RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
SERIES SUPPLEMENT,
DATED AS OF JULY 1, 2005,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
DATED AS OF MAY 1, 2005
Mortgage Pass-Through Certificates
Series 2005-SA3
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
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Section 1.01
Definitions...............................................................4
Section 1.02 Use of
Words and
Phrases.................................................22
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance
of Mortgage
Loans.............................................22
Section 2.02 Acceptance
by
Trustee....................................................22
Section 2.03
Representations, Warranties and Covenants of the Master
Servicer
and the
Company..........................................................23
Section 2.04
Representations and Warranties of
Sellers................................25
Section 2.05 Execution
and Authentication of Certificates/Issuance of
Certificates.............................................................28
Section 2.06 Conveyance
of Uncertificated REMIC I and REMIC II Regular
Interests; Acceptance by the
Trustee.....................................28
Section 2.07 Issuance
of Certificates Evidencing Interest in REMIC
II.................28
Section 2.08 Purposes
and Powers of the
Trust.........................................28
Section 2.09 Agreement
Regarding Ability to
Disclose..................................28
ARTICLE III
ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS (SEE ARTICLE III OF THE STANDARD TERMS)
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01
Certificate
Account......................................................29
Section 4.02
Distributions............................................................29
Section 4.03 Statements
to Certificateholders; Statements to Rating Agencies;
Exchange Act
Reporting...................................................36
Section 4.04
Distribution of Reports to the Trustee and the Company; Advances
by
the Master
Servicer......................................................36
Section 4.05 Allocation
of Realized
Losses............................................36
Section 4.06 Reports of
Foreclosures and Abandonment of Mortgaged
Property............38
Section 4.07 Optional
Purchase of Defaulted Mortgage
Loans............................38
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates........................................................38
Section 5.02
Registration of Transfer and Exchange of Certificates (See
Section
5.02 of the Standard
Terms)..............................................40
Section 5.03 Mutilated,
Destroyed, Lost or Stolen Certificates (See Section 5.03
of the Standard
Terms)...................................................40
Section 5.04 Persons
Deemed Owners (See Section 5.04 of the Standard
Terms)...........40
Section 5.05
Appointment of Paying Agents (See Section 5.05 of the Standard
Terms)...................................................................40
ARTICLE VI
THE COMPANY AND THE MASTER
SERVICER (SEE ARTICLE VI OF THE STANDARD TERMS)
ARTICLE VII
DEFAULT (SEE ARTICLE VII OF THE STANDARD TERMS)
ARTICLE VIII
CONCERNING THE TRUSTEE (SEE ARTICLE VIII OF THE STANDARD TERMS)
ARTICLE IX
TERMINATION
Section 9.01 Optional
Purchase by Residential Funding of All Certificates;
Termination Upon Purchase by Residential Funding or Liquidation
of
All Mortgage
Loans.......................................................40
Section 9.02 Additional
Termination Requirements. (See Section 9.02 of the
Standard
Terms)..........................................................41
Section 9.03
Termination of Multiple REMICs. (See Section 9.03 of the
Standard
Terms)...................................................................41
ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC
Administration.....................................................41
Section 10.02 Master Servicer;
REMIC Administrator and Trustee Indemnification.........41
Section 10.03 Designation of
REMIC(s)..................................................41
Section 10.04 Distributions on
the Uncertificated REMIC I Regular Interests............42
Section 10.05 Compliance with
Withholding Requirements.................................43
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment................................................................44
Section 11.02 Recordation of
Agreement.................................................44
Section 11.03 Limitation on
Rights of Certificateholders...............................44
Section 11.04 Governing
Laws...........................................................44
Section 11.05
Notices..................................................................44
Section 11.06 Required Notices to Rating Agency
and Subservicer........................45
Section 11.07 Severability of
Provisions...............................................46
Section 11.08 Supplemental
Provisions for Resecuritization.............................46
Section 11.09 Allocation of
Voting Rights..............................................46
Section 11.10 No
Petition..............................................................46
EXHIBITS
Exhibit One:
Mortgage Loan Schedule for Loan Group I
Exhibit Two:
Mortgage Loan Schedule for Loan Group II
Exhibit Three:
Mortgage Loan Schedule for Loan Group III
Exhibit Four
Mortgage Loan Schedule for Loan Group IV
Exhibit Five:
Information to be Included in
Monthly Distribution Date Statement
Exhibit Six:
Standard Terms of Pooling and Servicing
Agreement dated as of May 1, 2005
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<PAGE>
This is a Series
Supplement, dated
as of July 1,
2005 (the "Series
Supplement"), to the Standard Terms of
Pooling and Servicing Agreement, dated as
of May 1, 2005 and attached as Exhibit Six hereto
(the "Standard Terms" and,
together with this Series Supplement,
the "Pooling and
Servicing Agreement"
or
"Agreement"), among RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC., as the
company (together with its permitted
successors and
assigns, the
"Company"),
RESIDENTIAL FUNDING CORPORATION, as master
servicer (together with its permitted
successors and assigns, the "Master Servicer"), and U.S. BANK NATIONAL
ASSOCIATION, as Trustee (together with its
permitted successors and assigns, the
"Trustee").
PRELIMINARY STATEMENT
The Company
intends
to sell Mortgage Pass-Through Certificates
(collectively, the "Certificates"),
to be issued hereunder
in multiple classes,
which in the aggregate will evidence the
entire beneficial ownership interest in
the Trust Fund. As provided herein, the REMIC Administrator will make an
election to treat the entire segregated pool of assets described in the
definition of REMIC I (as defined herein), and subject to this Agreement
(including the Mortgage Loans but excluding
the Initial Monthly
Payment Fund),
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
Uncertificated REMIC I Regular Interests will be
"regular interests" in REMIC I
and the Class R-I Certificates will be the
sole class of "residual interests" in
REMIC I for purposes of the REMIC
Provisions (as defined
herein). A
segregated
pool of assets consisting of the
Uncertificated
REMIC I Regular
Interests will
be designated as "REMIC II" and the REMIC
Administrator
will make a
separate
REMIC election with respect thereto. The Uncertificated REMIC II Regular
Interests will be "regular interests" in REMIC II and the Class R-II
Certificates will be the sole class of "residual interests" in REMIC II for
purposes of the REMIC provisions (as defined herein). A segregated pool of
assets consisting of the Uncertificated REMIC II Regular Interests will be
designated as "REMIC III" and the REMIC
Administrator will make a separate REMIC
election with respect thereto. The Class I-A Certificates, Class II-A-1
Certificates, Class II-A-2 Certificates, Class
II-A-3 Certificates, Class III-A
Certificates, Class IV-A Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class B-1 Certificates, Class B-2
Certificates and Class B-3 Certificates, will be "regular interests" in REMIC
III and the Class R-III Certificates will be the sole class of "residual
interests" therein for purposes of the
REMIC Provisions.
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. Any cross-reference to a section of the Pooling
and
Servicing Agreement, to the extent the terms of the
Standard Terms and
Series
Supplement conflict with respect to that
section, shall be a
cross-reference to
the related section of the Series Supplement. 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 the
Series Supplement.
The following
table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass-Through Rate,
the initial
Uncertificated
Principal
Balance, and for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
Uncertificated REMIC I Regular Interests.
None of the
Uncertificated
REMIC I
Regular Interests will be certificated.
1
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INITIAL
UNCERTIFICATED
UNCERTIFICATED ----------------
LATEST
REMIC I
PRINCIPAL
POSSIBLE
DESIGNATION
PASS-THROUGH RATE
BALANCE
MATURITY(1)
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Uncertificated REMIC I Regular
Variable(2)
$
734.82
August 25, 2035
Interest I-A
Uncertificated REMIC I Regular
Variable(2)
$ 17,499.95
August 25,
2035
Interest I-B
Uncertificated REMIC I Regular
Variable(2)
$ 1,051.32
August 25,
2035
Interest II-A
Uncertificated REMIC I Regular
Variable(2)
$ 25,019.22
August 25,
2035
Interest II-B
Uncertificated REMIC I Regular
Variable(2)
$
524.95
August 25, 2035
Interest III-A
Uncertificated REMIC I Regular
Variable(2)
$ 12,502.75
August 25,
2035
Interest III-B
Uncertificated REMIC I Regular
Variable(2)
$
524.95
August 25, 2035
Interest IV-A
Uncertificated REMIC I Regular
Variable(2)
$ 12,500.45
August 25,
2035
Interest IV-B
Uncertificated REMIC I Regular
Variable(2)
$675,153,022.33 August 25, 2035
Interest ZZZ
Uncertificated REMIC I Regular
Variable(2)
$
200.00
August 25, 2035
Interest R-II
_______________________
(1) For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the
Distribution
Date immediately
following the maturity
date for the Mortgage
Loan with the latest maturity date has been designated as the "latest
possible maturity
date" for each Uncertificated REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate"
herein.
The following
table irrevocably sets forth the designation, the
Uncertificated REMIC II Pass-Through Rate,
the initial Uncertificated Principal
Balance, and for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
Uncertificated REMIC II Regular Interests.
None of the
Uncertificated REMIC II
Regular Interests will be certificated.
INITIAL
UNCERTIFICATED
UNCERTIFICATED ----------------
LATEST
REMIC II
PRINCIPAL
POSSIBLE
DESIGNATION
PASS-THROUGH RATE
BALANCE
MATURITY(1)
Uncertificated REMIC II Regular
Variable(2)
$167,651,000.00 August 25, 2035
Interest I-A
Uncertificated REMIC II Regular
Variable(2)
$179,760,000.00 August 25, 2035
Interest II-A-1
Uncertificated REMIC II Regular
Variable(2)
$59,919,000.00 August
25, 2035
Interest II-A-2
Uncertificated REMIC II Regular
Variable(2)
$119,778,000.00 August 25, 2035
Interest III-A
Uncertificated REMIC II Regular
Variable(2)
$119,755,000.00 August 25, 2035
Interest IV-A
Uncertificated REMIC II Regular
Variable(2)
$10,804,000.00 August
25, 2035
Interest M-1
Uncertificated REMIC II Regular
Variable(2)
$6,752,000.00
August 25, 2035
Interest M-2
Uncertificated REMIC II Regular
Variable(2)
$4,389,000.00
August 25, 2035
Interest M-3
Uncertificated REMIC II Regular
Variable(2)
$3,039,000.00
August 25, 2035
Interest B-1
Uncertificated REMIC II Regular
Variable(2)
$2,025,000.00
August 25, 2035
Interest B-2
Uncertificated REMIC II Regular
Variable(2)
$1,351,380.74
August 25, 2035
Interest B-3
Uncertificated REMIC II Regular
Variable(2)
$
100.00
August 25, 2035
Interest R-III
</TABLE>
_______________________
(1) For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, the
Distribution
Date immediately
following the maturity
date for the Mortgage
Loan with the latest maturity date has been designated as the "latest
possible maturity
date" for each Uncertificated REMIC II Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC II
Pass-Through Rate"
herein.
The following table sets forth the designation, type, Pass-Through
Rate,
aggregate Initial Certificate Principal
Balance, Maturity
Date, initial ratings
and certain features for each Class of
Certificates
comprising the interests in
the Trust Fund created hereunder.
2
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AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH PRINCIPAL
MATURITY
MOODY'S/
MINIMUM
DESIGNATION RATE
BALANCE FEATURES(1)
DATE
S&P
DENOMINATIONS(2)
<S>
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<C>
Class I-A Variable
$167,651,000.00
Senior August
Aaa/AAA $ 25,000
Rate(3)
25, 2035
Class II-A-1 Variable
$179,760,000.00
Senior August
Aaa/AAA $ 25,000
Rate(3)
25, 2035
Class II-A-2 Variable
$59,919,000.00 Senior August
Aaa/AAA $ 25,000
Rate(4)
25, 2035
Class II-A-3 Variable
$
0.00(6) Senior
May 25,
Aaa/AAA
$
2,000,000
Rate(5)
2010
Class III-A Variable
$119,778,000.00
Senior August
Aaa/AAA $ 25,000
Rate(3)
25, 2035
Class IV-A Variable
$119,755,000.00
Senior August
Aaa/AAA $ 25,000
Rate(3)
25, 2035
Class M-1 Variable
$10,804,000.00
Mezzanine August
Aa2/AA
$25,000
Rate(7)
25, 2035
Class M-2 Variable
$6,752,000.00
Mezzanine August
A2/A+
$250,000
Rate(7)
25, 2035
Class M-3 Variable
$4,389,000.00
Mezzanine August
Baa2/BBB
$250,000
Rate(7)
25, 2035
Class R-I Variable
$
100.00 Senior/Residual
August
Aaa/AAA
20%
Rate(3)
25, 2035
Class R-II Variable
$
100.00 Senior/Residual
August
Aaa/AAA
20%
Rate(3)
25, 2035
Class R-III Variable
$
100.00 Senior/Residual
August
Aaa/AAA
20%
Rate(3)
25, 2035
Class B-1 Variable
$3,039,000.00
Subordinate August
NA/BB
$250,000
Rate(7)
25, 2035
Class B-2 Variable
$2,025,000.00
Subordinate August
NA/B
$250,000
Rate(7)
25, 2035
Class B-3 Variable
$1,351,380.74
Subordinate August
NA/NA
$250,000
Rate(7)
25, 2035
</TABLE>
_________
(1) The Class I-A,
Class II-A-1, Class
II-A-2, Class II-A-3,
Class III-A,
Class IV-A, and Class M Certificates shall be Book-Entry Certificates.
The Class R and Class B Certificates shall be delivered to the
holders
thereof in physical form.
(2) The Certificates shall be issuable in minimum
dollar denominations
as
indicated above
(by Certificate Principal Balance) and integral
multiples of $1 (or
$1,000 in the case of the Class B-1, Class B-2 and
Class B-3
Certificates) in excess thereof, except that one Certificate
of the Class B-3 Certificates that contains an uneven multiple of
$1,000
shall be issued in a denomination equal to the sum of the related
minimum denomination
set forth above and
such uneven multiple for such
Class or the sum of
such denomination and an integral multiple of
$1,000. The
Class R Certificates shall be issuable in minimum
denominations of not
less than a 20%
Percentage
Interest; provided,
however, that one of
each of the Class R Certificates will be issuable
to Residential
Funding as "tax
matters person" pursuant to Section
10.01(c) and (e) in a
minimum denomination
representing
a Percentage
Interest of not less than 0.01%.
(3) With respect to
the Class I-A, Class II-A-1, Class III-A, Class IV-A and
Class R Certificates, the pass-through rate will be equal to the
weighted average of
the Net Mortgage Rates
on Group I Loans,
Group II
Loans, Group III Loans, Group IV Loans, and Group I Loans,
respectively.
The initial
pass-through rate for
the Class I-A, Class
II-A-1, Class
III-A, Class
IV-A and Class R Certificates will be equal to
approximately 4.97976%, 5.17548%, 5.25004%, 5.35502% and 4.97976% per
annum,
respectively.
(4) On or before the
May 2010 distribution
date, the pass-through
rate for
the Class II-A-2 Certificates will be equal to the lesser of (i)
4.98000% per annum and (ii) the weighted average net mortgage rates on
the group II loans. After the May 2010 distribution date, the
pass-through rate for
the Class II-A-2 Certificates will equal the
weighted average net
mortgage rates on the group II loans. The initial
pass-through rate for
the Class II-A-2
Certificates
will be equal to
approximately 4.98000% per annum.
(5) The pass-through
rate on the Class II-A-3 Certificates will be equal to
the weighted average
net mortgage rates on the group II loans minus the
certificate rate payable to the Class II-A-2 Certificates. The initial
pass-through rate for
the Class II-A-3
Certificates
will be equal to
approximately 0.19548%
per annum.
(6) The Class II-A-3 Certificates do not have a certificate principal
balance.
For the purpose of calculating interest payments, interest on
the Class II-A-3
Certificates will accrue on a notional amount equal to
the certificate
principal balance of the Class II-A-2 Certificates,
which is initially equal to approximately $59,919,000.
(7) For any
Distribution Date, the Pass-Through rate on the Class M-1,
Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates
will be
equal to the weighted average of the Net WAC Rates on the Group I,
Group
II, Group III and Group IV Loans, weighted in proportion to the
related
Subordinate Amount.
The initial Pass-Through Rate on the Class M-1,
Class M-2, Class M-3,
Class B-1, Class B-2
and Class B-3
Certificates
will be equal to approximately 5.17180% per annum.
The Mortgage Loans have an aggregate principal balance as of the
Cut-off
Date of $675,223,680.74.
In consideration of the mutual agreements herein contained, the
Company,
the Master Servicer and the Trustee agree
as follows:
3
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the meanings specified in this
Article.
Adjustment Date: As to
each Mortgage Loan,
each date set forth in
the
related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
Available Distribution
Amount: With respect to each Loan Group,
the
excess of (i) the sum of (a) the amount
described in the definition of Available
Distribution Amount in the Standard
Terms and (b) the
amount allocated to
the
Available Distribution Amount for such Loan Group
pursuant to Section
4.02(c)
over (ii) any amount allocated to the
Available Distribution Amount of any other
Loan Group pursuant to Section 4.02(c).
Bankruptcy
Amount: As of any date of determination
prior to the first
anniversary of the Cut-off Date, an amount
equal to the excess,
if any, of (A)
$211,880 over (B) the aggregate amount of
Bankruptcy Losses
allocated solely to
one or more specific Classes of Certificates in
accordance with Section 4.05 of
this Series Supplement. As of any date of determination on or after the
first
anniversary of the Cut-off Date, an amount
equal to the excess, if any, of
(1) the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most
recent anniversary of the Cut-off Date coinciding with or preceding
such
date of determination (or, if such date of determination is an
anniversary of the Cut-off Date, the Business Day immediately
preceding
such date of
determination)
(for purposes of this definition, the
"Relevant Anniversary") and (b) the greater of
(A) the greater of (i) 0.0006 times the aggregate
principal balance of
all the Mortgage Loans in the Mortgage Pool
as of the Relevant Anniversary (other than Additional Collateral
Loans, if any) having a Loan-to-Value Ratio at origination which
exceeds 75% and (ii) $211,880; and
4
<PAGE>
(B) the greater of (i) the product of (x) an amount equal
to the
largest difference in
the related Monthly Payment for any
Non-Primary Residence
Loan remaining in the Mortgage Pool (other
than Additional
Collateral Loans, if
any) which had an original
Loan-to-Value Ratio of
80% or greater that
would result if
the
Net Mortgage
Rate thereof was equal to the weighted average
(based on the principal balance of the Mortgage
Loans as of the
Relevant Anniversary)
of the Net Mortgage
Rates of all Mortgage
Loans as of the Relevant Anniversary less 1.25% per annum,
(y) a
number equal to the weighted average remaining term to maturity,
in months, of all
Non-Primary
Residence Loans
remaining in the
Mortgage Pool as of
the Relevant
Anniversary, and (z)
one plus
the quotient of the
number of all
Non-Primary Residence
Loans
remaining in the
Mortgage Pool divided by the total number of
Outstanding Mortgage
Loans in the Mortgage Pool as of the
Relevant Anniversary,
and (ii) $211,880,
over (2) the aggregate
amount of Bankruptcy Losses allocated solely to one or more
specific Classes of
Certificates in accordance with Section 4.05
since the Relevant Anniversary.
The Bankruptcy
Amount may be further reduced by the Master Servicer
(including accelerating the manner in which
such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i)
obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Certificate: Any Class
A, Class M, Class B or Class R Certificate.
Certificate Account:
The separate account or accounts created and
maintained pursuant to Section 4.01 of the Standard Terms, which shall be
entitled "U.S. Bank National Association, as trustee, in trust for the
registered holders of Residential
Funding Mortgage
Securities I, Inc., Mortgage
Pass-Through Certificates, Series 2005-SA3" and which must be an Eligible
Account.
Certificate Group:
With respect to (i) Loan Group I, the Class I-A
Certificates and the Class R Certificates,
(ii) Loan Group II, the Class II-A-1,
Class II-A-2 and Class II-A-3 Certificates, (iii) Loan Group III, the Class
III-A Certificates and (iv) Loan Group IV,
the Class IV-A Certificates.
Class A Certificate: Any one of the Group I Certificates (other
than the
Class R Certificates), the Group II Certificates, the
Group III Certificates or
the Group IV Certificates, executed by the Trustee
and authenticated by the
Certificate Registrar substantially in the
form annexed to the Standard Terms as
Exhibit A.
5
<PAGE>
Class R Certificate:
Any one of the Class R-I Certificates, Class R-II
Certificates and 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 the each REMIC for
purposes of the REMIC Provisions.
Closing Date: July 28,
2005.
Corporate Trust Office: The principal office of the
Trustee at which at
any particular time its corporate trust business
with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at U.S. Bank
National Association, U.S. Bank Corporate
Trust Services, EP-MN-WS3D, 60 Livingston Avenue, St. Paul, Minnesota 55107,
Attention: RFMSI 2005-SA3.
Cut-off Date: July 1,
2005.
Determination Date:
With respect to any
Distribution Date, the
second
Business Day prior to such Distribution
Date.
Due Period: With
respect to each
Distribution
Date and any
Mortgage
Loan, the calendar month of such
Distribution Date.
Eligible Account:
An account that is any of the following: (i)
maintained with a depository institution
the debt obligations of which have been
rated by each Rating Agency in its highest
rating available, or
(ii) an account
or accounts in a depository institution in
which such accounts are fully insured
to the limits established by the FDIC,
provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency,
as evidenced in writing,
be maintained such that (as evidenced by an
Opinion of Counsel
delivered to the
Trustee and each Rating Agency) the
registered Holders of
Certificates
have a
claim with respect to the funds in such
account or a perfected
first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository
institution with which such account is
maintained, or (iii) in the case of the
Custodial Account,
a trust account or
accounts maintained in the corporate trust department of U.S. Bank
National
Association, or (iv) in the case of the
Certificate Account, a trust account or
accounts maintained in the corporate
trust division of the
Trustee, or (v) an
account or accounts of a depository
institution acceptable to each Rating Agency
(as evidenced in writing by each
Rating Agency that use
of any such account as
the Custodial Account or the Certificate Account will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the
lower of
the then-current rating or the rating assigned to
such Certificates as
of the
Closing Date by such Rating Agency)
Fraud Loss Amount:
As of any date of
determination
after the Cut-off
Date, an amount equal to: (X) prior to the first
anniversary
of the Cut-off
Date, an amount equal to 3.0% of the
aggregate outstanding
principal balance of
all of the Mortgage Loans as of the Cut-off Date minus
the aggregate amount
of
Fraud Losses allocated solely to one or
more specific Classes of Certificates in
accordance with Section 4.05 of this Series
Supplement since the Cut-off Date up
to such date of determination, (Y) from the first to the second
anniversary of
the Cut-off Date, an amount equal to (1)
the lesser of (a) the Fraud Loss Amount
as of the most recent anniversary of the Cut-off Date and (b) 2.0% of the
aggregate outstanding principal balance of all of the
Mortgage Loans as of the
most recent anniversary of the Cut-off Date minus (2) the
aggregate amount
of
Fraud Losses allocated solely to one or
more specific Classes of Certificates in
accordance with Section 4.05 of this Series
Supplement
since the most
recent
6
<PAGE>
anniversary of the Cut-off Date up to such
date of determination
and (Z) from
the second to the fifth anniversary of the Cut-off Date,
an amount equal to (1)
the lesser of (a) the Fraud Loss Amount as
of the most recent anniversary of the
Cut-off Date and (b) 1.0% of the aggregate
outstanding principal
balance of all
of the Mortgage Loans as of the most recent
anniversary
of the Cut-off
Date
minus (2) the aggregate amount of Fraud Losses
allocated solely to
one or more
specific Classes of Certificates in
accordance with Section 4.05 of this Series
Supplement since the most recent
anniversary of the Cut-off Date up to such date
of determination. On and after the fifth
anniversary of the
Cut-off Date, the
Fraud Loss Amount shall be zero.
The Fraud Loss
Amount may be
further reduced by the Master Servicer
(including accelerating the manner in which
such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i)
obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Group I Certificate:
The Class I-A,
Class R-I, Class R-II and 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 A
and Exhibit D, each such Certificate (other than the Class R-I, Class
R-II and
Class R-III Certificates) representing an interest designated as a "regular
interest" in REMIC III for purposes of the
REMIC Provisions, and representing an
undivided interest in Loan Group I.
Group I Loans: The
Mortgage Loans designated in Exhibit One.
Group I Senior
Percentage: As of each
Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of
the Group I Certificates immediately
prior to such Distribution Date and the denominator of which is the
aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) in Loan Group I immediately
prior to such Distribution Date.
Group I Senior
Principal Distribution
Amount: As to any Distribution
Date, the lesser of (a) the balance of the
Available Distribution Amount related
to Loan Group I remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section
4.02(a)(i)(W) of
this
Series Supplement, and (b) the sum of the amounts
required to be
distributed
therefrom to the Group I Certificateholders on such Distribution Date
pursuant
to Section 4.02(a)(ii) and Section
4.02(a)(xvi).
Group I Subordinate Amount: On any date of determination,
the excess of
the aggregate Stated Principal Balance of
the Group I Loans as of such date over
the aggregate Certificate Principal Balance of the Group I
Certificates then
outstanding.
7
<PAGE>
Group II Certificate:
The Class II-A-1,
Class II-A-2 and Class
II-A-3
Certificates executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed
to the Standard Terms as Exhibit A,
each such Certificate evidencing an interest designated
as a "regular interest"
in REMIC III for purposes of the REMIC
Provisions and
representing an undivided
interest in Loan Group II.
Group II Loans: The
Mortgage Loans designated in Exhibit Two.
Group II Senior Percentage: As of each Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of
the Group II Certificates immediately
prior to such Distribution Date and the denominator of which is the
aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) in Loan Group II immediately
prior to such Distribution Date.
Group II Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the
Available Distribution Amount related
to Loan Group II remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section
4.02(a)(i)(X) of
this
Series Supplement, and (b) the sum of the amounts
required to be
distributed
therefrom to the Group II Certificateholders on such
Distribution Date pursuant
to Section 4.02(a)(ii) and Section
4.02(a)(xvi).
Group II Subordinate Amount: On any date of determination, the
excess of
the aggregate Stated Principal Balance of the Group II Loans as
of such date
over the aggregate Certificate Principal Balance of the Group II
Certificates
then outstanding.
Group III Certificate:
The Class III-A Certificates executed by the
Trustee and authenticated by the
Certificate Registrar substantially in the form
annexed to the Standard Terms as Exhibit A,
each such Certificate
evidencing an
interest designated as a "regular interest" in REMIC III for purposes of
the
REMIC Provisions and representing an
undivided interest in Loan Group III.
Group III Loans: The
Mortgage Loans designated in Exhibit Three.
Group III Senior Percentage: As of each Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Group III Certificates
immediately prior to such Distribution Date
and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage
Loans (or related REO
Properties) in Loan Group III immediately
prior to such Distribution Date.
Group III Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the
Available Distribution Amount related
to Loan Group III remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section
4.02(a)(i)(Y) of
this
Series Supplement, and (b) the sum of the amounts
required to be
distributed
therefrom to the Group III
Certificateholders on such Distribution Date pursuant
to Section 4.02(a)(ii) and Section
4.02(a)(xvi).
8
<PAGE>
Group III Subordinate
Amount: On any date of determination, the excess
of the aggregate Stated Principal Balance
of the Group III Loans as of such date
over the aggregate Certificate Principal Balance of the Group III
Certificates
then outstanding.
Group IV Certificate:
The Class IV-A Certificates, executed by the
Trustee and authenticated by the
Certificate Registrar substantially in the form
annexed to the Standard Terms as Exhibit A,
each such Certificate
representing
an interest designated as a "regular interest"
in REMIC III for purposes of the
REMIC Provisions, and representing an
undivided interest in Loan Group IV.
Group IV Loans: The
Mortgage Loans designated in Exhibit Four.
Group IV Senior Percentage: As of each Distribution Date, the
lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of
the Group IV Certificates immediately
prior to such Distribution Date and the denominator of which is the
aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) in Loan Group IV immediately
prior to such Distribution Date.
Group IV Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the
Available Distribution Amount related
to Loan Group IV remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section
4.02(a)(i)(Z) of
this
Series Supplement, and (b) the sum of the amounts
required to be
distributed
therefrom to the Group IV Certificateholders on such
Distribution Date pursuant
to Section 4.02(a)(ii) and Section
4.02(a)(xvi).
Group IV Subordinate Amount: On any date of determination, the
excess of
the aggregate Stated Principal Balance of the Group IV Loans as
of such date
over the aggregate Certificate Principal Balance of the Group IV
Certificates
then outstanding.
Index: With respect to
any Mortgage Loan and as to any Adjustment Date
therefor, the related index as stated in
the related Mortgage Note.
Indirect Depository Participant: An institution that is not a
Depository
Participant but clears through or maintains a custodial relationship with
Participants and has access to the
Depository's clearing system.
Initial Monthly Payment Fund: $43,843 representing scheduled principal
amortization and interest at the Net Mortgage Rate during the month of July
2005, for those Mortgage Loans for which the Trustee
will not be entitled
to
receive such payment in accordance
with the definition of "Trust Fund". The
Initial Monthly Payment Fund will not be
part of any REMIC.
Initial Notional Amount: With respect to the Class II-A-3
Certificates,
$59,919,000.
Initial Rate Cap:
With respect to each
Mortgage Loan and the initial
Adjustment Date, the rate cap that limits the
increase or the
decrease of the
related Mortgage Rate on the initial
Adjustment
Date pursuant to the
terms of
the related Mortgage Note.
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<PAGE>
Initial Subordinate
Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Certificate Principal Balance of such Class
of Subordinate
Certificates divided
by the aggregate Stated Principal Balance of all the Mortgage Loans
as of the
Cut-off Date as follows:
Class M-1:
1.60%
Class B-1: 0.45%
Class M-2:
1.00%
Class B-2: 0.30%
Class M-3:
0.65%
Class B-3: 0.20%
Interest Accrual
Period: With respect to any Certificates and any
Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs.
Loan Group:
Loan Group I, Loan
Group II, Loan Group
III or Loan Group
IV.
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.
Loan Group IV: The group of Mortgage Loans comprised of the Group IV
Loans.
Maturity Date: With
respect to each Class of Certificates, other than
the Class II-A-3 Certificates, August 25, 2035, the Distribution Date in the
month immediately following the latest scheduled
maturity date of any
Mortgage
Loan. With respect to the Class II-A-3
Certificates, May 25, 2010.
Maximum Mortgage
Rate: As to any
Mortgage Loan, the
rate indicated in
Exhibit One, Exhibit Two, Exhibit Three or Exhibit Four, as
applicable, hereto
as the "NOTE CEILING," which rate is the maximum interest rate that may be
applicable to such Mortgage Loan at any time during the life
of such Mortgage
Loan.
Maximum Net
Mortgage Rate: As to any Mortgage Loan and any date of
determination, the Maximum Mortgage Rate for such Mortgage Loan minus
the per
annum rate at which the Servicing Fee is
calculated.
Minimum Mortgage
Rate: As to any
Mortgage Loan, the greater of (i) the
Note Margin for such Mortgage Loan and (ii) the rate
indicated in Exhibit
One,
Exhibit Two, Exhibit Three or Exhibit Four, as
applicable, hereto as
the "NOTE
FLOOR" for such Mortgage Loan, which rate may be applicable to such Mortgage
Loan at any time during the life of such
Mortgage Loan.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans
attached
hereto as Exhibit One (with respect to the Group I Loans),
Exhibit Two (with
respect to the Group II Loans),
Exhibit Three (with respect to the Group III
Loans) and Exhibit Four (with respect to the Group IV Loans) (as
amended from
time to time to reflect the addition of
Qualified Substitute
Mortgage Loans),
which list or lists shall set forth the following information as to each
Mortgage Loan in the related Loan
Group:
(a) the Mortgage
Loan identifying number ("RFC LOAN #");
10
<PAGE>
(b) the maturity of
the Mortgage Note ("MATURITY DATE");
(c) the Mortgage
Rate ("ORIG RATE");
(d) the Subservicer pass-through rate ("CURR
NET");
(e) the Net Mortgage
Rate ("NET MTG RT");
(f) [RESERVED];
(g) the initial
scheduled monthly payment of principal, if any, and interest
("ORIGINAL P & I");
(h) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(i) the
Loan-to-Value Ratio at origination ("LTV");
(j) the rate at
which the Subservicing
Fee accrues
("SUBSERV FEE") and
at
which the Servicing Fee accrues ("MSTR SERV FEE");
(k) a code "T," "BT"
or "CT" under the column "LN FEATURE," indicating that
the Mortgage Loan is secured by a second or vacation residence;
(l) a code "N" under
the column "OCCP
CODE," indicating
that the Mortgage
Loan is secured by a non-owner occupied residence;
(m) whether such
Mortgage Loan
constitutes a Group I
Loan, Group II
Loan,
Group III Loan or Group IV Loan;
(n) the Maximum
Mortgage Rate ("NOTE CEILING");
(o) the maximum
Adjusted Mortgage Rate ("NET CEILING");
(p) the Note Margin
for the ("NOTE MARGIN");
(q) the first
Adjustment Date after the Cut-off Date ("NXT INT CHG DT"); and
(r) the Periodic Cap
("PERIODIC DECR" or "PERIODIC INCR").
Such schedule may consist of multiple
reports that collectively set forth all of
the information required.
Mortgage Rate: As to
any Mortgage Loan, the
interest rate borne by the
related Mortgage Note, or any modification thereto other than a Servicing
Modification. The Mortgage Rate on the Mortgage Loans will adjust on each
Adjustment Date to equal the sum (rounded
to the nearest
multiple of one-eighth
of one percent (0.125%) or up to the nearest
one-eighth of one
percent, which
are indicated by a "U" on Exhibit One,
Exhibit Two,
Exhibit Three or Exhibit
Four, as applicable, hereto, except in the case of the
Mortgage Loans indicated
by an "X" on Exhibit One, Exhibit Two, Exhibit Three or Exhibit Four, as
applicable, hereto under the heading "NOTE
METHOD"), of the
related Index plus
the Note Margin, in each case subject to the applicable Initial Rate Cap,
Periodic Cap, Maximum Mortgage Rate and
Minimum Mortgage Rate.
Net Mortgage
Rate: As to each Mortgage Loan, a per annum rate of
interest equal to the Adjusted Mortgage Rate less the per annum rate at
which
the Servicing Fee is calculated; provided that, (i) the Net Mortgage Rate
becoming effective on any Adjustment Date
shall not be greater or less than the
Net Mortgage Rate immediately prior to such Adjustment Date plus or minus
the
Initial Rate Cap or Periodic Cap
applicable
to such Mortgage Loan
and (ii) the
Net Mortgage Rate for any Mortgage Loan shall not exceed a rate equal
to the
Maximum Net Mortgage Rate for such Mortgage
Loan.
Net WAC Rate: With respect to any Distribution Date and each Loan
Group,
a per annum rate equal to the weighted
average of the Net
Mortgage Rates of the
related Mortgage Loans weighted on the
basis of the respective Stated Principal
Balance of each such Mortgage Loan as of the beginning of the related Due
Period, using the Net Mortgage Rates in
effect for the scheduled payments due on
those Mortgage Loans during such Due
Period.
11
<PAGE>
Note Margin: As to each Mortgage Loan, the fixed percentage set
forth in
the related Mortgage Note and indicated in Exhibit One,
Exhibit Two,
Exhibit
Three or Exhibit Four, as applicable, hereto as the "NOTE MARGIN," which
percentage is added to the related Index on
each Adjustment
Date to determine
(subject to rounding in accordance
with the related
Mortgage Note, the
Initial
Rate Cap, the Periodic Cap, the Maximum
Mortgage Rate and the
Minimum Mortgage
Rate) the interest rate to be borne by such Mortgage Loan until the next
Adjustment Date.
Notional Amount: As of
any Distribution
Date occurring on or
prior to
May 2010, the Notional Amount of the Class II-A-3
Certificates is equal
to the
aggregate Certificate Principal Balance of the Class II-A-2 Certificates
immediately prior to that date. After the distribution date in May 2010, the
Notional Amount of the Class II-A-3
Certificates will be equal to $0.00.
Pass-Through Rate:
With respect to the Class I-A Certificates and the
Class R Certificates, the Net WAC Rate of the Group I
Loans. For federal income
tax purposes, however, the Class I-A Certificates and the
Class R Certificates
will bear interest at a rate equivalent to the foregoing, expressed as the
weighted average of the Pass Through Rate on Uncertificated REMIC II Regular
Interest I-A, weighted on the basis of the
Uncertificated
Principal Balance
of
such Uncertificated REMIC II Regular
Interest immediately
preceding the related
Distribution Date. The Pass Through Rate on the
Class I-A Certificates
and the
Class R Certificates with respect to the first Interest Accrual Period is
expected to be approximately 4.97976% per annum. With respect to the Class
II-A-1 Certificates, the Net WAC Rate of the Group II
Loans. For federal income
tax purposes, however, the Class II-A-1 Certificates will bear interest at a
rate equivalent to the foregoing,
expressed as the
weighted average of the Pass
Through Rate on Uncertificated REMIC II
Regular Interest II-A-1, weighted on the
basis of the Uncertificated Principal Balance of such
Uncertificated
REMIC II
Regular Interest immediately preceding the related Distribution
Date. The Pass
Through Rate on the Class II-A-1
Certificates with respect to the first Interest
Accrual Period is expected to be
approximately 5.17548%
per annum. With respect
to the Class II-A-2 Certificates and any Distribution
Date on or before the May
2010 Distribution Date, a rate equal to the lesser
of (i) 4.980% per annum and
(ii) the Net WAC Rate of the Group II
Loans. With
respect to the Class
II-A-2
Certificates and any Distribution
Date after the
Distribution Date in May 2010,
the Net WAC Rate of the Group II Loans. For federal income tax purposes,
however, the Class II-A-2 Certificates will bear interest at
a rate equivalent
to the foregoing, expressed for any Distribution
Date on or before the May 2010
Distribution Date, as a rate equal to the lesser of (i) 4.980% per annum
and
(ii) the weighted average of the Pass Through Rate
on Uncertificated
REMIC II
Regular Interest II-A-2, weighted on the basis of the
Uncertificated
Principal
Balance of such Uncertificated REMIC II
Regular Interest
immediately
preceding
the related Distribution Date. With respect
to the Class II-A-2 Certificates and
any Distribution Date after the Distribution Date in May 2010, the weighted
average of the Pass Through Rate on Uncertificated REMIC II Regular Interest
II-A-2, weighted on the basis of the
Uncertificated
Principal Balance of
such
Uncertificated REMIC II Regular Interest immediately preceding the related
Distribution Date. The Pass Through Rate on the
Class II-A-2
Certificates with
respect to the first Interest Accrual Period is expected to be
approximately
4.98000% per annum. With respect to the Class II-A-3 Certificates and any
Distribution Date the Net WAC Rate of the Group
II Loans minus the Pass-Through
Rate for the Class II-A-2 Certificates. For federal income tax purposes,
however, the Class II-A-3 Certificates will bear interest at
a rate equivalent
to the foregoing, expressed as the Net WAC Rate of
the Group II Loans, which is
the rate for the Uncertificated REMIC II Regular Interest II-A-2, minus the
12
<PAGE>
Pass-Through Rate for the Class II-A-2
Certificates.
The Pass Through Rate
on
the Class II-A-3 Certificates with respect to the
first Interest Accrual Period
is expected to be approximately 0.19548% per annum. With respect to the Class
III-A Certificates, the Net WAC Rate of the Group III
Loans. For federal income
tax purposes, however, the Class III-A
Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the Pass
Through Rate on Uncertificated REMIC II
Regular Interest III-A, weighted on the
basis of the Uncertificated Principal Balance of such
Uncertificated
REMIC II
Regular Interest immediately preceding the related Distribution
Date. The Pass
Through Rate on the Class III-A
Certificates with
respect to the first Interest
Accrual Period is expected to be
approximately 5.25004%
per annum. With respect
to the Class IV-A Certificates, the Net WAC Rate of the
Group IV Loans.
For
federal income tax purposes, however, the Class IV-A Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass Through Rate on Uncertificated REMIC II Regular Interest
IV-A, weighted on the basis of the Uncertificated Principal Balance of such
Uncertificated REMIC II Regular Interest immediately preceding the related
Distribution Date. The Pass Through Rate on the Class
IV-A Certificates
with
respect to the first Interest Accrual Period is expected to be
approximately
5.35502% per annum. With respect to the Class M Certificates and Class B
Certificates, the weighted average of the Net WAC Rates for
the Group I Loans,
Group II Loans, Group III Loans and Group
IV Loans, weighted on the basis of the
Group I Subordinate Amount, Group II Subordinate Amount,
Group III
Subordinate
Amount and Group IV Subordinate Amount,
respectively. This determination will be
made as of the related Distribution Date prior to giving effect to any
distributions on the Certificates on that date. The Pass Through Rate on the
Class M Certificates and Class B
Certificates with respect to the first Interest
Accrual period is expected to be
approximately
5.17180% per annum.
For federal
income tax purposes, however, the Class M Certificates
and Class B Certificates
will bear interest at a rate equivalent to the foregoing, expressed as the
weighted average of the Uncertificated REMIC I Pass-Through Rates on
Uncertificated REMIC I Regular Interests
I-A, II-A, III-A, IV-A, weighted on the
basis of the Uncertificated Principal Balance of each such
Uncertificated REMIC
I Regular Interest immediately preceding
the related Distribution Date, which is
the rate for the Uncertificated REMIC II Regular Interests M-1,
M-2, M-3, B-1,
B-2 and B-3.
Periodic Cap: With respect to each Mortgage Loan, the periodic rate cap
that limits the increase or the decrease of the related
Mortgage Rate on any
Adjustment Date (other than the initial
Adjustment
Date) pursuant to the
terms
of the related Mortgage Note.
Prepayment Assumption:
With respect to the Mortgage Loans, a prepayment
assumption of 25% CPR, used for determining the accrual of original issue
discount and market discount and premium on
the Certificates for
federal income
tax purposes.
Prepayment
Distribution
Percentage: With
respect to any
Distribution
Date and each Class of Subordinate
Certificates for each
Loan Group, under
the
applicable circumstances set forth below, the
respective percentages
set forth
below:
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<PAGE>
(i) For any Distribution Date prior to the Distribution
Date in
August 2012 (unless the Certificate Principal Balances of the related
Senior Certificates have been reduced to zero), 0%.
(ii) For any
Distribution Date for
which clause (i) above
does
not apply,
and on which
any Class of Subordinate Certificates is
outstanding with a Certificate Principal Balance greater than
zero:
(a) in the case of the Class of Subordinate Certificates
then outstanding
with the Highest
Priority and each other Class
of Subordinate
Certificates
for which the
related Prepayment
Distribution Trigger has been satisfied, a fraction, expressed
as
a percentage, the numerator of which is the Certificate
Principal
Balance
of such Class immediately prior to such date and the
denominator of
which is the sum of the Certificate Principal
Balances immediately
prior to such date of (1) the Class of
Subordinate
Certificates then
outstanding
with the Highest
Priority and (2) all other Classes of Subordinate Certificates
for which the respective Prepayment Distribution Triggers have
been satisfied; and
(b) in the
case of each other Class of Subordinate
Certificates for which the Prepayment Distribution Triggers have
not been satisfied, 0%.
(iii) Notwithstanding
the foregoing,
if the application of
the
foregoing percentages
on any Distribution
Date as provided in
Section
4.02 of this Series Supplement (determined without regard to the
proviso
to the definition of "Subordinate Principal Distribution Amount")
would
result in a distribution in respect of principal of any Class or
Classes
of Subordinate
Certificates
in an amount
greater than the
remaining
Certificate Principal
Balance thereof (any such class, a "Maturing
Class"), then:
(a) the Prepayment Distribution Percentage of each
Maturing Class
shall be reduced to a level that, when applied as
described above, would exactly reduce the Certificate Principal Balance
of such Class to zero;
(b) the Prepayment
Distribution
Percentage of
each other
Class of Subordinate Certificates (any such Class, a
"Non-Maturing Class")
shall be recalculated in accordance with the
provisions in
paragraph (ii) above,
as if the Certificate Principal
Balance of each Maturing Class had been reduced to zero (such
percentage
as recalculated, the "Recalculated Percentage"); (c) the total
amount of
the reductions
in the Prepayment Distribution Percentages of the
Maturing Class or
Classes pursuant to clause (a) of this sentence,
expressed as an
aggregate percentage, shall be allocated among the
Non-Maturing Classes
in proportion
to their respective Recalculated
Percentages (the portion of such aggregate reduction so allocated
to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for purposes
of such Distribution
Date, the Prepayment
Distribution
Percentage of
each Non-Maturing
Class shall be equal to the sum of (1) the Prepayment
Distribution
Percentage thereof,
calculated
in accordance with the
provisions in
paragraph (ii) above as if the Certificate Principal
Balance of each
Maturing Class had not
been reduced to zero,
plus (2)
the related Adjustment Percentage.
Qualified Substitute
Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Company for a
Deleted Mortgage
Loan which must,
on
the date of such substitution, as confirmed in an Officers' Certificate
delivered to the Trustee, with a copy to
the Custodian,
14
<PAGE>
(i) have
an outstanding
principal balance,
after deduction of the
principal portion
of the monthly payment due in the month of
substitution (or in
the case of a substitution of more than one
Mortgage Loan
for a Deleted Mortgage Loan, an aggregate
outstanding principal
balance, after such deduction), not in
excess of the Stated
Principal Balance of
the Deleted
Mortgage
Loan (the amount of any shortfall to be deposited by Residential
Funding in the Custodial Account in the month of substitution);
(ii) have a
Mortgage Rate and a
Net Mortgage
Rate no lower than
and
not more than 1% per annum higher than the Mortgage Rate and Net
Mortgage Rate,
respectively, of the
Deleted Mortgage Loan as of
the date of substitution;
(iii) have a
Loan-to-Value Ratio at
the time of substitution no higher
than that of the Deleted Mortgage Loan at the time of
substitution;
(iv) have a
remaining term to
stated maturity
not greater than
(and
not more than one year less than) that of the Deleted Mortgage
Loan;
(v) have a
Mortgage Rate that
adjusts with the same
frequency and
based upon the same Index as that of the Deleted Mortgage Loan;
(vi) have a Note
Margin not less than that of the
Deleted Mortgage
Loan;
(vii) have a
Periodic Rate Cap that is equal to that of the
Deleted
Mortgage Loan;
(viii) have an Initial
Rate Cap that is not less than that of the
Deleted Mortgage Loan;
(ix) have a next
Adjustment
Date no later
than that of the
Deleted
Mortgage Loan;
(x) have a
Maximum Rate no less
than that of the
Deleted Mortgage
Loan;
(xi) have a
Minimum Rate no less
than that of the
Deleted Mortgage
Loan; and
(xii) comply
with each representation and warranty set forth in
Sections 2.03 and 2.04
hereof and
Section 4 of the
Assignment
Agreement.
Record Date: With
respect to each
Distribution Date and
each Class of
Certificates, the close of business on the last
business day of the
month next
preceding the month in which the related
Distribution Date occurs.
REMIC I: The
segregated pool of
assets related to this
Series, with
respect to which a REMIC election is to be made (except as provided below)
pursuant to this Agreement, consisting
of:
15
<PAGE>
(i) the
Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all
payments on and
collections in respect of the Mortgage Loans
due after the Cut-off
Date (other than
Monthly Payments due
in
the month of the
Cut-off Date) as shall be on deposit in the
Custodial Account or in the Certificate Account and identified
as
belonging to the Trust Fund, but not including amounts on
deposit
in the Initial Monthly Payment Fund,
(iii) property
that secured a
Mortgage Loan and that has been acquired
for the benefit of the
Certificateholders by foreclosure or deed
in lieu of foreclosure,
(iv) the hazard
insurance policies and Primary Insurance Policies, if
any, and
(v) all
proceeds of clauses (i) through (iv) above.
Notwithstanding the foregoing, the REMIC election with respect to
REMIC
I specifically excludes the Initial Monthly
Payment Fund.
REMIC I Certificates:
The Class R-I Certificates.
REMIC I Subordinate
Balance Ratio: The ratio among the principal
balances of each of the Uncertificated
REMIC I Regular Interests ending with the
designation "A," equal to the ratio among:
(1) the Group I
Subordinate
Amount,
(2) the Group II Subordinate Amount, (3) the Group III Subordinate
Amount and
(4) the Group IV Subordinate Amount.
REMIC II: The segregated pool of assets consisting of the
Uncertificated
REMIC I Regular Interests conveyed in trust to the Trustee for the
benefit of
the holders of the Uncertificated
REMIC II Regular
Interests and the Class R-II
Certificates pursuant to Section 10.04,
with respect to which
a separate REMIC
election is to be made. The REMIC election
with respect to REMIC II specifically
excludes the Initial Monthly Payment
Fund.
REMIC II Certificates:
The Class R-II Certificates.
REMIC III.
The segregated pool of assets consisting of the
Uncertificated REMIC II Regular Interests
conveyed in trust to
the Trustee for
the benefit of the holders of the Class
I-A, Class II-A-1,
Class II-A-2,
Class
II-A-3, Class III-A, Class IV-A, Class M-1, Class M-2, Class M-3, Class
B-1,
Class B-2, Class B-3 and Class R-III
Certificates
pursuant to Section
10.04,
with respect to which a separate REMIC election is to be made. The REMIC
election with respect to REMIC III
specifically
excludes the Initial
Monthly
Payment Fund.
REMIC III Certificates: Any of the Class I-A, Class II-A-1, Class
II-A-2, Class II-A-3, Class III-A, Class
IV-A, Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3 and Class
R-III Certificates.
Senior Accelerated
Distribution
Percentage:
With
respect to any
Distribution Date occurring on or prior to the
84th Distribution Date and, with
respect to any Loan Group, 100%. With respect to any Distribution Date
thereafter and any such Loan Group, as
follows:
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<PAGE>
(i) for
any Distribution Date after the 84th Distribution Date but on
or prior to the
96th Distribution Date, the related Senior
Percentage for such
Distribution
Date plus 70% of the
related
Subordinate Percentage for such Distribution Date;
(ii) for any
Distribution Date after the 96th Distribution Date but on
or prior to the 108th
Distribution
Date, the related Senior
Percentage for such
Distribution
Date plus 60% of the
related
Subordinate Percentage for such Distribution Date;
(iii) for any
Distribution Date
after the 108th
Distribution Date but
on
or prior to the 120th
Distribution Date,
the related Senior
Percentage for such
Distribution
Date plus 40% of the
related
Subordinate Percentage for such Distribution Date;
(iv) for any
Distribution Date
after the 120th
Distribution Date but
on or prior to the 132nd Distribution Date, the related Senior
Percentage for such
Distribution
Date plus 20% of the
related
Subordinate Percentage for such Distribution Date; and
(v) for
any Distribution Date
thereafter, the Senior
Percentage for
such Distribution Date.
Any scheduled reduction, as described in the preceding paragraph,
shall
not be made as of any Distribution Date
unless:
(a) the outstanding
principal balance of the Mortgage Loans
in
all four Loan Groups
delinquent 60 days or
more averaged over the last
six months, as a
percentage of the
aggregate outstanding
Certificate
Principal Balance of the Subordinate Certificates, is less than 50%
and
(b) Realized Losses on the Mortgage Loans in all four Loan
Groups
to date for such
Distribution Date,
if occurring during the eighth,
ninth, tenth,
eleventh or twelfth
year, or any year thereafter, after
the Closing Date, are less than 30%, 35%, 40%, 45% or 50%,
respectively,
of the sum of the Initial Certificate Principal Balances of the
Subordinate Certificates.
Notwithstanding the
foregoing,
if (a) the weighted average of the
Subordinate Percentages for all four Loan Groups is equal to or in excess
of
twice the initial weighted average of the Subordinate
Percentages for all
four
Loan Groups, (b) the outstanding
principal balance of
the Mortgage Loans in all
four Loan Groups delinquent 60 days or more averaged over the
last six months,
as a percentage of the aggregate
outstanding
Certificate
Principal Balance
of
the Subordinate Certificates, does not exceed 50% and (c)(i) prior to the
Distribution Date in August 2008, cumulative Realized Losses on the Mortgage
Loans in all four Loan Groups do not exceed 20% of the sum of the initial
Certificate Principal Balances of the Subordinate Certificates, and (ii)
thereafter, cumulative Realized Losses on the Mortgage Loans in
all four Loan
Groups do not exceed 30% of the sum of the initial Certificate Principal
Balances of the Subordinate Certificates, then (A) on any Distribution Date
prior to the Distribution Date in August 2008, each Senior Accelerated
Distribution Percentage for such
Distribution Date will equal the related Senior
Percentage for that Distribution Date plus 50% of the related Subordinate
Percentage for such Distribution Date, and (B) on any Distribution
Date on or
after the Distribution Date in August 2008,
each Senior Accelerated Distribution
Percentage for that Distribution Date will equal the related Senior
Percentage
for that Distribution Date.
17
<PAGE>
Notwithstanding the
foregoing, on any
Distribution
Date on which the
weighted average of the initial Group I Senior Percentage, Group II Senior
Percentage, Group III Senior Percentage and
Group IV Senior Percentage, weighted
on the basis of the Stated Principal Balances of the Mortgage Loans in the
related Loan Group, exceeds the weighted average of the initial Group I
Senior
Percentage, Group II Senior Percentage,
Group III Senior Percentage and Group IV
Senior Percentage (calculated on such basis),
each of the Senior
Accelerated
Distribution Percentages for such
Distribution Date will equal 100%.
Notwithstanding the
foregoing,
upon
reduction of the Certificate
Principal Balances of the related Senior Certificates to zero, the related
Senior Accelerated Distribution Percentage
will equal 0%.
Senior Certificate:
Any one of the
Class A Certificates or Class R
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed to the
Standard Terms as Exhibit A
and Exhibit D, respectively.
Senior Percentage:
The Group I Senior
Percentage with
respect to Loan
Group I, the Group II Senior Percentage
with respect to Loan Group II, the Group
III Senior Percentage with respect to Loan Group III or the Group IV
Senior
Percentage with respect to Loan Group
IV.
Senior Principal
Distribution
Amount: The Group I Senior Principal
Distribution Amount, Group II Senior Principal
Distribution Amount,
Group III
Senior Principal Distribution Amount or Group IV
Senior Principal
Distribution
Amount.
Special Hazard Amount:
As of any Distribution
Date, an amount equal to
$6,752,237 minus the sum of (i) the aggregate
amount of Special
Hazard Losses
allocated solely to one or more specific
Classes of
Certificates in accordance
with Section 4.05 of this Series
Supplement and (ii)
the Adjustment Amount
(as
defined below) as most recently calculated.
For each anniversary
of the Cut-off
Date, the Adjustment Amount shall be equal to the
amount, if any, by
which the
amount calculated in accordance
with the preceding
sentence (without giving
effect to the deduction of the Adjustment
Amount for such
anniversary)
exceeds
the greater of (A) the greatest of (i)
twice the outstanding
principal balance
of the Mortgage Loan in the Trust Fund which has the largest outstanding
principal balance on the Distribution Date immediately preceding such
anniversary, (ii) the product of 1.00%
multiplied by the outstanding principal
balance of all Mortgage Loans on the
Distribution
Date immediately preceding
such anniversary and (iii) the aggregate
outstanding
principal balance (as of
the immediately preceding Distribution
Date) of the Mortgage Loans in any single
five-digit California zip code area with
the largest amount of Mortgage Loans by
aggregate principal balance as of such anniversary and (B) the greater of
(i)
the product of 0.50% multiplied by the outstanding principal balance of all
Mortgage Loans on the Distribution
Date immediately
preceding such
anniversary
multiplied by a fraction, the numerator of which is equal to the
aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of all of the Mortgage Loans secured by Mortgaged
Properties
located in
the State of California divided by the
aggregate outstanding
principal balance
(as of the immediately preceding Distribution Date) of all of the Mortgage
Loans, expressed as a percentage, and the denominator of which is equal to
35.70% (which percentage is equal to the
percentage of Mortgage Loans initially
secured by Mortgaged Properties located in
the State of California) and (ii) the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the largest Mortgage Loan
secured by a Mortgaged Property
(or, with respect to a Cooperative
Loan, the related Cooperative Apartment)
located in the State of California.
18
<PAGE>
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which
coverage is reduced)
provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such
reduction shall not reduce the
rating assigned to any Class of
Certificates
by such Rating
Agency below the
lower of the then-current rating or the rating assigned to
such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Subordinate Amount:
The Group I Subordinate Amount, the Group II
Subordinate Amount, the Group III
Subordinate Amount or the Group IV Subordinate
Amount, as applicable.
Subordinate
Principal
Distribution
Amount: With
respect to any
Distribution Date and Loan Group and each
Class of Subordinate Certificates, (a)
the sum of (i) the product of (x) the Class's pro rata share, based on the
Certificate Principal Balance of each such
Class then outstanding, and (y) the
aggregate of the amounts calculated for such Distribution Date under clauses
(1), (2) and (3) of Section 4.02(a)(ii)(A) of this Series
Supplement
(without
giving effect to the related Senior
Percentage) to the extent not payable to the
related Senior Certificates; (ii) such Class's pro rata share,
based on the
Certificate Principal Balance of each Class of
Subordinate
Certificates then
outstanding, of the principal collections
described in Section 4.02(a)(ii)(B)(b)
of this Series Supplement (without giving effect to the related Senior
Accelerated Distribution Percentage) to the extent such collections are not
otherwise distributed to the related Senior
Certificates; (iii)
the product of
(x) the related Prepayment Distribution Percentage and (y)
the aggregate of all
Principal Prepayments in Full received in the related
Prepayment
Period and
Curtailments received in the preceding calendar
month to the extent not payable
to the Senior Certificates; and (iv) any amounts described in
clauses (i), (ii)
and (iii) as determined for any previous Distribution Date, that remain
undistributed to the extent that such amounts
are not attributable
to Realized
Losses which have been allocated to a Class
of Subordinate
Certificates;
minus
(b) the related Capitalization Reimbursement Amount for such
Distribution Date,
multiplied by a fraction, the numerator of which is the
Subordinate
Principal
Distribution Amount for such Class of
Subordinate
Certificates, without
giving
effect to this clause (b)(ii), and the denominator of which is the sum of
the
principal distribution amounts for all related Classes of
Class A Certificates
and the related Subordinate Amount,
without giving effect
to any reductions for
the Capitalization Reimbursement
Amount.
Trust Fund: REMIC I, REMIC II, REMIC III and the Initial Monthly
Payment
Fund.
Uncertificated Accrued
Interest: With respect to each Uncertificated
REMIC I Regular Interest and each Uncertificated REMIC II Regular Interest on
each Distribution Date, an amount equal to one
month's interest at the related
Uncertificated REMIC I Pass-Through Rate or related Uncertificated REMIC II
Pass-Through Rate, as the case may be, on
the Uncertificated
Principal Balance
19
<PAGE>
of such Uncertificated REMIC I Regular Interest or Uncertificated REMIC II
Regular Interest. Uncertificated Accrued Interest on
the Uncertificated REMIC I
Regular Interests and on the Uncertificated REMIC II Regular Interests will
be
reduced by any Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls, allocated among such Uncertificated REMIC I Regular Interests and
such Uncertificated REMIC II Regular
Interests, as the case may be, pro rata.
Uncertificated
Principal
Balance: The
principal amount of any
Uncertificated REMIC I Regular Interest or any
Uncertificated REMIC
II Regular
Interest outstanding as of any date of determination. The Uncertificated
Principal Balance of each Uncertificated REMIC I Regular Interest and each
Uncertificated REMIC II Regular Interest shall be
reduced by all
distributions
of principal made on, and allocation of
Realized Losses to, such Uncertificated
REMIC I Regular Interest or Uncertificated REMIC II Regular Interest, as the
case may be, on such Distribution Date. The
Uncertificated
Principal Balance of
each Uncertificated REMIC I Regular Interest and each
Uncertificated
REMIC II
Regular Interest shall never be less than
zero.
Uncertificated REMIC I
Regular Interests: The
Uncertificated
partial
undivided beneficial ownership interests in REMIC I, designated as
Uncertificated REMIC I Regular Interests I-A, I-B, II-A, II-B,
III-A, III-B,
IV-A, IV-B, ZZZ and R-II, each having an
Uncertificated
Principal Balance as
specified herein and bearing interest at a rate equal to the related
Uncertificated REMIC I Pass-Through
Rate.
Uncertificated REMIC I
Pass-Through Rate:
With respect to each
of the
Uncertificated REMIC I Regular Interests I-A,
II-A, III-A,
IV-A, and ZZZ, the
weighted average of the Net Mortgage Rates
of the Mortgage Loans,
weighted on
the basis of the respective Stated
Principal Balances of each such Mortgage Loan
as of the beginning of the Due Period immediately preceding the related
Distribution Date. With respect to
Uncertificated REMIC I
Regular Interest I-B
and R-II, the Net WAC Rate of the Group I
Loans. With respect to
Uncertificated
REMIC I Regular Interest II-B, the Net WAC Rate of the
Group II Loans.
With
respect to Uncertificated REMIC I Regular Interest III-B, the Net WAC Rate
of
the Group III Loans. With respect to Uncertificated REMIC I Regular Interests
IV-B, the Net WAC Rate of the Group IV
Loans.
Uncertificated REMIC
I Regular Interest Distribution Amount: With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC I Regular Interests for such
Distribution Date pursuant to Section
10.04(a).
Uncertificated REMIC
II Regular Interests:
The Uncertificated
partial
undivided beneficial ownership interests in REMIC II, designated as
Uncertificated REMIC II Regular Interests
I-A, II-A-1, II-A-2, III-A, IV-A, M-1,
M-2, M-3, B-1, B-2, B-3 and R-III, each having an Uncertificated Principal
Balance as specified herein and bearing interest at a
rate equal to the related
Uncertificated REMIC II Pass-Through
Rate.
Uncertificated
REMIC II Pass-Through Rate: With respect to the
Uncertificated REMIC II Regular Interest
I-A Certificates and the Uncertificated
REMIC II Regular Interest R Certificates,
the Net WAC Rate of the Group I Loans.
For federal income tax purposes,
however, the Uncertificated REMIC II Regular
Interest I-A Certificates and the Uncertificated REMIC II Regular Interest R
Certificates will bear interest at a rate
equivalent to the foregoing, expressed
as the weighted average of the Pass Through Rate on Uncertificated REMIC I
Regular Interest I-B, weighted on the basis of the
Uncertificated
Principal
Balance of such Uncertificated REMIC I Regular Interest
immediately
preceding
the related Distribution Date. With respect to the Uncertificated REMIC II
20
<PAGE>
Regular Interest II-A-1 Certificates, the Net WAC Rate of the Group II
Loans.
For federal income tax purposes,
however, the Uncertificated REMIC II Regular
Interest II-A-1 Certificates will bear interest at a rate equivalent to the
foregoing, expressed as the weighted average of the Pass Through Rate on
Uncertificated REMIC I Regular Interest II-B, weighted on the basis of the
Uncertificated Principal Balance of such
Uncertificated REMIC I Regular Interest
immediately preceding the related Distribution Date. With respect to the
Uncertificated REMIC II Regular Interest
II-A-2 Certificates,
the Net WAC Rate
of the Group II Loans. For federal income tax purposes, however, the
Uncertificated REMIC II Regular Interest II-A-2
Certificates will bear interest
at a rate equivalent to the foregoing,
expressed as the
weighted average of the
Pass Through Rate on Uncertificated
REMIC I Regular
Interest II-B,
weighted on
the basis of the Uncertificated Principal
Balance of such Uncertificated REMIC I
Regular Interest immediately preceding the related Distribution Date. With
respect to the Uncertificated REMIC II
Regular Interest III-A Certificates, the
Net WAC Rate of the Group III Loans.
For federal income tax
purposes, however,
the Uncertificated REMIC II Regular Interest III-A Certificates will bear
interest at a rate equivalent to the foregoing, expressed as the weighted
average of the Pass Through Rate on Uncertificated REMIC I Regular Interest
III-B, weighted on the basis of the
Uncertificated
Principal Balance of such
Uncertificated REMIC I Regular Interest immediately preceding the related
Distribution Date. With respect to the
Uncertificated REMIC
II Regular Interest
IV-A Certificates, the Net WAC Rate of the Group IV
Loans. For federal
income
tax purposes, however, the Uncertificated REMIC II Regular Interest IV-A
Certificates will bear interest at a rate
equivalent to the foregoing, expressed
as the weighted average of the Pass Through Rate on Uncertificated REMIC I
Regular Interest IV-B, weighted on the basis of the
Uncertificated
Principal
Balance of such Uncertificated REMIC I Regular Interest
immediately
preceding
the related Distribution Date. With respect to the Uncertificated REMIC II
Regular Interest M Certificates and
Uncertificated
REMIC II Regular
Interest B
Certificates, the weighted average of the Net WAC Rates for
the Group I Loans,
Group II Loans, Group III Loans and Group
IV Loans, weighted on the basis of the
Group I Subordinate Amount, Group II Subordinate Amount,
Group III
Subordinate
Amount and Group IV Subordinate Amount,
respectively. This determination will be
made as of the related Distribution Date prior to giving effect to any
distributions on the Certificates on that
date. For federal income tax purposes,
however, the Uncertificated REMIC II Regular Interest M Certificates and
Uncertificated REMIC II Regular Interest B
Certificates will bear interest at a
rate equivalent to the foregoing, expressed as the weighted average of the
Uncertificated REMIC I Pass-Through Rates on Uncertificated REMIC I Regular
Interests I-A, II-A, III-A, and IV-A, weighted on the basis of the
Uncertificated Principal Balance of each such Uncertificated REMIC I Regular
Interest immediately preceding the related
Distribution Date, provided that, for
purposes of such weighted average,
the Uncertificated
REMIC I Pass Through Rate
of each such Uncertificated REMIC I Regular Interest shall be
subject to a cap
and a floor equal to the Uncertificated REMIC I Pass Through Rate of the
Uncertificated REMIC I Regular Interest from the
related Loan Group ending with
the designation "B".
21
<PAGE>
Uncertificated REMIC
II Regular
Interest Distribution Amount: With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC II Regular Interests for such
Distribution Date pursuant to Section
10.04(d).
Undercollateralized
Amount: With
respect any Certificate Group and
Distribution Date, the excess of (i) the
aggregate Certificate Principal Balance
of such Certificate Group over (ii) the aggregate
Stated Principal
Balance of
the Mortgage Loans in the related Loan Group,
in each case
calculated on such
Distribution Date after giving effect to
distributions to be made thereon (other
than amounts to be distributed pursuant to Section 4.02(d) on
such Distribution
Date).
Undercollateralized
Certificate Group:
With respect any
Distribution
Date, a Certificate Group for which the related Undercollateralized Amount
exceeds zero.
Underwriter: Goldman,
Sachs & Co.
Section 1.02 Use of Words and
Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter"
and other equivalent words refer to the Pooling and
Servicing Agreement as a
whole. All references herein to Articles,
Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and
Servicing
Agreement. The definitions set forth herein include both the
singular and the
plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans. (See Section 2.01 of the
Standard
Terms)
(a) The Company,
concurrently with the
execution and delivery
hereof,
does hereby assign to the Trustee without recourse all the right, title and
interest of the Company in and to the
Mortgage Loans, including all interest and
principal received on or with respect to the
Mortgage Loans after the Cut-off
Date (other than payments of principal and
interest due on the Mortgage Loans in
the month of the Cut-off Date). In
connection with such transfer and assignment,
the Company does hereby deliver to the Trustee the Certificate Policy (as
defined in the Series Supplement),
if any. The Company,
the Master Servicer and
the Trustee agree that it is not intended that
any mortgage loan be included in
the Trust that is (i) a "High-Cost
Home Loan" as defined
in the New Jersey Home
Ownership Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan
Protection
Act effective
January 1, 2004,
(iii) a "High Cost Home Mortgage Loan" as
defined in the Massachusetts Predatory
Home Practices Act effective November 7,
2004 or (iv) a "High-Cost Home Loan" as
defined in the Indiana House Enrolled Act No. 1229,
effective as of
January 1,
2005.
(b) - (h) (See Section 2.01(b) - (h) of the
Standard Terms)
Section 2.02 Acceptance by Trustee.
(See Section 2.02 of
the Standard Terms)
22
<PAGE>
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 Exhibits One, Two,
Three and Four
hereto
with
respect to each
Mortgage Loan or the Mortgage Loans, as the case
may be, in Loan Group
I, Loan Group II,
Loan Group III and
Loan Group
IV, respectively,
is true and correct in
all material respects
at the
date or dates respecting which such information is furnished;
(iii) The Mortgage Loans are fully-amortizing (subject to interest only
periods, if
applicable),
hybrid adjustable-rate mortgage loans with
level Monthly
Payments due, with
respect to a majority of the Mortgage
Loans, on the
first day of each month and terms to maturity at
origination or modification of not more than 30 years;
(iv) To the best of the
Company's knowledge, if a Mortgage Loan is secured by
a Mortgaged Property with a Loan-to-Value Ratio at origination in
excess
of 80%, such Mortgage Loan is the subject of a Primary Insurance Policy
that insures that (a)
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%, (b) at least 25% of such balance if the
Loan-to-Value
Ratio is between 90.00% and 85.01%, and (c) 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 1.6% 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 Virginia, no more than 1.2% 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 Texas, no more
than 1.4% 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 Virginia,
and no more
than 2.8% of the Group IV 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
Maryland, no more than 1.4% of the Group I
Loans
23
<PAGE>
are secured by
Mortgaged Properties located in any one zip code
area
outside Virginia, no more than 1.1% of the Group II Loans are
secured by
Mortgaged Properties
located in any one zip code area outside Texas, no
more than 1.3% 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 Virginia and no more than 2.2%
of the Group IV Loans are secured by Mortgaged Properties located
in any
one zip code area outside Maryland;
(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
35.16% of the
Group I Loans,
no more than
31.97% of the
Group II Loans, no
more than 25.97% of
the Group III Loans and no more
than 17.09% of the Group IV Loans, by aggregate Stated Principal
Balance
as of the Cut-off Date, were underwritten under a reduced loan
documentation program;
(x) Each Mortgagor
represented in its
loan application with
respect to the
related Mortgage
Loan
that
the Mortgaged Property would be
owner-occupied and therefore would not be an investor property as
of the
date of origination of such Mortgage Loan. No Mortgagor is a
corporation
or a partnership;
(xi) None of the Group I
Loans, the Group II Loans, Group III Loans or Group
IV Loans as of the Cut-off Date are Buydown Mortgage Loans;
(xii) Each Mortgage Loan constitutes a qualified mortgage under Section
860G(a)(3)(A) of
the Code and Treasury Regulations Section
1.860G-2(a)(1);
(xiii) A policy of title insurance was effective as of the closing of each
Mortgage Loan and is
valid and binding
and remains in full force and
effect, unless the Mortgaged Properties are located in the State of
Iowa
and an attorney's
certificate
has been provided as described in the
Program Guide;
(xiv) One Group II Loan, representing approximately 1.09% of the Group II
Loans, 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
24
<PAGE>
of the related
Mortgaged Property as
of the date the Mortgage Loan was
originated was not less than the appraised value of such property
at the
time of origination of the refinanced Mortgage Loan or (b) the
Loan-to-Value Ratio of
the Mortgage Loan as of the date of origination
of the Mortgage Loan generally meets the Company's underwriting
guidelines;
(xvi) Interest on each
Mortgage Loan is calculated on the basis of
a 360-day
year consisting of twelve 30-day months;
(xvii) None of the Mortgage Loans contains in the related Mortgage File a
Destroyed Mortgage Note; and
(xviii) None of the Mortgage Loans are Pledged Asset Loans or Additional
Collateral Loans.
It is understood and agreed that the
representations and warranties set forth in
this Section 2.03(b) shall survive delivery
of the respective
Mortgage Files to
the Trustee or any Custodian.
Upon discovery by any of the Company, the Master Servicer, the Trustee
or any Custodian of a breach of any of the
representations
and warranties set
forth in this Section 2.03(b) that materially and adversely affects the
interests of the Certificateholders in any Mortgage
Loan, the party discovering
such breach shall give prompt written
notice to the other parties (any Custodian
being so obligated under a Custodial
Agreement); provided,
however, that in the
event of a breach of the representation and warranty set forth in Section
2.03(b)(xii), the party discovering such breach shall give such notice
within
five days of discovery. Within 90 days of
its discovery or its receipt of notice
of breach, the Company shall either (i) cure such breach in all material
respects or (ii) purchase such Mortgage
Loan from the Trust Fund at the Purchase
Price and in the manner set forth in
Section 2.02;
provided that the Company
shall have the option to substitute a Qualified Substitute Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the omission or
defect would cause
the Mortgage Loan to be other than a
"qualified mortgage"
as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. Any such substitution shall be
effected by the Company under the same terms and
conditions
as provided in
Section 2.04 for substitutions by Residential Funding. It is understood and
agreed that the obligation of the Company to cure
such breach or to so purchase
or substitute for any Mortgage Loan as to which
such a breach has occurred and
is continuing shall constitute the sole
remedy respecting such
breach available
to the Certificateholders or the Trustee on behalf of the
Certificateholders.
Notwithstanding the foregoing, the Company shall not be required to cure
breaches or purchase or substitute for Mortgage Loans as provided in this
Section 2.03(b) if the substance of the breach of a
representation
set forth
above also constitutes fraud in the
origination of the Mortgage Loan.
Section 2.04 Representations and
Warranties of Sellers.
The Company, as
assignee of
Residential Funding
under the
Assignment
Agreement, hereby assigns to the Trustee for
the benefit of
Certificateholders
all of its right, title and interest in
respect of the Assignment Agreement and
each Seller's Agreement (to the extent assigned
to the Company
pursuant to the
Assignment Agreement) applicable to a Mortgage Loan.
Insofar as the Assignment
Agreement or the Company's rights under such Seller's
Agreement relate to the
representations and warranties made by
Residential Funding or the related Seller
25
<PAGE>
in respect of such Mortgage Loan and any
remedies provided
thereunder
for any
breach of such representations and warranties, such right, title and interest
may be enforced by the Master Servicer on behalf of the Trustee and the
Certificateholders. Upon the discovery by the Company,
the Master Servicer, the
Trustee or any Custodian of a breach of any of the representations and
warranties made in a Seller's Agreement that have been assigned
to the Trustee
pursuant to this Section 2.04 or of a
breach of any of the
representations
and
warranties made in the Assignment Agreement
(which, for purposes hereof, will be
deemed to include any other cause giving
rise to a repurchase
obligation under
the Assignment Agreement) in respect of any
Mortgage Loan which
materially and
adversely affects the interests of the
Certificateholders in such Mortgage Loan,
the party discovering such breach shall give
prompt written notice to the other
parties (any Custodian being so obligated under a Custodial Agreement). The
Master Servicer shall promptly notify the
related Seller or Residential Funding,
as the case may be, of such breach and
request that such
Seller or
Residential
Funding, as the case may be, either (i) cure such breach in all material
respects within 90 days from the date the
Master Servicer was
notified of such
breach or (ii) purchase such Mortgage Loan from the Trust
Fund at the Purchase
Price and in the manner set forth in
Section 2.02; provided
that in the case of
a breach under the Assignment Agreement Residential Funding shall have the
option to substitute a Qualified Substitute Mortgage Loan or Loans for such
Mortgage Loan if such substitution occurs
within two years following the Closing
Date; provided that if the breach would
cause the Mortgage Loan to be other than
a "qualified mortgage" as defined in Section
860G(a)(3) of the
Code, any such
cure, repurchase or substitution must occur within 90 days from the
date the
breach was discovered. If the breach of representation and warranty that gave
rise to the obligation to repurchase or substitute a
Mortgage Loan pursuant to
Section 4 of the Assignment Agreement was the representation and warranty set
forth in clause (xii) of Section 4 thereof, then the Master Servicer shall
request that Residential Funding pay to the
Trust Fund, concurrently with and in
addition to the remedies provided in the
preceding sentence, an
amount equal to
any liability, penalty or expense that was
actually incurred and paid out of or
on behalf of the Trust Fund, and that
directly resulted from
such breach, or if
incurred and paid by the Trust Fund
thereafter,
concurrently with such payment.
In the event that Residential Funding elects to substitute a Qualified
Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan
pursuant to this
Section 2.04, Residential Funding shall deliver to the
Trustee for the benefit
of the Certificateholders with respect to such Qualified
Substitute
Mortgage
Loan or Loans, the original Mortgage Note, the Mortgage,
an Assignment of
the
Mortgage in recordable form if required
pursuant to Section 2.01, and such other
documents and agreements as are required by
Section 2.01, with the Mortgage Note
endorsed as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date
for such month. Monthly Payments due
with respect to Qualified Substitute
Mortgage Loans in the month of substitution
shall not be part of the Trust Fund and
will be retained by the Master Servicer
and remitted by the Master Servicer to Residential Funding on the next
succeeding Distribution Date. For the month of
substitution,
distributions to
the Certificateholders will include the Monthly Payment due on a Deleted
Mortgage Loan for such month and thereafter Residential Funding shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend or cause to
be amended the Mortgage Loan
Schedule, for the benefit of the
Certificateholders
to reflect the removal
of
such Deleted Mortgage Loan and the substitution of the Qualified Substitute
Mortgage Loan or Loans and the Master Servicer shall deliver the amended
26
<PAGE>
Mortgage Loan Schedule, to the Trustee. Upon such substitution,
the Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement and the related Subservicing Agreement in all respects,
the related
Seller shall be deemed to have made the
representations
and warranties with
respect to the Qualified Substitute Mortgage Loan contained in the related
Seller's Agreement as of the date of substitution, insofar as Residential
Funding's rights in respect of such
representations and
warranties are assigned
to the Company pursuant to the Assignment Agreement, and the Company and the
Master Servicer shall be deemed to have made
with respect to any Qualified
Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in this Section 2.04,
in
Section 2.03 hereof and in Section 4 of the
Assignment Agreement, and the Master
Servicer shall be obligated to repurchase or substitute for any Qualified
Substitute Mortgage Loan as to which a Repurchase Event (as defined in the
Assignment Agreement) has occurred pursuant to Section 4 of the Assignment
Agreement.
In connection with the substitution of one or more Qualified
Substitute
Mortgage Loans for one or more Deleted
Mortgage Loans, the
Master Servicer will
determine the amount (if any) by which the
aggregate principal
balance of all
such Qualified Substitute Mortgage Loans as of
the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans
(in each case after application of the
principal portion of the Monthly Payments
due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential Funding shall
deposit the amount of such shortfall into the Custodial Account on the day of
substitution, without any reimbursement
therefor. Residential Funding shall give
notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation
of such shortfall
and (subject to Section 10.01(f)) by an Opinion of Counsel to the
effect that
such substitution will not cause (a)
any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on
"contributions
after
the startup date" under Section 860G(d)(1)
of the Code or (b) any portion of any
REMIC to fail to qualify as such at any time that any Certificate is
outstanding.
It is understood
and agreed that the obligation of the Seller or
Residential Funding, as the case may be, to
cure such breach or purchase (or in
the case of Residential Funding to substitute for) such Mortgage Loan as to
which such a breach has occurred and is
continuing
and to make any
additional
payments required under the Assignment
Agreement in
connection with a breach of
the representation and warranty in clause (xii) of Section 4 thereof
shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf
of Certificateholders. If the Master
Servicer is Residential Funding, then the Trustee shall also have
the right to
give the notification and require the purchase or
substitution provided
for in
the second preceding paragraph in the event
of such a breach of a representation
or warranty made by Residential Funding in the Assignment Agreement. In
connection with the purchase of or
substitution
for any such Mortgage
Loan by
Residential Funding, the Trustee shall assign
to Residential Funding all of the
Trustee's right, title and interest in
respect of the Seller's Agreement and the
Assignment Agreement applicable to such
Mortgage Loan.
27
<PAGE>
Section 2.05 Execution and Authentication of Certificates/Issuance
of
Certificates.
The Trustee
acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Mortgage Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together
with the assignment to it of all other
assets included in the Trust Fund and/or
applicable REMIC,
receipt of which
is
hereby acknowledged. Concurrently with such delivery
and in exchange therefor,
the Trustee, pursuant to the written request of the Company executed by an
officer of the Company, has executed and caused to be authenticated and
delivered to or upon the order of the
Company the Class R-I Certificates in
authorized denominations which together with
the Uncertificated REMIC I Regular
Interests, evidence the beneficial
interest in the REMIC
I. Concurrently
with
such delivery and in exchange
therefor, the Trustee, pursuant to the written
request of the Company executed by an officer of the
Company, has executed
and
caused to be authenticated and delivered to
or upon the order of the Company the
Class R-II Certificates in authorized denominations which together with the
Uncertificated REMIC II Regular Interests,
evidence the
beneficial interest in
the REMIC II.
Section 2.06 Conveyance of Uncertificated REMIC I and REMIC II Regular
Interests; Acceptance by the Trustee.
The Company, as of the Closing Date, and concurrently with the
execution
and delivery hereof, does hereby assign without
recourse all the
right, title
and interest of the Company in and to the Uncertificated REMIC I Regular
Interests and Uncertificated REMIC II Regular Interests to the
Trustee for the
benefit of the Holders of each Class of
Certificates
(other than the Class
R-I
and Class R-II Certificates). The Trustee acknowledges receipt of the
Uncertificated REMIC I Regular Interests and Uncertificated REMIC II Regular
Interests and declares that it holds and will hold the same in trust
for the
exclusive use and benefit of all
present and future Holders of each Class of
Certificates (other than the Class R- I and
Class R-II Certificates). The rights
of the Holders of each Class of
Certificates (other than the Class R-I and Class
R-II Certificates) to receive
distributions
from the proceeds of
REMIC III in
respect of such Classes, and all ownership interests of the Holders of such
Classes in such distributions shall be as
set forth in this Agreement.
Section 2.07 Issuance of Certificates
Evidencing Interest in REMIC II.
The Trustee
acknowledges the
assignment
to it of the
Uncertificated
REMIC II Regular Interests and,
concurrently therewith and in exchange therefor,
pursuant to the written request of the Company executed by an officer of the
Company, the Trustee has executed and
caused to be authenticated and delivered
to or upon the order of the Company, all
Classes of Certificates (other than the
Class R-I and Class R-II Certificates) in authorized denominations, which
evidence the beneficial interest in the
entire REMIC III.
Section 2.08 Purposes and Powers of the
Trust. (See Section 2.08 of the Standard
Terms)
Section 2.09 Agreement Regarding Ability
to Disclose.
The Company,
the Master Servicer and the Trustee hereby agree,
notwithstanding any other express or
implied agreement to the contrary, that any
and all Persons, and any of their respective
employees,
representatives,
and
other agents may disclose, immediately upon commencement of
discussions, to any
and all Persons, without limitation of any kind, the tax treatment and tax
28
<PAGE>
structure of the transaction and all materials of any kind
(including
opinions
or other tax analyses) that are provided to any of them
relating to such
tax
treatment and tax structure. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" are defined under Treasury Regulation ss.
1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
(SEE ARTICLE III OF THE STANDARD TERMS)
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 Certificate Account.
(See Section 4.01 of
the Standard Terms)
Section 4.02 Distributions.
(a) On each
Distribution
Date (x) the
Master Servicer on behalf of the
Trustee or
(y) the Paying Agent appointed by the Trustee, shall
distribute, to the
Master Servicer, in the case of a distribution
pursuant to
Section 4.02(a)(iii) below, the amount required to be
distributed to the Master Servicer or a Sub-Servicer pursuant to
Section
4.02(a)(iii) below, and to each Certificateholder of record on the
next
preceding Record Date (other than as provided in Section 9.01
respecting
the final distribution), either (1) in immediately
available funds
(by
wire transfer or otherwise) to the account of such Certificateholder at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder has
so notified
the Master
Servicer or the Paying
Agent, as the case may be, or (2) if such Certificateholder has not so
notified the Master
Servicer or the Paying Agent by the Record Date, by
check mailed to such
Certificateholder
at the address of such Holder
appearing in the Certificate Register, such Certificateholder's share
(which share shall be based on the aggregate of the Percentage
Interests
represented by Certificates of the applicable Class held by such
Holder)
of the following amounts, in the following order of priority
(subject to
the provisions of Sections 4.02(b) and (d) below),
in each case to
the
extent of the related Available Distribution Amount:
(i) (W) from the
Available Distribution Amount related to the Group I Loans,
to the Group I
Certificates, on a pro
rata basis based on
the Accrued
Certificate Interest
payable on such
Classes of Certificates for such
Distribution Date,
plus any Accrued Certificate Interest thereon
remaining unpaid from any previous Distribution Date except as
provided
in the last paragraph
of this Section 4.02(a) (the "Group I Senior
Interest Distribution Amount");
(X) from the Available
Distribution Amount related to the
Group II Loans, to the Group II Certificates, on a pro rata basis based
on Accrued Certificate
Interest payable on such Classes of Certificates
for such Distribution
Date, plus any Accrued Certificate Interest
thereon remaining
unpaid from any previous Distribution Date except as
provided in the last
paragraph of this
Section 4.02(a) (the
"Group II
Senior Interest Distribution Amount");
29
<PAGE>
(Y) from the Available
Distribution Amount related to the
Group III Loans,
to the Group III
Certificates,
on a pro rata
basis
based on Accrued Certificate Interest payable on such Classes of
Certificates for such
Distribution Date,
plus any Accrued
Certificate
Interest thereon
remaining unpaid from any previous Distribution Date
except as provided in the last paragraph of this Section 4.02(a) (the
"Group III Senior Interest Distribution Amount"); and
(Z) from the Available
Distribution Amount related to the
Group IV Loans, to the Group IV Certificates, on a pro rata basis based
on Accrued Certificate
Interest payable on such Classes of Certificates
for such Distribution
Date, plus any Accrued Certificate Interest
thereon remaining
unpaid from any previous Distribution Date except as
provided in the last
paragraph of this
Section 4.02(a) (the
"Group IV
Senior Interest Distribution Amount");
(ii) to the related
Senior Certificates, in the priorities and amounts
set
forth in Section
4.02(b)(i) through
Section 4.02(f), the sum of the
following (applied to reduce the Certificate Principal Balances of such
Senior Certificates, as applicable):
(A) the related
Senior Percentage for
such Distribution Date
times the sum
of the following:
(1) the principal
portion of each Monthly Payment due during the related Due
Period on each
Outstanding Mortgage
Loan in the
related Loan Group,
whether or not received on or prior to the related Determination Date,
minus the principal
portion of any related Debt Service Reduction which
together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(2) the Stated
Principal Balance of any Mortgage
Loan in the related
Loan
Group repurchased during the preceding calendar month (or deemed to
have
been so repurchased in accordance with Section 3.07(b) of the Standard
Terms) pursuant to Sections 2.02, 2.04 or 4.07 of the Standard
Terms and
Section 2.03 of the Standard Terms and this Series Supplement, and the
State Principal
Balance of the Mortgage Loans in the related Loan Group
purchased pursuant to Section 9.01 of the Standard Terms and this
Series
Supplement in connection with such Distribution Date, if
applicable, and
the amount of any
shortfall deposited in the Custodial Account in
connection with the
substitution
of a Deleted
Mortgage Loan from
the
related Loan Group
pursuant to Section
2.04 of the Standard
Terms or
Section 2.03 of the Standard Terms and this Series Supplement, during
the preceding calendar month; and
30
<PAGE>
(3) the principal
portion of all other unscheduled collections with respect
to the related Loan Group (other than Principal Prepayments in Full and
Curtailments and
amounts received in connection with a Cash Liquidation
or REO Disposition
of a Mortgage Loan in
such Loan Group
described in
Section 4.02(a)(ii)(B)
of this Series
Supplement,
including without
limitation any related Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) received
during the preceding
calendar month (or deemed to
have been so received in accordance with Section 3.07(b) of the
Standard
Terms) to the extent
applied by the Master
Servicer as recoveries
of
principal of the related Mortgage Loan pursuant to Section 3.14 of
the
Standard Terms;
(B) with respect to
each Mortgage Loan in the related Loan Group for which a
Cash Liquidation
or a REO Disposition occurred during the preceding
calendar month (or was
deemed to have
occurred during
such period in
accordance with
Section 3.07(b) of the Standard Terms) and did not
result in any Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses, an amount equal to the
lesser
of (a) the related Senior Percentage for such Distribution Date times
the Stated Principal
Balance of such
Mortgage Loan and (b) the related
Senior Accelerated
Distribution
Percentage for such
Distribution Date
times the related unscheduled collections (including without
limitation
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the
extent
applied by the Master Servicer as recoveries of principal of the
related
Mortgage Loan pursuant to Section 3.14 of the Standard Terms;
(C) the related Senior Accelerated Distribution Percentage for such
Distribution Date
times the aggregate of all Principal Prepayments in
Full received in the related Prepayment Period and Curtailments with
respect to the related
Loan Group received in
the preceding
calendar
month;
(D) any amounts
described in
subsection (ii),
clauses (A), (B) and
(C) of
this Section 4.02(a), as determined for any previous Distribution Date,
which remain unpaid after application of amounts previously
distributed
pursuant to this
clause (D) to the
extent that such
amounts are not
attributable to
Realized Losses which have been allocated to the
Subordinate Certificates;
(E) to the Holders
of the Group I Certificates, Group II Certificates, Group
III Certificates
or Group IV Certificates, as applicable, amounts
required to be distributed pursuant to Section 4.02(c); minus
(F) the related
Capitalization
Reimbursement
Amount for such
Distribution
Date, multiplied
by a fraction,
the numerator of which
is the related
Senior Principal
Distribution
Amount, without giving effect to this
clause (F), and the
denominator
of which is the sum of
the principal
distribution amounts for all related Classes of Class A
Certificates and
the related
Subordinate Amount
without giving effect to any reductions
for the related Capitalization Reimbursement Amount;
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<PAGE>
(iii) if the Certificate
Principal Balances of the Subordinate
Certificates
have not been reduced to zero, to the Master Servicer or a
Sub-Servicer,
by remitting for deposit to the Custodial Account, to the extent of and
in reimbursement for
any Advances or Sub-Servicer Advances previously
made with respect to
any Mortgage
Loan or REO
Property which remain
unreimbursed in whole
or in part following the Cash Liquidation or REO
Disposition of such
Mortgage Loan or REO Property, minus any such
Advances that were made with respect to delinquencies that ultimately
constituted Excess
Special Hazard Losses,
Excess Fraud Losses,
Excess
Bankruptcy Losses or Extraordinary Losses;
(iv) to the Holders of the
Class M-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(v) to the
Holders of the Class
M-1 Certificates,
an amount equal to the
Subordinate Principal
Distribution Amount
derived from each Loan Group
for such Class of Certificates for such Distribution Date, applied in
reduction of
the Certificate Principal Balance of the Class M-1
Certificates;
(vi) to the Holders of the
Class M-2
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(vii) to the Holders of the Class M-2
Certificates,
an amount equal to the
Subordinate Principal
Distribution Amount
derived from each Loan Group
for such Class of Certificates for such Distribution Date, applied in
reduction of
the Certificate Principal Balance of the Class M-2
Certificates;
(viii) to the Holders of the Class M-3
Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(ix) to the Holders of the Class M-3
Certificates,
an amount equal to the
Subordinate Principal
Distribution Amount
derived from each Loan Group
for such
Class of Certificates for such Distribution Date, applied in
reduction of
the Certificate Principal Balance of the Class M-3
Certificates;
(x) to the Holders
of the Class B-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(xi) to the Holders of the Class B-1
Certificates,
an amount equal to the
Subordinate Principal
Distribution Amount
derived from each Loan Group
for such Class of Certificates for such Distribution Date, applied in
reduction of
the Certificate Principal Balance of the Class B-1
Certificates;
(xii) to the Holders of the Class
B-2 Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
32
<PAGE>
(xiii) to the Holders of the Class B-2
Certificates,
an amount equal to the
Subordinate Principal
Distribution Amount
derived from each Loan Group
for such Class of Certificates for such Distribution Date, applied in
reduction of
the Certificate Principal Balance of the Class B-2
Certificates;
(xiv) to the Holders of the Class B-3
Certificates,
an amount equal to the
Accrued Certificate
Interest thereon for
such Distribution
Date, plus
any Accrued
Certificate
Interest thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(xv) to the Holders of the Class B-3
Certificates,
an amount equal to the
Subordinate Principal
Distribution Amount
derived from each Loan Group
for such Class of Certificates for such Distribution Date, applied in
reduction of
the Certificate Principal Balance of the Class B-3
Certificates;
(xvi) to the Senior Certificates,
in the priority set forth in Section 4.02(b)
of this Series Supplement, the portion, if any, of the Available
Distribution Amount
for the related Loan Group remaining after the
foregoing
distributions, applied
to reduce the
Certificate
Principal
Balances of such
Senior Certificates, but in no event more than the
aggregate of the outstanding Certificate Principal Balances of each
such
Class of Senior Certificates, and thereafter, to each Class of
Subordinate Certificates then outstanding beginning with such Class
with
the Highest Priority,
any portion of the Available Distribution Amount
for each Loan Group
remaining after the Senior Certificates have been
retired, applied to
reduce the Certificate
Principal Balance of each
such Class of
Subordinate
Certificates, but in
no event more than the
outstanding
Certificate Principal
Balance of each such Class of
Subordinate Certificates; and
(xvii) to the Class R-III Certificates, the balance, if any, of the
Available
Distribution Amount for Loan Group I.
Notwithstanding the foregoing, on any Distribution Date, with
respect to
the Class of Subordinate Certificates
outstanding on such Distribution Date with
the Lowest Priority, or in the event the
Subordinate
Certificates are no longer
outstanding, the Senior Certificates, Accrued Certificate Interest thereon
remaining unpaid from any previous
Distribution Date will
be distributable only
to the extent that (1) a shortfall in the amounts available to pay Accrued
Certificate Interest on any Class of
Certificates results from an interest rate
reduction in connection with a Servicing Modification, or (2) such unpaid
Accrued Certificate Interest was
attributable to interest shortfalls relating to
the failure of the Master Servicer to make any required Advance, or the
determination by the Master Servicer that any proposed Advance would be a
Nonrecoverable Advance with respect to the related
Mortgage Loan where such
Mortgage Loan has not yet been the subject of a Cash Liquidation or REO
Disposition or the related Liquidation Proceeds, Insurance Proceeds and REO
Proceeds have not yet been distributed to
the Certificateholders.
(b) Distributions
of principal on the Senior Certificates on each
Distribution Date
occurring prior to the Credit Support Depletion Date
will be made as follows:
33
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(i) the Group I
Senior Principal
Distribution
Amount shall be
distributed
sequentially, as follows:
(A) first,
to the Class R-I, Class R-II and Class R-III Certificates,
concurrently on a pro
rata basis, until the Certificate Principal
Balances thereof have been reduced to zero; and
(B) second, to the
Class I-A Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) the Group II Senior
Principal Distribution
Amount shall be distributed,
sequentially, to
the Class II-A-1 Certificates and Class II-A-2
Certificates, in
that order, in each case until the Certificate
Principal Balance thereof has been reduced to zero;
(iii) the Group III Senior
Principal Distribution
Amount shall be distributed
to the Class III-A Certificates, until the Certificate Principal
Balance
thereof has been reduced to zero;
(iv) the Group IV Senior
Principal Distribution
Amount shall be
distributed
to the Class IV-A Certificates, until the Certificate Principal
Balance
thereof has been reduced to zero;
(c) Prior to the
occurrence of the Credit Support Depletion Date but after
the reduction of the Certificate Principal Balances of any of the
Group
I, Group II, Group III or Group IV Certificates to zero, the remaining
Group I, Group II, Group III or Group IV Certificates, as applicable,
will be entitled to receive, on a pro rata basis, based on the
Certificate Principal Balances of the related Certificates,
in addition
to any Principal
Prepayments in Full and Curtailments related to such
Certificates'
respective Loan Group, 100% of the Principal Prepayments
in Full and Curtailments on the Mortgage Loans in the Loan Group
related
to the Certificates
that have been reduced
to zero, and in
accordance
with the priorities set forth in clause 4.02(b) above, and in reduction
