EXECUTION COPY
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
DATED AS OF APRIL 1, 2005,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of August 1, 2004
Mortgage
Asset-Backed Pass-Through Certificates
Series 2005-QA5
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
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<C>
Article I
DEFINITIONS.......................................................................5
Section 1.01
Definitions............................................................5
Section 1.02 Use of Words and
Phrases..............................................35
Article II CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES.................36
Section 2.01 Conveyance of Mortgage
Loans..........................................36
Section 2.02 Acceptance by Trustee. (See Section 2.02 of the Standard
Terms)......37
Section 2.03 Representations, Warranties and Covenants of the
Master Servicer
and the
Company.............................................................39
Section 2.04 Representations and Warranties of Sellers. (See
Section 2.04 of
the Standard
Terms).........................................................40
Section 2.05 Execution and Authentication of Certificates/Issuance
of
Certificates Evidencing Interests in REMIC I
Certificates...................40
Section 2.06 Conveyance of Uncertificated REMIC I Regular
Interests;
Acceptance by the
Trustee...................................................40
Section 2.07 Issuance of Certificates Evidencing Interest in REMIC
II..............40
Section 2.08 Purposes and Powers of the Trust. (See Section 2.08 of
the
Standard
Terms).............................................................41
Article III ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS.................................42
Section 3.16 Servicing and Other Compensation; Compensating
Interest. .............27
Article IV PAYMENTS TO
CERTIFICATEHOLDERS..................................................43
Section 4.01 Certificate Account. (See Section 4.01 of the Standard
Terms)........43
Section 4.02
Distributions.........................................................43
Section 4.03 Statements to Certificateholders; Statements to the
Rating
Agencies; Exchange Act Reporting. (See Section 4.03 of the
Standard
Terms)......................................................................52
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)............52
Section 4.05 Allocation of Realized
Losses.........................................52
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged
Property.
(See Section 4.06 of the Standard
Terms)....................................53
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Section 4.07 Optional Purchase of Defaulted Mortgage Loans.
(See Section 4.07
of the Standard
Terms)......................................................53
Section 4.08 Surety Bond. (See Section 4.08 of the Standard
Terms).................53
Article V THE
CERTIFICATES.................................................................54
Article VI THE COMPANY AND THE MASTER
SERVICER.............................................55
Article VII
DEFAULT........................................................................56
Article VIII CONCERNING THE
TRUSTEE........................................................57
Article IX
TERMINATION.....................................................................58
Article X REMIC
PROVISIONS.................................................................59
Section 10.01 REMIC Administration. (See Section 10.01 of the Standard
Terms).....59
Section 10.02 Master Servicer; REMIC Administrator and Trustee
Indemnification. (See
Section 10.02 of the Standard Terms).................59
Section 10.03 Designation of
REMICs................................................59
Section 10.04 Distributions on the Uncertificated REMIC I Regular
Interests........59
Section 10.05 Compliance with Withholding
Requirements.............................59
Article XI MISCELLANEOUS
PROVISIONS........................................................60
Section 11.01 Amendment. (See Section 11.01 of the Standard
Terms)................60
Section 11.02 Recordation of Agreement; Counterparts. (See Section 11.02 of
the Standard
Terms).........................................................60
Section 11.03 Limitation on Rights of Certificateholders.
(See Section 11.03
of the Standard
Terms)......................................................60
Section 11.04 Governing Law. (See Section 11.04 of the Standard
Terms)............60
Section 11.05 Notices.
All demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered
at
or mailed by registered mail, postage prepaid (except for notices
to
the Trustee which shall be deemed to have been duly given only
when
received), to the appropriate address for each recipient listed in
the
table below or, in each case, such other address as may hereafter
be
furnished in writing to the Master Servicer, the Trustee and
the
Company, as
applicable......................................................60
Section 11.06
Required Notices to Rating Agency and Subservicer. (See Section
11.06 of the Standard
Terms)................................................61
Section 11.07 Severability of Provisions. (See Section 11.07 of the
Standard
Terms)......................................................................61
Section 11.08 Supplemental Provisions for Resecuritization.
(See Section
11.08 of the Standard
Terms)................................................61
Section 11.09 Allocation of Voting
Rights..........................................61
Section 11.10 No
Petition..........................................................61
</TABLE>
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EXHIBITS
Exhibit One: Mortgage Loan
Schedule
Exhibit Two: Information to be
Included in
Monthly Distribution Date Statement
Exhibit Three: Standard Terms of Pooling and
Servicing Agreement dated as of August 1, 2004
iii
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This is a Series
Supplement, dated as
of April 1, 2005
(the "Series
Supplement"), to the Standard Terms of
Pooling and Servicing Agreement, dated as
of August 1, 2004 and attached as Exhibit Three hereto (the "Standard Terms"
and, together with this Series Supplement,
the "Pooling and Servicing Agreement"
or "Agreement"), among RESIDENTIAL ACCREDIT LOANS, 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 DEUTSCHE BANK
TRUST COMPANY AMERICAS,
as Trustee (together with its permitted
successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company
intends
to sell mortgage asset-backed 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.
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. 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 this Series Supplement.
REMIC I
As provided
herein, the REMIC Administrator will make an election to
treat the entire segregated pool of assets
described in the definition of REMIC
I (as defined herein) (including the Mortgage Loans but excluding
the Initial
Monthly Payment Fund), and subject to this
Agreement, as a real
estate mortgage
investment conduit (a "REMIC") for federal income tax purposes and such
segregated pool of assets will be
designated as "REMIC
I." The REMIC I Regular
Interests will be "regular interests" in REMIC I and the
Class R
Certificates
(with respect to the Class R-I Interest)
will represent ownership of the sole
class of "residual interests" in REMIC I for purposes of the
REMIC Provisions
(as defined herein).
The following
table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass-Through Rate,
the initial
Uncertificated
Principal
Balance, and for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity
date," for each of the REMIC
I Regular Interests and the Class R-I Interest. None of the REMIC I Regular
Interests will be certificated.
1
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<TABLE>
<CAPTION>
REMIC I Regular Uncertificated Uncertificated
Maturity Date
Related Group
Interest
Principal Balance
REMIC I
Pass-Through Rate
<S>
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I-A
$
944.26
(2)
April 25, 2035 (1)
Group I
I-B
$
12,184.01
(2)
April 25, 2035 (1)
Group I
II-A
$
930.02
(2)
April 25, 2035 (1)
Group II
II-B
$
12,000.05
(2)
April 25, 2035 (1)
Group II
ZZZ
$ 241,814,450.46
(2)
April 25, 2035 (1) Group I through Group II
Class R-I Interest$
100.00
(2)
April 25, 2035 (1)
Group II
</TABLE>
__________________
(1) For purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date
immediately
following the maturity
date for the
Mortgage Loan with the latest maturity date has been
designated as the
"latest possible maturity date" for each REMIC I Regular
Interest.
(2) Calculated in
accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
REMIC II
A segregated pool of assets consisting of the REMIC I Regular
Interests
will be designated as "REMIC II" and the REMIC Administrator will make a
separate REMIC election with respect
thereto. The Class A-I Certificates, Class
A-II Certificates, Class M-1 Certificates,
Class M-2
Certificates, Class
M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates and Class B-3
Certificates, will be "regular interests" in REMIC II and the Class R
Certificates (with respect to the Class
R-II Interest) will represent ownership
of the sole class of "residual interests" in REMIC II for
purposes of the REMIC
Provisions.
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
PASS-THROUGH
PRINCIPAL
MATURITY
MINIMUM
DESIGNATION RATE
BALANCE
FEATURES(1)
DATE(2)
S&P/MOODY'S
DENOMINATIONS(3)
<S>
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<C> <C>
<C>
Class A-I Variable
$ 112,397,400
Senior/Variable
April 25, 2035
AAA/Aaa
$25,000.00
Rate(4)
Rate
Class A-II Variable
$ 110,700,300
Senior/Variable
April 25, 2035
AAA/Aaa
$25,000.00
Rate(4)
Rate
Class R
Variable $ 100
Senior/Residual
April 25, 2035
AAA/Aaa (5)
Rate(4)
Variable Rate
Class M-1 Variable
$ 7,859,900
Mezzanine/
April 25, 2035
AA/Aa2
$25,000.00
Rate(6)
Variable Rate
Class M-2 Variable
$ 3,627,600
Mezzanine/
April 25, 2035 A/A2
$250,000.00
Rate(6)
Variable Rate
Class M-3 Variable
$ 2,176,500
Mezzanine/
April 25, 2035
BBB/Baa2
$250,000.00
Rate(6)
Variable Rate
Class B-1 Variable
$ 2,297,400
Subordinate/
April 25, 2035 BB/NA $250,000.00
Rate(6)
Variable Rate
Class B-2 Variable
$ 1,571,900
Subordinate/
April 25, 2035 B/NA
$250,000.00
Rate(6)
Variable Rate
Class B-3 Variable
$ 1,209,509
Subordinate/
April 25, 2035 NA/NA $250,000.00
Rate(6)
Variable Rate
</TABLE>
2
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____________
1 The
Certificates,
other than the Class B Certificates 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 For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations,
the Distribution Date
immediately
following the maturity
date for the
Mortgage Loan with the latest maturity date has been
designated as the
"latest possible maturity date" for each REMIC II Regular
Interest.
3 The
Certificates, other than the Class R Certificates, shall be
issuable
in minimum dollar
denominations
as indicated above (by Certificate
Principal Balance) 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.
4 The
Pass-Through
Rate on the Class A-I, Class A-II and Class R
Certificates will be equal to the Net WAC Rates on the Mortgage
Loans in
the related Loan Group. The initial Pass-Through Rate for the Class
A-I,
Class A-II and
Class R Certificates will be equal to approximately
4.1075%, 5.1184% and 5.1184% per annum, respectively.
5 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%.
6 The
Pass-Through Rate on the Class M-1, Class M-2, Class M-3, Class
B-1,
Class B-2 and
Class B-3 Certificates will be equal to the weighted
average of the Net WAC Rate on the Mortgage Loans in each Loan Group,
weighted in proportion to the results of subtracting from the aggregate
principal balance of
each related Loan Group the aggregate certificate
principal balance of the Senior Certificates related to that Loan
Group.
The initial
Pass-Through Rate for
the Class M Certificates and Class B
Certificates will be equal to approximately 4.6091% per annum.
In consideration of the mutual agreements herein contained, the
Company,
the Master Servicer and the Trustee agree
as follows:
3
<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.
Accrued Certificate Interest: With respect to each Distribution
Date, as
to any Class of Certificates, interest accrued during the related Interest
Accrual Period at the related Pass-Through Rate on the Certificate Principal
Balance thereof immediately prior to such
Distribution Date. Accrued Certificate
Interest will be calculated on the basis of
a 360-day year, consisting of twelve
30-day months. In each case Accrued Certificate Interest on any Class of
Certificates will be reduced by the amount
of:
(i)
Prepayment Interest Shortfalls for the related Loan Group (to
the
extent not
offset by the
Master Servicer with a payment of
Compensating Interest as provided in Section 4.01),
(ii) the interest
portion (adjusted to the Net Mortgage Rate
(or the
Modified Net
Mortgage Rate in the case of a Modified
Mortgage
Loan)) of Realized
Losses for the related Loan Group (including
Excess Special
Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses and Extraordinary Losses) not allocated solely
to one or more
specific Classes
of Certificates pursuant to
Section 4.05,
4
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(iii) the interest
portion of Advances that were (A) previously made
with respect to a
Mortgage Loan or REO
Property for the related
Loan Group
which remained unreimbursed following the Cash
Liquidation or REO
Disposition
of such Mortgage Loan or REO
Property and (B) made
with respect to
delinquencies
that were
ultimately determined
to be Excess Special Hazard Losses, Excess
Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses,
and
(iv) any other
interest shortfalls for the related Loan Group not
covered by the subordination provided by the Class M
Certificates
and Class B Certificates, including interest that is not
collectible from the
Mortgagor pursuant to the Servicemembers
Civil Relief Act of 1940, as amended, or similar legislation or
regulations as in effect from time to time.
The Group I Senior
Percentage
of such reductions in the case of the
Group I Loans will be allocated among the
holders of the Class A-I Certificates.
The Group II Senior Percentage of such reductions in the case of the
Group II
Loans will be allocated to the holders of
the Class A-II
Certificates and Class
R Certificates in proportion to the respective
amounts of Accrued
Certificate
Interest that would have been payable from the Group II Loans on that
Distribution Date absent these reductions. The remainder of these
reductions
will be allocated among the holders of the Class M
Certificates
and Class B
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been payable on that Distribution Date absent these
reductions. In the case of each class of Class M Certificates, Accrued
Certificate Interest on that class will be
further reduced by the allocation of
the interest portion (adjusted to the Net
Mortgage Rate) of Realized Losses that
are allocated solely to such Class of Class B Certificates or such Class of
Class M Certificates pursuant to Section
4.05.
Adjustment Date: As to
each Mortgage Loan,
each date set forth in
the
related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
Available Distribution
Amount: With respect to each Loan Group,
the
excess of (i) the sum of (a) the amount
described in the definition of Available
Distribution Amount in the Standard
Terms and (b) the
amount allocated to
the
Available Distribution Amount for such Loan Group
pursuant to Section
4.02(h)
over (ii) any amount allocated to the
Available Distribution Amount of any other
Loan Group pursuant to Section 4.02(h).
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)
$150,000 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
5
<PAGE>
(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) (i) if the
aggregate principal balance of the Non-Primary Residence
Loans as of the
Relevant Anniversary
is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Relevant
Anniversary,
$0.00, or (ii) if the
aggregate principal
balance of the
Non-Primary
Residence Loans as of
the Relevant
Anniversary is equal
to or greater
than 10% of the Stated Principal Balance of the Mortgage Loans as
of the
Relevant Anniversary,
the sum of (I) the aggregate principal balance of
the Non-Primary
Residence Loans with a
Loan-to-Value Ratio of
greater
than 80.00%
but less than or equal
to 90.00% (other
than Additional
Collateral Loans),
times 0.25%, (II) the aggregate principal balance of
the Non-Primary
Residence Loans with a
Loan-to-Value Ratio of
greater
than 90.00%
but less than or equal
to 95.00% (other
than Additional
Collateral
Loans), times 0.50%, and (III) the aggregate principal
balance of the Non-Primary Residence Loans with a Loan-to-Value
Ratio of
greater than 95.00%
(other than
Additional
Collateral
Loans) times
0.75%, in each case as of the Relevant Anniversary; and
(B) 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
having a Loan-to-Value Ratio (other than Additional Collateral
Loans) at
origination which exceeds 75% and (ii) $150,000,
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.
6
<PAGE>
Certificate: Any Class
A-I, Class A-II, 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 "Deutsche Bank Trust Company
Americas, as trustee, in trust for the
registered holders of Residential
Accredit Loans, Inc.,
Mortgage Asset-Backed
Pass-Through Certificates, Series 2005-QA5" and which must be an Eligible
Account.
Certificate Group:
With respect to (i) Loan Group I, the Class A-I
Certificates and (ii) Loan Group II, the Class
A-II Certificates and Class R
Certificates.
Certificate Policy:
None.
Certificate Principal
Balance: With respect to each Certificate, as
defined in the Standard Terms.
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 (i) an interest
designated as a "residual interest" in REMIC I for purposes of the REMIC
Provisions (Class R-I Interest) and (ii) an
interest designated as
a "residual
interest" in REMIC II for purposes of the REMIC Provisions (Class R-II
Interest).
Class R-I
Interest: The residual
interest in REMIC I.
Class R-II Interest:
The residual interest in REMIC II.
Closing Date: May 6,
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
instrument is located at 1761 East St.
Andrew Place, Santa Ana, California
92705-4934, Attention: Residential Funding
Corporation Series 2005-QA5.
Cut-off Date: April 1,
2005.
Determination Date:
With respect to any
Distribution Date, the
second
Business Day prior to such Distribution
Date.
Due Period: With
respect to each Distribution Date, the calendar month
in which such Distribution Date occurs.
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
7
<PAGE>
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).
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 3.00% 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) from the first to, but not
including,
the
second 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) 2.00% 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 since the most
recent
anniversary of the Cut-off Date up to such
date of determination,
and (Z) from
the second to, but not including,
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) 1.00% 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 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.
Fraud Losses: Realized
Losses on Mortgage
Loans as to which
there was
fraud in the origination of such Mortgage
Loan.
8
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Group I Certificates:
The Class A-I Certificates, representing an
undivided interest in Loan Group I.
Group I Loans: The Mortgage Loans designated as Group I Loans in
Exhibit
One.
Group I Pool Stated Principal Balance: As to any date of
determination,
the aggregate of the Stated Principal
Balances of each Group
I Loan that was an
Outstanding Mortgage Loan on the Due Date
immediately preceding
the Due Period
preceding such date of determination.
Group I Senior Percentage: As of each Distribution Date, the
percentage
equal to the Certificate Principal Balance of the Class A-I Certificates
immediately prior to that Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage
Loans in Loan Group I immediately prior
to that Distribution Date.
Group A-I Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the
Available Distribution Amount related
to Loan Group I remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section
4.02(a)(i)(u) of
this
Series Supplement, and (b) the sum of the amounts
required to be
distributed
therefrom to the Group I Certificateholders on such Distribution Date
pursuant
to Section 4.02(b)(i).
Group I Subordinate Amount: On any date of determination,
the excess of
the aggregate Stated Principal Balance of
the Group I Loans as of such date over
the aggregate Certificate Principal Balance of the Group I
Certificates then
outstanding.
Group II Certificates: The Class A-II Certificates and Class R
Certificates, representing an undivided
interest in Loan Group II.
Group II Loans:
The Mortgage Loans designated as Group II Loans in
Exhibit One.
Group II Pool Stated Principal Balance: As to any date of
determination,
the aggregate of the Stated Principal
Balances of each Group II Loan that was an
Outstanding Mortgage Loan on the Due Date
immediately preceding
the Due Period
preceding such date of determination.
Group II Senior Percentage: As of each Distribution Date, the
percentage
equal to the aggregate Certificate Principal Balance of the Class A-II
Certificates and Class R Certificates
immediately
prior to that
Distribution
Date divided by the aggregate Stated Principal Balance of all of the Mortgage
Loans in Loan Group II immediately prior to
that Distribution Date.
Group II Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the
Available Distribution Amount related
to Loan Group II remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section
4.02(a)(i)(v) of
this
Series Supplement, and (b) the sum of the amounts
required to be
distributed
therefrom to the Group II Certificateholders on such
Distribution Date pursuant
to Section 4.02(b)(ii).
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<PAGE>
Group II Subordinate Amount: On any date of determination, the
excess of
the aggregate Stated Principal Balance of the Group II Loans as
of such date
over the aggregate Certificate Principal Balance of the Group II
Certificates
then outstanding.
Initial Monthly Payment Fund: $6,501 representing scheduled principal
amortization and interest at the Net Mortgage
Rate payable during
the May 2005
Due Period, for those Mortgage Loans for which
the Trustee will not be entitled
to receive such payment.
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:
3.25%
Class B-1: 0.95%
Class M-2:
1.50%
Class B-2: 0.65%
Class M-3:
0.90%
Class B-3: 0.50%
Interest Accrual
Period: With respect
to any Class of Certificates and
any Distribution Date, the calendar month preceding the month in which
such
Distribution Date occurs.
Loan Group: Loan Group
I or Loan Group II.
Loan Group I: The
group of Mortgage Loans comprised of the Group I
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group II
Loans.
Maturity Date:
April 25, 2035, the Distribution Date immediately
following the latest scheduled maturity
date of any Mortgage Loan.
Maximum Mortgage
Rate: As to any
Mortgage Loan, the
rate indicated in
Exhibit One hereto as the "NOTE
CEILING," which rate is the maximum interest
rate that may be applicable to such
Mortgage Loan at any time during the life of
such Mortgage Loan.
Maximum Net
Mortgage Rate: As to any Mortgage Loan and any date of
determination, the Maximum Mortgage Rate for such Mortgage Loan minus
the per
annum rate at which the Servicing Fee is
calculated.
Minimum Mortgage
Rate: As to any
Mortgage Loan, the greater of (i) the
Note Margin for such Mortgage Loan and (ii) the rate
indicated in Exhibit
One
hereto as the "NOTE FLOOR" for such
Mortgage Loan, which
rate may be applicable
to such Mortgage Loan at any time during
the life of such 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 in the related Loan Group:
(a) the Mortgage Loan identifying number
("RFC LOAN #");
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<PAGE>
(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) [RESERVED];
(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;
(l) a code "N" under the column "OCCP
CODE," indicating
that the Mortgage
Loan
is secured by a non-owner occupied
residence;
(m) whether such Mortgage Loan constitutes
a Group I Loan or Group II Loan;
(n) the Maximum Mortgage Rate ("NOTE
CEILING");
(o) the maximum Adjusted Mortgage Rate
("NET CEILING");
(p) the Note Margin for the ("NOTE
MARGIN");
(q) the first Adjustment Date after the
Cut-off Date ("NXT INT CHG DT"); and
(r) the Periodic Cap ("PERIODIC DECR" or
"PERIODIC INCR").
Such schedule may consist of multiple
reports that collectively set forth all of
the information required.
Mortgage Rate: As to
any Mortgage Loan, the
interest rate borne by the
related Mortgage Note, or any modification thereto other than a Servicing
Modification. The Mortgage Rate on the Mortgage Loans will adjust on each
Adjustment Date to equal the sum (rounded
to the nearest
multiple of one-eighth
of one percent (0.125%) or up to the nearest
one-eighth of one
percent, which
are indicated by a "U" on Exhibit One
hereto, except in the case of the Mortgage
Loans indicated by an "X" on Exhibit One hereto under the heading "NOTE
METHOD"), of the related Index plus the
Note Margin, in each case subject to the
applicable Initial Rate Cap, Periodic Cap, Maximum Mortgage Rate and Minimum
Mortgage Rate.
11
<PAGE>
Net Mortgage
Rate: As to each Mortgage Loan, a per annum rate of
interest equal to the Adjusted Mortgage Rate less the per annum rate at
which
the Servicing Fee is calculated; provided that, (i) the Net Mortgage Rate
becoming effective on any Adjustment Date
shall not be greater or less than the
Net Mortgage Rate immediately prior to such Adjustment Date plus or minus
the
Initial Rate Cap or Periodic Cap
applicable
to such Mortgage Loan
and (ii) the
Net Mortgage Rate for any Mortgage Loan shall not exceed a rate equal
to the
Maximum Net Mortgage Rate for such Mortgage
Loan.
Net WAC Rate: With respect to any Distribution Date and each Loan
Group,
a per annum rate equal to the weighted
average of the Net
Mortgage Rates of the
related Mortgage Loans weighted on the
basis of the respective Stated Principal
Balance of each such Mortgage Loan as of the beginning of the related Due
Period, using the Net Mortgage Rates in
effect for the scheduled payments due on
those Mortgage Loans during such Due
Period.
Note Margin: As to each Mortgage Loan, the fixed percentage set
forth in
the related Mortgage Note and indicated in Exhibit One hereto as the "NOTE
MARGIN," which percentage is added to the related
Index on each Adjustment Date
to determine (subject to rounding in accordance
with the related Mortgage Note,
the Initial Rate Cap, the Periodic Cap, the Maximum Mortgage Rate and the
Minimum Mortgage Rate) the interest rate to
be borne by such Mortgage Loan until
the next Adjustment Date.
Pass-Through
Rate: With respect to
the Class A-I Certificates, the Net
WAC Rate of the Group I Loans. With respect to the Class A-II
Certificates and
Class R Certificates, the Net WAC Rate of the Group II
Loans. With respect
to
the Class M Certificates, a per annum rate equal to the
weighted average of the
Group I Net WAC Rate and Group II Net WAC
Rate, weighted in
proportion
to the
results of subtracting from the aggregate
principal balance of each related Loan
Group the aggregate certificate principal balance of the Senior Certificates
related to that Loan Group. For federal
income tax purposes,
the foregoing rate
for the Class M Certificates and Class B Certificates is expressed as the
weighted average of the rates on the REMIC
I Regular Interests I-A and II-A.
Periodic Cap: With respect to each Mortgage Loan, the periodic rate cap
that limits the increase or the decrease of the related
Mortgage Rate on any
Adjustment Date (other than the initial
Adjustment
Date) pursuant to the
terms
of the related Mortgage Note.
Permitted Investments:
One or more of the following:
(i) obligations
of or guaranteed as to timely payment of principal and
interest by the United States or any agency or instrumentality thereof
when such obligations
are backed by the full faith and credit of the
United States;
(ii) repurchase
agreements on
obligations
specified in clause
(i) maturing
not more than one month from the date of acquisition thereof, provided
that the unsecured
short-term debt obligations of the party agreeing to
repurchase such
obligations are at the time rated by each Rating Agency
in its highest short-term rating available;
(iii) federal funds, certificates of deposit,
demand deposits, time
deposits
and bankers'
acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances,
shall in
no event have an original maturity of more than 365 days or
a remaining
maturity of more than 30 days) denominated in United States dollars of
any U.S. depository
institution or trust company incorporated under the
laws of the United States or any state thereof or of any domestic
branch
12
<PAGE>
of a foreign depository institution or trust company; provided that the
debt obligations of such depository institution or trust company at
the
date of acquisition thereof have been rated by each Rating Agency
in its
highest short-term
rating available; and
provided further that, if the
original maturity of such short-term obligations of a domestic
branch of
a foreign depository
institution or trust company shall exceed 30 days,
the short-term rating
of such institution
shall be A-1+ in the case of
Standard & Poor's if Standard & Poor's is a Rating
Agency;
(iv) commercial
paper and demand notes
(having original maturities of not
more than 365 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of
acquisition
has been rated by each Rating Agency in its highest short-term rating
available; provided
that such commercial
paper shall have a
remaining
maturity of not more than 30 days;
(v) any mutual fund,
money market fund, common trust fund or other
pooled
investment vehicle,
the assets of which are limited to instruments that
otherwise would constitute Permitted Investments hereunder and have
been
rated by each Rating Agency in its highest short-term rating available
(in the case of Standard & Poor's such rating shall be either AAAm or
AAAm-G), including
any such fund that is
managed by the Trustee or any
affiliate of
the Trustee or for which the Trustee or any of its
affiliates acts as an adviser; and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted
Investment
hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency
below
the then-current
rating assigned to such Certificates, as evidenced in
writing;
provided, however, that no instrument shall be a Permitted
Investment if
it represents, either (1) the right to receive
only interest payments with
respect to the underlying debt instrument or (2) the right to receive both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying
obligations. References herein to the highest
rating available on unsecured long-term debt shall mean AAA in the case of
Standard & Poor's and Fitch and Aaa in
the case of Moody's, and for the purposes
of this Agreement, any references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean the
following: A-1 in the case of Standard &
Poor's, P-1 in the case of Moody's and
F-1 in the case of Fitch; provided,
however, that any
Permitted Investment that
is a short-term debt obligation
rated A-1 by Standard
& Poor's must satisfy the
following additional conditions: (i) the total amount of debt from
A-1 issuers
must be limited to the investment of monthly principal and interest payments
13
<PAGE>
(assuming fully amortizing collateral);
(ii) the total amount of A-1 investments
must not represent more than 20% of the aggregate outstanding Certificate
Principal Balance of the Certificates and
each investment must not mature beyond
30 days; (iii) the terms of the debt must
have a predetermined fixed dollar
amount of principal due at maturity that cannot vary; and (iv) if the
investments may be liquidated prior to their maturity or are
being relied on to
meet a certain yield, interest must be tied
to a single interest rate index plus
a single fixed spread (if any) and must
move proportionately with that index.
Prepayment Assumption:
With respect to the Mortgage Loans, a prepayment
assumption of 20% CPR, used for determining the accrual of original issue
discount and market discount and premium on
the Certificates for
federal income
tax purposes.
Prepayment
Distribution
Percentage: With
respect to any
Distribution
Date and each Class of Subordinate
Certificates for each
Loan Group, under
the
applicable circumstances set forth below, the
respective percentages
set forth
below:
(i) For any
Distribution
Date prior to the
Distribution
Date in May 2015
(unless the
Certificate
Principal Balances of the related Senior
Certificates have been reduced to zero or the circumstances set
forth in
the third paragraph of the definition of Senior Accelerated
Distribution
Percentage exist), 0%.
(ii) For any Distribution
Date for which clause (i) above does not apply, and
on which any Class of Subordinate Certificates is outstanding:
(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
14
<PAGE>
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.
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
preceding the month in which the related
Distribution Date occurs, except in the
case of the first Record Date which shall
be the Closing Date.
REMIC I: The segregated pool of assets subject
hereto, constituting a
portion of the primary trust created
hereby and to be
administered
hereunder,
with respect to which a separate
REMIC election is to be made (other than
with
respect to the items in clause (v) and the
proceeds thereof), consisting of: (i)
the Mortgage Loans and the related Mortgage Files; (ii) all payments on and
collections in respect of the Mortgage
Loans due after 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; (iii) property which secured a
Mortgage Loans and which has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure; (iv) the
hazard insurance policies and Primary Insurance Policy pertaining to the
Mortgage Loans, if any; and (v) all
proceeds of clauses (i) through (iv) above.
REMIC I Regular Interests: Any of the separate non-certificated
beneficial ownership interests in REMIC I issued
hereunder and designated as a
"regular interest" in REMIC I. Each such
REMIC I Regular
Interest shall accrue
interest at the related Uncertificated REMIC I
Pass-Through Rate in effect from
time to time, and shall be entitled to
distributions
of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The following is a list of the REMIC I Regular Interests: REMIC I
Regular Interest I-A, REMIC I Regular
Interest I-B,
REMIC I Regular
Interest
II-A, REMIC I Regular Interest II-B and
REMIC I Regular Interest ZZZ.
REMIC I Regular Interest I-A: A regular interest in REMIC I that is
held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular
Interest II-A:
A regular interest in REMIC I that is
held as an asset of REMIC II, that has an
initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
15
<PAGE>
REMIC I Regular Interest I-B: A regular interest in REMIC I that is
held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular
Interest II-B:
A regular interest in REMIC I that is
held as an asset of REMIC II, that has an
initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest ZZZ: A regular interest in REMIC I that is
held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Subordinated
Balance Ratio: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular
Interests ending with the
designation "A" equal to the ratio
among:
(1) the excess of (x) the aggregate of the Group I Pool Stated
Principal
Balance over (y) the aggregate Certificate Principal Balance of the Class A-I
Certificates; and
(2)
the excess
of (x) the aggregate of the Group II Pool Stated
Principal Balance over (y) the aggregate of
the Certificate Principal Balance of
the Class A-II Certificates and Class R
Certificates;
REMIC II: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created
hereby and to be
administered
hereunder,
with respect to which a separate REMIC
election is to be made, consisting of the
REMIC I Regular Interests.
REMIC II Regular
Interests:
The Certificates other than the Class R
Certificates.
REMIC Provisions:
Provisions of the
federal income tax law relating to
real estate mortgage investment conduits,
which appear at
Sections 860A through
860G of Subchapter M of Chapter 1 of the Code,
and related provisions, and
temporary and final regulations (or, to the extent not
inconsistent
with such
temporary or final regulations, proposed regulations) and published
rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
Senior Accelerated
Distribution
Percentage:
With
respect to any
Distribution Date occurring on or prior to
the 120th Distribution Date and, with
respect to any Loan Group, 100%. With respect to any Distribution Date
thereafter and any such Loan Group, as
follows:
(i) for any Distribution Date after the 132nd Distribution Date
but on or prior to the
144th Distribution
Date, the related Senior
Percentage for
such Distribution Date plus 70% of the related
Subordinate Percentage for such Distribution Date;
16
<PAGE>
(ii) for any Distribution Date after the 144th Distribution Date
but on or prior to the
156th Distribution
Date, the related Senior
Percentage for
such Distribution Date plus 60% of the related
Subordinate Percentage for such Distribution Date;
(iii) for any Distribution Date after the 156th Distribution
Date
but on or prior to the
168th Distribution
Date, the related Senior
Percentage for
such Distribution Date plus 40% of the related
Subordinate Percentage for such Distribution Date;
(iv) for any Distribution Date after the 168th Distribution Date
but on or prior to the
180th Distribution
Date, the related Senior
Percentage for
such Distribution Date plus 20% of the related
Subordinate Percentage for such Distribution Date; and
(v) for any
Distribution Date
thereafter,
the related
Senior
Percentage for such Distribution Date.
Any scheduled reduction, as described in the preceding paragraph,
shall
not be made as of any Distribution Date
unless:
(a)
the outstanding
principal balance of
the Mortgage Loans in both
Loan Groups delinquent 60 days or more (including Mortgage Loans
which are in
foreclosure, have
been foreclosed or otherwise
liquidated, or
with respect to which the Mortgagor is in
bankruptcy and any REO
Property) averaged over the last six
months, as a percentage of the aggregate outstanding Certificate
Principal Balance of the Subordinate Certificates, is less than
50% and
(b)
Realized Losses on the Mortgage Loans in both Loan Groups to
date
for such Distribution
Date, if occurring during the eleventh,
twelfth, thirteenth,
fourteeth and
fifteenth year, or any
year
thereafter, after the
Closing Date, are less than 30%, 35%, 40%,
45% or 50%,
respectively,
of the sum of the
Initial Certificate
Principal Balances of the Subordinate Certificates.
Notwithstanding the
foregoing,
if (a) the weighted average of the
Subordinate Percentages for both Loan Groups is equal to
or in excess of twice
the initial weighted average of the Subordinate Percentages for both Loan
Groups, (b) the outstanding principal
balance of the Mortgage Loans in both Loan
Groups delinquent 60 days or more (including Mortgage Loans which are in
foreclosure, have been foreclosed or otherwise
liquidated,
or with respect to
which the Mortgagor is in bankruptcy
and any REO
Property) averaged over the
last six months, as a percentage of the aggregate outstanding Certificate
Principal Balance of the Subordinate Certificates, does not exceed 50% and
(c)(i) prior to the Distribution Date in
May 2008, cumulative Realized Losses on
the Mortgage Loans in both Loan Groups do not exceed 20% of the sum of the
initial Certificate Principal Balances of
the Subordinate Certificates, and (ii)
thereafter, cumulative Realized Losses on
the Mortgage Loans in both Loan Groups
do not exceed 30% of the sum of the initial
Certificate
Principal Balances of
the Subordinate Certificates, then (A) on any Distribution Date prior to the
Distribution Date in May 2008, each Senior
Accelerated
Distribution
Percentage
for such Distribution Date will equal the related
Senior Percentage for that
Distribution Date plus 50% of the related Subordinate Percentage for such
Distribution Date, and (B) on any
Distribution Date on or after the Distribution
Date in May 2008, each Senior Accelerated Distribution Percentage for that
Distribution Date will equal the related
Senior Percentage for that Distribution
Date.
17
<PAGE>
Notwithstanding the
foregoing, on any
Distribution
Date on which the
weighted average of the Group I Senior Percentage and Group II Senior
Percentage, weighted on the basis of the Stated Principal Balances of the
Mortgage Loans in the related Loan Group,
exceeds the weighted
average of the
initial Group I Senior Percentage and Group
II Senior Percentage, (calculated on
such basis), each of the Senior Accelerated
Distribution
Percentages for
such
Distribution Date will equal 100%.
Notwithstanding the
foregoing,
upon
reduction of the Certificate
Principal Balances of the related Senior Certificates to zero, the related
Senior Accelerated Distribution Percentage
will equal 0%.
Senior Certificate:
Any one of the Class
A-I, Class A-II 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
or in the case of the Class R Certificates,
Exhibit D.
Senior Percentage:
The Group I Senior
Percentage with
respect to Loan
Group I, or the Group II Senior Percentage
with respect to Loan Group II.
Senior Principal
Distribution
Amount: The Group I Senior Principal
Distribution Amount with respect to Loan Group I or Group
II Senior
Principal
Distribution Amount with respect to Loan
Group II.
Special Hazard Amount:
As of any Distribution
Date, an amount equal to
$4,900,000 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 greater of (i) the product of the Special Hazard
Percentage for such anniversary
multiplied by the
outstanding principal balance
of all the Mortgage Loans on the
Distribution Date
immediately
preceding such
anniversary and (ii) twice the outstanding principal balance of the Mortgage
Loan with the largest outstanding
principal balance as
of the Distribution Date
immediately preceding such anniversary and (B) 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.
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
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<PAGE>
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.
Special Hazard
Percentage: As of each
anniversary of the Cut-off Date,
the greater of (i) 1.0% and (ii) the
largest percentage obtained by dividing the
aggregate outstanding principal balance (as of immediately preceding
Distribution Date) of the Mortgage Loans
secured by Mortgaged Properties located
in a single, five-digit zip code area in the State of California by the
outstanding principal balance of all the Mortgage Loans
as of the
immediately
preceding Distribution Date.
Subordinate Amount:
With respect to (i) Loan Group I, the Group I
Subordinate Amount and (ii) Loan Group II,
the Group II Subordinate Amount.
Subordinate
Principal
Distribution
Amount: With
respect to any
Distribution Date and Loan Group and each
Class of Subordinate Certificates, (a)
the sum of (i) the product of (x) the Class's pro rata share, based on the
Certificate Principal Balance of each such
Class then outstanding, and (y) the
aggregate of the amounts calculated for such Distribution Date under clauses
(1), (2) and (3) of Section 4.02(a)(ii)(A) of this Series
Supplement
(without
giving effect to the related Senior
Percentage) to the extent not payable to the
related 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)(A) of
this Series Supplement (without giving effect to the
related Senior Accelerated
Distribution Percentage) to the extent such collections are not otherwise
distributed to the related 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 to the extent not payable
to the Senior Certificates; and (iv) 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 related Capitalization Reimbursement Amount for such
Distribution Date,
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
related Classes of Certificates, in each
case to the extent derived from the related Available Distribution Amount
without giving effect to any reductions
for the Capitalization Reimbursement
Amount.
Trust Fund: REMIC I, REMIC II and the Initial Monthly Payment
Fund.
Uncertificated Accrued Interest: With respect to each Distribution
Date,
as to any REMIC I Regular Interest,
interest accrued during the related Interest
Accrual Period at the related Uncertificated REMIC I Pass-Through Rate on the
Uncertificated Principal Balance thereof
immediately prior to such Distribution
Date. Uncertificated Accrued Interest will be calculated on the basis of a
360-day year, consisting of twelve 30-day
months. In each case
Uncertificated
Accrued Interest on any REMIC I Regular
Interest will be
reduced by the amount
of: (i) Prepayment Interest Shortfalls on all
Mortgage Loans (to the extent not
offset by the Master Servicer with a payment of Compensating Interest as
provided in Section 4.02), (ii) the interest portion (adjusted to the Net
Mortgage Rate) of Realized Losses on all Mortgage Loans (including Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses and
Extraordinary Losses), (iii) the interest portion of Advances that were (A)
previously made with respect to a Mortgage
Loan or REO Property on all Mortgage
19
<PAGE>
Loans which remained unreimbursed following the Cash Liquidation or REO
Disposition of such Mortgage Loan or REO Property or (B) made
with respect to
delinquencies that were ultimately determined to be Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses,
and (iv) any other interest shortfalls, including interest that is not
collectible from the Mortgagor pursuant to
the Relief Act or similar legislation
or regulations as in effect from time to time, with all such reductions
allocated among all of the REMIC I Regular
Interests in proportion to their
respective amounts of Uncertificated Accrued Interest payable on such
Distribution Date absent such
reductions.
Uncertificated
Principal Balance:
With respect to each REMIC I Regular
Interest on any date of determination, the amount set forth in the
Preliminary
Statement hereto minus the sum of (x) the
aggregate of all
amounts previously
deemed distributed with respect to such interest and applied to reduce the
Uncertificated Principal Balance thereof pursuant to
Section 10.04 and (y) the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses that were previously deemed
allocated to the Uncertificated Principal Balance of such REMIC I Regular
Interest pursuant to Section 10.04.
Uncertificated REMIC I
Pass-Through
Rate: With respect to REMIC I
Regular Interests I-A, II-A and ZZZ, the
weighted average of
the Net WAC Rates
of the Mortgage Loans, weighted on the basis of the respective Scheduled
Principal Balance of each such Mortgage Loan as of the beginning of the Due
Period immediately preceding the related Distribution Date. With respect to
REMIC I Regular Interest I-B, the weighted
average of the Net WAC
Rates of the
Group I Loans, weighted on the basis of the respective Scheduled Principal
Balance of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date. With respect to REMIC I
Regular Interest II-B, the weighted average
of the Net WAC Rates of the Group II
Loans, weighted on the basis of the
respective Scheduled
Principal Balance
of
each such Mortgage Loan as of the beginning of the Due Period immediately
preceding the related Distribution
Date.
Underwriter:
Residential Funding Securities Corporation.
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.
20
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage
Loans.
(a) (See Section 2.01(a) of the Standard
Terms).
(b) (See Section 2.01(b) of the Standard
Terms).
(c) The Company may, in lieu of
delivering
the original of the
documents set
forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and Section
(b)(II)(ii),
(iv), (vii), (ix) and (x) (or copies
thereof as permitted by Section 2.01(b)) to
the Trustee or the Custodian or Custodians,
deliver such documents to the Master
Servicer, and the Master Servicer shall
hold such documents in trust for the use
and benefit of all present and future
Certificateholders
until such time as
is
set forth in the next sentence. Within thirty Business Days following the
earlier of (i) the receipt of the original of all of the documents or
instruments set forth in Section
2.01(b)(I)(ii), (iii), (iv) and (v) and Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies
thereof as permitted by such
Section) for any Mortgage Loan and (ii) a written
request by the
Trustee to
deliver those documents with respect to any or all of the
Mortgage Loans
then
being held by the Master Servicer,
the Master Servicer
shall deliver a complete
set of such documents to the Trustee or the
Custodian or Custodians that are the
duly appointed agent or agents of the
Trustee.
The parties hereto
agree that it is not intended that any mortgage loan
be included in the Trust that is either (i)
a "High-Cost
Home Loan" as
defined
in the New Jersey Home Ownership 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 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.
(d) (See Section 2.01(d) of the Standard
Terms).
(e) (See Section 2.01(e) of the Standard
Terms).
(f) (See Section 2.01(f) of the Standard
Terms).
(g) (See Section 2.01(g) of the Standard
Terms).
(h) (See Section 2.01(h) of the Standard
Terms).
21
<PAGE>
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), hybrid adjustable-rate
mortgage
loans with 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, except with respect
to one Mortgage Loan
representing
approximate
0.1% of the
aggregate
principal balance of
the Mortgage Laons, 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 (a) at least 35% of the Stated Principal
Balance of
the Mortgage Loan at origination if the Loan-to-Value Ratio is between
100.00% and 95.01%,
(b) 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%, (c) at least 25% of such balance if the
Loan-to-Value
Ratio is between
90.00% and 85.01% and (d) 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 4.3% of the Group I Loans by aggregate Stated
Principal Balance
as of the Cut-off Date are secured by Mortgaged
Properties located in
any one zip code area in the District of Columbia
and no more
than 1.7% of the Group II Loans by aggregate Stated
Principal Balance
as of the Cut-off Date are secured by Mortgaged
Properties located
in any one zip code
area in Utah, and no
more than
4.2% of the Group I Loans are secured by Mortgaged Properties
located in
any one zip code area
outside the District
of Columbia,
no more than
1.0% of the Group II Loans are secured by Mortgaged Properties located
in any one zip code area outside Utah;
22
<PAGE>
(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) Approximately 55.51%
of the Mortgage Loans by aggregate Stated Principal
Balance as of the Cut-off Date were underwritten under a reduced loan
documentation program,
including a no-stated
income program and a no
income/no asset program;
(x) Except with
respect to
approximately 16.89%
of the Mortgage
Loans by
aggregate Stated Principal Balance as of the Cut-off Date, the
Mortgagor
represented in its loan application with respect to the related
Mortgage
Loan that the Mortgaged Property would be owner-occupied;
(xi) None of the Mortgage
Loans is a Buy-Down 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) None of the Mortgage Loans is a Cooperative Loan; with respect to a
Mortgage Loan that is a Cooperative Loan, the Cooperative Stock that
is
pledged as
security for the Mortgage Loan is held by a person
as a
tenant-stockholder (as
defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the
Code);
(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
23
<PAGE>
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 contain in the related Mortgage File a
Destroyed Mortgage Note;
(xviii) One of the Group I representing
0.2% of the Group I
Loans has been made
to an International Borrower;
(xix) No Mortgage Loan provides for payments that
are subject to reduction by
withholding taxes
levied by any foreign
(non-United States)
sovereign
government; and
(xx) None of the Mortgage
Loans are Additional
Collateral Loans and
none of
the Mortgage Loans are Pledged Asset 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.
24
<PAGE>
Section 2.04 Representations and Warranties
of Sellers. (See Section 2.04 of the
Standard Terms)
Section 2.05 Execution and Authentication of Certificates/Issuance
of
Certificates Evidencing Interests in REMIC I.
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 and/or
the applicable REMIC,
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 Class R
Certificates
(with
respect to the Class R-I Interest) in
authorized
denominations which
together
with the REMIC I Regular Interests,
evidence the beneficial interest in REMIC I.
Section 2.06 Conveyance of REMIC I Regular
Interests; Acceptance by the Trustee.
The Company, as of the Closing Date, and concurrently with the
execution
and delivery hereof, does hereby assign without
recourse all the
right, title
and interest of the Company in and to the REMIC I Regular
Interests to the
Trustee for the benefit of the Holders of
each Class of Certificates (other than
the Class R Certificates) and the Class
R-II Interest. The
Trustee acknowledges
receipt of the REMIC I Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of all present and
future Holders of each Class of Certificates (other than the Class R
Certificates) and the Class R-II Interest. The rights of the Holders of each
Class of Certificates (other than the Class R
Certificates) and the
Class R-II
Interest to receive distributions from the proceeds of REMIC II in respect
of
such Classes, and all ownership interests
of the Holders of such Classes in such
distributions, shall be as set forth in
this Agreement.
Section 2.07 Issuance of Certificates
Evidencing Interest in REMIC II.
The Trustee
acknowledges the
assignment
to it of the REMIC I
Regular
Interests and, concurrently therewith and
in exchange therefor,
pursuant to the
written request of the Company executed by an officer of the Company, the
Trustee has executed and caused to be
authenticated and delivered to or upon the
order of the Company, all Classes of Certificates (other than the Class R
Certificates) in authorized denominations and the Class R-II Interest (as
represented by the Class R Certificates),
which evidence the beneficial interest
in the entire REMIC II.
Section 2.08 Purposes and Powers of the
Trust. (See Section 2.08 of the Standard
Terms).
25
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer. (See Section 3.01 of the
Standard Terms).
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers;
Enforcement of Subservicers' and Sellers' Obligations. (See Section
3.02
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. (See Section 3.08 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. (See Section 3.10
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. (See Section 3.14 of the
Standard Terms).
26
<PAGE>
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.
(a) (See Section 3.16(a) of the Standard
Terms).
(b) (See Section 3.16(b) of the Standard
Terms).
(c) (See Section 3.16(c) of the Standard
Terms).
(d) (See Section 3.16(d) of the Standard
Terms).
(e) (See Section 3.16(e) of the Standard
Terms).
(f) With respect to any Distribution
Date, Compensating Interest derived from
Loan Group I shall be used on such
Distribution Date (i) to cover any Prepayment
Interest Shortfalls on the Group I Loans
and (ii) then to cover any Prepayment
Interest Shortfalls on the Group II Loans,
but only to the extent not covered by
Compensating Interest derived from Loan Group II. With respect to any
Distribution Date, Compensating Interest derived from Loan Group II shall
be
used on such Distribution Date (i) to cover
any Prepayment
Interest
Shortfalls
on the Group II Loans and (ii) to cover any
Prepayment
Interest Shortfalls on
the Group I Loans, but only to the extent not covered
by Compensating
Interest
derived from Loan Group I.
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).
27
<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, to the
Master Servicer, in the case of a distribution
pursuant to Section 4.02(a)(iii)
below, and 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 shall be based on the
aggregate of the
Percentage
Interests
represented by Certificates of the
applicable Class held
by such Holder) of the
following amounts, in the following order
of priority (subject to the provisions
of Sections 4.02(b) and 4.02(i) below), in each case to the extent of the
related Available Distribution Amount:
(i) (U) from the
Available Distribution
Amount related to the
Group I Loans, to the Group I Certificates, on a pro rata basis
based on the Accrued Certificate Interest payable on such
Certificates with
respect to 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 "Group I Senior
Interest
Distribution Amount");
(V) from the Available
Distribution Amount related to the
Group II Loans, to the Group II Certificates, on a pro rata
basis
based on Accrued Certificate Interest payable on such
Certificates with
respect to 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 "Group II Senior
Interest
Distribution Amount"); and
(ii) to the related
Senior Certificates,
in the priorities
and
amounts set forth in Section 4.02(b), the sum of the following
(applied
to reduce the Certificate Principal Balances of such Senior
Certificates, as applicable):
(A) the related 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 in the
related Loan Group,
whether or not
received on or prior
to the related
Determination
Date,
minus the principal
portion of any related
Debt Service
Reduction which
together with other Bankruptcy Losses
exceeds the Bankruptcy Amount;
28
<PAGE>
(2) the Stated Principal Balance of any Mortgage
Loan in the related
Loan Group repurchased
during the
preceding calendar
month (or deemed to have been so
repurchased in accordance with Section 3.07(b)) pursuant
to Section 2.02,
2.03, 2.04 or 4.07 and the amount of
any shortfall
deposited in the Custodial Account in
connection with the
substitution of a Deleted Mortgage
Loan from the related
Loan Group
pursuant to Section
2.03 or 2.04 during the preceding calendar month; and
(3) the principal portion of all other
unscheduled collections with respect to the related Loan
Group (other
than Principal Prepayments in Full and
Curtailments and
amounts received in
connection with a
Cash Liquidation or
REO Disposition of a
Mortgage Loan
in the related Loan Group described in Section
4.02(a)(ii)(B) of
this Series Supplement, including
without limitation
any related 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)) 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;
(B) with respect to each Mortgage Loan in the related Loan
Group 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))
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 related Senior
Percentage for such
Distribution Date times the Stated Principal
Balance of
such Mortgage Loan and (b) the related 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;
(C) the related 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 with
respect to the related Loan Group
received in the preceding calendar month;
(D) any amounts
described in subsection (ii), 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 (D) to the extent that such amounts are not attributable
to Realized Losses
which have been allocated to the Subordinate
Certificates;
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<PAGE>
(E) amounts required to be distributed to the Holders of
the Group I Certificates and Group II Certificates, as
applicable, pursuant to Section 4.02(h); minus
(F) the related Capitalization Reimbursement Amount for
such Distribution Date
multiplied by a fraction, the numerator
of which is the related 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
derived from the related Available
Distribution Amount
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 the Subordinate Principal Distribution Amount derived from
each Loan
Group for such Class of Certificates for such Distribution Date,
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 the Subordinate Principal Distribution Amount derived from
each
Loan Group for such Class of Certificates for such Distribution Date,
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 the Subordinate Principal Distribution Amount derived from
each
Loan Group for such Class of Certificates for such Distribution Date,
applied in reduction of the Certificate Principal Balance of the Class
M-3 Certificates;
30
<PAGE>
(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 the
Subordinate Principal Distribution Amount derived from each
Loan Group for such Class of Certificates for such Distribution Date,
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 the Subordinate Principal Distribution Amount derived from
each
Loan Group for such Class of Certificates for such Distribution Date,
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 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;
(xv) to the Holders
of the Class B-3 Certificates, an amount
equal to the Subordinate Principal Distribution Amount derived from
each
Loan Group for such Class of Certificates for such Distribution Date,
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 for the related Loan Group 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
for each Loan Group
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; and
(xvii) to the Class R Certificates, the balance, if any, of the
Available Distribution Amount for each Loan Group.
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
31
<PAGE>
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 will be made as
follows:
(i) the Group I Senior
Principal Distribution
Amount shall be
distributed to
the Class A-I Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
(ii) the Group II Senior Principal Distribution Amount shall be
distributed to the Class R Certificates, until the Certificate
Principal
Balances thereof have
been reduced to zero, and any remaining amount to
the Class A-II
Certificates until the
Certificate
Principal Balance
thereof has been reduced to zero.
(c) 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.
(d) 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") 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.
32
<PAGE>
(e) 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 the next Distribution
Date, the Master
Servicer shall, no later
than the Determination Date in the month of
such final distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business
Days after such
Determination Date, mail on such date 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).
(f) On any
Distribution Date
prior to the
occurrence
of the Credit
Support Depletion Date that occurs after the reduction of the aggregate
Certificate Principal Balance of a Certificate Group to
zero, the Certificates
relating to the remaining Certificate
Groups will be entitled to receive 100% of
the prepayments on the Mortgage Loans in the Loan Group related to the
Certificate Group that has been fully paid,
which amount shall be allocated, pro
rata, between those Certificate Groups based on the aggregate Certificate
Principal Balance of the related
Certificates.
Such amounts allocated to a
Certificate Group shall be treated as part
of the related Available Distribution
Amount and distributed as part of the related
Senior Principal Distribution
Amount in accordance with the priorities set forth in 4.02(b) above, in
reduction of such Certificate Principal
Balances. Notwithstanding the foregoing,
remaining Certificate Group will not be
entitled to receive
prepayments on the
Mortgage Loans in a Loan Group related to
Certificate Group that
has been fully
paid if the following two conditions are
satisfied: (1) the
weighted average of
the Subordinate Percentages for all Loan Groups for such
Distribution
Date,
weighted on the basis of the Stated
Principal Balances of
the Mortgage Loans in
the related Loan Group, is at least two times the
weighted average of the
initial Subordinate Percentages for all Loan Groups,
calculated on that
basis
and (2) the outstanding principal balance of the Mortgage Loans in all Loan
Groups delinquent 60 days or more averaged over the last six months, as a
percentage of the aggregate outstanding Certificate Principal Balance of the
Class M Certificates and Class B
Certificates, is less than 50%.
33
<PAGE>
Section 4.03 Statements to Certificateholders;
Statements
to the 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, such
Realized Losses
shall be allocated, in the case of such
Realized Losses on the Group I Loans, to
the Class A-I Certificates until the Certificate Principal Balance thereof has
been reduced to zero, in the case of such
Realized Losses on the Group II Loans,
pro rata to the Class A-II and the Class R Certificates. The Group I Senior
Percentage or Group II Senior Percentage (as applicable) of any Excess
Special
Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses or
Extraordinary
Losses on the Mortgage Loans shall be allocated (A) in the case of a Group I
Loan, to the Group I Certificates and (B)
in the case of a Group II Loan, to the
Group II Certificates on a pro rata basis.
The remainder of such Realized Losses
will be allocated among the Class M
Certificates and Class B Certificates, on a
pro rata basis.
On any Distribution Date, Realized Losses will be allocated as set
forth
herein before 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
34
<PAGE>
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.
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. (See Section 4.07 of
the Standard Terms)
Section 4.08 Surety Bond. (See Section
4.08 of the Standard Terms)
35
<PAGE>
ARTICLE V
THE CERTIFICATES
(SEE ARTICLE V OF THE STANDARD TERMS)
36
<PAGE>
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
(SEE ARTICLE VI OF THE STANDARD TERMS)
37
<PAGE>
ARTICLE VII
DEFAULT
(SEE ARTICLE VII OF THE STANDARD TERMS)
38
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
(SEE ARTICLE VIII OF THE STANDARD TERMS)
39
<PAGE>
ARTICLE IX
TERMINATION
(SEE ARTICLE IX OF THE STANDARD TERMS)
40
<PAGE>
ARTICLE X
REMIC PROVISIONS
Section 10.05 REMIC Administration. (See Section 10.01 of the Standard
Terms)
Section 10.06 Master Servicer; REMIC Administrator and Trustee
Indemnification.
(See Section 10.02 of the Standard Terms)
Section 10.07 Designation of REMICs.
The REMIC
Administrator will
make an election to treat the segregated
pool of assets described in the definition of REMIC I (as defined herein)
(including the Mortgage Loans but excluding
the Initial Monthly
Payment Fund),
and subject to this Agreement, as a REMIC for federal income tax
purposes. The
REMIC Administrator will make an election
to treat the segregated pool of assets
consisting of the REMIC I Regular
Interests (and
excluding the Initial
Monthly
Payment Fund), as a REMIC (REMIC II) for
federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC
I and
the Class R Certificates (with respect to the Class R-I
Interest) will be
the
sole "residual interest" in REMIC I for purposes
of the REMIC
Provisions (as
defined in the Standard Terms) under
federal income tax law.
The Class A-I, Class
A-II, Class M-1, Class
M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates will be "regular interests" in REMIC II,
and the Class R Certificates (with respect to the Class R-II
Interest) will
represent ownership of the "residual
interest" therein for purposes of the REMIC
Provisions.
Section 10.08 Distributions on the REMIC I
Regular Interests.
(a) On each Distribution Date the Trustee shall be deemed to distribute to
itself, as the holder of the REMIC I
Regular Interests,
Uncertificated
Accrued
Interest on the REMIC I Regular Interests
for such Distribution
Date, plus any
Uncertificated Accrued Interest thereon remaining unpaid from any previous
Distribution Date.
(b) Distributions of principal shall
be deemed to be made from amounts received
on the Mortgage Loans to the REMIC I
Regular Interests, first, so as to keep the
Uncertificated Principal Balance of each REMIC I Regular
Interest ending
with
the designation "B" equal to 0.01% of the
aggregate Scheduled
Principal Balance
of the Mortgage Loans in the related Group; second, to each REMIC I Regular
Interest ending with the designation "A,"
so that the
Uncertificated
Principal
Balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of
(x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Group over (y) the Current
Principal Amount of
the Senior
Certificates
in the related Group (except that if any such
excess is a larger number than in
the preceding distribution period, the least amount of principal shall be
distributed to such REMIC I Regular
Interests such that the REMIC I Subordinated
Balance Ratio is maintained); and third, any remaining principal to REMIC I
Regular Interest ZZZ. Realized Losses on the Mortgage
Loans shall be
applied
after all distributions have been made on
each Distribution Date first, so as to
keep the Uncertificated Principal Balance of each REMIC I Regular Interest
ending with the designation "B" equal to 0.01% of the aggregate Scheduled
41
<PAGE>
Principal Balance of the Mortgage Loans in
the related Group;
second, to each
REMIC I Regular Interest ending with the designation "A," so that the
Uncertificated Principal Balance of each such
REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate
Scheduled Principal Balance of the
Mortgage Loans in the related Group over
(y) the Current Principal Amount of the
Senior Certificates in the related Group (except that if any such
excess is a
larger number than in the preceding distribution period, the least amount of
Realized Losses shall be applied to such
REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any remaining
Realized Losses on the Mortgage Loans shall be allocated to REMIC I Regular
Interest ZZZ.
Section 10.09 Compliance with Withholding
Requirements.
Notwithstanding any
other provision of this Agreement, the Trustee or
any Paying Agent, as applicable, shall comply with all federal
withholding
requirements respecting payments to
Certificateholders,
including interest
or
original issue discount payments or advances thereof that the Trustee or
any
Paying Agent, as applicable, reasonably believes are applicable
under the Code.
The consent of Certificateholders shall not
be required for such withholding. In
the event the Trustee or any Paying
Agent, as applicable, does withhold any
amount from interest or original issue
discount payments or
advances thereof to
any Certificateholder pursuant to federal
withholding requirements, the Trustee
or any Paying Agent, as applicable, shall indicate the amount withheld
to such
Certificateholder pursuant to the terms of
such requirements.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.05 Amendment. (See Section 11.01 of the Standard
Terms)
Section 11.06 Recordation of Agreement;
Counterparts. (See
Section 11.02 of the
Standard Terms)
Section 11.07 Limitation on Rights of
Certificateholders.
(See Section 11.03 of
the Standard Terms)
Section 11.08 Governing Law. (See Section 11.04 of the Standard
Terms)
Section 11.09 Notices. All demands and
notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or
mailed by registered
mail, postage
prepaid (except for
notices to the
Trustee which
shall be deemed to have been duly given only when
received), to the
appropriate address
for each recipient listed in the
table below or, in each case, such other address as may hereafter be
furnished in
writing to the Master Servicer, the Trustee and the
Company, as applicable:
RECIPIENT
ADDRESS
Company
8400 Normandale Lake Boulevard
Suite 250, Minneapolis, Minnesota 55437,
Attention: President
Master Servicer
2255 N. Ontario Street, Suite 400
Burbank, California 91504-2130,
Attention: Managing Director/Master Servicing
Trustee
Corporate Trust Office
1761 East St. Andrew Place
Santa Ana, California 92705-4934,
Attention: Residential
Accredit Loans, Inc.
Series 2005-QA5
The Trustee designates its offices located at
c/o DTC Transfer
Services, 55 Water
Street,
Jeanette Street Park Entrance, New York, New
York 10041, for the
purposes of Section 8.12
of the Standard Terms
Moody's Investors Service, Inc.
99 Church
Street, 4th Floor
New York, New York 10004
Standard & Poor's Ratings
55 Water Street
Services, a division of The
New York, New York 10041
McGraw-Hill Companies, Inc.
42
<PAGE>
Any notice required or permitted to be mailed
to a Certificateholder
shall be
given by first class mail, postage prepaid, at the address of such holder
as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder
receives such notice.
Section 11.10 Required Notices to Rating Agency and
Subservicer.
(See Section
11.06 of the Standard Terms)
Section 11.11 Severability of Provisions. (See Section 11.07 of the
Standard
Terms)
Section 11.12 Supplemental Provisions for Resecuritization.
(See Section 11.08
of the Standard Terms)
Section 11.13 Allocation of Voting Rights.
99% of all of the Voting Rights shall be allocated among Holders of
Certificates, other than the Class R Certificates, in proportion to the
outstanding Certificate Principal Balances
of their respective Certificates, and
1.0% of all Voting Rights shall be allocated among the Holders of the Class
R
Certificates, in accordance with their
respective Percentage Interests.
43
<PAGE>
Section 11.14 No Petition.
The Depositor, Master
Servicer and the
Trustee, by entering
into this
Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at
any time institute
against the Trust
Fund, or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or
state bankruptcy or
similar law
in connection with any obligation with respect to the Certificates or this
Agreement.
44
<PAGE>
IN WITNESS WHEREOF,
the Company,
the Master
Servicer and the
Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the day and
year first above written.
RESIDENTIAL ACCREDIT LOANS, INC.
[Seal]
By:__________________________________
Name: Benita Bjorgo
Title: Vice
President
Attest: ____________________
Name: Pieter VanZyl
Title: Vice
President
RESIDENTIAL FUNDING CORPORATION
[Seal]
By:__________________________________
Name: Pieter VanZyl
Title: Associate
Attest: ____________________
Name: Benita Bjorgo</
