EXECUTION COPY
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
Dated as of September 1, 2006,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of March 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
SERIES 2006-QO7
TABLE OF CONTENTS
(continued)
PAGE
-iv-
TABLE OF CONTENTS
PAGE
-v-
ARTICLE I
DEFINITIONS................................................................................6
Section 1.01.
Definitions.......................................................................6
Section 1.02.
Determination of
LIBOR...........................................................42
Section 1.03.
Determination of
MTA.............................................................43
Section 1.04.
Use of Words and
Phrases.........................................................43
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES...........................43
Section 2.01.
Conveyance of Mortgage
Loans.....................................................43
Section 2.02.
Acceptance by
Trustee............................................................47
Section 2.03.
Representations, Warranties and Covenants of the Master Servicer
and the Company.49
Section 2.04.
Representations and Warranties of
Sellers........................................52
Section 2.05.
Execution and Authentication of Certificates/Issuance of
Certificates Evidencing Interests in
REMIC I and REMIC II
Certificates................................................52
Section 2.06.
Conveyance of Uncertificated Regular Interests; Acceptance by the
Trustee........53
Section 2.07.
Issuance of Certificates Evidencing Interest in REMIC
III........................53
Section 2.08.
Purposes and Powers of the
Trust.................................................53
Section 2.09.
Agreement Regarding Ability to
Disclose..........................................54
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............................................55
Section 3.01
Master Servicer to Act as
Servicer...............................................55
Section 3.02
Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers'
and Sellers'
Obligations.........................................................55
Section 3.03
Successor
Subservicers...........................................................55
Section 3.04
Liability of the Master
Servicer.................................................55
Section 3.05
No Contractual Relationship Between Subservicer and Trustee or
Certificateholders55
Section 3.06
Assumption or Termination of Subservicing Agreements by
Trustee..................55
Section 3.07
Collection of Certain Mortgage Loan Payments; Deposit to Custodial
Account.......55
Section 3.08.
Subservicing Accounts; Servicing
Accounts........................................57
Section 3.09.
Access to Certain Documentation and
Information Regarding the Mortgage Loans....57
Section 3.10.
Permitted Withdrawals from the Custodial
Account.................................57
Section 3.11.
Maintenance of the Primary Insurance
Policies; Collections Thereunder...........57
Section 3.12.
Maintenance of Fire Insurance and
Omissions and Fidelity Coverage...............57
Section 3.13.
Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain
Assignments......................................................................57
Section 3.14.
Realization Upon Defaulted Mortgage
Loans........................................57
Section 3.15.
Trustee to Cooperate; Release of Mortgage
Files..................................57
Section 3.16.
Servicing and Other Compensation; Compensating
Interest..........................59
Section 3.17.
Reports to the Trustee and the
Company...........................................59
Section 3.18.
Annual Statement as to
Compliance................................................59
Section 3.19.
Annual Independent Public Accountants' Servicing
Report..........................59
Section 3.20.
Rights of the Company in Respect of the Master
Servicer..........................59
Section 3.21.
Administration of Buydown
Funds..................................................59
Section 3.22
Advance
Facility.................................................................59
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS............................................................60
Section 4.01.
Certificate
Account..............................................................60
Section 4.02.
Distributions....................................................................60
Section 4.03.
Statements to Certificateholders; Statements to the Rating
Agencies; Exchange Act Reporting 67
Section 4.04.
Distribution of Reports to the Trustee and the Company; Advances by
the Master Servicer
67
Section 4.05.
Allocation of Realized
Losses....................................................68
Section 4.06.
Reports of Foreclosures and Abandonment of Mortgaged
Property....................70
Section 4.07.
Optional Purchase of Defaulted Mortgage
Loans....................................70
Section 4.08.
Surety
Bond......................................................................74
Section 4.09.
Interest Shortfall Reserve
Fund..................................................74
Section 4.10.
Yield Maintenance
Agreement......................................................74
ARTICLE V
THE
CERTIFICATES..........................................................................76
ARTICLE VI
THE COMPANY AND THE MASTER
SERVICER.......................................................77
ARTICLE VII
DEFAULT...................................................................................78
ARTICLE VIII
CONCERNING THE
TRUSTEE....................................................................79
ARTICLE IX
TERMINATION...............................................................................81
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.............................81
Section 9.02
Additional Termination
Requirements..............................................85
Section 9.03
Termination of Multiple
REMICs...................................................85
ARTICLE X
REMIC
PROVISIONS..........................................................................86
Section 10.01.
REMIC
Administration.............................................................86
Section 10.02.
Master Servicer; REMIC Administrator and Trustee
Indemnification.................86
Section 10.03.
Designation of
REMICs............................................................86
Section 10.04.
Distributions on the REMIC I Regular
Interests...................................86
Section 10.05.
Compliance with Withholding
Requirements.........................................88
ARTICLE XI
MISCELLANEOUS
PROVISIONS..................................................................88
Section 11.01.
Amendment........................................................................88
Section 11.02.
Recordation of Agreement;
Counterparts...........................................88
Section 11.03.
Limitation on Rights of
Certificateholders.......................................88
Section 11.04.
Governing
Law....................................................................88
Section 11.05.
Notices..........................................................................88
Section 11.06.
Required Notices to Rating Agency and
Subservicer................................89
Section 11.07.
Severability of
Provisions.......................................................89
Section 11.08.
Supplemental Provisions for
Resecuritization.....................................89
Section 11.09.
Allocation of Voting
Rights......................................................89
Section 11.10.
No
Petition......................................................................89
ARTICLE XII
COMPLIANCE WITH REGULATION
AB.............................................................90
EXHIBITS
Exhibit One:
Mortgage Loan Schedule
Exhibit Two:
Information to be Included in Monthly Distribution Date Statement
Exhibit Three:
Standard Terms of Pooling and Servicing Agreement, dated as of
March 1, 2006
90
81
This is a Series
Supplement,
dated as of September 1, 2006 (the "Series
Supplement"),
to the Standard Terms of Pooling and
Servicing
Agreement,
dated as of March 1, 2006 and attached as Exhibit
Three hereto (the
"Standard
Terms" and,
together with this
Series
Supplement,
the "Pooling and Servicing
Agreement" or "Agreement"),
among
RESIDENTIAL
ACCREDIT LOANS,
INC., as the company
(together with its permitted
successors and assigns,
the "Company"),
RESIDENTIAL FUNDING
CORPORATION,
as master servicer (together
with its permitted
successors and assigns,
the "Master
Servicer"),
and DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as Trustee (together
with its permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell mortgage asset-backed pass-through
certificates (collectively,
the "Certificates"),
to be issued
hereunder in multiple classes, which in the aggregate will evidence
the entire beneficial ownership interest in the Mortgage Loans.
The terms and
provisions
of the
Standard
Terms are hereby
incorporated
by
reference
herein as though set forth in full
herein.
If any term or
provision
contained
herein
shall
conflict
with or be
inconsistent
with any
provision
contained in the
Standard Terms, the terms and provisions of this Series
Supplement shall govern.
All capitalized
terms not otherwise
defined herein
shall have the meanings set forth in the Standard
Terms.
The Pooling and
Servicing
Agreement
shall be dated as of the date of this
Series Supplement.
REMIC I
As provided herein,
the REMIC
Administrator
will make an election to treat the segregated pool of assets
consisting of the
Mortgage Loans and certain other related assets
subject to this
Agreement
(but
excluding the Interest
Shortfall
Reserve Fund, the
Yield Maintenance
Agreement Reserve Fund, the Yield Maintenance Floor Agreement
Reserve Fund, the Yield Maintenance
Agreement and the
Yield Maintenance Floor Agreement) as a real estate mortgage
investment conduit (a "REMIC") for federal income tax purposes,
and such
segregated
pool of assets will be
designated
as "REMIC I." The Class R-I
Certificates
will
represent
the sole Class of "residual
interests"
in REMIC I for purposes of the REMIC
Provisions
(as defined
herein) under
federal
income tax law. The following
table
irrevocably sets forth the designation,
remittance rate (the
"Uncertificated
REMIC I Pass-Through Rate") and initial
Uncertificated
Principal
Balance for each of the "regular
interests" in REMIC I (the "REMIC I Regular
Interests").
The "latest
possible
maturity
date"
(determined
solely for
purposes
of
satisfying
Treasury
regulation
Section
1.860G-1(a)(4)(iii))
for each REMIC I Regular
Interest shall be the Maturity Date.
None of the REMIC I Regular Interests will be certificated.
UNCERTIFICATED
REMIC I
-------------------------
INITIAL UNCERTIFICATED
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
LT1
Variable(1)
$1,548,950,650.37
September 25, 2046
LT2
Variable(1)
$77,209.39
September 25, 2046
LT3
0.00%
$77,809.75
September 25, 2046
LT4
Variable(1)
$77,809.75
September 25, 2046
____________
(1)
Calculated as provided in the definition of Uncertificated REMIC I
Pass-Through Rate.
REMIC II
As provided
herein,
the REMIC
Administrator
will elect to treat the
segregated
pool of assets
consisting of the REMIC I
Regular
Interests as a REMIC for federal
income tax purposes,
and such
segregated
pool of assets will be designated as "REMIC II."
The Class R-II
Certificates
will
represent the sole Class of "residual
interests" in REMIC II for purposes of the REMIC
Provisions
(as defined
herein) under federal income tax law. The following table
irrevocably
sets forth the
designation,
remittance rate (the
"Uncertificated REMIC II Pass-Through Rate") and initial
Uncertificated
Principal Balance for each of the "regular interests" in REMIC
II (the "REMIC II Regular
Interests").
The "latest possible
maturity date"
(determined
solely for purposes of satisfying
Treasury
regulation
Section
1.860G-1(a)(4)(iii))
for each REMIC II Regular
Interest shall be the Maturity Date. None of the REMIC II Regular
Interests will be certificated.
UNCERTIFICATED
REMIC II
-------------------------
INITIAL UNCERTIFICATED
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
SB-IO and SB-PO
(1)
$7,751,403.86
September 25, 2046
I-A-1
Variable(2)
$461,703,000.00
September 25, 2046
I-A-2
Variable(2)
$57,713,000.00
September 25, 2046
I-A-3
Variable(2)
$57,713,000.00
September 25, 2046
II-A-1
Variable(2)
$335,962,000.00
September 25, 2046
II-A-2
Variable(2)
$41,995,000.00
September 25, 2046
II-A-3
Variable(2)
$41,995,000.00
September 25, 2046
III-A-1
Variable(2)
$156,605,000.00
September 25, 2046
III-A-2
Variable(2)
$179,768,000.00
September 25, 2046
III-A-3
Variable(2)
$37,954,000.00
September 25, 2046
III-A-4
Variable(2)
$41,591,000.00
September 25, 2046
M-1
Variable(2)
$30,229,000.00
September 25, 2046
M-2
Variable(2)
$27,904,000.00
September 25, 2046
M-3
Variable(2)
$9,300,000.00
September 25, 2046
M-4
Variable(2)
$22,478,000.00
September 25, 2046
M-5
Variable(2)
$16,277,000.00
September 25, 2046
M-6
Variable(2)
$10,077,000.00
September 25, 2046
M-7
Variable(2)
$13,176,000.00
September 25, 2046
____________
(1)
The Class SB
Certificates will accrue interest as described in the definition of
Accrued Certificate
Interest.
The Class SB
Certificates will not accrue interest on their Certificate
Principal
Balance.
Amounts paid, or deemed paid, to the Class SB
Certificates shall be deemed to first be paid to REMIC II Regular
Interests SB-IO and SB-PO as set forth herein.
(2)
Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
REMIC III
As provided
herein,
the REMIC
Administrator
will elect to treat the segregated
pool of assets
consisting of the REMIC II
Regular
Interests as a REMIC for federal income tax purposes,
and such
segregated
pool of assets will be designated as "REMIC III."
The Class R-III
Certificates
will represent the sole Class of "residual
interests" in REMIC III for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets
forth the designation,
type,
Pass-Through Rate,
aggregate initial
Certificate Principal Balance or Uncertificated
Principal Balance, as applicable,
Maturity Date, initial ratings and certain features
for each of the "regular
interests"
in REMIC III
(the
"REMIC III
Regular
Interests")
and the Class P
Certificates.
The "latest
possible maturity date" (determined solely for purposes of
satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii))
for each REMIC
III Regular Interest shall be the Maturity Date.
REMIC III Regular Interests SB-IO and SB-PO will not be
certificated.
AGGREGATE
INITIAL
PASS-THROUGH
CERTIFICATE
MATURITY
S&P/
MINIMUM
DESIGNATION
RATE
PRINCIPAL BALANCE
FEATURES
DATE
MOODY'S/FITCH
DENOMINATIONS
Adjustable
$461,703,000.00
Super Senior/
Class I-A-1
Rate(1)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
$100,000.00
Class I-A-2
Adjustable
$57,713,000.00
Senior Mezzanine/
$100,000.00
Rate(1)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Class I-A-3
Adjustable
$57,713,000.00
Senior Support/
$100,000.00
Rate(1)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Class II-A-1
Adjustable
$335,962,000.00
Super Senior/
$100,000.00
Rate(1)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Class II-A-2
Adjustable
$41,995,000.00
Senior Mezzanine/
$100,000.00
Rate(1)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Class II-A-3
Adjustable
$41,995,000.00
Senior Support/
$100,000.00
Rate(1)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Class III-A-1
Adjustable
$156,605,000.00
Super Senior/
$100,000.00
Rate(2)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Class III-A-2
Adjustable
$179,768,000.00
Super Senior/
$100,000.00
Rate(2)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Class III-A-3
Adjustable
$37,954,000.00
Super Senior/
$100,000.00
Rate(2)(3)
Adjustable Rate
September 25, 2046
AAA/Aaa/AAA
Adjustable
$41,591,000.00
Senior Support/
Class III-A-4
Rate(2)(3)
Adjustable
September 25, 2046
AAA/Aaa/AAA
$100,000.00
Rate
$0.00
Senior/Fixed
Class X1
Rate/ Interest
September 25, 2046
AAA/Aaa/AAA
0.90%
Only
$2,000,000.00
$0.00
Senior/Fixed
Class X2
1.27%
Rate/ Interest
September 25, 2046
AAA/Aaa/AAA
$2,000,000.00
Only
$0.00
Senior/Fixed
Class X3
1.50%
Rate/ Interest
September 25, 2046
AAA/Aaa/AAA
$2,000,000.00
Only
Class M-1
Adjustable
$30,229,000.00
Mezzanine/Adjustable
AA+/Aaa/AA+
$100,000.00
Rate(2)(3)
Rate
September 25, 2046
Class M-2
Adjustable
$27,904,000.00
Mezzanine/Adjustable
AA/Aa1/AA+
$100,000.00
Rate(2)(3)
Rate
September 25, 2046
Class M-3
Adjustable
$9,300,000.00
Mezzanine/Adjustable
AA/Aa2/AA
$100,000.00
Rate(2)(3)
Rate
September 25, 2046
Class M-4
Adjustable
$22,478,000.00
Mezzanine/Adjustable
A+/A1/A+
$250,000.00
Rate(2)(3)
Rate
September 25, 2046
Class M-5
Adjustable
$16,277,000.00
Mezzanine/Adjustable
BBB+/A3/BBB+
$250,000.00
Rate(2)(3)
Rate
September 25, 2046
Class M-6
Adjustable
$10,077,000.00
Mezzanine/Adjustable
BBB-/Baa2/BBB
$250,000.00
Rate(2)(3)
Rate
September 25, 2046
Class M-7
Adjustable
$13,176,000.00
Mezzanine/Adjustable
BB/Ba2/BBB-
$250,000.00
Rate(2)(3)
Rate
September 25, 2046
--------------
SB-IO and
SB-PO
(4)
$7,751,403.86
Subordinate
September 25, 2046
N/R
N/A
N/A
N/A
Prepayment Charge
September 25, 2046
N/R
N/A
Class P(5)
(1)
The
REMIC
III
Regular
Interests,
ownership
of
which is
represented
by the
Class
I-A
Certificates
and
Class
II-A
Certificates,
will accrue
interest at a per annum rate equal to the lesser of (i) MTA plus
the related
Margin for such
Distribution
Date and (ii) the MTA Floaters Net Rate Cap.
(2)
The REMIC III Regular Interests,
ownership of which is represented by the Class III-A Certificates
and Class M
Certificates,
will accrue interest at a per annum rate equal to the lesser of (i)
LIBOR plus the related Margin for such
Distribution
Date and (ii)
the LIBOR Floaters Net Rate Cap.
(3)
The Class A
Certificates
and Class M Certificates
will also entitle their Holders to receive certain payments in
respect of
Basis Risk
Shortfalls
from Holders of the Class SB
Certificates
from amounts to which the Holders of the Class SB
Certificates
is
entitled and from amounts received under the Yield
Maintenance
Agreement,
Yield Maintenance Floor Agreement and, with respect to the
initial
Distribution
Date, certain payments in respect of the Interest Shortfall Reserve
Fund, which payments will not be part of the
entitlement of the REMIC III Regular Interests evidenced by such
Certificates.
(4)
The Class SB
Certificates will accrue interest as described in the definition of
Accrued Certificate
Interest.
The Class SB
Certificates
will not
accrue
interest
on their
Certificate
Principal
Balance.
Amounts
paid,
or deemed
paid,
to the Class SB
Certificates
shall be deemed to first be paid to REMIC II Regular
Interests
SB-IO and SB-PO.
Any
amounts
deemed
paid to REMIC II
Regular Interests SB-IO and SB-PO shall be deemed to be paid to
REMIC III Regular Interests SB-IO and SB-PO, respectively.
(5)
The Class P Certificates will not represent ownership of an
interest in any REMIC.
REMIC IV
As provided herein,
the REMIC
Administrator will make an election to treat the segregated pool of
assets consisting of REMIC
III
Regular
Interests
SB-IO and SB-PO as a REMIC for
federal
income
tax
purposes,
and such
segregated
pool of assets
will be
designated as "REMIC IV." The Class R-X
Certificates
will
represent the sole Class of "residual
interests" in REMIC IV for purposes
of the REMIC Provisions under federal income tax law. The following
table
irrevocably
sets forth the designation,
Pass-Through
Rate
and initial
Certificate
Principal
Balance for the single
"regular
interest"
in REMIC IV (the
"REMIC IV Regular
Interest").
The
"latest possible maturity date" (determined solely for purposes of
satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for the
REMIC IV Regular Interest shall be the Maturity Date.
INITIAL CERTIFICATE
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
SB
Variable(1)
September 25, 2046
$7,751,403.86
____________
(1)
The Class SB
Certificates will accrue interest as described in the definition of
Accrued Certificate
Interest.
The Class SB
Certificates will not accrue interest on their Certificate
Principal
Balance.
The REMIC IV Regular Interest will not have a
Pass-Through
Rate, but will be entitled to 100% of all amounts paid or deemed
paid on REMIC III Regular
Interests
SB-IO and
SB-PO.
The
Group I Loans
have an
aggregate
Cut-off
Date
Principal
Balance
equal to
$633,164,144.05.
The
Group I Loans
are
payment-option
adjustable-rate
first lien Mortgage Loans with a negative amortization feature
having terms to maturity at origination
or
modification
of generally not more than 40 years.
The Group II Loans have an aggregate
Cut-off Date
Principal
Balance equal to
$460,725,945.83.
The Group II Loans are payment option adjustable rate first lien
Mortgage Loans with a negative
amortization feature
having terms to maturity at
origination
or
modification
of generally not more than 40 years.
The Group III Loans have an aggregate
Cut-off Date Principal
Balance equal to
$456,301,313.98.
The Group III Loans are payment option
adjustable rate first lien Mortgage
Loans with a negative
amortization
feature
having terms to maturity at
origination
or
modification
of generally not more than 40
years.
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.
Accrued
Certificate
Interest:
With respect to each
Distribution
Date, an amount equal to (a) in the case of each Class of
Class A
Certificates
and Class M
Certificates,
interest
accrued
during the related
Interest
Accrual
Period on the
Certificate
Principal Balance thereof
immediately
prior to such
Distribution
Date at the related
Pass-Through Rate and (b) in the case of each
Class of Class X Certificates,
interest accrued during the related Interest Accrual Period on the
related Notional Amount
immediately
prior to that Distribution Date at the related Pass-Through Rate.
The amount of
Accrued
Certificate
Interest
on each
Class of
Certificates
shall be
reduced by the amount of
Prepayment
Interest
Shortfalls on the related
Mortgage Loans during the prior calendar month to the extent not
covered by Compensating
Interest
pursuant to
Section 3.16
and by Relief Act
Shortfalls
on the related
Mortgage
Loans
during the related Due Period on the related
Mortgage Loans allocable to such Class of Certificates for that
Distribution
Date. The portion of any Prepayment
Interest
Shortfalls
or Relief
Act
Shortfalls
allocated
to the
Class A
Certificates
will be based
upon the
related
Senior
Percentage
of all such
reductions with respect to the related
Mortgage Loans,
such
reductions to be allocated among the related Class A
Certificates,
pro
rata, on the basis of Accrued
Certificate
Interest payable on such
Distribution
Date absent such reductions,
with the remainder of
such
reductions
allocated
among the Holders of all Classes of Class M
Certificates,
pro rata, on the basis of Accrued
Certificate
Interest payable on such Distribution Date absent such reductions.
Accrued
Certificate
Interest
with
respect
to any
Distribution
Date and any
Class of Class A
Certificates
and Class M
Certificates
shall further be reduced by the interest portion of Realized Losses
allocated to that Class of
Certificates
pursuant to
Section 4.05.
Accrued
Certificate
Interest with respect to the Class III-A
Certificates and the Class M Certificates
shall accrue on the
basis of the actual number of days in the related
Interest
Accrual
Period and a 360-day year.
Accrued
Certificate
Interest on the
Class I-A, Class II-A and Class X Certificates shall accrue on the
basis of a 360-day year divided into twelve 30-day months.
With respect to each Distribution Date and the Class SB
Certificates,
interest accrued during the preceding Interest Accrual
Period at the related
Pass-Through Rate on the related Notional Amount,
immediately prior to such Distribution
Date,
reduced by any
interest
shortfalls
with
respect to the
Mortgage
Loans,
including
Prepayment
Interest
Shortfalls
to the extent not covered by
Compensating
Interest pursuant to Section 3.16 or by Excess Cash Flow pursuant
to
Section 4.02(c)(iii)
and (iv). Accrued Certificate
Interest
on the
Class SB
Certificates
shall
accrue on the basis of a 360-day
year and the
actual
number of days in the
related
Interest Accrual Period.
Adjustment
Date:
With
respect
to each
Mortgage
Loan,
each
date set
forth
in the
related
Mortgage
Note on which an
adjustment to the interest rate on such Mortgage Loan becomes
effective.
Available
Distribution
Amount:
As to any
Distribution
Date and each Loan Group,
as determined
separately
for 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 or 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) 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 (v) any
payments or
collections
consisting
of Prepayment
Charges on the Mortgage
Loans that were
received
during the related
Prepayment
Period; (w) aggregate
Foreclosure
Profits,
(x) the Amount Held for Future
Distribution and (y) amounts permitted to be withdrawn by
the Master Servicer from the Custodial
Account in respect of the Mortgage Loans pursuant to clauses
(ii)-(x),
inclusive,
of Section
3.10(a).
Available
Funds Rate: With respect to any
Distribution
Date, a per annum rate equal to (i) the product of (x) the
Available
Distribution
Amount
for all Loan
Groups
and (y) a
fraction,
the
numerator
of which
is 12 and the
denominator
of which is the
aggregate Stated Principal Balance of the Mortgage Loans
immediately prior to such Distribution Date.
Basis Risk Shortfall:
With respect to the Class I-A
Certificates and Class II-A
Certificates and any Distribution
Date, an
amount equal to the excess,
if any, of
(i) Accrued
Certificate
Interest for that
Class calculated
at a rate equal to MTA plus the
related Margin over (ii) Accrued
Certificate
Interest for that Class at the Net WAC Rate for such Distribution
Date; plus any unpaid
Basis Risk Shortfall from prior
Distribution
Dates,
plus interest
thereon to the extent not previously
paid from Excess Cash Flow,
the Yield Maintenance Agreement or the Yield Maintenance Floor
Agreement.
With respect to the Class III-A
Certificates
and Class M
Certificates
and any
Distribution
Date,
an amount equal to the
excess, if any, of (i) Accrued
Certificate
Interest for that
Class calculated
at a rate equal to LIBOR plus the related Margin over
(ii) Accrued
Certificate
Interest for that Class at the Net WAC Rate for such Distribution
Date; plus any unpaid Basis Risk Shortfall
from prior
Distribution
Dates,
plus interest thereon to the extent not previously paid from Excess
Cash Flow, the Yield
Maintenance
Agreement or the Yield Maintenance Floor Agreement.
Book-Entry Certificate:
The Class A, Class X and Class M Certificates.
Capitalization
Reimbursement
Amount:
As to any
Distribution
Date and Loan
Group,
the amount of
Advances
or
Servicing
Advances that were added to the Stated
Principal
Balance of the Mortgage Loans in such Loan Group during the prior
calendar month and
reimbursed to the Master Servicer or the related
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 the related Subservicer on or prior to such
Distribution Date.
Capitalization
Reimbursement
Shortfall
Amount: As to any Distribution Date and Loan Group, the amount, if
any, by which the
amount of Advances or Servicing
Advances
that were added to the Stated
Principal
Balance of the
Mortgage
Loans in such Loan Group
during the preceding
calendar
month
exceeds the amount of principal
payments on the Mortgage
Loans
included in the portion of the
Available Distribution Amount related to that Loan Group and
Distribution Date.
Certificate:
Any Class A, Class X, Class M, Class SB, Class R or Class P
Certificate.
Certificate
Account:
The
separate
account or accounts
created and
maintained
pursuant to Section
4.01 of the
Standard
Terms,
which shall be entitled "DEUTSCHE BANK TRUST COMPANY AMERICAS,
as trustee,
in trust for the registered Holders of Residential
Accredit Loans, Inc., Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-QO7" and which must be an Eligible
Account.
Certificate
Principal
Balance:
With
respect
to
any
Class
A
Certificate
or
Class
M
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
minus (ii) 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(c) 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,
with
respect to any
Distribution Date, the Certificate Principal Balance of (i) the
Class I-A Certificates and
Class M Certificates
will be increased, in
each case to the extent of Realized
Losses
previously
allocated
thereto and
remaining
unreimbursed,
by the
Subsequent
Recovery
Allocation
Amount for Loan Group I in the following
order of priority:
first to the Class I-A
Certificates,
pro rata,
and then to
the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6 and Class
M-7 Certificates,
in that order,
(ii) the Class II-A
Certificates and Class M Certificates
will be increased,
in each case to the extent of Realized Losses
previously
allocated thereto
and remaining
unreimbursed,
by the Subsequent Recovery Allocation Amount for Loan Group II in
the following order of priority: to the
Class II-A
Certificates,
pro rata,
and then to the Class M-1, Class M-2,
Class M-3,
Class M-4,
Class M-5, Class M-6 and Class M-7
Certificates,
in that order and (iii) the Class III-A
Certificates
and Class M Certificates
will be increased,
in each case to the
extent of Realized Losses previously
allocated thereto and remaining
unreimbursed,
by the Subsequent
Recovery Allocation Amount for
Loan Group III in the following
order of priority:
to the Class III-A
Certificates,
pro rata, and then to the Class M-1, Class M-2,
Class M-3,
Class M-4,
Class M-5, Class M-6 and Class M-7
Certificates,
in that order. With respect to any Class SB Certificate,
on
any date of determination,
an amount equal to the Percentage Interest evidenced by such
Certificate,
multiplied by an amount equal to
(i) the
excess,
if any,
of (A) the then
aggregate
Stated
Principal
Balance of the
Mortgage
Loans
over (B) the then
aggregate
Certificate
Principal Balance of the Class A Certificates and Class M
Certificates
then outstanding,
which represents the sum of (i)
the initial
Uncertificated
Principal
Balance of REMIC II Regular Interest SB-PO, as reduced by Realized
Losses allocated thereto and
payments deemed made thereon,
and (ii) accrued and unpaid
interest on REMIC II Regular
Interest SB-IO, as reduced by Realized Losses
allocated thereto.
The Class R Certificates will not have a Certificate Principal
Balance.
Class I-A Certificate Group:
The Class I-A Certificates.
Class I-A Certificates:
Collectively, the Class I-A-1 Certificates, Class I-A-2
Certificates and Class I-A-3 Certificates.
Class
I-A-1
Certificate:
Any one of the
Class
I-A-1
Certificates,
executed
by the
Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed
hereto as
Exhibit A,
senior to the Class I-A-2,
Class
I-A-3,
Class M,
Class SB,
and Class R
Certificates with respect to distributions and the allocation of
Realized Losses in respect of Group I Loans as
set forth in
Section 4.05,
and evidencing (i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to
receive
Basis Risk
Shortfalls
and (iii) the right to receive
payments
under the Yield
Maintenance
Agreement and the Yield Maintenance Floor Agreement.
Class I-A-1 Margin:
With respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
0.800% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.800% per annum.
Class
I-A-2
Certificate:
Any one of the
Class
I-A-2
Certificates,
executed
by the
Trustee
and
authenticated
by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A,
senior to the Class I-A-3, Class M,
Class SB and Class R
Certificates
with
respect to
distributions
and the
allocation
of
Realized
Losses in
respect
of Group I
Loans as set forth in
Section 4.05,
and evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk Shortfalls and (iii) the right
to receive payments under the Yield
Maintenance
Agreement and the
Yield Maintenance Floor Agreement.
Class I-A-2 Margin:
With respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
0.800% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.800% per annum.
Class
I-A-3
Certificate:
Any one of the
Class
I-A-3
Certificates,
executed
by the
Trustee
and
authenticated
by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A,
senior to the Class M,
Class SB and Class R Certificates
with respect to
distributions
and the
allocation of Realized
Losses in respect of Group I Loans as set forth in
Section 4.05,
and
evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to
receive Basis Risk Shortfalls and (iii) the right to receive
payments under the Yield
Maintenance
Agreement and the Yield Maintenance
Floor Agreement.
Class I-A-3 Margin:
With respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
0.800% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.800% per annum.
Class II-A Certificate Group:
The Class II-A Certificates.
Class
II-A
Certificates:
Collectively,
the
Class
II-A-1
Certificates,
Class
II-A-2
Certificates
and
Class
II-A-3
Certificates.
Class
II-A-1
Certificate:
Any one of the Class
II-A-1
Certificates,
executed
by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed
hereto as
Exhibit A,
senior to the Class II-A-2,
Class II-A-3,
Class M,
Class SB and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
in respect of Group II Loans as
set forth in
Section 4.05,
and evidencing (i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to
receive
Basis Risk
Shortfalls
and (iii) the right to receive
payments
under the Yield
Maintenance
Agreement and the Yield Maintenance Floor Agreement.
Class II-A-1 Margin:
With respect to any
Distribution
Date prior to the second
Distribution
Date after the first possible
Optional
Termination
Date,
0.850% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.850% per annum.
Class
II-A-2
Certificate:
Any one of the Class
II-A-2
Certificates,
executed
by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed
hereto as
Exhibit A,
senior to the Class
II-A-3,
Class M,
Class SB and
Class R
Certificates
with respect to distributions and the allocation of Realized Losses
in respect of Group II Loans as set forth in
Section 4.05,
and evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk Shortfalls and (iii) the right
to receive payments under the Yield
Maintenance
Agreement and the
Yield Maintenance Floor Agreement.
Class II-A-2 Margin:
With respect to any
Distribution
Date prior to the second
Distribution
Date after the first possible
Optional
Termination
Date,
0.850% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.850% per annum.
Class
II-A-3
Certificate:
Any one of the Class
II-A-3
Certificates,
executed
by the Trustee
and
authenticated
by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A,
senior to the Class M,
Class SB and Class R Certificates
with respect to
distributions
and the allocation of Realized
Losses in respect of Group II Loans as set forth in
Section 4.05,
and
evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to
receive Basis Risk Shortfalls and (iii) the right to receive
payments under the Yield
Maintenance
Agreement and the Yield Maintenance
Floor Agreement.
Class II-A-3 Margin:
With respect to any
Distribution
Date prior to the second
Distribution
Date after the first possible
Optional
Termination
Date,
0.850% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.850% per annum.
Class III-A Certificate Group:
The Class III-A Certificates.
Class
III-A
Certificates:
Collectively,
the
Class
III-A-1
Certificates,
Class
III-A-2
Certificates,
Class
III-A-3
Certificates and Class III-A-4 Certificates.
Class
III-A-1
Certificate:
Any one of the Class
III-A-1
Certificates,
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed
hereto as Exhibit A,
senior to the Class
III-A-4,
Class M,
Class SB and
Class R
Certificates with respect to distributions and the allocation of
Realized Losses in respect of Group III Loans as set forth in
Section 4.05,
and evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk Shortfalls and (iii) the right
to receive payments under the Yield
Maintenance
Agreement and the
Yield Maintenance Floor Agreement.
Class III-A-1 Margin:
With respect to any Distribution
Date prior to the second
Distribution
Date after the first possible
Optional
Termination
Date,
0.100% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.200% per annum.
Class
III-A-2
Certificate:
Any one of the Class
III-A-2
Certificates,
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed
hereto as Exhibit A,
senior to the Class
III-A-4,
Class M,
Class SB and
Class R
Certificates with respect to distributions and the allocation of
Realized Losses in respect of Group III Loans as set forth in
Section 4.05,
and evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk Shortfalls and (iii) the right
to receive payments under the Yield
Maintenance
Agreement and the
Yield Maintenance Floor Agreement.
Class III-A-2 Margin:
With respect to any Distribution
Date prior to the second
Distribution
Date after the first possible
Optional
Termination
Date,
0.205% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.410% per annum.
Class
III-A-3
Certificate:
Any one of the Class
III-A-3
Certificates,
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed
hereto as Exhibit A,
senior to the Class
III-A-4,
Class M,
Class SB and
Class R
Certificates with respect to distributions and the allocation of
Realized Losses in respect of Group III Loans as set forth in
Section 4.05,
and evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk Shortfalls and (iii) the right
to receive payments under the Yield
Maintenance
Agreement and the
Yield Maintenance Floor Agreement.
Class III-A-3 Margin:
With respect to any Distribution
Date prior to the second
Distribution
Date after the first possible
Optional
Termination
Date,
0.305% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.610% per annum.
Class
III-A-4
Certificate:
Any one of the Class
III-A-4
Certificates,
executed by the Trustee and
authenticated
by the
Certificate Registrar substantially in the form annexed hereto as
Exhibit A,
senior to the Class M,
Class SB and Class R Certificates
with respect to
distributions
and the allocation of Realized Losses in respect of Group III Loans
as set forth in
Section 4.05,
and
evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to
receive Basis Risk Shortfalls and (iii) the right to receive
payments under the Yield
Maintenance
Agreement and the Yield Maintenance
Floor Agreement.
Class III-A-4 Margin:
With respect to any Distribution
Date prior to the second
Distribution
Date after the first possible
Optional
Termination
Date,
0.305% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.610% per annum.
Class A Certificates:
Collectively, the Class I-A Certificates, Class II-A Certificates,
Class III-A Certificates.
Class A Principal
Distribution
Amount:
With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after
the Stepdown Date if a Trigger Event is in effect for that
Distribution Date, the Principal
Distribution
Amount for that Distribution
Date or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the Principal Distribution Amount for that Distribution Date;
and
(ii)the excess, if any, of (A) the aggregate Certificate
Principal Balance of the Class A Certificates
immediately prior to that
Distribution
Date over (B) the lesser of (x) the product of (1) the
applicable
Subordination
Percentage
and (2) the aggregate
Stated
Principal
Balance of the Mortgage Loans after giving effect to
distributions
to be made on that
Distribution
Date and
(y) the excess,
if any, of the aggregate Stated
Principal
Balance of the Mortgage Loans after giving effect to distributions
to
be made on that Distribution Date, over the Overcollateralization
Floor.
Class M
Certificates:
Collectively,
the Class M-1,
Class M-2,
Class M-3,
Class M-4,
Class M-5,
Class M-6 and Class M-7
Certificates.
Class M-1
Certificate:
Any one of the Class M-1
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form annexed to the Standard
Terms as Exhibit B, senior to the Class M-2, Class M-3, Class M-4,
Class
M-5, Class M-6, Class M-7, Class SB and Class R Certificates
with respect to
distributions
and the allocation of Realized
Losses as
set forth in Section 4.05,
and evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to
receive
Basis Risk
Shortfalls
and (iii) the right to receive
payments
under the Yield
Maintenance
Agreement and the Yield Maintenance Floor Agreement.
Class M-1
Margin:
With
respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
0.410% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.615% per annum.
Class M-1
Principal
Distribution
Amount:
With respect to any
Distribution
Date (i) prior to the
Stepdown
Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution
Date, the remaining
Principal
Distribution
Amount for
that
Distribution
Date after
distribution of the Class A
Principal
Distribution
Amount or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after distribution of the Class A
Principal
Distribution Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the
aggregate
Certificate
Principal Balance of the Class A
Certificates
(after
taking
into
account
the
payment of the
Class A
Principal
Distribution
Amount for that
Distribution
Date) and
(2) the
Certificate
Principal
Balance of the
Class M-1
Certificates
immediately
prior to that
Distribution
Date over (B) the
lesser of
(x) the product of (1) the
applicable
Subordination
Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans
after
giving
effect to
distributions
to be made on that
Distribution
Date and (y) the
excess,
if any, of the
aggregate
Stated
Principal
Balance
of the
Mortgage
Loans
after
giving
effect to
distributions
to be made on that
Distribution
Date,
over the
Overcollateralization Floor.
Class M-2
Certificate:
Any one of the Class M-2
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form annexed to the Standard
Terms as Exhibit B, senior to the Class M-3, Class M-4, Class M-5,
Class
M-6, Class M-7, Class SB and Class R Certificates
with respect to distributions
and the allocation of Realized Losses as set forth in
Section 4.05,
and
evidencing (i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk Shortfalls and (iii) the right
to receive payments under the Yield
Maintenance
Agreement and the
Yield Maintenance Floor Agreement.
Class M-2
Margin:
With
respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
0.430% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.645% per annum.
Class M-2
Principal
Distribution
Amount:
With respect to any
Distribution
Date (i) prior to the
Stepdown
Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution
Date, the remaining
Principal
Distribution
Amount for
that
Distribution
Date after
distribution of the Class A
Principal
Distribution
Amount and the Class M-1
Principal
Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after distribution of the Class A
Principal
Distribution Amount and the Class M-1 Principal Distribution
Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the
aggregate
Certificate
Principal Balance of the Class A
Certificates
and
Class M-1
Certificates
(after
taking into account the payment of the Class A
Principal
Distribution
Amount and the Class M-1
Principal
Distribution
Amount for that Distribution
Date) and (2) the
Certificate
Principal Balance of the Class M-2
Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable
Subordination
Percentage and
(2) the
aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution
Date and (y) the excess,
if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-3
Certificate:
Any one of the Class M-3
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form annexed
hereto as Exhibit B, senior to the Class M-4,
Class M-5, Class M-6, Class M-7, Class SB
and Class R
Certificates
with respect to
distributions
and the
allocation
of Realized
Losses as set forth in Section
4.05,
and
evidencing
(i) an interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to
receive Basis Risk Shortfalls and (iii) the right to receive
payments under the Yield
Maintenance
Agreement and the Yield Maintenance
Floor Agreement.
Class M-3
Margin:
With
respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
0.450% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.675% per annum.
Class M-3
Principal
Distribution
Amount:
With respect to any
Distribution
Date (i) prior to the
Stepdown
Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution
Date, the remaining
Principal
Distribution
Amount for
that Distribution Date after distribution of the Class A Principal
Distribution
Amount, the Class M-1
Principal
Distribution Amount
and the
Class M-2
Principal
Distribution
Amount or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after distribution of the Class A
Principal
Distribution Amount, the Class M-1 Principal Distribution Amount
and the Class M-2 Principal Distribution Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A,
Class M-1 and
Class M-2
Certificates
(after taking into account the payment of the Class A Principal
Distribution
Amount, the Class M-1 Principal
Distribution
Amount and the Class M-2
Principal
Distribution
Amount for that Distribution Date) and (2) the
Certificate
Principal
Balance of the Class M-3
Certificates
immediately
prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be made on that
Distribution
Date and (y) the
excess,
if any, of the aggregate
Stated
Principal
Balance of the
Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.
Class M-4
Certificate:
Any one of the Class M-4
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form annexed
hereto as Exhibit B, senior to the Class M-5, Class M-6, Class M-7,
Class SB and Class R
Certificates
with respect to
distributions
and the allocation of Realized Losses as set forth in Section 4.05,
and evidencing (i) an
interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk
Shortfalls and (iii) the right to receive payments under the Yield
Maintenance Agreement and the Yield Maintenance Floor Agreement.
Class M-4
Margin:
With
respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
0.650% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 0.975% per annum.
Class M-4
Principal
Distribution
Amount:
With respect to any
Distribution
Date (i) prior to the
Stepdown
Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution
Date, the remaining
Principal
Distribution
Amount for
that Distribution Date after distribution of the Class A Principal
Distribution
Amount, the Class M-1 Principal
Distribution Amount,
the Class M-2 Principal
Distribution
Amount and the Class M-3 Principal
Distribution Amount or (ii) on or after the Stepdown Date if
a Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after distribution of the Class A
Principal
Distribution
Amount, the Class M-1
Principal
Distribution
Amount,
the Class M-2
Principal
Distribution
Amount and the Class M-3
Principal Distribution Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance of the Class A,
Class M-1,
Class M-2
and
Class M-3
Certificates
(after
taking into
account the payment of the Class A
Principal
Distribution
Amount,
the
Class M-1 Principal
Distribution Amount, the Class M-2 Principal
Distribution Amount and the Class M-3 Principal
Distribution Amount
for that
Distribution
Date) and
(2) the
Certificate
Principal
Balance of the
Class M-4
Certificates
immediately
prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable
Subordination
Percentage and (2) the aggregate Stated
Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that
Distribution Date and (y) the excess,
if any, of the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving
effect to
distributions
to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-5
Certificate:
Any one of the Class M-5
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form
annexed
hereto
as
Exhibit
B,
senior
to the
Class
M-6,
Class
M-7,
Class SB and Class R
Certificates
with respect to
distributions
and the allocation of Realized Losses as set forth in Section 4.05,
and evidencing (i) an
interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive Basis Risk
Shortfalls and (iii) the right to receive payments under the Yield
Maintenance Agreement and the Yield Maintenance Floor Agreement.
Class M-5
Margin:
With
respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
1.250% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 1.875% per annum.
Class M-5
Principal
Distribution
Amount:
With respect to any
Distribution
Date (i) prior to the
Stepdown
Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution
Date, the remaining
Principal
Distribution
Amount for
that Distribution Date after distribution of the Class A Principal
Distribution
Amount, the Class M-1 Principal
Distribution Amount,
the Class M-2
Principal
Distribution
Amount, the Class M-3 Principal
Distribution
Amount and the Class M-4 Principal
Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after distribution of the Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount,
the Class M-2
Principal
Distribution
Amount,
the Class M-3
Principal Distribution Amount and the Class M-4 Principal
Distribution Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance of the Class A,
Class M-1,
Class M-2,
Class M-3 and Class M-4
Certificates (after taking into account the payment of the Class A
Principal
Distribution Amount,
the Class M-1 Principal
Distribution Amount, the Class M-2 Principal
Distribution Amount, the Class M-3 Principal Distribution Amount
and the
Class M-4
Principal
Distribution
Amount
for that
Distribution
Date) and
(2) the
Certificate
Principal
Balance of the
Class M-5
Certificates
immediately
prior to that
Distribution
Date over (B) the
lesser of (x) the
product of (1) the
applicable
Subordination
Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to
be made on that
Distribution
Date and (y) the excess,
if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-6
Certificate:
Any one of the Class M-6
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form
annexed
hereto as Exhibit B, senior to the Class M-7,
Class SB and Class R
Certificates
with
respect to
distributions
and the
allocation
of
Realized
Losses as set forth in
Section
4.05,
and
evidencing
(i) an
interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC Provisions,
(ii) the right to receive Basis Risk Shortfalls
and (iii) the right to receive payments under the Yield Maintenance
Agreement and the Yield Maintenance Floor Agreement.
Class M-6
Margin:
With
respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
2.000% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 3.000% per annum.
Class M-6
Principal
Distribution
Amount:
With respect to any
Distribution
Date (i) prior to the
Stepdown
Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution
Date, the remaining
Principal
Distribution
Amount for
that Distribution Date after distribution of the Class A Principal
Distribution
Amount, the Class M-1 Principal
Distribution Amount,
the Class M-2 Principal
Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution Amount
and the
Class M-5
Principal
Distribution
Amount or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after distribution of the Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount,
the Class M-2
Principal
Distribution
Amount,
the Class M-3
Principal Distribution Amount, the Class M-4 Principal Distribution
Amount and the Class M-5 Principal Distribution Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance of the Class A,
Class M-1,
Class M-2,
Class M-3,
Class M-4
and
Class M-5
Certificates
(after
taking
into
account
the
payment of the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount,
the Class M-2
Principal
Distribution
Amount,
the Class M-3
Principal
Distribution
Amount, the Class M-4 Principal
Distribution Amount and the Class M-5 Principal
Distribution Amount for that
Distribution
Date) and (2) the
Certificate
Principal
Balance of the Class M-6
Certificates
immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the
applicable
Subordination
Percentage and (2) the
aggregate
Stated
Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that
Distribution
Date and (y) the excess,
if any,
of the aggregate
Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M-7
Certificate:
Any one of the Class M-7
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form annexed hereto as Exhibit B, senior to the Class SB
Certificates
and Class R Certificates
with
respect to
distributions
and the
allocation
of
Realized
Losses as set forth in
Section
4.05,
and
evidencing
(i) an
interest
designated as a "regular
interest" in REMIC III for purposes of the REMIC Provisions,
(ii) the right to receive Basis Risk Shortfalls
and (iii) the right to receive payments under the Yield Maintenance
Agreement and the Yield Maintenance Floor Agreement.
Class M-7
Margin:
With
respect to any
Distribution
Date prior to the second
Distribution
Date after the first
possible
Optional
Termination
Date,
2.000% per annum, and on any Distribution
Date on or after the second
Distribution Date after the first
possible Optional Termination Date, 3.000% per annum.
Class M-7
Principal
Distribution
Amount:
With respect to any
Distribution
Date (i) prior to the
Stepdown
Date or on or
after the Stepdown Date if a Trigger Event is in effect for that
Distribution
Date, the remaining
Principal
Distribution
Amount for
that Distribution Date after distribution of the Class A Principal
Distribution
Amount, the Class M-1 Principal
Distribution Amount,
the Class M-2
Principal
Distribution
Amount,
the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5 Principal
Distribution
Amount and the Class M-6 Principal
Distribution Amount or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution
Date, the lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after distribution of the Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount,
the Class M-2
Principal
Distribution
Amount,
the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5
Principal
Distribution
Amount and the
Class M-6 Principal Distribution Amount; and
(ii)
the excess,
if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A,
Class M-1,
Class M-2,
Class M-3,
Class M-4, Class M 5 and Class M-6 Certificates (after taking into
account the payment of the Class A Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount,
the Class M-2
Principal
Distribution
Amount,
the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5
Principal
Distribution
Amount and the
Class M-6
Principal
Distribution
Amount for that
Distribution
Date) and (2) the
Certificate
Principal
Balance of the
Class M-7
Certificates
immediately prior to that
Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage and (2) the aggregate
Stated
Principal
Balance of the Mortgage Loans after giving effect to
distributions
to be made on
that
Distribution
Date and (y) the excess,
if any, of the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving
effect to distributions to be made on that Distribution Date, over
the Overcollateralization Floor.
Class P
Certificate:
Any one of the Class P
Certificates
executed
by the
Trustee and
authenticated
by the
Certificate
Registrar substantially in the form annexed to the Standard Terms
as Exhibit C-I.
Class R Certificate:
Any one of the Class R-I, Class R-II, Class R-III or Class R-X
Certificates.
Class R-I
Certificate:
Any one of the Class R-I
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form annexed to the Standard Terms as Exhibit D and
evidencing an interest
designated as a "residual
interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate:
Any one of the Class R-II
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially
in the form annexed to the Standard Terms as Exhibit D and
evidencing an interest
designated as a "residual
interest" in REMIC II for purposes of the REMIC Provisions.
Class
R-III
Certificate:
Any
one of the
Class
R-III
Certificates
executed
by the
Trustee
and
authenticated
by the
Certificate
Registrar
substantially in the form annexed to the Standard Terms as Exhibit
D and evidencing an interest designated as a
"residual interest" in REMIC III for purposes of the REMIC
Provisions.
Class R-X
Certificate:
Any one of the Class R-X
Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially
in the form annexed to the Standard Terms as Exhibit D and
evidencing an interest
designated as a "residual
interest" in REMIC IV for purposes of the REMIC Provisions.
Class SB
Certificate:
Any one of the Class SB
Certificates
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed hereto as Exhibit R,
subordinate
to the Class A, Class X and Class M Certificates
with
respect to distributions
and the allocation of Realized Losses as set forth in Section 4.05,
and evidencing
ownership of the REMIC IV
Regular Interest
designated as the single "regular
interest" in REMIC IV for purposes of the REMIC Provisions,
together with certain
obligations with respect to payments of Basis Risk Shortfalls.
Class X Certificates:
Collectively, the Class X1, Class X2 and Class X3 Certificates.
Class X1
Certificate:
Any one of the Class X1
Certificates
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed hereto as
Exhibit A-1,
senior to the Class M,
Class SB and Class R
Certificates
with
respect to distributions and the allocation of Realized Losses as
set forth in Section 4.05,
and evidencing an interest
designated as
a "regular interest" in REMIC III for purposes of the REMIC
Provisions.
Class X2
Certificate:
Any one of the Class X2
Certificates
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed hereto as
Exhibit A-1,
senior to the Class M,
Class SB and Class R
Certificates
with
respect to distributions and the allocation of Realized Losses as
set forth in Section 4.05,
and evidencing an interest
designated as
a "regular interest" in REMIC III for purposes of the REMIC
Provisions.
Class X3
Certificate:
Any one of the Class X3
Certificates
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed hereto as
Exhibit A-1,
senior to the Class M,
Class SB and Class R
Certificates
with
respect to distributions and the allocation of Realized Losses as
set forth in Section 4.05,
and evidencing an interest
designated as
a "regular interest" in REMIC III for purposes of the REMIC
Provisions.
Closing Date:
September 29, 2006.
Corporate
Trust Office:
The principal
office of the Trustee at which at any
particular
time its corporate
trust business
with respect to this Agreement shall be
administered,
which office at the date of the execution of this instrument is
located at 1761
East St. Andrew Place, Santa Ana, California 92705-4934, Attention:
Residential Funding Corporation, RALI 2006-QO7.
Custodial
File:
Any
mortgage
loan
document
in the
Mortgage
File that is
required
to be
delivered
to the Trustee or
Custodian pursuant to Section 2.01(b) of this Agreement.
Cut-off Date Principal Balance:
$1,550,191,403.86.
Cut-off Date:
September 1, 2006.
Deferred
Interest:
The amount of interest
which is deferred and added to the
principal
balance of a Mortgage
Loan due to
negative
amortization.
For purposes of REMIC I, Deferred
Interest shall be allocated to REMIC I Regular Interest LT1 in
reduction of
the portion of the
Uncertificated
Accrued Interest
thereon
distributable
on the related
Distribution
Date and shall result in an
increase in the
principal
balance
thereof to the extent of such
reduction.
For purposes of REMIC II,
Deferred
Interest
shall be
allocated to the REMIC II Regular
Interests in amounts
equal to the Deferred
Interest
allocated
to their
Related
Certificate
or
Certificates
(in the case of the Class X1
Certificates
and the Class X2
Certificates,
allocated
among REMIC II Regular
Interests
I-A-1,
I-A-2 and I-A-3,
pro rata according to their respective
Uncertificated
Principal
Balances,
and in the case of the Class X3
Certificates,
allocated among REMIC II Regular Interests I-A-1, I-A-2, I-A-3,
II-A-1,
II-A-2 and II-A-3, pro rata according to their
respective Uncertificated Principal Balances).
Determination Date:
With respect to any Distribution Date, the second Business Day
prior to each Distribution Date.
Discount Net Mortgage Rate:
Not applicable.
Due Period:
With respect to each Distribution Date, the calendar month in which
such Distribution Date occurs.
Excess Bankruptcy Loss:
Not applicable.
Excess Cash Flow:
With respect to any
Distribution
Date, an amount equal to the sum of (a) the excess of (i) the
Available
Distribution
Amount for all Loan Groups for that Distribution Date over (ii) the
sum of (A) the Interest
Distribution Amount for that
Distribution Date and (B) the
Principal
Remittance
Amount for that
Distribution
Date and (b) the
Overcollateralization
Reduction
Amount, if any, for that Distribution Date.
Excess Fraud Loss:
Not applicable.
Excess
Overcollateralization
Amount:
With
respect
to
any
Distribution
Date,
the
excess,
if
any,
of
(a)
the
Overcollateralization Amount on such Distribution Date over (b) the
Required Overcollateralization Amount.
Excess Special Hazard Loss:
Not applicable.
Excess Subordinate Principal Amount:
Not applicable.
Expense Fee Rate:
With respect to any Mortgage
Loan as of any date of
determination,
the sum of the Servicing Fee Rate and
the rate per annum at which the Subservicing Fee accrues.
Gross Margin:
With respect to each Mortgage Loan, the fixed
percentage set forth in the related
Mortgage Note and indicated
on the Mortgage Loan Schedule
attached hereto as the "NOTE MARGIN," which
percentage is added to the related Index on each Adjustment
Date to determine
(subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum
Mortgage Rate and
the Minimum Mortgage Rate) the interest rate to be borne by such
Mortgage Loan until the next Adjustment Date.
Group I Cut-off Date Principal Balance:
$633,164,144.05.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group I Loans.
Group I Principal
Distribution
Amount:
For any
Distribution
Date,
the product of (x) the Class A Principal
Distribution
Amount for such
Distribution
Date and (y) a fraction,
the
numerator
of which is the
portion of the
Principal
Allocation
Amount
related to the Group I Loans for such
Distribution
Date and the
denominator of which is the Principal
Allocation
Amount for all of
the Mortgage Loans for such Distribution Date.
Group II Cut-off Date Principal Balance:
$460,725,945.83.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group II Loans.
Group II Principal
Distribution
Amount:
For any
Distribution
Date, the product of (x) the Class A Principal
Distribution
Amount for such
Distribution
Date and (y) a fraction,
the
numerator
of which is the
portion of the
Principal
Allocation
Amount
related to the Group II Loans for such
Distribution
Date and the denominator of which is the Principal
Allocation
Amount for all of
the Mortgage Loans for such Distribution Date.
Group III Cut-off Date Principal Balance:
$456,301,313.98.
Group III Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group III Loans.
Group III Principal
Distribution
Amount:
For any Distribution
Date, the product of (x) the Class A Principal
Distribution
Amount for such
Distribution
Date and (y) a fraction,
the
numerator
of which is the
portion of the
Principal
Allocation
Amount
related to the Group III Loans for such
Distribution
Date and the denominator of which is the Principal
Allocation Amount for all of
the Mortgage Loans for such Distribution Date.
Index:
With respect to any Mortgage Loan and as to any Adjustment
Date therefor,
the related index as stated in the related
Mortgage Note.
Initial Subordinate Class Percentage:
Not applicable.
Insolvency
Proceeding:
The
commencement,
after the date this
Agreement,
of any bankruptcy,
insolvency,
readjustment of
debt,
reorganization,
marshalling of assets and liabilities or similar proceedings by or
against any Person, the commencement,
after
the date hereof,
of any proceedings by or against any Person for the winding up or
liquidation of its affairs,
or the consent,
after
the date hereof, to the appointment of a trustee, conservator,
receiver or liquidator in any bankruptcy,
insolvency,
readjustment of
debt, reorganization, marshalling of assets and liabilities or
similar proceedings of or relating to any Person.
Interest Accrual Period:
(i) With respect to the Class I-A, Class II-A and Class X
Certificates
and any
Distribution
Date,
the calendar month
preceding the month in which such
Distribution
Date occurs and (ii) with respect to the Class III-A,
Class M and
Class SB Certificates and any
Distribution
Date, the period
beginning on the prior
Distribution
Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day
immediately preceding the Distribution Date.
Interest
Carryforward
Amount: With respect to any Class of Class A Certificates or Class
M Certificates and any Distribution
Date,
the sum of (a) the excess,
if any, of (i) Accrued
Certificate
Interest
for such Class
assuming the related Net Rate Cap for
such
Distribution
Date was
calculated
using the Net WAC Rate over (ii) Accrued
Certificate
Interest
for such Class
assuming the
related Net Rate Cap for such Distribution
Date was calculated using the Available Funds Rate and (b) any
amount
calculated
pursuant
to clause (a) on any previous Distribution Date and remaining
unpaid, plus interest thereon at the related Pass-Through Rate.
Interest
Distribution
Amount:
For any
Distribution
Date,
the
aggregate
of the
amounts
payable
pursuant
to
Section
4.02(c)(i).
Interest Only Certificates:
The Class X Certificates.
Interest Shortfall Reserve Fund:
The reserve fund created pursuant to Section 4.09.
Interest Shortfall Reserve Fund Amount:
$1,785,000.00.
LIBOR:
With respect to any
Distribution
Date,
the
arithmetic
mean of the London
interbank
offered rate
quotations for
one-month U.S. Dollar deposits, expressed on a per annum basis,
determined in accordance with Section 1.02.
LIBOR
Business
Day:
Any day other
than (i) a Saturday
or Sunday or (ii) a day on which
banking
institutions
in London,
England are required or authorized to by law to be closed.
LIBOR Certificates:
The Class III-A Certificates and Class M Certificates.
LIBOR Floaters Net Rate Cap: With respect to the Class III-A
Certificates
and the Class M Certificates
and any Distribution
Date,
(i) the
lesser of the Net WAC Rate and the
Available
Funds Rate minus
(ii) an amount
equal to (1) the
aggregate
amount of
Accrued
Certificate
Interest
payable to the Class X Certificates
for such
Distribution
Date
multiplied by 12, divided by (2) the
aggregate Stated Principal Balance of the Mortgage Loans
immediately
prior to such
Distribution
Date,
adjusted to an actual/360 day
rate.
LIBOR Rate Adjustment Date: With respect to each
Distribution
Date, the second LIBOR Business Day immediately
preceding the
commencement of the related Interest Accrual Period.
Liquidation Proceeds:
As defined in the Standard Terms but excluding Subsequent
Recoveries.
Loan Group:
Any of Loan Group I, Loan Group II or Loan Group III.
Loan Group I:
The group of Mortgage Loans comprised of the Group I Loans.
Loan Group II:
The group of Mortgage Loans comprised of the Group II Loans.
Loan Group III:
The group of Mortgage Loans comprised of the Group III Loans.
Margin:
The Class I-A-1 Margin,
Class I-A-2 Margin,
Class I-A-3 Margin,
Class II-A-1 Margin,
Class II-A-2
Margin,
Class
II-A-3 Margin,
Class III-A-1 Margin,
Class III-A-2 Margin,
Class III-A-3 Margin,
Class III-A-4 Margin,
Class M-1 Margin, Class M-2
Margin, Class M-3 Margin, Class M-4 Margin, Class M-5 Margin, Class
M-6 Margin or Class M-7 Margin, as applicable.
Marker Rate: With respect to the Class SB
Certificates,
REMIC II Regular
Interest SB-IO or REMIC III Regular Interest SB-IO
and any
Distribution
Date, a per annum rate equal to two (2) times the weighted
average of the
Uncertificated
REMIC I Pass-Through
Rates for REMIC I Regular Interest LT2 and REMIC I Regular Interest
LT3.
Maturity Date:
September 25, 2046, the Distribution
Date in the month of the latest scheduled
maturity date of any Mortgage
Loan.
Maximum
Mortgage
Rate: As to any Mortgage
Loan,
the per annum rate
indicated in Mortgage Loan
Schedule
hereto
attached
hereto as the "NOTE CEILING,"
which rate is the maximum
interest rate that may be applicable to such Mortgage Loan at any
time during
the life of such Mortgage Loan.
Maximum Net
Mortgage
Rate:
As to any
Mortgage
Loan and any date of
determination,
the Maximum
Mortgage
Rate minus the
Expense Fee Rate.
Mortgage Loan Schedule:
The list or lists of the Mortgage Loans
attached
hereto as Exhibit One,
segregated for the Group I
Loans, Group II Loans and Group III Loans, (and as amended from
time to time to reflect the addition of Qualified
Substitute
Mortgage
Loans), which list or lists shall set forth the following
information as to each Mortgage Loan:
(i)
the Mortgage Loan identifying number ("RFC LOAN #");
(ii)
the maturity of the Mortgage Note ("MATURITY DATE");
(iii)
the Mortgage Rate as of origination ("ORIG RATE");
(iv)
the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(v)
the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vi)
the
scheduled
monthly
payment of
principal,
if any,
and
interest as of the Cut-off
Date
("ORIGINAL P & I" or
"CURRENT P & I");
(vii)
the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(viii)
the Maximum Mortgage Rate ("NOTE CEILING");
(ix)
the maximum Net Mortgage Rate ("NET CEILING");
(x)
the Note Margin ("NOTE MARGIN");
(xi)
the Note Margin ("NOTE MARGIN");
(xii)
the Periodic Cap ("PERIODIC DECR" or "PERIODIC INCR");
(xiii)
the rounding of the semi-annual or annual adjustment to the
Mortgage Rate ("NOTE METHOD");
(xiv)
the Loan-to-Value Ratio at origination ("LTV");
(xv)
the rate at which the
Subservicing
Fee accrues
("SUBSERV
FEE") and at which the Servicing Fee accrues ("MSTR SERV
FEE");
(xvi)
a code "T," "BT" or "CT" under the column "LN FEATURE,"
indicating
that the Mortgage Loan is secured by a second or
vacation residence; and
(xvii)
a code "N" under the column
"OCCP
CODE,"
indicating
that the
Mortgage
Loan is secured by a
non-owner
occupied
residence.
Such schedule may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Rate:
With respect to any Mortgage Loan, the interest rate borne by the
related
Mortgage Note, or any
modification
thereto other than a Servicing
Modification.
The Mortgage Rate on each
Mortgage
Loan will adjust on each
Adjustment
Date to equal
the sum (rounded to the nearest
multiple of one eighth of one percent (0.125%) or up to the nearest
one-eighth of one percent,
which
are
indicated by a "U" on the Mortgage Loan
Schedule,
except in the case of the Mortgage
Loans
indicated by an "X" on the Mortgage
Loan Schedule
under the heading "NOTE
METHOD"),
of the related
Index plus the Note Margin,
in each case subject to the
applicable
Periodic Cap, Maximum Mortgage Rate and Minimum Mortgage Rate.
MTA:
With respect to any
Distribution
Date,
the
twelve-month
moving
average
monthly
yield on United
States
Treasury
securities, expressed on a per annum basis, determined in
accordance with Section 1.03.
MTA
Determination
Date: For each Interest
Accrual Period,
fifteen days prior to the
commencement of that Interest Accrual
Period.
MTA Floaters
Net Rate Cap:
With
respect to the Class I-A
Certificates
and Class II-A
Certificates
and any
Distribution
Date,
(i) the
lesser of the Net WAC Rate and the
Available
Funds Rate minus
(ii) an amount
equal to (1) the
aggregate
amount of
Accrued
Certificate
Interest
payable on the Class X Certificates
for such
Distribution
Date
multiplied by 12, divided by (2) the
aggregate Stated Principal Balance of the Mortgage Loans
immediately prior to such Distribution Date.
Net
Mortgage
Rate:
With
respect
to any
Mortgage
Loan as of any date of
determination,
a per annum
rate
equal to the
Mortgage Rate for such Mortgage Loan as of such date minus the
related Expense Fee Rate.
Net Rate Cap:
With
respect to any Class of Class I-A
Certificates
and Class II-A
Certificates,
the MTA Floaters Net Rate
Cap.
With respect to any Class of Class III-A Certificates and Class M
Certificates, the LIBOR Floaters Net Rate Cap.
Net WAC Rate:
With
respect to any
Distribution
Date,
a per annum
rate
(which
will not be less than zero)
equal to the
weighted
average of the Net Mortgage
Rates of the Mortgage
Loans using the Net Mortgage Rates in effect on the Mortgage Loans
during
the related Due Period.
Note Margin:
With respect to each Mortgage
Loan, the fixed
percentage set forth in the related
Mortgage Note and indicated
in Exhibit One hereto as the "NOTE MARGIN," which
percentage is added to the Index on each
Adjustment
Date to determine
(subject to
rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum
Mortgage Rate and the Minimum Mortgage Rate) the
interest rate to be borne by such Mortgage Loan until the next
Adjustment Date.
Notional
Amount:
As of any Distribution
Date, with respect to the Class X1
Certificates,
an amount equal to the aggregate
Certificate
Principal
Balance of the Class I-A
Certificates
immediately
prior to such
Distribution
Date (for federal
income tax
purposes expressed as the aggregate
Uncertificated
Principal Balance of REMIC II Regular Interests I-A-1, I-A-2 and
I-A-3 immediately
prior to such
Distribution
Date). The initial
Notional Amount of the Class X1 Certificates is equal to
approximately
$577,129,000.
As of any
Distribution
Date,
with
respect
to the
Class X2
Certificates,
an amount
equal to the
product
of (i) the
aggregate
Certificate
Principal Balance of the Class I-A Certificates
immediately prior to such date (for federal income tax purposes
expressed
as the aggregate
Uncertificated
Principal
Balance of REMIC II Regular
Interests I-A-1,
I-A-2 and I-A-3
immediately
prior to such
Distribution
Date) and (ii) a fraction,
the numerator of which is $419,952,000 and the denominator of which
is the aggregate
initial
Certificate
Principal
Balance of the Class I-A
Certificates.
The initial
Notional
Amount of the Class X2 Certificates is equal to
approximately
$419,952,000.
As of any Distribution
Date, with respect to the Class X3
Certificates,
an amount equal to the product
of (i) the aggregate
Certificate
Principal
Balance of the Class I-A Certificates and Class II-A
Certificates
immediately
prior to
that
Distribution
Date (for federal
income tax purposes
expressed as the
aggregate
Uncertificated
Principal
Balance of REMIC II
Regular Interests I-A-1,
I-A-2,
I-A-3,
II-A-1,
II-A-2 and II-A-3
immediately prior to such Distribution Date) and (ii) a fraction,
the numerator of which is
$450,000,000
and the denominator of which is the aggregate
initial
Certificate
Principal
Balance of the
Class
I-A
Certificates
and
Class
II-A
Certificates.
The
initial
Notional
Amount
of the
Class
X3
Certificates
is equal to
approximately
$450,000,000.
As of any Distribution Date, with respect to the Class SB
Certificates,
an amount equal to the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests
immediately prior to such date.
Offered Certificates:
The Class A, Class X and Class M Certificates.
Optional
Termination
Date: Any
Distribution
Date on or after which the aggregate
Stated
Principal
Balance (after giving
effect to distributions to be made on such
Distribution
Date) of the Mortgage Loans is less than 10.00% of the Cut-off Date
Principal
Balance.
Overcollateralization
Amount:
With
respect to any
Distribution
Date,
the
excess,
if any, of (a) the
aggregate
Stated
Principal
Balance of the Mortgage Loans before giving effect to distributions
of principal to be made on such
Distribution
Date over
(b) the aggregate Certificate Principal Balance of the Class A
Certificates and Class M Certificates immediately prior to such
date.
Overcollateralization Floor: An amount equal to the product of
0.50% and the Cut-off Date Principal Balance.
Overcollateralization
Increase
Amount:
With respect to any
Distribution
Date, the lesser of (a) Excess Cash Flow for that
Distribution
Date (to the extent not used to cover the amounts
described in clauses
(b)(iv)(2),
(v) and
(vi) of the
definition of
Principal
Distribution
Amount as of such Distribution Date) and (b) the excess of (1) the
Required
Overcollateralization
Amount for
such Distribution Date over (2) the Overcollateralization Amount
for such Distribution Date.
Overcollateralization
Reduction
Amount:
With
respect to any
Distribution
Date on which the Excess
Overcollateralization
Amount
is,
after
taking
into
account
all other
distributions
to be made on such
Distribution
Date,
greater
than
zero,
the
Overcollateralization
Reduction
Amount
shall be
equal
to the
lesser
of
(i) the
Excess
Overcollateralization
Amount
for that
Distribution Date and (ii) the Principal Remittance Amount on such
Distribution Date.
Pass-Through Rate:
o
With respect to the Class I-A
Certificates and Class II-A
Certificates and any Distribution
Date, a per annum rate equal to
the lesser of (i) MTA plus the related Margin for such
Distribution
Date and (ii) the MTA Floaters Net Rate Cap for
such Distribution Date.
o
With respect to the Class III-A
Certificates and Class M Certificates
and any
Distribution
Date, a per annum rate equal to
the lesser of (i) LIBOR plus the related Margin for such
Distribution
Date and (ii) the LIBOR Floaters Net Rate Cap
for such Distribution Date.
o
With respect to the Class X1 Certificates and any Distribution
Date, 0.90% per annum.
o
With respect to the Class X2 Certificates and any Distribution
Date, 1.27% per annum.
o
With respect to the Class X3 Certificates and any Distribution
Date, 1.50% per annum.
o
With
respect to the Class SB
Certificates,
REMIC II Regular
Interest
SB-IO or REMIC III
Regular
Interest
SB-IO and any
Distribution
Date, a per annum rate equal to the excess,
if any, of (x) the Net WAC Rate for such Distribution Date
over (y) two (2) times the Marker Rate for such
Distribution
Date.
For federal
income tax purposes the
foregoing
rate is
expressed
as the
percentage
equivalent
of a fraction,
(a) the
numerator of which is the sum of (i) the
Uncertificated
REMIC I
Pass-Through
Rate for REMIC I Regular
Interest
LT1 minus the
Marker
Rate,
applied to a
notional
amount
equal
to the
Uncertificated
Principal
Balance
of
REMIC
I
Regular
Interest
LT1,
(ii)
the
Uncertificated
REMIC I
Pass-Through
Rate for REMIC I Regular
Interest
LT2 minus the
Marker
Rate,
applied to a
notional
amount
equal to the
Uncertificated
Principal
Balance
of REMIC I
Regular
Interest
LT2 and
(iii) the
Uncertificated
REMIC I Pass-Through Rate for REMIC I Regular Interest LT4 minus
twice the Marker Rate,
applied to a
notional
amount
equal
to the
Uncertificated
Principal
Balance
of
REMIC
I
Regular
Interest
LT4 and (b) the
denominator of which is the aggregate Uncertificated Principal
Balance of the REMIC I Regular Interests.
o
The Class P Certificates are not entitled to interest on any
amounts due.
Prepayment
Assumption:
The
prepayment
assumption to be used for
determining
the accrual of original
issue
discount and
premium and market
discount on the
Certificates
for federal income tax purposes,
which assumes
constant
prepayment
rates in each
month as indicated in the following table:
MONTH
CPR (1)
CPR(2)
CPR(3)
September 2006
20.0000000000%
10.0000000000%
10.0000000000%
October 2006
21.8181818182%
10.0000000000%
10.6250000000%
November 2006
23.6363636364%
10.0000000000%
11.2500000000%
December 2006
25.4545454545%
10.0000000000%
11.8750000000%
January 2007
27.2727272727%
10.0000000000%
12.5000000000%
February 2007
29.0909090909%
10.0000000000%
13.1250000000%
March 2007
30.9090909091%
10.0000000000%
13.7500000000%
April 2007
32.7272727273%
10.0000000000%
14.3750000000%
May 2007
34.5454545455%
10.0000000000%
15.0000000000%
June 2007
36.3636363636%
10.0000000000%
15.6250000000%
July 2007
38.1818181818%
10.0000000000%
16.2500000000%
August 2007
40.0000000000%
10.0000000000%
16.8750000000%
September 2007
40.0000000000%
45.0000000000%
17.5000000000%
October 2007
40.0000000000%
45.0000000000%
18.1250000000%
November 2007
40.0000000000%
45.0000000000%
18.7500000000%
December 2007
40.0000000000%
45.0000000000%
19.3750000000%
January 2008
40.0000000000%
45.0000000000%
20.0000000000%
February 2008
40.0000000000%
45.0000000000%
20.6250000000%
March 2008
40.0000000000%
40.0000000000%
21.2500000000%
April 2008
40.0000000000%
40.0000000000%
21.8750000000%
May 2008
40.0000000000%
40.0000000000%
22.5000000000%
June 2008
40.0000000000%
40.0000000000%
23.1250000000%
July 2008
40.0000000000%
40.0000000000%
23.7500000000%
August 2008
40.0000000000%
40.0000000000%
24.3750000000%
September 2008
40.0000000000%
35.0000000000%
25.0000000000%
October 2008
40.0000000000%
35.0000000000%
25.0000000000%
November 2008
40.0000000000%
35.0000000000%
25.0000000000%
December 2008
40.0000000000%
35.0000000000%
25.0000000000%
January 2008
40.0000000000%
35.0000000000%
25.0000000000%
February 2008
40.0000000000%
35.0000000000%
25.0000000000%
March 2008
40.0000000000%
35.0000000000%
25.0000000000%
April 2008
40.0000000000%
35.0000000000%
25.0000000000%
May 2008
40.0000000000%
35.0000000000%
25.0000000000%
June 2008
40.0000000000%
35.0000000000%
25.0000000000%
July 2008
40.0000000000%
35.0000000000%
25.0000000000%
August 2008
40.0000000000%
35.0000000000%
25.0000000000%
September 2008
40.0000000000%
35.0000000000%
45.0000000000%
October 2008
40.0000000000%
35.0000000000%
45.0000000000%
November 2008
40.0000000000%
35.0000000000%
45.0000000000%
December 2008
40.0000000000%
35.0000000000%
45.0000000000%
January 2009
40.0000000000%
35.0000000000%
45.0000000000%
February 2009
40.0000000000%
35.0000000000%
45.0000000000%
March 2009
40.0000000000%
35.0000000000%
40.0000000000%
April 2009
40.0000000000%
35.0000000000%
40.0000000000%
May 2009
40.0000000000%
35.0000000000%
40.0000000000%
June 2009
40.0000000000%
35.0000000000%
40.0000000000%
July 2009
40.0000000000%
35.0000000000%
40.0000000000%
August 2009
40.0000000000%
35.0000000000%
40.0000000000%
September 2009 and thereafter
40.0000000000%
35.0000000000%
35.0000000000%
(1)
For loans with no prepayment penalty.
(2)
For loans with prepayment penalty terms of one year.
(3)
For loans with prepayment penalty terms of three years.
Prepayment
Charge:
With respect to any Mortgage Loan, the charges or premiums,
if any,
received in connection
with a full
or partial prepayment of such Mortgage Loan in accordance with the
terms thereof.
Prepayment
Charge Loan: Any Mortgage Loan for which a Prepayment
Charge may be assessed and to which such Prepayment
Charge
the Class P Certificates are entitled, as indicated on the Mortgage
Loan Schedule.
Principal
Allocation Amount:
With respect to any Distribution Date, the sum of (a) the Principal
Remittance Amount for that
Distribution
Date,
(b) any Realized
Losses covered by amounts
included in clause (iv) of the
definition of Principal
Distribution
Amount and (c) the aggregate
amount of the principal
portion of Realized Losses on the Mortgage Loans in the calendar
month preceding
that
Distribution
Date, to the extent covered by Excess Cash Flow included in clause
(v) of the definition of Principal
Distribution
Amount;
provided,
however,
that on any
Distribution
Date on which there are (i)
insufficient
Subsequent
Recoveries to cover all
unpaid Realized Losses on the Mortgage Loans described in clause
(b) above, in determining the Group I Principal
Distribution
Amount,
Group II Principal
Distribution Amount and Group III Principal
Distribution
Amount,
Subsequent
Recoveries will be allocated to the
Class I-A, Class II-A and Class III-A
Certificates,
pro rata,
based on the principal
portion of unpaid
Realized
Losses from prior
Distribution Dates on the Group I Loans, Group II Loans and Group
III Loans,
respectively,
and (ii) insufficient
Excess Cash Flow to
cover all Realized
Losses on the Mortgage
Loans
described in clause (c) above,
in
determining
the Group I Principal
Distribution
Amount,
Group II Principal
Distribution Amount and Group III Principal
Distribution Amount, the Excess Cash Flow remaining after the
allocation
described
in clause (b) or (i) above,
as
applicable,
will be
allocated
to the Class I-A,
Class II-A and Class
III-A
Certificates,
pro rata,
based on the
principal
portion of
Realized
Losses
incurred
during the
calendar
month
preceding
that
Distribution Date on the Group I Loans, Group II Loans and Group
III Loans, respectively.
Principal
Distribution
Amount:
With
respect
to any
Distribution
Date,
the
lesser of (a) the
excess of (x)
Available
Distribution Amount for all Loan Groups over (y) the Interest
Distribution Amount and (b) the sum of:
(i)
except to the extent applied to offset Deferred
Interest the principal
portion of each Monthly Payment
received or
Advanced with respect to the related Due Period on each Outstanding
Mortgage Loan;
(ii)
except to the
extent
applied to offset
Deferred
Interest
the
Stated
Principal
Balance
of any
Mortgage
Loan
repurchased
during the related
Prepayment
Period (or deemed to have been so repurchased in accordance with
Section 3.07(b)) pursuant
to Section
2.02,
2.03,
2.04 or 4.07 and the amount of any
shortfall
deposited
in the
Custodial
Account in
connection
with the
substitution of a Deleted Mortgage Loan pursuant to Section 2.03 or
2.04 during the related Prepayment Period;
(iii)
except to the extent applied to offset Deferred Interest the
principal portion of all other unscheduled
collections,
other than Subsequent
Recoveries,
on the Mortgage Loans received (or deemed to have been so received)
during the prior calendar month
or, in the case of Principal Prepayments in Full, during the
related Prepayment Period,
including,
without limitation,
Curtailments,
Insurance
Proceeds,
Liquidation
Proceeds,
REO Proceeds and Principal
Prepayments,
to the extent applied by the Master Servicer as
recoveries of principal pursuant to Section 3.14;
(iv)
the lesser of
(1) Subsequent
Recoveries for such
Distribution
Date and (2) the
principal portion of any Realized
Losses allocated to any Class of Class A, Class X or Class M
Certificates on a prior Distribution Date and remaining unpaid;
(v)
the lesser of (1) the
Excess Cash Flow for such
Distribution
Date after being
applied to pay Accrued
Certificate
Interest on the Class M Certificates
pursuant to Section
4.02(c)(iii) and amounts available from the Yield Maintenance
Agreement and
Yield
Maintenance
Floor
Agreement
pursuant to Section
4.02(i) and (2) the
principal
portion of any Realized
Losses incurred (or
deemed to have been
incurred) on any Mortgage Loans in the calendar month
preceding such
Distribution
Date to the extent covered by
Excess
Cash Flow for such
Distribution
Date after
being
applied to pay Accrued
Certificate
Interest on the Class M
Certificates
pursuant to Section
4.02(c)(iii) and amounts
available from the Yield
Maintenance
Agreement and Yield
Maintenance
Floor Agreement
pursuant to Section 4.02(i); and
(vi)
the lesser of (a) the Excess
Cash Flow for such
Distribution
Date after being
applied to pay Accrued
Certificate
Interest on the Class M Certificates
pursuant to Section
4.02(c)(iii) and amounts available from the Yield Maintenance
Agreement and
Yield
Maintenance
Floor Agreement
pursuant to Section
4.02(i),
to the extent not used pursuant to clause (v) of this definition on
such Distribution Date, and (b) the amount of any
Overcollateralization Increase Amount for such Distribution Date;
minus
(vii)
(A) the amount of any
Overcollateralization
Reduction Amount for such
Distribution
Date and (B) the amount of any
Capitalization Reimbursement Amount for such Distribution Date.
Principal Only Certificates:
None.
Principal
Remittance
Amount:
With respect to any Distribution
Date, all amounts
described in clauses (b)(i) through (iii)
of the definition of Principal Distribution Amount for that
Distribution Date.
Record
Date:
With
respect
to each
Distribution
Date and the
Class
I-A,
Class
II-A and Class X
Certificates
and the
Definitive
Certificates,
the close of business on the last
Business Day of the month next
preceding
the month in which the related
Distribution
Date
occurs,
except in the case of the first
Record Date which shall be the Closing
Date.
With
respect to the Class
III-A
Certificates and Class M Certificates,
the Business Day immediately
preceding such
Distribution Date for so long as the Class
III-A
Certificates and Class M Certificates are Book-Entry
Certificates,
otherwise the close of business on the last Business Day of
the month next preceding the month in which the related
Distribution Date occurs.
Regular Certificates:
The Class A, Class X, Class M and Class SB Certificates.
Related Certificates:
(A) For each REMIC II Regular Interest,
the Class or Classes of Certificates
shown opposite the
name of such REMIC II Regular Interest in the following table:
------------------------------------------------------------
---------------------------------------------------------
REMIC II Regular Interest
Classes of Certificates
------------------------------------------------------------
---------------------------------------------------------
------------------------------------------------------------
---------------------------------------------------------
SB-IO and SB-PO
SB
------------------------------------------------------------
---------------------------------------------------------
------------------------------------------------------------
---------------------------------------------------------
I-A-1
I-A-1, X1, X2, X3
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I-A-2
I-A-2, X1, X2, X3
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I-A-3
I-A-3, X1, X2, X3
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II-A-1
II-A-1, X3
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II-A-2
II-A-2, X3
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II-A-3
II-A-3, X3
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III-A-1
III-A-1
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III-A-2
III-A-2
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III-A-3
III-A-3
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III-A-4
III-A-4
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M-1
M-1
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M-2
M-2
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M-3
M-3
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M-4
M-4
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M-5
M-5
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M-6
M-6
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M-7
M-7
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Related Group:
With respect to the Class I-A Certificates,
the Group I Loans.
With respect to the Class II-A
Certificates,
the Group II Loans.
With respect to the Class III-A Certificates, the Group III Loans.
Relief Act:
The Servicemembers Civil Relief Act, as amended.
Relief Act
Shortfalls:
Interest
shortfalls on the Mortgage Loans
resulting
from the Relief Act or similar
legislation or
regulations.
REMIC Accrued
Interest:
For any
Distribution
Date,
for each Class of Class X
Certificates,
one month's
interest at the
related
Pass-Through
Rate on the related
Notional
Amount;
for the Class SB
Certificates,
the
excess,
if any of (i) one month's
interest on the aggregate
principal
balance of the Mortgage
Loans at a rate equal to the weighted
average of the Net Mortgage Rates
over (ii) the sum of (A) one month's interest on the Class A
Certificates
and Class M Certificates,
calculated at a rate equal to the
lesser of (a) LIBOR plus the related
Margin or MTA plus the related
Margin,
as applicable,
and (b) the weighted
average of the Net
Mortgage
Rates
reduced by the product of 12 and a fraction the
numerator of which is the sum of the REMIC
Accrued
Interest for the
Class X Certificates and the denominator of which is the aggregate
principal
balance of the Mortgage Loans, and (B) the REMIC Accrued
Interest for the Class X Certificates.
REMIC I:
The segregated pool of assets subject
hereto,
constituting a portion of the primary trust created hereby and to
be
administered
hereunder,
exclusive of Interest
Shortfall
Reserve Fund,
the Yield
Maintenance
Agreement
Reserve
Fund,
the Yield
Maintenance
Floor Agreement Reserve Fund, the Yield
Maintenance
Agreement and the Yield
Maintenance Floor Agreement,
which are not
assets of any REMIC, with respect to which a separate REMIC
election is to be made, consisting of:
(i)
the Mortgage Loans and the related Mortgage Files;
(ii)
all
payments on and
collections
in respect of the
Mortgage
Loans due after the Cut-off
Date (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;
(iii)
property
which
secured a Mortgage
Loan and which has been
acquired for the benefit of the
Certificateholders
by
foreclosure or deed in lieu of foreclosure;
(iv)
the hazard insurance policies and Primary Insurance Policies
pertaining to the Mortgage Loans, if any; and
(v)
all proceeds of clauses (i) through (iv) above.
REMIC I Available Distribution Amount:
The Available Distribution Amount.
REMIC I Distribution
Amount:
For any Distribution
Date, the REMIC I Available
Distribution
Amount shall be distributed to
the REMIC I Regular Interests and the Class R-I Certificates in the
following amounts and priority:
(i)
first, to each of the REMIC I Regular Interests, pro rata, in an
amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates,
in
the case of REMIC I Regular Interest LT1 each such amount having
first been reduced by any Deferred Interest for the related
Distribution Date;
(ii)
second, in an amount equal to the remainder of the REMIC I
Available Distribution Amount after the distributions
made pursuant to clause (i) above, allocated as follows:
(A)
in respect of REMIC I Regular Interests LT2, LT3 and LT4, their
respective Principal Distribution Amounts;
(B)
in respect of REMIC I Regular Interest LT1 any remainder until the
Uncertificated Principal Balance thereof
is reduced to zero; and
(C)
any remainder in respect of REMIC I Regular Interests LT2, LT3 and
LT4, pro rata according to their
respective Uncertificated Principal Balances as reduced by the
distributions deemed made pursuant to (A) above, until their
respective Uncertificated Principal Balances are reduced to zero;
and
(iii)
third, any remaining amounts to the Holders of the Class R-I
Certificates.
REMIC I Principal
Reduction Amounts:
For any Distribution
Date, the amounts by which the Uncertificated
Principal Balances
of the REMIC I Regular
Interests will be reduced on such
Distribution Date by the allocation of Realized Losses and Deferred
Interest
and the distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y1 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT1 after
distributions and the allocation
of Deferred Interest and Realized Losses on the prior Distribution
Date.
Y2 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT2 after
distributions and the allocation
of Deferred Interest and Realized Losses on the prior Distribution
Date.
Y3 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT3 after
distributions and the allocation
of Deferred Interest and Realized Losses on the prior Distribution
Date.
Y4 =
the Uncertificated
Principal Balance of REMIC I Regular Interest LT4 after
distributions and the allocation
of Deferred Interest and Realized Losses on the prior Distribution
Date (note:
Y3 = Y4).
AY1 =
the REMIC I Regular Interest LT1 Principal Reduction Amount.
AY2 =
the REMIC I Regular Interest LT2 Principal Reduction Amount.
AY3 =
the REMIC I Regular Interest LT3 Principal Reduction Amount.
AY4 =
the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 =
the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests
after distributions and the
allocation of Deferred Interest and Realized Losses on the prior
Distribution Date.
P1 =
the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests
after distributions and the
allocation of Deferred Interest and Realized Losses to be made on
such Distribution Date.
AP =
P0 - P1 = the aggregate of the REMIC I Principal Reduction Amounts.
=
the
aggregate of the Deferred
Interest and principal
portions of Realized
Losses to be allocated to, and
the principal
distributions to be made on, the Certificates on such Distribution
Date (including
distributions of accrued and unpaid
interest on the Class X and Class SB Certificates for prior
Distributions Dates).
R0 =
the weighted
average of the Net Mortgage
Rates
(stated as a monthly
rate) after giving effect to amounts
distributed and Realized Losses and Deferred Interest allocated on
the prior Distribution Date.
R1 =
the weighted
average of the Net Mortgage Rates (stated as a monthly rate) after
giving effect to amounts to
be distributed and Realized Losses and Deferred Interest to be
allocated on such Distribution Date.
a =
(Y2 + Y3)/P0.
The initial
value of a on the Closing Date for use on the first
Distribution
Date shall be
0.0001.
a0 =
the lesser of (A) the sum of (1) for all
Classes of Class A
Certificates
of the product for each Class of
(i) the monthly
interest rate (as limited by the Net WAC Rate, if applicable) for
such Class
applicable for
distributions to be made
on such Distribution Date and (ii) the aggregate
Certificate
Principal Balance for such Class after
distributions and the allocation
of Realized Losses and Deferred
Interest on the prior
Distribution
Date and (2) for all Classes of Class X Certificates of the REMIC
Accrued Interest for such Class and (B) R0*P0.
a1
=
the lesser of (A) the sum of (1) for all
Classes of Class A
Certificates
of the product for each Class of
(i) the monthly
interest rate (as limited by the Net WAC Rate, if applicable) for
such Class
applicable for
distributions to be made
on the next succeeding
Distribution Date and (ii) the aggregate
Certificate
Principal Balance for such Class after distributions and
the
allocation
of
Realized
Losses and
Deferred
Interest to be made on such
Distribution
Date and (2) for all Classes of Class X
Certificates of the REMIC Accrued Interest for such Class and (B)
R1*P1.
Then, based on the foregoing definitions:
AY1 =
AP - AY2 - AY3 - AY4;
AY2 =
(a/2){( a0R1 - a1R0)/R0R1};
AY3 =
aAP - AY2; and
AY4 =
AY3.
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1)
If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
(2)
If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{
a0R1P1 - a1R0P0 }/{2R1R0P1 -
a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
REMIC I
Realized
Losses:
Realized
Losses on the
Mortgage
Loans shall be allocated
to the REMIC I
Regular
Interests as
follows:
Realized
Losses on the
Mortgage
Loans shall be
allocated
among the REMIC I Regular
Interests
as follows:
The interest
portion of Realized
Losses,
if any,
shall be
allocated
among
the REMIC I Regular
Interests
pro rata
according to the amount of
interest accrued but unpaid thereon,
in reduction
thereof.
Any interest portion of Realized Losses in excess of the amount
allocated
pursuant
to the
preceding
sentence
shall be treated as a
principal
portion of
Realized
Losses
and
allocated
pursuant
to the
succeeding
sentence.
The principal
portion of Realized
Losses,
if any, shall be allocated (a) first, to REMIC I Regular
Interests
LT2, LT3 and LT4, pro rata according to the Principal
Reduction
Amount thereof,
to the extent of such Principal
Reduction Amount in
reduction of the
Uncertificated
Principal Balance of such REMIC I Regular
Interest,
(b) second, to REMIC I Regular Interest LT1, in
reduction of the
Uncertificated
Principal
Balance
thereof,
and (c) third, to REMIC I Regular
Interests LT2, LT3 and LT4, pro rata
according to the Uncertificated Principal Balance thereof remaining
after the application of clause (b) above, in reduction thereof.
REMIC I Regular Interests:
REMIC I Regular Interests LT1, LT2, LT3 and LT4.
REMIC I
Regular
Interest
LT1: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
Uncertificated
Principal
Balance,
bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other
terms as are described herein.
REMIC I Regular Interest LT1 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular
Interest LT1 Principal
Reduction
Amount for such
Distribution
Date over the Realized
Losses
allocated to REMIC I Regular
Interest LT1 on such Distribution Date.
REMIC I
Regular
Interest
LT2: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
Uncertificated
Principal
Balance,
bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other
terms as are described herein.
REMIC I Regular Interest LT2 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular
Interest LT2 Principal
Reduction
Amount for such
Distribution
Date over the Realized
Losses
allocated to REMIC I Regular
Interest LT2 on such Distribution Date.
REMIC I
Regular
Interest
LT3: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
Uncertificated
Principal
Balance,
bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other
terms as are described herein.
REMIC I Regular Interest LT3 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular
Interest LT3 Principal
Reduction
Amount for such
Distribution
Date over the Realized
Losses
allocated to REMIC I Regular
Interest LT3 on such Distribution Date.
REMIC I
Regular
Interest
LT4: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
Uncertificated
Principal
Balance,
bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other
terms as are described herein.
REMIC I Regular Interest LT4 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular
Interest LT4 Principal
Reduction
Amount for such
Distribution
Date over the Realized
Losses
allocated to REMIC I Regular
Interest LT4 on such Distribution Date.
REMIC II:
The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and to
be
administered hereunder, with respect to which a separate REMIC
election is to be made, consisting of the REMIC I Regular
Interests.
REMIC II Available
Distribution
Amount:
For any Distribution
Date, the amounts deemed distributed with respect to REMIC II
on account of the REMIC I Regular Interests pursuant to Section
4.02(b).
REMIC II Distribution
Amount: For any Distribution Date, the REMIC II Available
Distribution
Amount shall be distributed to
the
REMIC II
Regular
Interests
and the
Class R-II
Certificates
as
follows:
to each
REMIC II
Regular
Interest
in respect of
Uncertificated
Accrued
Interest
thereon and the
Uncertificated
Principal
Balance
thereof,
the amount
distributed in respect of
interest and principal on the Related
Certificates
(with such amounts having the same character as interest or
principal with respect
to the REMIC II Regular
Interest as they have with respect to the Related
Certificate or
Certificates
and, in the case of the Class
X1 Certificates and the Class X2 Certificates,
allocated among REMIC II Regular
Interests I-A-1,
I-A-2 and I-A-3, pro rata according
to their
respective
Uncertificated
Principal
Balances,
and in the case of the
Class X3
Certificates,
allocated
among
REMIC II
Regular Interests I-A-1,
I-A-2,
I-A-3,
II-A-1,
II-A-2 and II-A-3, pro rata according to their respective
Uncertificated
Principal
Balances).
Any remaining
amount of the REMIC II Available
Distribution
Amount shall be distributed to the holders of the Class R-II
Certificates.
REMIC II Regular
Interests:
REMIC II
Regular
Interests SB-IO,
SB-PO,
I-A-1,
I-A-2,
I-A-3,
II-A-1,
II-A-2 and II-A-3,
III-A-1, III-A-2, III-A-3, III-A-4, M-1, M-2, M-3, M-4, M-5, M-6
and M-7.
REMIC II Regular
Interest SB-PO: A separate
non-certificated
beneficial
ownership
interest in REMIC II issued
hereunder,
designated
as a regular
interest
in
REMIC II
and held as an asset of REMIC III.
REMIC II
Regular
Interest
SB-PO
shall have no
entitlement
to
interest,
and shall be entitled to
distributions
of principal
subject to the terms and
conditions
hereof,
in an
aggregate
amount equal to the initial
Certificate
Principal
Balance of the Class SB
Certificates
as set forth in the
Preliminary
Statement hereto.
REMIC II Regular
Interest SB-IO: A separate
non-certificated
beneficial
ownership
interest in REMIC II issued
hereunder,
designated
as a regular
interest
in
REMIC II
and held as an asset of REMIC III.
REMIC II
Regular
Interest
SB-IO
shall have no
entitlement
to
principal,
and shall be entitled to
distributions
of interest
subject to the terms and
conditions
hereof,
in an
aggregate amount equal to the interest
distributable
with respect to the Class SB
Certificates
pursuant to the terms and conditions
hereof.
REMIC III:
The segregated
pool of assets subject
hereto,
constituting a portion of the primary trust created hereby and to
be
administered
hereunder,
with
respect to which a separate
REMIC
election
is to be made,
consisting
of the
REMIC II
Regular
Interests.
REMIC III Regular Interest SB-PO: A separate
non-certificated
beneficial
ownership
interest in REMIC III issued hereunder,
designated
as a regular
interest
in
REMIC III
and held as an asset of REMIC IV.
REMIC III
Regular
Interest
SB-PO shall have no
entitlement
to
interest,
and shall be entitled to
distributions
of principal
subject to the terms and
conditions
hereof,
in an
aggregate
amount equal to the initial
Certificate
Principal
Balance of the Class SB
Certificates
as set forth in the
Preliminary
Statement hereto.
REMIC III Regular Interest SB-IO: A separate
non-certificated
beneficial
ownership
interest in REMIC III issued hereunder,
designated
as a regular
interest
in
REMIC III
and held as an asset of REMIC IV.
REMIC III
Regular
Interest
SB-IO shall have no
entitlement
to
principal,
and shall be entitled to
distributions
of interest
subject to the terms and
conditions
hereof,
in an
aggregate amount equal to the interest
distributable
with respect to the Class SB
Certificates
pursuant to the terms and conditions
hereof.
REMIC III Regular
Interests:
REMIC III Regular Interests SB-IO and SB-PO,
together with the Class A
Certificates,
Class M
Certificates
and Class X
Certificates,
exclusive
of the rights of such
Certificates
to payments of Basis Risk
Shortfalls
and to
payments derived from the Yield Maintenance Agreement.
REMIC IV: The
segregated
pool of assets
subject
hereto,
constituting a portion of the primary trust created hereby and to
be administered
hereunder,
with respect to which a separate REMIC election is to be made,
consisting of REMIC III
Regular Interests
SB-IO and SB-PO.
REMIC IV Regular
Interest:
The separate
beneficial
ownership
interest in REMIC IV issued
hereunder
and
designated as a
"regular
interest" in REMIC IV, the ownership of which is evidenced by the
Class SB
Certificates.
The REMIC IV Regular Interest will
not have a
Pass-Through
Rate,
but will be entitled to 100% of all amounts
distributed
or deemed
distributed
on REMIC III Regular
Interests SB-IO and SB-PO.
Required
Overcollateralization
Amount:
With
respect to any
Distribution
Date (i) prior to the Stepdown
Date,
an amount
equal to 0.50% of the aggregate Cut-off Date Principal
Balance;
(ii) on or after the Stepdown Date but prior to the Distribution
Date
in October 2012,
provided a Trigger Event is not in effect,
the greater of (x) 1.25% of the outstanding
aggregate
Stated
Principal
Balance of the Mortgage Loans after giving effect to distributions
made on that
Distribution
Date and (y) the
Overcollateralization
Floor;
(iii) on or after the Stepdown Date and on or after the
Distribution
Date in October 2012,
provided a Trigger Event is not in
effect,
the greater of (x) 1.00% of the outstanding
aggregate Stated
Principal
Balance of the Mortgage Loans after giving effect to
distributions
made on that
Distribution
Date and (y) the
Overcollateralization
Floor;
or (iv) on or after the Stepdown
Date if a
Trigger Event is in effect, the Required
Overcollateralization
Amount for the immediately preceding
Distribution Date; provided that
the Required
Overcollateralization
Amount may be reduced so long as written confirmation is obtained
from each rating agency that the
reduction will not reduce the ratings
assigned to the Class A Certificates
and Class M
Certificates
by that rating agency below the
lower of the then-current ratings or the ratings assigned to those
certificates as of the closing date by that rating agency.
Senior Certificate:
Any one of the Class A Certificates or Class X Certificates.
Senior
Enhancement
Percentage:
With respect to any
Distribution
Date, the percentage
obtained by dividing (x) the sum of
(i) the aggregate
Certificate
Principal Balance of the Class M Certificates and (ii) the
Overcollateralization
Amount, in each case
prior to the
distribution of the Principal
Distribution
Amount on such
Distribution
Date, by (y) the aggregated
Stated
Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date.
Senior
Percentage:
With respect to each Loan Group and any Distribution
Date, the percentage equal to the lesser of (x) the
aggregate
Certificate
Principal Balances of the related Class A
Certificates
immediately prior to such Distribution Date divided by
the aggregate Stated Principal
Balance of the Mortgage Loans in such Loan Group
immediately
prior to such
Distribution Date and (y)
100%.
Sixty-Plus
Delinquency
Percentage:
With respect to any
Distribution
Date on or after the Stepdown
Date,
the
arithmetic
average,
for each of the three
consecutive
Distribution
Dates ending with such Distribution
Date, of the fraction,
expressed as a
percentage,
equal to (x) the aggregate Stated
Principal
Balance of the Mortgage Loans that are 60 or more days delinquent
in payment
of principal and interest for the applicable Due Date preceding
that Distribution Date,
including
Mortgage Loans in foreclosure,
REO
Properties and Mortgage Loans in bankruptcy over (y) the aggregate
Stated Principal
Balance of all of the Mortgage Loans
immediately
preceding that Distribution Date.
Stated
Principal
Balance:
With
respect to any
Mortgage
Loan or related REO
Property,
as of any date of
determination,
(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 has been increased
pursuant to a Servicing
Modification and (c) any amount by which the Stated Principal
Balance
of the Mortgage Loan has been
increased for Deferred
Interest
pursuant to the terms of the related
Mortgage Note on or prior to the
Distribution
Date, minus (ii) the sum of (a) the
aggregate of the principal
portion of the Monthly Payments due with respect to such
Mortgage Loan or REO Property
during each Due Period
commencing
with the first Due Period after the Cut-off Date and ending with
the
Due Period
relating to the most recent
Distribution
Date which were
received or with respect to which an Advance was made,
(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 incurred with respect to such Mortgage Loan
allocated to
Certificateholders
with respect
thereto for any
previous Distribution Date.
Stepdown
Date:
The earlier to occur of (1) the
Distribution
Date
following the
Distribution
Date on which the aggregate
Certificate
Principal
Balance of the Class A Certificates has been reduced to zero and
(2) the later to occur of (x) the Distribution
Date in October 2009 and (y) the first
Distribution
Date on which the Senior
Enhancement
Percentage is greater than or equal to (a)
on any Distribution
Date prior to the Distribution Date in October 2012,
22.1250028670%
and (b) on any Distribution Date on or after
the Distribution Date in October 2012, 17.7000022936%.
Subordination
Percentage:
With
respect to each
Class of Class A
Certificates
and Class M
Certificates,
the
respective
approximate percentage set forth in the table below:
Class
Percentage (1)
Percentage (2)
A
77.875%
82.300%
M-1
82.750%
86.200%
M-2
87.250%
89.800%
M-3
88.750%
91.000%
M-4
92.375%
93.900%
M-5
95.000%
96.000%
M-6
96.625%
97.300%
M-7
98.750%
99.000%
(1)
For any Distribution Date prior to the Distribution Date in October
2012.
---------------------------------------------------------------------------------------------------------------------------------------
(2)
For any Distribution Date in October 2012 or thereafter.
Subsequent
Recovery
Allocation
Amount:
With respect to a Loan Group,
that portion of the Principal
Allocation
Amount in
respect of that Loan Group attributable to the amounts described in
clause (iv) of the definition of Principal Distribution Amount.
Trigger
Event:
A Trigger Event is in effect with respect to any
Distribution
Date if (a) on or after the Stepdown Date the
Sixty-Plus
Delinquency
Percentage,
as determined on that Distribution Date, exceeds 40.58% prior to
the Distribution Date in October
2011, or 50.72% on or after the Distribution Date in October 2011,
of the Senior
Enhancement
Percentage for that Distribution Date or
(b) on or after the
Distribution
Date in October 2008 the aggregate
amount of Realized
Losses on the Mortgage Loans as a percentage
of the initial aggregate Stated Principal Balance as of the Cut-Off
Date exceeds the applicable amount set forth below:
o
October 2008 to September 2009: 0.15% with respect to October 2008,
plus an additional 1/12th of 0.25% for each month
through September 2009.
o
October 2009 to September 2010: 0.40% with respect to October 2009,
plus an additional 1/12th of 0.30% for each month
through September 2010.
o
October 2010 to September 2011: 0.70% with respect to October 2010,
plus an additional 1/12th of 0.25% for each month
through September 2011.
o
October 2011 to September 2012: 0.95% with respect to October 2011,
plus an additional 1/12th of 0.40% for each month
through September 2012.
o
October 2012 to September 2013: 1.35% with respect to October 2012,
plus an additional 1/12th of 0.10% for each month
through September 2013.
o
October 2013 and thereafter: 1.45%.
2006-QO7 REMIC:
Any of REMIC I, REMIC II, REMIC III or REMIC IV, as the case may
be.
Uncertificated
Accrued Interest:
With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's
interest at the related
Uncertificated
REMIC I Pass-Through Rate,
Uncertificated REMIC II Pass-Through Rate or Pass-Through Rate, as
applicable,
for such
Distribution
Date,
accrued on the
Uncertificated
Principal
Balance or
Uncertificated
Notional Amount,
as
applicable,
immediately prior to such Distribution
Date.
Uncertificated
Accrued Interest for the
Uncertificated
Regular Interests
shall
accrue
on the
basis of a 360-day
year
consisting
of twelve
30-day
months.
For
purposes
of
calculating
the
amount of
Uncertificated
Accrued
Interest for the REMIC I Regular
Interests and REMIC II Regular
Interests
for any
Distribution
Date,
any
Prepayment
Interest
Shortfalls and Relief Act Shortfalls (to the extent not covered by
Compensating
Interest) for any
Distribution
Date shall be allocated among the REMIC I Regular Interests and
REMIC II Regular
Interests,
respectively,
pro rata, based on, and to
the extent of,
Uncertificated
Accrued Interest, as calculated without application of this
sentence.
Uncertificated
Accrued Interest
on each of REMIC II Regular
Interest SB-PO and REMIC III Regular
Interest
SB-PO shall be zero.
Uncertificated
Accrued
Interest on
each of REMIC II Regular Interest and SB-IO REMIC III Regular
Interest SB-IO for each
Distribution
Date shall equal the REMIC Accrued
Interest for the Class SB Certificates.
Uncertificated
Notional
Amount:
With respect to REMIC II Regular
Interest SB-IO or REMIC III Regular
Interest SB-IO,
the
Notional Amount for the Class SB Certificates.
Uncertificated
Principal Balance:
The principal amount of any Uncertificated
Regular Interest outstanding as of any date of
determination.
The
Uncertificated
Principal
Balance of each
Uncertificated
Regular
Interest shall never be less than zero.
With
respect to REMIC III Regular
Interest SB-PO the initial amount set forth with respect thereto in
the Preliminary
Statement as reduced
by
distributions
deemed
made in respect
thereof
pursuant
to
Section 4.02
and
Realized
Losses
allocated
thereto
pursuant to
Section 4.05.
Uncertificated
Regular
Interests:
The REMIC I Regular
Interests,
the REMIC II
Regular
Interests
and REMIC III
Regular
Interests SB-IO and SB-PO.
Uncertificated
REMIC I Pass-Through
Rate: With respect to any
Distribution
Date and (i) REMIC I Regular
Interests LT1 and
LT2, the Net WAC Rate, (ii) REMIC I Regular
Interest LT3, zero (0.00%),
and (iii) REMIC I Regular Interest LT4, twice (2) the Net WAC
Rate.
Uncertificated
REMIC II
Pass-Through
Rate:
With
respect to each REMIC II Regular
Interest
(other
than REMIC II Regular
Interests
SB-IO
and
SB-PO)
and any
Distribution
Date,
the sum of the
Pass-Through
Rates
for its
Related
Certificates,
such
Pass-Through
Rates first modified in the case of a Related
Certificate
that is a Class X-2 or Class X-3
Certificate as described in
the succeeding two sentences.
The
Pass-Through
Rate for the Class X-2 Certificate
shall be multiplied by a fraction whose numerator
is 419,952 and whose
denominator is 577,129.
The
Pass-Through
Rate for the Class X-3 Certificate
shall be multiplied by a fraction
whose numerator is 450,000 and whose denominator is 997,081.
Underwriter:
UBS Securities LLC.
Yield Maintenance Agreement:
The interest rate cap corridor transaction
confirmation,
dated as of the Closing Date, between
the Trustee,
on behalf of the Trust Fund, and the Yield
Maintenance
Agreement
Provider,
relating to the Class A
Certificates
and
Class M Certificates, or any replacement, substitute, collateral or
other arrangement in lieu thereof.
Yield
Maintenance
Agreement
Excess Amount:
For any
Distribution
Date, the excess,
if any, of (i) amounts paid under the
Yield Maintenance Agreement over (ii) the related Yield Maintenance
Agreement Payment.
Yield Maintenance
Agreement Payment: For any Distribution Date, the payment, if any,
to the
Certificateholders
from amounts
paid under the Yield
Maintenance
Agreement in respect of such
Distribution
Date. With respect to any
Distribution
Date, the Yield
Maintenance
Agreement
Payment
shall be an amount equal to the product of (i) the excess,
if any, of (x) the lesser of (A) LIBOR (as
determined under the Yield
Maintenance
Agreement) and (B) the amount set forth for that Distribution Date
under "Cap Rate Schedule A"
in the Yield
Maintenance
Agreement over (y) the amount set forth for that
Distribution Date under "Cap Rate Schedule B" in the Yield
Maintenance
Agreement,
(ii) the lesser of (x) the aggregate
Certificate
Principal
Balance of the Class A Certificates
and Class M
Certificates
immediately prior to that
Distribution Date and (y) the amount set forth for that
Distribution Date under
"Amortization
Schedule" in the Yield Maintenance Agreement and (iii) (x) 30
divided by (y) 360.
Yield
Maintenance
Agreement
Provider:
UBS AG and its successors and assigns or any party to any
replacement,
substitute,
collateral or other arrangement in lieu thereof.
Yield Maintenance Agreement Reserve Fund: The reserve fund created
pursuant to Section 4.10(a)(i).
Yield Maintenance Floor Agreement:
The interest rate floor transaction
confirmation,
dated as of the Closing Date,
between
the Trustee,
on behalf of the Trust Fund, and the Yield
Maintenance
Agreement
Provider,
relating to the Class A
Certificates
and
Class M Certificates, or any replacement, substitute, collateral or
other arrangement in lieu thereof.
Yield
Maintenance
Floor Agreement Excess Amount:
For any Distribution
Date, the excess,
if any, of (i) amounts paid under
the Yield Maintenance Floor Agreement over (ii) the related Yield
Maintenance Floor Agreement Payment.
Yield Maintenance Floor Agreement Payment:
For any Distribution
Date, the payment,
if any, to the
Certificateholders
from
amounts
paid under the Yield
Maintenance
Floor
Agreement in respect of such
Distribution
Date.
With respect to any
Distribution
Date,
the Yield
Maintenance
Floor
Agreement
Payment shall be an amount equal to the product of (i) the excess,
if any, of (x) the
lesser of (A) LIBOR (as determined
under the Yield
Maintenance
Floor
Agreement) and (B) the amount set forth for that
Distribution
Date under "Floor Rate Schedule A" in the Yield
Maintenance
Floor Agreement over (y) the amount set forth for that
Distribution Date
under "Floor Rate Schedule B" in the Yield
Maintenance
Floor Agreement,
(ii) the lesser of (x) the aggregate
Certificate
Principal
Balance of the Class A Certificates and Class M Certificates
immediately
prior to that Distribution Date and (y) the amount set forth
for that
Distribution
Date under
"Amortization
Schedule" in the Yield
Maintenance
Floor Agreement and (iii) (x) 30 divided by (y)
360.
Yield Maintenance Floor Agreement Reserve Fund: The reserve fund
created pursuant to Section 4.10(a)(ii).
SECTION 1.02.
DETERMINATION OF LIBOR.
LIBOR
applicable to the calculation of the Pass-Through
Rate on the LIBOR
Certificates for any Interest Accrual Period will
be determined as of each LIBOR Rate
Adjustment
Date. On each LIBOR Rate
Adjustment
Date, or if such LIBOR Rate
Adjustment
Date is
not a Business
Day,
then on the next
succeeding
Business
Day,
LIBOR shall be
established
by the Trustee and, as to any Interest
Accrual
Period,
will equal the rate for one month United States dollar
deposits that appears on the Dow Jones
Telerate
Screen Page
3750 as of 11:00 a.m.,
London
time,
on such LIBOR Rate
Adjustment
Date.
"Dow Jones
Telerate
Screen Page 3750" means the display
designated
as page 3750 on the
Telerate
Service
(or such other page as may
replace
page 3750 on that
service
for the purpose of
displaying
London
interbank
offered
rates of major
banks).
If such rate does not
appear on such page (or such
other page as may
replace
that page on that
service,
or if such
service is no longer
offered,
LIBOR
shall be so
established
by use of such other
service for displaying LIBOR or comparable rates as may be selected
by the Trustee after
consultation with the Master
Servicer),
the
rate will be the Reference
Bank Rate.
The
"Reference
Bank Rate" will be
determined on the basis of the rates at which
deposits in
U.S.
Dollars are offered by the reference
banks (which shall be any three major banks that are engaged in
transactions in the London
interbank
market,
selected by the Trustee after
consultation
with the Master Servicer) as of 11:00 a.m.,
London time, on the LIBOR
Rate
Adjustment Date to prime banks in the London
interbank
market for a period of one month in amounts
approximately
equal to the
aggregate
Certificate
Principal Balance of the LIBOR
Certificates
then
outstanding.
The Trustee will request the principal London
office of each of the
reference
banks to provide a quotation of its rate.
If at least two such
quotations
are
provided,
the rate
will be the
arithmetic
mean of the
quotations
rounded up to the next multiple of 1/16%.
If on such date fewer than two
quotations
are
provided
as
requested,
the rate will be the
arithmetic
mean of the rates
quoted by one or more major banks in New York City,
selected by the Trustee after
consultation
with the Master Servicer,
as of 11:00 a.m., New York City time, on such date for loans in
U.S.
Dollars
to
leading
European
banks for a period of one
month in
amounts
approximately
equal to the
aggregate
Certificate
Principal Balance of the LIBOR
Certificates then
outstanding.
If no such quotations can be obtained,
the rate will be LIBOR for the
prior Distribution Date;
provided however,
if, under the priorities
described above, LIBOR for a Distribution Date would be based on
LIBOR for the previous Distribution Date for the third consecutive
Distribution Date, the Trustee,
after consultation with the Master
Servicer,
shall
select an
alternative
comparable
index (over which the Trustee has no
control),
used for
determining
one-month
Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party.
The
establishment
of LIBOR by the
Trustee
and the
Master
Servicer
on any
LIBOR
Rate
Adjustment
Date and the
Master
Servicer's
subsequent
calculation of the Pass-Through
Rate applicable to the LIBOR
Certificates
for the relevant
Interest Accrual
Period, in the absence of manifest error, will be final and
binding.
Promptly
following
each LIBOR Rate
Adjustment
Date the Trustee
shall supply the Master
Servicer
with the results of its
determination
of LIBOR on such date.
Furthermore,
the Trustee will supply to any
Certificateholder
so
requesting
by telephone by
calling (800) 735-7777 the Pass-Through Rate on the LIBOR
Certificates for the current and the immediately
preceding Interest Accrual
Period.
SECTION 1.03.
DETERMINATION OF MTA.
MTA for any Interest Accrual Period will be determined as described
below.
MTA shall be established by the Trustee for each Interest
Accrual Period.
MTA is a per annum rate equal to the
twelve-month
moving
average
monthly yield on United States
Treasury
securities
adjusted to a constant
maturity of one year as published by the
Federal
Reserve Board in statistical
Release No.
H.15(519),
or the Release,
determined by averaging the monthly yield for the most
recent twelve
months.
The MTA used for each Interest
Accrual
Period will be the most recent MTA figure
available as of the related
MTA Determination Date.
If MTA is no longer available, the new index relating to the Class
X Certificates will be LIBOR.
The
establishment
of MTA by the
Trustee
and
the
Master
Servicer's
subsequent
calculation
of the
Pass-Through
Rates
applicable to the Class A Certificates for the relevant
Interest Accrual Period,
in the absence of manifest error,
will be final and
binding.
Promptly
following
each MTA
Determination
Date the
Trustee
shall
supply the
Master
Servicer
with the
results of its
determination of MTA on such date.
SECTION 1.04.
USE OF WORDS AND PHRASES.
"Herein," "hereby," "hereunder," "hereof,"
"hereinbefore,"
"hereinafter" and other equivalent words refer to the Pooling and
Servicing
Agreement as a whole. All references
herein to Articles,
Sections or Subsections
shall mean the
corresponding
Articles,
Sections and
Subsections in the Pooling and Servicing
Agreement.
The
definitions set forth herein include both the singular and the
plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01.
CONVEYANCE OF MORTGAGE LOANS.
(a)
(See Section 2.01(a) of the Standard Terms).
(b)
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 (1) with respect to each
Mortgage
Loan
deliver to the Master
Servicer (or an affiliate of the Master
Servicer)
each of the documents or
instruments
described in clause (ii) below (and the Master
Servicer
shall hold (or cause such affiliate to
hold) such documents or instruments
in trust for the use and benefit of all present and future
Certificateholders),
(2) with respect
to each MOM Loan,
deliver to and deposit with the Trustee,
or the Custodian on behalf of the Trustee,
the
documents or
instruments
described in clauses (i) and (v) below,
(3) with respect to each
Mortgage
Loan that is not a MOM Loan but is registered on the MERS(R)
System,
deliver to and deposit with the Trustee, or to the Custodian on
behalf of the Trustee, the documents or instruments
described
in clauses (i), (iv) and (v) below,
(4) with respect to each
Mortgage Loan that is not a MOM Loan and is not
registered on the MERS(R)
System,
deliver to and deposit with the Trustee, or to the Custodian on
behalf of the Trustee, the documents or instruments
described
in clauses (i), (iii), (iv) and (v) below:
(i)
The original Mortgage Note,
endorsed without recourse in blank or 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)
The 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
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;
(c)
The Company may, in lieu of delivering
the original of the documents
set forth in Sections
2.01(b)(iii),
(iv) and
(v) (or copies
thereof) to the Trustee or to the Custodian on behalf of the
Trustee,
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 Sections
2.01(b)(iii),
(iv) and (v) (or copies thereof) 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 to the Custodian on behalf
of the Trustee.
The parties
hereto
agree that it is not intended
that any Mortgage
Loan be included in the Trust Fund that is either (i) a
"High-Cost
Home Loan" as defined in the New Jersey Home
Ownership Act effective
November 27, 2003,
(ii) a "High-Cost
Home Loan" as
defined in the New Mexico Home Loan
Protection
Act effective
January 1, 2004,
(iii) a "High Cost Home Mortgage
Loan" as defined in
the
Massachusetts
Predatory
Home Loan
Practices
Act effective
November 7, 2004 or (iv) a "High-Cost
Home Loan" as defined in the
Indiana House Enrolled Act No. 1229, effective as of January 1,
2005.
(d)
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 to the
Custodian
on behalf of the
Trustee
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 (iii) of Section
2.01(b),
except (a) in states where,
in the opinion of counsel
acceptable to the Trustee and
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.
If any
Assignment
is lost or
returned
unrecorded
to the
Company
because of any defect
therein,
the Company shall prepare a substitute
Assignment,
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
applicable
person
described in Section
2.01(b) any
Assignment or substitute
Assignment
(or copy thereof)
recorded in connection
with this paragraph
with evidence of recording indicated thereon at the time specified
in Section 2.01(c).
If the Company
delivers to the Trustee or to the
Custodian
on behalf of the Trustee
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 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.
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)
(See Section 2.01(e) of the Standard Terms).
(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
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
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
Regular
Interests
by the Company to the Trustee to secure a debt or other
obligation
of the
Company.
Nonetheless,
(a) this
Agreement
is
intended to be and hereby is 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 the related
Mortgage Note,
the Mortgage,
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
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, any Custodian on behalf of the
Trustee 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, 9-314 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
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 any Uncertificated
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 type or jurisdiction of organization 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 Regular Interest.
(g)
The Master Servicer hereby
acknowledges
the receipt by it of each Initial Monthly Payment Fund. The Master
Servicer
shall hold each Initial
Monthly
Payment Fund in the Custodial
Account and shall include the related
Initial Monthly Payment Fund in
the Available
Distribution Amount for the each Loan Group for the initial
Distribution Date.
Notwithstanding
anything herein to the
contrary,
neither
Initial
Monthly
Payment Fund shall be an asset of any REMIC.
To the extent that either 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 such
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)
(See Section 2.01(h) of the Standard Terms).
(i)
In connection with such assignment,
and contemporaneously with the delivery of this Agreement, the
Company delivered
or caused to be delivered
hereunder to the Trustee,
the Yield
Maintenance
Agreement
and Yield
Maintenance
Floor
Agreement
(the
delivery of which shall
evidence
that the fixed
payment for each of the Yield
Maintenance
Agreement
and Yield
Maintenance
Floor
Agreement
has been paid and the Trustee and the Trust Fund shall have no
further
payment
obligation
thereunder
and that such fixed
payment has been authorized hereby).
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)
above
(except that for
purposes of such
acknowledgement
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
Custodial
Files
delivered
to it, or the
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
(the Custodian
being so
obligated
under a
Custodial
Agreement)
agrees,
for the benefit of
Certificateholders,
to review
each
Custodial
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
Custodial
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 Custodial File to
be missing or defective,
the Custodian
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
Custodial
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
Residential
Funding to 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,
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
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 Master Servicer,
the Trustee
or the
Custodian,
as the case may be, shall release the contents of any related
Mortgage File in its possession to the owner of such
Mortgage
Loan (or such owner's
designee),
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)
For representations, warranties and covenants of the Master
Servicer, see Section 2.03(a) of the Standard Terms.
(b)
The Company hereby
represents and warrants to the Trustee for the benefit of
Certificateholders
that as of the Closing Date
(or, if otherwise specified below, as of the date so specified):
(i)
No Mortgage
Loan is 30 or more days
Delinquent
in payment of principal
and interest as of the Cut-off Date and no Mortgage
Loan has been so Delinquent more than once in the 12-month period
prior to the Cut-off Date;
(ii)
The
information
set forth in Exhibit One hereto with respect to each
Mortgage Loan or the Mortgage
Loans,
as the case may
be, is true and correct in all material respects at the date or
dates respecting which such information is furnished;
(iii)
The
Mortgage
Loans are
payment-option
adjustable-rate
Mortgage
Loans with a negative
amortization
feature with Monthly
Payments due, with respect to a majority of the Mortgage
Loans, on the first day of each month and terms to maturity
at origination or modification of not more than 40 years;
(iv)
To the best of the Company's
knowledge,
except with respect to three Mortgage
Loans,
representing no more than 0.1% of the
aggregate Stated Principal
Balance of the Mortgage Loans if a Mortgage Loan is secured by a
Mortgaged
Property with
a
Loan-to-Value
Ratio at
origination
in excess of 80%, such
Mortgage Loan is the subject of a Primary
Insurance
Policy that insures (a) at least 35% of the Stated
Principal
Balance of the
Mortgage
Loan at
origination
if the
Loan-to-Value
Ratio is between 100.00% and 95.01%,
(b) at least 30% of the Stated Principal Balance of the Mortgage
Loan at origination if the Loan-to-Value
Ratio is between 95.00% and 90.01%, (c) at least 25% of such
balance if the
Loan-to-Value
Ratio is between 90.00% and 85.01% and (d) at least 12% of such
balance if the Loan-to-Value
Ratio is
between 85.00% and 80.01%.
To the best of the Company's
knowledge,
each such Primary
Insurance
Policy is in full
force and effect and the Trustee is entitled to the benefits
thereunder;
(v)
The issuers of the Primary Insurance Policies are insurance
companies whose claims-paying
abilities are currently
acceptable
to each Rating Agency;
(vi)
No more than 0.6% of the Group I Loans by aggregate Stated
Principal
Balance as of the Cut-off Date are secured by Mortgaged
Properties
located in any one zip code area in
California,
and no more than 0.4% of the Group I Loans by aggregate
Stated Principal Balance as of the Cut-off Date are secured by
Mortgaged
Properties located in any one zip code area
outside
California;
no more than 0.8% of the Group II Loans by aggregate Stated
Principal Balance as of the Cut-off
Date are secured by Mortgaged
Properties
located in any one zip code area in
California,
and no more than 0.6% of
the Group II Loans by aggregate Stated Principal
Balance as of the Cut-off Date are secured by Mortgaged
Properties
located
in any one zip code area
outside
California;
and no more
than
0.7% of the Group III Loans by
aggregate
Stated Principal Balance as of the Cut-off Date are secured by
Mortgaged
Properties located in any one zip code area
in California,
and no more than 0.5% of the Group III Loans by aggregate Stated
Principal
Balance as of the Cut-off
Date are secured by Mortgaged Properties located in any one zip
code area outside California;
(vii)
The improvements
upon the Mortgaged
Properties are insured against loss by fire and other hazards as
required by the Program
Guide,
including
flood
insurance if required
under the National
Flood
Insurance
Act of 1968,
as amended.
The
Mortgage
requires
the
Mortgagor
to maintain
such
casualty
insurance
at the
Mortgagor's
expense,
and on the
Mortgagor's
failure to do so,
authorizes
the holder of the Mortgage to obtain and maintain
such
insurance at the
Mortgagor's expense and to seek reimbursement therefor from the
Mortgagor;
(viii)
Immediately
prior to the
assignment
of the Mortgage
Loans to the Trustee,
the Company had good title to, and was the sole
owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest (other than rights
to servicing and related
compensation) and such assignment validly transfers
ownership of the Mortgage Loans to the
Trustee free and clear of any pledge, lien, encumbrance or security
interest;
(ix)
No more than
90.10% of the Group I Loans by
aggregate
Stated
Principal
Balance as of the Cut-off
Date were
underwritten
under a reduced loan
documentation
program,
no more than 0.62% of the Group I Loans by aggregate
Stated Principal
Balance as of the Cut-off Date were
underwritten
under a no-stated
income
program,
and no more than 0.76% of the
Group I Loans by aggregate Stated
Principal
Balance as of the Cut-off Date were
underwritten
under a no income/no
asset
program;
no more than 93.08% of the Group II Loans by aggregate
Stated
Principal
Balance as of the Cut-off
Date were
underwritten
under a reduced
loan
documentation
program,
no more than
0.25% of the Group II Loans by
aggregate Stated Principal Balance as of the Cut-off Date were
underwritten under a no-stated income program,
and no
more than 0.20% of the Group II Loans by aggregate Stated Principal
Balance as of the Cut-off Date were underwritten
under a no income/no
asset
program;
and no more than 88.84% of the Group III Loans by aggregate
Stated
Principal
Balance as of the Cut-off Date were underwritten
under a reduced loan documentation
program,
no more than 0.41% of
the Group III Loans by aggregate Stated Principal Balance as of the
Cut-off Date were underwritten
under a no-stated
income
program,
and no more than
0.21% of the Group III Loans by
aggregate
Stated
Principal
Balance
as of the
Cut-off Date were underwritten under a no income/no asset program;
(x)
Except with respect to no more than 8.40% of the Group I Loans by
aggregate Stated
Principal
Balance as of the Cut-off Date,
no more than 4.06% of the Group II Loans by
aggregate
Stated
Principal
Balance as of the Cut-off Date and no more
than 6.87% of the Group III Loans by
aggregate
Stated
Principal
Balance as of the
Cut-off
Date,
the
Mortgagor
represented in its loan application
with respect to the related
Mortgage Loan that the Mortgaged
Property would be
owner-occupied;
(xi)
None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(xii)
Each Mortgage Loan constitutes a qualified
mortgage under Section
860G(a)(3)(A) of the Code and Treasury
Regulation Section
1.860G-2(a)(1),
(2), (4), (5), (6), (7) and (9) without
reliance on the provisions of Treasury
Regulation
Section
1.860G-2(a)(3) or Treasury Regulation Section
1.860G-2(f)(2) or any other provision that would allow a Mortgage
Loan
to
be
treated
as a
"qualified
mortgage"
notwithstanding
its
failure
to
meet
the
requirements
of
Section
860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1), (2), (4), (5), (6), (7) and (9);
(xiii)
A policy of title
insurance
was
effective as of the closing of each
Mortgage
Loan and is valid and binding and remains in
full
force
and
effect,
unless
the
Mortgaged
Properties
are
located
in the
State of Iowa and an
attorney's
certificate has been provided as described in the Program Guide;
(xiv)
No Mortgage Loan is a Cooperative Loan;
(xv)
With respect to each Mortgage Loan
originated
under a "streamlined"
Mortgage Loan program
(through which no new or updated
appraisals of Mortgaged Properties are obtained in connection with
the refinancing
thereof),
the related Seller has
represented
that
either
(a) the value of the
related
Mortgaged
Property
as of the date the
Mortgage
Loan was
originated
was not less than the
appraised
value of such
property at the time of
origination
of the
refinanced
Mortgage Loan or (b) the Loan-to-Value
Ratio of the Mortgage Loan as of the date of origination of the
Mortgage Loan
generally meets the Company's underwriting guidelines;
(xvi)
Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(xvii)
None of the Mortgage Loans contain in the related Mortgage File a
Destroyed Mortgage Note;
(xviii)
Six of the Mortgage Loans, representing approximately 0.1% of the
Mortgage Loans, have been made to International Borrowers;
(xix)
No Mortgage Loan provides for payments that are subject to
reduction by
withholding
taxes levied by any foreign
(non-United
States) sovereign government; and
(xx)
None of the Mortgage Loans are Additional Collateral Loans and none
of the Mortgage Loans are Pledged Asset Loans.
It is understood and agreed that the
representations
and warranties set forth in this Section
2.03(b) shall survive
delivery of the
respective Custodial Files to the Trustee or the Custodian.
Upon
discovery
by any of the
Company,
the
Master
Servicer,
the
Trustee
or any
Custodian
of a
breach
of any of the
representations
and
warranties
set forth in this
Section
2.03(b)
that
materially
and
adversely
affects the
interests
of the
Certificateholders
in any Mortgage Loan, the party
discovering such breach shall give prompt written notice to the
other parties (the
Custodian being so obligated under a Custodial Agreement);
provided,
however, that in the event of a breach of the representation and
warranty set forth in Section
2.03(b)(xii),
the party
discovering
such breach shall give such notice within five days of discovery.
Within 90 days of its
discovery
or its receipt of notice of breach,
the Company
shall
either (i) cure such breach in all
material
respects or (ii) purchase
such
Mortgage
Loan from the Trust Fund at the Purchase
Price and in the manner set forth in Section 2.02;
provided that the Company shall have the option to substitute a
Qualified
Substitute
Mortgage Loan or Loans for such Mortgage Loan if
such
substitution
occurs
within two years
following
the Closing
Date;
provided
that if the
omission or defect
would cause the
Mortgage Loan to be other than a "qualified
mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase
must
occur within 90 days from the date such breach was discovered.
Any such
substitution
shall be effected by the Company under the same
terms and
conditions as provided in Section 2.04 for
substitutions
by
Residential
Funding.
It is
understood
and agreed that the
obligation
of the
Company to cure such breach or to so purchase or
substitute
for any
Mortgage
Loan as to which such a breach has
occurred and is continuing shall constitute the sole remedy
respecting such breach available to the
Certificateholders
or the Trustee
on behalf of the Certificateholders.
SECTION 2.04.
REPRESENTATIONS AND WARRANTIES OF SELLERS.(See Section 2.04 of the
Standard Terms)
SECTION 2.05.
EXECUTION AND AUTHENTICATION OF
CERTIFICATES/ISSUANCE
OF CERTIFICATES
EVIDENCING
INTERESTS IN REMIC I, REMIC II,
REMIC III AND REMIC IV.
The Trustee
acknowledges
the
assignment to it of the Mortgage
Loans and the delivery of the Custodial
Files to it, or the
Custodian on its behalf,
subject to any
exceptions
noted,
