<PAGE>
EXHIBIT 99.9
MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
dated as of March 27, 2001
between
MERRILL LYNCH MORTGAGE CAPITAL INC., Purchaser
and
CENDANT MORTGAGE CORPORATION and
BISHOP'S GATE RESIDENTIAL MORTGAGE TRUST
(formerly known as CENDANT RESIDENTIAL MORTGAGE TRUST)
Sellers
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ARTICLE I:
DEFINITIONS.................................................
1
Section 1.01
Defined
Terms............................................ 1
ARTICLE II: SALE
AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN
DOCUMENTS...................................................
8
Section 2.01
Sale and Conveyance of
Mortgage Loans.................... 8
Section 2.02
Possession of Mortgage
Files............................. 9
Section 2.03
Books and
Records........................................ 10
Section 2.04
Defective Documents;
Delivery of Mortgage Loan
Documents................................................
10
Section 2.05
Transfer of Mortgage
Loans............................... 11
ARTICLE III:
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REPURCHASE; REVIEW OF MORTGAGE LOANS........................
12
Section 3.01
Representations and
Warranties of each Seller............ 12
Section 3.02
Representations and
Warranties of the Servicer........... 13
Section 3.03
Representations and
Warranties as to Individual Mortgage
Loans....................................................
14
Section 3.04
Repurchase...............................................
19
Section 3.05
Certain Covenants of
each Seller and the Servicer........ 20
ARTICLE IV:
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND
CONDITIONS PRECEDENT TO FUNDING.............................
21
Section 4.01
Representations and
Warranties........................... 21
Section 4.02
Conditions Precedent
to Closing.......................... 22
ARTICLE V:
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..............
23
Section 5.01
Cendant Mortgage to
Act as Servicer; Servicing Standards:
Additional Documents. Consent of the Purchaser...........
23
Section 5.02
Collection of Mortgage
Loan Payments..................... 24
Section 5.03
Reports for Specially
Serviced Mortgage Loans and
Foreclosure Sales........................................
25
Section 5.04
Establishment of
Collection Account; Deposits in
Collection Account.......................................
25
Section 5.05
Permitted Withdrawals
from the Collection Account........ 26
Section 5.06
Establishment of
Escrow Accounts: Deposits in Escrow..... 27
Section 5.07
Permitted Withdrawals
From Escrow Accounts............... 27
Section 5.08
Payment of Taxes,
Insurance and Other Charges:
Maintenance of Primary Insurance Policies; Collections
Thereunder...............................................
27
Section 5.09
Transfer of
Accounts..................................... 28
Section 5.10
Maintenance of Hazard
Insurance.......................... 28
Section 5.11
Maintenance of
Mortgage Impairment Insurance Policy...... 29
Section 5.12
Fidelity Bond; Errors
and Omissions Insurance............ 29
Section 5.13
Management of REO
Properties............................. 30
Section 5.14
Sale of Specially
Serviced Mortgage Loans and REO
Properties...............................................
31
Section 5.15
Realization Upon
Specially Serviced Mortgage Loans and
REO Properties...........................................
32
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Section 5.16
Investment of Funds in
the Collection Account............ 33
ARTICLE VI:
REPORTS; REMITTANCES; ADVANCES..............................
34
Section 6.01
Remittances..............................................
34
Section 6.02
Reporting................................................
34
Section 6.03
Monthly Advances by
the Servicer......................... 34
Section 6.04
Non-recoverable-Advances.................................
35
Section 6.05
Itemization of
Servicing Advances........................ 35
Section 6.06
Officer's
Certificate.................................... 35
ARTICLE VII: GENERAL
SERVICING PROCEDURE................................. 35
Section 7.01
Enforcement of
Due-on-Sale Clauses, Assumption
Agreements...............................................
35
Section 7.02
Satisfaction of
Mortgages and Release of Mortgage Files.. 36
Section 7.03
Servicing
Compensation................................... 37
Section 7.04
Annual Statement as to
Compliance........................ 37
Section 7.05
Annual Independent
Certified Public Accountants'
Servicing Report.........................................
37
Section 7.06
Purchaser's Right to
Examine Servicer Records............ 37
ARTICLE VIII: REPORTS TO BE PREPARED BY THE
SERVICER...................... 38
Section 8.01
The Servicer's
Reporting Requirements.................... 38
Section 8.02
Financial
Statements..................................... 38
ARTICLE IX: THE
SELLERS.................................................
38
Section 9.01
Indemnification; Third
Party Claims...................... 39
Section 9.02
Merger or
Consolidation of the Seller.................... 39
Section 9.03
Limitation on
Liability of the Sellers and Others........ 39
Section 9.04
Servicer Not to
Resign................................... 40
ARTICLE X:
DEFAULT.....................................................
40
Section 10.01
Events of Default........................................
40
ARTICLE XI:
TERMINATION.................................................
41
Section 11.01
Term and Termination.....................................
41
Section 11.02
Survival.................................................
41
ARTICLE XII: GENERAL
PROVISIONS.......................................... 42
Section 12.01
Successor to the Servicer................................
42
Section 12.02
Governing Law............................................
42
Section 12.03
Notices..................................................
42
Section 12.04
Severability of Provisions...............................
42
Section 12.05
Schedules and Exhibits...................................
42
Section 12.06
General Interpretive Principles..........................
42
Section 12.07
Waivers and Amendments, Noncontractual Remedies
Preservation of Remedies.................................
43
Section 12.08
Captions.................................................
43
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Section 12.09
Counterparts; Effectiveness..............................
43
Section 12.10
Entire Agreement; Amendment..............................
43
Section 12.11
Further Assurances.......................................
44
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Schedules
A. Mortgage Loan
Schedule
B. Content of
Mortgage File
B-1
Purchaser's Mortgage File
B-2
Servicer's Mortgage File
B-3
Credit Documents
C. Cendant
Guidelines and Restrictions
Exhibits
Exhibit 2.05 Form of Assignment,
Assumption and Recognition Agreement
Exhibit 5.03(a) Report P-4DL
Exhibit 5.03(b) Report S-5L2
Exhibit 5.03(c) Form of Notice of Foreclosure
Exhibit 5.041
Form of Collection Account Certification
Exhibit 5.042
Form of Collection Account Letter Agreement
Exhibit 5.06-1 Form of
Escrow Account Certification
Exhibit 5.06-2 Form of
Escrow Account Letter Agreement
Exhibit 6.02(a) Report P-139 -- Monthly Statement of Mortgage
Accounts
Exhibit 6.02(b) Report S-50Y -- Private Pool Detail Report
Exhibit 6.02(c) Report S-213 -- Summary of Curtailments Made
Remittance Report
Exhibit 6.02(d) Report S-214 -- Summary of Paid in Full Remittance
Report
Exhibit 6.02(e) Report S-215 -- Consolidation of Remittance
Report
Exhibit 6.02(f) Report T-62C - Monthly Accounting Report
Exhibit 6.02(g) Report T-62E -- Liquidation Report
Exhibit 8.01 Report P-195
Delinquency Report
Exhibit 9 Form of
Officer's Certificate
Exhibit 10 Form of
Warranty Bill of Sale
<PAGE>
MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
This
Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated
as of
March 27, 2001, is entered into between Merrill Lynch Mortgage
Capital Inc., as
the Purchaser ("Purchaser"), Cendant Mortgage Corporation ("Cendant
Mortgage")
and Bishop's Gate Residential Mortgage Trust (formerly known as
Cendant
Residential Mortgage Trust) (the "Trust," together with Cendant
Mortgage, the
"Sellers" and individually, each a "Seller"), as the Sellers.
PRELIMINARY STATEMENT
(1) Cendant Mortgage
is engaged in the business, inter alia, of making loans to
individuals, the repayment of which is secured by a first lien
mortgage on
such
individuals' residences (each, a "MORTGAGE LOAN"). The Trust is
engaged in the business of purchasing such Mortgage Loans from
Cendant
Mortgage and selling same to investors.
(2) Purchaser is
engaged in the business, inter alia, of purchasing Mortgage
Loans for its own account.
(3) Cendant Mortgage
has established certain terms, conditions and loan
programs, as described in Cendant Mortgage's Program and
Underwriting
Guidelines (the "CENDANT GUIDE") and Purchaser is willing to
purchase
Mortgage Loans that comply with the terms of such terms, conditions
and
loan
programs. The applicable provisions of the Cendant Guide are
attached
hereto as Schedule C.
(4) Purchaser and
Sellers desire to establish a flow program whereby Cendant
Mortgage will make Mortgage Loans which meet the applicable
provisions of
the
Cendant Guide, and Purchaser will, on a regular basis, purchase
such
Mortgage Loans from Cendant Mortgage or the Trust, as applicable,
provided
the
parties agree on the price, date and other conditions or
considerations
as
set forth in this Agreement.
(5) Purchaser and
Sellers wish to prescribe the terms and manner of purchase by
the
Purchaser and sale by the Sellers of the Mortgage Loans, and
the
management and servicing of the Mortgage Loans by Cendant Mortgage,
as the
Servicer (the "Servicer"), in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth,
the Purchaser and the Sellers agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement, the
following
words and phrases shall have the following meaning specified in
this Article:
"Affiliate": When used with reference to a specified Person, any
Person
that (i) directly or indirectly controls or is controlled by or is
under common
control with the specified Person, (ii) is an officer of, partner
in or trustee
of, or serves in a similar capacity with respect to, the specified
person or of
which the specified Person is an officer, partner or trustee, or
with respect to
which the specified Person serves in a similar capacity, or (iii)
directly or
indirectly is the beneficial owner of 10% or more of any class of
equity
securities of the specified Person or of which the specified person
is directly
or indirectly the owner of 10% or more of any class of equity
securities.
"Agreement": This Mortgage Loan Flow Purchase, Sale & Servicing
Agreement
between the Purchaser and the Sellers.
"ALTA": The American Land Title Association.
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"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 FNMA and FHLMC; or
(ii) the
purchase price paid for the related Mortgaged Property by the
Mortgagor with the
proceeds of the Mortgage Loan; provided that, in the case of a
Refinanced
Mortgage Loan, such value of the Mortgaged Property shall be 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 FNMA and FHLMC.
"ARM
Loan": An "adjustable rate" Mortgage Loan, the Note Rate of which
is
subject to periodic adjustment in accordance with the terms of the
Mortgage
Note.
"Assignment": An individual assignment of a Mortgage, notice of
transfer or
equivalent instrument in recordable form, sufficient under the laws
of the
jurisdiction wherein the related Mortgaged Property is located to
reflect of
record the sale or transfer of the Mortgage Loan.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (11 U.S.C.
Sections
101-1330), as amended, modified, or supplemented from time to time,
and any
successor statute, and all rules and regulations issued or
promulgated in
connection therewith.
"Business Day": Any day other than (i) a Saturday or Sunday, or
(ii) a day
on which the Federal Reserve is closed.
"Cendant Guide": As defined in paragraph 3 of the Preliminary
Statement to
this Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The separate trust account or accounts
created and
maintained pursuant to Section 5.04 which shall be entitled
"Cendant Mortgage
Corporation, as servicer and custodian for the Purchaser of
Mortgage Loans under
the Mortgage Loan Flow Purchase, Sale & Servicing Agreement,
dated as of March
27, 2001."
"Condemnation Proceeds": All awards or settlements in respect of a
taking
of an entire Mortgaged Property or a part thereof by exercise of
the power of
eminent domain or condemnation.
"Credit Documents": Those documents, comprising part of the
Mortgage File,
required of the Mortgagor, as described in Section 2 (Specific Loan
Program
Guidelines) of the Cendant Guide. The Credit Documents are
specified on Schedule
B-3 hereto.
"Cut-off Date": The first day of the month in which the respective
Funding
Date occurs.
"Defective Mortgage Loan": As defined in Section 3.04(3).
"Determination Date": The 15th day of each calendar month,
commencing on
the 15th day of the month following the Funding Date, or, if such
15th day is
not a Business Day, the Business Day immediately preceding such
15th day.
"Due
Date": With respect to any Mortgage Loan, the day of the month
on
which each Monthly Payment is due thereon, exclusive of any days of
grace.
"Eligible Account": One or more accounts (i) that are maintained
with a
depository institution the long-term unsecured debt obligations of
which have
been rated by each Rating Agency in one of its two highest rating
categories at
the time of any deposit therein, (ii) that are trust accounts with
any
depository institution held by the depository institution in its
capacity as a
corporate trustee, or (iii) the deposits in which are insured by
the FDIC (to
the limits established by the FDIC) and the uninsured deposits in
which are
otherwise secured such that the
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Purchaser has a claim with respect to the funds in such accounts or
a perfected
first security interest against any collateral securing such funds
that is
superior to claims of any other depositors or creditors of the
depository
institution with which such accounts are maintained. In addition,
solely with
respect to Mortgage Loans which are not part of a securitization,
"Eligible
Account" shall include any accounts that meet the standards
established from
time to time by FNMA for eligible custodial depositories.
"Environmental Assessment": A "Phase I" environmental assessment of
a
Mortgaged Property prepared by an Independent Person who regularly
conducts
environmental assessments and who has any necessary license(s)
required by
applicable law and has five years experience in conducting
environmental
assessments.
"Environmental Conditions Precedent to Foreclosure": As defined in
Section
5.15.
"Environmental Laws": All federal, state, and local statutes,
laws,
regulations, ordinances, rules, judgments, orders, decrees or other
governmental
restrictions relating to the environment or to emissions,
discharges or releases
of pollutants, contaminants or industrial, toxic or hazardous
substances or
wastes into the environment, including ambient air, surface water,
ground water,
or land, or otherwise relating to the manufacture, processing,
distribution,
use, treatment, storage, disposal, transport or handling of
pollutants,
contaminants or industrial, toxic or hazardous substances or wastes
or the
cleanup or other remediation thereof.
"Escrow Account": The separate trust account or accounts created
and
maintained pursuant to Section 5.06 which shall be entitled
"Cendant Mortgage
Corporation, as servicer and custodian for the Purchaser under the
Mortgage Loan
Flow Purchase, Sale & and-Servicing Agreement, dated as of
March 27, 2001 (as
amended), and various mortgagors."
"Escrow Payments": The amounts constituting ground rents,
taxes,
assessments, water rates, mortgage insurance premiums, fire and
hazard insurance
premiums and other payments required to be escrowed by the
Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Event of Default": Any one of the conditions or circumstances
enumerated
in Section 10.01.
"FDIC": The Federal Deposit Insurance Corporation or any
successor
organization.
"FHLMC": The Federal Home Loan Mortgage Corporation (also known as
Freddie
Mac) or any successor organization.
"FHLMC Servicing Guide": The FHLMC/Freddie Mac Sellers' and
Servicers'
Guide in effect on and after the Funding Date.
"Fidelity Bond": A fidelity bond to be maintained by the Servicer
pursuant
to Section 5.12.
"FNMA": The Federal National Mortgage Association (also known as
Fannie
Mae) or any successor organization.
"FNMA Guide": The FNMA/Fannie Mae Selling Guide and the Servicing
Guide,
collectively, in effect on and after the Funding Date.
"Funding Date": Each date (up to four per month) that Purchaser
purchases
Mortgage Loans from the Sellers hereunder.
"Gross Margin": With respect to each ARM Loan, the fixed percentage
added
to the Index on each Rate Adjustment Date, as specified in each
related Mortgage
Note and listed in the Mortgage Loan Schedule.
"Independent": With respect to any specified Person, such Person
who: (i)
does not have any direct financial interest or any material
indirect financial
interest in the applicable Mortgagor, the Sellers, the Purchaser,
or their
Affiliates; and (b) is not connected with the applicable Mortgagor,
the Sellers,
the Purchaser, or their
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<PAGE>
respective Affiliates as an officer, employee, promoter,
underwriter, trustee,
member, partner, shareholder, director, or Person performing
similar functions.
"Index": With respect to each ARM Loan, on each Rate Adjustment
Date, the
applicable rate index set forth on the Mortgage Loan Schedule,
which shall be an
index described on such Mortgage Loan Schedule.
"Insolvency Proceeding": With respect to any Person: (i) any case,
action,
or proceeding with respect to such Person before any court or other
governmental
authority relating to bankruptcy, reorganization, insolvency,
liquidation,
receivership, dissolution, winding-up, or relief of debtors; or
(ii) any general
assignment for the benefit of creditors, composition, marshaling of
assets for
creditors, or other, similar arrangement in respect of the
creditors generally
of such Person or any substantial portion of such Person's
creditors; in any
case undertaken under federal, state or foreign law, including the
Bankruptcy
Code.
"Insurance Proceeds": Proceeds of any Primary Insurance Policy,
title
policy, hazard policy or other insurance policy covering a Mortgage
Loan, if
any, to the extent such proceeds are not to be applied to the
restoration of the
related Mortgaged Property or released to the Mortgagor in
accordance with the
procedures that the Servicer would follow in servicing mortgage
loans held for
its own or its Affiliates' account or managed by it for
third-party
institutional investors.
"Legal Documents": Those documents, comprising part of the Mortgage
File,
set forth in Schedule B-1 of this Agreement.
"Liquidation Proceeds": Amounts, other than Insurance Proceeds
and
Condemnation Proceeds, received by the Servicer 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 an
REO Property in accordance with the provisions hereof.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan,
the
original principal balance of such Mortgage Loan divided by the
lesser of the
Appraised Value of the related Mortgaged Property or the purchase
price.
"MAI
Appraiser": With respect to any real property, a member of the
American Institute of Real Estate Appraisers with a minimum of 5
years of
experience appraising real property of a type similar to the real
property being
appraised and located in the same geographical area as the real
property being
appraised.
"Monthly Advance": The aggregate amount of the advances made by
the
Servicer on any Remittance Date pursuant to and as more fully
described in
Section 6.03.
"Monthly Payment": The
scheduled monthly payment of principal and interest
on a Mortgage Loan which is payable by a Mortgagor under the
related Mortgage
Note.
"Monthly Period": Initially, the period from the Funding Date
through to
and including the first Record Date during the term hereof, and,
thereafter, the
period commencing on the day after each Record Date during the term
hereof and
ending on the next succeeding Record Date during the term hereof
(or, if
earlier, the date on which this Agreement terminates).
"Mortgage": The mortgage, deed of trust or other instrument
securing a
Mortgage Note, which creates a first lien on an unsubordinated
estate in fee
simple in real property securing the Mortgage Note.
"Mortgaged Property": With respect to a Mortgage Loan, the
underlying real
property securing repayment of a Mortgage Note, consisting of a fee
simple
estate.
"Mortgage File": With respect to a particular Mortgage Loan,
those
origination and servicing documents, escrow documents, and other
documents as
are specified on Schedule B-1 and B-3 to this
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Agreement and any additional documents required to be added to the
Mortgage File
pursuant to the related Purchase Price and Terms Letter.
"Mortgage Loan": Each individual mortgage loan (including all
documents
included in the Mortgage File evidencing the same, all Monthly
Payments,
Principal Prepayments, Insurance Proceeds, Condemnation Proceeds,
Liquidation
Proceeds, and other proceeds relating thereto, and any and all
rights, benefits,
proceeds and obligations arising therefrom or in connection
therewith) which is
the subject of this Agreement and the related Purchase Price and
Terms Letter.
The Mortgage Loans subject to this Agreement shall be identified on
Mortgage
Loan Schedules prepared in connection with each Funding Date.
"Mortgage Loan Schedule": The list of Mortgage Loans identified on
each
Funding Date that sets forth the information with respect to each
Mortgage Loan
that is specified on Schedule A hereto. A Mortgage Loan Schedule
will be
prepared for each Funding Date.
"Mortgage Note": The note or other evidence of the indebtedness of
a
Mortgagor secured by a Mortgage.
"Mortgagor": The obligor on a Mortgage Note.
"Negative Amortization": That portion of interest accrued at the
Note Rate
in any month which exceeds the Monthly Payment on the related
Mortgage Loan for
such month and which, pursuant to the terms of the Mortgage Note,
is added to
the principal balance of the Mortgage Loan.
"Note Rate": With respect to any Mortgage Loan at any time any
determination thereof is to be made, the annual rate at which
interest accrues
thereon.
"Offering Materials": All documents, tapes, or other materials
relating to
the Mortgage Loans provided by Seller to Purchaser prior to
Purchaser submitting
its bid to purchase the Mortgage loans.
"Officers' Certificate": A certificate signed by (i) the President
or a
Vice President and (ii) the Treasurer or the Secretary or one of
the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered
by the
Servicer to the Purchaser as required by this Agreement.
"Payment Adjustment Date": The date on which Monthly Payments shall
be
adjusted. Payment Adjustment Date shall occur on the date which is
eleven months
from the first payment date for the Mortgage Loan, unless otherwise
specified in
the Mortgage Note, and on each anniversary of such first Payment
Adjustment
Date.
"Payoff": With respect to any Mortgage Loan, any payment or
recovery
received in advance of the last scheduled Due Date of such Mortgage
Loan, which
payment or recovery consists of principal in an amount equal to the
outstanding
principal balance of such Mortgage Loan, all accrued and unpaid
prepayment
penalties, premiums, and/or interest with respect thereto, and all
other unpaid
sums due with respect to such Mortgage Loan.
"Permitted Investments": Investments that mature, unless payable on
demand,
not later than the Business Day preceding the related Remittance
Date; provided
that such investments shall only consist of the following:
(i) direct obligations of, or obligations fully guaranteed as
to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by
the full
faith and credit of the United States;
(ii) repurchase obligations (the collateral for which is held by
a
third party) with respect to any security described in clause (i)
above,
provided that the long-term unsecured obligations of the party
agreeing to
repurchase such obligations are at the time rated by each Rating
Agency in
one
of its two highest rating categories;
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(iii) certificates of deposit, time deposits and bankers'
acceptances
of
any bank or trust company incorporated under the laws of the
United
States or any state, provided that the long-term unsecured debt
obligations
of
such bank or trust company (or, in the case of the principal
depository
institution of a depository institution holding company, the
long-term
unsecured debt obligations of the depository institution holding
company)
at
the date of acquisition thereof have been rated by each Rating
Agency in
one
of its two highest rating categories;
(iv) commercial paper (having original maturities of not more than
365
days) of any corporation incorporated under the laws of the United
States
or
any state thereof which on the date of acquisition has been rated
by
each
Rating Agency in its highest rating category; and
(v) any other demand, money market or time deposit account or
obligation, or interest-bearing or other security or investment,
acceptable
to
the Purchaser (such acceptance evidenced in writing);
provided further that "Permitted Investments" shall not include any
instrument
described hereunder which evidences either the right to receive (a)
only
interest with respect to the obligations underlying such instrument
or (b) both
principal and interest payments derived from obligations underlying
such
instrument and the interest and principal payments with respect to
such
instrument provide a yield to maturity at par greater than 120% of
the yield to
maturity at par of the underlying obligations.
"Person": Any individual, corporation, limited liability
company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
"Prepaid Monthly Payment": Any Monthly Payment received prior to
its
scheduled Due Date and which is intended to be applied to a
Mortgage Loan on its
scheduled Due Date.
"Primary Insurance Policy": Each primary policy of mortgage
insurance in
effect with respect to a Mortgage Loan and as so indicated on the
Mortgage Loan
Schedule, or any replacement policy therefor obtained by the
Servicer pursuant
to Section 5.08.
"Principal Prepayment": Any payment or other recovery of principal
on a
Mortgage Loan (including a Payoff), other than a Monthly Payment or
a Prepaid
Monthly Payment 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 and
which is
intended to reduce the principal balance of the Mortgage Loan.
"Purchase Price and Terms Letter": With respect to any pool of
Mortgage
Loans purchased and sold on any Funding Date, the letter agreement
between the
Purchaser and Seller (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 Funding
Date. A Purchase Price and Terms Letter may relate to more than one
pool of
Mortgage Loan to be purchased on one or more Funding Dates
hereunder.
"Purchaser": Merrill Lynch Mortgage Capital Inc., or its successor
in
interest or any successor under this Agreement appointed as herein
provided.
"Purchaser's Account": The account of the Purchaser at a bank or
other
entity most recently designated in a written notice by the
Purchaser to the
Sellers as the "Purchaser's Account."
"Purchase Price": As to each Mortgage Loan to be sold hereunder,
the price
set forth in the Mortgage Loan Schedule and the related Purchase
Price and Terms
Letter.
"Qualified Mortgage Insurer": American Guaranty Corporation,
Commonwealth
Mortgage Assurance Company, General Electric Mortgage Insurance
Companies,
Mortgage Guaranty Insurance Corporation, PMI
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Mortgage Insurance Company, Republic Mortgage Insurance Company or
United
Guaranty Residential Insurance Corporation.
"Rate Adjustment Date": With respect to each ARM Loan, the date on
which
the Note Rate adjusts.
"Rating Agency": Standard & Poor's Ratings Services, a division
of The
McGraw-Hill Companies, Moody's Investors Service, Inc., and Fitch,
Inc.
"Record Date": The close of business of the last Business Day of
the month
immediately preceding the month of the related Remittance Date.
"Refinanced Mortgage Loan": A Mortgage Loan that was made to a
Mortgagor
who owned the Mortgaged Property prior to the origination of such
Mortgage Loan
and the proceeds of which were used in whole or part to satisfy an
existing
mortgage.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Internal Revenue Code or any similar tax
vehicle providing
for the pooling of assets (such as a Financial Asset Security
Investment Trust).
"Remittance Date": The 18th day of each calendar month, commencing
on the
18th day of the month following the Funding Date, or, if such 18th
day is not a
Business Day, then the next Business Day immediately preceding such
18th day.
"Remittance Rate": With respect to each Mortgage Loan, the related
Note
Rate minus the Servicing Fee Rate.
"REO
Disposition": The final sale by the Servicer of any REO
Property.
"REO
Property": A Mortgaged Property acquired by the Servicer on behalf
of
the Purchaser as described in Section 5.13.
"Repurchase Price": As to (a) any Defective Mortgage Loan required
to be
repurchased hereunder with respect to which a breach occurred or
(b) any
Mortgage Loan required to be repurchased pursuant to Section 3.04
and/or Section
7.02, an amount equal to the Unpaid Principal Balance of such
Mortgage Loan at
the time of repurchase; plus (2) interest on such Mortgage Loan at
the
applicable Note Rate from the last date through which interest has
been paid and
distributed to the Purchaser hereunder to the date of repurchase;
minus (3) any
amounts received in respect of such Defective Mortgage Loan which
are being held
in the Collection Account for future remittance.
"Scheduled Principal Balance": With respect to any Mortgage Loan,
(i) the
outstanding principal balance as of the Funding Date after
application of
principal payments due on or before such date whether or not
received, minus
(ii) all amounts previously remitted to the Purchaser with respect
to such
Mortgage Loan representing (a) payments or other recoveries of
principal, or (b)
advances of principal made pursuant to Section 6.03.
"Sellers": Cendant Mortgage Corporation, a New Jersey corporation
and
Bishop's Gate Residential Mortgage Trust (formerly known as Cendant
Residential
Mortgage Trust), a Delaware business trust, or their successors in
interest or
any successor under this Agreement appointed as herein
provided.
"Servicer": Cendant Mortgage Corporation, a New Jersey
corporation.
"Servicer's Mortgage File": The documents pertaining to a
particular
Mortgage Loan which are specified on Exhibit B-2 attached hereto
and any
additional documents required to be included or added to the
"Servicer's
Mortgage File" pursuant to this Agreement.
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"Servicing Advances": All "out of pocket" costs and expenses that
are
customary, reasonable and necessary which are incurred by the
Servicer in the
performance of its servicing obligations hereunder, including
(without
duplication) (i) reasonable attorneys' fees and (ii) the cost of
(a) the
preservation, restoration and protection of the Mortgaged Property,
(b) any
enforcement or judicial proceedings, including foreclosures, (c)
the servicing,
management and liquidation of any Specially Serviced Mortgaged
Loans and/or any
REO Property, and (d) compliance with the Servicer's obligations
under Section
5.08.
"Servicing Event": Any of the following events with respect to any
Mortgage
Loan: (i) any Monthly Payment being more than 60 days delinquent;
(ii) any
filing of an Insolvency Proceeding by or on behalf of the related
Mortgagor, any
consent by or on behalf of the related Mortgagor to the filing of
an Insolvency
Proceeding against such Mortgagor, or any admission by or on behalf
of such
Mortgagor of its inability to pay such Person's debts generally as
the same
become due; (iii) any filing of an Insolvency Proceeding against
the related
Mortgagor that remains undismissed or unstayed for a period of 60
days after the
filing thereof; (iv) any issuance of any attachment or execution
against, or any
appointment of a conservator, receiver or liquidator with respect
to, all or
substantially all of the assets of the related Mortgagor or with
respect to any
Mortgaged Property; (v) any receipt by the Servicer of notice of
the foreclosure
or proposed foreclosure of any other lien on the related Mortgaged
Property;
(vi) any proposal of a material modification (as reasonably
determined by the
Seller) to such Mortgage Loan due to a default or imminent default
under such
Mortgage Loan; or (vii) in the reasonable judgment of the Servicer,
the
occurrence, or likely occurrence within 60 days, of a payment
default with
respect to such Mortgage Loan that is likely to remain uncured by
the related
Mortgagor within 60 days thereafter.
"Servicing Fee": The annual fee, payable monthly to the Servicer
out of the
interest portion of the Monthly Payment actually received on each
Mortgage Loan.
The Servicing Fee with respect to each Mortgage Loan for any
calendar month (or
a portion thereof) shall be 1/12 of the product of (i) the
Scheduled Principal
Balance of the Mortgage Loan and (ii) the Servicing Fee Rate
applicable to such
Mortgage Loan.
"Servicing Fee Rate": (i)
with respect to any ARM Loan, 0.375% per annum;
provided that, prior to the first Rate Adjustment Date with respect
to any such
Mortgage Loan, such rate may be, at the Servicer's option, not less
than 0.25%
per annum; and (ii) with respect to any Mortgage Loan other than an
ARM Loan,
0.25% per annum.
"Servicing Officer": Any officer of the Servicer involved in,
or
responsible for, the administration and servicing of the Mortgage
Loans whose
name appears on a written list of servicing officers furnished by
the Servicer
to the Purchaser upon request therefor by the Purchaser, as such
list may from
time to time be amended.
"Specially Serviced Mortgage Loan": A Mortgage Loan as to which a
Servicing
Event has occurred and is continuing.
"Unpaid Principal Balance": With respect to any Mortgage Loan, at
any time,
the actual outstanding principal balance then payable by the
Mortgagor under the
terms of the related Mortgage Note including any cumulative
Negative
Amortization.
"Warranty Bill of Sale": A warranty bill of sale with respect to
the
Mortgage Loans purchased on a Funding Date in the form annexed
hereto as Exhibit
10.
ARTICLE II
SALE AND
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS
AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Sale and Conveyance of Mortgage Loans.
Seller agrees to sell and Purchaser agrees to purchase, from time
to time,
those certain Mortgage Loans identified in a Mortgage Loan
Schedule, at the
price and on the terms set forth herein and in the related Purchase
Price and
Terms Letter. Purchaser, on any Funding Date, shall be obligated to
purchase
only such Mortgage
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<PAGE>
Loans set forth in the applicable Mortgage Loan Schedule, subject
to the terms
and conditions of this Agreement and the related Purchase Price and
Terms
Letter.
Purchaser will purchase Mortgage Loan(s) from Seller, up to four
(4) times
per month on such Funding Dates as may be agreed upon by Purchaser
and Seller.
The closing shall, at Purchaser's option be either: by telephone,
confirmed by
letter or wire as the parties shall agree; or conducted in person
at such place,
as the parties shall agree. On the Funding Date and subject to the
terms and
conditions of this Agreement, each Seller will sell, transfer,
assign, set over
and convey to the Purchaser, without recourse except as set forth
in this
Agreement, and the Purchaser will purchase, all of the right, title
and interest
of the applicable Seller in and to the Mortgage Loans being
conveyed by it
hereunder, as identified on the Mortgage Loan Schedule.
Examination of the Mortgage Files may be made by Purchaser or its
designee
as follows. No later than 5 Business Days prior to the Funding
Date, Seller will
deliver to Purchaser or its custodian, Legal Documents required
pursuant to
Schedule B-1. Upon Purchaser's request, Seller shall make the
Credit Documents
available to Purchaser for review, at Seller's place of business
and during
reasonable business hours. If Purchaser makes such examination
prior to the
Funding Date and identifies any Mortgage Loans that do not conform
to the
Cendant Guide, such Mortgage Loans will be deleted from the
Mortgage Loan
Schedule at Purchaser's discretion. Purchaser may, at its option
and without
notice to Seller, purchase all or part of the Mortgage Loans
without conducting
any partial or complete examination. The fact that Purchaser has
conducted or
has failed to conduct any partial or complete examination of the
Mortgage Loan
files shall not affect Purchaser's rights to demand repurchase,
substitution or
other relief as provided herein.
On
the Funding Date and in accordance with the terms herein, Purchaser
will
pay to Seller, by wire transfer of immediately available funds, the
Purchase
Price, together with interest, if any accrued but unpaid by the
Borrower from
the Cut-off Date through the day immediately preceding the Funding
Date,
according to the instructions to be provided, respectively, by
Cendant Mortgage
and the Trust. Seller, simultaneously with the payment of the
Purchase Price,
shall execute and deliver to Purchaser a Warranty Bill of Sale with
respect to
the Mortgage Loans in the form annexed hereto as Exhibit 10.
Purchaser shall be entitled to all scheduled principal due after
the
Cut-off Date, all other recoveries of principal collected after the
Cut-off Date
and all payments of interest on the Mortgage Loans (minus that
portion of any
such payment which is allocable to the period prior to the Cut-off
Date). The
principal balance of each Mortgage Loan as of the Cut-off Date is
determined
after application of payments of principal due on or before the
Cut-off Date
whether or not collected. Therefore, payments of scheduled
principal and
interest prepaid for a due date beyond the Cut-off Date shall not
be applied to
the principal balance as of the Cut-off Date. Such prepaid amounts
shall be the
property of Purchaser. Seller shall hold any such prepaid amounts
for the
benefit of Purchaser for subsequent remittance by Seller to
Purchaser. All
scheduled payments of principal due on or before the Cut-off Date
and collected
by Seller after the Cut-off Date shall belong to Seller.
Section 2.02 Possession of Mortgage Files.
Upon
the sale of any Mortgage Loan, the ownership of such Mortgage
Loan,
including the Mortgage Note, the Mortgage, the contents of the
related Mortgage
File and all rights, benefits, payments, proceeds and obligations
arising
therefrom or in connection therewith, shall then be vested in the
Purchaser, and
the ownership of all records and documents with respect to such
Mortgage Loan
prepared by or which come into the possession of the Seller shall
immediately
vest in the Purchaser and, to the extent retained by the Seller,
shall be
retained and maintained, in trust, by the Seller at the will of the
Purchaser in
a custodial capacity only. The contents of such Mortgage File not
delivered to
the Purchaser are and shall be held in trust by the Seller for the
benefit of
the Purchaser as the owner thereof and the Sellers' possession of
the contents
of each Mortgage File so retained 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. Mortgage
Files shall
be maintained separately from the other books and records of the
Seller. Each
Seller shall release from its custody of the contents of any
Mortgage File only
in accordance with written instructions from the Purchaser, except
where such
release is required as incidental to the Servicer's servicing of
the Mortgage
Loans or is in connection with a repurchase of any such Mortgage
Loan pursuant
to Section 3.04.
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<PAGE>
Any
documents released to a Seller or the Servicer in connection with
the
foreclosure or servicing of any Mortgage Loan shall be held by such
Person in
trust for the benefit of the Purchaser in accordance with this
Section 2.02.
Such Person shall return to the Purchaser such documents when such
Person's need
therefor in connection with such foreclosure or servicing no longer
exists
(unless sooner requested by the Purchaser); provided that, if such
Mortgage Loan
is liquidated, then, upon the delivery by a Seller or the Servicer
to the
Purchaser of a request for the release of such documents and a
certificate
certifying as to such liquidation, the Purchaser shall promptly
release and, to
the extent necessary, deliver to such Person such documents.
Section 2.03 Books and Records.
The
sale of each of its Mortgage Loans shall be reflected on the
applicable
Seller's balance sheet and other financial statements as a sale of
assets by the
applicable Seller. Each Seller shall be responsible for
maintaining, and shall
maintain, a complete set of books and records for the Mortgage
Loans it conveyed
to the Purchaser which shall be clearly marked to reflect the sale
of each
Mortgage Loan to the Purchaser and the ownership of each Mortgage
Loan by the
Purchaser.
Section 2.04 Defective Documents; Delivery of Mortgage Loan
Documents.
If,
subsequent to the related Funding Date, the Purchaser or either
Seller
finds any document or documents constituting a part of a Mortgage
File to be
defective or missing in any material respect (in this Section 2.04,
a "Defect"),
the party discovering such Defect shall promptly so notify the
other parties. If
the Defect pertains to the Mortgage Note or the Mortgage, then the
applicable
Seller shall have a period of 45 days within which to correct or
cure any such
defect after the earlier of such Seller's discovery of same or such
Seller being
notified of same. If such Defect can ultimately be cured but is not
reasonably
expected to be cured within such 45 day period, such Seller shall
have such
additional time as is reasonably determined by the Purchaser to
cure or correct
such Defect provided that such Seller has commenced curing or
correcting such
Defect and is diligently pursuing same. If the Defect pertains to
any other
document constituting a part of a Mortgage File, then such Seller
shall have a
period of 90 days within which to correct or cure any such Defect
after the
earlier of such Seller's discovery of same or such Seller being
notified of
same. If such Defect can ultimately be cured but is not reasonably
expected to
be cured within the 90 day period, then such Seller shall have such
additional
time as is reasonably determined by the Purchaser to cure or
correct such Defect
provided such Seller has commenced curing or correcting such Defect
and is
diligently pursuing same. Cendant Mortgage hereby covenants and
agrees that, if
any material Defect cannot be corrected or cured, the related
Mortgage Loan
shall automatically constitute, upon the expiration of the
applicable cure
period described above and without any further action by any other
party, a
Defective Mortgage Loan, whereupon Cendant Mortgage shall
repurchase such
Mortgage Loan by paying to the Purchaser the Repurchase Price
therefor in
accordance with Section 3.04(3).
The
applicable Seller will, with respect to each Mortgage Loan to
be
purchased by the Purchaser, deliver and release to the Purchaser
the Legal
Documents as set forth in Section 2.01. If the applicable Seller
cannot deliver
an original Mortgage with evidence of recording thereon, original
assumption,
modification and substitution agreements with evidence of recording
thereon or
an original intervening assignment with evidence of recording
thereon within the
applicable time periods, then such Seller shall promptly deliver to
the
Purchaser such original Mortgages and original intervening
assignments with
evidence of recording indicated thereon upon receipt thereof from
the public
recording official, except in cases where the original Mortgage or
original
intervening assignments are retained permanently by the recording
office, in
which case, such Seller shall deliver a copy of such Mortgage or
intervening
assignment, as the case may be, certified to be a true and complete
copy of the
recorded original thereof.
If
the original Mortgage was not delivered pursuant to the
preceding
paragraph, then the applicable Seller shall use its best efforts to
promptly
secure the delivery of such originals and shall cause such
originals to be
delivered to the Purchaser promptly upon receipt thereof.
Notwithstanding the
foregoing, if the original Mortgage, original assumption,
modification, and
substitution agreements, the original of any intervening assignment
or the
original policy of title insurance is not so delivered to the
Purchaser within
180 days following the Funding Date, then, upon written notice by
the Purchaser
to Cendant Mortgage, the Purchaser may, in its sole discretion,
then elect (by
providing written notice to Cendant Mortgage) to treat such
Mortgage Loan as a
Defective Mortgage Loan, whereupon Cendant Mortgage shall
repurchase such
Mortgage Loan by paying to the Purchaser the Repurchase Price
therefor in
accordance with Section 3.04(3). It is understood that from time
to
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time certain local recorder offices become backlogged with document
volume. It
is agreed that the Seller will provide an Officer's Certificate to
document that
the Seller has performed all necessary tasks to insure delivery of
the required
documentation within 180 days and the delay beyond 180 is caused by
the backlog.
If the delay exceeds 360 days, regardless of the backlog the
Purchaser may elect
to collect the documents with its own resources with the reasonable
cost and
expense to be borne by the Seller. The fact that the Purchaser has
conducted or
failed to conduct any partial or complete examination of the
Mortgage Files
shall not affect its right to demand repurchase or any other
remedies provided
in this Agreement.
At
the Purchaser's request, the Assignments shall be promptly recorded
in
the name of the Purchaser or in the name of a Person designated by
the Purchaser
in all appropriate public offices for real property records. If any
such
Assignment is lost or returned unrecorded because of a defect
therein, then the
applicable Seller shall promptly prepare a substitute Assignment to
cure such
defect and thereafter cause each such Assignment to be duly
recorded. All
recording fees related to such a one-time recordation of the
Assignments to or
by a Seller shall be paid by the applicable Seller.
Section 2.05 Transfer of Mortgage Loans.
Subject to the provisions of this Section 2.05, the Purchaser shall
have
the right, without the consent of the Sellers, at any time and from
time to
time, to assign any of the Mortgage Loans and all or any part of
its interest
under this Agreement and designate any person to exercise any
rights of the
Purchaser hereunder, and the assignees or designees shall accede to
the rights
and obligations hereunder of the Purchaser with respect to such
Mortgage Loans.
The Sellers recognize that the Mortgage Loans may be divided into
"packages" for
resale ("Mortgage Loan Packages").
All
of the provisions of this Agreement shall inure to the benefit of
the
Purchaser and any such assignees or designees. All references to
the Purchaser
shall be deemed to include its assignees or designees. Utilizing
resources
reasonably available to the Seller without incurring any cost
except the
Seller's overhead and employees' salaries, the applicable Seller
shall cooperate
in any such assignment of the Mortgage Loans and this Agreement;
provided that
the Purchaser shall bear all costs associated with any such
assignment of the
Mortgage Loans and this Agreement other than such Seller's overhead
or
employees' salaries.
The
Servicer and the Purchaser acknowledge that the Servicer shall
continue
to remit payments to the Purchaser on the Remittance Date after the
transfer of
the Mortgage Loans, unless the Servicer was notified in writing of
the new
record owner of the Mortgage Loans prior to the immediately
preceding Record
Date, in which case, the Servicer shall remit to the new record
owner (or
trustee or master servicer, as the case may be) of the Mortgage
Loans.
Any
prospective assignees of the Purchaser who have entered into a
commitment to purchase any of the Mortgage Loans may review and
underwrite the
Servicer's servicing and origination operations, upon reasonable
prior notice to
the Servicer, and the Servicer shall cooperate with such review and
underwriting
to the extent such prospective assignees request information or
documents that
are reasonably available and can be produced without unreasonable
expense or
effort. The Servicer shall make the Mortgage Files related to the
Mortgage Loans
held by the Servicer available at the Servicer's principal
operations center for
review by any such prospective assignees during normal business
hours upon
reasonable prior notice to the Servicer (in no event less than 5
Business Days
prior notice). The Servicer may, in its sole discretion, require
that such
prospective assignees sign a confidentiality agreement with respect
to such
information disclosed to the prospective assignee which is not
available to the
public at large and a release agreement with respect to its
activities on the
Servicer's premises.
The
Servicer shall keep at its servicing office books and records in
which,
subject to such reasonable regulations as it may prescribe, the
Servicer shall
note transfers of Mortgage Loans. The Purchaser may, subject to the
terms of
this Agreement, sell and transfer, in whole or in part, any or all
of the
Mortgage Loans; provided that no such sale and transfer shall be
binding upon
the Servicer unless such transferee shall agree in writing to an
Assignment,
Assumption and Recognition Agreement, in substantially the form of
Exhibit 2.05
attached hereto, and an executed copy of such Assignment,
Assumption and
Recognition Agreement shall have been delivered to the Servicer.
The Servicer
shall evidence its acknowledgment of any transfers of the Mortgage
Loans to any
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<PAGE>
assignees of the Purchaser by executing such Assignment, Assumption
and
Recognition Agreement. The Servicer shall mark its books and
records to reflect
the ownership of the Mortgage Loans by any such assignees, and the
previous
Purchaser shall be released from its obligations hereunder accruing
after the
date of transfer to the extent such obligations relate to Mortgage
Loans sold by
the Purchaser. This Agreement shall be binding upon and inure to
the benefit of
the Purchaser and the Servicer and their permitted successors,
assignees and
designees.
ARTICLE III:
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER; REPURCHASE; REVIEW
OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of each Seller.
Each
Seller, as to itself, represents, warrants and covenants to the
Purchaser that as of each Funding Date or as of such date
specifically provided
herein:
(1) Due Organization.
The Seller is an entity duly organized, validly existing
and
in good standing under the laws of its jurisdiction of
organization,
and
has all licenses necessary to carry on its business now being
conducted
and
is licensed, qualified and in good standing under the laws of
each
state where a Mortgaged Property is located or is otherwise exempt
under
applicable law from such qualification or is otherwise not required
under
applicable law to effect such qualification; no demand for such
qualification has been made upon the Seller by any state having
jurisdiction and in any event the Seller is or will be in
compliance with
the
laws of any such state to the extent necessary to enforce each
Mortgage
Loan
and with respect to Cendant Mortgage, service each Mortgage Loan
in
accordance with the terms of this Agreement.
(2) Due Authority. The
Seller had the fill power and authority and legal right
to
originate the Mortgage Loans that it originated, if any, and to
acquire
the
Mortgage Loans that it acquired. 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, subject to applicable bankruptcy,
reorganization, receivership, conservatorship, insolvency,
moratorium and
other laws relating to or affecting creditors' rights generally or
the
rights of creditors of banks and to the general principles of
equity
(whether such enforceability is considered in a proceeding in
equity or at
law).
(3) No Conflict. The
execution and delivery of this Agreement, the acquisition
or
origination, as applicable, of the Mortgage Loans by the Seller,
the
sale
of the Mortgage Loans, the consummation of the transactions
contemplated hereby, or the fulfillment of or compliance with the
terms and
conditions of this Agreement, will not conflict with or result in a
breach
of
any of the terms, conditions or provisions of the Seller's
organizational documents and bylaws or any legal restriction or
any
agreement or instrument to which the Seller is now a party or by
which it
is
bound, or constitute a default or result in an acceleration under
any of
the
foregoing, or result in the violation of any law, rule,
regulation,
order, judgment or decree to which the Seller or its property is
subject,
or
impair the ability of the Purchaser to realize on the Mortgage
Loans;
(4) 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;
(5) No Material
Default. Neither the Seller nor any of its Affiliates is in
material default under any agreement, contract, instrument or
indenture of
any
nature whatsoever to which the Seller or any of its Affiliates is
a
party or by which it (or any of its assets) is bound, which default
would
have
a material adverse effect on the ability of the Seller to
perform
under this Agreement, nor, to the best of the Seller's knowledge,
has any
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<PAGE>
event occurred which, with notice, lapse of time or both, would
constitute
a
default under any such agreement, contract, instrument or indenture
and
have
a material adverse effect on the ability of the Seller to perform
its
obligations under this Agreement;
(6) Financial
Statements. Cendant Mortgage has delivered to the Purchaser
financial statements as to its fiscal year ended December 31, 1999.
Except
as
has previously been disclosed to the Purchaser in writing: (a)
such
financial statements fairly present the results of operations and
changes
in
financial position for such period and the financial position at
the end
of
such period of Cendant Mortgage and its subsidiaries; and (b)
such
financial statements are true, correct and complete as of their
respective
dates 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. The Trust has delivered
to the
Purchaser financial statements dated as of December 31, 1999 and a
copy of
its
Offering Circular dated May 21, 1998 (the "Trust Financials") and
such
Trust Financials fairly present the results of operations and
changes in
financial position for such period and the financial position at
the end of
such
period of the Trust. Except as has previously been disclosed to
the
Purchaser in writing, there has been no change in such Trust
Financials
since their date and the Trust is not aware of any errors or
omissions
therein;
(7) No Change in
Business. There has been no change in the business,
operations, financial condition, properties or assets of the
applicable
Seller since (i) in the case of Cendant Mortgage, the date of its
financial
statements and (ii) in the case of the Trust, the date of delivery
of the
Trust Financials, that would have a material adverse effect on the
ability
of
the applicable Seller to perform its obligations under this
Agreement;
(8) No Litigation
Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Seller's
knowledge,
threatened, against the Seller, which, either in any one instance
or in the
aggregate, if determined adversely to the Seller would adversely
affect the
sale
of the Mortgage Loans to the Purchaser or the execution, delivery
or
enforceability of this Agreement or result in any material
liability of the
Seller, or draw into question the validity of this Agreement, or
have a
material adverse effect on the financial condition of the
Seller;
(9) 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, the delivery of the Mortgage Files to the Purchaser,
the
sale
of the Mortgage Loans to the Purchaser or the consummation of
the
transactions contemplated by this Agreement or, if required, such
approval
has
been obtained prior to the Funding Date;
(10) Ordinary Course of Business. The consummation of the
transactions
contemplated by this Agreement is in the ordinary course of
business of the
Seller, and the transfer, assignment and conveyance of the Mortgage
Notes
and
the Mortgages by the Seller pursuant to this Agreement are not
subject
to
the bulk transfer or any similar statutory provisions in effect in
any
applicable jurisdiction;
(11) No Broker. The Seller has not dealt with any broker or agent
or anyone else
who
might be entitled to a fee or commission in connection with
this
transaction; and
(12) No Untrue Information. Neither this Agreement nor any
statement, report or
other agreement, document or instrument famished or to be famished
pursuant
to
this Agreement contains or will contain any materially untrue
statement
of
fact or omits or will omit to state a fact necessary to make
the
statements contained therein not misleading.
Section 3.02 Representations and Warranties of the Servicer.
The
Servicer represents, warrants and covenants to the Purchaser that
as of
the Funding Date or as of such date specifically provided
herein:
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(1) Ability to
Service. The Servicer is an approved seller/servicer for FNMA
and
FHLMC in good standing and is a mortgagee approved by the Secretary
of
Housing and Urban Development pursuant to Section 203 of the
National
Housing Act, with facilities, procedures and experienced
personnel
necessary for the servicing of mortgage loans of the same type as
the
Mortgage Loans. No event has occurred that would make the Servicer
unable
to
comply with FNMA or FHLMC eligibility requirements or that would
require
notification to either FNMA or FHLMC;
(2) No Litigation
Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Servicer's
knowledge,
threatened, against the Servicer which, either in any one instance
or in
the
aggregate, if determined adversely to the Servicer would
adversely
affect the ability of the Servicer to service the Mortgage Loans
hereunder
in
accordance with the terms hereof or have a material adverse effect
on
the
financial condition of the Servicer; and
(3) Collection
Practices. The collection practices used by the Servicer and
any
prior servicer with respect to each Mortgage Note and Mortgage have
been in
all
respects legal, proper and prudent in the mortgage servicing
business.
Section 3.03 Representations and Warranties as to Individual
Mortgage
Loans.
With
respect to each Mortgage Loan, the applicable Seller hereby makes
the
following representations and warranties to the Purchaser on which
the Purchaser
specifically relies in purchasing such Mortgage Loan. Such
representations and
warranties speak as of the Funding Date unless otherwise indicated,
but shall
survive any subsequent transfer, assignment or conveyance of such
Mortgage
Loans:
(1) Mortgage Loan as
Described. Such Mortgage Loan complies with the terms and
conditions set forth herein, and all of the information set forth
with
respect thereto on the Mortgage Loan Schedule is true and correct
in all
material respects;
(2) Complete Mortgage
Files. The instruments and documents specified in Section
2.02
with respect to such Mortgage Loan have been delivered to the
Purchaser in compliance with the requirements of Article II. The
Seller is
in
possession of a Mortgage File respecting such Mortgage Loan, except
for
such
documents as have been previously delivered to the Purchaser;
(3) Owner of Record.
The Mortgage relating to such Mortgage Loan has been duly
recorded in the appropriate recording office, and the applicable
Seller or
Servicer is the owner of record of such Mortgage Loan and the
indebtedness
evidenced by the related Mortgage Note;
(4) Payments Current.
All payments required to be made up to and including the
Funding Date for such Mortgage Loan under the terms of the Mortgage
Note
have
been made, such that such Mortgage Loan is not delinquent 30 days
or
more
on the Funding Date. Unless otherwise disclosed in the Offering
Materials or the Mortgage Loan Schedule, there has been no
delinquency,
exclusive of any period of grace, in any payment by the
Mortgagor
thereunder during the twelve months preceding the Funding Date;
(5) No Outstanding
Charges. There are no delinquent taxes, insurance premiums,
assessments, including assessments payable in future installments,
or other
outstanding charges affecting the Mortgaged Property related to
such
Mortgage Loan;
(6) Original Terms
Unmodified. The terms of the Mortgage Note and the Mortgage
related to such Mortgage Loan have not been impaired, waived,
altered or
modified in any material respect, except as specifically set forth
in the
related Mortgage Loan Schedule;
(7) No Defenses. The
Mortgage Note and the Mortgage related to such Mortgage
Loan
are not subject to any right of rescission, set-off or defense,
including the defense of usury, nor will the operation of any of
the terms
of
such Mortgage Note and such Mortgage, or the exercise of any
right
thereunder, render such Mortgage unenforceable, in whole or in
part, or
subject to any right of rescission, set-off or defense,
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<PAGE>
including the defense of usury and no such right of rescission,
set-off or
defense has been asserted with respect thereto;
(8) Hazard Insurance.
(a) All buildings upon the Mortgaged Property related to
such
Mortgage Loan are insured by an insurer acceptable to FNMA or
FHLMC
against loss by fire, hazards of extended coverage and such other
hazards
as
are customary in the area where such Mortgaged Property is
located,
pursuant to insurance policies conforming to the requirements of
either
Section 5.10 or Section 5.11. All such insurance policies
(collectively,
the
"hazard insurance policy") contain a standard mortgagee clause
naming
the
originator of such Mortgage Loan, its successors and assigns,
as
mortgagee. Such policies are the valid and binding obligations of
the
insurer, and all premiums thereon due to date have been paid. The
related
Mortgage obligates the Mortgagor thereunder to maintain all such
insurance
at
such Mortgagor's cost and expense, and on such Mortgagor's failure
to do
so,
authorizes the holder of such Mortgage to maintain such insurance
at
such
Mortgagor's cost and expense and to seek reimbursement therefor
from
such
Mortgagor; or (b) in the case of a condominium or unit in a
planned
unit
development ("PUD") project that is not covered by an
individual
policy, the condominium or PUD project is covered by a "master"
or
"blanket" policy and there exists and is in the Servicer's Mortgage
File a
certificate of insurance showing that the individual unit that
secures the
first mortgage is covered under such policy. The insurance policy
contains
a
standard mortgagee clause naming the originator of such Mortgage
Loan
(and
its successors and assigns), as insured mortgagee. Such policies
are
the
valid and binding obligations of the insurer, and all premiums
thereon
have
been paid. The insurance policy provides for advance notice to
the
Seller or Servicer if the policy is canceled or not renewed, or if
any
other change that adversely affects the Seller's interests is made;
the
certificate includes the types and amounts of coverage provided,
describes
any
endorsements that are part of the "master" policy and would be
acceptable pursuant to the FNMA Guide;
(9) Compliance With
Applicable Laws. All requirements of any federal, state or
local law (including usury, truth in lending, real estate
settlement
procedures, consumer credit protection, equal credit opportunity
or
disclosure laws) applicable to the origination and servicing of
such
Mortgage Loan have been complied with in all material respects;
(10) No Satisfaction of Mortgage. The Mortgage related to such
Mortgage Loan has
not
been satisfied, canceled or subordinated, in whole or in part,
or
rescinded, and the related Mortgaged Property has not been released
from
the
lien of such Mortgage, in whole or in part, nor has any instrument
been
executed that would effect any such release, cancellation,
subordination or
rescission;
(11) Valid First Lien. The Mortgage including any Negative
Amortization, related
to
such Mortgage Loan is a valid, subsisting and enforceable
perfected
first lien on the related Mortgaged Property, including all
improvements on
the
related Mortgaged Property, which Mortgaged Property is free and
clear
of
any encumbrances and liens having priority over the first lien of
the
Mortgage subject only to (a) the lien of current real estate taxes
and
special 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 of such Mortgage which are
acceptable to
mortgage lending institutions generally, are referred to in the
lender's
title insurance policy and do not adversely affect the market value
or
intended use of the
related Mortgaged Property, and (c) other matters to
which like properties are commonly subject which do not
individually or in
the
aggregate materially interfere with the benefits of the
security
intended to be provided by such Mortgage or the use, enjoyment, or
market
value of the related Mortgaged Property;
(12) Validity of Documents. The Mortgage Note and the Mortgage
related to such
Mortgage Loan are genuine and each is the legal, valid and
binding
obligation of the
maker thereof, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy,
insolvency,
reorganization or other similar laws affecting the enforcement
of
creditors' rights generally and general equitable principles
(regardless
whether such enforcement is considered in a proceeding in equity or
at
law);
(13) Valid Execution of Documents. All parties to the Mortgage Note
and the
Mortgage related to such Mortgage Loan had legal capacity to enter
into
such
Mortgage Loan and to execute and deliver the
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<PAGE>
related Mortgage Note and the related Mortgage and the related
Mortgage
Note
and the related Mortgage have been duly and properly executed by
such
parties;
(14) Full Disbursement of Proceeds. Such Mortgage Loan has closed
and the
proceeds of such Mortgage Loan have been fully disbursed prior to
the
Funding Date; provided that, with respect to any Mortgage Loan
originated
within the previous 120 days, alterations and repairs with respect
to the
related Mortgaged Property or any part thereof may have required an
escrow
of
funds in an amount sufficient to pay for all outstanding work
within 120
days
of the origination of such Mortgage Loan, and, if so, such funds
are
held
in escrow by the Seller, a title company or other escrow agent;
(15) Ownership. The Mortgage Note and the Mortgage related to such
Mortgage Loan
have
not been assigned, pledged or otherwise transferred by the
applicable
Seller, in whole or in part, and the Seller has good and marketable
title
thereto, and the Seller is the sole owner thereof and has full
right and
authority to transfer and sell such Mortgage Loan, and is
transferring such
Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity,
lien, pledge, charge, claim or security interest;
(16) Doing Business. All parties that have had any interest in such
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 licensing requirements of
the laws
of
the state wherein the related Mortgaged Property is located;
(17) Title Insurance. (a) Such Mortgage Loan is covered by an ALTA
lender's
title insurance policy or short form title policy acceptable to
FNMA and
FHLMC (or, in jurisdictions where ALTA policies are not generally
approved
for
use, a lender's title insurance policy acceptable to FNMA and
FHLMC),
issued by a title insurer acceptable to FNMA and FHLMC and
qualified to do
business in the jurisdiction where the related Mortgaged Property
is
located, insuring (subject to the exceptions contained in clauses
(11)(a)
and
(b) above) the Seller or Servicer, its successors and assigns as to
the
first priority lien of the related Mortgage in the original
principal
amount of such Mortgage Loan including any Negative Amortization
and in the
case
of ARM Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of such
Mortgage
providing for adjustment to the applicable Note Rate and Monthly
Payment.
Additionally, either such lender's title insurance policy
affirmatively
insures that there is ingress and egress to and from the Mortgaged
Property
or
the Seller warrants that there is ingress and egress to and from
the
Mortgaged Property and the lender's title insurance policy
affirmatively
insures against encroachments by or upon the related Mortgaged
Property or
any
interest therein or any other adverse circumstance that either
is
disclosed or would have been disclosed by an accurate survey. The
Seller or
Servicer 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 and will inure to the benefit of
the
Purchaser without any further act. No claims have been made under
such
lender's title insurance policy, no prior holder of the related
Mortgage
(including the Seller) has done, by act or omission, anything that
would
impair the coverage of such lender's insurance policy, and there is
no act,
omission, condition, or information that would impair the coverage
of such
lender's insurance policy; (b) The mortgage title insurance policy
covering
each
unit mortgage in a condominium or PUD project related to such
Mortgage
Loan
meets all requirements of FNMA and FHLMC;
(18) No Defaults. (a) There is no default, breach, violation or
event of
acceleration existing under the Mortgage, the Mortgage Note, or any
other
agreements, documents, or instruments related to such Mortgage
Loan; (b) to
the
best of the Seller's knowledge, there is no event that, with the
lapse
of
time, the giving of notice, or both, would constitute such a
default,
breach, violation or event of acceleration; (c) the Mortgagor(s)
with
respect to such Mortgage Loan is (1) not in default under any
other
Mortgage Loan or (2) the subject of an Insolvency Proceeding; (d)
no event
of
acceleration has previously occurred, and no notice of default has
been
sent, with respect to such Mortgage Loan; and (e) in no event has
the
Seller waived any of its rights or remedies in respect of any
default,
breach, violation or event of acceleration under the Mortgage, the
Mortgage
Note, or any other agreements, documents, or instruments related to
such
Mortgage Loan;
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<PAGE>
(19) No Mechanics' Liens. As of the date of origination of such
Mortgage Loan,
there were no mechanics' or similar liens, except such liens as
are
expressly insured against by a title insurance policy, or claims
that have
been
filed for work, labor or material (and no rights are outstanding
that
under law could give rise to such lien) affecting the related
Mortgaged
Property that are or may be liens prior to, or equal or coordinate
with,
the
lien of the related Mortgage;
(20) Location of Improvements: No Encroachments. As of the date of
origination
of
such Mortgage Loan, all improvements that were considered in
determining
the
Appraised Value of the related Mortgaged Property lay wholly within
the
boundaries and building restriction lines of such Mortgaged
Property, and
no
improvements on adjoining properties encroach upon such
Mortgaged
Property except as permitted under the terms of the FNMA Guide and
the
FHLMC Selling Guide; no improvement located on or part of any
Mortgaged
Property is in violation of any applicable zoning law or
regulation, and
all
inspections, licenses and certificates required to be made or
issued
with
respect to all occupied portions of such Mortgaged Property, and
with
respect to the use and occupancy of the same, including
certificates of
occupancy, have been made or obtained from the appropriate
authorities;
(21) Origination; Payment Terms. Principal payments on such
Mortgage Loan
commenced or will commence no more than 60 days after funds were
disbursed
in
connection with such Mortgage Loan. If the interest rate on the
related
Mortgage Note is adjustable, the adjustment is based on the Index
set forth
on
the related Mortgage Loan Schedule. The related Mortgage Note is
payable
on
the first day of each month in arrears, in accordance with the
payment
terms described on the related Mortgage Loan Schedule. With respect
to any
Mortgage Loan subject to Negative Amortization the Monthly Payments
are
sufficient during the period following each Payment Adjustment Date
to
fully amortize the outstanding principal balance as of the last day
of such
period (including any Negative Amortization) over the original term
thereof
in
accordance with the terms and conditions set forth in the Mortgage
Note;
(22) Due On Sale. Except as noted otherwise on the Mortgage Loan
Schedule, the
related Mortgage contains the usual and customary "due-on-sale"
clause or
other similar provision for the acceleration of the payment of the
Unpaid
Principal Balance of such Mortgage Loan if the related Mortgaged
Property
or
any interest therein is sold or transferred without the prior
consent of
the
mortgagee thereunder;
(23) Prepayment Penalty. Except as noted otherwise on the Mortgage
Loan
Schedule, such Mortgage Loan is not subject to any Prepayment
Penalty;
(24) Mortgaged Property Undamaged No Condemnation. As of the
Funding Date, the
related Mortgaged Property is free of material damage and waste and
there
is
no proceeding pending for the total or partial condemnation
thereof;
(25) Customary Provisions. The related Mortgage contains customary
and
enforceable provisions that render the rights and remedies of the
holder
thereof adequate for the realization against the related 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)
in the case of a Mortgage, otherwise by judicial foreclosure;
(26) Conformance With Underwriting Standards. Such Mortgage Loan
was
underwritten in accordance with the Cendant Guide;
(27) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged
Property on forms and with riders approved by FNMA and FHLMC,
signed prior
to
the approval of such Mortgage Loan application by an appraiser,
duly
appointed by the originator of such Mortgage Loan, whose
compensation is
not
affected by the approval or disapproval of such Mortgage Loan and
who
met
the minimum qualifications of FNMA and FHLMC for appraisers.
Each
appraisal of the Mortgage Loan was made in accordance with the
relevant
provisions of the Financial Institutions Reform, Recovery, and
Enforcement
Act
of 1989;
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<PAGE>
(28) Deeds of Trust. If the related Mortgage constitutes a deed of
trust, then a
trustee, duly
qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage,
and
no fees or expenses are or will become payable by the Purchaser to
the
trustee under such deed of trust, except in connection with a
trustee's
sale
after default by the related Mortgagor;
(29) LTV; Primary Mortgage Insurance Policy. If such Mortgage Loan
had a
Loan-to-Value Ratio of more than 80% at origination, such Mortgage
Loan is
and
will be subject to a Primary Insurance Policy issued by a
Qualified
Mortgage Insurer, which insures the Seller or Servicer, its
successors and
assigns and insureds in the amount set forth on the Mortgage Loan
Schedule.
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 related Mortgage
