’s execution and delivery
of such instruments.
(b) As
part of its servicing activities hereunder, the Servicer, for the
benefit of the Trustee and the Certificateholders, shall enforce
the obligations of each Sub-Servicer under the related
Sub-Servicing Agreement, including, without limitation, any
obligation of a Sub-Servicer to make advances in respect of
delinquent payments as required by a Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution
of claims, termination of Sub-Servicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Servicer, in its good
faith
business judgment, would require
were it the owner of the related Mortgage Loans. The Servicer shall
pay the costs of enforcing the obligations of a Sub-Servicer 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 Loans, or (ii) from a specific recovery of costs,
expenses or attorneys’ fees against the party against whom
such enforcement is directed.
|
SECTION 3.03
|
Successor Sub-Servicers.
|
The Servicer shall be entitled to
terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall
be assumed simultaneously by the Servicer without any act or deed
on the part of such Sub-Servicer or the Servicer, and the Servicer
either shall service directly the related Mortgage Loans or shall
enter into a Sub-Servicing Agreement with a successor Sub-Servicer
which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall
include the provision that such agreement may be immediately
terminated by the Trustee (if the Trustee is acting as Servicer)
without fee, in accordance with the terms of this Agreement, in the
event that the Servicer (or the Trustee, if it is then acting as
Servicer) shall, for any reason, no longer be the Servicer
(including termination due to a Servicer Event of
Default).
|
SECTION 3.04
|
Liability of the
Servicer.
|
Notwithstanding any Sub-Servicing
Agreement or the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Sub-Servicer
or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and primarily liable to the
Trustee and the 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 Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as
if the Servicer alone were servicing and administering the Mortgage
Loans. The Servicer shall be entitled to enter into any agreement
with a Sub-Servicer for indemnification of the Servicer by such
Sub-Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
|
SECTION 3.05
|
No Contractual Relationship Between
Sub-Servicers, the Trustee or the Certificateholders.
|
Any Sub-Servicing Agreement that may
be entered into and any transactions or services relating to the
Mortgage Loans involving a Sub-Servicer in its capacity as such
shall be deemed to be between the Sub-Servicer and the Servicer
alone, and the Trustee and the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06. The Servicer shall be solely
liable for all fees owed by it to any Sub-Servicer, irrespective of
whether the Servicer’s compensation pursuant to this
Agreement is sufficient to pay such fees.
|
SECTION 3.06
|
Assumption or Termination of Sub-Servicing
Agreements by the Trustee.
|
In the event the Servicer shall for
any reason no longer be the Servicer (including by reason of the
occurrence of a Servicer Event of Default), the Trustee, its
designee or other successor Servicer shall thereupon assume all of
the rights and obligations of the Servicer under each Sub-Servicing
Agreement that the Servicer may have entered into, unless the
Trustee, such designee or other successor Servicer elects to
terminate any Sub-Servicing Agreement in accordance with its terms
as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor Servicer for the Trustee appointed
pursuant to Section 7.02 shall be deemed, subject to Section 3.03,
to have assumed all of the Servicer’s interest therein and to
have replaced the Servicer as a party to each Sub-Servicing
Agreement to the same extent as if each Sub-Servicing Agreement had
been assigned to the assuming party, except that (i) the Servicer
shall not thereby be relieved of any liability or obligations under
any Sub-Servicing Agreement that arose before it ceased to be the
Servicer and (ii) none of the Trustee, its designee or any
successor Servicer shall be deemed to have assumed any liability or
obligation of the Servicer that arose before it ceased to be the
Servicer.
The Servicer at its expense shall,
upon request of the Trustee, deliver to the assuming party all
documents and records relating to each Sub-Servicing Agreement and
the Mortgage Loans then being serviced and an accounting of amounts
collected and held by or on behalf of it, and otherwise use its
best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
The Servicing Fee payable to the
Trustee as successor Servicer or other successor Servicer shall be
payable from payments received on the Mortgage Loans in the amount
and in the manner set forth in this Agreement.
|
SECTION 3.07
|
Collection of Certain Mortgage Loan
Payments.
|
The 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 applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage
loans comparable to the Mortgage Loans and held for its own
account. Consistent with the foregoing, the Servicer may in its
discretion (i) waive any late payment charge or, if applicable, any
penalty interest, or (ii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than
180 days; provided, however, that any extension pursuant to clause
(ii) above shall not affect the amortization schedule of any
Mortgage Loan for purposes of any computation hereunder, except as
provided below. In the event of any such arrangement pursuant to
clause (ii) above, the Servicer shall make timely advances on such
Mortgage Loan during such extension pursuant to Section 4.03 and in
accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangement.
Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default or, in the judgment of the Servicer, such default is
reasonably foreseeable, the Servicer, consistent with the standards
set forth in Section 3.01, may also waive, modify or vary any term
of such Mortgage Loan (including modifications that would change
the Mortgage Rate, forgive the payment of principal or interest or
extend the final maturity date of such Mortgage Loan), accept
payment from the related
Mortgagor of an amount less than the
Stated Principal Balance in final satisfaction of such Mortgage
Loan (such payment, a “Short Pay-off”), or consent to
the postponement of strict compliance with any such term or
otherwise grant indulgence to any Mortgagor.
|
SECTION 3.08
|
Sub-Servicing Accounts.
|
In those cases where a Sub-Servicer
is servicing a Mortgage Loan pursuant to a Sub-Servicing Agreement,
the Sub-Servicer will be required to establish and maintain one or
more accounts (collectively, the “Sub-Servicing
Account”). The Sub-Servicing Account shall be an Eligible
Account and shall comply with all requirements of this Agreement
relating to the Collection Account. The Sub-Servicer shall deposit
in the clearing account in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage
loan servicing activities on a daily basis, and in no event more
than one Business Day after the Sub-Servicer’s receipt
thereof, all proceeds of Mortgage Loans received by the
Sub-Servicer less its servicing compensation to the extent
permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The
Sub-Servicer shall thereafter deposit such proceeds in the
Collection Account or remit such proceeds to the Servicer for
deposit in the Collection Account not later than two Business Days
after the deposit of such amounts in the Sub-Servicing Account. For
purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer
receives such payments.
|
SECTION 3.09
|
Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
|
The Servicer shall establish and
maintain, or cause to be established and maintained, one or more
accounts (the “Servicing Accounts”), into which all
collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the
Mortgagors (“Escrow Payments”) shall be deposited and
retained. Servicing Accounts shall be Eligible Accounts. The
Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the
Servicer’s receipt thereof, all Escrow Payments collected on
account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Servicing Accounts, in no event more than
two Business Days after the receipt of such Escrow Payments, all
Escrow Payments collected on account of the Mortgage Loans for the
purpose of effecting the payment of any such items as required
under the terms of this Agreement. Withdrawals of amounts from a
Servicing Account may be made only to (i) effect payment of taxes,
assessments, hazard insurance premiums, and comparable items in a
manner and at a time that assures that the lien priority of the
Mortgage is not jeopardized (or, with respect to the payment of
taxes, in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax lien); (ii) reimburse the Servicer (or a Sub-Servicer to
the extent provided in the related Sub-Servicing Agreement) out of
related collections for any advances made pursuant to Section 3.01
(with respect to taxes and assessments) and Section 3.14 (with
respect to hazard insurance); (iii) refund to Mortgagors any sums
as may be determined to be overages; (iv) pay interest, if required
and as described below, to Mortgagors on balances in the Servicing
Account; or (v) clear and terminate the Servicing Account at the
termination of the Servicer’s obligations and
responsibilities in respect of the
Mortgage Loans under this Agreement
in accordance with Article IX. As part of its servicing duties, the
Servicer or Sub-Servicers shall pay to the Mortgagors interest on
funds in the Servicing Accounts, to the extent required by law and,
to the extent that interest earned on funds in the Servicing
Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor.
|
SECTION 3.10
|
Collection Account and Distribution
Account.
|
(a) On
behalf of the Trust Fund, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more
accounts (such account or accounts, the “Collection
Account”), held in trust for the benefit of the Trustee and
the Certificateholders. On behalf of the Trust Fund, the Servicer
shall deposit or cause to be deposited in the clearing account in
which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on
a daily basis, and in no event more than one Business Day after the
Servicer’s receipt thereof, and shall thereafter deposit in
the Collection Account, in no event more than two Business Days
after the Servicer’s receipt thereof, as and when received or
as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date
(other than in respect of principal or interest on the related
Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to
the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all
payments on account of principal, including Principal Prepayments,
on the Mortgage Loans;
(ii) all
payments on account of interest (net of the related Servicing Fee)
on each Mortgage Loan;
(iii) all
Insurance Proceeds, Liquidation Proceeds (other than proceeds
collected in respect of any particular REO Property and amounts
paid in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01) and Subsequent
Recoveries;
(iv) any
amounts required to be deposited pursuant to Section 3.12 in
connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any
amounts required to be deposited by the Servicer pursuant to the
second paragraph of Section 3.14(a) in respect of any blanket
policy deductibles;
(vi) all
proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 2.03, Section 3.16 or Section
9.01;
(vii) all
amounts required to be deposited in connection with shortfalls in
principal amount of Qualified Substitute Mortgage Loans pursuant to
Section 2.03; and
(viii) all
Prepayment Charges collected by the Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans.
The foregoing requirements for
deposit in the Collection Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of late payment charges,
modification or assumption fees, or insufficient funds charges need
not be deposited by the Servicer in the Collection Account and may
be retained by the Servicer as additional compensation. In the
event the Servicer shall deposit in the Collection Account any
amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b) On
behalf of the Trust Fund, the Trustee shall establish and maintain
one or more accounts (such account or accounts, the
“Distribution Account”), held in trust for the benefit
of the Trustee, the Trust Fund and the Certificateholders. On
behalf of the Trust Fund, the Servicer shall deliver to the Trustee
in immediately available funds for deposit in the Distribution
Account by 3:00 p.m. New York time (i) on the Servicer Remittance
Date, that portion of the Available Distribution Amount (calculated
without regard to the references in clause (2) of the definition
thereof to amounts that may be withdrawn from the Distribution
Account) for the related Distribution Date then on deposit in the
Collection Account and the amount of all Prepayment Charges
collected by the Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account and the amount of any funds reimbursable to an
Advancing Person pursuant to Section 3.26 and (ii) on each Business
Day as of the commencement of which the balance on deposit in the
Collection Account exceeds $75,000 following any withdrawals
pursuant to the next succeeding sentence, the amount of such
excess, but only if the Collection Account constitutes an Eligible
Account solely pursuant to clause (ii) of the definition of
“Eligible Account.” If the balance on deposit in the
Collection Account exceeds $75,000 as of the commencement of
business on any Business Day and the Collection Account constitutes
an Eligible Account solely pursuant to clause (ii) of the
definition of “Eligible Account,” the Servicer shall,
by 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to
the Depositor, the Servicer, the Trustee, the Responsible Party,
the Seller or any Sub-Servicer pursuant to Section 3.11 and shall
pay such amounts to the Persons entitled thereto.
(c) Funds
in the Collection Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions
set forth in Section 3.12. The Servicer shall give notice to the
Trustee of the location of the Collection Account maintained by it
when established and prior to any change thereof. The Trustee shall
give notice to the Servicer and the Depositor of the location of
the Distribution Account when established and prior to any change
thereof.
(d) Funds
held in the Collection Account at any time may be delivered by the
Servicer to the Trustee for deposit in an account (which may be the
Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and
for all purposes of this Agreement shall be deemed to be a part of
the Collection Account (and in such event, the Servicer shall
provide the Trustee with written instructions regarding the
investment of such funds); provided, however, that the Trustee
shall have the sole authority to withdraw any funds held pursuant
to this subsection (d). In the event the Servicer shall deliver to
the Trustee for deposit in the Distribution Account any amount not
required to be deposited therein, it may at any time request in
writing that the Trustee withdraw such amount from the Distribution
Account and remit to it any such amount, any provision herein to
the contrary notwithstanding. In no event shall the Trustee incur
liability as a result of withdrawals from the
Distribution Account at the
direction of the Servicer in accordance with the immediately
preceding sentence. In addition, the Servicer shall deliver to the
Trustee from time to time for deposit, and the Trustee shall so
deposit, in the Distribution Account:
|
(i)
|
any Advances, as required pursuant
to Section 4.03;
|
(ii) any
amounts required to be deposited pursuant to Section 3.23(d) or (f)
in connection with any REO Property;
(iii) any
amounts to be paid in connection with a purchase of Mortgage Loans
and REO Properties pursuant to Section 9.01; and
(iv) any
amounts required to be deposited pursuant to Section 3.24 in
connection with any Prepayment Interest Shortfall.
(e) The
Servicer shall deposit in the Collection Account any amounts
required to be deposited pursuant to Section 3.12(b) in connection
with losses realized on Permitted Investments with respect to funds
held in the Collection Account (and the Distribution Account to the
extent that funds therein are deemed to be part of the Collection
Account).
|
SECTION 3.11
|
Withdrawals from the Collection Account and
Distribution Account.
|
(a) The
Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as
described in Section 4.03:
(i) to
remit to the Trustee for deposit in the Distribution Account the
amounts required to be so remitted pursuant to Section 3.10(b) or
permitted to be so remitted pursuant to the first sentence of
Section 3.10(d);
(ii) subject
to Section 3.16(d), to reimburse the Servicer for Advances, but
only to the extent of amounts received which represent Late
Collections (net of the related Servicing Fees) of Monthly Payments
on Mortgage Loans with respect to which such Advances were made in
accordance with the provisions of Section 4.03;
(iii) subject
to Section 3.16(d), to pay the Servicer or any Sub-Servicer, as
applicable, (a) any unpaid Servicing Fees, (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to
the extent of any Late Collections, Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries received with respect to such
Mortgage Loan and (c) any Nonrecoverable Servicing Advances with
respect to the final liquidation of a Mortgage Loan, but only to
the extent that Late Collections, Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries received with respect to such
Mortgage Loan are insufficient to reimburse the Servicer or any
Sub-Servicer for Servicing Advances;
(iv) to
pay to the Servicer as servicing compensation (in addition to the
Servicing Fee) on the Servicer Remittance Date any interest or
investment income earned on funds deposited in the Collection
Account;
(v) to
pay to the Servicer, the Depositor, the Responsible Party or the
Seller, as the case may be, with respect to each Mortgage Loan that
has previously been purchased or replaced pursuant to Section 2.03
or Section 3.16(c) all amounts received thereon subsequent to the
date of purchase or substitution, as the case may be;
(vi) to
reimburse the Servicer for any Advance previously made which the
Servicer has determined to be a Nonrecoverable Advance in
accordance with the provisions of Section 4.03;
(vii) to
reimburse the Servicer or the Depositor for expenses incurred by or
reimbursable to the Servicer or the Depositor, as the case may be,
pursuant to Section 3.02(b) and Section 6.03;
(viii) to
reimburse the Servicer or Trustee for expenses reasonably incurred
in connection with any breach or defect giving rise to the purchase
obligation under Section 2.03 of this Agreement, including any
expenses arising out of the enforcement of the purchase
obligation;
(ix) to
pay, or to reimburse the Servicer for Servicing Advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant
to Section 3.16(b); and
|
(x)
|
to clear and terminate the
Collection Account pursuant to Section 9.01.
|
The Servicer shall keep and maintain
separate accounting, on a Mortgage Loan by Mortgage Loan basis, for
the purpose of justifying any withdrawal from the Collection
Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above. The
Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Servicer Remittance Date, upon making
any withdrawals from the Collection Account pursuant to subclauses
(vi) and (vii) above; provided that an Officers’ Certificate
in the form described under Section 4.03(d) shall suffice for such
written notification to the Trustee in respect of clause (vi)
hereof.
(b) The
Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without
priority:
(i) to
make distributions to Certificateholders in accordance with Section
4.01;
(ii) to
pay to itself amounts to which it is entitled pursuant to Section
8.05 or for Extraordinary Trust Fund Expenses;
|
(iii)
|
to reimburse itself pursuant to
Section 7.02;
|
|
|
(iv)
|
to pay any amounts in respect of
taxes pursuant to Section 10.01(g)(iii);
|
(v) to
pay to an Advancing Person reimbursements for Advances and/or
Servicing Advances pursuant to Section 3.26; and
|
(vi)
|
to clear and terminate the
Distribution Account pursuant to Section 9.01.
|
|
SECTION 3.12
|
Investment of Funds in the
Collection Account and the Distribution Account.
|
(a) The
Servicer may direct any depository institution maintaining the
Collection Account (for purposes of this Section 3.12, an
“Investment Account”) to invest the funds in such
Investment Account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on
demand, (i) no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the
Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Trustee is the obligor thereon.
Amounts in the Distribution Account shall be held uninvested. All
such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account
shall be made in the name of the Trustee for the benefit of the
Certificateholders. The Trustee shall be entitled to sole
possession (except with respect to investment direction of funds
held in the Collection Account and any income and gain realized
thereon) over each such investment, and any certificate or other
instrument evidencing any such investment shall be delivered
directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the
Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted
Investment payable on demand, the party with investment discretion
over such Investment Account shall:
(x) consistent
with any notice required to be given thereunder, demand that
payment thereon be made on the last day such Permitted Investment
may otherwise mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the amount required
to be withdrawn on such date; and
(y) demand
payment of all amounts due thereunder promptly upon determination
by a Responsible Officer of the Trustee that such Permitted
Investment would not constitute a Permitted Investment in respect
of funds thereafter on deposit in the Investment
Account.
(b) All
income and gain realized from the investment of funds deposited in
the Collection Account and any REO Account held by or on behalf of
the Servicer, shall be for the benefit of the Servicer and shall be
subject to its withdrawal in accordance with Section 3.11 or
Section 3.23, as applicable. The Servicer shall deposit in the
Collection Account or any REO Account, as applicable, the amount of
any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon
realization of such loss.
(c) Except
as otherwise expressly provided in this Agreement, if any default
occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance
required under any Permitted Investment (of which a Responsible
Officer of the Trustee obtains actual knowledge), the Trustee may
and, subject to Section 8.01 and Section 8.02(v), upon the request
of the Holders of Certificates representing more than 50% of the
Voting Rights allocated to any Class of Certificates, shall take
such action as may be
appropriate to enforce such payment
or performance, including the institution and prosecution of
appropriate proceedings.
(d) The
Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Trustee’s
economic self-interest for (i) serving as investment adviser,
administrator, shareholder servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments,
(ii) using Affiliates to effect transactions in certain Permitted
Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount
that is reimbursable or payable to the Trustee pursuant to Section
3.11 or 3.12 or otherwise payable in respect of Extraordinary Trust
Fund Expenses.
|
SECTION 3.14
|
Maintenance of Hazard Insurance and
Errors and Omissions and Fidelity Coverage.
|
(a) The
Servicer shall cause to be maintained for each Mortgage Loan fire
insurance with extended coverage on the related Mortgaged Property
in an amount which is at least equal to the lesser of the current
principal balance of such Mortgage Loan and the amount necessary to
fully compensate for any damage or loss to the improvements that
are a part of such property on a replacement cost basis, in each
case in an amount not less than such amount as is necessary to
avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to
be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of
such property and (ii) the outstanding principal balance of the
related Mortgage Loan at the time it became an REO Property, plus
accrued interest at the Mortgage Rate and related Servicing
Advances. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected
by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the property subject to the
related Mortgage or amounts to be released to the Mortgagor in
accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be
deposited in the Collection Account, subject to withdrawal pursuant
to Section 3.11, if received in respect of a Mortgage Loan, or in
the REO Account, subject to withdrawal pursuant to Section 3.23, if
received in respect of an REO Property. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to Certificateholders, be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit. It
is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the
Mortgaged Property or REO Property is at any time in an area
identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the
unpaid principal balance of the related Mortgage Loan 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 Servicer shall
obtain and maintain a blanket policy with an insurer having a
General Policy Rating of A:X or better in Best’s Key Rating
Guide (or such other rating that is comparable to such rating)
insuring against hazard losses on all of the Mortga
