BANK OF AMERICA, NATIONAL ASSOCIATION
Purchaser,
CHASE HOME FINANCE LLC,
Seller
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
Servicer
MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of May 1, 2005
Whole Loan Series 2005 WL-L
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01.
Defined
Terms.............................................................1
ARTICLE II
SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01.
Agreement to
Purchase....................................................12
Section 2.02.
Purchase
Price...........................................................12
Section 2.03.
Servicing of Mortgage
Loans..............................................13
Section 2.04.
Record Title and Possession of Mortgage Files;
Maintenance of Servicing
Files..........................................13
Section 2.05.
Books and
Records........................................................14
Section 2.06.
Transfer of Mortgage
Loans...............................................15
Section 2.07.
Delivery of Mortgage Loan
Documents......................................15
Section 2.08.
Quality Control
Procedures...............................................17
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE;
REVIEW OF MORTGAGE LOANS
Section 3.01.
Representations and Warranties of the
Seller.............................17
Section 3.02.
Representations and Warranties as to Individual Mortgage
Loans...........19
Section 3.03.
Repurchase;
Substitution.................................................29
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01.
Seller to Act as
Servicer................................................31
Section 4.02.
Collection of Mortgage Loan
Payments.....................................34
Section 4.03.
Realization Upon Defaulted Mortgage
Loans................................34
Section 4.04.
Establishment of Custodial Accounts; Deposits in Custodial
Accounts......35
Section 4.05.
Permitted Withdrawals From the Custodial
Account.........................36
Section 4.06.
Establishment of Escrow Accounts; Deposits in Escrow
Accounts............37
Section 4.07.
Permitted Withdrawals From Escrow
Account................................38
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Section 4.08.
Payment of Taxes, Insurance and Other Charges; Maintenance
of Primary Mortgage Insurance Policies; Collections
Thereunder..........39
Section 4.09.
Transfer of
Accounts.....................................................40
Section 4.10.
Maintenance of Hazard
Insurance..........................................40
Section 4.11.
Maintenance of Mortgage Impairment Insurance
Policy......................41
Section 4.12.
Fidelity Bond, Errors and Omissions
Insurance............................41
Section 4.13.
Title, Management and Disposition of REO
Property........................42
Section 4.14.
Notification of Maturity
Date............................................44
Section 4.15.
Reports of Foreclosures and Abandonments of Mortgaged
Property...........44
Section 4.16.
Inspections..............................................................44
Section 4.17.
Restoration of Mortgaged
Property........................................44
Section 4.18.
Security Measures/Compliance with Safeguarding Customer
Information
Requirements................................................45
Section 4.19.
Disaster Recovery/Business Continuity
Plan...............................45
Section 4.20.
Privacy/Confidential
Information.........................................45
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01.
Distributions............................................................46
Section 5.02.
Statements to the
Purchaser..............................................47
Section 5.03.
Monthly Advances by the
Seller...........................................47
Section 5.04.
Liquidation
Reports......................................................48
Section 5.05.
Automated Servicing
Systems..............................................48
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01.
Assumption
Agreements....................................................48
Section 6.02.
Satisfaction of Mortgages and Release of Mortgage
Files..................49
Section 6.03.
Servicing
Compensation...................................................50
Section 6.04.
Annual Statement as to
Compliance........................................50
Section 6.05.
Annual Independent Certified Public
Accountants' Servicing Report.......51
Section 6.06.
Purchaser's Right to Examine Seller
Records..............................52
Section 6.07.
Compliance with REMIC
Provisions.........................................52
ARTICLE VII
SELLER TO COOPERATE
Section 7.01.
Seller Shall Provide Information as Reasonably
Required..................52
Section 7.02.
Cooperation with Third-party Service
Providers...........................53
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ARTICLE VIII
THE SELLER
Section 8.01.
Indemnification; Third Party
Claims......................................54
Section 8.02.
Merger or Consolidation of the
Seller....................................54
Section 8.03.
Limitation on Liability of the Seller and
Others.........................55
Section 8.04.
Seller Not to Assign or
Resign...........................................55
Section 8.05.
No Transfer of
Servicing.................................................55
ARTICLE IX
DEFAULT
Section 9.01.
Events of
Default........................................................56
Section 9.02.
Waiver of
Defaults.......................................................57
ARTICLE X
TERMINATION
Section 10.01.
Termination..............................................................58
Section 10.02.
Termination Without
Cause................................................58
ARTICLE XI
RECONSTITUTION OF MORTGAGE LOANS
Section 11.01.
Reconstitution of Mortgage
Loans.........................................58
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01.
Successor to the
Seller..................................................60
Section 12.02.
Amendment................................................................61
Section 12.03.
Recordation of
Agreement.................................................61
Section 12.04.
Governing
Law............................................................61
Section 12.05.
Notices..................................................................61
Section 12.06.
Severability of
Provisions...............................................62
Section 12.07.
Exhibits.................................................................62
Section 12.08.
General Interpretive
Principles..........................................63
Section 12.09.
Reproduction of
Documents................................................63
Section 12.10.
Confidentiality of
Information...........................................63
Section 12.11.
Recordation of Assignments of
Mortgage...................................64
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Section 12.12.
Assignment by
Purchaser..................................................64
Section 12.13.
No
Partnership...........................................................64
Section 12.14.
Execution; Successors and
Assigns........................................65
Section 12.15.
Entire
Agreement.........................................................65
Section 12.16.
No
Solicitation..........................................................65
Section 12.17.
Further
Agreements.......................................................65
Section 12.18.
Closing..................................................................65
Section 12.19.
Costs....................................................................66
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EXHIBITS
A
Contents of Mortgage File
B
Custodial Account Letter Agreement
C
Escrow Account Letter Agreement
D
Form of Assignment and Assumption
E
Pool Statistics
F
Mortgage Loan Schedule
G
Request for Release of Documents and Receipt
H
Form of SEC Certification
I
Monthly Remittance Advice
J
Servicer Requirements
SCHEDULES
A
Purchase Price and Terms Letter dated as of March 24, 2005.
v
This is a Mortgage Loan Purchase, Warranties and Servicing
Agreement,
dated as May 1, 2005, and is executed between Bank of America,
National
Association, as Purchaser (the "Purchaser"), and Chase Home Finance
LLC, as
Seller (the "Seller"), and JPMorgan Chase Bank, National
Association as Servicer
(the "Servicer").
WITNESSETH :
WHEREAS, the Purchaser has heretofore agreed to purchase from the
Seller
and the Seller has heretofore agreed to sell to the Purchaser
certain Mortgage
Loans, exclusive of the servicing rights associated with such
Mortgage Loans,
pursuant to the terms of a letter agreement dated as of March 24,
2005, by and
between the Seller and the Purchaser (the "Purchase Price and Terms
Letter").
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed
of
trust or other security instrument creating a first lien on a
residential
dwelling located in the jurisdiction indicated on the Mortgage Loan
Schedule,
which is annexed hereto as Exhibit F; and
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself
and the
Mortgage Loans and the management, servicing, transfer and control
of the
Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set
forth, and for other good and valuable consideration, the receipt
and adequacy
of which is hereby acknowledged, the Purchaser and the Seller agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01.
Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the following meanings
specified in
this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those
mortgage servicing practices (including collection procedures) of
prudent
mortgage banking institutions which service mortgage loans of the
same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is
located, that comply with applicable federal, state and local laws
and which are
in accordance with FNMA servicing practices and procedures, for MBS
pool
mortgages, as defined in the FNMA Guides including future updates.
Adjustment Date: As to each ARM Mortgage Loan, the date on which
the
Mortgage Interest Rate is adjusted in accordance with the terms of
the released
Mortgage Note and Mortgage.
Agreement: This Mortgage Loan Purchase, Warranties and Servicing
Agreement
including all exhibits hereto, amendments hereof and supplements
hereto.
ALTA: The American Land Title Association or any successor thereto.
Applicable Requirements: Shall mean and include with respect to the
Mortgage Loans: (i) all contractual obligations of Seller, and the
Originator
and any Prior Servicers including, without limitation, those
contractual
obligations contained in this Agreement, in any agreement with any
insurer or in
the Mortgage Loan Documents; (ii) all applicable federal, state and
local legal
and regulatory requirements (including statutes, rules, regulations
and
ordinances) binding upon Seller, the Originator and any Prior
Servicer; (iii)
all other applicable requirements and guidelines of each
governmental agency,
board, commission, instrumentality and other governmental body or
office having
jurisdiction, including without limitation those of any insurer;
(iv) all other
applicable judicial and administrative judgments, orders,
stipulations, awards,
writs and injunctions; and (v) Accepted Servicing Practices.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (
i) the value thereof as determined by an appraisal made for the
Originator of
the Mortgage Loan at the time of origination of the Mortgage Loan
and (ii) the
purchase price paid for the related Mortgaged Property by the
Mortgagor with the
proceeds of the Mortgage Loan, provided, however, in the case of a
Refinanced
Mortgage Loan, such value of the Mortgaged Property is based solely
upon the
value determined by an appraisal made for the originator of such
Refinanced
Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan.
ARM Mortgage Loan: A Mortgage Loan purchased pursuant to this
Agreement
the Mortgage Interest Rate of which is adjusted from time to time
in accordance
with the terms of the related Mortgage Note.
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 of
record the sale or transfer of the Mortgage Loan.
Assignment and Assumption: An assignment and assumption agreement
in the
form of Exhibit D hereto.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than: (i) a Saturday or Sunday, or (ii)
a
legal holiday in the State of New York, or (iii) a day on which
banks in the
State of New York are authorized or obligated by law or executive
order to be
closed.
Closing Date: May 25, 2005, or such other date as shall be mutually
agreed
upon by the parties hereto.
Code: The Internal Revenue Code of 1986, as amended, or any
successor
statute thereto.
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
2
condemnation, to the extent not required to be released to a
Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Consumer Information: Information including but not limited to all
personal information about the Mortgagors that is supplied to the
Seller on
behalf of the Mortgagors.
Convertible Mortgage Loan: A Mortgage Loan that by its terms and
subject
to certain conditions allows the Mortgagor to convert the
adjustable Mortgage
Interest Rate thereon to a fixed Mortgage Interest Rate.
Co-op Lease: With respect to a Co-op Loan, the lease with respect
to a
dwelling unit occupied by the Mortgagor and relating to the stock
allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a
dwelling unit in a residential cooperative housing corporation and
a collateral
assignment of the related Co-op Lease.
Custodial Account: Each separate demand account or accounts created
and
maintained pursuant to Section 4.04 which shall be entitled "Chase
Home Finance
LLC In Trust For Bank of America, National Association owner of
various whole
loan series P&I" and shall be established in an Eligible
Account, in the name of
the Person that is the Purchaser with respect to the related
Mortgage Loans.
Cut-off Date: May 1, 2005.
Determination Date: 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.
Due Date: The day of the month on which the Monthly Payment is due
on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Remittance Date, the period
commencing on
the second day of the month preceding the month of such Remittance
Date and
ending on the first day of the month of such Remittance Date.
Eligible Account: An account established and maintained: (a) within
FDIC
insured accounts (or other accounts with comparable insurance
coverage
acceptable to the Rating Agencies) created, maintained and
monitored by the
Seller so that all funds deposited therein are fully insured, (b)
with the
corporate trust department of a financial institution assigned one
of the two
highest long-term debt ratings and the highest short term debt
rating of each
Rating Agency, and, if ownership of the Mortgage Loans is evidenced
by mortgaged
backed securities, the equivalent ratings of the Rating Agencies,
and held such
that the rights of the Purchaser and the owner of the Mortgage
Loans shall be
fully protected against the claims of any creditors of the Seller
and of any
creditors or depositors of the institution in which such account is
maintained
and (c) in a separate non-trust account without FDIC or other
insurance in an
Eligible Institution. In the event that a Custodial Account is
established
pursuant to clause (b) or (c) of the preceding sentence, the Seller
shall
provide the Purchaser with written notice on the Business Day
3
following the date on which the applicable institution fails to
meet the
applicable ratings requirements.
Eligible Institution: An institution having (i) the highest
short-term
debt rating, and one of the two highest long-term debt ratings of
each Rating
Agency; (ii) with respect to any Custodial Account, an unsecured
long-term debt
rating of at least one of the two highest unsecured long-term debt
ratings of
the Rating Agencies; or (iii) acceptable as a depository to FNMA or
FHLMC under
their respective Guides.
Equity Take-Out Refinanced Mortgage Loan: A Refinanced Mortgage
Loan the
proceeds of which were in excess of the outstanding principal
balance of the
existing mortgage loan.
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Chase
Home Finance
LLC In Trust For Bank of America, National Association owner of
various whole
loan series and various mortgagors T&I" and shall be
established in an Eligible
Account, in the name of the Person that is the Purchaser with
respect to the
related Mortgage Loans.
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.
Event of Default: Any one of the conditions or circumstances
enumerated in
Section 9.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, commonly
referred to as
Freddie Mac, or any successor thereto.
FHLMC Guide: The FHLMC Single Family Seller/Servicer Guide and all
amendments or additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller
pursuant to
Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act
of 1989.
First Remittance Date: June 18, 2005, or if such day is not a
Business
Day, the first Business Day immediately preceding such date.
FNMA: The Federal National Mortgage Association, commonly referred
to as
Fannie Mae, or any successor thereto.
FNMA Guides: The FNMA Sellers' Guide and the FNMA Servicers' Guide
and all
amendments or additions thereto.
4
GAAP: Generally accepted accounting principles, consistently
applied.
Gross Margin: With respect to each ARM Mortgage Loan, the fixed
percentage
amount set forth in each related Mortgage Note and Mortgage which
is added to
the Index in order to determine on each Adjustment Date the related
Mortgage
Interest Rate.
Guidelines: The FNMA Sellers' Guide, the FNMA Servicers' Guide and
the
FHLMC Single Family Seller/Servicer Guide.
HUD: The United States Department of Housing and Urban Development
or any
successor thereto.
Index: With respect to each ARM Mortgage Loan, the index as
provided in
the related Mortgage Note.
Initial Cap Rate: As to each ARM Mortgage loan, the maximum
increase or
decrease in the Mortgage Interest Rate on the first Adjustment Date
as provided
in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Lifetime Rate Cap: As to each ARM Mortgage Loan, the maximum
Mortgage
Interest Rate which shall be as permitted in accordance with the
provisions of
the related Mortgage Note.
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.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio
of the original outstanding principal amount of the Mortgage Loan,
to (i) the
Appraised Value of the Mortgaged Property at origination with
respect to a
Refinanced Mortgage Loan, and (ii) the lesser of the Appraised
Value of the
Mortgaged Property at origination or the purchase price of the
Mortgaged
Property with respect to all other Mortgage Loans.
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.
5
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.
Monthly Advance: The aggregate of the advances made by the Seller
on any
Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment of principal and
interest
on a Mortgage Loan which is payable by a Mortgagor under the
related Mortgage
Note.
Monthly Remittance Advice: The report delivered by the Seller to
the
Purchaser pursuant to Section 5.02 of this Agreement in the form
annexed hereto
as Exhibit I.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan,
the
mortgage, deed of trust or other instrument securing a Mortgage
Note which
creates a first lien on an unsubordinated estate in fee simple in
real property
securing the Mortgage Note. With respect to a Co-op Loan, the
security agreement
creating a security interest in the stock allocated to a dwelling
unit in the
residential cooperative housing corporation that was pledged to
secure such
Co-op Loan and the related Co-op Lease.
Mortgage File: The mortgage documents pertaining to a particular
Mortgage
Loan which are specified in Exhibit A hereto and any additional
documents
required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or
blanket
hazard insurance policy as required by Section 4.11.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual
rate at which interest accrues on such Mortgage Loan in accordance
with the
provisions of the related Mortgage Note, including, but not limited
to, the
limitations on such interest rate imposed with respect to each ARM
Mortgage Loan
by the Initial Rate Cap, the Periodic Rate Cap and the Lifetime
Rate Cap.
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 Mortgage Loan Schedule, which Mortgage Loan
includes
without limitation the Mortgage File, the Monthly Payments,
Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds,
REO Disposition Proceeds, and all other rights, benefits, proceeds
and
obligations arising from or in connection with such Mortgage Loan,
excluding
replaced or repurchased Mortgage Loans.
Mortgage Loan Documents: The documents listed in numbers 1 through
9, 16
and 23 on Exhibit A.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the
annual rate of interest remitted to the Purchaser, which shall be
equal to the
Mortgage Interest Rate minus the Servicing Fee Rate.
6
Mortgage Loan Schedule: The schedule of Mortgage Loans annexed
hereto as
Exhibit F, such schedule 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 Mortgaged Property is owner-occupied,
a second home or an investor property;
(5)
the type of residential property constituting the Mortgaged
Property;
(6)
the original months to maturity or the remaining months to maturity
from the 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;
(7)
the Loan-to-Value Ratio at origination;
(8)
the Mortgage Interest Rate at the time of origination;
(9)
the stated maturity date;
(10)
the amount of the Monthly Payment as of the Cut-off Date;
(11)
the original principal amount of the Mortgage Loan;
(12)
the Mortgage Interest Rate at time of origination;
(13)
the Mortgage Interest Rate as of the related Cut-off Date;
(14)
the Index and payment and interest rate adjustment frequencies;
(15)
with respect to each ARM Mortgage Loan, the initial Adjustment
Date;
(16)
with respect to each ARM Mortgage Loan, the next Adjustment Date;
(17)
with respect to each ARM Mortgage Loan, the Gross Margin;
(18)
with respect to each ARM Mortgage Loan, the minimum Mortgage
Interest Rate under the terms of the Mortgage Note;
(19)
with respect to each ARM Mortgage Loan, the maximum Mortgage
Interest Rate under the terms of the Mortgage Note;
7
(20)
with respect to each ARM Mortgage Loan, the Mortgage Interest Rate
adjustment cap at the initial Interest Rate Adjustment Date;
(21)
with respect to each ARM Mortgage Loan, the Mortgage Interest Rate
adjustment cap at all subsequent Interest Rate Adjustment Dates;
(22)
with respect to each ARM Mortgage Loan, the original principal
amount of Mortgage Loan;
(23)
with respect to each ARM Mortgage Loan, the principal balance of
the
Mortgage Loan as of the opening of business on the related Cut-off
Date, after
deduction of payments of principal due on or before the related
Cut-off Date
whether or not collected;
(24)
the principal balance of the Mortgage Loan as of the opening of
business on the Cut-off Date, after deduction of payments of
principal due on or
before the Cut-off Date whether or not collected;
(25)
a code indicating the purpose of the Mortgage Loan (i.e., purchase,
rate and term refinance, equity take-out refinance);
(26)
a code indicating the documentation style (i.e. full, alternative
or
reduced);
(27)
the number of times during the twelve (12) month period preceding
the Closing Date that any Monthly Payment has been received more
than thirty
(30) days after its Due Date;
(28)
the date on which the first payment is or was due;
(29)
a code indicating whether or not the Mortgage Loan is the subject
of
Primary Mortgage Insurance and, if so, the name of the policy
issuer; and
(30)
the Appraisal Value.
With respect to the Mortgage Loans in the aggregate, the Mortgage
Loan
Schedule shall set forth the following information, as of the
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;
and
(4)
the weighted average maturity of the Mortgage Loans;
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Mortgage Loan that is not a
Co-op
Loan, the underlying real property securing repayment of a Mortgage
Note,
consisting of a single parcel of
8
real estate considered to be real estate under the laws of the
State in which
such real property is located, which may include condominium units
and planned
unit developments, improved by a residential dwelling; except that
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 of
the Mortgagor, the term of which is equal to or longer than the
term of the
Mortgage. With respect to a Co-op Loan, the stock allocated to a
dwelling unit
in the residential cooperative housing corporation that was pledged
to secure
such Co-op Loan and the related Co-op Lease.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization: A gradual increase in the mortgage debt that
occurs
when the monthly fixed installment is not sufficient for full
application to
both principal and interest. The interest shortage is added to the
unpaid
principal balance to create "negative" amortization.
OCC: Office of the Comptroller of the Currency, its successors and
assigns.
Officers' Certificate: A certificate signed by the Chairman of the
Board,
the Vice Chairman of the Board, the President, a Senior Vice
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.
Opinion of Counsel: A written Opinion of Counsel, who may be an
employee
of the party on behalf of whom the opinion is being given,
reasonably acceptable
to the Purchaser, provided that any Opinion of Counsel relating to
(a)
qualification of the Mortgage Loans in a REMIC or (b) compliance
with the REMIC
Provisions, must be an Opinion of Counsel who (i) is in fact
independent of the
Servicer of the Mortgage Loans, (ii) does not have any material
direct or
indirect financial interest in the Servicer of the Mortgage Loans
or in an
affiliate of either and (iii) is not connected with the Servicer of
the Mortgage
Loans as an officer, employee, director or person performing
similar functions.
The cost of the preparation and delivery of any such independent
opinion
requested by the Trustee shall be an expense of the Trust Fund
unless Purchaser
decides, in its own discretion, to bear such expense for the Trust
Fund, in
which case any such cost will be borne by Purchaser.
Originator: With respect to any Mortgage Loan, the entity(ies) that
(i)
took the Mortgagor's loan application (ii) processed the
Mortgagor's loan
application, or (iii) closed and/or funded the Mortgagor's Mortgage
Loan.
Pass-Through Transfer: Either (i) a Securitization or (ii) a
synthetic
securitization in which some or all of the Mortgage Loans are
included as part
of the reference portfolio relating to such securitization.
Payment Adjustment Date: As to each ARM Mortgage Loan, the date on
which
an adjustment to the Monthly Payment on a Mortgage Note becomes
effective.
Periodic Rate Cap: As to each Mortgage Loan, the maximum increase
or
decrease in the Mortgage Interest Rate, or any Adjustment Date as
provided in
the related Mortgage Note.
9
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan
that is subject to a voluntary (not including discounted payoffs)
Principal
Prepayment in full or in part during the related Principal
Prepayment Period,
which Principal Prepayment was applied to such Mortgage Loan prior
to such
Mortgage Loan's Due Date in such related Principal Prepayment
Period, the amount
of interest (net of the related Servicing Fee for Principal
Prepayments in full
only) that would have accrued on the amount of such Principal
Prepayment during
the period commencing on the date as of which such Principal
Prepayment was
applied to such Mortgage Loan and ending on the last day of the
Principal
Prepayment Period.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
insurance represented to be in effect pursuant to the Mortgage Loan
Schedule, or
any replacement policy therefor obtained by the Seller pursuant to
Section 4.08
in each case, in a form acceptable to FNMA or FHLMC and issued by a
Qualified
Insurer.
Prime Rate: The prime rate announced to be in effect from time to
time as
published as the average rate in The Wall Street Journal (Northeast
Edition).
Principal Prepayment: Any payment or other recovery of principal on
a
Mortgage Loan full or partial 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.
Principal Prepayment Period: With respect to any Remittance Date,
the
calendar month immediately preceding the month in which the related
Remittance
Date occurs.
Prior Servicer: Any Person that was a servicer of any Mortgage Loan
before
Seller became the Servicer of the Mortgage Loan, if applicable.
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals to this
Agreement.
Purchaser: Bank of America, National Association, its successors in
interest and assigns.
Qualified Appraiser: An appraiser, duly appointed by the Seller,
who had
no interest, direct or indirect in the Mortgaged Property or in any
loan made on
the security thereof, and whose compensation is not affected by the
approval or
disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by
such appraiser both satisfy the requirements of Title XI of FIRREA
and the
regulations promulgated thereunder, all as in effect on the date
the Mortgage
Loan was originated.
10
Qualified Insurer: An insurance company duly qualified as such
under the
laws of the states in which the Mortgaged Properties are located,
duly
authorized and licensed in such states to transact the applicable
insurance
business and to write the insurance provided, approved as an
insurer by FNMA and
FHLMC.
Rating Agencies: Standard & Poor's Ratings Services, a division
of The
McGraw-Hill Companies Inc., Moody's Investors Service, Inc. or, in
the event
that some or all ownership of the Mortgage Loans is evidenced by
mortgage-backed
securities, the nationally recognized rating agencies issuing
ratings with
respect to such securities, if any.
Reconstitution Agreement: Any of the agreement or agreements
entered into
by the Purchaser and/or certain third parties, and if necessary the
Seller, on
the Reconstitution Date or Dates with respect to any or all of the
Mortgage
Loans conveyed hereunder, in connection with a Whole Loan Transfer,
Agency
Transfer, or a Pass-Through Transfer as set forth in Section 11.01.
Reconstitution Date: The date or dates on which any or all of the
Mortgage
Loans purchased pursuant to this Agreement shall be reconstituted
as part of a
Whole Loan Transfer, Agency Transfer, or a Pass-Through Transfer
pursuant to
Section 11.01.
Refinanced Mortgage Loan: A Mortgage Loan which was made to a
Mortgagor
who owned the Mortgaged Property prior to the origination of such
Mortgage Loan
and the proceeds of which were used in whole or part to satisfy an
existing
mortgage.
Regulation X: HUD regulations implementing RESPA.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in 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
affect from
time to time.
Remittance Date: 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.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: Amounts received by the Seller in
connection
with a related REO Disposition.
REO Property: A Mortgaged Property acquired by the Seller on behalf
of the
Purchaser as described in Section 4.13.
Repurchase Price: During the first 365 days after the Closing Date,
the
Repurchase Price shall be a price equal to the Purchase Price
Percentage, as
defined in the Purchase Price and
11
Terms Letter, times the outstanding principal balance of such
Mortgage Loan,
plus accrued interest at the annual rate of interest borne on the
Mortgage Note,
less the Servicing Fee. Beginning 365 days following the Closing
Date, the
Repurchase Price shall be a price equal to par (100%) times the
outstanding
principal balance of such Mortgage Loan, plus accrued interest at
the annual
rate of interest borne on the Mortgage Note.
RESPA: The Real Estate Settlement Procedures Act, as amended.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Sarbanes Certifying Party: A Person who provides certification
required
under the Sarbanes-Oxley Act of 2002 in connection with a
Securitization or
other securitization transaction.
Securitization: The transfer of the Mortgage Loans to a trust
formed as
part of a publicly issued and/or privately placed, rated
securitization,
including the issuance of the related securities.
Seller's Officer's Certificate: A certificate signed by the
Chairman of
the Board, President, any Vice President or Treasurer of Seller
which shall (i)
identify the recorded document, (ii) state that the recorded
document has not
been delivered to the Purchaser, or its designee, due solely to a
delay by the
public recording office, and (iii) specify the date the Seller
expects that the
applicable recorded document will be delivered to the Purchaser or
its designee.
Servicer: JPMorgan Chase Bank, National Association, its successors
and
assigns.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees
and
disbursements) incurred in the performance by the Seller of its
servicing
obligations, including, but not limited to, the cost of (a) the
preservation,
restoration and protection of the Mortgaged Property, (b) any
enforcement,
administrative or judicial proceedings, or any legal work or advice
specifically
related to servicing the Mortgage Loans, including but not limited
to,
foreclosures, bankruptcies, condemnations, drug seizures,
elections,
foreclosures by subordinate or superior lienholders, and other
legal actions
incidental to the servicing of the Mortgage Loans (provided that
such expenses
are reasonable and that the Seller specifies the Mortgage Loan(s)
to which such
expenses relate, and provided further that any such enforcement,
administrative
or judicial proceeding does not arise out of a breach of any
representation,
warranty or covenant of the Seller hereunder), (c) the management
and
liquidation of the Mortgaged Property if the Mortgaged Property is
acquired in
full or partial satisfaction of the Mortgage, (d) taxes,
assessments, water
rates, sewer rates and other charges which are or may become a lien
upon the
Mortgaged Property, and Primary Mortgage Insurance Policy premiums
and fire and
hazard insurance coverage, (e) any expenses reasonably sustained by
the Seller,
as servicer, with respect to the liquidation of the Mortgaged
Property in
accordance with the terms of this Agreement and (f) compliance with
the
obligations under Section 4.08.
12
Servicing Fee: With respect to each Mortgage Loan, the amount of
the
annual fee the Purchaser shall pay to the Seller, which shall, for
a period of
one full month, be equal to one-twelfth of the product of (a) the
Servicing Fee
Rate and (b) the outstanding principal balance of such Mortgage
Loan. Such fee
shall be payable monthly, computed on the basis of the same
principal amount and
period respecting which any related interest payment on a Mortgage
Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee
is limited
to, and the Servicing Fee is payable solely from, the interest
portion
(including recoveries with respect to interest from Liquidation
Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected
by the
Seller, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per
annum equal
to 25 basis points (0.25%).
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 its designee and copies of
the Mortgage
Loan Documents listed in Exhibit A, the originals of which are
delivered to the
Purchaser or its designee pursuant to Section 2.04.
Servicing Officer: Any officer of the Seller involved in, or
responsible
for, the administration and servicing of the Mortgage Loans whose
name appears
on a list of servicing officers furnished by the Seller to the
Purchaser upon
request, as such list may from time to time be amended.
Servicing Rights: Means the obligations to collect the payments for
the
reduction of principal and application of interest, pay taxes and
insurance,
remit collected payments, provide foreclosure services, provide
full escrow
administration and otherwise administer the Mortgage Loans in
accordance with
Applicable Requirements, together with the right to receive the
servicing fee
income and any ancillary income arising from or connected to the
Mortgage Loans.
Servicing Rights shall include retention of the related escrow or
impound
accounts created and maintained by Seller with respect to the
Mortgage Loans for
the deposit and retention of interest and principal, taxes,
assessments or
grounds rents, hazard and mortgage insurance and other related
escrow or
custodial items.
Stated Principal Balance: As to each Mortgage Loan as of any date
of
determination, (i) the principal balance of such Mortgage Loan at
the Cut-off
Date after giving effect to payments of principal due on or before
such date,
whether or not received, minus (ii) all amounts previously
distributed to the
Purchaser with respect to the Mortgage Loan representing payments
or recoveries
of principal or advances in lieu thereof.
Subservicer: Any subservicer which is subservicing the Mortgage
Loans
pursuant to a Subservicing Agreement. Any Subservicer shall meet
the
qualifications set forth in Section 4.01.
Subservicing Agreement: An agreement between the Seller and a
Subservicer
for the servicing of the Mortgage Loans.
13
Trust: Any trust identified by Purchaser into which Mortgage Loans
have
been placed as part of a reconstitution.
Trust Agreement: The agreement pursuant to which the Trust is
created.
Trustee: Any trustee identified by Purchaser in connection with any
Trust.
Trust Fund: Any trust fund identified by the Trustee with respect
to a
Trust.
ARTICLE II
SERVICING OF MORTGAGE LOANS;
RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01.
Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to purchase the
Mortgage Loans, exclusive of the Servicing Rights associated
therewith, having
an aggregate principal balance on the Cut-off Date in an amount as
set forth in
the Mortgage Loan Schedule. The Seller shall deliver the Mortgage
Loan Schedule
for the Mortgage Loans to be purchased on the Closing Date to the
Purchaser at
least two (2) Business Days prior to the Closing Date.
Section 2.02.
Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage
of par
as stated in the Purchase Price and Terms Letter (subject to
adjustment as
provided therein), multiplied by the aggregate principal balance,
as of the
Cut-off Date, of the Mortgage Loans listed on the attached Mortgage
Loan
Schedule, after application of scheduled payments of principal due
on or before
the Cut-off Date whether or not collected. The initial principal
amount of the
Mortgage Loans shall be the aggregate principal balance of the
Mortgage Loans,
so computed as of the Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser
shall
pay to the Seller, at closing, accrued interest on the Stated
Principal Balance
of the Mortgage Loans as of the Cut-off Date at the weighted
average Mortgage
Loan Remittance Rate of the Mortgage Loans.
The Purchase Price plus accrued interest as set forth in the
preceding
paragraph shall be paid on the Closing Date by wire transfer of
immediately
available funds.
The Purchaser shall be entitled to (1) all scheduled principal due
after
the Cut-off Date, (2) all other recoveries of principal collected
on or after
the Cut-off Date (provided, however, that all scheduled payments of
principal
due on or before the Cut-off Date and collected by the Seller or
any successor
servicer after the Cut-off Date shall belong to the Seller), and
(3) all
payments of interest on the Mortgage Loans net of applicable
Servicing Fees
(minus that portion of any such payment which is allocable to the
period prior
to the Cut-off Date). The outstanding
14
principal balance of each Mortgage Loan as of the Cut-off Date is
determined
after application of payments of principal due on or before the
Cut-off Date
whether or not collected, together with any unscheduled Principal
Prepayments
collected prior to the Cut-off Date; provided, however, that
payments of
scheduled principal and interest prepaid for a Due Date beyond the
Cut-off Date
shall not be applied to the principal balance as of the Cut-off
Date. Such
prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit
any such prepaid amounts into the Custodial Account, which account
is
established for the benefit of the Purchaser for subsequent
remittance by the
Seller to the Purchaser.
If, subsequent to the Closing Date, the amount on which the
Purchase Price
with respect to a Mortgage Loan was based is found to be in error,
or if, for
any other reason, the Purchase Price or such other amounts are
found to be in
error, within ten (10) Business Days of the receipt of information
sufficient to
provide notice that payment is due the party benefiting from the
error shall pay
an amount sufficient to correct and reconcile the Purchase Price
plus interest
thereon at an agreed upon market rate or such other amounts and
shall provide a
reconciliation statement and such other documentation sufficient
reasonably to
satisfy the other party concerning the accuracy of such
reconciliation.
Section 2.03.
Servicing of Mortgage Loans.
Simultaneously with the execution and delivery of this Agreement,
the
Seller does hereby agree to service the Mortgage Loans listed on
the Mortgage
Loan Schedule subject to the terms of this Agreement. The rights of
the
Purchaser to receive payments with respect to the related Mortgage
Loans shall
be as set forth in this Agreement.
Section 2.04.
Record Title and Possession of Mortgage Files; Maintenance
of Servicing Files.
As of the Closing Date, the Seller shall sell, transfer, assign,
set over
and convey to the Purchaser, without recourse, and the Seller
hereby
acknowledges that as of the Closing Date the Purchaser shall have,
subject to
the terms of this Agreement, all of the right, title and interest
of the Seller
in and to the Mortgage Loans. The delivery of the Mortgage Files on
the Closing
Date shall be at the expense of the Seller. The Seller shall
maintain a
Servicing File consisting of a copy of the contents of each
Mortgage File and
the originals of the documents in each Mortgage File not delivered
to the
Purchaser or its designee. The Servicing File shall contain all
documents
necessary to service the Mortgage Loans. The possession of each
Servicing File
by the Seller is at the will of the Purchaser, for the sole purpose
of servicing
the related Mortgage Loan, and such retention and possession by the
Seller is in
a custodial capacity only. From the Closing Date, the ownership of
each Mortgage
Loan, including the Mortgage Note, the Mortgage, the contents of
the related
Mortgage File and all rights, benefits, proceeds and obligations
arising
therefrom or in connection therewith, shall be vested in the
Purchaser. All
rights arising out of the Mortgage Loans including, but not limited
to, all
funds received on or in connection with the Mortgage Loans and all
records or
documents with respect to the Mortgage Loans prepared by or which
come into the
possession of the Seller shall be received and held by the Seller
in trust for
the benefit of the Purchaser as the owner of the Mortgage Loans.
Any portion of
the Mortgage Files retained by the Seller shall be appropriately
identified in
the Seller's computer system to clearly
15
reflect the ownership of the Mortgage Loans by the Purchaser. The
Seller shall
release its custody of the contents of the Mortgage Files only in
accordance
with written instructions of the Purchaser, except when such
release is required
as incidental to the Seller's servicing of the Mortgage Loans or is
in
connection with a repurchase of any Mortgage Loan or Loans with
respect thereto
pursuant to this Agreement, such written instructions shall not be
required.
Section 2.05.
Books and Records.
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. The
Seller shall be responsible for maintaining, and shall maintain, a
complete set
of books and records for the Mortgage Loans which shall be
appropriately
identified in the Seller's computer system to clearly reflect the
ownership of
the Mortgage Loan by the Purchaser. In particular, the Seller shall
maintain in
its possession, available for inspection by the Purchaser, or its
designee and
shall deliver to the Purchaser upon demand, evidence of compliance
with all
federal, state and local laws, rules and regulations, and
requirements of FNMA
or FHLMC, as applicable, including but not limited to documentation
as to the
method used in determining the applicability of the provisions of
the Flood
Disaster Protection Act of 1973, as amended, to the Mortgaged
Property,
documentation evidencing insurance coverage and eligibility of any
condominium
project for approval by Seller and periodic inspection reports as
required by
Section 4.13. 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 or such
other reliable means of recreating original documents, including
but not limited
to, optical imagery techniques so long as the Seller complies with
the
requirements of the FNMA Guides.
The Seller shall maintain with respect to each Mortgage Loan and
shall
make available for inspection by any Purchaser or its designee the
related
Servicing File during the time the Purchaser retains ownership of a
Mortgage
Loan and thereafter in accordance with applicable laws and
regulations.
In addition to the foregoing, Seller shall provide to any
supervisory
agents or examiners that regulate Purchaser, including but not
limited to, the
Office of the Comptroller of the Currency ("OCC") and other
comparable
regulatory authorities supervising the Purchaser and other similar
entities,
access, during normal business hours, upon reasonable advance
notice to Seller
and without charge to Purchaser or such supervisory agents or
examiners, to any
documentation regarding the Mortgage Loans that may be required by
any
applicable regulator. It is anticipated that Purchaser will
reimburse Seller for
its out-of-pocket expenses incurred in complying with this
requirement.
Section 2.06.
Transfer of Mortgage Loans.
The Seller shall keep at its servicing office books and records in
which,
subject to such reasonable regulations as it may prescribe, the
Seller shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan
may be made
unless such transfer is in compliance with the terms hereof. For
the purposes of
this Agreement, the Seller shall be under no obligation to deal
with any person
with respect to this Agreement or any Mortgage Loan unless a notice
of the
transfer of
16
such Mortgage Loan has been delivered to the Seller in accordance
with this
Section 2.06 and the books and records of the Seller show such
person as the
owner of the Mortgage Loan. The Purchaser may, subject to the terms
of this
Agreement, sell and transfer one or more of the Mortgage Loans,
provided,
however, that (i) the transferee will not be deemed to be a
Purchaser hereunder
binding upon the Seller unless such transferee shall agree in
writing to be
bound by the terms of this Agreement and an original counterpart of
the
instrument of transfer and an Assignment and Assumption of this
Agreement
substantially in the form of Exhibit D hereto executed by the
transferee shall
have been delivered to the Seller, (ii) in no event shall there be
more than
four (4) Persons at any given time having the status of "Purchaser"
under each
of the Reconstitution Agreements, as more particularly described in
Sections
11.01 and 12.12 hereunder, and (iii) if the Seller is to service
pursuant to a
Reconstitution Agreement , such agreement will not contain any
greater
obligations on the part of the Seller than are contained in this
Agreement. The
Purchaser also shall advise the Seller of the transfer. Upon
receipt of notice
of the transfer, the Seller shall mark its books and records to
reflect the
ownership of the Mortgage Loans of such assignee, and the previous
Purchaser
shall be released from its obligations hereunder with respect to
the Mortgage
Loans sold or transferred.
Section 2.07.
Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Purchaser or its
designee,
Wachovia Bank, National Association, the Mortgage Loan Documents.
The Mortgage
Loan Documents shall be delivered by the Seller to the Purchaser or
its
designee, Wachovia Bank, National Association, at 4527 Metropolitan
Court, Suite
C, Frederick, Maryland 21704, Attention: Ron Fisher, at least five
(5) Business
Days prior to the Closing Date pursuant to a bailee letter
agreement. All other
documents in Exhibit A hereto, together with all other documents
executed in
connection with the Mortgage Loan that Seller may have in its
possession, shall
be retained by the Servicer in trust for the Purchaser. If the
Seller cannot
deliver the original recorded Mortgage Loan Documents or the
original policy of
title insurance, including riders and endorsements thereto, on the
Closing Date,
the Seller shall, promptly upon receipt thereof and in any case not
later than
180 days from the Closing Date, deliver such original documents,
including
original recorded documents, to the Purchaser or its designee
(unless the Seller
is delayed in making such delivery by reason of the fact that such
documents
shall not have been returned by the appropriate recording office).
If delivery
is not completed within 180 days of the Closing Date solely due to
delays in
making such delivery by reason of the fact that such documents
shall not have
been returned by the appropriate recording office, Seller shall
deliver a copy
of such document, if not previously delivered, and a Seller's
Officer's
Certificate to Purchaser, or its designee. In the event that
documents have not
been received by the date specified in the Seller's Officer's
Certificate, a
subsequent Seller's Officer's Certificate shall be delivered by
such date
specified in the prior Seller's Officer's Certificate, stating a
revised date
for receipt of documentation. The procedure shall be repeated until
the
documents have been received and delivered. The Seller shall
continue to use
commercially reasonable best efforts to effect delivery within 270
days of the
Closing Date.
The Seller shall pay all initial recording fees, for the
Assignments of
Mortgage or Form UCC-3's for Co-op Loans and any other fees in
connection with
the transfer of all original documents to the Purchaser or its
designee. Seller
shall prepare, in recordable form, all
17
Assignments of Mortgage or Form UCC-3's for Co-op Loans necessary
to assign the
Mortgage Loans to Purchaser, or its designee. Seller shall be
responsible for
recording the Assignments of Mortgage or Form UCC-3's for Co-op
Loans.
Seller shall provide a copy of the title insurance policy to
Purchaser or
its designee within ninety (90) days of the receipt of the recorded
documents
(required for issuance of such policy) from the applicable
recording office.
Any review by the Purchaser, or its designee, of the Mortgage Files
shall
in no way alter or reduce the Seller's obligations hereunder.
If the Purchaser or its designee discovers any defect with respect
to a
Mortgage File, the Purchaser shall, or shall cause its designee to,
give written
specification of such defect to the Seller in the exception report
or the
certification delivered pursuant to this Section 2.07, and the
Seller shall cure
or repurchase such Mortgage Loan in accordance with Section 3.03.
The Seller shall forward to the Purchaser, or its designee,
original
documents evidencing an assumption, modification, consolidation or
extension of
any Mortgage Loan entered into in accordance with Section 4.01 or
6.01 in
accordance with the FNMA Guides; provided, however, that the Seller
shall
provide the Purchaser, or its designee, with a certified true copy
of any such
document submitted for recordation within one week of its
execution, and shall
provide the original of any document submitted for recordation or a
copy of such
document certified by the appropriate public recording office to be
a true and
complete copy of the original within sixty (60) days of its
submission for
recordation.
From time to time, in order to fulfill its obligations hereunder,
the
Seller may have a need for Mortgage Loan Documents to be released
by Purchaser,
or its designee. Purchaser shall, or shall cause its designee, upon
the written
request of the Seller, within ten (10) Business Days, deliver to
the Seller, any
requested documentation previously delivered to Purchaser or its
designee as
part of the Mortgage File, provided that such documentation is
promptly returned
to Purchaser, or its designee, when the Seller no longer requires
possession of
the document, and provided that during the time that any such
documentation is
held by the Seller, such possession is in trust for the benefit of
Purchaser.
Seller shall indemnify Purchaser, and its designee, from and
against any and all
losses, claims, damages, penalties, fines, forfeitures, costs and
expenses
(including court costs and reasonable attorney's fees) resulting
from or related
to the loss, damage, or misplacement of any documentation delivered
to Seller
pursuant to this paragraph.
Any and all documents required to be delivered pursuant to this
Section
2.07 other than those Mortgage Loan Documents required to be
delivered within
five (5) Business Days prior to the Closing Date pursuant to a
bailee letter
agreement shall be delivered to the following addressee: Wachovia
Bank, National
Association, 4527 Metropolitan Court, Suite C, Frederick, Maryland
21704,
Attention: Ron Fisher.
18
Section 2.08.
Quality Control Procedures.
The Seller must 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 must be
capable of evaluating and monitoring the overall quality of its
loan production
and servicing activities. The program is to ensure that the
Mortgage Loans are
originated and serviced in accordance with prudent mortgage banking
practices
and accounting principles; guard against dishonest, fraudulent, or
negligent
acts; and guard against errors and omissions by officers,
employees, or other
authorized persons.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SELLER; REPURCHASE; REVIEW OF MORTGAGE LOANS
Section 3.01.
Representations and Warranties of the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of
the Closing Date or as of such date specifically provided herein:
(a)
The Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has
all licenses necessary to carry out its business as now being
conducted, and is
licensed and qualified to transact business in and is in good
standing under the
laws of each state in which any Mortgaged Property is located or is
otherwise
exempt under applicable law from such licensing or qualification or
is otherwise
not required under applicable law to effect such licensing or
qualification and
no demand for such licensing or qualification has been made upon
such Seller by
any such state, and in any event such Seller is in compliance with
the laws of
any such state to the extent necessary to ensure the enforceability
of each
Mortgage Loan and the servicing of the Mortgage Loans in accordance
with the
terms of this Agreement;
(b)
The Seller has the full power and authority and legal right to
hold,
transfer and convey each Mortgage Loan, to sell each Mortgage Loan
and to
execute, deliver and perform, and to enter into and consummate all
transactions
contemplated by this Agreement and to conduct its business as
presently
conducted, has duly authorized the execution, delivery and
performance of this
Agreement and any agreements contemplated hereby, has duly executed
and
delivered this Agreement, and any agreements contemplated hereby,
and this
Agreement and each Assignment of Mortgage to the Purchaser and any
agreements
contemplated hereby, constitutes a legal, valid and binding
obligation of the
Seller, enforceable against it in accordance with its terms, and
all requisite
corporate action has been taken by the Seller to make this
Agreement and all
agreements contemplated hereby valid and binding upon the Seller in
accordance
with their terms;
(c)
None of the execution and delivery of this Agreement, the
origination of the Mortgage Loans by the Seller, the sale of the
Mortgage Loans
to the Purchaser, the consummation of the transactions contemplated
hereby, or
the fulfillment of or compliance with
19
the terms and conditions of this Agreement will conflict with any
of the terms,
conditions or provisions of the Seller's charter or by-laws or
materially
conflict with or result in a material breach of any of the terms,
conditions or
provisions of 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
material
violation of any law, rule, regulation, order, judgment or decree
to which the
Seller or its property is subject or impair the ability of the
Purchaser to
realize on the Mortgage Loans or impair the value of the Mortgage
Loans;
(d)
Each Mortgage Note, each Mortgage, each Assignment of Mortgage and
any other documents required pursuant to this Agreement to be
delivered to the
Purchaser or its designee, or its assignee for each Mortgage Loan,
have been, on
or before the Closing Date, delivered to the Purchaser or its
designee, or its
assignee;
(e)
There is no litigation, suit, proceeding or investigation pending
or
threatened, or any order or decree outstanding, with respect to the
Seller which
is reasonably likely to have a material adverse effect on the sale
or servicing
of the Mortgage Loans, the execution, delivery, performance or
enforceability of
this Agreement, or which is reasonably likely to have a material
adverse effect
on the financial condition of the Seller;
(f)
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Seller of or compliance by the Seller with this
Agreement,
except for consents, approvals, authorizations and orders which
have been
obtained;
(g)
The consummation of the transactions contemplated by this Agreement
is in the ordinary course of business of the Seller, and the
transfer,
assignment and conveyance of the Mortgage Notes and the Mortgages
by the Seller
pursuant to this Agreement are not subject to bulk transfer or any
similar
statutory provisions in effect in any applicable jurisdiction;
(h)
The Seller is a member of MERS in good standing;
(i)
The Seller used no adverse selection procedures in selecting from
among the outstanding first lien residential mortgage loans owned
by it which
were available for inclusion in the sale to Purchaser;
(j)
The Seller will treat the sale of the Mortgage Loans to the
Purchaser as a sale for reporting and accounting purposes and, to
the extent
appropriate, for federal income tax purposes;
(k)
The Seller is an approved seller/servicer of residential mortgage
loans for FNMA/FHLMC and HUD, with such facilities, procedures and
personnel
necessary for the sound servicing of such mortgage loans. The
Seller is duly
qualified, licensed, registered and otherwise authorized under all
applicable
federal, state and local laws, and regulations, if applicable,
meets the minimum
capital requirements set forth by the OCC, and is in good standing
to sell
mortgage loans to and service mortgage loans for FNMA/FHLMC and no
event
20
has occurred which would make Seller unable to comply with
eligibility
requirements or which would require notification to either FNMA or
FHLMC;
(l)
The Seller does not believe, nor does it have any cause or reason
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 the
Seller's
creditors;
(m)
No statement, tape, diskette, form, report or other document
prepared by, or on behalf of, Seller pursuant to this Agreement or
in connection
with the transactions contemplated hereby, contains or will contain
any
statement that is or will be inaccurate or misleading in any
material respect;
(n)
The Seller acknowledges and agrees that the Servicing Fee
represents
reasonable compensation for performing such services and that the
entire
Servicing Fee shall be treated by the Seller, for accounting and
tax purposes,
as compensation for the servicing and administration of the
Mortgage Loans
pursuant to this Agreement; in the opinion of Seller, the
consideration received
by Seller upon the sale of the Mortgage Loans to Purchaser under
this Agreement
constitutes fair consideration for the Mortgage Loans under current
market
conditions;
(o)
If requested by the Purchaser, the Seller has delivered to the
Purchaser financial statements as to its last two complete fiscal
years. 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 GAAP 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; and
(p)
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.
Section 3.02.
Representations and Warranties as to Individual Mortgage
Loans.
The Seller hereby represents and warrants to the Purchaser, as to
each
Mortgage Loan, as of the Closing Date (unless another date is
specified in the
body of the representation and warranty) as follows:
(a)
The information set forth in the Mortgage Loan Schedule and in the
electronic data file provided to the Purchaser by the Seller on or
about March
28, 2005, with respect to the Mortgage Loans is complete, true and
correct in
all material respects as of the Cut-Off Date;
(b)
With respect to a Mortgage Loan that is not a Co-op Loan, the
Mortgage creates a valid, subsisting and enforceable first lien or
a first
priority ownership interest in an estate in fee
21
simple in real property securing the related Mortgage Note. With
respect to a
Mortgage Loan that is a Co-op Loan, the Mortgage creates a first
lien or a first
priority ownership interest in the stock ownership associated with
the
cooperative unit securing the related Mortgage Note;
(c)
All payments due prior to the Cut-off Date for such Mortgage Loan
have been made and credited as of the Closing Date; there are no
defaults under
the terms of the Mortgage Loan; the Seller has not advanced funds,
or induced,
solicited or knowingly received any advance of funds from a party
other than the
Mortgagor, directly or indirectly, for the payment of any amount
required by the
Mortgage Loan; and there has been no more than one delinquency
during the
preceding twelve-month period, and such delinquency did not last
more than
thirty (30) days;
(d)
There are no defaults by Seller 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 escrow funds have been
established in an
amount sufficient to pay for every such escrowed item which remains
unpaid and
which has been assessed but is not yet due and payable;
(e)
The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by
written
instruments which have been recorded to the extent any such
recordation is
required by law, or, necessary to protect the interest of the
Purchaser. No
instrument of waiver, alteration or modification has been executed,
and no
Mortgagor has been released, in whole or in part, from the terms
thereof except
in connection with an assumption agreement and which assumption
agreement is
part of the Mortgage File and the terms of which are reflected in
the Mortgage
Loan Schedule; the substance of any such waiver, alteration or
modification has
been approved by the issuer of any related Primary Mortgage
Insurance Policy and
title insurance policy, to the extent required by the related
policies;
(f)
The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the
defense of usury, nor will the operation of any of the terms of the
Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render the
Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any
right of rescission, set-off, counterclaim or defense, including
the defense of
usury, and no such right of rescission, set-off, counterclaim or
defense has
been asserted with respect thereto; and the Mortgagor was not a
debtor in any
state or federal bankruptcy or insolvency proceeding at the time
the Mortgage
Loan was originated;
(g)
All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the
FNMA Guides,
against loss by fire, hazards of extended coverage and such other
hazards as are
provided for in the FNMA Guides or by FHLMC, as well as all
additional
requirements set forth in Section 4.10 of this Agreement. All such
standard
hazard policies are in full force and effect and on the date of
origination
contained a standard mortgagee clause naming the Seller and its
successors in
interest and assigns as mortgagee loss payee and such clause is
still in effect
and all premiums due thereon have been paid. If required by the
Flood Disaster
Protection Act of 1973, as amended, the Mortgage Loan is covered by
a flood
insurance policy meeting the requirements of the current
22
guidelines of the Federal Insurance Administration which policy
conforms to FNMA
and FHLMC requirements, as well as all additional requirements set
forth in
Section 4.10 of this Agreement. Such policy was issued by an
insurer acceptable
under FNMA or FHLMC guidelines. The Mortgage obligates the
Mortgagor thereunder
to maintain all such insurance at the Mortgagor's cost and expense,
and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement
therefor from the Mortgagor. The hazard insurance policy is the
valid and
binding obligation of the Insurer, is in full force and effect, and
will be in
full force and effect and inure to the benefit of the Purchaser
upon the
consummation of the transactions contemplated by this Agreement.
The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any
Originator's or
Prior Servicer's having engaged in, any act or omission which would
impair the
coverage of any such policy, the benefits of the endorsement
provided for
herein, or the validity and binding effect of either;
(h)
Any and all requirements of any federal, state or local law
including, without limitation, all applicable predatory, usury,
truth-in-lending, RESPA, consumer credit protection, equal credit
opportunity or
disclosure laws applicable to the Mortgage Loan have been complied
with; the
Seller has maintained, and as Servicer shall continue to maintain,
evidence of
such compliance as required by applicable law or regulation and
shall make such
evidence available for inspection at Seller's office during normal
business
hours upon reasonable advance notice;
(i)
The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, 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;
(j)
The Mortgage is a valid, subsisting, enforceable and perfected
first
lien on the Mortgaged Property, including for Mortgage Loans that
are not Co-op
Loans, on all buildings on the Mortgaged Property and all
installations and
mechanical, electrical, plumbing, heating and air conditioning
systems affixed
to such buildings, and all additions, alterations and replacements
made at any
time with respect to the foregoing securing the Mortgage Note's
original
principal balance. The Mortgage and the Mortgage Note do not
contain any
evidence of any security interest or other interest or right
thereto. Such lien
is free and clear of all adverse claims, liens and encumbrances
having priority
over the first lien of the Mortgage subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet
due and
payable, (2) covenants, conditions and restrictions, rights of way,
easements
and other matters of the public record as of the date of recording
which are
acceptable to mortgage lending institutions generally and either
(A) which are
referred to in either the Originator's title insurance policy (to
the extent
short form policies are not utilized) or 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 as set forth in such
appraisal, and
(3) 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
23
security agreement, chattel mortgage or equivalent document related
to and
delivered in connection with the Mortgage Loan establishes and
creates a valid,
subsisting, enforceable and perfected first lien and first priority
security
interest on the property described therein, and the Seller has the
full right to
sell and assign the same to the Purchaser;
(k)
The Mortgage Note and the related Mortgage are original and genuine
and each is the legal, valid and binding obligation of the maker
thereof,
enforceable in all respects in accordance with its terms subject to
bankruptcy,
insolvency and other laws of general application affecting the
rights of
creditors and the Seller has taken all action necessary to transfer
such rights
of enforceability to the Purchaser. All parties to the Mortgage
Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and
to execute
and deliver the Mortgage Note and the Mortgage. The Mortgage Note
and the
Mortgage have been duly and properly executed by such parties. No
fraud, error,
omission, misrepresentation, negligence or similar occurrence with
respect to a
Mortgage Loan has taken place on the part of Seller or the
Mortgagor, or, to the
best of Seller's knowledge, on the part of any other party involved
in the
origination of the Mortgage Loan. The proceeds of the Mortgage Loan
have been
fully disbursed and there is no requirement for future advances
thereunder, and
any and all requirements as to completion of any on-site or
off-site
improvements and as to disbursements of any escrow funds therefor
have been
satisfied. All costs, fees and expenses incurred in making or
closing the
Mortgage Loan and the recording of the Mortgage were paid or are in
the process
of being paid, and the Mortgagor is not entitled to any refund of
any amounts
paid or due under the Mortgage Note or Mortgage;
(l)
The Seller is the sole owner of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note, and the Seller (or
the Seller's
designee, Mortgage Electronic Registration System, Inc. ("MERS"),
is the holder
of the Mortgage, except for the Assignments of Mortgage which have
not yet been
sent for recording or recorded, and upon recordation the Seller (or
its
designee, MERS) will be the holder 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
or any part
thereof with respect thereto not delivered to the Purchaser or the
Purchaser's
designee, in trust, only for the purpose of servicing and
supervising the
servicing of each Mortgage Loan. Immediately prior to the transfer
and
assignment to the Purchaser on the Closing Date, the Mortgage Loan,
including
the Mortgage Note and the Mortgage, were not subject to an
assignment (other
than the assignments to Seller's designee, MERS, if applicable),
sale or pledge,
and the Seller had good and marketable title to and was the sole
owner thereof
and had full right to transfer and sell the Mortgage Loan to the
Purchaser free
and clear of any encumbrance, equity, lien, pledge, charge, claim
or security
interest and has the full right and authority subject to no
interest or
participation of, or agreement with, any other party, to sell and
assign the
Mortgage Loan pursuant to this Agreement and following the sale of
the Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of
any
encumbrance, equity, participation interest, lien, pledge, charge,
claim or
security interest. The Seller intends to relinquish all rights to
possess,
control and monitor the Mortgage Loan, except for the purposes of
servicing the
Mortgage Loan as set forth in this Agreement. After the Closing
Date, the Seller
will have no right to modify or alter the terms of the sale of the
Mortgage Loan
and the Seller will have no obligation or right to repurchase the
Mortgage Loan
or substitute another Mortgage Loan, except as provided in this
Agreement, or as
otherwise agreed to by the Seller and the Purchaser;
24
(m)
Each Mortgage Loan that is not a Co-op Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form
of policy or
insurance acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to
FNMA or FHLMC and qualified to do business in the jurisdiction
where the
Mortgaged Property is located, insuring (subject to the exceptions
contained in
(j)(1), (2) and (3) above) the Seller, its successors and assigns,
as to the
first priority lien of the Mortgage in the original principal
amount of the
Mortgage Loan and with respect to ARM Mortgage Loans, against any
loss by reason
of the invalidity or unenforceability of the lien resulting from
the provisions
of the Mortgage providing for adjustment in the Mortgage Interest
Rate or
Monthly Payment. Where required by state law or regulation, the
Mortgagor has
been given the opportunity to choose the carrier of the required
mortgage title
insurance. The Seller, its successors and assigns, are the sole
insureds of such
lender's title insurance policy, such title insurance policy has
been duly and
validly endorsed to the Purchaser or the assignment to the
Purchaser of the
Seller's interest therein does not require the consent of or
notification to the
insurer and such lender's title insurance policy is in full force
and effect and
will be in full force and effect upon the consummation of the
transactions
contemplated by this Agreement. No claims have been made under such
lender's
title insurance policy, and no prior holder of the related
Mortgage, including
the Seller, has done, by act or omission, anything which would
impair the
coverage of such lender's title insurance policy;
(n)
There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no
event which,
with the passage of time or with notice and the expiration of any
grace or cure
period, would constitute a default, breach, violation or event
permitting
acceleration; and neither the Seller nor any prior mortgagee has
waived any
default, breach, violation or event permitting acceleration;
(o)
There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding
that under law
could give rise to such liens) affecting the related Mortgaged
Property which
are or may be liens prior to or equal to the lien of the related
Mortgage;
(p)
All improvements subject to the Mortgage which were considered in
determining the Appraised Value of the Mortgaged Property lie
wholly within the
boundaries and building restriction lines of the Mortgaged Property
(and wholly
within the project with respect to a condominium unit) and no
improvements on
adjoining properties encroach upon the Mortgaged Property except
those which are
insured against by the title insurance policy referred to in clause
(m) above
and all improvements on the Mortgaged Property comply with all
applicable zoning
and subdivision laws and ordinances;
(q)
The Mortgage Loan was originated by or for the Seller. The Mortgage
Loan complies with all the terms, conditions and requirements of
the Seller's
underwriting standards in effect at the time of origination of such
Mortgage
Loan, a copy of which have been provided to the Purchaser. The
Mortgage Notes
and Mortgages (exclusive of any riders) are on forms acceptable to
FNMA or
FHLMC. Seller is currently selling loans to FNMA and/or FHLMC which
are the same
document forms as the Mortgage Notes and Mortgages (inclusive of
any riders).
The Mortgage Loan bears interest at a fixed rate as set forth in
the Mortgage
Loan Schedule, and Monthly Payments under the Mortgage Note are due
and payable
on the first day
25
of each month. The Mortgage contains the usual and enforceable
provisions for
the acceleration of the payment of the unpaid principal amount of
the Mortgage
Loan if the related Mortgaged Property is sold or transferred
without the prior
consent of the mortgagee thereunder;
(r)
The Mortgaged Property is not subject to any material damage by
waste, fire, earthquake, windstorm, flood or other casualty. At
origination of
the Mortgage Loan there was, there has not been, and there
currently is, no
proceeding pending, or to the actual knowledge of Seller
threatened, for the
total or partial condemnation of the Mortgaged Property. To the
best of Seller's
knowledge, there are no such proceedings scheduled to commence at a
future date;
(s)
The related Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof
adequate for the
realization against the Mortgaged Property of the benefits of the
security
provided thereby, including, (1) in the case of a Mortgage
designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is
no homestead or other exemption available to the Mortgagor which
would interfere
with the right to sell the Mortgaged Property at a trustee's sale
or the right
to foreclose the Mortgage;
(t)
If the Mortgage constitutes a deed of trust, a trustee, authorized
and duly qualified if required under applicable law to act as such,
has been
properly designated and currently so serves and is named in the
Mortgage, and no
fees or expenses, except as may be required by local law, are or
will become
payable by the Purchaser to the trustee under the deed of trust,
except in
connection with a trustee's sale or attempted sale after default by
the
Mortgagor;
(u)
The Mortgage File contains an appraisal of the related Mortgaged
Property signed prior to the final approval of the mortgage loan
application by
a Qualified Appraiser, approved by the Seller, who had no interest,
direct or
indirect, in the Mortgaged Property or in any loan made on the
security thereof,
and whose compensation is not affected by the approval or
disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of
FNMA or FHLMC and Title XI FIRREA and the regulations promulgated
thereunder,
all as in effect on the date the Mortgage Loan was originated. The
appraisal is
in a form acceptable to FNMA or FHLMC and was made by a Qualified
Appraiser;
(v)
All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which
they held and disposed of such interest, were) (A) in compliance
with any and
all applicable licensing requirements of the laws of the state
wherein the
Mortgaged Property is located, and (B) (1) organized under the laws
of such
state, or (2) qualified to do business in such state, or (3)
federal savings and
loan associations or national banks or a Federal Home Loan Bank or
savings bank
having principal offices in such state, or (4) not doing business
in such state;
(w)
The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the
security
interest of any applicable security agreement or chattel mortgage
referred to
above and such collateral does not serve as security for any other
obligation;
26
(x)
The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(y)
The Mortgage Loan does not contain "graduated payment", "contingent
interest", "shared appreciation" or "buy-down" features;
(z)
The Mortgagor was not in bankruptcy on the date of origination of
the Mortgage Loan and, to the best of the Seller's knowledge, as of
the Cut-Off
Date, the Mortgagor is not insolvent or in bankruptcy and the
Seller has no
knowledge of any circumstances or condition with respect to the
Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that could
reasonably be expected to cause investors to regard the Mortgage
Loan as an
unacceptable investment, cause the Mortgage Loan to become
delinquent, or
materially adversely affect the value or marketability of the
Mortgage Loan;
(aa)
Principal payments on the Mortgage Loan commenced no more than
sixty
(60) days after the funds were disbursed in connection with the
Mortgage Loan.
The Mortgage Loans have an original term to maturity of not more
than thirty
(30) years from the commencement of amortization, with interest
payable in
arrears on the first day of each month. As to each ARM Mortgage
Loan, on each
applicable Adjustment Date, the Mortgage Interest Rate will be
adjusted to equal
the sum of the Index plus the applicable Gross Margin, rounded up
or down to the
nearest multiple of 0.125%; provided, however, that the Mortgage
Interest Rate
will not increase or decrease by more than the Initial Rate Cap on
the first
Adjustment Date or the Periodic Rate Cap on any subsequent
Adjustment Date, and
will in no event exceed the Lifetime Rate Cap. Each Mortgage Note
requires
monthly payment which is sufficient (i) during the period prior to
the first
adjustment to the Mortgage Interest Rate, to amortize the original
principal
balance fully over the original term thereof and to pay interest at
the related
Mortgage Interest Rate, and (ii) during the period following each
Adjustment
Date, to amortize the outstanding principal balance as of the first
day of such
period over the then remaining term of such Mortgage Note and to
pay interest at
the related Mortgage Interest Rate. No Mortgage Loan contains terms
or
provisions which would result in Negative Amortization. No Mortgage
Loan is a
Convertible Mortgage Loan.
(bb)
In the event any Mortgage Loan has an LTV greater than 80.0% at
origination, (i) the excess of the principal balance of the
Mortgage Loan over
75.0% of the Appraised Value of the Mortgaged Property with respect
to a
Refinanced Mortgage Loan, or (ii) the lesser of the Appraised Value
or the
purchase price of the Mortgaged Property with respect to a purchase
money
Mortgage Loan, is insured as to payment defaults by a Primary
Mortgage Insurance
Policy issued by a Qualified Insurer, except for any Primary
Mortgage Insurance
Policy that is cancelled or terminated as required by law between
the Cut-Off
Date and the Closing Date. All provisions of such Primary Mortgage
Insurance
Policies referenced in the preceding sentence have been and are
being complied
with, such policy is in full force and effect, and all premiums due
thereunder
have been paid. No Mortgage Loan requires payment of such premiums,
in whole or
in part by the Purchaser. No action, inaction, or event has
occurred and no
state of facts exists that has or will result in the exclusion
from, denial of,
or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage
Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary
Mortgage Insurance Policy and to pay all premiums and charges in
connection
therewith. The
27
Mortgage Interest Rate for the Mortgage Loan as set forth on the
Mortgage Loan
Schedule is net of any such insurance premium. As of the date of
origination, no
Mortgage Loan had an LTV greater than 95%;
(cc)
The Assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the
Mortgaged Property
is located;
(dd)
As to Mortgage Loans that are not Co-op, the Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and
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
condominium unit in
a condominium project, or an individual unit in a planned unit
development,
provided, however, that no residence or dwelling is a mobile home
or
Manufactured Home. As of the date of origination, no portion of the
Mortgaged
Property was used for commercial purposes (as per the FNMA Guides),
and since
the date of origination, to the best of the Seller's knowledge, no
portion of
the Mortgaged Property was used for commercial purposes (as per the
FNMA
Guides);
(ee)
Principal payments on the Mortgage Loan commenced no more than
sixty
(60) days after the funds were disbursed in connection with the
Mortgage Loan.
The Mortgage Note is payable on the first day of each month in
equal monthly
installments of principal and interest, with interest calculated
and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity
date, over an original term of not more than thirty (30) years from
commencement
of amortization;
(ff)
As of the date of origination of the Mortgage Loan, the Mortgaged
Property was lawfully occupied under applicable law, and all
inspections,
licenses and certificates required to be made or issued with
respect to all
occupied portions of the Mortgaged Property and, with respect to
use and
occupancy of the same, including but not limited to certificates of
occupancy
and fire underwriting certificates, have been made or obtained from
the
appropriate authorities. With respect to each ARM Mortgage Loan,
all Mortgage
Interest Rate adjustments have been made in compliance with state
and federal
law and the terms of the related Mortgage Note. Any interest
required to be paid
pursuant to state and local law has been properly paid and
credited.
(gg)
If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), or
stock in a
cooperative housing corporation, such condominium, cooperative, or
planned unit
development project meets Seller's eligibility requirements as set
forth in
Seller's underwriting guidelines;
(hh)
To the best of Seller's knowledge, there is no pending action or
proceeding directly involving the Mortgaged Property in which
compliance with
any environmental law, rule or regulation is an issue; to the best
of Seller's
knowledge, there is no violation of any environmental law, rule or
regulation
with respect to the Mortgaged Property, and Seller has not received
notice of
any such violation; and nothing further remains to be done to
satisfy in full
all requirements of each such law, rule or regulation constituting
a
prerequisite to use and enjoyment of said property;
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(ii)
No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in
or exchange
of a Mortgaged Property;
(jj)
No action has been taken or failed to be taken by Seller, on or
prior to the Closing Date which has resulted or will result in an
exclusion
from, denial of, or defense to coverage under any Primary Mortgage
Insurance
Policy (including, without limitation, any exclusions, denials or
defenses which
would limit or reduce the availability of the timely payment of the
full amount
of the loss otherwise due thereunder to the insured) whether
arising out of
actions, representations, errors, omissions, negligence, or fraud
of the Seller,
or for any other reason under such coverage;
(kk)
The origination, collection and servicing practices used by the
Seller, any Originator and Prior Servicers, with respect to each
Mortgage Note
and Mortgage have been in compliance with Applicable Requirements,
and in all
material respects proper and prudent in the mortgage origination
and servicing
business. With respect to escrow deposits and payments that the
Seller is
entitled to collect, all such payments are in the possession of, or
under the
control of, the Seller, and there exist no deficiencies in
connection therewith
for which customary arrangements for repayment thereof have not
been made. All
escrow payments have been collected in full compliance with state
and federal
law and the provisions of the related Mortgage Note and Mortgage.
As to any
Mortgage Loan that is the subject of an escrow, escrow of funds is
not
prohibited by applicable law and has been established in an amount
sufficient to
pay for every escrowed item that remains unpaid and has been
assessed but is not
yet due and payable. No escrow deposits or other charges or
payments due under
the Mortgage Note have been capitalized under any Mortgage or the
related
Mortgage Note;
(ll)
With respect to each Co-op Loan, the related Mortgage is a valid,
enforceable and subsisting first security interest on the related
cooperative
shares securing the related cooperative note and lease, subject
only to (a)
liens of the cooperative for unpaid assessments representing the
Mortgagor's pro
rata share of the cooperative's payments for its blanket mortgage,
current and
future real property taxes, insurance premiums, maintenance fees
and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security intended to be provided by the
security
agreement. There are no liens against or security interests in the
cooperative
shares relating to each Co-op Loan (except for unpaid maintenance,
assessments
and other amounts owed to the related cooperative which
individually or in the
aggregate will not have a material adverse effect on such Co-op
Loan), which
have priority equal to or over the Seller's security interest in
such
cooperative shares;
(mm)
With respect to each Co-op Loan, a search for filings of financing
statements has been made by a company competent to make the same,
which company
is acceptable to FNMA and qualified to do business in the
jurisdiction where the
cooperative unit is located, and such search has not found anything
which would
materially and adversely affect the Co-op Loan;
(nn)
With respect to each Co-op Loan, the related cooperative
corporation
that owns title to the related cooperative apartment building is a
"cooperative
housing corporation" within the meaning of Section 216 of the
Internal Revenue
Code, and is in material compliance with
29
applicable federal, state and local laws which, if not complied
with, could have
a material adverse effect on the Mortgaged Property;
(oo)
With respect to each Co-op Loan, there is no prohibition against
pledging the shares of the cooperative corporation or assigning the
Co-op Lease;
(pp)
The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203
and 211 of
the National Housing Act, a savings and loan association, a savings
bank, a
commercial bank, credit union, insurance company or similar
institution which is
supervised and examined by a federal or state authority;
(qq)
The Mortgage Loan is not secured by a leasehold interest under such
ground lease;
(rr)
All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments, ground rents
relating to the
Mortgage Loans have been paid by Seller to the extent such items
are required to
be paid by Seller pursuant to Applicable Requirements and as herein
provided;
(ss)
Each Mortgage Loan shall have a tax service contract and flood
insurance monitoring contract which shall have a term of the life
of the
Mortgage Loan;
(tt)
The Pool Statistics for the Mortgage Loans are as reflected on
Exhibit E attached hereto, which statistics are accurate as of the
Cut-Off Date;
(uu)
No Mortgage Loan is (a) a "high cost" loan under the Home Ownership
and Equity Protection Act of 1994 as amended, or (b) a "high cost,"
"threshold,"
"covered," "predatory," "abusive" (as defined by the Rating
Agencies), or
similarly defined loan, under any other applicable state, federal
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),
provided that
any Mortgage Loan secured by a Mortgaged Property in Illinois
characterized as a
"threshold" loan shall not be a "high cost" loan unless it is
characterized as
"predatory" under applicable local law or (c) a "High Cost Loan" or
"Covered
Loan" as defined in the S&P LEVELS Glossary Version 5.6;
(vv)
No proceeds of any Mortgage Loan were used to finance
single-premium
credit insurance policies;
(ww)
No Mortgage Loan will impose a prepayment premium;
(xx)
The Mortgagor has not notified the Seller, and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under
Servicemembers Civil Relief Act, as amended, or any similar state
law;
(yy)
No Mortgage Loan secured by a Mortgaged Property located in the
State of Georgia was originated on or after October 1, 2002, and on
or before
March 7, 2003, with an initial balance less than or equal to
$322,700.00;
30
(zz)
Article XVI, Section 50(a)(6) of the Texas Constitution is not
applicable to the Mortgage Loan or the origination thereof. If the
Mortgage Loan
was originated in Texas, it is not a cash-out refinancing;
(aaa) No Mortgage Loan is a "pledged asset" mortgage loan;
(bbb) To the extent applicable to the originator of the Mortgage
Loan, the
Seller or the originator of the Mortgage Loan has complied with the
Bank Secrecy
Act, including specifically, the amendment set forth in the USA
Patriot Act of
2001;
(ccc) Each Mortgage Loan has a non-zero FICO score and a minimum
FICO
score of 625;
(ddd) The Mortgagor related to each Mortgage Loan had a
debt-to-income
ratio of 60% or less as of the origination date of the Mortgage
Loan. With
respect to each Mortgage Loan with an original principal balance of
$1 million
or more (i) the related Mortgagor had a debt-to-income ratio of 50%
or less as
of the date of origination of such Mortgage Loan, (ii) the Mortgage
Loan has a
reserve of no less than six (6) months, (iii) the LTV is 70% or
less, and (iv)
the Mortgage Loan has a Mortgage File that includes (A) a full
appraisal of the
Mortgaged Property and (B) full loan origination documentation that
includes
income and asset verification forms; and
(eee) The parties hereto agree and understand that it is not
intended that
any mortgage loan be included in the sale that is a "High-Cost Home
Loan" as
defined in the New Jersey Home Ownership Act effective November 27,
2003 and in
the New Mexico Home Loan Protection Act effective January 1, 2004.
Section 3.03.
Repurchase; Substitution.
It is understood and agreed that the representations and warranties
set
forth in Sections 3.01 and 3.02 shall survive the sale of the
Mortgage Loans,
delivery of the Mortgage Loan Documents to the Purchaser, or its
designee, and
shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or
qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the
examination, or lack of examination, of any Mortgage File. Upon
discovery by
either the Seller or the Purchaser of a breach of any of the
foregoing
representations and warranties which materially and adversely
affects the value
of a Mortgage Loan or the Mortgage Loans or the interest of the
Purchaser in any
Mortgage Loan or all of the Mortgage Loans, the party discovering
such breach
shall give prompt written notice to the other. The Seller shall
have a period of
sixty (60) days from the earlier of its discovery or its receipt of
notice of
any such breach within which to correct or cure such breach. The
Seller hereby
covenants and agrees that if any such breach is not corrected or
cured within
such sixty (60) day period, the Seller shall, at the Purchaser's
option and not
later than ninety (90) days after the earlier of its discovery or
its receipt of
notice of such breach, repurchase such Mortgage Loan at the
Repurchase Price;
provided, however, that in the event such breach constitutes a
breach of Section
3.02(uu), then the Repurchase Price shall also include any costs
and damages
incurred by Purchaser as a result of such breach; or, with the
Purchaser's prior
consent, which consent shall not be unreasonably
31
withheld, substitute a Mortgage Loan as provided below. In the
event that any
such breach shall involve any representation or warranty set forth
in Section
3.01, and such breach is not cured within sixty (60) days after the
earlier of
either discovery by or notice to the Seller of such breach, all
Mortgage Loans
shall, at the option of the Purchaser, be repurchased by the Seller
at the
Repurchase Price. Any such repurchase shall be accomplished by
deposit in the
Custodial Account of the amount of the Repurchase Price, after
deducting
therefrom any amounts received in respect of such repurchased
Mortgage Loan and
being held in the Custodial Account for future distribution.
Notwithstanding the
foregoing, upon the discovery or being notified of a breach of any
representation or warranty that would cause a Mortgage Loan to be
other than a
"qualified mortgage" within Section 860G(a)(3) of the Code, the
Seller shall
either cure or effect a repurchase or substitution within
seventy-five (75) days
after the earlier of discovering or being notified of such breach.
If the Seller is re
