SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 24, 1997
Saxon Asset Securities Corporation
(Exact name of registrant as specified in charter)
Virginia 34-0-20552 52-1785164
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4880 Cox Road, Glen Allen, Virginia 23060
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (804) 967-7400
(Former name or former address, if changed since last report.)
<PAGE>
Item 1. Changes in Control of Registrant. Not Applicable.
Item 2. Acquisition or Disposition of Assets. Not Applicable.
Item 3. Bankruptcy or Receivership. Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant. Not Applicable.
Item 5. Other Events.
On June 24, 1997, the Registrant caused the issuance and sale of
$466,861,000 aggregate initial principal amount of Mortgage Loan Asset Backed
Certificates, Series 1997-2, pursuant to a Trust Agreement dated as of June 1,
1997 (the "Trust Agreement"), among the Registrant, Texas Commerce Bank National
Association, as Master Servicer, Custodian, Certificate Registrar and Paying
Agent, and Citibank, N. A., as Trustee, and the related Standard Terms to Trust
Agreement (January 1997 Edition).
Offered Certificates were issued with original principal amounts and
pass-through rates set forth below:
Designation Pass-Through Rate Principal Balance
Class AF-1 Certificates 6.950%(1) $15,000,000
Class AF-2 Certificates 6.570%(1) $10,000,000
Class AF-3 Certificates 6.630%(1) $31,000,000
Class AF-4 Certificates 6.800%(1) $9,000,000
Class AF-5 Certificates 7.065%(1) $16,000,000
Class AF-6 Certificates 7.285%(1) $10,000,000
Class AF-7 Certificates 7.000%(1) $15,552,000
Class MF-1 Certificates 7.205%(1) $2,090,000
Class MF-2 Certificates 7.430%(1) $7,167,000
Class BF Certificates 7.695%(1) $3,643,000
Class AV-1 Certificates (2) $293,561,000
Class MV-1 Certificates (2) $13,896,000
Class MV-2 Certificates (2) $26,924,000
Class BV Certificates (2) $13,028,000
(1) Subject to a cap equal to the Net Rate on the Fixed Rate Mortgage Loans for
the applicable Accrual Period.
(2) Variable.
In addition, Class C and Class R Certificates were sold in private
transactions.
The Certificates represent undivided ownership interest in pools of
mortgage loans (the "Mortgage Loans") held by a trust (the "Trust") created
pursuant to the Trust Agreement . The Mortgage Loans were acquired by the
Registrant from Saxon Mortgage, Inc. ("SMI"), an affiliate of the Registrant
which originated or acquired the Mortgage Loans from various mortgage banking
institutions. The Mortgage Loans are secured by liens on single family
residential properties, including investment properties (which may be
condominiums, one family residences, two to four family residences or homes in
planned unit developments). The Mortgage Loans will be serviced by Meritech
Mortgage Services, Inc., an affiliate of the Registrant, and Long Beach Mortgage
Company.
The Offered Certificates were purchased by Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Prudential Securities Incorporated, Lehman Brothers
Inc., and PaineWebber Incorporated (the "Underwriters"), from the Seller
pursuant to an Underwriting Agreement dated June 16, 1997, and offered pursuant
to Registration Statement No. 333-20025 by the Underwriters from time to time in
negotiated transactions or otherwise, at varying prices to be determined at the
time of sale.
Elections will be made to treat certain assets of the Trust as a real
estate mortgage investment conduits ("REMICs") for federal income tax purposes.
Each Class of Certificates listed above will constitute "regular interests" in
the Issuing REMIC.
The description of the Mortgage Loans pledged to the Trustee pursuant
to the Agreement begins on the following page. The amounts contained in the
following tables have been rounded to the nearest dollar amount and percentage,
as applicable. Asterisks (*) in the following tables indicate values between
0.0% and 0.5%
<PAGE>
Item 6. Registrations of Registrant's Directors.
Not Applicable.
Item 7. Financial Statements, Pro Forma, Financial Information and Exhibits
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits
4.1 Trust Agreement dated June 1, 1997, among Saxon Asset
Securities Company, Texas Commerce Bank National
Association, as Master Servicer, Custodian,
Certificate Registrar and Paying Agent and Citibank,
N. A., as Trustee, and Standard Terms to the Trust
Agreement (January 1997 Edition).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SAXON ASSET SECURITIES COMPANY
By: /s/ Bradley D. Adams
____________________________________
Bradley D. Adams, Vice President
June 24, 1997
SAXON SECURITIES ASSET TRUST 1997-2
MORTGAGE LOAN ASSET BACKED CERTIFICATES
SERIES 1997-2
TRUST AGREEMENT
dated as of June 1, 1997,
among
SAXON ASSET SECURITIES COMPANY,
as Depositor
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Master Servicer, Custodian, Certificate Registrar and Paying Agent
and
CITIBANK, N.A.
as Trustee
<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT......................................................1
ARTICLE I DEFINITIONS.....................................................1
Section 1.01. Standard Terms; Section References.......................1
Section 1.02. Defined Terms............................................2
ARTICLE II FORMATION OF TRUST; CONVEYANCE OF MORTGAGE LOANS..............16
Section 2.01. Conveyance of Mortgage Loans............................16
ARTICLE III REMITTING TO CERTIFICATEHOLDERS..............................17
Section 3.01. Subaccount Distributions................................15
Section 3.02. Certificate Distributions...............................18
Section 3.03. Reports to the Depositor................................21
Section 3.04. Reports by Master Servicer..............................22
THE CERTIFICATES..........................................................23
Section 4.01. The Certificates........................................23
Section 4.02. Denominations...........................................23
Section 4.03. Interest Fund...........................................23
ARTICLE V MISCELLANEOUS PROVISIONS........................................24
Section 5.01. Request for Opinions....................................24
Section 5.02. Form of Certificates....................................24
Section 5.03. Schedules and Exhibits..................................24
Section 5.04. Governing Law...........................................24
Section 5.05. REMIC Administration....................................24
Section 5.06. Master Servicer; Month-End Interest.....................25
Section 5.07. Trustee; Advances.......................................24
Section 5.08. Auction Call............................................24
Schedule I: The Mortgage Loans: A. Group I Mortgage Loans
B. Group II Mortgage Loans
Schedule II: Sales Agreement and Servicing Agreements
Schedule III: Mortgage Loans for which first payment to the Trust will be
after July 1, 1997
Exhibit AF: 1: Form of Class AF-1 Certificate
2: Form of Class AF-2 Certificate
3: Form of Class AF-3 Certificate
4: Form of Class AF-4 Certificate
5: Form of Class AF-5 Certificate
6: Form of Class AF-6 Certificate
7: Form of Class AF-7 Certificate
Exhibit MF: 1: Form of Class MF-1 Certificate
2: Form of Class MF-2 Certificate
Exhibit BF: Form of Class BF Certificate
Exhibit AV-1: Form of Class AV-1 Certificate
Exhibit MV: 1: Form of Class MV-1 Certificate
2: Form of Class MV-2 Certificate
Exhibit BV: Form of Class BV Certificate
Exhibit C: Form of Class C Certificate
Exhibit R: Form of Class R Certificate
<PAGE>
TRUST AGREEMENT
THIS TRUST AGREEMENT dated as of June 1, 1997 (this "Agreement"), among
SAXON ASSET SECURITIES COMPANY, a Virginia corporation (the "Depositor"), TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, as Master Servicer, Custodian, Certificate
Registrar and Paying Agent (in such capacities, the "Master Servicer", the
"Custodian", the "Certificate Registrar" and the "Paying Agent"), and CITIBANK,
N.A., a national banking association, as Trustee (in such capacity, the
"Trustee"), under this Agreement and the Standard Terms to Trust Agreement
(January 1997 Edition) (the "Standard Terms"), all the provisions of which,
unless otherwise specified herein, are incorporated herein and shall be a part
of this Agreement as if set forth herein in full (this Agreement with the
Standard Terms so incorporated, the "Trust Agreement").
PRELIMINARY STATEMENT
The Board of Directors of the Depositor has duly authorized the
formation of a trust (the "Trust") to issue a series of asset backed
certificates with an aggregate initial Certificate Principal Balance of
$466,861,000 to be known as the Saxon Securities Asset Trust 1997-2, Mortgage
Loan Asset Backed Certificates, Series 1997-2 (the "Certificates"). The
Certificates in the aggregate evidence the entire beneficial ownership in the
Trust. The Certificates consist of the following: the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class AF-7, Class MF-1, Class
MF-2, Class BF, Class AV-1, Class MV-1, Class MV-2, Class BV, Class C and Class
R Certificates.
In accordance with Section 10.01 of the Standard Terms, the Trustee will
make elections to treat certain assets of the Trust as real estate mortgage
investment conduits for federal income tax purposes.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth, the Depositor, the Master
Servicer, the Custodian, the Certificate Registrar, the Paying Agent and the
Trustee agree as follows:
ARTICLE I DEFINITIONS
Section 1.01. Standard Terms; Section References
(a) The Depositor, the Master Servicer, the Custodian, the Certificate
Registrar, the Paying Agent and the Trustee acknowledge that the Standard Terms
prescribe their duties, responsibilities and obligations with respect to the
Certificates, agree to observe and perform such duties, responsibilities and
obligations to the extent they are not inconsistent with the provisions of this
Agreement and acknowledge that, except to the extent inconsistent with the
provisions of this Agreement, the Standard Terms as of the Closing Date, as
modified by Sections 1.02 and 5.07 hereof, are and shall be a part of this
Agreement to the same extent as if set forth herein in full.
(b) Unless otherwise specified herein, all references in this Agreement
to sections shall mean sections contained in this Agreement.
(c) Paragraph (e) of the definition of "Trustee Mortgage Loan File" in
the Standard Terms is amended to read as follows:
"(e) in the case of a Mortgage Loan that is not identified in the
Mortgage Loan Schedule as a Junior Mortgage Loan of the type described
below, an original Title Insurance Policy, Certificate of Title
Insurance or a written commitment to issue a Title Insurance Policy or
Certificate of Title Insurance or a copy of a Title Insurance Policy
or Certificate of Title Insurance certified as true and correct by the
applicable Insurer and, in the case of a Mortgage Loan identified as a
Junior Mortgage Loan with a principal balance of $50,000 or less, a
representation of the Seller in the Sales Agreement that (i) the
related senior mortgage loan is held by an institutional lender such
as a bank, other financial institution or mortgage company and (ii)
the Seller has determined based on a review of a property profile or
title report acceptable to such Seller that the Borrower has valid
title to the Mortgaged Premises;"
(d) Section 3.04(a)(iii) of the Standard Terms is amended by adding
the following sentence at the end thereof:
1
<PAGE>
"Such other action shall first be submitted in writing to
SMI and subsequently approved by SMI."
(e) Section 3.08(a) of the Standard Terms is amended by adding the
following sentence after the first sentence thereof:
"The Master Servicer shall use all reasonable efforts to
obtain no more frequently than monthly from the Servicer and
to furnish to SMI a statement itemizing the Servicer's
marketing and liquidation efforts and an accounting of the
proceeds and expenses associated with the liquidation of the
REO Property."
(f) The fifth sentence of Section 3.10 of the Standard Terms is
deleted and the following sentence is inserted in place thereof:
"The Master Servicer, with approval from SMI, may waive
compliance by the Servicer with certain provisions of the
Servicing Agreement".
(g) The sixth sentence of Section 3.10 of the Standard Terms is
deleted and the following two sentences are added in place thereof:
"The Master Servicer shall then promptly instruct the
Servicer or otherwise respond to any request of the
Servicer. The Master Servicer shall immediately forward to
SMI for approval all requests regarding forebearance or
modification, partial release of collateral or disposition
of REO Property. SMI shall promptly review the request and
communicate its recommendation to the Master Servicer".
Section 1.02. Defined Terms
Capitalized terms used but not defined in this Agreement shall have the
respective meanings assigned to them in Section 1.01 of the Standard Terms. In
addition, the following provisions shall govern the defined terms set forth
below for the Trust Agreement. If a term defined in the Standard Terms is also
defined herein, the definition herein shall control.
"Accrual Period": With respect to the Group I Certificates and any
Distribution Date, the calendar month immediately preceding such Distribution
Date; a "calendar month" shall be deemed to be 30 days. With respect to the
Group II Certificates and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
the current Distribution Date. All calculations of interest on the Group I
Certificates will be made on the basis of a 360-day year assumed to consist of
twelve 30-day months and all calculations of interest on the Group II
Certificates will be made on the basis of the actual number of days elapsed in
the related Accrual Period and in a year of 360 days.
"Auction Sale Bid Date": The first Master Servicer Remittance Date on
which the sum of the Group I Certificate Principal Balance and the Group II
Certificate Principal Balance has declined to 10% or less of such sum on the
Closing Date.
"Available Funds Cap": As of any Distribution Date, a per annum rate
equal to the quotient of (i) the excess of (A) the total annual scheduled
interest on Group II based on the Mortgage Interest Rates in effect during the
related Due Period over (B) twelve times the total of the Servicing Fees and
Master Servicing Fee for such Due Period for Group II divided by (ii) the Group
II Certificate Principal Balance.
"Book-Entry Certificates": The Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class AF-7, Class MF-1, Class MF-2, Class BF,
Class AV-1, Class MV-1, Class MV-2 and Class BV Certificates, except to the
extent provided in Section 5.03 of the Standard Terms.
"Certificate": Any of the Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class AF-7, Class MF-1, Class MF-2, Class BF,
Class AV-1, Class MV-1, Class MV-2, Class BV, Class C or Class R Certificates.
2
<PAGE>
"Certificate Registrar": Texas Commerce Bank National Association, a
national banking association, and its successors and assigns in such capacity.
"Class": Any of Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class
AF-5, Class AF-6, Class AF-7, Class MF-1, Class MF-2, Class BF, Class AV-1,
Class MV-1, Class MV-2, Class BV, Class C or Class R.
"Certificate Definitions":
"Group I Certificates":
<TABLE>
<S> <C>
"Class AF-1 Certificate": Any "Class AF-2 Certificate": Any "Class AF-3 Certificate": Any
Certificate designated as a Certificate designated as a "Class Certificate designated as a
"Class AF-1 Certificate" on the AF-2 Certificate" on the face "Class AF-3 Certificate" on the
face thereof, in the form of thereof, in the form of Exhibit AF-2 face thereof, in the form of
Exhibit AF-1 hereto, representing hereto, representing the right to Exhibit AF-3 hereto, representing
the right to distributions as set distributions as set forth herein. the right to distributions as set
forth herein. forth herein.
"Class AF-1 Certificate "Class AF-2 Certificate Principal "Class AF-3 Certificate
Principal Balance": The Balance": The Certificate Principal Principal Balance": The
Certificate Principal Balance of Balance of the Class AF-2 Certificate Principal Balance of
the Class AF-1 Certificates. Certificates. the Class AF-3 Certificates.
"Class AF-1 Current Interest": "Class AF-2 Current Interest": "Class AF-3 Current Interest":
With respect to any Distribution With respect to any Distribution With respect to any Distribution
Date, the interest accrued on the Date, the interest accrued on the Date, the interest accrued on the
Class AF-1 Certificate Principal Class AF-2 Certificate Principal Class AF-3 Certificate Principal
Balance immediately prior to such Balance immediately prior to such Balance immediately prior to such
Distribution Date during the Distribution Date during the related Distribution Date during the
related Accrual Period at the Accrual Period at the Class AF-2 related Accrual Period at the
Class AF-1 Pass-Through Rate plus Pass-Through Rate plus any amount Class AF-3 Pass-Through Rate plus
any amount previously distributed previously distributed with respect any amount previously distributed
with respect to interest for to interest for Class AF-2 that is with respect to interest for
Class AF-1 that is recovered recovered during the related Accrual Class AF-3 that is recovered
during the related Accrual Period Period as a voidable preference by a during the related Accrual Period
as a voidable preference by a trustee in bankruptcy pursuant to a as a voidable preference by a
trustee in bankruptcy pursuant to final non-appealable order. trustee in bankruptcy pursuant to
a final non-appealable order. a final non-appealable order.
"Class AF-1 Interest Carry "Class AF-2 Interest Carry Forward "Class AF-3 Interest Carry
Forward Amount": With respect to Amount": With respect to each Forward Amount": With respect to
each Distribution Date, the sum Distribution Date, the sum of (i) each Distribution Date, the sum
of (i) the excess of (A) Class the excess of (A) Class AF-2 Current of (i) the excess of (A) Class
AF-1 Current Interest with Interest with respect to prior AF-3 Current Interest with
respect to prior Distribution Distribution Dates over (B) the respect to prior Distribution
Dates over (B) the amount amount actually distributed to Class Dates over (B) the amount
actually distributed to Class AF-2 with respect to interest on actually distributed to Class
AF-1 with respect to interest on such prior Distribution Dates and AF-3 with respect to interest on
such prior Distribution Dates and (ii) interest thereon at the Class such prior Distribution Dates and
(ii) interest thereon at the AF-2 Pass-Through Rate for the (ii) interest thereon at the
Class AF-1 Pass-Through Rate for related Accrual Period. Class AF-3 Pass-Through Rate for
the related Accrual Period. the related Accrual Period.
"Class AF-1 Pass-Through Rate": "Class AF-2 Pass-Through Rate": "Class AF-3 Pass-Through Rate":
With respect to each Distribution With respect to each Distribution With respect to each Distribution
Date, the lesser of (i) 6.950% Date, the lesser of (i) 6.570% per Date, the lesser of (i) 6.630%
per annum and (ii) the Group I annum and (ii) the Group I Net Rate and (ii) the Group I Net Rate for
Net Rate for such date. for such date. such date.
"Class AF-4 Certificate": Any "Class AF-5 Certificate": Any "Class AF-6 Certificate": Any
Certificate designated as a Certificate designated as a "Class Certificate designated as a
"Class AF-4 Certificate" on the AF-5 Certificate" on the face "Class AF-6 Certificate" on the
face thereof, in the form of thereof, in the form of Exhibit AF-5 face thereof, in the form of
Exhibit AF-4 hereto, representing hereto, representing the right to Exhibit AF-6 hereto, representing
the right to distributions as set distributions as set forth herein. the right to distributions as set
forth herein. forth herein.
"Class AF-4 Certificate "Class AF-5 Certificate Principal "Class AF-6 Certificate
Principal Balance": The Balance": The Certificate Principal Principal Balance": The
Certificate Principal Balance of Balance of the Class AF-5 Certificate Principal Balance of
the Class AF-4 Certificates. Certificates. the Class AF-6 Certificates.
"Class AF-4 Current Interest": "Class AF-5 Current Interest": "Class AF-6 Current Interest":
With respect to any Distribution With respect to any Distribution With respect to any Distribution
Date, the interest accrued on the Date, the interest accrued on the Date, the interest accrued on the
Class AF-4 Certificate Principal Class AF-5 Certificate Principal Class AF-6 Certificate Principal
Balance immediately prior to such Balance immediately prior to such Balance immediately prior to such
Distribution Date during the Distribution Date during the related Distribution Date during the
related Accrual Period at the Accrual Period at the Class AF-5 related Accrual Period at the
Class AF-4 Pass-Through Rate plus Pass-Through Rate plus any amount Class AF-6 Pass-Through Rate plus
any amount previously distributed previously distributed with respect any amount previously distributed
with respect to interest for to interest for Class AF-5 that is with respect to interest for
Class AF-4 that is recovered recovered during the related Accrual Class AF-6 that is recovered
during the related Accrual Period Period as a voidable preference by a during the related Accrual Period
as a voidable preference by a trustee in bankruptcy pursuant to a as a voidable preference by a
trustee in bankruptcy pursuant to final non-appealable order. trustee in bankruptcy pursuant to
a final non-appealable order. a final non-appealable order.
3
<PAGE>
"Class AF-4 Interest Carry "Class AF-5 Interest Carry Forward "Class AF-6 Interest Carry
Forward Amount": With respect to Amount": With respect to each Forward Amount": With respect to
each Distribution Date, the sum Distribution Date, the sum of (i) each Distribution Date, the sum
of (i) the excess of (A) Class the excess of (A) Class AF-5 Current of (i) the excess of (A) Class
AF-4 Current Interest with Interest with respect to prior AF-6 Current Interest with
respect to prior Distribution Distribution Dates over (B) the respect to prior Distribution
Dates over (B) the amount amount actually distributed to Class Dates over (B) the amount
actually distributed to Class AF-5 with respect to interest on actually distributed to Class
AF-4 with respect to interest on such prior Distribution Dates and AF-6 with respect to interest on
such prior Distribution Dates and (ii) interest thereon at the Class such prior Distribution Dates and
(ii) interest thereon at the AF-5 Pass-Through Rate for the (ii) interest thereon at the
Class AF-4 Pass-Through Rate for related Accrual Period. Class AF-6 Pass-Through Rate for
the related Accrual Period. the related Accrual Period.
"Class AF-4 Pass-Through Rate": "Class AF-5 Pass-Through Rate": "Class AF-6 Pass-Through Rate":
With respect to each Distribution With respect to each Distribution With respect to each Distribution
Date, the lesser of (i) 6.800% Date, the lesser of (i) 7.065% per Date, the lesser of (i) 7.285%
per annum and (ii) the Group I annum and (ii) the Group I Net Rate per annum plus, after the Step Up
Net Rate for such date. for such date. Date, 0.50% and (ii) the Group I
Net Rate for such date.
</TABLE>
"Class AF-7 Certificate": Any Certificate designated as a "Class AF-7
Certificate" on the face thereof, in the form of Exhibit AF-7 hereto,
representing the right to distributions as set forth herein.
"Class AF-7 Certificate Principal Balance": The Certificate Principal
Balance of the Class AF-7 Certificates.
"Class AF-7 Current Interest": With respect to any Distribution Date,
the interest accrued on the Class AF-7 Certificate Principal Balance immediately
prior to such Distribution Date during the related Accrual Period at the Class
AF-7 Pass-Through Rate plus any amount previously distributed with respect to
interest for Class AF-7 that is recovered during the related Accrual Period as a
voidable preference by a trustee in bankruptcy pursuant to a final
non-appealable order.
"Class AF-7 Interest Carry Forward Amount": With respect to each
Distribution Date, the sum of (i) the excess of (A) Class AF-7 Current Interest
with respect to prior Distribution Dates over (B) the amount actually
distributed to Class AF-7 Certificates with respect to interest on such prior
Distribution Dates and (ii) interest thereon at the Class AF-7 Pass-Through Rate
for the related Accrual Period.
"Class AF-7 Pass-Through Rate": With respect to each Distribution Date,
the lesser of (i) 7.000% per annum plus, after the Step Up Date, 0.50% and (ii)
the Group I Net Rate for such date.
"Class AF-7 Distribution Amount": With respect to any Distribution
Date, the product of (i) a fraction the numerator of which is the Class AF-7
Certificate Principal Balance and the denominator of which is the Group I Class
A Certificate Principal Balance, in each case immediately prior to such
Distribution Date, (ii) the Group I Class A Principal Distribution Amount for
such Distribution Date and (iii) the applicable percentage for such Distribution
Date set forth below:
Distribution Date Percentage
----------------- ----------
July 1997 - June 2000 0%
July 2000 - June 2002 45%
July 2002 - June 2003 80%
July 2003 - June 2004 100%
July 2004 and thereafter 300%
<TABLE>
<S> <C>
"Class MF-1 Applied Realized Loss "Class MF-2 Applied Realized Loss "Class BF Applied Realized Loss
Amount": As to any Distribution Amount": As to any Distribution Date, Amount": As to any Distribution
Date, the sum of the Realized the sum of the Realized Losses with Date, the sum of the Realized
Losses with respect to Group I respect to Group I which have been Losses with respect to Group I
which have been applied in applied in reduction of the Certificate which have been applied in
reduction of the Certificate Principal Balance of the Class MF-2 reduction of the Certificate
Principal Balance of the Class Certificates pursuant to Section Principal Balance of the Class
MF-1 Certificates pursuant to 3.02(h) hereof. BF Certificates pursuant to
Section 3.02(h) hereof. Section 3.02(h) hereof.
"Class MF-1 Certificate": "Class MF-2 Certificate": Any "Class BF Certificate": Any
Any Certificate designated as a Certificate designated as a "Class MF-2 Certificate designated as a
"Class MF-1 Certificate" on the Certificate" on the face thereof, in "Class BF Certificate" on the
face thereof, in the form of the form of Exhibit MF-2 hereto, face thereof, in the form of
Exhibit MF-1 hereto, representing representing the right to distributions Exhibit BF hereto, representing
the right to distributions as set as set forth herein. the right to distributions as
forth herein. set forth herein.
4
<PAGE>
"Class MF-1 Certificate Principal "Class MF-2 Certificate Principal "Class BF Certificate Principal
Balance": The Certificate Balance": The Certificate Principal Balance": The Certificate
Principal Balance of the Class Balance of the Class MF-2 Certificates Principal Balance of the Class
MF-1 Certificates less any Class less any Class MF-2 Applied Realized BF Certificates less any Class
MF-1 Applied Realized Loss Loss Amount. BF Applied Realized Loss Amount.
Amount.
"Class MF-1 Current Interest": "Class MF-2 Current Interest": With "Class BF Current Interest":
With respect to any Distribution respect to any Distribution Date, the With respect to any Distribution
Date, the interest accrued on the interest accrued on the Class MF-2 Date, the interest accrued on
Class MF-1 Certificate Principal Certificate Principal Balance the Class BF Certificate
Balance immediately prior to such immediately prior to such Distribution Principal Balance immediately
Distribution Date during the Date during the related Accrual Period prior to such Distribution Date
related Accrual Period at the at the Class MF-2 Pass-Through Rate during the related Accrual
Class MF-1 Pass-Through Rate plus plus any amount previously distributed Period at the Class BF Pass-
any amount previously distributed with respect to interest for Class MF-2 Through Rate plus any amount
with respect to interest for that is recovered during the related previously distributed with
Class MF-1 that is recovered Accrual Period as a voidable preference respect to interest for Class BF
during the related Accrual Period by a trustee in bankruptcy pursuant to that is recovered during the
as a voidable preference by a a final non-appealable order. related Accrual Period as a
trustee in bankruptcy pursuant to voidable preference by a trustee
a final non-appealable order. in bankruptcy pursuant to a
final non-appealable order.
"Class MF-1 Interest Carry "Class MF-2 Interest Carry Forward "Class BF Interest Carry
Forward Amount": With respect to Amount": With respect to each Forward Amount": With respect to
each Distribution Date, the sum Distribution Date, the sum of (i) the each Distribution Date, the sum
of (i) the excess of (A) Class excess of (A) Class MF-2 Current of (i) the excess of (A) Class
MF-1 Current Interest with Interest with respect to prior BF Current Interest with respect
respect to prior Distribution Distribution Dates over (B) the amount to prior Distribution Dates over
Dates over (B) the amount actually distributed to Class MF-2 with (B) the amount actually
actually distributed to Class MF- respect to interest on such prior distributed to Class BF with
1 with respect to interest on Distribution Dates and (ii) interest respect to interest on such
such prior Distribution Dates and thereon at the Class MF-2 Pass-Through prior Distribution Dates and
(ii) interest thereon at the Rate for the related Accrual Period. (ii) interest thereon at the
Class MF-1 Pass-Through Rate for Class BF Pass-Through Rate for
the related Accrual Period. the related Accrual Period.
"Class MF-1 Pass-Through Rate": "Class MF-2 Pass-Through Rate": With "Class BF Pass-Through Rate":
With respect to each Distribution respect to each Distribution Date, the With respect to each
Date, the lesser of (i) 7.205% lesser of (i) 7.430% per annum and Distribution Date, the lesser of
per annum and (ii) the Group I (ii) the Group I Net Rate on such date. (i) 7.695% per annum and (ii)
Net Rate on such date. the Group I Net Rate on such
date.
"Class MF-1 Unpaid Realized Loss "Class MF-2 Unpaid Realized Loss "Class BF Unpaid Realized Loss
Amount": As to any Distribution Amount": As to any Distribution Date, Amount": As to any Distribution
Date, the excess of (i) Class MF- the excess of (i) Class MF-2 Applied Date, the excess of (i) Class BF
1 Applied Realized Loss Amount Realized Loss Amount over (ii) the sum Applied Realized Loss Amount
over (ii) the sum of all of all distributions in reduction of over (ii) the sum of all
distributions in reduction of the the Class MF-2 Applied Realized Loss distributions in reduction of
Class MF-1 Applied Realized Loss Amount on all previous Distribution the Class BF Applied Realized
Amount on all previous Dates. Loss Amount on all previous
Distribution Dates. Distribution Dates.
"Group II Certificates":
"Class MV-1 Applied Realized Loss Amount:: As to
any Distribution Date, the sum of the Realized Losses
with respect to Group II which have been applied in
reduction of the Certificate Principal Balance of the
Class MV-1 Certificates pursuant to Section 3.02(i)
hereof.
"Class AV-1 Certificate": Any Certificate designated "Class MV-1 Certificate": Any Certificate
as a "Class AV-1 Certificate" on the face thereof, in designated as a "Class MV-1 Certificate" on the face
the form of Exhibit AV-1 hereto representing the thereof, in the form of Exhibit MV-1 hereto
right to distributions as set forth herein. representing the right to distributions as set forth
herein.
"Class AV-1 Certificate Principal Balance": The "Class MV-1 Certificate Principal Balance": The
Certificate Principal Balance of the Class AV-1 Certificate Principal Balance of the Class MV-1
Certificates. Certificates less any Class MV-1 Applied Realized
Loss Amount.
"Class AV-1 Certificates Carryover": If on any "Class MV-1 Certificates Carryover": If on any
Distribution Date the Class AV-1 Pass-Through Rate is Distribution Date the Class MV-1 Pass-Through Rate is
based upon the Available Funds Cap, the excess of (i) based upon the Available Funds Cap, the excess of (i)
the amount of interest the Class AV-1 Certificates the amount of interest the Class MV-1 Certificates
would be entitled to receive on such Distribution would be entitled to receive on such Distribution
Date had the Class AV-1 Pass-Through Rate not been Date had the Class MV-1 Pass-Through Rate not been
calculated based on the Available Funds Cap over (ii) calculated based on the Available Funds Cap over (ii)
the amount of interest such Certificates received on the amount of interest such Certificates received on
such Distribution Date based on the Available Funds such Distribution Date based on the Available Funds
Cap, together with the unpaid portion of any such Cap, together with the unpaid portion of any such
excess from prior Distribution Dates (and interest excess from prior Distribution Dates (and interest
accrued thereon at the then applicable Pass-Through accrued thereon at the then applicable Pass-Through
Rate, without giving effect to the Available Funds Rate, without giving effect to the Available Funds
Cap). Cap).
5
<PAGE>
"Class AV-1 Current Interest": With respect to any "Class MV-1 Current Interest": With respect to any
Distribution Date, the interest accrued on the Class Distribution Date, the interest accrued on the Class
AV-1 Certificate Principal Balance immediately prior MV-1 Certificate Principal Balance immediately prior
to such Distribution Date during the related Accrual to such Distribution Date during the related Accrual
Period at the Class AV-1 Pass Through Rate plus any Period at the Class MV-1 Pass Through Rate plus any
amount previously distributed with respect to amount previously distributed with respect to
interest for Class AV-1 that is recovered during the interest for Class MV-1 that is recovered during the
Accrual Period as a voidable preference by a trustee Accrual Period as a voidable preference by a trustee
in bankruptcy pursuant to a final, nonappealable in bankruptcy pursuant to a final, nonappealable
order; provided, however, Class AV-1 Current Interest order; provided, however, Class MV-1 Current Interest
shall not include any Class AV-1 Certificates shall not include any Class MV-1 Certificates
Carryover. Carryover.
"Class AV-1 Interest Carry Forward Amount": With "Class MV-1 Interest Carry Forward Amount": With
respect to any Distribution Date, the sum of (i) the respect to any Distribution Date, the sum of (i) the
excess of (A) Class AV-1 Current Interest with excess of (A) Class MV-1 Current Interest with
respect to prior Distribution Dates (excluding any respect to prior Distribution Dates (excluding any
Class AV-1 Certificates Carryover) over (B) the Class MV-1 Certificates Carryover) over (B) the
amount actually distributed to Class AV-1 with amount actually distributed to Class MV-1 with
respect to interest (other than in respect of Class respect to interest (other than in respect of Class
AV-1 Certificate Carryover) on such prior MV-1 Certificate Carryover) on such prior
Distribution Dates and (ii) interest on such excess Distribution Dates and (ii) interest on such excess
at the Class AV-1 Pass-Through Rate for the related at the Class MV-1 Pass-Through Rate for the related
Accrual Period. Accrual Period.
"Class AV-1 Pass-Through Rate": With respect to any "Class MV-1 Pass-Through Rate": With respect to any
Distribution Date, the least of (x) One Month LIBOR Distribution Date, the least of (x) One Month LIBOR
plus, in the case of any Distribution Date prior to plus, in the case of any Distribution Date prior to
the Step Up Date, 0.21% per annum, or in the case of the Step Up Date, 0.35% per annum, or in the case of
any Distribution Date that occurs on or after the any Distribution Date that occurs on or after the
Step Up Date, plus 0.42% per annum, (y) the weighted Step Up Date, plus 0.525% per annum, (y) the weighted
average of the Maximum Lifetime Mortgage Interest average of the Maximum Lifetime Mortgage Interest
Rates on the Mortgage Loans in Group II less the Rates on the Mortgage Loans in Group II less the
Group II Servicing Fee Rate and the Group II Master Group II Servicing Fee Rate and the Group II Master
Servicing Fee Rate and (z) the Available Funds Cap Servicing Fee Rate and (z) the Available Funds Cap
for such Distribution Date. for such Distribution Date.
"Class MV-1 Unpaid Realized Loss Amount": As to
any Distribution Date, the excess of (i) Class MV-1
Applied Realized Loss Amount over (ii) the sum of all
distributions in reduction of the Class MV-1 Applied
Realized Loss Amount on all previous Distribution
Dates.
"Class MV-2 Applied Realized Loss Amount: As to any "Class BV Applied Realized Loss Amount: As to any
Distribution Date, the sum of the Realized Losses Distribution Date, the sum of the Realized Losses
with respect to Group II which have been applied in with respect to Group II which have been applied in
reduction of the Certificate Principal Balance of the reduction of the Certificate Principal Balance of the
Class MV-2 Certificates pursuant to Section 3.02(i) Class BV Certificates pursuant to Section 3.02(i)
hereof. hereof.
"Class MV-2 Certificate": Any Certificate designated "Class BV Certificate": Any Certificate designated
as a "Class MV-2 Certificate" on the face thereof, in as a "Class BV Certificate" on the face thereof, in
the form of Exhibit MV-2 hereto representing the the form of Exhibit BV hereto representing the right
right to distributions as set forth herein.. to distributions as set forth herein..
"Class MV-2 Certificate Principal Balance": The "Class BV Certificate Principal Balance": The
Certificate Principal Balance of the Class MV-2 Certificate Principal Balance of the Class BV
Certificates less any Class MV-2 Applied Realized Certificates less any Class BV Applied Realized Loss
Loss Amount. Amount.
"Class MV-2 Certificates Carryover": If on any "Class BV Certificates Carryover": If on any
Distribution Date the Class MV-2 Pass-Through Rate is Distribution Date the Class BV Pass-Through Rate is
based upon the Available Funds Cap, the excess of (i) based upon the Available Funds Cap, the excess of (i)
the amount of interest the Class MV-2 Certificates the amount of interest the Class BV Certificates
would be entitled to receive on such Distribution would be entitled to receive on such Distribution
Date had the Class MV-2 Pass-Through Rate not been Date had the Class BV Pass-Through Rate not been
calculated based on the Available Funds Cap over (ii) calculated based on the Available Funds Cap over (ii)
the amount of interest such Certificates received on the amount of interest such Certificates received on
such Distribution Date based on the Available Funds such Distribution Date based on the Available Funds
Cap, together with the unpaid portion of any such Cap, together with the unpaid portion of any such
excess from prior Distribution Dates (and interest excess from prior Distribution Dates (and interest
accrued thereon at the then applicable Pass-Through accrued thereon at the then applicable Pass-Through
Rate, without giving effect to the Available Funds Rate, without giving effect to the Available Funds
Cap). Cap).
6
<PAGE>
"Class MV-2 Current Interest": With respect to any "Class BV Current Interest": With respect to any
Distribution Date, the interest accrued on the Class Distribution Date, the interest accrued on the Class
MV-2 Certificate Principal Balance immediately prior BV Certificate Principal Balance immediately prior to
to such Distribution Date during the related Accrual such Distribution Date during the related Accrual
Period at the Class MV-2 Pass Through Rate plus any Period at the Class BV Pass Through Rate plus any
amount previously distributed with respect to amount previously distributed with respect to
interest for Class MV-2 that is recovered during the interest for Class BV that is recovered during the
Accrual Period as a voidable preference by a trustee Accrual Period as a voidable preference by a trustee
in bankruptcy pursuant to a final, nonappealable in bankruptcy pursuant to a final, nonappealable
order; provided, however, Class MV-2 Current Interest order; provided, however, Class BV Current Interest
shall not include any Class MV-2 Certificates shall not include any Class BV Certificates
Carryover. Carryover.
"Class MV-2 Interest Carry Forward Amount": With "Class BV Interest Carry Forward Amount": With
respect to each Distribution Date, the sum of (i) the respect to each Distribution Date, the sum of (i) the
excess of (A) Class MV-2 Current Interest with excess of (A) Class BV Current Interest with respect
respect to prior Distribution Dates (excluding any to prior Distribution Dates (excluding any Class BV
Class MV-2 Certificates Carryover) over (B) the Certificates Carryover) over (B) the amount actually
amount actually distributed to Class MV-2 with distributed to Class BV with respect to interest
respect to interest (other than in respect of Class (other than in respect of Class BV Certificate
MV-2 Certificate Carryover) on such prior Carryover) on such prior Distribution Dates and (ii)
Distribution Dates and (ii) interest on such excess interest on such excess at the Class BV Pass-Through
at the Class MV-2 Pass-Through Rate for the related Rate for the related Accrual Period.
Accrual Period.
"Class MV-2 Pass-Through Rate": With respect to any "Class BV Pass-Through Rate": With respect to any
Distribution Date, the least of (x) One Month LIBOR Distribution Date, the least of (x) One Month LIBOR
plus, in the case of any Distribution Date prior to plus, in the case of any Distribution Date prior to
the Step Up Date, 0.56% per annum, or in the case of the Step Up Date, 0.97% per annum, or in the case of
any Distribution Date that occurs on or after the any Distribution Date that occurs on or after the
Step Up Date, plus 0.84% per annum, (y) the weighted Step Up Date, plus 1.455% per annum, (y) the weighted
average of the Maximum Lifetime Mortgage Interest average of the Maximum Lifetime Mortgage Interest
Rates on the Mortgage Loans in Group II less the Rates on the Mortgage Loans in Group II less the
Group II Servicing Fee Rate and the Group II Master Group II Servicing Fee Rate and the Group II Master
Servicing Fee Rate and (z) the Available Funds Cap Servicing Fee Rate and (z) the Available Funds Cap
for such Distribution Date. for such Distribution Date.
"Class MV-2 Unpaid Realized Loss Amount": As to any "Class BV Unpaid Realized Loss Amount": As to any
Distribution Date, the excess of (i) Class MV-2 Distribution Date, the excess of (i) Class BV Applied
Applied Realized Loss Amount over (ii) the sum of all Realized Loss Amount over (ii) the sum of all
distributions in reduction of the Class MV-2 Applied distributions in reduction of the Class BV Applied
Realized Loss Amount on all previous Distribution Realized Loss Amount on all previous Distribution
Dates. Dates.
</TABLE>
"Class C Certificate": Any of the Certificates designated as a "Class C
Certificate" on the face thereof in the form of Exhibit C hereto representing
the right to distributions as set forth herein.
"Class C Distribution Amount": With respect to any Distribution Date,
one-twelfth of the sum of:
(a) the product of the AF-1 Balance and the excess of the Group I Net
Rate over the Class AF-1 Pass-Through Rate;
(b) the product of the AF-2 Balance and the excess of the Group I Net
Rate over the Class AF-2 Pass-Through Rate;
(c) the product of the AF-3 Balance and the excess of the Group I Net
Rate over the Class AF-3 Pass-Through Rate;
(d) the product of the AF-4 Balance and the excess of the Group I Net
Rate over the Class AF-4 Pass-Through Rate;
(e) the product of the AF-5 Balance and the excess of the Group I Net
Rate over the Class AF-5 Pass-Through Rate;
(f) the product of the AF-6 Balance and the excess of the Group I Net
Rate over the Class AF-6 Pass-Through Rate;
(g) the product of the AF-7 Balance and the excess of the Group I Net
Rate over the Class AF-7 Pass-Through Rate;
(h) the product of the MF-1 Balance and the excess of the Group I Net
Rate over the Class MF-1 Pass-Through Rate;
(i) the product of the MF-2 Balance and the excess of the Group I Net
Rate over the Class MF-2 Pass-Through Rate;
7
<PAGE>
(j) the product of the BF Balance and the excess of the Group I Net
Rate over the Class BF Pass-Through Rate; and
(k) any excess of the amount specified pursuant to clauses (a) through
(j) above for prior Distribution Dates over the amount actually distributed
pursuant to such clauses on prior Distribution Dates.
"Class R Certificate": Any of the Certificates designated as a "Class R
Certificate" on the face thereof, in the form of Exhibit R hereto and evidencing
an interest designated as the "residual interest" in the Pooling and Issuing
REMICs for purposes of the REMIC Provisions.
"Closing Date": June 24, 1997.
"Current Interest": As to any Class, the definition therefor having the
corresponding designation as such Class.
"Custodian": Texas Commerce Bank National Association, a national
banking association, and its successors and assigns in such capacity.
"Cut-Off Date": As of the close of business on June 1, 1997.
"Delinquent": A Mortgage Loan is "Delinquent" if any payment due
thereon is not made by the close of business on the last day of the Prepayment
Period immediately following the day such payment is scheduled to be due. A
Mortgage Loan is "30 days Delinquent" if such payment has not been received by
the close of business on the last day of the Prepayment Period of the month
immediately succeeding the month in which such payment was due. Similarly for
"60 days Delinquent," "90 days Delinquent" and so on.
"Distribution Account": The account or accounts created and maintained
for the Trust pursuant to Section 3.01 hereof.
"Distribution Amount": As to each Distribution Date and Class of
Certificates, the aggregate amount distributed to such Class on such date
pursuant to Section 3.02 hereof.
"Distribution Date": The 25th day of each month, or the next Business
Day if such 25th day is not a Business Day, commencing July 25, 1997.
"Fitch": Fitch Investors Service, L.P., and its successors (One State
Street Plaza, 33rd Floor, New York, New York 10004).
Group Definitions:
<TABLE>
<S> <C>
"Group I": The pool of Mortgage Loans identified in "Group II": The pool of Mortgage Loans identified
the related Schedules of Mortgage Loans as having in the related Schedules of Mortgage Loans as having
been assigned to Group I, including any Group I been assigned to Group II, including any Group II
Qualified Substitute Mortgage Loans delivered in Qualified Substitute Mortgage Loans delivered in
replacement thereof. replacement thereof.
"Group I Certificate": Any of the Class AF-1, Class "Group II Certificate": Any of the Class AV-1,
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MV-1, Class MV-2 and Class BV Certificates.
Class AF-7, Class MF-1, Class MF-2 and Class BF
Certificates.
"Group I Certificate Principal Balance": The sum of "Group II Certificate Principal Balance": The sum
the Class AF-1, Class AF-2, Class AF-3, Class AF-4, of the Class AV-1, Class MV-1, Class MV-2 and Class
Class AF-5, Class AF-6, Class AF-7, Class MF-1, Class BV Certificate Principal Balances.
MF-2 and Class BF Certificate Principal Balances.
"Group I Class A Certificate Principal Balance": The "Group II Class A Certificate Principal Balance":
sum of the Class AF-1, Class AF-2, Class AF-3, Class The Class AV-1 Certificate Principal Balance.
AF-4, Class AF-5, Class AF-6 and Class AF-7
Certificate Principal Balances.
8
<PAGE>
"Group I Class A Principal Distribution Amount": With "Group II Class A Principal Distribution Amount":
respect to any Distribution Date before the Group I With respect to any Distribution Date before the
Stepdown Date or as to which a Group I Trigger Event Group II Stepdown Date or as to which a Group II
has occurred, 100% of the Group I Principal Trigger Event has occurred, 100% of the Group II
Distribution Amount for such Distribution Date and Principal Distribution Amount for such Distribution
with respect to any Distribution Date on or after the Date and with respect to any Distribution Date on or
Stepdown Date and as to which a Group I Trigger Event after the Stepdown Date and as to which a Group II
has not occurred, the excess of (A) the Group I Class Trigger Event has not occurred, the excess of (A) the
A Certificate Principal Balance immediately prior to Group II Class A Certificate Principal Balance
such Distribution Date over (B) the lesser of (I) immediately prior to such Distribution Date over (B)
75.40% of the Schedule Principal Balances of Group I the lesser of (I) 65.80% of the Schedule Principal
on the preceding Due Date and (II) the Scheduled Balances of Group II on the preceding Due Date and
Principal Balances of Group I on the preceding Due (II) the Scheduled Principal Balances of Group II on
Date less $597,260. the preceding Due Date less $1,737,045.
"Group I Class B Principal Distribution Amount": With "Group II Class B Principal Distribution Amount":
respect to any Distribution Date on and after the With respect to any Distribution Date on and after
Group I Stepdown Date and as long as a Group I the Group II Stepdown Date and as long as a Group II
Trigger Event is not in effect (subject to the Trigger Event is not in effect (subject to the
proviso set forth in Section 3.02(c) hereof), the proviso set forth in Section 3.02(d) hereof), the
excess of (i) the sum of (A) the Group I Class A excess of (i) the sum of (A) the Group II Class A
Certificate Principal Balance, (B) the Class MF-1 Certificate Principal Balance, (B) the Class MV-1
Certificate Principal Balance, (C) the Class MF-2 Certificate Principal Balance, (C) the Class MV-2
Certificate Principal Balance and (D) the Class BF Certificate Principal Balance and (D) the Class BV
Certificate Principal Balance immediately prior to Certificate Principal Balance immediately prior to
such Distribution Date over (ii) the lesser of (A) such Distribution Date over (ii) the lesser of (A)
97% of the Scheduled Principal Balances of Group I on 96.80% of the Scheduled Principal Balances of the
the preceding Due Date and (B) the Scheduled Group II on the preceding Due Date and (B) the
Principal Balances of Group I on the preceding Due Scheduled Principal Balances of Group II on the
Date less $597,260. preceding Due Date less $1,737,045.
"Group I Class MF-1 Principal Distribution Amount": "Group II Class MV-1 Principal Distribution
With respect to any Distribution Date on and after Amount": With respect to any Distribution Date on and
the Group I Stepdown Date and as long as a Group I after the Group II Stepdown Date and as long as a
Trigger Event is not in effect (subject to the Group II Trigger Event is not in effect (subject to
proviso set forth in Section 3.02(c) hereof), the the proviso set forth in Section 3.02(d) hereof), the
excess of (i) the sum of (A) the Group I Class A excess of (i) the sum of (A) the Group II Class A
Certificate Principal Balance and (B) the Class MF-1 Certificate Principal Balance and (B) the Class MV-1
Certificate Principal Balance immediately prior to Certificate Principal Balance immediately prior to
such Distribution Date over (ii) the lesser of (A) such Distribution Date over (ii) the lesser of (A)
78.90% of the aggregate Scheduled Principal Balances 73.80% of the Scheduled Principal Balances of Group
of Group I on the preceding Due Date and (B) the II on the preceding Due Date and (B) the Scheduled
Scheduled Principal Balances of Group I on the Principal Balances of Group II on the preceding Due
preceding Due Date less $597,260. Date less $1,737,045.
9
<PAGE>
"Group I Class MF-2 Principal Distribution Amount": "Group II Class MV-2 Principal Distribution
With respect to any Distribution Date on and after Amount": With respect to any Distribution Date on and
the Group I Stepdown Date and as long as a Group I after the Group II Stepdown Date and as long as a
Trigger Event is not in effect (subject to the Group II Trigger Event is not in effect (subject to
proviso set forth in Section 3.02(c) hereof), the the proviso set forth in Section 3.02(d) hereof), the
excess of (i) the sum of (A) the Group I Class A excess of (i) the sum of (A) the Group II Class A
Certificate Principal Balance, (B) the Class MF-1 Certificate Principal Balance, (B) the Class MV-1
Certificate Principal Balance and (C) the Class MF-2 Certificate Principal Balance and (C) the Class MV-2
Certificate Principal Amount immediately prior to Certificate Principal Amount immediately prior to
such Distribution Date over (ii) the lesser of (A) such Distribution Date over (ii) the lesser of (A)
90.90% of the Scheduled Principal Balances of Group I 89.30% of the Scheduled Principal Balances of Group
on the preceding Due Date and (B) the Scheduled II on the preceding Due Date and (B) the Scheduled
Principal Balances of Group I on the preceding Due Principal Balances of Group II on the preceding Due
Date less $597,260. Date less $1,737,045.
"Group I Extra Principal Distribution": With respect "Group II Extra Principal Distribution": With
to any Distribution Date, to the extent of Group I respect to any Distribution Date, to the extent of
Interest Funds pursuant to Section 3.02(a)(v) and Group II Interest Funds pursuant to Section
Group II Interest Funds available for the purpose 3.02(b)(v) and Group I Interest Funds available for
pursuant to Section 3.02(f)(viii) hereof, (i) prior the purpose pursuant to Section 3.02(e)(viii) hereof,
to the Group I Stepdown Date, the excess of (A) the (i) prior to the Group II Stepdown Date, the excess
sum of (I) the Group I Certificate Principal Balance of (A) the sum of (I) the Group II Certificate
and (II) $1,791,780 over (B) the Scheduled Principal Principal Balance and (II) $5,558,544 over (B) the
Balances of Group I and (ii) on and after the Group I Scheduled Principal Balances of Group II and (ii) on
Stepdown Date, the excess of (A) the sum of (I) the and after the Group II Stepdown Date, the excess of
Group I Certificate Principal Balance and (II) the (A) the sum of (I) the Group II Certificate Principal
greater of (x) 3.00% of the Scheduled Principal Balance and (II) the greater of (x) 3.20% of the
Balances of Group I and (y) $597,260 over (B) the Scheduled Principal Balances of Group II and (y)
Scheduled Principal Balances of Group I. $1,737,045 over (B) the Scheduled Principal Balances
of Group II.
"Group I Interest Funds": With respect to Group I "Group II Interest Funds": With respect to Group
and any Master Servicer Remittance Date, to the II and any Master Servicer Remittance Date, to the
extent actually deposited in the Master Servicer extent actually deposited in the Master Servicer
Custodial Account, the sum, without duplication, of Custodial Account, the sum, without duplication, of
(i) all scheduled interest collected during the (i) all scheduled interest collected during the
related Due Period with respect to Group I less the related Due Period with respect to Group II less the
Group I Servicing Fee and the Group I Master Group II Servicing Fee and the Group II Master
Servicing Fee, (ii) all Advances relating to interest Servicing Fee, (ii) all Advances relating to interest
with respect to Group I, (iii) all Month End Interest with respect to Group II, (iii) all Month End
with respect to Group I and (iv) Liquidation Proceeds Interest with respect to Group II and (iv)
with respect to Group I (to the extent such Liquidation Proceeds with respect to Group II (to the
Liquidation Proceeds relate to interest) less all extent such Liquidation Proceeds relate to interest)
Non-Recoverable Advances relating to interest and less all Non-Recoverable Advances relating to
expenses pursuant to Section 6.03 of the Standard interest and expenses pursuant to Section 6.03 of the
Terms. Standard Terms.
"Group I Master Servicing Fee": With respect to each "Group II Master Servicing Fee": With respect to
Master Servicer Remittance Date, an amount payable each Master Servicer Remittance Date, an amount
(or allocable) to the Master Servicer equal to the payable (or allocable) to the Master Servicer equal
product of one-twelfth of the Group I Master to the product of one-twelfth of the Group II Master
Servicing Fee Rate and the aggregate Scheduled Servicing Fee Rate and the aggregate Scheduled
Principal Balance of Group I on the first day of the Principal Balance of Group II on the first day of the
Due Period preceding such Master Servicer Remittance Due Period preceding such Master Servicer Remittance
Date. Date.
"Group I Master Servicing Fee Rate": 0.03% per "Group II Master Servicing Fee Rate": 0.03% per
annum. annum.
10
<PAGE>
"Group I Net Rate": The weighted average Net Rate "Group II Net Rate": The weighted average Net Rate
for Group I. for Group II.
"Group I Principal Distribution Amount": With "Group II Principal Distribution Amount": With
respect to any Distribution Date, the sum of (i) the respect to any Distribution Date, the sum of (i) the
Group I Principal Funds and (ii) the Group I Extra Group II Principal Funds and (ii) the Group II Extra
Principal Distribution Amount. Principal Distribution Amount.
"Group I Principal Funds": With respect to Group I "Group II Principal Funds": With respect to Group
and any Master Servicer Remittance Date, to the II and any Master Servicer Remittance Date, to the
extent actually deposited in the Master Servicer extent actually deposited in the Master Servicer
Custodial Account, the sum, without duplication of Custodial Account, the sum, without duplication of
(i) all scheduled principal with respect to Group I (i) all scheduled principal with respect to Group II
collected by the Servicers during the related Due collected by the Servicers during the related Due
Period or advanced on or before such Master Servicer Period or advanced on or before such Master Servicer
Remittance Date, (ii) prepayments with respect to Remittance Date, (ii) prepayments with respect to
Group I collected by the Servicers in the related Group II collected by the Servicers in the related
Prepayment Period, (iii) the Scheduled Principal Prepayment Period, (iii) the Scheduled Principal
Balance of each Mortgage Loan in Group I repurchased Balance of each Mortgage Loan in Group II repurchased
by the Depositor, (iv) any Substitution Shortfall by the Depositor, (iv) any Substitution Shortfall
with respect to Group I and (v) all Liquidation with respect to Group II and (v) all Liquidation
Proceeds with respect to Group I collected by the Proceeds with respect to Group II collected by the
Servicer during the related Due Period (to the extent Servicer during the related Due Period (to the extent
such Liquidation Proceeds related to principal) less such Liquidation Proceeds related to principal) less
all non-recoverable Advances relating to principal all non-recoverable Advances relating to principal
with respect to Group I reimbursed during the related with respect to Group II reimbursed during the
Due Period. related Due Period.
"Group I Servicing Fee": With respect to each "Group II Servicing Fee": With respect to each
Mortgage Loan in Group I and each Remittance Date, Mortgage Loan in Group II and each Remittance Date,
the product of (x) one-twelfth of the Servicing Fee the product of (x) one-twelfth of the Servicing Fee
Rate and (y) aggregate Scheduled Principal Balance of Rate and (y) aggregate Scheduled Principal Balance of
such Mortgage Loan as of the opening of business on such Mortgage Loan as of the opening of business on
the first day of the Due Period preceding such the first day of the Due Period preceding such
Remittance Date. Remittance Date.
"Group I Servicing Fee Rate": With respect to each "Group II Servicing Fee Rate": With respect to each
Mortgage Loan in Group I, the fixed per annum rate Mortgage Loan in Group II, the fixed per annum rate
payable to the applicable Servicer of that Mortgage payable to the applicable Servicer of that Mortgage
Loan as set out on Schedule IA to this Agreement. Loan as set out on Schedule IB to this Agreement.
"Group I Stepdown Date": With respect to Group I, the "Group II Stepdown Date": With respect to Group II,
earlier to occur of (i) the later to occur of (A) the the earlier to occur of (i) the later to occur of (A)
Distribution Date in July 2000 and (B) the first the Distribution Date in July 2000 and (B) the first
Distribution Date on which the Group I Class A Distribution Date on which the Group II Class A
Certificate Principal Balance immediately prior to Certificate Principal Balance immediately prior to
such Distribution Date (less the Group I Principal such Distribution Date (less the Group II Principal
Funds for such Distribution Date) is less than or Funds for such Distribution Date) is less than or
equal to 75.40% of the Scheduled Principal Balances equal to 65.80% of the Scheduled Principal Balances
of Group I and (ii) the Distribution Date on which of Group II and (ii) the Distribution Date on which
the Group I Class A Certificate Principal Balance has the Group II Class A Certificate Principal Balance
been reduced to zero. has been reduced to zero.
"Group I Subordinated Certificates": The Class MF-1, "Group II Subordinated Certificates": The Class
MF-2 and Class BF Certificates. MV-1, MV-2 and Class BV Certificates.
11
<PAGE>
"Group I Subordinated Trigger Event": With respect "Group II Subordinated Trigger Event": With
to Group I, any Distribution Date after the Group I respect to Group II, any Distribution Date after the
Stepdown Date on which: Group II Stepdown Date on which:
(a) Realized Losses since the Cut-Off Date with (a) Realized Losses since the Cut-Off Date with
respect to the Mortgage Loans in Group I as a respect to the Mortgage Loans in Group II as a
percentage of the initial Scheduled Principal Balance percentage of the initial Scheduled Principal Balance
of Group I exceed the percentage set out below with of Group II exceed the percentage set out below with
respect to such Distribution Date: respect to such Distribution Date:
Distribution Date (inclusive) Distribution Date (inclusive)
August 1999 - July 2000 1.20% August 1999 - July 2000 1.60%
August 2000 - July 2001 1.90 August 2000 - July 2001 2.70
August 2001 - July 2002 2.40 August 2001 - July 2002 3.40
August 2002 - July 2003 2.80 August 2002 - July 2003 3.80
August 2003 - July 2004 3.00 August 2003 - July 2004 4.10
August 2004 and thereafter 3.10 August 2004 and thereafter 4.30
and and
(b) the Scheduled Principal Balance of the (b) the Scheduled Principal Balance of the
Mortgage Loans in Group I that, as of such Mortgage Loans in Group II that, as of such
Distribution Date, are 60 or more days Delinquent as Distribution Date, are 60 or more days Delinquent as
a percentage of the Scheduled Principal Balance of a percentage of the Scheduled Principal Balance of
the Mortgage Loans in Group I exceeds the percentage the Mortgage Loans in Group II exceeds the percentage
set out below with respect to such Distribution set out below with respect to such Distribution Date:
Date:
Distribution Date (inclusive)
Distribution Date (inclusive)
August 1999 - July 2000 3.20%
August 1999 - July 2000 3.0% August 2000 - July 2001 3.20%
August 2000 - July 2001 3.0% August 2001 - July 2002 4.26%
August 2001 - July 2002 4.5% August 2002 - July 2003 4.26%
August 2002 - July 2003 4.5% August 2003 - July 2004 6.40%
August 2003 - July 2004 6.0% August 2004 and thereafter 6.40%
August 2004 and thereafter 6.0%
"Group I Trigger Event": With respect to Group I and "Group II Trigger Event": With respect to Group II
any Distribution Date after the Group I Stepdown and any Distribution Date after the Group II Stepdown
Date, a Group I Trigger Event exists if two times the Date, a Group II Trigger Event exists if 2.5 times
quotient of (i) the Scheduled Principal Balances of the quotient of (i) the Scheduled Principal Balances
all 60 or more days Delinquent Mortgage Loans in of all 60 or more days Delinquent Mortgage Loans in
Group I and (ii) the Scheduled Principal Balances of Group II and (ii) the Scheduled Principal Balances of
Group I as of the preceding Master Servicer Group II as of the preceding Master Servicer
Remittance Date equals or exceeds 24.60%. Remittance Date equals or exceeds 34.20%.
</TABLE>
"Interest Carry Forward Amount": As to any Class, the definition
therefor having the corresponding designation as such Class.
"Interest Determination Date": With respect to the first Accrual Period
for the Group II Certificates, June 20, 1997, and with respect to any subsequent
Accrual Period for the Group II Certificates, the second London Business Day
preceding such Accrual Period.
"Interest Fund": The Fund created and maintained with the Paying
Agent by the Trust pursuant to Section 4.03.
12
<PAGE>
"London Business Day": A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.
"Master Servicer": Texas Commerce Bank National Association, a national
banking association, and its successors, in its capacity as administrative agent
of the Trust.
"Master Servicer Remittance Date": The Business Day preceding each
Distribution Date.
"Master Servicer Reporting Date": The opening of business on the third
Business Day preceding each Distribution Date.
"Master Servicing Fee": As applicable, the Group I Master
Servicing Fee or the Group II Master Servicing Fee.
"Meritech": Meritech Mortgage Services, Inc., a Texas corporation.
"Moody's": Moody's Investors Service, Inc., and its successors (99
Church Street, New York, New York 10007).
"Mortgage Loan Group": Either Group I or Group II.
"Mortgage Loans": The mortgage loans listed on Schedule I.
"Net Rate": As to each Mortgage Loan and Distribution Date, the related
Mortgage Interest Rate less the sum of the Group I or Group II Servicing Fee
Rate and the Group I or Group II Master Servicing Fee Rate, in each case, as
applicable.
"Notice Address": For purposes of Section 11.05 of the Standard Terms,
the addresses of the Depositor, the Master Servicer and the Trustee are as
follows:
(i) If to the Depositor:
Saxon Asset Securities Company.
4880 Cox Road
Glen Allen, Virginia 23060
(ii) If to the Master Servicer:
Texas Commerce Bank National Association
601 Travis, 8th Floor
Houston Texas 77002
(iii) If to the Trustee:
Citibank, N.A.
120 Wall Street, 13th Floor
New York, New York 10043
Attention: Global Trust Services - Saxon 1997-2
"One Month LIBOR": As of any Interest Determination Date, the rate for
deposits in United States dollars for one-month U.S. dollar deposits which
appears in the Telerate Page 3750, as of 11:00 a.m., (London time) on such
Interest Determination Date. If such rate does not appear on Telerate Page 3750,
the rate for that day will be determined on the basis of the rates at which
deposits in United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the London
interbank market for a period equal to the relevant Accrual Period (commencing
on the first day of such Accrual Period). The Paying Agent will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that day
will be the arithmetic-mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that day will be the arithmetic-mean of the
rates quoted by major banks in New York City, selected by the Paying Agent, at
approximately 11:00 a.m., New York City time, on that day for loans in United
States dollars to leading European banks for a period equal to the relevant
Accrual Period (commencing on the first day of such Accrual Period). The Paying
Agent shall review Telerate Page 3750 at the required time, make the required
requests to the principal offices of the Reference Banks and selections of major
banks in New York City and shall determine the rate which constitutes One Month
LIBOR for each Interest Determination Date. The Trustee shall be entitled for a
determination of One Month LIBOR to rely on the Paying Agent.
13
<PAGE>
"Paying Agent": Texas Commerce Bank National Association, a national
banking association, and its successors and assigns in such capacity.
"Private Certificate": Any of the Class C Certificates and the Class R
Certificates.
"Private Subordinated Certificate": Any of the Class C Certificates
and the Class R Certificates.
"Public Subordinated Certificate": Any of the Group I
Subordinated Certificates or the Group II Subordinated Certificates.
"Rating Agency": Each of Moody's and Fitch (or, if any such agency or a
successor is no longer in existence, such other nationally recognized
statistical rating agency, or other comparable Person, designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Master Servicer).
"Reference Banks" Leading banks selected by the Paying Agent and
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market.
"Regular Certificates": Any of the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5, Class AF-6, Class AF-7, Class MF-1, Class MF-2, Class
BF, Class AV-1, Class MV-1, Class MV-2, Class BV and Class C Certificates which
represent the "Regular Interests" in the Issuing REMIC for purposes of the REMIC
Provisions.
"Remittance Date": With respect to each Servicing Agreement, the date
so specified therein which date shall in no case be later than the 21st of each
month, or if the 21st of any month does not fall on a Business Day, then the
Business Day immediately preceding the 21st.
"Residual Certificates": The Class R Certificates, which represent the
"residual interest" in the Pooling and Issuing REMICs for purposes of the REMIC
Provisions.
"Sales Agreement": The Sales Agreement dated June 16, 1997, between the
Depositor and SMI regarding the sale of the Mortgage Loans.
"Servicing Agreement": The Servicing Agreements listed on Schedule II
hereto each of which shall be deemed to be a "Servicing Agreement" for purposes
of the Standard Terms.
"Servicing Fee Rate": With respect to each Mortgage Loan, the
Servicing Rate specified on Schedule I.
"Securities Act": The Securities Act of 1933, as amended.
"Servicer": Meritech or Ameriquest Mortgage Company and their
permitted successors and assigns.
"State": New York.
"Step Up Date": If the auction provided for in Section 5.08 hereof has
not occurred, the first Distribution Date that is 90 days after the Auction Sale
Bid Date.
"Subaccount Definitions":
"Balance": With respect to each Subaccount, on any
Distribution date, the balance, if any, of such Subaccount immediately
prior to such Distribution Date (or, in the case of the first
Distribution Date, an amount equal to the initial balance of such
Subaccount as of the Closing Date) less the amounts to be applied on
such Distribution Date to reduce the balance of such Subaccount.
"Subaccounts": Any one of the Subaccounts created pursuant to
Section 5.05(a)(i) hereof.
Group I:
<TABLE>
<S> <C>
"AF-1 Balance" : The Balance of "AF-2 Balance" : The Balance of "AF-3 Balance" : The Balance of
the Subaccount AF-1. Subaccount AF-2. Subaccount AF-3.
"AF-1 Monthly Interest Amount": "AF-2 Monthly Interest Amount": "AF-3 Monthly Interest Amount":
With respect to any Distribution With respect to any Distribution With respect to any Distribution
Date, the interest accrued on the Date, the interest accrued on the Date, the interest accrued on the
AF-1 Balance during the Accrual AF-2 Balance during the Accrual AF-3 Balance during the Accrual
Period for the Class AF-1 Period for the Class AF-2 Period for the Class AF-3
Certificates for that Distribution Certificates for that Distribution Certificates for that Distribution
Date at the Group I Net Rate. Date at the Group I Net Rate. Date at the Group I Net Rate.
14
<PAGE>
"Subaccount AF-1": The Subaccount "Subaccount AF-2": The Subaccount "Subaccount AF-3": The
by that name created pursuant to by that name created pursuant to Subaccount by that name created
Section 5.05(a)(i) hereof. Section 5.05(a)(i) hereof. pursuant to Section 5.05(a)(i)
hereof.
"AF-4 Balance" : The Balance of "AF-5 Balance" : The Balance of "AF-6 Balance" : The Balance of
the Subaccount AF-4. Subaccount AF-5. Subaccount AF-6.
"AF-4 Monthly Interest Amount": "AF-5 Monthly Interest Amount": "AF-6 Monthly Interest Amount":
With respect to any Distribution With respect to any Distribution With respect to any Distribution
Date, the interest accrued on the Date, the interest accrued on the Date, the interest accrued on the
AF-4 Balance during the Accrual AF-5 Balance during the Accrual AF-6 Balance during the Accrual
Period for the Class AF-4 Period for the Class AF-5 Period for the Class AF-6
Certificates for that Distribution Certificates for that Distribution Certificates for that Distribution
Date at the Group I Net Rate. Date at the Group I Net Rate. Date at the Group I Net Rate.
"Subaccount AF-4": The Subaccount "Subaccount AF-5": The Subaccount "Subaccount AF-6": The Subaccount
by that name created pursuant to by that name created pursuant to by that name created pursuant to
Section 5.05(a)(i) hereof. Section 5.05(a)(i) hereof. Section 5.05(a)(i) hereof.
"AF-7 Balance" : The Balance of
Subaccount AF-7.
"AF-7 Monthly Interest Amount":
With respect to any Distribution
Date, the interest accrued on the
AF-7 Balance during the Accrual
Period for the Class AF-7
Certificates for that Distribution
Date at the Group I Net Rate.
"Subaccount AF-7": The Subaccount
by that name created pursuant to
Section 5.05(a)(i) hereof.
"MF-1 Balance" : The Balance of "MF-2 Balance" : The Balance of "BF Balance" : The Balance of
Subaccount MF-1. Subaccount MF-2. Subaccount BF.
"MF-1 Monthly Interest Amount": "MF-2 Monthly Interest Amount": "BF Monthly Interest Amount":
With respect to any Distribution With respect to any Distribution With respect to any Distribution
Date, the interest accrued on the Date, the interest accrued on the Date, the interest accrued on the
MF-1 Balance during the Accrual MF-2 Balance during the Accrual BF Balance during the Accrual
Period for the Class MF-1 Period for the Class MF-2 Period for the Class BF
Certificates for that Distribution Certificates for that Distribution Certificates for that Distribution
Date at the Group I Net Rate. Date at the Group I Net Rate. Date at the Group I Net Rate.
"Subaccount MF-1": The Subaccount "Subaccount MF-2": The Subaccount "Subaccount BF": The Subaccount
by that name created pursuant to by that name created pursuant to by that name created pursuant to
Section 5.05(a)(i) hereof. Section 5.05(a)(i) hereof. Section 5.05(a)(i) hereof.
Group II:
"AV-1 Balance" : The Balance of the Subaccount AV-1. "MV-1 Balance" : The Balance of Subaccount MV-2.
"AV-1 Monthly Interest Amount": With respect to any "MV-1 Monthly Interest Amount": With respect to any
Distribution Date, the interest accrued on the AV-1 Distribution Date, the interest accrued on the MV-1
Balance during the Accrual Period for the Class AV-1 Balance during the Accrual Period for the Class MV-1
Certificates for that Distribution Date at the Group Certificates for that Distribution Date at the Group
II Net Rate. II Net Rate.
"Subaccount AV-1": The Subaccount by that name "Subaccount MV-1": The Subaccount by that name
created pursuant to Section 5.05(a)(i) hereof. created pursuant to Section 5.05(a)(i) hereof.
"MV-2 Balance" : The Balance of Subaccount MV-2. "BV Balance": The Balance of Subaccount BV.
15
<PAGE>
"MV-2 Monthly Interest Amounts": With respect to any "BV Monthly Interest Amounts": With respect to any
Distribution Date, the interest accrued on the MV-2 Distribution Date, the interest accrued on the BV
Balance during the Accrual Period for the Class MV-2 Balance during the Accrual Period for the Class BV
Certificates for that Distribution Date at the Group Certificates for that Distribution Date at the Group
II Net Rate. II Net Rate.
"Subaccount MV-2": The Subaccount by that name "Subaccount BV": The Subaccount by that name
created pursuant to Section 5.05(a)(i) hereof. created pursuant to Section 5.05)a)(i) hereof.
</TABLE>
"Tax Matters Person": Texas Commerce Bank National Association, a
national banking association, and its successors and assigns in such capacity.
"Telerate Page 3750" the display page currently so designated on the
Dow Jones Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Trust Estate": As defined in Section 2.01 hereof.
"Trustee": Citibank, N.A., a national banking association, its
successor in interest or any successor trustee appointed in accordance with the
Trust Agreement.
"Trustee Fee": The fee payable monthly to the Trustee by the Master
Servicer.
"Underwriters": Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Prudential Securities Incorporated., Lehman Brothers Inc. and
PaineWebber Inc.
"Underwriting Agreement": The Underwriting Agreement dated June 16,
1997, between the Depositor and SMI and the Underwriters.
ARTICLE II
FORMATION OF TRUST; CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Conveyance of Mortgage Loansage Loans
To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, the distribution of all other sums
distributable under the Trust Agreement with respect to the Certificates and the
performance of the covenants contained in the Trust Agreement, the Depositor
hereby bargains, sells, conveys, assigns and transfers to the Trustee, in trust,
without recourse and for the exclusive benefit of the Certificateholders all the
Depositor's right, title and interest in and to any and all benefits accruing to
the Depositor from: (i) the Mortgage Loans, which the Depositor is causing to be
delivered to the Trustee (or the Custodian) herewith (and all Qualified
Substitute Mortgage Loans substituted therefor as provided by Section 2.03 of
the Standard Terms and pursuant to the terms of the Sales Agreement), together
in each case with the related Trustee Mortgage Loan Files and the Depositor's
interest in any Collateral that secured a Mortgage Loan but that is acquired by
foreclosure or deed-in-lieu of foreclosure after the Closing Date, and all
Monthly Payments due after the Cut-Off Date and all curtailments or other
principal prepayments received with respect to the Mortgage Loans paid by the
Borrower after the Cut-Off Date (except for any prepayments received after the
Cut-Off Date but reflected in the aggregate Scheduled Principal Balance of the
Mortgage Loans as of the Cut-Off Date) and proceeds of the conversion, voluntary
or involuntary, of the foregoing; (ii) each Servicing Agreement; (iii) the Sales
Agreement, except that the Depositor does not assign to the Trustee any of its
rights under Sections 9 and 12 of the Sales Agreement; (iv) the Asset Proceeds
Account and the Distribution Account, whether in the form of cash, instruments,
securities or other properties; and (v) all proceeds of any of the foregoing
(including, but not limited to, all proceeds of any mortgage insurance, hazard
insurance, or title insurance policy relating to the Mortgage Loans, cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, rights to payment of any and every kind, and
other forms of obligations and receivables, which at any time constitute all or
part or are included in the proceeds of any of the foregoing) to pay the
Certificates as specified herein (items (i) through (v) above, collectively, the
"Trust Estate").
The Depositor hereby assigns to the Master Servicer all right, title
and interest of the Depositor in and to (i) the Interest Fund and all amounts as
are deposited and maintained therein from time to time pursuant to the Trust
Agreement and (ii) all proceeds of the foregoing of every kind and nature
whatsoever, including, but not limited to, proceeds of proceeds and the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquidated property. The Master Servicer hereby pledges to the Trust and grants
to the Trustee, on behalf of the Certificateholders, a first priority security
interest in and to (i) the Interest Fund and all amounts as are deposited and
maintained therein from time to time pursuant to the Trust Agreement, excluding,
however, any earnings thereon, which are payable to Meritech, and (ii) all
proceeds of the foregoing of every kind and nature whatsoever, including, but
not limited to, proceeds of proceeds and the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquidated property in
trust, subject to the limitation set forth above with respect to earnings, to
have and to hold in trust to secure the Certificates. The Trustee acknowledges
this grant and agrees to hold the pledged property in accordance with the terms
hereof.
16
<PAGE>
The Trustee acknowledges the sales, assignments and pledges created by
the foregoing paragraphs, accepts the trust hereunder in accordance with the
provisions hereof and agrees to perform the duties set forth herein or required
by the Standard Terms to the end that the interests of the Certificateholders
may be adequately and effectively protected in accordance with the terms and
conditions of this Agreement.
By its execution of this Agreement, the Trustee acknowledges and
declares that it holds and will hold or has agreed to hold all documents
delivered to it from time to time with respect to the Mortgage Loans and all
assets included in the Trust Estate in trust for the exclusive use and benefit
of all present and future Certificateholders.
ARTICLE III
REMITTING TO CERTIFICATEHOLDERS
Section 3.01. Subaccount Distributions. On each Distribution Date, the
Trustee (or the Paying Agent on behalf of the Trustee) shall make the following
allocations, disbursements and transfers from the Asset Proceeds Account to the
Distribution Account, which shall be an Eligible Account, in the following order
of priority:
(a) from the Group I Interest Funds to Subaccounts AF-1, AF-2,
AF-3, AF-4, AF-5, AF-6, AF-7, MF-1, MF-2 and BF, pro rata, the
AF-1, AF-2, AF-3, AF-4, AF-5, AF-6, AF-7, MF-1, MF-2 and BF
Monthly Interest Amounts;
(b) from the Group II Interest Funds to Subaccounts AV-1, MV-1,
MV-2 and BV, pro rata, the AV-1, MV-1, MV-2 and BV Monthly
Interest Amounts;
(c) from the Group I Principal Funds:
(A) to Subaccount AF-1 until the AF-1 Balance is
reduced to zero;
(B) to Subaccount AF-2 until the AF-2 Balance is
reduced to zero;
(C) to Subaccount AF-3 until the AF-3 Balance is
reduced to zero;
(D) to Subaccount AF-4 until the AF-4 Balance is
reduced to zero;
(E) to Subaccount AF-5 until the AF-5 Balance is
reduced to zero;
(F) to Subaccount AF-6 until the AF-6 Balance is
reduced to zero;
(G) to Subaccount AF-7 until the AF-7 Balance is
reduced to zero;
(H) to Subaccount MF-1 until the MF-1 Balance is
reduced to zero;
(I) to Subaccount MF-2 until the MF-2 Balance is
reduced to zero; and
(J) to Subaccount BF until the BF Balance is reduced
to zero;
provided, however, that (a) the Group I Principal Funds shall
be applied to reduce Balances in the same order and manner
that the Group I Principal Distribution Amount (excluding the
Group I Extra Principal Distribution Amount) is applied to
reduce Group I Certificate Principal Balance of the Class of
Certificates having the corresponding class designation and
Realized Losses with respect to Group I shall be applied to
reduce Balances first as provided with respect to Class MF-1,
Class MF-2 and Class BF Applied Realized Loss Amounts and
second to Subaccounts AF-7, AF-6, AF-5, AF-4, AF-3, AF-2 and
AF-1 in that order.
(d) from the Group II Principal Funds:
(A) to Subaccount AV-1 until the AV-1 Balance is
reduced to zero;
(B) to Subaccount MV-1 until the MV-1 Balance is
reduced to zero;
17
<PAGE>
(C) to Subaccount MV-2 until the MV-2 Balance is
reduced to zero;
(D) to Subaccount BV until the BV Balance is reduced
to zero;
provided, however, that (a) the Group II Principal Funds shall
be applied to reduce Balances in the same order and manner
that the Group II Principal Distribution Amount (excluding the
Group II Extra Principal Distribution Amount) is applied to
reduce Group II Certificate Principal Balance of the Class of
Certificates having the corresponding class designation and
Realized Losses with respect to Group II shall be applied to
reduce Balances first as provided with respect to Class MV-1,
Class MV-2 and Class BV Applied Realized Loss Amounts and
second to Subaccount AV-1.
Section 3.02. Certificate Distributions (a) On each Distribution Date,
the Trustee (or the Paying Agent on behalf of Trustee) shall make the following
allocations from the Distribution Account of an amount equal to the Group I
Interest Funds in the following order of priority, and each such allocation
shall be made only after all preceding allocations have been made until such
amount shall have been fully allocated for such Distribution Date:
(i) to the Group I Class A Certificates, the Current
Interest and any Interest Carry Forward Amount for
the Group I Class A Certificates; provided, however,
if such amount is not sufficient to make a full
distribution of the Current Interest and any
Interest Carry Forward Amount with respect to all the
Group I Class A Certificates, such amount will be
distributed pro rata among each Class of the
Group I Class A Certificates based on the ratio of
(x) the Current Interest and Interest Carry Forward
Amount for each Class of the Group I Class A
Certificates to (y) the total amount of Current
Interest and any Interest Carry Forward Amount for
the Group I Class A Certificates;
(ii) to the Class MF-1 Certificates, the Class MF-1
Current Interest;
(iii) to the Class MF-2 Certificates, the Class MF-2
Current Interest;
(iv) to the Class BF Certificates, the Class BF Current
Interest; and
(v) any remainder pursuant to Section 3.02(e) hereof.
(b) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of Trustee) shall make the following allocations from the Distribution
Account of an amount equal to the Group II Interest Funds in the following order
of priority, and each such allocation shall be made only after all preceding
allocations shall have been made until such amount shall have been fully
allocated:
(i) to the Group II Class A Certificates, the Current
Interest and any Interest Carry Forward Amount for
the Group II Class A Certificates;
(ii) to the Class MV-1 Certificates, the Class MV-1
Current Interest;
(iii) to the Class MV-2 Certificates, the Class MV-2
Current Interest;
(iv) to the Class BV Certificates, the Class BV Current
Interest; and
(v) any remainder pursuant to Section 3.02(f) hereof.
(c) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of Trustee) shall make the following allocations from the Distribution
Account of an amount equal to the Group I Principal Distribution Amount in the
following order of priority, and each such allocation shall be made only after
all preceding allocations shall have been made until such amount shall have been
fully allocated for such Distribution Date:
(i) to the Group I Class A Certificates, the Group
I Class A Principal Distribution Amount to be
distributed as follows: (x) the Class AF-7
Distribution Amount to the Class AF-7 Certificates;
and (y) the balance of the Group I Class A
Principal Distribution Amount sequentially to the
Class AF-1, Class AF-2, Class AF-3, Class AF-4,
Class AF-5, Class AF-6 and Class AF-7 Certificates
so that no such distribution pursuant to this
clause (y) will made to any such Class until
the Certificate Principal Balances of all Group I
Class A Certificates with a lower denomination shall
have been reduced to zero; provided, however,
that, on any Distribution Date on which the Group I
Class A Certificate Principal Balance is equal to
or greater than the Scheduled Principal Balances
of Group I, the Group I Class A Principal
Distribution Amount will be distributed pro rata
and not sequentially to the Group I Class A
Certificates;
18
<PAGE>
(ii) to the Class MF-1 Certificates, the Group I Class
MF-1 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
(iii) to the Class MF-2 Certificates, the Group I Class
MF-2 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
(iv) to the Class BF Certificates, the Group I Class BF
Principal Distribution Amount, until the Certificate
Principal Balance thereof has been reduced to zero;
(v) any remainder pursuant to Section 3.02(e) hereof.
; provided, however, that, if a Group I Trigger Event is in effect on any
Distribution Date: (i) after the Certificate Principal Balance of the Group I
Class A Certificates has been reduced to zero, the Group I Class MF-1 Principal
Distribution Amount shall equal the Group I Principal Distribution Amount for
such Distribution Date; (ii) after the Certificate Principal Balance of the
Class MF-1 Certificates has been reduced to zero, the Group I Class MF-2
Principal Distribution Amount shall equal the Group I Principal Distribution
Amount for such Distribution Date; and (iii) after the Certificate Principal
Balance of the Class MF-2 Certificates has been reduced to zero, the Group I
Class BF Principal Distribution Amount shall equal the Group I Principal
Distribution Amount.
(d) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of Trustee) shall make the following allocations from the Distribution
Account of an amount equal to the Group II Principal Distribution Amount in the
following order of priority, and each such allocation shall be made only after
all preceding allocations shall have been made until such amount shall have been
fully allocated for such Distribution Date:
(i) to the Group II Class A Certificates, the Group II
Class A Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
(ii) to the Class MV-1 Certificates, the Group II Class
MV-1 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
(iii) to the Class MV-2 Certificates, the Group II Class
MV-2 Principal Distribution Amount, until the
Certificate Principal Balance thereof has been
reduced to zero;
(iv) to the Class BV Certificates, the Group II Class BV
Principal Distribution Amount, until the Certificate
Principal Balance thereof has been reduced to zero;
and
(v) any remainder pursuant to Section 3.02(f) hereof.
; provided, however, that, if a Group II Trigger Event is in effect on any
Distribution Date: (i) after the Certificate Principal Balance of the Group II
Class A Certificates has been reduced to zero, the Group II Class MV-1 Principal
Distribution Amount shall equal the Group II Principal Distribution Amount for
such Distribution Date; (ii) after the Certificate Principal Balance of the
Class MV-1 Certificates has been reduced to zero, the Group II Class MV-2
Principal Distribution Amount shall equal the Group II Principal Distribution
Amount for such Distribution Date; and (iii) after the Certificate Principal
Balance of the Class MV-2 Certificates has been reduced to zero, the Group II
Class BV Principal Distribution Amount shall equal the Group II Principal
Distribution Amount for such Distribution Date.
(e) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of Trustee) shall make the following allocations from the Distribution
Account of the remainders pursuant to Section 3.02(a)(v) and (c)(v) hereof and,
to the extent required to make the allocations set forth below in clauses (i)
through (vii) of this Section 3.02(e), Section 3.02(f)(viii) hereof in the
following order of priority, and each such allocation shall be made only after
all preceding allocations shall have been made until such remainders shall have
been fully allocated:
(i) the Group I Extra Principal Distribution Amount;
(ii) to the Class MF-1 Certificates, the Class MF-1
Interest Carry Forward Amount;
(iii) to the Class MF-1 Certificates, the Class MF-1
Unpaid Realized Loss Amount;
19
<PAGE>
(iv) to the Class MF-2 Certificates, the Class MF-2
Interest Carry Forward Amount;
(v) to the Class MF-2 Certificates, the Class MF-2
Unpaid Realized Loss Amount;
(vi) to the Class BF Certificates, the Class BF Interest
Carry Forward Amount;
(vii) to the Class BF Certificates, the Class BF Unpaid
Realized Loss Amount;
(viii) to the extent required to make the allocations set
forth in clauses (i) through (vii) of Section
3.02(f) hereof, pursuant to Section 3.02(f) hereof;
(ix) if a Group I Subordinated Trigger Event exists, to
the Class BF, Class MF-2 and Class MF-1 Certificates,
in that order (such that no such amounts shall be
distributed to any such Class unless the
Certificate Principal Balance of each such Class
having lower priority has been reduced to zero),
the excess of (x) the Group I Principal Funds for
such Distribution Date over (y) the sum of (A) the
Group I Class A Principal Distribution Amount, (B)
the Group I Class MF-1 Principal Distribution
Amount, (C) the Group I Class MF-2 Principal
Distribution Amount and (D) the Group I Class
BF Principal Distribution Amount in each case for
such Distribution Date; and
(x) the remainder pursuant to Section 3.02(g) hereof.
(f) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of Trustee) shall make the following allocations from the Distribution
Account of the remainders pursuant to Section 3.02(b)(v) and (d)(v) hereof and,
to the extent required to make the allocations set forth below in clauses (i)
through (vii) of this Section 3.02(f), Section 3.02(e)(viii) hereof in the
following order of priority, and each such allocation shall be made only after
all preceding allocations shall have been made until such remainders have been
fully allocated:
(i) the Group II Extra Principal Distribution Amount;
(ii) to the Class MV-1 Certificates, the Class MV-1
Interest Carry Forward Amount;
(iii) to the Class MV-1 Certificates, the Class MV-1
Unpaid Realized Loss Amount;
(iv) to the Class MV-2 Certificates, the Class MV-2
Interest Carry Forward Amount;
(v) to the Class MV-2 Certificates, the Class MV-2
Unpaid Realized Loss Amount;
(vi) to the Class BV Certificates, the Class BV Interest
Carry Forward Amount;
(vii) to the Class BV Certificates, the Class BV Unpaid
Realized Loss Amount;
(viii) to the extent required to make the allocations set
forth in clauses (i) through (vii) of Section
3.02(e) hereof, pursuant to Section 3.02(e) hereof;
(ix) on any Distribution Date on or before the last
Distribution Date with respect to the Class AV-1
Certificates, to the Class AV-1 Certificates, the
Class AV-1 Certificates Carryover;
(x) on any Distribution Date on or before the last
Distribution Date with respect to the Class MV-1
Certificates, to the Class MV-1 Certificates, the
Class MV-1 Certificates Carryover;
(xi) on any Distribution Date on or before the last
Distribution Date with respect to the Class MV-2
Certificates, to the Class MV-2 Certificates, the
Class MV-2 Certificates Carryover;
(xii) on any Distribution Date on or before the last
Distribution Date with respect to the Class BV
Certificates, to the Class BV Certificates, the
Class BV Certificates Carryover;
(xiii) if a Group II Subordinated Trigger Event exists,
to the Class BV, Class MV-2 and Class MV-1
Certificates, in that order (such that no such
amounts shall be distributed to any such Class
unless the Certificate Principal Balance of each
such Class having lower priority has been reduced
to zero), the excess of (x) the Group II Principal
Funds for such Distribution Date over (y) the
sum of (A) the Group II Class A Principal
Distribution Amount, (B) the Group II Class MV-1
Principal Distribution Amount, (C) the Group II
Class MV-2 Principal Distribution Amount and (D)
the Group II Class BV Principal Distribution Amount
in each case for such Distribution Date; and
20
<PAGE>
(xiv) the remainder pursuant to Section 3.02(g) hereof.
(g) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall make the following allocations from the
Distribution Account of the remainders pursuant to Section 3.02(e)(x) and
(f)(xiv) hereof in the following order of priority, and each such allocation
shall be made only after the preceding allocations shall have been made until
such remainders have been fully allocated:
(i) to the Class C Certificates, the Class C Distribution
Amount; and
(ii) to the Class R Certificates, the remainder.
(h) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate any excess of the Group I Certificate
Principal Balance over the Schedule Principal Balances of Group I to reduce the
Certificate Principal Balances of the Group I Subordinated Certificates in the
following order of priority:
(i) to the Class BF Certificates until the Class BF
Certificate Principal Balance is reduced to zero;
(ii) to the Class MF-2 Certificates until the Class
MF-2 Certificate Principal Balance is reduced to
zero; and
(iii) to the Class MF-1 Certificates until the Class
MF-1 Certificate Principal Balance is reduced to
zero.
(i) On each Distribution Date the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate any excess of the Group II Certificate
Principal Balance over the Scheduled Principal Balances of Group II to reduce
the Certificate Principal Balances of the Group II Subordinated Certificates in
the following order of priority:
(i) to the Class BV Certificates until the Class BV
Certificate Principal Balance is reduced to zero;
(ii) to the Class MV-2 Certificates until the Class
MV-2 Certificate Principal Balance is reduced to
zero; and
(iii) to the Class MV-1 Certificates until the Class
MV-1 Certificate Principal Balance is reduced to
zero.
Section 3.03. Reports to the Depositor. On or before the Business Day
preceding each Distribution Date, based on information provided by the
Servicers, the Master Servicer shall notify the Depositor of the following
information with respect to the next Distribution Date (which notification may
be given by facsimile, or by telephone promptly confirmed in writing):
(a) the aggregate amount then on deposit in the Asset
Proceeds Account and the source thereof (identified as interest,
scheduled principal or unscheduled principal);
(b) the amount of any Realized Losses, Applied Realized
Loss Amounts and Unpaid Realized Loss Amounts;
(c) the application of the amounts described in clauses (a)
and (b) on such Distribution Date in accordance with Section 3.02
hereof; and
(d) whether a Group I or Group II Trigger Event or a Group I
or Group II Subordinated Trigger Event has occurred.
Section 3.04. Reports by Master Servicer.
(a) On each Distribution Date, based on information provided by the
Servicers, the Master Servicer shall report in writing to the Depositor (in hard
copy), each Holder of a Certificate, the Underwriters and the Trustee and their
designees (designated in writing to the Master Servicer) and the Rating
Agencies:
21
<PAGE>
(i) with respect to each Class of Certificates (other than
Class C and Class R) (based on a Certificate in the original principal
amount of $1,000):
(a) the amount of the distributions on such
Distribution Date;
(b) the amount of such distribution allocable to
interest;
(c) the amount of such distributions allocable to
principal, separately identifying the aggregate amount of any
prepayments, Substitution Shortfalls, repurchase amounts
pursuant to Section 2.03 of the Standard Terms or other
recoveries of principal included therein and any Extra
Principal Distribution Amount and any Applied Realized Loss
Amount with respect to, and any Unpaid Realized Loss at, such
Distribution Date;
(e) the principal balance after giving effect to any
distribution allocable to principal; and
(f) any Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class AF-7, Class MF-1, Class
MF-2 and Class BF Interest Carry Forward Amount, any Class
AV-1, Class MV-1, Class MV-2 and Class BV Interest Carry
Forward Amount or any Class AV-1, Class MV-1, Class MV-2 and
Class BV Certificates Carryover ;
(ii) the Group I Net Rate and the Group II Net Rate;
(iii) the largest Mortgage Loan balance outstanding in each
Group;
(iv) the Servicing Fees and Master Servicing Fees allocable to
each Group;
(v) One-Month LIBOR on the most recent Interest Determination
Date; and
(vi) the Pass-Through Rates for the Group II Certificates for
the current Accrual Period and, if the Pass-Through Rates for any Class
of the Group I Certificates for the current Accrual Period is based on
the Group I Net Rate, the Pass-Through Rates for the Group I
Certificates with respect to which the Group I Net Rate applies.
(b) On each Distribution Date, based on information provided by the
Servicers, the Master Servicer will distribute to the Depositor, each Holder,
the Underwriters and the Rating Agencies and the Trustee, together with the
information described in subsection (a) preceding, the following information
with respect to each Mortgage Loan Group in hard copy:
(i) the number and aggregate principal balances of Mortgage
Loans in each Group (a) 30-59 days Delinquent, (b) 60-89 days
Delinquent and (c) 90 or more days Delinquent, as of the close of
business as of the end of the related Prepayment Period.
(ii) the percentage that each of the Scheduled Principal
Balances set forth pursuant to clauses (a), (b) and (c) of paragraph
(i) above represent with respect to all Mortgage Loans in each Group;
(iii) the number and Scheduled Principal Balance of all
Mortgage Loans in each Group in foreclosure proceedings as of the close
of business as of the end of the related Prepayment Period and in the
immediately preceding Prepayment Period;
(iv) the number of Mortgagors and the Scheduled Principal
Balances of Mortgage Loans in each Group involved in bankruptcy
proceedings as of the close of business as of the end of the related
Prepayment Period;
(v) the aggregate number and aggregate book value of any
REO Property in each Group as of the close of business as of the end of
the related Prepayment Period;
(vi) the number and amount by principal balance of 60+ Day
Delinquent Loans in each Group, in each case by Servicer and as of the
end of the related Prepayment Period.
22
<PAGE>
ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates.
The Certificates shall be designated generally as the Mortgage Loan
Asset Backed Certificates, Series 1997-2. The aggregate principal amount of
Certificates that may be executed and delivered under this Agreement is limited
to $466,861,000, except for Certificates executed and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Certificates pursuant to Sections 5.04 or 5.06 of the Standard Terms. The
following table sets forth the Classes of Certificates and the initial
Certificate Principal Balance for each such Class:
Initial Certificate
Class Principal Balance
AF-1 $15,000,000
AF-2 $10,000,000
AF-3 $31,000,000
AF-4 $9,000,000
AF-5 $16,000,000
AF-6 $10,000,000
AF-7 $15,552,000
MF-1 $2,090,000
MF-2 $7,167,000
BF $3,643,000
AV-1 $293,561,000
MV-1 $13,896,000
MV-2 $26,924,000
BV $13,028,000
C (1)
R (2)
(1) The Class C Certificates have no stated principal balance or
Pass-Through Rate and are entitled to receive the Class C Distribution Amount.
(2) The Class R Certificates have no stated principal balance or
Pass-Through Rate and are not entitled to any scheduled distributions of
principal or interest.
Section 4.02. Denominations.
The Book-Entry Certificates shall be registered as one or more
certificates in the name of the Clearing Agency or its nominee. Beneficial
interests in the Book-Entry Certificates shall be held by the Beneficial Owners
thereof through the book-entry facilities of the Clearing Agency as described
herein, in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof. The Class C and Class R Certificates shall be issued in
certificated, fully-registered form in minimum Percentage Interests of 25% and
integral multiples of 1% in excess thereof, except that two Class R Certificates
may be issued in different denominations.
Section 4.03. Interest Fund.
An Interest Fund shall be established by the Trustee (or the Paying
Agent on behalf of the Trustee). The Interest Fund shall initially consist of
cash in the amount of $0.00. The Interest Fund shall be an Eligible Account and,
as soon as practicable after the Closing Date, the Trustee (or the Paying Agent
on behalf of the Trustee) shall invest any moneys on deposit in the Interest
Fund in Permitted Investments at the direction of the Master Servicer. On the
Business Day preceding the July 25, 1997, Distribution Date, the Trustee (or the
Paying Agent on behalf of the Trustee) shall withdraw the entire amount from the
Interest Fund (excluding any earnings thereon) and deposit such amount into the
Asset Proceeds Account. Such entire amount shall be used to make distributions
of interest on such Distribution Date and to cover applicable administrative
costs (which do not include the Servicing Fees) relating to the Mortgage Loans
listed on Schedule III. The Interest Fund shall not be an asset of either of the
REMICs. Any earnings on the Interest Fund shall be payable on such date to
Meritech.
23
<PAGE>
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Request for Opinions.
(a) The Depositor hereby requests and authorizes Arter & Hadden, as its
counsel in this transaction, to issue on behalf of the Depositor such legal
opinions to the Trustee, the Master Servicer, and each Rating Agency as may be
(i) required by any and all documents, certificates or agreements executed in
connection with the Trust or (ii) requested by the Trustee, the Master Servicer,
any Rating Agency or their respective counsels.
(b) The Trustee and the Master Servicer hereby request and authorize
their respective counsel to issue on behalf of the Trustee and the Master
Servicer such legal opinions to the Depositor, the Master Servicer, the Trustee,
and each Rating Agency as may be required by any and all documents, certificates
or agreements executed in connection with the establishment of the Trust and the
issuance of the Certificates.
Section 5.02. Form of Certificates.
The Certificates shall be substantially in the respective forms set
forth in the Exhibits hereto. All Certificates shall be dated the date of their
execution.
Section 5.03. Schedules and Exhibits.
Each of the Schedules and Exhibits attached hereto or referenced herein
is incorporated herein by reference as contemplated by the Standard Terms.
Section 5.04. Governing Law.
In accordance with Section 11.04 of the Standard Terms, this Agreement
shall be construed in accordance with and governed by the laws of the State,
without regard to any conflicts of laws principles thereof.
Section 5.05. REMIC Administration.
(a) Pooling REMIC. (i) The beneficial ownership of the Pooling
REMIC shall be evidenced by interests having the following terms:
<TABLE>
<CAPTION>
Type of Interest
Pooling Interest Initial Subaccount Pass-Through For Purposes of
Designation Balance Rate REMIC Provisions
<S> <C>
Group I
Subaccount AF-1 $15,000,000 (1) Regular
Subaccount AF-2 $10,000,000 (1) Regular
Subaccount AF-3 $31,000,000 (1) Regular
Subaccount AF-4 $9,000,000 (1) Regular
Subaccount AF-5 $16,000,000 (1) Regular
Subaccount AF-6 $10,000,000 (1) Regular
Subaccount AF-7 $15,552,000 (1) Regular
Subaccount MF-1 $2,090,000 (1) Regular
Subaccount MF-2 $7,167,000 (1) Regular
Subaccount BF $3,643,000 (1) Regular
Group II
Subaccount AV-1 $293,561,000 (2) Regular
Subaccount MV-1 $13,896,000 (2) Regular
Subaccount MV-2 $26,924,000 (2) Regular
Subaccount BV $13,028,000 (2) Regular
Subaccount R (3) (3) Residual
</TABLE>
- -----------------
(1) On any Distribution Date, the Group I Net Rate.
(2) On any Distribution Date, the Group II Net Rate.
(3) Subaccount R is not issued with a Balance or a Pass-Through Rate.
(ii) Subaccount R shall be issued in fully registered
certificate form as part of the Class R Certificate. All other
Subaccounts shall be deemed issued as non-certificated interests and
shall constitute assets of the Issuing REMIC.
(iii) The assets of the Pooling REMIC are the Mortgage Loans
and the Asset Proceeds Account.
24
<PAGE>
(iv) On each Distribution Date, amounts in the Asset Proceeds
Account will be distributed as provided in Section 3.01 hereof.
(b) Issuing REMIC. (i) The beneficial ownership of the Issuing REMIC
shall be evidenced as set forth in Section 4.01 hereof; the Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class AF-7, Class MF-1,
Class MF-2, Class BF, Class AV-1, Class MV-1, Class MV-2 and Class BV
Certificates and each of the separate interest-only rights making up the Class C
Distribution Amount are Regular Interests in the Issuing REMIC. Class R is the
residual interest in the Issuing REMIC.
(ii) The assets of the Issuing REMIC are the Subaccounts in
the Pooling REMIC other than Subaccount R and the Distribution Account.
(iii) On each Distribution Date, amounts in the Distribution
Account will be distributed as provided in Section 3.02 hereof.
(c) General.
(i) The Closing Date is designated as the "start up" day of
the Pooling REMIC and Issuing REMIC.
(ii) The Trustee shall make (or cause the Paying Agent to
make) elections to treat the Pooling REMIC and the Issuing REMIC as
REMICs under the Code.
(d) The "latest possible maturity date" for purposes of the REMIC
regulations and each REMIC established hereby is June 25, 2029.
Section 5.06. Master Servicer; Month-End Interest. Texas Commerce Bank
National Association is hereby appointed (a) as administrative agent of the
Trust to perform the duties and responsibilities of the Master Servicer
hereunder, (b) Certificate Registrar and (c) Paying Agent. Notwithstanding
anything in the Trust Agreement to the contrary, neither the Trustee nor the
Master Servicer shall be obligated to pay Month End Interest under any
circumstance, including without limitation, the failure of a Servicer to do so.
Section 5.07. Trustee; Advances. Sections 3.04(c) and (d) of the
Standard Terms (relating to the Trustee's obligation to make Advances) are
deleted in their entirety and references to "or the Trustee" in Section 3.04(e)
of the Standard Terms and to "and Trustee" in the heading of Section 3.04 of the
Standard Terms are deleted. The Trustee shall not be obligated to make Advances.
Notwithstanding anything in the Trust Agreement to the contrary, the Trustee
shall not be obligated to pay Month-End Interest under any circumstance,
including without limitation, the failure of a Servicer to do so.
Section 5.08. Auction Call. Within 90 days of the Auction Sale Bid
Date, the Master Servicer will notify the investment banking or whole-loan
trading firm selected by the Depositor (such investment bank or trading firm,
the "Advisor") who will solicit and will have sole responsibility for soliciting
on behalf of the Trust competitive bids for the purchase of the Mortgage Loans
then remaining in the Trust for fair market value (such bidders may include the
Depositor or any of its affiliates). If satisfactory bids are received as
described below, the proceeds of the sale of such assets shall be deposited into
the Asset Proceeds Account. The Advisor will solicit, on behalf of the Trust,
good-faith bids from no fewer than two prospective purchasers that are
considered at the time to be competitive participants in the home loan mortgage
market. The Advisor will consult with any securities brokerage houses identified
by the Depositor as then making a market in the Certificates to obtain a
determination as to whether the fair market value of such assets has been
offered.
If the highest good-faith bid received by the Advisor from a qualified
bidder is, in the judgment of the Advisor, not less than the fair market value
of such Mortgage Loans and if such bid is sufficient (i) to reduce the
Certificate Principal Balances of the Group I Certificates and Group II
Certificates to zero, (ii) to pay the Current Interest Amount and the Interest
Carry Forward Amount to the Group I Class A Certificates and the Group II Class
A Certificates (and any Class AV-1, Class MV-1, Class MV-2 and Class BV
Certificate Carryovers to the Class AV-1, Class MV-1, Class MV-2 and Class BV
Certificates), and (iii) the Current Interest Amount and the Interest
Carryforward Amount to the Group I Subordinated Certificates and Group II
Subordinated Certificates, the Master Servicer, upon the written direction of
the Advisor and the Depositor, will, or will direct the Trustee to, sell and
assign such Mortgage Loans without representation, warranty or recourse to such
highest bidder and will redeem the Certificates; provided, however, the Master
Servicer will decline to consummate such sale unless it receives from the
Advisor written direction to proceed with such sale and an opinion of counsel
addressed to the Master Servicer that such sale will not give rise either to
"any prohibited transaction" tax under Section 860F(a)(1) of the Code or to any
tax on contribution to the REMIC after the Closing Date under Section 860G(d)(1)
of the Code. If such sale is not consummated in accordance with the foregoing,
the Master Servicer will not be under any obligation to solicit any further bids
or otherwise to negotiate any further sale of the Mortgage Loans. In such event,
however, if directed by the Depositor, the Master Servicer may notify the
Advisor who will solicit bids from time to time in the future for the purchase
of the Mortgage Loans upon the same terms described above. The Master Servicer
may consult with the Advisor and the advice of the Advisor shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by the Master Servicer hereunder.
25
<PAGE>
The Depositor shall not have the right to purchase from the Trust
provided for in Section 9.02 of the Standard Terms. No Class of the Certificates
shall be a Designated Class pursuant to Section 9.02 of the Standard Terms,
which Section 9.02 (and the provision for Optional Termination) shall not be
applicable to the Series 1997-2 Certificates.
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Certificate
Registrar, the Paying Agent, the Custodian and the Trustee have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized and their respective signatures duly attested all as of June 1, 1997.
SAXON ASSET SECURITIES COMPANY
By: /s/ Bradley D. Adams
____________________________________
Bradley D. Adams, Vice President
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Master Servicer, Custodian, Certificate
Registrar and Paying Agent
By: /s/ Rafael Herrera
__________________________________________
Rafael Herrera, Vice President
CITIBANK, N.A.
not in its individual capacity but solely as trustee
under the Trust Agreement
By: /s/ Jenny Cheng
_________________________________
Jenny Cheng, Assistant Vice President
26
<PAGE>
COMMONWEALTH OF VIRGINIA )
) ss.:
CITY OF RICHMOND )
The foregoing instrument was acknowledged before me June 24, 1997, by
Bradley D. Adams, a Vice President of Saxon Asset Securities Company, a Virginia
corporation, on behalf of the corporation.
-----------------------------------
Notary Public
My Commission expires:
27
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me on June 24,
1997, by Rafael Herrera, a Vice President of Texas Commerce Bank National
Association, a national banking association, on behalf of the bank.
-----------------------------------
Notary Public
My Commission expires:
28
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me June 24, 1997,
by Jenny Cheng, an Assistant Vice President of Citibank, N.A., a national
banking association, on behalf of the bank.
------------------------------------
Notary Public
My Commission expires:
29
<PAGE>
Schedule I
Mortgage Loans
A. Group I Mortgage Loans.
B. Group II Mortgage Loans.
30
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10006638 $166,000.00 $162,462.05
10007377 $96,000.00 $95,912.42
10007413 $56,625.00 $56,507.56
10007423 $275,000.00 $274,364.93
10007594 $332,500.00 $331,711.65
10007597 $263,200.00 $262,391.39
10007655 $116,850.00 $116,442.62
10007696 $288,000.00 $287,317.19
10007771 $200,000.00 $196,908.83
10007788 $346,500.00 $345,828.01
10007794 $296,000.00 $295,224.18
10007922 $305,600.00 $304,991.54
10007939 $325,000.00 $323,834.16
10007942 $110,000.00 $109,952.63
10007974 $25,000.00 $24,938.77
10007988 $294,000.00 $293,414.66
10008048 $42,900.00 $42,723.26
10008114 $351,000.00 $350,282.64
10008135 $35,000.00 $34,945.15
10008150 $304,500.00 $303,893.75
10008179 $36,000.00 $35,986.45
10008185 $385,000.00 $380,745.11
10008213 $142,500.00 $142,369.98
10008246 $266,000.00 $265,560.82
10008247 $98,350.00 $98,199.82
10008253 $312,000.00 $311,559.76
10008265 $240,000.00 $239,582.72
10008295 $42,000.00 $41,806.89
10008329 $260,000.00 $259,632.92
10008333 $66,500.00 $66,442.34
10008339 $80,000.00 $79,774.73
10008399 $167,300.00 $167,139.07
10008431 $61,150.00 $61,078.39
10008435 $106,000.00 $105,235.11
10008441 $69,300.00 $69,300.00
10008451 $70,000.00 $69,949.85
10008471 $42,400.00 $42,333.55
10008489 $87,000.00 $86,472.85
10008505 $60,000.00 $59,966.43
10008513 $79,000.00 $78,654.96
10008518 $74,000.00 $73,442.47
10008521 $51,409.00 $51,189.62
10008522 $96,000.00 $95,837.34
10008535 $118,000.00 $117,352.64
10008554 $112,500.00 $112,376.63
10008564 $76,000.00 $75,951.19
Page 1
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10008565 $303,000.00 $302,700.74
10008566 $176,000.00 $175,835.11
10008567 $61,150.00 $61,097.10
10008568 $92,000.00 $91,916.06
10008570 $56,500.00 $56,175.94
10008571 $128,000.00 $127,794.80
10008573 $56,850.00 $56,817.30
10008575 $100,000.00 $99,901.25
10008579 $90,750.00 $90,671.49
10008580 $175,000.00 $174,822.56
10008581 $120,000.00 $119,884.55
10008584 $353,700.00 $353,291.51
10008585 $70,000.00 $69,953.78
10008587 $102,000.00 $101,875.98
10008589 $56,000.00 $55,592.40
10008590 $34,000.00 $33,974.28
10008593 $59,250.00 $59,191.47
10008594 $133,550.00 $133,443.39
10008595 $288,750.00 $288,441.49
10008596 $52,000.00 $51,711.63
10008598 $134,200.00 $134,077.56
10008599 $99,000.00 $98,809.03
10008600 $30,000.00 $29,661.20
10008601 $54,005.00 $53,951.66
10008605 $117,600.00 $117,483.86
10008606 $69,500.00 $69,452.84
10008607 $148,000.00 $147,711.01
10008608 $48,750.00 $48,705.51
10008609 $339,000.00 $338,673.90
10008610 $37,000.00 $36,960.47
10008611 $62,000.00 $61,951.83
10008612 $35,000.00 $34,799.26
10008615 $156,800.00 $156,653.11
10008616 $44,000.00 $43,914.65
10008617 $96,000.00 $95,867.17
10008620 $71,500.00 $71,434.77
10008621 $57,750.00 $57,341.05
10008622 $40,000.00 $39,707.05
10008624 $91,850.00 $91,763.95
10008626 $41,950.00 $41,750.71
10008627 $75,000.00 $74,931.57
10008628 $221,000.00 $220,869.33
10008629 $148,500.00 $147,851.40
10008630 $33,033.00 $32,722.72
10008631 $208,000.00 $207,592.98
10008632 $273,300.00 $273,050.63
Page 2
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10008634 $50,000.00 $49,962.19
10008635 $184,000.00 $183,813.43
10008636 $62,000.00 $61,941.90
10008637 $44,200.00 $43,910.64
10008639 $123,000.00 $122,901.81
10008641 $105,000.00 $104,455.35
10008643 $117,000.00 $116,793.25
10008645 $177,000.00 $176,834.18
10008646 $64,000.00 $63,675.45
10008647 $47,400.00 $47,355.59
10008648 $168,800.00 $168,650.03
10008650 $77,000.00 $76,911.69
10008652 $118,000.00 $117,889.45
10008656 $64,200.00 $64,138.25
10008658 $16,000.00 $15,789.65
10008659 $30,000.00 $29,967.10
10008660 $192,000.00 $191,800.15
10008661 $66,400.00 $66,348.35
10008663 $123,000.00 $122,923.15
10008665 $35,200.00 $35,168.71
10008666 $46,500.00 $46,465.78
10008667 $116,900.00 $116,793.34
10008668 $35,200.00 $35,168.71
10008670 $40,000.00 $39,922.72
10008671 $46,400.00 $46,360.91
10008674 $149,000.00 $147,465.11
10008676 $37,000.00 $36,978.13
10008677 $301,000.00 $300,759.71
10008679 $112,000.00 $111,883.42
10008680 $59,650.00 $59,612.00
10008682 $82,000.00 $81,925.18
10008683 $198,000.00 $197,782.88
10008684 $123,200.00 $122,553.72
10008686 $42,750.00 $42,714.94
10008687 $52,800.00 $52,753.61
10008688 $84,000.00 $83,919.20
10008689 $63,000.00 $62,949.70
10008690 $38,000.00 $37,968.84
10008695 $34,350.00 $34,324.72
10008697 $65,000.00 $64,925.76
10008699 $60,000.00 $59,939.16
10008702 $84,500.00 $84,348.06
10008704 $336,000.00 $335,668.15
10008706 $121,500.00 $121,386.17
10008707 $110,000.00 $109,389.76
10008709 $76,000.00 $75,610.20
Page 3
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10008710 $52,800.00 $52,755.53
10008711 $50,000.00 $49,954.39
10008712 $40,250.00 $40,065.91
10008714 $166,250.00 $166,093.33
10008716 $70,000.00 $69,929.03
10008717 $110,000.00 $109,939.92
10008719 $42,000.00 $41,615.16
10008720 $105,000.00 $104,909.17
10008721 $176,000.00 $175,536.23
10008722 $67,200.00 $67,131.85
10008723 $103,100.00 $102,992.69
10008724 $45,500.00 $45,457.37
10008727 $71,100.00 $71,036.83
10008728 $175,000.00 $174,204.71
10008729 $119,000.00 $118,905.00
10008731 $165,400.00 $165,249.09
10008732 $176,000.00 $175,847.74
10008735 $30,000.00 $29,594.18
10008737 $43,900.00 $43,503.03
10008738 $113,500.00 $113,393.67
10008739 $318,750.00 $318,459.18
10008740 $73,000.00 $72,933.40
10008741 $119,000.00 $118,872.87
10008742 $86,800.00 $86,563.78
10008743 $158,000.00 $157,831.20
10008744 $88,350.00 $88,267.23
10008746 $40,000.00 $39,787.79
10008748 $60,000.00 $59,935.89
10008749 $82,000.00 $81,923.13
10008750 $172,500.00 $172,395.15
10008752 $72,000.00 $71,944.05
10008754 $136,500.00 $136,388.07
10008757 $72,000.00 $71,927.00
10008758 $110,500.00 $110,381.95
10008760 $69,500.00 $69,322.06
10008761 $66,600.00 $66,560.62
10008762 $57,600.00 $57,543.12
10008763 $38,000.00 $37,907.26
10008766 $213,750.00 $213,559.78
10008767 $111,200.00 $111,059.37
10008768 $28,000.00 $27,414.97
10008769 $88,000.00 $87,913.09
10008772 $117,500.00 $117,276.93
10008773 $25,500.00 $25,360.35
10008774 $31,250.00 $31,164.45
10008775 $101,400.00 $101,294.45
Page 4
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10008776 $156,000.00 $155,865.05
10008777 $85,500.00 $85,448.02
10008778 $45,900.00 $45,672.45
10008779 $41,900.00 $41,861.76
10008781 $38,700.00 $38,677.75
10008782 $95,000.00 $94,908.61
10008785 $30,500.00 $30,479.87
10008786 $68,850.00 $68,819.22
10008788 $135,000.00 $134,900.63
10008789 $70,500.00 $70,428.52
10008790 $112,800.00 $112,685.64
10008793 $24,750.00 $24,731.77
10008794 $65,000.00 $64,935.79
10008795 $32,000.00 $31,975.13
10008796 $190,350.00 $190,171.66
10008797 $48,000.00 $47,959.56
10008798 $33,250.00 $33,111.41
10008800 $75,000.00 $74,917.75
10008801 $35,000.00 $34,810.11
10008802 $69,300.00 $69,259.02
10008804 $32,000.00 $31,832.13
10008806 $247,000.00 $246,742.91
10008807 $159,750.00 $159,608.07
10008808 $85,500.00 $84,796.75
10008812 $40,000.00 $39,978.83
10008814 $52,000.00 $51,739.27
10008815 $105,000.00 $104,916.17
10008817 $162,400.00 $162,273.82
10008819 $58,225.00 $58,171.87
10008820 $138,960.00 $138,826.31
10008826 $55,250.00 $55,208.21
10008827 $95,000.00 $94,908.61
10008828 $43,775.00 $43,498.06
10008831 $140,700.00 $140,571.62
10008832 $38,000.00 $37,824.13
10008836 $92,650.00 $92,595.22
10008837 $140,220.00 $140,070.19
10008838 $218,700.00 $218,563.36
10008840 $107,000.00 $106,899.74
10008842 $74,500.00 $74,430.20
10008843 $75,000.00 $74,940.13
10008846 $50,000.00 $49,971.23
10008847 $160,000.00 $159,841.97
10008848 $161,500.00 $161,351.73
10008849 $40,800.00 $40,748.80
10008851 $47,900.00 $47,853.93
Page 5
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10008853 $70,000.00 $69,636.91
10008854 $68,000.00 $67,957.13
10008855 $41,797.00 $41,785.04
10008858 $16,500.00 $16,425.37
10008860 $66,850.00 $66,511.00
10008861 $30,000.00 $29,833.68
10008862 $42,750.00 $42,627.82
10008863 $51,200.00 $51,167.11
10008865 $51,000.00 $50,969.00
10008866 $64,000.00 $63,641.77
10008868 $84,600.00 $84,555.25
10008870 $71,250.00 $71,186.69
10008873 $50,000.00 $49,969.62
10008875 $59,200.00 $59,141.53
10008876 $54,900.00 $54,873.00
10008877 $292,000.00 $291,726.43
10008879 $61,000.00 $60,726.94
10008880 $56,800.00 $56,470.31
10008881 $49,400.00 $49,379.83
10008888 $165,200.00 $165,032.50
10008889 $204,375.00 $204,144.99
10008890 $78,550.00 $78,374.03
10008893 $145,200.00 $144,665.89
10008894 $40,000.00 $39,762.88
10008896 $49,000.00 $48,961.91
10008897 $51,000.00 $50,954.69
10008898 $125,000.00 $124,900.23
10008899 $67,900.00 $67,838.05
10008905 $50,000.00 $49,976.67
10008906 $100,000.00 $99,785.16
10008910 $33,000.00 $32,881.88
10008911 $90,000.00 $89,960.19
10008915 $130,000.00 $129,940.94
10008917 $65,000.00 $64,642.14
10008921 $26,000.00 $25,952.70
10008923 $43,900.00 $43,858.87
10008924 $45,975.00 $45,960.70
10008926 $97,600.00 $97,557.96
10008927 $26,750.00 $26,691.85
10008928 $48,750.00 $48,736.81
10008931 $72,000.00 $71,841.07
10008933 $114,400.00 $114,136.42
10008934 $76,400.00 $76,213.54
10008935 $17,825.00 $17,793.35
10008936 $43,700.00 $43,663.18
10008937 $135,200.00 $135,076.63
Page 6
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10008938 $85,000.00 $84,967.12
10008939 $100,800.00 $100,717.34
10008940 $180,000.00 $179,918.22
10008941 $30,000.00 $29,936.30
10008942 $108,000.00 $107,949.61
10008943 $200,000.00 $199,291.67
10008946 $114,750.00 $114,693.56
10008947 $39,200.00 $39,187.81
10008948 $125,000.00 $124,538.76
10008949 $100,000.00 $99,755.94
10008950 $78,000.00 $77,969.83
10008955 $91,650.00 $91,375.14
10008956 $45,000.00 $44,888.92
10008957 $78,000.00 $77,818.19
10008958 $50,000.00 $49,981.17
10008959 $106,000.00 $105,654.34
10008962 $35,100.00 $35,085.28
10008964 $63,000.00 $62,967.33
10008965 $136,100.00 $136,038.17
10008967 $54,400.00 $54,375.93
10008970 $112,000.00 $111,941.93
10008972 $184,800.00 $184,720.40
10008973 $40,000.00 $39,980.53
10008975 $203,000.00 $202,917.12
10008977 $40,050.00 $40,039.74
10008978 $40,000.00 $39,897.82
10008979 $40,000.00 $39,983.67
10008980 $349,200.00 $349,110.64
10008982 $58,500.00 $58,208.86
10008985 $30,000.00 $29,983.61
10008986 $67,200.00 $67,167.81
10008987 $39,500.00 $39,337.40
10008988 $44,800.00 $44,787.18
10008989 $103,500.00 $103,452.98
10008990 $63,900.00 $63,873.90
10008991 $176,000.00 $175,915.69
10008992 $90,000.00 $89,963.25
10008998 $53,500.00 $53,482.43
10008999 $213,750.00 $213,665.05
10009001 $65,000.00 $64,966.30
10009002 $96,000.00 $95,956.39
10009004 $98,000.00 $97,706.26
10009005 $50,000.00 $49,903.41
10009006 $180,000.00 $179,934.05
10009010 $60,800.00 $60,642.92
10009012 $245,650.00 $245,538.39
Page 7
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009013 $30,000.00 $29,922.49
10009015 $80,700.00 $80,663.33
10009016 $144,000.00 $143,953.98
10009017 $65,000.00 $64,979.23
10009018 $39,900.00 $39,885.38
10009022 $35,000.00 $34,935.56
10009024 $61,600.00 $61,571.26
10009025 $69,200.00 $69,167.72
10009026 $59,500.00 $59,478.20
10009027 $138,750.00 $138,681.75
10009029 $200,000.00 $199,901.62
10009030 $84,000.00 $83,963.82
10009031 $76,500.00 $76,333.70
10009032 $152,415.00 $152,279.40
10009034 $112,000.00 $111,950.45
10009037 $43,400.00 $43,381.30
10009038 $44,400.00 $44,387.98
10009039 $120,000.00 $119,952.31
10009041 $57,000.00 $56,856.04
10009042 $100,800.00 $100,772.72
10009044 $58,500.00 $58,358.57
10009046 $142,200.00 $142,140.37
10009048 $31,430.00 $31,418.78
10009049 $27,000.00 $26,942.00
10009050 $143,000.00 $142,931.49
10009051 $51,000.00 $50,980.27
10009052 $99,000.00 $98,953.81
10009053 $27,900.00 $27,893.62
10009054 $132,000.00 $131,947.54
10009056 $142,500.00 $142,440.25
10009061 $51,600.00 $51,574.62
10009062 $138,750.00 $138,391.53
10009064 $37,400.00 $37,390.68
10009066 $125,400.00 $125,343.03
10009067 $18,200.00 $18,169.44
10009068 $47,500.00 $47,478.42
10009071 $33,500.00 $33,490.14
10009074 $49,000.00 $48,982.04
10009076 $60,000.00 $59,976.16
10009077 $84,500.00 $84,305.32
10009078 $50,800.00 $50,733.10
10009082 $96,000.00 $95,952.78
10009083 $64,000.00 $63,969.34
10009084 $40,000.00 $39,898.97
10009085 $220,500.00 $220,421.38
10009088 $100,000.00 $99,959.17
Page 8
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009089 $40,850.00 $40,834.62
10009090 $39,350.00 $39,335.19
10009091 $38,600.00 $38,585.47
10009093 $220,500.00 $220,421.38
10009095 $123,000.00 $122,966.71
10009097 $70,000.00 $69,806.51
10009098 $68,000.00 $67,969.91
10009102 $178,500.00 $176,946.00
10009106 $65,600.00 $65,568.57
10009109 $100,000.00 $100,000.00
10009112 $52,500.00 $52,478.57
10009113 $144,000.00 $143,942.78
10009114 $180,000.00 $179,922.47
10009115 $35,700.00 $35,682.89
10009116 $214,450.00 $214,360.07
10009117 $37,850.00 $37,836.14
10009118 $112,500.00 $112,464.04
10009120 $37,400.00 $37,391.68
10009121 $35,000.00 $34,987.52
10009122 $78,400.00 $78,362.44
10009123 $81,300.00 $81,263.06
10009125 $48,750.00 $48,737.52
10009126 $60,000.00 $59,987.75
10009127 $49,500.00 $49,437.92
10009129 $81,600.00 $81,564.85
10009130 $33,450.00 $33,437.74
10009131 $73,360.00 $73,335.23
10009132 $40,000.00 $39,983.67
10009133 $72,000.00 $71,965.11
10009135 $72,800.00 $72,766.04
10009136 $92,000.00 $91,968.94
10009137 $75,000.00 $74,801.80
10009138 $60,000.00 $48,266.87
10009139 $66,350.00 $66,320.65
10009142 $52,000.00 $51,978.77
10009143 $362,600.00 $362,484.11
10009144 $41,650.00 $41,601.08
10009145 $55,400.00 $55,344.00
10009146 $15,000.00 $14,969.97
10009147 $119,250.00 $119,203.87
10009148 $46,900.00 $46,881.36
10009149 $98,000.00 $97,963.10
10009150 $48,000.00 $47,976.39
10009151 $172,550.00 $172,491.75
10009152 $84,500.00 $84,462.62
10009153 $59,200.00 $59,052.18
Page 9
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009155 $241,000.00 $240,878.29
10009156 $52,000.00 $51,986.70
10009157 $86,400.00 $86,359.69
10009158 $55,000.00 $54,968.35
10009159 $24,765.00 $24,743.14
10009160 $100,000.00 $99,939.42
10009161 $81,500.00 $81,462.98
10009162 $73,500.00 $73,473.79
10009163 $37,550.00 $37,550.00
10009164 $236,000.00 $235,892.78
10009166 $44,600.00 $44,586.13
10009171 $58,500.00 $58,480.25
10009172 $140,000.00 $139,941.29
10009173 $87,500.00 $87,456.95
10009175 $55,250.00 $55,234.19
10009178 $272,000.00 $271,891.91
10009180 $60,000.00 $59,979.74
10009181 $380,000.00 $379,836.32
10009182 $397,500.00 $397,333.31
10009184 $60,800.00 $60,773.11
10009186 $51,200.00 $51,146.09
10009187 $102,500.00 $102,246.96
10009188 $43,500.00 $43,481.76
10009189 $15,000.00 $14,976.13
10009190 $34,500.00 $34,407.80
10009193 $80,000.00 $79,960.65
10009194 $154,500.00 $153,866.75
10009195 $103,200.00 $103,151.85
10009196 $73,950.00 $73,815.47
10009198 $18,850.00 $18,815.29
10009199 $90,000.00 $89,770.09
10009201 $63,900.00 $63,871.73
10009202 $47,350.00 $47,230.41
10009204 $186,400.00 $186,319.71
10009206 $74,000.00 $73,965.48
10009207 $44,000.00 $43,983.88
10009210 $71,850.00 $71,838.35
10009211 $119,200.00 $118,918.95
10009212 $96,000.00 $95,967.59
10009217 $84,800.00 $84,767.20
10009218 $50,000.00 $49,876.57
10009221 $86,400.00 $86,367.47
10009223 $84,000.00 $83,960.81
10009226 $17,000.00 $16,959.45
10009227 $26,550.00 $26,496.22
10009228 $93,750.00 $93,708.53
Page 10
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009229 $92,000.00 $91,947.07
10009230 $100,000.00 $99,968.04
10009232 $94,500.00 $94,472.19
10009235 $36,000.00 $36,000.00
10009239 $40,500.00 $40,483.46
10009240 $104,000.00 $103,950.18
10009241 $30,000.00 $30,000.00
10009242 $52,250.00 $52,121.01
10009246 $67,500.00 $67,480.69
10009248 $84,000.00 $84,000.00
10009249 $39,000.00 $38,984.91
10009251 $44,000.00 $43,984.31
10009252 $51,200.00 $51,172.21
10009253 $120,000.00 $119,942.50
10009255 $95,200.00 $94,990.63
10009257 $59,500.00 $59,354.79
10009258 $45,000.00 $44,982.12
10009259 $64,000.00 $63,965.04
10009268 $27,000.00 $27,000.00
10009272 $76,800.00 $76,800.00
10009275 $168,000.00 $168,000.00
10009278 $107,950.00 $107,915.50
10009279 $145,000.00 $145,000.00
10009280 $123,200.00 $123,200.00
10009286 $162,800.00 $162,800.00
10009287 $157,500.00 $157,500.00
10009290 $139,750.00 $139,750.00
10009293 $113,050.00 $113,050.00
10009297 $57,600.00 $57,581.08
10009298 $32,200.00 $32,200.00
10009299 $61,350.00 $61,329.29
10009300 $90,000.00 $90,000.00
10009303 $99,600.00 $99,600.00
10009304 $168,000.00 $168,000.00
10009305 $100,000.00 $100,000.00
10009308 $81,900.00 $81,900.00
10009309 $68,000.00 $68,000.00
10009310 $146,250.00 $146,250.00
10009312 $98,900.00 $98,900.00
10009318 $17,160.00 $17,160.00
10009319 $70,000.00 $70,000.00
10009321 $44,950.00 $44,950.00
10009322 $35,750.00 $35,750.00
10009324 $51,750.00 $51,750.00
10009327 $155,900.00 $155,900.00
10009328 $38,000.00 $38,000.00
Page 11
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009329 $35,300.00 $35,300.00
10009331 $72,200.00 $72,166.31
10009333 $90,000.00 $90,000.00
10009335 $45,000.00 $45,000.00
10009336 $120,000.00 $120,000.00
10009338 $120,700.00 $120,700.00
10009339 $26,642.00 $26,642.00
10009340 $73,800.00 $73,800.00
10009341 $52,000.00 $52,000.00
10009342 $45,500.00 $45,500.00
10009343 $34,700.00 $34,700.00
10009344 $52,000.00 $52,000.00
10009346 $49,600.00 $49,600.00
10009348 $58,000.00 $58,000.00
10009351 $103,200.00 $103,200.00
10009353 $261,250.00 $261,250.00
10009354 $62,900.00 $62,900.00
10009355 $66,500.00 $66,500.00
10009356 $27,500.00 $27,500.00
10009357 $60,800.00 $60,800.00
10009358 $47,200.00 $47,200.00
10009360 $235,000.00 $235,000.00
10009363 $120,000.00 $120,000.00
10009364 $100,000.00 $100,000.00
10009366 $78,750.00 $78,750.00
10009367 $84,000.00 $84,000.00
10009369 $76,000.00 $76,000.00
10009371 $115,500.00 $115,500.00
10009374 $121,500.00 $121,500.00
10009375 $36,300.00 $36,300.00
10009377 $54,000.00 $54,000.00
10009378 $46,125.00 $46,125.00
10009380 $59,120.00 $59,120.00
10009384 $89,600.00 $89,600.00
10009385 $117,600.00 $117,600.00
10009386 $98,600.00 $98,600.00
10009387 $220,000.00 $220,000.00
10009389 $71,950.00 $71,950.00
10009390 $35,000.00 $35,000.00
10009393 $104,000.00 $104,000.00
10009394 $25,300.00 $25,300.00
10009395 $56,000.00 $56,000.00
10009396 $95,200.00 $95,200.00
10009398 $114,000.00 $114,000.00
10009399 $120,600.00 $120,600.00
10009401 $21,015.00 $21,015.00
Page 12
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009403 $63,750.00 $63,750.00
10009404 $115,000.00 $115,000.00
10009405 $56,650.00 $56,650.00
10009406 $247,000.00 $247,000.00
10009408 $45,000.00 $45,000.00
10009409 $124,000.00 $124,000.00
10009413 $880,000.00 $880,000.00
10009416 $70,350.00 $70,350.00
10009417 $84,500.00 $84,500.00
10009418 $109,600.00 $109,600.00
10009419 $66,500.00 $66,500.00
10009422 $44,250.00 $44,250.00
10009425 $54,500.00 $54,500.00
10009426 $43,000.00 $43,000.00
10009427 $73,500.00 $73,500.00
10009429 $65,000.00 $65,000.00
10009430 $134,500.00 $134,500.00
10009431 $37,000.00 $37,000.00
10009432 $130,900.00 $130,900.00
10009433 $30,150.00 $30,150.00
10009434 $66,350.00 $66,350.00
10009435 $90,000.00 $90,000.00
10009436 $23,000.00 $23,000.00
10009437 $43,500.00 $43,500.00
10009439 $60,300.00 $60,300.00
10009441 $55,000.00 $55,000.00
10009443 $201,500.00 $201,500.00
10009444 $235,600.00 $235,600.00
10009445 $100,000.00 $100,000.00
10009446 $50,000.00 $50,000.00
10009447 $19,625.00 $19,625.00
10009448 $113,900.00 $113,900.00
10009449 $43,500.00 $43,500.00
10009450 $149,600.00 $149,600.00
10009451 $40,000.00 $40,000.00
10009452 $46,600.00 $46,600.00
10009456 $53,200.00 $53,200.00
10009457 $101,250.00 $101,250.00
10009458 $56,250.00 $56,250.00
10009460 $39,750.00 $39,750.00
10009463 $102,600.00 $102,600.00
10009464 $56,160.00 $56,160.00
10009465 $39,990.00 $39,990.00
10009467 $95,000.00 $95,000.00
10009468 $50,400.00 $50,400.00
10009469 $118,000.00 $118,000.00
Page 13
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009470 $29,000.00 $29,000.00
10009472 $45,800.00 $45,800.00
10009474 $46,500.00 $46,489.37
10009475 $45,800.00 $45,800.00
10009477 $20,070.00 $20,070.00
10009478 $20,500.00 $20,500.00
10009480 $172,500.00 $172,500.00
10009481 $144,000.00 $144,000.00
10009482 $64,500.00 $64,500.00
10009483 $227,350.00 $227,350.00
10009484 $85,000.00 $85,000.00
10009485 $60,000.00 $60,000.00
10009486 $49,000.00 $49,000.00
10009487 $30,000.00 $30,000.00
10009490 $118,750.00 $118,750.00
10009491 $63,000.00 $63,000.00
10009494 $38,000.00 $38,000.00
10009495 $84,600.00 $84,600.00
10009499 $21,500.00 $21,500.00
10009501 $17,000.00 $17,000.00
10009504 $73,800.00 $73,800.00
10009505 $60,650.00 $60,650.00
10009506 $69,000.00 $69,000.00
10009510 $172,000.00 $172,000.00
10009511 $27,700.00 $27,700.00
10009512 $52,500.00 $52,500.00
10009513 $69,000.00 $69,000.00
10009514 $42,000.00 $42,000.00
10009515 $49,000.00 $49,000.00
10009516 $19,891.00 $19,891.00
10009517 $84,300.00 $84,300.00
10009518 $45,000.00 $45,000.00
10009521 $13,500.00 $13,500.00
10009528 $83,000.00 $83,000.00
10009529 $63,900.00 $63,900.00
10009531 $35,700.00 $35,700.00
10009532 $36,000.00 $36,000.00
10009533 $66,400.00 $66,400.00
10009536 $20,000.00 $20,000.00
10009541 $63,750.00 $63,750.00
10009542 $87,550.00 $87,550.00
10009544 $100,000.00 $100,000.00
10009545 $60,000.00 $60,000.00
10009548 $30,400.00 $30,400.00
10009549 $45,000.00 $45,000.00
10009550 $38,400.00 $38,400.00
Page 14
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009551 $28,082.00 $28,082.00
10009552 $17,500.00 $17,500.00
10009553 $63,000.00 $63,000.00
10009555 $52,000.00 $52,000.00
10009556 $24,150.00 $24,150.00
10009557 $101,200.00 $101,200.00
10009558 $60,000.00 $60,000.00
10009564 $61,000.00 $61,000.00
10009565 $98,000.00 $98,000.00
10009567 $35,000.00 $35,000.00
10009568 $150,000.00 $150,000.00
10009571 $60,000.00 $60,000.00
10009572 $54,000.00 $54,000.00
10009574 $200,000.00 $200,000.00
10009577 $25,000.00 $25,000.00
10009579 $153,600.00 $153,600.00
10009582 $69,350.00 $69,350.00
10009583 $42,700.00 $42,700.00
10009586 $70,300.00 $70,300.00
10009587 $225,000.00 $225,000.00
10009588 $48,000.00 $48,000.00
10009591 $112,500.00 $112,500.00
10009592 $105,000.00 $105,000.00
10009594 $125,361.00 $125,361.00
10009597 $54,600.00 $54,600.00
10009598 $86,500.00 $86,500.00
10009599 $35,000.00 $35,000.00
10009600 $81,000.00 $81,000.00
10009601 $45,600.00 $45,600.00
10009602 $48,000.00 $48,000.00
10009604 $51,700.00 $51,700.00
10009609 $92,000.00 $92,000.00
10009610 $110,400.00 $110,400.00
10009611 $33,400.00 $33,400.00
10009612 $48,000.00 $48,000.00
10009620 $39,000.00 $39,000.00
10009621 $58,900.00 $58,900.00
10009623 $30,400.00 $30,400.00
10009624 $56,000.00 $56,000.00
10009626 $100,500.00 $100,500.00
10009627 $194,400.00 $194,400.00
10009632 $79,300.00 $79,300.00
10009640 $15,000.00 $15,000.00
10009645 $70,000.00 $70,000.00
10009653 $54,500.00 $54,500.00
10009655 $123,200.00 $123,200.00
Page 15
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
10009656 $43,500.00 $43,500.00
10009660 $25,350.00 $25,350.00
10009666 $100,000.00 $100,000.00
10009669 $99,500.00 $99,500.00
10009672 $58,600.00 $58,600.00
10009674 $78,400.00 $78,400.00
10009675 $37,700.00 $37,700.00
10009679 $113,000.00 $113,000.00
10009680 $40,500.00 $40,500.00
10009683 $34,000.00 $34,000.00
10009685 $45,650.00 $45,650.00
10300001 $76,000.00 $76,000.00
12500011 $128,000.00 $127,855.95
12900003 $35,000.00 $34,987.51
12900004 $192,000.00 $191,074.93
12900005 $41,600.00 $41,600.00
14400004 $168,000.00 $167,729.75
15900005 $101,750.00 $101,677.11
15900006 $99,000.00 $98,899.63
15900007 $169,600.00 $169,532.60
16300017 $86,000.00 $86,000.00
17200001 $52,900.00 $52,854.23
17300006 $72,000.00 $71,974.32
21100475 $208,000.00 $207,907.79
21100493 $114,750.00 $114,653.33
21100505 $212,500.00 $212,419.99
21100520 $140,000.00 $139,937.93
21100527 $65,000.00 $64,968.36
21100528 $420,000.00 $419,804.05
21100532 $375,000.00 $374,834.10
21100535 $50,000.00 $49,984.87
21100536 $69,600.00 $69,572.34
21100537 $78,750.00 $78,728.68
21100538 $56,000.00 $55,970.97
21100539 $100,500.00 $100,453.10
21100540 $88,000.00 $87,958.94
21100542 $47,000.00 $46,896.53
21100544 $41,000.00 $40,987.59
21100545 $60,000.00 $59,855.24
21100546 $45,500.00 $45,486.23
21100547 $108,000.00 $107,946.88
21100549 $55,000.00 $54,974.34
21100550 $64,000.00 $63,852.54
21200002 $115,000.00 $114,435.44
22800002 $255,000.00 $255,000.00
23400002 $93,000.00 $92,974.83
Page 16
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
23500001 $114,000.00 $113,821.32
23500002 $35,000.00 $34,945.13
23500003 $69,600.00 $69,528.84
23500004 $39,000.00 $38,957.43
23500005 $68,100.00 $68,018.09
23500006 $42,000.00 $41,937.53
23500007 $270,000.00 $269,576.81
23500008 $91,500.00 $88,963.55
23500009 $51,000.00 $50,924.13
23500010 $102,000.00 $101,888.67
23500011 $79,000.00 $78,067.84
23500012 $52,500.00 $52,440.16
23500013 $112,000.00 $111,898.51
23500014 $90,000.00 $89,891.75
23500016 $52,800.00 $52,751.61
23500017 $61,400.00 $61,296.49
23500026 $71,400.00 $71,162.05
23500036 $115,000.00 $114,740.80
23500039 $148,000.00 $147,597.44
23500041 $20,400.00 $20,385.83
23700001 $241,000.00 $237,621.74
24000001 $122,850.00 $122,810.73
24000003 $73,600.00 $73,573.17
24000004 $64,000.00 $63,984.07
24000006 $54,000.00 $53,982.74
24000014 $36,350.00 $36,339.30
24000015 $83,100.00 $83,075.00
24000033 $51,100.00 $51,088.89
24000039 $85,000.00 $84,966.40
24000040 $76,000.00 $75,966.37
24000044 $25,000.00 $24,936.13
24000045 $77,000.00 $76,838.78
24000063 $30,000.00 $29,990.67
24000064 $108,400.00 $108,368.98
24200003 $247,600.00 $247,191.20
24200004 $304,000.00 $303,498.10
24200008 $52,000.00 $51,975.09
24300038 $75,500.00 $75,429.25
24300040 $33,000.00 $32,972.92
24300041 $238,450.00 $238,232.43
24300042 $57,500.00 $57,478.92
24300043 $50,000.00 $49,731.13
24300044 $12,500.00 $12,474.95
24300047 $33,000.00 $32,988.20
24300048 $41,400.00 $41,361.41
24300049 $32,000.00 $31,985.07
Page 17
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
24300050 $38,100.00 $38,072.69
24300051 $25,000.00 $24,942.40
24300058 $66,000.00 $65,985.74
24300060 $160,000.00 $159,912.60
24900005 $98,000.00 $97,892.53
24900006 $109,900.00 $109,709.88
24900007 $164,000.00 $163,923.49
24900008 $102,400.00 $102,400.00
24900009 $104,800.00 $104,800.00
24900010 $104,800.00 $104,800.00
25100001 $166,500.00 $166,500.00
25300001 $157,500.00 $157,422.52
25300002 $120,000.00 $119,871.79
25400003 $73,600.00 $73,191.68
25400005 $42,600.00 $42,600.00
25600003 $255,000.00 $254,649.57
25600007 $40,000.00 $39,946.46
25600008 $104,000.00 $103,865.05
25600010 $85,500.00 $85,373.42
25600011 $139,200.00 $139,123.97
25600013 $152,100.00 $152,030.90
25600014 $97,000.00 $96,961.45
25600015 $90,000.00 $89,967.91
26000002 $47,000.00 $46,818.13
26000003 $43,200.00 $43,092.02
26000004 $160,200.00 $160,061.42
26000006 $42,000.00 $41,234.89
26000007 $45,080.00 $45,043.00
26000008 $50,400.00 $50,182.94
26000009 $31,500.00 $31,476.03
26000014 $33,000.00 $32,774.61
26000015 $59,500.00 $59,290.52
26000016 $36,650.00 $36,595.39
26000017 $46,750.00 $46,714.98
26000019 $21,150.00 $21,004.20
26000020 $31,850.00 $31,835.18
26000021 $121,050.00 $120,984.87
26000022 $22,500.00 $22,409.34
26000023 $21,000.00 $20,801.05
26000024 $26,350.00 $25,958.11
26000025 $31,200.00 $31,185.48
26000026 $20,400.00 $20,260.66
26000028 $17,500.00 $17,277.36
26000029 $48,280.00 $48,065.66
26000030 $21,000.00 $20,622.88
26000031 $33,800.00 $33,784.19
Page 18
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
26000032 $25,500.00 $25,325.26
26000033 $58,000.00 $57,938.05
26000034 $26,625.00 $26,600.68
26000035 $49,410.00 $49,370.78
26000036 $25,875.00 $25,862.35
26000037 $26,250.00 $26,223.06
26000040 $23,400.00 $23,212.10
26000043 $39,600.00 $39,380.72
26000044 $31,125.00 $30,910.75
26000045 $17,430.00 $17,361.41
26000047 $30,712.00 $30,412.99
26000048 $35,250.00 $35,216.30
26000049 $22,500.00 $22,265.97
26000050 $54,375.00 $53,556.95
26000052 $29,250.00 $29,232.67
26000055 $54,400.00 $54,242.59
26000057 $62,550.00 $62,413.11
26000059 $64,875.00 $64,747.03
26000060 $130,200.00 $130,152.30
26000065 $72,800.00 $72,760.65
26000066 $68,000.00 $67,959.11
26000068 $56,000.00 $55,967.43
26000069 $13,000.00 $12,953.12
26000070 $72,000.00 $71,974.32
26000071 $16,100.00 $16,027.61
26000072 $76,000.00 $75,972.83
26000073 $34,300.00 $34,224.38
26000074 $69,300.00 $69,223.57
26000075 $32,000.00 $31,970.65
26000077 $27,930.00 $27,919.29
26000078 $53,200.00 $53,131.96
26000079 $21,000.00 $20,921.15
26000080 $30,000.00 $29,713.95
26000082 $144,000.00 $143,931.11
26000083 $51,000.00 $50,907.11
26000084 $51,000.00 $50,966.14
26000085 $51,300.00 $51,274.48
26000086 $83,300.00 $82,909.10
26000087 $25,000.00 $24,917.22
26000088 $33,600.00 $33,560.14
26000089 $42,800.00 $42,781.38
26000090 $112,000.00 $111,549.98
26000091 $25,925.00 $25,909.58
26000092 $25,000.00 $24,965.94
26000093 $16,250.00 $16,227.26
26000094 $59,925.00 $59,881.12
Page 19
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
26000095 $21,000.00 $20,878.32
26000096 $31,500.00 $31,495.55
26000097 $81,000.00 $80,976.82
26000099 $96,000.00 $95,972.22
26000101 $21,250.00 $21,228.82
26000102 $24,100.00 $24,018.39
26000103 $59,000.00 $58,922.19
26000104 $62,800.00 $62,781.82
26000105 $66,300.00 $66,281.02
26000106 $91,200.00 $91,164.62
26000119 $56,950.00 $56,950.00
26000120 $45,500.00 $45,418.01
26000122 $26,350.00 $26,301.48
26000124 $35,200.00 $35,190.89
26000125 $75,000.00 $74,933.35
26000126 $143,550.00 $143,550.00
26000127 $28,500.00 $28,482.86
26000128 $51,100.00 $51,090.90
26000131 $76,410.00 $76,381.54
26000133 $38,200.00 $38,200.00
26000134 $61,600.00 $61,481.30
26000140 $56,950.00 $56,803.52
26000141 $82,500.00 $82,397.08
26000142 $51,850.00 $51,832.86
26000144 $50,400.00 $50,400.00
26000149 $77,400.00 $77,374.56
26000150 $18,750.00 $18,580.09
26000153 $46,750.00 $46,750.00
26000156 $31,875.00 $31,803.73
26000158 $54,000.00 $53,979.33
26000160 $16,250.00 $16,250.00
26000161 $30,250.00 $30,250.00
26000164 $18,900.00 $18,894.00
26000169 $52,800.00 $52,773.00
26000170 $15,040.00 $15,008.43
26000171 $53,100.00 $53,067.00
26500002 $213,750.00 $213,470.54
26500003 $96,050.00 $95,988.33
26500004 $181,000.00 $180,796.30
26500005 $59,000.00 $58,779.79
26500006 $75,000.00 $74,963.11
26800003 $74,150.00 $74,108.43
26800005 $49,700.00 $49,670.65
27100001 $131,040.00 $130,949.13
27100003 $57,500.00 $57,482.61
27100005 $20,000.00 $19,991.41
Page 20
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
27100006 $130,475.00 $130,435.53
27100010 $30,400.00 $30,392.00
27100012 $43,800.00 $43,787.43
27100013 $200,000.00 $199,937.47
27100015 $38,900.00 $38,889.35
27100017 $70,650.00 $70,629.32
27100018 $28,000.00 $27,991.99
27100019 $37,000.00 $36,987.00
27100020 $76,000.00 $75,977.51
27100021 $97,750.00 $97,717.00
27100022 $53,550.00 $53,507.24
27100023 $56,000.00 $55,977.25
27100024 $107,865.00 $107,829.37
27100025 $23,000.00 $22,994.04
27100026 $89,200.00 $89,166.41
27100027 $83,300.00 $83,278.67
27100028 $49,500.00 $49,485.03
27100030 $65,880.00 $65,862.16
27100032 $84,350.00 $84,276.58
27100033 $40,600.00 $40,516.78
27100034 $67,500.00 $67,479.59
27100035 $69,600.00 $69,582.97
27100036 $107,950.00 $107,839.51
27100037 $111,000.00 $110,967.88
27100038 $112,200.00 $112,149.83
27100039 $90,000.00 $89,978.71
27100042 $51,000.00 $50,894.71
27100043 $45,000.00 $44,944.78
27100044 $266,000.00 $265,844.38
27100045 $110,000.00 $109,879.93
27100047 $72,000.00 $71,939.34
27100049 $47,200.00 $47,115.63
27100050 $181,800.00 $181,591.32
27100051 $96,300.00 $96,230.86
27100053 $85,500.00 $85,152.74
27100055 $27,750.00 $27,717.90
27100056 $28,125.00 $28,092.00
27100058 $36,000.00 $35,825.56
27200001 $105,600.00 $105,515.69
27200002 $105,600.00 $105,515.69
27700002 $335,000.00 $333,292.17
27700003 $99,000.00 $98,960.66
27900003 $99,400.00 $99,310.67
27900005 $208,000.00 $207,794.57
28400001 $172,800.00 $172,568.76
28400002 $48,600.00 $48,336.34
Page 21
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
28400003 $62,400.00 $61,907.91
28400004 $53,900.00 $53,876.15
28700001 $90,000.00 $89,780.36
28800006 $30,150.00 $29,872.22
28800008 $50,000.00 $50,000.00
30500001 $209,000.00 $208,804.20
30500002 $187,500.00 $187,500.00
30700001 $325,000.00 $324,898.95
31300008 $133,000.00 $132,310.82
31300065 $188,000.00 $185,608.66
31300068 $37,000.00 $36,496.84
31300089 $107,200.00 $106,848.67
31300092 $102,150.00 $101,867.58
31300127 $127,600.00 $127,186.23
31300137 $104,700.00 $104,310.43
31300196 $71,200.00 $70,315.07
31300245 $63,200.00 $62,757.57
31600002 $46,900.00 $46,797.05
31600010 $212,500.00 $211,662.88
31600036 $75,000.00 $74,931.27
31600042 $148,750.00 $148,550.50
31600061 $123,250.00 $122,982.93
31800008 $17,600.00 $17,579.83
31800012 $56,000.00 $55,895.86
31800032 $31,900.00 $30,523.93
31800033 $68,750.00 $68,649.60
31800036 $34,125.00 $33,756.61
31800043 $71,800.00 $71,656.34
32000003 $121,500.00 $121,337.07
32000006 $88,200.00 $88,019.71
32000008 $54,000.00 $53,927.57
32000010 $111,500.00 $111,166.26
32000011 $146,700.00 $146,557.99
32000014 $54,800.00 $54,690.76
32000019 $101,250.00 $101,038.46
32000020 $63,700.00 $63,625.81
32000021 $60,000.00 $59,923.87
32000024 $122,950.00 $122,757.30
32000025 $87,500.00 $87,164.62
32000036 $95,000.00 $94,914.52
32000045 $61,750.00 $61,716.20
32000051 $61,000.00 $60,478.20
32000052 $78,750.00 $78,720.34
32000054 $117,000.00 $116,951.77
33700001 $137,200.00 $137,200.00
33700004 $115,000.00 $114,934.51
Page 22
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
33700007 $44,625.00 $44,611.10
33700009 $56,000.00 $56,000.00
33700011 $75,000.00 $75,000.00
33700012 $46,800.00 $46,800.00
33700013 $91,000.00 $90,941.85
33700015 $61,000.00 $61,000.00
33700019 $69,000.00 $68,925.35
33700022 $150,000.00 $150,000.00
33700023 $135,000.00 $134,926.11
33700025 $60,000.00 $60,000.00
33700029 $28,000.00 $28,000.00
33800001 $97,000.00 $96,737.40
34400001 $173,850.00 $173,850.00
35300002 $210,400.00 $210,285.07
35300003 $198,000.00 $197,921.32
35400013 $55,900.00 $55,880.07
36200001 $75,000.00 $74,918.43
36200002 $90,000.00 $89,957.56
36200003 $39,650.00 $39,601.61
36200004 $107,500.00 $107,327.95
36200005 $58,500.00 $58,479.81
36200006 $150,000.00 $149,730.65
36200007 $109,600.00 $108,391.38
36200008 $112,200.00 $112,097.08
36200009 $56,800.00 $55,938.17
36200010 $34,400.00 $34,367.42
36200011 $15,600.00 $15,589.31
36200012 $192,000.00 $179,327.19
36200014 $189,200.00 $189,031.54
36200015 $92,000.00 $91,870.87
36200017 $185,000.00 $184,727.72
36200019 $236,250.00 $236,029.89
36200020 $136,000.00 $135,729.23
36200021 $126,400.00 $126,199.65
36200022 $77,520.00 $77,382.56
36200023 $175,500.00 $175,282.03
36200024 $38,600.00 $38,379.11
36200025 $166,000.00 $164,169.45
36200026 $50,000.00 $49,935.03
36200028 $121,500.00 $121,375.78
36200029 $29,500.00 $29,291.47
36200031 $107,000.00 $106,804.19
36200032 $126,000.00 $125,854.86
36200033 $150,000.00 $148,890.16
36200034 $95,400.00 $95,252.80
36200035 $113,600.00 $112,380.14
Page 23
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
36200036 $500,000.00 $499,633.91
36200037 $59,500.00 $58,841.32
36200038 $24,000.00 $23,764.41
36200039 $24,000.00 $23,764.41
36200040 $48,750.00 $48,714.68
36200041 $140,250.00 $140,156.92
36200042 $100,400.00 $100,255.29
36200043 $57,400.00 $57,293.88
36200044 $65,000.00 $64,854.86
36200045 $37,500.00 $37,311.54
36200046 $90,695.00 $90,604.47
36200047 $71,825.00 $71,370.43
36200049 $123,000.00 $122,917.47
36200050 $40,000.00 $39,965.20
36200051 $45,750.00 $45,391.04
36200052 $112,000.00 $111,892.82
36200053 $251,600.00 $251,374.07
36200054 $59,400.00 $58,784.51
36200055 $107,955.00 $107,755.32
36200056 $96,300.00 $96,194.91
36200057 $162,000.00 $161,321.43
36200058 $153,000.00 $152,884.27
36200059 $37,500.00 $37,465.97
36200060 $36,000.00 $35,972.17
36200061 $37,000.00 $36,977.49
36200062 $78,000.00 $77,781.10
36200063 $174,600.00 $174,427.54
36200064 $150,000.00 $149,882.80
36200065 $100,000.00 $99,918.44
36200066 $42,700.00 $42,252.30
36200067 $82,500.00 $82,436.23
36200068 $176,000.00 $175,738.23
36200069 $74,000.00 $73,457.42
36200070 $50,000.00 $49,951.64
36200071 $129,000.00 $128,851.00
36200072 $71,400.00 $71,362.20
36200073 $166,000.00 $165,148.59
36200074 $99,000.00 $98,931.35
36200075 $262,000.00 $261,703.61
36200076 $160,000.00 $158,755.87
36200077 $76,800.00 $76,396.21
36200078 $34,000.00 $33,743.81
36200079 $119,000.00 $118,418.08
36200080 $114,000.00 $113,896.53
36200081 $288,000.00 $287,706.44
36200082 $180,200.00 $180,060.73
Page 24
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
36200083 $67,500.00 $67,459.42
36200084 $107,000.00 $106,766.49
36200085 $107,000.00 $106,497.89
36200086 $196,000.00 $195,052.45
36200087 $53,600.00 $53,351.91
36200088 $113,600.00 $113,553.37
36200089 $54,400.00 $54,132.77
36200090 $90,000.00 $89,522.53
36200091 $62,000.00 $61,972.51
36200092 $95,250.00 $95,167.16
36200093 $94,000.00 $93,737.84
36200094 $64,800.00 $64,737.99
36200095 $95,000.00 $94,947.56
36200096 $152,000.00 $151,927.56
36200097 $84,000.00 $83,624.48
36200098 $183,000.00 $182,900.04
36200099 $186,295.00 $186,227.84
36200101 $253,200.00 $253,104.68
36200102 $107,000.00 $106,951.64
36200103 $112,000.00 $111,703.74
36200104 $61,100.00 $61,060.75
36200105 $368,000.00 $367,024.82
36200106 $54,000.00 $53,935.74
36200107 $41,000.00 $40,913.99
50300329 $272,000.00 $271,206.00
50300336 $346,000.00 $345,062.02
50300349 $212,000.00 $211,530.74
50300370 $316,000.00 $312,818.37
50300374 $74,400.00 $74,289.32
50300379 $140,000.00 $139,746.59
50300384 $100,800.00 $100,650.05
50300390 $117,000.00 $116,821.35
50300397 $86,250.00 $86,207.57
50300401 $30,000.00 $30,000.00
51110886 $131,950.00 $131,812.66
51110887 $131,200.00 $131,063.43
51110888 $120,350.00 $120,231.13
51110889 $169,200.00 $169,123.12
64500417 $231,000.00 $231,000.00
65500800 $44,000.00 $43,949.84
69700075 $115,500.00 $115,309.34
69700076 $130,200.00 $129,985.04
69700077 $91,000.00 $90,849.75
69700078 $137,600.00 $137,287.99
69700082 $49,600.00 $49,572.91
72001764 $89,700.00 $89,599.75
Page 25
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
73400007 $101,660.00 $101,576.64
73400009 $82,000.00 $82,000.00
73700356 $135,200.00 $135,146.27
73700357 $67,500.00 $67,472.44
73700358 $68,500.00 $68,500.00
74400664 $379,974.64 $377,687.52
74400666 $265,498.93 $262,545.79
74400667 $275,071.22 $273,943.80
74400669 $246,049.76 $244,841.38
74400675 $249,782.62 $248,625.49
74400685 $271,199.11 $269,492.34
74400686 $269,993.95 $268,771.57
74400688 $359,571.50 $357,997.04
74400692 $319,400.25 $318,161.42
74400694 $252,641.86 $251,539.46
74400709 $269,286.64 $268,331.07
74400714 $265,042.79 $264,106.00
74400715 $131,107.94 $130,818.13
74400721 $128,748.37 $128,172.25
74400722 $177,858.09 $176,438.74
74400724 $110,628.33 $110,313.10
74400725 $194,862.21 $194,298.14
74400726 $128,908.37 $128,576.43
74400727 $58,003.79 $57,879.20
74400728 $129,023.35 $128,470.90
74400736 $240,926.98 $239,955.14
74800130 $84,000.00 $83,961.84
76000033 $130,000.00 $128,914.33
78000728 $102,600.00 $102,562.40
83500186 $55,250.00 $55,198.23
83500187 $250,320.00 $250,209.26
84300056 $311,500.00 $311,090.66
84300057 $101,500.00 $101,500.00
84400104 $258,750.00 $258,068.89
84400111 $56,700.00 $56,276.66
84400112 $86,000.00 $85,927.55
84400113 $148,000.00 $147,837.71
84400114 $100,000.00 $99,744.55
84400115 $102,000.00 $101,953.66
84400116 $176,000.00 $175,920.04
84400117 $130,000.00 $129,939.35
84400118 $79,200.00 $79,169.36
84400119 $217,000.00 $217,000.00
87700166 $315,000.00 $314,104.53
87700182 $127,400.00 $127,286.80
87700183 $255,200.00 $254,941.25
Page 26
<PAGE>
Saxon Asset Securities Company, 1997-2
Fixed Rate Group
Loan Number Original Amount Current Balance
87700185 $182,800.00 $182,657.95
88400004 $152,750.00 $152,685.95
88700022 $200,000.00 $200,000.00
89000115 $324,000.00 $322,972.57
89000123 $264,000.00 $261,369.14
89000126 $97,500.00 $97,500.00
89100028 $360,000.00 $358,975.86
91200020 $35,000.00 $35,000.00
91700031 $75,000.00 $74,936.82
93100024 $18,950.00 $18,946.13
94000048 $58,100.00 $58,045.57
94000062 $100,000.00 $99,890.33
94000063 $166,300.00 $166,148.26
94000064 $30,400.00 $30,386.18
94000065 $67,100.00 $67,071.10
94000066 $53,000.00 $52,978.93
94400064 $45,000.00 $44,965.95
94400065 $218,000.00 $217,839.53
94400066 $125,000.00 $124,882.90
94400068 $87,900.00 $87,854.54
94400069 $276,000.00 $275,302.94
94400070 $24,000.00 $24,000.00
94500021 $167,250.00 $167,169.87
94700026 $123,920.00 $123,797.60
95100106 $30,000.00 $29,800.24
95100107 $31,200.00 $31,157.13
95100108 $35,100.00 $35,067.97
95100109 $153,900.00 $153,783.59
95100110 $60,750.00 $60,727.36
95100111 $102,050.00 $102,009.44
95100112 $40,000.00 $40,000.00
95300034 $60,000.00 $59,908.19
95300036 $95,600.00 $95,449.51
95300037 $115,400.00 $115,279.88
95300038 $100,000.00 $99,913.49
95300039 $106,800.00 $106,693.09
95300040 $104,400.00 $104,400.00
95500153 $260,000.00 $259,350.35
95500154 $450,000.00 $450,000.00
98300005 $67,000.00 $66,959.28
98300015 $113,600.00 $113,567.50
98300025 $34,775.00 $34,757.59
98300031 $48,000.00 $47,989.02
98300042 $34,300.00 $34,293.39
98300043 $25,700.00 $25,693.04
- -------- ----------
1241 $119,452,993.79
Page 27
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10007318 $42,000.00 $41,856.09
10007885 $118,720.00 $118,398.15
10008345 $190,400.00 $190,124.17
10008349 $115,500.00 $115,388.19
10008390 $118,000.00 $117,700.87
10008410 $108,000.00 $107,939.45
10008495 $195,000.00 $194,633.84
10008504 $55,000.00 $54,913.60
10008515 $135,000.00 $134,809.50
10008517 $344,000.00 $343,420.32
10008524 $380,000.00 $380,000.00
10008527 $135,000.00 $134,783.44
10008536 $168,000.00 $167,876.32
10008538 $90,000.00 $89,893.35
10008539 $140,000.00 $139,850.42
10008540 $126,000.00 $125,731.49
10008546 $212,000.00 $211,790.61
10008549 $86,600.00 $86,509.86
10008550 $150,000.00 $149,798.02
10008553 $76,500.00 $76,438.92
10008562 $61,500.00 $61,423.29
10008569 $79,800.00 $79,188.16
10008577 $162,480.00 $162,206.21
10008578 $336,000.00 $335,433.82
10008582 $71,550.00 $71,504.06
10008583 $102,400.00 $102,156.42
10008588 $97,000.00 $96,901.64
10008591 $78,000.00 $77,888.49
10008597 $125,000.00 $124,927.56
10008603 $500,000.00 $499,567.46
10008604 $111,200.00 $111,098.00
10008613 $37,200.00 $37,171.10
10008614 $108,750.00 $108,550.41
10008618 $85,500.00 $85,411.00
10008623 $228,000.00 $227,729.81
10008625 $53,975.00 $53,947.24
10008633 $70,200.00 $70,158.49
10008638 $328,500.00 $328,208.14
10008640 $90,000.00 $89,889.52
10008642 $152,000.00 $151,885.02
10008644 $220,000.00 $219,771.00
10008649 $112,000.00 $111,886.43
10008651 $88,900.00 $88,802.52
10008653 $144,800.00 $144,605.04
10008654 $167,250.00 $167,097.41
10008657 $126,400.00 $126,284.68
Page 1
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10008664 $110,500.00 $110,308.85
10008669 $119,000.00 $118,894.27
10008672 $108,380.00 $108,314.12
10008673 $104,800.00 $104,718.58
10008678 $110,500.00 $110,399.17
10008681 $232,000.00 $231,717.90
10008685 $200,900.00 $200,774.47
10008691 $527,000.00 $526,234.73
10008693 $160,000.00 $159,854.02
10008694 $244,500.00 $244,126.77
10008700 $69,900.00 $69,853.87
10008701 $480,700.00 $479,909.64
10008703 $306,900.00 $306,572.12
10008705 $310,000.00 $309,623.07
10008708 $37,600.00 $37,254.89
10008713 $152,150.00 $151,996.69
10008715 $65,400.00 $65,320.48
10008718 $44,100.00 $44,068.42
10008726 $454,300.00 $453,656.65
10008730 $44,000.00 $43,963.92
10008733 $132,000.00 $131,855.17
10008736 $482,600.00 $482,028.08
10008745 $188,000.00 $187,793.84
10008747 $248,000.00 $247,575.08
10008751 $148,750.00 $148,599.17
10008753 $64,000.00 $63,946.11
10008755 $86,900.00 $86,790.53
10008756 $160,000.00 $159,850.09
10008759 $190,000.00 $189,812.35
10008764 $155,100.00 $154,920.88
10008765 $45,200.00 $45,149.13
10008770 $138,300.00 $138,166.95
10008771 $108,000.00 $107,855.34
10008780 $54,375.00 $54,321.94
10008783 $165,900.00 $165,748.64
10008787 $229,500.00 $229,284.98
10008791 $121,000.00 $120,922.29
10008792 $76,000.00 $75,928.79
10008799 $105,000.00 $104,887.83
10008803 $562,500.00 $561,914.52
10008809 $73,600.00 $73,556.49
10008811 $200,000.00 $199,848.74
10008813 $95,600.00 $95,446.64
10008818 $220,000.00 $219,793.88
10008821 $218,700.00 $218,624.12
10008823 $84,394.00 $84,314.94
Page 2
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10008824 $373,500.00 $372,870.63
10008825 $58,400.00 $58,353.38
10008829 $128,000.00 $127,866.78
10008830 $717,000.00 $716,082.45
10008833 $39,000.00 $38,978.78
10008834 $100,800.00 $100,683.60
10008839 $456,000.00 $455,231.61
10008841 $83,200.00 $83,133.43
10008844 $77,600.00 $77,555.38
10008845 $121,500.00 $121,397.67
10008852 $117,600.00 $117,464.18
10008856 $496,000.00 $495,522.85
10008857 $199,200.00 $199,003.26
10008867 $96,600.00 $96,482.30
10008869 $115,000.00 $114,889.37
10008871 $176,000.00 $175,688.57
10008872 $104,500.00 $104,399.47
10008874 $407,000.00 $406,479.15
10008878 $91,800.00 $91,695.38
10008882 $206,400.00 $206,100.27
10008883 $130,000.00 $129,949.71
10008884 $72,000.00 $71,394.07
10008885 $80,000.00 $79,963.65
10008886 $58,500.00 $58,423.20
10008887 $112,000.00 $111,915.29
10008891 $135,000.00 $134,848.08
10008895 $58,500.00 $58,412.90
10008903 $525,000.00 $524,136.81
10008904 $92,000.00 $91,888.14
10008907 $310,000.00 $309,632.63
10008908 $47,600.00 $47,554.22
10008909 $263,300.00 $263,046.72
10008912 $296,000.00 $295,750.68
10008913 $70,775.00 $70,697.39
10008914 $64,200.00 $64,136.58
10008916 $324,500.00 $324,259.18
10008918 $437,480.00 $437,191.22
10008919 $77,400.00 $77,323.56
10008920 $55,000.00 $54,978.14
10008922 $70,000.00 $69,968.20
10008925 $66,800.00 $66,774.15
10008930 $1,520,000.00 $1,519,271.83
10008932 $590,000.00 $589,539.74
10008944 $414,000.00 $413,816.85
10008945 $66,000.00 $65,970.02
10008951 $103,550.00 $103,494.89
Page 3
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10008952 $158,000.00 $157,911.42
10008953 $118,400.00 $118,330.10
10008954 $75,000.00 $74,972.52
10008961 $134,425.00 $134,239.38
10008963 $113,250.00 $113,189.73
10008966 $84,450.00 $84,411.63
10008968 $191,992.00 $191,992.00
10008969 $116,000.00 $115,931.51
10008971 $34,500.00 $34,462.17
10008974 $70,000.00 $69,939.44
10008976 $225,000.00 $224,886.37
10008981 $99,500.00 $99,412.33
10008983 $81,812.00 $81,776.76
10008984 $55,100.00 $55,074.96
10008993 $157,000.00 $156,856.75
10008994 $157,000.00 $156,809.11
10008995 $176,000.00 $175,890.60
10008996 $266,500.00 $266,275.53
10008997 $175,000.00 $174,508.70
10009000 $133,200.00 $133,123.37
10009003 $249,600.00 $249,128.11
10009007 $119,000.00 $118,945.94
10009009 $92,000.00 $91,967.19
10009011 $105,000.00 $104,953.55
10009014 $80,000.00 $79,963.65
10009019 $700,000.00 $699,308.65
10009020 $70,000.00 $69,945.40
10009023 $500,000.00 $499,772.84
10009028 $248,000.00 $247,860.97
10009033 $123,550.00 $123,478.92
10009035 $170,000.00 $169,922.76
10009036 $246,000.00 $245,826.38
10009040 $204,000.00 $203,902.27
10009043 $28,800.00 $28,784.27
10009045 $78,750.00 $78,641.46
10009047 $187,000.00 $186,917.27
10009057 $219,900.00 $219,805.29
10009058 $63,750.00 $63,723.27
10009059 $191,250.00 $191,142.78
10009060 $157,250.00 $157,201.11
10009063 $275,000.00 $274,914.50
10009065 $60,000.00 $59,966.36
10009072 $225,000.00 $224,877.10
10009073 $128,350.00 $128,301.68
10009075 $44,000.00 $43,982.04
10009079 $59,750.00 $59,724.26
Page 4
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10009080 $175,000.00 $174,945.59
10009081 $48,600.00 $48,584.89
10009086 $33,750.00 $33,734.66
10009087 $230,250.00 $230,130.63
10009092 $137,700.00 $137,618.70
10009096 $32,800.00 $32,789.51
10009101 $716,000.00 $715,566.25
10009103 $470,000.00 $469,774.84
10009104 $68,000.00 $67,976.40
10009107 $300,000.00 $299,820.18
10009108 $127,400.00 $127,284.94
10009110 $112,500.00 $112,433.58
10009111 $131,250.00 $131,170.48
10009128 $110,400.00 $110,333.12
10009134 $142,400.00 $142,320.16
10009141 $162,000.00 $161,901.25
10009154 $127,500.00 $127,452.00
10009165 $232,000.00 $231,891.76
10009167 $50,000.00 $49,980.13
10009168 $68,600.00 $68,472.92
10009169 $128,250.00 $128,206.70
10009170 $83,300.00 $83,257.93
10009174 $112,250.00 $112,194.79
10009176 $108,200.00 $108,153.39
10009177 $50,000.00 $49,984.88
10009179 $161,000.00 $160,953.93
10009183 $226,000.00 $225,873.30
10009185 $65,750.00 $65,714.09
10009197 $80,000.00 $79,968.21
10009200 $160,000.00 $159,927.31
10009203 $62,500.00 $62,475.83
10009205 $231,250.00 $231,144.93
10009208 $70,000.00 $69,972.01
10009209 $133,500.00 $133,434.33
10009214 $356,200.00 $356,038.16
10009215 $124,000.00 $123,935.71
10009216 $133,200.00 $132,989.63
10009219 $181,600.00 $181,531.63
10009220 $115,000.00 $114,369.84
10009222 $97,750.00 $97,701.91
10009224 $83,900.00 $83,767.97
10009225 $204,000.00 $203,904.82
10009231 $121,450.00 $121,450.00
10009233 $171,000.00 $170,529.56
10009234 $206,500.00 $206,384.23
10009236 $113,400.00 $113,368.44
Page 5
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10009237 $79,900.00 $79,860.70
10009238 $165,600.00 $165,452.86
10009243 $83,000.00 $82,956.97
10009244 $52,500.00 $52,479.69
10009245 $153,000.00 $152,948.34
10009247 $128,000.00 $127,928.24
10009250 $156,000.00 $155,929.13
10009254 $148,800.00 $148,714.39
10009256 $140,000.00 $139,929.30
10009260 $141,300.00 $141,234.07
10009263 $50,000.00 $49,976.67
10009265 $75,500.00 $75,471.57
10009266 $58,300.00 $58,300.00
10009267 $40,000.00 $39,986.48
10009269 $192,000.00 $191,877.57
10009270 $65,000.00 $64,968.02
10009271 $80,750.00 $80,750.00
10009273 $122,400.00 $122,400.00
10009274 $144,000.00 $143,931.02
10009276 $128,000.00 $128,000.00
10009281 $99,500.00 $99,500.00
10009282 $70,000.00 $70,000.00
10009283 $108,000.00 $108,000.00
10009284 $124,200.00 $124,200.00
10009285 $51,000.00 $51,000.00
10009288 $102,000.00 $102,000.00
10009289 $81,600.00 $81,600.00
10009291 $68,400.00 $68,231.15
10009292 $114,750.00 $114,750.00
10009294 $94,500.00 $94,500.00
10009295 $94,500.00 $94,447.03
10009301 $70,650.00 $70,615.25
10009302 $77,000.00 $76,962.12
10009306 $123,000.00 $122,944.12
10009307 $51,750.00 $51,750.00
10009311 $329,200.00 $329,200.00
10009313 $117,750.00 $117,750.00
10009314 $54,000.00 $54,000.00
10009315 $92,000.00 $92,000.00
10009317 $120,000.00 $120,000.00
10009320 $170,000.00 $170,000.00
10009323 $54,000.00 $54,000.00
10009325 $50,400.00 $50,400.00
10009326 $167,250.00 $167,250.00
10009330 $36,600.00 $36,600.00
10009332 $180,000.00 $180,000.00
Page 6
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10009334 $108,000.00 $108,000.00
10009345 $98,000.00 $98,000.00
10009347 $55,000.00 $55,000.00
10009349 $110,500.00 $110,500.00
10009350 $132,000.00 $132,000.00
10009361 $78,200.00 $78,200.00
10009362 $300,040.00 $300,040.00
10009365 $129,400.00 $129,400.00
10009368 $153,662.00 $153,662.00
10009370 $75,000.00 $75,000.00
10009372 $111,600.00 $111,600.00
10009373 $176,000.00 $176,000.00
10009376 $149,400.00 $149,400.00
10009379 $137,600.00 $137,600.00
10009381 $144,900.00 $144,900.00
10009382 $450,000.00 $450,000.00
10009383 $109,200.00 $109,200.00
10009388 $116,100.00 $116,100.00
10009391 $155,000.00 $155,000.00
10009392 $58,000.00 $58,000.00
10009397 $54,400.00 $54,400.00
10009400 $240,000.00 $239,961.29
10009407 $36,000.00 $36,000.00
10009410 $160,200.00 $160,200.00
10009411 $210,000.00 $210,000.00
10009414 $116,450.00 $116,450.00
10009421 $556,500.00 $556,500.00
10009428 $55,000.00 $55,000.00
10009440 $173,600.00 $173,600.00
10009442 $200,269.00 $200,269.00
10009453 $142,500.00 $142,500.00
10009455 $162,750.00 $162,750.00
10009466 $106,200.00 $106,200.00
10009471 $78,000.00 $78,000.00
10009473 $176,640.00 $176,527.36
10009476 $352,500.00 $352,500.00
10009488 $82,400.00 $82,400.00
10009489 $103,200.00 $103,200.00
10009492 $130,000.00 $130,000.00
10009493 $65,850.00 $65,850.00
10009496 $271,600.00 $271,600.00
10009500 $223,200.00 $223,200.00
10009502 $210,575.00 $210,575.00
10009503 $122,000.00 $122,000.00
10009508 $145,600.00 $145,600.00
10009509 $158,000.00 $158,000.00
Page 7
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10009522 $150,500.00 $150,500.00
10009523 $187,500.00 $187,500.00
10009524 $77,000.00 $77,000.00
10009525 $787,500.00 $787,500.00
10009526 $455,750.00 $455,750.00
10009527 $106,250.00 $106,250.00
10009530 $172,700.00 $172,700.00
10009535 $153,000.00 $153,000.00
10009537 $89,250.00 $89,250.00
10009538 $48,000.00 $48,000.00
10009539 $78,300.00 $78,300.00
10009543 $234,400.00 $234,400.00
10009546 $180,000.00 $180,000.00
10009559 $131,750.00 $131,750.00
10009560 $71,550.00 $71,550.00
10009561 $147,200.00 $147,200.00
10009562 $123,000.00 $123,000.00
10009563 $78,400.00 $78,400.00
10009566 $195,900.00 $195,900.00
10009569 $73,100.00 $73,100.00
10009570 $212,400.00 $212,400.00
10009576 $116,910.00 $116,910.00
10009595 $162,000.00 $162,000.00
10009596 $69,750.00 $69,750.00
10009605 $56,000.00 $56,000.00
10009607 $201,600.00 $201,600.00
10009608 $48,000.00 $48,000.00
10009617 $355,500.00 $355,500.00
10009629 $60,000.00 $60,000.00
10009633 $37,100.00 $37,100.00
10009636 $87,300.00 $87,300.00
10009644 $168,300.00 $168,300.00
10009650 $45,520.00 $45,520.00
10009651 $105,000.00 $105,000.00
10009657 $87,300.00 $87,300.00
10009663 $114,000.00 $114,000.00
10009696 $161,500.00 $161,500.00
10009701 $48,300.00 $48,300.00
10009703 $138,924.00 $138,924.00
10009720 $288,000.00 $288,000.00
10009721 $197,000.00 $197,000.00
10201576 $82,000.00 $81,674.46
10201607 $46,000.00 $45,917.58
10201629 $56,250.00 $56,184.47
10201789 $30,000.00 $29,956.60
10201798 $24,500.00 $24,475.78
Page 8
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10201841 $76,000.00 $75,223.03
10202001 $36,000.00 $35,853.20
10202074 $74,800.00 $74,658.69
10202081 $91,200.00 $90,998.47
10202089 $37,500.00 $37,439.59
10202228 $98,250.00 $98,064.39
10203265 $47,925.00 $47,853.66
10203266 $24,750.00 $24,725.93
10203267 $49,500.00 $49,437.17
10203269 $176,560.00 $176,267.92
10203273 $21,600.00 $21,489.75
10203304 $85,250.00 $85,093.96
10203310 $18,700.00 $18,595.72
10203314 $177,000.00 $176,750.23
10203319 $119,900.00 $119,739.54
10203323 $82,500.00 $82,398.01
10203332 $51,000.00 $50,925.06
10203335 $20,900.00 $20,865.26
10203338 $47,250.00 $47,217.16
10203341 $35,000.00 $34,744.31
10203344 $117,000.00 $116,568.50
10203349 $67,500.00 $67,399.60
10203352 $51,600.00 $51,555.24
10203355 $100,000.00 $99,851.28
10203360 $160,000.00 $159,845.11
10203363 $73,775.00 $73,695.18
10203368 $45,000.00 $44,960.91
10203384 $59,250.00 $59,178.72
10203404 $40,000.00 $39,940.48
10203405 $88,000.00 $87,862.09
10203427 $153,750.00 $153,544.23
10203450 $341,250.00 $340,654.59
10203453 $29,400.00 $29,320.12
10203470 $69,750.00 $69,674.54
10203472 $24,000.00 $23,867.45
10203478 $180,000.00 $179,732.27
10203501 $74,250.00 $74,158.29
10203505 $27,600.00 $27,549.48
10203555 $77,000.00 $76,934.19
10203558 $160,500.00 $160,138.73
10203566 $80,000.00 $79,829.52
10203574 $120,750.00 $120,526.86
10203578 $108,693.00 $108,598.56
10203585 $157,600.00 $157,470.72
10203590 $30,000.00 $29,986.82
10203602 $56,250.00 $56,148.98
Page 9
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10203630 $57,300.00 $57,233.41
10203633 $45,500.00 $45,455.24
10203641 $90,000.00 $89,873.00
10203647 $191,250.00 $190,753.24
10203680 $116,450.00 $116,293.84
10203684 $263,500.00 $263,128.20
10203685 $45,750.00 $45,694.98
10203690 $135,000.00 $134,853.93
10203700 $166,600.00 $166,352.22
10203706 $64,000.00 $63,883.86
10203711 $75,000.00 $74,869.59
10203718 $256,640.00 $256,065.04
10203740 $76,000.00 $75,897.20
10203750 $176,250.00 $175,950.58
10203751 $100,300.00 $100,143.58
10203753 $394,000.00 $393,382.49
10203755 $45,750.00 $45,683.03
10203761 $169,150.00 $168,911.32
10203783 $51,600.00 $51,530.94
10203788 $107,100.00 $107,006.94
10203789 $97,125.00 $96,980.55
10203794 $76,000.00 $75,898.09
10203795 $62,000.00 $61,925.43
10203803 $189,125.00 $188,760.72
10203804 $296,000.00 $295,536.08
10203805 $69,750.00 $69,686.10
10203812 $105,000.00 $103,875.21
10203820 $177,800.00 $177,474.57
10203865 $109,500.00 $109,034.93
10203868 $49,640.00 $49,370.85
10203874 $140,000.00 $139,802.44
10203878 $49,500.00 $49,446.56
10203881 $33,000.00 $32,974.38
10203888 $23,400.00 $23,377.35
10203890 $53,500.00 $53,422.06
10203897 $128,000.00 $127,779.70
10203901 $117,600.00 $117,395.54
10203906 $46,125.00 $45,920.42
10203907 $117,600.00 $117,421.34
10203918 $113,600.00 $113,423.80
10204274 $75,000.00 $74,861.32
10204495 $49,500.00 $48,513.31
10204497 $40,000.00 $39,868.79
10204498 $24,750.00 $24,679.73
10204499 $217,500.00 $217,080.27
10204500 $60,800.00 $60,558.19
Page 10
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204501 $33,750.00 $33,688.23
10204502 $88,300.00 $87,858.48
10204503 $148,150.00 $147,933.29
10204505 $140,000.00 $138,692.73
10204506 $25,600.00 $25,558.74
10204507 $172,000.00 $171,652.17
10204508 $150,000.00 $149,716.65
10204509 $129,500.00 $129,231.07
10204511 $97,500.00 $97,358.71
10204512 $60,500.00 $60,401.44
10204513 $99,400.00 $99,138.34
10204514 $40,500.00 $40,452.83
10204515 $63,700.00 $62,985.93
10204516 $36,000.00 $35,966.14
10204517 $52,000.00 $51,903.43
10204518 $140,000.00 $139,523.07
10204519 $40,500.00 $40,404.54
10204520 $120,000.00 $119,757.34
10204521 $51,750.00 $51,707.00
10204522 $66,000.00 $65,832.72
10204523 $77,250.00 $77,126.22
10204525 $93,400.00 $93,206.02
10204526 $69,000.00 $68,265.51
10204527 $28,500.00 $28,289.01
10204528 $125,500.00 $125,219.80
10204529 $110,000.00 $109,669.73
10204530 $24,400.00 $24,177.31
10204531 $27,650.00 $27,597.76
10204532 $81,750.00 $81,533.92
10204533 $40,000.00 $39,933.32
10204534 $25,550.00 $25,501.71
10204535 $161,600.00 $161,371.96
10204536 $33,000.00 $32,788.73
10204537 $130,500.00 $130,265.67
10204540 $124,500.00 $124,355.02
10204541 $60,000.00 $59,913.06
10204542 $61,920.00 $61,817.27
10204543 $105,700.00 $105,412.90
10204544 $97,500.00 $97,330.50
10204545 $102,750.00 $102,470.87
10204546 $124,000.00 $123,641.02
10204547 $19,000.00 $18,840.73
10204548 $38,000.00 $37,936.91
10204549 $107,200.00 $106,937.43
10204550 $92,000.00 $91,831.61
10204551 $141,600.00 $141,383.87
Page 11
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204552 $49,500.00 $49,252.48
10204553 $210,600.00 $210,169.59
10204554 $84,000.00 $83,853.44
10204556 $37,500.00 $37,448.64
10204557 $55,000.00 $54,892.73
10204558 $108,900.00 $108,801.30
10204559 $154,000.00 $153,693.37
10204561 $101,250.00 $101,025.83
10204562 $52,500.00 $52,357.39
10204563 $37,500.00 $37,437.96
10204564 $396,000.00 $395,211.58
10204565 $37,500.00 $37,456.30
10204566 $52,300.00 $52,224.21
10204567 $75,000.00 $74,931.34
10204568 $163,500.00 $163,250.43
10204569 $31,000.00 $30,787.12
10204570 $97,500.00 $97,358.71
10204572 $98,000.00 $97,736.80
10204573 $72,100.00 $71,932.26
10204574 $213,750.00 $213,324.42
10204575 $69,750.00 $69,618.24
10204576 $160,000.00 $159,508.46
10204577 $268,000.00 $267,642.83
10204578 $96,900.00 $96,670.26
10204579 $21,750.00 $21,685.87
10204580 $70,000.00 $69,749.19
10204581 $73,500.00 $73,392.51
10204582 $85,000.00 $84,798.48
10204584 $189,550.00 $189,209.63
10204585 $154,000.00 $153,723.49
10204586 $50,750.00 $50,619.20
10204588 $120,000.00 $119,835.67
10204589 $96,850.00 $96,635.56
10204590 $125,434.00 $125,184.25
10204591 $56,100.00 $55,999.46
10204592 $500,000.00 $498,425.62
10204593 $106,250.00 $105,985.05
10204594 $216,800.00 $216,133.98
10204595 $66,400.00 $66,245.51
10204596 $53,600.00 $53,515.04
10204597 $114,750.00 $114,438.27
10204598 $76,000.00 $75,863.55
10204599 $180,000.00 $179,766.59
10204600 $100,750.00 $100,516.70
10204601 $115,500.00 $115,293.02
10204602 $123,000.00 $122,727.96
Page 12
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204604 $188,000.00 $187,464.07
10204605 $25,600.00 $25,556.52
10204606 $375,000.00 $373,876.32
10204607 $184,000.00 $183,687.37
10204608 $145,000.00 $144,739.64
10204609 $75,000.00 $74,833.94
10204610 $142,000.00 $141,651.98
10204611 $108,500.00 $108,234.29
10204613 $93,245.00 $93,101.77
10204614 $76,500.00 $75,911.83
10204615 $97,750.00 $97,565.36
10204616 $147,050.00 $146,772.20
10204617 $72,600.00 $72,500.56
10204618 $81,500.00 $81,334.30
10204619 $234,994.00 $234,512.72
10204620 $186,000.00 $185,699.81
10204621 $129,200.00 $128,998.49
10204622 $66,750.00 $66,630.13
10204623 $121,605.00 $121,375.31
10204624 $365,000.00 $364,059.37
10204625 $130,000.00 $129,831.03
10204626 $88,500.00 $87,753.45
10204630 $499,999.99 $499,280.79
10204631 $42,900.00 $42,864.63
10204632 $72,000.00 $71,903.68
10204633 $37,315.00 $36,905.70
10204634 $84,000.00 $83,925.35
10204635 $46,500.00 $46,405.39
10204636 $98,400.00 $98,266.16
10204638 $30,415.00 $30,406.14
10204639 $71,550.00 $71,471.39
10204640 $72,000.00 $71,710.04
10204641 $70,500.00 $70,459.36
10204642 $125,000.00 $124,887.75
10204643 $80,000.00 $79,912.27
10204645 $101,600.00 $101,516.68
10204646 $53,500.00 $53,028.81
10204647 $24,000.00 $23,887.90
10204648 $50,050.00 $50,024.25
10204650 $165,000.00 $164,630.34
10204652 $63,200.00 $62,991.26
10204653 $76,800.00 $76,715.61
10204657 $105,600.00 $105,464.86
10204658 $27,000.00 $26,976.54
10204660 $54,000.00 $53,738.33
10204661 $13,500.00 $13,418.37
Page 13
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204662 $75,000.00 $74,908.80
10204663 $73,500.00 $73,401.41
10204664 $112,500.00 $112,274.17
10204665 $162,150.00 $162,040.00
10204667 $202,500.00 $202,300.01
10204669 $78,400.00 $78,322.57
10204670 $128,000.00 $127,866.14
10204672 $71,250.00 $71,194.33
10204673 $171,500.00 $171,330.63
10204675 $64,900.00 $64,834.19
10204676 $28,200.00 $28,172.15
10204677 $47,200.00 $47,136.31
10204678 $70,000.00 $69,927.14
10204679 $32,000.00 $31,928.12
10204680 $265,000.00 $263,859.80
10204681 $50,124.00 $50,056.52
10204682 $135,000.00 $134,937.78
10204683 $60,000.00 $59,946.70
10204684 $57,500.00 $57,436.83
10204685 $27,000.00 $26,961.45
10204686 $61,600.00 $61,549.49
10204687 $117,000.00 $116,600.90
10204688 $132,500.00 $132,369.14
10204689 $120,000.00 $119,881.47
10204691 $110,000.00 $109,872.96
10204692 $225,000.00 $224,023.43
10204693 $32,250.00 $32,231.41
10204694 $27,300.00 $27,288.79
10204695 $67,500.00 $67,461.10
10204697 $92,000.00 $91,908.96
10204698 $49,000.00 $48,971.80
10204699 $15,750.00 $15,740.73
10204700 $69,168.00 $69,095.39
10204701 $63,000.00 $62,923.39
10204702 $103,000.00 $102,898.28
10204704 $99,400.00 $99,342.70
10204705 $36,000.00 $35,868.17
10204706 $110,400.00 $110,251.05
10204707 $65,000.00 $64,641.00
10204708 $101,350.00 $101,244.51
10204709 $84,000.00 $83,912.56
10204710 $28,000.00 $27,886.00
10204711 $78,400.00 $78,322.57
10204712 $107,250.00 $107,126.87
10204713 $108,000.00 $107,911.44
10204714 $63,700.00 $63,670.62
Page 14
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204715 $56,700.00 $56,659.29
10204716 $90,000.00 $89,928.31
10204718 $139,200.00 $139,045.50
10204719 $139,200.00 $139,044.16
10204720 $320,000.00 $319,276.15
10204721 $75,600.00 $75,532.84
10204722 $40,000.00 $39,787.60
10204723 $51,200.00 $51,163.25
10204724 $139,200.00 $138,971.08
10204725 $36,500.00 $36,450.76
10204726 $25,700.00 $25,683.05
10204727 $225,000.00 $224,323.71
10204729 $276,000.00 $275,727.41
10204730 $30,000.00 $29,924.06
10204731 $62,500.00 $62,286.81
10204732 $27,000.00 $26,937.24
10204733 $124,600.00 $124,317.58
10204734 $50,750.00 $50,492.63
10204735 $28,800.00 $28,740.58
10204736 $55,000.00 $54,823.94
10204737 $57,500.00 $57,315.93
10204738 $96,375.00 $96,255.93
10204739 $63,600.00 $63,530.26
10204740 $30,000.00 $29,924.42
10204741 $67,875.00 $67,820.82
10204743 $32,800.00 $32,770.86
10204745 $40,000.00 $39,621.33
10204746 $38,500.00 $38,319.75
10204747 $32,800.00 $32,751.17
10204748 $34,400.00 $34,371.02
10204749 $77,250.00 $77,165.30
10204750 $249,750.00 $249,476.15
10204754 $69,600.00 $69,538.16
10204756 $56,000.00 $55,955.29
10204757 $180,000.00 $179,592.44
10204758 $64,000.00 $63,660.17
10204759 $50,250.00 $50,218.43
10204760 $52,000.00 $51,951.28
10204761 $79,500.00 $79,442.92
10204762 $43,000.00 $42,893.42
10204763 $72,500.00 $72,428.40
10204764 $47,250.00 $47,208.03
10204765 $126,000.00 $125,899.42
10204766 $58,500.00 $58,453.31
10204767 $162,000.00 $161,831.39
10204769 $68,750.00 $68,085.47
Page 15
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204770 $136,500.00 $135,742.73
10204771 $146,500.00 $146,339.36
10204772 $55,000.00 $54,644.58
10204773 $292,000.00 $291,711.62
10204775 $59,250.00 $59,193.63
10204776 $51,600.00 $51,549.04
10204777 $100,800.00 $100,671.00
10204778 $84,150.00 $84,092.29
10204779 $66,500.00 $66,461.67
10204780 $32,200.00 $32,049.25
10204781 $45,500.00 $45,278.47
10204782 $40,800.00 $40,692.95
10204783 $160,000.00 $159,868.80
10204785 $75,750.00 $75,681.21
10204786 $84,000.00 $83,939.69
10204787 $65,000.00 $64,916.83
10204788 $59,250.00 $59,222.67
10204789 $72,000.00 $71,940.97
10204790 $54,750.00 $54,689.83
10204791 $32,250.00 $32,177.57
10204792 $140,250.00 $140,060.77
10204794 $107,800.00 $107,654.56
10204795 $88,000.00 $87,929.75
10204796 $119,700.00 $119,609.46
10204797 $61,600.00 $61,537.21
10204798 $161,000.00 $160,500.56
10204799 $93,150.00 $92,996.55
10204800 $47,200.00 $47,081.09
10204801 $141,000.00 $140,576.20
10204802 $71,200.00 $71,125.90
10204803 $38,000.00 $37,958.32
10204804 $33,000.00 $32,838.24
10204805 $49,000.00 $48,947.92
10204806 $20,000.00 $19,768.11
10204807 $83,999.00 $83,923.51
10204809 $121,200.00 $121,036.48
10204810 $70,500.00 $70,321.68
10204811 $65,000.00 $64,711.60
10204812 $140,000.00 $139,829.78
10204813 $36,000.00 $35,831.45
10204814 $30,400.00 $30,388.82
10204815 $49,600.00 $49,542.73
10204816 $68,000.00 $67,828.70
10204817 $137,200.00 $137,071.46
10204818 $81,250.00 $81,205.92
10204819 $30,000.00 $29,854.50
Page 16
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204820 $31,000.00 $30,948.93
10204821 $88,500.00 $88,443.15
10204822 $54,000.00 $53,857.44
10204823 $89,600.00 $89,473.11
10204825 $62,000.00 $61,971.48
10204826 $112,000.00 $111,908.15
10204827 $42,250.00 $42,203.68
10204828 $375,000.00 $374,587.94
10204829 $75,000.00 $74,938.49
10204830 $97,500.00 $97,393.08
10204832 $19,250.00 $19,191.12
10204833 $101,232.00 $100,712.26
10204834 $49,500.00 $49,486.09
10204835 $257,000.00 $256,653.97
10204836 $425,000.00 $424,261.08
10204838 $63,000.00 $62,940.98
10204840 $50,000.00 $49,966.08
10204841 $96,800.00 $96,540.71
10204842 $87,150.00 $87,054.24
10204843 $131,062.00 $130,856.61
10204844 $153,000.00 $152,793.58
10204847 $97,750.00 $97,588.27
10204848 $16,500.00 $16,493.87
10204850 $52,000.00 $51,925.84
10204851 $71,200.00 $71,121.76
10204852 $116,000.00 $115,798.33
10204853 $100,000.00 $99,879.49
10204854 $144,000.00 $143,891.09
10204855 $80,000.00 $79,864.44
10204857 $85,600.00 $85,527.91
10204858 $87,000.00 $86,795.17
10204859 $180,000.00 $179,757.15
10204860 $102,000.00 $101,869.47
10204861 $104,250.00 $104,098.95
10204862 $102,050.00 $101,865.07
10204863 $100,000.00 $99,893.57
10204864 $132,000.00 $131,894.62
10204865 $39,900.00 $39,878.29
10204866 $58,500.00 $58,449.12
10204867 $103,500.00 $103,360.37
10204868 $95,000.00 $94,910.99
10204869 $113,600.00 $113,475.18
10204870 $79,600.00 $79,522.09
10204871 $121,950.00 $121,841.41
10204872 $86,250.00 $86,083.86
10204874 $43,775.00 $43,729.43
Page 17
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204875 $84,000.00 $83,840.18
10204876 $285,000.00 $284,528.51
10204877 $165,900.00 $165,676.62
10204879 $109,916.00 $109,828.08
10204880 $119,920.00 $119,781.51
10204881 $101,250.00 $101,164.72
10204882 $119,000.00 $118,862.58
10204883 $170,000.00 $169,813.58
10204884 $76,500.00 $76,406.98
10204885 $42,000.00 $41,963.77
10204886 $114,750.00 $114,596.09
10204887 $60,000.00 $59,937.54
10204888 $265,000.00 $264,643.19
10204890 $126,000.00 $125,881.96
10204891 $213,750.00 $213,508.21
10204892 $68,000.00 $67,922.51
10204894 $41,000.00 $40,967.62
10204897 $149,537.60 $149,364.91
10204898 $63,750.00 $63,703.07
10204899 $95,200.00 $95,065.19
10204900 $200,000.00 $199,779.18
10204902 $157,250.00 $157,086.33
10204903 $98,000.00 $97,875.65
10204904 $79,050.00 $78,975.94
10204905 $154,700.00 $154,551.96
10204906 $99,000.00 $98,921.83
10204907 $80,000.00 $79,902.73
10204908 $87,000.00 $86,900.85
10204909 $72,250.00 $72,187.82
10204910 $127,000.00 $126,874.58
10204913 $100,000.00 $99,838.75
10204914 $243,200.00 $242,969.11
10204916 $75,650.00 $75,346.86
10204917 $28,500.00 $28,479.53
10204918 $68,250.00 $66,838.15
10204919 $80,750.00 $80,610.57
10204920 $110,500.00 $110,378.59
10204921 $80,000.00 $79,916.74
10204922 $352,000.00 $351,501.52
10204923 $98,400.00 $98,321.46
10204924 $191,250.00 $191,070.83
10204925 $116,500.00 $116,326.71
10204926 $107,920.00 $107,774.39
10204927 $130,500.00 $130,395.60
10204928 $143,386.00 $143,202.51
10204929 $187,000.00 $186,760.70
Page 18
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204930 $37,400.00 $37,380.76
10204931 $102,000.00 $101,909.18
10204932 $50,000.00 $49,966.06
10204933 $118,105.00 $118,010.73
10204934 $147,900.00 $147,660.89
10204935 $80,325.00 $80,264.25
10204936 $123,750.00 $123,591.64
10204937 $100,500.00 $100,410.51
10204938 $150,000.00 $149,776.66
10204939 $56,000.00 $55,950.13
10204940 $139,500.00 $139,375.80
10204941 $164,475.00 $164,357.16
10204942 $30,000.00 $29,967.10
10204943 $60,000.00 $59,952.11
10204944 $40,000.00 $39,972.85
10204945 $80,000.00 $79,920.99
10204946 $216,000.00 $215,756.92
10204947 $63,000.00 $62,943.92
10204949 $79,000.00 $78,913.38
10204950 $131,250.00 $131,098.43
10204951 $39,200.00 $39,159.20
10204952 $22,000.00 $21,987.62
10204953 $204,750.00 $204,618.51
10204954 $76,500.00 $76,452.99
10204955 $104,125.00 $103,940.58
10204956 $125,250.00 $125,126.03
10204958 $90,000.00 $89,915.68
10204959 $27,000.00 $26,971.90
10204960 $192,000.00 $191,747.97
10204961 $64,000.00 $63,858.58
10204962 $94,900.00 $94,726.30
10204963 $102,000.00 $101,875.98
10204964 $108,000.00 $107,686.04
10204965 $74,200.00 $74,130.49
10204966 $138,000.00 $137,903.27
10204967 $92,000.00 $91,893.76
10204968 $124,950.00 $124,763.96
10204970 $93,450.00 $93,336.38
10204971 $240,000.00 $239,786.31
10204972 $160,000.00 $159,749.62
10204973 $145,600.00 $145,403.55
10204975 $59,625.00 $59,586.71
10204976 $182,750.00 $182,434.43
10204977 $55,300.00 $55,234.46
10204978 $99,350.00 $99,270.70
10204979 $29,625.00 $29,600.05
Page 19
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10204980 $204,000.00 $203,751.96
10204981 $123,750.00 $123,517.85
10204982 $75,000.00 $74,949.12
10204984 $97,750.00 $97,572.78
10204985 $306,000.00 $305,597.31
10204986 $54,000.00 $53,951.92
10204987 $80,000.00 $79,932.62
10204988 $55,200.00 $55,148.29
10204989 $90,000.00 $89,922.55
10204990 $51,000.00 $50,947.35
10204992 $135,000.00 $134,817.86
10204993 $72,000.00 $71,916.86
10204994 $111,000.00 $110,879.91
10204995 $53,500.00 $53,452.36
10204996 $184,000.00 $183,787.50
10204997 $315,000.00 $314,704.88
10204998 $242,250.00 $241,923.16
10204999 $67,000.00 $66,898.88
10205000 $119,850.00 $119,688.30
10205001 $105,000.00 $104,878.73
10205002 $213,750.00 $213,566.79
10205003 $208,000.00 $207,747.09
10205004 $11,000.00 $10,991.36
10205005 $89,600.00 $89,490.84
10205006 $64,000.00 $63,913.66
10205007 $108,800.00 $108,713.14
10205008 $176,250.00 $176,008.65
10205009 $35,192.00 $34,732.78
10205010 $65,000.00 $64,921.67
10205011 $153,000.00 $152,868.35
10205012 $115,500.00 $115,397.17
10205014 $71,400.00 $71,348.85
10205015 $91,800.00 $91,673.86
10205016 $172,500.00 $172,362.30
10205017 $150,000.00 $149,866.73
10205018 $300,800.00 $300,521.15
10205019 $69,600.00 $69,506.09
10205020 $255,000.00 $254,673.68
10205021 $76,000.00 $75,917.77
10205022 $52,250.00 $52,230.81
10205024 $76,500.00 $76,424.46
10205025 $170,000.00 $169,823.06
10205027 $140,250.00 $140,070.52
10205028 $110,000.00 $109,879.13
10205029 $44,880.00 $44,809.65
10205030 $115,000.00 $114,892.26
Page 20
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205031 $102,500.00 $102,304.98
10205033 $66,000.00 $65,876.94
10205034 $229,500.00 $229,272.40
10205036 $220,000.00 $219,793.89
10205037 $104,300.00 $104,159.55
10205038 $136,000.00 $135,787.18
10205039 $75,000.00 $74,921.93
10205040 $78,500.00 $78,426.44
10205041 $130,253.00 $130,102.58
10205042 $124,000.00 $123,833.04
10205043 $99,024.00 $98,890.68
10205044 $69,750.00 $69,660.74
10205045 $153,000.00 $152,863.79
10205048 $46,200.00 $46,174.86
10205049 $142,800.00 $141,842.34
10205050 $60,000.00 $59,934.07
10205051 $160,000.00 $159,841.64
10205052 $244,800.00 $244,582.04
10205054 $45,000.00 $44,959.95
10205055 $97,125.00 $97,006.90
10205056 $165,000.00 $164,837.04
10205057 $115,500.00 $115,412.65
10205058 $115,600.00 $115,247.76
10205059 $168,000.00 $167,825.15
10205060 $220,400.00 $220,145.46
10205061 $91,000.00 $90,899.11
10205062 $131,250.00 $131,113.39
10205063 $40,000.00 $39,968.06
10205064 $129,000.00 $128,669.00
10205065 $127,500.00 $127,026.48
10205066 $80,250.00 $79,780.47
10205068 $126,400.00 $125,904.54
10205069 $262,000.00 $260,973.26
10205070 $86,250.00 $86,071.54
10205071 $136,000.00 $135,408.63
10205072 $130,000.00 $129,770.64
10205073 $400,000.00 $398,913.62
10205074 $15,375.00 $15,366.99
10205075 $45,000.00 $44,796.19
10205077 $132,000.00 $131,558.23
10205078 $164,000.00 $162,979.72
10205079 $448,000.00 $446,783.26
10205081 $55,250.00 $55,097.76
10205082 $176,250.00 $174,584.37
10205083 $60,375.00 $60,286.68
10205084 $130,000.00 $129,565.01
Page 21
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205085 $67,200.00 $66,725.30
10205087 $37,500.00 $37,232.43
10205088 $52,000.00 $51,843.49
10205089 $163,200.00 $162,902.84
10205090 $69,600.00 $68,591.14
10205091 $93,750.00 $93,495.38
10205093 $48,750.00 $48,581.57
10205094 $232,500.00 $230,943.07
10205095 $88,000.00 $87,705.30
10205096 $26,000.00 $25,936.65
10205097 $40,300.00 $40,201.78
10205098 $33,400.00 $33,265.49
10205099 $34,450.00 $34,332.88
10205100 $60,000.00 $59,912.21
10205101 $23,800.00 $23,765.48
10205102 $18,200.00 $18,173.60
10205103 $63,750.00 $63,098.08
10205104 $67,500.00 $67,299.89
10205105 $36,800.00 $36,733.02
10205109 $70,000.00 $69,795.68
10205110 $57,000.00 $56,841.68
10205111 $34,500.00 $34,139.11
10205112 $36,050.00 $35,991.28
10205113 $188,000.00 $187,609.54
10205114 $160,000.00 $158,880.86
10205115 $326,250.00 $325,874.17
10205116 $129,600.00 $129,407.24
10205118 $24,500.00 $24,485.87
10205119 $330,400.00 $329,853.37
10205120 $22,000.00 $21,982.73
10205121 $24,150.00 $23,939.05
10205122 $125,000.00 $124,469.05
10205123 $88,000.00 $87,891.28
10205124 $220,000.00 $219,597.33
10205125 $45,500.00 $45,468.36
10205126 $64,000.00 $63,920.94
10205127 $152,000.00 $151,649.08
10205128 $25,000.00 $24,972.93
10205129 $150,000.00 $149,876.98
10205130 $96,000.00 $95,900.08
10205131 $62,250.00 $62,136.06
10205132 $17,000.00 $16,984.24
10205133 $94,500.00 $94,417.17
10205134 $80,800.00 $80,676.64
10205135 $68,000.00 $67,939.45
10205137 $67,100.00 $66,974.57
Page 22
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205138 $64,000.00 $63,914.18
10205139 $38,249.00 $38,195.81
10205141 $77,600.00 $77,440.19
10205142 $27,200.00 $27,173.14
10205143 $228,000.00 $227,722.78
10205144 $221,250.00 $220,865.34
10205147 $48,750.00 $48,701.85
10205148 $27,750.00 $27,725.94
10205151 $69,750.00 $69,656.64
10205152 $30,000.00 $29,979.14
10205153 $36,000.00 $35,974.47
10205154 $202,500.00 $202,164.99
10205155 $72,750.00 $72,685.35
10205156 $45,500.00 $45,443.75
10205157 $108,000.00 $107,821.31
10205158 $46,800.00 $46,752.19
10205159 $54,750.00 $54,698.14
10205160 $77,250.00 $76,976.28
10205161 $135,000.00 $134,837.64
10205162 $120,400.00 $120,190.66
10205164 $72,000.00 $71,695.68
10205165 $150,000.00 $149,759.02
10205166 $168,750.00 $168,470.81
10205167 $90,000.00 $89,879.57
10205168 $28,000.00 $27,344.62
10205169 $45,600.00 $45,379.04
10205170 $64,000.00 $63,930.73
10205171 $67,900.00 $67,818.34
10205172 $67,875.00 $67,791.14
10205173 $155,000.00 $154,615.86
10205174 $44,808.51 $44,765.05
10205175 $189,600.00 $189,352.97
10205176 $80,800.00 $80,712.77
10205177 $304,000.00 $303,520.54
10205178 $77,500.00 $77,372.57
10205179 $28,500.00 $28,491.69
10205181 $61,000.00 $60,905.49
10205182 $39,200.00 $38,739.45
10205183 $44,800.00 $44,764.22
10205184 $55,000.00 $54,968.28
10205185 $61,500.00 $61,354.88
10205186 $48,000.00 $47,960.63
10205187 $32,000.00 $31,967.30
10205188 $48,750.00 $48,701.85
10205189 $27,000.00 $26,865.48
10205190 $69,600.00 $69,487.44
Page 23
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205191 $168,000.00 $167,792.48
10205192 $45,600.00 $45,560.95
10205193 $39,000.00 $38,728.05
10205194 $36,000.00 $35,968.73
10205195 $106,400.00 $106,257.60
10205196 $180,780.00 $180,439.02
10205197 $46,000.00 $45,952.21
10205198 $86,000.00 $85,867.97
10205199 $64,800.00 $64,703.63
10205200 $66,400.00 $66,342.30
10205201 $61,200.00 $61,145.05
10205202 $115,150.00 $115,025.42
10205203 $40,125.00 $40,064.99
10205204 $112,800.00 $112,662.86
10205205 $26,400.00 $26,365.21
10205206 $127,500.00 $127,329.19
10205207 $108,550.00 $108,419.45
10205208 $250,000.00 $249,725.29
10205209 $87,750.00 $87,689.00
10205210 $184,000.00 $183,726.34
10205211 $37,000.00 $36,969.67
10205212 $243,750.00 $243,453.62
10205213 $66,000.00 $65,906.88
10205214 $45,000.00 $44,690.54
10205215 $116,000.00 $115,758.25
10205216 $206,250.00 $206,001.96
10205217 $116,250.00 $115,976.29
10205219 $272,000.00 $271,550.94
10205220 $47,600.00 $47,482.03
10205221 $36,750.00 $36,687.17
10205222 $48,000.00 $47,939.79
10205223 $49,500.00 $49,375.70
10205224 $93,600.00 $93,486.20
10205225 $30,000.00 $29,986.20
10205226 $32,000.00 $31,837.68
10205227 $65,625.00 $65,167.31
10205228 $70,000.00 $69,923.23
10205229 $82,000.00 $81,274.53
10205230 $35,250.00 $35,073.09
10205231 $115,000.00 $114,789.51
10205232 $68,250.00 $68,165.69
10205233 $37,125.00 $37,084.92
10205234 $62,300.00 $62,216.45
10205235 $141,000.00 $140,860.75
10205236 $35,000.00 $34,947.94
10205237 $236,000.00 $235,444.33
Page 24
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205238 $37,500.00 $37,457.25
10205240 $168,000.00 $167,722.05
10205241 $144,300.00 $144,121.74
10205242 $179,400.00 $179,178.38
10205243 $43,500.00 $43,411.69
10205244 $63,750.00 $63,655.08
10205246 $47,250.00 $47,171.84
10205247 $105,000.00 $104,160.54
10205248 $157,000.00 $156,620.64
10205249 $170,000.00 $169,797.46
10205250 $97,500.00 $97,043.53
10205251 $108,500.00 $108,256.92
10205252 $27,400.00 $27,299.69
10205253 $54,000.00 $53,928.97
10205255 $93,000.00 $92,763.37
10205256 $45,600.00 $45,560.37
10205257 $46,500.00 $46,461.88
10205258 $56,000.00 $55,950.25
10205259 $113,600.00 $113,488.98
10205261 $20,000.00 $19,719.35
10205263 $30,000.00 $29,939.04
10205264 $69,750.00 $69,681.11
10205265 $39,200.00 $39,026.77
10205266 $21,000.00 $20,907.12
10205267 $65,000.00 $64,523.41
10205269 $135,200.00 $135,069.24
10205270 $25,900.00 $25,870.46
10205271 $31,850.00 $31,813.69
10205272 $25,900.00 $25,870.46
10205273 $175,500.00 $175,283.19
10205274 $194,400.00 $194,120.60
10205275 $84,000.00 $83,720.85
10205277 $11,250.00 $11,215.51
10205278 $126,400.00 $126,143.34
10205279 $39,750.00 $39,731.67
10205280 $73,200.00 $73,109.57
10205281 $25,000.00 $24,992.54
10205282 $27,300.00 $27,190.15
10205283 $35,000.00 $34,926.35
10205284 $130,000.00 $129,841.93
10205285 $80,000.00 $79,936.14
10205286 $22,000.00 $21,988.28
10205287 $101,000.00 $100,933.34
10205288 $42,250.00 $42,227.01
10205289 $116,250.00 $116,162.08
10205290 $345,750.00 $344,021.20
Page 25
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205291 $157,500.00 $157,085.42
10205292 $71,200.00 $71,001.53
10205293 $91,800.00 $91,594.69
10205295 $483,900.00 $481,364.79
10205296 $88,060.00 $87,935.55
10205297 $153,850.00 $153,218.95
10205298 $112,000.00 $111,833.41
10205299 $72,020.00 $71,920.51
10205300 $47,400.00 $47,362.16
10205301 $425,000.00 $423,581.26
10205302 $60,350.00 $60,281.19
10205303 $71,600.00 $71,536.19
10205304 $50,400.00 $50,339.38
10205305 $71,600.00 $71,481.55
10205306 $104,000.00 $103,844.99
10205307 $420,000.00 $419,305.15
10205308 $76,000.00 $75,892.75
10205309 $110,320.00 $110,160.69
10205310 $72,000.00 $71,887.14
10205311 $312,000.00 $311,511.00
10205312 $85,850.00 $85,647.87
10205313 $80,000.00 $79,888.31
10205314 $141,950.00 $141,754.93
10205315 $81,600.00 $81,295.61
10205316 $72,000.00 $71,902.59
10205317 $148,800.00 $148,621.05
10205318 $260,700.00 $260,246.73
10205319 $42,500.00 $42,433.37
10205320 $127,500.00 $127,338.23
10205321 $35,700.00 $35,665.46
10205322 $106,400.00 $106,315.07
10205323 $95,600.00 $95,484.76
10205324 $136,000.00 $135,685.88
10205325 $35,000.00 $34,950.44
10205327 $91,375.00 $91,291.27
10205328 $60,000.00 $59,927.04
10205329 $45,750.00 $45,690.70
10205330 $110,500.00 $109,983.94
10205331 $103,920.00 $103,807.83
10205332 $21,000.00 $20,974.65
10205333 $120,000.00 $119,801.87
10205334 $20,250.00 $20,235.15
10205335 $178,500.00 $178,357.20
10205336 $69,300.00 $69,159.27
10205337 $316,000.00 $315,178.76
10205338 $157,250.00 $157,028.12
Page 26
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205339 $75,600.00 $75,525.19
10205340 $90,400.00 $90,331.62
10205341 $124,000.00 $123,858.68
10205342 $91,000.00 $90,878.22
10205343 $78,200.00 $78,089.52
10205344 $58,837.00 $58,770.79
10205345 $64,600.00 $64,513.39
10205346 $79,815.00 $79,689.52
10205347 $132,600.00 $132,402.78
10205348 $94,000.00 $93,890.63
10205349 $196,000.00 $195,692.82
10205350 $42,000.00 $41,960.56
10205351 $106,250.00 $106,045.34
10205352 $161,500.00 $161,340.49
10205353 $84,350.00 $84,289.44
10205354 $193,600.00 $193,206.89
10205355 $153,750.00 $153,482.69
10205356 $51,000.00 $50,948.55
10205358 $100,000.00 $99,851.28
10205359 $360,000.00 $359,584.25
10205360 $47,120.00 $47,056.81
10205361 $500,000.00 $499,172.28
10205362 $117,300.00 $117,195.79
10205363 $32,000.00 $31,971.50
10205364 $16,575.00 $16,565.17
10205365 $76,000.00 $75,908.61
10205366 $42,000.00 $41,936.98
10205367 $161,704.00 $161,469.72
10205368 $170,000.00 $169,599.74
10205369 $76,925.00 $76,804.32
10205370 $191,250.00 $190,901.24
10205371 $65,000.00 $64,892.92
10205372 $60,000.00 $59,918.84
10205373 $150,800.00 $150,563.67
10205374 $98,500.00 $98,345.61
10205375 $65,000.00 $64,889.87
10205376 $52,000.00 $51,956.21
10205377 $95,278.00 $95,084.55
10205378 $79,000.00 $78,918.11
10205379 $69,500.00 $69,434.89
10205380 $62,900.00 $62,772.28
10205381 $33,500.00 $33,431.96
10205382 $80,250.00 $80,153.49
10205383 $80,750.00 $80,629.90
10205384 $136,000.00 $135,816.04
10205385 $39,950.00 $39,888.23
Page 27
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205386 $39,100.00 $38,427.33
10205387 $102,000.00 $101,856.06
10205388 $100,000.00 $99,889.00
10205389 $82,400.00 $82,277.31
10205390 $93,600.00 $93,432.15
10205391 $81,750.00 $81,640.37
10205392 $54,750.00 $54,649.79
10205393 $141,950.00 $141,759.64
10205394 $102,000.00 $101,817.80
10205395 $127,500.00 $127,310.16
10205396 $82,500.00 $82,370.70
10205397 $84,800.00 $84,719.44
10205398 $137,250.00 $137,114.45
10205399 $47,200.00 $47,113.60
10205400 $200,000.00 $199,779.93
10205401 $97,750.00 $97,612.08
10205402 $50,000.00 $49,889.18
10205403 $225,000.00 $224,628.53
10205404 $66,695.00 $66,605.57
10205405 $88,000.00 $87,792.79
10205406 $80,850.00 $80,793.90
10205407 $90,950.00 $90,821.67
10205408 $78,230.00 $78,156.70
10205409 $269,450.00 $268,930.99
10205410 $62,000.00 $61,919.64
10205411 $140,200.00 $139,885.90
10205412 $36,000.00 $35,954.31
10205413 $40,000.00 $39,948.80
10205415 $125,200.00 $124,871.33
10205416 $183,960.00 $183,711.81
10205417 $54,750.00 $54,720.23
10205418 $25,200.00 $25,164.43
10205419 $45,000.00 $44,939.67
10205420 $42,000.00 $41,898.88
10205421 $36,050.00 $35,949.82
10205422 $100,500.00 $100,339.49
10205423 $66,000.00 $65,934.68
10205424 $117,750.00 $117,501.01
10205425 $106,400.00 $106,195.04
10205426 $122,250.00 $122,187.09
10205427 $162,750.00 $162,440.35
10205428 $109,650.00 $109,468.59
10205429 $109,650.00 $109,410.65
10205430 $158,450.00 $158,111.47
10205431 $67,500.00 $67,382.65
10205432 $99,375.00 $99,303.65
10205433 $380,000.00 $379,490.40
10205434 $74,700.00 $74,608.98
10205435 $38,250.00 $38,183.51
Page 28
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205436 $96,000.00 $95,877.14
10205437 $378,250.00 $377,714.34
10205438 $70,500.00 $70,435.41
10205439 $96,600.00 $96,476.39
10205440 $87,750.00 $87,600.20
10205441 $97,300.00 $97,213.36
10205442 $29,400.00 $29,329.46
10205443 $96,000.00 $95,607.41
10205445 $94,960.00 $94,154.33
10205446 $46,500.00 $45,812.03
10205449 $74,000.00 $73,794.07
10205450 $420,000.00 $418,774.05
10205451 $57,600.00 $57,439.97
10205452 $140,000.00 $139,716.89
10205453 $440,000.00 $438,849.05
10205454 $26,000.00 $25,936.65
10205455 $132,600.00 $132,498.86
10205456 $90,000.00 $89,895.20
10205457 $148,000.00 $147,606.34
10205458 $33,600.00 $33,525.60
10205459 $41,600.00 $41,354.94
10205460 $124,000.00 $123,690.17
10205461 $98,250.00 $97,977.08
10205462 $20,900.00 $20,880.51
10205463 $93,750.00 $93,495.35
10205464 $38,100.00 $38,004.79
10205465 $42,700.00 $42,197.16
10205466 $600,000.00 $598,513.00
10205468 $56,000.00 $55,572.32
10205469 $91,050.00 $90,870.72
10205470 $102,400.00 $102,151.95
10205471 $150,000.00 $149,668.48
10205472 $111,000.00 $110,778.99
10205473 $52,500.00 $52,392.53
10205474 $120,000.00 $119,806.72
10205475 $48,000.00 $47,891.80
10205476 $121,500.00 $121,299.01
10205477 $86,400.00 $86,260.83
10205479 $23,800.00 $23,764.64
10205480 $90,000.00 $89,836.99
10205481 $80,000.00 $79,824.76
10205482 $30,100.00 $29,762.56
10205483 $55,200.00 $55,142.36
10205485 $84,700.00 $84,524.09
10205486 $54,750.00 $54,679.02
10205487 $87,750.00 $87,592.44
10205488 $96,000.00 $95,806.85
10205489 $108,750.00 $108,570.13
10205490 $48,750.00 $48,657.89
Page 29
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205491 $153,750.00 $153,560.05
10205492 $150,000.00 $149,695.04
10205493 $57,000.00 $56,946.37
10205494 $90,750.00 $90,682.57
10205495 $71,250.00 $71,135.22
10205496 $42,250.00 $42,178.19
10205497 $72,750.00 $72,619.66
10205498 $55,500.00 $55,274.85
10205500 $240,000.00 $239,735.01
10205502 $336,000.00 $335,042.18
10205503 $133,500.00 $133,370.77
10205504 $332,000.00 $331,465.32
10205505 $61,000.00 $60,893.54
10205506 $79,200.00 $79,176.98
10205507 $19,500.00 $19,381.08
10205508 $315,900.00 $315,589.26
10205509 $37,600.00 $37,545.51
10205510 $84,000.00 $83,879.58
10205511 $315,900.00 $315,165.00
10205512 $352,500.00 $352,006.37
10205513 $67,000.00 $66,935.20
10205514 $64,500.00 $64,382.84
10205515 $65,600.00 $64,914.19
10205516 $74,400.00 $74,291.61
10205517 $124,000.00 $123,047.79
10205518 $75,700.00 $75,574.10
10205520 $19,250.00 $18,975.49
10205521 $216,000.00 $215,564.29
10205522 $87,500.00 $87,306.24
10205523 $188,500.00 $188,183.83
10205524 $67,200.00 $67,100.06
10205525 $49,700.00 $49,332.08
10205526 $88,800.00 $88,727.19
10205527 $74,400.00 $74,280.16
10205528 $55,000.00 $53,589.81
10205529 $23,800.00 $23,619.13
10205531 $52,500.00 $52,463.49
10205532 $89,200.00 $89,092.72
10205533 $110,400.00 $110,252.25
10205534 $27,224.00 $27,194.30
10205535 $57,000.00 $56,797.55
10205536 $150,000.00 $149,572.41
10205538 $55,000.00 $54,850.58
10205539 $128,000.00 $127,713.25
10205540 $80,000.00 $79,890.65
10205541 $132,000.00 $131,839.70
10205543 $160,000.00 $159,854.40
10205544 $41,500.00 $41,477.05
10205545 $108,500.00 $108,296.61
Page 30
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205546 $222,000.00 $221,753.75
10205547 $33,000.00 $32,968.05
10205548 $62,720.00 $62,631.50
10205549 $78,000.00 $77,933.26
10205550 $30,000.00 $29,894.91
10205551 $225,000.00 $224,543.14
10205552 $53,250.00 $53,184.57
10205553 $51,075.00 $51,011.90
10205554 $41,500.00 $41,438.26
10205555 $61,200.00 $60,688.92
10205556 $246,400.00 $246,097.18
10205557 $122,000.00 $121,812.47
10205558 $35,625.00 $35,579.79
10205559 $25,900.00 $25,795.80
10205560 $51,000.00 $50,955.69
10205561 $116,000.00 $115,776.56
10205562 $47,500.00 $47,429.34
10205563 $277,500.00 $276,992.10
10205564 $183,200.00 $183,136.22
10205565 $86,250.00 $86,143.46
10205566 $48,750.00 $48,646.11
10205567 $90,000.00 $89,866.14
10205568 $93,000.00 $92,838.31
10205569 $76,500.00 $76,397.40
10205570 $270,000.00 $269,598.41
10205571 $40,000.00 $39,883.89
10205572 $127,500.00 $127,105.17
10205573 $78,000.00 $77,903.56
10205574 $115,700.00 $115,413.25
10205575 $31,500.00 $31,389.67
10205576 $28,600.00 $28,482.34
10205577 $31,500.00 $31,017.79
10205578 $60,000.00 $59,946.58
10205579 $55,600.00 $55,531.69
10205580 $23,000.00 $22,816.13
10205581 $90,000.00 $89,365.21
10205582 $27,900.00 $27,714.04
10205583 $75,000.00 $74,817.46
10205584 $92,000.00 $91,060.43
10205585 $368,000.00 $367,557.43
10205586 $220,008.00 $219,705.65
10205587 $560,000.00 $559,026.37
10205588 $113,500.00 $113,450.07
10205589 $48,400.00 $48,315.86
10205590 $37,500.00 $37,453.67
10205591 $81,600.00 $81,499.20
10205592 $58,400.00 $58,313.14
10205593 $156,000.00 $155,632.72
10205594 $148,000.00 $147,796.61
Page 31
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205595 $16,900.00 $16,874.88
10205596 $70,000.00 $69,914.88
10205597 $93,750.00 $93,695.47
10205598 $72,800.00 $72,691.72
10205599 $43,800.00 $43,727.70
10205600 $60,000.00 $59,858.72
10205602 $80,000.00 $79,686.39
10205603 $105,000.00 $104,870.28
10205604 $140,250.00 $140,114.25
10205605 $36,000.00 $35,870.85
10205606 $135,000.00 $134,833.23
10205607 $26,000.00 $25,842.14
10205608 $45,000.00 $44,941.68
10205609 $113,850.00 $113,739.78
10205611 $25,000.00 $24,972.96
10205612 $38,400.00 $38,342.88
10205613 $76,500.00 $76,417.41
10205614 $67,500.00 $66,856.85
10205615 $23,650.00 $23,638.34
10205616 $104,000.00 $103,828.28
10205617 $120,000.00 $119,779.90
10205618 $220,000.00 $219,705.57
10205619 $34,400.00 $34,382.29
10205620 $170,000.00 $169,682.98
10205621 $18,000.00 $17,905.34
10205622 $232,000.00 $231,636.38
10205623 $150,000.00 $149,752.37
10205624 $88,500.00 $88,404.24
10205625 $191,250.00 $190,861.68
10205626 $16,500.00 $16,445.97
10205627 $27,000.00 $26,678.01
10205628 $57,600.00 $57,540.05
10205629 $52,250.00 $52,223.10
10205630 $166,400.00 $165,380.02
10205632 $117,000.00 $116,838.41
10205633 $124,000.00 $123,690.56
10205636 $139,200.00 $138,782.06
10205639 $131,000.00 $130,651.88
10205641 $104,500.00 $104,352.54
10205644 $372,300.00 $371,267.83
10205650 $171,000.00 $170,597.40
10205651 $156,400.00 $156,135.01
10205652 $56,000.00 $55,959.79
10205654 $51,000.00 $50,884.36
10205656 $150,000.00 $149,764.92
10205657 $430,000.00 $428,883.08
10205658 $102,000.00 $101,875.98
10205660 $72,000.00 $71,950.05
10205661 $167,440.00 $167,170.33
Page 32
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205664 $198,500.00 $198,270.77
10205665 $50,250.00 $50,189.56
10205668 $54,400.00 $54,305.38
10205671 $375,000.00 $374,006.21
10205674 $32,250.00 $32,218.82
10205675 $81,900.00 $81,764.49
10205677 $57,375.00 $57,246.47
10205678 $61,500.00 $61,426.06
10205679 $345,600.00 $344,926.99
10205681 $242,000.00 $241,849.77
10205689 $124,800.00 $124,559.61
10205691 $178,500.00 $178,036.34
10205692 $42,000.00 $41,968.24
10205693 $105,600.00 $105,505.17
10205694 $121,000.00 $120,658.73
10205695 $45,000.00 $44,967.68
10205698 $70,000.00 $69,914.88
10205699 $63,000.00 $62,948.34
10205700 $79,100.00 $78,897.47
10205701 $30,000.00 $29,986.17
10205702 $71,000.00 $70,921.33
10205703 $93,600.00 $93,481.43
10205704 $168,750.00 $168,615.30
10205705 $57,400.00 $57,352.94
10205706 $56,000.00 $55,963.03
10205708 $123,500.00 $123,390.04
10205709 $76,500.00 $76,437.27
10205711 $204,000.00 $203,832.72
10205712 $76,800.00 $76,724.14
10205713 $124,000.00 $123,848.93
10205714 $37,499.00 $37,425.31
10205715 $45,900.00 $45,824.45
10205717 $63,000.00 $62,949.70
10205718 $48,700.00 $48,651.89
10205719 $40,000.00 $39,902.28
10205720 $17,600.00 $17,593.54
10205721 $110,000.00 $109,376.06
10205722 $23,800.00 $23,684.66
10205723 $33,600.00 $33,429.61
10205724 $106,400.00 $106,270.64
10205725 $67,200.00 $67,140.29
10205726 $39,200.00 $39,171.87
10205728 $27,000.00 $26,869.18
10205729 $60,450.00 $60,390.29
10205730 $80,800.00 $80,701.76
10205731 $83,000.00 $82,934.18
10205732 $79,200.00 $79,093.15
10205733 $58,400.00 $58,335.96
10205734 $108,750.00 $108,579.81
Page 33
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205735 $110,000.00 $109,916.81
10205736 $74,500.00 $74,440.54
10205737 $228,000.00 $227,749.93
10205738 $52,500.00 $52,448.15
10205739 $65,250.00 $65,166.50
10205740 $176,200.00 $176,059.31
10205742 $83,250.00 $83,187.02
10205743 $286,000.00 $285,717.54
10205745 $288,000.00 $287,571.18
10205747 $112,000.00 $111,877.18
10205748 $24,000.00 $23,912.11
10205750 $73,200.00 $73,166.26
10205751 $40,800.00 $40,767.44
10205752 $76,000.00 $75,924.94
10205754 $37,100.00 $37,077.43
10205757 $82,500.00 $82,432.90
10205758 $152,500.00 $152,361.59
10205759 $232,000.00 $231,732.08
10205761 $140,000.00 $139,846.17
10205762 $228,750.00 $228,562.63
10205763 $225,000.00 $224,752.77
10205764 $63,000.00 $62,906.19
10205765 $90,400.00 $90,282.92
10205766 $56,250.00 $56,204.48
10205767 $58,000.00 $57,692.31
10205768 $36,000.00 $35,979.26
10205769 $43,200.00 $43,144.71
10205770 $68,800.00 $68,745.08
10205771 $42,400.00 $42,355.87
10205772 $35,000.00 $34,957.45
10205773 $249,500.00 $248,331.91
10205774 $84,000.00 $83,925.37
10205775 $88,000.00 $87,933.43
10205776 $131,250.00 $131,120.37
10205780 $53,000.00 $52,765.79
10205781 $66,500.00 $66,380.55
10205782 $94,000.00 $93,891.44
10205783 $92,000.00 $91,863.00
10205785 $105,750.00 $105,678.26
10205786 $148,500.00 $147,514.60
10205787 $136,800.00 $136,650.00
10205788 $367,500.00 $367,117.49
10205790 $52,000.00 $51,871.12
10205791 $85,000.00 $84,896.64
10205793 $56,000.00 $55,924.59
10205794 $85,125.00 $85,048.56
10205795 $50,250.00 $49,992.28
10205796 $65,000.00 $64,402.62
10205797 $100,750.00 $100,583.63
Page 34
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205798 $176,250.00 $176,105.25
10205799 $83,000.00 $82,908.80
10205801 $131,250.00 $131,158.00
10205802 $137,600.00 $137,487.17
10205803 $50,000.00 $49,757.71
10205804 $52,500.00 $52,469.47
10205805 $44,550.00 $44,503.64
10205806 $39,750.00 $39,718.26
10205807 $19,500.00 $19,417.75
10205808 $39,200.00 $39,168.70
10205809 $38,000.00 $37,962.48
10205811 $33,000.00 $32,976.35
10205812 $67,500.00 $67,425.84
10205813 $50,560.00 $50,476.86
10205814 $80,000.00 $79,952.68
10205815 $76,000.00 $75,924.93
10205816 $150,400.00 $150,224.51
10205817 $28,150.00 $24,532.04
10205818 $106,200.00 $106,123.30
10205819 $61,600.00 $61,351.92
10205820 $26,250.00 $26,118.59
10205821 $80,000.00 $79,934.39
10205824 $118,400.00 $118,300.04
10205825 $113,600.00 $113,506.84
10205827 $102,400.00 $102,316.02
10205828 $76,000.00 $75,937.68
10205829 $96,000.00 $95,814.30
10205831 $170,000.00 $169,823.06
10205834 $71,250.00 $71,189.99
10205835 $52,425.00 $52,385.34
10205837 $119,000.00 $118,908.03
10205838 $62,000.00 $61,928.40
10205839 $374,000.00 $373,649.60
10205841 $154,050.00 $153,842.17
10205843 $41,600.00 $41,563.04
10205844 $50,400.00 $50,350.12
10205845 $30,940.00 $30,921.19
10205851 $91,800.00 $91,714.01
10205852 $40,000.00 $39,951.27
10205853 $76,800.00 $76,505.90
10205855 $108,800.00 $108,716.65
10205856 $268,000.00 $267,807.59
10205859 $163,718.00 $163,474.24
10205863 $110,000.00 $109,894.74
10205866 $83,700.00 $83,644.76
10205868 $128,000.00 $127,866.79
10205871 $360,000.00 $359,562.28
10205872 $26,700.00 $26,284.41
10205874 $42,500.00 $42,460.18
Page 35
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205875 $140,000.00 $139,868.83
10205877 $63,000.00 $62,943.92
10205879 $99,000.00 $98,891.43
10205881 $276,000.00 $275,748.19
10205884 $96,000.00 $95,914.53
10205886 $108,000.00 $107,868.42
10205887 $183,750.00 $183,577.84
10205889 $44,450.00 $44,411.74
10205890 $85,000.00 $84,920.37
10205891 $72,000.00 $71,733.68
10205892 $189,600.00 $189,431.20
10205893 $80,800.00 $80,724.29
10205894 $70,000.00 $69,930.86
10205895 $127,050.00 $126,910.40
10205897 $86,800.00 $86,709.66
10205901 $175,000.00 $174,787.21
10205903 $259,250.00 $258,844.30
10205906 $120,000.00 $119,887.57
10205908 $103,700.00 $103,477.53
10205910 $123,750.00 $123,627.78
10205911 $47,200.00 $47,161.09
10205913 $55,500.00 $55,464.27
10205914 $93,000.00 $92,931.17
10205915 $95,200.00 $95,119.82
10205917 $141,950.00 $141,827.85
10205918 $177,000.00 $176,795.59
10205919 $130,000.00 $129,925.06
10205920 $119,000.00 $118,894.28
10205921 $57,200.00 $57,137.15
10205923 $156,616.00 $156,476.56
10205924 $40,000.00 $39,958.36
10205930 $114,400.00 $114,308.68
10205931 $79,050.00 $78,913.49
10205933 $156,000.00 $155,882.01
10205938 $72,000.00 $71,935.89
10205939 $48,750.00 $48,706.58
10205945 $112,000.00 $111,895.08
10205947 $56,000.00 $55,893.46
10205951 $208,000.00 $207,747.09
10205952 $180,500.00 $180,286.10
10205953 $30,800.00 $30,769.58
10205955 $24,500.00 $24,475.80
10205956 $28,000.00 $27,972.35
10205957 $36,400.00 $36,364.05
10205969 $89,050.00 $88,879.32
10205970 $264,000.00 $263,645.95
10205971 $72,250.00 $72,078.69
10205972 $42,300.00 $42,265.31
10205973 $155,925.00 $155,667.05
Page 36
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10205974 $109,600.00 $109,478.43
10205976 $28,800.00 $28,733.91
10205977 $204,750.00 $204,475.43
10205978 $169,300.00 $169,048.18
10205979 $395,000.00 $394,346.50
10205980 $191,250.00 $190,818.59
10205981 $98,760.00 $98,576.25
10205982 $44,800.00 $44,759.86
10205983 $86,400.00 $86,241.87
10205984 $348,000.00 $347,663.16
10205985 $161,500.00 $161,305.79
10205986 $80,750.00 $80,641.94
10205987 $114,400.00 $114,317.87
10205988 $187,500.00 $187,328.22
10205989 $391,000.00 $390,354.47
10205990 $146,250.00 $146,008.04
10205991 $128,625.00 $128,474.50
10205992 $396,786.00 $396,165.67
10205993 $97,750.00 $97,604.62
10205994 $63,070.00 $62,994.06
10205995 $101,500.00 $101,385.58
10205996 $96,750.00 $96,589.92
10205997 $79,500.00 $79,436.54
10205998 $308,000.00 $307,695.80
10205999 $120,000.00 $119,927.06
10206000 $45,000.00 $44,945.69
10206001 $116,800.00 $116,657.98
10206002 $108,000.00 $107,893.34
10206003 $60,750.00 $60,706.47
10206004 $34,650.00 $34,624.90
10206005 $58,125.00 $58,089.27
10206006 $284,000.00 $283,653.98
10206007 $120,000.00 $119,783.96
10206008 $86,250.00 $86,127.85
10206009 $134,800.00 $134,669.38
10206010 $185,000.00 $184,738.02
10206011 $45,000.00 $44,974.07
10206012 $31,000.00 $30,858.51
10206013 $88,000.00 $87,820.95
10206014 $25,000.00 $24,984.24
10206015 $250,000.00 $249,632.91
10206016 $44,000.00 $43,968.41
10206017 $252,000.00 $251,763.90
10206018 $156,750.00 $156,621.45
10206019 $96,800.00 $96,676.57
10206020 $108,000.00 $107,426.52
10206021 $83,500.00 $83,425.82
10206022 $126,000.00 $125,909.53
10206023 $110,250.00 $110,161.99
Page 37
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206024 $26,250.00 $26,237.07
10206025 $172,000.00 $171,889.54
10206026 $112,500.00 $112,400.05
10206027 $52,500.00 $52,360.97
10206028 $21,000.00 $20,944.07
10206029 $176,000.00 $175,816.81
10206030 $57,750.00 $57,703.90
10206032 $40,800.00 $40,761.77
10206033 $116,000.00 $115,804.78
10206034 $101,500.00 $101,418.98
10206036 $94,000.00 $93,873.18
10206037 $111,000.00 $110,862.89
10206038 $72,000.00 $71,729.71
10206039 $99,600.00 $99,478.65
10206040 $108,000.00 $107,911.44
10206041 $48,750.00 $48,673.71
10206042 $24,000.00 $23,980.32
10206043 $90,000.00 $89,878.34
10206045 $133,500.00 $133,375.17
10206046 $71,400.00 $71,329.48
10206047 $69,750.00 $69,703.14
10206048 $97,500.00 $97,413.34
10206049 $76,675.00 $76,481.87
10206050 $39,000.00 $38,968.86
10206051 $100,000.00 $99,890.35
10206052 $31,200.00 $31,178.60
10206053 $120,000.00 $119,881.47
10206054 $68,000.00 $67,605.33
10206056 $105,600.00 $105,521.36
10206057 $97,500.00 $97,420.03
10206058 $84,000.00 $83,917.03
10206059 $57,000.00 $56,930.70
10206060 $47,600.00 $47,557.72
10206061 $110,400.00 $110,316.49
10206062 $85,600.00 $85,484.75
10206063 $68,000.00 $67,631.06
10206064 $30,250.00 $30,027.36
10206065 $60,750.00 $60,703.50
10206066 $100,000.00 $99,890.33
10206067 $86,800.00 $86,683.13
10206068 $68,200.00 $68,144.08
10206069 $20,000.00 $19,907.44
10206070 $30,000.00 $29,879.18
10206071 $14,700.00 $14,643.60
10206072 $31,600.00 $31,569.89
10206073 $75,900.00 $75,865.01
10206074 $35,200.00 $35,087.33
10206075 $40,000.00 $39,960.50
10206076 $30,000.00 $29,938.96
Page 38
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206077 $184,000.00 $183,836.66
10206078 $240,000.00 $239,808.43
10206079 $13,500.00 $13,443.33
10206080 $47,100.00 $47,049.68
10206081 $95,900.00 $95,821.36
10206082 $27,375.00 $27,253.93
10206083 $72,000.00 $71,809.33
10206084 $76,100.00 $76,032.40
10206085 $68,000.00 $67,934.24
10206086 $57,200.00 $57,143.47
10206087 $45,200.00 $44,782.03
10206088 $73,500.00 $73,457.63
10206089 $28,000.00 $27,914.76
10206091 $88,000.00 $87,489.23
10206092 $99,000.00 $98,902.43
10206093 $165,000.00 $164,819.03
10206094 $60,000.00 $59,695.74
10206095 $121,550.00 $121,429.95
10206096 $30,000.00 $29,982.69
10206097 $50,400.00 $50,370.94
10206098 $268,000.00 $267,624.28
10206099 $110,250.00 $110,151.83
10206100 $28,000.00 $27,851.32
10206101 $66,400.00 $66,319.26
10206102 $130,500.00 $130,356.61
10206103 $144,650.00 $144,534.53
10206104 $150,000.00 $149,808.04
10206105 $55,250.00 $55,231.96
10206107 $137,500.00 $137,390.24
10206108 $92,250.00 $92,168.04
10206109 $32,500.00 $32,488.07
10206110 $30,000.00 $29,884.88
10206111 $41,250.00 $41,216.18
10206112 $69,600.00 $69,542.91
10206113 $46,500.00 $46,376.85
10206114 $183,750.00 $183,586.74
10206115 $54,760.00 $54,711.34
10206116 $38,925.00 $38,902.56
10206117 $53,400.00 $53,374.04
10206118 $124,000.00 $123,815.36
10206119 $87,000.00 $86,914.08
10206120 $75,200.00 $75,138.33
10206121 $40,000.00 $39,948.80
10206122 $36,800.00 $36,778.24
10206123 $66,200.00 $65,848.49
10206124 $87,575.00 $87,462.93
10206125 $39,000.00 $38,974.94
10206126 $120,000.00 $119,596.22
10206127 $88,000.00 $87,929.75
Page 39
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206128 $108,000.00 $107,476.67
10206129 $72,800.00 $72,413.44
10206130 $240,000.00 $239,604.63
10206131 $140,000.00 $139,875.62
10206132 $59,000.00 $58,951.62
10206133 $69,000.00 $68,938.71
10206134 $56,175.00 $56,120.10
10206135 $200,000.00 $199,802.46
10206136 $44,700.00 $44,667.91
10206137 $160,000.00 $159,131.94
10206138 $328,000.00 $327,731.03
10206139 $92,800.00 $92,700.86
10206140 $40,800.00 $40,698.88
10206141 $77,000.00 $76,955.62
10206142 $132,000.00 $131,905.23
10206143 $112,000.00 $111,910.59
10206144 $39,000.00 $38,968.86
10206145 $72,750.00 $70,658.20
10206147 $113,750.00 $113,625.27
10206148 $55,000.00 $54,708.21
10206149 $95,000.00 $94,843.80
10206150 $50,000.00 $49,880.06
10206151 $232,000.00 $231,619.49
10206152 $66,500.00 $66,381.83
10206153 $52,800.00 $52,767.90
10206154 $40,000.00 $39,964.46
10206155 $136,000.00 $135,888.48
10206156 $26,250.00 $26,199.28
10206157 $86,250.00 $86,188.20
10206158 $114,400.00 $114,298.34
10206159 $113,600.00 $113,506.86
10206160 $64,275.00 $64,196.85
10206161 $59,500.00 $59,461.80
10206162 $86,400.00 $86,171.19
10206163 $40,200.00 $40,182.52
10206165 $259,200.00 $258,957.16
10206166 $70,400.00 $70,334.03
10206167 $112,000.00 $111,883.42
10206168 $38,000.00 $37,966.24
10206169 $130,400.00 $130,301.38
10206170 $235,500.00 $235,309.27
10206171 $101,250.00 $101,169.19
10206172 $74,400.00 $74,346.58
10206173 $13,500.00 $13,435.51
10206174 $43,800.00 $43,779.39
10206175 $22,000.00 $21,911.40
10206176 $50,700.00 $50,663.61
10206177 $187,500.00 $187,333.41
10206178 $53,250.00 $53,115.88
Page 40
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206179 $36,000.00 $35,804.69
10206180 $72,000.00 $71,936.01
10206181 $80,680.00 $80,630.96
10206182 $43,000.00 $42,826.82
10206183 $175,000.00 $174,691.75
10206184 $105,000.00 $104,924.60
10206185 $62,000.00 $61,931.87
10206186 $92,000.00 $91,875.88
10206188 $31,200.00 $31,127.59
10206189 $91,500.00 $91,357.80
10206190 $75,000.00 $74,925.93
10206191 $71,500.00 $71,310.36
10206192 $59,200.00 $58,881.14
10206193 $56,000.00 $55,944.69
10206194 $78,400.00 $78,335.71
10206195 $47,500.00 $47,464.08
10206196 $25,000.00 $24,898.46
10206197 $105,000.00 $104,924.60
10206199 $31,000.00 $30,988.61
10206200 $90,000.00 $89,920.03
10206201 $116,800.00 $116,634.59
10206202 $184,000.00 $183,797.82
10206203 $80,000.00 $79,934.39
10206204 $95,250.00 $95,173.97
10206205 $42,000.00 $41,986.28
10206206 $351,600.00 $351,168.08
10206207 $73,450.00 $73,352.53
10206208 $119,000.00 $118,910.00
10206209 $59,500.00 $59,219.22
10206210 $20,000.00 $19,903.09
10206211 $180,000.00 $179,792.12
10206212 $87,750.00 $87,663.34
10206213 $105,300.00 $105,088.04
10206214 $25,000.00 $24,979.49
10206215 $12,900.00 $12,889.13
10206216 $78,750.00 $78,679.87
10206218 $41,200.00 $41,068.12
10206219 $164,000.00 $163,440.60
10206220 $56,800.00 $56,682.49
10206221 $20,900.00 $20,822.80
10206222 $60,000.00 $59,934.21
10206223 $108,000.00 $107,911.44
10206224 $85,000.00 $84,916.05
10206225 $47,500.00 $47,457.77
10206226 $57,400.00 $57,366.05
10206227 $49,500.00 $49,477.17
10206228 $85,000.00 $84,692.04
10206229 $65,000.00 $64,912.31
10206230 $66,400.00 $66,078.25
Page 41
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206231 $28,700.00 $28,679.43
10206232 $26,900.00 $26,877.96
10206234 $52,500.00 $52,466.17
10206235 $87,600.00 $86,835.85
10206236 $130,000.00 $129,833.63
10206237 $74,000.00 $73,905.30
10206238 $86,000.00 $85,883.97
10206239 $72,000.00 $71,920.88
10206240 $132,000.00 $131,821.91
10206241 $136,000.00 $135,891.43
10206242 $73,600.00 $73,348.95
10206243 $84,000.00 $83,460.66
10206244 $88,875.00 $88,766.94
10206245 $80,250.00 $80,185.94
10206246 $116,000.00 $115,687.51
10206248 $131,200.00 $131,118.64
10206249 $56,250.00 $56,188.19
10206250 $191,250.00 $191,039.86
10206251 $35,000.00 $34,974.91
10206252 $28,000.00 $27,979.93
10206253 $15,000.00 $14,861.65
10206254 $25,200.00 $25,181.94
10206255 $152,000.00 $151,847.90
10206256 $21,000.00 $20,984.11
10206257 $55,200.00 $55,154.51
10206258 $84,000.00 $83,788.39
10206259 $47,000.00 $46,961.44
10206260 $192,000.00 $191,789.03
10206261 $198,000.00 $197,837.63
10206262 $131,000.00 $130,883.35
10206263 $37,500.00 $37,473.07
10206264 $103,200.00 $103,092.59
10206265 $264,000.00 $263,725.23
10206266 $74,400.00 $74,333.91
10206267 $86,250.00 $86,173.36
10206268 $86,000.00 $85,923.42
10206269 $52,650.00 $52,598.00
10206270 $99,200.00 $99,073.05
10206271 $84,750.00 $84,674.71
10206272 $24,750.00 $24,375.73
10206273 $174,400.00 $174,204.49
10206274 $68,000.00 $67,908.25
10206275 $93,750.00 $93,657.41
10206276 $55,000.00 $54,968.28
10206277 $78,400.00 $78,310.75
10206278 $76,300.00 $76,216.15
10206280 $104,500.00 $104,090.51
10206281 $72,500.00 $72,431.34
10206283 $71,700.00 $71,648.63
Page 42
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206284 $51,600.00 $51,508.31
10206285 $42,000.00 $41,962.60
10206286 $93,600.00 $93,516.83
10206287 $150,000.00 $149,877.00
10206288 $86,400.00 $86,142.68
10206289 $208,000.00 $207,476.01
10206290 $97,500.00 $97,405.70
10206291 $62,000.00 $61,914.82
10206292 $47,200.00 $47,148.14
10206293 $88,000.00 $87,881.49
10206294 $85,840.00 $85,769.60
10206295 $112,000.00 $111,900.49
10206296 $78,500.00 $78,449.90
10206297 $84,000.00 $83,936.48
10206298 $140,000.00 $139,869.69
10206299 $86,400.00 $86,283.43
10206300 $87,200.00 $87,130.40
10206301 $176,000.00 $175,898.78
10206302 $61,750.00 $61,699.36
10206303 $78,000.00 $77,902.38
10206304 $76,000.00 $75,946.71
10206305 $76,500.00 $76,297.42
10206306 $96,000.00 $95,914.53
10206307 $43,000.00 $42,975.22
10206308 $48,500.00 $48,465.24
10206309 $68,000.00 $67,939.59
10206310 $41,600.00 $41,389.03
10206311 $61,500.00 $61,464.54
10206312 $44,800.00 $44,447.90
10206313 $193,000.00 $192,739.61
10206314 $90,500.00 $90,395.50
10206315 $51,000.00 $50,974.91
10206316 $82,600.00 $82,410.11
10206317 $120,000.00 $119,750.95
10206318 $66,000.00 $65,868.49
10206319 $105,000.00 $104,906.69
10206320 $87,000.00 $86,904.60
10206321 $32,500.00 $32,362.92
10206322 $32,500.00 $32,362.92
10206323 $76,000.00 $75,925.42
10206324 $92,625.00 $92,551.06
10206325 $68,600.00 $68,518.26
10206326 $89,000.00 $88,886.10
10206327 $98,000.00 $97,919.64
10206328 $92,000.00 $91,882.26
10206329 $150,000.00 $149,832.06
10206330 $101,250.00 $101,159.86
10206331 $153,750.00 $153,524.27
10206332 $74,750.00 $74,583.56
Page 43
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206333 $165,000.00 $164,845.43
10206334 $32,000.00 $31,658.63
10206335 $63,200.00 $63,130.70
10206336 $177,600.00 $177,372.72
10206337 $33,000.00 $32,970.63
10206338 $150,000.00 $149,859.47
10206339 $71,000.00 $70,904.41
10206340 $174,400.00 $174,256.99
10206341 $56,250.00 $56,202.62
10206342 $21,000.00 $20,909.35
10206343 $33,000.00 $32,860.82
10206344 $109,500.00 $109,421.38
10206345 $108,000.00 $107,881.32
10206346 $119,000.00 $118,914.55
10206347 $231,000.00 $230,746.17
10206348 $114,400.00 $114,274.29
10206349 $64,500.00 $64,447.11
10206351 $45,000.00 $44,964.06
10206352 $35,700.00 $35,683.53
10206353 $89,700.00 $89,628.38
10206354 $46,800.00 $46,751.29
10206355 $57,750.00 $57,679.63
10206356 $65,999.00 $65,949.08
10206357 $85,600.00 $85,495.92
10206358 $97,500.00 $97,387.41
10206359 $123,750.00 $123,607.08
10206360 $341,250.00 $340,894.82
10206361 $62,000.00 $61,899.97
10206362 $155,000.00 $154,903.68
10206363 $76,000.00 $75,854.59
10206364 $31,200.00 $31,173.45
10206365 $53,550.00 $53,461.78
10206366 $151,000.00 $150,834.08
10206367 $208,000.00 $207,712.78
10206368 $107,200.00 $107,088.33
10206369 $35,700.00 $35,675.78
10206370 $44,000.00 $43,917.39
10206371 $196,000.00 $195,627.07
10206372 $65,250.00 $65,219.92
10206373 $75,000.00 $74,876.46
10206374 $144,500.00 $144,349.59
10206375 $272,000.00 $271,651.91
10206376 $87,000.00 $86,893.17
10206377 $112,800.00 $112,662.86
10206378 $35,750.00 $35,712.78
10206379 $60,000.00 $59,930.71
10206380 $93,500.00 $93,397.26
10206381 $69,000.00 $68,950.57
10206382 $75,000.00 $74,876.46
Page 44
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206383 $57,000.00 $56,934.18
10206384 $82,000.00 $81,952.83
10206385 $143,200.00 $143,050.95
10206386 $42,575.00 $42,551.84
10206387 $208,200.00 $207,919.09
10206388 $284,000.00 $282,474.13
10206389 $108,000.00 $107,743.11
10206390 $180,000.00 $179,146.02
10206391 $120,000.00 $118,590.71
10206392 $56,250.00 $56,112.91
10206393 $69,750.00 $69,532.06
10206394 $95,250.00 $95,050.33
10206395 $44,500.00 $44,460.43
10206396 $45,750.00 $45,700.61
10206397 $46,800.00 $46,692.49
10206398 $135,000.00 $132,816.96
10206399 $45,750.00 $45,377.78
10206400 $26,400.00 $26,290.18
10206401 $68,250.00 $68,186.41
10206402 $113,200.00 $112,946.39
10206403 $116,250.00 $116,177.47
10206405 $102,750.00 $102,545.42
10206406 $92,000.00 $91,834.79
10206407 $82,000.00 $81,078.20
10206408 $37,100.00 $37,067.76
10206409 $66,750.00 $66,637.00
10206410 $56,000.00 $55,918.84
10206411 $268,000.00 $267,406.61
10206412 $46,000.00 $45,933.34
10206413 $168,000.00 $167,698.51
10206414 $92,000.00 $91,699.44
10206415 $34,400.00 $34,346.36
10206416 $136,800.00 $136,481.71
10206417 $18,750.00 $18,710.67
10206418 $10,000.00 $9,966.75
10206419 $152,000.00 $151,362.31
10206422 $104,000.00 $103,745.30
10206423 $66,000.00 $65,861.53
10206424 $162,400.00 $161,925.33
10206425 $147,000.00 $146,756.83
10206426 $108,750.00 $108,629.50
10206427 $108,750.00 $108,629.50
10206428 $46,750.00 $46,726.97
10206429 $142,400.00 $142,228.49
10206430 $77,250.00 $76,781.03
10206431 $115,500.00 $115,332.63
10206432 $96,250.00 $95,931.02
10206433 $51,100.00 $51,051.65
10206434 $23,250.00 $23,176.35
Page 45
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206435 $96,000.00 $95,266.19
10206436 $59,800.00 $59,723.47
10206437 $79,200.00 $79,128.12
10206438 $209,000.00 $208,681.00
10206440 $41,400.00 $40,921.32
10206441 $48,000.00 $47,963.41
10206442 $465,000.00 $464,496.92
10206443 $150,400.00 $150,151.18
10206444 $95,625.00 $95,451.78
10206445 $46,800.00 $46,732.20
10206446 $122,500.00 $122,399.55
10206447 $80,000.00 $79,924.07
10206448 $90,000.00 $89,928.15
10206449 $73,500.00 $73,375.68
10206450 $159,000.00 $158,869.62
10206451 $256,000.00 $255,426.46
10206452 $91,200.00 $91,051.82
10206453 $28,000.00 $27,987.09
10206454 $58,000.00 $57,918.16
10206455 $64,000.00 $63,930.76
10206456 $88,000.00 $87,933.45
10206457 $70,760.00 $70,725.57
10206458 $56,250.00 $56,133.68
10206459 $64,500.00 $64,453.67
10206460 $45,000.00 $44,959.59
10206461 $60,000.00 $59,952.11
10206462 $83,600.00 $83,508.14
10206463 $208,000.00 $207,833.93
10206464 $36,000.00 $35,968.01
10206465 $118,200.00 $118,034.96
10206466 $32,000.00 $31,590.64
10206467 $38,500.00 $38,452.69
10206468 $340,000.00 $339,568.59
10206469 $57,000.00 $56,953.26
10206470 $31,500.00 $31,438.26
10206471 $76,400.00 $76,302.35
10206472 $160,000.00 $159,782.38
10206473 $48,750.00 $48,722.22
10206474 $56,000.00 $55,841.81
10206475 $85,600.00 $85,251.66
10206476 $56,250.00 $56,205.08
10206477 $98,000.00 $97,867.78
10206478 $80,800.00 $80,729.31
10206479 $25,900.00 $25,719.41
10206480 $124,500.00 $124,332.03
10206481 $63,800.00 $63,738.23
10206482 $57,500.00 $57,454.10
10206483 $62,250.00 $62,206.36
10206484 $50,250.00 $50,214.76
Page 46
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206485 $27,300.00 $27,179.25
10206486 $124,000.00 $123,898.33
10206487 $128,000.00 $127,895.02
10206488 $72,000.00 $69,617.10
10206490 $158,400.00 $158,164.41
10206491 $138,750.00 $138,645.05
10206492 $165,000.00 $164,754.33
10206493 $40,000.00 $39,950.59
10206494 $98,400.00 $98,268.32
10206495 $49,200.00 $49,145.94
10206496 $40,000.00 $39,965.24
10206497 $48,000.00 $47,960.63
10206498 $72,000.00 $71,964.73
10206499 $58,450.00 $58,415.71
10206500 $200,000.00 $199,831.55
10206501 $183,500.00 $183,349.53
10206502 $51,000.00 $50,907.75
10206503 $144,000.00 $143,878.70
10206504 $15,750.00 $15,719.06
10206506 $80,250.00 $80,086.54
10206507 $97,500.00 $97,420.03
10206508 $65,300.00 $65,235.50
10206509 $145,500.00 $145,323.08
10206510 $18,750.00 $18,737.28
10206511 $120,000.00 $119,909.24
10206512 $45,000.00 $44,964.08
10206513 $116,000.00 $115,907.40
10206514 $72,750.00 $72,690.35
10206515 $94,500.00 $94,382.12
10206516 $191,250.00 $191,072.71
10206517 $54,750.00 $54,708.59
10206518 $40,125.00 $40,101.88
10206519 $98,800.00 $98,676.11
10206520 $188,000.00 $187,865.02
10206521 $130,900.00 $130,236.16
10206522 $80,000.00 $79,941.07
10206523 $66,000.00 $65,975.76
10206524 $270,000.00 $269,615.01
10206525 $49,238.00 $49,164.69
10206526 $48,750.00 $48,677.41
10206527 $38,000.00 $37,977.67
10206528 $73,600.00 $73,523.39
10206529 $77,250.00 $76,986.50
10206530 $74,750.00 $74,642.42
10206531 $318,750.00 $318,488.63
10206532 $54,375.00 $54,331.51
10206533 $17,875.00 $17,869.79
10206534 $67,500.00 $67,183.96
10206535 $54,400.00 $54,346.28
Page 47
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206536 $272,000.00 $271,776.96
10206537 $161,250.00 $161,072.82
10206539 $17,500.00 $17,443.27
10206540 $112,000.00 $111,833.24
10206541 $83,200.00 $82,990.49
10206542 $30,800.00 $30,728.43
10206544 $49,700.00 $49,568.04
10206545 $52,000.00 $51,759.33
10206546 $190,000.00 $189,743.65
10206547 $78,500.00 $78,413.92
10206548 $77,600.00 $77,514.73
10206549 $53,250.00 $53,216.61
10206551 $168,000.00 $167,872.93
10206552 $61,500.00 $61,421.29
10206553 $60,000.00 $59,734.63
10206554 $150,000.00 $149,866.45
10206555 $122,250.00 $122,098.33
10206556 $56,400.00 $56,353.75
10206557 $114,000.00 $113,846.19
10206558 $35,000.00 $34,968.91
10206559 $85,600.00 $85,495.92
10206560 $57,000.00 $56,969.66
10206561 $56,000.00 $55,912.36
10206562 $25,500.00 $25,442.77
10206563 $66,775.00 $66,701.77
10206564 $100,000.00 $99,917.99
10206565 $90,000.00 $89,915.68
10206566 $127,000.00 $126,867.94
10206567 $37,800.00 $37,647.78
10206568 $45,000.00 $44,963.10
10206570 $48,000.00 $47,977.88
10206571 $66,400.00 $66,334.42
10206572 $75,000.00 $74,808.25
10206573 $32,000.00 $31,968.40
10206575 $45,000.00 $44,979.26
10206576 $41,250.00 $41,234.53
10206577 $129,600.00 $129,434.15
10206578 $61,600.00 $61,295.66
10206579 $108,000.00 $107,881.58
10206580 $102,000.00 $101,906.93
10206582 $96,000.00 $95,859.43
10206583 $60,000.00 $59,934.07
10206584 $21,500.00 $21,447.41
10206585 $26,000.00 $25,985.84
10206586 $87,750.00 $87,663.34
10206587 $50,000.00 $49,945.06
10206588 $61,600.00 $61,562.08
10206589 $101,250.00 $101,160.05
10206590 $61,600.00 $61,557.04
Page 48
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206591 $112,000.00 $111,908.15
10206592 $116,000.00 $115,916.72
10206593 $62,000.00 $61,361.03
10206594 $15,000.00 $14,950.12
10206596 $224,000.00 $223,754.38
10206597 $142,500.00 $142,335.42
10206599 $72,000.00 $71,634.88
10206601 $21,000.00 $20,988.66
10206602 $25,800.00 $25,691.18
10206603 $36,750.00 $36,722.74
10206604 $105,200.00 $105,116.01
10206605 $71,250.00 $71,163.37
10206607 $90,000.00 $89,872.55
10206608 $23,075.00 $23,056.58
10206609 $42,250.00 $42,216.27
10206610 $93,750.00 $93,647.08
10206611 $115,500.00 $115,344.18
10206612 $51,800.00 $51,560.26
10206613 $68,250.00 $68,182.60
10206614 $72,750.00 $72,700.63
10206615 $172,000.00 $171,859.74
10206617 $112,000.00 $111,875.90
10206618 $52,000.00 $51,942.99
10206619 $12,000.00 $11,975.30
10206620 $124,800.00 $124,700.39
10206621 $116,250.00 $116,146.02
10206622 $108,500.00 $108,403.60
10206623 $30,000.00 $29,974.05
10206625 $88,000.00 $87,923.39
10206626 $57,750.00 $57,686.55
10206627 $16,500.00 $16,466.42
10206628 $152,000.00 $151,849.87
10206630 $67,500.00 $67,444.65
10206631 $38,250.00 $38,219.46
10206632 $68,000.00 $67,942.28
10206633 $41,150.00 $41,107.17
10206634 $311,250.00 $310,871.56
10206635 $56,000.00 $55,737.69
10206636 $161,000.00 $160,871.48
10206637 $227,500.00 $227,313.45
10206638 $100,000.00 $99,917.99
10206639 $96,000.00 $95,870.49
10206640 $136,500.00 $136,334.02
10206641 $140,000.00 $139,861.72
10206642 $54,000.00 $53,961.22
10206643 $247,500.00 $247,297.05
10206644 $18,000.00 $17,964.64
10206645 $37,600.00 $37,448.71
10206646 $20,000.00 $19,911.55
Page 49
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206647 $65,600.00 $65,359.00
10206648 $128,000.00 $127,897.81
10206649 $47,250.00 $47,227.02
10206650 $31,200.00 $31,167.11
10206651 $24,000.00 $23,980.32
10206652 $63,000.00 $62,949.70
10206653 $67,500.00 $67,422.05
10206654 $45,600.00 $45,549.89
10206655 $148,000.00 $147,853.84
10206656 $140,000.00 $139,885.20
10206657 $26,500.00 $26,377.36
10206658 $40,730.00 $40,700.75
10206659 $97,000.00 $96,862.64
10206660 $28,000.00 $27,968.97
10206661 $56,800.00 $56,749.53
10206662 $127,500.00 $127,395.45
10206663 $72,000.00 $71,929.34
10206664 $165,000.00 $164,894.03
10206665 $202,500.00 $202,296.82
10206666 $40,000.00 $39,964.33
10206667 $270,000.00 $269,703.93
10206668 $140,000.00 $139,268.17
10206669 $106,400.00 $106,256.46
10206670 $90,000.00 $89,929.67
10206671 $188,000.00 $187,845.83
10206672 $158,000.00 $157,786.83
10206673 $56,250.00 $56,217.58
10206674 $75,000.00 $74,958.05
10206675 $40,000.00 $39,899.24
10206676 $35,000.00 $34,778.36
10206677 $132,600.00 $132,143.47
10206678 $137,250.00 $137,148.96
10206679 $93,600.00 $93,480.21
10206680 $15,600.00 $15,588.81
10206681 $37,000.00 $36,785.44
10206682 $93,000.00 $92,923.73
10206683 $56,000.00 $55,950.13
10206684 $86,250.00 $86,188.20
10206685 $56,000.00 $55,954.08
10206686 $128,800.00 $128,694.37
10206687 $24,000.00 $23,988.91
10206688 $86,250.00 $86,173.36
10206689 $51,900.00 $51,802.66
10206690 $380,000.00 $379,643.98
10206691 $95,000.00 $94,931.79
10206692 $133,250.00 $133,103.58
10206693 $76,800.00 $76,737.03
10206694 $60,000.00 $59,957.02
10206695 $72,000.00 $71,074.98
Page 50
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206696 $103,000.00 $102,917.78
10206697 $190,000.00 $189,768.97
10206698 $34,800.00 $34,761.76
10206699 $94,250.00 $94,172.71
10206700 $83,300.00 $83,198.72
10206701 $94,400.00 $94,330.49
10206702 $69,000.00 $68,950.46
10206703 $124,000.00 $123,883.81
10206704 $63,750.00 $63,712.92
10206705 $138,550.00 $138,390.00
10206706 $88,000.00 $87,902.50
10206707 $77,000.00 $76,938.53
10206708 $93,750.00 $93,662.16
10206709 $26,000.00 $25,832.41
10206710 $61,600.00 $61,426.27
10206711 $32,000.00 $31,892.76
10206712 $154,400.00 $154,230.33
10206713 $97,500.00 $97,403.72
10206714 $104,000.00 $103,623.19
10206715 $80,000.00 $79,934.39
10206716 $24,000.00 $23,892.96
10206718 $44,250.00 $44,045.21
10206719 $45,500.00 $45,463.68
10206720 $114,800.00 $114,708.36
10206721 $243,750.00 $243,349.16
10206722 $178,000.00 $177,794.43
10206723 $200,000.00 $199,836.01
10206724 $68,600.00 $68,516.60
10206725 $45,000.00 $44,959.93
10206726 $190,000.00 $189,756.85
10206727 $35,200.00 $35,144.91
10206728 $152,000.00 $151,824.47
10206729 $117,750.00 $117,453.38
10206730 $126,720.00 $126,618.84
10206731 $56,000.00 $55,945.04
10206732 $187,500.00 $187,293.97
10206733 $170,000.00 $169,823.06
10206734 $116,250.00 $116,146.69
10206735 $172,000.00 $171,789.19
10206736 $55,000.00 $54,979.80
10206737 $24,750.00 $24,732.25
10206738 $92,000.00 $91,924.57
10206739 $64,800.00 $64,748.25
10206740 $125,000.00 $124,905.46
10206741 $167,500.00 $167,403.44
10206743 $120,000.00 $119,914.03
10206744 $115,000.00 $114,917.44
10206748 $114,000.00 $113,367.01
10206749 $19,600.00 $19,588.08
Page 51
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206750 $62,250.00 $62,214.10
10206751 $116,000.00 $115,907.40
10206752 $152,000.00 $151,878.67
10206753 $108,500.00 $108,430.31
10206754 $73,850.00 $73,515.99
10206755 $118,400.00 $118,240.27
10206756 $175,000.00 $174,764.37
10206757 $43,200.00 $43,164.57
10206758 $140,000.00 $139,875.58
10206759 $65,600.00 $65,526.55
10206760 $133,250.00 $133,103.58
10206761 $133,250.00 $133,103.58
10206762 $133,250.00 $133,103.58
10206763 $202,500.00 $202,226.80
10206764 $161,250.00 $160,984.35
10206767 $64,500.00 $64,470.34
10206770 $68,500.00 $68,386.78
10206771 $45,000.00 $44,826.18
10206772 $55,000.00 $54,806.61
10206774 $127,500.00 $127,260.88
10206775 $160,000.00 $159,712.71
10206776 $33,600.00 $33,513.38
10206777 $48,375.00 $48,288.12
10206778 $39,750.00 $39,677.25
10206779 $34,925.00 $34,888.68
10206780 $64,000.00 $63,879.10
10206781 $29,150.00 $29,139.30
10206782 $123,750.00 $123,645.76
10206783 $40,970.00 $40,937.23
10206784 $318,750.00 $318,313.43
10206785 $106,250.00 $106,059.24
10206786 $135,000.00 $134,701.71
10206787 $93,750.00 $93,652.42
10206788 $50,000.00 $49,932.94
10206789 $123,200.00 $123,006.90
10206790 $202,500.00 $202,088.83
10206791 $85,000.00 $84,886.00
10206793 $202,592.00 $202,339.26
10206794 $100,000.00 $99,911.15
10206795 $85,000.00 $84,916.05
10206796 $105,000.00 $104,817.43
10206797 $130,000.00 $129,857.16
10206798 $224,000.00 $223,713.34
10206799 $235,000.00 $234,682.95
10206801 $131,750.00 $131,499.33
10206802 $75,200.00 $75,139.98
10206803 $38,500.00 $38,467.57
10206804 $139,920.00 $139,721.86
10206805 $160,000.00 $159,815.23
Page 52
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206806 $86,175.00 $86,096.78
10206807 $98,250.00 $98,193.36
10206808 $236,000.00 $235,713.04
10206809 $39,500.00 $39,468.48
10206810 $57,500.00 $57,471.41
10206811 $56,000.00 $55,912.36
10206812 $191,000.00 $190,715.05
10206813 $157,250.00 $157,037.84
10206814 $127,500.00 $127,327.99
10206815 $202,500.00 $202,198.50
10206816 $60,000.00 $59,909.84
10206817 $42,400.00 $42,364.28
10206818 $94,400.00 $94,296.26
10206819 $50,925.00 $50,877.30
10206820 $41,650.00 $41,606.57
10206821 $96,950.00 $96,562.43
10206822 $72,000.00 $71,953.76
10206823 $189,000.00 $188,857.05
10206824 $151,300.00 $151,125.26
10206825 $207,900.00 $207,574.66
10206826 $148,750.00 $148,578.21
10206827 $35,000.00 $34,883.42
10206828 $131,750.00 $131,639.03
10206829 $89,250.00 $89,161.85
10206830 $82,500.00 $82,434.15
10206831 $104,550.00 $104,416.20
10206832 $59,850.00 $59,809.39
10206833 $60,000.00 $59,934.21
10206834 $36,000.00 $35,972.78
10206835 $85,000.00 $84,916.05
10206836 $83,300.00 $83,225.99
10206837 $114,000.00 $113,874.99
10206838 $98,000.00 $97,846.64
10206839 $203,000.00 $202,726.11
10206840 $53,550.00 $53,484.87
10206841 $118,320.00 $118,209.15
10206843 $47,823.30 $47,801.26
10206844 $76,000.00 $75,620.21
10206845 $208,000.00 $207,622.92
10206846 $69,700.00 $69,627.46
10206847 $138,200.00 $138,077.23
10206848 $192,000.00 $191,820.11
10206849 $102,200.00 $102,118.42
10206850 $74,400.00 $74,309.54
10206851 $67,500.00 $67,417.92
10206852 $34,300.00 $34,286.66
10206853 $172,500.00 $172,310.46
10206854 $228,750.00 $228,498.64
10206856 $30,800.00 $30,454.22
Page 53
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206857 $52,600.00 $52,509.87
10206858 $88,000.00 $87,865.36
10206859 $31,500.00 $31,238.70
10206860 $53,550.00 $53,485.58
10206861 $60,500.00 $60,204.16
10206862 $50,400.00 $50,370.40
10206863 $153,000.00 $152,695.36
10206864 $46,800.00 $46,755.27
10206865 $36,000.00 $35,703.45
10206866 $58,000.00 $57,280.00
10206867 $120,750.00 $120,380.49
10206868 $45,500.00 $45,316.75
10206870 $93,750.00 $93,643.16
10206871 $67,500.00 $67,417.94
10206872 $127,500.00 $127,327.99
10206873 $112,000.00 $111,768.42
10206874 $26,250.00 $26,234.87
10206875 $68,000.00 $67,875.54
10206876 $19,500.00 $19,486.44
10206877 $129,750.00 $129,597.26
10206878 $165,000.00 $164,867.60
10206880 $105,000.00 $104,641.06
10206881 $38,250.00 $37,877.64
10206882 $66,000.00 $65,927.47
10206883 $173,600.00 $173,414.52
10206884 $138,000.00 $137,794.52
10206885 $21,750.00 $21,745.63
10206886 $103,125.00 $103,065.57
10206887 $69,600.00 $69,538.16
10206888 $467,000.00 $466,371.21
10206889 $95,000.00 $94,915.59
10206890 $212,000.00 $211,826.17
10206891 $39,200.00 $38,787.61
10206892 $168,750.00 $168,597.62
10206893 $73,000.00 $72,940.14
10206894 $105,000.00 $104,913.91
10206895 $76,000.00 $75,897.46
10206897 $80,000.00 $79,779.75
10206898 $210,000.00 $209,832.37
10206899 $88,875.00 $88,454.13
10206900 $58,000.00 $57,764.72
10206901 $28,800.00 $28,783.40
10206902 $124,800.00 $124,698.22
10206903 $63,750.00 $63,291.35
10206904 $38,000.00 $37,953.87
10206905 $65,600.00 $65,552.90
10206906 $84,000.00 $83,931.12
10206907 $106,500.00 $106,018.35
10206908 $260,000.00 $259,786.85
Page 54
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
10206909 $120,000.00 $119,438.20
10206910 $316,000.00 $315,670.42
10206911 $55,200.00 $55,040.28
10206912 $45,500.00 $45,379.52
10206913 $35,000.00 $34,971.28
10206914 $51,000.00 $50,970.61
10206915 $146,000.00 $145,831.39
10206916 $100,000.00 $99,911.13
10206917 $120,750.00 $120,570.22
10206918 $60,000.00 $59,965.47
10206919 $78,750.00 $78,687.47
10206920 $44,800.00 $44,749.92
10206921 $87,000.00 $86,955.23
10206922 $57,000.00 $56,953.52
10206923 $58,400.00 $58,335.82
10206924 $57,600.00 $57,536.70
10206925 $60,000.00 $59,956.92
10206926 $377,000.00 $376,564.62
10206927 $35,000.00 $34,974.91
10206928 $29,500.00 $29,487.17
10206929 $133,250.00 $133,103.58
10206931 $344,750.00 $343,635.61
10206932 $105,600.00 $105,361.97
10206933 $81,600.00 $81,459.64
10206934 $77,600.00 $77,419.14
10206935 $73,950.00 $73,816.83
10206937 $101,250.00 $101,110.89
10206938 $93,750.00 $93,706.79
10206939 $123,250.00 $123,116.64
10206941 $311,100.00 $310,559.13
10206942 $69,700.00 $69,619.51
10206943 $49,500.00 $49,442.83
10206944 $213,000.00 $212,765.96
10206945 $69,600.00 $68,889.28
10206946 $97,750.00 $97,588.96
10206947 $250,000.00 $249,663.40
10206948 $135,150.00 $134,985.66
10206949 $101,600.00 $101,448.73
10206950 $175,000.00 $174,787.21
10206951 $27,750.00 $27,717.95
15700019 $511,000.00 $509,826.32
15700020 $130,900.00 $130,744.87
21100443 $122,500.00 $121,958.60
21100445 $58,500.00 $58,391.40
21100446 $102,500.00 $102,399.64
21100447 $525,000.00 $522,966.24
21100448 $115,500.00 $115,373.08
21100449 $105,300.00 $105,224.39
21100450 $120,900.00 $120,547.31
Page 55
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
21100452 $81,000.00 $80,885.13
21100455 $105,000.00 $104,698.57
21100457 $156,800.00 $156,609.32
21100458 $89,050.00 $88,903.52
21100459 $92,300.00 $92,088.28
21100460 $78,000.00 $77,944.00
21100463 $101,200.00 $100,962.27
21100464 $90,000.00 $89,737.05
21100465 $185,250.00 $185,057.17
21100466 $104,000.00 $103,916.98
21100468 $111,000.00 $110,826.28
21100469 $109,600.00 $109,491.74
21100470 $89,250.00 $89,164.33
21100471 $198,000.00 $197,837.63
21100472 $152,750.00 $152,522.12
21100473 $87,750.00 $87,557.90
21100474 $130,000.00 $129,824.60
21100476 $91,987.00 $91,880.75
21100478 $107,500.00 $107,375.83
21100479 $73,500.00 $73,398.44
21100480 $69,600.00 $69,534.78
21100482 $141,000.00 $140,845.07
21100483 $97,000.00 $96,803.02
21100484 $72,000.00 $71,895.33
21100485 $120,000.00 $119,898.91
21100486 $93,750.00 $93,636.00
21100487 $112,000.00 $111,883.00
21100488 $67,850.00 $67,775.59
21100489 $60,125.00 $60,071.45
21100490 $76,500.00 $76,431.88
21100491 $73,500.00 $73,431.00
21100492 $153,900.00 $153,783.59
21100494 $70,000.00 $69,934.41
21100496 $84,800.00 $84,706.82
21100497 $315,000.00 $314,688.23
21100498 $84,000.00 $83,929.23
21100499 $307,500.00 $307,323.08
21100500 $90,300.00 $90,215.39
21100501 $213,750.00 $213,490.08
21100502 $133,800.00 $133,674.64
21100503 $73,600.00 $73,544.31
21100504 $187,000.00 $186,815.30
21100506 $174,250.00 $174,094.85
21100507 $55,000.00 $54,896.52
21100508 $52,500.00 $52,437.46
21100509 $67,500.00 $67,408.93
21100510 $70,850.00 $70,775.73
21100511 $153,500.00 $153,303.54
21100512 $230,000.00 $229,806.25
Page 56
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
21100513 $64,000.00 $63,943.02
21100514 $69,500.00 $69,423.63
21100515 $80,000.00 $79,942.57
21100516 $40,000.00 $39,956.05
21100517 $97,000.00 $96,909.12
21100518 $80,000.00 $79,912.10
21100519 $151,200.00 $151,057.36
21100521 $200,000.00 $199,812.62
21100522 $64,800.00 $64,735.86
21100523 $115,500.00 $115,373.08
21100524 $133,200.00 $133,111.60
21100525 $132,000.00 $131,862.59
21100526 $63,000.00 $62,932.70
21100529 $135,000.00 $134,903.07
21100530 $102,750.00 $102,676.22
21100531 $104,000.00 $103,897.27
21100533 $539,000.00 $538,673.46
21100534 $457,000.00 $456,723.14
21100543 $625,000.00 $624,600.64
21100548 $549,000.00 $548,630.88
23500018 $101,500.00 $101,357.69
23500019 $43,200.00 $43,142.19
23500020 $101,250.00 $101,120.42
23500021 $166,000.00 $165,668.65
23500022 $69,300.00 $69,241.62
23500024 $601,250.00 $600,518.92
23500025 $87,000.00 $86,903.58
23500027 $500,000.00 $499,392.05
23500028 $100,000.00 $99,795.31
23500029 $28,000.00 $27,983.70
23500030 $63,000.00 $62,934.41
23500031 $120,800.00 $120,704.60
23500032 $119,000.00 $118,876.14
23500033 $105,000.00 $104,790.01
23500037 $55,800.00 $55,729.95
23500038 $55,200.00 $55,162.55
23500043 $84,500.00 $84,445.72
23500045 $192,500.00 $192,362.07
23500048 $188,300.00 $188,165.08
23500051 $47,190.00 $47,086.45
23500052 $88,500.00 $88,291.62
23500053 $97,300.00 $97,167.64
23500054 $138,400.00 $138,247.91
23500055 $72,800.00 $72,743.12
23500056 $100,000.00 $99,910.95
23500057 $133,000.00 $132,874.06
23500058 $500,000.00 $499,446.00
24000002 $38,250.00 $38,237.77
24000005 $75,400.00 $75,378.42
Page 57
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
24000007 $124,600.00 $124,554.39
24000008 $394,450.00 $394,323.94
24000009 $110,400.00 $110,358.43
24000010 $86,300.00 $86,255.25
24000011 $126,000.00 $125,899.40
24000012 $123,300.00 $123,253.57
24000013 $69,300.00 $69,279.03
24000016 $110,500.00 $110,464.68
24000017 $64,500.00 $64,472.95
24000018 $124,720.00 $124,666.28
24000020 $64,000.00 $63,975.23
24000021 $111,100.00 $111,058.17
24000022 $94,300.00 $94,262.95
24000023 $155,700.00 $155,639.44
24000024 $83,300.00 $83,261.52
24000025 $119,300.00 $119,247.22
24000026 $72,000.00 $71,968.14
24000027 $36,000.00 $35,980.84
24000028 $94,410.00 $94,373.47
24000029 $146,750.00 $146,679.70
24000030 $25,500.00 $25,491.84
24000031 $70,000.00 $69,974.67
24000032 $97,200.00 $97,165.34
24000034 $39,150.00 $39,137.49
24000035 $72,000.00 $71,967.28
24000036 $72,000.00 $71,972.89
24000037 $71,900.00 $71,864.63
24000038 $31,500.00 $31,490.47
24000041 $60,000.00 $59,982.83
24000042 $155,900.00 $155,832.85
24000043 $161,900.00 $161,849.66
24000047 $105,000.00 $104,953.54
24000048 $104,400.00 $104,307.23
24000049 $432,000.00 $431,854.15
24000050 $19,950.00 $19,934.91
24000051 $144,000.00 $143,942.77
24000052 $130,000.00 $129,958.45
24000053 $95,400.00 $95,372.70
24000059 $268,000.00 $267,901.80
24000061 $33,000.00 $32,989.45
24000066 $45,000.00 $44,982.58
24200006 $100,000.00 $99,890.35
24200007 $218,000.00 $217,853.72
24200009 $70,000.00 $70,000.00
24300036 $500,000.00 $499,157.46
24300037 $137,250.00 $136,978.49
24300039 $114,750.00 $114,108.44
24300045 $70,000.00 $69,964.09
24300046 $134,800.00 $134,644.31
Page 58
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
24300052 $90,000.00 $89,970.53
24300053 $57,200.00 $57,168.82
24300054 $88,700.00 $88,621.03
24300055 $122,400.00 $122,291.00
24300056 $214,000.00 $213,920.30
24300057 $59,500.00 $59,443.05
24300059 $55,000.00 $54,958.75
24300061 $133,500.00 $133,424.06
24300062 $77,300.00 $77,280.87
24900004 $78,000.00 $77,900.17
24900011 $128,610.00 $128,610.00
24900012 $101,500.00 $101,500.00
25000044 $581,000.00 $580,180.18
25200003 $37,650.00 $37,650.00
25600006 $175,750.00 $175,375.44
25600009 $112,000.00 $111,749.05
25600012 $156,600.00 $156,399.59
26000001 $107,700.00 $107,569.20
26000005 $220,500.00 $220,321.02
26000010 $34,500.00 $34,453.80
26000011 $185,625.00 $185,436.21
26000013 $112,500.00 $112,296.25
26000018 $61,600.00 $61,570.21
26000041 $308,750.00 $308,501.06
26000042 $221,000.00 $220,430.23
26000046 $178,500.00 $178,300.92
26000051 $105,000.00 $104,925.17
26000053 $144,000.00 $143,862.18
26000058 $171,500.00 $171,177.71
26000061 $76,500.00 $76,420.77
26000062 $94,410.00 $94,363.95
26000063 $144,500.00 $144,381.49
26000064 $144,900.00 $144,682.19
26000081 $200,000.00 $199,866.68
26000100 $74,610.00 $74,545.78
26000107 $68,400.00 $68,343.60
26000111 $99,450.00 $99,409.17
26000112 $232,200.00 $231,612.22
26000113 $117,750.00 $117,750.00
26000117 $99,400.00 $99,400.00
26000121 $57,600.00 $57,578.03
26000132 $63,325.00 $63,325.00
26000143 $148,750.00 $148,688.93
26000154 $89,250.00 $89,214.45
26000165 $234,900.00 $234,900.00
26000166 $24,500.00 $24,496.32
26000167 $66,400.00 $66,375.48
26000168 $180,800.00 $180,751.06
26000173 $168,300.00 $168,233.47
Page 59
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
26800002 $102,123.00 $102,057.88
27100016 $49,500.00 $49,480.33
27900004 $133,450.00 $133,295.86
28400005 $49,000.00 $48,975.90
28800007 $584,000.00 $583,748.46
29500001 $92,320.00 $92,262.61
30200001 $285,000.00 $285,000.00
31500001 $192,525.00 $192,425.18
31500002 $93,000.00 $92,958.76
31500003 $52,500.00 $52,483.02
31500004 $44,200.00 $44,180.40
31500005 $94,400.00 $94,355.94
31600001 $175,000.00 $174,271.25
31600003 $79,200.00 $79,105.71
31600005 $98,175.00 $97,952.68
31600006 $105,400.00 $105,098.90
31600007 $144,415.00 $144,119.70
31600008 $149,500.00 $149,277.43
31600009 $161,250.00 $160,782.88
31600011 $224,000.00 $223,406.17
31600012 $208,000.00 $207,624.28
31600014 $142,100.00 $141,736.45
31600017 $82,500.00 $82,290.41
31600019 $48,000.00 $47,866.27
31600020 $121,500.00 $121,091.79
31600021 $92,000.00 $91,720.72
31600023 $92,650.00 $92,381.55
31600024 $130,450.00 $130,035.83
31600026 $111,750.00 $111,410.75
31600027 $49,700.00 $49,615.11
31600028 $45,000.00 $44,899.81
31600029 $114,750.00 $114,521.49
31600030 $111,350.00 $111,128.27
31600031 $149,600.00 $149,377.48
31600032 $102,000.00 $101,896.82
31600033 $278,000.00 $277,647.24
31600034 $27,000.00 $26,979.06
31600035 $160,000.00 $159,807.55
31600037 $262,500.00 $262,077.16
31600039 $276,250.00 $276,058.42
31600041 $148,000.00 $147,839.84
31600043 $270,000.00 $269,752.61
31600044 $64,600.00 $64,532.45
31600046 $165,000.00 $164,878.95
31600047 $228,750.00 $228,408.41
31600049 $217,500.00 $217,224.00
31600051 $95,000.00 $94,851.07
31600052 $125,000.00 $124,869.30
31600054 $22,750.00 $22,734.19
Page 60
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
31600055 $248,500.00 $248,259.45
31600056 $177,500.00 $177,237.67
31600057 $80,000.00 $79,908.62
31600059 $86,250.00 $85,972.42
31800002 $54,000.00 $53,861.16
31800011 $185,300.00 $184,522.97
31800015 $82,400.00 $82,193.74
31800016 $66,350.00 $66,144.96
31800017 $64,800.00 $64,654.24
31800020 $61,200.00 $61,020.48
31800021 $160,650.00 $160,269.06
31800022 $256,000.00 $255,287.60
31800023 $198,800.00 $198,185.22
31800024 $391,000.00 $389,853.33
31800025 $60,900.00 $60,780.09
31800027 $152,900.00 $152,474.50
31800029 $42,000.00 $41,883.11
31800030 $72,000.00 $71,804.37
31800034 $88,400.00 $88,231.05
31800035 $55,800.00 $55,690.36
31800038 $139,000.00 $138,604.53
31800039 $168,800.00 $168,378.19
31800041 $180,000.00 $179,459.73
31800042 $404,400.00 $403,389.54
31800044 $190,800.00 $190,347.61
31800046 $135,000.00 $134,727.01
31800047 $128,700.00 $128,333.84
31800048 $38,400.00 $38,308.93
31800049 $150,300.00 $149,987.83
31800050 $83,250.00 $83,062.74
31800052 $113,816.00 $113,573.22
31800053 $59,500.00 $59,351.32
31800054 $126,650.00 $126,197.22
31900001 $320,000.00 $319,582.91
32000001 $153,750.00 $153,495.63
32000004 $96,000.00 $95,868.08
32000005 $86,850.00 $86,778.77
32000007 $46,150.00 $46,073.65
32000009 $147,200.00 $146,901.10
32000012 $81,000.00 $80,902.52
32000013 $145,800.00 $145,373.84
32000015 $95,400.00 $95,163.56
32000016 $138,750.00 $138,578.61
32000017 $92,000.00 $91,743.99
32000022 $81,600.00 $81,464.99
32000023 $67,800.00 $67,609.56
32000027 $85,000.00 $84,961.38
32000030 $87,500.00 $87,403.84
32000032 $80,840.00 $80,795.91
Page 61
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
32000037 $153,000.00 $152,813.96
32000038 $491,400.00 $491,109.88
32000039 $198,000.00 $197,841.95
32000042 $139,000.00 $138,613.81
32000043 $125,000.00 $124,845.04
32000046 $80,800.00 $80,740.51
32000048 $90,000.00 $89,959.10
32000049 $126,000.00 $125,938.02
32000050 $105,500.00 $105,439.92
32000053 $228,650.00 $228,566.67
32000055 $206,000.00 $205,831.14
32000056 $93,750.00 $93,708.07
32000057 $229,500.00 $229,360.96
32000058 $74,400.00 $74,374.18
32000059 $105,000.00 $104,951.00
33700002 $60,000.00 $59,970.43
33700003 $192,000.00 $191,917.21
33700005 $136,000.00 $135,934.77
33700006 $120,000.00 $119,952.21
33700008 $54,400.00 $54,400.00
33700010 $99,200.00 $99,144.33
33700014 $85,150.00 $85,095.60
33700016 $127,300.00 $127,300.00
33700017 $35,000.00 $34,982.28
33700018 $67,000.00 $66,926.38
33700020 $146,400.00 $146,400.00
33700021 $131,200.00 $131,141.95
33700024 $71,500.00 $71,458.78
33700027 $68,400.00 $68,363.56
33700028 $124,000.00 $124,000.00
33700030 $73,600.00 $73,600.00
33700031 $76,800.00 $76,800.00
34000001 $220,500.00 $220,402.45
34000002 $128,700.00 $128,650.22
34000003 $93,000.00 $92,965.92
34000004 $131,200.00 $131,149.24
34000005 $148,500.00 $148,452.54
34000007 $128,000.00 $127,950.49
35300001 $212,000.00 $211,871.56
35300004 $40,875.00 $40,855.92
35300005 $166,500.00 $166,435.60
35400001 $112,000.00 $111,870.66
35400002 $130,000.00 $129,932.60
35400003 $124,800.00 $124,670.10
35400004 $112,200.00 $112,138.58
35400005 $70,000.00 $69,970.64
35400006 $146,400.00 $146,312.25
35400007 $82,500.00 $82,461.51
35400008 $88,500.00 $88,456.46
Page 62
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
35400009 $84,000.00 $83,958.68
35400010 $75,000.00 $74,970.20
35400011 $76,000.00 $75,968.97
35400012 $139,500.00 $139,415.12
35400014 $57,200.00 $57,181.71
35400015 $58,800.00 $58,771.08
35400016 $83,300.00 $83,262.16
35400017 $93,500.00 $93,454.00
35400018 $52,000.00 $51,981.46
35400019 $127,500.00 $127,440.51
35400020 $254,000.00 $253,875.06
50300376 $429,750.00 $428,660.63
50300378 $296,000.00 $295,082.26
50300381 $392,500.00 $391,598.50
50300382 $386,000.00 $385,135.21
50300383 $443,500.00 $442,375.80
50300385 $411,200.00 $404,362.10
50300386 $460,000.00 $458,745.66
50300387 $300,000.00 $299,293.66
50300389 $168,000.00 $167,676.39
50300391 $439,200.00 $438,031.07
50300392 $86,250.00 $86,115.01
50300393 $267,000.00 $266,571.69
50300394 $418,000.00 $417,295.63
50300395 $300,000.00 $299,494.48
50300396 $224,000.00 $223,649.45
50300398 $228,000.00 $227,854.61
50300400 $172,250.00 $172,115.62
50300402 $308,000.00 $307,771.41
50300404 $322,000.00 $321,783.93
50300405 $135,000.00 $135,000.00
61800156 $85,800.00 $85,717.47
65500801 $208,950.00 $208,515.74
65500802 $105,000.00 $104,823.06
65500804 $156,800.00 $156,577.93
69700079 $144,000.00 $143,910.00
69700080 $208,800.00 $208,705.14
69700081 $111,350.00 $111,290.74
69700083 $56,000.00 $55,974.55
69700084 $106,400.00 $106,344.84
69700085 $144,000.00 $143,941.21
69700086 $181,000.00 $180,906.17
69700087 $380,000.00 $379,627.08
69700088 $177,000.00 $177,000.00
69700089 $137,700.00 $137,642.25
69700090 $148,500.00 $148,432.53
69700091 $194,175.00 $193,818.07
69700093 $40,000.00 $39,981.82
69700094 $224,100.00 $223,998.19
Page 63
<PAGE>
Saxon Asset Securities Company, 1997-2
Variable Rate Group
Loan Number Original Amount Current Balance
69700096 $74,750.00 $74,714.18
73400008 $104,800.00 $104,485.33
78300146 $203,500.00 $203,405.05
84800001 $202,400.00 $202,183.76
84800002 $335,600.00 $335,372.34
84800003 $72,800.00 $72,766.92
84800004 $114,400.00 $114,287.01
84800005 $172,000.00 $171,936.98
84800006 $58,500.00 $58,450.72
84800007 $50,000.00 $49,954.39
84800008 $66,480.00 $66,448.15
84800009 $50,100.00 $50,055.25
84800010 $97,500.00 $97,462.28
84800011 $87,750.00 $87,695.17
84800012 $110,000.00 $109,894.18
84800013 $140,000.00 $139,905.02
84800014 $168,750.00 $168,652.90
84800015 $225,000.00 $224,912.97
84800016 $150,000.00 $149,883.44
84800017 $96,000.00 $95,825.41
84800018 $310,500.00 $310,386.24
84800019 $262,710.00 $262,584.14
87700181 $289,000.00 $286,399.50
87700184 $448,000.00 $447,245.10
87700186 $252,000.00 $251,770.07
87700187 $409,000.00 $408,814.17
87700188 $539,500.00 $538,860.66
87700189 $268,800.00 $268,800.00
89000124 $220,000.00 $219,628.70
89000125 $300,000.00 $299,564.36
89100032 $180,000.00 $179,731.99
91200019 $375,000.00 $374,532.21
91200021 $170,900.00 $170,900.00
91200022 $172,000.00 $172,000.00
92300081 $100,000.00 $99,536.35
95300035 $275,000.00 $274,495.83
98300003 $120,275.00 $120,202.13
98300026 $68,250.00 $68,228.19
98300027 $65,000.00 $64,957.48
98300034 $104,800.00 $104,745.67
98300051 $150,000.00 $149,906.76
99600053 $225,000.00 $224,777.78
- -------- -----------
3048 $347,409,911.38
<PAGE>
Schedule II
Sales Agreement
31
<PAGE>
SALES AGREEMENT
SALES AGREEMENT dated June 16, 1997, between Saxon Asset Securities
Company, a Virginia corporation ("Saxon"), and Saxon Mortgage, Inc., a Virginia
corporation ("SMI").
RECITALS
1. Schedules IA and IB attached hereto and made a part hereof list two
pools of one-to-four family, fully amortizing, mortgage loans (collectively,
the "Mortgage Loans") currently owned by SMI that SMI desires to sell to Saxon.
2. Saxon desires to purchase the Mortgage Loans and intends
immediately thereafter to transfer the Mortgage Loans to Saxon Securities Asset
Trust 1997-2 Trust (the "Trust") to be established pursuant to the terms of a
trust agreement dated as of June 1, 1997, among Saxon, Texas Commerce Bank
National Association, as Master Servicer (the "Master Servicer"), Certificate
Registrar and Paying Agent and Citibank, N. A., as trustee (the "Trustee"). Such
trust agreement will incorporate by reference the January 1997 Edition of the
Standard Terms to Trust Agreement ("Standard Terms" and, together with the
above-referenced trust agreement, the "Trust Agreement").
3. Pursuant to the terms of the Trust Agreement, the Trust will issue
securities evidencing 100% of the beneficial ownership interest in the Trust to
Saxon in consideration of Saxon's deposit of the Mortgage Loans to the Trust.
4. Certificates to be issued by the Trust to Saxon will be designated
as the Mortgage Loan Asset Backed Certificates, Series 1997-2, Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class AF-7, Class MF-1,
Class MF-2, Class BF, Class AV-1, Class MV-1, Class MV-2, Class BV, Class C and
Class R Certificates, and shall be collectively referred to herein as the
"Certificates".
5. The Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5,
Class AF-6, Class AF-7, Class MF-1, Class MF-2, Class BF, Class AV-1, Class
MV-1, Class MV-2, Class BV Certificates (collectively, the "Underwritten
Certificates") shall be sold pursuant to an underwriting agreement dated June
16, 1997 (the "Underwriting Agreement"), among Saxon and SMI and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Prudential Securities Incorporated, Lehman
Brothers Inc., and PaineWebber Incorporated, as Underwriters (the
"Underwriters"). The public offering and sale of the Underwritten Certificates
is registered under the Securities Act of 1933 and is being made by delivery of
pursuant to a prospectus supplement dated June 16, 1997 (the "Prospectus
Supplement"), to a prospectus dated February 19, 1997 (collectively, with the
Prospectus Supplement, the "Prospectus").
Capitalized terms used and not defined herein shall have the meanings
assigned to them in the Trust Agreement or, if not defined therein, in (a) the
Servicing Agreement dated as of June 1, 1997 between Meritech Mortgage Services,
Inc., Saxon and the Master Servicer and (b) the Seller's Warranties and
Servicing Agreement, dated as of January 1, 1997, between Ameriquest Mortgage
Company and SMI, which will be assigned to the Trust. Meritech Mortgage
Services, Inc., and Ameriquest Mortgage Company are referred to herein as the
"Servicers"; and the Servicing Agreements referred to the preceding sentence are
referred to herein collectively as the "Servicing Agreements".
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises herein made and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:
SECTION 1. Sale and Purchase of Mortgage Loans.
(a) Subject to the terms and conditions of this Agreement, SMI agrees
to sell, and Saxon agrees to purchase, on the date of the issuance of the
Certificates, which is expected to be on or about June 24, 1997 (the "Closing
Date"), the Mortgage Loans having an aggregate principal balance as of June 1,
1997 (the "Cut-Off Date"), of approximately $468,862,905, together with the
Class C Certificates and 99.99% of the Class R Certificates.
<PAGE>
(b) SMI and Saxon have agreed upon which of the mortgage loans owned
by SMI are to be purchased by Saxon pursuant to this Agreement, and SMI has
prepared, or has provided information to Saxon enabling Saxon to prepare,
schedules attached hereto as Schedules IA and IB (collectively, "Schedule I"),
setting forth information with respect to the Mortgage Loans to be purchased by
Saxon as of the Closing Date. SMI shall, with Saxon's consent, amend or modify,
or provide information to Saxon enabling Saxon to amend or modify Schedule I on
or prior to the Closing Date if necessary to reflect the actual Mortgage Loans
transferred by SMI and accepted by Saxon on the Closing Date. Schedule IA (which
lists the Mortgage Loans in the Fixed Rate Group) and Schedule IB (which lists
the Mortgage Loans in the Variable Rate Group), as so amended or modified, shall
conform to the requirements of Saxon as set forth in this Agreement and to the
definition of "Mortgage Loan Schedule" under the Standard Terms, and shall be
used as the definitive Mortgage Loan Schedule attached as an exhibit to the
Trust Agreement.
(c) The sale of the Mortgage Loans shall be effected pursuant to the
Bill of Sale substantially in the form attached hereto as Exhibit A (the "Bill
of Sale").
SECTION 2. Purchase Price of Mortgage Loans.
(a) On the Closing Date, as full consideration for SMI's sale of the
Mortgage Loans to Saxon, Saxon will deliver to SMI cash in an amount that shall
be set out in the Bill of Sale and shall be equal to the amount received with
respect to the sale of the Underwritten Certificates together with the Class C
Certificates and 99.99% of the Class R Certificates;
(b) Saxon or any assignee or transferee of Saxon (which may include
the Trustee (or its Custodian) acting on behalf of the Certificateholders) shall
be entitled to all Monthly Payments due on or after June 1, 1997 (the "Cut-Off
Date"), and all curtailments or other principal prepayments received with
respect to the Mortgage Loans paid by the Borrower on or after the Cut-Off Date,
except that Saxon or any assignee or transferee of Saxon will not be entitled to
any Curtailments or other prepayments received on or after the Cut-Off Date but
reflected in the aggregate Scheduled Principal Balance of the Mortgage Loans on
the Cut-Off Date. All Monthly Payments due on or before the Cut-Off Date and
collected on or after the Cut-Off Date shall belong to SMI.
(c) Pursuant to the Trust Agreement, Saxon will transfer and
assign all its right, title and interest in and to the Mortgage Loans to the
Trustee (or its Custodian) for the benefit of the Certificateholders in
consideration of the issuance of the Certificates to Saxon.
SECTION 3. Transfer of the Mortgage Loans.
(a) Trustee Mortgage Loan File. For purposes of this Agreement,
the "Trustee Mortgage Loan File" will be as defined in the Trust Agreement.
(b) Transfer of Ownership. Upon the sale of any Mortgage Loans, the
ownership of each Mortgage Loan Document with respect thereto shall be vested in
Saxon, and the ownership of all other records and documents with respect thereto
prepared by or which come into the possession of SMI shall immediately vest in
Saxon. SMI shall promptly deliver to the Custodian (as defined below) or the
Trustee, as appropriate, any documents that come into its possession with
respect to such Mortgage Loans following such sale. Prior to such delivery, SMI
shall hold any such documents for the benefit of Saxon, its successors and
assigns.
(c) Delivery of Mortgage Loan Files. Not later than two Business Days
prior to the Closing Date, SMI shall deliver to Texas Commerce Bank National
Association, as custodian (the "Custodian"), each of the Mortgage Loan documents
required to be included in the Trustee Mortgage Loan. The Note for each such
Mortgage Loan shall be endorsed to the Trustee or Custodian or in blank, and the
Security Instrument for each such Mortgage Loan shall be assigned to the Trustee
or Custodian or in blank. Each such endorsement and assignment shall be
substantially in the form set forth in the Custody Agreement.
2
<PAGE>
Prior to the transfer and sale of any Mortgage Loans, all Mortgage
Loan Documents delivered to the Custodian shall be held by the Custodian for the
benefit of SMI and the possession by the Custodian of such Mortgage Loan
Documents will be at the will of SMI and will be in a custodial capacity only.
Following the transfer and sale of any Mortgage Loans from SMI to Saxon in
accordance with the terms and upon satisfaction of the conditions of this
Agreement, the Custodian will hold all Mortgage Loan Documents delivered to it
hereunder for the benefit of Saxon, as its agent and bailee. The Custodian, who
will also act as the Master Servicer, will act as a custodian for the receipt
and custody of all Trustee Mortgage Loan Files, and, after the transfer of any
Mortgage Loans from Saxon to the Trust, the Custodian will hold all Mortgage
Loan Documents delivered to it hereunder for the benefit of the Trustee on
behalf of the Certificateholders.
(d) Examination of Mortgage Loan Documents: Acceptance of Mortgage
Loans. Prior to the Closing Date, SMI shall either (i) deliver to Saxon or its
designee in escrow, for examination, the Mortgage Loan Documents pertaining to
each Mortgage Loan then being sold or (ii) make such Mortgage Loan Documents
available to Saxon or its designee for examination at SMI's offices or at such
other place as SMI shall specify. Saxon, the Custodian, or a designee of either
entity may review the Mortgage Loan Documents to verify that all documents
required to be included in each Trustee Mortgage Loan File (as such term has
been defined in the Trust Agreement) are so included.
Prior to the Closing Date, the Custodian shall review the documents
delivered pursuant to Section 3(c) hereof to ascertain that, as to each Mortgage
Loan listed on Schedule I, (i) all documents required to be delivered by SMI
pursuant to Section 3(c) have been received, (ii) such documents appear regular
on their face and relate to such Mortgage Loan and (iii) the information on
Schedule I accurately reflects the information set forth in the corresponding
Trustee Mortgage Loan File, to the extent required by Section 2.02 of the
Standard Terms. An additional review shall be conducted by the Custodian or its
designee prior to the first anniversary of the Closing Date to determine that
all Mortgage Loan Documents required to be included in the Trustee Mortgage Loan
File are included therein. If at any time Saxon or the Trustee (or its
Custodian) discovers or receives notice that any Mortgage Loan Document is
missing or defective in any material respect with respect to any Mortgage Loan,
SMI shall correct or cure any such omission or defect or, if such omission or
defect materially impairs the value of the Mortgage Loan, repurchase the
defective Mortgage Loan or substitute for such defective Mortgage Loan a
Qualified Substitute Mortgage Loan in accordance with and if permitted by the
terms of Section 7 hereof. At the time of such repurchase or substitution, the
Custodian shall release documents in its possession relating to such Mortgage
Loan to SMI. The fact that Saxon, the Trustee or a designee of either entity has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Loan Documents prior to the Closing Date shall not affect the rights of
Saxon (or any assignee or successor thereof) to demand repurchase or other
relief as provided herein.
(e) Incomplete Trustee Mortgage Loan Files. If SMI does not deliver or
cause to be delivered to the Custodian a complete Trustee Mortgage Loan File for
each Mortgage Loan listed on Schedule I (each such Mortgage Loan, an "Incomplete
Mortgage Loan") by 5:00 p.m. Eastern Time on the day prior to the Closing Date
(the "Defective Documentation Deadline"), Saxon may withhold from the Pool
Purchase Price and deposit with the Trustee cash in an amount equal, for each
Incomplete Mortgage Loan, to the Scheduled Principal Balance thereof at the
Cut-Off Date, plus interest thereon at the Note Rate less the Servicing Fee Rate
for the number of monthly interest payments scheduled to be received by the
Trust from the Cut-Off Date to the Due Date preceding July 25, 1997. If cash is
deposited with the Trustee by Saxon with respect to an Incomplete Mortgage Loan,
SMI shall use its best reasonable efforts to provide the Trustee with the
Mortgage Loan Documents missing from the Trustee Mortgage Loan File for the
Incomplete Mortgage Loan by July 25, 1997. If SMI fails to provide such missing
Mortgage Loan Documents prior to such date, either Saxon shall redeliver the
Incomplete Mortgage Loan to SMI and direct the Trustee to deposit an amount
equal to the Purchase Price in the Asset Proceeds Account under the Trust
Agreement or SMI shall substitute a Qualified Substitute Mortgage Loan therefor;
provided, however, that any such action shall occur by July 25, 1997. Any funds
deposited with the Trustee with respect to an Incomplete Mortgage Loan shall be
retained by the Trustee until all the Mortgage Loan Documents with respect to
such Incomplete Mortgage Loan have been delivered to the Custodian, or until
either Saxon has redelivered such Incomplete Mortgage Loan to SMI or SMI has
effected a substitution therefor. Nevertheless, if either such action is not
completed by July 25, 1997, the Trustee will apply the cash with respect to any
remaining Incomplete Mortgage Loan pursuant to the Trust Agreement. Such deposit
shall be applied on the Distribution Date following July 25, 1997, in payment on
the Certificates, and the Custodian shall simultaneously release the Incomplete
Mortgage Loan File.
3
<PAGE>
(f) Recordation of Assignments of Security Instrument. Subject to the
sale of the Mortgage Loans by SMI to Saxon, Saxon hereby authorizes and
instructs SMI, and SMI hereby agrees, with respect to each Mortgage Loan, to
record all Assignments required to be contained in the Trustee Mortgage Loan
File pursuant to Section 2.02 of the Standard Terms in the public recording
office for the jurisdiction in which the related Mortgage Premises is located.
All recording fees relating to the recordation of the Assignments as described
above shall be paid by SMI. If the Trustee does not receive, within the time
specified in the Trust Agreement, evidence satisfactory to it of such recording
with respect to any Mortgage Loan or, in the alternative, an Opinion of Counsel
acceptable to Saxon and the Rating Agencies, to the effect that such recording
is not required to protect the right, title and interest of the Trustee in any
such Mortgage Loan, SMI shall, in cooperation with the Trustee, correct or cure
any such omission or repurchase the affected Mortgage Loan within 90 days of
such demand which demand is made within the time specified in the Trust
Agreement (including any such extensions provided for therein).
SECTION 4. Representations and Warranties of SMI. SMI hereby
represents and warrants to Saxon as follows:
(a) SMI has been duly incorporated and is validly existing and in good
standing under the laws of the Commonwealth of Virginia and is duly qualified to
do business and in good standing under the laws of each jurisdiction that
requires such qualification wherein it owns or leases any material properties
(except where the failure so to qualify would not have a material adverse effect
on it). SMI has the full corporate power and authority to own its properties and
conduct its business as currently conducted.
(b) SMI has the full power, authority and legal right to execute and
deliver, engage in the transactions contemplated by, and perform and observe the
terms and conditions of, this Agreement.
(c) This Agreement has been duly and validly authorized, executed and
delivered by SMI and (assuming the due authorization, execution and delivery
hereof by Saxon) constitutes the valid, legal and binding agreement of SMI,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
receivership, conservatorship, reorganization, moratorium and other laws
affecting creditors' rights generally and to general principles of equity,
regardless of whether such enforcement is sought in a proceeding in equity or at
law and except that the provisions of indemnity contained herein may be
unenforceable as against public policy.
(d) No consent, approval, authorization or order of or registration or
filing with, or notice to, any governmental authority or court is required,
under federal laws or the laws of the Commonwealth of Virginia, for the
execution, delivery and performance of or compliance by SMI with this Agreement
or the consummation by SMI of the transactions contemplated hereby.
(e) Neither the execution and delivery of this Agreement by SMI, nor
the consummation by SMI of the transactions herein contemplated, nor compliance
with the provisions hereof by SMI, will (i) conflict with or result in a breach
of, or constitute a default under, any of the provisions of SMI's charter or
by-laws, or any law, governmental rule or regulation, or any judgment, decree or
order binding on SMI or any of its properties, or any of the provisions of any
indenture, mortgage, deed of trust, contract or other instrument to which SMI is
a party or by which it is bound or (ii) result in the creation or imposition of
any lien, charge or encumbrance upon any of its properties.
4
<PAGE>
(f) There is no litigation pending or, to SMI's knowledge, threatened
against SMI that would reasonably be expected to affect adversely the execution,
delivery, performance or enforceability of this Agreement.
(g) Each of the representations and warranties set forth in
Exhibit B hereto is true and correct with respect to the Mortgage Loans.
(h) The statistical information in the Prospectus Supplement under the
headings "THE MORTGAGE LOAN POOL--General", "-- Characteristics of the Mortgage
Loans" and "-- Additional Information" is true and correct.
SECTION 5. Representations and Warranties of Saxon. Saxon
hereby represents and warrants to Seller as follows:
(a) Saxon is a corporation duly organized and validly existing in
good standing under the laws of the Commonwealth of Virginia.
(b) Saxon has the full power, authority (corporate and other) and
legal right to execute and deliver, engage in the transactions contemplated by,
and perform and observe the terms and conditions of, this Agreement.
(c) This Agreement has been duly and validly authorized, executed and
delivered by Saxon and (assuming the due authorization, execution and delivery
thereof by SMI) constitutes the valid, legal and binding agreement of Saxon,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws affecting
creditors' rights generally, and to general principles of equity, regardless of
whether such enforcement is sought in a proceeding in equity or at law.
(d) No consent, approval, authorization or order of or registration of
filing with, or notice to, any governmental authority or court is required,
under federal laws or the laws of the Commonwealth of Virginia, for the
execution, delivery and performance of or compliance by Saxon with this
Agreement or the consummation by Saxon of any other transaction contemplated
hereby, except such as may be required and have been obtained pursuant to state
"blue sky" laws.
(e) Neither the execution and delivery of this Agreement by Saxon, nor
the consummation by Saxon of the transactions hereby contemplated, nor
compliance with the provisions hereof by Saxon, will (i) conflict with or result
in a breach of, or constitute a default under, any of the provisions of Saxon's
articles of incorporation or by-laws, or any law, governmental rule or
regulation, or any judgment, decree or order binding on Saxon or any of its
properties, or any of the provisions of any contract or other instrument to
which Saxon is a party or by which it is bound or (ii) result in the creation or
imposition of any lien, charge or encumbrance any of its properties.
(f) There is no litigation pending or, to Saxon's knowledge,
threatened against Saxon that would reasonably be expected to affect adversely
the execution, delivery, performance or enforceability of this Agreement.
SECTION 6. Covenants of SMI. SMI hereby covenants with Saxon as
follows:
(a) On or before the Closing Date, SMI shall take all steps required
of it to effectuate the transfer of the Mortgage Loans to the Trustee, as
transferee of Saxon, free and clear of any lien, charge, or encumbrance.
(b) SMI shall use its best efforts to make available to counsel for
Saxon in executed form each of the documents listed in Section 8(b) below no
later than two Business Days before the Closing Date, it being understood that
such documents are to be released and delivered only on the closing of the
transaction contemplated hereby and the sale of the Certificates.
(c) SMI shall deliver or cause to be delivered to Saxon (i) an Opinion
of Counsel as to various corporate matters substantially in a form satisfactory
to Saxon and (ii) such other Opinions of Counsel, if any, as are required by
either Rating Agency for the issuance of the ratings on the Certificates
specified in Section 8(e) below.
5
<PAGE>
(d) SMI shall record its transfer of the Mortgage Loans to Saxon as a
sale of its interest therein under generally accepted accounting principles. SMI
shall also report the transfer as a sale in all financial statements and reports
to regulatory and supervisory agencies and authorities to which it reports, if
any. For federal income tax purposes, SMI will treat the transfer of the
Mortgage Loans as a sale.
SECTION 7. Cure, Repurchase and Substitution Obligations.
(a) Each of the representations and warranties of SMI contained herein
shall survive the purchase by Saxon of any of the Mortgage Loans and shall
continue in full force and effect, notwithstanding any restrictive or qualified
endorsement on the Notes and notwithstanding subsequent termination of this
Agreement or the Trust Agreement. The representations and warranties shall not
be impaired by any review and examination of Mortgage Loan Documents or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of Saxon to review or examine such documents and shall inure to the benefit
of the Trustee (as the assignee of Saxon) for the benefit of the
Certificateholders, the Master Servicer and the Custodian. With respect to the
representations and warranties contained herein, which are made to the best of
SMI's knowledge or as to which SMI has no knowledge, if it is discovered by SMI,
Saxon, the Custodian or the Trustee that the substance of any such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
SMI's knowledge or lack of knowledge with respect to the inaccuracy of such
representation and warranty at the time it was made, SMI shall take the action
described in the following paragraph in respect of such Mortgage Loan.
(c) Upon discovery or receipt of notice by SMI, Saxon, the Trustee,
the Master Servicer or the Custodian of any missing or materially defective
document in any Trustee Mortgage Loan File, or a breach of any of SMI's
representations and warranties set forth in Section 4 hereof with respect to any
Mortgage Loan, or a default in the performance of any of the covenants or other
obligations of SMI under this Agreement, which in any of the foregoing cases
materially and adversely affects the value of any Mortgage Loan or the interest
therein of Saxon, the Trustee, the Custodian or the Master Servicer or causes a
Qualification Defect, the party discovering or receiving notice of such missing
or materially defective document, breach, or default shall give prompt written
notice to the others. Upon its discovery or its receipt of notice of any such
missing or materially defective document, breach or default (the "Detect
Discovery Date"), SMI shall either (a), within 60 days of discovery or receipt
of such notice, provide the Custodian with such missing documents or cure such
defect, breach or default, in all material respects or (b), within 75 days of
such discovery or receipt of such notice, either repurchase the affected
Mortgage Loan at the Purchase Price therefor or cause the removal of such
Mortgage Loan from the Trust (in which case it shall become a Deleted Mortgage
Loan) and substitute therefor one or more Qualified Substitute Mortgage Loans as
defined in the Trust Agreement; provided, however, that any such substitution
shall occur within two years of the Closing Date. Notwithstanding the foregoing,
if such defect, breach, or default results in a Qualification Defect, or if a
Qualification Defect otherwise exists with respect to a Mortgage Loan, SMI shall
cure such defect or repurchase the affected Mortgage Loan within 75 days of the
Defect Discovery Date. The Trustee or its designee shall amend the Mortgage Loan
Schedule to reflect the withdrawal of any Mortgage Loan from the terms of this
Agreement and the Trust Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. In order to effect a substitution pursuant to this
Section, SMI will deliver (i) to the Custodian each of the Mortgage Loan
Documents required to be contained in the Trustee Mortgage Loan File with
respect to the Qualified Substitute Mortgage Loan(s) and (ii) if the aggregate
Unpaid Principal Balance on the date of substitution of the Qualified Substitute
Mortgage Loan(s) is less than the aggregate Unpaid Principal Balance of the
Deleted Mortgage Loan(s) (after application of Monthly Payments due in the month
of substitution), to the Master Servicer cash in an amount equal to such
shortfall. Any repurchase pursuant to this Section shall be accomplished by the
delivery into the Master Servicer Custodial Account, on (or determined as of)
the last day of the calendar month in which such repurchase is made, of the
Purchase Price for the Mortgage Loans to be repurchased.
(d) The obligations of SMI set forth in this Agreement to cure or to
repurchase a materially defective Mortgage Loan or to substitute a Qualified
Substitute Mortgage Loan for such Mortgage Loan and to indemnify Saxon as
provided in this Agreement constitute the sole remedies of Saxon and the Trustee
against SMI respecting a defective document in any Trustee Mortgage Loan File or
Servicer Mortgage Loan File or a breach of representations and warranties of SMI
set forth in Section 4 hereof.
6
<PAGE>
(e) As soon as practicable following the conversion of an ARM Loan to
a fixed rate Mortgage Loan, SMI shall purchase such Mortgage Loan from the Trust
Estate for a purchase price equal to 100% of the Unpaid Principal Balance of
such Mortgage Loan plus accrued and unpaid interest thereon at the applicable
Net Rate in effect immediately before such ARM Loan was converted.
SECTION 8. Conditions to Obligation of Saxon. The obligation of
Saxon hereunder to purchase the Mortgage Loans is subject to:
(a) The representations and warranties of SMI under this Agreement
shall be accurate in all material respects as of the Closing Date, and no event
shall have occurred which, with notice or the passage of time, would constitute
a default under this Agreement;
(b) Saxon shall have received, or Saxon's attorneys shall have
received, in escrow (to be released from escrow at the time of closing), the
following documents in such forms as are agreed upon and acceptable to Saxon,
duly executed by all signatories other than Saxon as required pursuant to the
respective terms thereof:
(i) A Bill of Sale substantially in the form of Exhibit A
hereto;
(ii) An Opinion of Counsel for SMI as to various corporate
matters and such other Opinions of Counsel as are necessary in order
to obtain the ratings set forth in Section 8(e) below, each of which
shall be acceptable to Saxon, its counsel, the Underwriters, their
counsel and the Rating Agencies (it being understood that such
opinions shall expressly provide that the Master Servicer shall be
entitled to rely on such Opinions of Counsel);
(iii) The Servicing Agreement referred to in the Recitals;
(iv) A letter from Deloitte & Touche LLP dated the date hereof
containing in substance the information required by Section 6(d) of
the Standard Provisions to the Underwriting Agreement; and
(v) A certificate dated the date hereof from an officer of SMI
who is knowledgeable about SMI's financial and accounting matters
stating that the transfer of the Mortgage Loans from SMI to Saxon will
be classified as a sale under generally accepted accounting
principles.
(c) SMI shall have delivered to the Trustee or the Custodian, in
escrow, all documents (including, without limitation, the Security Instrument
assigned by SMI in blank or to the Master Servicer or Custodian and the Note
endorsed in blank or to the Master Servicer or Custodian with respect to each
Mortgage Loan) required to be delivered hereunder and shall have released its
interest therein to Saxon or its designee.
(d) All other terms and conditions of this Agreement shall have been
complied with.
(e) The receipt of written confirmation from each of Moody's
Investors Service, Inc. ("Moody's") and from Fitch Investors Service, L.P.
("Fitch"), as to the assignment of the ratings shown in the following table:
7
<PAGE>
Class Moody's Fitch
AF-1 Aaa AAA
AF-2 Aaa AAA
AF-3 Aaa AAA
AF-4 Aaa AAA
AF-5 Aaa AAA
AF-6 Aaa AAA
AF-7 Aaa AAA
MF-1 Aa2 AA+
MF-2 A2 A+
BF Baa3 BBB
AV-1 Aaa AAA
MV-1 Aa2 AA
MV-2 A2 A
BV Baa3 BBB
SECTION 9. Fees and Deposits.
On the Closing Date, SMI will pay to Saxon an "Issuance Fee", which
fee is equal to the amount of the fees and expenses of attorneys, accountants
(but not in connection with an accountant's review of "Computational Materials",
as that term is defined in the Underwriting Agreement), printers, the
Certificate Registrar, the Paying Agent, the Custodian, the Master Servicer and
the Trustee in connection with the issuance of the Certificates, (ii) the fees
payable to the Securities and Exchange Commission relative to the Underwritten
Certificates and (iii) the fees payable to each Rating Agency for its initial
rating of the Underwritten Certificates. In addition, SMI shall pay (i) any fees
related to the Trustee's, Master Servicer's or Custodian's receipt and review of
the Trustee Mortgage Loan Files with respect to the Mortgage Loans, (ii) the
fees and expenses of Saxon's attorneys and accountants and (iii) any required
reserve fund deposits and expenses related to recordation of assignments of
SMI's interest in the collateral to the Trustee or Custodian.
SECTION 10. Servicing.
(a) The Mortgage Loans will be serviced by the Servicers under the
Servicing Agreements. SMI hereby assigns, sells, transfers and conveys to Saxon
all its rights under the Servicing Agreements with respect to the servicing of
the Mortgage Loans.
(b) In consideration of the services rendered under its Servicing
Agreement, each Servicer shall be entitled to a monthly Servicing Fee for each
Mortgage Loan computed based upon the Scheduled Principal Balance of the
Mortgage Loan as of the opening of business on the first day of the Due Period
preceding the Servicer Remittance Date (without taking into account any payment
of principal due on such Due Date). The Servicing Fee for each Mortgage Loan
shall be payable solely from the interest portion of each Monthly Payment paid
by the Borrower or other payment of interest paid with respect to the Mortgage
Loan, whether from the proceeds of foreclosure or any judgment, writ of
attachment or levy against the Borrower or its assets, or from funds paid in
connection with any prepayment in full or from Insurance Proceeds or Liquidation
Proceeds.
The Servicers shall also be entitled to retain in addition to the
Servicing Fee any late charges, prepayment fees, conversion fees, penalty
interest or assumption fees paid by the Borrower, which amounts are not required
to be deposited to their Custodial P&I Accounts.
SECTION 11. Mandatory Delivery; Grant of Security Interest. The sale
and delivery on the Closing Date of the Mortgage Loans described in the Mortgage
Loan Schedule is mandatory, it being specifically understood and agreed that
8
<PAGE>
each Mortgage Loan is unique and identifiable on the date hereof and that an
award of money damages would be insufficient to compensate Saxon for the losses
and damages incurred by Saxon in the event of SMI's failure to deliver the
Mortgage Loans on or before the Closing Date. SMI hereby grants to the Trustee
for the benefit of the Certificateholders and , a lien on and a continuing first
priority security interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by SMI
of its obligation to deliver such Mortgage Loans hereunder. Subject to Section
7(c) hereof, all rights and remedies of Saxon under this Agreement are distinct
from, and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION 12. Indemnification.
(a) If SMI breaches its representations, warranties, covenants or
obligations set forth herein, SMI shall indemnify and hold harmless Saxon, the
Master Servicer, the Custodian, the Certificate Registrar, the Paying Agent, or
the Trustee (the "Indemnified Party") from and against any actual loss, damages,
penalties, fines, forfeiture, legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, such breach, except to the extent such
breach is the result of the Indemnified Party's failure to fulfill its
obligations under this Agreement. Promptly after receipt by the Indemnified
Party of notice of the commencement of any such action, the Indemnified Party
will, if a claim in respect thereof is to be made against SMI under this
Section, notify SMI in writing of the commencement thereof, but the omission so
to notify SMI will not relieve SMI from any liability hereunder unless such
omission materially prejudices the rights and positions of SMI. In case any such
action is brought against the Indemnified Party and it notifies SMI of the
commencement thereof, SMI will be entitled to participate therein, and to assume
the defense thereof, with counsel satisfactory to the Indemnified Party, and
after notice from SMI to the Indemnified Party of its election so to assume the
defense thereof, SMI will not be liable to the Indemnified Party under this
Section for any legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof other than reasonable costs of such
investigation. SMI shall (i) pay to Saxon in addition to any amounts that may be
due hereunder, the Issuance Fee if any of the following results in the inability
of the parties hereto to consummate the transactions contemplated herein: (A)
failure to obtain any consent or authorization, if any, required under federal
or Virginia law for SMI to perform the transactions contemplated herein; or (B)
failure to satisfy any of the conditions set forth in Section 8(a), (b), (c) or
(d) hereof.
(b) SMI shall indemnify the Trustee, the Master Servicer, the
Certificate Registrar, the Paying Agent and the Custodian and hold the Trustee,
the Master Servicer, the Certificate Registrar, the Paying Agent and the
Custodian harmless from and against all claims, liabilities, costs and expenses
(including, without limitation, reasonable attorney's fees) arising out of, or
assessed against any of them in connection with, any ERISA violation alleged
against the Trustee, the Master Servicer, the Certificate Registrar, the Paying
Agent and the Custodian relating to the Certificates.
SECTION 13. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed by registered mail, postage prepaid, or transmitted by
telecopier, telex or telegraph and confirmed by a similar mailed writing, as
follows:
(a) If to Saxon:
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: President
9
<PAGE>
with a copy, given in the manner prescribed above, to:
Francis R. Snodgrass, Esquire
Arter & Hadden
1801 K Street, N.W., Suite 400K
Washington, D.C. 20006
(b) If to SMI:
Saxon Mortgage, Inc.
4880 Cox Road
Glen Allen, Virginia 23060
Attention: President
Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this Section for the giving of notice.
SECTION 14. Severability of Provisions. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA,
NOTWITHSTANDING ANY VIRGINIA OR OTHER CONFLICT OF LAWS PROVISIONS TO THE
CONTRARY.
SECTION 16. Agreement of SMI. SMI agrees to execute and deliver such
instruments and take such actions as Saxon,the Master Servicer or the Trustee
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement including, without limitation, the
execution and filing of any UCC financing statements to evidence the interests
of Saxon and any of its transferees in the Mortgage Loans and other assets
assigned to the Trust.
SECTION 17. Survival. SMI agrees that the representations, warranties
and agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by Saxon and ,
notwithstanding any investigation heretofore or hereafter made by Saxon or on
Saxon's behalf, and that the representations, warranties and agreements made by
SMI herein or in any such certificate or other instruments shall survive the
delivery of and payment for the Mortgage Loans.
SECTION 18. Assignment. SMI hereby acknowledges that Saxon will assign
all its rights hereunder (except Saxon's rights set forth in Section 9 and 12)
to the Trustee. SMI agrees that, upon the execution of the Trust Agreement, the
Trustee will have all such rights and remedies provided to Saxon hereunder
(except those rights set forth in Sections 9 and 12) and this Agreement will
inure to the benefit of the Trustee. The Master Servicer, the Custodian, the
Paying Agent and the Certificate Registrar for purposes of Section 12, and the
Trustee and for all purposes, shall constitute not only an assignee of Saxon's
rights in accordance with this Section but also intended third party
beneficiaries of this Agreement.
10
<PAGE>
SECTION 19. Miscellaneous.
(a) This Agreement may be executed in two or more counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective successors and assigns.
(b) Any person into which SMI may be merged or consolidated or any
person resulting from a merger or consolidation involving SMI or any person
succeeding to the business of SMI shall be considered the successor of SMI
hereunder, without the further act or consent of either party. Except as
provided in Section 18 and the preceding sentence, this Agreement may not be
assigned, pledged or hypothecated by any party without the written consent of
each other party to this Agreement.
(c) This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
(d) Saxon shall immediately effect the redelivery of the Mortgage
Loans and all Mortgage Loan Documents and any security interest created by
Section 11 hereof shall be deemed to have been released if, on the Closing Date,
each of the conditions set forth in Section 8 hereof shall not have been
satisfied or waived.
(e) It is the express intent of the parties hereto that the
conveyances of the Mortgage Loans by SMI to Saxon as contemplated by this
Agreement be construed as a sale of the Mortgage Loans by SMI to Saxon. It is,
further, not the intention of the parties that such conveyances be deemed a
pledge of the Mortgage Loans by SMI to Saxon or any assignee of Saxon,
including, but not limited to, the Trustee, to secure a debt or other obligation
of SMI. Nevertheless, if, notwithstanding the intent of the parties, the
Mortgage Loans are held to be property of SMI then (i) this Agreement shall also
be deemed to be a security agreement within the meaning of Article 9 of the
Virginia Uniform Commercial Code and the Uniform Commercial Code of any other
state as necessary; (ii) the conveyances provided for herein shall be deemed to
be a grant by SMI to Saxon of a security interest in all SMI's right, title and
interest in and to the Mortgage Loans and all amounts payable by the holder of
the Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities, or other property, including without limitation all amounts, from
time to time held or invested in the Custodial P&I Account, the related Master
Servicer Custodial Account, the Asset Proceeds Account, the Distribution Account
or any other account established under the Trust Agreement, whether in the form
of cash, instruments, securities or other property; (iii) the conveyances
provided for herein shall be deemed to be a grant by SMI to Saxon of a security
interest in all SMI's right, title and interest in and to the Servicing
Agreements with respect to the Mortgage Loans; (iv) all insurance policies
relating to the Mortgage Loans; (v) the possession by Saxon or its agents of
Notes and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the Virginia Uniform Commercial Code; and (vi) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of Saxon for the purpose of perfecting such
security interest under applicable law. Any assignment of the interest of Saxon
pursuant to any provision hereof shall also be deemed to be an assignment of any
security interest created hereby. SMI and Saxon shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement are deemed to create a security interest in the Mortgage Loans,
such security interest will be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Agreement and the Trust Agreement.
11
<PAGE>
(f) SMI shall not file any involuntary petition or otherwise institute
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under any federal or state bankruptcy or
similar law against Saxon so long as any debt instrument issued by Saxon is
outstanding and for one year and one day thereafter.
SECTION 20. Request for Opinions. SMI and Saxon hereby request and
authorize Arter & Hadden, as their counsel in this transaction, to issue on
behalf of SMI and Saxon such legal opinions to the Master Servicer, the Trustee,
the Underwriters and the Rating Agencies as may be (i) required by any and all
documents, certificates or agreements executed in connection with this Sales
Agreement or (ii) requested by the Master Servicer, the Trustee, the
Underwriters, or the Rating Agencies, or their respective counsel.
12
<PAGE>
IN WITNESS WHEREOF, SMI and Saxon have caused this Sales Agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
SAXON ASSET SECURITIES COMPANY
By: _________________________________
Bradley D. Adams, Vice President
SAXON MORTGAGE, INC.
By: ______________________________
Charles E. Coudriet, President
<PAGE>
SCHEDULE IA
MORTGAGE LOANS IN POOL ONE
(See Schedule IA to Trust Agreement)
SCHEDULE IB
MORTGAGE LOANS IN POOL TWO
(See Schedule IB to Trust Agreement)
<PAGE>
EXHIBIT A TO THE SALES AGREEMENT
BILL OF SALE
BILL OF SALE made on June 24, 1997, by Saxon Mortgage, Inc., a Virginia
corporation ("SMI"), to Saxon Asset Securities Company, a Virginia corporation
("Saxon").
WHEREAS, SMI and Saxon are parties to a sales agreement dated June 16,
1997 (the "Sales Agreement"), with respect to the sale by SMI and purchase by
Saxon of mortgage loans (the "Mortgage Loans");
WHEREAS, Saxon intends to transfer the Mortgage Loans and certain other
assets to Citibank, N. A. (the "Trustee"), as trustee for Saxon Securities Asset
Trust 1997-2 (the "Trust") established pursuant to the Trust Agreement dated as
of June 1, 1997 (the "Trust Agreement"), among Saxon, the Trustee and Texas
Commerce Bank National Association, as Master Servicer, Custodian, Paying Agent
and Certificate Registrar (the "Master Servicer").
NOW THEREFORE, SMI, for and in consideration of the purchase price set
forth in the Sales Agreement, and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, does hereby bargain, sell, convey,
assign and transfer to Saxon, without recourse, free and clear of any liens,
claims or other encumbrances, all its right, title and interest in and to each
of the Mortgage Loans identified on Schedules IA and IB to the Sales Agreement,
together with the Mortgage Loan Documents and other documents maintained as part
of the related Trustee Mortgage Loan Files and Servicer Mortgage Loan Files and
all payments thereon and proceeds of the conversion, voluntary or involuntary of
the foregoing.
SMI hereby acknowledges receipt from Saxon of cash in the amount of
$_________________, which cash, together with the Class C Certificates and
99.99% of the Class R Certificates, constitutes the purchase price for the
Mortgage Loans as set forth in Section 2(a) of the Sales Agreement.
Nothing in this Bill of Sale shall be construed to be a modification
of, or limitation on, any provision of the Sales Agreement, including the
representations, warranties and agreements set forth therein except that SMI, as
of the date hereof, makes the following additional representations and
warranties to Saxon concerning the Mortgage Loans.
(a) All the representations and warranties made by SMI in the Sales
Agreement are true and correct in all material respects as of the date hereof
(subject, in the case of Schedule I delivered pursuant to the Sales Agreement,
to such amendments thereto as were duly made on or before the date hereof).
(b) Since the date of the Sales Agreement, no event has occurred which,
with notice or the passage of time, would constitute a default under the Sales
Agreement, and there has been no material adverse change or development
involving a prospective material adverse change in the business operations,
financial condition, properties or assets of SMI.
A-1
<PAGE>
Unless otherwise defined herein, capitalized terms used in this Bill of
Sale shall have the meanings assigned to them in the Sales Agreement, or if not
assigned in the Sales Agreement, the Trust Agreement.
IN WITNESS WHEREOF, SMI has caused this Bill of Sale to be executed and
delivered by its officer thereunto duly authorized as of the date above written.
SAXON MORTGAGE, INC.
By: ______________________________
Charles E. Coudriet, President
Saxon hereby acknowledges receipt from SMI of the Mortgage Loans
identified on Schedules IA and IB to the Sales Agreement, subject to its right
of inspection set forth in Section 3 of the Sales Agreement, and in payment of
the Issuance Fee referred to in Section 9 of the Sales Agreement including, the
deposit to the Interest Fund as provided in Section 4.03 of the Trust Agreement.
SAXON ASSET SECURITIES COMPANY
By: ________________________________
Bradley D. Adams, Vice President
A-2
<PAGE>
EXHIBIT B TO THE SALES AGREEMENT
REPRESENTATIONS AND WARRANTIES OF SAXON MORTGAGE
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings assigned to them in the Sales Agreement, or if not assigned in
the Sales Agreement, the Trust Agreement.
SMI represents and warrants with respect to the Mortgage Loans being
conveyed by it to Saxon (for purposes of this Exhibit, the "Mortgage Loans") as
follows:
(1) SMI 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 to
Saxon.
(2) There is no litigation pending or, to SMI's knowledge,
threatened against SMI that would reasonably be expected to (i) affect
adversely the transfer of the Mortgage Loans, the issuance of the
Certificates or the execution, delivery, performance or enforceability
of this Agreement or (ii) have a material adverse effect on the
financial condition of SMI.
(3) With respect to each Mortgage Loan, SMI has not acted to
(i) modify the Mortgage Loan in any material respect, (ii) satisfy,
cancel or subordinate the Mortgage Loan in whole or in part, (iii)
release the related Mortgaged Premises in whole or in part from the
lien of the Mortgage Loan or (iv) execute any instrument of release,
cancellation, modification or satisfaction of the Mortgage Loans,
except to the extent reflected in the Loan File.
(4) SMI has not assigned any interest or participation in the
Mortgage Loans other than to Saxon (or, if any such interest or
participation has been assigned, it will be released upon conveyance to
Saxon). On the date of conveyance, SMI will be the sole owner of, and
will have good and marketable title to, the Mortgage Loans, subject to
no prior lien, mortgage, security interest, pledge, charge or other
encumbrance, except any lien to be released concurrently with the
purchase by Saxon of the Mortgage Loans.
(5) With respect to each Mortgage Loan, SMI is in possession
of each of the Mortgage Loan Documents required to be included in the
Trustee Mortgage Loan File and the Servicer Mortgage Loan File, except
for such documents as have been delivered to Saxon (or its designee) or
the applicable Servicer.
(6) The transfer, assignment and conveyance of the Notes and
the Security Instruments by SMI pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction.
(7) Each of the Mortgage Loans was underwritten in
accordance with the standards described in the Prospectus Supplement.
(8) The full principal amount of the Mortgage Loans has been
advanced to the Borrowers or advanced according to the direction of the
Borrowers. The Borrowers have no option under the Security Instruments
to borrow additional funds secured by the Security Instruments. The
Scheduled Principal Balances of the Mortgage Loans are as represented
by SMI to Saxon and are fully secured by the Security Instruments.
(9) All Mortgage Loan documentation, Mortgage Loan submission
documentation and purchase documentation that have been submitted are,
to the best of SMI's knowledge, complete and accurate and have been
completed, executed and delivered in the form and manner as specified
in the Guide. Each Note delivered to Saxon or its custodian is the
original Note and is the only Note evidencing the related Mortgage Loan
that has been manually signed by the Borrower except in those instances
where a Lost Note Affidavit has been delivered to Saxon or its
custodian. As of the date hereof, SMI has no knowledge of any default,
breach, violation or event of acceleration existing under any of the
Mortgage Loan Documents transferred to Saxon or any event that with
notice and expiration of any grace or cure period would result in a
default, breach, violation or event of acceleration. SMI has not waived
any event of default or breach, violation or event of acceleration.
B-1
<PAGE>
(10) All improvements located on each Mortgaged Premises lie
within the boundary lines of the related Mortgaged Premises. There are
no violations of applicable zoning laws or regulations.
(11) Each ARM Loan conforms, if applicable, to its stated
Initial Note Rate, Index, Gross Margin, Interest Rate Change Dates,
Index Value Dates, Payment Change Dates, Maximum Lifetime Note Rate,
Periodic Rate Cap, Periodic Payment Cap, first Interest Rate Change
Date, Initial Periodic Rate Cap, Initial Periodic Payment Cap, any
pre-payment penalty, Minimum Gross Margin, and Minimum Lifetime Note
Rate (as each such term is defined in the Servicer Guide). Each ARM
Loan has been serviced pursuant to prudent servicing standards and FNMA
or FHLMC standards. Installments of principal and interest are subject
to change due to adjustments to the Note Rates, with interest
calculated and payable in arrears, and are sufficient to amortize each
Mortgage Loan fully by the stated maturity date, over an original term
of thirty years from commencement of amortization. All provisions for
the adjustment of Note Rates comply with state and federal law and the
terms of the related Note.
(12) Upon default by a Borrower on a Mortgage Loan and the
subsequent foreclosure on the Mortgaged Premises pursuant to proper
procedures, the holder of the Mortgage Loan will be able to deliver
"Good and Merchantable Title" to the Mortgaged Premises underlying that
Mortgage Loan, except to the extent that the enforceability of remedies
against such Borrower may be subject to applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors'
rights generally from time to time in effect, and to general principles
of equity. There is no homestead exemption or other defense available
to the Borrower that would prevent the sale of the Mortgaged Premises
at a trustee's sale or impair the right of foreclosure.
(13) The property securing all Mortgage Loans conforms to
applicable zoning and use restrictions, housing and building codes, and
allows the Mortgage Loan to qualify as a "Residential Mortgage" as
defined in Section 302 of the Emergency Home Finance Act of 1970,
Section 7701(a)(19)(C)(v) of the Internal Revenue Code of 1954, as
amended, and the rules and regulations promulgated under those acts.
(14) The Note is not secured by any collateral except the
lien of the corresponding Security Instrument.
(15) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by SMI, the Borrower or anyone on behalf
of the Borrower, or paid by any source other than the Borrower, or any
other similar provisions currently in effect which may constitute a
"buydown" provision. No Mortgage Loan is a graduated payment mortgage
loan and no Mortgage Loan has a shared appreciation or other contingent
interest feature.
(16) In connection with the origination and servicing of each
Mortgage Loan, all applicable federal, state and local laws and
regulations including but not limited to consumer credit, equal credit
opportunity, real estate settlement procedures, truth-in-lending and
usury, have been complied with by SMI and the entity from whom SMI
purchased such Mortgage Loans. All levied assessments not part of the
general tax bill have been paid in full before or at closing of each
Mortgage Loan.
(17) SMI has no knowledge of any relief requested or allowed
to any Borrower under the Soldiers' and Sailors' Civil Relief Act of
1940.
(18) All information regarding the Mortgage Loans that could
reasonably be expected to adversely affect the value or the
marketability of any Mortgaged Premises or Mortgage Loan and of which
SMI is aware has been provided by SMI to Saxon.
(19) All amounts, with respect to the Mortgage Loans, received
after the Cut-Off Date and to which SMI is not entitled will be
deposited into the Asset Proceeds Account.
B-2
<PAGE>
(20) SMI did not use adverse selection procedures in
selecting the Mortgage Loans to be sold to Saxon.
(21) There is in effect with respect to each Mortgage Loan
identified on Schedule II a policy of Primary Mortgage Insurance issued
by the mortgage insurance company specified therein; all the
information set forth in Schedule II is true and correct.
(22) The information set forth in Schedule I is true and
correct in all material respects as of the Cut-off Date.
(23) The consideration received by SMI upon the sale of the
Mortgage Loans constitutes fair consideration and reasonably equivalent
value for the Mortgage Loans. SMI will treat the transfer of the
Mortgage Loans to Saxon as a sale for accounting purposes.
(24) SMI is not, and does not expect with the passage of time
to become, insolvent or bankrupt. The sale of the Mortgage Loans will
not cause SMI to become insolvent and is not undertaken with the intent
to hinder, delay or defraud any of SMI's creditors.
(25) SMI intends to relinquish all rights to possess, control
and monitor the Mortgage Loans. SMI will have no right to modify or
alter the terms of the Mortgage Loans, and SMI will have no right or
obligation to repurchase any Mortgage Loan or substitute another
mortgage loan for any Mortgage Loan, except as provided in Sections
3(d), 3(e), 3(f), 7(b) and 7(d) of the Sales Agreement
(26) As of the date hereof, no Borrower is subject to
bankruptcy or insolvency proceedings, and, to the best of SMI's
knowledge, the filing of a bankruptcy or insolvency proceeding that
would result in such Mortgage Loan becoming subject to bankruptcy or
insolvency proceedings is not imminent.
(27) Each Mortgage Loan was originated (in some instances,
within the meaning of the ComFed Savings Bank no-action letter (Sept.
28, 1988)) by a savings and loan association, savings bank, commercial
bank, credit union, insurance company or similar institution which is
supervised and examined by a Federal or state authority or by a
mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act.
(28) Each Security Instrument securing a Mortgage Loan has
been duly executed and delivered by the Borrower and constitutes a
legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency or other laws affecting the enforcement of creditors' rights
generally and to general principles of equity.
(29) Each Security Instrument securing a Mortgage Loan has
been duly recorded in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Premises are located, or SMI has
obtained an Opinion of Counsel that no recording or filing is necessary
in order to make effective the lien and security interest intended to
be created thereby.
(30) If the Security Instrument securing a Mortgage Loan does
not name SMI as the holder, then a valid and recordable Assignment
assigning to SMI the Security Instrument underlying the Mortgage Loan
has been duly recorded in the appropriate governmental recording office
for the jurisdiction in which the Mortgaged Premises are located, and
SMI has delivered to Saxon the original copy of such Assignment with
appropriate evidence that such Assignment has been duly recorded or a
copy of the original Assignment together with a certificate from an
Officer of SMI certifying that such Assignment has been recorded in the
appropriate governmental recording office, but that such recorded
Assignment has not been returned to SMI; provided, however, that such
Assignment shall not be required to have been recorded if Seller shall
have obtained an Opinion of Counsel that no recording is necessary in
order to make effective the assignment intended to be created thereby.
B-3
<PAGE>
(31) A Title Insurance Policy has been issued on a currently
prescribed American Land Title Association form (or other acceptable
form of Title Insurance Policy) with respect to each Mortgage Loan
(other than a Junior Mortgage Loan described below), is valid and
binding and remains in full force and effect and insures SMI, its
successors or assigns as holding a lien for the full principal amount
of such Mortgage Loan with respect to a Junior Mortgage Loan with a
principal balance of $50,000 or less where the senior mortgage loan is
held by an institutional lender such as a bank, other financial
institution or mortgage company, no Title Insurance Policy may have
been issued so long as SMI has determined that the Borrower has valid
title to the Mortgaged Premises based on the property profile or a
title report.
(32) There are no mechanic's or other liens against the
Mortgaged Premises that are superior to or equal to the lien of the
Mortgage Loan, except such liens as are expressly insured against by a
Title Insurance Policy.
(33) A Hazard Insurance Policy is in full force and effect as
required by the Guide, and Flood Insurance coverage is in effect if
required by the Guide. Such insurance policies contain a mortgagee
clause insuring SMI, its successors and assigns. If Mortgage Insurance
is required, all conditions necessary for the effectiveness thereof
have been satisfied, and the Mortgage Insurance is valid and in full
force and effect and meets the requirements of the Guide. Such Mortgage
Insurance is the valid and binding agreement of the insurer, and all
premiums thereon have been paid when due and sufficient escrow
arrangements have been established to provide for future premium
payments. To the best of SMI's knowledge, no events have occurred since
the Mortgage Insurance was issued that would reduce the stated coverage
of the Mortgage Insurance.
(34) All taxes, government assessments or municipal charges
due and owing have been paid, and sufficient escrow arrangements have
been established to make payment thereof on the future.
(35) There has been no casualty damage to the Mortgaged
Premises, except such as is expressly referenced in the Appraisal, nor
is any condemnation proceeding, either in whole or in part, pending or
threatened.
(36) With respect to a deed of trust, the trustee named in the
Mortgage Loan Documents is authorized to serve as such in the
applicable jurisdiction. No fees or expenses are payable by SMI or
Saxon to such trustee pursuant to a deed of trust other than any
applicable trustee's expenses incurred after a default.
(37) An appraisal of each Mortgaged Premises was made by an
appraiser who either (i) met the minimum qualifications of FNMA or
FHLMC for appraisers, and each appraisal was completed on a form
satisfactory to FNMA and FHLMC and includes information concerning
comparable property values or (ii) at the time that the appraisal was
made, was certified in the state in which the Mortgaged Premises are
located.
(38) No Mortgage Loan is secured by a leasehold estate.
(39) Taking into account the specific characteristics of the
various Mortgage Loans: (1)(A) the Servicing Fee Rate for each Mortgage
Loan and (B) all other amounts such as late charges, prepayment fees,
penalty interest, assumption fees or interest earnings (the "Additional
Amounts") that the applicable Servicer and any subservicer retained by
such Servicer are entitled to receive, represent a reasonable and
customary servicing fee for servicing and other duties required to be
performed by such Servicer and the subservicers; and (2) the Servicing
Fee and the Additional Amounts will be divided between each Servicer
and any subservicers retained by it in such proportions that the
amounts retained by each Servicer and each subservicer will represent a
reasonable and customary servicing fee for the performance of the
Mortgage Loan servicing and other duties required to be performed by
each of them.
(40) There is no offset, defense or counterclaim to any Note
or Security Instrument, including any offset, defense or counterclaim
that would excuse or lessen the obligation of the Borrower to pay the
unpaid principal or interest on such Note.
B-4
<PAGE>
(41) Not more than 1% of the Mortgage Loans were more than 30
days delinquent as of the Cut-Off Date.
(42) No more than 5.2% of the Mortgage Loans in the Fixed Rate
Group are secured by second liens, none of the Mortgage Loans in the
Variable Rate Group is secured by second liens and none of the Mortgage
Loans is secured by third liens. With respect to any Mortgage Loan (i)
which is a Junior Mortgage Loan with a balance of $50,000 or less and
(ii) as to which there is not a Title Insurance Policy or a written
commitment to issue a Title Insurance Policy or a certified copy and
(ii) the related senior mortgage is held by an institutional lender
such as a bank, other financial institution or mortgage company, the
Seller has determined based on a review of a property profile or title
report acceptable to such Seller that the Borrower has valid title to
the Mortgaged Premises.
(43) The Security Instrument with respect to 29.10% of the
Mortgage Loans contains a provision for the acceleration of the payment
of the unpaid principal balance of such Mortgage Loans if the related
Mortgaged Premises is sold or transferred without the prior written
consent of the Mortgagee thereunder, at the option of the Mortgagee.
This provision provides that the Mortgagee cannot exercise its option
if either (i) the exercise of such option is prohibited by federal law
or (ii) (A) the Borrower causes to be submitted to the Mortgagee
information required by the Mortgagee to evaluate the intended
transferee as if a new loan were being made to such transferee and (B)
the Mortgagee reasonably determines that the Mortgagee's security will
not be impaired by the assumption of such Mortgage Loan by the
transferee and that the risk of breach of any covenant or agreement in
the Mortgage Loan Documents is acceptable to the Mortgagee. To the best
of SMI's knowledge, such provisions are enforceable.
(44) To the best of SMI's knowledge, no funds provided to a
borrower from a Junior Mortgage Loan were concurrently used as a down
payment for a first Mortgage Loan.
(45) With respect to each Junior Mortgage Loan: (a) the
indebtedness secured by the related prior lien requires equal monthly
payments and does not provide for a balloon payment; (b) at the time of
origination, the related prior lien was not more than 30 days
delinquent; (c) either (i) no consent for the making of such Junior
Mortgage Loan was required by the holder of the related prior lien or
(ii) such consent was obtained and has been delivered to the Trustee;
and (d) SMI has not received, and is not aware of, a notice of default
of any senior mortgage loan which has not been cured.
(46) Each Junior Mortgage Loan had a combined loan-to-value
ratio not greater than 90%; for the purpose of calculating the combined
loan-to-value ratio, the maximum principal of any mortgage loan
providing for negative amortization was used.
(47) None of the Mortgage Loans is a retail installment
contract for goods or services or a home improvement loan for goods or
services, which are either "consumer credit contracts" or purchase
money loans" as such terms are defined in 16 CFR 433.1.
B-5
<PAGE>
Schedule III
Mortgage Loans for which first payment to the Trust will
be after July 1, 1997
32
<PAGE>
<TABLE>
<CAPTION>
Loan Number Borrower 1 Original Amount Current Balance Current Balance Date First Payment Date
<S> <C>
10009685 DECKER, KENNETH $45,650.00 $45,650.00 01-Jun-97 01-Aug-97
10009683 HAMILTON, CHARLES $34,000.00 $34,000.00 01-Jun-97 01-Aug-97
10009680 MCKEON, JAMES $40,500.00 $40,500.00 01-Jun-97 01-Aug-97
10009674 BULLOCK, JO-ANN $78,400.00 $78,400.00 01-Jun-97 01-Aug-97
10009657 HOWARD, THERMON $87,300.00 $87,300.00 01-Jun-97 01-Aug-97
- -------- ----------
5 $285,850.00
</TABLE>
<PAGE>
SAXON ASSET SECURITIES COMPANY
ASSET BACKED CERTIFICATES
STANDARD TERMS TO TRUST AGREEMENT
(January 1997 Edition)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PRELIMINARY STATEMENT.............................................................................................1
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Defined Terms.............................................................................1
Section 1.02. Section References; Calculations; Ratings; Consents; Certain References..................15
Section 1.03. Certain Matters Relating to any Certificate Insurance Policy.............................15
ARTICLE II MORTGAGE LOAN FILES...................................................................................16
Section 2.01. Mortgage Loan Files......................................................................16
Section 2.02. Acceptance by the Trustee................................................................17
Section 2.03. Purchase or Substitution of Mortgage Loans by a Seller, a Servicer or Saxon..............19
Section 2.04. Representations and Warranties of Saxon..................................................22
Section 2.05. Representations and Warranties of the Master Servicer....................................23
ARTICLE III ADMINISTRATION OF THE TRUST..........................................................................24
Section 3.01. Master Servicer Custodial Account........................................................24
Section 3.02. Asset Proceeds Account...................................................................25
Section 3.03. Issuing REMIC Accounts...................................................................26
Section 3.04. Advances by Master Servicer and Trustee..................................................27
Section 3.05. Month End Interest.......................................................................28
Section 3.06. Trustee to Cooperate; Release of Mortgage Files..........................................28
Section 3.07. Reports to the Trustee; Annual Compliance Statements.....................................29
Section 3.08. Title, Management and Disposition of REO Properties......................................29
Section 3.09. Amendments to Servicing Agreements; Modification of the Guide............................32
Section 3.10. Oversight of Servicing...................................................................32
Section 3.11. Credit Enhancement.......................................................................33
ARTICLE IV REPORTING/REMITTING TO CERTIFICATEHOLDERS.............................................................33
Section 4.01. Statements to Certificateholders.........................................................33
Section 4.02. Remittance Reports.......................................................................33
Section 4.03. Compliance with Withholding Requirements.................................................34
Section 4.04. Reports to the Clearing Agency...........................................................34
Section 4.05. Preparation of Regulatory Reports........................................................34
ARTICLE V THE POOLING INTERESTS AND THE CERTIFICATES.............................................................35
Section 5.01. Pooling REMIC Interests..................................................................35
Section 5.02. The Certificates.........................................................................35
Section 5.03. Book-Entry Certificates..................................................................36
Section 5.04. Registration of Transfer and Exchange of Certificates....................................36
Section 5.05. Restrictions on Transfers................................................................37
Section 5.06. Mutilated, Destroyed, Lost or Stolen Certificates........................................38
Section 5.07. Persons Deemed Owners....................................................................39
Section 5.08. Paying Agent.............................................................................39
ARTICLE VI SAXON AND THE MASTER SERVICER.........................................................................39
Section 6.01. Liability of, and Indemnification by, Saxon and the Master Servicer......................39
Section 6.02. Merger or Consolidation of Saxon or the Master Servicer..................................40
Section 6.03. Limitation on Liability of Saxon, the Master Servicer and Others.........................40
Section 6.04. Resignation of the Master Servicer.......................................................40
Section 6.05. Compensation to the Master Servicer......................................................40
Section 6.06. Assignment or Delegation of Duties by Master Servicer....................................40
ARTICLE VII TERMINATION OF SERVICING AND MASTER SERVICING ARRANGEMENTS...........................................41
Section 7.01. Termination and Substitution of Servicing Agreements.....................................41
Section 7.02. Termination of Master Servicer; Trustee to Act...........................................41
Section 7.03. Notification to Certificateholders.......................................................43
ARTICLE VIII CONCERNING THE TRUSTEE..............................................................................43
Section 8.01. Duties of Trustee........................................................................43
Section 8.02. Certain Matters Affecting the Trustee....................................................44
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans....................................45
Section 8.04. Trustee May Own Certificates.............................................................45
Section 8.05. Trustee's Fees...........................................................................45
Section 8.06. Eligibility Requirements for Trustee.....................................................46
Section 8.07. Resignation and Removal of the Trustee...................................................46
Section 8.08. Successor Trustee........................................................................47
Section 8.09. Merger or Consolidation of Trustee.......................................................47
Section 8.10. Appointment of Trustee or Separate Trustee...............................................47
Section 8.11. Appointment of Custodians................................................................48
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates............................48
ARTICLE IX TERMINATION OF THE TRUST; PURCHASE OF CERTIFICATES....................................................48
Section 9.01. Termination of Trust.....................................................................48
Section 9.02. Optional Termination.....................................................................49
Section 9.03. Optional Purchase........................................................................49
Section 9.04. Termination Upon Loss of REMIC Status....................................................49
Section 9.05. Disposition of Proceeds..................................................................50
ARTICLE X REMIC TAX PROVISIONS...................................................................................51
Section 10.02. Prohibited Activities...................................................................52
ARTICLE XI MISCELLANEOUS PROVISIONS..............................................................................53
Section 11.01. Amendment of Trust Agreement............................................................53
Section 11.02. Recordation of Agreement; Counterparts..................................................53
Section 11.03. Limitation of Rights of Certificateholders..............................................53
Section 11.04. Governing Law...........................................................................54
Section 11.05. Notices.................................................................................54
Section 11.06. Severability of Provisions..............................................................54
Section 11.07. Sale of Mortgage Loans..................................................................54
Section 11.08. Notice to Rating Agency.................................................................55
Exhibit A-1 Form of Initial Certification
Exhibit A-2 Form of Final Certification
Exhibit B Form of Recordation Report
Exhibit C Form of Remittance Report
Exhibit D Form of Rule 144A Agreement-QIB Certification
Exhibit E Form of Transferee Agreement
Exhibit F Form of Benefit Plan Affidavit
Exhibit G Form of Residual Transferee Agreement
Exhibit H-1 Form of Disqualified Organization Affidavit
Exhibit H-2 Form of Disqualified Organization Affidavit
</TABLE>
<PAGE>
PRELIMINARY STATEMENT
Saxon Asset Securities Company ("Saxon"), a bank or mortgage banking
company, as administrative agent (in such capacity, the "Master Servicer"), and
a bank or trust company, as trustee (the "Trustee"), have entered into a Trust
Agreement (the "Trust Agreement") that provides for the issuance of a series of
asset backed certificates (the "Certificates") that in the aggregate evidence
the entire interest in mortgage-related assets and certain other property owned
by the trust created by the Trust Agreement (the "Trust"). These Standard Terms
are a part of, and are incorporated by reference into, the Trust Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in the Trust Agreement and as hereinafter
set forth, Saxon, the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms
Except as otherwise specified or as the context may otherwise require,
the following capitalized terms shall, whenever used in the Trust Agreement,
have the respective meanings assigned to them in this Section 1.01. Capitalized
terms used but not defined in the Trust Agreement shall have the respective
meanings assigned to them in the Guide.
"Advance": With respect to any Mortgage Loan, any advance of principal
and interest, taxes, insurance or expenses made by a Servicer, the Master
Servicer, the Trustee or an Insurer.
"Affiliate": Any person or entity controlling, controlled by or under
common control with Saxon or the Master Servicer ("control" meaning the power to
direct the management and policies of a person or entity, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise, and "controlling" and "controlled" having meanings correlative to the
foregoing).
"Annual Compliance Statement": The Officer's certificate required to be
delivered annually by the Master Servicer pursuant to Section 3.07 hereof.
"ARM Loan": An "adjustable rate" Mortgage Loan, the Mortgage Interest
Rate of which is subject to periodic adjustment in accordance with the terms of
the related Mortgage Note.
"Asset Proceeds Account": The account or accounts created and
maintained for the Trust pursuant to Section 3.02 hereof.
"Basis Limit Amount": With respect to a Mortgage Loan purchased from a
REMIC, an amount equal to the REMIC's adjusted federal income tax basis in such
Mortgage Loan as of the date on which the purchase occurs as set forth in a
certificate of an Officer of the Master Servicer, which certificate shall be
delivered to the Trustee in connection with any purchase of a Mortgage Loan.
"Beneficial Owner": With respect to a Book-Entry Certificate, the Person
who is registered as owner of such Certificate in the books of the Clearing
Agency for such Certificate or in the books of a Person maintaining an account
with such Clearing Agency.
"Benefit Plan Affidavit": An affidavit substantially in the form of
Exhibit F attached hereto.
"Benefit Plan Opinion": An Opinion of Counsel satisfactory to the Master
Servicer and the Trustee (and upon which Saxon, the Master Servicer, the Tax
Matters Person and the Trustee are authorized to rely) to the effect that the
proposed transfer will not (i) cause the assets of the Trust to be regarded as
plan assets for purposes of the Plan Asset Regulations, (ii) give rise to any
fiduciary duty under ERISA on the part of Saxon, a Servicer, the Master Servicer
or the Trustee or (iii) result in, or be treated as, a prohibited transaction
under Section 406 or 407 of ERISA or section 4975 of the Code (which opinion
shall not be a cost or expense of Saxon, the Master Servicer, the Tax Matters
Person or the Trustee).
"Book-Entry Certificates": Each Class of Certificates, if any,
specified as such in the Trust Agreement.
"Borrower": With respect to each Mortgage Loan, the individual or
individuals or any Servicer obligated to repay the related Mortgage Note.
"Business Day": Unless otherwise provided in the Trust Agreement, any
day that is not a Saturday, Sunday, or a day on which the Certificate Insurer or
commercial banking institutions in New York City or the city in which the
Corporate Trust Office of the Trustee, or the Paying Agent is located are
authorized or obligated by law or executive order to be closed.
"Certificate": Any asset backed certificate designated in the Trust
Agreement.
"Certificate Guaranty Insurance Policy" means any certificate or
financial guaranty insurance policy identified in the Trust Agreement.
"Certificate Insurer" means the issuer, if any, of a Certificate
Guaranty Insurance Policy with respect to the Certificates named in the Trust
Agreement.
"Certificate Insurer Default": The existence and continuance of any of
the following:
(a) the Certificate Insurer fails to make a payment required under the
Certificate Insurance Policies in accordance with their terms; or
(b) (i) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Certificate Insurer in an
involuntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency, rehabilitation, reorganization or other similar
law or (B) a decree or order adjudging the Certificate Insurer as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
rehabilitation, arrangement, adjustment or composition of or in respect of the
Certificate Insurer under any applicable United States federal or state law, or
appointing a custodian, receiver, liquidator, rehabilitator, assignee, trustee,
sequestrator or other similar official of any substantial part of the
Certificate Insurer's property, or ordering the winding-up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60 consecutive
days; or
(ii) the commencement by the Certificate Insurer of a voluntary case or
proceeding under any applicable United States federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated as bankrupt or insolvent, or the consent of the
Certificate Insurer to the entry of a decree or order for relief in respect of
the Certificate Insurer in an involuntary case or proceeding under any
applicable United States federal or state bankruptcy, insolvency case or
proceeding against the Certificate Insurer, or the consent by the Certificate
Insurer to the filing of such petition or to the appointment of or the taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Certificate Insurer of any substantial part of its
property, or the failure of the Certificate Insurer to pay debts generally as
they become due, or the admission by the Certificate Insurer in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Certificate Insurer in furtherance of any such action;
provided, however, the Certificate Insurer's rights shall be reinstated
following a cure, to the satisfaction of the Trustee, of any Certificate Insurer
Default.
"Certificate of Title Insurance": A certificate of title insurance
issued pursuant to a master title insurance policy.
"Certificate Principal Balance": Unless otherwise provided in the Trust
Agreement, with respect to each Class of Certificates, on any Distribution Date,
the aggregate principal amount, if any, of such Class of Certificates
immediately prior to such Distribution Date (or, in the case of the first
Distribution Date, an amount equal to the aggregate initial principal amount of
such Class of Certificates as of the Closing Date) less the amounts to be
applied on such Distribution Date to reduce the aggregate principal amount of
such Class of Certificates in accordance with the Trust Agreement plus any
amount previously distributed with respect to principal that is recovered as a
voidable preference by a trustee in bankruptcy pursuant to a final,
nonappealable order (except, for purposes of effecting the Certificate Insurer's
subrogation rights, any payment made by the Certificate Insurer with respect to
principal of the Certificates shall not be taken into account).
"Certificate Register": The register maintained pursuant to the related
Trust Agreement.
"Certificate Registrar": The registrar designated in the related Trust
Agreement, or appointed pursuant to Section 5.02 hereof.
2
<PAGE>
"Certificateholders": The holders of the Certificates as recorded on
the Certificate Register.
"Class": The Certificates of a Series bearing the same designation.
"Clearing Agency": The Depository Trust Company or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act and the regulations of the SEC
thereunder.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with such Clearing
Agency.
"Closing Date": The date on which Certificates are issued by a Trust as
set forth in the Trust Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Collateral": With respect to any Mortgage Loan, the Mortgaged Premises
and any real property (other than the related Mortgaged Premises), personal
property, securities, cash, instruments, contracts, or other documents, if any,
constituting or evidencing collateral pledged as additional security for such
Mortgage Loan.
"Converted Mortgage Loan": An ARM Loan with respect to which the
Borrower has complied with the applicable requirements of the related Mortgage
Note to convert the Mortgage Interest Rate relating thereto to a fixed rate of
interest (and with respect to which the related Servicer has processed such
conversion).
"Cooperative Loan": A Mortgage Loan that is secured by a first lien
against (i) shares issued by a cooperative housing corporation and (ii) the
related Borrower's leasehold interest in a cooperative dwelling unit owned by
such cooperative housing corporation.
"Corporate Trust Office": The principal corporate trust office of the
Trustee, any Paying Agent or any Certificate Registrar at which at any
particular time its corporate trust business shall be administered.
"Credit Enhancement": Any certificate guaranty insurance policy,
mortgage pool insurance policy, special hazard insurance policy, special hazard
fund, mortgagor bankruptcy fund, reserve fund, letter of credit, Certificate
Guaranty Insurance Policy, third party guaranty or other form of insurance
specified in the Trust Agreement that is obtained by or on behalf of Saxon with
respect to the Certificates.
"Credit Enhancement Fee": With respect to each form of Credit
Enhancement, the monthly premium or fee that is payable to the provider of such
Credit Enhancement as specified in the Trust Agreement.
"Credit Enhancement Fee Rate": With respect to each form of Credit
Enhancement, each Mortgage Loan and each Distribution Date, an amount equal to
the Credit Enhancement Fee with respect to the related Certificates, divided by
the aggregate Scheduled Principal Balance of the related Mortgage Loans.
"Custodian": The Custodian identified in the Trust Agreement that shall
hold all or a portion of the Trustee Mortgage Loan Files with respect to the
Certificates.
"Cut-Off Date": The date specified as such in the Trust Agreement.
"Defect Discovery Date": With respect to a Mortgage Loan, the date on
which either the Trustee or the Master Servicer first discovers a Qualification
Defect affecting such Mortgage Loan.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced
by a Qualified Substitute Mortgage Loan.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, or any use of such REO Property in a trade or business
conducted by the Trust, in each case other than through an Independent
Contractor; provided, however, that the Trustee or the Master Servicer on behalf
of the Trust shall not be considered to Directly Operate an REO Property solely
because the Trustee or the Master Servicer on behalf of the Trust establishes
rental terms, chooses tenants, enters into or renews leases, deals with taxes
and insurance, or makes decisions as to repairs or maintenance with respect to
such REO Property.
3
<PAGE>
"Disqualified Organization": Either (i) the United States, (ii) any
state or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative described
in section 521 of the Code) that is exempt from federal income tax unless such
organization is subject to tax under the unrelated business taxable income
provisions of the Code, (vii) any organization described in section
1381(a)(2)(C) of the Code, or (vii) any other entity identified as a
disqualified organization by the REMIC Provisions. A corporation will not be
treated as an instrumentality of the United States or any state or political
subdivision thereof if all its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
"Disqualified Organization Affidavit": If provided by a Non-U.S. Person,
an affidavit substantially in the form of Exhibit H-1 attached hereto, and, if
provided by a U.S. Person, an affidavit substantially in the form of Exhibit H-2
attached hereto.
"Distribution Account": With respect to any Double REMIC Series, an
Eligible Account established and maintained with the Paying Agent by the Trustee
for the Issuing REMIC. Unless otherwise provided in the Trust Agreement, the
Distribution Account shall be considered an asset of the Issuing REMIC.
"Distribution Date": Unless otherwise provided in the Trust Agreement,
the 25th day of each month, or the next Business Day if such 25th day is not a
Business Day, commencing in the month following the Closing Date.
"Double REMIC Series": A Series with respect to which two REMIC
elections are made to form an Issuing REMIC and a Pooling REMIC.
"Due Date": The first day of the month of the related Distribution
Date.
"Due Period": Unless otherwise provided in the Trust Agreement, (i) the
period from but excluding the Cut-Off Date to and including the first day of the
month in which the first Distribution Date occurs and (ii) each period
thereafter from and including the second day of a month to and including the
first day of the following month.
"Eligible Account": Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the long-term
or short-term unsecured debt obligations of which (or a federal or state
chartered depository institution or trust company that is the principal
subsidiary of a holding company the long-term or short-term unsecured debt
obligations of which), respectively, are rated by each Rating Agency in one of
its two highest long-term rating categories and its highest short-term rating
category at the time any amounts are held on deposit therein or (ii) a trust
account or accounts maintained with a federal or state chartered depository
institution or trust company, acting in the capacity of a trustee, paying agent
or master servicer, in a manner acceptable to each Rating Agency in respect of
mortgage pass-through certificates rated in one of its two highest rating
categories. Eligible Accounts may be interest-bearing accounts or the funds
therein may be invested in Permitted Investments. If qualified under this
definition, accounts maintained with the Trustee may constitute Eligible
Accounts.
"ERISA": The Employee Retirement Income Securities Act of 1974, as
amended.
"Event of Default": An event with respect to the Master Servicer
described in Section 7.02 hereof.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Final Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit A-2 attached
hereto provided by the Trustee (or the Custodian) on or before the first
anniversary of the Closing Date pursuant to Section 2.02(c) hereof.
"Final Distribution Date": The meaning set forth in Section 9.03
hereof.
"Fiscal Year": Unless otherwise provided in the Trust Agreement, the
fiscal year of the Trust shall run from January 1 (or from the Closing Date, in
the case of the first fiscal year) through the last day of December.
"FNMA Guidelines": The provisions contained in the guide for selling and
servicing first lien residential mortgage loans issued from time to time by the
Federal National Mortgage Association.
4
<PAGE>
"Fraud Losses": Losses on Mortgage Loans resulting from fraud,
dishonesty or misrepresentation in the origination of such Mortgage Loans.
"Gross Margin": With respect to each ARM Loan, the fixed percentage
specified in the related Mortgage Note that is added to or subtracted from the
Index to determine the Mortgage Interest Rate for such ARM Loan.
"Guide": Unless otherwise provided in the Trust Agreement, the SMI
Seller/Servicer Guide, as supplemented and amended from time to time through the
Closing Date.
"Holders": The holders of the Certificates as recorded on the
Certificate Register.
"Home Improvement Loan": A mortgage loan that is made to finance actions
or items that substantially protect or improve the basic livability or utility
of a residential property and that is secured by a lien on such residential
property.
"Independent Contractor": Either (i) any Person (other than the Trustee
or the Master Servicer) that would be an "independent contractor" with respect
to the Trust within the meaning of section 856(d)(3) of the Code if the Trust
were a real estate investment trust (except that, in applying such section, more
than 35% of the outstanding principal balance of any Class shall be deemed to be
more than 35% of the certificates of beneficial interest of the Trust), so long
as the Trust does not receive or derive any income from such Person, the
relationship between such Person and the Trust is at arm's length and such
Person is not an employee of the Trust, the Trustee or the Master Servicer, all
within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Trustee or the Master Servicer) upon receipt by the
Trustee of an Opinion of Counsel, the expense of which shall constitute an
Advance if borne by a Servicer or a subservicer, to the effect that the taking
of any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken
by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents From Real Property.
"Index": With respect to each ARM Loan, the index rate specified in the
related Mortgage Note to which or from which the Gross Margin is added or
subtracted, in accordance with the terms of such Mortgage Note, to determine the
Mortgage Interest Rate for such ARM Loan.
"Initial Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit A-1 attached
hereto provided by the Trustee (or the Custodian) on the Closing Date pursuant
to Section 2.02(b) hereof.
"Initial Mortgage Loans": Any of the Mortgage Loans listed on the
Mortgage Loan Schedule attached to the Trust Agreement.
"Initial Optional Termination Date": As defined in the Trust Agreement.
"Insurance Proceeds": The proceeds paid by any Insurer pursuant to an
insurance policy covering any Mortgage Loan, less the expenses of recovering
such proceeds and any Non-Recoverable Advances made with respect to such
Mortgage Loan.
"Insurer": Any issuer of an insurance policy relating to the Mortgage
Loans.
"Interest Fund": An Eligible Account that may be established for the
purpose of making interest payments on Mortgage Loans for which the Trust is not
due any payments until after the first Distribution Date. The amount of the
Interest Fund, if any, shall be set forth in the Trust Agreement. The Interest
Fund shall not be an asset of any REMIC but shall be for the benefit of the
Certificateholders.
"Interest Shortfall": Month End Interest Shortfall and Soldiers' and
Sailors' Shortfall.
"Issuing REMIC": With respect to any Double REMIC Series, unless
otherwise provided in the Trust Agreement, the REMIC consisting primarily of the
Distribution Account and the Subaccounts of such Distribution Account.
5
<PAGE>
"Junior Mortgage Loan": Any Mortgage Loan with respect to which the
related Security Instrument constitutes a lien of other than first priority on
the related Collateral.
"Letter of Credit": A letter of credit issued to the Trustee and its
successors or assigns by any Person whose long-term unsecured debt obligations
are rated by each Rating Agency in one of its two highest rating categories.
"Liquidation Proceeds": The proceeds received in connection with the
liquidation of any Mortgage Loan as a result of defaults by the related Borrower
(including any insurance or guarantee proceeds with respect to such Mortgage
Loan), less the expenses of such liquidation and any Advances made with respect
to such Mortgage Loan.
"Loan to Value Ratio": With respect to any Mortgage Loan, the ratio that
results when the Unpaid Principal Balance of such Mortgage Loan is divided by
the fair market value of the related Mortgaged Premises. For purposes of
determining that ratio, the fair market value of the Mortgage Premises must be
reduced by (i) the full amount of any lien on such Mortgaged Premises that is
senior to the Mortgage Loan and (ii) a pro rata portion of any lien on such
Mortgaged Premises that is in parity with the Mortgage Loan.
"Master Servicer": The bank or mortgage banking company identified as
such in the Trust Agreement.
"Master Servicer Advance Amount": The amount, if any, specified as such
in the Trust Agreement.
"Master Servicer Compensation": The Master Servicing Fee and any
additional compensation payable to the Master Servicer as specified in Section
6.05 hereof.
"Master Servicer Custodial Account": The account described in Section
3.01 hereof.
"Master Servicer Errors and Omissions Insurance Policy": If the Master
Servicer is not a national banking association, an insurance policy in an amount
and otherwise in form and substance acceptable under FNMA Guidelines insuring
the Master Servicer as the named insured against liability for damages arising
out of errors, omissions or mistakes committed in the performance of the
services and other obligations required of the Master Servicer under the Trust
Agreement and, if permitted by the issuer of such policy, naming the Trustee as
an additional insured, and containing a severability of interests provision but
no other exclusion or other provision that would limit the liability of any
insured to any other insured.
"Master Servicer Fidelity Bond": If the Master Servicer is not a
national banking association, a fidelity bond issued by an insurer and in form
and substance acceptable under FNMA Guidelines (i) under which such insurer
agrees to indemnify the Master Servicer for all losses sustained as a result of
any theft, embezzlement, fraud or other dishonest act on the part of the Master
Servicer's directors, officers or employees and (ii) which provides for limits
of liability for each such director, officer or employee of not less than an
amount required by such guidelines.
"Master Servicer Remittance Date": Unless otherwise provided in the
Trust Agreement, (i) each Distribution Date, if the Asset Proceeds Account and
the Master Servicer Custodial Account are maintained at the same bank, or (ii)
the Business Day preceding each Distribution Date, if such accounts are not
maintained at the same bank.
"Master Servicer Reporting Date": Unless otherwise provided in the Trust
Agreement, the close of business on the third Business Day preceding each
Distribution Date.
"Master Servicing Fee": Unless otherwise provided in the Trust
Agreement, with respect to each Distribution Date and each Mortgage Loan, an
amount equal to one-twelfth of the Master Servicing Fee Rate multiplied by the
Scheduled Principal Balance of such Mortgage Loan as of the preceding Due Date.
"Master Servicing Fee Rate": The rate specified as such in the Trust
Agreement.
"Maximum Lifetime Mortgage Interest Rate": With respect to each ARM
Loan, the interest rate, if any, set forth in the related Mortgage Note as the
maximum Mortgage Interest Rate thereunder.
"Minimum Lifetime Mortgage Interest Rate": With respect to each ARM
Loan, the interest rate, if any, set forth in the related Mortgage Note as the
minimum Mortgage Interest Rate thereunder.
"Month End Interest": With respect to any Mortgage Loan liquidated or
prepaid during a Prepayment Period, the difference between the interest that
would have been paid on such Mortgage Loan through the last day of the month in
which such liquidation or prepayment occurred and the interest actually received
by the Servicer with respect to such
6
<PAGE>
Mortgage Loan, in each case net of the Servicing Fee applicable thereto. No
Month End Interest shall accrue with respect to a prepayment of a Mortgage Loan
or to Liquidation Proceeds received on account of any Mortgage Loan during the
period from the first day of a month through the last day of the Prepayment
Period ending during such month.
"Month End Interest Shortfall": The amount of Month End Interest
not paid by a Servicer or the Master Servicer.
"Monthly Payment": With respect to any Mortgage Loan and any month, the
scheduled payment of principal and interest due in such month under the terms of
the related Mortgage Note.
"Monthly Statement": The statement required to be prepared and delivered
to the Trustee by the Master Servicer on or before each Master Servicer
Reporting Date as described in Section 4.01 hereof.
"Mortgage Interest Rate": With respect to any Mortgage Loan, the annual
interest rate required to be paid by the related Borrower under the terms of the
related Mortgage Note.
"Mortgage Loan": Any of the Single Family Loans, Multi-Family Loans,
Home Improvement Loans, or Cooperative Loans sold by Saxon to the Trust and
listed on the Mortgage Loan Schedule to the Trust Agreement or any Subsequent
Sales Agreement and any loans substituted therefor pursuant to the terms of the
Trust Agreement.
"Mortgage Loan Schedule": The schedule(s) of the Mortgage Loans which
are attached to the Trust Agreement, in the case of the Initial Mortgage Loans,
and to the Subsequent Sales Agreement(s) in the case of Subsequent Mortgage
Loans, and set forth for each Mortgage Loan (i) the Servicer (Saxon) Loan
Number, (ii) the Borrower's name, (iii) the original principal balance, (iv) the
Scheduled Principal Balance as of the Cut-Off Date and (v) such additional
information as may be reasonably requested by the Trustee, the Master Servicer
or any Certificate Insurer.
"Mortgage Note": The note or other evidence of indebtedness of a
Borrower with respect to a Mortgage Loan.
"Mortgaged Premises": With respect to any Mortgage Loan other than a
Cooperative Loan, the real property or the leasehold interest, together with any
improvements thereon, securing the indebtedness of the Borrower under such
Mortgage Loan. With respect to any Cooperative Loan, the shares issued by a
cooperative housing corporation that secure the indebtedness of the Borrower
under such Cooperative Loan.
"Mortgagor Bankruptcy Fund": A fund consisting of: (i) a surety bond,
insurance policy, Letter of Credit, guarantee or other credit instrument, issued
by an insurance company, surety company, bank, trust company, savings and loan
association, financial institution or other Person or (ii) cash, Permitted
Investments or a Class of Certificates or portion thereof held by or on behalf
of the Trust. The Mortgagor Bankruptcy Fund will not be considered an asset of
the Trust or any REMIC, but shall be for the benefit of the Certificateholders.
The owner of the Mortgagor Bankruptcy Fund will be identified in the Trust
Agreement and, to the extent provided in the REMIC Provisions, any amounts
transferred by a REMIC to such fund shall be treated as amounts distributed by
such REMIC to the owner of such fund.
"Mortgagor Bankruptcy Losses": Losses resulting from any court ordered
reduction in the valuation of the Collateral securing a Mortgage Loan or changes
in the repayment terms of a Mortgage Loan in conjunction with a bankruptcy
proceeding of a Borrower or otherwise.
"Multi-Family Loan": A mortgage loan that is secured by a lien on a
rental apartment building, a cooperative housing corporation or a mixed
commercial and residential use property.
"Negative Amortization Amount": With respect to each Mortgage Loan, the
excess, if any, of interest accrued at the related Mortgage Interest Rate for
any month over the greater of (i) the amount of the Monthly Payment for such
month and (ii) the interest received in respect of such month.
"Net Rate": Unless otherwise provided in the Trust Agreement, with
respect to each Mortgage Loan and Distribution Date, the related Mortgage
Interest Rate less the sum of the Servicing Fee Rate, the Master Servicing Fee
Rate, the Trustee Fee Rate and the Credit Enhancement Fee Rate relating thereto.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed, modified or extended on behalf of the Trust
(if the Trustee, the Master Servicer, a Servicer or an agent of the foregoing
has the right to renegotiate the terms of such lease).
7
<PAGE>
"Non-Recoverability Certificate": The meaning set forth in Section 3.04
hereof.
"Non-Recoverable Advance": Any Advance or proposed Advance that the
Master Servicer or the Trustee, as the case may be, has determined to be
non-recoverable in accordance with Section 3.04 hereof.
"Non-U.S. Person": A foreign person within the meaning of Treasury
regulation Section 1.860G-3(a)(1) (i.e., a person other than (i) a citizen or
resident of the United States, (ii) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, or (iii) an estate or trust that is subject to United States federal
income taxation regardless of the source of its income) who would be subject to
United States income tax withholding pursuant to section 1441 or 1442 of the
Code and the Treasury regulations thereunder on income derived from a Residual
Interest.
"Officer": With respect to the Trustee, Custodian, Paying Agent,
Certificate Registrar or Master Servicer, any senior vice president, any vice
president, any assistant vice president, any assistant treasurer, any trust
officer, any assistant secretary, or any other officer customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, and also to whom, with respect to a particular corporate trust
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. With respect to any other Person, the
chairman of the board, the president, a vice president (however designated), the
treasurer or the controller of such Person.
"Opinion of Counsel": A written opinion of counsel, who may be counsel
for Saxon or the Master Servicer, acceptable to the Trustee, the Certificate
Insurer and the Master Servicer. Except with the consent of each Rating Agency
and the Certificate Insurer, an Opinion of Counsel may not be delivered by
in-house counsel of the entity required to deliver such opinion.
"Pass-Through Rate": With respect to each Class of Certificates, as to
each Distribution Date, the rate specified as such in the Trust Agreement.
"Paying Agent": The paying agent designated in the related Trust
Agreement or appointed pursuant to Section 5.08 hereof.
"Percentage Interest": With respect to any Certificate to which a
principal balance is assigned as of the Closing Date, the portion of the Class
evidenced by such Certificate, expressed as a percentage, the numerator of which
is the initial Certificate Principal Balance of such Certificate and the
denominator of which is the aggregate Certificate Principal Balance of all the
Certificates of such Class as of the Closing Date. With respect to any
Certificate to which a principal balance is not assigned as of the Closing Date,
the portion of the Class evidenced by such Certificate, expressed as a
percentage, as stated on the face of such Certificate.
"Permitted Investments": Except as otherwise provided in the Trust
Agreement, the following investments:
(a) direct obligations of, or obligations fully guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(b) senior debt obligations and mortgage participation
certificates of the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation;
(c) repurchase obligations of a depository institution or trust
company (acting as principal) (the collateral for which is held by a
third party or the Trustee) with respect to any security described in
clauses (a) or (b) above, provided that the long-term or short-term
unsecured debt obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in one of its
two highest long-term unsecured debt rating categories and its highest
short-term unsecured debt rating category;
(d) certificates of deposit, time deposits and bankers'
acceptances of any bank or trust company (including the Trustee)
incorporated under the laws of the United States or any state thereof,
provided that the long-term unsecured debt obligations of such bank or
trust company at the date of acquisition thereof have been rated by each
Rating Agency in one of its two highest long-term unsecured debt rating
categories and the short term unsecured debt rating of such bank or
trust company at the date of acquisition thereof by each Rating Agency
is the highest short term unsecured debt rating by each Rating Agency;
8
<PAGE>
(e) any other demand, money market or time deposit or
obligation, interest-bearing or other security or investment earning a
return in the nature of interest that would not adversely affect the
then current rating of the Certificates by any Rating Agency (without
regard to the existence of any Credit Enhancement); and
(f) any other investment approved by the Certificate Insurer;
provided, however, that no investment described above shall constitute a
Permitted Investment if such investment evidences either the right to receive
(i) only interest with respect to the obligations underlying such instrument or
(ii) both principal and interest payments derived from obligations underlying
such instrument if the interest and principal payments with respect to such
instrument provide a yield to maturity at par greater than 120% of the yield to
maturity at par of the underlying obligations; and, provided further, that no
investment described above shall constitute a Permitted Investment unless such
investment matures on or before the Business Day preceding the Distribution Date
on which the funds invested therein are required to be distributed (or, in the
case of an investment that is an obligation of the institution in which the
account is maintained, on or before such Distribution Date).
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"Plan": Any "employee benefit plan" within the meaning of Section 3(3)
of ERISA, any retirement arrangement (including individual retirement accounts,
individual retirement annuities and Keogh plans), and any collective investment
funds, separate accounts, insurance company general accounts and similar pooled
investment funds in which such plans or arrangements are invested, that are
described in or subject to the Plan Asset Regulations, ERISA or corresponding
provisions of the Code.
"Plan Asset Regulations": The United States Department of Labor
regulations set forth in 29 C.F.R. ss. 2510.3-101, as amended from time to
time.
"Plan Investor": Any Plan, any Person acting on behalf of a Plan or any
Person using the assets of a Plan, as determined under the Plan Asset
Regulations.
"Pooling REMIC": With respect to any Double REMIC Series, unless
otherwise provided in the Trust Agreement, the REMIC consisting primarily of the
Mortgage Loans and the Asset Proceeds Account.
"Pre-Funding Account": An Eligible Account that may be established with
the Paying Agent for the purpose of providing for the purchase by the Trust of
Subsequent Mortgage Loans.
"Prepayment Period": The period specified in each Servicing Agreement
with respect to which prepayments or Liquidation Proceeds with respect to a
Mortgage Loan will be remitted on a Remittance Date.
"Private Certificate": Any Certificate designated as such in the Trust
Agreement.
"Private Subordinated Certificate": Any Certificate designated as such
in the Trust Agreement.
"Public Subordinated Certificate": Any Certificate designated as such
in the Trust Agreement.
"Purchase Price": With respect to each Mortgage Loan purchased from the
Trust, an amount equal to the Unpaid Principal Balance of such Mortgage Loan,
plus accrued and unpaid interest thereon at the related Mortgage Interest Rate
to the last day of the month in which such purchase occurs, and, if a Servicer
is the Purchaser, minus any unreimbursed Advances of principal and interest made
by such Servicer on such Mortgage Loan and any outstanding Servicing Fee owed
with respect to such Mortgage Loan.
"Purchaser": The Person that purchases a Mortgage Loan from the Trust
pursuant to Section 2.03 hereof.
"Qualification Defect": With respect to a Mortgage Loan, (i) a defective
document in the Trustee Mortgage Loan File, (ii) the absence of a document in
the Trustee Mortgage Loan File, or (iii) the breach of any representation,
warranty or covenant with respect to such Mortgage Loan made by a Seller, a
Servicer or Saxon, but only if the affected Mortgage Loan would cease to qualify
as a "qualified mortgage" for purposes of the REMIC Provisions. With respect to
a Regular Interest or a mortgage certificate described in section 860G(a)(3) of
the Code, the failure to qualify as a "qualified mortgage" for purposes of the
REMIC Provisions.
9
<PAGE>
"Qualified Institutional Buyer": Any "qualified institutional buyer"
as defined in clause (a)(1) of Rule 144A.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted by
Saxon or a Seller for a Deleted Mortgage Loan that, on the date of such
substitution: (i) has an Unpaid Principal Balance not greater than (and not more
than $10,000 less than) the Unpaid Principal Balance of the Deleted Mortgage
Loan, (ii) has a Mortgage Interest Rate not less than (and not more than one
percentage point in excess of) the Mortgage Interest Rate of the Deleted
Mortgage Loan, (iii) has a Net Rate not less than the Net Rate of the Deleted
Mortgage Loan, (iv) has a remaining term to maturity not greater than (and not
more than one year less than) the remaining term to maturity of the Deleted
Mortgage Loan, (v) has a Loan-to-Value Ratio as of the first day of the month in
which the substitution occurs equal to or less than the Loan-to-Value Ratio of
the Deleted Mortgage Loan as of such date (in each case, using the fair market
value at origination and after taking into account the Monthly Payment due on
such date), and (vi) complies with each applicable representation, warranty, and
covenant pertaining to the Mortgage Loans set forth in the Trust Agreement and,
if a Seller is effecting the substitution, complies with each applicable
representation, warranty, or covenant pertaining to the Mortgage Loans set forth
in the related Sales Agreement or Subsequent Sales Agreement; provided, however,
that no ARM Loan may substituted for a Deleted Mortgage Loan unless such Deleted
Mortgage Loan is also an ARM Loan and, in addition to meeting the conditions set
forth above, the ARM Loan to be substituted, on the date of the substitution:
(a) has a Minimum Lifetime Mortgage Interest Rate that is not less than the
Minimum Lifetime Mortgage Interest Rate on the Deleted Mortgage Loan, (b) has a
Maximum Lifetime Mortgage Interest Rate that is not less than the Maximum
Lifetime Mortgage Interest Rate on the Deleted Mortgage Loan, (c) provides for a
lowest possible Net Rate that is not lower than the lowest possible Net Rate for
the Deleted Mortgage Loan and a highest possible Net Rate that is not lower than
the highest possible Net Rate for the Deleted Mortgage Loan, (d) has a Gross
Margin that is not less than the Gross Margin of the Deleted Mortgage Loan, (e)
has a Periodic Rate Cap equal to the Periodic Rate Cap on the Deleted Mortgage
Loan, (f) has a next interest adjustment date that is the same as the next
interest adjustment date for the Deleted Mortgage Loan or occurs not more than
two months prior to the next interest adjustment date for the Deleted Mortgage
Loan, (g) does not have a permitted increase or decrease in the Monthly Payment
less than the permitted increase or decrease applicable to the Deleted Mortgage
Loan, (h) was underwritten on the basis of credit underwriting standards at
least as strict as the credit underwriting standards used with respect to the
Deleted Mortgage Loan; and (i) is not convertible to a fixed Mortgage Interest
Rate unless the Deleted Mortgage Loan is so convertible. If more than one
mortgage loan is substituted for one or more Deleted Mortgage Loans, the amount
described in clause (i) of the preceding sentence shall be determined on the
basis of aggregate Unpaid Principal Balances, the rates described in clauses
(iii) of the preceding sentence and clauses (a), (b) and (c) of the proviso to
the preceding sentence shall be determined on the basis of weighted average
Mortgage Interest Rates and Net Rates, as the case may be, the term described in
clause (iv) of the preceding sentence shall be determined on the basis of
weighted average remaining term to maturity, provided that no Qualified
Substitute Mortgage Loan may have an original term to maturity beyond the latest
original term to maturity of any Mortgage Loan transferred and assigned to the
Trust on the Closing Date, the Gross Margins described in clause (d) of the
proviso to the preceding sentence shall be determined on the basis of weighted
average Gross Margins, and the interest adjustment dates described in clause (g)
of the proviso to the preceding sentence shall be determined on the basis of
weighted average interest adjustment dates. In the case of a Trust for which a
REMIC election has been or will be made, a Qualified Substitute Mortgage Loan
also shall satisfy the following criteria as of the date of its substitution for
a Deleted Mortgage Loan: (A) the Borrower shall not be 60 or more days
delinquent in payment on the Qualified Substitute Mortgage Loan, (B) the Trustee
Mortgage Loan File for such Mortgage Loan shall not contain any material
deficiencies in documentation and shall include an executed Mortgage Note and a
recorded Security Instrument; (C) the Loan to Value Ratio of such Mortgage Loan
must be 125% or less on the date of origination of such Mortgage Loan or, if any
of the terms of such Mortgage Loan were modified other than in connection with a
default or imminent default on such Mortgage Loan, on the date of such
modification; (D) no property securing such Mortgage Loan may be subject to
foreclosure, bankruptcy, or insolvency proceedings; and (E) such Mortgage Loan
must be secured by a valid lien on the related Mortgaged Premises.
"Rating Agency": Each nationally recognized statistical rating agency
specified in the Trust Agreement that, on the Closing Date, rated one or more
Classes of Certificates at the request of Saxon.
"Realized Interest Shortfall": With respect to any Mortgage Loan, the
amount by which the interest payable thereon exceeds the net amount recovered
(including Insurance Proceeds) in liquidation thereof, after payment of expenses
of liquidation and reimbursement of Advances made with respect to such Mortgage
Loan.
10
<PAGE>
"Realized Loss": With respect to any Mortgage Loan, an amount equal to
the sum of (i) the amount by which the Unpaid Principal Balance thereof exceeds
the net amount recovered in liquidation thereof (after payment of expenses of
liquidation and reimbursement of Advances), after payment of accrued interest on
such Mortgage Loan and after application of any Insurance Proceeds with respect
thereto, and (ii) any other types of principal loss with respect to such
Mortgage Loan, including, but not limited to, Mortgagor Bankruptcy Losses,
Special Hazard Losses and Fraud Losses.
"Record Date": Unless otherwise provided in the Trust Agreement, (i)
with respect to the first Distribution Date, the Closing Date, and (ii) with
respect to each Distribution Date thereafter, the last Business Day of the month
preceding the month in which such Distribution Date occurs.
"Recordation Report": A report substantially in the form of Exhibit B
attached hereto provided by the Trustee (or the Custodian) pursuant to Section
2.02 hereof identifying those Mortgage Loans for which a Security Instrument or
an Assignment remains unrecorded.
"Redeeming Purchase": The purchase of all the Regular Certificates
issued by the Trust pursuant to Section 9.01 hereof.
"Redemption Account": An escrow account maintained by the Trustee
into which any Trust funds not distributed on a Distribution Date on which
a Redeeming Purchase is made are deposited. The Redemption Account shall be
an Eligible Account.
"Redemption Date": The date, if any, specified as such in the Trust
Agreement.
"Regular Certificate": A Certificate that represents a Regular
Interest or a combination of Regular Interests.
"Regular Interest": An interest in a REMIC that is designated as a
"regular interest" in such REMIC for purposes of the REMIC Provisions.
"REMIC": With respect to a Trust, each "real estate mortgage investment
conduit," within the meaning of the REMIC Provisions, relating to such Trust.
"REMIC Provisions": The provisions of the Code relating to "real estate
mortgage investment conduits," which provisions appear at sections 860A through
860G of the Code, related Code provisions, and regulations, announcements and
rulings thereunder, as the foregoing may be in effect from time to time.
"Remittance Date": The date specified in the Servicing Agreement as the
date on which the related Servicer is to make the remittance required by Section
3.01(b) hereof.
"Remittance Report": A report (either a data file or hard copy) that is
prepared by the Master Servicer in accordance with Section 4.02 hereof and
contains the information specified in Exhibit C attached hereto.
"Rents From Real Property": With respect to any REO Property, gross
income of the character described in section 856(d) of the Code and the Treasury
regulations thereunder.
"REO Disposition": The receipt by a Servicer of Insurance Proceeds and
other payments and recoveries (including Liquidation Proceeds) which a Servicer
recovers from the sale or other disposition of an REO Property.
"REO Property": A Mortgaged Premises acquired by a Servicer on behalf of
the Certificateholders through foreclosure or deed in lieu of foreclosure, as
further described in Section 3.08 hereof.
"Request for Release": A release signed by an Officer of a Servicer in
the form attached to the Servicing Agreement as Form 340 of the Guide (or a
similar certificate of the Master Servicer containing the same information).
"Reserve Fund": Unless otherwise provided in the Trust Agreement, any
fund in the Trust Estate other than (i) the Asset Proceeds Account or (ii) any
other fund that is expressly excluded from a REMIC.
"Residual Certificate": A Certificate that represents a Residual
Interest.
"Residual Interest": An interest in a REMIC that is designated as a
"residual interest" in such REMIC for purposes of the REMIC Provisions.
"Residual Transferee Agreement": An agreement substantially in the form
of Exhibit G attached hereto.
11
<PAGE>
"Rule 144A": Rule 144A promulgated by the SEC, as the same may be
amended from time to time.
"Rule 144A Agreement": An agreement substantially in the form of
Exhibit D attached hereto.
"Sales Agreement": The Sales Agreement identified in the Trust
Agreement.
"Saxon": Saxon Asset Securities Company, a Virginia corporation.
"Scheduled Principal Balance": Unless otherwise provided in the Trust
Agreement, with respect to any Mortgage Loan as of any date of determination,
the scheduled principal balance thereof as of the Cut-Off Date, increased by the
Negative Amortization Amount, if any, with respect thereto, and reduced by (i)
the principal portion of all Monthly Payments due on or before such
determination date, whether or not paid by the Borrower or advanced by a
Servicer, the Master Servicer, the Trustee or an Insurer, (ii) all amounts
allocable to unscheduled principal payments received on or before the last day
of the Prepayment Period preceding such date of determination, and (iii) without
duplication, the amount of any Realized Loss that has occurred with respect to
such Mortgage Loan.
"SEC": The Securities and Exchange Commission and its successors.
"Securities Act": The Securities Act of 1933, as amended.
"Security Instrument": With respect to any Mortgage Loan, the mortgage,
deed of trust, deed to secure debt, security deed, or other instrument creating
a first, second, or more junior lien on the Collateral that secures the
indebtedness of the Borrower under such Mortgage Loan.
"Seller": With respect to each Mortgage Loan, SMI or any other party
other than Saxon that executes a Sales Agreement applicable to such Mortgage
Loan.
"Senior Mortgage Loan": Any Mortgage Loan with respect to which the
related Security Instrument constitutes a lien of first priority on the related
Collateral.
"Series": A group of Certificates issued by the Trust.
"Servicer": With respect to each Mortgage Loan, the Person
responsible for the servicing thereof in accordance with the Guide.
"Servicer Compensation": The Servicing Fee and any additional
compensation payable to the Servicer.
"Servicing Agreement": Any agreement between a Servicer and SMI or Saxon
relating to the servicing of Mortgage Loans which is in form and substance
satisfactory to the Master Servicer.
"Servicing Fee": Unless otherwise provided in the Trust Agreement, with
respect to each Distribution Date and each Mortgage Loan, an amount equal to
one-twelfth of the applicable Servicing Fee Rate multiplied by the Scheduled
Principal Balance of such Mortgage Loan as of the first day of the preceding Due
Period.
"Servicing Fee Rate": The rate specified as such in the Trust
Agreement.
"Single Family Loan": A mortgage loan that is secured by a first,
second, or more junior lien on a one- to four-family residential property.
"SMI": Saxon Mortgage, Inc., a Virginia corporation.
"Special Hazard Fund": A fund consisting of: (i) a surety bond,
insurance policy, Letter of Credit, guarantee or other credit instrument issued
by an insurance company, surety company, bank, trust company, savings and loan
association, financial institution or other Person or (ii) cash, Permitted
Investments or a Class of Certificates or portion thereof held by or on behalf
of the Trust. The Special Hazard Fund will not be considered an asset of any
REMIC but shall be for the benefit of the Certificateholders. The owner of the
Special Hazard Fund will be identified in the Trust Agreement and, to the extent
provided in the REMIC Provisions, any amounts transferred by a REMIC to such
fund shall be treated as amounts distributed by such REMIC to the owner of such
fund.
"Special Hazard Insurance Policy": An insurance policy covering a
Mortgage Loan against (i) loss by reason of damage to Mortgaged Premises caused
by certain hazards not covered by any hazard insurance and (ii) partial loss
12
<PAGE>
from damage to the Mortgaged Premises caused by reason of the application of the
coinsurance clause contained in any Hazard Insurance policy.
"Special Hazard Losses": Losses on Mortgage Loans arising by reason of
damage to Mortgaged Premises not covered by hazard insurance, excluding losses
caused by war, nuclear reaction, nuclear or atomic weapons, insurrection or
normal wear and tear.
"Special Tax Consent": The written consent of the Holder of a Residual
Certificate to any tax (or risk thereof) arising out of a proposed transaction
or activity that may be imposed upon such Holder or that may affect adversely
the value of such Residual Certificate.
"Special Tax Opinion": An Opinion of Counsel that a proposed transaction
or activity will not (i) affect adversely the status of any REMIC as a REMIC or
of the Regular Interests as the "regular interests" therein under the REMIC
Provisions, (ii) affect the payment of interest or principal on the Regular
Interests or (iii) result in the encumbrance of the Mortgage Loans by a tax
lien.
"Standard Terms": These Standard Terms, as amended or supplemented from
time to time.
"State": The jurisdiction specified in the Trust Agreement.
"Subaccount": With respect to any Double REMIC Series, each subaccount
of the Distribution Account that is deemed established by the Paying Agent
solely for purposes of the REMIC Provisions pursuant to Section 3.03(a) hereof.
"Subsequent Cut-Off Date": The time and date specified in a Subsequent
Sales Agreement with respect to those Subsequent Mortgage Loans which are
acquired by the Trust pursuant to such Subsequent Sales Agreement.
"Subsequent Mortgage Loans": Any of the Mortgage Loans listed on a
Mortgage Loan Schedule attached to a Subsequent Sales Agreement.
"Subsequent Sales Agreement": Each Subsequent Sales Agreement executed
by the Master Servicer (on behalf of itself and the Trustee), the Seller and SMI
by which Subsequent Mortgage Loans are sold to the Trust in the form attached to
the related Trust Agreement.
"Substitution Shortfall": The meaning set forth in Section 2.03(h)
hereof.
"TAPRI Certificate": A certificate signed by the transferor of a
Residual Certificate stating whether such Certificate has "tax avoidance
potential" as defined in Treasury regulations section 1.860G-3(a)(2).
"Tax Matters Person": The Person or Persons designated from time to time
under the Trust Agreement to act as the "tax matters person" (within the meaning
of the REMIC Provisions) of a REMIC.
"Title Insurance Policy": A title insurance policy insuring the title to
Mortgaged Premises for the benefit of the holder of the related Mortgage Note.
"Transferee Agreement": An agreement substantially in the form of
Exhibit E attached hereto.
"Treasury": The United States Treasury Department.
"Trust": The trust formed pursuant to the Trust Agreement.
"Trust Agreement": The Trust Agreement among Saxon, the Master Servicer
and the Trustee relating to the issuance of Certificates and into which these
Standard Terms are incorporated by reference.
"Trust Estate": The segregated pool of assets transferred and assigned
and to be transferred and assigned to the Trustee for the benefit of the
Certificateholders by Saxon pursuant to the conveyance clause of the Trust
Agreement.
"Trustee": The bank or trust company identified as the Trustee in the
Trust Agreement.
"Trustee Fee": Unless otherwise provided in the Trust Agreement, with
respect to each Distribution Date and each Mortgage Loan, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Scheduled Principal
Balance of such Mortgage Loan as of the first day of the preceding Due Period.
13
<PAGE>
"Trustee Fee Rate": The rate specified as such in the Trust Agreement.
"Trustee Mortgage Loan File": With respect to each Cooperative Loan, the
file containing the documents specified in the Trust Agreement. With respect to
each Mortgage Loan that is not a Cooperative Loan, unless otherwise specified in
the Trust Agreement, the file containing the following documents, together with
any other Mortgage Loan Documents held by the Trustee or the Custodian with
respect to such Mortgage Loan:
(a) the original Mortgage Note, endorsed in blank or to the
Trustee or the Custodian with all prior and intervening
endorsements as may be necessary to show a complete chain of
endorsements from the originator and any related power of
attorney, surety or guaranty agreement, Note Assumption Rider
or buydown agreement;
(b) the original recorded Security Instrument with evidence of
recordation noted thereon or attached thereto, together with
any addenda or riders thereto, or a copy of such recorded
Security Instrument with such evidence of recordation
certified to be true and correct by the appropriate
governmental recording office, or, if such original Security
Instrument has been submitted for recordation but has not
been returned from the applicable public recording
office, a photocopy of such Security Instrument certified
by an Officer of the Servicer or by the title insurance
company providing title insurance in respect of such
Security Instrument, the closing/settlement - escrow agent
or the closing attorney to be a true and correct copy of the
original Security Instrument submitted for recordation;
(c) each original recorded intervening assignment of the
Security Instrument as may be necessary to show a complete
chain of title from the originator to the related
Servicer, Trustee or Custodian, as applicable, with
evidence of recordation noted thereon or attached thereto, or
a copy of such assignment with such evidence of recordation
certified to be true and correct by the appropriate
governmental recording office or, if any such Assignment has
been submitted for recordation but has not been returned
from the applicable public recording office or is not
otherwise available, a copy of such certified by an
Officer of the Servicer to be a true and correct copy of the
recorded assignment or the assignment submitted for
recordation;
(d) if an assignment of the Security Instrument to the related
Servicer has been recorded or sent for recordation, an
original assignment of the Security Instrument from such
Servicer in blank or to the Trustee or the Custodian in
recordable form;
(e) an original Title Insurance Policy, Certificate of Title
Insurance or a written commitment to issue such a Title
Insurance Policy or Certificate of Title Insurance, or a copy
of a Title Insurance Policy or Certificate of Title Insurance
certified as true and correct by the applicable Insurer;
(f) if indicated on a Schedule to the Trust Agreement or a
Subsequent Sales Agreement (or otherwise received by the
Trustee or the Custodian), the original or certified copies of
each assumption agreement, modification agreement, written
assurance or substitution agreement, if any; and
(g) any other items required by the Rating Agencies as a condition
to their provision of written confirmation that the ratings on
the rated Certificates will not be downgraded (without regard
to any Certificate Guaranty Insurance Policy) or required by
the Certificate Insurer.
"UCC": The Uniform Commercial Code, as in effect in the State from time
to time.
"Unpaid Principal Balance": With respect to any Mortgage Loan, the
outstanding principal balance thereof payable by the Borrower under the terms of
the related Mortgage Note.
"U.S. Person": A Person other than a Non-U.S. Person.
"Voting Rights": The portion of the voting rights of all the
Certificates that is allocated to any Certificate. Unless otherwise provided in
the Trust Agreement, (i) if any Class of Certificates does not have a
Certificate Principal Balance or has an initial Certificate Principal Balance
that is less than or equal to 1% of the aggregate Certificate Principal Balance
of all the Certificates, then 1% of the Voting Rights shall be allocated to each
Class of such Certificates and the balance of the Voting Rights shall be
allocated among the remaining Classes of Certificates in proportion to their
respective Certificate Principal Balances following the most recent Distribution
Date, and (ii) if no
14
<PAGE>
Class of Certificates has an initial Certificate Principal Balance that is less
than 1% of the aggregate Certificate Principal Balance of all the Certificates,
then all the Voting Rights shall be allocated among all the Classes of
Certificates in proportion to their respective Certificate Principal Balances
following the most recent Distribution Date. Voting Rights allocated to each
Class of Certificates shall be allocated in proportion to the respective
Percentage Interests of the Holders thereof.
"Withholding Agent": The Paying Agent or any other person who is liable
to withhold federal income tax from a distribution on a Residual Certificate
under section 1441 or 1442 of the Code and the Treasury regulations thereunder.
Section 1.02. Section References; Calculations; Ratings; Consents
(a) Unless otherwise specified herein, all references in these Standard
Terms to sections shall mean sections contained in these Standard Terms.
(b) Unless otherwise provided in the Trust Agreement, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
(c) Unless otherwise provided in the Trust Agreement, all references
herein to any long-term rating category of a Rating Agency shall mean such
rating category without regard to any plus or minus or numerical designation.
(d) Whenever the consent of any Person is required hereunder, such
Person shall not be entitled to withhold its consent unreasonably.
Section 1.03. Certain Matters Relating to any Certificate Insurance
Policy
(a) The Trustee shall surrender any Certificate Insurance Policy to the
Certificate Insurer for cancellation upon termination of the Trust pursuant to
the applicable provisions of the Trust Agreement.
(b) Saxon makes the representations and warranties set forth in Section
2.04 and the Master Servicer makes the representations and warranties set forth
in Section 2.05 to the Certificate Insurer.
(c) All notices, statements, reports, certificates or opinions required
by the Trust Agreement to be sent to any party hereto or to any of the
Certificateholders shall also be sent to the Certificate Insurer. Any such
opinions shall be given by counsel reasonably acceptable to the Certificate
Insurer. The Trust and the Trustee shall make available to the Certificate
Insurer their books and records, during normal business hours, for the purpose
of copying and inspecting any information about the Certificates, the Trust
Estate or the Certificateholders.
(d) The Certificate Insurer shall be entitled to indemnification
pursuant to Section 5.05 and 6.01 hereof and to security or indemnity pursuant
to Section 5.06 hereof to the same extent as the parties named in those
Sections.
(e) Unless a Certificate Insurer Default exists and is continuing:
(i) The Certificate Insurer shall be entitled to exercise the
Voting Rights, other than with respect to amendments to the Trust
Agreement pursuant to Section 11.01 hereof requiring the consent of
Certificateholders, of any Class of the Certificates which are covered
by a Certificate Guaranty Insurance Policy issued by such Certificate
Insurer and the Certificateholders may not exercise such rights without
the prior written consent of the Certificate Insurer.
(ii) the Certificate Insurer shall have the right to institute
any suit, action or proceeding in equity or at law upon or under or
with respect to the Trust Agreement if it previously shall have given
the Trustee a written notice of default and of the continuance thereof
and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred
therein or thereby and the Trustee, for 15 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding;
(iii) the Certificate Insurer's prior written consent will be
required (A) to remove any Trustee, Custodian, Master Servicer or
Servicer, (B) to appoint any successor Trustee, Custodian, Master
Servicer or Servicer or (C) to amend the Agreement or the Guide;
15
<PAGE>
(iv) the Certificate Insurer may give notice to the Master
Servicer and the Trustee with respect to Events of Default and may
direct the Trustee to give any notice pursuant to Section 7.02(a)
hereof or to exercise any right to remove any Trustee, Custodian,
Master Servicer or Servicer;
(v) the Trustee shall not exercise the right, without the
prior written consent of the Certificate Insurer (A) to consent to the
resignation of the Master Servicer pursuant to Section 6.04 hereof or
any assignment or delegation of duties pursuant to Section 6.06 hereof;
(B) consent to the resignation of the Servicer pursuant to the
Servicing Agreement; (B) to undertake any litigation pursuant to the
Agreement; (C) to exercise any of the remedies set forth in Section
7.01 or Section 7.02 hereof; or (v) to agree to any amendment to any
Sales Agreement (or the transfer or assignment thereof), any Servicing
Agreement or the Custody Agreement; and
(vi) the Trustee shall cooperate in all respects with any
reasonable request by the Certificate Insurer for action to preserve or
enforce the Certificate Insurer's rights or interests hereunder or
under the Trust Agreement without limiting the rights or affecting the
interests of the Holders as otherwise set forth herein or under the
Trust Agreement.
(f) Whenever reference is made in these Standard Terms, the Trust
Agreement or the Certificates to "on behalf of the Certificateholders (and for
the exclusive use and benefit of all present and future Certificateholders)",
"the benefit of the Certificateholders", or "for the benefit of the
Certificateholders", such references shall be deemed to include the Certificate
Insurer, and references to "the interest of the Trust", "an adverse effect on
the Certificateholders or the Trust" or "the interests of the
Certificateholders" shall be deemed to include the Certificate Insurer.
(g) This Section 1.03 and references to Certificate Insurer in the
Standard Terms shall be deemed to be deleted with respect to any Trust Agreement
if a Certificate Guaranty Insurance Policy is not issued with respect to one or
more Classes of Certificates issued pursuant thereto.
ARTICLE II
MORTGAGE LOAN FILES
Section 2.01. Mortgage Loan Files
(a) Pursuant to the Trust Agreement, Saxon has sold to the Trustee, for
the benefit of the Certificateholders without recourse all the right, title and
interest of Saxon in and to the Initial Mortgage Loans, any and all rights,
privileges and benefits accruing to Saxon under the Sales Agreement and
Servicing Agreement with respect to the Initial Mortgage Loans (except, in the
case of the Sales Agreement, any rights of Saxon to fees and indemnification by
the Seller under such Agreement), including the rights and remedies with respect
to the enforcement of any and all representations, warranties and covenants
under such agreements, and all other agreements and assets included or to be
included in the Trust for the benefit of the Certificateholders as set forth in
the conveyance clause of the Trust Agreement. Such sale includes all Saxon's
rights to Monthly Payments on the Initial Mortgage Loans due after the Cut-Off
Date, and all other payments of principal (and interest) made on or after the
Cut-Off Date that are reflected in the initial aggregate Certificate Principal
Balance of the Certificates issued pursuant to the Trust Agreement (other than
amounts deposited in a Pre-Funding Account).
In connection with such sale, Saxon shall deliver, or cause to be
delivered, to the Trustee or the Custodian on or before the Closing Date, a
Trustee Mortgage Loan File with respect to each Initial Mortgage Loan. If any
Security Instrument or assignment of a Security Instrument to the related
Servicer, the Trustee, or the Custodian, as applicable, or any intervening
assignment is in the process of being recorded on the Closing Date, Saxon shall
cause each such original recorded document, or a certified copy thereof, to be
delivered to the Custodian promptly following its recordation. Saxon also shall
cause to be delivered to the Custodian any other original Mortgage Loan
Documents to be included in the Trustee Mortgage Loan File if a copy thereof
initially was delivered.
Saxon has delivered or caused to be delivered to each Servicer, on or
before the Closing Date, a Servicer File with respect to each Initial Mortgage
Loan serviced by such Servicer. All such documents shall be held by such
Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
(b) Pursuant to the Trust Agreement, Saxon may sell to the Trustee, for
the benefit of the Certificateholders without recourse all the right, title and
interest of Saxon in and to the Subsequent Mortgage Loans, any and all rights,
privileges and benefits accruing to Saxon under the Subsequent Sales Agreements
and the Servicing Agreement with
16
<PAGE>
respect to the Mortgage Loans (except, in the case of the Subsequent Sales
Agreement, any rights of Saxon to fees and indemnification by the Seller under
such Agreement), including the rights and remedies with respect to the
enforcement of any and all representations, warranties and covenants under such
agreements, and all other agreements and assets included or to be included in
the Trust for the benefit of the Certificateholders as set forth in the
conveyance clause of the Trust Agreement. Any such sale shall include all
Saxon's rights to Monthly Payments on the Subsequent Mortgage Loans due after
the applicable Subsequent Cut-Off Date, and all other payments of principal (and
interest) made on or after the applicable Subsequent Cut-Off Date that are
reflected in the purchase price therefor.
In connection with any such sale, Saxon shall deliver, or cause to be
delivered, to the Trustee or the Custodian on or before the applicable
Subsequent Sales Date, a Trustee Mortgage Loan File with respect to each
Mortgage Loan. If any Security Instrument or assignment of a Security Instrument
to the related Servicer, the Trustee, or the Custodian, as applicable, or any
intervening assignment is in the process of being recorded on the applicable
Subsequent Sales Date, Saxon shall cause each such original recorded document,
or a certified copy thereof, to be delivered to the Custodian promptly following
its recordation. Saxon also shall cause to be delivered to the Custodian any
other original Mortgage Loan Documents to be included in the Trustee Mortgage
Loan File if a copy thereof initially was delivered.
Saxon will deliver or cause to be delivered to each Servicer, on or
before the applicable Subsequent Sales Date, a Servicer File with respect to
each Mortgage Loan serviced by such Servicer. All such documents shall be held
by such Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
Section 2.02. Acceptance by the Trustee
(a) By its execution of the Trust Agreement, each of the Trustee and the
Custodian acknowledges and declares that it holds and will hold or has agreed to
hold all documents delivered to it from time to time with respect to each
Mortgage Loan and all assets included in the Trust Estate in trust for the
exclusive use and benefit of all present and future Certificateholders. The
Trustee represents and warrants that (i) it acquired the Initial Mortgage Loans,
and will acquire Subsequent Mortgage Loans, on behalf of the Trust from Saxon in
good faith, for value and without actual notice or actual knowledge of any
adverse claim, lien, charge, encumbrance or security interest (including, but
not limited to, federal tax liens or liens arising under ERISA) (it being
understood that the Trustee has not undertaken, and will not undertake, searches
(lien records or otherwise) of any public records), (ii) except as permitted in
the Trust Agreement, it has not and will not, in any capacity, assert any claim
or interest in the Mortgage Loans and will hold (or its agent will hold) such
Mortgage Loans and the proceeds thereof in trust pursuant to the terms of the
Trust Agreement and (iii) it has not encumbered or transferred its right, title
or interest in the Mortgage Loans.
(b) The Custodian shall deliver to Saxon, the Trustee and the Master
Servicer, on the Closing Date with respect to the Initial Mortgage Loans and on
each Subsequent Sale Date with respect to the related Subsequent Mortgage Loans,
an Initial Certification certifying that, except as specifically noted on a
schedule of exceptions thereto and subject to its review as herein provided, it
is in possession of a Trustee Mortgage Loan File for each such Mortgage Loan
that includes each of the documents required to be included therein. Before
delivering the Initial Certification, the Custodian shall have examined each
Trustee Mortgage Loan File to confirm that (except as specifically noted on a
schedule of exceptions thereto):
(i) except for the endorsement required pursuant to clause (a) of
the definition of Trustee Mortgage Loan File, the Mortgage Note, on the
face or the reverse side thereof, does not contain evidence of any
unsatisfied claims, liens, security interests, encumbrances or
restrictions on transfer;
(ii) the Mortgage Note bears an endorsement (which appears to be
an original) as required pursuant to clause (a) of the definition of
Trustee Mortgage Loan File;
(iii) all documents required to be contained in the
Trustee Mortgage Loan File are in its possession or in the possession
of a Custodian on its behalf;
(iv) such documents have been reviewed by it, or by a Custodian
on its behalf, and appear regular on their face and relate to such
Mortgage Loan; and
(v) based on its examination, or the examination by a Custodian
on its behalf, and only as to the foregoing documents, the information
set forth on the Mortgage Loan Schedule accurately reflects the
information set forth in the Trustee Mortgage Loan File.
17
<PAGE>
It is understood that, before delivering the Initial Certification, the
Custodian shall examine the Mortgage Loan Documents to confirm that:
(A) each Mortgage Note and Security Instrument bears a signature
or signatures that appear to be original and that purport to be that of the
Person or Persons named as the maker and mortgagor/trustor or, if photocopies
are permitted under the definition of Trustee Mortgage Loan File, that such
copies bear a reproduction of such signature or signatures;
(B) except for the endorsement required pursuant to clause (a) of
the definition of Trustee Mortgage Loan File, neither the Security Instrument
nor any assignment, on the face or the reverse side thereof, contains evidence
of any unsatisfied claims, liens, security interests, encumbrances or
restrictions on transfer;
(C) the principal amount of the indebtedness secured by the
Security Instrument is identical to the original principal amount of the
Mortgage Note;
(D) the assignment of the Security Instrument from the Seller is
in the form required pursuant to clause (c) of the definition of Trustee
Mortgage Loan File and bears a signature or signatures that appear to be
original and that purport to be that of the Seller and any other necessary party
or, if photocopies are permitted under the definition of Trustee Mortgage Loan
File, that such copies bear a reproduction of such signature or signatures;
(E) if intervening assignments are to be included in the Trustee
Mortgage Loan File, each such intervening assignment bears a signature or
signatures that appear to be original and that purport to be that of the
Mortgagee and/or the assignee (and any other necessary party) or, if photocopies
are permitted under the definition of Trustee Mortgage Loan File, that such
copies bear a reproduction of such signature or signatures;
(F) if either a Title Insurance Policy, a Certificate of Title
Insurance or a written commitment to issue a Title Insurance Policy is
delivered, the address of the real property set forth in such policy, report or
written commitment is substantially identical to the address of the real
property contained in the Security Instrument; and
(G) if a Title Insurance Policy or Certificate of Title Insurance
is delivered with respect to a Mortgage Loan, such policy or certificate: (i) is
for an amount not less than the original principal amount of the related
Mortgage Note and (ii) insures (x) in the case of a Senior Mortgage Loan, that
the Security Instrument constitutes a valid first lien, senior in priority to
all other related deeds of trust, mortgages, deeds to secure debt, financing
statements and security agreements and to any related mechanic's liens, judgment
liens or writs of attachment and (y) in the case of a Junior Mortgage Loan, that
the Security Instrument constitutes a valid second or more junior lien, senior
in priority to any related mechanic's liens, judgment liens or writs of
attachment but subordinate in priority to certain related deeds of trust,
mortgages, deeds to secure debt, financing statements and security agreements
with respect to the related Collateral of higher priority (or, if a written
commitment to issue a Title Insurance Policy is delivered with respect to a
Mortgage Loan, such written commitment obligates the insurer to issue such
policy for an amount not less than the original principal amount of the related
Mortgage Note).
(c) Prior to the first anniversary of the Closing Date, the Custodian
shall deliver to Saxon and the Master Servicer a Final Certification evidencing
the completeness of the Trustee Mortgage Loan File for each Mortgage Loan, with
any applicable exceptions noted on such certification.
(d) In delivering each of the certifications required above, the
Custodian shall be under no duty or obligation (i) to inspect, review or examine
any such documents, instruments, securities or other papers to determine that
they or the signatures thereon are genuine, enforceable, or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face or that any document that
appears to be an original is in fact an original or (ii) to determine whether
any Trustee Mortgage Loan File should include any power of attorney, surety or
guaranty agreement, note assumption rider, buydown agreement, assumption
agreement, modification agreement, written assurance or substitution agreement.
(e) On or before the fifth Business Day of each third month, commencing
the fourth month following the month in which the Closing Date occurs, the
Custodian shall deliver to the Seller a Recordation Report, dated as of the
first day of such month, identifying those Mortgage Loans for which it has not
yet received (i) an original recorded Security Instrument or a copy thereof
certified to be true and correct by the public recording office in possession of
such Security Instrument, (ii) an original recorded assignment of the Security
Instrument to the related Servicer, the Trustee
18
<PAGE>
or the Custodian, as applicable, and any required intervening assignments or
copies thereof, in each case, certified to be a true and correct copy by the
public recording office in possession of such assignment, or (iii) if an
assignment of the Security Instrument to the related Servicer has been recorded
or sent for recordation, an original assignment of the Security Instrument from
such Servicer in blank or to the Trustee or the Custodian in recordable form.
(f) The Trustee may, in accordance with Section 8.11 hereof, appoint one
or more Custodians to hold the Trustee Mortgage Loan Files on its behalf and to
review the Trustee Mortgage Loan Files as provided in this Section 2.02. Saxon
shall, upon notice of the appointment of a Custodian, deliver or cause to be
delivered all documents to such Custodian that would otherwise be delivered to
the Trustee. In such event, the Trustee shall obtain from each such Custodian
will deliver, within the specified times, the Initial Certifications, Final
Certifications, and Recordation Reports with respect to the Mortgage Loans held
and reviewed by such Custodian to Saxon and the Master Servicer in satisfaction
of the Trustee's obligation to prepare such certifications and reports. The
Trustee shall notify the Custodian of any notices delivered to the Trustee with
respect to the Trustee Mortgage Loan Files held by the Custodian.
Section 2.03. Purchase or Substitution of Mortgage Loans by a Seller, a
Servicer or Saxon
(a) Seller Breach. Upon discovery or notice of any defective document in
a Trustee Mortgage Loan File or of any breach by a Seller of any of its
representations, warranties or covenants under a Sales Agreement, which defect
or breach materially and adversely affects the value of any Mortgage Loan or the
interest of the Trust therein (it being understood that any such defect or
breach shall be deemed to have materially and adversely affected the value of
such Mortgage Loan or the interest of the Trust therein if the Trust incurs a
loss as a result of such defect or breach), the Custodian or the Trustee shall
promptly notify the Master Servicer of such defect or breach and direct the
Master Servicer to request that the Seller of such Mortgage Loan cure such
defect or breach and, if such Seller does not cure such defect or breach in all
material respects within 60 days from the date on which it is notified of such
defect or breach, to enforce such Seller's obligation under the Sales Agreement
to purchase such Mortgage Loan from the Trustee. In lieu of purchasing any such
Mortgage Loan as provided above, if so provided in the Sales Agreement, the
Seller may cause such Mortgage Loan to be removed from the Trust (in which case
it shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(h) hereof. Notwithstanding the foregoing, if such defect or
breach is or results in a Qualification Defect, such cure, purchase or
substitution must take place within 75 days of the Defect Discovery Date. It is
understood and agreed that enforcement of the obligation of the Seller to cure,
purchase or substitute for any Mortgage Loan as to which a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such defect or breach
available to the Trustee on behalf of the Certificateholders; provided, however,
that such provision shall not limit the indemnification provisions of Section
8.05 hereof or of any Sales Agreement.
(b) Servicer Breach. In addition to taking any action required pursuant
to Section 7.01, upon discovery or notice of any breach by a Servicer of any
representation, warranty or covenant under the Servicing Agreement which
materially and adversely affects the value of any Mortgage Loan or the interest
of the Trust therein (it being understood that any such breach shall be deemed
to have materially and adversely affected the value of such Mortgage Loan or the
interest of the Trust therein if the Trust incurs a loss as a result of such
breach), the Trustee shall promptly notify the Master Servicer of such breach
and direct the Master Servicer to request that the Servicer of such Mortgage
Loan cure such breach and, if such Servicer does not cure such breach in all
material respects within 60 days from the date on which it is notified of such
breach, to enforce the obligation of such Servicer under the Servicing Agreement
to purchase such Mortgage Loan from the Trustee. Notwithstanding the foregoing,
if such breach results in a Qualification Defect, such cure or purchase must
take place within 75 days of the Defect Discovery Date.
If a Seller has breached a representation or warranty under a Sales
Agreement that is substantially identical to a representation or warranty
breached by a Servicer, the Master Servicer shall first proceed against such
Seller. If such Seller does not, within 60 days after notification of the
breach, take steps to cure such breach or purchase or substitute for the
Mortgage Loan, the Master Servicer shall enforce the obligation of such Servicer
under the Servicing Agreement to cure such breach or purchase the Mortgage Loan
from the Trust as provided in this Section 2.03(b).
Except as specifically set forth herein, the Trustee shall have no
responsibility to enforce any provision of the Sales Agreement or Servicing
Agreements assigned to it hereunder, to oversee compliance therewith, or to take
notice of
19
<PAGE>
any breach or default thereunder. No successor servicer shall have any
obligation to repurchase a Mortgage Loan except to the extent specifically set
forth in the Servicing Agreement signed by such successor servicer.
(c) Saxon Breach. Within 90 days of the earlier of discovery or receipt
of notice by Saxon of the breach of any of its representations or warranties set
forth in Section 2.04 hereof with respect to any Mortgage Loan, which breach
materially and adversely affects the value of such Mortgage Loan or the interest
of the Trust therein (it being understood that any such breach shall be deemed
to have materially and adversely affected the value of such Mortgage Loan or the
interest of the Trust therein if the Trust incurs a loss as a result of such
breach), Saxon shall (i) cure such breach in all material respects, (ii)
purchase such Mortgage Loan from the Trustee, or (iii) remove such Mortgage Loan
from the Trust (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(h) hereof. Notwithstanding
the foregoing, if such breach results in a Qualification Defect, such cure,
purchase or substitution must take place within 75 days of the Defect Discovery
Date.
(d) Assignment Failure. If an Assignment of a Security Instrument to the
related Servicer, the Trustee, or the Custodian, as applicable, as required
pursuant to the definition of Trustee Mortgage Loan File has not been recorded
within one year of the Closing Date, the Master Servicer shall enforce the
related Servicer's obligation set forth in the related Servicing Agreement
either to (i) purchase the related Mortgage Loan from the Trustee on behalf of
the Certificateholders or (ii) if there have been no defaults in the Monthly
Payments on such Mortgage Loan, deposit an amount equal to the Purchase Price of
such Mortgage Loan into an escrow account maintained by the Paying Agent (which
account shall not be an asset of the Trust or any REMIC) as required by the
related Servicing Agreement. Any such amounts deposited to an escrow account,
plus any earnings thereon, shall (i) be released to the related Servicer upon
receipt by the Trustee of satisfactory evidence that an Assignment has been
recorded in the name of such Servicer, the Trustee, or the Custodian, as
applicable, as required pursuant to the definition of Trustee Mortgage Loan File
(and, if the Assignment has been recorded in the name of the Servicer,
satisfactory evidence that an original Assignment from such Servicer in blank or
to the Trustee or the Custodian in recordable form has been deposited into the
Trustee Mortgage Loan File) or (ii) be applied to purchase the related Mortgage
Loan if the Master Servicer notifies the Trustee that there has been a default
thereon. Any amounts in the escrow account may be invested in Permitted
Investments at the written direction of the Master Servicer.
(e) Converted Mortgage Loans. Upon receipt of written notice from the
Servicer of the conversion of any ARM Loan to a Converted Mortgage Loan, the
Master Servicer shall enforce the Servicer's obligation, if any, set forth in
the Servicing Agreement or the Seller's obligation, if any, set forth in the
Sales Agreement to purchase such Converted Mortgage Loan from the Trustee. If
the Servicer or the Seller defaults upon its obligation to purchase any
Converted Mortgage Loan, and such default remains unremedied for a period of
five Business Days after written notice of such default shall have been given by
the Master Servicer to the Servicer or the Seller, as applicable, then the
Master Servicer shall use its best efforts to cause such Converted Mortgage Loan
to be sold for settlement on the last day of any month to any Person which the
Master Servicer may in its sole discretion select. The Master Servicer shall not
cause a Converted Mortgage Loan to be sold or otherwise transferred to a Person
other than the Servicer or the Seller (or any other Person who has a preexisting
obligation to purchase such Mortgage Loan) unless (i) upon such sale or other
transfer the Trust would receive a net amount at least equal to the Purchase
Price and (ii) if the Purchase Price exceeds the Basis Limit Amount, the Master
Servicer receives an Opinion of Counsel (which Opinion of Counsel will not be an
expense of the Master Servicer or the Trustee) that such sale or other transfer
will not result in the imposition of a "prohibited transaction" tax (as such
term is defined in the Code) on the related REMIC or jeopardize its status as a
REMIC. Any such Converted Mortgage Loan which is not purchased by the Servicer
or the Seller and which the Master Servicer is unable to sell shall remain in
the Trust.
(f) Delinquent Mortgage Loans. Saxon may, but is not obligated to,
purchase any Mortgage Loan that is delinquent in payment by 90 days or more for
a price equal to the greater of the Purchase Price for such Mortgage Loan or the
fair market value thereof at the time of purchase.
(g) Purchase Price. Unless otherwise provided in the Trust Agreement,
the purchase of any Mortgage Loan from the Trust pursuant to this Section 2.03
shall be effected for the related Purchase Price. If the Purchaser is a
Servicer, the Purchase Price shall be deposited into its Servicer Custodial
Account. If the Purchaser is other than the Servicer, the Purchase Price shall
be deposited into the Master Servicer Custodial Account. Within five Business
Days of its receipt of such funds or certification by the Master Servicer that
such funds have been deposited in the appropriate
20
<PAGE>
Servicer Custodial Account or in the Master Servicer Custodial Account, the
Trustee shall release or cause to be released to the Purchaser the related
Trustee Mortgage Loan File and the related Servicer File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, in form as presented by the Purchaser and satisfactory to the Trustee,
as shall be necessary to vest in the Purchaser title to any Mortgage Loan
released pursuant hereto and the Trustee shall have no further responsibility
with regard to such Trustee Mortgage Loan File or Servicer File. The Master
Servicer shall use its best efforts to cause the Servicer of any Deleted
Mortgage Loan to release to the Purchaser the Servicer File relating thereto.
(h) Substitution. Unless otherwise provided in the Trust Agreement, the
right to substitute a Qualified Substitute Mortgage Loan for any Deleted
Mortgage Loan that is an asset of the Trust shall be limited to (i) in the case
of substitutions pursuant to Section 2.03(a) or 2.03(c) hereof, the one-year
period beginning on the Closing Date and (ii) in the case of any other
substitution, the three-month period beginning on the Closing Date.
As to any Deleted Mortgage Loan for which Saxon or a Seller substitutes
one or more Qualified Substitute Mortgage Loans, Saxon or the Seller, as the
case may be, shall effect such substitution by delivering to the Custodian for
each such Qualified Substitute Mortgage Loan the related Mortgage Note, the
related Security Instrument, the related Assignment(s), and such other documents
and agreements, with all necessary endorsements thereon, as are required to be
included in the Trustee Mortgage Loan File pursuant to Sections 1.01 and 2.01
hereof, together with a certificate of an Officer of Saxon to the effect that
each such Qualified Substitute Mortgage Loan complies with the terms of the
Trust Agreement and notify the Master Servicer and the Trustee in writing of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution are not part of the Trust and will
be retained by Saxon or the Seller, as the case may be. For the month of
substitution, distributions to Certificateholders will reflect the Monthly
Payment due on such Deleted Mortgage Loan on or before the first day of the
month in which the substitution occurs, and Saxon or the Seller, as the case may
be, shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. The Master Servicer shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of the Trust Agreement and the substitution of each such Qualified
Substitute Mortgage Loan. Each Qualified Substitute Mortgage Loan shall be
subject, as of the date of its substitution, to the terms of the Trust Agreement
in all respects (including the representations and warranties of Saxon with
respect to the Mortgage Loans set forth in the Trust Agreement). In addition, in
the case of any substitution effected by a Seller, each Qualified Substitute
Mortgage Loan shall be subject, as of the date of its substitution, to the terms
of the related Sales Agreement (including the representations and warranties of
the Seller with respect to the Mortgage Loans set forth in the Sales Agreement).
The Trustee shall, within five Business Days of its receipt of the documents
referred to above, effect the conveyance of such Deleted Mortgage Loan to Saxon
or the Seller, as the case may be, in accordance with the procedures specified
above.
For any month in which Saxon or a Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Master Servicer shall determine and notify the Trustee in writing of the amount,
if any, by which the aggregate Unpaid Principal Balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans (after
application of Monthly Payments due in the month of substitution) (the
"Substitution Shortfall"). On the date of such substitution, Saxon or the
Seller, as the case may be, shall deliver or cause to be delivered to the Paying
Agent, for deposit into the Asset Proceeds Account, an amount equal to the
Substitution Shortfall.
(i) Determination of Purchase Price. The Master Servicer shall be
responsible for determining the Purchase Price of any Mortgage Loan for purposes
of this Section 2.03 and, where appropriate, the Basis Limit Amount for any
Converted Mortgage Loan that is sold by the Trust, and shall at the time of any
purchase or escrow of funds pursuant to this Section 2.03 certify such amounts
to the Trustee. If the Master Servicer shall certify to the Trustee in writing
that there is a miscalculation of the amount to be paid to the Trust, the
Trustee shall, from moneys in the Asset Proceeds Account, return any overpayment
that the Trust received as a result of such miscalculation to the applicable
Purchaser upon the discovery of such overpayment, and the Master Servicer shall
collect from the applicable Purchaser for payment to the Trustee any
underpayment that resulted from such miscalculation upon the discovery of such
underpayment. Recovery may be made either directly or by set-off of all or any
part of such underpayment against amounts owed by the Trust to such Purchaser.
(j) Qualification Defect. If (i) any Person required to cure, purchase
or substitute for a Mortgage Loan affected by a Qualification Defect under the
terms of the Trust Agreement or a separate agreement fails to perform
21
<PAGE>
within the earlier of (A) 75 days of the Defect Discovery Date or (B) the time
limit set forth in the Trust Agreement or such separate agreement or (ii) no
Person is obligated to cure, purchase or substitute for a Mortgage Loan affected
by a Qualification Defect, the Trustee shall dispose of such Mortgage Loan in
such manner and for such price as the Master Servicer notifies the Trustee in
writing are appropriate, provided that the removal of such Mortgage Loan occurs
on or before the 90th day from the Defect Discovery Date. It is the express
intent of the parties that a Mortgage Loan affected by a Qualification Defect be
removed from the Trust before the 90th day from the Defect Discovery Date so
that the related REMIC(s) will continue to qualify as a REMIC(s). Accordingly,
the Trustee is not required to sell an affected Mortgage Loan for its fair
market value nor shall the Trustee be required to make up any shortfall
resulting from the sale of such Mortgage Loan. The Person failing to cure,
purchase, or substitute for a Mortgage Loan as required under the terms of the
Trust Agreement shall be liable to the Trust for (i) any difference between (A)
the Unpaid Principal Balance of the Mortgage Loan plus accrued and unpaid
interest thereon at the related Mortgage Interest Rate to the date of
disposition and (B) the net amount received by the Trustee from the disposition
(after the payment of related expenses), (ii) interest on such difference at the
related Mortgage Interest Rate from the date of disposition to the date of
payment and (iii) any legal and other expenses incurred by or on behalf of the
Trust in seeking such payments. The Master Servicer shall pursue the legal
remedies of the Trust relating to this Section 2.03(j) on the Trust's behalf,
and the Trust shall reimburse the Master Servicer for any legal or other
expenses of the Master Servicer related to such pursuit not recovered from the
Person that failed to cure, purchase, or substitute for a Mortgage Loan as
required under the terms of the Trust Agreement.
(k) Any Person required under this Section 2.03 to give notice or to
make a request of another Person to give notice shall give such notice or make
such request promptly.
Section 2.04. Representations and Warranties of Saxon
Saxon hereby represents and warrants to the Trustee and the Master
Servicer that as of the Closing Date or as of such other date specifically
provided herein:
(a) Saxon has been duly incorporated and is validly existing as a
corporation and in good standing under the laws of the Commonwealth of
Virginia with full power and authority (corporate and other) to own its
properties and conduct its business as now conducted by it and to enter
into and perform its obligations under the Trust Agreement, and has duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases any material properties, except
where the failure so to qualify would not have a material adverse effect
on Saxon;
(b) The Trust Agreement, assuming due authorization, execution
and delivery by the Trustee and the Master Servicer, constitutes a
legal, valid and binding agreement of Saxon, enforceable against Saxon
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law;
(c) Neither the execution and delivery by Saxon of the Trust
Agreement, nor the consummation by Saxon of the transactions therein
contemplated, nor compliance by Saxon with the provisions thereof, will
(i) conflict with or result in a breach of, or constitute a default
under, any of the provisions of the articles of incorporation or by-laws
of Saxon or any law, governmental rule or regulation or any judgment,
decree or order binding on Saxon or any of its properties, or any of the
provisions of any indenture, mortgage, deed of trust, contract or other
instrument to which Saxon is a party or by which it is bound or (ii)
result in the creation or imposition of any lien, charge, or encumbrance
upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument;
(d) There are no actions, suits or proceedings against, or
investigations of, Saxon pending, or, to the knowledge of Saxon,
threatened, before any court, administrative agency or other tribunal
(i) asserting the invalidity of the Trust Agreement or (ii) seeking to
prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by the Trust Agreement;
(e) As of the Closing Date with respect to each Initial Mortgage
Loan and as of each Subsequent Sale Date with respect to each related
Subsequent Mortgage Loan:
22
<PAGE>
(i) The information set forth in the related Mortgage
Loan Schedule with respect to such Mortgage Loan is true and
correct in all material respects at the date or dates with
respect to which such information is furnished;
(ii) Saxon either is (i) the owner of such Mortgage Loan
or (ii) the holder of a first, second, or more junior (as
applicable) priority perfected security interest in the
Collateral securing such Mortgage Loan subject, in the case of
any Junior Mortgage Loan, to any lien on the related Collateral
that is senior in priority to the lien represented by such loan,
and subject, in the case of any Mortgage Loan, to any exceptions
of title set forth in the title insurance policy with respect to
such loan that are generally acceptable to home equity mortgage
lending institutions and such other exceptions to which similar
properties commonly are subject, provided such exceptions do not
individually, or in the aggregate, materially and adversely
affect the benefits of the security intended to be provided by
the related Collateral;
(iii) Saxon has acquired its ownership of, or security
interest in, such Mortgage Loan in good faith without notice of
any adverse claim;
(iv) Saxon has not assigned any interest or participation
in such Mortgage Loan (or, if any such interest or participation
has been assigned, it has been released); and
(e) Saxon has full right to sell the Trust Estate to the
Trustee.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the respective Trustee
Mortgage Loan Files to the Trustee and shall inure to the benefit of the Trustee
notwithstanding any restrictive or qualified endorsement or assignment. Upon the
discovery by Saxon, the Master Servicer or the Trustee of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interest of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the other parties to the
Trust Agreement. It is understood and agreed that the obligations of Saxon set
forth in Section 2.03(c) to cure, repurchase or substitute for a Mortgage Loan
constitute the sole remedies available to the Certificateholders or to the
Trustee on their behalf respecting a breach of the representations and
warranties contained in this Section 2.04. It is further understood and agreed
that Saxon shall be deemed not to have made the representations and warranties
in this Section 2.04 with respect to, and to the extent of, representations and
warranties made, as to the matters covered in this Section 2.04, by any Servicer
in the related Servicing Agreement assigned to the Trustee or any Seller in the
related Sales Agreement assigned to the Trustee.
Section 2.05. Representations and Warranties of the Master Servicer
The Master Servicer hereby represents and warrants to the Trustee that
as of the Closing Date or as of such other date specifically provided herein:
(a) The Master Servicer has been duly incorporated and is validly
existing as a bank or a corporation and in good standing under the laws
of the jurisdiction of its incorporation with full power and authority
(corporate and other) to own its properties and conduct its business as
now conducted by it and to enter into and perform its obligations under
the Trust Agreement, and has duly qualified to do business and is in
good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases any material properties or
conducts any material business or in which the performance of its duties
under the Trust Agreement would require such qualification, except where
the failure so to qualify would not have a material adverse effect on
the performance of its obligations under the Trust Agreement;
(b) The Trust Agreement, assuming due authorization, execution
and delivery by Saxon and the Trustee, constitutes a legal, valid and
binding agreement of the Master Servicer, enforceable against the Master
Servicer in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, conservatorship, receivership, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law;
(c) Neither the execution and delivery by the Master Servicer of
the Trust Agreement, nor the consummation by the Master Servicer of the
transactions therein contemplated, nor compliance by the Master
23
<PAGE>
Servicer with the provisions thereof, will (i) conflict with or result
in a breach of, or constitute a default under, any of the provisions of
the articles of association or incorporation (or corresponding charter
document) or by-laws of the Master Servicer or any law, governmental
rule or regulation or any judgment, decree or order binding on the
Master Servicer or any of its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to
which the Master Servicer is a party or by which it is bound or (ii)
result in the creation or imposition of any lien, charge or encumbrance
upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument.
(d) There are no actions, suits or proceedings against, or
investigations of, the Master Servicer pending, or, to the knowledge of
the Master Servicer, threatened, before any court, administrative agency
or other tribunal which would prohibit the Master Servicer from entering
into the Trust Agreement or performing its obligations under the Trust
Agreement; and
(e) If the Master Servicer is not a national banking association,
the Master Servicer maintains a Master Servicer Errors and Omissions
Policy and a Master Servicer Fidelity Bond which cover the Master
Servicer's performance under the Trust Agreement, and such policy and
bond are in full force and effect.
Upon the discovery by Saxon, the Master Servicer or the Trustee of a
breach of any of the foregoing representations or warranties which materially
and adversely affects the interest of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt written notice (but in
no event later than two Business Days following such discovery) to the other
parties to the Trust Agreement.
ARTICLE III
ADMINISTRATION OF THE TRUST
Section 3.01. Master Servicer Custodial Account
(a) Establishment. The Master Servicer shall establish a Master Servicer
Custodial Account into which the Master Servicer shall deposit payments,
collections and Advances with respect to the Mortgage Loans until such amounts
are transferred to the Asset Proceeds Account as provided herein. The Master
Servicer may elect to use a single Master Servicer Custodial Account for more
than one Series of Certificates (and for more than one group of Mortgage Loans
if the Mortgage Loans for a Series of Certificates are to be held in separate
groups), but shall maintain separate accounting records for each Series of
Certificates (and for each group of Mortgage Loans with respect to a Series of
Certificates). Each Master Servicer Custodial Account shall be an Eligible
Account and shall reflect the custodial nature of the account and that all funds
in such account (except interest earned thereon) are held in trust for the
benefit of the Trustee. Unless otherwise provided in the Trust Agreement, the
owner of the Master Servicer Custodial Account shall be the Master Servicer. To
the extent provided in the REMIC Provisions or proposed temporary or final
regulations, any amounts transferred by a REMIC to the Master Servicer Custodial
Account shall be treated as amounts distributed by such REMIC to the Master
Servicer. The Master Servicer Custodial Account shall not be considered an asset
of the Trust or any REMIC. The Master Servicer shall notify the Trustee of the
location and account number of such Master Servicer Custodial Account and of any
changes in the location or account number of such account.
(b) Deposits. On each Remittance Date, the Servicer shall withdraw from
the Servicer Custodial Account maintained by each Servicer and deposit into the
Master Servicer Custodial Account an amount with respect to each Mortgage Loan
serviced by such Servicer equal to the sum of the following:
(i) all Monthly Payments received by such Servicer during the
preceding Due Period, whether paid by the Borrower or advanced by such
Servicer, minus the Servicing Fee due such Servicer to the extent paid
by the Borrower after the payment of Month-End Interest;
(ii) all Monthly Payments made by the Borrower after their Due
Date that were not paid or advanced pursuant to Section 3.01(b)(i)
hereof;
(iii) all other payments (other than late charges, conversion
fees and similar charges and fees retained by such Servicer pursuant to
the Servicing Agreement) received by such Servicer in connection with
any unscheduled principal payments or recoveries on such Mortgage Loan
during the preceding Prepayment Period, including Liquidation Proceeds
and Insurance Proceeds, together with any interest thereon paid by or
for the
24
<PAGE>
account of the Borrower minus the sum of (A) expenses associated with
such recovery, (B) any Advances on such Mortgage Loan paid by such
Servicer and (C) the Servicing Fee allocable thereto; and
(iv) the Purchase Price of such Mortgage Loan if such Mortgage
Loan was purchased by the Servicer from the Trust during the preceding
Prepayment Period.
(c) Withdrawals. On each Business Day, the Master Servicer may withdraw
from the appropriate Master Servicer Custodial Account (to the extent the funds
therein are not invested) any Non-Recoverable Advance and any Advance previously
made with respect to a Mortgage Loan as to which a late payment, Liquidation
Proceeds or Insurance Proceeds have been received (but only to the extent of
such late payment, Liquidation Proceeds or Insurance Proceeds).
On or prior to each Master Servicer Remittance Date, the Master Servicer
shall remit from the funds in the Master Servicer Custodial Account by wire
transfer (or as otherwise instructed by the Trustee) in immediately available
funds to the Asset Proceeds Account an amount with respect to each Mortgage Loan
equal to the sum of the following:
(i) all Monthly Payments received by the Master Servicer during
the preceding Due Period, whether paid by the Borrower or advanced by a
Servicer, the Master Servicer, the Trustee or an Insurer, minus the sum
of (A) the Servicing Fees due the Servicer to the extent paid by the
Borrower (net of any payments on account of Month End Interest required
pursuant to Section 3.05 hereof or the Servicing Agreement) and (B) the
Master Servicing Fee to the extent paid by the Borrower or advanced by
the Servicer or the Master Servicer;
(ii) all Monthly Payments made by a Borrower after their Due Date
that were not paid or advanced pursuant to Section 3.01(c)(i) hereof,
net of the Master Servicing Fee;
(iii) all other payments received by the Master Servicer in
connection with any unscheduled principal payments or recoveries on the
Mortgage Loans during the preceding Prepayment Period, including
Liquidation Proceeds and Insurance Proceeds, together, with respect to
prepayments or Liquidation Proceeds or Insurance Proceeds received
during the preceding month, with any interest thereon received by the
Master Servicer (net of the Master Servicing Fee attributable thereto);
and
(iv) the Purchase Price of any Mortgage Loans purchased from the
Trust during the preceding Prepayment Period, less any amounts due the
Servicer or the Master Servicer on account of Advances, the Servicing
Fee or the Master Servicing Fee attributable to such Mortgage Loans.
(d) Investment. The Master Servicer shall cause the funds in the Master
Servicer Custodial Account to be invested in Permitted Investments with a
maturity prior to the next Master Servicer Remittance Date. If so specified in a
Servicing Agreement, net investment income on the funds in the Master Servicer
Custodial Account shall be released to the related Servicer as a part of the
Servicer Compensation on or before the fifth Business Day of the month following
the month in which the related Distribution Date occurs unless the Trust
Agreement provides that such net investment income is to be applied to Month End
Interest Shortfall; provided, however, that, if there is a loss on the
investments in the Master Servicer Custodial Account for any month, the Master
Servicer shall deposit the amount of such loss into the Master Servicer
Custodial Account on or before the related Distribution Date (and shall
subsequently retain net investment income to recover such loss).
Section 3.02. Asset Proceeds Account
(a) Deposits. The Trustee shall establish and maintain with the Paying
Agent one or more accounts (collectively, the "Asset Proceeds Account") held in
trust for the benefit of the Certificateholders. Each Asset Proceeds Account
shall be an Eligible Account. On each Distribution Date, the Paying Agent shall
deposit into the Asset Proceeds Account the following amounts, to the extent not
previously deposited therein:
(i) the amount to be deposited from the Master Servicer
Custodial Account pursuant to Section 3.01(c);
(ii) Advances;
(iii) the amount required to effect a Terminating Purchase
pursuant to Section 9.02 hereof; and
25
<PAGE>
(iv) amounts required to be deposited from any Credit
Enhancement, Reserve Fund, Interest Fund, or other fund as provided in
the Trust Agreement.
(b) Withdrawals. Unless otherwise provided in the Trust Agreement, on
each Distribution Date, the Paying Agent shall withdraw all moneys in the Asset
Proceeds Account in accordance with the amounts set forth in the statement
furnished by the Master Servicer pursuant to Section 4.01 hereof in the
following order of priority and for the purposes indicated:
(i) to pay itself the Trustee Fee with respect to such
Distribution Date (unless the Trustee Fee is to be paid by the Master
Servicer out of its Master Servicing Fee);
(ii) to pay each Servicer its Servicing Fee with respect to such
Distribution Date, to the extent not retained by such Servicer;
(iii) to pay the Master Servicer the Master Servicing Fee with
respect to such Distribution Date, to the extent not previously paid to
the Master Servicer;
(iv) to pay each Credit Enhancement provider its Credit
Enhancement Fee with respect to such Distribution Date unless provision
therefore is otherwise made in the Trust Agreement;
(v) to reimburse the Trustee, the Master Servicer and each
Servicer, in that order of priority, for any Advance previously made
that has been determined to be a Non-Recoverable Advance;
(vi) to reimburse Saxon or the Master Servicer for expenses
incurred by or reimbursable to it pursuant to Section 6.03;
(vii) to refund any overpayment of the Purchase Price of a Mortgage
Loan; and
(viii) to make the payments provided for in the Trust Agreement.
(c) Accounting. The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any payment to and from the Asset Proceeds Account.
(d) Investment. No later than the close of business on the day preceding
the Master Servicer Remittance Date, the Master Servicer shall direct the Paying
Agent in writing (which may be in the form of standing instructions) as to the
investment of funds (which funds, if received by noon, Houston time, shall be
invested in Permitted Investments) in the Asset Proceeds Account for the period
from the Master Servicer Remittance Date through the Distribution Date. Net
investment income on funds in the Asset Proceeds Account shall be released to
the Master Servicer as part of the Master Servicer Compensation on or before the
fifth Business Day of the month following the month in which the related
Distribution Date occurs, unless the Trust Agreement provides that such net
investment income is to be applied to the payment of other amounts due from the
Master Servicer.
Section 3.03. Issuing REMIC Accounts
(a) With respect to any Double REMIC Series, the Paying Agent shall
establish one or more Subaccounts of the Distribution Account. Unless otherwise
provided in the Trust Agreement, the Subaccounts will be Regular Interests in
the Pooling REMIC and the Paying Agent shall deposit all payments with respect
to such Regular Interests into such Subaccounts.
(b) With respect to any Double REMIC Series, the Paying Agent may
establish one or more accounts into which the Paying Agent may deposit all
payments on account of the Residual Interest in the Pooling REMIC and any
Regular Interests in the Pooling REMIC that are not considered assets of the
Issuing REMIC and from which the Paying Agent may withdraw funds to pay the
Certificates that do not evidence interests in the Issuing REMIC. In lieu of
establishing such accounts, the Paying Agent may pay on each Distribution Date
to the Holders of the Certificates that do not evidence interests in the Issuing
REMIC the amounts that are due with respect to such Certificates. In addition,
with respect to a Double REMIC Series, upon payment in full of all related
Regular Interests and all administrative costs of the related Trust and each
related REMIC, any amount remaining in the Asset Proceeds Account may be
distributed directly to the Holders of the Certificate representing beneficial
ownership of the Residual Interest in the Pooling REMIC.
26
<PAGE>
Section 3.04. Advances by Master Servicer and Trustee
(a) To the extent not made by the Servicer of a Mortgage Loan, the
Master Servicer shall be obligated to make Advances with respect to such
Mortgage Loan to the extent the Master Servicer determines, in good faith, that
such Advances will be recoverable from Insurance Proceeds, Liquidation Proceeds
or subsequent payments by the Borrower of such Mortgage Loan. If the Master
Servicer determines that all, or a portion of, any Advance required by this
Section 3.04 is not so recoverable, the Master Servicer shall promptly deliver
to the Trustee an Officer's certificate setting forth the reasons for such
determination and the amount of the Non-Recoverable Advance (a
"Non-Recoverability Certificate"). Subject to the foregoing:
(i) Prior to the close of business on the Business Day prior to
each Master Servicer Remittance Date, the Master Servicer shall
determine whether and to what extent any Servicers have failed to make
any Advances in respect of Monthly Payments that were due on the
previous Due Date. The Master Servicer shall make an Advance to the
Master Servicer Custodial Account in the amount, if any, of the
aggregate Monthly Payments (less applicable Servicing Fees) on the
Mortgage Loans that were due on such Due Date but which were not
received or advanced by the Servicers and remitted to the Master
Servicer Custodial Account prior to such Master Servicer Remittance
Date. Each such Advance shall be remitted in immediately available funds
to the Master Servicer Custodial Account on or before such Master
Servicer Remittance Date.
(ii) To the extent not made by a Servicer, the Master Servicer
shall make Advances from time to time for attorneys' fees and court
costs incurred, or which reasonably can be expected to be incurred, for
the foreclosure of any Mortgage Loan or for any transaction in which the
Trustee is expected to receive a deed in lieu of foreclosure.
(iii) If any Mortgaged Premises shall be damaged or destroyed and
the Servicer of the related Mortgage Loan fails to Advance the funds
necessary to repair or restore the damaged or destroyed Mortgaged
Premises, then the Master Servicer shall Advance such funds and take
such other action as is necessary to repair or restore the damage or
loss.
(iv) To the extent a Servicer is required to Advance funds
sufficient to pay the taxes or insurance premiums with respect to a
Mortgage Loan pursuant to Section 380 of the Guide and fails to make
such Advance, the Master Servicer shall Advance such funds and take such
steps as are necessary to pay such taxes or insurance premiums.
(v) If any Servicer fails to remit to the Master Servicer
Custodial Account, on or before the Master Servicer Remittance Date, the
full amount of the funds in the custody or under the control of the
Servicer that the Servicer is required to remit under its Servicing
Agreement, then the Master Servicer shall Advance and remit to the
Master Servicer Custodial Account an amount equal to the required
remittance on or before the Master Servicer Remittance Date for the
month in which such funds were required to be remitted by the Servicer
under the Servicing Agreement.
(b) Any Advance made by the Master Servicer under this Section 3.04
which the Master Servicer shall ultimately determine in its good faith judgment
to be non-recoverable from Insurance Proceeds, Liquidation Proceeds, the related
Servicer, or subsequent payments by the Borrower shall be a Non-Recoverable
Advance. The determination by the Master Servicer that it has made a
Non-Recoverable Advance shall be evidenced by a Non-Recoverability Certificate
of the Master Servicer promptly delivered to the Trustee setting forth the
reasons for such determination. Following the Trustee's receipt of such
Non-Recoverability Certificate, the Master Servicer shall be entitled to
reimbursement for such Non-Recoverable Advance as provided herein.
(c) If the Master Servicer fails to make any Advance required of it
hereunder, the Trustee shall, to the maximum extent permitted by law, make such
Advance in its stead, and, in such event, the Trustee shall be entitled to
receive the Master Servicing Fee payable with respect to the Distribution Date
related to such Master Servicer Remittance Date; provided, however, that in no
event shall the Trustee, whether as Trustee, Master Servicer or Servicer, be
deemed to have assumed the obligations of any Person to purchase any Mortgage
Loan from the Trust for breach of representations or warranties or as a
Converted Mortgage Loan or otherwise or to make any Advances or pay Month End
Interest with respect to any Mortgage Loan except to the extent specifically
provided in Sections 3.04 and 3.05 hereof. Notwithstanding the foregoing,
neither the Master Servicer nor the Trustee will be obligated to make an Advance
that it reasonably believes to be a Non-Recoverable Advance. The Trustee may
conclusively rely for any
27
<PAGE>
determination to be made by it hereunder upon the determination of the Master
Servicer as set forth in its Non-Recoverability Certificate.
(d) To the extent that any Advance has been made by the Trustee, the
Trustee shall be entitled to reimbursement therefor at the times and to the same
extent as either the Servicer or the Master Servicer would have been so entitled
had such Person originally made such Advance, whether or not any provision of
the Trust Agreement specifically references the right of the Trustee to such
reimbursement. If the Trustee determines that it is prevented by law from making
an Advance, the Trustee will notify the Master Servicer within one Business Day
of such determination.
(e) Notwithstanding anything herein to the contrary, no Advance shall be
required to be made by the Master Servicer or the Trustee to the extent that
making such Advance would result in the amount of aggregate Advances then
outstanding and unreimbursed by the Master Servicer or the Trustee to exceed the
Master Servicer Advance Amount.
Section 3.05. Month End Interest
Unless otherwise provided in the Servicing Agreement, the Servicer shall
pay and deposit into the Servicer Custodial Account, on or before each Servicer
Remittance Date, an amount equal to Month End Interest with respect to the
preceding month, but only to the extent of the Servicer Fee payable with respect
to the preceding month. Such payment will not be considered a Non-Recoverable
Advance. The Servicer shall not be entitled to any recovery or reimbursement of
such payment from the Master Servicer, the Trustee or the Certificateholders.
Section 3.06. Trustee to Cooperate; Release of Mortgage Files
The Trustee shall, if requested by any Servicer with a rating
satisfactory to the Trustee, execute a power of appointment pursuant to which
the Trustee shall authorize, make, constitute and appoint designated officers of
such Servicer with full power to execute in the name of the Trustee (without
recourse, representation or warranty) any deed of reconveyance, any substitution
of trustee documents or any other document to release, satisfy, cancel or
discharge any Security Instrument or Mortgage Loan upon its payment in full or
other liquidation; provided, however, that such power of appointment shall be
limited to the powers listed above. The Servicer shall promptly forward to the
Trustee for its files copies of all documents executed pursuant to such power of
appointment.
Upon the liquidation of any Mortgage Loan, the Servicer of such Mortgage
Loan shall remit the proceeds thereof to its Servicer Custodial Account and,
unless such Servicer has been given a power of appointment as provided in the
proceeding paragraph, deliver to the Master Servicer a Request for Release
requesting that the Trustee execute such instrument of release or satisfaction
as is necessary to release the related Collateral from the lien of the Security
Instrument. Upon the Master Servicer's receipt of such Request for Release and
its confirmation that all amounts required to be remitted to the appropriate
Servicer Custodial Account in connection with such liquidation have been so
deposited, the Master Servicer shall deliver such Request for Release to the
Trustee. The Trustee shall, within five Business Days of its receipt of such
Request for Release, release, or cause the Custodian to release, the related
Trustee Mortgage Loan File to the Master Servicer or the Servicer, as requested
by the Master Servicer. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Master
Servicer Custodial Account or the Asset Proceeds Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, including, but not limited to, collection under any Title
Insurance Policy or Credit Enhancement with respect thereto or to effect a
partial release of any Collateral from the lien of the Security Instrument, the
Servicer shall deliver to the Master Servicer a Request for Release. Upon the
Master Servicer's receipt of any such Request for Release, the Master Servicer
shall promptly forward such Request for Release to the Trustee and the Trustee
shall, within five Business Days of its receipt of such Request for Release,
release, or cause the Custodian to release, the related Trustee Mortgage Loan
File to the Master Servicer or the Servicer, as requested by the Master
Servicer. Any such Request for Release shall obligate the Master Servicer or the
Servicer, as the case may be, to return each and every document previously
requested from the Trustee Mortgage Loan File to the Trustee by the twenty-first
day following the release thereof, unless (i) the related Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to such Mortgage Loan have been
deposited in the Asset Proceeds Account or the Servicer Custodial Account or
(ii) the Trustee Mortgage Loan File or such document has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the related Mortgaged Premises
28
<PAGE>
either judicially or non-judicially, and the Master Servicer has delivered to
the Trustee a certificate of the Master Servicer or the Servicer certifying as
to the name and address of the Person to which such Trustee Mortgage Loan File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of an Officer's certificate of the Master Servicer or the Servicer
stating that such Mortgage Loan was liquidated and that all amounts received or
to be received in connection with such liquidation which are required to be
deposited into the Servicer Custodial Account or the Asset Proceeds Account have
been so deposited, or that such Mortgage Loan is secured by an REO Property, the
Request for Release shall be released by the Trustee to the Master Servicer or
the Servicer, as appropriate.
Upon written certification of the Master Servicer or the Servicer, the
Trustee (subject to Section 8.01(e) hereof), shall execute and deliver to the
Master Servicer or the Servicer, as directed by the Master Servicer, court
pleadings, requests for trustee's sale or other documents necessary to a
foreclosure proceeding or trustee's sale in respect of a Mortgaged Premises or
to any legal action brought to obtain judgment against any Borrower on any
Mortgage Note or Security Instrument or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by any Mortgage Note or Security
Instrument or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings, requests or other documents be
executed by the Trustee and a statement as to the reason such pleadings,
requests or other documents are required and that the execution and delivery
thereof by the Trustee will not invalidate or otherwise affect the lien of the
Security Instrument, except for the termination of such a lien upon completion
of the foreclosure proceeding or trustee's sale.
Section 3.07. Reports to the Trustee; Annual Compliance Statements
The Master Servicer shall deliver to the Trustee, on or before March 31
of each year, an Annual Compliance Statement with respect to the Trust Agreement
(if the Master Servicer entered into the Trust Agreement on or before the
preceding December 31), signed by an Officer of the Master Servicer, certifying
that (i) such Officer has reviewed the activities of the Master Servicer during
the preceding calendar year or portion thereof and its performance under the
Trust Agreement and (ii) to the best of such Officer's knowledge, based on such
review, the Master Servicer has performed and fulfilled its duties,
responsibilities and obligations under the Trust Agreement in all material
respects throughout such year, or, if there has been a default in the
fulfillment of any such duties, responsibilities or obligations, specifying each
such default known to such Officer and the nature and status thereof, and (iii)
(A) an Officer of the Master Servicer has conducted an examination (based solely
on information and written reports furnished by each Servicer to the Master
Servicer) of the activities of each Servicer during the preceding calendar year
and the performance of such Servicer under the related Servicing Agreement, (B)
an Officer of the Master Servicer has examined each Servicer's Fidelity Bond and
Errors and Omissions Policy and each such bond or policy is in effect and
conforms to the requirements of the related Servicing Agreement, (C) the Master
Servicer has received from each Servicer such Servicer's annual audited
financial statements and such other information as is required by the Guide and
(D) to the best of such Officer's knowledge, based on such examination, each
Servicer has performed and fulfilled its duties, responsibilities and
obligations under its Servicing Agreement in all material respects throughout
such year, or, if there has been a default in the performance or fulfillment of
any such duties, responsibilities or obligations, specifying each such default
known to such Officer and the nature and status thereof. The Trustee shall
provide copies of the Annual Compliance Statement to any Certificateholder upon
written request provided such statement is delivered, or caused to be delivered,
by the Master Servicer to the Trustee.
Section 3.08. Title, Management and Disposition of REO Properties
(a) If any Mortgaged Premises becomes an REO Property, the Master
Servicer shall use its best efforts to cause the Servicer of the related
Mortgage Loan to manage, conserve, protect and operate such REO Property for the
benefit of the Certificateholders solely for the purpose of its prompt
disposition and sale. If one or more REMIC elections are made with respect to
the assets of the Trust, the Master Servicer shall use its best efforts to cause
the Servicer to use its best efforts to dispose of any REO Property for its fair
market value within twenty-two months of its acquisition by the Trust, unless
the Trustee has been granted an extension of time to dispose of such REO
Property by the Internal Revenue Service pursuant to section 856(c)(3) of the
Code (an "Extension"). If the Trustee has been granted an Extension, the Master
Servicer shall continue to use its best efforts to have the Servicer sell the
REO Property for its fair market value for the period ending two months prior to
the time such Extension expires (the "Extended Period"). If the Servicer is
unable to dispose of any REO Property within such twenty-two-month period or
Extended Period, as the case may be, the Master Servicer shall use its best
efforts to ensure that such REO Property is auctioned to the highest bidder
within one month after the end of such twenty-two-month period or Extended
Period, as the case may
29
<PAGE>
be. If no REMIC election has been or is to be made with respect to the assets of
the Trust, the time period for disposing of any REO Property as specified in the
preceding two sentences shall be within eleven months of its acquisition by the
Trust. In the event of any such sale or auction of an REO Property, the Trustee
shall, at the written request of the Master Servicer and upon being provided
with appropriate forms therefor, within five Business Days of its receipt of the
proceeds of such sale or auction, release or cause to be released to the
purchaser the related Trustee Mortgage Loan File and Servicer File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be necessary to vest in the purchaser title to the
REO Property, and upon so doing the Trustee shall have no further responsibility
with regard to such Trustee Mortgage Loan File or Servicer File. Neither the
Trustee, the Master Servicer nor the Servicer, acting on behalf of the Trust,
shall provide financing from the Trust to any purchaser of an REO Property.
(b) If title to any REO Property is acquired, the deed or certificate of
sale shall be issued to the Trustee for the benefit of the Certificateholders.
Each Servicer shall, in accordance with Section 3.08(a) hereof, use its
reasonable efforts to sell any REO Property as expeditiously as possible, but in
any event within the time period, and subject to the conditions set forth in
Section 3.08(a) hereof. Pursuant to its efforts to sell any REO Property, each
Servicer shall either itself, or through an agent selected by it, protect and
conserve such REO Property in the same manner and to the same extent as it
customarily does in connection with its own real estate acquired through
foreclosure or by deed in lieu of foreclosure, incident to its conservation and
protection of the interests of the Certificateholders, and may rent such REO
Property, or any part thereof, as it deems likely to increase the net proceeds
distributable to the Certificateholders, subject to the terms and conditions
described in this Section 3.08.
For the purpose of protecting the interests of the Trustee and
conserving any REO Property prior to sale, the Servicer of the related Mortgage
Loan may contract with any Independent Contractor for the conservation,
protection and rental of such REO Property, provided that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that the Independent Contractor (A) pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, (B) hold all related revenues in a segregated account insured
by the Federal Deposit Insurance Corporation and (C) remit all related
revenues collected (net of such costs and expenses retained by such
Independent Contractor) to the Servicer on a monthly or more frequent
basis; and
(iii) none of the provisions of this Section 3.08 relating to any
such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Servicer of any of its duties
and obligations to the Trustee and the Certificateholders with respect
to the conservation, protection and rental of such REO Property.
A Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. A Servicer or any Independent Contractor shall be entitled
to a fee, based on the prevailing market rate (and set in good faith at a
reasonable level in the case of a fee payable to a Servicer), for the operation
and management of any REO Property, which fee shall be an expense of the Trust
payable out of the gross income on such REO Property.
(c) A Servicer shall deposit all funds collected and received in
connection with the operation of any REO Property in its Servicer Custodial
Account on or before the second Business Day following receipt of such funds.
(d) A Servicer, upon the final disposition of any REO Property, shall be
entitled to be reimbursed for any unreimbursed Advances and paid any unpaid
Servicing Fees with respect to the related Mortgage Loan from the Liquidation
Proceeds received in connection with the final disposition of such REO Property;
provided, however, that any such unreimbursed Advances or unpaid Servicing Fees
may be reimbursed or paid, as the case may be, out of any net rental income or
other net amounts derived from such REO Property.
(e) The final disposition of any REO Property shall be carried out by a
Servicer at the fair market value of such REO Property under the circumstances
existing at the time of disposition and upon such terms and conditions as
30
<PAGE>
such Servicer shall deem necessary or advisable and as are in accordance with
accepted servicing practices and in accordance with Section 3.08(a) hereof.
(f) A Servicer shall deposit the Liquidation Proceeds from the final
disposition of any REO Property in its Servicer Custodial Account on or before
the second Business Day following receipt of such Liquidation Proceeds and,
subject to such withdrawals as may be permitted by Section 3.08(d) hereof, such
proceeds shall be transferred to the Asset Proceeds Account pursuant to Section
3.01(c) hereof.
(g) A Servicer shall prepare and file reports of foreclosure and
abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, a Servicer,
acting on behalf of the Trustee, shall not rent, lease or otherwise earn income
or take any action on behalf of the Trust with respect to any REO Property that
might (i) cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of section 86OG(a)(8) of the Code or (ii) result in the
receipt by the REMIC of any "income from non-permitted assets" within the
meaning of section 86OF(a)(2) of the Code or any "net income from foreclosure
property" within the meaning of section 860G(c)(2) of the Code, both of which
types of income are subject to tax under the REMIC Provisions, unless the
Trustee has received an Opinion of Counsel, at the expense of the Trust (the
costs of which shall be recoverable out of such Servicer's Servicer Custodial
Account), to the effect that, under the REMIC Provisions and any relevant
proposed legislation, any income generated for any related REMIC by such REO
Property would not result in the imposition of a tax upon such REMIC.
Without limiting the generality of the foregoing, neither the Trustee,
the Master Servicer nor a Servicer shall knowingly:
(i) enter into, renew or extend any New Lease with respect to any
REO Property if the New Lease by its terms will give rise to any income
that does not constitute Rents From Real Property;
(ii) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents From Real Property;
(iii) authorize or permit any construction on any REO Property,
other than the completion of a building or other improvement thereon and
then only if more than ten percent of the construction of such building
or other improvement was completed before default on the related
Mortgage Loan became imminent, all within the meaning of section
856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person to Directly
Operate, any REO Property on any date more than 90 days after its
acquisition date (unless the Person who would Directly Operate such REO
Property is an Independent Contractor);
unless, in any such case, the Person proposing to take such action has requested
and received the Opinion of Counsel described in the preceding sentence, in
which case the Person may take such actions as are specified in such Opinion of
Counsel.
A Servicer shall not acquire any personal property relating to any
Mortgage Loan pursuant to this Section 3.08 unless either:
(i) such personal property is incident to real property
(within the meaning of section 856(e)(1) of the Code) so acquired by
such Servicer; or
(ii) such Servicer shall have requested and received an Opinion
of Counsel, at the expense of the Trust (the costs of which shall be
recoverable out of its Servicer Custodial Account), to the effect that
the holding of such personal property by the related REMIC will not
cause the imposition of a tax under the REMIC Provisions on any REMIC
related to the Trust or cause any such REMIC to fail to qualify as a
REMIC at any time that any Certificate is outstanding.
(j) Any actions required or permitted to be taken by a Servicer
under this Section 3.08 may be taken by the Master Servicer on behalf of such
Servicer.
31
<PAGE>
(k) Each Servicing Agreement relating to a Trust Agreement shall provide
that the related Servicer shall manage, conserve, protect and operate any REO
Property as provided in this Section 3.08, and the Master Servicer is hereby
obligated to assure that each Servicer complies with the provisions of this
Section 3.08.
Section 3.09. Amendments to Servicing Agreements; Modification of the
Guide
From time to time Saxon may, to the extent permitted by the applicable
Servicing Agreement, make such modifications and amendments to the Guide as
Saxon deems necessary or appropriate to confirm or carry out more fully the
intent and purpose of the Servicing Agreement and the duties, responsibilities
and obligations to be performed by the Servicer thereunder; provided, however,
that in no event shall Saxon modify or amend the Guide if such modification or
amendment would have an adverse effect on the Certificateholders. Any such
modification or amendment of the Guide shall be deemed to have an adverse effect
on the Certificateholders if such amendment or modification either results in
(i) the downgrading of the rating assigned by any Rating Agency to the
Certificates or (ii) the loss by the Trust or the assets thereof of REMIC status
for federal income tax purposes. Prior to the issuance of any such modification
or amendment, Saxon shall deliver to the Master Servicer and the Trustee an
Officer's certificate setting forth (i) the provision that is to be modified or
amended, (ii) the modification or amendment that Saxon desires to issue and
(iii) the reason or reasons for such proposed modification or amendment.
Section 3.10. Oversight of Servicing
The Master Servicer shall supervise, administer, monitor and oversee the
servicing of the Mortgage Loans by each Servicer and the performance by each
Servicer of all services, duties, responsibilities and obligations that are to
be observed or performed by such Servicer under its Servicing Agreement
(including, but not limited to, such Servicer's obligation to comply with the
provisions of Section 3.08 hereof). Without limiting the generality of the
foregoing, the Master Servicer, acting with the consent of Saxon and subject to
Section 1.03 hereof but without the consent of the Trustee or any
Certificateholder, shall have the power and responsibility for approving the
transfer or other assignment of any Servicing Agreement by any Servicer. Saxon
shall provide the Master Servicer with a copy of the Servicing Agreement
executed by each Servicer as well as the Guide incorporated by reference into
such Servicing Agreement on or before the Closing Date. The Master Servicer
acknowledges that, prior to taking certain actions required to service the
Mortgage Loans, the Guide provides that the Servicer must notify, consult with,
obtain the consent of or otherwise follow the instructions of the Master
Servicer. The Master Servicer is also given authority to waive compliance by the
Servicer with certain provisions of the Servicing Agreement. In each such
instance, the Master Servicer shall promptly instruct the Servicer or otherwise
respond to any request of the Servicer. In no event shall the Master Servicer
instruct the Servicer to take any action, give any consent to action by the
Servicer or waive compliance by the Servicer with any provision of the Servicing
Agreement if any resulting action or failure to act is inconsistent with the
obligations of the Servicer for similarly rated transactions or would otherwise
have an adverse effect on the Certificateholders. Any such action or failure to
act shall be deemed to have an adverse effect on the Certificateholders if such
action or failure to act either results in (i) the downgrading of the rating
assigned by any Rating Agency to the Certificates or (ii) the loss by the Trust
or the assets thereof of REMIC status for federal income tax purposes.
The Master Servicer shall instruct each Servicer that it should not take
any action to foreclose, or accept a deed in lieu of foreclosure, with respect
to any Mortgage Loan if such Servicer knows, or has reason to know, that the
related Mortgaged Premises are contaminated with toxic wastes or other hazardous
substances.
During the term of the Trust Agreement, the Master Servicer shall
consult fully with each Servicer as may be necessary from time to time to
perform and carry out the Master Servicer's obligations hereunder and receive,
review and evaluate all reports, information and other data that are provided to
the Master Servicer by each Servicer and otherwise exercise reasonable efforts
to encourage each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by it under its Servicing Agreement.
For the purposes of determining whether any modification of a Mortgage
Loan shall be permitted by the Trustee or the Master Servicer, such modification
shall be construed as a substitution of the modified Mortgage Loan for the
Mortgage Loan originally assigned and transferred to the Trust. No modification
shall be approved unless (i) such modification is occasioned by default or a
reasonably foreseeable default or (ii) there is delivered to the Trustee an
Opinion of Counsel (at the expense of the party seeking to modify the Mortgage
Loan) to the effect that such modification would not be treated as giving rise
to a new debt instrument for federal income tax purposes.
32
<PAGE>
The relationship of the Master Servicer or any Servicer to the Trustee
under the Trust Agreement is intended by the parties to be that of an
independent contractor and not that of a joint venturer or partner.
Section 3.11. Credit Enhancement
To the extent provided in the Trust Agreement, one or more forms of
Credit Enhancement shall be maintained for the benefit of the
Certificateholders. The Trust Agreement shall specify with respect to each such
form of Credit Enhancement, among other things, the manner in which any funds
relating to such Credit Enhancement are to be invested, the source and manner of
payment of any Credit Enhancement Fees, the circumstances, if any, under which
supplemental or replacement Credit Enhancement shall be obtained, the manner in
which such Credit Enhancement is to be enforced, and whether such Credit
Enhancement covers or will cover other Series of Certificates.
ARTICLE IV
REPORTING/REMITTING TO CERTIFICATEHOLDERS
Section 4.01. Statements to Certificateholders
Unless otherwise provided in the Trust Agreement: (i) on or before each
Master Servicer Reporting Date, the Master Servicer shall prepare and deliver to
Saxon and the Paying Agent a Monthly Statement and (ii) on the Distribution Date
following each Master Servicer Reporting Date, the Master Servicer shall prepare
and mail a copy of such Monthly Statement to the Trustee, the Rating Agencies,
the Underwriters and each Certificateholder.
In addition to the Monthly Statement, the Master Servicer shall prepare
and deliver to the Paying Agent prior to each Distribution Date, and the Paying
Agent shall forward to each Holder of a Residual Certificate, if any, on each
Distribution Date, a statement setting forth the amounts actually distributed
with respect to the Residual Certificates on such Distribution Date and the
aggregate Certificate Principal Balance, if any, of any Residual Certificates
after giving effect to any distribution to be made on such Distribution Date,
separately identifying the amount of Realized Losses allocated to such Residual
Certificates for the preceding Prepayment Period.
Within a reasonable period of time after the end of each calendar year,
the Master Servicer shall prepare, based on information provided by the
Servicers, and deliver a statement setting forth the distributions (based on a
Certificate in the original principal amount of $1,000) allocable to interest
and principal to each Person who at any time during the calendar year was a
Certificateholder that constituted a retail investor or to any other
Certificateholder that requests such statement, aggregated for such calendar
year or portion thereof during which such Person was a Certificateholder. Such
obligation of the Master Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Master
Servicer pursuant to any requirements of the Code as from time to time are in
effect.
Within a reasonable period of time after the end of each calendar year,
the Master Servicer shall prepare and deliver to the Trustee, and the Trustee
shall forward by mail to each Person who at any time during such calendar year
was a Holder of a Residual Certificate, a statement containing the information
provided pursuant to the second preceding paragraph aggregated for such calendar
year. Such obligation of the Master Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in effect.
Access to the Monthly Statements and other statements described in this
Section 4.01 may be provided via electronic on-line reports in lieu of
forwarding such statements by mail to Certificateholders provided that such
electronic on-line reports satisfy the requirements of the Code as from time to
time may be in effect.
Section 4.02. Remittance Reports
The Master Servicer shall prepare and deliver to the Trustee by mail,
facsimile or electronic transfer on or before each Master Servicer Reporting
Date, the Remittance Report with respect to the following Distribution Date.
Each Remittance Report shall contain the information specified in Exhibit C
attached hereto. The information in such report shall be made available by the
Trustee to any Certificateholder that requests such report in writing.
If the Master Servicer does not furnish the Remittance Report or any
other statement or report as required by this Section 4.02 or Section 4.01
hereof, or if an Officer of the Trustee has actual knowledge that any such
Remittance Report or other statement or report is erroneous or inaccurate in any
material respect, and if any such Remittance Report
33
<PAGE>
or other statement or report is not furnished or corrected, as the case may be,
within one Business Day following the date it is due to be delivered, then the
Trustee shall request and the Master Servicer shall furnish by electromagnetic
tape (or such other medium as the Trustee and the Master Servicer may agree from
time to time) the information necessary to enable the Trustee to prepare the
Remittance Report and the other statements and reports as required by this
Section 4.02 and Section 4.01 hereof, and the Trustee shall thereupon prepare
such report and receive the Master Servicing Fee for such month. Upon
termination of the Master Servicer pursuant to Section 7.02 hereof, the Trustee
shall thereafter undertake all the obligations of the Master Servicer pursuant
to this Section 4.02 and Section 4.01 hereof and shall be entitled to the
compensation otherwise payable to the Master Servicer pursuant hereto in
consideration of the performance of such obligations.
The Trustee shall be under no duty and shall have no obligation to
recalculate, verify or recompute the information provided to it hereunder by the
Master Servicer.
Section 4.03. Compliance with Withholding Requirements
Notwithstanding any other provision of the Trust Agreement, each of the
Trustee and the Paying Agent shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Certificates that the Trustee or the Paying Agent
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. If either the
Trustee or the Paying Agent does withhold any amount from interest or original
issue discount payments or Advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Paying Agent shall indicate with any
payment to such Certificateholder the amount withheld.
Section 4.04. Reports to the Clearing Agency
If and for so long as any Certificate is held by a Clearing Agency, on
each Master Servicer Remittance Date, the Paying Agent shall telecopy a copy of
the Monthly Statement to the Clearing Agency together with a statement as to (i)
the Distribution Date and (ii) the Record Date for such Distribution Date.
Section 4.05. Preparation of Regulatory Reports
(a) Subject to the provisions of subsections (b) and (c) of this Section
4.05, the Master Servicer shall prepare or cause to be prepared, on behalf of
the Trust, and shall file or cause to be filed in a timely manner such
supplementary and periodic information, documents and reports (collectively,
"Periodic Reports") as may be required pursuant to Section 12(g) or Section
15(d) of the Exchange Act, by the rules and regulations of the SEC thereunder or
as a condition to approval of any application for relief ("Application for
Relief") hereinafter referred to and, in connection therewith, shall prepare
such applications and requests for exemption and other relief from such
provisions as it may deem appropriate. If any Periodic Report is required to be
signed by Saxon or the Trustee rather than by the Master Servicer, the Master
Servicer shall be deemed to certify as to each Periodic Report delivered to
Saxon or the Trustee for its review and execution that such Periodic Report
conforms in all material respects to applicable reporting requirements imposed
by the Exchange Act or is otherwise in form and content appropriate for filing
with the SEC. Saxon or the Trustee shall execute all such Periodic Reports and
Applications for Relief delivered as provided above and shall return the same to
the Master Servicer for filing with the SEC and other required filing offices,
if any, on behalf of the Trust or shall authorize the Master Servicer to execute
any such Periodic Report or Application for Relief on the Trustee's behalf.
(b) Within 30 days after the beginning of the first fiscal year of the
Trust during which the obligation to file Periodic Reports pursuant to the
Exchange Act shall have been suspended, the Master Servicer shall prepare, or
cause to be prepared, a notice on SEC Form 15 ("Form 15") and shall forward such
notice to the Trustee for execution. The Trustee shall execute each Form 15
delivered as provided above and shall return the same to the Master Servicer for
filing with the SEC on behalf of the Trust or shall authorize the Master
Servicer to execute such Form 15 on the Trustee's behalf; provided, however,
that the Master Servicer shall be under no obligation to prepare such notice if
the number of Certificateholders exceeds 300. The Certificate Registrar shall
notify the Master Servicer in a timely manner if the number of
Certificateholders at any one time exceeds 300. The Master Servicer shall file
any Form 15 with the SEC in accordance with the provisions of Rule 15d-6 under
the Exchange Act.
(c) Notwithstanding any other provision of this Agreement, none of the
Master Servicer, the Certificate Registrar, the Paying Agent, or the Trustee has
assumed, and shall not by its performance hereunder be deemed to have assumed,
any of the duties or obligations of Saxon or any other Person with respect to
(i) the registration of the
34
<PAGE>
Certificates pursuant to the Securities Act, (ii) the issuance or sale of the
Certificates or (iii) compliance with the provisions of the Securities Act, the
Exchange Act or any applicable federal or state securities or other laws,
including, but not limited to, any requirement to update the registration
statement or prospectus relating to the Certificates in order to render the same
not materially misleading to investors.
(d) In connection with the Master Servicer's preparation of any Form 15
or any Periodic Report, the Certificate Registrar shall provide the Master
Servicer with such information as the Master Servicer may reasonably request
concerning the number and identity of the Holders appearing on the Certificate
Register, but the Certificate Registrar shall have no duty or obligation to
provide information which does not appear on the Certificate Register, including
any information concerning the ownership of Persons for whom a nominee is the
Certificateholder of record.
ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
Section 5.01. Pooling REMIC Interests
If an election has been made to treat certain assets of the Trust as a
Pooling REMIC, the Trust Agreement will set forth the terms of the Regular
Interests and the Residual Interest of the Pooling REMIC. Unless otherwise
provided in the Trust Agreement, (i) the Subaccounts will be the Regular
Interests in the Pooling REMIC but will not constitute securities or
certificates of interest in the Trust and (ii) the Trustee will be the owner of
the Subaccounts, which may not be transferred to any person other than a
successor trustee appointed pursuant to Section 8.07 hereof unless the party
desiring the transfer obtains a Special Tax Opinion.
Section 5.02. The Certificates
The Certificates shall be designated in the Trust Agreement. The
Certificates in the aggregate will represent the entire beneficial ownership
interest in the Trust Estate. On the Closing Date, the aggregate Certificate
Principal Balance of the Certificates will be equal to or less than the sum of
(i) the aggregate Scheduled Principal Balance of the Initial Mortgage Loans as
of the Cut-Off Date and (ii) the amount in the Pre-Funded Account. The
Certificates will be substantially in the forms annexed to the Trust Agreement.
Unless otherwise provided in the Trust Agreement, the Certificates of each Class
will be issuable in registered form, in denominations or authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and delivered by
the Trustee and the Trustee shall cause the Certificates to be authenticated by
the Certificate Registrar to or upon the order of Saxon upon receipt by the
Trustee of the documents specified in Section 2.01 hereof. The Certificates
shall be executed and attested by manual or facsimile signature on behalf of the
Trustee by an authorized Officer. Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper Officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificates or did not hold such offices at the date of such Certificates.
The Certificate shall be authenticated by a manual signature of a duly
authorized signatory of the Certificate Registrar. No Certificate shall be
entitled to any benefit under the Trust Agreement or be valid for any purpose
unless there appears on such Certificate a certificate of authentication
substantially in the form provided in the Trust Agreement executed by the
Certificate Registrar by manual signature, and such certificate of
authentication shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered under the Trust Agreement.
All Certificates shall be dated the date of their execution.
35
<PAGE>
Section 5.03. Book-Entry Certificates
(a) The Book-Entry Certificates shall be represented initially by one or
more certificates registered in the name designated by the Clearing Agency.
Saxon, the Master Servicer the Certificate Registrar, the Paying Agent and the
Trustee may for all intents and purposes (including the making of payments on
the Book-Entry Certificates) deal with the Clearing Agency as the authorized
representative of the Beneficial Owners of the Book-Entry Certificates for as
long as such Certificates are registered in the name of the Clearing Agency. The
rights of Beneficial Owners of the Book-Entry Certificates shall be limited to
those established by law and agreements between such Beneficial Owners and the
Clearing Agency and Clearing Agency Participants. The Beneficial Owners of the
Book-Entry Certificates shall not be entitled to certificates for the Book-Entry
Certificates as to which they are the Beneficial Owners, except as provided in
subsection (c) below. Requests and directions from, and votes of, the Clearing
Agency, as Certificateholder, shall not be deemed to be inconsistent if they are
made with respect to different Beneficial Owners. A Book-Entry Certificate may
not be transferred by the Clearing Agency without the consent of Saxon, the
Master Servicer and the Trustee except to another Clearing Agency that agrees to
hold such Book-Entry Certificate for the account of the respective Clearing
Agency Participants and Beneficial Owners.
(b) Neither Saxon, the Master Servicer, the Certificate Registrar, the
Paying Agent nor the Trustee shall have any liability for any aspect of the
records relating to or payment made on account of Beneficial Owners of the
Book-Entry Certificates held by the Clearing Agency, for monitoring or
restricting any transfer of beneficial ownership in a Book-Entry Certificate or
for maintaining, supervising or reviewing any records relating to such
Beneficial Owners.
(c) The Book-Entry Certificates shall be issued in fully registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Clearing Agency or its nominee, only if (i) Saxon
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities as depository with respect to
the Book-Entry Certificates, and Saxon is unable to locate a qualified successor
within 30 days, or (ii) Saxon, at its option, elects to terminate the book-entry
system operating through the Clearing Agency. Upon the occurrence of either such
event, the Trustee shall notify the Clearing Agency and the Certificate
Registrar, which in turn shall notify all Beneficial Owners of Book-Entry
Certificates through Clearing Agency Participants, of the availability of
certificated Certificates. Upon surrender by the Clearing Agency of the
certificates representing the Book-Entry Certificates and receipt of
instructions for re-registration, the Certificate Registrar shall reissue the
Book-Entry Certificates as certificated Certificates to the Beneficial Owners
identified in writing by the Clearing Agency. Such certificated Certificates
shall not constitute Book-Entry Certificates. All reasonable costs associated
with the preparation and delivery of certificated Certificates shall be borne by
Saxon.
Section 5.04. Registration of Transfer and Exchange of Certificates
The Certificate Registrar shall cause to be kept at its Corporate Trust
Office a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
provided in the Trust Agreement. The Certificate Registrar designated in the
related Trust Agreement shall initially serve as Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as provided in the Trust Agreement. Upon any resignation of any Certificate
Registrar, the Trustee shall promptly appoint, subject to Section 1.03 hereof, a
successor or, in the absence of such appointment, shall assume the duties of
Certificate Registrar. The Trustee shall have no liability or responsibility for
any act or omission to act of any Certificate Registrar (unless the Trustee is
then serving as such Certificate Registrar) appointed pursuant to the terms of
the related Trust Agreement. The Certificate Registrar shall be entitled to the
same rights, privileges and immunities accorded the Trustee pursuant to Article
VIII hereof.
Subject to Section 5.05 hereof, upon surrender for registration of
transfer of any Certificate at the Corporate Trust Office of the Certificate
Registrar or at any other office or agency of the Certificate Registrar
maintained for such purpose, the Trustee shall execute and the Certificate
Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class of a
like aggregate Percentage Interest.
At the option of the Certificateholders, each Certificate may be
exchanged for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
cause the Certificate Registrar to authenticate and deliver the Certificates
which the
36
<PAGE>
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in a form satisfactory to the Certificate Registrar duly
executed by, the Holder of such Certificate or his attorney duly authorized in
writing.
No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
The Certificate Registrar shall provide notice to the Trustee of each
transfer of a Certificate and shall provide the Trustee and the Master Servicer
with an updated copy of the Certificate Register on January 1 and July 1 of each
year. If the Trustee shall not at any time be acting as the Certificate
Registrar, the Trustee shall have the right to inspect such Certificate Register
at all reasonable times and to rely conclusively upon a certificate of the
Certificate Registrar as to the names and addresses of the Certificateholders
and the Percentage Interests held by each.
Section 5.05. Restrictions on Transfers
(a) Securities Law Compliance. No transfer of any Private Certificate
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify Saxon, the Trustee, the Certificate Registrar and the Master Servicer
against any liability that may result if any transfer of such Certificate by
such Holder is not exempt from registration under the Securities Act and all
applicable state securities laws or is not made in accordance with such federal
and state laws. None of Saxon, the Trustee, the Certificate Registrar or the
Master Servicer is obligated to register or qualify any Private Certificate
under the Securities Act or any other securities law or to take any action not
otherwise required under the Trust Agreement to permit the transfer of such
Certificate without such registration or qualification. The Certificate
Registrar shall not register any transfer of a Private Certificate (other than a
Residual Certificate) unless and until the prospective transferee provides the
Certificate Registrar with a Transferee Agreement or a Rule 144A Agreement
certifying to facts which, if true, would mean that the proposed transferee is a
Qualified Institutional Buyer, and unless and until the transfer otherwise
complies with the provisions of this Section 5.05. If the proposed transferee of
a Private Certificate does not certify to facts which, if true, would mean that
such proposed transferee is a Qualified Institutional Buyer, the Certificate
Registrar shall require that the transferor and such proposed transferee certify
as to the factual basis for the registration exemption(s) relied upon, and if
the transfer is made within three years of the acquisition of such Certificate
by a non-Affiliate of Saxon from Saxon or an Affiliate of Saxon, the Master
Servicer or the Certificate Registrar also may require an Opinion of Counsel
that such transfer may be made without registration or qualification under the
Securities Act and applicable state securities laws, which Opinion of Counsel
shall not be obtained at the expense of Saxon, the Certificate Registrar or the
Master Servicer. Notwithstanding the foregoing, no Rule 144A Agreement,
Transferee Agreement or Opinion of Counsel shall be required in connection with
the initial issuance of the Private Certificates to Saxon, SMI, the Master
Servicer, the Trustee or any of their Affiliates.
Saxon shall provide to any Holder of a Private Certificate and any
prospective transferee that is a Qualified Institutional Buyer designated by
such Holder information regarding the related Certificates and the Mortgage
Loans and such other information as shall be necessary to satisfy the condition
to eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A.
(b) Regular Certificates.
(i) Public Subordinated Certificates. No Regular Certificate that
is a Public Subordinated Certificate shall be transferred to a
transferee that acknowledges that it is a Plan Investor unless such
transferee provides the Certificate Registrar and the Master Servicer
with a Benefit Plan Opinion. The transferee of a Public Subordinated
Certificate that does not provide the Certificate Registrar and the
Master Servicer with a Benefit Plan Opinion will be deemed, by virtue of
its acquisition of such Certificate, to have represented that it is not
a Plan Investor.
37
<PAGE>
(ii) Private Subordinated Certificates. No Regular Certificate
that is a Private Subordinated Certificate shall be transferred unless
the prospective transferee provides the Certificate Registrar and the
Master Servicer with a properly completed Benefit Plan Affidavit,
together with a Benefit Plan Opinion if required in order to comply with
such Benefit Plan Affidavit.
(c) Residual Certificates. No Residual Certificate (including any
beneficial interest therein) may be transferred to a Disqualified Organization.
In addition, no Residual Certificate (including any beneficial interest therein)
may be transferred unless (i) the proposed transferee provides the Certificate
Registrar and the Master Servicer with (A) a Residual Transferee Agreement, (B)
a Benefit Plan Affidavit, (C) a Disqualified Organization Affidavit and (D) if
the proposed transferee is a Non-U.S. Person, a TAPRI Certificate, and (ii) the
interest transferred involves the entire interest in a Residual Certificate or
an undivided interest therein (unless the transferor or the transferee provides
the Master Servicer and the Certificate Registrar with an Opinion of Counsel
(which shall not be an expense of the Master Servicer or the Certificate
Registrar) that the transfer will not jeopardize the REMIC status of any related
REMIC). Notwithstanding the foregoing, the Residual Transferee Agreement,
Benefit Plan Affidavit, Disqualified Organization Affidavit or TAPRI Certificate
shall not be required to be provided upon original issuance of a Residual
Certificate to Saxon or SMI or any of their Affiliates or to the Master
Servicer, the Trustee or any of their Affiliates for the purpose of acting as
the Tax Matters Persons. Furthermore, if a proposed transfer involves a Private
Certificate, (i) the Certificate Registrar shall require that the transferor and
the transferee certify as to the factual basis for the registration exemption(s)
relied upon and (ii) if the transfer is made within three years from the
acquisition of the Certificate by a non-Affiliate of Saxon from Saxon or an
Affiliate of Saxon, the Certificate Registrar also may require an Opinion of
Counsel that such transfer may be made without registration or qualification
under the Securities Act and applicable state securities laws, which Opinion of
Counsel shall not be obtained at the expense of the Certificate Registrar or the
Master Servicer. In any event, the Certificate Registrar shall not effect any
transfer of a Residual Certificate except upon notification of such transfer to
the Master Servicer. Notwithstanding the foregoing, no Opinion of Counsel shall
be required in connection with the initial issuance of the Residual Certificates
or their transfer by a broker or dealer, if such broker or dealer was the
initial transferee.
Upon notice to the Trustee that any legal or beneficial interest in any
portion of the Residual Certificates has been transferred, directly or
indirectly, to a Disqualified Organization or an agent thereof (including a
broker, nominee or middleman) in contravention of the foregoing restrictions,
(i) such transferee shall be deemed to hold the Residual Certificates in
constructive trust for the last transferor who was not a Disqualified
Organization or an agent thereof, and such transferor shall be restored as the
owner of such Residual Certificates as completely as if such transfer had never
occurred; provided, however, that the Trustee may, but is not required to,
recover any distributions made to such transferee with respect to the Residual
Certificates and return such recovery to the transferor, and (ii) the Master
Servicer agrees to furnish to the Internal Revenue Service and to any transferor
of the Residual Certificates or any such agent (within 60 days of the request
therefor by the transferor or such agent) such information as may be necessary
for the computation of the tax imposed under section 860E(e) of the Code and as
otherwise may be required by the Code, including, but not limited to, the
present value of the total anticipated excess inclusions with respect to the
Residual Certificates (or portion thereof) for periods after such transfer. At
the election of the Master Servicer, the cost of computing and furnishing such
information may be charged to the transferor or the agent referred to above;
provided, however, that the Master Servicer shall in no event be excused from
furnishing such information.
If a tax or a reporting cost is borne by a REMIC as a result of the
transfer of a Residual Certificate (or any beneficial interest therein) in
violation of the restrictions set forth in this Section 5.05, the transferor
shall pay such tax or cost and, if such tax or cost is not so paid, the Paying
Agent, upon notification from the Master Servicer, shall pay such tax or cost
with amounts that otherwise would have been paid to the transferee of the
Residual Certificate (or the beneficial interest therein). In that event,
neither the transferee nor the transferor shall have any right to seek repayment
of such amounts from Saxon, the Trustee, any REMIC, the Master Servicer, the
Certificate Registrar, the Paying Agent or the other Holders of any of the
Certificates, and none of such parties shall have any liability for payment of
any such tax or reporting cost.
Section 5.06. Mutilated, Destroyed, Lost or Stolen Certificates
If (i) any mutilated Certificate is surrendered to the Trustee or the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to its respective satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee or the Certificate
Registrar such security or indemnity as may be required by them to
38
<PAGE>
save each of them harmless, then, in the absence of actual knowledge by the
Trustee or the Certificate Registrar that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like tenor and Percentage Interest. Upon
the issuance of any new Certificate under this Section 5.06, the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Certificate Registrar)
connected therewith. Any replacement Certificate issued pursuant to this Section
5.06 shall constitute complete and indefeasible evidence of ownership in the
Trust as if originally issued, whether or not the destroyed, lost or stolen
Certificate shall be found at any time.
Section 5.07. Persons Deemed Owners
Prior to due presentation of a Certificate for registration of transfer,
the Master Servicer, the Trustee, the Paying Agent, the Certificate Registrar
and any agent of either of them may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions and for all other purposes whatsoever, and neither the
Master Servicer, the Trustee, the Certificate Registrar, the Paying Agent nor
any agent of either of them shall be affected by notice to the contrary.
Section 5.08. Paying Agent
Any Paying Agent designated in the related Trust Agreement shall make
distributions to Certificateholders. Upon any resignation of any Paying Agent,
the Trustee shall promptly appoint, subject to Section 1.03 hereof, a successor
or, in the absence of such appointment, shall assume the duties of Paying Agent.
No such resignation shall be effective until the acceptance of appointment by
the successor Paying Agent. The Trustee shall have no liability or
responsibility for any act or omission to act of any Paying Agent appointed
(unless the Trustee is then servicing as such Paying Agent) pursuant to the
terms of the related Trust Agreement. Any such Paying Agent will hold all sums
held by it for the payment to Certificateholders in an Eligible Account in trust
for the benefit of the Certificateholders entitled thereto until such sums shall
be paid to the Certificateholders. Any Paying Agent shall be entitled to the
same rights, privileges and immunities accorded the Trustee pursuant to Article
VIII hereof.
ARTICLE VI
SAXON AND THE MASTER SERVICER
Section 6.01. Liability of, and Indemnification by, Saxon and the
Master Servicer
Saxon and the Master Servicer shall each be liable in accordance
herewith only to the extent of the respective obligations specifically imposed
by the Trust Agreement and undertaken by Saxon and the Master Servicer under the
Trust Agreement.
The Master Servicer shall indemnify and hold harmless the Trustee, Saxon
and any director, officer, employee or agent thereof against any loss, liability
or expense, including reasonable attorney's fees, arising out of or in
connection with or incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties of the Master Servicer under the Trust
Agreement or by reason of reckless disregard of its obligations and duties under
the Trust Agreement. Any payment pursuant to this Section 6.01 made by the
Master Servicer to Saxon, the Trustee shall be from such entity's own funds,
without reimbursement therefor. The provisions of this Section 6.01 or shall
survive the resignation or removal of the Master Servicer and the termination of
the Trust Agreement.
Saxon shall indemnify and hold harmless the Master Servicer and any
director, officer, employee or agent thereof against any loss, liability or
expense, including reasonable attorney's fees, incurred in connection with or
arising out of or in connection with the Trust Agreement (other than a loss,
liability or expense subject to indemnification by the Master Servicer pursuant
to the preceding paragraph), any custodial agreement or the Certificates,
including, but not limited to, any such loss, liability or expense incurred in
connection with any legal action against the Master Servicer or any director,
officer, employee or agent thereof, or the performance of any of the Master
Servicer's duties under the Trust Agreement other than any loss, liability or
expense incurred by reason of the Master Servicer's willful misfeasance, bad
faith or negligence in the performance of its duties under the Trust Agreement
or by reason of its reckless disregard of its obligations and duties under the
Trust Agreement. The provisions of this Section 6.01 shall survive the
resignation or removal of the Master Servicer and the termination of the Trust
Agreement.
39
<PAGE>
Section 6.02. Merger or Consolidation of Saxon or the Master Servicer
Subject to the following paragraph, Saxon and the Master Servicer each
will keep in full effect its existence, rights and franchises under the laws of
the jurisdiction of its organization, and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of the Trust
Agreement, the Certificates or any of the Mortgage Loans and to perform its
respective duties under the Trust Agreement.
Saxon or the Master Servicer may be merged or consolidated with or into
any Person, or transfer all or substantially all their respective assets to any
Person, in which case any Person resulting from any merger or consolidation to
which Saxon or the Master Servicer shall be a party, or any Person succeeding to
the business of Saxon or the Master Servicer, shall be the successor of Saxon or
the Master Servicer, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties to the
Trust Agreement, anything herein to the contrary notwithstanding.
Section 6.03. Limitation on Liability of Saxon, the Master Servicer and
Others
Neither Saxon, the Master Servicer nor any of the directors, officers,
employees or agents of Saxon or the Master Servicer shall be under any liability
to the Trust or the Certificateholders, and all such Persons shall be held
harmless for any action taken or for refraining from the taking of any action in
good faith pursuant to the Trust Agreement, or for errors in judgment; provided,
however, that this provision shall not protect any such Person against any
breach of warranties or representations made herein or against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under the Trust Agreement. Saxon, the Master Servicer and
any of the directors, officers, employees or agents of Saxon or the Master
Servicer may rely in good faith on any document of any kind which, prima facie,
is properly executed and submitted by any Person respecting any matters arising
hereunder. Neither Saxon nor the Master Servicer shall be under any obligation
to appear in, prosecute or defend any legal action unless such action is related
to its respective duties under the Trust Agreement and in its opinion does not
involve it in any expense or liability, except as provided in Section 10.01(b)
hereof; provided, however, that Saxon or the Master Servicer may in its
discretion subject to Section 1.03 hereof undertake any such action that it
deems necessary or desirable with respect to the Trust Agreement and the rights
and duties of the parties thereto and the interests of the Certificateholders
thereunder if Saxon or the Master Servicer, as the case may be, are offered
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby.
Section 6.04. Resignation of the Master Servicer
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon appointment of a successor master servicer
and receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not, in and of itself, result in a downgrading
of any rated Certificates (without regard to any Credit Enhancement) or (ii)
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No such resignation shall become effective until the Trustee or a
successor master servicer shall have become the successor master servicer
hereunder and agreed to perform the responsibilities, duties, liabilities and
obligations of the Master Servicer that arise thereafter; provided, however,
that no successor master servicer shall (unless otherwise agreed) assume any
liability for the actions (or failure to act) of the Master Servicer prior to
the date that such successor becomes Master Servicer under the Trust Agreement.
Section 6.05. Compensation to the Master Servicer
The Master Servicer shall be entitled to receive a monthly fee as
compensation for services rendered by the Master Servicer under the Trust
Agreement. The monthly Master Servicing Fee with respect to the Trust shall
equal the amount set forth in the Trust Agreement, which may be retained by the
Master Servicer when it remits funds from the Master Servicer Custodial Account
to the Asset Proceeds Account. The Master Servicer also will be entitled, as
additional compensation, to any late reporting fees paid by a Servicer pursuant
to Section 450 of the Guide.
Section 6.06. Assignment or Delegation of Duties by Master Servicer
40
<PAGE>
Except as expressly provided in the Trust Agreement, the Master Servicer
shall not assign or transfer any of its rights, benefits or privileges under the
Trust Agreement to any other Person, or delegate to or subcontract with, or
authorize or appoint any other Person to perform any of the duties, covenants or
obligations to be performed by the Master Servicer under the Trust Agreement,
without the prior written consent of the Trustee, and any agreement, instrument
or act purporting to effect any such assignment, transfer, delegation or
appointment without such written consent shall be void. Notwithstanding the
foregoing, the Master Servicer shall have the right without the prior written
consent of the Trustee to delegate to, subcontract with, authorize or appoint an
affiliate of the Master Servicer to perform and carry out any duties, covenants
or obligations to be performed and carried out by the Master Servicer under the
Trust Agreement and hereby agrees so to delegate, subcontract, authorize or
appoint to an affiliate of the Master Servicer any duties, covenants or
obligations to be performed and carried out by the Master Servicer under the
Trust Agreement to the extent that such duties, covenants or obligations are to
be performed in any state or states in which the Master Servicer is not
authorized to do business as a foreign corporation but in which the affiliate is
so authorized. In no case, however, shall any permitted assignment relieve the
Master Servicer of any liability under the Trust Agreement.
ARTICLE VII
TERMINATION OF SERVICING AND MASTER SERVICING ARRANGEMENTS
Section 7.01. Termination and Substitution of Servicing Agreements
Upon the occurrence of any event for which a Servicer may be terminated
pursuant to its Servicing Agreement, the Master Servicer shall promptly deliver
to Saxon, the Master Servicer and the Trustee, a certificate of an Officer that
an event has occurred that may justify termination of such Servicing Agreement,
describing the circumstances surrounding such event. Subject to Section 1.03
hereof, the Master Servicer may or shall terminate such Servicing Agreement.
If a Servicing Agreement is terminated, the Master Servicer shall enter
into a substitute Servicing Agreement with another mortgage loan servicing
company acceptable to the Master Servicer and Rating Agency under which such
mortgage loan servicing company shall assume, satisfy, perform and carry out all
liabilities, duties, responsibilities and obligations that are to be, or
otherwise were to have been, satisfied, performed and carried out by the
terminated Servicer under such terminated Servicing Agreement. Notwithstanding
the foregoing, no such substitute Servicing Agreement need contain a covenant by
the substitute Servicer to purchase Converted Mortgage Loans. Until such time as
the Master Servicer enters into a substitute servicing agreement with respect to
the Mortgage Loans, the Master Servicer shall assume, satisfy, perform and carry
out all obligations which otherwise were to have been satisfied, performed and
carried out by the terminated Servicer under the terminated Servicing Agreement.
In no event, however, shall the Master Servicer be deemed to have assumed the
obligations of a Servicer to purchase any Mortgage Loan from the Trust pursuant
to any provision of the related Servicing Agreement or the Guide or to make
Advances with respect to any Mortgage Loan, except to the extent specifically
provided in Section 3.04 of the Standard Terms. As compensation to the Master
Servicer for any servicing obligations fulfilled or assumed by the Master
Servicer, the Master Servicer shall be entitled to any servicing compensation to
which the terminated Servicer would have been entitled if the Servicing
Agreement with such Servicer had not been terminated.
Section 7.02. Termination of Master Servicer; Trustee to Act
Each of the following shall constitute an Event of Default by the Master
Servicer of its obligations under the Trust Agreement:
(a) the Master Servicer shall fail duly to observe or perform in any
material respect any of its covenants or agreements (other than its obligation
to make an Advance pursuant to Section 3.04 hereof) contained in the Trust
Agreement and such failure shall continue unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee or to the
Master Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(b) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or
41
<PAGE>
similar proceeding, or for the winding-up or liquidation of its affairs, shall
have been entered against the Master Servicer and such decree or order shall
have remained in force undischarged and unstayed for a period of 60 days; or
(c) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding of or relating to the
Master Servicer or relating to all or substantially all its property; or
(d) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations; or
(e) the Master Servicer shall fail to remit funds in the Master Servicer
Custodial Account to the Asset Proceeds Account as required by Section 3.01(c)
hereof within one Business Day of the date that such funds are due; or
(f) the Master Servicer shall fail to make any Advance or other payment
required by Section 3.04 or Section 3.05 hereof within one Business Day of the
date that such Advance or other payment is due.
The rights and obligations of the Master Servicer under the Trust
Agreement may be terminated only upon the occurrence of an Event of Default and
subject to Section 1.03 hereof. Subject to Section 1.03 hereof, if an Event of
Default described in clauses (a) through (d) of this Section 7.02 shall occur,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Trustee may, and at the direction of the Holders of
Certificates entitled to at least 51% of the Voting Rights, the Trustee shall,
by notice in writing to the Master Servicer, terminate all the rights and
obligations of the Master Servicer under the Trust Agreement, other than its
rights as a Certificateholder. Subject to Section 1.03 hereof if an Event of
Default described in clauses (e) and (f) of this Section 7.02 shall occur, the
Trustee may terminate, by notice in writing to the Master Servicer, all the
rights and obligations of the Master Servicer under the Trust Agreement, other
than its rights as a Certificateholder. On and after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
under the Trust Agreement, whether with respect to the Certificates (other than
as a Holder thereof) or the Mortgage Loans or otherwise, shall, to the maximum
extent permitted by law, pass to and be vested in the Trustee pursuant to and
under this Section 7.02 (provided, however, that the Master Servicer shall
continue to be entitled to receive all amounts accrued or owing to it under the
Trust Agreement on or prior to the date of such termination. Without limiting
the generality of the foregoing, the Trustee is hereby authorized and empowered
to execute and deliver on behalf of and at the expense of the Master Servicer,
as the Master Servicer's attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things that in
the Trustee's sole and absolute judgment may be necessary or appropriate, to
effect such termination. Notwithstanding the foregoing, upon any such
termination the Master Servicer shall do all things reasonably requested by the
Trustee to effect the termination of the Master Servicer's responsibilities,
rights and powers under the Trust Agreement, and the transfer thereof to the
Trustee, including, but not limited to, promptly providing to the Trustee (and
in no event later than ten Business Days subsequent to such notice) all
documents and records electronic and otherwise reasonably requested by the
Trustee to enable the Trustee or its designee to assume and carry out the duties
and obligations that otherwise were to have been performed and carried out by
the Master Servicer but for such termination.
Upon any such termination, the Trustee shall, to the maximum extent
permitted by law, be the successor in all respects to the Master Servicer in its
capacity as master servicer under the Trust Agreement, but the Trustee shall not
have any liability for, or any duty or obligation to perform, any duties or
obligations of the Master Servicer required to be performed prior to the date
that the Trustee becomes successor master servicer.
As successor master servicer, the Trustee shall be entitled to the fees
to which the Master Servicer would have been entitled if the Master Servicer had
continued to act as such. The Trustee shall also, as successor master servicer,
be entitled to all the protections and indemnification afforded to the Master
Servicer pursuant to Section 6.03 hereof.
Notwithstanding the above but subject to Section 1.03 hereof, upon the
occurrence of an Event of Default, if the Trustee shall be unwilling so to act,
or shall, if it is unable so to act or, if the Holders of Certificates entitled
to at least 51% of the Voting Rights so request in writing to the Trustee,
promptly appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution acceptable to each Rating Agency
and having a net worth of not less than $15,000,000 as the successor to the
Master Servicer. No appointment of a successor to the Master Servicer shall be
effective until the assumption by such successor of all future responsibilities,
duties and liabilities of the Master Servicer under the Trust Agreement. Pending
appointment of a successor to the Master
42
<PAGE>
Servicer, the Trustee or an affiliate shall, to the maximum extent permitted by
law, act in such capacity as hereinabove provided.
In connection with any such appointment and assumption described herein,
the Trustee may make such arrangements for the compensation of such successor
out of payments received on the assets included in the Trust Estate as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Master Servicer under the Trust Agreement.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
Upon the occurrence of any Event of Default, the Trustee, in addition to
the rights specified in this Section 7.02, shall have the right, in its own name
and as Trustee, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies, of the Certificateholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). No remedy provided for by the Trust Agreement shall be exclusive of
any other remedy, each and every remedy shall be cumulative and in addition to
any other remedy and no delay or failure to exercise any right or remedy shall
impair any such right or remedy or shall be deemed to be a waiver of any Event
of Default.
For the purposes of this Section 7.02 and Section 8.01 hereof, the
Trustee shall not be deemed to have knowledge of an Event of Default unless an
Officer of the Trustee has actual knowledge thereof or unless written notice of
such Event of Default is received by the Trustee at its Corporate Trust Office
and such notice references the Certificates, the Trust or the Trust Agreement.
Section 7.03. Notification to Certificateholders
(a) Upon any termination pursuant to Section 7.01 or Section 7.02
hereof, or any appointment of a successor to a Servicer or the Master Servicer,
the Trustee shall give prompt written notice thereof to the Certificateholders
at their respective addresses appearing in the Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default or the
Trustee's receipt of notice of the occurrence of any event permitting
termination of a Servicer, the Trustee shall transmit by mail to the
Certificateholders notice of each such Event of Default or event known to the
Trustee, unless such Event of Default or event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee
The Trustee, prior to the occurrence of an Event of Default and after
the curing of each Event of Default, undertakes to perform such duties and only
such duties as are specifically set forth in the Trust Agreement. During an
Event of Default of which the Trustee has notice, the Trustee shall exercise
such of the rights and powers vested in it by the Trust Agreement, and use the
same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of any resolution, certificate, statement,
opinion, report, document, order or other instrument specifically required to be
furnished to it pursuant to any provision of the Trust Agreement, shall examine
such instrument to determine whether it conforms to the requirements of the
Trust Agreement; provided, however, that the Trustee shall be under no duty to
recalculate, verify or recompute any information provided to it hereunder by
Saxon or the Master Servicer. If any such instrument is found not to conform to
the requirements of the Trust Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's satisfaction, the Trustee shall
provide notice thereof to the Certificateholders.
No provision of the Trust Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(a) prior to the occurrence of an Event of Default, and after the curing
of each Event of Default, the duties and obligations of the Trustee shall be
determined solely by the express provisions of the Trust Agreement, the Trustee
shall not be liable except for the performance of such duties and obligations as
are specifically set forth in the Trust
43
<PAGE>
Agreement, no implied covenants or obligations shall be read into the Trust
Agreement against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee that conform to the
requirements of the Trust Agreement;
(b) the Trustee shall not be personally liable for an error of judgment
made in good faith by an Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders of Certificates entitled to at least 25% of
the Voting Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under the Trust Agreement;
(d) any determination of negligence or bad faith of the Trustee shall be
made only upon a finding that there is clear and convincing evidence (and not
upon the mere preponderance of evidence) thereof in a proceeding before a court
of competent jurisdiction in which the Trustee has had an opportunity to defend;
and
(e) in no event shall the Trustee be held liable for the actions or
omissions of the Master Servicer or a Servicer (excepting the Trustee's own
actions as Master Servicer or Servicer), and in connection with any action or
claim for recovery sought against the Trustee based upon facts involving the
acts or omissions of the Master Servicer or Saxon, or involving any allegation
or claim of liability or recovery against the Trustee by the Master Servicer or
by a Seller, the Trustee shall not be held to a greater standard of care than
the Master Servicer or the Seller would be held in such situation. No provision
of the Trust Agreement shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it unless
such risk or liability relates to duties set forth herein (which duties shall
not be deemed to include actions required to be taken by the Trustee arising out
of the failure of another person to take any required action hereunder).
Section 8.02. Certain Matters Affecting the Trustee
(a) Except as otherwise provided in Section 8.01 hereof:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate of auditors or
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties. Further, the Trustee may accept a copy of the
vote of the Board of Directors of any party certified by its clerk or
assistant clerk or secretary or assistant secretary as conclusive
evidence of the authority of any person to act in accordance with such
vote, and such vote may be considered as in full force and effect until
receipt by the Trustee of written notice to the contrary;
(ii) the Trustee may, in the absence of bad faith on its part,
rely upon a certificate of an Officer of the appropriate Person whenever
in the administration of the Trust Agreement the Trustee shall deem it
desirable that a matter be proved or established (unless other evidence
be herein specifically prescribed) prior to taking, suffering or
omitting any action hereunder;
(iii) the Trustee may consult with counsel chosen with due care
and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such written advice or Opinion of Counsel;
(iv) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by the Trust Agreement or to
institute, conduct or defend any litigation thereunder or in relation
thereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of the Trust Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
44
<PAGE>
(v) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by the Trust Agreement;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing
to do so by the Holders of Certificates entitled to at least 25% of the
Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not assured to the Trustee by the security
afforded to it by the terms of the Trust Agreement, the Trustee may
require indemnity against such expense or liability as a condition to
taking any such action. The expense of every such investigation shall be
paid by the Master Servicer or, if paid by the Trustee, shall be repaid
by the Master Servicer upon demand;
(vii) the Trustee may execute any of the trusts or powers under
the Trust Agreement or perform any duties thereunder either directly or
by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it under the Trust Agreement;
(viii) whenever the Trustee is authorized herein to require acts
or documents in addition to those required to be provided it in any
matter, it shall be under no obligation to make any determination
whether or not such additional acts or documents should be required
unless obligated to do so under Section 8.01 hereof;
(ix) the permissive right or authority of the Trustee to take any
action enumerated in the Trust Agreement shall not be construed as a
duty or obligation; and
(x) the Trustee shall not be deemed to have notice of any matter,
including, but limited to, any Event of Default, unless an Officer of
the Trustee has actual knowledge thereof or unless written notice
thereof is received by the Trustee at its Corporate Trust Office and
such notice references the Certificates, the Trust or the Trust
Agreement.
(b) All rights of action under the Trust Agreement or under any of the
Certificates that are enforceable by the Trustee may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof at
any trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of such Certificates, subject to the provisions of
the Trust Agreement.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans
The recitals contained in the Trust Agreement and in the Certificates
(other than the signature and countersignature of the Trustee on the
Certificates) shall be taken as the statements of Saxon, and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of the Trust Agreement or the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) or of any Mortgage Loan or related document. The Trustee shall
not be accountable for the use or application by Saxon of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to Saxon in respect of the Mortgage Loans or
deposited in or withdrawn from the Asset Proceeds Account or the Master Servicer
Custodial Account other than any funds held by or on behalf of the Trustee in
accordance with Sections 3.01 and 3.02 hereof or as owner of the Regular
Interests of the Pooling REMIC.
Section 8.04. Trustee May Own Certificates
The Trustee, the Paying Agent, the Certificate Registrar or the
Custodian in its respective individual capacity or any other capacity may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee, the Paying Agent, the Certificate Registrar or the Custodian.
Section 8.05. Trustee's Fees
The Trustee shall be entitled to receive the Trustee Fee as compensation
for its services under the Trust Agreement. The Trustee Fee shall be payable
from amounts received with respect to the Mortgage Loans. Saxon shall
45
<PAGE>
indemnify and hold harmless the Trustee, the Paying Agent, the Certificate
Registrar or the Custodian and any director, officer, employee or agent thereof
against any loss, liability or expense, including reasonable attorney's fees,
incurred in connection with or arising out of or in connection with the Trust
Agreement (other than a loss, liability or expense subject to indemnification by
the Master Servicer pursuant to Section 6.01 hereof), any custodial agreement or
the Certificates, including, but not limited to, any such loss, liability or
expense incurred in connection with any legal action against the Trust or the
Trustee, the Paying Agent, the Certificate Registrar or the Custodian or any
director, officer, employee or agent thereof, or the performance of any of the
duties of the Trustee, the Paying Agent or the Certificate Registrar under the
Trust Agreement or the duties of the Custodian under any custodial agreement
other than any loss, liability or expense incurred by reason of the willful
misfeasance, bad faith or negligence in the performance of the duties under the
Trust Agreement or by reason of the willful misfeasance, bad faith or gross
negligence of the Custodian under any custodial agreement (including
specifically any loss, liability or expense incurred by the Custodian by reason
of simple negligence under any custodial agreement). The provisions of this
Section 8.05 shall survive the resignation or removal of the Trustee, the Paying
Agent or the Certificate Registrar and the termination of the Trust Agreement
and the resignation or removal of the Custodian under any custodial agreement.
The Trustee may receive an additional indemnity from a party acceptable to the
Trustee.
Section 8.06. Eligibility Requirements for Trustee
The Trustee shall at all times be a bank or trust company that: (i) is
not an Affiliate, (ii) is organized and doing business under the laws of the
United States or any state thereof and is authorized under such laws to exercise
corporate trust powers, (iii) has a combined capital and surplus of at least
$50,000,000, and (iv) is subject to supervision or examination by a federal or
state authority. If such bank or trust company publishes reports of its
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06 the combined capital and surplus of such bank or trust company
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07 hereof.
Section 8.07. Resignation and Removal of the Trustee
The Trustee may at any time resign and be discharged from the trusts
created pursuant to the Trust Agreement by giving written notice thereof to
Saxon, the Master Servicer and all Certificateholders. Upon receiving such
notice of resignation, Saxon shall promptly, subject to Section 1.03 hereof,
appoint a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
trustee. Saxon shall deliver a copy of such instrument to the
Certificateholders, the Master Servicer and each Servicer. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 hereof and shall fail to resign after written
request therefor by Saxon, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then Saxon, subject to Section
1.03 hereof, may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. Saxon shall also deliver a copy of such
instrument to the Certificateholders, the Master Servicer and each Servicer.
Subject to Section 1.03 hereof, the Holders of Certificates entitled to
at least 51% of the Voting Rights may at any time remove the Trustee and appoint
a successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to each of Saxon, the Trustee so removed
and the successor so appointed. Saxon shall deliver a copy of such instruments
to the Certificateholders, the Master Servicer and each Servicer.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 8.08 hereof.
46
<PAGE>
Section 8.08. Successor Trustee
Any successor trustee appointed as provided in Section 8.07 hereof shall
execute, acknowledge and deliver to Saxon, the Master Servicer and the
predecessor trustee an instrument accepting such appointment under the Trust
Agreement, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor thereunder, with the like effect as if originally
named as trustee therein. The predecessor trustee shall deliver, or cause to be
delivered, to the successor trustee all Trustee Mortgage Loan Files and related
documents and statements held by it under the Trust Agreement, and Saxon, the
Master Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof.
Upon acceptance of appointment by a successor trustee as provided in
this Section, Saxon shall mail notice of the succession of such trustee under
the Trust Agreement to all Certificateholders at their addresses as shown in the
Certificate Register. If Saxon fails to mail such notice within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of Saxon.
Section 8.09. Merger or Consolidation of Trustee
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated or any Person resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any Person succeeding
to the business of the Trustee, shall be the successor of the Trustee under the
Trust Agreement provided such Person shall be eligible under the provisions of
Section 8.06 hereof, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10. Appointment of Trustee or Separate Trustee
For the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or property securing the same may at the time be
located, Saxon, the Master Servicer and the Trustee acting jointly, subject to
Section 1.03 hereof, shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as Saxon, the Master Servicer or the Trustee may
consider necessary or desirable. If Saxon or the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Trustee alone shall have the power to make such appointment. No
co-trustee(s) or separate trustee(s) hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 8.06 hereof and no
notice to Certificateholders of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee under the
Trust Agreement or as successor to the Master Servicer pursuant to Section 7.02
hereof), the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to the Trust Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of the
Trust Agreement, specifically including every provision of the Trust Agreement
relating to the conduct
47
<PAGE>
of or affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Trust Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee. Any expense associated with the appointment of a separate
trustee or co-trustee shall not be an expense of the Master Servicer.
Section 8.11. Appointment of Custodians
The appointment of the Custodian may at any time be terminated and a
substitute Custodian appointed therefor by the Trustee, subject to Section 1.03
hereof, pursuant to a Custody Agreement satisfactory in form and substance to
the Trustee. Subject to Section 1.03 hereof, the Trustee shall terminate the
appointment of any Custodian and appoint a substitute custodian upon the request
of the Master Servicer. The Trustee agrees to comply with the terms of each
custodial agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders. Each Custodian shall be a
depository institution or trust company subject to supervision by federal or
state authority, shall have combined capital and surplus of at least $10,000,000
and shall be qualified to do business in the jurisdiction in which it holds any
Trustee Mortgage Loan File. Any such Custodian may not be an affiliate of Saxon
or any Seller.
Section 8.12. Trustee May Enforce Claims Without Possession of
Certificates
All rights of action and claims under the Trust Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
ARTICLE IX
TERMINATION OF THE TRUST; PURCHASE OF CERTIFICATES
Section 9.01. Termination of Trust
The Trust created under a Trust Agreement and all obligations created
thereby will terminate upon the payment to the Holders of all Certificates
(including the Certificate Insurer, pursuant to its subrogation and
reimbursement rights), from amounts other than those available under the
Certificate Insurance Policies, of all amounts held by the Trustee and required
to be paid to such Holders pursuant to this Agreement upon the last to occur of
(a) the final payment or other liquidation (or any advance made with respect
thereto) of the last Mortgage Loan in the Trust Estate, (b) the disposition of
all property acquired in respect of any Mortgage Loan remaining in the Trust
Estate and (c) if an election has been made to treat certain assets of the Trust
as a REMIC, at any time when a Qualified Liquidation of the REMIC is effected as
described below. To effect a termination of this Agreement pursuant to clause
(c) above, the Holders of all Certificates then Outstanding shall (i)
unanimously direct the Trustee on behalf of the REMIC to adopt a plan of
complete liquidation , as contemplated by Section 860F(a)(4) of the Code and as
prepared by the Master Servicer and (ii) provide to the Trustee an opinion of
counsel experienced in federal income tax matters acceptable to the Trustee to
the effect that such liquidation constitutes, as to the REMIC, a Qualified
Liquidation, and the Trustee either shall sell the assets constituting the REMIC
and distribute the proceeds of the liquidation of the Trust Estate, or shall
distribute equitably in kind all the assets of the Trust Estate to the remaining
Holders of the Certificates each in accordance with such plan, so that the
liquidation or distribution of the Trust Estate, the distribution of any
proceeds of the liquidation and the termination of this Agreement occur no later
than the close of the 90th day after the date of adoption of the plan of
liquidation and such liquidation qualifies as a Qualified Liquidation. The
Holders of the Certificates agree, by acceptance of Certificates, that there may
be no claim under any Certificate Insurance Policy following termination of the
Trust pursuant to clause (c) of the first sentence of this Section 9.01 without
the consent of the Certificate Insurer. In no event, however, will the Trust
created by this Agreement continue beyond the expiration of twenty-one (21)
years from the death of the last survivor of the descendants of George Herbert
Walker Bush, former President of the United
48
<PAGE>
States, living on the date hereof. The Trustee shall give written notice of
termination of the Agreement to each Holder and Certificate Insurer in the
manner set forth in Section 11.05 hereof.
Section 9.02. Optional Termination
(a) On any Master Servicer Remittance Date on or after the Initial
Optional Termination Date, Saxon or the Holders of a majority in Percentage
Interests of the Class of Certificates designated in the Trust Agreement (the
"Designated Class") may determine to purchase and may cause the purchase from
the Trust of all (but not fewer than all) Mortgage Loans and all property
theretofore acquired in respect of any Mortgage Loan by foreclosure, deed in
lieu of foreclosure, or otherwise then remaining in the Trust Estate at a price
equal to 100% of the aggregate Scheduled Principal Balances of the Mortgage
Loans (including any REO Property) as of the day of purchase minus amounts
remitted from the Master Servicer Custodial Account to the Asset Proceeds
Account representing collections of principal on the Mortgage Loans during the
current Remittance Period, plus one month's interest on such amount computed at
the Adjusted Pass-Through Rate, plus in all cases all accrued and unpaid
Servicing Fees and Master Servicing Fees plus any unpaid Reimbursement Amounts
plus the aggregate amount of any unreimbursed Advances and any Advances which a
Servicer or the Master Servicer has theretofore failed to remit; but in any
event such purchase amount shall be sufficient to retire all other Certificates
in full. In connection with such purchase, the Master Servicer shall remit to
the Trustee (or the Paying Agent on behalf of the Trustee) all amounts then on
deposit in the Master Servicer Custodial Account for deposit to the Asset
Proceeds Account, which deposit shall be deemed to have occurred immediately
preceding such purchase.
(b) If an election has been made to treat certain assets of the Trust as
a REMIC, in connection with any such purchase, Saxon or such Holders shall
direct the Trustee to adopt and the Trustee shall adopt, as to the REMIC, a plan
of complete liquidation as contemplated by Section 860F(a)(4) of the Code and as
prepared by the Master Servicer, and shall provide to the Trustee an Opinion of
Counsel experienced in federal income tax matters acceptable to the Trustee to
the effect that such purchase and liquidation constitutes, as to the REMIC, a
Qualified Liquidation. In addition, Saxon or such Holders shall provide to the
Trustee an Opinion of Counsel acceptable to the Trustee to the effect that such
purchase and liquidation does not constitute a preference payment pursuant to
the United States Bankruptcy Code.
(c) Promptly following any purchase described in this Section 9.02, the
Trustee will release the Trustee Mortgage Loan File to the Holders of the
Designated Certificates or otherwise upon their order.
Section 9.03. Optional Purchase
On any Distribution Date on or after the Initial Optional Termination
Date, the Holders of a majority in Percentage Interests of the Designated Class
may purchase the Certificates of all other Classes by depositing with the Paying
Agent on the preceding Master Servicer Remittance Date an amount equal to the
Certificate Principal Balance of such Certificates on such Distribution Date
plus interest thereon to such Distribution Date.
Section 9.04. Termination Upon Loss of REMIC Status
If a REMIC has been formed with respect to all or any portion of the
Trust Estate:
(a) Following a final determination by the Internal Revenue Service or
by a court of competent jurisdiction, in either case from which no appeal is
taken within the permitted time for such appeal, or if any appeal is taken,
following a final determination of such appeal from which no further appeal may
be taken, to the effect that the REMIC does not and will no longer qualify as a
REMIC pursuant to Section 860D of the Code (the "Final Determination"), at any
time on or after the date which is 30 calendar days following such Final
Determination (i) the Certificate Insurer or the Holders of a majority in
Percentage Interests of the Regular Certificates then outstanding with the
consent of the Certificate Insurer may direct the Trustee on behalf of the Trust
to adopt a plan of complete liquidation, as prepared by the Master Servicer, and
(ii) the Certificate Insurer may notify the Trustee of the Certificate Insurer's
determination to purchase from the Trust all (but not fewer than all) Mortgage
Loans and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure, or otherwise in respect of any Mortgage Loan then remaining in the
Trust Estate at a price equal to the sum of (x) the greater of (i) 100% of the
aggregate Scheduled Principal Balances of the Mortgage Loans as of the day of
purchase minus amounts remitted from the Master Servicer Custodial Account
representing collections of principal on the Mortgage Loans during the current
Remittance Period and (ii) the fair market value of such Mortgage Loans
(disregarding accrued interest), (y) one month's interest on such amount
computed at the Adjusted Pass-Through
49
<PAGE>
Rate and (z) the aggregate amount of any unreimbursed Advances and any Advances
which a Servicer or Master Servicer has theretofore failed to remit.
Upon receipt of such direction from the Certificate Insurer, the Trustee
shall notify the Servicers and the Holders of the Residual Certificates of such
election to liquidate or such determination to purchase, as the case may be (the
"Termination Notice"). The Holders of a majority of the Percentage Interest of
the Residual Certificates then Outstanding may, within 60 days from the date of
receipt of the Termination Notice (the "Purchase Option Period"), at their
option, purchase from the Trust all (but not fewer than all) Mortgage Loans and
all property theretofore acquired by foreclosure, deed in lieu of foreclosure,
or otherwise in respect of any Mortgage Loan then remaining in the Trust Estate
at a purchase price equal to the aggregate Scheduled Principal Balances of all
Mortgage Loans as of the date of such purchase, plus (a) one month's interest on
such amount at the Adjusted Pass-Through Rate, (b) the aggregate amount of any
unreimbursed Advances and unpaid Servicing Fees and Master Servicing Fees, (c)
any Advances which a Servicer or Master Servicer has theretofore failed to remit
and (d) any outstanding Reimbursement Amount.
If, during the Purchase Option Period, the Holders of the Residual
Certificates have not exercised the option described in the immediately
preceding paragraph, then upon the expiration of the Purchase Option Period (i)
if the Certificate Insurer or the Holders of a majority in Percentage Interests
of the Regular Certificates with the consent of the Certificate Insurer have
given the Trustee the direction described in clause (a)(i) above, the Trustee
shall sell the Mortgage Loans and reimburse the Servicers or Master Servicer for
unreimbursed Advances, Master Servicing Fees, and Servicing Fees and distribute
the remaining proceeds of the liquidation of the Trust Estate, each in
accordance with the plan of complete liquidation, such that, if so directed, the
liquidation of the Trust Estate, the distribution of the proceeds of the
liquidation and the termination of this Agreement occur no later than the close
of the 60th day, or such later day as the Certificate Insurer or Holders with
the consent of the Certificate Insurer shall permit or direct in writing, after
the expiration of the Purchase Option Period and (ii) if the Certificate Insurer
has given the Trustee notice of the Certificate Insurer's determination to
purchase the Trust Estate described in clause (a)(ii) above, the Certificate
Insurer shall, within 60 days, purchase all (but not fewer than all) Mortgage
Loans and all property theretofore acquired by foreclosure, deed in lieu of
foreclosure or otherwise in respect of any Mortgage Loan then remaining in the
Trust Estate. In connection with such purchase, the Master Servicer shall remit
to the Trustee (or the Paying Agent on behalf of the Trustee) all amounts then
on deposit in the Master Servicer Custodial Account for deposit to the Asset
Proceeds Account, which deposit shall be deemed to have occurred immediately
preceding such purchase.
(b) Following a Final Determination, the Holders of a majority in
Percentage Interests of the Residual Certificates then Outstanding may, at their
option and upon delivery to the Certificate Insurer of an Opinion of Counsel
experienced in federal income tax matters acceptable to the Certificate Insurer
selected by such Holders which opinion shall be reasonably satisfactory in form
and substance to the Certificate Insurer to the effect that the effect of the
Final Determination is to increase substantially the probability that the gross
income of the Trust will be subject to federal taxation, purchase from the Trust
all (but not fewer than all) Mortgage Loans and all property theretofore
acquired by foreclosure, deed in lieu of foreclosure, or otherwise in respect of
any Mortgage Loan then remaining in the Trust Estate at a purchase price equal
to the aggregate Scheduled Principal Balances of all Mortgage Loans as of the
date of such purchase, plus (a) one month's interest on such amount computed at
the Adjusted Pass-Through Rate, (b) the aggregate amount of unreimbursed
Advances, Servicing Fees and Master Servicing Fees, (c) the interest portion of
any Advances which a Servicer or Master Servicer has theretofore failed to remit
and (d) any outstanding Reimbursement Amount. In connection with such purchase,
the Master Servicer shall remit to the Trustee (or the Paying Agent on behalf of
the Trustee) all amounts then on deposit in the Master Servicer Custodial
Account for deposit to the Asset Proceeds Account, which deposit shall be deemed
to have occurred immediately preceding such purchase. The foregoing opinion
shall be deemed satisfactory unless the Certificate Insurer gives such Holders
notice that such opinion is not satisfactory within thirty days after receipt of
such opinion. In connection with any such purchase, such Holders shall direct
the Trustee to adopt a plan of complete liquidation acceptable to the
Certificate Insurer, as prepared by the Master Servicer and shall provide to the
Trustee and the Certificate Insurer an Opinion of Counsel experienced in federal
income tax matters to the effect that such purchase constitutes, as to the
REMIC, a Qualified Liquidation.
Section 9.05. Disposition of Proceeds
The Trustee (or the Paying Agent on behalf of the Trustee) shall deposit
the proceeds of any liquidation of the Trust Estate pursuant to this Article IX
to the Asset Proceeds Account for application as provided in the Trust
Agreement; provided, however, that any amounts representing unrecovered Advances
which the Master Servicer
50
<PAGE>
determined to be non-recoverable and unreimbursed Advances, accrued and unpaid
Master Servicing Fees, and Servicing Fees theretofore funded by a Servicer from
such Servicer's own funds shall be paid by the Trustee (or the Paying Agent on
behalf of the Trustee) to the Master Servicer or such Servicer, respectively,
from the proceeds of the Trust Estate.
ARTICLE X
REMIC TAX PROVISIONS
Section 10.01. REMIC Administration
(a) Unless otherwise specified in the Trust Agreement, the Trustee shall
elect (on behalf of each REMIC to be created) to have the Trust (or designated
assets thereof) treated as one or more REMICs on Form 1066 or such other
appropriate federal tax or information return for the taxable year ending on the
last day of the calendar year in which the Certificates are issued as well as on
any corresponding state tax or information return necessary to have the Trust
(or such assets) treated as one or more REMICs under state law.
(b) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of the Trust and each REMIC, including, but not limited to, any
professional fees or expenses related to (i) audits or any administrative or
judicial proceedings with respect to each REMIC that involve the Internal
Revenue Service or state tax authorities or (ii) the adoption of a plan of
complete liquidation.
(c) The Master Servicer shall prepare any necessary forms for election
as well as all the Trust's and each REMIC's federal and state tax and
information returns. At the request of the Master Servicer, the Trustee shall
sign and file such returns on behalf of each REMIC. The expenses of preparing
and filing such returns shall be borne by the Master Servicer.
(d) The Master Servicer shall perform all reporting and other tax
compliance duties that are the responsibility of the Trust and each REMIC under
the REMIC Provisions or state or local tax law. Among its other duties, if
required by the REMIC Provisions, the Master Servicer, acting as agent of each
REMIC, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any Disqualified Organization and (ii) to
the Trustee such information as is necessary for the Trustee to discharge its
obligations under the REMIC Provisions to report tax information to the
Certificateholders.
(e) Saxon, the Master Servicer, the Trustee (to the extent it has been
instructed by Saxon or the Master Servicer), and the Holders of the Residual
Certificates shall take any action or cause any REMIC to take any action
necessary to create or maintain the status of such REMIC as a REMIC under the
REMIC Provisions and shall assist each other as necessary to create or maintain
such status.
(f) Saxon, the Master Servicer, the Trustee (to the extent it has been
instructed by Saxon or the Master Servicer), and the Holders of the Residual
Certificates shall not take any action required by the Code or REMIC Provisions
or fail to take any action, or cause any REMIC to take any action or fail to
take any action, that, if taken or not taken, could endanger the status of any
such REMIC as a REMIC unless the Trustee and the Master Servicer have received
an Opinion of Counsel (at the expense of the party seeking to take or to fail to
take such action) to the effect that the contemplated action or failure to act
will not endanger such status.
(g) Unless otherwise provided in the Trust Agreement, any taxes that are
imposed upon the Trust or any REMIC by federal or state (including local)
governmental authorities (other than taxes paid by a party pursuant to Section
10.02 hereof or as provided in the following sentence) shall be allocated in the
same manner as Realized Losses are allocated. Any taxes imposed upon the Trust
or any REMIC by the jurisdiction (or any subdivision thereof) in which the
Corporate Trust Office of the Trustee is located that would not have been
imposed on the Trust or such REMIC in the absence of any legal or business
connection between the Trustee and such jurisdiction (or locality), shall be
paid by the Trustee and, notwithstanding anything to the contrary in the Trust
Agreement, such taxes shall be deemed to be part of the Trustee's cost of doing
business and shall not be reimbursable to the Trustee.
(h) Unless otherwise provided in the Trust Agreement, the Master
Servicer or an Affiliate shall acquire a Residual Certificate in each REMIC and
will act as the Tax Matters Person of each REMIC and perform various tax
administration functions of each REMIC as its agent. If the Master Servicer or
an Affiliate is unable for any reason to
51
<PAGE>
fulfill its duties as Tax Matters Person for a REMIC, the holder of the largest
Percentage Interest of the Residual Certificates in such REMIC shall become the
successor Tax Matters Person of such REMIC.
Section 10.02. Prohibited Activities
Except as otherwise provided in the Trust Agreement, neither Saxon, the
Master Servicer, the Holders of the Residual Certificates, nor the Trustee shall
engage in, nor shall the parties permit, any of the following transactions or
activities unless it has received (i) a Special Tax Opinion and (ii) a Special
Tax Consent from each of the Holders of the Residual Certificates (unless the
Special Tax Opinion specially provides that no REMIC-level tax will result from
the transaction or activity in question):
(i) the sale or other disposition of, or substitution for, any
Mortgage Loan except pursuant to (A) a foreclosure or default with
respect to such Mortgage Loan, (B) the bankruptcy or insolvency of any
REMIC, (C) the termination of any REMIC pursuant to Section 9.02 hereof
or (D) a substitution or purchase in accordance with Section 2.03
hereof;
(ii) the acquisition of any Mortgage Loan for the Trust after the
Closing Date except (A) during the three-month period beginning on the
Closing Date pursuant to a fixed price contract in effect on the Closing
Date that has been reviewed and approved by tax counsel acceptable to
the Master Servicer or (B) a substitution in accordance with Section
2.03 hereof;
(iii) the sale or other disposition of any investment in the
Asset Proceeds Account at a gain;
(iv) the sale or other disposition of any asset held in a Reserve
Fund for a period of less than three months (a "Short-Term Reserve Fund
Investment") if such sale or other disposition would cause 30% or more
of a REMIC's income from such Reserve Fund for the taxable year to
consist of gain from the sale or disposition of Short-Term Reserve Fund
Investments;
(v) the withdrawal of any amounts from any Reserve Fund except
(A) for the distribution pro rata to the Holders of the Residual
Certificates or (B) to provide for the payment of expenses of the
related REMIC or amounts payable on the Certificates in the event of
defaults or late payments on the Mortgage Loans or lower than expected
returns on funds held in the Asset Proceeds Account, as provided under
section 860G(a)(7) of the Code;
(vi) the acceptance of any contribution to the Trust except (A) a
cash contribution received during the three month period beginning on
the Closing Date, (B) any transfer of funds from a Mortgagor Bankruptcy
Fund, Special Hazard Fund or Interest Fund to the Asset Proceeds
Account, (C) a cash contribution to a Reserve Fund owned by a REMIC that
is made pro rata by the Holders of the Residual Certificates, (D) a cash
contribution to facilitate a Terminating Purchase that is made within
the 90-day period beginning on the date on which a plan of complete
liquidation is adopted pursuant to Section 9.04(a)(A) hereof, or (E) any
other cash contribution approved by the Master Servicer after
consultation with tax counsel; or
(vii) any other transaction or activity that is not
contemplated by the Trust Agreement.
Any party causing the Trust to engage in any of the activities
prohibited in this Section 10.02 shall be liable for the payment of any tax
imposed on the Trust pursuant to section 860F(a)(1) or 860G(d) of the Code as a
result of the Trust engaging in such activities.
52
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment of Trust Agreement
The Trust Agreement may be amended or supplemented from time to time by
Saxon, the Master Servicer and the Trustee, subject to Section 1.03 hereof, but
without the consent of any of the Certificateholders (i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein which may be inconsistent
with any other provisions herein, (iii) to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or appropriate to maintain
the qualification of the Trust (or certain assets thereof) either as a REMIC or
as a grantor trust, as applicable under the Code at all times that any
Certificates are outstanding or (iv) to make any other provisions with respect
to matters or questions arising under the Trust Agreement or matters arising
with respect to the Trust that are not covered by the Trust Agreement, provided
that such action shall not adversely affect in any material respect the
interests of any Certificateholder. Any such amendment or supplement shall be
deemed not to adversely affect in any material respect any Certificateholder if
there is delivered to the Trustee written notification from each Rating Agency
to the effect that such amendment or supplement will not cause such Rating
Agency to reduce the then current rating assigned to such Certificates.
The Trust Agreement may also be amended from time to time by Saxon, the
Master Servicer and the Trustee, subject to Section 1.03 hereof, and with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights of such Class, or (iii) reduce the aforesaid percentage of
Certificates the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all such Certificates then outstanding.
For purposes of the giving or withholding of consents pursuant to this Section
11.01, Certificates registered in the name of Saxon or an Affiliate shall be
entitled to Voting Rights with respect to matters affecting such Certificates.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 11.02. Recordation of Agreement; Counterparts
To the extent permitted by applicable law, the Trust Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any of or
all the properties subject to the Security Instruments are situated, and in any
other appropriate public recording office or elsewhere, only if such recording
is deemed necessary by an Opinion of Counsel (which shall not be an expense of
the Master Servicer or the Trustee) to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of the Trust Agreement
as herein provided and for other purposes, the Trust Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03. Limitation of Rights of Certificateholders
The death or incapacity of any Certificateholder shall not operate to
terminate the Trust Agreement or the Trust, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
53
<PAGE>
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to the Trust Agreement pursuant to any provision thereof.
No Certificateholder shall have any right by virtue of any provision of
the Trust Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to the Trust Agreement unless (i) such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and (ii) the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee under the Trust Agreement and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more
Certificateholders shall have any right in any manner whatever by virtue of any
provision of the Trust Agreement to affect, disturb or prejudice the rights of
any other Certificateholders, or to obtain or seek to obtain priority over or
preference to any other Certificateholders or to enforce any right under the
Trust Agreement, except in the manner therein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.04. Governing Law
The Trust Agreement shall be construed in accordance with and governed
by the laws of the State applicable to agreements made and to be performed
therein.
Section 11.05. Notices
All demands and notices under the Trust Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service, to the
party concerned at its address set forth in the Trust Agreement, or such other
address or telecopy number as may hereafter be furnished to each party to the
Trust Agreement in writing by any such party. Any notice required or permitted
to be mailed to a Certificateholder shall be given by first-class mail, postage
prepaid, or by express delivery service, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in the Trust Agreement shall be conclusively presumed
to have been duly given, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above. A copy of any
notice given hereunder to any other party shall be delivered to the Trustee.
Section 11.06. Severability of Provisions
If any one or more of the covenants, agreements, provisions or terms of
the Trust Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of the Trust Agreement and
shall in no way affect the validity or enforceability of the other provisions of
the Trust Agreement or of the Certificates or the rights of the
Certificateholders.
Section 11.07. Sale of Mortgage Loans
It is the express intent of Saxon and the Trustee that the conveyance of
the Mortgage Loans by Saxon to the Trustee pursuant to the Trust Agreement be
construed as a sale of the Mortgage Loans by Saxon to the Trustee for the
benefit of the Certificateholders. It is, further, not the intention of Saxon
and the Trustee that such conveyance be deemed a pledge of the Mortgage Loans by
Saxon to the Trustee for the benefit of the Certificateholders to secure a debt
or other obligation of Saxon. Nevertheless, if, notwithstanding the intent of
the parties, the Mortgage Loans are held to continue to be property of Saxon
then (i) the Trust Agreement shall be deemed to be a security agreement within
the meaning of Article 9 of the UCC, (ii) the conveyance by Saxon provided for
in the Trust Agreement shall be deemed to
54
<PAGE>
be a grant by Saxon to the Trustee for the benefit of the Certificateholders of
a security interest in all Saxon's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including, but not limited to, all amounts, other than investment
earnings, from time to time held or invested in the Master Servicer Custodial
Account or Asset Proceeds Account, whether in the form of cash, instruments,
securities or other property, (iii) the possession by the Trustee or the
Custodian of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the UCC of the State and (iv)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Saxon and the Trustee
(to the extent it has been instructed by Saxon or the Master Servicer) shall, to
the extent consistent with the Trust Agreement, take such actions as may be
necessary to ensure that, if the Trust Agreement were deemed to create a
security interest in the Mortgage Loans, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Trust Agreement.
Section 11.08. Notice to Rating Agency
(a) The Trustee shall use its best efforts promptly to provide notice to
each Rating Agency with respect to each of the following of which it has actual
knowledge:
(i) any material change or amendment to the Trust Agreement or
any agreement assigned to the Trust;
(ii) the occurrence of any Event of Default involving the
Master Servicer that has not been cured or any recommendation by the
Master Servicer that a Servicing Agreement with a Servicer be
terminated;
(iii) the resignation, termination or merger of Saxon, the
Master Servicer, the Trustee or any Servicer;
(iv) the purchase or substitution of Mortgage Loans pursuant to
Section 2.03 hereof;
(v) the final payment to Certificateholders;
(vi) any change in the location of any Master Servicer
Custodial Account, Reserve Fund or Asset Proceeds Account;
(vii) any event that would result in the inability of the
Servicer or the Master Servicer to make Advances regarding delinquent
Mortgage Loans or the inability of the Trustee to make any such Advance
if it is serving as the Master Servicer pursuant to Section 7.02 hereof;
(viii) any change in applicable law that would require an
Assignment of a Security Instrument, not previously recorded pursuant to
Section 2.01 hereof, to be recorded in order to protect the right, title
and interest of the Trustee in and to the related Mortgage Loan or, in
case a court should recharacterize the sale of the Mortgage Loans as a
financing, to perfect a first priority security interest in favor of the
Trustee in the related Mortgage Loan.
(b) The Master Servicer shall promptly notify the Trustee of any of the
events listed in Section 11.08(a) of which it has actual knowledge. In addition,
the Trustee shall promptly furnish to each Rating Agency at its address set
forth in the Trust Agreement copies of the following:
(i) each report to Certificateholders described in Section
4.01 hereof; and
(ii) each Annual Compliance Statement.
(c) Any notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service, to each
Rating Agency at the address specified in the Trust Agreement.
55
<PAGE>
Exhibit A-1
FORM OF INITIAL CERTIFICATION
[____________], 199[_]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
[TRUSTEE]
[-------------------------]
[-------------------------]
Attention: [____________________]
[MASTER SERVICER]
[-------------------------]
[-------------------------]
Attention: [____________________]
Trust Agreement, dated as of [____________], 199[_]
among Saxon Asset Securities Company,
[____________________], as Master Servicer,
and [____________________]_, as Trustee,
Mortgage Loan Asset Backed Certificates, Series 199[_]-[_]
Ladies and Gentlemen:
In accordance with Section 2.02 of the Standard Terms to the
above-captioned Trust Agreement, the Custodian hereby certifies that, as to each
mortgage loan listed in the Mortgage Loan Schedule [to the Trust Agreement
referred to above] [to the Subsequent Sales Agreement dated [ ], 199[ ], has
reviewed the Trustee Mortgage Loan File and determined that, except as noted on
the Schedule of Exceptions attached hereto: (i) all documents required to be
included in the Trustee Mortgage Loan File (as set forth in Section 2.01 of the
Standard Terms) are in its possession; (ii) such documents have been reviewed by
it and appear regular on their face and relate to such Mortgage Loan; and (iii)
based on its examination, or the examination by a Custodian on its behalf, and
only as to such documents, the information set forth on such Mortgage Loan
Schedule accurately reflects the information set forth in the Trustee Mortgage
Loan File. The Custodian further certifies that its review of each Trustee
Mortgage Loan File included each of the procedures listed in clause (b) of
Section 2.02 of the Standard Terms.
The Custodian further certifies as to each Mortgage Note that:
(1) except for the endorsement required pursuant to clause (a) of the
definition of Trustee Mortgage Loan File, the Mortgage Note, on the face or the
reverse side(s) thereof, does not contain evidence of any unsatisfied claims,
liens, security interests, encumbrances or restrictions on transfer; and
(2) the Mortgage Note bears an endorsement (which appears to be an
original) as required pursuant to clause (a) of the definition of Trustee
Mortgage Loan File.
Except as described herein, neither the Trustee nor any Custodian on its
behalf has made an independent examination of any documents contained in any
Trustee Mortgage Loan File. Neither the Trustee nor the Custodian makes any
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in any Trustee Mortgage Loan
File for any of the Mortgage Loans listed on the Mortgage Loan Schedule to the
Trust Agreement, (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan or (iii) whether any Trustee Mortgage Loan
File should include any surety or guaranty agreement, Note Assumption Rider,
buydown agreement, assumption agreement, modification agreement, written
assurance or substitution agreement.
A-1-1
<PAGE>
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Trust Agreement.
[CUSTODIAN],
as custodian
By:____________________________
Title:_________________________
A-1-2
<PAGE>
Exhibit A-2
FORM OF FINAL CERTIFICATION
[____________], 199[_]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
[TRUSTEE]
[-------------------------]
[-------------------------]
Attention: [____________________]
[MASTER SERVICER]
[-------------------------]
[-------------------------]
Attention: [____________________]
Trust Agreement, dated as of [____________], 199[_]
among Saxon Asset Securities Company,
[____________________], as Master Servicer,
and [____________________]_, as Trustee,
Mortgage Loan Asset Backed Certificates, Series 199[_]-[_]
Ladies and Gentlemen:
In accordance with Section 2.02 of the Standard Terms to the
above-captioned Trust Agreement, the Custodian hereby certifies that, except as
noted on the Schedule of Exceptions attached hereto, for each Mortgage Loan
listed in the Mortgage Loan Schedules (other than any Mortgage Loan paid in full
or listed on the attachment hereto) it has received a complete Trustee Mortgage
Loan File which includes each of the documents required to be included in the
Trustee Mortgage Loan File.
Except as specifically required in the above-captioned Trust Agreement,
neither the Trustee nor any Custodian on its behalf has made an independent
examination of any documents contained in any Trustee Mortgage Loan File.
Neither the Trustee nor the Custodian makes any representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in any Trustee Mortgage Loan File for any of the Mortgage
Loans listed on the Mortgage Loan Schedule to the Trust Agreement, (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Trustee Mortgage Loan File should include any surety
or guaranty agreement, Note Assumption Rider, buydown agreement, assumption
agreement, modification agreement, written assurance or substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Trust Agreement.
[CUSTODIAN],
as custodian
By:____________________________
Title:_________________________
A-2-1
<PAGE>
Exhibit B
FORM OF RECORDATION REPORT
[____________], 199[_]
[MASTER SERVICER]
[-------------------------]
[-------------------------]
Attention: [____________________]
[TRUSTEE]
[-------------------------]
[-------------------------]
Attention: [____________________]
Trust Agreement, dated as of [____________], 199[_]
among Saxon Asset Securities Company,
[____________________], as Master Servicer,
and [____________________]_, as Trustee,
Mortgage Loan Asset Backed Certificates, Series 199[_]-[_]
Ladies and Gentlemen:
In accordance with Section 2.02(e) of the Standard Terms, the Custodian
hereby notifies you that, as of the date hereof with respect to the following
Mortgage Loans, it has not received the indicated documents.
If a Security Instrument for any Mortgage Loan has not been recorded and
the original recorded Security Instrument or a copy of such recorded Security
Instrument with such evidence of recordation certified to be true and correct by
the appropriate governmental recording office has not been delivered to the
Trustee (or to a Custodian on its behalf), the Seller or Servicer may be
required to purchase such Mortgage Loan from the Trustee if such defect
materially and adversely affects the value of the Mortgage Loan or the interest
of the Trust therein.
[If an Assignment to the Trustee or a Custodian on its behalf, as
applicable, of the Seller's interest in a Security Instrument has not been
recorded within one year of the Closing Date, the Seller or Servicer shall be
required to (i) purchase the related Mortgage Loan from the Trustee or (ii) if
there have been no defaults in the Monthly Payments on such Mortgage Loan,
deposit an amount equal to the Purchase Price into an escrow account maintained
by the Trustee.]
Documents Not Received
_____________________________________
Original Recorded
Saxon Loan Number Original Recorded Assignment of
Security Instrument Security Instrument
- ------------------ ----------------------- ---------------------
or certified copy thereof or certified copy thereof
*Also required with regard to any intervening Assignments.
[TRUSTEE],
as Trustee
By:____________________________
Title:_________________________
B-1
<PAGE>
Exhibit C
FORM OF REMITTANCE REPORT
Saxon Asset Securities Company
Trust: Mortgage Loan Asset Backed Certificates, Series 199[_]-[_]
Distribution Date: [____________], 199[_]
Reporting Month: [____________] 199[_]
The following class, series and collateral information will be
included on each Remittance Report, as appropriate:
<TABLE>
<CAPTION>
Class Level Collateral Level Series Level
- ---------- ----------------- ------------
<S> <C>
Class Name Asset Proceeds Account - Scheduled Principal
Pass-Through Rate Deposits and Withdrawals Unscheduled Principal
Beginning Balance Balance Information for Scheduled Interest
Interest Distribution Other Accounts Beginning Loan Count
Principal Distribution Advances on Delinquencies Ending Loan Count
Realized Losses Beginning Balance Realized Losses
Ending Balance Interest Distribution Weighted Average Maturity
Aggregate Realized Losses Principal Distribution (WAM)
Original Balance Realized Losses Weighted Average
Record Date Ending Balance Mortgage Note Rate
Interest Distribution Factor Total Distribution Total Distribution
Principal Distribution Factor Aggregate Realized Losses Weighted Average Net Rate
Remaining Principal Factor Original Balance Weighted Average Pass-
Scheduled Principal Remaining Principal Factor Through Rate
Unscheduled Principal Scheduled Principal Delinquency Statistics
Current Interest Unscheduled Principal - 30, 60, and 90 day
Recovery/(Shortfall) Current Interest delinquencies; foreclosures
Accretion Recovery/(Shortfall) and REO's
Accretion
</TABLE>
C-1
<PAGE>
Exhibit D
FORM OF RULE 144A AGREEMENT-QIB CERTIFICATION
SAXON ASSET SECURITIES COMPANY
MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 199[_]-[_], CLASS [___]
[____________], 199[_]
[TRUSTEE]
[-------------------------]
[-------------------------]
Attention: [____________________]
[MASTER SERVICER] [CERTIFICATE REGISTRAR]
[-------------------------]
[-------------------------]
Attention: [____________________]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
Certificates (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Saxon, the Master Servicer,
the Trustee and the Trust as follows:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "Securities Act") and has completed the form of certification to
that effect attached hereto as Annex A1 (if the Transferee is not a registered
investment company) or Annex A2 (if the Transferee is a registered investment
company). The Transferee is aware that the sale to it is being made in reliance
on Rule 144A.
2. The Transferee understands that the Purchased Certificates have not
been registered under the Securities Act or registered or qualified under any
state securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the Securities Act and under applicable state
law or unless an exemption from such registration is available. The Transferee
further understands that neither Saxon, the Master Servicer, the Certificate
Registrar, the Paying Agent, the Trustee nor the Trust is under any obligation
to register the Purchased Certificates or make an exemption from such
registration available.
3. The Transferee is acquiring the Purchased Certificates for its own
account or for the account of a "qualified institutional buyer," and understands
that such Purchased Certificates may be resold, pledged or transferred only (a)
to a person reasonably believed to be such a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (b) pursuant to another exemption from registration
under the Securities Act and under applicable state securities laws. In
addition, such transfer may be subject to additional restrictions, as set forth
in Section 5.05 of the Standard Terms to the Trust Agreement.
4. The Transferee has been furnished with all information that it
requested regarding (a) the Purchased Certificates and distributions thereon and
(b) the Trust Agreement referred to below.
5. If applicable, the Transferee has complied or will comply in all
material respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement, dated as of
[____________], 199[_], which incorporates by reference the Standard Terms
thereto,
D-1
<PAGE>
among Saxon Asset Securities Company, the Master Servicer and the Trustee,
pursuant to which the Purchased Certificates were issued.
IN WITNESS WHEREOF, the undersigned has caused this Rule 144A
Agreement--QIB Certification to be executed by a duly authorized representative
this [____] day of [____________], 199[_].
[TRANSFEREE]
By:____________________________
Title:_________________________
D-2
<PAGE>
Annex A1 to Exhibit D
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
------------------------------------------------------
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Transferee.
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), because (a) the Transferee owns and/or
invests on a discretionary basis at least $100,000,000 in securities or, if the
Transferee is a dealer, the Transferee owns and/or invests on a discretionary
basis at least $10,000,000 in securities. The Transferee owned and/or invested
on a discretionary basis at least $[____________] in securities (except for the
excluded securities referred to in paragraph 3 below) as of [_____________],
199[_] [specify a date on or since the end of the Transferee's most recently
ended fiscal year] (such amount being calculated in accordance with Rule 144A)
and (b) the Transferee meets the criteria listed in the category marked below.
_____ Corporation. etc. The Transferee is an organization described
in Section 501(c) (3) of the Internal Revenue Code of 1986, as
amended, a corporation (other than a bank as defined in
Section 3(a) (2) of the Securities Act or a savings and loan
association or other similar institution referenced in Section
3(a) (5) (A) of the Securities Act), a partnership, or a
Massachusetts or similar business trust.
____ Bank. The Transferee (a) is a national bank or banking
institution as defined in Section 3(a) (2) of the Securities
Act and is organized under the laws of a state, territory or
the District of Columbia. The business of the Transferee is
substantially confined to banking and is supervised by the
appropriate state or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements as of a
date not more than 16 months preceding the date of this
certification in the case of a U.S. bank, and not more than 18
months preceding the date of this certification in the case of
a foreign bank or equivalent institution, a copy of which
financial statements is attached hereto.
_____ Saving and Loan. The Transferee is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution referenced in
Section 3(a) (5) (A) of the Securities Act. The Transferee is
supervised and examined by a state or federal authority having
supervisory authority over any such institutions or is a
foreign savings and loan association or equivalent institution
and has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements as of a
date not more than 16 months preceding the date of this
certification in the case of a U.S. savings and loan
association or similar institution, and not more than 18
months preceding the date of this certification in the case of
a foreign savings and loan association or equivalent
institution, a copy of which financial statements is attached
hereto.
_____ Broker-dealer. The Transferee is a dealer registered
pursuant to Section 15 of the Certificates Exchange Act
of 1934, as amended (the "1934 Act").
_____ Insurance Company. The Transferee is an insurance company as
defined in Section 2(13) of the Securities Act, whose primary
and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies
and which is subject to supervision by the insurance
commissioner or a similar official or agency of a state,
territory or the District of Columbia.
_____ State or Local Plan. The Transferee is a plan established
and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees.
_____ ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Certificate Act of 1974, as amended.
_____ Investment Adviser. The Transferee is an investment
adviser registered under the Investment Advisers Act of
1940, as amended.
D-1-1
<PAGE>
_____ Other. The Transferee qualifies as a "qualified institutional
buyer" as defined in Rule 144A on the basis of facts other
than those listed in any of the entries above. If this
response is marked, the Transferee must certify on additional
pages, to be attached to this certification, to facts that
satisfy the Servicer that the Transferee is a "qualified
institutional buyer" as defined in Rule 144A.
3. The term "securities" as used herein does not include (a) securities
of issuers that are affiliated with the Transferee, (b) securities constituting
the whole or part of an unsold allotment to or subscription by the Transferee,
if the Transferee is a dealer, (c) bank deposit notes and certificates of
deposit, (d) loan participations, (e) repurchase agreements, (f) securities
owned but subject to a repurchase agreement and (g) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Transferee, the Transferee used
the cost of such securities to the Transferee and did not include any of the
securities referred to in the preceding paragraph. Further, in determining such
aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the 1934 Act.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Purchased
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be made in reliance on Rule
144A.
6. Will the Transferee be purchasing YES NO
the Purchased Certificates only for the Transferee's own account?
If the answer to the foregoing question is "NO", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate
account) in reliance on Rule 144A, the Transferee will only purchase
for the account of a third party that at the time is a "qualified
institutional buyer" within the meaning of Rule 144A. In addition, the
Transferee agrees that the Transferee will not purchase securities for
a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate
steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer"
set forth in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Purchased
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
D-1-2
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this [____] day of
[____________], 199[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
Saxon Asset Securities Company,
Mortgage Loan Asset Backed Certificates, Series 199[_]-[_],
Class [___]
D-1-3
<PAGE>
Annex A2 to Exhibit D
TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES
----------------------------------------------------
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Purchased Certificates (the 'Transferee") or, if the Transferee is part of a
Family of Investment Companies (as defined in paragraph 3 below), is an officer
of the related investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), because (a) the Transferee is an investment
company (a "Registered Investment Company") registered under the Investment
Company Act of 1940, as amended (the "1940 Act") and (b) as marked below, the
Transferee alone, or the Transferee's Family of Investment Companies, owned at
least $100,000,000 in securities (other than the excluded securities referred to
in paragraph 4 below) as of [____________], 199[_] [specify a date on or since
the end of the Transferee's most recently ended fiscal year]. For purposes of
determining the amount of securities owned by the Transferee or the Transferee's
Family of Investment Companies, the cost of such securities to the Transferee or
the Transferee's Family of Investment Companies was used.
_____ The Transferee owned $[____________] in securities (other than
the excluded securities referred to in paragraph 4 below) as
of the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
_____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $[____________] in securities
(other than the excluded securities referred to in paragraph 4
below) as of the end of the Transferee's most recent fiscal
year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means two
or more Registered Investment Companies except for a unit investment trust whose
assets consist solely of shares of one or more Registered Investment Companies
(provided that each series of a "series company, as defined in Rule 18f-2 under
the 1940 Act, shall be deemed to be a separate investment company) that have the
same investment adviser (or, in the case of a unit investment trust, the same
depositor) or investment advisers (or depositors) that are affiliated (by virtue
of being majority-owned subsidiaries of the same parent or because one
investment adviser is a majority-owned subsidiary of the other).
4. The term "securities" as used herein does not include (a) securities
of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (b) bank deposit notes and
certificates of deposit, (c) loan participations, (d) repurchase agreements, (e)
securities owned but subject to a repurchase agreement and (f) currency,
interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Purchased Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
D-2-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this [____] of [____________],
199[_].
[TRANSFEREE OR ADVISOR]
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
Saxon Asset Securities Company,
Mortgage Loan Asset Backed Certificates, Series 199[_]-[_],
Class [___]
IF AN ADVISER:
Print Name of Transferee
Date:__________________________
D-2-2
<PAGE>
Exhibit E
FORM OF TRANSFEREE AGREEMENT
SAXON ASSET SECURITIES COMPANY
MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 199[_]-[_], CLASS [___]
[____________], 199[_]
[TRUSTEE]
[-------------------------]
[-------------------------]
Attention: [____________________]
[MASTER SERVICER] [CERTIFICATE REGISTRAR]
[-------------------------]
[-------------------------]
Attention: [____________________]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
Certificates (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Saxon, the Master Servicer,
the Trustee and the Trust as follows:
1. Representations and Warranties. The Transferee represents and
warrants:
(a) The Transferee is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the
Transferee is organized, is authorized to invest in the Purchased
Certificates and to enter into this Agreement, and has duly executed
and delivered this Agreement.
(b) The Transferee is acquiring the Purchased Certificates for
its own account as principal and not with a view to the distribution of
the Purchased Certificates, in whole or in part, in violation of
Section 5 of the Securities Act of 1933, as amended (the "Securities
Act").
(c) The Transferee is an "Accredited Investor" as defined in
Rule 501(a) (1), (2), (3) or (7) of Regulation D under the Securities
Act.
(d) The Transferee has knowledge in financial and business
matters and is capable of evaluating the merits and risks of an
investment in the Purchased Certificates; the Transferee has sought
such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision; and the Transferee is able to
bear the economic risk of an investment in the Purchased Certificates
and can afford a complete loss of such investment;
(e) The Transferee confirms that Saxon has made available to
the Transferee the opportunity to ask questions of, and receive answers
from, Saxon concerning Saxon, the Trust, the purchase by the Transferee
of the Purchased Certificates and all matters relating thereto, and to
obtain additional information relating thereto that Saxon possesses or
can acquire without unreasonable effort or expense.
2. Covenants. The Transferee Covenants:
(a) The Transferee will not make a public offering of the
Purchased Certificates, and will not reoffer or resell the Purchased
Certificates in a manner that would render the issuance and sale of the
Purchased
E-1
<PAGE>
Certificates, whether considered together with the resale or otherwise,
a violation of the Securities Act, or any state securities or "Blue
Sky" laws or require registration pursuant thereto;
(b) The Transferee agrees that, in its capacity as holder of
the Purchased Certificates, it will assert no claim or interest in the
Mortgage Loans by reason of owning the Purchased Certificates other
than with respect to amounts that may be properly and actually payable
to the Transferee pursuant to the terms of the Trust Agreement and the
securities; and
(c) If applicable, the Transferee will comply in all material
respects with respect to the Purchased Certificates with applicable
regulatory guidelines relating to the ownership of mortgage derivative
products.
3. Transfer Restrictions.
(a) The Transferee understands that the Purchased Certificates
have not been registered under the Securities Act or registered or
qualified under any state securities laws and that no transfer may be
made unless the Purchased Certificates are registered under the
Securities Act and under applicable state law or unless an exemption
from such registration is available. If so requested by the Master
Servicer or the Trustee, the Transferee and the transferor shall
certify to Saxon, the Master Servicer and the Trustee as to the factual
basis for the registration or qualification exemption relied upon. The
Transferee further understands that neither Saxon, the Master Servicer,
the Trustee nor the Trust is under any obligation to register the
Purchased Certificates or make an exemption from such registration
available.
(b) In the event that the transfer is to be made within three
years of the date the Purchased Certificates were acquired by a
non-Affiliate of Saxon from Saxon or an Affiliate of Saxon, the Master
Servicer or the Trustee may require an Opinion of Counsel (which shall
not be an expense of Saxon, the Master Servicer or the Trustee) that
such transfer is not required to be registered under the Securities Act
or state securities laws.
(c) Any Certificateholder desiring to effect a transfer shall,
and does hereby agree to, indemnify Saxon, the Master Servicer and the
Trustee against any liability that may result if the transfer is not
exempt under federal or applicable state securities laws.
(d) The transfer of the Certificates may be subject to
additional restrictions, as set forth in Section 5.05 of the Standard
Terms of the Trust Agreement.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement, dated as of
[____________], 199[_], which incorporates by reference the Standard Terms
thereto, among Saxon Asset Securities Company, the Master Servicer and the
Trustee, pursuant to which the Purchased Certificates were issued.
E-2
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Transferee
Agreement to be executed by its duly authorized representative as of the [____]
day of [____________], 199[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
E-3
<PAGE>
Exhibit F
FORM OF BENEFIT PLAN AFFIDAVIT
Re: Saxon Asset Securities Company
Series 199[_]-[_] Trust (the "Trust")
Mortgage Loan Asset Backed Certificates, Class [___]
STATE OF [____________]
ss:
CITY OF [_____________]
Under penalties of perjury, I, the undersigned, declare that, to the
best of my knowledge and belief, the following representations are true,
correct, and complete.
1. I am a duly authorized officer of [____________] (the "Purchaser"),
whose taxpayer identification number is [____________], and on behalf of which I
have the authority to make this affidavit.
2. That the Purchaser is acquiring a Class [___] Certificate
representing an interest in the Trust, certain assets of which one or more real
estate mortgage investment conduit ("REMIC") elections are to be made under
Section 860D of the Internal Revenue Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) (A) is not a Plan Investor and (B) either (I) is not an
insurance company or (II) is an insurance company, in which case none
of the funds used by the Purchaser in connection with its purchase of
the Certificates constitute plan assets as defined in the Plan Asset
Regulations ("Plan Assets") and its purchase of the Certificates shall
not result in the Certificates or the assets of the Trust being deemed
to be Plan Assets;
(ii) is an insurance company and either (A) represents that
the funds used to purchase the Certificates are held in an "insurance
company pooled separate account" within the meaning of United States
Department of Labor Prohibited Transaction Class Exemption 90-1 ("PTCE
90-1") and that each of the applicable conditions set forth in PTCE
90-1 are met with respect to the purchase and holding of the
Certificates, or (B) represents that the funds used to purchase the
Certificates are held in an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60") and that each of the applicable
conditions set forth in PTCE 95-60 are met with respect to the purchase
and holding of the Certificates; or
(iii) has provided a Benefit Plan Opinion, obtained at the
Transferee's expense.
All capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Trust Agreement, dated as of
[____________], 199[_], which incorporates by reference the Standard Terms
thereto.
F-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Benefit Plan
Affidavit to be executed by its duly authorized representative as of the [____]
day of [____________], 199[_].
[PURCHASER]
By:____________________________
Name:__________________________
Title:_________________________
Personally appeared before me [____________________], known or proved
to me to be the same person who executed the foregoing instrument and to be a
[____________________] of the Purchaser, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Purchaser.
Subscribed and sworn before me this [____] day of [____________],
199[_].
------------------------------
Notary Public
My commission expires the [____] day of [____________], 199[_].
F-2
<PAGE>
Exhibit G
FORM OF RESIDUAL TRANSFEREE AGREEMENT
SAXON ASSET SECURITIES COMPANY
MORTGAGE LOAN ASSET BACKED CERTIFICATES, SERIES 199[_]-[_], CLASS [R]
[____________], 199[_]
[TRUSTEE]
[-------------------------]
[-------------------------]
Attention: [____________________]
[MASTER SERVICER] [CERTIFICATE REGISTRAR]
[-------------------------]
[-------------------------]
Attention: [____________________]
Saxon Asset Securities Company
4880 Cox Road
Glen Allen, Virginia 23060
Attention: [____________________]
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
Certificates (the "Residual Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Saxon, the Master Servicer,
the Trustee, and the Trust as follows:
1. Representations and Warranties. The Transferee represents and
warrants:
(a) The Transferee's taxpayer identification number is as
set forth on the signature page hereof;
(b) The Transferee is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the
Transferee is organized, is authorized to invest in the Residual
Certificates and to enter into this Agreement, and has duly executed
and delivered this Agreement;
(c) The Transferee represents that (i) it understands that the
Residual Certificates represent for federal income tax purposes a
"residual interest" in one or more real estate mortgage investment
conduits (each, a "REMIC") and that, as the holder of the Residual
Certificates, it will be required to take into account, in determining
its taxable income, its pro rata share of the taxable income of each
such REMIC, (ii) it understands that it may incur federal income tax
liabilities with respect to the Residual Certificates in excess of any
cash flows generated by such Residual Certificates, (iii) it has the
financial wherewithal and intends to pay any tax imposed on the income
that it derives from the Certificates as they become due, and (iv) it
has historically paid its debts as they became due and intends to pay
its debts as they become due in the future;
(d) The Transferee (i) has knowledge in financial and business
matters and is capable of evaluating the merits and risks of an
investment in the Residual Certificates, (ii) has sought such
accounting, legal, and tax advice as it has considered necessary to
make an informed investment decision, and (iii) is able to bear the
economic risk of an investment in the Residual Certificates and can
afford a complete loss of such investment;
*(e) The Transferee is acquiring the Residual Certificates for
its own account as principal and not with a view to the resale or
distribution thereof, in whole or in part, in violation of Section 5 of
the Securities Act of 1933, as amended (the "Securities Act"); and
*(f) The Transferee confirms that Saxon has made available to
the Transferee the opportunity to ask questions of, and receive answers
from, Saxon concerning Saxon, the Trust, the purchase by the Transferee
G-1
<PAGE>
of the Residual Certificates and all matters relating thereto, and to
obtain additional information relating thereto that Saxon possesses or
can acquire without unreasonable effort or expense.
2. Covenants. The Transferee covenants:
*(a) The Transferee will not make a public offering of the
Residual Certificates, and will not reoffer or resell the Residual
Certificates in a manner that would render the issuance and sale of the
Residual Certificates whether considered together with the resale or
otherwise, a violation of the Securities Act, or any state securities
or "Blue Sky" laws or require registration pursuant thereto;
(b) The Transferee agrees that, in its capacity as a holder of
the Residual Certificates, it will assert no claim or interest in the
Mortgage Loans by reason of owning the Residual Certificates other than
with respect to amounts that may be properly and actually payable to
the Transferee pursuant to the terms of the Trust Agreement and the
Certificates;
(c) If applicable, the Transferee will comply with respect to
the Residual Certificates in all material respects with applicable
regulatory guidelines relating to the ownership of mortgage derivative
products;
(d) Upon notice thereof, the Transferee agrees to any future
amendment to the provisions of the Trust Agreement relating to the
transfer of the Residual Certificates (or any interest therein) that
counsel to Saxon or the Trust may deem necessary to ensure that any
such transfer will not result in the imposition of any tax on the
Trust;
(e) The Transferee hereby agrees that the Master Servicer or
an affiliate thereof will (i) supervise or engage in any action
necessary or advisable to preserve the status of each related REMIC as
a REMIC, (ii) be, and perform the functions of, each such REMIC's tax
matters person ("TMP"), and (iii) employ on a reasonable basis counsel,
accountants, and professional assistance to aid in the preparation of
tax returns or the performance of the above;
(f) The Transferee hereby agrees to cooperate with the TMP and
to take any action required of it by the REMIC Provisions in order to
create or maintain the REMIC status of each related REMIC;
(g) The Transferee hereby agrees that it will not take any
action that could endanger the REMIC status of any related REMIC or
result in the imposition of tax on any such REMIC unless counsel for,
or acceptable to, the TMP has provided an opinion that such action will
not result in the loss of such REMIC status or the imposition of such
tax, as applicable;
(h) The Transferee hereby agrees to be bound by all the
provisions of the Trust Agreement applicable to the holders of a
Residual Certificate including, but not limited to, Section 5.05(c) of
the Standard Terms to the Trust Agreement (which relates to the
transfer of a Residual Certificate), and acknowledges that each
Residual Certificate will bear a legend setting forth the applicable
restrictions on transfer;
(i) The Transferee hereby agrees that it shall pay any tax or
reporting costs borne by a REMIC as result of its purchase of the
Residual Certificates or any beneficial interest therein in violation
of Section 5.05(c) of the Standard Terms to the Trust Agreement to the
extent such tax or reporting costs are not paid by the Transferor or by
the Trustee out of amounts that otherwise would have been paid to the
Transferee;
(j) The Transferee hereby agrees to indemnify and hold
harmless Saxon, the Master Servicer, the Trustee, the Trust and each
other holder of a Residual Certificate from and against any tax
liability or reporting costs arising from its violation of the
restrictions on transfer contained in Section 5.05(c) of the Standard
Terms to the Trust Agreement or its breach of any of its
representations, warranties, or covenants contained herein; and
(k) The Transferee agrees that it will take no action to
question or invalidate the interest of the Trust in the Mortgage Loans
or seek or maintain any claim or interest in the Mortgage Loans having
a priority over the interest of the Trust in such Mortgage Loans.
G-2
<PAGE>
The representations and covenants above marked with an * apply only to Residual
Certificates that are Private Certificates.
3. Acknowledgments.
(a) The Transferee acknowledges that, if the Residual
Certificates are Private Certificates, the Residual Certificates have
not been registered under the Securities Act or registered or qualified
under any state securities laws and that no transfer may be made unless
the Purchased Certificates are registered under the Securities Act and
under applicable state law or unless an exemption from such
registration is available. The Transferee further understands that
neither Saxon, the Master Servicer nor the Trust is under any
obligation to register the Certificate or make an exemption from such
registration available.
(b) The Transferee acknowledges that if a Residual Certificate
is transferred to a Non-U.S. Person, the transfer will not be
recognized by the Withholding Agent (as defined below) unless the
Withholding Agent has received from the Transferee an affidavit
substantially in the form of Exhibit H-1 attached to the Standard Terms
to Trust Agreement.
(c) The Transferee acknowledges that if any United States
federal income tax is due at the time a Non-U.S. Person transfers a
Residual Certificate, the Trustee or its designated Paying Agent or
other person who is liable to withhold federal income tax from a
distribution on a Residual Certificate under sections 1441 and 1442 of
the Code and the Treasury regulations thereunder (the "Withholding
Agent") may (i) withhold an amount equal to the taxes due upon
disposition of the Certificate from future distributions made with
respect to the Certificate to the Transferee (after giving effect to
the withholding of taxes imposed on such Transferee), and (ii) pay the
withheld amount to the Internal Revenue Service unless satisfactory
written evidence of payment of the taxes due by the transferor has been
provided to the Withholding Agent.
(d) The Transferee acknowledges the Withholding Agent may (i)
hold distributions on a Certificate, without interest, pending
determination of amounts to be withheld, (ii) withhold other amounts
required to be withheld pursuant to United States federal income tax
law, if any, from distributions that otherwise would be made to such
Transferee on each Certificate it holds, and (iii) pay to the Internal
Revenue Service all such amounts withheld.
(e) The Transferee acknowledges that the transfer of all or
part of the Residual Certificates that have "tax avoidance potential"
(as defined in Treasury regulations section 1.860G-3(a)(2) or any
successor provision) to a Non-U.S. Person will be disregarded for all
federal income tax purposes, and that Treasury regulations or other
administrative guidance issued by the Treasury may effectively prohibit
the transfer of the Residual Certificates to Non-U.S. Persons.
(f) The Transferee acknowledges that the transfer of the
Residual Certificates to a U.S. Person will be disregarded for all
federal income tax purposes if a significant purpose of the transfer is
to impede the assessment or collection of the taxes and expenses
associated with such Certificates within the meaning of Treasury
regulation section 1.860E-1(c)(1).
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
validly executed by its duly authorized representative as of the [____] day of
[____________], 199[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Taxpayer ID #__________________
G-3
<PAGE>
Exhibit H-1
FORM OF NON-U.S. PERSON AFFIDAVIT
AND AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 86OE(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Saxon Asset Securities Company
Series 199[_]-[_] Trust (the "Trust")
Mortgage Loan Asset Backed Certificates, Class [R]
STATE OF [____________]
ss:
CITY OF [_____________]
Under penalties of perjury, I, the undersigned, declare that to the
best of my knowledge and belief, the following representations are true, correct
and complete:
1. I am a duly authorized officer of [____________________] (the
"Transferee") and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the Class [R]
Certificates (the "Residual Certificates"), which represent a residual interest
in one or more real estate mortgage investment conduits (each, a "REMIC") for
which elections are to be made under Section 860D of the Internal Revenue Code
of 1986, as amended (the "Code").
3. The Transferee is a foreign person within the meaning of Treasury
Regulation Section 1.860G-3(a)(1) (i.e., a person other than (i) a citizen or
resident of the United States, (ii) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, or (iii) an estate or trust that is subject to United States federal
income tax regardless of the source of its income) who would be subject to
United States income tax withholding pursuant to Section 1441 or 1442 of the
Code and the Treasury regulations thereunder on income derived from the Residual
Certificates (a "Non-U.S. Person").
4. The Transferee agrees that it will not hold the Residual
Certificates in connection with a trade or business in the United States, and
the Transferee understands that it will be subject to United States federal
income tax under sections 871 and 881 of the Code in accordance with section
860G of the Code and any Treasury regulations issued thereunder on "excess
inclusions" that accrue with respect to the Residual Certificates during the
period the Transferee holds the Residual Certificates.
5. The Transferee understands that the federal income tax on excess
inclusions with respect to the Residual Certificates may be withheld in
accordance with section 860G(b) of the Code from distributions that otherwise
would be made to the Transferee on the Residual Certificates and, to the extent
that such tax has not been imposed previously, that such tax may be imposed at
the time of disposition of any such Residual Certificate pursuant to section
860G(b) of the Code.
6. The Transferee agrees (i) to file a timely United States federal
income tax return for the year in which disposition of a Residual Certificate it
holds occurs (or earlier if required by law) and will pay any United States
federal income tax due at that time and (ii) if any tax is due at that time, to
provide satisfactory written evidence of payment of such tax to the Trustee or
its designated paying agent or other person who is liable to withhold federal
income tax from a distribution on the Residual Certificates under sections 1441
and 1442 of the Code and the Treasury regulations thereunder (the "Withholding
Agent").
7. The Transferee understands that until it provides written evidence
of the payment of tax due upon the disposition of a Residual Certificate to the
Withholding Agent pursuant to paragraph 6 above, the Withholding Agent may (i)
withhold an amount equal to such tax from future distributions made with respect
to the Residual Certificate to subsequent transferees (after giving effect to
the withholding of taxes imposed on such subsequent transferees), and (ii) pay
the withheld amount to the Internal Revenue Service.
H-1-1
<PAGE>
8. The Transferee understands that (i) the Withholding Agent may
withhold other amounts required to be withheld pursuant to United States federal
income tax law, if any, from distributions that otherwise would be made to such
transferee on each Residual Certificate it holds and (ii) the Withholding Agent
may pay to the Internal Revenue Service amounts withheld on behalf of any and
all former holders of each Residual Certificate held by the Transferee.
9. The Transferee understands that if it transfers a Residual
Certificate (or any interest therein) to a United States Person (including a
foreign person who is subject to net United States federal income taxation with
respect to such Residual Certificate), the Withholding Agent may disregard the
transfer for federal income tax purposes if the transfer would have the effect
of allowing the Transferee to avoid tax on accrued excess inclusions and may
continue to withhold tax from future distributions as though the Residual
Certificate were still held by the Transferee.
10. The Transferee understands that a transfer of a Residual
Certificate (or any interest therein) to a Non-U.S. Person (i.e., a foreign
person who is not subject to net United States federal income tax with respect
to such Residual Certificate) will not be recognized unless the Withholding
Agent has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same agreements and representations.
11. The Transferee understands that distributions on a Residual
Certificate may be delayed, without interest, pending determination of amounts
to be withheld.
12. The Transferee is not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in Section 1381(a) (2) (C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
13. The Transferee agrees to consent to any amendment of the Trust
Agreement that shall be deemed necessary by Saxon (upon the advice of counsel to
Saxon) to constitute a reasonable arrangement to ensure that no interest in a
Residual Certificate will be owned directly or indirectly by a Disqualified
Organization.
14. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the Transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
H-1-2
<PAGE>
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Trust Agreement, dated as of [____________],
199[_], which incorporates by reference the Standard Terms thereto, among Saxon
Asset Securities Company, the Master Servicer and the Trustee.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized representative as of the [____] day of
[____________], 199[_].
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Personally appeared before me [____________________], known or proved
to me to be the same person who executed the foregoing instrument and to be a
[____________________] of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this [____] day of [____________],
199[_].
------------------------------
Notary Public
My commission expires the [____] day of [____________], 199[_].
H-1-3
<PAGE>
Exhibit H-2
FORM OF U.S. PERSON AFFIDAVIT
PURSUANT TO SECTIONS 860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Saxon Asset Securities Company
Series 199[_]-[_] Trust (the "Trust")
Mortgage Loan Asset Backed Certificates, Class [R]
STATE OF [____________]
ss:
CITY OF [_____________]
Under penalties of perjury, I, the undersigned, declare that to the
best of my knowledge and belief, the following representations are true, correct
and complete:
1. I am a duly authorized officer of [____________________] (the
"Transferee") and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the Class [R]
Certificates (the "Residual Certificates"), which represent a residual interest
in one or more real estate mortgage investment conduits (each, a "REMIC") for
which elections are to be made under Section 860D of the Internal Revenue Code
of 1986, as amended (the "Code").
3. The Transferee either is (i) a citizen or resident of the United
States, (ii) a domestic partnership or corporation, (iii) an estate or trust
that is subject to United States federal income tax regardless of the source of
its income, or (iv) a foreign person who would be subject to United States
income taxation on a net basis on income derived from the Residual Certificates
(a "U.S. Person").
4. The Transferee is a not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any state or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in section 1381(a)(2)(C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
5. The Transferee agrees to consent to any amendment of the Trust
Agreement that shall be deemed necessary by Saxon (upon the advice of counsel to
Saxon) to constitute a reasonable arrangement to ensure that no interest in a
Residual Certificate will be owned directly or indirectly by a Disqualified
Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the Transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Trust Agreement, dated as of [____________],
199[_], which incorporates by reference the Standard Terms thereto, among Saxon
Asset Securities Company, the Master Servicer and the Trustee.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized representative as of the [____] day of
[____________], 199[_].
H-2-1
<PAGE>
[TRANSFEREE]
By:____________________________
Name:__________________________
Title:_________________________
Personally appeared before me [____________________], known or proved
to me to be the same person who executed the foregoing instrument and to be a
[____________________] of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this [____] day of [____________],
199[_].
------------------------------
Notary Public
My commission expires the [____] day of [____________], 199[_].
H-2-2
