<PAGE>
Exhibit 10.2(G)
MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
dated as of April 30, 2003
between
PNC BANK, NATIONAL ASSOCIATION, Purchaser
and
CENDANT MORTGAGE CORPORATION and
BISHOP'S GATE RESIDENTIAL MORTGAGE TRUST
(formerly known as CENDANT RESIDENTIAL MORTGAGE TRUST)
Sellers
<PAGE>
TABLE OF CONTENTS
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ARTICLE I:
DEFINITIONS................................................................2
Section 1.01 Defined
Terms.....................................................2
ARTICLE II: SALE AND
CONVEYANCE OF MORTGAGE LOANS;
POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN
DOCUMENTS.......................................14
Section 2.01 Sale and Conveyance of
Mortgage Loans............................14
Section 2.02 Possession of Mortgage
Files.....................................16
Section 2.03 Books and
Records................................................16
Section 2.04 Defective Documents;
Delivery of Mortgage Loan Documents.........16
Section 2.05 Transfer of Mortgage
Loans.......................................18
ARTICLE III: REPRESENTATIONS,
WARRANTIES AND COVENANTS OF
THE SELLER; REPURCHASE AND SUBSTITUTION; REVIEW
OF MORTGAGE
LOANS.........................................................19
Section 3.01 Representations,
Warranties and Covenants of each Seller.........19
Section 3.02 Representations,
Warranties and Covenants of the Servicer........22
Section 3.03 Representations and
Warranties as to Individual Mortgage Loans...23
Section 3.04 Repurchase and
Substitution......................................34
Section 3.05 Certain Covenants of
each Seller and the Servicer................36
ARTICLE IV: REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
AND CONDITIONS PRECEDENT TO
FUNDING.......................................37
Section 4.01 Representations and
Warranties...................................37
Section 4.02 Conditions Precedent
to Closing..................................39
ARTICLE V:
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS............................39
Section 5.01 Cendant Mortgage to
Act as Servicer; Servicing Standards;
Additional Documents; Consent of the
Purchaser...................39
Section 5.02 Collection of Mortgage
Loan Payments.............................41
Section 5.03 Reports for Specially
Serviced Mortgage Loans and
Foreclosure
Sales................................................42
Section 5.04 Establishment of
Collection Account; Deposits in Collection
Account..........................................................42
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Section 5.05 Permitted Withdrawals
from the Collection Account................43
Section 5.06 Establishment of
Escrow Accounts; Deposits in Escrow.............44
Section 5.07 Permitted Withdrawals
From Escrow Accounts.......................45
Section 5.08 Payment of Taxes,
Insurance and Other Charges; Maintenance
of Primary Insurance Policies; Collections
Thereunder............45
Section 5.09 Transfer of
Accounts.............................................46
Section 5.10 Maintenance of Hazard
Insurance..................................46
Section 5.11 Maintenance of
Mortgage Impairment Insurance Policy..............48
Section 5.12 Fidelity Bond; Errors
and Omissions Insurance....................48
Section 5.13 Management of REO
Properties.....................................49
Section 5.14 Sale of Specially
Serviced Mortgage Loans and REO Properties
.................................................................51
Section 5.15 Realization Upon
Specially Serviced Mortgage Loans and REO
Properties.......................................................51
Section 5.16 Investment of Funds in
the Collection Account....................54
Section 5.17
MERS.............................................................54
ARTICLE VI: REPORTS;
REMITTANCES;
ADVANCES............................................55
Section 6.01
Remittances......................................................55
Section 6.02
Reporting........................................................56
Section 6.03 Monthly Advances by
the Servicer.................................56
Section 6.04 Non-recoverable
Advances.........................................56
Section 6.05 Itemization of
Servicing Advances................................56
Section 6.06 Officer's
Certificate............................................57
ARTICLE VII: GENERAL SERVICING
PROCEDURE...............................................57
Section 7.01 Enforcement of
Due-on-Sale Clauses, Assumption Agreements........57
Section 7.02 Satisfaction of
Mortgages and Release of Mortgage Files..........58
Section 7.03 Servicing
Compensation...........................................59
Section 7.04 Annual Statement as to
Compliance................................59
Section 7.05 Annual Independent
Certified Public Accountants' Servicing
Report...........................................................59
Section 7.06 Purchaser's Right to
Examine Servicer Records....................59
ARTICLE VIII:
REPORTS TO BE PREPARED BY THE
SERVICER....................................60
Section 8.01 The Servicer's
Reporting Requirements............................60
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Section 8.02 Financial
Statements.............................................60
ARTICLE IX: THE
SELLERS...............................................................61
Section 9.01 Indemnification; Third
Party Claims..............................61
Section 9.02 Merger or
Consolidation of the Seller............................62
Section 9.03 Limitation on
Liability of the Sellers and Others................62
Section 9.04 Servicer Not to
Resign...........................................63
ARTICLE X:
DEFAULT...................................................................63
Section 10.01
Events of
Default................................................63
ARTICLE XI:
TERMINATION...............................................................64
Section 11.01
Term and
Termination.............................................64
Section 11.02
Survival.........................................................65
ARTICLE XII: ARTICLE XII:
GENERAL
PROVISIONS..........................................65
Section 12.01
Successor to the
Servicer........................................65
Section 12.02
Governing
Law....................................................66
Section 12.03
Notices..........................................................66
Section 12.04
Severability of
Provisions.......................................66
Section 12.05
Schedules and
Exhibits...........................................66
Section 12.06
General Interpretive
Principles..................................66
Section 12.07
Waivers and Amendments, Noncontractual Remedies
Preservation of
Remedies.........................................67
Section 12.08
Captions.........................................................67
Section 12.09
Counterparts;
Effectiveness......................................68
Section 12.10
Entire Agreement;
Amendment......................................68
Section 12.11
Further
Assurances...............................................68
Section 12.12
Intention of the
Seller..........................................68
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<PAGE>
Schedules
A.
Mortgage Loan Schedule
B.
Content of Mortgage File
B-1 Legal Documents
B-2 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 5.04-1 Form of Collection
Account Certification
Exhibit 5.04-2 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
Exhibit 11
Form of Additional Collateral Servicing Agreement
<PAGE>
MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
This
Mortgage Loan Flow Purchase, Sale & Servicing Agreement,
dated as of
April 30, 2003, is entered into between PNC Bank, National
Association,
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
and Cendant Mortgage as the
Servicer ("Servicer").
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
Cendant Guide is
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 , in
this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth,
the Purchaser and the Sellers agree as follows:
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<PAGE>
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:
"Acceptance of Assignment and Assumption of Lease Agreement":
The specific
agreement creating a
first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease securing a Cooperative Loan.
"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.
"Appraised Value": With respect to any Mortgaged Property, the lesser of:
(i) the value thereof as determined by an appraisal or a Cendant
approved AVM
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 to the Purchaser or, in the
case of a MERS Mortgage Loan, an electronic transmission to MERS, identifying
a
transfer of ownership of the related Mortgage to the Purchaser or
its designee.
"Assignment of Proprietary Lease": With respect to a Cooperative
Loan, an
assignment of
the Proprietary Lease sufficient under the laws of the
jurisdiction wherein
the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease.
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"Assignment of Recognition Agreement": With respect to a Cooperative
Loan,
an assignment of the
Recognition
Agreement sufficient under the laws of the
jurisdiction wherein
the related Cooperative Unit is located to reflect the
assignment of such Recognition Agreement.
"Bankruptcy Code":
The Bankruptcy Reform Act of 1978 (11 U.S.C.
ss.ss.
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 April
30, 2003 ."
"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.
"Consent": A
document executed by the Cooperative Corporation (i)
consenting to the
sale of the
Cooperative
Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative
Unit have
been paid.
"Cooperative
Corporation": With
respect to any Cooperative Loan, the
cooperative apartment
corporation
that holds legal title to the related
Cooperative Project and grants occupancy rights to units therein to
stockholders
through Proprietary Leases or similar arrangements.
"Cooperative Lien Search": A search for (a) federal tax
liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i)
the Cooperative
Corporation and (ii)
the seller of the Cooperative Unit, (b) filings of
Financing Statements
and (c) the
deed of the
Cooperative
Project into the
Cooperative Corporation.
"Cooperative Loan": A
Mortgage Loan that is secured by a first lien on and
a perfected security interest in Cooperative Shares and the related
Proprietary
Lease granting
exclusive rights to
occupy the related
Cooperative Unit in the
building owned by the related Cooperative Corporation.
"Cooperative Project":
With respect to any Cooperative Loan, all real
property and
improvements
thereto and rights
therein and thereto
owned by a
Cooperative Corporation including without limitation the land,
separate dwelling
units and all common elements.
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"Cooperative Shares":
With respect to any
Cooperative Loan, the shares of
stock issued by a Cooperative Corporation and allocated to a Cooperative
Unit
and represented by a stock certificates.
"Cooperative Unit":
With respect to any
Cooperative Loan, a specific unit
in a Cooperative Project.
"Credit Documents": Those documents, comprising part of the Mortgage
File,
required of the Mortgagor, as described on Schedule B-2.
"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).
-------
"Deleted Mortgage
Loan": A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
"Determination Date":
The 16th day of each
calendar month,
commencing on
the 16th day of the month following the Funding Date, or, if such 16th day is
not a Business Day, the Business Day immediately preceding such
16th 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.
"Due
Period": With respect
to each Remittance Date, the period commencing
on the second
day of the month immediately preceding the month of such
Remittance Date and
ending on the first day of the month of in which such
Remittance Date falls.
"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
assigned a long-term
debt rating of not less than Baa3,
and a short term debt rating of P3, from Moody's Investors
Services, Inc.,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
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.
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<PAGE>
"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 &
Servicing Agreement, dated as of April 30, 2003 (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.
"Estoppel Letter":
A document
executed by the Cooperative Corporation
certifying, with
respect to a Cooperative Unit, (i) the appurtenant Proprietary
Lease will be in full force and effect as of the date of issuance
thereof, (ii)
the related Stock
Certificate was
registered in the
Mortgagor's name and
the
Cooperative
Corporation has not been notified of any lien upon, pledge of,
levy
of execution
on or disposition of such Stock Certificate, and (iii) the
Mortgagor is not in
default under the
appurtenant
Proprietary
Lease and all
charges due the Cooperative Corporation have been paid.
"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.
"Financing Statement":
A financing statement
in the form of a UCC-1 filed
pursuant to the Uniform Commercial Code to perfect a security
interest in the
Cooperative Shares and Pledge Instruments.
"Financing Statement
Change": A financing statement in the form of a UCC-3
filed to continue,
terminate, release,
assign or amend an
existing Financing
Statement.
"FNMA": The Federal
National Mortgage
Association
(also known as
Fannie
Mae) or any successor organization.
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<PAGE>
"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 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.
"Lender-Paid Mortgage
Insurance Rate": With
respect to any Mortgage Loan,
the Lender-Paid Mortgage Insurance Rate for any "lender-paid"
Primary Insurance
Policy shall be a per
annum rate equal to the percentage indicated on the
Mortgage Loan Schedule.
"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.
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"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. The
Loan-to-Value Ratio of
any Additional
Collateral Mortgage
Loan (as defined in
Exhibit 11 hereto) shall be calculated by reducing the principal
balance of such
Additional Collateral
Mortgage Loan by the amount of Original Additional
Collateral Requirement
(as defined in Exhibit
11 hereto) with
respect to such
Mortgage Loan.
"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.
"MERS": Mortgage
Electronic
Registration
Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
"MERS Eligible
Mortgage Loan": Any Mortgage Loan that under applicable law
and investor
requirements is recordable in the name of MERS in the
jurisdiction
in which the related Mortgaged Property is located.
"MERS Mortgage Loan":
Any Mortgage Loan as to which the related Mortgage,
or an Assignment, has been recorded in the name of MERS, as agent
for the holder
from time to time of the Mortgage Note.
"Maximum Rate": With respect to each ARM Loan, the rate per annum
set forth
in the related
Mortgage Note as the maximum Note Rate thereunder. The Maximum
Rate as to each ARM Loan is set forth on the related Mortgage Loan
Schedule.
"Minimum Rate": With respect to each ARM Loan, the rate per annum
set forth
in the related
Mortgage Note as the minimum Note Rate thereunder. The Minimum
Rate as to each ARM Loan is set forth on the related Mortgage Loan
Schedule.
"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 either (i) with respect to a
Mortgage Loan other than a Cooperative Loan, an unsubordinated estate in fee
simple in real
property or (ii) with respect to a Cooperative Loan, the
Proprietary Lease and related Cooperative Shares, which in either case secures
the Mortgage Note.
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<PAGE>
"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-2 to this
Agreement and any additional
documents required
to be added to the
Mortgage File pursuant to the related
Purchase Price and Terms Letter or this Agreement.
"Mortgage Loan":
Each individual mortgage loan or Cooperative 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 (as amended from time to time to reflect
the addition of any
Qualified Substitute Mortgage Loans). 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.
"Non-recoverable
Advance": As of any
date of determination,
any Monthly
Advance or Servicing Advance previously made or any Monthly Advance
or Servicing
Advance proposed to be
made in respect of a Mortgage Loan which, in the good
faith judgment of the Servicer and in accordance with the servicing
standard set
forth in Section 5.01, will not or, in the case of a proposed
advance, would not
be ultimately
recoverable
pursuant to Section 5.05 (3) or (4) hereof. The
determination by the Servicer that it has made a Non-recoverable
Advance or that
any proposed
advance would constitute a Non-recoverable Advance shall be
evidenced by an Officer's Certificate satisfying the requirements of Section
6.04 hereof and delivered to the Purchaser on or before the
Determination
Date
in any month.
"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.
-8-
<PAGE>
"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.
"Periodic Rate Cap":
With respect to each
ARM Loan, the provision in each
Mortgage Note that limits permissible increases and decreases in the
Note Rate
on any Rate Adjustment Date to not more than [one] percentage
point.
"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;
(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;
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<PAGE>
(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.
"Pledge Instruments":
With respect to each
Cooperative
Loan, the Stock
Power, the Assignment
of the Proprietary
Lease, the Assignment of the Mortgage
Note and the Acceptance of Assignment and Assumption of Lease
Agreement.
"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.
"Proprietary Lease":
The lease on a Cooperative Unit evidencing the
possessory interest of
the owner of the Cooperative Shares in such Cooperative
Unit.
"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 Loans to be purchased on one or more Funding Dates
hereunder.
"Purchaser": PNC Bank,
National Association,
or its successor in interest
or any successor under this Agreement appointed as herein
provided.
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<PAGE>
"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 Mortgage Insurance Company,
Republic Mortgage
Insurance Company or
United Guaranty
Residential
Insurance
Corporation.
"Qualified Substitute
Mortgage Loan": A Mortgage Loan substituted by a
Seller for a Deleted Mortgage Loan which must, on the date of such
substitution,
(i) have an
outstanding principal
balance, after deduction of all scheduled
payments due and
received in the month of substitution (or in the case of a
substitution of more
than one mortgage loan
for a Deleted Mortgage
Loan, an
aggregate principal
balance), not in
excess of the Unpaid Principal Balance of
the Deleted Mortgage
Loan and not less than ninety percent (90%) of the Unpaid
Principal Balance of
the Deleted Mortgage
Loan (the amount of any shortfall to
be distributed
by the applicable Seller to the Purchaser in the month of
substitution), (ii)
have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan, (iii) have a
Note Rate not less than (and not more than one percentage point greater than)
the Note Rate of the Deleted Mortgage Loan, (iv) with respect
to each ARM Loan,
have a Minimum Rate not less than that of the Deleted Mortgage Loan, (v) with
respect to each ARM Loan, have a Maximum Rate not less than
that of the Deleted
Mortgage Loan and not
more than two (2)
percentage points
above that of the
Deleted Mortgage Loan,
(vi) with respect to each Adjustable Rate Mortgage Loan,
have a Gross Margin not less than that of the Deleted Mortgage Loan, (vii) with
respect to each ARM Loan, have a Periodic Rate Cap equal to
that of the Deleted
Mortgage Loan, (viii)
have a Loan-to-Value
Ratio at the time of
substitution
equal to or less than the Loan-to-Value Ratio of the Deleted Mortgage Loan at
the time of substitution, (ix) with respect to each ARM Loan, have
the same Rate
Adjustment Date as
that of the Deleted
Mortgage Loan, (x) with respect to each
ARM Loan, have an
Index as provided
herein for all ARM
Loans subject to
this
Agreement, (xi) comply
as of the date of substitution with each representation
and warranty set forth
in Sections 3.01,
3.02 and 3.03,
(xii) be in the
same
credit grade
category as the Deleted Mortgage Loan and (xiii) have the same
prepayment penalty term.
"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.
"Recognition Agreement": An agreement among a Cooperative
Corporation,
a
lender and a Mortgagor
with respect to a Cooperative Loan whereby such parties
(i) acknowledge that
such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such
Cooperative Loan.
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<PAGE>
"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
Disposition
Proceeds":
All amounts received
with respect to any REO
Disposition.
"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 sum of:
(1) the product of the
Unpaid Principal
Balance of
such Mortgage Loan at the time of repurchase multiplied by a
fraction, the
numerator of which is
the Purchase Price
paid for such Mortgage
Loan by the Purchaser on the Funding Date, and the denominator of which is the
Unpaid Principal
Balance of such
Mortgage Loan on the
Funding Date ; 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.
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<PAGE>
"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
Schedule B-1 and B-2 attached hereto and
any additional documents required to be included or added to the
"Mortgage File"
pursuant to the related Purchase Price and Terms Letter or this
Agreement.
"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 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 t
he 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":
Unless otherwise specified on the Mortgage Loan
Schedule, (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.
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<PAGE>
"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.
"Stock Certificate":
With respect to a
Cooperative Loan, the certificates
evidencing ownership
of the Cooperative Shares issued by the Cooperative
Corporation.
"Stock Power":
With respect to a
Cooperative
Loan, an assignment of
the
Stock Certificate
or an assignment of the Cooperative Shares issued by the
Cooperative Corporation.
"Uniform Commercial
Code": The Uniform Commercial Code as in effect on the
date hereof in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or
non-perfection
of the security interest in any collateral is governed by the
Uniform Commercial
Code as in effect in a
jurisdiction other
than New York,
"Uniform
Commercial
Code" shall
mean the Uniform Commercial Code as in effect in such other
jurisdiction for
purposes of the provisions hereof relating to such
perfection
or effect of perfection or non-perfection.
"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
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.
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<PAGE>
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 in either original paper form or electronic imaged format
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, or the
representations
and warranties in
Section 3.03 of this
Agreement, 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 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).
Notwithstanding the
foregoing, on the
first Remittance Date
after the Funding
Date the Purchaser
shall be entitled to
receive the interest
accrued from the
Cut-off Date
through the day immediately preceding the Funding 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
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<PAGE>
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 or substitution of any
such Mortgage
Loan pursuant to Section 3.04.
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 60 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 60 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 60 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 60 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
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<PAGE>
diligently pursuing
same. Cendant Mortgage hereby covenants and agrees that, if
any Defect
cannot be corrected or cured, the related Mortgage Loan shall
automatically
constitute, upon the
expiration of the
applicable
cure period
described above,
without counting the
cure periods provided in Section 3.04 of
this Agreement
as an addition to such cure period, 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.
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 applicable Seller cannot
deliver the original
security instrument or if an original intervening assignment has
been lost, then
the applicable
Seller will deliver a copy of such security instrument or
intervening assignment, certified by the local public recording
official. If the
original title
policy has been lost,
the applicable Seller will deliver a
duplicate original title policy.
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. It is
understood that from
time to 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 or the Purchaser may require the Seller to
repurchase such
loan in accordance with Section 3.04 of this Agreement, without
consideration of
the cure period
provided in such Section. 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.
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<PAGE>
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.
The
Servicer and Purchaser agree that in no event will the
Servicer be
required to remit funds or send remittance reports to more than
four (4) Persons
(not including the Servicer or any Affiliate or transferee thereof)
at any given
time with respect to any Mortgage Loans sold on a particular
Funding Date.
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.
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<PAGE>
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
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 AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS
Section 3.01
Representations, Warranties and Covenants 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, or in the case of each applicable covenant, during and
after the term of
this Agreement:
(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
full 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,
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<PAGE>
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 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, 2002. 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, 2002 (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;
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<PAGE>
(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) Broker. The
Seller has dealt with Jaymes Financial, Inc., a broker, who
might be entitled to a fee or commission in connection with this transaction.
All fees due to the broker are the responsibility of the Seller;
and
(12) No Untrue Information. Neither this Agreement nor any
statement, report or
other agreement,
document or instrument, diskette, data tape, or similar
materials furnished or
to be furnished
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.
(13) No Adverse
Selection. The Seller
has not used selection
procedures that
identified the
Mortgage Loans as
being less desirable
or valuable than
other
comparable mortgage loans in the Seller's portfolio as of the
Funding Date;
(14) Non-solicitation.
The Seller agrees that it shall not solicit any
Mortgagors (in writing
or otherwise) to
refinance any of the
Mortgage Loans;
provided that mass
advertising or mailings (such as placing advertisements on
television, on radio,
in magazines or in
newspapers or
including messages
in
billing statements)
that are not
exclusively directed
towards the
Mortgagors
shall not constitute solicitation and shall not violate this
covenant; and
(15) Privacy.
The Seller
agrees and acknowledges that as to all nonpublic
personal information
received or obtained
by it with respect to any Mortgagor:
(a) such information
is and shall be held by Seller
in accordance with all
applicable law,
including but not limited to the privacy
provisions
of the
Gramm-Leach Bliley Act; (b) such information is in connection with
a proposed or
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<PAGE>
actual secondary
market sale related to
a transaction
of the Mortgagor for
purposes of 16
C.F.R.ss.313.14(a)(3);
and (c) Seller is hereby prohibited from
disclosing or using
any such information
other than to carry
out the express
provisions of this Agreement, or as otherwise permitted by
applicable law.
Section 3.02
Representations, Warranties and Covenants 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 or in the case
of each covenant, during and after the term of this Agreement:
(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;
(3) Collection
Practices. The
collection
practices used by the
Servicer with
respect to each
Mortgage Note and
Mortgage have been in
all respects
legal,
proper and prudent in the mortgage servicing business; and
(4) MERS. The Servicer is a member of MERS in good standing,
and will comply in
all material respects
with the rules and procedures of MERS in connection with
the servicing of the MERS Mortgage Loans for as long as such Mortgage
Loans are
registered with MERS
Section 3.03
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 and any diskette, data tape, or similar
materials, is complete
as required by the
Agreement,
true and correct in
all
material respects;
-22-
<PAGE>
(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 Mort gage 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 and 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; and, if the Mortgage Loan is a
Cooperative Loan,
no
foreclosure action or
private or public sale under the Uniform Commercial Code
has ever been threatened or commenced with respect to the
Cooperative Loan;
(5) No Outstanding Charges. There are no delinquent taxes,
insurance
premiums,
government or
other assessments, including assessments payable in future
installments, water,
sewer and municipal charges, leasehold payments, ground
rents 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 (and the Proprietary Lease and the Pledge
Instruments with
respect to each
Cooperative
Loan,) have not been
impaired,
waived, altered or modified in any material respect, except as specifically set
forth in the related Mortgage Loan Schedule, and except by written instruments
which have been recorded to the extent any such recordation is required by
law,
or, necessary to
protect the interest of the Purchaser. The substance of any
such waiver,
alteration or modification has been approved by the issuer of
any
related Primary
Insurance Policy and title insurance policy, to the extent
required by the related policies;
(7) No Defenses. The
Mortgage Note and the
Mortgage related to
such Mortgage
Loan (and the Acceptance of Assignment and Assumption of Lease
Agreement related
to each Cooperative
Loan) are not subject
to any right of rescission, set-off
counterclaim or defense, including, without limitation, the defense of usury,
nor will the
operation of any of the terms of 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,
including, without
limitation, the defense of usury and no
such right of
rescission, set-off,
counterclaim
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") are in full force and effect, and contain a standard
mortgagee clause
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<PAGE>
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 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. If required by the Flood Disaster
Protection Act of
1973, as amended,
the Mortgage Loan is covered by a flood
insurance policy
meeting the
requirements
of the current
guidelines
of the
Federal Insurance
Administration
which policy conforms to FNMA and FHLMC
requirements, as well
as all additional
requirements set forth in Section 5.10
of this Agreement.
Such policy was issued by an insurer acceptable under FNMA
and FHLMC guidelines.
The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to
do so, authorizes the holder of the Mortgage to maintain
such insurance at the
Mortgagor's
cost and expense and
to seek
reimbursement
therefor from the Mortgagor;
(9) Compliance With Applicable Laws. 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 or
disclosure laws)
applicable to the
origination and
servicing of such Mortgage
Loan have been complied with in all material respects;
(10) No Fraud. No error or omission, misrepresentation, negligence or fraud in
respect of such
Mortgage Loan has taken place on the part of any
Person in
connection with the origination and servicing of such Mortgage
Loan
(11) 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;
(12) Valid First Lien.
The Mortgage, 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, covering
the entire principal
balance of the Mortgage Loan including any Negative
Amortization. The
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
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<PAGE>
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; with respect to
each Cooperative
Loan, each Acceptance of Assignment and Assumption of Lease
Agreement creates
a
valid, enforceable
and subsisting
first security interest in the collateral
securing the related
Mortgage Note subject
only to (a) the lien of the related
Cooperative
Corporation for unpaid
assessments
representing the obligor's pro
rata share of the Cooperative Corporation's payments for its blanket
mortgage,
current and future real property taxes, insurance premiums,
maintenance fees and
other assessments
to which like
collateral is commonly
subject and (b)
other
matters to which like collateral is commonly subject which do not individually
or in the aggregate
materially
interfere with the benefits of the security
intended to be provided by the Acceptance of Assignment and
Assumption of Lease
Agreement; provided,
however, that the appurtenant Proprietary Lease may be
subordinated or otherwise subject to the lien of any mortgage on
the Cooperative
Project;
(13) Validity of Documents. The Mortgage Note and the Mortgage
related to such
Mortgage Loan
(and the Acceptance of Assignment and Assumption of Lease
Agreement with respect
to each Cooperative
Loan) are original and
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);
(14) 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 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; with respect to each
Cooperative Loan,
all parties to the
Mortgage Note and the
Mortgage Loan had
legal capacity to
execute and deliver the Mortgage Note, the Acceptance of
Assignment and Assumption of Lease Agreement, the Proprietary Lease, the Stock
Power, the Recognition Agreement, the Financing Statement and the
Assignment of
Proprietary Lease and
such documents
have been duly and
properly executed
by
such parties; each
Stock Power (i) has all signatures guaranteed or (ii) if all
signatures are not guaranteed, then such Cooperative Shares will
be transferred
by the stock
transfer agent of the Cooperative Corporation if the Seller
undertakes to convert
the ownership
of the collateral securing the related
Cooperative Loan;
(15) 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 and there is no requirement for future advances thereunder;
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
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<PAGE>
or other escrow
agent. All costs, fees and expenses incurred in making or
closing the Mortgage
Loan and the recording of the Mortgage were paid or are in
the process of being paid, and the Mortgagor is not entitled to any refund
of
any amounts paid or due under the Mortgage Note or Mortgage
(excluding
refunds
which may result from escrow analysis adjustments);
(16) 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 with respect to any
Cooperative Loan,
the sole owner of the
related Acceptance of
Assignment and
Assumption of Lease
Agreement)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;
(17) 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;
(18) 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 (12)(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.
Where required
by applicable
state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. 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, neither the
Seller, nor any prior
holder of the related
Mortgage 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;
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<PAGE>
(19) 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)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; (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; and (f)
with respect to
each Cooperative
Loan, there is no default in complying
with the terms of the
Mortgage Note, the
Acceptance of
Assignment and Assumption of Lease Agreement
and the Proprietary Lease and all maintenance charges and
assessments (including
assessments payable in the future installments, which previously became due
and
owing) have been
paid, and the Seller has the right under the terms of the
Mortgage Note,
Acceptance of Assignment and Assumption of Lease
Agreement and
Recognition Agreement
to pay any maintenance charges or assessments owed by the
Mortgagor 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 Mortgaged
Property subject to the Mortgage, directly or indirectly, for the
payment of any
amount required by the Mortgage Loan;
(20) No Mechanics' Liens. There are 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;
(21) Location of Improvements; No Encroachments. 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;
(22) 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 first 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;
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<PAGE>
(23) Due On Sale.
Except as noted
otherwise in the Offering Materials and 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;
(24) Prepayment Penalty. Except as noted otherwise in the Offering
Materials and
the Mortgage Loan Schedule, such Mortgage Loan is not subject
to
