Exhibit 99.11b
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SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
MORGAN STANLEY MORTGAGE CAPITAL INC.,
Purchaser
LYDIAN PRIVATE BANK,
Seller
Dated as of September 1, 2006
Conventional,
Fixed and Adjustable Rate
Residential Mortgage Loans
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TABLE OF CONTENTS
Page
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SECTION 1.
DEFINITIONS.......................................................1
SECTION 2.
AGREEMENT TO
PURCHASE............................................15
SECTION 3.
MORTGAGE
SCHEDULES...............................................15
SECTION 4.
PURCHASE
PRICE...................................................15
SECTION 5.
EXAMINATION OF MORTGAGE
FILES....................................16
SECTION 6.
CONVEYANCE FROM SELLER TO
PURCHASER..............................17
SECTION 7.
SERVICING OF THE MORTGAGE
LOANS..................................20
SECTION 8.
[RESERVED].......................................................20
SECTION 9.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR
BREACH............................................20
SECTION 10.
CLOSING..........................................................40
SECTION 11. CLOSING
DOCUMENTS................................................41
SECTION 12.
COSTS............................................................42
SECTION 13.
COOPERATION OF SELLER WITH A
RECONSTITUTION......................43
SECTION 14. THE
SELLER.......................................................44
SECTION 15. FINANCIAL
STATEMENTS.............................................46
SECTION 16. MANDATORY
DELIVERY; GRANT OF SECURITY INTEREST...................46
SECTION 17.
NOTICES..........................................................47
SECTION 18.
SEVERABILITY
CLAUSE..............................................48
SECTION 19.
COUNTERPARTS.....................................................48
SECTION 20. INTENTION
OF THE PARTIES.........................................48
SECTION 21. SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.........48
SECTION 22.
WAIVERS..........................................................49
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SECTION 23.
EXHIBITS.........................................................49
SECTION 24. GENERAL
INTERPRETIVE PRINCIPLES..................................49
SECTION 25.
REPRODUCTION OF
DOCUMENTS........................................49
SECTION 26. FURTHER
AGREEMENTS...............................................50
SECTION 27.
RECORDATION OF ASSIGNMENTS OF
MORTGAGE...........................50
SECTION 28. NO
SOLICITATION..................................................50
SECTION 29. WAIVER OF
TRIAL BY JURY..........................................51
SECTION 30. GOVERNING
LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS........51
SECTION 31.
AMENDMENT........................................................51
SECTION 32.
CONFIDENTIALITY..................................................52
SECTION 33. ENTIRE
AGREEMENT.................................................52
SECTION 34. COMPLIANCE
WITH REGULATION AB....................................52
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
[RESERVED]
EXHIBIT F
[RESERVED]
EXHIBIT G
UNDERWRITING GUIDELINES
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
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SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
------------------------------------------------------
WARRANTIES AGREEMENT
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This SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT ("Agreement"), dated as of September 1, 2006,
by and
between Morgan Stanley Mortgage Capital Inc., a New York
corporation (the
"Purchaser"), and Lydian Private Bank, a federal savings bank (the
"Seller").
W I T N E S S E T H:
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WHEREAS, the Purchaser and the Seller are parties to that
certain
Master Mortgage Loan Purchase and Warranties Agreement, dated as of
May 1, 2005,
as amended and restated by that certain First Amended and Restated
Mortgage
Loans Purchase and Warranties Agreement, dated as of September 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 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
with respect
to all Mortgage Loans acquired by the Purchaser 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.
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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 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.
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 one percent (1%) (or, if specified in the
related
Underwriting Guidelines applicable to such Mortgage Loan, two
percent (2%)) of
the original principal balance of such Mortgage Loan.
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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.
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.
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.
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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.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or to
be
repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage
Loan by the Seller in accordance with the terms of this
Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB,
with respect to any Securitization Transaction.
Determination Date: The 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.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989, as amended and in effect from time to time.
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.
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Freddie Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in the related Mortgage Note
which amount
is added to the Index in accordance with the terms of the related
Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate
for such Mortgage Loan.
High
Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual
percentage
rate" or total "points and fees" (as each such term is calculated
under HOEPA)
payable by the related Mortgagor that exceed the thresholds set
forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss.
226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered,"
(excluding
New Jersey "Covered Home Loans" as that term 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
(d) 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 Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal
agency or official thereof which may from time to time succeed to
the functions
thereof with regard to Mortgage Insurance issued by the FHA. The
term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions
thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage
Loan,
the Person named on the MERS System as the interim funder pursuant
to the MERS
Procedures Manual.
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.
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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 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.
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MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or
will take such
action as is necessary to cause MERS to be, the mortgagee of
record, as nominee
for the Seller, in accordance with MERS Procedures Manual and (b)
the Seller has
designated or will designate the Purchaser as the Investor on the
MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS
Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: 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 lien on the 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.
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.
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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 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;
(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) the Servicing Fee; (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
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);
(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)
[Reserved]; (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, including
whether the
applicable Prepayment Penalty provision is "hard" or "soft"; (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) [Reserved]; (40)
with respect
to Adjustable Rate Mortgage Loans, the
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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) [reserved]; (48) the original
Monthly Payment
due; (49) the Appraised Value; (50) appraisal type; (51) appraisal
date; (52) 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; (53) the amount of coverage of the PMI
Policy, if
applicable; (54) in connection with a condominium unit, a code
indicating
whether the condominium project where such unit is located is
low-rise or
high-rise; (55) a code indicating whether the Mortgaged Property is
a leasehold
estate; (56) with respect to the related Mortgagor, the
debt-to-income ratio;
(57) sales price; (58) automated valuation model (AVM); (59) a code
indicating
whether the Mortgage Loan is a MERS Designated Mortgage Loan and
the MERS
Identification Number, if applicable; (60) a field indicating
whether such
Mortgage Loan is a Home Loan; and (61) 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 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.
Nonrecoverable
Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith
judgment of the
Interim Servicer, will not
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or, in the case of a proposed advance, would not, be ultimately
recoverable from
related Insurance Proceeds, Liquidation Proceeds or otherwise. The
determination
by the Interim Servicer that it has made a Nonrecoverable Advance
or that any
proposed advance of principal and interest, if made, would
constitute a
Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered
to the Purchaser.
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.
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.
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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
basis for use by lenders in originating mortgage loans to be
purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage
Loans were
acquired by the Seller, pre-purchase or post-purchase quality
assurance
procedures (which may involve, among other things, review of a
sample of
mortgage loans purchased during a particular time period or through
particular
channels) designed to ensure that Persons from which it purchased
mortgage loans
properly applied the underwriting criteria designated by the
Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to
be
substituted by the Seller for a Deleted Mortgage Loan which must,
on the date of
such substitution, be
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approved by the Purchaser and (i) have an unpaid principal balance,
after
deduction of all scheduled payments due in the month of
substitution (or in the
case of a substitution of more than one mortgage loan for a Deleted
Mortgage
Loan, an aggregate principal balance), not in excess of the unpaid
principal
balance of the Deleted Mortgage Loan (the amount of any shortfall
will be
deposited in the Custodial Account by the Seller in the month of
substitution);
(ii) have a Mortgage Interest Rate not less than and not more than
one percent
(1%) greater than the Mortgage Interest Rate of the Deleted
Mortgage Loan; (iii)
have a remaining term to maturity not greater than and not more
than one (1)
year less than that of the Deleted Mortgage Loan; (iv) be of the
same type as
the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with
same
Mortgage Interest Rate Cap and Index); (v) comply as of the date of
substitution
with each representation and warranty set forth in Section 9 of
this Agreement;
(vi) be current in the payment of principal and interest; (vii) be
secured by a
Mortgaged Property of the same type and occupancy status as secured
the Deleted
Mortgage Loan; and (viii) have payment terms that do not vary in
any material
respect from those of the Deleted Mortgage Loan.
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%) (or, if
specified in the related Underwriting Guidelines applicable to such
Mortgage
Loan, two percent (2%)) 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. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(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.
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REMIC Provisions: Provisions of the federal income tax law
relating
to a REMIC, which appear at Section 860A through 860G of Subchapter
M of Chapter
1, Subtitle A of the Code, and related provisions and regulations,
rulings or
pronouncements promulgated thereunder, as the foregoing may be in
effect from
time to time.
Remittance Date: The 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.
Repurchase Price: With respect to any Mortgage Loan, a price
equal
to: (a) during the first year immediately following the applicable
Closing Date,
an amount equal to the sum of (i) the product of (x) the applicable
Purchase
Price Percentage and (y) the then aggregate unpaid actual principal
balance of
such Mortgage Loan as of the date of such repurchase, plus (ii)
accrued interest
on such Mortgage Loan at the applicable Mortgage Interest Rate from
the date to
which interest had last been paid through the date of such
repurchase, plus
(iii) the amount of any outstanding escrow or similar advances owed
to the
Purchaser or its designee, and (b) after the first year, an amount
equal to the
sum of (i) then aggregate unpaid actual principal balance of such
Mortgage Loan
as of the date of such repurchase plus (ii) accrued interest
thereon at the
Mortgage Interest Rate from the date to which interest had last
been paid
through the date of such repurchase, plus (iii) the amount of any
outstanding
escrow or similar advances owed to the Purchaser or its designee.
In the event
the Purchaser has securitized or sold such Mortgage Loan, the price
for such
repurchase shall be as set forth in clause (b) above.
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: Real Estate Settlement Procedures Act, as amended from
time
to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly 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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<PAGE>
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: As to each Mortgage Loan Package, the amount of
the
fee the Purchaser shall pay to the Seller for servicing the
Mortgage Loans in
accordance with the terms of this Agreement, which shall, with
respect to each
Mortgage Loan, be equal to $5.00 per calendar month.
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: The Standard & Poor's
LEVELS(R)
Glossary, as may be in effect from time to time.
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.
Static Pool Information: Static pool information as described
in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of
the
indemnifications set forth in Subsections 9.03 and 14.01.
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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 two (2) Business Days prior to the related Closing Date. The
related
Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with
those Mortgage Loans which have not been funded prior to the
related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan and the related
Servicing
Rights shall be the percentage of par as stated in the related
Purchase Price
and Terms Agreement (subject to adjustment as provided therein),
multiplied by
the aggregate actual unpaid principal balance, as of the related
Cut-off Date,
of the Mortgage Loans listed on the related Mortgage Loan Schedule,
after
application of scheduled payments of principal due on or before the
related
Cut-off Date, but only to the extent such payments were actually
received. The
initial principal amount of the related Mortgage Loans shall be the
aggregate
actual unpaid principal balance of the Mortgage
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Loans, so computed as of the related Cut-off Date. If so provided
in the related
Purchase Price and Terms Agreement, portions of the Mortgage Loans
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 be entitled to (1) all scheduled principal
due
after the related Cut-off Date, (2) all other recoveries of
principal collected
on or after the related Cut-off Date, and (3) all payments of
interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion
of any such
payment which is allocable to the period prior to the related
Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the
related Cut-off
Date is determined after application of payments of principal due
on or before
the related Cut-off Date, to the extent actually collected,
together with any
unscheduled principal prepayments collected prior to such Cut-off
Date;
provided, however, that payments of scheduled principal and
interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the
related Cut-off
Date shall not be applied to the principal balance as of the
related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser.
The Seller
shall deposit any such prepaid amounts into the Custodial Account,
which account
is established for the benefit of the Purchaser for subsequent
remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) 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, 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, if so provided in the related Purchase Price and
Terms
Agreement, 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 related Purchase Price and Terms Agreement, or as
an Exhibit
annexed thereto, the Purchaser may delete such Mortgage Loans from
the related
Mortgage Loan Schedule, and such Deleted Mortgage Loan (or Loans)
may be
replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the
Purchaser. The Purchaser may, at its option and without notice to
the Seller,
purchase some or all of the Mortgage Loans without conducting any
partial or
complete examination. The fact that the Purchaser or its designee
has conducted
or has failed to conduct any partial or complete examination of the
Mortgage
Files shall not impair in any way the Purchaser's (or any of its
successor's)
rights to demand repurchase, substitution or other relief as
provided in this
Agreement. In the event that the Seller fails to deliver the
Mortgage File with
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respect to any Mortgage Loan, the Seller shall, upon the request of
the
Purchaser, repurchase such Mortgage Loan as 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 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
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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 requirements of Fannie Mae or Freddie
Mac, 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 Fannie Mae
Guides. To the
extent that original documents are not required for purposes of
realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by
the Seller
or the Interim Servicer may be in the form of microfilm or
microfiche so long as
the Seller or the Interim Servicer complies with the requirements
of the Fannie
Mae Guides.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be construed as, a sale of
the related
Mortgage Loans by the Seller and not a pledge of such Mortgage
Loans by the
Seller to the Purchaser to secure a debt or other obligation of the
Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as
a purchase on
the Purchaser's business records, tax returns and financial
statements, and as a
sale of assets 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
ten (10) 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.
The Custodian shall certify its receipt of all such Mortgage
Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the
related Closing Date, as evidenced by the Initial Certification of
the Custodian
in the form annexed to the Custodial Agreement. The Seller shall
comply with the
terms of the Custodial Agreement and the Purchaser shall pay all
fees and
expenses of the Custodian.
The Seller shall 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
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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 original or copy of any document submitted for recordation
to
the appropriate public recording office is not delivered to the
Purchaser or its
designee within 180 days following 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.
The
foregoing repurchase obligation shall not apply if the Seller
cannot cause the
Interim Servicer to deliver such original or copy of any document
submitted for
recordation to the appropriate public recording office within the
specified
period due to a delay caused by the recording office in the
applicable
jurisdiction; provided that (i) the Seller shall instead deliver a
recording
receipt of such recording office or, if such recording receipt is
not available,
an officer's certificate of a servicing officer of the Seller,
confirming that
such document has been accepted for recording, and (ii) such
document is
delivered within twelve (12) months of the related Closing
Date.
The Seller shall pay all initial recording fees, if any, for
the
Assignments of Mortgage and any other fees or costs in transferring
all original
documents to the Custodian or, upon written request of the
Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the
Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and
shall be
reimbursed by the Seller for the costs associated therewith
pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, 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, no later than two Business Days after 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,
no later than
two Business Days after 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.
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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.
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 federal
savings
bank, validly existing, and in good standing under the laws of the
United States
and has all licenses necessary to carry on its business as now
being conducted
and is licensed, qualified and in good standing in the states where
the
Mortgaged Property is located if the laws of such state require
licensing or
qualification in order to conduct business of the type conducted by
the Seller.
The Seller has corporate power and authority to execute and deliver
this
Agreement and to perform its obligations hereunder; the execution,
delivery and
performance of this Agreement (including all instruments of
transfer to be
delivered pursuant to this Agreement) by the Seller and the
consummation of the
transactions contemplated hereby have been duly and validly
authorized; this
Agreement has been duly executed and delivered and constitutes the
valid, legal,
binding and enforceable obligation of the Seller, except as
enforceability may
be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium,
reorganization or other similar laws affecting the enforcement of
the rights of
creditors and (ii) general principles of equity, whether
enforcement is sought
in a proceeding in equity or at law. All requisite corporate action
has been
taken by the Seller to make this Agreement valid and binding upon
the Seller in
accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this
Agreement from any
court, governmental agency or body, or federal or state regulatory
authority
having jurisdiction over the Seller is
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required or, if required, such consent, approval, authorization or
order has
been or will, prior to the related Closing Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary
course of
business of the Seller, and the transfer, assignment and conveyance
of the
Mortgage Notes and the Mortgages by the Seller pursuant to this
Agreement are
not subject to the bulk transfer or any similar statutory
provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by
the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation
of the
transactions contemplated hereby, nor the fulfillment of or
compliance with the
terms and conditions of this Agreement, will conflict with or
result in a breach
of any of the terms, conditions or provisions of the Seller's
charter or by-laws
or any legal restriction or any agreement or instrument to which
the Seller is
now a party or by which it is bound, or constitute a default or
result in an
acceleration under any of the foregoing, or result in the violation
of any law,
rule, regulation, order, judgment or decree to which the Seller or
its property
is subject, or result in the creation or imposition of any lien,
charge or
encumbrance that would have an adverse effect upon any of its
properties
pursuant to the terms of any mortgage, contract, deed of trust or
other
instrument, or impair the ability of the Purchaser to realize on
the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the
ability of the
Purchaser to realize the full amount of any insurance benefits
accruing pursuant
to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
or
investigation pending or threatened against the Seller, before any
court,
administrative agency or other tribunal asserting the invalidity of
this
Agreement, seeking to prevent the consummation of any of the
transactions
contemplated by this Agreement or which, either in any one instance
or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Seller, or in any
material impairment of the right or ability of the Seller to carry
on its
business substantially as now conducted, or in any material
liability on the
part of the Seller, or which would draw into question the validity
of this
Agreement or the Mortgage Loans or of any action taken or to be
taken in
connection with the obligations of the Seller contemplated herein,
or which
would be likely to impair materially the ability of the Seller to
perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe,
nor
does it have any reason or cause to believe, that it cannot perform
each and
every covenant contained in this Agreement. The Seller is solvent
and the sale
of the Mortgage Loans will not cause the Seller to become
insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder,
delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate
any
mortgage loan or to deny any mortgage loan application is an
independent
decision based upon the Underwriting Guidelines, and is in no way
made as a
result of Purchaser's decision to purchase, or not to purchase, or
the price
Purchaser may offer to pay for, any such mortgage loan, if
originated;
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(h) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws, executive orders and
regulations,
including without limitation the USA Patriot Act of 2001
(collectively, the
"Anti-Money Laundering Laws"); the Seller has established an
anti-money
laundering compliance program as required by the Anti-Money
Laundering Laws, has
conducted the requisite due diligence in connection with the
origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including with
respect to the legitimacy of the applicable Mortgagor and the
origin of the
assets used by the said Mortgagor to purchase the property in
question, and
maintains, and will maintain, sufficient information to identify
the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the
Purchaser
financial statements as to its last three complete fiscal years and
any later
quarter ended more than 60 days prior to the execution of this
Agreement. All
such financial statements fairly present the pertinent results of
operations and
changes in financial position for each of such periods and the
financial
position at the end of each such period of the Seller and its
subsidiaries and
have been prepared in accordance with generally accepted accounting
principles
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) Selection Process. The Mortgage Loans were selected from
among
the outstanding one- to four-family mortgage loans in the Seller's
portfolio at
the related Closing Date as to which the representations and
warranties set
forth in Subsection 9.02 could be made and such selection was not
made in a
manner so as to affect adversely the interests of the
Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the
Assignment of Mortgage and any other documents required to be
delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement
shall be
delivered to the Custodian all in compliance with the specific
requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the
Seller will be
in possession of a complete Mortgage File in compliance with
Exhibit A hereto,
except for such documents as will be delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description
of the pool
characteristics for the applicable Mortgage Loan Package delivered
pursuant to
Section 11 on the related Closing Date in the form attached as
Exhibit B to each
related Assignment and Conveyance Agreement;
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<PAGE>
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other
document
furnished or to be furnished pursuant to this Agreement or any
Reconstitution
Agreement or in connection with the transactions contemplated
hereby (including
any Securitization Transaction or Whole Loan Transfer) contains or
will contain
any untrue statement of fact or omits or will omit to state a fact
necessary to
make the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker,
investment
banker, agent or other person that may be entitled to any
commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally
accepted
accounting principles the transfer of the Mortgage Loans will be
treated as a
sale on the books and records of the Seller and the Seller has
determined that
the disposition of the Mortgage Loans pursuant to this Agreement
will be
afforded sale treatment for tax and accounting purposes;
(p) Reasonable Purchase Price. The consideration received by
the
Seller upon the sale of the Mortgage Loans under this Agreement
constitutes fair
consideration and reasonably equivalent value for the Mortgage
Loans; and
(q) Insured Depository Institution Representations. Seller is
an
"insured depository institution" as that term is defined in Section
1813(c)(2)
of Title 12 of the United States Code, as amended, and accordingly,
Seller makes
the following additional representations and warranties:
(i) This Agreement
between Purchaser and Seller conforms to all
applicable statutory and regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with the
agreement reached by Purchaser and Seller, (2) approved by a
specific corporate or banking association resolution by the
Seller's board of directors, which approval shall be
reflected in the minutes of said board, and (3) an official
record of the Seller. A copy of such resolution, certified
by a vice president or higher officer of Seller has been
provided to Purchaser.
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 and in the payment histories
provided by the
Seller with respect to Mortgage Loans originated more than 12
months prior to
the related Closing Date is complete, true and correct;
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(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 more recent of the
origination date of
the Mortgage Loan or the date which is 12 months prior to the
related Closing
Date;
(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, with
respect to
Mortgage Loans that provide Escrow Payments, escrow of funds has
been
established in an amount sufficient to pay for every such item on
an annual
basis. 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 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 Mortgage,
all
buildings or other improvements upon the Mortgaged Property are
insured by a
generally acceptable insurer against loss by fire, hazards of
extended coverage
and such other hazards as are provided for in the Underwriting
Guidelines. If
required by the National Flood Insurance Act of 1968, as amended,
each Mortgage
Loan is covered by a flood insurance policy meeting the
requirements of the
current guidelines of the Federal Insurance Administration as in
effect which
policy
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conforms with the Underwriting Guidelines. All individual insurance
policies
contain a standard mortgagee clause naming the Seller and its
successors and
assigns as mortgagee, and all premiums thereon have been paid. The
Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance
policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to
do so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at
such Mortgagor's cost and expense, and to seek reimbursement
therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor
has been
given an opportunity to choose the carrier of the required hazard
insurance,
provided the policy is not a "master" or "blanket" hazard insurance
policy
covering a condominium, or any hazard insurance policy covering the
common
facilities of a planned unit development. The hazard insurance
policy is the
valid and binding obligation of the insurer, is in full force and
effect, and
will be in full force and effect and inure to the benefit of the
Purchaser upon
the consummation of the transactions contemplated by this
Agreement. 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 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,
the
Mortgaged Property is a fee simple estate (except with respect to
each Mortgage
Loan secured by an interest in an leasehold 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
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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.
None of the Mortgaged Properties are Manufactured Homes, log homes,
mobile
homes, geodesic domes or other unique property types. This
representation and
warranty is a Deemed Material and Adverse Representation;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien 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 additions, alterations and
replacements
made at any time with respect to the foregoing. The lien of the
Mortgage is
subject only to:
(i) the lien of
current real property taxes and assessments not
yet due and payable;
(ii) 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 which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(iii) 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
and first
priority 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;
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(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 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, except as may be required of the Seller in its
capacity as
Interim Servicer of such Mortgage Loan prior to the Transfer Date.
After the
related Closing Date, the Seller will have no right to modify or
alter the terms
of the sale of the Mortgage Loan
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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,
or (3) not doing business in such state;
(o) LTV, PMI Policy. 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 or CLTA
lender's title
insurance policy or other generally acceptable form of policy or
insurance
acceptable under the Underwriting Guidelines and each such title
insurance
policy is issued by a title insurer acceptable under the
Underwriting Guidelines
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
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 related
Mortgage, including the Seller, has done, by act or omission,
anything which
would impair the coverage of such lender's title insurance policy,
including
without limitation, no unlawful fee, commission,
