<PAGE>
EXHIBIT 99.16
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
among
MERRILL LYNCH MORTGAGE HOLDINGS INC.
Purchaser,
GREENPOINT MORTGAGE FUNDING INC.
Seller
and
TERWIN ADVISORS, LLC
Owner of Servicing Rights
Dated as of April 1, 2003
Conventional Fixed and Adjustable Rate Mortgage Loans
MLBUSA 2003-1
Flow Delivery Program
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TABLE OF CONTENTS
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Page
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SECTION 1.
Definitions..................................................
2
SECTION 2. Agreement
to Purchase........................................ 16
SECTION 3. Mortgage
Loan Schedules...................................... 16
SECTION 4. Purchase
Price............................................... 16
SECTION 5. Examination
of Mortgage Files................................ 16
SECTION 6. Conveyance
from Seller to Initial Purchaser.................. 17
Subsection 6.01
Conveyance of Mortgage
Loans; Possession of Servicing
Files................................................ 17
Subsection 6.02
Books and
Records.................................... 18
Subsection 6.03
Delivery of Mortgage
Loan Documents.................. 18
SECTION 7.
Representations, Warranties and Covenants of the Seller:
Remedies for Breach..........................................
19
Subsection 7.01
Representations and
Warranties Respecting the
Seller............................................... 19
Subsection 7.02
Representations and
Warranties Regarding Individual
Mortgage Loans....................................... 22
Subsection 7.03
Remedies for Breach of
Representations and
Warranties........................................... 32
Subsection 7.04
Repurchase of Certain
Mortgage Loans................. 34
SECTION 8.
Closing......................................................
35
SECTION 9. Closing
Documents............................................ 35
SECTION 10.
Costs........................................................
36
SECTION 11. Seller's Servicing
Obligations............................... 36
SECTION 12. Removal of Mortgage Loans from Inclusion under This
Agreement
Upon a Whole Loan Transfer or a Pass-Through Transfer on One
or More Reconstitution Dates.................................
36
SECTION 13. The
Seller...................................................
40
Subsection 13.01
Additional Indemnification by the Seller............. 40
Subsection 13.02
Merger or Consolidation of the Seller................ 41
Subsection 13.03
Limitation on Liability of the Seller and Others..... 41
Subsection 13.04
Seller Not to Resign................................. 41
Subsection 13.05
No Transfer of Servicing............................. 42
</TABLE>
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SECTION 14.
Default......................................................
42
Subsection 14.01
Events of Default.................................... 42
Subsection 14.02
Waiver of Defaults................................... 44
SECTION 15.
Termination..................................................
44
SECTION 16. Successor to the
Seller...................................... 44
SECTION 17. Financial
Statements......................................... 45
SECTION 18. Mandatory Delivery: Grant of Security
Interest............... 46
SECTION 19.
Notices......................................................
46
SECTION 20. Severability
Clause.......................................... 47
SECTION 21.
Counterparts.................................................
47
SECTION 22. Governing
Law................................................ 47
SECTION 23. Intention of the
Parties..................................... 47
SECTION 24. Successors and
Assigns....................................... 48
SECTION 25.
Waivers......................................................
48
SECTION 26.
Exhibits.....................................................
48
SECTION 27.
Nonsolicitation..............................................
48
SECTION 28. General Interpretive
Principles.............................. 49
SECTION 29. Reproduction of
Documents.................................... 49
SECTION 30. Further
Agreements........................................... 49
SECTION 32.
Survival.....................................................
49
</TABLE>
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EXHIBITS
EXHIBIT 1
SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 FORM
OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3
SECURITY RELEASE CERTIFICATION
EXHIBIT 4 FORM
OF WARRANTY BILL OF SALE
EXHIBIT 5
CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 FORM
OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 7 FORM
OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 8
SERVICING ADDENDUM
EXHIBIT 9 FORM
OF PURCHASE PRICE AND TERMS LETTER
EXHIBIT 10 ANNUAL
CERTIFICATION
SCHEDULE I FINAL
MORTGAGE LOAN SCHEDULE
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<PAGE>
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
(the
"Agreement"), dated as of April 1, 2003, by and among Merrill Lynch
Mortgage
Holdings Inc., having an office at World Financial Center, South
Tower, New
York, New York 10281 (the "Initial Purchaser", and the Initial
Purchaser or the
Person, if any, to which the Initial Purchaser has assigned its
rights and
obligations hereunder as Purchaser with respect to a Mortgage Loan,
and each of
their respective successors and assigns, the "Purchaser"),
Greenpoint Mortgage
Funding Inc., having an office at 100 Wood Hollow Drive, Novato,
California
94945 (the "Seller") and Terwin Advisors, LLC, having an office at
[__________]
("Terwin").
WITNESSETH:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to
time, from the
Seller, certain conventional fixed and adjustable rate residential
first lien
mortgage loans, (the "Mortgage Loans") as described herein on a
servicing-retained basis, and which shall be delivered in groups of
whole loans
on various dates as provided herein (each, a "Closing Date");
WHEREAS, each Mortgage Loan 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 Final Mortgage Loan
Schedule for
the related Mortgage Loan Package, which is to be annexed hereto on
each Closing
Date as Schedule I;
WHEREAS, Terwin owns the servicing rights with respect to the
Mortgage
Loans;
WHEREAS, the Purchaser, the Seller and Terwin wish to prescribe
the
manner of the conveyance, servicing and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller,
the Purchaser desires to sell some or all of the Mortgage Loans to
one or more
purchasers as a whole loan transfer in a whole loan or
participation format or a
public or private mortgage-backed securities transaction;
<PAGE>
NOW, THEREFORE, in consideration of the premises and mutual
agreements
set forth herein, and for other good and valuable consideration,
the receipt and
sufficiency of which are hereby acknowledged, the Purchaser, the
Seller and
Terwin agree as follows:
SECTION 1 Definitions. For purposes of this Agreement the
following
capitalized terms shall have the respective meanings set forth
below:
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for
the
adjustment of the Mortgage Interest Rate payable in respect
thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage
Loan,
the date set forth in the related Mortgage Note on which the
Mortgage Interest
Rate on such Adjustable Rate Mortgage Loan is adjusted in
accordance with the
terms of the related Mortgage Note.
Agreement: This Master Mortgage Loan Purchase and Servicing
Agreement
including all exhibits, schedules, amendments and supplements
hereto.
ALTA: The American Land Title Association or any successor
thereto.
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
by an
appraiser who met the minimum requirements of Fannie Mae and
Freddie Mac, 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 by an appraiser who met the minimum requirements of Fannie Mae
and Freddie
Mac.
Approved Flood Policy Insurer: Any of the following insurers:
[______].
Approved Tax Service Contract Provider: Any of the following
providers:[______________________].
Assignment of Mortgage: An individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form,
sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property
is located
to give record notice of the sale of the Mortgage to the
Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than a Saturday or Sunday, or a day
on
which banking and savings and loan institutions in the State of
[California] or
the State of New York are authorized or obligated by law or
executive order to
be closed.
Buydown Mortgage Loan: A Mortgage Loan in which buydown funds are
used
to pay a portion of the interest payable on the Mortgage Loan for a
specified
period of time.
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Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of
which
were in excess of the principal balance of any existing first
mortgage on the
related Mortgaged Property and related closing costs, and were used
to pay any
such existing first mortgage, related closing costs and subordinate
mortgages on
the related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser from time
to
time shall purchase and the Seller from time to time shall sell to
the
Purchaser, the Mortgage Loans listed on the related Final Mortgage
Loan Schedule
with respect to the related Mortgage Loan Package.
Closing Documents: With respect to any Closing Date, the
documents
required pursuant to Section 9.
Code: The Internal Revenue Code of 1986, or any successor
statute
thereto, and applicable U.S. Department of Treasury regulations
issued pursuant
thereto.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property by
exercise of the
power of condemnation or the right of eminent domain.
Convertible Mortgage Loan: A Mortgage Loan that by its terms
and
subject to certain conditions contained in the related Mortgage or
Mortgage Note
allows the Mortgagor to convert the adjustable Mortgage Interest
Rate on such
Mortgage Loan to a fixed Mortgage Interest Rate.
Custodial Account: The separate account or accounts, each of
which
shall be an Eligible Account, created and maintained pursuant to
this Agreement,
which shall be entitled "Greenpoint Mortgage Funding Inc., as
servicer, in trust
for the Purchaser and various Mortgagors, Fixed and Adjustable Rate
Mortgage
Loans", established at a financial institution acceptable to the
Purchaser.
Custodial Agreement: The agreement between the Initial Purchaser
and
the Custodian, governing the retention of the originals of the
Mortgage Loan
Documents.
Custodian: The custodian designated by the Initial Purchaser under
the
Custodial Agreement, or its successor in interest or assigns, or
any successor
to the Custodian under the Custodial Agreement.
Cut-off Date: The first day of the month in which the related
Closing
Date occurs.
Deleted
Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Determination Date: With respect to each Remittance Date, the
fifteenth (15th) day of the calendar month in which such Remittance
Date occurs
or, if such fifteenth (15th) day is not a Business Day, the
Business Day
immediately preceding such fifteenth (15th) day.
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Disqualified Organization: An organization defined as such in
Section
860E(e) of the Code.
Due Date: With respect to each Remittance Date, the first day of
the
calendar month in which such Remittance Date occurs, which is the
day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of
the Remittance
Date and ending on the first day of the month of the Remittance
Date.
Eligible Account: Either (i) an account or accounts maintained with
a
federal or state chartered depository institution or trust company
the
short-term unsecured debt obligations of which (or, in the case of
a depository
institution or trust company that is the principal subsidiary of a
holding
company, the short-term unsecured debt obligations of such holding
company) are
rated A-1 by S&P or Prime-1 by Moody's (or a comparable rating
if another rating
agency is specified by the Initial Purchaser by written notice to
the Seller) at
the time any amounts are held on deposit therein, (ii) an account
or accounts
the deposits in which are fully insured by the FDIC or (iii) a
trust account or
accounts maintained with a federal or state chartered depository
institution or
trust company acting in its fiduciary capacity. Eligible Accounts
may bear
interest.
Escrow Account: The separate trust account or accounts created
and
maintained pursuant to this Agreement which shall be entitled
"Greenpoint
Mortgage Funding Inc., as servicer, in trust for the Purchaser and
various
Mortgagors, Fixed and Adjustable Rate Mortgage Loans," established
at a
financial institution acceptable to the Purchaser.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, municipal charges, Primary
Insurance
Policy premiums, fire and hazard insurance premiums, condominium
charges and
other payments required to be escrowed by the Mortgagor with the
Mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Event of Default: Any one of the events enumerated in Section
15.01.
Fannie Mae: Fannie Mae or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Mortgage
Loan Schedule: With respect to each Mortgage Loan
Package, the schedule of Mortgage Loans to be annexed hereto as
Schedule I (or a
supplement thereto) on each Closing Date for the Mortgage Loan
Package delivered
on such Closing Date in both hard copy and floppy disk, such
schedule setting
forth the following information with respect to each Mortgage Loan
in the
Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
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<PAGE>
(3) the street address of the Mortgaged Property including the
state
and
zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property: single family residence, a 2-4 family residence, a
condominium
unit
or a unit in a planned unit development;
(6) the original months to maturity;
(7) the original date of the Mortgage Loan and the remaining months
to
maturity from the Cut-off Date, based on the original
amortization
schedule;
(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Interest Rate in effect immediately following
the
Cut-off Date;
(10) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date;
(14) the last Due Date on which a Monthly Payment was actually
applied
to
the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the
close
of
business on the Cut-off Date;
(17) with respect to each Adjustable Rate Mortgage Loan, the
first
Mortgage Interest Rate Adjustment Date;
(18) with respect to each Adjustable Rate Mortgage Loan, the
Gross
Margin;
(19) with respect to each Adjustable Rate Mortgage Loan, the
Periodic
Rate
Cap;
(20) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing);
(21) with respect to each Adjustable Rate Mortgage Loan, the
Maximum
Mortgage Interest Rate under the terms of the Mortgage Note;
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<PAGE>
(22) with respect to each Adjustable Rate Mortgage Loan, the
Minimum
Mortgage Interest Rate under the terms of the Mortgage Note;
(23) the Mortgage Interest Rate at origination;
(24) with respect to each Adjustable Rate Mortgage Loan, the
first
Adjustment Date immediately following the Cut-off Date;
(25) with respect to each Adjustable Rate Mortgage Loan, the
Index;
(26) the date on which the first Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due
Date
currently in effect, such Due Date;
(27) a code indicating whether the Mortgage Loan is an Adjustable
Rate
Mortgage Loan or a Fixed Rate Mortgage Loan;
(28) a code indicating the documentation style (i.e., full,
alternative or reduced);
(29) a code indicating if the Mortgage Loan is subject to a
Primary
Insurance Policy, and if it is, the PMI Policy certificate number
and PMI
policy coverage percentage;
(30) a code indicating whether the Mortgage Loan is a Buydown
Mortgage
Loan;
(31) a code indicating whether the Mortgage Loan is subject to
the
Homeownership and Equity Protection Act of 1994;
(32) a code indicating whether the Mortgage Loan is subject to
a
prepayment penalty and the term of such penalty;
(33) the Appraised Value of the Mortgaged Property;
(34) the sale price of the Mortgaged Property, if applicable;
(35) the date on which the Mortgage Loan was originated;
(36) the Mortgage Loan Remittance Rate as of the Cut-off Date,
whether
or
not collected;
With respect to the Mortgage Loan Package in the aggregate, the
Final
Mortgage Loan Schedule shall set forth the following information,
as of the
related Cut-off Date:
(1) the number of Mortgage Loans;
(2) the current principal balance of the Mortgage Loans;
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<PAGE>
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans;
and
(4) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date
to
reflect the addition of the Final Mortgage Loan Schedule with
respect to the
related Mortgage Loan Package.
Final Recovery Determination: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO
Property purchased
by the Seller pursuant to this Agreement), a determination made by
the Seller
that all Insurance Proceeds, Liquidation Proceeds and other
payments or
recoveries which the Seller, in its reasonable good faith judgment,
expects to
be finally recoverable in respect thereof have been so recovered.
The Seller
shall maintain records, prepared by a servicing officer of the
Seller, of each
Final Recovery Determination.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which
the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for
the term of
such Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation or any
successor thereto.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan,
the
fixed percentage amount set forth in the related Mortgage Note and
the related
Final Mortgage Loan Schedule that is added to the Index on each
Adjustment Date
in accordance with the terms of the related Mortgage Note to
determine the new
Mortgage Interest Rate for such Mortgage Loan.
HUD: The United States Department of Housing and Urban Development
or
any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the
index
identified on the Final Mortgage Loan Schedule and set forth in the
related
Mortgage Note for the purpose of calculating the interest rate
thereon.
Initial Closing Date: The Closing Date on which the Initial
Purchaser
purchases and the Seller sells the first Mortgage Loan Package
hereunder.
Initial Purchaser: Merrill Lynch Mortgage Holdings Inc., or any
successor.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Liquidation Proceeds: Amounts, other than Insurance Proceeds
and
Condemnation Proceeds, received in connection with the liquidation
of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or
otherwise,
other than amounts received following the acquisition of REO
Property.
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<PAGE>
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as
of
any date of determination, the ratio on such date of the
outstanding principal
amount of the Mortgage Loan, to the Appraised Value of the
Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each Adjustable
Rate
Mortgage Loan, a rate that is set forth on the related Final
Mortgage Loan
Schedule and in the related Mortgage Note and is the maximum
interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be
increased.
MERS: MERSCORP, Inc., its successors and assigns.
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(R)
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(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Interest Rate: With respect to each Adjustable
Rate
Mortgage Loan, a rate that is set forth on the related Final
Mortgage Loan
Schedule and in the related Mortgage Note and is the minimum
interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be
decreased.
Monthly Advance: The aggregate of the advances made by the Seller
on
any Remittance Date pursuant to Section 11.21.
Monthly Payment: With respect to any Mortgage Loan, the
scheduled
combined payment of principal and interest payable by a Mortgagor
under the
related Mortgage Note on each Due Date.
Moody's: Moody's Investors Service, Inc. or its successor in
interest.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on Mortgaged Property securing the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the
successors and assigns of such mortgagee or beneficiary.
-8-
<PAGE>
Mortgage File: The items pertaining to a particular Mortgage
Loan
referred to in Exhibit 5 annexed hereto, and any additional
documents required
to be added to the Mortgage File pursuant to this Agreement or the
related
Purchase Price and Terms Letter.
Mortgage Interest Rate: With respect to each Fixed Rate Mortgage
Loan,
the fixed annual rate of interest provided for in the related
Mortgage Note and,
with respect to each Adjustable Rate Mortgage Loan, the annual rate
that
interest accrues on such Adjustable Rate Mortgage Loan from time to
time in
accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage loan,
sold,
assigned and transferred to the Purchaser pursuant to this
Agreement and the
related Purchase Price and Terms Letter and identified on the Final
Mortgage
Loan Schedule annexed to this Agreement on such Closing Date, 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.
Mortgage Loan Documents: The following documents:
(1) The original Mortgage Note endorsed, "Pay to the order of
______________, without recourse" and signed in the name of the
Seller by
an
authorized officer of the Seller. If the Mortgage Loan was acquired
by
the
Seller in a merger or other type of acquisition, the endorsement
must
be
by "[Seller], successor [by merger to or in interest to, as
applicable]
[name of predecessor]"; and if the Mortgage Loan was acquired or
originated
by
the Seller while doing business under another name, the endorsement
must
be
by "[Seller], successor in interest to [previous name]." The
Mortgage
Note
shall include all intervening endorsements showing a complete chain
of
title from the originator to the Seller;
(2) The original recorded Mortgage, with evidence of recording
thereon, or, if the original Mortgage has not yet been returned
from the
recording office, a copy of the original Mortgage certified by the
previous
owner to be a true copy of the original of the Mortgage that has
been
delivered for recording in the appropriate recording office of
the
jurisdiction in which the Mortgaged Property is located;
(3) Except with respect to each MERS Designated Mortgage Loan,
the
original Assignment of Mortgage for each Mortgage Loan, in form
and
substance acceptable for recording. The Assignment of Mortgage
shall be
delivered in blank. If the Mortgage Loan was acquired by the Seller
in a
merger, the Assignment of Mortgage must be made by "[Seller],
successor by
merger to [name of predecessor]". If the Mortgage Loan was acquired
or
originated by the Seller while doing business under another name,
the
Assignment of Mortgage must be by "[Seller], formerly known as
[previous
name]";
(4) The originals of all intervening assignments of mortgage (if
any)
evidencing a complete chain of assignment from the Seller (or MERS
with
respect to each MERS Designated Mortgage Loan) to the last endorsee
with
evidence of recording
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<PAGE>
thereon, or if any such intervening assignment has not been
returned from
the
applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of
mortgage, the
Seller shall deliver or cause to be delivered to the Custodian, a
photocopy
of
such intervening assignment, together with (i) in the case of a
delay
caused by the public recording office, an Officer's Certificate of
the
Seller (or certified by the title company, escrow agent, or
closing
attorney) stating that such intervening assignment of mortgage has
been
dispatched to the appropriate public recording office for
recordation and
that
such original recorded intervening assignment of mortgage or a copy
of
such
intervening assignment of mortgage certified by the appropriate
public
recording office to be a true and complete copy of the original
recorded
intervening assignment of mortgage will be promptly delivered to
the
Custodian upon receipt thereof by the Seller; or (ii) in the case
of an
intervening assignment where a public recording office retains the
original
recorded intervening assignment or in the case where an
intervening
assignment is lost after recordation in a public recording office,
a copy
of
such intervening assignment certified by such public recording
office to
be a
true and complete copy of the original recorded intervening
assignment;
(5) The original policy of title insurance (or a preliminary
title
report if the original title insurance policy has not been received
from
the
title insurance company);
(6) With respect to a Mortgage Loan that, according to the
Final
Mortgage Loan Schedule is covered by a primary mortgage insurance
policy,
the
original or a copy of the policy of primary mortgage insurance;
(7) The original of any guarantee executed in connection with
the
Mortgage Note;
(8) The original of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage;
(9) Originals of all assumption, modification, consolidation or
extension agreements, if any; and
(10) Such other documents as the Purchaser may require.
Mortgage Loan Package: The Mortgage Loans listed on a Final
Mortgage
Loan Schedule, delivered to the Custodian and the Purchaser at
least five (5)
Business Days prior to the related Closing Date and attached to
this Agreement
as Schedule I on the related Closing Date.
Mortgage Note: The original executed note or other evidence of
the
Mortgage Loan indebtedness of a Mortgagor.
Mortgaged Property: The Mortgagor's real property securing
repayment
of a related Mortgage Note, consisting of a fee simple interest in
a single
parcel of real property improved by a Residential Dwelling.
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<PAGE>
Mortgagor: The obligor on a Mortgage Note, the owner of the
Mortgaged
Property and the grantor or mortgagor named in the related Mortgage
and such
grantor's or mortgagor's successor's in title to the Mortgaged
Property.
Net Mortgage Rate: With respect to any Mortgage Loan (or the
related
REO Property), as of any date of determination, a per annum rate of
interest
equal to the then applicable Mortgage Interest Rate for such
Mortgage Loan minus
the Servicing Fee Rate.
Nonrecoverable Monthly Advance: Any Monthly Advance previously made
or
proposed to be made in respect of a Mortgage Loan or REO Property
that, in the
good faith business judgment of the Seller, will not, or, in the
case of a
proposed Monthly Advance, would not be, ultimately recoverable from
related late
payments, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or
REO Property as provided herein.
Officer's Certificate: A certificate signed by the Chairman of
the
Board or the Vice Chairman of the Board or a President or a Vice
President and
by the Treasurer or the Secretary or one of the Assistant
Treasurers or
Assistant Secretaries of the Person on behalf of whom such
certificate is being
delivered, and delivered to the Purchaser as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
salaried
counsel for the Person on behalf of whom the opinion is being
given, reasonably
acceptable to each Person to whom such opinion is addressed.
Pass-Through Transfer: The sale or transfer of some or all of
the
Mortgage Loans by the Purchaser to a trust to be formed as part of
a publicly
issued or privately placed mortgage-backed securities
transaction.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan
and any Adjustment Date therefor, a number of percentage points per
annum that
is set forth in the related Final Mortgage Loan Schedule and in the
related
Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate
for such Adjustable Rate Mortgage Loan may increase (without regard
to the
Maximum Mortgage Interest Rate) or decrease (without regard to the
Minimum
Mortgage Interest Rate) on such Adjustment Date from the Mortgage
Interest Rate
in effect immediately prior to such Adjustment Date.
Person: An individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Preliminary Mortgage Loan Schedule:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the Mortgage Interest Rate at origination;
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(4) the Mortgage Interest Rate in effect immediately following
the
Cut-off Date;
(5) the original months to maturity;
(6) the original date of the Mortgage Loan and the remaining months
to
maturity from the Cut-off Date, based on the original
amortization
schedule;
(7) the stated maturity date;
(8) the amount of the Monthly Payment at origination;
(9) the amount of the Monthly Payment as of the Cut-off Date;
(10) the Stated Principal Balance of the Mortgage Loan as of the
close
of
business on the Cut-off Date;
(11) a code indicating whether the Mortgaged Property is
owner-occupied; and
(12) a code indicating the documentation style.
Preliminary Servicing Period: With respect to any Mortgage Loans,
the
period commencing on the related Closing Date and ending on the
date the Seller
enters into Reconstitution Agreements which amend or restate the
servicing
provisions of this Agreement.
Primary Insurance Policy: A policy of primary mortgage guaranty
insurance issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on
a
Mortgage Loan which is received in advance of its scheduled Due
Date, including
any prepayment penalty or premium thereon, 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.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller pursuant to the related Purchase Price and
Terms Letter
in exchange for the Mortgage Loans purchased on such Closing Date
as calculated
as provided in Section 4.
Purchase Price and Terms Letter: With respect to any Mortgage
Loan
Package purchased and sold on any Closing Date, the letter
agreement between the
Purchaser and the Seller, in the form annexed hereto as Exhibit 9
(including any
exhibits, schedules and attachments thereto), setting forth the
terms and
conditions of such transaction and describing the Mortgage Loans to
be purchased
by the Purchaser on such Closing Date. A Purchase Price and Terms
Letter may
relate to more than one Mortgage Loan Package to be purchased on
one or more
Closing Dates hereunder.
Qualified Depository: A depository the accounts of which are
insured
by the FDIC through the BIF or the SAIF and the debt obligations of
which are
rated AA or better by Standard & Poor's Corporation.
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Qualified Insurer: An insurer acceptable to Fannie Mae and Freddie
Mac
which is rated A-/VIII or better in the current Best's Key Rating
Guide
("Best's").
Qualified Substitute Mortgage Loan: A mortgage loan substituted for
a
Deleted Mortgage Loan pursuant to the terms of this Agreement which
must, on the
date of such substitution, (i) have an outstanding principal
balance, after
application of all scheduled payments of principal and interest due
during or
prior to the month of substitution, not in excess of the Stated
Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month
during which the substitution occurs, (ii) have a Mortgage Interest
Rate not
less than (and not more than one percentage point in excess of) the
Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a Net
Mortgage Rate equal
to the Net Mortgage Rate of the Deleted Mortgage Loan, (iv) have a
remaining
terms to maturity not greater than (and not more than one year less
than) that
of the Deleted Mortgage Loan, (v) have the same Due Date as the Due
Date on the
Deleted Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the
date of
substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted
Mortgage Loan as of such date, (vii) be covered under a Primary
Insurance Policy
if such Qualified Substitute Mortgage Loan has a Loan-to-Value
Ratio in excess
of 80%, (viii) conform to each representation and warranty set
forth in Section
7.02 of this Agreement and (ix) be the same type of mortgage loan
(i.e. fixed or
adjustable rate with the same Gross Margin and Index as the Deleted
Mortgage
Loan). In the event that one or more mortgage loans are substituted
for one or
more Deleted Mortgage Loans, the amounts described in clause (i)
hereof shall be
determined on the basis of aggregate principal balances, the
Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the
basis of
weighted average Mortgage Interest Rates, the Net Mortgage Rates
described in
clause (iii) hereof shall be satisfied as to each such mortgage
loan, the terms
described in clause (iv) shall be determined on the basis of
weighted average
remaining terms to maturity, the Loan-to-Value Ratios described in
clause (vi)
hereof shall be satisfied as to each such mortgage loan and, except
to the
extent otherwise provided in this sentence, the representations and
warranties
described in clause (viii) hereof must be satisfied as to each
Qualified
Substitute Mortgage Loan or in the aggregate, as the case may
be.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds
of
which are not in excess of the existing first mortgage loan on the
related
Mortgaged Property and related closing costs, and were used
exclusively to
satisfy the then existing first mortgage loan of the Mortgagor on
the related
Mortgaged Property and to pay related closing costs.
Reconstitution Agreements: The agreement or agreements entered into
by
the Seller and the Purchaser and/or certain third parties on the
Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans
serviced
hereunder, in connection with a Whole Loan Transfer or a
Pass-Through Transfer
as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of
the
Mortgage Loans serviced under this Agreement shall be removed from
this
Agreement and reconstituted as part of a Whole Loan Transfer or
Pass-Through
Transfer pursuant to Section 12 hereof.
Record Date: With respect to each Remittance Date, the last
Business
Day of the month immediately preceding the month in which such
Remittance Date
occurs.
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Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were
not used to purchase the related Mortgaged Property.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to
REMICs, which appear in Sections 860A through 860G of the Code, and
related
provisions, and proposed, temporary and final regulations and
published rulings,
notices and announcements promulgated thereunder, as the foregoing
may be in
effect from time to time.
Remittance Date: The eighteenth (18th) day of each month,
commencing
on the eighteenth day of the month next following the month in
which the related
Cut-off Date occurs, or if such eighteenth (18th) day is not a
Business Day, the
first Business Day immediately following such eighteenth (18th)
day.
REO Account: The separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled
"Greenpoint
Mortgage Funding Inc., in trust for the Purchaser, as of [date of
acquisition of
title], Fixed and Adjustable Rate Mortgage Loans".
REO Disposition: The final sale by the Seller of any REO
Property.
REO Property: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to
(i) the Stated Principal Balance of such Mortgage Loan, plus (ii)
interest on
such Stated Principal Balance at the Mortgage Interest Rate from
and including
the last Due Date through which interest has been paid by or on
behalf of the
Mortgagor to the first day of the month following the date of
repurchase, less
amounts received in respect of such repurchased Mortgage Loan which
are being
held in the Custodial Account for distribution in connection with
such Mortgage
Loan.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a Fannie Mae eligible condominium
project, or (iv) a
detached one-family dwelling in a planned unit development, none of
which is a
co-operative, mobile or manufactured home.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8 which will govern the servicing of the Mortgage Loans by
Seller during
the Preliminary Servicing Period.
Servicing Advances: All customary, reasonable and necessary
"out-of-pocket" costs and expenses incurred by the Seller in the
performance of
its servicing obligations, including, but not limited to, the cost
of (i)
preservation, restoration and repair of a Mortgaged
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Property, (ii) any enforcement or judicial proceedings with respect
to a
Mortgage Loan, including foreclosure actions and (iii) the
management and
liquidation of REO Property.
Servicing Fee: With respect to each Mortgage Loan, the amount of
the
annual servicing fee the Purchaser shall pay to the Seller, which
shall, for
each month, be equal to one-twelfth of the product of (a) the
Servicing Fee Rate
and (b) the unpaid principal balance of the Mortgage Loan. Such fee
shall be
payable monthly, computed on the basis of the same principal amount
and period
respectively 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
payable solely from, the interest portion (including recoveries
with respect to
interest from Liquidation Proceeds and other proceeds, to the
extent permitted
by Section 11.05) of related Monthly Payment collected by the
Seller, or as
otherwise proved under Section 11.05. If the Preliminary Servicing
Period
includes any partial month, the Servicing Fee for such month shall
be pro rated
at a per diem rate based upon a 30-day month.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.375%
per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained
by the Seller consisting of originals of all documents in the
Mortgage File
which are not delivered to the Purchaser or the Custodian and
copies of the
Mortgage Loan Documents.
Servicing Strip: With respect to each Mortgage Loan, the amount of
the
fee the Seller shall pay to Terwin pursuant to Section 13, which
shall, for each
month, be equal to the excess, if any, of the Servicing Fee, over
the sum of (i)
the Subservicing Fee and (ii) any amounts paid in such month by the
Seller
pursuant to Section 11.04(xi).
S&P: Standard & Poor's Ratings Services, a Division of the
McGraw-Hill
Companies, Inc. or its successor in interest.
Stated Principal Balance: As to each Mortgage Loan as of any date
of
determination, (i) the principal balance of the Mortgage Loan as of
the Cut-off
Date after giving effect to payments of principal due on or before
such date,
whether or not collected from the Mortgagor on or before such date,
minus (ii)
all amounts previously distributed to the Purchaser with respect to
the related
Mortgage Loan representing payments or recoveries of principal.
Subservicing Fee: With respect to each Mortgage Loan, the amount
of
the fee retained by the Seller, as sub-servicer pursuant to Section
13, which
shall, for each month, be equal to $7.00 per Mortgage Loan serviced
by the
Seller, as such fee may be modified pursuant to Section 13.
Termination Fee: [_____________________________].
Warranty Bill of Sale: A Warranty Bill of Sale with respect to
the
Mortgage Loans purchased on a Closing Date in the form annexed
hereto as Exhibit
4.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or
transfer is not
a Pass-Through Transfer.
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SECTION 2. Agreement to Purchase. The Seller agrees to sell, and
the
Purchaser agrees to purchase, from time-to-time, Mortgage Loans
having an
aggregate principal balance on the related Cut-off Date in an
amount as set
forth in the related Purchase Price and Terms Letter, or in such
other amount as
agreed by the Purchaser and the Seller as evidenced by the actual
aggregate
principal balance of the Mortgage Loans accepted by the Purchaser
on the related
Closing Date. The obligation of the Purchaser to purchase any
Mortgage Loan from
the Seller on any particular Closing Date shall be subject to the
satisfaction
of the conditions precedent to the Purchaser's obligation to
purchase set forth
in Section 8.
SECTION 3. Mortgage Loan Schedules. Prior to the date on which
the
Seller and the Purchaser execute a Purchase Price and Terms Letter,
the Seller
shall provide the Purchaser with the Preliminary Mortgage Loan
Schedule. The
Seller shall deliver the Final Mortgage Loan Schedule for a
Mortgage Loan
Package to be purchased on a particular Closing Date to the
Purchaser at least
five (5) Business Days prior to the related Closing Date.
SECTION 4. Purchase Price. The Purchase Price for each Mortgage
Loan
listed on the related Final Mortgage Loan Schedule shall be the
percentage of
par as stated in the related Purchase Price and Terms Letter
(subject to
adjustment as provided therein), multiplied by its Stated Principal
Balance as
of the related Cut-off Date. If so provided in the related Purchase
Price and
Terms Letter, portions of the Mortgage Loans shall be priced
separately.
In addition to the Purchase Price as described above, the
Initial
Purchaser shall pay to the Seller, at closing, accrued interest on
the Stated
Principal Balance of each Mortgage Loan as of the related Cut-off
Date at the
Net Mortgage Rate from the related Cut-off Date through the day
prior to the
related Closing Date, both inclusive.
The Purchaser shall own and be entitled to receive with respect
to
each Mortgage Loan purchased, (1) all scheduled principal due after
the related
Cut-off Date, (2) all other recoveries of principal collected 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
after the related
Cut-off Date shall belong to the Seller), and (3) all payments of
interest on
the Mortgage Loans net of the Servicing Fee (minus that portion of
any such
interest payment that is allocable to the period prior to the
related Cut-off
Date). The Stated Principal Balance of each Mortgage Loan as of the
related
Cut-off Date is determined after application to the reduction of
principal of
payments of principal due on or before the related Cut-off Date
whether or not
collected. Therefore, for the purposes of this Agreement, 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 (minus the applicable Servicing Fee) 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 remittance by the Seller to the Purchaser on the
first related
Remittance Date. All payments of principal and interest, less the
applicable
Servicing Fee, due on a Due Date following the related Cut-off Date
shall belong
to the Purchaser.
SECTION 5. Examination of Mortgage Files. In addition to the
rights
granted to the Initial Purchaser under the related Purchase Price
and Terms
Letter to underwrite the Mortgage Loans and review the Mortgage
Files prior to
the Closing Date, prior to the related
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Closing Date, the Seller shall (a) deliver to the Custodian in
escrow, for
examination with respect to each Mortgage Loan to be purchased on
such Closing
Date, the related Mortgage File, including the Assignment of
Mortgage,
pertaining to each Mortgage Loan, or (b) make the related Mortgage
File
available to the Initial Purchaser for examination at the Seller's
offices or
such other location as shall otherwise be agreed upon by the
Initial Purchaser
and the Seller. Such examination may be made by the Initial
Purchaser or its
designee at any reasonable time before or after the related Closing
Date. If the
Initial Purchaser makes such examination prior to the related
Closing Date and
identifies any Mortgage Loans that do not conform to the terms of
the related
Purchase Price and Terms Letter or the Initial Purchaser's
underwriting
standards, such Mortgage Loans may, at the Initial Purchaser's
option, be
rejected for purchase by the Initial Purchaser. If not purchased by
the Initial
Purchaser, such Mortgage Loans shall be deleted from the related
Final Mortgage
Loan Schedule and may be replaced by a Qualified Substitute
Mortgage Loan
pursuant to Section 7. The Initial Purchaser may, at its option and
without
notice to the Seller, purchase all or part of any Mortgage Loan
Package without
conducting any partial or complete examination. The fact that the
Initial
Purchaser has conducted or has determined not to conduct any
partial or complete
examination of the Mortgage Files shall not affect the Initial
Purchaser's (or
any of its successors') rights to demand repurchase or other relief
or remedy
provided for in this Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing
Files. The Seller, simultaneously with the payment of the Purchase
Price, shall
execute and deliver to the Initial Purchaser a Warranty Bill of
Sale with
respect to the related Mortgage Loan Package in the form attached
hereto as
Exhibit 4. The Servicing File retained by the Seller with respect
to each
Mortgage Loan pursuant to this Agreement shall be appropriately
identified in
the Seller's computer system to reflect clearly the sale of such
related
Mortgage Loan to the Purchaser. The Seller shall release from its
custody the
contents of any Servicing File retained by it only in accordance
with this
Agreement, except when such release is required in connection with
a repurchase
of any such Mortgage Loan pursuant to Subsection 7.03 or 7.04.
The contents of each Mortgage File not delivered to the
[Custodian][Purchaser] are and shall be held in trust by the Seller
for the
benefit of the Purchaser as the owner thereof. The 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
[Custodian] [Purchaser]. 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. Upon the sale of the Mortgage Loans the ownership of
each
Mortgage Note, the related Mortgage and the related Mortgage File
and Servicing
File shall vest immediately in the Purchaser, and the ownership of
all records
and documents with respect to the related Mortgage Loan prepared by
or which
come into the possession of the Seller shall vest immediately in
the Purchaser
and shall be retained and maintained by the Seller, in trust, at
the will of the
Purchaser and only in such custodial capacity. Each Servicing File
shall be
segregated from the other books and records of the Seller and shall
be marked
appropriately to reflect clearly the sale of the related Mortgage
Loan to the
Purchaser. The Seller shall release its custody of the contents of
any Servicing
File only in accordance with written instructions from
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the Purchaser, unless 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.
Subsection 6.02 Books and Records. Record title to each Mortgage
and
the related Mortgage Note as of the related Closing Date shall be
in the name of
the Seller, the Purchaser, the Custodian or one or more designees
of the
Purchaser, as the Purchaser shall designate. Notwithstanding the
foregoing,
beneficial ownership of each Mortgage and the related Mortgage Note
shall be
vested solely in the Purchaser or the appropriate designee of the
Purchaser, as
the case may be. All rights arising out of the Mortgage Loans
including, but not
limited to, all funds received by the Seller after the related
Cut-off Date on
or in connection with a Mortgage Loan as provided in Section 4
shall be vested
in the Purchaser or one or more designees of the Purchaser;
provided, however,
that all such funds received on or in connection with a Mortgage
Loan as
provided in Section 4 shall be received and held by the Seller in
trust for the
benefit of the Purchaser or the assignee of the Purchaser, as the
case may be,
as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be construed as, a sale of
the Mortgage
Loans by the Seller and not a pledge of the Mortgage Loans by the
Seller to the
Purchaser to secure a debt or other obligation of the Seller.
Consequently, the
sale of each Mortgage Loan shall be reflected as a sale on the
Seller's business
records, tax returns and financial statements.
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 the Mortgage Loans
unless the books
and records 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 hereto executed by the
transferee
shall have been delivered to the Seller. 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 shall release the previous Purchaser from its
obligations
hereunder with respect to the Mortgage Loans sold or
transferred.
Subsection 6.03 Delivery of Mortgage Loan Documents. The Seller
shall
from time to time in connection with each Closing Date, at least
five (5)
Business Days prior to such Closing Date, deliver and release to
the Custodian
the Mortgage Loan Documents with respect to each Mortgage Loan to
be purchased
and sold on the related Closing Date and set forth on the related
Final Mortgage
Loan Schedule delivered with such Mortgage Loan Documents.
The Custodian shall certify its receipt of all such Mortgage
Loan
Documents for the related Closing Date, pursuant to an initial
custody receipt
and initial certification of the Custodian.
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The Seller shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension
of any
Mortgage Loan entered into in accordance with this Agreement within
two weeks of
their execution, provided, however, that the Seller shall provide
the Custodian
with a certified true copy of any such document submitted for
recordation within
two weeks 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 ninety days of its submission for recordation.
SECTION 7. Representations, Warranties and Covenants of the
Seller:
Remedies for Breach.
Subsection 7.01 Representations and Warranties Respecting the
Seller.
The Seller represents, warrants and covenants to the Purchaser as
of the date
hereof, as of the date of each respective Purchase Price and Terms
Letter, and
as of each respective Closing Date or as of such date specifically
provided
herein or in the applicable Warranty Bill of Sale:
(a) Due Organization and Authority. The Seller is duly
organized,
validly existing and in good standing under the laws of the state
of [________]
and is and will remain in compliance with the laws of each state in
which any
Mortgaged Property is located to the extent necessary to ensure
the
enforceability of each Mortgage Loan and the servicing of the
Mortgage Loan in
accordance with the terms of this Agreement. The Seller has the
full power and
authority to hold each Mortgage Loan, to sell each Mortgage Loan,
and to
execute, deliver and perform, and to enter into and consummate, all
transactions
contemplated by this Agreement. The Seller has duly authorized the
execution,
delivery and performance of this Agreement, has duly executed and
delivered this
Agreement, and this Agreement, assuming due authorization,
execution and
delivery by the Purchaser, constitutes a legal, valid and binding
obligation of
the Seller, enforceable against it in accordance with its terms
except as the
enforceability thereof may be limited by bankruptcy, insolvency
or
reorganization;
(b) Ordinary Course of Business. The execution and delivery of
this
Agreement by the Seller and the performance of and compliance with
the terms of
this Agreement will not violate the Seller's charter or articles
of
incorporation or by-laws or any legal restriction or constitute a
default under
or result in a breach or acceleration of, any material contract,
agreement or
other instrument to which the Seller is a party or which may be
applicable to
the Seller or its assets. The Seller is not in violation of, and
the execution
and delivery of this Agreement by the Seller and its performance
and compliance
with the terms of this Agreement will not constitute a violation
with respect
to, any order or decree of any court or any order or regulation of
any federal,
state, municipal or governmental agency having jurisdiction over
the Seller or
its assets, which violation might have consequences that would
materially and
adversely affect the condition (financial or otherwise) or the
operation of the
Seller or its assets or might have consequences that would
materially and
adversely affect the performance of its obligations and duties
hereunder;
(c) Ability to Service. The Seller is an approved seller/servicer
of
conventional residential Mortgage Loans for Fannie Mae and Freddie
Mac, with the
facilities, procedures, and experienced personnel necessary for the
sound
servicing of mortgage loans of
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the same type as the Mortgage Loans. The Seller is in good standing
to sell and
service mortgage loans for Fannie Mae and Freddie Mac and is a HUD
approved
mortgagee pursuant to Section 203 of the National Housing Act. No
event has
occurred, including but not limited to a change in insurance
coverage, which
would make the Seller unable to comply with Fannie Mae, Freddie Mac
or HUD
eligibility requirements or which would require notification to
Fannie Mae,
Freddie Mac or HUD. 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;
(d) Ability to Perform. The Seller does not believe, nor does it
have
any reason or cause to believe, that it cannot perform each and
every covenant
contained in this Agreement. The Seller is solvent and the sale of
the Mortgage
Loans is not undertaken to hinder, delay or defraud any of the
Seller's
creditors;
(e) Documents Delivered to Custodian. The Mortgage Loan Documents
have
been delivered to the Custodian. With respect to each Mortgage
Loan, the Seller
is in possession of a complete Mortgage File in compliance with
Exhibit 5,
except for such documents as have been delivered to the
Custodian;
(f) Record
Title. Immediately prior to the payment of the Purchase
Price for each Mortgage Loan, the Seller was the owner of record of
the related
Mortgage and the indebtedness evidenced by the related Mortgage
Note and upon
the payment of the Purchase Price by the Purchaser, in the event
that the Seller
retains record title, the Seller shall retain such record title to
each
Mortgage, each related Mortgage Note and the related Mortgage Files
with respect
thereto in trust for the Purchaser as the owner thereof and only
for the purpose
of servicing and supervising the servicing of each Mortgage
Loan;
(g) No Litigation Pending. There are no actions or proceedings
against, or investigations of, the Seller before any court,
administrative or
other tribunal (A) that might prohibit its entering into this
Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the
consummation of the
transactions contemplated by this Agreement or (C) that might
prohibit or
materially and adversely affect the performance by the Seller of
its obligations
under, or the validity or enforceability of, this Agreement;
(h) No Consent Required. 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 consummation of the transactions contemplated
by this
Agreement, except for such consents, approvals, authorizations or
orders, if
any, that have been obtained prior to the Closing Date;
(i) Ordinary Course of Business. The consummation of the
transactions
contemplated by this Agreement are 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 the
bulk transfer or any similar statutory provisions in effect in any
jurisdiction;
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<PAGE>
(j) Accurate Delinquency and Foreclosure Information. The
information
delivered by the Seller to the Purchaser with respect to the
Seller's loan loss,
foreclosure and delinquency experience for the twelve (12) months
immediately
preceding the Initial Closing Date on mortgage loans underwritten
to the same
standards as the Mortgage Loans and covering mortgaged properties
similar to the
Mortgaged Properties, is true and correct in all material
respects;
(k) No Untrue Information. Neither this Agreement nor any
written
statement, report or other document prepared and furnished or to be
prepared and
furnished by the Seller pursuant to this Agreement or in connection
with the
transactions contemplated hereby contains any untrue statement of
material fact
or omits to state a material fact necessary to make the statements
contained
herein or therein not misleading;
(l) Selection Process. The Mortgage Loans were selected from among
the
outstanding adjustable rate one- to four-family mortgage loans in
the Seller's
portfolio at the Closing Date as to which the representations and
warranties set
forth in Section 7.02 could be made and such selection was not made
in a manner
so as to affect adversely the interests of the Purchaser;
(m) Pool Characteristics. The Pool Characteristics of the
Mortgage
Loans purchased on each Closing Date shall conform to the
characteristics
described in the Warranty Bill of Sale, attached as Exhibit 4
hereto.
(n) Sale Treatment. The Seller has determined that the disposition
of
the Mortgage Loans pursuant to this Agreement will be afforded sale
treatment
for accounting and tax purposes;
(o) Financial Statements. The Seller has delivered to the
Purchaser
financial statements as to its last three complete fiscal years and
any later
quarter ended more than 60 days prior to the execution of this
Agreement. All
such financial statements fairly present the pertinent results of
operations and
changes in financial position at the end of each such period of the
Seller and
its subsidiaries and have been prepared in accordance with
generally accepted
accounting principles consistently applied throughout the periods
involved,
except as set forth in the notes thereto. In addition, the Seller
has delivered
information as to its loan gain and loss experience for the
immediately
preceding three-year period, in each case with respect to mortgage
loans owned
by it and such mortgage loans serviced for others during such
period, and all
such information so delivered is true and correct in all material
respects.
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. The Seller has completed any
forms
requested by the Purchaser in a timely manner and in accordance
with the
provided instructions;
(p) No Brokers' Fees. 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;
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<PAGE>
(q) Fair Consideration. The consideration received by the Seller
upon
the sale of the Mortgage Loans under this Agreement constitutes
fair
consideration and reasonably equivalent value for the Mortgage
Loans; and
(r) Reasonable Servicing Fee. The Seller acknowledges and agrees
that
the Servicing Fee, as calculated at the Servicing Fee Rate,
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.
Subsection 7.02 Representations and Warranties Regarding
Individual
Mortgage Loans. The Seller hereby represents and warrants to the
Purchaser that,
as to each Mortgage Loan, as of the related Closing Date for such
Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in
the
related Final Mortgage Loan Schedule and the tape delivered to the
Purchaser is
complete, true and correct;
(b) Mortgage Loans in Compliance with Purchase Price and Terms
Letter.
The Mortgage Loan is in compliance with all requirements set forth
in the
related Purchase Price and Terms Letter, and the characteristics of
the related
Mortgage Loan Package as set forth in the related Purchase Price
and Terms
Letter are true and correct;
(c) Payments Current. All payments required to be made up to the
close
of business on the Closing Date for such Mortgage Loan under the
terms of the
Mortgage Note have been made and credited; the Seller has not
advanced funds, or
induced, solicited or knowingly received any advance of funds from
a party other
than the owner of the related Mortgaged Property, directly or
indirectly, for
the payment of any amount required by the Mortgage Note or
Mortgage; and there
has been no delinquency, exclusive of any period of grace, in any
payment by the
Mortgagor thereunder during the last twelve months;
(d) No Outstanding Charges. There are no defaults by the Seller or
any
prior originator in complying with the terms of the Mortgage, and
all taxes,
ground rents, governmental assessments, insurance premiums,
leasehold payments,
water, sewer and municipal charges 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. Neither the Seller or, to the best
of the
Seller's knowledge, any prior originator or servicer has advanced
funds, or
induced, solicited or knowingly received any advance from any party
other than
the Mortgagor, directly or indirectly, for the payment of any
amount due under
the Mortgage Loan;
(e) Original Terms Unmodified. The terms of the Mortgage Note and
the
Mortgage have not been impaired, waived, altered or modified in any
respect,
except by written instruments, recorded in the applicable public
recording
office if necessary to maintain the lien priority of the Mortgage,
and which
have been delivered to the Custodian; the substance of any such
waiver,
alteration or modification has been approved by the insurer under
the Primary
Insurance Policy, if any, and the title insurer, to the extent
required by the
related policy, and is
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<PAGE>
reflected on the related Final Mortgage Loan Schedule. No
instrument of waiver,
alteration or modification has been executed, and no Mortgagor has
been
released, in whole or in part, except in connection with an
assumption agreement
approved by the insurer under the Primary Insurance Policy, if any,
the title
insurer, to the extent required by the policy, and which assumption
agreement
has been delivered to the Custodian and the terms of which are
reflected in the
related Final Mortgage Loan Schedule;
(f) No Defenses. The Mortgage Note and the Mortgage are not subject
to
any right of rescission, set-off, counterclaim or defense,
including the defense
of usury, nor will the operation of any of the terms of the
Mortgage Note and
the Mortgage, or the exercise of any right thereunder, render the
Mortgage Note
or the 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, to the best of the Seller's knowledge, 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;
(g) Hazard Insurance. All buildings or other customarily
insured
improvements upon the Mortgaged Property are insured by a Qualified
Insurer
acceptable to Fannie Mae and Freddie Mac and to lending
institutions against
loss by fire, hazards of extended coverage and such other hazards
as are
customary in the area where the Mortgaged Property is located,
pursuant to
insurance policies conforming to the requirements of the Servicing
Addendum. All
such insurance policies are in full force and effect and contain a
standard
mortgagee clause naming the Seller, its successors and assigns as
mortgagee and
all premiums thereon have been paid. If the Mortgaged Property is
in an area
identified on a Flood Hazard Map or Flood Insurance Rate Map issued
by the
Federal Emergency Management Agency as having special flood hazards
(and such
flood insurance has been made available) a flood insurance policy
meeting the
requirements of the current guidelines of the Federal Insurance
Administration
is in effect which policy conforms to the requirements of Fannie
Mae and Freddie
Mac. 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
Mortgagor's cost and expense and to seek reimbursement therefor
from the
Mortgagor. Where required by state law or regulation, the Mortgagor
has been
given an opportunity to choose the carrier of the required hazard
insurance,
provided the policy is not a "master" or "blanket" hazard insurance
policy
covering the common facilities of a planned unit development. 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 Subservicer'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,
including
without limitation, no unlawful fee, commission, kickback or other
unlawful
compensation or value of any kind has been or will be received,
retained or
realized by any attorney, firm or other person or entity, and no
such unlawful
items have been received, retained or realized by the Seller;
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<PAGE>
(h) Compliance with Applicable Law. Any and all requirements of
any
federal, state or local law including, without limitation, usury,
truth in
lending, real estate settlement procedures, consumer credit
protection, equal
credit opportunity, fair housing or disclosure laws applicable to
the
origination and servicing of the Mortgage Loan have been complied
with; the
Seller maintains, and shall maintain, evidence of such compliance
as required by
applicable law or regulation and shall make such evidence available
for
inspection at the Seller's office during normal business hours upon
reasonable
advance notice;
(i) No Satisfaction of Mortgage. The Mortgage has not been
satisfied,
cancelled, subordinated or rescinded, in whole or in part, 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
satisfaction, cancellation, subordination, rescission or release.
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) Valid First Lien. The Mortgage is a valid, existing and
enforceable first lien on the Mortgaged Property, including all
improvements on
the Mortgaged Property, free and clear of all adverse claims, liens
and
encumbrances having priority over the lien of the Mortgage, subject
only to (a)
the lien of current real property taxes and assessments not yet due
and payable,
(b) covenants, conditions and restrictions, rights of way,
easements and other
matters of the public record as of the date of recording being
acceptable to
mortgage lending institutions generally and specifically referred
to in the
lender's title insurance policy delivered to the originator of the
Mortgage Loan
and which do not adversely affect the Appraised Value of the
Mortgaged Property,
and (c) other matters to which like properties are commonly subject
which do not
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, existing and enforceable first
lien and first
priority security interest on the property described therein and
the Seller has
full right to sell and assign the same to the Purchaser. The
Mortgaged Property
was not, as of the date of origination of the Mortgage Loan,
subject to a
mortgage, deed of trust, deed to secure debt or other security
instrument
creating a lien subordinate to the lien of the Mortgage;
(k) Validity of Mortgage Documents. 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 accordance with its
terms. The
documents, instruments and agreements submitted for loan
underwriting were not
falsified and contain no untrue statement of material fact nor omit
to state a
material fact required to be stated therein or necessary to make
the information
and statements therein not misleading. To the best of the Seller's
knowledge, no
fraud was committed in connection with the origination of the
Mortgage Loan. The
Seller has reviewed all of the documents constituting the Servicing
File and has
made such inquiries as it deems necessary to make and confirm the
accuracy of
the representations set forth herein;
(l) Regarding the Mortgagor. To the best of the Seller's
knowledge,
all parties to the Mortgage Note and the Mortgage had legal
capacity to enter
into the Mortgage Loan and to execute and deliver the Mortgage Note
and the
Mortgage, and the Mortgage Note
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<PAGE>
and the Mortgage have been duly and properly executed by such
parties. The
Mortgagor is one or more natural persons and/or trustee for an
Illinois land
trust or a trustee under a "living trust" and such "living trust"
is in
compliance with Fannie Mae guidelines for such trusts;
(m) Full Disbursement of Proceeds. The proceeds of the Mortgage
Loan
have been fully disbursed to or for the account of the Mortgagor
and there is no
obligation for the Mortgagee to advance additional funds thereunder
and any and
all requirements as to completion of any on-site or off-site
improvement and as
to disbursements of any escrow funds therefor have been complied
with. All
costs, fees and expenses incurred in making or closing the Mortgage
Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not
entitled to
any refund of any amounts paid or due to the Mortgagee pursuant to
the Mortgage
Note or Mortgage;
(n) Doing Business. All parties which have had any interest in
the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or,
during the period in which they held and disposed of such interest,
were) in
compliance with any and all applicable "doing business" and
licensing
requirements of the laws of the state wherein the Mortgaged
Property is located;
(o) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's
title insurance policy (which, in the case of an Adjustable Rate
Mortgage Loan
has an adjustable rate mortgage endorsement in the form of ALTA 6.0
or 6.1)
acceptable to Fannie Mae and Freddie Mac, issued by a title insurer
acceptable
to Fannie Mae and Freddie Mac and qualified to do business in the
jurisdiction
where the Mortgaged Property is located, insuring (subject to the
exceptions
contained in (j) 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 and, with respect to any Adjustable Rate Mortgage Loan,
against any loss by
reason of the invalidity or unenforceability of the lien resulting
from the
provisions of the Mortgage providing for adjustment in the Mortgage
Interest
Rate and Monthly Payment. Where required by the 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 to and from the Mortgaged
Property, and
against encroachments by or upon the Mortgaged Property or any
interest therein.
The Seller is the sole insured of such lender's title insurance
policy, 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. To the best of the Seller's knowledge, 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;
(p) No Defaults. There is no default, breach, violation or event
of
acceleration existing under the Mortgage or the 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 of
acceleration, and the Seller has not waived any default, breach,
violation or
event of acceleration;
(q) No Mechanics' Liens. 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
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<PAGE>
could give rise to such lien) affecting the related Mortgaged
Property which are
or may be liens prior to, or equal or coordinate with, the lien of
the related
Mortgage;
(r) Location of Improvements; No Encroachments. All improvements
which
were considered in determining the Appraised Value of the related
Mortgaged
Property lay wholly within the boundaries and building restriction
lines of the
Mortgaged Property, and no improvements on adjoining properties
encroach upon
the Mortgaged Property. No improvement located on or being part of
the Mortgage
Property is in violation of any applicable zoning law or
regulation;
(s) Origination. The Mortgage Loan was originated by the Seller or
by
a savings and loan association, a savings bank, a commercial bank
or similar
banking institution which is supervised and examined by a federal
or state
authority, or by a mortgagee approved as such by the Secretary of
HUD pursuant
to Sections 203 and 211 of the National Housing Act. The Seller and
all other
parties which have had any interest in the Mortgage Loan, whether
as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which
they held
and disposed of such interest, were) in compliance with any and all
applicable
"doing business" and licensing requirements of the laws of the
state wherein the
Mortgaged Property is located;
(t) Payment Terms. Principal payments on the Mortgage Loan
commenced
no more than sixty days after the proceeds of the Mortgage Loan
were disbursed.
The Mortgage Loan bears interest at the Mortgage Interest Rate.
With respect to
each Mortgage Loan, the Mortgage Note is payable on the first day
of each month
in Monthly Payments, which, in the case of a Fixed Rate Mortgage
Loan, are
sufficient to fully amortize the original principal balance over
the original
term thereof and to pay interest at the related Mortgage Interest
Rate, and, in
the case of an Adjustable Rate Mortgage Loan, are changed on each
Adjustment
Date, and in any case, are sufficient to fully amortize the
original principal
balance over the original term thereof and to pay interest at the
related
Mortgage Interest Rate. The Index for each Adjustable Rate Mortgage
Loan is as
defined in the related Purchase Price and Terms Letter. The
Mortgage Note does
not permit negative amortization. No Mortgage Loan is a Convertible
Mortgage
Loan and no Mortgage Loan is a simple interest Mortgage Loan;
(u) Collection Practices; Escrow Deposits; Interest Rate
Adjustments.
The origination and collection practices used by the Seller with
respect to each
Mortgage Note and Mortgage have been in all respects legal, proper,
prudent and
customary in the mortgage origination and servicing industry. The
Mortgage Loan
has been serviced by the Seller and, to the best of the Seller's
knowledge, any
predecessor servicer in accordance with the terms of the Mortgage
Note. With
respect to escrow deposits and Escrow Payments, if any, 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. No escrow deposits or Escrow
Payments or
other charges or payments due the Seller have been capitalized
under any
Mortgage or the related Mortgage Note and no such escrow deposits
or Escrow
Payments are being held by the Seller for any work on a Mortgaged
Property which
has not been completed. All Mortgage Interest Rate adjustments have
been made in
strict compliance with state and federal law and the terms of the
related
Mortgage Note. Any interest required to be paid pursuant to state
and local law
has been properly paid and credited;
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<PAGE>
(v) Mortgaged Property Undamaged; No Condemnation Proceedings There
is
no proceeding pending or, to the Seller's knowledge, threatened for
the total or
partial condemnation of the Mortgaged Property and such property is
in good
repair and is undamaged by waste, fire, earthquake or earth
movement, windstorm,
flood, tornado or other casualty, so as to affect adversely the
value of the
Mortgaged Property as security for the Mortgage Loan or the use for
which the
premises were intended;
(w) Customary Provisions. The Mortgage and related Mortgage
Note
contain 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,
(a) in the case of a Mortgage designated as a deed of trust, by
trustee's sale,
and (b) otherwise by judicial foreclosure. The Mortgaged Property
has not been
subject to any bankruptcy proceeding or foreclosure proceeding and
the Mortgagor
has not filed for protection under applicable bankruptcy laws.
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;
(x) Conformance with Agency and Underwriting Guidelines. The
Mortgage
Loan was underwritten in accordance with the underwriting
guidelines of the
Seller in effect at the time the Mortgage Loan was originated,
which
underwriting guidelines have been reviewed and approved by the
Seller prior to
the related Closing Date. The Mortgage Note and Mortgage are on
forms acceptable
to Fannie Mae and Freddie Mac;
(y) No Additional Collateral. The Mortgage Note is not and has
not
been secured by any collateral except the lien of the corresponding
Mortgage on
the Mortgaged Property and the security interest of any applicable
security
agreement or chattel mortgage referred to in (j) above;
(z) Appraisal. The Mortgage File contains an appraisal of the
related
Mortgaged Property which satisfied the standards of Fannie Mae and
Freddie Mac
and was made and signed, prior to the approval of the Mortgage Loan
application,
by a qualified 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, whose compensation is not affected by the approval or
disapproval of
the Mortgage Loan and who met the minimum qualifications of Fannie
Mae and
Freddie Mac. Each appraisal of the Mortgage Loan was made in
accordance with the
requirements of 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;
(aa) Deeds of Trust. In the event the Mortgage constitutes a deed
of
trust, a trustee, duly qualified under applicable law to serve as
such, has been
properly designated and currently so serves and is named in the
Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the
trustee
under the deed of trust, except in connection with a trustee's sale
after
default by the Mortgagor;
(bb) No Buydown Provisions; No Graduated Payments or Contingent
Interests. No Mortgage Loan contains provisions pursuant to which
Monthly
Payments are (a) paid or
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<PAGE>
partially paid with funds deposited in any separate account
established by the
Seller, the Mortgagor, or anyone on behalf of the Mortgagor, (b)
paid by any
source other than the Mortgagor or (c) contains any other similar
provisions
which may constitute a "buydown" provision. The Mortgage Loan is
not a graduated
payment mortgage loan and the Mortgage Loan does not have a shared
appreciation
or other contingent interest feature;
(cc) Mortgagor Acknowledgment. The Mortgagor has executed a
statement
to the effect that the Mortgagor has received all disclosure
materials required
by applicable law with respect to the making of fixed rate mortgage
loans in the
case of Fixed Rate Mortgage Loans, and adjustable rate mortgage
loans in the
case of Adjustable Rate Mortgage Loans and rescission materials
with respect to
Refinanced Mortgage Loans, and such statement is and will remain in
the Mortgage
File;
(dd) No Construction Loans. No Mortgage Loan was made in
connection
with (a) the construction or rehabilitation of a Mortgaged Property
or (b)
facilitating the trade-in or exchange of a Mortgaged Property;
(ee) Acceptable Investment. 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 can
reasonably be expected
to cause the Mortgage Loan to be an unacceptable investment, cause
the Mortgage
Loan to become delinquent, or adversely affect the value of the
Mortgage Loan;
(ff) LTV, PMI Policy. Each Mortgage Loan with an LTV at origination
in
excess of 80% is and will be subject to a Primary Mortgage
Insurance Policy,
issued by a Qualified Insurer, which insures that portion of the
Mortgage Loan
in excess of the portion of the Appraised Value of the Mortgaged
Property
required by Fannie Mae. All provisions of such Primary 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. Any Mortgage subject to
any such
Primary Insurance Policy obligates the Mortgagor thereunder to
maintain such
insurance and to pay all premiums and charges in connection
therewith. The
Mortgage Interest Rate for the Mortgage Loan does not include any
such insurance
premium;
(gg) Occupancy of Mortgaged Property. The Mortgaged Property is
lawfully occupied under applicable law; 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, have
been made or
obtained from the appropriate authorities;
(hh) No Misrepresentation or Fraud. No error, omission,
misrepresentation, negligence, fraud or similar occurrence with
respect to a
Mortgage Loan has taken place on the part of the Seller or, to the
best of the
Seller's knowledge, any person, including without limitation the
Mortgagor, any
appraiser, any builder or developer, or any other party involved in
the
origination of the Mortgage Loan or in the application of any
insurance in
relation to such Mortgage Loan;
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<PAGE>
(ii) Transfer of Mortgage Loans. 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 (except
with respect to
each MERS Designated Mortgage Loan ). Each original Mortgage was
recorded and,
except for those Mortgage Loans subject to the MERS identification
system, all
subsequent assignments of the original Mortgage (other than the
assignment to
the Purchaser) have been recorded in the appropriate jurisdictions
wherein such
recordation is necessary to perfect the lien thereof as against
creditors of the
Seller, or is in the process of being recorded. On or prior to the
Closing Date,
Seller has provided the Custodian and the Purchaser with a MERS
Report listing
the Custodian as the Investor with respect to each MERS Designated
Mortgage
Loan. With respect to each MERS Designated Mortgage Loan, the
Seller has
designated the Custodian as the Investor and no Person is listed as
Interim
Funder on the MERS(R) System;
(jj) Mortgage File. With respect to each Mortgage Loan, the Seller
is
in possession of a complete Mortgage File except for the documents
which have
been delivered to the Purchaser or the Custodian or which have been
submitted
for recording and not yet returned;
(kk) Ownership. Immediately prior to the payment of the
Purchase
Price, the Seller was the sole owner and holder of the Mortgage
Loans and the
indebtedness evidenced by the Mortgage Note. The Mortgage Loans,
including the
Mortgage Note and the Mortgage, were not assigned or pledged by the
Seller and
the Seller had good and marketable title thereto, and the Seller
had full right
to transfer and sell the Mortgage Loans to the Purchaser free and
clear of any
encumbrance, participation interest, lien, equity, pledge, claim or
security
interest and had full right and authority subject to no interest
or
participation in, or agreement with any other party to sell or
otherwise
transfer the Mortgage Loans. 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 monitor, possess and
control the
Mortgage Loan except in connection with the servicing of the
Mortgage Loan by
the Seller as set forth in this Agreement. After the Closing Date,
the Seller
will not have any right to modify or alter the terms of the sale of
the Mortgage
Loan and the Seller will not have any obligation or right to
repurchase the
Mortgage Loan, except as provided in this Agreement or as otherwise
agreed to by
the Seller and the Purchaser;
(ll) Consolidated Future Advances. Any principal advances made to
the
Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding
principal amount secured by the Mortgage, and the secured principal
amount, as
consolidated, bears a single interest rate and single repayment
term. The lien
of the Mortgage securing the consolidated principal amount is
expressly insured
as having first lien priority by a title insurance policy, an
endorsement to the
policy insuring the mortgagee's consolidated interest or by other
title evidence
acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does
not exceed the original principal amount of the Mortgage Loan;
(mm) No Balloon Payment. No Mortgage Loan has a balloon payment
feature;
(nn) Condominiums/ Planned Unit Developments. If the
Residential
Dwelling on the Mortgaged Property is a condominium unit or a unit
in a planned
unit development (other
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than a de minimis planned unit development) such condominium or
planned unit
development project meets the eligibility requirements of Fannie
Mae and Freddie
Mac including Fannie Mae eligibility requirements for sale to
Fannie Mae or is
located in a condominium or planned unit development project which
has received
Fannie Mae project approval and the representations and warranties
required by
Fannie Mae with respect to such condominium or planned unit
development have
been made and remain true and correct in all respects;
(oo) Downpayment. The source of the down payment with respect to
each
Mortgage Loan has been fully verified by the Seller;
(pp) Calculation of Interest. Interest on each Mortgage Loan is
calculated on the basis of a 360-day year consisting of twelve
30-day months;
(qq) Environmental Matters. The Mortgaged Property is in
material
compliance with all applicable local, state and federal
environmental laws,
rules or regulations pertaining to environmental hazards including,
without
limitation, asbestos, and neither the Seller nor, to the Seller's
knowledge, the
related Mortgagor, has received any notice of any violation or
potential
violation of such law nor is there any pending action or proceeding
directly
involving any Mortgaged Property of which the Seller is aware in
which
compliance with any environmental law, rule or regulation is an
issue;
(rr) Ground Leases. With respect to any ground lease to which a
Mortgaged Property may be subject: (A) the Mortgagor is the owner
of a valid and
subsisting leasehold interest under such ground lease; (B) such
ground lease is
in full force and effect, unmodified and not supplemented by any
writing or
otherwise; (C) all rent, additional rent and other charges reserved
therein have
been fully paid to the extent payable as of the Closing Date; (D)
the Mortgagor
enjoys the quiet and peaceful possession of the leasehold estate;
(E) 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;
(F) the
lessor under such ground lease is not in default under any of the
terms or
provisions of such ground lease on the part of the lessor to be
observed or
performed; (G) the lessor under such ground lease has satisfied any
repair or
construction obligations due as of the Closing Date pursuant to the
terms of
such ground lease; (H) the execution, delivery and performance of
the Mortgage
do not require the consent (other than those consents which have
been obtained
and are in full force and effect) under, and will not contravene
any provision
of or cause a default under, such ground lease; and (I) the term of
such lease
does not terminate earlier than the maturity date of the Mortgage
Note;
(ss) Predatory Lending Regulations; High Cost Loans. None of
the
Mortgage Loans are classified as (a) "high cost" loans under the
Home Ownership
and Equity Protection Act of 1994 or (b) "high cost," "threshold,"
"covered," or
"predatory" loans under any other applicable state, federal or
local law. no
predatory or deceptive lending practices, including, without
limitation, the
extension of credit without regard to the ability of the Mortgagor
to repay and
the extension of credit which has no apparent benefit to the
Mortgagor, were
employed in the origination of the Mortgage Loan;
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<PAGE>
(tt) Location and Type of Mortgaged Property. The Mortgaged
Property
is a fee simple property located in the state identified in the
Mortgage Loan
Schedule and consists of a parcel of real property with a detached
single family
residence erected thereon, or a two- to four-family dwelling, or an
individual
condominium unit in a low-rise condominium project, or an
individual unit in a
planned unit development, provided, however, that any condominium
project or
planned unit development shall conform with the applicable Fannie
Mae and
Freddie Mac requirements regarding such dwellings, and no residence
or dwelling
is a mobile home or a manufactured dwelling. No portion of the
Mortgaged
Property is used for commercial purposes;
(uu) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws and regulations, including
without
limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering
compliance program
as required by the Anti-Money Laundering Laws, has conducted the
requisite due
diligence in connection with the origination of each Mortgage Loan
for purposes
of the Anti-Money Laundering Laws, including with respect to the
legitimacy of
the applicable Mortgagor and the origin of the assets used by the
said Mortgagor
to purchase the property in question, and maintains, and will
maintain,
sufficient information to identify the applicable Mortgagor for
purposes of the
Anti-Money Laundering Laws;
(vv) Due on Sale. The Mortgage contains an enforce
