EXECUTION COPY
RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
SERIES SUPPLEMENT,
DATED AS OF NOVEMBER 1, 2005
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
DATED AS OF MAY 1, 2005
Mortgage Pass-Through Certificates
Series 2005-S8
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S>
<C>
ARTICLE I
DEFINITIONS...............................................................4
Section 1.01
Definitions.......................................................4
Section 1.02 Use of
Words and Phrases.........................................13
ARTICLE II
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.............................................................14
Section 2.01 Conveyance
of Mortgage Loans.....................................14
Section 2.02 Acceptance
by Trustee. (See Section 2.02 of the Standard
Terms)...........................................................14
Section 2.03
Representations, Warranties and Covenants of the Master
Servicer and the
Company.........................................14
Section 2.04
Representations and Warranties of Sellers. (See Section 2.04
of the Standard
Terms)...........................................17
Section 2.05 Execution
and Authentication of Certificates.....................17
Section 2.06
[Reserved].......................................................17
Section 2.07
[Reserved].......................................................17
Section 2.08 Purposes
and Powers of the Trust. (See Section 2.08 of the
Standard
Terms)..................................................17
Section 2.09 Agreement
Regarding Ability to Disclose..........................17
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS...........................18
Section 3.01 Master
Servicer to Act as Servicer...............................18
Section 3.02
Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations......................................................19
Section 3.03 Successor
Subservicers. (See Section 3.03 of the Standard
Terms)...........................................................20
Section 3.04 Liability
of the Master Servicer. (See Section 3.04 of the
Standard
Terms)..................................................20
Section 3.05 No
Contractual Relationship Between Subservicer and Trustee
or Certificateholders. (See Section 3.05 of the Standard
Terms)...........................................................20
Section 3.06 Assumption
or Termination of Subservicing Agreements by
Trustee. (See Section 3.06 of the Standard
Terms)................20
Section 3.07 Collection
of Certain Mortgage Loan Payments; Deposits to
Custodial
Account. (See Section 3.07 of the Standard Terms)......20
Section 3.08
Subservicing Accounts; Servicing
Accounts........................20
Section 3.09 Access to
Certain Documentation and Information Regarding
the Mortgage Loans. (See Section 3.09 of the Standard
Terms).....21
Section 3.10 Permitted
Withdrawals from the Custodial Account.................21
Section 3.11
Maintenance of the Primary Insurance Policies; Collections
Thereunder. (See Section 3.11 of the Standard
Terms).............23
Section 3.12
Maintenance of Fire Insurance and Omissions and Fidelity
Coverage. (See Section 3.12 of the Standard
Terms)...............23
Section 3.13
Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments. (See Section
3.13 of the Standard
Terms)......................................23
Section 3.14
Realization Upon Defaulted Mortgage
Loans........................23
Section 3.15 Trustee to
Cooperate; Release of Mortgage Files. (See
Section 3.15 of the Standard
Terms)..............................26
Section 3.16 Servicing
and Other Compensation; Compensating Interest.
(See Section 3.16 of the Standard
Terms).........................26
Section 3.17 Reports to
the Trustee and the Company. (See Section 3.17 of
the Standard
Terms)..............................................26
Section 3.18 Annual
Statement as to Compliance. (See Section 3.18 of the
Standard
Terms)..................................................26
Section 3.19 Annual
Independent Public Accountants' Servicing Report.
(See Section 3.19 of the Standard
Terms).........................26
Section 3.20 Rights of
the Company in Respect of the Master Servicer.
(See Section 3.20 of the Standard
Terms).........................26
Section 3.21
Administration of Buydown Funds. (See Section 3.21 of the
Standard
Terms)..................................................26
Section 3.22 Advance
Facility. (See Section 3.22 of the Standard Terms).......26
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS...........................................27
Section 4.01
Certificate Account. (See Section 4.01 of the Standard
Terms)....27
Section 4.02
Distributions....................................................27
Section 4.03 Statements
to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting. (See Section 4.03 of the
Standard
Terms)..................................................34
Section 4.04
Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer. (See Section 4.04 of the
Standard
Terms)..................................................34
Section 4.05 Allocation
of Realized Losses....................................34
Section 4.06 Reports of
Foreclosures and Abandonment of Mortgaged
Property. (See Section 4.06 of the Standard
Terms)...............36
Section 4.07 Optional
Purchase of Defaulted Mortgage Loans....................36
Section 4.08 Surety
Bond. (See Section 4.08 of the Standard Terms)............36
ARTICLE V
THE
CERTIFICATES.........................................................37
Section 5.01
The
Certificates.................................................37
Section 5.02
Registration of Transfer and Exchange of Certificates. (See
Section 5.02 of the Standard
Terms)..............................38
Section 5.03 Mutilated,
Destroyed, Lost or Stolen Certificates. (See
Section 5.03 of the Standard
Terms)..............................38
Section 5.04 Persons
Deemed Owners. (See Section 5.04 of the Standard
Terms)...........................................................38
Section 5.05
Appointment of Paying Agent. (See Section 5.05 of the
Standard
Terms)..................................................38
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER (See Article VI of the
Standard
Terms)...................................................................39
ARTICLE VII
DEFAULT (See Article VII of the Standard
Terms)..........................40
ARTICLE VIII CONCERNING
THE TRUSTEE (See Article VIII of the Standard
Terms)..........41
ARTICLE IX
TERMINATION..............................................................42
Section 9.01 Optional
Purchase by the Master Servicer of All
Certificates; Termination Upon Purchase by the Master
Servicer or Liquidation of All Mortgage
Loans....................42
Section 9.02 Additional
Termination Requirements. (See Section 9.02 of
the Standard
Terms)..............................................43
Section 9.03
Termination of Multiple REMICs. (See Section 9.03 of the
Standard
Terms)..................................................43
ARTICLE X
REMIC
PROVISIONS.........................................................44
Section 10.01 REMIC
Administration. (See Section 10.01 of the Standard
Terms)...........................................................44
Section 10.02 Master Servicer;
REMIC Administrator and Trustee
Indemnification. (See Section 10.02 of the Standard
Terms).......44
Section 10.03 Designation of
REMIC(s)..........................................44
Section 10.04 Distributions on
the Uncertificated Class A-V REMIC Regular
Interests........................................................44
Section 10.05 Compliance with
Withholding Requirements.........................45
ARTICLE XI
MISCELLANEOUS
PROVISIONS.................................................46
Section 11.01 Amendment. (See
Section 11.01 of the Standard Terms).............46
Section 11.02 Recordation of
Agreement, Counterparts. (See Section 11.02
of the Standard
Terms)...........................................46
Section 11.03 Limitation on
Rights of Certificateholders. (See Section
11.03 of the Standard
Terms).....................................46
Section 11.04 Governing Laws.
(See Section 11.04 of the Standard Terms)........46
Section 11.05
Notices..........................................................46
Section 11.06 Required Notices
to Rating Agency and Subservicer................47
Section 11.07 Severability of
Provisions. (See Section 11.07 of the
Standard
Terms)..................................................47
Section 11.08 Supplemental
Provisions for Resecuritization. (See Section
11.08 of the Standard
Terms).....................................47
Section 11.09 Allocation of
Voting Rights......................................47
Section 11.10 No
Petition......................................................48
<PAGE>
EXHIBITS
Exhibit One: Mortgage
Loan Schedule (Available from the Company upon request.)
Exhibit Two: Schedule
of Discount Fractions (Available from the Company upon
request.)
Exhibit Three: Information to be
Included in Monthly Distribution Date Statement
Exhibit Four: Standard Terms
of Pooling and Servicing Agreement dated as of May 1, 2005
</TABLE>
<PAGE>
This is a Series
Supplement, dated as
of November 1, 2005 (the "Series
Supplement"), to the Standard Terms of
Pooling and Servicing Agreement, dated as
of May 1, 2005 and attached as Exhibit Four hereto
(the "Standard
Terms" and,
together with this Series Supplement,
the "Pooling and
Servicing Agreement"
or
"Agreement"), among RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC., as the
company (together with its permitted
successors and
assigns, the
"Company"),
RESIDENTIAL FUNDING CORPORATION, as master
servicer (together with its permitted
successors and assigns, the "Master Servicer"), and U.S. BANK NATIONAL
ASSOCIATION, as Trustee (together with its
permitted successors and assigns, the
"Trustee").
PRELIMINARY STATEMENT
The Company
intends
to sell Mortgage Pass-Through Certificates
(collectively, the "Certificates"),
to be issued hereunder
in multiple classes,
which in the aggregate will evidence the
entire beneficial ownership interest in
the Trust Fund. As provided herein, the REMIC Administrator will make an
election to treat the entire segregated pool of assets described in the
definition of Trust Fund, and subject to
this Agreement
(including the Mortgage
Loans but excluding the Initial Monthly
Payment Fund), as a real estate mortgage
investment conduit (the "REMIC") for
federal income tax purposes.
The terms and provisions of the Standard Terms are hereby incorporated
by reference herein as though set forth in
full herein. If any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Standard Terms, the terms and provisions of this Series
Supplement shall govern. Any cross-reference to a section of the Pooling
and
Servicing Agreement, to the extent the terms of the
Standard Terms and
Series
Supplement conflict with respect to that
section, shall be a
cross-reference to
the related section of the Series Supplement. All capitalized terms not
otherwise defined herein shall have the meanings set forth in the Standard
Terms. The Pooling and Servicing
Agreement shall be
dated as of the date of the
Series Supplement.
The following table sets forth the designation, type, Pass-Through
Rate,
aggregate Initial Certificate Principal
Balance, Maturity
Date, initial ratings
and certain features for each Class of
Certificates
comprising the interests in
the Trust Fund created hereunder.
<TABLE>
<CAPTION>
AGGREGATE
INITIAL
CERTIFICATE
MOODY'S/
DESIGNATION RATE
BALANCE
FEATURES(1)
DATE
S&P
DENOMINATIONS(2)
<S>
<C>
<C>
<C>
<C>
<C>
<C>
Class A-1 5.50%
$215,038,000.00
Senior/ Fixed Rate November 25, 2035
Aaa/AAA
$100,000.00
Class A-2 5.50%
$53,873,000.00 Senior/ Fixed Rate
November
25, 2035 Aaa/AAA
$100,000.00
Class A-3 5.50%
$29,879,000.00
Senior/Lockout/Fixed November 25, 2035
Aaa/AAA
$100,000.00
Class A-P 0.00%
$1,370,905.68
Senior/Principal Only November 25, 2035
Aaa/AAA
$100,000.00
Class A-V Variable
$0.00
Senior/Interest November 25,
2035
Aaa/AAA
$2,000,000.00
Rate(3)
Only/Variable Rate
Class R
5.50%
$100.00
Senior/Residual/Fixed November 25, 2035
Aaa/AAA (4)
Class M-1 5.50%
$6,246,700.00 Mezzanine/Fixed Rate
November 25,
2035 NA/AA
$100,000.00
Class M-2 5.50%
$2,186,400.00 Mezzanine/Fixed Rate
November 25,
2035 NA/A
$250,000.00
Class M-3 5.50%
$1,249,400.00 Mezzanine/Fixed Rate
November 25,
2035 NA/BBB
$250,000.00
Class B-1 5.50%
$937,100.00 Subordinate/Fixed Rate
November 25, 2035
NA/BB
$250,000.00
Class B-2 5.50%
$937,100.00 Subordinate/Fixed Rate
November 25, 2035
NA/B
$250,000.00
Class B-3 5.50%
$624,754.25 Subordinate/Fixed Rate
November 25, 2035
NA/NA
$250,000.00
</TABLE>
_____________
(1) The
Certificates, other
than the Class B and Class R Certificates shall
be Book-Entry
Certificates. The
Class B Certificates
and the Class R
Certificates shall be delivered to the holders thereof in physical
form.
(2) The
Certificates, other than the Class R Certificates, shall be
issuable
in minimum dollar
denominations
as indicated above (by Certificate
Principal Balance or
Notional Amount, as applicable) and integral
multiples of $1 (or
$1,000 in the case of the Class B-1, Class B-2 and
Class B-3
Certificates) in excess thereof, except that one Certificate
of any of the Class
B-1, Class B-2 and
Class B-3 Certificates that
contain an uneven
multiple of $1,000 shall be issued in a denomination
equal to the sum of the related minimum denomination set forth
above and
such uneven multiple for such Class or the sum of such denomination and
an integral multiple of $1,000.
(3) The initial
Pass-Through Rate on the Class A-V Certificates is 0.2052%.
(4) The Class R
Certificates shall be
issuable in minimum
denominations of
not less than a 20% Percentage Interest; provided, however, that one
Class R Certificate
will be issuable to Residential Funding as "tax
matters person"
pursuant to Section 10.01(c) and (e) in a minimum
denomination representing a Percentage Interest of not less than
0.01%.
<PAGE>
The Mortgage Loans have an aggregate principal balance as of the
Cut-off
Date of $312,342,460.
In consideration of the mutual agreements herein contained, the
Company,
the Master Servicer and the Trustee agree
as follows:
<PAGE>
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 meanings specified in this
Article.
Bankruptcy Amount:
As of any date of
determination prior to
the first
anniversary of the Cut-off Date, an amount
equal to the excess,
if any, of (A)
$100,000 over (B) the aggregate amount of
Bankruptcy Losses
allocated solely to
one or more specific Classes of Certificates in
accordance with Section 4.05 of
this Series Supplement. As of any date of determination on or after the
first
anniversary of the Cut-off Date, an amount
equal to the excess, if any, of
(1) the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most
recent anniversary of the Cut-off Date coinciding with or preceding
such
date of determination (or, if such date of determination is an
anniversary of the Cut-off Date, the Business Day immediately
preceding
such date of
determination)
(for purposes of this definition, the
"Relevant Anniversary") and (b) the greater of
(A) the greater of (i) 0.0006 times the aggregate
principal balance of
all the Mortgage Loans in the Mortgage Pool
as of the Relevant Anniversary (other than Additional Collateral
Loans, if any) having a Loan-to-Value Ratio at origination which
exceeds 75% and (ii) $100,000; and
(B) the greater of (i) the product of (x) an amount equal
to the largest
difference in the related Monthly Payment for any
Non-Primary Residence
Loan remaining in the Mortgage Pool (other
than Additional
Collateral Loans, if
any) which had an original
Loan-to-Value Ratio of
80% or greater that
would result if
the
Net Mortgage
Rate thereof was equal to the weighted average
(based on the principal balance of the Mortgage
Loans as of the
Relevant Anniversary)
of the Net Mortgage
Rates of all Mortgage
Loans as of the Relevant Anniversary less 1.25% per annum,
(y) a
number equal to the weighted average remaining term to maturity,
in months, of all
Non-Primary
Residence Loans
remaining in the
Mortgage Pool as of
the Relevant
Anniversary, and (z)
one plus
the quotient of the
number of all
Non-Primary Residence
Loans
remaining in the
Mortgage Pool divided by the total number of
Outstanding Mortgage
Loans in the Mortgage Pool as of the
Relevant Anniversary, and (ii) $100,000,
over
(2) the aggregate amount of Bankruptcy Losses allocated solely
to
one or more specific
Classes of Certificates in accordance with Section
4.05 since the Relevant Anniversary.
The Bankruptcy
Amount may be further reduced by the Master Servicer
(including accelerating the manner in which
such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i)
obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Business Day:
Any day other than (i)
a Saturday or a Sunday
or (ii) a
day on which banking institutions in the State of New York, the State of
Michigan, the State of California, the State of Illinois or the City of St.
Paul, Minnesota (and such other state or
states in which the Custodial Account
or the Certificate Account are at the time located)
are required or authorized
by law or executive order to be closed.
Certificate: Any Class
A, Class M, Class B or Class R Certificate.
Certificate Account:
The separate account or accounts created and
maintained pursuant to Section 4.01 of the Standard Terms, which shall be
entitled "U.S. Bank National Association, as trustee, in trust for the
registered holders of Residential
Funding Mortgage
Securities I, Inc., Mortgage
Pass-Through Certificates, Series 2005-S8" and which must be an Eligible
Account.
Class A Certificate:
Any one of the Class
A-1, Class A-2,
Class A-3,
Class A-P or Class A-V Certificates, executed by the Trustee and
authenticated
by the Certificate Registrar substantially in the form annexed
to the Standard
Terms as Exhibit A.
Class R Certificate: Any one of the Class R Certificates executed
by the
Trustee and authenticated by the
Certificate Registrar substantially in the form
annexed to the Standard Terms as Exhibit D
and evidencing an interest designated
as a "residual interest" in the REMIC for
purposes of the REMIC Provisions.
Closing Date: November
29, 2005.
Corporate Trust Office: The principal office of the
Trustee at which at
any particular time its corporate trust business
with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at U.S. Bank
National Association, U.S. Bank Corporate
Trust Services, EP-MN-WS3D, 60 Livingston Avenue, St. Paul, Minnesota 55107,
Attention: RFMSI 2005-S8.
Cut-off Date: November
1, 2005.
Determination Date:
With respect to any
Distribution Date, the
second
Business Day prior to such Distribution
Date.
Discount Net Mortgage Rate: 5.50% per annum.
Due Period:
With respect to each Distribution Date and any Mortgage
Loan, the calendar month of such
Distribution Date.
Eligible Account:
An account that is any of the following: (i)
maintained with a depository institution
the debt obligations of which have been
rated by each Rating Agency in its highest
rating available, or
(ii) an account
or accounts in a depository institution in
which such accounts are fully insured
to the limits established by the FDIC,
provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency,
as evidenced in writing,
be maintained such that (as evidenced by an
Opinion of Counsel
delivered to the
Trustee and each Rating Agency) the
registered Holders of
Certificates
have a
claim with respect to the funds in such
account or a perfected
first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository
institution with which such account is
maintained, or (iii) in the case of the
Custodial Account,
a trust account or
accounts maintained in the corporate trust department of U.S. Bank
National
Association, or (iv) in the case of the
Certificate Account, a trust account or
accounts maintained in the corporate
trust division of the
Trustee, or (v) an
account or accounts of a depository
institution acceptable to each Rating Agency
(as evidenced in writing by each
Rating Agency that use
of any such account as
the Custodial Account or the Certificate Account will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the
lower of
the then current rating or the rating
assigned to such
Certificates
as of the
Closing Date by such Rating Agency).
Eligible Funds: On any
Distribution Date, the
portion, if any, of
the
Available Distribution Amount remaining after reduction by the
sum of (i) the
aggregate amount of Accrued Certificate Interest on the Senior
Certificates,
(ii) the Senior Principal Distribution Amount (determined without regard to
Section 4.02(a)(ii)(Y)(D) of this Series Supplement), (iii) the Class A-P
Principal Distribution Amount (determined without regard to Section
4.02(b)(i)(E) of this Series Supplement) and (iv) the aggregate amount of
Accrued Certificate Interest on the Class M, Class B-1 and Class B-2
Certificates.
Fraud Loss Amount:
As of any date of
determination
after the Cut-off
Date, an amount equal to: (X) prior to the first
anniversary
of the Cut-off
Date, an amount equal to 1.00% of the
aggregate outstanding principal balance of
all of the Mortgage Loans as of the Cut-off Date minus
the aggregate amount
of
Fraud Losses allocated solely to one or
more specific Classes of Certificates in
accordance with Section 4.05 of this Series
Supplement since the Cut-off Date up
to such date of determination, (Y) prior to the second anniversary of the
Cut-off Date, an amount equal to 0.66% of
the aggregate
outstanding
principal
balance of all of the Mortgage Loans as of the Cut-off Date minus
the aggregate
amount of Fraud Losses allocated solely to one or more specific Classes of
Certificates in accordance with Section
4.05 of this Series Supplement since the
Cut-off Date up to such date of determination and (Z) from the third to the
fifth anniversary of the Cut-off Date,
an amount equal to (1) the lesser of (a)
the Fraud Loss Amount as of the most recent
anniversary of the
Cut-off Date and
(b) 0.33% of the aggregate outstanding principal balance of
all of the Mortgage
Loans as of the most recent anniversary of the Cut-off Date minus (2) the
aggregate amount of Fraud Losses allocated solely to one or more specific
Classes of Certificates in accordance with Section 4.05 of this Series
Supplement since the most recent
anniversary of the Cut-off Date up to such date
of determination. On and after the fifth
anniversary of the
Cut-off Date, the
Fraud Loss Amount shall be zero.
The Fraud Loss
Amount may be
further reduced by the Master Servicer
(including accelerating the manner in which
such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i)
obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Initial Monthly Payment Fund: $5,157 representing scheduled principal
amortization and interest at the Net Mortgage
Rate during the month of December
2005, for those Mortgage Loans for which the Trustee
will not be entitled
to
receive such payment in accordance
with the definition of "Trust Fund". The
Initial Monthly Payment Fund will not be
part of any REMIC.
Initial Notional
Amount: With respect
to any Class A-V Certificates or
Subclass thereof issued pursuant to Section
5.01(c), the aggregate
Cut-off Date
Principal Balance of the Mortgage
Loans corresponding to the Uncertificated
Class A-V REMIC Regular Interests
represented by such
Class or Subclass on such
date.
Initial Subordinate
Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Certificate Principal Balance of such Class
of Subordinate
Certificates divided
by the aggregate Stated Principal Balance of all the Mortgage Loans
as of the
Cut-off Date as follows:
Class M-1: 2.01%
Class B-1: 0.30%
Class M-2: 0.70%
Class B-2: 0.30%
Class M-3: 0.40%
Class B-3: 0.20%
Interest Accrual
Period: With respect to any Certificates and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
Interest Only Certificates: Any one of the Class A-V
Certificates. The
Interest Only Certificates will have no
Certificate Principal Balance.
Lockout Amount: With
respect to any Distribution Date, an amount equal
to the product of (i) the Lockout
Percentage for that
Distribution Date, (ii) a
fraction, the numerator of which is the
Certificate
Principal Balance of the
Lockout Certificates and the denominator
of which is the Certificate Principal
Balance of all Classes of the Class A
Certificates
(other than the Class A-P
Certificates) and (iii) the aggregate of the
collections
described in
clauses
(A), (B), (C), (D) and (E) (net of amounts
set forth in clause (F)) of Section
4.02(a)(ii)(Y); provided, however, that if the
amount described in clause (iii)
as of any Distribution Date is more than the amount
available for distribution
pursuant to Section 4.02(b)(ii)(b)(1) on that Distribution Date, the Lockout
Amount shall be reduced by an amount equal
to the product of such difference and
the fraction described in clause (ii)
above.
Lockout Certificates:
The Class A-3 Certificates.
Lockout Percentage:
For any Distribution Date occurring prior to the
Distribution Date in December 2010, 0%. For any Distribution Date occurring
after the first five years following the Closing Date, a
percentage
determined
as follows: (i) for any Distribution Date during the sixth year after the
Closing Date, 30%; (ii) for any
Distribution Date
during the seventh year after
the Closing Date, 40%; (iii) for any Distribution Date during the eighth year
after the Closing Date, 60%; (iv) for any Distribution Date during the ninth
year after the Closing Date, 80%; and (v)
for any Distribution
Date thereafter,
100%.
Maturity Date: With respect to each Class of Certificates,
November 25,
2035, the Distribution Date in the month immediately following the latest
scheduled maturity date of any Mortgage
Loan.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans
attached
hereto as Exhibit One (as amended
from time to time to
reflect the addition
of
Qualified Substitute Mortgage Loans), which list or lists shall set
forth the
following information as to each Mortgage
Loan:
(a) the
Mortgage Loan identifying number ("RFC LOAN #");
(b) the
maturity of the Mortgage Note ("MATURITY DATE");
(c) the
Mortgage Rate ("ORIG RATE");
(d) the
Subservicer pass-through rate ("CURR NET");
(e) the
Net Mortgage Rate ("NET MTG RT");
(f) the
Pool Strip Rate ("STRIP");
(g) the
initial scheduled
monthly payment of principal, if any,
and interest
("ORIGINAL P & I");
(h) the
Cut-off Date Principal
Balance ("PRINCIPAL
BAL"); (i) the
Loan-to-Value Ratio at origination ("LTV");
(j) the
rate at which the
Subservicing Fee
accrues ("SUBSERV
FEE")
and at which the Servicing Fee accrues ("MSTR SERV FEE");
(k) a
code "T," "BT" or "CT" under the column "LN FEATURE,"
indicating that the
Mortgage Loan is secured by a second or
vacation residence; and
(l) a code
"N" under the column
"OCCP CODE," indicating that the
Mortgage Loan is secured by a non-owner occupied residence.
Such schedule may consist of multiple
reports that collectively set forth all of
the information required.
Non-Discount Mortgage
Loan: The mortgage
loans other than the Discount
Mortgage Loans.
Notional Amount: As of
any Distribution Date
with respect to any Class
A-V Certificates, an amount equal to the aggregate
Stated Principal Balance of
the Mortgage Loans as of the day
immediately preceding
such Distribution
Date
(or, with respect to the initial
Distribution Date, at
the close of business on
the Cut-off Date). For federal income tax
purposes, as of any Distribution Date,
with respect to any Class A-V Certificates or Subclass
thereof issued
pursuant
to Section 5.01(c), the aggregate Stated
Principal Balance of the Mortgage Loans
corresponding to the Uncertificated Class A-V REMIC Regular Interests
represented by such Class or Subclass as of
the day immediately
preceding such
Distribution Date (or, with respect to the initial
Distribution
Date, at the
close of business on the Cut-off Date).
Pass-Through Rate: With respect to the Class A Certificates
(other than
the Class A-V Certificates and Principal Only Certificates), Class M
Certificates, Class B Certificates and
Class R Certificates and any Distribution
Date, the per annum rates set forth in the
Preliminary Statement
hereto. With
respect to the Class A-V Certificates
(other than any
Subclass thereof) and any
Distribution Date, a rate equal to the weighted average, expressed as a
percentage, of the Pool Strip Rates of all
Mortgage Loans as of the Due Date in
the related Due Period, weighted on the
basis of the respective Stated Principal
Balances of such Mortgage Loans as of the day immediately preceding such
Distribution Date (or, with respect to the initial
Distribution
Date, at the
close of business on the Cut-Off Date). With respect to the Class A-V
Certificates and the initial Distribution Date, the Pass-Through Rate is
equal
to 0.2052% per annum. With respect to any
Subclass of Class A-V Certificates and
any Distribution Date, a rate equal to the weighted
average, expressed as a
percentage, of the Pool Strip Rates of all
Mortgage Loans
corresponding to the
Uncertificated Class A-V REMIC Regular
Interests represented by such Subclass as
of the Due Date in the related Due Period, weighted on the basis of the
respective Stated Principal Balances of such Mortgage Loans as of the day
immediately preceding such Distribution Date (or with respect to the
initial
Distribution Date, at the close of business on
the Cut-Off Date). The Principal
Only Certificates have no Pass-Through Rate and are not entitled to Accrued
Certificate Interest.
Pool Strip Rate: With
respect to each
Mortgage Loan, a per
annum rate
equal to the excess of (a) the Net Mortgage
Rate of such Mortgage
Loan over (b)
the Discount Net Mortgage Rate (but not
less than 0.00%) per annum.
Prepayment Assumption: A prepayment assumption of 300% of the
prepayment
speed assumption, used for determining the accrual of
original issue discount
and market discount and premium on the Certificates for federal income tax
purposes. The prepayment speed assumption
assumes a constant rate of prepayment
of mortgage loans of 0.2% per annum of the
then outstanding principal balance of
such mortgage loans in the first month of the life of the mortgage loans,
increasing by an additional 0.2% per annum in each
succeeding
month until the
thirtieth month, and a constant 6% per annum rate
of prepayment
thereafter for
the life of the mortgage loans.
Prepayment
Distribution
Percentage: With
respect to any
Distribution
Date and each Class of Subordinate Certificates, under the applicable
circumstances set forth below, the
respective percentages set forth below:
(i) For
any Distribution
Date prior to the Distribution Date in
December 2010 (unless the Certificate Principal Balances of the
Senior Certificates
(other than the Class A-P Certificates) have
been reduced to zero), 0%.
(ii) For any
Distribution
Date for which
clause (i) above does not
apply, and on which
any Class of
Subordinate
Certificates
is
outstanding with a
Certificate Principal
Balance greater than
zero:
(a) in the case of the Class of Subordinate Certificates
then outstanding
with the Highest
Priority and each other Class
of Subordinate
Certificates
for which the
related Prepayment
Distribution Trigger has been satisfied, a fraction, expressed
as
a percentage, the numerator of which is the Certificate
Principal
Balance of such
Class immediately prior to such date and the
denominator of
which is the sum of the Certificate Principal
Balances immediately
prior to such date of (1) the Class of
Subordinate
Certificates then
outstanding
with the Highest
Priority and (2) all other Classes of Subordinate Certificates
for which the respective Prepayment Distribution Triggers have
been satisfied; and
(b) in the
case of each other Class of Subordinate
Certificates for which the Prepayment Distribution Triggers have
not been satisfied, 0%; and
(iii) Notwithstanding
the foregoing, if the application of the
foregoing percentages
on any Distribution Date as provided in
Section 4.02 of this Series Supplement (determined without
regard
to the proviso to the definition of "Subordinate Principal
Distribution Amount")
would result in a distribution in respect
of principal of any Class or Classes of Subordinate Certificates
in an amount greater
than the remaining
Certificate
Principal
Balance thereof (any such class, a "Maturing Class"), then: (a)
the Prepayment
Distribution
Percentage of each
Maturing Class
shall be reduced to a
level that,
when applied as described
above, would exactly reduce the Certificate Principal Balance of
such Class to zero; (b) the Prepayment Distribution Percentage
of
each other Class of Subordinate Certificates (any such Class, a
"Non-Maturing Class")
shall be recalculated
in accordance with
the provisions in
paragraph (ii) above,
as if the Certificate
Principal Balance of each Maturing Class had been reduced to
zero
(such percentage as recalculated, the "Recalculated
Percentage");
(c) the total amount of the reductions in the Prepayment
Distribution
Percentages of
the Maturing Class or Classes
pursuant to
clause (a) of this sentence, expressed as an
aggregate percentage,
shall be allocated
among the Non-Maturing
Classes in
proportion
to their respective Recalculated
Percentages (the portion of such aggregate reduction so
allocated
to any Non-Maturing Class, the "Adjustment Percentage");
and (d)
for purposes
of such Distribution Date, the Prepayment
Distribution Percentage of each Non-Maturing Class shall be
equal
to the sum of (1) the Prepayment Distribution Percentage
thereof,
calculated in accordance with the provisions in paragraph
(ii)
above as if the
Certificate Principal
Balance of each
Maturing
Class had not
been reduced to zero, plus (2) the related
Adjustment Percentage.
Principal Only Certificates: Any one of the Class A-P
Certificates.
Record Date: With
respect to each
Distribution Date and
each Class of
Certificates, the close of business on the last
business day of the
month next
preceding the month in which the related
Distribution Date occurs.
Senior Certificate:
Any one of the
Class A Certificates or Class R
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed to the
Standard Terms as Exhibit A
and Exhibit D, respectively.
Senior Interest Distribution Amount: As defined in Section
4.02(a)(i).
Senior
Percentage: As of any Distribution Date, the lesser of 100% and
a
fraction, expressed as a percentage, the numerator of which is the
aggregate
Certificate Principal Balance of the Senior
Certificates (other
than the Class
A-P Certificates) immediately prior to such Distribution Date and the
denominator of which is the aggregate
Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties) (other than the related
Discount
Fraction of each Discount Mortgage Loan) immediately prior
to such Distribution
Date.
Senior Principal
Distribution Amount:
As to any Distribution Date, the
lesser of (a) the balance of the Available
Distribution
Amount remaining
after
the distribution of all amounts
required to be
distributed pursuant
to Section
4.02(a)(i), Section 4.02(a)(ii)(X) (or, on
or after the Credit Support Depletion
Date, the amount required to be distributed
to the Class A-P
Certificateholders
pursuant to Section 4.02(c)) and (b) the sum of the
amounts required to be
distributed to the Senior Certificateholders on such
Distribution Date pursuant
to Section 4.02(a)(ii)(Y).
Special Hazard Amount:
As of any Distribution
Date, an amount equal to
$3,123,425 minus the sum of (i) the aggregate
amount of Special
Hazard Losses
allocated solely to one or more specific
Classes of
Certificates in accordance
with Section 4.05 of this Series
Supplement and (ii)
the Adjustment Amount
(as
defined below) as most recently calculated.
For each anniversary
of the Cut-off
Date, the Adjustment Amount shall be equal to the
amount, if any, by
which the
amount calculated in accordance
with the preceding
sentence (without giving
effect to the deduction of the Adjustment
Amount for such
anniversary)
exceeds
the greater of (A) the greatest of (i)
twice the outstanding
principal balance
of the Mortgage Loan in the Trust Fund which has the largest outstanding
principal balance on the Distribution Date immediately preceding such
anniversary, (ii) the product of 1.00%
multiplied by the outstanding principal
balance of all Mortgage Loans on the
Distribution
Date immediately preceding
such anniversary and (iii) the aggregate
outstanding
principal balance (as of
the immediately preceding Distribution
Date) of the Mortgage Loans in any single
five-digit California zip code area with
the largest amount of Mortgage Loans by
aggregate principal balance as of such anniversary and (B) the greater of
(i)
the product of 0.50% multiplied by the outstanding principal balance of all
Mortgage Loans on the Distribution
Date immediately
preceding such
anniversary
multiplied by a fraction, the numerator of which is equal to the
aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of all of the Mortgage Loans secured by Mortgaged
Properties
located in
the State of California divided by the
aggregate outstanding
principal balance
(as of the immediately preceding Distribution Date) of all of the Mortgage
Loans, expressed as a percentage, and the
denominator of which is equal to 31.1%
(which percentage is equal to the
percentage of Mortgage Loans initially secured
by Mortgaged Properties located in the State of California) and (ii) the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the largest Mortgage Loan
secured by a Mortgaged Property
located in the State of California.
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which
coverage is reduced)
provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Subordinate
Principal
Distribution
Amount: With
respect to any
Distribution Date and each Class of
Subordinate Certificates, (a) the sum of (i)
the product of (x) the related Subordinate Class Percentage for such Class
and
(y) the aggregate of the amounts
calculated
for such Distribution Date under
clauses (1), (2) and (3) of Section
4.02(a)(ii)(Y)(A) of
this Series Supplement
(without giving effect to the Senior
Percentage)
to the extent not
payable to
the Senior Certificates; (ii) such Class's pro rata share, based on the
Certificate Principal Balance of each Class of
Subordinate
Certificates then
outstanding, of the principal collections
described
in Section
4.02(a)(ii)(Y)(B)(b) of this Series Supplement (without giving effect to the
Senior Accelerated Distribution Percentage) to the extent such
collections are
not otherwise distributed to the Senior
Certificates; (iii)
the product of (x)
the related Prepayment Distribution Percentage and (y) the aggregate of all
Principal Prepayments in Full received in the related
Prepayment
Period and
Curtailments received in the preceding
calendar month (other than the related
Discount Fraction of such Principal
Prepayments in Full
and Curtailments
with
respect to a Discount Mortgage Loan) to the extent not
payable to the
Senior
Certificates; (iv) if such Class is the Class of
Subordinate
Certificates with
the Highest Priority, any Excess Subordinate Principal Amount for such
Distribution Date; and (v) any amounts
described in clauses (i), (ii) and (iii)
as determined for any previous Distribution Date, that remain
undistributed to
the extent that such amounts are not
attributable to
Realized Losses which have
been allocated to a Class of Subordinate
Certificates
minus (b) the sum of
(i)
with respect to the Class of Subordinate
Certificates with the
Lowest Priority,
any Excess Subordinate Principal Amount for
such Distribution Date; and (ii) the
Capitalization Reimbursement Amount for such Distribution Date,
other than the
related Discount Fraction of any portion of
that amount related to each Discount
Mortgage Loan, multiplied by a fraction, the numerator of which is the
Subordinate Principal Distribution Amount for such Class of Subordinate
Certificates, without giving effect to this
clause (b)(ii), and the denominator
of which is the sum of the principal distribution amounts for all Classes of
Certificates other than the Class A-P
Certificates, without giving effect to any
reductions for the Capitalization
Reimbursement Amount.
Trust Fund: The
segregated pool of assets consisting of:
(i) the
Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all
payments on and
collections in respect of the Mortgage Loans
due after the Cut-off
Date (other than
Monthly Payments due
in
the month of the
Cut-off Date) as shall be on deposit in the
Custodial Account or in the Certificate Account and identified
as
belonging to the Trust Fund but not including amounts on deposit
in the Initial Monthly Payment Fund,
(iii) property
that secured a
Mortgage Loan and that has been acquired
for the benefit of the
Certificateholders by foreclosure or deed
in lieu of foreclosure,
(vi) the hazard
insurance policies and Primary Insurance Policies, if
any,
(vii) the Initial
Monthly Payment Fund, and
(viii) all proceeds of clauses (i) through (vii) above.
Uncertificated Accrued Interest: With respect to each Distribution
Date,
as to each Uncertificated Class A-V REMIC Regular Interest,
an amount equal to
the aggregate amount of Accrued Certificate
Interest that would result under the
terms of the definition thereof on each such uncertificated interest, if the
Pass-Through Rate on such uncertificated interest were equal to the related
Uncertificated Class A-V REMIC Pass-Through
Rate and the notional amount of such
uncertificated interest were equal to the
related Uncertificated Class A-V REMIC
Notional Amount, and any reduction in the
amount of Accrued Certificate Interest
resulting from the allocation of Prepayment
Interest Shortfalls, Realized Losses
or other amounts to the Class A-V
Certificateholders
pursuant to Section
4.05
hereof shall be allocated to the Uncertificated Class A-V REMIC Regular
Interests pro rata in accordance with the amount of interest accrued with
respect to each related Uncertificated REMIC Notional Amount and such
Distribution Date.
Uncertificated
Class A-V REMIC
Notional Amount: With respect to each
Uncertificated Class A-V REMIC Regular
Interest, the Stated Principal Balance of
the related Mortgage Loan.
Uncertificated Class
A-V REMIC Pass-Through
Rate: With respect to each
Uncertificated Class A-V REMIC Regular Interest,
a per annum rate equal
to the
Pool Strip Rate with respect to the related
Mortgage Loan.
Uncertificated Class
A-V REMIC Regular Interest Distribution Amounts:
With respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated Class A-V REMIC Regular
Interests for such
Distribution Date pursuant to Section
4.08(a).
Uncertificated Class A-V REMIC Regular Interests: The 592
uncertificated
partial undivided beneficial ownership interests in the Trust Fund,
numbered
sequentially, each relating to the particular Non-Discount Mortgage Loan
identified by sequential number on the Mortgage Loan
Schedule, each having no
principal balance, and each bearing interest at the
respective Pool Strip Rate
on the Stated Principal Balance of the
related Mortgage Loan.
Section 1.02 Use of Words and
Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter"
and other equivalent words refer to the Pooling and
Servicing Agreement as a
whole. All references herein to Articles,
Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and
Servicing
Agreement. The definitions set forth herein include both the
singular and the
plural.
<PAGE>
ARTICLE II
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage
Loans.
(a) The Company, concurrently with the execution and delivery hereof, does
hereby assign to the Trustee without
recourse all the right, title and interest
of the Company in and to the Mortgage Loans, including all interest and
principal received on or with respect to the
Mortgage Loans after the Cut-off
Date (other than payments of principal and
interest due on the Mortgage Loans in
the month of the Cut-off Date). The
Company, the Master Servicer and the Trustee
agree that it is not intended that any mortgage loan be included in the Trust
that is (i) a "High-Cost Home Loan" as defined in the New
Jersey Home Ownership
Security Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan
Protection
Act effective
January 1, 2004,
(iii) a "High Cost Home Mortgage Loan" as
defined in the Massachusetts Predatory
Home Loan Practices Act effective November 7, 2004 or (iv) a
"High-Cost Home
Loan" as defined in the Indiana
House Enrolled Act No. 1229, effective as of
January 1, 2005.
(b) - (h) (See Section 2.01(b) - (h) of the Standard Terms)
Section 2.02 Acceptance by Trustee. (See
Section 2.02 of the Standard Terms)
Section 2.03 Representations, Warranties and Covenants of the
Master Servicer
and the Company.
(a) For representations, warranties and covenants of the
Master Servicer,
see Section 2.03(a) of the Standard Terms.
(b) The Company hereby represents and warrants to the Trustee for the
benefit of
Certificateholders
that as of the
Closing Date (or, if
otherwise specified below, as of the date so specified):
(i) No Mortgage
Loan is 30 or more
days Delinquent in
payment of principal
and interest
as of the Cut-off
Date and no Mortgage
Loan has been so
Delinquent more than
once in the 12-month
period prior to the
Cut-off
Date;
(ii) The information set forth in Exhibit One hereto
with respect to each
Mortgage Loan or the Mortgage Loans, as the case may be, is true
and
correct in all material respects at the date or dates
respecting which
such information is furnished;
(iii) The Mortgage Loans are fully-amortizing (subject to interest only
periods, if
applicable),
fixed-rate mortgage
loans with level Monthly
Payments due, with respect to a majority of the Mortgage
Loans, on the
first day of each
month and terms to maturity at origination or
modification of not more than 30 years;
(iv) To the best of the
Company's knowledge, if a Mortgage Loan is secured by
a Mortgaged Property with a Loan-to-Value Ratio at origination in
excess
of 80%, such Mortgage Loan is the subject of a Primary Insurance Policy
that insures that (a)
at least 30% of the Stated Principal Balance of
the Mortgage Loan at origination if the Loan-to-Value Ratio is between
95.00% and 90.01%, (b) at least 25% of such balance if the
Loan-to-Value
Ratio is between 90.00% and 85.01%, and (c) at least 12% of such
balance
if the Loan-to-Value
Ratio is between 85.00% and 80.01%. To the best of
the Company's
knowledge, each such
Primary Insurance Policy is in full
force and effect and the Trustee is entitled to the benefits
thereunder;
(v) The issuers of
the Primary Insurance
Policies are insurance
companies
whose claims-paying
abilities are
currently acceptable
to each Rating
Agency;
(vi) No more than 0.9% of the Mortgage Loans by aggregate Cut-off Date
Principal Balance are secured by Mortgaged Properties located in
any one
zip code area in the
District of Columbia
and no more than 0.8% of the
Mortgage Loans by aggregate Cut-off Date Principal
Balance are
secured
by Mortgaged
Properties
located in any one zip
code area outside
the
District of Columbia;
(vii) The improvements upon the
Mortgaged Properties
are insured against loss
by fire and other
hazards as required by the Program Guide, including
flood insurance if
required under the National Flood Insurance Act of
1968, as amended. The
Mortgage requires the
Mortgagor to maintain such
casualty insurance at
the Mortgagor's
expense, and on the
Mortgagor's
failure to do so,
authorizes the holder
of the Mortgage to
obtain and
maintain such
insurance at the Mortgagor's expense and to seek
reimbursement therefor from the Mortgagor;
(viii) Immediately prior to the assignment of the Mortgage Loans to the
Trustee, the Company
had good title to, and was the sole owner of, each
Mortgage Loan
free and clear of any pledge, lien, encumbrance or
security
interest (other
than rights to servicing and related
compensation) and such
assignment validly
transfers ownership of the
Mortgage Loans to the
Trustee free and clear of any pledge, lien,
encumbrance or security interest;
(ix) No more than
25.3% of the
Mortgage Loans by aggregate Cut-off Date
Principal Balance were underwritten under a reduced loan documentation
program;
(x) Each Mortgagor represented in its loan
application with
respect to the
related Mortgage
Loan
that
the Mortgaged Property would be
owner-occupied and therefore would not be an investor property as
of the
date of origination of such Mortgage Loan. No Mortgagor is a
corporation
or a partnership;
(xi) None of the Mortgage
Loans is a Buydown Mortgage Loan;
(xii) Each Mortgage Loan constitutes a qualified mortgage under Section
860G(a)(3)(A) of
the Code and Treasury Regulations Section
1.860G-2(a)(1);
(xiii) A policy of title insurance was effective as of the closing of each
Mortgage Loan and is
valid and binding
and remains in full force and
effect, unless the Mortgaged Properties are located in the State of
Iowa
and an attorney's
certificate
has been provided as described in the
Program Guide;
(xiv) Except with respect to 2 Mortgage Loans, no Mortgage Loan is a
Cooperative Loan;
(xv) With respect to each
Mortgage Loan originated under a "streamlined"
Mortgage Loan program
(through which no new or updated
appraisals of
Mortgaged Properties
are obtained in
connection with the
refinancing
thereof), the related
Seller has represented
that either (a) the value
of the related
Mortgaged Property as
of the date the Mortgage Loan was
originated was not less than the appraised value of such property
at the
time of origination of the refinanced Mortgage Loan or (b) the
Loan-to-Value Ratio of
the Mortgage Loan as of the date of origination
of the Mortgage Loan generally meets the Company's underwriting
guidelines;
(xvi) Interest on each
Mortgage Loan is calculated on the basis of
a 360-day
year consisting of twelve 30-day months;
(xvii) None of the Mortgage Loans contains in the related Mortgage File a
Destroyed Mortgage Note; and
(xviii) None of the Mortgage Loans are Pledged Asset Loans or Additional
Collateral Loans.
It is understood and agreed that the
representations and warranties set forth in
this Section 2.03(b) shall survive delivery
of the respective
Mortgage Files to
the Trustee or any Custodian.
Upon discovery by any of the Company, the Master Servicer,
the Trustee,
or any Custodian of a breach of any of the
representations
and warranties set
forth in this Section 2.03(b) that materially and adversely affects the
interests of the Certificateholders in any Mortgage
Loan, the party discovering
such breach shall give prompt written
notice to the other parties (any Custodian
being so obligated under a Custodial
Agreement); provided,
however, that in the
event of a breach of the representation and warranty set forth in Section
2.03(b)(xii), the party discovering such breach shall give such notice
within
five days of discovery. Within 90 days of
its discovery or its receipt of notice
of breach, the Company shall either (i) cure such breach in all material
respects or (ii) purchase such Mortgage
Loan from the Trust Fund at the Purchase
Price and in the manner set forth in
Section 2.02;
provided that the Company
shall have the option to substitute a Qualified Substitute Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the omission or
defect would cause
the Mortgage Loan to be other than a
"qualified mortgage"
as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. Any such substitution shall be
effected by the Company under the same terms and
conditions
as provided in
Section 2.04 for substitutions by Residential Funding. It is understood and
agreed that the obligation of the Company to cure
such breach or to so purchase
or substitute for any Mortgage Loan as to which
such a breach has occurred and
is continuing shall constitute the sole
remedy respecting such
breach available
to the Certificateholders or the Trustee on behalf of the
Certificateholders.
Notwithstanding the foregoing, the Company shall not be required to cure
breaches or purchase or substitute for Mortgage Loans as provided in this
Section 2.03(b) if the substance of the breach of a
representation
set forth
above also constitutes fraud in the
origination of the Mortgage Loan.
Section 2.04 Representations and Warranties
of Sellers. (See Section 2.04 of the
Standard Terms)
Section 2.05 Execution and Authentication
of Certificates.
The Trustee
acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Mortgage Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together
with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby
acknowledged.
Concurrently with such delivery and in
exchange therefor, the Trustee, pursuant
to the written request of the Company
executed by an officer
of the Company has
executed and caused to be authenticated and delivered to or upon the order
of
the Company the Certificates in authorized denominations which evidence
ownership of the entire Trust Fund.
Section 2.06 [Reserved].
Section 2.07 [Reserved].
Section 2.08 Purposes and Powers of the
Trust. (See Section 2.08 of the Standard
Terms).
Section 2.09 Agreement Regarding Ability to
Disclose.
The Company,
the Master Servicer and the Trustee hereby agree,
notwithstanding any other express or
implied agreement to the contrary, that any
and all Persons, and any of their respective
employees,
representatives,
and
other agents may disclose, immediately upon commencement of
discussions, to any
and all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind
(including
opinions
or other tax analyses) that are provided to any of them
relating to such
tax
treatment and tax structure. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" are defined under Treasury Regulation ss.
1.6011-4(c).
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as
Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement
and the respective
Mortgage Loans,
following such procedures as it would
employ in its good faith business judgment
and which are normal and usual in its
general mortgage servicing activities, and
in the case of the Mortgage Loans being
subserviced by Wells Fargo, if any, such
procedures that comply with applicable
federal, state and local law and that are
in accordance with accepted mortgage servicing practices of prudent mortgage
lending institutions which service loans
of the same type as the Mortgage Loans
in the jurisdiction in which the related Mortgaged Property is located, and
shall have full power and authority, acting alone or through
Subservicers
as
provided in Section 3.02, to do any and all things which it
may deem necessary
or desirable in connection with such servicing and administration. Without
limiting the generality of the foregoing,
the Master Servicer in its own name or
in the name of a Subservicer is hereby authorized and empowered by the
Trustee
when the Master Servicer or the Subservicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them,
any and all
instruments of
satisfaction or cancellation, or of partial or full release or
discharge, or of
consent to assumption or modification in
connection with a proposed conveyance,
or of assignment of any Mortgage and Mortgage Note in connection with the
repurchase of a Mortgage Loan and all other comparable instruments, or with
respect to the modification or re-recording of a Mortgage for the purpose
of
correcting the Mortgage, the subordination of the lien of
the Mortgage in favor
of a public utility company or government
agency or unit with
powers of eminent
domain, the taking of a deed in lieu of foreclosure, the commencement,
prosecution or completion of judicial or non-judicial foreclosure, the
conveyance of a Mortgaged Property to the related
Insurer, the acquisition of
any property acquired by foreclosure or deed in lieu of foreclosure, or the
management, marketing and conveyance of any
property acquired by foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans
and with respect
to the Mortgaged Properties. The Master Servicer further is authorized and
empowered by the Trustee, on behalf of the
Certificateholders
and the Trustee,
in its own name or in the name of the
Subservicer,
when the Master
Servicer or
the Subservicer, as the case may be, believes it is appropriate in its best
judgment to register any Mortgage Loan on the MERS(R) System, or cause the
removal from the registration of any Mortgage Loan on the
MERS(R) System,
to
execute and deliver, on behalf of the
Trustee and the
Certificateholders or any
of them, any and all instruments of
assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee
and its successors
and assigns. Any
expenses incurred in connection with the actions described in the preceding
sentence shall be borne by the Master Servicer in accordance with Section
3.16(c), with no right of reimbursement;
provided, that if, as
a result of MERS
discontinuing or becoming unable to continue
operations in
connection with the
MERS System, it becomes necessary to remove any
Mortgage Loan from registration
on the MERS System and to arrange for the
assignment of the related Mortgages to
the Trustee, then any related expenses shall be reimbursable to the Master
Servicer. Notwithstanding the foregoing,
subject to Section 3.07(a), the Master
Servicer shall not permit any modification with respect to any Mortgage
Loan
that would both constitute a sale or exchange of
such Mortgage Loan
within the
meaning of Section 1001 of the Code and any proposed, temporary or final
regulations promulgated thereunder (other than in connection
with a proposed
conveyance or assumption of such Mortgage Loan that is
treated as a Principal
Prepayment in Full pursuant to Section 3.13(d) hereof) and cause any REMIC
formed under the Series Supplement to fail
to qualify as a REMIC under the Code.
The Trustee shall furnish the Master Servicer with any powers of
attorney and
other documents necessary or appropriate to enable the Master Servicer to
service and administer the Mortgage
Loans. The Trustee shall not be liable
for
any action taken by the Master Servicer or any Subservicer pursuant to such
powers of attorney. In servicing and administering any
Nonsubserviced
Mortgage
Loan, the Master Servicer shall, to the extent not inconsistent with this
Agreement, comply with the Program
Guide as if it were
the originator of
such
Mortgage Loan and had retained the
servicing rights and
obligations in
respect
thereof. In connection with servicing and
administering the Mortgage Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may perform
services such as appraisals and brokerage services that are not customarily
provided by servicers of mortgage loans, and shall be entitled to
reasonable
compensation therefor in accordance
with Section 3.10 and
(ii) may, at its own
discretion and on behalf of the Trustee,
obtain credit
information in the
form
of a "credit score" from a credit
repository.
(b) (See Section
3.01(b) - (c) of the Standard Terms)
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers;
Enforcement of Subservicers' and Sellers' Obligations.
(a) The Master Servicer may continue in
effect Subservicing
Agreements entered
into by Residential Funding and
Subservicers prior to the execution and delivery
of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer shall be
either (i) an institution the accounts
of which are insured by the FDIC or (ii)
another entity that engages in the
business of originating or servicing
mortgage loans, and in either case shall be
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, and in either case shall be a
Freddie Mac, Fannie Mae or HUD approved
mortgage servicer. In addition, any
Subservicer of a Mortgage Loan insured by the FHA must be an FHA-approved
servicer, and any Subservicer of a Mortgage
Loan guaranteed by the VA must be a
VA-approved servicer. Each Subservicer of a Mortgage
Loan shall be entitled to
receive and retain, as provided in the related
Subservicing
Agreement and in
Section 3.07, the related Subservicing Fee
from payments of interest received on
such Mortgage Loan after payment of all amounts
required to be
remitted to the
Master Servicer in respect of such
Mortgage Loan. For any Mortgage Loan that is
a Nonsubserviced Mortgage Loan, the Master
Servicer shall be entitled to receive
and retain an amount equal to the
Subservicing
Fee from payments of interest.
Unless the context otherwise requires, references in this Agreement to
actions
taken or to be taken by the Master
Servicer in
servicing the Mortgage Loans
include actions taken or to be taken by a
Subservicer
on behalf of the
Master
Servicer. Each Subservicing Agreement will
be upon such terms and conditions as
are generally required by, permitted by or
consistent with the Program Guide and
are not inconsistent with this Agreement and as the Master Servicer and the
Subservicer have agreed; provided that, the Subservicing
Agreement between
the
Master Servicer and Wells Fargo, if any,
will be upon such terms and conditions
as are consistent with this Agreement and as the Master Servicer and the
Subservicer have agreed, which may not be consistent
with the Program
Guide.
With the approval of the Master Servicer, a Subservicer may delegate its
servicing obligations to third-party
servicers, but such Subservicer will remain
obligated under the related Subservicing Agreement. The Master Servicer and a
Subservicer may enter into amendments thereto or a different form of
Subservicing Agreement, and the form referred to or included in the Program
Guide is merely provided for information
and shall not be deemed to limit in any
respect the discretion of the Master
Servicer to modify or
enter into different
Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of
either this Agreement or the Program
Guide in a manner
which would
materially
and adversely affect the interests of the
Certificateholders.
The Program Guide
and any other Subservicing Agreement entered into between the Master
Servicer
and any Subservicer shall require the
Subservicer to accurately and fully report
its borrower credit files to each of the
Credit Repositories in a timely manner.
(b) (See Section 3.02(b) of the Standard
Terms)
Section 3.03 Successor Subservicers. (See
Section 3.03 of the Standard Terms)
Section 3.04 Liability of the Master
Servicer. (See Section 3.04 of the Standard
Terms)
Section 3.05 No Contractual Relationship
Between Subservicer and Trustee or
Certificateholders. (See Section 3.05 of the Standard Terms)
Section 3.06 Assumption or Termination of
Subservicing
Agreements by
Trustee.
(See Section 3.06 of the Standard Terms)
Section 3.07 Collection of Certain Mortgage
Loan Payments; Deposits to Custodial
Account. (See Section 3.07 of the Standard Terms)
Section 3.08 Subservicing Accounts;
Servicing Accounts.
(a) In those cases where a Subservicer
is servicing a
Mortgage Loan pursuant to
a Subservicing Agreement, the Master Servicer shall cause the Subservicer,
pursuant to the Subservicing Agreement, to establish and maintain one or
more
Subservicing Accounts which shall be an
Eligible Account or, if such account is
not an Eligible Account, shall generally
satisfy the requirements of the Program
Guide and be otherwise acceptable to the
Master Servicer and each Rating Agency.
The Subservicer will be required thereby to deposit into the Subservicing
Account on a daily basis, or with respect to the Mortgage
Loans subserviced
by
Wells Fargo, if any, within two (2) Business Days of
receipt, all proceeds
of
Mortgage Loans received by the Subservicer, less its Subservicing Fees and
unreimbursed advances and expenses, to the
extent permitted by the Subservicing
Agreement. If the Subservicing Account is not an Eligible
Account, the
Master
Servicer shall be deemed to have received
such monies upon
receipt thereof by
the Subservicer. The Subservicer shall not be required to deposit in the
Subservicing Account payments or
collections in the nature of prepayment charges
or late charges or assumption fees. On or before the date specified in the
Program Guide, but in no event later than the
Determination
Date, the Master
Servicer shall cause the Subservicer,
pursuant to the Subservicing Agreement, to
remit to the Master Servicer for deposit in
the Custodial Account all funds held
in the Subservicing Account with respect to each
Mortgage Loan serviced by such
Subservicer that are required to be remitted to the Master Servicer. The
Subservicer will also be required,
pursuant to the
Subservicing
Agreement, to
advance on such scheduled date of remittance amounts equal to any scheduled
monthly installments of principal and
interest less its Subservicing Fees on any
Mortgage Loans for which payment was not received by the Subservicer. This
obligation to advance with respect to each
Mortgage Loan will continue up to and
including the first of the month following the date on which the related
Mortgaged Property is sold at a foreclosure sale or is acquired by the
Trust
Fund by deed in lieu of foreclosure or
otherwise. All such
advances received by
the Master Servicer shall be deposited
promptly by it in the Custodial Account.
(b) (See Section 3.08(b) - (d) of the
Standard Terms)
Section 3.09 Access to Certain Documentation and Information Regarding the
Mortgage Loans. (See Section 3.09 of the Standard Terms)
Section 3.10 Permitted Withdrawals from
the Custodial Account.
(a) The Master
Servicer may, from time to time as provided
herein, make
withdrawals from the
Custodial Account of amounts on deposit
therein
pursuant to Section 3.07 that are attributable to the Mortgage
Loans for
the following purposes:
(i) to make deposits
into the Certificate
Account in the amounts and in the
manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for previously
unreimbursed Advances,
Servicing
Advances or other expenses made
pursuant to Sections 3.01, 3.07(a), 3.08, 3.11, 3.12(a), 3.14 and 4.04
or otherwise reimbursable pursuant to the terms of this Agreement,
such
withdrawal right
being limited to amounts received on the related
Mortgage Loans
(including, for this
purpose, REO Proceeds,
Insurance
Proceeds, Liquidation
Proceeds and proceeds from the purchase of a
Mortgage Loan pursuant to Section 2.02, 2.03, 2.04, 4.07 or 9.01)
which
represent (A) Late
Collections of Monthly
Payments for which any
such
advance was
made in the case of Subservicer Advances or Advances
pursuant to Section
4.04 and (B)
recoveries
of amounts in respect
of
which such advances were made in the case of Servicing
Advances;
(iii) to pay to itself or the
related Subservicer
(if not previously retained
by such Subservicer) out of each payment received by the Master
Servicer
on account of interest on a Mortgage Loan as contemplated by Sections
3.14 and 3.16, an
amount equal to that
remaining portion of any such
payment as to interest
(but not in excess of the Servicing Fee and the
Subservicing Fee, if not previously retained) which, when deducted,
will
result in the remaining amount of such interest
being interest at the
Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage
Loan) on the amount
specified in the amortization
schedule of the related Mortgage Loan as the principal
balance thereof
at the beginning of the period respecting which such interest was paid
after giving effect to any previous Curtailments;
(iv) to pay to itself as
additional servicing
compensation
any interest or
investment income
earned on funds and
other property
deposited in or
credited to the
Custodial Account that it is entitled to withdraw
pursuant to Section 3.07(c);
(v) to pay to itself
as additional
servicing compensation
any Foreclosure
Profits, any amounts
remitted by Subservicers as interest in respect of
Curtailments pursuant
to Section 3.08(b),
and any amounts paid by a
Mortgagor in connection with a Principal Prepayment in Full in respect
of interest
for any period during the calendar month in which such
Principal
Prepayment in
Full
is to be distributed to the
Certificateholders;
(vi) to pay to itself,
a Subservicer,
a Seller, Residential Funding, the
Company or any
other appropriate Person, as the case may be, with
respect to each
Mortgage Loan or
property acquired in
respect thereof
that has been
purchased or otherwise
transferred
pursuant to
Section
2.02, 2.03,
2.04, 4.07 or 9.01,
all amounts received
thereon and not
required to be distributed to the Certificateholders as of the date on
which the related Stated Principal Balance or Purchase Price is
determined;
(vii) to reimburse itself or the related Subservicer for any Nonrecoverable
Advance or
Advances in the manner and to the extent provided in
subsection (c) below,
and any Advance or Servicing Advance made in
connection with a
modified Mortgage Loan
that is in default or, in the
judgment of the
Master Servicer, default is reasonably foreseeable
pursuant to Section 3.07(a), to the extent the amount of the
Advance or
Servicing Advance
was added to the
Stated Principal Balance of the
Mortgage Loan in a prior calendar month, or any Advance
reimbursable to
the Master Servicer pursuant to Section 4.02(a);
(viii) to reimburse itself or the Company for expenses incurred by and
reimbursable to it or the Company pursuant to Sections 3.01(a), 3.11,
3.13, 3.14(c),
6.03, 10.01 or otherwise, or in connection with
enforcing, in
accordance
with
this Agreement, any repurchase,
substitution or indemnification obligation of any Seller (other
than an
Affiliate of the
Company) pursuant to the related Seller's Agreement;
(ix) to reimburse itself
for Servicing Advances
expended by it (a)
pursuant
to Section 3.14 in
good faith in
connection with the
restoration
of
property damaged by an
Uninsured Cause, and
(b) in connection with the
liquidation of a
Mortgage Loan or disposition of an REO Property to the
extent not otherwise reimbursed pursuant to clause (ii) or (viii)
above;
(x) to withdraw any
amount deposited in
the Custodial Account
that was not
required to be deposited therein pursuant to Section 3.07; and
(xi) to reimburse or pay
any Subservicer any
such amounts as are due thereto
under the applicable
Subservicing Agreement
and have not been retained
by or paid to the
Subservicer, to the
extent provided
in the related
Subservicing Agreement.
(b) (See Section
3.10(b) - (c) of the Standard Terms)
Section 3.11 Maintenance of the Primary Insurance Policies; Collections
Thereunder. (See Section 3.11 of the Standard Terms)
Section 3.12 Maintenance of Fire Insurance
and Omissions and Fidelity Coverage.
(See Section 3.12 of the Standard Terms)
Section 3.13 Enforcement of Due-on-Sale
Clauses; Assumption and Modification
Agreements; Certain
Assignments.
(See Section 3.13 of the Standard
Terms)
Section 3.14 Realization Upon Defaulted
Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise
comparably
convert
(which may include an REO Acquisition) 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. Alternatively, the Master Servicer may take other
actions in respect of a defaulted Mortgage
Loan, which may include (i) accepting
a short sale (a payoff of the Mortgage Loan for an amount less than the total
amount contractually owed in order to facilitate a sale of the Mortgaged
Property by the Mortgagor) or permitting a short
refinancing
(a payoff of the
Mortgage Loan for an amount less than the
total amount
contractually
owed in
order to facilitate refinancing transactions by the Mortgagor not involving
a
sale of the Mortgaged Property), (ii) arranging for a repayment plan or
(iii)
agreeing to a modification in accordance with Section 3.07. In connection
with
such foreclosure or other conversion or action, the Master Servicer shall,
consistent with Section 3.11, follow such practices and
procedures as it shall
deem necessary or advisable, as shall be normal and usual in its general
mortgage servicing activities and as shall be required or permitted by the
Program Guide, as applicable; provided that the Master
Servicer shall not
be
liable in any respect hereunder if the Master
Servicer is acting in
connection
with any such foreclosure or other conversion in a manner that is consistent
with the provisions of this Agreement.
The Master Servicer,
however, shall not
be required to expend its own funds or incur
other reimbursable charges in
connection with any foreclosure, or attempted foreclosure which is not
completed, or towards the restoration of any
property unless it shall determine
(i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Holders of Certificates of one or more
Classes after reimbursement to itself for
such expenses or charges and (ii) that
such expenses or charges will be
recoverable to it through Liquidation Proceeds,
Insurance Proceeds, or REO Proceeds
(respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 3.10,
whether or not such expenses and charges
are actually
recoverable from
related
Liquidation Proceeds, Insurance Proceeds or REO
Proceeds). In the event of such
a determination by the Master Servicer
pursuant to this
Section 3.14(a),
the
Master Servicer shall be entitled to
reimbursement
of such amounts
pursuant to
Section 3.10.
In addition to the
foregoing, the Master
Servicer shall use its best
reasonable efforts to realize upon any
Additional
Collateral
for such of the
Additional Collateral 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; provided that the
Master Servicer shall not, on behalf
of the Trustee, obtain title to any such
Additional Collateral as a result of or
in lieu of the disposition thereof or otherwise; and provided further that (i)
the Master Servicer shall not proceed with
respect to such Additional Collateral
in any manner that would impair the ability to recover against the related
Mortgaged Property, and (ii) the Master Servicer shall proceed with any REO
Acquisition in a manner that preserves the
ability to apply the proceeds of such
Additional Collateral against amounts owed under the
defaulted Mortgage
Loan.
Any proceeds realized from such Additional
Collateral (other than
amounts to be
released to the Mortgagor or the related
guarantor in accordance with procedures
that the Master Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note and to the terms and conditions of any security agreement,
guarantee agreement, mortgage or other agreement
governing the
disposition of
the proceeds of such Additional
Collateral) shall be
deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.10. Any other payment
received by the Master Servicer in respect
of such Additional
Collateral shall
be deposited in the Custodial Account
subject to withdrawal
pursuant to Section
3.10.
For so long as the
Master Servicer
is the Master
Servicer under the
Credit Support Pledge Agreement and any of the Mortgage
Loans are Pledged Asset
Loans, the Master Servicer shall perform its obligations under the Credit
Support Pledge Agreement in accordance with such
Agreement and in a manner that
is in the best interests of the
Certificateholders. Further, the Master Servicer
shall use its best reasonable efforts to realize upon any Pledged Assets for
such of the Pledged Asset 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;
provided that the
Master Servicer shall not,
on behalf of the Trustee, obtain title to
any such Pledged Assets as a result of
or in lieu of the disposition thereof or otherwise; and provided further that
(i) the Master Servicer shall not proceed
with respect to such Pledged Assets in
any manner that would impair the ability to recover against the related
Mortgaged Property, and (ii) the Master Servicer shall proceed with any REO
Acquisition in a manner that preserves the
ability to apply the proceeds of such
Pledged Assets against amounts owed under the defaulted
Mortgage Loan. Any
proceeds realized from such Pledged Assets
(other than amounts to be released to
the Mortgagor or the related guarantor in accordance
with procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note
and to the terms and conditions of any
security agreement,
guarantee agreement,
mortgage or other agreement governing the disposition of the proceeds of
such
Pledged Assets) shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.10.
Any other payment
received by the
Master
Servicer in respect of such Pledged
Assets shall be
deposited in the
Custodial
Account subject to withdrawal pursuant to
Section 3.10.
Concurrently with the
foregoing,
the Master
Servicer may pursue any
remedies that may be available in
connection with a
breach of a
representation
and warranty with respect to any such
Mortgage Loan in accordance with Sections
2.03 and 2.04. However, the Master Servicer is not required to continue to
pursue both foreclosure (or similar
remedies) with respect to the Mortgage Loans
and remedies in connection with a breach of
a representation and warranty if the
Master Servicer determines in its
reasonable discretion
that one such remedy is
more likely to result in a greater
recovery as to the
Mortgage Loan.
Upon the
occurrence of a Cash Liquidation or REO Disposition, following the deposit in
the Custodial Account of all Insurance
Proceeds, Liquidation
Proceeds and other
payments and recoveries referred to in the definition of
"Cash Liquidation"
or
"REO Disposition," as applicable, upon receipt by the Trustee of written
notification of such deposit signed by a
Servicing Officer,
the Trustee or any
Custodian, as the case may be, shall release
to the Master Servicer the related
Mortgage File and the Trustee shall execute and deliver such
instruments
of
transfer or assignment prepared by the Master
Servicer, in each case without
recourse, as shall be necessary to vest in
the Master Servicer or its designee,
as the case may be, the related Mortgage
Loan, and thereafter such Mortgage Loan
shall not be part of the Trust Fund.
Notwithstanding the
foregoing or any other
provision of this Agreement, in the Master Servicer's sole discretion with
respect to any defaulted Mortgage Loan or REO Property as to either of the
following provisions, (i) a Cash
Liquidation or REO Disposition may be deemed to
have occurred if substantially all amounts
expected by the Master Servicer to be
received in connection with the related
defaulted Mortgage
Loan or REO Property
have been received, and (ii) for purposes of determining the amount of any
Liquidation Proceeds, Insurance Proceeds, REO Proceeds
or any other unscheduled
collections or the amount of any Realized
Loss, the Master Servicer may take
into account minimal amounts of additional
receipts expected to be received or
any estimated additional liquidation expenses expected to be incurred in
connection with the related defaulted
Mortgage Loan or REO Property.
(b) (See Section 3.14(b) - (c) of the
Standard Terms)
(d) The proceeds of any Cash Liquidation, REO Disposition or
purchase or
repurchase of any Mortgage Loan pursuant to
the terms of this Agreement, as well
as any recovery (other than Subsequent
Recoveries)
resulting from a
collection
of Liquidation Proceeds, Insurance Proceeds or REO
Proceeds, will be applied in
the following order of priority:
first, to reimburse
the Master Servicer or the
related Subservicer in accordance with
Section 3.10(a)(ii)
and, in the case of
Wells Fargo as a Subservicer, if applicable, to reimburse such Subservicer
for
any Subservicing Fees payable therefrom;
second, to the
Certificateholders
to
the extent of accrued and unpaid
interest on the
Mortgage Loan, and any related
REO Imputed Interest, at the Net Mortgage Rate (or the Modified Net
Mortgage
Rate in the case of a Modified Mortgage Loan), to the Due Date in the related
Due Period prior to the Distribution Date on which such amounts are to be
distributed; third, to the Certificateholders
as a recovery of principal on the
Mortgage Loan (or REO Property) (provided
that if any such Class of Certificates
to which such Realized Loss was allocated is no longer outstanding, such
subsequent recovery shall be distributed to
the persons who were the Holders of
such Class of Certificates when it was retired); fourth, to all Servicing Fees
and Subservicing Fees payable therefrom (and the Master Servicer and the
Subservicer shall have no claims for any
deficiencies with respect to such fees
which result from the foregoing
allocation); and fifth, to Foreclosure Profits.
(e) (See Section 3.14(e) of the Standard Terms)
Section 3.15 Trustee to Cooperate;
Release of Mortgage
Files. (See Section 3.15
of the Standard Terms)
Section 3.16 Servicing and Other Compensation; Compensating Interest. (See
Section 3.16 of the Standard Terms)
Section 3.17 Reports to the Trustee and the
Company. (See Section 3.17 of the
Standard Terms)
Section 3.18 Annual Statement as to Compliance. (See Section 3.18 of the
Standard Terms)
Section 3.19 Annual Independent Public Accountants' Servicing Report. (See
Section 3.19 of the Standard Terms)
Section 3.20 Rights of the Company in Respect of the Master Servicer. (See
Section 3.20 of the Standard Terms)
Section 3.21 Administration of Buydown Funds.
(See Section 3.21 of the Standard
Terms)
Section 3.22 Advance Facility. (See
Section 3.22 of the Standard Terms)
<PAGE>
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS
Section 4.01 Certificate Account. (See
Section 4.01 of the Standard Terms)
Section 4.02 Distributions.
(a) On each
Distribution
Date, (x) the Master Servicer on behalf of the
Trustee or
(y) the Paying Agent appointed by the Trustee, shall
distribute (I) to the Master Servicer or a sub-servicer,
in the case of
a distribution
pursuant to Section 4.02(a)(iii) below, the amount
required to be
distributed to the
Master Servicer
or a sub-servicer
pursuant to
Section
4.02(a)(iii)
below,
and (II) to each
Certificateholder of
record on the next
preceding Record
Date (other
than as provided in Section 9.01 respecting the final distribution),
either (1)
in immediately available funds (by wire transfer or
otherwise) to the account of such Certificateholder at a bank or other
entity having appropriate facilities therefor, if such
Certificateholder
has so notified the Master Servicer or the Paying Agent, as the
case may
be, or (2) if such
Certificateholder has
not so notified
the Master
Servicer or the Paying Agent by the Record Date, by check mailed to
such
Certificateholder at
the address of such Holder appearing in the
Certificate Register,
such
Certificateholder's
share (which share (A)
with respect to each Class of Certificates (other than any Subclass of
the Class A-V
Certificates),
shall be based on the
aggregate of the
Percentage Interests represented by Certificates of the applicable
Class
held by such Holder or (B) with respect to any Subclass of the
Class A-V
Certificates, shall be equal to the amount (if any) distributed
pursuant
to Section 4.02(a)(i) below to each Holder of a Subclass thereof)
of the
following amounts,
in the following order
of priority (subject
to the
provisions of Section 4.02(b) below), in each case to the extent of
the
Available Distribution Amount:
(i) to the Senior
Certificates (other
than the Principal Only Certificates)
on a pro rata basis based on the Accrued Certificate Interest
payable on
such Certificates
with respect to such Distribution Date, Accrued
Certificate Interest on such Classes of Certificates (or
Subclasses, if
any, with respect to the Class A-V Certificates) for such Distribution
Date, plus any Accrued
Certificate Interest
thereon remaining unpaid
from any previous
Distribution
Date except as provided in the last
paragraph of this Section 4.02(a) (the "Senior Interest Distribution
Amount"); and
(ii) (X) to the Class A-P
Certificates, the
Class A-P Principal Distribution
Amount (as defined in Section 4.02(b)(i) herein); and
(Y) to the Senior
Certificates (other
than the Class A-P
Certificates), in the
priorities
and amounts set forth in Section
4.02(b)(ii), the sum of the following (applied to reduce the
Certificate
Principal Balances of such Senior Certificates, as applicable):
(A) the Senior
Percentage for such
Distribution
Date times the sum of
the
following:
(1) the principal
portion of each Monthly Payment due during the related Due
Period on each
Outstanding
Mortgage Loan (other than the related
Discount Fraction of
the principal portion of such payment with respect
to a Discount Mortgage Loan), whether or not received on or prior
to the
related Determination
Date, minus the principal portion of any Debt
Service Reduction
(other than the related Discount Fraction of the
principal portion of
such Debt Service
Reductions with respect to each
Discount Mortgage
Loan) which
together with other
Bankruptcy
Losses
exceeds the Bankruptcy Amount;
(2) the Stated
Principal Balance of any Mortgage Loan repurchased during the
preceding calendar
month (or deemed to have been so repurchased in
accordance with
Section 3.07(b) of the Standard Terms) pursuant to
Sections 2.02,
2.04 or 4.07 of the
Standard Terms and
Section 2.03 of
the Standard
Terms and this Series
Supplement,
and the amount of
any
shortfall deposited in
the Custodial
Account in
connection
with the
substitution of a Deleted Mortgage Loan pursuant to Section
2.04 of the
Standard Terms or
Section 2.03 of the
Standard Terms and this Series
Supplement, during the
preceding calendar month (other than the related
Discount Fraction of
such Stated Principal
Balance or shortfall
with
respect to each Discount Mortgage Loan); and
(3) the principal
portion of all other unscheduled collections (other than
Principal Prepayments
in Full and
Curtailments and amounts received in
connection with a Cash Liquidation or REO Disposition of a Mortgage
Loan
described in
Section 4.02(a)(ii)(Y)(B) of this Series Supplement,
including without limitation Insurance Proceeds, Liquidation Proceeds
and REO Proceeds)
including Subsequent
Recoveries received
during the
preceding calendar
month (or deemed to have been so received in
accordance with
Section 3.07(b) of the
Standard Terms) to the extent
applied by the Master Servicer as recoveries of principal of the
related
Mortgage Loan pursuant to Section 3.14 of the Standard Terms (other
than
the related
Discount Fraction of the principal portion of such
unscheduled collections, with respect to each Discount Mortgage
Loan);
(B) with respect to
each Mortgage Loan for which a Cash Liquidation or a REO
Disposition
occurred during the
preceding calendar month (or was deemed
to have occurred
during such period in accordance with Section 3.07(b)
of the Standard Terms)
and did not result in any Excess Special Hazard
Losses, Excess Fraud
Losses, Excess
Bankruptcy Losses or Extraordinary
Losses, an amount
equal to the lesser of (a) the Senior Percentage for
such Distribution
Date times the Stated Principal Balance of such
Mortgage Loan (other than the related Discount Fraction of such Stated
Principal Balance,
with respect to each Discount Mortgage Loan) and (b)
the Senior Accelerated
Distribution
Percentage for such
Distribution
Date times
the related unscheduled collections (including without
limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to
the extent applied by the Master Servicer as recoveries of
principal of
the related Mortgage Loan pursuant to Section 3.14 of the Standard
Terms
(in each case other than the portion of such unscheduled collections,
with respect
to a Discount Mortgage Loan, included in Section
4.02(b)(i)(C) of this Series Supplement);
(C) the Senior
Accelerated
Distribution
Percentage for such
Distribution
Date times the aggregate of all Principal Prepayments in Full received
in the related
Prepayment
Period and Curtailments received in the
preceding calendar
month (other than the related Discount Fraction of
such Principal
Prepayments in Full
and Curtailments,
with respect to
each Discount Mortgage Loan);
(D) any Excess
Subordinate Principal Amount for such Distribution Date;
(E) any amounts
described in subsection (ii)(Y), clauses (A), (B) and (C) of
this Section 4.02(a), as determined for any previous Distribution Date,
which remain unpaid after application of amounts previously
distributed
pursuant to this
clause (E) to the
extent that such
amounts are not
attributable to
Realized Losses which have been allocated to the
Subordinate Certificates; minus
(F) the Capitalization Reimbursement Amount for such Distribution Date,
other than the related
Discount Fraction of
any portion of that amount
related to each Discount Mortgage Loan, multiplied by a fraction,
the
numerator of which is the Senior Principal Distribution Amount, without
giving effect to this
clause (F), and the
denominator of which
is the
sum of the principal distribution amounts for all Classes of
Certificates other
than the Class
A-P Certificates, without giving
effect to any reductions for the Capitalization Reimbursement
Amount;
(iii) if the Certificate
Principal Balances of the Subordinate
Certificates
have not been reduced to zero, to the Master Servicer or a
Sub-Servicer,
by remitting for deposit to the Custodial Account, to the extent of and
in reimbursement for
any Advances or Sub-Servicer Advances previously
made with respect to
any Mortgage
Loan or REO
Property which remain
unreimbursed in whole
or in part following the Cash Liquidation or REO
Disposition of such
Mortgage Loan or REO Property, minus any such
Advances that were made with respect to delinquencies that ultimately
constituted Excess
Special Hazard Losses,
Excess Fraud Losses,
Excess
Bankruptcy Losses or Extraordinary Losses;
(iv) to the Holders of the
Class M-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(v) to the Holders
of the Class M-1 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, minus (y) the amount of any Class A-P
Collection Shortfalls for such Distribution Date or remaining
unpaid for
all previous
Distribution Dates,
to the extent the
amounts available
pursuant to clause (x) of Sections 4.02(a)(vii), (ix), (xi), (xiii),
(xiv) and (xv) of this
Series Supplement
are insufficient therefor,
applied in reduction of the Certificate Principal Balance of the Class
M-1 Certificates;
(vi) to the Holders of the
Class M-2
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(vii) to the Holders of the Class
M-2 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, minus (y) the amount of any Class A-P
Collection Shortfalls for such Distribution Date or remaining
unpaid for
all previous
Distribution Dates,
to the extent the
amounts available
pursuant to clause (x) of Sections 4.02(a)(ix), (xi), (xiii), (xiv) and
(xv) of this Series
Supplement are
insufficient therefor,
applied in
reduction of
the Certificate Principal Balance of the Class M-2
Certificates;
(viii) to the Holders of the Class M-3
Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(ix) to the Holders of the
Class M-3 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date minus (y) the amount of any Class A-P
Collection Shortfalls for such Distribution Date or remaining
unpaid for
all previous
Distribution Dates,
to the extent the
amounts available
pursuant to clause (x) of Sections 4.02(a)(xi), (xiii), (xiv) and (xv)
of this Series Supplement are insufficient therefor, applied in
reduction of
the Certificate Principal Balance of the Class M-3
Certificates;
(x) to the Holders
of the Class B-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(xi) to the Holders of the
Class B-1 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date minus (y) the amount of any Class A-P
Collection Shortfalls for such Distribution Date or remaining
unpaid for
all previous
Distribution Dates,
to the extent the
amounts available
pursuant to clause (x) of Sections 4.02(a)(xiii), (xiv) and (xv) of
this
Series Supplement are insufficient therefor, applied in reduction
of the
Certificate Principal Balance of the Class B-1 Certificates;
(xii) to the Holders of the Class
B-2 Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xiii) to the Holders of the Class B-2
Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date minus (y) the amount of any Class A-P
Collection Shortfalls for such Distribution Date or remaining
unpaid for
all previous
Distribution Dates,
to the extent the
amounts available
pursuant to clause (x) of Sections 4.02(a)(xiv) and (xv) of this
Series
Supplement are
insufficient
therefor, applied in reduction of the
Certificate Principal Balance of the Class B-2 Certificates;
(xiv) to the Holders of the Class
B-3 Certificates, an amount equal to (x) the
Accrued Certificate
Interest thereon for
such Distribution
Date, plus
any Accrued
Certificate
Interest thereon remaining unpaid from any
previous Distribution
Date, except as provided below, minus (y) the
amount of any Class A-P Collection Shortfalls for such Distribution
Date
or remaining unpaid for all previous Distribution Dates, to the extent
the amounts available
pursuant to clause (x) of Section 4.02(a) (xv) of
this Series Supplement are insufficient therefor;
(xv) to the Holders of the
Class B-3 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date minus (y) the amount of any Class A-P
Collection Shortfalls for such Distribution Date or remaining
unpaid for
all previous Distribution Dates, applied in reduction of the
Certificate
Principal Balance of the Class B-3 Certificates;
(xvi) to the Senior Certificates,
in the priority set forth in Section 4.02(b)
of this Series Supplement, the portion, if any, of the Available
Distribution Amount remaining after the foregoing distributions,
applied
to reduce the Certificate Principal Balances of such Senior
Certificates, but in no event more than the aggregate of the
outstanding
Certificate
Principal
Balances of
each such Class of Senior
Certificates, and
thereafter, to each Class of Subordinate Certificates
then outstanding
beginning with such
Class with the Highest
Priority,
any portion of the Available Distribution Amount remaining after the
Senior Certificates have been retired, applied to reduce the
Certificate
Principal Balance of each such Class of Subordinate Certificates,
but in
no event more than the outstanding Certificate Principal Balance of
each
such Class of
Subordinate Certificates;
(xvii) to the Class R Certificates, the balance, if any, of the Available
Distribution Amount.
Notwithstanding the foregoing, on any Distribution Date, with
respect to
the Class of Subordinate Certificates
outstanding on such Distribution Date with
the Lowest Priority, or in the event the
Subordinate
Certificates are no longer
outstanding, the Senior Certificates, Accrued Certificate Interest thereon
remaining unpaid from any previous
Distribution Date will
be distributable only
to the extent that (1) a shortfall in the amounts available to pay Accrued
Certificate Interest on any Class of
Certificates results from an interest rate
reduction in connection with a Servicing Modification, or (2) such unpaid
Accrued Certificate Interest was
attributable to interest shortfalls relating to
the failure of the Master Servicer to make any required Advance, or the
determination by the Master Servicer that any proposed Advance would be a
Nonrecoverable Advance with respect to the related
Mortgage Loan where such
Mortgage Loan has not yet been the subject of a Cash Liquidation or REO
Disposition or the related Liquidation Proceeds, Insurance Proceeds and REO
Proceeds have not yet been distributed to
the Certificateholders.
(b) Distributions
of principal on the Senior Certificates on each
Distribution Date
occurring prior to the Credit Support Depletion Date
will be made as follows:
(i) to the Class A-P
Certificates, until
the Certificate
Principal Balance
thereof is
reduced to zero, an amount (the "Class A-P Principal
Distribution Amount") equal to the aggregate of:
(A) the related
Discount Fraction of
the principal portion
of each Monthly
Payment on each
Discount Mortgage Loan due during the related Due
Period, whether or not received on or prior to the related
Determination
Date, minus the
Discount Fraction of the principal portion of any
related Debt Service
Reduction which
together with other Bankruptcy
Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion of all
unscheduled
collections on each Discount Mortgage Loan received during
the preceding calendar month or, in the case of Principal
Prepayments in
Full, during the related Prepayment Period (other than
amounts received
in connection with a
Cash Liquidation or
REO Disposition of a Discount
Mortgage Loan
described in clause (C) below), including Principal
Prepayments in Full, Curtailments, Subsequent Recoveries and
repurchases
(including deemed
repurchases
under Section 3.07(b) of the Standard
Terms) of Discount
Mortgage Loans (or, in the case of a substitution of
a Deleted Mortgage
Loan, the Discount Fraction of the amount of any
shortfall deposited in
the Custodial Account
in connection
with such
substitution);
(C) in connection
with the Cash Liquidation or REO Disposition of a Discount
Mortgage Loan that did not result in any Excess Special Hazard Losses,
Excess Fraud Losses,
Excess Bankruptcy Losses or Extraordinary Losses,
an amount equal to the lesser of (1) the applicable Discount
Fraction of
the Stated Principal
Balance of such Discount Mortgage Loan immediately
prior to such
Distribution Date and
(2) the aggregate
amount of the
collections on such
Discount Mortgage Loan to the extent applied as
recoveries of principal;
(D) any amounts
allocable to principal
for any previous
Distribution Date
(calculated pursuant
to clauses
(A) through (C) above) that remain
undistributed; and
(E) the amount of
any Class A-P Collection Shortfalls for such
Distribution
Date and the amount of
any Class A-P
Collection Shortfalls
remaining
unpaid for
all previous
Distribution Dates,
but only to the extent
of
the Eligible Funds for such Distribution Date; minus
(F) the related Discount Fraction of the portion of the Capitalization
Reimbursement Amount for such Distribution Date, if any, related to
each
Discount Mortgage Loan; and
(ii) the Senior
Principal Distribution Amount shall be distributed in the
following order of priority:
(a) to the Class R
Certificates, until
the Certificate
Principal Balance thereof has been reduced to zero;
(b) the balance of the Senior Principal Distribution Amount
remaining after the
distribution, if any,
described in
Section
4.02(b)(ii)(a) shall be distributed as follows:
(1) first,
in an amount equal to the Lockout
Amount, to the Lockout Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(2) second, to the
Class A-1
Certificates,
until
the Certificate
Principal Balance thereof has been reduced
to zero;
(3) third, to the Class A-2 Certificates, until the
Certificate Principal
Balance thereof has
been reduced to
zero; and
(4) fourth, to the
Lockout Certificates,
without
regard to the Lockout Amount, until the Certificate
Principal Balance thereof has been reduced to zero.
(c) On or after the occurrence of the Credit Support Depletion Date, all
priorities relating to distributions as described in Section
4.02(b) of this
Series Supplement in respect of principal
among the Senior
Certificates
(other
than the Class A-P Certificates) will be
disregarded, and (i) an amount equal to
the Discount Fraction of the principal portion of scheduled payments and
unscheduled collections received or
advanced in respect of the Discount Mortgage
Loans minus the Discount Fraction of the portion of the Capitalization
Reimbursement Amount for such Distribution
Date will be distributed to the Class
A-P Certificates, (ii) the Senior Principal Distribution Amount will be
distributed to the remaining Senior Certificates (other than the Class A-P
Certificates) pro rata in accordance with their respective outstanding
Certificate Principal Balances and (iii) the amount set forth in Section
4.02(a)(i) herein will be distributed as
set forth therein.
(d) After the reduction of the Certificate Principal Balances of the Senior
Certificates (other than the Class A-P
Certificates)
to zero but prior to
the
Credit Support Depletion Date, the Senior
Certificates (other than the Class A-P
Certificates) will be entitled to no
further distributions
of principal thereon
and the Available Distribution Amount will be paid
solely to the holders of the
Class A-P Certificates, Class A-V
Certificates, Class M Certificates and Class B
Certificates, in each case as described
herein.
(e) In addition to the foregoing
distributions,
with respect to any
Subsequent
Recoveries, the Master Servicer shall deposit such funds into the
Custodial
Account pursuant to Section 3.07(b)(iii). If, after taking into account such
Subsequent Recoveries, the amount of a Realized Loss is
reduced, the amount of
such Subsequent Recoveries will be applied
to increase the Certificate Principal
Balance of the Class of Subordinate
Certificates
with the Highest
Priority to
which Realized Losses, other than Excess
Bankruptcy Losses, Excess Fraud Losses,
Excess Special Hazard Losses and
Extraordinary Losses, have been allocated, but
not by more than the amount of Realized Losses previously allocated to that
Class of Certificates pursuant to Section 4.05. The amount of any remaining
Subsequent Recoveries will be applied to increase
the Certificate Principal
Balance of the Class of Certificates with the next Lower Priority, up to the
amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.05. Any
remaining Subsequent Recoveries will
in turn be applied to increase the
Certificate Principal Balance of the Class of
Certificates with the next Lower Priority up to the amount of such Realized
Losses previously allocated to that Class of
Certificates pursuant
to Section
4.05, and so on. Holders of such Certificates will not be entitled to any
payment in respect of Accrued Certificate Interest on the amount of such
increases for any Interest Accrual Period preceding the Distribution Date on
which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Certificate of such Class in
accordance
with its respective Percentage
Interest.
(f) Each distribution with respect to a
Book-Entry Certificate
shall be paid to
the Depository, as Holder thereof, and the Depository shall be solely
responsible for crediting the amount of
such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible
for disbursing such distribution to
the Certificate Owners that it represents
and to each indirect
participating
brokerage firm (a "brokerage firm" or
"indirect
participating firm")
for which
it acts as agent. Each brokerage firm shall be
responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Company or the Master Servicer shall have any
responsibility therefor except as otherwise
provided by this
Series Supplement
or applicable law.
(g) Except as otherwise provided in Section 9.01, if the Master Servicer
anticipates that a final distribution with respect to any
Class of Certificates
will be made on a future Distribution Date, the Master
Servicer shall, no later
than 60 days prior to such final distribution, notify the Trustee and the
Trustee shall, not earlier than the 15th day and
not later than the 25th day of
the month next preceding the month of such final
distribution,
mail to each
Holder of such Class of Certificates a notice to the effect that: (i) the
Trustee anticipates that the final
distribution
with respect to such
Class of
Certificates will be made on such Distribution Date but only upon
presentation
and surrender of such Certificates at the office of the
Trustee or as otherwise
specified therein, and (ii) no interest shall accrue
on such Certificates from
and after the end of the related Interest Accrual Period. In the event that
Certificateholders required to surrender their
Certificates pursuant to Section
9.01(c) do not surrender their Certificates
for final cancellation, the Trustee
shall cause funds distributable with respect to such Certificates to be
withdrawn from the Certificate Account and
credited to a separate escrow account
for the benefit of such Certificateholders
as provided in Section 9.01(d).
Section 4.03 Statements to Certificateholders; Statements to Rating Agencies;
Exchange Act Reporting. (See Section 4.03 of the Standard
Terms)
Section 4.04 Distribution of Reports to the
Trustee and the Company; Advances by
the Master Servicer. (See Section 4.04 of the Standard Terms)
Section 4.05 Allocation of Realized
Losses.
Prior to each Distribution Date, the Master Servicer shall
determine the
total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Servicing Modification, Debt
Service Reduction, Deficient Valuation
or REO Disposition that occurred during the
related Prepayment Period or, in the
case of a Servicing Modification that constitutes a reduction of the
interest
rate on a Mortgage Loan, the amount of the
reduction in the interest portion of
the Monthly Payment due during the related Due Period. The amount of each
Realized Loss shall be evidenced by an Officers' Certificate. All Realized
Losses, other than Excess Special Hazard
Losses, Extraordinary
Losses, Excess
Bankruptcy Losses or Excess Fraud Losses,
shall be allocated as follows: first,
to the Class B-3 Certificates until the Certificate Principal Balance thereof
has been reduced to zero; second, to the Class B-2 Certificates until the
Certificate Principal Balance thereof has been reduced
to zero; third, to
the
Class B-1 Certificates until the
Certificate Principal
Balance thereof has been
reduced to zero; fourth, to the Class M-3 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-2
Certificates until the Certificate
Principal Balance thereof has been reduced to
zero; sixth, to the Class M-1 Certificates until the Certificate Principal
Balance thereof has been reduced to zero;
and, thereafter, if
any such Realized
Losses are on a Discount Mortgage Loan, to the Class A-P Certificates in an
amount equal to the Discount Fraction of
the principal portion thereof, and the
remainder of such Realized Losses on the
Discount Mortgage
Loans and the entire
amount of such Realized Losses on
Non-Discount Mortgage
Loans will be allocated
among all the Senior Certificates (other than the Class A-V
Certificates
and
Class A-P Certificates) in the case of the
principal portion of
such loss on a
pro rata basis and among all of the Senior
Certificates
(other than the Class
A-P Certificates) in the case of the
interest portion of such loss on a pro rata
basis, as described below. The principal
portion of such
Realized Losses on the
Discount Mortgage Loans will be allocated
to the Class A-P
Certificates in an
amount equal to the Discount Fraction
thereof and the remainder of such Realized
Losses on the Discount Mortgage Loans and the entire amount of such Realized
Losses on Non-Discount Mortgage Loans will be allocated among the Senior
Certificates (other than the Class A-P Certificates) and Subordinate
Certificates, on a pro rata basis, as
described below.
On any Distribution Date, Realized Losses will be allocated as set
forth
herein after distributions of principal on
the Certificates as set forth herein.
As used herein, an
allocation of a
Realized Loss on a "pro rata basis"
among two or more specified Classes of
Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to
distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Accrued Certificate Interest thereon payable on such
Distribution Date (without
regard to any Compensating Interest for such Distribution
Date) in the case
of
an interest portion of a Realized Loss. Except as provided in the following
sentence, any allocation of the principal
portion of Realized Losses (other than
Debt Service Reductions) to a Class of
Certificates
shall be made by
reducing
the Certificate Principal Balance thereof by the amount so
allocated, which
allocation shall be deemed to have occurred
on such Distribution Date; provided
that no such reduction shall reduce the
aggregate Certificate
Principal Balance
of the Certificates below the aggregate
Stated Principal Balance of the Mortgage
Loans. Any allocation of the principal
portion of Realized
Losses (other than
Debt Service Reductions) to the Subordinate
Certificates then
outstanding with
the Lowest Priority shall be made by
operation of the definition of "Certificate
Principal Balance" and by operation of the provisions of Section 4.02(a).
Allocations of the interest portions of
Realized Losses (other than any interest
rate reduction resulting from a Servicing Modification) shall be made in
proportion to the amount of Accrued
Certificate Interest and by operation of the
definition of "Accrued Certificate
Interest" and by
operation of the provisions
of Section 4.02(a). Allocations of the interest portion of a Realized Loss
resulting from an interest rate reduction in connection with a Servicing
Modification shall be made by operation of the
provisions of Section
4.02(a).
Allocations of the principal portion of
Debt Service Reductions shall be made by
operation of the provisions of Section 4.02(a). All Realized Losses and all
other losses allocated to a Class of
Certificates
hereunder will be
allocated
among the Certificates of such Class in
proportion to the Percentage Interests
evidenced thereby; provided that if any
Subclasses of the Class A-V Certificates
have been issued pursuant to Section 5.01(c), such Realized Losses and other
losses allocated to the Class A-V
Certificates
shall be allocated
among such
Subclasses in proportion to the respective amounts of Accrued Certificate
Interest payable on such Distribution Date that would have
resulted absent such
reductions.
Section 4.06 Reports of Foreclosures and
Abandonment of Mortgaged Property. (See
Section 4.06 of the Standard Terms)
Section 4.07 Optional Purchase of
Defaulted Mortgage Loans.
(a) With respect to any Mortgage
Loan which is
delinquent in payment by 90 days
or more, the Master Servicer may, at its option, purchase such Mortgage Loan
from the Trustee at the Purchase Price
therefor; provided, that such Mortgage
Loan that becomes 90 days or more
delinquent during any
given Calendar
Quarter
shall only be eligible for purchase
pursuant to this
Section during the
period
beginning on the first Business Day of the following Calendar Quarter, and
ending at the close of business on the second-to-last Business Day of such
following Calendar Quarter; and provided,
further, that such Mortgage Loan is 90
days or more delinquent at the time of
repurchase. Such
option if not exercised
shall not thereafter be reinstated as to any Mortgage Loan, unless the
delinquency is cured and the Mortgage Loan
thereafter again
becomes delinquent
in payment by 90 days or more in a
subsequent Calendar Quarter.
(b) If at any time the Master Servicer makes a payment to the Certificate
Account covering the amount of the
Purchase Price for
such a Mortgage Loan
as
provided in clause (a) above, and the
Master Servicer
provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the
Certificate
Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the written direction of the
Master Servicer without recourse to the Master Servicer
which shall succeed to
all the Trustee's right, title and interest in and to such
Mortgage Loan, and
all security and documents relative thereto. Such assignment shall be an
assignment outright and not for security.
The Master Servicer will thereupon own
such Mortgage, and all such security and documents, free of any further
obligation to the Trustee or the
Certificateholders with respect thereto
If, however,
the Master
Servicer shall have exercised its right to
repurchase a Mortgage Loan pursuant to this Section 4.07 upon the written
request of and with funds provided by the
Junior Certificateholder and thereupon
transferred such Mortgage Loan to the Junior Certificateholder, the Master
Servicer shall so notify the Trustee in
writing.
Section 4.08 Surety Bond. (See Section
4.08 of the Standard Terms)
<PAGE>
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) (See Section 5.01(a) of the Standard
Terms).
(b) Except as provided below, registration
of Book-Entry Certificates may not be
transferred by the Trustee except to
another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Holders of the Book-Entry
Certificates shall
hold their respective
Ownership Interests in and to each of such
Certificates through
the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to Definitive Certificates in
respect of such Ownership Interests. All
transfers by Certificate Owners of their
respective Ownership
Interests in the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm
representing
such
Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent
in accordance with
the Depository's normal procedures.
The Trustee,
the Master
Servicer and the
Company may for all purposes
(including the making of payments due on the
respective
Classes of
Book-Entry
Certificates) deal with the Depository as the
authorized
representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to
those established by law
and agreements between such Certificate
Owners and the
Depository
Participants
and brokerage firms representing such
Certificate Owners.
Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a
reasonable record date
in connection with
solicitations of consents from or voting by
Certificateholders
and shall give
notice to the Depository of such record
date.
If (i)(A) the Company advises the Trustee in writing that the
Depository
is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Company is unable to
locate a qualified successor or (ii)
the Company notifies the Depository of its intent to
terminate the
book-entry
system and, upon receipt of notice of such intent
from the Depository, the
Depository Participants holding beneficial interest in the Book-Entry
Certificates agree to initiate such
termination,
the Trustee shall
notify all
Certificate Owners, through the Depository,
of the occurrence of
any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Depository,
accompanied by
registration
instructions from
the Depository for registration of transfer, the Trustee shall execute,
authenticate and deliver the Definitive
Certificates.
In addition, if an Event of Default has occurred and is continuing,
each
Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such
Certificate Owner's Percentage
Interest in the related Class of Certificates. In order to make such request,
such Certificate Owner shall, subject to the rules and procedures of the
Depository, provide the Depository or the
related Depository
Participant with
directions for the Trustee to exchange or
cause the exchange of the Certificate
Owner's interest in such Class of
Certificates
for an equivalent Percentage
Interest in fully registered definitive form. Upon receipt by the Trustee of
instruction from the Depository directing the Trustee to effect
such exchange
(such instructions to contain
information
regarding the Class of
Certificates
and the Certificate Balance being
exchanged, the
Depository Participant account
to be debited with the decrease, the registered holder of and delivery
instructions for the Definitive Certificates and any other information
reasonably required by the Trustee), (i) the Trustee shall instruct the
Depository to reduce the related Depository Participant's account by the
aggregate Certificate Principal Balance of
the Definitive Certificates, (ii) the
Trustee shall execute, authenticate and deliver, in accordance with the
registration and delivery instructions
provided by the Depository, a Definitive
Certificate evidencing such Certificate Owner's Percentage Interest in such
Class of Certificates and (iii) the Trustee
shall execute and authenticate a new
Book-Entry Certificate reflecting the reduction in the aggregate
Certificate
Principal Balance of such Class of
Certificates by the amount of the Definitive
Certificates.
None of the Company,
the Master Servicer or the Trustee shall be liable
for any actions taken by the Depository or its nominee, including, without
limitation, any delay in delivery of any
instruction required under this section
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of
Definitive Certificates all references herein
to obligations imposed upon or to be performed by
the Depository in connection
with the issuance of the Definitive
Certificates
pursuant to this
Section 5.01
shall be deemed to be imposed upon and
performed by the Trustee, and the Trustee
and the Master Servicer shall recognize the Holders of the Definitive
Certificates as Certificateholders
hereunder.
(c) (See Section 5.01(c) of the Standard
Terms)
Section 5.02 Registration of Transfer and
Exchange of Certificates. (See Section
