Exhibit 99.13b
EXECUTION COPY
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
_____________________
MORGAN STANLEY MORTGAGE CAPITAL INC.
Purchaser
and
WILMINGTON FINANCE INC.,
Seller
_____________________
Dated as of November 1, 2006
Conventional,
Fixed and Adjustable Rate, Prime/Alt-A Residential Mortgage
Loans
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TABLE OF CONTENTS
Page
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SECTION 1.
DEFINITIONS......................................................1
SECTION 2.
AGREEMENT TO
PURCHASE...........................................13
SECTION 3.
MORTGAGE
SCHEDULES..............................................14
SECTION 4.
PURCHASE
PRICE..................................................14
SECTION 5.
EXAMINATION OF MORTGAGE
FILES...................................15
SECTION 6.
CONVEYANCE FROM SELLERS TO
PURCHASER............................15
SECTION 7.
SERVICING OF THE MORTGAGE
LOANS.................................17
SECTION 8.
TRANSFER OF
SERVICING...........................................19
SECTION 9.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR
BREACH.............................................21
SECTION 10.
CLOSING.........................................................41
SECTION 11.
CLOSING
DOCUMENTS...............................................41
SECTION 12.
COSTS...........................................................43
SECTION 13.
COOPERATION OF SELLER WITH A
RECONSTITUTION.....................43
SECTION 14. THE
SELLER......................................................44
SECTION 15.
FINANCIAL
STATEMENTS............................................46
SECTION 16.
MANDATORY DELIVERY; GRANT OF SECURITY
INTEREST..................46
SECTION 17.
NOTICES.........................................................47
SECTION 18.
SEVERABILITY
CLAUSE.............................................48
SECTION 19.
COUNTERPARTS....................................................48
SECTION 20.
GOVERNING
LAW...................................................48
SECTION 21.
INTENTION OF THE
PARTIES........................................48
SECTION 22.
SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT........49
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SECTION 23.
WAIVERS.........................................................49
SECTION 24.
EXHIBITS........................................................49
SECTION 25.
GENERAL INTERPRETIVE
PRINCIPLES.................................49
SECTION 26.
REPRODUCTION OF
DOCUMENTS.......................................50
SECTION 27.
FURTHER
AGREEMENTS..............................................50
SECTION 28.
RECORDATION OF ASSIGNMENTS OF
MORTGAGE..........................50
SECTION 29. NO
SOLICITATION.................................................50
SECTION 30.
WAIVER OF TRIAL BY
JURY.........................................51
SECTION 31.
GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF
PROCESS.......51
SECTION 32.
CONFIDENTIALITY.................................................51
SECTION 33.
COMPLIANCE WITH REGULATION
AB...................................52
EXHIBITS
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B
[RESERVED]
EXHIBIT C
FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D
[RESERVED]
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H
UNDERWRITING GUIDELINES
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-----------------------------------------------
This MORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of November 1, 2006, by and between Morgan
Stanley
Mortgage Capital Inc., a New York corporation, having an office at
1585
Broadway, 2nd Floor, New York, New York 10036 (the "Purchaser") and
WILMINGTON
FINANCE INC., a Delaware corporation, having an office at 401
Plymouth Road,
Suite 400, Plymouth Meeting, Pennsylvania 19462 (the "Seller").
W I T N E S S E T H:
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WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser on a nonexclusive basis, and the Purchaser desires to
purchase, from
time to time, from the Seller, without recourse to the Seller but
subject to the
terms of this Agreement, certain first and second lien,
adjustable-rate and
fixed-rate prime/Alt-A residential mortgage loans (the "Mortgage
Loans") on a
servicing released basis as described herein, and which shall be
delivered in
pools of whole loans (each, a "Mortgage Loan Package") on various
dates as
provided herein (each, a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of
trust
or other security instrument creating a first or second lien on a
residential
dwelling located in the jurisdiction indicated on the Mortgage Loan
Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner
of the conveyance, servicing and control of the Mortgage Loans;
and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage
Loans to one
or more purchasers as a whole loan transfer or a public or private,
rated or
unrated mortgage Securitization Transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable
consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms
shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices of prudent mortgage lending
institutions
which service mortgage loans of the same type as such Mortgage Loan
in the
jurisdiction where the related Mortgaged Property is located.
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Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified Person.
For the purposes of this definition, "control" when used with
respect to any
specified Person means the power to direct the management and
policies of such
Person, directly or indirectly, whether through the ownership of
voting
securities, by contract or otherwise and the terms "controlling"
and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Fannie Mae Transfer or a Freddie Mac
Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement
and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the
value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection
6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice
of
transfer or equivalent instrument in recordable form, sufficient
under the laws
of the jurisdiction wherein the related Mortgaged Property is
located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage
Loan or (b)
for which Monthly Payments of principal (not including the payment
due on its
stated maturity date) are based on an amortization schedule that
would be
insufficient to fully amortize the principal thereof by the stated
maturity date
of the Mortgage Loan.
Business Day: Any day other than (i) a Saturday or Sunday, (ii)
a
day on which banking and savings and loan institutions, in the
State of New York
or the State in which either Seller's servicing operations are
located or (iii)
the state in which the Custodian's operations are located, are
authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time
to
time shall purchase, and the Seller from time to time shall sell,
the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to
the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding
principal
balance of the Second Lien Loan and (ii) the outstanding principal
balance as of
such date of any mortgage loan or mortgage loans that are senior or
equal in
priority to the Second Lien Loan and which are secured by the
same
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Mortgaged Property to (b) the Appraised Value as determined
pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of the
origination
of the Second Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards or settlements in respect of
a
Mortgaged Property, whether permanent or temporary, partial or
entire, by
exercise of the power of eminent domain or condemnation, to the
extent not
required to be released to a Mortgagor in accordance with the terms
of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
Custodial Agreement: The agreement(s) governing the retention of
the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage
and other
Mortgage Loan Documents. If more than one Custodial Agreement is in
effect at
any given time, all of the individual Custodial Agreements shall
collectively be
referred to as the "Custodial Agreement."
Custodian: LaSalle Bank, National Association, a national
banking
association, and its successors in interest or any successor to the
Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the
related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Deemed Material and Adverse Representation: Each representation
and
warranty identified as such in Subsection 9.02 of this
Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage
Loan by the
Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB,
with respect to any Securitization Transaction.
Determination Date: The second Business Day of the month in
which
the related Remittance Date occurs.
Due Date: The day of the month on which the Monthly Payment is
due
on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: Any of (i) an account maintained with a federal
or
state chartered depository institution or trust company the
short-term unsecured
debt obligations of which (or, in the case of a depository
institution or trust
company that is a subsidiary of a holding company, the short-term
unsecured debt
obligations of such holding company) are rated A-1 by Standard
& Poor's or
Prime-1 by Moody's (or a comparable rating if another Rating Agency
is
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specified by the Purchaser by written notice to the Seller) at the
time any
amounts are held on deposit therein, (ii) an account or accounts
the deposits in
which are fully insured by the FDIC, or (iii) a trust account or
accounts
maintained with a federal or state chartered depository institution
or trust
company acting in its fiduciary capacity.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer
rents,
municipal charges, mortgage insurance premiums, fire and hazard
insurance
premiums, condominium charges, and any other payments required to
be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any
other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide and all amendments or additions thereto.
Fannie Mae Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the
United
States Department of Housing and Urban Development, or any
successor thereto and
including the Federal Housing Commissioner and the Secretary of
Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage
on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The
Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in the related Mortgage Note
which amount
is added to the Index in accordance with the terms of the related
Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home
Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual
percentage
rate" or total "points and fees" payable by the related Mortgagor
(as each such
term is calculated under HOEPA) that exceed the thresholds set
forth by HOEPA
and its implementing regulations, including 12 C.F.R.
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ss. 226.32(a)(1)(i) and (ii), (c) classified as a "high cost home,"
"threshold,"
"covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in
clause (1) of the definition of that term in the New Jersey Home
Ownership
Security Act of 2002 that were originated between November 26, 2003
and July 7,
2004), "high risk home," "predatory" or similar loan under any
other applicable
federal, state or local law (or a similarly classified loan using
different
terminology under a law imposing heightened regulatory scrutiny or
additional
legal liability for residential mortgage loans having high interest
rates,
points and/or fees) or (d) categorized as High Cost pursuant to
Appendix E of
Standard & Poor's Glossary. For avoidance of doubt, the parties
agree that this
definition shall apply to any law regardless of whether such law is
presently,
or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal
agency or official thereof which may from time to time succeed to
the functions
thereof with regard to Mortgage Insurance issued by the FHA. The
term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions
thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage
Loan,
the Person named on the MERS System as the interim funder pursuant
to the MERS
Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS System as the investor pursuant to the
MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the
terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage
Loan by more
than the amount per annum set forth on the related Mortgage Loan
Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale
or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is
acquired in
satisfaction of the Mortgage Loan.
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Loan Performance Information: As defined in Subsection
34.03(e).
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the
ratio (expressed as a percentage) of the outstanding principal
amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise
indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at
origination
and (b) if the Mortgage Loan was made to finance the acquisition of
the related
Mortgaged Property, the purchase price of the Mortgaged
Property.
Manufactured Home: A
single family residential unit that is
constructed in a factory in sections in accordance with the Federal
Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by
the
Department of Housing and Urban Development ("HUD Code"), as
amended in 2000,
which preempts state and local building codes. Each unit is
identified by the
presence of a HUD Plate/Compliance Certificate label. The sections
are then
transported to the site and joined together and affixed to a
pre-built permanent
foundation (which satisfies the manufacturer's requirements and all
state,
county, and local building codes and regulations). The manufactured
home is
built on a non-removable, permanent frame chassis that supports the
complete
unit of walls, floors, and roof. The underneath part of the home
may have
running gear (wheels, axles, and brakes) that enable it to be
transported to the
permanent site. The wheels and hitch are removed prior to anchoring
the unit to
the permanent foundation. The manufactured home must be classified
as real
estate and taxed accordingly. The permanent foundation may be on
land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or
will take such
action as is necessary to cause MERS to be, the mortgagee of
record, as nominee
for the Seller, in accordance with MERS Procedures Manual and (b)
the Seller has
designated or will designate the Purchaser as the Investor on the
MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS
Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Moody's Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument securing
a
Mortgage Note, which creates a first lien, in the case of a First
Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged
Property.
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Mortgage File: The items pertaining to a particular Mortgage
Loan
referred to in Exhibit A annexed hereto, and any additional
documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment
as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject
of
this Agreement, each Mortgage Loan originally sold and subject to
this Agreement
being identified on the applicable Mortgage Loan Schedule, which
Mortgage Loan
includes without limitation the Mortgage File, the Monthly
Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds,
Servicing Rights and all other rights, benefits, proceeds and
obligations
arising from or in connection with such Mortgage Loan, excluding
replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered
to
the Custodian pursuant to Subsection 6.03 hereof with respect to
any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall
be
purchased by the Purchaser from the Seller from time to time on
each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth
the following information with respect to each Mortgage Loan in the
related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged
Property including
the city, state and zip code; (4) a code indicating whether the
Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property
is
owner-occupied; (6) the number and type of residential units
constituting the
Mortgaged Property; (7) the original months to maturity or the
remaining months
to maturity from the related Cut-off Date, in any case based on the
original
amortization schedule and, if different, the maturity expressed in
the same
manner but based on the actual amortization schedule; (8) with
respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with
respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage
Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly
Payment was
due on the Mortgage Loan and, if such date is not consistent with
the Due Date
currently in effect, such Due Date; (11) the stated maturity date;
(12) the
first payment date; (13) the amount of the Monthly Payment as of
the related
Cut-off Date; (14) the last payment date on which a payment was
actually applied
to the outstanding principal balance; (15) the original principal
amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as
of the close
of business on the related Cut-off Date, after deduction of
payments of
principal due and collected on or before the related Cut-off Date;
(17)
delinquency status as of the related Cut-off Date; (18) with
respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date;
(19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate
Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable
Rate Mortgage
Loan, a code indicating the type of Index; (22) the
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type of Mortgage Loan (i.e., Fixed or Adjustable Rate Mortgage
Loan, First or
Second Lien Loan); (23) a code indicating the purpose of the loan
(i.e.,
purchase, rate and term refinance, equity take-out refinance); (24)
a code
indicating the documentation style (i.e., full, alternative or
reduced); (25)
asset verification (Y/N); (26) the loan credit classification (as
described in
the Underwriting Guidelines); (27) whether such Mortgage Loan
provides for a
Prepayment Penalty and, if applicable, the Prepayment Penalty
period; (28) the
Mortgage Interest Rate as of origination; (29) the credit risk
score (FICO
score); (30) the date of origination; (31) with respect to
Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period; (32)
with respect
to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate
adjustment
percentage; (33) with respect to each Adjustable Rate Mortgage
Loan, the
Mortgage Interest Rate floor; (34) with respect to each Adjustable
Rate Mortgage
Loan, the Mortgage Interest Rate Cap as of the first Interest Rate
Adjustment
Date; (35) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate
Cap subsequent to the first Interest Rate Adjustment Date; (36)
with respect to
each Adjustable Rate Mortgage Loan, a code indicating whether the
Mortgage Loan
provides for negative amortization; (37) with respect to each
Adjustable Rate
Mortgage Loan with negative amortization, the negative amortization
limit; (38)
a code indicating whether the Mortgage Loan is a Home Loan; (39) a
code
indicating whether the Mortgage Loan is a Balloon Mortgage Loan;
(40) the Due
Date for the first Monthly Payment; (41) the original Monthly
Payment due; (42)
a code indicating the PMI Policy provider and percentage of
coverage, if
applicable; (43) Appraised Value; (44) appraisal type; (45)
automated valuation
model (AVM); (46) appraisal date; (47) with respect to the related
Mortgagor,
the debt-to-income ratio; (48) whether the Mortgage Loan has
Monthly Payments
that are interest-only for a period of time, and the interest-only
period, if
applicable (and with respect to each Second Lien Loan, whether the
related first
lien mortgage loan has monthly payments that are interest-only for
a period of
time, and the interest-only period, if applicable); (49) the social
security
number of the Mortgagor; (50) a code indicating whether the
Mortgagor's race
and/or ethnicity is (i) native American or Alaskan native, (ii)
Asian/Pacific
islander, (iii) African American, (iv) white, (v) Hispanic or
Latino, (vi) other
minority, (vii) not provided by the Mortgagor, (viii) not
applicable (if the
Mortgagor is an entity) and (ix) unknown or missing; (51) a
description of the
Prepayment Penalty, if applicable, including whether the applicable
Prepayment
Penalty provision is "hard" or "soft"; and (52) a code indicating
whether the
Mortgage Loan is a MERS Designated Mortgage Loan and the MERS
Identification
Number, if applicable. With respect to the Mortgage Loans in the
aggregate, the
Mortgage Loan Schedule shall set forth the following information,
as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the
current
aggregate outstanding principal balance of the Mortgage Loans; (3)
the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date;
and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage
Note,
consisting of an unsubordinated estate in fee simple or, with
respect to real
property located in jurisdictions in which the use of leasehold
estates for
residential properties is a widely-accepted practice, a leasehold
estate, in a
single parcel or multiple parcels of real property improved by a
Residential
Dwelling.
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Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of
the
Board or the Vice Chairman of the Board or a President or a Vice
President and
by the Treasurer or the Secretary or one of the Assistant
Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser
as required
by this Agreement.
Periodic Rate Cap: The provision of each Mortgage Note related to
an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum amount by
which the Mortgage Interest Rate therein may increase or decrease
on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate
previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage
Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance
issued
by an insurer acceptable under the Underwriting Guidelines and
qualified to do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the
penalty
if the Mortgagor prepays such Mortgage Loan as provided in the
related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal
on
a Mortgage Loan which is received in advance of its scheduled Due
Date,
including any Prepayment Penalty or premium thereon, and which is
not
accompanied by an amount of interest representing scheduled
interest due on any
date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller in exchange for the Mortgage Loans
purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements
setting
forth the general terms and conditions of the transactions
consummated herein
and identifying the Mortgage Loans to be purchased from time to
time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Morgan Stanley Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any
successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, accepted by the Seller, who
had
no interest, direct or indirect, in the Mortgaged Property or in
any loan made
on the security thereof, and
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whose compensation was not affected by the approval or disapproval
of the
Mortgage Loan, and such appraiser and the appraisal made by such
appraiser both
satisfied the requirements of Title XI of the Financial
Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations
promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Correspondent: Any Person from which the Seller
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the
Seller and
such Person that contemplated that such Person would underwrite
mortgage loans
from time to time, for sale to the Seller, in accordance with
underwriting
guidelines designated by the Seller ("Designated Guidelines") or
guidelines that
do not vary materially from such Designated Guidelines; (ii) such
Mortgage Loans
were in fact underwritten as described in clause (i) above and were
acquired by
the Seller within 180 days after origination; (iii) either (x) the
Designated
Guidelines were, at the time such Mortgage Loans were originated,
used by the
Seller in origination of mortgage loans of the same type as the
Mortgage Loans
for the Seller's own accounts or (y) the Designated Guidelines
were, at the time
such Mortgage Loans were underwritten, designated by the Seller on
a consistent
basis for use by lenders in originating mortgage loans to be
purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage
Loans were
acquired by the Seller, pre-purchase or post-purchase quality
assurance
procedures (which may involve, among other things, review of a
sample of
mortgage loans purchased during a particular time period or through
particular
channels) designed to ensure that Persons from which it purchased
mortgage loans
properly applied the underwriting criteria designated by the
Seller.
Qualified
Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the 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 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 outstanding
principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be
remitted to
the Purchaser by the Seller in accordance with the terms of this
Agreement in
the month of substitution); (ii) have a Mortgage Interest Rate not
less than and
not more than 1% greater than the Mortgage Interest Rate of the
Deleted Mortgage
Loan; (iii) have a remaining term to maturity not greater than and
not more than
one year less than that of the Deleted Mortgage Loan; (iv) be of
the same type
as the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate
with same
Mortgage Interest Rate Caps); and (v) comply with each
representation and
warranty (respecting individual Mortgage Loans) set forth in
Section 9.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or
their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization
Transaction.
Reconstitution Agreement: As defined in Section 13.
Reconstitution Date: As defined in Section 13.
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Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (Jan.
7, 2005)) or
by the staff of the Commission, or as may be provided by the
Commission or its
staff from time to time.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating
to a REMIC, which appear at Section 860A through 860G of Subchapter
M of Chapter
1, Subtitle A of the Code, and related provisions and regulations,
rulings or
pronouncements promulgated thereunder, as the foregoing may be in
effect from
time to time.
Remittance Date: The fifth Business Day of any month, beginning
with
the first Remittance Date after the related Closing Date.
Repurchase Price: With respect to any Mortgage Loan, a price
equal
to (a) during the first year immediately following the related
Closing Date, an
amount equal to the percentage of par as stated in the related
Purchase Price
and Terms Agreement multiplied by the then outstanding principal
balance of such
Mortgage Loan as of the date of such repurchase, plus accrued
interest on such
Mortgage Loan at the Mortgage Interest Rate from the date to which
interest had
last been paid through the day immediately preceding the date of
such
repurchase, plus the amount of any outstanding advances owed to any
servicer,
plus all costs and expenses incurred by the Purchaser arising out
of or based
upon such breach, including without limitation costs and expenses
incurred in
the enforcement of the Seller's repurchase obligation hereunder,
(b) during the
second year following the Closing Date, an amount equal to the
product of (i)
100% plus an amount equal to (A) a fraction, whose numerator is
equal to 12 less
the number of months since the first anniversary of the Closing
Date and whose
denominator is equal to 12, multiplied by (B) the percentage of par
as stated in
the related Purchase Price and Terms Agreement less 100%,
multiplied by (ii) the
then outstanding principal balance of such Mortgage Loan as of the
date of such
repurchase, plus accrued interest on such Mortgage Loan at the
Mortgage Interest
Rate from the date to which interest had last been paid through the
day
immediately preceding the date of such repurchase, plus the amount
of any
outstanding advances owed to any servicer, plus all costs and
expenses incurred
by the Purchaser arising out of or based upon such breach,
including without
limitation costs and expenses incurred in the enforcement of the
Seller's
repurchase obligation hereunder, and (c) thereafter, an amount
equal to the then
outstanding principal balance of such Mortgage Loan as of the date
of such
repurchase plus accrued interest on such Mortgage Loan at the
Mortgage Interest
Rate from the date to which interest had last been paid through the
day
immediately preceding the date of such repurchase, plus the amount
of any
outstanding advances owed to any servicer, plus all costs and
expenses incurred
by the Purchaser arising out of or based upon such breach,
including without
limitation costs and expenses incurred in the enforcement of the
Seller's
repurchase obligation hereunder.
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Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a condominium project or (iv) a
one-family dwelling
in a planned unit development, none of which is a dwelling unit in
a residential
cooperative housing corporation, mobile home or Manufactured
Home.
RESPA: Real Estate Settlement Procedures Act, as amended from
time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly to an issuing entity in connection with an issuance of
publicly
offered or privately placed, rated or unrated mortgage-backed
securities or (2)
an issuance of publicly offered or privately placed, rated or
unrated
securities, the payments on which are determined primarily by
reference to one
or more portfolios of residential mortgage loans consisting, in
whole or in
part, of some or all of the Mortgage Loans.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Sellers: As defined in the initial paragraph of the Agreement.
Seller Information: As defined in Subsection 33.04(a).
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in
the Mortgage
File which are not delivered to the Purchaser or the Custodian and
copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Representations and Warranties: The representations
and
warranties set forth in Subsection 9.02(a), (f), (h), (ii), (ll),
(mm) and (qq).
Servicing
Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies
received by
the Seller for servicing the Mortgage Loans; (c) any late fees,
penalties or
similar payments with respect to the Mortgage Loans; (d) all
agreements or
documents creating, defining or evidencing any such servicing
rights to the
extent they relate to such servicing rights and all rights of the
Seller
thereunder; (e) Escrow Payments or other similar payments with
respect to the
Mortgage Loans and any amounts actually collected by the Seller
with respect
thereto; (f) all accounts and other rights to payment related to
any of the
property described in this paragraph; and (g) any and all
documents, files,
records, servicing files, servicing documents, servicing records,
data tapes,
computer records, or other information pertaining to the Mortgage
Loans or
pertaining to the past, present or prospective servicing of the
Mortgage Loans.
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Sponsor: The sponsor, as such term is defined in Regulation AB,
with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's
LEVELS(R)
Glossary, as may be in effect from time to time.
Static Pool Information: Static pool information as described
in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of
the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date
of
determination, (i) the principal balance of such Mortgage Loan at
the related
Cut-off Date after giving effect to payments of principal due on or
before such
date, to the extent actually received, minus (ii) all amounts
previously
distributed to the Purchaser with respect to the related Mortgage
Loan
representing payments or recoveries of principal on such Mortgage
Loan.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: The date on which the Purchaser, or its
designee,
shall receive the transfer of servicing responsibilities and begin
to perform
the servicing of the Mortgage Loans with respect to the related
Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities.
Such date
shall occur on the day indicated by the Purchaser to the Seller in
the related
Purchase Price and Terms Agreement.
Underwriting Guidelines: The underwriting guidelines of the
Seller,
a copy of which is attached as an exhibit to the related Assignment
and
Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time on a nonexclusive
basis,
and the Purchaser agrees to purchase from time to time without
recourse to the
Seller but subject to the representations and warranties and terms
contained in
this Agreement, Mortgage Loans having an aggregate principal
balance on the
related Cut-off Date in an amount as set forth in the related
Purchase Price and
Terms Agreement, or in such other amount as agreed by the Purchaser
and the
Seller as evidenced by the actual aggregate principal balance of
the Mortgage
Loans accepted by the Purchaser on each Closing Date.
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SECTION 3. Mortgage Schedules.
The Seller
from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the
Mortgage Loans to
be purchased on each Closing Date in accordance with the related
Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary
Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the
Mortgage Loans to be purchased on a particular Closing Date to the
Purchaser at
least five (5) Business Days prior to the related Closing Date. The
related
Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with
those Mortgage Loans which have not been funded prior to the
related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for
each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement
(subject to
adjustment as provided therein), multiplied by the aggregate
principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the
related
Mortgage Loan Schedule, after application of scheduled payments of
principal due
on or before the related Cut-off Date, but only to the extent such
payments were
actually received. The initial principal amount of the related
Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so
computed as
of the related Cut-off Date. If so provided in the related Purchase
Price and
Terms Agreement, portions of the Mortgage Loans shall be priced
separately.
In addition to the Purchase Price as described above, the
Purchaser
shall pay to the Seller, at closing, accrued interest on the
current principal
amount of the related Mortgage Loans as of the related Cut-off Date
at the
weighted average Mortgage Interest Rate of those Mortgage Loans.
The Purchase
Price plus accrued interest as set forth in the preceding paragraph
shall be
paid to the Seller by wire transfer of immediately available funds
to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal
due
after the related Cut-off Date, (2) all other recoveries of
principal collected
on or after the related Cut-off Date, and (3) all payments of
interest on the
Mortgage Loans (minus that portion of any such payment which is
allocable to the
period prior to the related Cut-off Date). The outstanding
principal balance of
each Mortgage Loan as of the related Cut-off Date is determined
after
application of payments of principal due on or before the related
Cut-off Date,
to the extent actually collected, together with any unscheduled
principal
prepayments collected prior to such Cut-off Date; provided,
however, that
payments of scheduled principal and interest paid prior to such
Cut-off date,
but to be applied on a Due Date beyond the related Cut-off Date
shall not be
applied to the principal balance as of the related Cut-off Date.
Such prepaid
amounts shall be the property of the Purchaser and shall be
remitted by the
Seller to the Purchaser on the next Remittance Date.
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SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing
Date,
the Seller shall (a) deliver to the Purchaser or its designee in
escrow, for
examination with respect to each Mortgage Loan to be purchased, the
related
Mortgage File, including a copy of the Assignment of Mortgage,
pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available
to the
Purchaser for examination at the Seller's place of business in
Plymouth Meeting,
Pennsylvania. Such examination may be made by the Purchaser or its
designee at
any reasonable time before or after the related Closing Date. If
the Purchaser
makes such examination prior to the related Closing Date and
reasonably
determines, in good faith, that any Mortgage Loans are unacceptable
to the
Purchaser for any reason, such Mortgage Loans shall be deleted from
the related
Mortgage Loan Schedule, and may be replaced, at the Seller's
option, by a
Qualified Substitute Mortgage Loan (or Loans) acceptable to the
Purchaser. The
Purchaser may, at its option and without notice to the Seller,
purchase some or
all of the Mortgage Loans without conducting any partial or
complete
examination. The fact that the Purchaser or its designee has
conducted or has
failed to conduct any partial or complete examination of the
Mortgage Files
shall not affect the Purchaser's (or any of its successor's) rights
to demand
repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Sellers to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller shall execute and deliver an Assignment and
Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment
and
Conveyance Agreement"). The Seller shall cause the Servicing File
retained by
the Seller pursuant to this Agreement to be appropriately
identified in the
Seller's computer system and/or books and records, as appropriate,
to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The
Seller shall
release from their custody the contents of any Servicing File
retained by it
only in accordance with this Agreement.
Subsection 6.02
Books and Records.
Record title to each Mortgage and the related Mortgage Note as
of
the related Closing Date shall be in the name of the Seller, an
Affiliate of the
Seller, the Purchaser or one or more designees of the Purchaser, as
the
Purchaser shall select; provided, however, that if a Mortgage has
been recorded
in the name of MERS or its designee, the Seller is shown as the
owner of the
related Mortgage Loan on the records of MERS for purposes of the
system of
recording transfers of beneficial ownership of mortgages maintained
by MERS.
Notwithstanding the foregoing, each Mortgage and related Mortgage
Note shall be
possessed solely by the Purchaser or the appropriate designee of
the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans
including, but
not limited to, all funds received by the Seller after the related
Cut-off Date
on or in connection with a Mortgage Loan shall be vested in the
Purchaser or one
or more designees of the Purchaser; provided, however, that all
funds received
on or in connection with a Mortgage Loan shall be received and held
by the
Seller in trust for the benefit of the Purchaser or the appropriate
designee of
the Purchaser, as the case may be, as the owner of the Mortgage
Loans pursuant
to the terms of this Agreement.
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The Seller shall be responsible for maintaining, and shall
maintain,
a complete set of books and records for each Mortgage Loan which
shall be marked
clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In
particular, the Seller shall maintain in their possession,
available for
inspection by the Purchaser, and shall deliver to the Purchaser
upon demand,
evidence of compliance with all federal, state and local laws,
rules and
regulations, and requirements of prudent mortgage lenders who
originate mortgage
loans similar to the Mortgage Loans in the jurisdiction where the
Mortgaged
Property is located, including but not limited to documentation as
to the method
used in determining the applicability of the provisions of the
National Flood
Insurance Act of 1968, as amended, to the Mortgaged Property and
documentation
evidencing insurance coverage. To the extent that original
documents are not
required for purposes of realization of Liquidation Proceeds or
Insurance
Proceeds, documents maintained by the Seller may be in the form of
microfilm or
microfiche so long as the Seller complies with the requirements of
the Fannie
Mae Guides or prudent mortgage lenders who originate mortgage loans
similar to
the Mortgage Loans in the jurisdiction where the Mortgaged Property
is located.
The sale of each Mortgage Loan shall be reflected on the
Seller's
balance sheet and other financial statements as a sale of assets by
the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than
two (2) Business Days prior to the related Closing Date those
Mortgage Loan
Documents set forth on Exhibit A hereto as required by the
Custodial Agreement
with respect to each Mortgage Loan set forth on the related
Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage
Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the
related Closing Date, as evidenced by the Initial Certification of
the Custodian
in the form annexed to the Custodial Agreement. The Seller shall
comply with the
terms of the Custodial Agreement and the Purchaser shall pay all
fees and
expenses of the Custodian.
The Seller shall forward to the Custodian, or after the related
Closing Date, to such other Person as the Purchaser shall designate
in writing,
original documents evidencing an assumption, modification,
consolidation or
extension of any Mortgage Loan entered into in accordance with this
Agreement
within two weeks of their execution, provided, however, that the
Seller shall
provide the Custodian, or to such other Person as the Purchaser
shall designate
in writing, with a certified true copy of any such document
submitted for
recordation within two weeks of its execution, and shall promptly
provide the
original of any document submitted for recordation or a copy of
such document
certified by the appropriate public recording office or title
closing agent to
be a true and complete copy of the original within ninety days of
its submission
for recordation.
In the event any document required to be delivered to the
Custodian
in the Custodial Agreement, including an original or copy of any
document
submitted for recordation to the appropriate public recording
office, is not so
delivered to the Custodian, or to such other Person as the
Purchaser shall
designate in writing, within 90 days following the related
Closing
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Date (other than with respect to the Assignments of Mortgage which
shall be
delivered to the Custodian in blank and recorded subsequently by
the Purchaser
or its designee), and in the event that the Seller does not cure
such failure
within 30 days of discovery or receipt of written notification of
such failure
from the Purchaser, the related Mortgage Loan shall, upon the
request of the
Purchaser, be repurchased by such Seller at the price and in the
manner
specified in Subsection 9.03. The foregoing repurchase obligation
shall not
apply in the event that such Seller cannot deliver an original
document
submitted for recordation to the appropriate public recording
office within the
specified period due to a delay caused by the recording office in
the applicable
jurisdiction; provided that such Seller shall instead deliver a
recording
receipt of such recording office or, if such recording receipt is
not available,
an officer's certificate of a servicing officer of such Seller,
confirming that
such documents have been accepted for recording; provided that,
upon request of
the Purchaser and delivery by the Purchaser to the Seller of a
schedule of the
related Mortgage Loans, such Seller shall reissue and deliver to
the Purchaser
or its designee said officer's certificate.
The Seller shall pay all initial recording fees, if any, for
the
assignments of mortgage and any other fees or costs in transferring
all original
documents to the Custodian or, upon written request of the
Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the
Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and
shall be
reimbursed by the Seller for the costs associated therewith
pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the
legal documents,
credit documents, property appraisals, and underwriting decisions.
The program
shall include evaluating and monitoring the overall quality of the
Seller's loan
production and servicing activities. The program is to ensure that
the Mortgage
Loans are originated in accordance with the Underwriting
Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against
errors and
omissions by officers, employees, or other authorized persons.
Subsection 6.05
MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the
Purchaser as the
Investor and the Custodian as custodian, and no Person shall be
listed as
Interim Funder on the MERS System. In addition, on or prior to the
related
Closing Date, Seller shall provide the Custodian and the Purchaser
with a MERS
Report listing the Purchaser as the Investor, the Custodian as
custodian and no
Person as Interim Funder with respect to each MERS Designated
Mortgage Loan.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser
on
a servicing released basis. Subject to, and upon the terms and
conditions of
this Agreement, the Seller hereby sells, transfers, assigns,
conveys and
delivers to the Purchaser the Servicing Rights.
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The Purchaser shall retain the Seller as contract servicer of
the
Mortgage Loans for an interim period pursuant to and in accordance
with the
terms and conditions set forth in this section provided that if the
related
Transfer Date has not occurred on or prior to the date which is 60
days after
the related Closing Date, the Purchaser and the Seller hereby
agrees to
negotiate in good faith and enter into a more detailed interim
servicing
agreement mutually acceptable to the parties. The Seller shall
service the
Mortgage Loans on an "actual/actual" basis and otherwise in
accordance with the
Accepted Servicing Practices and the following provisions of this
section. The
Seller shall not be entitled to a servicing fee in connection with
the servicing
of any Mortgage Loan hereunder.
In servicing the
Mortgage Loans, the Seller shall comply with all
applicable laws, rules and regulations with respect thereto. The
Seller shall
take no action with respect to any Mortgage Loan, including
entering into any
litigation, or any agreement with the related Mortgagor, without
the prior
written consent of the Purchaser. The Seller shall promptly notify
the Purchaser
in writing of any action which should be taken with respect to any
Mortgage Loan
in accordance with Accepted Servicing Practices. The Seller shall
take no
action, and shall not refrain from taking action, which, in either
case, (a)
would impair the ability of the Purchaser to realize on or enforce
the Mortgage
Note or the lien of the Mortgage or any other document related
thereto or (b)
would jeopardize the rights or remedies available to the Purchaser
with respect
to any Mortgage Loan or otherwise impair the ability of the
Purchaser to realize
on the Mortgaged Property with respect to such Mortgage Loan.
The Seller shall be obligated to make all advances on the
Mortgage
Loans with respect to taxes and insurance premiums due and owing
(the "T&I
Servicing Advances"). Any other servicing advances in excess of
$500 shall be
made with the prior written consent of the Purchaser. The Seller
shall be
required to notify the Purchaser in writing of all advances in
excess of $500
required to be made in order to further protect and preserve the
Purchaser's
interest in the Mortgage Loans and the underlying Mortgaged
Property (the "Other
Servicing Advances," together with the T&I Servicing Advances,
the "Servicing
Advances"), and shall make such Other Servicing Advances in a
timely fashion
unless otherwise instructed by the Purchaser. The Seller shall be
entitled to
reimbursement for all Servicing Advances from the Purchaser within
15 Business
Days following the Transfer Date.
The Seller shall segregate and hold all funds collected and
received
pursuant to the Mortgage Loans, including Escrow Payments, separate
and apart
from any of their own funds and general assets in one or more
Eligible Accounts.
The Seller shall remit to the Purchaser on each Remittance Date
all
amounts received from any source with respect to the Mortgage
Loans. On or prior
to each Remittance Date the Seller shall deliver to the Purchaser a
remittance
advice in electronic format acceptable to the Purchaser as to the
accompanying
remittance and the period ending on the related Determination Date
and shall
additionally specify the number of days which each Mortgage Loan is
delinquent,
and shall contain an explanation of all Servicing Advances made,
the status of
all Mortgage Loans in foreclosure or otherwise the subject of
litigation, and
the status of all other collection efforts with respect to each
Mortgage Loan.
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SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its
designee,
shall assume all servicing responsibilities related to, and the
Seller shall
cease all servicing responsibilities related to, the related
Mortgage Loans
subject to such Transfer Date. The Transfer Date shall be the date
determined in
accordance with Section 7 herein.
On or prior to the applicable Transfer Date, the Seller shall,
at
its sole cost and expense, take such steps as may be necessary or
appropriate to
effectuate and evidence the transfer of the servicing of the
related Mortgage
Loans to the Purchaser, or its designee, including but not limited
to the
following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor
of
each related Mortgage Loan a letter advising such Mortgagor of the
transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its
designee, in
accordance with the Cranston Gonzales National Affordable Housing
Act of 1990;
provided, however, the content and format of the letter shall have
the prior
approval of the Purchaser. The Seller shall provide the Purchaser
with copies of
all such related notices no later than the Transfer Date.
(b) Notice to Insurance Companies. The Seller shall transmit to
the
applicable insurance companies (including primary mortgage
insurance policy
insurers, if applicable) and/or agents, notification of the
transfer of the
servicing to the Purchaser, or its designee, and instructions to
deliver all
notices, tax bills and insurance statements, as the case may be, to
the
Purchaser from and after the Transfer Date. The Seller shall
provide the
Purchaser with copies of all such notices no later than the
Transfer Date.
(c) Delivery of Servicing Records. The Seller shall forward to
the
Purchaser, or its designee, all servicing records and the Servicing
File in the
Seller's possession relating to each related Mortgage Loan.
(d) Escrow Payments. The Seller shall provide the Purchaser, or
its
designee, with immediately available funds by wire transfer in the
amount of the
net Escrow Payments and suspense balances and all loss draft
balances associated
with the related Mortgage Loans. The Seller shall provide the
Purchaser with an
accounting statement, in electronic format acceptable to the
Purchaser in its
sole discretion, of Escrow Payments and suspense balances and loss
draft
balances sufficient to enable the Purchaser to reconcile the amount
of such
payment with the accounts of the Mortgage Loans. Additionally, the
Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or
prepaid
Mortgage Loan payments and all other similar amounts held by the
Seller.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff
statements
generated by the Seller on the related Mortgage Loans from the
related Cut-off
Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to
the
Transfer Date all payments received by the Seller on each related
Mortgage Loan
shall be properly applied by the Seller to the account of the
particular
Mortgagor.
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(g) Mortgage Payments Received after Transfer Date. The amount
of
any related Monthly Payments received by the Sellers after the
Transfer Date
shall be forwarded to the Purchaser by overnight mail on the
Business Day
following the date of receipt. The Seller shall notify the
Purchaser of the
particulars of the payment, which notification requirement shall be
satisfied if
the Seller forwards with their payment sufficient information to
permit
appropriate processing of the payment by the Purchaser. The Seller
shall assume
full responsibility for the necessary and appropriate legal
application of such
Monthly Payments received by the Seller after the Transfer Date
with respect to
related Mortgage Loans then in foreclosure or bankruptcy; provided,
for purposes
of this Agreement, necessary and appropriate legal application of
such Monthly
Payments shall include, but not be limited to, endorsement of a
Monthly Payment
to the Purchaser with the particulars of the payment such as the
account number,
dollar amount, date received and any special Mortgagor application
instructions
and the Seller shall comply with the foregoing requirements with
respect to all
Monthly Payments received by the Seller after the Transfer
Date.
(h) Misapplied Payments. Misapplied payments shall be processed
as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring
prior to
the applicable Transfer Date and discovered after the Transfer
Date shall
immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the
Transfer
Date
cannot be identified and said misapplied payment has resulted in
a
shortage,
the Seller shall be liable for the amount of such shortage. The
Seller
shall reimburse the Purchaser for the amount of such shortage
within
thirty (30) days after receipt of written demand therefor from
the
Purchaser;
(iv) If a misapplied payment which occurred prior to the
Transfer
Date has
created an improper Purchase Price as the result of an
inaccurate
outstanding principal balance, a check shall be issued to the
party
shorted by
the improper payment application within seven (7) Business Days
after
notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h)
shall
be
accompanied by a statement indicating the corresponding Seller
and/or
the
Purchaser Mortgage Loan identification number and an explanation
of
the
allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records
and
accounts of the Seller with respect to the related Mortgage Loans
shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary
adjustments required by
the Purchaser. Any such monetary adjustments will be transferred
between the
Seller and the Purchaser as appropriate.
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(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A,
1098
or 1041 and K-1 which are required to be filed on or before the
Transfer Date in
relation to the servicing and ownership of the related Mortgage
Loans. The
Seller shall provide copies of such forms to the Purchaser upon
request and
shall reimburse the Purchaser for any costs or penalties incurred
by the
Purchaser due to either Seller's failure to comply with this
paragraph.
SECTION 9. Representations, Warranties and Covenants of the
Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser
that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a Delaware
corporation, validly existing, and in good standing under the laws
of its
jurisdiction of incorporation. The Seller has all licenses
necessary to carry on
its business as now being conducted and is licensed, qualified and
in good
standing in the states where the Mortgaged Property is located if
the laws of
such state require licensing or qualification in order to conduct
business of
the type conducted by the Seller. The Seller has power and
authority to execute
and deliver this Agreement and to perform its obligations
hereunder; the
execution, delivery and performance of this Agreement (including
all instruments
of transfer to be delivered pursuant to this Agreement) by the
Seller and the
consummation of the transactions contemplated hereby have been duly
and validly
authorized; this Agreement has been duly executed and delivered and
constitutes
the valid, legal, binding and enforceable obligation of the Seller,
except as
enforceability may be limited by (i) bankruptcy, insolvency,
liquidation,
receivership, moratorium, reorganization or other similar laws
affecting the
enforcement of the rights of creditors and (ii) general principles
of equity,
whether enforcement is sought in a proceeding in equity or at law.
All requisite
action has been taken by the Seller to make this Agreement valid
and binding
upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this
Agreement from any
court, governmental agency or body, or federal or state regulatory
authority
having jurisdiction over the Seller is required or, if required,
such consent,
approval, authorization or order has been or will, prior to the
related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary
course of
business of the Seller, and the transfer, assignment and conveyance
of the
Mortgage Notes and the Mortgages by the Seller pursuant to this
Agreement are
not subject to the bulk transfer or any similar statutory
provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by
the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation
of the
transactions contemplated hereby, nor the fulfillment of or
compliance with the
terms and conditions of this Agreement, will conflict with or
result in a
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breach of any of the terms, conditions or provisions of the
Seller's charter,
by-laws or other organizational documents 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 result in
the creation or imposition of any lien, charge or encumbrance that
would have an
adverse effect upon any of its properties pursuant to the terms of
any mortgage,
contract, deed of trust or other instrument, or impair the ability
of the
Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage
Loans, or impair the ability of the Purchaser to realize the full
amount of any
insurance benefits accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
or
investigation pending or threatened against the Seller, before any
court,
administrative agency or other tribunal asserting the invalidity of
this
Agreement, seeking to prevent the consummation of any of the
transactions
contemplated by this Agreement or which, either in any one instance
or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Seller, or in any
material impairment of the right or ability of the Seller to carry
on its
business substantially as now conducted, or in any material
liability on the
part of the Seller, or which would draw into question the validity
of this
Agreement or the Mortgage Loans or of any action taken or to be
taken in
connection with the obligations of the Seller contemplated herein,
or which
would be likely to impair materially the ability of the Seller to
perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe,
nor
does it have any reason or cause to believe, that it cannot perform
each and
every covenant contained in this Agreement. The Seller is solvent
and the sale
of the Mortgage Loans will not cause the Seller to become
insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder,
delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate
any
mortgage loan or to deny any mortgage loan application is an
independent
decision based upon the Underwriting Guidelines, and is in no way
made as a
result of Purchaser's decision to purchase, or not to purchase, or
the price
Purchaser may offer to pay for, any such mortgage loan, if
originated;
(h) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws, regulations and executive
orders,
including without limitation the USA Patriot Act of 2001
(collectively, the
"Anti-Money Laundering Laws"); the Seller has established an
anti-money
laundering compliance program as required by the Anti-Money
Laundering Laws, has
conducted (or the originator of the Mortgage Loan has conducted)
the requisite
due diligence in connection with the origination of each Mortgage
Loan required
by the Anti-Money Laundering Laws, and has obtained and will
maintain
information identifying the applicable Mortgagor as required by the
Anti-Money
Laundering Laws. Additionally, no Mortgage Loan is subject to
nullification
pursuant to Executive Order 13224 (the "Executive Order") or the
regulations
promulgated by the Office of Foreign Assets Control of the United
States
Department of Treasury (the "OFAC Regulations") or in violation of
the Executive
Order or the OFAC Regulations; and no Mortgagor is subject to the
provisions of
such
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Executive Order or the OFAC Regulations nor listed as a "blocked
person" for
purposes of the OFAC Regulations;
(i)
Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and
any later
quarter ended more than 60 days prior to the execution of this
Agreement. All
such financial statements fairly present the pertinent results of
operations and
changes in financial position for each of such periods and the
financial
position at the end of each such period of the Seller and its
subsidiaries and
have been prepared in accordance with generally accepted accounting
principles
of the United States consistently applied throughout the periods
involved,
except as set forth in the notes thereto. There has been no change
in the
business, operations, financial condition, properties or assets of
the Seller
since the date of the Seller's financial statements that would have
a material
adverse effect on its ability to perform its obligations under this
Agreement.
The Seller has completed any forms reasonably requested by the
Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from
among
the outstanding one- to four-family mortgage loans in the Seller's
portfolio at
the related Closing Date as to which the representations and
warranties set
forth in Subsection 9.02 could be made and such selection was not
made in a
manner so as to affect adversely the interests of the
Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the
Assignment of Mortgage and any other documents required to be
delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement,
shall be
delivered to the Custodian all in compliance with the specific
requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the
Seller will be
in possession of a complete Mortgage File in compliance with
Exhibit A hereto,
except for such documents as will be delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description
of the pool
characteristics for the applicable Mortgage Loan Package delivered
pursuant to
Section 11 on the related Closing Date in the form attached as
Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other
document
furnished or to be furnished by or on behalf of the Seller pursuant
to this
Agreement or any Reconstitution Agreement or in connection with the
transactions
contemplated hereby (including any Securitization Transaction or
Whole Loan
Transfer) contains or (up to the applicable Transfer Date) will
contain any
untrue statement of fact or omits or will omit to state a fact
necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker,
investment
banker, agent or other person that may be entitled to any
commission or
compensation in connection with the sale of the Mortgage Loans;
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<PAGE>
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally
accepted
accounting principles the transfer of the Mortgage Loans will be
treated as a
sale on the books and records of the Seller and the Seller has
determined that
the disposition of the Mortgage Loans to the Purchaser pursuant to
this
Agreement will be afforded sale treatment for tax and accounting
purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note,
except for the
Assignments of Mortgage which have been sent for recording, and
upon recordation
the Seller will be the owner of record of each Mortgage and the
indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage
Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect
thereto in
trust only for the purpose of servicing and supervising the
servicing of each
Mortgage Loan; and
(q) Reasonable Purchase Price. The consideration received by
the
Seller upon the sale of the Mortgage Loans under this Agreement
constitutes fair
consideration and reasonably equivalent value for the Mortgage
Loans.
Subsection 9.02 Representations and Warranties Regarding
Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that,
as
to each Mortgage Loan, as of the related Closing Date for such
Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in
the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to
the
related Closing Date for the Mortgage Loan under the terms of the
Mortgage Note,
other than payments not yet 30 days delinquent, have been made and
credited. No
payment required under the Mortgage Loan is 30 days or more
delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent
at any time
since the origination of the Mortgage Loan. The first Monthly
Payment shall be
made with respect to the Mortgage Loan on its related Due Date or
within thirty
(30) days thereafter, all in accordance with the terms of the
related Mortgage
Note;
(c) No Outstanding Charges. There are no defaults in complying
with
the terms of the Mortgage, and all taxes, governmental assessments,
insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents
which previously became due and owing have been paid, or an escrow
of funds has
been established in an amount sufficient to pay for every such item
which
remains unpaid and which has been assessed but is not yet due and
payable. The
Seller has not advanced funds, or induced, solicited or knowingly
received any
advance of funds by a party other than the Mortgagor, directly or
indirectly,
for the payment of any amount required under the Mortgage Loan,
except for
interest accruing from the date of the Mortgage Note or date of
disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which
precedes by
one month the related Due Date of the first installment of
principal and
interest;
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<PAGE>
(d) Original Terms Unmodified. The terms of the Mortgage Note
and
Mortgage have not been impaired, waived, altered or modified in any
respect,
from the date of origination except by a written instrument which
has been
recorded, if necessary to protect the interests of the Purchaser,
and which has
been delivered to the Custodian or to such other Person as the
Purchaser shall
designate in writing, and the terms of which are reflected in the
related
Mortgage Loan Schedule. The substance of any such waiver,
alteration or
modification has been approved by the title insurer, if any, to the
extent
required by the policy, and its terms are reflected on the related
Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole
or in part,
except in connection with an assumption agreement, approved by the
issuer of the
title insurer, to the extent required by the policy, and which
assumption
agreement is part of the Mortgage Loan File delivered to the
Custodian or to
such other Person as the Purchaser shall designate in writing and
the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of
rescission, set-off, counterclaim or defense, including without
limitation the
defense of usury, nor will the operation of any of the terms of the
Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part
and no such
right of rescission, set-off, counterclaim or defense has been
asserted with
respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage,
all
buildings or other improvements upon the Mortgaged Property are
insured by a
generally acceptable insurer against loss by fire, hazards of
extended coverage
and such other hazards as are provided for in the Fannie Mae Guides
or by
Freddie Mac or those of prudent mortgage lenders who originate
mortgage loans
similar to the Mortgage Loans in the jurisdiction where the related
Mortgaged
Property is located. If required by the National Flood Insurance
Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy
meeting the
requirements of the current guidelines of the Federal Insurance
Administration
as in effect which policy conforms to Fannie Mae and Freddie Mac
requirements or
those of prudent mortgage lenders who originate mortgage loans
similar to the
Mortgage Loans in the jurisdiction where the related Mortgaged
Property is
located. All individual insurance policies contain a standard
mortgagee clause
naming the Seller and its successors and assigns as mortgagee, and
all premiums
thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to
maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on
the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and
expense, and to
seek reimbursement therefor from the Mortgagor. Where required by
state law or
regulation, the Mortgagor has been given an opportunity to choose
the carrier of
the required hazard insurance, provided the policy is not a
"master" or
"blanket" hazard insurance policy covering a condominium, or any
hazard
insurance policy covering the common facilities of a planned unit
development.
The hazard insurance policy is the valid and binding obligation of
the insurer,
is in full force and effect, and will be in full force and effect
and inure to
the benefit of the Purchaser upon the consummation of the
transactions
contemplated by this Agreement. Neither the Seller nor the related
Mortgagor has
engaged in any act or omission which would impair the coverage of
any such
policy, the benefits of the endorsement provided for herein, or the
validity and
binding effect of either including, without limitation, no unlawful
fee,
commission, kickback or other unlawful compensation or value of any
kind has
been or will be
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received, retained or realized by any attorney, firm or other
person or entity,
and no such unlawful items have been received, retained or realized
by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any
federal, state or local law including, without limitation,
usury,
truth-in-lending, real estate settlement procedures, consumer
credit protection,
equal credit opportunity, disclosure and all predatory, abusive and
fair lending
laws applicable to the Mortgage Loan, including, without
limitation, any
provisions relating to the Illinois Interest Act and Prepayment
Penalties, have
been complied with, the consummation of the transactions
contemplated hereby
will not involve the violation of any such laws or regulations, and
the Seller
shall maintain in its possession, available for the Purchaser's
inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance
with all such
requirements. This representation and warranty is a Deemed Material
and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in
part, and the
Mortgaged Property has not been released from the lien of the
Mortgage, in whole
or in part, nor has any instrument been executed that would effect
any such
release, cancellation, subordination or rescission. The Seller has
not waived
the performance by the Mortgagor of any action, if the Mortgagor's
failure to
perform such action would cause the Mortgage Loan to be in default,
nor has the
Seller waived any default resulting from any action or inaction by
the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in
which the use
of a leasehold estate for residential properties is a
widely-accepted practice,
that consists of a single parcel of real property with a detached
single family
residence erected thereon, or a two- to four-family dwelling, or an
individual
residential condominium unit in a condominium project, or an
individual unit in
a planned unit development, or an individual unit in a residential
cooperative
housing corporation; provided, however, that any condominium unit,
planned unit
development or residential cooperative housing corporation shall
conform with
the Underwriting Guidelines. No portion of the Mortgaged Property
is used for
commercial purposes, and since the date of origination, no portion
of the
Mortgaged Property has been used for commercial purposes; provided,
that
Mortgaged Properties which contain a home office shall not be
considered as
being used for commercial purposes as long as the Mortgaged
Property has not
been altered for commercial purposes and is not storing any
chemicals or raw
materials other than those commonly used for homeowner repair,
maintenance
and/or household purposes. None of the Mortgaged Properties are
Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting,
enforceable, except only as such enforcement may be limited by
bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the
enforcement of creditors' rights generally and by general
principles of equity
(whether considered in a proceeding or action in equity or at law)
and
perfected, first lien (with respect to a First Lien Loan) or second
lien (with
respect to a Second Lien Loan) on the Mortgaged Property, including
all
buildings and improvements on the Mortgaged Property and all
installations and
mechanical, electrical, plumbing, heating and air conditioning
systems located
in or annexed to such buildings, and all
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additions, alterations and replacements made at any time with
respect to the
foregoing. The lien of the Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date
of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage
Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B)
which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document
related to and
delivered in connection with the Mortgage Loan establishes and
create
