AMENDMENT NO. 2 TO PURCHASE,
WARRANTIES
AND SERVICING
AGREEMENT
THIS AMENDMENT
NO. 2, effective as of June 16, 2005, amends the Purchase,
Warranties and Servicing Agreement among EMC Mortgage Corporation
(the “Purchaser”), First Tennessee Mortgage Services,
Inc., as servicer (the “Servicer”) and First Horizon
Home Loan Corporation (the “Seller”, and together with
the Servicer, the “Company”), previously entered into
as of September 1, 2003 (the “Agreement”), as
previously amended.
RECITALS
WHEREAS, the
Seller sells to the Purchaser, and the Purchaser purchases from the
Seller, from time to time, pursuant to the Agreement, certain
conventional residential Mortgage Loans on a servicing retained
basis serviced by the Servicer, including second lien loans;
and
WHEREAS, in
connection with future sales of Mortgage Loans to the Purchaser,
the Company and the Purchaser wish to amend the Agreement as set
forth below.
NOW, THEREFORE,
in consideration of the premises and the mutual covenants
hereinafter set forth and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Purchaser and the Company agree to amend the Agreement as
follows:
1.
The preamble, in the second
“Whereas” clause, shall be amended to include “or
second lien” following the term “first
lien”.
2.
The definition of Mortgage shall be
amended to include; “or second lien” following the term
“first lien”.
3.
The definition of
“Determination Date” shall be deleted in its entirety
and replaced with the following:
“Determination Date
: For first lien Mortgage Loans
only, the 15th day (or if such 15th day is not a Business Day, the
Business Day immediately preceding such 15th day) of the month of
the related Remittance Date. For second lien Mortgage Loans only,
with respect to each Remittance Date, the close of business of the
last day of the month preceding the month in which such Remittance
Date occurs.”
4.
The definition of “Monthly
Advance” shall be amended to add; “For first lien
Mortgage Loans only,” at the beginning of the
definition.
5.
The definition of “Remittance
Date” shall be deleted in its entirety and replaced with the
following:
“
Remittance Date : For first lien Mortgage Loans only, the
18th day of any month, beginning with the First Remittance Date, or
if such 18th day is not a Business Day, the first Business Day
immediately preceding such 18th day. For second lien Mortgage
Loans, the fifth (5th) day of each month, commencing on the fifth
(5th) day of the month next following the month in which the
Cut-off Date occurs, or if such fifth (5th) day is not a Business
Day, the first Business Day immediately following such fifth (5th)
day.”
6.
Section 3.02(b) shall be amended to
include “or second lien, as applicable,” following the
term “first lien” and to include “or second
priority ownership interest, as applicable,” following the
term “first priority ownership interest”.
7.
Section 3.02(j) shall be amended to
include “or second lien, as applicable,” following the
term “first lien”. Further, Section 3.02(j) shall be
amended to add “and (4) for any second lien Mortgage Loan,
the related first lien” at the end of the second
sentence.
8. The
following representations and warranties shall be added to Section
3.02:
(ggg) With
respect to any Mortgage Loan originated on or after August 1, 2004
and underlying the security, neither the related Mortgage nor the
related Mortgage Note requires the borrower to submit to
arbitration to resolve any dispute arising out of or relating in
any way to the mortgage loan transaction.
(hhh) No
Mortgage Loan is secured by Mortgaged Property in the Commonwealth
of Massachusetts with a loan application date on or after November
7, 2004 that refinances a mortgage loan that is less than sixty
(60) months old, unless such Mortgage Loan (i) is on an investment
property, (ii) meets the requirements set forth in the Code of
Massachusetts Regulation (“CMR”), 209 CMR 53.04(1)(b),
or (iii) meets the requirements set forth in the 209 CMR
53.04(1)(c).
9.
Section 4.03 shall be amended to
include the following:
“For all second lien Mortgage Loans only,
the Company shall use its best efforts, consistent with the
procedures that the Company would use in servicing loans for its
own account, consistent with Accepted Servicing Practices, any
Primary Mortgage Insurance Policies and the best interest of
Purchaser, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. In
addition, for all second lien Mortgage Loans only, if the Company
reasonably believes that Liquidation Proceeds with respect to any
such Mortgage Loan would not be increased as a result of such
foreclosure or other action, such Mortgage Loan will be charged-off
or will become a liquidated Mortgage Loan. The Company will give
notice of any such charge-off to the Purchaser. The decision of the
Company to foreclose on a defaulted second lien Mortgage Loan shall
be subject to a determination by the Company that the proceeds of
such foreclosure would exceed the costs and expenses of bringing
such a proceeding.
Further, for all second lien Mortgage Loans, the
Company agrees that it shall provide to Purchaser within one
hundred twenty (120) days of default for any such second lien
Mortgage Loan a bid pass package to Purchaser containing all
relevant information and any necessary supporting documentation
needed for Purchaser to determine whether to foreclose or
charge-off such second lien Mortgage Loan. For any such second lien
Mortgage Loan, Purchaser shall advise Company of its decision to
foreclose or charge-off by no later than one hundred eighty (180)
days of default of such second lien Mortgage Loan. In addition,
notwithstanding anything contrary contained herein, Company will
cease collection activity on any second lien Mortgage Loan that is
twelve (12) months or more delinquent.”
10.
Section 4.03 shall be amended to
include as the final paragraph:
“If the Mortgage relating to a Mortgage
Loan had a lien senior to the Mortgage Loan on the related
Mortgaged Property as of the Cut-off Da
