Exhibit 99.16(b)
EXECUTION COPY
REGULATION AB COMPLIANCE ADDENDUM
TO SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
(Servicing-retained)
This
Regulation AB Compliance Addendum (this "Reg AB Addendum"),
dated
as of November 22, 2005, by and between Morgan Stanley Mortgage
Capital Inc.
(the "Purchaser") and Wachovia Mortgage Corporation (the
"Company"), to that
certain Seller's Purchase, Warranties and Servicing Agreement,
dated as of
September 1, 2004, by and between the Company and the Purchaser (as
amended,
modified or supplemented, the "Agreement").
WITNESSETH
WHEREAS,
the Company and the Purchaser have agreed to adopt an addendum
to the Agreement to reflect the intention of the parties to comply
with
Regulation AB.
NOW,
THEREFORE, in consideration of the mutual promises and mutual
obligations set forth herein, the Company and the Purchaser hereby
agree as
follows:
ARTICLE I
DEFINED TERMS
Capitalized terms used but not defined herein shall have the
meanings
assigned to such terms in the Agreement. The following terms shall have
the
meanings set forth below, unless the context clearly indicates
otherwise:
Commission: The United
States Securities and Exchange Commission.
Company Information:
As defined in Section
2.07(a).
Depositor:
With respect to any
Securitization Transaction, the Person
identified in writing to the Company by the Purchaser as depositor
for such
Securitization Transaction.
Exchange
Act: The Securities
Exchange Act of 1934, as amended.
Qualified
Correspondent: Any
Person from which the Company purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i)
such Mortgage Loans were originated pursuant to an agreement
between the
Company and such Person that contemplated that such Person would
underwrite
mortgage loans from time to time, for sale to the Company, in
accordance with
underwriting guidelines designated by the Company ("Designated
Guidelines")
or guidelines that do not vary materially from such Designated
Guidelines;
(ii) such Mortgage Loans were in fact underwritten as described in
clause (i)
above and were acquired by the Company within 270 days after
origination;
(iii) either (x) the Designated Guidelines were, at the time such
Mortgage
Loans were originated, used by the Company in origination of
mortgage loans
of the same type as the Mortgage Loans for the Company's own
account or (y)
the Designated Guidelines were, at the time such Mortgage Loans
were
underwritten, designated by the Company on a consistent basis for
use by
lenders in originating mortgage loans to be
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purchased by the Company; and (iv) the Company employed, at the
time such
Mortgage Loans were acquired by the Company, pre-purchase or
post-purchase
quality assurance procedures (which may involve, among other
things, review
of a sample of mortgage loans purchased during a particular time
period or
through particular channels) designed to ensure that Persons from
which it
purchased mortgage loans properly applied the underwriting
criteria
designated by the Company.
Regulation
AB: Subpart 229.1100 -
Asset Backed Securities (Regulation
AB), 17 C.F.R.
ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have
been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005))
or by the staff of the Commission, or as may be provided by the
Commission or
its staff from time to time.
Securities
Act: The Securities
Act of 1933, as amended.
Securitization Transaction: Any transaction involving either
(1) a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly by the Purchaser to an issuing entity in connection with
an
issuance of publicly offered, rated or unrated mortgage-backed
securities or
(2) an issuance of publicly offered, rated or unrated securities,
the
payments on which are determined primarily by reference to one or
more
portfolios of residential mortgage loans consisting, in whole or in
part, of
some or all of the Mortgage Loans.
Servicer:
As defined in Section
2.03(c).
Servicing
Criteria: The
"servicing criteria" set forth in Item 1122(d)
of Regulation AB for which the Company is responsible in its
capacity as
Servicer as identified on Exhibit B hereto, provided that such
Exhibit B may
be amended from time to time to reflect changes in Regulation
AB.
Sponsor:
With respect to any
Securitization Transaction, the Person
identified in writing to the Company by the Purchaser as sponsor
for such
Securitization Transaction.
Static
Pool Information:
Static pool information as described in Item
1l05(a)(l)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any
vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly
understood
by participants in the mortgage-backed securities market) of
Mortgage Loans
but performs one or more discrete functions identified in Item
l122(d) of
Regulation AB with respect to Mortgage Loans under the direction or
authority
of the Company or a Subservicer.
Subservicer: Any
Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance
(whether
directly or through Subservicers or Subcontractors) of a
substantial portion
of the material servicing functions identified in Item 1122(d) of
Regulation
AB that are required to be performed by the Company under this
Agreement or
any Reconstitution Agreement.
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Third-Party Originator: Each Person, other than a
Qualified
Correspondent, that originated Mortgage Loans acquired by the
Company.
Whole Loan
Transfer: Any sale or
transfer by the Purchaser of some or
all of the Mortgage Loans, other than a Securitization
Transaction.
ARTICLE II
COMPLIANCE WITH
REGULATION AB
Section
2.01. Intent of the
Parties; Reasonableness.
The
Purchaser and the Company acknowledge and agree that the purpose
of
Article II of this Reg AB Addendum is to facilitate compliance by
the
Purchaser and any Depositor with the provisions of Regulation AB
and related
rules and regulations of the Commission and that the provisions of
this Reg
AB Addendum shall be applicable to all Mortgage Loans included in
a
Securitization Transaction closing on or after January 1, 2006,
regardless
whether the Mortgage Loans were purchased by the Purchaser from the
Company
prior to the date hereof. Neither the Purchaser nor any
Depositor shall
exercise its right to request delivery of information or other
performance
under these provisions other than in good faith, or for purposes
other than
compliance with the Securities Act, the Exchange Act and the rules
and
regulations of the Commission thereunder. The Company acknowledges that
interpretations of the requirements of Regulation AB may change
over time,
whether due to interpretive guidance provided by the Commission or
its staff,
consensus among participants in the asset-backed securities
markets, advice
of counsel, or otherwise, and agrees to comply with reasonable
requests made
by the Purchaser or any Depositor in good faith for delivery of
information
under these provisions on the basis of evolving interpretations of
Regulation
AB. In connection with
any Securitization Transaction, the Company shall
cooperate with the Purchaser to deliver to the Purchaser (including
any of
its assignees or designees) and any Depositor, any and all
statements,
reports, certifications, records and any other information
necessary in the
good faith determination of the Purchaser or any Depositor to
permit the
Purchaser or such Depositor to comply with the provisions of
Regulation AB,
together with such disclosures relating to the Company, any
Subservicer, any
Third-Party Originator and the Mortgage Loans, or the servicing of
the
Mortgage Loans, reasonably believed by the Purchaser or any
Depositor to be
necessary in order to effect such compliance.
The
Purchaser and the Company also acknowledge and agree Section
2.02(a)(i)-(v), Section 2.03(c), (e) and (f), Section 2.04, Section
2.05 and
Section 2.06 of this Reg AB Addendum shall only be applicable with
respect to
any Mortgage Loan if the Company (or Subservicer, if any) services
such
Mortgage Loan for a period following the closing date of a
related
Securitization Transaction. The Purchaser and the Company also
acknowledge
and agree that this Reg AB Addendum is intended to supplement the
terms of
the Agreement and, to the extent inconsistent, the rights and
obligations
under the Agreement shall continue to apply with respect to any
Reconstitution (as defined in the Agreement) that is not covered by the
definition of "Securitization Transfer" in this Reg AB Addendum;
provided,
however, that the requirement to provide an accountants' report
pursuant to
Section 6.05 of the Agreement shall be deemed satisfied with
respect to any
Reconstitution that occurs prior to, on or following the date
hereof
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by providing an accountants' attestation that satisfies the
requirements of
Section 2.05(a)(ii) of this Reg AB Addendum.
For
purposes of this Reg AB Addendum, the term "Purchaser" shall
refer
to Morgan Stanley Mortgage Capital Inc. and its successors in
interest and
assigns. In addition,
any notice or request that must be "in writing" or
"written" may be made by electronic mail.
Section
2.02. Additional
Representations and Warranties of the
Company.
(a)
The Company
shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first
provided to the
Purchaser or any Depositor under Section 2.03 that, except as
disclosed in
writing to the Purchaser or such Depositor prior to such date: (i)
the
Company is not aware and has not received notice that any default,
early
amortization or other performance triggering event with respect to
the
Company has occurred as to any other securitization due to any act
or failure
to act of the Company; (ii) the Company has not been terminated as
servicer
in a residential mortgage loan securitization, either due to a
servicing
default or to application of a servicing performance test or
trigger; (iii)
no material noncompliance with the applicable Servicing Criteria
with respect
to other securitizations of residential mortgage loans involving
the Company
as servicer has been disclosed or reported by the Company; (iv) no
material
changes to the Company's policies or procedures with respect to the
servicing
function it will perform under this Agreement and any
Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage
Loans have
occurred during the three-year period immediately preceding the
related
Securitization Transaction; (v) there are no aspects of the
Company's
financial condition that are reasonably expected to have a material
adverse
effect on the performance by the Company of its servicing
obligations under
this Agreement or any Reconstitution Agreement; (vi) there are no
material
legal or governmental proceedings pending (or known to be
contemplated)
against the Company, any Subservicer or any Third-Party Originator;
and (vii)
there are no affiliations, relationships or transactions relating
to the
Company, any Subservicer or any Third-Party Originator with respect
to any
Securitization Transaction and any party thereto identified in
writing to the
Company by the related Depositor of a type described in Item 1119
of
Regulation AB.
The
Company hereby represents and warrants that it is unable
without
unreasonable effort or expense to provide (i) Static Pool
Information with
respect to mortgage loans that the Company has sold on a
servicing-released
basis, other than such information as relates to "original
characteristics"
as described in Item 1105(a)(3)(iii) of Regulation AB and (ii)
Static Pool
Information regarding cumulative losses with respect to any
mortgage loans
originated prior to January 1, 2006.
(b)
If so requested
in writing by the Purchaser or any Depositor on
any date following the date on which information is first
provided to the
Purchaser or any Depositor under Section 2.03, the Company shall
use its
reasonable best efforts to within five (5) Business Days, but in no
event
later than ten (10) Business Days, following such request confirm
in writing
the accuracy of the representations and warranties set forth in
paragraph (a)
of this Section or, if any such representation and warranty is not
accurate
as of the date of such request, provide reasonably adequate
disclosure of the
pertinent facts, in writing, to the requesting party.
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Section
2.03. Information to
Be Provided by the Company.
In
connection with any Securitization Transaction, the Company
shall
use its reasonable best efforts to (i) within five (5) Business
Days, but in
no event later than ten (10) Business Days, following written
request by the
Purchaser or any Depositor, provide to the Purchaser and such
Depositor (or,
as applicable, cause each Third-Party Originator and each
Subservicer to
provide), in writing and in form and substance reasonably
satisfactory to the
Purchaser and such Depositor, the information and materials
specified in
paragraphs (a), (b), (c) and (f) of this Section, and (ii) as
promptly as
practicable following notice to or discovery by the Company,
provide to the
Purchaser and any Depositor (in writing and in form and substance
reasonably
satisfactory to the Purchaser and such Depositor) the information
specified
in paragraph (d) of this Section.
(a)
If so requested
in writing by the Purchaser or any Depositor, the
Company shall provide such information regarding (i) the Company,
as
originator of the Mortgage Loans (including as an acquirer of
Mortgage Loans
from a Qualified Correspondent), or (ii) each Third-Party
Originator, and
(iii) as applicable, each Subservicer, as is reasonably requested
for the
purpose of compliance with Items 1103(a)(l), 1105, 1110, 1117 and
1119 of
Regulation AB. Such
information shall include, at a minimum (so long as
required by Regulation AB):
(A) the
originator's form of organization;
(B) a
description of the originator's origination program and
how long
the originator has been engaged in originating residential
mortgage
loans, which description shall include a discussion of the
originator's experience in originating mortgage loans of a similar
type
as the
Mortgage Loans; information regarding the size and composition
of the
originator's origination portfolio; and information that may be
material,
in the good faith judgment of the Purchaser or any Depositor,
to an
analysis of the performance of the Mortgage Loans, including
the
originators' credit-granting or underwriting criteria for
mortgage
loans of
similar type(s) as the Mortgage Loans and such other
information as the Purchaser or any Depositor may reasonably
request
for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
(C) a
description of any legal or governmental proceedings
pending
(or known to be contemplated) against the Company, each
Third-Party Originator and each Subservicer that would be material
to
securityholders; and
(D) a
description of any affiliation or relationship between
the
Company, each Third-Party Originator, each Subservicer and any
of
the
following parties to a Securitization Transaction, as such
parties
are
identified to the Company by the Purchaser or any Depositor in
writing in
advance of such Securitization Transaction:
(1) the
sponsor;
(2) the
depositor;
(3) the issuing
entity;
(4) any
servicer;
(5) any
trustee;
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(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any other
material transaction party.
(b)
If so requested
in writing by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each Third-Party
Originator
to provide) vintage origination year Static Pool Information with
respect to
mortgage loans of a similar type as the Mortgage Loans (as
reasonably
identified by the Purchaser as provided below) originated by (i)
the Company,
if the Company is an originator of Mortgage Loans (including as an
acquirer
of Mortgage Loans from a Qualified Correspondent), and/or (ii)
each
Third-Party Originator, but in each case only to the extent that
(x) such
mortgage loans were originated after July 2004 and (y) (A) the
Company has
not sold such mortgage loans on a servicing-released basis or (B)
such
information relates to "original characteristics" as described in
Item
1105(a)(3)(iii) of Regulation AB. Notwithstanding the preceding
sentence,
the Company shall not be required to provide Static Pool
Information
regarding cumulative losses with respect to any mortgage loans
originated
prior to January 1, 2006. Such Static Pool Information shall
be prepared by
the Company (or Third-Party Originator) on the basis of its
reasonable, good
faith interpretation of the requirements of Item 1105(a)(2)-(3) of
Regulation
AB. To the extent that
there is reasonably available to the Company (or
Third-Party Originator) Static Pool Information with respect to
more than one
mortgage loan type, the Purchaser or any Depositor shall be
entitled to
specify whether some or all of such information shall be provided
pursuant to
this paragraph. The
content of such Static Pool Information may be in the
form customarily provided by the Company, and need not be
customized for the
Purchaser or any Depositor, except for such changes as the
Purchaser shall
reasonably request to the extent necessary to comply with
Regulation AB.
Such Static Pool Information for each vintage origination year
shall be
presented in increments no less frequently than quarterly over the
life of
the mortgage loans included in the vintage origination year.
The most recent
periodic increment must be as of a date no later than 135 days
prior to the
date of the prospectus or other offering document in which the
Static Pool
Information is to be included or incorporated by reference.
The Static Pool
Information shall be provided in an electronic format that provides
a
permanent record of the information provided, such as a portable
document
format (pdf) file, or other such electronic format reasonably
required by the
Purchaser or the Depositor, as applicable.
Promptly
following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding
paragraph
(including an omission to include therein information required to
be provided
pursuant to such paragraph), the Company shall provide corrected
Static Pool
Information to the Purchaser or any Depositor, as applicable, in
the same
format in which Static Pool Information was previously provided to
such party
by the Company, subject to such time limits as mutually agreed to
by the
Company and the Purchaser or the Depositor, as applicable.
If so
requested in writing by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each Third-Party
Originator
to provide), at the expense of the requesting party (to the extent
of any
additional incremental expense associated with delivery pursuant to
this
Reg AB Addendum), such statements and agreed-upon procedures
letters of
certified public accountants reasonably acceptable to the Purchaser
or
Depositor, as applicable, pertaining to
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Static Pool Information relating to calendar months commencing
January 1,
2006, as the Purchaser or such Depositor shall reasonably request.
Such
statements and letters shall be addressed to and be for the benefit
of such
parties as the Purchaser or such Depositor shall designate, which
may
include, by way of example, any Sponsor, any Depositor and any
broker dealer
acting as underwriter, placement agent or initial purchaser with
respect to a
Securitization Transaction. Any such statement or letter may
take the form
of a standard, generally applicable document accompanied by a
reliance letter
authorizing reliance by the addressees designated by the Purchaser
or such
Depositor.
(c)
If so requested
in writing by the Purchaser or any Depositor with
respect to any Securitization Transaction for which 20% or more of
the pool
assets (measured by cut-off date principal balance) are serviced by
the
Company and any Subservicer, the Company shall provide such
information
regarding the Company, as servicer of the Mortgage Loans, and
each
Subservicer (each of the Company and each Subservicer, for purposes
of this
paragraph, a "Servicer"), as is reasonably requested for the
purpose of
compliance with Item 1108 of Regulation AB. Such information shall
include,
at a minimum (so long as required by Regulation AB):
(A) the
Servicer's form of organization;
(B) a
description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the
Servicer's
experience
in servicing assets of any type as well as a more detailed
discussion
of the Servicer's experience in, and procedures for, the
servicing
function it will perform under the Agreement and any
Reconstitution Agreements; information regarding the size,
composition
and growth
of the Servicer's portfolio of residential mortgage loans of
a type
similar to the Mortgage Loans and information on factors
related
to the
Servicer that may be material, in the good faith judgment of
the
Purchaser
or any Depositor, to any analysis of the servicing of the
Mortgage
Loans or the related asset-backed securities, as applicable,
including, without
limitation:
(1) whether any
prior securitizations of mortgage loans
of a type similar to the Mortgage Loans involving the Servicer
have defaulted or experienced an early amortization or other
performance triggering event because of servicing during the
three-year period immediately preceding the related
Securitization Transaction;
(2) the extent
of outsourcing the Servicer utilizes;
(3) whether
there has been previous disclosure of
material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer during the
three-year
period immediately preceding the related Securitization
Transaction;
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(4) whether the
Servicer has been terminated as servicer
in a residential mortgage loan securitization, either due to a
servicing default or to application of a servicing performance
test or trigger; and
(5) such other
information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance
with Item 1108(b)(2) of Regulation AB;
(C) a
description of any material changes during the three-year
period
immediately preceding the related Securitization Transaction to
the
Servicer's policies or procedures with respect to the servicing
function
it will perform under the Agreement and any Reconstitution
Agreements
for mortgage loans of a type similar to the Mortgage Loans;
(D) information
regarding the Servicer's financial condition,
to the
extent that there is a material risk that an adverse financial
event or
circumstance involving the Servicer could have a material
adverse
effect on the performance by the Company of its servicing
obligations under the Agreement or any Reconstitution
Agreement;
(E) information
regarding advances made by the Servicer on the
Mortgage
Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period
immediately
preceding
the related Securitization Transaction, which may be limited
to a
statement by an authorized officer of the Servicer to the
effect
that the
Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such period, or,
if
such
statement would not be accurate, information regarding the
percentage
and type of advances not made as required, and the reasons
for such
failure to advance;
(F) a
description of the Servicer's processes and procedures
designed
to address any special or unique factors involved in servicing
loans of a
similar type as the Mortgage Loans;
(G)
a description of
the Servicer's processes for handli
