STANDARD TERMS FOR POOLING AND SERVICING AGREEMENTS

Exhibit 4.2

 

STANDARD TERMS FOR POOLING AND

SERVICING AGREEMENTS

Dated as of [Month] 1, 200[*]

Citicorp Residential Mortgage Securities, Inc.

REMIC Pass-Through Certificates, Series 200[*]-[*]

 

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THESE STANDARD TERMS FOR POOLING AND SERVICING AGREEMENTS, dated as of [Month] 1, 200[*] (the “Standard Terms Document”), declare the basic terms and conditions upon which one or more series of pass-through certificates packaged by Citicorp Residential Mortgage Securities, Inc. (“CRMSI”) are to be issued, authenticated and delivered from time to time pursuant to, for each such series, a Pooling and Servicing Agreement (a “Pooling Agreement”) between CRMSI as depositor, CitiFinancial Mortgage Company, Inc. (“CFMC”) as servicer, and the institution named therein as trustee establishing such series.

This Standard Terms Document as incorporated in a Pooling Agreement shall apply to the series of pass-through certificates established thereby to the extent provided therein. Hereinafter, references to the “Pooling Agreement” and the pass-through certificates executed and delivered thereunder and to terms such as “this Agreement”, “herein”, “hereof” and words of similar import shall refer only to a particular Pooling Agreement, including as and to the extent incorporated therein this Standard Terms Document, and the series of pass-through certificates established thereby.

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . Whenever used in this Agreement, the following words and phrases, unless otherwise specified in Article XII or unless the context otherwise requires, shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural form of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Defined terms used in this Standard Terms Document and not defined herein have the respective meanings ascribed thereto in Article XII.

Accountant : A Person engaged in the practice of accounting who (except when this Agreement provides that an Accountant must be Independent) may be employed by or with the Depositor or an Affiliate thereof.

Act : The Securities Act of 1933, as amended.

Additional Servicer : As defined in Section 3.03.

Additional Servicing Compensation : All amounts of the type described as such in Section 3.13.

Adjustment Date : For an adjustable rate Mortgage Loan, each date on which the Mortgage Note Rate is subject to adjustment, as provided in the related Mortgage Note.

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

Aggregate Outstanding Advances : As of any Determination Date, the aggregate of Net Delinquency Advances made for the period from the Cut-Off Date to such Determination Date plus any Delinquency Advance and Collection Account Advance to be made on the next succeeding Distribution Date.

Applied Loss Amount : For any Distribution Date, any excess of (x) the Certificate Balance, after giving effect to the application of the Principal Distribution Amount on such date but prior to allocations pursuant to Section 13.02, over (y) the Aggregate Current Pool Balance as of the end of the related Collection Period.

Appraisal : For any Mortgage Loan, the appraisal conducted in connection with the origination of such Mortgage Loan, whether conducted upon the purchase of the related Mortgaged Property or in connection with a refinancing.

 

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Authenticating Agent : Any Authenticating Agent appointed pursuant to Section 8.12. The Authenticating Agent may be an Affiliate of the Depositor.

Authorized Officer : With respect to the Servicer or the Depositor, the Chairman, the President, any Executive Vice President, Senior Vice President, Vice President, Controller, Assistant Controller, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, or any other natural person designated in an Officer’s Certificate signed by any of the foregoing officers and furnished to the Trustee and, solely in the case of an Officer’s Certificate given pursuant to Section 3.14, any Servicing Officer.

Bankruptcy Code : The United States Bankruptcy Code of 1978, as amended.

Beneficial Owner : With respect to a Certificate held by a Clearing Agency, the Person who is the beneficial owner of such Certificate as reflected on the books of such Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly or as an Indirect Participant, in accordance with the rules of such Clearing Agency).

Business Day : Any day other than (x) a Saturday, a Sunday or a day on which banking institutions in New York, New York or in the cities where the Trustee, any Paying Agent and the Servicer are located are authorized or obligated by law or executive order to be closed or (y) only with respect to a Distribution Date and if there are Book-Entry Certificates, a day on which the relevant Clearing Agency is closed.

Certificate : Any certificate or residual certificate identified as such in Article XII.

Certificate Account : The account or accounts created and maintained pursuant to Section 4.02, each such account to be held in trust for the benefit of Certificateholders, in the name of the Trustee. The term Certificate Account shall be deemed to include an Alternative Certificate Account (as defined in Section 11.01).

Certificate Balance : As of any date, the aggregate of the Principal Balances of all Certificates.

Certificate Rate : For any Class or Subclass of Certificates, the rate per annum at which interest accrues on Certificates of such Class or such Subclass, as specified in Article XII.

Certificate Register and Certificate Registrar : The register maintained pursuant to Section 5.02 and the Certificate Registrar identified in Article XII.

Certificateholder or Holder : The Person in whose name a Certificate is registered in the Certificate Register.

Certification : As defined in Section 4.09(b).

Civil Relief Act : The Servicemembers Civil Relief Act.

Civil Relief Shortfall : For any Collection Period and for a particular Pool, and for all Mortgage Loans in such Pool for which there has been a reduction in the amount of interest collectible for such Collection Period as a result of the Civil Relief Act or Similar State Law, any amount by which (x) interest collectible on such Mortgage Loans for such Collection Period is less than (y) the sum of (i) one month’s interest at the Weighted Average Rate and (ii) the Servicing Fee, the Administration Fee, any Insurance Premium and such Mortgage Loans’ allocable portion of Trust Expenses for such Collection Period.

Civil Relief Shortfall Amount : For any Distribution Date and any interest-bearing Class or Subclass of Certificates, the pro rata share allocated thereto, based on the amount of interest accrued thereon at the applicable Certificate Rate during the related Interest Accrual Period, of the aggregate Civil Relief Shortfall for all Pools for the related Collection Period.

Class : With respect to the Certificates, any group of Certificates designated as a Class in Article XII and with respect to Residual Certificates, all Residual Certificates having the same Class designation.

Class A Certificateholder : A registered holder of a Class A Certificate.

Class A Certificate : A Certificate of any Class or Subclass designated as a Class A Certificate in Article XII.

Class A Interest Amount : For any Distribution Date and for a particular Group, the sum of the related Class A Subclass Interest Amounts for such Distribution Date.

 

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Class A Interest Shortfall Amount : For a Distribution Date, the sum of all Class A Subclass Interest Shortfall Amounts for such date.

Class A Principal Balance : For any date, an amount equal to the sum of the Class A Subclass Principal Balances.

Class A Subclass Interest Amount : As to any Distribution Date and each Class A Subclass (other than a Class A Principal-Only Subclass), (i) the amount of interest accrued during the related Interest Accrual Period at the applicable Certificate Rate on its Class A Subclass Principal Balance (or in the case of any interest-only Subclass, the notional amount) of such Class A Subclass minus (ii) the sum of (x) any Non-Supported Interest Shortfall allocated to such Class A Subclass for such Distribution Date and (y) any Civil Relief Shortfall Amount allocated to such Class A Subclass for such Distribution Date.

Class A Subclass Interest Shortfall Amount : As to any Distribution Date and each Class A Subclass in a particular Group (other than a Class A Principal-Only Subclass), any amount by which the Class A Subclass Interest Amount of such Class A Subclass for such Distribution Date exceeds the amount distributed in respect of such Class A Subclass on such Distribution Date pursuant to clause 1.b or 2.b, as applicable, of Section 13.01(b).

Class A Subclass Principal Balance : As to the first Distribution Date and each Class A Subclass in a particular Group, the Initial Principal Balance of such Class A Subclass as set forth in Section 12.01(a). As of any subsequent Distribution Date, such Initial Principal Balance minus the sum of all amounts previously distributed in respect of such Class A Subclass on prior Distribution Dates pursuant to clause 1.d or 2.d, as applicable, of Section 13.01(b).

Class A Unpaid Interest Shortfall : As to any Distribution Date and for a particular Group, an amount equal to the sum of the related Class A Subclass Interest Shortfall Amounts.

Class M Certificateholder : A registered holder of a Class M Certificate.

Class M Interest Amount : For any Distribution Date, the sum of the Class M Subclass Interest Amounts for such Distribution Date.

Class M Principal Balance : An amount equal to the sum of all Class M Subclass Principal Balances.

Class M Subclass Applied Losses : For any Distribution Date and any Class M Subclass, the aggregate amount of all Applied Loss Amounts allocated to such Class M Subclass on all prior Distribution Dates.

Class M Subclass Interest Amount : As to any Distribution Date and any Class M Subclass, (i) the amount of interest accrued during the related Interest Accrual Period at the applicable Certificate Rate on the Class M Subclass Principal Balance of such Class M Subclass minus (ii) the sum of (x) any Non-Supported Interest Shortfall allocated to such Class M Subclass for such Distribution Date and (y) any Civil Relief Shortfall Amount allocated to such Class M Subclass for such Distribution Date.

Class M Subclass Interest Shortfall Amount : As to any Distribution Date and any Class M Subclass, any amount by which the Class M Subclass Interest Amount for such Class M Subclass for such Distribution Date exceeds the amount distributed in respect of such Class M Subclass on such Distribution Date pursuant to clause 1.c or 2.c, as applicable, of Section 13.01(b).

Class M Subclass Loss Amount : For any Distribution Date and any Class M Subclass, (a) the aggregate amount of all Applied Loss Amounts allocated to such Class M Subclass on all prior Distribution Dates minus (b) the aggregate amount of all distributions to such Class M Subclass in reduction of such Class M Subclass Loss Amount on all prior Distribution Dates pursuant to clause 1.f or 2.f, as applicable, of Section 13.01(b).

Class M Subclass Principal Balance : As to the first Distribution Date and any Class M Subclass, the Initial Principal Balance of such Class M Subclass as set forth in Section 12.01(a). As of any subsequent Distribution Date, the lesser of (a) such Initial Principal Balance minus (i) all amounts previously distributed to holders thereof in reduction of Principal Balance and (ii) the Class M Subclass Applied Losses for such Class M Subclass and (b) the Aggregate Current Pool Balance minus the sum of

 

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the Class A Principal Balance and the Class M Subclass Principal Balances of all Class M Subclasses with lower numerical designations, each as of the immediately preceding Distribution Date (after taking into account distributions in reduction of Principal Balance and the allocation of any Applied Loss Amounts on such date).

Class M Unpaid Interest Shortfall : As to any Distribution Date, the sum of the Class M Subclass Interest Shortfall Amounts.

Class R Certificate : Any Residual Certificate designated as such in Article XII.

Clearing Agency : An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act and the regulations of the Commission thereunder. Unless otherwise specified in Article XII, the initial Clearing Agency is The Depository Trust Company.

Clearing Agency Participant : A broker, dealer, bank or other financial institution or other person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

Code : The Internal Revenue Code of 1986, as it may be amended from time to time, any successor statutes thereto, and applicable U.S. Department of the Treasury temporary or final regulations issued pursuant thereto.

Collection Account : As defined in Section 3.06.

Collection Account Advance : For any Distribution Date, the amount of any Uncommitted Cash to be distributed to Certificateholders on such Distribution Date to cover the interest and principal portions of Remittance Delinquencies.

Collection Period : For a particular Distribution Date, the period commencing with the opening of business of the second day of the preceding calendar month and ending at the close of business on the first day of the calendar month in which such Distribution Date occurs.

Commission : The Securities and Exchange Commission.

Compensating Cap : For any Distribution Date, the lesser of (a) the aggregate amount of the Servicing Fee actually received on the Mortgage Loans for such Distribution Date and (b) the product of (x) [**]% and (y) one-twelfth of the Aggregate Current Pool Balance as of the preceding Distribution Date.

Compensating Interest : As defined in Section 3.08.

[Constituent REMICs : Each of the one or more segregated asset pools designated in Article XII as a REMIC within the Trust Fund.]

Corporate Trust Office : The principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office on the date hereof is located at the address set forth in Article XII.

Cumulative Loss Percentage : As of any date, the percentage equivalent of Cumulative Realized Losses divided by the Aggregate Initial Pool Balance.

Cumulative Realized Losses : As of any date, the aggregate amount of Realized Losses for all Prepayment Collection Periods ending prior to such date.

Current Interest : For any Distribution Date, the sum of the Class A Interest Amount for all Groups and the Class M Interest Amount.

Custodian : The person identified in Article XII or its successors in interest named pursuant to the Mortgage File Custodial Agreement. The Custodian may be the Trustee, any Affiliate of the Trustee or the Depositor or an independent entity.

CRMSI : Citicorp Residential Mortgage Securities, Inc., a corporation organized and existing under the laws of the State of Delaware, or its successors in interest.

Deficiency Amount : For any Distribution Date, any excess of (x) the Targeted Level over (y) the Overcollateralization Amount, taking into account the reduction of the Certificate Balance by application of Principal Proceeds but prior to applying any Extra Principal Distribution Amount or Applied Loss Amount.

 

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Deficient Valuation : For any Mortgage Loan, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then-outstanding indebtedness under the Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any scheduled Monthly Payment that results in a permanent forgiveness of principal, which valuation or reduction results from a proceeding under the Bankruptcy Code or any other similar state law.

Definitive Securities : Any Class or Subclass of Certificates or the Residual Certificates issued in definitive, fully registered form, either upon initial issuance or in accordance with the provisions of Section 5.06.

Delinquency Advance : The aggregate of the advances made by the Servicer pursuant to Section 3.07(a), the amount of any such Delinquency Advance with respect to a particular Collection Period being no more than (a) the aggregate of the interest and principal portions of Monthly Payments on the Mortgage Loans that were due during the related Collection Period and Delinquent as of the related Determination Date, after adjustment of delinquent interest payments to interest at the Pass-Through Rate plus the amount of any Collection Account Advance made on the preceding Distribution Date, less (b) the amount of any Collection Account Advance to be made on the particular Distribution Date.

Delinquent : A Mortgage Loan is “Delinquent” if any Monthly Payment due thereon (or part thereof in excess of $5.00) is not received from the Mortgagor by the close of business on the Due Date. A Mortgage Loan is “30 days Delinquent” if such payment has not been received by the close of business on the corresponding day of the month following the month of such Due Date (or, if there is no corresponding day, on the last day of such following month), and similarly for “60 days Delinquent”, “90 days Delinquent” and so on.

Deposit Date : The Business Day preceding each Distribution Date.

Depositor : CRMSI, or its successors in interest.

Depositor Order : A written order or request signed in the name of the Depositor by an Authorized Officer.

Depository : The bank or banks (which may be Citibank, N.A., Citibank (Delaware) or Citibank (New York State)) or savings and loan association or associations or trust company or companies (which may be the Trustee or which may be, directly or indirectly, controlled by or under common control with the Depositor) at which the Collection Account, Certificate Account and Escrow Account are established or maintained pursuant to Section 4.02, 3.19 or 3.20. Each Depository must meet the requirements set forth in Section 11.01.

Disqualified Organization : As defined in Section 5.02.

Distribution Date Statement : The statement required to be delivered pursuant to Section 4.07(a).

Due Date : For a Mortgage Loan, the day of each calendar month on which the Monthly Payment is due.

Eligible Account : Either (A) a segregated account or accounts maintained at Citibank, N.A., provided that the short-term unsecured debt obligations of Citibank, N.A. are rated at least “A-1” by S&P if S&P is a Rating Agency, “F-l” by Fitch if Fitch is a Rating Agency, and “P-1” by Moody’s if Moody’s is a Rating Agency, or (B) a segregated account or accounts maintained with an institution whose deposits are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the FDIC, the unsecured and uncollateralized debt obligations of which shall be rated at least in the category of “AA” by S&P if S&P is a Rating Agency, in the category of “AA” by Fitch if Fitch is a Rating Agency, and in the category of “Aa2” by Moody’s if Moody’s is a Rating Agency, and which has a short term rating of at least “A-1” by S&P if S&P is a Rating Agency, “F-1” by Fitch if Fitch is a Rating Agency, and “P-1” by Moody’s if Moody’s is a Rating Agency and which is either (i) a federal savings and loan association duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking association duly organized, validly existing and in good standing under the federal banking laws and (iv) a principal subsidiary of a bank holding company or (C) a trust account

 

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(which shall be a “special deposit account”) maintained with the trust department of a federal or state chartered depository institution or of a trust company, having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity. Any Eligible Accounts maintained with the Trustee shall conform to the preceding clause (C).

Eligible Investments : As defined in Section 4.05.

ERISA : The Employee Retirement Income Security Act of 1974, as amended from time to time and any applicable rule, regulation or order promulgated thereunder.

ERISA Prohibited Holder : As defined in Section 5.02.

Escrow Account : The account, if any, created and maintained pursuant to Section 3.20.

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

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

FDIC : The Federal Deposit Insurance Corporation.

FHLMC : The Federal Home Loan Mortgage Corporation.

Fitch : Fitch Ratings, or its successors.

Foreclosure Profits : As to any Distribution Date, any excess of (a) Net Liquidation Proceeds for each Mortgage Loan that became a Liquidated Loan during the related Collection Period over (b) the sum of the Unpaid Loan Balance of each such Liquidated Loan plus accrued and unpaid interest at the applicable Mortgage Note Rate on such Unpaid Loan Balance from the Due Date to which interest was last paid by the Mortgagor (or, in the case of a Liquidated Loan that had been an REO Mortgage Loan, from the Due Date to which interest was last deemed to have been paid to the Due Date in the month in which such Mortgage Loan became an REO Mortgage Loan).

Form 8-K Information : As defined in Section 4.09(d).

GIC : A guaranteed investment contract or surety bond.

Gross Margin : The percentage set forth in the Mortgage Note for an adjustable rate Mortgage which is to be added to the applicable index to determine the Mortgage Note Rate on each Adjustment Date.

Group : For Class A Certificates, those Classes or Subclasses designated in Article XII as being part of a particular “Group” of Class A Certificates and as being related to a particular Pool. Group 1 Class A Certificates shall be related to Pool 1, Group 2 Class A Certificates shall be related to Pool 2, and so on for additional Groups and Pools.

Holder : Has the same meaning as “Certificateholder”.

Independent : When used with respect to any specified Person, means such a Person who is “independent” within the meaning of Rule 2-01(b) of the Commission’s Regulation S-X under the Exchange Act.

Indirect Participant : A broker, dealer, bank or other financial institution or other person who acts through a Clearing Agency Participant to effect book-entry transfers through the Clearing Agency and pledges of securities deposited with the Clearing Agency.

Initial Principal Balance : For any Class or Subclass of Certificates, the amount specified in Article XII, and for any Certificate, the amount specified thereon as the Initial Principal Balance.

Insurance Proceeds : Proceeds paid in respect of a Mortgage Loan pursuant to any Primary Mortgage Insurance Certificates, amounts paid pursuant to hazard insurance policies to the extent not applied to restore the related Mortgaged Property or released to the Mortgagor in accordance with the Servicer’s normal servicing procedures, and amounts paid pursuant to any other insurance policy or bond relating to the Mortgage Loan or the servicing thereof.

Interest Proceeds : For a Distribution Date, the sum (without duplication) of (a) all interest due on the Mortgage Loans on Due Dates during the related Collection Period, (b) all Compensating Interest paid by the Servicer for the related Collection Period, (c) the interest portion of any payment made during the related Prepayment Collection Period in connection with the repurchase of a Mortgage Loan pursuant to

 

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Section 2.02 or 2.03(a), (d) the interest portion of Net Liquidation Proceeds received in the related Prepayment Collection Period, (e) the interest portion of all Delinquency Advances made for the related Collection Period and (f) any amount to be transferred from the Capitalized Interest Account pursuant to Section 4.04(d).

Investment Account : As and to the extent specified in Article XII, each account or any portion of any thereof which consists of cash or Eligible Investments.

Investment Income : Any and all investment income and gains, net of any losses, actually received on the investment of funds on deposit in a particular Investment Account.

Issue Date : The date on which Certificates are first executed, authenticated and delivered, as specified in Article XII.

Last Scheduled Distribution Date : For each Class or Subclass of Certificates or Certificates, the date specified in Article XII.

Liquidated Loan : A Mortgage Loan (including an REO Property) with respect to which the Servicer determines that all Liquidation Proceeds which it expects to recover have been recovered or a Mortgage Loan for which the related Mortgaged Property is retained or sold by the Mortgagor and for which the Servicer has released the Mortgage as a result of a determination by the Servicer that the potential Liquidation Expenses with respect to such Mortgage Loan would exceed the amount by which any payment made by the Mortgagor is less than the outstanding principal balance of such Mortgage Loan plus accrued and unpaid interest thereon to the date on which such Mortgage Loan became an REO Mortgage Loan.

Liquidation Expenses : For any Liquidated Loan, expenses paid or incurred by or for the account of the Servicer or the Trust Fund for (a) Property Protection Expenses, (b) property sales expenses, (c) foreclosure costs, including court costs and reasonable attorneys’ fees, (d) similar expenses reasonably paid or incurred in connection with the liquidation of such Liquidated Loan and (e) any tax imposed on the Trust Fund with respect to a Liquidated Loan or property received by deed in lieu of foreclosure.

Liquidation Proceeds : For any Liquidated Loan, the amounts received by the Servicer in connection with the liquidation of such Liquidated Loan, whether through judicial or non-judicial foreclosure, proceeds of insurance policies, condemnation proceeds or otherwise, including payments received from the Mortgagor in respect of such Liquidated Loan, other than amounts required to be paid to the Mortgagor pursuant to the terms of such Liquidated Loan or to be applied otherwise pursuant to law.

Loan Balance : For any Mortgage Loan as of any date, the Scheduled Principal Balance thereof as of the close of business on the Cut-Off Date (excluding principal payments due on or before the Cut-Off Date, whether or not actually received), less all scheduled principal payments due for all prior Collection Periods, and all unscheduled principal payments received during all prior Prepayment Collection Periods, on such Mortgage Loan, without regard to any adjustments thereof in connection with Mortgagor bankruptcies (other than a Deficient Valuation).

Loan Repurchase Price : As defined in Section 2.02.

Loan-to-Value Ratio : As of any date, (a) for a Mortgage Loan secured by a Senior Lien, the percentage equivalent of (x) the Unpaid Loan Balance divided by (y) the Original Value and (b) for a Second Mortgage Loan, the percentage equivalent of (x) the sum of the Unpaid Loan Balance of the Second Mortgage Loan and the remaining principal balance of all Senior Liens on the related Mortgaged Property as of such date, divided by (y) the Original Value.

Lost Note Affidavit : For any Mortgage Loan for which the original Mortgage Note has been permanently lost, misplaced or destroyed and has not been replaced, an affidavit of the Originator or an Affiliate of the Originator certifying that the original Mortgage Note has been lost, misplaced or destroyed (attaching a copy of such Mortgage Note) and indemnifying the Trust Fund against any loss, cost or liability resulting from the failure to deliver such original Mortgage Note.

Maximum Note Rate : The maximum rate of interest set forth in the Mortgage Note relating to an adjustable rate Mortgage Loan.

 

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MERS : Mortgage Electronic Registration Systems, Inc. and its successors in interest.

Minimum Note Rate : The minimum rate of interest set forth in the Mortgage Note relating to an adjustable rate Mortgage Loan.

Monthly Deposit Amount : As defined in Section 3.06(c).

Monthly Excess Interest : For any Distribution Date, any excess of (x) Interest Proceeds over (y) the sum of Current Interest, any Class A Subclass Interest Shortfalls, the Administration Fee and any trust expenses paid pursuant to Section 12.05.

Monthly Payment : As to any Mortgage Loan (other than an REO Mortgage Loan) and any Due Date, the payment of principal and interest due thereon in accordance with the amortization schedule at the time applicable (after adjustment for any partial Principal Prepayments and Deficient Valuations occurring prior to such Due Date but before any adjustment to such amortization schedule other than Deficient Valuations by reason of any bankruptcy, or similar proceeding or any moratorium or similar waiver or grace period).

Monthly Prepayment Charges : For a Prepayment Collection Period, the aggregate amount actually received by the Servicer from Mortgagors as payments of Prepayment Charges on Mortgage Loans.

Moody’s : Moody’s Investors Service, Inc.

Mortgage : For any Mortgage Loan, the mortgage, deed of trust or other security instrument creating a first or second lien on and an interest in real property securing a Mortgage Note.

Mortgage Documents : All documents contained in the Mortgage Files.

Mortgage File : The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage File Custodial Agreement : The Mortgage File Custodial Agreement from time to time in effect between the Custodian, the Depositor, the Servicer and the Trustee, as the same may be amended or modified from time to time.

Mortgage Loan : At any time, the indebtedness of a Mortgagor evidenced by a Mortgage Note which is secured by real property and which is sold and assigned to the Trustee and held at such time in the Trust Fund pursuant to this Agreement, the Mortgage Loans originally so held being identified in Exhibit B.

Mortgage Loan Schedule : The list of Mortgage Loans transferred to the Trustee as part of the Trust Fund, the original list being attached hereto as Exhibit B.

Mortgage Note : For a Mortgage Loan, the promissory note or other evidence of indebtedness of the Mortgagor.

Mortgage Note Rate : For a Mortgage Loan, the annual rate per annum at which interest accrues on such Mortgage Loan.

Mortgaged Property : Any real property subject to a Mortgage.

Mortgagor : The obligor or obligors on a Mortgage Note.

Net Delinquency Advances : For any period, the amount (which may be negative) obtained by subtracting the amount of any reimbursements of Delinquency Advances received in such period from the aggregate amount of Delinquency Advances made in such period.

Net Liquidation Proceeds : For any period and for any Liquidated Loan, the aggregate amount of Liquidation Proceeds, net of related Liquidation Expenses and related unreimbursed Delinquency Advances and unreimbursed Servicing Advances, received by the Servicer or deposited in the Collection Account, as the case may be, as proceeds of such Mortgage Loan. Net Liquidation Proceeds shall be allocated first to accrued and unpaid interest on the related Mortgage Loan and then to the unpaid principal balance thereof.

 

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Net Servicing Advances : For any period, the amount (which may be negative) obtained by subtracting the amount of any reimbursements of Servicing Advances received in such period from the aggregate amount of Servicing Advances made in such period.

Nonrecoverable Advance : Any portion of a Delinquency Advance or Servicing Advance previously made which has not been previously reimbursed to the Servicer and which, in the good faith judgment of the Servicer, would not be ultimately recoverable from Liquidation Proceeds or other recoveries in respect of the related Mortgage Loan.

Non-Supported Interest Shortfall : For any Distribution Date, and any Class or Subclass of Certificates (other than a Class A Principal-Only Subclass), the pro rata share allocated thereto based on the amount of interest accrued thereon during the related Interest Accrual Period at the related Certificate Rate of the excess, if any, of the Prepayment Interest Shortfalls for the related Prepayment Collection Period over the Compensating Cap (but not including any Servicing Fee received because of a Delinquency Advance) for such Distribution Date. Any Servicing Fee advanced by the Servicer will not be applied to reduce Prepayment Interest Shortfalls.

Officer’s Certificate : A certificate signed by an Authorized Officer of the Depositor or the Servicer, as applicable.

Opinion of Counsel : A written opinion of counsel, who (unless otherwise specified) may be counsel for, or an employee of, the Depositor or an Affiliate thereof, which counsel shall be reasonably acceptable to the addressee.

Original Value : For a Mortgaged Property, the lesser of the sales price of such Mortgaged Property and the appraised value thereof determined pursuant to an appraisal made in connection with origination of such Mortgage Loan, except that the original appraisal of such Mortgaged Property may be used for a Mortgage Loan that is not a purchase money mortgage.

Originator : CFMC and any other Affiliate or Affiliates of CRMSI, or any third party originators, from which CRMSI has acquired the Mortgage Loans.

Outstanding : As of any date, all Certificates theretofore authenticated and delivered under this Agreement except:

(i) Certificates theretofore canceled by the Certificate Registrar or delivered to the Certificate Registrar for cancellation;

(ii) Certificates with respect to which money for a distribution in the necessary amount to reduce the Principal Balance thereof to zero has been theretofore deposited with the Trustee or any Paying Agent in trust for the Holders of such Certificates;

(iii) Certificates in exchange for or in lieu of which other Certificates have been authenticated and delivered pursuant to this Agreement unless proof satisfactory to the Certificate Registrar is presented that any such Certificates are held by a holder in due course; and

(iv) Certificates alleged to have been destroyed, lost or stolen for which replacement Certificates have been issued as provided for in Section 5.03 and authenticated and delivered pursuant to this Agreement;

provided , however , that in determining whether the Holders of the requisite percentage of the aggregate Principal Balance or Percentage Interest of any Outstanding Certificates or of the Outstanding Certificates of any one or more Classes thereof have given any request, demand, authorization, direction, notice, consent or waiver hereunder, such percentage shall be based on the Principal Balance of such Certificate and provided , further , Certificates owned by the Depositor or any Affiliate of the Depositor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, or waiver, only Certificates which a Responsible Officer of the Trustee has actual knowledge are so owned shall be so disregarded and except that where the Depositor or any Affiliate of the Depositor shall be owner of 100% of the aggregate Principal Balance or Percentage Interest of any Class or Subclass of Outstanding Certificates, the Depositor or such Affiliate shall be permitted to give any request, demand, authorization, direction, notice, consent or waiver hereunder. Certificates so owned which have been

 

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pledged in good faith may be regarded as Outstanding if the pledgee certifies in writing to the Trustee the pledgee’s right so to act with respect to such Certificates and that the pledgee is not the Depositor or any Affiliate of the Depositor.

Overcollateralization Amount : For any Distribution Date, any excess of (x) the Aggregate Current Pool Balance as of the last day of the related Collection Period over (y) the Certificate Balance (after giving effect to principal distributions on such Distribution Date but prior to the payment of any Extra Principal Distribution Amount).

Pass-Through Rate : For a Mortgage Loan as of any date or for any period, the applicable Mortgage Note Rate less the Servicing Fee.

Paying Agent : Each paying agent identified in Article XII which is authorized to make distributions on the Certificates on behalf of the Trustee. A Paying Agent may be an Affiliate of the Depositor and, if not an Affiliate, must be authorized to exercise corporate trust powers under the laws of its jurisdiction of organization.

Percentage Interest : For a Class of Residual Certificates, if the Residual Certificate has a Principal Balance as specified in Article XII, the Initial Principal Balance of such Residual Certificate (expressed as a percentage) of the aggregate Initial Principal Balance of the Residual Certificates of such Class and, if the Residual Certificate does not have a Principal Balance, the portion represented by such Residual Certificate (expressed as a percentage) of the total ownership interest in the applicable Constituent REMIC represented by all Residual Certificates of such Class. For any Certificate of an interest-only Class or Subclass of Certificates, the ratio of the notional amount of such Certificate to the aggregate notional amount of the entire Class or Subclass.

Periodic Rate Cap : The provision in a Mortgage Note that limits permissible increases and decreases in the Mortgage Note Rate on any Adjustment Date for an adjustable rate Mortgage Loan.

Permitted Activities : The primary activities of the trust created hereunder, which shall be (a) holding Mortgage Loans sold by the Depositor and other assets of the Trust Fund, including any credit enhancement and passive derivative financial instruments, (b) issuing Certificates and other interests in the assets of the Trust Fund, (c) receiving collections on the Mortgage Loans and making payments on Certificates and interests in accordance with the provisions of this Agreement and (d) engaging in other activities that are necessary or incidental to accomplish these limited purposes.

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

Plan : As defined in Section 5.02.

Pool : Each of the pools of Mortgage Loans designated as such in Article XII.

Pool Balance : For the Mortgage Loans in a particular Pool as of any date, the aggregate of the Loan Balances of all such Mortgage Loans.

Pool Distribution Amount : As of any Distribution Date, the funds eligible for distribution to Holders on such Distribution Date, being all amounts deposited into the Collection Account, but excluding (a) Uncommitted Cash which will not be used on such Distribution Date for a Collection Account Advance; and (b) all permitted withdrawals from the Collection Account pursuant to Section 3.06(d). The Pool Distribution Amount will be calculated for each Pool individually and on an aggregate basis for all Pools.

Pooling Agreement : The Pooling Agreement (as defined in the preamble to this Standard Terms Document) entered into with respect to a particular series of Certificates and into which this Standard Terms Document is incorporated by reference.

Prepaid Installment : For any Mortgage Loan, any installment of principal thereof and interest thereon received prior to the Due Date for such installment, as an early payment thereof and not as a Principal Prepayment on such Mortgage Loan.

 

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Prepayment Charge : For a particular Mortgage Loan, the amount the Mortgagor is contractually obligated to pay as a premium, charge or penalty for the privilege of refinancing or otherwise prepaying such Mortgage Loan in whole or in part.

Prepayment Interest Shortfall : As to any Mortgage Loan that was the subject of a Principal Prepayment applied during a Prepayment Collection Period (other than a Principal Prepayment applied as of the related Due Date), an amount equal to the difference between (a) one month of interest on such Principal Prepayment at the Pass-Through Rate (giving effect to the Civil Relief Act or Similar State Law, if applicable) that would be due on the next Due Date for such Mortgage Loan and (b) the amount of interest (adjusted to the Pass-Through Rate) actually received from the Mortgagor in connection with such Principal Prepayment.

Prepayment Collection Period . For a particular Distribution Date, the preceding calendar month, being the period commencing with the opening of business on the first day of such month and ending at the close of business on the last day thereof.

Prepayment Principal : For any Distribution Date, the sum of all amounts that constitute full or partial Principal Prepayments received in the related Prepayment Collection Period.

Primary Mortgage Insurance Certificate : Any certificate of primary mortgage insurance relating to a particular Mortgage Loan to the extent identified in the Mortgage Loan Schedule.

Principal Balance : On any Distribution Date,

(i) for a Class A Certificate of any Subclass, its pro rata share based on the Initial Principal Balance of the applicable Class A Subclass Principal Balance; and

(ii) for a Class M Certificate of any Subclass, its pro rata share based on the Initial Principal Balance of the applicable Class M Subclass Principal Balance.

Principal Prepayment : For any Mortgage Loan, any payment of principal on such Mortgage Loan which is received in advance of its Due Date and is not accompanied by an amount of interest representing scheduled interest for any Due Date in any month subsequent to the month of prepayment, excluding any proceeds of or advances on any Liquidated Loan.

Principal Proceeds : For a Distribution Date, the sum (without duplication) of (a) the principal portion of each Monthly Payment on the Mortgage Loans having a Due Date during the related Collection Period, (b) the Loan Balance of each Mortgage Loan repurchased during the related Prepayment Collection Period pursuant to Section 2.02 or 2.03(a), (c) any Substitution Adjustment Amount deposited for a substitution of a Mortgage Loan during the related Prepayment Collection Period pursuant to Section 2.04, (d) the principal portion of Net Liquidation Proceeds received in respect of Mortgage Loans during the related Prepayment Collection Period, (e) the principal portion of all Delinquency Advances made for the related Collection Period, (f) all Prepayment Principal received in respect of Mortgage Loans during the related Prepayment Collection Period and (g) the allocable amount of investment losses deposited pursuant to Section 4.03(b)(i).

Proceeding : Any suit in equity, action at law or other judicial or administrative proceeding.

Property Protection Expenses : For Mortgage Loans prior to their becoming Liquidated Loans, expenses paid or incurred by or for the account of the Servicer or the Trust Fund in accordance with the related Mortgages for (a) real estate property taxes, insurance premiums and property repair, replacement, protection and preservation expenses and (b) similar expenses reasonably paid or incurred to preserve or protect the value of such Mortgages or the related Mortgaged Properties.

Qualified GIC : A GIC, assigned to the Trustee or a Paying Agent, or entered into by the Trustee or a Paying Agent at the direction of the Depositor, on or before the Issue Date, providing for the investment of funds ensuring a minimum or fixed rate of return on investments of such funds, which GIC shall

(a) be an obligation of an insurance company, trust company, commercial bank (which may be Citibank, N.A., Citibank (Delaware) or Citibank (New York State)) or other entity whose credit standing is acceptable to each Rating Agency;

 

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(b) provide that the Trustee or a Paying Agent may exercise all of the rights of the Depositor under such GIC without the necessity of the taking of any action by the Depositor;

(c) provide that if at any time (subject to the second proviso of this paragraph (c)) the then current credit standing of the obligor under such GIC is such that continued investment of funds included in the Trust Fund would result in a downgrading or withdrawal of any then current rating of any Class or Subclass of the Certificates, the Trustee or the Paying Agent may terminate such GIC and be entitled to the return of all funds previously invested thereunder, together with accrued interest thereon at the interest rate provided under such GIC through the date of delivery of such funds to the Trustee or the Paying Agent, provided that neither the Trustee nor the Paying Agent shall be charged with knowledge of any such potential downgrading or withdrawal unless it shall have received written notice of such potentiality from the Depositor, the Servicer or the provider of the GIC which must be obligated to give such notice at least once per year; provided , further , that upon any such event the Depositor, by written notice to the Trustee or the Paying Agent, may replace such GIC with a substitute GIC having substantially the same terms (including without limitation a rate of return at least as high as the GIC being replaced) so long as such substitute GIC has an obligor with a credit standing no less than the credit standing of the obligor under the GIC to be replaced at the time the GIC was executed (or with a credit rating otherwise acceptable to each Rating Agency) and such fact is certified by the Depositor to the Trustee or the Paying Agent;

(d) provide that the Trustee’s interest therein shall be transferable to any successor trustee hereunder;

(e) provide that the funds invested thereunder and accrued interest thereon be available not later than the Business Day prior to any Distribution Date on which such funds may be required for distribution hereunder; and

(f) meet such other standards as may be specified in Article XII.

Qualified Nominee : A Person (who may not be the Depositor or an Affiliate thereof) in whose name Eligible Investments held by the Trustee or Paying Agent may be registered as nominee of the Trustee or Paying Agent in lieu of registration in the name of the Trustee or Paying Agent, provided that the following conditions shall be satisfied in connection with such registration:

(a) the instruments governing the creation and operation of the nominee provide that neither the nominee nor any owner of an interest in the nominee (other than the Trustee or Paying Agent) shall have any interest, beneficial or otherwise, in any Eligible Investments at any time held in the name of the nominee, except for the purpose of transferring and holding legal title thereto;

(b) the nominee and the Trustee or the Paying Agent have entered into an agreement establishing that any Eligible Investments held in the name of the nominee are to be held by the nominee as agent (other than commission agent or broker) or nominee for the account of the Trustee; and

(c) in connection with the registration of any Eligible Investment in the name of the nominee, all requirements under applicable governmental regulations necessary to effect a valid registration of transfer of such Eligible Investment are complied with as evidenced to the Trustee or the Paying Agent upon its request by an Opinion of Counsel.

Qualified Substitute Mortgage Loan : For any Mortgage Loan or Mortgage Loans (each a “replaced Mortgage Loan”) included in the Trust Fund for which such Qualified Substitute Mortgage Loan is being substituted, a Mortgage Loan for which all payments of principal and interest due on or before the Substitution Day have been received and which has the following characteristics:

(a) (i) in the case of a fixed rate Mortgage Loan, a Mortgage Note Rate no more than 1% per annum higher and no lower than that of such replaced Mortgage Loan and (ii) in the case of an adjustable rate Mortgage Loan, (1) a Maximum Note Rate and a Minimum Note Rate no more than 1% per annum higher and no lower than that of such replaced Mortgage Loan, (2) the

 

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same index and Periodic Rate Cap as such replaced Mortgage Loan and a Gross Margin of no more than 1% per annum higher and no lower than that of such replaced Mortgage Loan and (3) currently accruing interest at a rate no more than 1% per annum higher and no lower than such replaced Mortgage Loan;

(b) a date of maturity no later, and not more than one year earlier, than the maturity date of the Mortgage Loan being replaced;

(c) a Loan-to-Value Ratio no higher than that of such replaced Mortgage Loan;

(d) a Loan Balance at least equal to that of such replaced Mortgage Loan;

(e) a credit quality classification of a same or higher classification as that of such replaced Mortgage Loan;

(f) secured by a Mortgaged Property that is either a single family dwelling or is of the same type as that securing such replaced Mortgage Loan;

(g) an occupancy status that is either primary residence or is the same status as that of such replaced Mortgage Loan;

(h) a lien priority that is either first or the same as that of such replaced Mortgage Loan;

(i) is not a “balloon” loan unless such replaced Mortgage Loan is a “balloon” loan;

(j) is a “qualified replacement mortgage” as defined in Code Section 860G(a)(4); and

(k) in the case of an adjustable rate Mortgage Loan, does not permit conversion to a fixed rate;

provided , that (i) except for the conditions set forth in clauses (a), (b), (c), (j) and (k) above, such characteristics may be satisfied on a weighted average or other aggregate basis, (ii) clause (d) may be satisfied by deposit in the Collection Account of sufficient funds so that the Loan Balance (calculated by including such funds) of such Qualified Substitute Mortgage Loan satisfies such clause (the “Substitution Adjustment Amount”) and (iii) the Trustee shall receive, not later than the Substitution Day, (1) an Opinion of Counsel, dated the Substitution Day, to the effect that the substitution of such Qualified Substitute Mortgage Loans and any deposit of cash in the Collection Account will not constitute a “prohibited transaction” within the meaning of Code Section 860F(a), will not adversely affect the status of the Trust Fund as comprised of the Constituent REMICs and will not otherwise subject the Trust Fund to any tax and (2) an Officer’s Certificate of the Depositor to the effect that (A) all documents delivered to the Trustee in connection with such substitution comply as to form with the requirements of Section 2.01(a) and (B) all conditions to such substitution specified in Section 2.04(a) have been satisfied.

Realized Losses : For any Distribution Date, the aggregate of the amount of losses for each Mortgage Loan which became a Liquidated Loan during the related Prepayment Collection Period, equal to the excess of (i) the unpaid principal balance of each such Liquidated Loan, plus accrued interest thereon in accordance with the amortization schedule at the time applicable thereto at the Mortgage Note Rate from the Due Date as to which interest was last paid through the Due Date in the Prepayment Collection Period in which such Mortgage Loan became an REO Mortgage Loan, over (ii) Net Liquidation Proceeds for such Liquidated Loan.

Record Date : As defined in Article XII.

Regulation AB : Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Securities and Exchange Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Securities and Exchange Commission, or as may be provided by the Securities and Exchange Commission or its staff from time to time.

Related Certificate Balance : As of any date, (a) if there is only one Group, the Certificate Balance and (b) otherwise, for each Pool, the sum of (x) the aggregate of the Class A Subclass Principal

 

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Balances of the Class A Certificates in the related Group and (y) the aggregate of the Principal Balances of all Class M Certificates allocated to such Group.

REMIC : A “real estate mortgage investment conduit” within the meaning of Code Section 860D. References to the “REMIC” are to the Constituent REMICs constituting one or more portions of the Trust Fund.

REMIC Account : Any account or accounts that are required to be established (in the same manner as the Certificate Account is established) and maintained pursuant to Section 12.04.

REMIC Provisions : The provisions of the federal income tax law relating to REMICs, appearing at Code Sections 860A through 860G, and related provisions and regulations promulgated thereunder, as may be in effect from time to time.

Remittance Delinquencies : For any Determination Date, the aggregate of the originally scheduled interest and principal installments (as adjusted for any Principal Prepayments) on Mortgage Loans due from and payable by the Mortgagors for all Due Dates during the Collection Period preceding such Determination Date but not received on or before such Determination Date.

REO Mortgage Loan : Any Mortgage Loan which is not a Liquidated Loan and as to which the related Mortgaged Property is held as part of the Trust Fund.

REO Proceeds : Proceeds, net of any related expenses of the Servicer, received in respect of any REO Mortgage Loan (including, without limitation, proceeds from the rental of the related REO Property).

REO Property : A Mortgaged Property acquired by or on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC Provisions.

Reportable Event : As defined in Section 4.09(d).

Required Amount of Certificates : (i) 66 2/3% or more of the aggregate Voting Interest of the Outstanding Certificates and (ii) 66 2/3% or more of the aggregate Outstanding Percentage Interest of the Residual Certificates.

Responsible Officer : For any Person, the Chairman or any Vice Chairman of the Board of Directors or Trustee, the Chairman or Vice Chairman of the Executive or Standing Committee of the Board of Directors or Trustee, the President, the Chairman of the committee on trust matters, any executive vice president, senior vice president, first vice president, second vice president, vice president, any assistant vice president, the Secretary, any assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant or deputy cashier, any trust officer or assistant trust officer, the Controller and any assistant controller or any other officer of such Person customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer of such Person to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject; provided , however , that in respect of the Trustee and the Paying Agent, “Responsible Officer” shall mean any officer within the Corporate Trust Department thereof, including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer who customarily performs functions similar to those provided by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject.

S&P : Standard and Poor’s, a division of The McGraw-Hill Companies, Inc.

Scheduled Principal Balance : For a Mortgage Loan on any date, the initial principal balance of the loan, less the sum of (a) the aggregate of the principal portion of all scheduled Monthly Payments required to be made on such loan on or before the first day of the month in which the date in questions falls (whether or not actually received) and (b) the aggregate of any and all Prepayment Principal on such loan posted before the close of business on the last business day of the month preceding the date in question.

Second Mortgage Loan : A Mortgage Loan secured by a second priority lien on the related Mortgaged Property.

 

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Senior Lien : The mortgage loan (which may be a Mortgage Loan) on Mortgaged Property having a first priority lien.

Servicer : CFMC, or its successor in interest, or any successor servicer appointed as herein provided.

Servicing Advance : The aggregate of the advances made by the Servicer pursuant to Sections 3.07(b), 3.11 and 3.18.

Servicing Event of Default : An event described in Section 7.01.

Servicing Function Participant : Any affiliate, third party vendor or Subservicer engaged by the Servicer or the Trustee that is participating in the servicing function with respect to the Mortgage Loans, within the meaning of Item 1122 of Regulation AB.

Servicing Officer : Any officer of the Servicer or of an Affiliate of the Servicer involved in, or responsible for, the administration and servicing of the Trust Fund whose name appears on a list of servicing officers attached to an Officer’s Certificate furnished to the Trustee and the Paying Agent by the Servicer, as such list may from time to time be amended.

Similar Law : As defined in Section 5.02.

Similar State Law : Any state law that has the effect of (a) reducing the Mortgage Note Rate or the amount of the Monthly Payment, or (b) suspending the obligation to make a Monthly Payment, on a Mortgage Loan due to the Mortgagor’s being placed on active duty status, in military service or similar status.

60+ Delinquent Loans : For a Determination Date, all REO Properties and all Mortgage Loans for which any portion of a Monthly Payment is 60 days or more Delinquent (without regard to any grace period) as of the last day of the preceding calendar month.

Subclass : For a Class of Certificates, any group of such Class designated as a Subclass in Article XII.

Subordinated Percentage : For any date, 100% minus the Class A Percentage.

Subordination Depletion Date : The first Distribution Date on which the Principal Balance of the Subordinated Certificates has been reduced to zero.

Subservicer : Any person or persons to which the Servicer has delegated servicing obligations hereunder pursuant to Section 3.03 or 6.06.

Subservicing Agreement : Any subservicing agreement between the Servicer and a Subservicer.

Substitution Adjustment Amount : As defined in the definition of Qualified Substitute Mortgage Loan.

Substitution Day : As defined in Section 2.04(a).

Trust Expenses : Any amounts payable by the Trust Fund pursuant to Section 8.05 or the Depositor pursuant to Section 12.05, including the Trustee’s compensation and expenses in acting as such hereunder.

Trustee : The Person executing this Agreement as Trustee, or its successor in interest, or any successor trustee appointed as herein provided.

Trust Fund : The corpus of the trust created by this Agreement, consisting of the Mortgage Loans, the Certificate Account, the Collection Account, each REMIC Account, any REO Property, any Primary Mortgage Insurance Certificates, any other insurance policies with respect to the Mortgage Loans, any investment earnings on amounts in any Investment Account and any other property or rights specified in Article XII as being part of the Trust Fund.

Uncommitted Cash : As of any Determination Date, any cash in the Collection Account representing Principal Prepayments or Liquidation Proceeds deposited after the Collection Period immediately preceding such Determination Date and all related payments of interest and all Prepaid Installments for Due Dates subsequent to the end of such Collection Period.

Unpaid Loan Balance : For any Mortgage Loan as of any date, the outstanding principal balance thereof on such date.

 

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U.S. Person : A citizen or resident of the United States of America, a corporation or partnership (unless, in the case of a partnership, Treasury regulations are adopted that provide otherwise) created or organized in or under the laws of the United States of America, any state thereof or the District of Columbia, including an entity treated as a corporation or partnership for federal income tax purposes, an estate whose income is subject to U.S. federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of such trust, and one or more such U.S. Persons have the authority to control all substantial decisions of such trust (or, to the extent provided in applicable Treasury regulations, certain trusts in existence on August 20, 1996 which are eligible to elect to be treated as U.S. Persons).

Weighted Average Rate : For any Distribution Date, (a) in the case of Certificates, the weighted average of the Certificate Rates for the related Interest Accrual Period for those outstanding Certificates having a Principal Balance, calculated prior to giving effect to any principal distributions to the Certificates on such date and (b) in the case of Mortgage Loans, the weighted average of the Mortgage Note Rates for such Mortgage Loans based on the Loan Balances thereof on or as of the date specified.

Section 1.02 Fiscal Year . The fiscal year of the Trust will be the calendar year.

ARTICLE II

CONVEYANCE OF TRUST FUND; ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01 Conveyance of Trust Fund . CRMSI, concurrently with the execution and delivery of this Agreement, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse, all the right, title and interest of CRMSI in and to the Trust Fund, including without limitation all of the right, title and interest of CRMSI in the Mortgage Loans, including all amounts received or receivable by CRMSI on or with respect to the Mortgage Loans (other than payments of principal and interest due and payable on the Mortgage Loans, and Principal Prepayments thereon received, on or before the Cut-Off Date), together with all of its right, title and interest in and to the proceeds of any title, hazard or other insurance policies, or Primary Mortgage Insurance Certificates, related to such Mortgage Loans. The transfer of the Mortgage Loans hereunder is absolute and is intended by the parties hereto as a sale. It is the intention of CRMSI that all Mortgage Loans transferred to the Trust Fund be removed from CRMSI’s assets and estate. If the transfer of the Mortgage Loans is instead characterized as a pledge and not as a sale, then (x) CRMSI shall be deemed to have granted to the Trustee a first priority security interest in all of CRMSI’s right, title and interest in and to such the Mortgage Loans and other assets of the Trust Fund and (y) it is the intention of the parties that this Agreement constitute a security agreement under applicable law in favor of the Trustee, as secured party hereunder. CRMSI shall not transfer any additional property to the Trust Fund except as expressly permitted by this Agreement.

(a) (1) In connection with such transfer and assignment of Mortgage Loans, CRMSI does herewith deliver to the Trustee (or to the Custodian on behalf of the Trustee) to be held in trust the following documents or instruments with respect to each Mortgage Loan so transferred and assigned (except where, and to the extent, CRMSI is complying with Section 2.01(b)):

(i) The Mortgage Note, endorsed (whether by means of an allonge or otherwise) by manual or facsimile signature without recourse by the Originator or an Affiliate of the Originator in blank or to the Trustee showing a complete chain of endorsements from the named payee to the Trustee or from the named payee to the Affiliate of the Originator and from such Affiliate to the Trustee or, for any lost, misplaced or destroyed Mortgage Note, an original Lost Note Affidavit, provided that endorsement is not required where MERS is the named payee or the nominee of the named payee;

(ii) The original recorded Mortgage with evidence of recording thereon, or a copy of the Mortgage certified by the public recording office in those jurisdictions where the public recording office retains the original;

 

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(iii) Any original assumption or modification agreement applicable to the Mortgage;

(iv) An assignment from the Originator to the Trustee in recordable form of the Mortgage which may be included, where permitted by local law, in a blanket assignment or assignments of the Mortgage to the Trustee, including any intervening assignments and showing a complete chain of title from the original mortgagee named under the Mortgage to CRMSI or an Affiliate of CRMSI and to the Trustee, provided that (x) if the Mortgage is registered with MERS, only assignments from the originator of the Mortgage to MERS will be required and (y) if the Mortgage was originated with MERS as the original mortgagee, no interim assignment will be required; and

(v) Either (x) the original or a copy of the title insurance policy (which may be a certificate or a short form policy relating to a master policy of title insurance) or the title searches pertaining to the Mortgaged Property, or in the event such original title policy is unavailable, a copy of the preliminary title report and the lender’s recording instructions, with the original to be delivered within 180 days of the Issue Date or other evidence of title or (y) in jurisdictions where such practice is customary and acceptable, an attorney’s opinion as to title or an insured title report.

(2) In addition, CRMSI, concurrently with the execution and delivery of this Agreement and in connection with such transfer and assignment of Mortgage Loans shall deposit in the Collection Account the amount of all payments received by CRMSI after the Cut-Off Date and prior to the Issue Date with respect to the Mortgage Loans, to the extent such payments are being transferred and assigned to the Trustee hereunder, except any portion of such payments on Mortgage Loans (including servicing fees) of a type not required to be deposited as specified in Article XII.

(b) In instances where an original recorded Mortgage cannot be delivered to the Trustee by the Issue Date, due to a delay in the recording, CRMSI may (a) in lieu of delivering such original recorded Mortgage referred to in clause (a)(1)(ii) above, deliver to the Trustee a copy thereof, provided that CRMSI certifies that the original Mortgage has been delivered to a title insurance company for recordation after receipt of its policy of title insurance or binder therefor (which may be a certificate relating to a master policy of title insurance), and (b) in lieu of delivering the completed assignment in recordable form referred to in clause (a)(1)(iv) above to the Trustee, deliver such assignment to the Trustee completed except for recording information. In such instances, CRMSI will deliver the original recorded Mortgage and completed assignment (if applicable) to the Trustee promptly upon receipt thereof. In instances where an original recorded Mortgage or assignment has been lost or misplaced, CRMSI or the related title insurance company may deliver, in lieu thereof, a copy of such Mortgage or assignment bearing recordation information. In instances where the original or a copy of the title insurance policy referred to in clause (a)(1)(v)(x) above pertaining to a Mortgaged Property cannot be delivered to the Trustee by the Issue Date because such policy is not yet available, CRMSI may deliver to the Trustee a binder with respect to such policy and deliver the original or a copy of such policy to the Trustee when available. In instances where an original assumption or modification agreement cannot be delivered to the Trustee by the Issue Date, CRMSI may deliver a certified copy thereof, and will deliver the original assumption or modification agreement to the Trustee promptly upon receipt thereof.

CRMSI agrees, at its own expense, to prepare each assignment referred to in clause (a)(1)(iv) above and deliver a copy of each such assignment to the Trustee as soon as practicable but not later than 60 days after the Issue Date. CRMSI intends to effect recordation of each such assignment (or to supply the Trustee with evidence of recordation) as soon as practicable after the Issue Date in the appropriate public office for real property records in each jurisdiction in which such recordation is required by a Rating Agency. In addition, in the event that on a Distribution Date a Mortgage Loan is 90 days Delinquent, if recordation of assignment is required by any Rating Agency under its then current ratings

 

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criteria, then CRMSI shall effect recordation of an assignment of the related Mortgage to the Trustee promptly thereafter. Except as provided in this paragraph, neither CRMSI nor any Originator or Affiliate of any Originator shall have any obligation to record any assignment of any Mortgage in order to name the Trustee as mortgagee of record. The preceding sentence shall not be in derogation of the obligation of CRMSI, the Originators and Affiliates of the Originators to record (and supply the Trustee with evidence thereof) assignments of Mortgages required in order that CRMSI, an Originator or an Affiliate of an Originator be shown as mortgagee of record of each Mortgage.

In the case of Mortgage Loans which have been prepaid in full after the Cut-Off Date and prior to the Issue Date, CRMSI, in lieu of delivering the above documents to the Trustee, herewith delivers to the Trustee a Request for Release as set forth in Section 3.12(a). In connection with such transfer and delivery of the balance of the Trust Fund, CRMSI, concurrently with the execution and delivery of this Agreement, shall deposit into the Collection Account cash in the amount (if any) specified in Article XII.

Wherever it is provided in this Section 2.01 that any document, evidence or information relating to a Mortgage Loan be delivered or supplied to the Trustee, CRMSI or the Servicer, as applicable, shall do so by delivery thereof to the Custodian, to be held on behalf of the Trustee. The functions of the Trustee under this Agreement with respect to the custody, acceptance, inspection and release of the Mortgage Files (including the review provided for in Section 2.02) shall be performed by the Custodian, on behalf of the Trustee.

(c) The parties hereto acknowledge and agree that it is not intended that any mortgage loan be included in the Trust Fund that is a “High-Cost” or “Covered” mortgage loan as defined by the U.S. Home Ownership and Equity Protection Act of 1994, as amended, or any other applicable local, state or federal predatory or abusive lending laws.

Section 2.02 Acceptance by Trustee . The Trustee, by execution and delivery hereof, acknowledges receipt, subject to the review described in the following paragraph, of the documents and other property referred to in Section 2.01 and declares that the Trustee holds and will hold such documents and other property, including property yet to be received in the Trust Fund, in trust, upon the trusts herein set forth, for the benefit of all present and future Certificateholders.

The Trustee (or the Custodian on the Trustee’s behalf) shall, for the benefit of the Certificateholders, review each Mortgage File within 180 days after the Issue Date, to ascertain that all required documents have been executed, received and recorded, if applicable, and that such documents relate to the Mortgage Loans identified in Exhibit B. If in the course of such review the Trustee finds a document or documents constituting a part of a Mortgage File to be defective in any material respect, the Trustee shall promptly so notify CRMSI, whereupon CRMSI shall have a period of 180 days within which to correct or cure any such defect (including correction or cure by substitution if permitted by Section 2.04). If any such material defect has not been corrected or cured, CRMSI will, not later than 180 days after the Trustee’s notice respecting such defect, repurchase the related Mortgage Loan from the Trustee at a price (the “Loan Repurchase Price”) equal to (i) the Loan Balance of such Mortgage Loan as of the date of repurchase, plus, (ii) to the extent not previously advanced by the Servicer, accrued and unpaid interest thereon at the Mortgage Note Rate to (but not including) the date of repurchase, plus (iii) any unreimbursed payments with respect to such Mortgage Loan, to the extent not covered in (ii) above, as part of a Servicing Advance or a Delinquency Advance, plus (iv) any unreimbursed costs, penalties or damages incurred by the Trustee or the Trust Fund in connection with any violation of applicable predatory or abusive lending laws with respect to such Mortgage Loan or otherwise incurred in connection with such material defect. Notwithstanding the preceding two sentences, any material defect that causes a Mortgage Loan to fail to constitute a “qualified mortgage” within the meaning of Code Section 860G(a)(3) shall either be corrected or cured by CRMSI or, failing such correction or cure, CRMSI shall repurchase such Mortgage Loan at the Loan Repurchase Price (or, if within two years of the Startup Day, or such other period as may be permitted by the REMIC Provisions, substitute a Qualified

 

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Substitute Mortgage Loan therefor pursuant to Section 2.04) no later than 90 days after the discovery of such material defect. Any such repurchase shall be considered a prepayment in full of such Mortgage Loan on date of repurchase and shall be deposited by CRMSI in the Collection Account and, upon receipt by the Trustee of written notification of such deposit signed by an Authorized Officer of CRMSI, the Trustee shall release to CRMSI or its designee the related Mortgage File and shall execute and deliver such instruments of transfer or assignment furnished to the Trustee, in each case without recourse, as CRMSI shall reasonably request, to vest in CRMSI or such designee any Mortgage Loan so released. Any repurchase by CRMSI of a Mortgage Loan hereunder shall be deemed to include the right to receive any Monthly Payment or other remittance thereon payable or received after the date of repurchase, and the Trustee or the Paying Agent shall, upon receipt thereof, promptly remit the amount of such Monthly Payment or other remittance to CRMSI. It is understood and agreed that the obligation of CRMSI to repurchase any Mortgage Loan or make a substitution therefor pursuant to Section 2.04 as to which a material defect in a constituent document exists shall constitute the sole remedy against CRMSI with respect to such defect available to the Certificateholders or the Trustee on behalf of the Certificateholders.

Section 2.03 Representations and Warranties of CRMSI and CFMC . (a) CRMSI makes the representations and warranties set forth in Article XIV to the Trustee (which representations are incorporated by reference herein as though set forth below in this Section 2.03(a)) and, in addition, CRMSI hereby represents and warrants to the Trustee that:

(i) The information set forth in Exhibit B was true and correct in all material respects as of the Cut-Off Date;

(ii) As of the Issue Date, each Mortgage is a valid first lien on the property securing the related Mortgage Note subject only to (a) the lien of current real property taxes and assessments, (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage, such exceptions appearing of record being acceptable to mortgage lending institutions generally or specifically referred to in the title insurance policy or reflected in the appraisal obtained in connection with the origination of the related Mortgage Loan and (c) other matters to which like properties are commonly subject that do not in the aggregate materially interfere with the benefits of the security intended to be provided by such Mortgage;

(iii) Immediately prior to the transfer of the Mortgage Loans to the Trustee, CRMSI has good title to, and is the sole owner of, each Mortgage Loan (except as set forth in clause (v) below) and immediately upon the transfer and assignment herein contemplated, CRMSI will have taken all steps necessary so that the Trustee will have good title to, and will be the sole owner of, each Mortgage Loan (except as set forth in clause (v) below);

(iv) As of the Cut-Off Date, except as stated in Article XIV, no payment of principal of or interest on or in respect of any Mortgage Loan is more than 30 days Delinquent;

(v) As of the Cut-Off Date, there is no mechanics’ lien or claim for work, labor or material affecting the premises subject to any Mortgage which is or may be a lien prior to, or equal with, the lien of such Mortgage except those which are insured against by the title insurance policy or report referred to in (x) below;

(vi) As of the Cut-Off Date, there is no delinquent tax or assessment lien against any Mortgaged Property;

(vii) As of the Issue Date, there is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay the unpaid principal and interest on such Mortgage Note;

(viii) As of the Cut-Off Date, each Mortgaged Property is free of substantial damage;

(ix) Each Mortgage Loan at the time it was originated complied in all material respects with applicable state, local and federal laws, including but not limited to, all applicable predatory and abusive lending laws;

 

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(x) A lender’s title insurance policy or binder (which policy was issued in standard ALTA or equivalent form), insured title report or other assurance of title customary in the relevant jurisdiction, was issued on the date of the origination of each Mortgage Loan and, as of the Issue Date, each such policy, binder, report or assurance is valid and remains in full force and effect;

(xi) The Mortgage Loans conform in all material respects with the descriptions thereof in the Prospectus and the Prospectus Supplement relating to the Certificates;

(xii) The original principal balance of each Mortgage Loan was not more than 115% of the Original Value of such Mortgage Loan;

(xiii) For each Mortgage where a Lost Note Affidavit has been delivered to the Trustee, the related original Mortgage Note is no longer in existence;

(xiv) As of the Issue Date, each Mortgage was recorded (or was in the process of being recorded) in the name of CRMSI or an Affiliate of CRMSI;

(xv) No Mortgage has been satisfied, canceled, subordinated or rescinded, in whole or in part, and the related Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, release, cancellation, subordination or rescission.

(xvi) No fraud or material misrepresentation with respect to the origination of a Mortgage Loan has been committed by CRMSI or any Affiliate of CRMSI.

(xvii) The proceeds of each Mortgage Loan have been fully disbursed and there is no requirement for future advances thereunder.

(xviii) As of the date of origination and as of the Cut-Off Date, to the best of CRMSI’s knowledge, each Mortgaged Property was lawfully occupied.

(xix) The servicing and collection practices used in connection with each Mortgage Loan have been in all material respects in accordance with applicable law.

(xx) As of the Cut-Off Date, there was no proceeding pending or, to CRMSI’s knowledge, threatened for the total or partial condemnation of a Mortgaged Property.

(xxi) As of the Cut-Off Date, no Mortgagor was a debtor in any state or federal bankruptcy or insolvency proceeding.

(xxii) The Mortgage Documents for all Mortgage Loans have been delivered to the Mortgage File Custodian or will be so delivered within a reasonable time after receipt thereof from a settlement agent or recording officer.

(xxiii) No Mortgage Loan contains provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by the Originator or any other person on behalf of the Mortgagor, or contains any similar provisions which may constitute a “buydown” provision.

(xxiv) No Mortgage Loan is a “High Cost” or “Covered” mortgage loan as defined by applicable local, state or federal predatory and abusive lending laws.

(xxv) Each Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code.

(xxvi) Each Mortgage Loan was originated by an entity described in Section 3(a)(41)(A)(ii) of the Exchange Act.

The representations and warranties set forth in, or incorporated by reference in, this Section 2.03(a) shall survive delivery of the Mortgage Loans to the Trustee. Upon discovery by CRMSI or the Trustee of a breach of any of the foregoing representations and warranties that materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan (including any Mortgage Loan substituted for a nonconforming Mortgage Loan pursuant to Section 2.04), the party discovering such breach shall give prompt written notice to the other parties hereto. If within 60 days of the date of such notice of breach or, with the prior written consent of a Responsible Officer of the Trustee, such longer

 

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period specified in such consent, CRMSI does not cure such breach in all material respects (including by substitution of one or more Qualified Substitute Mortgage Loans if permitted by Section 2.04), CRMSI shall repurchase such Mortgage Loan from the Trustee.

Any such repurchase of a Mortgage Loan by CRMSI shall be accomplished in the manner set forth in Section 2.02 and at the Loan Repurchase Price. Any such repurchase shall be considered a prepayment in full of such Mortgage Loan on date of repurchase and shall be deposited by CRMSI in the Collection Account and, upon receipt by the Trustee of written notification of such deposit signed by an Authorized Officer of CRMSI, the Trustee shall release to CRMSI or its designee the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as CRMSI shall reasonably request, to vest in CRMSI or such designee any Mortgage Loan so released. Any repurchase by CRMSI of a Mortgage Loan hereunder shall be deemed to include the right to receive any Monthly Payment or other remittance thereon payable or received after the date of repurchase, and the Trustee or the Paying Agent shall, upon receipt thereof, promptly remit the amount of such Monthly Payment or other remittance to CRMSI. It is understood and agreed that the obligation of CRMSI to repurchase or substitute (as provided in Section 2.04) any Mortgage Loan as to which a breach occurred and is continuing shall constitute the sole remedy against CRMSI respecting such breach available to the Certificateholders or the Trustee on behalf of the Certificateholders.

(b) CFMC hereby represents and warrants to the Trustee as follows:

(i) It is a corporation validly existing and in good standing under the laws of the State of New York and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Servicer.

(ii) It has the full corporate power and authority to service each Mortgage Loan and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized, by all necessary corporate action on its part, the execution, delivery and performance of this Agreement.

(iii) The execution and delivery of this Agreement by it, the servicing of the Mortgage Loans by it under this Agreement, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Servicer and will not (A) result in a material breach of any term or provision of the charter or by-laws of the Servicer or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which it is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to it of any court, regulatory body, administrative agency or governmental body having jurisdiction over it.

(iv) It is a HUD-approved mortgagee.

(v) No litigation is pending or, to the best of its knowledge, threatened, against the Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or its ability to service the Mortgage Loans or to perform any of its other obligations under this Agreement in accordance with the terms hereof.

Section 2.04 Substitution of Qualified Substitute Mortgage Loans for Nonconforming Mortgage Loans . (a) CRMSI shall have the right, in an event requiring a repurchase pursuant to Section 2.02 or 2.03(a), to substitute one or more Qualified Substitute Mortgage Loans for any one or more nonconforming Mortgage Loans, any such substitution to take place on the Business Day designated by CRMSI (the “Substitution Day”) occurring before a date two years after the Startup Day, subject to the Trustee receiving an Officer’s Certificate of CRMSI attaching as an exhibit a supplemental Mortgage Loan schedule (the “Supplemental Mortgage Loan Schedule”) setting forth the same type of information as appears on the Mortgage Loan Schedule and representing as to the accuracy thereof and confirming that the representations and warranties contained in Section 2.03(a) (other than paragraphs (i) and (xi)

 

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thereof) are true and correct in all material respects with respect to the Qualified Substitute Mortgage Loans on and as of the Substitution Day, provided that remedies for the inaccuracy of such representation are limited as set forth in Sections 2.02, 2.03(a) and this 2.04. CRMSI shall also deposit on the Substitution Day an amount equal to any unreimbursed costs, penalties or damages incurred by the Trustee or the Trust Fund in connection with any violation of applicable predatory or abusive lending laws with respect to such nonconforming Mortgage Loan or Loans.

(b) In the event that, on the Substitution Day, any Prepaid Installments have been deposited for such replaced Mortgage Loan, the full amount of such Prepaid Installments shall be paid on the Substitution Day to CRMSI from the Collection Account.

(c) Concurrently with the satisfaction of the conditions set forth in Section 2.04(a) and the grant of such Qualified Substitute Mortgage Loans to the Trustee pursuant to Section 2.04(a), (A) Exhibit B to this Agreement shall be deemed to be amended to exclude all Mortgage Loans being replaced by such Qualified Substitute Mortgage Loans and to include, pursuant to Section 10.01, the information set forth on the Supplemental Mortgage Loan Schedule with respect to such Qualified Substitute Mortgage Loans, and all references in this Agreement to Mortgage Loans shall include such Qualified Substitute Mortgage Loans and (B) the Trustee shall release to CRMSI or its designee the nonconforming Mortgage Loan or Loans and related Mortgage Files and execute and deliver such instruments of transfer or assignment as may be required to transfer, without recourse, to CRMSI or such designee such nonconforming Mortgage Loan or Loans.

Section 2.05 [Reserved].

Section 2.06 Authentication of Certificates . The Trustee has authenticated and delivered or caused to be authenticated and delivered to or upon a Depositor Order, in exchange for the Mortgage Loans, concurrently with the transfer and assignment to the Trustee of the Mortgage Loans, Certificates duly authenticated by the Trustee or an Authenticating Agent in authorized denominations evidencing the entire ownership of the Trust Fund.

Section 2.07 Permitted Activities . The Trust is created for the object and purposes of engaging in Permitted Activities.

Section 2.08 Additional Representations . CRMSI represents and warrants that

(a) The Mortgage Notes constitute “instruments” within the meaning of the Delaware Uniform Commercial Code. All original executed Mortgage Notes have been or will be delivered to the Trustee (or the Custodian on its behalf) in accordance with this Agreement.

(b) The Mortgage File Custodial Agreement provides that the Custodian is holding the Mortgage Notes that evidence the Mortgage Loans solely on behalf of and for the benefit of the Trustee and the Holders of Certificates.

(c) None of the Mortgage Notes has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any person other than CRMSI and the Trustee.

(d) CRMSI has not authorized the filing of, and is not aware of, any financing statement against CRMSI that includes a description of the Mortgage Loans or the Mortgage Notes.

(e) CRMSI is not aware of any judgment or tax lien filings against it.

ARTICLE III

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 3.01 Servicing . Acting directly or through one or more Subservicers as provided in Section 3.03, the Servicer shall service and administer the Mortgage Loans in accordance with this Agreement, the terms of the respective Mortgage Loans, all applicable laws (including, without limitation, any applicable predatory and abusive lending laws), and its normal and customary servicing standards, and shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration which it may deem necessary or desirable. The Servicer shall not be required to

 

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institute litigation for collection of any payment if it reasonably questions its ability to enforce the provision of the Mortgage Loan under which the payment is required. Subject to the terms hereof, the Servicer shall have full power and authority to execute and deliver, on behalf of the Trustee, customary consents, waivers and similar instruments.

Subject to Section 3.03, the Servicer may, and is hereby authorized to, perform any of its servicing responsibilities with respect to all or certain of the Mortgage Loans through a Subservicer as it may from time to time designate, but no such designation of a Subservicer shall serve to release the Servicer from any of its obligations under this Agreement. Such Subservicer shall have the rights and powers of the Servicer which have been delegated to such Subservicer with respect to such Mortgage Loans under this Agreement.

Without limiting the generality of the foregoing, but subject to Sections 3.11 and 3.12, the Servicer in its own name or in the name of a Subservicer may be authorized and empowered pursuant to a power of attorney executed and delivered by the Trustee to execute and deliver, and may be authorized and empowered by the Trustee to execute and deliver, on behalf of itself, the Holders and the Trustee or any of them, (i) any and all instruments of satisfaction or cancellation or of partial or full release or discharge and all other comparable instruments with respect to the Mortgage Loans and the Mortgaged Properties, (ii) to institute foreclosure proceedings or obtain a deed in lieu of foreclosure so as to effect ownership of any Mortgaged Property in the name of the Servicer on behalf of the Trustee, and (iii) to hold title to any Mortgaged Property upon such foreclosure or deed in lieu of foreclosure on behalf of the Trustee. Section 3.11(a) and Section 3.12(a) shall each constitute a revocable power of attorney from the Trustee to the Servicer to execute an instrument of satisfaction (or assignment of mortgage without recourse) for any Mortgage Loan held by the Trustee paid in full or foreclosed (or for which payment in full has been escrowed). Revocation of such power of attorney shall take effect upon (i) the receipt by the Servicer of written notice thereof from the Trustee or (ii) the termination of the Trust. Upon written instructions from the Servicer, the Trustee shall execute any documentation furnished to it by the Servicer for recordation by the Servicer in the appropriate jurisdictions as shall be necessary to effectuate the foregoing. Subject to Sections 3.11 and 3.12, the Trustee shall execute a power of attorney to the Servicer or any Subservicer and furnish them with any other documents as the Servicer or such Subservicer shall reasonably request in writing to enable the Servicer and such Subservicer to carry out their respective servicing and administrative duties hereunder.

The Servicer shall give prompt written notice to the Trustee of any action, of which the Servicer has actual knowledge, to (i) assert a claim against the Trust or (ii) assert jurisdiction over the Trust.

Section 3.02 Collection of Mortgage Payments . The Servicer shall make reasonable efforts to collect all payments called for under the terms of the Mortgage Loans and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any insurance policy relating to a Mortgage Loan or Mortgaged Property, follow collection procedures for all Mortgage Loans at least as rigorous as those applied to similar mortgage loans held in its own portfolio. Consistent with the foregoing, and unless otherwise provided in Article XII, the Servicer may in its discretion (a) waive or permit to be waived any late payment charge, prepayment charge, assumption fee or any penalty interest in connection with the prepayment of a Mortgage Loan or any other fee or charge that the Servicer would be entitled to retain as servicing compensation and (b) arrange with a Mortgagor a schedule for payment of Delinquent sums provided that, if such arrangement is for a period of more than 90 days, the Servicer reasonably believes that without such arrangement, the Mortgagor would default on the Mortgage Loan. In addition, in the event the Servicer shall consent to the deferment of the due date for any installment due on a Mortgage Loan, such Mortgage Loan shall be considered Delinquent to the same extent as if such installment had not been deferred.

 

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Section 3.03 Subservicing Agreements . The Servicer may enter into Subservicing Agreements for the servicing and administration of Mortgage Loans with any institution which (x) is authorized under the laws of each state necessary to enable it to perform its obligations under such Subservicing Agreement and (y) has experience servicing mortgage loans that are similar to the Mortgage Loans. The Servicer shall give written notice to the Trustee and the Rating Agencies of the appointment of any Subservicer (and shall receive the written confirmation of the Rating Agencies that such appointment shall not result in a withdrawal or downgrading by any Rating Agency of the then current rating of the Certificates). For purposes of this Agreement, the Servicer shall be deemed to have received payments on Mortgage Loans when a Subservicer has received such payments. Each Subservicer shall be expressly required to service the Mortgage Loans in accordance with this Agreement, and each Subservicing Agreement shall be consistent with and not violate the provisions of this Agreement and shall provide that the Trustee (if acting as successor Servicer) or any other successor Servicer shall have the right to terminate such agreement without payment of any penalty if the original Servicer is terminated or resigns. The Servicer shall deliver to the Trustee copies of all Subservicing Agreements and any amendments or modifications thereof promptly upon the execution thereof.

Notwithstanding the foregoing, to the extent the Servicer engages any affiliate or third party vendor pursuant to Section 6.06 or this Section 3.03, including any Subservicer, in connection with the performance of any of its duties under this Agreement, the Servicer shall immediately notify the Depositor in writing of such engagement. To the extent the Depositor notifies the Servicer and the Trustee that it has determined that any such affiliate, third party vendor or Subservicer is a Servicing Function Participant, the Servicer shall cause such Servicing Function Participant to prepare a separate assessment and attestation report, as contemplated by Section 3.19 of this Agreement and deliver such report to the Trustee as set forth in Section 3.22 of this Agreement. In addition, to the extent the Depositor notifies the Servicer and the Trustee that it has determined that any such Servicing Function Participant would be a “servicer” within the meaning of Item 1101 of Regulation AB and meets the criteria in Item 1108(a)(2)(i), (ii) or (iii) of Regulation AB (an “Additional Servicer”), the Servicer shall cause such Additional Servicer to prepare a separate compliance statement as contemplated by Section 3.14 of this Agreement and deliver such statement to the Trustee as set forth in Section 4.09 of this Agreement.

In addition, if the Depositor determines any such Servicing Function Participant would be a “servicer” within the meaning of Item 1101 of Regulation AB, the Servicer shall cause such Servicing Function Participant to provide the Depositor and the Trustee the information required by Section 1108(b) and 1108(c) of Regulation AB within two Business Days following such engagement. To the extent the Servicer terminates any such Servicing Function Participant that the Depositor has determined is a “servicer” within the meaning of Item 1101 of Regulation AB, the Servicer shall provide the Depositor and the Trustee the information required to enable the Trustee to accurately and timely report such event under Item 6.02 of Form 8-K (if the Trust’s Exchange Act reporting requirements have not been suspended pursuant to Section 15(d) of the Exchange Act as set forth in Section 4.09 of this Agreement).

Section 3.04 No Contractual Relationship . Any Subservicing Agreement and any other transactions or services relating to the Mortgage Loans involving a Subservicer shall be between the Subservicer and the Servicer alone, and the Trustee and the Holders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to any Subservicer except as set forth in Section 3.05.

Section 3.05 Assumption or Termination of Subservicing Agreement . In connection with the assumption of the responsibilities, duties and liabilities and of the authority, power and rights of the Servicer hereunder by the Trustee pursuant to Section 7.01, the Servicer’s rights and obligations under any Subservicing Agreement shall be assumed simultaneously by the Trustee without act or deed on part of the Trustee; provided , however , that the Trustee (if acting as successor Servicer) or any other successor Servicer may terminate the Subservicer as provided in Section 3.03.

 

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The Servicer shall at its expense, upon the reasonable request of the Trustee, deliver to the assuming party documents and records relating to each Subservicing Agreement and an accounting of amounts collected and held by it and otherwise use its best reasonable efforts to effect the orderly and efficient transfer of the Subservicing Agreements to the assuming party.

Section 3.06 Collection Account; Certificate Account . (a) The Servicer shall establish and maintain at one or more Depositories the Collection Account to be held as a trust account. Each Collection Account shall be established in the name of the Trustee, as trustee for the Holders of the Series of Certificates specified in Article XII. If the institution at any time holding the Collection Account ceases to be eligible as a Depository, then the Servicer shall immediately name a successor institution meeting the requirements for a Depository. If the Servicer fails to name such a successor institution, then the Collection Account shall thenceforth be held as a trust account with a qualifying Depository selected by the Trustee. The Servicer shall notify the Trustee if there is a change in the name, account number or institution holding the Collection Account.

The Depositor shall cause to be established with the Trustee on the Issue Date, and the Trustee shall maintain, the Certificate Account, to be held by the Trustee as trustee for the Holders of the specific Series of Certificates identified in Article XII.

(b) The Servicer may deposit in the Collection Account the appropriate payments, collections and funds in respect of one or more series of certificates issued under a registration statement covering the Certificates or similar certificates; provided that the senior class of certificates of each such other series and the senior Class of Certificates are rated either “AAA” or in the category “AA” or its equivalent by each Rating Agency, and provided further that separate accounting for each series is maintained.

Funds and other property in the Certificate Account shall not be commingled with any other moneys or property of the Trustee. However, the Trustee may hold any funds or other property received or held by it as part of the Certificate Account in collective accounts maintained by it in the normal course of its business and containing funds or property held by it for other persons; provided that such accounts are under the sole control of the Trustee and the Trustee maintains adequate records indicating the ownership of all such funds or property and the portions thereof held for credit to the Certificate Account.

(c) The Servicer shall deposit to the Collection Account all Interest Proceeds and Principal Proceeds for a Collection Period, as follows:

(1) within two Business Days of collection, all amounts representing full or partial Monthly Payments and Principal Prepayments;

(2) not later than the Business Day preceding the related Deposit Date, all amounts representing Net Liquidation Proceeds, Loan Repurchase Prices and Substitution Adjustment Amounts;

(3) not later than the related Deposit Date, all amounts representing Delinquency Advances, Compensating Interest, income from REO Properties and any net investment losses on funds held in the Collection Account as required by Section 4.03(b);

(4) within two Business Days of collection, any other amounts, not enumerated above in this Section 3.06(c), representing recoveries of amounts previously recognized as Realized Losses; and

(5) any other amounts specified in Article XII as being required deposits to the Collection Account;

minus amounts deposited in the Collection Account representing payments of principal and/or interest by a Mortgagor which are subsequently returned as unpaid or “NSF”. The aggregate of the amounts so deposited in respect of a particular Collection Period pursuant to this Section 3.06(c) is the “Monthly Deposit Amount”.

The foregoing requirements for deposit in the Collection Account shall be exclusive. Amounts required to be deposited into the Escrow Account and (unless otherwise provided in Article XII) amounts

 

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in the nature of prepayment charges, late payment charges, assumption fees, excess interest paid by Mortgagors and other fees and proceeds of reimbursements of Property Protection Expenses received with respect to Mortgage Loans need not be deposited by the Servicer in the Collection Account.

(d) The Servicer may from time to time make withdrawals from the Collection Account, only for the following purposes:

(A) to pay itself the Servicing Fee;

(B) to withdraw net investment earnings on amounts on deposit in the Collection Account;

(C) to effect reimbursement for Liquidation Expenses and Servicing Advances theretofore incurred in respect of any Mortgage Loan in an amount not to exceed the amount of Liquidation Proceeds deposited in respect of such Mortgage Loan, to withdraw any Foreclosure Profits and to pay itself the amounts due under Section 3.11(a) relating to deficiency actions;

(D) to effect reimbursement for Delinquency Advances, the right to reimbursement pursuant to this clause (D) being limited to amounts received on particular Mortgage Loans (including, for this purpose, Insurance Proceeds and Liquidation Proceeds) that represent late recoveries of payments of principal and/or interest respecting which any such advance was made;

(E) to effect reimbursement for any Delinquency Advances and Servicing Advances that the Servicer has determined to have become Nonrecoverable Advances;

(F) to effect reimbursement for advances made on any Mortgage Loan in payment of taxes, assessments or insurance premiums (except premiums on any blanket policy referred to in Section 3.09) in any amount not theretofore reimbursed out of the Escrow Account;

(G) to receive reimbursements permitted under the last sentence of Section 6.03;

(H) to withdraw amounts that have been deposited to the Collection Account in error; and

(I) to clear and terminate the Collection Account following the termination of the Trust pursuant to Article IX.

The Servicer shall keep and maintain (or cause to be kept and maintained) separate accounting records, on a Pool-by-Pool and a Mortgage Loan-by-Mortgage Loan basis, for the purpose of accounting for withdrawals from the Collection Account pursuant to clauses (C) and (F) of this Section; provided , however , that such records need not be retained by the Servicer for a period longer than its five most recent fiscal years.

(e) The Servicer shall (x) remit for deposit in the Certificate Account by wire transfer, or otherwise make funds available in immediately available funds, the Monthly Deposit Amount for a Collection Period not later than the related Deposit Date, and (y) on each Determination Date, deliver to the Paying Agent a monthly servicing report, containing (without limitation) the following information for each Pool and on a combined basis: principal and interest collected in respect of the Mortgage Loans, scheduled principal and interest that was due on the Mortgage Loans, relevant information with respect to any Liquidated Loans, summary and detailed delinquency reports, Liquidation Proceeds and other similar information concerning the servicing of the Mortgage Loans, including the information set forth in Section 4.07(b). In addition, the Servicer shall inform the Trustee on each Determination Date of the amounts of any Loan Repurchase Prices and Substitution Adjustment Amounts for such Collection Period.

Section 3.07 Delinquency Advances; Servicing Advances . (a) On each Determination Date, the Servicer shall elect whether to remit for deposit to the Collection Account out of its own funds any Delinquent payment of interest and/or principal on each Delinquent Mortgage Loan that is not an REO Mortgage Loan, which payment was not re