EXECUTION COPY
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RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
DATED AS OF JUNE 1, 2005,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of August 1, 2004
Mortgage Asset-Backed Pass-Through Certificates
Series 2005-QS7
================================================================================
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
ARTICLE I
DEFINITIONS..................................................................4
Section 1.01.
Definitions...........................................................4
Section 1.02. Use of Words and
Phrases.............................................22
Section 1.03. Determination of
LIBOR...............................................22
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES.................24
Section 2.01. Conveyance of Mortgage
Loans.........................................24
Section 2.02. Acceptance by Trustee. (See Section 2.02 of the Standard
Terms).....25
Section 2.03. Representations, Warranties and Covenants of the
Master Servicer
and the
Company......................................................25
Section 2.04. Representations and Warranties of Sellers.(See
Section 2.04 of
the Standard
Terms)..................................................28
Section 2.05. Execution and Authentication of Certificates/Issuance
of
Certificates.........................................................28
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II
Regular
Interests; Acceptance by the
Trustee.................................28
Section 2.07. Issuance of Certificates Evidencing Interest in REMIC
II ............28
Section 2.08. Purposes and Powers of the Trust. (See Section 2.08
of the
Standard
Terms)......................................................29
ARTICLE III ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS.................................30
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS..............................................31
Section 4.01. Certificate Account. (See Section 4.01 of the Standard
Terms).......31
Section 4.02.
Distributions........................................................31
Section 4.03. Statements to Certificateholders; Statements to the
Rating
Agencies; Exchange Act Reporting. (See Section 4.03 of the
Standard
Terms)......................................................40
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)......................................................40
Section 4.05. Allocation of Realized
Losses........................................40
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged
Property.
(See Section 4.06 of the Standard
Terms).............................42
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(See Section
4.07 of the Standard
Terms)..........................................42
Section 4.08. Surety Bond. (See Section 4.08 of the Standard
Terms)................42
Section 4.09. Reserve
Fund.........................................................42
ARTICLE V THE
CERTIFICATES............................................................44
Section 5.01. The
Certificates.....................................................44
Section 5.02. Registration of Transfer and Exchange of
Certificates(See
Section 5.02 of the Standard
Terms)..................................46
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates(See
Section
5.03 of the Standard
Terms)..........................................46
Section 5.04. Persons Deemed Owners (See Section 5.04 of the
Standard Terms).......46
Section 5.05. Appointment of Paying Agent (See Section 5.04 of the
Standard
Terms)...............................................................46
Section 5.06. U.S.A. Patriot Act Compliance 82 (See Section 5.05 of
the
Standard
Terms)......................................................46
ARTICLE VI THE COMPANY AND
THE MASTER SERVICER.........................................47
ARTICLE VII
DEFAULT.....................................................................48
ARTICLE VIII CONCERNING THE
TRUSTEE......................................................49
ARTICLE IX
TERMINATION.................................................................50
Section 9.01 Optional
Purchase by the Master
Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or Liquidation
of All Mortgage
Loans................................................50
Section 9.02
Additional Termination Requirements. (See Section 9.02 of the
Standard
Terms)......................................................50
Section 9.03
Termination of Multiple REMICs. (See Section 9.03 of the
Standard
Terms)......................................................50
ARTICLE X REMIC
PROVISIONS............................................................51
Section 10.01.REMIC Administration. (See Section 10.01 of the Standard
Terms).....51
Section 10.02.Master Servicer; REMIC Administrator and Trustee
Indemnification. (See
Section 10.02 of the Standard Terms)..........51
Section 10.03.Designation of
REMIC.................................................51
Section 10.04.Distributions on the Uncertificated REMIC I and REMIC
II
Regular
Interests....................................................51
Section 10.05.Compliance with Withholding
Requirements.............................53
ARTICLE XI MISCELLANEOUS
PROVISIONS....................................................54
Section 11.01.Amendment. (See Section 11.01 of the Standard
Terms)................54
Section 11.02.Recordation of Agreement; Counterparts. (See Section 11.02 of
the Standard
Terms)..................................................54
Section 11.03.Limitation on Rights of Certificateholders.
(See Section 11.03
of the Standard
Terms)...............................................54
Section 11.04.Governing Law. (See Section 11.04 of the Standard
Terms)............54
Section
11.05.Notices..............................................................54
Section 11.06.Required Notices to Rating Agency and Subservicer.
(See
Section 11.06 of the Standard
Terms).................................55
Section 11.07.Severability of Provisions. (See Section 11.07 of the
Standard
Terms)...............................................................55
Section 11.08.Supplemental Provisions for Resecuritization.
(See Section
11.08 of the Standard
Terms).........................................55
Section 11.09.Allocation of Voting
Rights..........................................55
Section 11.10.No
Petition..........................................................55
</TABLE>
<PAGE>
EXHIBITS
Exhibit One:
Mortgage Loan Schedule
Exhibit Two:
Schedule of Discount Fractions
Exhibit Three:
Information to be Included in
Monthly Distribution Date Statement
Exhibit Four:
Standard Terms of Pooling and Servicing
Agreement Dated as of August 1, 2004
<PAGE>
This is a Series
Supplement, dated
as of June 1,
2005 (the "Series
Supplement"), to the Standard Terms of
Pooling and Servicing Agreement, dated as
of August 1, 2004 and attached as Exhibit
Four 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 Mortgage Loans. As provided herein, the REMIC
Administrator will make an election to treat the entire segregated pool of
assets described in the definition of
Trust Fund, and subject to this Agreement
(including the Mortgage Loans), as two real
estate mortgage
investment conduits
(each a "REMIC") for federal income tax
purposes.
The terms and provisions of the Standard Terms are hereby incorporated
by reference herein as though set forth in
full herein. If any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Standard Terms, the terms and provisions of this Series
Supplement shall govern. 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.
1
<PAGE>
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>
Fitch/
Aggregate Initial
---------------
Pass-Through
Certificate
Maturity
Moody's/
Minimum
Designation
Rate Principal
Balance
Features(1)
Date
S&P
Denominations(2)
<S> <C>
<C>
<C> <C>
<C>
A-1
5.50%
Senior/ Fixed Rate June
25, 2035 AAA/Aaa/NA
$25,000.00
$148,100,000.00
A-2
5.50%
$12,550,000.00
Senior/ Fixed Rate June
25, 2035 AAA/Aaa/NA
$25,000.00
A-3
Adjustable $62,517,000.00
Senior/ Super
June 25, 2035 AAA/Aaa/AAA
$25,000.00
Rate(3)
Senior/Floater/Adjustable
Rate
A-4
Adjustable
$0.00
Senior/ Interest June 25, 2035
AAA/Aaa/NA
$2,000,000.00
Rate(3)
Only/Inverse
Floater/Adjustable Rate
A-5
5.50%
$23,827,000.00
Senior/ Super
June 25, 2035 AAA/Aaa/NA
$25,000.00
Senior/Lockout/Fixed Rate
A-6
5.50%
$1,189,000.00
Senior/ Senior
June 25, 2035 AAA/Aa1/NA
$25,000.00
Support/Lockout/Fixed Rate
A-7
Adjustable
$1,983,000.00
Senior/ Senior
June 25, 2035 AAA/Aa1/NA
$25,000.00
Rate(3)
Support/Floater/Adjustable
Rate
Class CB
5.50%
$99,840,000.00
Senior/Fixed Rate
June 25, 2035 AAA/Aaa/NA
$25,000.00
Class A-P
0.00%
$548,115.22
Senior/Principal Only June 25,
2035
AAA/Aaa/NA
$25,000.00
Class A-V
Variable
$0.00
Senior/Interest Only/ June 25,
2035
AAA/Aaa/NA
$2,000,000.00
Rate(4)
Variable Rate
Class R-I
5.50%
$100.00
Senior/Residual/Fixed Rate June 25, 2035 AAA/Aaa/NA
(5)
Class R-II
5.50%
$100.00
Senior/Residual/Fixed Rate June 25, 2035 AAA/Aaa/NA
(5)
Class M-1
5.50%
$9,619,500.00
Mezzanine/Fixed Rate June 25,
2035 AA/NA/NA
$25,000.00
Class M-2
5.50%
$3,329,900.00
Mezzanine/Fixed Rate June 25,
2035
A/NA/NA
$250,000.00
Class M-3
5.50%
$1,849,900.00
Mezzanine/Fixed Rate June 25,
2035 BBB/NA/NA
$250,000.00
Class B-1
5.50% $1,849,900.00
Subordinate/Fixed Rate June 25, 2035
BB/NA/NA
$250,000.00
Class B-2
5.50%
$1,110,000.00
Subordinate/Fixed Rate June 25, 2035
B/NA/NA
$250,000.00
Class B-3
5.50%
$1,665,647.06
Subordinate/Fixed Rate June 25, 2035
NA/NA/NA
$250,000.00
</TABLE>
--------
(1)
The Certificates,
other than the Class B
and Class R
Certificates
shall be Book-Entry Certificates. The Class B and Class R
Certificates shall be
delivered to the holders thereof in physical
form.
(2)
The Certificates,
other than the Class R Certificates, shall be
issuable in minimum
dollar denominations
as indicated above (by
Certificate Principal Balance or Notional Amount, as applicable)
and
integral multiples
of $1 (or $1,000 in the case of the Class
A-P,
Class B-1, Class B-2 and Class B-3 Certificates) in excess
thereof,
except that one
Certificate of any of
the Class A-P and Class B-1,
Class B-2 and Class B-3 Certificates that contain an uneven
multiple
of $1,000 shall be issued in a denomination equal to the sum of the
related minimum
denomination
set forth above and such uneven
multiple for
such Class or the sum of such denomination and an
integral multiple of $1,000.
(3)
-------------------------------------------------------------------------
Adjustable Rates: Initial
Formula
Maximum
Minimum
--------------------------------------------
----------------------------
Class A-3
3.85% LIBOR + 0.75%
Subject to the
0.75%
available funds
cap
--------------------------------------------
----------------------------
Class A-4
1.65% 4.75% - LIBOR
4.75%
0.00%
--------------------------------------------
----------------------------
Class A-7
3.85% LIBOR + 0.75%
Subject to the
0.75%
available funds
cap
--------------------------------------------
----------------------------
The Class A-4 Certificates do not have a
certificate principal
balance. For the
purpose of calculating interest payments,
interest on the Class A-4 Certificates
will accrue on a notional amount equal to
the sum of the
Certificate
Principal
Balances of the Class A-3 and Class A-7
Certificates
immediately
prior to the
related Distribution Date.
(4)
The initial
Pass-Through
Rate on the
Class A-V Certificates is
0.5561%.
(5)
Each class of the Class R Certificates shall be issuable in minimum
denominations of not less than a 20% Percentage Interest;
provided,
however, that
one Class R-I Certificate and one Class R-II
Certificate will be issuable to Residential Funding as "tax matters
person" pursuant
to Sections 10.01(c) and (e) in a minimum
denomination
representing a
Percentage
Interest of not less
than
0.01%.
2
<PAGE>
Mortgage Loans have an
aggregate principal balance as of the Cut-off
Date of $369,979,162.28.
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.
Adjustable Rate
Certificates:
Any of the Class A-3,
Class A-4 and the
Class A-7 Certificates.
Available Distribution Amount: As to any Distribution Date and each
Loan
Group, an amount equal to (a) the sum of
(i) the amount relating to the Mortgage
Loans on deposit in the Custodial Account as of the close of
business on the
immediately preceding Determination Date, including any
Subsequent
Recoveries,
and amounts deposited in the Custodial Account in connection with the
substitution of Qualified Substitute Mortgage Loans, (ii) the amount of any
Advance made on the immediately preceding Certificate Account Deposit Date,
(iii) any amount deposited in the
Certificate Account on the related Certificate
Account Deposit Date pursuant to the second
paragraph of Section
3.12(a), (iv)
any amount deposited in the Certificate
Account pursuant to Section 4.07, (v)
any amount that the Master Servicer is not permitted to withdraw from the
Custodial Account or the Certificate
Account pursuant to
Section 3.16(e),
(vi)
any amount received by the Trustee pursuant to the Surety Bond in
respect of
such Distribution Date and (vii) the
proceeds of any Pledged Assets received by
the Master Servicer and any additional amounts to be included with
respect to
such Loan Group, as applicable,
pursuant to Section
4.02(j), reduced by (b) the
sum as of the close of business on the
immediately preceding
Determination Date
of (w) aggregate Foreclosure Profits, (x) the Amount Held for Future
Distribution, and (y) amounts permitted to be withdrawn by the
Master Servicer
from the Custodial Account in respect of the Mortgage
Loans in the related Loan
Group pursuant to clauses (ii)-(x),
inclusive, of Section 3.10(a).
Available Funds Cap: With respect to any Distribution Date on or before
the Distribution Date in June 2013 and the Class
A-3 Certificates or the Class
A-7 Certificates, 5.50% per annum payable
from amounts due on the group I loans,
plus amounts, if any, paid pursuant to the Yield Maintenance Agreement and
allocated to that Class of certificates, expressed as a per annum rate. With
respect to any distribution date after June 2013 and the Class
A-3 Certificates
or the Class A-7 Certificates, 5.50% per
annum.
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)
$154,925 over (B) the aggregate amount of
Bankruptcy Losses
allocated solely to
one or more specific Classes of Certificates in
accordance with Section 4.05 of
this Series Supplement. As of any date of determination on or after the
first
anniversary of the Cut-off Date, an amount
equal to the excess, if any, of
(1) the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most
recent anniversary of the Cut-off Date coinciding with or preceding
such
date of determination (or, if such date of determination is an
anniversary of the Cut-off Date, the Business Day immediately
preceding
such
date of determination) (for purposes of this definition, the
"Relevant Anniversary") and (b) the greatest of
4
<PAGE>
(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;
(B) the greater of (i) the product of (x) an amount equal
to the largest
difference in the related Monthly Payment for any
Non-Primary Residence
Loan remaining in the Mortgage Pool (other
than Additional
Collateral
Loans)
which had an original
Loan-to-Value Ratio of
80% or greater that
would result if
the
Net Mortgage
Rate thereof was equal to the weighted average
(based on the principal balance of the Mortgage
Loans as of the
Relevant Anniversary)
of the Net Mortgage
Rates of all Mortgage
Loans as of the Relevant Anniversary less 1.25% per annum,
(y) a
number equal to the weighted average remaining term to maturity,
in months, of all
Non-Primary
Residence Loans
remaining in the
Mortgage Pool as of
the Relevant
Anniversary, and (z)
one plus
the quotient of the
number of all
Non-Primary Residence
Loans
remaining in the
Mortgage Pool divided by the total number of
Outstanding Mortgage
Loans in the Mortgage Pool as of the
Relevant Anniversary, and (ii) $50,000; and
(C) 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) $100,000,
over (2) the aggregate
amount of Bankruptcy Losses allocated
solely to one or more
specific Classes of
Certificates
in accordance
with Section 4.05 since the Relevant Anniversary.
The Bankruptcy
Amount may be further reduced by the Master Servicer
(including accelerating the manner in which
such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i)
obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
5
<PAGE>
Capitalization
Reimbursement Amount:
As to any Distribution
Date and
Loan Group, the amount of Advances or
Servicing Advances
that were added to the
Stated Principal Balance of the Mortgage Loans in such Loan Group during
the
prior calendar month and reimbursed to the
Master Servicer or
Subservicer on or
prior to such Distribution Date pursuant to Section 3.10(a)(vii), plus the
Capitalization Reimbursement Shortfall Amount remaining
unreimbursed from
any
prior Distribution Date and reimbursed
to the Master Servicer or Subservicer on
or prior to such Distribution Date.
Capitalization
Reimbursement
Shortfall Amount: As
to any Distribution
Date and Loan Group, the amount, if any, by which the amount of Advances
or
Servicing Advances that were added to the Stated Principal Balance of the
Mortgage Loans in such Loan Group during
the preceding calendar
month exceeds
the amount of principal payments on the
Mortgage Loans included in the Available
Distribution Amount for that Loan Group and
Distribution Date.
Certificate: Any
Class A, Class CB, Class M, Class B or Class R
Certificate.
Certificate Group:
With respect to (i) Loan Group I, the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7 and Class R-I
Certificates, and (ii) Loan Group II, the
Class CB and Class R-II Certificates.
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-QS7" and which must be an Eligible
Account.
Certificate Policy:
None.
Class A Certificate:
Any one of the Class
A-1, Class A-2,
Class A-3,
Class A-4, Class A-5, Class A-6, Class A-6,
Class A-V or Class A-P Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed to the
Standard Terms as Exhibit A.
Class A-P Collection Shortfall: With respect to the Cash
Liquidation or
REO Disposition of a Discount Mortgage Loan, any Distribution
Date and any Loan
Group, the extent to which the amount
described in clause (C) of the definition
of Class A-P Principal Distribution Amount for such Loan
Group is less than the
amount described in clause (C)(1) of such
definition.
Class A-P Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount
equal to the aggregate of:
(A) the related
Discount Fraction of
the principal
portion of
each Monthly Payment on each Discount Mortgage Loan in the related
Loan
Group due during the related Due Period, whether or not received on or
prior to the related
Determination Date, minus the Discount Fraction of
the principal
portion of any
related Debt Service Reduction which
together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
6
<PAGE>
(B) the related Discount Fraction of the principal portion of
all
unscheduled
collections on each
Discount Mortgage Loan
in the related
Loan Group received during the preceding calendar month or, in the case
of Principal
Prepayments in Full, during the related Prepayment Period
(other than amounts
received in connection
with a Cash
Liquidation or
REO Disposition
of a Discount
Mortgage Loan described in clause (C)
below),
including
Principal
Prepayments in
Full, Curtailments,
Subsequent Recoveries
and repurchases
(including
deemed repurchases
under Section
3.07(b)) of Discount
Mortgage Loan in the related Loan
Group (or, in the case of a substitution of a Deleted Mortgage Loan in
the related
Loan Group, the Discount Fraction of the amount of any
shortfall deposited in
the Custodial Account
in connection
with such
substitution);
(C) in connection with the Cash Liquidation or REO Disposition
of
a Discount Mortgage
Loan in the related Loan Group that occurred during
the preceding calendar month (or was deemed to have occurred during
such
period in accordance
with Section
3.07(b)) that did not
result in any
Excess Special Hazard
Losses, Excess Fraud
Losses, Excess
Bankruptcy
Losses or Extraordinary Losses, an amount equal to the lesser of
(1) the
applicable Discount
Fraction of the Stated
Principal Balance of such
Discount Mortgage Loan
immediately prior to
such Distribution Date and
(2) the aggregate amount of the collections on such Mortgage Loan
to the
extent applied as recoveries of principal;
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through (C)
above)
that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for such
Distribution Date
and Loan Group and the amount of any Class A-P
Collection Shortfalls
for such Loan
Group remaining unpaid for all
previous Distribution
Dates, but only to the extent of the Eligible
Funds for such Distribution Date; minus
(F) the related Discount Fraction of the portion of the
Capitalization
Reimbursement Amount for the related Loan Group for such
Distribution Date, if any, related to each Discount Mortgage Loan
in the
related
Loan Group.
Notwithstanding the foregoing, with respect to any Distribution
Date on
and after the Credit Support Depletion Date, the Class A-P Principal
Distribution Amount for a Loan Group shall
equal the related Discount Fraction
of the principal portion of each Monthly Payment on
each Discount Mortgage Loan
in the related Loan Group received or advanced prior to the related
Determination Date and not previously
distributed
minus the related
Discount
Fraction of the portion of the related
Capitalization
Reimbursement Amount
for
such Distribution Date, if any, related to each
Discount Mortgage Loan
in the
related Loan Group.
Class CB Certificates: The Class CB Certificates.
Class I Percentage: As
of any Distribution Date, the lesser of 100% and
a fraction, expressed as a percentage,
the numerator of which
is the aggregate
Certificate Principal Balance of the Class
A-1, Class A-2, Class A-3, Class A-5,
Class A-6, Class A-7 and Class R-I Certificates immediately prior to such
Distribution Date and the denominator of
which is the aggregate Stated Principal
Balance of all of the Mortgage Loans (or
related REO Properties) (other than the
related Discount Fraction of each Discount Mortgage Loan) in Loan Group I
immediately prior to such Distribution
Date.
7
<PAGE>
Class II Percentage: As of any Distribution Date, the lesser of
100% and
a fraction, expressed as a percentage,
the numerator of which
is the aggregate
Certificate Principal Balance of the Class CB
Certificates and the
Class R-II
Certificates immediately prior to such
Distribution Date and the denominator of
which is the aggregate Stated Principal
Balance of all of the Mortgage Loans (or
related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) in Loan Group II
immediately prior to such Distribution
Date.
Class R Certificate:
Any one of the Class
R-I Certificates
and Class
R-II Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates
executed by
the Trustee and authenticated by the
Certificate Registrar
substantially in the
form annexed to the Standard Terms as Exhibit D and
evidencing
an interest
designated as a "residual interest" in REMIC I for purposes of the REMIC
Provisions.
Class R-II Certificate: Any one of the Class R-II
Certificates executed
by the Trustee and authenticated by the
Certificate Registrar
substantially in
the form annexed to the Standard
Terms as Exhibit D and
evidencing an
interest
designated as a "residual interest" in REMIC II for purposes of the REMIC
Provisions.
Closing Date: June 29,
2005.
Corporate Trust Office: The principal office of the
Trustee at which at
any particular time its corporate trust business
with respect to this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at 1761 East St.
Andrew Place, Santa Ana, California
92705-4934, Attention: Residential Funding
Corporation Series 2005-QS7.
Cut-off Date: June 1,
2005.
Determination Date:
With respect to any
Distribution Date, the
second
Business Day prior to each Distribution
Date.
Discount Net Mortgage Rate: 5.50% per annum.
Due Period: With
respect to each Distribution Date, the calendar month
in which such Distribution Date occurs.
Eligible Funds: With
respect to any
Distribution Date and
Loan Group,
such Loan Group's portion of an amount that is
allocated among the
Loan Groups
pro rata, based on the aggregate unpaid Class A-P Shortfalls for each Loan
Group, which amount is equal to the excess of (i) the sum of the Available
Distribution Amount for both Loan Groups over (ii) the sum of, for both
Loan
Groups, the Senior Interest Distribution
Amounts, Senior
Principal Distribution
Amounts (determined without regard to Section
4.02(a)(ii)(Y)(D)
hereof), the
Class A-P Principal Distribution Amounts (determined without regard to
clause
(E) of the definition of "Class A-P
Principal Distribution Amount") and (iv) the
aggregate amount of Accrued Certificate Interest on the Class M, Class B-1
and
Class B-2 Certificates.
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<PAGE>
Floater Certificates:
Any of the Class A-3 or A-7 Certificates
Fraud Loss Amount:
As of any date of
determination
after the Cut-off
Date, an amount equal to: (X) prior to the
first anniversary of the Cut-off Date
an amount equal to 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.
Group I Loans: The
Mortgage Loans designated on the Mortgage Loan
Schedule as Group I Loans.
Group II Loans: The
Mortgage Loans
designated
on the Mortgage Loan
Schedule as Group II Loans.
Initial Monthly Payment Fund: $87,468, representing scheduled
principal
amortization and interest at the Net Mortgage
Rate payable during the July 2005
Due Period, for those Mortgage Loans for which
the Trustee will not be entitled
to receive such payment.
Initial
Notional Amount: With respect to the Class A-4
Certificates,
$64,500,000. With respect to the Class A-V
Certificates
or Subclass
thereof
issued pursuant to Section 5.01(c), the
aggregate Cut-off Date Principal Balance
of the Mortgage Loans corresponding to the Uncertificated REMIC I Regular
Interests Z represented by such Class or
Subclass on such date.
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<PAGE>
Initial Subordinate
Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Certificate Principal Balance of such Class
of Subordinate
Certificates divided
by the aggregate Stated Principal Balance of all the Mortgage Loans
as of the
Cut-off Date as follows:
Class M-1: 2.60%
Class B-1: 0.50%
Class M-2: 0.90%
Class B-2: 0.30%
Class M-3: 0.50%
Class B-3: 0.45%
Interest Accrual
Period: With respect to any Class of Certificates
(other than the Adjustable Rate
Certificates)
and any Distribution Date, the
calendar month preceding the month in which
such Distribution Date occurs. With
respect to the Adjustable Rate Certificates and any Distribution Date, the
period beginning on the 25th day of the
month preceding the month in which such
Distribution Date occurs and ending on the 24th day
of the month in which such
Distribution Date occurs.
Interest Only
Certificates: The
Class A-4 and Class A-V Certificates.
The Interest Only Certificates will have no
Certificate Principal Balance.
Inverse Floater Certificates: The Class A-4 Certificates.
LIBOR: With respect to any Distribution Date, the arithmetic mean
of the
London interbank offered rate quotations for
one-month U.S. Dollar
deposits,
expressed on a per annum basis, determined
in accordance with Section 1.03.
Lockout Certificates:
The Class A-5 and Class A-6 Certificates.
Lockout Percentage:
For any Distribution Date occurring prior to the
Distribution Date in July 2010, 0%, and for
any Distribution Date thereafter, as
follows: 30% for any Distribution
Date on or after July
2010 and prior to July
2011; 40% for any Distribution Date on or after July 2011 and prior to July
2012; 60% for any Distribution Date on or after July 2012 and prior to July
2013; 80% for any Distribution Date on or after July 2013 and prior to July
2014; and 100% for any Distribution Date
thereafter.
Loan Group: Any of
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:
June 25, 2035, the Distribution Date immediately
following the latest scheduled maturity
date of any Mortgage Loan.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans
attached
hereto as Exhibit One (as amended
from time to time to
reflect the addition
of
Qualified Substitute Mortgage Loans), which list or lists shall set
forth the
following information as to each Mortgage
Loan:
10
<PAGE>
(i)
the Mortgage Loan identifying number ("RFC LOAN #");
(ii)
the maturity of the Mortgage Note ("MATURITY DATE");
(iii)
the Mortgage Rate ("ORIG RATE");
(iv)
the Subservicer pass-through rate ("CURR NET");
(v)
the Net Mortgage Rate ("NET MTG RT");
(vi)
the Pool Strip Rate ("STRIP");
(vii)
the initial scheduled
monthly payment of
principal, if any,
and interest ("ORIGINAL P & I");
(viii)
the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix)
the Loan-to-Value Ratio at origination ("LTV");
(x)
the rate at which the Subservicing Fee accrues ("SUBSERV FEE")
and at which the Servicing Fee accrues ("MSTR SERV FEE");
(xi)
a code "T,"
"BT" or "CT"
under the column "LN FEATURE,"
indicating that the
Mortgage Loan is secured by a second or
vacation residence; and
(xii)
a code "N" under the column "OCCP CODE," indicating that the
Mortgage Loan is secured by a non-owner occupied residence.
Such schedule may consist of multiple
reports that collectively set forth all of
the information required.
Notional Amount: As of
any Distribution
Date, (i) with respect
to the
Class A-4 Certificates, an amount equal to the sum of the
Certificate Principal
Balances of the Class A-3 and Class A-7
Certificates
immediately prior to
such
date; and (ii) with respect to any Class
A-V Certificates
or Subclass
thereof
issued pursuant to Section 5.01(c) of the
Standard Terms, the
aggregate Stated
Principal Balance of the Mortgage
Loans corresponding to the Uncertificated
REMIC I Regular Interests Z represented
by such Class or
Subclass
immediately
prior to such date.
Pass-Through Rate: With respect to the Senior Certificates (other than
the Adjustable Rate Certificates, Class A-V Certificates and Class A-P
Certificates), Class M Certificates and Class B Certificates and any
Distribution Date, the per annum rates set
forth in the
Preliminary
Statement
hereto.
11
<PAGE>
o
With respect
to the Class A-3 Certificates and the initial
Interest Accrual Period, 3.85% per annum, and as to any
Interest
Accrual Period
thereafter, a per
annum rate equal to LIBOR plus
0.75%, subject to a maximum rate equal to the Available Funds
Cap
and a minimum rate of 0. 75% per annum.
o
With respect
to the Class A-4 Certificates and the initial
Interest Accrual Period, 1.65% per annum, and as to any
Interest
Accrual Period thereafter, a per annum rate equal to 4.75%
minus
LIBOR, subject to a maximum rate of 4.75% per annum and a
minimum
rate of 0.00% per annum.
o
With respect
to the Class A-7 Certificates and the initial
Interest Accrual Period, 3.85% per annum, and as to any
Interest
Accrual Period
thereafter, a per
annum rate equal to LIBOR plus
0.75%, subject to a maximum rate equal to the Available Funds
Cap
and a minimum rate of 0. 75% per annum.
With respect to the
Class A-V Certificates
(other than any Subclass
thereof) and any Distribution Date, a rate equal to the weighted average,
expressed as a percentage, of the Pool Strip Rates of all
Mortgage Loans as
of
the Due Date in the related Due Period,
weighted on the basis
of the respective
Stated Principal Balances of such Mortgage Loans as of the day immediately
preceding such Distribution Date (or, with respect to the
initial
Distribution
Date, at the close of business on the
Cut-off Date).
With respect to the
Class
A-V Certificates and the initial Distribution Date the Pass-Through Rate is
equal to 0.5561% per annum. With respect to any Subclass of Class A-V
Certificates and any Distribution Date, a rate equal to the weighted
average,
expressed as a percentage, of the Pool Strip Rates of all Mortgage Loans
corresponding to the Uncertificated Class A-V REMIC Regular Interests
represented by such Subclass as of the Due Date in the
related Due Period,
weighted on the basis of the respective Stated Principal Balances of such
Mortgage Loans as of the day immediately
preceding such
Distribution
Date (or
with respect to the initial Distribution Date, at the close of business on
the
Cut-off Date). The Principal Only
Certificates have no Pass-Through Rate and are
not entitled to Accrued Certificate
Interest.
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
of a foreign depository institution or trust company; provided that the
12
<PAGE>
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
(without giving effect to any Certificate Policy (if any) in the
case of
Insured Certificates
(if any)) below the then-current rating, 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 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
(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.
13
<PAGE>
Prepayment Assumption:
The prepayment assumption to be used for
determining the accrual of original issue discount and premium and market
discount on the Certificates for federal income tax purposes,
which assumes a
constant prepayment rate of 8.0% per annum of the then
outstanding
principal
balance of the related Mortgage Loans in the first month of the life of such
Mortgage Loans and an additional
approximately
1.45454545%
per annum in each
month thereafter until the twelfth month,
and beginning in the twelfth month and
in each month thereafter during the life of the Mortgage Loans, a constant
prepayment rate of 24.0% per annum.
Prepayment
Distribution
Percentage: With
respect to any
Distribution
Date and each Class of Subordinate Certificates, under the applicable
circumstances set forth below, the
respective percentages set forth below:
(i) For
any Distribution Date
prior to the Distribution Date in July
2010 (unless the
Certificate
Principal Balances of the Senior
Certificates (other
than the Class A-P Certificates), have been
reduced to zero), 0%.
(ii) For any
Distribution
Date not discussed in clause (i) above
on
which any Class of Subordinate Certificates are 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 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
14
<PAGE>
Maturing Class
or Classes pursuant to clause (a) of this
sentence,
expressed as
an aggregate percentage, shall be
allocated among the Non-Maturing Classes in proportion to their
respective
Recalculated
Percentages (the
portion of such
aggregate reduction so
allocated to any Non-Maturing Class, the
"Adjustment
Percentage");
and (d) for purposes of such
Distribution Date,
the Prepayment
Distribution
Percentage of
each
Non-Maturing
Class shall be equal to the sum of (1) the
Prepayment
Distribution
Percentage thereof,
calculated
in
accordance with the provisions in paragraph (ii) above as if
the
Certificate Principal
Balance of each
Maturing Class had not
been reduced
to zero, plus (2) the related Adjustment
Percentage.
Principal Only Certificates: Any one of the Class A-P
Certificates.
Record Date: With
respect to each
Distribution Date and
each Class of
Certificates (other than the Adjustable
Rate Certificates for so long as the
Adjustable Rate Certificates are in book-entry
form), the close of
business on
the last Business Day of the month preceding the month in which the
related
Distribution Date occurs. With respect to each Distribution Date and the
Adjustable Rate Certificates (so long as
they are Book-Entry Certificates), the
close of business on the Business Day prior
to such Distribution Date.
Related Classes:
As to any Uncertificated REMIC I Regular Interest,
those classes of Certificates identified as
"Related Classes of Certificates" to
such Uncertificated REMIC I Regular
Interest in the definition of Uncertificated
REMIC I Regular Interest.
REMIC I: The segregated pool of assets (exclusive of the Yield
Maintenance Agreement, which is not an asset of any
REMIC), with respect to
which a REMIC election is to be made,
consisting of:
(i) the
Mortgage Loans and the related Mortgage Files,
(ii) all
payments and
collections
in respect of the
Mortgage
Loans due after the
Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date) as shall be
on deposit in the Custodial Account or in the Certificate
Account and identified
as belonging to the Trust Fund,
including the proceeds from the liquidation of Additional
Collateral for any
Additional
Collateral
Loan, but not
including amounts
on deposit in the Initial Monthly
Payment Fund,
(iii) property
which secured a
Mortgage Loan 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
Policies, if any, the
Pledged Assets with respect to each
Pledged Asset
Mortgage Loan, and the interest in the
Surety Bond transferred to the Trustee pursuant to Section
2.01 herein, and
15
<PAGE>
(v) all
proceeds of clauses (i) through (iv) above.
REMIC I Certificates:
The Class R-I Certificates.
REMIC II: The segregated pool of assets consisting of the
Uncertificated
REMIC I Regular Interests conveyed in trust to the Trustee for the
benefit of
the holders of each Class of Certificates (other than the Class R-I
Certificates) pursuant to Section 2.06,
with respect to which
a separate REMIC
election is to be made.
Senior Accelerated
Distribution
Percentage:
With
respect to any
Distribution Date occurring on or prior to the
60th Distribution
Date and any
Loan Group, 100%. With respect to any
Distribution Date thereafter and any such
Loan Group, as applicable, as follows:
(i) for any Distribution Date after the 60th Distribution Date but
on or
prior to the 72nd Distribution Date, the related Senior Percentage for such
Distribution Date plus 70% of the related Subordinate Percentage for such
Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date but on
or prior to the 84th 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 84th Distribution
Date but on
or prior to the 96th 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 96th Distribution Date but on
or prior to the 108th 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;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated
Distribution
Percentage described above shall not occur as
of any Distribution
Date unless
either
(a)(1)(X) the
outstanding
principal balance of the Mortgage Loans
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% or (Y) the outstanding
principal balance of Mortgage Loans delinquent 60 days or more (including
Mortgage Loans which are in foreclosure, have been foreclosed or otherwise
16
<PAGE>
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 principal balance of all Mortgage Loans
averaged over the last six
months, does not exceed 2% and (2) Realized
Losses on the Mortgage Loans to date
for such Distribution Date if occurring
during the sixth, seventh, eighth, ninth
or tenth 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 or
(b)(1) the
outstanding principal balance of Mortgage Loans 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 principal balance of
all Mortgage Loans
averaged over the last six months, does not
exceed 4% and (2) Realized Losses on
the Mortgage Loans to date for such
Distribution
Date, if occurring
during the
sixth, seventh, eighth, ninth or tenth year (or
any year thereafter) after the
Closing Date are less than 10%, 15%, 20%,
25% or 30%,
respectively, of the
sum
of the Initial Certificate Principal Balances of the
Subordinate
Certificates,
and
(ii) that for any
Distribution Date on
which the Senior
Percentage is
greater than the Senior Percentage as of the Closing Date, the Senior
Accelerated Distribution Percentage for such Distribution Date shall be
100%,
or, if the Mortgage Pool is comprised of two or more Loan Groups, for any
Distribution Date on which the weighted
average of the Senior
Percentages for
each Loan Group, weighted on the basis of the
Stated Principal
Balances of the
Mortgage Loans in the related Loan Group
(excluding the Discount Fraction of the
Discount Mortgage Loans in such Loan Group)
exceeds the weighted average of the
initial Senior Percentages (calculated on such basis) for
each Loan Group, each
of the Senior Accelerated Distribution Percentages for such Distribution
Date
will equal 100%.
Notwithstanding the
foregoing,
upon the reduction of
the Certificate
Principal Balances of the related Senior
Certificates (other
than the Class A-P
Certificates, if any) to zero, the related Senior Accelerated Distribution
Percentage shall thereafter be 0%.
Senior Certificate:
Any one of the Class A, Class CB or Class R
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed to the
Standard Terms as Exhibit A
and Exhibit D.
Senior Interest
Distribution Amount:
With respect to any
Distribution
Date and Loan Group, the aggregate amount
of Accrued Certificate
Interest to be
distributed to the Holders of the related Senior Certificates for that
Distribution Date.
Senior Percentage:
The Class I Percentage
or Class II
Percentage, as
applicable.
Senior Principal
Distribution Amount:
With respect to any Distribution
Date and Loan Group, the lesser of (a) the balance of the related Available
Distribution Amount remaining after the
distribution of all amounts required to
be distributed therefrom pursuant to Section 4.02(a)(i) and Section
4.02(a)(ii)(X) (excluding any amount
distributable pursuant to clause (E) of the
definition of "Class A-P Principal
Distribution Amount"), and (b) the sum of the
amounts required to be distributed to the Senior Certificateholders of the
related Certificate Group on such Distribution Date pursuant to Sections
4.02(a)(ii)(Y), 4.02(a)(xvi) and
4.02(a)(xvii).
17
<PAGE>
Special Hazard Amount:
As of any Distribution
Date, an amount equal to
$3,992,571 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 greater of (i) the product of
0.50% multiplied by the outstanding
principal balance of all Mortgage Loans
on
the Distribution Date immediately preceding such anniversary
multiplied by a
fraction, the numerator of which is equal
to the aggregate outstanding principal
balance (as of the immediately preceding Distribution Date) of all of the
Mortgage Loans secured by Mortgaged Properties located in the State of
California divided by the aggregate
outstanding
principal balance (as of the
immediately preceding Distribution Date) of
all of the Mortgage Loans, expressed
as a percentage, and the denominator of which is equal to 22.19% (which
percentage is equal to the percentage of
Mortgage Loans by
aggregate
principal
balance initially secured by Mortgaged Properties located in the State of
California) and (ii) the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of
the largest Mortgage Loan secured by
a Mortgaged Property (or, with respect to a Cooperative Loan, the related
Cooperative Apartment) located in the State
of California.
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which
coverage is reduced)
provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
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
Percentage: With
respect to either Loan
Group, as of any
date of determination a percentage equal to 100% minus the related Senior
Percentage as of that date.
18
<PAGE>
Subordinate
Principal
Distribution
Amount: With
respect to any
Distribution Date and Loan Group and each
Class of Subordinate Certificates, (a)
the sum of the following: (i) such Class's pro rata share, based on the
Certificate Principal Balance of each Class of
Subordinate
Certificates then
outstanding, of the aggregate of the amounts
calculated (without
giving effect
to the related Senior Percentages) for such Distribution Date for the related
Loan Group under clauses (1), (2) and (3) of
Section
4.02(a)(ii)(Y)(A) to
the
extent not payable to the Senior
Certificates; (ii) such Class's pro rata share,
based on the Certificate Principal Balance of each Class of Subordinate
Certificates then outstanding, of the
principal collections described in Section
4.02(a)(ii)(Y)(B)(b) for the related Loan Group
(without giving effect to the
related Senior Accelerated Distribution Percentages) to the extent such
collections are not otherwise distributed
to the Senior Certificates; (iii) the
product of (x) the related Prepayment Distribution Percentage and (y) the
aggregate of all Principal Prepayments in Full received in the related
Prepayment Period and Curtailments
received in the
preceding calendar month for
the related Loan Group (other than the related Discount Fraction of such
Principal Prepayments in Full and Curtailments with respect to a Discount
Mortgage Loan) to the extent not
payable to the Senior
Certificates;
(iv) if
such Class is the Class of Subordinate
Certificates
with the Highest
Priority,
any Excess Subordinate Principal Amount for the related Loan Group for such
Distribution Date not paid to the Senior Certificates; and (v) any amounts
described in clauses (i), (ii) and (iii) as determined for any previous
Distribution Date, that remain
undistributed to the extent that such amounts are
not attributable to Realized Losses which have been allocated to a Class of
Subordinate Certificates minus (b) the sum of (i) with
respect to the Class of
Subordinate Certificates with the Lowest Priority, any Excess Subordinate
Principal Amount for such Distribution Date; and (ii) the Capitalization
Reimbursement Amount for such Loan Group and
Distribution Date,
other than the
related Discount Fraction of any portion of
that amount related to each Discount
Mortgage Loan in the related Loan Group,
multiplied by a fraction, the numerator
of which is the Subordinate Principal Distribution Amount for such Class of
Subordinate Certificates, without giving effect to this
clause (b)(ii), and the
denominator of which is the sum of the
principal distribution
amounts for all
Classes of Certificates other than the Class A-P
Certificates,
without giving
effect to any reductions for the
Capitalization Reimbursement Amount.
Super Senior
Certificates:
The Class A-3
Certificates
and Class A-5
Certificates.
Super Senior Optimal
Percentage:
As to any Distribution Date on and
after the Credit Support Depletion Date and any Class of Super Senior
Certificates, a fraction, expressed as a percentage, the
numerator of which is
the Certificate Principal Balance such Class of Super Senior Certificates
immediately prior to such Distribution Date
and the denominator of which is the
aggregate Certificate Principal Balance of
the Class A Certificates, other than
the Class A-P Certificates, and Class R-I Certificate
immediately prior to such
Distribution Date.
Super Senior
Optimal Principal Distribution Amount: As of any
Distribution Date on or after the Credit
Support Depletion Date, an amount equal
to the product of (a) the then applicable Super Senior Optimal Percentage and
(b) the amounts described in Section
4.02(a)(ii)(Y) in respect of Loan Group I.
Uncertificated Accrued Interest: With respect to each Distribution
Date,
(i) as to each Uncertificated REMIC I Regular Interest other than each
Uncertificated REMIC I Regular Interest Z, an amount equal to the aggregate
amount of Accrued Certificate Interest that would result under
the terms of the
definition thereof on the Related Classes of Certificates (excluding any
Interest Only Certificates) if the Pass-Through
Rate on such Classes were equal
19
<PAGE>
to the Uncertificated Pass-Through Rate on such
Uncertificated REMIC I
Regular
Interest, (ii) as to each Uncertificated REMIC I Regular Interest Z and each
Uncertificated REMIC II Regular Interest Z, an amount equal to one month's
interest at the Pool Strip Rate of the
related Mortgage
Loan on the
principal
balance of such Mortgage Loan reduced by
such Interest's
pro-rata share of
any
prepayment interest shortfalls or other
reductions of interest allocable to the
Class A-V Certificates.
Uncertificated
Pass-Through
Rate: With
respect to each of the
Uncertificated REMIC I Regular Interests,
other than the
Uncertificated REMIC I
Regular Interests Z, the per annum rate specified in the definition of
Uncertificated REMIC I Regular Interests.
With respect to each
Uncertificated
REMIC I Regular Interest Z and each
Uncertificated REMIC
II Regular Interest Z,
the Pool Strip Rate for the related
Mortgage Loan.
Uncertificated
Principal Balance:
With respect to each
Uncertificated
REMIC I Regular Interest, as defined in the
definition of Uncertificated REMIC I
Regular Interest.
Uncertificated REMIC I
Regular Interests: The
Uncertificated
REMIC I
Regular Interests Z together with the
interests identified
in the table below,
each representing an undivided
beneficial
ownership interest in REMIC I, and
having the following characteristics:
1. The
principal balance from
time to time of each
Uncertificated
REMIC I Regular Interest identified in the table below
shall be
the amount identified
as the Initial
Principal Balance thereof
in such table, 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(a)(ii) 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
Uncertificated REMIC I
Regular Interest
pursuant to Section
10.04(d), which equals
the aggregate
principal balance of
the
Classes of
Certificates
identified
as related to such
Uncertificated REMIC I Regular Interest in such table.
2. The
Uncertificated
Pass-Through
Rate for each
Uncertificated
REMIC I Regular Interest identified in the table below
shall be
the per annum rate set forth in the Pass-Through Rate column of
such table.
3. The
Uncertificated REMIC I
Distribution Amount for each REMIC I
Regular Interest identified in the table below shall be, for
any
Distribution Date, the amount deemed distributed with respect
to
such
Uncertificated
REMIC I Regular Interest on such
Distribution
Date pursuant
to the provisions of Section
10.04(a).
20
<PAGE>
<TABLE>
<CAPTION>
Uncertificated REMIC Related Classes of
Certificates
Pass-Through Rate Initial Principal
I Regular Interest
Balance
<S>
<C>
<C>
<C> <C>
<C>
W
Class A-3, Class A-4, Class A-7 5.50%
64,500,000.00
X
Class A-P
0.00%
$548,115.22
Y
Class A-1, Class A-2, Class
5.50%
304,930,947.06
A-5, Class A-6, Class
CB, Class R-II, Class
M-1, Class
M-2, Class M-3, Class B-1, Class
B-2, Class B-3
</TABLE>
Uncertificated
REMIC I Regular Interests Z: Each of the 1,935
uncertificated partial undivided beneficial ownership interests in the Trust
Fund, numbered sequentially from 1 to 1,935, each relating to the
particular
Mortgage Loan identified by such sequential number on the Mortgage Loan
Schedule, each having no principal
balance, and each bearing interest at the
respective Pool Strip Rate on the Stated Principal Balance of the related
Mortgage Loan.
Uncertificated REMIC I
Regular Interests Z
Distribution Amount:
With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC I Regular Interests Z for such
Distribution Date pursuant to Section
10.04(a).
Uncertificated REMIC I
Regular Interest Distribution Amounts: With
respect to each Uncertificated REMIC I Regular Interest, other than the
Uncertificated REMIC I Regular Interests Z, the amount specified as the
Uncertificated REMIC I Regular Interest
Distribution Amount with respect thereto
in the definition of Uncertificated
REMIC I Regular
Interests. With
respect to
the Uncertificated REMIC I Regular Interests Z, the Uncertificated REMIC I
Regular Interests Z Distribution
Amount.
Uncertificated
REMIC II Regular Interests Z: Each of the 1,935
uncertificated partial undivided beneficial ownership interests in REMIC II
numbered sequentially from 1 through 1,935 each relating to the identically
numbered Uncertificated REMIC I Regular Interests Z, each having no
principal
balance and bearing interest at a rate equal to the
related Pool Strip
Rate on
the Stated Principal Balance of the Mortgage
Loan related to the
identically
numbered Uncertificated REMIC I Regular Interests Z, comprising such
Uncertificated REMIC II Regular Interests Z's pro rata share of the amount
distributed pursuant to Section
10.04(a).
Uncertificated REMIC
II Regular Interests
Distribution
Amount: With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC I Regular Interests Z for such
Distribution Date pursuant to Section
10.04(a).
Undercollateralized
Amount: With
respect any Certificate Group and
Distribution Date, the excess of (i) the
aggregate Certificate Principal Balance
of such Certificate Group over (ii) the aggregate
Stated Principal
Balance of
the Mortgage Loans in the related Loan Group,
in each case
calculated on such
Distribution Date after giving effect to
distributions to be made thereon (other
than amounts to be distributed pursuant to Section 4.02(i) on
such Distribution
Date).
21
<PAGE>
Undercollateralized
Certificate Group:
With respect any
Distribution
Date, a Certificate Group for which the related Undercollateralized Amount
exceeds zero.
Underwriters:
Citigroup Global
Markets Inc.,
UBS Securities LLC and
Residential Funding Securities
Corporation.
Yield Maintenance Agreement: The agreement dated as of the Closing
Date,
between the Trustee and the Yield
Maintenance Agreement
Provider, relating to
the Class A-3 and Class A-7 Certificates, or any replacement, substitute,
collateral or other arrangement in lieu
thereto.
Yield Maintenance
Agreement Provider:
Bear, Stearns Financial Products
Inc., and its successors and assigns or any party to any replacement,
substitute, collateral or other arrangement
in lieu thereof.
Yield Maintenance
Payment: For any
Distribution Date, the payment, if
any, due under the Yield Maintenance Agreement in respect of such
Distribution
Date.
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.
Section 1.03. Determination of LIBOR.
LIBOR applicable to
the calculation of the
Pass-Through
Rates on the
Adjustable Rate Certificates for any Interest Accrual Period (other than the
initial Interest Accrual Period) will be
determined as described below:
On each Distribution
Date, LIBOR shall be established by the Trustee
and, as to any Interest Accrual Period,
will equal the rate for one month United
States dollar deposits that appears on the Telerate Screen Page 3750 of the
Moneyline Telerate Capital Markets Report as
of 11:00 a.m., London time, on the
second LIBOR Business Day prior to the
first day of such Interest Accrual Period
("LIBOR Rate Adjustment Date"). "Telerate Screen Page 3750" means the
display
designated as page 3750 on the Telerate Service (or such other page as may
replace page 3750 on that service for the
purpose of displaying London interbank
offered rates of major banks). If such rate does not appear on such page (or
such other page as may replace that page on
that service, or if
such service is
no longer offered, any other service for
displaying LIBOR or comparable rates as
may be selected by the Trustee after
consultation with the Master Servicer), the
rate will be the Reference Bank Rate. The "Reference Bank Rate" will be
determined on the basis of the rates at which
deposits in U.S. Dollars are
offered by the reference banks (which shall be any three major
banks that are
engaged in transactions in the London
interbank market,
selected by the Trustee
after consultation with the Master Servicer) as of
11:00 a.m., London time, on
the day that is one LIBOR Business Day prior to the immediately preceding
Distribution Date to prime banks in the London
interbank market for a period of
one month in amounts approximately equal to the
aggregate Certificate Principal
Balance of the Adjustable Rate Certificates
then outstanding.
The Trustee will
request the principal London office of each of the
reference banks to provide a
quotation of its rate. If at least two such
quotations
are provided,
the rate
will be the arithmetic mean of the
quotations rounded up to the next multiple of
1/16%. If on such date fewer than two
quotations are provided as requested, the
22
<PAGE>
rate will be the arithmetic mean of the rates quoted by one or
more major banks
in New York City, selected by the Trustee
after consultation with the Master
Servicer, as of 11:00 a.m., New York City time, on such date
for loans in U.S.
Dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the
Adjustable Rate Certificates then outstanding. If no such quotations can be
obtained, the rate will be LIBOR for the
prior Distribution
Date, or, in the
case of the first LIBOR Rate Adjustment Date, 2.06% per annum; provided,
however, if, under the priorities described
above, LIBOR for a Distribution Date
would be based on LIBOR for the previous Distribution Date for the third
consecutive Distribution Date, the Trustee shall,
after consultation
with the
Master Servicer, select an alternative comparable
index (over which the Trustee
has no control), used for determining
one-month Eurodollar lending rates that is
calculated and published (or otherwise made
available) by an independent party.
"LIBOR Business Day" means any day other
than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the
city of London,
England are required
or authorized by law to be closed.
The establishment
of LIBOR by the
Trustee on any LIBOR Rate Adjustment
Date and the Master Servicer's subsequent
calculation of the
Pass-Through Rates
applicable to each of the Adjustable Rate
Certificates for the relevant Interest
Accrual Period, in the absence of manifest
error, will be final and binding.
Promptly following
each LIBOR Rate
Adjustment
Date the Trustee
shall
supply the Master Servicer with the results of its
determination
of LIBOR on
such date. Furthermore, the Trustee will supply the
Pass-Through Rates on each
of the Adjustable Rate Certificates for the current and the immediately
preceding Interest Accrual Period via the
Trustee's internet website, which may
be obtained by telephoning the Trustee at
(800) 735-7777.
23
<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 Fund 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 Loan Practices Act
effective November 7,
2004
or (iv) a "High-Cost Home Loan" as defined
in the Indiana House Enrolled Act No.
1229, effective as of January 1, 2005.
(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).
(i) In connection with such assignment, and contemporaneously with the
delivery of this Agreement, the Company delivered or caused to be delivered
hereunder to the Trustee, the Yield
Maintenance Agreement (the delivery of which
shall evidence that the fixed payment
for the Yield
Maintenance Agreement
has
been paid and the Trustee and the Trust Fund shall have no further payment
obligation thereunder and that such fixed
payment has been authorized hereby).
24
<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),
fixed-rate mortgage
loans with level Monthly
Payments due, with respect to a majority of the Mortgage
Loans, on the
first day of each
month and terms to maturity at origination or
modification of not more than 30 years;
(iv) To the best of the
Company's knowledge if
a Mortgage Loan is secured by
a Mortgaged Property with a Loan-to-Value Ratio at origination in
excess
of 80%, such Mortgage Loan is the subject of a Primary Insurance Policy
that insures
(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 0.8% 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 Missouri, and no more than 0.7% 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 outside
Missouri; no more than
1.3% 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 Florida,
and no
more
than 0.7% 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 outside Florida;
25
<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
52.43% of the Group I
Loans by aggregate Stated Principal
Balance as of the Cut-off Date were underwritten under a reduced loan
documentation program,
approximately
20.5% of the Group I Loans by
aggregate Stated
Principal Balance as of the Cut-off Date were
underwritten under a no-stated income program, and approximately
7.4% of
the Group I Loans
by aggregate Stated Principal Balance as of the
Cut-off Date were
underwritten under a
no income/no asset program and;
approximately 61.10% of the Group II Loans by aggregate Stated
Principal
Balance as of the Cut-off Date were underwritten under a reduced loan
documentation program,
approximately
28.3% of the Group II Loans by
aggregate Stated
Principal Balance as of the Cut-off Date were
underwritten under a no-stated income program, and 10.5% of the
Group II
Loans were underwritten under a no income/no asset program;
(x) Except
with respect to approximately 16.92% of the Group I Loans by
aggregate Stated
Principal
Balance
as of the Cut-off Date and
approximately 27.18% of the Group II 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),
(2), (4), (5) and (6), without reliance on the
provisions of Treasury
Regulation Section
1.860G-2(a)(3)
or Treasury
Regulation Section
1.860G-2(f)(2)
or any other
provision that would
allow a Mortgage Loan to be treated as a "qualified mortgage"
notwithstanding
its failure
to meet the requirements of Section
860G(a)(3)(A) of
the Code and Treasury Regulation
Section
1.860G-2(a)(1), (2), (4), (5) and (6);
26
<PAGE>
(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
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) None of the Mortgage Loans has been
made to an
International
Borrower,
and no such Mortgagor is a member of a foreign diplomatic mission with
diplomatic
rank;
(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
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<PAGE>
the Mortgage Loan to be other than a
"qualified mortgage"
as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. Any such substitution shall be
effected by the Company under the same terms and
conditions
as provided in
Section 2.04 for substitutions by Residential Funding. It is understood and
agreed that the obligation of the Company to cure
such breach or to so purchase
or substitute for any Mortgage Loan as to which
such a breach has occurred and
is continuing shall constitute the sole
remedy respecting such
breach available
to the Certificateholders or the Trustee on behalf of the
Certificateholders.
Notwithstanding the foregoing, the Company shall not be required to cure
breaches or purchase or substitute for Mortgage Loans as provided in this
Section 2.03(b) if the substance of the breach of a
representation
set forth
above also constitutes fraud in the
origination of the Mortgage Loan.
Section 2.04. Representations and
Warranties of Sellers.(See Section 2.04 of the
Standard Terms)
Section 2.05. Execution and Authentication of Certificates/Issuance
of
Certificates.
The Trustee
acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Mortgage Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together
with the assignment to it of all other
assets included in the Trust Fund 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-I Certificates in
authorized denominations which together with
the Uncertificated REMIC I Regular
Interests, evidence the beneficial interest
in REMIC I.
Section
2.06. Conveyance of
Uncertificated
REMIC I and REMIC
II
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 Uncertificated REMIC I Regular
Interests to the Trustee for the benefit of the Holders of each Class of
Certificates (other than the Class R-I
Certificates). The
Trustee
acknowledges
receipt of the Uncertificated 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-I Certificates). The rights of the Holders of each Class of Certificates
(other than the Class R-I Certificates) 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
Uncertificated
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
28
<PAGE>
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-I Certificates) in authorized denominations, 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).
29
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF
MORTGAGE LOANS
(SEE ARTICLE III OF THE STANDARD TERMS)
30
<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 the Master
Servicer on behalf of the Trustee
(or 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 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, if such Certificateholder has not so
notified the Master
Servicer or the Paying Agent by the Record Date, by
check mailed to such
Certificateholder
at the address of such Holder
appearing in the
Certificate Register
such
Certificateholder's
share
(which share (A) with respect to each Class of Certificates
(other than
any Subclass
of the Class A-V Certificates), shall be based on the
aggregate
of the Percentage Interests represented by Certificates of the
applicable Class held by such Holder or (B) with respect to any
Subclass
of the Class A-V
Certificates, shall be
equal to the amount
(if any)
distributed pursuant
to Section
4.02(a)(i)
below to each Holder
of a
Subclass thereof) of
the following amounts,
in the following order
of
priority (subject to the provisions of Section 4.02(b), (c), (e)
and (i)
below), in each case to the extent of the related or specified
Available
Distribution Amount
remaining in the case of clauses (i) through (iii),
and to the extent of the remaining Available Distribution Amounts from
both Loan Groups, in the case of clauses (iv) through (xvii):
(i) (X) from the
Available Distribution
Amount related to the Loan Group I,
to the Class A Certificates (other than the Class A-P
Certificates) and
Class R-I Certificates, on a pro rata basis based on Accrued
Certificate
Interest payable on such Certificates with respect to such
Distribution
Date, Accrued
Certificate Interest
on such Classes of Certificates (or
Subclasses, if any, with respect to the Class A-V Certificates) for
such
Distribution Date
(provided that for the purpose of this Section
4.02(a)(i)(X) the Available Funds Cap shall be 5.50%), 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);
(Y) from the Available
Distribution Amount related to the
Loan Group II, to the Class CB Certificates and Class R-II
Certificates,
on a pro rata basis
based on Accrued
Certificate Interest
payable on
such Certificates
with respect to such Distribution Date, Accrued
Certificate
Interest on
such Classes of Certificates for such
Distribution Date,
plus any Accrued Certificate Interest thereon
remaining unpaid from any previous Distribution Date except as
provided
in the last paragraph of this Section 4.02(a); and
(Z) from the Available
Distribution Amount
derived from
the related Loan Group, on a parity with the distributions in Sections
4.02(a)(i)(X) and
4.02(a)(i)(Y),
as applicable, to the Class A-V
Certificates (or
Subclasses,
if any) in proportion
to the respective
amounts of Accrued
Certificate Interest
thereon derived from each Loan
Group, Accrued
Certificate
Interest on the Class
A-V Certificates (or
Subclasses, if any)
with respect to such
Distribution Date and derived
from the related Loan
Group, plus any Accrued Certificate Interest
thereon remaining
unpaid from any previous Distribution Date with
respect to such Loan Group except as provided in the last
paragraph of
this
Section 4.02(a);
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<PAGE>
(ii) (X) to the
Class A-P Certificates, from the Available Distribution
Amount for the
respective Loan
Groups, the sum of
Class A-P Principal
Distribution Amounts
for both Loan Groups (applied to reduce the
Certificate Principal Balance of the Class A-P Certificates);
and
(Y) to the Senior
Certificates (other than the Class A-P,
Class A-4 and the Class A-V Certificates) of each Certificate Group,
from the Available
Distribution Amount
for the related Loan Group, in
the priorities and amounts set forth in Section 4.02(b) and (c),
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 and
Loan
Group 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 (other than the related Discount Fraction of
the principal portion of such payment with respect to a
Discount
Mortgage Loan),
whether or not received on or prior to the
related Determination
Date, minus the
principal portion of any
Debt Service Reduction (other than the related Discount
Fraction
of the principal
portion of such Debt Service Reductions with
respect to each
Discount Mortgage
Loan) which
together with
other Bankruptcy Losses exceeds the Bankruptcy Amount;
(2)
the Stated Principal Balance of any Mortgage Loan 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) of
the Standard Terms)
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 in such Loan
Group pursuant
to Section
2.03 or 2.04 during the preceding calendar month (other than
the
related Discount
Fraction of such Stated Principal Balance or
shortfall with respect to each Discount Mortgage Loan); and
(3)
the principal portion of all other unscheduled collections 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
described in Section
4.02(a)(ii)(Y)(B)
of this
Series Supplement,
including
without limitation Insurance
Proceeds, Liquidation
Proceeds and REO Proceeds), including
Subsequent Recoveries,
received during the
preceding calendar
month (or deemed to have been so received in accordance with
Section 3.07(b) of the
Standard Terms) to the extent applied by
the Master Servicer as
recoveries
of principal of the
related
Mortgage Loan
pursuant to Section
3.14 of the Standard
Terms
(other
than the related Discount Fraction of the principal
portion of such
unscheduled
collections, with
respect to each
Discount Mortgage Loan);
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<PAGE>
(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) of the Standard Terms) and did not
result in any Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses, an amount equal to the
lesser
of (a) the related Senior Percentage for such Distribution Date times
the Stated Principal
Balance of such
Mortgage Loan (other than the
related Discount Fraction of such Stated Principal Balance, with
respect
to each Discount
Mortgage Loan) and (b) the 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 (in each
case other
than the portion of such unscheduled collections, with
respect to a
Discount Mortgage Loan, included in clause (C) of the
definition of Class A-P Principal Distribution Amount);
(C) the related Senior Accelerated Distribution Percentage for such
Distribution Date
times the aggregate of all Principal Prepayments in
Full with respect to
the related
Loan Group
received in the related
Prepayment Period and
Curtailments
with respect to the related
Loan
Group received in the
preceding calendar
month (other than the related
Discount
Fraction of
such Principal Prepayments in Full and
Curtailments, with respect to each Discount Mortgage Loan);
(D) any portion of the Excess Subordinate Principal Amount for such
Distribution Date allocated to the related Loan Group;
(E) amounts
allocated to the related Certificate Group, as applicable,
pursuant to Section 4.02(j); and
(F) any amounts
described in subsection (ii)(Y), clauses (A), (B) and (C) of
this Section 4.02(a), as determined for any previous Distribution Date,
which remain unpaid after application of amounts previously
distributed
pursuant to this
clause (E) to the
extent that such
amounts are not
attributable to
Realized Losses which have been allocated to the
Subordinate Certificates; minus
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<PAGE>
(G) the related
Capitalization
Reimbursement
Amount for such
Distribution
Date, other than the
related Discount
Fraction of any
portion of that
amount related to each Discount Mortgage Loan in the related Loan
Group,
multiplied by a fraction, the numerator of which is the Senior
Principal
Distribution Amount,
without giving effect
to this clause (G), and the
denominator of which
is the sum of the principal distribution amounts
for all Classes of Certificates other than the Class A-P
Certificates,
payable from the
Available Distribution Amount for the related
Loan
Group without giving
effect to any
reductions for the
Capitalization
Reimbursement Amount;
(iii) if the Certificate
Principal Balances of the Subordinate
Certificates
have not been reduced to zero, to the Master Servicer or a
Sub-Servicer,
by remitting for deposit to the Custodial Account, to the extent of and
in reimbursement for
any Advances or Sub-Servicer Advances previously
made with respect to
any Mortgage
Loan or REO
Property which remain
unreimbursed in whole
or in part following the Cash Liquidation or REO
Disposition of such
Mortgage Loan or REO Property, minus any such
Advances that were made with respect to delinquencies that ultimately
constituted Excess
Special Hazard Losses,
Excess Fraud Losses,
Excess
Bankruptcy Losses or Extraordinary Losses;
(iv) to the Holders of the
Class M-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(v) to the Holders
of the Class M-1 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date, minus (y) the amount of
any Class A-P Collection Shortfalls for such Distribution Date or
remaining unpaid for all previous Distribution Dates, to the extent
the
amounts available pursuant to clause (x) of Sections 4.02(a)(vii),
(ix),
(xi), (xiii), (xiv)
and (xv) of this Series Supplement are insufficient
therefor, applied in
reduction of the Certificate Principal Balance of
the Class M-1 Certificates;
(vi) to the Holders of the
Class M-2
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(vii) to the Holders of the Class
M-2 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date, minus (y) the amount of
any Class A-P Collection Shortfalls for such Distribution Date or
remaining unpaid for all previous Distribution Dates, to the extent
the
amounts available pursuant to clause (x) of Sections 4.02(a) (ix),
(xi),
(xiii), (xiv) and (xv) are insufficient therefor, applied in reduction
of the Certificate Principal Balance of the Class M-2
Certificates;
(viii) to the Holders of the Class M-3
Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
34
<PAGE>
(ix) to the Holders of the
Class M-3 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date minus (y) the amount of
any Class A-P Collection Shortfalls for such Distribution Date or
remaining unpaid for all previous Distribution Dates, to the extent
the
amounts available
pursuant to clause (x) of Sections 4.02(a)(xi),
(xiii), (xiv) and (xv) are insufficient therefor, applied in reduction
of the Certificate Principal Balance of the Class M-3
Certificates;
(x) to the Holders
of the Class B-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(xi) to the Holders of the
Class B-1 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date minus (y) the amount of
any Class A-P Collection Shortfalls for such Distribution Date or
remaining unpaid for all previous Distribution Dates, to the extent
the
amounts available
pursuant to clause (x) of Sections 4.02(a)(xiii),
(xiv) and (xv) are
insufficient therefor,
applied in reduction
of the
Certificate Principal Balance of the Class B-1 Certificates;
(xii) to the Holders of the Class
B-2 Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(xiii) to the Holders of the Class B-2
Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date minus (y) the amount of
any Class A-P Collection Shortfalls for such Distribution Date or
remaining unpaid for all previous Distribution Dates, to the extent
the
amounts available
pursuant to clause (x)
of Sections
4.02(a)(xiv) and
(xv) are insufficient therefor, applied in reduction of the
Certificate
Principal Balance of the Class B-2 Certificates;
(xiv) to the Holders of the Class
B-3 Certificates, an amount equal to (x) the
Accrued Certificate
Interest thereon for
such Distribution
Date, plus
any Accrued
Certificate
Interest thereon remaining unpaid from any
previous Distribution
Date, except as provided below, minus (y) the
amount of any Class A-P Collection Shortfalls for such Distribution
Date
or remaining unpaid for all previous Distribution Dates, to the extent
the amounts available pursuant to clause (x) of Section
4.02(a)(xv) are
insufficient therefor;
(xv) to the Holders of the
Class B-3 Certificates, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date minus (y) the amount of
any Class A-P Collection Shortfalls for such Distribution Date or
remaining unpaid for all previous Distribution Dates applied in
reduction of
the Certificate Principal Balance of the Class B-3
Certificates;
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<PAGE>
(xvi) to the Senior Certificates,
on a pro rata basis in accordance with their
respective outstanding
Certificate Principal
Balances, the portion, if
any, of the Available Distribution Amounts for each 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 Amounts
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 Amounts for the related 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
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 Class A-P
Principal Distribution Amount for each Loan Group shall be
distributed to
the Class A-P Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
(ii) an amount equal to the Senior Principal Distribution Amount for Loan
Group I shall be distributed as follows:
(A) first, to the
Class R-I Certificates
until the
Certificate
Principal Balance of
the Class R-I
Certificates has been reduced to
zero;
(B) second, any remaining amount to the Lockout Certificates,
on
a pro rata basis in
accordance
with their
respective
Certificate
Principal Balances,
until the Certificate
Principal Balances of the
Lockout
Certificates
have been reduced to
zero, an amount equal
to
the Lockout Percentage
of the Lockout
Certificates' pro rata
share
(based on the aggregate Certificate Principal Balance thereof
relative to the aggregate Certificate Principal Balance of
the Class
A-1, Class
A-2, Class A-3, Class A-5, Class A-6 and Class A-7
Certificates) of the
aggregate of the collections described in
36
<PAGE>
clauses (A), (B), (C),
(D), (E) and (F) (net of amounts set forth in
clause (G))
of Section 4.02(a)(ii)(Y) for Loan Group I, with
application of the related Senior Percentage and the related
Senior
Accelerated Distribution Percentage; provided, however, that if the
aggregate of the amounts set forth in clauses (A), (B), (C), (D),
(E)
and (F) (net
of amounts set forth in clause (G)) of Section
4.02(a)(ii)(Y) for
Loan Group I is more than the balance of the
Available Distribution
