EXHIBIT 4.1
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BANC OF AMERICA MORTGAGE SECURITIES, INC.,
as Depositor,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Servicer,
LASALLE BANK NATIONAL ASSOCIATION,
as Securities Administrator,
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
POOLING AND SERVICING AGREEMENT
Dated: [______]
-----------------------
Banc of America Mortgage [_______]
Mortgage Pass-Through Certificates
Series [____]
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<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY
STATEMENT......................................................
ARTICLE
I
DEFINITIONS
Section 1.01 Defined
Terms................................................
Section 1.02 Interest
Calculations........................................
Section 1.03 Fiscal
Year..................................................
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 and Warranties of the
Servicer...............
Section 2.04 Representations and Warranties of the Depositor
as
to the Mortgage Loans.......................................
Section 2.05 Designation of Interests in the
REMICs.......................
Section 2.06 Designation of Start-up
Day..................................
Section 2.07 REMIC Certificate Maturity
Date..............................
Section 2.08 Execution and Delivery of
Certificates.......................
Section 2.09 Establishment of the
Trust...................................
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, the Securities
Administrator and the Trustee in Respect of the
Servicer....................................................
Section 3.07 Trustee to Act as
Servicer...................................
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Section 3.08 Collection of Mortgage Loan Payments;
Servicer
Custodial Account; 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 Trust...........................
Section 3.17 Servicing
Compensation.......................................
Section 3.18 Annual Statement as to
Compliance............................
Section 3.19 Assessments of Servicing Compliance;
Registered
Public Accounting Firm Attestation Reports..................
Section 3.20
Advances.....................................................
Section 3.21 Modifications, Waivers, Amendments and
Consents..............
Section 3.22 Reports to the Securities and Exchange
Commission............
Section 3.23 Buy-Down Account; Application of Buy-Down
Funds..............
ARTICLE IV
SERVICER'S CERTIFICATE
Section 4.01 Servicer's
Certificate.......................................
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01
Distributions................................................
Section 5.02 Priorities of
Distributions..................................
Section 5.03 Allocation of
Losses.........................................
Section 5.04 Statements to
Certificateholders.............................
Section 5.05 Tax Returns and Reports to
Certificateholders................
Section 5.06 Tax Matters
Person...........................................
Section 5.07 Rights of the Tax Matters Person in Respect of
the
Securities Administrator....................................
Section 5.08 REMIC Related
Covenants......................................
Section 5.09
[RESERVED]...................................................
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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.........................
Section 7.05 Assignment or Delegation of Duties by the
Servicer...........
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 AND THE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Trustee and Securities
Administrator...............
Section 9.02 Certain Matters Affecting the Trustee and
the
Securities Administrator....................................
Section 9.03 Neither the Trustee Nor the Securities
Administrator Liable for Certificates or Mortgage
Loans.......................................................
Section 9.04 Trustee and Securities Administrator May Own
Certificates................................................
Section 9.05 Eligibility Requirements for Trustee and
Securities
Administrator...............................................
Section 9.06 Resignation and Removal of Trustee and the
Securities Administrator....................................
Section 9.07 Successor Trustee or Securities
Administrator................
Section 9.08 Merger or Consolidation of Trustee or
Securities
Administrator...............................................
Section 9.09 Appointment of Co-Trustee or Separate
Trustee................
Section 9.10 Authenticating
Agents........................................
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Section 9.11 Securities Administrator's Fees and Expenses
and
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 or Securities Administrator 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...........................................
Section 11.10
Insolvency...................................................
Section 11.11 Regulation AB Compliance; Intent of Parties;
Reasonableness..............................................
EXHIBITS
Exhibit A-1 - Form of Face of
Senior Certificates....................A-1
Exhibit A-2 - Form of Face of
Residual Certificate...................A-2
Exhibit B - Form of
Face of Subordinate Certificate................B-1
Exhibit C - Form of
Reverse of all Certificates....................C-1
Exhibit D -
Addresses for Requesting Mortgage Loan
Schedule .............................................D-1
Exhibit E - Request
for Release of Documents.......................E-1
Exhibit F - Form of
Certification of Establishment
of Account............................................F-1
Exhibit G-1 - Form of
Transferor's Certificate.....................G-1-1
Exhibit G-2A - Form 1 of Transferee's
Certificate..................G-2A-1
Exhibit G-2B - Form 2 of Transferee's
Certificate..................G-2B-1
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Exhibit H - Form of
Transferee Representation
Letter for ERISA Restricted Certificates..............H-1
Exhibit I - Form of
Affidavit Regarding Transfer of
Residual Certificate..................................I-1
Exhibit J -
Contents of Servicing File.............................J-1
Exhibit K - Form of
Special Servicing Agreement....................K-1
Exhibit L - List of
Recordation States.............................L-1
Exhibit M - Form of
Initial Certification..........................M-1
Exhibit N - Form of
Final Certification............................N-1
Exhibit O - Form of
Sarbanes-Oxley Certification...................O-1
Exhibit P - Form of
Securities Administrator's
Certification.........................................P-1
Exhibit Q -
Servicing Criteria.....................................Q-1
Exhibit R-1 - Additional Form
10-D Information ....................R-1-1
Exhibit R-2 - Additional Form
10-K Information ....................R-2-1
Exhibit R-3 - Form 8-K
Information ................................R-3-1
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POOLING
AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated [______], 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, NATIONAL ASSOCIATION, as servicer (together with its
permitted
successors and assigns, the "Servicer"), LASALLE BANK NATIONAL
ASSOCIATION, as
securities administrator (together with its permitted successors
and assigns,
the "Securities Administrator"), and U.S. BANK NATIONAL
ASSOCIATION, 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, the Securities Administrator 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 three separate real estate
mortgage
investment conduits (the "Upper-Tier REMIC," the "Middle-Tier
REMIC" and the
"Lower-Tier REMIC," respectively, and each, a "REMIC"). The
Certificates (other
than the Class 1-A-R Certificate) are referred to collectively as
the "Regular
Certificates" and shall constitute "regular interests" in the
Upper-Tier REMIC.
The Uncertificated Middle-Tier Interests shall constitute the
"regular
interests" in the Middle-Tier REMIC. The Uncertificated Lower-Tier
Interests
shall constitute the "regular interests" in the Lower-Tier REMIC.
The Class R-U
Interest shall be the sole "residual interest" in the Upper-Tier
REMIC. The
Class R-M Interest shall be the sole "residual interest" in the
Middle-Tier
REMIC. The Class R-L Interest shall be the sole "residual interest"
in the
Lower-Tier REMIC. The Class 1-A-R Certificate shall represent
ownership of the
Class R-U Interest, the Class R-M Interest and the Class R-L
Interest. The
Certificates and the Uncertificated Lower-Tier Interests will
represent the
entire beneficial ownership interest in the Trust. The "latest
possible maturity
date" for federal income tax purposes of all interests created
hereby will be
the REMIC Certificate Maturity Date.
The following table sets forth characteristics of the
Certificates,
together with the minimum Denominations and integral multiples in
excess thereof
in which the Classes of Certificates shall be issuable:
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<TABLE>
<CAPTION>
Initial
Class
Integral
Certificate
Multiples
Balance or
Pass-Through Minimum
in Excess
Classes Notional
Amount
Rate
Denomination of Minimum
----------- ---------------
------------ ------------
----------
<S>
<C>
<C>
<C>
<C>
Class
1-A-1
(2)
Class
1-A-2
(2)
Class
1-A-3
(3)
Class
1-A-4
(3)
Class
1-A-5
(3)
Class
1-A-6
(2)
Class
1-A-7
[__]
Class
1-A-R
(2)
Class
2-A-1
(4)
Class
2-A-2
(4)
Class
2-A-3
(5)
Class
2-A-4
(5)
Class
2-A-5
(5)
Class
2-A-6
(4)
Class
2-A-7
[__]
Class
3-A-1
(6)
Class
3-A-2
(6)
Class
3-A-3
(6)
Class
3-A-4
(6)
Class 3-A-5
(6)
Class
3-A-6
(6)
Class
3-A-7
(6)
Class
B-1
(7)
Class
B-2
(7)
Class
B-3
(7)
Class
B-4
(7)
Class
B-5
(7)
Class
B-6
(7)
Class
B-7
(7)
</TABLE>
(1) Interest will accrue on these Certificates at a per
annum rate equal to
the Net WAC for the Group 1 Mortgage
Loans.
(2) Interest will accrue on these Certificates at a per
annum rate equal to
the Net WAC for the Group 1 Mortgage
Loans minus [__].
(3) Interest will accrue on these Certificates at a per
annum rate equal to
the Net WAC for the Group 2 Mortgage
Loans.
(4) Interest will accrue on these Certificates at a per
annum rate equal to
the Net WAC for the Group 2 Mortgage
Loans minus [__].
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(5) Interest will accrue on these Certificates at a per
annum rate equal to
the Net WAC for the Group 3 Mortgage
Loans.
(6) Interest will accrue on these 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, the Net WAC for the Group 1
Mortgage Loans, (ii) with respect to Loan
Group 2, the Net WAC for the Group 2
Mortgage Loans and (iii) with respect
to Loan Group 3, the Net WAC for the
Group 3 Mortgage Loans.
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:
10-K Filing Deadline: As defined in Section 3.22(c).
1933 Act: The Securities Act of 1933, as amended.
Accrued Certificate Interest: For any Distribution Date and
each
interest-bearing Class, one month's interest accrued during the
related Interest
Accrual Period at the applicable Pass-Through Rate on the
applicable Class
Certificate Balance or Notional Amount.
Additional Form 10-D Information: As defined in Section
3.22(b).
Additional Form 10-K Information: As defined in Section
3.22(c).
Additional Servicer: As defined in Section 3.02(e).
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 reduced by 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.
Advance: A Periodic Advance or a Servicing Advance.
Aggregate Subordinate Percentage: As to any Distribution Date,
the
aggregate Class Certificate Balance of the Subordinate Certificates
divided by
the aggregate Pool Stated Principal Balance for all Loan
Groups.
Agreement: This
Pooling and Servicing Agreement together
with all amendments hereof and supplements hereto.
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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 or an automated
valuation model
or tax assessed value (if permitted by the applicable mortgage loan
program) 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 either in an appraisal obtained at the time of
refinancing or
an automated valuation model or tax assessed value (if permitted by
the
applicable mortgage loan program), 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, National Association, 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
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Illinois, each state in which the servicing offices of the Servicer
are located
or each state in which the Corporate Trust Office is located are
required or
authorized by law or executive order to be closed.
Buy-Down Account: The separate Eligible Account or Accounts
created
and maintained by the Servicer pursuant to Section 3.23.
Buy-Down Agreement: An agreement governing the application of
Buy-Down Funds with respect to a Buy-Down Mortgage Loan.
Buy-Down Funds: Money advanced by a builder, seller or other
interested party to reduce a Mortgagor's monthly payment during the
initial
years of a Buy-Down Mortgage Loan.
Buy-Down Mortgage Loan: Any Mortgage Loan in respect of which,
pursuant to a Buy-Down Agreement, the monthly interest payments
made by the
related Mortgagor will be less than the scheduled monthly interest
payments on
such Mortgage Loan, with the resulting difference in interest
payments being
provided from Buy-Down Funds.
Calculated Principal Distribution: As defined in Section
5.03(d).
Capitalized Advance Amount: As of any date, the amount of
Advances
that have been added to the unpaid principal balance of a Mortgage
Loan in
connection with a Servicer Modification.
Certificate: Any of the Banc of America Mortgage [_____] Trust,
Mortgage Pass-Through Certificates, Series [_____] that are issued
pursuant to
this Agreement.
Certificate Account: The Eligible Account created and maintained
by
the Securities Administrator pursuant to Section 3.08(c) in the
name of the
Securities Administrator for the benefit of the Certificateholders
and
designated "LaSalle Bank National Association, in trust for
registered holders
of Banc of America Mortgage [_____] Trust, Mortgage Pass-Through
Certificates,
Series [______]." The Certificate Account shall be deemed to
consist of five
sub-accounts; one for each Group, a fourth sub-account referred to
herein as the
Middle-Tier Certificate Sub-Account, 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, LaSalle Bank National
Association;
thereafter any other Certificate Custodian acceptable to the
Depository and
selected by the Securities Administrator.
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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
Securities Administrator 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(c).
Class: As to the Certificates, the
Class 1-A-1, Class 1-A-2, Class
1-A-3, Class 1-A-4, Class 1-A-5, Class 1-A-6, Class 1-A-7, Class
1-A-R, Class
2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4, Class 2-A-5, Class
2-A-6, Class
2-A-7, Class 3-A-1, Class 3-A-2, Class 3-A-3, Class 3-A-4, Class
3-A-5, Class
3-A-6, Class 3-A-7, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5, Class
B-6 and Class B-7 Certificates, as the case may be.
Class 1-A-2 Loss Allocation Amount: With respect to any
Distribution
Date after the Senior Credit Support Depletion Date, the lesser of
(a) the Class
Certificate Balance of the Class 1-A-2 Certificates with respect to
such
Distribution Date prior to any reduction for the Class 1-A-2 Loss
Allocation
Amount and (b) the sum of the Class 1-A-3 Loss Amount, Class 1-A-4
Loss Amount
and Class 1-A-6 Loss Amount with respect to such Distribution
Date.
Class 1-A-3 Loss Amount: With respect to any Distribution Date
after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 1-A-3 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 1-A-4 Loss Amount: With
respect to any Distribution Date after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 1-A-4 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 1-A-6 Loss Allocation Amount: With respect to any
Distribution
Date after the Senior Credit Support Depletion Date, the lesser of
(a) the Class
Certificate Balance of the Class 1-A-6 Certificates with respect to
such
Distribution Date prior to any reduction for the Class 1-A-6 Loss
Allocation
Amount and (b) the sum of the Class 1-A-3 Loss Amount and Class
1-A-4 Loss
Amount with respect to such Distribution Date.
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Class 1-A-6 Loss Amount: With respect to any Distribution Date
after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 1-A-6 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 1-A-7 Notional Amount: As to any Distribution Date and
the
Class 1-A-7 Certificates, the sum of the Class Certificate Balances
of the Class
1-A-3 and Class 1-A-4 Certificates.
Class 2-A-2 Loss Allocation Amount: With respect to any
Distribution
Date after the Senior Credit Support Depletion Date, the lesser of
(a) the Class
Certificate Balance of the Class 2-A-2 Certificates with respect to
such
Distribution Date prior to any reduction for the Class 2-A-2 Loss
Allocation
Amount and (b) the sum of the Class 2-A-3 Loss Amount, Class 2-A-4
Loss Amount
and Class 2-A-6 Loss Amount with respect to such Distribution
Date.
Class 2-A-3 Loss Amount: With respect to any Distribution Date
after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 2-A-3 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 2-A-4 Loss Amount: With respect to any Distribution Date
after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 2-A-4 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 2-A-6 Loss Allocation Amount: With respect to any
Distribution
Date after the Senior Credit Support Depletion Date, the lesser of
(a) the Class
Certificate Balance of the Class 2-A-6 Certificates with respect to
such
Distribution Date prior to any reduction for the Class 2-A-6 Loss
Allocation
Amount and (b) the sum of the Class 2-A-3 Loss Amount and Class
2-A-4 Loss
Amount with respect to such Distribution Date.
Class 2-A-6 Loss Amount: With respect
to any Distribution Date after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 2-A-6 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 2-A-7 Notional Amount: As to any Distribution Date and
the
Class 2-A-7 Certificates, the sum of the Class Certificate Balances
of the Class
2-A-3 and Class 2-A-4 Certificates.
Class 3-A-2 Loss Allocation Amount: With respect to any
Distribution
Date after the Senior Credit Support Depletion Date, the lesser of
(a) the Class
Certificate Balance of the Class 3-A-2 Certificates with respect to
such
Distribution Date prior to any reduction for the Class 3-A-2 Loss
Allocation
Amount and (b) the sum of the Class 3-A-3 Loss Amount, Class 3-A-4
Loss Amount
and Class 3-A-7 Loss Amount with respect to such Distribution
Date.
Class
3-A-3 Loss Amount: With respect to any Distribution Date after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the
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Class 3-A-3 Certificates would be reduced as a result of the
allocation of any
reduction pursuant to Section 5.03(b) to such Class, without regard
to the
operation of Section 5.03(e).
Class 3-A-4 Loss Amount: With respect to any Distribution Date
after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 3-A-4 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 3-A-7 Loss Allocation Amount: With respect to any
Distribution
Date after the Senior Credit Support Depletion Date, the lesser of
(a) the Class
Certificate Balance of the Class 3-A-7 Certificates with respect to
such
Distribution Date prior to any reduction for the Class 3-A-7 Loss
Allocation
Amount and (b) the sum of the Class 3-A-3 Loss Amount and Class
3-A-4 Loss
Amount with respect to such Distribution Date.
Class 3-A-7 Loss Amount: With respect to any Distribution Date
after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 3-A-7 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class Certificate Balance: With respect to any Class (other than
the
Interest Only Certificates) and any date of determination, and
subject to
Section 5.03(f), the Initial Class Certificate Balance of such
Class, minus (A)
the sum of (i) all distributions of principal allocated thereto,
(ii) all
reductions in Class Certificate Balance previously allocated
thereto pursuant to
Section 5.03(b) and (iii) any reduction allocated to a Class
pursuant to Section
5.03(e) plus (B) the sum of (i) all increases in Class Certificate
Balance
previously allocated thereto pursuant to Section 5.03(b) and (ii)
any increases
allocated to a Class pursuant to Section 5.03(e). The Class 1-A-7
and Class
2-A-7 Certificates are Interest Only Certificates and have no Class
Certificate
Balance.
Class Interest Shortfall: For any Distribution Date and each
interest-bearing Class, the amount by which Accrued Certificate
Interest for
such Class (as reduced pursuant to Section 5.02(c)) exceeds the
amount of
interest actually distributable on such Class on such Distribution
Date pursuant
to clause (i) of the definition of "Interest Distribution
Amount."
Class Unpaid Interest Shortfall: As to any Distribution Date
and
each interest-bearing Class, the amount by which the aggregate
Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds the
amount of
interest actually distributable on such Class on such prior
Distribution Dates
pursuant to clause (ii) of the definition of "Interest Distribution
Amount."
Closing Date: [_______].
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 [__] of the
Pool Stated Principal Balances of the Loan Groups. To the extent
that
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the aggregate Prepayment Interest Shortfall for a Distribution Date
exceeds
Compensating Interest, the Compensating Interest for such
Distribution Date
shall be allocated among the Loan Groups in proportion to the
respective
Prepayment Interest Shortfalls relating to such Loan Groups.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: With respect to the Securities
Administrator, the principal corporate trust office of the
Securities
Administrator 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 135 South LaSalle
Street, Suite 1511,
Chicago, Illinois, 60603, Attention: Global Securities and Trust
Services -
BOAMS [_____] or at such other address as the Securities
Administrator may
designate from time to time by notice to the Certificateholders,
the Depositor,
the Trustee and the Servicer. With respect to the Trustee, the
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 209 South LaSalle
Street,
Suite 300, Chicago, Illinois 60604, Attention: Corporate Trust
Services, BOAMS,
Series [_____], or at such other address as the Trustee may
designate from time
to time by notice to the Certificateholders, the Depositor, the
Securities
Administrator and the Servicer.
Corresponding Upper-Tier Class or Classes: As to the following
Uncertificated Middle-Tier Interests, the Corresponding Upper-Tier
Class or
Classes, as follows:
Uncertificated Corresponding
Upper-Tier
Middle-Tier Interest Class or Classes
----------------------
-----------------------------------------
Class 1-A-M2 Interest Class 1-A-2 and Class 1-A-6
Certificates
Class 1-A-M3 Interest Class 1-A-3, Class 1-A-4
and Class 1-A-7
Certificates
Class 1-A-MUR Interest Class 1-A-R Certificate
Class 2-A-M2 Interest Class 2-A-2 and Class 2-A-6
Certificates
Class 2-A-M3 Interest Class 2-A-3, Class 2-A-4
and Class 2-A-7
Certificates
Class 3-A-M2 Interest Class 3-A-2, Class 3-A-3,
Class 3-A-4 and
Class 3-A-7 Certificates
Class B-M1 Interest Class B-1, Class
B-2, Class B-3, Class
B-4, Class B-5, Class B-6 and Class B-7
Certificates
Custodian: Initially, the Securities Administrator, and
thereafter
the Custodian, if any, hereafter appointed by the Trustee pursuant
to Section
9.12.
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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: [______].
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 [____] for Loan Group 1, [_____] for Loan Group
2 and
[_______] for Loan Group 3.
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.
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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).
Denomination: The amount, if any, specified on the face of each
Certificate (other than an Interest Only Certificate) of a Class
representing
the principal portion of the Initial Class Certificate Balance of
such Class
evidenced by such Certificate. As to any Interest Only Certificate
of a Class,
the amount specified on the face of such Certificate representing
the portion of
the Initial Notional Amount of such Class evidenced by such
Certificate. The
Classes of Certificates shall be available to investors in the
minimum
Denominations of initial Certificate Balance or initial notional
amount and
integral multiples in excess thereof as set forth in the
Preliminary Statement.
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 ("DTC"), the nominee
of
which is Cede & Co., as the registered Holder of the Book-Entry
Certificates or
any successor thereto appointed in accordance with this Agreement.
The
Depository shall at all times be a "clearing corporation" as
defined in Section
8-102(3) of the Uniform Commercial Code of the State of New
York.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As to any Distribution Date, the 16th day of
the
month of the related Distribution Date or, if such 16th day is not
a Business
Day, the Business Day immediately preceding such 16th day.
Distribution Date: The 20th day of each month beginning in
[_____]
(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.
Electronic Recording: A mortgage or a mortgage-related document
created, generated, sent, communicated, received, or stored by
electronic means
(that complies with the requirements of the Electronic Signatures
in Global and
National Commerce Act or the Uniform Electronic Transactions Act,
as applicable)
that has been accepted for recording by a participating county land
records
office which accepts such electronic record of a mortgage or a
mortgage-related
document as an alternative to recordation of the original paper
form of such
document.
Eligible Account: Any of (i) an account or accounts maintained
with
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
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<PAGE>
subsidiary of a holding company, the debt obligations of such
holding company)
have the highest short-term ratings (or, in the case of [__], a
long-term rating
of at least "BBB+" if no short-term rating is available) of each
Rating Agency
at the time any amounts are held on deposit therein, or (ii) 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
(iii) 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 Securities Administrator or Bank of
America. If an
account ceases to be an Eligible Account under clause (i) and does
not otherwise
qualify under clause (ii) or (iii), the account will be moved
within 30 days to
a depository meeting the ratings criteria contained in clause
(i).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificates: Any Class B-5, Class B-6 or Class
B-7
Certificate.
Escrow Account: As defined in Section 3.09(a).
Escrow Payments: The amounts constituting taxes, assessments,
Primary Insurance Policy premiums, fire and hazard insurance
premiums and other
payments as may be required to be escrowed by the Mortgagor with
the mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Events of Default: As defined in Section 8.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds of
such Mortgage
Loan received in the calendar month in which such Mortgage Loan
became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed
to the
Servicer as Nonrecoverable Advance(s) with respect to such Mortgage
Loan
pursuant to Section 3.11(a)(iv), 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.
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Distribution Date: The Distribution Date on which the
final
distribution in respect of the Certificates will be made pursuant
to Section
10.01.
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<PAGE>
Final Scheduled Maturity Date: The Final Scheduled Maturity Date
for
each Class of Senior Certificates and each Class of Subordinate
Certificates is
[_______] which corresponds to the "latest possible maturity date"
for purposes
of Section 860G(a)(1) of the Internal Revenue Code of 1986, as
amended.
Financial Market Service: Bloomberg Financial Service and any
other
financial information provider designated by the Depositor by
written notice to
the Securities Administrator and the Trustee.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
Fitch: Fitch Ratings, or any successor thereto.
Form 8-K: As defined in Section 3.22(a).
Form 8-K Information: As defined in Section 3.22(d).
Form 10-D: As defined in Section 3.22(a).
Form 10-K: As defined in Section 3.22(a).
Fractional Interest: As defined in Section 5.02(d).
Gross Margin: As to each Mortgage Loan, the fixed percentage
set
forth in the related Mortgage Note and indicated in the Mortgage
Loan Schedule
as the "Gross Margin," which percentage is added to the Index on
each Rate
Adjustment Date to determine (subject to rounding, the Periodic Cap
and the Rate
Ceiling) the Mortgage Interest Rate on such Mortgage Loan until the
next Rate
Adjustment Date.
Group:
Any of Group 1, Group 2 or Group 3.
Group 1: The Group 1 Senior Certificates.
Group 1 Lower-Tier Rate: A per annum rate equal to the Net WAC
for
the Group 1 Mortgage Loans.
Group 1 Mortgage Loan: Each Mortgage Loan listed on the
Mortgage
Loan Schedule as a Group 1 Mortgage Loan.
Group 1 Senior Certificates: The Class 1-A-1, Class 1-A-2,
Class
1-A-3, Class 1-A-5, Class 1-A-4, Class 1-A-6, Class 1-A-7 and Class
1-A-R
Certificates.
Group 2: The Group 2 Senior Certificates.
Group 2 Lower-Tier Rate: A per annum rate equal to the Net WAC
for
the Group 2 Mortgage Loans.
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Group 2 Mortgage Loan: Each Mortgage Loan listed on the
Mortgage Loan Schedule as a Group 2 Mortgage Loan.
Group 2 Senior Certificates: The Class 2-A-1, Class 2-A-2,
Class
2-A-3, Class 2-A-4, Class 2-A-5, Class 2-A-6 and Class 2-A-7
Certificates.
Group 3: The Group 3 Senior Certificates.
Group 3 Lower-Tier Rate: A per annum rate equal to the Net WAC
for
the Group 3 Mortgage Loans.
Group 3 Mortgage Loan: Each Mortgage Loan listed on the
Mortgage
Loan Schedule as a Group 3 Mortgage Loan.
Group 3 Senior Certificates: The
Class 3-A-1, Class 3-A-2, Class
3-A-3, Class 3-A-4, Class 3-A-5, Class 3-A-6 and Class 3-A-7
Certificates.
Group Subordinate Amount: With respect to any Distribution Date
and
any Loan Group, the excess of the Pool Stated Principal Balance for
such Loan
Group over the aggregate Class Certificate Balance of the Senior
Certificates of
the Related Group immediately prior to such date.
Holder: A Certificateholder.
Independent: When used with respect to any specified Person
means
such a Person who (i) is in fact independent of the Depositor and
the Servicer,
(ii) does not have any direct financial interest or any material
indirect
financial interest in the Depositor or the Servicer or in an
affiliate of either
of them, and (iii) is not connected with the Depositor or the
Servicer as an
officer, employee, promoter, underwriter, trustee, partner,
director or person
performing similar functions.
Index: As to any Mortgage Loan and Rate Adjustment Date, a rate
per
annum that is defined to be the arithmetic mean of the London
interbank offered
rate quotations for one year U.S. Dollar-denominated deposits, as
published in
The Wall Street Journal and most recently available either (i) as
of the first
Business Day in the month preceding the month of the applicable
Rate Adjustment
Date or (ii) forty-five days before the applicable Rate Adjustment
Date or, in
the event that such index is no longer available, a substitute
index selected by
the Servicer in accordance with the terms of the related Mortgage
Note.
Initial Class Certificate Balance: As to each Class of
Certificates
(other than the Interest Only Certificates), the Class Certificate
Balance set
forth in the Preliminary Statement. The Interest Only Certificates
have no
Initial Class Certificate Balance.
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.
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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
interest-bearing Class of Certificates, the period from and
including the first
day of the calendar month preceding the calendar month of such
Distribution Date
to but not including the first day of the calendar month of such
Distribution
Date.
Interest Distribution Amount: For any Distribution Date and
each
interest-bearing Class, the sum of (i) the Accrued Certificate
Interest, subject
to reduction pursuant to Section 5.02(c) and (ii) any Class Unpaid
Interest
Shortfall for such Class.
Interest Only Certificates: Any Class of Certificates entitled
to
distributions of interest, but no distributions of principal. The
Class 1-A-7
and Class 2-A-7 Certificates are the only Classes of Interest Only
Certificates.
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
unreimbursed
Advances.
Loan Group: Any of Loan Group 1, Loan Group 2 or Loan Group 3.
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-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).
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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 amounts held
in respect
of the Middle-Tier Certificate Sub-Account or 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).
Middle-Tier Certificate Sub-Account: The sub-account of the
Certificate Account designated by the Securities Administrator
pursuant to
Section 3.08(f).
Middle-Tier Distribution Amount: As defined in Section 5.02(a).
Middle-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 held in the
Middle-Tier Certificate
Sub-Account.
Monthly Covered Amount: As defined in the Mortgage Loan
Purchase
Agreement.
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 (i)
any related
Debt Service Reduction and any Deficient Valuation that affects the
amount of
the monthly payment due on such Mortgage Loan, (ii) the Monthly
Covered Amount
representing such scheduled monthly payment and (iii) any Servicer
Modification,
without giving effect to any extension granted or agreed to by the
Servicer
pursuant to Section 3.21.
Moody's: Moody's Investors Service, Inc., or any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on a Mortgaged Property securing a Mortgage Note or
creating a first
lien on a leasehold interest.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum
rate
of interest at which interest accrues on the principal balance of
such Mortgage
Loan, as adjusted from time to time in accordance with the terms of
the related
Mortgage Note (as the same may be amended in accordance with any
Servicer
Modification), which rate is (a) prior to the first Rate Adjustment
Date for
each such Mortgage Loan, the initial Mortgage Interest Rate for
such Mortgage
Loan indicated on the Mortgage Loan Schedule and (b) from and after
such Rate
Adjustment Date, the sum of the Index, as of the Rate Adjustment
Date applicable
to such Due Date, and the Gross Margin, rounded as set forth in
such Mortgage
Note, subject to the Periodic Cap and the Rate Ceiling applicable
to such
Mortgage Loan at any time during the life of such Mortgage
Loan.
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Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated [____________] 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, the deletion of Defective Mortgage Loans pursuant to the
provisions of
this Agreement or upon a Servicer Modification in accordance with
Section 3.21)
transferred to the Trustee as part of the Trust Estate and from
time to time
subject to this Agreement, setting forth the following information
with respect
to each Mortgage Loan as of the Cut-off Date (or, with respect to
Substitute
Mortgage Loans or, upon a Servicer Modification, as of the close of
business on
the day of substitution or the day on which such modification
becomes
effective): (i) the Mortgage Loan identifying number; (ii) a code
indicating
whether the Mortgaged Property is owner-occupied; (iii) the
property type for
each Mortgaged Property; (iv) the original months to maturity or
the remaining
months to maturity from the Cut-off Date; (v) the Loan-to-Value
Ratio at
origination; (vi) the Mortgage Interest Rate as of the Cut-off
Date; (vii) the
date on which the first Monthly Payment was due on the Mortgage
Loan, and, if
such date is not the Due Date currently in effect, such Due Date;
(viii) the
stated maturity date; (ix) the amount of the Monthly Payment as of
the Cut-off
Date; (x) the paid-through date; (xi) the original principal amount
of the
Mortgage Loan; (xii) the principal balance of the Mortgage Loan as
of the close
of business on the Cut-off Date, after application of payments of
principal due
on or before the Cut-off Date, whether or not collected, and after
deduction of
any payments collected of scheduled principal due after the Cut-off
Date; (xiii)
a code indicating the purpose of the Mortgage Loan; (xiv) a code
indicating the
documentation style; (xv) the Appraised Value; (xvi) the first Rate
Adjustment
Date; (xvii) the Rate Ceiling; (xviii) the Periodic Cap; (xix) the
Gross Margin;
(xx) the closing date of such Mortgage Loan and (xxi) the Loan
Group 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, as the
same may be
modified in accordance with any Servicer Modification.
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.
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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 the
Servicing Fee Rate.
Net WAC: As to any Loan Group and any Distribution Date, the
weighted average of the Net Mortgage Interest Rates of the Mortgage
Loans in
such Loan Group (based on the Stated Principal Balances of the
Mortgage Loans in
such Loan Group on the Due Date in the month preceding the month of
such
Distribution Date).
Non-Supported Interest Shortfalls: As to any Distribution Date,
the
amount, if any, by which the aggregate of Prepayment Interest
Shortfalls exceeds
Compensating Interest for such Distribution Date.
Non-U.S. Person: A Person other than
a U.S. Person.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made in respect of a Mortgage Loan which has not
been previously
reimbursed and which, in the good faith judgment of the Servicer,
will not or,
in the case of a proposed Advance, would not be ultimately
recoverable from the
related Mortgagor, related Liquidation Proceeds, or other
recoveries in respect
of the related Mortgage Loan. Notwithstanding the foregoing, an
Advance in
respect of principal and/or interest (or other amounts) which are
subsequently
forgiven as a Servicer Modification shall be deemed a
Non-Recoverable Advance.
Notional Amount: With respect to: (i) the Class 1-A-7
Certificates
and any date of determination, the Class 1-A-7 Notional Amount and
(ii) the
Class 2-A-7 Certificates and any date of determination, the Class
2-A-7 Notional
Amount.
OCC: The Office of the Comptroller of the Currency.
Offered Certificates: The Senior, Class B-1, Class B-2, Class
B-3
and Class B-4 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 or the
Securities
Administrator, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to
the
Trustee if such opinion is to be addressed to the Trustee, or
acceptable to the
Securities Administrator if such opinion is to be addressed to the
Securities
Administrator, 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
three separate REMICs or compliance with the REMIC Provisions must
be an opinion
of Independent counsel.
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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
[___]
Class
B-2
[___]
Class
B-3
[___]
Class
B-4
[___]
Class
B-5
[___]
Class
B-6
[___]
Class
B-7
[___]
Original Subordinate Class Certificate Balance: [________]
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
which
was not the subject of a Principal Prepayment in Full prior to such
Due Date,
which did not become a Liquidated Mortgage Loan prior to such Due
Date and which
was not purchased from the Trust prior to such Due Date pursuant to
Section 2.02
or 2.04.
Ownership Interest: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: As to each Class of interest-bearing
Certificates, the per annum rate set forth or described in the
Preliminary
Statement.
Paying Agent: As defined in Section 9.13.
Percentage Interest: As to any Certificate, the percentage
obtained
by dividing the Denomination of such Certificate by the Initial
Class
Certificate Balance, as applicable, of the Class of which such
Certificate is a
part.
Periodic Advance: The payment required to be made by
the Servicer
with respect to any Distribution Date pursuant to Section 3.20, the
amount of
any such payment being equal to the aggregate of Monthly Payments
(net of the
Servicing Fee) on the Mortgage Loans (including any REO Property)
that were due
on the related Due Date and not received as of the close of
business on the
related Determination Date, less the aggregate amount of any such
delinquent
payments that the Servicer has determined would constitute a
Nonrecoverable
Advance if advanced.
Periodic Cap: For each Mortgage Loan, the applicable limit on
adjustment of the Mortgage Interest Rate for each Rate Adjustment
Date specified
in the applicable Mortgage Note and designated as such in the
Mortgage Loan
Schedule.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States, Freddie Mac, Fannie Mae or any agency or
instrumentality of the
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United States when such obligations are backed by the full faith
and
credit of the United States; provided that such obligations of
Freddie Mac or Fannie Mae 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 [__] by [__],
[___]
by [___] and [___] by [___];
(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 [__]
by
[___], [___] by [___] and [___] 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
[__] by [____], [___] by [___] and [___] by [___];
(v) investments in money market funds (including funds of the
Trustee or its affiliates, the Securities Administrator or its
affiliates, or funds for which an affiliate of the Trustee or
the
Securities Administrator acts as advisor, as well as funds for
which
the Trustee or the Securities Administrator and their
respective
affiliates may receive compensation) rated [___] by [___],
either
[___] or [____] by [___] and [___] by [___] (if rated by [___])
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 three 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
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<PAGE>
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 the 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 the
Residual Certificate to incur tax liability that would not be
imposed other than
on account of such transfer. The terms "United States," "State"
and
"international organization" shall have the meanings set forth in
Code Section
7701 or successor provisions.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Physical Certificates: The Class 1-A-R, Class B-5, Class
B-6 and Class B-7 Certificates.
Plan: As defined in Section 6.02(e).
Pool Distribution Amount: As to any Distribution Date and Loan
Group, the excess of (a) the sum of (i) the aggregate of (A) the
interest
portion of any Monthly Payment on a Mortgage Loan in such Loan
Group (net of the
Servicing Fee) and the principal portion of any Monthly Payment on
a Mortgage
Loan in such Loan Group due on the Due Date in the month in which
such
Distribution Date occurs and which is received prior to the
related
Determination Date (or in the case of any Monthly Covered Amount,
the related
Remittance Date) and (B) all Periodic Advances and payments of
Compensating
Interest made by the Servicer in respect of such Loan Group and
Distribution
Date deposited to the Servicer Custodial Account pursuant to
Section
3.08(b)(vii); (ii) all Liquidation Proceeds received on the
Mortgage Loans in
such Loan Group during the preceding calendar month and deposited
to the
Servicer Custodial Account pursuant to Section 3.08(b)(iii); (iii)
all Principal
Prepayments (other than Total Covered Amounts) received on the
Mortgage Loans in
such Loan Group during the month preceding the month of such
Distribution Date
and deposited to the Servicer Custodial Account pursuant to Section
3.08(b)(i)
during such period and all Total Covered Amounts received and
deposited in the
Servicer Custodial Account by the related Remittance Date; (iv) in
connection
with Defective Mortgage Loans in such Loan Group, 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)
and (v) in respect of such Distribution Date and such Loan Group;
(vi) any
Reimbursement Amount required to be included pursuant to Section
5.02(a); and
(vii) any Recovery with respect to such Distribution Date over (b)
any (i)
amounts permitted to be withdrawn from the Servicer Custodial
Account pursuant
to clauses (i) through (viii) inclusive and clause (xi) of Section
3.11(a) in
respect of such Loan Group and (ii) amounts permitted to be
withdrawn from the
Certificate Account pursuant to clause (i) of Section 3.11(b) in
respect of such
Loan Group.
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<PAGE>
Pool Stated Principal Balance: As to any Distribution Date and
Loan
Group, the aggregate Stated Principal Balance of all Mortgage Loans
in such Loan
Group as of the Due Date in the month preceding the month in which
such
Distribution Date occurs.
Prepayment Interest Shortfall: As to any
Distribution Date and each
Mortgage Loan subject to a Principal Prepayment received during the
calendar
month preceding such Distribution Date, the amount, if any, by
which one month's
interest at the related Mortgage Interest Rate (net of the
Servicing Fee) on
such Principal Prepayment exceeds the amount of interest paid in
connection with
such Principal Prepayment.
Primary Insurance Policy: Each policy of primary mortgage
guaranty
insurance or any replacement policy therefor with respect to any
Mortgage Loan,
in each case issued by an insurer acceptable to Fannie Mae or
Freddie Mac.
Prime Rate: The prime rate announced to be in effect from time
to
time, as published as the average rate in The Wall Street
Journal.
Principal Amount: As to any Distribution Date and Loan Group,
the
sum of (i) the sum of (a) the aggregate of the principal portion of
each Monthly
Payment due on each Mortgage Loan in such Loan Group on the related
Due Date,
(b) the aggregate of 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 received during the calendar month
preceding the
month of such Distribution Date, (c) the aggregate of any
Substitution
Adjustment Amount in connection with a Defective Mortgage Loan in
such Loan
Group received during the calendar month preceding the month of
such
Distribution Date, (d) the aggregate of 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) (1) the aggregate of, 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 minus (2) any Capitalized Advance Amounts
reimbursed
to the Servicer from Liquidation Proceeds with respect to such
Distribution Date
and such Loan Group, and (f) (1) the aggregate of all Principal
Prepayments on
the Mortgage Loans in such Loan Group received during the calendar
month
preceding the month of such Distribution Date minus (2) any
Capitalized Advance
Amounts reimbursed to the Servicer from all Principal Prepayments
with respect
to such Distribution Date and such Loan Group; and (ii) the
Recovery for such
Loan Group for such Distribution Date.
Principal Prepayment: Any payment or other recovery of principal
on
a Mortgage Loan (other than Liquidation Proceeds) which is received
in advance
of its scheduled Due Date and is not accompanied by an amount of
interest
representing scheduled interest due on any date or dates in any
month or months
subsequent to the month of prepayment including the principal
portion of any
Total Covered Amount.
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Principal Prepayment in Full: Any Principal Prepayment of the
entire
principal balance of a Mortgage Loan.
Private Certificates: The Class B-5, Class B-6 and Class B-7
Certificates.
Pro Rata Share: As to any Distribution Date and any Class of
Subordinate Certificates that is not a Restricted Class, the
portion of the
Subordinate Principal Distribution Amounts allocable to such Class,
equal to the
product of the Subordinate Principal Distribution Amounts for the
Subordinate
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 Subordinate
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 Fannie Mae or Freddie Mac.
Rate Adjustment Date: As to each Mortgage Loan, the Due Date on
which date an adjustment to the Mortgage Interest Rate of such
Mortgage Loan
becomes effective under the related Mortgage Note, which Due Date
is the date
set forth in the Mortgage Loan Schedule as the first Rate
Adjustment Date and
each subsequent anniversary thereof.
Rate Ceiling: The maximum per annum Mortgage Interest Rate
permitted
under the related Mortgage Note.
Rating Agency: Each of [___], [___] and [___]. If any such
organization or a successor is no longer in existence, "Rating
Agency" shall be
such nationally recognized statistical rating organization, or
other comparable
Person, as is designated by the Depositor, notice of which
designation shall be
given to the Trustee and the Securities Administrator. 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 any
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<PAGE>
Distribution Date and each Mortgage Loan that (i) has become the
subject of a
Debt Service Reduction, the amount, if any, by which the principal
portion of
the related Monthly Payment has been reduced or (ii) has become the
subject of a
Servicer Modification, any permanent reduction in the principal
balance thereof
resulting from such Servicer Modification.
Record Date: The last day of the month (or, if such day is not
a
Business Day, the preceding Business Day) preceding the month in
which the
related Distribution Date occurs.
Recovery: As to any Distribution Date and Loan Group, the sum of
all
amounts received during the calendar month preceding the month of
such
Distribution Date on each Mortgage Loan in such Loan Group
subsequent to such
Mortgage Loan being determined to be a Liquidated Mortgage
Loan.
Refinance Mortgage Loan: Any Mortgage Loan the proceeds of
which
were not used to purchase the related Mortgaged Property.
Regular Certificates: As defined in the Preliminary Statement
hereto.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Securities and Exchange Commission in the adopting
release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed. Reg. 1,506
(Jan. 7, 2005)) or by the staff of the Securities and Exchange
Commission, or as
may be provided by the Securities and Exchange Commission or its
staff from time
to time.
Reimbursement Amount: As defined in Section 2.04.
Related Group: For Loan Group 1, Group 1; for Loan Group 2, Group
2;
and for Loan Group 3, Group 3.
Related Loan Group: For Group 1, Loan Group 1; for Group 2,
Loan
Group 2; and for Group 3, Loan Group 3.
Relevant Servicing Criteria: The Servicing Criteria applicable
to
the various parties, as set forth on Exhibit Q attached hereto.
For
clarification purposes, multiple parties can have responsibility
for the same
Relevant Servicing Criteria. With respect to a Servicing Function
Participant
engaged by the Securities Administrator or the Servicer, the term
"Relevant
Servicing Criteria" may refer to a portion of the Relevant
Servicing Criteria
applicable to the Securities Administrator or the Servicer.
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
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<PAGE>
the most recently ended calendar month is less than (ii) interest
accrued
pursuant to the terms of the Mortgage Note on the same principal
amount and for
the same period as the interest collectible on such Mortgage Loan
for the most
recently ended calendar month.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Certificate Maturity Date: The "latest possible maturity
date"
of the Regular Certificates as that term is defined in Section
2.07.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits, which appear at
Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions,
and regulations promulgated thereunder, as the foregoing may be in
effect from
time to time, as well as provisions of applicable state laws.
Remittance Date: As to any Distribution Date, by 2:00 p.m.
Eastern
time on the Business Day immediately preceding such Distribution
Date.
REO Disposition Period: As defined in Section 3.14.
REO Proceeds: Proceeds, net of any related expenses of the
Servicer,
received in respect of any REO Property (including, without
limitation, proceeds
from the rental of the related Mortgaged Property) which are
received prior to
the final liquidation of such Mortgaged Property.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure in
connection with a defaulted Mortgage Loan.
Reportable Event: As defined in Section 3.22(d).
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 Certificate: The Class 1-A-R Certificate.
Responsible Officer: When used with respect to the Trustee or
the
Securities Administrator, any officer of the Corporate Trust
Department of the
Trustee or the Securities
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<PAGE>
Administrator, as applicable, 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 or the
Securities Administrator, as applicable, customarily performing
functions
similar to those performed by any of the above designated officers
and having
direct responsibility for the administration of this Agreement.
Restricted Classes: As defined in Section 5.02(d).
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies,
Inc., or any successor thereto.
Securities Administrator: LaSalle Bank National Association, and
any
successors-in-interest and, if a successor securities administrator
is appointed
hereunder, such successor, as securities administrator.
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: Class 1-A-1, Class 1-A-2, Class 1-A-3,
Class
1-A-4, Class 1-A-5, Class 1-A-6, Class 1-A-7, Class 1-A-R, Class
2-A-1, Class
2-A-2, Class 2-A-3, Class 2-A-4, Class 2-A-5, Class 2-A-6, Class
2-A-7, Class
3-A-1, Class 3-A-2, Class 3-A-3, Class 3-A-4, Class 3-A-5, Class
3-A-6 and Class
3-A-7 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 of such Loan Group.
Senior Prepayment Percentage: For any Distribution Date and
Loan
Group during the seven years beginning on the first Distribution
Date, 100%. The
Senior Prepayment Percentage for any Loan Group for any
Distribution Date
occurring on or after the seventh anniversary of the first
Distribution Date
will, except as provided herein, be as follows: for any
Distribution Date in the
first year thereafter, the Senior Percentage for such Loan Group
plus 70% of the
Subordinate Percentage for such Loan Group for such Distribution
Date; for any
Distribution Date in the second year thereafter, the Senior
Percentage for such
Loan Group plus 60% of the Subordinate Percentage for such Loan
Group for such
Distribution Date; for any Distribution Date in the third year
thereafter, the
Senior Percentage for such Loan Group plus 40% of the Subordinate
Percentage for
such Loan Group for such Distribution Date; for any Distribution
Date in the
fourth year thereafter, the Senior Percentage for such Loan Group
plus 20% of
the Subordinate Percentage for such Loan Group for such
Distribution Date; and
for any Distribution Date in the fifth or later years thereafter,
the Senior
Percentage for such Loan Group for such Distribution Date, unless
(i) on any of
the foregoing Distribution Dates the Total Senior Percentage
exceeds the initial
Total Senior Percentage, in which case the Senior Prepayment
Percentage for each
Loan Group for such Distribution Date will once again equal 100%,
(ii) on any
Distribution Date before the Distribution Date occurring in [____],
the
Aggregate
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Subordinate Percentage for such Distribution Date is greater than
or equal to
twice the initial Aggregate Subordinate Percentage, in which case
the Senior
Prepayment Percentage for Loan Group 1 for such Distribution Date
will equal the
Senior Percentage for Loan Group 1 plus 50% of the Subordinate
Percentage for
Loan Group 1, the Senior Prepayment Percentage for Loan Group 2 for
such
Distribution Date will equal the Senior Percentage for Loan Group 2
plus 50% of
the Subordinate Percentage for Loan Group 2 and the Senior
Prepayment Percentage
for such Distribution Date will equal the Senior Percentage for
Loan Group 3
plus 50% of the Subordinate Percentage for Loan Group 3, or (iii)
on any
Distribution Date occurring on or after the Distribution Date in
[____], the
Aggregate Subordinate Percentage for such Distribution Date is
greater than or
equal to twice the initial Aggregate Subordinate Percentage, in
which case the
Senior Prepayment Percentage for Loan Group 1 for such Distribution
Date will
equal the Senior Percentage for Loan Group 1, the Senior Prepayment
Percentage
for Loan Group 2 for such Distribution Date will equal the Senior
Percentage for
Loan Group 2 and the Senior Prepayment Percentage for Loan Group 3
for such
Distribution Date will equal the Senior Percentage for Loan Group
3.
Notwithstanding the foregoing, no decrease in the share of the
applicable
Subordinate Percentage (for calculating the applicable Senior
Prepayment
Percentage for any Loan Group) will occur and the Senior Prepayment
Percentage
for all Loan Groups will be calculated without regard to clause
(ii) or (iii) in
the preceding sentence unless both of the Senior Step Down
Conditions are
satisfied.
Senior Principal Distribution Amount: As to any Distribution
Date
and Loan Group, the sum of (i) the Senior Percentage for such Loan
Group of the
amounts described in clauses (i)(a) through (d) of the definition
of "Principal
Amount" for such Distribution Date and Loan Group and (ii) the
Senior Prepayment
Percentage for such Loan Group of the amounts described in clauses
(i)(e) and
(f) and the amount described in clause (ii) of the definition of
"Principal
Amount" for such Distribution Date and Loan Group.
Senior Step Down Conditions: As of any
Distribution Date as to which
any decrease in the Senior Prepayment Percentage for any Loan Group
applies, (i)
the outstanding principal balance of all Mortgage Loans (including,
for this
purpose, any Mortgage Loans in foreclosure, any REO Property and
any Mortgage
Loan for which the Mortgagor has filed for bankruptcy after the
Closing Date and
any Mortgage Loans that were the subject of a Servicer Modification
within
twelve months prior to such Distribution 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:
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Percentage of
Original Subordinate Class
Distribution Date
Occurring
Certificate Balance
---------------------------
-------------------
[____]
[____]
[____]
[____]
[____]
[____]
[____]
[____]
[____]
[____]
[____]
[____]
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 Modification: A modification to the terms of a
Mortgage
Loan, in accordance with the terms of Section 3.21, as to which the
Mortgagor is
in default or as to which, in the judgment of the Servicer, default
is
reasonably foreseeable.
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, (iv) compliance with the obligations under Section
3.12 and (v)
any fees relating to credit counseling services (to the extent not
paid by the
borrower), including but not limited to counseling regarding
consumer credit,
money and fees in connection with any debt management and budgeting
used to aid
a borrower with respect to payments on a Mortgage Loan.
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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 Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time,
which as of
the Closing Date are listed on Exhibit Q hereto.
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, [____]
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 Function Participant: Any affiliate, third party vendor
or
Subservicer engaged by the Servicer or the Securities Administrator
that is
participating in the servicing function with respect to the
Mortgage Loans,
within the meaning of Item 1122 of Regulation AB.
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 and the
Securities Administrator by the Servicer, as such list may from
time to time be
amended.
Servicing Transfer Costs: All reasonable costs and expenses
(including attorneys' fees) incurred by the Trustee or a successor
servicer 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 or
successor servicer to correct any errors or insufficiencies in the
servicing
data or otherwise to enable the Trustee or a successor servicer to
service the
Mortgage Loans properly and effectively.
Similar Law: As defined in Section 6.02(e).
Sponsor: Bank of America, National Association.
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Stated Principal Balance: As to any Mortgage Loan and date, the
unpaid principal balance of such Mortgage Loan as of the specified
Due Date or,
if not specified, 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 or any adjustment to such amortization
schedule for any
Capitalized Advance Amounts other than the amount of such
Capitalized Advance
Amounts which have been reimbursed to the applicable Servicer from
payments on
Mortgage Loans other than the Mortgage Loans with respect to which
such
Capitalized Advance Amounts relate) after giving effect to (A) any
previous
partial Principal Prepayments and Liquidation Proceeds allocable to
principal
(other than with respect to any Liquidated Mortgage Loan) and, (B)
to the
payment of principal due on such Due Date and irrespective of any
delinquency in
payment by the related Mortgagor, (C) any Deficient Valuation and
(D) any
Realized Losses as a result of Servicer Modifications incurred
prior to such Due
Date.
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 and the Class 3-LS Interest, equal to the ratio among the
Group
Subordinate Amounts of Loan Group 1, Loan Group 2 and Loan Group
3.
Subordinate Certificates: The Class B-1, Class B-2, Class B-3,
Class
B-4, Class B-5, Class B-6 and Class B-7 Certificates.
Subordinate Percentage: As of any Distribution Date and Loan
Group,
100% minus the Senior Percentage for such Loan Group for such
Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date
and
Loan Group, 100% minus the Senior Prepayment Percentage for such
Loan Group for
such Distribution Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount equal to the sum of (i)
the
Subordinate Percentage for such Loan Group of all amounts described
in clauses
(i)(a) through (d) of the definition of "Principal Amount" for such
Distribution
Date and Loan Group and (ii) the Subordinate Prepayment Percentage
of the
amounts described in clauses (i)(e) and (f) and the amount
described in clause
(ii) of the definition of "Principal Amount" for such Distribution
Date and Loan
Group.
Subservicer: Any Person
with which the Servicer has entered into a
Subservicing Agreement and which satisfies the requirements set
forth therein.
Subservicing Agreement: Any subservicing agreement (which, in
the
event the Subservicer is an affiliate of the Servicer, need not be
in writing)
between the Servicer and any Subservicer relating to servicing
and/or
administration of certain Mortgage Loans as provided in Section
3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted for a
Defective Mortgage Loan which must, on the date of such
substitution (i) have a
Stated Principal Balance, after deduction of the principal portion
of the
Monthly Payment due in the month of substitution, not in excess of,
and not more
than 10% less than, the Stated Principal Balance of the
Defective
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Mortgage Loan; (ii) have a Net Mortgage Interest Rate equal to that
of the
Defective Mortgage Loan; (iii) have a Loan-to-Value Ratio not
higher than that
of the Defective Mortgage Loan; (iv) have a Gross Margin equal to
that of the
Defective Mortgage Loan; (v) have a Periodic Cap and Rate Ceiling
equal to that
of the Defective Mortgage Loan; (vi) have the same Index and
frequency of
mortgage interest rate adjustment as the Defective Mortgage Loan;
(vii) have a
remaining term to maturity not greater than (and not more than one
year less
than) that of the Defective Mortgage Loan; and (viii) comply with
each Mortgage
Loan representation and warranty set forth in this Agreement
relating to the
Defective Mortgage Loan. More than one Substitute Mortgage Loan may
be
substituted for a Defective Mortgage Loan if such Substitute
Mortgage Loans meet
the foregoing attributes in the aggregate.
Substitution Adjustment Amount: As defined in Section 2.02.
Tax Matters Person: Any person designated as "tax matters person"
in
accordance with Section 5.06 and the manner provided under Treasury
Regulation
ss. 1.860F-4(d) and Treasury Regulation ss. 301.6231(a)(7)-1.
Total Covered Amount: As defined in the Mortgage Loan Purchase
Agreement.
Total Senior Percentage: With respect to any Distribution Date,
the
percentage, carried six places rounded up, obtained by dividing the
aggregate
Class Certificate Balance of the Senior Certificates immediately
prior to such
Distribution Date by the aggregate Pool Stated Principal Balance 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,
the right to
receive any BPP Mortgage Loan Payment and the right to receive
amounts, if any,
payable on behalf of any Mortgagor from the Buy-Down Account
relating to any
Buy-Down Mortgage Loan. The Buy-Down Account shall not be part of
the Trust
Estate.
Trustee: U.S.
Bank National Association, and any
successors-in-interest and, if a successor trustee is appointed
hereunder, such
successor, as trustee.
Uncertificated Lower-Tier Interest: A regular interest in the
Lower-Tier REMIC which is held as an asset of the Middle-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 2-L Interest,
Class 2-LS
Interest, Class 3-L Interest and Class 3-LS Interest are
Uncertificated
Lower-Tier Interests.
Uncertificated Middle-Tier Interest: A regular interest in the
Middle-Tier REMIC which is held as an asset of the Upper-Tier REMIC
and is
entitled to monthly distributions as
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provided in Section 5.02(a) hereof. Any of the Class 1-A-M2
Interest, Class
1-A-M3 Interest, Class 1-A-MUR Interest, Class 2-A-M2 Interest,
Class 2-A-M3
Interest, Class 3-A-M2 Interest and Class B-M1 Interest are
Uncertificated
Middle-Tier Interests.
Underwriting Guidelines: The underwriting guidelines of Bank of
America.
Unscheduled Principal Amount: As to any Distribution Date and
Loan
Group, the sum of (a) (1) the aggregate of, 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 minus (2) any Capitalized Advance Amounts
reimbursed to
the Servicer from all Principal Prepayments with respect to such
Distribution
Date and such Loan Group and (b) (1) the aggregate of all Principal
Prepayments
on the Mortgage Loans in such Loan Group received during the
calendar month
preceding the month of such Distribution Date minus (2) any
Capitalized Advance
Amounts reimbursed to the Servicer from all Principal Prepayments
with respect
to such Distribution Date and such Loan Group.
Upper-Tier Certificate Sub-Account: The sub-account of the
Certificate Account designated by the Securities Administrator
pursuant to
Section 3.08(f).
Upper-Tier REMIC: As defined in the Preliminary Statement, the
assets of which consist of the Uncertificated Middle-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 Holder of
the Residual Certificate, (b) 1% of all Voting Rights shall be
allocated to the
Holders of the Class 1-A-7 Certificates, (c) 1% of all Voting
Rights shall be
allocated to the Holders of the Class 2-A-7 Certificates and (d)
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.
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Section 1.03 Fiscal Year. The fiscal year of the Trust will be
the
calendar year.
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, (iii) the Massachusetts Predatory Home
Loan Practices
Act, effective November 7, 2004 or (iv) the Indiana Home Loan
Practices Act,
effective January 1, 2005.
(b) In connection with such transfer and assignment, the
Depositor
shall deliver or cause to be delivered to the Trustee, or the
Custodian on
behalf of 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 U.S. Bank National
Association, as trustee for the
holders of the Banc of America Mortgage
Securities, Inc. Mortgage
Pass-Through Certificates, Series [____],
without recourse," or to blank 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
(or
the Electronic Recording thereof)
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
"U.S. Bank National Association, as
trustee for the holders of
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the Banc of America Mortgage
Securities, Inc. Mortgage Pass-Through
Certificates, Series [____]" (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 the
Electronic Recording thereof) 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;
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(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, or the Custodian on behalf
of 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, if any, (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, if
any, 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 or the
Custodian on behalf
of the Trustee. The Depositor shall forward or cause to be
forwarded to the
Trustee or the Custodian on the Trustee's behalf (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,
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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 and the Securities Administrator an
unqualified Opinion
of Counsel reasonably acceptable to the Trustee and the Securities
Administrator
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 any 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 any Rating
Agency to obtain
the initial ratings of the Certificates. The Trustee, the
Securities
Administrator and the Custodian 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 cause the Custodian to deliver to the Depositor, the Trustee,
the
Securities Administrator 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 cause the Custodian to review, the Mortgage Files
in its
possession, and shall cause the Custodian to deliver to the
Depositor, the
Trustee, the Securities Administrator and the Servicer a
certification in the
form of Exhibit N hereto (the "Final Certification") to the effect
that, as to
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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 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 Securities
Administrator
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 Custodian may conclusively rely on the
purported
genuineness of any such document and any signature thereon. It is
understood
that the scope of 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 or the Custodian on behalf of 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, the Securities Administrator and the Custodian.
Upon such
substitution, each Substitute Mortgage Loan shall be subject to
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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
and unreimbursed Capitalized Advance Amounts 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, or the Custodian on the Trustee's behalf, 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.
Neither the Trustee nor the Custodian, on behalf of the
Trustee,
shall be under any 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
Custodian 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).
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Section 2.03 Representations and Warranties of the Servicer.
The
Servicer hereby makes the following representations and warranties
to the
Depositor, the Securities Administrator 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
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<PAGE>
contemplated herein, or which would
materially impair the ability of the
Servicer to perform under the terms
of this Agreement.
The representations and warranties made pursuant to this
Section
2.03 shall survive delivery of the respective Mortgage Files to the
Trustee, or
to the Custodian on the Trustee's behalf, for the benefit of
the
Certificateholders. Upon discovery by any of the Depositor, the
Servicer, the
Securities Administrator or the Trustee of a breach of any of
the
representations or warranties set forth in this Section 2.03, the
party
discovering such breach shall give prompt written notice to the
other parties.
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, or
the Custodian on the Trustee's behalf;
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, or the Custodian
on the Trustee's behalf.
(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
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<PAGE>
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 Fannie Mae or
Freddie Mac. 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
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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
Fannie Mae or Freddie Mac, issued by a
title insurer acceptable to Fannie
Mae or Freddie Mac 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,
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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 related
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 25 to 30-year
adjustable rate mortgage loans having
an original term to maturity of not
more than 30 years, with interest
payable in arrears on the first day
of the month. Each Mortgage Note
requires a monthly payment which is
sufficient to fully amortize the
original principal balance over the
original term thereof and to pay
interest at the related Mortgage
Interest Rate. The Mortgage Note does not
permit negative amortization.
(xix) There is no proceeding pending or, to the Depositor's
knowledge, threatened for the total
or partial condemnation of the
Mortgaged Property. The Mortgaged
Property is in good repair and is
undamaged by waste, fire, earthquake
or earth movement, windstorm, flood,
tornado or other casualty, so as to
affect adversely the value of the
Mortgaged Property as security for
the Mortgage Loan or the use for which
the premises were intended.
(xx) The Mortgage and related Mortgage Note contain customary
and
enforceable provisions such as to
render the rights and remedies of the
holder thereof adequate for the
realization against the Mortgaged Property
of the benefits of the security
provided thereby, including (A) in the
case of a Mortgage designated as a
deed of trust, by trustee's sale, and
(B) otherwise by judicial
foreclosure. To the best of the Depositor's
knowledge, following the date of
origination of the Mortgage Loan, the
Mortgaged Property has not been
subject to any bankruptcy proceeding or
foreclosure proceeding and the
Mortgagor has not filed for protection
under applicable bankruptcy laws.
There is no homestead or other exemption
or right available to the Mortgagor
or any other person which would
interfere with the right to sell the
Mortgaged Property at a trustee's
sale or the right to foreclose the
Mortgage.
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(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 Fannie Mae or
Freddie Mac.
(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 Fannie Mae or
Freddie Mac 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 Trust
to the trustee under the deed of
trust, except in connection with a
trustee's sale after default by the
Mortgagor.
(xxv) No Mortgage Loan is a graduated payment mortgage loan, no
Mortgage Loan has a shared
appreciation or other contingent interest
feature, and no more than [___],
[___] and [____] (by Cut-off Date
Principal Balance) of the Group 1,
Group 2 and Group 3 Mortgage Loans,
respectively, are Buy-Down Mortgage
Loans.
(xxvi) The Mortgagor has received all disclosure materials
required
by applicable law with respect to
the making of mortgage loans of the same
type as the Mortgage Loan and
rescission materials required by applicable
law if the Mortgage Loan is a
Refinance Mortgage Loan.
(xxvii) Each Primary Insurance Policy to which any Mortgage Loan
is
subject, will be issued by an
insurer acceptable to Fannie Mae or Freddie
Mac, which insures that portion of
the Mortgage Loan in excess of the
portion of the Appraised Value of
the Mortgaged Property required by
Fannie Mae. 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
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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 the Custodian on the
Trustee's behalf, 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 Fannie Mae
and Freddie Mac. 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) No Mortgage Loans are secured by long-term residential
leases.
(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
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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,
or the Custodian on the Trustee's
behalf, 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 Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are
defined in the then-current S&P's LEVELS(R)
Glossary which is now Version 6.1,
Appendix E) and no Mortgage Loan
originated on or after October 1,
2002 through March 6, 2003 is governed
by the Georgia Fair Lending Act.
(xlii) No Mortgage Loan is subject to the provisions of the
Home
Ownership and Equity Protection Act
of 1994, as amended.
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 on behalf of the Trustee and
shall inure
to the benefit of the Trustee, notwithstanding any restrictive or
qualified
endorsement or assignment.
Upon discovery by any of the Depositor, the Servicer, the
Securities
Administrator, 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 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
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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) or (xli) of this Section 2.04 occurs as a result of a
violation of
an applicable predatory or abusive lending law, the Depositor shall
reimburse
the Trust for all costs or damages incurred by the Trust as a
result of the
violation of such law (such amount, the "Reimbursement Amount").
The Repurchase
Price of any repurchase described in this paragraph, the
Substitution Adjustment
Amount, if any, and any Reimbursement Amount shall be deposited in
the Servicer
Custodial Account. It is understood and agreed that, except with
respect to the
second preceding sentence, the obligation of the Depositor to
repurchase or
substitute for any Mortgage Loan or Mortgaged Property as to which
such a breach
has occurred and is continuing shall constitute the sole remedy
respecting such
breach available to Certificateholders, or to the Trustee on behalf
of
Certificateholders, and such obligation shall survive until
termination of the
Trust hereunder.
Section 2.05 Designation of Interests in the REMICs. The
Depositor
hereby designates the Classes of Senior Certificates (other than
the Class 1-A-R
Certificate) and the Classes of Subordinate Certificates as
"regular interests"
and the Class R-U Interest 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 (i) the
Uncertificated
Middle-Tier Interests as classes of "regular interests" and the
Class R-M
Interest as the single class of "residual interest" in the
Middle-Tier REMIC and
(ii) the Uncertificated Lower-Tier Interests as classes of "regular
interests"
and the Class R-L Interest 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,
Middle-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,
Middle-Tier REMIC and Lower-Tier REMIC is [_____].
Section 2.08 Execution and Delivery of Certificates. (a) The
Trustee
(i) in exchange for the Mortgage Loans and all other assets
included in the
definition of "Trust Estate," receipt of which is hereby
acknowledged,
acknowledges the issuance of and hereby declares that the
Securities
Administrator holds on its behalf the Uncertificated Lower-Tier
Interests on
behalf of the Middle-Tier REMIC and the Certificateholders, (ii) in
exchange for
the Uncertificated Lower-Tier Interests, acknowledges the issuance
of and hereby
declares that the Securities
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Administrator holds on its behalf the Uncertificated Middle-Tier
Interests on
behalf of the Upper-Tier REMIC and the Certificateholders, and
(iii) in exchange
for the Uncertificated Middle-Tier Interests, has caused the
Securities
Administrator to execute and deliver to or upon the order of the
Depositor,
Certificates in authorized Denominations.
Section 2.09 Establishment of the Trust. The Depositor does
hereby
establish, pursuant to the further provisions of this Agreement and
the laws of
the State of New York, a common law trust to be known, for
convenience, as "Banc
of America Mortgage [____] Trust" and does hereby appoint U.S. Bank
National
Association as Trustee in accordance with the provisions of this
Agreement.
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 or
agreements of
satisfaction, cancellation, default, assumption, modification,
discharge,
partial or full release, and all other comparable instruments and
agreements,
with respect to the Mortgage Loans it services, and with respect to
the related
Mortgaged Properties held for the benefit of the
Certificateholders. To the
extent that the Servicer is not permitted to execute and deliver
such documents
pursuant to the preceding sentence, 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
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service and administer the Mortgage Loans it services. 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.
Alternatively, upon the request of the Servicer, the Trustee shall
execute and
deliver to the Servicer any additional 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. The Trustee shall have no liability or responsibility
for any action
of the Servicer pursuant to any such power of attorney or other
document and
shall be indemnified by the Servicer for any claim, cost, liability
or expense
incurred by the Trustee in connection with the Servicer's use or
misuse of such
powers of attorney and other documents.
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 Securities Administrator, 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.
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(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.
(e) Notwithstanding the foregoing, to the extent the Servicer
engages any affiliate or third party vendor, including any
Subservicer, in
connection with the performance of any of its duties under this
Agreement, the
Servicer shall immediately notify the Depositor in writing of such
engagement.
To the extent the Depositor notifies the Servicer, the Securities
Administrator
and the Trustee that it has determined that any such affiliate,
third party
vendor or Subservicer is a Servicing Function Participant, the
Servicer shall
cause such Servicing Function Participant to prepare a separate
assessment and
attestation report, as contemplated by Section 3.19 of this
Agreement and
deliver such report to the Securities Administrator as set forth in
Section 3.22
of this Agreement. In addition, to the extent the Depositor
notifies the
Servicer, the Securities Administrator and the Trustee that it has
determined
that any such Servicing Function Participant would be a "servicer"
within the
meaning of Item 1101 of Regulation AB and meets the criteria in
Item
1108(a)(2)(i), (ii) or (iii) of Regulation AB (an "Additional
Servicer"), the
Servicer shall cause such Additional Servicer to prepare a separate
compliance
statement as contemplated by Section 3.18 of this Agreement and
deliver such
statement to the Securities Administrator as set forth in Section
3.22 of this
Agreement. In addition, if the Depositor determines any such
Servicing Function
Participant would be a "servicer" within the meaning of Item 1101
of Regulation
AB, the Servicer shall cause such Servicing Function Participant to
provide the
Depositor and the Securities Administrator the information required
by Section
1108(b) and 1108(c) of Regulation AB within two Business Days
following such
engagement. To the extent the Servicer terminates any such
Servicing Function
Participant that the Depositor has determined is a "servicer"
within the meaning
of Item 1101 of Regulation AB, the Servicer shall provide the
Depositor and the
Securities Administrator the information required to enable the
Securities
Administrator to accurately and timely report such event under Item
6.02 of Form
8-K (if the Trust's Exchange Act reporting requirements have not
been suspended
pursuant to Section 15(d) of the Exchange Act as set forth in
3.22(g)).
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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 Fannie
Mae in the Fannie Mae Servicing Guide or by Freddie Mac in the
Freddie Mac
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
Fannie Mae or
Freddie Mac.
Section 3.04 Access to Certain Documentation. The Servicer
shall
provide to the OCC, the OTS, the FDIC and to comparable regulatory
authorities
supervising Holders of Certificates and the examiners and
supervisory agents of
the OCC, the OTS, the FDIC and such other authorities, access to
the
documentation required by applicable regulations of the OCC, the
OTS, the FDIC
and such other authorities with respect to the Mortgage Loans. Such
access shall
be afforded upon reasonable and prior written request and during
normal business
hours at the offices designated by the Servicer; 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. 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 that was originated with a Primary
Insurance
Policy, 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 Fannie Mae 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 Fannie Mae or Freddie Mac, the Servicer shall
notify the
Securities Administrator and 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
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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, the Securities
Administrator
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. None
of the
Trustee, the Securities Administrator or the Depositor shall have
any
responsibility or liability for any action or failure to act by the
Servicer nor
shall the Trustee, the Securities Administrator 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, the Securities Administrator
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.
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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 (unless
such predecessor Servicer is the Trustee), 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.
Section 3.08 Collection of Mortgage Loan Payments; Servicer
Custodial Account; 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
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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;
(ix) any BPP Mortgage Loan Payments collected by the Servicer
pursuant to Section 3.05(b);
(x) any Buy-Down Funds required to be deposited pursuant to
Section
3.23; and
(xi) any other amounts required to be deposited hereunder.
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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 (a "Commingled Account"); provided that a Commingled
Account shall not
be permitted at any time during which (i) Fitch's senior long-term
unsecured
debt rating of Bank of America is below "A" or (ii) S&P's
senior short-term
unsecured debt rating of Bank of America is below "A-2" (or, if no
short-term
rating is available, the long-term rating is below "BBB+"). In the
event that
S&P's senior short-term unsecured debt rating of Bank of
America falls below
"A-2" (or, if no short-term rating is available, the long-term
rating falls
below "BBB+"), the Commingled Account will be moved within 30 days
to a
depository with a senior short-term unsecured debt rating of at
least "A-2" (or,
if no short-term rating is available, a long-term rating of at
least "BBB+") by
S&P. 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
benefit of the Certificateholders and the Trust until withdrawn in
accordance
with Section 3.11.
(c) The Securities Administrator shall establish and maintain,
on
behalf of the Certificateholders, the Certificate Account, which
shall be deemed
to consist of six sub-accounts. The Securities Administrator shall,
promptly
upon receipt, deposit in the Certificate Account and retain therein
the
following:
(i) the aggregate amount remitted by the
Servicer to the Securities
Administrator pursuant to Section
3.11(a)(ix);
(ii) any amount paid by the Securities Administrator 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 Securities Administrator 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 Securities Administrator and 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
Securities
Administrator in trust for the Certificateholders until disbursed
in accordance
with this Agreement or withdrawn in accordance
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with Section 3.11. In no event shall the Securities Administrator
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
Securities Administrator, 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
Securities Administrator, 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 Securities Administrator 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
Securities
Administrator in the Certificate Account, as applicable.
(e) The Servicer shall give notice to the Securities
Administrator
and 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 Securities Administrator
shall give notice
to the Servicer and the Trustee, 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 Securities Administrator and the
Trustee.
(f) The Securities Administrator shall designate each of the
Middle-Tier Certificate Sub Account and 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 Securities Administrator shall, from funds available on deposit
in the
Certificate Account, be deemed to deposit into the Middle-Tier
Certificate
Sub-Account, the Lower-Tier Distribution Amount. The Securities
Administrator
shall then immediately, from funds available in the Middle-Tier
Certificate
Sub-Account, be deemed to deposit into the Upper-Tier Certificate
Sub-Account,
the Middle-Tier Distribution Amount.
(g) With respect to any remittance received by the Securities
Administrator after the day on which such payment was due, the
Servicer shall
pay to the Securities
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Administrator interest on any such late payment at an annual rate
equal to the
Prime Rate, adjusted as of the date of each change, but in no event
greater than
the maximum amount permitted by applicable law. Such interest shall
be deposited
in the Certificate Account by the Servicer on the date such late
payment is made
and shall cover the period commencing with the day following the
day such
payment was due and ending with the Business Day on which such
payment is made,
both inclusive. The payment by the Servicer of any such interest
shall not be
deemed an extension of time for payment or a waiver of any Event of
Default. Any
payment pursuant to this paragraph made by the Servicer to the
Securities
Administrator shall be from the Servicer's own funds, without
reimbursement
therefor.
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, National
Association, in trust for registered holders of Banc of America
Mortgage [____]
Trust, Mortgage Pass-Through Certificates, [____] 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
Fannie Mae
or Freddie Mac 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.
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(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
Securities
Administrator and 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.
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 pay to the Securities Administrator and the Trustee any
amounts due to the Securities
Administrator and the Trustee under this
Agreement (including, but not
limited to, all amounts provided for under
Section 3.07, Section 8.05 and
Section 9.11);
(iii) to reimburse the Servicer for unreimbursed Advances
(including
Capitalized Advance Amounts) made by
it, such right of reimbursement
pursuant to this clause (iii) being
limited to amounts received on the
Mortgage Loan(s) relating to which
the Advances were made or the
Capitalized Advance Amounts were
created (including amounts received in
respect of BPP Mortgage Loan
Payments for such Mortgage Loan);
(iv) to reimburse the Servicer for any Nonrecoverable Advance
previously made, such right of
reimbursement pursuant to this clause (iv)
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;
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(v) to reimburse the Servicer for Insured Expenses from the
related
Insurance Proceeds;
(vi) 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;
(vii) to reimburse the Servicer or the Depositor for expenses
incurred by any of them and
reimbursable pursuant to Section 7.03;
(viii) to withdraw any amount deposited in the Servicer
Custodial
Account and not required to be
deposited therein;
(ix) on or prior to the Remittance Date, to withdraw an amount
equal
to the related Pool Distribution
Amount for such Distribution Date, to the
extent on deposit, and remit such
amount in immediately available funds to
the Securities Administrator for
deposit in the Certificate Account;
(x) to clear and terminate the Servicer Custodial Account upon
termination of this Agreement
pursuant to Section 10.01; and
(xi) to reimburse the Servicer for any Capitalized Advance
Amounts
created but only from amounts
received on or in respect of the Mortgage
Loans in the Related Loan Group
representing (A) the amount of Liquidation
Proceeds (excluding Excess Proceeds)
allocable to principal received with
respect to such Mortgage Loan that
became a Liquidated Mortgage Loan
during the calendar month preceding
the month of such Distribution Date
and (B) Principal Prepayments.
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),
(iii), (v) and (vi). 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 (iv), the Servicer shall
deliver to the
Securities Administrator 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. The Servicer
shall notify
the Depositor and the Securities Administrator of the amount,
purpose and party
paid pursuant to clause (vii) above.
(b) The Securities Administrator 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 and
prior to any distributions to Certificateholders, the Securities
Administrator
may from time to time make withdrawals from the Certificate Account
for the
following purposes:
(i) to pay to itself as compensation earnings on or investment
income with respect to funds in the
Certificate Account and to pay itself
and the Trustee any other
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amounts due to it or the Trustee
under this Agreement (including any
amounts pursuant to Section
5.10(e)), for the related Distribution Date;
(ii) to withdraw and return to the Servicer any amount deposited
in
the Certificate Account and not
required to be deposited therein; and
(iii) to clear and terminate the Certificate Account upon
termination of this Agreement
pursuant to Section 10.01.
The Securities Administrator shall notify the Depositor and the
Servicer of the amount and purpose of any payments made pursuant to
clause (ii)
above (other than any earnings or investment income with respect to
funds in the
Certificate Account).
(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 and the
Class 1-A-R
Certificate (in respect of the Class R-U Interest) 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
Fannie Mae or Freddie Mac. 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.
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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 Fannie Mae 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
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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 or if an instrument of release is
required
releasing the Mortgagor from liability on the Mortgage Loan, the
Servicer shall
prepare and 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 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, the Servicer shall execute 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 Officer's Certificate
described in
the previous sentence and 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.
Section 3.14 Realization Upon Defaulted
Mortgage Loans; REO
Property. 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
Subordinate
Certificates or a holder of a class of securities representing
interests in the
Subordinate 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
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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.
With respect to any REO Property, the deed or certificate of
sale
shall be taken in the name of the Trust 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 Securities
Administrator 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 Securities Administrator 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.
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 and the Securities Administrator 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 any of the Upper-Tier REMIC, the
Middle-Tier REMIC
or the Lower-Tier REMIC or cause any REMIC created hereunder to
fail to qualify
as a REMIC at any time that any Certificates are outstanding, or
(B) the
Securities Administrator (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
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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 any 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 and the
Securities
Administrator 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, unreimbursed Periodic Advances, unreimbursed
Capitalized Advance
Amounts and unreimbursed 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 unreimbursed Capitalized Advance Amounts 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)(iv) 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.
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
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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, the Custodian and the Servicer). Upon receipt of
such request,
the Trustee shall, or the Trustee shall cause the Custodian, as
applicable,
within seven Business Days to release the related Mortgage File to
the Servicer.
The Trustee shall or the Trustee shall cause the Custodian, as
applicable,
deliver to the Servicer 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 shall, or the Trustee
shall cause the
Custodian, as applicable, upon delivery to the Trustee (or, at the
direction of
the Trustee, the Custodian) of a Request for Release signed by a
Servicing
Officer, to 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.
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
shall give 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 Trust. 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 and the Securities Administrator for any funds received
by the
Servicer or which otherwise are collected by the Servicer as
Liquidation
Proceeds or Insurance Proceeds in
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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 Trust, the Trustee
and the
Securities Administrator and shall be and remain the sole and
exclusive property
of the Trust, subject to the applicable provisions of this
Agreement. The
Servicer also agrees that it shall not
