Exhibit 99.6b
EXECUTION COPY
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THIRD AMENDED AND RESTATED MORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT
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MORGAN STANLEY MORTGAGE CAPITAL INC.,
Purchaser
AMERICAN HOME MORTGAGE CORP.,
Seller
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Dated as of June 1, 2006
Conventional,
Fixed and Adjustable Rate
Residential Mortgage Loans
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TABLE OF CONTENTS
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SECTION 1.
DEFINITIONS...................................................................................2
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..........................................................16
Subsection 6.01
Conveyance of Mortgage
Loans..................................................16
Subsection 6.02
Books and
Records.............................................................17
Subsection 6.03
Delivery of Mortgage Loan
Documents...........................................18
Subsection 6.04
Quality Control
Procedures....................................................19
Subsection 6.05
MERS Designated
Loans.........................................................19
SECTION 7.
SERVICING OF THE MORTGAGE
LOANS..............................................................19
SECTION 8.
[RESERVED]...................................................................................20
SECTION 9.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES
FOR BREACH.................20
Subsection 9.01
Representations and Warranties Regarding the
Seller...........................20
Subsection 9.02
Representations and Warranties Regarding Individual Mortgage
Loans............23
Subsection 9.03
Remedies for Breach of Representations and
Warranties.........................38
Subsection 9.04
Repurchase of Mortgage Loans with Early Payment
Defaults......................40
Subsection 9.05
Premium
Recapture.............................................................40
SECTION 10.
CLOSING......................................................................................40
SECTION 11.
CLOSING
DOCUMENTS............................................................................41
SECTION 12.
COSTS........................................................................................42
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SECTION 13.
COOPERATION OF SELLER WITH A
RECONSTITUTION..................................................42
SECTION 14.
[RESERVED]...................................................................................44
SECTION 15.
THE
SELLER...................................................................................44
Subsection 15.01
Additional Indemnification by the Seller; Third Party
Claims..................44
Subsection 15.02
Merger or Consolidation of the
Seller.........................................45
SECTION 16.
FINANCIAL
STATEMENTS.........................................................................46
SECTION 17.
MANDATORY DELIVERY; GRANT OF SECURITY
INTEREST...............................................46
SECTION 18.
NOTICES......................................................................................47
SECTION 19.
SEVERABILITY
CLAUSE..........................................................................48
SECTION 20.
COUNTERPARTS.................................................................................48
SECTION 21.
[RESERVED]...................................................................................48
SECTION 22.
INTENTION OF THE
PARTIES.....................................................................48
SECTION 23.
SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT.....................................49
SECTION 24.
WAIVERS......................................................................................49
SECTION 25.
EXHIBITS.....................................................................................49
SECTION 26.
GENERAL INTERPRETIVE
PRINCIPLES..............................................................49
SECTION 27.
REPRODUCTION OF
DOCUMENTS....................................................................50
SECTION 28.
FURTHER
AGREEMENTS...........................................................................50
SECTION 29.
RECORDATION OF ASSIGNMENTS OF
MORTGAGE.......................................................50
SECTION 30.
NO
SOLICITATION..............................................................................50
SECTION 31.
WAIVER OF TRIAL BY
JURY......................................................................51
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SECTION 32.
GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF
PROCESS....................................51
SECTION 33.
AMENDMENT....................................................................................52
SECTION 34.
CONFIDENTIALITY..............................................................................52
SECTION 35.
ENTIRE
AGREEMENT.............................................................................52
SECTION 36.
COMPLIANCE WITH REGULATION
AB................................................................52
Subsection 36.01
Intent of the Parties;
Reasonableness.........................................52
Subsection 36.02
Additional Representations and Warranties of the
Seller.......................53
Subsection 36.03
Information to Be
Provided....................................................54
Subsection 36.04
Indemnification;
Remedies.....................................................57
EXHIBITS
EXHIBIT A-1 MORTGAGE
LOAN DOCUMENTS
EXHIBIT A-2 CONTENTS
OF EACH MORTGAGE FILE
EXHIBIT B
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C
FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G
UNDERWRITING GUIDELINES
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
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THIRD AMENDED AND RESTATED MORTGAGE LOAN
----------------------------------------
PURCHASE AND WARRANTIES AGREEMENT
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This THIRD AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT ("Agreement"), dated as of June 1, 2006, by
and between
Morgan Stanley Mortgage Capital Inc., a New York corporation
(the
"Purchaser"), and American Home Mortgage Corp., a Delaware
corporation (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
Mortgage Loan Purchase and Warranties Agreement, dated as of
November 1, 2003,
as amended by that certain Amendment No. 1, dated as of November
30, 2004, as
further amended by Amendment No. 2, dated as of February 22, 2005,
as further
amended and restated by that certain First Amended and Restated
Mortgage Loan
Purchase and Warranties Agreement, dated as of June 1, 2005, and as
further
amended and restated by that certain Second Amended and Restated
Mortgage Loan
Purchase and Warranties Agreement, dated as of December 1, 2005
(together, 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 and non-conforming Alt
A
residential first-lien and second-lien mortgage loans (the
"Mortgage Loans")
on a servicing released basis as described herein, and which shall
be
delivered in three separate pools of whole loans (each, a "Mortgage
Loan
Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each of the Seller and the Purchaser intend, and have
agreed that, each purchase and sale of Mortgage Loans between the
Seller and
the Purchaser on or after June 1, 2005, shall be governed by the
terms and
conditions of this Agreement;
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of
trust or other security instrument creating a first lien or second
lien on a
residential dwelling located in the jurisdiction indicated on the
Mortgage
Loan Schedule for the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner
of the conveyance, servicing by the Interim Servicer and control of
the
Mortgage Loans;
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage
Loans to one
or more purchasers as a whole loan transfer or a public or private,
rated or
unrated, mortgage pass-through transaction; and
WHEREAS, at the present time, the Purchaser and the Seller
desire
to amend the Original Purchase Agreement (as defined below) to make
certain
modifications.
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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: An adjustable rate 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.
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 Third 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 assignment of the Mortgage, notice
of
transfer or equivalent instrument in recordable form, sufficient
under the
laws of the jurisdiction wherein the related Mortgaged Property is
located to
reflect the sale of the Mortgage to the Purchaser.
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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.
Closing Date: The date or dates on which the Purchaser from
time
to time shall purchase, and the Seller from time to time shall
sell, the
Mortgage Loans listed on the related Mortgage Loan Schedule with
respect to
the related Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding
principal
balance of the Second Lien Loan and (ii) the outstanding principal
balance as
of such date of any mortgage loan or mortgage loans that are senior
or equal
in priority to the Second Lien Loan and which are secured by the
same
Mortgaged Property to (b) the Appraised Value as determined
pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of
the
origination of the Second Lien Loan.
Code: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property, whether
permanent
or temporary, partial or entire, by exercise of the power of
condemnation or
the right of eminent domain, to the extent not required to be
released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op: A private, cooperative housing corporation, having only
one
class of stock outstanding, which owns or leases land and all or
part of a
building or buildings, including apartments, spaces used for
commercial
purposes and common areas therein and whose board of directors
authorizes the
sale of stock and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with
respect
to a dwelling unit occupied by the Mortgagor and relating to the
stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a dwelling unit in a residential cooperative housing
corporation
and a collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
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Custodial Account: The separate trust account created and
maintained pursuant to Subsection 2.04 of the Interim Servicing
Agreement
(with respect to each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention
of
the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and
other Mortgage Loan Documents. If more than one Custodial Agreement
is in
effect at any given time, all of the individual Custodial
Agreements shall
collectively be referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a national
banking association, and its successors in interest, or any
successor to the
Custodian under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the
related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Deemed Material and Adverse Representation: Each representation
and warrnaty identified as such in Section 9.02 of this
Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage
Loan by the
Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
Determination Date: The 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.
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FHA: The Federal Housing Administration, an agency within the
United States Department of Housing and Urban Development, or any
successor
thereto and including the Federal Housing Commissioner and the
Secretary of
Housing and Urban Development where appropriate under the FHA
Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien
Mortgage
on the related Mortgaged Property.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in the related Mortgage Note
which
amount is added to the Index in accordance with the terms of the
related
Mortgage Note to determine on each Interest Rate Adjustment Date
the Mortgage
Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home
Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual
percentage
rate" or total "points and fees" payable by the related Mortgagor
(as each
such term is calculated under HOEPA) that exceed the thresholds set
forth by
HOEPA and its implementing regulations, including 12 C.F.R. 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 a Home Loan pursuant
to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal agency or official thereof which may from time to time
succeed to the
functions thereof with regard to Mortgage Insurance issued by the
FHA. The
term "HUD," for purposes of this Agreement, is also deemed to
include
subdivisions thereof such as the FHA and Government National
Mortgage
Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
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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.
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 Performance Information: As defined in Subsection 36.03.
Loan-to-Value Ratio or LTV: 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.
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
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("HUD Code"), as amended in 2000, which preempts state and local
building
codes. Each unit is identified by the presence of a HUD
Plate/Compliance
Certificate label. The sections are then transported to the site
and joined
together and affixed to a pre-built permanent foundation (which
satisfies the
manufacturer's requirements and all state, county, and local
building codes
and regulations). The manufactured home is built on a
non-removable, permanent
frame chassis that supports the complete unit of walls, floors, and
roof. The
underneath part of the home may have running gear (wheels, axles,
and brakes)
that enable it to be transported to the permanent site. The wheels
and hitch
are removed prior to anchoring the unit to the permanent
foundation. The
manufactured home must be classified as real estate and taxed
accordingly. The
permanent foundation may be on land owned by the mortgager or may
be on leased
land.
MERS: Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or
will take
such action as is necessary to cause MERS to be, the mortgagee of
record, as
nominee for the Seller, in accordance with MERS Procedures Manual
and (b) the
Seller has designated or will designate the Purchaser as the
Investor on the
MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS
Designated Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
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, in the case of a First Lien Loan,
or a
second lien, in the case of a Second Lien Loan, on the related
Mortgaged
Property. With respect to a Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage
Loan Documents and the items listed in Exhibit A-2 hereto and any
additional
documents required to be added to the Mortgage File pursuant to
this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from
time to time
in accordance with the provisions of the related Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment
as set
forth in the related Mortgage Note.
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Mortgage Loan: An individual Mortgage Loan which is the subject
of
this Agreement, each Mortgage Loan originally 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: The documents required to be delivered
to
the Custodian pursuant to Subsection 6.03 with respect to any
Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall
be
purchased by the Purchaser from the Seller from time to time on
each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth the following information with respect to each Mortgage Loan
in the
related Mortgage Loan Package: (1) the Seller's Mortgage Loan
identifying
number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged
Property including the city, state and zip code; (4) a code
indicating whether
the Mortgaged Property is owner-occupied, investment property or a
second
home; (5) the number and type of residential units constituting the
Mortgaged
Property (e.g. single family residence, a two- to four-family
dwelling,
condominium, planned unit development or cooperative); (6) 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; (7) the Loan-to-Value Ratio at origination; (8) the
Mortgage
Interest Rate as of the related Cut-off Date; (9) 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;
(10) the
stated maturity date; (11) the amount of the Monthly Payment as of
the related
Cut-off Date; (12) the last payment date on which a payment was
actually
applied to the outstanding principal balance; (13) the original
principal
amount of the Mortgage Loan; (14) 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;
(15) 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, (16) a code indicating whether there is a
simultaneous
second; (17) with respect to Adjustable Rate Mortgage Loans, the
Interest Rate
Adjustment Date; (18) with respect to Adjustable Rate Mortgage
Loans, the
Gross Margin; (19) with respect to Adjustable Rate Mortgage Loans,
the
Lifetime Rate Cap under the terms of the Mortgage Note; (20) with
respect to
Adjustable Rate Mortgage Loans, a code indicating the type of
Index; (21) the
type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate); (22) a
code
indicating the purpose of the loan (i.e., purchase, rate/term
refinance or
cash-out refinance); (23) a code indicating the documentation style
(i.e. no
documents, full, alternative, reduced, no income/no asset, stated
income, no
ration, reduced or NIV); (24) the loan credit classification (as
described in
the Underwriting Guidelines); (25) whether such Mortgage Loan
provides for a
Prepayment Penalty; (26) the Prepayment Penalty period of such
Mortgage Loan,
if applicable; (27) a description of the Prepayment Penalty, if
applicable,
including whether the applicable Prepayment Penalty provision is
"hard" or
"soft"; (28) the Mortgage Interest Rate as of origination; (29) the
credit
risk score (FICO score); (30) the date of
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origination; (31) with respect to Adjustable Rate Mortgage Loans,
the Mortgage
Interest Rate adjustment period; (32) with respect to Adjustable
Rate Mortgage
Loans, the Mortgage Interest Rate adjustment percentage; (33) with
respect to
Adjustable Rate Mortgage Loans, the Mortgage Interest Rate floor;
(34) the
Mortgage Interest Rate calculation method (i.e., 30/360, simple
interest,
other); (35) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate
Cap as of the first Interest Rate Adjustment Date; (36) a code
indicating
whether the Mortgage Loan is a Balloon Mortgage Loan; (37) the
original
Monthly Payment due; (38) the Appraised Value; (39) a code
indicating whether
the Mortgage Loan is covered by a PMI Policy and, if so,
identifying the PMI
Policy provider; (40) in connection with a condominium unit, a code
indicating
whether the condominium project where such unit is located is
low-rise or
high-rise; (39) a code indicating whether the Mortgaged Property is
a
leasehold estate; (41) a code indicating whether the Mortgage Loan
is a MERS
Designated Mortgage Loan; (42) the MERS Identification Number, if
applicable,
(43) a code indicating if a Mortgage Loan is a Covered Loan, and
(44) the
product type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate,
First Lien
Loan or Second Lien Loan), and with respect to each Second Lien
Loan, the
product type of the related first lien loan. 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 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
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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.
Original Purchase Agreement: That certain Mortgage Loan
Purchase
and Warranties Agreement, dated as of November 1, 2003, as amended
by that
certain Amendment No. 1, dated as of November 30, 2004, as further
amended by
that certain Amendment No. 2, dated as of February 22, 2005, as
further
amended and restated by that certain First Amended and Restated
Mortgage Loan
Purchase and Warranties Agreement, dated as of June 1, 2005, and as
further
amended and restated by that certain Second Amended and Restated
Mortgage Loan
Purchase and Warranties Agreement, dated as of December 1, 2005,
each by and
between the Purchaser and the Seller.
Periodic Rate Cap: The provision of each Mortgage Note related
to
an Adjustable Rate Mortgage Loan which provides for an absolute
maximum amount
by which the Mortgage Interest Rate therein may increase or
decrease on an
Interest Rate Adjustment Date above or below the Mortgage Interest
Rate
previously in effect. The Periodic Rate Cap for each Adjustable
Rate Mortgage
Loan is the rate set forth as such on the related Mortgage Loan
Schedule.
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.
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Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the
amount
of any premium or penalty required to be paid by the Mortgagor if
the
Mortgagor prepays such Mortgage Loan as provided in the related
Mortgage Note
or Mortgage.
Principal Prepayment: Any payment or other recovery of
principal
on a Mortgage Loan which is received in advance of its scheduled
Due Date,
including any Prepayment Penalty thereon, and which is not
accompanied by an
amount of interest representing scheduled interest due on any date
or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller in exchange for the Mortgage Loans
purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements
setting forth the general terms and conditions of the transactions
consummated
herein and identifying the Mortgage Loans to be purchased from time
to time
hereunder, by and between the Seller and the Purchaser.
Purchase Price Percentage: The percentage of par (expressed as
a
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 the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989
and the regulations promulgated thereunder, all as in effect on the
date the
Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller
purchased Mortgage Loans, provided that the following conditions
are
satisfied: (i) such Mortgage Loans were originated pursuant to an
agreement
between the Seller and such Person that contemplated that such
Person would
underwrite mortgage loans from time to time, for sale to the
Seller, in
accordance with underwriting guidelines designated by the Seller
("Designated
Guidelines") or guidelines that do not vary materially from such
Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as
described in
clause (i) above and were acquired by the Seller within 180 days
after
origination; (iii) either (x) the Designated Guidelines were, at
the time such
Mortgage Loans were originated, used by the Seller in origination
of mortgage
loans of the same type as the Mortgage Loans for the Seller's own
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
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post-purchase quality assurance procedures (which may involve,
among other
things, review of a sample of mortgage loans purchased during a
particular
time period or through particular channels) designed to ensure that
Persons
from which it purchased mortgage loans properly applied the
underwriting
criteria designated by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to
be
substituted by the Seller for a Deleted Mortgage Loan which must,
on the date
of such substitution, (i) have an 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 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 with each representation
and warranty
(respecting individual Mortgage Loans) set forth in Section 9; (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 by the
Deleted
Mortgage Loan; and (viii) have payment terms that do not vary in
any material
respect from those of the Deleted 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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<PAGE>
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: As defined in the related Purchase Price and
Terms Agreement.
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.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly to an issuing entity in connection with an issuance of
publicly
offered or privately placed, rated or unrated mortgage backed
securities or
(2) an issuance of publicly offered or privately placed, rated or
unrated
securities, the payments on which are determined primarily by
reference to one
or more portfolios of residential mortgage loans consisting, in
whole or in
part, of some or all of the Mortgage Loans.
Security Agreement: The agreement creating a security interest
in
the stock allocated to a dwelling unit in the residential
cooperative housing
corporation that was pledged to secure such Co-op Loan and the
related Co-op
Lease.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Seller Information: As defined in Subsection 36.04(a).
Servicing Fee: With respect to each Mortgage Loan, the
servicing
fee specified in the applicable Purchase Price and Terms
Agreement.
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
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<PAGE>
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 15.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: In the event the Interim Servicer is terminated
as
servicer of a Mortgage Loan pursuant to the Interim Servicing
Agreement, the
date on which the Purchaser, or its designee, shall receive the
transfer of
servicing responsibilities and begin to perform the servicing of
such Mortgage
Loans, and the Interim Servicer shall cease all servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the
Seller, a copy of which is attached as an exhibit to the related
Assignment
and Conveyance.
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<PAGE>
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. AGREEMENT TO PURCHASE
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an
aggregate
actual unpaid principal balance on the related Cut-off Date in an
amount as
set forth in the related Purchase Price and Terms Agreement, or in
such other
amount as agreed by the Purchaser and the Seller as evidenced by
the actual
aggregate unpaid principal balance of the Mortgage Loans accepted
by the
Purchaser on each Closing Date, together with the related Mortgage
Files and
all rights and obligations arising under the documents contained
therein.
SECTION 3. MORTGAGE SCHEDULES
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the
Mortgage Loans
to be purchased on each Closing Date in accordance with the related
Purchase
Price and Terms Agreement and this Agreement (each, a "Preliminary
Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the Mortgage Loans to be purchased on a particular Closing Date to
the
Purchaser at least five (5) Business Days prior to the related
Closing Date.
The related Mortgage Loan Schedule shall be the related Preliminary
Mortgage
Schedule with those Mortgage Loans which have not been funded prior
to the
related Closing Date deleted.
SECTION 4. PURCHASE PRICE
The Purchase Price for each Mortgage Loan shall be calculated
in
accordance with the related Purchase Price and Terms Agreement
(subject to
adjustment as provided therein). The initial principal amount of
the related
Mortgage Loans shall be the aggregate actual unpaid principal
balance of the
Mortgage Loans, so computed as of the related Cut-off Date. If so
provided in
the related Purchase Price and Terms Agreement, portions of the
Mortgage Loans
shall be priced and paid for separately.
In addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, at closing, accrued interest on
the current
principal amount of the related Mortgage Loans as of the related
Cut-off Date
at the weighted average Mortgage Interest Rate of those Mortgage
Loans. The
Purchase Price plus accrued interest as set forth in the preceding
paragraph
shall be paid to the Seller by wire transfer of immediately
available funds to
an account designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal
due
after the related Cut-off Date, (2) all other recoveries of
principal
collected on or after the related Cut-off Date, and (3) all
payments of
interest on the Mortgage Loans net of applicable Servicing Fees
(minus that
portion of any such payment which is allocable to the period prior
to the
related Cut-off
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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, including a copy of the Assignment of
Mortgage,
pertaining to each Mortgage Loan, or (b) make the related Mortgage
File
available to the Purchaser for examination at such other location
as shall
otherwise be acceptable to the Purchaser. Such examination of the
Mortgage
Files may be made by the Purchaser or its designee at any
reasonable time. If
the Purchaser makes such examination prior to the related Closing
Date and
determines, in its sole discretion, that any Mortgage Loans are
unacceptable
to the Purchaser for any reason, such Mortgage Loans shall be
deleted from the
related Mortgage Loan Schedule, and such Deleted Mortgage Loan 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 affect the Purchaser's (or any of its
successor's)
rights to demand repurchase, substitution or other relief as
provided herein.
SECTION 6. CONVEYANCE FROM 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, 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
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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 for so long as
the Interim
Servicer is servicing such Mortgage Loans. 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
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
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<PAGE>
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 two (2) Business Days prior to the related Closing Date those
Mortgage
Loan Documents set forth on Exhibit A-1 hereto as required by the
Custodial
Agreement with respect to each Mortgage Loan set forth on the
related Mortgage
Loan Schedule.
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 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 ninety
days of
its submission for recordation.
In the event any document required to be delivered to the
Custodian in the Custodial Agreement, including an original or copy
of any
document submitted for recordation to the appropriate public
recording office,
is not so delivered to the Custodian, or to such other Person as
the Purchaser
shall designate in writing, within 90 days following the related
Closing Date
(other than with respect to the Assignments of Mortgage which shall
be
delivered to the Custodian in blank and recorded subsequently by
the Purchaser
or its designee), and in the event that the Seller does not cure
such failure
within 30 days of discovery or receipt of written notification of
such failure
from the Purchaser, the related Mortgage Loan shall, upon the
request of the
Purchaser, be repurchased by the Seller at the price and in the
manner
specified in Subsection 9.03. The foregoing repurchase obligation
shall not
apply in the event that the Seller cannot deliver an original
document
submitted for recordation to the appropriate public recording
office within
the specified period due to a delay caused by the recording office
in the
applicable jurisdiction; provided that 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 documents have been accepted for recording;
provided
that, upon request of the Purchaser and delivery by the Purchaser
to the
Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue
and deliver to the Purchaser or its designee said officer's
certificate.
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In connection with any recordings required under applicable
law,
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's loan production
and the
servicing activities of the Interim Servicer. The program is to
ensure that
the Mortgage Loans are originated in accordance with the
Underwriting
Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard
against errors and omissions by officers, employees, or other
authorized
persons.
Subsection 6.05. MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the
Purchaser as the
Investor and the Custodian as custodian, and no Person shall be
listed as
Interim Funder on the MERS System. In addition, on or prior to the
related
Closing Date, Seller shall provide the Custodian and the Purchaser
with a MERS
Report listing the Purchaser as the Investor, the Custodian as
custodian and
no Person as Interim Funder with respect to each MERS Designated
Mortgage
Loan.
SECTION 7. SERVICING OF THE MORTGAGE LOANS
The Mortgage Loans have been sold by the Seller to the
Purchaser
on a servicing released basis. Subject to and upon the terms and
conditions of
this Agreement and the Interim Servicing Agreement (with respect to
each
Mortgage Loan, for an interim period, as specified therein), the
Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser
the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract
servicer of the Mortgage Loans for an interim period pursuant to
and in
accordance with the terms and conditions contained in the Interim
Servicing
Agreement (with respect to each Mortgage Loan, for an interim
period, as
specified therein). The Seller shall cause the Interim Servicer to
execute the
Interim Servicing Agreement on the initial Closing Date.
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.
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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 corporation
duly organized, validly existing, and in good standing under the
laws of its
jurisdiction of incorporation or formation and has all licenses
necessary to
carry on its business as now being conducted, except where the
failure to be
so licensed would not have a material adverse effect on the Seller,
the
Mortgage Loans, the Mortgaged Properties or the transactions
contemplated by
this Agreement, 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, and in any event the Seller is in compliance with
the laws of
any such state to the extent necessary to ensure the enforceability
of the
related Mortgage Loan. The Seller had the full corporate power and
authority
and legal right to originate the Mortgage Loans that it originated
and to
acquire the Mortgage Loans that it acquired. The Seller has
corporate power
and authority to hold each Mortgage Loan, to sell each Mortgage
Loan and 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 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
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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 (i) the Seller's charter or by-laws or
(ii) 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 except, in the case of
clause (ii),
any defaults or breaches that would not, either in any one instance
or in the
aggregate, result in a material adverse effect on the Seller, the
Mortgage
Loans, the Mortgaged Properties or the transactions contemplated by
this
Agreement, or result in the material violation of any law, rule,
regulation,
order, judgment or decree to which the Seller or its property is
subject, or
result in the creation or imposition of any lien, charge or
encumbrance that
would have a material adverse effect upon any of its properties
pursuant to
the terms of any mortgage, contract, deed of trust or other
instrument, or
impair the ability of the Purchaser to realize on the Mortgage
Loans, impair
the value of the Mortgage Loans, or impair the ability of the
Purchaser to
realize the full amount of any insurance benefits accruing pursuant
to this
Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
or
investigation pending or threatened against the Seller, before any
court,
administrative agency or other tribunal asserting the invalidity of
this
Agreement, seeking to prevent the consummation of any of the
transactions
contemplated by this Agreement or which, either in any one instance
or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Seller, or in any
material impairment of the right or ability of the Seller to carry
on its
business substantially as now conducted, or in any material
liability on the
part of the Seller, or which would draw into question the validity
of this
Agreement or the Mortgage Loans or of any action taken or to be
taken in
connection with the obligations of the Seller contemplated herein,
or which
would be likely to impair materially the ability of the Seller to
perform
under the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe,
nor
does it have any reason or cause to believe, that it cannot perform
each and
every covenant contained in this Agreement. The Seller is solvent
and the sale
of the Mortgage Loans will not cause the Seller to become
insolvent. The sale
of the Mortgage Loans is not undertaken with the intent to hinder,
delay or
defraud any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate
any
mortgage loan or to deny any mortgage loan application is an
independent
decision based upon the Underwriting Guidelines, and is in no way
made as a
result of Purchaser's decision to purchase, or not to purchase, or
the price
Purchaser may offer to pay for, any such mortgage loan, if
originated;
(h) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws, 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
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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 (a) 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 (b) are true, correct and complete
as of their
respective dates 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.
(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 9.01 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 2
hereto, except for such documents as will be delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description
of the pool
characteristics for the applicable Mortgage Loan Package delivered
pursuant to
Section 11 on the related Closing Date in the form attached as
Exhibit B to
each related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other
document
furnished or to be furnished 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 in any material respect;
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<PAGE>
(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) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note,
except for any
Assignments of Mortgage which have been sent for recording, and
upon
recordation the Seller will be the owner of record of each Mortgage
and the
indebtedness evidenced by each Mortgage Note, and upon the sale of
the
Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files
with respect thereto in trust only for the purpose of servicing
and
supervising the servicing of each Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by
the
Seller upon the sale of the Mortgage Loans under this Agreement
constitutes
fair consideration and reasonably equivalent value for the Mortgage
Loans; and
(r) Privacy. The Seller agrees and acknowledges that as to all
nonpublic personal information received or obtained by it with
respect to any
Mortgagor: (a) such information is and shall be held by Seller in
accordance
with all applicable law, including but not limited to the privacy
provisions
of the Gramm-Leach Bliley Act; (b) to the extent such information
is included
in the Mortgage Loan Schedule, such information is in connection
with a
proposed or actual secondary market sale related to a transaction
of the
Mortgagor for purposes of 16 C.F.R. ss.313.14(a)(3); and (c) Seller
is hereby
prohibited from disclosing or using any such information other than
to carry
out the express provisions of this Agreement, or as otherwise
permitted by
applicable law. Subsection
9.02. Representations and Warranties Regarding Individual
Mortgage
Loans. The Seller hereby represents and warrants to the Purchaser
that, as to
each Mortgage Loan, as of the related Closing Date for such
Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in
the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to
the
related Closing Date for the Mortgage Loan under the terms of the
Mortgage
Note have been made and credited. No payment required under the
Mortgage Loan
is 30 days or more delinquent nor has any payment under the
Mortgage Loan been
30 days or more delinquent at any time since the origination of the
Mortgage
Loan;
(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental
assessments,
insurance premiums, ground rents, leasehold payments, water, sewer
and
municipal charges, leasehold payments or ground
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<PAGE>
rents which previously became due and owing have been paid, or an
escrow of
funds has been established in an amount sufficient to pay for every
such item
which remains unpaid and which has been assessed but is not yet due
and
payable. The Seller has not advanced funds, or induced, solicited
or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or
indirectly, for the payment of any amount required under the
Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or
date of
disbursement of the Mortgage Loan proceeds, whichever is greater,
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
instrument of waiver, alteration or modification has been executed,
and 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, and no Mortgagor was a debtor in any state or federal
bankruptcy or
insolvency proceeding at the time the Mortgage Loan was
originated;
(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 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
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"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 insurance policy
provides for
advance notice to the Seller or Servicer if the policy is canceled
or not
renewed, or if any other change that adversely affects the Seller's
interests
is made; the certificate includes the types and amounts of coverage
provided,
describes any endorsements that are part of the "master" policy and
would be
acceptable pursuant to the Fannie Mae Guides. The Seller has not
engaged in,
and has no knowledge of the Mortgagor, any Subservicer or any prior
originator
or subservicer'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 applicable to the origination or
servicing of
the Mortgage Loans, 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 Loans, including, without limitation,
any
provisions relating to a Prepayment Penalty, have been complied
with in all
material respects, the consummation of the transactions
contemplated hereby
will not involve the violation of any such laws or regulations in
any material
respect, 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 foregoing requirements.
This
representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in
part, and the
Mortgaged Property has not been released from the lien of the
Mortgage, in
whole or in part, nor has any instrument been executed that would
effect any
such release, cancellation, subordination or rescission. The Seller
has not
waived the performance by the Mortgagor of any action, if the
Mortgagor's
failure to perform such action would cause the Mortgage Loan to be
in default,
nor has the Seller waived any default resulting from any action or
inaction by
the Mortgagor;
(i) Type of Mortgaged Property. With respect to a Mortgage Loan
that is not a Co-op Loan and is not secured by an interest in a
leasehold
estate, the Mortgaged Property is a fee simple estate that consists
of a
single parcel of real property with a detached single family
residence erected
thereon, or a two- to four-family dwelling, or an individual
residential
condominium unit in a condominium project, or an individual unit in
a planned
unit development (or with respect to each Co-op Loan, an individual
unit in a
residential cooperative housing corporation); provided, however,
that any
condominium unit, planned unit development or residential
cooperative housing
corporation shall conform with the Underwriting Guidelines. 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
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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 (a)
log homes,
mobile homes, geodesic domes or other unique property types, or
(b)
Manufactured Homes. The representation and warranty in (b) above is
a Deemed
Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to
a First
Lien Loan) or second lien (with respect to a Second Lien Loan) on
the
Mortgaged Property, including all buildings and improvements on the
Mortgaged
Property and all installations and mechanical, electrical,
plumbing, heating
and air conditioning systems located in or annexed to such
buildings, and all
additions, alterations and replacements made at any time with
respect to the
foregoing. The lien of the Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date
of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage
Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B)
which do not adversely affect the Appraised Value of the
Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and
creates a valid, subsisting, enforceable and perfected first lien
(with
respect to a First Lien Loan) or second lien (with respect to a
Second Lien
Loan) and first priority (with respect to a First Lien Loan) or
second
priority (with respect to a Second Lien Loan) security interest on
the
property described therein and the Seller has full right to sell
and assign
the same to the Purchaser.
With respect to any Co-op Loan, the related Mortgage is a
valid,
subsisting and enforceable first priority security interest on the
related
cooperative shares securing the Mortgage Note, subject only to (a)
liens of
the related residential cooperative housing corporation for unpaid
assessments
representing the Mortgagor's pro rata share of the related
residential
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<PAGE>
cooperative housing corporation's payments for its blanket
mortgage, current
and future real property taxes, insurance premiums, maintenance
fees and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security interest intended to be provided
by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal,
valid and
binding obligation of the maker thereof enforceable in accordance
with its
terms (including, without limitation, any provisions therein
relating to
Prepayment Penalties). All parties to the Mortgage Note, the
Mortgage and any
other such related agreement had legal capacity to enter into the
Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and
any such
agreement, and the Mortgage Note, the 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
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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 Servicer of such Mortgage
Loan.
After the related Closing Date, the Seller will have no right to
modify or
alter the terms of the sale of the Mortgage Loan and the Seller
will have no
obligation or right to repurchase the Mortgage Loan or substitute
another
Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any legal
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 any
qualification requirements of Freddie Mac or Fannie Mae, as
applicable, and
(2) either (i) organized under the laws of such state, or (ii)
qualified to do
business in such state, or (iii) federal savings and loan
association, a
savings bank or a national bank having a principal office in such
state, or
(3) not doing business in such state;
(o) CLTV, LTV and PMI Policy. No Mortgage Loan that is a Second
Lien Loan has a CLTV greater than 100%. No Mortgage Loan has an LTV
greater
than 100%. Any Mortgage Loan that had at the time of origination an
LTV in
excess of 80% is insured as to payment defaults by a PMI Policy.
Any PMI
Policy in effect covers the related Mortgage Loan for the life of
such
Mortgage Loan. All provisions of such PMI Policy have been and are
being
complied with, such policy is in full force and effect, and all
premiums due
thereunder have been paid. No action, inaction, or event has
occurred and no
state of facts exists that has, or will result in the exclusion
from, denial
of, or defense to coverage. Any Mortgage Loan subject to a PMI
Policy
obligates the Mortgagor thereunder to maintain the PMI Policy and
to pay all
premiums and charges in connection therewith. The Mortgage Interest
Rate for
the Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net of
any such insurance premium if the related PMI Policy is
lender-paid;
(p) Title Insurance. With respect to a Mortgage Loan which is
not
a Co-op Loan, the Mortgage Loan is covered by an ALTA lender's
title insurance
policy or other 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
(with respect to a First Lien Loan) or second (with respect to a
Second Lien
Loan) priority lien of the Mortgage in the original principal
amount of the
Mortgage Loan, subject only to the exceptions contained in clauses
(i), (ii),
(iii) and (iv) of paragraph (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
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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,
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;
(q) No Defaults. Other than payments due but not yet 30 days or
more delinquent, there is no default, breach, violation or event
which would
permit acceleration existing under the Mortgage or the Mortgage
Note and no
event which, with the passage of time or with notice and the e
