GS MORTGAGE SECURITIES CORP.,
Depositor,
wilshire credit corporation,
Servicer,
nc capital corporation,
Responsible Party,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
Co-Trustee
---------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
---------------------------------------------
GSAMP TRUST 2005-S1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-S1
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
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Section 1.01
Definitions.............................................................................4
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01
Conveyance of Mortgage
Loans...........................................................40
Section 2.02
Acceptance by the Trustee of the Mortgage
Loans........................................44
Section 2.03
Representations, Warranties and Covenants of the Responsible Party
and the Servicer....44
Section 2.04
[RESERVED].............................................................................47
Section 2.05
Execution and Delivery of
Certificates.................................................47
Section 2.06
REMIC
Matters..........................................................................47
Section 2.07
Representations and Warranties of the
Depositor........................................47
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01
Servicer to Service Mortgage
Loans.....................................................49
Section 3.02
Subservicing
Agreements between the Servicer and
Subservicers..........................51
Section 3.03
Successor
Subservicers.................................................................52
Section 3.04
Liability of the
Servicer..............................................................52
Section 3.05
No Contractual Relationship between Subservicers and the
Trustee.......................52
Section 3.06
Assumption or Termination of Subservicing Agreements by
Trustee........................53
Section 3.07
Collection of Certain Mortgage Loan
Payments...........................................53
Section 3.08
Subservicing
Accounts..................................................................54
Section 3.09
Collection of Taxes, Assessments and Similar Items; Escrow
Accounts....................55
Section 3.10
Collection
Account.....................................................................56
Section 3.11
Withdrawals from the Collection
Account................................................57
Section 3.12
Investment of Funds in the Collection Account and the Distribution
Account.............59
Section 3.13
Maintenance of Hazard Insurance, Errors and Omissions and Fidelity
Coverage............60
Section 3.14
Enforcement of Due-on-Sale Clauses; Assumption
Agreements..............................61
Section 3.15
Realization upon Defaulted Mortgage
Loans..............................................62
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Section 3.16
Release of Mortgage
Files..............................................................66
Section 3.17
Title, Conservation and Disposition of REO
Property....................................67
Section 3.18
[RESERVED].............................................................................69
Section 3.19
Access to Certain Documentation and Information Regarding the
Mortgage Loans...........69
Section 3.20
Documents, Records and Funds in Possession of the Servicer to Be
Held for the Trustee..69
Section 3.21
Servicing
Compensation.................................................................70
Section 3.22
Annual Statement as to
Compliance......................................................70
Section 3.23
Annual Independent Public Accountants' Servicing Statement;
Financial Statements.......71
Section 3.24
Trustee to Act as
Servicer.............................................................71
Section 3.25
Compensating
Interest..................................................................72
Section 3.26
Credit Reporting; Gramm-Leach-Bliley
Act...............................................72
Section 3.27
Excess Reserve Fund Account; Distribution
Account......................................72
Section 3.28
Optional Purchase of Delinquent Mortgage
Loans.........................................74
Section 3.29
Maintenance of Mortgage Pool Insurance
Policy..........................................74
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01
Advances...............................................................................75
Section 4.02
Priorities of
Distribution.............................................................76
Section 4.03
Monthly Statements to
Certificateholders...............................................79
Section 4.04
Certain Matters Relating to the Determination of
LIBOR.................................83
Section 4.05
Allocation of Applied Realized Loss
Amounts............................................83
Section 4.06
Distributions on the REMIC I Regular
Interests.........................................84
ARTICLE V
THE CERTIFICATES
Section 5.01
The
Certificates.......................................................................85
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates...........................................................................86
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates......................................91
Section 5.04
Persons Deemed
Owners..................................................................92
Section 5.05
Access to List of Certificateholders' Names and
Addresses..............................92
Section 5.06
Maintenance of Office or
Agency........................................................92
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01
Respective Liabilities of the Depositor and the
Servicer...............................93
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Section 6.02
Merger or Consolidation of the Depositor or the
Servicer...............................93
Section 6.03
Limitation on Liability of the Depositor, the Servicer and
Others......................93
Section 6.04
Limitation on Resignation of the
Servicer..............................................94
Section 6.05
Additional Indemnification by the Servicer; Third Party
Claims.........................94
ARTICLE VII
DEFAULT
Section 7.01
Events of
Default......................................................................95
Section 7.02
Trustee to Act; Appointment of
Successor...............................................97
Section 7.03
Notification to
Certificateholders.....................................................99
ARTICLE VIII
CONCERNING THE TRUSTEE AND CO-TRUSTEE
Section 8.01
Duties of the
Trustee..................................................................99
Section 8.02
Certain Matters Affecting the
Trustee.................................................100
Section 8.03
Trustee Not Liable for Certificates or Mortgage
Loans.................................101
Section 8.04
Trustee May Own
Certificates..........................................................101
Section 8.05
Trustee's Fees and
Expenses...........................................................101
Section 8.06
Eligibility Requirements for the
Trustee..............................................102
Section 8.07
Resignation and Removal of the
Trustee................................................103
Section 8.08
Successor
Trustee.....................................................................103
Section 8.09
Merger or Consolidation of the
Trustee................................................104
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.........................................104
Section 8.11
Tax
Matters...........................................................................105
Section 8.12
Periodic
Filings......................................................................108
Section 8.13
Tax Classification of the Excess Reserve Fund
Account.................................110
Section 8.14
Duties of the
Co-Trustee..............................................................110
Section 8.15
Co-Trustee's Fees and
Expenses........................................................112
ARTICLE IX
TERMINATION
Section 9.01
Termination upon Liquidation or Purchase of the Mortgage
Loans........................113
Section 9.02
Final Distribution on the
Certificates................................................114
Section 9.03
Additional Termination
Requirements...................................................115
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment.............................................................................116
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Section 10.02
Recordation of Agreement;
Counterparts................................................118
Section 10.03
Governing
Law.........................................................................118
Section 10.04
Intention of
Parties..................................................................118
Section 10.05
Notices...............................................................................119
Section 10.06
Severability of
Provisions............................................................120
Section 10.07
Assignment; Sales; Advance
Facilities.................................................120
Section 10.08
Limitation on Rights of
Certificateholders............................................122
Section 10.09
Inspection and Audit
Rights...........................................................123
Section 10.10
Certificates Nonassessable and Fully
Paid.............................................123
Section 10.11
Third Party
Beneficiary...............................................................123
Section 10.12
Waiver of Jury
Trial..................................................................123
Section 10.13
Limitation of
Damages.................................................................124
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SCHEDULES
Schedule I
Mortgage Loan Schedule
Schedule II
Schedule Representations and Warranties of Wilshire Credit, as
Servicer
Schedule III
Representations and Warranties of the Responsible Party as to
the Individual Mortgage Loans
Schedule IV
Representations and Warranties of the Responsible Party
EXHIBITS
Exhibit A-1 Form
of Class A, Class M and Class B Certificates
Exhibit B
Form of Class P Certificate
Exhibit C
Form of Class R Certificate
Exhibit D-1 Form
of Class X Certificate
Exhibit D-2 Form
of Class X-1 Certificate
Exhibit E
Form of Initial Certification of Trustee
Exhibit F
Form of Document Certification and Exception Report of Trustee
Exhibit G
Form of Residual Transfer Affidavit
Exhibit H
Form of Transferor Certificate
Exhibit I-1 Form
of Rule 144A Letter
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Exhibit I-2 Form
of Investment Letter (Non Rule 144A)
Exhibit J
Form of Request for Release
Exhibit K
Contents of Each Mortgage File
Exhibit L
Charged Off Loan Data Report
Exhibit M
Form of Certification to be provided with Form 10-K
Exhibit N
Form of Trustee Certification to be provided to Depositor
Exhibit O
Form of Servicer Certification to be provided to Depositor
Exhibit P
Mortgage Pool Insurance Policy
Exhibit Q
Form of Power of Attorney
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THIS POOLING AND SERVICING AGREEMENT, dated as of March 1,
2005, is among GS MORTGAGE SECURITIES
CORP., a Delaware corporation (the
"Depositor"), WILSHIRE CREDIT CORPORATION,
a Nevada corporation ("Wilshire
Credit" or the "Servicer"), NC CAPITAL
CORPORATION, a California corporation
(the "Responsible Party"), DEUTSCHE BANK
NATIONAL TRUST COMPANY, a national
banking association, as trustee (the
"Trustee") and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking
association, as co-trustee (the "Co-Trustee").
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which
in the aggregate will evidence the
entire beneficial ownership interest of the
Trust Fund created hereunder. The
Trust Fund will consist of a segregated
pool of assets comprised of the Mortgage
Loans and certain other related assets
subject to this Agreement.
REMIC I
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the
Mortgage Loans and certain other
related assets subject to this Agreement
(other than the Prepayment Premiums and
the Excess Reserve Fund Account) as a REMIC
for federal income tax purposes, and
such segregated pool of assets will be
designated as "REMIC I". The Class R-1
Certificates will be the sole class of
"residual interests" in REMIC I for
purposes of the REMIC Provisions (as
defined herein). The following table
irrevocably sets forth the designation, the
REMIC I Remittance Rate, the initial
Uncertificated Balance and, for purposes of
satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest
possible maturity date" for each of the
REMIC I Regular Interests (as defined
herein). None of the REMIC I Regular
Interests will be certificated.
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REMIC I
REMITTANCE
INITIAL
LATEST POSSIBLE
DESIGNATION
RATE
UNCERTIFICATED BALANCE
MATURITY DATE (1)
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I-LTAA
Variable(2)
$251,188,854.31
December 25, 2034
I-LTA
Variable(2)
$1,873,660.00
December 25, 2034
I-LTM1
Variable(2)
$215,300.00
December 25, 2034
I-LTM2
Variable(2)
$199,930.00
December 25, 2034
I-LTB1
Variable(2)
$169,170.00
December 25, 2034
I-LTB2
Variable(2)
$47,420.00
December 25, 2034
I-LTB3
Variable(2)
$55,100.00
December 25, 2034
I-LTZZ
Variable(2)
$2,565,723.15
December 25, 2034
</TABLE>
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(1) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each REMIC
I
Regular Interest.
(2) Calculated
in accordance with the definition of "REMIC I Remittance
Rate" herein.
REMIC II
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the
REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such
segregated pool of assets will be
designated as "REMIC II." The Class R-2
Certificates will evidence the sole
class of "residual interests" in REMIC II
for purposes of the REMIC Provisions.
The following table irrevocably sets forth
the designation, the Pass-Through
Rate, the initial aggregate Certificate
Balance and, for purposes of satisfying
Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity
date" for the indicated Classes of
Certificates. The Trust Fund will also issue
the Class X-1 Certificates and the Class P
Certificates, which will not be
issued by any REMIC created hereunder.
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INITIAL AGGREGATE
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
CERTIFICATE BALANCE
MATURITY DATE (1)
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Class A
Variable(2)
$187,366,000.00
December 25, 2034
Class M-1
Variable(2)
$21,530,000.00
December 25, 2034
Class M-2
Variable(2)
$19,993,000.00
December 25, 2034
Class B-1
Variable(2)
$16,917,000.00
December 25, 2034
Class B-2
Variable(2)
$4,742,000.00
December 25, 2034
Class B-3
Variable(2)
$5,510,000.00
December 25, 2034
Class X
N/A(3)
$257,157.46(3)
December 25, 2034
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(1) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each Class
of
Certificates.
(2) Calculated
in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class
X Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class X
Certificates
outstanding from time to time which shall equal the
Uncertificated
Balance of
the REMIC I Regular Interests. The Class X Certificates will
not accrue interest on their Certificate Balance.
As of the Cut-off Date, the Mortgage Loans had an aggregate
Stated Principal Balance equal to
approximately $256,315,157.
The minimum denomination for each Class of Offered
Certificates will be $25,000 initial
Certificate Balance with integral multiples
of $1 in excess thereof. The minimum
denomination for (a) the Class R-1
Certificates and Class R-2 Certificates
will be a 100% Percentage Interest in
each such Class and (b) the Class P and
Class X Certificates will be a 1%
Percentage Interest in each such Class. The
Class X-1 Certificates will be
issued as a single Certificate and will not
have a Class Certificate Balance.
It is expected that each Class of Certificates will receive
its final distribution of principal and
interest on or prior to the Final
Scheduled Distribution Date.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry
Certificates.....................All Classes of Certificates
other
than the Physical Certificates.
Class A Certificates
.......................Class A Certificates.
Class R Certificates
.......................Class R-1 Certificates and Class R-2
Certificates.
Delay Certificates
.........................The Fixed Rate Certificates.
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ERISA-Restricted
...........................Certificates Class R-1, Class R-2,
Class P, Class X and
Class X-1
Certificates; any Certificate with a
rating below the lowest applicable
permitted rating under the
Underwriters' Exemption.
Fixed Rate Certificates
....................Class M-2, Class B-1, Class B-2 and
Class B-3 Certificates.
LIBOR Certificates
.........................The Class A Certificates and Class
M-1 Certificates.
Non-Delay Certificates
.....................LIBOR Certificates and Class X
Certificates
Offered Certificates
.......................All Classes of Certificates other
than the Private Certificates.
Physical Certificates
......................Class P, Class X, Class X-1, Class
R-1 and Class R-2 Certificates.
Private Certificates
.......................Class P, Class X, Class X-1, Class
R-1 and Class R-2 Certificates.
Rating Agencies
............................Fitch and Moody's.
Regular
....................................Certificates All Classes of
Certificates other than the Class P,
Class X-1, Class R-1 and Class R-2
Certificates.
Residual Certificates
......................Class R-1 Certificates and Class R-2
Certificates.
Subordinated Certificates
..................Class M-1, Class M-2, Class B-1,
Class B-2 and Class B-3
Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the
context otherwise requires, shall have
the following meanings:
Accepted Servicing Practices: (a) With respect to any Mortgage
Loan, those mortgage servicing practices
set forth in Section 3.01 of this
Agreement.
Account:
Any of the Collection Account, the Distribution
Account, any Escrow Account or the Excess
Reserve Fund Account. Each Account
shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect
to any Distribution Date for each Class of
Offered Certificates, the amount of
interest accrued during the related
Interest Accrual Period at the applicable
Pass-Through Rate on the related Class
Certificate Balance immediately prior to
such Distribution Date, as reduced by such
Class's
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share of Net Prepayment Interest Shortfalls
and Relief Act Interest Shortfalls
for the related Due Period allocated to
such Class pursuant to Section 4.02.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan
and at any time, the per annum rate equal
to the Mortgage Interest Rate less the
Expense Fee Rate.
Advance: Any P&I
Advance or Servicing Advance.
Advance Facility: A financing or other facility as described
in Section 10.07.
Advance Reimbursement Amounts: As defined in Section 10.07.
Advancing Person: The Person to whom the Servicer's rights
under this Agreement to be reimbursed for
any P&I Advances or Servicing Advances
have been assigned pursuant to Section
10.07.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common
control with such first Person. For
the purposes of this definition, "control"
means the power to direct the
management and policies of such Person,
directly or indirectly, whether through
the ownership of voting securities, by
contract or otherwise; and the terms
"controlling" and "controlled" have
meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any Distribution Date, the aggregate amount
held in each Collection Account at
the close of business on the related
Remittance Date on account of (i) Principal
Prepayments, Insurance Proceeds (including
any proceeds under the Mortgage Pool
Insurance Policy), Condemnation Proceeds,
Net Recoveries and Liquidation
Proceeds on the Mortgage Loans received
after the end of the related Prepayment
Period and (ii) all Scheduled Payments on
the Mortgage Loans due after the end
of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the
aggregate Class Certificate Balance of
the Offered Certificates after
distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal
Balance of the Mortgage Loans for
such Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the value,
determined pursuant to the Underwriting
Guidelines, of the related Mortgaged
Property as of the origination of such
Second Lien Mortgage Loan; PROVIDED,
HOWEVER, that in the case of a refinanced
Mortgage Loan, such value is based
solely upon the appraisal made at the time
of origination of such refinanced
Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in
recordable form (other than the
assignee's name and recording
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information not yet returned from the
recording office), reflecting the sale of
the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by
the Trustee (x) the sum of (i) all
scheduled installments of interest (net of
the related Expense Fees) and
principal due on the Due Date on such
Mortgage Loans in the related Due Period
and received on or prior to the related
Determination Date, together with any
P&I Advances in respect thereof; (ii)
all Condemnation Proceeds, Insurance
Proceeds (including any proceeds under the
Mortgage Pool Insurance Policy) and
Liquidation Proceeds received during the
related Prepayment Period (in each
case, net of unreimbursed expenses incurred
in connection with a liquidation or
foreclosure and unreimbursed Advances, if
any) and any Net Recoveries received
during the related Prepayment Period; (iii)
all partial or full prepayments on
the Mortgage Loans received during the
related Prepayment Period together with
all Compensating Interest paid by the
Servicer in connection therewith
(excluding Prepayment Premiums and
Prepayment Interest Excess); (iv) all amounts
received with respect to such Distribution
Date as the Substitution Adjustment
Amount or Repurchase Price in respect of a
Deleted Mortgage Loan or a Mortgage
Loan repurchased by the Responsible Party
as of such Distribution Date; and (v)
the proceeds received with respect to the
termination of the Trust Fund pursuant
to clause (a) of Section 9.01, reduced by
(y) all amounts in reimbursement for
P&I Advances and Servicing Advances
previously made with respect to the Mortgage
Loans, and other amounts as to which the
Servicer, the Depositor or the Trustee
(or co-trustee) are entitled to be paid or
reimbursed pursuant to this
Agreement.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
aggregate Principal Remittance Amount
for such Distribution Date over (ii) the
Excess Overcollateralized Amount, if
any, for such Distribution Date.
Basis Risk Carry Forward Amount: With respect to the LIBOR
Certificates, as of any Distribution Date,
the sum of (A) if on such
Distribution Date the Pass-Through Rate for
any Class of LIBOR Certificates is
based upon the WAC Cap, the excess of (i)
the amount of interest such Class of
Offered Certificates would otherwise be
entitled to receive on such Distribution
Date had the Pass-Through Rate not been
subject to the WAC Cap, over (ii) the
amount of interest payable on such Class of
Certificates at the WAC Cap, and (B)
the Basis Risk Carry Forward Amount for
such Class of Offered Certificates for
all previous Distribution Dates not
previously paid, together with interest
thereon at a rate equal to the applicable
Pass-Through Rate for such Class of
LIBOR Certificates for such Distribution
Date (without giving effect to the WAC
Cap).
Basis Risk Payment: For any Distribution Date, an amount equal
to the lesser of (i) the aggregate Basis
Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class X
Distributable Amount (prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be amended
from time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
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Business Day: Any day other than (i) Saturday or Sunday, or
(ii) a day on which banking and savings and
loan institutions, in (a) the States
of New York, Oregon and California, (b) the
State in which the Servicer's
servicing operations are located, or (c)
the State in which the Trustee's
operations are located, are authorized or
obligated by law or executive order to
be closed.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached
hereto as exhibits.
Certificate Balance: With respect to any Class of
Certificates, other than the Class P, Class
R-1 or Class R-2 Certificates, at
any date, the maximum dollar amount of
principal to which the Holder thereof is
then entitled hereunder, such amount being
equal to the Denomination thereof
minus all distributions of principal
previously made with respect thereto and in
the case of any Subordinated Certificates,
and reduced by the amount of any
Applied Realized Loss Amounts previously
allocated to such Class of Subordinated
Certificates; provided, however, that
immediately following the Distribution
Date on which a Subsequent Recovery is
distributed, the Class Certificate
Balances of any Class or Classes of
Certificates that have been previously
reduced by Applied Realized Loss Amounts
will be increased, in order of
seniority, by the amount of the Subsequent
Recovery distributed on such
Distribution Date (up to the amount of
Applied Realized Loss Amounts allocated
to such Class or Classes). The Class P,
Class R-1 and Class R-2 Certificates
have no Certificate Balance. With respect
to each Class X Certificate as of any
date of determination, an amount equal to
the Percentage Interest evidenced by
such Certificate times the excess, if any,
of (A) the then aggregate
Uncertificated Balances of the REMIC I
Regular Interests over (B) the then
aggregate Class Certificate Balance of the
Class A Certificates, Class M
Certificates and Class B Certificates then
outstanding. The aggregate initial
Class Certificate Balance of each Class of
Regular Certificates is set forth in
the Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of
such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the
Certificate Register, except that, solely for
the purpose of giving any consent pursuant
to this Agreement, any Certificate
registered in the name of the Depositor or
any affiliate of the Depositor shall
be deemed not to be Outstanding and the
Percentage Interest evidenced thereby
shall not be taken into account in
determining whether the requisite amount of
Percentage Interests necessary to effect
such consent has been obtained;
provided, however, that if any such Person
(including the Depositor) owns 100%
of the Percentage Interests evidenced by a
Class of Certificates, such
Certificates shall be deemed to be
Outstanding for purposes of any provision
hereof that requires the consent of the
Holders of Certificates of a particular
Class as a condition to the taking of any
action hereunder. The Trustee is
entitled to rely conclusively on a
certification of the Depositor or any
affiliate of the Depositor in determining
which Certificates are registered in
the name of an affiliate of the
Depositor.
7
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Certification: As
defined in Section 8.12(b).
Charged Off Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan for which coverage
under the related Mortgage Pool
Insurance Policy is not available that has
not yet been liquidated, giving rise
to a Realized Loss, on the date on which
the related Servicer determines,
pursuant to the procedures set forth in
Section 3.15, that there will be (i) no
Significant Net Recoveries with respect to
such Mortgage Loan or (ii) the
potential Net Recoveries are anticipated to
be an amount, determined by the
Servicer in its good faith judgment and in
light of other mitigating
circumstances, that is insufficient to
warrant proceeding through foreclosure or
other liquidation of the related Mortgaged
Property.
Class: All Certificates bearing the same class designation as
set forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary
Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
Class Certificate Balance of the Class
A Certificates immediately prior to such
Distribution Date over (ii) the lesser
of (A) 35.20% of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date and (B) the
excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date over the
Overcollateralization Floor.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the Class Certificate
Balance of the Class A Certificates (after
taking into account the distribution
of the Class A Principal Distribution
Amount on such Distribution Date), (B) the
Class Certificate Balance of the Class M-1
Certificates (after taking
8
<PAGE>
into account the distribution of the Class
M-1 Principal Distribution Amount on
such Distribution Date), (C) the Class
Certificate Balance of the Class M-2
Certificates (after taking into account the
distribution of the Class M-2
Principal Distribution Amount on such
Distribution Date) and (D) the Class
Certificate Balance of the Class B-1
Certificates immediately prior to such
Distribution Date, over (ii) the lesser of
(A) the product of (x) 80.80% and (y)
the aggregate Stated Principal Balance of
the Mortgage Loans for such
Distribution Date, and (B) the excess, if
any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date over the
Overcollateralization Floor.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the Class Certificate
Balances of the Class A Certificates (after
taking into account the distribution
of the Class A Principal Distribution
Amount on such Distribution Date), (B) the
Class Certificate Balance of the Class M-1
Certificates (after taking into
account the distribution of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class
Certificate Balance of the Class M-2
Certificates (after taking into account the
distribution of the Class M-2
Principal Distribution Amount on such
Distribution Date), (D) the Class
Certificate Balance of the Class B-1
Certificates (after taking into account the
distribution of the Class B-1 Principal
Distribution Amount on such Distribution
Date), and (E) the Class Certificate
Balance of the Class B-2 Certificates
immediately prior to such Distribution
Date, over (ii) the lesser of (A) the
product of (x) 84.50% and (y) the aggregate
Stated Principal Balance of the
Mortgage Loans for such Distribution Date,
and (B) the excess, if any, of the
aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution
Date over the Overcollateralization
Floor.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the Class Certificate
Balance of the Class A Certificates (after
taking into account the distribution
of the Class A Principal Distribution
Amount on such Distribution Date), (B) the
Class Certificate Balance of the Class M-1
Certificates (after taking into
account the distribution of the Class M-1
Principal Distribution Amount on such
Distribution Date), (C) the Class
Certificate Balance of the Class M-2
Certificates (after taking into account the
distribution of the Class M-2
Principal Distribution Amount on such
Distribution Date), (D) the Class
Certificate Balance of the Class B-1
Certificates (after taking into account the
distribution of the Class B-1 Principal
Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of
the Class B-2 Certificates (after
taking into account the distribution of the
Class B-2 Principal Distribution
Amount on such Distribution Date), and (F)
the Class Certificate Balance of the
Class B-3 Certificates immediately prior to
such Distribution Date, over (ii)
the lesser of (A) the product of (x) 88.80%
and (y) the aggregate Stated
Principal Balances of the Mortgage Loans
for such Distribution Date, and (B) the
excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date over the
Overcollateralization Floor.
Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of
the Certificate Balances of all
Certificates of such Class as of such
date.
Class M Certificates: The Class M-1 Certificates and Class M-2
Certificates.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the Class Certificate
Balance of the Class A Certificates (after
taking into account the distribution
of the Class A Principal Distribution
Amount on such Distribution Date), and (B)
the Class Certificate Balance of the Class
M-1 Certificates immediately prior to
such Distribution Date over (ii) the lesser
of (A) the product of (x) 52.00% and
(y) the aggregate Stated Principal Balance
of the Mortgage Loans for such
Distribution Date,
9
<PAGE>
and (B) the excess, if any, of the Stated
Principal Balance of the Mortgage
Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the Class Certificate
Balance of the Class A Certificates (after
taking into account the distribution
of the Class A Principal Distribution
Amount on such Distribution Date), (B) the
Class Certificate Balance of the Class M-1
Certificates (after taking into
account the distribution of the Class M-1
Principal Distribution Amount on such
Distribution Date) and (C) the Class
Certificate Balance of the Class M-2
Certificates immediately prior to such
Distribution Date over (ii) the lesser of
(A) the product of (x) 67.60% and (y) the
aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution
Date and (B) the excess, if any, of the
Stated Principal Balance of the Mortgage
Loans for such Distribution Date over
the Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class
designation of "Class P."
Class R Certificates: The Class R-1 Certificates and Class R-2
Certificates.
Class R-1 Certificates: All Certificates bearing the
designation of "Class R-1" and representing
the Residual Interest in REMIC I.
Class R-2 Certificates: All Certificates bearing the
designation of "Class R-2" and representing
the Residual Interest in REMIC II.
Class X Certificates: All Certificates bearing the class
designation of "Class X."
Class X Distributable Amount: On any Distribution Date, (i) as
a distribution in respect of interest, the
amount of interest that has accrued
on the Class X Interest and not applied as
an Extra Principal Distribution
Amount on such Distribution Date, plus any
such accrued interest remaining
undistributed from prior Distribution
Dates, plus, without duplication, (ii) as
a distribution in respect of principal, any
portion of the principal balance of
the Class X Interest which is distributable
as an Overcollateralization
Reduction Amount, minus (iii) any amounts
paid as a Basis Risk Payment.
Closing Date: April 7,
2005.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Collection Accounts: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio or CLTV: As of the date of
origination and as to any Mortgage Loan,
the ratio, expressed as a percentage,
of (a) the sum of (i) the outstanding
principal balance of the Mortgage Loan as
of the date of origination and (ii) the
outstanding
10
<PAGE>
principal balance as of the date of
origination of any mortgage loan or mortgage
loans that are senior or equal in priority
to the Mortgage Loan and which are
secured by the same Mortgaged Property to
(b) the Appraised Value.
Compensating Interest: For any Distribution Date, the lesser
of (a) the Prepayment Interest Shortfall,
if any, for such Distribution Date,
with respect to Principal Prepayments
occurring during the related Prepayment
Period and in the calendar month preceding
such Distribution Date, and (b)
one-half of the Servicing Fee payable to
the Servicer for such Distribution
Date.
Condemnation Proceeds: All awards or settlements in respect of
a Mortgaged Property, whether permanent or
temporary, partial or entire, by
exercise of the power of eminent domain or
condemnation, to the extent not
required to be released to a Mortgagor in
accordance with the terms of the
related Mortgage Loan Documents.
Corporate Trust Office: The designated office of the Trustee
in the State of California at which at any
particular time its corporate trust
business with respect to this Agreement is
administered, which office at the
date of the execution of this Agreement is
located at 1761 East St. Andrew Place
Santa Ana, California 92705-4934, Attn:
Trust Administration-GS05X1, facsimile
no. (714) 247-6478 and which is the address
to which notices to and
correspondence with the Trustee should be
directed.
Corresponding Certificate: With respect to each REMIC I
Regular Interest, as follows:
REMIC I Regular Interest
Class
--------------------------------------------------
---------------
REMIC I Regular Interest I-LTA
A
REMIC I Regular Interest I-LTM1
M-1
REMIC I Regular Interest I-LTM2
M-2
REMIC I Regular Interest I-LTB1
B-1
REMIC I Regular Interest I-LTB2
B-2
REMIC I Regular Interest I-LTB3
B-3
Co-Trustee: Wachovia Bank, National Association, and its
successor in interest, or any successor
Co-Trustee appointed as provided in this
Pooling and Servicing Agreement.
Cumulative Loss Event: With respect to any Distribution Date,
a Cumulative Loss Event occurs if the
Cumulative Loss Percentage exceeds the
applicable percentage set forth below with
respect to such Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN
LOSS PERCENTAGE
------------------------------
---------------
<S>
<C>
April 2008 through March 2009
8.000% of the Cut off Date Pool Principal Balance
April 2009 through March 2010
12.000% of the Cut off Date Pool Principal Balance
April 2010 through March 2011
15.000% of the Cut off Date Pool Principal Balance
April 2011 and thereafter
16.500% of the Cut off Date Pool Principal Balance
</TABLE>
11
<PAGE>
Cumulative Loss Percentage: As of any date of determination,
the percentage equivalent of a fraction,
the numerator of which is the aggregate
amount of Realized Losses on the Mortgage
Loans for the period from the Cut-off
Date to the date of determination and the
denominator of which is the Stated
Principal Balance of the Mortgage Loans as
of the Cut-off Date.
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items
(a) - (h) as listed on Exhibit K
hereto.
Custodial File: With respect to each Mortgage Loan, any
Mortgage Loan Document which is delivered
to the Trustee or which at any time
comes into the possession of the
Trustee.
Cut-off Date: March 1,
2005.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balance of all Mortgage Loans as
of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the
close of business on the Cut-off Date
(after giving effect to payments of
principal due on that date, whether or not
received).
Data Tape Information: The information provided by the
Responsible Party as of the Cut-off Date to
the Depositor setting forth the
following information with respect to each
Mortgage Loan: (1) the Responsible
Party's Mortgage Loan identifying number;
(2) the Mortgagor's name; (3) the
street address of the Mortgaged Property
including the city, state and zip code;
(4) a code indicating whether the Mortgaged
Property is owner-occupied, a second
home or investment property; (5) the number
and type of residential units
constituting the Mortgaged Property (i.e.,
a single family residence, a 2-4
family residence, a unit in a condominium
project or a unit in a planned unit
development, manufactured housing); (6) the
original months to maturity or the
remaining months to maturity from the
Cut-off Date, in any case based on the
original amortization schedule and, if
different, the maturity expressed in the
same manner but based on the actual
amortization schedule; (7) the Combined
Loan-to-Value Ratio at origination; (8) the
Mortgage Interest Rate as of the
Cut-off Date; (9) the date on which the
Scheduled Payment was due on the
Mortgage Loan and, if such date is not
consistent with the Due Date currently in
effect, such Due Date; (10) the stated
maturity date; (11) the amount of the
Scheduled Payment as of the Cut-off Date;
(12) the last payment date on which a
Scheduled Payment was actually applied to
pay interest and the outstanding
principal balance; (13) the original
principal amount of the Mortgage Loan; (14)
the principal balance of the Mortgage Loan
as of the close of business on the
Cut-off Date, after deduction of payments
of principal due and collected on or
before the Cut-off Date; (15) the type of
Mortgage Loan (i.e., fixed rate,
second lien); (16) a code indicating the
purpose of the loan (i.e., purchase,
rate and term refinance, equity take-out
refinance); (17) a code indicating the
documentation style (i.e., full
documentation, limited documentation or stated
income); (18) the loan credit
classification (as described in the Underwriting
Guidelines); (19) whether such Mortgage
Loan provides for a Prepayment Premium;
(20) the Prepayment Premium period of such
Mortgage Loan, if
12
<PAGE>
applicable; (21) a description of the
Prepayment Premium, if applicable; (22)
the Mortgage Interest Rate as of
origination; (23) the credit risk score (FICO
score) at origination; (24) the date of
origination; (25) a code indicating
whether the Mortgage Loan has been
modified; (26) the current Combined
Loan-to-Value Ratio; (27) the Due Date for
the first Scheduled Payment; (28) the
original Scheduled Payment due; (29) with
respect to the related Mortgagor, the
debt-to-income ratio; (30) the Appraised
Value of the Mortgaged Property; (31)
the sales price of the Mortgaged Property
if the Mortgage Loan was originated in
connection with the purchase of the
Mortgaged Property; (32) a code indicating
whether a Mortgage Loan is or has been 30
days delinquent and (33) the
outstanding principal balance of the
related First Lien Mortgage Loan. With
respect to the Mortgage Loans in the
aggregate: (1) the number of Mortgage
Loans; (2) the current aggregate
outstanding 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.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent
jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled
Payment for such Mortgage Loan which
became final and non appealable, except for
such a reduction resulting from a
Deficient Valuation or any reduction that
results in a permanent forgiveness of
principal.
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
principal balance of the Mortgage
Loan, which valuation results from a
proceeding initiated under the United
States Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical Certificate and any Certificate
issued in lieu of a Book-Entry
Certificate pursuant to Section
5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03(d).
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial
Certificate Balance of this
Certificate" or the Percentage Interest
appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware
corporation, and its successors in
interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE
& Co., as 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 Institution: Any depository institution or trust
company, including the Trustee, that (a) is
incorporated under the laws of the
United States of America or any State
thereof, (b) is subject to supervision and
examination by federal or state banking
authorities and
13
<PAGE>
(c) has outstanding unsecured commercial
paper or other short-term unsecured
debt obligations that are rated P-1 by
Moody's, F1+ by Fitch and A-1 by Standard
& Poor's, to the extent they are Rating
Agencies hereunder.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for
whom from time to time a Depository
effects book-entry transfers and pledges of
securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date, the
18th day of the calendar month in which
such Distribution Date occurs or, if
such day is not a Business Day, the
immediately preceding Business Day.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to
Section 3.27(b) in the name of the
Trustee for the benefit of the
Certificateholders and designated "Deutsche Bank
National Trust Company in trust for
registered holders of GSAMP Trust 2005-S1
Mortgage Pass-Through Certificates, Series
2005-S1." Funds in the Distribution
Account shall be held in trust for the
Certificateholders for the uses and
purposes set forth in this Agreement and
may be invested in Permitted
Investments.
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates
or, if such day is not a Business Day,
the next succeeding Business Day,
commencing in April 2005.
Document Certification and Exception Report: The report
attached to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment
is due on a Mortgage Loan, exclusive of any
days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the
calendar month preceding the month in which
the Distribution Date occurs and ending on
the first day of the calendar month
in which the Distribution Date occurs.
Eligible Account: Either (i) an account 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 a
subsidiary of a holding company, the
short-term unsecured debt obligations of
such holding company) are rated "F-1"
by Fitch and "P-1" by Moody's (and a
comparable rating if another Rating Agency
is specified by the Depositor by written
notice to the Servicer) at the time any
amounts are held on deposit therein, (ii) a
trust account or accounts maintained
with a federal or state chartered
depository institution or trust company acting
in its fiduciary capacity or (iii) any
other account acceptable to each Rating
Agency. Eligible Accounts may bear
interest, and may include, if otherwise
qualified under this definition, accounts
maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
14
<PAGE>
ERISA-Qualifying Underwriting: A best efforts or firm
commitment underwriting or private
placement that meets the requirements of
Prohibited Transaction Exemption ("PTE")
2002-41, 67 Fed. Reg. 54487 (2002) (or
any successor thereto), or any
substantially similar administrative exemption
granted by the U.S. Department of
Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and maintained pursuant to Section
3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this
Agreement.
Event of Default: As
defined in Section 7.01.
Excess Overcollateralized Amount: With respect to any
Distribution Date, the excess, if any, of
(a) the Overcollateralized Amount on
such Distribution Date over (b) the
Specified Overcollateralized Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account
created and maintained by the Trustee
pursuant to Sections 3.27(a) in the name
of the Trustee for the benefit of the
Regular Certificateholders and designated
"Deutsche Bank National Trust Company in
trust for registered holders of GSAMP
Trust 2005-S1, Mortgage Pass-Through
Certificates, Series 2005-S1." Funds in the
Excess Reserve Fund Account shall be held
in trust for the Regular
Certificateholders for the uses and
purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve
Fund Account shall not be invested.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal to the sum of the Servicing Fee Rate
and the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing Fee and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution
Date, the lesser of (x) the related Total
Monthly Excess Spread for such
Distribution Date and (y) the related
Overcollateralization Deficiency for such
Distribution Date; provided, however, that
on the Distribution Date in April
2005, the amount determined pursuant to
this clause (y) shall be limited to the
principal portion of Realized Losses for
that Distribution Date.
Fair Value: The fair market value of all of the property of
the Trust, as agreed upon between the
Servicer and a majority of the Class R-1
Certificateholders; provided, however, that
if the Servicer and a majority of
the Class R-1 Certificateholders do not
agree upon the fair market value of all
the property of the Trust, then the
Depositor shall solicit competitive bids to
prospective purchasers that are recognized
broker dealers. The Fair Market Value
shall be the highest bid received by the
Trustee from the closed bids solicited
by the Depositor or its
15
<PAGE>
designee, provided that the Depositor shall
certify to the Trustee that it
received bids from no fewer than three
prospective purchasers.
Fannie Mae: The Federal National Mortgage Association and its
successors in interest.
Fannie Mae Guides: The Fannie Mae Seller's Guide and the
Fannie Mae Servicer's Guide and all
amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, and its
successors in interest.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan (other than a Charged Off
Loan) or any REO Property (other than a
Mortgage Loan or REO Property purchased by
the Responsible Party as contemplated
by this Agreement), a determination made by
the Servicer that all Insurance
Proceeds (including any proceeds under the
Mortgage Pool Insurance Policy),
Condemnation Proceeds, Liquidation Proceeds
and other payments or recoveries
which the Servicer, in its reasonable good
faith judgment, expects to be finally
recoverable in respect thereof have been so
recovered. The Servicer shall
maintain records, prepared by a Servicing
Officer, of each Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of
Certificates is the Distribution Date
occurring in December 2034:
First Lien Mortgage Loan: With respect to each Mortgage Loan,
any mortgage loan secured by a first lien
Mortgage on the related Mortgaged
Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch
is designated as a Rating Agency in the
Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to
Fitch shall be Fitch, Inc., One
State Street Plaza, New York, New York
10004, Attention: MBS Monitoring - GSAMP
Trust 2005-S1, or such other address as
Fitch may hereafter furnish to the
Depositor, the Servicer and the
Trustee.
Forbearance: As
defined in Section 3.07(a).
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United
States created and existing under Title
III of the Emergency Home Finance Act of
1970, as amended, and its successors in
interest.
Freddie Mac Guides: The Freddie Mac Seller's & Servicer's
Guide and all amendments or additions
thereto.
High Cost Mortgage Loan: A Mortgage Loan that is (a) covered
by the Home Ownership and Equity Protection
Act of 1994, (b) identified,
classified or characterized as "high cost,"
"threshold," "covered", or
"predatory" under any other applicable
state, federal or local law (or a
similarly identified, classified or
characterized loan using different
terminology under a law imposing heightened
regulatory scrutiny or additional
legal liability for residential
mortgage
16
<PAGE>
loans having high interest rates, points
and/or fees) or (c) categorized as
"High Cost" or "Covered" pursuant to
Appendix E of the Standard & Poor's
Glossary.
Home Loan: A Mortgage Loan categorized as "Home Loan" pursuant
to Appendix E of Standard & Poor's
Glossary.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the
Mortgage Loan or the related
Mortgaged Property and any proceeds from
the Mortgage Pool Insurance Policy.
Interest Accrual Period: With respect to each Class of
Non-Delay Certificates and any Distribution
Date, the period commencing on the
preceding Distribution Date (or, for the
initial Distribution Date, the Closing
Date) and ending on the day preceding the
current Distribution Date, and with
respect to the Delay Certificates and the
REMIC I Regular Interests and any
Distribution Date, the calendar month
preceding the month in which such
Distribution Date occurs. For purposes of
computing interest accruals on each
Class of Non-Delay Certificates, each
Interest Accrual Period has the actual
number of days in such period and each year
is assumed to have 360 days. For
purposes of computing interest accruals on
each Class of Delay Certificates,
each Interest Accrual Period has 30 days in
such period and each year is assumed
to have 360 days.
Interest Remittance Amount: With respect to any Distribution,
that portion of Available Funds
attributable to interest relating to the
Mortgage Loans.
Investment Account: As
defined in Section 3.12(a).
Late Collections: With respect to any Mortgage Loan and any
Due Period, all amounts received after the
Remittance Date immediately following
such Due Period, whether as late payments
of Scheduled Payments or as Insurance
Proceeds (including any proceeds under the
Mortgage Pool Insurance Policy),
Condemnation Proceeds, Liquidation
Proceeds, Net Recoveries or otherwise, which
represent late payments or collections of
principal and/or interest due (without
regard to any acceleration of payments
under the related Mortgage and Mortgage
Note) but delinquent for such Due Period
and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR Certificates, the rate determined by
the Trustee on the related LIBOR
Determination Date on the basis of the
offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate
Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such
rate does not appear on Telerate Page
3750, the rate for such date will be
determined on the basis of the rates at
which one-month U.S. dollar deposits are
offered by the Reference Banks at
approximately 11:00 a.m. (London time) on
such date to prime banks in the London
interbank market. In such event, the
Trustee shall request the principal London
office of each of the Reference Banks to
provide a quotation of its rate. If at
least two such quotations are provided, the
rate for that date will be the
arithmetic mean of the quotations (rounded
upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two
quotations are provided as
requested, the rate for that date will be
the arithmetic mean of the rates
quoted by major banks in New York City,
selected by the Trustee
17
<PAGE>
(after consultation with the Depositor), at
approximately 11:00 a.m. (New York
City time) on such date for one-month U.S.
dollar deposits of leading European
banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the
second London Business Day preceding the
commencement of such Interest Accrual
Period.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including
any REO Property) which was
liquidated in the calendar month preceding
the month of such Distribution Date
and as to which the Servicer has certified
(in accordance with this Agreement)
that it has made a Final Recovery
Determination.
Liquidation Event: With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage
Loan is paid in full; (ii) a Final
Recovery Determination is made as to such
Mortgage Loan; or (iii) such Mortgage
Loan is removed from coverage under this
Agreement by reason of its being
purchased, sold, transferred or replaced
pursuant to or as contemplated by this
Agreement. With respect to any REO
Property, either of the following events: (i)
a Final Recovery Determination is made as
to such REO Property; or (ii) such REO
Property is removed from coverage under
this Agreement by reason of its being
purchased pursuant to this Agreement.
Liquidation Proceeds: The amounts, including Insurance
Proceeds (including any proceeds under the
Mortgage Pool Insurance Policy),
Condemnation Proceeds or those received
following the acquisition of REO
Property, received in connection with the
liquidation of a defaulted Mortgage
Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including
any Subsequent Recoveries.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the
London interbank market.
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the
Class X Certificates.
Marker Rate: With respect to the Class X Certificates and any
Distribution Date, a per annum rate equal
to two (2) times the weighted average
of the REMIC I Remittance Rate for each of
REMIC I Regular Interest I-LTA, REMIC
I Regular I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2,
REMIC I Regular Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ, with the
rate on each such REMIC I Regular
Interest (other than REMIC I Regular
Interest I-LTZZ) subject to a cap equal to
the related Pass-Through Rate for the
Corresponding Certificate for the purpose
of this calculation for such Distribution
Date and with the rate on REMIC I
Regular Interest I-LTZZ subject to a cap of
zero for the purpose of this
calculation; provided however, each such
cap for REMIC I Regular Interest I-LTA
and REMIC I Regular Interest I-LTM1 shall
be multiplied by a
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fraction the numerator of which is the
actual number of days in the related
Interest Accrual Period and the denominator
of which is 30.
Maximum I-LTZZ Uncertificated Interest Deferral Amount: With
respect to any Distribution Date, the
excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC
I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the
Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I
Overcollateralization Amount, in each
case for such Distribution Date, over (ii)
Uncertificated Interest on REMIC I
Regular Interest I-LTA, REMIC I Regular
Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest
I-LTB2 and REMIC I Regular Interest I-LTB3
with the rate on each such REMIC I
Regular Interest subject to a cap equal to
the related Pass-Through Rate for the
corresponding Certificate for the purpose
of this calculation for such
Distribution Date; provided however, each
such cap for REMIC I Regular Interest
I-LTA and REMIC I Regular Interest I-LTM1
shall be multiplied by a fraction the
numerator of which is the actual number of
days in the related Interest Accrual
Period and the denominator of which is
30.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section
4.03.
Moody's: Moody's Investors Service, Inc. If Moody's is
designated as a Rating Agency in the
Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to
Moody's shall be Moody's Investors
Service, Inc., 99 Church Street, New York,
New York 10007, Attention:
Residential Mortgage Pass-Through Group, or
such other address as Moody's may
hereafter furnish to the Depositor, the
Servicer and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as
securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File
or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage
Loan.
Mortgage Loan: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage
Loan originally sold and subject to
this Agreement being identified on the
Mortgage Loan Schedule, which Mortgage
Loan includes, without limitation, the
Mortgage File, the Custodial File, the
Servicing File, the Scheduled Payments,
Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance
Proceeds (including any proceeds
under the Mortgage Pool Insurance Policy),
Net Recoveries, REO Disposition
proceeds, Prepayment Premiums and all other
rights, benefits, proceeds and
obligations arising from or in connection
with such Mortgage Loan, excluding
replaced or repurchased Mortgage Loans.
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<PAGE>
Mortgage Loan Documents: The mortgage loan documents
pertaining to each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Schedule I, such schedule setting
forth the following information with
respect to each Mortgage Loan as of the
Cut-off Date: (1) the Responsible
Party's Mortgage Loan identifying number;
(2) the Mortgagor's name; (3) the
street address of the Mortgaged Property
including the city, state and zip code;
(4) a code indicating whether the Mortgaged
Property is owner-occupied, a second
home or investment property; (5) the number
and type of residential units
constituting the Mortgaged Property (i.e.,
a single family residence, a 2-4
family residence, a unit in a condominium
project or a unit in a planned unit
development, manufactured housing); (6) the
original months to maturity or the
remaining months to maturity from the
Cut-off Date, in any case based on the
original amortization schedule and, if
different, the maturity expressed in the
same manner but based on the actual
amortization schedule; (7) the Combined
Loan-to-Value Ratio, at origination; (8)
the Mortgage Interest Rate as of the
Cut-off Date; (9) the date on which the
Scheduled Payment was due on the
Mortgage Loan and, if such date is not
consistent with the Due Date currently in
effect, such Due Date; (10) the stated
maturity date; (11) the amount of the
Scheduled Payment as of the Cut-off Date;
(12) the last payment date on which a
Scheduled Payment was actually applied to
pay interest and the outstanding
principal balance; (13) the original
principal amount of the Mortgage Loan; (14)
the principal balance of the Mortgage Loan
as of the close of business on the
Cut-off Date, after deduction of payments
of principal due and collected on or
before the Cut-off Date; (15) the type of
Mortgage Loan (i.e., fixed rate,
second lien); (16) a code indicating the
purpose of the loan (i.e., purchase,
rate and term refinance, equity take-out
refinance); (17) a code indicating the
documentation style (i.e., full, limited or
stated income); (18) the loan credit
classification (as described in the
Underwriting Guidelines); (19) whether such
Mortgage Loan provides for a Prepayment
Premium; (20) the Prepayment Premium
period of such Mortgage Loan, if
applicable; (21) a description of the
Prepayment Premium, if applicable; (22) the
Mortgage Interest Rate as of
origination; (23) the credit risk score
(FICO score) at origination; (24) the
date of origination; (25) a code indicating
whether the Mortgage Loan has been
modified; (26) the Due Date for the first
Scheduled Payment; (27) the original
Scheduled Payment due; (28) with respect to
the related Mortgagor, the
debt-to-income ratio; (29) the Appraised
Value of the Mortgaged Property; (30)
the sales price of the Mortgaged Property
if the Mortgage Loan was originated in
connection with the purchase of the
Mortgaged Property; (31) a code indicating
whether such Mortgage Loan is a Home Loan;
(32) a code indicating whether a
Mortgage Loan is or has been 30 days
delinquent and (33) the outstanding
principal balance of the related First Lien
Mortgage Loan. With respect to the
Mortgage Loans in the aggregate: (1) the
number of Mortgage Loans; (2) the
current aggregate outstanding 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.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan,
including all riders thereto.
Mortgage Pool Insurance Policy: The mortgage pool insurance
policy number R0140017 provided by the
Mortgage Pool Insurer having an initial
amount of coverage equal to
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<PAGE>
$8,971,030.51, and including any and all
related endorsements, a copy of which
is attached hereto as Exhibit P.
Mortgage Pool Insurance Trigger: With respect to any date of
determination, the satisfaction of the
Deductible (as defined in the Mortgage
Pool Insurance Policy), subject to the
Maximum Aggregate Liability (as defined
in the Mortgage Pool Insurance Policy).
Mortgage Pool Insurer: Radian Insurance Inc., or any successor
thereto.
Mortgage Pool Insurer Fee: The one-time up-front amount
payable to the Mortgage Pool Insurer on or
prior to the Closing Date by the
Co-Trustee in order to obtain coverage
provided under the Mortgage Pool
Insurance Policy.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan
Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
amount remaining for distribution pursuant
to subsection 4.02(a)(iii) (before
giving effect to distributions pursuant to
such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the amount by which the sum of the
Prepayment Interest Shortfalls exceeds the
sum of the Compensating Interest payments
made with respect to such Distribution
Date.
Net Recovery: Any proceeds received by the Servicer on a
delinquent or Charged Off Loan (including
any Liquidation Proceeds received on a
Charged Off Loan), net of any Servicing
Fee, ancillary income and any other
related expenses.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise
backed by some or all of the Class X and
Class P Certificates that are rated by
one or more Rating Agencies.
NIM Trustee: The
trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: Each Mortgage Loan with
respect to which any portion of a Scheduled
Payment is, as of the last day of
the prior Due Period, three months or more
past due (without giving effect to
any grace period), each Mortgage Loan in
foreclosure, all REO Property and each
Mortgage Loan for which the Mortgagor has
filed for bankruptcy.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously made
or
proposed to be made in respect of a
Mortgage Loan or REO Property that, in the
good faith business
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<PAGE>
judgment of the Servicer, will not or, in
the case of a proposed P&I Advance,
would not be ultimately recoverable from
related late payments, Insurance
Proceeds (including any proceeds under the
Mortgage Pool Insurance Policy),
Condemnation Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO
Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously made or proposed to be made in
respect of a Mortgage Loan or REO
Property, which, in the good faith business
judgment of the Servicer, will not
or, in the case of a proposed Servicing
Advance, would not, be ultimately
recoverable from related Insurance Proceeds
(including any proceeds under the
Mortgage Pool Insurance Policy),
Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided
pursuant to Section 9.02 to the effect that
final distribution on any of the
Certificates shall be made only upon
presentation and surrender thereof.
Notional Amount: With respect to the Class X Certificates and
any Distribution Date, the Uncertificated
Balance of the REMIC I Regular
Interests for such Distribution Date. As of
the Closing Date, the Notional
Amount of the Class X Certificates is equal
to $256,315,157.46.
Notional Balance: With respect to the Class X Certificates for
purposes solely of the face thereof, the
aggregate Stated Principal Balance of
the Mortgage Loans.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of
the Servicer with responsibility for the
servicing of the Mortgage Loans
required to be serviced by the Servicer and
listed on a list delivered to the
Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or a
Subservicer, reasonably acceptable to the
Trustee; provided, that any Opinion of
Counsel relating to (a) qualification of
either Trust REMIC as a REMIC or (b)
compliance with the REMIC Provisions, must
(unless otherwise stated in such Opinion of
Counsel) be an opinion of counsel
who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does
not have any material direct or indirect
financial interest in the Servicer of
the Mortgage Loans or in an affiliate of
either and (iii) is not connected with
the Servicer of the Mortgage Loans as an
officer, employee, director or person
performing similar functions.
Optional Termination Date: The date on which the Terminating
Entity, pursuant to Section 9.01, shall
cause the Optional Termination Date to
occur on any Distribution Date on which the
aggregate Stated Principal Balance
of the Mortgage Loans, as of the last day
of the related Due Period, is equal to
10% or less of the Cut off Date Pool
Principal Balance.
OTS:
Office of Thrift Supervision, and any successor thereto.
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<PAGE>
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates
theretofore executed and authenticated under
this Agreement except:
(i)
Certificates theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
and
(ii)
Certificates in exchange for which or in lieu of
which other Certificates have been executed
and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater
than zero which was not the subject of a
Principal Prepayment in Full prior to such
Due Date and which did not become a
Liquidated Mortgage Loan or Charged Off
Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated
Principal Balance of the Mortgage
Loans for such Distribution Date over (b)
the aggregate of the Class Certificate
Balances of the Offered Certificates as of
such Distribution Date (after giving
effect to the payment of the Principal
Remittance Amount on such Certificates on
such Distribution Date).
Overcollateralization Deficiency: With respect to any
Distribution Date, the excess, if any, of
(a) the Specified Overcollateralized
Amount applicable to such Distribution Date
over (b) the Overcollateralized
Amount applicable to such Distribution
Date.
Overcollateralization Floor: With respect to any Distribution
Date, 0.50% of the aggregate Stated
Principal Balance of the Mortgage Loans as
of the Cut-off Date. Notwithstanding the
foregoing, on and after any
Distribution Date following the reduction
of the aggregate Class Certificate
Balance of the Class A Certificates, Class
M Certificates and Class B
Certificates to zero, the
Overcollateralization Floor shall be zero.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the
lesser of (a) the Excess
Overcollateralized Amount and (b) the Net
Monthly Excess Cashflow.
Ownership Interest: As to any Residual 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.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of
any Remittance Date representing the
aggregate of all payments of principal and
interest, net of the Servicing Fee,
that were due during the related Due Period
on the Mortgage Loans and that were
delinquent on the related Remittance Date,
plus certain amounts representing
assumed payments not covered by any current
net income on the Mortgaged
Properties acquired by foreclosure or deed
in lieu of foreclosure as determined
pursuant to Section 4.01.
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<PAGE>
Par Value: The sum of (i) 100% of the unpaid principal balance
of each Mortgage Loan (other than in
respect of REO Property) plus accrued and
unpaid interest thereon at the applicable
Mortgage Interest Rate, and (ii) the
lesser of (x) the appraised value of any
REO Property as determined by the
higher of two appraisals completed by two
independent appraisers selected by the
Majority Class X Certificateholder, at the
expense of the Majority Class X
Certificateholder, plus accrued and unpaid
interest on the related Mortgage Loan
at the applicable Mortgage Interest Rates
and (y) the unpaid principal balance
of each Mortgage Loan related to any REO
Property, in each case plus accrued and
unpaid interest thereon at the applicable
Mortgage Interest Rate.
Pass-Through Margin: With respect to each Class of LIBOR
Certificates, the following percentages:
Class A, 0.170%; and Class M-1, 0.470%.
On the first Distribution Date after the
Optional Termination Date, the
Pass-Through Margins shall increase to:
Class A, 0.340%; and Class M-1, 0.705%.
Pass-Through Rate: With respect to the Class A Certificates
and the Class M-1 Certificates, a rate per
annum equal to the lesser of (i)
LIBOR plus the related Pass-Through Margin
and (ii) the WAC Cap.
With respect to the Class M-2 Certificates, Class B-1
Certificates, Class B-2 Certificates and
Class B-3 Certificates, a rate per
annum equal to (a) on or prior to the first
possible Optional Termination Date,
5.887%, 6.208%, 6.548% and 6.750%,
respectively or (b) after the first possible
Optional Termination Date, 6.387%, 6.708%,
7.048% and 7.250%, respectively.
With
respect to the Class X Certificates and any Distribution
Date, a rate per annum equal to the
percentage equivalent of a fraction, the
numerator of which is the sum of the
amounts calculated pursuant to clauses (a)
through (h) below, and the denominator of
which is the aggregate Uncertificated
Balances of REMIC I Regular Interest
I-LTAA, REMIC I Regular Interest I-LTA,
REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I
Regular Interest I-LTB1, REMIC I Regular
Interest I-LTB2, REMIC I Regular
Interest I-LTB3 and REMIC I Regular
Interest I-LTZZ. For purposes of calculating
the Pass-Through Rate for the Class X
Certificates, the numerator is equal to
the sum of the following components:
(a) the REMIC
I Remittance Rate for REMIC I Regular
Interest I-LTAA minus the Marker Rate, applied to an amount equal
to
the Uncertificated Balance of REMIC I Regular Interest I-LTAA;
(b) the REMIC
I Remittance Rate for REMIC I Regular
Interest I-LTA minus the Marker Rate, applied to an amount equal to
the
Uncertificated Balance of REMIC I Regular Interest I-LTA;
(c) the REMIC
I Remittance Rate for REMIC I Regular
Interest I-LTM1 minus the Marker Rate, applied to an amount equal
to
the Uncertificated Balance of REMIC I Regular Interest I-LTM1;
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<PAGE>
(d) the REMIC
I Remittance Rate for REMIC I Regular
Interest
I-LTM2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Balance of REMIC I Regular Interest I-LTM2;
(e) the REMIC
I Remittance Rate for REMIC I Regular
Interest I-LTB1 minus the Marker Rate, applied to an amount equal
to
the Uncertificated Balance of REMIC I Regular Interest I-LTB1;
(f) the REMIC
I Remittance Rate for REMIC I Regular
Interest I-LTM3 minus the Marker Rate, applied to an amount equal
to
the Uncertificated Balance of REMIC I Regular Interest I-LTM3;
(g) the REMIC
I Remittance Rate for REMIC I Regular
Interest I-LTB2 minus the Marker Rate, applied to an amount equal
to
the Uncertificated Balance of REMIC I Regular Interest I-LTB2;
and
(h) the REMIC
I Remittance Rate for REMIC I Regular
Interest I-LTZZ minus the Marker Rate, applied to an amount equal
to
the Uncertificated Balance of REMIC I Regular Interest I-LTZZ.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions
required to be made on the related
Class, such percentage interest being set
forth on the face thereof or equal to
the percentage obtained by dividing the
Denomination of such Certificate by the
aggregate of the Denominations of all
Certificates of the same Class.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a
purchase price of not greater than par,
regardless of whether issued by the
Servicer, the Trustee or any of their
respective Affiliates:
(i) direct
obligations of, or obligations fully
guaranteed as to timely payment of
principal and interest by, the United States
or any agency or instrumentality thereof,
provided such obligations are backed
by the full faith and credit of the United
States;
(ii)
demand and time deposits in, certificates of deposit
of, or bankers' acceptances (which shall
each have an original maturity of not
more than 90 days and, in the case of
bankers' acceptances, shall in no event
have an original maturity of more than 365
days or a remaining maturity of more
than 30 days) denominated in United States
dollars and issued by any Depository
Institution and rated P-1 by Moody's, F-1
by Fitch and A-1+ by S&P (in each
case, to the extent they are designated as
Rating Agencies in the Preliminary
Statement);
(iii)
repurchase obligations with respect to any security
described in clause (i) above entered into
with a Depository Institution (acting
as principal);
(iv)
securities bearing interest or sold at a discount
that are issued by any corporation
incorporated under the laws of the United
States of America or any state thereof and
that are rated by each Rating Agency
that rates such securities in its highest
long-term unsecured
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<PAGE>
rating categories at the time of such
investment or contractual commitment
providing for such investment;
(v) commercial
paper (including both non-interest-bearing
discount obligations and interest-bearing
obligations payable on demand or on a
specified date not more than 30 days after
the date of acquisition thereof) that
is rated by each Rating Agency that rates
such securities in its highest
short-term unsecured debt rating available
at the time of such investment;
(vi)
units of money market funds, including money market
funds advised by the Depositor or the
Trustee or an Affiliate thereof, that have
been rated "Aaa" by Moody's, "AAAm" or
"AAAm-G" by Standard & Poor's and at
least "AA" by Fitch (in each case, to the
extent they are designated as Rating
Agencies in the Preliminary Statement);
and
(vii) if
previously confirmed in writing to the Trustee,
any other demand, money market or time
deposit, or any other obligation,
security or investment, as may be
acceptable to the Rating Agencies as a
permitted investment of funds backing "Aaa"
or "AAA" rated securities;
provided, however, that no instrument
described hereunder shall evidence either
the right to receive (a) only interest with
respect to the obligations
underlying such instrument or (b) both
principal and interest payments derived
from obligations underlying such instrument
and the interest and principal
payments with respect to such instrument
provide a yield to maturity at par
greater than 120% of the yield to maturity
at par of the underlying obligations.
For investments in the Distribution Account
(except during the Trustee Float
Period), only the obligations or securities
(or instruments which invest in the
obligations or securities) specified in
clause (i) above shall constitute
Permitted Investments.
Permitted Transferee: Any Person other than (i) the United
States, any State or political subdivision
thereof, or any agency or
instrumentality of any of the foregoing,
(ii) a foreign government,
international organization or any agency or
instrumentality of either of the
foregoing, (iii) an organization (except
certain farmers' cooperatives described
in Section 521 of the Code) which is exempt
from tax imposed by Chapter 1 of the
Code (including the tax imposed by Section
511 of the Code on unrelated business
taxable income) on any excess inclusions
(as defined in Section 860E(c)(1) of
the Code) with respect to any Residual
Certificate, (iv) rural electric and
telephone cooperatives described in Section
1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person or a U.S.
Person with respect to whom income
from a Residual 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, (vi) an
"electing large partnership" within the
meaning of Section 775 of the Code and
(vii) any other Person so designated by
the Depositor based upon an Opinion of
Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such
Person may cause either Trust REMIC
to fail to qualify as a REMIC at any time
that the Certificates are outstanding.
The terms "United States," "State" and
"international organization" shall have
the meanings set forth in Section 7701 of
the Code or successor provisions. A
corporation will not be treated as an
instrumentality of the United States or of
any State or political subdivision thereof
for these
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<PAGE>
purposes if all of its activities are
subject to tax and, with the exception of
the Freddie Mac, a majority of its board of
directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability
company, joint-stock company, trust,
unincorporated organization or government,
or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal
Balances of the Mortgage Loans for such
Distribution Date that were Outstanding
Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Interest Excess: With respect to any Remittance
Date, the sum of, for each Mortgage Loan
that was, during the portion of the
Prepayment Period occurring in the same
month as such Remittance Date, the
subject of a Principal Prepayment that was
applied by the Servicer to reduce the
outstanding principal balance of such
Mortgage Loan, an amount equal to the
product of (a) the Mortgage Interest Rate
net of the Servicing Fee Rate for such
Mortgage Loan, (b) the amount of the
Principal Prepayment for such Mortgage
Loan, (c) 1/360 and (d) the number of days
commencing on the first day of the
calendar month in which such Remittance
Date occurs and ending on the date on
which such Principal Prepayment is so
applied.
Prepayment Interest Shortfall: With respect to any Remittance
Date, the sum of, for each Mortgage Loan
that was, during the portion of the
related Prepayment Period occurring in the
calendar month preceding such
Remittance Date, the subject of a Principal
Prepayment, an amount equal to the
product of (a) the Mortgage Interest Rate
net of the Servicing Fee Rate for such
Mortgage Loan, (b) the amount of the
Principal Prepayment for such Mortgage
Loan, (c) 1/360 and (d) the number of days
commencing on the date on which such
Principal Prepayment was applied and ending
on the last day of the last day of
the related Prepayment Period.
Prepayment Period: With respect to any Distribution Date, the
period beginning on the 15th day of the
month preceding the month in which such
Distribution Date occurs and ending on the
14th day of the month in which such
Distribution Date occurs.
Prepayment Premium: Any prepayment premium or charge collected
by the applicable Servicer with respect to
a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal
Prepayment pursuant to the terms of the
related Mortgage Note.
Principal Distribution Amount: For any Distribution Date, the
sum of (i) the Basic Principal Distribution
Amount for such Distribution Date
and (ii) on or after the Distribuiton Date
in May 2005, the Extra Principal
Distribution Amount for such Distribution
Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan
(including upon liquidation of a
Mortgage Loan) which is received in advance
of its scheduled Due Date, excluding
any Prepayment Premium and which is not
27
<PAGE>
accompanied by an amount of interest
representing scheduled interest due on any
date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by
a Mortgagor of the entire principal balance
of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date, the amount equal to the sum of the
following amounts (without duplication)
with respect to the related Due Period: (i)
each scheduled payment of principal
on a Mortgage Loan due during such Due
Period and received by the Servicer on or
prior to the related Determination Date or
advanced by the Servicer for the
related Remittance Date (ii) all Principal
Prepayments received during the
related Prepayment Period, (iii) all
Liquidation Proceeds, Condemnation
Proceeds, Net Recoveries and Insurance
Proceeds (including any proceeds under
the Mortgage Pool Insurance Policy) on the
Mortgage Loans allocable to principal
actually collected by the Servicer during
the related Prepayment Period, (iv)
the portion of the Repurchase Price
allocable to principal with respect to each
Deleted Mortgage Loan, the repurchase
obligation for which arose during the
related Prepayment Period, that was
repurchased during the period from the prior
Distribution Date through the Remittance
Date for the current Distribution Date,
(v) the portion of all Substitution
Adjustment Amounts allocable to principal
with respect to the substitutions of
Mortgage Loans that occur during the
calendar month in which such Distribution
Date occurs, and (vi) the allocable
portion of the proceeds received with
respect to the termination of the Trust
Fund pursuant to clause (a) of Section 9.01
(to the extent such proceeds relate
to principal).
Privacy Laws: Title V of the Gramm-Leach-Bliley Act of 1999,
as amended, and all applicable regulations
promulgated thereunder.
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated April
4, 2005, relating to the Offered
Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of August
25, 2004, between the Purchaser and the
Responsible Party.
Purchaser: Goldman Sachs Mortgage Company, a New York limited
partnership, and its successors in
interest, as purchaser of the Mortgage Loans
under the Purchase Agreement.
Radian Guidelines: The current 2nd lien servicing guidelines
of the Mortgage Pool Insurer and the
Service Level Agreement dated April 29,
2004 between the Mortgage Pool Insurer and
the Servicer, referred to in the
Mortgage Pool Insurance Policy.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization
or a successor is no longer in
existence, "Rating Agency" shall
28
<PAGE>
be such nationally recognized statistical
rating organization, or other
comparable Person, as is designated by the
Depositor, notice of which
designation shall be given to the Trustee.
References herein to a given rating
or rating category of a Rating Agency shall
mean such rating category without
giving effect to any modifiers. For
purposes of Section 10.05(b), the addresses
for notices to each Rating Agency shall be
the address specified therefor in the
definition corresponding to the name of
such Rating Agency, or such other
address as either such Rating Agency may
hereafter furnish to the Depositor and
the Servicer.
Realized Losses: With respect to any date of determination and
any Liquidated Mortgage Loan, the amount,
if any, by which (a) the unpaid
principal balance of such Liquidated
Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the
Liquidation Proceeds (including any
proceeds under the Mortgage Pool Insurance
Policy) with respect thereto net of
the expenses incurred by the Servicer in
connection with the liquidation of such
Liquidated Mortgage Loan and net of the
amount of unreimbursed Servicing
Advances with respect to such Liquidated
Mortgage Loan. Any Charged Off Loan
will give rise to a Realized Loss
(calculated as if clause (b) of the previous
sentence is equal to zero) at the time it
is charged off, as described in
Section 3.15(c) hereof.
Record Date: With respect to any Distribution Date, the close
of business on the last day of the related
Interest Accrual Period; provided,
however, that for any Certificate issued in
definitive form, the Record Date
shall be the close of business on the last
Business Day of the month preceding
the month in which such applicable
Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Released Loan: Any Charged Off Loan that is released by
Wilshire Credit to the Class X-1
Certificateholder pursuant to Section 3.15(d),
generally on the date that is six months
after the date on which Wilshire Credit
begins using Wilshire Special Servicing on
such Charged Off Loans. Any Released
Loan will no longer be an asset of any
REMIC or the Trust Fund.
Relief Act Interest Shortfall: With respect to any
Distribution Date and any Mortgage Loan,
any reduction in the amount of interest
or principal collectible on such Mortgage
Loan for the most recently ended Due
Period as a result of the application of
the Servicemembers Civil Relief Act, or
any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC I: As specified in the Preliminary Statement.
REMIC I Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a)
the product of (i) the aggregate
Stated Principal Balance of the Mortgage
Loans and REO Properties then
outstanding and (ii) the REMIC I Remittance
Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, divided by
(b) 12.
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<PAGE>
REMIC I Overcollateralization Amount: With respect to any date
of determination, (i) 1.00% of the
aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the
aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA,
REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTB1, REMIC I
Regular Interest I-LTB2 and REMIC I Regular
Interest I-LTB3, in each case as of
such date of determination.
REMIC I Principal Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a)
the product of (i) 1.00% of the
aggregate Stated Principal Balance of the
Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction,
the numerator of which is two times the
aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA,
REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC I
Regular Interest I-LTB1, REMIC I Regular
Interest I-LTB2 and REMIC I Regular
Interest I-LTB3 and the denominator of
which is the aggregate of the
Uncertificated Balances of REMIC I Regular
Interest I-LTA, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2,
REMIC I Regular Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ.
REMIC I Regular Interest: Any of the separate non-certificated
beneficial ownership interests in REMIC I
issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I
Regular Interest shall accrue
interest at the related REMIC I Remittance
Rate in effect from time to time, and
shall be entitled to distributions of
principal, subject to the terms and
conditions hereof, in an aggregate amount
equal to its initial Uncertificated
Balance as set forth in the Preliminary
Statement hereto. The designations for
the respective REMIC I Regular Interests
are set forth in the Preliminary
Statement hereto.
REMIC I Regular Interest I-LTAA: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTAA
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest I-LTA: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTA
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest I-LTM1: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal,
30
<PAGE>
subject to the terms and conditions hereof,
in an aggregate amount equal to its
initial Uncertificated Balance as set forth
in the Preliminary Statement hereto.
REMIC I Regular Interest I-LTM2: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest I-LTB1: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTB1
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest I-LTB2: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTB2
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest I-LTB3: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTB3
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto.
REMIC I Regular Interest I-LTZZ: One of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC
I. REMIC I Regular Interest I-LTZZ
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time, and shall be entitled to
distributions of principal, subject to the
terms and conditions hereof, in an
aggregate amount equal to its initial
Uncertificated Balance as set forth in the
Preliminary Statement hereto.
REMIC I Remittance Rate: With respect to each REMIC I Regular
Interest, a per annum rate equal to (i) the
weighted average of the Adjusted Net
Mortgage Interest Rates then in effect on
the beginning of the related Due
Period on the Mortgage Loans.
REMIC I Required Overcollateralization Amount: 1% of the
Overcollateralization Floor.
31
<PAGE>
REMIC II: The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in
trust to the Trustee, for the benefit
of the REMIC II Certificateholders pursuant
to Section 2.07, and all amounts
deposited therein, with respect to which a
separate REMIC election is to be
made.
REMIC II Certificate: Any Regular Certificate or Class R-2
Certificate.
REMIC II Certificateholder: The Holder of any REMIC II
Certificate.
REMIC Opinion: As defined in Section 9.03.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment
conduits, which appear at Sections
860A through 860G of Subchapter M of
Chapter 1 of the Code, and related
provisions, and regulations promulgated
thereunder, as the foregoing may be in
effect from time to time as well as
provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no
later than 1:00 PM, Central Time on the
Business Day immediately preceding such
Distribution Date.
REO Disposition: The final sale by the applicable Servicer of
any REO Property.
REO Imputed Interest: As to any REO Property, for any period,
an amount equivalent to interest (at the
Mortgage Interest Rate net of the
Servicing Fee Rate that would have been
applicable to the related Mortgage Loan
had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as
of the date of acquisition thereof (as such
balance is reduced pursuant to
Section 3.15 by any income from the REO
Property treated as a recovery of
principal).
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of
foreclosure in connection with a
defaulted Mortgage Loan.
Reporting Date: The later of (i) the 18th day of each calendar
month and (ii) two Business Days after the
15th day of each month
Repurchase Price: With respect to any Mortgage Loan, an amount
equal to the sum of (i) the unpaid
principal balance of such Mortgage Loan as of
the date of repurchase, (ii) interest on
such unpaid principal balance of such
Mortgage Loan at the Mortgage Interest Rate
from the last date through which
interest has been paid and distributed to
the Trustee to the date of repurchase,
(iii) all unreimbursed Servicing Advances
and (iv) all expenses incurred by the
Servicer, the Trust or the Trustee, as the
case may be, in respect of a breach
or defect, including, without limitation,
expenses arising out of the Servicer's
or Trustee's, as the case may be,
enforcement of the Responsible Party's
repurchase obligations, as applicable, to
the extent not included in clause
(iii), and (v) any costs and damages
incurred by the Trust in connection with
any violation by such Mortgage Loan of any
predatory lending law or abusive
lending law.
32
<PAGE>
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in
the form of Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Residual Interest: The sole class of "residual interests" in a
REMIC within the meaning of Section
860G(a)(2) of the Code.
Responsible Officer: When used with respect to the Trustee,
any vice president, any assistant vice
president, any assistant secretary, any
assistant treasurer, any associate or any
other officer of the Trustee
customarily performing functions similar to
those performed by any of the above
designated officers who at such time shall
be officers to whom, with respect to
a particular matter, such matter is
referred because of such officer's knowledge
of and familiarity with the particular
subject and who shall have direct
responsibility for the administration of
this Agreement.
Review Appraisal Value: As defined in the Underwriting
Guidelines.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to
principal and/or interest on such Mortgage
Loan which, unless otherwise specified
herein, shall give effect to any related
Debt Service Reduction and any Deficient
Valuation that affects the amount of
the monthly payment due on such Mortgage
Loan.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any
Distribution Date, the percentage obtained
by dividing (x) the sum of (i) the
aggregate Class Certificate Balance of the
Subordinated Certificates and (ii)
the Overcollateralized Amount (in each case
after taking into account the
distributions of the Principal Distribution
Amount for such Distribution Date)
by (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 64.80%.
Servicer: Wilshire Credit.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred
prior to, on, or after the Cut-off Date
by the Servicer in the performance of its
servicing obligations in connection
with a default, delinquency or other
unanticipated event, including, but not
limited to, the cost of (i) the
preservation, restoration, inspection and
protection of a Mortgaged Property, (ii)
any enforcement or judicial
proceedings, including foreclosures and
litigation, in respect of a particular
Mortgage Loan, (iii) the management
(including reasonable fees in connection
therewith) and liquidation of any REO
33
<PAGE>
Property and (iv) the performance of its
obligations under Sections 3.01, 3.09,
3.13 and 3.15 (including the cost of
obtaining any broker's price opinion
pursuant thereto). Servicing Advances also
include any reasonable
"out-of-pocket" costs and expenses
(including legal fees) incurred by the
Servicer in connection with (v) executing
and recording instruments of
satisfaction, deeds of reconveyance or
Assignments of Mortgage in connection
with any satisfaction or foreclosures in
respect of any Mortgage Loan to the
extent not recovered from the Mortgagor or
otherwise payable under this
Agreement, (vi) obtaining or correcting any
legal documentation required to be
included in the Mortgage Files and
necessary for the Servicer to perform its
obligations under this Agreement and (vii)
any third party tax, insurance, and
flood tracking service, and flood
certification fees incurred by the Servicer,
whether incurred on a life of loan basis,
monthly, or otherwise; and costs
incurred by the Servicer in connection with
correcting errors of prior
servicers, including amortization
adjustments, delinquent taxes, penalties and
interest; custodian costs; and title
research. The Servicer shall not be
required to make any Nonrecoverable
Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and any
Distribution Date, an amount equal to the
product of (i) one-twelfth of
Servicing Fee Rate and (ii) the applicable
Stated Principal Balance of such
Mortgage Loan as of the first day of the
calendar month preceding the month in
which such Distribution Date occurs. Such
fee shall be payable monthly, and
shall be pro rated for any portion of a
month during which the Mortgage Loan is
serviced by the Servicer under this
Agreement. The Servicing Fee is payable
solely from the interest portion (including
recoveries with respect to interest
from Liquidation Proceeds, Insurance
Proceeds (including any proceeds under the
Mortgage Pool Insurance Policy),
Condemnation Proceeds and proceeds received
with respect to REO Properties, to the
extent permitted by Section 3.11) of such
Scheduled Payment collected by the Servicer
or as otherwise provided under
Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of
originals or copies of all documents in
the Mortgage File which are not delivered
to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents
set forth in Exhibit K hereto.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and
servicing of the Mortgage Loans whose
name and facsimile signature appear on a
list of servicing officers furnished to
the Trustee by the Servicer on the Closing
Date pursuant to this Agreement, as
such list may from time to time be
amended.
Servicing Transfer Costs: All reasonable out-of-pocket costs
and expenses incurred by the Trustee in
connection with the transfer of
servicing from a terminated Servicer,
including, without limitation, any such
costs or expenses associated with the
complete transfer of all servicing data
and the completion, correction or
manipulation of such servicing data as may be
required by the Trustee to correct any
errors or insufficiencies in the
servicing data or otherwise to enable the
Trustee (or any successor Servicer
appointed pursuant to Section 7.02) to
service the Mortgage Loans properly and
effectively.
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<PAGE>
Significant Net Recoveries: With respect to a defaulted
Mortgage Loan, a determination by the
Servicer that either (A) the potential Net
Recoveries are anticipated to be greater
than or equal to the sum of (i) the
total indebtedness of the First Lien
Mortgage Loan on the related Mortgaged
Property and (ii) $10,000 (after
anticipated expenses and attorneys' fees) or
(B) the related Mortgagor has shown a
willingness and ability to pay over the
previous six months.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with
respect to which any portion of a Scheduled
Payment is, as of the last day of
the prior Due Period, two months or more
past due (without giving effect to any
grace period), each Mortgage Loan in
foreclosure, all REO Property and each
Mortgage Loan for which the Mortgagor has
filed for bankruptcy.
Specified Overcollateralized Amount: Prior to the Stepdown
Date, an amount equal to 5.60% of the
Cut-off Date Pool Principal Balance. On
and after the Stepdown Date, an amount
equal to 11.20% of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date, subject,
until the Class Certificate Balance of each
Class of Offered Certificates has
been reduced to zero, to a minimum amount
equal to the Overcollateralization
Floor; provided, however, that if, on any
Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized
Amount shall not be reduced to the
applicable percentage of the then current
aggregate Stated Principal Balance of
the Mortgage Loans until the Distribution
Date on which a Trigger Event is no
longer occurring.
Standard & Poor's: Standard & Poor's Ratings Services,
a
division of The McGraw-Hill Companies,
Inc., and its successors in interest. If
Standard & Poor's is designated as a
Rating Agency in the Preliminary Statement,
for purposes of Section 10.05(b) the
address for notices to Standard & Poor's
shall be Standard & Poor's, 55 Water
Street, New York, New York 10041,
Attention: Residential Mortgage
Surveillance Group - GSAMP Trust 2005-S1, or
such other address as Standard & Poor's
may hereafter furnish to the Depositor,
the Servicer and the Trustee.
Standard & Poor's Glossary: Version 5.6 of the Standard
&
Poor's LEVELS(R)Glossary.
Start-up Day: As defined in Section 2.06.
Stated Principal Balance: As to each Mortgage Loan and as of
any date of determination, (i) the
principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to
payments of principal due on or before such
date, minus (ii) all amounts previously
remitted to the Trustee with respect to
the related Mortgage Loan representing
payments or recoveries of principal
including advances in respect of scheduled
payments of principal. For purposes
of any Distribution Date, the Stated
Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of
principal received by the Servicer on
or prior to the related Determination Date
or advanced by the Servicer for the
related Remittance Date and any unscheduled
principal payments and other
unscheduled principal collections received
during the
35
<PAGE>
related Prepayment Period, and the Stated
Principal Balance of any Mortgage Loan
that has prepaid in full or has become a
Liquidated Mortgage Loan during the
related Prepayment Period shall be
zero.
Stepdown Date: The earlier to occur of (a) the date on which
the Class Certificate Balance of the Class
A Certificates has been reduced to
zero, and (b) the later to occur of (i) the
Distribution Date in April 2008, and
(ii) the first Distribution Date on which
the Senior Enhancement Percentage is
greater than or equal to the Senior
Specified Enhancement Percentage.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has
become a Liquidated Mortgage Loan.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage
Loan which must, on the date of such
substitution, as confirmed in a Request for
Release, substantially in the form
of Exhibit J, (i) have a Stated Principal
Balance, after deduction of the
principal portion of the Scheduled Payment
due in the month of substitution, not
in excess of, and not more than 10% less
than, the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing
interest at a rate no lower than and
not more than 1% per annum higher than,
that of the Deleted Mortgage Loan; (iii)
have a CLTV no higher than that of the
Deleted Mortgage Loan; (iv) have a
remaining term to maturity no greater than
(and not more than one year less than
that of) the Deleted Mortgage Loan; and (v)
comply with each representation and
warranty set forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(g).
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated
on the Bridge Telerate Service (or such
other page as may replace that page on
that service for displaying comparable
rates or prices).
Terminating Entity: The Person that exercises a Terminating
Purchase pursuant to Section 9.01(a)
hereof.
Terminating Purchase: The purchase of the Mortgage Loans and
all other property of the Trust Fund
pursuant to Section 9.01(a) hereof.
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<PAGE>
Termination Price: The price paid by the Terminating Entity
for the Mortgage Loans and all other
property of the Trust Fund pursuant to
Section 9.01(a) hereof.
30 Day Delinquency: The failure of the Mortgagor to make any
Scheduled Payment due under the Mortgage
Note on or prior to the date which is
30 days after such payment's Due Date.
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i)
the interest collected on the Mortgage
Loans received by the Servicer on or prior
to the related Determination Date or
advanced by the Servicer for the related
Remittance Date (net of Expense Fees)
over (ii) the sum of amounts payable to the
Offered Certificates on such
Distribution Date pursuant to Section
4.02(a)(i).
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual
Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a
Trigger Event exists if (i) the quotient
(expressed as a percentage) of (1) the
rolling three month average of the
aggregate unpaid principal balance of 60+ Day
Delinquent Mortgage Loans, divided by (2)
the aggregate unpaid principal balance
of the Mortgage Loans as of the last day of
the related Due Period, equals or
exceeds 17.00% of the Senior Enhancement
Percentage as of the last day of the
prior Due Period or (ii) the quotient
(expressed as a percentage) of (x) the
aggregate amount of Realized Losses (as
reduced by any Net Recoveries received
on Charged Off Loans) incurred since the
Cut-off Date through the last day of
the related Prepayment Period divided by
(y) the Cut-off Date Pool Principal
Balance, exceeds the applicable percentages
set forth below with respect to such
Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN
LOSS PERCENTAGE
------------------------------
---------------
<S>
<C>
April 2008 through March 2009
7.000% for
the first month, plus an additional
1/12th of 4.000% for
each month
thereafter
(e.g.,
approximately 7.333% in May 2008)
April 2009 through March 2010
11.000% for the
first month, plus an additional
1/12th of 3.000% for
each month
thereafter
(e.g.,
approximately 11.250% in May 2009)
April 2010 through March 2011
14.000% for the
first month, plus an additional
1/12th of 1.500% for
each month
thereafter
(e.g.,
approximately 14.125% in May 2010)
April 2011 and thereafter
15.500%
</TABLE>
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and
all interest and principal received on
or with respect thereto after the related
Cut-off Date, other than such amounts
which were due on the Mortgage Loans on or
before the
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related Cut-off Date; (ii) the Collection
Account, the Excess Reserve Fund
Account, the Distribution Account, and all
amounts deposited therein pursuant to
the applicable provisions of this
Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure
or otherwise; (iv) the Mortgage Pool
Insurance Policy and (v) all proceeds of
the conversion, voluntary or involuntary,
of any of the foregoing.
Trust
REMIC: Either REMIC I or REMIC II, as applicable.
Trustee: Deutsche Bank National Trust Company, and its
successors in interest and, if a successor
trustee is appointed hereunder, such
successor.
Trustee Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's
interest at the related Trustee Fee Rate on
the Stated Principal Balance of such
Mortgage Loan as of the preceding
Distribution Date (or as of the Closing
Date in the case of the first
Distribution Date) or, in the event of any
payment of interest which accompanies
a Principal Prepayment in Full made by the
Mortgagor, interest at the Trustee
Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period
covered by such payment of interest.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.01%
per annum.
Trustee Float Period: With respect to any Distribution Date
and the related amounts in the Distribution
Account, the period commencing on
the Business Day immediately preceding such
Distribution Date and ending on such
Distribution Date.
U.S. Person: (i) A citizen or resident of the United States;
(ii) a corporation (or entity treated as a
corporation for tax purposes) created
or organized in the United States or under
the laws of the United States or of
any State thereof, including, for this
purpose, the District of Columbia; (iii)
a partnership (or entity treated as a
partnership for tax purposes) organized in
the United States or under the laws of the
United States or of any state
thereof, including, for this purpose, the
District of Columbia (unless provided
otherwise by future Treasury regulations);
(iv) an estate whose income is
includible in gross income for United
States income tax purposes regardless of
its source; or (v) 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 U.S. Persons have authority to control
all substantial decisions of the
trust. Notwithstanding the last clause of
the preceding sentence, to the extent
provided in Treasury regulations, certain
trusts in existence on August 20,
1996, and treated as U.S. Persons prior to
such date, may elect to continue to
be U.S. Persons.
Uncertificated Balance: The amount of the REMIC I Regular
Interests outstanding as of any date of
determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I
Regular Interest shall equal the
amount set forth in the Preliminary
Statement hereto as its initial
uncertificated balance. On each
Distribution Date, the Uncertificated Balance of
the REMIC I Regular Interest shall be
reduced by all distributions of principal
made on such REMIC I Regular Interest on
such Distribution Date pursuant to
Section 4.06 and, if and to the extent
necessary and appropriate, shall be
further reduced on such Distribution Date
by Realized
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<PAGE>
Losses as provided in Section 4.05 and the
Uncertificated Balance of REMIC I
Regular Interest I-LTZZ shall be increased
by interest deferrals as provided in
Section 4.06. The Uncertificated Balance of
each REMIC I Regular Interest shall
never be less than zero.
Uncertificated Interest: With respect to any REMIC I Regular
Interest for any Distribution Date, one
month's interest at the REMIC I
Remittance Rate applicable to such REMIC I
Regular Interest for such
Distribution Date, accrued on the
Uncertificated Balance thereof immediately
prior to such Distribution Date.
Uncertificated Interest in respect of the REMIC
I Regular Interests shall accrue on the
basis of a 360-day year consisting of
twelve 30-day months. Uncertificated
Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest,
shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such
Distribution Date to the extent not covered
by payments pursuant to Section 3.25
of this Agreement and (b) the aggregate
amount of any Relief Act Interest
Shortfall, if any allocated, in each case,
to such REMIC I Regular Interest
pursuant to Section 4.02. In addition,
Uncertificated Interest with respect to
each Distribution Date, as to any
Uncertificated REMIC Regular Interest, shall
be reduced by Realized Losses, if any,
allocated to such Uncertificated REMIC
Regular Interest pursuant to Section
4.05.
Underwriters' Exemption: Any exemption listed in footnote 1
of, and amended by, Prohibited Transaction
Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached
to the Purchase Agreement.
Unpaid Interest Amounts: As of any Distribution Date and any
Class of Certificates, the sum of (a) the
portion of the Accrued Certificate
Interest Distribution Amount from prior
Distribution Dates remaining unpaid
immediately prior to the current
Distribution Date and (b) interest on such
unpaid amount in clause (a) at the
applicable Pass-Through Rate (to the extent
permitted by applicable law).
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any
Certificate. As of any date of
determination, (a) 1% of all Voting Rights
shall be allocated to the Class X
Certificates, if any (such Voting Rights to
be allocated among the holders of
Certificates of each such Class in
accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights
shall be allocated to the Class P
Certificates, if any, and (c) the remaining
Voting Rights shall be allocated
among Holders of the remaining Classes of
Certificates (other than the Class
R-1, Class R-2 and Class X-1 Certificates)
in proportion to the Certificate
Balances of their respective Certificates
on such date. The Class R-1, Class R-2
and Class X-1 Certificates shall have no
Voting Rights.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution Date, a per annum rate equal
to (i) the weighted average of the
Adjusted Net Mortgage Interest Rates then
in effect on the beginning of the
related Due Period on the Mortgage Loans
and (ii) with respect to each Class of
LIBOR Certificates, multiplied by a
fraction, the numerator of which is 30 and
the denominator of which is the actual
number of days in the Interest Accrual
Period related to such
39
<PAGE>
Distribution Date. For federal income tax
purposes, the equivalent of the
foregoing shall be expressed as the
weighted average of the REMIC I Remittance
Rates on each REMIC I Regular Interest,
weighted on the basis of the
Uncertificated Balance of each such REMIC I
Regular Interest.
Wilshire Credit:
Wilshire Credit Corporation, a Nevada
corporation, and its successors in
interest.
Wilshire Special Servicing: With regard to any Charged Off
Loans, the servicing of such Charged Off
Loans using specialized collection
procedures (including foreclosure, if
appropriate) to maximize recoveries.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF MORTGAGE LOANS. (a) The Depositor,
concurrently with the execution and
delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to
the Trustee for the benefit of the
Certificateholders, without recourse, all
the right, title and interest of the
Depositor in and to the Trust Fund, and the
Trustee, on behalf of the Trust,
hereby accepts the Trust Fund. In addition,
on the Closing Date, the Co-Trustee
shall pay the Mortgage Pool Insurer Fee to
the Mortgage Pool Insurer, to the
extent of funds on deposit in the
Distribution Account, and the Depositor shall
cause the Mortgage Pool Insurer to deliver
the Mortgage Pool Insurance Policy to
the Co-Trustee.
(b) In
connection with the transfer and assignment of
each Mortgage Loan, the Depositor has
delivered or caused to be delivered to the
Trustee for the benefit of the
Certificateholders the following documents or
instruments with respect to each Mortgage
Loan so assigned:
(i) the
original Mortgage Note (except for up to 0.39% of
the Mortgage Notes for which there is a lost note affidavit and a
copy
of the Mortgage Note) bearing all intervening endorsements,
endorsed
"Pay to the order of _________, without recourse" and signed in
the
name of the last endorsee. To the extent that there is no room on
the
face of the Mortgage Notes for endorsements, the endorsement may
be
contained on an allonge unless the Trustee is advised by the
Responsible Party that state law does not so allow. If the
Mortgage
Loan was acquired by the Responsible Party in a merger, the
endorsement
must be by "[last endorsee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by
the
last endorsee while doing business under another name, the
endorsement
must be by "[last endorsee], formerly known as [previous
name]";
(ii)
the original of any guarantee executed in connection
with the Mortgage Note;
40
<PAGE>
(iii) the
original Mortgage with evidence of recording
thereon or a certified true copy of such Mortgage submitted for
recording. If in connection with any Mortgage Loan, the
Responsible
Party, cannot deliver or cause to be delivered the original
Mortgage
with evidence of recording thereon on or prior to the Closing
Date
because of
a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such
Mortgage
has been lost or because such public recording office retains
the
original recorded Mortgage, the Responsible Party shall deliver
or
cause to be delivered to the Trustee, a photocopy of such
Mortgage,
together with (i) in the case of a delay caused by the public
recording
office, an officer's certificate of the Responsible Party (or
evidence
of certification on the face of such photocopy of such Mortgage)
or
certified by the title company, escrow agent, or closing
attorney
stating that such Mortgage has been dispatched to the
appropriate
public recording office for recordation and that the original
recorded
Mortgage or a copy of such Mortgage certified by such public
recording
office to be a true and complete copy of the original recorded
Mortgage
will be promptly delivered to the Trustee upon receipt thereof by
the
Responsible Party; or (ii) in the case of a Mortgage where a
public
recording office retains the original recorded Mortgage or in the
case
where a Mortgage is lost after recordation in a public
recording
office, a copy of such Mortgage certified by such public
recording
office to be a true and complete copy of the original recorded
Mortgage;
(iv)
the originals of all assumption, modification,
consolidation or extension agreements, (if provided), with evidence
of
recording thereon or a certified true copy of such agreement
submitted
for recording;
(v) the
original Assignment of Mortgage for each Mortgage
Loan endorsed in blank and in recordable form;
(vi)
the originals of all intervening assignments of
mortgage (if any) evidencing a complete chain of assignment from
the
applicable originator to the last endorsee with evidence of
recording
thereon, or if any such intervening assignment has not been
returned
from the applicable recording office or has been lost or if such
public
recording office retains the original recorded assignments of
mortgage,
the Responsible Party shall deliver or cause to be delivered to
the
Trustee, a photocopy of such intervening assignment, together with
(A)
in the case of a delay caused by the public recording office,
an
officer's certificate of the Responsible Party (or evidence of
certification on the face of such photocopy of such intervening
assignment of mortgage) or certified by the title company,
escrow
agent, or closing attorney stating that such intervening assignment
of
mortgage has been dispatched to the appropriate public recording
office
for recordation and that such original recorded intervening
assignment
of mortgage or a copy of such intervening assignment of
mortgage
certified by the appropriate public recording office to be a true
and
complete copy of the original recorded intervening assignment
of
mortgage will be promptly delivered to the Trustee upon receipt
thereof
by the Responsible Party; or (B) in the case of an intervening
assignment where a public recording office retains the original
recorded intervening assignment or in the case where an
intervening
assignment is lost after recordation in a public recording office,
a
copy of such intervening assignment certified by such public
41
<PAGE>
recording office to be a true and complete copy of the original
recorded intervening assignment;
(vii) the
original mortgagee policy of title insurance or,
in the event such original title policy is unavailable, a
certified
true copy of the related policy binder or commitment for title
certified to be true and complete by the title insurance company;
and
(viii) a
security agreement, chattel mortgage or equivalent
document executed in connection with the Mortgage (if
provided).
Each Mortgage Loan for which a Mortgage Note is missing shall
be evidenced by a lost note affidavit as of
the Closing Date. In the event one
or more lost note affidavits are provided
to cover multiple missing Mortgage
Notes on the Closing Date, the Responsible
Party shall deliver to the Trustee
the applicable individual lost note
affidavits within ten (10) Business Days of
the Closing Date. If the Responsible Party
fails to deliver the required
individual lost note affidavits within the
specified period of time, the Trustee
shall notify the Responsible Party to take
such remedial actions, including,
without limitation, the repurchase by the
Responsible Party within 30 days of
the Closing Date.
The Responsible Party shall deliver to the Trustee the
applicable recorded document promptly upon
receipt from the respective recording
office but in no event later than 120 days
from the Closing Date.
From time to time, the Responsible Party shall forward, with
respect to the Mortgage Loans, to the
Trustee additional documents evidencing an
assumption, modification, consolidation or
extension of a Mortgage Loan approved
by the Responsible Party in accordance with
the terms of this Agreement. All
such mortgage documents held by the Trustee
as to each Mortgage Loan shall
constitute the "Custodial File."
On or prior to the Closing Date, the Responsible Party shall
deliver to the Trustee Assignments of
Mortgages, in blank, for each applicable
Mortgage Loan. The Responsible Party shall
cause the Assignments of Mortgage
with completed recording information to be
provided to the Servicer in a
reasonably acceptable manner. No later than
thirty (30) Business Days following
the later of the Closing Date and the date
of receipt by the Servicer of the
fully completed Assignments of Mortgages in
recordable form, the Servicer shall
promptly submit or cause to be submitted
for recording, at the expense of the
Responsible Party or the Depositor, at no
expense to the Trust Fund or the
Trustee in the appropriate public office
for real property records, each
Assignment of Mortgage referred to in
Section 2.01(b)(v). Notwithstanding the
foregoing, however, for administrative
convenience and facilitation of servicing
and to reduce closing costs, the
Assignments of Mortgage shall not be required
to be completed and submitted for recording
with respect to any Mortgage Loan if
the Trustee and each Rating Agency has
received an opinion of counsel,
satisfactory in form and substance to the
Trustee and each Rating Agency, to the
effect that the recordation of such
Assignments of Mortgage in any specific
jurisdiction is not necessary to protect
the Trustee's interest in the related
Mortgage Note. If the Assignment of
Mortgage is to be recorded, the Mortgage
shall be assigned by the Responsible Party
at the Responsible Party's or the
Depositor's expense to "Deutsche Bank
National Trust
42
<PAGE>
Company, as trustee under the Pooling and
Servicing Agreement dated as of March
1, 2005, GSAMP Trust 2005-S1." In the event
that any such assignment is lost or
returned unrecorded because of a defect
therein, the Responsible Party shall
promptly prepare a substitute assignment to
cure such defect and thereafter
cause each such assignment to be duly
recorded at the expense of the Responsible
Party or the Depositor.
On or prior to the Closing Date, the Depositor shall deliver
to the Trustee and the Servicer a copy of
the Data Tape Information in
electronic, machine readable medium in a
form mutually acceptable to the
Depositor, the Servicer and the Trustee.
Within ten (10) Business Days of the
Closing Date, the Depositor shall deliver a
copy of the complete Mortgage Loan
Schedule to the Trustee and the
Servicer.
In the event that such original or copy of any document
submitted for recordation to the
appropriate public recording office is not so
delivered to the Trustee within 90 days
following the Closing Date, and in the
event that the Responsible Party does not
cause such failure to be cured within
30 days of discovery of receipt of written
notification of such failure from the
Depositor, the related Mortgage Loan shall,
upon the request of the Depositor,
be repurchased by the Responsible Party at
the price and in the manner specified
in Section 2.03. The foregoing repurchase
obligation shall not apply in the
event that the Responsible Party cannot
deliver such original or copy of any
document submitted for recordation to the
appropriate public recording office
within the specified period due to a delay
caused by the recording office in the
applicable jurisdiction; provided, that the
Responsible Party shall instead
deliver a recording receipt of such
recording office or, if such recording
receipt is not available, an officer's
certificate of an officer of the
Responsible Party confirming that such
document has been accepted for recording.
Notwithstanding anything to the contrary contained in this
Section 2.01, in those instances where the
public recording office retains or
loses the original Mortgage or assignment
after it has been recorded, the
obligations of the Resonsible Party shall
be deemed to have been satisfied upon
delivery by the Responsbile Party to the
Trustee prior to the Closing Date of a
copy of such Mortgage or assignment, as the
case may be, certified (such
certification to be an original thereof) by
the public recording office to be a
true and complete copy of the recorded
original thereof.
(c) The
Depositor does hereby establish, pursuant to the
further provisions of this Agreement and
the laws of the State of New York, an
express trust (the "Trust") to be known,
for convenience, as "GSAMP Trust
2005-S1" and Deutsche Bank National Trust
Company is hereby appointed as Trustee
in accordance with the provisions of this
Agreement. The parties hereto
acknowledge and agree that it is the policy
and intention of the Trust to
acquire only Mortgage Loans meeting the
requirements set forth in this
Agreement, including without limitation,
the representations and warranties set
forth in paragraph (47) of Schedule IV to
this Agreement.
(d) The Trust
shall have the capacity, power and
authority, and the Trustee on behalf of the
Trust is hereby authorized, to
accept the sale, transfer, assignment, set
over and conveyance by the Depositor
to the Trust of all the right, title and
interest of the Depositor in and
43
<PAGE>
to the Trust Fund (including, without
limitation, the Mortgage Loans and Fremont
Agreements) pursuant to Section
2.01(a).
Section 2.02 ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE LOANS.
The Trustee acknowledges receipt of the
documents identified in the Initial
Certification in the form annexed hereto as
Exhibit E, and declares that it
holds and will hold such documents and the
other documents delivered to it
pursuant to Section 2.01, and that it holds
or will hold such other assets as
are included in the Trust Fund, in trust
for the exclusive use and benefit of
all present and future Certificateholders.
The Trustee acknowledges that it will
maintain possession of the related Mortgage
Notes in the State of California
unless otherwise permitted by the Rating
Agencies.
Prior to and as a condition to the Closing, the Trustee shall
deliver via facsimile (with original to
follow the next Business Day) to the
Depositor and the Servicer an Initial
Certification prior to the Closing Date,
or as the Depositor agrees to, on the
Closing Date, certifying receipt of a
Mortgage Note and Assignment of Mortgage
for each Mortgage Loan with any
exceptions thereon. The Trustee shall not
be responsible to verify the validity,
sufficiency or genuineness of any document
in any Custodial File.
On the Closing Date, the Trustee shall ascertain that all
documents required to be reviewed by it are
in its possession, and shall deliver
to the Depositor and the Servicer an
Initial Certification, in the form annexed
hereto as Exhibit E, and shall deliver to
the Depositor and the Servicer a
Document Certification and Exception
Report, in the form annexed hereto as
Exhibit F, within 90 days after the Closing
Date to the effect 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 such certification
as an exception and not covered by such
certification): (i) all documents
required to be reviewed by it are in its
possession; (ii) such documents have
been reviewed by it and appear regular on
their face and relate to such Mortgage
Loan; (iii) based on its examination and
only as to the foregoing documents, the
information set forth in items (1), (2) and
(13) of the Mortgage Loan Schedule
and items (1), (2) and (13) of the Data
Tape Information respecting such
Mortgage Loan is correct; and (iv) each
Mortgage Note has been endorsed as
provided in Section 2.01 of this Agreement.
The Trustee shall not be responsible
to verify the validity, sufficiency or
genuineness of any document in any
Custodial File.
The Trustee shall retain possession and custody of each
Custodial File in accordance with and
subject to the terms and conditions set
forth herein. The Servicer shall promptly
deliver to the Trustee, upon the
execution or receipt thereof, the originals
of such other documents or
instruments constituting the Custodial File
as come into the possession of the
Servicer from time to time.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
RESPONSIBLE PARTY AND THE SERVICER. (a)
Wilshire Credit hereby makes the
representations and warranties set forth in
Schedule II hereto to the Depositor
and the Trustee as of the Closing Date.
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<PAGE>
(b) The
Responsible Party hereby makes the
representations and warranties set forth in
Schedule III and Schedule IV hereto,
to the Depositor, the Servicer and the
Trustee.
(c) It is
understood and agreed by the Servicer and the
Responsible Party that the representations
and warranties set forth in this
Section 2.03 shall survive the transfer of
the Mortgage Loans by the Depositor
to the Trustee, and shall inure to the
benefit of the Depositor, and the Trustee
notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination
or failure to examine any Mortgage
File. Upon discovery by any of the
Responsible Party, the Depositor, the
Trustee, or the Servicer of a breach of any
of the foregoing representations and
warranties, the party discovering such
breach shall give prompt written notice
to the others.
(d) Within 30
days of the earlier of either discovery by
or notice to the Responsible Party that any
Mortgage Loan does not conform to
the requirements as determined in the
Trustee's review of the related Custodial
File or within 60 days of the earlier of
either discovery by or notice to the
Responsible Party of any breach of a
representation or warranty set forth in
Section 2.03(b) that materially and
adversely affects the value of any Mortgage
Loan or the interest of the Trustee or the
Certificateholders therein (without
taking into effect the Mortgage Pool
Insurance Policy), the Responsible Party
shall use its best efforts to cause to be
remedied a material defect in a
document constituting part of a Mortgage
File or promptly to cure such breach in
all material respects and, if such defect
or breach cannot be remedied, the
Responsible Party shall, (i) if such 30 or
60 day period, as applicable, expires
prior to the second anniversary of the
Closing Date, remove such Mortgage Loan
(a "DELETED MORTGAGE LOAN") from the Trust
Fund and substitute in its place a
Substitute Mortgage Loan, in the manner and
subject to the conditions set forth
in this Section 2.03, or (ii) at the
Depositor's option, repurchase such
Mortgage Loan at the Repurchase Price;
PROVIDED, HOWEVER, that any such
substitution pursuant to clause (i) above
shall not be effected prior to the
delivery to the Trustee of the Opinion of
Counsel required by Section 2.04, if
any, and a Request for Release
substantially in the form of Exhibit J, and the
Mortgage File for any such Substitute
Mortgage Loan. In the event that a breach
shall involve any representation or
warranty set forth in Schedule IV, and such
breach cannot be cured within 60 days of
the earlier of either discovery by or
notice to the Responsible Party of such
breach, all of the Mortgage Loans shall,
at the Depositor's option, be repurchased
by the Responsible Party at the
Repurchase Price. Notwithstanding the
foregoing, a breach which causes a
Mortgage Loan not to constitute a
"qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code will be
deemed automatically to materially and
adversely affect the value of such Mortgage
Loan and the interests of the
Trustee and Certificateholders in such
Mortgage Loan. In addition, in the event
the Servicer reasonably determines that
there has been a breach of the
representation and warranty set forth in
clause (47) of Schedule III with
respect to any Mortgage Loan, the
Servicer's obligations with regard to such
Mortgage Loan will be limited to the
acceptance and processing of payments made
thereunder.
(e) With
respect to any Substitute Mortgage Loan or
Loans, the Responsible Party shall deliver
to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the
Mortgage, the related assignment of
the Mortgage, and such other documents and
agreements as are required by Section
2.01, with the Mortgage Note endorsed and
the Mortgage assigned as required by
Section 2.01. No substitution is permitted
to be made in any calendar month
after
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<PAGE>
the Determination Date for such month.
Scheduled Payments due with respect to
Substitute Mortgage Loans in the Due Period
of substitution shall not be part of
the Trust Fund and will be retained by the
Responsible Party on the next
succeeding Distribution Date. For the Due
Period of substitution, distributions
to Certificateholders will include the
Scheduled Payment due on any Deleted
Mortgage Loan for such Due Period and
thereafter the Responsible Party shall be
entitled to retain all amounts received in
respect of such Deleted Mortgage
Loan.
(f) The
Depositor shall, based on information provided by
the Responsible Party, amend the Mortgage
Loan Schedule for the benefit of the
Certificateholders to reflect the removal
of such Deleted Mortgage Loan and the
substitution of the Substitute Mortgage
Loan or Loans and the Depositor shall
deliver the amended Mortgage Loan Schedule
to the Servicer and the Trustee. The
Depositor shall have no liability with
respect to the information provided by
the Responsible Party related to the
Substitute Mortgage Loan. Upon such
substitution, the Substitute Mortgage Loan
or Loans shall be subject to the
terms of this Agreement in all respects,
and the Responsible Party shall be
deemed to have made with respect to such
Substitute Mortgage Loan or Loans, as
of the date of substitution, the
representations and warranties made pursuant to
Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution
and the deposit to the Collection Account
of the amount required to be deposited
therein in connection with such
substitution as described in the following
paragraph, the Trustee shall release the
Mortgage File held for the benefit of
the Certificateholders relating to such
Deleted Mortgage Loan to the Responsible
Party and shall execute and deliver at the
Responsible Party's direction such
instruments of transfer or assignment
prepared by the Responsible Party, in each
case without recourse, as shall be
necessary to vest title in the Responsible
Party, or its designee, the Trustee's
interest in any Deleted Mortgage Loan
substituted for pursuant to this Section
2.03.
(g) For any
month in which the Responsible Party
substitutes one or more Substitute Mortgage
Loans for one or more Deleted
Mortgage Loans, the Depositor will
determine the amount (if any) by which the
aggregate unpaid principal balance of all
such Substitute Mortgage Loans as of
the date of substitution is less than the
aggregate Stated Principal Balance of
all such Deleted Mortgage Loans (after
application of the scheduled principal
portion of the Scheduled Payments due in
the Due Period of substitution). The
amount of such shortage (the "SUBSTITUTION
ADJUSTMENT AMOUNT") plus an amount
equal to the aggregate of any unreimbursed
Advances and Servicing Advances with
respect to such Deleted Mortgage Loans
shall be deposited into the Collection
Account by the Responsible Party on or
before the next Remittance Date.
(h) In
addition to such repurchase obligation, the
Responsible Party shall indemnify the
Depositor, any of its Affiliates, the
Servicer, and the Trustee and hold such
parties harmless against any losses,
damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and
related costs, judgments, and other costs
and expenses resulting from any claim,
demand, defense or assertion based on or
grounded upon, or resulting from, a
breach by the Responsible Party of any of
its representations and warranties
contained in the Purchase Agreement or this
Agreement.
(i) In the
event that a Mortgage Loan shall have been
repurchased pursuant to this Agreement, the
Repurchase Price thereof shall be
deposited in the Collection Account by
the
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Servicer pursuant to Section 3.10 on or
before the next Remittance Date and upon
such deposit of the Repurchase Price, and
receipt of a Request for Release in
the form of Exhibit J hereto, the Trustee
shall release the related Custodial
File held for the benefit of the
Certificateholders to such Person as directed
by the Servicer, and the Trustee shall
execute and deliver at such Person's
direction such instruments of transfer or
assignment prepared by such Person, in
each case without recourse, as shall be
necessary to transfer title from the
Trustee. It is understood and agreed that
the obligation under this Agreement of
any Person to cure, repurchase or replace
any Mortgage Loan as to which a breach
has occurred and is continuing, together
with any related indemnification
obligations, shall constitute the sole
remedy against such Persons respecting
such breach available to
Certificateholders, the Depositor, the Servicer or the
Trustee on their behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the
respective Custodial Files to the
Trustee for the benefit of the
Certificateholders.
Section 2.04 [RESERVED].
Section 2.05 EXECUTION AND DELIVERY OF CERTIFICATES. The
Trustee acknowledges the transfer and
assignment to it of the Trust Fund and,
concurrently with such transfer and
assignment, has executed and delivered to or
upon the order of the Depositor, the
Certificates in authorized denominations
evidencing directly or indirectly the
entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and
exercise the rights referred to above
for the benefit of all present and future
Holders of the Certificates.
Section 2.06 REMIC MATTERS. The Preliminary Statement sets
forth the designations for federal income
tax purposes of all interests created
hereby. The "Start-up Day" for purposes of
the REMIC Provisions shall be the
Closing Date. The "latest possible maturity
date" is the Distribution Date in
December 2034, which is the Distribution
Date following the latest Mortgage Loan
maturity date.
Section 2.07 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents, warrants
and covenants to the Trustee, the
Servicer and the Responsible Party that as
of the date of this Agreement or as
of such date specifically provided
herein:
(a) The
Depositor is a corporation duly organized,
validly existing and in good standing under
the laws of the State of Delaware;
(b) The
Depositor has the corporate power and authority
to convey the Mortgage Loans and to
execute, deliver and perform, and to enter
into and consummate the transactions
contemplated by, this Agreement;
(c) This
Agreement has been duly and validly authorized,
executed and delivered by the Depositor,
all requisite corporate action having
been taken, and, assuming the due
authorization, execution and delivery hereof
by the Servicer, and the Trustee,
constitutes or will constitute the legal,
valid and binding agreement of the
Depositor, enforceable against the
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Depositor in accordance with its terms,
except as such enforcement may be
limited by bankruptcy, insolvency,
reorganization, moratorium or other similar
laws relating to or affecting the rights of
creditors generally, and by general
equity principles (regardless of whether
such enforcement is considered in a
proceeding in equity or at law);
(d) No
consent, approval, authorization or order of or
registration or filing with, or notice to,
any governmental authority or court
is required for the execution, delivery and
performance of or compliance by the
Depositor with this Agreement or the
consummation by the Depositor of any of the
transactions contemplated hereby, except as
have been made on or prior to the
Closing Date;
(e) None of
the execution and delivery of this Agreement,
the consummation of the transactions
contemplated hereby or thereby, or the
fulfillment of or compliance with the terms
and conditions of this Agreement,
(i) conflicts or will conflict with or
results or will result in a breach of, or
constitutes or will constitute a default or
results or will result in an
acceleration under (A) the charter or
bylaws of the Depositor, or (B) of any
term, condition or provision of any
material indenture, deed of trust, contract
or other agreement or instrument to which
the Depositor or any of its
subsidiaries is a party or by which it or
any of its subsidiaries is bound; (ii)
results or will result in a violation of
any law, rule, regulation, order,
judgment or decree applicable to the
Depositor of any court or governmental
authority having jurisdiction over the
Depositor or its subsidiaries; or (iii)
results in the creation or imposition of
any lien, charge or encumbrance which
would have a material adverse effect upon
the Mortgage Loans or any documents or
instruments evidencing or securing the
Mortgage Loans;
(f) There are
no actions, suits or proceedings before or
against or investigations of, the Depositor
pending, or to the knowledge of the
Depositor, threatened, before any court,
administrative agency or other
tribunal, and no notice of any such action,
which, in the Depositor's reasonable
judgment, might materially and adversely
affect the performance by the Depositor
of its obligations under this Agreement, or
the validity or enforceability of
this Agreement;
(g) The
Depositor is not in default with respect to any
order or decree of any court or any order,
regulation or demand of any federal,
state, municipal or governmental agency
that may materially and adversely affect
its performance hereunder; and
(h)
Immediately prior to the transfer and assignment by
the Depositor to the Trustee on the Closing
Date, the Depositor had good title
to, and was the sole owner of each Mortgage
Loan, free of any interest of any
other Person, and the Depositor has
transferred all right, title and interest in
each Mortgage Loan to the Trustee. The
transfer of each Mortgage Note and each
Mortgage as and in the manner contemplated
by this Agreement is sufficient
either (i) fully to transfer to the
Trustee, for the benefit of the
Certificateholders, all right, title, and
interest of the Depositor thereto as
note holder and mortgagee or (ii) to grant
to the Trustee, for the benefit of
the Certificateholders, the security
interest referred to in Section 10.04, and
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It is understood and agreed that the representations,
warranties and covenants set forth in this
Section 2.07 shall survive delivery
of the respective Custodial Files to the
Trustee or to a custodian, as the case
may be, and shall inure to the benefit of
the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 SERVICER TO SERVICE MORTGAGE LOANS. (a) For and
on behalf of the Certificateholders, the
Servicer shall service and administer
the Mortgage Loans in accordance with the
terms of this Agreement, in accordance
with the Radian Guidelines (to the extent
such Radian Guidelines are not
inconsistent with the terms of this
Agreement) and in accordance with the
respective Mortgage Loans and, to the
extent consistent with such terms, in
compliance with all applicable federal,
state and local laws, and in the same
manner in which it services and administers
similar mortgage loans for its own
portfolio, giving due consideration to
customary and usual standards of practice
of mortgage lenders and loan servicers
administering similar mortgage loans but
without regard to:
(i) any
relationship that the Servicer, any Subservicer
or any Affiliate of the Servicer or any Subservicer may have with
the
related Mortgagor;
(ii)
the ownership or non-ownership of any Certificate by
the Servicer or any Affiliate of the Servicer;
(iii) the
Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv)
the amount of the Servicer's or any Subservicer's
compensation for its services hereunder.
To the extent consistent with the foregoing, the Servicer
shall seek to maximize the timely and
complete recovery of principal and
interest on the related Mortgage Notes.
Subject only to the above-described
servicing standards and the terms of this
Agreement and of the respective
Mortgage Loans, the Servicer shall have
full power and authority, acting alone
or through Subservicers as provided in
Section 3.02, to do or cause to be done
any and all things in connection with such
servicing and administration which it
may deem necessary or desirable. Without
limiting the generality of the
foregoing, the Servicer in its own name or
in the name of a Subservicer is
hereby authorized and empowered by the
Trustee when the Servicer believes it
appropriate in its best judgment in
accordance with Accepted Servicing
Practices, to execute and deliver any and
all instruments of satisfaction or
cancellation, or of partial or full release
or discharge, and all other
comparable instruments, with respect to the
related Mortgage Loans and the
Mortgaged Properties and to institute
foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to
convert the ownership of such properties,
and to hold or cause to be held title to
such properties, on behalf of the
Trustee and in the name of the Trust. The
Servicer shall service and administer
the Mortgage Loans in accordance with
applicable state and federal law
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and shall provide to the Mortgagors any
reports required to be provided to them
thereby. Subject to Section 3.16, the
Trustee shall execute, at the written
request of the Servicer, and furnish to the
Servicer and any Subservicer such
documents as are necessary or appropriate
to enable the Servicer or any
Subservicer to carry out their servicing
and administrative duties hereunder,
and the Trustee hereby grants to the
Servicer, and this Agreement shall
constitute, a power of attorney to carry
out such duties including a power of
attorney to take title to Mortgaged
Properties after foreclosure on behalf of
the Trustee and in the name of the Trust.
At the request of the Servicer, the
Trustee shall execute a reasonable number
of powers of attorney in the form
attached hereto as Exhibit Q in favor of
the Servicer for the purposes described
herein to the extent necessary or desirable
to enable the Servicer to perform
its duties hereunder. The Trustee shall not
be liable for the actions of the
Servicer or any Subservicers under such
powers of attorney. If the Servicer
receives any notice of suit, litigation or
proceeding in the name of Deutsche
Bank National Trust Company, then the
Servicer shall promptly forward a copy of
same to the Trustee unless the notice of
said suit, litigation or proceeding was
provided by the Trustee to the
Servicer.
(b) Subject to
Section 3.09(b), in accordance with the
standards of the preceding paragraph, the
Servicer shall advance or cause to be
advanced funds as necessary for the purpose
of effecting the timely payment of
taxes and assessments on the Mortgaged
Properties (to the extent the Servicer
has received reasonable timely notice that
such taxes or assessments have not
been paid by the related Mortgagor or the
owner or the servicer of the related
First Lien Mortgage Loan), which advances
shall be Servicing Advances
reimbursable in the first instance from
related collections from the Mortgagors
pursuant to Section 3.09(b), and further as
provided in Section 3.11. Any cost
incurred by the Servicer or by Subservicers
in effecting the timely payment of
taxes and assessments on a Mortgaged
Property shall not be added to the unpaid
principal balance of the related Mortgage
Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to
the contrary, however, the Servicer need
not may make any future advances with
respect to a Mortgage Loan if the Servicer
makes a good faith determination that
such advance would, if made, constitute a
Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, as set
forth in Section 4.01.
(c) The
Servicer shall not (i) permit any modification
with respect to any Mortgage Loan that
would change the Mortgage Interest Rate,
reduce or increase the principal balance
(except for reductions resulting from
actual payments of principal) or change the
final maturity date on such Mortgage
Loan (except for (A) a reduction of
interest or principal payments resulting
from the application of the Servicemembers
Civil Relief Act or any similar state
statutes or (B) as provided in Section
3.07, if the Mortgagor is in default with
respect to the Mortgage Loan or such
default is, in the judgment of the
Servicer, reasonably foreseeable) or (ii)
permit any modification, waiver or
amendment of any term of any Mortgage Loan
that would both (A) effect an
exchange or reissuance of such Mortgage
Loan under Section 1001 of the Code (or
final, temporary or proposed Treasury
regulations promulgated thereunder) and
(B) cause either Trust REMIC to fail to
qualify as a REMIC under the Code or the
imposition of any tax on "prohibited
transactions" or "contributions after the
start-up day" under the REMIC Provisions,
or (iii) except as provided in Section
3.07(a), waive any Prepayment Premiums.
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(d) The
Servicer may delegate its responsibilities under
this Agreement; PROVIDED, HOWEVER, that no
such delegation shall release the
Servicer from the responsibilities or
liabilities arising under this Agreement.
(e) If the
Mortgage relating to a Mortgage Loan had a
related First Lien Mortgage Loan on the
related Mortgaged Property as of the
Cut-off Date, then the Servicer, in such
capacity, may consent to the
refinancing of the related First Lien
Mortgage Loan, provided that the such
refinancing is consistent with the Radian
Guidelines or, if the Mortgage Pool
Insurer has denied a claim with respect to
the related Mortgage Loan, the
following requirements are met:
(i)
the
resulting Combined Loan-to-Value Ratio of such
Mortgage Loan is no higher than the Combined Loan-to-Value Ratio
prior
to such refinancing;
(ii)
the interest rate, or, in the case of an adjustable
rate related First Lien Mortgage Loan, the maximum interest rate,
for
the loan evidencing the refinanced senior lien is no more than
2.0%
higher than the interest rate or the maximum interest rate, as the
case
may be, on the existing First Lien Mortgage Loan immediately prior
to
the date of such refinancing; and
(iii) the
loan evidencing the refinanced senior lien is not
subject to negative amortization.
Section 3.02 SUBSERVICING AGREEMENTS BETWEEN THE SERVICER AND
SUBSERVICERS. (a) The Servicer may enter
into subservicing agreements with
subservicers (each, a "Subservicer"), for
the servicing and administration of
the Mortgage Loans ("Subservicing
Agreements").
(b) Each
Subservicer shall be (i) authorized to transact
business in the state or states in which
the related Mortgaged Properties it is
to service are situated, if and to the
extent required by applicable law to
enable the Subservicer to perform its
obligations hereunder and under the
Subservicing Agreement, (ii) an institution
approved as a mortgage loan
originator by the Federal Housing
Administration or an institution that has
deposit accounts insured by the FDIC and
(iii) a Freddie Mac or Fannie Mae
approved mortgage servicer. Each
Subservicing Agreement must impose on the
Subservicer requirements conforming to the
provisions set forth in Section 3.08
and provide for servicing of the Mortgage
Loans consistent with the terms of
this Agreement. The Servicer will examine
each Subservicing Agreement and will
be familiar with the terms thereof. The
terms of any Subservicing Agreement will
not be inconsistent with any of the
provisions of this Agreement. The Servicer
and the Subservicers may enter into and
make amendments to the Subservicing
Agreements or enter into different forms of
Subservicing Agreements; provided,
however, that any such amendments or
different forms shall be consistent with
and not violate the provisions of this
Agreement, and that no such amendment or
different form shall be made or entered
into which could be reasonably expected
to be materially adverse to the interests
of the Trustee, without the consent of
the Trustee. Any variation without the
consent of the Trustee from the
provisions set forth in Section 3.08
relating to insurance or
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priority requirements of Subservicing
Accounts, or credits and charges to the
Subservicing Accounts or the timing and
amount of remittances by the
Subservicers to the Servicer, are
conclusively deemed to be inconsistent with
this Agreement and therefore prohibited.
The Servicer shall deliver to the
Trustee and the Depositor copies of all
Subservicing Agreements, and any
amendments or modifications thereof,
promptly upon the Servicer's execution and
delivery of such instruments.
(c) As part of
its servicing activities hereunder, the
Servicer (except as otherwise provided in
the last sentence of this paragraph),
for the benefit of the Trustee, shall
enforce the obligations of each
Subservicer under the related Subservicing
Agreement, including, without
limitation, any obligation to make advances
in respect of delinquent payments as
required by a Subservicing Agreement. Such
enforcement, including, without
limitation, the legal prosecution of
claims, termination of Subservicing
Agreements, and the pursuit of other
appropriate remedies, shall be in such form
and carried out to such an extent and at
such time as the Servicer, in its good
faith business judgment, would require were
it the owner of the related Mortgage
Loans. The Servicer shall pay the costs of
such enforcement at its own expense,
and shall be reimbursed therefor only (i)
from a general recovery resulting from
such enforcement, to the extent, if any,
that such recovery exceeds all amounts
due in respect of the related Mortgage
Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against
the party against whom such
enforcement is directed.
Section 3.03 SUCCESSOR SUBSERVICERS. The Servicer shall be
entitled to terminate any Subservicing
Agreement and the rights and obligations
of any Subservicer pursuant to any
Subservicing Agreement in accordance with the
terms and conditions of such Subservicing
Agreement. In the event of termination
of any Subservicer, all servicing
obligations of such Subservicer shall be
assumed simultaneously by the Servicer
without any act or deed on the part of
such Subservicer or the Servicer, and the
Servicer either shall service directly
the related Mortgage Loans or shall enter
into a Subservicing Agreement with a
successor Subservicer which qualifies under
Section 3.02.
Any Subservicing Agreement shall include the provision that
such agreement may be immediately
terminated by the Depositor or the Trustee
without fee, in accordance with the terms
of this Agreement, in the event that
the Servicer shall, for any reason, no
longer be the Servicer (including
termination due to an Event of
Default).
Section 3.04 LIABILITY OF THE SERVICER. Notwithstanding 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 primarily liable to the
Trustee for the servicing and
administering of the Mortgage Loans in
accordance with the provisions of Section
3.01 without diminution of such obligation
or liability by virtue of such
Subservicing Agreements or arrangements or
by virtue of indemnification from the
Subservicer and to the same extent and
under the same terms and conditions as if
the Servicer alone were servicing and
administering such Mortgage Loans. The
Servicer shall be entitled to enter into
any agreement with a Subservicer for
indemnification of the Servicer by such
Subservicer and nothing contained in
this Agreement shall be deemed to limit or
modify such indemnification.
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Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUBSERVICERS
AND THE TRUSTEE. Any Subservicing Agreement
that may be entered into and any
transactions or services relating to the
Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to
be between the Subservicer and the
Servicer alone, and the Trustee (or any
successor Servicer) shall not be deemed
a party thereto and shall have no claims,
rights, obligations, duties or
liabilities with respect to the Subservicer
except as set forth in Section 3.06.
The Servicer shall be solely liable for all
fees owed by it to any Subservicer,
irrespective of whether the Servicer's
compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 ASSUMPTION OR TERMINATION OF SUBSERVICING
AGREEMENTS BY TRUSTEE. In the event the
Servicer at any time shall for any
reason no longer be the Servicer (including
by reason of the occurrence of an
Event of Default), the Trustee, or its
designee, or the successor Servicer if
the successor Servicer is not the Trustee,
shall thereupon assume all of the
rights and obligations of the Servicer
under each Subservicing Agreement that
the Servicer may have entered into, with
copies thereof provided to the Trustee
prior to the Trustee assuming such rights
and obligations, unless the Trustee
elects to terminate any Subservicing
Agreement in accordance with its terms as
provided in Section 3.03.
Upon such
assumption, the Trustee, its designee or the
successor servicer shall be deemed, subject
to Section 3.03, to have assumed all
of the Servicer's interest therein and to
have replaced the Servicer as a party
to each Subservicing Agreement to which the
predecessor Servicer was a party to
the same extent as if each Subservicing
Agreement had been assigned to the
assuming party, except that (i) the
Servicer shall not thereby be relieved of
any liability or obligations under any
Subservicing Agreement that arose before
it ceased to be the Servicer and (ii) none
of the Depositor, the Trustee, their
designees or any successor to the Servicer
shall be deemed to have assumed any
liability or obligation of the Servicer
that arose before it ceased to be the
Servicer.
The Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all
documents and records relating to
each Subservicing Agreement and the
Mortgage Loans then being serviced by it and
an accounting of amounts collected and held
by or on behalf of it, and otherwise
use its best efforts to effect the orderly
and efficient transfer of the
Subservicing Agreements to the assuming
party.
Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS. (a)
The Servicer shall make reasonable efforts
to collect all payments called for
under the terms and provisions of the
Mortgage Loans and shall, to the extent
such procedures shall be consistent with
this Agreement and the terms and
provisions of any applicable insurance
policies, follow such collection
procedures as it would follow with respect
to mortgage loans comparable to the
Mortgage Loans and held for its own
account. Consistent with the foregoing and
Accepted Servicing Practices, the Servicer
may (i) waive any late payment charge
or, if applicable, any penalty interest, or
(ii) extend the due dates for the
Scheduled Payments due on a Mortgage Note
for a period of not greater than 180
days; provided, that any extension pursuant
to clause (ii) above shall not
affect the amortization schedule of any
Mortgage Loan for purposes of any
computation hereunder, except as provided
below. In the event of any such
arrangement pursuant to clause (ii) above,
the Servicer shall make timely
advances on such Mortgage Loan
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during such extension to the extent
required by Section 4.01 and in accordance
with the amortization schedule of such
Mortgage Loan without modification
thereof by reason of such arrangements,
subject to Section 4.01(d) pursuant to
which the Servicer shall not be required to
make any such advances that are
Nonrecoverable P&I Advances.
Notwithstanding the foregoing, in the event that
any Mortgage Loan is in default or in the
judgment of the applicable Servicer,
such default is reasonably foreseeable, the
Servicer, consistent with the
standards set forth in Section 3.01, may
also waive, modify or vary any term of
such Mortgage Loan (including modifications
that would change the Mortgage
Interest Rate, forgive the payment of
principal or interest, extend the final
maturity date of such Mortgage Loan or
waive, in whole or in part, a Prepayment
Premium), accept payment from the related
Mortgagor of an amount less than the
Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent
to the postponement of strict compliance
with any such term or otherwise grant
indulgence to any Mortgagor (any and all
such waivers, modifications, variances,
forgiveness of principal or interest,
postponements, or indulgences collectively
referred to herein as "Forbearance");
provided, however, that the Servicer's
approval of a modification of a Due Date
shall not be considered a modification
for purposes of this sentence; and
provided, further, that the final maturity
date of any Mortgage Loan may not be
extended beyond the Final Scheduled
Distribution Date for the Offered
Certificates and no such modification will be
granted without the prior consent of the
Mortgage Pool Insurer if so required in
the related Mortgage Pool Insurance Policy.
The Servicer's analysis supporting
any Forbearance and the conclusion that any
Forbearance meets the standards of
Section 3.01 shall be reflected in writing
in the applicable Servicing File or
on the Servicer's servicing records. In
addition, notwithstanding the foregoing,
the Servicer may also waive (or permit a
Subservicer to waive), in whole or in
part, a Prepayment Premium if such waiver
would, in the applicable Servicer's
judgment, maximize recoveries on the
related Mortgage Loan or if such Prepayment
Premium is (i) not permitted to be
collected by applicable law, or the
collection thereof or of a similar type of
prepayment premium would be
considered "predatory" or "illegal"
pursuant to written guidance published by
any applicable federal, state or local
regulatory authority having jurisdiction
over such matters or has been challenged by
any such authority, (ii) there is a
certified class action in which a similar
type of prepayment premium is being
challenged or (iii) the enforceability
thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership or
other similar laws relating to
creditor's rights or (2) due to
acceleration in connection with a foreclosure or
other involuntary payment. If a Prepayment
Premium is waived other than as
permitted in this Section 3.07(a), then the
Servicer is required to pay the
amount of such waived Prepayment Premium,
for the benefit of the Holders of the
Class P Certificates, by depositing such
amount into the Collection Account
together with and at the time that the
amount prepaid on the related Mortgage
Loan is required to be deposited into the
Collection Account; provided, however,
that the Servicer shall not have an
obligation to pay the amount of any
uncollected Prepayment Premium if the
failure to collect such amount is the
direct result of inaccurate or incomplete
information on the Mortgage Loan
Schedule in effect at such time.
(b) The
Servicer shall give notice to the Trustee, each
Rating Agency and the Depositor of any
proposed change of the location of the
Collection Account within a reasonable
period of time prior to any change
thereof.
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Section 3.08 SUBSERVICING ACCOUNTS. In those cases where a
Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement,
the Subservicer will be required to
establish and maintain one or more accounts
(collectively, the "Subservicing Account").
The Subservicing Account shall be an
Eligible Account and shall otherwise be
acceptable to the Servicer. The
Subservicer shall deposit in the clearing
account (which account must be an
Eligible Account) in which it customarily
deposits payments and collections on
mortgage loans in connection with its
mortgage loan servicing activities on a
daily basis, and in no event more than one
Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage
Loans received by the Subservicer less
its servicing compensation to the extent
permitted by the Subservicing
Agreement, and shall thereafter deposit
such amounts in the Subservicing
Account, in no event more than two Business
Days after the deposit of such funds
into the clearing account. The Subservicer
shall thereafter deposit such
proceeds in the Collection Account of the
Servicer or remit such proceeds to the
Servicer for deposit in the Collection
Account not later than two Business Days
after the deposit of such amounts in the
Subservicing Account. For purposes of
this Agreement, the Servicer shall be
deemed to have received payments on the
Mortgage Loans when the Subservicer
receives such payments.
Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS; ESCROW ACCOUNTS. To the extent the
related Mortgage Loan provides for
Escrow Payments, the Servicer shall
establish and maintain, or cause to be
established and maintained, one or more
accounts (the "Escrow Accounts"), which
shall be Eligible Accounts. The Servicer
shall deposit in the clearing account
(which account must be an Eligible Account)
in which it customarily deposits
payments and collections on mortgage loans
in connection with its mortgage loan
servicing activities on a daily basis, and
in no event more than one Business
Day after the Servicer's receipt thereof,
all collections from the Mortgagors
(or related advances from Subservicers) for
the payment of taxes, assessments,
hazard insurance premiums and comparable
items for the account of the Mortgagors
("Escrow Payments") collected on account of
the Mortgage Loans and shall
thereafter deposit such Escrow Payments in
the Escrow Accounts, in no event more
than two Business Days after the deposit of
such funds in the clearing account,
for the purpose of effecting the payment of
any such items as required under the
terms of this Agreement. Withdrawals of
amounts from an Escrow Account may be
made only to (i) effect payment of taxes,
assessments, fire and hazard insurance
premiums, condominium charges and
comparable items; (ii) reimburse the Servicer
(or a Subservicer to the extent provided in
the related Subservicing Agreement)
out of related collections for any advances
made pursuant to Section 3.01 (with
respect to taxes and assessments) and
Section 3.13 (with respect to hazard
insurance); (iii) refund to Mortgagors any
sums as may be determined to be
overages; (iv) apply to the restoration or
repair of the Mortgaged Property in
accordance with the Section 3.13; (v)
transfer to the Collection Account and
application to reduce the principal balance
of the Mortgage Loan in accordance
with the terms of the related Mortgage and
Mortgage Note; (vi) pay interest to
the Servicer and, if required and as
described below, to Mortgagors on balances
in the Escrow Account; (vii) clear and
terminate the Escrow Account at the
termination of the Servicer's obligations
and responsibilities in respect of the
Mortgage Loans under this Agreement; or
(viii) recover amounts deposited in
error or for which amounts previously
deposited are returned due to a "not
sufficient funds" or other denial of
payment by the related Mortgagor's banking
institution. As part of its servicing
duties, the Servicer or Subservicers shall
pay to the Mortgagors interest on funds in
Escrow Accounts, to the extent
required by law
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and, to the extent that interest earned on
funds in the Escrow Accounts is
insufficient, to pay such interest from its
or their own funds, without any
reimbursement therefor. To the extent that
a Mortgage does not provide for
Escrow Payments and provided that the
Servicer has had the later of (i) five (5)
Business Days written notice prior to such
time period and (ii) thirty (30) days
after the Servicer began servicing such
Mortgage Loan prior to such time period,
the Servicer shall advance such taxes to
avoid loss of the Mortgaged Property
(provided that the Servicer has not
determined that such Servicing Advance would
be a Nonrecoverable Servicing Advance). The
Servicer assumes full responsibility
for the payment of all such bills within
such time and shall effect payments of
all such bills irrespective of the
Mortgagor's faithful performance in the
payment of same or the making of the Escrow
Payments and shall make advances
from its own funds to effect such payments;
provided, however, that such
advances are deemed to be Servicing
Advances.
Section 3.10 COLLECTION ACCOUNT. (a) On behalf of the Trustee,
the Servicer shall establish and maintain,
or cause to be established and
maintained, one or more segregated Eligible
Accounts (each such account or
accounts, a "Collection Account"), held in
trust for the benefit of the Trustee.
Funds in the Collection Account shall not
be commingled with any other funds of
the Servicer. On behalf of the Trustee, the
Servicer shall deposit or cause to
be deposited in the clearing account (which
account must be an Eligible Account)
in which it customarily deposits payments
and collections on mortgage loans in
connection with its mortgage loan servicing
activities on a daily basis, and in
no event more than one Business Day after
the Servicer's receipt thereof, and
shall thereafter deposit in the Collection
Account, in no event more than two
Business Days after the deposit of such
funds into the clearing account, as and
when received or as otherwise required
hereunder, the following payments and
collections received or made by it
subsequent to the Cut-off Date (other than in
respect of principal or interest on the
related Mortgage Loans due on or before
the Cut-off Date), or payments (other than
Principal Prepayments) received by it
on or prior to the related Cut-off Date but
allocable to a Due Period subsequent
thereto:
(i) all
payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii)
all payments on account of interest (net of the
Servicing Fee) on each Mortgage Loan;
(iii) all
Insurance Proceeds (other than any proceeds under
the Mortgage Pool Insurance Policy) and Condemnation Proceeds (to
the
extent such Insurance Proceeds and Condemnation Proceeds are not to
be
applied to the restoration of the related Mortgaged Property or
released to the related Mortgagor in accordance with the
express
requirements of law or in accordance with prudent and customary
servicing practices), Net Recoveries and all Liquidation
Proceeds;
(iv)
any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on
Permitted
Investments with respect to funds held in the Collection
Account;
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(v) any
amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.13(a) in respect of
any
blanket policy deductibles;
(vi)
all proceeds of any Mortgage Loan repurchased or
purchased in accordance with this Agreement; and
(vii) all
Prepayment Premiums collected by the Servicer.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being
understood and agreed that, without
limiting the generality of the foregoing,
any Prepayment Interest Excess and
payments in the nature of late payment
charges, NSF fees, reconveyance fees,
assumption fees and other similar fees and
charges need not be deposited by the
Servicer in the Collection Account and
shall, upon collection, belong to the
Servicer as additional compensation for its
servicing activities. In the event
the Servicer shall deposit in the
Collection Account any amount not required to
be deposited therein, it may at any time
withdraw such amount from the
Collection Account, any provision herein to
the contrary notwithstanding.
(b) Funds in
the Collection Account may be invested in
Permitted Investments in accordance with
the provisions set forth in Section
3.12. The Servicer shall give notice to the
Trustee and the Depositor of the
location of the Collection Account
maintained by it when established and prior
to any change thereof.
Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT. (a) The
Servicer shall, from time to time, make
withdrawals from the Collection Account
for any of the following purposes or as
described in Section 4.01:
(i) on or
prior to the Remittance Date, to remit to the
Trustee (A) the Trustee Fee with respect to such Distribution Date
and
(B) all Available Funds in respect of the related Distribution
Date
together with all amounts representing Prepayment Premiums from
the
Mortgage Loans received during the related Prepayment Period;
(ii)
to reimburse the Servicer for P&I Advances, but only
to the extent of amounts received which represent Late Collections
(net
of the related Servicing Fees) of Scheduled Payments on Mortgage
Loans
with respect to which such P&I Advances were made in accordance
with
the provisions of Section 4.01;
(iii) to
pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees (including such unpaid Servicing Fees as provided
in
Section 3.15) or (B) any unreimbursed Servicing Advances with
respect
to each Mortgage Loan serviced by the Servicer, but only to the
extent
of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds,
Insurance Proceeds (including any proceeds under the Mortgage
Pool
Insurance Policy) or other amounts as may be collected by the
Servicer
from a Mortgagor, or otherwise received with respect to such
Mortgage
Loan
(or the related REO Property);
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(iv)
to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Remittance Date any interest
or
investment income earned on funds deposited in the Collection
Account;
(v) to pay the
Responsible Party or the Depositor, as
applicable, with respect to each Mortgage Loan that has previously
been
repurchased or replaced pursuant to this Agreement all amounts
received
thereon subsequent to the date of purchase or substitution, as the
case
may be;
(vi)
to reimburse the Servicer for (A) any P&I Advance or
Servicing Advance previously made which the Servicer has determined
to
be a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance in
accordance with the provisions of Section 4.01 and (B) any
unpaid
Servicing Fees to the extent not recoverable from Liquidation
Proceeds,
Insurance Proceeds (including any proceeds under the Mortgage
Pool
Insurance Policy) or other amounts received with respect to the
related
Mortgage Loan under Section 3.11(a)(iii);
(vii) to
pay, or to reimburse the Servicer for advances in
respect of, expenses incurred in connection with any Mortgage
Loan
serviced by the Servicer pursuant to Section 3.15;
(viii) to
reimburse the Servicer, the Depositor or the
Trustee for expenses incurred by or reimbursable to the Servicer,
the
Depositor or the Trustee, as the case may be, pursuant to Section
6.03,
Section 7.02 or Section 8.05;
(ix)
to reimburse the Servicer or the Trustee, as the case
may be, for expenses reasonably incurred in respect of the breach
or
defect giving rise to the repurchase obligation under Section 2.03
of
this Agreement that were included in the Repurchase Price of
the
Mortgage Loan, including any expenses arising out of the
enforcement of
the repurchase obligation, to the extent not otherwise paid
pursuant to
the terms hereof;
(x) to
withdraw any amounts deposited in the Collection
Account in error or for which amounts previously deposited are
returned
due to a "not sufficient funds" or other denial of payment by
the
related Mortgagor's banking institution;
(xi)
to withdraw any amounts held in the Collection
Account and not required to be remitted to the Trustee on the
Remittance Date occurring in the month in which such amounts
are
deposited into the Collection Account, to reimburse the Servicer
for
unreimbursed P&I Advances;
(xii) to
invest funds in Permitted Investments in
accordance with Section 3.12;
(xiii) to pay
itself any Prepayment Interest Excess (to the
extent deposited in the Collection Account by the Servicer);
and
(xiv) to
clear and terminate the Collection Account upon
termination of this Agreement.
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To the extent that the Servicer does not timely make the
remittance referred to in clause (i) above,
the Servicer shall pay the Trustee
for the account of the Trustee interest on
any amount not timely remitted at the
prime rate, from and including the
applicable Remittance Date to but excluding
the date such remittance is actually
made.
(b) the
Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage
Loan basis, for the purpose of
justifying any withdrawal from the
Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses
(a)(ii), (iii), (iv), (v), (vi), (vii),
(viii) and (ix) above. The Servicer shall
provide written notification to the
Depositor, on or prior to the next
succeeding Remittance Date, upon making any
withdrawals from the related Collection
Account pursuant to subclause (a)(vi)
above.
Section 3.12 INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT AND
THE DISTRIBUTION ACCOUNT. (a) The Servicer
may invest the funds in the
Collection Account and the Trustee may
invest funds in the Distribution Account
during the Trustee Float Period, and shall
(except during the Trustee Float
Period), invest such funds in the
Distribution Account at the direction of the
Depositor (for purposes of this Section
3.12, each of the Collection Account and
the Distribution Accounts are referred to
as an "Investment Account"), in one or
more Permitted Investments bearing interest
or sold at a discount, and maturing,
unless payable on demand, no later than the
Business Day on which such funds are
required to be withdrawn from such account
pursuant to this Agreement (except
for investments made at the Depositor's
direction, which shall mature no later
than the Business Day immediately preceding
the date of required withdrawal).
All such Permitted Investments shall be
held to maturity, unless payable on
demand. Any investment of funds in an
Investment Account shall be made in the
name of the Trustee. The Trustee shall be
entitled to sole possession (except
with respect to investment direction of
funds held in the related Account and
any income and gain realized thereon in any
Account other than the Distribution
Account during the Trustee Float Period)
over each such investment, and any
certificate or other instrument evidencing
any such investment shall be
delivered directly to the Trustee or its
agent, together with any document of
transfer necessary to transfer title to
such investment to the Trustee. In the
event amounts on deposit in an Investment
Account are at any time invested in a
Permitted Investment payable on demand, the
Trustee may:
(x) consistent
with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand
payment of all amounts due thereunder that
such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter
on deposit in the Investment Account.
(b) All income
and gain realized from the investment of
funds deposited in the Collection Account
and Escrow Account held by or on
behalf of the Servicer, shall be for the
benefit of the Servicer and shall be
subject to its withdrawal in the manner set
forth in Section 3.11. Any other
benefit derived from the Collection Account
and Escrow Account
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associated with the receipt, disbursement
and accumulation of principal,
interest, taxes, hazard insurance, mortgage
blanket insurance, and like sources,
shall accrue to the benefit of the
Servicer, except that the Servicer shall not
realize any economic benefit from any
forced charging of services except as
permitted by applicable law. The Servicer
shall deposit in the Collection
Account and Escrow Account the amount of
any loss of principal incurred in
respect of any such Permitted Investment
made with funds in such accounts
immediately upon realization of such
loss.
(c) All income
and gain realized from the investment of
funds deposited in the Distribution Account
held by the Trustee, shall be for
the benefit of the Depositor (except for
any income or gain realized from the
investment of funds on deposit in the
Distribution Account during the Trustee
Float Period, which shall be for the
benefit of the Trustee). The Depositor
shall deposit in the Distribution Account
(except with respect to the Trustee
Float Period, in which case the Trustee
shall deposit) the amount of any loss of
principal incurred in respect of any such
Permitted Investment made with funds
in such accounts immediately upon
realization of such loss.
(d) Except as
otherwise expressly provided in this
Agreement, if any default occurs in the
making of a payment due under any
Permitted Investment, or if a default
occurs in any other performance required
under any Permitted Investment, the Trustee
shall take such action as may be
appropriate to enforce such payment or
performance, including the institution
and prosecution of appropriate
proceedings.
(e) The
Trustee or its Affiliates are permitted to
receive additional compensation that could
be deemed to be in the Trustee's
economic self-interest for (i) serving as
investment adviser, administrator,
shareholder, servicing agent, custodian or
sub-custodian with respect to certain
of the Permitted Investments, (ii) using
Affiliates to effect transactions in
certain Permitted Investments and (iii)
effecting transactions in certain
Permitted Investments.
(f) The
Trustee shall not be liable for the amount of any
loss incurred with respect of any
investment (except that during the Trustee
Float Period, it will be responsible for
reimbursing the Trust for such loss) or
lack of investment of funds held in any
Investment Account or the Distribution
Account if made in accordance with this
Section 3.12.
Section 3.13 MAINTENANCE OF HAZARD INSURANCE, ERRORS AND
OMISSIONS AND FIDELITY COVERAGE. (a) The
Servicer shall obtain and maintain a
blanket policy insuring against losses
arising from fire and hazards covered
under extended coverage on all of the
Mortgage Loans, which policy shall provide
coverage in an amount which is at least
equal to the least of (i) the
outstanding principal balance of such
Mortgage Loan, (ii) the amount necessary
to fully compensate for any damage or loss
to the improvements that are a part
of such property on a replacement cost
basis, (iii) the maximum insurable value
of the improvements which are a part of
such Mortgaged Property, and (iv) the
amount determined by applicable federal or
state law, in each case in an amount
not less than such amount as is necessary
to avoid the application of any
coinsurance clause contained in the related
hazard insurance policy. Any amounts
to be collected by the Servicer under any
such policy (other than amounts to be
applied to the restoration or repair of the
property subject to the related
Mortgage or amounts to be released to
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the Mortgagor in accordance with the
procedures that the Servicer would follow
in servicing loans held for its own
account, subject to the terms and conditions
of the related Mortgage and Mortgage Note)
shall be deposited in the Collection
Account, subject to withdrawal pursuant to
Section 3.11.
In the event that such policy contains a deductible clause,
the Servicer shall, in the event that there
shall not have been maintained on
the related Mortgaged Property or REO
Property a standard hazard insurance
policy and there shall have been one or
more losses which would have been
covered by such policy, the Servicer shall
deposit to the Collection Account
from its own funds the amount above $1,500
that is not otherwise payable under
the blanket policy because of such
deductible clause. In connection with its
activities as administrator and servicer of
the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of
itself, the Trustee claims under any
such blanket policy in a timely fashion in
accordance with the terms of such
policy.
(b) The
Servicer shall keep in force during the term of
this Agreement a policy or policies of
insurance covering errors and omissions
for failure in the performance of the
Servicer's obligations under this
Agreement, which policy or policies shall
be in such form and amount that would
meet the requirements of Fannie Mae or
Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Servicer has
obtained a waiver of such
requirements from Fannie Mae or Freddie
Mac. The Servicer shall also maintain a
fidelity bond in the form and amount that
would meet the requirements of Fannie
Mae or Freddie Mac, unless the Servicer has
obtained a waiver of such
requirements from Fannie Mae or Freddie
Mac. The Servicer shall provide the
Trustee upon request with copies of
insurance certificates for any such
insurance policies and fidelity bond. The
Servicer shall be deemed to have
complied with this provision if an
Affiliate of the Servicer has such errors and
omissions and fidelity bond coverage and,
by the terms of such insurance policy
or fidelity bond, the coverage afforded
thereunder extends to the Servicer. The
Servicer shall provide the Trustee upon
request with copies of insurance
certificates indicating that any such
errors and omissions policy and fidelity
bond shall by its terms not be cancelable
without thirty days' prior written
notice to the Trustee.. The Servicer shall
also cause each Subservicer to
maintain a policy of insurance covering
errors and omissions and a fidelity bond
which would meet such requirements.
Section 3.14 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS. The Servicer will, to the
extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged
Property by any Mortgagor (whether by
absolute conveyance or by contract of sale,
and whether or not the Mortgagor
remains or is to remain liable under the
Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the
maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable
thereto; provided, however, that the
Servicer shall not be required to take such
action if, in its sole business
judgment, the Servicer believes it is not
in the best interests of the Trust
Fund and shall not exercise any such rights
if prohibited by law from doing so.
If the Servicer reasonably believes it is
unable under applicable law to enforce
such "due-on-sale" clause or if any of the
other conditions set forth in the
proviso to the preceding sentence apply,
the Servicer will, with the prior
written consent of the Mortgage Pool
Insurer, enter into an assumption and
modification agreement from or with the
person to whom such property has been
conveyed or is proposed to be conveyed,
pursuant to which such person
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becomes liable under the Mortgage Note,
and, to the extent permitted by
applicable state law, the Mortgagor remains
liable thereon. The Servicer is also
authorized to enter into a substitution of
liability agreement with such person,
pursuant to which the original Mortgagor is
released from liability and such
person is substituted as the Mortgagor and
becomes liable under the Mortgage
Note; provided, that no such substitution
shall be effective unless such person
satisfies the underwriting criteria of the
Servicer and such substitution is in
the best interest of the Certificateholders
as determined by the Servicer. In
connection with any assumption,
modification or substitution, the Servicer shall
apply such underwriting standards and
follow such practices and procedures as
shall be normal and usual in its general
mortgage servicing activities and as it
applies to other mortgage loans owned
solely by it. The Servicer shall not take
or enter into any assumption and
modification agreement, however, unless (to the
extent practicable in the circumstances) it
shall have received confirmation, in
writing, of the continued effectiveness of
any applicable hazard insurance
policy, or a new policy meeting the
requirements of this Section is obtained.
Any fee collected by the Servicer in
respect of an assumption or substitution of
liability agreement will be retained by the
Servicer as additional servicing
compensation. In connection with any such
assumption, no material term of the
Mortgage Note (including but not limited to
the related Mortgage Interest Rate
and the amount of the Scheduled Payment)
may be amended or modified, except as
otherwise required pursuant to the terms
thereof or as otherwise permitted by
this Agreement. The Servicer shall notify
the Trustee that any such
substitution, modification or assumption
agreement has been completed by
forwarding to the Trustee the executed
original of such substitution or
assumption agreement, which document shall
be added to the related Mortgage File
and shall, for all purposes, be considered
a part of such Mortgage File to the
same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not
be deemed to be in default, breach or
any other violation of its obligations
hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by
the terms of the Mortgage Note or any
assumption which the Servicer may be
restricted by law from preventing, for any
reason whatsoever. For purposes of this
Section 3.14, the term "assumption" is
deemed to also include a sale (of the
Mortgaged Property) subject to the
Mortgage that is not accompanied by an
assumption or substitution of liability
agreement.
Section 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a)
The Servicer shall use its commercially
reasonable efforts, consistent with
Accepted Servicing Practices and the
requirements under the Mortgage Pool
Insurance Policy, to foreclose upon or
otherwise comparably convert (which may
include an acquisition of REO Property) the
ownership of properties securing
such of the Mortgage Loans as come into and
continue in default and as to which
no satisfactory arrangements can be made
for collection of delinquent payments
pursuant to Section 3.07, and which are not
released from this Agreement
pursuant to any other provision hereof. The
Servicer shall use reasonable
efforts to realize upon such defaulted
Mortgage Loans if the Servicer believes
there will be a Significant Net Recovery in
such manner as will maximize the
receipt of principal and interest by the
Trustee, taking into account, among
other things, the timing of foreclosure
proceedings. The foregoing is subject to
the provisions that, in any case in which a
Mortgaged Property shall have
suffered damage from an uninsured cause,
the Servicer shall not be required to
expend its own funds toward the restoration
of such property unless it
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shall determine in its sole discretion (i)
that such restoration will increase
the net proceeds of liquidation of the
related Mortgage Loan to the Trustee,
after reimbursement to itself for such
expenses, and (ii) that such expenses
will be recoverable by the Servicer through
Insurance Proceeds (including any
proceeds under the Mortgage Pool Insurance
Policy), Condemnation Proceeds or
Liquidation Proceeds from the related
Mortgaged Property, as contemplated in
Section 3.11. The Servicer shall be
responsible for all other costs and expenses
incurred by it in any such proceedings;
provided, however, that it shall be
entitled to reimbursement thereof from the
related property, as contemplated in
Section 3.11.
In the event that the related First Lien Mortgage Loan is not
being serviced by the Servicer, the
Servicer shall have no liability for any
losses resulting from a foreclosure on a
Mortgage Loan in connection with the
foreclosure on the related First Lien
Mortgage Loan where the Servicer did not
receive notice or otherwise had no actual
knowledge regarding such foreclosure
on the related First Lien Mortgage Loan;
provided, however, if the Servicer is
either notified or has actual knowledge
that any holder of a First Lien Mortgage
Loan intends to accelerate the obligations
secured by the First Lien Mortgage
Loan, or that any such holder intends to
declare a default under the mortgage or
promissory note secured thereby, or has
filed or intends to file an election to
have the related Mortgaged Property sold or
foreclosed, the Servicer shall take,
on behalf of the Trust, whatever actions
are necessary to protect the interests
of the Trust in accordance with Accepted
Servicing Practices and the REMIC
Provisions if the Servicer believes there
will be a Significant Net Recovery.
The Servicer shall not be required to make
a Servicing Advance pursuant to
Section 4.01 with respect thereto except to
the extent that it determines in its
reasonable good faith judgment that such
advance would be recoverable from
Liquidation Proceeds on the related
Mortgage Loan and in no event in an amount
that is greater than the then outstanding
principal balance of the related
Mortgage Loan. The Servicer shall
thereafter take such action as is reasonably
necessary to recover any amount so advanced
and to otherwise reimburse itself as
a Servicing Advance from the Collection
Account pursuant to Section 3.11.
The proceeds of any Liquidation Event, as well as any recovery
resulting from a partial collection of
Insurance Proceeds, Condemnation Proceeds
or Liquidation Proceeds, will be applied in
the following order of priority:
first, to reimburse the Servicer or any
Subservicer for any related unreimbursed
Servicing Advances, pursuant to Section
3.11 or 3.17; second, to reimburse the
Servicer for any related unreimbursed
P&I Advances, pursuant to Section 3.11;
third, to accrued and unpaid interest on
the Mortgage Loan, at the Mortgage
Interest Rate, to the date of the
liquidation, or to the Due Date prior to the
Remittance Date on which such amounts are
to be distributed if not in connection
with a Liquidation Event; and fourth, as a
recovery of principal of the Mortgage
Loan. If the amount of the recovery so
allocated to interest is less than a full
recovery thereof, that amount will be
allocated as follows: first, to unpaid
Servicing Fees; and second, as interest at
the Mortgage Interest Rate (net of
the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the
Servicer or any Subservicer pursuant
to Section 3.11 or 3.17.
The proceeds of any REO Disposition, as well as any income
from an REO Property, will be applied in
the following order of priority: first,
to reimburse the Servicer or any
Subservicer for any related unreimbursed
Servicing Advances, pursuant to Section
3.11 or 3.17;
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second, to unpaid principal on the REO
Property (including the principal portion
of any unreimbursed P&I Advances); and
third, to accrued and unpaid REO Imputed
Interest, at the Mortgage Interest Rate, to
the date of the REO Disposition
(including the interest portion of any
unreimbursed P&I Advances). If the amount
of the recovery so allocated to interest is
less than a full recovery thereof,
that amount will be allocated as follows:
first, to unpaid Servicing Fees; and
second, as interest at the Mortgage
Interest Rate (net of the Servicing Fee
Rate). The portion of the recovery so
allocated to unpaid Servicing Fees shall
be reimbursed to the Servicer or any
Subservicer pursuant to Section 3.11 or
3.17.
The portions of any recovery pursuant to the previous two
paragraphs so allocated to interest at the
Mortgage Interest Rate (net of the
Servicing Fee Rate) and to principal of the
Mortgage Loan shall be applied as
follows: first, to reimburse the Servicer
or any Subservicer for any related
unreimbursed Servicing Advances in
accordance with Section 3.11 or 3.17, and
second, to the Trustee in accordance with
the provisions of Section 4.02,
subject to the last paragraph of Section
3.17 with respect to certain excess
recoveries from an REO Disposition.
(b)
Notwithstanding anything to the contrary contained in
this Agreement, with respect to any
Mortgage Loan that is one hundred twenty
(120) days delinquent, the Servicer shall
obtain a broker's price opinion with
respect to the related Mortgaged Property
and shall use reasonable efforts to
obtain a total indebtedness balance
(including, but not limited to, unpaid
principal, interest, escrows, taxes and
expenses) for any related First Lien
Mortgage Loan. The cost of obtaining any
such broker's price opinion shall be
reimbursable to the Servicer as a Servicing
Advance pursuant to Section
3.11(iii) or (vi). After obtaining the
related broker's price opinion, the
Servicer will determine whether any
Significant Net Recovery is possible through
foreclosure proceedings or other
liquidation of the related Mortgaged Property.
If the Servicer determines that (x) no
Significant Net Recovery is the
commercially reasonable outcome or (y) the
potential Net Recoveries are
anticipated to be an amount, determined by
the Servicer in its good faith
judgment and in light of other mitigating
circumstances, that is insufficient to
warrant proceeding through foreclosure or
other liquidation of the related
Mortgaged Property, it may, at its
discretion, charge off such delinquent
Mortgage Loan in accordance with
subsections (c) and (d) below.
(c) If the
Servicer determines based on the broker's
price opinion obtained under paragraph (b)
above and other relevant
considerations that (x) no Significant Net
Recovery is possible through
foreclosure proceedings or other
liquidation of the related Mortgaged Property
or (y) the potential Net Recoveries are
anticipated to be an amount, determined
by the Servicer in its good faith judgment
and in light of other mitigating
circumstances, that is insufficient to
warrant proceeding through foreclosure or
other liquidation of the related Mortgaged
Property, it will be obligated to
charge off the related Mortgage Loan at the
time such Mortgage Loan becomes 210
days delinquent. Once a Mortgage Loan has
been charged off, the Servicer will
discontinue making P&I Advances, the
Servicer will not be entitled to any
additional servicing compensation (except
as described in subsection (d) of this
Section 3.15), the Charged Off Loan will
give rise to a Realized Loss, and the
Servicer will follow the procedures
described in paragraph (d) below. If the
Servicer determines that (x) a Significant
Net Recovery is the commercially
reasonable outcome through foreclosure
proceedings or other liquidation of the
Mortgaged Property and (y) the potential
Net Recoveries are anticipated to be
64
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an amount, determined by the Servicer in
its good faith judgment and in light of
other mitigating circumstances, that is
sufficient to warrant proceeding through
foreclosure or other liquidation of the
related Mortgaged Property, the Servicer
may continue to make P&I Advances or
Servicing Advances on the related Mortgage
Loan that has become 210 days
delinquent.
(d)
Any
Charged Off Loan may continue to be serviced by
the Servicer for the Certificateholders
using Wilshire Special Servicing. The
Servicer will accrue, but not be entitled
to any Servicing Fees and
reimbursement of expenses in connection
with such Charged Off Loans, except to
the extent of funds available from the
aggregate amount of recoveries on all
Charged Off Loans. Such aggr
