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POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement

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AMERICAN GENERAL FINANCE CORP

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Title: POOLING AND SERVICING AGREEMENT
Governing Law: New York     Date: 11/10/2009

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THIRD STREET FUNDING LLC,

Depositor

WELLS FARGO BANK, N.A.,
Master Servicer and Securities Administrator

PENNYMAC LOAN SERVICES, LLC,
Servicer

MOREQUITY, INC.,
Interim Subservicer

SELECT PORTFOLIO SERVICING, INC.,
Back-up Servicer

U.S. BANK NATIONAL ASSOCIATION,
Trustee

and


THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
Custodian

POOLING AND SERVICING AGREEMENT

Dated July 30, 2009

American General Mortgage Loan Trust 2009-1

American General Mortgage Pass-Through Certificates, Series 2009-1

 

 

 



 

 

 

 


TABLE OF CONTENTS

Page

ARTICLE I
DEFINITIONS

Section 1.01.

Defined Terms.

5

Section 1.02.

Accounting.

35

ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01.

Conveyance of Mortgage Loans.

36

Section 2.02.

Acceptance by Trustee or Custodian.

38

Section 2.03.

Repurchase or Substitution of Mortgage Loans.

39

Section 2.04.

Representations and Warranties of the Depositor.

42

Section 2.05.

Representations, Warranties and Covenants of the Servicer.

43

Section 2.06.

Representations, Warranties and Covenants of the Master Servicer.

45

Section 2.07.

Issuance of Certificates.

46

Section 2.08.

Execution and Delivery of Certificates.

47

ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND

Section 3.01.

Master Servicing and Servicing of the Mortgage Loans; Subservicing.

47

Section 3.02.

Delinquency and Default.

52

Section 3.03.

Collection of Mortgage Loan Payments.

53

Section 3.04.

Rights of the Depositor, the Securities Administrator and the Trustee in Respect of the Master Servicer.  53

Section 3.05.

[RESERVED].

54

Section 3.06.

Servicer Custodial Account, Master Servicer Custodial Account, Distribution Account; Exchangeable Certificates Grantor Trust Account; Interim Subservicer Custodial Account and Class P Account.  54

Section 3.07.

Collection of Taxes, Assessments and Similar Items; Escrow Accounts.

60

Section 3.08.

Permitted Withdrawals from the Servicer Custodial Account, the Master Servicer Custodial Account and the Distribution Account.  61

Section 3.09.

Maintenance of Hazard Insurance.

63

Section 3.10.

Fidelity Bond; Errors and Omissions Insurance.

64

Section 3.11.

REO Property.

65

Section 3.12.

Due-on-Sale Clauses; Assumption and Substitution Agreements.

66

Section 3.13.

Custodian to Cooperate; Release of Files.

66

Section 3.14.

Master Servicing and Servicing Compensation.

68

Section 3.15.

Annual Statement as to Compliance.

68

Section 3.16.

Annual Independent Certified Public Accountants’ Reports.

69

Section 3.17.

Access to Certain Documentation and Information Regarding the Mortgage Loans; Access to Servicing Systems and Data.  69

 

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Section 3.18.

Liability of Parties; Indemnification.

69

Section 3.19.

Monthly Advances.

71

Section 3.20.

Compensating Interest.

73

Section 3.21.

Transfer of Servicing for the Mortgage Loans.

74

ARTICLE IV
FLOW OF FUNDS

Section 4.01.

Interest and Principal Distributions.

74

Section 4.02.

Distributions of Monthly Excess Cashflow Amounts.

75

Section 4.03.

Allocation of Losses.

79

Section 4.04.

Method of Distribution.

79

Section 4.05.

Distributions on Book-Entry Certificates.

80

Section 4.06.

Statements.

80

Section 4.07.

Remittance Reports; Master Servicer’s Certificate.

83

Section 4.08.

Servicer Reports to Sellers.

84

Section 4.09.

Compliance with Withholding Requirements.

84

ARTICLE V
THE CERTIFICATES

Section 5.01.

The Certificates.

85

Section 5.02.

Registration of Transfer and Exchange of Certificates.

85

Section 5.03.

Mutilated, Destroyed, Lost or Stolen Certificates.

90

Section 5.04.

Persons Deemed Owners.

90

Section 5.05.

Appointment of Paying Agent.

91

Section 5.06.

Class R Certificate

91

Section 5.07.

Transfer of Exchangeable REMIC Certificates and Exchangeable Certificates.

91

Section 5.08.

Exchanges of Exchangeable REMIC Certificates and Exchangeable Certificates.  92

ARTICLE VI
THE SERVICER, THE MASTER SERVICER AND THE DEPOSITOR

Section 6.01.

Liability of the Servicer, the Master Servicer and the Depositor.

93

Section 6.02.

Merger or Consolidation of, or Assumption of the Obligations of, the Servicer, the Master Servicer, the Interim Subservicer, the Back-up Servicer or the Depositor.  93

Section 6.03.

Servicer and Master Servicer Not to Resign.

94

Section 6.04.

Delegation of Duties.

94

ARTICLE VII
DEFAULT

Section 7.01.

Events of Default.

95

Section 7.02.

Remedies of Trustee.

98

 

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Section 7.03.

Directions by Certificateholders and Duties of Trustee During Master Servicer Event of Default.  99

Section 7.04.

Action upon Certain Failures of the Master Servicer and upon Master Servicer Event of Default.  99

Section 7.05.

SPS or Master Servicer to Act; Trustee to Act; Appointment of Successor.

99

Section 7.06.

Notification to Certificateholders.

101

ARTICLE VIII
THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE CUSTODIAN

Section 8.01.

Duties of Trustee and Securities Administrator.

102

Section 8.02.

Certain Matters Affecting the Trustee and the Securities Administrator.

103

Section 8.03.

Neither the Trustee nor the Securities Administrator is Liable for Certificates or Mortgage Loans.  104

Section 8.04.

Trustee and Securities Administrator May Own Certificates.

105

Section 8.05.

Trustee, Custodian and Securities Administrator Compensation and Expenses.

106

Section 8.06.

Eligibility Requirements for Trustee and Securities Administrator.

106

Section 8.07.

Resignation or Removal of Trustee or Securities Administrator.

106

Section 8.08.

Successor Trustee or Securities Administrator.

107

Section 8.09.

Merger or Consolidation of Trustee, Securities Administrator or Custodian.

108

Section 8.10.

Appointment of Co-Trustee or Separate Trustee.

108

Section 8.11.

Limitation of Liability.

109

Section 8.12.

Trustee or Securities Administrator May Enforce Claims Without Possession of Certificates.  110

Section 8.13.

Suits for Enforcement.

110

Section 8.14.

Waiver of Bond Requirement.

111

Section 8.15.

Waiver of Inventory, Accounting and Appraisal Requirement.

111

Section 8.16.

Appointment of Custodian.

111

ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION

Section 9.01.

REMIC Administration.

114

Section 9.02.

Prohibited Transactions and Activities.

116

Section 9.03.

Payment with Respect to Certain Taxes.

117

Section 9.04.

Grantor Trust Administration.

117

ARTICLE X
TERMINATION

Section 10.01.

Termination.

119

Section 10.02.

Additional Termination Requirements.

120

 

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ARTICLE XI
MISCELLANEOUS PROVISIONS

Section 11.01.

Amendment.

121

Section 11.02.

Recordation of Agreement; Counterparts.

122

Section 11.03.

Limitation on Rights of Certificateholders.

123

Section 11.04.

Governing Law; Jurisdiction.

124

Section 11.05.

Notices.

124

Section 11.06.

Severability of Provisions.

125

Section 11.07.

Article and Section References.

125

Section 11.08.

[RESERVED].

125

Section 11.09.

Third Party Beneficiary.

125

Section 11.10.

Waiver of Jury Trial.

125

Section 11.11.

Acts of Certificateholders.

125

 

 

EXHIBITS

 

Exhibit A-1

 

Form of Class A-1 Certificates

Exhibit A-2

 

Form of Class A-2 Certificates

Exhibit A-3

 

Form of Class A-3 Certificates

Exhibit A-4

 

Form of Class A-4 Certificates

Exhibit A-5

 

Form of Class A-5 Certificates

Exhibit A-6

 

Form of Class A-6 Certificates

Exhibit A-7

 

Form of Class A-7 Certificates

Exhibit A-8

 

Form of Class A-8 Certificates

Exhibit A-9

 

Form of Class A-9 Certificates

Exhibit A-10

 

Form of Class A-10 Certificates

Exhibit B-1

 

Form of Class B-1 Certificates

Exhibit B-2

 

Form of Class B-2 Certificates

Exhibit C-CE

 

Form of Class CE Certificates

Exhibit C-P

 

Form of Class P Certificates

Exhibit C-R

 

Form of Class R Certificate

Exhibit D

 

Mortgage Loan Schedule

Exhibit E

 

Form of Request for Release

Exhibit F

 

Form of Certification as to Mortgage File

Exhibit G

 

Form of Lost Note Affidavit

Exhibit H

 

Form of ERISA Representation

Exhibit I

 

Form of Transferor Certificate

Exhibit J

 

Form of Transferee Certificate

Exhibit K

 

Form of Class R Certificate Transfer Affidavit

Exhibit L

 

Monthly Information Provided by Servicer to Master Servicer

Exhibit M-1

 

Daily Servicer Report to Sellers

Exhibit M-2

 

Monthly Servicer Report to Sellers

Exhibit N

 

Servicing Transfer Procedures

Exhibit O

 

Delegated Authority Guidelines

 

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Exhibit P

 

Available Combinations

Exhibit Q

 

Form of Request for Exchange of Exchangeable REMIC Certificates or Exchangeable Certificates

 

 

-v-

 


THIRD STREET FUNDING LLC, as depositor (the “ Depositor ”), WELLS FARGO BANK, N.A., as master servicer (the “ Master Servicer ”) and as securities administrator (the “ Securities Administrator ”), PENNYMAC LOAN SERVICES, LLC, as servicer (the “ Servicer ”), MOREQUITY, INC., as interim subservicer (the “ Interim Subservicer ”), SELECT PORTFOLIO SERVICING, INC., as back-up servicer (the “ Back-up Servicer ”), U.S. BANK NATIONAL ASSOCIATION, as trustee (the “ Trustee ”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as custodian (the “ Custodian ”), are entering into this Pooling and Servicing Agreement, dated July 30, 2009 (the “ Agreement ”).

PRELIMINARY STATEMENT

The Depositor intends to sell pass-through certificates (collectively, the “ Certificates ”), to be issued hereunder in multiple Classes, which in the aggregate will evidence the entire beneficial ownership interest in the Trust Fund created hereunder.  The Certificates will consist of fifteen Classes of Certificates, designated as (i) the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 and Class A-10 Certificates, (ii)  the Class B-1 and Class B-2 Certificates, (iii) the Class CE Certificates, (iv) the Class P Certificates and (v) the Class R Certificate.  The descriptions of the Lower Tier REMIC and the Upper Tier REMIC that follow are part of the Preliminary Statement.  Any inconsistencies or ambiguities in this Agreement or in the administration of this Agreement shall be resolved pursuant to the terms of Section 11.01 hereof in a manner that preserves the validity of such REMIC elections described below.

 

 

 


Lower Tier REMIC

As provided herein, the Securities Administrator will make an election to treat the segregated pool of assets consisting of the Mortgage Loans and certain other related assets subject to this Agreement as a real estate mortgage investment conduit (“ REMIC ”) for federal income tax purposes, and such segregated pool of assets will be designated as the “ Lower Tier REMIC .”  The Lower Tier REMIC shall not include the Class CE Grantor Trust, the Exchangeable Certificates Grantor Trust or any Servicer Prepayment Charge Payment Amounts.  The Class LR Interest will represent the sole class of “residual interests” in the Lower Tier REMIC for purposes of the REMIC Provisions. The following table irrevocably sets forth the designation, the Lower Tier REMIC Pass-Through Rate and the initial Uncertificated Balance for each of the Lower Tier Regular Interests.  None of the Lower Tier Regular Interests will be certificated.

Designations

Initial Uncertificated Balance

Lower Tier REMIC Pass-Through Rate

LT-AA

$1,926,538,271.08

Variable (1)

LT-A1

$5,446,570.00

Variable (1)

LT-A3

$1,269,710.00

Variable (1)

LT-A4

$1,269,710.00

Variable (1)

LT-A5

$1,269,710.00

Variable (1)

LT-A6

$1,269,710.00

Variable (1)

LT-A7

$1,269,720.00

Variable (1)

LT-B1

$1,965,855.00

Variable (1)

LT-B2

$1,965,855.00

Variable (1)

LT-ZZ

$23,590,267.57

Variable (1)

LT-P

$100.00

(2)

(1)

Calculated in accordance with the definition of “Lower Tier REMIC Pass-Through Rate” herein.

(2)

The Class LT-P Interest will not bear interest and will be entitled to all the Prepayment Charges received with respect to the Mortgage Loans.

The foregoing Lower Tier REMIC structure is intended to cause all the cash from the Mortgage Loans to flow through the Upper Tier REMIC as cash flow on an Upper Tier Regular Interest, without creating any shortfall, actual or potential (other than for losses), to any Upper Tier Regular Interest.  To the extent that the structure is believed to diverge from such intention, the party identifying such ambiguity or drafting error shall notify the other parties hereto, and the parties hereto shall attempt to resolve such ambiguity or drafting error in accordance with Section 11.01 hereto.

 

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Upper Tier REMIC

As provided herein, the Securities Administrator will make an election to treat the segregated pool of assets consisting of the Lower Tier Regular Interests and certain other related assets subject to this Agreement as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as the “ Upper Tier REMIC .”  The Upper Tier REMIC shall not include the Class CE Grantor Trust, the Exchangeable Certificates Grantor Trust or any Servicer Prepayment Charge Payment Amounts.  The Class UR Interest will represent the sole class of “residual interests” in the Upper Tier REMIC for purposes of the REMIC Provisions.

The following table irrevocably sets forth (or describes) the Upper Tier Regular Interest designation, the initial Uncertificated Balance and the Upper Tier REMIC Pass-Through Rate for each Upper Tier Regular Interest comprising the “regular interests” in the Upper Tier REMIC for purposes of the REMIC Provisions.

 

Designation

Initial Uncertificated Balance

Upper Tier REMIC Pass-Through Rate

A-1

$544,657,000.00

Variable (1)

A-3

$126,971,000.00

Variable (1)

A-4

$126,971,000.00

Variable (1)

A-5

$126,971,000.00

Variable (1)

A-6

$126,971,000.00

Variable (1)

A-7

$126,972,000.00

Variable (1)

B-1

$196,585,500.00

Variable (1)

B-2

$196,585,500.00

Variable (1)

CE

(2)

(2)

P

$100.00

(3)

(1)

Interest will accrue on these Upper Tier Regular Interests at a per annum rate equal to the lesser of (i) the related Pass-Through Rate of the Corresponding Class of Certificates and (ii) the Net WAC Cap.

(2)

Solely for federal income tax purposes, the Class CE Upper Tier Regular Interest will have an Uncertificated Balance equal to the Overcollateralization Amount, which as of the Closing Date will equal the Initial Overcollateralization Amount. The Class CE Upper Tier Regular Interest will bear interest at its REMIC Pass-Through Rate on its Notional Amount.

(3)

The Class P Upper Tier Regular Interest will not bear interest.  The Class P Upper Tier Regular Interest will be entitled to 100% of the amounts distributed on the Class LT-P Interest.

 

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SUMMARY OF CERTIFICATES

The following table sets forth (or describes) the Class designation, Certificate Interest Rate, Original Class Certificate Principal Balance or Maximum Original Class Certificate Principal Balance for each Class of Certificates comprising the interests in the Trust Fund created hereunder:

Class

Original Class Certificate Principal Balance or Maximum Original Class Certificate Principal Balance

Certificate Interest Rate

Assumed Final
Maturity Dates

Class A-1

$544,657,000.00

5.75% (1)

September 25, 2048

Class A-2

$634,856,000.00

5.75% (1)

September 25, 2048

Class A-3

$126,971,000.00

5.75% (1)

September 25, 2048

Class A-4

$126,971,000.00

5.75% (1)

September 25, 2048

Class A-5

$126,971,000.00

5.75% (1)

September 25, 2048

Class A-6

$126,971,000.00

5.75% (1)

September 25, 2048

Class A-7

$126,972,000.00

5.75% (1)

September 25, 2048

Class A-8

$253,942,000.00

5.75% (1)

September 25, 2048

Class A-9

$380,913,000.00

5.75% (1)

September 25, 2048

Class A-10

$507,884,000.00

5.75% (1)

September 25, 2048

Class B-1

$196,585,500.00

1.00% (1)

September 25, 2048

Class B-2

$196,585,500.00

1.00% (1)

September 25, 2048

Class CE

(2)

(2)

September 25, 2048

Class P

$100

(3)

September 25, 2048

Class R

N/A

N/A

N/A

 

(1)

Interest will accrue on these Certificates at a per annum rate equal to the lesser of (i) the rate specified in the table above and (ii) the Net WAC Cap but all distributions of interest will be made to the Exchangeable REMIC Certificates and, if any exchanges have occurred, the related Exchangeable Certificates will be entitled to their proportionate share of such distributions.

(2)

Solely for federal income tax purposes, the Class CE Certificates will have a principal balance equal to the Overcollateralization Amount, which as of the Closing Date will equal the Initial Overcollateralization Amount.  The Class CE Certificate will be entitled to 100% of the amounts distributed on the Class CE Upper Tier Regular Interest and will have the obligation to pay Cap Carryover Amounts.

(3)

The Class P Certificates will not bear interest.  The Class P Certificates will be entitled to 100% of the amounts distributed on the Class P Upper Tier Regular Interest and Servicer Prepayment Charge Payment Amounts.

 

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ARTICLE I

DEFINITIONS

Section 1.01.

Defined Terms .

Whenever used in this Agreement (including the exhibits hereto) or in the Preliminary Statement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article.

1933 Act :  The Securities Act of 1933, as amended.

Account :  Any of the Servicer Custodial Account, the Master Servicer Custodial Account, the Interim Subservicer Custodial Account, the Distribution Account, the Class P Account or the Escrow Accounts.

Accrued Certificate Interest :  With respect to each Distribution Date and Class of Offered Certificates (other than any Class of Exchangeable Certificates) and the Class B Certificates, an amount equal to the interest accrued at the applicable Certificate Interest Rate set forth in the table in the Preliminary Statement during the related Interest Accrual Period on the Certificate Principal Balance of such Class of Certificates immediately prior to such Distribution Date.  Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

Actuarial Method :  With respect to any actuarial Mortgage Loan, the method of allocating a payment of interest and principal, pursuant to which interest is calculated based on a 360-day year and twelve 30-day months on the Stated Principal Balance thereof, with each payment applied first to interest and the remainder to principal.

Advance :  A Monthly Advance or a Servicing Advance, as applicable.

Advance Facility :  As defined in Section 3.19(d) hereof.

Advance Facility Notice :  As defined in Section 3.19(d) hereof.

Advance Financing Person :  As defined in Section 3.19(d) hereof.

Advance Reimbursement Amounts :  As defined in Section 3.19(d) hereof.

Advanced Default :  As defined in the Delegated Authority Guidelines.

Adverse REMIC Event :  As defined in Section 9.01(f) hereof.

Affiliate :  With respect to any Person, any other Person controlling, controlled by or under common control with such Person.  For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing.

 

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Agreement :  This Pooling and Servicing Agreement and all amendments and supplements hereto.

Applicable Regulations :  As to any Mortgage Loan, all federal, state and local laws, statutes, rules and regulations applicable thereto.

Applied Realized Loss Amount :  With respect to each Distribution Date, the excess, if any, of (a) the aggregate of the Certificate Principal Balances of the Certificates (after taking into account the distribution of the Principal Distribution Amount and any increase in any Certificate Principal Balance of a Class of Class B Certificates as a result of Subsequent Recoveries on such Distribution Date) over (b) the Pool Balance as of the end of the related Collection Period.

Appraised Value :  With respect to any Mortgaged Property, the lesser of (i) the sales price for such Mortgaged Property and (ii) the value thereof as determined by a Qualified Appraiser at the time of origination of the Mortgage Loan.

Assignment :  An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect or record the sale of the Mortgage.

Assumed Final Maturity Date :  As to each Class of Certificates, the date set forth as such in the Preliminary Statement.

Available Funds :  As to any Distribution Date, the sum of the Interest Remittance Amount and the Principal Remittance Amount for such Distribution Date.

Back-up Servicer :  Select Portfolio Servicing, Inc., its successors and assigns.

Bankruptcy Code :  Title 11 of the United States Code, as amended.

Book-Entry Certificates :  Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a Person maintaining an account with the Depository (directly, as a “Depository Participant,” or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 5.02 hereof).  On the Closing Date, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 and Class A-10 Certificates shall be Book-Entry Certificates.

Bulk Loans :  As defined in the Delegated Authority Guidelines.

Business Day :  Any day other than (i) a Saturday or a Sunday, (ii) a day on which the New York Stock Exchange or Federal Reserve is closed or (iii) a day on which banking institutions in the State of New York, the State of Indiana, the State of California, the State of Texas, the State of Utah or the state in which the Corporate Trust Offices of the Trustee or the Securities Administrator are located are authorized or obligated by law or executive order to be closed.

 

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Cap Carryover Amount :  If on any Distribution Date, the Accrued Certificate Interest for any Class of Offered Certificates (other than any Class of Exchangeable Certificates) or Class B Certificates is based upon the Net WAC Cap, the excess of (i) the amount of interest such Class would have been entitled to receive on such Distribution Date based on the related Pass-Through Rate, over (ii) the amount of interest such Class received on such Distribution Date based on the Net WAC Cap, together with the unpaid portion of any such excess from prior Distribution Dates (and interest accrued thereon at the then applicable Pass-Through Rate on such Class).

Certificate :  Any Offered Certificate, Class B Certificate, Class P Certificate, Class CE Certificate or Class R Certificate.

Certificate Custodian :  Initially, Wells Fargo Bank, N.A.; thereafter any other Certificate Custodian acceptable to the Depository and selected by the Securities Administrator.

Certificate Interest Rate :  With respect to each Distribution Date and Class of Certificates, the applicable per annum rate described in the table in the Preliminary Statement during the related Interest Accrual Period.

Certificate Owner :  With respect to each Book-Entry Certificate, any beneficial owner thereof.

Certificate Principal Balance :  With respect to any Class of Certificates (other than the Class CE, Class R and Exchangeable Certificates) and any Distribution Date, the Original Class Certificate Principal Balance of such Class of Certificates or, in the case of a Class of Exchangeable REMIC Certificates, the Maximum Original Class Certificate Principal Balance of such Class (a) reduced by the sum of (i) all amounts actually distributed in respect of principal of such Class on all prior Distribution Dates and (ii) other than with respect to the Senior Certificates, Applied Realized Loss Amounts allocated thereto for previous Distribution Dates and (b) with respect to the Class B Certificates, increased by any Subsequent Recoveries allocated to such Class for previous Distribution Dates.  The Class CE and Class R and a Class of Exchangeable Certificates do not have a Certificate Principal Balance.  With respect to any Certificate (other than the Class CE and Class R Certificates) of a Class and any Distribution Date, Certificate Principal Balance means the portion of the Certificate Principal Balance of such Class represented by such Certificate (assuming in the case of an Exchangeable REMIC Certificate that no exchanges have occurred and in the case of an Exchangeable Certificate that all exchanges have occurred) equal to the product of the Percentage Interest evidenced by such Certificate and the Certificate Principal Balance of such Class or, in the case of a Class of Exchangeable Certificates, the Maximum Certificate Principal Balance of such Class.

Certificate Register and Certificate Registrar :  The register maintained and registrar appointed pursuant to Section 5.02 hereof.

Certificateholder or Holder :  The Person in whose name a Certificate is registered in the Certificate Register, except that a Disqualified Organization or non-U.S. Person shall not be a Holder of the Class R Certificate for any purpose hereof.

 

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Class :  Collectively, Certificates which have the same priority of payment and bear the same class designation and the form of which is identical except for variation in the Percentage Interest evidenced thereby.

Class A Certificate :   Any one of the Certificates with an “A” designated on the face thereof substantially in the forms annexed hereto executed by the Securities Administrator on behalf of the Trust and authenticated and delivered by the Certificate Registrar.  The Class A-1, Class A-3, Class A-4, Class A-5, Class A-6 and Class A-7 Certificates each represent a regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions and the right to receive Cap Carryover Amounts as set forth herein.  The Class A-2, Class A-8, Class A-9 and Class A-10 Certificates each represent an interest in a grantor trust for United States federal income tax purposes.

Class B Certificate :  Any one of the Certificates with a “B” designated on the face thereof substantially in the applicable form annexed hereto, executed by the Securities Administrator on behalf of the Trust and authenticated and delivered by the Certificate Registrar, each representing a regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions and the right to receive Cap Carryover Amounts as set forth herein.

Class CE Certificate :  Any one of the Certificates with a “CE” designated on the face thereof substantially in the forms annexed hereto executed by the Securities Administrator on behalf of the Trust and authenticated and delivered by the Certificate Registrar, each representing a regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions, the obligation to pay Cap Carryover Amounts and the right to receive amounts from the Class CE Grantor Trust Subaccount as set forth herein.

Class CE Distributable Amount :  With respect to any Distribution Date, the sum of (i) the Uncertificated Accrued Interest with respect to the Class CE Upper Tier Regular Interest less the amount (without duplication) of Cap Carryover Amounts paid pursuant to Section 4.02(a) , (ii) on each Distribution Date on or after the Certificate Principal Balances of the Offered Certificates (other than the Exchangeable Certificates) and Class B Certificates have been reduced to zero, up to any remaining Overcollateralization Amounts and (iii) the amounts remaining in the Class CE Grantor Trust Subaccount after the distributions in Section 3.06(e) .

Class CE Grantor Trust :  That portion of the Trust exclusive of the Trust REMICs consisting of (a) the right of the Offered Certificates (other than the Exchangeable Certificates) and the Class B Certificates to receive Cap Carryover Amounts, (b) the obligation of the Class CE Certificate to pay Cap Carryover Amounts and (c) the Class CE Grantor Trust Subaccount.

Class CE Grantor Trust Subaccount :  A subaccount of the Distribution Account designated by the Securities Administrator pursuant to Section 3.06(c) into which all payments of Cap Carryover Amounts are deemed deposited.  The Class CE Grantor Trust Subaccount shall not be an asset of any REMIC formed under this Agreement.  Funds in the Class CE Grantor Trust Subaccount shall be held uninvested.

Class P Certificate :  Any one of the Certificates with a “P” designated on the face thereof substantially in the forms annexed hereto executed by the Securities Administrator on behalf of

 

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the Trust and authenticated and delivered by the Certificate Registrar, each representing a regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions and the right to receive Servicer Prepayment Charge Payment Amounts as set forth herein.

Class LR Interest :  The residual interest in the Lower Tier REMIC for purposes of the REMIC Provisions.

Class P Account :  The account created or maintained by the Securities Administrator pursuant to Section 3.06(g) hereof.

Class R Certificate :  The Class R Certificate executed by the Securities Administrator on behalf of the Trust, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit C-R and evidencing the ownership of the Class LR Interest and the Class UR Interest.

Class UR Interest :  The residual interest in the Upper Tier REMIC for purposes of the REMIC Provisions.

Closing Date :  July 30, 2009.

Code :  The Internal Revenue Code of 1986, as it may be amended from time to time.

Collection Period :  With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.

Combination :  Any Exchangeable Combination or Exchangeable REMIC Combination.

Compensating Interest :  As defined in Section 3.20 .

Corporate Trust Office :  With respect to the Trustee, the office of the Trustee, which office at the date of the execution of this Agreement is located at 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota  55107, Attention:  Structured Finance, AGF, Series 2009-1, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer, the Interim Subservicer, the Back-up Servicer, the Custodian, the Securities Administrator and the Master Servicer.  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 Agreement is located at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951, Attention:  Client Manager – AGF 2009-1, and for certificate transfer purposes is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention:  Corporate Trust Services – AGF 2009-1, or at such other address as the Securities Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer, the Interim Subservicer, the Back-up Servicer, the Custodian, the Trustee and the Master Servicer.  

Corresponding Class or Classes :  The Class of interests in one REMIC created under this Agreement that corresponds to the Class of interests in another REMIC or to a Class of Certificates in the manner set out below:

 

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Lower Tier Regular Interest

Upper Tier Regular Interest

Corresponding Class of Certificates

LT-A1

Class A-1 Interest

Class A-1 Certificates

LT-A3

Class A-3 Interest

Class A-3 Certificates

LT-A4

Class A-4 Interest

Class A-4 Certificates

LT-A5

Class A-5 Interest

Class A-5 Certificates

LT-A6

Class A-6 Interest

Class A-6 Certificates

LT-A7

Class A-7 Interest

Class A-7 Certificates

LT-B1

Class B-1 Interest

Class B-1 Certificates

LT-B2

Class B-2 Interest

Class B-2 Certificates

LT-P

Class P Interest

Class P Certificates

N/A

Class CE Interest

Class CE Certificates

Custodial Agreement :  As defined in Section 8.16 hereof.

Custodian :  The Bank of New York Mellon Trust Company, N.A., a national banking association, its successors and assigns and any successor custodian appointed pursuant to Section 8.16 .

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 or for the account of others and which are in accordance with applicable law and 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.  In the event of any conflict between Customary Servicing Procedures and the Delegated Authority Guidelines, the Delegated Authority Guidelines shall govern.

Cut-off Date : The close of business on June 30, 2009.

Cut-off Date Aggregate Principal Balance :  The aggregate of the Cut-off Date Principal Balances of the Mortgage Loans.

Cut-off Date Principal Balance :  With respect to any Mortgage Loan, the Stated Principal Balance thereof as of the Cut-off Date.

Daily Servicer Report to Sellers :  The report prepared by the Servicer and delivered to the Sellers pursuant to Section 4.08 in form and substance set forth as Exhibit M-1 hereto (and any additional reports and/or data agreed to by the Servicer and the Interim Subservicer as contemplated therein).

Debt Service Reduction :  With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction resulting from a Deficient Valuation.

Default :  As defined in the Delegated Authority Guidelines.

 

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Defective Mortgage Loan :  A Mortgage Loan (i) repurchased or to be repurchased or (ii) replaced or to be replaced by one or more Eligible Substitute Mortgage Loans, in either case by a Seller or American General Finance Corporation.

Deficient Valuation :  With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding Stated Principal Balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

Definitive Certificates :  As defined in Section 5.02(c)(iii) hereof.

Delegated Authority Guidelines :  The set of servicing guidelines developed by the Interim Subservicer and the Servicer governing the Servicer’s initial collection efforts and loss mitigation policies attached hereto as Exhibit O , as amended from time to time.  The Interim Subservicer and the Servicer shall review and, if necessary, revise the Delegated Authority Guidelines on a periodic basis (no less than quarterly) following the Closing Date to optimize the servicing guidelines prescribed therein.  Upon any revision to the Delegated Authority Guidelines, the Servicer shall promptly send a copy of the revised guidelines to the Master Servicer.  Any revision to the Delegated Authority Guidelines shall not be considered an amendment for purposes of Section 11.01 hereof and shall not require any Certificateholder consent.

Delinquent :  Any Mortgage Loan with respect to which the Monthly Payment due on a Due Date is not made prior to the next scheduled Due Date for such Mortgage Loan.  With respect to any date of determination, determinations of delinquency shall be made as of the last day of the prior calendar month.  Mortgage Loans with Due Dates which are not the first of the month are treated for determination of delinquency status as if the Due Date was the first of the following month.

Denomination :  The amount, if any, specified on the face of each Certificate (other than the Class CE and Class R Certificates) of a Class representing the principal portion of the Original Class Certificate Principal Balance or Maximum Original Class Certificate Principal Balance of such Class evidenced by such Certificate.

Depositor :  Third Street Funding LLC, a Delaware limited liability company, and its successors and assigns.

Depository :  The initial depository shall be The Depository Trust Company, whose nominee is Cede & Co., or any other organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.  The Depository shall initially be the registered Holder of the Book-Entry Certificates.  The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York.

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.

 

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Determination Date :  With respect to each Distribution Date occurring (i) prior to and in the month of the final Servicing Transfer Date, the last day of the calendar month preceding such Distribution Date and (ii) in any month after the month of the final Servicing Transfer Date, the 15 th day (or if such 15 th day is not a Business Day, the preceding Business Day) of the month in which such Distribution Date occurs.

Disqualified Organization :  Any of (i) a “disqualified organization” under Section 860E of the Code, which as of the Closing Date is any of:  (A) the United States, any state or political subdivision thereof, any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (B) any organization (other than a cooperative described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code unless such organization is subject to the tax imposed by Section 511 of the Code or (C) any organization described in Section 1381(a)(2)(C) of the Code, or (ii) any other Person so designated by the Securities Administrator based upon an Opinion of Counsel provided by nationally recognized counsel to the Securities Administrator that the holding of an ownership interest in the Class R Certificate by such Person may cause the Trust Fund or any Person having an ownership interest in any Class of Certificates (other than such Person) to incur liability for any federal tax imposed under the Code that would not otherwise be imposed but for the transfer of an ownership interest in the Class R Certificate to such Person.  A corporation will not be treated as an instrumentality of the United States or of any state or political subdivision thereof if all of its activities are subject to tax and a majority of its board of directors is not selected by a governmental unit.  The term “United States,” “state” and “international organization” shall have the meanings set forth in Section 7701 of the Code.

Distribution Account :  The account or accounts created and maintained by the Securities Administrator pursuant to Section 3.06(c) , which shall be entitled “Distribution Account, Wells Fargo Bank, N.A., as Securities Administrator for U.S. Bank National Association, as Trustee, in trust for registered Holders of American General Mortgage Loan Trust 2009-1, Mortgage Pass-Through Certificates, Series 2009-1,” and which must be an Eligible Account.  The Class CE Grantor Trust Subaccount, Exchangeable Certificates Grantor Trust Subaccount, Lower Tier Distribution Subaccount and Upper Tier Distribution Subaccount shall be subaccounts of the Distribution Account.  Funds in the Distribution Account shall be held in trust for the Holders of the Certificates for the uses and purposes set forth in this Agreement.

Distribution Date :  The 25th day of any calendar month, or if such 25th day is not a Business Day, the Business Day immediately following such 25th day, commencing in August 2009.

Distribution Date Statement :  As defined in Section 4.06(a) hereof.

Due Date :  With respect to each Mortgage Loan and any Distribution Date, the day of the prior calendar month on which the Monthly Payment for such Mortgage Loan was due, exclusive of any grace period.

Early Stage Default :  As defined in the Delegated Authority Guidelines.

Early Stage Delinquency :  As defined in the Delegated Authority Guidelines.

 

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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 subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated “A–1” by S&P and “P-1” by Moody’s at the time any amounts are held on deposit therein, (ii) an account or accounts the deposits in which are fully insured by the FDIC, or (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity.  Eligible Accounts may bear interest.  If an account ceases to be an Eligible Account as described above, the account shall be moved within fifteen (15) Business Days to a depository which does satisfy one of the clauses above.

Eligible Investments :  Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, regardless of whether issued or managed by the Servicer, the Interim Subservicer, the Master Servicer, the Securities Administrator, the Trustee or the Custodian or any of their respective Affiliates or for which an Affiliate of the Depositor, the Servicer, the Interim Subservicer, the Master Servicer, the Securities Administrator, the Trustee or the Custodian serves as an advisor (or for which any such party may provide services or receive compensation):

(i)

direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof, provided such obligations are backed by the full faith and credit of the United States;

(ii)

(A) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by or federal funds sold by any depository institution or trust company (including the Trustee, the Securities Administrator or the Master Servicer or any of their agents acting in their respective commercial capacities) incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company or its ultimate parent has a short-term uninsured debt rating in one of the two highest available rating categories of S&P and Moody’s and provided that each such investment has an original maturity of no more than 365 days and (B) any other demand or time deposit or deposit which is fully insured by the FDIC;

(iii)

repurchase obligations with a term not to exceed 30 days with respect to any security described in clause (i) above and entered into with a depository institution or trust company (acting as principal) rated “A” or higher by S&P and “A2” or higher by Moody’s, provided , however , that collateral transferred pursuant to such repurchase obligation must be of the type described in clause (i) above and must (A) be valued daily at current market prices plus accrued interest or (B) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by the Trustee, the Servicer, the Master Servicer or the Securities Administrator, as the case may be, in exchange for such collateral and (C) be delivered to the Trustee, the Servicer, the Master Servicer or the Securities Administrator or, if the Trustee, the Servicer, the Master Servicer or the Securities Administrator, as applicable, is supplying the collateral, an agent for the

 

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Trustee, the Servicer, the Master Servicer or the Securities Administrator, in such a manner as to accomplish perfection of a security interest in the collateral by possession of certificated securities;

(iv)

securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America or any State thereof and that are rated by each Rating Agency in its highest long-term unsecured rating categories at the time of such investment or contractual commitment providing for such investment;

(v)

commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than 30 days after the date of acquisition thereof) that is rated by each Rating Agency in its highest short-term unsecured debt rating available at the time of such investment; and

(vi)

units of money market funds registered under the Investment Company Act of 1940 (including funds managed or advised by the Trustee, the Securities Administrator, the Master Servicer, the Custodian or affiliates thereof) that, if rated by each Rating Agency, are rated in its highest rating category (if so rated by such Rating Agency);

provided, that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations.

Eligible Substitute Mortgage Loan :  A mortgage loan substituted by a Seller or American General Finance Corporation for a Defective Mortgage Loan which must, on the date of such substitution, (i) have an outstanding Stated Principal Balance (or in the case of a substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an aggregate Stated Principal Balance) not in excess of, and not materially less than, the Stated Principal Balance of the Defective Mortgage Loan; (ii) have a Mortgage Interest Rate not less than the Mortgage Interest Rate of the Defective Mortgage Loan; (iii) have a Loan-to-Value Ratio not higher than that of the Defective Mortgage Loan; (iv) have a remaining term to maturity not greater than (and not more than one year less than) that of the Defective Mortgage Loan, (v) comply with each representation and warranty as to the Mortgage Loans set forth in the Mortgage Loan Purchase Agreement (deemed to be made as of the date of substitution); (vi) be current in the payment of principal and interest; (vii) be secured by a Mortgaged Property of the same type and occupancy status as secured the Defective Mortgage Loan; (viii) have payment terms that do not vary in any material respect from those of the Defective Mortgage Loan; and (ix) have a Prepayment Charge at least equal in amount of that of the Defective Mortgage Loan.

ERISA :  The Employee Retirement Income Security Act of 1974, as amended.

 

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ERISA-Restricted Certificates :  The Class A, Class B, Class CE, Class P and Class R Certificates.

Escrow Account :  The account or accounts created and maintained pursuant to Section 3.07 .

Escrow Payments :  The amounts constituting ground rents, taxes, assessments, Primary Mortgage Insurance Policy premiums, fire and hazard insurance premiums, flood insurance premiums, condominium charges 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.

Estate in Real Property :  A fee simple estate in a parcel of real property.

Exchange Act :  The Securities Exchange Act of 1934, as amended.

Exchangeable Certificates :  The Class A-2, Class A-8, Class A-9 and Class A-10 Certificates.

Exchangeable Certificates Grantor Trust :  The portion or portions of the Trust exclusive of the Trust REMICs consisting of (i) interests in the Exchangeable REMIC Certificates beneficially owned in the form of the Exchangeable Certificates and rights with respect thereto and (ii) the Exchangeable Certificates Grantor Trust Subaccount.

Exchangeable Certificates Grantor Trust Subaccount :  The sub-account of the Distribution Account designated by the Securities Administrator pursuant to Section 9.04(a) .  The Exchangeable Certificates Grantor Trust Subaccount shall not be an asset of any REMIC formed under this Agreement.  Funds in the Exchangeable Certificates Grantor Trust Subaccount shall be held uninvested.

Exchangeable Combination :  Any of Exchangeable Combination 1, Exchangeable Combination 2, Exchangeable Combination 3 or Exchangeable Combination 4, as applicable.

Exchangeable Combination 1 :  The Class A-2 Certificates.

Exchangeable Combination 2 :  The Class A-8 Certificates.

Exchangeable Combination 3 :  The Class A-9 Certificates.

Exchangeable Combination 4 :  The Class A-10 Certificates.

Exchangeable REMIC Certificates :  The Class A-3, Class A-4, Class A-5, Class A-6 and Class A-7 Certificates.

Exchangeable REMIC Combination :  Any of Exchangeable REMIC Combination 1, Exchangeable REMIC Combination 2, Exchangeable REMIC Combination 3 or Exchangeable REMIC Combination 4, as applicable.

 

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Exchangeable REMIC Combination 1 :  The Class A-3, Class A-4, Class A-5, Class A-6 and Class A-7 Certificates.

Exchangeable REMIC Combination 2 :  The Class A-3 and Class A-4 Certificates.

Exchangeable REMIC Combination 3 :  The Class A-3, Class A-4 and Class A-5 Certificates.

Exchangeable REMIC Combination 4 :  The Class A-3, Class A-4, Class A-5 and Class A-6 Certificates.

Extra Principal Distribution Amount :  As of any Distribution Date, the lesser of (x) the Monthly Excess Interest Amount for such Distribution Date and (y) the Overcollateralization Deficiency for such Distribution Date.

FDIC :  Federal Deposit Insurance Corporation or any successor thereto.

Financing Person’s Designee :  As defined in Section 3.19(d) hereof.

FIRREA :  The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended.

Homes Act :  The Helping Families Save Their Homes Act of 2009, as it may be amended from time to time.

Imminent Default :  As defined in the Delegated Authority Guidelines attached hereto as Exhibit O .

Independent :  When used with respect to any specified Person, any such Person who (i) is in fact independent of the Depositor, the Servicer, the Interim Subservicer, the Custodian, the Trustee, the Master Servicer, the Securities Administrator and their respective Affiliates, (ii) does not have any direct financial interest in or any material indirect financial interest in the Depositor, the Servicer, the Interim Subservicer, the Custodian, the Trustee, the Master Servicer, the Securities Administrator or any Affiliate thereof, and (iii) is not connected with the Depositor, the Servicer, the Interim Subservicer, the Custodian, the Trustee, the Master Servicer, the Securities Administrator or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided , however , that a Person shall not fail to be Independent of the Depositor, the Servicer, the Interim Subservicer, the Custodian, the Trustee, the Master Servicer, the Securities Administrator or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of securities issued by the Depositor, the Servicer, the Interim Subservicer, the Custodian, the Trustee, the Master Servicer, the Securities Administrator or any Affiliate thereof, as the case may be.

Initial Overcollateralization Amount :  $393,171,378.65.

Insurance Proceeds :  Proceeds of any title policy, hazard policy, Primary Mortgage Insurance Policy or other insurance policy covering a Mortgage Loan, to the extent such

 

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proceeds are not to be applied to the restoration of the related Mortgaged Property, required to be deposited in an Escrow Account or released to the Mortgagor in accordance with Customary Servicing Procedures, subject to the terms and conditions of the related Mortgage Note and Mortgage.

Interest Accrual Period : With respect to any Distribution Date will be the calendar month preceding the month of such Distribution Date.

Interest Carry Forward Amount :  For any Class of Certificates (other than the Class CE, Class P, Class R and Exchangeable Certificates) and any Distribution Date, the sum of (a) the excess, if any, of the Accrued Certificate Interest and any Interest Carry Forward Amount for the prior Distribution Date, over the amount in respect of interest actually distributed on such Class on such prior Distribution Date and (b) interest on such excess at the applicable Certificate Interest Rate on the basis of a 360-day year consisting of twelve 30-day months.

Interest Remittance Amount :  As to any Distribution Date, (A) the sum, without duplication, of (i) the interest portion of Monthly Payments with respect to the related Collection Period received by the Servicer on or prior to the related Determination Date for such Distribution Date, (ii) all Compensating Interest paid by the Servicer for such Distribution Date, (iii) the portion of any payment in connection with any Principal Prepayment (but excluding any Prepayment Charge) relating to interest received by the Servicer during the related Prepayment Period, (iv) the interest portion of REO Proceeds and Net Liquidation Proceeds received by the Servicer during the related Prepayment Period, (v) the interest portion of payments from the Servicer in connection with Monthly Advances for such Distribution Date, (vi) any Reimbursement Amounts received with respect to the Mortgage Loans during the related Prepayment Period, (vii) the portion of any Purchase Price or Substitution Adjustment Amounts paid during the related Prepayment Period allocable to interest and (viii) on the Distribution Date on which the Mortgage Loans and related REO Property are purchased in accordance with Section 10.01 hereof, that portion of the Termination Price in respect of interest less (B) the Servicing Fees for the Mortgage Loans, amounts reimbursable with respect to Monthly Advances and Servicing Advances with respect to the Mortgage Loans pursuant to Sections 3.07(d) , 3.08(a) and 3.08(b) and amounts reimbursable or payable to the Servicer, the Back-up Servicer, the Interim Subservicer, the Master Servicer, the Securities Administrator, the Trustee and the Custodian pursuant to this Agreement, including, without limitation, Sections 3.01(a) , 3.08 , 3.18 , 8.05 and 9.01(c) .

Interim Subservicer :  MorEquity, Inc., a Nevada corporation, and its successors and assigns.  From the Closing Date until the Servicing Transfer Date for each Mortgage Loan, the Interim Subservicer shall subservice such Mortgage Loan on behalf of the Servicer in accordance with this Agreement. The Interim Subservicer shall also, with the Servicer, review and, if necessary, revise the Delegated Authority Guidelines on a periodic basis (no less than quarterly) following the Closing Date to optimize the servicing guidelines prescribed therein.

Interim Subservicer Custodial Account :  The account created and maintained by the Interim Subservicer pursuant to Section 3.06(f) .

 

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Interim Subservicing Fee :  With respect to each Mortgage Loan subserviced by the Interim Subservicer prior to the related Servicing Transfer Date, the fee payable out of the Servicing Fee to the Interim Subservicer equal to one-twelfth of the product of 0.40% and the Stated Principal Balance of such Mortgage Loan.  Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is computed.  The Interim Subservicer’s right to receive the Interim Subservicing 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 3.06 ) of related Monthly Payments collected by the Interim Subservicer.

Liquidated Mortgage Loan :  As to any Distribution Date, any Mortgage Loan in respect of which the Servicer has determined, in accordance with Customary Servicing Procedures, as of the end of the related Prepayment Period, that all Liquidation Proceeds which it expects to recover with respect to the liquidation, taking by power of eminent domain or condemnation or sale of the Mortgage Loan or Mortgaged Property, as applicable, or disposition of the related REO Property have been recovered.

Liquidation Proceeds :  The sum of all:  (i) Insurance Proceeds with respect to a Mortgage Loan, (ii) condemnation proceeds received with respect to a Mortgage Loan, to the extent not released to the Mortgagor in accordance with Customary Servicing Procedures and (iii) other cash amounts received and retained in connection with the liquidation, taking, sale or other disposition of such Mortgage Loan or Mortgaged Property (including REO Property) pursuant to this Agreement.

Loan-to-Value Ratio :  With respect to any Mortgage Loan as of the date of origination, the ratio, expressed as a percentage, on such date of the outstanding principal balance of the Mortgage Loan to the Appraised Value of the related Mortgaged Property.

Lost Note Affidavit :  The lost note affidavit signed by a Seller which is in the form of Exhibit G hereto.

Lower Tier Corresponding Marker Interests :  The Class LT-A1 Interest, Class LT-A3 Interest, Class LT-A4 Interest, Class LT-A5 Interest, Class LT-A6 Interest, Class LT-A7 Interest, Class LT-B1 Interest and the Class LT-B2 Interest.

Lower Tier Distribution Amount :  As defined in Section 4.02(e) .

Lower Tier Distribution Subaccount :  The sub-account of the Distribution Account designated by the Securities Administrator pursuant to Section 3.06(c) .

Lower Tier Interests : The Lower Tier Regular Interests and the Class LR Interest.

Lower Tier Principal Loss Allocation Amount :  With respect to any Distribution Date, an amount equal to the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans and related REO Properties then outstanding and (ii) 1 minus a fraction, the numerator of which is two times the aggregate of the Uncertificated Balances of the Lower Tier Corresponding Marker Interests, and the denominator of which is the aggregate of the Uncertificated Balances of the Lower Tier Corresponding Marker Interests and the Class LT-ZZ Interest.

 

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Lower Tier Regular Interests : A regular interest in the Lower Tier REMIC which is held as an asset of the Upper Tier REMIC and is entitled to monthly distributions as provided in Section 4.02 hereof.  Any of the Class LT-AA Interest, the Lower Tier Corresponding Marker Interests, the Class LT-ZZ Interest and the Class LT-P Interest are Lower Tier Regular Interests.

Lower Tier REMIC :  As defined in the Preliminary Statement, the assets of which consist of the Mortgage Loans, $100 deposited by the Depositor on the Closing Date, such amounts as shall be held in the Lower Tier Distribution Subaccount, 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.  The Lower Tier REMIC will not include any Servicer Prepayment Charge Payment Amounts, the Class CE Grantor Trust or the Exchangeable Certificates Grantor Trust.

Lower Tier REMIC Interest Loss Allocation Amount :  With respect to any Distribution Date, an amount equal to (a) the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans and related REO Properties then outstanding and (ii) the Lower Tier REMIC Pass-Through Rate for the Class LT-AA Interest minus the Marker Rate, divided by (b) 12.

Lower Tier REMIC Overcollateralization Target Amount :  1.00% of the Targeted Overcollateralization Amount.

Lower Tier REMIC Overcollateralized Amount :  With respect to any date of determination, (i) 1% of the aggregate Uncertificated Balances of the Lower Tier Regular Interests minus (ii) the aggregate of the Uncertificated Balances of the Lower Tier Corresponding Marker Interests and 1% of the Class LT-P Interest, in each case as of such date of determination.

Lower Tier REMIC Pass-Through Rate :  With respect to the Class LT-AA Interest, the Lower Tier Corresponding Marker Interests and the Class LT-ZZ Interest, the Net WAC Cap.  The Class LT-P Interest has no Lower Tier REMIC Pass-Through Rate.

Majority Certificateholders :  The Holders of Certificates evidencing at least 51% of the Voting Rights.

Marker Rate :  With respect to the Class CE Upper Tier Regular Interest and any Distribution Date, a per annum rate equal to two (2) times the weighted average of the Lower Tier REMIC Pass-Through Rates for the Lower Tier Corresponding Marker Interests and the Class LT-ZZ Interest, (i) with the rate on each such Lower Tier Corresponding Marker Interest subject to a cap equal to the lesser of (a) the Pass-Through Rate of its Corresponding Class of Certificates and (b) the Net WAC Cap for the purpose of this calculation and (ii) with the rate on the Class LT-ZZ Interest subject to a cap of zero for the purpose of this calculation.

Master Servicer :  Wells Fargo Bank, N.A., a national banking association, its successors and assigns and, if a successor master servicer is appointed hereunder, such successor, as master servicer.

Master Servicer Custodial Account :  The account or accounts created and maintained by the Master Servicer pursuant to Section 3.06(b) , which shall be entitled “Master Servicer

 

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Custodial Account, Wells Fargo Bank, N.A., as Master Servicer, in trust for registered Holders of American General Mortgage Loan Trust 2009-1, Mortgage Pass-Through Certificates, Series 2009-1,” and which must be an Eligible Account.  The Master Servicer Custodial Account shall be deemed to be a sub-account of the Distribution Account.

Master Servicer Custodial Account Reinvestment Income :  For each Distribution Date, all income and gain net of any losses realized since the preceding Distribution Date (or since the Closing Date, in the case of the initial Distribution Date) from Eligible Investments of funds in the Master Servicer Custodial Account.

Master Servicer’s Certificate :  The monthly report required by Section 4.07(b) .

Master Servicing Officer :  Any officer of the Master Servicer involved in, or responsible for, the administration and master servicing of the Mortgage Loans whose name appears on a list of servicing officers furnished to the Securities Administrator and the Trustee by the Master Servicer, as such list may from time to time be amended.

Master Servicing Transfer Costs :  All reasonable costs and expenses (including attorney’s fees) incurred by the Trustee or a successor master servicer in connection with the transfer of master servicing or servicing from a predecessor master servicer, including, without limitation, any costs or expenses associated with the complete transfer of all master servicing data or servicing data and the completion, correction or manipulation of such master servicing data or servicing data as may be required by the Trustee or successor master servicer to correct any errors or insufficiencies in the master servicing data or servicing data or otherwise to enable the Trustee or a successor master servicer to master service or service, as the case may be, the applicable Mortgage Loans properly and effectively.

Master Servicer Event of Default :  Any one of the conditions or circumstances enumerated in Section 7.01(c) .

Maximum Certificate Principal Balance :  As to any date of determination and each Class of Exchangeable Certificates, the portion of the Maximum Original Class Certificate Principal Balance that would be outstanding assuming each Certificate of the Related Classes had been exchanged on the Closing Date.

Maximum LT-ZZ Uncertificated Accrued Interest Deferral Amount :  With respect to any Distribution Date, the excess of (a) accrued interest at the Lower Tier REMIC Pass-Through Rate applicable to the Class LT-ZZ Interest for such Distribution Date on a balance equal to the Uncertificated Balance of the Class LT-ZZ Interest minus the Lower Tier REMIC Overcollateralized Amount, in each case for such Distribution Date, over (b) Uncertificated Accrued Interest on the Lower Tier Corresponding Marker Interests, with the rate on each such Lower Tier Corresponding Marker Interest subject to a cap equal to the lesser of (a) the Pass-Through Rate of the Corresponding Class of Certificates and (b) the Net WAC Cap for the purpose of this calculation.

Maximum Original Class Certificate Principal Balance :  As to each Class of Exchangeable REMIC Certificates or Exchangeable Certificates, the Maximum Original Class Certificate Principal Balance set forth in the Preliminary Statement.

 

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MERS : The Mortgage Electronic Registration Systems, Inc.

MERS Mortgage Loan :  Any MOM Mortgage Loan or any other Mortgage Loan as to which MERS or its designee is (or is intended to be) the mortgagee of record and as to which a MIN has been assigned.

MIN :  A MERS Mortgage Identification Number assigned to a Mortgage Loan registered under MERS.

MOM Mortgage Loan :  A Mortgage Loan where the related Mortgage names MERS or its designee as the original mortgagee thereof, as to which a MIN has been assigned, and which Mortgage has not been assigned to any other person.

Monthly Advance  The payment made by the Servicer with respect to any Distribution Date pursuant to Section 3.19 .

Monthly Excess Cashflow Amount :  The sum of the Monthly Excess Interest Amount and (without duplication) any portion of the Principal Distribution Amount remaining after principal distributions on the Offered Certificates and the Class B Certificates.

Monthly Excess Interest Amount :  With respect to each Distribution Date, the amount, if any, by which the Interest Remittance Amount for such Distribution Date exceeds the aggregate amount distributed on such Distribution Date pursuant to paragraphs (i) through (vi) under Section 4.01(a) .

Monthly Payment :  With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined:  (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan, (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act or similar state laws and (iii) any Servicer Modification or forbearance agreement; and (b) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.

Monthly Servicer Report to Sellers :  The report prepared by the Servicer and delivered to the Sellers pursuant to Section 4.08 in form and substance set forth as Exhibit M-2 hereto (and any additional reports and/or data agreed to by the Servicer and the Interim Subservicer as contemplated therein).

Moody’s :  Moody’s Investors Service, Inc., and its successors, and if such company shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other “nationally recognized statistical rating organization” as set forth on the most current list of such organizations released by the Securities and Exchange Commission.

Mortgage :  The mortgage, deed of trust or other instrument creating a first lien on, or first priority security interest in, a Mortgaged Property securing a Mortgage Note.

 

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Mortgage File :  The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan.

Mortgage Interest Rate :  With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note, after giving effect to the Relief Act, and as such may be modified in accordance with a Servicer Modification.  With respect to each Mortgage Loan that becomes an REO Property, as of any date of determination, the annual rate determined in accordance with the immediately preceding sentence as of the date such Mortgage Loan became an REO Property.

Mortgage Loan :  Each mortgage loan identified in the Mortgage Loan Schedule attached hereto as Exhibit D .

Mortgage Loan Purchase Agreement :  The Mortgage Loan Purchase Agreement, dated July 30, 2009, among the Sellers, American General Finance Corporation and the Depositor, as purchaser.

Mortgage Loan Schedule :  As of any date with respect to the Mortgage Loans, the list of such Mortgage Loans included in the Trust Fund on such date attached hereto as Exhibit D .  The Mortgage Loan Schedule shall set forth the following information with respect to each Mortgage Loan:

(1)

the Mortgage Loan identifying number;

(2)

the state and zip code of the Mortgaged Property;

(3)

a code indicating whether the Mortgaged Property is a single family residence, a 2-4 family dwelling, a PUD, a townhouse or a unit in a high-rise or low-rise condominium project;

(4)

the occupancy status of the Mortgaged Property at origination;

(5)

the original months to maturity;

(6)

the date of origination;

(7)

the first payment date;

(8)

the stated maturity date;

(9)

the stated remaining months to maturity;

(10)

the original principal amount of the Mortgage Loan;

(11)

the Cut-off Date Principal Balance of each Mortgage Loan;

(12)

the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off Date;

 

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(13)

the current principal and interest payment of the Mortgage Loan as of the Cut-off Date;

(14)

the contractual interest paid to date of the Mortgage Loan;

(15)

the Loan-to-Value Ratio at origination;

(16)

a code indicating the loan performance status of the Mortgage Loan as of the Cut-off Date; and

(17)

a code indicating whether the Mortgage Loan has a Prepayment Charge, the type of Prepayment Charge and the term.

The Mortgage Loan Schedules shall set forth the following information, as of the Cut-off Date, with respect to the Mortgage Loans in the aggregate:  (1) the number of Mortgage Loans; (2) the Cut-off Date Principal Balance of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.  The Mortgage Loan Schedule shall be amended from time to time in accordance with the provisions of this Agreement.  With respect to any Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the applicable date of substitution.

Mortgage Note :  The original 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.

Mortgage Pool :  The pool of Mortgage Loans, identified on Exhibit D from time to time, and any REO Properties acquired in respect thereof.

Mortgaged Property :  The underlying property securing a Mortgage Loan, including any REO Property, consisting of an Estate in Real Property improved by a Residential Dwelling.

Mortgagor :  The obligor on a Mortgage Note.

Net Liquidation Proceeds :  With respect to any Liquidated Mortgage Loan, the related Liquidation Proceeds net of unreimbursed Monthly Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid fees or other compensation explicitly set forth in this Agreement received and retained in connection with the liquidation, taking, sale or other disposition of such Mortgage Loan or Mortgaged Property (including REO Property) pursuant to this Agreement.  Net Liquidation Proceeds shall first be applied to outstanding accrued interest and then to outstanding principal on the related Mortgage Loan.

Net Mortgage Interest Rate :  With respect to any Mortgage Loan, the Mortgage Interest Rate borne by such Mortgage Loan minus the Servicing Fee Rate.

Net WAC Cap :  With respect to each Distribution Date, a per annum rate equal to the weighted average of the Net Mortgage Interest Rates for the Mortgage Loans (weighted on the

 

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basis of the Stated Principal Balances of the Mortgage Loans as of the first day of the related Collection Period).

NMWHFIT :  A “Non-Mortgage Widely Held Fixed Investment Trust” as that term is defined in Treasury regulations § 1.671-5(b)(12) or successor provisions.

Nonrecoverable Advance :  Any Monthly Advance or Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer and in accordance with Customary Servicing Procedures, will not or, in the case of a proposed Advance, would not be ultimately recoverable from Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

Notice of Facility Termination :  As defined in Section 3.19(d) hereof.

Notional Amount :  With respect to the Class CE Upper Tier Regular Interest and the Class CE Certificates and any date of determination, a notional amount equal to the then aggregate Uncertificated Balances of the Lower Tier Regular Interests other than the Class LT-P Interest.

Offered Certificates :  The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 and Class A-10 Certificates.

Officer’s Certificate :  A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a vice president (however denominated), a managing director, a principal, the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Master Servicer, the Securities Administrator, the Servicer, the Interim Subservicer, the Custodian or the Depositor, as applicable.

Opinion of Counsel :  A written opinion of counsel, who may, without limitation, be a salaried counsel for the Depositor, the Servicer, the Sellers, the Trustee, the Securities Administrator or the Master Servicer except that any opinion of counsel relating to (a) the qualification of any Trust REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.

Original Class Certificate Principal Balance :  With respect to each Class of Certificates (other than the Exchangeable REMIC Certificates and the Exchangeable Certificates), the Certificate Principal Balance thereof on the Closing Date, as set forth opposite such Class in the Preliminary Statement, except with respect to (i) the Class R Certificate, which has no Original Class Certificate Principal Balance and (ii) the Class CE Certificate, which, solely for REMIC purposes, has an Original Class Certificate Principal Balance equal to the Initial Overcollateralization Amount.

Outstanding Certificate : Any Outstanding Exchangeable Certificate or Outstanding Exchangeable REMIC Certificate.

Outstanding Exchangeable Certificate : Any Exchangeable Certificate issued hereunder on the Closing Date; provided , however , that upon the exchange of the Exchangeable Certificate pursuant to Section 5.08 hereof, the Exchangeable Certificate so exchanged shall be deemed no

 

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longer to be an Outstanding Exchangeable Certificate, and each Exchangeable REMIC Certificate issued in exchange therefor shall be deemed to be an Outstanding Exchangeable REMIC Certificate.

Outstanding Exchangeable REMIC Certificate : Any Exchangeable REMIC Certificate issued hereunder on the Closing Date; provided , however , that upon the exchange of any Exchangeable REMIC Certificate pursuant to Section 5.08 hereof, the Exchangeable REMIC Certificate so exchanged shall be deemed no longer to be an Outstanding Exchangeable REMIC Certificate, and the Exchangeable Certificate issued in exchange therefor shall be deemed to be an Outstanding Exchangeable Certificate.

Overcollateralization Amount :  As of any Distribution Date, the excess, if any, of (x) the Pool Balance as of the last day of the related Collection Period over (y) the aggregate Certificate Principal Balance of all Classes of Offered Certificates and the Class B Certificates (after taking into account all distributions of principal on such Distribution Date and the increase of any Certificate Principal Balance of a Class of Class B Certificates as a result of Subsequent Recoveries).

Overcollateralization Deficiency :  As of any Distribution Date, the excess, if any, of (x) the Targeted Overcollateralization Amount for such Distribution Date over (y) the Overcollateralization Amount for such Distribution Date.

Ownership Interest :  As to any Certificate, any ownership 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.

Paperless Release Request :  As defined in Section 3.13(d) hereof.

Pass-Through Rate :  With respect to each Distribution Date and (i) the Class A Certificates, 5.75% per annum and (ii) the Class B Certificates, 1.00% per annum.

Paying Agent :  Any paying agent appointed pursuant to Section 5.05 .

Percentage Interest :  With respect to any Certificate (other than the Class CE and Class R Certificates), a fraction, expressed as a percentage, obtained by dividing the Denomination of such Certificate on the Closing Date by the Original Class Certificate Balance (or the Maximum Original Class Certificate Balance in the case of the Exchangeable Certificates and the Exchangeable REMIC Certificates) of the related Class.  With respect to a Certificate of the Class CE Certificates, the portion of such Class evidenced thereby, expressed as a percentage, as stated on the face of such Certificate.  The Percentage Interest of the Class R Certificate is 100%.  Notwithstanding the foregoing, for purposes of making actual distributions of principal or interest or allocating Voting Rights among the Outstanding Exchangeable REMIC Certificates or Outstanding Exchangeable Certificates of a Class, the Percentage Interest refers to each Outstanding Certificate’s proportionate share of such actual distributions or Voting Interests based on the proportion that such Certificate’s Percentage Interest bears to the aggregate Percentage Interest of all the Outstanding Exchangeable REMIC Certificates or Outstanding Exchangeable Certificates of such Class.

 

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Permitted Transferee :  Any transferee of the Class R Certificate other than a Disqualified Organization, a non-U.S. Person (other than as provided in Section 5.02(f)(v)) or a U.S. Person with respect to whom income on the Class R Certificate is attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of such Person or any other U.S. Person.

Person :  Any individual, corporation, partnership, joint venture, association, joint stock company, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

Plans :  As defined in Section 5.02(e) hereof.

Pool Balance :  As of any date of determination, the aggregate Stated Principal Balance of the Mortgage Loans.

Prepayment Charge :  With respect to any Prepayment Period, any prepayment premium, fee or charge payable by a Mortgagor in connection with any principal prepayment pursuant to the terms of the related Mortgage Note.

Prepayment Interest Shortfall :  With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment during the related Prepayment Period, an amount equal to difference between (x) 30 days’ interest at the applicable Net Mortgage Interest Rate on the amount of the Principal Prepayment on such Mortgage Loan minus (y) the amount of interest actually paid by the related Mortgagor on the amount of such Principal Prepayment.

Prepayment Period :  With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.

Primary Mortgage 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.

Principal Distribution Amount :  As to any Distribution Date, the sum of (i) the Principal Remittance Amount and (ii) the Extra Principal Distribution Amount, if any.

Principal Prepayment :  Any payment of principal made by the Mortgagor on a Mortgage Loan (other than a payahead on a Mortgage Loan subject to the Simple Interest Method) which is received in advance of its scheduled Due Date and which is not accompanied by an amount of interest representing the full amount of interest due on any Due Date in any month or months subsequent to the month of prepayment.

Principal Remittance Amount :  As to any Distribution Date, (A) the sum, without duplication, of:  (i) the principal portion of Monthly Payments with respect to the related Collection Period received by the Servicer on or prior to the related Determination Date for such Distribution Date, (ii) all Principal Prepayments received by the Servicer during the related Prepayment Period, (iii) the portion of Net Liquidation Proceeds and REO Proceeds allocable to principal received by the Servicer during the related Prepayment Period, (iv) the portion of any Purchase Price or Substitution Adjustment Amounts allocable to principal received by the Master

 

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Servicer with respect to the related Prepayment Period, (v) the principal portion of payments from the Servicer in connection with Monthly Advances for such Distribution Date, (vi) any Subsequent Recoveries received by the Servicer during the related Prepayment Period, (vii) any other amounts received by the Servicer during the related Prepayment Period that are payable to the Trust, as owner of a Mortgage Loan, paid in connection with a loan modification program, including the U.S. Treasury’s Home Affordable Modification Program and (viii) on the Distribution Date on which the Mortgage Loans and related REO Property are purchased in accordance with Section 10.01 hereof, that portion of the Termination Price in respect of principal less (B) without duplication, amounts reimbursable with respect to Monthly Advances and Servicing Advances with respect to the Mortgage Loans pursuant to Sections 3.07(d) , 3.08(a) and 3.08(b) and amounts reimbursable or payable to the Servicer, the Back-up Servicer, the Interim Subservicer, the Master Servicer, the Securities Administrator, the Trustee and the Custodian pursuant to this Agreement, including, without limitation, Sections 3.01(a) , 3.08 , 3.18 , 8.05 and 9.01(c) .

Purchase Price :  With respect to any Mortgage Loan or REO Property to be purchased pursuant to Section 2.03 , an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of purchase, (ii) accrued interest on such Stated Principal Balance at the applicable Mortgage Interest Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or a Monthly Advance by the Servicer, which payment or Monthly Advance had as of the date of purchase been distributed pursuant to Section 4.01 , through the end of the calendar month in which the purchase is effected, (iii) any unreimbursed Servicing Advances and Monthly Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, and (iv)  all costs and expenses, including reasonable attorneys fees, incurred by the Trustee to effect the repurchase.

QIB :  A “qualified institutional buyer” as defined in Rule 144A under the 1933 Act.

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 satisfied the requirements of Title XI of FIRREA.

Rating Agency or Rating Agencies :  Moody’s and S&P, or their respective successors.

Realized Loss :  With respect to any Liquidated Mortgage Loan, the amount by which the Stated Principal Balance exceeds the amount of Net Liquidation Proceeds applied to the Stated Principal Balance.  With respect to any Mortgage Loan, the amount of any Deficient Valuation, the amount of any reduction in the Stated Principal Balance thereof (but not a forbearance) resulting from a Servicer Modification or, with respect to any Mortgage Loan that 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.

Realized Loss Amortization Amount :  As to each Class of Class B Certificates and as of any Distribution Date, the lesser of (x) the Unpaid Realized Loss Amount for such Class of

 

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Certificates as of such Distribution Date and (y) the remaining Monthly Excess Cashflow Amount available for such Class pursuant to clause (iv) or (v), as applicable, of Section 4.02(a) .

Record Date :  With respect to all of the Certificates, the last Business Day of the month immediately preceding the month in which the related Distribution Date occurs.

Regular Interest :  Any of the Lower Tier Regular Interests and the Upper Tier Regular Interests.

Reimbursement Amount :  As defined in Section 2.03 .

Related :  As to the Class A-3, Class A-4, Class A-5, Class A-6 and Class A-7 Certificates, the Class A-2 Certificates.  As to the Class A-3 and Class A-4 Certificates, the Class A-8 Certificates.  As to the Class A-3, Class A-4 and Class A-5 Certificates, the Class A-9 Certificates.  As to the Class A-3, Class A-4, Class A-5 and Class A-6 Certificates, the Class A-10 Certificates.

Related Documents :  With respect to any Mortgage Loan, the related Mortgage Notes and other related documents.

Relief Act :  The Servicemembers Civil Relief Act, as it may be amended from time to time.

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 Certificates (other than the Residual Certificate) as that term is defined in Section 9.01(k) .

REMIC Pass-Through Rate :  With respect to each Distribution Date and the Lower Tier Regular Interests, the Lower Tier REMIC Pass-Through Rate.  With respect to each Distribution Date and the Upper Tier Regular Interests (other than the Class CE Upper Tier Regular Interest), the Upper Tier REMIC Pass-Through Rate.

With respect to the Class CE Upper Tier Regular Interest and any Distribution Date, a per annum rate equal to the percentage equivalent of a fraction, the numerator of which is the sum of the amounts calculated pursuant to clauses (A) through (C) below, and the denominator of which is the aggregate Uncertificated Balances of the Class LT-AA Interest, the Lower Tier Corresponding Marker Interests, and the Class LT-ZZ Interest.  For purposes of calculating the REMIC Pass-Through Rate for the Class CE Upper Tier Regular Interest, the numerator is equal to the sum of the following components:

(A)

the Lower Tier REMIC Pass-Through Rate for the Class LT-AA Interest minus the Marker Rate, applied to an amount equal to the Uncertificated Balance of the Class LT-AA Interest;

(B)

the Lower Tier REMIC Pass-Through Rate for each Lower Tier Corresponding Marker Interest, in each case minus the Marker Rate, applied in each case to an amount equal to

 

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the respective Uncertificated Balance of each such Lower Tier Corresponding Marker Interest; and

(C)

the Lower Tier REMIC Pass-Through Rate for the Class LT-ZZ Interest minus the Marker Rate, applied to an amount equal to the Uncertificated Balance of the Class LT-ZZ Interest.

With respect to the Class CE Certificates and any Distribution Date, the Class CE Certificates shall be entitled to 100% of the amounts distributable to the Class CE Upper Tier Regular Interest.

REMIC Provisions :  Provisions of the federal income tax law relating to real estate mortgage investment conduits which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations and rulings promulgated thereunder, as the foregoing may be in effect from time to time.

Remittance Report :  A report prepared by the Servicer and delivered to the Master Servicer pursuant to Section 4.07(a) , containing the information attached hereto as Exhibit L .

REO Disposition :  The sale or other disposition of an REO Property on behalf of the Trust.

REO Proceeds :  Proceeds, net of any amount payable or reimbursable to the Servicer pursuant to this Agreement for unpaid Servicing Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances and Monthly Advances in respect of the related Mortgage Loan or REO Property, 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 REO Disposition.  REO Proceeds shall first be applied to outstanding accrued interest and then to outstanding principal on the related Mortgage Loan.

REO Property :  A Mortgaged Property acquired by the Servicer on behalf of the Trust through foreclosure or deed-in-lieu of foreclosure, as described in Section 3.11 .

Request for Release :  A release signed by a Servicing Officer, in the form of Exhibit E attached hereto.

Residential Dwelling : Any one of the following: (i) a detached one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible condominium project, (iv) a manufactured home, (v) a townhouse, (vi) a modular home or (vii) a detached one-family dwelling in a planned unit development, none of which is a co-operative or mobile home.

Residual Certificate :  The Class R Certificate.

Responsible Officer :  When used with respect to the Trustee or the Securities Administrator, any officer within the corporate trust department of the Trustee or the Securities 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

 

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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.

S&P :  Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and its successors, and if such company shall for any reason no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other “nationally recognized statistical rating organization” as set forth on the most current list of such organizations released by the Securities and Exchange Commission.

Securities Administrator :  Wells Fargo Bank, N.A., its successors and assigns and, if a successor securities administrator is appointed hereunder, such successor, as securities administrator.

Securities Administrator Distribution Account Reinvestment Income :  For each Distribution Date, all income and gain net of any losses realized since the preceding Distribution Date (or the Closing Date, in the case of the initial Distribution Date) from Eligible Investments of funds in the Distribution Account.

Sellers :  MorEquity, Inc., a Nevada corporation, American General Home Equity, Inc., a Delaware corporation, and American General Financial Services of Arkansas, Inc., a Delaware corporation, and their respective successors and assigns, in each of their capacities as a Seller under the Mortgage Loan Purchase Agreement.

Senior Certificates :  The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 and Class A-10 Certificates.

Servicer :  PennyMac Loan Services, LLC, a Delaware limited liability company, and its successor and assigns, and, if a successor servicer (including the Back-up Servicer) is appointed hereunder, such successor, as servicer.

Servicer Custodial Account :  The account created and maintained by the Servicer pursuant to Section 3.06(a) .

Servicer Custodial Account Reinvestment Income :  For each Servicer Remittance Date, all income and gain net of any losses realized since the preceding Servicer Remittance Date (or since the Closing Date, in the case of the initial Servicer Remittance Date) from Eligible Investments of funds in the Servicer Custodial Account.

Servicer Event of Default :  Any one of the conditions or circumstances enumerated in Section 7.01(a) .

Servicer Modification :  A modification to the terms of a Mortgage Loan, made in accordance with the terms of the Delegated Authority Guidelines.

Servicer Prepayment Charge Payment Amount :  The amount payable by the Servicer in respect of any waived Prepayment Charges pursuant to Section 3.01(h) , which amount shall be equal to the difference between the amount of Prepayment Charge due by a Mortgagor before

 

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any waiver and the actual amount of the Prepayment Charge that was paid by the Mortgagor which amounts shall not be part of any Trust REMIC.

Servicer Remittance Date :  The 19th day of each month beginning in August 2009 (or, if such day is not a Business Day, the immediately preceding Business Day).

Servicing Advances :  All customary, reasonable and necessary out-of-pocket costs and expenses incurred in the performance by the Servicer or any subservicer of its servicing obligations, including, but not limited to, the cost of (a) the preservation, restoration, inspection and protection of the Mortgaged Property, (b) any enforcement or judicial proceedings, including foreclosures (and the attendant cost of recording any Assignments), (c) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the Mortgage, (d) expenses of sales of Bulk Loans pursuant to the Delegated Authority Guidelines and (e) payments made by the Servicer or any subservicer with respect to a Mortgaged Property pursuant to Section  3.07 .

Servicing Fee :  With respect to each Mortgage Loan, the fee payable to the Servicer equal to one-twelfth of the product of the Servicing Fee Rate and the Stated Principal Balance of such Mortgage Loan.  Such fee shall be payable monthly, computed on the basis of the same principal amount 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 3.08 ) of related Monthly Payments collected by the Servicer.

Servicing Fee Rate :  With respect to each Mortgage Loan, 0.50% per annum.

Servicing Officer :  Any officer of the Servicer whose name appears on a list of servicing officers furnished to the Trustee, the Master Servicer, the Interim Subservicer, the Sellers, the Securities Administrator, the Depositor and the Custodian by the Servicer, as such list may be amended from time to time.

Servicing Transfer Costs :  With respect to (i) any transfer of servicing from PennyMac Loan Services, LLC to SPS, as Back-up Servicer, all reasonable costs and expenses incurred by the Master Servicer or the Back-up Servicer in connection with the transfer of servicing from PennyMac Loan Services, LLC to SPS, as Back-up Servicer, including, without limitation, any reasonable costs or expenses of the Master Servicer or the Back-up Servicer associated with the complete transfer of all servicing data and (ii) any transfer from SPS to the Master Servicer or other successor Servicer, all reasonable costs and expenses incurred by the Master Servicer in connection with the appointment of a successor Servicer and the transfer of servicing from SPS, including, without limitation, any reasonable costs or expenses associated with the identification and engagement of a successor Servicer (provided that such costs or expenses shall not involve or relate to any increase in the Servicing Fee or compensation), the documentation of the assumption of servicing by the successor Servicer, the complete transfer of all servicing data and, if the Master Servicer succeeds to the role of Servicer hereunder, the completion, correction or manipulation of such servicing data as may be required by the Master Servicer to correct any

 

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errors or insufficiencies in the servicing data or otherwise to enable the Master Servicer to service the Mortgage Loans properly and effectively.

Servicing Transfer Date : With respect to any Mortgage Loan subserviced by the Interim Subservicer, the date on which (a) the Interim Subservicer ceases subservicing such Mortgage Loan on behalf of the Servicer and (b) the Servicer or a subservicer other than the Interim Subservicer begins servicing or subservicing, as applicable, such Mortgage Loan; provided, however, that the final Servicing Transfer Date shall be no later than October 1, 2009 (unless the Servicer and the Interim Subservicer agree in writing to complete the transfer of servicing on a later date).

Simple Interest Method :  With respect to any simple interest Mortgage Loan, the method of allocating a payment to principal and interest, pursuant to which the portion of such payment that is allocated to interest is equal to the product of the applicable Mortgage Interest Rate multiplied by the Stated Principal Balance as of the date of the last payment made by or on behalf of the Mortgagor multiplied by the number of days elapsed since the preceding payment of interest was made and divided by 360 or 365, as specified in the related Mortgage Note, and the remainder of such payment is allocated to principal.

SPS :  Select Portfolio Servicing, Inc., a Utah corporation, and its successors and assigns, and any successor in interest, as Back-up Servicer and as subservicer to PennyMac Loan Services, LLC.

Startup Day :  As defined in Section 9.01(b) hereof.

Stated Principal Balance :  As to any date of determination and any Mortgage Loan (A) (x) subject to the Simple Interest Method and (y) subject to the Actuarial Method and prior to August 1, 2009, the principal balance of such Mortgage Loan at its origination, less the sum of (i) all collections and other amounts credited against the principal balance of such Mortgage Loan prior to such date, (ii) any principal reduction resulting from a Deficient Valuation prior to such date and (iii) any principal reduction resulting from a modification prior to such date plus any principal increase as a result of a capitalization in connection with a modification or (B) subject to the Actuarial Method on and after August 1, 2009, the unpaid principal balance of such Mortgage Loan at the most recent Due Date, as specified in the amortization schedule (before any adjustment to that amortization schedule due to any moratorium or similar waiver or grace period), after giving effect to (i) any previous partial Principal Prepayments and Liquidation Proceeds received, (ii) the payment of principal due on such Due Date, (iii) any principal reduction resulting from a Deficient Valuation, (iv) the principal portion of Realized Losses as a result of Servicer Modifications incurred prior to such Due Date and (v) any principal increase as a result of a capitalization in connection with a Servicer Modification.  For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Stated Principal Balance equal to the Stated Principal Balance of the related Mortgage Loan as of the final recovery of related Liquidation Proceeds and a Stated Principal Balance of zero thereafter.  The Stated Principal Balance of any REO Property on any date shall be deemed to equal the Stated Principal Balance of the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO Property, minus any REO Proceeds allocable to principal received with respect thereto on or prior to such day.

 

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Subordinated Certificates :  The Class B-1, Class B-2, Class CE and Class R Certificates.

Subsequent Recovery : Any amount (net of reimbursable expenses) received on a Mortgage Loan subsequent to such Mortgage Loan being determined to be a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior month.

Substitution Adjustment Amount :  As defined in Section 2.03(c) hereof.

Supplemental Memorandum :  That certain Supplemental Memorandum, dated July 30, 2009, relating to the offering of the Offered Certificates, as it may be amended from time to time.

Targeted Overcollateralization Amount :  As of any Distribution Date, 20% of the Cut-off Date Aggregate Principal Balance.

Tax Matters Person :  The tax matters person appointed pursuant to Section 9.01(e) hereof.

Tax Returns :  The federal income tax returns on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of the Trust for each REMIC created pursuant to this Agreement under the REMIC Provisions, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.

Termination Price :  As defined in Section 10.01(a) hereof.

Transferred Assets :  As defined in Section 2.01 hereof.

Trust :  American General Mortgage Loan Trust 2009-1, the trust created hereunder.

Trust Fund :  The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder, with respect to a portion of which a REMIC election is to be made, such entire Trust Fund consisting of:  (i) such Mortgage Loans as from time to time are subject to this Agreement, together with all collections thereon and proceeds thereof, (ii) any REO Property, together with all collections thereon and proceeds thereof, (iii) the Trustee’s rights with respect to the Mortgage Loans under all insurance policies required to be maintained pursuant to this Agreement and any proceeds thereof, (iv) the Depositor’s rights under the Mortgage Loan Purchase Agreement (including any security interest created thereby) and (v) the Servicer Custodial Account, the Master Servicer Custodial Account, the Distribution Account, the Class P Account, the Class CE Grantor Trust Subaccount, the Exchangeable Certificates Grantor Trust Subaccount, the Lower Tier Distribution Subaccount and the Upper Tier Distribution Subaccount and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto.

Trust REMIC :  Either of the Lower Tier REMIC or the Upper Tier REMIC.

 

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Trustee :  U.S. Bank National Association, a national banking association, and its successors and assigns and, if a successor trustee is appointed as herein provided, such successor, as trustee.

Uncertificated Accrued Interest : With respect to each Regular Interest (other than the Class CE Upper Tier Regular Interest) and each Distribution Date, an amount equal to one month’s interest at the related REMIC Pass-Through Rate on the Uncertificated Balance of such Regular Interest.  With respect to the Class CE Upper Tier Regular Interest on each Distribution Date, an amount equal to one month’s interest at its REMIC Pass-Through Rate on its Notional Amount.

Uncertificated Balance :  The amount of any Regular Interest outstanding as of any date of determination.  As of the Closing Date, the Uncertificated Balance of each Regular Interest shall equal the amount set forth in the Preliminary Statement hereto as its initial Uncertificated Balance.  On each Distribution Date, the Uncertificated Balance of each such Regular Interest shall be reduced by all distributions of principal made on such Regular Interest on such Distribution Date pursuant to Section 4.02 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 4.02 .  If and to the extent necessary and appropriate, the Uncertificated Balance of each Regular Interest shall be increased on such Distribution Date by Subsequent Recoveries as provided in Section 4.02.  The Uncertificated Balance of the Class LT-ZZ Interest shall be increased by interest deferrals as provided in Section 4.02 .  The Uncertificated Balance of the Class CE Upper Tier Regular Interest shall at all times equal the Overcollateralization Amount.  The Uncertificated Balance of each Regular Interest shall never be less than zero.

United States Person or U.S. Person :  (i) A citizen or resident of the United States, (ii) a corporation, partnership or other entity treated as a corporation or partnership for United States federal income tax purposes organized in or under the laws of the United States or any state thereof or the District of Columbia (unless, in the case of a partnership, Treasury regulations provide otherwise), (iii) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust (or to the extent provided in applicable Treasury regulations, certain trusts in existence on August 20, 1996 that are eligible and elect to be treated as United States Persons).  Notwithstanding the preceding sentence, for purposes of the definition of a “Permitted Transferee,” a U.S. Person shall not include any person whose income is attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of such Person or any other U.S. Person.

Unpaid Realized Loss Amount :  For any of the Class B Certificates and as to any Distribution Date, the excess of (x) the aggregate Applied Realized Loss Amounts allocated to such Class for all prior Distribution Dates over (y) the sum of (a) the cumulative amount of any Subsequent Recoveries allocated to such Class on or prior to such Distribution Date and (b) the aggregate Realized Loss Amortization Amounts with respect to such Class for all prior Distribution Dates.

 

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Upper Tier Distribution Subaccount :  The sub-account of the Distribution Account designated by the Securities Administrator pursuant to Section 3.06(c) .

Upper Tier Interests :  The Upper Tier Regular Interests and the Class UR Interest.

Upper Tier Regular Interest : Any of the regular interests in the Upper Tier REMIC listed in the Preliminary Statement, the ownership of which is represented by the Certificates.  Any of the Class A-1 Interest, the Class A-3 Interest, the Class A-4 Interest, the Class A-5 Interest, the Class A-6 Interest, the Class A-7 Interest, the Class B-1 Interest, the Class B-2 Interest, the Class CE Interest and the Class P Interest are Upper Tier Regular Interests.

Upper Tier REMIC :  As defined in the Preliminary Statement, the assets of which consist of the Lower Tier Regular Interests and such amounts as shall be deemed held in the Upper Tier Distribution Subaccount.

Upper Tier REMIC Pass-Through Rate :  As set forth in the Preliminary Statement.  

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) 97% of all Voting Rights shall be allocated to the Holders of the Senior Certificates (other than the Exchangeable Certificates) and the Class B Certificates in proportion to the Certificate Principal Balances of their respective Certificates, (b) 1% of all Voting Rights shall be allocated to the Holder of the Class R Certificate, (c) 1% of all Voting Rights shall be allocated to the Holders of the Class CE Certificates and (d) 1% of all Voting Rights shall be allocated to the Holders of the Class P Certificates.

In the event that all or a portion of a Combination of Classes of Exchangeable REMIC Certificates in any Exchangeable REMIC Combination is exchanged for a  proportionate portion of the Class of Exchangeable Certificates in the related Combination, the Class of such Exchangeable Certificates will be entitled to a proportionate share of the Voting Rights allocated to the Classes of Exchangeable REMIC Certificates in the related Combination.

WHFIT :  A “Widely Held Fixed Investment Trust” as that term is defined in Treasury regulations § 1.671-5(b)(22) or successor provisions.

WHFIT Regulations :  Treasury regulations § 1.671-5, as amended.

Written Order to Authenticate :  A written order by which the Depositor directs the Securities Administrator to execute, authenticate and deliver the Certificates.

Section 1.02.

Accounting .

Unless otherwise specified herein, for the purpose of any definition or calculation, whenever amounts are required to be netted, subtracted or added or any distributions are taken into account such definition or calculation and any related definitions or calculations shall be determined without duplication of such functions.

 

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ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01.

Conveyance of Mortgage Loans .

The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf of the Trust, without recourse, for the benefit of the Certificateholders, all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to (1) each Mortgage Loan identified on the Mortgage Loan Schedule, including the related Cut-off Date Principal Balance, all interest accruing thereon after the Cut-off Date and all collections in respect of interest and principal due after the Cut-off Date; (2) property which secured each such Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (3) its interest in any insurance policies in respect of the Mortgage Loans; (4) the rights of the Depositor under the Mortgage Loan Purchase Agreement; (5) $100 (which amount has been delivered by the Depositor to the Securities Administrator to be held in the Class P Account until distributed to the Holders of the Class P Certificates pursuant to Section 4.02(a)(vii)); (6) all other assets included or to be included in the Trust Fund; and (7) all proceeds of any of the foregoing (collectively, the “ Transferred Assets ”).

The Depositor shall deliver, or cause to be delivered, to the Custodian on behalf of the Trustee, the following documents or instruments with respect to each Mortgage Loan (a “ Mortgage File ”):

(i)

(A) the original Mortgage Note bearing an unbroken chain of endorsements or allonges from origination to the last named endorsee and including any riders or addenda to the Mortgage Note, endorsed to blank and signed in the name of the last named endorsee by an authorized officer and a power of attorney, if applicable, or (B) with respect to any lost Mortgage Note, a Lost Note Affidavit from the related Seller, with a copy of the related lost Mortgage Note;

(ii)

for each Mortgage Loan that is not a MERS Mortgage Loan, the original Mortgage or certified copy thereof, with evidence of recording thereon, or a certified copy if the original Mortgage has not yet been returned from the recording office along with evidence that the Mortgage has been sent for recording, and in the case of each MERS Mortgage Loan, the original Mortgage or a certified copy thereof, with evidence of recording thereon, or a certified copy if the original Mortgage has not yet been returned from the recording office along with evidence that the Mortgage has been sent for recording, noting the presence of the MIN of the related Mortgage Loan and either language indicating that the Mortgage Loan is a MOM Mortgage Loan if the mortgage loan is a MOM Mortgage Loan or if the Mortgage Loan was not a MOM Mortgage Loan at origination, the original Mortgage or certified copy thereof and the Assignment thereof to MERS, with evidence of recording indicated thereon, or a certified copy if the original Mortgage has not yet been returned from the recording office along with evidence that the Mortgage has been sent for recording;

 

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(iii)

except with respect to each MERS Mortgage Loan, an original Assignment in blank, in form and substance acceptable for recording;

(iv)

for each Mortgage Loan that was not a MERS Mortgage Loan at its origination, the originals of any intervening recorded Assignments or certified copies thereof, showing an unbroken chain of assignment from origination to the last assignee, with evidence of recording thereon (or, if an original intervening Assignment has not been returned from the recording office, a copy thereof certified by or on behalf of the related Seller, the original to be delivered to the Custodian forthwith after return from such recording office;

(v)

an original or copy of the mortgage title insurance policy, or original or copy of title commitment (or in appropriate jurisdictions, attorney’s opinion of title or copy thereof); and

(vi)

originals or certified copies of all assumption, modification, consolidation or extension agreements or if required by law of the applicable jurisdiction to protect the Trust, a certified copy with evidence of recording thereon (or if not yet returned from the recording office, a copy thereof certified by or on behalf of the related Seller, the original or certified copy to be delivered to the related Seller forthwith after return from such recording office) with evidence of recording thereon, if required by law of the applicable jurisdiction to protect the Trust.

With respect to any MERS Mortgage Loan, 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 the purpose of the system of recording transfers of beneficial  ownership of mortgages maintained by MERS.  In addition, if MERS discontinues the MERS system and it becomes necessary to record an assignment of mortgage to the Trustee, any related expenses will be paid by the Trust.

Upon discovery or receipt of notice of any materially defective document in, or that a document is missing from, a Mortgage File, the related Seller shall cure such defect or deliver such missing document to the Custodian on behalf of the Trustee within the time frame specified in Section 2.03 .  If such Seller does not cure such defect or deliver such missing document within such time period, such Seller shall either repurchase or substitute for such Mortgage Loan in accordance with Section 2.03 if such defect or missing document prevents or materially delays the Trust from (a) realizing against the related Mortgaged Property through foreclosure or similar loss mitigation activity or (b) processing any title claim under the related title insurance policy (unless such Seller provides appropriate recourse under a representation and warranty relating to good title).

The Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase Agreement.

The Servicer shall cause the notice required by Section 404 of the Homes Act to be provided within thirty (30) days of the Closing Date to each Mortgagor with respect to each Mortgage Loan and each such notice shall, to the extent permitted by the Homes Act, specify (i)

 

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the Trust is “creditor” for purposes of the Homes Act, (ii) the address of the Trust is c/o the Trustee at its Corporate Trust Office; (iii) the Closing Date; (iv) the Servicer is the contact person with authority to act on behalf of the Trust; and (v) Assignments of Mortgage are not being recording in connection with the sale of the Mortgage Loans to the Trust.  If the Mortgage Loan is a MERS Mortgage Loan, such notice shall state, “Ownership of your Mortgage Loan is also recorded on Mortgage Electronic Registrations System’s registry at 1818 Library Street, Suite 300 Reston, VA 20190.”

Section 2.02.

Acceptance by Trustee or Custodian .

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 or the Custodian as its agent, as the case may be, constituting the Mortgage Files, and that it will hold such other assets as are included in the Trust Fund delivered to it, in trust for the exclusive use and benefit of all present and future Certificateholders.

The Custodian on behalf of the Trustee agrees, for the benefit of the Certificateholders, to review each Mortgage File upon the receipt thereof and to certify in substantially the form attached hereto as Exhibit F that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents constituting part of such Mortgage File required to be delivered to it pursuant to this Agreement are in its possession, (ii) the Mortgage Note has been signed by the Mortgagor and any co-Mortgagor, (iii) other than with respect to any MERS Mortgage Loan, the related Mortgage Note has been endorsed in blank and (iv) based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule that corresponds to items (6), (8), (10) and (12) of the Mortgage Loan Schedule accurately reflects information set forth in the Mortgage File.  It is herein acknowledged that, in conducting such review, the Custodian is under no duty or obligation 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 have actually been recorded or that they are other than what they purport to be on their face nor shall the Custodian be under any duty to determine whether there are any intervening assignments or assumption or modification agreements with respect to any Mortgage Loan.  The Custodian shall have no responsibility for reviewing any Mortgage File except as expressly provided for in this Section 2.02 or determining if a mortgage loan qualifies as an Eligible Substitute Mortgage Loan.

If in the process of reviewing the Mortgage Files and making or preparing, as the case may be, the certification referred to above, the Custodian finds any document or documents constituting a part of a Mortgage File to be missing or defective in any material respect, at the conclusion of its review the Custodian shall so notify the applicable Seller, the Depositor, the Securities Administrator, the Master Servicer and the Servicer.  Such notification shall be in the form of an exception report.

The Depositor and the Trustee intend that the assignment and transfer herein contemplated constitute a sale of the Mortgage Loans and the other Transferred Assets, conveying good title thereto free and clear of any liens and encumbrances, from the Depositor to

 

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the Trustee and that such property not be part of the Depositor’s estate or property of the Depositor in the event of any insolvency by the Depositor.  In the event that such conveyance is deemed to be, or to be made as security for, a loan, the parties intend that the Depositor shall be deemed to have granted and the Depositor does hereby grant to the Trustee, on behalf of the Trust, a first priority perfected security interest in all of the Depositor’s right, title and interest, whether now owned or hereafter acquired, in and to the Mortgage Loans, the other Transferred Assets and the proceeds thereof, and that this Agreement shall constitute a security agreement under applicable law.

Section 2.03.

Repurchase or Substitution of Mortgage Loans .

(a)

Upon discovery by any of the Depositor, the Master Servicer, the Securities Administrator, the Servicer, the Trustee or the Custodian of (i) any materially defective document in, or that, a document is missing from, a Mortgage File which defect or missing document prevents or materially delays the Trust from (A) realizing against the related Mortgaged Property through foreclosure or similar loss mitigation activity or (B) processing any title claim under the related title insurance policy (unless the applicable Seller provides appropriate recourse under a representation and warranty in the Mortgage Loan Purchase Agreement relating to good title) or (ii) the breach by a Seller of any representation or warranty under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects such Mortgage Loan or the interest therein of the Certificateholders, the party discovering such breach shall give prompt written notice to the other parties, to the applicable Seller and to American General Finance Corporation of such defect, missing document or breach.  The Custodian shall give such notice in the form of an exception report.  Upon receipt of any such notice, in the case of a defective or missing document, the Trustee shall promptly request that the applicable Seller cure such defect or deliver such missing document within 120 days from the date such Seller was notified of such missing document or defect or, in the case of a breach of a representation or warranty, request the applicable Seller cure such breach within 90 days from the date such Seller was notified of such breach.  If the applicable Seller does not deliver such missing document or cure such defect or if such Seller does not cure such breach in all material respects during such period, the Trustee, on behalf of the Trust, shall enforce such Seller’s obligation under the Mortgage Loan Purchase Agreement and cause such Seller to repurchase such Mortgage Loan from the Trust Fund at the Purchase Price on the last Business Day of the calendar month in which such period expires (subject to Section 2.03(d) ).  The Purchase Price for the repurchased Mortgage Loan shall be deposited in the Master Servicer Custodial Account, and the Custodian on behalf of the Trustee, upon receipt of written notice from the Master Servicer of such deposit and a Request for Release from the Servicer, shall release, to the applicable Seller the related Mortgage File, and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the applicable Seller shall furnish to it and as shall be necessary to vest in such Seller any Mortgage Loan released pursuant hereto and neither the Trustee nor the Custodian shall have any further responsibility with regard to such Mortgage Loan.  In lieu of repurchasing any such Mortgage Loan as provided above, the related Seller may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a Defective Mortgage Loan) and substitute one or more Eligible Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 2.03(c) .  Pursuant to the Mortgage Loan Purchase Agreement, to the extent a Seller fails to repurchase or substitute for a Mortgage Loan as required by the Mortgage Loan Purchase

 

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Agreement, American General Finance Corporation is obligated to repurchase or substitute a similar Mortgage Loan for such Defective Mortgage Loan.  In addition, if the Trustee receives written notice from the Depositor, the Master Servicer, the Securities Administrator or the Servicer of a breach of a representation with respect to a Mortgage Loan set forth in Section 6.01(d) or (w) of the Mortgage Loan Purchase Agreement that occurs as a result of a violation of an applicable predatory or abusive lending law, the Trustee, on behalf of the Trust, shall enforce the right of the Trust to reimbursement by the applicable Seller or American General Finance Corporation for all costs or damages incurred by the Trust as a result of the violation of such law (such amount, the “ Reimbursement Amount ”).  

It is understood and agreed that the representations and warranties set forth in the Mortgage Loan Purchase Agreement shall survive the transfer and assignment of the Mortgage Loans to the Trust and shall inure to the benefit of the Certificateholders notwithstanding any restrictive or qualified endorsement or assignment.  It is understood and agreed that the obligations of the Sellers (and, if applicable, American General Finance Corporation) set forth in this Section 2.03(a) to cure, substitute or repurchase a Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement and to pay the Reimbursement Amount constitute the sole remedies available to the Certificateholders and to the Trustee on their behalf respecting a breach of the representations and warranties contained in the Mortgage Loan Purchase Agreement.

The representations and warranties of the Sellers with respect to the Mortgage Loan Purchase Agreement, which have been assigned to the Trustee hereunder, were made as of the dates specified in the Mortgage Loan Purchase Agreement.  It is hereby acknowledged that the Depositor shall have no obligation or liability with respect to any materially defective document in, or that, a document is missing from, a Mortgage File or breach of any representation or warranty with respect to the Mortgage Loans under any circumstances.

(b)

Within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of the breach of any representation, warranty or covenant of the Servicer set forth in Section 2.05 which materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the Servicer shall cure such breach in all material respects.

(c)

Any substitution of Eligible Substitute Mortgage Loans by a Seller for Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the last Business Day that is within two years after the Closing Date.  As to any Defective Mortgage Loan for which a Seller substitutes an Eligible Substitute Mortgage Loan or Loans, such substitution shall be effected by such Seller, delivering to the Custodian on behalf of the Trustee for such Eligible Substitute Mortgage Loan or Loans, the documents and agreements, with all necessary endorsements thereon, as are required by Section 2.01 , together with an Officer’s Certificate of such Seller providing that each such Eligible Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Adjustment Amount (as described below), if any, in connection with such substitution.  The Custodian on behalf of the Trustee shall acknowledge receipt for such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days thereafter, shall review such documents as specified in Section 2.02 and deliver to the Servicer, the Master Servicer, the Securities Administrator and the Depositor, with respect to such Eligible Substitute Mortgage Loan or Loans, a certification substantially in the form attached hereto as Exhibit F , with any applicable exceptions noted on the exception report attached to the

 

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certification.  Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the month of substitution are not part of the Trust Fund and will be retained by the related Seller.  For the month of substitution, distributions to Certificateholders will reflect the collections and recoveries in respect of such Defective Mortgage Loan in the Collection Period preceding the date of substitution and the related Seller shall thereafter be entitled to retain all amounts subsequently received in respect of such Defective Mortgage Loan.  The Depositor shall give or cause to be given written notice to the Certificateholders that such substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such Defective Mortgage Loan from the terms of this Agreement and the substitution of the Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee, the Master Servicer, the Securities Administrator and the Servicer.  Upon such substitution, such Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in all respects to the terms of this Agreement and, in the case of a substitution effected by a Seller, all applicable representations and warranties thereof included in the Mortgage Loan Purchase Agreement as of the date of substitution.

For any month in which a Seller or American General Finance Corporation substitutes one or more Eligible Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Servicer will determine the amount (the “ Substitution Adjustment Amount ”), if any, by which the aggregate Purchase Price of all such Defective Mortgage Loans exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan, of the Stated Principal Balance thereof as of the date of substitution, together with one month’s interest on such Stated Principal Balance at the applicable Net Mortgage Interest Rate.  On the date of such substitution, the applicable Seller will deliver or cause to be delivered to the Master Servicer for deposit in the Master Servicer Custodial Account an amount equal to the Substitution Adjustment Amount, if any, and the Custodian on behalf of the Trustee, upon receipt of the related Eligible Substitute Mortgage Loan or Loans and notice by the Master Servicer of such deposit, shall release to the applicable Seller the related Mortgage File or Files and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the applicable Seller shall deliver to it and as shall be necessary to vest therein any Defective Mortgage Loan released pursuant hereto.

In addition, the applicable Seller shall obtain at its own expense and deliver to the Trustee and the Securities Administrator an Opinion of Counsel to the effect that such substitution will not cause (a) any United States federal income tax to be imposed on the Trust Fund, including without limitation, any United States federal income tax imposed on “prohibited transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code, or (b) any Trust REMIC created hereunder to fail to qualify as a REMIC at any time that any Certificate is outstanding.  If such Opinion of Counsel cannot be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given.

(d)

Upon discovery by a Seller, the Servicer, the Master Servicer, the Securities Administrator or the Trustee that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall within two Business Days give written notice thereof to the other parties.  In connection therewith, the applicable Seller shall repurchase or, subject to the limitations set forth in Section 2.03(c) , such Seller may substitute one or more Eligible Substitute Mortgage Loans for

 

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the affected Mortgage Loan within 90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan.  Any such repurchase or substitution shall be made in the same manner as set forth in Section 2.03(a) .  The Trustee shall reconvey to the applicable Seller the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty.

Section 2.04.

Representations and Warranties of the Depositor .

The Depositor represents and warrants to the Trust and the Trustee on behalf of the Certificateholders and to the Servicer, the Interim Subservicer, the Master Servicer, the Securities Administrator and the Custodian, as of the Closing Date, as follows:

(i)

This Agreement constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity); "

(ii)

Immediately prior to the sale and assignment by the Depositor to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had good and marketable title to each Mortgage Loan (insofar as such title was conveyed to it by the Sellers) subject to no prior lien, claim, participation interest, mortgage, security interest, pledge, charge or other encumbrance or other interest of any nature;

(iii)

As of the Closing Date, the Depositor has transferred all right, title interest in the Mortgage Loans to the Trustee on behalf of the Trust;

(iv)

The Depositor has not transferred the Mortgage Loans to the Trustee on behalf of the Trust with any intent to hinder, delay or defraud any of its creditors;

(v)

The Depositor has been duly incorporated and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, with full power and authority to own its assets and conduct its business as presently being conducted;

(vi)

The Depositor is not in violation of its organizational documents or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Depositor is a party or by which it or its properties may be bound, which default might result in any material adverse changes in the financial condition, earnings, affairs or business of the Depositor or which might materially and adversely affect the properties or assets, taken as a whole, of the Depositor;

(vii)

The execution, delivery and performance of this Agreement by the Depositor, and the consummation of the transactions contemplated thereby, do not and will not result in a material breach or violation of any of the terms or provisions of, or, to

 

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the knowledge of the Depositor, constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Depositor is a party or by which the Depositor is bound or to which any of the property or assets of the Depositor is subject, nor will such actions result in any violation of the provisions of the certificate of formation or operating agreement of the Depositor or, to the best of the Depositor’s knowledge without independent investigation, any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Depositor or any of its properties or assets (except for such conflicts, breaches, violations and defaults as would not have a material adverse effect on the ability of the Depositor to perform its obligations under this Agreement); and

(viii)

To the best of the Depositor’s knowledge without any independent investigation, no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body of the United States or any other jurisdiction is required for the issuance of the Certificates, or the consummation by the Depositor of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, registrations or qualifications as (a) may be required under State securities or Blue Sky laws, (b) have been previously obtained or (c) the failure of which to obtain would not have a material adverse effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement.

The representations and warranties made pursuant to this Section 2.04 shall survive delivery of the respective Mortgage Files to the Custodian on the Trustee’s behalf and shall inure to the benefit of the Certificateholders.

Section 2.05.

Representations, Warranties and Covenants of the Servicer .

The Servicer represents and warrants to the Trust and the Trustee on behalf of the Certificateholders and to the Depositor, the Interim Subservicer, the Master Servicer, the Securities Administrator and the Custodian, as of the Closing Date, as follows:

(i)

Organization and Good Standing of the Servicer .  It is a limited liability company duly organized, validly existing and in good standing under the laws of the State of its formation and has, in all material respects, full power and authority to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement and when this Agreement has been executed and delivered, this Agreement will constitute the legal, valid and binding obligation of the Servicer, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the availability of equitable remedies (whether in a proceeding at law or in equity).

(ii)

Due Qualification .  The Servicer is duly qualified to do business and is in good standing as a foreign corporation and has obtained all necessary licenses and approvals, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any Mortgage File relating to any Mortgage Loan unenforceable

 

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by it, the Depositor or the Trustee and would have a material adverse effect on its business, properties, assets or condition (financial or other) or has appointed the Interim Subservicer or SPS as subservicer such that the Servicer’s failure to be duly qualified to do business, to be in good standing as a foreign corporation or to have obtained all necessary licenses and approvals would not render any Mortgage File relating to any Mortgage Loan unenforceable by the Interim Subservicer or SPS as subservicer, the Depositor or the Trustee and would not have a material adverse effect on its business, properties, assets or condition (financial or other).

(iii)

Due Authorization .  The execution, delivery and performance of this Agreement and any other document or instrument delivered pursuant hereto or thereto and the consummation of the transactions provided for in this Agreement have been duly authorized by all necessary action on the part of the Servicer.

(iv)

No Conflict .  The Servicer’s execution and delivery of this Agreement, the performance of the transactions contemplated by this Agreement, and the fulfillment of the terms of this Agreement applicable to it will not violate any existing law or regulation or any order or decree of any court applicable to the Servicer or any provision of the formation documents of the Servicer, or constitute (with or without notice or lapse of time or both) a material default under, any contract, agreement, mortgage, deed of trust, or other instrument to which it is a party or by which it or any of its properties are bound.

(v)

Governmental Authorization .  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by the Servicer of this Agreement to which it is a party and the performance of its obligations hereunder and thereunder other than those authorizations and approvals that have been obtained and those notices and filings that have been made.

(vi)

No Proceedings .  There are no proceedings or investigations pending or, to the best of the Servicer’s knowledge, threatened against the Servicer, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that, in its judgment, has a reasonable likelihood of resulting in a material adverse effect on the transactions contemplated by this Agreement or  (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforcement of this Agreement.

(vii)

All Consents .  All authorizations, consents, orders or approvals of any court or other governmental authority required to be obtained by the Servicer in connection with the execution and delivery of this Agreement and the performance of the transactions contemplated by this Agreement have been obtained.

(viii)

Fannie Mae/Freddie Mac/HUD Approvals .  The Servicer is an approved servicer of conventional mortgage loans for Fannie Mae and Freddie Mac and is a

 

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mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act.

The representations and warranties made pursuant to this Section 2.05 shall survive delivery of the respective Mortgage Files to the Custodian on the Trustee’s behalf and shall inure to the benefit of the Certificateholders.

Section 2.06.

Representations, Warranties and Covenants of the Master Servicer .

The Master Servicer represents and warrants to the Trust and the Trustee on behalf of the Certificateholders and to the Depositor, the Interim Subservicer, the Servicer, the Securities Administrator and the Custodian, as of the Closing Date, as follows:

(i)

Organization and Good Standing of the Master Servicer .  The Master Servicer is a national banking association duly organized, validly existing and in good standing under the 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 securing a Mortgage Loan is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Master Servicer.  The Master 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 Master 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, constitutes the valid and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with its terms, subject to applicable law and 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.  All requisite corporate action has been taken by the Master Servicer to make this Agreement valid and binding upon the Master Servicer in accordance with its terms.

(ii)

All Consents .  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 Master Servicer or, if required, such consent, approval, authorization or order has been or will, prior to the Closing Date, be obtained.

(iii)

No Conflict .  The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Master Servicer and will not result in the breach of any term or provision of the articles of association or by-laws of the Master 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 Master Servicer or its property is subject, or result in the violation of any law, rule,

 

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regulation, order, judgment or decree to which the Master Servicer or its property is subject.

(iv)

No Proceedings .  There is no action, suit, proceeding or investigation pending or, to the best knowledge of the Master Servicer, threatened against the Master 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 Master Servicer, or in any material impairment of the right or ability of the Master 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 Master Servicer contemplated herein, or which would materially impair the ability of the Master Servicer to perform under the terms of this Agreement.

The representations and warranties made pursuant to this Section 2.06 shall survive delivery of the respective Mortgage Files to the Trustee or the Custodian on the Trustee’s behalf and shall inure to the benefit of the Certificateholders.

Section 2.07.

Issuance of Certificates .

The Trustee hereby (i) acknowledges the assignment to it of the Mortgage Loans, (ii) acknowledges the assignment to it of all other assets included in the Trust Fund and (iii) acknowledges the issuance of, and hereby declares that it holds the Lower Tier Regular Interests on behalf of the Upper Tier REMIC and the Certificateholders.  Concurrently with such assignment and delivery and in exchange therefor, the Securities Administrator, pursuant to the Written Order to Authenticate executed by an officer of the Depositor, has executed, and the Certificate Registrar has authenticated and delivered to or upon the order of the Depositor, the Certificates (other than the Class CE, Class P and Class  R Certificates) in minimum dollar denominations of $100,000 and integral dollar multiples of $1 in excess.  The Class CE, Class P and Class R Certificates are issuable only as single certificates.

The Depositor hereby designates the Upper Tier Regular Interests as “regular interests” and the Class UR Interest as the single class of “residual interest” in the Upper Tier REMIC for purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively. The Depositor hereby further designates the Lower Tier Regular Interests as “regular interests” and the Class LR Interest as the single class of “residual interest” in the Lower Tier REMIC for purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively.

The Securities Administrator acknowledges the obligation of the Class CE Certificate to pay Cap Carryover Amounts, and declares that it holds any such Cap Carryover Amounts in the Class CE Grantor Trust Subaccount as assets of the Class CE Grantor Trust on behalf of the Holders of the Offered Certificates and the Class B Certificates, which shall be treated as beneficially owning the right to receive the Cap Carryover Amounts from the Class CE Grantor Trust.  The interests evidenced by the Certificates constitute the entire beneficial ownership interest in the Trust Fund.

 

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Section 2.08.

Execution and Delivery of Certificates .

The Securities Administrator has executed and delivered to or upon the order of the Depositor, in exchange for the Mortgage Loans, together with all other assets included in the definition of “Trust Fund,” receipt of which is hereby acknowledged, Certificates in authorized denominations which evidence ownership of the entire Trust Fund.

The Depositor hereby directs the Securities Administrator to execute on behalf of the Trust Fund any letters of representation and related riders required by the Depository with respect to the Book-Entry Certificates.

ARTICLE III

ADMINISTRATION AND SERVICING
OF THE TRUST FUND

Section 3.01.

Master Servicing and Servicing of the Mortgage Loans; Subservicing .

(a)

For and on behalf of the Certificateholders, the Master Servicer shall monitor the obligations of the Servicer to service and administer the Mortgage Loans in accordance with the terms of this Agreement and shall have full power and authority to do or cause to be done any and all things which it may deem necessary or desirable in connection with such master servicing and administration; provided, however, the Master Servicer shall have no obligation to monitor the Servicer’s compliance with, or the Servicer’s actions or inactions under, the Delegated Authority Guidelines, including the Servicer’s loss mitigation activities with regard to Delinquent and defaulted Mortgage Loans, and any Realized Losses and expenses associated therewith.  Notwithstanding anything in this Agreement to the contrary, the Master Servicer shall enforce the obligations of the Servicer under the Delegated Authority Guidelines only to the extent the Master Servicer receives (i) written notice of any instance of non-compliance by the Servicer under the terms of the Delegated Authority Guidelines and (ii) the most recent version of the Delegated Authority Guidelines.  In performing its obligations hereunder, the Master Servicer shall act in a manner consistent with this Agreement, subject to the prior sentence, and with customary and usual standards of practice of prudent mortgage loan master servicers.  Furthermore, the Master Servicer shall consult with the Servicer as necessary from time to time to carry out the Master Servicer’s obligations hereunder, shall receive and review all reports, information and other data provided to the Master Servicer by the Servicer and shall enforce the obligation of the Servicer to perform and observe the covenants, obligations and conditions to be performed or observed by the Servicer under this Agreement.  The Master Servicer shall independently monitor the Servicer’s servicing activities with respect to each Mortgage Loan, reconcile the reports and other data provided to the Master Servicer pursuant to the previous sentence on a monthly basis based on the Mortgage Loan data provided to the Master Servicer by or on behalf of the Depositor on the Closing Date (upon which data the Master Servicer shall be entitled to rely and shall have no obligation to confirm or verify) and coordinate corrective adjustments to the Servicer’s and Master Servicer’s records, and based on such reconciled and corrected information, prepare the Master Servicer’s Certificate and any other information and statements required hereunder.  The Master Servicer shall reconcile the results of its Mortgage

 

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Loan monitoring with the actual remittances of the Servicer to the Master Servicer Custodial Account pursuant to this Agreement.

Notwithstanding anything in this Agreement to the contrary, the Master Servicer shall not be responsible or liable for the day-to-day servicing activities of the Servicer or for any unlawful act or omission, breach, negligence, fraud, willful misconduct or bad faith of the Servicer.  In addition, any information about any of the Mortgage Loans acquired or obtained by Wells Fargo Bank, N.A. in any other capacity under this Agreement shall not be attributable to the Master Servicer unless communication of that information to the Master Servicer is an express duty of such person under this Agreement.

The relationship of the Master Servicer (and of any successor to the Master Servicer as master servicer under this Agreement) to the Trustee and the Securities Administrator 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.

In the event the Master Servicer receives written notice of any instance of non-compliance by the Servicer under the terms of the Delegated Authority Guidelines, or the Master Servicer has knowledge of any other instance of non-compliance by the Servicer with its duties under this Agreement, the Master Servicer shall be responsible for reporting any such non-compliance by the Servicer to the Interim Subservicer, the Back-up Servicer, the Servicer, the Trustee, the Securities Administrator and the Depositor.  In the review of the Servicer’s activities, the Master Servicer may rely upon an Officer’s Certificate of the Servicer (or similar document signed by an officer of the Servicer), and the Servicer’s annual statement of compliance and accountant’s report required under Sections 3.15 and 3.16 , respectively, with regard to the Servicer’s compliance with the terms of this Agreement.  In the event that the Master Servicer, in its judgment, determines that the Servicer should be terminated in accordance with this Agreement, or that a notice should be sent pursuant to this Agreement with respect to the occurrence of an event that, unless cured, would constitute grounds for such termination, the Master Servicer shall notify the Depositor, the Securities Administrator, the Servicer, the Interim Subservicer, the Back-up Servicer and the Trustee thereof and the Master Servicer shall issue such notice or take such other action as it deems appropriate.

The Master Servicer, for the benefit of the Trustee and the Certificateholders, shall enforce the obligations of the Servicer under this Agreement, and shall, in the event of a Servicer Event of Default, act in accordance with Sections 7.01 and 7.05 .  Such enforcement, including, without limitation, the legal prosecution of claims and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Master Servicer, in its good faith business judgment, would require were it the owner of the Mortgage Loans.  The Master Servicer shall not be required to prosecute or defend any legal action except to the extent that the Master Servicer shall have received reasonable indemnity for its costs and expenses in pursuing such action.

To the extent that the costs and expenses incurred by the Master Servicer or the Trustee, as the case may be, in connection with any alleged or actual Servicer Event of Default, the termination of the Servicer, any appointment of a successor servicer and/or any transfer and assumption of servicing by the Master Servicer (including, without limitation, (i) all legal costs

 

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and expenses and all due diligence costs and expenses associated with the investigation of any alleged or actual Servicer Event of Default, the evaluation of potential termination and/or the actual termination of the Servicer and (ii) all Servicing Transfer Costs), are not fully and timely reimbursed by the terminated Servicer, the Master Servicer or the Trustee, as the case may be, shall be entitled to reimbursement of such Servicing Transfer Costs from the Master Servicer Custodial Account; provided , however , that if such Servicing Transfer Costs are ultimately reimbursed by the terminated Servicer to the Master Servicer or the Trustee, as applicable, after the Master Servicer has withdrawn such amounts from the Master Servicer Custodial Account then the Master Servicer or the Trustee, as applicable, shall remit such amounts that are reimbursed by the terminated Servicer to the Master Servicer Custodial Account.

If the Master Servicer or another successor Servicer acts as Servicer, it will not assume liability for the representations and warranties of the Servicer, if any, that it replaces and, as successor Servicer, it will not be accountable or liable for any unlawful act or omission, breach, negligence, fraud, willful misconduct or bad faith of the predecessor Servicer.

The Master Servicer shall indemnify the Depositor, the Trustee, the Servicer, the Interim Subservicer, the Custodian and the Securities Administrator and any of their directors, officers, employees or agents and hold them harmless against any and all claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and any other costs, fees and expenses that any of them may sustain in any way related to a breach of the Master Servicer’s obligation set forth in this Section 3.01(a) or the failure of the Master Servicer to perform any of its obligations under Section 3.15 .

(b)

The Servicer, as an independent contractor, shall service and administer the Mortgage Loans in accordance with this Agreement (including the Delegated Authority Guidelines) and Customary Servicing Procedures and the terms of the Mortgage Notes and Mortgages, and shall have full power and authority, acting alone or through subservicers or agents, including the Interim Subservicer and SPS as subservicer, to do or cause to be done any and all things in connection with such servicing and administration which the Servicer may deem necessary or desirable and consistent with the terms of this Agreement.  In addition, the Interim Subservicer shall service and administer each Mortgage Loan as subservicer for the Servicer until the Servicing Transfer Date for such Mortgage Loan in accordance with this Agreement (including the Delegated Authority Guidelines) and Customary Servicing Procedures and the terms of the Mortgage Notes and Mortgages, shall perform all of the duties, obligations and covenants of the Servicer under this Agreement and shall have full power and authority, acting alone or through subservicers or agents, to do or cause to be done any and all things in connection with such servicing and administration which the Interim Subservicer may deem necessary or desirable and consistent with the terms of this Agreement.  The Servicer may arrange for the subservicing of any Mortgage Loan it services by a subservicer pursuant to a subservicing agreement or this Agreement; provided , however , that such subservicing arrangement and the terms of the related subservicing agreement must provide for the servicing of such Mortgage Loan in a manner consistent with the servicing arrangements contemplated hereunder.  Notwithstanding the provisions of any subservicing agreement, any of the provisions of this Agreement relating to agreements or arrangements between the Servicer and a subservicer or reference to actions taken through a subservicer or otherwise, the Servicer shall remain obligated and liable to the Depositor, the Trustee, the Custodian, the Master Servicer, the

 

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Securities Administrator and the Certificateholders for the servicing and administration of the Mortgage Loans 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 the Mortgage Loans.  All actions of each subservicer, including the Interim Subservicer and SPS as subservicer,  shall be performed as agent of the Servicer with the same force and effect as if performed directly by the Servicer.  The Servicer shall pay all fees and expenses of any subservicer, including the Interim Subservicer and SPS as subservicer, from its own funds (provided that any such expenditures that would constitute Servicing Advances if made by the Servicer hereunder shall be reimbursable to the Servicer as Servicing Advances).  The Interim Subservicing Fee shall be paid to the Interim Subservicer out of the Servicing Fee.  For the avoidance of doubt, the Master Servicer shall have no obligation to monitor any subservicer (including the Interim Subservicer and SPS as subservicer).

(c)

At the cost and expense of the Servicer, without any right of reimbursement from the Trust Fund, the Servicer shall be entitled to terminate the rights and responsibilities of a subservicer and arrange for any servicing responsibilities to be performed by a successor subservicer; provided , however , that nothing contained herein shall be deemed to prevent or prohibit the Servicer, at the Servicer’s option, from electing to service the related Mortgage Loans itself.  If the Servicer’s responsibilities and duties under this Agreement are terminated and if requested to do so by the Depositor, the Master Servicer, the Securities Administrator or the Trustee, the Servicer shall at its own cost and expense terminate the rights and responsibilities of the subservicer as soon as is reasonably possible.  The Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and responsibilities of the subservicer from the Servicer’s own funds without reimbursement from the Trust Fund.

(d)

The Servicer shall be entitled to enter into an agreement with a subservicer for indemnification of the Servicer by the subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.  Except as expressly set forth herein, no subservicer shall be entitled to any indemnification from the Trust Fund.

(e)

Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a subservicer shall be deemed to be between the subservicer and Servicer alone, and, except as set forth herein, the Depositor, the Master Servicer, the Securities Administrator, the Custodian and the Trustee shall have no obligations, duties or liabilities with respect to the subservicer including no obligation, duty or liability of the Depositor, the Master Servicer, the Securities Administrator, the Custodian or the Trustee to pay the subservicer’s fees and expenses.  For purposes of distributions and advances by the Servicer pursuant to this Agreement, the Servicer shall be deemed to have received a payment on a Mortgage Loan when a subservicer, including the Interim Subservicer and SPS as subservicer, has received such payment.  The parties to this Agreement acknowledge that the Interim Subservicer shall subservice each Mortgage Loan on behalf of the Servicer until the related Servicing Transfer Date and thereafter as agreed between SPS and the Servicer, SPS shall subservice certain Mortgage Loans.

 

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(f)

The Servicer shall be responsible for making all required Servicing Advances (although the Interim Subservicer and SPS shall directly make all required Servicing Advances with respect to the Mortgage Loans subserviced by the Interim Subservicer or SPS, as the case may be, and SPS shall make all required Monthly Advances with respect to the Mortgage Loans subserviced by it on behalf of the Servicer and the Servicer shall be required to make any such required Advance only if the Interim Subservicer or SPS fails to do so) and shall service and administer the Mortgage Loans in accordance with all applicable laws, rules and regulations and shall provide to the Mortgagors any reports required to be provided to them thereby.  Each of the Depositor, the Master Servicer, the Securities Administrator and the Trustee shall furnish to the Servicer any powers of attorney and other documents reasonably necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement; provided, however, that none of the Depositor, the Master Servicer, the Securities Administrator or the Trustee shall be held liable for any misuse of any such power of attorney or other documents by the Servicer.  Notwithstanding anything contained herein to the contrary, the Servicer shall not, without the written consent of the Depositor, the Master Servicer, the Securities Administrator or the Trustee, as applicable:  (x) initiate any action, suit or proceeding solely under the name of the Depositor, the Master Servicer, the Securities Administrator or the Trustee, as applicable, without indicating the Servicer’s representative capacity; or (y) take any action with the intent to cause, and that actually causes, the Depositor, the Master Servicer, the Securities Administrator or the Trustee, as applicable, to be registered to do business in any state.  None of the Depositor, the Master Servicer, the Securities Administrator or the Trustee shall be responsible, and the Servicer (from its own funds and without any right of reimbursement from the Trust) shall indemnify the Depositor, the Master Servicer, the Securities Administrator and the Trustee, as applicable, for any action taken by the Servicer pursuant to the application of any power of attorney; provided that the Servicer shall have no obligation to indemnify the Depositor, the Master Servicer, the Securities Administrator or the Trustee, as applicable, for such action to the extent such action was taken pursuant to and in accordance with specific written instructions from the Depositor, the Master Servicer, the Securities Administrator or the Trustee, as applicable, which instructions are not based on the Servicer’s recommendations or proposals.

(g)

With respect to any Mortgage Loan as to which the Servicer has received notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Servicer shall not (i) obtain title to such Mortgaged Property as a result of or in lieu of foreclosure or otherwise or (ii) otherwise acquire possession of, or take any other action with respect to, such Mortgaged Property if, as a result of any such action, the Trust Fund would be considered to hold title to, to be a mortgagee-in-possession of, or to be an owner or operator of such Mortgaged Property within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Servicer has also previously determined, based on its reasonable judgment and a prudent report prepared by a Person who regularly conducts environmental audits using customary industry standards, that (A) such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Certificateholders to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and (B) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials for which investigation, testing, monitoring,

 

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containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Certificateholders to take such actions with respect to the affected Mortgaged Property.  The cost of the environmental audit report contemplated by this Section 3.01(g) shall be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from the Servicer Custodial Account as provided in Section 3.08(a) .  If the Servicer determines, as described above, that it is in the best economic interest of the Certificateholders to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials affecting any such Mortgaged Property, then the Servicer shall take such action as it deems to be in the best economic interest of the Certificateholders.  The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Servicer as a Servicing Advance, subject to the Servicer’s right to be reimbursed therefor from the Servicer Custodial Account as provided in Section 3.08(a) .

(h)

Notwithstanding anything in this Agreement to the contrary, in the event of a voluntary Principal Prepayment in full of a Mortgage Loan, the Servicer may not waive any Prepayment Charge or portion thereof required by the terms of the related Mortgage Note unless (i)(a) the Servicer determines that such waiver is standard and customary in servicing similar mortgage loans, (b) such waiver relates to a default or a reasonably foreseeable default and (c) such waiver would, in the reasonable judgment of such Servicer, maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into account the value of such Prepayment Charge, (ii) the enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or other similar law relating to creditors’ rights generally or (2) due to acceleration in connection with a foreclosure or other involuntary payment or (iii) such waiver is otherwise permitted by the Delegated Authority Guidelines.  If the Servicer has waived or does not collect all or a portion of a Prepayment Charge relating to a voluntary Principal Prepayment in full due to any action or omission of such Servicer, other than as provided above, the Servicer shall, on the date on which the Principal Prepayment in full is remitted to the Master Servicer, deliver to the Master Servicer the Servicer Prepayment Charge Payment Amount with respect to such Mortgage Loan for distribution in accordance with the terms of this Agreement.

(i)

The Servicer shall undertake to defend any claims against the Trust, the Trustee and/or itself by a Mortgagor or otherwise related to the servicing of any Mortgage Loan and shall represent and protect the interests of the Trust Fund in the same manner as it protects its own interests in mortgage loans in its own portfolio in any claim, proceeding or litigation regarding such mortgage loans.

Section 3.02.

Delinquency and Default .

(a)

Subject to Section 3.01(g) , in the event that any Mortgage Loan is in Early Stage Delinquency, Early Stage Default or Advanced Default, the Servicer shall proceed according to the Delegated Authority Guidelines.  If the portion of any Liquidation Proceeds allocable as a recovery of interest on any Mortgage Loan is less than the full amount of accrued and unpaid interest on such Mortgage Loan as of the date such proceeds are received, then the applicable

 

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Servicing Fees with respect to such Mortgage Loan shall be paid first and any amounts remaining thereafter shall be deposited into the Servicer Custodial Account.

(b)

Consistent with the terms of this Agreement, the Servicer may pursue loss mitigation activities as set forth in the Delegated Authority Guidelines.  Without limiting the generality of the foregoing and provided such action is in accordance with the Delegated Authority Guidelines, the Servicer in its own name or acting through subservicers or agents is hereby authorized and empowered when the Servicer believes it appropriate and reasonable in its best judgment,


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