EXHIBIT 4.1
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STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2006
Residential Funding Mortgage Securities I, Inc.
Mortgage Pass-Through Certificates
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS........................................................................................1
Section 1.01
Definitions..................................................................................1
Section 1.02 Use of Words and
Phrases....................................................................31
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..................................32
Section 2.01 Conveyance of Mortgage
Loans................................................................32
Section 2.02 Acceptance by
Trustee.......................................................................38
Section 2.03 Representations, Warranties and Covenants of the
Master Servicer and the Company............39
Section 2.04 Representations and Warranties of Residential
Funding.......................................41
Section 2.05 Execution and Authentication of Certificates/Issuance
of Certificates Evidencing
Interests in REMIC
I........................................................................43
Section 2.06 Conveyance of Uncertificated REMIC I and REMIC II
Regular Interests; Acceptance by the
Trustee.....................................................................................43
Section 2.07 Issuance of Certificates Evidencing Interests in REMIC
II...................................43
Section 2.08 Purposes and Powers of the
Trust............................................................43
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS..................................................43
Section 3.01 Master Servicer to Act as
Servicer..........................................................43
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of
Subservicers' and Sellers'
Obligations......................................................45
Section 3.03 Successor
Subservicers......................................................................46
Section 3.04 Liability of the Master
Servicer............................................................46
Section 3.05 No Contractual Relationship Between Subservicer and
Trustee or Certificateholders...........47
Section 3.06 Assumption or Termination of Subservicing Agreements
by Trustee.............................47
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits
to Custodial Account.................47
Section 3.08 Subservicing Accounts; Servicing
Accounts...................................................50
Section 3.09 Access to Certain Documentation and Information
Regarding the Mortgage Loans................52
Section 3.10 Permitted Withdrawals from the Custodial
Account............................................52
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Section 3.11 Maintenance of the Primary Insurance Policies;
Collections Thereunder.......................54
Section 3.12 Maintenance of Fire Insurance and Omissions and
Fidelity Coverage...........................55
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain
Assignments.................................................................................56
Section 3.14 Realization Upon Defaulted Mortgage
Loans...................................................58
Section 3.15 Trustee to Cooperate; Release of Mortgage
Files.............................................61
Section 3.16 Servicing and Other Compensation; Compensating
Interest.....................................63
Section 3.17 Reports to the Trustee and the
Company......................................................64
Section 3.18 Annual Statement as to
Compliance...........................................................64
Section 3.19 Annual Independent Public Accountants' Servicing
Report.....................................64
Section 3.20 Rights of the Company in Respect of the Master
Servicer.....................................65
Section 3.21 Administration of Buydown
Funds.............................................................65
Section 3.22 Advance
Facility............................................................................66
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS...................................................................70
Section 4.01 Certificate
Account.........................................................................70
Section 4.02
Distributions...............................................................................70
Section 4.03 Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting.....70
Section 4.04 Distribution of Reports to the Trustee and the
Company; Advances by the Master Servicer.....73
Section 4.05 Allocation of Realized
Losses...............................................................74
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged
Property...............................74
Section 4.07 Optional Purchase of Defaulted Mortgage
Loans...............................................74
Section 4.08 Surety
Bond.................................................................................75
ARTICLE V THE
CERTIFICATES..................................................................................75
Section 5.01 The
Certificates............................................................................75
Section 5.02 Registration of Transfer and Exchange of
Certificates.......................................78
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates...........................................83
Section 5.04 Persons Deemed
Owners.......................................................................83
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TABLE OF CONTENTS
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Section 5.05 Appointment of Paying
Agent.................................................................84
ARTICLE VI THE COMPANY AND THE MASTER
SERVICER..............................................................84
Section 6.01 Respective Liabilities of the Company and the Master
Servicer...............................84
Section 6.02 Merger or Consolidation of the Company or the Master
Servicer; Assignment of Rights
and Delegation of Duties by Master
Servicer.................................................84
Section 6.03 Limitation on Liability of the Company, the Master
Servicer and Others......................85
Section 6.04 Company and Master Servicer Not to
Resign...................................................86
ARTICLE VII
DEFAULT.........................................................................................86
Section 7.01 Events of
Default...........................................................................86
Section 7.02 Trustee or Company to Act; Appointment of
Successor.........................................88
Section 7.03 Notification to
Certificateholders..........................................................90
Section 7.04 Waiver of Events of
Default.................................................................90
ARTICLE VIII CONCERNING THE
TRUSTEE.........................................................................90
Section 8.01 Duties of
Trustee...........................................................................90
Section 8.02 Certain Matters Affecting the
Trustee.......................................................92
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.......................................93
Section 8.04 Trustee May Own
Certificates................................................................94
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification.........................94
Section 8.06 Eligibility Requirements for
Trustee........................................................95
Section 8.07 Resignation and Removal of the
Trustee......................................................95
Section 8.08 Successor
Trustee...........................................................................96
Section 8.09 Merger or Consolidation of
Trustee..........................................................97
Section 8.10 Appointment of Co-Trustee or Separate
Trustee...............................................97
Section 8.11 Appointment of
Custodians...................................................................98
Section 8.12 Appointment of Office or
Agency.............................................................98
ARTICLE IX TERMINATION OR OPTIONAL PURCHASE OF ALL
CERTIFICATES.............................................98
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Section 9.01 Optional Purchase by the Master Servicer of All
Certificates; Termination Upon
Purchase by the Master Servicer or Liquidation of All Mortgage
Loans........................98
Section 9.02 Additional Termination
Requirements........................................................102
Section 9.03 Termination of Multiple
REMICs.............................................................103
ARTICLE X REMIC
PROVISIONS.................................................................................103
Section 10.01 REMIC
Administration......................................................................103
Section 10.02 Master Servicer, REMIC Administrator and Trustee
Indemnification..........................106
Section 10.03 Designation of
REMIC(s)...................................................................107
ARTICLE XI MISCELLANEOUS
PROVISIONS........................................................................107
Section 11.01
Amendment.................................................................................107
Section 11.02 Recordation of Agreement;
Counterparts....................................................110
Section 11.03 Limitation on Rights of
Certificateholders................................................110
Section 11.04 Governing
Law.............................................................................111
Section 11.05
Notices...................................................................................111
Section 11.06 Required Notices to Rating Agency and
Subservicer.........................................111
Section 11.07 Severability of
Provisions................................................................112
Section 11.08 Supplemental Provisions for
Resecuritization..............................................112
Section 11.09 Allocation of Voting
Rights...............................................................113
ARTICLE XII COMPLIANCE WITH REGULATION
AB..................................................................113
Section 12.01 Intent of the Parties;
Reasonableness.....................................................113
Section 12.02 Additional Representations and Warranties of the
Trustee..................................113
Section 12.03 Information to be Provided by the
Trustee.................................................114
Section 12.04 Report on Assessment of Compliance and
Attestation........................................114
Section 12.05 Indemnification;
Remedies.................................................................114
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EXHIBITS
Exhibit A:
Form of Class A Certificate
Exhibit B:
Form of Class M Certificate
Exhibit C:
Form of Class B Certificate
Exhibit D:
Form of Class R Certificate
Exhibit E:
Form of Seller/Servicer Contract
Exhibit F:
Forms of Request for Release
Exhibit G-1:
Form of Transfer Affidavit and Agreement
Exhibit G-2:
Form of Transferor Certificate
Exhibit H:
Form of Investor Representation Letter
Exhibit I:
Form of Transferor Representation Letter
Exhibit J:
Form of Rule 144A Investment Representation Letter
Exhibit K:
Text of Amendment to Pooling and Servicing Agreement Pursuant to
Section 11.01(e) for a Limited Guaranty
Exhibit L:
Form of Limited Guaranty
Exhibit M:
Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N:
Request for Exchange Form
Exhibit O:
Form of Form 10-K Certification
Exhibit P:
Form of Back-Up Certification to Form 10-K Certificate
Exhibit Q:
Information to be Provided by the Master Servicer to the Rating
Agencies Relating to Reportable Modified Mortgage Loans
Exhibit R:
Servicing Criteria
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This is the Standard Terms of Pooling and Servicing Agreement,
dated as of
January 1, 2006 (the "Standard Terms", and as incorporated by
reference into a
Series Supplement dated as of the Cut-off Date, the "Pooling and
Servicing
Agreement" or "Agreement"), among RESIDENTIAL FUNDING MORTGAGE
SECURITIES I,
INC., as the company (together with its permitted successors and
assigns, the
"Company"), RESIDENTIAL FUNDING CORPORATION, as master servicer
(together with
its permitted successors and assigns, the "Master Servicer"), and
the trustee
named in the applicable Series Supplement (together with its
permitted
successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell certain mortgage pass-through
certificates
(collectively, the "Certificates"), to be issued under each
Agreement in
multiple classes, which in the aggregate will evidence the entire
beneficial
ownership interest in the Mortgage Loans.
In consideration of the mutual agreements herein contained, the
Company,
the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the meanings specified
in this
Article.
Accretion Termination Date: As defined in the Series Supplement.
Accrual Certificates: As defined in the Series Supplement.
Accrued Certificate Interest: With respect to each Distribution
Date, as to
any Class or Subclass of Certificates (other than any Principal
Only
Certificates), interest accrued during the related Interest Accrual
Period at
the related Pass-Through Rate on the Certificate Principal Balance
or Notional
Amount thereof immediately prior to such Distribution Date. Accrued
Certificate
Interest will be calculated on the basis of a 360-day year,
consisting of twelve
30-day months. In each case Accrued Certificate Interest on any
Class or
Subclass of Certificates will be reduced by the amount of:
(i)
Prepayment Interest Shortfalls on all Mortgage Loans or, if the
Mortgage Pool is comprised of two or more Loan Groups, on the
Mortgage
Loans in the related Loan Group (to the extent not offset by the
Master Servicer with a payment of Compensating Interest as provided
in
Section 4.01),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or
the
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan))
of Realized Losses on all Mortgage Loans or, if the Mortgage Pool
is
comprised of two or more Loan Groups, on the Mortgage Loans in the
related Loan Group (including Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses
and Extraordinary Losses) not allocated solely to one or more
specific
Classes of Certificates pursuant to Section 4.05,
(iii) the interest portion of Advances that were (A) previously
made with
respect to a Mortgage Loan or REO Property on all Mortgage Loans
or,
if the Mortgage Pool is comprised of two or more Loan Groups, on
the
Mortgage Loans in the related Loan Group, which remained
unreimbursed
following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property or (B) made with respect to delinquencies that
were ultimately determined to be Excess Special Hazard Losses,
Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, and
(iv) any other interest shortfalls not covered by the subordination
provided by the Class M Certificates and Class B Certificates,
including interest that is not collectible from the Mortgagor
pursuant
to the Relief Act,
with all such reductions allocated (A) among all of the
Certificates in
proportion to their respective amounts of Accrued Certificate
Interest payable
on such Distribution Date absent such reductions or (B) if the
Mortgage Pool is
comprised of two or more Loan Groups, the related Senior Percentage
of such
reductions among the related Senior Certificates in proportion to
the amounts of
Accrued Certificate Interest payable from the related Loan Group on
such
Distribution Date absent such reductions, with the remainder of
such reductions
allocated among the holders of the Class M Certificates and Class B
Certificates
in proportion to their respective amounts of Accrued Certificate
Interest
payable on such Distribution Date absent such reductions. In
addition to that
portion of the reductions described in the preceding sentence that
are allocated
to any Class of Class B Certificates or any Class of Class M
Certificates,
Accrued Certificate Interest on such Class of Class B Certificates
or such Class
of Class M Certificates will be reduced by the interest portion
(adjusted to the
Net Mortgage Rate) of Realized Losses that are allocated solely to
such Class of
Class B Certificates or such Class of Class M Certificates pursuant
to Section
4.05.
Addendum and Assignment Agreement: The Addendum and Assignment
Agreement,
dated as of January 31, 1995, between MLCC and the Master Servicer.
Additional Collateral: Any of the following held, in addition to
the
related Mortgaged Property, as security for a Mortgage Loan: (i)
all money,
securities, security entitlements, accounts, general intangibles,
payment
rights, instruments, documents, deposit accounts, certificates of
deposit,
commodities contracts and other investment property and other
property of
whatever kind or description now existing or hereafter acquired
which is pledged
as security for the repayment of such Mortgage Loan, (ii)
third-party
guarantees, and (A) all money, securities, security entitlements,
accounts,
general intangibles, payment rights, instruments, documents,
deposit accounts,
certificates of deposit, commodities contracts and other investment
property and
other property of whatever kind or description now existing or
hereafter
acquired which is pledged as collateral for such guarantee or (B)
any mortgaged
property securing the performance of such guarantee, or (iii) such
other
collateral as may be set forth in the Series Supplement.
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Additional Collateral Loan: Each Mortgage Loan that is supported by
Additional Collateral.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any
date of
determination, the Mortgage Rate borne by the related Mortgage
Note, less the
rate at which the related Subservicing Fee accrues.
Advance: As to any Mortgage Loan, any advance made by the Master
Servicer,
pursuant to Section 4.04.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person. For
the purposes
of this definition, "control" means the power to direct the
management and
policies of such Person, directly or indirectly, whether through
the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Ambac: Ambac Assurance Corporation (formerly known as AMBAC
Indemnity
Corporation).
Amount Held for Future Distribution: As to any Distribution Date
and, with
respect to any Mortgage Pool that is comprised of two or more Loan
Groups, each
Loan Group, the total of the amounts held in the Custodial Account
at the close
of business on the preceding Determination Date on account of (i)
Liquidation
Proceeds, Subsequent Recoveries, Insurance Proceeds, Curtailments,
Mortgage Loan
purchases made pursuant to Section 2.02, 2.03, 2.04 or 4.07 and
Mortgage Loan
substitutions made pursuant to Section 2.03 or 2.04 received or
made in the
month of such Distribution Date (other than such Liquidation
Proceeds, Insurance
Proceeds and purchases of Mortgage Loans that the Master Servicer
has deemed to
have been received in the preceding month in accordance with
Section 3.07(b)),
and Principal Prepayments in Full made after the related Prepayment
Period, and
(ii) payments which represent early receipt of scheduled payments
of principal
and interest due on a date or dates subsequent to the related Due
Date.
Appraised Value: As to any Mortgaged Property, the lesser of (i)
the
appraised value of such Mortgaged Property based upon the appraisal
made at the
time of the origination of the related Mortgage Loan, and (ii) the
sales price
of the Mortgaged Property at such time of origination, except in
the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan
as to which
it is either the appraised value determined above or the appraised
value
determined in an appraisal at the time of refinancing or
modification, as the
case may be.
Assigned Contracts: With respect to any Pledged Asset Loan: the
Credit
Support Pledge Agreement; the Funding and Pledge Agreement, among
GMAC Mortgage
Corporation, National Financial Services Corporation and the
Mortgagor or other
person pledging the related Pledged Assets; the Additional
Collateral Agreement,
between GMAC Mortgage Corporation and the Mortgagor or other person
pledging the
related Pledged Assets; or such other contracts as may be set forth
in the
Series Supplement.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent
instrument, in recordable form, sufficient under the laws of the
jurisdiction
wherein the related Mortgaged
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Property is located to reflect of record the sale of the Mortgage
Loan to the
Trustee for the benefit of Certificateholders, which assignment,
notice of
transfer or equivalent instrument may be in the form of one or more
blanket
assignments covering Mortgages secured by Mortgaged Properties
located in the
same county, if permitted by law and accompanied by an Opinion of
Counsel to
that effect.
Assignment Agreement: The Assignment and Assumption Agreement,
dated the
Closing Date, between Residential Funding and the Company relating
to the
transfer and assignment of the Mortgage Loans.
Assignment of Proprietary Lease: With respect to a Cooperative
Loan, the
assignment of the related Cooperative Lease from the Mortgagor to
the originator
of the Cooperative Loan.
Available Distribution Amount: As to any Distribution Date and,
with
respect to any Mortgage Pool comprised of two or more Loan Groups,
each Loan
Group, an amount equal to (a) the sum of (i) the amount relating to
the Mortgage
Loans on deposit in the Custodial Account as of the close of
business on the
immediately preceding Determination Date, including any Subsequent
Recoveries,
and amounts deposited in the Custodial Account in connection with
the
substitution of Qualified Substitute Mortgage Loans, (ii) the
amount of any
Advance made on the immediately preceding Certificate Account
Deposit Date,
(iii) any amount deposited in the Certificate Account on the
related Certificate
Account Deposit Date pursuant to the second paragraph of Section
3.12(a), (iv)
any amount deposited in the Certificate Account pursuant to Section
4.07 and any
amounts deposited in the Custodial Account pursuant to Section
9.01, (v) any
amount that the Master Servicer is not permitted to withdraw from
the Custodial
Account or the Certificate Account pursuant to Section 3.16(e),
(vi) any amount
received by the Trustee pursuant to the Surety Bond in respect of
such
Distribution Date and (vii) the proceeds of any Pledged Assets
received by the
Master Servicer, reduced by (b) the sum as of the close of business
on the
immediately preceding Determination Date of (x) the Amount Held for
Future
Distribution, and (y) amounts permitted to be withdrawn by the
Master Servicer
from the Custodial Account in respect of the Mortgage Loans
pursuant to clauses
(ii)-(x), inclusive, of Section 3.10(a). Such amount shall be
determined
separately for each Loan Group. Additionally, with respect to any
Mortgage Pool
that is comprised of two or more Loan Groups, if on any
Distribution Date
Compensating Interest provided pursuant to Section 3.16(e) is less
than
Prepayment Interest Shortfalls incurred on the Mortgage Loans in
connection with
Principal Prepayments in Full received during the related
Prepayment Period and
Curtailments made in the prior calendar month, such Compensating
Interest shall
be allocated on such Distribution Date to the Available
Distribution Amount for
each Loan Group on a pro rata basis in accordance with the
respective amounts of
such Prepayment Interest Shortfalls incurred on the Mortgage Loans
in such Loan
Group in respect of such Distribution Date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation
or Debt Service Reduction; provided, however, that neither a
Deficient Valuation
nor a Debt Service Reduction shall be deemed a Bankruptcy Loss
hereunder so long
as the Master Servicer has notified the Trustee in writing that the
Master
Servicer is diligently pursuing any remedies that may exist in
connection with
the representations and warranties made regarding the related
4
Mortgage Loan and either (A) the related Mortgage Loan is not in
default with
regard to payments due thereunder or (B) delinquent payments of
principal and
interest under the related Mortgage Loan and any premiums on any
applicable
primary hazard insurance policy and any related escrow payments in
respect of
such Mortgage Loan are being advanced on a current basis by the
Master Servicer
or a Subservicer, in either case without giving effect to any Debt
Service
Reduction.
Book-Entry Certificate: Any Certificate registered in the name of
the
Depository or its nominee, and designated as such in the
Preliminary Statement
to the Series Supplement.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a day
on which banking institutions in the State of New York, the State
of Michigan,
the State of California, the State of Illinois or the City of St.
Paul,
Minnesota (and such other state or states in which the Custodial
Account or the
Certificate Account are at the time located) are required or
authorized by law
or executive order to be closed.
Buydown Funds: Any amount contributed by the seller of a Mortgaged
Property, the Company or other source in order to enable the
Mortgagor to reduce
the payments required to be made from the Mortgagor's funds in the
early years
of a Mortgage Loan. Buydown Funds are not part of the Trust Fund
prior to
deposit into the Custodial or Certificate Account.
Buydown Mortgage Loan: Any Mortgage Loan as to which a specified
amount of
interest is paid out of related Buydown Funds in accordance with a
related
buydown agreement.
Capitalization Reimbursement Amount: As to any Distribution Date,
the
amount of Advances or Servicing Advances that were added to the
Stated Principal
Balance of the related Mortgage Loans during the prior calendar
month and
reimbursed to the Master Servicer or Subservicer on or prior to
such
Distribution Date pursuant to Section 3.10(a)(vii), plus the
Capitalization
Reimbursement Shortfall Amount remaining unreimbursed from any
prior
Distribution Date and reimbursed to the Master Servicer or
Subservicer on or
prior to such Distribution Date.
Capitalization Reimbursement Shortfall Amount: As to any
Distribution Date,
the amount, if any, by which the amount of Advances or Servicing
Advances that
were added to the Stated Principal Balance of the Mortgage Loans
during the
preceding calendar month exceeds the amount of principal payments
on the
Mortgage Loans included in the Available Distribution Amount for
that
Distribution Date.
Call Rights: As defined in Section 9.01(f).
Cash Liquidation: As to any defaulted Mortgage Loan other than a
Mortgage
Loan as to which an REO Acquisition occurred, a determination by
the Master
Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and
other payments or cash recoveries which the Master Servicer
reasonably and in
good faith expects to be finally recoverable with respect to such
Mortgage Loan.
Certificate Account Deposit Date: As to any Distribution Date, the
Business
Day prior thereto.
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Certificateholder or Holder: The Person in whose name a Certificate
is
registered in the Certificate Register, and, in respect of any
Insured
Certificates, the Certificate Insurer to the extent of Cumulative
Insurance
Payments, except that neither a Disqualified Organization nor a
Non-United
States Person shall be a holder of a Class R Certificate for
purposes hereof
and, solely for the purpose of giving any consent or direction
pursuant to this
Agreement, any Certificate, other than a Class R Certificate,
registered in the
name of the Company, the Master Servicer or any Subservicer or any
Affiliate
thereof shall be deemed not to be outstanding and the Percentage
Interest or
Voting Rights evidenced thereby shall not be taken into account in
determining
whether the requisite amount of Percentage Interests or Voting
Rights necessary
to effect any such consent or direction has been obtained. All
references herein
to "Holders" or "Certificateholders" shall reflect the rights of
Certificate
Owners as they may indirectly exercise such rights through the
Depository and
participating members thereof, except as otherwise specified
herein; provided,
however, that the Trustee shall be required to recognize as a
"Holder" or
"Certificateholder" only the Person in whose name a Certificate is
registered in
the Certificate Register.
Certificate Insurer: As defined in the Series Supplement.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who
is the beneficial owner of such Certificate, as reflected on the
books of an
indirect participating brokerage firm for which a Depository
Participant acts as
agent, if any, and otherwise on the books of a Depository
Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to each Certificate
(other than
any Interest Only Certificate), on any date of determination, an
amount equal
to:
(i)
the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, plus
(ii) any Subsequent Recoveries added to the Certificate Principal
Balance
of such Certificate pursuant to Section 4.02, plus
(iii) in the case of each Accrual Certificate, an amount equal to
the
aggregate Accrued Certificate Interest added to the Certificate
Principal Balance thereof prior to such date of determination,
minus
(iv) the sum of (x) the aggregate of all amounts previously
distributed
with respect to such Certificate (or any predecessor Certificate)
and
applied to reduce the Certificate Principal Balance thereof
pursuant
to Section 4.02(a) and (y) the aggregate of all reductions in
Certificate Principal Balance deemed to have occurred in connection
with Realized Losses which were previously allocated to such
Certificate (or any predecessor Certificate) pursuant to Section
4.05;
provided, that the Certificate Principal Balance of the Class of
Subordinate
Certificates with the Lowest Priority at any given time shall be
further reduced
by an amount equal to the Percentage Interest evidenced by such
Certificate
multiplied by the excess, if any, of (A) the then aggregate
Certificate
Principal Balance of all Classes of Certificates then outstanding
over (B) the
then aggregate Stated Principal Balance of the Mortgage Loans.
6
Certificate Register and Certificate Registrar: The register
maintained and
the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates bearing the same
designation.
The initial Class A-V Certificates and any Subclass thereof issued
pursuant to
Section 5.01(c) shall be a single Class for purposes of this
Agreement.
Class A-P Certificate: Any one of the Certificates designated as a
Class
A-P Certificate.
Class A-P Collection Shortfall: With respect to the Cash
Liquidation or REO
Disposition of a Discount Mortgage Loan and any Distribution Date,
the excess of
the amount described in Section 4.02(b)(i)(C)(1) over the amount
described in
Section 4.02(b)(i)(C)(2).
Class A-P Principal Distribution Amount: As defined in Section
4.02.
Class A-V Certificate: Any one of the Certificates designated as a
Class
A-V Certificate, including any Subclass thereof.
Class B Certificate: Any one of the Certificates designated as a
Class B-1
Certificate, Class B-2 Certificate or Class B-3 Certificate.
Class M Certificate: Any one of the Certificates designated as a
Class M-1
Certificate, Class M-2 Certificate or Class M-3 Certificate.
Closing Date: As defined in the Series Supplement.
Code: The Internal Revenue Code of 1986.
Combined Collateral LLC: Combined Collateral LLC, a Delaware
limited
liability company.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, an
amount
equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments in
Full during the related Prepayment Period and Curtailments during
the prior
calendar month and included in the Available Distribution Amount
for such
Distribution Date, but not more than the lesser of (a) one-twelfth
of 0.125% of
the Stated Principal Balance of the Mortgage Loans immediately
preceding such
Distribution Date and (b) the sum of the Servicing Fee and all
income and gain
on amounts held in the Custodial Account and the Certificate
Account and payable
to the Certificateholders with respect to such Distribution Date;
provided that
for purposes of this definition the amount of the Servicing Fee
will not be
reduced pursuant to Section 7.02(a) except as may be required
pursuant to the
last sentence of such paragraph.
Cooperative: A private, cooperative housing corporation which owns
or
leases land and all or part of a building or buildings, including
apartments,
spaces used for commercial purposes and common areas therein and
whose board of
directors authorizes, among other things, the sale of Cooperative
Stock.
7
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned
or leased by a Cooperative, which unit the Mortgagor has an
exclusive right to
occupy pursuant to the terms of a proprietary lease or occupancy
agreement.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary
lease or occupancy agreement with respect to the Cooperative
Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock,
which lease or
agreement confers an exclusive right to the holder of such
Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by
(i) a
Security Agreement, (ii) the related Cooperative Stock Certificate,
(iii) an
assignment of the Cooperative Lease, (iv) financing statements and
(v) a stock
power (or other similar instrument), and ancillary thereto, a
recognition
agreement between the Cooperative and the originator of the
Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant
to Section
2.01 and are from time to time held as part of the Trust Fund.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership
instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan,
the
stock certificate or other instrument evidencing the related
Cooperative Stock.
Credit Repository: Equifax, Transunion and Experian, or their
successors in
interest.
Credit Support Depletion Date: The first Distribution Date on which
the
Certificate Principal Balances of the Subordinate Certificates have
been reduced
to zero.
Credit Support Pledge Agreement: The Credit Support Pledge
Agreement, dated
as of November 24, 1998, among the Master Servicer, GMAC Mortgage
Corporation,
Combined Collateral LLC and The First National Bank of Chicago (now
known as
Bank One, National Association), as custodian.
Cumulative Insurance Payments: As defined in the Series Supplement.
Curtailment: Any Principal Prepayment made by a Mortgagor which is
not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained
pursuant to Section 3.07 in the name of a depository institution,
as custodian
for the holders of the Certificates, for the holders of certain
other interests
in mortgage loans serviced or sold by the Master Servicer and for
the Master
Servicer, into which the amounts set forth in Section 3.07 shall be
deposited
directly. Any such account or accounts shall be an Eligible
Account.
Custodial Agreement: An agreement that may be entered into among
the
Company, the Master Servicer, the Trustee and a Custodian pursuant
to which the
Custodian will hold certain documents relating to the Mortgage
Loans on behalf
of the Trustee.
8
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof at the Cut-off Date after giving effect
to all
installments of principal due on or prior thereto (or due during
the month of
the Cut-Off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of
competent
jurisdiction in a proceeding under the Bankruptcy Code, except such
a reduction
constituting a Deficient Valuation or any reduction that results in
a permanent
forgiveness of principal.
Deficient Valuation: With respect to 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 constitutes a permanent forgiveness of principal,
which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any Certificate other than a Book-Entry
Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be:
"30 to 59
days" or "30 or more days" delinquent when a payment due on any
scheduled due
date remains unpaid as of the close of business on the last
business day
immediately prior to the next following monthly scheduled due date;
"60 to 89
days" or "60 or more days" delinquent when a payment due on any
scheduled due
date remains unpaid as of the close of business on the last
business day
immediately prior to the second following monthly scheduled due
date; and so on.
The determination as to whether a Mortgage Loan falls into these
categories is
made as of the close of business on the last business day of each
month. For
example, a Mortgage Loan with a payment due on July 1 that remained
unpaid as of
the close of business on July 31 would then be considered to be 30
to 59 days
delinquent. Delinquency information as of the Cut-off Date is
determined and
prepared as of the close of business on the last business day
immediately prior
to the Cut-off Date.
Depository: The Depository Trust Company, or any successor
Depository
hereafter named. The nominee of the initial Depository for purposes
of
registering those Certificates that are to be Book-Entry
Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation"
as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York and
a "clearing agency" registered pursuant to the provisions of
Section 17A of the
Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
9
Determination Date: As defined in the Series Supplement.
Discount Fraction: With respect to each Discount Mortgage Loan, the
fraction expressed as a percentage, the numerator of which is the
Discount Net
Mortgage Rate minus the Net Mortgage Rate (or the initial Net
Mortgage Rate with
respect to any Discount Mortgage Loans as to which the Mortgage
Rate is modified
pursuant to 3.07(a)) for such Mortgage Loan and the denominator of
which is the
Discount Net Mortgage Rate. The Discount Fraction with respect to
each Discount
Mortgage Loan is set forth as an exhibit attached to the Series
Supplement.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage
Rate (or
the initial Net Mortgage Rate) of less than the Discount Net
Mortgage Rate per
annum and any Mortgage Loan deemed to be a Discount Mortgage Loan
pursuant to
the definition of Qualified Substitute Mortgage Loan.
Discount Net Mortgage Rate: As defined in the Series Supplement.
Disqualified Organization: Any organization defined as a
"disqualified
organization" under Section 860E(e)(5) of the Code, and if not
otherwise
included, any of the following: (i) the United States, any State or
political
subdivision thereof, any possession of the United States, or any
agency or
instrumentality of any of the foregoing (other than an
instrumentality which is
a corporation if all of its activities are subject to tax and,
except for
Freddie Mac, a majority of its board of directors is not selected
by such
governmental unit), (ii) a foreign government, any international
organization,
or any agency or instrumentality of any of the foregoing, (iii) any
organization
(other than certain farmers' cooperatives described in Section 521
of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax
imposed by Section 511 of the Code on unrelated business taxable
income), (iv)
rural electric and telephone cooperatives described in Section
1381(a)(2)(C) of
the Code, (v) any "electing large partnership," as defined in
Section 775(a) of
the Code and (vi) any other Person so designated by the Trustee
based upon an
Opinion of Counsel that the holding of an Ownership Interest in a
Class R
Certificate by such Person may cause the Trust Fund or any Person
having an
Ownership Interest in any Class of Certificates (other than such
Person) to
incur a liability for any federal tax imposed under the Code that
would not
otherwise be imposed but for the Transfer of an Ownership Interest
in a Class R
Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in
Section 7701
of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month
immediately following the month of the initial issuance of the
Certificates or,
if such 25th day is not a Business Day, the Business Day
immediately following
such 25th day.
Due Date: With respect to any Distribution Date and any Mortgage
Loan, the
day during the related Due Period on which the Monthly Payment is
due.
Due Period: With respect to any Distribution Date, the one-month
period set
forth in the Series Supplement.
Eligible Account: An account that is any of the following: (i)
maintained
with a depository institution the debt obligations of which have
been rated by
each Rating Agency in its
10
highest rating available, or (ii) an account or accounts in a
depository
institution in which such accounts are fully insured to the limits
established
by the FDIC, provided that any deposits not so insured shall, to
the extent
acceptable to each Rating Agency, as evidenced in writing, be
maintained such
that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each
Rating Agency) the registered Holders of Certificates have a claim
with respect
to the funds in such account or a perfected first security interest
against any
collateral (which shall be limited to Permitted Investments)
securing such funds
that is superior to claims of any other depositors or creditors of
the
depository institution with which such account is maintained, or
(iii) in the
case of the Custodial Account, a trust account or accounts
maintained in the
corporate trust department of [
], or (iv) in the case of the
Certificate Account, a trust account or accounts maintained in the
corporate
trust division of the Trustee, or (v) an account or accounts of a
depository
institution acceptable to each Rating Agency (as evidenced in
writing by each
Rating Agency that use of any such account as the Custodial Account
or the
Certificate Account will not reduce the rating assigned to any
Class of
Certificates by such Rating Agency below the lower of the
then-current rating or
the rating assigned to such Certificates as of the Closing Date by
such Rating
Agency).
Event of Default: As defined in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof,
which
exceeds the then applicable Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which
exceeds the
then applicable Fraud Loss Amount.
Excess Special Hazard Loss: Any Special Hazard Loss, or portion
thereof,
that exceeds the then applicable Special Hazard Amount.
Excess Subordinate Principal Amount: With respect to any
Distribution Date
on which the aggregate Certificate Principal Balance of the Class
of Subordinate
Certificates then outstanding with the Lowest Priority is to be
reduced to zero
and on which Realized Losses are to be allocated to such class or
classes, the
excess, if any, of (i) the amount that would otherwise be
distributable in
respect of principal on such class or classes of Certificates on
such
Distribution Date over (ii) the excess, if any, of the aggregate
Certificate
Principal Balance of such class or classes of Certificates
immediately prior to
such Distribution Date over the aggregate amount of Realized Losses
to be
allocated to such classes of Certificates on such Distribution Date
as reduced
by any amount calculated pursuant to Section 4.02(b)(i)(E). With
respect to any
Mortgage Pool that is comprised of two or more Loan Groups, the
Excess
Subordinate Principal Amount will be allocated between each Loan
Group on a pro
rata basis in accordance with the amount of Realized Losses
attributable to each
Loan Group and allocated to the Certificates on such Distribution
Date.
Exchange Act: The Securities and Exchange Act of 1934, as amended.
Extraordinary Events: Any of the following conditions with respect
to a
Mortgaged Property (or, with respect to a Cooperative Loan, the
Cooperative
Apartment) or Mortgage Loan causing or resulting in a loss which
causes the
liquidation of such Mortgage Loan:
11
(a) losses that are of the type that would be covered by the
fidelity bond
and the errors and omissions insurance policy required to be
maintained pursuant
to Section 3.12(b) but are in excess of the coverage maintained
thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all
whether controlled or uncontrolled, and whether such loss be direct
or indirect,
proximate or remote or be in whole or in part caused by,
contributed to or
aggravated by a peril covered by the definition of the term
"Special Hazard
Loss";
(c) hostile or warlike action in time of peace or war, including
action in
hindering, combating or defending against an actual, impending or
expected
attack:
1.
by any government or sovereign power, de jure or de facto, or by
any authority maintaining or using military, naval or air forces;
or
2.
by military, naval or air forces; or
3.
by an agent of any such government, power, authority or forces;
(d) any weapon of war employing atomic fission or radioactive force
whether
in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped power
or action
taken by governmental authority in hindering, combating or
defending against
such an occurrence, seizure or destruction under quarantine or
customs
regulations, confiscation by order of any government or public
authority; or
risks of contraband or illegal transportation or trade.
Extraordinary Losses: Any loss incurred on a Mortgage Loan caused
by or
resulting from an Extraordinary Event.
Fannie Mae: Federal National Mortgage Association, a federally
chartered
and privately owned corporation organized and existing under the
Federal
National Mortgage Association Charter Act, or any successor
thereto.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant
to Section
9.01, which Final Distribution Date shall in no event be later than
the end of
the 90-day liquidation period described in Section 9.02.
Fitch: Fitch, Inc. or its successor in interest.
Form 10-K Certification: As defined in Section 4.03(e).
Foreclosure Profits: As to any Distribution Date or related
Determination
Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds,
Insurance Proceeds and REO Proceeds (net of all amounts
reimbursable therefrom
pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan
or REO
Property for which a Cash Liquidation or REO Disposition
12
occurred in the related Prepayment Period over the sum of the
unpaid principal
balance of such Mortgage Loan or REO Property (determined, in the
case of an REO
Disposition, in accordance with Section 3.14) plus accrued and
unpaid interest
at the Mortgage Rate on such unpaid principal balance from the Due
Date to which
interest was last paid by the Mortgagor to the first day of the
month following
the month in which such Cash Liquidation or REO Disposition
occurred.
Fraud Losses: Losses on Mortgage Loans as to which there was fraud
in the
origination of such Mortgage Loan.
Freddie Mac: Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Highest Priority: As of any date of determination, the Class of
Subordinate
Certificates then outstanding with a Certificate Principal Balance
greater than
zero, with the earliest priority for payments pursuant to Section
4.02(a), in
the following order: Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and
Class B-3 Certificates.
Independent: When used with respect to any specified Person, means
such a
Person who (i) is in fact independent of the Company, the Master
Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any
direct financial
interest or any material indirect financial interest in the
Company, the Master
Servicer or the Trustee or in an Affiliate thereof, and (iii) is
not connected
with the Company, the Master Servicer or the Trustee as an officer,
employee,
promoter, underwriter, trustee, partner, director or person
performing similar
functions.
Initial Certificate Principal Balance: With respect to each Class
of
Certificates, the Certificate Principal Balance of such Class of
Certificates as
of the Cut-off Date, as set forth in the Series Supplement.
Initial Monthly Payment Fund: An amount representing scheduled
principal
amortization and interest at the Net Mortgage Rate for the Due Date
in the first
Due Period commencing subsequent to the Cut-off Date for those
Mortgage Loans
for which the Trustee will not be entitled to receive such payment,
and as more
specifically defined in the Series Supplement.
Initial Notional Amount: With respect to any Class or Subclass of
Interest
Only Certificates, the amount initially used as the principal basis
for the
calculation of any interest payment amount, as more specifically
defined in the
Series Supplement.
Initial Subordinate Class Percentage: As defined in the Series
Supplement.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant
to any Primary Insurance Policy or any other related insurance
policy covering a
Mortgage Loan (excluding any Certificate Policy (as defined in the
Series
Supplement)), to the extent such proceeds are payable to the
mortgagee under the
Mortgage, any Subservicer, the Master Servicer or the Trustee and
are not
applied to the restoration of the related Mortgaged Property (or,
with respect
to a Cooperative Loan, the related Cooperative Apartment) or
released to the
Mortgagor
13
in accordance with the procedures that the Master Servicer would
follow in
servicing mortgage loans held for its own account.
Insurer: Any named insurer under any Primary Insurance Policy or
any
successor thereto or the named insurer in any replacement policy.
Interest Accrual Period: As defined in the Series Supplement.
Interest Only Certificates: A Class or Subclass of Certificates not
entitled to payments of principal, and designated as such in the
Series
Supplement. The Interest Only Certificates will have no Certificate
Principal
Balance.
Interim Certification: As defined in Section 2.02.
Junior Certificateholder: The Holder of not less than 95% of the
Percentage
Interests of the Junior Class of Certificates.
Junior Class of Certificates: The Class of Subordinate Certificates
outstanding as of the date of the repurchase of a Mortgage Loan
pursuant to
Section 4.07 herein that has the Lowest Priority.
Late Collections: With respect to any Mortgage Loan, all amounts
received
during any Due Period, whether as late payments of Monthly Payments
or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late
payments or collections of Monthly Payments due but delinquent for
a previous
Due Period and not previously recovered.
Liquidation Proceeds: Amounts (other than Insurance Proceeds)
received by
the Master Servicer in connection with the taking of an entire
Mortgaged
Property by exercise of the power of eminent domain or condemnation
or in
connection with the liquidation of a defaulted Mortgage Loan
through trustee's
sale, foreclosure sale or otherwise, other than REO Proceeds.
Loan Group: Any group of Mortgage Loans designated as a separate
loan group
in the Series Supplement. The Certificates relating to each Loan
Group will be
designated in the Series Supplement.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance
of the
related Mortgage Loan at the date of determination and the
denominator of which
is the Appraised Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and any Class of
Subordinate Certificates, any other Class of Subordinate
Certificates then
outstanding with a Certificate Principal Balance greater than zero,
with later
priority for payments pursuant to Section 4.02(a).
Lowest Priority: As of any date of determination, the Class of
Subordinate
Certificates then outstanding with the latest priority for payments
pursuant to
Section 4.02(a), in the following order: Class B-3, Class B-2,
Class B-1, Class
M-3, Class M-2 and Class M-1 Certificates.
14
Maturity Date: The latest possible maturity date, solely for
purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by which
the
Certificate Principal Balance of each Class of Certificates (other
than the
Interest Only Certificates which have no Certificate Principal
Balance) and each
Uncertificated REMIC Regular Interest would be reduced to zero, as
designated in
the Series Supplement.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with
MERS on the MERS(R) System.
MLCC: Merrill Lynch Credit Corporation, or its successor in
interest.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject
of a
Servicing Modification.
Modified Mortgage Rate: As to any Mortgage Loan that is the subject
of a
Servicing Modification, the Mortgage Rate minus the rate per annum
by which the
Mortgage Rate on such Mortgage Loan was reduced.
Modified Net Mortgage Rate: As to any Mortgage Loan that is the
subject of
a Servicing Modification, the Net Mortgage Rate minus the rate per
annum by
which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee
of such Mortgage Loan, solely as nominee for the originator of such
Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any
REO
Property) and any Due Date, the payment of principal and interest
due thereon in
accordance with the amortization schedule at the time applicable
thereto (after
adjustment, if any, for Curtailments and for Deficient Valuations
occurring
prior to such Due Date but before any adjustment to such
amortization schedule
by reason of any bankruptcy, other than a Deficient Valuation, or
similar
proceeding or any moratorium or similar waiver or grace period and
before any
Servicing Modification that constitutes a reduction of the interest
rate on such
Mortgage Loan).
Moody's: Moody's Investors Service, Inc., or its successor in
interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage
Loan
which is not a Cooperative Loan, the mortgage, deed of trust or
other comparable
instrument creating a first lien on an estate in fee simple or
leasehold
interest in real property securing a Mortgage Note.
15
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
the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the
Trustee pursuant to Section 2.01 as from time to time are held or
deemed to be
held as a part of the Trust Fund, the Mortgage Loans originally so
held being
identified in the initial Mortgage Loan Schedule, and Qualified
Substitute
Mortgage Loans held or deemed held as part of the Trust Fund
including, without
limitation, (i) with respect to each Cooperative Loan, the related
Mortgage
Note, Security Agreement, Assignment of Proprietary Lease,
Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights
appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a
Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and
all rights
appertaining thereto.
Mortgage Loan Schedule: As defined in the Series Supplement.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan,
together with any modification thereto.
Mortgage Pool: The pool of mortgage loans, including all Loan
Groups, if
any, consisting of the Mortgage Loans.
Mortgage Rate: As to any Mortgage Loan, the interest rate borne by
the
related Mortgage Note, or any modification thereto other than a
Servicing
Modification.
Mortgaged Property: The underlying real property securing a
Mortgage Loan
or, with respect to a Cooperative Loan, the related Cooperative
Lease and
Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, a per annum rate of
interest
equal to the Adjusted Mortgage Rate less the per annum rate at
which the
Servicing Fee is calculated.
Non-Discount Mortgage Loan: A Mortgage Loan that is not a Discount
Mortgage
Loan.
Non-Primary Residence Loans: The Mortgage Loans designated as
secured by
second or vacation residences, or by non-owner occupied residences,
on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States
Person.
Nonrecoverable Advance: Any Advance previously made or proposed to
be made
by the Master Servicer or Subservicer in respect of a Mortgage Loan
(other than
a Deleted Mortgage Loan) which, in the good faith judgment of the
Master
Servicer, will not, or, in the case of a proposed Advance, would
not, be
ultimately recoverable by the Master Servicer from related Late
Collections,
Insurance Proceeds, Liquidation Proceeds, REO Proceeds or amounts
reimbursable
to the Master Servicer pursuant to Section 4.02(a) hereof. To the
extent that
any Mortgagor is not obligated under the related Mortgage documents
to pay or
reimburse any
16
portion of any Servicing Advances that are outstanding with respect
to the
related Mortgage Loan as a result of a modification of such
Mortgage Loan by the
Master Servicer, which forgives amounts which the Master Servicer
or Subservicer
had previously advanced, and the Master Servicer determines that no
other source
of payment or reimbursement for such advances is available to it,
such Servicing
Advances shall be deemed to be Nonrecoverable Advances. The
determination by the
Master Servicer that it has made a Nonrecoverable Advance or that
any proposed
Advance would constitute a Nonrecoverable Advance, shall be
evidenced by an
Officers' Certificate delivered to the Company, the Trustee and any
Certificate
Insurer.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time
of
reference thereto, is not subject to a Subservicing Agreement.
Notional Amount: With respect to any Class or Subclass of Interest
Only
Certificates, an amount used as the principal basis for the
calculation of any
interest payment amount, as more specifically defined in the Series
Supplement.
Officers' Certificate: A certificate signed by the Chairman of the
Board,
the President or a Vice President or Assistant Vice President, or a
Director or
Managing Director, and by the Treasurer, the Secretary, or one of
the Assistant
Treasurers or Assistant Secretaries of the Company or the Master
Servicer, as
the case may be, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee
and the Master Servicer, who may be counsel for the Company or the
Master
Servicer, provided that any opinion of counsel (i) referred to in
the definition
of "Disqualified Organization" or (ii) relating to the
qualification of any
REMIC formed under the Series Supplement or compliance with the
REMIC Provisions
must, unless otherwise specified, be an opinion of Independent
counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including
an REO Property) which was not the subject of a Principal
Prepayment in Full,
Cash Liquidation or REO Disposition and which was not purchased,
deleted or
substituted for prior to such Due Date pursuant to Section 2.02,
2.03, 2.04 or
4.07.
Ownership Interest: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: As defined in the Series Supplement.
Paying Agent: The Trustee or any successor Paying Agent appointed
by the
Trustee.
Percentage Interest: With respect to any Certificate (other than a
Class R
Certificate), the undivided percentage ownership interest in the
related Class
evidenced by such Certificate, which percentage ownership interest
shall be
equal to the Initial Certificate Principal Balance thereof or
Initial Notional
Amount (in the case of any Interest Only Certificate) thereof
divided by the
aggregate Initial Certificate Principal Balance or the aggregate of
the Initial
Notional Amounts, as applicable, of all the Certificates of the
same Class. With
respect to a Class R
17
Certificate, the interest in distributions to be made with respect
to such Class
evidenced thereby, expressed as a percentage, as stated on the face
of each such
Certificate.
Permitted Investments: One or more of the following:
(i)
obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing
not more than one month from the date of acquisition thereof,
provided
that the unsecured obligations of the party agreeing to repurchase
such obligations are at the time rated by each Rating Agency in its
highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an
original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more
than
365 days or a remaining maturity of more than 30 days) denominated
in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any
state
thereof or of any domestic branch of a foreign depository
institution
or trust company; provided that the debt obligations of such
depository institution or trust company (or, if the only Rating
Agency
is Standard & Poor's, in the case of the principal depository
institution in a depository institution holding company, debt
obligations of the depository institution holding company) at the
date
of acquisition thereof have been rated by each Rating Agency in its
highest short-term rating available; and provided further that, if
the
only Rating Agency is Standard & Poor's and if the depository
or trust
company is a principal subsidiary of a bank holding company and the
debt obligations of such subsidiary are not separately rated, the
applicable rating shall be that of the bank holding company; and,
provided further that, if the original maturity of such short-term
obligations of a domestic branch of a foreign depository
institution
or trust company shall exceed 30 days, the short-term rating of
such
institution shall be A-1+ in the case of Standard & Poor's if
Standard
& Poor's is the Rating Agency;
(iv) commercial paper and demand notes (having original maturities
of not
more than 365 days) of any corporation incorporated under the laws
of
the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in its highest
short-term rating available; provided that such commercial paper
shall
have a remaining maturity of not more than 30 days;
(v)
a money market fund or a qualified investment fund rated by each
Rating Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to each
Rating
Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current
18
rating or the rating assigned to such Certificates as of the
Closing
Date by such Rating Agency, as evidenced in writing;
provided, however, no instrument shall be a Permitted Investment if
it
represents, either (1) the right to receive only interest payments
with respect
to the underlying debt instrument or (2) the right to receive both
principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest payments with respect to such instrument
provide a yield
to maturity greater than 120% of the yield to maturity at par of
such underlying
obligations. References herein to the highest rating available on
unsecured
long-term debt shall mean AAA in the case of Standard & Poor's
and Fitch and Aaa
in the case of Moody's, and references herein to the highest rating
available on
unsecured commercial paper and short-term debt obligations shall
mean A-1 in the
case of Standard & Poor's, P-1 in the case of Moody's and
either A-1 by Standard
& Poor's, P-1 by Moody's or F-1 by Fitch in the case of Fitch;
provided,
however, that any Permitted Investment that is a short-term debt
obligation
rated A-1 by Standard & Poor's must satisfy the following
additional conditions:
(i) the total amount of debt from A-1 issuers must be limited to
the investment
of monthly principal and interest payments (assuming fully
amortizing
collateral); (ii) the total amount of A-1 investments must not
represent more
than 20% of the aggregate outstanding Certificate Principal Balance
of the
Certificates and each investment must not mature beyond 30 days;
(iii)
investments in A-1 rated securities are not eligible for the
Reserve Fund; (iv)
the terms of the debt must have a predetermined fixed dollar amount
of principal
due at maturity that cannot vary; and (v) if the investments may be
liquidated
prior to their maturity or are being relied on to meet a certain
yield, interest
must be tied to a single interest rate index plus a single fixed
spread (if any)
and must move proportionately with that index.
Permitted Transferee: Any Transferee of a Class R Certificate,
other than a
Disqualified Organization or Non-United States Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Pledged Amount: With respect to any Pledged Asset Loan, the amount
of money
remitted to Combined Collateral LLC, at the direction of or for the
benefit of
the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged Assets
or such
other collateral, other than the related Mortgaged Property, set
forth in the
Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all money,
securities,
security entitlements, accounts, general intangibles, instruments,
documents,
certificates of deposit, commodities contracts and other investment
property and
other property of whatever kind or description pledged by Combined
Collateral
LLC as security in respect of any Realized Losses in connection
with such
Mortgage Loan up to the Pledged Amount for such Mortgage Loan, and
any related
collateral, or such other collateral as may be set forth in the
Series
Supplement.
19
Pledged Asset Mortgage Servicing Agreement: The Pledged Asset
Mortgage
Servicing Agreement, dated as of February 28, 1996 between MLCC and
the Master
Servicer.
Pooling and Servicing Agreement or Agreement: With respect to any
Series,
this Standard Terms together with the related Series Supplement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances of each Mortgage Loan.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum
rate equal
to the excess of (a) the Net Mortgage Rate of such Mortgage Loan
over (b) the
Discount Net Mortgage Rate (but not less than 0.00%) per annum.
Prepayment Distribution Trigger: With respect to any Distribution
Date and
any Class of Subordinate Certificates (other than the Class M-1
Certificates), a
test that shall be satisfied if the fraction (expressed as a
percentage) equal
to the sum of the Certificate Principal Balances of such Class and
each Class of
Subordinate Certificates with a Lower Priority than such Class
immediately prior
to such Distribution Date divided by the aggregate Stated Principal
Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such
Distribution Date is greater than or equal to the sum of the
related Initial
Subordinate Class Percentages of such Classes of Subordinate
Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that
was the
subject of (a) a Principal Prepayment in Full during the portion of
the related
Prepayment Period that falls during the prior calendar month, an
amount equal to
the excess of one month's interest at the Net Mortgage Rate (or
Modified Net
Mortgage Rate in the case of a Modified Mortgage Loan) on the
Stated Principal
Balance of such Mortgage Loan over the amount of interest (adjusted
to the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage
Loan)) paid by the Mortgagor for such month to the date of such
Principal
Prepayment in Full or (b) a Curtailment during the prior calendar
month, an
amount equal to one month's interest at the Net Mortgage Rate (or
Modified Net
Mortgage Rate in the case of a Modified Mortgage Loan) on the
amount of such
Curtailment.
Prepayment Period: As to any Distribution Date and Principal
Prepayment in
Full, the period commencing on the 16th day of the month prior to
the month
prior to the month in which that Distribution Date occurs and
ending on the 15th
day of the month in which such Distribution Date occurs.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section
2.03(b)(iv)
and (v).
Principal Only Certificates: A Class of Certificates not entitled
to
payments of interest, and more specifically designated as such in
the Series
Supplement.
Principal Prepayment: Any payment of principal or other recovery on
a
Mortgage Loan, including a recovery that takes the form of
Liquidation Proceeds
or Insurance Proceeds, which is
20
received in advance of its scheduled Due Date and is not
accompanied by an
amount as to interest representing scheduled interest on such
payment due on any
date or dates in any month or months subsequent to the month of
prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the
entire
principal balance of a Mortgage Loan that is made by the Mortgagor.
Program Guide: Collectively, the Client Guide and the Servicer
Guide for
Residential Funding's mortgage loan purchase and conduit servicing
program and
all supplements and amendments thereto published by Residential
Funding from
time to time.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to
Section 2.02,
2.03, 2.04 or 4.07, an amount equal to the sum of (i) 100% of the
Stated
Principal Balance thereof plus the principal portion of any related
unreimbursed
Advances and (ii) unpaid accrued interest at the Adjusted Mortgage
Rate (or
Modified Net Mortgage Rate plus the rate per annum at which the
Servicing Fee is
calculated in the case of a Modified Mortgage Loan) (or at the Net
Mortgage Rate
(or Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) in the
case of a purchase made by the Master Servicer) on the Stated
Principal Balance
thereof to the Due Date in the Due Period related to the
Distribution Date
occurring in the month following the month of purchase from the Due
Date to
which interest was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Company for a Deleted Mortgage Loan
which must, on
the date of such substitution, as confirmed in an Officers'
Certificate
delivered to the Trustee, with a copy to the Custodian,
(i)
have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding
principal balance, after such deduction), not in excess of the
Stated
Principal Balance of the Deleted Mortgage Loan (the amount of any
shortfall to be deposited by Residential Funding in the Custodial
Account in the month of substitution);
(ii) have a Mortgage Rate and a Net Mortgage Rate no lower than and
not
more than 1% per annum higher than the Mortgage Rate and Net
Mortgage
Rate, respectively, of the Deleted Mortgage Loan as of the date of
substitution;
(iii) have a Loan-to-Value Ratio at the time of substitution no
higher than
that of the Deleted Mortgage Loan at the time of substitution;
(iv) have a remaining term to stated maturity not greater than (and
not
more than one year less than) that of the Deleted Mortgage Loan;
(v)
comply with each representation and warranty set forth in Sections
2.03 and 2.04 hereof and Section 4 of the Assignment Agreement; and
21
(vi) have a Pool Strip Rate equal to or greater than that of the
Deleted
Mortgage Loan.
Notwithstanding any other provisions herein, (x) with respect to
any Qualified
Substitute Mortgage Loan substituted for a Deleted Mortgage Loan
which was a
Discount Mortgage Loan, such Qualified Substitute Mortgage Loan
shall be deemed
to be a Discount Mortgage Loan and to have a Discount Fraction
equal to the
Discount Fraction of the Deleted Mortgage Loan and (y) in the event
that the
"Pool Strip Rate" of any Qualified Substitute Mortgage Loan as
calculated
pursuant to the definition of "Pool Strip Rate" is greater than the
Pool Strip
Rate of the related Deleted Mortgage Loan
(i)
the Pool Strip Rate of such Qualified Substitute Mortgage Loan
shall
be equal to the Pool Strip Rate of the related Deleted Mortgage
Loan
for purposes of calculating the Pass-Through Rate on the Class A-V
Certificates and
(ii) the excess of the Pool Strip Rate on such Qualified Substitute
Mortgage Loan as calculated pursuant to the definition of "Pool
Strip
Rate" over the Pool Strip Rate on the related Deleted Mortgage Loan
shall be payable to the Class R Certificates pursuant to Section
4.02
hereof.
Rating Agency: Each of the statistical credit rating agencies
specified in
the Preliminary Statement of the Series Supplement. If any agency
or a successor
is no longer in existence, "Rating Agency" shall be such
statistical credit
rating agency, or other comparable Person, designated by the
Company, notice of
which designation shall be given to the Trustee and the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO
Property):
(a) as to which a Cash Liquidation or REO Disposition has occurred,
an
amount (not less than zero) equal to (i) the Stated Principal
Balance of the
Mortgage Loan (or REO Property) as of the date of Cash Liquidation
or REO
Disposition, plus (ii) interest (and REO Imputed Interest, if any)
at the Net
Mortgage Rate from the Due Date as to which interest was last paid
or advanced
to Certificateholders up to the Due Date in the Due Period related
to the
Distribution Date on which such Realized Loss will be allocated
pursuant to
Section 4.05 on the Stated Principal Balance of such Mortgage Loan
(or REO
Property) outstanding during each Due Period that such interest was
not paid or
advanced, minus (iii) the proceeds, if any, received during the
month in which
such Cash Liquidation (or REO Disposition) occurred, to the extent
applied as
recoveries of interest at the Net Mortgage Rate and to principal of
the Mortgage
Loan, net of the portion thereof reimbursable to the Master
Servicer or any
Subservicer with respect to related Advances, Servicing Advances or
other
expenses as to which the Master Servicer or Subservicer is entitled
to
reimbursement thereunder but which have not been previously
reimbursed,
(b) which is the subject of a Servicing Modification, (i) (1) the
amount by
which the interest portion of a Monthly Payment or the principal
balance of such
Mortgage Loan was reduced or (2) the sum of any other amounts owing
under the
Mortgage Loan that were forgiven and that constitute Servicing
Advances that are
reimbursable to the Master Servicer or a Subservicer, and (ii) any
such amount
with respect to a Monthly Payment that was or would have
22
been due in the month immediately following the month in which a
Principal
Prepayment or the Purchase Price of such Mortgage Loan is received
or is deemed
to have been received,
(c) which has become the subject of a Deficient Valuation, the
difference
between the principal balance of the Mortgage Loan outstanding
immediately prior
to such Deficient Valuation and the principal balance of the
Mortgage Loan as
reduced by the Deficient Valuation, or
(d) which has become the object of a Debt Service Reduction, the
amount of
such Debt Service Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt
Service
Reduction shall be deemed a Realized Loss hereunder so long as the
Master
Servicer has notified the Trustee in writing that the Master
Servicer is
diligently pursuing any remedies that may exist in connection with
the
representations and warranties made regarding the related Mortgage
Loan and
either (A) the related Mortgage Loan is not in default with regard
to payments
due thereunder or (B) delinquent payments of principal and interest
under the
related Mortgage Loan and any premiums on any applicable primary
hazard
insurance policy and any related escrow payments in respect of such
Mortgage
Loan are being advanced on a current basis by the Master Servicer
or a
Subservicer, in either case without giving effect to any Debt
Service Reduction.
To the extent the Master Servicer receives Subsequent Recoveries
with respect to
any Mortgage Loan, the amount of the Realized Loss with respect to
that Mortgage
Loan will be reduced to the extent such recoveries are applied to
reduce the
Certificate Principal Balance of any Class of Certificates on any
Distribution
Date.
Record Date: With respect to each Distribution Date, the close of
business
on the last Business Day of the month next preceding the month in
which the
related Distribution Date occurs.
Regular Certificate: Any of the Certificates other than a Class R
Certificate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. Sections 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 Commission in the adopting release (Asset-Backed Securities,
Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005))
or by the
staff of the Commission, or as may be provided by the Commission or
its staff
from time to time.
Relief Act: The Servicemembers Civil Relief Act or similar
legislation or
regulations as in effect from time to time.
Relief Act Shortfalls: Shortfalls in interest payable by a
Mortgagor that
are not collectible from the Mortgagor pursuant to the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
23
REMIC Administrator: Residential Funding Corporation. If
Residential
Funding Corporation is found by a court of competent jurisdiction
to no longer
be able to fulfill its obligations as REMIC Administrator under
this Agreement
the Master Servicer or Trustee acting as Master Servicer shall
appoint a
successor REMIC Administrator, subject to assumption of the REMIC
Administrator
obligations under this Agreement.
REMIC Provisions: Provisions of the federal income tax law relating
to real
estate mortgage investment conduits, which appear at Sections 860A
through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions,
and temporary
and final regulations (or, to the extent not inconsistent with such
temporary or
final regulations, proposed regulations) and published rulings,
notices and
announcements promulgated thereunder, as the foregoing may be in
effect from
time to time.
REO Acquisition: The acquisition by the Master Servicer on behalf
of the
Trustee for the benefit of the Certificateholders of any REO
Property pursuant
to Section 3.14.
REO Disposition: As to any REO Property, a determination by the
Master
Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds, REO
Proceeds and other payments and recoveries (including proceeds of a
final sale)
which the Master Servicer expects to be finally recoverable from
the sale or
other disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount
equivalent to interest (at the Net Mortgage Rate that would have
been applicable
to the related Mortgage Loan had it been outstanding) on the unpaid
principal
balance of the Mortgage Loan as of the date of acquisition thereof
for such
period.
REO Proceeds: Proceeds, net of expenses, received in respect of any
REO
Property (including, without limitation, proceeds from the rental
of the related
Mortgaged Property or, with respect to a Cooperative Loan, the
related
Cooperative Apartment) which proceeds are required to be deposited
into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer
through
foreclosure or deed in lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has
been
subject to an interest rate reduction, (ii) has been subject to a
term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized by
adding such
amount to the Stated Principal Balance of such Mortgage Loan;
provided, however,
that a Mortgage Loan modified in accordance with clause (i) above
for a
temporary period shall not be a Reportable Modified Mortgage Loan
if such
Mortgage Loan has not been delinquent in payments of principal and
interest for
six months since the date of such modification if that interest
rate reduction
is not made permanent thereafter.
Request for Release: A request for release, the forms of which are
attached
as Exhibit F hereto, or an electronic request in a form acceptable
to the
Custodian.
24
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy which is required to be maintained from time to time under
this
Agreement, the Program Guide or the related Subservicing Agreement
in respect of
such Mortgage Loan.
Required Surety Payment: With respect to any Additional Collateral
Loan
that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion
of the Realized Loss with respect to such Mortgage Loan and (ii)
the excess, if
any, of (a) the amount of Additional Collateral required at
origination with
respect to such Mortgage Loan over (b) the net proceeds realized by
the
Subservicer from the related Additional Collateral.
Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the
Company and
not in its capacity as Master Servicer, and any successor thereto.
Responsible Officer: When used with respect to the Trustee, any
officer of
the Corporate Trust Department of the Trustee, including any Senior
Vice
President, any Vice President, any Assistant Vice President, any
Assistant
Secretary, any Trust Officer or Assistant Trust Officer with
particular
responsibility for this transaction, or any other officer of the
Trustee
customarily performing functions similar to those performed by any
of the above
designated officers to whom, with respect to a particular matter,
such matter is
referred.
Retail Certificates: A Senior Certificate, if any, offered in
smaller
minimum denominations than other Senior Certificates, and
designated as such in
the Series Supplement.
Schedule of Discount Fractions: The schedule setting forth the
Discount
Fractions with respect to the Discount Mortgage Loans, attached as
an exhibit to
the Series Supplement.
Securitization Transaction: Any transaction involving a sale or
other
transfer of mortgage loans directly or indirectly to an issuing in
connection
with an issuance of publicly offered or privately placed, rated or
unrated
mortgage-backed securities.
Security Agreement: With respect to a Cooperative Loan, the
agreement
creating a security interest in favor of the originator in the
related
Cooperative Stock.
Seller: As to any Mortgage Loan, a Person, including any
Subservicer, that
executed a Seller's Agreement applicable to such Mortgage Loan.
Seller's Agreement: An agreement for the origination and sale of
Mortgage
Loans generally in the form of the Seller Contract referred to or
contained in
the Program Guide, or in such other form as has been approved by
the Master
Servicer and the Company, each containing representations and
warranties in
respect of one or more Mortgage Loans consistent in all material
respects with
those set forth in the Program Guide.
Senior Accelerated Distribution Percentage: With respect to any
Distribution Date occurring on or prior to the 60th Distribution
Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups,
any Loan
Group, 100%. With respect to any Distribution Date thereafter and
any such Loan
Group, if applicable, as follows:
25
(i)
for any Distribution Date after the 60th Distribution Date but on
or
prior to the 72nd Distribution Date, the related Senior Percentage
for
such Distribution Date plus 70% of the related Subordinate
Percentage
for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date but
on or
prior to the 84th Distribution Date, the related Senior Percentage
for
such Distribution Date plus 60% of the related Subordinate
Percentage
for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date
but on or
prior to the 96th Distribution Date, the related Senior Percentage
for
such Distribution Date plus 40% of the related Subordinate
Percentage
for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date but
on or
prior to the 108th Distribution Date, the related Senior Percentage
for such Distribution Date plus 20% of the related Subordinate
Percentage for such Distribution Date; and
(v)
for any Distribution Date thereafter, the Senior Percentage for
such
Distribution Date;
provided, however,
(i)
that any scheduled reduction to the Senior Accelerated Distribution
Percentage described above shall not occur as of any Distribution
Date
unless either
(a)(1)(X) the outstanding principal balance of the Mortgage Loans
delinquent 60 days or more averaged over the last six months, as a
percentage of the aggregate outstanding Certificate Principal
Balance of
the Subordinate Certificates, is less than 50% or (Y) the
outstanding
principal balance of Mortgage Loans delinquent 60 days or more
averaged
over the last six months, as a percentage of the aggregate
outstanding
principal balance of all Mortgage Loans averaged over the last six
months,
does not exceed 2% and (2) Realized Losses on the Mortgage Loans to
date
for such Distribution Date if occurring during the sixth, seventh,
eighth,
ninth or tenth year (or any year thereafter) after the Closing Date
are
less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of
the
Initial Certificate Principal Balances of the Subordinate
Certificates or
(b)(1) the outstanding principal balance of Mortgage Loans
delinquent
60 days or more averaged over the last six months, as a percentage
of the
aggregate outstanding principal balance of all Mortgage Loans
averaged over
the last six months, does not exceed 4% and (2) Realized Losses on
the
Mortgage Loans to date for such Distribution Date, if occurring
during the
sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after
the Closing Date are less than 10%, 15%, 20%, 25% or 30%,
respectively, of
the sum of the Initial Certificate Principal Balances of the
Subordinate
Certificates, and
(ii) that for any Distribution Date on which the Senior Percentage
is
greater than the Percentage as of the Closing Date, the Senior
Accelerated Distribution Percentage for such Distribution Date
shall
be 100%, or, if the Mortgage Pool is comprised of
26
two or more Loan Groups, for any Distribution Date on which the
weighted average of the Senior Percentages for each Loan Group,
weighted on the basis of the Stated Principal Balances of the
Mortgage
Loans in the related Loan Group, exceeds the weighted average of
the
initial Senior Percentages (calculated on such basis) for each Loan
Group, each of the Senior Accelerated Distribution Percentages for
such Distribution Date will equal 100%.
Notwithstanding the foregoing, upon the reduction of the
Certificate Principal
Balances of the related Senior Certificates (other than the Class
A-P
Certificates, if any) to zero, the related Senior Accelerated
Distribution
Percentage shall thereafter be 0%.
Senior Certificate: As defined in the Series Supplement.
Senior Percentage: As defined in the Series Supplement.
Senior Support Certificate: A Senior Certificate that provides
additional
credit enhancement to certain other classes of Senior Certificates
and
designated as such in the Preliminary Statement of the Series
Supplement.
Series: All of the Certificates issued pursuant to a Pooling and
Servicing
Agreement and bearing the same series designation.
Series Supplement: The agreement into which this Standard Terms is
incorporated and pursuant to which, together with this Standard
Terms, a Series
of Certificates is issued.
Servicing Accounts: The account or accounts created and maintained
pursuant
to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of
pocket"
costs and expenses incurred in connection with a default,
delinquency or other
unanticipated event by the Master Servicer or a Subservicer in the
performance
of its servicing obligations, including, but not limited to, the
cost of (i) the
preservation, restoration and protection of a Mortgaged Property
or, with
respect to a Cooperative Loan, the related Cooperative Apartment,
(ii) any
enforcement or judicial proceedings, including foreclosures,
including any
expenses incurred in relation to any such proceedings that result
from the
Mortgage Loan being registered on the MERS System, (iii) the
management and
liquidation of any REO Property, (iv) any mitigation procedures
implemented in
accordance with Section 3.07, and (v) compliance with the
obligations under
Sections 3.01, 3.08, 3.12(a) and 3.14, including, if the Master
Servicer or any
Affiliate of the Master Servicer provides services such as
appraisals and
brokerage services that are customarily provided by Persons other
than servicers
of mortgage loans, reasonable compensation for such services.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to any Mortgage Loan and Distribution
Date, the
fee payable monthly to the Master Servicer in respect of master
servicing
compensation that accrues at an annual rate designated on the
Mortgage Loan
Schedule as the "MSTR SERV FEE" for such
27
Mortgage Loan, as may be adjusted with respect to successor Master
Servicers as
provided in Section 7.02.
Servicing Modification: Any reduction of the interest rate on or
the
outstanding principal balance of a Mortgage Loan, any extension of
the final
maturity date of a Mortgage Loan, and any increase to the
outstanding principal
balance of a Mortgage Loan by adding to the Stated Principal
Balance unpaid
principal and interest and other amounts owing under the Mortgage
Loan, in each
case pursuant to a modification of a Mortgage Loan that is in
default, or for
which, in the judgment of the Master Servicer, default is
reasonably
foreseeable, in accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in,
or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and specimen signature appear on a list of servicing officers
furnished to
the Trustee by the Master Servicer, as such list may from time to
time be
amended.
Special Hazard Loss: Any Realized Loss not in excess of the cost of
the
lesser of repair or replacement of a Mortgaged Property (or, with
respect to a
Cooperative Loan, the related Cooperative Apartment) suffered by
such Mortgaged
Property (or Cooperative Apartment) on account of direct physical
loss,
exclusive of (i) any loss of a type covered by a hazard policy or a
flood
insurance policy required to be maintained in respect of such
Mortgaged Property
pursuant to Section 3.12(a), except to the extent of the portion of
such loss
not covered as a result of any coinsurance provision and (ii) any
Extraordinary
Loss.
Standard & Poor's: Standard & Poor's, a division of The
McGraw-Hill
Companies, Inc., or its successor in interest.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO
Property, at any given time, (i) the sum of (a) the Cut-off Date
Principal
Balance of the Mortgage Loan plus (b) any amount by which the
Stated Principal
Balance of the Mortgage Loan is increased pursuant to a Servicing
Modification,
minus (ii) the sum of (a) the principal portion of the Monthly
Payments due with
respect to such Mortgage Loan or REO Property during each Due
Period ending
prior to the most recent Distribution Date which were received or
with respect
to which an Advance was made, and (b) all Principal Prepayments
with respect to
such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation
Proceeds and REO Proceeds, to the extent applied by the Master
Servicer as
recoveries of principal in accordance with Section 3.14 with
respect to such
Mortgage Loan or REO Property, in each case which were distributed
pursuant to
Section 4.02 on any previous Distribution Date, and (c) any
Realized Loss
allocated to Certificateholders with respect thereto for any
previous
Distribution Date.
Subclass: With respect to the Class A-V Certificates, any Subclass
thereof
issued pursuant to Section 5.01(c). Any such Subclass will
represent the
Uncertificated Class A-V REMIC Regular Interest or Interests
specified by the
initial Holder of the Class A-V Certificates pursuant to Section
5.01(c).
28
Subordinate Certificate: Any one of the Class M Certificates or
Class B
Certificates, executed by the Trustee and authenticated by the
Certificate
Registrar substantially in the form annexed hereto as Exhibit B and
Exhibit C,
respectively.
Subordinate Class Percentage: With respect to any Distribution Date
and any
Class of Subordinate Certificates, a fraction, expressed as a
percentage, the
numerator of which is the aggregate Certificate Principal Balance
of such Class
of Subordinate Certificates immediately prior to such date and the
denominator
of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans
(or related REO Properties) (other than the related Discount
Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution
Date.
Subordinate Percentage: As of any Distribution Date and, with
respect to
any Mortgage Pool comprised of two or more Loan Groups, any Loan
Group, 100%
minus the related Senior Percentage as of such Distribution Date.
Subsequent Recoveries: As of any Distribution Date, amounts
received by the
Master Servicer (net of any related expenses permitted to be
reimbursed pursuant
to Section 3.10) or surplus amounts held by the Master Servicer to
cover
estimated expenses (including, but not limited to, recoveries in
respect of the
representations and warranties made by the related Seller pursuant
to the
applicable Seller's Agreement and assigned to the Trustee pursuant
to Section
2.04) specifically related to a Mortgage Loan that was the subject
of a Cash
Liquidation or an REO Disposition prior to the related Prepayment
Period that
resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference
thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered
into a
Subservicing Agreement and who generally satisfied the requirements
set forth in
the Program Guide in respect of the qualification of a Subservicer
as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and
interest
on a Mortgage Loan which is advanced by the related Subservicer
(net of its
Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance
with Section 3.08.
Subservicing Agreement: The written contract between the Master
Servicer
and any Subservicer relating to servicing and administration of
certain Mortgage
Loans as provided in Section 3.02, generally in the form of the
servicer
contract referred to or contained in the Program Guide or in such
other form as
has been approved by the Master Servicer and the Company. With
respect to
Additional Collateral Loans subserviced by MLCC, the Subservicing
Agreement
shall also include the Addendum and Assignment Agreement and the
Pledged Asset
Mortgage Servicing Agreement. With respect to any Pledged Asset
Loan subserviced
by GMAC Mortgage Corporation, the Addendum and Assignment
Agreement, dated as of
November 24, 1998, between the Master Servicer and GMAC Mortgage
Corporation, as
such agreement may be amended from time to time.
29
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly
to the
related Subservicer (or, in the case of a Nonsubserviced Mortgage
Loan, to the
Master Servicer) in respect of subservicing and other compensation
that accrues
at an annual rate equal to the excess of the Mortgage Rate borne by
the related
Mortgage Note over the rate per annum designated on the Mortgage
Loan Schedule
as the "CURR NET" for such Mortgage Loan.
Surety: Ambac, or its successors in interest, or such other surety
as may
be identified in the Series Supplement.
Surety Bond: The Limited Purpose Surety Bond (Policy No. AB0039BE),
dated
February 28, 1996 in respect to Mortgage Loans originated by MLCC,
or the Surety
Bond (Policy No. AB0240BE), dated March 17, 1999 in respect to
Mortgage Loans
originated by Novus Financial Corporation, in each case issued by
Ambac for the
benefit of certain beneficiaries, including the Trustee for the
benefit of the
Holders of the Certificates, but only to the extent that such
Surety Bond covers
any Additional Collateral Loans, or such other Surety Bond as may
be identified
in the Series Supplement.
Tax Returns: The federal income tax return on Internal Revenue
Service Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders
of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to
be filed on
behalf of any REMIC formed under the Series Supplement and under
the REMIC
Provisions, together with any and all other information, reports or
returns that
may be required to be furnished to the Certificateholders or filed
with the
Internal Revenue Service or any other governmental taxing authority
under any
applicable provisions of federal, state or local tax laws.
Transaction Party: As defined in Section 12.02(a).
Transfer: Any direct or indirect transfer, sale, pledge,
hypothecation or
other form of assignment of any Ownership Interest in a
Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest
in a Certificate.
Transferor: Any Person who is disposing by Transfer of any
Ownership
Interest in a Certificate.
Trust Fund: The segregated pool of assets consisting of:
(i)
the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all payments on and collections in respect of the Mortgage
Loans due
after the Cut-off Date (other than Monthly Payments due in the
month
of the Cut-Off Date) as shall be on deposit in the Custodial
Account
or in the Certificate Account and identified as belonging to the
Trust
Fund, including the proceeds from the liquidation of Additional
Collateral for any Additional Collateral Loan or Pledged Assets for
any Pledged Asset Loan, but not including amounts on deposit in the
Initial Monthly Payment Fund,
30
(iii) property that secured a Mortgage Loan and that has been
acquired for
the benefit of the Certificateholders by foreclosure or deed in
lieu
of foreclosure,
(iv) the hazard insurance policies and Primary Insurance Policies,
if any,
the Pledged Assets with respect to each Pledged Asset Loan, and the
interest in the Surety Bond transferred to the Trustee pursuant to
Section 2.01,
(v)
the Initial Monthly Payment Fund, and
(vi) all proceeds of clauses (i) through (v) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Underwriter: As defined in the Series Supplement.
Uninsured Cause: Any cause of damage to property subject to a
Mortgage such
that the complete restoration of such property is not fully
reimbursable by the
hazard insurance policies.
United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in,
or under the
laws of, the United States, provided that, for purposes solely of
the
restrictions on the transfer of residual interests, no partnership
or other
entity treated as a partnership for United States federal income
tax purposes
shall be treated as a United States Person unless all persons that
own an
interest in such partnership either directly or through any entity
that is not a
corporation for United States federal income tax purposes are
required by the
applicable operating agreement to be United States Persons, any
state thereof,
or the District of Columbia (except in the case of a partnership,
to the extent
provided in Treasury regulations) or any political subdivision
thereof, or an
estate that is described in Section 7701(a)(30)(D) of the Code, or
a trust that
is described in Section 7701(a)(30)(E) of the Code.
Voting Rights: The portion of the voting rights of all of the
Certificates
which is allocated to any Certificate, and more specifically
designated in
Article XI of the Series Supplement.
Section 1.02 Use of Words and Phrases.
"Herein," "hereby," "hereunder," 'hereof," "hereinbefore,"
"hereinafter"
and other equivalent words refer to the Pooling and Servicing
Agreement as a
whole. All references herein to Articles, Sections or Subsections
shall mean the
corresponding Articles, Sections and Subsections in the Pooling and
Servicing
Agreement. The definition set forth herein include both the
singular and the
plural.
31
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery
hereof, does
hereby assign to the Trustee without recourse all the right, title
and interest
of the Company in and to the Mortgage Loans, including all interest
and
principal received on or with respect to the Mortgage Loans after
the Cut-off
Date (other than payments of principal and interest due on the
Mortgage Loans in
the month of the Cut-off Date). In connection with such transfer
and assignment,
the Company does hereby deliver to the Trustee the Certificate
Policy (as
defined in the Series Supplement), if any. The Company, the Master
Servicer and
the Trustee agree that it is not intended that any mortgage loan be
included in
the Trust that is (i) a "High-Cost Home Loan" as defined in the New
Jersey Home
Ownership Act effective November 27, 2003, (ii) a "High-Cost Home
Loan" as
defined in the New Mexico Home Loan Protection Act effective
January 1, 2004 or
(iii) a "High Cost Home Mortgage Loan" as defined in the
Massachusetts Predatory
Home Practices Act effective November 7, 2004.
(b) In connection with such assignment, except as set forth in
Section
2.01(c) and subject to Section 2.01(d) below, the Company does
hereby deliver
to, and deposit with, the Trustee, or to and with one or more
Custodians, as the
duly appointed agent or agents of the Trustee for such purpose, the
following
documents or instruments (or copies thereof as permitted by this
Section) (I)
with respect to each Mortgage Loan so assigned (other than a
Cooperative Loan):
(i) The original Mortgage Note, endorsed without recourse to the
order
of the Trustee and showing an unbroken chain of endorsements from
the
originator thereof to the Person endorsing it to the Trustee, or
with
respect to any Destroyed Mortgage Note, an original lost note
affidavit
from the related Seller or Residential Funding stating that the
original
Mortgage Note was lost, misplaced or destroyed, together with a
copy of the
related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a
MOM Loan
if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated
thereon or a copy of the Mortgage with evidence of recording
indicated
thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R) System,
an
original Assignment of the Mortgage to the Trustee with evidence of
recording indicated thereon or a copy of such assignment with
evidence of
recording indicated thereon;
(iv) The original recorded assignment or assignments of the
Mortgage
showing an unbroken chain of title from the originator thereof to
the
Person assigning it to the Trustee (or to MERS, if the Mortgage
Loan is
registered on the MERS(R) System and noting the presence of a MIN)
with
evidence of recordation noted thereon or attached
32
thereto, or a copy of such assignment or assignments of the
Mortgage with
evidence of recording indicated thereon; and
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan or
a copy
of each modification, assumption agreement or preferred loan
agreement.
and (II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the
order
of the Trustee and showing an unbroken chain of endorsements from
the
originator thereof to the Person endorsing it to the Trustee, or
with
respect to any Destroyed Mortgage Note, an original lost note
affidavit
from the related Seller or Residential Funding stating that the
original
Mortgage Note was lost, misplaced or destroyed, together with a
copy of the
related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from
such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative
Loan,
together with an undated stock power (or other similar instrument)
executed
in blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative
Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such
Cooperative Loan
as secured party, each with evidence of recording thereof,
evidencing the
interest of the originator under the Security Agreement and the
Assignment
of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest
referenced in clause (vi) above showing an unbroken chain of title
from the
originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security
Agreement and
the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in
the
Security Agreement, Assignment of Proprietary Lease and the
recognition
agreement referenced in clause (iv) above, showing an unbroken
chain of
title from the originator to the Trustee;
(ix) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Cooperative
Loan; and
33
(x) A duly completed UCC-1 financing statement showing the Master
Servicer as debtor, the Company as secured party and the Trustee as
assignee and a duly completed UCC-1 financing statement showing the
Company
as debtor and the Trustee as secured party, each in a form
sufficient for
filing, evidencing the interest of such debtors in the Cooperative
Loans.
(c) The Company may, in lieu of delivering the original of the
documents
set forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and
Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as
permitted by
Section 2.01(b)) to the Trustee or the Custodian or Custodians,
deliver such
documents to the Master Servicer, and the Master Servicer shall
hold such
documents in trust for the use and benefit of all present and
future
Certificateholders until such time as is set forth in the next
sentence. Within
thirty Business Days following the earlier of (i) the receipt of
the original of
all of the documents or instruments set forth in Section
2.01(b)(I)(ii), (iii),
(iv) and (v) and Section (b)(II)(ii), (iv), (vii), (ix) and (x) (or
copies
thereof as permitted by such Section) for any Mortgage Loan and
(ii) a written
request by the Trustee to deliver those documents with respect to
any or all of
the Mortgage Loans then being held by the Master Servicer, the
Master Servicer
shall deliver a complete set of such documents to the Trustee or
the Custodian
or Custodians that are the duly appointed agent or agents of the
Trustee.
(d) Notwithstanding the provisions of Section 2.01(c), in
connection with
any Mortgage Loan, if the Company cannot deliver the original of
the Mortgage,
any assignment, modification, assumption agreement or preferred
loan agreement
(or copy thereof as permitted by Section 2.01(b)) with evidence of
recording
thereon concurrently with the execution and delivery of this
Agreement because
of (i) a delay caused by the public recording office where such
Mortgage,
assignment, modification, assumption agreement or preferred loan
agreement as
the case may be, has been delivered for recordation, or (ii) a
delay in the
receipt of certain information necessary to prepare the related
assignments, the
Company shall deliver or cause to be delivered to the Trustee or
the respective
Custodian a copy of such Mortgage, assignment, modification,
assumption
agreement or preferred loan agreement.
The Company shall promptly cause to be recorded in the appropriate
public
office for real property records the Assignment referred to in
clause (I)(iii)
of Section 2.01(b), except (a) in states where, in the opinion of
counsel
acceptable to the Master Servicer, such recording is not required
to protect the
Trustee's interests in the Mortgage Loan against the claim of any
subsequent
transferee or any successor to or creditor of the Company or the
originator of
such Mortgage Loan or (b) if MERS is identified on the Mortgage or
on a properly
recorded assignment of the Mortgage as the mortgagee of record
solely as nominee
for the Seller and its successors and assigns, and shall promptly
cause to be
filed the Form UCC-3 assignment and UCC-1 financing statement
referred to in
clause (II)(vii) and (x), respectively, of Section 2.01(b). If any
Assignment,
Form UCC-3 or Form UCC-1, as applicable, is lost or returned
unrecorded to the
Company because of any defect therein, the Company shall prepare a
substitute
Assignment, Form UCC-3 or Form UCC-1, as applicable, or cure such
defect, as the
case may be, and cause such Assignment to be recorded in accordance
with this
paragraph. The Company shall promptly deliver or cause to be
delivered to the
Trustee or the respective Custodian such Mortgage or Assignment or
Form UCC-3 or
Form UCC-1, as applicable, (or copy thereof as permitted by Section
2.01(b))
with evidence of recording indicated thereon at the time specified
in Section
2.01(c). In connection with its servicing of Cooperative Loans, the
Master
Servicer will use its
34
best efforts to file timely continuation statements with regard to
each
financing statement and assignment relating to Cooperative Loans as
to which the
related Cooperative Apartment is located outside of the State of
New York.
If the Company delivers to the Trustee or Custodian any Mortgage
Note or
Assignment of Mortgage in blank, the Company shall, or shall cause
the Custodian
to, complete the endorsement of the Mortgage Note and the
Assignment of Mortgage
in the name of the Trustee in conjunction with the Interim
Certification issued
by the Custodian, as contemplated by Section 2.02.
Any of the items set forth in Sections 2.01(b)(I)(ii), (iii), (iv)
and (v)
and (II)(vi) and (vii) and that may be delivered as a copy rather
than the
original may be delivered to the Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan registered
on the
MERS(R) System, the Company further agrees that it will cause, at
the Company's
own expense, within 30 Business Days after the Closing Date, the
MERS(R) System
to indicate that such Mortgage Loans have been assigned by the
Company to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of
Mortgage Loans
which are repurchased in accordance with this Agreement) in such
computer files
(a) the code in the field which identifies the specific Trustee and
(b) the code
in the field "Pool Field" which identifies the series of the
Certificates issued
in connection with such Mortgage Loans. The Company further agrees
that it will
not, and will not permit the Master Servicer to, and the Master
Servicer agrees
that it will not, alter the codes referenced in this paragraph with
respect to
any Mortgage Loan during the term of this Agreement unless and
until such
Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
(e) Residential Funding hereby assigns to the Trustee its security
interest
in and to any Additional Collateral or Pledged Assets, its right to
receive
amounts due or to become due in respect of any Additional
Collateral or Pledged
Assets pursuant to the related Subservicing Agreement and its
rights as
beneficiary under the Surety Bond in respect of any Additional
Collateral Loans.
With respect to any Additional Collateral Loan or Pledged Asset
Loan,
Residential Funding shall cause to be filed in the appropriate
recording office
a UCC-3 statement giving notice of the assignment of the related
security
interest to the Trust Fund and shall thereafter cause the timely
filing of all
necessary continuation statements with regard to such financing
statements.
(f) It is intended that the conveyance by the Company to the
Trustee of the
Mortgage Loans as provided for in this Section 2.01 be and the
Uncertificated
REMIC Regular Interests, if any (as provided for in Section 2.06),
be construed
as a sale by the Company to the Trustee of the Mortgage Loans and
any
Uncertificated REMIC Regular Interests for the benefit of the
Certificateholders. Further, it is not intended that such
conveyance be deemed
to be a pledge of the Mortgage Loans and any Uncertificated REMIC
Regular
Interests by the Company to the Trustee to secure a debt or other
obligation of
the Company. However, if the Mortgage Loans and any Uncertificated
REMIC Regular
Interests are held to be property of the Company or of Residential
Funding, or
if for any reason this Agreement is held or deemed to create a
security interest
in the Mortgage Loans and any Uncertificated REMIC Regular
Interests, then it is
35
intended that (a) this Agreement shall be a security agreement
within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code
and the
Uniform Commercial Code of any other applicable jurisdiction; (b)
the conveyance
provided for in Section 2.01 shall be deemed to be, and hereby is,
(1) a grant
by the Company to the Trustee of a security interest in all of the
Company's
right (including the power to convey title thereto), title and
interest, whether
now owned or hereafter acquired, in and to any and all general
intangibles,
payment intangibles, accounts, chattel paper, instruments,
documents, money,
deposit accounts, certificates of deposit, goods, letters of
credit, advices of
credit and investment property and other property of whatever kind
or
description now existing or hereafter acquired consisting of,
arising from or
relating to any of the following: (A) the Mortgage Loans, including
(i) with
respect to each Cooperative Loan, the related Mortgage Note,
Security Agreement,
Assignment of Proprietary Lease, Cooperative Stock Certificate and
Cooperative
Lease, (ii) with respect to each Mortgage Loan other than a
Cooperative Loan,
the related Mortgage Note and Mortgage, and (iii) any insurance
policies and all
other documents in the related Mortgage File, (B) all amounts
payable pursuant
to the Mortgage Loans in accordance with the terms thereof, (C) any
Uncertificated REMIC Regular Interests and (D) all proceeds of the
conversion,
voluntary or involuntary, of the foregoing into cash, instruments,
securities or
other property, including without limitation all amounts from time
to time held
or invested in the Certificate Account or the Custodial Account,
whether in the
form of cash, instruments, securities or other property and (2) an
assignment by
the Company to the Trustee of any security interest in any and all
of
Residential Funding's right (including the power to convey title
thereto), title
and interest, whether now owned or hereafter acquired, in and to
the property
described in the foregoing clauses (1)(A), (B), (C) and (D) granted
by
Residential Funding to the Company pursuant to the Assignment
Agreement; (c) the
possession by the Trustee, the Custodian or any other agent of the
Trustee of
Mortgage Notes or such other items of property as constitute
instruments, money,
payment intangibles, negotiable documents, goods, deposit accounts,
letters of
credit, advices of credit, investment property, certificated
securities or
chattel paper shall be deemed to be "possession by the secured
party," or
possession by a purchaser or a person designated by such secured
party, for
purposes of perfecting the security interest pursuant to the
Minnesota Uniform
Commercial Code and the Uniform Commercial Code of any other
applicable
jurisdiction as in effect (including, without limitation, Sections
8-106, 9-313
and 9-106 thereof); and (d) notifications to persons holding such
property, and
acknowledgments, receipts or confirmations from persons holding
such property,
shall be deemed notifications to, or acknowledgments, receipts or
confirmations
from, securities intermediaries, bailees or agents of, or persons
holding for
(as applicable) the Trustee for the purpose of perfecting such
security interest
under applicable law.
The Company and, at the Company's direction, Residential Funding
and the
Trustee shall, to the extent consistent with this Agreement, take
such
reasonable actions as may be necessary to ensure that, if this
Agreement were
determined to create a security interest in the Mortgage Loans, any
Uncertificated REMIC Regular Interests and the other property
described above,
such security interest would be determined to be a perfected
security interest
of first priority under applicable law and will be maintained as
such throughout
the term of this Agreement. Without limiting the generality of the
foregoing,
the Company shall prepare and deliver to the Trustee not less than
15 days prior
to any filing date and, the Trustee shall forward for filing, or
shall cause to
be forwarded for filing, at the expense of the Company, all filings
necessary to
maintain the effectiveness of any original filings necessary under
the Uniform
Commercial Code as in effect in any jurisdiction to perfect the
Trustee's
security interest in or lien on the Mortgage Loans and
36
any Uncertificated REMIC Regular Interests, as evidenced by an
Officers'
Certificate of the Company, including without limitation (x)
continuation
statements, and (y) such other statements as may be occasioned by
(1) any change
of name of Residential Funding, the Company or the Trustee (such
preparation and
filing shall be at the expense of the Trustee, if occasioned by a
change in the
Trustee's name), (2) any change of location of the place of
business or the
chief executive office of Residential Funding or the Company, (3)
any transfer
of any interest of Residential Funding or the Company in any
Mortgage Loan or
(4) any transfer of any interest of Residential Funding or the
Company in any
Uncertificated REMIC Regular Interest.
(g) The Master Servicer hereby acknowledges the receipt by it of
the
Initial Monthly Payment Fund. The Master Servicer shall hold such
Initial
Monthly Payment Fund in the Custodial Account and shall include
such Initial
Monthly Payment Fund in the Available Distribution Amount for the
initial
Distribution Date. Notwithstanding anything herein to the contrary,
the Initial
Monthly Payment Fund shall not be an asset of any REMIC. To the
extent that the
Initial Monthly Payment Fund constitutes a reserve fund for federal
income tax
purposes, (1) it shall be an outside reserve fund and not an asset
of any REMIC,
(2) it shall be owned by the Seller and (3) amounts transferred by
any REMIC to
the Initial Monthly Payment Fund shall be treated as transferred to
the Seller
or any successor, all within the meaning of Section 1.860G-2(h) of
the Treasury
Regulations.
(h) The Company agrees that the sale of each Pledged Asset Loan
pursuant to
this Agreement will also constitute the assignment, sale,
setting-over, transfer
and conveyance to the Trustee, without recourse (but subject to the
Company's
covenants, representations and warranties specifically provided
herein), of all
of the Company's obligations and all of the Company's right, title
and interest
in, to and under, whether now existing or hereafter acquired as
owner of the
Mortgage Loan with respect to all money, securities, security
entitlements,
accounts, general intangibles, instruments, documents, certificates
of deposit,
commodities contracts, and other investment property and other
property of
whatever kind or description consisting of, arising from or related
to (i) the
Assigned Contracts, (ii) all rights, powers and remedies of the
Company as owner
of such Mortgage Loan under or in connection with the Assigned
Contracts,
whether arising under the terms of such Assigned Contracts, by
statute, at law
or in equity, or otherwise arising out of any default by the
Mortgagor under or
in connection with the Assigned Contracts, including all rights to
exercise any
election or option or to make any decision or determination or to
give or
receive any notice, consent, approval or waiver thereunder, (iii)
all security
interests in and lien of the Company as owner of such Mortgage Loan
in the
Pledged Amounts and all money, securities, security entitlements,
accounts,
general intangibles, instruments, documents, certificates of
deposit,
commodities contracts, and other investment property and other
property of
whatever kind or description and all cash and non-cash proceeds of
the sale,
exchange, or redemption of, and all stock or conversion rights,
rights to
subscribe, liquidation dividends or preferences, stock dividends,
rights to
interest, dividends, earnings, income, rents, issues, profits,
interest payments
or other distributions of cash or other property that is credited
to the
Custodial Account, (iv) all documents, books and records concerning
the
foregoing (including all computer programs, tapes, disks and
related items
containing any such information) and (v) all insurance proceeds
(including
proceeds from the Federal Deposit Insurance Corporation or the
Securities
Investor Protection Corporation or any other insurance company) of
any of the
foregoing or replacements thereof or substitutions therefor,
proceeds of
proceeds and the conversion, voluntary or involuntary, of any
thereof. The
37
foregoing transfer, sale, assignment and conveyance does not
constitute and is
not intended to result in the creation, or an assumption by the
Trustee, of any
obligation of the Company, or any other person in connection with
the Pledged
Assets or under any agreement or instrument relating thereto,
including any
obligation to the Mortgagor, other than as owner of the Mortgage
Loan.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage
Loans
subject to a Custodial Agreement, and based solely upon a receipt
or
certification executed by the Custodian, receipt by the respective
Custodian as
the duly appointed agent of the Trustee) of the documents referred
to in Section
2.01(b)(I)(i) and Section 2.01(b)(II)(i), (iii), (v), (vi) and
(viii) above
(except that for purposes of such acknowledgment only, a Mortgage
Note may be
endorsed in blank) and declares that it, or a Custodian as its
agent, holds and
will hold such documents and the other documents constituting a
part of the
Mortgage Files delivered to it, or a Custodian as its agent, and
the rights of
Residential Funding with respect to any Pledged Assets, Additional
Collateral
and the Surety Bond assigned to the Trustee pursuant to Section
2.01, in trust
for the use and benefit of all present and future
Certificateholders. The
Trustee or Custodian (such Custodian being so obligated under a
Custodial
Agreement) agrees, for the benefit of Certificateholders, to review
each
Mortgage File delivered to it pursuant to Section 2.01(b) within 45
days after
the Closing Date to ascertain that all required documents
(specifically as set
forth in Section 2.01(b)), have been executed and received, and
that such
documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule,
as supplemented, that have been conveyed to it, and to deliver to
the Trustee a
certificate (the "Interim Certification") to the effect that all
documents
required to be delivered pursuant to Section 2.01(b) above have
been executed
and received and that such documents relate to the Mortgage Loans
identified on
the Mortgage Loan Schedule, except for any exceptions listed on
Schedule A
attached to such Interim Certification. Upon delivery of the
Mortgage Files by
the Company or the Master Servicer, the Trustee shall acknowledge
receipt (or,
with respect to Mortgage Loans subject to a Custodial Agreement,
and based
solely upon a receipt or certification executed by the Custodian,
receipt by the
respective Custodian as the duly appointed agent of the Trustee) of
the
documents referred to in Section 2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or
documents
constituting a part of a Mortgage File to be missing or defective,
the Trustee
shall promptly so notify the Master Servicer and the Company.
Pursuant to
Section 2.3 of the Custodial Agreement, the Custodian will notify
the Master
Servicer, the Company and the Trustee of any such omission or
defect found by it
in respect of any Mortgage File held by it in respect of the items
reviewed by
it pursuant to the Custodial Agreement. If such omission or defect
materially
and adversely affects the interests of the Certificateholders, the
Master
Servicer shall promptly notify Residential Funding of such omission
or defect
and request that Residential Funding correct or cure such omission
or defect
within 60 days from the date the Master Servicer was notified of
such omission
or defect and, if Residential Funding does not correct or cure such
omission or
defect within such period, the Master Servicer shall require
Residential Funding
to purchase such Mortgage Loan from the Trust Fund at its Purchase
Price within
90 days from the date the Master Servicer was notified of such
omission or
defect; provided that if the omission or defect would cause the
Mortgage Loan to
be other than a "qualified mortgage" as defined in Section
38
860G(a)(3) of the Code, any such cure or repurchase must occur
within 90 days
from the date such breach was discovered. The Purchase Price for
any such
Mortgage Loan shall be deposited by the Master Servicer in the
Custodial Account
maintained by it pursuant to Section 3.07 and, upon receipt by the
Trustee of
written notification of such deposit signed by a Servicing Officer,
the Trustee
or any Custodian, as the case may be, shall release to Residential
Funding the
related Mortgage File and the Trustee shall execute and deliver
such instruments
of transfer or assignment prepared by the Master Servicer, in each
case without
recourse, as shall be necessary to vest in Residential Funding or
its designee
any Mortgage Loan released pursuant hereto and thereafter such
Mortgage Loan
shall not be part of the Trust Fund. It is understood and agreed
that the
obligation of Residential Funding to so cure or purchase any
Mortgage Loan as to
which a material and adverse defect in or omission of a constituent
document
exists shall constitute the sole remedy respecting such defect or
omission
available to Certificateholders or the Trustee on behalf of the
Certificateholders.
Section 2.03 Representations, Warranties and Covenants of the
Master
Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to the
Trustee for
the benefit of the Certificateholders that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws governing its creation
and
existence and is or will be in compliance with the laws of each
state in
which any Mortgaged Property is located to the extent necessary to
ensure
the enforceability of each Mortgage Loan in accordance with the
terms of
this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's Certificate of
Incorporation or Bylaws or constitute a material default (or an
event
which, with notice or lapse of time, or both, would constitute a
material
default) under, or result in the material breach of, any material
contract,
agreement or other instrument to which the Master Servicer is a
party or
which may be applicable to the Master Servicer or any of its
assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Company, constitutes a valid, legal
and
binding obligation of the Master Servicer, enforceable against it
in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general
principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any
order
or decree of any court or any order, regulation or demand of any
federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the
condition
(financial or other) or operations of the Master Servicer or its
properties
or might have consequences that would materially adversely affect
its
performance hereunder;
39
(v) No litigation is pending or, to the best of the Master
Servicer's
knowledge, threatened against the Master Servicer which would
prohibit its
entering into this Agreement or performing its obligations under
this
Agreement;
(vi) The Master Servicer will comply in all material respects in
the
performance of this Agreement with all reasonable rules and
requirements of
each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement
furnished
in writing or report delivered to the Company, any Affiliate of the
Company
or the Trustee by the Master Servicer will, to the knowledge of the
Master
Servicer, contain any untrue statement of a material fact or omit a
material fact necessary to make the information, certificate,
statement or
report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar
with
the terms thereof. The terms of each existing Subservicing
Agreement and
each designated Subservicer are acceptable to the Master Servicer
and any
new Subservicing Agreements will comply with the provisions of
Section
3.02; and
(ix) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures
of MERS
in connection with the servicing of the Mortgage Loans that are
registered
with MERS.
It is understood and agreed that the representations and warranties
set
forth in this Section 2.03(a) shall survive delivery of the
respective
Mortgage Files to the Trustee or any Custodian.
Upon discovery by either the Company, the Master Servicer, the
Trustee or
any Custodian of a breach of any representation or warranty set
forth in this
Section 2.03(a) which materially and adversely affects the
interests of the
Certificateholders in any Mortgage Loan, the party discovering such
breach shall
give prompt written notice to the other parties (any Custodian
being so
obligated under a Custodial Agreement). Within 90 days of its
discovery or its
receipt of notice of such breach, the Master Servicer shall either
(i) cure such
breach in all material respects or (ii) to the extent that such
breach is with
respect to a Mortgage Loan or a related document, purchase such
Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set
forth in Section
2.02; provided that if the omission or defect would cause the
Mortgage Loan to
be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from
the date such
breach was discovered. The obligation of the Master Servicer to
cure such breach
or to so purchase such Mortgage Loan shall constitute the sole
remedy in respect
of a breach of a representation and warranty set forth in this
Section 2.03(a)
available to the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) Representations and warranties relating to the Mortgage Loans
are set
forth in Section 2.03(b) of the Series Supplement.
40
Section 2.04 Representations and Warranties of Residential Funding.
The Company, as assignee of Residential Funding under the
Assignment
Agreement, hereby assigns to the Trustee for the benefit of
Certificateholders
all of its right, title and interest in respect of the Assignment
Agreement (to
the extent assigned to the Company pursuant to the Assignment
Agreement)
applicable to a Mortgage Loan. Insofar as the Assignment Agreement
relates to
the representations and warranties made by Residential Funding or
the related
Seller in respect of such Mortgage Loan and any remedies provided
thereunder for
any breach of such representations and warranties, such right,
title and
interest may be enforced by the Master Servicer on behalf of the
Trustee and the
Certificateholders. Upon the discovery by the Company, the Master
Servicer, the
Trustee or any Custodian of a breach of any of the representations
and
warranties made in the Assignment Agreement (which, for purposes
hereof, will be
deemed to include any other cause giving rise to a repurchase
obligation under
the Assignment Agreement) in respect of any Mortgage Loan which
materially and
adversely affects the interests of the Certificateholders in such
Mortgage Loan,
the party discovering such breach shall give prompt written notice
to the other
parties (any Custodian being so obligated under a Custodial
Agreement). The
Master Servicer shall promptly notify Residential Funding of such
breach and
request that Residential Funding either (i) cure such breach in all
material
respects within 90 days from the date the Master Servicer was
notified of such
breach or (ii) purchase such Mortgage Loan from the Trust Fund at
the Purchase
Price and in the manner set forth in Section 2.02; provided that
Residential
Funding shall have the option to substitute a Qualified Substitute
Mortgage Loan
or Loans for such Mortgage Loan if such substitution occurs within
two years
following the Closing Date; provided that if the breach would cause
the Mortgage
Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of
the Code, any such cure, repurchase or substitution must occur
within 90 days
from the date the breach was discovered. If the breach of
representation and
warranty that gave rise to the obligation to repurchase or
substitute a Mortgage
Loan pursuant to Section 4 of the Assignment Agreement was the
representation
and warranty set forth in clause (xxxi) of Section 4 thereof, then
the Master
Servicer shall request that Residential Funding pay to the Trust
Fund,
concurrently with and in addition to the remedies provided in the
preceding
sentence, an amount equal to any liability, penalty or expense that
was actually
incurred and paid out of or on behalf of the Trust Fund, and that
directly
resulted from such breach, or if incurred and paid by the Trust
Fund thereafter,
concurrently with such payment. In the event that Residential
Funding elects to
substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage
Loan pursuant to this Section 2.04, Residential Funding shall
deliver to the
Trustee for the benefit of the Certificateholders with respect to
such Qualified
Substitute Mortgage Loan or Loans, the original Mortgage Note, the
Mortgage, an
Assignment of the Mortgage in recordable form if required pursuant
to Section
2.01, and such other documents and agreements as are required by
Section 2.01,
with the Mortgage Note endorsed as required by Section 2.01. No
substitution
will be made in any calendar month after the Determination Date for
such month.
Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the
month of substitution shall not be part of the Trust Fund and will
be retained
by the Master Servicer and remitted by the Master Servicer to
Residential
Funding on the next succeeding Distribution Date. For the month of
substitution,
distributions to the Certificateholders will include the Monthly
Payment due on
a Deleted Mortgage Loan for such month and thereafter Residential
Funding shall
be entitled to retain all amounts received in respect of such
Deleted Mortgage
Loan. The Master Servicer shall amend or cause to be amended the
Mortgage Loan
Schedule, and, if the Deleted Mortgage Loan
41
was a Discount Mortgage Loan, the Schedule of Discount Fractions,
for the
benefit of the Certificateholders to reflect the removal of such
Deleted
Mortgage Loan and the substitution of the Qualified Substitute
Mortgage Loan or
Loans and the Master Servicer shall deliver the amended Mortgage
Loan Schedule,
and, if the Deleted Mortgage Loan was a Discount Mortgage Loan, the
amended
Schedule of Discount Fractions, to the Trustee. Upon such
substitution, the
Qualified Substitute Mortgage Loan or Loans shall be subject to the
terms of
this Agreement and the related Subservicing Agreement in all
respects,
Residential Funding shall be deemed to have made the
representations and
warranties with respect to the Qualified Substitute Mortgage Loan
contained in
the related Assignment Agreement, and the Company and the Master
Servicer shall
be deemed to have made with respect to any Qualified Substitute
Mortgage Loan or
Loans, as of the date of substitution, the covenants,
representations and
warranties set forth in this Section 2.04, in Section 2.03 hereof
and in Section
4 of the Assignment Agreement, and the Master Servicer shall be
obligated to
repurchase or substitute for any Qualified Substitute Mortgage Loan
as to which
a Repurchase Event (as defined in the Assignment Agreement) has
occurred
pursuant to Section 4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified
Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will
determine the amount (if any) by which the aggregate principal
balance of all
such Qualified Substitute Mortgage Loans as of the date of
substitution is less
than the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans
(in each case after application of the principal portion of the
Monthly Payments
due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential
Funding shall
deposit the amount of such shortfall into the Custodial Account on
the day of
substitution, without any reimbursement therefor. Residential
Funding shall give
notice in writing to the Trustee of such event, which notice shall
be
accompanied by an Officers' Certificate as to the calculation of
such shortfall
and (subject to Section 10.01(f)) by an Opinion of Counsel to the
effect that
such substitution will not cause (a) any federal tax to be imposed
on the Trust
Fund, including without limitation, any federal tax imposed on
"prohibited
transactions" under Section 860F(a)(1) of the Code or on
"contributions after
the startup date" under Section 860G(d)(1) of the Code or (b) any
portion of any
REMIC to fail to qualify as such at any time that any Certificate
is
outstanding.
It is understood and agreed that the obligation of Residential
Funding to
cure such breach or purchase or to substitute for, a such Mortgage
Loan as to
which such a breach has occurred and is continuing and to make any
additional
payments required under the Assignment Agreement in connection with
a breach of
the representation and warranty in clause (xxxi) of Section 4
thereof shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of Certificateholders.
If the Master
Servicer is Residential Funding, then the Trustee shall also have
the right to
give the notification and require the purchase or substitution
provided for in
the second preceding paragraph in the event of such a breach of a
representation
or warranty made by Residential Funding in the Assignment
Agreement. In
connection with the purchase of or substitution for any such
Mortgage Loan by
Residential Funding, the Trustee shall assign to Residential
Funding all of the
Trustee's right, title and interest in respect of the Assignment
Agreement
applicable to such Mortgage Loan.
42
Section 2.05 Execution and Authentication of Certificates/Issuance
of
Certificates Evidencing Interests in REMIC I.
As provided in Section 2.05 of the Series Supplement.
Section 2.06 Conveyance of Uncertificated REMIC I and REMIC II
Regular
Interests; Acceptance by the Trustee.
As provided in Section 2.06 of the Series Supplement.
Section 2.07 Issuance of Certificates Evidencing Interests in REMIC
II.
As provided in Section 2.07 of the Series Supplement.
Section 2.08 Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(a) to sell the Certificates to the Company in exchange for the
Mortgage
Loans;
(b) to enter into and perform its obligations under this Agreement;
(c) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or
connected
therewith; and
(d) subject to compliance with this Agreement, to engage in such
other
activities as may be required in connection with conservation of
the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities.
Notwithstanding the provisions of Section 11.01, the trust shall
not engage in
any activity other than in connection with the foregoing or other
than as
required or authorized by the terms of this Agreement while any
Certificate is
outstanding, and this Section 2.08 may not be amended, without the
consent of
the Certificateholders evidencing a majority of the aggregate
Voting Rights of
the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage
Loans in
accordance with the terms of this Agreement and the respective
Mortgage Loans
and shall have full power and authority, acting alone or through
Subservicers as
provided in Section 3.02, to do any and all things which it may
deem necessary
or desirable in connection with such servicing and administration.
Without
limiting the generality of the foregoing, the Master Servicer in
its own name or
in the name of a Subservicer is hereby authorized and empowered by
the Trustee
43
when the Master Servicer or the Subservicer, as the case may be,
believes it
appropriate in its best judgment, to execute and deliver, on behalf
of the
Certificateholders and the Trustee or any of them, any and all
instruments of
satisfaction or cancellation, or of partial or full release or
discharge, or of
consent to assumption or modification in connection with a proposed
conveyance,
or of assignment of any Mortgage and Mortgage Note in connection
with the
repurchase of a Mortgage Loan and all other comparable instruments,
or with
respect to the modification or re-recording of a Mortgage for the
purpose of
correcting the Mortgage, the subordination of the lien of the
Mortgage in favor
of a public utility company or government agency or unit with
powers of eminent
domain, the taking of a deed in lieu of foreclosure, the
commencement,
prosecution or completion of judicial or non-judicial foreclosure,
the
conveyance of a Mortgaged Property to the related Insurer, the
acquisition of
any property acquired by foreclosure or deed in lieu of
foreclosure, or the
management, marketing and conveyance of any property acquired by
foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans and
with respect
to the Mortgaged Properties. The Master Servicer further is
authorized and
empowered by the Trustee, on behalf of the Certificateholders and
the Trustee,
in its own name or in the name of the Subservicer, when the Master
Servicer or
the Subservicer, as the case may be, believes it is appropriate in
its best
judgment to register any Mortgage Loan on the MERS(R) System, or
cause the
removal from the registration of any Mortgage Loan on the MERS(R)
System, to
execute and deliver, on behalf of the Trustee and the
Certificateholders or any
of them, any and all instruments of assignment and other comparable
instruments
with respect to such assignment or re-recording of a Mortgage in
the name of
MERS, solely as nominee for the Trustee and its successors and
assigns. Any
expenses incurred in connection with the actions described in the
preceding
sentence shall be borne by the Master Servicer in accordance with
Section
3.16(c), with no right of reimbursement; provided, that if, as a
result of MERS
discontinuing or becoming unable to continue operations in
connection with the
MERS System, it becomes necessary to remove any Mortgage Loan from
registration
on the MERS System and to arrange for the assignment of the related
Mortgages to
the Trustee, then any related expenses shall be reimbursable to the
Master
Servicer. Notwithstanding the foregoing, subject to Section
3.07(a), the Master
Servicer shall not permit any modification with respect to any
Mortgage Loan
that would both constitute a sale or exchange of such Mortgage Loan
within the
meaning of Section 1001 of the Code and any proposed, temporary or
final
regulations promulgated thereunder (other than in connection with a
proposed
conveyance or assumption of such Mortgage Loan that is treated as a
Principal
Prepayment in Full pursuant to Section 3.13(d) hereof) and cause
any REMIC
formed under the Series Supplement to fail to qualify as a REMIC
under the Code.
The Trustee shall furnish the Master Servicer with any powers of
attorney and
other documents necessary or appropriate to enable the Master
Servicer to
service and administer the Mortgage Loans. The Trustee shall not be
liable for
any action taken by the Master Servicer or any Subservicer pursuant
to such
powers of attorney. In servicing and administering any
Nonsubserviced Mortgage
Loan, the Master Servicer shall, to the extent not inconsistent
with this
Agreement, comply with the Program Guide as if it were the
originator of such
Mortgage Loan and had retained the servicing rights and obligations
in respect
thereof. In connection with servicing and administering the
Mortgage Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may
perform
services such as appraisals and brokerage services that are not
customarily
provided by servicers of mortgage loans, and shall be entitled to
reasonable
compensation therefor in accordance with Section 3.10 and (ii) may,
at its own
discretion and on
44
behalf of the Trustee, obtain credit information in the form of a
"credit score"
from a credit repository.
(b) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the
properties subject
to the Mortgage Loans shall not, for the purpose of calculating
monthly
distributions to the Certificateholders, be added to the amount
owing under the
related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loan so
permit, and such costs shall be recoverable to the extent permitted
by Section
3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in
connection
with the offering of pass-through certificates evidencing interests
in one or
more of the Certificates providing for the payment by the Master
Servicer of
amounts received by the Master Servicer as servicing compensation
hereunder and
required to cover certain Prepayment Interest Shortfalls on the
Mortgage Loans,
which payment obligation will thereafter be an obligation of the
Master Servicer
hereunder.
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations.
(a) The Master Servicer may continue in effect Subservicing
Agreements
entered into by Residential Funding and Subservicers prior to the
execution and
delivery of this Agreement, and may enter into new Subservicing
Agreements with
Subservicers, for the servicing and administration of all or some
of the
Mortgage Loans. Each Subservicer of a Mortgage Loan shall be
entitled to receive
and retain, as provided in the related Subservicing Agreement and
in Section
3.07, the related Subservicing Fee from payments of interest
received on such
Mortgage Loan after payment of all amounts required to be remitted
to the Master
Servicer in respect of such Mortgage Loan. For any Mortgage Loan
that is a
Nonsubserviced Mortgage Loan, the Master Servicer shall be entitled
to receive
and retain an amount equal to the Subservicing Fee from payments of
interest.
Unless the context otherwise requires, references in this Agreement
to actions
taken or to be taken by the Master Servicer in servicing the
Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of
the Master
Servicer. Each Subservicing Agreement will be upon such terms and
conditions as
are generally required or permitted by the Program Guide and are
not
inconsistent with this Agreement and as the Master Servicer and the
Subservicer
have agreed. A representative form of Subservicing Agreement is
attached to this
Agreement as Exhibit E. With the approval of the Master Servicer, a
Subservicer
may delegate its servicing obligations to third-party servicers,
but such
Subservicer will remain obligated under the related Subservicing
Agreement. The
Master Servicer and a Subservicer may enter into amendments thereto
or a
different form of Subservicing Agreement, and the form referred to
or included
in the Program Guide is merely provided for information and shall
not be deemed
to limit in any respect the discretion of the Master Servicer to
modify or enter
into different Subservicing Agreements; provided, however, that any
such
amendments or different forms shall be consistent with and not
violate the
provisions of either this Agreement or the Program Guide in a
manner which would
materially and adversely affect the interests of the
Certificateholders. The
Program Guide and any other Subservicing Agreement entered into
between the
Master Servicer and any Subservicer shall require the Subservicer
to accurately
and fully report its borrower credit files to each of the Credit
Repositories in
a timely manner.
45
(b) As part of its servicing activities hereunder, the Master
Servicer, for
the benefit of the Trustee and the Certificateholders, shall use
its best
reasonable efforts to enforce the obligations of each Subservicer
under the
related Subservicing Agreement and of each Seller under the related
Seller's
Agreement insofar as the Company's rights with respect to such
obligation has
been assigned to the Trustee hereunder, to the extent that the
non-performance
of any such Seller's obligation would have a material and adverse
effect on a
Mortgage Loan, including, without limitation, the obligation to
purchase a
Mortgage Loan on account of defective documentation, as described
in Section
2.02, or on account of a breach of a representation or warranty, as
described in
Section 2.04. Such enforcement, including, without limitation, the
legal
prosecution of claims, termination of Subservicing Agreements or
Seller's
Agreements, as appropriate, and the pursuit of other appropriate
remedies, shall
be in such form and carried out to such an extent and at such time
as the Master
Servicer would employ in its good faith business judgment and which
are normal
and usual in its general mortgage servicing activities. The Master
Servicer
shall pay the costs of such enforcement at its own expense, and
shall be
reimbursed therefor only (i) from a general recovery resulting from
such
enforcement to the extent, if any, that such recovery exceeds all
amounts due in
respect of the related Mortgage Loan or (ii) from a specific
recovery of costs,
expenses or attorneys fees against the party against whom such
enforcement is
directed. For purposes of clarification only, the parties agree
that the
foregoing is not intended to, and does not, limit the ability of
the Master
Servicer to be reimbursed for expenses that are incurred in
connection with the
enforcement of a Seller's obligations (insofar as the Company's
rights with
respect to such Seller's obligations have been assigned to the
Trustee
hereunder) and are reimbursable pursuant to Section 3.10(a)(viii).
Section 3.03 Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and
conditions of such
Subservicing Agreement and without any limitation by virtue of this
Agreement;
provided, however, that in the event of termination of any
Subservicing
Agreement by the Master Servicer or the Subservicer, the Master
Servicer shall
either act as servicer of the related Mortgage Loan or enter into a
Subservicing
Agreement with a successor Subservicer which will be bound by the
terms of the
related Subservicing Agreement. If the Master Servicer or any
Affiliate of
Residential Funding acts as servicer, it will not assume liability
for the
representations and warranties of the Subservicer which it
replaces. If the
Master Servicer enters into a Subservicing Agreement with a
successor
Subservicer, the Master Servicer shall use reasonable efforts to
have the
successor Subservicer assume liability for the representations and
warranties
made by the terminated Subservicer in respect of the related
Mortgage Loans and,
in the event of any such assumption by the successor Subservicer,
the Master
Servicer may, in the exercise of its business judgment, release the
terminated
Subservicer from liability for such representations and warranties.
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions
of this
Agreement relating to agreements or arrangements between the Master
Servicer or
a Subservicer or reference to actions taken through a Subservicer
or otherwise,
the Master Servicer shall remain obligated and liable to the
Trustee and the
Certificateholders for the servicing and administering of the
Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution
of
46
such obligation or liability by virtue of such Subservicing
Agreements or
arrangements or by virtue of indemnification from the Subservicer
or the Company
and to the same extent and under the same terms and conditions as
if the Master
Servicer alone were servicing and administering the Mortgage Loans.
The Master
Servicer shall be entitled to enter into any agreement with a
Subservicer or
Seller for indemnification of the Master Servicer and nothing
contained in this
Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship Between Subservicer and
Trustee or
Certificateholders.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a
Subservicer
in its capacity as such and not as an originator shall be deemed to
be between
the Subservicer and the Master Servicer alone and the Trustee and
the
Certificateholders shall not be deemed parties thereto and shall
have no claims,
rights, obligations, duties or liabilities with respect to the
Subservicer in
its capacity as such except as set forth in Section 3.06. The
foregoing
provision shall not in any way limit a Subservicer's obligation to
cure an
omission or defect or to repurchase a Mortgage Loan as referred to
in Section
2.02 hereof.
Section 3.06 Assumption or Termination of Subservicing Agreements
by
Trustee.
(a) If the Master Servicer shall for any reason no longer be the
master
servicer (including by reason of an Event of Default), the Trustee,
its designee
or its successor shall thereupon assume all of the rights and
obligations of the
Master Servicer under each Subservicing Agreement that may have
been entered
into. The Trustee, its designee or the successor servicer for the
Trustee shall
be deemed to have assumed all of the Master Servicer's interest
therein and to
have replaced the Master Servicer as a party to the Subservicing
Agreement to
the same extent as if the Subservicing Agreement had been assigned
to the
assuming party except that the Master Servicer shall not thereby be
relieved of
any liability or obligations under the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at
the
expense of the Master Servicer, deliver to the assuming party all
documents and
records relating to each Subservicing Agreement and the Mortgage
Loans then
being serviced and an accounting of amounts collected and held by
it and
otherwise use its best efforts to effect the orderly and efficient
transfer of
each Subservicing Agreement to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits
to
Custodial Account.
(a) The Master Servicer shall make reasonable efforts to collect
all
payments called for under the terms and provisions of the Mortgage
Loans, and
shall, to the extent such procedures shall be consistent with this
Agreement and
the terms and provisions of any related Primary Insurance Policy,
follow such
collection procedures as it would employ in its good faith business
judgment and
which are normal and usual in its general mortgage servicing
activities.
Consistent with the foregoing, the Master Servicer may in its
discretion (i)
waive any late payment charge or any prepayment charge or penalty
interest in
connection with the prepayment
47
of a Mortgage Loan and (ii) extend the Due Date for payments due on
a Mortgage
Loan in accordance with the Program Guide; provided, however, that
the Master
Servicer shall first determine that any such waiver or extension
will not impair
the coverage of any related Primary Insurance Policy or materially
adversely
affect the lien of the related Mortgage. Notwithstanding anything
in this
Section to the contrary, the Master Servicer or any Subservicer
shall not
enforce any prepayment charge to the extent that such enforcement
would violate
any applicable law. In the event of any such arrangement, the
Master Servicer
shall make timely advances on the related Mortgage Loan during the
scheduled
period in accordance with the amortization schedule of such
Mortgage Loan
without modification thereof by reason of such arrangements unless
otherwise
agreed to by the Holders of the Classes of Certificates affected
thereby;
provided, however, that no such extension shall be made if any such
advance
would be a Nonrecoverable Advance. Consistent with the terms of
this Agreement,
the Master Servicer may also waive, modify or vary any term of any
Mortgage Loan
or consent to the postponement of strict compliance with any such
term or in any
manner grant indulgence to any Mortgagor if in the Master
Servicer's
determination such waiver, modification, postponement or indulgence
is not
materially adverse to the interests of the Certificateholders
(taking into
account any estimated Realized Loss that might result absent such
action);
provided, however, that the Master Servicer may not modify
materially or permit
any Subservicer to modify any Mortgage Loan, including without
limitation any
modification that would change the Mortgage Rate, forgive the
payment of any
principal or interest (unless in connection with the liquidation of
the related
Mortgage Loan or except in connection with prepayments to the
extent that such
reamortization is not inconsistent with the terms of the Mortgage
Loan),
capitalize any amounts owing on the Mortgage Loan by adding such
amount to the
outstanding principal balance of the Mortgage Loan, or extend the
final maturity
date of such Mortgage Loan, unless such Mortgage Loan is in default
or, in the
judgment of the Master Servicer, such default is reasonably
foreseeable;
provided, further, that (1) no such modification shall reduce the
interest rate
on a Mortgage Loan below one-half of the Mortgage Rate as in effect
on the
Cut-Off Date, but not less than the sum of the rates at which the
Servicing Fee
and the Subservicing Fee with respect to such Mortgage Loan accrues
plus the
rate at which the premium paid to the Certificate Insurer, if any,
accrues, (2)
the final maturity date for any Mortgage Loan shall not be extended
beyond the
Maturity Date, (3) the Stated Principal Balance of all Reportable
Modified
Mortgage Loans subject to Servicing Modifications (measured at the
time of the
Servicing Modification and after giving effect to any Servicing
Modification)
can be no more than five percent of the aggregate principal balance
of the
Mortgage Loans as of the Cut-off Date, unless such limit is
increased from time
to time with the consent of the Rating Agencies and the Certificate
Insurer, if
any. In addition, any amounts owing on a Mortgage Loan added to the
outstanding
principal balance of such Mortgage Loan must be fully amortized
over the
remaining term of such Mortgage Loan, and such amounts may be added
to the
outstanding principal balance of a Mortgage Loan only once during
the life of
such Mortgage Loan. Also, the addition of such amounts described in
the
preceding sentence shall be implemented in accordance with the
Program Guide and
may be implemented only by Subservicers that have been approved by
the Master
Servicer for such purpose. In connection with any Curtailment of a
Mortgage
Loan, the Master Servicer, to the extent not inconsistent with the
terms of the
Mortgage Note and local law and practice, may permit the Mortgage
Loan to be
reamortized such that the Monthly Payment is recalculated as an
amount that will
fully amortize the remaining Stated Principal Balance thereof by
the original
Maturity Date based on the original Mortgage Rate; provided, that
such
re-amortization shall not be permitted if it would
48
constitute a reissuance of the Mortgage Loan for federal income tax
purposes,
except if such reissuance is described in Treasury Regulation
Section
1.860G-2(b)(3).
(b) The Master Servicer shall establish and maintain a Custodial
Account in
which the Master Servicer shall deposit or cause to be deposited on
a daily
basis, except as otherwise specifically provided herein, the
following payments
and collections remitted by Subservicers or received by it in
respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in
respect of
principal and interest on the Mortgage Loans due on or before the
Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the
principal
component of any Subservicer Advance or of any REO Proceeds
received in
connection with an REO Property for which an REO Disposition has
occurred;
(ii) All payments on account of interest at the Adjusted Mortgage
Rate
on the Mortgage Loans, including Buydown Funds, if any, and the
interest
component of any Subservicer Advance or of any REO Proceeds
received in
connection with an REO Property for which an REO Disposition has
occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section
2.02, 2.03, 2.04, 4.07 or 9.01 and all amounts required to be
deposited in
connection with the substitution of a Qualified Substitute Mortgage
Loan
pursuant to Section 2.03 or 2.04;
(v) Any amounts required to be deposited pursuant to Section
3.07(c)
or 3.21;
(vi) All amounts transferred from the Certificate Account to the
Custodial Account in accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by the
Master Servicer in respect of any Additional Collateral; and
(viii) Any amounts received by the Master Servicer in respect of
Pledged Assets.
The foregoing requirements for deposit in the Custodial Account
shall be
exclusive, it being understood and agreed that, without limiting
the generality
of the foregoing, payments on the Mortgage Loans which are not part
of the Trust
Fund (consisting of payments in respect of principal and interest
on the
Mortgage Loans due on or before the Cut-off Date) and payments or
collections in
the nature of prepayment charges or late payment charges or
assumption fees may
but need not be deposited by the Master Servicer in the Custodial
Account. In
the event any amount not required to be deposited in the Custodial
Account is so
deposited, the Master Servicer may at any time withdraw such amount
from the
Custodial Account, any provision herein to the contrary
notwithstanding. The
Custodial Account may contain funds that belong to one or more
trust funds
created for mortgage pass-through certificates of other series and
may contain
other funds respecting payments on mortgage loans belonging to the
Master
Servicer or
49
serviced or master serviced by it on behalf of others.
Notwithstanding such
commingling of funds, the Master Servicer shall keep records that
accurately
reflect the funds on deposit in the Custodial Account that have
been identified
by it as being attributable to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO
Proceeds and
the proceeds of the purchase of any Mortgage Loan pursuant to
Sections 2.02,
2.03, 2.04 and 4.07 received in any calendar month, the Master
Servicer may
elect to treat such amounts as included in the Available
Distribution Amount for
the Distribution Date in the month of receipt, but is not obligated
to do so. If
the Master Servicer so elects, such amounts will be deemed to have
been received
(and any related Realized Loss shall be deemed to have occurred) on
the last day
of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the
institution
maintaining the Custodial Account to invest the funds in the
Custodial Account
attributable to the Mortgage Loans in Permitted Investments which
shall mature
not later than the Certificate Account Deposit Date next following
the date of
such investment (with the exception of the Amount Held for Future
Distribution)
and which shall not be sold or disposed of prior to their
maturities. All income
and gain realized from any such investment shall be for the benefit
of the
Master Servicer as additional servicing compensation and shall be
subject to its
withdrawal or order from time to time. The amount of any losses
incurred in
respect of any such investments attributable to the investment of
amounts in
respect of the Mortgage Loans shall be deposited in the Custodial
Account by the
Master Servicer out of its own funds immediately as realized
without any right
of reimbursement.
(d) The Master Servicer shall give notice to the Trustee and the
Company of
any change in the location of the Custodial Account and the
location of the
Certificate Account prior to the use thereof.
Section 3.08 Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall
cause the
Subservicer, pursuant to the Subservicing Agreement, to establish
and maintain
one or more Subservicing Accounts which shall be an Eligible
Account or, if such
account is not an Eligible Account, shall generally satisfy the
requirements of
the Program Guide and be otherwise acceptable to the Master
Servicer and each
Rating Agency. The Subservicer will be required thereby to deposit
into the
Subservicing Account on a daily basis all proceeds of Mortgage
Loans received by
the Subservicer, less its Subservicing Fees and unreimbursed
advances and
expenses, to the extent permitted by the Subservicing Agreement. If
the
Subservicing Account is not an Eligible Account, the Master
Servicer shall be
deemed to have received such monies upon receipt thereof by the
Subservicer. The
Subservicer shall not be required to deposit in the Subservicing
Account
payments or collections in the nature of prepayment charges or late
charges or
assumption fees. On or before the date specified in the Program
Guide, but in no
event later than the Determination Date, the Master Servicer shall
cause the
Subservicer, pursuant to the Subservicing Agreement, to remit to
the Master
Servicer for deposit in the Custodial Account all funds held in the
Subservicing
Account with respect to each Mortgage Loan serviced by such
Subservicer that are
required to be remitted to the Master Servicer. The Subservicer
will also be
required, pursuant to the
50
Subservicing Agreement, to advance on such scheduled date of
remittance amounts
equal to any scheduled monthly installments of principal and
interest less its
Subservicing Fees on any Mortgage Loans for which payment was not
received by
the Subservicer. This obligation to advance with respect to each
Mortgage Loan
will continue up to and including the first of the month following
the date on
which the related Mortgaged Property is sold at a foreclosure sale
or is
acquired by the Trust Fund by deed in lieu of foreclosure or
otherwise. All such
advances received by the Master Servicer shall be deposited
promptly by it in
the Custodial Account.
(b) The Subservicer may also be required, pursuant to the
Subservicing
Agreement, to remit to the Master Servicer for deposit in the
Custodial Account
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage
Rate plus the
rate per annum at which the Servicing Fee accrues in the case of a
Modified
Mortgage Loan) on any Curtailment received by such Subservicer in
respect of a
Mortgage Loan from the related Mortgagor during any month that is
to be applied
by the Subservicer to reduce the unpaid principal balance of the
related
Mortgage Loan as of the first day of such month, from the date of
application of
such Curtailment to the first day of the following month. Any
amounts paid by a
Subservicer pursuant to the preceding sentence shall be for the
benefit of the
Master Servicer as additional servicing compensation and shall be
subject to its
withdrawal or order from time to time pursuant to Sections
3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate
Account, the
Master Servicer shall for any Nonsubserviced Mortgage Loan, and
shall cause the
Subservicers for Subserviced Mortgage Loans to, establish and
maintain one or
more Servicing Accounts and deposit and retain therein all
collections from the
Mortgagors (or advances from Subservicers) for the payment of
taxes,
assessments, hazard insurance premiums, Primary Insurance Policy
premiums, if
applicable, or comparable items for the account of the Mortgagors.
Each
Servicing Account shall satisfy the requirements for a Subservicing
Account and,
to the extent permitted by the Program Guide or as is otherwise
acceptable to
the Master Servicer, may also function as a Subservicing Account.
Withdrawals of
amounts related to the Mortgage Loans from the Servicing Accounts
may be made
only to effect timely payment of taxes, assessments, hazard
insurance premiums,
Primary Insurance Policy premiums, if applicable, or comparable
items, to
reimburse the Master Servicer or Subservicer out of related
collections for any
payments made pursuant to Sections 3.11 (with respect to the
Primary Insurance
Policy) and 3.12(a) (with respect to hazard insurance), to refund
to any
Mortgagors any sums as may be determined to be overages, to pay
interest, if
required, to Mortgagors on balances in the Servicing Account or to
clear and
terminate the Servicing Account at the termination of this
Agreement in
accordance with Section 9.01 or in accordance with the Program
Guide. As part of
its servicing duties, the Master Servicer shall, and the
Subservicers will,
pursuant to the Subservicing Agreements, be required to pay to the
Mortgagors
interest on funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to in
the
preceding subsection that are not timely paid by the Mortgagors or
advanced by
the Subservicers on the date when the tax, premium or other cost
for which such
payment is intended is due, but the Master Servicer shall be
required so to
advance only to the extent that such advances, in the good faith
judgment of the
Master Servicer, will be recoverable by the Master Servicer out of
Insurance
Proceeds, Liquidation Proceeds or otherwise.
51
Section 3.09 Access to Certain Documentation and Information
Regarding the
Mortgage Loans.
If compliance with this Section 3.09 shall make any Class of
Certificates
legal for investment by federally insured savings and loan
associations, the
Master Servicer shall provide, or cause the Subservicers to
provide, to the
Trustee, the Office of Thrift Supervision or the FDIC and the
supervisory agents
and examiners thereof access to the documentation regarding the
Mortgage Loans
required by applicable regulations of the Office of Thrift
Supervision, such
access being afforded without charge but only upon reasonable
request and during
normal business hours at the offices designated by the Master
Servicer. The
Master Servicer shall permit such representatives to photocopy any
such
documentation and shall provide equipment for that purpose at a
charge
reasonably approximating the cost of such photocopying to the
Master Servicer.
Section 3.10 Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein,
make
withdrawals from the Custodial Account of amounts on deposit
therein pursuant to
Section 3.07 that are attributable to the Mortgage Loans for the
following
purposes:
(i) to make deposits into the Certificate Account in the amounts
and
in the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for previously
unreimbursed Advances, Servicing Advances or other expenses made
pursuant
to Sections 3.01, 3.07(a), 3.08, 3.11, 3.12(a), 3.14 and 4.04 or
otherwise
reimbursable pursuant to the terms of this Agreement, such
withdrawal right
being limited to amounts received on the related Mortgage Loans
(including,
for this purpose, REO Proceeds, Insurance Proceeds, Liquidation
Proceeds
and proceeds from the purchase of a Mortgage Loan pursuant to
Section 2.02,
2.03, 2.04, 4.07 or 9.01) which represent (A) Late Collections of
Monthly
Payments for which any such advance was made in the case of
Subservicer
Advances or Advances pursuant to Section 4.04 and (B) recoveries of
amounts
in respect of which such advances were made in the case of
Servicing
Advances;
(iii) to pay to itself or the related Subservicer (if not
previously
retained by such Subservicer) out of each payment received by the
Master
Servicer on account of interest on a Mortgage Loan as contemplated
by
Sections 3.14 and 3.16, an amount equal to that remaining portion
of any
such payment as to interest (but not in excess of the Servicing Fee
and the
Subservicing Fee, if not previously retained) which, when deducted,
will
result in the remaining amount of such interest being interest at
the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified
Mortgage Loan) on the amount specified in the amortization schedule
of the
related Mortgage Loan as the principal balance thereof at the
beginning of
the period respecting which such interest was paid after giving
effect to
any previous Curtailments;
52
(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds and other property
deposited
in or credited to the Custodial Account that it is entitled to
withdraw
pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, any amounts remitted by Subservicers as
interest in
respect of Curtailments pursuant to Section 3.08(b), and any
amounts paid
by a Mortgagor in connection with a Principal Prepayment in Full in
respect
of interest for any period during the calendar month in which such
Principal Prepayment in Full is to be distributed to the
Certificateholders;
(vi) to pay to itself, a Subservicer, a Seller, Residential
Funding,
the Company or any other appropriate Person, as the case may be,
with
respect to each Mortgage Loan or property acquired in respect
thereof that
has been purchased or otherwise transferred pursuant to Section
2.02, 2.03,
2.04, 4.07 or 9.01, all amounts received thereon and not required
to be
distributed to the Certificateholders as of the date on which the
related
Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the extent
provided
in subsection (c) below, and any Advance or Servicing Advance made
in
connection with a modified Mortgage Loan that is in default or, in
the
judgment of the Master Servicer, default is reasonably foreseeable
pursuant
to Section 3.07(a), to the extent the amount of the Advance or
Servicing
Advance was added to the Stated Principal Balance of the Mortgage
Loan in a
prior calendar month, or any Advance reimbursable to the Master
Servicer
pursuant to Section 4.02(a);
(viii) to reimburse itself or the Company for expenses incurred by
and
reimbursable to it or the Company pursuant to Sections 3.01(a),
3.11, 3.13,
3.14(c), 6.03, 10.01 or otherwise, or in connection with enforcing,
in
accordance with this Agreement, any repurchase, substitution or
indemnification obligation of any Seller (other than an Affiliate
of the
Company) pursuant to the related Seller's Agreement;
(ix) to reimburse itself for Servicing Advances expended by it (a)
pursuant to Section 3.14 in good faith in connection with the
restoration
of property damaged by an Uninsured Cause, and (b) in connection
with the
liquidation of a Mortgage Loan or disposition of an REO Property to
the
extent not otherwise reimbursed pursuant to clause (ii) or (viii)
above;
and
(x) to withdraw any amount deposited in the Custodial Account that
was
not required to be deposited therein pursuant to Section 3.07.
(b) Since, in connection with withdrawals pursuant to clauses (ii),
(iii),
(v) and (vi), the Master Servicer's entitlement thereto is limited
to
collections or other recoveries on the related Mortgage Loan, the
Master
Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal
from the
Custodial Account pursuant to such clauses.
53
(c) The Master Servicer shall be entitled to reimburse itself or
the
related Subservicer for any advance made in respect of a Mortgage
Loan that the
Master Servicer determines to be a Nonrecoverable Advance by
withdrawal from the
Custodial Account of amounts on deposit therein attributable to the
Mortgage
Loans on any Certificate Account Deposit Date succeeding the date
of such
determination. Such right of reimbursement in respect of a
Nonrecoverable
Advance relating to an Advance pursuant to Section 4.04 on any such
Certificate
Account Deposit Date shall be limited to an amount not exceeding
the portion of
such advance previously paid to Certificateholders (and not
theretofore
reimbursed to the Master Servicer or the related Subservicer).
Section 3.11 Maintenance of the Primary Insurance Policies;
Collections
Thereunder.
(a) The Master Servicer shall not take, or permit any Subservicer
to take,
any action which would result in non-coverage under any applicable
Primary
Insurance Policy of any loss which, but for the actions of the
Master Servicer
or Subservicer, would have been covered thereunder. To the extent
coverage is
available, the Master Servicer shall keep or cause to be kept in
full force and
effect each such Primary Insurance Policy until the principal
balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced to
80% or less
of the Appraised Value in the case of such a Mortgage Loan having a
Loan-to-Value Ratio at origination in excess of 80%, provided that
such Primary
Insurance Policy was in place as of the Cut-off Date and the
Company had
knowledge of such Primary Insurance Policy. The Master Servicer
shall be
entitled to cancel or permit the discontinuation of any Primary
Insurance Policy
as to any Mortgage Loan, if the Stated Principal Balance of the
Mortgage Loan is
reduced below an amount equal to 80% of the appraised value of the
related
Mortgaged Property as determined in any appraisal thereof after the
Closing
Date, or if the Loan-to-Value Ratio is reduced below 80% as a
result of
principal payments on the Mortgage Loan after the Closing Date. In
the event
that the Company gains knowledge that as of the Closing Date, a
Mortgage Loan
had a Loan-to-Value Ratio at origination in excess of 80% and is
not the subject
of a Primary Insurance Policy (and was not included in any
exception to the
representation in Section 2.03(b)(iv)) and that such Mortgage Loan
has a current
Loan-to-Value Ratio in excess of 80% then the Master Servicer shall
use its
reasonable efforts to obtain and maintain a Primary Insurance
Policy to the
extent that such a policy is obtainable at a reasonable price. The
Master
Servicer shall not cancel or refuse to renew any such Primary
Insurance Policy
applicable to a Nonsubserviced Mortgage Loan, or consent to any
Subservicer
canceling or refusing to renew any such Primary Insurance Policy
applicable to a
Mortgage Loan subserviced by it, that is in effect at the date of
the initial
issuance of the Certificates and is required to be kept in force
hereunder
unless the replacement Primary Insurance Policy for such canceled
or non-renewed
policy is maintained with an insurer whose claims-paying ability is
acceptable
to each Rating Agency for mortgage pass-through certificates having
a rating
equal to or better than the lower of the then-current rating or the
rating
assigned to the Certificates as of the Closing Date by such Rating
Agency.
(b) In connection with its activities as administrator and servicer
of the
Mortgage Loans, the Master Servicer agrees to present or to cause
the related
Subservicer to present, on behalf of the Master Servicer, the
Subservicer, if
any, the Trustee and Certificateholders, claims to the related
Insurer under any
Primary Insurance Policies, in a timely manner in accordance with
such policies,
and, in this regard, to take or cause to be taken such reasonable
action as
shall be necessary to permit recovery under any Primary Insurance
Policies
respecting defaulted
54
Mortgage Loans. Pursuant to Section 3.07, any Insurance Proceeds
collected by or
remitted to the Master Servicer under any Primary Insurance
Policies shall be
deposited in the Custodial Account, subject to withdrawal pursuant
to Section
3.10.
Section 3.12 Maintenance of Fire Insurance and Omissions and
Fidelity
Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan
(other than a Cooperative Loan) fire insurance with extended
coverage in an
amount which is equal to the lesser of the principal balance owing
on such
Mortgage Loan or 100 percent of the insurable value of the
improvements;
provided, however, that such coverage may not be less than the
minimum amount
required to fully compensate for any loss or damage on a
replacement cost basis.
To the extent it may do so without breaching the related
Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not
cause such
insurance, to the extent it is available, to be maintained. The
Master Servicer
shall also cause to be maintained on property acquired upon
foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan (other than a
Cooperative Loan),
fire insurance with extended coverage in an amount which is at
least equal to
the amount necessary to avoid the application of any co-insurance
clause
contained in the related hazard insurance policy. Pursuant to
Section 3.07, any
amounts collected by the Master Servicer under any such policies
(other than
amounts to be applied to the restoration or repair of the related
Mortgaged
Property or property thus acquired or amounts released to the
Mortgagor in
accordance with the Master Servicer's normal servicing procedures)
shall be
deposited in the Custodial Account, subject to withdrawal pursuant
to Section
3.10. Any cost incurred by the Master Servicer in maintaining any
such insurance
shall not, for the purpose of calculating monthly distributions to
the
Certificateholders, be added to the amount owing under the Mortgage
Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such
costs shall
be recoverable by the Master Servicer out of related late payments
by the
Mortgagor or out of Insurance Proceeds and Liquidation Proceeds to
the extent
permitted by Section 3.10. It is understood and agreed that no
earthquake or
other additional insurance is to be required of any Mortgagor or
maintained on
property acquired in respect of a Mortgage Loan other than pursuant
to such
applicable laws and regulations as shall at any time be in force
and as shall
require such additional insurance. Whenever the improvements
securing a Mortgage
Loan (other than a Cooperative Loan) are located at the time of
origination of
such Mortgage Loan in a federally designated special flood hazard
area, the
Master Servicer shall cause flood insurance (to the extent
available) to be
maintained in respect thereof. Such flood insurance shall be in an
amount equal
to the lesser of (i) the amount required to compensate for any loss
or damage to
the Mortgaged Property on a replacement cost basis and (ii) the
maximum amount
of such insurance available for the related Mortgaged Property
under the
national flood insurance program (assuming that the area in which
such Mortgaged
Property is located is participating in such program).
If the Master Servicer shall obtain and maintain a blanket fire
insurance
policy with extended coverage insuring against hazard losses on all
of the
Mortgage Loans, it shall conclusively be deemed to have satisfied
its
obligations as set forth in the first sentence of this Section
3.12(a), it being
understood and agreed that such policy may contain a deductible
clause, in which
case the Master Servicer shall, in the event that there shall not
have been
maintained on the related Mortgaged Property a policy complying
with the first
sentence of this Section 3.12(a) and there shall have been a loss
which would
have been covered by such policy, deposit in the
55
Certificate Account the amount not otherwise payable under the
blanket policy
because of such deductible clause. Any such deposit by the Master
Servicer shall
be made on the Certificate Account Deposit Date next preceding the
Distribution
Date which occurs in the month following the month in which
payments under any
such policy would have been deposited in the Custodial Account. In
connection
with its activities as administrator and servicer of the Mortgage
Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee
and the
Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own
expense and
keep in full force and effect throughout the term of this Agreement
a blanket
fidelity bond and an errors and omissions insurance policy covering
the Master
Servicer's officers and employees and other persons acting on
behalf of the
Master Servicer in connection with its activities under this
Agreement. The
amount of coverage shall be at least equal to the coverage that
would be
required by Fannie Mae or Freddie Mac, whichever is greater, with
respect to the
Master Servicer if the Master Servicer were servicing and
administering the
Mortgage Loans for Fannie Mae or Freddie Mac. In the event that any
such bond or
policy ceases to be in effect, the Master Servicer shall obtain a
comparable
replacement bond or policy from an issuer or insurer, as the case
may be,
meeting the requirements, if any, of the Program Guide and
acceptable to the
Company. Coverage of the Master Servicer under a policy or bond
obtained by an
Affiliate of the Master Servicer and providing the coverage
required by this
Section 3.12(b) shall satisfy the requirements of this Section
3.12(b).
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the
Master
Servicer or Subservicer, to the extent it has knowledge of such
conveyance,
shall enforce any due-on-sale clause contained in any Mortgage Note
or Mortgage,
to the extent permitted under applicable law and governmental
regulations, but
only to the extent that such enforcement will not adversely affect
or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the
foregoing:
(i) the Master Servicer shall not be deemed to be in default under
this Section 3.13(a) by reason of any transfer or assumption which
the
Master Servicer is restricted by law from preventing; and
(ii) if the Master Servicer determines that it is reasonably likely
that any Mortgagor will bring, or if any Mortgagor does bring,
legal action
to declare invalid or otherwise avoid enforcement of a due-on-sale
clause
contained in any Mortgage Note or Mortgage, the Master Servicer
shall not
be required to enforce the due-on-sale clause or to contest such
action.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause
to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged
Property is to be conveyed to a Person by a Mortgagor, and such
Person is to
enter into an assumption or modification agreement or supplement to
the Mortgage
Note or Mortgage which requires the signature of the Trustee, or if
an
instrument of release signed by the Trustee is required releasing
the Mortgagor
56
from liability on the Mortgage Loan, the Master Servicer is
authorized, subject
to the requirements of the sentence next following, to execute and
deliver, on
behalf of the Trustee, the assumption agreement with the Person to
whom the
Mortgaged Property is to be conveyed and such modification
agreement or
supplement to the Mortgage Note or Mortgage or other instruments as
are
reasonable or necessary to carry out the terms of the Mortgage Note
or Mortgage
or otherwise to comply with any applicable laws regarding
assumptions or the
transfer of the Mortgaged Property to such Person; provided,
however, none of
such terms and requirements shall either (i) both (A) constitute a
"significant
modification" effecting an exchange or reissuance of such Mortgage
Loan under
the REMIC Provisions and (B) cause any portion of any REMIC formed
under the
Series Supplement to fail to qualify as a REMIC under the Code or
(subject to
Section 10.01(f)), result in the imposition of any tax on
"prohibited
transactions" or (ii) constitute "contributions" after the start-up
date under
the REMIC Provisions. The Master Servicer shall execute and deliver
such
documents only if it reasonably determines that (i) its execution
and delivery
thereof will not conflict with or violate any terms of this
Agreement or cause
the unpaid balance and interest on the Mortgage Loan to be
uncollectible in
whole or in part, (ii) any required consents of insurers under any
Required
Insurance Policies have been obtained and (iii) subsequent to the
closing of the
transaction involving the assumption or transfer (A) the Mortgage
Loan will
continue to be secured by a first mortgage lien pursuant to the
terms of the
Mortgage, (B) such transaction will not adversely affect the
coverage under any
Required Insurance Policies, (C) the Mortgage Loan will fully
amortize over the
remaining term thereof, (D) no material term of the Mortgage Loan
(including the
interest rate on the Mortgage Loan) will be altered nor will the
term of the
Mortgage Loan be changed and (E) if the seller/transferor of the
Mortgaged
Property is to be released from liability on the Mortgage Loan,
such release
will not (based on the Master Servicer's or Subservicer's good
faith
determination) adversely affect the collectability of the Mortgage
Loan. Upon
receipt of appropriate instructions from the Master Servicer in
accordance with
the foregoing, the Trustee shall execute any necessary instruments
for such
assumption or substitution of liability as directed in writing by
the Master
Servicer. Upon the closing of the transactions contemplated by such
documents,
the Master Servicer shall cause the originals or true and correct
copies of the
assumption agreement, the release (if any), or the modification or
supplement to
the Mortgage Note or Mortgage to be delivered to the Trustee or the
Custodian
and deposited with the Mortgage File for such Mortgage Loan. Any
fee collected
by the Master Servicer or such related Subservicer for entering
into an
assumption or substitution of liability agreement will be retained
by the Master
Servicer or such Subservicer as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may
be,
shall be entitled to approve a request from a Mortgagor for a
partial release of
the related Mortgaged Property, the granting of an easement thereon
in favor of
another Person, any alteration or demolition of the related
Mortgaged Property
(or, with respect to a Cooperative Loan, the related Cooperative
Apartment)
without any right of reimbursement or other similar matters if it
has
determined, exercising its good faith business judgment in the same
manner as it
would if it were the owner of the related Mortgage Loan, that the
security for,
and the timely and full collectability of, such Mortgage Loan would
not be
adversely affected thereby and that any portion of any REMIC formed
under the
Series Supplement would not fail to continue to qualify as a REMIC
under the
Code as a result thereof and (subject to Section 10.01(f)) that no
tax on
"prohibited transactions" or "contributions" after the startup day
would be
imposed on any such REMIC as a result thereof. Any fee collected by
the Master
Servicer or the related Subservicer
57
for processing such a request will be retained by the Master
Servicer or such
Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this
Agreement,
the Trustee and Master Servicer shall be entitled to approve an
assignment in
lieu of satisfaction with respect to any Mortgage Loan, provided
the obligee
with respect to such Mortgage Loan following such proposed
assignment provides
the Trustee and Master Servicer with a "Lender Certification for
Assignment of
Mortgage Loan" in the form attached hereto as Exhibit M, in form
and substance
satisfactory to the Trustee and Master Servicer, providing the
following: (i)
that the substance of the assignment is, and is intended to be, a
refinancing of
such Mortgage; (ii) that the Mortgage Loan following the proposed
assignment
will have a rate of interest at least 0.25 percent below or above
the rate of
interest on such Mortgage Loan prior to such proposed assignment;
and (iii) that
such assignment is at the request of the borrower under the related
Mortgage
Loan. Upon approval of an assignment in lieu of satisfaction with
respect to any
Mortgage Loan, the Master Servicer shall receive cash in an amount
equal to the
unpaid principal balance of and accrued interest on such Mortgage
Loan and the
Master Servicer shall treat such amount as a Principal Prepayment
in Full with
respect to such Mortgage Loan for all purposes hereof.
Section 3.14 Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise
comparably
convert (which may include an REO Acquisition) the ownership of
properties
securing such of the Mortgage Loans as come into and continue in
default and as
to which no satisfactory arrangements can be made for collection of
delinquent
payments pursuant to Section 3.07. Alternatively, the Master
Servicer may take
other actions in respect of a defaulted Mortgage Loan, which may
include (i)
accepting a short sale (a payoff of the Mortgage Loan for an amount
less than
the total amount contractually owed in order to facilitate a sale
of the
Mortgaged Property by the Mortgagor) or permitting a short
refinancing (a payoff
of the Mortgage Loan for an amount less than the total amount
contractually owed
in order to facilitate refinancing transactions by the Mortgagor
not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment
plan or (iii)
agreeing to a modification in accordance with Section 3.07. In
connection with
such foreclosure or other conversion, the Master Servicer shall,
consistent with
Section 3.11, follow such practices and procedures as it shall deem
necessary or
advisable, as shall be normal and usual in its general mortgage
servicing
activities and as shall be required or permitted by the Program
Guide; provided
that the Master Servicer shall not be liable in any respect
hereunder if the
Master Servicer is acting in connection with any such foreclosure
or other
conversion in a manner that is consistent with the provisions of
this Agreement.
The Master Servicer, however, shall not be required to expend its
own funds or
incur other reimbursable charges in connection with any
foreclosure, or
attempted foreclosure which is not completed, or towards the
restoration of any
property unless it shall determine (i) that such restoration and/or
foreclosure
will increase the proceeds of liquidation of the Mortgage Loan to
Holders of
Certificates of one or more Classes after reimbursement to itself
for such
expenses or charges and (ii) that such expenses or charges will be
recoverable
to it through Liquidation Proceeds, Insurance Proceeds, or REO
Proceeds
(respecting which it shall have priority for purposes of
withdrawals from the
Custodial Account pursuant to Section 3.10, whether or not such
expenses and
charges are actually recoverable from related Liquidation Proceeds,
Insurance
Proceeds or REO Proceeds). In the event of such a
58
determination by the Master Servicer pursuant to this Section
3.14(a), the
Master Servicer shall be entitled to reimbursement of such amounts
pursuant to
Section 3.10.
In addition to the foregoing, the Master Servicer shall use its
best
reasonable efforts to realize upon any Additional Collateral for
such of the
Additional Collateral Loans as come into and continue in default
and as to which
no satisfactory arrangements can be made for collection of
delinquent payments
pursuant to Section 3.07; provided that the Master Servicer shall
not, on behalf
of the Trustee, obtain title to any such Additional Collateral as a
result of or
in lieu of the disposition thereof or otherwise; and provided
further that (i)
the Master Servicer shall not proceed with respect to such
Additional Collateral
in any manner that would impair the ability to recover against the
related
Mortgaged Property, and (ii) the Master Servicer shall proceed with
any REO
Acquisition in a manner that preserves the ability to apply the
proceeds of such
Additional Collateral against amounts owed under the defaulted
Mortgage Loan.
Any proceeds realized from such Additional Collateral (other than
amounts to be
released to the Mortgagor or the related guarantor in accordance
with procedures
that the Master Servicer would follow in servicing loans held for
its own
account, subject to the terms and conditions of the related
Mortgage and
Mortgage Note and to the terms and conditions of any security
agreement,
guarantee agreement, mortgage or other agreement governing the
disposition of
the proceeds of such Additional Collateral) shall be deposited in
the Custodial
Account, subject to withdrawal pursuant to Section 3.10. Any other
payment
received by the Master Servicer in respect of such Additional
Collateral shall
be deposited in the Custodial Account subject to withdrawal
pursuant to Section
3.10.
For so long as the Master Servicer is the Master Servicer under the
Credit
Support Pledge Agreement, the Master Servicer shall perform its
obligations
under the Credit Support Pledge Agreement in accordance with such
Agreement and
in a manner that is in the best interests of the
Certificateholders. Further,
the Master Servicer shall use its best reasonable efforts to
realize upon any
Pledged Assets for such of the Pledged Asset Loans as come into and
continue in
default and as to which no satisfactory arrangements can be made
for collection
of delinquent payments pursuant to Section 3.07; provided that the
Master
Servicer shall not, on behalf of the Trustee, obtain title to any
such Pledged
Assets as a result of or in lieu of the disposition thereof or
otherwise; and
provided further that (i) the Master Servicer shall not proceed
with respect to
such Pledged Assets in any manner that would impair the ability to
recover
against the related Mortgaged Property, and (ii) the Master
Servicer shall
proceed with any REO Acquisition in a manner that preserves the
ability to apply
the proceeds of such Pledged Assets against amounts owed under the
defaulted
Mortgage Loan. Any proceeds realized from such Pledged Assets
(other than
amounts to be released to the Mortgagor or the related guarantor in
accordance
with procedures that the Master Servicer would follow in servicing
loans held
for its own account, subject to the terms and conditions of the
related Mortgage
and Mortgage Note and to the terms and conditions of any security
agreement,
guarantee agreement, mortgage or other agreement governing the
disposition of
the proceeds of such Pledged Assets) shall be deposited in the
Custodial
Account, subject to withdrawal pursuant to Section 3.10. Any other
payment
received by the Master Servicer in respect of such Pledged Assets
shall be
deposited in the Custodial Account subject to withdrawal pursuant
to Section
3.10.
Concurrently with the foregoing, the Master Servicer may pursue any
remedies that may be available in connection with a breach of a
representation
and warranty with respect to any
59
such Mortgage Loan in accordance with Sections 2.03 and 2.04.
However, the
Master Servicer is not required to continue to pursue both
foreclosure (or
similar remedies) with respect to the Mortgage Loans and remedies
in connection
with a breach of a representation and warranty if the Master
Servicer determines
in its reasonable discretion that one such remedy is more likely to
result in a
greater recovery as to the Mortgage Loan. Upon the occurrence of a
Cash
Liquidation or REO Disposition, following the deposit in the
Custodial Account
of all Insurance Proceeds, Liquidation Proceeds and other payments
and
recoveries referred to in the definition of "Cash Liquidation" or
"REO
Disposition," as applicable, upon receipt by the Trustee of written
notification
of such deposit signed by a Servicing Officer, the Trustee or any
Custodian, as
the case may be, shall release to the Master Servicer the related
Mortgage File
and the Trustee shall execute and deliver such instruments of
transfer or
assignment prepared by the Master Servicer, in each case without
recourse, as
shall be necessary to vest in the Master Servicer or its designee,
as the case
may be, the related Mortgage Loan, and thereafter such Mortgage
Loan shall not
be part of the Trust Fund. Notwithstanding the foregoing or any
other provision
of this Agreement, in the Master Servicer's sole discretion with
respect to any
defaulted Mortgage Loan or REO Property as to either of the
following
provisions, (i) a Cash Liquidation or REO Disposition may be deemed
to have
occurred if substantially all amounts expected by the Master
Servicer to be
received in connection with the related defaulted Mortgage Loan or
REO Property
have been received, and (ii) for purposes of determining the amount
of any
Liquidation Proceeds, Insurance Proceeds, REO Proceeds or any other
unscheduled
collections or the amount of any Realized Loss, the Master Servicer
may take
into account minimal amounts of additional receipts expected to be
received or
any estimated additional liquidation expenses expected to be
incurred in
connection with the related defaulted Mortgage Loan or REO
Property.
(b) If title to any Mortgaged Property is acquired by the Trust
Fund as an
REO Property by foreclosure or by deed in lieu of foreclosure, the
deed or
certificate of sale shall be issued to the Trustee or to its
nominee on behalf
of Certificateholders. Notwithstanding any such acquisition of
title and
cancellation of the related Mortgage Loan, such REO Property shall
(except as
otherwise expressly provided herein) be considered to be an
Outstanding Mortgage
Loan held in the Trust Fund until such time as the REO Property
shall be sold.
Consistent with the foregoing for purposes of all calculations
hereunder so long
as such REO Property shall be considered to be an Outstanding
Mortgage Loan it
shall be assumed that, notwithstanding that the indebtedness
evidenced by the
related Mortgage Note shall have been discharged, such Mortgage
Note and the
related amortization schedule in effect at the time of any such
acquisition of
title (after giving effect to any previous Curtailments and before
any
adjustment thereto by reason of any bankruptcy or similar
proceeding or any
moratorium or similar waiver or grace period) remain in effect.
(c) If the Trust Fund acquires any REO Property as aforesaid or
otherwise
in connection with a default or imminent default on a Mortgage
Loan, the Master
Servicer on behalf of the Trust Fund shall dispose of such REO
Property as soon
as practicable, giving due consideration to the interests of the
Certificateholders, but in all cases within three full years after
the taxable
year of its acquisition by the Trust Fund for purposes of Section
860G(a)(8) of
the Code (or such shorter period as may be necessary under
applicable state
(including any state in which such property is located) law to
maintain the
status of any portion of any REMIC formed under the Series
Supplement as a REMIC
under applicable state law and avoid taxes resulting from such
property failing
to be foreclosure property under applicable state law) or, at the
60
expense of the Trust Fund, request, more than 60 days before the
day on which
such grace period would otherwise expire, an extension of such
grace period
unless the Master Servicer (subject to Section 10.01(f)) obtains
for the Trustee
an Opinion of Counsel, addressed to the Trustee and the Master
Servicer, to the
effect that the holding by the Trust Fund of such REO Property
subsequent to
such period will not result in the imposition of taxes on
"prohibited
transactions" as defined in Section 860F of the Code or cause any
REMIC formed
under the Series Supplement to fail to qualify as a REMIC (for
federal (or any
applicable State or local) income tax purposes) at any time that
any
Certificates are outstanding, in which case the Trust Fund may
continue to hold
such REO Property (subject to any conditions contained in such
Opinion of
Counsel). The Master Servicer shall be entitled to be reimbursed
from the
Custodial Account for any costs incurred in obtaining such Opinion
of Counsel,
as provided in Section 3.10. Notwithstanding any other provision of
this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or
allowed to continue to be rented) or otherwise used by or on behalf
of the Trust
Fund in such a manner or pursuant to any terms that would (i) cause
such REO
Property to fail to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code or (ii) subject the Trust Fund to
the imposition
of any federal income taxes on the income earned from such REO
Property,
including any taxes imposed by reason of Section 860G(c) of the
Code, unless the
Master Servicer has agreed to indemnify and hold harmless the Trust
Fund with
respect to the imposition of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or
purchase or
repurchase of any Mortgage Loan pursuant to the terms of this
Agreement, as well
as any recovery resulting from a collection of Liquidation
Proceeds, Insurance
Proceeds or REO Proceeds, will be applied in the following order of
priority:
first, to reimburse the Master Servicer or the related Subservicer
in accordance
with Section 3.10(a)(ii); second, to the Certificateholders to the
extent of
accrued and unpaid interest on the Mortgage Loan, and any related
REO Imputed
Interest, at the Net Mortgage Rate (or the Modified Net Mortgage
Rate in the
case of a Modified Mortgage Loan) to the Due Date prior to the
Distribution Date
on which such amounts are to be distributed; third, to the
Certificateholders as
a recovery of principal on the Mortgage Loan (or REO Property);
fourth, to all
Servicing Fees and Subservicing Fees payable therefrom (and the
Master Servicer
and the Subservicer shall have no claims for any deficiencies with
respect to
such fees which result from the foregoing allocation); and fifth,
to Foreclosure
Profits.
(e) In the event of a default on a Mortgage Loan one or more of
whose
obligors is not a United States Person, in connection with any
foreclosure or
acquisition of a deed in lieu of foreclosure (together,
"foreclosure") in
respect of such Mortgage Loan, the Master Servicer will cause
compliance with
the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or
any successor
thereto) necessary to assure that no withholding tax obligation
arises with
respect to the proceeds of such foreclosure except to the extent,
if any, that
proceeds of such foreclosure are required to be remitted to the
obligors on such
Mortgage Loan.
Section 3.15 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan, or
upon the receipt by the Master Servicer of a notification that
payment in full
will be escrowed in a manner customary for such purposes, the
Master Servicer
will immediately notify the Trustee (if it holds
61
the related Mortgage File) or the Custodian by a certification of a
Servicing
Officer (which certification shall include a statement to the
effect that all
amounts received or to be received in connection with such payment
which are
required to be deposited in the Custodial Account pursuant to
Section 3.07 have
been or will be so deposited), substantially in one of the forms
attached hereto
as Exhibit F, or, in the case of the Custodian, an electronic
request in a form
acceptable to the Custodian, requesting delivery to it of the
Mortgage File.
Within two Business Days of receipt of such certification and
request, the
Trustee shall release, or cause the Custodian to release, the
related Mortgage
File to the Master Servicer. The Master Servicer is authorized to
execute and
deliver to the Mortgagor the request for reconveyance, deed of
reconveyance or
release or satisfaction of mortgage or such instrument releasing
the lien of the
Mortgage, together with the Mortgage Note with, as appropriate,
written evidence
of cancellation thereon and to cause the removal from the
registration on the
MERS(R) System of such Mortgage and to execute and deliver, on
behalf of the
Trustee and the Certificateholders or any of them, any and all
instruments of
satisfaction or cancellation or of partial or full release. No
expenses incurred
in connection with any instrument of satisfaction or deed of
reconveyance shall
be chargeable to the Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or
foreclosure of
any Mortgage Loan, the Master Servicer shall deliver to the
Custodian, with a
copy to the Trustee, a certificate of a Servicing Officer
substantially in one
of the forms attached as Exhibit F hereto, or, in the case of the
Custodian, an
electronic request in a form acceptable to the Custodian,
requesting that
possession of all, or any document constituting part of, the
Mortgage File be
released to the Master Servicer and certifying as to the reason for
such release
and that such release will not invalidate any insurance coverage
provided in
respect of the Mortgage Loan under any Required Insurance Policy.
Upon receipt
of the foregoing, the Trustee shall deliver, or cause the Custodian
to deliver,
the Mortgage File or any document therein to the Master Servicer.
The Master
Servicer shall cause each Mortgage File or any document therein so
released to
be returned to the Trustee, or the Custodian as agent for the
Trustee when the
need therefor by the Master Servicer no longer exists, unless (i)
the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage
Loan have been deposited in the Custodial Account or (ii) the
Mortgage File or
such document has been delivered directly or through a Subservicer
to an
attorney, or to a public trustee or other public official as
required by law,
for purposes of initiating or pursuing legal action or other
proceedings for the
foreclosure of the Mortgaged Property either judicially or
non-judicially, and
the Master Servicer has delivered directly or through a Subservicer
to the
Trustee a certificate of a Servicing Officer certifying as to the
name and
address of the Person to which such Mortgage File or such document
was delivered
and the purpose or purposes of such delivery. In the event of the
liquidation of
a Mortgage Loan, the Trustee shall deliver the Request for Release
with respect
thereto to the Master Servicer upon deposit of the related
Liquidation Proceeds
in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf
shall
execute and deliver to the Master Servicer, if necessary, any court
pleadings,
requests for trustee's sale or other documents necessary to the
foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal
action brought
to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or
rights
provided by the Mortgage Note or Mortgage or otherwise available at
law or in
equity. Together with such documents or pleadings (if signed by the
Trustee),
the Master Servicer shall deliver to
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the Trustee a certificate of a Servicing Officer requesting that
such pleadings
or documents be executed by the Trustee and certifying as to the
reason such
documents or pleadings are required and that the execution and
delivery thereof
by the Trustee will not invalidate any insurance coverage under any
Required
Insurance Policy or invalidate or otherwise affect the lien of the
Mortgage,
except for the termination of such a lien upon completion of the
foreclosure or
trustee's sale.
Section 3.16 Servicing and Other Compensation; Compensating
Interest.
(a) The Master Servicer, as compensation for its activities
hereunder,
shall be entitled to receive on each Distribution Date the amounts
provided for
by clauses (iii), (iv), (v) and (vi) of Section 3.10(a), subject to
clause (e)
below. The amount of servicing compensation provided for in such
clauses shall
be accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the
event that
Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of
amounts
reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect
of a Cash
Liquidation or REO Disposition exceed the unpaid principal balance
of such
Mortgage Loan plus unpaid interest accrued thereon (including REO
Imputed
Interest) at a per annum rate equal to the related Net Mortgage
Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan), the Master
Servicer shall be entitled to retain therefrom and to pay to itself
and/or the
related Subservicer, any Foreclosure Profits and any Servicing Fee
or
Subservicing Fee considered to be accrued but unpaid.
(b) Additional servicing compensation in the form of prepayment
charges,
assumption fees, late payment charges, investment income on amounts
in the
Custodial Account or the Certificate Account or otherwise shall be
retained by
the Master Servicer or the Subservicer to the extent provided
herein, subject to
clause (e) below.
(c) The Master Servicer shall be required to pay, or cause to be
paid, all
expenses incurred by it in connection with its servicing activities
hereunder
(including payment of premiums for the Primary Insurance Policies,
if any, to
the extent such premiums are not required to be paid by the related
Mortgagors,
and the fees and expenses of the Trustee and any Custodian) and
shall not be
entitled to reimbursement therefor except as specifically provided
in Sections
3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation
may not
be transferred in whole or in part except in connection with the
transfer of all
of its responsibilities and obligations of the Master Servicer
under this
Agreement.
(e) Notwithstanding any other provision herein, the amount of
servicing
compensation that the Master Servicer shall be entitled to receive
for its
activities hereunder for the period ending on each Distribution
Date shall be
reduced (but not below zero) by an amount equal to Compensating
Interest (if
any) for such Distribution Date. Such reduction shall be applied
during such
period as follows: first, to any Servicing Fee or Subservicing Fee
to which the
Master Servicer is entitled pursuant to Section 3.10(a)(iii) and
second, to any
income or gain realized from any investment of funds held in the
Custodial
Account or the Certificate Account to which the Master Servicer is
entitled
pursuant to Sections 3.07(c) or 4.01(b), respectively. In making
such reduction,
the Master Servicer (i) will not withdraw from the Custodial
Account
63
any such amount representing all or a portion of the Servicing Fee
to which it
is entitled pursuant to Section 3.10(a)(iii) and (ii) will not
withdraw from the
Custodial Account or Certificate Account any such amount to which
it is entitled
pursuant to Section 3.07(c) or 4.01(b).
Section 3.17 Reports to the Trustee and the Company.
Not later than fifteen days after each Distribution Date, the
Master
Servicer shall forward to the Trustee and the Company a statement,
certified by
a Servicing Officer, setting forth the status of the Custodial
Account as of the
close of business on such Distribution Date as it relates to the
Mortgage Loans
and showing, for the period covered by such statement, the
aggregate of deposits
in or withdrawals from the Custodial Account in respect of the
Mortgage Loans
for each category of deposit specified in Section 3.07 and each
category of
withdrawal specified in Section 3.10.
Section 3.18 Annual Statement as to Compliance.
The Master Servicer will deliver to the Company, the Trustee and
any
Certificate Insurer on or before the earlier of (a) March 31 of
each year or (b)
with respect to any calendar year during which the Company's annual
report on
Form 10-K is required to be filed in accordance with the Exchange
Act and the
rules and regulations of the Commission, the date on which the
annual report on
Form 10-K is required to be filed in accordance with the Exchange
Act and the
rules and regulations of the Commission, a servicer compliance
certificate,
signed by an authorized officer of the Master Servicer, as
described in Item
1123 of Regulation AB, to the effect that:
(i) A review of the Master Servicer's activities during the
reporting
period and of its performance under this Agreement has been made
under such
officer's supervision.
(ii) To the best of such officer's knowledge, based on such review,
the
Master Servicer has fulfilled all of its obligations under this
Agreement in all
materials respects throughout the reporting period or, if there has
been a
failure to fulfill any such obligation in any material respect,
specifying each
such failure known to such officer and the nature and status
thereof.
The Master Servicer shall use commercially reasonable efforts to
obtain
from all other parties participating in the servicing function any
additional
certifications required under Item 1123 of Regulation AB to the
extent required
to be included in a Report on Form 10-K; provided, however, that a
failure to
obtain such certifications shall not be a breach of the Master
Servicer's duties
hereunder if any such party fails to deliver such a certification.
Section 3.19 Annual Independent Public Accountants' Servicing
Report.
On or before the earlier of (a) March 31 of each year or (b) with
respect
to any calendar year during which the Company's annual report on
Form 10-K is
required to be filed in accordance with the Exchange Act and the
rules and
regulations of the Commission, the date on which the annual report
on Form 10-K
is required to be filed in accordance with the Exchange Act and the
rules and
regulations of the Commission, the Master Servicer at its expense
shall cause a
firm of independent public accountants, which shall be members of
the American
64
Institute of Certified Public Accountants, to furnish to the
Company and the
Trustee the attestation required under Item 1122(b) of Regulation
AB. In
rendering such statement, such firm may rely, as to matters
relating to the
direct servicing of mortgage loans by Subservicers, upon comparable
statements
for examinations conducted by independent public accountants
substantially in
accordance with standards established by the American Institute of
Certified
Public Account
