Exhibit 99.11(b)
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
MORTGAGEIT, INC.,
Seller
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Dated as of December 1, 2005
Conventional,
Fixed and Adjustable Rate
Residential Mortgage Loans
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TABLE OF CONTENTS
Page
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SECTION 1.
DEFINITIONS....................................................1
SECTION 2.
AGREEMENT TO
PURCHASE.........................................15
SECTION 3.
MORTGAGE
SCHEDULES............................................15
SECTION 4.
PURCHASE
PRICE................................................15
SECTION 5.
EXAMINATION OF MORTGAGE
FILES.................................16
SECTION 6.
CONVEYANCE FROM SELLER TO
PURCHASER...........................17
SECTION 7.
SERVICING OF THE MORTGAGE
LOANS...............................20
SECTION 8.
[RESERVED]....................................................20
SECTION 9.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR
BREACH...................................20
SECTION 10.
CLOSING.......................................................38
SECTION 11.
CLOSING
DOCUMENTS.............................................39
SECTION 12.
COSTS.........................................................40
SECTION 13.
COOPERATION OF SELLER WITH A
RECONSTITUTION...................40
SECTION 14. THE
SELLER....................................................42
SECTION 15.
FINANCIAL
STATEMENTS..........................................44
SECTION 16.
MANDATORY DELIVERY; GRANT OF SECURITY
INTEREST................44
SECTION 17.
NOTICES.......................................................45
SECTION 18.
SEVERABILITY
CLAUSE...........................................46
SECTION 19.
COUNTERPARTS..................................................46
SECTION 20.
INTENTION OF THE
PARTIES......................................46
SECTION 21.
SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT.....................................................46
SECTION 22.
WAIVERS.......................................................47
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SECTION 23.
EXHIBITS......................................................47
SECTION 24.
GENERAL INTERPRETIVE
PRINCIPLES...............................47
SECTION 25.
REPRODUCTION OF
DOCUMENTS.....................................47
SECTION 26.
FURTHER
AGREEMENTS............................................48
SECTION 27.
RECORDATION OF ASSIGNMENTS OF
MORTGAGE........................48
SECTION 28. NO
SOLICITATION...............................................48
SECTION 29.
WAIVER OF TRIAL BY
JURY.......................................49
SECTION 30.
GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF
PROCESS.......................................................49
SECTION 31.
AMENDMENT.....................................................49
SECTION 32.
CONFIDENTIALITY...............................................49
SECTION 33.
ENTIRE
AGREEMENT..............................................50
SECTION 34.
COMPLIANCE WITH REGULATION
AB.................................50
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
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AND WARRANTIES AGREEMENT
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THIS THIRD AMENDED AND
RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
("AGREEMENT"),
DATED AS OF DECEMBER
1, 2005, BY AND
BETWEEN MORGAN STANLEY
MORTGAGE CAPITAL INC.,
A NEW YORK CORPORATION
(THE
"PURCHASER"), AND MORTGAGEIT, INC., A NEW YORK 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
October 1, 2004,
as amended by that certain Amended and Restated Mortgage Loan
Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended by that
certain
Second Amended and Restated Mortgage Loan Purchase and Warranties
Agreement,
dated as of December 1, 2005 (the "Original Purchase Agreement")
and the
Seller desires to sell, from time to time, to the Purchaser, and
the Purchaser
desires to purchase, from time to time, from the Seller, certain
conventional
fixed and adjustable rate residential first-lien mortgage loans
(the "Mortgage
Loans") on a servicing released basis as described herein, and
which shall be
delivered in pools of whole loans (each, a "Mortgage Loan Package")
on various
dates as provided herein (each, a "Closing Date");
WHEREAS, the Purchaser and the Seller desire to enter into this
Agreement to amend and restate the Original Purchase Agreement to
make certain
modifications as set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable
consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Purchaser
and the Seller agree as follows:
SECTION 1.
Definitions.
For purposes of this Agreement the following capitalized terms
shall have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices which are in accordance with
accepted
mortgage servicing practices of prudent mortgage lending
institutions which
service mortgage loans of the same type as such Mortgage Loan in
the
jurisdiction where the related Mortgaged Property is located.
Act: The National
Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased
pursuant
to this Agreement, the Mortgage Interest Rate of which is adjusted
from time
to time in accordance with the terms of the related Mortgage
Note.
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Affiliate: With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified
Person. For the purposes of this definition, "control" when used
with respect
to any specified Person means the power to direct the management
and policies
of such Person, directly or indirectly, whether through the
ownership of
voting securities, by contract or otherwise and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer:
A Fannie Mae Transfer or a Freddie Mac
Transfer.
Agreement: This
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 individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form and
in blank,
sufficient under the laws of the jurisdiction in which the related
Mortgaged
Property is located to give record notice of the sale of the
Mortgage to the
Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage
Loan or
(b) for which Monthly Payments of principal (not including the
payment due on
its stated maturity date) are based on an amortization schedule
that would be
insufficient to fully amortize the principal thereof by the stated
maturity
date of the Mortgage Loan.
Business Day: Any day other than (i) a Saturday or Sunday, (ii)
a
day on which banking and savings and loan institutions, in the
State of New
York or the State in which the Interim Servicer's servicing
operations are
located or (iii) the state in which the Custodian's operations are
located,
are authorized or obligated by law or executive order to be
closed.
Cash-Out Refinance: A Refinanced Mortgage Loan in which the
proceeds received were in excess of the amount of funds required to
repay the
principal balance of any existing first mortgage on the related
Mortgaged
Property, pay related closing costs and satisfy any outstanding
subordinate
mortgages on the related Mortgaged Property and which provided
incidental cash
to the related Mortgagor of more than 1% of the original principal
balance of
such Mortgage Loan.
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Closing Date: The date or dates on which the Purchaser from
time
to time shall purchase, and the Seller from time to time shall
sell, the
Mortgage Loans listed on the related Mortgage Loan Schedule with
respect to
the related Mortgage Loan Package.
Closing Documents: The documents required to be delivered on
each
Closing Date pursuant to Section 11.
CLTA: The California
Land Title Association.
Code: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Commission: The
United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property, whether
permanent
or temporary, partial or entire, by exercise of the power of
condemnation or
the right of eminent domain, to the extent not required to be
released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op: A private, cooperative housing corporation, having only
one
class of stock outstanding, which owns or leases land and all or
part of a
building or buildings, including apartments, spaces used for
commercial
purposes and common areas therein and whose board of directors
authorizes the
sale of stock and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with
respect
to a dwelling unit occupied by the Mortgagor and relating to the
stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a dwelling unit in a residential cooperative housing
corporation
and a collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and
maintained pursuant to Subsection 2.04 of the Interim Servicing
Agreement
(with respect to each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention
of
the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and
other Mortgage Loan Documents. If more than one Custodial Agreement
is in
effect at any given time, all of the individual Custodial
Agreements shall
collectively be referred to as the "Custodial Agreement."
Custodian: LaSalle Bank National Association, a national
banking
association and its successors in interest, or any successor to the
Custodian
under the Custodial Agreement as therein provided.
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Cut-off Date: The date or dates designated as such on the
related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Depositor: The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
to
be repurchased or replaced or to be replaced with a Qualified
Substitute
Mortgage Loan by the Seller in accordance with the terms of this
Agreement.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim
period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is
due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Payments: With
respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer
rents,
municipal charges, mortgage insurance premiums, fire and hazard
insurance
premiums, condominium charges, and any other payments required to
be escrowed
by the Mortgagor with the Mortgagee pursuant to the Mortgage or any
other
document.
Exchange Act: The
Securities Exchange Act of 1934, as amended.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae
Guides: The Fannie Mae Sellers' Guide and the
Fannie Mae Servicers' Guide, as amended or restated from time to
time.
Fannie Mae Transfer:
As defined in Section 13.
FHA: The
Federal Housing Administration, an agency within the
United States Department of Housing and Urban Development, or any
successor
thereto and including the Federal Housing Commissioner and the
Secretary of
Housing and Urban Development where appropriate under the FHA
Regulations.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended and in effect from time to
time.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac:
The Federal Home Loan
Mortgage Corporation, or
any successor thereto.
Freddie Mac Transfer:
As defined in Section 13.
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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, (b) classified as a "high cost
home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans"
as that
term was defined in clause (1) of the definition of that term in
the New
Jersey Home Ownership Security Act of 2002 that were originated
between
November 26, 2003 and July 7, 2004), "high risk home," "predatory"
or similar
loan under any other applicable state, federal or local law (or a
similarly
classified loan using different terminology under a law imposing
heightened
regulatory scrutiny or additional legal liability for residential
mortgage
loans having high interest rates, points and/or fees) or (c) a
Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard &
Poor's Glossary.
For avoidance of doubt, the parties agree that this definition
shall apply to
any law regardless of whether such law is presently, or in the
future becomes,
the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as a Home Loan pursuant
to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal agency or official thereof which may from time to time
succeed to the
functions thereof with regard to Mortgage Insurance issued by the
FHA. The
term "HUD," for purposes of this Agreement, is also deemed to
include
subdivisions thereof such as the FHA and Government National
Mortgage
Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds
of insurance policies insuring the Mortgage Loan or the related
Mortgaged
Property.
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.
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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 terms
of each Adjustable Rate Mortgage Loan shall not at any time exceed
the
Mortgage Interest Rate at the time of origination of such
Adjustable Rate
Mortgage Loan by more than the amount per annum set forth on the
related
Mortgage Loan Schedule.
Liquidation Proceeds: The proceeds received in connection with
the
liquidation of a defaulted Mortgage Loan, whether through the sale
or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale
or
otherwise or the sale of the related Mortgaged Property if the
Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, other
than amounts
received following the acquisition of REO Property, Insurance
Proceeds and
Condemnation Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of
any
date of determination, the ratio (expressed as a percentage) the
numerator of
which is the outstanding principal balance of the Mortgage Loan as
of the
related Cut-off Date (unless otherwise indicated), and the
denominator of
which is the lesser of (a) the Appraised Value of the Mortgaged
Property at
origination and (b) if the Mortgage Loan was made to finance the
acquisition
of the related Mortgaged Property, the purchase price of the
Mortgaged
Property.
LTV: Loan-to-Value
Ratio.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the
Federal
Manufactured Home Construction and Safety Standards adopted on June
15, 1976,
by the Department of Housing and Urban Development ("HUD Code"), as
amended in
2000, which preempts state and local building codes. Each unit is
identified
by the presence of a HUD Plate/Compliance Certificate label. The
sections are
then transported to the site and joined together and affixed to a
pre-built
permanent foundation (which satisfies the manufacturer's
requirements and all
state, county, and local building codes and regulations). The
manufactured
home is built on a non-removable, permanent frame chassis that
supports the
complete unit of walls, floors, and roof. The underneath part of
the home may
have running gear (wheels, axles, and brakes) that enable it to be
transported
to the permanent site. The wheels and hitch are removed prior to
anchoring the
unit to the permanent foundation. The manufactured home must be
classified as
real estate and taxed accordingly. The permanent foundation may be
on land
owned by the mortgager or may be on leased land.
MERS: Mortgage
Electronic
Registration
Systems,
Inc.,
a
Delaware corporation, and its successors in interest.
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
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MERS Procedures Manual and (b) the Seller has designated or will
designate the
Purchaser as the Investor on the MERS(R) 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(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
Monthly Payment: With
respect to any Mortgage Loan, the scheduled
payment of principal and interest payable by a Mortgagor under the
related
Mortgage Note on each Due Date.
Mortgage: With respect to a Mortgage Loan that is not a Co-op
Loan, the mortgage, deed of trust or other instrument securing a
Mortgage
Note, which creates a first lien on the Mortgaged Property. With
respect to a
Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage
Loan Documents and the items listed in Exhibit A-2 hereto and any
additional
documents required to be added to the Mortgage File pursuant to
this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from
time to time
in accordance with the provisions of the related Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment
as set
forth in the related Mortgage Note.
Mortgage Loan: Each mortgage loan sold, assigned and
transferred
pursuant to this Agreement and identified on the applicable
Mortgage Loan
Schedule, which Mortgage Loan includes, without limitation, the
Mortgage File,
the Monthly Payments, Principal Prepayments, Liquidation
Proceeds,
Condemnation Proceeds, Insurance Proceeds, Servicing Rights and all
other
rights, benefits, proceeds and obligations arising from or in
connection with
such Mortgage Loan, excluding replaced or repurchased mortgage
loans.
Mortgage Loan Documents: With respect to any Mortgage Loan, the
documents required to be delivered to the Custodian pursuant to
Subsection
6.03.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall
be
purchased by the Purchaser from the Seller from time to time on
each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth the following information with respect to each Mortgage Loan
in the
related Mortgage Loan Package: (1) the Seller's Mortgage Loan
identifying
number; (2) the Mortgagor's name; (3) the social security number of
the
Mortgagor; (4) a code indicating whether the Mortgagor's race
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and/or ethnicity is (i) native American or Alaskan native, (ii)
Asian/Pacific
islander, (iii) African American, (iv) white, (v) Hispanic or
Latino, (vi)
other minority, (vii) not provided by the Mortgagor, (viii) not
applicable (if
the Mortgagor is an entity) and (ix) unknown or missing; (5) the
street
address of the Mortgaged Property including the city, state and zip
code; (6)
a code indicating whether the Mortgagor is self-employed; (7) a
code
indicating whether the Mortgaged Property is owner-occupied,
investment
property or a second home; (8) a code indicating the number and
type of
residential units constituting the Mortgaged Property (e.g., single
family
residence, two-family residence, three-family residence,
four-family
residence, multifamily residence, condominium, manufactured
housing, mixed-use
property, raw land and other non residential properties, planned
unit
development or cooperative stock in a cooperative housing
corporation); (9)
the original months to maturity or the remaining months to maturity
from the
related Cut-off Date, in any case based on the original
amortization schedule
and, if different, the maturity expressed in the same manner but
based on the
actual amortization schedule; (10) the Loan-to-Value Ratio at
origination;
(11) the Mortgage Interest Rate as of the related Cut-off Date;
(12) the date
on which the first Monthly Payment was due on the Mortgage Loan
and, if such
date is not consistent with the Due Date currently in effect, the
Due Date;
(13) the stated maturity date; (14) the amount of the Monthly
Payment as of
the related Cut-off Date; (15) whether the Mortgage Loan has
Monthly Payments
that are interest-only for a period of time; (16) the last payment
date on
which a payment was actually applied to the outstanding principal
balance;
(17) the schedule of the payment delinquencies in the prior 12
months; (18)
the Servicing Fee Rate; (19) the original principal amount of the
Mortgage
Loan; (20) the principal balance of the Mortgage Loan as of the
close of
business on the related Cut-off Date, after deduction of payments
of principal
due and collected on or before the related Cut-off Date; (21) with
respect to
each Mortgage Loan with a second lien behind it, the combined
principal
balance of the Mortgage Loan and the applicable second lien loan,
at
origination, (22) a code indicating whether there is a simultaneous
second;
(23) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate
Adjustment Date; (24) with respect to Adjustable Rate Mortgage
Loans, the
Gross Margin; (25) with respect to Adjustable Rate Mortgage Loans,
the
Lifetime Rate Cap under the terms of the Mortgage Note; (26) with
respect to
Adjustable Rate Mortgage Loans, a code indicating the type of
Index, including
the methodology for rounding (e.g., rounded upward, if necessary,
to the
nearest ten thousandth (.0001)) and the applicable time frame for
determining
the Index; (27) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate);
(28) a code indicating the purpose of the loan (i.e., purchase,
Rate/Term
Refinance or Cash-Out Refinance); (29) a code indicating the
documentation
style (i.e., no documents, full, alternative, reduced, no income/no
asset,
stated income, no ration, reduced or NIV); (30) asset verification
(Y/N); (31)
the loan credit classification (as described in the Underwriting
Guidelines);
(32) whether such Mortgage Loan provides for a Prepayment Penalty;
(33) the
Prepayment Penalty period of such Mortgage Loan, if applicable;
(34) a
description of the Prepayment Penalty, if applicable; (35) the
Mortgage
Interest Rate as of origination; (36) the credit risk score (FICO
score); (37)
the date of origination; (38) with respect to Adjustable Rate
Mortgage Loans,
the Mortgage Interest Rate adjustment period; (39) with respect to
Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment
percentage; (40)
with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate
floor; (41) the Mortgage Interest Rate calculation method (i.e.,
30/360,
simple interest, other); (42) with respect to Adjustable Rate
Mortgage Loans,
the Periodic Rate Cap as of the first Interest Rate Adjustment
Date; (43) with
respect to each Adjustable Rate Mortgage Loan, a code indicating
whether the
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Mortgage Loan provides for negative amortization; (44) a code
indicating
whether the Mortgage Loan has negative amortization and the maximum
of such
negative amortization; (45) a code indicating whether the Mortgage
Loan is a
Balloon Mortgage Loan; (46) a code indicating whether the Mortgage
Loan by its
original terms or any modifications thereof provides for
amortization beyond
its scheduled maturity date; (47) the original Monthly Payment due;
(48) the
Appraised Value; (49) appraisal type; (50) appraisal date; (51) a
code
indicating whether the Mortgage Loan is covered by a PMI Policy
and, if so,
identifying the PMI Policy provider; (54) the certificate number of
the PMI
Policy, if applicable; (52) the amount of coverage of the PMI
Policy, if
applicable; (53) in connection with a condominium unit, a code
indicating
whether the condominium project where such unit is located is
low-rise or
high-rise; (54) a code indicating whether the Mortgaged Property is
a
leasehold estate; (55) with respect to the related Mortgagor,
the
debt-to-income ratio; (56) sales price; (57) automated valuation
model (AVM);
(58) a code indicating whether the Mortgage Loan is a MERS
Designated Mortgage
Loan and the MERS Identification Number, if applicable; (59) a
field
indicating whether such Mortgage Loan is a Home Loan; and (60) the
DU or LP
number, if applicable. With respect to the Mortgage Loans in the
aggregate,
the related Mortgage Loan Schedule shall set forth the following
information,
as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the
current aggregate outstanding principal balance of the Mortgage
Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; (4)
the
weighted average maturity of the Mortgage Loans; (5) the average
principal
balance of the Mortgage Loans; (6) the applicable Cut-off Date; and
(7) the
applicable Closing Date.
Mortgage Note: The original executed note or other evidence of
the
Mortgage Loan indebtedness of a Mortgagor, including any riders or
addenda
thereto.
Mortgaged Property: With respect to a Mortgage Loan that is not
a
Co-op Loan, the Mortgagor's real property securing repayment of a
related
Mortgage Note, consisting of an 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 Chief
Executive
Officer or a Chief Financial Officer or an Executive 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, (b) qualification of the Mortgage Loans in a
REMIC or (c)
compliance with the REMIC Provisions, must be (unless otherwise
stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of
the Seller and any servicer of the Mortgage Loans, (ii) does not
have any
material direct or indirect financial interest in the Seller or any
servicer
of the Mortgage Loans or in an Affiliate of either and (iii) is not
connected
with the Seller or any servicer of the Mortgage Loans as an
officer, employee,
director or person performing similar functions.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute
maximum amount by which the Mortgage Interest Rate therein may
increase or
decrease on an Interest Rate Adjustment Date above or below the
Mortgage
Interest Rate previously in effect. The Periodic Rate Cap for each
Adjustable
Rate Mortgage Loan is the rate set forth as such on the related
Mortgage Loan
Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute
maximum amount by which the Mortgage Interest Rate therein may
decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate
previously in
effect.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company,
trust,
unincorporated organization, government or any agency or political
subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance
issued
by an insurer acceptable under the Underwriting Guidelines and
qualified to do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the
amount
of any premium or penalty required to be paid by the Mortgagor if
the
Mortgagor prepays such Mortgage Loan as provided in the related
Mortgage Note
or Mortgage.
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Principal Prepayment: Any payment or other recovery of
principal
on a Mortgage Loan which is received in advance of its scheduled
Due Date,
including any Prepayment Penalty thereon, and which is not
accompanied by an
amount of interest representing scheduled interest due on any date
or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller in exchange for the Mortgage Loans
purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Each agreement setting
forth
the general terms and conditions of the purchase and sale of the
Mortgage
Loans to be purchased from time to time under this Agreement.
Purchase Price Percentage: The percentage of par (expressed as
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 FIRREA and the regulations promulgated thereunder, all as in
effect on the
date the Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller
purchased Mortgage Loans, provided that the following conditions
are
satisfied: (i) such Mortgage Loans were originated pursuant to an
agreement
between the Seller and such Person that contemplated that such
Person would
underwrite mortgage loans from time to time, for sale to the
Seller, in
accordance with underwriting guidelines designated by the Seller
("Designated
Guidelines") or guidelines that do not vary materially from such
Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as
described in
clause (i) above and were acquired by the Seller within 180 days
after
origination; (iii) either (x) the Designated Guidelines were, at
the time such
Mortgage Loans were originated, used by the Seller in origination
of mortgage
loans of the same type as the Mortgage Loans for the Seller's own
account or
(y) the Designated Guidelines were, at the time such Mortgage Loans
were
underwritten, designated by the Seller on a consistent basis for
use by
lenders in originating mortgage loans to be purchased by the
Seller; and (iv)
the Seller employed, at the time such Mortgage Loans were acquired
by the
Seller, pre-purchase or post-purchase quality assurance procedures
(which may
involve, among other things, review of a sample of mortgage loans
purchased
during a particular time period or through particular channels)
designed to
ensure that Persons from which it purchased mortgage loans properly
applied
the underwriting criteria designated by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to
be
substituted by the Seller for a Deleted Mortgage Loan which must,
on the date
of such substitution, be
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<PAGE>
approved by the Purchaser and (i) have an unpaid principal balance,
after
deduction of all scheduled payments due in the month of
substitution (or in
the case of a substitution of more than one mortgage loan for a
Deleted
Mortgage Loan, an aggregate principal balance), not in excess of
the unpaid
principal balance of the Deleted Mortgage Loan (the amount of any
shortfall
will be deposited in the Custodial Account by the Seller in the
month of
substitution); (ii) have a Mortgage Interest Rate not less than and
not more
than one percent (1%) greater than the Mortgage Interest Rate of
the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not greater
than and
not more than one (1) year less than that of the Deleted Mortgage
Loan; (iv)
be of the same type as the Deleted Mortgage Loan (i.e., fixed rate
or
adjustable rate with same Mortgage Interest Rate Cap and Index);
(v) comply as
of the date of substitution with each representation and warranty
set forth in
Section 9 of this Agreement; (vi) be current in the payment of
principal and
interest; (vii) be secured by a Mortgaged Property of the same type
and
occupancy status as secured the Deleted Mortgage Loan; and (viii)
have payment
terms that do not vary in any material respect from those of the
Deleted
Mortgage Loan.
Rate/Term Refinance: A Refinanced Mortgage Loan, in which the
proceeds received were not in excess of the amount of funds
required to repay
the principal balance of any existing first mortgage loan on the
related
Mortgaged Property, pay related closing costs and satisfy any
outstanding
subordinate mortgages on the related Mortgaged Property and did not
provide
incidental cash to the related Mortgagor of more than one percent
(1%) of the
original principal balance of such Mortgage Loan.
Reconstitution:
Any Securitization
Transaction
or a Whole
loan Transfer.
Reconstitution Agreements: The agreement or agreements entered
into by the Seller and the Purchaser and/or certain third parties
on the
Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a
Securitization Transaction pursuant to Section 13, including, but
not limited
to, a seller's warranties and servicing agreement with respect to a
Whole Loan
Transfer, and a pooling and servicing agreement and/or
seller/servicer
agreements and related custodial/trust agreement and documents with
respect to
a Securitization Transaction.
Reconstitution Date:
As defined in Section 13.
Refinanced Mortgage
Loan: A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended
from time to time, and subject to such clarification and
interpretation as
have been provided by the Commission in the adopting release
(Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506,
1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be
provided by
the Commission or its staff from time to time.
REMIC: A "real estate
mortgage investment
conduit" within
the
meaning of Section 860D of the Code.
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REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of
Subchapter M
of Chapter 1, Subtitle A of the Code, and related provisions and
regulations,
rulings or pronouncements promulgated thereunder, as the foregoing
may be in
effect from time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified
therein).
REO Property: A Mortgaged Property acquired by the Interim
Servicer through foreclosure or deed in lieu of foreclosure.
Repurchase Price: With respect to any Mortgage Loan, a price
equal
to the unpaid principal balance of the Mortgage Loan to be
repurchased, plus
accrued interest thereon at the Mortgage Interest Rate and
including the last
Due Date through which interest had last been paid through the date
of such
repurchase, plus the amount of any outstanding advances owed to any
servicer,
plus all costs and expenses incurred by the Purchaser or any
servicer arising
out of or based upon such breach, including without limitation
costs and
expenses incurred in the enforcement of the Seller's repurchase
obligation
hereunder.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a condominium project or (iv) a
one-family
dwelling in a planned unit development, none of which is a
co-operative,
mobile or Manufactured Home.
RESPA: The Real Estate
Settlement
Procedures
Act, as amended
from time to time.
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 34.04(a).
Servicing Fee: With respect to each Mortgage Loan subject to
the
Interim Servicing Agreement, a fee payable monthly equal to
one-twelfth of the
product of (a) the
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Servicing Fee Rate and (b) the outstanding principal balance of
such Mortgage
Loan. Such fee shall be payable monthly and shall be pro-rated for
any portion
of a month during which the Mortgage Loan is serviced by the
Interim Servicer
under the Interim Servicing Agreement. The obligation of the
Purchaser to pay
the Servicing Fee is limited to, and the Servicing Fee is payable
solely from,
the interest portion (including recoveries with respect to interest
from
Liquidation Proceeds, to the extent permitted by this Agreement) of
such
Monthly Payment collected by the Interim Servicer, or as otherwise
provided
under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Interim Servicing 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 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.
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Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of
the
indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: In the event the Interim Servicer is terminated
as
servicer of a Mortgage Loan pursuant to the Interim Servicing
Agreement, the
date on which the Purchaser, or its designee, shall receive the
transfer of
servicing responsibilities and begin to perform the servicing of
such Mortgage
Loans, and the Interim Servicer shall cease all servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the
Seller, a copy of which is attached hereto as Exhibit G and a
then-current
copy of which is attached as an exhibit to the related Assignment
and
Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement
to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an
aggregate
actual unpaid principal balance on the related Cut-off Date in an
amount as
set forth in the related Purchase Price and Terms Agreement, or in
such other
amount as agreed by the Purchaser and the Seller as evidenced by
the actual
aggregate unpaid principal balance of the Mortgage Loans accepted
by the
Purchaser on each Closing Date, together with the related Mortgage
Files and
all rights and obligations arising under the documents contained
therein.
SECTION 3. Mortgage
Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the
Mortgage Loans
to be purchased on each Closing Date in accordance with the related
Purchase
Price and Terms Agreement and this Agreement (each, a "Preliminary
Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the Mortgage Loans to be purchased on a particular Closing Date to
the
Purchaser at least five (5) Business Days prior to the related
Closing Date.
The related Mortgage Loan Schedule shall be the related Preliminary
Mortgage
Schedule with those Mortgage Loans which have not been funded prior
to the
related Closing Date deleted.
SECTION 4. Purchase
Price.
The Purchase Price for each Mortgage Loan and the related
Servicing Rights shall be the percentage of par as stated in the
related
Purchase Price and Terms Agreement (subject to adjustment as
provided
therein), multiplied by the aggregate actual unpaid principal
balance, as
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of the related Cut-off Date, of the Mortgage Loans listed on the
related
Mortgage Loan Schedule, after application of scheduled payments of
principal
due on or before the related Cut-off Date, but only to the extent
such
payments were actually received. The initial principal amount of
the related
Mortgage Loans shall be the aggregate actual unpaid principal
balance of the
Mortgage Loans, so computed as of the related Cut-off Date. If so
provided in
the related Purchase Price and Terms Agreement, portions of the
Mortgage Loans
and/or the Servicing Rights shall be priced and paid for
separately.
In addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, at closing, accrued interest
from the last
"interest paid to" date through the day immediately preceding the
related
Closing Date, inclusive, on the aggregate actual unpaid principal
amount of
the related Mortgage Loans as of the related Cut-off Date at the
weighted
average Mortgage Interest Rate of those Mortgage Loans. The
Purchase Price
plus accrued interest as set forth in the preceding paragraph shall
be paid to
the Seller by wire transfer of immediately available funds to an
account
designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal
due
after the related Cut-off Date, (2) all other recoveries of
principal
collected on or after the related Cut-off Date, and (3) all
payments of
interest on the Mortgage Loans net of applicable Servicing Fees
(minus that
portion of any such payment which is allocable to the period prior
to the
related Cut-off Date). The outstanding principal balance of each
Mortgage Loan
as of the related Cut-off Date is determined after application of
payments of
principal due on or before the related Cut-off Date, to the extent
actually
collected, together with any unscheduled principal prepayments
collected prior
to such Cut-off Date; provided, however, that payments of scheduled
principal
and interest paid prior to such Cut-off date, but to be applied on
a Due Date
beyond the related Cut-off Date shall not be applied to the
principal balance
as of the related Cut-off Date. Such prepaid amounts shall be the
property of
the Purchaser. The Seller shall deposit any such prepaid amounts
into the
Custodial Account, which account is established for the benefit of
the
Purchaser for subsequent remittance by the Seller to the
Purchaser.
SECTION 5. Examination
of Mortgage Files.
At least ten (10) Business Days prior to the related Closing
Date,
the Seller shall either (a) deliver to the Purchaser or its
designee in
escrow, for examination with respect to each Mortgage Loan to be
purchased,
the related Mortgage File, including a copy of the Assignment of
Mortgage,
pertaining to each Mortgage Loan, or (b) make the related Mortgage
File
available to the Purchaser for examination at such other location
as shall
otherwise be acceptable to the Purchaser. Such examination of the
Mortgage
Files may be made by the Purchaser or its designee at any
reasonable time
before or after the related Closing Date. If the Purchaser makes
such
examination prior to the related Closing Date and determines, in
its sole
discretion, that any Mortgage Loans do not conform to any of the
requirements
set forth in the related Purchase Price and Terms Agreement, or as
an Exhibit
annexed thereto, the Purchaser may delete such Mortgage Loans from
the related
Mortgage Loan Schedule, and such Deleted Mortgage Loan (or Loans)
may be
replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the
Purchaser. The Purchaser may, at its option and without notice to
the Seller,
purchase some or all of the Mortgage Loans without conducting any
partial or
complete examination. The fact that the Purchaser or its designee
has
conducted or has failed to conduct any partial or complete
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examination of the Mortgage Files shall not impair in any way the
Purchaser's
(or any of its successor's) rights to demand repurchase,
substitution or other
relief as provided in this Agreement. In the event that the Seller
fails to
deliver the Mortgage File with respect to any Mortgage Loan, the
Seller shall,
upon the request of the Purchaser, repurchase such Mortgage Loan as
the price
and in the manner specified in Subsection 9.03.
SECTION 6. Conveyance
from Seller to Purchaser.
Subsection 6.01
Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage
Loan
Schedule with respect to the related Mortgage Loan Package to be
purchased on
each Closing Date, shall execute and deliver an Assignment and
Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment
and
Conveyance Agreement"). The Seller shall ensure that the contents
of each
Servicing File, which are required to be retained by or delivered
to the
Interim Servicer to service the Mortgage Loans pursuant to the
Interim
Servicing Agreement and thus not delivered to the Purchaser, or its
designee,
are and shall be held in trust by the Interim Servicer for the
benefit of the
Purchaser as the owner thereof. The Seller agrees that the Interim
Servicer's
possession of any portion of each such Mortgage File is at the will
of the
Purchaser for the sole purpose of facilitating servicing of the
Mortgage Loans
pursuant to this Agreement, and such retention and possession by
the Interim
Servicer shall be in a custodial capacity only. The ownership of
each Mortgage
Note, each Mortgage and the contents of each Mortgage File is
vested in the
Purchaser and the ownership of all records and documents with
respect to the
related Mortgage Loan prepared by or which come into the possession
of the
Interim Servicer shall immediately vest in the Purchaser and shall
be retained
and maintained, in trust, by the Interim Servicer at the will of
the Purchaser
in such custodial capacity only. The Seller shall cause the
Servicing File
retained by the Interim Servicer pursuant to this Agreement to
be
appropriately identified in the Seller's computer system and/or
books and
records, as appropriate, to clearly reflect the sale of the related
Mortgage
Loan to the Purchaser. The Seller shall cause the Interim Servicer
to release
from its custody the contents of any Servicing File retained by it
only in
accordance with this Agreement or the Interim Servicing Agreement,
except when
such release is required in connection with a repurchase of any
such Mortgage
Loan pursuant to Subsection 9.03 or if required under applicable
law or court
order.
Subsection 6.02
Books and Records.
Record title to each Mortgage and the related Mortgage Note as
of
the related Closing Date shall be in the name of the Seller, an
Affiliate of
the Seller, the Purchaser or one or more designees of the
Purchaser, as the
Purchaser shall select; provided, however, that if a Mortgage has
been
recorded in the name of MERS or its designee, the Seller is shown
as the owner
of the related Mortgage Loan on the records of MERS for purposes of
the system
of recording transfers of beneficial ownership of mortgages
maintained by
MERS. Notwithstanding the foregoing, ownership of each Mortgage and
related
Mortgage Note shall be vested solely in the Purchaser or the
appropriate
designee of the Purchaser, as the case may be. All rights arising
out of the
Mortgage Loans including, but not limited to, all funds received by
the Seller
or the Interim Servicer after the related Cut-off Date on or in
connection
with a Mortgage Loan shall be vested in the Purchaser or one or
more designees
of the Purchaser;
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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 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.
In connection with the foregoing, the Seller shall indemnify
the
Purchaser and its present and former directors, officers, employees
and agents
and any Successor Servicer and its present and former directors,
officers,
employees and agents, and hold such parties harmless against any
losses,
damages, penalties, fines, forfeitures, legal fees and expenses and
related
costs, judgments, and other costs and expenses based on or grounded
upon, or
resulting from, the fact that any Mortgage Loan is not covered by
an ALTA or
CLTA lender's title insurance policy. For purposes of the previous
sentence,
"Purchaser" shall mean the Person then acting as the Purchaser
under this
Agreement and any and all Persons who previously were "Purchasers"
under this
Agreement and "Successor Servicer" shall mean any Person designated
as the
Successor Servicer pursuant to this Agreement and any and all
Persons who
previously were "Successor Servicers" pursuant to this
Agreement.
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The Custodian shall certify its receipt of all such Mortgage
Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the
related Closing Date, as evidenced by the Initial Certification of
the
Custodian in the form annexed to the Custodial Agreement. The
Seller shall
comply with the terms of the Custodial Agreement and the Purchaser
shall pay
all fees and expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward
to
the Custodian, or to such other Person as the Purchaser shall
designate in
writing, original documents evidencing an assumption,
modification,
consolidation or extension of any Mortgage Loan entered into in
accordance
with this Agreement within two weeks of their execution, provided,
however,
that the Seller shall provide the Custodian, or to such other
Person as the
Purchaser shall designate in writing, with a certified true copy of
any such
document submitted for recordation within two weeks of its
execution, and
shall promptly provide the original of any document submitted for
recordation
or a copy of such document certified by the appropriate public
recording
office to be a true and complete copy of the original within two
(2) weeks
following receipt of the original document by the Interim Servicer;
provided,
however, that such original recorded document or certified copy
thereof shall
be delivered to the Purchaser no later than 180 days following the
related
Closing Date, unless there has been a delay at the applicable
recording
office.
If the original or copy of any document submitted for
recordation
to the appropriate public recording office is not delivered to the
Purchaser
or its designee within 180 days following the related Closing Date,
the
related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased
by the Seller at the price and in the manner specified in
Subsection 9.03. The
foregoing repurchase obligation shall not apply if the Seller
cannot cause the
Interim Servicer to deliver such original or copy of any document
submitted
for recordation to the appropriate public recording office within
the
specified period due to a delay caused by the recording office in
the
applicable jurisdiction; provided that (i) the Seller shall instead
deliver a
recording receipt of such recording office or, if such recording
receipt is
not available, an officer's certificate of a servicing officer of
the Seller,
confirming that such document has been accepted for recording, and
(ii) such
document is delivered within twelve (12) months of the related
Closing Date.
The Seller shall pay all initial recording fees, if any, for
the
Assignments of Mortgage and any other fees or costs in transferring
all
original documents to the Custodian or, upon written request of the
Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the
Purchaser's
designee shall be responsible for recording the Assignments of
Mortgage and
shall be reimbursed by the Seller for the costs associated
therewith pursuant
to the preceding sentence.
Subsection 6.04
Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer to, have
an
internal quality control program that verifies, on a regular basis,
the
existence and accuracy of the legal documents, credit documents,
property
appraisals, and underwriting decisions. The program shall include
evaluating
and monitoring the overall quality of the Seller'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,
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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.
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 New York
corporation, 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 and is licensed,
qualified and in
good standing in the states where the Mortgaged Property is located
if the
laws of such state require licensing or qualification in order to
conduct
business of the type conducted by the Seller. The Seller has
corporate power
and authority to execute and deliver this Agreement and to perform
its
obligations hereunder; the execution, delivery and performance of
this
Agreement (including all instruments of transfer to be delivered
pursuant to
this Agreement)
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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 the Purchaser, the consummation
of the
transactions contemplated hereby, nor the fulfillment of or
compliance with
the terms and conditions of this Agreement, will conflict with or
result in a
breach of any of the terms, conditions or provisions of the
Seller's charter
or by-laws or any legal restriction or any agreement or instrument
to which
the Seller is now a party or by which it is bound, or constitute a
default or
result in an acceleration under any of the foregoing, or result in
the
violation of any law, rule, regulation, order, judgment or decree
to which the
Seller or its property is subject, or result in the creation or
imposition of
any lien, charge or encumbrance that would have an adverse effect
upon any of
its properties pursuant to the terms of any mortgage, contract,
deed of trust
or other instrument, or impair the ability of the Purchaser to
realize on the
Mortgage Loans, impair the value of the Mortgage Loans, or impair
the ability
of the Purchaser to realize the full amount of any insurance
benefits accruing
pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
or
investigation pending or, to the knowledge of the Seller,
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;
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(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 and regulations, including
without
limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money
Laundering Laws"); the Seller has established an anti-money
laundering
compliance program as required by the Anti-Money Laundering Laws,
has
conducted the requisite due diligence in connection with the
origination of
each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including
with respect to the legitimacy of the applicable Mortgagor and the
origin of
the assets used by the said Mortgagor to purchase the property in
question,
and maintains, and will maintain, sufficient information to
identify the
applicable Mortgagor for purposes of the Anti-Money Laundering
Laws;
(i) Financial Statements. The Seller has delivered to the
Purchaser financial statements as to its last three complete fiscal
years and
any later quarter ended more than 60 days prior to the execution of
this
Agreement. All such financial statements fairly present, in all
material
respects, the pertinent results of operations and changes in
financial
position for each of such periods and the financial position at the
end of
each such period of the Seller and its subsidiaries and have been
prepared in
accordance with generally accepted accounting principles
consistently applied
throughout the periods involved, except as set forth in the notes
thereto. In
addition, the Seller has delivered information as to its loan gain
and loss
experience in respect of foreclosures and its loan delinquency
experience for
the immediately preceding three-year period, in each case with
respect to
mortgage loans owned by it and such mortgage loans serviced for
others during
such period, and all such information so delivered shall be true
and correct
in all material respects. There has been no change in the
business,
operations, financial condition, properties or assets of the Seller
since the
date of the Seller's financial statements that would have a
material adverse
effect on its ability to perform its obligations under this
Agreement. The
Seller has completed any forms requested by the Purchaser in a
timely manner
and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from
among
the outstanding one- to four-family mortgage loans in the Seller's
portfolio
at the related Closing Date as to which the representations and
warranties set
forth in Subsection 9.02 could be made and such selection was not
made in a
manner so as to affect adversely the interests of the
Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be
delivered
with respect to each
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<PAGE>
Mortgage Loan pursuant to the Custodial Agreement shall be
delivered to the
Custodian all in compliance with the specific requirements of the
Custodial
Agreement. With respect to each Mortgage Loan, the Seller will be
in
possession of a complete Mortgage File in compliance with Exhibit A
hereto,
except for such documents as will be delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description
of the pool
characteristics for the applicable Mortgage Loan Package delivered
pursuant to
Section 11 on the related Closing Date in the form attached as
Exhibit B to
each related Assignment and Conveyance Agreement;
(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,
in light of
the circumstances in which it was made, not misleading;
(n) No Brokers. The Seller has not dealt with any broker,
investment banker, agent or other person that may be entitled to
any
commission or compensation in connection with the sale of the
Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally
accepted
accounting principles the transfer of the Mortgage Loans will be
treated as a
sale on the books and records of the Seller and the Seller has
determined that
the disposition of the Mortgage Loans pursuant to this Agreement
will be
afforded sale treatment for tax and accounting purposes; and
(p) Reasonable Purchase Price. The consideration received by
the
Seller upon the sale of the Mortgage Loans under this Agreement
constitutes
fair consideration and reasonably equivalent value for the Mortgage
Loans.
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;
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(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental
assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or
ground rents which previously became due and owing have been paid,
or an
escrow of funds has been established in an amount sufficient to pay
for every
such item which remains unpaid and which has been assessed but is
not yet due
and payable. The Seller has not advanced funds, or induced,
solicited or
knowingly received any advance of funds by a party other than the
Mortgagor,
directly or indirectly, for the payment of any amount required
under the
Mortgage Loan, except for interest accruing from the date of the
Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is
earlier,
to the day which precedes by one month the related Due Date of the
first
installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
and
Mortgage have not been impaired, waived, altered or modified in any
respect,
from the date of origination except by a written instrument which
has been
recorded, if necessary to protect the interests of the Purchaser,
and which
has been delivered to the Custodian or to such other Person as the
Purchaser
shall designate in writing, and the terms of which are reflected in
the
related Mortgage Loan Schedule. The substance of any such waiver,
alteration
or modification has been approved by the issuer of any related PMI
Policy and
the title insurer, if any, to the extent required by the policy,
and its terms
are reflected on the related Mortgage Loan Schedule, if applicable.
No
Mortgagor has been released, in whole or in part, except in
connection with an
assumption agreement, approved by the issuer of any related PMI
Policy and the
title insurer, to the extent required by the policy, and which
assumption
agreement is part of the Mortgage Loan File delivered to the
Custodian or to
such other Person as the Purchaser shall designate in writing and
the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of
rescission, set-off, counterclaim or defense, including without
limitation the
defense of usury, nor will the operation of any of the terms of the
Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render either
the Mortgage Note or the Mortgage unenforceable, in whole or in
part, or
subject to any right of rescission, set-off, counterclaim or
defense,
including without limitation the defense of usury, and no such
right of
rescission, set-off, counterclaim or defense has been asserted with
respect
thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage,
all
buildings or other improvements upon the Mortgaged Property are
insured by a
generally acceptable insurer against loss by fire, hazards of
extended
coverage and such other hazards as are provided for in the
Underwriting
Guidelines. If required by the National Flood Insurance Act of
1968, as
amended, each Mortgage Loan is covered by a flood insurance policy
meeting the
requirements of the current guidelines of the Federal Insurance
Administration
as in effect which policy 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
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opportunity to choose the carrier of the required hazard insurance,
provided
the policy is not a "master" or "blanket" hazard insurance policy
covering a
condominium, or any hazard insurance policy covering the common
facilities of
a planned unit development. The hazard insurance policy is the
valid and
binding obligation of the insurer, is in full force and effect, and
will be in
full force and effect and inure to the benefit of the Purchaser
upon the
consummation of the transactions contemplated by this Agreement.
The Seller
has not engaged in, and has no knowledge (based upon reasonable and
diligent
inquiry) of the Mortgagor's having engaged in, any act or omission
which would
impair the coverage of any such policy, the benefits of the
endorsement
provided for herein, or the validity and binding effect of either
including,
without limitation, no unlawful fee, commission, kickback or other
unlawful
compensation or value of any kind has been or will be received,
retained or
realized by any attorney, firm or other person or entity, and no
such unlawful
items have been received, retained or realized by the Seller;
(g)
Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law including, without limitation,
usury,
truth-in-lending, real estate settlement procedures, consumer
credit
protection, predatory and abusive lending, equal credit opportunity
and
disclosure laws applicable to the Mortgage Loan, including,
without
limitation, any provisions relating to a Prepayment Penalty have
been complied
with, the consummation of the transactions contemplated hereby will
not
involve the violation of any such laws or regulations, and the
Seller shall
maintain in its possession, available for the Purchaser's
inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance
with all
such requirements;
(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 Mortgaged Property has been used for commercial
purposes;
provided, that Mortgaged Properties which contain a home office
shall not be
considered as being used for commercial purposes as long as the
Mortgaged
Property has not been altered for commercial purposes and is not
storing any
chemicals or raw materials other than those commonly used for
homeowner
repair, maintenance and/or household purposes. None of the
Mortgaged
Properties are Manufactured Homes, log homes, mobile homes,
geodesic domes or
other unique property types;
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(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property,
including all
buildings and improvements on the Mortgaged Property and all
installations and
mechanical, electrical, plumbing, heating and air conditioning
systems located
in or annexed to such buildings, and all additions, alterations
and
replacements made at any time with respect to the foregoing. The
lien of the
Mortgage is subject only to:
(i) the lien of
current real property taxes and assessments not
yet due and payable;
(ii) covenants,
conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator
of the Mortgage Loan and (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
(iii) other matters to which like properties are commonly
subject
which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and
creates a valid, subsisting, enforceable and perfected first lien
and first
priority security interest on the property described therein and
the Seller
has full right to sell and assign the same to the Purchaser.
With respect to any Co-op Loan, the related Mortgage is a
valid,
subsisting and enforceable first priority security interest on the
related
cooperative shares securing the Mortgage Note, subject only to (a)
liens of
the related residential cooperative housing corporation for unpaid
assessments
representing the Mortgagor's pro rata share of the related
residential
cooperative housing corporation's payments for its blanket
mortgage, current
and future real property taxes, insurance premiums, maintenance
fees and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security interest intended to be provided
by the
related Security Agreement;
(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
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<PAGE>
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, such Mortgage Loan will be free and clear of any
encumbrance,
equity, participation interest, lien, pledge, charge, claim or
security
interest. The Seller intends to relinquish all rights to possess,
control and
monitor the Mortgage Loan, except as may be required of the Seller
in its
Mortgage 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 interest in
the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1)
in compliance with any and all applicable licensing requirements of
the laws
of the state wherein the Mortgaged Property is located, and (2)
either (i)
organized under the laws of such state, or (ii) qualified to do
business in
such state, or (iii) a federal savings and loan association, a
savings bank or
a national bank having a principal office in such state, or (3) not
doing
business in such state;
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<PAGE>
(o) LTV, PMI Policy. No Mortgage Loan has an LTV greater than
100%. Any Mortgage Loan that had at the time of origination an LTV
in excess
of 80% is insured as to payment defaults by a PMI Policy. Any PMI
Policy in
effect covers the related Mortgage Loan for the life of such
Mortgage Loan.
All provisions of such PMI Policy have been and are being complied
with, such
policy is in full force and effect, and all premiums due thereunder
have been
paid. No action, inaction, or event has occurred and no state of
facts exists
that has, or will result in the exclusion from, denial of, or
defense to
coverage. Any Mortgage Loan subject to a PMI Policy obligates the
Mortgagor
thereunder to maintain the PMI Policy and to pay all premiums and
charges in
connection therewith. The Mortgage Interest Rate for the Mortgage
Loan as set
forth on the related Mortgage Loan Schedule is net of any such
insurance
premium;
(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
priority lien of the Mortgage in the original principal amount of
the Mortgage
Loan (or to the extent a Mortgage Note provides for negative
amortization, the
maximum a
