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WELLS FARGO BANK, N.A., as Trustee POOLING AND SERVICING AGREEMENT Dated March 30, 2005

Pooling and Servicing Agreement

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Banc of America Funding C | WELLS FARGO BANK, N.A | NATIONAL CITY MORTGAGE CO | BANK OF AMERICA, NATIONAL ASSOCIATION

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Title: WELLS FARGO BANK, N.A., as Trustee POOLING AND SERVICING AGREEMENT Dated March 30, 2005
Governing Law: New York     Date: 6/2/2005

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                                                                       EXHIBIT 4

 

================================================================================

 

 

 

                      BANC OF AMERICA FUNDING CORPORATION,

 

                                   as Depositor,

 

                       GREENPOINT MORTGAGE FUNDING, INC.,

 

                                 as a Servicer,

 

                     BANK OF AMERICA, NATIONAL ASSOCIATION,

 

                                 as a Servicer,

 

                            NATIONAL CITY MORTGAGE CO.,

 

                                 as a Servicer,

 

                                       and

 

                             WELLS FARGO BANK, N.A.,

 

                                   as Trustee

 

                          POOLING AND SERVICING AGREEMENT

 

                              Dated March 30, 2005

 

                             -----------------------

 

                       Mortgage Pass-Through Certificates

 

                                  Series 2005-B

 

 

 

================================================================================

<PAGE>

 

                                TABLE OF CONTENTS

 

 

PRELIMINARY STATEMENT......................................................

 

                                    ARTICLE I

 

                                   DEFINITIONS

 

Section 1.01   Defined Terms................................................

Section 1.02   Calculations.................................................

Section 1.03   Rights of the NIMS Insurer...................................

 

                                   ARTICLE II

 

                          CONVEYANCE OF MORTGAGE LOANS

                        ORIGINAL ISSUANCE OF CERTIFICATES

 

Section 2.01   Conveyance of Mortgage Loans.................................

Section 2.02   Acceptance by the Trustee of the Mortgage Loans..............

Section 2.03   Representations, Warranties and Covenants of the Servicers...

Section 2.04   Representations and Warranties of the Depositor as

                to the Mortgage Loans......................................

Section 2.05   Designation of Interests in the REMICs.......................

Section 2.06   Designation of Start-up Day..................................

Section 2.07   REMIC Certificate Maturity Date..............................

Section 2.08   Execution and Delivery of Certificates.......................

Section 2.09   Repurchase of Converted Mortgage Loans.......................

 

                                   ARTICLE III

 

                          ADMINISTRATION AND SERVICING

                                OF MORTGAGE LOANS

 

Section 3.01   Servicers to Service Mortgage Loans..........................

Section 3.02   Subservicing; Enforcement of the Obligations of the

                Servicers..................................................

Section 3.03   Fidelity Bond; Errors and Omissions Insurance................

Section 3.04   Access to Certain Documentation..............................

Section 3.05   Maintenance of Primary Mortgage Insurance Policy;

                 Claims; Collection of BPP Mortgage Loan Payments...........

Section 3.06   Rights of the Depositor and the Trustee in Respect

                of the Servicers...........................................

Section 3.07   Trustee to Act as Servicer...................................

Section 3.08   Collection of Mortgage Loan Payments.........................

Section 3.09   Collection of Mortgage Loan Payments; Servicer Custodial

                 Accounts, Distribution Account and Reserve Account........

Section 3.10   Collection of Taxes, Assessments and Similar Items;

                 Escrow Accounts...........................................

Section 3.11   Access of Trustee and NIMS Insurer to Certain Documentation

                 and Information Regarding the Mortgage Loans..............

Section 3.12   Permitted Withdrawals from the Servicer Custodial Accounts

                 and the Distribution Account..............................

Section 3.13   Maintenance of Hazard Insurance and Other Insurance..........

Section 3.14   Enforcement of Due-On-Sale Clauses; Assumption Agreements....

Section 3.15   Realization Upon Defaulted Mortgage Loans; REO Property......

Section 3.16   Trustee to Cooperate; Release of Mortgage Files..............

Section 3.17   Documents, Records and Funds in Possession of the

                Servicers to be Held for the Trustee.......................

Section 3.18   Servicing Compensation.......................................

Section 3.19   Annual Statement as to Compliance............................

Section 3.20   Annual Independent Public Accountants' Servicing

                Statement; Financial Statements............................

Section 3.21   Advances.....................................................

Section 3.22   Modifications, Waivers, Amendments and Consents..............

Section 3.23   Reports to the Securities and Exchange Commission............

 

                                   ARTICLE IV

 

                             SERVICERS' CERTIFICATES

 

Section 4.01   Servicers' Certificates......................................

 

                                   ARTICLE V

 

                 PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;

                              REMIC ADMINISTRATION

 

Section 5.01   Distributions................................................

Section 5.02   Priorities of Distributions for the Shifting Interest Groups.

Section 5.03   Priorities of Distributions for Group 3......................

Section 5.04   Allocation of Losses for the Shifting Interest Certificates..

Section 5.05   Allocation of Losses for the Group 3 Certificates............

Section 5.06   Statements to Certificateholders.............................

Section 5.07   Tax Returns and Reports to Certificateholders................

Section 5.08   Tax Matters Person...........................................

Section 5.09   Rights of the Tax Matters Person in Respect of the Trustee...

Section 5.10   REMIC Related Covenants......................................

Section 5.11   REMIC Distributions..........................................

 

                                   ARTICLE VI

 

                                THE CERTIFICATES

 

Section 6.01   The Certificates.............................................

Section 6.02   Registration of Transfer and Exchange of Certificates........

Section 6.03   Mutilated, Destroyed, Lost or Stolen Certificates............

Section 6.04   Persons Deemed Owners........................................

 

                                   ARTICLE VII

 

                         THE DEPOSITOR AND THE SERVICERS

 

Section 7.01   Respective Liabilities of the Depositor and the Servicers....

Section 7.02   Merger or Consolidation of the Depositor or a Servicer.......

Section 7.03   Limitation on Liability of the Depositor, the

              Servicers and Others.........................................

Section 7.04   Depositor and Servicers Not to Resign........................

 

                                  ARTICLE VIII

 

                                     DEFAULT

 

Section 8.01   Events of Default............................................

Section 8.02   Remedies of Trustee..........................................

Section 8.03   Directions by Certificateholders and Duties of

                Trustee During Event of Default............................

Section 8.04   Action upon Certain Failures of a Servicer and upon

                Event of Default...........................................

Section 8.05   Trustee to Act; Appointment of Successor.....................

Section 8.06   Notification to Certificateholders...........................

 

                                   ARTICLE IX

 

                                   THE TRUSTEE

 

Section 9.01   Duties of Trustee............................................

Section 9.02   Certain Matters Affecting the Trustee........................

Section 9.03   Trustee not Liable for Certificates or Mortgage Loans........

Section 9.04   Trustee May Own Certificates.................................

Section 9.05   Eligibility Requirements for Trustee.........................

Section 9.06   Resignation and Removal of Trustee...........................

Section 9.07   Successor Trustee............................................

Section 9.08   Merger or Consolidation of Trustee...........................

Section 9.09   Appointment of Co-Trustee or Separate Trustee................

Section 9.10   Authenticating Agents........................................

Section 9.11   Trustee's Expenses...........................................

Section 9.12   Appointment of Custodian.....................................

Section 9.13   Paying Agents................................................

Section 9.14   Limitation of Liability......................................

Section 9.15   Trustee May Enforce Claims Without Possession

                of Certificates............................................

Section 9.16   Suits for Enforcement........................................

Section 9.17   Waiver of Bond Requirement...................................

Section 9.18   Waiver of Inventory, Accounting and Appraisal Requirement....

 

                                    ARTICLE X

 

                                   TERMINATION

 

Section 10.01   Termination upon Purchase or Liquidation of All

                 Mortgage Loans............................................

Section 10.02   Additional Termination Requirements.........................

 

                                   ARTICLE XI

 

                            MISCELLANEOUS PROVISIONS

 

Section 11.01   Amendment...................................................

Section 11.02   Recordation of Agreement; Counterparts......................

Section 11.03   Limitation on Rights of Certificateholders..................

Section 11.04   Governing Law...............................................

Section 11.05   Notices.....................................................

Section 11.06   Severability of Provisions..................................

Section 11.07   Certificates Nonassessable and Fully Paid...................

Section 11.08   Access to List of Certificateholders........................

Section 11.09   Recharacterization..........................................

Section 11.10   Third Party Beneficiary.....................................

 

 

EXHIBITS

--------

 

Exhibit A-1-A-1          Form of Face of Class 1-A-1 Certificate

Exhibit A-1-A-R          Form of Face of Class 1-A-R Certificate

Exhibit A-2-A-1          Form of Face of Class 2-A-1 Certificate

Exhibit A-3-A-1          Form of Face of Class 3-A-1 Certificate

Exhibit A-3-A-1A         Form of Face of Class 3-A-1A Certificate

Exhibit A-3-A-1B         Form of Face of Class 3-A-1B Certificate

Exhibit A-3-A-2          Form of Face of Class 3-A-2 Certificate

Exhibit A-3-A-2A         Form of Face of Class 3-A-2A Certificate

Exhibit A-3-A-2B         Form of Face of Class 3-A-2B Certificate

Exhibit A-3-A-3          Form of Face of Class 3-A-3 Certificate

Exhibit A-3-CE           Form of Face of Class 3-CE Certificate

Exhibit A-3-P            Form of Face of Class 3-P Certificate

Exhibit B-CB-1           Form of Face of Class CB-1 Certificate

Exhibit B-CB-2           Form of Face of Class CB-2 Certificate

Exhibit B-CB-3           Form of Face of Class CB-3 Certificate

Exhibit B-CB-4           Form of Face of Class CB-4 Certificate

Exhibit B-CB-5           Form of Face of Class CB-5 Certificate

Exhibit B-CB-6           Form of Face of Class CB-6 Certificate

Exhibit B-3-M-1          Form of Face of Class 3-M-1 Certificate

Exhibit B-3-M-2          Form of Face of Class 3-M-2 Certificate

Exhibit B-3-B-1          Form of Face of Class 3-B-1 Certificate

Exhibit B-3-B-2          Form of Face of Class 3-B-2 Certificate

Exhibit B-3-B-3          Form of Face of Class 3-B-3 Certificate

Exhibit C                Form of Reverse of all Certificates

Exhibit D-1              Loan Group 1 Mortgage Loan Schedule

Exhibit D-2               Loan Group 2 Mortgage Loan Schedule

Exhibit D-3              Loan Group 3 Mortgage Loan Schedule

Exhibit D-4              Loan Subgroup 3A Mortgage Loan Schedule

Exhibit D-5              Loan Subgroup 3B Mortgage Loan Schedule

Exhibit E                Form of Request for Release

Exhibit F                Form of Certification of Establishment of Account

Exhibit G-1              Form of Transferor's Certificate

Exhibit G-2A             Form I of Transferee's Certificate

Exhibit G-2B             Form II of Transferee's Certificate

Exhibit H                Form of Transferee Representation Letter

                        for ERISA Restricted Certificates

Exhibit I                Form of Affidavit Regarding Transfer of Residual

                        Certificate

Exhibit J                List of Recordation States

Exhibit K                Form of Initial Certification

Exhibit L                Form of Final Certification

Exhibit M                Form of Sarbanes-Oxley Certification

Exhibit N                Form of Trustee's Sarbanes-Oxley Reliance Certification

Exhibit O                Form of Servicer's Sarbanes-Oxley Reliance Certification

Exhibit P                Form of Yield Maintenance Agreements

<PAGE>

 

                         POOLING AND SERVICING AGREEMENT

 

            THIS POOLING AND SERVICING AGREEMENT, dated March 30, 2005, is

hereby executed by and among BANC OF AMERICA FUNDING CORPORATION, as depositor

(together with its permitted successors and assigns, the "Depositor"),

GREENPOINT MORTGAGE FUNDING, INC., as a servicer (together with its permitted

successors and assigns, "GreenPoint"), BANK OF AMERICA, NATIONAL ASSOCIATION, as

a servicer (together with its permitted successors and assigns, "BANA"),

NATIONAL CITY MORTGAGE CO., as a servicer (together with its permitted

successors and assigns, "National City Mortgage" and, collectively with

GreenPoint and BANA, the "Servicers"), and WELLS FARGO BANK, N.A., as trustee

(together with its permitted successors and assigns, the "Trustee").

 

                        W I T N E S S E T H   T H A T:

                        - - - - - - - - - -   - - - -

 

            In consideration of the mutual agreements herein contained, the

Depositor, the Servicers and the Trustee agree as follows:

 

                              PRELIMINARY STATEMENT

 

            The Trust Estate for federal income tax purposes will be treated as

four real estate mortgage investment conduits (the "Upper-Tier REMIC," the

"Lower-Tier REMIC," the "Group 3 Upper-Tier REMIC" and the "Group 3 Lower-Tier

REMIC," respectively, and each a "REMIC"). The Certificates (other than the

Class 1-A-R and the Group 3 Certificates) shall constitute "regular interests"

in the Upper-Tier REMIC. The Offered Group 3 Certificates (other than the Class

3-A-3 Certificates) and each Component (exclusive of the right of such

Certificates or Components to receive Cap Carryover Amounts) and the Class 3-CE

Certificates shall constitute "regular interests" in the Group 3 Upper-Tier

REMIC. The Certificates (other than the Class 1-A-R and Class 3-P Certificates)

are the "Regular Certificates." The Uncertificated Lower-Tier Interests shall

constitute the "regular interests" in the Lower-Tier REMIC. The Uncertificated

Group 3 Lower-Tier Interests shall constitute the "regular interests" in the

Group 3 Lower-Tier REMIC. The Class 1-LR Interest shall be the "residual

interest" in the Lower-Tier REMIC. The Class 1-UR Interest shall be the

"residual interest" in the Upper-Tier REMIC. The Class 3-LR Interest shall be

the "residual interest" in the Group 3 Lower-Tier REMIC. The Class 3-UR Interest

shall be the "residual interest" in the Group 3 Upper-Tier REMIC. The portion of

the Trust Estate consisting of the Reserve Account, the Yield Maintenance

Agreements, the Prepayment Premiums Certificates, the rights of the Offered

Group 3 Certificates to receive Cap Carryover Amounts and the obligation of the

Class 3-CE Certificates to pay Cap Carryover Amounts shall not be assets of any

REMIC created hereunder, but rather shall be assets of the Grantor Trust. The

assets of the Grantor Trust, the Certificates, the Uncertificated Lower-Tier

Interests and the Uncertificated Group 3 Lower-Tier Interests will represent the

entire beneficial ownership interest in the Trust. The "latest possible maturity

date" for federal income tax purposes of all interests created hereby will be

the REMIC Certificate Maturity Date.

 

            The following table sets forth characteristics of the Certificates

and Components, together with the minimum denominations and integral multiples

in excess thereof in which the Classes of Certificates shall be issuable:

<PAGE>

<TABLE>

<CAPTION>

==================== ================================== ================= ============================== ==========================

                                                                                      Minimum                 Integral Multiples

                                                          Pass-Through             Denomination/                   in Excess

Classes               Initial Class Certificate Balance         Rate              Percentage Interest               of Minimum

-------------------- ---------------------------------- ----------------- ------------------------------ --------------------------

<S>                                 <C>                           <C>                    <C>                            <C>

Class 1-A-1                        $96,530,000.00                (1)                     $1,000                         $1

Class 1-A-R                               $100.00                (1)                       $100                         N/A

Class 2-A-1                       $120,572,000.00                (2)                     $1,000                         $1

Class 3-A-1                       $279,069,000.00                (3)                     $1,000                         $1

Class 3-A-1A                      $118,000,000.00                (3)                     $1,000                         $1

Class 3-A-1B                       $32,000,000.00                (3)                      $1,000                         $1

Class 3-A-2                       $107,349,000.00                (4)                     $1,000                         $1

Class 3-A-2A                       $78,000,000.00                (4)                     $1,000                          $1

Class 3-A-2B                       $22,000,000.00                (4)                     $1,000                         $1

Class 3-A-3                        $70,714,000.00                (5)                     $1,000                         $1

Class CB-1                          $4,760,000.00                (6)                    $25,000                         $1

Class CB-2                          $3,715,000.00                (6)                    $25,000                         $1

Class CB-3                           $2,438,000.00                (6)                    $25,000                         $1

Class CB-4                          $1,857,000.00                (6)                    $25,000                         $1

Class CB-5                          $1,394,000.00                (6)                    $25,000                         $1

Class CB-6                            $928,881.00                (6)                    $25,000                         $1

Class 3-M-1                        $21,698,000.00                 (7)                    $25,000                         $1

Class 3-M-2                        $18,598,000.00                (7)                    $25,000                         $1

Class 3-B-1                        $12,787,000.00                (7)                     $25,000                         $1

Class 3-B-2                         $3,875,000.00                (7)                    $25,000                         $1

Class 3-B-3                         $5,424,000.00                (7)                    $25,000                         $1

Class 3-CE                               (8)                     (8)                      N/A                          N/A

Class 3-P                               N/A                     N/A                       N/A                           N/A

 

 

                                                          Pass-Through                                       Integral Multiples In

Components                Initial Component Balance             Rate              Minimum Denomination            Excess Of Minimum

-------------------- ---------------------------------- ----------------- ------------------------------ --------------------------

Class 3-A-3A                   $47,675,000.00                   (9)                       N/A                            N/A

Class 3-A-3B                   $23,039,000.00                   (10)                      N/A                           N/A

</TABLE>

 

(1)   For each Distribution Date, interest will accrue on these Certificates at a

     per annum rate equal to the Net WAC for the Group 1 Mortgage Loans.

 

(2)   For each Distribution Date, interest will accrue on these Certificates at a

     per annum rate equal to the Net WAC for the Group 2 Mortgage Loans.

 

(3)   For each Distribution Date occurring prior to and including the applicable

     Termination Date, interest will accrue on these Certificates at a per annum

     rate equal to the lesser of (i) the sum of One-Month LIBOR and 0.23%, 0.21%

     and 0.31% with respect to the Class 3-A-1, Class 3-A-1A and Class 3-A-1B

     Certificates, respectively, and (ii) the Subgroup 3A Cap. On each

     Distribution Date following the applicable Termination Date, interest will

     accrue on these Certificates at a per annum rate equal to the lesser of (i)

     the sum of One-Month LIBOR and 0.46%, 0.42% and 0.62% with respect to the

     Class 3-A-1, Class 3-A-1A and Class 3-A-1B Certificates, respectively, and

     (ii) the Subgroup 3A Cap.

 

(4)   For each Distribution Date occurring prior to and including the applicable

     Termination Date, interest will accrue on these Certificates at a per annum

     rate equal to the lesser of (i) the sum of One-Month LIBOR and 0.24%, 0.22%

     and 0.31% with respect to the Class 3-A-2, Class 3-A-2A and Class 3-A-2B

     Certificates, respectively, and (ii) the Subgroup 3B Cap. On each

     Distribution Date following the applicable Termination Date, interest will

     accrue on these Certificates at a per annum rate equal to the lesser of (i)

     the sum of One-Month LIBOR and 0.48%, 0.44% and 0.62% with respect to the

     Class 3-A-2, Class 3-A-2A and Class 3-A-2B Certificates, respectively, and

     (ii) the Subgroup 3B Cap.

 

(5)   The Class 3-A-3 Certificates will be deemed for purposes of distributions

     of principal and interest to consist of two Components as described in the

     table: the Class 3-A-3A Component and the Class 3-A-3B Component (each, a

     "Component"). The Components are not severable.

 

(6)   Interest will accrue on these Certificates as of any Distribution Date at a

     per annum rate equal to the weighted average (based on the Group

     Subordinate Amount for each Loan Group) of the Net WAC for each of the

     Group 1 and Group 2 Mortgage Loans.

 

(7)   For each Distribution Date occurring prior to and including the applicable

     Termination Date, interest will accrue on these Certificates at a per annum

     rate equal to the lesser of (i) the sum of One-Month LIBOR and 0.45%,

     0.70%, 1.20%, 2.00% and 2.00% with respect to the Class 3-M-1, Class 3-M-2,

      Class 3-B-1, Class 3-B-2 and Class 3-B-3 Certificates, respectively, and

     (ii) the Group 3 Cap. On each Distribution Date following the applicable

     Termination Date, interest will accrue on these Certificates at a per annum

     rate equal to the lesser of (i) the sum of One-Month LIBOR and 0.675%,

     1.05%, 1.80%, 3.00% and 3.00% with respect to the Class 3-M-1, Class 3-M-2,

     Class 3-B-1, Class 3-B-2 and Class 3-B-3 Certificates, respectively, and

     (ii) the Group 3 Cap.

 

(8)   Solely for REMIC purposes, the Class 3-CE Certificates will (i) have an

     initial Original Class Certificate Balance equal to the Initial

     Overcollateralization Amount and (ii) will bear interest on their Notional

     Amount at their Pass-Through Rate.

 

(9)   For each Distribution Date occurring prior to and including the applicable

     Termination Date, interest will accrue on this Component at a per annum

     rate equal to the lesser of (i) the sum of One-Month LIBOR and 0.30% and

     (ii) the Subgroup 3A Cap. On each Distribution Date following the

     applicable Termination Date, interest will accrue on this Component at a

     per annum rate equal to the lesser of (i) the sum of One-Month LIBOR and

     0.60% and (ii) the Subgroup 3A Cap.

 

(10) For each Distribution Date occurring prior to and including the applicable

     Termination Date, interest will accrue on this Component at a per annum

     rate equal to the lesser of (i) the sum of One-Month LIBOR and 0.30% and

     (ii) the Subgroup 3B Cap. On each Distribution Date following the

     applicable Termination Date, interest will accrue on this Component at a

     per annum rate equal to the lesser of (i) the sum of One-Month LIBOR and

     0.60% and (ii) the Subgroup 3B Cap.

<PAGE>

 

                                     ARTICLE I

 

                                   DEFINITIONS

 

            Section 1.01 Defined Terms. Whenever used in this Agreement, the

following words and phrases, unless the context otherwise requires, shall have

the meanings specified in this Article:

 

            1933 Act: The Securities Act of 1933, as amended.

 

            60+ Day Delinquent Loan: For each Distribution Date, each Group 3

Mortgage Loan (including each Group 3 Mortgage Loan in foreclosure and each

Group 3 Mortgage Loan for which the Mortgagor has filed for bankruptcy after the

Closing Date) with respect to which any portion of a Monthly Payment is, as of

the Due Date in the prior calendar month, two months or more past due and each

Group 3 Mortgage Loan relating to an REO Property.

 

            3LT Interest Loss Allocation Amount: With respect to any

Distribution Date, an amount equal to (a) the product of (i) 50% of the

aggregate Stated Principal Balance of the Group 3 Mortgage Loans as of the Due

Date in the month of such Distribution Date and (ii) the Group 3 Lower-Tier Rate

for Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.

 

            3LT Marker Allocation Percentage: 50% of any amount payable from or

loss attributable to the Group 3 Mortgage Loans, which shall be allocated to

Regular Interest LT1AA, Regular Interest LT1A1, Regular Interest LT1A1A, Regular

Interest LT1A1B, Regular Interest LT1A2, Regular Interest LT1A2A, Regular

Interest LT1A2B, Regular Interest LT1A3A, Regular Interest LT1A3B, Regular

Interest LT1M1, Regular Interest LT1M2, Regular Interest LT1B1, Regular Interest

LT1B2, Regular Interest LT1B3 and Regular Interest LT1ZZ as provided in Section

5.11(c)(i).

 

            3LT Overcollateralization Target Amount: 0.50% of the Targeted

Overcollateralization Amount.

 

            3LT Overcollateralized Amount: With respect to any date of

determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of

the Group 3 Uncertificated Lower-Tier Interests minus (ii) the aggregate of the

Uncertificated Principal Balances of Regular Interest LT1A1, Regular Interest

LT1A1A, Regular Interest LT1A1B, Regular Interest LT1A2, Regular Interest

LT1A2A, Regular Interest LT1A2B, Regular Interest LT1A3A, Regular Interest

LT1A3B, Regular Interest LT1M1, Regular Interest LT1M2, Regular Interest LT1B1,

Regular Interest LT1B2 and Regular Interest LT1B3, in each case as of such date

of determination.

 

            3LT Principal Loss Allocation Amount: With respect to any

Distribution Date, an amount equal to (a) the product of (i) 50% of the

aggregate Stated Principal Balance of the Group 3 Mortgage Loans as of the Due

Date in the month of such Distribution Date and (ii) 1 minus a fraction, the

numerator of which is two times the aggregate of the Uncertificated Principal

Balances of Regular Interest LT1A1, Regular Interest LT1A1A, Regular Interest

LT1A1B, Regular Interest LT1A2, Regular Interest LT1A2A, Regular Interest

LT1A2B, Regular Interest LT1A3A, Regular Interest LT1A3B, Regular Interest

LT1M1, Regular Interest LT1M2, Regular Interest LT1B1, Regular Interest LT1B2

and Regular Interest LT1B3 and the denominator of which is the aggregate of the

Uncertificated Principal Balances of Regular Interest LT1A1, Regular Interest

LT1A1A, Regular Interest LT1A1B, Regular Interest LT1A2, Regular Interest

LT1A2A, Regular Interest LT1A2B, Regular Interest LT1A3A, Regular Interest

LT1A3B, Regular Interest LT1M1, Regular Interest LT1M2, Regular Interest LT1B1,

Regular Interest LT1B2, Regular Interest LT1B3 and Regular Interest LT1ZZ.

 

            3LT Sub WAC Allocation Percentage: 50% of any amount payable or loss

attributable from the Group 3 Mortgage Loans, which shall be allocated to

Regular Interest LT1SUB, Regular Interest LT1GRP, Regular Interest LT2SUB,

Regular Interest LT2GRP and Regular Interest LT1XX.

 

            Accrued Certificate Interest: For any Distribution Date and each

Class of interest-bearing Certificates (other than the Class 3-A-3

Certificates), one month's interest accrued during the related Interest Accrual

Period at the applicable Pass-Through Rate on the related Class Certificate

Balance less, in the case of the Offered Group 3 Certificates (other than the

Class 3-A-3 Certificates), such Class' Interest Percentage of Relief Act

Shortfalls for such Distribution Date. For any Distribution Date and the Class

3-A-3 Certificates, the sum of the Accrued Component Interest for each

Component.

 

            Accrued Component Interest: For any Distribution Date and each

Component, one month's interest accrued during the related Interest Accrual

Period at the applicable Pass-Through Rate on the related Component Balance less

such Component's Interest Percentage of Relief Act Shortfalls for such

Distribution Date.

 

            Adjusted Pool Amount: With respect to any Distribution Date and

Shifting Interest Loan Group, the Cut-off Date Pool Principal Balance of the

Mortgage Loans in such Loan Group minus the sum of (i) all amounts in respect of

principal received in respect of the Mortgage Loans in such Loan Group

(including, without limitation, amounts received as Monthly Payments, Periodic

Advances, Principal Prepayments, Liquidation Proceeds and Substitution

Adjustment Amounts) and distributed to Holders of the Certificates of the

Related Group on such Distribution Date and all prior Distribution Dates and

(ii) the principal portion of all Realized Losses (other than Debt Service

Reductions) incurred on the Mortgage Loans in such Loan Group from the Cut-off

Date through the end of the month preceding such Distribution Date.

 

            Advance: A Periodic Advance or a Servicing Advance.

 

            Agreement: This Pooling and Servicing Agreement together with all

amendments hereof and supplements hereto.

 

            Amount Held for Future Distribution: As to any Distribution Date and

Loan Group, the total of the amounts held in the Servicer Custodial Accounts at

the close of business on the preceding Determination Date on account of (i)

Principal Prepayments and Liquidation Proceeds received or made on the Mortgage

Loan in such Loan Group in the month of such Distribution Date and (ii) payments

which represent receipt of Monthly Payments on the Mortgage Loans in such Loan

Group in respect of a Due Date or Due Dates subsequent to the related Due Date.

 

             Ancillary Income: All assumption fees, late payment charges and all

other ancillary income and fees (other than Prepayment Premiums) with respect to

the Mortgage Loans.

 

            Applied Realized Loss Amount: With respect to each Distribution

Date, the excess, if any, of the aggregate of (a) the Class Certificate Balances

of the Offered Group 3 Certificates (after taking into account the distribution

of the Group 3 Principal Distribution Amount on such Distribution Date and any

increase in any Class Certificate Balance of the Offered Group 3 Certificates as

a result of Recoveries) over (b) the aggregate Stated Principal Balance of Loan

Group 3 as of the Due Date in the month of such Distribution Date.

 

            Appraised Value: With respect to any Mortgaged Property, either (i)

the lesser of (a) the appraised value determined in an appraisal obtained by the

originator at origination of such Mortgage Loan or, in certain cases, an

automated valuation model or tax assessed value and (b) the sales price for such

property, except that, in the case of Mortgage Loans the proceeds of which were

used to refinance an existing mortgage loan, the Appraised Value of the related

Mortgaged Property is the appraised value thereof determined in an appraisal

obtained at the time of refinancing or, in certain cases, an automated valuation

model or tax assessed value, or (ii) the appraised value determined in an

appraisal made at the request of a Mortgagor subsequent to origination in order

to eliminate the Mortgagor's obligation to keep a Primary Mortgage Insurance

Policy in force.

 

            Assignment of Mortgage: An individual assignment of the Mortgage,

notice of transfer or equivalent instrument in recordable form, sufficient under

the laws of the jurisdiction wherein the related Mortgaged Property is located

to give record notice of the sale of the Mortgage.

 

            Available Funds: As to any Distribution Date, the sum of the Group 3

Interest Remittance Amount and the Group 3 Principal Remittance Amount for such

Distribution Date.

 

            Authenticating Agents: As defined in Section 9.10.

 

            BAFC: Banc of America Funding Corporation or its successor in

interest.

 

            BANA: Bank of America, National Association, a national banking

association, or its successor in interest, in its capacity as Servicer of the

BANA Mortgage Loans, or any successor servicer of such Mortgage Loans appointed

as herein provided.

 

            BANA Custodial Account: The separate Eligible Account or Accounts

created and maintained by BANA pursuant to Section 3.09(a).

 

            BANA Mortgage Loans: The Mortgage Loans serviced by BANA and

identified as such on Exhibit D-1, Exhibit D-2, Exhibit D-3, Exhibit D-4 and

Exhibit D-5 of the Mortgage Loan Schedule.

 

             Book-Entry Certificate: All Classes of Certificates other than the

Physical Certificates.

 

            BPP Mortgage Loan: Any Mortgage Loan which includes a Borrowers

Protection Plan(R) addendum to the related Mortgage Note whereby BANA agrees to

cancel (i) certain payments of principal and interest on such Mortgage Loan for

up to twelve months upon the disability or involuntary unemployment of the

Mortgagor or (ii) the outstanding principal balance of the Mortgage Loan upon

the accidental death of the Mortgagor; provided that such Borrowers Protection

Plan(R) has not been terminated in accordance with its terms.

 

            BPP Mortgage Loan Payment: With respect to any BPP Mortgage Loan,

the Monthly Covered Amount or Total Covered Amount, if any, payable by BANA

pursuant to Section 6 of the Mortgage Loan Purchase Agreement.

 

            Business Day: Any day other than (i) a Saturday or a Sunday or (ii)

a day on which banking institutions in the State of North Carolina, the State of

New York, the State of Ohio, the State of California, the State of Minnesota,

the State of Maryland or any state in which the Corporate Trust Office of the

Trustee is located are required or authorized by law or executive order to be

closed.

 

            Calculated Principal Distribution: As defined in Section 5.04(c).

 

            Cap: Any of the Subgroup 3A Cap, the Subgroup 3B Cap or the Group 3

Cap.

 

            Cap Carryover Amount: If on any Distribution Date the Accrued

Certificate Interest for any Class of Offered Group 3 Certificates or the

Accrued Component Interest for any Component is based upon clause (ii) of the

definition of the applicable Cap, the excess of (i) the amount of interest such

Class or Component would have been entitled to receive on such Distribution Date

based on the related Pass-Through Rate (without regard to the applicable Cap),

over (ii) the amount of interest such Class or Component received on such

Distribution Date based on the applicable Cap, together with the unpaid portion

of any such excess from prior Distribution Dates (and interest accrued thereon

at the then applicable Pass-Through Rate on such Class or Component).

 

            CB Crossed Group: Any of Group 1 or Group 2.

 

            CB Crossed Loan Group: Any of Loan Group 1 or Loan Group 2.

 

            CB Crossed Loan Group Senior Percentage: With respect to any

Distribution Date, the percentage, carried six places rounded up, obtained by

dividing the aggregate Class Certificate Balance of the Senior Certificates of

the CB Crossed Groups immediately prior to such Distribution Date by the

aggregate Pool Stated Principal Balance of the CB Crossed Loan Groups with

respect to such Distribution Date.

 

            CB Crossed Loan Group Subordinate Percentage: As to any Distribution

Date, the aggregate Class Certificate Balance of the Class CB Certificates

divided by the aggregate Pool Stated Principal Balance for Loan Group 1 and Loan

Group 2.

 

            Certificate: Any of the Banc of America Funding Corporation Mortgage

Pass-Through Certificates, Series 2005-B that are issued pursuant to this

Agreement.

 

            Certificate Balance: With respect to any Certificate (other than the

Class 3-CE and Class 3-P Certificates) at any date, the maximum dollar amount of

principal to which the Holder thereof is then entitled hereunder, such amount

being equal to the product of the Percentage Interest of such Certificate and

the Class Certificate Balance of the Class of Certificates of which such

Certificate is a part. The Class 3-CE and Class 3-P Certificates have no

Certificate Balance.

 

            Certificate Custodian: Initially, Wells Fargo Bank, N.A.; thereafter

any other Certificate Custodian acceptable to the Depository and selected by the

Trustee.

 

            Certificate Owner: With respect to a Book-Entry Certificate, the

Person who is the beneficial owner of a Book-Entry Certificate. With respect to

any Definitive Certificate, the Certificateholder of such Certificate.

 

            Certificate Register: The register maintained pursuant to Section

6.02.

 

            Certificate Registrar: The registrar appointed pursuant to Section

6.02.

 

            Certificateholder: The Person in whose name a Certificate is

registered in the Certificate Register, except that, solely for the purpose of

giving any consent pursuant to this Agreement, any Certificate registered in the

name of the Depositor or the Servicers or any affiliate thereof shall be deemed

not to be outstanding and the Percentage Interest and Voting Rights evidenced

thereby shall not be taken into account in determining whether the requisite

amount of Percentage Interests or Voting Rights, as the case may be, necessary

to effect any such consent has been obtained, unless such entity is the

registered owner of the entire Class of Certificates, provided that the Trustee

shall not be responsible for knowing that any Certificate is registered in the

name of an affiliate of the Depositor or the Servicers unless one of its

Responsible Officers has actual knowledge thereof.

 

             Certification: As defined in Section 3.23.

 

            Class: As to the Certificates, the Class 1-A-1, Class 1-A-R, Class

2-A-1, Class 3-A-1, Class 3-A-1A, Class 3-A-1B, Class 3-A-2, Class 3-A-2A, Class

3-A-2B, Class 3-A-3, Class 3-CE, Class 3-P, Class 3-M-1, Class 3-M-2, Class

3-B-1, Class 3-B-2, Class 3-B-3, Class CB-1, Class CB-2, Class CB-3, Class CB-4,

Class CB-5 and Class CB-6 Certificates, as the case may be.

 

            Class 3-A Certificates: The Class 3-A-1, Class 3-A-1A, Class 3-A-1B,

Class 3-A-2, Class 3-A-2A, Class 3-A-2B and Class 3-A-3 Certificates.

 

            Class 3-A-3 Realized Loss Amortization Amount: As to the Components

and as of any Distribution Date, the lesser of (x) the Unpaid Realized Loss

Amount for the Components as of such Distribution Date and (y) the excess of (i)

the Monthly Excess Cashflow Amount over (ii) the sum of the amounts described in

Section 5.03(c)(i) through (iii) hereof, in each case for such Distribution

Date.

 

            Class 3-A-3A Applied Realized Loss Amount: With respect to any

Distribution Date on and after the Class Certificate Balance of the Class 3-M-1

Certificates has been reduced to zero, and after the Applied Realized Loss

Amount has been allocated pursuant to the first paragraph of Section 5.05, the

excess, if any, of (a) the sum of the aggregate Class Certificate Balance of the

Class 3-A-1, Class 3-A-1A and Class 3-A-1B Certificates and the Component

Balance of the Class 3-A-3A Component (after taking into account the

distribution of the Group 3 Principal Distribution Amount on such Distribution

Date and any increase in the Component Balance of the Class 3-A-3A Component as

a result of Recoveries) over (b) the aggregate Stated Principal Balance of the

Subgroup 3A Mortgage Loans as of the Due Date in the month of such Distribution

Date.

 

            Class 3-A-3B Applied Realized Loss Amount: With respect to any

Distribution Date on and after the Class Certificate Balance of the Class 3-M-1

Certificates has been reduced to zero, and after the Applied Realized Loss

Amount has been allocated pursuant to the first paragraph of Section 5.05, the

excess, if any, of (a) the sum of the aggregate Class Certificate Balance of the

Class 3-A-2, Class 3-A-2A and Class 3-A-2B Certificates and the Component

Balance of the Class 3-A-3B Component (after taking into account the

distribution of the Group 3 Principal Distribution Amount on such Distribution

Date and any increase in the Component Balance of the Class 3-A-3B Component as

a result of Recoveries) over (b) the aggregate Stated Principal Balance of the

Subgroup 3B Mortgage Loans as of the Due Date in the month of such Distribution

Date.

 

            Class 3-B Certificates: The Class 3-B-1, Class 3-B-2 and Class 3-B-3

Certificates.

 

            Class 3-B-1 Principal Distribution Amount: As of any Distribution

Date on or after the Stepdown Date and as long as a Trigger Event is not in

effect, the excess of (x) the sum of (i) the aggregate Class Certificate Balance

of the Class 3-A Certificates (after taking into account the payment of the

Group 3 Senior Principal Distribution Amount on such Distribution Date), (ii)

the Class Certificate Balance of the Class 3-M-1 Certificates (after taking into

account the payment of the Class 3-M-1 Principal Distribution Amount on such

Distribution Date), (iii) the Class Certificate Balance of the Class 3-M-2

Certificates (after taking into account the payment of the Class 3-M-2 Principal

Distribution Amount on such Distribution Date), and (iv) the Class Certificate

Balance of the Class 3-B-1 Certificates immediately prior to such Distribution

Date over (y) the lesser of (A) the product of (i) 96.20% and (ii) the aggregate

Stated Principal Balance of the Group 3 Mortgage Loans as of the Due Date in the

month of such Distribution Date and (B) the amount by which the aggregate Stated

Principal Balance of the Group 3 Mortgage Loans as of the Due Date in the month

of such Distribution Date exceeds the product of (i) 0.50% and (ii) the Cut-off

Date Pool Principal Balance for Loan Group 3.

 

            Class 3-B-1 Realized Loss Amortization Amount: As to the Class 3-B-1

Certificates and as of any Distribution Date, the lesser of (x) the Unpaid

Realized Loss Amount for the Class 3-B-1 Certificates as of such Distribution

Date and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the

sum of the amounts described in Section 5.03(c)(i) through (xi) hereof, in each

case for such Distribution Date.

 

            Class 3-B-2 Principal Distribution Amount: As of any Distribution

Date on or after the Stepdown Date and as long as a Trigger Event is not in

effect, the excess of (x) the sum of (i) the aggregate Class Certificate Balance

of the Class 3-A Certificates (after taking into account the payment of the

Group 3 Senior Principal Distribution Amount on such Distribution Date), (ii)

the Class Certificate Balance of the Class 3-M-1 Certificates (after taking into

account the payment of the Class 3-M-1 Principal Distribution Amount on such

Distribution Date), (iii) the Class Certificate Balance of the Class 3-M-2

Certificates (after taking into account the payment of the Class 3-M-2 Principal

Distribution Amount on such Distribution Date), (iv) the Class Certificate

Balance of the Class 3-B-1 Certificates (after taking into account the payment

of the Class 3-B-1 Principal Distribution Amount on such Distribution Date), and

(v) the Class Certificate Balance of the Class 3-B-2 Certificates immediately

prior to such Distribution Date over (y) the lesser of (A) the product of (i)

97.20% and (ii) the aggregate Stated Principal Balance of the Group 3 Mortgage

Loans as of the Due Date in the month of such Distribution Date and (B) the

amount by which the aggregate Stated Principal Balance of the Group 3 Mortgage

Loans as of the Due Date in the month of such Distribution Date exceeds the

product of (i) 0.50% and (ii) the Cut-off Date Pool Principal Balance for Loan

Group 3.

 

            Class 3-B-2 Realized Loss Amortization Amount: As to the Class 3-B-2

Certificates and as of any Distribution Date, the lesser of (x) the Unpaid

Realized Loss Amount for the Class 3-B-2 Certificates as of such Distribution

Date and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the

sum of the amounts described in Section 5.03(c)(i) through (xiv) hereof, in each

case for such Distribution Date.

 

            Class 3-B-3 Principal Distribution Amount: As of any Distribution

Date on or after the Stepdown Date and as long as a Trigger Event is not in

effect, the excess of (x) the sum of (i) the aggregate Class Certificate Balance

of the Class 3-A Certificates (after taking into account the payment of the

Group 3 Senior Principal Distribution Amount on such Distribution Date), (ii)

the Class Certificate Balance of the Class 3-M-1 Certificates (after taking into

account the payment of the Class 3-M-1 Principal Distribution Amount on such

Distribution Date), (iii) the Class Certificate Balance of the Class 3-M-2

Certificates (after taking into account the payment of the Class 3-M-2 Principal

Distribution Amount on such Distribution Date), (iv) the Class Certificate

Balance of the Class 3-B-1 Certificates (after taking into account the payment

of the Class 3-B-1 Principal Distribution Amount on such Distribution Date), (v)

the Class Certificate Balance of the Class 3-B-2 Certificates (after taking into

account the payment of the Class 3-B-2 Principal Distribution Amount on such

Distribution Date) and (vi) the Class Certificate Balance of the Class 3-B-3

Certificates immediately prior to such Distribution Date over (y) the lesser of

(A) the product of (i) 98.60% and (ii) the aggregate Stated Principal Balance of

the Group 3 Mortgage Loans as of the Due Date in the month of such Distribution

Date and (B) the amount by which the aggregate Stated Principal Balance of the

Group 3 Mortgage Loans as of the Due Date in the month of such Distribution Date

exceeds the product of (i) 0.50% and (ii) the Cut-off Date Pool Principal

Balance for Loan Group 3.

 

            Class 3-B-3 Realized Loss Amortization Amount: As to the Class 3-B-3

Certificates and as of any Distribution Date, the lesser of (x) the Unpaid

Realized Loss Amount for the Class 3-B-3 Certificates as of such Distribution

Date and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the

sum of the amounts described in Section 5.03(c)(i) through (xvii) hereof, in

each case for such Distribution Date.

 

            Class 3-CE Distributable Amount: With respect to any Distribution

Date, the sum of (i) the interest accrued on such Class 3-CE Certificate at its

Pass-Through Rate calculated on its Notional Amount less the amount (without

duplication) of Cap Carryover Amounts paid pursuant to Section 5.03(c)(xix),

(ii) any remaining Overcollateralization Release Amounts, (iii) the aggregate of

amounts remaining in the Reserve Account after the distributions in Section

3.09(f)(i)(A).

 

            Class 3-CE Uncertificated Principal Balance: As of any date of

determination, the Initial Overcollateralization Amount minus the sum of (i) any

Realized Losses allocated thereto and (ii) any amounts distributed (or deemed

distributed) to the Class 3-CE Certificates with respect thereto.

 

            Class 3-M-1 Principal Distribution Amount: As of any Distribution

Date on or after the Stepdown Date and as long as a Trigger Event is not in

effect, the excess of (x) the sum of (i) the aggregate Class Certificate Balance

of the Class 3-A Certificates (after taking into account the payment of the

Group 3 Senior Principal Distribution Amount on such Distribution Date) and (ii)

the Class Certificate Balance of the Class 3-M-1 Certificates immediately prior

to such Distribution Date over (y) the lesser of (A) the product of (i) 88.10%

and (ii) the aggregate Stated Principal Balance of the Group 3 Mortgage Loans as

of the Due Date in the month of such Distribution Date and (B) the amount by

which the aggregate Stated Principal Balance of the Group 3 Mortgage Loans as of

the Due Date in the month of such Distribution Date exceeds the product of (i)

0.50% and (ii) the Cut-off Date Pool Principal Balance for Loan Group 3.

 

            Class 3-M-1 Realized Loss Amortization Amount: As to the Class 3-M-1

Certificates and as of any Distribution Date, the lesser of (x) the Unpaid

Realized Loss Amount for the Class 3-M-1 Certificates as of such Distribution

Date and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the

sum of the amounts described in Section 5.03(c)(i) through (v) hereof, in each

case for such Distribution Date.

 

            Class 3-M-2 Principal Distribution Amount: As of any Distribution

Date on or after the Stepdown Date and as long as a Trigger Event is not in

effect, the excess of (x) the sum of (i) the aggregate Class Certificate Balance

of the Class 3-A Certificates (after taking into account the payment of the

Group 3 Senior Principal Distribution Amount on such Distribution Date), (ii)

the Class Certificate Balance of the Class 3-M-1 Certificates (after taking into

account the payment of the Class 3-M-1 Principal Distribution Amount on such

Distribution Date) and (iii) the Class Certificate Balance of the Class 3-M-2

Certificates immediately prior to such Distribution Date over (y) the lesser of

(A) the product of (i) 92.90% and (ii) the aggregate Stated Principal Balance of

the Group 3 Mortgage Loans as of the Due Date in the month of such Distribution

Date and (B) the amount by which the aggregate Stated Principal Balance of the

Group 3 Mortgage Loans as of the Due Date in the month of such Distribution Date

exceeds the product of (i) 0.50% and (ii) the Cut-off Date Pool Principal

Balance for Loan Group 3.

 

            Class 3-M-2 Realized Loss Amortization Amount: As to the Class 3-M-2

Certificates and as of any Distribution Date, the lesser of (x) the Unpaid

Realized Loss Amount for the Class 3-M-2 Certificates as of such Distribution

Date and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the

sum of the amounts described in Section 5.03(c)(i) through (viii) hereof, in

each case for such Distribution Date.

 

            Class A Certificates: The Class 1-A-1, Class 1-A-R, Class 2-A-1,

Class 3-A-1, Class 3-A-1A, Class 3-A-1B, Class 3-A-2, Class 3-A-2A, Class 3-A-2B

and Class 3-A-3 Certificates.

 

            Class B Certificates: The Class CB Certificates and the Class 3-B

Certificates.

 

            Class CB Certificates: The Class CB-1, Class CB-2, Class CB-3, Class

CB-4, Class CB-5 and Class CB-6 Certificates.

 

            Class CB Subordinate Balance Ratio: As of any date of determination,

the ratio between the principal balances of the Class 1-LS Interest and the

Class 2-LS Interest, equal to the ratio among the Group Subordinate Amount of

Loan Group 1 and the Group Subordinate Amount of Loan Group 2.

 

            Class Certificate Balance: Class Certificate Balance means, with

respect to (i) any Class of Shifting Interest Certificates and any date of

determination, and subject to Section 5.04(e), the Initial Class Certificate

Balance of such Class minus (A) the sum of (i) all distributions of principal

made with respect thereto and (ii) all reductions in Class Certificate Balance

previously allocated thereto pursuant to Section 5.04(a) plus (B) all increases

in Class Certificate Balance previously allocated thereto pursuant to Section

5.04(a) and (ii) any Class of Offered Group 3 Certificates (other than the Class

3-A-3 Certificates) and any Distribution Date, and subject to Section 5.03(f),

the Initial Class Certificate Balance of such Class (a) reduced by the sum of

(i) all amounts actually distributed in respect of principal of such Class on

all prior Distribution Dates and (ii) Applied Realized Loss Amounts allocated

thereto for previous Distribution Dates pursuant to Section 5.05 and (b)

increased by any Recoveries allocated to such Class for previous Distribution

Dates. The Class Certificate Balance of the Class 3-A-3 Certificates will equal

the sum of the Component Balances of the Components. The Class 3-CE and Class

3-P Certificates do not have a Class Certificate Balance.

 

            Class Interest Shortfall: For any Distribution Date and each

interest-bearing Class of Shifting Interest Certificates, the amount by which

Accrued Certificate Interest for such Class (as reduced pursuant to Section

5.02(c)) exceeds the amount of interest actually distributed on such Class on

such Distribution Date pursuant to clause (i) of the definition of "Interest

Distribution Amount."

 

            Class M Certificates: The Class 3-M-1 Certificates and the Class

3-M-2 Certificates.

 

            Class M Certificateholders: Collectively, the Holders of the Class M

Certificates.

 

            Class Unpaid Interest Shortfall: As to any Distribution Date and

each interest-bearing Class of Shifting Interest Certificates, the amount by

which the aggregate Class Interest Shortfalls for such Class on prior

Distribution Dates exceeds the amount of interest actually distributed on such

Class on such prior Distribution Dates pursuant to clause (ii) of the definition

of "Interest Distribution Amount."

 

            Closing Date: March 30, 2005.

 

            Code: The Internal Revenue Code of 1986, as amended.

 

            Compensating Interest: As defined in Section 3.18.

 

            Component Balance: With respect to any Component and any date of

determination, the Initial Component Balance of such Component (a) reduced by

the sum of (i) all amounts actually distributed in respect of principal of such

Component on all prior Distribution Dates and (ii) Class 3-A-3A Applied Realized

Loss Amounts, Class 3-A-3B Applied Realized Loss Amount or Applied Realized Loss

Amounts allocated thereto, as the case may be, for previous Distribution Dates

pursuant to Section 5.05 and (b) increased by any Recoveries allocated to such

Component for previous Distribution Dates.

 

            Conversion Date: The date on which a Mortgage Loan becomes a

Converted Mortgage Loan.

 

            Converted Mortgage Loan: Any Mortgage Loan as to which the related

Mortgagor has exercised its option pursuant to the related Mortgage Note to

convert the adjustable rate of interest on such Mortgage Loan to a fixed rate of

interest.

 

            Co-op Shares: Shares issued by private non-profit housing

corporations.

 

            Corporate Trust Office: The principal corporate trust office of the

Trustee at which at any particular time its corporate trust business with

respect to this Agreement is conducted, which office at the date of the

execution of this instrument is located at 9062 Old Annapolis Road, Columbia,

Maryland 21045-1951, Attention: Corporate Trust Services - BAFC 2005-B, and for

certificate transfer purposes is located at Sixth Street and Marquette Avenue,

Minneapolis, Minnesota 55479, Attention: Corporate Trust Services - BAFC 2005-B,

or at such other address as the Trustee may designate from time to time by

notice to the Certificateholders, the Depositor, the NIMS Insurer and the

Servicers.

 

            Corresponding Classes or Components: With respect to the Group 3

Lower-Tier REMIC and the Group 3 Upper-Tier REMIC, the following Classes or

Components shall be Corresponding Classes or Components:

 

Corresponding Group 3             Corresponding Group 3 Upper-Tier

Lower-Tier Interests                   Classes or Components

---------------------             --------------------------------

        LT1A1                        Class 3-A-1 Certificates

        LT1A1A                       Class 3-A-1A Certificates

        LT1A1B                       Class 3-A-1B Certificates

        LT1A2                        Class 3-A-2 Certificates

        LT1A2A                       Class 3-A-2A Certificates

        LT1A2B                       Class 3-A-2B Certificates

        LT1A3A                       Class 3-A-3A Component

        LT1A3B                       Class 3-A-3B Component

        LT1M1                        Class 3-M-1 Certificates

        LT1M2                        Class 3-M-2 Certificates

        LT1B1                        Class 3-B-1 Certificates

        LT1B2                        Class 3-B-2 Certificates

        LT1B3                        Class 3-B-3 Certificates

 

            Custodial Agreement: Initially, the Custodial Agreement, dated March

30, 2005, by and among the Depositor, the Servicers, Trustee and the Custodian

and thereafter any custodial agreement entered into pursuant to Section 9.12.

 

            Custodian: Initially, Wachovia Bank, National Association, as

custodian under the Custodial Agreement, and thereafter the Custodian, if any,

hereafter appointed by the Trustee pursuant to Section 9.12. The Custodian may

(but need not) be the Trustee or any Person directly or indirectly controlling

or controlled by or under common control of the Trustee. None of the Depositor,

any Servicer nor any Person directly or indirectly controlling or controlled by

or under common control with any such Person may be appointed Custodian.

 

             Customary Servicing Procedures: With respect to each Servicer,

procedures (including collection procedures) that such Servicer customarily

employs and exercises in servicing and administering mortgage loans for its own

account and which are in accordance with accepted mortgage servicing practices

of prudent lending institutions servicing mortgage loans of the same type as the

Mortgage Loans in the jurisdictions in which the related Mortgaged Properties

are located.

 

            Cut-off Date: March 1, 2005.

 

            Cut-off Date Pool Principal Balance: For each Loan Group or Loan

Subgroup, the aggregate of the Cut-off Date Principal Balances of the Mortgage

Loans in such Loan Group or Loan Subgroup which is $103,240,084.16 for Loan

Group 1, $128,954,896.89 for Loan Group 2, $774,939,272.86 for Loan Group 3,

$522,458,685.42 for Loan Subgroup 3A and $252,480,587.44 for Loan Subgroup 3B.

 

            Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid

principal balance thereof as of the close of business on the Cut-off Date,

reduced by all installments of principal due on or prior thereto whether or not

paid.

 

            Debt Service Reduction: As to any Mortgage Loan and any

Determination Date, the excess of (i) the Monthly Payment due on the related Due

Date under the terms of such Mortgage Loan over (ii) the amount of the monthly

payment of principal and/or interest required to be paid with respect to such

Due Date by the Mortgagor as established by a court of competent jurisdiction

(pursuant to an order which has become final and nonappealable) as a result of a

proceeding initiated by or against the related Mortgagor under the Bankruptcy

Code, as amended from time to time (11 U.S.C.); provided that no such excess

shall be considered a Debt Service Reduction so long as (a) the related Servicer

is pursuing an appeal of the court order giving rise to any such modification

and (b)(1) such Mortgage Loan is not in default with respect to payment due

thereunder in accordance with the terms of such Mortgage Loan as in effect on

the Cut-off Date or (2) Monthly Payments are being advanced by the related

Servicer in accordance with the terms of such Mortgage Loan as in effect on the

Cut-off Date.

 

            Debt Service Reduction Mortgage Loan: Any Mortgage Loan that became

the subject of a Debt Service Reduction.

 

            Defective Mortgage Loan: Any Mortgage Loan which is required to be

cured, repurchased or substituted for pursuant to Section 2.02.

 

            Deficient Valuation: As to any Mortgage Loan and any Determination

Date, the excess of (i) the then outstanding indebtedness under such Mortgage

Loan over (ii) the secured valuation thereof established by a court of competent

jurisdiction (pursuant to an order which has become final and nonappealable) as

a result of a proceeding initiated by or against the related Mortgagor under the

Bankruptcy Code, as amended from time to time (11 U.S.C.), pursuant to which

such Mortgagor retained such Mortgaged Property; provided that no such excess

shall be considered a Deficient Valuation so long as (a) the related Servicer is

pursuing an appeal of the court order giving rise to any such modification and

(b)(1) such Mortgage Loan is not in default with respect to payments due

thereunder in accordance with the terms of such Mortgage Loan as in effect on

the Cut-off Date or (2) Monthly Payments are being advanced by the related

Servicer in accordance with the terms of such Mortgage Loan as in effect on the

Cut-off Date.

 

            Deficient Valuation Mortgage Loan: Any Mortgage Loan that became the

subject of a Deficient Valuation.

 

            Definitive Certificates: As defined in Section 6.02(c)(iii).

 

            Depositor: Banc of America Funding Corporation, a Delaware

corporation, or its successor in interest, as depositor of the Trust Estate.

 

            Depository: The Depository Trust Company, the nominee of which is

Cede & Co., as the registered Holder of the Book-Entry Certificates or any

successor thereto appointed in accordance with this Agreement. The Depository

shall at all times be a "clearing corporation" as defined in Section 8-102(3) of

the Uniform Commercial Code of the State of New York.

 

            Depository Participant: A broker, dealer, bank or other financial

institution or other Person for whom from time to time a Depository effects

book-entry transfers and pledges of securities deposited with the Depository.

 

            Determination Date: As to any Distribution Date, the 15th day of the

month of the related Distribution Date or, if such 15th day is not a Business

Day, the Business Day immediately preceding such day.

 

            Distribution Account: The Eligible Account created and maintained by

the Trustee pursuant to Section 3.09(b) in the name of the Trustee for the

benefit of the Certificateholders and designated "Wells Fargo Bank, N.A., as

Trustee, in trust for registered holders of Banc of America Funding Corporation

Mortgage Pass-Through Certificates, Series 2005-B." The Distribution Account

shall be deemed to consist of five sub-accounts: one for each Loan Group

(designated as Sub-Account 1, Sub-Account 2 and Sub-Account 3) and two

sub-accounts referred to herein as the Upper-Tier Certificate Sub-Account and

the Group 3 Upper-Tier Certificate Sub-Account, respectively. Funds in the

Distribution Account shall be held in trust for the Holders of the Certificates

for the uses and purposes set forth in this Agreement.

 

            Distribution Date: The 20th day of each month beginning in April

2005 (or, if such day is not a Business Day, the next Business Day).

 

            Due Date: As to any Distribution Date and each Mortgage Loan, the

first day in the calendar month of such Distribution Date.

 

            Eligible Account: Any of (i) an account or accounts maintained with

a federal or state chartered depository institution or trust company the

short-term unsecured debt obligations of which (or, in the case of a depository

institution or trust company that is the principal subsidiary of a holding

company, the debt obligations of such holding company) have the highest

short-term ratings of each Rating Agency at the time any amounts are held on

deposit therein, or (ii) an account or accounts in a depository institution or

trust company in which such accounts are insured by the FDIC (to the limits

established by the FDIC) and the uninsured deposits in which accounts are

otherwise secured such that, as evidenced by an Opinion of Counsel delivered to

the Trustee, the NIMS Insurer and to each Rating Agency, the Certificateholders

have a claim with respect to the funds in such account or a perfected first

priority 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 or trust company in

which such account is maintained, or (iii) a trust account or accounts

maintained with the trust department of a federal or state chartered depository

institution or trust company (including the Trustee), acting in its fiduciary

capacity or (iv) any other account acceptable to each Rating Agency. Eligible

Accounts may bear interest and may include, if otherwise qualified under this

definition, accounts maintained with the Trustee.

 

            ERISA: The Employee Retirement Income Security Act of 1974, as

amended.

 

            ERISA Restricted Certificates: Any of the Class CB-4, Class CB-5,

Class CB-6, Class 3-A-3, Class 3-M-1, Class 3-M-2, Class 3-B-1, Class 3-B-2,

Class 3-B-3, Class 3-CE and Class 3-P Certificates.

 

            Escrow Account: As defined in Section 3.10.

 

            Escrow Payments: The amounts constituting taxes, assessments,

Primary Mortgage Insurance Policy premiums, fire and hazard insurance premiums

and other payments as may be required to be escrowed by the Mortgagor with the

mortgagee pursuant to the terms of any Mortgage Note or Mortgage.

 

            Event of Default: As defined in Section 8.01.

 

            Excess Proceeds: With respect to any Liquidated Mortgage Loan, the

amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage

Loan received in the calendar month in which such Mortgage Loan became a

Liquidated Mortgage Loan, net of any amounts previously reimbursed to the

related Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan

pursuant to Section 3.12(a)(iii), exceeds (i) the unpaid principal balance of

such Liquidated Mortgage Loan as of the Due Date in the month in which such

Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at

the Mortgage Interest Rate from the Due Date as to which interest was last paid

or for which a Periodic Advance was made (and not reimbursed) up to the Due Date

applicable to the Distribution Date immediately following the calendar month

during which such liquidation occurred.

 

            Extra Principal Distribution Amount: As of any Distribution Date,

the lesser of (x) the Monthly Excess Interest Amount for such Distribution Date

and (y) the Overcollateralization Deficiency for such Distribution Date.

 

            FDIC: The Federal Deposit Insurance Corporation, or any successor

thereto.

 

            FHLMC: The Federal Home Loan Mortgage Corporation, or any successor

thereto.

 

            Final Distribution Date: The Distribution Date on which the final

distribution in respect of the Certificates will be made pursuant to Section

10.01.

 

            Financial Market Service: Bloomberg Financial Service and any other

financial information provider designated by the Depositor by written notice to

the Trustee.

 

            FIRREA: The Financial Institutions Reform, Recovery and Enforcement

Act of 1989, as amended.

 

            FNMA: Fannie Mae, or any successor thereto.

 

            Form 10-K: As defined in Section 3.23(a).

 

             Fractional Interest: As defined in Section 5.02(d).

 

            Grantor Trust: That portion of the Trust exclusive of the REMICs

consisting of (a) the Prepayment Premiums and the right of the Class 3-P

Certificateholders to receive such Prepayment Premiums, (a) the right of the

Offered Group 3 Certificates to receive Cap Carryover Amounts, (b) each Yield

Maintenance Agreement, the Reserve Account and the beneficial interest of the

Class 3-CE Certificates with respect thereto and (c) the obligation of the Class

3-CE Certificates to pay Cap Carryover Amounts.

 

            GreenPoint: GreenPoint Mortgage Funding, Inc., a New York

corporation, or its successor in interest, in its capacity as Servicer of the

GreenPoint Mortgage Loans, or any successor servicer for such Mortgage Loans

appointed as herein provided.

 

            GreenPoint Custodial Account: The separate Eligible Account or

Accounts created and maintained by GreenPoint pursuant to Section 3.09(a).

 

            GreenPoint Mortgage Loans: The Mortgage Loans serviced by GreenPoint

and identified as such on Exhibit D-1, Exhibit D-2, Exhibit D-3, Exhibit D-4 and

Exhibit D-5 of the Mortgage Loan Schedule.

 

            GreenPoint Servicing Agreement: The Flow Sale and Servicing

Agreement, dated as of September 1, 2004, by and between Bank of America,

National Association and GreenPoint Mortgage Funding, Inc., as amended by that

certain Amendment No. 1, dated as of October 1, 2004, by and between Bank of

America, National Association and GreenPoint Mortgage Funding, Inc.

 

            Gross Margin: As to each Mortgage Loan, the fixed percentage set

forth in the related Mortgage Note and indicated in the Mortgage Loan Schedule

as the "Gross Margin," which percentage is added to the Index on each Rate

Adjustment Date to determine (subject to rounding, the Periodic Cap and the Rate

Ceiling) the Mortgage Interest Rate on such Mortgage Loan until the next Rate

Adjustment Date.

 

            Group: Any of Group 1, Group 2 or Group 3.

 

            Group 1: The Group 1 Senior Certificates.

 

            Group 1 Lower-Tier Rate: For each Distribution Date, a per annum

rate equal to the Net WAC for the Group 1 Mortgage Loans.

 

            Group 1 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-1

hereto.

 

            Group 1 Senior Certificates: Class 1-A-1 and Class 1-A-R

Certificates.

 

            Group 2: The Group 2 Senior Certificates.

 

            Group 2 Lower-Tier Rate: For each Distribution Date, a per annum

rate equal to the Net WAC for the Group 2 Mortgage Loans.

 

            Group 2 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-2

hereto.

 

            Group 2 Senior Certificates: Class 2-A-1 Certificates.

 

            Group 3: The Group 3 Senior Certificates, the Class M Certificates

and the Class 3-B Certificates.

 

            Group 3 Cap: As of any Distribution Date and the Class M and Class

3-B Certificates, a per annum rate equal to the lesser of (i) 11.00% and (ii) a

per annum rate (subject to adjustment based on the actual number of days elapsed

in the related Interest Accrual Period) equal to the weighted average of the

Subgroup 3A Cap and the Subgroup 3B Cap (each calculated without regard to

clause (i) of the definitions thereof), weighted on the basis of the related

Subgroup Subordinate Amount.

 

            Group 3 Certificates: The Group 3 Senior Certificates, the Class M

Certificates, the Class 3-B Certificates, the Class 3-CE Certificates and the

Class 3-P Certificates.

 

            Group 3 Interest Remittance Amount: As of any Distribution Date, the

sum of the Subgroup 3A Interest Remittance Amount and the Subgroup 3B Interest

Remittance Amount for such Distribution Date.

 

            Group 3 Lower-Tier Distribution Amount: As defined in Section

5.11(b).

 

            Group 3 Lower-Tier Rate: With respect to Regular Interest LT1AA,

Regular Interest LT1A1, Regular Interest LT1A1A, Regular Interest LT1A1B,

Regular Interest LT1A2, Regular Interest LT1A2A, Regular Interest LT1A2B,

Regular Interest LT1A3A, Regular Interest LT1A3B, Regular Interest LT1M1,

Regular Interest LT1M2, Regular Interest LT1B1, Regular Interest LT1B2, Regular

Interest LT1B3, Regular Interest LT1ZZ, Regular Interest LT1SUB, Regular

Interest LT2SUB and Regular Interest LT1XX, the Net WAC of the Group 3 Mortgage

Loans. With respect to Regular Interest LT1GRP, the Subgroup 3A Cap. With

respect Regular Interest LT2GRP, the Subgroup 3B Cap.

 

            Group 3 Lower-Tier REMIC: As defined in the Preliminary Statement,

the segregated asset pool, the assets of which consist of the Group 3 Mortgage

Loans, such amounts as shall from time to time be held in respect of the Group 3

Mortgage Loans in the Distribution Account (other than amounts held in respect

of the Group 3 Upper-Tier Certificate Sub-Account), the insurance policies, if

any, relating to a Group 3 Mortgage Loan and the Mortgaged Property that secured

a Group 3 Mortgage Loan and that has been acquired by foreclosure or deed in

lieu of foreclosure.

 

            Group 3 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-3

hereto.

 

            Group 3 Principal Distribution Amount: As to any Distribution Date,

the sum of (i) the Group 3 Principal Remittance Amount minus the

Overcollateralization Release Amount, if any, and (ii) the Extra Principal

Distribution Amount, if any.

 

            Group 3 Principal Remittance Amount: With respect to any

Distribution Date and Group 3 Mortgage Loans, to the extent of funds available

therefor, the sum (less amounts available for reimbursement to the Servicers of

Advances and expenses pursuant to this Agreement and amounts reimbursable or

payable to the Trustee pursuant to this Agreement) of: (i) each payment of

principal on a Mortgage Loan due on the Due Date in the month of such

Distribution Date and received by the Servicers on or prior to the related

Determination Date, and any Advances with respect thereto (or in the case of any

Monthly Covered Amount, the related Remittance Date), (ii) all Principal

Prepayments (other than Total Covered Amounts) received by the applicable

Servicer during the prior calendar month and all Total Covered Amounts received

and deposited in the Servicer Custodial Accounts by the related Remittance Date,

(iii) Insurance Proceeds, net Liquidation Proceeds and Recoveries allocable to

principal actually collected by the applicable Servicer during the prior

calendar month, (iv) with respect to Defective Mortgage Loans repurchased with

respect to the prior calendar month, the portion of the Repurchase Price

allocable to principal, (v) any Substitution Adjustment Amounts paid during the

prior calendar month and (vi) on the Distribution Date on which the Group 3

Mortgage Loans and related REO Property are sold at auction in accordance with

Section 10.01 hereof, that portion of the Termination Price in respect of

principal.

 

            Group 3 Senior Certificates: Class 3-A-1, Class 3-A-1A, Class

3-A-1B, Class 3-A-2, Class 3-A-2A, Class 3-A-2B and Class 3-A-3 Certificates.

 

            Group 3 Senior Principal Distribution Amount: With respect to any

Distribution Date, (i) before the Stepdown Date or as to which a Trigger Event

is in effect, the lesser of (a) the aggregate Class Certificate Balance of the

Class 3-A Certificates immediately prior to such Distribution Date and (b) the

Group 3 Principal Distribution Amount and (ii) on or after the Stepdown Date and

as long as a Trigger Event is not in effect, the excess of (a) the aggregate

Class Certificate Balance of the Class 3-A Certificates immediately prior to

such Distribution Date over (b) the lesser of (x) the product of (i) 82.50% and

(ii) the aggregate Stated Principal Balance of the Group 3 Mortgage Loans as of

the Due Date in the month of such Distribution Date and (y) the amount by which

the aggregate Stated Principal Balance of the Group 3 Mortgage Loans as of the

Due Date in the month of such Distribution Date exceeds the product of (i) 0.50%

and (ii) the Cut-off Date Pool Principal Balance for Loan Group 3.

 

            Group 3 Subordinate Balance Ratio: As of any date of determination,

the ratio between the Uncertificated Principal Balances of Regular Interest

LT1SUB and Regular Interest LT2SUB, equal to the ratio between the Subgroup

Subordinate Amount for Loan Subgroup 3A and the Subgroup Subordinate Amount for

Loan Subgroup 3B.

 

            Group 3 Upper-Tier Certificate Sub-Account: The sub-account of the

Distribution Account designated by the Trustee pursuant to Section 3.09(e).

 

            Group 3 Upper-Tier REMIC: As defined in the Preliminary Statement,

the segregated asset pool, the assets of which consist of the Group 3

Uncertificated Lower-Tier Interests and such amounts as shall from time to time

be deemed to be held in the Group 3 Upper-Tier Certificate Sub-Account.

 

            Group Subordinate Amount: With respect to any Distribution Date and

any Shifting Interest Loan Group, the excess of the Pool Stated Principal

Balance for such Loan Group over the aggregate Class Certificate Balance of the

Senior Certificates of the Related Group immediately prior to such date.

 

            Holder: A Certificateholder.

 

            Indenture: An indenture relating to the issuance of net interest

margin notes secured by the Class 3-CE Certificates and the Class 3-P

Certificates, which may or may not be guaranteed by the NIMS Insurer.

 

            Independent: When used with respect to any specified Person means

such a Person who (i) is in fact independent of the Depositor, the Trustee and

the Servicers, (ii) does not have any direct financial interest or any material

indirect financial interest in the Depositor, the Trustee or the Servicers or in

an affiliate of any of them, and (iii) is not connected with the Depositor, the

Trustee or the Servicers as an officer, employee, promoter, underwriter,

trustee, partner, director or person performing similar functions.

 

             Index: As to any Mortgage Loan and Rate Adjustment Date, any of the

One-Year LIBOR Index or the Six-Month LIBOR Index. The Index applicable to each

Mortgage Loan will be indicated on the Mortgage Loan Schedule. In the event that

any such Index is no longer available, the applicable Servicer will select a

substitute Index in accordance with the terms of the related Mortgage Note and

in compliance with federal and state law.

 

            Initial Class Certificate Balance: As to each Class of Certificates,

the Class Certificate Balance set forth in the Preliminary Statement.

 

            Initial Component Balance: As to each Component, the Component

Balance set forth in the Preliminary Statement.

 

            Initial Overcollateralization Amount: $5,425,272.86.

 

            Insurance Policy: With respect to any Mortgage Loan included in the

Trust Estate, any related insurance policy, including all riders and

endorsements thereto in effect, including any replacement policy or policies for

any Insurance Policies.

 

            Insurance Proceeds: Proceeds paid by an insurer pursuant to any

Insurance Policy, in each case other than any amount included in such Insurance

Proceeds in respect of Insured Expenses.

 

            Insured Expenses: Expenses covered by an Insurance Policy or any

other insurance policy with respect to the Mortgage Loans.

 

            Interest Accrual Period: As to any Distribution Date and each Class

of Shifting Interest Certificates, the period from and including the first day

of the previous calendar month to but not including the first day of the

calendar month of the current Distribution Date. As to each Distribution Date

and each Class of Offered Group 3 Certificates, the period from and including

the Distribution Date in the prior calendar month (or in the case of the first

Distribution Date, from the Closing Date) through and including the day prior to

the current Distribution Date. Interest on each Class of Shifting Interest

Certificates will be calculated on the basis of a 360-day year consisting of

twelve 30-day months. Interest on each Class of Offered Group 3 Certificates

will be calculated on the basis of the actual number of days in the related

Interest Accrual Period and a 360-day year.

 

            Interest Carry Forward Amount: For any Class of Offered Group 3

Certificates (other than the Class 3-A-3 Certificates) and the Components and

any Distribution Date, the sum of (a) the excess, if any, of the Accrued

Certificate Interest or Accrued Component Interest, as the case may be, and any

Interest Carry Forward Amount for the prior Distribution Date, over the amount

in respect of interest actually distributed on such Class or Component on such

prior Distribution Date and (b) interest on such excess at the applicable

Pass-Through Rate for the related Interest Accrual Period.

 

            Interest Distribution Amount: For any Distribution Date and each

Class of Shifting Interest Certificates, the sum of (i) the Accrued Certificate

Interest, subject to reduction pursuant to Section 5.02(c) and (ii) any Class

Unpaid Interest Shortfall for such Class.

 

            Interest Percentage: With respect to any Class of Offered Group 3

Certificates (other than the Class 3-A-3 Certificates) or any Component and any

Distribution Date, the ratio (expressed as a decimal carried to six places) of

the Accrued Certificate Interest for such Class or Accrued Component Interest

for such Component to the sum of the Accrued Certificate Interest for all

Classes and Accrued Component Interest for all Components, in each case with

respect to such Distribution Date, without regard to Relief Act Shortfalls.

 

            LIBOR Business Day: Any day on which banks in the London, England

and The City of New York are open and conducting transactions in foreign

currency and exchange.

 

            LIBOR Determination Date: With respect to the Offered Group 3

Certificates and each Interest Accrual Period (after the first Interest Accrual

Period), the second LIBOR Business Day prior to the day on which such Interest

Accrual Period commences.

 

            Liquidated Mortgage Loan: With respect to any Distribution Date, a

defaulted Mortgage Loan (including any REO Property) that was liquidated in the

calendar month preceding the month of such Distribution Date and as to which the

related Servicer has certified (in accordance with this Agreement) that it has

received all proceeds it expects to receive in connection with the liquidation

of such Mortgage Loan including the final disposition of an REO Property.

 

            Liquidation Proceeds: Amounts, including Insurance Proceeds,

received in connection with the partial or complete liquidation of defaulted

Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise or

amounts received in connection with any condemnation or partial release of a

Mortgaged Property and any other proceeds received in connection with an REO

Property, less the sum of related unreimbursed Servicing Fees and Advances.

 

            Loan Group: Any of Loan Group 1, Loan Group 2 or Loan Group 3.

 

            Loan Group 1: The Group 1 Mortgage Loans.

 

            Loan Group 2: The Group 2 Mortgage Loans.

 

            Loan Group 3: The Group 3 Mortgage Loans.

 

            Loan Subgroup: Any of Loan Subgroup 3A or Loan Subgroup 3B.

 

             Loan Subgroup 3A: The Subgroup 3A Mortgage Loans.

 

            Loan Subgroup 3B: The Subgroup 3B Mortgage Loans.

 

            Loan-to-Value Ratio: With respect to any Mortgage Loan and any date

of determination, the fraction, expressed as a percentage, the numerator of

which is the outstanding principal balance of the related Mortgage Loan at the

date of determination and the denominator of which is the Appraised Value of the

related Mortgaged Property.

 

            Lower-Tier Distribution Amount: As defined in Section 5.11(a).

 

            Lower-Tier REMIC: As defined in the Preliminary Statement, the

segregated asset pool, the assets of which consist of the Mortgage Loans (other

than the Group 3 Mortgage Loans), such amounts as shall from time to time be

held in the Distribution Account (other than amounts held in respect of the

Upper-Tier Certificate Sub-Account or any amounts held in respect of the Group 3

Mortgage Loans or in the Group 3 Upper-Tier Certificate Sub-Account), the

insurance policies, if any, relating to a Mortgage Loan and the Mortgaged

Property which secured a Mortgage Loan and which has been acquired by

foreclosure or deed in lieu of foreclosure.

 

            Marker Rate: With respect to the Class 3-CE Certificates and any

Distribution Date, a per annum rate equal to two (2) times the weighted average

of the applicable Group 3 Lower-Tier Rates for Regular Interest LT1A1, Regular

Interest LT1A1A, Regular Interest LT1A1B, Regular Interest LT1A2, Regular

Interest LT1A2A, Regular Interest LT1A2B, Regular Interest LT1A3A, Regular

Interest LT1A3B, Regular Interest LT1M1, Regular Interest LT1M2, Regular

Interest LT1B1, Regular Interest LT1B2, Regular Interest LT1B3 and Regular

Interest LT1ZZ, (i) with the rate on each such Uncertificated Group 3 Lower-Tier

Interest (other than Regular Interest LT1ZZ) subject to a cap equal to the

Pass-Through Rate of its Corresponding Class or Component (taking into account

in determining any such Pass-Through Rate the imposition of the applicable Cap

as described in footnote 3, 4, 7, 9 or 10 to the table in the Preliminary

Statement relating to the Certificates) for the purposes of this calculation and

(ii) with the rate on Regular Interest LT1ZZ subject to a cap of zero for the

purpose of this calculation; provided, however, that for this purpose,

calculations of the Group 3 Lower-Tier Rate and the related caps with respect to

each such Uncertificated Group 3 Regular Interest (other than Regular Interest

LT1ZZ) shall be multiplied by a fraction, the numerator of which is the actual

number of days in the Interest Accrual Period and the denominator of which is

30.

 

            Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount: With

respect to any Distribution Date, the excess of (a) accrued interest at the

Group 3 Lower-Tier Rate applicable to Regular Interest LT1ZZ for such

Distribution Date on a balance equal to the Uncertificated Principal Balance of

Regular Interest LT1ZZ minus the 3LT Overcollateralized Amount, in each case for

such Distribution Date, over (b) Uncertificated Accrued Interest on Regular

Interest LT1A1, Regular Interest LT1A1A, Regular Interest LT1A1B, Regular

Interest LT1A2, Regular Interest LT1A2A, Regular Interest LT1A2B, Regular

Interest LT1A3A, Regular Interest LT1A3B, Regular Interest LT1M1, Regular

Interest LT1M2, Regular Interest LT1B1, Regular Interest LT1B2 and Regular

Interest LT1B3, each subject to a cap equal to the Pass-Through Rate of the

related Corresponding Class for the purpose of this calculation; provided,

however, that for this purpose, calculations of the Group 3 Lower-Tier Rate and

the related caps with respect to Uncertificated Accrued Interest on Regular

Interest LT1A1, Regular Interest LT1A1A, Regular Interest LT1A1B, Regular

Interest LT1A2, Regular Interest LT1A2A, Regular Interest LT1A2B, Regular

Interest LT1A3A, Regular Interest LT1A3B, Regular Interest LT1M1, Regular

Interest LT1M2, Regular Interest LT1B1, Regular Interest LT1B2 and Regular

Interest LT1B3 shall be multiplied by a fraction, the numerator of which is the

actual number of days in the Interest Accrual Period and the denominator of

which is 30.

 

            MERS: As defined in Section 2.01(b)(iii).

 

            Monthly Covered Amount: As defined in the Mortgage Loan Purchase

Agreement.

 

             Monthly Excess Cashflow Amount: The sum of the Monthly Excess

Interest Amount, the Overcollateralization Release Amount and (without

duplication) any portion of the Group 3 Principal Distribution Amount remaining

after principal distributions on the Offered Group 3 Certificates.

 

            Monthly Excess Interest Amount: With respect to each Distribution

Date, the amount, if any, by which the Group 3 Interest Remittance Amount for

such Distribution Date exceeds the aggregate amount distributed on such

Distribution Date to the Group 3 Certificates pursuant to priorities first

through ninth under Section 5.03(a).

 

            Monthly Form 8-K: As defined in Section 3.23(a).

 

            Monthly Payment: The scheduled monthly payment on a Mortgage Loan

due on any Due Date allocable to principal and/or interest on such Mortgage Loan

which, unless otherwise specified herein, shall give effect to any related Debt

Service Reduction and any Deficient Valuation that affects the amount of the

monthly payment due on such Mortgage Loan or the Monthly Covered Amount

representing such scheduled monthly payment.

 

            Moody's: Moody's Investors Service, Inc., or any successor thereto.

 

            Mortgage: The mortgage, deed of trust or other instrument creating a

first lien on a Mortgaged Property securing a Mortgage Note or creating a first

lien on a leasehold interest.

 

            Mortgage File: The mortgage documents listed in Section 2.01

pertaining to a particular Mortgage Loan and any additional documents required

to be added to the Mortgage File pursuant to this Agreement.

 

            Mortgage Interest Rate: As to any Mortgage Loan, the per annum rate

of interest at which interest accrues on the principal balance of such Mortgage

Loan, as adjusted from time to time in accordance with the provisions of the

related Mortgage Note, which rate is (a) prior to the first Rate Adjustment Date

for each such Mortgage Loan, the initial Mortgage Interest Rate for such

Mortgage Loan indicated on the Mortgage Loan Schedule and (b) from and after

such Rate Adjustment Date, the sum of the applicable Index, as of the Rate

Adjustment Date applicable to such Due Date, and the Gross Margin, rounded as

set forth in such Mortgage Note, subject to the Periodic Cap and the Rate

Ceiling applicable to such Mortgage Loan at any time during the life of such

Mortgage Loan.

 

            Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase

Agreement, dated March 30, 2005, between Bank of America, National Association,

as seller, and the Depositor, as purchaser.

 

            Mortgage Loan Schedule: The list of Mortgage Loans (as from time to

time amended by the applicable Servicer to reflect the addition of Substitute

Mortgage Loans and the deletion of Defective Mortgage Loans pursuant to the

provisions of this Agreement) transferred to the Trustee as part of the Trust

Estate and from time to time subject to this Agreement, attached hereto as

Exhibit D-1, Exhibit D-2, Exhibit D-3, Exhibit D-4 and Exhibit D-5 setting forth

the following information with respect to each Mortgage Loan: (i) the Mortgage

Loan identifying number; (ii) a code indicating whether the Mortgaged Property

is owner-occupied; (iii) the property type for each Mortgaged Property; (iv) the

original months to maturity or the remaining months to maturity from the Cut-off

Date; (v) the Loan-to-Value Ratio at origination; (vi) the Mortgage Interest

Rate as of the Cut-off Date; (vii) the date on which the first Monthly Payment

was due on the Mortgage Loan, and, if such date is not the Due Date currently in

effect, such Due Date; (viii) the stated maturity date; (ix) the amount of the

Monthly Payment as of the Cut-off Date; (x) the paid-through date; (xi) the

original principal amount of the Mortgage Loan; (xii) the principal balance of

the Mortgage Loan as of the close of business on the Cut-off Date, after

application of payments of principal due on or before the Cut-off Date, whether

or not collected, and after deduction of any payments collected of scheduled

principal due after the Cut-off Date; (xiii) a code indicating the purpose of

the Mortgage Loan; (xiv) a code indicating the documentation style; (xv) the

Appraised Value; (xvi) the first Rate Adjustment Date; (xvii) the Rate Ceiling;

(xviii) the Periodic Cap; (xix) the Gross Margin; (xx) the Index; (xxi) the

closing date of such Mortgage Loan; (xxii) whether the Mortgagor under such

Mortgage Loan has the option to convert from an adjustable rate of interest to a

fixed rate of interest; (xxiii) whether such Mortgage Loan is subject to a

Prepayment Premium; and (xxiv) whether such Mortgage Loan is a GreenPoint

Mortgage Loan, a BANA Mortgage Loan or a National City Mortgage Mortgage Loan.

With respect to the Mortgage Loans in each Loan Group or Loan Subgroup in the

aggregate, the Mortgage Loan Schedule shall set forth the following information,

as of the Cut-off Date: (i) the number of Mortgage Loans; (ii) the current

aggregate outstanding principal balance of the Mortgage Loans; (iii) the

weighted average Mortgage Interest Rate of the Mortgage Loans; and (iv) the

weighted average months to maturity of the Mortgage Loans.

 

            Mortgage Loans: Such of the mortgage loans transferred and assigned

to the Trustee pursuant to Section 2.01 as from time to time are held as a part

of the Trust Estate (including any Substitute Mortgage Loans and REO Property),

the Mortgage Loans originally so held being identified in the Mortgage Loan

Schedule.

 

            Mortgage Note: The originally executed note or other evidence of

indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,

together with all riders thereto and amendments thereof.

 

            Mortgaged Property: The underlying property securing a Mortgage

Loan, which may include Co-op Shares or residential long term leases.

 

            Mortgagor: The obligor on a Mortgage Note.

 

            National City Mortgage: National City Mortgage Co., an Ohio

corporation, or its successor in interest, in its capacity as Servicer of the

National City Mortgage Mortgage Loans, or any successor servicer for such

Mortgage Loans appointed as herein provided.

 

            National City Mortgage Custodial Account: The separate Eligible

Account or Accounts created and maintained by National City Mortgage pursuant to

Section 3.09(a).

 

            National City Mortgage Mortgage Loans: The Mortgage Loans serviced

by National City Mortgage and identified as such on Exhibit D-3, Exhibit D-4 and

Exhibit D-5 of the Mortgage Loan Schedule.

 

            National City Mortgage Servicing Agreement: The Master Seller's

Warranties and Servicing Agreement, dated as of September 1, 2004, by and

between Banc of America Mortgage Capital Corporation and National City Mortgage

Co., as amended by that certain Amendment No. 1, dated as of July 1, 2004, by

and among Banc of America Mortgage Capital Corporation, Bank of America,

National Association and National City Mortgage Co. and that certain Amendment

No. 2, dated as of October 1, 2004, by and between Bank of America, National

Association and National City Mortgage Co.

 

            Net Mortgage Interest Rate: As to any Mortgage Loan and Distribution

Date, such Mortgage Loan's Mortgage Interest Rate thereon on the first day of

the month preceding the month of the related Distribution Date reduced by the

Servicing Fee Rate.

 

            Net WAC: As to any Loan Group or Loan Subgroup and any Distribution

Date, the weighted average of the Net Mortgage Interest Rates of the Mortgage

Loans in such Loan Group or Loan Subgroup (based on Stated Principal Balances of

the Mortgage Loans in such Loan Group or Loan Subgroup on the Due Date in the

month preceding the month of such Distribution Date).

 

            NIMS Insurer: Any insurer that is guaranteeing certain payments

under notes secured by collateral which includes all or a portion of the Class

3-CE and Class 3-P Certificates.

 

            Non-Supported Interest Shortfalls: As to any Distribution Date and

the CB Crossed Loan Groups, the amount, if any, by which the aggregate of

Prepayment Interest Shortfalls for the CB Crossed Loan Groups exceeds the

aggregate Compensating Interest received from the Servicers for the Mortgage

Loans in the CB Crossed Loan Groups for such Distribution Date.

 

            Non-U.S. Person: A Person other than a U.S. Person.

 

            Nonrecoverable Advance: Any portion of an Advance previously made or

proposed to be made in respect of a Mortgage Loan which has not been previously

reimbursed and which, in the good faith judgment of the related Servicer or the

Trustee, as applicable, will not or, in the case of a proposed Advance, would

not be ultimately recoverable from the related Mortgagor, related Liquidation

Proceeds, or other recoveries in respect of the related Mortgage Loan.

 

            NYCEMA: A New York Consolidation, Extension and Modification

Agreement.

 

            Offered Certificates: The Senior Certificates and the Class CB-1,

Class CB-2, Class CB-3, Class 3-M-1, Class 3-M-2, Class 3-B-1, Class 3-B-2 and

Class 3-B-3 Certificates.

 

            Offered Group 3 Certificates: The Class 3-A-1, Class 3-A-1A, Class

3-A-1B, Class 3-A-2, Class 3-A-2A, Class 3-A-2B, Class 3-A-3, Class 3-M-1, Class

3-M-2, Class 3-B-1, Class 3-B-2 and Class 3-B-3 Certificates.

 

            Officer's Certificate: A certificate signed by the Chairman of the

Board, Vice Chairman of the Board, President or a Vice President and by the

Treasurer, the Secretary or one of the Assistant Treasurers or Assistant

Secretaries, or any other duly authorized officer of the Depositor and delivered

to the Trustee.

 

            One-Month LIBOR: With respect to the initial Interest Accrual

Period, 2.85% per annum. With respect to each Interest Accrual Period (other

than the initial Interest Accrual Period), the rate determined by the Trustee on

the related LIBOR Determination Date on the basis of the offered rate for

one-month United States dollar deposits, as such rate appears on the Telerate

Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date. If

no such quotations are available on a LIBOR Determination Date, One-Month LIBOR

for the related Interest Accrual Period will be the higher of (i) One-Month

LIBOR for the previous LIBOR Determination Date (or, in the case of the first

LIBOR Determination Date for which the Trustee is required to determine

One-Month LIBOR, 2.85% per annum) or (ii) a per annum rate which the Trustee

determines to be either (a) the arithmetic mean (rounding such arithmetic mean

upwards if necessary to the nearest whole multiple of 1/16%) of the one-month

United States dollar lending rate that New York City banks selected by the

Trustee are quoting on the relevant LIBOR Determination Date to the principal

London offices of at least two leading banks in the London interbank market or

(b) in the event that the Trustee can determine no such arithmetic mean, the

lowest one-month United States dollar lending rate that the New York City banks

selected by the Trustee are quoting on such LIBOR Determination Date to leading

European banks.

 

            One-Year LIBOR Index: A rate per annum that is defined to be the

average of interbank offered rates for one-year U.S. dollar-denominated deposits

in the London market, as published in The Wall Street Journal and most recently

available either (i) as of the first Business Day in the month preceding the

month of the applicable Rate Adjustment Date or (ii) up to the date 45 days

before the applicable Rate Adjustment Date.

 

            Opinion of Counsel: A written opinion of counsel acceptable to the

Trustee who may be counsel for the Depositor or a Servicer, except that any

opinion of counsel relating to the qualification of the Trust Estate as four

separate REMICs or compliance with the REMIC Provisions must be an opinion of

Independent counsel.

 

            Original Class CB Certificate Balance: $15,092,881.00.

 

            Original Fractional Interest: With respect to each of the following

Classes of Subordinate Certificates, the corresponding percentage described

below, as of the Closing Date:

 

                      Class CB-1              4.45%

                      Class CB-2             2.85%

                      Class CB-3             1.80%

                      Class CB-4             1.00%

                      Class CB-5             0.40%

                      Class CB-6              0.00%

 

            OTS: The Office of Thrift Supervision.

 

            Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan which

was not the subject of a Principal Prepayment in Full prior to such Due Date,

which did not become a Liquidated Mortgage Loan prior to such Due Date and which

was not purchased from the Trust prior to such Due Date pursuant to Section

2.02, 2.04, 2.09 or Section 3.15(b).

 

            Overcollateralization Amount: As of any Distribution Date, the

excess, if any, of (x) the aggregate Stated Principal Balance of the Group 3

Mortgage Loans as of the Due Date in the month of such Distribution Date over

(y) the aggregate Class Certificate Balance of all Classes of Offered Group 3

Certificates (after taking into account all distributions of principal on such

Distribution Date and the increase of any Class Certificate Balance of a Class

of Offered Group 3 Certificates as a result of Recoveries).

 

            Overcollateralization Deficiency: As of any Distribution Date, the

excess, if any, of (x) the Targeted Overcollateralization Amount for such

Distribution Date over (y) the Overcollateralization Amount for such

Distribution Date, calculated for this purpose after taking into account the

reduction on such Distribution Date of the Class Certificate Balances of all

Classes of Offered Group 3 Certificates resulting from the distribution of the

Group 3 Principal Distribution Amount (but not the Extra Principal Distribution

Amount) on such Distribution Date, but prior to taking into account any Applied

Realized Loss Amounts, Class 3-A-3A Applied Realized Loss Amounts or Class

3-A-3B Applied Realized Loss Amounts on such Distribution Date.

 

            Overcollateralization Release Amount: With respect to any

Distribution Date on or after the Stepdown Date on which a Trigger Event is not

in effect, the lesser of (x) the Group 3 Principal Remittance Amount for such

Distribution Date and (y) the excess, if any, of (i) the Overcollateralization

Amount for such Distribution Date, assuming that 100% of the Group 3 Principal

Remittance Amount is applied as a principal payment on the Offered Group 3

Certificates on such Distribution Date, over (ii) the Targeted

Overcollateralization Amount for such Distribution Date. With respect to any

Distribution Date on which a Trigger Event is in effect, the

Overcollateralization Release Amount will be zero.

 

            Ownership Interest: As to any Certificate, any ownership or security

interest in such Certificate, including any interest in such Certificate as the

Holder thereof and any other interest therein, whether direct or indirect, legal

or beneficial, as owner or as pledgee.

 

            Pass-Through Rate: As to each Class of interest-bearing

Certificates, the per annum rate set forth or described in the Preliminary

Statement.

 

            With respect to the Class 3-CE Certificates and any Distribution

Date, a per annum rate equal to the percentage equivalent of a fraction, the

numerator of which is the sum of the amounts calculated pursuant to clauses (A)

through (O) below, and the denominator of which is the aggregate of the

Uncertificated Principal Balances of Regular Interest LT1AA, Regular Interest

LT1A1, Regular Interest LT1A1A, Regular Interest LT1A1B, Regular Interest LT1A2,

Regular Interest LT1A2A, Regular Interest LT1A2B, Regular Interest LT1A3A,

Regular Interest LT1A3B, Regular Interest LT1M1, Regular Interest LT1M2, Regular

Interest LT1B1, Regular Interest LT1B2, Regular Interest LT1B3 and Regular

Interest LT1ZZ. For purposes of calculating the Pass-Through Rate for the Class

3-CE Certificates, the numerator is equal to the sum of the following

components:

 

            (A) the Group 3 Lower-Tier Rate for Regular Interest LT1AA minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1AA;

 

            (B) the Group 3 Lower-Tier Rate for Regular Interest LT1A1 minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1A1;

 

             (C) the Group 3 Lower-Tier Rate for Regular Interest LT1A1A minus

the Marker Rate, applied to an amount equal to the Uncertificated Principal

Balance of Regular Interest LT1A1A;

 

            (D) the Group 3 Lower-Tier Rate for Regular Interest LT1A1B minus

the Marker Rate, applied to an amount equal to the Uncertificated Principal

Balance of Regular Interest LT1A1B;

 

            (E) the Group 3 Lower-Tier Rate for Regular Interest LT1A2 minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1A2;

 

            (F) the Group 3 Lower-Tier Rate for Regular Interest LT1A2A minus

the Marker Rate, applied to an amount equal to the Uncertificated Principal

Balance of Regular Interest LT1A2A;

 

            (G) the Group 3 Lower-Tier Rate for Regular Interest LT1A2B minus

the Marker Rate, applied to an amount equal to the Uncertificated Principal

Balance of Regular Interest LT1A2B;

 

            (H) the Group 3 Lower-Tier Rate for Regular Interest LT1A3A minus

the Marker Rate, applied to an amount equal to the Uncertificated Principal

Balance of Regular Interest LT1A3A;

 

            (I) the Group 3 Lower-Tier Rate for Regular Interest LT1A3B minus

the Marker Rate, applied to an amount equal to the Uncertificated Principal

Balance of Regular Interest LT1A3B;

 

            (J) the Group 3 Lower-Tier Rate for Regular Interest LT1M1 minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1M1;

 

            (K) the Group 3 Lower-Tier Rate for Regular Interest LT1M2 minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1M2;

 

            (L) the Group 3 Lower-Tier Rate for Regular Interest LT1B1 minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1B1;

 

            (M) the Group 3 Lower-Tier Rate for Regular Interest LT1B2 minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1B2;

 

            (N) the Group 3 Lower-Tier Rate for Regular Interest LT1B3 minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1B3;

 

            (O) the Group 3 Lower-Tier Rate for Regular Interest LT1ZZ minus the

Marker Rate, applied to an amount equal to the Uncertificated Principal Balance

of Regular Interest LT1ZZ.

 

            Paying Agent: As defined in Section 9.13.

 

            Percentage Interest: As to any Certificate (other than the Class

3-CE and Class 3-P Certificates), the percentage obtained by dividing the

initial Certificate Balance of such Certificate by the Initial Class Certificate

Balance of the Class of which such Certificate is a part. With respect to the

Class 3-CE and Class 3-P Certificates, the portion of the Class evidenced

thereby, expressed as a percentage, as stated on the face of such Certificate;

provided, however, that the sum of all such percentages for each such Class

totals 100%.

 

             Periodic Advance: The payment required to be made by a Servicer with

respect to any Distribution Date pursuant to Section 3.21, the amount of any

such payment being equal to the aggregate of Monthly Payments (net of the

Servicing Fee) on the Mortgage Loans (including any REO Property) serviced by

such Servicer that were due on the related Due Date and not received as of the

close of business on the related Determination Date, less the aggregate amount

of any such delinquent payments that such Servicer has determined would

constitute a Nonrecoverable Advance if advanced.

 

            Periodic Cap: For each Mortgage Loan, the applicable limit on

adjustment of the Mortgage Interest Rate for each Rate Adjustment Date specified

in the applicable Mortgage Note, if any, and designated as such in the Mortgage

Loan Schedule.

 

            Permitted Investments: One or more of the following:

 

            (i) obligations of or guaranteed as to principal and interest by the

      United States, FHLMC, FNMA or any agency or instrumentality of the United

      States when such obligations are backed by the full faith and credit of

      the United States; provided that such obligations of FHLMC or FNMA shall

      be limited to senior debt obligations and mortgage participation

      certificates other than investments in mortgage-backed or mortgage

      participation securities with yields evidencing extreme sensitivity to the

      rate of principal payments on the underlying mortgages, which shall not

      constitute Permitted Investments hereunder;

 

            (ii) repurchase agreements on obligations specified in clause (i)

      maturing not more than one month from the date of acquisition thereof with

      a corporation incorporated under the laws of the United States or any

      state thereof rated not lower than "P-1" by Moody's and "A-1" by S&P;

 

            (iii) federal funds, certificates of deposit, demand deposits, time

      deposits and bankers' acceptances (which shall each have an original

      maturity of not more than 90 days and, in the case of bankers'

      acceptances, shall in no event have an original maturity of more than 365

      days or a remaining maturity of more than 30 days) denominated in United

      States dollars of any U.S. depository institution or trust company

      incorporated under the laws of the United States or any state thereof,

      rated not lower than "P-1" by Moody's and "A-1" by S&P;

 

            (iv) commercial paper (having original maturities of not more than

      365 days) of any corporation incorporated under the laws of the United

      States or any state thereof which is rated not lower than "P-1" by Moody's

      and "A-1" by S&P;

 

            (v) investments in money market funds (including funds of the

      Trustee or its affiliates, or funds for which an affiliate of the Trustee

      acts as advisor, as well as funds for which the Trustee and its affiliates

      may receive compensation) rated either "Aaa" by Moody's and "AAAm G" by

      S&P or otherwise approved in writing by each Rating Agency; and

 

            (vi) other obligations or securities that are acceptable to each

      Rating Agency and the NIMS Insurer and, as evidenced by an Opinion of

      Counsel obtained by the Trustee and addressed to the Depositor, will not

      affect the qualification of the Trust Estate as four separate REMICs;

 

provided, however, that no instrument shall be a Permitted Investment if it

represents either (a) the right to receive only interest payments with respect

to the underlying debt instrument or (b) the right to receive both principal and

interest payments derived from obligations underlying such instrument and the

principal and interest with respect to such instrument provide a yield to

maturity greater than 120% of the yield to maturity at par of such underlying

obligations.

 

            Permitted Transferee: Any Person other than (i) the United States,

or any State or any political subdivision thereof, or any agency or

instrumentality of any of the foregoing, (ii) a foreign government,

international organization or any agency or instrumentality of either of the

foregoing, (iii) an organization which is exempt from tax imposed by Chapter 1

of the Code (including the tax imposed by Section 511 of the Code on unrelated

business taxable income) (except certain farmers' cooperatives described in Code

Section 521), (iv) rural electric and telephone cooperatives described in Code

Section 1381(a)(2)(C), (v) a Person with respect to whom the income on a

Residual Certificate is allocable to a foreign permanent establishment or fixed

base, within the meaning of an applicable income tax treaty, of such Person or

any other U.S. Person, and (vi) any other Person so designated by the Trustee

based on an Opinion of Counsel to the effect that any transfer to such Person

may cause the Trust or any other Holder of a Residual Certificate to incur tax

liability that would not be imposed other than on account of such transfer. The

terms "United States," "State" and "international organization" shall have the

meanings set forth in Code Section 7701 or successor provisions.

 

            Person: Any individual, corporation, limited liability company,

partnership, joint venture, association, joint-stock company, trust,

unincorporated organization or government or any agency or political subdivision

thereof.

 

            Physical Certificates: The Class 1-A-R, Class CB-4, Class CB-5,

Class CB-6, Class 3-CE and Class 3-P Certificates.

 

            Plan: As defined in Section 6.02(e).

 

            Pool Distribution Amount: As to any Distribution Date and Shifting

Interest Loan Group, the excess of (a) the sum of (i) the aggregate of (A) the

interest portion of any Monthly Payment on a Mortgage Loan in such Loan Group

(net of the Servicing Fee), the principal portion of any Monthly Payment on a

Mortgage Loan in such Loan Group due on the Due Date in the calendar month in

which such Distribution Date occurs and which is received prior to the related

Determination Date (or in the case of any Monthly Covered Amount, the related

Remittance Date) and (B) all Periodic Advances made by a Servicer (or the

Trustee, if applicable) in respect of such Loan Group and payments of

Compensating Interest allocable to such Loan Group in respect of such

Distribution Date deposited to the Servicer Custodial Accounts pursuant to

Section 3.09(a)(vii); (ii) all Liquidation Proceeds received on the Mortgage

Loans in such Loan Group during the preceding calendar month and deposited to

the Servicer Custodial Accounts pursuant to Section 3.09(a)(iii); (iii) all

Principal Prepayments (other than Total Covered Amounts) received on the

Mortgage Loans in such Loan Group during the calendar month preceding the month

of such Distribution Date and deposited to the Servicer Custodial Accounts

pursuant to Section 3.09(a)(i) and all Total Covered Amounts received and

deposited in the Servicer Custodial Accounts by the related Remittance Date;

(iv) in connection with Defective Mortgage Loans and Converted Mortgage Loans in

such Loan Group, the aggregate of the Repurchase Prices and Substitution

Adjustment Amounts received during the calendar month preceding the month of

such Distribution Date and deposited to the Servicer Custodial Accounts pursuant

to Section 3.09(a)(vi); (v) any other amounts in the Servicer Custodial Accounts

deposited therein pursuant to Sections 3.09(a)(iv), (v), (viii) and (ix) in

respect of such Distribution Date and such Loan Group; (vi) any Reimbursement

Amount required to be included pursuant to Section 5.02(a) and (vii) any

Recovery in respect of such Distribution Date; over (b) any (i) amounts

permitted to be withdrawn from the Servicer Custodial Accounts pursuant to

clauses (i) through (viii), inclusive, of Section 3.12(a) in respect of such

Loan Group and (ii) amounts permitted to be withdrawn from the Distribution

Account pursuant to clauses (i) and (ii) of Section 3.12(b) in respect of such

Loan Group.

 

            Pool Stated Principal Balance: As to any Distribution Date and

Shifting Interest Loan Group, the aggregate Stated Principal Balance of all

Mortgage Loans in such Loan Group that were Outstanding Mortgage Loans at the

close of business on the Due Date in the month preceding the month in which such

Distribution Date occurs.

 

            Prepayment Interest Shortfall: As to any Distribution Date and each

Mortgage Loan subject to a Principal Prepayment received during the calendar

month preceding such Distribution Date, the amount, if any, by which one month's

interest at the related Mortgage Interest Rate (net of the Servicing Fee Rate)

on such Principal Prepayment exceeds the amount of interest paid in connection

with such Principal Prepayment.

 

            Prepayment Premium: Any prepayment premium, penalty or charge

collected by a Servicer from a Mortgagor in connection with any voluntary

Principal Prepayment in Full pursuant to the terms of the related Mortgage Note

as from time to time held as a part of the Trust Fund, the Prepayment Premiums

so held being identified in the Mortgage Loan Schedule.

 

            Primary Mortgage Insurance Policy: Each policy of primary mortgage

guaranty insurance or any replacement policy therefor with respect to any

Mortgage Loan, in each case issued by an insurer acceptable to FNMA or FHLMC.

 

            Principal Amount: As to any Distribution Date and Loan Group (other

than Loan Group 3), the sum of (i) the sum of (a) the principal portion of each

Monthly Payment due on each Mortgage Loan in such Loan Group on the related Due

Date, (b) the Stated Principal Balance, as of the date of repurchase, of each

Mortgage Loan in such Loan Group that was repurchased by the Depositor, the

Seller or the related Servicer as of such Distribution Date, (c) any

Substitution Adjustment Amount in connection with a Defective Mortgage Loan in

such Loan Group received with respect to such Distribution Date, (d) any

Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans in

such Loan Group that are not yet Liquidated Mortgage Loans received by a

Servicer during the calendar month preceding the month of such Distribution

Date, (e) with respect to each Mortgage Loan in such Loan Group that became a

Liquidated Mortgage Loan during the calendar month preceding the month of such

Distribution Date, the amount of Liquidation Proceeds (excluding Excess

Proceeds) allocable to principal received by a Servicer with respect to such

Mortgage Loan during the calendar month preceding the month of such Distribution

Date and (f) all Principal Prepayments on the Mortgage Loans in such Loan Group

received by a Servicer during the calendar month preceding the month of such

Distribution Date; and (ii) any Recovery related to such Loan Group for such

Distribution Date.

 

            Principal Prepayment: Any payment or other recovery of principal on

a Mortgage Loan (other than Liquidation Proceeds) which is received in advance

of its scheduled Due Date and is not accompanied by an amount of interest

representing scheduled interest due on any date or dates in any month or months

subsequent to the month of prepayment including the principal portion of any

Total Covered Amount.

 

            Principal Prepayment in Full: Any Principal Prepayment of the entire

principal balance of a Mortgage Loan.

 

            Private Certificates: The Class CB-4, Class CB-5, Class CB-6, Class

3-CE and Class 3-P Certificates.

 

            Pro Rata Share: As to any Distribution Date and any Class of Class

CB Certificates that is not a Restricted Class, the portion of the Subordinate

Principal Distribution Amounts allocable to such Class, equal to the product of

the Subordinate Principal Distribution Amounts for such Distribution Date and a

fraction, the numerator of which is the related Class Certificate Balance

thereof and the denominator of which is the aggregate Class Certificate Balance

of the Class CB Certificates that are not Restricted Classes. The Pro Rata Share

of a Restricted Class shall be 0%. The Pro Rata Share of a Class of Class CB

Certificates may be computed for each of clause (i) and clause (ii) of the

definition of "Subordinate Principal Distribution Amount" in the event the

Restricted Classes differ with respect to each clause.

 

            Rate Adjustment Date: As to each Mortgage Loan, the Due Date on

which date an adjustment to the Mortgage Interest Rate of such Mortgage Loan

becomes effective under the related Mortgage Note.

 

            Rate Ceiling: The maximum per annum Mortgage Interest Rate permitted

under the related Mortgage Note and indicated on the Mortgage Loan Schedule.

 

            Rating Agency: Each of Moody's and S&P. If either such organization

or a successor is no longer in existence, "Rating Agency" shall be such

nationally recognized statistical rating organization, or other comparable

Person, as is designated by the Depositor, notice of which designation shall be

given to the Trustee, the Servicers and the NIMS Insurer. References herein to a

given rating or rating category of a Rating Agency shall mean such rating

category without giving effect to any modifiers.

 

            Realized Loss: With respect to each Liquidated Mortgage Loan, an

amount as of the date of such liquidation, equal to (i) the unpaid principal

balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus

(ii) interest at the Net Mortgage Interest Rate from the Due Date as to which

interest was last paid or advanced (and not reimbursed) to Certificateholders up

to the Due Date in the month in which Liquidation Proceeds are required to be

distributed on the Stated Principal Balance of such Liquidated Mortgage Loan

from time to time, minus (iii) the Liquidation Proceeds, if any, received during

the month in which such liquidation occurred, to the extent applied as

recoveries of interest at the Net Mortgage Interest Rate and to principal of the

Liquidated Mortgage Loan. With respect to each Mortgage Loan that has become the

subject of a Deficient Valuation, if the principal amount due under the related

Mortgage Note has been reduced, the difference between the principal balance of

the Mortgage Loan outstanding immediately prior to such Deficient Valuation and

the principal balance of the Mortgage Loan as reduced by the Deficient

Valuation. With respect to each Mortgage Loan that has become the subject of a

Debt Service Reduction and any Distribution Date, the amount, if any, by which

the principal portion of the related Monthly Payment has been reduced.

 

            Realized Loss Amortization Amount: Any of the Class 3-A-3 Realized

Loss Amortization Amount, the Class 3-M-1 Realized Loss Amortization Amount, the

Class 3-M-2 Realized Loss Amortization Amount, the Class 3-B-1 Realized Loss

Amortization Amount, the Class 3-B-2 Realized Loss Amortization Amount or the

Class 3-B-3 Realized Loss Amortization Amount.

 

            Record Date: With respect to all of the Certificates (other than the

Class 3-A, Class M and Class 3-B Certificates), the last Business Day of the

month immediately preceding the month in which the related Distribution Date

occurs and with respect to the Class 3-A, Class M and Class 3-B Certificates,

the Business Day immediately preceding such Distribution Date; provided,

however, that if any such Class 3-A, Class M and Class 3-B Certificates becomes

a Definitive Certificate, the Record Date for such Certificate shall be the last

Business Day of the month immediately preceding the month in which the related

Distribution Date occurs.

 

            Recovery: As to any Distribution Date and Loan Group or Loan

Subgroup, the sum of all amounts received during the calendar month preceding

the month of such Distribution Date on each Mortgage Loan in such Loan Group or

Loan Subgroup subsequent to such Mortgage Loan being determined to be a

Liquidated Mortgage Loan.

 

            Regular Certificates: As defined in the Preliminary Statement

hereto.

 

            Regular Interest LT1AA: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1AA shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A1: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A1 shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A1A: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A1A shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A1B: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A1B shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A2: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A2 shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A2A: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A2A shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A2B: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A2B shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A3A: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A3A shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1A3B: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1A3B shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1M1: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1M1 shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1M2: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1M2 shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1B1: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1B1 shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1B2: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1B2 shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1B3: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1B3 shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1GRP: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1GRP shall accrue interest at the applicable Group 3 Lower-Tier Rate

in effect from time to time, and shall be entitled to distributions of

principal, subject to the terms and conditions hereof, in an aggregate amount

equal to its initial Uncertificated Principal Balance as set forth in the

definition of Uncertificated Group 3 Lower-Tier Interest.

 

            Regular Interest LT1SUB: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1SUB shall accrue interest at the applicable Group 3 Lower-Tier Rate

in effect from time to time, and shall be entitled to distributions of

principal, subject to the terms and conditions hereof, in an aggregate amount

equal to its initial Uncertificated Principal Balance as set forth in the

definition of Uncertificated Group 3 Lower-Tier Interest.

 

            Regular Interest LT1XX: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1XX shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the definition of Uncertificated Group 3

Lower-Tier Interest.

 

            Regular Interest LT1ZZ: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT1ZZ shall accrue interest at the applicable Group 3 Lower-Tier Rate

and shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Principal Balance as set forth in the Preliminary Statement hereto.

 

            Regular Interest LT2GRP: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT2GRP shall accrue interest at the applicable Group 3 Lower-Tier Rate

in effect from time to time, and shall be entitled to distributions of

principal, subject to the terms and conditions hereof, in an aggregate amount

equal to its initial Uncertificated Principal Balance as set forth in the

definition of Uncertificated Group 3 Lower-Tier Interest.

 

            Regular Interest LT2SUB: One of the separate non-certificated

beneficial ownership interests in the Group 3 Lower-Tier REMIC issued hereunder

and designated as a Regular Interest in the Group 3 Lower-Tier REMIC. Regular

Interest LT2SUB shall accrue interest at the applicable Group 3 Lower-Tier Rate

in effect from time to time, and shall be entitled to distributions of

principal, subject to the terms and conditions hereof, in an aggregate amount

equal to its initial Uncertificated Principal Balance as set forth in the

definition of Uncertificated Group 3 Lower-Tier Interest.

 

            Reimbursement Amount: As defined in Section 2.02.

 

            Related Group: For Loan Group 1, Group 1, for Loan Group 2, Group 2,

for Loan Group 3, Group 3 and for the CB Crossed Loan Groups, Group 1 and Group

2 and the Class CB Certificates.

 

            Related Loan Group: For Group 1, Loan Group 1, for Group 2, Loan

Group 2, for Group 3, Loan Group 3, and for the Class CB Certificates, Loan

Group 1 and Loan Group 2.

 

            Related Loan Subgroup: For Subgroup 3A, Loan Subgroup 3A, and for

Subgroup 3B, Loan Subgroup 3B.

 

            Related Subgroup: For Loan Subgroup 3A, Subgroup 3A, and for Loan

Subgroup 3B, Subgroup 3B.

 

             Relief Act: The Servicemembers Civil Relief Act, as it may be

amended from time to time.

 

            Relief Act Reduction: With respect to any Distribution Date, for any

Mortgage Loan as to which there has been a reduction in the amount of interest

collectible thereon for the most recently ended calendar month as a result of

the application of the Relief Act or comparable state legislation, the amount,

if any, by which (i) interest collectible on such Mortgage Loan for the most

recently ended calendar month is less than (ii) interest accrued pursuant to the

terms of the Mortgage Note on the same principal amount and for the same period

as the interest collectible on such Mortgage Loan for the most recently ended

calendar month.

 

            REMIC: A "real estate mortgage investment conduit" within the

meaning of Section 860D of the Code. "Each REMIC" or "any REMIC" means each of

the Lower-Tier REMIC, the Upper-Tier REMIC, the Group 3 Lower-Tier REMIC and the

Group 3 Upper-Tier REMIC.

 

            REMIC Certificate Maturity Date: The "latest possible maturity date"

of the Regular Certificates as that term is defined in Section 2.07.

 

            REMIC Provisions: Provisions of the federal income tax law relating

to real estate mortgage investment conduits, which appear at Section 860A

through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,

and regulations promulgated thereunder, as the foregoing may be in effect from

time to time, as well as provisions of applicable state laws.

 

             Remittance Date: As to any Distribution Date, by 2:00 p.m. Eastern

time on the 18th calendar day of each month, of if such day is not a Business

Day, the immediately preceding Business Day.

 

            REO Property: A Mortgaged Property acquired by a Servicer on behalf

of the Trust through foreclosure or deed-in-lieu of foreclosure in connection

with a defaulted Mortgage Loan.

 

            Repurchase Price: As to any Defective Mortgage Loan repurchased on

any date pursuant to Section 2.02 or 2.04 or a Converted Mortgage Loan

repurchased on any date pursuant to Section 2.09, an amount equal to (a) in the

case of the Depositor or the Seller, the sum of (i) the unpaid principal balance

thereof and (ii) the unpaid accrued interest thereon at the applicable Mortgage

Interest Rate from the Due Date to which interest was last paid by the Mortgagor

to the first day of the month following the month in which such Mortgage Loan

became eligible to be repurchased and (b) in the case of a Servicer, the sum of

(i) the Stated Principal Balance of the Mortgage Loan, (ii) interest on such

Stated Principal Balance at the Mortgage Interest Rate from the date on which

interest has last been paid and distributed through the last day of the month in

which such repurchase takes place and (iii) any costs and damages incurred by

the Trust in connection with any violation by such repurchased Mortgage Loan of

any predatory or abusive lending law, less (x) amounts received or advanced in

respect of such repurchased Mortgage Loan which are being held in the applicable

Servicer Custodial Account for distribution in the month of repurchase and (y)

if such Servicer is servicing such Mortgage Loan under this Agreement, the

Servicing Fee Rate for such Mortgage Loan.

 

            Request for Release: The Request for Release submitted by a Servicer

to the Trustee or the Custodian on behalf of the Trustee, substantially in the

form of Exhibit E.

 

            Required Insurance Policy: With respect to any Mortgage Loan, any

insurance policy which is required to be maintained from time to time under this

Agreement in respect of such Mortgage Loan.

 

            Reserve Account: The trust account created and maintained by the

Trustee pursuant to Section 3.09(f) which shall be entitled the "Reserve

Account, Wells Fargo Bank, N.A., as Trustee, in trust for registered Holders of

the Offered Group 3 Certificates of the Banc of America Funding Trust, Series

2005-B" and which must be an Eligible Account. Amounts on deposit in the Reserve

Account shall not be invested. The Reserve Account shall not be an asset of any

REMIC formed under this Agreement.

 

            Residual Certificate: The Class 1-A-R Certificate.

 

            Responsible Officer: Any officer of the Corporate Trust Department

of the Trustee, including any Senior Vice President, any Vice President, any

Assistant Vice President, any Assistant Secretary, any Trust Officer or

Assistant Trust Officer, or any other officer of the Trustee customarily

performing functions similar to those performed by any of the above designated

officers and having responsibility for the administration of this Agreement.

 

            Restricted Classes: As defined in Section 5.02(d).

 

            S&P: Standard & Poor's, a division of The McGraw-Hill Companies,

Inc., or any successor thereto.

 

            Seller: Bank of America, National Association, a national banking

association, or its successor in interest, as seller of the Mortgage Loans under

the Mortgage Loan Purchase Agreement.

 

            Senior Certificates: The Class A Certificates.

 

            Senior Credit Support Depletion Date: As to each of the CB Crossed

Groups, the date on which the aggregate Class Certificate Balance of the Class

CB Certificates is reduced to zero.

 

            Senior Enhancement Percentage: For any Distribution Date, the

percentage obtained by dividing (x) the sum of (i) the aggregate Class

Certificate Balance of the Class M and Class 3-B Certificates before taking into

account the distribution of the Group 3 Principal Distribution Amount on such

Distribution Date and (ii) the Overcollateralization Amount as of the prior

Distribution Date by (y) the aggregate Stated Principal Balance of Loan Group 3

as of the due date in the month of such Distribution Date.

 

            Senior Percentage: With respect to any Distribution Date and each

Shifting Interest Loan Group, the percentage, carried to at least six places

rounded up, obtained by dividing the aggregate Class Certificate Balance of the

Senior Certificates of the Related Group immediately prior to such Distribution

Date by the Pool Stated Principal Balance of such Loan Group for such

Distribution Date.

 

            Senior Prepayment Percentage: For each CB Crossed Loan Group during

the seven years beginning on the first Distribution Date, 100%. The Senior

Prepayment Percentage for any Distribution Date and each CB Crossed Loan Group

occurring on or after the seventh year anniversary of the first Distribution

Date will, except as provided herein, be as follows: for any Distribution Date

in the first year thereafter, the Senior Percentage for such CB Crossed Loan

Group plus 70% of the Subordinate Percentage for such CB Crossed Loan Group for

such Distribution Date; for any Distribution Date in the second year thereafter,

the Senior Percentage for such CB Crossed Loan Group plus 60% of the Subordinate

Percentage for such CB Crossed Loan Group for such Distribution Date; for any

Distribution Date in the third year thereafter, the Senior Percentage for such

CB Crossed Loan Group plus 40% of the Subordinate Percentage for such CB Crossed

Loan Group for such Distribution Date; for any Distribution Date in the fourth

year thereafter, the Senior Percentage for such CB Crossed Loan Group plus 20%

of the Subordinate Percentage for such CB Crossed Loan Group for such

Distribution Date; and for any Distribution Date in the fifth or later years

thereafter, the Senior Percentage for such CB Crossed Loan Group for such

Distribution Date. If, however, on any of the foregoing Distribution Dates (i)

the CB Crossed Loan Group Senior Percentage exceeds the initial CB Crossed Loan

Group Senior Percentage, the Senior Prepayment Percentage for the CB Crossed

Loan Groups for such Distribution Date will once again equal 100%, (ii) before

the Distribution Date occurring in April 2008, the CB Crossed Loan Group

Subordinate Percentage for such Distribution Date is greater than or equal to

twice the initial CB Crossed Loan Group Subordinate Percentage, the Senior

Prepayment Percentage each CB Crossed Loan Group for such Distribution Date will

equal the Senior Percentage for such CB Crossed Loan Group plus 50% of the

Subordinate Percentage for such CB Crossed Loan Group or (iii) on or after the

Distribution Date in April 2008, the CB Crossed Loan Group Subordinate

Percentage for such Distribution Date is greater than or equal to twice the

initial CB Crossed Loan Group Subordinate Percentage, the Senior Prepayment

Percentage for each CB Crossed Loan Group for such Distribution Date will equal

the Senior Percentage for such CB Crossed Loan Group. Notwithstanding the

foregoing, no decrease in the share of the applicable Subordinate Percentage

(for calculating the applicable Senior Prepayment Percentage for any Loan Group)

will occur and the Senior Prepayment Percentage for all CB Crossed Loan Groups

will be calculated without regard to clause (ii) or (iii) in the preceding

sentence unless both of the Senior Step Down Conditions are satisfied.

 

            Senior Principal Distribution Amount: As to any Distribution Date

and Loan Group (other than Loan Group 3), the sum of (i) the Senior Percentage

for such Loan Group of the amounts described in clauses (i)(a) through (d) of

the definition of "Principal Amount" for such Distribution Date and Loan Group

and (ii) the Senior Prepayment Percentage for such Loan Group of the amounts

described in clauses (i)(e) and (f) and the amount described in clause (ii) of

the definition of "Principal Amount" for such Distribution Date and Loan Group.

 

            Senior Specified Enhancement Percentage: 17.50%.

 

            Senior Step Down Conditions: As of any Distribution Date and a CB

Crossed Loan Group as to which any decrease in the Senior Prepayment Percentage

for any CB Crossed Loan Group applies, (i) the outstanding principal balance of

all Mortgage Loans in such Loan Groups (including, for this purpose, any

Mortgage Loans in foreclosure, any REO Property and any Mortgage Loan for which

the Mortgagor has filed for bankruptcy after the Closing Date) delinquent 60

days or more (averaged over the preceding six-month period), as a percentage of

the aggregate Class Certificate Balance of the Class CB Certificates, is not

equal to or greater than 50% or (ii) cumulative Realized Losses with respect to

the Mortgage Loans in such Loan Groups as of the applicable Distribution Date do

not exceed the percentages of the Original Class CB Certificate Balance set

forth below:

 

                                                           Percentage of

                                                         Original Class CB

            Distribution Date Occurring                  Certificate Balance

            -----------------------------                -------------------

            April 2005 through March 2008                        20%

            April 2008 through March 2013                        30%

            April 2013 through March 2014                        35%

            April 2014 through March 2015                        40%

            April 2015 through March 2016                        45%

             April 2016 and thereafter                            50%

 

            Servicer: Any of GreenPoint, BANA or National City Mortgage, each in

their capacity as originator or servicer of the Mortgage Loans, or any successor

servicer appointed as herein provided.

 

            Servicer Advance Date: As to any Distribution Date, 11:30 a.m.,

Eastern time, on the Remittance Date.

 

            Servicer Custodial Account: The GreenPoint Custodial Account, the

BANA Custodial Account or the National City Mortgage Custodial Account, as

applicable.

 

            Servicer Custodial Account Reinvestment Income: For each

Distribution Date, all income and gains net of any losses realized since the

preceding Distribution Date from Permitted Investments of funds in the related

Servicer Custodial Account.

 

            Servicers' Certificates: The monthly reports required by Section

4.01.

 

            Servicing Advances: All customary, reasonable and necessary "out of

pocket" costs and expenses incurred in the performance by any Servicer of its

servicing obligations, including, but not limited to (i) the preservation,

restoration and protection of a Mortgaged Property, (ii) expenses reimbursable

to any Servicer pursuant to Section 3.15 and any enforcement or judicial

proceedings, including foreclosures, (iii) the management and liquidation of any

REO Property and (iv) compliance with the obligations under Section 3.13.

 

            Servicing Agreements: Any of the GreenPoint Servicing Agreement, the

BANA Servicing Agreement and the National City Mortgage Servicing Agreement.

 

            Servicing Compensation: With respect to each Distribution Date, the

sum of (i) the aggregate Servicing Fee for such Distribution Date subject to

reduction as provided in Section 3.18, (ii) any Ancillary Income, (iii) Excess

Proceeds for the preceding month and (iv) the Servicer Custodial Account

Reinvestment Income for such Distribution Date.

 

            Servicing Fee: With respect to each Mortgage Loan and Distribution

Date, the amount of the fee payable to the related Servicer, which shall, for

such Distribution Date, be equal to one-twelfth of the product of the Servicing

Fee Rate with respect to such Mortgage Loan and the Stated Principal Balance of

such Mortgage Loan. Such fee shall be payable monthly, computed on the basis of

the same Stated Principal Balance and period respecting which any related

interest payment on a Mortgage Loan is computed. Each Servicer's right to

receive the Servicing Fee is limited to, and payable solely from, the interest

portion (including recoveries with respect to interest from Liquidation Proceeds

and other proceeds, to the extent permitted by Section 3.12) of related Monthly

Payments collected by such Servicer, or as otherwise provided under Section

3.12.

 

             Servicing Fee Rate: With respect to each Mortgage Loan, as set forth

on the Mortgage Loan Schedule.

 

            Servicing File: The items pertaining to a particular Mortgage Loan

referred to in Exhibit P hereto, and any additional documents required to be

added to the Servicing File pursuant to the Agreement.

 

            Servicing Officer: Any officer of a Servicer involved in, or

responsible for, the administration and servicing of the applicable Mortgage

Loans whose name appears on a list of servicing officers furnished to the

Trustee and the Custodian by such Servicer, as such list may from time to time

be amended.

 

            Servicing Transfer Costs: All reasonable costs and expenses of the

Trustee related to any termination of a Servicer, appointment of a successor

Servicer or the transfer and assumption of servicing by the Trustee (including,

without limitation, (i) all legal costs and expenses and all due diligence costs

and expenses associated with an evaluation of the potential termination of the

Servicer as a result of an event of default by such Servicer and (ii) any costs

or expenses associated with the complete transfer of all servicing data and the

completion, correction or manipulation of such servicing data as may be required

by the Trustee to correct any errors or insufficiencies in the servicing data or

otherwise to enable the Trustee to service the Mortgage Loans properly and

effectively).

 

            Shifting Interest Certificates: Any of the Group 1 Certificates and

Group 2 Certificates.

 

            Shifting Interest Group: Any of Group 1 and Group 2.

 

            Shifting Interest Loan Group: Any of Loan Group 1 and Loan Group 2.

 

            Similar Law: As defined in Section 6.02(e).

 

            Six-Month LIBOR Index: A rate per annum that is defined to be the

arithmetic mean of the interbank offered rates for six month U.S.

dollar-denominated deposits in the London market, as published in The Wall

Street Journal and most recently available either (i) as of the first Business

Day in the month preceding the month of the applicable Rate Adjustment Date or

(ii) up to 45 days before the applicable Rate Adjustment Date.

 

            Stated Principal Balance: As to any Mortgage Loan and Due Date, the

unpaid principal balance of such Mortgage Loan as of such date as specified in

the amortization schedule at the time relating thereto (before any adjustment to

such amortization schedule by reason of any moratorium or similar waiver or

grace period) after giving effect to any previous partial Principal Prepayments

and Liquidation Proceeds allocable to principal (other than with respect to any

Liquidated Mortgage Loan) and to the payment of principal due on such Due Date

and irrespective of any delinquency in payment by the related Mortgagor, and

after giving effect to any Deficient Valuation.

 

            Stepdown Date: The earlier to occur of (i) the Distribution Date on

which the aggregate Class Certificate Balance of the Group 3 Senior Certificates

is reduced to zero and (ii) the later to occur of (x) the Distribution Date in

April 2008 and (y) the Distribution Date on which the Senior Enhancement

Percentage is greater than or equal to the Senior Specified Enhancement

Percentage.

 

            Sub-Account 1: The sub-account of the Distribution Account

designated by the Trustee pursuant to Section 3.09(e).

 

            Sub-Account 2: The sub-account of the Distribution Account

designated by the Trustee pursuant to Section 3.09(e).

 

            Sub-Account 3: The sub-account of the Distribution Account

designated by the Trustee pursuant to Section 3.09(e).

 

            Subgroup: Any of Subgroup 3A or Subgroup 3B.

 

            Subgroup 3A: The Class 3-A-1, Class 3-A-1A and Class 3-A-1B

Certificates and the Class 3-A-3A Component.

 

             Subgroup 3A Cap: As of any Distribution Date and Subgroup 3A, a per

annum rate equal to the lesser of (i) 11.00% and (ii) the Net WAC for the

Subgroup 3A Mortgage Loans (subject to adjustment based on the actual number of

days elapsed in the related Interest Accrual Period).

 

            Subgroup 3A Interest Remittance Amount: As of any Distribution Date,

the sum, without duplication, of (i) all interest due and collected or advanced

with respect to the payments due on the Subgroup 3A Mortgage Loans on the Due

Date in the calendar month in which such Distribution Date occurs and received

by the Servicers on or prior to the Determination Date for such Distribution

Date (less the Servicing Fees for such Mortgage Loans, amounts available for

reimbursement of Advances pursuant to this Agreement and expenses and

indemnities reimbursable pursuant to this Agreement) or in the case of any

Monthly Covered Amount, the related Remittance Date, (ii) all Compensating

Interest paid by the Servicers for such Distribution Date with respect to the

Subgroup 3A Mortgage Loans, (iii) the portion of any payment in connection with

any Principal Prepayment, substitution, Repurchase Price, Insurance Proceeds or

net Liquidation Proceeds relating to interest with respect to such Mortgage

Loans received during the prior calendar month, (iv) on the Distribution Date on

which the Subgroup 3A Mortgage Loans and related REO Property are sold at

auction in accordance with Section 10.01 hereof, that portion of the Termination

Price in respect of interest and (v) any Reimbursement Amount relating to the

Subgroup 3A Mortgage Loans received during the prior calendar month.

 

            Subgroup 3A Mortgage Loan: Each Mortgage Loan listed on Exhibit D-4

hereto.

 

            Subgroup 3A Principal Percentage: With respect to any Distribution

Date and Subgroup 3A, the percentage equivalent of a fraction, the numerator of

which is the portion of the Group 3 Principal Remittance Amount for such

Distribution Date allocable to the Subgroup 3A Mortgage Loans and the

denominator of which is the Group 3 Principal Remittance Amount for such

Distribution Date.

 

            Subgroup 3B: The Class 3-A-2, Class 3-A-2A and Class 3-A-2B

Certificates and the Class 3-A-3B Component.

 

            Subgroup 3B Cap: As of any Distribution Date and Subgroup 3B, a per

annum rate equal to the lesser of (i) 11.00% and (ii) the Net WAC for the

Subgroup 3B Mortgage Loans (subject to adjustment based on the actual number of

days elapsed in the related Interest Accrual Period).

 

            Subgroup 3B Interest Remittance Amount: As of any Distribution Date,

the sum, without duplication, of (i) all interest due and collected or advanced

with respect to the payments due on the Subgroup 3B Mortgage Loans on the Due

Date in the calendar month in which such Distribution Date occurs and received

by the Servicers on or prior to the Determination Date for such Distribution

Date (less the Servicing Fees for such Mortgage Loans, amounts available for

reimbursement of Advances pursuant to this Agreement and expenses and

indemnities reimbursable pursuant to this Agreement) or in the case of any

Monthly Covered Amount, the related Remittance Date, (ii) all Compensating

Interest paid by the Servicers for such Distribution Date with respect to the

Subgroup 3B Mortgage Loans, (iii) the portion of any payment in connection with

any Principal Prepayment, substitution, Repurchase Price, Insurance Proceeds or

net Liquidation Proceeds relating to interest with respect to such Mortgage

Loans received during the prior calendar month, (iv) on the Distribution Date on

which the Subgroup 3B Mortgage Loans and related REO Property are sold at

auction in accordance with Section 10.01 hereof, that portion of the Termination

Price in respect of interest and (v) any Reimbursement Amount relating to the

Subgroup 3B Mortgage Loans received during the prior calendar month.

 

            Subgroup 3B Mortgage Loan: Each Mortgage Loan listed on Exhibit D-5

hereto.

 

            Subgroup 3B Principal Percentage: With respect to any Distribution

Date and Subgroup 3B, the percentage equivalent of a fraction, the numerator of

which is the portion of the Group 3 Principal Remittance Amount for such

Distribution Date allocable to the Subgroup 3B Mortgage Loans and the

denominator of which is the Group 3 Principal Remittance Amount for such

Distribution Date.

 

            Subgroup Subordinate Amount: With respect to any Distribution Date

and any Loan Subgroup, the excess of the aggregate Stated Principal Balance of

the Mortgage Loans in such Loan Subgroup over the sum of the Class Certificate

Balance of the Senior Certificates of the Related Subgroup and the Component

Balance of the Component of the Related Subgroup immediately prior to such date.

 

            Subordinate Certificates: The Class CB Certificates, the Class M

Certificates, the Class 3-B Certificates, the Class 3-CE Certificates and the

Class 3-P Certificates.

 

            Subordinate Percentage: As of any Distribution Date and Loan Group,

100% minus the Senior Percentage for such Loan Group for such Distribution Date.

 

            Subordinate Prepayment Percentage: As to any Distribution Date and

Loan Group, 100% minus the Senior Prepayment Percentage for such Loan Group and

such Distribution Date.

 

            Subordinate Principal Distribution Amount: With respect to any

Distribution Date and Shifting Interest Loan Group, an amount equal to the sum

of (i) the Subordinate Percentage for such Loan Group of the amounts described

in clauses (i)(a) through (d) of the definition of "Principal Amount" for such

Distribution Date and Loan Group and (ii) the Subordinate Prepayment Percentage

of the amounts described in clauses (i)(e) and (f) and the amount described in

clause (ii) of the definition of "Principal Amount" for such Distribution Date

and Loan Group.

 

            Subservicer: Any Person with which a Servicer has entered into a

Subservicing Agreement and which satisfies the requirements set forth therein.

 

            Subservicing Agreement: Any subservicing agreement (which, in the

event the Subservicer is an affiliate of a Servicer, need not be in writing)

between a Servicer and any Subservicer relating to servicing and/or

administration of certain Mortgage Loans as provided in Section 3.02.

 

            Substitute Mortgage Loan: A Mortgage Loan substituted for a

Defective Mortgage Loan which must, on the date of such substitution (i) have a

Stated Principal Balance, after deduction of the principal portion of the

Monthly Payment due in the month of substitution, not in excess of the Stated

Principal Balance of the Defective Mortgage Loan; (ii) have a Net Mortgage

Interest Rate not less than and not more than 2% greater than that of the

Defective Mortgage Loan; (iii) be of the same type as the Defective Mortgage

Loan; (iv) have a Loan-to-Value Ratio not higher than that of the Defective

Mortgage Loan; (v) have a Gross Margin not less than that of the Defective

Mortgage Loan; (vi) have a credit grade not lower in quality than that of the

Defective Mortgage Loan; (vii) have a Periodic Cap and Rate Ceiling equal to

that of the Defective Mortgage Loan; (viii) have the same Index and frequency of

Mortgage Interest Rate Adjustment as the Defective Mortgage Loan; (ix) have a

remaining term to maturity not greater than (and not more than one year less

than) that of the Defective Mortgage Loan; and (x) comply with each Mortgage

Loan representation and warranty set forth in the applicable Servicing

Agreement, the Mortgage Loan Purchase Agreement and this Agreement relating to

the Defective Mortgage Loan. More than one Substitute Mortgage Loan may be

substituted for a Defective Mortgage Loan if such Substitute Mortgage Loans meet

the foregoing attributes in the aggregate.

 

            Substitution Adjustment Amount: As defined in Section 2.02.

 

            Targeted Overcollateralization Amount: As of any Distribution Date,

(x) prior to the Stepdown Date, 0.70% of the Cut-off Date Pool Principal Balance

of the Group 3 Mortgage Loans and (y) on and after the Stepdown Date, (i) if a

Trigger Event has not occurred, the greater of (A) 1.40% of the aggregate Stated

Principal Balance of the Group 3 Mortgage Loans as of Due Date in the month of

such Distribution Date and (B) 0.50% of the Cut-off Date Pool Principal Balance

for the Group 3 Mortgage Loans and (ii) if a Trigger Event has occurred, the

Targeted Overcollateralization Amount for the immediately preceding Distribution

Date.

 

            Tax Matters Person: Any person designated as "tax matters person" in

accordance with Section 5.06 and the manner provided under Treasury Regulations

Section 1.860F-4(d) and Treasury Regulations Section 301.6231(a)(7)-1.

 

            Telerate Page 3750: The display page currently so designated on the

Moneyline Telerate Service (or such other page as may replace the Telerate Page

3750 page on that service for the purpose of displaying London interbank offered

rates of major banks).

 

            Termination Date: As defined in Section 10.01 hereof.

 

            Termination Price: As defined in Section 10.01 hereof.

 

            Total Covered Amount: As defined in the Mortgage Loan Purchase

Agreement.

 

            Trigger Event: With respect to any Distribution Date, if (i) the

three-month rolling average of 60+ Day Delinquent Loans equals or exceeds 40% of

the Senior Enhancement Percentage or (ii) the aggregate amount of Realized

Losses incurred on the Group 3 Mortgage Loans since the Cut-off Date through the

Due Date in the month of such Distribution Date (reduced by the aggregate amount

of Recoveries received since the Cut-off Date through the Due Date in the month

of such Distribution Date on the Group 3 Mortgage Loans) divided by the Cut-off

Date Pool Principal Balance for Loan Group 3 exceeds the applicable percentages

set forth below with respect to such Distribution Date:

 

      Distribution Date Occurring In             Percentage

      ------------------------------             ----------

      April 2008 through March 2009                 0.95%

      April 2009 through March 2010                 1.45%

       April 2010 through March 2011                 1.85%

      April 2011 and thereafter                     1.90%

 

            Treasury Regulations: The final and temporary regulations

promulgated under the Code by the U.S. Department of the Treasury.

 

             Trust: The trust created by this Agreement, which shall be named

"Banc of America Funding 2005-B Trust."

 

            Trust Estate: The segregated pool of assets subject hereto,

constituting the primary trust created hereby and to be administered hereunder,

with respect to a portion of which four REMIC elections are to be made, such

entire Trust Estate consisting of: (i) such Mortgage Loans as from time to time

are subject to this Agreement, together with the Mortgage Files relating

thereto, and together with all collections thereon and proceeds thereof, (ii)

any REO Property, together with all collections thereon and proceeds thereof,

(iii) the Trustee's rights with respect to the Mortgage Loans under all

insurance policies required to be maintained pursuant to this Agreement and any

proceeds thereof, (iv) the Depositor's rights under the Servicing Agreements and

the Mortgage Loan Purchase Agreement (including any security interest created

thereby), (v) the Trustee's rights under the Yield Maintenance Agreements, (vi)

the right to receive any BPP Mortgage Loan Payment and (vii) the Servicer

Custodial Accounts, the Distribution Account and the Reserve Account and such

assets that are deposited therein from time to time and any investments thereof,

together with any and all income, proceeds and payments with respect thereto.

 

            Trustee: Wells Fargo Bank, N.A., and its successors-in-interest and,

if a successor trustee is appointed hereunder, such successor, as trustee.

 

            Uncertificated Accrued Interest: With respect to each Uncertificated

Group 3 Lower-Tier Interest on each Distribution Date, an amount equal to one

month's interest at the applicable Group 3 Lower-Tier Rate on the Uncertificated

Principal Balance of such Regular Interest. In each case, Uncertificated Accrued

Interest will be reduced by any Prepayment Interest Shortfalls and Relief Act

Interest Shortfalls (allocated to such Regular Interests based on their

respective entitlements to interest irrespective of any Prepayment Interest

Shortfalls and Relief Act Interest Shortfalls for such Distribution Date).

 

            Uncertificated Group 3 Lower-Tier Interest: A regular interest in

the Group 3 Lower-Tier REMIC which is held as an asset of the Group 3 Upper-Tier

REMIC and is entitled to monthly distributions as provided in Section 5.11

hereof. Any of the Regular Interest LT1AA, Regular Interest LT1A1, Regular

Interest LT1A1A, Regular Interest LT1A1B, Regular Interest LT1A2, Regular

Interest LT1A2A, Regular Interest LT1A2B, Regular Interest LT1A3A, Regular

Interest LT1A3B, Regular Interest LT1M1, Regular Interest LT1M2, Regular

Interest LT1B1, Regular Interest LT1B2, Regular Interest LT1B3, Regular Interest

LT1GRP, Regular Interest LT1SUB, Regular Interest LT1XX, Regular Interest LT1ZZ,

Regular Interest LT2GRP and Regular Interest LT2SUB are Uncertificated Group 3

Lower-Tier Interests. The Uncertificated Group 3 Lower-Tier Interests shall have

the following original Uncertificated Principal Balances as of the Closing Date:

 

 

                  Designation    Uncertificated Principal Balance

                 -----------    --------------------------------

                 LT1AA                           $379,720,243.70

                 LT1A1                             $1,395,345.00

                  LT1A1A                              $590,000.00

                 LT1A1B                              $160,000.00

                 LT1A3A                              $238,375.00

                 LT1A2                               $536,745.00

                  LT1A2A                              $390,000.00

                 LT1A2B                              $110,000.00

                 LT1A3B                              $115,195.00

                 LT1M1                               $108,490.00

                  LT1M2                                $92,990.00

                 LT1B1                                $63,935.00

                 LT1B2                                $19,375.00

                 LT1B3                                $27,120.00

                  LT1ZZ                             $3,901,822.73

                 LT1SUB                               $28,171.47

                 LT1GRP                               $52,245.87

                 LT2SUB                                $2,209.26

                  LT2GRP                               $25,248.06

                 LT1XX                           $387,361,761.78

 

            Uncertificated Lower-Tier Interest: A regular interest in the

Lower-Tier REMIC which is held as an asset of the Upper-Tier REMIC and is

entitled to monthly distributions as provided in Section 5.11 hereof. Any of the

Class 1-L Interest, Class 1-LS Interest, Class 2-L Interest and Class 2-LS

Interest are Uncertificated Lower-Tier Interests.

 

            Uncertificated Principal Balance: The amount of any Uncertificated

Group 3 Lower-Tier Interest outstanding as of any date of determination. As of

the Closing Date, the Uncertificated Balance of each Uncertificated Group 3

Lower-Tier Interest shall equal the amount set forth in the definition of

"Uncertificated Group 3 Lower-Tier Interest" hereto as its initial

uncertificated balance. On each Distribution Date, the Uncertificated Principal

Balance of each Uncertificated Group 3 Lower-Tier Regular Interest shall be

reduced by all distributions of principal made on such Uncertificated Group 3

Lower-Tier Regular Interest on such Distribution Date pursuant to Section 5.11

and, if and to the extent necessary and appropriate, shall be further reduced on

such Distribution Date by Realized Losses as provided in Section 5.11(c) and

shall be increased by all Recoveries allocated to such Group 3 Lower-Tier

Regular Interest on such Distribution Date pursuant to Section 5.11(d). The

Uncertificated Balance of Regular Interest LT1ZZ shall be increased by interest

deferrals as provided in Section 5.11(b)(i). The Uncertificated Principal

Balance of each Uncertificated Group 3 Lower-Tier Regular Interest shall never

be less than zero.

 

            Unpaid Realized Loss Amount: For the Class 3-A-3A Component, the

Class 3-A-3B Component, the Class 3-M-1 Certificates, the Class 3-M-2

Certificates, the Class 3-B-1 Certificates, the Class 3-B-2 Certificates and the

Class 3-B-3 Certificates and as to any Distribution Date, the excess of (x) the

aggregate Applied Realized Loss Amounts, Class 3-A-3A Applied Realized Loss

Amounts or Class 3-A-3B Applied Realized Loss Amounts allocated to such Class or

Component for all prior Distribution Dates over (y) the sum of (a) the

cumulative amount of any Recoveries allocated to such Class or Component and (b)

the aggregate Realized Loss Amortization Amounts with respect to such Class or

Component for all prior Distribution Dates.

 

            Unscheduled Principal Payments: As to any Distribution Date and Loan

Group (other than Loan Group 3), the sum of (i) with respect to each Mortgage

Loan in such Loan Group that became a Liquidated Mortgage Loan during the

calendar month preceding the month of such Distribution Date, the amount of

Liquidation Proceeds (excluding Excess Proceeds) allocable to principal received

by a Servicer with respect to such Mortgage Loan during the calendar month

preceding the month of such Distribution Date and (b) all Principal Prepayments

on the Mortgage Loans in such Loan Group received by a Servicer during the

calendar month preceding the month of such Distribution Date.

 

            Upper-Tier Certificate Sub-Account: The sub-account of the

Distribution Account designated by the Trustee pursuant to Section 3.09(e).

 

            Upper-Tier REMIC: As defined in the Preliminary Statement, the

assets of which consist of the Uncertificated Lower-Tier Interests and such

amounts as shall from time to time be deemed to be held in the Upper-Tier

Certificate Sub-Account.

 

            U.S. Person: A citizen or resident of the United States, a

corporation or partnership (unless, in the case of a partnership, Treasury

Regulations are adopted that provide otherwise) created or organized in or under

the laws of the United States, any state thereof or the District of Columbia,

including an entity treated as a corporation or partnership for federal income

tax purposes, an estate whose income is subject to United States federal income

tax regardless of its source, or a trust if a court within the United States is

able to exercise primary supervision over the administration of such trust, and

one or more such U.S. Persons have the authority to control all substantial

decisions of such trust (or, to the extent provided in applicable Treasury

Regulations, certain trusts in existence on August 20, 1996 which are eligible

to elect to be treated as U.S. Persons).

 

            Voting Rights: The portion of the voting rights of all of the

Certificates which is allocated to any Certificate. As of any date of

determination, (a) 1% of all Voting Rights shall be allocated to the Holders of

the Class 3-CE Certificates, (b) 1% of all Voting Rights shall be allocated to

the Holders of the Class 3-P Certificates, (c) 1% of all Voting Rights shall be

allocated to the Holder of the Residual Certificate and (d) the remaining Voting

Rights shall be allocated among Holders of the remaining Classes of Certificates

in proportion to the Certificate Balances of their respective Certificates on

such date.

 

            Yield Maintenance Agreements: Any of the eleven yield maintenance

agreements between the Trustee, on behalf of the Trust, and the Yield

Maintenance Agreement Provider substantially in the form attached hereto as

Exhibit P. The Yield Maintenance Agreements shall not be an asset of any REMIC

formed under this Agreement.

 

            Yield Maintenance Agreement Payment: For each Distribution Date from

May 2005 through the Distribution Date in May 2010, the amount the Yield

Maintenance Agreement Provider is obligated to pay to the Trustee two Business

Days prior to such Distribution Date for deposit into the Reserve Account equal

to the product of (a) the excess of the lesser of (i) One-Month LIBOR and (ii)

11.00% over the applicable strike rate for such Distribution Date, as set forth

on the applicable table in Exhibit P hereto, (b) the cap notional amount for

such Distribution Date as set forth on the table in Exhibit P hereto and (c) a

fraction, the numerator of which is the actual number of days elapsed since the

previous Distribution Date to but excluding the current Distribution Date and

the denominator of which is 360.

 

            Yield Maintenance Agreement Provider: Bank of America, National

Association and any successor thereto.

 

            Section 1.02 Calculations. All dollar amounts calculated hereunder

shall be rounded to the nearest penny with one-half of one penny being rounded

down.

 

            Section 1.03 Rights of the NIMS Insurer. Each of the rights of the

NIMS Insurer set forth in this Agreement shall exist so long as (i) the NIMS

Insurer has undertaken to guarantee certain payments of notes issued pursuant to

the Indenture and (ii) any series of notes issued pursuant to the Indenture

remains outstanding or the NIMS Insurer is owed amounts in respect of its

guarantee of payment on such notes; provided, however, the NIMS Insurer shall

not have any rights hereunder (except pursuant to Section 11.01 in the case of

clause (ii) below) during the period of time, if any, that (i) the NIMS Insurer

has not undertaken to guarantee certain payments of notes issued pursuant to the

Indenture or (ii) any default has occurred and is continuing under the insurance

policy issued by the NIMS Insurer with respect to such notes.

 

 

                                   ARTICLE II

 

                           CONVEYANCE OF MORTGAGE LOANS

                        ORIGINAL ISSUANCE OF CERTIFICATES

 

            Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,

concurrently with the execution and delivery hereof, hereby sells, transfers,

assigns, sets over and otherwise conveys to the Trustee on behalf of the Trust

for the benefit of the Certificateholders, without recourse, all the right,

title and interest of the Depositor in and to the Mortgage Loans, including all

interest and principal received on or with respect to the Mortgage Loans (other

than payments of principal and interest due and payable on the Mortgage Loans on

or before the Cut-off Date), the Depositor's rights under the Mortgage Loan

Purchase Agreement, including the rights of the Depositor as assignee of the

Seller with respect to the Seller's rights under the Servicing Agreements. The

foregoing sale, transfer, assignment and set over does not and is not intended

to result in a creation of an assumption by the Trustee of any obligation of the

Depositor or any other Person in connection with the Mortgage Loans or any

agreement or instrument relating thereto, except as specifically set forth

herein. In addition, the Depositor, concurrently with the execution and delivery

hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the

Trustee on behalf of the Trust for the benefit of the Certificateholders,

without recourse, the Depositor's rights to receive any BPP Mortgage Loan

Payment.

 

            (b) In connection with such transfer and assignment, the Depositor

has delivered or caused to be delivered to the Trustee, or the Custodian on

behalf of the Trustee, for the benefit of the Certificateholders, the following

documents or instruments with respect to each Mortgage Loan so assigned:

 

            (i) the original Mortgage Note, endorsed by manual or facsimile

      signature in the following form: "Pay to the order of Wells Fargo Bank,

      N.A., as trustee for holders of Banc of America Funding Corporation

      Mortgage Pass-Through Certificates, Series 2005-B, without recourse," with

      all necessary intervening endorsements showing a complete chain of

      endorsement from the originator to the Trustee (each such endorsement

      being sufficient to transfer all right, title and interest of the party so

      endorsing, as noteholder or assignee thereof, in and to that Mortgage

      Note) and, in the case of any Mortgage Loan originated in the State of New

      York documented by a NYCEMA, the NYCEMA, the new Mortgage Note, if

      applicable, the consolidated Mortgage Note and the consolidated Mortgage;

 

            (ii) except as provided below, the original recorded Mortgage with

      evidence of a recording thereon, or if any such Mortgage has not been

      returned from the applicable recording office or has been lost, or if such

      public recording office retains the original recorded Mortgage, a copy of

      such Mortgage certified by the applicable Servicer (which may be part of a

       blanket certification) as being a true and correct copy of the Mortgage;

 

            (iii) subject to the provisos at the end of this paragraph, a duly

      executed Assignment of Mortgage to "Wells Fargo Bank, N.A., as trustee for

      the holders of Banc of America Funding Corporation Mortgage Pass-Through

      Certificates, Series 2005-B" (which may be included in a blanket

      assignment or assignments), together with, except as provided below,

      originals of all interim recorded assignments of such mortgage or a copy

      of such interim assignment certified by the applicable Servicer (which may

      be part of a blanket certification) as being a true and complete copy of

      the original recorded intervening assignments of Mortgage (each such

      assignment, when duly and validly completed, to be in recordable form and

      sufficient to effect the assignment of and transfer to the assignee

      thereof, under the Mortgage to which the assignment relates); provided

      that, if the related Mortgage has not been returned from the applicable

      public recording office, such Assignment of Mortgage may exclude the

      information to be provided by the recording office; and provided, further,

      if the related Mortgage has been recorded in the name of Mortgage

      Electronic Registration Systems, Inc. ("MERS") or its designee, no

      Assignment of Mortgage in favor of the Trustee will be required to be

      prepared or delivered and instead, the applicable Servicer shall take all

      actions as are necessary to cause the Trust to be shown as the owner of

      the related Mortgage Loan on the records of MERS for purposes of the

      system of recording transfers of beneficial ownership of mortgages

      maintained by MERS;

 

            (iv) the originals of all assumption, modification, consolidation or

      extension agreements, if any, with evidence of recording thereon, if any;

 

            (v) any of (A) the original or duplicate original mortgagee title

      insurance policy and all riders thereto; (B) a title search showing no

      lien (other than standard exceptions) on the Mortgaged Property senior to

      the lien of the Mortgage or (C) an opinion of counsel of the type

      customarily rendered in the applicable jurisdiction in lieu of a title

      insurance policy;

 

            (vi) the original of any guarantee executed in connection with the

      Mortgage Note;

 

            (vii) for each Mortgage Loan, if any, which is secured by a

      residential long-term lease, a copy of the lease with evidence of

      recording indicated thereon, or, if the lease is in the process of being

      recorded, a photocopy of the lease, certified by an officer of the

      respective prior owner of such Mortgage Loan or by the applicable title

      insurance company, closing/settlement/escrow agent or company or closing

      attorney to be a true and correct copy of the lease transmitted for

      recordation;

 

            (viii) the original of any security agreement, chattel mortgage or

      equivalent document executed in connection with the Mortgage; and

 

            (ix) for each Mortgage Loan secured by Co-op Shares, the originals

      of the following documents or instruments:

 

                  (A) The stock certificate;

 

                  (B) The stock power executed in blank;

 

                  (C) The executed proprietary lease;

 

                  (D) The executed recognition agreement;

 

                  (E) The executed assignment of recognition agreement, if any;

 

                  (F) The executed UCC-1 financing statement with evidence of

            recording thereon; and

 

                  (G) Executed UCC-3 financing statements or other appropriate

            UCC financing statements required by state law, evidencing a

            complete and unbroken line from the mortgagee to the Trustee with

            evidence of recording thereon (or in a form suitable for

            recordation).

 

provided, however, that on the Closing Date, with respect to item (iii), if an

Assignment of Mortgage is required to be recorded as set forth below, the

Depositor has delivered to the Trustee, or the Custodian on behalf of the

Trustee, a copy of such Assignment of Mortgage in blank rather than in the name

of the Trustee and has caused the applicable Servicer to retain the completed

Assignment of Mortgage for recording as described below, unless such Mortgage

has been recorded in the name of MERS or its designee. In addition, if the

Depositor is unable to deliver or cause the delivery of any original Mortgage

Note due to the loss of such original Mortgage Note, the Depositor may deliver a

copy of such Mortgage Note, together with a lost note affidavit, and shall

thereby be deemed to have satisfied the document delivery requirements of this

Section 2.01(b). As set forth on Exhibit J attached hereto is a list of all

states where recordation is required by any Rating Agency to obtain the initial

ratings of the Certificates. The Trustee may rely and shall be protected in

relying upon the information contained in such Exhibit J.

 

            If in connection with any Mortgage Loans, the Depositor cannot

deliver (A) the Mortgage, (B) all interim recorded assignments, (C) all

assumption, modification, consolidation or extension agreements, if any, or (D)

the lender's title policy, if any (together with all riders thereto), satisfying

the requirements of clause (ii), (iii), (iv) or (v) above, respectively,

concurrently with the execution and delivery hereof because such document or

documents have not been returned from the applicable public recording office in

the case of clause (ii), (iii) or (iv) above, or because the title policy, if

any, has not been delivered to any of the related Servicer, the Seller or the

Depositor by the applicable title insurer in the case of clause (v) above, the

Depositor shall promptly deliver or cause to be delivered to the Trustee, or the

Custodian on behalf of the Trustee, in the case of clause (ii), (iii) or (iv)

above, such Mortgage, such interim assignment or such assumption, modification,

consolidation or extension agreement, as the case may be, with evidence of

recording indicated thereon upon receipt thereof from the public recording

office, but in no event shall any such delivery of any such documents or

instruments be made later than one year following the Closing Date, unless, in

the case of clause (ii), (iii) or (iv) above, there has been a continuing delay

at the applicable recording office or, in the case of clause (v) above, there

has been a continuing delay at the applicable insurer and the Depositor has

delivered the Officer's Certificate to such effect to the Trustee. The Depositor

shall forward or cause to be forwarded to the Trustee, or the Custodian on

behalf of the Trustee, (1) from time to time additional original documents

evidencing an assumption or modification of a Mortgage Loan and (2) any other

documents required to be delivered by the Depositor or the applicable Servicer

to the Trustee. In the event that the original Mortgage is not delivered and in

connection with the payment in full of the related Mortgage Loan the public

recording office requires the presentation of a "lost instruments affidavit and

indemnity" or any equivalent document, because only a copy of the Mortgage can

be delivered with the instrument of satisfaction or reconveyance, the Depositor

shall prepare, execute and deliver or cause to be prepared, executed and

delivered, on behalf of the Trust, such a document to the public recording

office.

 

            As promptly as practicable subsequent to such transfer and

assignment, the applicable Servicer shall (except for any Mortgage which has

been recorded in the name of MERS or its designee) (I) cause each Assignment of

Mortgage to be in proper form for recording in the appropriate public office for

real property records within 30 days of the Closing Date and (II) at the

Depositor's expense, cause to be delivered for recording in the appropriate

public office for real property records the Assignments of the Mortgages to the

Trustee, except that, with respect to any Assignment of a Mortgage as to which

the related Servicer has not received the information required to prepare such

assignment in recordable form, such Servicer's obligation to do so and to

deliver the same for such recording shall be as soon as practicable after

receipt of such information and in any event within 30 days after the receipt

thereof; provided, however, no recording of an Assignment of Mortgage will be

required in a state if either (i) the Depositor furnishes to the Trustee an

unqualified Opinion of Counsel reasonably acceptable to the Trustee to the

effect that recordation of such assignment is not necessary under applicable

state law to preserve the Trustee's interest in the related Mortgage Loan

against the claim of any subsequent transferee of such Mortgage Loan or any

successor to, or creditor of, the Depositor or the originator of such Mortgage

Loan or (ii) the recordation of an Assignment of Mortgage in such state is not

required by any Rating Agency in order to obtain the initial ratings on the

Certificates on the Closing Date.

 

            In the case of Mortgage Loans that have been prepaid in full as of

the Closing Date, the Depositor, in lieu of delivering the above documents to

the Trustee, or the Custodian on behalf of the Trustee, will cause the

applicable Servicer to deposit in the applicable Servicer Custodial Account the

portion of such payment that is required to be deposited in such Servicer

Custodial Account pursuant to Section 3.09.

 

            Section 2.02 Acceptance by the Trustee of the Mortgage Loans.

Subject to the provisions of the following paragraph, the Trustee declares that

it, or the Custodian as its agent, will hold the documents referred to in

Section 2.01 and the other documents delivered to it constituting the Mortgage

Files, and that it will hold such other assets as are included in the Trust

Estate delivered to it, in trust for the exclusive use and benefit of all

present and future Certificateholders. Upon execution and delivery of this

document, the Trustee shall deliver, or shall cause the Custodian to deliver, to

the Depositor, the Trustee and the NIMS Insurer a certification in the form of

Exhibit K hereto (the "Initial Certification") to the effect that, except as may

be specified in a list of exceptions attached thereto, it has received the

original Mortgage Note relating to each of the Mortgage Loans listed on the

Mortgage Loan Schedule.

 

            Within 90 days after the execution and delivery of this Agreement,

the Trustee shall review, or shall cause the Custodian to review, the Mortgage

Files in its possession, and shall deliver to the Depositor, the Trustee and the

NIMS Insurer a certification in the form of Exhibit L hereto (the "Final

Certification") to the effect that, as to each Mortgage Loan listed in the

Mortgage Loan Schedule, except as may be specified in a list of exceptions

attached to such Final Certification, such Mortgage File contains all of the

items required to be delivered pursuant to Section 2.01(b).

 

            If, in the course of such review, the Trustee or the Custodian finds

any document constituting a part of a Mortgage File which does not meet the

requirements of Section 2.01 or is omitted from such Mortgage File or if the

Depositor, a Servicer, the Trustee or the NIMS Insurer discovers a breach by a

Servicer or the Seller of any representation, warranty or covenant under the

Servicing Agreements or the Mortgage Loan Purchase Agreement in respect of any

Mortgage Loan and such breach materially adversely affects the interest of the

Certificateholders in the related Mortgage Loan (provided that any such breach

that causes the Mortgage Loan not to be a "qualified mortgage" within the

meaning of Section 860G(a)(3) of the code shall be deemed to materially and

adversely affect the interests of the Certificateholders), then such party shall

promptly so notify the Seller or such Servicer, the Trustee, the NIMS Insurer

and the Depositor of such failure to meet the requirements of Section 2.01 or of

such breach and request that the Depositor, the applicable Servicer or the

Seller, as the case may be, deliver such missing documentation or cure such

defect or breach within 90 days of its discovery or its receipt of notice of any

such failure to meet the requirements of Section 2.01 or of such breach. If the

Depositor, the Seller or the applicable Servicer, as the case may be, does not

deliver such missing document or cure such defect or breach in all material

respects during such period, the Trustee shall enforce the obligation of the

Depositor, the applicable Servicer or the Seller, as the case may be, under this

Agreement, the applicable Servicing Agreement or the Mortgage Loan Purchase

Agreement, as applicable, and cause the Depositor, the applicable Servicer or

the Seller to either (a) in the case of the Seller only, substitute for the

related Mortgage Loan a Substitute Mortgage Loan, which substitution shall be

accomplished in the manner and subject to the conditions set forth below or (b)

purchase such Mortgage Loan from the Trust at the Repurchase Price for such

Mortgage Loan; provided, however, that in no event shall such a substitution

occur more than two years from the Closing Date; provided, further, that such

substitution or repurchase must occur within 90 days of when such defect was

discovered if such defect will cause the Mortgage Loan not to be a "qualified

mortgage" within the meaning of Section 860G(a)(3) of the Code.

 

            In performing any such review, the Trustee or the Custodian may

conclusively rely on the purported genuineness of any such document and any

signature thereon. It is understood that the scope of the Trustee's or the

Custodian's review of the Mortgage Files is limited solely to confirming that

the documents listed in Section 2.01 have been received and further confirming

that any and all documents delivered pursuant to Section 2.01 appear on their

face to have been executed and relate to the Mortgage Loans identified in the

Mortgage Loan Schedule based solely upon the review of items (i) and (xi) in the

definition of Mortgage Loan Schedule. Neither the Trustee nor the Custodian

shall have any responsibility for determining whether any document is valid and

binding, whether the text of any assignment or endorsement is in proper or

recordable form, whether any document has been recorded in accordance with the

requirements of any applicable jurisdiction, or whether a blanket assignment is

permitted in any applicable jurisdiction.

 

            In the event of a discovery of a breach of any representation or

warranty of a Servicer or the Seller, the Trustee shall enforce the rights of

the Trust under the Servicing Agreements and the Mortgage Loan Purchase

Agreement for the benefit of the Certificateholders. In the event of a breach of

the representations or warranties with respect to the Mortgage Loans set forth

in a Servicing Agreement, the Trustee shall enforce the right of the Trust to be

indemnified for such breach of representation or warranty. In addition, if a

breach of a representation set forth in clauses (k) and (o) of paragraph 3 or

clauses (f) and (oo) of paragraph 4 of the Mortgage Loan Purchase Agreement

occurs as a result of a violation of an applicable predatory or abusive lending

law, the Trustee shall enforce the right of the Trust to reimbursement by the

Seller for all costs or damages incurred by the Trust as a result of the

violation of such law (such amount, the "Reimbursement Amount"), but, in the

case of a breach of a representation set forth in clauses (k) and (o) of

paragraph 3, only to the extent the applicable Servicer does not so reimburse

the Trust. It is understood and agreed that, except for any indemnification

provided in the Servicing Agreements and the payment of any Reimbursement

Amount, the obligation of a Servicer or the Seller to cure or to repurchase (or

substitute, in the case of the Seller) any Mortgage Loan as to which a document

is missing, a material defect in a constituent document exists or as to which

such a breach has occurred and is continuing shall constitute the sole remedies

against a Servicer or the Seller in respect of such omission, defect or breach

available to the Trustee on behalf of the Certificateholders.

 

            It is understood and agreed that the representations and warranties

set forth in the Mortgage Loan Purchase Agreement shall survive delivery of the

Mortgage Files to the Trustee, or the Custodian on behalf of the Trustee, and

shall inure to the benefit of the Certificateholders notwithstanding any

restrictive or qualified endorsement or assignment. With respect to the

representations and warranties set forth in the Mortgage Loan Purchase Agreement

that are made to the best of the Seller's knowledge or as to which the Seller

had no knowledge, if it is discovered by the Depositor, the NIMS Insurer or the

Trustee that the substance of such representation or warranty is inaccurate and

such inaccuracy materially and adversely affects the interest of the

Certificateholders in the related Mortgage Loan then, notwithstanding the

Seller's lack of knowledge with respect to the substance of such representation

or warranty being inaccurate at the time the representation or warranty was

made, such inaccuracy shall be deemed a breach of the applicable representation

or warranty.

 

            The representations and warranties of each Servicer with respect to

the applicable Mortgage Loans in the related Servicing Agreement, which have

been assigned to the Trustee hereunder, were made as of the date specified in

such Servicing Agreement. To the extent that any fact, condition or event with

respect to a Mortgage Loan constitutes a breach of both (i) a representation or

warranty of a Servicer under the related Servicing Agreement and (ii) a

representation or warranty of the Seller under the Mortgage Loan Purchase

Agreement, the only right or remedy of the Trustee or of any Certificateholder

shall be the Trustee's right to enforce the obligations of the applicable

Servicer under any applicable representation or warranty made by it. The Trustee

acknowledges that the Seller shall have no obligation or liability with respect

to any breach of a representation or warranty made by it with respect to the

Mortgage Loans if the fact, condition or event constituting such breach also

constitutes a breach of a representation or warranty made by the applicable

Servicer in the applicable Servicing Agreement, without regard to whether such

Servicer fulfills its contractual obligations in respect of such representation

or warranty. The Trustee further acknowledges that the Depositor shall have no

obligation or liability with respect to any breach of any representation or

warranty with respect to the Mortgage Loans (except as set forth in Section

2.04) under any circumstances.

 

             With respect to each Substitute Mortgage Loan, the Seller shall

deliver to the Trustee, or the Custodian on behalf of the Trustee, for the

benefit of the Certificateholders, the Mortgage Note, the Mortgage, the related

Assignment of Mortgage (except for any Mortgage which has been recorded in the

name of MERS or its designee), and such other documents and agreements as are

otherwise required by Section 2.01, with the Mortgage Note endorsed and the

Mortgage assigned as required by Section 2.01. No substitution is permitted to

be made in any calendar month after the Determination Date for such month.

Monthly Payments due with respect to any such Substitute Mortgage Loan in the

month of substitution shall not be part of the Trust Estate. For the month of

substitution, distributions to Certificateholders will include the Monthly

Payment due for such month on any Defective Mortgage Loan for which the Seller

has substituted a Substitute Mortgage Loan.

 

            The applicable Servicer shall amend the Mortgage Loan Schedule for

the benefit of the Certificateholders to reflect the removal of each Mortgage

Loan that has become a Defective Mortgage Loan and the substitution of the

Substitute Mortgage Loan or Loans and such Servicer shall deliver the amended

Mortgage Loan Schedule to the NIMS Insurer, the Trustee and the Custodian. Upon

such substitution, each Substitute Mortgage Loan shall be subject to the terms

of this Agreement in all respects, and the applicable Servicer (in the case of a

GreenPoint Mortgage Loan or a National City Mortgage Loan) or the Seller (in the

case of a BANA Mortgage Loan) shall be deemed to have made to the Trustee with

respect to such Substitute Mortgage Loan, as of the date of substitution, the

representations and warranties made pursuant to the applicable Servicing

Agreement or paragraph 4 of the Mortgage Loan Purchase Agreement, as the case

may be. Upon any such substitution and the remittance to the Trustee for deposit

to the Distribution Account of any required Substitution Adjustment Amount (as

described in the next paragraph) and receipt of a Request for Release, the

Trustee shall, or the Custodian on behalf of the Trustee upon receipt of written

notice from the Trustee of such deposit shall, release the Mortgage File

relating to such Defective Mortgage Loan to the Seller and shall execute and

deliver at the Seller's direction such instruments of transfer or assignment

prepared by the Seller, in each case without recourse, as shall be necessary to

vest title in the Seller, or its designee, to the Trustee's interest in any

Defective Mortgage Loan substituted for pursuant to this Section 2.02.

 

            For any month in which the Seller substitutes one or more Substitute

Mortgage Loans for one or more Defective Mortgage Loans, the amount (if any) by

which the aggregate principal balance of all such Substitute Mortgage Loans in a

Loan Group as of the date of substitution is less than the aggregate Stated

Principal Balance of all such Defective Mortgage Loans in a Loan Group (after

application of the principal portion of the Monthly Payments due in the month of

substitution) (the "Substitution Adjustment Amount" for such Loan Group) plus an

amount equal to the aggregate of any unreimbursed Advances with respect to such

Defective Mortgage Loans shall be remitted to the Trustee for deposit to the

Distribution Account by the Seller on or before the Remittance Date for the

Distribution Date in the month succeeding the calendar month during which the

related Mortgage Loan is required to be purchased or replaced hereunder. The

Repurchase Price of any repurchase and the Substitution Adjustment Amount, if

any, shall be remitted to the Trustee for deposited to the Distribution Account.

 

            The Trustee, or the Custodian on behalf of the Trustee, shall retain

possession and custody of each Mortgage File in accordance with and subject to

the terms and conditions set forth herein. Each Servicer shall cause to be

promptly delivered to the Trustee, or the Custodian on behalf of the Trustee,

upon the execution or, in the case of documents requiring recording, receipt

thereof, the originals of such other documents or instruments constituting the

Mortgage File as come into such Servicer's possession from time to time.

 

            The Trustee, or the Custodian on behalf of the Trustee, shall be

under no duty or obligation (i) to inspect, review or examine any such

documents, instruments, certificates or other papers to determine that they are

genuine, enforceable, or appropriate for the represented purpose or that they

are other than what they purport to be on their face or (ii) to determine

whether any Mortgage File should include any of the documents specified in

Section 2.01(b)(iv), (vi), (vii), (viii) and (ix).

 

            The Trustee is hereby directed to execute and deliver, on behalf of

the Trust, the Yield Maintenance Agreements.

 

            Section 2.03 Representations, Warranties and Covenants of the

Servicers.

 

            (a) GreenPoint hereby makes the following representations and

warranties to the Depositor, the NIMS Insurer and the Trustee, as of the Closing

Date:

 

            (i) GreenPoint is a corporation duly organized, validly existing and

      in good standing under the laws of the State of New York and has all

      licenses necessary to carry on its business as now being conducted and is

      licensed, qualified and in good standing in each state where a Mortgaged

      Property is located if the laws of such state require licensing or

      qualification in order to conduct business of the type conducted by

      GreenPoint, and in any event GreenPoint is in compliance with the laws of

      any such state to the extent necessary to ensure the enforceability of the

      related Mortgage Loan and the servicing of such Mortgage Loan in

      accordance with the terms of this Agreement; GreenPoint has the full

      corporate power and authority to execute and deliver this Agreement and to

      perform in accordance herewith; the execution, delivery and performance of

      this Agreement (including all instruments of transfer to be delivered

      pursuant to this Agreement) by GreenPoint and the consummation of the

      transactions contemplated hereby have been duly and validly authorized;

      this Agreement evidences the valid, binding and enforceable obligation of

      GreenPoint; and all requisite corporate action has been taken by

      GreenPoint to make this Agreement valid and binding upon GreenPoint in

      accordance with its terms.

 

            (ii) The consummation of the transactions contemplated by this

      Agreement are in the ordinary course of business of GreenPoint.

 

            (iii) Neither the execution and delivery of this Agreement or the

      transactions contemplated hereby, nor the fulfillment of or compliance

      with the terms and conditions of this Agreement will conflict with or

      result in a breach of any of the terms, articles of incorporation or

      by-laws or any legal restriction or any agreement or instrument to which

      GreenPoint is now a party or by which it is bound, or constitute a default

      or result in the violation of any law, rule, regulation, order, judgment

      or decree to which GreenPoint or its property is subject, or impair the

      value of the Mortgage Loans.

 

            (iv) GreenPoint is an approved seller/servicer of conventional

      residential mortgage loans for Fannie Mae or Freddie Mac, with the

      facilities, procedures, and experienced personnel necessary for the sound

      servicing of mortgage loans of the same type as the Mortgage Loans.

      GreenPoint is a HUD approved mortgagee pursuant to Section 203 of the

      National Housing Act and is in good standing to sell mortgage loans to and

      service mortgage loans for Fannie Mae or Freddie Mac, and no event has

      occurred, including but not limited to a change in insurance coverage,

      which would make GreenPoint unable to comply with Fannie Mae or Freddie

      Mac eligibility requirements or which would require notification to either

      Fannie Mae or Freddie Mac.

 

            (v) GreenPoint does not believe, nor does it have any reason or

      cause to believe, that it cannot perform each and every covenant contained

      in this Agreement.

 

            (vi) There is no action, suit, proceeding or investigation pending

      or to its knowledge threatened against GreenPoint which, either in any one

      instance or in the aggregate, may result in any material adverse change in

      the business, operations, financial condition, properties or assets of

      GreenPoint, or in any material impairment of the right or ability of

      GreenPoint to carry on its business substantially as now conducted, or in

      any material liability on the part of GreenPoint, or which would draw into

      question the validity of this Agreement or of any action taken or to be

      contemplated herein, or which would be likely to impair materially the

      ability of GreenPoint to perform under the terms of this Agreement.

 

             (vii) No consent, approval, authorization or order of any court or

      governmental agency or body is required for the execution, delivery and

      performance by GreenPoint of or compliance by GreenPoint with this

      Agreement as evidenced by the consummation of the transactions

      contemplated by this Agreement, or if required, such approval has been

      obtained prior to the Closing Date.

 

            (viii) Neither this Agreement nor any statement, report or other

      document prepared and furnished by or on behalf of GreenPoint or to be

      prepared and furnished by or on behalf of GreenPoint pursuant to this

      Agreement or in connection with the transactions contemplated hereby

      contains any untrue material statement of fact or omits to state a

      material fact necessary to make the statements contained therein not

      misleading.

 

            (ix) There has been no material adverse change in the business,

      operations, financial condition or assets of GreenPoint since the date of

      GreenPoint's most recent financial statements.

 

            (x) GreenPoint has fully furnished, and shall continue to fully

      furnish for so long as it is servicing the GreenPoint Mortgage Loans

      hereunder, in accordance with the Fair Credit Reporting Act and its

      implementing regulations, accurate and complete information on the related

      Mortgagor credit files to Equifax, Experian and Trans Union Credit

      Information Company on a monthly basis.

 

            (b) BANA hereby makes the following representations and warranties

to the Depositor, the NIMS Insurer and the Trustee, as of the Closing Date:

 

            (i) BANA is a national banking association duly organized, validly

      existing and in good standing under the laws of the United States of

      America and has all licenses necessary to carry on its business as now

      being conducted and is licensed, qualified and in good standing in each

      state where a Mortgaged Property is located if the laws of such state

      require licensing or qualification in order to conduct business of the

      type conducted by BANA, and in any event BANA is in compliance with the

      laws of any such state to the extent necessary to ensure the

      enforceability of the related Mortgage Loan and the servicing of such

      Mortgage Loan in accordance with the terms of this Agreement; BANA has the

      full corporate power and authority to execute and deliver this Agreement

      and to perform in accordance herewith; the execution, delivery and

      performance of this Agreement (including all instruments of transfer to be

      delivered pursuant to this Agreement) by BANA and the consummation of the

      transactions contemplated hereby have been duly and validly authorized;

      this Agreement evidences the valid, binding and enforceable obligation of

      BANA; and all requisite corporate action has been taken by BANA to make

      this Agreement valid and binding upon BANA in accordance with its terms.

 

             (ii) The consummation of the transactions contemplated by this

      Agreement are in the ordinary course of business of BANA.

 

            (iii) Neither the execution and delivery of this Agreement or the

      transactions contemplated hereby, nor the fulfillment of or compliance

      with the terms and conditions of this Agreement will conflict with or

      result in a breach of any of the terms, charter or by-laws or any legal

      restriction or any agreement or instrument to which BANA is now a party or

      by which it is bound, or constitute a default or result in the violation

      of any law, rule, regulation, order, judgment or decree to which BANA or

      its property is subject, or impair the value of the Mortgage Loans.

 

            (iv) BANA is an approved seller/servicer of conventional residential

      mortgage loans for Fannie Mae or Freddie Mac, with the facilities,

      procedures, and experienced personnel necessary for the sound servicing of

      mortgage loans of the same type as the Mortgage Loans. BANA is a HUD

      approved mortgagee pursuant to Section 203 of the National Housing Act and

      is in good standing to sell mortgage loans to and service mortgage loans

      for Fannie Mae or Freddie Mac, and no event has occurred, including but

      not limited to a change in insurance coverage, which would make BANA

      unable to comply with Fannie Mae or Freddie Mac eligibility requirements

      or which would require notification to either Fannie Mae or Freddie Mac.

 

            (v) BANA does not believe, nor does it have any reason or cause to

      believe, that it cannot perform each and every covenant contained in this

      Agreement.

 

            (vi) There is no action, suit, proceeding or investigation pending

      or to its knowledge threatened against BANA which, either in any one

      instance or in the aggregate, may result in any material adverse change in

      the business, operations, financial condition, properties or assets of

      BANA, or in any material impairment of the right or ability of BANA to

      carry on its business substantially as now conducted, or in any material

      liability on the part of BANA, or which would draw into question the

      validity of this Agreement or of any action taken or to be contemplated

      herein, or which would be likely to impair materially the ability of BANA

      to perform under the terms of this Agreement.

 

            (vii) No consent, approval, authorization or order of any court or

      governmental agency or body is required for the execution, delivery and

      performance by BANA of or compliance by BANA with this Agreement as

      evidenced by the consummation of the transactions contemplated by this

      Agreement, or if required, such approval has been obtained prior to the

      Closing Date.

 

            (viii) Neither this Agreement nor any statement, report or other

      document prepared and furnished by or on behalf of BANA or to be prepared

      and furnished by or on behalf of BANA pursuant to this Agreement or in

      connection with the transactions contemplated hereby contains any untrue

      material statement of fact or omits to state a material fact necessary to

      make the statements contained therein not misleading.

 

            (ix) There has been no material adverse change in the business,

      operations, financial condition or assets of BANA since the date of BANA's

      most recent financial statements.

 

            (x) BANA has fully furnished, and shall continue to fully furnish

      for so long as it is servicing the BANA Mortgage Loans in Loan Group 1

      hereunder, in accordance with the Fair Credit Reporting Act and its

      implementing regulations, accurate and complete information on the related

       Mortgagor credit files to Equifax, Experian and Trans Union Credit

      Information Company on a monthly basis.

 

            (c) National City Mortgage hereby makes the following

representations and warranties to the Depositor, the NIMS Insurer and the

Trustee, as of the Closing Date:

 

            (i) National City Mortgage is a corporation duly organized, validly

      existing and in good standing under the laws of the State of Ohio and has

      all licenses necessary to carry on its business as now being conducted and

      is licensed, qualified and in good standing in each state where a

      Mortgaged Property is located if the laws of such state require licensing

      or qualification in order to conduct business of the type conducted by

      National City Mortgage, and in any event National City Mortgage is in

      compliance with the laws of any such state to the extent necessary to

      ensure the enforceability of the related Mortgage Loan and the servicing

      of such Mortgage Loan in accordance with the terms of this Agreement;

      National City Mortgage has the full corporate power and authority to

      execute and deliver this Agreement and to perform in accordance herewith;

      the execution, delivery and performance of this Agreement (including all

      instruments of transfer to be delivered pursuant to this Agreement) by

      National City Mortgage and the consummation of the transactions

      contemplated hereby have been duly and validly authorized; this Agreement

      evidences the valid, binding and enforceable obligation of National City

      Mortgage; and all requisite corporate action has been taken by National

      City Mortgage to make this Agreement valid and binding upon National City

      Mortgage in accordance with its terms.

 

            (ii) The consummation of the transactions contemplated by this

      Agreement are in the ordinary course of business of National City

      Mortgage.

 

            (iii) Neither the execution and delivery of this Agreement or the

      transactions contemplated hereby, nor the fulfillment of or compliance

      with the terms and conditions of this Agreement will conflict with or

      result in a breach of any of the terms, articles of incorporation or

      by-laws or any legal restriction or any agreement or instrument to which

      National City Mortgage is now a party or by which it is bound, or

      constitute a default or result in the violation of any law, rule,

      regulation, order, judgment or decree to which National City Mortgage or

      its property is subject, or impair the value of the Mortgage Loans.

 

            (iv) National City Mortgage is an approved seller/servicer of

      conventional residential mortgage loans for Fannie Mae or Freddie Mac,

       with the facilities, procedures, and experienced personnel necessary for

      the sound servicing of mortgage loans of the same type as the Mortgage

      Loans. National City Mortgage is a HUD approved mortgagee pursuant to

      Section 203 of the National Housing Act and is in good standing to sell

      mortgage loans to and service mortgage loans for Fannie Mae or Freddie

      Mac, and no event has occurred, including but not limited to a change in

      insurance coverage, which would make National City Mortgage unable to

      comply with Fannie Mae or Freddie Mac eligibility requirements or which

      would require notification to either Fannie Mae or Freddie Mac.

 

            (v) National City Mortgage does not believe, nor does it have any

       reason or cause to believe, that it cannot perform each and every covenant

      contained in this Agreement.

 

            (vi) There is no action, suit, proceeding or investigation pending

      or to its knowledge threatened against National City Mortgage which,

      either in any one instance or in the aggregate, may result in any material

      adverse change in the business, operations, financial condition,

      properties or assets of National City Mortgage, or in any material

      impairment of the right or ability of National City Mortgage to carry on

      its business substantially as now conducted, or in any material liability

      on the part of National City Mortgage, or which would draw into question

      the validity of this Agreement or of any action taken or to be

      contemplated herein, or which would be likely to impair materially the

      ability of National City Mortgage to perform under the terms of this

      Agreement.

 

            (vii) No consent, approval, authorization or order of any court or

      governmental agency or body is required for the execution, delivery and

      performance by National City Mortgage of or compliance by National City

      Mortgage with this Agreement as evidenced by the consummation of the

       transactions contemplated by this Agreement, or if required, such approval

      has been obtained prior to the Closing Date.

 

            (viii) Neither this Agreement nor any statement, report or other

      document prepared and furnished by or on behalf of National City Mortgage

      or to be prepared and furnished by or on behalf of National City Mortgage

      pursuant to this Agreement or in connection with the transactions

      contemplated hereby contains any untrue material statement of fact or

      omits to state a material fact necessary to make the statements contained

      therein not misleading.

 

            (ix) There has been no material adverse change in the business,

      operations, financial condition or assets of National City Mortgage since

      the date of National City Mortgage's most recent financial statements.

 

            The representations and warranties made pursuant to this Section

2.03 shall survive delivery of the respective Mortgage Files to the Trustee, or

the Custodian on behalf of the Trustee, for the benefit of the

Certificateholders.

 

            Section 2.04 Representations and Warranties of the Depositor as to

the Mortgage Loans.

 

            The Depositor hereby represents and warrants to the Trustee and the

NIMS Insurer with respect to the Mortgage Loans or each Mortgage Loan, as the

case may be, as of the date hereof or such other date set forth herein that as

of the Closing Date:

 

            (i) Immediately prior to the transfer and assignment contemplated

      herein, the Depositor was the sole owner and holder of the Mortgage Loans.

      The Mortgage Loans were not assigned or pledged by the Depositor and the

      Depositor had good and marketable title thereto, and the Depositor had

      full right to transfer and sell the Mortgage Loans to the Trustee free and

      clear of any encumbrance, participation interest, lien, equity, pledge,

      claim or security interest and had full right and authority subject to no

      interest or participation in, or agreement with any other party to sell or

      otherwise transfer the Mortgage Loans.

 

            (ii) As of the Closing Date, the Depositor has transferred all

      right, title and interest in the Mortgage Loans to the Trustee on behalf

      of the Trust.

 

            (iii) As of the Closing Date, the Depositor has not transferred the

      Mortgage Loans to the Trustee on behalf of the Trust with any intent to

      hinder, delay or defraud an of its creditors.

 

            It is understood and agreed that the representations and warranties

set forth in this Section 2.04 shall survive delivery of the respective Mortgage

Files to the Trustee, or the Custodian on behalf of the Trustee, and shall inure

to the benefit of the Trustee, notwithstanding any restrictive or qualified

endorsement or assignment.

 

            Section 2.05 Designation of Interests in the REMICs. The Depositor

hereby designates the Classes of Certificates (other than the Group 3

Certificates and the Residual Certificate) as "regular interests" and the Class

1-UR Interest as the single class of "residual interest" in the Upper-Tier REMIC

for the purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively. The

Depositor hereby designates the Group 3 Certificates (other than the Class 3-A-3

and Class 3-P Certificates) and the Components as "regular interests" and the

Class 3-UR Interest as the single class of "residual interest" in the Group 3

Upper-Tier REMIC for the purposes of Code Sections 860G(a)(1) and 860G(a)(2),

respectively. The Depositor hereby further designates (i) the Uncertificated

Lower-Tier Interests as classes of "regular interests" and the Class 1-LR

Interest as the single class of "residual interest" in the Lower-Tier REMIC for

the purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively; and (ii)

the Uncertificated Group 3 Lower-Tier Interests as classes of "regular

interests" and the Class 3-LR Interest as the single class of "residual

interest" in the Group 3 Lower-Tier REMIC for the purposes of Code Sections

860G(a)(1) and 860G(a)(2), respectively.

 

            Section 2.06 Designation of Start-up Day. The Closing Date is hereby

designated as the "start-up day" of each REMIC within the meaning of Section

860G(a)(9) of the Code.

 

            Section 2.07 REMIC Certificate Maturity Date. Solely for purposes of

satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the "latest

possible maturity date" of the regular interests in each REMIC is April 20,

2035.

 

            Section 2.08 Execution and Delivery of Certificates. The Trustee (i)

acknowledges the issuance of and hereby declares that it holds the

Uncertificated Lower-Tier Interests on behalf of the Upper-Tier REMIC and the

Certificateholders (other than holders of the Group 3 Certificates), (ii)

acknowledges the issuance of and hereby declares that it holds the Group 3

Uncertificated Lower-Tier Interests on behalf of the Group 3 Upper-Tier REMIC

and the holders of Group 3 Certificates (other than the Class 3-P Certificates)

and the Class 1-A-R Certificate (in respect of the Class 3-UR Interest), and

(iii) has executed and delivered to or upon the order of the Depositor, in

exchange for the Mortgage Loans, the Uncertificated Lower-Tier Interests and the

Uncertificated Group 3 Lower Tier Interests, together with all other assets

included in the definition of "Trust Estate," receipt of which is hereby

acknowledged, Certificates in authorized denominations which, together with the

Uncertificated Lower Tier Interests and the Uncertificated Group 3 Lower Tier

Interests, evidence ownership of the entire Trust Estate.

 

            Section 2.09 Repurchase of Converted Mortgage Loans. The Depositor

shall repurchase from the Trust any Converted Mortgage Loan prior to the first

Due Date for such Mortgage Loan following the Conversion Date. Any such

repurchase shall be at the Purchase Price. The Purchase Price for any

repurchased Converted Mortgage Loan shall be delivered to the Trustee for

deposit to the Distribution Account and, upon receipt by the Trustee of written

notification of any such deposit signed by an officer of the Depositor and a

Request for Release, the Trustee, or the Custodian on behalf of the Trustee,

shall release to the Depositor the related Mortgage File and shall execute and

deliver such instruments of transfer or assignment prepared by the Depositor, in

each case without recourse, as shall be necessary to vest in the Depositor legal

and beneficial ownership of such Converted Mortgage Loan.

 

 

                                  ARTICLE III

 

                          ADMINISTRATION AND SERVICING

                                OF MORTGAGE LOANS

 

            Section 3.01 Servicers to Service Mortgage Loans. For and on behalf

of the Certificateholders, GreenPoint shall service and administer the

GreenPoint Mortgage Loans, BANA shall service and administer the BANA Mortgage

Loans and National City Mortgage shall service and administer the National City

Mortgage Mortgage Loans, each in accordance with the terms of this Agreement,

Customary Servicing Procedures, applicable law and the terms of the Mortgage

Notes and Mortgages. In connection with such servicing and administration, each

Servicer shall have full power and authority, acting alone and/or through

Subservicers as provided in Section 3.02, to do or cause to be done any and all

things that it may deem necessary or desirable in connection with such servicing

and administration including, but not limited to, the power and authority,

subject to the terms hereof, (a) to execute and deliver, on behalf of the

Certificateholders and the Trustee, customary consents or waivers and other

instruments and documents, (b) to consent, with respect to the Mortgage Loans it

services, to transfers of any Mortgaged Property and assumptions of the Mortgage

Notes and related Mortgages (but only in the manner provided in this Agreement),

(c) to collect any Insurance Proceeds and other Liquidation Proceeds relating to

the Mortgage Loans it services, and (d) to effectuate foreclosure or other

conversion of the ownership of the Mortgaged Property securing any Mortgage Loan

it services. Each Servicer shall represent and protect the interests of the

Trust in the same manner as it protects its own interests in mortgage loans in

its own portfolio in any claim, proceeding or litigation regarding a Mortgage

Loan and shall not make or permit any modification, waiver or amendment of any

term of any Mortgage Loan, except as provided pursuant to Section 3.22. Without

limiting the generality of the foregoing, each Servicer, in its own name or in

the name of any Subservicer or the Depositor and the Trustee, is hereby

authorized and empowered by the Depositor and the Trustee, when such Servicer or

any Subservicer, as the case may be, believes it appropriate in its reasonable

judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the

Certificateholders or any of them, any and all instruments of satisfaction or

cancellation, or of partial or full release or discharge, and all other

comparable instruments, with respect to the Mortgage Loans it services, and with

respect to the related Mortgaged Properties held for the benefit of the

Certificateholders. Each Servicer shall prepare and deliver to the Depositor

and/or the Trustee such documents requiring execution and delivery by any or all

of them as are necessary or appropriate to enable such Servicer to service and

administer the Mortgage Loans it services to the extent that such Servicer is

not permitted to execute and deliver such documents pursuant to the preceding

sentence. Upon receipt of such documents, the Depositor and/or the Trustee, upon

the direction of the related Servicer, shall promptly execute such documents and

deliver them to the related Servicer.

 

            In accordance with the standards of the preceding paragraph, each

Servicer shall advance or cause to be advanced funds as necessary for the

purpose of effecting the payment of taxes and assessments on the Mortgaged

Properties relating to the Mortgage Loans it services, which Servicing Advances

shall be reimbursable in the first instance from related collections from the

Mortgagors pursuant to Section 3.10, and further as provided in Section 3.13.

The costs incurred by the Servicers, if any, in effecting the timely payments of

taxes and assessments on the Mortgaged Properties and related insurance premiums

shall not, for the purpose of calculating monthly distributions to the

Certificateholders, be added to the Stated Principal Balances of the related

Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.

 

            The relationship of each Servicer (and of any successor to any

Servicer as servicer under this Agreement) to the Trustee under this Agreement

is intended by the parties to be that of an independent contractor and not that

of a joint venturer, partner or agent.

 

            Section 3.02 Subservicing; Enforcement of the Obligations of the

Servicers.

 

            (a) Each Servicer may arrange for the subservicing of any Mortgage

Loan it services by a Subservicer pursuant to a Subservicing Agreement;

provided, however, that such subservicing arrangement and the terms of the

related Subservicing Agreement must provide for the servicing of such Mortgage

Loan in a manner consistent with the servicing arrangements contemplated

hereunder. Notwithstanding the provisions of any Subservicing Agreement, any of

the provisions of this Agreement relating to agreements or arrangements between

a Servicer and a Subservicer or reference to actions taken through a Subservicer

or otherwise, such Servicer shall remain obligated and liable to the Depositor,

the Trustee and the Certificateholders for the servicing and administration of

the Mortgage Loans it services in accordance with the provisions of this

Agreement without diminution of such obligation or liability by virtue of such

Subservicing Agreements or arrangements or by virtue of indemnification from the

Subservicer and to the same extent and under the same terms and conditions as if

such Servicer alone were servicing and administering those Mortgage Loans. All

actions of each Subservicer performed pursuant to the related Subservicing

Agreement shall be performed as agent of the related Servicer with the same

force and effect as if performed directly by such Servicer.

 

             (b) For purposes of this Agreement, each Servicer shall be deemed to

have received any collections, recoveries or payments with respect to the

Mortgage Loans it services that are received by a Subservicer regardless of

whether such payments are remitted by the Subservicer to such Servicer.

 

            (c) As part of its servicing activities hereunder, each Servicer,

for the benefit of the Trustee and the Certificateholders, shall use its best

reasonable efforts to enforce the obligations of each Subservicer engaged by

such Servicer under the related Subservicing Agreement, to the extent that the

non-performance of any such obligation would have a material and adverse effect

on a Mortgage Loan. Such enforcement, including, without limitation, the legal

prosecution of claims, termination of Subservicing Agreements and the pursuit of

other appropriate remedies, shall be in such form and carried out to such an

extent and at such time as the related Servicer, in its good faith business

judgment, would require were it the owner of the related Mortgage Loans. The

related Servicer shall pay the costs of such enforcement at its own expense, and

shall be reimbursed therefor only (i) from a general recovery resulting from

such enforcement to the extent, if any, that such recovery exceeds all amounts

due in respect of the related Mortgage Loan or (ii) from a specific recovery of

costs, expenses or attorneys fees against the party against whom such

enforcement is directed.

 

            (d) Any Subservicing Agreement entered into by a Servicer shall

provide that it may be assumed or terminated by the Trustee, if the Trustee has

assumed the duties of such Servicer, or any successor Servicer, at the Trustee's

or successor Servicer's option, as applicable, without cost or obligation to the

assuming or terminating party or the Trust Estate, upon the assumption by such

party of the obligations of such Servicer pursuant to Section 8.05.

 

            Any Subservicing Agreement, and any other transactions or services

relating to the Mortgage Loans involving a Subservicer, shall be deemed to be

between the related Servicer and such Subservicer alone, and the Trustee and the

Certificateholders shall not be deemed parties thereto and shall have no claims

or rights of action against, rights, obligations, duties or liabilities to or

with respect to the Subservicer or its officers, directors or employees, except

as set forth in Section 3.01.

 

            Section 3.03 Fidelity Bond; Errors and Omissions Insurance. Each

Servicer shall maintain, at its own expense, a blanket fidelity bond and an

errors and omissions insurance policy, with broad coverage on all officers,

employees or other persons acting in any capacity requiring such persons to

handle funds, money, documents or papers relating to the Mortgage Loans it

services. These policies must insure such Servicer against losses resulting from

dishonest or fraudulent acts committed by such Servicer's personnel, any

employees of outside firms that provide data processing services for such

Servicer, and temporary contract employees or student interns. Such fidelity

bond shall also protect and insure such Servicer against losses in connection

with the release or satisfaction of a Mortgage Loan without having obtained

payment in full of the indebtedness secured thereby. No provision of this

Section 3.03 requiring such fidelity bond and errors and omissions insurance

shall diminish or relieve such Servicer from its duties and obligations as set

forth in this Agreement. The minimum coverage under any such bond and insurance

policy shall be at least equal to the corresponding amounts required by FNMA in

the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers' & Servicers' Guide,

as amended or restated from time to time, or in an amount as may be permitted to

such Servicer by express waiver of FNMA or FHLMC. In the event that any such

policy or bond ceases to be in effect, each Servicer shall obtain a comparable

replacement policy or bond from an insurer or issuer, meeting the requirements

set forth above as of the date of such replacement.

 

            Section 3.04 Access to Certain Documentation.

 

            Each Servicer shall provide to the OCC, the OTS, the FDIC and to

comparable regulatory authorities supervising Holders of Certificates and the

examiners and supervisory agents of the OCC, the OTS, the FDIC and such other

authorities, access to the documentation required by applicable regulations of

the OCC, the OTS, the FDIC and such other authorities with respect to the

Mortgage Loans. Such access shall be afforded without charge, but only upon

reasonable and prior written request and during normal business hours at the

offices designated by the related Servicer. Nothing in this Section 3.04 shall

limit the obligation of the related Servicer to observe any applicable law and

the failure of the related Servicer to provide access as provided in this

Section 3.04 as a result of such obligation shall not constitute a breach of

this Section 3.04.

 

            Section 3.05 Maintenance of Primary Mortgage Insurance Policy;

Claims; Collection of BPP Mortgage Loan Payments.

 

            (a) With respect to each Mortgage Loan with a Loan-to-Value Ratio in

excess of 80% or such other Loan-to-Value Ratio as may be required by law, the

Servicer responsible for servicing such Mortgage Loan shall, without any cost to

the Trust Estate, maintain or cause the Mortgagor to maintain in full force and

effect a Primary Mortgage Insurance Policy insuring that portion of the Mortgage

Loan in excess of a percentage in conformity with FNMA requirements. The related

Servicer shall pay or shall cause the Mortgagor to pay the premium thereon on a

timely basis, at least until the Loan-to-Value Ratio of such Mortgage Loan is

reduced to 80% or such other Loan-to-Value Ratio as may be required by law. If

such Primary Mortgage Insurance Policy is terminated, the related Servicer shall

obtain from another insurer a comparable replacement policy, with a total

coverage equal to the remaining coverage of such terminated Primary Mortgage

Insurance Policy. If the insurer shall cease to be an insurer acceptable to

FNMA, the related Servicer shall notify the Trustee in writing, it being

understood that the such Servicer shall not have any responsibility or liability

for any failure to recover under the Primary Mortgage Insurance Policy for such

reason. If such Servicer determines that recoveries under the Primary Mortgage

Insurance Policy are jeopardized by the financial condition of the insurer, such

Servicer shall obtain from another insurer which meets the requirements of this

Section 3.05 a replacement insurance policy. A Servicer shall not take any

action that would result in noncoverage under any applicable Primary Mortgage

Insurance Policy of any loss that, but for the actions of such Servicer, would

have been covered thereunder. In connection with any assumption or substitution

agreement entered into or to be entered into pursuant to Section 3.14, the

related Servicer shall promptly notify the insurer under the related Primary

Mortgage Insurance Policy, if any, of such assumption or substitution of

liability in accordance with the terms of such Primary Mortgage Insurance Policy

and shall take all actions which may be required by such insurer as a condition

to the continuation of coverage under such Primary Mortgage Insurance Policy. If

such Primary Mortgage Insurance Policy is terminated as a result of such

assumption or substitution of liability, the related Servicer shall obtain a

replacement Primary Mortgage Insurance Policy as provided above.

 

            In connection with its activities as servicer, each Servicer agrees

to prepare and present, on behalf of itself, the Trustee and the

Certificateholders, claims to the insurer under any Primary Mortgage Insurance

Policy in a timely fashion in accordance with the terms of such Primary Mortgage

Insurance Policy and, in this regard, to take such action as shall be necessary

to permit recovery under any Primary Mortgage Insurance Policy respecting a

defaulted Mortgage Loan. Pursuant to Section 3.10(a), any amounts collected by a

Servicer under any Primary Mortgage Insurance Policy shall be deposited in the

related Escrow Account, subject to withdrawal pursuant to Section 3.10(b).

 

            Each Servicer will comply with all provisions of applicable state

and federal law relating to the cancellation of, or collection of premiums with

respect to, each Primary Mortgage Insurance Policy, including, but not limited

to, the provisions of the Homeowners Protection Act of 1998, and all regulations

promulgated thereunder, as amended from time to time.

 

            (b) BANA shall take all actions necessary to collect, on behalf of

the Trust, any BPP Mortgage Loan Payments required to be made to the Trust

pursuant to the Mortgage Loan Purchase Agreement.

 

            Section 3.06 Rights of the Depositor and the Trustee in Respect of

the Servicers.

 

            The Depositor may, but is not obligated to, enforce the obligations

of each Servicer hereunder and may, but is not obligated to, perform, or cause a

designee to perform, any defaulted obligation of any Servicer hereunder and in

connection with any such defaulted obligation to exercise the related rights of

such Servicer hereunder; provided that a Servicer shall not be relieved of any

of its obligations hereunder by virtue of such performance by the Depositor or

its designee. Neither the Trustee nor the Depositor shall have any

responsibility or liability for any action or failure to act by a Servicer nor

shall the Trustee or the Depositor be obligated to supervise the performance of

a Servicer (or any Subservicer) hereunder or otherwise.

 

            Section 3.07 Trustee to Act as Servicer.

 

            If a Servicer shall for any reason no longer be a Servicer hereunder

(including by reason of an Event of Default), the Trustee shall within 90 days

of such time, assume, if it so elects, or shall appoint a successor Servicer to

assume, all of the rights and obligations of such Servicer hereunder arising

thereafter (except that the Trustee shall not be (a) liable for losses of such

Servicer pursuant to Section 3.13 or any acts or omissions of such predecessor

Servicer hereunder, (b) obligated to make Advances if it is prohibited from

doing so by applicable law or (c) deemed to have made any representations and

warranties of such Servicer hereunder). Any such assumption shall be subject to

Sections 7.02 and 8.05. If a Servicer shall for any reason no longer be a

Servicer (including by reason of any Event of Default), the Trustee or the

successor Servicer may elect to succeed to any rights and obligations of such

Servicer under each Subservicing Agreement or may terminate each Subservicing

Agreement. If it has elected to assume the Subservicing Agreement, the Trustee

or the successor Servicer shall be deemed to have assumed all of a Servicer's

interest therein and to have replaced such Servicer as a party to any

Subservicing Agreement entered into by a Servicer as contemplated by Section

3.02 to the same extent as if the Subservicing Agreement had been assigned to

the assuming party except that such Servicer shall not be relieved of any

liability or obligations under any such Subservicing Agreement.

 

            The Servicer that is no longer a Servicer hereunder shall, upon

request of the Trustee, but at the expense of such predecessor Servicer, deliver

to the assuming party all documents and records relating to each Subservicing

Agreement or substitute servicing agreement and the Mortgage Loans then being

serviced thereunder and an accounting of amounts collected or held by it and

otherwise use its best efforts to effect the orderly and efficient transfer of

such Subservicing Agreement to the assuming party. The Trustee shall be entitled

to be reimbursed from the predecessor Servicer (or the Trust if the predecessor

Servicer is unable to fulfill its obligations hereunder) for all Servicing

Transfer Costs.

 

            Section 3.08 Collection of Mortgage Loan Payments.

 

            Continuously from the date hereof until the principal and interest

on all Mortgage Loans are paid in full, each Servicer will proceed diligently,

in accordance with this Agreement, to collect all payments due under each of the

Mortgage Loans it services when the same shall become due and payable. Further,

each Servicer will in accordance with all applicable law and Customary Servicing

Procedures ascertain and estimate taxes, assessments, fire and hazard insurance

premiums, mortgage insurance premiums and all other charges with respect to the

Mortgage Loans it services that, as provided in any Mortgage, will become due

and payable to the end that the installments payable by the Mortgagors will be

sufficient to pay such charges as and when they become due and payable.

Consistent with the foregoing, each Servicer may in its discretion (i) waive any

late payment charge or any Prepayment Premium or penalty interest in connection

with the prepayment of a Mortgage Loan it services and (ii) extend the due dates

for payments due on a Mortgage Note for a period not greater than 120 days;

provided, however, that a Servicer cannot extend the maturity of any such

Mortgage Loan past the date on which the final payment is due on the latest

maturing Mortgage Loan as of the Cut-off Date. In the event of any such

arrangement, such Servicer shall make Periodic Advances on the related Mortgage

Loan in accordance with the provisions of Section 3.21 during the scheduled

period in accordance with the amortization schedule of such Mortgage Loan

without modification thereof by reason of such arrangements. A Servicer shall

not be required to institute or join in litigation with respect to collection of

any payment (whether under a Mortgage, Mortgage Note or otherwise or against any

public or governmental authority with respect to a taking or condemnation) if it

reasonably believes that enforcing the provision of the Mortgage or other

instrument pursuant to which such payment is required is prohibited by

applicable law.

 

            Section 3.09 Collection of Mortgage Loan Payments; Servicer

Custodial Accounts, Distribution Account and Reserve Account. (a) GreenPoint

shall establish and maintain the GreenPoint Custodial Account. BANA shall

establish and maintain the BANA Custodial Account. National City Mortgage shall

establish and maintain the National City Mortgage Custodial Account. GreenPoint

shall deposit or cause to be deposited into the GreenPoint Custodial Account,

BANA shall deposit or cause to be deposited into the BANA Custodial Account and

National City Mortgage shall deposit or cause to be deposited into the National

City Custodial Account, all on a daily basis within one Business Day of receipt,

except as otherwise specifically provided herein, the following payments and

collections remitted by Subservicers or received by such Servicer in respect of

the Mortgage Loans it services subsequent to the Cut-off Date (other than in

respect of principal and interest due on the Mortgage Loans on or before the

Cut-off Date) and the following amounts required to be deposited hereunder with

respect to the Mortgage Loans it services:

 

            (i) all payments on account of principal of such Mortgage Loans,

      including Principal Prepayments;

 

            (ii) all payments on account of interest on such Mortgage Loans, net

      of the Servicing Fee;

 

            (iii) (A) all Insurance Proceeds and Liquidation Proceeds, other

      than Insurance Proceeds to be (1) applied to the restoration or repair of

      the Mortgaged Property, (2) released to the Mortgagor in accordance with

      Customary Servicing Procedures or (3) deposited to an Escrow Account

      pursuant to Section 3.10(a) and other than any Excess Proceeds and (B) any

      Insurance Proceeds released from an Escrow Account pursuant to Section

      3.10(b)(iv);

 

            (iv) any amount required to be deposited by such Servicer pursuant

      to Section 3.09(c) in connection with any losses on Permitted Investments

      with respect to such Servicer Custodial Account;

 

            (v) any amounts required to be deposited by such Servicer pursuant

      to Section 3.15 or any Prepayment Premiums required to be remitted by such

      Servicer;

 

            (vi) all Repurchase Prices, all Substitution Adjustment Amounts and

      all Reimbursement Amounts to the extent received by such Servicer;

 

             (vii) Periodic Advances made by such Servicer pursuant to Section

      3.21 and any Compensating Interest;

 

            (viii) any Recovery; and

 

            (ix) any other amounts required to be deposited hereunder.

 

            The foregoing requirements for deposits to the Servicer Custodial

Accounts by the Servicers shall be exclusive, it being understood and agreed

that, without limiting the generality of the foregoing, any Ancillary Income

need not be deposited by a Servicer. If a Servicer shall deposit in the related

Servicer Custodial Account any amount not required to be deposited, it may at

any time withdraw or direct the institution maintaining such Servicer Custodial

Account to withdraw such amount from such Servicer Custodial Account, any

provision herein to the contrary notwithstanding. Each Servicer Custodial

Account may contain funds that belong to one or more trust funds created for

mortgage pass-through certificates of other series and may contain other funds

respecting payments on mortgage loans belonging to the applicable Servicer or

serviced by such Servicer on behalf of others; provided that such commingling of

funds with respect to a Servicer shall not be permitted at any time during which

S&P's senior short-term unsecured debt rating of such Servicer falls below

"A-2." Notwithstanding such commingling of funds, each Servicer shall keep

records that accurately reflect the funds on deposit in the applicable Servicer

Custodial Account that have been identified by it as being attributable to the

Mortgage Loans it services. Each Servicer shall maintain adequate records with

respect to all withdrawals made pursuant to this Section 3.09. All funds

required to be deposited in a Servicer Custodial Account shall be held in trust

for the Certificateholders until withdrawn in accordance with Section 3.12.

Amounts received in respect of the Group 1 Mortgage Loans shall be deemed

deposited in Sub-Account 1. Amounts received in respect of the Group 2 Mortgage

Loans shall be deemed deposited in Sub-Account 2. Amounts received in respect of

the Group 3 Mortgage Loans shall be deemed deposited in Sub-Account 3.

 

            (b) The Trustee shall establish and maintain, on behalf of the

Certificateholders, the Distribution Account, which shall be deemed to consist

of five sub-accounts. The Trustee shall, promptly upon receipt, deposit in the

Distribution Account and retain therein the following:

 

            (i) the aggregate amount remitted by each Servicer to the Trustee

      pursuant to Section 3.12(a)(viii);

 

            (ii) any amount paid by the Trustee pursuant to Section 3.09(c) in

      connection with any losses on Permitted Investments with respect to the

      Distribution Account; and

 

            (iii) any other amounts deposited hereunder which are required to be

      deposited in the Distribution Account.

 

            If a Servicer shall remit any amount not required to be remitted, it

may at any time direct the Trustee to withdraw such amount from the Distribution

Account, any provision herein to the contrary notwithstanding. Such direction

may be accomplished by delivering an Officer's Certificate to the Trustee which

describes the amounts deposited in error in the Distribution Account. All funds

required to be deposited in the Distribution Account shall be held by the

Trustee in trust for the Certificateholders until disbursed in accordance with

this Agreement or withdrawn in accordance with Section 3.12. In no event shall

the Trustee incur liability for withdrawals from the Distribution Account at the

direction of a Servicer.

 

            (c) Each institution at which any Servicer Custodial Account or the

Distribution Account is maintained shall invest the funds therein as directed in

writing by GreenPoint (in the case of the GreenPoint Custodial Account), BANA

(in the case of the BANA Custodial Account), National City Mortgage (in the case

of the National City Mortgage Custodial Account) or the Trustee (in the case of

the Distribution Account) in Permitted Investments, which shall mature not later

than (i) in the case of any Servicer Custodial Account, the Business Day next

preceding the related Remittance Date (except that if such Permitted Investment

is an obligation of the institution that maintains such account, then such

Permitted Investment shall mature not later than such Remittance Date) and (ii)

in the case of the Distribution Account, the Business Day next preceding the

Distribution Date (except that if such Permitted Investment is an obligation of

the institution that maintains such account, then such Permitted Investment

shall mature not later than such Distribution Date) and, in each case, shall not

be sold or disposed of prior to its maturity. All such Permitted Investments

shall be made in the name of the Trustee, for the benefit of the

Certificateholders. All Servicer Custodial Account Reinvestment Income shall be

for the benefit of the related Servicer as part of its Servicing Compensation

and shall be retained by it monthly as provided herein. All income or gain (net

of any losses) realized from any such investment of funds on deposit in the

Distribution Account shall be for the benefit of the Trustee as compensation for

its duties hereunder and shall be retained by it monthly as provided herein. The

amount of any losses realized in the GreenPoint Custodial Account, the BANA

Custodial Account, the National City Mortgage Custodial Account or the

Distribution Account incurred in any such account in respect of any such

investments shall promptly be deposited by GreenPoint in the GreenPoint

Custodial Account, BANA in the BANA Custodial Account, National City Mortgage in

the National City Mortgage Custodial Account or by the Trustee in the

Distribution Account, as applicable.

 

            (d) A Servicer shall give notice to the Trustee and the NIMS Insurer

of any proposed change of the location of the Servicer Custodial Account

maintained by such Servicer not later than 30 days and not more than 45 days

prior to any change thereof. The Trustee shall give notice to the Servicers,

each Rating Agency, the NIMS Insurer and the Depositor of any proposed change of

the location of the Distribution Account not later than 30 days after and not

more than 45 days prior to any change thereof. The creation of any Servicer

Custodial Account and the Distribution Account shall be evidenced by a

certification substantially in the form of Exhibit F hereto.

 

            (e) The Trustee shall designate each of Sub-Account 1, Sub-Account

2, Sub-Account 3, the Upper-Tier Certificate Sub-Account and the Group 3

Upper-Tier Sub-Account as a sub-account of the Distribution Account. On each

Distribution Date, the Trustee shall, from funds available on deposit in the

Distribution Account (and deemed on deposit in Sub-Account 1 and Sub-Account 2,

as applicable), be deemed to deposit into the Upper-Tier Sub-Account, the

Lower-Tier Distribution Amount. On each Distribution Date, the Trustee shall,

from funds available on deposit in the Distribution Account (and deemed on

deposit in Sub-Account 3), be deemed to deposit into the Group 3 Upper-Tier

Sub-Account, the Group 3 Lower-Tier Distribution Amount.

 

            (f) (i) The Trustee shall establish and maintain the Reserve

Account, which account shall be held in trust for the benefit of the Holders of

the Offered Group 3 Certificates. The Trustee shall deposit in the Reserve

Account on the date received by it, any Yield Maintenance Agreement Payments

received from the Yield Maintenance Agreement Provider for the related

Distribution Date. Funds on deposit in the Reserve Account shall remain

uninvested. On each Distribution Date, the Trustee shall withdraw from the

Reserve Account any Yield Maintenance Agreement Payments and apply them in the

following order of priority:

 

                  (A) to the Offered Group 3 Certificates, any remaining unpaid

            Cap Carryover Amounts for such classes for such Distribution Date

            (after distributions pursuant to Section 5.03(c) hereof, first,

            concurrently, to the Class 3-A Certificates (other than the Class

            3-A-3 Certificates), pro rata, and then, sequentially, to the

            Components, the Class 3-M-1 Certificates, the Class 3-M-2

            Certificates, the Class 3-B-1 Certificates, the Class 3-B-2

            Certificates and the Class 3-B-3 Certificates, in that order; and

 

                  (B) to the Class 3-CE Certificates, any remaining amounts on

            deposit in the Reserve Account.

 

            (ii) The Trustee shall account for the Reserve Account as an asset

      of the Grantor Trust and not an asset of any REMIC created pursuant to

      this Agreement. The beneficial owner of the Reserve Account is the Class

      3-CE Certificateholder. For all federal tax purposes, amounts transferred

      or reimbursed by the Group 3 Upper-Tier REMIC to the Reserve Account shall

      be treated as distributions by the Trustee to the Class 3-CE

      Certificateholder.

 

            (iii) Any Cap Carryover Amounts paid by the Trustee pursuant to this

      Section 3.09(f) to the Offered Group 3 Certificates shall be accounted for

      by the Trustee as amounts paid first to the Class 3-CE Certificates and

      then to the Offered Group 3 Certificates from the Grantor Trust. In

      addition, the Trustee shall account for the Offered Group 3 Certificates'

      rights to receive payments of Cap Carryover Amounts as rights in limited

      recourse interest rate cap contracts written by the Class 3-CE

      Certificates in favor of the Offered Group 3 Certificates.

 

             (g) For federal tax return and information reporting, the right of

the Holders of the Offered Group 3 Certificates to receive payments under the

Yield Maintenance Agreements in respect of any related Yield Maintenance

Agreement Payments shall be assigned a value of zero.

 

            (h) Any Prepayment Premiums deposited pursuant to Section 3.09(a)(v)

shall not be assets of any REMIC created hereunder, but shall be considered

assets of the Grantor Trust held by the Trustee for the benefit of the Class 3-P

Certificateholders.

 

            Section 3.10 Collection of Taxes, Assessments and Similar Items;

Escrow Accounts.

 

            (a) To the extent required by the related Mortgage Note and not

violative of current law, each Servicer shall segregate and hold all funds

collected and received pursuant to each Mortgage Loan serviced by such Servicer

which constitute Escrow Payments in trust separate and apart from any of its own

funds and general assets and for such purpose shall establish and maintain one

or more escrow accounts (collectively, the "Escrow Account"), titled "[Insert

name of Servicer], in trust for registered holders of Banc of America Funding

Corporation, Mortgage Pass-Through Certificates, Series 2005-B and various

Mortgagors." The Escrow Account shall be established with a commercial bank, a

savings bank or a savings and loan association that meets the guidelines set

forth by FNMA or FHLMC as an eligible institution for escrow accounts and which

is a member of the Automated Clearing House. In any case, the Escrow Account

shall be insured by the FDIC to the fullest extent permitted by law. Each

Servicer shall deposit in the appropriate Escrow Account on a daily basis, and

retain therein: (i) all Escrow Payments collected on account of the Mortgage

Loans serviced by such Servicer, (ii) all amounts representing proceeds of any

hazard insurance policy which are to be applied to the restoration or repair of

any related Mortgaged Property and (iii) all amounts representing proceeds of

any Primary Mortgage Insurance Policy. Nothing herein shall require any Servicer

to compel a Mortgagor to establish an Escrow Account in violation of applicable

law.

 

            (b) Withdrawals of amounts so collected from the Escrow Accounts may

be made by the related Servicer only (i) to effect timely payment of taxes,

assessments, mortgage insurance premiums, fire and hazard insurance premiums,

condominium or PUD association dues, or comparable items constituting Escrow

Payments for the related Mortgage, (ii) to reimburse such Servicer out of

related Escrow Payments made with respect to a Mortgage Loan for any Servicing

Advance made by such Servicer pursuant to Section 3.10(c) with respect to such

Mortgage Loan, (iii) to refund to any Mortgagor any sums determined to be

overages, (iv) for transfer to the related Servicer Custodial Account upon

default of a Mortgagor or in accordance with the terms of the related Mortgage

Loan and if permitted by applicable law, (v) for application to restore or

repair the Mortgaged Property, (vi) to pay to the Mortgagor, to the extent

required by law, any interest paid on the funds deposited in the Escrow Account,

(vii) to pay to itself any interest earned on funds deposited in the Escrow

Account (and not required to be paid to the Mortgagor), (viii) to the extent

permitted under the terms of the related Mortgage Note and applicable law, to

pay late fees with respect to any Monthly Payment which is received after the

applicable grace period, (ix) to withdraw suspense payments that are deposited

into the Escrow Account, (x) to withdraw any amounts inadvertently deposited in

the Escrow Account or (xi) to clear and terminate the Escrow Account upon the

termination of this Agreement in accordance with Section 10.01. Any Escrow

Account shall not be a part of the Trust Estate.

 

            (c) With respect to each Mortgage Loan it services, each Servicer

shall maintain accurate records reflecting the status of taxes, assessments and

other charges which are or may become a lien upon the Mortgaged Property and the

status of Primary Mortgage Insurance Policy premiums and fire and hazard

insurance coverage. Each Servicer shall obtain, from time to time, all bills for

the payment of such charges (including renewal premiums) and shall effect

payment thereof prior to the applicable penalty or termination date and at a

time appropriate for securing maximum discounts allowable, employing for such

purpose deposits of the Mortgagor in the Escrow Account, if any, which shall

have been estimated and accumulated by each Servicer in amounts sufficient for

such purposes, as allowed under the terms of the Mortgage. To the extent that a

Mortgage does not provide for Escrow Payments, the related Servicer shall

determine that any such payments are made by the Mortgagor. The related Servicer

assumes full responsibility for the timely payment of all such bills and shall

effect timely payments of all such bills irrespective of each Mortgagor's

faithful performance in the payment of same or the making of the Escrow

Payments. The related Servicer shall advance any such payments that are not

timely paid, but such Servicer shall be required so to advance only to the

extent that such Servicing Advances, in the good faith judgment of such

Servicer, will be recoverable by such Servicer out of Insurance Proceeds,

Liquidation Proceeds or otherwise.

 

            Section 3.11 Access of Trustee and NIMS Insurer to Certain

Documentation and Information Regarding the Mortgage Loans.

 

            The Servicers shall afford the Trustee and the NIMS Insurer

reasonable access to all records and documentation regarding the Mortgage Loans

and all accounts, insurance information and other matters relating to this

Agreement, such access being afforded without charge, but only upon reasonable

request and during normal business hours at the office designated by the

applicable Servicer.

 

            Section 3.12 Permitted Withdrawals from the Servicer Custodial

Accounts and the Distribution Account.

 

            (a) Each Servicer may from time to time make withdrawals from the

applicable Servicer Custodial Account, for the following purposes:

 

            (i) to pay to the related Servicer (to the extent not previously

      retained), the Servicing Compensation to which it is entitled pursuant to

       Section 3.18;

 

            (ii) to reimburse the related Servicer or the Trustee for

      unreimbursed Advances made by it, such right of reimbursement pursuant to

      this clause (ii) being limited first to amounts received on the Mortgage

      Loans serviced by such Servicer in the related Loan Group in respect of

      which any such Advance was made (including amounts received in respect of

      BPP Mortgage Loan Payments for such Mortgage Loans) and then limited to

      amounts received on all the Mortgage Loans serviced by such Servicer;

 

            (iii) to reimburse the Servicers for any Nonrecoverable Advance

      previously made, such right of reimbursement pursuant to this clause (iii)

      being limited first to amounts received on the Mortgage Loans serviced by

      such Servicer in the same Loan Group as the Mortgage Loan(s) in respect of

      which such Nonrecoverable Advance was made and then limited to amounts

      received on all the Mortgage Loans serviced by such Servicer;

 

            (iv) to reimburse the related Servicer for Insured Expenses from the

      related Insurance Proceeds;

 

            (v) to pay to the purchaser, with respect to each Mortgage Loan or

      REO Property that has been purchased pursuant to Section 2.02, 2.04, 2.09

      or 3.15(b), all amounts received thereon after the date of such purchase;

 

            (vi) to reimburse the related Servicer or the Depositor for expenses

      incurred by any of them and reimbursable pursuant to this Agreement,

      including but not limited to, Section 3.02 and Section 7.03;

 

            (vii) to withdraw any amount deposited in the related Servicer

      Custodial Account and not required to be deposited therein;

 

            (viii) on or prior to the Remittance Date, to withdraw an amount

      equal to the such Servicer's portion of the Pool Distribution Amounts, the

      Group 3 Interest Remittance Amount, the Group 3 Principal Remittance

      Amount and any Monthly Excess Cashflow Amount for such Distribution Date,

      to the extent on deposit, and remit such amount in immediately available

      funds to the Trustee for deposit in the Distribution Account; and

 

            (ix) to clear and terminate the related Servicer Custodial Account

      upon termination of this Agreement pursuant to Section 10.01.

 

            Each Servicer shall keep and maintain separate accounting, on a

Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any

withdrawal from the related Servicer Custodial Account pursuant to clauses (i),

(ii), (iv) and (v). Each Servicer shall keep and maintain such separate

accounting for each Mortgage Loan it services in each Loan Group. Prior to

making any withdrawal from the related Servicer Custodial Account pursuant to

clause (iii), each Servicer shall deliver to the Trustee an Officer's

Certificate of a Servicing Officer indicating the amount of any previous Advance

determined by such Servicer to be a Nonrecoverable Advance and identifying the

related Mortgage Loan(s) and their respective portions of such Nonrecoverable

Advance.

 

            In connection with any failure by a Servicer to make any remittance

required to be made by such Servicer to the Distribution Account on the day and

by the time such remittance is required to be made under this Agreement (without

giving effect to any grace or cure period), such Servicer shall pay the Trustee

for the account of the Trustee interest at the rate published in The Wall Street

Journal as the "Prime Rate" on any amount not timely remitted from and including

the day such remittance was required to be made to, but not including, the day

on which such remittance was actually made.

 

            (b) The Trustee shall withdraw funds from the Distribution Account

for distributions to Certificateholders in the manner specified in this

Agreement. In addition, the Trustee may from time to time make withdrawals from

the Distribution Account for the following purposes:

 

            (i) to pay to itself any amounts due under this Agreement for the

      related Distribution Date including, to the extent not previously paid

      pursuant to Section 3.12(a), to reimburse itself for any Nonrecoverable

      Advance previously made;

 

            (ii) to pay to itself as its compensation, earnings on or investment

      income with respect to funds in the Distribution Account;

 

            (iii) to withdraw and return to the related Servicer any amount

      deposited in the Distribution Account and not required to be deposited

      therein; and

 

            (iv) to clear and terminate the Distribution Account upon

      termination of the Agreement pursuant to Section 10.01.

 

            (c) On each Distribution Date, funds on deposit in the Distribution

Account and deemed to be on deposit in the Upper-Tier Certificate Sub-Account

shall be used to make payments on the Regular Certificates (other than the

Offered Group 3 Certificates) and the Class 1-A-R Certificate in respect of the

Class 1-UR Interest as provided in Sections 5.01 and 5.02. On each Distribution

Date, funds on deposit in the Distribution Account and deemed to be on deposit

in the Group 3 Upper-Tier Certificate Sub-Account shall be used to make payments

on the Offered Group 3 Certificates, the Class 3-CE Certificates, the Class 3-P

Certificates and the Class 1-A-R Certificate in respect of the Class 3-UR

Interest as provided in Section 5.03. The Distribution Account shall be cleared

and terminated upon termination of this Agreement pursuant to Section 10.01.

 

            Section 3.13 Maintenance of Hazard Insurance and Other Insurance.

 

            Each Servicer shall cause to be maintained for each Mortgage Loan

serviced by such Servicer, fire and hazard insurance with extended coverage

customary in the area where the Mortgaged Property is located in an amount which

is at least equal to the lesser of (a) the full insurable value of the Mortgaged

Property or (b) the greater of (i) the outstanding principal balance owing on

the Mortgage Loan and (ii) an amount such that the proceeds of such insurance

shall be sufficient to avoid the application to the Mortgagor or loss payee of

any coinsurance clause under the policy. If the Mortgaged Property is in an area

identified in the Federal Register by the Federal Emergency Management Agency as

having special flood hazards (and such flood insurance has been made available)

the related Servicer will cause to be maintained a flood insurance policy

meeting the requirements of the current guidelines of the Federal Insurance

Administration and the requirements of FNMA or FHLMC. Each Servicer shall also

maintain on REO Property serviced by such Servicer, fire and hazard insurance

with extended coverage in an amount which is at least equal to the maximum

insurable value of the improvements which are a part of such property, liability

insurance and, to the extent required, flood insurance in an amount required

above. Any amounts collected by a Servicer under any such policies (other than

amounts to be deposited in an Escrow Account and applied to the restoration or

repair of the property subject to the related Mortgage or property acquired in

liquidation of the Mortgage Loan, or to be released to the Mortgagor in

accordance with Customary Servicing Procedures) shall be deposited in the

related Servicer Custodial Account, subject to withdrawal pursuant to Section

3.12(a). It is understood and agreed that no earthquake or other additional

insurance need be required by a Servicer of any Mortgagor or maintained on REO

Property, other than pursuant to such applicable laws and regulations as shall

at any time be in force and as shall require such additional insurance. All

policies required hereunder shall be endorsed with standard mortgagee clauses

with loss payable to the related Servicer, and shall provide for at least 30

days prior written notice of any cancellation, reduction in amount or material

change in coverage to such Servicer.

 

            The hazard insurance policies for each Mortgage Loan secured by a

unit in a condominium development or planned unit development shall be

maintained with respect to such Mortgage Loan and the related development in a

manner which is consistent with FNMA requirements.

 

            Notwithstanding the foregoing, any Servicer may maintain a blanket

policy insuring against hazard losses on all of the Mortgaged Properties

relating to the Mortgage Loans serviced by such Servicer in lieu of maintaining

the required hazard insurance policies for each Mortgage Loan and may maintain a

blanket policy insuring against special flood hazards in lieu of maintaining any

required flood insurance. Any such blanket policies shall (A) be consistent with

prudent industry standards, (B) name the related Servicer as loss payee, (C)

provide coverage in an amount equal to the aggregate unpaid principal balance on

the related Mortgage Loans without co-insurance, and (D) otherwise comply with

the requirements of this Section 3.13. Any such blanket policy may contain a

deductible clause; provided that if any Mortgaged Property is not covered by a

separate policy otherwise complying with this Section 3.13 and a loss occurs

with respect to such Mortgaged Property which loss would have been covered by

such a policy, the related Servicer shall deposit in the related Servicer

Custodial Account the difference, if any, between the amount that would have

been payable under a separate policy complying with this Section 3.13 and the

amount paid under such blanket policy.

 

            Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption

Agreements.

 

             (a) Except as otherwise provided in this Section 3.14, when any

Mortgaged Property subject to a Mortgage has been conveyed by the Mortgagor, the

related Servicer shall use reasonable efforts, to the extent that it has actual

knowledge of such conveyance, to enforce any due-on-sale clause contained in any

Mortgage Note or Mortgage, to the extent permitted under applicable law and

governmental regulations, but only to the extent that such enforcement will not

adversely affect or jeopardize coverage under any Required Insurance Policy.

Notwithstanding the foregoing, a Servicer is not required to exercise such

rights with respect to a Mortgage Loan if the Person to whom the related

Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the

terms and conditions contained in the Mortgage Note and Mortgage related thereto

and the consent of the mortgagee under such Mortgage Note or Mortgage is not

otherwise required under such Mortgage Note or Mortgage as a condition to such

transfer. If (i) the related Servicer is prohibited by law from enforcing any

such due-on-sale clause, (ii) coverage under any Required Insurance Policy would

be adversely affected, (iii) the Mortgage Note does not include a due-on-sale

clause or (iv) nonenforcement is otherwise permitted hereunder, the related

Servicer is authorized, subject to Section 3.14(b), to take or enter into an

assumption and modification agreement from or with the Person to whom such

Mortgaged Property has been or is about to be conveyed, pursuant to which such

Person becomes liable under the Mortgage Note and, unless prohibited by

applicable state law, the Mortgagor remains liable thereon; provided that the

Mortgage Loan shall continue to be covered (if so covered before the related

Servicer enters such agreement) by the applicable Required Insurance Policies.

The related Servicer, subject to Section 3.14(b), is also authorized with the

prior approval of the insurers under any Required Insurance Policies to enter

into a substitution of liability agreement with such Person, pursuant to which

the original Mortgagor is released from liability and such Person is substituted

as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the

foregoing, a Servicer shall not be deemed to be in default under this Section

3.14 by reason of any transfer or assumption which such Servicer reasonably

believes it is restricted by law from preventing, for any reason whatsoever.

 

            (b) Subject to a Servicer's duty to enforce any due-on-sale clause

to the extent set forth in Section 3.14(a), in any case in which a Mortgaged

Property has been conveyed to a Person by a Mortgagor, and such Person is to

enter into an assumption agreement or modification agreement or supplement to

the Mortgage Note or Mortgage that requires the signature of the Trustee, or if

an instrument of release signed by the Trustee is required releasing the

Mortgagor from liability on the Mortgage Loan, the related Servicer shall

prepare and deliver or cause to be prepared and delivered to the Trustee for

signature and shall direct, in writing, the Trustee to execute the assumption

agreement with the Person to whom the Mortgaged Property is to be conveyed and

such modification agreement or supplement to the Mortgage Note or Mortgage or

other instruments as are reasonable or necessary to carry out the terms of the

Mortgage Note or Mortgage or otherwise to comply with any applicable laws

regarding assumptions or the transfer of the Mortgaged Property to such Person.

In no event shall the Trustee incur liability for executing any document under

this Section 3.14 at the direction of a Servicer. In connection with any such

assumption, no material term of the Mortgage Note may be changed. In addition,

the substitute Mortgagor and the Mortgaged Property must be acceptable to the

related Servicer in accordance with its underwriting standards as then in

effect. Together with each such substitution, assumption or other agreement or

instrument delivered to the Trustee for execution, the related Servicer shall

deliver an Officer's Certificate signed by a Servicing Officer stating that the

requirements of this subsection have been met. Each Servicer shall notify the

Trustee that any such substitution or assumption agreement has been completed by

forwarding to the Trustee (or at the direction of the Trustee, the Custodian)

the original of such substitution or assumption agreement, which in the case of

the original shall be added to the related Mortgage File and shall, for all

purposes, be considered a part of such Mortgage File to the same extent as all

other documents and instruments constituting a part thereof. Any fee collected

by a Servicer for entering into an assumption or substitution of liability

agreement may be retained by such Servicer as additional Servicing Compensation.

Notwithstanding the foregoing, to the extent permissible under applicable law

and at the request of a Servicer, the Trustee shall execute and deliver to such

Servicer any powers of attorney and other documents prepared by such Servicer

that are reasonably necessary or appropriate to enable such Servicer to execute

any assumption agreement or modification agreement required to be executed by

the Trustee under this Section 3.14.

 

            Section 3.15 Realization Upon Defaulted Mortgage Loans; REO

Property.

 

            (a) Subject to Section 3.22, each Servicer shall use reasonable

efforts to foreclose upon or otherwise comparably convert the ownership of

Mortgaged Properties securing such of the Mortgage Loans serviced by such

Servicer as come into and continue in default and as to which no satisfactory

arrangements can be made for collection of delinquent payments. In connection

with such foreclosure or other conversion, each Servicer shall follow Customary

Servicing Procedures and shall meet the requirements of the insurer under any

Required Insurance Policy. Notwithstanding the foregoing, a Servicer shall not

be required to expend its own funds in connection with any foreclosure or

towards the restoration of any Mortgaged Property unless it shall determine (i)

that such restoration and/or foreclosure will increase the proceeds of

liquidation of the Mortgage Loan after reimbursement to itself of such expenses

and (ii) that such expenses will be recoverable to it through proceeds of the

liquidation of the Mortgage Loan (respecting which it shall have priority for

purposes of withdrawals from the related Servicer Custodial Account). Any such

expenditures shall constitute Servicing Advances for purposes of this Agreement.

 

             The decision of a Servicer to foreclose on a defaulted Mortgage Loan

shall be subject to a determination by such Servicer that the proceeds of such

foreclosure would exceed the costs and expenses of bringing such a proceeding.

 

            With respect to any REO Property, the deed or certificate of sale

shall be taken in the name of the Trust for the benefit of the

Certificateholders, or its nominee, on behalf of the Certificateholders. The

name of the Trust shall be placed on the title to such REO Property. The related

Servicer shall ensure that the title to such REO Property references this

Agreement. Pursuant to its efforts to sell such REO Property, the related

Servicer shall either itself or through an agent selected by such Servicer

manage, conserve, protect and operate such REO Property in the same manner that

it manages, conserves, protects and operates other foreclosed property for its

own account and in the same manner that similar property in the same locality as

the REO Property is managed. Incident to its conservation and protection of the

interests of the Certificateholders, such Servicer may rent the same, or any

part thereof, as such Servicer deems to be in the best interest of the

Certificateholders for the period prior to the sale of such REO Property. Each

Servicer shall prepare for and deliver to the Trustee a statement with respect

to each REO Property serviced by such Servicer that has been rented, if any,

showing the aggregate rental income received and all expenses incurred in

connection with the management and maintenance of such REO Property at such

times as is necessary to enable the Trustee to comply with the reporting

requirements of the REMIC Provisions; provided, however, that a Servicer shall

have no duty to rent any REO Property on behalf of the Trust. The net monthly

rental income, if any, from such REO Property shall be deposited in the related

Servicer Custodial Account no later than the close of business on each

Determination Date. Each Servicer shall perform, with respect to the Mortgage

Loans serviced by such Servicer, the tax reporting and withholding required by

Sections 1445 and 6050J of the Code with respect to foreclosures and

abandonments, the tax reporting required by Section 6050H of the Code with

respect to the receipt of mortgage interest from individuals and, if required by

Section 6050P of the Code with respect to the cancellation of indebtedness by

certain financial entities, by preparing such tax and information returns as may

be required, in the form required.

 

            If the Trust acquires any Mortgaged Property as described above or

otherwise in connection with a default or a default which is reasonably

foreseeable on a Mortgage Loan, the related Servicer shall dispose of such

Mortgaged Property prior to the end of the third calendar year following the

year of its acquisition by the Trust (such period, the "REO Disposition Period")

unless (A) the Trustee shall have been supplied by such Servicer with an Opinion

of Counsel to the effect that the holding by the Trust of such Mortgaged

Property subsequent to the REO Disposition Period will not result in the

imposition of taxes on "prohibited transactions" (as defined in Section 860F of

the Code) on any REMIC created hereunder or cause the Trust Estate to fail to

qualify as four REMICs at any time that any Certificates are outstanding, or (B)

the Trustee (at such Servicer's expense), or such Servicer shall have applied

for, prior to the expiration of the REO Disposition Period, an extension of the

REO Disposition Period in the manner contemplated by Section 856(e)(3) of the

Code. If such an Opinion of Counsel is provided or such an exemption is

obtained, the Trust may continue to hold such Mortgaged Property (subject to any

conditions contained in such Opinion of Counsel) for the applicable period.

Notwithstanding any other provision of this Agreement, no Mortgaged Property

acquired by the Trust shall be rented (or allowed to continue to be rented) or

otherwise used for the production of income by or on behalf of the Trust in such

a manner or pursuant to any terms that would (i) cause such Mortgaged Property

to fail to qualify as "foreclosure property" within the meaning of Section

860G(a)(8) of the Code or (ii) subject any REMIC created hereunder to the

imposition of any federal, state or local income taxes on the income earned from

such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless

the related Servicer has agreed to indemnify and hold harmless the Trust with

respect to the imposition of any such taxes. Each Servicer shall identify to the

Trustee any Mortgaged Property relating to a Mortgage Loan serviced by such

Servicer held by the Trust for 30 months for which no plans to dispose of such

Mortgaged Property by such Servicer have been made. After delivery of such

identification, the related Servicer shall proceed to dispose of any such

Mortgaged Property by holding a commercially reasonable auction fo



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