EXHIBIT 4
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BANC OF AMERICA MORTGAGE SECURITIES, INC.,
as
Depositor,
BANK OF AMERICA, N.A.,
as Servicer,
and
WELLS FARGO BANK, N.A.,
as Trustee
POOLING AND SERVICING AGREEMENT
Dated December 29, 2004
Banc of America Alternative Loan Trust 2004-12
Mortgage Pass-Through Certificates
Series 2004-12
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<PAGE>
TABLE OF CONTENTS
PRELIMINARY
STATEMENT.....................................................
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms...............................................
Section 1.02 Interest
Calculations.......................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01
Conveyance of Mortgage Loans................................
Section 2.02
Acceptance by the Trustee of the Mortgage Loans.............
Section 2.03
Representations, Warranties and Covenants of the Servicer...
Section 2.04
Representations and Warranties of the Depositor as to the
Mortgage Loans.............................................
Section 2.05
Designation of Interests in the REMICs......................
Section 2.06
Designation of Start-up Day.................................
Section 2.07 REMIC
Certificate Maturity Date.............................
Section 2.08 Execution
and Delivery of Certificates......................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer
to Service Mortgage Loans..........................
Section 3.02
Subservicing; Enforcement of the Obligations of Servicer....
Section 3.03 Fidelity
Bond; Errors and Omissions Insurance...............
Section 3.04 Access to
Certain Documentation.............................
Section 3.05
Maintenance of Primary Insurance Policy; Claims;
Collections of BPP Mortgage Loan Payments..................
Section 3.06 Rights of
the Depositor and the Trustee in Respect of the
Servicer...................................................
Section 3.07 Trustee
to Act as Servicer..................................
Section 3.08
Collection of Mortgage Loan Payments; Servicer Custodial
Account; and Certificate Account...........................
Section 3.09
Collection of Taxes, Assessments and Similar Items;
Escrow Accounts............................................
Section 3.10 Access to
Certain Documentation and Information Regarding
the Mortgage Loans.........................................
Section 3.11 Permitted
Withdrawals from the Servicer Custodial Account
and Certificate Account....................................
Section 3.12
Maintenance of Hazard Insurance.............................
Section 3.13
Enforcement of Due-on-Sale Clauses; Assumption Agreements...
Section 3.14
Realization upon Defaulted Mortgage Loans; REO Property.....
Section 3.15 Trustee
to Cooperate; Release of Mortgage Files.............
Section 3.16
Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee........................
Section 3.17 Servicing
Compensation......................................
Section 3.18 Annual
Statement as to Compliance...........................
Section 3.19 Annual
Independent Public Accountants' Servicing
Statement; Financial Statements............................
Section 3.20
Advances....................................................
Section 3.21
Modifications, Waivers, Amendments and Consents.............
Section 3.22 Reports
to the Securities and Exchange Commission...........
ARTICLE IV
SERVICER'S CERTIFICATE
Section 4.01
Servicer's Certificate......................................
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01
Distributions...............................................
Section 5.02
Priorities of Distributions.................................
Section 5.03
Allocation of Losses........................................
Section 5.04
Statements to Certificateholders............................
Section 5.05 Tax
Returns and Reports to Certificateholders...............
Section 5.06 Tax
Matters Person..........................................
Section 5.07 Rights of
the Tax Matters Person in Respect of the Trustee..
Section 5.08 REMIC
Related Covenants.....................................
ARTICLE VI
THE CERTIFICATES
Section 6.01 The
Certificates............................................
Section 6.02
Registration of Transfer and Exchange of Certificates.......
Section 6.03
Mutilated, Destroyed, Lost or Stolen Certificates...........
Section 6.04 Persons
Deemed Owners.......................................
ARTICLE VII
THE DEPOSITOR AND THE SERVICER
Section 7.01
Respective Liabilities of the Depositor and the Servicer....
Section 7.02 Merger or
Consolidation of the Depositor or the Servicer....
Section 7.03
Limitation on Liability of the Depositor, the Servicer
and Others.................................................
Section 7.04 Depositor
and Servicer Not to Resign........................
ARTICLE VIII
DEFAULT
Section 8.01 Events of
Default...........................................
Section 8.02 Remedies
of Trustee.........................................
Section 8.03
Directions by Certificateholders and Duties of Trustee
During Event of Default....................................
Section 8.04 Action
upon Certain Failures of the Servicer and upon
Event of Default...........................................
Section 8.05 Trustee
to Act; Appointment of Successor....................
Section 8.06
Notification to Certificateholders..........................
ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of
Trustee...........................................
Section 9.02 Certain
Matters Affecting the Trustee.......................
Section 9.03 Trustee
Not Liable for Certificates or Mortgage Loans.......
Section 9.04 Trustee
May Own Certificates................................
Section 9.05
Eligibility Requirements for Trustee........................
Section 9.06
Resignation and Removal of Trustee..........................
Section 9.07 Successor
Trustee...........................................
Section 9.08 Merger or
Consolidation of Trustee..........................
Section 9.09
Appointment of Co-Trustee or Separate Trustee...............
Section 9.10
Authenticating Agents.......................................
Section 9.11 Trustee's
Fees and Expenses.................................
Section 9.12
Appointment of Custodian....................................
Section 9.13 Paying
Agents...............................................
Section 9.14
Limitation of Liability.....................................
Section 9.15 Trustee
May Enforce Claims Without Possession of
Certificates...............................................
Section 9.16 Suits for
Enforcement.......................................
Section 9.17 Waiver of
Bond Requirement..................................
Section 9.18 Waiver of
Inventory, Accounting and Appraisal Requirement...
ARTICLE X
TERMINATION
Section 10.01 Termination upon Purchase by the Depositor or
Liquidation
of All Mortgage Loans......................................
Section 10.02 Additional Termination
Requirements.........................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment...................................................
Section 11.02 Recordation of
Agreement....................................
Section 11.03 Limitation on Rights of
Certificateholders..................
Section 11.04 Governing
Law...............................................
Section 11.05
Notices.....................................................
Section 11.06 Severability of
Provisions..................................
Section 11.07 Certificates Nonassessable and Fully
Paid...................
Section 11.08 Access to List of
Certificateholders........................
Section 11.09
Recharacterization..........................................
EXHIBITS
Exhibit A-1-CB-1 -
Form of
Face of Class 1-CB-1 Certificate
Exhibit A-1-CB-R -
Form of
Face of Class 1-CB-R Certificate
Exhibit A-1-CB-LR - Form of Face of Class
1-CB-LR Certificate
Exhibit A-2-CB-1 -
Form of
Face of Class 2-CB-1 Certificate
Exhibit A-CB-IO
- Form of
Face of Class CB-IO Certificate
Exhibit A-3-A-1
- Form of
Face of Class 3-A-1 Certificate
Exhibit A-3-IO - Form of Face of Class
3-IO Certificate
Exhibit A-30-PO
- Form of
Face of Class 30-PO Certificate
Exhibit A-4-A-1
- Form of
Face of Class 4-A-1 Certificate
Exhibit A-15-IO
- Form of
Face of Class 15-IO Certificate
Exhibit A-15-PO
- Form of
Face of Class 15-PO Certificate
Exhibit B-1 -
Form of
Face of Class B-1 Certificate
Exhibit B-2 -
Form of
Face of Class B-2 Certificate
Exhibit B-3 -
Form of
Face of Class B-3 Certificate
Exhibit B-4 -
Form of
Face of Class B-4 Certificate
Exhibit B-5 -
Form of
Face of Class B-5 Certificate
Exhibit B-6 -
Form of
Face of Class B-6 Certificate
Exhibit C
- Form of
Reverse of all Certificates................
Exhibit D-1 -
Mortgage
Loan Schedule (Loan Group 1)..............
Exhibit D-2 -
Mortgage
Loan Schedule (Loan Group 2)..............
Exhibit D-3 -
Mortgage
Loan Schedule (Loan Group 3)..............
Exhibit D-4 -
Mortgage
Loan Schedule (Loan Group 4)..............
Exhibit E
- Request
for Release of Documents...................
Exhibit F
- Form of
Certification of Establishment of Account..
Exhibit G-1 -
Form of
Transferor's Certificate...................
Exhibit G-2A -
Form 1 of
Transferee's Certificate.................
Exhibit G-2B -
Form 2 of
Transferee's Certificate.................
Exhibit H
- Form of
Transferee Representation Letter
for ERISA Restricted Certificates..................
Exhibit I
- Form of
Affidavit Regarding Transfer of Residual
Certificates.......................................
Exhibit J
- Contents
of Servicing File.........................
Exhibit K
- Form of
Special Servicing Agreement................
Exhibit L
- List of
Recordation States.........................
Exhibit M
- Form of
Initial Certification......................
Exhibit N
- Form of
Final Certification........................
Exhibit O
- Form of
Certification..............................
Exhibit P
- Form of
Trustee's Certification....................
<PAGE>
POOLING
AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated December 29, 2004,
is
hereby executed by and among BANC OF AMERICA MORTGAGE SECURITIES,
INC., as
depositor (together with its permitted successors and assigns, the
"Depositor"),
BANK OF AMERICA, N.A., as servicer (together with its permitted
successors and
assigns, the "Servicer"), and WELLS FARGO BANK, N.A., as trustee
(together with
its permitted successors and assigns, the "Trustee").
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
PRELIMINARY STATEMENT
In exchange for the Certificates, the Depositor hereby conveys
the
Trust Estate to the Trustee to create the Trust. The Trust Estate
for federal
income tax purposes will be treated as two separate real estate
mortgage
investment conduits (the "Upper-Tier REMIC" and the "Lower-Tier
REMIC,"
respectively, and each, a "REMIC"). The Senior Certificates (other
than the
Class CB-IO, Class 30-PO, Class 1-CB-R and Class 1-CB-LR
Certificates) are
referred to collectively as the "Regular Certificates" and shall
constitute
"regular interests" in the Upper-Tier REMIC. The Class 1-CB-IO
Component, Class
1-30-PO Component, Class 2-CB-IO Component, Class 2-30-PO Component
and Class
3-30-PO Component (collectively, the "Components") shall also
constitute
"regular interests" in the Upper-Tier REMIC. The Uncertificated
Lower-Tier
Interests shall constitute the "regular interests" in the
Lower-Tier REMIC. The
Class 1-CB-R Certificate shall be the "residual interest" in the
Upper-Tier
REMIC and the Class 1-CB-LR Certificate shall be the "residual
interest" in the
Lower-Tier REMIC. The Certificates will represent the entire
beneficial
ownership interest in the Trust. The "latest possible maturity
date" for federal
income tax purposes of all interests created hereby will be the
REMIC
Certificate Maturity Date.
The following table sets forth characteristics of the
Certificates
and the Components, together with the minimum denominations and
integral
multiples in excess thereof in which the Classes of Certificates
shall be
issuable:
<PAGE>
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Integral
Initial Class
Multiples in
Certificate Balance Pass-Through Minimum
Excess of
Classes
or Notional Amount Rate
Denomination Minimum
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Class 1-CB-1
$98,681,000.00
6.000%
$1,000
$1
Class 1-CB-R
$50.00
6.000%
$50
N/A
Class 1-CB-LR
$50.00
6.000%
$50
N/A
Class 2-CB-1
$81,841,000.00
6.000%
$1,000
$1
Class CB-IO
$1,678,304.00
(1)
$1,000,000
$1
Class 3-A-1
$97,817,000.00
5.750%
$1,000
$1
Class 3-IO
$4,414,072.00
5.750% $1,000,000
$1
Class 30-PO
$5,241,085.00
(2)
$25,000
$1
Class 4-A-1
42,626,000.00
5.500%
$1,000
$1
Class 15-IO
$423,473.00
5.500%
$423,473
N/A
Class 15-PO
1,367,082.00
(3)
$25,000
$1
Class B-1
$7,728,000.00
(4)
$25,000
$1
Class B-2
$2,575,000.00
(4)
$25,000
$1
Class B-3
$1,717,000.00
(4)
$25,000
$1
Class B-4
$1,373,000.00
(4)
$25,000
$1
Class B-5
$1,030,000.00
(4)
$25,000
$1
Class B-6
$1,374,278.00
(4)
$25,000
$1
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Integral
Initial Component
Multiples In
Balance or Component
Pass-Through
Minimum
Excess Of
Components
Notional Amount
Rate
Denomination Minimum
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Class 1-CB-IO
$1,018,513.50
6.000%
N/A
N/A
Class 2-CB-IO
$659,790.50
6.000%
N/A
N/A
Class 1-30-PO
$2,354,368.70
(5)
N/A
N/A
Class 2-30-PO
$2,449,391.60
(5)
N/A
N/A
Class 3-30-PO
$437,324.70
(5)
N/A
N/A
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------------
(1) The Class
CB-IO Certificates are Interest Only Certificates and will be
deemed for
purposes of distributions to consist of two Components
described
in the table; the Class 1-CB-IO Component and the Class 2-CB-IO
Component
(each, an "IO Component"). The IO Components are not severable.
(2) The Class
30-PO Certificates are Principal Only Certificates and will be
deemed for
purposes of distributions to consist of three Components as
described
in the table; the Class 1-30-PO Component, the Class 2-30-PO
Component
and the Class 3-30-PO Component (each, a "Class 30-PO
Component"
or a "PO
Component"). The PO Components are not severable.
(3) The Class
15-PO Certificates are Principal Only Certificates and will not
be
entitled to distributions in respect of interest.
(4) Interest
will accrue on the Class B Certificates for each Distribution
Date at a
per annum rate equal to the weighted average (based on the
Group
Subordinate Amount for each Loan Group) of (i) with respect to Loan
Group
1 and Loan
Group 2, 6.000%, (ii) with respect to Loan Group 3, 5.750% and
(iii) with
respect to Loan Group 4, 5.500%.
(5) The Class
1-30-PO, Class 2-30-PO and Class 3-30-PO Components are
Principal
Only Components and will not be entitled to distributions in
respect of
interest.
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement,
the
following words and phrases, unless the context otherwise requires,
shall have
the meanings specified in this Article:
30 Year Group: Any of Loan Group 1, Loan Group 2 or Loan Group
3.
1933 Act: The Securities Act of 1933, as amended.
Accrued Certificate Interest: For any Distribution Date and
each
interest-bearing Class (other than the Class CB-IO Certificates),
one month's
interest accrued during the related Interest Accrual Period at the
applicable
Pass-Through Rate on the applicable Class Certificate Balance or
Notional
Amount. For any Distribution Date and the Class CB-IO Certificates,
the sum of
the Accrued Component Interest for each IO Component.
Accrued Component Interest: For any Distribution Date and each
IO
Component, one month's interest accrued during the related Interest
Accrual
Period at the applicable Pass-Through Rate on the applicable
Notional Amount.
Adjusted Pool Amount: With respect to any Distribution Date and
Loan
Group, the Cut-off Date Pool Principal Balance of the Mortgage
Loans in such
Loan Group minus the sum of (i) all amounts in respect of principal
received in
respect of the Mortgage Loans in such Loan Group (including,
without limitation,
amounts received as Monthly Payments, Periodic Advances, Principal
Prepayments,
Liquidation Proceeds and Substitution Adjustment Amounts) and
distributed to
Holders of the Certificates on such Distribution Date and all prior
Distribution
Dates and (ii) the principal portion of all Realized Losses (other
than Debt
Service Reductions) incurred on the Mortgage Loans in such Loan
Group from the
Cut-off Date through the end of the month preceding such
Distribution Date.
Adjusted Pool Amount (Non-PO Portion): With respect to any
Distribution Date and Loan Group, the difference between the
Adjusted Pool
Amount and the Adjusted Pool Amount (PO Portion).
Adjusted Pool Amount (PO Portion): With respect to any
Distribution
Date and Loan Group, the sum of the amounts, calculated as follows,
with respect
to all Outstanding Mortgage Loans of such Loan Group: the product
of (i) the PO
Percentage for each such Mortgage Loan and (ii) the remainder of
(A) the Cut-off
Date Principal Balance of such Mortgage Loan minus (B) the sum of
(x) all
amounts in respect of principal received in respect of such
Mortgage Loan
(including, without limitation, amounts received as Monthly
Payments, Periodic
Advances, Principal Prepayments, Liquidation Proceeds and
Substitution
Adjustment Amounts) and distributed to Holders of the Certificates
of the
Related Group on such Distribution Date and all prior Distribution
Dates and (y)
the principal portion of any Realized Loss (other than a Debt
Service Reduction)
incurred on such Mortgage Loan from the Cut-off Date through the
end of the
month preceding such Distribution Date.
Advance: A Periodic Advance or a Servicing Advance.
Aggregate Subordinate Percentage: As to any Distribution Date,
the
aggregate Class Certificate Balance of the Class B Certificates
divided by the
aggregate Pool Stated Principal Balance (Non-PO Portion) for all of
the Loan
Groups.
Agreement: This Pooling and Servicing Agreement together with
all
amendments hereof and supplements hereto.
Amount Held for Future Distribution: As to any Distribution Date
and
Loan Group, the total of the amounts held in the Servicer Custodial
Account at
the close of business on the preceding Determination Date on
account of (i)
Principal Prepayments and Liquidation Proceeds received or made on
the Mortgage
Loans in such Loan Group in the month of such Distribution Date and
(ii)
payments which represent receipt of Monthly Payments on the
Mortgage Loans in
such Loan Group in respect of a Due Date or Due Dates subsequent to
the related
Due Date.
Ancillary Income: All prepayment premiums (if any), assumption
fees,
late payment charges and all other ancillary income and fees with
respect to the
Mortgage Loans.
Appraised Value: With respect to any Mortgaged Property, either
(i)
the lesser of (a) the appraised value determined in an appraisal
obtained by the
originator at origination of such Mortgage Loan and (b) the sales
price for such
property, except that, in the case of Mortgage Loans the proceeds
of which were
used to refinance an existing mortgage loan, the Appraised Value of
the related
Mortgaged Property is the appraised value thereof determined in an
appraisal
obtained at the time of refinancing, or (ii) the appraised value
determined in
an appraisal made at the request of a Mortgagor subsequent to
origination in
order to eliminate the Mortgagor's obligation to keep a Primary
Insurance Policy
in force.
Assignment of Mortgage: An individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form,
sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property
is located
to give record notice of the sale of the Mortgage.
Authenticating Agents: As defined in Section 9.10.
Bank of America: Bank of America, N.A., a national banking
association, or its successor in interest.
Book-Entry Certificate: Any Class of Certificates other than
the
Physical Certificates.
BPP Mortgage Loan: Any Mortgage Loan which includes a Borrowers
Protection Plan(R) addendum to the related Mortgage Note whereby
Bank of America
agrees to cancel (i) certain payments of principal and interest on
such Mortgage
Loan for up to twelve months upon the disability or involuntary
unemployment of
the Mortgagor or (ii) the outstanding principal balance of the
Mortgage Loan
upon the accidental death of the Mortgagor; provided that such
Borrowers
Protection Plan(R) has not been terminated in accordance with its
terms.
BPP Mortgage Loan Payment: With respect to any BPP Mortgage
Loan,
the Monthly Covered Amount or Total Covered Amount, if any, payable
by Bank of
America pursuant to Section 5 of the Mortgage Loan Purchase
Agreement.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii)
a day on which banking institutions in the State of North Carolina,
the State of
New York, the State of Minnesota, the state in which the servicing
offices of
the Servicer is located or the state in which the Corporate Trust
Office is
located are required or authorized by law or executive order to be
closed.
Calculated Principal Distribution: As defined in Section
5.03(d).
Certificate: Any of the Banc of America Alternative Loan Trust
2004-12 Mortgage Pass-Through Certificates, Series 2004-12 that are
issued
pursuant to this Agreement.
Certificate Account: The Eligible Account created and maintained
by
the Trustee pursuant to Section 3.08(c) in the name of the Trustee
for the
benefit of the Certificateholders and designated "Wells Fargo Bank,
N.A., in
trust for registered holders of Banc of America Alternative Loan
Trust 2004-12
Mortgage Pass-Through Certificates, Series 2004-12." The
Certificate Account
shall be deemed to consist of five sub-accounts; one for each Group
and a fifth
sub-account referred to herein as the Upper-Tier Certificate
Sub-Account. Funds
in the Certificate Account shall be held in trust for the Holders
of the
Certificates of such Group for the uses and purposes set forth in
this
Agreement.
Certificate Balance: With respect to any Certificate at any
date,
the maximum dollar amount of principal to which the Holder thereof
is then
entitled hereunder, such amount being equal to the product of the
Percentage
Interest of such Certificate and the Class Certificate Balance of
the Class of
Certificates of which such Certificate is a part.
Certificate Custodian: Initially, Wells Fargo Bank, N.A.;
thereafter any other Certificate Custodian acceptable to the
Depository and
selected by the Trustee.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of a Book-Entry Certificate.
With respect
to any Definitive Certificate, the Certificateholder of such
Certificate.
Certificate Register: The register maintained pursuant to
Section
6.02.
Certificate Registrar: The registrar appointed pursuant to
Section 6.02.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the
purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor, the Servicer or any affiliate thereof shall
be deemed not
to be outstanding and the Percentage Interest and Voting Rights
evidenced
thereby shall not be taken into account in determining whether the
requisite
amount of Percentage Interests or Voting Rights, as the case may
be, necessary
to effect any such consent has been obtained, unless such entity is
the
registered owner of the entire Class of Certificates; provided that
the Trustee
shall not be responsible for knowing that any Certificate is
registered in the
name of such an affiliate unless one of its Responsible Officers
has actual
knowledge.
Certification: As defined in Section 3.22(b).
Class: As to the Certificates, the Class 1-CB-1, Class 1-CB-R,
Class
1-CB-LR, Class 2-CB-1, Class CB-IO, Class 3-A-1, Class 3-IO, Class
30-PO, Class
4-A-1, Class 15-IO, Class 15-PO, Class B-1, Class B-2, Class B-3,
Class B-4,
Class B-5 and Class B-6, as the case may be.
Class 1-CB-IO Notional Amount: As to any Distribution Date and
the
Class 1-CB-IO Component, the product of (i) the aggregate Stated
Principal
Balance of the Group 1 Premium Mortgage Loans on the Due Date in
the month
preceding the month of such Distribution Date and (ii) a fraction,
(a) the
numerator of which is equal to the weighted average of the Net
Mortgage Interest
Rates of the Group 1 Premium Mortgage Loans (based on the Stated
Principal
Balances of the Group 1 Premium Mortgage Loans as of the Due Date
in the month
preceding the month of such Distribution Date) minus 6.000% and (b)
the
denominator of which is equal to 6.000%.
Class 2-CB-IO Notional Amount: As to any Distribution Date and
the
Class 2-CB-IO Component, the product of (i) the aggregate Stated
Principal
Balance of the Group 2 Premium Mortgage Loans on the Due Date in
the month
preceding the month of such Distribution Date and (ii) a fraction,
(a) the
numerator of which is equal to the weighted average of the Net
Mortgage Interest
Rates of the Group 2 Premium Mortgage Loans (based on the Stated
Principal
Balances of the Group 2 Premium Mortgage Loans as of the Due Date
in the month
preceding the month of such Distribution Date) minus 6.000% and (b)
the
denominator of which is equal to 6.000%.
Class 3-IO Notional Amount: As to any Distribution Date and the
Class 3-IO Certificates, the product of (i) the aggregate Stated
Principal
Balance of the Group 3 Premium Mortgage Loans on the Due Date in
the month
preceding the month of such Distribution Date and (ii) a fraction,
(a) the
numerator of which is equal to the weighted average of the Net
Mortgage Interest
Rates of the Group 3 Premium Mortgage Loans (based on the Stated
Principal
Balances of the Group 3 Premium Mortgage Loans as of the Due Date
in the month
preceding the month of such Distribution Date) minus 5.750% and (b)
the
denominator of which is equal to 5.750%.
Class 15-IO Notional Amount: As to any Distribution Date and
the
Class 15-IO Certificates, the product of (i) the aggregate Stated
Principal
Balance of the Group 4 Premium Mortgage Loans on the Due Date in
the month
preceding the month of such Distribution Date and (ii) a fraction,
(a) the
numerator of which is equal to the weighted average of the Net
Mortgage Interest
Rates of the Group 4 Premium Mortgage Loans (based on the Stated
Principal
Balances of the Group 4 Premium Mortgage Loans as of the Due Date
in the month
preceding the month of such Distribution Date) minus 5.500% and (b)
the
denominator of which is equal to 5.500%.
Class B Certificates: The Class B-1, Class B-2, Class B-3,
Class
B-4, Class B-5 and Class B-6 Certificates.
Class CB-IO Notional Amount: As to any Distribution Date, the sum
of
the Class 1-CB-IO Notional Amount and the Class 2-CB-IO Notional
Amount.
Class Certificate Balance: With respect to any Class (other than
the
Class CB-IO, Class 30-PO, Class 3-IO and Class 15-IO Certificates)
and any date
of determination, and subject to Section 5.03(f), the Initial Class
Certificate
Balance of such Class minus the sum of (i) all distributions of
principal made
with respect thereto (including in the case of any Class of
Subordinate
Certificates any principal otherwise payable to such Class of
Subordinate
Certificates used to pay any PO Deferred Amounts) and (ii) all
reductions in
Class Certificate Balance previously allocated thereto pursuant to
Section
5.03(b), plus all increases in Class Certificate Balance previously
allocated
thereto pursuant to Section 5.03(b). The Class CB-IO, Class 3-IO
and Class 15-IO
Certificates are Interest-Only Certificates and have no Class
Certificate
Balance. The Class Certificate Balance of the Class 30-PO
Certificates as of any
date of determination shall equal the sum of the Component Balances
of the Class
30-PO Components.
Class Interest Shortfall: For any Distribution Date and each
interest-bearing Class (other than the Class CB-IO Certificates),
the amount by
which Accrued Certificate Interest for such Class (as reduced
pursuant to
Section 5.02(c)) exceeds the amount of interest actually
distributed on such
Class on such Distribution Date pursuant to clause (i) of the
definition of
"Interest Distribution Amount."
Class Unpaid Interest Shortfall: As to any Distribution Date
and
each interest-bearing Class (other than the Class CB-IO
Certificates), the
amount by which the aggregate Class Interest Shortfalls for such
Class on prior
Distribution Dates exceeds the amount of interest actually
distributed on such
Class on such prior Distribution Dates pursuant to clause (ii) of
the definition
of "Interest Distribution Amount." As to any Distribution Date and
the Class
CB-IO Certificates, the sum of the Component Unpaid Interest
Shortfalls for the
IO Components.
Closing Date: December 29, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest: With respect to any Distribution Date,
the
least of (a) the aggregate Servicing Fee for such Distribution Date
(before
giving effect to any reduction pursuant to Section 3.17), (b) the
Prepayment
Interest Shortfall for such Distribution Date and (c) one-twelfth
of 0.25% of
the aggregate Stated Principal Balance of the Mortgage Loans.
Component: As defined in the Preliminary Statement.
Component Balance: With respect to any Class 30-PO Component and
any
date of determination, the Initial Component Balance of such
Component minus the
sum of (i) all distributions of principal made with respect thereto
and (ii) all
reductions in Component Balance previously allocated thereto
pursuant to Section
5.03(b). The IO Components are interest-only Components and have no
Component
Balance.
Component Interest Distribution Amount: For any Distribution
Date
and each IO Component, the sum of (i) the Accrued Component
Interest and (ii)
any Component Unpaid Interest Shortfall for such Component. The
Class 30-PO
Components are principal only Components and are not entitled to
distributions
of interest.
Component Interest Shortfall: For any Distribution Date and each
IO
Component, the amount by which Accrued Component Interest for such
Component
exceeds the amount of interest actually distributed on such
Component on such
Distribution Date pursuant to clause (i) of the definition of
"Component
Interest Distribution Amount."
Component Notional Amount: As of any Distribution Date, either
of
the Class 1-CB-IO Notional Amount or Class 2-CB-IO Notional
Amount.
Component Unpaid Interest Shortfall: As to any Distribution Date
and
each IO Component, the amount by which the aggregate Component
Interest
Shortfalls for such Component on prior Distribution Dates exceeds
the amount of
interest actually distributed on such Component on such prior
Distribution Dates
pursuant to clause (ii) of the definition of "Component Interest
Distribution
Amount."
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: The principal corporate trust office of
the
Trustee at which at any particular time its corporate trust
business with
respect to this Agreement is conducted, which office at the date of
the
execution of this instrument is located at 9062 Old Annapolis Road,
Columbia,
Maryland 21045-1951, Attention: Corporate Trust Services - BOALT
2004-12, and
for certificate transfer purposes is located at Sixth Street and
Marquette
Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services -
BOALT 2004-12, or at such other address as the Trustee may
designate from time
to time by notice to the Certificateholders, the Depositor and the
Servicer.
Custodian: Initially, the Trustee, and thereafter the Custodian,
if
any, hereafter appointed by the Trustee pursuant to Section 9.12.
The Custodian
may (but need not) be the Trustee or any Person directly or
indirectly
controlling or controlled by or under common control of either of
them. Neither
the Servicer nor the Depositor, nor any Person directly or
indirectly
controlling or controlled by or under common control with any such
Person may be
appointed Custodian.
Customary Servicing Procedures: With respect to the Servicer,
procedures (including collection procedures) that the Servicer
customarily
employs and exercises in servicing and administering mortgage loans
for its own
account and which are in accordance with accepted mortgage
servicing practices
of prudent lending institutions servicing mortgage loans of the
same type as the
Mortgage Loans in the jurisdictions in which the related Mortgaged
Properties
are located.
Cut-off Date: December 1, 2004.
Cut-off Date Pool Principal Balance: For each Loan Group, the
aggregate of the Cut-off Date Principal Balances of the Mortgage
Loans in such
Loan Group, which is $105,907,596.58 for Loan Group 1,
$88,355,367.85 for Loan
Group 2, $102,992,595.13 for Loan Group 3 and $46,114,986.29 for
Loan Group 4.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
Cut-off Date,
reduced by all installments of principal due on or prior thereto
whether or not
paid.
Debt
Service Reduction: As to any Mortgage Loan and any
Determination Date, the excess of (i) the Monthly Payment due on
the related Due
Date under the terms of such Mortgage Loan over (ii) the amount of
the monthly
payment of principal and/or interest required to be paid with
respect to such
Due Date by the Mortgagor as established by a court of competent
jurisdiction
(pursuant to an order which has become final and nonappealable) as
a result of a
proceeding initiated by or against the related Mortgagor under the
Bankruptcy
Code, as amended from time to time (11 U.S.C.); provided that no
such excess
shall be considered a Debt Service Reduction so long as (a) the
Servicer is
pursuing an appeal of the court order giving rise to any such
modification and
(b)(1) such Mortgage Loan is not in default with respect to payment
due
thereunder in accordance with the terms of such Mortgage Loan as in
effect on
the Cut-off Date or (2) Monthly Payments are being advanced by the
Servicer in
accordance with the terms of such Mortgage Loan as in effect on the
Cut-off
Date.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became
the subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required to
be
cured, repurchased or substituted for pursuant to Section 2.02 or
2.04.
Deficient Valuation: As to any Mortgage Loan and any
Determination
Date, the excess of (i) the then outstanding indebtedness under
such Mortgage
Loan over (ii) the secured valuation thereof established by a court
of competent
jurisdiction (pursuant to an order which has become final and
nonappealable) as
a result of a proceeding initiated by or against the related
Mortgagor under the
Bankruptcy Code, as amended from time to time (11 U.S.C.), pursuant
to which
such Mortgagor retained such Mortgaged Property; provided that no
such excess
shall be considered a Deficient Valuation so long as (a) the
Servicer is
pursuing an appeal of the court order giving rise to any such
modification and
(b)(1) such Mortgage Loan is not in default with respect to
payments due
thereunder in accordance with the terms of such Mortgage Loan as in
effect on
the Cut-off Date or (2) Monthly Payments are being advanced by the
Servicer in
accordance with the terms of such Mortgage Loan as in effect on the
Cut-off
Date.
Deficient Valuation Mortgage Loan: Any Mortgage Loan that became
the
subject of a Deficient Valuation.
Definitive Certificates: As defined in Section 6.02(c)(iii).
Depositor: Banc of America Mortgage Securities, Inc., a
Delaware
corporation, or its successor in interest, as depositor of the
Trust Estate.
Depository: The Depository Trust Company, the nominee of which
is
Cede & Co., as the registered Holder of the Book-Entry
Certificates or any
successor thereto appointed in accordance with this Agreement. The
Depository
shall at all times be a "clearing corporation" as defined in
Section 8-102(3)
of the Uniform Commercial Code of the State of New York.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Determination
Date: As to any Distribution Date, the 16th day of the
month of the related Distribution Date or, if such 16th day is not
a Business
Day, the Business Day immediately preceding such 16th day.
Discount Mortgage Loan: Any Group 1 Discount Mortgage Loan,
Group
2 Discount Mortgage Loan, Group 3 Discount Mortgage Loan or Group 4
Discount
Mortgage Loan.
Distribution Date: The 25th day of each month beginning in
January 2005 (or, if such day is not a Business Day, the next
Business Day).
Due Date: As to any Distribution Date and each Mortgage Loan,
the
first day in the calendar month of such Distribution Date.
Eligible Account: Any of (i) an account or accounts maintained
with
(a) Bank of America, or (b) a federal or state chartered depository
institution
or trust company the short-term unsecured debt obligations of which
(or, in the
case of a depository institution or trust company that is the
principal
subsidiary of a holding company, the debt obligations of such
holding company)
have the highest short-term ratings of each Rating Agency at the
time any
amounts are held on deposit therein, or (ii) an account or accounts
in a
depository institution or trust company in which such accounts are
insured by
the FDIC (to the limits established by the FDIC) and the uninsured
deposits in
which accounts are otherwise secured such that, as evidenced by an
Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such
account or a
perfected first priority security interest against any collateral
(which shall
be limited to Permitted Investments) securing such funds that is
superior to
claims of any other depositors or creditors of the depository
institution or
trust company in which such account is maintained, or (iii) a trust
account or
accounts maintained with the trust department of a federal or state
chartered
depository institution or trust company, acting in its fiduciary
capacity or
(iv) any other account acceptable to each Rating Agency. Eligible
Accounts may
bear interest and may include, if otherwise qualified under this
definition,
accounts maintained with the Trustee or Bank of America.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificates: Any Class B-1, Class B-2, Class
B-3,
Class B-4, Class B-5 or Class B-6 Certificate.
Escrow Account: As defined in Section 3.09.
Escrow Payments: The amounts constituting taxes, assessments,
Primary Insurance Policy premiums, fire and hazard insurance
premiums and other
payments as may be required to be escrowed by the Mortgagor with
the mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Events of Default: As defined in Section 8.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds of
such Mortgage
Loan received in the calendar month in which such Mortgage Loan
became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed
to the
Servicer as Nonrecoverable Advance(s) with respect to such Mortgage
Loan
pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal
balance of
such Liquidated Mortgage Loan as of the Due Date in the month in
which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued
interest at
the Mortgage Interest Rate from the Due Date as to which interest
was last paid
or for which a Periodic Advance was made (and not reimbursed) up to
the Due Date
applicable to the Distribution Date immediately following the
calendar month
during which such liquidation occurred.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor
thereto.
Final Distribution Date: The Distribution Date on which the
final
distribution in respect of the Certificates will be made pursuant
to Section
10.01.
Financial Market Service: Bloomberg Financial Service and any
other
financial information provider designated by the Depositor by
written notice to
the Trustee.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement
Act of 1989, as amended.
Fitch: Fitch Ratings, or any successor thereto.
FNMA: Fannie Mae, or any successor thereto.
Form 10-K: As defined in Section 3.22(a).
Fractional Interest: As defined in Section 5.02(d).
Group: Any of Group 1, Group 2, Group 3 or Group 4.
Group 1: The Group 1 Senior Certificates, the Class 1-CB-IO
Component and the Class 1-30-PO Component.
Group 1 Discount Mortgage Loan: A Group 1 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is less than
6.000% per
annum.
Group 1 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-1
hereto.
Group 1 Premium Mortgage Loan: A Group 1 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is equal to or
greater than
6.000% per annum.
Group 1 Senior Certificates: Class 1-CB-1, Class 1-CB-R and
Class
1-CB-LR Certificates.
Group 2: The Group 2 Senior Certificates, the Class 2-CB-IO
Component and the Class 2-30-PO Component.
Group 2 Discount Mortgage Loan: A Group 2 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is less than
6.000% per
annum.
Group 2 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-2
hereto.
Group 2 Premium Mortgage Loan: A Group 2 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is equal to or
greater than
6.000% per annum.
Group 2 Senior Certificates: Class 2-CB-1 Certificates.
Group 3: The Group 3 Senior Certificates and the Class 3-30-PO
Component.
Group 3 Discount Mortgage Loan: A Group 3 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is less than
5.750% per
annum.
Group 3 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-3
hereto.
Group 3 Premium Mortgage Loan: A Group 3 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is equal to or
greater than
5.750% per annum.
Group 3 Senior Certificates: Class 3-A-1 and Class 3-IO
Certificates.
Group 4: The Group 4 Senior Certificates.
Group 4 Discount Mortgage Loan: A Group 4 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is less than
5.500% per
annum.
Group 4 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-4
hereto.
Group 4 Premium Mortgage Loan: A Group 4 Mortgage Loan with a
Net
Mortgage Interest Rate as of the Cut-off Date that is equal to or
greater than
5.500% per annum.
Group 4 Senior Certificates: Class 4-A-1, Class 15-IO and Class
15-PO Certificates.
Group Subordinate Amount: With respect to any Distribution Date
and
any Loan Group, the excess of the Pool Stated Principal Balance
(Non-PO Portion)
for such Loan Group over the aggregate Class Certificate Balance of
the Senior
Certificates (but not the PO Component or Class 15-PO Certificates)
of the
Related Group immediately prior to such date.
Holder: A Certificateholder.
Independent: When used with respect to any specified Person
means
such a Person who (i) is in fact independent of the Depositor and
the Servicer,
(ii) does not have any direct financial interest or any material
indirect
financial interest in the Depositor or the Servicer or in an
affiliate of either
of them, and (iii) is not connected with the Depositor or the
Servicer as an
officer, employee, promoter, underwriter, trustee, partner,
director or person
performing similar functions.
Initial Class Certificate Balance: As to each Class of
Certificates
(other than the Class CB-IO, Class 3-IO and Class 15-IO
Certificates), the Class
Certificate Balance set forth in the Preliminary Statement. The
Class CB-IO,
Class 3-IO and Class 15-IO Certificates are Interest-Only
Certificates and have
no Initial Class Certificate Balance.
Initial Component Balance: As to each 30-PO Component, the
Component
Balance set forth in the Preliminary Statement. The IO Components
are
interest-only Components and have no Initial Component Balance.
Initial Component Notional Amount: As to each IO Component, the
Component Notional Amount set forth in the Preliminary
Statement.
Initial Notional Amount: As to the Class 3-IO and Class 15-IO
Certificates, the Notional Amount set forth in the Preliminary
Statement. For
the Class CB-IO Certificates, the sum of the Initial Component
Notional Amounts
for the Class 1-CB-IO and Class 2-CB-IO Components.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Estate, any related insurance policy, including all riders
and
endorsements thereto in effect, including any replacement policy or
policies for
any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in
such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: As to any Distribution Date and each
Class
of Certificates (other than the Class CB-IO, Class 30-PO and Class
15-PO
Certificates) and each IO Component, the period from and including
the first day
of the calendar month preceding the calendar month of such
Distribution Date to
but not including the first day of the calendar month of such
Distribution Date.
Interest Distribution Amount: For any Distribution Date and
each
interest- bearing Class (other than the Class CB-IO Certificates),
the sum of
(i) the Accrued Certificate Interest, subject to reduction pursuant
to Section
5.02(c) and (ii) any Class Unpaid Interest Shortfall for such
Class. For any
Distribution Date and the Class CB-IO Certificates, the sum of the
Component
Interest Distribution Amounts for the IO Components.
Interest-Only Certificates: Any Class of Certificates entitled
to
distributions of interest, but no distributions of principal. The
Class CB-IO,
Class 3-IO and Class 15-IO Certificates are the only Classes of
Interest-Only
Certificates.
IO Component: As defined in the Preliminary Statement.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) that was
liquidated in the
calendar month preceding the month of such Distribution Date and as
to which the
Servicer has certified (in accordance with this Agreement) that it
has received
all proceeds it expects to receive in connection with the
liquidation of such
Mortgage Loan including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of
defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or
otherwise or
amounts received in connection with any condemnation or partial
release of a
Mortgaged Property and any other proceeds received in connection
with an REO
Property, less the sum of related unreimbursed Servicing Fees and
Advances.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 or
Loan
Group 4.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Group 3: The Group 3 Mortgage Loans.
Loan Group 4: The Group 4 Mortgage Loans.
Loan-to-Value Ratio: With respect to any Mortgage Loan and any
date
of determination, the fraction, expressed as a percentage, the
numerator of
which is the outstanding principal balance of the related Mortgage
Loan at the
date of determination and the denominator of which is the Appraised
Value of the
related Mortgaged Property.
Lower-Tier Distribution Amount: As defined in Section 5.02(a).
Lower-Tier REMIC: As defined in the Preliminary Statement, the
assets of which consist of the Mortgage Loans, such amounts as
shall from time
to time be held in the Certificate Account (other than Ancillary
Income and
amounts held in respect of the Upper-Tier Certificate Sub-Account),
the
insurance policies, if any, relating to a Mortgage Loan and
property which
secured a Mortgage Loan and which has been acquired by foreclosure
or deed in
lieu of foreclosure.
MERS: As defined in Section 2.01(b)(iii).
Monthly Covered Amount: As defined in the Mortgage Loan
Purchase
Agreement.
Monthly Form 8-K: As defined in Section 3.22(a).
Monthly Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related Debt
Service Reduction and any Deficient Valuation that affects the
amount of the
monthly payment due on such Mortgage Loan or the Monthly Covered
Amount
representing such scheduled monthly payment.
Moody's: Moody's Investors Service, Inc., or any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on a Mortgaged Property securing a Mortgage Note or
creating a first
lien on a leasehold interest.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum
rate
of interest at which interest accrues on the principal balance of
such Mortgage
Loan in accordance with the terms of the related Mortgage Note.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated December 29, 2004, between Bank of America, as
seller, and the
Depositor, as purchaser.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to
time amended by the Servicer to reflect the addition of Substitute
Mortgage
Loans and the deletion of Defective Mortgage Loans pursuant to the
provisions of
this Agreement) transferred to the Trustee as part of the Trust
Estate and from
time to time subject to this Agreement, attached hereto as Exhibit
D-1, Exhibit
D-2, Exhibit D-3 and Exhibit D-4, setting forth the following
information with
respect to each Mortgage Loan: (i) the Mortgage Loan identifying
number; (ii) a
code indicating whether the Mortgaged Property is owner-occupied;
(iii) the
property type for each Mortgaged Property; (iv) the original months
to maturity
or the remaining months to maturity from the Cut-off Date; (v) the
Loan-to-Value
Ratio at origination; (vi) the Mortgage Interest Rate as of the
Cut-off Date;
(vii) the date on which the first Monthly Payment was due on the
Mortgage Loan,
and, if such date is not the Due Date currently in effect, such Due
Date; (viii)
the stated maturity date; (ix) the amount of the Monthly Payment as
of the
Cut-off Date; (x) the paid-through date; (xi) the original
principal amount of
the Mortgage Loan; (xii) the principal balance of the Mortgage Loan
as of the
close of business on the Cut-off Date, after application of
payments of
principal due on or before the Cut-off Date, whether or not
collected, and after
deduction of any payments collected of scheduled principal due
after the Cut-off
Date; (xiii) a code indicating the purpose of the Mortgage Loan;
(xiv) a code
indicating the documentation style; (xv) the Appraised Value; and
(xvi) the
closing date of such Mortgage Loan. With respect to the Mortgage
Loans in the
aggregate, the Mortgage Loan Schedule shall set forth the following
information,
as of the Cut-off Date: (i) the number of Mortgage Loans; (ii) the
current
aggregate outstanding principal balance of the Mortgage Loans;
(iii) the
weighted average Mortgage Interest Rate of the Mortgage Loans; and
(iv) the
weighted average months to maturity of the Mortgage Loans.
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to Section 2.01 as from time to time are
held as a part
of the Trust Estate (including any Substitute Mortgage Loans and
REO Property),
the Mortgage Loans originally so held being identified in the
Mortgage Loan
Schedule.
Mortgage Note: The originally executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan,
together with all riders thereto and amendments thereof.
Mortgaged Property: The underlying property securing a Mortgage
Loan, which may include Co-op Shares or residential long-term
leases.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: As to any Mortgage Loan and
Distribution
Date, such Mortgage Loan's Mortgage Interest Rate thereon on the
first day of
the month preceding the month of the related Distribution Date
reduced by (i)
the Servicing Fee Rate and (ii) the Trustee Fee Rate.
Non-PO Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage), the numerator of which is the Net
Mortgage Interest
Rate as of the Cut-off Date of such Discount Mortgage Loan and the
denominator
of which is 6.000% for each Group 1 Discount Mortgage Loan and
Group 2 Discount
Mortgage Loan, 5.750% for each Group 3 Discount Mortgage Loan and
5.500% for
each Group 4 Discount Mortgage Loan. As to any Mortgage Loan that
is not a
Discount Mortgage Loan, 100%.
Non-PO Principal Amount: As to any Distribution Date and Loan
Group,
the sum of (i) the sum of the applicable Non-PO Percentage of (a)
the principal
portion of each Monthly Payment due on each Mortgage Loan in such
Loan Group on
the related Due Date, (b) the Stated Principal Balance, as of the
date of
repurchase, of each Mortgage Loan in such Loan Group that was
repurchased by the
Depositor pursuant to this Agreement as of such Distribution Date,
(c) any
Substitution Adjustment Amount in connection with a Defective
Mortgage Loan in
such Loan Group received with respect to such Distribution Date,
(d) any
Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans in
such Loan Group that are not yet Liquidated Mortgage Loans received
during the
calendar month preceding the month of such Distribution Date, (e)
with respect
to each Mortgage Loan in such Loan Group that became a Liquidated
Mortgage Loan
during the calendar month preceding the month of such Distribution
Date, the
amount of Liquidation Proceeds (excluding Excess Proceeds)
allocable to
principal received with respect to such Mortgage Loan during the
calendar month
preceding the month of such Distribution Date and (f) all Principal
Prepayments
on the Mortgage Loans in such Loan Group received during the
calendar month
preceding the month of such Distribution Date; and (ii) the Non-PO
Recovery for
such Distribution Date.
Non-PO Recovery: As to any Distribution Date and Loan Group,
the
amount of all Recoveries received with respect to such Loan Group
during the
calendar month preceding the month of such Distribution Date less
the PO
Recovery with respect to such Loan Group for such Distribution
Date.
Non-Supported Interest Shortfalls: As to any Distribution Date
the
amount, if any, by which the aggregate of Prepayment Interest
Shortfalls exceeds
Compensating Interest for such Distribution Date.
Non-U.S. Person: A Person other than a U.S. Person.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made in respect of a Mortgage Loan which has not
been previously
reimbursed and which, in the good faith judgment of the Servicer,
will not or,
in the case of a proposed Advance, would not be ultimately
recoverable from the
related Mortgagor, related Liquidation Proceeds, or other
recoveries in respect
of the related Mortgage Loan.
Notional Amount: With respect to: (i) the Class 1-CB-IO
Component
and any date of determination, the Class 1-CB-IO Notional Amount,
(ii) the Class
2-CB-IO Component and any date of determination, the Class 2-CB-IO
Notional
Amount, (iii) the Class 3-IO Certificates and any date of
determination, the
Class 3-IO Notional Amount, (iv) the Class 15-IO Certificates and
any date of
determination, the Class 15-IO Notional Amount and (v) the Class
CB-IO
Certificates and any date of determination, the Class CB-IO
Notional Amount.
Offered Certificates: The Senior Certificates, Class B-1, Class
B-2 and Class B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of
the
Board, Vice Chairman of the Board, President or a Vice President
and by the
Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant
Secretaries, or any other duly authorized officer of the Depositor
or the
Servicer, as the case may be, and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel acceptable to
the
Trustee, who may be counsel for the Depositor or the Servicer,
except that any
opinion of counsel relating to the qualification of the Trust
Estate as two
separate REMICs or compliance with the REMIC Provisions must be an
opinion of
Independent counsel.
Original Fractional Interest: With respect to each of the
following
Classes of Subordinate Certificates, the corresponding percentage
described
below, as of the Closing Date:
Class B-1
2.40%
Class B-2
1.63%
Class B-3
1.12%
Class B-4
0.71%
Class B-5
0.41%
Class B-6
0.00%
Original Subordinate Class Certificate Balance: $15,797,278.00.
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
which
was not the subject of a Principal Prepayment in Full prior to such
Due Date,
which did not become a Liquidated Mortgage Loan prior to such Due
Date and which
was not purchased from the Trust prior to such Due Date pursuant to
Section 2.02
or 2.04.
Ownership Interest: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: As to each Class of interest-bearing
Certificates
(other than the Class CB-IO Certificates) and each IO Component,
the per annum
rate set forth or described in the Preliminary Statement.
Paying Agent: As defined in Section 9.13.
Percentage Interest: As to any Certificate, the percentage
obtained
by dividing the initial Certificate Balance of such Certificate (or
the Initial
Notional Amount for a Class CB-IO, Class 3-IO and Class 15-IO
Certificate) by
the Initial Class Certificate Balance or Initial Notional Amount,
as applicable,
of the Class of which such Certificate is a part.
Periodic Advance: The payment required to be made by the
Servicer
with respect to any Distribution Date pursuant to Section 3.20, the
amount of
any such payment being equal to the aggregate of Monthly Payments
(net of the
Servicing Fee) on the Mortgage Loans (including any REO Property)
that were due
on the related Due Date and not received as of the close of
business on the
related Determination Date, less the aggregate amount of any such
delinquent
payments that the Servicer has determined would constitute a
Nonrecoverable
Advance if advanced.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States, FHLMC, FNMA or any agency or
instrumentality
of the United States when such obligations are backed by the
full
faith and credit of the United States; provided that such
obligations of FHLMC or FNMA shall be limited to senior debt
obligations and mortgage participation certificates other than
investments in mortgage-backed or mortgage participation
securities
with yields evidencing extreme sensitivity to the rate of
principal
payments on the underlying mortgages, which shall not
constitute
Permitted Investments hereunder;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of
acquisition
thereof with a corporation incorporated under the laws of the
United
States or any state thereof rated not lower than "P-1" by
Moody's
and "F-1" by Fitch;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have
an
original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original maturity
of
more than 365 days or a remaining maturity of more than 30
days)
denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the
United States or any state thereof, rated not lower than "P-1"
by
Moody's and "F-1" by Fitch;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of
the
United States or any state thereof which is rated not lower
than
"P-1" by Moody's and "F-1" by Fitch;
(v) investments in money market funds (including funds of the
Trustee or its affiliates, or funds for which an affiliate of
the
Trustee acts as advisor, as well as funds for which the Trustee
and
its affiliates may receive compensation) rated "Aaa" by Moody's
and
"AAA" by Fitch (if rated by Fitch) or otherwise approved in
writing
by each Rating Agency; and
(vi) other obligations or securities that are acceptable to
each Rating Agency and, as evidenced by an Opinion of Counsel
obtained by the
Servicer, will not affect the qualification of the
Trust Estate as two separate REMICs;
provided, however, that no instrument shall be a Permitted
Investment if it
represents either (a) the right to receive only interest payments
with respect
to the underlying debt instrument or (b) the right to receive both
principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest with respect to such instrument provide a
yield to
maturity greater than 120% of the yield to maturity at par of such
underlying
obligations.
Permitted Transferee: Any Person other than (i) the United
States,
or any State or any political subdivision thereof, or any agency
or
instrumentality of any of the foregoing, (ii) a foreign
government,
international organization or any agency or instrumentality of
either of the
foregoing, (iii) an organization which is exempt from tax imposed
by Chapter 1
of the Code (including the tax imposed by Section 511 of the Code
on unrelated
business taxable income) (except certain farmers' cooperatives
described in Code
Section 521), (iv) rural electric and telephone cooperatives
described in Code
Section 1381(a)(2)(C), (v) a Person with respect to whom the income
on a
Residual Certificate is allocable to a foreign permanent
establishment or fixed
base, within the meaning of an applicable income tax treaty, of
such Person or
any other Person, and (vi) any other Person so designated by the
Servicer based
on an Opinion of Counsel to the effect that any transfer to such
Person may
cause the Trust or any other Holder of a Residual Certificate to
incur tax
liability that would not be imposed other than on account of such
transfer. The
terms "United States," "State" and "international organization"
shall have the
meanings set forth in Code Section 7701 or successor
provisions.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Physical Certificates: The Class 1-CB-R, Class 1-CB-LR, Class
B-4,
Class B-5 and Class B-6 Certificates.
Plan: As defined in Section 6.02(e).
PO Component: As defined in the Preliminary Statement.
PO Deferred Amount: As to any Distribution Date and each PO
Component, the sum of the amounts by which the Component Balance of
such PO
Component will be reduced on such Distribution Date or has been
reduced on prior
Distribution Dates as a result of Section 5.03(b) less the sum of
(a) the PO
Recoveries with respect to the Related Loan Group for prior
Distribution Dates
and (b) the amounts distributed to such PO Component pursuant to
Section
5.02(a)(iii) on prior Distribution Dates. As to any Distribution
Date and the
Class 15-PO Certificates, the sum of the amounts by which the Class
Certificate
Balance of such Class 15-PO Certificates will be reduced on such
Distribution
Date or has been reduced on prior Distribution Dates as a result of
Section
5.03(b) less the sum of (a) the PO Recoveries with respect to Loan
Group 4 for
prior Distribution Dates and (b) the amounts distributed to such
Class 15-PO
Certificates pursuant to Section 5.02(a)(iii) on prior Distribution
Dates.
PO Percentage: As to any Discount Mortgage Loan, 100% minus the
Non-PO Percentage for such Mortgage Loan. As to any Mortgage Loan
that is not a
Discount Mortgage Loan, 0%.
PO Principal Amount: As to any Distribution Date and Loan Group,
the
sum of the applicable PO Percentage of (a) the principal portion of
each Monthly
Payment due on each Mortgage Loan in such Loan Group on the related
Due Date,
(b) the Stated Principal Balance, as of the date of repurchase, of
each Mortgage
Loan in such Loan Group that was repurchased by the Depositor
pursuant to this
Agreement as of such Distribution Date, (c) any Substitution
Adjustment Amount
in connection with any Defective Mortgage Loan in such Loan Group
received with
respect to such Distribution Date, (d) any Liquidation Proceeds
allocable to
recoveries of principal of Mortgage Loans in such Loan Group that
are not yet
Liquidated Mortgage Loans received during the calendar month
preceding the month
of such Distribution Date, (e) with respect to each Mortgage Loan
in such Loan
Group that became a Liquidated Mortgage Loan during the calendar
month preceding
the month of such Distribution Date, the amount of Liquidation
Proceeds
(excluding Excess Proceeds) allocable to principal received with
respect to such
Mortgage Loan during the calendar month preceding the month of such
Distribution
Date with respect to such Mortgage Loan and (f) all Principal
Prepayments
received on the Mortgage Loans in such Loan Group received during
the calendar
month preceding the month of such Distribution Date.
PO Recovery: As to any Distribution Date and Loan Group, the
lesser
of (a) (i) in the case of Group 1, Group 2 and Group 3, the PO
Deferred Amount
for the Class 30-PO Component of the Related Group for such
Distribution Date
and (ii) in the case of Group 4, the PO Deferred Amount for the
Class 15-PO
Certificates for such Distribution Date and (b) an amount equal to
the sum as to
each Mortgage Loan in such Loan Group as to which there has been a
Recovery
received during the calendar month preceding the month of such
Distribution
Date, of the product of (x) the PO Percentage with respect to such
Mortgage Loan
and (y) the amount of the Recovery with respect to such Mortgage
Loan.
Pool Distribution Amount: As to any Distribution Date and Loan
Group, the excess of (a) the sum of (i) the aggregate of (A) the
interest
portion of any Monthly Payment on a Mortgage Loan in such Loan
Group (net of the
Servicing Fee) and the principal portion of any Monthly Payment on
a Mortgage
Loan in such Loan Group due on the Due Date in the month in which
such
Distribution Date occurs and which is received prior to the
related
Determination Date (or in the case of any Monthly Covered Amount,
the related
Remittance Date) and (B) all Periodic Advances and payments of
Compensating
Interest made by the Servicer in respect of such Loan Group and
Distribution
Date deposited to the Servicer Custodial Account pursuant to
Section
3.08(b)(vii); (ii) all Liquidation Proceeds received on the
Mortgage Loans in
such Loan Group during the preceding calendar month and deposited
to the
Servicer Custodial Account pursuant to Section 3.08(b)(iii); (iii)
all Principal
Prepayments (other than Total Covered Amounts) received on the
Mortgage Loans in
such Loan Group during the month preceding the month of such
Distribution Date
and deposited to the Servicer Custodial Account pursuant to Section
3.08(b)(i)
during such period and all Total Covered Amounts received and
deposited in the
Servicer Custodial Account by the related Remittance Date; (iv) in
connection
with Defective Mortgage Loans in such Loan Group, as applicable,
the aggregate
of the Repurchase Prices and Substitution Adjustment Amounts
deposited on the
related Remittance Date pursuant to Section 3.08(b)(vi); (v) any
other amounts
in the Servicer Custodial Account deposited therein pursuant to
Sections
3.08(b)(iv), (v) and (ix) in respect of such Distribution Date and
such Loan
Group; (vi) any Reimbursement Amount required to be included
pursuant to Section
5.02(a); and (vii) any Non-PO Recovery with respect to such
Distribution Date
over (b) any (i) amounts permitted to be withdrawn from the
Servicer Custodial
Account pursuant to clauses (i) through (vii), inclusive, of
Section 3.11(a) in
respect of such Loan Group and (ii) amounts permitted to be
withdrawn from the
Certificate Account pursuant to clauses (i) and (ii) of Section
3.11(b) in
respect of such Loan Group.
Pool Stated Principal Balance: As to any Distribution Date and
Loan
Group, the aggregate Stated Principal Balances of all Mortgage
Loans in such
Loan Group that were Outstanding Mortgage Loans immediately
following the Due
Date in the month preceding the month in which such Distribution
Date occurs.
Pool Stated Principal Balance (Non-PO Portion): As to any
Distribution Date and Loan Group, the sum for each Mortgage Loan in
such Loan
Group of the product of (a) the Non-PO Percentage of such Mortgage
Loan and (b)
the Stated Principal Balance of such Mortgage Loan that was an
Outstanding
Mortgage Loan immediately following the Due Date in the month
preceding the
month in which such Distribution Date occurs.
Premium Mortgage Loan: Any Group 1 Premium Mortgage Loan, Group
2
Premium Mortgage Loan, Group 3 Premium Mortgage Loan or Group 4
Premium
Mortgage Loan.
Prepayment Interest Shortfall: As to any Distribution Date and
each
Mortgage Loan subject to a Principal Prepayment received during the
calendar
month preceding such Distribution Date, the amount, if any, by
which one month's
interest at the related Mortgage Interest Rate (net of the
Servicing Fee) on
such Principal Prepayment exceeds the amount of interest paid in
connection with
such Principal Prepayment.
Primary Insurance Policy: Each policy of primary mortgage
guaranty
insurance or any replacement policy therefor with respect to any
Mortgage Loan,
in each case issued by an insurer acceptable to FNMA or FHLMC.
Principal Only Certificates: Any Class of Certificates entitled
to
distributions of principal, but to no distributions of interest.
The Class 30-PO
and Class 15-PO Certificates are the only Principal Only
Certificates.
Principal Prepayment: Any payment or other recovery of principal
on
a Mortgage Loan (other than Liquidation Proceeds) which is received
in advance
of its scheduled Due Date and is not accompanied by an amount of
interest
representing scheduled interest due on any date or dates in any
month or months
subsequent to the month of prepayment, including the principal
portion of any
Total Covered Amount.
Principal Prepayment in Full: Any Principal Prepayment of the
entire
principal balance of a Mortgage Loan.
Private Certificates: The Class B-4, Class B-5 and Class B-6
Certificates.
Pro Rata Share: As to any Distribution Date and any Class of Class
B
Certificates that is not a Restricted Class, the portion of the
Subordinate
Principal Distribution Amounts allocable to such Class, equal to
the product of
the Subordinate Principal Distribution Amounts for the Class B
Certificates, for
such Distribution Date and a fraction, the numerator of which is
the related
Class Certificate Balance thereof and the denominator of which is
the aggregate
Class Certificate Balance of the Class B Certificates that are not
Restricted
Classes. The Pro Rata Share of a Restricted Class shall be 0%.
Qualified Appraiser: An appraiser of a Mortgaged Property duly
appointed by the originator of the related Mortgage Loan, who had
no interest,
direct or indirect, in such Mortgaged Property or in any loan made
on the
security thereof, whose compensation is not affected by the
approval or
disapproval of the related Mortgage Loan and who met the minimum
qualifications
of FNMA or FHLMC.
Rating Agency: Each of Fitch and Moody's. If either such
organization or a successor is no longer in existence, "Rating
Agency" shall be
such nationally recognized statistical rating organization, or
other comparable
Person, as is designated by the Depositor, notice of which
designation shall be
given to the Trustee. References herein to a given rating or rating
category of
a Rating Agency shall mean such rating category without giving
effect to any
modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount as of the date of such liquidation, equal to (i) the unpaid
principal
balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus
(ii) interest at the Net Mortgage Interest Rate from the Due Date
as to which
interest was last paid or advanced (and not reimbursed) to
Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are
required to be
distributed on the Stated Principal Balance of such Liquidated
Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any,
received during
the month in which such liquidation occurred, to the extent applied
as
recoveries of interest at the Net Mortgage Interest Rate and to
principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan that
has become the
subject of a Deficient Valuation, if the principal amount due under
the related
Mortgage Note has been reduced, the difference between the
principal balance of
the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and
the principal balance of the Mortgage Loan as reduced by the
Deficient
Valuation. With respect to each Mortgage Loan that has become the
subject of a
Debt Service Reduction and any Distribution Date, the amount, if
any, by which
the principal portion of the related Monthly Payment has been
reduced.
Record Date: The last day of the month (or, if such day is not
a
Business Day, the preceding Business Day) preceding the month of
the related
Distribution Date.
Recovery: Any amount received on a Mortgage Loan subsequent to
such
Mortgage Loan being determined to be a Liquidated Mortgage
Loan.
Refinance Mortgage Loan: Any Mortgage Loan the proceeds of
which
were not used to purchase the related Mortgaged Property.
Regular Certificates: As defined in the Preliminary Statement
hereto.
Reimbursement Amount: As defined in Section 2.04.
Related Group: For Loan Group 1, Group 1; for Loan Group 2, Group
2;
for Loan Group 3, Group 3, and for Loan Group 4, Group 4;.
Related Loan Group: For Group 1, Loan Group 1; for Group 2,
Loan
Group 2; for Group 3, Loan Group 3; and for Group 4, Loan Group
4.
Relief Act: The Servicemembers Civil Relief Act, as it may be
amended from time to time.
Relief Act Reduction: With respect to any Distribution Date, for
any
Mortgage Loan as to which there has been a reduction in the amount
of interest
collectible thereon for the most recently ended calendar month as a
result of
the application of the Relief Act or comparable state legislation,
the amount,
if any, by which (i) interest collectible on such Mortgage Loan for
the most
recently ended calendar month is less than (ii) interest accrued
pursuant to the
terms of the Mortgage Note on the same principal amount and for the
same period
as the interest collectible on such Mortgage Loan for the most
recently ended
calendar month.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Certificate Maturity Date: The "latest possible maturity
date"
of the Regular Certificates and the Components as that term is
defined in
Section 2.07.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits, which appear at
Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions,
and regulations promulgated thereunder, as the foregoing may be in
effect from
time to time, as well as provisions of applicable state laws.
Remittance Date: As to any Distribution Date, by 2:00 p.m.
Eastern
time on the Business Day immediately preceding such Distribution
Date.
REO Disposition Period: As defined in Section 3.14.
REO Proceeds: Proceeds, net of any related expenses of the
Servicer,
received in respect of any REO Property (including, without
limitation, proceeds
from the rental of the related Mortgaged Property) which are
received prior to
the final liquidation of such Mortgaged Property.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure in
connection with a defaulted Mortgage Loan.
Repurchase Price: As to any Defective Mortgage Loan repurchased
on
any date pursuant to Section 2.02 or 2.04, an amount equal to the
sum of (i) the
unpaid principal balance thereof and (ii) the unpaid accrued
interest thereon at
the applicable Mortgage Interest Rate from the Due Date to which
interest was
last paid by the Mortgagor to the first day of the month following
the month in
which such Mortgage Loan became eligible to be repurchased.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee or the Custodian on behalf of the Trustee,
substantially
in the form of Exhibit E.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy which is required to be maintained from time to
time under this
Agreement in respect of such Mortgage Loan.
Residual Certificates: The Class 1-CB-R and Class 1-CB-LR
Certificates.
Responsible Officer: When used with respect to the Trustee, any
officer of the Corporate Trust Department of the Trustee, including
any Senior
Vice President, any Vice President, any Assistant Vice President,
any Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any
other officer of
the Trustee customarily performing functions similar to those
performed by any
of the above designated officers and having responsibility for
the
administration of this Agreement.
Restricted Classes: As defined in Section 5.02(d).
Seller: Bank of America, a national banking association, or its
successor in interest, as seller of the Mortgage Loans under the
Mortgage
Loan Purchase Agreement.
Senior Certificates: The Class 1-CB-1, Class 1-CB-R, Class
1-CB-LR,
Class 2-CB-1, Class CB-IO, Class 3-A-1, Class 3-IO, Class 30-PO,
Class 4-A-1,
Class 15-IO and Class 15-PO Certificates.
Senior Credit Support Depletion Date: The date on which the
aggregate Class Certificate Balance of the Subordinate Certificates
is reduced
to zero.
Senior Percentage: With respect to any Distribution Date and
Loan
Group, the percentage, carried six places rounded up, obtained by
dividing (i)
the aggregate Class Certificate Balance of the Senior Certificates
of the
Related Group immediately prior to such Distribution Date by (ii)
the Pool
Stated Principal Balance (Non-PO Portion) of such Loan Group
immediately prior
to such Distribution Date.
Senior Prepayment Percentage: For any Distribution Date and
Loan
Group during the five years beginning on the first Distribution
Date, 100%. The
Senior Prepayment Percentage for any Loan Group for any
Distribution Date
occurring on or after the fifth anniversary of the first
Distribution Date will,
except as provided herein, be as follows: for any Distribution Date
in the first
year thereafter, the Senior Percentage for such Loan Group plus 70%
of the
Subordinate Percentage for such Loan Group for such Distribution
Date; for any
Distribution Date in the second year thereafter, the Senior
Percentage for such
Loan Group plus 60% of the Subordinate Percentage for such Loan
Group for such
Distribution Date; for any Distribution Date in the third year
thereafter, the
Senior Percentage for such Loan Group plus 40% of the Subordinate
Percentage for
such Loan Group for such Distribution Date; for any Distribution
Date in the
fourth year thereafter, the Senior Percentage for such Loan Group
plus 20% of
the Subordinate Percentage for such Loan Group for such
Distribution Date; and
for any Distribution Date in the fifth or later years thereafter,
the Senior
Percentage for such Loan Group for such Distribution Date, unless
on any of the
foregoing Distribution Dates the Total Senior Percentage exceeds
the initial
Total Senior Percentage, in which case the Senior Prepayment
Percentage for each
Loan Group for such Distribution Date will once again equal
100%.
Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage
for any Loan Group will occur unless both of the Senior Step Down
Conditions are
satisfied.
Senior Principal Distribution Amount: As to any Distribution
Date
and Loan Group, the sum of (i) the Senior Percentage for such Loan
Group of the
applicable Non-PO Percentage of the amounts described in clauses
(i)(a) through
(d) of the definition of "Non-PO Principal Amount" for such
Distribution Date
and Loan Group and (ii) the Senior Prepayment Percentage for such
Loan Group of
(1) the applicable Non-PO Percentage of the amounts described in
clauses (i)(e)
and (f) and (2) the amount described in clause (ii) of the
definition of "Non-PO
Principal Amount" for such Distribution Date and Loan Group.
Senior Step Down Conditions: As of any Distribution Date as to
which
any decrease in the Senior Prepayment Percentage for any Loan Group
applies, (i)
the outstanding principal balance of all Mortgage Loans (including,
for this
purpose, any Mortgage Loans in foreclosure, any REO Property and
any Mortgage
Loan for which the Mortgagor has filed for bankruptcy after the
Closing Date)
delinquent 60 days or more (averaged over the preceding six-month
period), as a
percentage of the aggregate Class Certificate Balance of the
Subordinate
Certificates, is not equal to or greater than 50% or (ii)
cumulative Realized
Losses with respect to the Mortgage Loans as of the applicable
Distribution Date
do not exceed the percentages of the Original Subordinate Class
Certificate
Balance set forth below:
Percentage of
Original Subordinate Class
Distribution Date Occurring
Certificate Balance
---------------------------
-------------------
January 2010 through December 2010
30%
January 2011 through December 2011
35%
January 2012 through December 2012
40%
January 2013 through December 2013
45%
January 2014 and thereafter
50%
Servicer: Bank of America, a national banking association, or
its
successor in interest, in its capacity as servicer of the Mortgage
Loans, or any
successor servicer appointed as herein provided.
Servicer Advance Date: As to any Distribution Date, 11:30 a.m.,
Eastern time, on the Business Day immediately preceding such
Distribution
Date.
Servicer Custodial Account: The separate Eligible Account or
Accounts created and maintained by the Servicer pursuant to Section
3.08(b).
Servicer Custodial Account Reinvestment Income: For each
Distribution Date, all income and gains net of any losses realized
since the
preceding Distribution Date from Permitted Investments of funds in
the Servicer
Custodial Account.
Servicer's Certificate: The monthly report required by Section
4.01.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the performance by the
Servicer of its
servicing obligations, including, but not limited to (i) the
preservation,
restoration and protection of a Mortgaged Property, (ii) expenses
reimbursable
to the Servicer pursuant to Section 3.14 and any enforcement or
judicial
proceedings, including foreclosures, (iii) the management and
liquidation of any
REO Property and (iv) compliance with the obligations under Section
3.12.
Servicing Compensation: With respect to each Distribution Date,
the
sum of (i) the aggregate Servicing Fee for such Distribution Date
subject to
reduction as provided in Section 3.17, (ii) any Ancillary Income,
(iii) Excess
Proceeds for the preceding month and (iv) the Servicer Custodial
Account
Reinvestment Income for such Distribution Date.
Servicing Fee: With respect to each Mortgage Loan and
Distribution
Date, the amount of the fee payable to the Servicer, which shall,
for such
Distribution Date, be equal to one-twelfth of the product of the
Servicing Fee
Rate with respect to such Mortgage Loan and the Stated Principal
Balance of such
Mortgage Loan. Such fee shall be payable monthly, computed on the
basis of the
same Stated Principal Balance and period respecting which any
related interest
payment on a Mortgage Loan is computed. The Servicer's right to
receive the
Servicing Fee is limited to, and payable solely from, the interest
portion
(including recoveries with respect to interest from Liquidation
Proceeds and
other proceeds, to the extent permitted by Section 3.11) of related
Monthly
Payments collected by the Servicer, or as otherwise provided under
Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.250%
per
annum.
Servicing File: The items pertaining to a particular Mortgage
Loan
referred to in Exhibit J hereto, and any additional documents
required to be
added to the Servicing File pursuant to the Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name appears on a list of servicing officers furnished to the
Trustee by the
Servicer, as such list may from time to time be amended.
Servicing Transfer Costs: All reasonable costs and expenses
incurred
by the Trustee in connection with the transfer of servicing from a
predecessor
servicer, including, without limitation, any costs or expenses
associated with
the complete transfer of all servicing data and the completion,
correction or
manipulation of such servicing data as may be required by the
Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to
enable the
Trustee to service the Mortgage Loans properly and effectively.
Similar Law: As defined in Section 6.02(e).
Stated Principal Balance: As to any Mortgage Loan and date, the
unpaid principal balance of such Mortgage Loan as of the Due Date
immediately
preceding such date as specified in the amortization schedule at
the time
relating thereto (before any adjustment to such amortization
schedule by reason
of any moratorium or similar waiver or grace period) after giving
effect to any
previous partial Principal Prepayments and Liquidation Proceeds
allocable to
principal (other than with respect to any Liquidated Mortgage Loan)
and to the
payment of principal due on such Due Date and irrespective of any
delinquency in
payment by the related Mortgagor, and after giving effect to any
Deficient
Valuation.
Subordinate Balance Ratio: As of any date of determination, the
ratio among the principal balances of the Class 1-LS Interest, the
Class 2-LS
Interest, the Class 3-LS Interest and the Class 4-LS Interest,
equal to the
ratio among the Group Subordinate Amount of Loan Group 1, the Group
Subordinate
Amount of Loan Group 2, the Group Subordinate Amount of Loan Group
3 and the
Group Subordinate Amount of Loan Group 4.
Subordinate Certificates: The Class B Certificates.
Subordinate Percentage: As of any Distribution Date and Loan
Group, 100% minus the Senior Percentage for such Loan Group for
such
Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date
and Loan Group, 100% minus the Senior Prepayment Percentage for
such Loan
Group for such Distribution Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount equal to the sum of (i)
the
Subordinate Percentage for such Loan Group of the applicable Non-PO
Percentage
of the amounts described in clauses (i)(a) through (d) of the
definition of
"Non-PO Principal Amount" for such Distribution Date and Loan Group
and (ii) the
Subordinate Prepayment Percentage of (1) the applicable Non-PO
Percentage of the
amounts described in clauses (i)(e) and (f) and (2) the amount
described in
clause (ii) of the definition of "Non-PO Principal Amount" for such
Distribution
Date and Loan Group.
Subservicer: Any Person with which the Servicer has entered into
a
Subservicing Agreement and which satisfies the requirements set
forth therein.
Subservicing Agreement: Any subservicing agreement (which, in
the
event the Subservicer is an affiliate of the Servicer, need not be
in writing)
between the Servicer and any Subservicer relating to servicing
and/or
administration of certain Mortgage Loans as provided in Section
3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted for a
Defective Mortgage Loan which must, on the date of such
substitution (i) have a
Stated Principal Balance, after deduction of the principal portion
of the
Monthly Payment due in the month of substitution, not in excess of,
and not more
than 10% less than, the Stated Principal Balance of the Defective
Mortgage Loan;
(ii) have a Net Mortgage Interest Rate equal to that of the
Defective Mortgage
Loan; (iii) have a Loan-to-Value Ratio not higher than that of the
Defective
Mortgage Loan; (iv) have a remaining term to maturity not greater
than (and not
more than one year less than) that of the Defective Mortgage Loan;
and (v)
comply with each Mortgage Loan representation and warranty set
forth in this
Agreement relating to the Defective Mortgage Loan. More than one
Substitute
Mortgage Loan may be substituted for a Defective Mortgage Loan if
such
Substitute Mortgage Loans meet the foregoing attributes in the
aggregate.
Substitution Adjustment Amount: As defined in Section 2.02.
Tax Matters Person: Any person designated as "tax matters person"
in
accordance with Section 5.06 and the manner provided under Treasury
Regulation
ss. 1.860F-4(d) and Treasury Regulation ss. 301.6231(a)(7)-1.
Total Covered Amount: As defined in the Mortgage Loan Purchase
Agreement.
Total Senior Percentage: With respect to any Distribution Date,
the
percentage, carried six places rounded up, obtained by dividing the
aggregate
Class Certificate Balance of the Senior Certificates (but not the
PO Components
or the Class 15-PO Certificates) immediately prior to such
Distribution Date by
the aggregate Pool Stated Principal Balance (Non-PO Portion) of all
Loan Groups
for such Distribution Date.
Treasury Regulations: The final and temporary regulations
promulgated under the Code by the U.S. Department of the
Treasury.
Trust: The trust created by this Agreement.
Trust Estate: The corpus of the Trust created to the extent
described herein, consisting of the Mortgage Loans, such assets as
shall from
time to time be identified as deposited in the Servicer Custodial
Account or the
Certificate Account, in accordance with this Agreement, REO
Property, the
Primary Insurance Policies, any other Required Insurance Policy and
the right to
receive any BPP Mortgage Loan Payment.
Trustee: Wells Fargo Bank, N.A., and its successors-in-interest
and, if a successor trustee is appointed hereunder, such successor,
as
trustee.
Trustee Fee: As to any Distribution Date and Loan Group, an
amount
equal to one-twelfth of the Trustee Fee Rate multiplied by the
aggregate Stated
Principal Balance of the Mortgage Loans in the Related Loan Group
immediately
following the Due Date in the month preceding the month in which
such
Distribution Date occurs.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0075%
per
annum.
Uncertificated Lower-Tier Interest: A regular interest in the
Lower-Tier REMIC which is held as an asset of the Upper-Tier REMIC
and is
entitled to monthly distributions as provided in Section 5.02(a)
hereof. Any of
the Class 1-L Interest, Class 1-LS Interest, Class 1-LPO Interest,
Class 1-LWIO
Interest, Class 2-L Interest, Class 2-LS Interest, Class 2-LPO
Interest, Class
2-LWIO Interest, Class 3-L Interest, Class 3-LS Interest, Class
3-LPO Interest,
Class 3-LWIO Interest, Class 4-L Interest, Class 4-LS Interest,
Class 4-LPO
Interest and Class 4-LWIO Interest are Uncertificated Lower-Tier
Interests.
Underwriting Guidelines: The underwriting guidelines of Bank of
America.
Upper-Tier Certificate: Any one of the Senior Certificates
(other
than the Class 1-CB-LR Certificate) and the Subordinate
Certificates.
Upper-Tier Certificate Sub-Account: The sub-account of the
Certificate Account designated by the Trustee pursuant to Section
3.08(f).
Upper-Tier REMIC: As defined in the Preliminary Statement, the
assets of which consist of the Uncertificated Lower-Tier Interests
and such
amounts as shall from time to time be deemed to be held in the
Upper-Tier
Certificate Sub-Account.
U.S. Person: A citizen or resident of the United States, a
corporation or partnership (unless, in the case of a partnership,
Treasury
Regulations are adopted that provide otherwise) created or
organized in or under
the laws of the United States, any state thereof or the District of
Columbia,
including an entity treated as a corporation or partnership for
federal income
tax purposes, an estate whose income is subject to United States
federal income
tax regardless of its source, or a trust if a court within the
United States is
able to exercise primary supervision over the administration of
such trust, and
one or more such U.S. Persons have the authority to control all
substantial
decisions of such trust (or, to the extent provided in applicable
Treasury
Regulations, certain trusts in existence on August 20, 1996 which
are eligible
to elect to be treated as U.S. Persons).
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date
of
determination, (a) 1% of all Voting Rights shall be allocated to
the Holders of
the Class CB-IO Certificates, (b) 1% of all Voting Rights shall be
allocated to
the Holders of the Class 3-IO Certificates, (c) 1% of all Voting
Rights shall be
allocated to the Holders of the Class 15-IO Certificates, (d) 1% of
all Voting
Rights shall be allocated collectively to the Holders of the
Residual
Certificates and (e) the remaining Voting Rights shall be allocated
among
Holders of the remaining Classes of Certificates in proportion to
the
Certificate Balances of their respective Certificates on such
date.
Section 1.02 Interest Calculations. All calculations of
interest
will be made on a 360-day year consisting of twelve 30-day months.
All dollar
amounts calculated hereunder shall be rounded to the nearest penny
with one-half
of one penny being rounded down.
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee on behalf
of the Trust
for the benefit of the Certificateholders, without recourse, all
the right,
title and interest of the Depositor in and to the Mortgage Loans,
including all
interest and principal received on or with respect to the Mortgage
Loans (other
than payments of principal and interest due and payable on the
Mortgage Loans on
or before the Cut-off Date). The foregoing sale, transfer,
assignment and set
over does not and is not intended to result in a creation of an
assumption by
the Trustee of any obligation of the Depositor or any other Person
in connection
with the Mortgage Loans or any agreement or instrument relating
thereto, except
as specifically set forth herein. In addition, the Depositor,
concurrently with
the execution and delivery hereof, hereby sells, transfers,
assigns, sets over
and otherwise conveys to the Trustee on behalf of the Trust for the
benefit of
the Certificateholders, without recourse, the Depositor's rights to
receive any
BPP Mortgage Loan Payment. It is agreed and understood by the
parties hereto
that it is not intended that any mortgage loan be included in the
Trust that is
a "High-Cost Home Loan" as defined in any of (i) the New Jersey
Home Ownership
Act effective November 27, 2003, (ii) the New Mexico Home Loan
Protection Act
effective January 1, 2004 or (iii) the Massachusetts Predatory Home
Loan
Practices Act effective November 7, 2004.
(b) In connection with such transfer and assignment, the
Depositor
shall deliver or cause to be delivered to the Trustee, for the
benefit of the
Certificateholders, the following documents or instruments with
respect to each
Mortgage Loan so assigned:
(i)
the original Mortgage Note, endorsed by manual or facsimile
signature
in the following form: "Pay to the order of Wells Fargo Bank,
N.A., as
trustee for the holders of the Banc of America Alternative Loan
Trust
2004-12 Mortgage Pass-Through Certificates, Series 2004-12,
without
recourse,"
with all necessary intervening endorsements showing a complete
chain of
endorsement from the originator to the Trustee (each such
endorsement being sufficient to transfer all right, title and
interest of
the party
so endorsing, as noteholder or assignee thereof, in and to that
Mortgage
Note);
(ii) except as provided below, the original recorded Mortgage
with
evidence
of a recording thereon, or if any such Mortgage has not been
returned
from the applicable recording office or has been lost, or if
such
public
recording office retains the original recorded Mortgage, a copy
of
such
Mortgage certified by the Depositor as being a true and correct
copy
of the
Mortgage;
(iii) subject to the provisos at the end of this paragraph, a
duly
executed
Assignment of Mortgage to "Wells Fargo Bank, N.A., as trustee
for
the
holders of the Banc of America Alternative Loan Trust 2004-12
Mortgage
Pass-Through Certificates, Series 2004-12" (which may be included
in a
blanket
assignment or assignments), together with, except as provided
below,
originals of all interim recorded assignments of such mortgage or
a
copy of
such interim assignment certified by the Depositor as being a
true
and
complete copy of the original recorded intervening assignments
of
Mortgage
(each such assignment, when duly and validly completed, to be
in
recordable
form and sufficient to effect the assignment of and transfer to
the
assignee thereof, under the Mortgage to which the assignment
relates);
provided
that, if the related Mortgage has not been returned from the
applicable
public recording office, such Assignment of Mortgage may
exclude
the information to be provided by the recording office; and
provided,
further, if the related Mortgage has been recorded in the name
of
Mortgage Electronic Registration Systems, Inc. ("MERS") or its
designee,
no Assignment of Mortgage in favor of the Trustee will be
required
to be prepared or delivered and instead, the Servicer shall
take
all
actions as are necessary to cause the Trust to be shown as the
owner
of the
related Mortgage Loan on the records of MERS for purposes of
the
system of
recording transfers of beneficial ownership of mortgages
maintained
by MERS;
(iv) the originals of all assumption, modification, consolidation
or
extension
agreements, if any, with evidence of recording thereon, if any;
(v) any of (A) the original or duplicate original mortgagee
title
insurance
policy and all riders thereto, (B) a title search showing no
lien
(other than standard exceptions of the type described in Section
2.04
(viii)) on
the Mortgaged Property senior to the lien of the Mortgage or
(C) an
opinion of counsel of the type customarily rendered in the
applicable
jurisdiction in lieu of a title insurance policy;
(vi) the original of any guarantee executed in connection with
the
Mortgage
Note;
(vii) for each Mortgage Loan, if any, which is secured by a
residential long-term lease, a copy of the lease with evidence
of
recording
indicated thereon, or, if the lease is in the process of being
recorded,
a photocopy of the lease, certified by an officer of the
respective
prior owner of such Mortgage Loan or by the applicable title
insurance
company, closing/settlement/escrow agent or company or closing
attorney
to be a true and correct copy of the lease transmitted for
recordation;
(viii) the original of any security agreement, chattel mortgage
or
equivalent
document executed in connection with the Mortgage; and
(ix) for each Mortgage Loan secured by Co-op Shares, the
originals
of the
following documents or instruments:
(A) The stock certificate;
(B) The stock power executed in blank;
(C) The executed proprietary lease;
(D) The executed recognition agreement;
(E) The executed assignment of recognition agreement, if any;
(F) The executed UCC-1 financing statement with evidence of
recording thereon; and
(G) Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee
with
evidence of recording thereon (or in a form suitable for
recordation).
provided, however, that on the Closing Date, with respect to item
(iii), the
Depositor has delivered to the Trustee a copy of such Assignment of
Mortgage in
blank and has caused the Servicer to retain the completed
Assignment of Mortgage
for recording as described below, unless such Mortgage has been
recorded in the
name of MERS or its designee. In addition, if the Depositor is
unable to deliver
or cause the delivery of any original Mortgage Note due to the loss
of such
original Mortgage Note, the Depositor may deliver a copy of such
Mortgage Note,
together with a lost note affidavit, and shall thereby be deemed to
have
satisfied the document delivery requirements of this Section
2.01(b).
If in connection with any Mortgage Loans, the Depositor cannot
deliver (A) the Mortgage, (B) all interim recorded assignments, (C)
all
assumption, modification, consolidation or extension agreements, if
any, or (D)
the lender's title policy (together with all riders thereto)
satisfying the
requirements of clause (ii), (iii), (iv) or (v) above,
respectively,
concurrently with the execution and delivery hereof because such
document or
documents have not been returned from the applicable public
recording office in
the case of clause (ii), (iii) or (iv) above, or because the title
policy has
not been delivered to either the Servicer or the Depositor by the
applicable
title insurer in the case of clause (v) above, the Depositor shall
promptly
deliver or cause to be delivered to the Trustee or the Custodian on
behalf of
the Trustee, in the case of clause (ii), (iii) or (iv) above, such
Mortgage,
such interim assignment or such assumption, modification,
consolidation or
extension agreement, as the case may be, with evidence of recording
indicated
thereon upon receipt thereof from the public recording office, but
in no event
shall any such delivery of any such documents or instruments be
made later than
one year following the Closing Date, unless, in the case of clause
(ii), (iii)
or (iv) above, there has been a continuing delay at the applicable
recording
office or, in the case of clause (v), there has been a continuing
delay at the
applicable insurer and the Depositor has delivered the Officer's
Certificate to
such effect to the Trustee. The Depositor shall forward or cause to
be forwarded
to the Trustee (1) from time to time additional original documents
evidencing an
assumption or modification of a Mortgage Loan and (2) any other
documents
required to be delivered by the Depositor or the Servicer to the
Trustee or the
Custodian on the Trustee's behalf. In the event that the original
Mortgage is
not delivered and in connection with the payment in full of the
related Mortgage
Loan the public recording office requires the presentation of a
"lost
instruments affidavit and indemnity" or any equivalent document,
because only a
copy of the Mortgage can be delivered with the instrument of
satisfaction or
reconveyance, the Servicer shall prepare, execute and deliver or
cause to be
prepared, executed and delivered, on behalf of the Trust, such a
document to the
public recording office.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within 30 days thereafter, the
Servicer shall
(except for any Mortgage which has been recorded in the name of
MERS or its
designee) (I) cause each Assignment of Mortgage to be in proper
form for
recording in the appropriate public office for real property
records within 30
days of the Closing Date and (II) at the Depositor's expense, cause
to be
delivered for recording in the appropriate public office for real
property
records the Assignments of the Mortgages to the Trustee, except
that, with
respect to any Assignment of a Mortgage as to which the Servicer
has not
received the information required to prepare such assignment in
recordable form,
the Servicer's obligation to do so and to deliver the same for such
recording
shall be as soon as practicable after receipt of such information
and in any
event within 30 days after the receipt thereof and, no recording of
an
Assignment of Mortgage will be required in a state if either (i)
the Depositor
furnishes to the Trustee an unqualified Opinion of Counsel
reasonably acceptable
to the Trustee to the effect that recordation of such assignment is
not
necessary under applicable state law to preserve the Trustee's
interest in the
related Mortgage Loan against the claim of any subsequent
transferee of such
Mortgage Loan or any successor to, or creditor of, the Depositor or
the
originator of such Mortgage Loan or (ii) the recordation of an
Assignment of
Mortgage in such state is not required by either Rating Agency in
order to
obtain the initial ratings on the Certificates on the Closing Date.
Set forth on
Exhibit L attached hereto is a list of all states where recordation
is required
by either Rating Agency to obtain the initial ratings of the
Certificates. The
Trustee may rely and shall be protected in relying upon the
information
contained in such Exhibit L.
In the case of Mortgage Loans that have been prepaid in full as
of
the Closing Date, the Depositor, in lieu of delivering the above
documents to
the Trustee, or the Custodian on the Trustee's behalf, will cause
the Servicer
to deposit in the Servicer Custodial Account the portion of such
payment that is
required to be deposited in the Servicer Custodial Account pursuant
to Section
3.08.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
Subject to the provisions of the following paragraph, the Trustee
declares that
it, or the Custodian as its agent, will hold the documents referred
to in
Section 2.01 and the other documents delivered to it constituting
the Mortgage
Files, and that it will hold such other assets as are included in
the Trust
Estate, in trust for the exclusive use and benefit of all present
and future
Certificateholders. Upon execution and delivery of this document,
the Trustee
shall deliver or cause the Custodian to deliver to the Depositor,
the Trustee
and the Servicer a certification in the form of Exhibit M hereto
(the "Initial
Certification") to the effect that, except as may be specified in a
list of
exceptions attached thereto, it has received the original Mortgage
Note relating
to each of the Mortgage Loans listed on the Mortgage Loan
Schedule.
Within 90 days after the execution and delivery of this
Agreement,
the Trustee shall review, or cause the Custodian to review, the
Mortgage Files
in its possession, and shall deliver to the Depositor, the Trustee
and the
Servicer a certification in the form of Exhibit N hereto (the
("Final
Certification") to the effect that, as to each Mortgage Loan listed
in the
Mortgage Loan Schedule, except as may be specified in a list of
exceptions
attached to such Final Certification, such Mortgage File contains
all of the
items required to be delivered pursuant to Section 2.01(b).
If, in the course of such review, the Trustee or the Custodian
finds
any document constituting a part of a Mortgage File which does not
meet the
requirements of Section 2.01 or is omitted from such Mortgage File,
the Trustee
shall promptly so notify the Servicer and the Depositor, or shall
cause the
Custodian to promptly so notify the Servicer and the Depositor. In
performing
any such review, the Trustee or the Custodian may conclusively rely
on the
purported genuineness of any such document and any signature
thereon. It is
understood that the scope of the Trustee's or the Custodian's
review of the
Mortgage Files is limited solely to confirming that the documents
listed in
Section 2.01 have been received and further confirming that any and
all
documents delivered pursuant to Section 2.01 appear on their face
to have been
executed and relate to the Mortgage Loans identified in the
Mortgage Loan
Schedule based solely upon the review of items (i) and (xi) in the
definition of
Mortgage Loan Schedule. Neither the Trustee nor the Custodian shall
have any
responsibility for determining whether any document is valid and
binding,
whether the text of any assignment or endorsement is in proper or
recordable
form, whether any document has been recorded in accordance with the
requirements
of any applicable jurisdiction, or whether a blanket assignment is
permitted in
any applicable jurisdiction. The Depositor hereby covenants and
agrees that it
will promptly correct or cure such defect within 90 days from the
date it was so
notified of such defect and, if the Depositor does not correct or
cure such
defect within such period, the Depositor will either (a) substitute
for the
related Mortgage Loan a Substitute Mortgage Loan, which
substitution shall be
accomplished in the manner and subject to the conditions set forth
below or (b)
purchase such Mortgage Loan from the Trustee at the Repurchase
Price for such
Mortgage Loan; provided, however, that in no event shall such a
substitution
occur more than two years from the Closing Date; provided, further,
that such
substitution or repurchase shall occur within 90 days of when such
defect was
discovered if such defect will cause the Mortgage Loan not to be a
"qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code.
With respect to each Substitute Mortgage Loan the Depositor
shall
deliver to the Trustee, for the benefit of the Certificateholders,
the Mortgage
Note, the Mortgage, the related Assignment of Mortgage (except for
any Mortgage
which has been recorded in the name of MERS or its designee), and
such other
documents and agreements as are otherwise required by Section 2.01,
with the
Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No
substitution is permitted to be made in any calendar month after
the
Determination Date for such month. Monthly Payments due with
respect to any such
Substitute Mortgage Loan in the month of substitution shall not be
part of the
Trust Estate and will be retained by the Depositor. For the month
of
substitution, distributions to Certificateholders will include the
Monthly
Payment due for such month on any Defective Mortgage Loan for which
the
Depositor has substituted a Substitute Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule for the
benefit
of the Certificateholders to reflect the removal of each Mortgage
Loan that has
become a Defective Mortgage Loan and the substitution of the
Substitute Mortgage
Loan or Loans and the Servicer shall deliver the amended Mortgage
Loan Schedule
to the Trustee and the Custodian. Upon such substitution, each
Substitute
Mortgage Loan shall be subject to the terms of this Agreement in
all respects,
and the Depositor shall be deemed to have made to the Trustee with
respect to
such Substitute Mortgage Loan, as of the date of substitution,
the
representations and warranties made pursuant to Section 2.04. Upon
any such
substitution and the deposit to the Servicer Custodial Account of
any required
Substitution Adjustment Amount (as described in the next paragraph)
and receipt
of a Request for Release, the Trustee shall release, or shall
direct the
Custodian to release, the Mortgage File relating to such Defective
Mortgage Loan
to the Depositor and shall execute and deliver at the Depositor's
direction such
instruments of transfer or assignment prepared by the Depositor, in
each case
without recourse, as shall be necessary to vest title in the
Depositor, or its
designee, to the Trustee's interest in any Defective Mortgage Loan
substituted
for pursuant to this Section 2.02.
For any month in which
the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Defective Mortgage Loans,
the amount
(if any) by which the aggregate principal balance of all such
Substitute
Mortgage Loans in a Loan Group as of the date of substitution is
less than the
aggregate Stated Principal Balance of all such Defective Mortgage
Loans in such
Loan Group (after application of the principal portion of the
Monthly Payments
due in the month of substitution) (the "Substitution Adjustment
Amount" for such
Loan Group) plus an amount equal to the aggregate of any
unreimbursed Advances
with respect to such Defective Mortgage Loans shall be deposited
into the
Servicer Custodial Account by the Depositor on or before the
Remittance Date for
the Distribution Date in the month succeeding the calendar month
during which
the related Mortgage Loan is required to be purchased or replaced
hereunder.
The Trustee shall retain or shall cause the Custodian to retain
possession and custody of each Mortgage File in accordance with and
subject to
the terms and conditions set forth herein. The Servicer shall
promptly deliver
to the Trustee, upon the execution or, in the case of documents
requiring
recording, receipt thereof, the originals of such other documents
or instruments
constituting the Mortgage File as come into the Servicer's
possession from time
to time.
It is understood and agreed that the obligation of the Depositor
to
substitute for or to purchase any Mortgage Loan which does not meet
the
requirements of Section 2.01 shall constitute the sole remedy
respecting such
defect available to the Trustee and any Certificateholder against
the Depositor.
The Trustee or the Custodian, on behalf of the Trustee, shall
be
under no duty or obligation (i) to inspect, review or examine any
such
documents, instruments, certificates or other papers to determine
that they are
genuine, enforceable, or appropriate for the represented purpose or
that they
are other than what they purport to be on their face or (ii) to
determine
whether any Mortgage File should include any of the documents
specified in
Section 2.01(b)(iv), (vi), (vii), (viii) and (ix). In connection
with making the
certifications required hereunder, to the extent a title search or
opinion of
counsel has been provided in lieu of a title policy for any
Mortgage Loan, the
Trustee shall only be responsible for confirming that a title
search or opinion
of counsel has been provided for such Mortgage Loan and shall not
be deemed to
have certified that the content of such title search or opinion of
counsel is
sufficient to meet the requirements of Section 2.01(b)(v).
Section 2.03 Representations, Warranties and Covenants of the
Servicer. The Servicer hereby makes the following representations
and warranties
to the Depositor and the Trustee, as of the Closing Date:
(i) The Servicer is a national banking association duly
organized,
validly
existing, and in good standing under the federal laws of the
United
States of America and has all licenses necessary to carry on
its
business
as now being conducted and is licensed, qualified and in good
standing
in each of the states where a Mortgaged Property is located if
the laws
of such state require licensing or qualification in order to
conduct
business of the type conducted by the Servicer. The Servicer
has
power and
authority to execute and deliver this Agreement and to perform
in
accordance herewith; the execution, delivery and performance of
this
Agreement
(including all instruments of transfer to be delivered pursuant
to this
Agreement) by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly
authorized.
This
Agreement, assuming due authorization, execution and delivery by
the
other
parties hereto, evidences the valid, binding and enforceable
obligation
of the Servicer, subject to applicable law except as
enforceability may be limited by (A) bankruptcy, insolvency,
liquidation,
receivership, moratorium, reorganization or other similar laws
affecting
the
enforcement of creditors' rights generally or creditors of
national
banks and
(B) general principles of equity, whether enforcement is sought
in a
proceeding in equity or at law. All requisite corporate action
has
been taken
by the Servicer to make this Agreement valid and binding upon
the
Servicer in accordance with its terms.
(ii) No consent, approval, authorization or order is required
for
the
transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory
authority
having
jurisdiction over the Servicer is required or, if required,
such
consent,
approval, authorization or order has been or will, prior to the
Closing
Date, be obtained.
(iii) The consummation of the transactions contemplated by this
Agreement
are in the ordinary course of business of the Servicer and will
not result
in the breach of any term or provision of the charter or
by-laws of
the Servicer or result in the breach of any term or provision
of, or
conflict with or constitute a default under or result in the
acceleration of any obligation under, any agreement, indenture or
loan or
credit
agreement or other instrument to which the Servicer or its
property
is
subject, or result in the violation of any law, rule,
regulation,
order,
judgment or decree to which the Servicer or its property is
subject.
(iv) There is no action, suit, proceeding or investigation
pending
or, to the
best knowledge of the Servicer, threatened against the Servicer
which,
either individually or in the aggregate, would result in any
material
adverse change in the business, operations, financial
condition,
properties
or assets of the Servicer, or in any material impairment of the
right or
ability of the Servicer to carry on its business substantially
as
now
conducted or which would draw into question the validity of
this
Agreement
or the Mortgage Loans or of any action taken or to be taken in
connection
with the obligations of the Servicer contemplated herein, or
which
would materially impair the ability of the Servicer to perform
under
the terms
of this Agreement.
(v) The Servicer has fully furnished, and shall continue to
fully
furnish
for so long as it is servicing the Group 1 and Group 2 Mortgage
Loans
hereunder, in accordance with the Fair Credit Reporting Act and
its
implementing regulations, accurate and complete information on the
related
Mortgagor
credit files to Equifax, Experian and Trans Union Credit
Information Company on a monthly basis.
The representations and warranties made pursuant to this
Section
2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for
the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor as
to
the Mortgage Loans. The Depositor hereby represents and warrants to
the Trustee
with respect to the Mortgage Loans or each Mortgage Loan, as the
case may be, as
of the date hereof or such other date set forth herein that as of
the Closing
Date:
(i) The information set forth in the Mortgage Loan Schedule is
true
and
correct in all material respects.
(ii) There are no delinquent taxes, ground rents, governmental
assessments, insurance premiums, leasehold payments, including
assessments
payable in
future installments or other outstanding charges affecting the
lien
priority of the related Mortgaged Property.
(iii) The terms of the Mortgage Note and the Mortgage have not
been
impaired,
waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office
if
necessary
to maintain the lien priority of the Mortgage, and which have
been
delivered to the Trustee; the substance of any such waiver,
alteration
or modification has been approved by the insurer under the
Primary
Insurance Policy, if any, the title insurer, to the extent
required by the
related policy, and is reflected on the Mortgage Loan
Schedule.
No instrument of waiver, alteration or modification has been
executed,
and no Mortgagor has been released, in whole or in part, except
in
connection with an assumption agreement approved by the insurer
under
the
Primary Insurance Policy, if any, the title insurer, to the
extent
required
by the policy, and which assumption agreement has been
delivered
to the
Trustee.
(iv) The Mortgage Note and the Mortgage are not subject to any
right
of
rescission, set-off, counterclaim or defense, including the defense
of
usury, nor
will the operation of any of the terms of the Mortgage Note and
the
Mortgage, or the exercise of any right thereunder, render either
the
Mortgage
Note or the Mortgage unenforceable, in whole or in part, or
subject to
any right of rescission, set-off, counterclaim or defense,
including
the defense of usury and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto.
(v) All buildings upon the Mortgaged Property are insured by an
insurer
generally acceptable to prudent mortgage lending institutions
against
loss by fire, hazards of extended coverage and such other
hazards
as are
customary in the area the Mortgaged Property is located,
pursuant
to
insurance policies conforming to the requirements of Customary
Servicing
Procedures and this Agreement. All such insurance policies
contain a
standard mortgagee clause naming the originator of the Mortgage
Loan, its
successors and assigns as mortgagee and all premiums thereon
have been
paid. If the Mortgaged Property is in an area identified on a
flood
hazard map or flood insurance rate map issued by the Federal
Emergency
Management Agency as having special flood hazards (and such
flood
insurance has been made available), a flood insurance policy
meeting
the
requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the
requirements of
FNMA or
FHLMC. The Mortgage obligates the Mortgagor thereunder to
maintain
all such
insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage
to
maintain
such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(vi) Any and all requirements of any federal, state or local
law
including,
without limitation, usury, truth in lending, real estate
settlement
procedures, consumer credit protections, all applicable
predatory
and abusive lending laws, equal credit opportunity or
disclosure
laws
applicable to the origination and servicing of Mortgage Loan
have
been
complied with.
(vii) The Mortgage has not been satisfied, canceled, subordinated
or
rescinded,
in whole or in part (other than as to Principal Prepayments in
full which
may have been received prior to the Closing Date), and the
Mortgaged
Property has not been released from the lien of the Mortgage,
in
whole or
in part, nor has any instrument been executed that would effect
any such
satisfaction, cancellation, subordination, rescission or
release.
(viii)The Mortgage is a valid, existing and enforceable first
lien
on the
Mortgaged Property, including all improvements on the Mortgaged
Property
subject only to (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions
and
restrictions, rights of way, easements and other matters of the
public
record as
of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's
title
insurance
policy delivered to the originator of the Mortgage Loan and
which do
not adversely affect the Appraised Value of the Mortgaged
Property,
(C) if the Mortgaged Property consists of Co-op Shares, any
lien
for
amounts due to the cooperative housing corporation for unpaid
assessments or charges or any lien of any assignment of rents
or
maintenance expenses secured by the real property owned by the
cooperative
housing
corporation, and (D) other matters to which like properties are
commonly
subject which do not materially interfere with the benefits of
the
security intended to be provided by the Mortgage or the use,
enjoyment,
value or marketability of the related Mortgaged Property. Any
security
agreement, chattel mortgage or equivalent document related to
and
delivered
in connection with the Mortgage Loan establishes and creates a
valid,
existing and enforceable first lien and first priority security
interest
on the property described therein and the Depositor has the
full
right to
sell and assign the same to the Trustee.
(ix) The Mortgage Note and the related Mortgage are genuine and
each
is the
legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as enforceability
may be
limited by
(A) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the
enforcement
of the
rights of creditors and (B) general principles of equity,
whether
enforcement is sought in a proceeding in equity or at law.
(x) All parties to the Mortgage Note and the Mortgage had legal
capacity
to enter into the Mortgage Loan and to execute and deliver the
Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage
have been
duly and properly executed by such parties.
(xi) The proceeds of the Mortgage Loan have been fully disbursed
to
or for the
account of the Mortgagor and there is no obligation for the
Mortgagee
to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site
improvements and
as to
disbursements of any escrow funds therefor have been complied
with.
All costs,
fees and expenses incurred in making or closing the Mortgage
Loan and
the recording of the Mortgage have been paid, and the Mortgagor
is not
entitled to any refund of any amounts paid or due to the
Mortgagee
pursuant
to the Mortgage Note or Mortgage.
(xii) To the best of the Depositor's knowledge, all parties
which
have had
any interest in the Mortgage Loan, whether as mortgagee,
assignee,
pledgee or otherwise, are (or, during the period in which they
held and
disposed of such interest, were) in compliance with any and all
applicable
"doing business" and licensing requirements of the laws of the
state
wherein the Mortgaged Property is located.
(xiii) (A) the Mortgage Loan is covered by an ALTA lender's
title
insurance
policy, acceptable to FNMA or FHLMC, issued by a title insurer
acceptable
to FNMA or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring
(subject to
the
exceptions contained in (viii)(A) and (B) above) the Seller,
its
successors
and assigns as to the first priority lien of the Mortgage in
the
original principal amount of the Mortgage Loan, (B) a title search
has
been done
showing no lien (other than the exceptions contained in
(viii)(A)
and (B) above) on the related Mortgaged Property senior to the
lien of
the Mortgage or (C) in the case of any Mortgage Loan secured by
a
Mortgaged
Property located in a jurisdiction where such policies are
generally
not available, an opinion of counsel of the type customarily
rendered
in such jurisdiction in lieu of title insurance is instead
received.
For each Mortgage Loan covered by a title insurance policy (x)
the
Depositor is the sole insured of such lender's title insurance
policy,
and such
lender's title insurance policy is in full force and effect and
will be in
full force and effect upon the consummation of the transactions
contemplated by this Agreement and (y) no claims have been made
under such
lender's title
insurance policy, and the Depositor has not done, by act or
omission,
anything which would impair the coverage of such lender's title
insurance
policy.
(xiv) There is no default, breach, violation or event of
acceleration existing
under the Mortgage or the Mortgage Note and no event
which,
with the passage of time or with notice and the expiration of
any
grace or
cure period, would constitute a default, breach, violation or
event of
acceleration, and the Seller has not waived any default,
breach,
violation
or event of acceleration.
(xv) As of the date of origination of the Mortgage Loan, there
had
been no
mechanics' or similar liens or claims filed for work, labor or
material
(and no rights are outstanding that under law could give rise
to
such lien)
affecting the relating Mortgaged Property which are or may be
liens
prior to, or equal or coordinate with, the lien of the related
Mortgage.
(xvi) All improvements which were considered in determining the
Appraised
Value of the related Mortgaged Property lay wholly within the
boundaries
and building restriction lines of the Mortgaged Property, and
no
improvements on adjoining properties encroach upon the
Mortgaged
Property.
(xvii) The Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union,
insurance
company,
or similar institution which is supervised and examined by a
federal or
state authority, or by a mortgagee approved by the Secretary of
Housing
and Urban Development pursuant to sections 203 and 211 of the
National
Housing Act.
(xviii) Principal payments on the Mortgage Loan commenced no
more
than sixty
days after the proceeds of the Mortgaged Loan were disbursed.
The
Mortgage Loans are 12 to 30-year fixed rate mortgage loans having
an
original
term to maturity of not more than 30 years, with interest
payable
in arrears
on the first day of the month. Each Mortgage Note requires a
monthly
payment which is sufficient to fully amortize the original
principal
balance over the original term thereof and to pay interest at
the related
Mortgage Interest Rate. The Mortgage Note does not permit
negative
amortization.
(xix) There is no proceeding pending or, to the Depositor's
knowledge,
threatened for the total or partial condemnation of the
Mortgaged
Property. The Mortgaged Property is in good repair and is
undamaged
by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or
other casualty, so as to affect adversely the value of the
Mortgaged
Property as security for the Mortgage Loan or the use for which
the
premises were intended.
(xx) The Mortgage and related Mortgage Note contain customary
and
enforceable provisions such as to render the rights and remedies of
the
holder
thereof adequate for the realization against the Mortgaged
Property
of the
benefits of the security provided thereby, including (A) in the
case of a
Mortgage designated as a deed of trust, by trustee's sale, and
(B)
otherwise by judicial foreclosure. To the best of the
Depositor's
knowledge,
following the date of origination of the Mortgage Loan, the
Mortgaged
Property has not been subject to any bankruptcy proceeding or
foreclosure proceeding and the Mortgagor has not filed for
protection
under
applicable bankruptcy laws. There is no homestead or other
exemption
or right
available to the Mortgagor or any other person which would
interfere
with the right to sell the Mortgaged Property at a trustee's
sale or
the right to foreclose the Mortgage.
(xxi) Other than any Borrowers Protection Plan(R) addendum to
the
Mortgage
Note of a BPP Mortgage Loan, the Mortgage Note and Mortgage are
on forms
acceptable to FNMA or FHLMC.
(xxii) The Mortgage Note is not and has not been secured by any
collateral
except the lien of the corresponding Mortgage on the Mortgaged
Property
and the security interest of any applicable security agreement
or
chattel
mortgage referred to in (viii) above.
(xxiii) Each appraisal of the related Mortgaged Property, is in
a
form
acceptable to FNMA or FHLMC and such appraisal complies with
the
requirements of FIRREA, and was made and signed, prior to the
approval of
the Mortgage
Loan application, by a Qualified Appraiser.
(xxiv) In the event the Mortgage constitutes a deed of trust, a
trustee,
duly qualified under applicable law to serve as such, has been
properly
designated and currently so serves, and no fees or expenses are
or will
become payable by the Trustee to the trustee under the deed of
trust,
except in connection with a trustee's sale after default by the
Mortgagor.
(xxv) No Mortgage Loan is a graduated payment mortgage loan, no
Mortgage
Loan has a shared appreciation or other contingent interest
feature,
and no Mortgage Loan contains any "buydown" provision.
(xxvi) The Mortgagor has received all disclosure materials
required
by
applicable law with respect to the making of mortgage loans of the
same
type as
the Mortgage Loan and rescission materials required by
applicable
law if the
Mortgage Loan is a Refinance Mortgage Loan.
(xxvii) Each Primary Insurance Policy to which any Mortgage Loan
is
subject
will be issued by an insurer acceptable to FNMA or FHLMC, which
insures
that portion of the Mortgage Loan in excess of the portion of
the
Appraised
Value of the Mortgaged Property required by FNMA. All
provisions
of such
Primary Insurance Policy have been and are being complied with,
such
policy is in full force and effect, and all premiums due
thereunder
have been
paid. Any Mortgage subject to any such Primary Insurance Policy
obligates
the Mortgagor thereunder to maintain such insurance and to pay
all
premiums and charges in connection therewith at least until
Loan-to-Value Ratio of such Mortgage Loan is reduced to less than
80%. The
Mortgage
Interest Rate for the Mortgage Loan does not include any such
insurance
premium.
(xxviii) To the best of the Depositor's knowledge as of the date
of
origination of the Mortgage Loan, (A) the Mortgaged Property is
lawfully
occupied
under applicable law, (B) all inspections, licenses and
certificates required to be made or issued with respect to all
occupied
portions
of the Mortgaged Property and, with respect to the use and
occupancy
of the same, including but not limited to certificates of
occupancy,
have been made or obtained from the appropriate authorities and
(C) no
improvement located on or part of the Mortgaged Property is in
violation
of any zoning law or regulation.
(xxix) The Assignment of Mortgage (except with respect to any
Mortgage
that has been recorded in the name of MERS or its designee) is
in
recordable
form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(xxx) All payments required to be made prior to the Cut-off Date
for
such
Mortgage Loan under the terms of the Mortgage Note have been made
and
no
Mortgage Loan has been more than 30 days delinquent more than once
in
the twelve
month period immediately prior to the Cut-off Date.
(xxxi) With respect to each Mortgage Loan, the Depositor or
Servicer
is in
possession of a complete Mortgage File except for the documents
which have
been delivered to the Trustee or which have been submitted for
recording
and not yet returned.
(xxxii) Immediately prior to the transfer and assignment
contemplated herein, the Depositor was the sole owner and holder of
the
Mortgage
Loans. The Mortgage Loans were not assigned or pledged by the
Depositor
and the Depositor had good and marketable title thereto, and
the
Depositor
had full right to transfer and sell the Mortgage Loans to the
Trustee
free and clear of any encumbrance, participation interest,
lien,
equity,
pledge, claim or security interest and had full right and
authority
subject to no interest or participation in, or agreement with
any other
party to sell or otherwise transfer the Mortgage Loans.
(xxxiii) Any future advances made prior to the Cut-off Date
have
been
consolidated with the outstanding principal amount secured by
the
Mortgage,
and the secured principal amount, as consolidated, bears a
single
interest rate and single repayment term. The lien of the
Mortgage
securing
the consolidated principal amount is expressly insured as
having
first lien
priority by a title insurance policy, an endorsement to the
policy
insuring the mortgagee's consolidated interest or by other
title
evidence
acceptable to FNMA and FHLMC. The consolidated principal amount
does not
exceed the original principal amount of the Mortgage Loan.
(xxxiv) The Mortgage Loan was underwritten in accordance with
the
applicable
Underwriting Guidelines in effect at the time of origination
with
exceptions thereto exercised in a reasonable manner.
(xxxv) If the Mortgage Loan is secured by a long-term
residential
lease, (1)
the lessor under the lease holds a fee simple interest in the
land; (2)
the terms of such lease expressly permit the mortgaging of the
leasehold
estate, the assignment of the lease without the lessor's
consent
and the
acquisition by the holder of the Mortgage of the rights of the
lessee
upon foreclosure or assignment in lieu of foreclosure or
provide
the holder
of the Mortgage with substantially similar protections; (3) the
terms of
such lease do not (a) allow the termination thereof upon the
lessee's
default without the holder of the Mortgage being entitled to
receive
written notice of, and opportunity to cure, such default, (b)
allow the
termination of the lease in the event of damage or destruction
as long as
the Mortgage is in existence, (c) prohibit the holder of the
Mortgage
from being insured (or receiving proceeds of insurance) under
the
hazard
insurance policy or policies relating to the Mortgaged Property
or
(d) permit
any increase in the rent other than pre-established increases
set forth
in the lease; (4) the original term of such lease in not less
than 15
years; (5) the term of such lease does not terminate earlier
than
five years
after the maturity date of the Mortgage Note; and (6) the
Mortgaged
Property is located in a jurisdiction in which the use of
leasehold
estates in transferring ownership in residential properties is
a
widely
accepted practice.
(xxxvi) The Mortgaged Property is located in the state identified
in
the
Mortgage Loan Schedule and consists of a parcel of real property
with
a detached
single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit, or an
individual
unit in a
planned unit development, or, in the case of Mortgage Loans
secured by
Co-op Shares, leases or occupancy agreements; provided,
however,
that any condominium project or planned unit development
generally
conforms with the applicable Underwriting Guidelines regarding
such
dwellings, and no residence or dwelling is a mobile home or a
manufactured dwelling.
(xxxvii) The Depositor used no adverse selection procedures in
selecting
the Mortgage Loan for inclusion in the Trust Estate.
(xxxviii) Each Mortgage Loan is a "qualified mortgage" within
the
meaning of
Section 860G(a)(3) of the Code.
(xxxix) With respect to each Mortgage where a lost note
affidavit
has been
delivered to the Trustee in place of the related Mortgage Note,
the
related Mortgage Note is no longer in existence.
(xl) No Mortgage Loan is a "high cost" loan as defined under
any
federal,
state or local law applicable to such Mortgage Loan at the time
of its
origination.
(xli) No Group 1 or Group 2 Mortgage Loan is subject to the
provisions
of the Home Ownership and Equity Protection Act of 1994, as
amended.
(xlii) No Group 1 or
Group 2 Mortgage Loan is a "high cost home,"
"covered"
(excluding home loans defined as "covered home loans" pursuant
to clause
(1) of the definition of that term in the New Jersey Home
Ownership
Security Act of 2002), "high risk home" or "predatory" loan as
defined
under any applicable state, federal or local law (or a
similarly
classified
loan using different terminology under a law imposing
heightened
regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points
and/or
fees).
(xliii) None of the proceeds of any Group 1 or Group 2 Mortgage
Loan
were used
to finance single-premium credit life insurance policies.
(xliv) No Group 1 or Group 2 Mortgage Loan provides for the
payment
of a
prepayment premium beyond the five year term following the
origination of such Mortgage Loan.
(xlv) No Group 1 or Group 2 Mortgage Loan originated on or
after
October 1,
2004 requires the borrower to submit to arbitration to resolve
any
dispute arising out of or relating in any way to the mortgage
loan
transaction.
(xlvi) As of the date of origination, no Group 1 or Group 2
Mortgage
Loan had a
principal balance in excess of FHLMC's dollar amount limits for
conforming
one- to four-family mortgage loans.
Notwithstanding the foregoing, no representations or warranties
are
made by the Depositor as to the environmental condition of any
Mortgaged
Property; the absence, presence or effect of hazardous wastes or
hazardous
substances on any Mortgaged Property; any casualty resulting from
the presence
or effect of hazardous wastes or hazardous substances on, near or
emanating from
any Mortgaged Property; the impact on Certificateholders of any
environmental
condition or presence of any hazardous substance on or near any
Mortgaged
Property; or the compliance of any Mortgaged Property with any
environmental
laws, nor is any agent, Person or entity otherwise affiliated with
the Depositor
authorized or able to make any such representation, warranty or
assumption of
liability relative to any Mortgaged Property. In addition, no
representations or
warranties are made by the Depositor with respect to the absence or
effect of
fraud in the origination of any Mortgage Loan.
It is understood and agreed that the representations and
warranties
set forth in this Section 2.04 shall survive delivery of the
respective Mortgage
Files to the Trustee or the Custodian and shall inure to the
benefit of the
Trustee, notwithstanding any restrictive or qualified endorsement
or assignment.
Upon discovery by either the Depositor, the Servicer, the Trustee
or
the Custodian that any of the representations and warranties set
forth in this
Section 2.04 is not accurate (referred to herein as a "breach") and
that such
breach (in the case of the representations and warranties set forth
in clauses
(i) through (xl) of this Section 2.04) materially and adversely
affects the
interests of the Certificateholders in the related Mortgage Loan,
the party
discovering such breach shall give prompt written notice to the
other parties
(any Custodian being so obligated under a Custodial Agreement);
provided that
any such breach that causes the Mortgage Loan not to be a
"qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code shall be
deemed to
materially and adversely affect the interests of the
Certificateholders. Within
90 days of its discovery or its receipt of notice of any such
breach, the
Depositor shall cure such breach in all material respects or shall
either (i)
repurchase the Mortgage Loan or any property acquired in respect
thereof from
the Trustee at a price equal to the Repurchase Price or (ii) if
within two years
of the Closing Date, substitute for such Mortgage Loan in the
manner described
in Section 2.02; provided that if the breach would cause the
Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3)
of the Code,
any such repurchase or substitution must occur within 90 days from
the date the
breach was discovered. In addition to the foregoing, if a breach of
the
representation set forth in clause (vi) of this Section 2.04 occurs
as a result
of a violation of an applicable predatory or abusive lending law,
the Depositor
shall reimburse the Trust for all costs or damages incurred by the
Trust as a
result of the violation of such law (such amount, the
"Reimbursement Amount").
The Repurchase Price of any repurchase described in this paragraph,
the
Substitution Adjustment Amount, if any, and any Reimbursement
Amount shall be
deposited in the Servicer Custodial Account. It is understood and
agreed that,
except with respect to the second preceding sentence, the
obligation of the
Depositor to repurchase or substitute for any Mortgage Loan or
Mortgaged
Property as to which such a breach has occurred and is continuing
shall
constitute the sole remedy respecting such breach available to
Certificateholders, or to the Trustee on behalf of
Certificateholders, and such
obligation shall survive until termination of the Trust
hereunder.
Section 2.05 Designation of Interests in the REMICs. The
Depositor
hereby designates the Classes of Senior Certificates (other than
the Class
CB-IO, Class 30-PO, Class 1-CB-R and Class 1-CB-LR Certificates)
and the Classes
of Class B Certificates and each Component as "regular interests"
and the Class
1-CB-R Certificate as the single class of "residual interest" in
the Upper-Tier
REMIC for the purposes of Code Sections 860G(a)(1) and 860G(a)(2),
respectively.
The Depositor hereby further designates the Uncertificated
Lower-Tier Interests
as classes of "regular interests" and the Class 1-CB-LR Certificate
as the
single class of "residual interest" in the Lower-Tier REMIC for the
purposes of
Code Sections 860G(a)(1) and 860G(a)(2), respectively.
Section 2.06 Designation of Start-up Day. The Closing Date is
hereby
designated as the "start-up day" of each of the Upper-Tier REMIC
and Lower-Tier
REMIC within the meaning of Section 860G(a)(9) of the Code.
Section 2.07 REMIC Certificate Maturity Date. Solely for purposes
of
satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations,
the "latest
possible maturity date" of the regular interests in the Upper-Tier
REMIC and
Lower-Tier REMIC is January 25, 2035.
Section 2.08 Execution and Delivery of Certificates. The Trustee
(i)
acknowledges the issuance of and hereby declares that it holds
the
Uncertificated Lower-Tier Interests on behalf of the Upper-Tier
REMIC and the
Certificateholders and (ii) has executed and delivered to or upon
the order of
the Depositor, in exchange for the Mortgage Loans and
Uncertificated Lower-Tier
Interests, together with all other assets included in the
definition of "Trust
Estate," receipt of which is hereby acknowledged, Certificates in
authorized
denominations which, together with the Uncertificated Lower-Tier
Interests,
evidence ownership of the entire Trust Estate.
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. For and on
behalf
of the Certificateholders, the Servicer shall service and
administer the
Mortgage Loans, all in accordance with the terms of this Agreement,
Customary
Servicing Procedures, applicable law and the terms of the Mortgage
Notes and
Mortgages. In connection with such servicing and administration,
the Servicer
shall have full power and authority, acting alone and/or through
Subservicers as
provided in Section 3.02, to do or cause to be done any and all
things that it
may deem necessary or desirable in connection with such servicing
and
administration including, but not limited to, the power and
authority, subject
to the terms hereof, (a) to execute and deliver, on behalf of
the
Certificateholders and the Trustee, customary consents or waivers
and other
instruments and documents, (b) to consent, with respect to the
Mortgage Loans it
services, to transfers of any Mortgaged Property and assumptions of
the Mortgage
Notes and related Mortgages (but only in the manner provided in
this Agreement),
(c) to collect any Insurance Proceeds and other Liquidation
Proceeds relating to
the Mortgage Loans it services, and (d) to effectuate foreclosure
or other
conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan
it services. The Servicer shall represent and protect the interests
of the Trust
in the same manner as it protects its own interests in mortgage
loans in its own
portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan and
shall not make or permit any modification, waiver or amendment of
any term of
any Mortgage Loan, except as provided pursuant to Section 3.21.
Without limiting
the generality of the foregoing, the Servicer, in its own name or
in the name of
any Subservicer or the Depositor and the Trustee, is hereby
authorized and
empowered by the Depositor and the Trustee, when the Servicer or
any
Subservicer, as the case may be, believes it appropriate in its
reasonable
judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the
Certificateholders or any of them, any and all instruments of
satisfaction or
cancellation, or of partial or full release or discharge, and all
other
comparable instruments, with respect to the Mortgage Loans it
services, and with
respect to the related Mortgaged Properties held for the benefit of
the
Certificateholders. The Servicer shall prepare and deliver to the
Depositor
and/or the Trustee such documents requiring execution and delivery
by either or
both of them as are necessary or appropriate to enable the Servicer
to service
and administer the Mortgage Loans it services to the extent that
the Servicer is
not permitted to execute and deliver such documents pursuant to the
preceding
sentence. Upon receipt of such documents, the Depositor and/or the
Trustee, upon
the direction of the Servicer, shall promptly execute such
documents and deliver
them to the Servicer.
In accordance with the standards of the preceding paragraph,
the
Servicer shall advance or cause to be advanced funds as necessary
for the
purpose of effecting the payment of taxes and assessments on the
Mortgaged
Properties relating to the Mortgage Loans it services, which
Servicing Advances
shall be reimbursable in the first instance from related
collections from the
Mortgagors pursuant to Section 3.09, and further as provided in
Section 3.11.
The costs incurred by the Servicer, if any, in effecting the timely
payments of
taxes and assessments on the Mortgaged Properties and related
insurance premiums
shall not, for the purpose of calculating monthly distributions to
the
Certificateholders, be added to the Stated Principal Balances of
the related
Mortgage Loans, notwithstanding that the terms of such Mortgage
Loans so permit.
The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Agreement) to the Trustee under
this Agreement
is intended by the parties to be that of an independent contractor
and not that
of a joint venturer, partner or agent.
Section 3.02 Subservicing; Enforcement of the Obligations of
Servicer. (a) The Servicer may arrange for the subservicing of any
Mortgage Loan
it services by a Subservicer pursuant to a Subservicing Agreement;
provided,
however, that such subservicing arrangement and the terms of the
related
Subservicing Agreement must provide for the servicing of such
Mortgage Loan in a
manner consistent with the servicing arrangements contemplated
hereunder.
Notwithstanding the provisions of any Subservicing Agreement, any
of the
provisions of this Agreement relating to agreements or arrangements
between the
Servicer and a Subservicer or reference to actions taken through a
Subservicer
or otherwise, the Servicer shall remain obligated and liable to the
Depositor,
the Trustee and the Certificateholders for the servicing and
administration of
the Mortgage Loans it services in accordance with the provisions of
this
Agreement without diminution of such obligation or liability by
virtue of such
Subservicing Agreements or arrangements or by virtue of
indemnification from the
Subservicer and to the same extent and under the same terms and
conditions as if
the Servicer alone were servicing and administering those Mortgage
Loans. All
actions of each Subservicer performed pursuant to the related
Subservicing
Agreement shall be performed as agent of the Servicer with the same
force and
effect as if performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed
to
have received any collections, recoveries or payments with respect
to the
Mortgage Loans it services that are received by a Subservicer
regardless of
whether such payments are remitted by the Subservicer to the
Servicer.
(c) As part of its servicing activities hereunder, the Servicer,
for
the benefit of the Trustee and the Certificateholders, shall use
its best
reasonable efforts to enforce the obligations of each Subservicer
engaged by the
Servicer under the related Subservicing Agreement, to the extent
that the
non-performance of any such obligation would have a material and
adverse effect
on a Mortgage Loan. Such enforcement, including, without
limitation, the legal
prosecution of claims, termination of Subservicing Agreements and
the pursuit of
other appropriate remedies, shall be in such form and carried out
to such an
extent and at such time as the Servicer, in its good faith business
judgment,
would require were it the owner of the related Mortgage Loans. The
Servicer
shall pay the costs of such enforcement at its own expense, and
shall be
reimbursed therefor only (i) from a general recovery resulting from
such
enforcement to the extent, if any, that such recovery exceeds all
amounts due in
respect of the related Mortgage Loan or (ii) from a specific
recovery of costs,
expenses or attorneys fees against the party against whom such
enforcement is
directed.
(d) Any Subservicing Agreement entered into by the Servicer
shall
provide that it may be assumed or terminated by the Trustee, if the
Trustee has
assumed the duties of the Servicer, or any successor Servicer, at
the Trustee's
or successor Servicer's option, as applicable, without cost or
obligation to the
assuming or terminating party or the Trust Estate, upon the
assumption by such
party of the obligations of the Servicer pursuant to Section
8.05.
Section 3.03 Fidelity Bond; Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity
bond and an
errors and omissions insurance policy, with broad coverage on all
officers,
employees or other persons acting in any capacity requiring such
persons to
handle funds, money, documents or papers relating to the Mortgage
Loans it
services. These policies must insure the Servicer against losses
resulting from
dishonest or fraudulent acts committed by the Servicer's personnel,
any
employees of outside firms that provide data processing services
for the
Servicer, and temporary contract employees or student interns. Such
fidelity
bond shall also protect and insure the Servicer against losses in
connection
with the release or satisfaction of a Mortgage Loan without having
obtained
payment in full of the indebtedness secured thereby. No provision
of this
Section 3.03 requiring such fidelity bond and errors and omissions
insurance
shall diminish or relieve the Servicer from its duties and
obligations as set
forth in this Agreement. The minimum coverage under any such bond
and insurance
policy shall be at least equal to the corresponding amounts
required by FNMA in
the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers' &
Servicers' Guide,
as amended or restated from time to time, or in an amount as may be
permitted to
the Servicer by express waiver of FNMA or FHLMC.
Section 3.04 Access to Certain Documentation. The Servicer
shall
provide to the OTS and the FDIC and to comparable regulatory
authorities
supervising Holders of Subordinate Certificates and the examiners
and
supervisory agents of the OTS, the FDIC and such other authorities,
access to
the documentation required by applicable regulations of the OTS and
the FDIC
with respect to the Mortgage Loans. Such access shall be afforded
without
charge, but only upon reasonable and prior written request and
during normal
business hours at the offices designated by the Servicer. Nothing
in this
Section 3.04 shall limit the obligation of the Servicer to observe
any
applicable law and the failure of the Servicer to provide access as
provided in
this Section 3.04 as a result of such obligation shall not
constitute a breach
of this Section 3.04.
Section 3.05 Maintenance of Primary Insurance Policy; Claims;
Collections of BPP Mortgage Loan Payments. (a) With respect to each
Mortgage
Loan with a Loan-to-Value Ratio in excess of 80% or such other
Loan-to-Value
Ratio as may be required by law, the Servicer shall, without any
cost to the
Trust Estate, maintain or cause the Mortgagor to maintain in full
force and
effect a Primary Insurance Policy insuring that portion of the
Mortgage Loan in
excess of a percentage in conformity with FNMA requirements. The
Servicer shall
pay or shall cause the Mortgagor to pay the premium thereon on a
timely basis,
at least until the Loan-to-Value Ratio of such Mortgage Loan is
reduced to 80%
or such other Loan-to-Value Ratio as may be required by law. If
such Primary
Insurance Policy is terminated, the Servicer shall obtain from
another insurer a
comparable replacement policy, with a total coverage equal to the
remaining
coverage of such terminated Primary Insurance Policy. If the
insurer shall cease
to be an insurer acceptable to FNMA or FHLMC, the Servicer shall
notify the
Trustee in writing, it being understood that the Servicer shall not
have any
responsibility or liability for any failure to recover under the
Primary
Insurance Policy for such reason. If the Servicer determines that
recoveries
under the Primary Insurance Policy are jeopardized by the financial
condition of
the insurer, the Servicer shall obtain from another insurer which
meets the
requirements of this Section 3.05 a replacement insurance policy.
The Servicer
shall not take any action that would result in noncoverage under
any applicable
Primary Insurance Policy of any loss that, but for the actions of
the Servicer,
would have been covered thereunder. In connection with any
assumption or
substitution agreement entered into or to be entered into pursuant
to Section
3.13, the Servicer shall promptly notify the insurer under the
related Primary
Insurance Policy, if any, of such assumption or substitution of
liability in
accordance with the terms of such Primary Insurance Policy and
shall take all
actions which may be required by such insurer as a condition to the
continuation
of coverage under such Primary Insurance Policy. If such Primary
Insurance
Policy is terminated as a result of such assumption or substitution
of
liability, the Servicer shall obtain a replacement Primary
Insurance Policy as
provided above.
In connection with its activities as servicer, the Servicer
agrees
to prepare and present, on behalf of itself, the Trustee and
the
Certificateholders, claims to the insurer under any Primary
Insurance Policy in
a timely fashion in accordance with the terms of such Primary
Insurance Policy
and, in this regard, to take such action as shall be necessary to
permit
recovery under any Primary Insurance Policy respecting a defaulted
Mortgage
Loan. Pursuant to Section 3.09(a), any amounts collected by the
Servicer under
any Primary Insurance Policy shall be deposited in the related
Escrow Account,
subject to withdrawal pursuant to Section 3.09(b).
The Servicer will comply with all provisions of applicable state
and
federal law relating to the cancellation of, or collection of
premiums with
respect to, Primary Mortgage Insurance, including, but not limited
to, the
provisions of the Homeowners Protection Act of 1998, and all
regulations
promulgated thereunder, as amended from time to time.
(b) The Servicer shall take all actions necessary to collect,
on
behalf of the Trust, any BPP Mortgage Loan Payments required to be
made to the
Trust pursuant to the Mortgage Loan Purchase Agreement.
Section 3.06 Rights of the Depositor and the Trustee in Respect
of
the Servicer. The Depositor may, but is not obligated to, enforce
the
obligations of the Servicer hereunder and may, but is not obligated
to, perform,
or cause a designee to perform, any defaulted obligation of the
Servicer
hereunder and in connection with any such defaulted obligation to
exercise the
related rights of the Servicer hereunder; provided that the
Servicer shall not
be relieved of any of its obligations hereunder by virtue of such
performance by
the Depositor or its designee. Neither the Trustee nor the
Depositor shall have
any responsibility or liability for any action or failure to act by
the Servicer
nor shall the Trustee or the Depositor be obligated to supervise
the performance
of the Servicer hereunder or otherwise.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a
Subservicer
in its capacity as such shall be deemed to be between the
Subservicer and the
Servicer alone, and the Trustee and Certificateholders shall not be
deemed
parties thereto and shall have no claims, rights, obligations,
duties or
liabilities with respect to the Subservicer except as set forth in
Section 3.07.
The Servicer shall be solely liable for all fees owed by it to any
Subservicer,
irrespective of whether the Servicer's compensation pursuant to
this Agreement
is sufficient to pay such fees.
Section 3.07 Trustee to Act as Servicer. If the Servicer shall
for
any reason no longer be the Servicer hereunder (including by reason
of an Event
of Default), the Trustee shall within 90 days of such time, assume,
if it so
elects, or shall appoint a successor Servicer to assume, all of the
rights and
obligations of the Servicer hereunder arising thereafter (except
that the
Trustee shall not be (a) liable for losses of the Servicer pursuant
to Section
3.12 or any acts or omissions of the predecessor Servicer
hereunder, (b)
obligated to make Advances if it is prohibited from doing so by
applicable law
or (c) deemed to have made any representations and warranties of
the Servicer
hereunder). Any such assumption shall be subject to Sections 7.02
and 8.05. If
the Servicer shall for any reason no longer be the Servicer
(including by reason
of any Event of Default), the Trustee or the successor Servicer may
elect to
succeed to any rights and obligations of the Servicer under each
Subservicing
Agreement or may terminate each Subservicing Agreement. If it has
elected to
assume the Subservicing Agreement, the Trustee or the successor
Servicer shall
be deemed to have assumed all of the Servicer's interest therein
and to have
replaced the Servicer as a party to any Subservicing Agreement
entered into by
the Servicer as contemplated by Section 3.02 to the same extent as
if the
Subservicing Agreement had been assigned to the assuming party
except that the
Servicer shall not be relieved of any liability or obligations
under any such
Subservicing Agreement.
The Servicer that is no longer the Servicer hereunder shall,
upon
request of the Trustee, but at the expense of such predecessor
Servicer, deliver
to the assuming party all documents and records relating to each
Subservicing
Agreement or substitute servicing agreement and the Mortgage Loans
then being
serviced thereunder and an accounting of amounts collected or held
by it and
otherwise use its best efforts to effect the orderly and efficient
transfer of
such substitute Subservicing Agreement to the assuming party. The
Trustee shall
be entitled to be reimbursed from the predecessor Servicer (or the
Trust if the
predecessor Servicer is unable to fulfill its obligations
hereunder) for all
Servicing Transfer Costs.
Section 3.08 Collection of Mortgage Loan Payments; Servicer
Custodial Account; and Certificate Account. (a) Continuously from
the date
hereof until the principal and interest on all Mortgage Loans are
paid in full,
the Servicer will proceed diligently, in accordance with this
Agreement, to
collect all payments due under each of the Mortgage Loans it
services when the
same shall become due and payable. Further, the Servicer will in
accordance with
all applicable law and Customary Servicing Procedures ascertain and
estimate
taxes, assessments, fire and hazard insurance premiums, mortgage
insurance
premiums and all other charges with respect to the Mortgage Loans
it services
that, as provided in any Mortgage, will become due and payable to
the end that
the installments payable by the Mortgagors will be sufficient to
pay such
charges as and when they become due and payable. Consistent with
the foregoing,
the Servicer may in its discretion (i) waive any late payment
charge or any
prepayment charge or penalty interest in connection with the
prepayment of a
Mortgage Loan it services and (ii) extend the due dates for
payments due on a
Mortgage Note for a period not greater than 120 days; provided,
however, that
the Servicer cannot extend the maturity of any such Mortgage Loan
past the date
on which the final payment is due on the latest maturing Mortgage
Loan as of the
Cut-off Date. In the event of any such arrangement, the Servicer
shall make
Periodic Advances on the related Mortgage Loan in accordance with
the provisions
of Section 3.20 during the scheduled period in accordance with the
amortization
schedule of such Mortgage Loan without modification thereof by
reason of such
arrangements. The Servicer shall not be required to institute or
join in
litigation with respect to collection of any payment (whether under
a Mortgage,
Mortgage Note or otherwise or against any public or governmental
authority with
respect to a taking or condemnation) if it reasonably believes that
enforcing
the provision of the Mortgage or other instrument pursuant to which
such payment
is required is prohibited by applicable law.
(b) The Servicer shall establish and maintain the Servicer
Custodial
Account. The Servicer shall deposit or cause to be deposited into
the Servicer
Custodial Account, all on a daily basis within one Business Day of
receipt,
except as otherwise specifically provided herein, the following
payments and
collections remitted by Subservicers or received by the Servicer in
respect of
the Mortgage Loans subsequent to the Cut-off Date (other than in
respect of
principal and interest due on the Mortgage Loans on or before the
Cut-off Date)
and the following amounts required to be deposited hereunder with
respect to the
Mortgage Loans it services:
(i) all payments on account of principal of the Mortgage Loans,
including
Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net
of the
Servicing Fee;
(iii) (A) all Insurance Proceeds and Liquidation Proceeds,
other
than
Insurance Proceeds to be (1) applied to the restoration or repair
of
the
Mortgaged Property, (2) released to the Mortgagor in accordance
with
Customary
Servicing Procedures or (3) required to be deposited to an
Escrow
Account pursuant to Section 3.09(a), and other than any Excess
Proceeds
and (B) any Insurance Proceeds released from an Escrow Account
pursuant
to Section 3.09(b)(iv);
(iv) any amount required to be deposited by the Servicer pursuant
to
Section
3.08(d) in connection with any losses on Permitted Investments
with
respect to the Servicer Custodial Account;
(v) any amounts required to be deposited by the Servicer pursuant
to
Section
3.14;
(vi) all Repurchase Prices, all Substitution Adjustment Amounts
and
all
Reimbursement Amounts, to the extent received by the Servicer;
(vii) Periodic Advances made by the Servicer pursuant to
Section
3.20 and any
Compensating Interest;
(viii) any Recoveries; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposits to the Servicer
Custodial
Account by the Servicer shall be exclusive it being understood and
agreed that,
without limiting the generality of the foregoing, Ancillary Income
need not be
deposited by the Servicer. If the Servicer shall deposit in the
Servicer
Custodial Account any amount not required to be deposited, it may
at any time
withdraw or direct the institution maintaining the Servicer
Custodial Account to
withdraw such amount from the Servicer Custodial Account, any
provision herein
to the contrary notwithstanding. The Servicer Custodial Account may
contain
funds that belong to one or more trust funds created for mortgage
pass-through
certificates of other series and may contain other funds respecting
payments on
mortgage loans belonging to the Servicer or serviced by the
Servicer on behalf
of others; provided that such commingling of funds shall not be
permitted at any
time during which Fitch's senior long-term unsecured debt rating of
Bank of
America is below "A." Notwithstanding such commingling of funds,
the Servicer
shall keep records that accurately reflect the funds on deposit in
the Servicer
Custodial Account that have been identified by it as being
attributable to the
Mortgage Loans it services. The Servicer shall maintain adequate
records with
respect to all withdrawals made pursuant to this Section 3.08. All
funds
required to be deposited in the Servicer Custodial Account shall be
held in
trust for the Certificateholders until withdrawn in accordance with
Section
3.11.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account, which shall be deemed
to consist of
four sub-accounts. The Trustee shall, promptly upon receipt,
deposit in the
Certificate Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee
pursuant
to Section 3.11(a)(viii);
(ii) any amount paid by the Trustee pursuant to Section 3.08(d)
in
connection
with any losses on Permitted Investments with respect to the
Certificate Account; and
(iii) any other amounts deposited hereunder which are required to
be
deposited
in the Certificate Account.
If the Servicer shall remit any amount not required to be
remitted,
it may at any time direct the Trustee to withdraw such amount from
the
Certificate Account, any provision herein to the contrary
notwithstanding. Such
direction may be accomplished by delivering an Officer's
Certificate to the
Trustee which describes the amounts deposited in error in the
Certificate
Account. All funds required to be deposited in the Certificate
Account shall be
held by the Trustee in trust for the Certificateholders until
disbursed in
accordance with this Agreement or withdrawn in accordance with
Section 3.11. In
no event shall the Trustee incur liability for withdrawals from the
Certificate
Account at the direction of the Servicer.
(d) Each institution at which the Servicer Custodial Account or
the
Certificate Account is maintained shall invest the funds therein as
directed in
writing by the Servicer, in the case of the Servicer Custodial
Account, or the
Trustee, in the case of the Certificate Account, in Permitted
Investments, which
shall mature not later than (i) in the case of the Servicer
Custodial Account,
the Business Day next preceding the related Remittance Date (except
that if such
Permitted Investment is an obligation of the institution that
maintains such
account, then such Permitted Investment shall mature not later than
such
Remittance Date) and (ii) in the case of the Certificate Account,
the Business
Day next preceding the Distribution Date (except that if such
Permitted
Investment is an obligation of the institution that maintains such
account, then
such Permitted Investment shall mature not later than such
Distribution Date)
and, in each case, shall not be sold or disposed of prior to its
maturity. All
such Permitted Investments shall be made in the name of the
Trustee, for the
benefit of the Certificateholders. All Servicer Custodial Account
Reinvestment
Income shall be for the benefit of the Servicer as part of its
Servicing
Compensation and shall be retained by it monthly as provided
herein. All income
or gain (net of any losses) realized from any such investment of
funds on
deposit in the Certificate Account shall be for the benefit of the
Trustee as
additional compensation and shall be retained by it monthly as
provided herein.
The amount of any losses realized in the Servicer Custodial Account
or the
Certificate Account incurred in any such account in respect of any
such
investments shall promptly be deposited by the Servicer in the
Servicer
Custodial Account or by the Trustee in the Certificate Account, as
applicable.
(e) The Servicer shall give notice to the Trustee of any
proposed
change of the location of the Servicer Custodial Account maintained
by the
Servicer not later than 30 days and not more than 45 days prior to
any change
thereof. The Trustee shall give notice to the Servicer, each Rating
Agency and
the Depositor of any proposed change of the location of the
Certificate Account
not later than 30 days after and not more than 45 days prior to any
change
thereof. The creation of the Servicer Custodial Account shall be
evidenced by a
certification substantially in the form of Exhibit F hereto. A copy
of such
certification shall be furnished to the Trustee.
(f) The Trustee shall designate the Upper-Tier Certificate
Sub-Account as a sub-account of the Certificate Account. On each
Distribution
Date (other than the Final Distribution Date, if such Final
Distribution Date is
in connection with a purchase of the assets of the Trust Estate by
the
Depositor), the Trustee shall, from funds available on deposit in
the
Certificate Account, be deemed to deposit into the Upper-Tier
Certificate
Sub-Account, the Lower-Tier Distribution Amount.
Section 3.09 Collection of Taxes, Assessments and Similar
Items;
Escrow Accounts. (a) To the extent required by the related Mortgage
Note and not
violative of current law, the Servicer shall segregate and hold all
funds
collected and received pursuant to each Mortgage Loan which
constitute Escrow
Payments in trust separate and apart from any of its own funds and
general
assets and for such purpose shall establish and maintain one or
more escrow
accounts (collectively, the "Escrow Account"), titled "Bank of
America, N.A., in
trust for registered holders of Banc of America Alternative Loan
Trust 2004-12
Mortgage Pass-Through Certificates, Series 2004-12 and various
Mortgagors." The
Escrow Account shall be established with a commercial bank, a
savings bank or a
savings and loan association that meets the guidelines set forth by
FNMA or
FHLMC as an eligible institution for escrow accounts and which is a
member of
the Automated Clearing House. In any case, the Escrow Account shall
be insured
by the FDIC to the fullest extent permitted by law. The Servicer
shall deposit
in the appropriate Escrow Account on a daily basis, and retain
therein: (i) all
Escrow Payments collected on account of the Mortgage Loans, (ii)
all amounts
representing proceeds of any hazard insurance policy which are to
be applied to
the restoration or repair of any related Mortgaged Property and
(iii) all
amounts representing proceeds of any Primary Insurance Policy.
Nothing herein
shall require the Servicer to compel a Mortgagor to establish an
Escrow Account
in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts
may
be made by the Servicer only (i) to effect timely payment of taxes,
assessments,
mortgage insurance premiums, fire and hazard insurance premiums,
condominium or
PUD association dues, or comparable items constituting Escrow
Payments for the
related Mortgage, (ii) to reimburse the Servicer out of related
Escrow Payments
made with respect to a Mortgage Loan for any Servicing Advance made
by the
Servicer pursuant to Section 3.09(c) with respect to such Mortgage
Loan, (iii)
to refund to any Mortgagor any sums determined to be overages, (iv)
for transfer
to the Servicer Custodial Account upon default of a Mortgagor or in
accordance
with the terms of the related Mortgage Loan and if permitted by
applicable law,
(v) for application to restore or repair the Mortgaged Property,
(vi) to pay to
the Mortgagor, to the extent required by law, any interest paid on
the funds
deposited in the Escrow Account, (vii) to pay to itself any
interest earned on
funds deposited in the Escrow Account (and not required to be paid
to the
Mortgagor), (viii) to the extent permitted under the terms of the
related
Mortgage Note and applicable law, to pay late fees with respect to
any Monthly
Payment which is received after the applicable grace period, (ix)
to withdraw
suspense payments that are deposited into the Escrow Account, (x)
to withdraw
any amounts inadvertently deposited in the Escrow Account or (xi)
to clear and
terminate the Escrow Account upon the termination of this Agreement
in
accordance with Section 10.01. Any Escrow Account shall not be a
part of the
Trust Estate.
(c) With respect to each Mortgage Loan, the Servicer shall
maintain
accurate records reflecting the status of taxes, assessments and
other charges
which are or may become a lien upon the Mortgaged Property and the
status of
Primary Insurance Policy premiums and fire and hazard insurance
coverage. The
Servicer shall obtain, from time to time, all bills for the payment
of such
charges (including renewal premiums) and shall effect payment
thereof prior to
the applicable penalty or termination date and at a time
appropriate for
securing maximum discounts allowable, employing for such purpose
deposits of the
Mortgagor in the Escrow Account, if any, which shall have been
estimated and
accumulated by the Servicer in amounts sufficient for such
purposes, as allowed
under the terms of the Mortgage. To the extent that a Mortgage does
not provide
for Escrow Payments, the Servicer shall determine that any such
payments are
made by the Mortgagor. The Servicer assumes full responsibility for
the timely
payment of all such bills and shall effect timely payments of all
such bills
irrespective of each Mortgagor's faithful performance in the
payment of same or
the making of the Escrow Payments. The Servicer shall advance any
such payments
that are not timely paid, but the Servicer shall be required so to
advance only
to the extent that such Servicing Advances, in the good faith
judgment of the
Servicer, will be recoverable by the Servicer out of Insurance
Proceeds,
Liquidation Proceeds or otherwise.
Section 3.10 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall afford the Trustee
reasonable
access to all records and documentation regarding the Mortgage
Loans and all
accounts, insurance information and other matters relating to this
Agreement,
such access being afforded without charge, but only upon reasonable
request and
during normal business hours at the office designated by the
Servicer.
Upon reasonable advance notice in writing, the Servicer will
provide
to each Certificateholder which is a savings and loan association,
bank or
insurance company certain reports and reasonable access to
information and
documentation regarding the Mortgage Loans sufficient to permit
such
Certificateholder to comply with applicable regulations of the OTS
or other
regulatory authorities with respect to investment in the
Certificates; provided
that the Servicer shall be entitled to be reimbursed by each
such
Certificateholder for actual expenses incurred by the Servicer in
providing such
reports and access.
Section 3.11 Permitted Withdrawals from the Servicer Custodial
Account and Certificate Account. (a) The Servicer may from time to
time make
withdrawals from the Servicer Custodial Account, for the following
purposes:
(i) to pay to the Servicer (to the extent not previously
retained),
the
Servicing Compensation to which it is entitled pursuant to
Section
3.17;
(ii) to reimburse the Servicer for unreimbursed Advances made by
it,
such right
of reimbursement pursuant to this clause (ii) being limited to
amounts
received on the Mortgage Loan(s) (including amounts received in
respect of
BPP Mortgage Loan Payments for such Mortgage Loan) in respect
of which
any such Advance was made;
(iii) to reimburse the Servicer for any Nonrecoverable Advance
previously
made, such right of reimbursement pursuant to this clause (iii)
being
limited to amounts received on the Mortgage Loans in the same
Loan
Group as the Mortgage
Loan(s) in respect of which such Nonrecoverable
Advance
was made;
(iv) to reimburse the Servicer for Insured Expenses from the
related
Insurance
Proceeds;
(v) to pay to the purchaser, with respect to each Mortgage Loan
or
REO
Property that has been purchased pursuant to Section 2.02 or 2.04,
all
amounts
received thereon after the date of such purchase;
(vi) to reimburse the Servicer or the Depositor for expenses
incurred
by any of them and reimbursable pursuant to Section 7.03;
(vii) to withdraw any amount deposited in the Servicer
Custodial
Account
and not required to be deposited therein;
(viii) on or prior to the Remittance Date, to withdraw an
amount
equal to
the related Pool Distribution Amount, the related Trustee Fee
and
any other
amounts due to the Trustee under this Agreement (other than
pursuant
to Section 3.11(b)(ii)) for such Distribution Date, to the
extent
on
deposit, and remit such amount in immediately available funds to
the
Trustee
for deposit in the Certificate Account; and
(ix) to clear and terminate the Servicer Custodial Account upon
termination of this Agreement pursuant to Section 10.01.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying
any
withdrawal from the Servicer Custodial Account pursuant to clauses
(i), (ii),
(iv) and (v). The Servicer shall keep and maintain such separate
accounting for
each Loan Group. Prior to making any withdrawal from the Servicer
Custodial
Account pursuant to clause (iii), the Servicer shall deliver to the
Trustee an
Officer's Certificate of a Servicing Officer indicating the amount
of any
previous Advance determined by the Servicer to be a Nonrecoverable
Advance and
identifying the related Mortgage Loan(s) and their respective
portions of such
Nonrecoverable Advance.
(b) The Trustee shall be deemed to withdraw funds from the
applicable Certificate Account sub-accounts for distributions
to
Certificateholders in the manner specified in this Agreement. In
addition, the
Trustee may from time to time make withdrawals from the Certificate
Account for
the following purposes:
(i) to pay to itself the Trustee Fee and any other amounts due
to
the
Trustee under this Agreement for the related Distribution Date;
(ii) to pay to itself as additional compensation earnings on or
investment
income with respect to funds in the Certificate Account;
(iii) to withdraw and return to the Servicer any amount deposited
in
the
Certificate Account and not required to be deposited therein;
and
(iv) to clear and terminate the Certificate Account upon
termination
of this
Agreement pursuant to Section 10.01.
(c) On each Distribution Date, funds on deposit in the
Certificate
Account and deemed to be on deposit in the Upper-Tier Certificate
Sub-Account
shall be used to make payments on the Regular Certificates, the
Class CB-IO
Certificates, the Class 30-PO Certificates and the Class 1-CB-R
Certificate as
provided in Sections 5.01 and 5.02. The Certificate Account shall
be cleared and
terminated upon termination of this Agreement pursuant to Section
10.01.
Section 3.12 Maintenance of Hazard Insurance. The Servicer
shall
cause to be maintained for each Mortgage Loan, fire and hazard
insurance with
extended coverage customary in the area where the Mortgaged
Property is located
in an amount which is at least equal to the lesser of (a) the full
insurable
value of the Mortgaged Property or (b) the greater of (i) the
outstanding
principal balance owing on the Mortgage Loan and (ii) an amount
such that the
proceeds of such insurance shall be sufficient to avoid the
application to the
Mortgagor or loss payee of any coinsurance clause under the policy.
If the
Mortgaged Property is in an area identified in the Federal Register
by the
Federal Emergency Management Agency as having special flood hazards
(and such
flood insurance has been made available) the Servicer will cause to
be
maintained a flood insurance policy meeting the requirements of the
current
guidelines of the Federal Insurance Administration and the
requirements of FNMA
or FHLMC. The Servicer shall also maintain on REO Property, fire
and hazard
insurance with extended coverage in an amount which is at least
equal to the
maximum insurable value of the improvements which are a part of
such property,
liability insurance and, to the extent required, flood insurance in
an amount
required above. Any amounts collected by the Servicer under any
such policies
(other than amounts to be deposited in an Escrow Account and
applied to the
restoration or repair of the property subject to the related
Mortgage or
property acquired in liquidation of the Mortgage Loan, or to be
released to the
Mortgagor in accordance with Customary Servicing Procedures) shall
be deposited
in the Servicer Custodial Account, subject to withdrawal pursuant
to Section
3.11(a). It is understood and agreed that no earthquake or other
additional
insurance need be required by the Servicer of any Mortgagor or
maintained on REO
Property, other than pursuant to such applicable laws and
regulations as shall
at any time be in force and as shall require such additional
insurance. All
policies required hereunder shall be endorsed with standard
mortgagee clauses
with loss payable to the Servicer, and shall provide for at least
30 days prior
written notice of any cancellation, reduction in amount or material
change in
coverage to the Servicer.
The hazard insurance policies for each Mortgage Loan secured by
a
unit in a condominium development or planned unit development shall
be
maintained with respect to such Mortgage Loan and the related
development in a
manner which is consistent with FNMA requirements.
Notwithstanding the foregoing, the Servicer may maintain a
blanket
policy insuring against hazard losses on all of the Mortgaged
Properties
relating to the Mortgage Loans in lieu of maintaining the required
hazard
insurance policies for each Mortgage Loan and may maintain a
blanket policy
insuring against special flood hazards in lieu of maintaining any
required flood
insurance. Any such blanket policies shall (A) be consistent with
prudent
industry standards, (B) name the Servicer as loss payee, (C)
provide coverage in
an amount equal to the aggregate unpaid principal balance on the
related
Mortgage Loans without co-insurance, and (D) otherwise comply with
the
requirements of this Section 3.12. Any such blanket policy may
contain a
deductible clause; provided that if any Mortgaged Property is not
covered by a
separate policy otherwise complying with this Section 3.12 and a
loss occurs
with respect to such Mortgaged Property which loss would have been
covered by
such a policy, the Servicer shall deposit in the Servicer Custodial
Account the
difference, if any, between the amount that would have been payable
under a
separate policy complying with this Section 3.12 and the amount
paid under such
blanket policy.
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. (a) Except as otherwise provided in this Section 3.13,
when any
Mortgaged Property subject to a Mortgage has been conveyed by the
Mortgagor, the
Servicer shall use reasonable efforts, to the extent that it has
actual
knowledge of such conveyance, to enforce any due-on-sale clause
contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable
law and
governmental regulations, but only to the extent that such
enforcement will not
adversely affect or jeopardize coverage under any Required
Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to
exercise such
rights with respect to a Mortgage Loan if the Person to whom the
related
Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the
terms and conditions contained in the Mortgage Note and Mortgage
related thereto
and the consent of the mortgagee under such Mortgage Note or
Mortgage is not
otherwise required under such Mortgage Note or Mortgage as a
condition to such
transfer. If (i) the Servicer is prohibited by law from enforcing
any such
due-on-sale clause, (ii) coverage under any Required Insurance
Policy would be
adversely affected, (iii) the Mortgage Note does not include a
due-on-sale
clause or (iv) nonenforcement is otherwise permitted hereunder, the
Servicer is
authorized, subject to Section 3.13(b), to take or enter into an
assumption and
modification agreement from or with the Person to whom such
Mortgaged Property
has been or is about to be conveyed, pursuant to which such Person
becomes
liable under the Mortgage Note and, unless prohibited by applicable
state law,
the Mortgagor remains liable thereon; provided that the Mortgage
Loan shall
continue to be covered (if so covered before the Servicer enters
such agreement)
by the applicable Required Insurance Policies. The Servicer,
subject to Section
3.13(b), is also authorized with the prior approval of the insurers
under any
Required Insurance Policies to enter into a substitution of
liability agreement
with such Person, pursuant to which the original Mortgagor is
released from
liability and such Person is substituted as Mortgagor and becomes
liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer
shall not be
deemed to be in default under this Section 3.13 by reason of any
transfer or
assumption which the Servicer reasonably believes it is restricted
by law from
preventing, for any reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale
clause
to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such
Person is to
enter into an assumption agreement or modification agreement or
supplement to
the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if
an instrument of release signed by the Trustee is required
releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer shall
prepare and
deliver or cause to be prepared and delivered to the Trustee for
signature and
shall direct, in writing, the Trustee to execute the assumption
agreement with
the Person to whom the Mortgaged Property is to be conveyed and
such
modification agreement or supplement to the Mortgage Note or
Mortgage or other
instruments as are reasonable or necessary to carry out the terms
of the
Mortgage Note or Mortgage or otherwise to comply with any
applicable laws
regarding assumptions or the transfer of the Mortgaged Property to
such Person.
In no event shall the Trustee incur liability for executing any
document under
this Section 3.13 at the direction of the Servicer. In connection
with any such
assumption, no material term of the Mortgage Note may be changed.
In addition,
the substitute Mortgagor and the Mortgaged Property must be
acceptable to the
Servicer in accordance with its underwriting standards as then in
effect.
Together with each such substitution, assumption or other agreement
or
instrument delivered to the Trustee for execution by it, the
Servicer shall
deliver an Officer's Certificate signed by a Servicing Officer
stating that the
requirements of this subsection have been met. The Servicer shall
notify the
Trustee that any such substitution or assumption agreement has been
completed by
forwarding to the Trustee (or at the direction of the Trustee, the
Custodian)
the original of such substitution or assumption agreement, which in
the case of
the original shall be added to the related Mortgage File and shall,
for all
purposes, be considered a part of such Mortgage File to the same
extent as all
other documents and instruments constituting a part thereof. Any
fee collected
by the Servicer for entering into an assumption or substitution of
liability
agreement may be retained by the Servicer as additional Servicing
Compensation.
Notwithstanding the foregoing, to the extent permissible under
applicable law
and at the request of the Servicer, the Trustee shall execute and
deliver to the
Servicer any powers of attorney and other documents prepared by the
Servicer
that are reasonably necessary or appropriate to enable the Servicer
to execute
any assumption agreement or modification agreement required to be
executed by
the Trustee under this Section 3.13.
Section 3.14 Realization upon Defaulted Mortgage Loans; REO
Property. (a) Subject to Section 3.21, the Servicer shall use
reasonable efforts
to foreclose upon or otherwise comparably convert the ownership of
Mortgaged
Properties securing such of the Mortgage Loans as come into and
continue in
default and as to which no satisfactory arrangements can be made
for collection
of delinquent payments. In connection with such foreclosure or
other conversion,
the Servicer shall follow Customary Servicing Procedures and shall
meet the
requirements of the insurer under any Required Insurance Policy;
provided,
however, that the Servicer may enter into a special servicing
agreement with an
unaffiliated Holder of 100% Percentage Interest of a Class of Class
B
Certificates or a holder of a class of securities representing
interests in the
Class B Certificates alone or together with other subordinated
mortgage
pass-through certificates. Such agreement shall be substantially in
the form
attached hereto as Exhibit K or subject to each Rating Agency's
acknowledgment
that the ratings of the Certificates in effect immediately prior to
the entering
into such agreement would not be qualified, downgraded or withdrawn
and the
Certificates would not be placed on credit review status (except
for possible
upgrading) as a result of such agreement. Any such agreement may
contain
provisions whereby such holder may instruct the Servicer to
commence or delay
foreclosure proceedings with respect to delinquent Mortgage Loans
and will
contain provisions for the deposit of cash by the holder that would
be available
for distribution to Certificateholders if Liquidation Proceeds are
less than
they otherwise may have been had the Servicer acted in accordance
with its
normal procedures. Notwithstanding the foregoing, the Servicer
shall not be
required to expend its own funds in connection with any foreclosure
or towards
the restoration of any Mortgaged Property unless it shall determine
(i) that
such restoration and/or foreclosure will increase the proceeds of
liquidation of
the Mortgage Loan after reimbursement to itself of such expenses
and (ii) that
such expenses will be recoverable to it through proceeds of the
liquidation of
the Mortgage Loan (respecting which it shall have priority for
purposes of
withdrawals from the Servicer Custodial Account). Any such
expenditures shall
constitute Servicing Advances for purposes of this Agreement.
The decision of the Servicer to foreclose on a defaulted
Mortgage
Loan shall be subject to a determination by the Servicer that the
proceeds of
such foreclosure would exceed the costs and expenses of bringing
such a
proceeding.
With respect to any REO Property, the deed or certificate of
sale
shall be taken in the name of the Trustee for the benefit of
the
Certificateholders, or its nominee, on behalf of the
Certificateholders. The
Trustee's name shall be placed on the title to such REO Property
solely as the
Trustee hereunder and not in its individual capacity. The Servicer
shall ensure
that the title to such REO Property references this Agreement and
the Trustee's
capacity hereunder. Pursuant to its efforts to sell such REO
Property, the
Servicer shall either itself or through an agent selected by the
Servicer
manage, conserve, protect and operate such REO Property in the same
manner that
it manages, conserves, protects and operates other foreclosed
property for its
own account and in the same manner that similar property in the
same locality as
the REO Property is managed. Incident to its conservation and
protection of the
interests of the Certificateholders, the Servicer may rent the
same, or any part
thereof, as the Servicer deems to be in the best interest of
the
Certificateholders for the period prior to the sale of such REO
Property. The
Servicer shall prepare for and deliver to the Trustee a statement
with respect
to each REO Property that has been rented, if any, showing the
aggregate rental
income received and all expenses incurred in connection with the
management and
maintenance of such REO Property at such times as is necessary to
enable the
Trustee to comply with the reporting requirements of the REMIC
Provisions;
provided, however, that the Servicer shall have no duty to rent any
REO Property
on behalf of the Trust. The net monthly rental income, if any, from
such REO
Property shall be deposited in the Servicer Custodial Account no
later than the
close of business on each Determination Date. The Servicer shall
perform, with
respect to the Mortgage Loans, the tax reporting and withholding
required by
Sections 1445 and 6050J of the Code with respect to foreclosures
and
abandonments, the tax reporting required by Section 6050H of the
Code with
respect to the receipt of mortgage interest from individuals and,
if required by
Section 6050P of the Code with respect to the cancellation of
indebtedness by
certain financial entities, by preparing such tax and information
returns as may
be required, in the form required. The Servicer shall deliver
copies of such
reports to the Trustee.
If the Trust acquires any Mortgaged Property as described above
or
otherwise in connection with a default or a default which is
reasonably
foreseeable on a Mortgage Loan, the Servicer shall dispose of such
Mortgaged
Property prior to the end of the third calendar year following the
year of its
acquisition by the Trust (such period, the "REO Disposition
Period") unless (A)
the Trustee shall have been supplied by the Servicer with an
Opinion of Counsel
to the effect that the holding by the Trust of such Mortgaged
Property
subsequent to the REO Disposition Period will not result in the
imposition of
taxes on "prohibited transactions" (as defined in Section 860F of
the Code) on
either the Upper-Tier REMIC or the Lower-Tier REMIC or cause either
REMIC
created hereunder to fail to qualify as a REMIC at any time that
any
Certificates are outstanding, or (B) the Trustee (at the Servicer's
expense) or
the Servicer shall have applied for, prior to the expiration of the
REO
Disposition Period, an extension of the REO Disposition Period in
the manner
contemplated by Section 856(e)(3) of the Code. If such an Opinion
of Counsel is
provided or such an exemption is obtained, the Trust may continue
to hold such
Mortgaged Property (subject to any conditions contained in such
Opinion of
Counsel) for the applicable period. Notwithstanding any other
provision of this
Agreement, no Mortgaged Property acquired by the Trust shall be
rented (or
allowed to continue to be rented) or otherwise used for the
production of income
by or on behalf of the Trust in such a manner or pursuant to any
terms that
would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or
(ii) subject
either REMIC created hereunder to the imposition of any federal,
state or local
income taxes on the income earned from such Mortgaged Property
under Section
860G(c) of the Code or otherwise, unless the Servicer has agreed to
indemnify
and hold harmless the Trust with respect to the imposition of any
such taxes.
The Servicer shall identify to the Trustee any Mortgaged Property
relating to a
Mortgage Loan held by the Trust for 30 months for which no plans to
dispose of
such Mortgaged Property by the Servicer have been made. After
delivery of such
identification, the Servicer shall proceed to dispose of any such
Mortgaged
Property by holding a commercially reasonable auction for such
property.
The income earned from the management of any REO Properties, net
of
reimbursement to the Servicer for expenses incurred (including any
property or
other taxes) in connection with such management and net of
unreimbursed
Servicing Fees, Periodic Advances and Servicing Advances, shall be
applied to
the payment of principal of and interest on the related defaulted
Mortgage Loans
(solely for the purposes of allocating principal and interest,
interest shall be
treated as accruing as though such Mortgage Loans were still
current) and all
such income shall be deemed, for all purposes in this Agreement, to
be payments
on account of principal and interest on the related Mortgage Notes
and shall be
deposited into the Servicer Custodial Account. To the extent the
net income
received during any calendar month is in excess of the amount
attributable to
amortizing principal and accrued interest at the related Mortgage
Interest Rate
on the related Mortgage Loan for such calendar month, such excess
shall be
considered to be a partial prepayment of principal of the related
Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
any
income from an REO Property, will be applied in the following order
of priority:
first, to reimburse the Servicer for any related unreimbursed
Servicing Advances
and Servicing Fees; second, to reimburse the Servicer for any
unreimbursed
Periodic Advances and to reimburse the Servicer Custodial Account
for any
Nonrecoverable Advances (or portions thereof) that were previously
withdrawn by
the Servicer pursuant to Section 3.11(a)(iii) that related to such
Mortgage
Loan; third, to accrued and unpaid interest (to the extent no
Periodic Advance
has been made for such amount or any such Periodic Advance has been
reimbursed)
on the Mortgage Loan or related REO Property, at the Mortgage
Interest Rate to
the Due Date occurring in the month in which such amounts are
required to be
distributed; and fourth, as a recovery of principal of the Mortgage
Loan. Excess
Proceeds, if any, from the liquidation of a Liquidated Mortgage
Loan will be
retained by the Servicer as additional Servicing Compensation
pursuant to
Section 3.17.
(b) The Servicer shall promptly notify the Depositor of any
Mortgage
Loan which comes into default. The Depositor shall be entitled, at
its option,
to repurchase (i) any such defaulted Mortgage Loan from the Trust
Estate if (a)
in the Depositor's judgment, the default is not likely to be cured
by the
Mortgagor and (b) such Mortgage Loan is 180 days or more delinquent
or (ii) any
Mortgage Loan in the Trust Estate which pursuant to Section 4(b) of
the Mortgage
Loan Purchase Agreement the Seller requests the Depositor to
repurchase and to
sell to the Seller to facilitate the exercise of the Seller's
rights against the
originator or prior holder of such Mortgage Loan. The purchase
price for any
such Mortgage Loan shall be 100% of the unpaid principal balance of
such
Mortgage Loan plus accrued interest thereon at the Mortgage
Interest Rate
through the last day of the month in which such repurchase occurs.
Upon the
receipt of such purchase price, the Servicer shall provide to the
Trustee the
notification required by Section 3.15 and the Trustee or the
Custodian shall
promptly release to the Depositor the Mortgage File relating to the
Mortgage
Loan being repurchased.
Section 3.15 Trustee to Cooperate; Release of Mortgage Files.
Upon
the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a
notification that payment in full will be escrowed in a manner
customary for
such purposes, the Servicer will immediately notify the Trustee
(or, at the
direction of the Trustee, the Custodian) by delivering, or causing
to be
delivered, two copies (one of which will be returned to the
Servicer with the
Mortgage File) of a Request for Release (which may be delivered in
an electronic
format acceptable to the Trustee and the Servicer). Upon receipt of
such
request, the Trustee or the Custodian, as applicable, shall within
seven
Business Days release the related Mortgage File to the Servicer.
The Trustee
shall at the Servicer's direction execute and deliver to the
Servicer the
request for reconveyance, deed of reconveyance or release or
satisfaction of
mortgage or such instrument releasing the lien of the Mortgage, in
each case
provided by the Servicer, together with the Mortgage Note with
written evidence
of cancellation thereon. If the Mortgage has been recorded in the
name of MERS
or its designee, the Servicer shall take all necessary action to
reflect the
release of the Mortgage on the records of MERS. Expenses incurred
in connection
with any instrument of satisfaction or deed of reconveyance shall
be chargeable
to the related Mortgagor. From time to time and as shall be
appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such
purpose
collection under any policy of flood insurance, any fidelity bond
or errors or
omissions policy, or for the purposes of effecting a partial
release of any
Mortgaged Property from the lien of the Mortgage or the making of
any
corrections to the Mortgage Note or the Mortgage or any of the
other documents
included in the Mortgage File, the Trustee or the Custodian, as
applicable,
shall, upon delivery to the Trustee (or, at the direction of the
Trustee, the
Custodian) of a Request for Release signed by a Servicing Officer,
release the
Mortgage File within seven Business Days to the Servicer. Subject
to the further
limitations set forth below, the Servicer shall cause the Mortgage
File so
released to be returned to the Trustee or the Custodian, as
applicable, when the
need therefor by the Servicer no longer exists, unless the Mortgage
Loan is
liquidated and the proceeds thereof are deposited in the Servicer
Custodial
Account, in which case the Servicer shall deliver to the Trustee or
the
Custodian, as applicable, a Request for Release, signed by a
Servicing Officer.
The Trustee shall execute and deliver to the Servicer any powers
of
attorney and other documents prepared by the Servicer that are
reasonably
necessary or appropriate to enable the Servicer to carry out its
servicing and
administrative duties under this Agreement, upon the request of the
Servicer. In
addition, upon prepayment in full of any Mortgage Loan or the
receipt of notice
that funds for such purpose have been placed in escrow, the
Servicer is
authorized to give, as attorney-in-fact for the Trustee and the
mortgagee under
the Mortgage, an instrument of satisfaction (or Assignment of
Mortgage without
recourse) regarding the Mortgaged Property relating to such
Mortgage Loan, which
instrument of satisfaction or Assignment of Mortgage, as the case
may be, shall
be delivered to the Person entitled thereto against receipt of the
prepayment in
full. If the Mortgage is registered in the name of MERS or its
designee, the
Servicer shall take all necessary action to reflect the release on
the records
of MERS. In lieu of executing such satisfaction or Assignment of
Mortgage, or if
another document is required to be executed by the Trustee, the
Servicer may
deliver or cause to be delivered to the Trustee, for signature, as
appropriate,
any court pleadings, requests for trustee's sale or other documents
necessary to
effectuate such foreclosure or any legal action brought to obtain
judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to
obtain a
deficiency judgment or to enforce any other remedies or rights
provided by the
Mortgage Note or the Mortgage or otherwise available at law or in
equity.
Section 3.16 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall transmit to
the Trustee
or, at the direction of the Trustee, the Custodian as required by
this Agreement
all documents and instruments in respect of a Mortgage Loan coming
into the
possession of the Servicer from time to time and shall account
fully to the
Trustee for any funds received by the Servicer or which otherwise
are collected
by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any
Mortgage Loan. The documents constituting the Servicing File shall
be held by
the Servicer as custodian and bailee for the Trustee. All Mortgage
Files and
funds collected or held by, or under the control of, the Servicer
in respect of
any Mortgage Loans, whether from the collection of principal and
interest
payments or from Liquidation Proceeds, including but not limited
to, any funds
on deposit in the Servicer Custodial Account, shall be held by the
Servicer for
and on behalf of the Trustee and shall be and remain the sole and
exclusive
property of the Trustee, subject to the applicable provisions of
this Agreement.
The Servicer also agrees that it shall not knowingly create, incur
or subject
any Mortgage File or any funds that are deposited in the Servicer
Custodial
Account, Certificate Account or any Escrow Account, or any funds
that otherwise
are or may become due or payable to the Trustee for the benefit of
the
Certificateholders, to any claim, lien, security interest,
judgment, levy, writ
of attachment or other encumbrance created by the Servicer, or
assert by legal
action or otherwise any claim or right of setoff against any
Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan,
except, however,
that the Servicer shall be entitled to set off against and deduct
from any such
funds any amounts that are properly due and payable to the Servicer
under this
Agreement.
Section 3.17 Servicing Compensation. The Servicer shall be
entitled
out of each payment of interest on a Mortgage Loan (or portion
thereof) and
included in the Trust Estate to retain or withdraw from the
Servicer Custodial
Account an amount equal to the Servicing Fee for such Distribution
Date;
provided, however, that the aggregate Servicing Fee for the
Servicer shall be
reduced (but not below zero) by an amount equal to the Compensating
Interest.
Any additional Servicing Compensation shall be retained by the
Servicer to the extent not required to be deposited in the Servicer
Custodial
Account pursuant to Section 3.08(b). The Servicer shall be required
to pay all
expenses incurred by it in connection with its servicing activities
hereunder
and shall not be entitled to reimbursement therefor except as
specifically
provided in this Agreement.
Section 3.18 Annual Statement as to Compliance. Commencing in
the
calendar year following the date of this Agreement, the Servicer
shall deliver
to the Trustee and each Rating Agency on or before the 30th day (or
if not a
Business Day, the immediately preceding Business Day) preceding the
latest day
in each year on which an annual report on Form 10-K may be timely
filed with the
Securities and Exchange Commission (without regard to any
extension), an
Officer's Certificate stating, as to the signer thereof, that (a) a
review of
the activities of the Servicer during the preceding calendar year
and of the
performance of the Servicer under this Agreement has been made
under such
officer's supervision, and (b) to the best of such officer's
knowledge, based on
such review, the Servicer has fulfilled all its obligations under
this Agreement
throughout such year, or, if there has been a default in the
fulfillment of any
such obligation, specifying each such default known to such officer
and the
nature and status thereof.
Section 3.19 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Commencing in the calendar year
following the
date of this Agreement, the Servicer shall, at its own expense, on
or before the
30th day (or if not a Business Day, the immediately preceding
Business Day)
preceding the latest day in each year on which an annual report on
Form 10-K may
be timely filed with the Securities and Exchange Commission
(without regard to
any extension), cause a firm of independent public accountants (who
may also
render other services to the Servicer or any affiliate thereof)
which is a
member of the American Institute of Certified Public Accountants to
furnish a
statement to the Trustee to the effect that such firm has with
respect to the
Servicer's overall servicing operations, examined such operations
in accordance
with the requirements of the Uniform Single Attestation Program for
Mortgage
Bankers, stating such firm's conclusions relating thereto.
Section 3.20 Advances. The Servicer shall determine on or
before
each Servicer Advance Date whether it is required to make a
Periodic Advance
pursuant to the definition thereof. If the Servicer determines it
is required to
make a Periodic Advance, it shall, on or before the Servicer
Advance Date,
either (a) deposit into the Servicer Custodial Account an amount
equal to the
Advance and/or (b) make an appropriate entry in its records
relating to the
Servicer Custodial Account that any portion of the Amount Held for
Future
Distribution with respect to a Loan Group in the Servicer Custodial
Account has
been used by the Servicer in discharge of its obligation to make
any such
Periodic Advance on a Mortgage Loan in such Loan Group. Any funds
so applied
shall be replaced by the Servicer by deposit in the Servicer
Custodial Account
no later than the close of business on the Business Day preceding
the next
Servicer Advance Date. The Servicer shall be entitled to be
reimbursed from the
Servicer Custodial Account for all Advances of its own funds made
pursuant to
this Section 3.20 as provided in Section 3.11(a). The obligation to
make
Periodic Advances with respect to any Mortgage Loan shall continue
until the
ultimate disposition of the REO Property or Mortgaged Property
relating to such
Mortgage Loan. The Servicer shall inform the Trustee of the amount
of the
Periodic Advance to be made by the Servicer with respect to each
Loan Group on
each Servicer Advance Date no later than the related Remittance
Date.
The Servicer shall deliver to the Trustee on the related
Servicer
Advance Date an Officer's Certificate of a Servicing Officer
indicating the
amount of any proposed Periodic Advance determined by the Servicer
to be a
Nonrecoverable Advance. Notwithstanding anything to the contrary,
the Servicer
shall not be required to make any Periodic Advance or Servicing
Advance that
would be a Nonrecoverable Advance.
Section 3.21 Modifications, Waivers, Amendments and Consents.
(a)
Subject to this Section 3.21, the Servicer may agree to any
modification,
waiver, forbearance, or amendment of any term of any Mortgage Loan
without the
consent of the Trustee or any Certificateholder. All modifications,
waivers,
forbearances or amendments of any Mortgage Loan shall be in writing
and shall be
consistent with Customary Servicing Procedures.
(b) The Servicer shall not agree to enter into, and shall not
enter
into, any modification, waiver (other than a waiver referred to in
Section 3.13,
which waiver, if any, shall be governed by Section 3.13),
forbearance or
amendment of any term of any Mortgage Loan if such modification,
waiver,
forbearance, or amendment would:
(i) forgive principal owing under such Mortgage Loan or
permanently
reduce the
interest rate on such Mortgage Loan;
(ii) affect the amount or timing of any related payment of
principal,
interest or other amount payable thereunder;
(iii) in the Servicer's judgment, materially impair the security
for
such
Mortgage Loan or reduce the likelihood of timely payment of
amounts
due
thereon; or
(iv) otherwise constitute a "significant modification" within
the
meaning of
Treasury Regulations Section 1.860G-2(b);
unless, in the case of clauses (ii) through (iv) above, (A) such
Mortgage Loan
is 90 days or more past due or (B) the Servicer delivers to the
Trustee an
Opinion of Counsel to the effect that such modification, waiver,
forbearance or
amendment would not affect the REMIC status of either the
Upper-Tier REMIC or
the Lower-Tier REMIC and, in either case, such modification,
waiver, forbearance
or amendment is reasonably likely, in the Servicer's judgment, to
produce a
greater recovery with respect to such Mortgage Loan than would
liquidation.
Subject to Customary Servicing Procedures, the Servicer may permit
a forbearance
for a Mortgage Loan which in the Servicer's judgment is subject to
imminent
default.
(c) The Servicer may, as a condition to granting any request by
a
Mortgagor for consent, modification, waiver, forbearance or
amendment, the
granting of which is within the Servicer's discretion pursuant to
the Mortgage
Loan and is permitted by the terms of this Agreement, require that
such
Mortgagor pay to the Servicer, as additional Servicing
Compensation, a
reasonable or customary fee for the additional services performed
in connection
with such request, together with any related costs and expenses
incurred by the
Servicer, which amount shall be retained by the Servicer as
additional Servicing
Compensation.
(d) The Servicer shall notify the Trustee, in writing, of any
modification, waiver, forbearance or amendment of any term of any
Mortgage Loan
and the date thereof, and shall deliver to the Trustee (or, at the
direction of
the Trustee, the Custodian) for deposit in the related Mortgage
File, an
original counterpart of the agreement relating to such
modification, waiver,
forbearance or amendment, promptly (and in any event within ten
Business Days)
following the execution thereof; provided, however, that if any
such
modification, waiver, forbearance or amendment is required by
applicable law to
be recorded, the Servicer (i) shall deliver to the Trustee a copy
thereof and
(ii) shall deliver to the Trustee such document, with evidence of
notification
upon receipt thereof from the public recording office.
Section 3.22 Reports to the Securities and Exchange Commission.
The
Trustee and the Servicer shall reasonably cooperate with the
Depositor in
connection with the Trust's satisfying its reporting requirements
under the
Exchange Act. Without limiting the generality of the foregoing, the
Trustee
shall prepare on behalf of the Trust any monthly Current Reports on
Form 8-K
(each, a "Monthly Form 8-K") and Annual Reports on Form 10-K (each,
a "Form
10-K") customary for similar securities as required by the Exchange
Act and the
rules and regulations of the Securities and Exchange Commission
thereunder, and
the Trustee shall sign (other than any Form 10-K) and file (via the
Securities
and Exchange Commission's Electronic Data Gathering and Retrieval
System) such
forms on behalf of the Trust. The Servicer shall sign any Form
10-K.
(a) Each Monthly Form 8-K shall be filed by the Trustee within
15
days after each Distribution Date, including a copy of the monthly
statement to
Certificateholders delivered pursuant to Section 5.04(b) (each, a
"Distribution
Date Statement") for such Distribution Date as an exhibit thereto.
Prior to
March 30th of each year (or such earlier date as may be required by
the Exchange
Act and the rules and regulations of the Securities and Exchange
Commission)
commencing in the calendar year following the date of this
Agreement, the
Trustee shall file a Form 10-K, in substance as required by
applicable law or
applicable Securities and Exchange Commission staff's
interpretations. Such Form
10-K shall include as exhibits the Servicer's annual statement of
compliance
described under Section 3.18 and the accountant's report described
under Section
3.19, in each case, to the extent they have been timely delivered
to the
Trustee. If they are not so timely delivered, the Trustee shall
file an amended
Form 10-K including such documents as exhibits reasonably promptly
after they
are delivered to the Trustee. The Trustee shall have no liability
with respect
to any failure to properly prepare or file such periodic reports
resulting from
or relating to the Trustee's inability or failure to obtain any
information not
resulting from its own negligence, willful misconduct or bad fai
