FLOW MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT

 

 

 

 

 

FLOW MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT

 

 

 

J.P.MORGAN MORTGAGE ACQUISITION CORP.,

Purchaser

 

 

CHASE MANHATTAN MORTGAGE CORPORATION,

Seller and Servicer

 

 

Dated as of May 1, 2004

 

 

Fixed Rate, First Lien Residential Mortgage Loans

Whole Loan Series 2004-WLP

 

 

TABLE OF CONTENTS

 

ARTICLE I

 

 

Section 1.01     Defined Terms

1

 

ARTICLE II

 

Section 2.01     Agreement to Purchase

15

Section 2.02     Purchase Price

15

Section 2.03     Servicing of Mortgage Loans

16

Section 2.04     Record Title and Possession of Mortgage Files;

                 Maintenance of Servicing Files

16

Section 2.05     Books and Records

17

Section 2.06     Transfer of Mortgage Loans

18

Section 2.07     Delivery of Mortgage Loan Documents

18

Section 2.08     Quality Control Procedures

20

 

ARTICLE III

Section 3.01     Representations and Warranties of the Seller

20

 

Section 3.02     Representations and Warranties as to Individual Mortgage Loans

23

Section 3.03     Repurchase; Substitution

33

 

ARTICLE IV

 

Section 4.01     Seller to Act as Servicer

35

Section 4.02     Collection of Mortgage Loan Payments

37

Section 4.03     Realization Upon Defaulted Mortgage Loans

38

Section 4.04     Establishment of Custodial Accounts; Deposits in Custodial Accounts

39

Section 4.05     Permitted Withdrawals from the Custodial Account

39

Section 4.06     Establishment of Escrow Accounts; Deposits in Escrow Accounts

41

Section 4.07     Permitted Withdrawals From Escrow Account

42

Section 4.08     Payment of Taxes, Insurance and Other Charges; Maintenance of Primary

Mortgage Insurance Policies; Collections Thereunder

43

      

 

Section 4.09     Transfer of Accounts

44

Section 4.10     Maintenance of Hazard Insurance

44

Section 4.11     Maintenance of Mortgage Impairment Insurance Policy

45

Section 4.12     Fidelity Bond, Errors and Omissions Insurance

45

Section 4.13     Title, Management and Disposition of REO Property

46

Section 4.14     Notification of Maturity Date

47

 

ARTICLE V

 

Section 5.01     Distributions

47

Section 5.02     Statements to the Purchaser

49

Section 5.03     Monthly Advances by the Seller

50

Section 5.04     Liquidation Reports

50

 

ARTICLE VI

 

Section 6.01     Assumption Agreements

50

Section 6.02     Satisfaction of Mortgages and Release of Mortgage Files

51

Section 6.03     Servicing Compensation

52

Section 6.04     Annual Statement as to Compliance

53

Section 6.05     Annual Independent Certified Public Accountants’ Servicing Report

54

Section 6.06     Purchaser's Right to Examine Records

54

Section 6.07     Annual Officers Certificate

54

 

ARTICLE VII

 

Section 7.01     Seller Shall Provide Information as Reasonably Required

55

 

ARTICLE VIII

 

Section 8.01     Indemnification; Third Party Claims

56

Section 8.02     Merger or Consolidation of the Seller

56

Section 8.03     Limitation on Liability of the Seller and Others

57

Section 8.04     Seller Not to Assign or Resign

57

Section 8.05     No Transfer of Servicing

57

 

ARTICLE IX

 

Section 9.01     Events of Default

58

Section 9.02     Waiver of Defaults

59

 

ARTICLE X

 

Section 10.01     Termination

60

Section 10.02     Termination Without Cause

60

 

ARTICLE XI

 

Section 11.01      Reconstitution of Mortgage Loans

60

 

ARTICLE XII

 

Section 12.01     Successor to the Seller

61

Section 12.02     Amendment

62

Section 12.03     Recordation of Agreement

62

Section 12.04     Governing Law

63

Section 12.05     Notices

63

Section 12.06     Severability of Provisions

63

Section 12.07     Exhibits

64

Section 12.08     General Interpretive Principles

64

Section 12.09     Reproduction of Documents

64

Section 12.10     Confidentiality of Information

65

Section 12.11     Recordation of Assignments of Mortgage

65

Section 12.12     Assignment by Purchaser

65

Section 12.13     No Partnership

66

Section 12.14     Execution;  Successors and Assigns

66

Section 12.15     Entire Agreement

66

Section 12.16     No Solicitation

66

Section 12.17     Closing

67

Section 12.18     Costs

67

Section 12.19

Closing Documents

68

 

 

EXHIBITS

 

   A

Contents of Mortgage File

   B

Custodial Account Letter Agreement

   C

Escrow Account Letter Agreement

   D

Form of Assignment and Assumption

   E

Form of Trade Confirmation

   F

Acknowledgment and Conveyance Agreement

   G

Request for Release of Documents and Receipt

   H

Lost Note Affidavit

I

Form of Officer’s Certification

J

Form of In-House Counsel Opinion

K

Product Guidelines

L

Form of Annual Certification

 

 

SCHEDULES

 

A

Purchase Price and Terms Letter dated as of May 27, 2004

 

 

 

 

 

 

This Flow Mortgage Loan Purchase, Warranties and Servicing Agreement, dated as of May 1, 2004, and is executed between J.P. Morgan Mortgage Acquisition Corp., a Delaware corporation having an office at 270 Park Ave., 6 ^th Floor, New York, NY 10017 (the “Purchaser) , and Chase Manhattan Mortgage Corporation, a New Jersey corporation, having an office at 300 Tice Boulevard, Woodcliff Lake, NJ 07677 (the “Seller”), as seller and servicer.

 

W I T N E S S E T H :

 

WHEREAS, the Purchaser agrees to purchase, from time to time, from the Seller, and the Seller has heretofore agrees to sell, from time to time, to the Purchaser, certain fixed rate, first lien Mortgage Loans, exclusive of the servicing rights associated with such Mortgage Loans, pursuant to the terms and conditions of this Agreement;.

 

WHEREAS, each of the purchases and sales of Mortgage Loans contemplated herein will be further evidenced by a Trade Confirmation (as defined below) and an Acknowledgement and Conveyance Agreement (as defined below), with the exception of the first purchase and sale made pursuant to this Agreement, which will be further evidenced by an a Purchase Price and Terms Letter, dated as of May 27, 2004,by and between the Seller and the Purchaser (a "Purchase Price and Terms Letter");

 

WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of trust or other security instrument creating a first lien on a residential dwelling located in the jurisdiction indicated on the related Mortgage Loan Schedule and

 

WHEREAS, the Purchaser and the Seller wish to prescribe the representations and warranties of the Seller with respect to itself and the Mortgage Loans and the management, servicing, transfer and control of the Mortgage Loans;

 

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Purchaser and the Seller acknowledge and agree to the recitals set forth above, each of which are incorporated into this Agreement and further agree as follows:

 

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 following meanings specified in this Article:

 

Accepted Servicing Practices :  With respect to any Mortgage Loan, those mortgage servicing practices (including collection procedures) of prudent mortgage banking institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, and which are in accordance with Fannie Mae servicing practices and procedures, for MBS pool mortgages, as defined in the Fannie Mae Guides including future updates.

 

Acknowledgment and Conveyance Agreement : The agreement substantially in the form of Exhibit F hereto to be executed by the Seller and the Purchaser on each Closing Date.

 

Agreement :  This Flow Mortgage Loan Purchase, Warranties and Servicing Agreement including all exhibits and schedules hereto, amendments hereof and supplements hereto.

 

ALTA:   The American Land Title Association or any successor thereto.

 

Applicable Requirements:  Shall mean and include with respect to the Mortgage Loans: (i) all contractual obligations of Seller, and the Originator and any Prior Servicers including, without limitation, those contractual obligations contained in this Agreement, in any agreement with any insurer or in the Mortgage Loan Documents, (ii) all applicable federal, state and local legal and regulatory requirements (including statutes, rules, regulations and ordinances) binding upon Seller, the Originator and any Prior Servicer; (iii) all other applicable requirements and guidelines of each governmental agency, board, commission, instrumentality and other governmental body or office having jurisdiction, including without limitation those of any insurer; (iv) all other applicable judicial and administrative judgments, orders, stipulations, awards, writs and injunctions; and (v) Accepted Servicing Practices.

 

Appraised Value :  With respect to any Mortgaged Property, the lesser of ( i)  the value thereof as determined by an appraisal made for the Originator of the Mortgage Loan at the time of origination of the Mortgage Loan and (ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely upon the value determined by an appraisal made for the originator of such Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage Loan.

 

Assignment of Mortgage :  An assignment of the Mortgage, notice of transfer or equivalent instrument, in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale or transfer of the Mortgage Loan.

 

Assignment and Assumption:  An assignment and assumption agreement in the form of Exhibit D hereto.

 

BIF :  The Bank Insurance Fund, or any successor thereto.

 

Business Day :  Any day other than: (i) a Saturday or Sunday, or (ii) a legal holiday in the State of New York, or (iii) a day on which banks in the State of New York are authorized or obligated by law or executive order to be closed.

 

Closing Date : A date on which the Seller shall sell and the Purchaser shall purchase Mortgage Loans under this Agreement as set forth in the related Trade Confirmation.

 

Code :  The Internal Revenue Code of 1986, as amended, or any successor statute thereto.

 

Condemnation Proceeds :  All awards or settlements in respect of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.

 

Co-op Lease :  With respect to a Co-op Loan, the lease with respect to a dwelling unit occupied by the Mortgagor and relating to the stock allocated to the related dwelling unit.

 

Co-op Loan :  A Mortgage Loan secured by the pledge of stock allocated to a dwelling unit in a residential cooperative housing corporation and a collateral assignment of the related Co-op Lease.

 

Custodial Account:  Each separate demand account or accounts created and maintained pursuant to Section 4.04 which shall be entitled "Chase Manhattan Mortgage Corporation, in trust for the Purchaser, J.P. Morgan Mortgage Acquisition Corporation, as Owner of Mortgage Loans” and shall be established in an Eligible Account, in the name of the Person that is the Purchaser with respect to the related Mortgage Loans.

Custodial Agreement :  That certain Custodial Agreement, dated as of June 24, 2003, by and between the Purchaser, the Custodian and the Servicer.

 

Custodian :  J.P. Morgan Chase Bank.

 

Cut-off Date : With respect to any Mortgage Loan purchased on a Closing Date, the first day of the month in which the related Closing Date occurs, or such other date as may be set forth in the related Trade Confirmation.

 

Determination Date :  The 15th day (or if such 15th day is not a Business Day, the Business Day immediately preceding such 15th day) of the month of the related Remittance Date.

 

Due Date : The day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.

 

Due Period :  With respect to any Remittance Date, the period commencing on the second day of the month preceding the month of such Remittance Date and ending on the first day of the month of the Remittance Date.

 

Eligible Account : An account that is (i) maintained with a depository institution the long-term unsecured debt obligations of which are rated by each Rating Agency in one of its two highest rating categories or (ii) maintained with the corporate trust department of a national bank or banking corporation which (a) has a rating of at least Baa3 or P-3 by Moody’s and (b) is either Chase or is the corporate trust department of a national bank or banking corporation which has a rating of at least A-1 by S&P or F1 by Fitch Ratings, or (iii) an account or accounts the deposits in which are fully insured by the FDIC, or (iv) an account or accounts in a depository institution in which such accounts are insured by the FDIC (to the limit established by the FDIC), the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee and each Rating Agency, the Certificate holders have a claim with respect to the funds in such account and a perfected first security interest against any collateral (which shall be limited to Eligible Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution with which such account is maintained, provided, however, that such uninsured deposits do not result in the reduction of the ratings assigned to the Certificates by the Rating Agencies as evidenced by a letter from each Rating Agency or (v) otherwise acceptable to each Rating Agency without reduction or withdrawal of the rating of any Class of Certificates, as evidenced by a letter from each Rating Agency.

 

Eligible Investment :  One or more of the following:

 

(i)

obligations of, or guaranteed as to principal and interest by, the United States or obligations of any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States; provided that any such obligation held as a “cash flow investment” within the meaning of section 860G(a)(6) of the Code shall mature before the next Distribution Date;

 

(ii)

repurchase agreements on obligations specified in clause (i) maturing not more than two months from the date of acquisition thereof, provided that the long-term unsecured obligations of the party agreeing to repurchase such obligations are at the time rated by each Rating Agency with its highest rating and the short-term debt obligations of the party agreeing to repurchase are rated with one of the two highest ratings by Moody’s and A-1+ by S&P;

 

(iii)

federal funds, certificates of deposit, time deposits and bankers’ acceptances (other than bankers’ acceptances issued by Chase or any of its Affiliates) (which shall each have an original maturity of not more than 60 days and, in the case of bankers’ acceptances, shall in no event have an original maturity of more than 365 days) of any United States depository institution or trust company incorporated under the laws of the United States or any state, provided that the long-term unsecured debt obligations of such depository institution or trust company at the date of acquisition thereof have been rated by each Rating Agency with its highest rating and the short-term obligations of such depository institution or trust company are rated A-1+ by S&P and P-1 by Moody’s;

 

(iv)

commercial paper (other than commercial paper issued by Chase or any of its Affiliates) (having original maturities of not more than 365 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated by each Rating Agency in its highest short-term unsecured commercial paper rating category; provided that such commercial paper shall have a remaining maturity of not more than 45 days;

 

(v)

units of taxable money market funds (including those for which the Trustee or the Servicer or any Affiliate thereof  receives compensation with respect to such investment) which may be 12b-1 funds, as contemplated under the rules promulgated by the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, and which funds have been rated by each Rating Agency in its highest rating category or which have been designated in writing by each Rating Agency as Eligible Investments with respect to this definition; or

 

 

(vi)

other obligations or securities (other than investments or obligations of Chase or any of its Affiliates) acceptable to each Rating Agency rating the Certificates as an Eligible Investment hereunder and will not result in a reduction or withdrawal in the then current rating of any Class of Certificates, as evidenced by a letter to such effect from each Rating Agency.

 

Provided that no such instrument shall be an Eligible Investment if such instrument evidences either (a) a right to receive only interest payments with respect to the obligations underlying such instrument, or (b) both principal and interest payments derived from obligations underlying such instrument where the interest and principal payments with respect to such instrument provide a yield to maturity of greater than 120% of the yield to maturity at par of such underlying obligations; and provided further that no such instrument shall be purchased above par; and provided further that each Eligible Investment must be a “permitted investment” within the meaning of Section 860G(a)(5) of the Code..

 

Escrow Account :  Each separate trust account or accounts created and maintained pursuant to Section 4.06 which shall be entitled "Chase Manhattan Mortgage Corporation, in trust for the Purchaser, J.P. Morgan Mortgage Acquisition Corporation, as Owner of Mortgage Loans and various Mortgagors" and shall be established in an Eligible Account, in the name of the Person that is the Purchaser with respect to the related Mortgage Loans.

 

Escrow Payments : With respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

 

Event of Default : Any one of the conditions or circumstances enumerated in Section 9.01.

 

Fannie Mae :  The Federal National Mortgage Association, commonly referred to as Fannie Mae, or any successor thereto.

 

Fannie Mae Guides :  The Fannie Mae Sellers' Guide and the Fannie Mae Servicers' Guide and all amendments or additions thereto.

 

FDIC :  The Federal Deposit Insurance Corporation, or any successor thereto.

 

FHLMC :  The Federal Home Loan Mortgage Corporation, commonly referred to as Freddie Mac, or any successor thereto.

 

FHLMC Guide : The FHLMC Single Family Seller/Servicer Guide and all amendments or additions thereto.

 

Fidelity Bond : A fidelity bond to be maintained by the Seller pursuant to Section 4.12.

 

FIRREA :  The Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

 

First Remittance Date : With respect to each Mortgage Loan Package, the date set forth in the related Trade Confirmation for the first remittance due from the Servicer to the Purchaser.

 

GAAP :  Generally accepted accounting procedures, consistently applied.

 

HUD :  The United States Department of Housing and Urban Development or any successor.

 

Insurance Proceeds :  With respect to each Mortgage Loan, proceeds of insurance policies insuring the Mortgage Loan or the related Mortgaged Property.

Interim Funder :  With respect to each MERS Designated Mortgage Loan, the Person named on the MERS® System as the interim funder pursuant to the MERS Procedures Manual.

Investor :  With respect to each MERS Designated Mortgage Loan, the Person named on the MERS® System as the investor pursuant to the MERS Procedures Manual.

 

Liquidation Proceeds :  Cash received in connection with the liquidation of a defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the related Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the Mortgage Loan.

 

Loan-to-Value Ratio or LTV :  With respect to any Mortgage Loan, the ratio of the original outstanding principal amount of the Mortgage Loan, to (i) the Appraised Value of the Mortgaged Property at origination with respect to a Refinanced Mortgage Loan, and (ii) the lesser of the Appraised Value of the Mortgaged Property at origination or the purchase price of the Mortgaged Property with respect to all other Mortgage Loans.

LPMI Policy :

A policy of primary mortgage guaranty insurance pursuant to which the related premium is to be paid by the Servicer of the related Mortgage Loan from payments of interest made by the Mortgagor.

Master Servicer : Any master servicer appointed by the Purchaser in its sole discretion in accordance with Section 11.01 hereof.

MERS :  Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.

MERS Designated Mortgage Loan :  Mortgage Loans for which (a) the Seller has designated or will designate MERS as, and has taken or will take such action as is necessary to cause MERS to be, the mortgagee of record, as nominee for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has designated or will designate the Custodian as the Investor on the MERS® System.

MERS Procedure Manual :  The MERS Procedures Manual, as it may be amended, supplemented or otherwise modified from time to time.

MERS Report :  The report from the MERS System listing MERS Designated Mortgage Loans and other information.

MERS® System :  MERS mortgage electronic registry system, as more particularly described in the MERS Procedures Manual.

 

Monthly Advance :  The aggregate of the advances made by the Seller on any Remittance Date pursuant to Section 5.03.

 

Monthly Payment :  The scheduled monthly payment of principal and interest on a Mortgage Loan which is payable by a Mortgagor under the related Mortgage Note.

 

Mortgage : With respect to a Mortgage Loan that is not a Co-op Loan, the mortgage, deed of trust or other instrument securing a Mortgage Note which creates a first lien on an unsubordinated estate in fee simple in real property securing the Mortgage Note; except that with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, the mortgage, deed of trust or other instrument securing the Mortgage Note may secure and create a first lien upon a leasehold estate of the Mortgagor.  With respect to a Co-op Loan, the security agreement creating a security interest in the stock allocated to a dwelling unit in the residential cooperative housing corporation that was pledged to secure such Co-op Loan and the related Co-op Lease.

 

Mortgage File:  The mortgage documents pertaining to a particular Mortgage Loan which are specified in Exhibit A hereto and any additional documents required to be added to the Mortgage File pursuant to this Agreement.

 

Mortgage Impairment Insurance Policy :  A mortgage impairment or blanket hazard insurance policy as required by Section 4.11.

 

Mortgage Interest Rate :  The annual rate at which interest accrues on any Mortgage Loan in accordance with the provisions of the related Mortgage Note.

 

Mortgage Loan :  An individual Mortgage Loan which is the subject of this Agreement, each Mortgage Loan originally sold and subject to this Agreement being identified on the Mortgage Loan Schedule, which Mortgage Loan includes without limitation the Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan, excluding replaced or repurchased mortgage loans.

 

Mortgage Loan Documents :  The documents listed in numbers 1 through 9, 16 and 24 on Exhibit A.

 

Mortgage Loan Package :

All of the Mortgage Loans described in a particular Trade Confirmation and purchased and sold on a particular Closing Date and set forth on the related Mortgage Loan Schedule annexed to the related Acknowledgement and Conveyance Agreement.

 

Mortgage Loan Remittance Rate :  With respect to each Mortgage Loan, the annual rate of interest remitted to the Purchaser, which shall be equal to the Mortgage Interest Rate minus the Servicing Fee Rate.

 

Mortgage Loan Schedule :  The schedule of Mortgage Loans annexed hereto as Annex 1 to each Acknowledgment and Conveyance Agreement, such schedule setting forth the following information with respect to each Mortgage Loan in the related Mortgage Loan Package:

 

(1)

the Seller's Mortgage Loan identifying number;

 

(2)

the Mortgagor's name;

 

(3)

the street address of the Mortgaged Property including the city, state and zip code;

 

(4)

a code indicating whether the Mortgaged Property is owner-occupied; a second home or an investor property;

 

(5)

the type of residential property constituting the Mortgaged Property;

 

(6)

the original months to maturity and the remaining months to maturity from the Cut-off Date, in any case based on the original amortization schedule and, if different, the maturity expressed in the same manner but based on the actual amortization schedule;

 

(7)

the Loan-to-Value Ratio at origination;

 

(8)

the Mortgage Interest Rate;

 

(9)

the stated maturity date;

 

(10)

the amount of the Monthly Payment as of the Cut-off Date;

 

(11)

the original principal amount of the Mortgage Loan;

 

(12)

the principal balance of the Mortgage Loan as of the opening of business on the Cut-off Date, after deduction of payments of principal due on or before the Cut-off Date whether or not collected;

 

(13)

 a code indicating the purpose of the Mortgage Loan (i.e., purchase, rate and term refinance, equity take-out refinance);

 

(14)

 a code indicating the documentation style (i.e. full, alternative or reduced);  

 

(15)

 the number of times during the twelve (12) month period preceding the Cut-off Date that any Monthly Payment has been received more than thirty (30) days after its Due Date;

 

(16)  the date on which the first payment is or was due;

 

(17)   a code indicating whether or not the Mortgage Loan is the subject of Primary Mortgage Insurance and, if so, the name of the primary mortgage insurer and the coverage percentage.

 

(18)  the number of units for all Mortgaged Properties;

 

(19)  the Mortgage Interest Rate as of the related Cut - off Date;

 

(20)  the amount of Monthly Payment at the time of origination

 

(21)  MIN #, if applicable;

 

(22)  the number of times during the twelve (12) month period preceding the related Cut - off Date that any Monthly Payment has been received more than thirty days after its Due Date; and

 

(23)  the date on which the first payment is or was due.

 

With respect to the Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the following information, as of the Cut-off Date:

 

(1)

the number of Mortgage Loans;

 

(2)

the current aggregate outstanding principal balance of the Mortgage Loans;

 

(3)

the weighted average Mortgage Interest Rate of the Mortgage Loans; and

 

(4)

the weighted average months to maturity of the Mortgage Loans;

 

Mortgage Note :  The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

 

Mortgaged Property : With respect to a Mortgage Loan that is not a Co-op Loan, the underlying real property securing repayment of a Mortgage Note, consisting of a single parcel of real estate considered to be real estate under the laws of the State in which such real property is located, which may include condominium units and planned unit developments, improved by a residential dwelling; except that with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, a leasehold estate of the Mortgagor, the term of which is equal to or longer than the term of the Mortgage. With respect to a Co-op Loan, the stock allocated to a dwelling unit in the residential cooperative housing corporation that was pledged to secure such Co-op Loan and the related Co-op Lease.

 

Mortgagor :  The obligor on a Mortgage Note.   

 

Negative Amortization: A gradual increase in the mortgage debt that occurs when the monthly fixed installment is not sufficient for full application to both principal and interest.  The interest shortage is added to the unpaid principal balance to create “negative” amortization.

 

OCC :  Office of the Comptroller of the Currency, its successors and assigns.

 

Officers' Certificate :  A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Senior Vice President or a Vice President and by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Seller, and delivered to the Purchaser as required by this Agreement.

 

Opinion of Counsel :  A written opinion of counsel, who may be an employee of the party on behalf of whom the opinion is being given, reasonably acceptable to the Purchaser, provided that any opinion of counsel relating to (a) qualification of the Mortgage Loans in a REMIC or (b) compliance with the REMIC Provisions, must be an opinion of counsel who (i) is in fact independent of the Servicer of the Mortgage Loans, (ii) does not have any material direct or indirect financial interest in the Servicer of the Mortgage Loans or in an affiliate of either and (iii) is not connected with the Servicer of the Mortgage Loans as an officer, employee, director or person performing similar functions.  The cost of the preparation and delivery of any such opinion requested by the Trustee shall be an expense of the Trust Fund unless Purchaser decides, in its own discretion, to bear such expense for the Trust Fund, in which case any such cost will be borne by Purchaser.

 

Originator:  Means, with respect to any Mortgage Loan, the entity(ies) that (i)  took the Mortgagor’s loan application (ii) processed the Mortgagor’s loan application, or (iii)

closed and/or funded the Mortgagor’s Mortgage Loan.

 

OTS :  Office of Thrift Supervision, its successors and assigns.

 

Person :  Any individual, corporation, limited liability corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

Prepayment Interest Shortfall Amount :  With respect to any Mortgage Loan that was subject to a Principal Prepayment in full or in part during any Principal Prepayment Period, which Principal Prepayment was applied to such Mortgage Loan during such Principal Prepayment Period, the amount of interest (at the Mortgage Loan Remittance Rate) that would have accrued on the amount of such Principal Prepayment during the period commencing on the date as of which such Principal Prepayment was applied to such Mortgage Loan and ending on the day immediately preceding the  Due Date, inclusive.

 

Primary Mortgage Insurance Policy :  Each primary policy of mortgage insurance represented to be in effect pursuant to the Mortgage Loan Schedule, or any replacement policy therefor obtained by the Seller pursuant to Section 4.08 in each case, in a form acceptable to Fannie Mae or FHLMC and issued  by a Qualified Insurer.

 

Prime Rate :  The prime rate announced to be in effect from time to time as published as the average rate in The Wall Street Journal (Northeast Edition).

 

Principal Prepayment :  Any payment or other recovery of principal on a Mortgage Loan, full or partial, which is received in advance of its scheduled Due Date, including any prepayment penalty or premium thereon and which 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.

 

Principal Prepayment Period :  With respect to any Remittance Date, the calendar month immediately preceding the month in which the related Remittance Date occurs.

 

Prior Servicer:  Any Person that was a servicer of any Mortgage Loan before Seller became the Servicer of the Mortgage Loan, if applicable.

 

Product Guidelines :   The product guidelines of the Seller, substantially in the form annexed hereto as Exhibit K.

 

Purchase Price : As defined in Section 2.02.

 

Purchase Price and Terms Letter : As defined in the Recitals to this Agreement.

 

Purchaser : J.P. Morgan Mortgage Acquisition Corp., its successors in interest and assigns.

 

Qualified Appraiser :  An appraiser, duly appointed by the Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.

 

Qualified Insurer :  An insurance company duly qualified as such under the laws of the states in which the Mortgaged Properties are located, duly authorized and licensed in such states to transact the applicable insurance business and to write the insurance provided, approved as an insurer by Fannie Mae and FHLMC.

 

Rating Agencies : Standard & Poor's Ratings Services, Moody's Investors Service, Inc. or, in the event that some or all ownership of the Mortgage Loans is evidenced by mortgage-backed securities, the nationally recognized rating agencies issuing ratings with respect to such securities, if any.

 

Refinanced Mortgage Loan :  A Mortgage Loan which was made to a Mortgagor who owned the Mortgaged Property prior to the origination of such Mortgage Loan and the proceeds of which were used in whole or part to satisfy an existing mortgage.

 

Regulation X:    HUD regulations implementing RESPA.

 

REMIC :  A "real estate mortgage investment conduit," as such term is defined in the Internal Revenue Code of 1986, as amended.

 

Remittance Date :  The 18th day of any month, beginning with the First Remittance Date, or if such 18th day is not a Business Day, the first Business Day immediately preceding such 18th day.

 

REO Disposition :  The final sale by the Seller of any REO Property.

 

REO Disposition Proceeds :  Amounts received by the Seller in connection with a related REO Disposition.

 

REO Property :  A Mortgaged Property acquired by the Seller on behalf of the Purchaser as described in Section 4.13.

 

Repurchase Price :  With respect to any Mortgage Loan, an amount equal to (A) the Stated Principal Balance of such Mortgage Loan as of the date of repurchase plus (B) interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate from and including the last Due Date through which interest has been paid on behalf of the Mortgagor or advanced by the Servicer to and including the day prior to such date of repurchase, less amounts received in respect of such repurchased Mortgage Loan for distribution in connection with such Mortgage Loan, plus amounts advanced, if any, by any servicer; provided, however, that if at the time of repurchase the Servicer is not the Seller or an affiliate of the Seller, the amount described in clause (B) shall be computed at the sum of (i) the Mortgage Loan Remittance Rate and (ii) the Servicing Fee Rate.

 

RESPA :  Real Estate Settlement Procedures Act, as amended.

 

SAIF :  The Savings Association Insurance Fund, or any successor thereto.

 

Sarbanes Certifying Party :  A Person who provides certification required under the Sarbanes-Oxley Act of 2002 in connection with a Securitization or other securitization transaction.

 

Securitization : The transfer of the Mortgage Loans to a trust formed as part of a publicly issued and/or privately placed, rated securitization, including the issuance of the related securities.

 

Seller's Officer's Certificate : A certificate signed by the Chairman of the Board, President, any Vice President or Treasurer of Seller stating the date by which Seller expects to receive any missing documents sent for recording from the applicable recording office.

 

Servicer : Chase Manhattan Mortgage Corporation, its successors and assigns.

 

Servicing Advances :  All customary, reasonable and necessary "out of pocket" costs and expenses (including reasonable attorneys' fees and disbursements) incurred in the performance by the Seller of its servicing obligations, including, but not limited to, the cost of (a) the preservation, restoration and protection of the Mortgaged Property, (b) any enforcement, administrative or judicial proceedings, or any legal work or advice specifically related to servicing the Mortgage Loans, including but not limited to, foreclosures, bankruptcies, condemnations, drug seizures, elections, foreclosures by subordinate or superior lienholders, and other legal actions incidental to the servicing of the Mortgage Loans (provided that such expenses are reasonable and that the Seller specifies the Mortgage Loan(s) to which such expenses relate, and provided further that any such enforcement, administrative or judicial proceeding does not arise out of a breach of any representation, warranty or covenant of the Seller hereunder), (c) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other charges which are or may become a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy premiums and fire and hazard insurance coverage, (e) any expenses reasonably sustained by the Seller, as servicer, with respect to the liquidation of the Mortgaged Property in accordance with the terms of this Agreement and (f) compliance with the obligations under Section 4.08.

 

Servicing Fee :  With respect to each Mortgage Loan, the amount of the annual fee the Purchaser shall pay to the Seller, which shall, for a period of one full month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan.  Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is computed.  The obligation of the Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is payable solely from, the interest portion (including recoveries with respect to interest from Liquidation Proceeds, to the extent permitted by Section 4.05) of such Monthly Payment collected by the Seller, or as otherwise provided under Section 4.05.

 

Servicing Fee Rate :  The Servicing Fee Rate shall be a rate per annum equal to 25 basis points (0.25%).

 

Servicing File :  With respect to each Mortgage Loan, the file retained by the Seller consisting of originals or images of originals of all documents in the Mortgage File which are not delivered to the Purchaser or its designee and copies of the Mortgage Loan Documents listed in Exhibit A, the originals of which are delivered to the Purchaser or its designee pursuant to Section 2.04.

 

Servicing Officer :  Any officer of the Seller involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name appears on a list of servicing officers furnished by the Seller to the Purchaser upon request, as such list may from time to time be amended.

 

Servicing Rights:  Means the obligations to collect the payments for the reduction of principal and application of interest, pay taxes and insurance, remit collected payments, provide foreclosure services, provide full escrow administration and otherwise administer the Mortgage Loans in accordance with Applicable Requirements, together with the right to receive the servicing fee income and any ancillary income arising from or connected to the Mortgage Loans.  Servicing Rights shall include retention of the related custodial escrow or impound accounts created and maintained by Seller with respect to the Mortgage Loans for the deposit and retention of interest and principal, taxes, assessments or grounds rents, hazard and mortgage insurance and other related escrow or custodial items.

 

Stated Principal Balance :  As to each Mortgage Loan as of any date of determination, (i) the principal balance of such Mortgage Loan at the Cut-off Date after giving effect to payments of principal due on or before such date, whether or not received, minus (ii) all amounts previously distributed to the Purchaser with respect to the Mortgage Loan representing payments or recoveries of principal or advances in lieu thereof.

 

Subservicer :  Any subservicer which is subservicing the Mortgage Loans pursuant to a Subservicing Agreement.  Any subservicer shall meet the qualifications set forth in Section 4.01.

 

Subservicing Agreement :  An agreement between the Seller and a Subservicer for the servicing of the Mortgage Loans.

 

Trade Confirmation: With respect to each purchase of a Mortgage Loan Package hereunder, that certain confirmation letter in the form of Exhibit E hereto setting forth the general terms, conditions and portfolio characteristics for each Mortgage Loan Package to be purchased hereunder as of any Closing Date.

 

 

 

Trade Date :  A date on which the Seller shall commit to sell and the Purchaser shall commit to purchase, pursuant to and as evidenced by the related Trade Confirmation, certain Mortgage Loans with the loan characteristics set forth in the related Trade Confirmation.

 

Trust :  Any trust identified by Purchaser into which Mortgage Loans have been placed as part of a reconstitution.

 

Trust Agreement :

The agreement pursuant to which the Trust is created.

 

Trustee :  Any trustee identified by Purchaser in connection with any Trust.

 

Trust Fund :  Any trust fund identified by the Trustee with respect to a Trust.

 

 

ARTICLE II

 

SERVICING OF MORTGAGE LOANS;

RECORD TITLE AND POSSESSION OF MORTGAGE FILES;

BOOKS AND RECORDS; CUSTODIAL AGREEMENT;

DELIVERY OF MORTGAGE LOAN DOCUMENTS

 

Section 2.01

Agreement to Purchase .

 

On each Trade Date, the Seller will agree to sell and the Purchaser will agree to purchase the Mortgage Loans with the loan characteristics set forth in the initial Purchase Price and Terms Letter or the subsequent related Trade. On the date of the initial Purchase Price and Terms Letter or the subsequent respective Trade Dates, the Seller has agreed to sell and the Purchaser has agreed to purchase the Mortgage Loans more particularly described in the Purchase Price and Terms Letters or the subsequent related Trade Confirmation. On each Closing Date, the Seller will sell and the Purchaser will purchase the Mortgage Loans in each Mortgage Loan Package, exclusive of the servicing rights associated therewith, having an aggregate principal balance on the related Cut-off Date in an amount as set forth in the related Mortgage Loan Schedule.  The Seller shall deliver the related Mortgage Loan Schedule for the Mortgage Loans to be purchased on the related Closing Date to the Purchaser at least two (2) Business Days prior to the related Closing Date. On each Closing Date, the parties will execute an Acknowledgement and Conveyance Agreement applicable to each such purchase and sale.

 

Section 2.02

Purchase Price .

 

The Purchase Price for each Mortgage Loan shall be the percentage of par as defined in the initial Purchase Price and Terms Letter or the subsequent related Trade Confirmation as the Purchase Price Percentage(subject to adjustment as provided therein), multiplied by the aggregate principal balance, as of the related Cut-off Date, of the Mortgage Loans in each Mortgage Loan Package, after application of scheduled payments of principal due on or before the related Cut-off Date whether or not collected.  The initial principal amount of the Mortgage Loans shall be the aggregate principal balance of the Mortgage Loans, so computed as of the related Cut-off Date.

 

In addition to the Purchase Price as described above, the Purchaser shall pay to the Seller, on the related Closing Date, accrued interest on the Stated Principal Balance of the Mortgage Loans as of the related Cut-off Date at the weighted average Mortgage Loan Remittance Rate of the Mortgage Loans from the Cut off Date through the day prior to the Closing Date, inclusive.

 

The Purchase Price plus accrued interest as set forth in the preceding paragraphs shall be paid on the related Closing Date by wire transfer of immediately available funds.

 

The Purchaser shall be entitled to (1) all scheduled principal due after the related Cut-off Date, (2) all other recoveries of principal collected on or after the related Cut-off Date (provided, however, that all scheduled payments of principal due on or before the related Cut-off Date and collected by the Seller or any successor servicer after the related Cut-off Date shall belong to the Seller), and (3) all payments of interest on the Mortgage Loans net of applicable Servicing Fees (minus that portion of any such payment which is allocable to the period prior to the related Cut-off Date).  The outstanding principal balance of each Mortgage Loan as of the related Cut-off Date is determined after application of payments of principal due on or before the related Cut-off Date whether or not collected, together with any unscheduled Principal Prepayments collected prior to the related Cut-off Date; provided, however, that payments of scheduled principal and interest prepaid for a Due Date beyond the related Cut-off Date shall not be applied to the principal balance as of the related Cut-off Date.  Such prepaid amounts shall be the property of the Purchaser.  The Seller shall deposit any such prepaid amounts into the Custodial Account, which account is established for the benefit of the Purchaser for subsequent remittance by the Seller to the Purchaser.

 

If a Mortgage Loan prepays in full between the Cut-off Date and the Closing Date, inclusive, the Seller shall either remove such Mortgage Loan from the Mortgage Loan Schedule or if the Mortgage Loan Schedule has been finalized, reimburse the Purchaser for the premium over par which the Purchaser paid within 5 business days of request by the Purchaser; provided, however, such request shall not be later than 60 days after the Closing Date.

 

 

If, subsequent to the related Closing Date, the amount on which the Purchase Price with respect to a Mortgage Loan was based is found to be in error, or if, for any other reason, the Purchase Price or such other amounts are found to be in error, within ten (10) Business Days of the receipt of information sufficient to provide notice that payment is due the party benefiting from the error shall pay an amount sufficient to correct and reconcile the Purchase Price plus interest thereon at an agreed upon market rate or such other amounts and shall provide a reconciliation statement and such other documentation sufficient reasonably to satisfy the other party concerning the accuracy of such reconciliation.

 

Section 2.03

Servicing of Mortgage Loans .

 

The Seller agrees that, as of each Closing Date,, the Seller will service the Mortgage Loans included in such the Mortgage Loan Package subject to the terms of this Agreement.  The rights of the Purchaser to receive payments with respect to the related Mortgage Loans shall be as set forth in this Agreement.

 

Section 2.04

Record Title and Possession of Mortgage Files; Maintenance of Servicing Files .

 

As of each Closing Date, the Seller sold, transferred, assigned, set over and conveyed to the Purchaser, without recourse, and the Seller hereby acknowledges that the Purchaser has, subject to the terms of this Agreement, all the right, title and interest of the Seller in and to the Mortgage Loans included in such related Mortgage Loan Package.  The delivery of the Mortgage Files was on the related Closing Date at the expense of the Seller.  Seller shall maintain a Servicing File consisting of a copy of the contents of each Mortgage File and the originals of the documents in each Mortgage File not delivered to the Purchaser. The Servicing File shall contain all documents necessary to service the Mortgage Loans.  The possession of each Servicing File by the Seller is at the will of the Purchaser, for the sole purpose of servicing the related Mortgage Loan, and such retention and possession by the Seller is in a custodial capacity only.  From the related Closing Date, the ownership of each Mortgage Loan, including the Mortgage Note, the Mortgage, the contents of the related Mortgage File and all rights, benefits, proceeds and obligations arising therefrom or in connection therewith, has been vested in the Purchaser.  All rights arising out of the Mortgage Loans including, but not limited to, all funds received on or in connection with the Mortgage Loans and all records or documents with respect to the Mortgage Loans prepared by or which come into the possession of the Seller shall be received and held by the Seller in trust for the benefit of the Purchaser as the owner of the Mortgage Loans.  Any portion of the Mortgage Files retained by the Seller shall be appropriately identified in the Seller's computer system to clearly reflect the ownership of the Mortgage Loans by the Purchaser.  The Seller shall release its custody of the contents of the Mortgage Files only in accordance with written instructions of the Purchaser, except when such release is required as incidental to the Seller's servicing of the Mortgage Loans or is in connection with a repurchase of any Mortgage Loan or Loans with respect thereto pursuant to this Agreement, such written instructions shall not be required.

 

Section 2.05

Books and Records .

 

On the related Closing Date,the sale of each Mortgage Loan included in such Mortgage Loan Package has been reflected on the Seller's balance sheet and other financial statements as a sale of assets by the Seller.  The Seller shall be responsible for maintaining, and shall maintain, a complete set of books and records for the Mortgage Loans which shall be appropriately identified in the Seller's computer system to clearly reflect the ownership of the Mortgage Loan by the Purchaser.  In particular, the Seller shall maintain in its possession, available for inspection by the Purchaser, or its designee and shall deliver to the Purchaser upon demand, evidence of compliance with all federal, state and local laws, rules and regulations, and requirements of Fannie Mae or FHLMC, as applicable, including but not limited to documentation as to the method used in determining the applicability of the provisions of the Flood Disaster Protection Act of 1973, as amended, to the Mortgaged Property, documentation evidencing insurance coverage and eligibility of any condominium project for approval by Seller and periodic inspection reports as required by Section 4.13.  To the extent that original documents are not required for purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller may be in the form of microfilm or microfiche or such other reliable means of recreating original documents, including but not limited to, optical imagery techniques so long as the Seller complies with the requirements of the Fannie Mae Guides.

 

The Seller shall maintain with respect to each Mortgage Loan and shall make available for inspection by any Purchaser or its designee the related Servicing File during the time the Purchaser retains ownership of a Mortgage Loan and thereafter in accordance with applicable laws and regulations.

 

In addition to the foregoing, Seller shall provide to any supervisory agents or examiners that regulate Purchaser, including but not limited to, the OTS, the FDIC and other similar entities, access, during normal business hours, upon reasonable advance notice to Seller and without charge to Purchaser or such supervisory agents or examiners, to any documentation regarding the Mortgage Loans that may be required by any applicable regulator.  It is anticipated that Purchaser will reimburse Seller for its out-of-pocket expenses incurred in complying with this requirement.

 

Section 2.06

Transfer of Mortgage Loans .

 

The Seller shall keep at its servicing office books and records in which, subject to such reasonable regulations as it may prescribe, the Seller shall note transfers of Mortgage Loans.  No transfer of a Mortgage Loan may be made unless such transfer is in compliance with the terms hereof.  For the purposes of this Agreement, the Seller shall be under no obligation to deal with any person with respect to this Agreement or any Mortgage Loan unless a notice of the transfer of such Mortgage Loan has been delivered to the Seller in accordance with this Section 2.06 and the books and records of the Seller show such person as the owner of the Mortgage Loan.  The Purchaser may, subject to the terms of this Agreement, sell and transfer one or more of the Mortgage Loans, provided , however , that (i) the transferee will not be deemed to be a Purchaser hereunder binding upon the Seller unless such transferee shall agree in writing to be bound by the terms of this Agreement and an original counterpart of the instrument of transfer and an Assignment and Assumption of this Agreement in substantially the form of Exhibit D hereto executed by the transferee shall have been delivered to the Seller, (ii) in no event shall there be more than three (3) Persons at any given time for each Mortgage Loan Package having the status of "Purchaser" under each of the reconstitution transactions, as more particularly described in Sections 11.01 and 12.12 hereunder, and (iii) if the Seller is to service pursuant to a reconstitution transactions, the agreement will not contain any greater obligations on the part of the Seller than are contained in this Agreement.  The Purchaser also shall advise the Seller of the transfer.  Upon receipt of notice of the transfer, the Seller shall mark its books and records to reflect the ownership of the Mortgage Loans of such assignee, and the previous Purchaser shall be released from its obligations hereunder with respect to the Mortgage Loans sold or transferred.

 

Section 2.07

Delivery of Mortgage Loan Documents .

 

  The Mortgage Loan Documents shall be held by the Seller’s Custodian, JPM Chase Bank, and released to the Purchaser or its designee, JPMorgan Chase Bank, upon completion of all closing provisions, in accordance with section 12.07. .  All other documents in Exhibit A hereto, together with all other documents executed in connection with the Mortgage Loan that Seller may have in its possession, shall be retained by the Servicer in trust for the Purchaser.  If the Seller cannot deliver the original recorded Mortgage Loan Documents or the original policy of title insurance, including riders and endorsements thereto, on the related Closing Date, the Seller shall, promptly upon receipt thereof and in any case not later than 180 days from the related Closing Date, deliver such original documents, including original recorded documents, to the Purchaser or its designee (unless the Seller is delayed in making such delivery by reason of the fact that such documents shall not have been returned by the appropriate recording office).  If delivery is not completed within 180 days of the related Closing Date solely due to delays in making such delivery by reason of the fact that such documents shall not have been returned by the appropriate recording office, Seller shall deliver such document to Purchaser, or its designee, within such time period as specified in a Seller's Officer's Certificate.  In the event that documents have not been received by the date specified in the Seller's Officer's Certificate, a subsequent Seller's Officer's Certificate shall be delivered by such date specified in the prior Seller's Officer's Certificate, stating a revised date for receipt of documentation.  The procedure shall be repeated until the documents have been received and delivered. The Seller shall continue to use commercially reasonable best efforts to effect delivery within 270 days of the related Closing Date.

 

The Seller shall pay all initial recording fees, for the Assignments of Mortgage or Form UCC-3’s for Co-op Loans and any other fees in connection with the transfer of all original documents to the Purchaser or its designee.  Seller shall prepare, in recordable form, all Assignments of Mortgage or Form UCC-3’s for Co-op Loans necessary to assign the Mortgage Loans to Purchaser, or its designee.  Seller shall be responsible for recording the Assignments of Mortgage or Form UCC-3’s for Co-op Loans.

 

Seller shall provide a copy of the title insurance policy to Purchaser or its designee within ninety (90) days of the receipt of the recorded documents (required for issuance of such policy) from the applicable recording office.

 

Any review by the Purchaser, or its designee, of the Mortgage Files shall in no way alter or reduce the Seller's obligations hereunder.

 

If the Purchaser or its designee discovers any defect with respect to a Mortgage File, the Purchaser shall, or shall cause its designee to, give written specification of such defect to the Seller in the exception report or the certification delivered pursuant to this Section 2.07, and the Seller shall cure or repurchase such Mortgage Loan in accordance with Section 3.03.

 

The Seller shall forward to the Purchaser, or its designee,  original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 in accordance with the Fannie Mae Guides; provided, however, that the Seller shall provide the Purchaser, or its designee, with a certified true copy of any such document submitted for recordation within one week of its execution, and shall provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within sixty (60) days of its submission for recordation.

 

From time to time, in order to fulfill its obligations hereunder, the Seller may have a need for Mortgage Loan Documents to be released from Purchaser, or its designee.  Purchaser shall, or shall cause its designee, upon the written request of the Seller, within ten (10) Business Days, deliver to the Seller, any requested documentation previously delivered to Purchaser as part of the Mortgage File, provided that such documentation is promptly returned to Purchaser, or its designee, when the Seller no longer requires possession of the document, and provided that during the time that any such documentation is held by the Seller, such possession is in trust for the benefit of Purchaser.  Seller shall indemnify Purchaser, and its designee, from and against any and all losses, claims, damages, penalties, fines, forfeitures, costs and expenses (including court costs and reasonable attorney's fees) resulting from or related to the loss, damage, or misplacement of any documentation delivered to Seller pursuant to this paragraph.

 

Any and all documents required to be delivered pursuant to this Section 2.07 other than those Mortgage Loan Documents required to be delivered within five (5) Business Days prior to the related Closing Date shall be delivered to the Custodian at the following addressee: JPMorgan Chase Bank, 1040 Oliver Road, Monroe, LA 71201.

 

Section 2.08

Quality Control Procedures .

 

The Seller must have an internal quality control program that verifies, on a regular basis, the existence and accuracy of the legal documents, credit documents, property appraisals, and underwriting decisions.  The program must be capable of evaluating and monitoring the overall quality of its loan production and servicing activities.  The program is to ensure that the Mortgage Loans are originated and serviced in accordance with prudent mortgage banking practices and accounting principles; guard against dishonest, fraudulent, or negligent acts; and guard against errors and omissions by officers, employees, or other authorized persons.

 

SECTION 2.09

Review of Mortgage Files .

 

Within the time period provided in the related Trade Confirmation, the Purchaser shall have the right to conduct a 100% due diligence review of the legal and credit files applicable to the Mortgage Loans. As part of the due diligence review, the Purchaser shall have the right to reject any Mortgage Loan which is determined not to be in compliance with the Seller’s underwriting guidelines or the terms of the Trade Confirmation. The Purchaser shall in good faith use reasonable efforts to complete its due diligence review of the Mortgage Loans within the time period provided in the related Trade Conformation; provided, however, that the Purchaser’s due diligence review shall, in no event, be completed later than five (5) business days prior to the Closing Date unless Seller fails to provide Purchaser with the information reasonably required for Purchaser to complete its due diligence review within such time period.  The fact that the Purchaser has conducted or has failed to conduct any partial or complete examination of the legal and credit files prior to the Closing Date shall not affect the Purchaser’s rights and remedies or Seller’s obligations under the Trade Confirmation or this Agreement, including, without limitation, the Purchaser’s rights and remedies to indemnification and to demand repurchase of any Mortgage Loan.

 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF

THE SELLER; REPURCHASE; REVIEW OF MORTGAGE LOANS

 

Section 3.01

Representations and Warranties of the Seller

 

The Seller represents, warrants and covenants to the Purchaser that as of each Closing Date or as of such date specifically provided herein:

 

(a)

The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey and has all licenses necessary to carry out its business as now being conducted, and is licensed and qualified to transact business in and is in good standing under the laws of each state in which any Mortgaged Property is located or is otherwise exempt under applicable law from such licensing or qualification or is otherwise not required under applicable law to effect such licensing or qualification and no demand for such licensing or qualification has been made upon such Seller by any such state, and in any event such Seller is in compliance with the laws of any such state to the extent necessary to ensure the enforceability of each Mortgage Loan and the servicing of the Mortgage Loans in accordance with the terms of this Agreement;

 

(b)  

The Seller has the full power and authority and legal right to hold, transfer and convey each Mortgage Loan, to sell each Mortgage Loan included in the related Mortgage Loan Package and to execute, deliver and perform, and to enter into and consummate all transactions contemplated by this Agreement and to conduct its business as presently conducted, has duly authorized the execution, delivery and performance of this Agreement and any agreements contemplated hereby, has duly executed and delivered this Agreement, and any agreements contemplated hereby, and this Agreement and each Assignment of Mortgage to the Purchaser and any agreements contemplated hereby, constitutes a legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms, and all requisite corporate action has been taken by the Seller to make this Agreement and all agreements contemplated hereby valid and binding upon the Seller in accordance with their terms;

 

(c)  

None of the execution and delivery of this Agreement, the origination of the Mortgage Loans by the Seller, the sale of the Mortgage Loans to the Purchaser, the consummation of the transactions contemplated hereby, or the fulfillment of or compliance with the terms and conditions of this Agreement will conflict with any of the terms, conditions or provisions of the Seller's charter or by-laws or materially conflict with or result in a material breach of any of the terms, conditions or provisions of any legal restriction or any agreement or instrument to which the Seller is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or result in the material violation of any law, rule, regulation, order, judgment or decree to which the Seller or its property is subject or impair the ability of the Purchaser to realize on the Mortgage Loans or impair the value of the Mortgage Loans;

 

(d)  

Each Mortgage Note, each Mortgage, each Assignment of Mortgage and any other documents required pursuant to this Agreement to be delivered to the Purchaser or its designee, or its assignee for each Mortgage Loan, have been, on or before the related Closing Date, delivered to the Purchaser or its designee, or its assignee;

 

(e)  There is no litigation, suit, proceeding or investigation pending or threatened, or any order or decree outstanding, with respect to the Seller which, either in one instance or in the aggregate, is reasonably likely to have a material adverse effect on the sale or servicing of the Mortgage Loans, the execution, delivery, performance or enforceability of this Agreement, or which is reasonably likely to have a material adverse effect on the financial condition of the Seller.

 

(f)  No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Seller of or compliance by the Seller with this Agreement, or the sale of the Mortgage Loans and delivery of the Mortgage Files to the Purchaser or the consummation of the transactions contemplated by this Agreement, except for consents, approvals, authorizations and orders which have been obtained;

 

(g)  The consummation of the transactions contemplated by this Agreement is in the ordinary course of business of the Seller, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are not subject to bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction;

 

(h)  The origination, collection and servicing practices used by the Seller, any Originator and Prior Servicers, with respect to each Mortgage Note and Mortgage have been legal and in accordance with applicable laws and regulations, and in all material respects proper and prudent in the mortgage origination and servicing business.  With respect to escrow deposits and payments that the Seller is entitled to collect, all such payments are in the possession of, or under the control of, the Seller, and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made.  All escrow payments have been collected in full compliance with state and federal law and the provisions of the related Mortgage Note and Mortgage.  As to any Mortgage Loan that is the subject of an escrow, escrow of funds is not prohibited by applicable law and has been established in an amount sufficient to pay for every escrowed item that remains unpaid and has been assessed but is not yet due and payable.  No escrow deposits or other charges or payments due under the Mortgage Note have been capitalized under any Mortgage or the related Mortgage Note;

 

(i)  The Seller used no adverse selection procedures in selecting from among the outstanding first lien residential mortgage loans owned by it which were available for inclusion in the sale to Purchaser;

 

(j)

The Seller will treat the sale of the Mortgage Loans to the Purchaser as a sale for reporting and accounting purposes and, to the extent appropriate, for federal income tax purposes;

 

(k)

Seller is an approved seller/servicer of residential mortgage loans for Fannie Mae/FHLMC and HUD, with such facilities, procedures and personnel necessary for the sound servicing of such mortgage loans.  The Seller is duly qualified, licensed, registered and otherwise authorized under all applicable federal, state and local laws, and regulations, if applicable, meets the minimum capital requirements set forth by the OCC, and is in good standing to sell mortgage loans to and service mortgage loans for Fannie Mae/FHLMC and no event has occurred which would make Seller unable to comply with eligibility requirements or which would require notification to either Fannie Mae or FHLMC;

 

(l)

The Seller does not believe, nor does it have any cause or reason to believe, that it cannot perform each and every covenant contained in this Agreement. The Seller is solvent and the sale of the Mortgage Loans will not cause the Seller to become insolvent.  The sale of the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any of the Seller’s creditors;

 

(m)

No statement, tape, diskette, form, report or other document prepared by, or on behalf of, Seller pursuant to this Agreement or in connection with the transactions contemplated hereby, contains or will contain any statement that is or will be inaccurate or misleading in any material respect;

 

(n)

The Seller acknowledges and agrees that the Servicing Fee represents reasonable compensation for performing such services and that the entire Servicing Fee shall be treated by the Seller, for accounting and tax purposes, as compensation for the servicing and administration of the Mortgage Loans pursuant to this Agreement; in the opinion of Seller, the consideration received by Seller upon the sale of the Mortgage Loans to Purchaser under this Agreement constitutes fair consideration for the Mortgage Loans under current market conditions.

 

(o)

If requested by the Purchaser, the Seller has delivered to the Purchaser financial statements as to its last two complete fiscal years.  All such financial statements fairly present the pertinent results of operations and changes in financial position for each of such periods and the financial position at the end of each such period of the Seller and its subsidiaries and have been prepared in accordance with GAAP consistently applied throughout the periods involved, except as set forth in the notes thereto.  There has been no change in the business, operations, financial condition, properties or assets of the Seller since the date of the Seller’s financial statements that would have a material adverse effect on its ability to perform its obligations under this Agreement;

 

(p)

The Seller has not dealt with any broker, investment banker, agent or other person that may be entitled to any commission or compensation in connection with the sale of the Mortgage Loans; and

 

(q) The Seller is a member of MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the MERS Mortgage Loans for as long as such Mortgage Loans are registered with MERS.

 

Section 3.02

Representations and Warranties as to

Individual Mortgage Loans.

 

The Seller hereby represents and warrants to the Purchaser, as to each Mortgage Loan included in each Mortgage Loan Package, as of the related Closing Date (unless another date is specified in the body of the representation and warranty) as follows:

 

(a)

The information set forth in the Mortgage Loan Schedule is complete, true and correct in all material respects as of the Cut-off Date;

 

(b)

With respect to a Mortgage Loan that is not a Co-op Loan, the Mortgage creates a valid, subsisting and enforceable first lien or a first priority ownership interest in an estate in fee simple in real property securing the related Mortgage Note, except that with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, the Mortgage may secure and create a first lien upon a leasehold estate of the Mortgagor.With respect to a Mortgage Loan that is a Co-op Loan, the Mortgage creates a first lien or a first priority ownership interest in the stock ownership and leasehold rights associated with the cooperative unit securing the related Mortgage Note;

 

(c)  All payments due prior to the related Cut-off Date for such Mortgage Loan have been made and credited as of the related Closing Date, the Mortgage Loan is not delinquent and has not been dishonored; there are no material defaults under the terms of the Mortgage Loan; the Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the Mortgagor, directly or indirectly, for the payment of any amount required by the Mortgage Loan; and there has been no more than one delinquency during the preceding twelve-month period, and such delinquency did not last more than thirty (30) days;

 

(d)  There are no defaults by Seller in complying with the terms of the Mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or escrow funds have been established in an amount sufficient to pay for every such escrowed item which remains unpaid and which has been assessed but is not yet due and payable;

 

(e)  The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any respect, except by written instruments which have been recorded to the extent any such recordation is required by law, or, necessary to protect the interest of the Purchaser. No instrument of waiver, alteration or modification has been executed, and no Mortgagor has been released, in whole or in part, from the terms thereof except in connection with an assumption agreement and which assumption agreement is part of the Mortgage File and the terms of which are reflected in the Mortgage Loan Schedule; the substance of any such waiver, alteration or modification has been approved by the issuer of any related Primary Mortgage Insurance Policy and title insurance policy, to the extent required by the related policies;

 

(f)  The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render the Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto; and the Mortgagor was not a debtor in any state or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated or as of the Closing Date;

 

(g)

All buildings or other customarily insured improvements upon the Mortgaged Property are insured by an insurer acceptable under the Fannie Mae Guides, against loss by fire, hazards of extended coverage and such other hazards as are provided for in the Fannie Mae Guides or by FHLMC, as well as all additional requirements set forth in Section 4.10 of this Agreement. All such standard hazard policies are in full force and effect and on the date of origination contained a standard mortgagee clause naming the Seller and its successors in interest and assigns as mortgagee loss payee and such clause is still in effect and all premiums due thereon have been paid.  If required by the Flood Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration which policy conforms to Fannie Mae and FHLMC requirements, as well as all additional requirements set forth in Section 4.10 of this Agreement.  Such policy was issued by an insurer acceptable under Fannie Mae or FHLMC guidelines.   The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and expense, and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain such insurance at the Mortgagor's cost and expense and to seek reimbursement therefor from the Mortgagor. The hazard insurance policy is the valid and binding obligation of the Insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of the Purchaser upon the consummation of the transactions contemplated by this Agreement.  The Seller has not engaged in, and has no knowledge of the Mortgagor’s or any Originator’s or Prior Servicer’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either;

 

(h)

 Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, RESPA, consumer credit protection, predatory, equal credit opportunity, fair lending or disclosure laws applicable to the Mortgage Loan have been complied with in all material respects; the Seller has maintained, and as servicer shall continue to maintain, evidence of such compliance as required by applicable law or regulation and shall make such evidence available for inspection at Seller’s office during normal business hours upon reasonable advance notice;

 

(i)

 The Mortgage has not been satisfied, canceled or subordinated, in whole or in part, or rescinded, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. The Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has the Seller waived any default resulting from any action or inaction by the Mortgagor;

 

(j)

 The Mortgage is a valid, subsisting, enforceable and perfected first lien on the Mortgaged Property, including for Mortgage Loans that are not Co-op Loans, on all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems affixed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing securing the Mortgage Note's original principal balance.  The Mortgage and the Mortgage Note do not contain any evidence of any security interest or other interest or right thereto.  Such lien is free and clear of all adverse claims, liens and encumbrances having priority over the first lien of the Mortgage subject only to (1) the lien of non-delinquent current real property taxes and assessments not yet due and payable, (2) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording which are acceptable to mortgage lending institutions generally and either (A) which are referred to in either the Originator’s title insurance policy (to the extent short form policies are not utilized) and in the appraisal made for the Originator of the Mortgage Loan, or (B) which do not adversely affect the Appraised Value of the Mortgaged Property as set forth in such appraisal, and (3) other matters to which like properties are commonly subject which do not individually or in the aggregate materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.  Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting, enforceable and perfected first lien and first priority security interest on the property described therein, and the Seller has the full right to sell and assign the same to the Purchaser.

 

(k)  The Mortgage Note and the related Mortgage are original and genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in all respects in accordance with its terms subject to bankruptcy, insolvency and other laws of general application affecting the rights of creditors and the Seller has taken all action necessary to transfer such rights of enforceability to the Purchaser.  All parties to the Mortgage Note and the Mortgage had the legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage.  The Mortgage Note and the Mortgage have been duly and properly executed by such parties. No fraud, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of Seller or the Mortgagor, or, to the best of Seller's knowledge, on the part of any other party involved in the origination of the Mortgage Loan.  The proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvements and as to disbursements of any escrow funds therefor have been satisfied.  All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid or are in the process of being paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage;

 

(l) Immediately prior to the transfer and assignment to the Purchaser on the Closing Date, the Seller is the sole owner of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note, and the Seller (or the Seller's designee, Mortgage Electronic Registration System, Inc. ("MERS"), is the holder of the Mortgage, and Seller or the Seller’s designee MERS is the holder of record of the Mortgage, except for the Assignments of Mortgage which have not yet been sent for recording or recorded, and upon recordation (but prior to the recordation of the Assignment of Mortgage to Purchaser) the Seller (or its designee, MERS) will be the holder of record of each Mortgage and upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage Files or any part thereof with respect thereto not delivered to the Purchaser or the Purchaser’s designee, in trust, only for the purpose of servicing and supervising the servicing of each Mortgage Loan. Immediately prior to the transfer and assignment to the Purchaser on the Closing Date, the Mortgage Loan, including the Mortgage Note and the Mortgage, were not subject to an assignment (other than the assignments  by Seller of record title to, but not of any beneficial interest in the Mortgage to Seller's designee, MERS, if applicable), sale or pledge, and the Seller had good and marketable title to and was the sole owner thereof and had full right to transfer and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest and has the full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign the Mortgage Loan pursuant to this Agreement and following the sale of the Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest.  The Seller intends to relinquish all rights to possess, control and monitor the Mortgage Loan, except for the purposes of servicing the Mortgage Loan as set forth in this Agreement.  After the Closing Date, the Seller will have no right to modify or alter the terms of the sale of the Mortgage Loan and the Seller will have no obligation or right to repurchase the Mortgage Loan or substitute another Mortgage Loan, except as provided in this Agreement, or as otherwise agreed to by the Seller and the Purchaser. On or prior to the Closing Date, the Seller will cause the MERS System to name the Purchaser as the Investor on the MERS System and no Person is listed as Interim Funder on the MERS system;

 

 

(m)  Each Mortgage Loan that is not a Co-op is covered by an ALTA lender's title insurance policy or other generally acceptable form of policy or insurance acceptable to Fannie Mae or FHLMC, issued by a title insurer acceptable to Fannie Mae or FHLMC and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring (subject to the exceptions contained in (j)(1), (2) and (3) above) the Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress, and against encroachments by or upon the Mortgaged Property or any interest therein.  The Seller, its successors and assigns, are the sole insureds of such lender's title insurance policy, such title insurance policy has been duly and validly endorsed to the Purchaser and/or the assignment to the Purchaser of the Seller's interest therein does not require the consent of or notification to the insurer and such lender's title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement.  No claims have been made under such lender's title insurance policy, and no prior holder of the related Mortgage, including the Seller, has done, by act or omission, anything which would impair the coverage of such lender's title insurance policy;

 

(n)

There is no default, breach, violation or event of acceleration existing under the Mortgage or the related Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event permitting acceleration; and neither the Seller nor any prior mortgagee has waived any default, breach, violation or event permitting acceleration;

 

(o) There are no mechanics' or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to or equal to the lien of the related Mortgage;

 

(p) All improvements subject to the Mortgage which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property (and wholly within the project with respect to a condominium unit) and no improvements on adjoining properties encroach upon the Mortgaged Property except those which are insured against by the title insurance policy referred to in clause (m) above and all improvements on the Mortgaged Property comply with all applicable zoning and subdivision laws and ordinances;

 

(q)

The Mortgage Loan was originated by or for the Seller.  The Mortgage Loan complies with all the terms, conditions and requirements of the Product Guidelines in effect at the time of origination of such Mortgage Loan. Copies of the Product Guidelines for the mortgage products, which correspond to the mortgage loans to be purchased by the Purchaser, have been provided to Purchaser.  The Mortgage Notes and Mortgages are on forms generally acceptable to Fannie Mae or FHLMC. The Mortgage Loan bears interest at a fixed rate as set forth in the Mortgage Loan Schedule, and Monthly Payments under the Mortgage Note are due and payable on the first day of each month.  The Mortgage contains the usual and enforceable provisions for the acceleration of the payment of the unpaid principal amount of the Mortgage Loan if the related Mortgaged Property is sold or transferred without the prior consent of the mortgagee thereunder.  At the time the Mortgage Loan was originated, the Originator was either a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act or a savings and loan association, a savings bank, a commercial bank or similar banking institution or a licensed mortgage company which is supervised and examined by a Federal or State authority, or is appropriately licensed in the applicable jurisdiction for the origination activities performed.

 

(r)

 The Mortgaged Property is not subject to any material damage by waste, fire, earthquake, windstorm, flood or other casualty.  At origination of the Mortgage Loan there was, there has not been, and there currently is, no proceeding pending, or to the actual knowledge of Seller threatened, for the total or partial condemnation of the Mortgaged Property.  To the best of Seller's knowledge, there are no such proceedings scheduled to commence at a future date;

 

(s) The related Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (1) in the case of a Mortgage designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial foreclosure.  There is no homestead or other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage;

 

(t)

 If the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified if required under applicable law to act as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses, except as may be required by local law, are or will become payable by the Purchaser to the trustee under the deed of trust, except in connection with a trustee's sale or attempted sale after default by the Mortgagor;

 

(u)  The Mortgage File contains an appraisal of the related Mortgaged Property signed prior to the final approval of the mortgage loan application by a Qualified Appraiser who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae or FHLMC and Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.  The appraisal is in a form acceptable to Fannie Mae or FHLMC and was made by a Qualified Appraiser;

 

(v)  All parties which have had any interest in the Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (A) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (B) (1) organized under the laws of such state, or (2) qualified to do business in such state, or (3) federal savings and loan associations or national banks or a Federal Home Loan Bank or savings bank having principal offices in such state, or (4) not doing business in such state;

 

(w) The related Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to above and such collateral does not serve as security for any other obligation;

 

(x) The Mortgagor has received all disclosure materials required by applicable law with respect to the making of such mortgage loans;

 

(y) The Mortgage Loan does not contain "graduated payment", “contingent interest”, “shared appreciation” or “buydown” features;

 

(z) The Mortgagor was not in bankruptcy on the date of origination of the Mortgage Loan and, to the best of the Seller's knowledge, as of the Closing Date, the Mortgagor is not insolvent or in bankruptcy and the Seller has no knowledge of any circumstances or condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit standing that could reasonably be expected to cause investors to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become delinquent, or materially adversely affect the value or marketability of the Mortgage Loan;

 

(aa) The Mortgage Loans are fixed rate mortgage loans.  The Mortgage Loans have an original term to maturity of not more than 30 years, with interest payable in arrears on the first day of each month.  Each Mortgage Note requires equal monthly payments which are sufficient to fully amortize the original principal balance over the original term thereof and to pay interest at the related Mortgage Interest Rate. No Mortgage Loan contains terms or provisions which would result in Negative Amortization;

 

(bb) In the event the Mortgage Loan had an LTV greater than 80.0% at origination, (i) the excess of the principal balance of the Mortgage Loan over 65.0% of the Appraised Value of the Mortgaged Property with respect to a Refinanced Mortgage Loan, or (ii) the lesser of the Appraised Value or the purchase price of the Mortgaged Property with respect to a purchase money Mortgage Loan, was insured as to payment defaults by a Primary Mortgage Insurance Policy issued by a Qualified Insurer; except that where either (i) or (ii) was impermissible at origination under applicable law, such Mortgage Loan was originated in compliance with applicable law.  Unless the Primary Mortgage Insurance Policy for a Mortgage Loan was either cancelled upon borrower request or terminated, in either case in accordance with applicable law or the requirements of FNMA, all provisions of such Primary Mortgage Insurance Policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid.  No Mortgage Loan requires payment of such premiums, in whole or in part by the Purchaser.  No action, inaction, or event has occurred and no state of facts exists that has or will result in the exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the Primary Mortgage Insurance Policy and to pay all premiums and charges in connection therewith. The Mortgage Interest Rate for the Mortgage Loan as set forth on the related Mortgage Loan Schedule is net of any such insurance premium. As of the date of origination, no Mortgage Loan had an LTV greater than 103%;

 

(cc)

The Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located;

 

(dd)

As to Mortgage Loans that are not Co-op loans and are not secured by an interest in a leasehold estate, the Mortgaged Property is located in the state identified in the Mortgage Loan Schedule and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- four-family or an individual condominium unit in a condominium project, or an individual unit in a planned unit development, provided, however, that no residence or dwelling is a single parcel of real property with a cooperative housing corporation erected thereon, or a mobile home.  As of the date of origination, no portion of the Mortgaged Property is used for commercial purposes, and since the date of origination, to the best of the Seller’s knowledge, no portion of the Mortgaged Property is used for commercial purposes;

 

(ee)

Principal payments on the Mortgage Loan commenced no more than sixty (60) days after the funds were disbursed in connection with the Mortgage Loan. The Mortgage Note is payable on the first day of each month in equal monthly installments of principal and interest, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty (30) years from commencement of amortization;

 

(ff)

As of the date of origination of the Mortgage Loan, the Mortgage Property was lawfully occupied under applicable law, with the exception of non-owner occupied Mortgage Property, and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities;

 

(gg)

If the Mortgaged Property is a condominium unit or a planned unit development (other than a de minimis planned unit development), or stock in a cooperative housing corporation, such condominium, cooperative, or planned unit development project meets Seller's eligibility requirements as set forth in Seller's Product Guidelines;

 

(hh)

To the best of Seller's knowledge, there is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; to the best of Seller's knowledge, there is no violation of any environmental law, rule or regulation with respect to the Mortgaged Property, and Seller has not received notice of any such violation; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property;

 

(ii)

The Mortgagor has not notified the Seller, and the Seller has no knowledge of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act;  

 

(jj)

No Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property;

 

(kk)

No action has been taken or failed to be taken by Seller, on or prior to the Closing Date which has resulted or will result in an exclusion from, denial of, or defense to coverage under any Primary Mortgage Insurance Policy (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of the Seller, or for any other reason under such coverage;

 

(ll)

With respect to each Co-op Loan, the related Mortgage is a valid, enforceable and subsisting first security interest on the related cooperative shares securing the related cooperative note and lease, subject only to (a) liens of the cooperative for unpaid assessments representing the Mortgagor’s pro rata share of the cooperative’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Security Agreement.  There are no liens against or security interests in the cooperative shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority equal to or over the Seller’s security interest in such cooperative shares;  

 

(mm)

With respect to each Co-op Loan, a search for filings of financing statements has been made by a company competent to make the same, which company is acceptable to FNMA and qualified to do business in the jurisdiction where the cooperative unit is located, and such search has not found anything which would materially and adversely affect the Co-op Loan;

 

(nn)   With respect to each Co-op Loan, the related cooperative corporation that owns title to the related cooperative apartment building is a "cooperative housing corporation" within the meaning of Section 216 of the Internal Revenue Code, and is in material compliance with applicable federal, state and local laws which, if not complied with, could have a material adverse effect on the Mortgaged Property;

 

(oo)    With respect to each Co-op Loan, there is no prohibition against pledging the shares of the cooperative corporation or assigning the Co-op Lease;

 

(pp)

Each Mortgage Loan has been serviced in all material respects in compliance with Applicable Requirements;  

 

(qq) The Mortgage Loan was originated by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar institution which is supervised and examined by a federal or state authority;

 

(rr) With respect to any ground lease to which a Mortgaged Property may be subject: (i) the Mortgagor is the owner of a valid and subsisting leasehold interest under such ground lease: (ii) such ground lease is in full force and effect, unmodified and not supplemented by any writing or otherwise; (iii) all rent, additional rent and other charges reserved therein have been fully paid to the extent payable as of the related Closing Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of the leasehold estate, subject to any sublease; (v) the Mortgagor is not in default under any of the terms of such ground lease, and there are no circumstances which, with the passage of time or the giving of notice, or both, would result in a default under such ground lease; (vi) the lessor under such ground lease is not in default under any of the te