Exhibit 99.7b
EXECUTION COPY
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SECOND AMENDED AND RESTATED MASTER MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
MORGAN STANLEY MORTGAGE CAPITAL INC.,
Purchaser
FIRST NATIONAL BANK OF NEVADA
Seller
Dated as of April 1, 2006
Conventional,
Fixed and Adjustable Rate
Residential Mortgage Loans
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TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS......................................................1
SECTION 2. AGREEMENT
TO PURCHASE...........................................15
SECTION 3. MORTGAGE
SCHEDULES..............................................15
SECTION 4. PURCHASE
PRICE; PRINCIPAL PREPAYMENTS...........................16
SECTION 5. EXAMINATION
OF MORTGAGE FILES...................................17
SECTION 6. CONVEYANCE
FROM SELLER TO PURCHASER.............................17
SECTION 7. SERVICING
OF THE MORTGAGE LOANS.................................20
SECTION 8.
[RESERVED]......................................................21
SECTION 9.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR
BREACH............................................21
SECTION 10.
CLOSING.........................................................42
SECTION 11. CLOSING
DOCUMENTS...............................................43
SECTION 12.
COSTS...........................................................44
SECTION 13. COOPERATION OF SELLER WITH A
RECONSTITUTION.....................44
SECTION 14. THE
SELLER......................................................46
SECTION 15. FINANCIAL
STATEMENTS............................................47
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY
INTEREST..................48
SECTION 17.
NOTICES.........................................................48
SECTION 18. SEVERABILITY
CLAUSE.............................................49
SECTION 19.
COUNTERPARTS....................................................50
SECTION 20. INTENTION OF THE
PARTIES........................................50
SECTION 21. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT........50
SECTION 22.
WAIVERS.........................................................50
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SECTION 23.
EXHIBITS........................................................50
SECTION 24. GENERAL INTERPRETIVE
PRINCIPLES.................................51
SECTION 25. REPRODUCTION OF
DOCUMENTS.......................................51
SECTION 26. FURTHER
AGREEMENTS..............................................51
SECTION 27. RECORDATION OF ASSIGNMENTS OF
MORTGAGE..........................52
SECTION 28. NO
SOLICITATION.................................................52
SECTION 29. WAIVER OF TRIAL BY
JURY.........................................52
SECTION 30. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF
PROCESS.......53
SECTION 31.
AMENDMENT.......................................................53
SECTION 32.
CONFIDENTIALITY.................................................53
SECTION 33. AVAILABILITY OF
INFORMATION.....................................54
SECTION 34. ENTIRE
AGREEMENT................................................54
SECTION 35. COMPLIANCE WITH REGULATION
AB...................................54
EXHIBITS
EXHIBIT A-1 MORTGAGE LOAN DOCUMENTS
EXHIBIT A-2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B FORM
OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S
CERTIFICATE
EXHIBIT D FORM
OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM
OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM
OF SECURITY RELEASE CERTIFICATION
EXHIBIT G
UNDERWRITING GUIDELINES
EXHIBIT H FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT I REPORT
PERIOD INFORMATION
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SECOND AMENDED AND RESTATED MASTER MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
This SECOND
AMENDED AND RESTATED MASTER MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT ("Agreement"), dated as of April 1, 2006, by
and between
MORGAN STANLEY MORTGAGE CAPITAL INC., a New York corporation
(the
"Purchaser"), and FIRST NATIONAL BANK OF NEVADA, a national
banking
association (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that
certain
First Amended and Restated Master Mortgage Loan Purchase and
Warranties
Agreement, dated as of October 1, 2005 (the "Original Purchase
Agreement") and
the Seller desires to sell, from time to time, to the Purchaser,
and the
Purchaser desires to purchase, from time to time, from the Seller,
certain
conventional fixed and adjustable rate residential first-lien and
second-lien
mortgage loans (the "Mortgage Loans") on a servicing released basis
as
described herein, and which shall be delivered in pools of whole
loans (each,
a "Mortgage Loan Package") on various dates as provided herein
(each, a
"Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire
to
amend the Original Purchase Agreement to make certain modifications
as set
forth herein with respect to all Mortgage Loans acquired pursuant
to this
Agreement or the Original Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable
consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Purchaser
and the Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms
shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices which are in accordance with
accepted
mortgage servicing practices of prudent mortgage lending
institutions which
service mortgage loans of the same type as such Mortgage Loan in
the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate 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.
Adjusted Purchase Price Percentage: With respect to any
Mortgage
Loan subject to repurchase in accordance with the terms of this
Agreement
during the first twelve months
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following the related Closing Date, shall be equal to the Purchase
Price
Percentage less the product of (i) the excess, if any, of the
Purchase Price
Percentage of such Mortgage Loan over par, and (ii)(A) the number
of calendar
days completed from (but not including) the related Closing Date
through the
repurchase date of such Mortgage Loan, divided by (B) 365.
Affiliate: With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified
Person. For the purposes of this definition, "control" when used
with respect
to any specified Person means the power to direct the management
and policies
of such Person, directly or indirectly, whether through the
ownership of
voting securities, by contract or otherwise and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Fannie Mae Transfer or a Freddie Mac
Transfer.
Agreement: This Second Amended and Restated Master Mortgage
Loan
Purchase and Warranties Agreement including all exhibits,
schedules,
amendments and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
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 by a
Qualified Appraiser and (ii) the purchase price paid for the
related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided,
however, that 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 by a Qualified
Appraiser.
Assignment and Conveyance Agreement: As defined in Subsection
6.01.
Assignment of Mortgage: An individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form and
in blank,
sufficient under the laws of the jurisdiction in which the related
Mortgaged
Property is located to give record notice of the sale of the
Mortgage to the
Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage
Loan or
(b) for which Monthly Payments of principal (not including the
payment due on
its stated maturity date) are based on an amortization schedule
that would be
insufficient to fully amortize the principal thereof by the stated
maturity
date of the Mortgage Loan.
Business Day: Any day other than (i) a Saturday or Sunday, (ii)
a
day on which banking and savings and loan institutions, in the
State of New
York or the State in which the Interim Servicer's servicing
operations are
located or (iii) the state in which the Custodian's operations are
located,
are authorized or obligated by law or executive order to be
closed.
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Cash-Out Refinance: A Refinanced Mortgage Loan in which the
proceeds
received were in excess of the amount of funds required to repay
the principal
balance of any existing first mortgage on the related Mortgaged
Property, pay
related closing costs and satisfy any outstanding subordinate
mortgages on the
related Mortgaged Property and which provided incidental cash to
the related
Mortgagor of more than 1% of the original principal balance of such
Mortgage
Loan.
Closing Date: The date or dates on which the Purchaser from time
to
time shall purchase, and the Seller from time to time shall sell,
the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to
the related
Mortgage Loan Package.
Closing Documents: The documents required to be delivered on
each
Closing Date pursuant to Section 11.
CLTA: The California Land Title Association.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of (a) the sum of (i) the outstanding
principal
balance of the Second Lien Loan and (ii) the outstanding principal
balance as
of such date of any mortgage loan or mortgage loans that are senior
or equal
in priority to the Second Lien Loan and which are secured by the
same
Mortgaged Property to (b) the Appraised Value as determined
pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of
the
origination of the Second Lien Loan.
Code: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property, whether
permanent
or temporary, partial or entire, by exercise of the power of
condemnation or
the right of eminent domain, to the extent not required to be
released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op: A private, cooperative housing corporation, having only
one
class of stock outstanding, which owns or leases land and all or
part of a
building or buildings, including apartments, spaces used for
commercial
purposes and common areas therein and whose board of directors
authorizes the
sale of stock and the issuance of a Co-op Lease.
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.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
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Custodial Account: The separate trust account created and
maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement
(with respect
to each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of
the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage
and other
Mortgage Loan Documents. If more than one Custodial Agreement is in
effect at
any given time, all of the individual Custodial Agreements shall
collectively
be referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York
banking
corporation, and its successors in interest, or any successor to
the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the
related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Deemed Material and Adverse Representation: Each representation
and
warranty identified as such in Section 9.02 of this Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim
period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is
due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer
rents,
municipal charges, mortgage insurance premiums, fire and hazard
insurance
premiums, condominium charges, and any other payments required to
be escrowed
by the Mortgagor with the Mortgagee pursuant to the Mortgage or any
other
document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide, as amended or restated from time to time.
Fannie Mae Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the
United
States Department of Housing and Urban Development, or any
successor thereto
and including the Federal Housing Commissioner and the Secretary of
Housing
and Urban Development where appropriate under the FHA
Regulations.
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FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage
on
the related Mortgaged Property.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in the related Mortgage Note
which
amount is added to the Index in accordance with the terms of the
related
Mortgage Note to determine on each Interest Rate Adjustment Date
the Mortgage
Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home
Ownership
and Equity Protection Act of 1994, or (b) classified as a "high
cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans"
as that
term was defined in clause (1) of the definition of that term in
the New
Jersey Home Ownership Security Act of 2002 that were originated
between
November 26, 2003 and July 7, 2004), "high risk home," "predatory"
or similar
loan under any other applicable 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) or (c) a
Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard &
Poor's Glossary.
For avoidance of doubt, the parties agree that this definition
shall apply to
any law regardless of whether such law is presently, or in the
future becomes,
the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as a Home Loan pursuant
to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal
agency or official thereof which may from time to time succeed to
the
functions thereof with regard to Mortgage Insurance issued by the
FHA. The
term "HUD," for purposes of this Agreement, is also deemed to
include
subdivisions thereof such as the FHA and Government National
Mortgage
Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged
Property.
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Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate
is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage
Loan,
the Person named on the MERS System as the interim funder pursuant
to the MERS
Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest, or any successor to the
Interim
Servicer under the Interim Servicing Agreement, as therein
provided.
Interim Servicing Agreement: The agreement to be entered into by
the
Purchaser and the Interim Servicer, providing for the Interim
Servicer to
service the Mortgage Loans as specified by the Interim Servicing
Agreement.
Investor: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS System as the investor pursuant to the
MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the
term of each
Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage
Interest Rate at the time of origination of such Adjustable Rate
Mortgage Loan
by more than the amount per annum set forth on the related Mortgage
Loan
Schedule.
Liquidation Proceeds: The proceeds 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, other
than amounts
received following the acquisition of REO Property, Insurance
Proceeds and
Condemnation Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of
any
date of determination, the ratio (expressed as a percentage) the
numerator of
which is the outstanding principal balance of the Mortgage Loan as
of the
related Cut-off Date (unless otherwise indicated), and the
denominator of
which is the lesser of (a) the Appraised Value of the Mortgaged
Property at
origination and (b) if the Mortgage Loan was made to finance the
acquisition
of the related Mortgaged Property, the purchase price of the
Mortgaged
Property.
LTV: Loan-to-Value Ratio.
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 June
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
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satisfies the manufacturer's requirements and all state, county,
and local
building codes and regulations). The manufactured home is built on
a
non-removable, permanent frame chassis that supports the complete
unit of
walls, floors, and roof. The underneath part of the home may have
running gear
(wheels, axles, and brakes) that enable it to be transported to the
permanent
site. The wheels and hitch are removed prior to anchoring the unit
to the
permanent foundation. The manufactured home must be classified as
real estate
and taxed accordingly. The permanent foundation may be on land
owned by the
mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or
will take
such action as is necessary to cause MERS to be, the mortgagee of
record, as
nominee for the Seller, in accordance with MERS Procedures Manual
and (b) the
Seller has designated or will designate the Purchaser as the
Investor on the
MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS
Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
MIN: With respect to any MERS Designated Mortgage Loan, the
mortgage
identification number (if any) assigned to such MERS Designated
Mortgage Loan
by MERS.
Monthly Payment: With respect to any Mortgage Loan, the
scheduled
payment of principal and interest payable by a Mortgagor under the
related
Mortgage Note on each Due Date.
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 liens in the case of a First Lien Loan, or a
second
lien, in the case of a Second Lien Loan, on the related Mortgaged
Property.
With respect to a Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage
Loan
Documents and the items listed in Exhibit A-2 hereto and any
additional
documents required to be added to the Mortgage File pursuant to
this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from
time to time
in accordance with the provisions of the related Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment
as set
forth in the related Mortgage Note.
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Mortgage Loan: Each mortgage loan sold, assigned and
transferred
pursuant to this Agreement and identified on the applicable
Mortgage Loan
Schedule, which Mortgage Loan includes, without limitation, the
Mortgage File,
the Monthly Payments, Principal Prepayments, Liquidation
Proceeds,
Condemnation Proceeds, Insurance Proceeds, Servicing Rights and all
other
rights, benefits, proceeds and obligations arising from or in
connection with
such Mortgage Loan, excluding replaced or repurchased mortgage
loans.
Mortgage Loan Documents: With respect to any Mortgage Loan, the
documents required to be delivered to the Custodian pursuant to
Subsection
6.03.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall
be
purchased by the Purchaser from the Seller from time to time on
each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth
the following information with respect to each Mortgage Loan in the
related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2)
the Mortgagor's name; (3) the social security number of the
Mortgagor; (4) a
code indicating whether the Mortgagor's race and/or ethnicity is
(i) native
American or Alaskan native, (ii) Asian/Pacific islander, (iii)
African
American, (iv) white, (v) Hispanic or Latino, (vi) other minority,
(vii) not
provided by the Mortgagor, (viii) not applicable (if the Mortgagor
is an
entity) and (ix) unknown or missing; (5) the street address of the
Mortgaged
Property including the city, state and zip code; (6) a code
indicating whether
the Mortgagor is self-employed; (7) a code indicating whether the
Mortgaged
Property is owner-occupied, investment property or a second home;
(8) a code
indicating the number and type of residential units constituting
the Mortgaged
Property (e.g., single family residence, two-family residence,
three-family
residence, four-family residence, multifamily residence,
condominium,
manufactured housing, mixed-use property, raw land and other
non-residential
properties, planned unit development or cooperative stock in a
cooperative
housing corporation); (9) the original months to maturity or the
remaining
months to maturity from the related Cut-off Date, in any case based
on the
original amortization schedule and, if different, the maturity
expressed in
the same manner but based on the actual amortization schedule; (10)
the
Loan-to-Value Ratio or CLTV, as applicable, at origination; (11)
the Mortgage
Interest Rate as of the related Cut-off Date; (12) the date on
which the first
Monthly Payment was due on the Mortgage Loan and, if such date is
not
consistent with the Due Date currently in effect, the Due Date;
(13) the
stated maturity date; (14) the amount of the Monthly Payment as of
the related
Cut-off Date; (15) whether the Mortgage Loan has Monthly Payments
that are
interest-only for a period of time, and the interest-only period,
if
applicable (and with respect to each Second Lien Loan, whether the
related
first lien mortgage loan has monthly payments that are
interest-only for a
period of time, and the interest-only period, if applicable); (16)
the last
payment date on which a payment was actually applied to the
outstanding
principal balance; (17) the schedule of the payment delinquencies
in the prior
12 months; (18) [reserved]; (19) the original principal amount of
the Mortgage
Loan; (20) the principal balance of the Mortgage Loan as of the
close of
business on the related Cut-off Date, after deduction of payments
of principal
due and collected on or before the related Cut-off Date; (21) with
respect to
each Mortgage Loan with a second lien behind it, the combined
principal
balance of the Mortgage Loan and the applicable second lien loan,
at
origination, (22) a code indicating whether there is a simultaneous
second;
(23) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate
Adjustment Date; (24) with respect to Adjustable Rate Mortgage
Loans, the
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Gross Margin; (25) with respect to Adjustable Rate Mortgage Loans,
the
Lifetime Rate Cap under the terms of the Mortgage Note; (26) with
respect to
Adjustable Rate Mortgage Loans, a code indicating the type of
Index, including
the methodology for rounding (e.g., rounded upward, if necessary,
to the
nearest ten thousandth (.0001)) and the applicable time frame for
determining
the Index; (27) the product type of Mortgage Loan (i.e., Fixed
Rate,
Adjustable Rate, First Lien Loan, Second Lien Loan), and with
respect to each
Second Lien Loan, the product type of the related first lien loan;
(28) a code
indicating the purpose of the loan (i.e., purchase, Rate/Term
Refinance or
Cash-Out Refinance); (29) a code indicating the documentation style
(i.e., no
documents, full, alternative, reduced, no income/no asset, stated
income, no
ration, reduced or NIV); (30) asset verification (Y/N); (31) the
loan credit
classification (as described in the Underwriting Guidelines); (32)
whether
such Mortgage Loan provides for a Prepayment Penalty; (33) the
Prepayment
Penalty period of such Mortgage Loan, if applicable; (34) a
description of the
Prepayment Penalty, if applicable; (35) the Mortgage Interest Rate
as of
origination; (36) the credit risk score (FICO score); (37) the date
of
origination; (38) with respect to Adjustable Rate Mortgage Loans,
the Mortgage
Interest Rate adjustment period; (39) with respect to Adjustable
Rate Mortgage
Loans, the Mortgage Interest Rate adjustment percentage; (40) with
respect to
Adjustable Rate Mortgage Loans, the Mortgage Interest Rate floor;
(41) the
Mortgage Interest Rate calculation method (i.e., 30/360, simple
interest,
other); (42) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate
Cap as of the first Interest Rate Adjustment Date; (43) with
respect to each
Adjustable Rate Mortgage Loan, a code indicating whether the
Mortgage Loan
provides for negative amortization; (44) a code indicating whether
the
Mortgage Loan has negative amortization and the maximum of such
negative
amortization; (45) a code indicating whether the Mortgage Loan is a
Balloon
Mortgage Loan; (46) a code indicating whether the Mortgage Loan by
its
original terms or any modifications thereof provides for
amortization beyond
its scheduled maturity date; (47) the original Monthly Payment due;
(48) the
Appraised Value; (49) appraisal type; (50) appraisal date; (51) a
code
indicating whether the Mortgage Loan is covered by a PMI Policy
and, if so,
identifying the PMI Policy provider; (54) the certificate number of
the PMI
Policy, if applicable; (52) the amount of coverage of the PMI
Policy, if
applicable; (53) in connection with a condominium unit, a code
indicating
whether the condominium project where such unit is located is
low-rise or
high-rise; (54) a code indicating whether the Mortgaged Property is
a
leasehold estate; (55) with respect to the related Mortgagor,
the
debt-to-income ratio; (56) sales price; (57) automated valuation
model (AVM);
(58) a code indicating whether the Mortgage Loan is a MERS
Designated Mortgage
Loan and the MERS Identification Number, if applicable; (59) a
field
indicating whether such Mortgage Loan is a Home Loan; and (60) the
DU or LP
number, if applicable. With respect to the Mortgage Loans in the
aggregate,
the related Mortgage Loan Schedule shall set forth the following
information,
as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the
current aggregate outstanding principal balance of the Mortgage
Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; (4)
the
weighted average maturity of the Mortgage Loans; (5) the average
principal
balance of the Mortgage Loans; (6) the applicable Cut-off Date; and
(7) the
applicable Closing Date.
Mortgage Note: The original executed note or other evidence of
the
Mortgage Loan indebtedness of a Mortgagor, including any riders or
addenda
thereto.
Mortgaged Property: With respect to a Mortgage Loan that is not
a
Co-op Loan, the Mortgagor's real property securing repayment of a
related
Mortgage Note, consisting of an
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unsubordinated estate in fee simple or, with respect to real
property located
in jurisdictions in which the use of leasehold estates for
residential
properties is a widely-accepted practice, a leasehold estate, in a
single
parcel or multiple parcels of real property improved by a
Residential
Dwelling. 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.
Mortgagee: The mortgagee or beneficiary named in the Mortgage
and
the successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of
the
Mortgaged Property and the grantor or mortgagor named in the
Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged
Property.
Officer's Certificate: A certificate signed by the Chairman of
the
Board or the Vice Chairman of the Board or a President or a Vice
President and
by the Treasurer or the Secretary or one of the Assistant
Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser
as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel
for the Seller, reasonably acceptable to the Purchaser, provided
that any
Opinion of Counsel relating to (a) the qualification of any account
required
to be maintained pursuant to the Interim Servicing Agreement as an
Eligible
Account (as defined in the Interim Servicing Agreement), (b)
qualification of
the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions,
must be (unless otherwise stated in such Opinion of Counsel) an
opinion of
counsel who (i) is in fact independent of the Seller and any
servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect
financial
interest in the Seller or any servicer of the Mortgage Loans or in
an
Affiliate of either and (iii) is not connected with the Seller or
any servicer
of the Mortgage Loans as an officer, employee, director or person
performing
similar functions.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute
maximum amount by which the Mortgage Interest Rate therein may
increase or
decrease on an Interest Rate Adjustment Date above or below the
Mortgage
Interest Rate previously in effect. The Periodic Rate Cap for each
Adjustable
Rate Mortgage Loan is the rate set forth as such on the related
Mortgage Loan
Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute
maximum amount by which the Mortgage Interest Rate therein may
decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate
previously in
effect.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company,
trust,
unincorporated organization, government or any agency or political
subdivision
thereof.
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PMI Policy: A policy of primary mortgage guaranty insurance
issued
by an insurer acceptable under the Underwriting Guidelines and
qualified to do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the
amount
of any premium or penalty required to be paid by the Mortgagor if
the
Mortgagor prepays such Mortgage Loan as provided in the related
Mortgage Note
or Mortgage.
Principal Prepayment: Any payment or other recovery of principal
on
a Mortgage Loan which is received in advance of its scheduled Due
Date,
including any Prepayment Penalty thereon, and which is not
accompanied by an
amount of interest representing scheduled interest due on any date
or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller in exchange for the Mortgage Loans
purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Each agreement setting forth
the
general terms and conditions of the purchase and sale of the
Mortgage Loans to
be purchased from time to time under this Agreement.
Purchase Price Percentage: The percentage of par (expressed as
decimal) set forth in the related Purchase Price and Terms
Agreement.
Purchaser: Morgan Stanley Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any
successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, 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 was not
affected by the
approval or disapproval of the Mortgage Loan, and such appraiser
and the
appraisal made by such appraiser both satisfied the requirements of
Title XI
of FIRREA and the regulations promulgated thereunder, all as in
effect on the
date the Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the
Seller and
such Person that contemplated that such Person would underwrite
mortgage loans
from time to time, for sale to the Seller, in accordance with
underwriting
guidelines designated by the Seller ("Designated Guidelines") or
guidelines
that do not vary materially from such Designated Guidelines; (ii)
such
Mortgage Loans were in fact underwritten as described in clause (i)
above and
were acquired by the Seller within 180 days after origination;
(iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans
were
originated, used by the Seller in origination of mortgage loans of
the same
type as the Mortgage Loans for the Seller's own account or (y) the
Designated
Guidelines were, at the time such Mortgage Loans were underwritten,
designated
by the Seller on a consistent
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basis for use by lenders in originating mortgage loans to be
purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage
Loans were
acquired by the Seller, pre-purchase or post-purchase quality
assurance
procedures (which may involve, among other things, review of a
sample of
mortgage loans purchased during a particular time period or through
particular
channels) designed to ensure that Persons from which it purchased
mortgage
loans properly applied the underwriting criteria designated by the
Seller.
Qualified Insurer: An insurance company duly authorized and
licensed
where required by law to issue insurance approved as an insurer by
Fannie Mae
and Freddie Mac.
Rate/Term Refinance: A Refinanced Mortgage Loan, in which the
proceeds received were not in excess of the amount of funds
required to repay
the principal balance of any existing first mortgage loan on the
related
Mortgaged Property, pay related closing costs and satisfy any
outstanding
subordinate mortgages on the related Mortgaged Property and did not
provide
incidental cash to the related Mortgagor of more than one percent
(1%) of the
original principal balance of such Mortgage Loan.
Reconstitution: Any Securitization Transaction or a Whole Loan
Transfer.
Reconstitution Agreements: The agreement or agreements entered
into
by the Seller and the Purchaser and/or certain third parties on
the
Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a
Securitization Transaction pursuant to Section 13, including, but
not limited
to, a seller's warranties and servicing agreement with respect to a
Whole Loan
Transfer, and a pooling and servicing agreement and/or
seller/servicer
agreements and related custodial/trust agreement and documents with
respect to
a Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were
not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. Sections229.1100-229.1123, 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
(January 7, 2005)) or by the staff of the Commission, or as may be
provided by
the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating
to a REMIC, which appear at Section 860A through 860G of Subchapter
M of
Chapter 1, Subtitle A of the Code, and related provisions and
regulations,
rulings or pronouncements promulgated thereunder, as the foregoing
may be in
effect from time to time.
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Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified
therein).
REO Property: A Mortgaged Property acquired by the Interim
Servicer
through foreclosure or deed in lieu of foreclosure.
Report Period: The period beginning with the final Business Day
of
the calendar month preceding the current calendar month, and ending
on the
final Business Day of the current calendar month.
Repurchase Price: With respect to any Mortgage Loan, a price
equal
to (A) during the first twelve months following the related Closing
Date (i)
the Adjusted Purchase Price Percentage multiplied by the Stated
Principal
Balance of the Mortgage Loan so repurchased plus (ii) all accrued
and unpaid
interest thereon to the day of the month that such repurchase
occurs (but not
more than 150 days of accrued and unpaid interest), and (B)
thereafter, (i)
the Stated Principal Balance of the Mortgage Loan so repurchased,
plus (ii)
all accrued and unpaid interest thereon to the day of the month
such
repurchase occurs (but not more than 150 days of accrued and unpaid
interest),
plus in the case of either clause (A) or (B) above, any costs and
damages
(including costs and expenses incurred in the enforcement of the
terms of this
Agreement) incurred by the related trust with respect to any
securitization of
the Mortgage Loan in connection with any violation by such Mortgage
Loan prior
to the time of such repurchase of any predatory or abusive lending
law
actually incurred and paid out of or on behalf of the related trust
fund, and
that directly resulted from such violation.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a condominium project or (iv) a
one-family
dwelling in a planned unit development, none of which is a
co-operative,
mobile or Manufactured Home.
RESPA: The Real Estate Settlement Procedures Act, as amended
from
time to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly to an issuing entity in connection with an issuance of
publicly
offered or privately placed, rated or unrated mortgage-backed
securities or
(2) an issuance of publicly offered or privately placed, rated or
unrated
securities, the payments on which are determined primarily by
reference to one
or more portfolios of residential mortgage loans consisting, in
whole or in
part, of some or all of the Mortgage Loans.
Security Agreement: The 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.
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Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Seller Information: As defined in Subsection 34.04(a).
Servicing Fee: With respect to each Mortgage Loan subject to
the
Interim Servicing Agreement, a fee payable monthly equal to twelve
dollars
($12) per Mortgage Loan for the first sixty (60) days after the
related
Closing Date. In the event the Purchaser requires the Seller to
service the
Mortgage Loans beyond such sixty (60) day period, the Purchaser
shall pay the
Seller fifteen dollars ($15) per Mortgage Loan for each subsequent
sixty (60)
day period; provided, however, that such interim servicing fee
shall be paid
monthly, in arrears, and for any partial month, such interim
servicing fee
shall be prorated on a per diem basis.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all
documents in
the Mortgage File which are not delivered to the Purchaser or the
Custodian
and copies of the Mortgage Loan Documents set forth in Section 2 of
the
Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies
received
by the Seller for servicing the Mortgage Loans; (c) any late fees,
penalties
or similar payments with respect to the Mortgage Loans; (d) all
agreements or
documents creating, defining or evidencing any such servicing
rights to the
extent they relate to such servicing rights and all rights of the
Seller
thereunder; (e) Escrow Payments or other similar payments with
respect to the
Mortgage Loans and any amounts actually collected by the Seller
with respect
thereto; (f) all accounts and other rights to payment related to
any of the
property described in this paragraph; and (g) any and all
documents, files,
records, servicing files, servicing documents, servicing records,
data tapes,
computer records, or other information pertaining to the Mortgage
Loans or
pertaining to the past, present or prospective servicing of the
Mortgage
Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB,
with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies Inc., and any successor thereto.
Standard & Poor's Glossary: For each Mortgage Loan Package,
Appendix
E to the Standard & Poor's LEVELS(R) Glossary, as attached to
Exhibit D of the
related Assignment and Conveyance.
Stated Principal Balance: As to each Mortgage Loan on any date
of
determination, (i) the principal balance of such Mortgage Loan at
the related
Cut-off Date after giving effect to payments of principal due on or
before
such date, to the extent actually received, minus (ii) all amounts
previously
distributed to the Purchaser with respect to the related Mortgage
Loan
representing payments or recoveries of principal on such Mortgage
Loan.
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Static Pool Information: Static pool information as described
in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB (to the extent
available to
the Seller using commercially reasonably efforts).
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of
the
indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: In the event the Interim Servicer is terminated
as
servicer of a Mortgage Loan pursuant to the Interim Servicing
Agreement, the
date on which the Purchaser, or its designee, shall receive the
transfer of
servicing responsibilities and begin to perform the servicing of
such Mortgage
Loans, and the Interim Servicer shall cease all servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the
Seller,
a copy of which is attached hereto as Exhibit G and a then-current
copy of
which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an
aggregate
actual unpaid principal balance on the related Cut-off Date in an
amount as
set forth in the related Purchase Price and Terms Agreement, or in
such other
amount as agreed by the Purchaser and the Seller as evidenced by
the actual
aggregate unpaid principal balance of the Mortgage Loans accepted
by the
Purchaser on each Closing Date, together with the related Mortgage
Files and
all rights and obligations arising under the documents contained
therein.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the
Mortgage Loans
to be purchased on each Closing Date in accordance with the related
Purchase
Price and Terms Agreement and this Agreement (each, a "Preliminary
Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the
Mortgage Loans to be purchased on a particular Closing Date to the
Purchaser
at least five (5) Business Days prior to the related Closing Date.
The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with
those Mortgage Loans which have not been funded prior to the
related Closing
Date deleted.
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SECTION 4. Purchase Price; Principal Prepayments.
Subsection 4.01 Purchase Price.
The Purchase Price for the Mortgage Loans and Servicing Rights
listed on the related Mortgage Loan Schedule in a Mortgage Loan
Package shall
be the Purchase Price Percentage, multiplied by the aggregate
actual unpaid
principal balance as of the related Cut-off Date after application
of
scheduled payments of principal due on or before the related
Cut-off Date, but
only to the extent such payments were actually received. If so
provided in the
related Purchase Price and Terms Agreement, portions of the
Mortgage Loans
and/or the Servicing Rights shall be priced and paid for
separately.
In addition to the Purchase Price as described above, the
Purchaser
shall pay to the Seller, at closing, accrued interest from the last
"interest
paid to" date through the day immediately preceding the related
Closing Date,
inclusive, on the aggregate actual unpaid principal amount of the
related
Mortgage Loans as of the related Cut-off Date at the weighted
average Mortgage
Interest Rate of those Mortgage Loans. The Purchase Price plus
accrued
interest as set forth in the preceding paragraph shall be paid to
the Seller
by wire transfer of immediately available funds to an account
designated by
the Seller in writing.
The Purchaser shall own and be entitled to receive with respect
to
each Mortgage Loan purchased, (1) all recoveries of principal
collected after
the related Cut-off Date and (2) all payments of interest on the
Mortgage
Loans net of the Servicing Fee (minus that portion of any such
interest
payment that is allocable to the period prior to the related
Cut-off Date).
All payments of principal and interest, Prepayment Penalties (other
than
Prepayment Penalties retained by the Seller pursuant to Subsection
4.02 below)
less the applicable Servicing Fee, due on a Due Date following the
related
Cut-off Date shall belong to the Purchaser.
Subsection 4.02 Near-term Principal Prepayments.
In the event any Principal Prepayment is made by a Mortgagor on
or
prior to thirty (30) days (or such other period specified in the
related
Purchase Price and Terms Agreement) after the related Closing Date,
the Seller
shall remit to the Purchaser an amount, with respect to any
Mortgage Loan,
equal to the excess, if any, of the Purchase Price Percentage for
such
Mortgage Loan over par multiplied by the amount of such Principal
Prepayment
("Premium Recapture Amount"); provided, however, that such Premium
Recapture
Amount shall be subject to reduction (the maximum amount of such
reduction
limited to the Premium Recapture Amount) to the extent of any
legally
enforceable Prepayment Penalty remitted to, or received by, the
Purchaser in
connection with such Mortgage Loan. Such remittance shall be made
by the
Seller to Purchaser no later than the fifth (5th) Business Day
following
receipt of notice of such Principal Prepayment by the Seller. The
Seller shall
be entitled to the benefit of any Prepayment Penalty collected from
the
Mortgagor in connection with a Principal Prepayment in full made
during such
thirty (30) day period (or such other period specified in the
related Purchase
Price and Terms Agreement) to the extent such Prepayment Penalty is
applied to
reduce the Premium Recapture Amount the Seller would otherwise be
required to
remit to the Purchaser pursuant to this Subsection 4.02. Any
Prepayment
Penalty collected from the Mortgagor in connection with a Principal
Prepayment
in full after such thirty (30) day period (or
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such other period specified in the related Purchase Price and Terms
Agreement)
shall be remitted to, or retained by, the Purchaser. If demand for
payment of
any amount described in this paragraph is not made prior to thirty
(30) days
after the date of any Principal Prepayment, the Seller shall have
no
obligation to pay the amount described in this paragraph.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the related Closing
Date,
the Seller shall either (a) deliver to the Purchaser or its
designee in
escrow, for examination with respect to each Mortgage Loan to be
purchased,
the related Mortgage File, including a copy of the Assignment of
Mortgage,
pertaining to each Mortgage Loan, or (b) make the related Mortgage
File
available to the Purchaser for examination at such other location
as shall
otherwise be acceptable to the Purchaser. Such examination of the
Mortgage
Files may be made by the Purchaser or its designee at any
reasonable time
before or after the related Closing Date. If the Purchaser makes
such
examination prior to the related Closing Date and determines, in
its sole
discretion, that any Mortgage Loans do not conform to any of the
requirements
set forth in the Purchase Price and Terms Agreement, or as an
Exhibit annexed
thereto, the Mortgage Loan may be rejected for purchase by the
Purchaser and
such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule.
The Purchaser may, at its option and without notice to the Seller,
purchase
some or all of the Mortgage Loans without conducting any partial or
complete
examination. The fact that the Purchaser or its designee has
conducted or has
failed to conduct any partial or complete examination of the
Mortgage Files
shall not impair in any way the Purchaser's (or any of its
successor's) rights
to demand repurchase or other relief as provided in this Agreement.
In the
event that the Seller fails to deliver the Mortgage File with
respect to any
Mortgage Loan, the Seller shall, upon the request of the Purchaser,
repurchase
such Mortgage Loan at the price and in the manner specified in
Subsection
9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage
Loan
Schedule with respect to the related Mortgage Loan Package to be
purchased on
each Closing Date, shall execute and deliver an Assignment and
Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment
and
Conveyance Agreement"). The Seller shall ensure that the contents
of each
Servicing File, which required to be retained by or delivered to
the Interim
Servicer to service the Mortgage Loans pursuant to the Interim
Servicing
Agreement and thus not delivered to the Purchaser, or its designee,
are and
shall be held in trust by the Interim Servicer for the benefit of
the
Purchaser as the owner thereof. The Seller agrees that the Interim
Servicer's
possession of any portion of each such Mortgage File is at the will
of the
Purchaser for the sole purpose of facilitating servicing of the
Mortgage Loans
pursuant to this Agreement, and such retention and possession by
the Interim
Servicer shall be in a custodial capacity only. The ownership of
each Mortgage
Note, each Mortgage and the contents of each Mortgage File is
vested in the
Purchaser and the ownership of all records and documents with
respect to the
related Mortgage Loan prepared by or which come into the possession
of the
Interim Servicer shall immediately vest in the Purchaser and shall
be retained
and maintained, in trust, by the Interim Servicer at the will of
the Purchaser
in such custodial capacity only. The Seller shall
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cause the Servicing File retained by the Interim Servicer pursuant
to this
Agreement to be appropriately identified in the Seller's computer
system
and/or books and records, as appropriate, to clearly reflect the
sale of the
related Mortgage Loan to the Purchaser. The Seller shall cause the
Interim
Servicer to release from its custody the contents of any Servicing
File
retained by it only in accordance with this Agreement or the
Interim Servicing
Agreement, except when such release is required in connection with
a
repurchase of any such Mortgage Loan pursuant to Subsection 9.03 or
if
required under applicable law or court order.
Subsection 6.02 Books and Records.
Record title to each Mortgage and the related Mortgage Note as
of
the related Closing Date shall be in the name of the Seller, an
Affiliate of
the Seller, the Purchaser or one or more designees of the
Purchaser, as the
Purchaser shall select; provided, however, that if a Mortgage has
been
recorded in the name of MERS or its designee, the Seller is shown
as the owner
of the related Mortgage Loan on the records of MERS for purposes of
the system
of recording transfers of beneficial ownership of mortgages
maintained by
MERS. Notwithstanding the foregoing, ownership of each Mortgage and
related
Mortgage Note shall be vested solely in the Purchaser or the
appropriate
designee of the Purchaser, as the case may be. All rights arising
out of the
Mortgage Loans including, but not limited to, all funds received by
the Seller
or the Interim Servicer after the related Cut-off Date on or in
connection
with a Mortgage Loan shall be vested in the Purchaser or one or
more designees
of the Purchaser; provided, however, that all funds received on or
in
connection with a Mortgage Loan shall be received and held by the
Seller or
the Interim Servicer in trust for the benefit of the Purchaser or
the
appropriate designee of the Purchaser, as the case may be, as the
owner of the
Mortgage Loans pursuant to the terms of this Agreement.
The Seller shall be or shall cause the Interim Servicer to be
responsible for maintaining, and shall maintain, a complete set of
books and
records for each Mortgage Loan which shall be marked clearly to
reflect the
ownership of each Mortgage Loan by the Purchaser. In particular,
the Seller
shall or shall cause the Interim Servicer to maintain in its
possession,
available for inspection by the Purchaser, and shall deliver to the
Purchaser
upon demand, evidence of compliance with all federal, state and
local laws,
rules and regulations, and all requirements of the Seller,
including but not
limited to documentation as to the method used in determining
the
applicability of the provisions of the National Flood Insurance Act
of 1968,
as amended, to the Mortgaged Property, documentation evidencing
insurance
coverage and periodic inspection reports, as required by the
Seller. The
Seller or Interim Servicer shall retain such documents in the form
of imaged
copies on microfilm, microfiche or any other imaging or electronic
records
retention system so long as such system complies with all of the
Seller's or
Interim Servicer's requirements relating to the retention and
maintenance of
such documents. In the event the Purchaser is required to submit
information
regarding the location or status of the original of such document
for
evidentiary purposes in a legal proceeding, the Seller shall
cooperate with
all reasonable requests of the Purchaser to provide information
regarding
Seller's ordinary course of business practices with respect to such
imaged
copies of documents.
It is the express intention of the parties that the
transactions
contemplated by this Agreement and the related Purchase Price and
Terms
Agreement be, and be construed as, a sale of the Mortgage Loans,
and the
Servicing Rights by the Seller and not a pledge of the Mortgage
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Loans or the Servicing Rights by the Seller to the Purchaser to
secure a debt
or other obligation of the Seller. Consequently, the sale of each
Mortgage
Loan and the Servicing Rights shall be reflected as a sale on the
Seller's
business records, tax returns and financial statements.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than
two (2) Business Days prior to the related Closing Date those
Mortgage Loan
Documents set forth on Exhibit A-1 hereto as required by the
Custodial
Agreement with respect to each Mortgage Loan set forth on the
related Mortgage
Loan Schedule.
In connection with the foregoing, the Seller shall indemnify
the
Purchaser and its present and former directors, officers, employees
and agents
and any Successor Servicer and its present and former directors,
officers,
employees and agents, and hold such parties harmless against any
losses,
damages, penalties, fines, forfeitures, legal fees and expenses and
related
costs, judgments, and other costs and expenses based on or grounded
upon, or
resulting from, the fact that no Mortgage Loan is covered by an
ALTA or CLTA
lender's title insurance policy. For purposes of the previous
sentence,
"Purchaser" shall mean the Person then acting as the Purchaser
under this
Agreement and any and all Persons who previously were "Purchasers"
under this
Agreement and "Successor Servicer" shall mean any Person designated
as the
Successor Servicer pursuant to this Agreement and any and all
Persons who
previously were "Successor Servicers" pursuant to this
Agreement.
The Custodian shall certify its receipt of all such Mortgage
Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the
related Closing Date, as evidenced by the Initial Certification of
the
Custodian in the form annexed to the Custodial Agreement. The
Purchaser shall
pay all fees and expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward
to
the Custodian, or to such other Person as the Purchaser shall
designate in
writing, original documents evidencing an assumption,
modification,
consolidation or extension of any Mortgage Loan entered into in
accordance
with this Agreement within two weeks of their execution, provided,
however,
that the Seller shall provide the Custodian, or to such other
Person as the
Purchaser shall designate in writing, with a certified true copy of
any such
document submitted for recordation within two weeks of its
execution, and
shall promptly provide the original of any document submitted for
recordation
or a copy of such document certified by the appropriate public
recording
office to be a true and complete copy of the original within two
(2) weeks
following receipt of the original document by the Interim Servicer;
provided,
however, that such original recorded document or certified copy
thereof shall
be delivered to the Purchaser no later than 180 days following the
related
Closing Date, unless there has been a delay at the applicable
recording
office.
If the Seller cannot deliver the original recorded Mortgage
Loan
Documents on the related Closing Date, the Seller shall, promptly
upon receipt
thereof and in any case not later than 120 days from the related
Closing Date,
deliver such original documents, including original recorded
documents, to the
Purchaser (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 120 days of
the related
Closing Date, solely due to
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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 such document to Purchaser within such time period as
specified in an
Officer's Certificate or, if delivery is not made by the expiration
of such
time period, Seller shall use commercially reasonable efforts to
cause
delivery as soon as possible thereafter. In any case, if the Seller
cannot
deliver the original recorded Mortgage Loan Documents within 240
days of the
related Closing Date, the related Mortgage Loan shall, upon the
request of the
Purchaser, be repurchased by the Seller at the price and in the
manner
specified in Subsection 9.03.
For any Mortgage Loan which is not a MERS Mortgage Loan, the
Seller
shall prepare the Assignments of Mortgage and, at time of the
related closing
date the Purchaser shall deduct $25 for each mortgage loan as
recording fees
in transferring all original documents to the Purchaser.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer to, have
an
internal quality control program that verifies, on a regular basis,
the
existence and accuracy of the legal documents, credit documents,
property
appraisals, and underwriting decisions. The program shall include
evaluating
and monitoring the overall quality of the Seller loan production
and the
servicing activities of the Interim Servicer. The program is to
ensure that
the Mortgage Loans are originated in accordance with the
Underwriting
Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard
against errors and omissions by officers, employees, or other
authorized
persons.
Subsection 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the
Purchaser as the
Investor and the Custodian as custodian, and no Person shall be
listed as
Interim Funder on the MERS System. In addition, on or prior to the
related
Closing Date, Seller shall provide the Custodian and the Purchaser
with a MERS
Report listing the Purchaser as the Investor, the Custodian as
custodian and
no Person as Interim Funder with respect to each MERS Designated
Mortgage
Loan.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser
on
a servicing released basis. Subject to and upon the terms and
conditions of
this Agreement and the Interim Servicing Agreement (with respect to
each
Mortgage Loan, for an interim period, as specified therein), the
Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser
the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract
servicer
of the Mortgage Loans for an interim period pursuant to and in
accordance with
the terms and conditions contained in the Interim Servicing
Agreement (with
respect to each Mortgage Loan, for an interim period, as specified
therein).
The Seller shall cause the Interim Servicer to execute the Interim
Servicing
Agreement on the initial Closing Date.
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The Seller shall cause the Interim Servicer to transfer the
servicing of the Mortgage Loans on each Transfer Date in accordance
with the
terms of the Interim Servicing Agreement.
SECTION 8. [RESERVED].
SECTION 9. Representations, Warranties and Covenants of the
Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser
that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a national
association duly organized, validly existing and in good standing
under the
laws of the United States of America and is and will remain in
compliance with
the laws of each state in which any Mortgaged Property is located
to the
extent necessary to ensure the enforceability of each Mortgage Loan
and the
servicing of the Mortgage Loan in accordance with the terms of this
Agreement.
The Seller 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 in any event the 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 sale of the Mortgage
Loans and
Servicing Rights in accordance with the terms of this Agreement and
the
related Purchase Price and Terms Agreement. No licenses or
approvals obtained
by the Seller have been suspended or revoked by any court,
administrative
agency, arbitrator or governmental body and no proceedings are
pending which
might result in such suspension or revocation. The Seller has the
full power
and authority and legal right to hold, transfer and convey each
Mortgage Loan
(including the Servicing Rights), to sell each Mortgage Loan and
the Servicing
Rights, and to execute, deliver and perform, and to enter into and
consummate,
all transactions contemplated by this Agreement and the related
Purchase Price
and Terms Agreement and to conduct its business as presently
conducted. The
Seller 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 the related Purchase Price and Terms Agreement,
assuming due
authorization, execution and delivery by the Purchaser, and each
Assignment of
Mortgage 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. The Seller
is properly
qualified to service the Mortgage Loans and has been servicing the
Mortgage
Loans prior to the related Cut-off Date;
(b) No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body or federal or
state
regulatory authority having jurisdiction
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<PAGE>
over the Seller is required for the execution, delivery and
performance by the
Seller of, or compliance by the Seller with, this Agreement or the
sale of the
Mortgage Loans and Servicing Rights and delivery of the Mortgage
Files to the
Purchaser or the consummation of the transactions contemplated by
this
Agreement, except for such consents, approvals, authorizations or
orders, if
any, that have been obtained prior to the related Closing Date. The
Seller is
not in violation of, and the execution and delivery of this
Agreement or the
related Purchase Price and Terms Agreement by the Seller and its
performance
and compliance with the terms of this Agreement will not constitute
a
violation with respect to, any order or decree of any court or any
order or
regulation of any federal, state, municipal or governmental agency
having
jurisdiction over the Seller or its assets, which violation might
have
consequences that would materially and adversely affect the
condition
(financial or otherwise) or the operation of the Seller or its
assets or might
have consequences that would materially and adversely affect the
performance
of its obligations and duties hereunder;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement and the related
Purchase Price and
Terms Agreement are in the ordinary course of business of the
Seller, and the
transfer, assignment and conveyance of the Mortgage Notes, the
Mortgages
and/or the Servicing Rights by the Seller pursuant to this
Agreement are not
subject to the bulk transfer or any similar statutory provisions in
effect in
any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement or the related Purchase Price and Terms Agreement by the
Seller, nor
the origination or purchase of the Mortgage Loans by the Seller,
the sale of
the Mortgage Loans or the Servicing Rights to the Purchaser, the
consummation
of the transactions contemplated hereby, or the performance of or
compliance
with the terms and conditions of this Agreement or the related
Purchase Price
and Terms Agreement will conflict with any of the terms, conditions
or
provisions of the Seller's articles of incorporation or by-laws, or
constitute
a default under or result in a breach or acceleration of, any
material
contract, agreement or other instrument to which the Seller is a
party or
which may be applicable to the Seller or its assets, or result in
the material
violation of any law, rule, regulation, order, judgment or decree
to which the
Seller or its properties are subject, or impair the ability of the
Purchaser
to realize on the Mortgage Loans;
(e) No Litigation Pending. There are no actions, suits or
proceedings against, or, to Seller's knowledge, threatened
investigations of,
the Seller before any court, administrative or other tribunal
that,
individually or in the aggregate, (a) might prohibit its entering
into this
Agreement or the related Purchase Price and Terms Agreement, (b)
seeks to
prevent the sale of the Mortgage Loans, the sale of the Servicing
Rights or
the consummation of the transactions contemplated by this
Agreement, (c) might
prohibit or materially and adversely affect the performance by the
Seller of
its obligations under, or the validity or enforceability of, this
Agreement or
the Mortgage Loans or (d) is reasonably likely to have a material
adverse
effect on the financial condition of the Seller;
(f) Ability to Perform; Solvency. The Seller does not believe,
nor
does it have any reason or cause to believe, that it cannot perform
each and
every covenant contained in this Agreement or the related Purchase
Price and
Terms Agreement. The Seller is solvent and the sale of the Mortgage
Loans and
the Servicing Rights will not cause the Seller to become
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insolvent. The sale of the Mortgage Loans and Servicing Rights is
not
undertaken with the intent to hinder, delay or defraud any of the
Seller's
creditors;
(g) [Reserved];
(h) [Reserved];
(i) Financial Statements. The Seller has delivered to the
Purchaser
financial statements as to its last two complete fiscal years and
any later
quarter ended more than 60 days prior to the execution of this
Agreement. All
such financial statements fairly present the pertinent results of
operations
and changes in financial position for each of such periods and the
financial
position at the end of each such period of the Seller and its
subsidiaries and
have been prepared in accordance with generally accepted accounting
principles
consistently applied throughout the periods involved, except as set
forth in
the notes thereto. In addition, the Seller has delivered
information as to its
loan gain and loss experience in respect of foreclosures and its
loan
delinquency experience for the immediately preceding three-year
period, in
each case with respect to mortgage loans owned by it and such
mortgage loans
serviced for others during such period, and all such information so
delivered
shall be true and correct in all material respects. There has been
no change
in the business, operations, financial condition, properties or
assets of the
Seller since the date of the Seller's financial statements that
would have a
material adverse effect on its ability to perform its obligations
under this
Agreement. The Seller has completed any forms requested by the
Purchaser in a
timely manner and in accordance with the provided instructions;
(j) [Reserved];
(k) [Reserved];
(l) [Reserved];
(m) No Brokers. The Seller has not dealt with any broker,
investment
banker, agent or other person that may be entitled to any
commission or
compensation in connection with the sale of the Mortgage Loans or
the
Servicing Rights;
(n) Sale Treatment. The Seller will treat the sale of the
Mortgage
Loans and the Servicing Rights to the Purchaser as a sale for
reporting and
accounting purposes and, to the extent appropriate, for federal
income tax
purposes;
(o)
[Reserved];
(p) Reasonable Purchase Price. The consideration received by
the
Seller upon the sale of the Mortgage Loans under this Agreement and
the
Purchase Price and Terms Agreement constitutes fair consideration
and
reasonably equivalent value for the Mortgage Loans;
(q) [Reserved]; and
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<PAGE>
(r) The Seller is a member of MERS in good standing, and will
comply
in all material respects with the rules and procedures of MERS in
connection
with the servicing of the MERS Mortgage Loans for as long as such
Mortgage
Loans are registered with MERS.
Subsection 9.02 Representations and Warranties Regarding
Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that,
as
to each Mortgage Loan, as of the related Closing Date for such
Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in
the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to
the
related Closing Date for the Mortgage Loan under the terms of the
Mortgage
Note have been made and credited. No payment required under the
Mortgage Loan
is 30 days or more delinquent nor has any payment under the
Mortgage Loan been
30 days or more delinquent at any time since the origination of the
Mortgage
Loan;
(c) No Outstanding Charges. There are no defaults in complying
with
the terms of the Mortgage, and all taxes, governmental assessments,
insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground
rents which previously became due and owing have been paid, or an
escrow of
funds has been established in an amount sufficient to pay for every
such item
which remains unpaid and which has been assessed but is not yet due
and
payable. The Seller has not advanced funds, or induced, solicited
or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or
indirectly, for the payment of any amount required under the
Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or
date of
disbursement of the Mortgage Loan proceeds, whichever is earlier,
to the day
which precedes by one month the related Due Date of the first
installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
and
Mortgage have not been impaired, waived, altered or modified in any
respect,
from the date of origination except by a written instrument which
has been
recorded, if necessary to protect the interests of the Purchaser,
and which
has been delivered to the Custodian or to such other Person as the
Purchaser
shall designate in writing, and the terms of which are reflected in
the
related Mortgage Loan Schedule. The substance of any such waiver,
alteration
or modification has been approved by the issuer of any related PMI
Policy and
the title insurer, if any, to the extent required by the policy,
and its terms
are reflected on the related Mortgage Loan Schedule, if applicable.
No
Mortgagor has been released, in whole or in part, except in
connection with an
assumption agreement, approved by the issuer of any related PMI
Policy and the
title insurer, to the extent required by the policy, and which
assumption
agreement is part of the Mortgage Loan File delivered to the
Custodian or to
such other Person as the Purchaser shall designate in writing and
the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of
rescission, set-off, counterclaim or defense, including without
limitation the
defense of usury, nor will the
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operation of any of the terms of the Mortgage Note or the Mortgage,
or the
exercise of any right thereunder, render either the Mortgage Note
or the
Mortgage unenforceable, in whole or in part, or subject to any
right of
rescission, set-off, counterclaim or defense, including without
limitation the
defense of usury, and no such right of rescission, set-off,
counterclaim or
defense has been asserted with respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the related
Mortgage,
the buildings and improvements upon each Mortgaged Property are
insured by a
Qualified Insurer pursuant to a standard, valid and existing hazard
insurance
policy acceptable to Fannie Mae or Freddie Mac which policy insures
against
loss by fire, hazards of extended coverage and such other hazards
as are
provided for in the Fannie Mae Guides or Freddie Mac Guide
representing
coverage in an amount not less than the lesser of (a) the maximum
insurable
value of the improvements securing such Mortgage Loan and (b) the
outstanding
principal balance of the related Mortgage Loan, but in no event an
amount less
than an amount that is required to prevent the Mortgagor from being
deemed to
be a co-insurer thereunder. If the Mortgaged Property is in an area
identified
in the Federal Register by the Federal Emergency Management Agency
as having
special flood hazards, a flood insurance policy in a form meeting
the
requirements of the current guidelines of the Flood Insurance
Administration
(which policy conforms to Fannie Mae or Freddie Mac requirements)
is in effect
with respect to such Mortgaged Property with a Qualified Insurer in
an amount
representing coverage not less than the least of (a) the
outstanding Stated
Principal Balance of the Mortgage Loan, (b) the maximum insurable
value of the
improvements securing such Mortgage Loan or (c) the maximum amount
of
insurance that is available under federal law. All individual
insurance
policies contain a standard mortgagee clause naming the Seller or
the original
holder of the Mortgage, and its successors in interest, as loss
payee, and all
of the premiums due and payable thereon have been paid; the
Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's
cost and expense, and upon the Mortgagor's failure to do so,
authorizes the
holder of the Mortgage to obtain and maintain such insurance at
the
Mortgagor's cost and expense and to seek reimbursement therefor
from the
Mortgagor. Neither the Seller (nor any prior originator or servicer
of any of
the Mortgage Loans) nor any Mortgagor has engaged in any act or
omission which
has impaired or would impair the coverage of any such policy, the
benefits of
the endorsement provided for herein, or the validity and binding
effect of
either. All such insurance policies contain a standard mortgagee
clause naming
Seller, its successors and assigns as loss payee and contain a
clause that the
insurer will notify the named mortgagee at least thirty (30) days
prior to any
reduction in coverage or cancellation of the policy. 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 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 including,
without
limitation, no unlawful fee, commission, kickback or other
unlawful
compensation or value of any kind has been or will be received,
retained or
realized by any attorney, firm or other person or entity, and no
such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any
federal, state or local law including, without limitation,
usury,
truth-in-lending, real estate
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settlement procedures, consumer credit protection, predatory,
abusive and fair
lending, equal credit opportunity and disclosure laws applicable to
the
Mortgage Loan, including, without limitation, any provisions
relating to a
Prepayment Penalty have been complied with, the consummation of
the
transactions contemplated hereby will not involve the violation of
any such
laws or regulations, and the Seller shall maintain in its
possession,
available for the Purchaser's inspection, and shall deliver to the
Purchaser
upon demand, evidence of compliance with all such requirements.
This
representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in
part, and the
Mortgaged Property has not been released from the lien of the
Mortgage, in
whole or in part, nor has any instrument been executed that would
effect any
such release, cancellation, subordination or rescission. The Seller
has not
waived the performance by the Mortgagor of any action, if the
Mortgagor's
failure to perform such action would cause the Mortgage Loan to be
in default,
nor has the Seller waived any default resulting from any action or
inaction by
the Mortgagor;
(i) Type of Mortgaged Property. With respect to a Mortgage Loan
that
is not a Co-op Loan and is not secured by an interest in a
leasehold estate,
the Mortgaged Property is a fee simple estate that consists of a
single parcel
of real property with a detached single family residence erected
thereon, or a
two- to four-family dwelling, or an individual residential
condominium unit in
a condominium project, or an individual unit in a planned unit
development,
(or, with respect to each Co-op Loan, an individual unit in a
residential
cooperative housing corporation); provided, however, that any
condominium
unit, planned unit development or residential cooperative housing
corporation
shall conform with the Underwriting Guidelines. Any condominium
unit or
planned unit development is "warrantable" with respect thereto
or
"nonwarrantable" if underwritten in accordance with the
Underwriting
Guidelines. No portion of the Mortgaged Property (or underlying
Mortgaged
Property, in the case of a Co-op Loan) is used for commercial
purposes, and
since the date of origination, no portion of the Mortgaged Property
has been
used for commercial purposes; provided, that Mortgaged Properties
which
contain a home office shall not be considered as being used for
commercial
purposes as long as the Mortgaged Property has not been altered for
commercial
purposes and is not storing any chemicals or raw materials other
than those
commonly used for homeowner repair, maintenance and/or household
purposes. No
such residence is a mobile home. None of the Mortgage Loans are
considered
agricultural loans. No Mortgaged Property consists of a log home
except as
permitted pursuant to the Fannie Mae guidelines, an earthen home,
underground
home or a home which is situated on more than forty acres of
property. Any
Mortgage Property secured by a leasehold estate was underwritten in
accordance
with the Underwriting Guidelines. None of the Mortgage Loans are
made for the
purchase of land only. This representation and warranty is a Deemed
Material
and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting,
enforceable and perfected, first lien (with respect to a First Lien
Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged
Property,
including all buildings and improvements on the Mortgaged Property
and all
installations and mechanical, electrical, plumbing, heating and
air
conditioning systems located in or annexed to such buildings, and
all
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additions, alterations and replacements made at any time with
respect to the
foregoing. The lien of the Mortgage is subject only to:
(i) with
respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(ii) the lien
of current real property taxes and assessments
not yet due and payable;
(iii) covenants,
conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the
originator of the Mortgage Loan and (A) specifically
referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan or (B) which do
not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iv) other
matters to which like properties are commonly
subject which do not materially interfere with the
benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of
the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and
creates a valid, subsisting, enforceable and perfected first lien
(with
respect to a First Lien Loan) or second lien (with respect to a
Second Lien
Loan) and first priority (with respect to a First Lien Loan) or
second
priority (with respect to a Second Lien Loan) security interest on
the
property described therein and the Seller has full right to sell
and assign
the same to the Purchaser.
With respect to any Co-op Loan, the related Mortgage is a
valid,
subsisting and enforceable first priority security interest on the
related
cooperative shares securing the Mortgage Note, subject only to (a)
liens of
the related residential cooperative housing corporation for unpaid
assessments
representing the Mortgagor's pro rata share of the related
residential
cooperative housing corporation's payments for its blanket
mortgage, current
and future real property taxes, insurance premiums, maintenance
fees and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security interest intended to be provided
by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal,
valid and
binding obligation of the maker thereof enforceable in accordance
with its
terms (including, without limitation, any provisions therein
relating to
Prepayment Penalties). All parties to the Mortgage Note, the
Mortgage and any
other such related agreement had legal capacity to enter into the
Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and
any such
agreement, and the Mortgage Note, the
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Mortgage and any other such related agreement have been duly and
properly
executed by other such related parties. No fraud, error,
omission,
misrepresentation, negligence or similar occurrence with respect to
a Mortgage
Loan has taken place on the part of the Seller in connection with
the
origination of the Mortgage Loan or in the application of any
insurance in
relation to such Mortgage Loan. The documents, instruments and
agreements
submitted for loan underwriting were not falsified and contain no
untrue
statement of material fact or omit to state a material fact
required to be
stated therein or necessary to make the information and statements
therein not
misleading. No fraud, error, omission, misrepresentation,
negligence or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of any
Person, including without limitation, the Mortgagor, any appraiser,
any builder
or developer, or any other party involved in the origination of the
Mortgage
Loan or in the application for any insurance in relation to such
Mortgage Loan.
The Seller has reviewed all of the documents constituting the
Servicing File and
has made such inquiries as it deems necessary to make and confirm
the accuracy
of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed
and 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 improvement and as to
disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses
incurred in making or closing the Mortgage Loan and the recording
of the
Mortgage were paid, and the Mortgagor is not entitled to any refund
of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder
of
the Mortgage Loan 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
Custodian, the Purchaser or the Purchaser's designee, in trust only
for the
purpose of servicing and supervising the servicing of each Mortgage
Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible
and marketable title thereto, and has full right to transfer and
sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity,
participation interest, lien, pledge, charge, claim or security
interest, and
has full right and authority subject to no interest or
participation of, or
agreement with, any other party, to sell and assign each Mortgage
Loan pursuant
to this Agreement and following the sale of each 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. After the related 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;
(n) Doing Business. All parties which have had any interest in
the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1) in
compliance with any and all applicable licensing requirements of
the laws of the
state wherein the Mortgaged Property is located, and (2) either (i)
organized
under the laws of such state, or (ii) qualified to do business in
such state, or
(iii) a federal savings and loan association, a savings bank or a
national bank
having a principal office in such state, or (3) not doing business
in such
state;
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<PAGE>
(o) CLTV, LTV, PMI Policy. Except as specified in the related
Purchase
Price and Terms Agreement, no Mortgage Loan that is a Second Lien
Loan has a
CLTV greater than 100% and no Mortgage Loan has an LTV greater than
100%. Any
Mortgage Loan that had at the time of origination an LTV in excess
of 80% is
insured as to payment defaults by a PMI Policy. Any PMI Policy in
effect covers
the related Mortgage Loan for the life of such Mortgage Loan. All
provisions of
such PMI Policy have been and are being complied with, such policy
is in full
force and effect, and all premiums due thereunder have been paid.
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 PMI Policy obligates the Mortgagor thereunder to
maintain the
PMI Policy and to pay all premiums and charges in connection
therewith. The
Mortgage Interest Rate for the Mortgage Loan as set forth on the
related
Mortgage Loan Schedule is net of any such insurance premium if the
related PMI
Policy is lender-paid;
(p) Title Insurance. With respect to a Mortgage Loan which is not
a
Co-op Loan, the Mortgage Loan is covered by an ALTA lender's title
insurance
policy or other equivalent form of policy or insurance acceptable
to Fannie Mae
or Freddie Mac and each such title insurance policy is issued by a
title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do
business in the
jurisdiction where the Mortgaged Property is located, insuring the
Seller, its
successors and assigns, as to the first (with respect to a First
Lien Loan) or
second (with respect to a Second Lien Loan) priority lien of the
Mortgage in the
original principal amount of the Mortgage Loan (or to the extent a
Mortgage Note
provides for negative amortization, the maximum amount of negative
amortization
in accordance with the Mortgage), subject only to the exceptions
contained in
clauses (i) and (ii) of clause (j) of this Subsection 9.02, and in
the case of
Adjustable Rate 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 to the Mortgage Interest Rate and 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.
Additionally, such lender's title insurance policy affirmatively
insures ingress
and egress, and against encroachments by or upon the Mortgaged
Property or any
interest therein. The Seller, its successor and assigns, are the
sole insured of
such lender's title insurance policy, and such lender's title
insurance policy
is valid and remains in full force and effect and will be in 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
