EXECUTION
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered into
as of the 1st day of May, 2000, by and between LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation ("Lehman Capital"), and
OCWEN FEDERAL BANK FSB, a federal savings bank (the "Servicer"), recites and
provides as follows:
RECITALS
WHEREAS, Lehman Capital has conveyed certain Mortgage Loans identified
on Schedule I hereto (the "Serviced Mortgage Loans") to Structured Asset
Securities Corporation, a Delaware special purpose corporation ("SASCO"),
which in turn has conveyed the Serviced Mortgage Loans to First Union National
Bank, a national banking association, as trustee (the "Trustee"), under a
trust agreement dated as of May 1, 2000 (the "Trust Agreement"), among the
Trustee, Norwest Bank Minnesota, National Association, as master servicer
("Norwest," and, together with any successor Master Servicer appointed
pursuant to the provisions of the Trust Agreement, the "Master Servicer"),
SASCO, Lehman Brothers Holdings Inc., as Seller, The Murrayhill Company, as
loss mitigation advisor and the Federal Home Loan Mortgage Corporation
("Freddie Mac") as guarantor (the "Guarantor").
WHEREAS, multiple classes of certificates (the "Certificates"),
including the Class X Certificate, will be issued on the Closing Date pursuant
to the Trust Agreement, and Lehman Brothers Inc. or a nominee thereof
(together with any successor in interest thereto and any permitted assignee or
transferee thereof, the "Directing Holder") is expected to be the initial
registered holder of the Class X Certificate.
WHEREAS, the Serviced Mortgage Loans are currently being serviced by the
Servicer for Lehman Capital pursuant to a Residential Flow Servicing Agreement
between Lehman Capital, as owner, and the Servicer, as servicer, dated as of
August 1, 1999, for Performing and Non-Performing Residential Mortgage Loans
and REO Properties (the "Flow Servicing Agreement").
WHEREAS, Lehman Capital desires that the Servicer continue to service
the Serviced Mortgage Loans, and the Servicer has agreed to do so, subject to
the rights of the Directing Holder, the Master Servicer and the Guarantor to
terminate the rights and obligations of the Servicer hereunder as set forth
herein and to the other conditions set forth herein.
WHEREAS, Lehman Capital and the Servicer agree that the provisions of
the Flow Servicing Agreement shall apply to the Serviced Mortgage Loans, but
only to the extent provided herein and that this Agreement shall constitute a
Reconstitution Agreement which shall govern the Serviced Mortgage Loans for so
long as such Serviced Mortgage Loans remain subject to the provisions of the
Trust Agreement.
WHEREAS, the Master Servicer and any successor master servicer shall be
obligated, among other things, to supervise the servicing of the Serviced
Mortgage Loans on behalf of the Trustee, and shall have the right, under
certain circumstances, to terminate the rights and obligations of the Servicer
under this Agreement.
WHEREAS, Lehman Capital and the Servicer intend that each of the Master
Servicer, the Directing Holder, the Trustee and the Guarantor is an intended
third party beneficiary of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Lehman Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Flow Servicing
Agreement incorporated by reference herein, shall have the meanings
(regardless if such terms are defined in the Flow Servicing Agreement, except
for the term "Collection Account") ascribed to such terms in the Trust
Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced Mortgage
Loans, to perform and observe the duties, responsibilities and obligations
that are to be performed and observed under the provisions of the Flow
Servicing Agreement, except as otherwise provided herein and on Exhibit A
hereto, and that the provisions of the Flow Servicing Agreement, as so
modified, are and shall be a part of this Agreement to the same extent as if
set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the
provisions of this Agreement. The Master Servicer, acting on behalf of the
Trustee and the trust fund (the "Trust Fund") created pursuant to the Trust
Agreement, shall have the same rights as Lehman Capital under the Flow
Servicing Agreement to enforce the obligations of the Servicer under the Flow
Servicing Agreement and the term "Owner" as used in the Flow Servicing
Agreement in connection with any rights of the Owner shall refer to the Master
Servicer except as otherwise indicated specified in Exhibit A hereto. The
Master Servicer, with the prior consent of Freddie Mac, shall be entitled to
terminate the rights and obligations of the Servicer under this Agreement upon
the failure of the Servicer to perform any of its obligations under this
Agreement, which failure results in a Servicer Event of Default, as provided
in Article IX of the Flow Servicing Agreement. Notwithstanding anything herein
to the contrary, in no event shall the Master Servicer assume any of the
obligations of Lehman Capital hereunder; and in connection with the
performance of the Master Servicer's duties hereunder the parties and other
signatories hereto agree that the Master Servicer shall be entitled to all of
the rights, protections and limitations of liability afforded to the Master
Servicer under the Trust Agreement.
4. Compliance with HOEPA. The Servicer is currently in compliance with
the Home Ownership and Equity Protection Act ("HOEPA") and will continue to
operate its business in compliance with HOEPA.
5. No Representations. Neither the Servicer nor the Master Servicer
shall be obligated or required to make any representations and warranties
regarding the characteristics of the Serviced Mortgage Loans in connection
with the transactions contemplated by the Trust Agreement and issuance of the
Certificates issued pursuant thereto.
6. Notices. All notices and communications between or among the parties
hereto (including any third party beneficiary thereof) or required to be
provided to the Trustee shall be in writing and shall be deemed received or
given when mailed first-class mail, postage prepaid, addressed to each other
party at its address specified below or, if sent by facsimile or electronic
mail, when facsimile or electronic confirmation of receipt by the recipient is
received by the sender of such notice. Each party may designate to the other
parties in writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING NEW YORK
OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
9. Reconstitution. Lehman Capital and the Servicer agree that this
Agreement is a "Reconstitution Agreement" and that the date hereof is the
"Reconstitution Date", each as defined in the Flow Servicing Agreement.
10. Notices and Remittances to the Master Servicer and Trustee. All
notices required to be delivered to the Master Servicer under this Agreement
shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044
Attn: Master Servicing Department, ARC 2000-BC2
Telephone: (410) 884-2000
Facsimile: (410) 884-2360
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 091-000-019
Account Name: Corporate Trust Clearing
Account Number: 3970771416
For further credit to: #13671500 ARC 2000-BC2
All notices required to be delivered to the Trustee hereunder shall be
delivered to the Trustee at the following address:
First Union National Bank
401 S. Tryon Street - N.C. 1179
Charlotte, North Carolina 28288-1179
Attention: Structured Finance Trust Services
Telephone: (704) 383-9568
Facsimile: (704) 383-6039
All notices required to be delivered to the Guarantor hereunder shall be
delivered to the Guarantor at the following address:
Federal Home Loan Mortgage Corporation
8200 Jones Branch Road
McLean, Virginia
Attention: Structured Finance - Director of Specialized
Business Services
Telephone: (703) 903-2935
Facsimile: (703) 903-4228
<PAGE>
Executed as of the day and year first above written.
LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
By: ______________________________
Name:
Title:
OCWEN FEDERAL BANK FSB
By: ______________________________
Name:
Title:
Acknowledged:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Master Servicer
By: ______________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
as Trustee
By: ______________________________
Name:
Title:
FEDERAL HOME LOAN MORTGAGE CORPORATION,
as Guarantor
By: ______________________________
Name:
Title:
<PAGE>
EXHIBIT A
Modifications to the Flow Servicing Agreement
1. Unless otherwise specified herein, any provisions of the Flow Servicing
Agreement, including definitions, relating to (i) representations and
warranties of the Owner, (ii) Agency Transfers, Pass-Through Transfers,
whole loan transfers, reconstitution and securitization, (iii) the sale
and purchase of the Mortgage Loans and Setup Expenses, (iv) Transfer
Dates, (v) Non-Performing Loans, and (vi) Preliminary Servicing Period,
shall be disregarded. The exhibits to the Flow Servicing Agreement and
all references to such exhibits shall also be disregarded.
2. For reporting purposes, a Mortgage Loan is "delinquent" when any payment
contractually due thereon has not been made by the close of business on
the Due Date therefor. Such Mortgage Loan is "30 days Delinquent" if
such payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which
such payment was first due, or, if there is no such corresponding day
(e.g., as when a 30-day month follows a 31-day month in which a payment
was due on the 31st day of such month), then on the last day of such
immediately succeeding month. Similarly for "60 days Delinquent" and the
second immediately succeeding month and "90 days Delinquent" and the
third immediately succeeding month.
3. The definition of "Accepted Servicing Practices" is hereby deleted and
replaced by the following:
With respect to any Mortgage Loan, those mortgage servicing
practices of prudent mortgage lending institutions which service
mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
4. The definition of "Ancillary Income" in Article I is hereby amended by
adding the words "as additional compensation" to the end of the last
sentence.
5. The definition of "Collection Account" in Article I is hereby amended by
deleting the words "in trust for Lehman Capital, a Division of Lehman
Brothers Holdings Inc. and its successors and assigns" and substituting
the following words: "in trust for Norwest Bank Minnesota, National
Association, as Master Servicer for the ARC 2000-BC2 Trust."
6. The definition of "Collection Period" in Article I is hereby amended in
its entirety to read as follows:
"Collection Period" means with respect to each Distribution Date,
the period commencing on the second day of the month immediately
preceding the month of the related Distribution Date and ending on
the first day of the month of such Distribution Date.
7. The definition of "Current Servicer" in Article I shall be deleted in
its entirety.
8. A new definition of "Custodial Agreement" is added to Article I
immediately following the definition of "Current Servicer" to read as
follows:
"Custodial Agreement" means the custodial agreement relating to
the custody of the Serviced Mortgage Loans among Chase Bank of
Texas, National Association, as custodian, First Union National
Bank, as trustee and Structured Asset Securities Corporation, as
depositor.
9. The definition of "Custodian" in Article I is hereby amended in its
entirety to read as follows:
"Custodian" means Chase Bank of Texas, National Association, any
successor in interest or any successor custodian appointed
pursuant to the Custodial Agreement.
10. The definition of "Distribution Date" in Article I is hereby amended in
its entirety to read as follows:
"Distribution Date" means the 18th day (or if such 18th day is not
a Business Day, the first Business Day immediately following) of
any month.
11. The definition of "Eligible Account" in Article I is hereby amended in
its entirety to read as follows:
"Eligible Account" means a segregated account maintained by either
(i) a depository institution the accounts of which are insured by
the FDIC and the short-term debt obligations of which (or in the
case of a depository institution that is a subsidiary of a holding
company, the short-term unsecured debt obligations of such holding
company) are rated "A-1" or better by S&P or "Prime-1" or better
by Moody's (or a comparable rating, if another rating agency is
specified by the Master Servicer by written notice to the
Servicer) or (ii) the corporate trust department of any bank the
debt obligations of which are rated at least A- or its equivalent
by either of S&P or Moody's.
12. The definition of "Escrow Accounts" in Article I is hereby amended by
deleting the words "for Lehman Capital, a Division of Lehman Brothers
Holdings Inc. and its successors and assigns, and various mortgagors"
and replacing them with the following words: "for Norwest Bank
Minnesota, National Association, as Master Servicer for the ARC 2000-BC2
Trust".
13. The definition of "Fitch" in Article I is hereby amended in its entirety
to read as follows:
"Fitch" means Fitch IBCA, Inc.
14. A new definition of "Monthly Advance" is added to Article I immediately
following the definition of "Missing Document Report" to read as
follows:
"Monthly Advance" means with respect to each Distribution Date and
each Loan, an amount equal to the Monthly Payment (with the
interest portion of such Monthly Payment adjusted to the Mortgage
Loan Remittance Rate) that was due on the Loan, and that was
delinquent at the close of business on the first day of the month
in which such Distribution Date occurs, but only to the extent
that such amount is expected, in the reasonable judgment of the
Servicer, to be recoverable from collections or other recoveries
in respect of such Loan. To the extent that the Servicer
determines that any such amount is not recoverable from
collections or other recoveries in respect of such Loan, such
determination shall be evidenced by a certificate of a Servicing
Officer delivered to the Master Servicer setting forth such
determination and the procedures and considerations of the
Servicer forming the basis of such determination, which shall
include a copy of any broker's price opinion and any other
information or reports obtained by the Servicer which may support
such determinations.
15. The definition of "Non-Recoverable Advance" in Article I is hereby
amended by replacing the reference to "Section 2.3(b)" with "Section
2.3(c)".
16. The definition of "Permitted Investments" in Article I is hereby amended
by deleting the word "timely" in clause (i).
17. The definition of "Prepayment Interest Shortfall Amount" in Article I is
hereby amended by inserting the words (i) "voluntary (not including
discounted payoffs)" between the words "a" and "principal" in the second
line thereof, (ii) "or in part" between the words "full" and "during" in
the second line thereof and (iii) "for Prepayments in full only" at the
end of the parenthetical.
18. A new definition of "Prime Rate" is added to Article I immediately
following the definition of "Prepayment Interest Shortfall Amount" to
read as follows:
"Prime Rate" means the prime rate published from time to time, as
published as the average rate in The Wall Street Journal Northeast
Edition.
19. The definition of "Property Protection Expenses" in Article I is hereby
amended by adding the word "reasonable" at the beginning of clauses (h)
and (i).
20. The definition of "REO Property" in Article I is hereby amended by
replacing the word "Owner" with "the Trustee on behalf of the Trust
Fund".
21. New definitions of "Retained Interest", "Retained Interest Holder" and
"Retained Interest Rate" are hereby added to Article I after the
definition of "REO Property" to read as follows:
Retained Interest: With respect to each Mortgage Loan, interest in
respect of each such Mortgage Loan retained by the Retained
Interest Holder at the Retained Interest Rate.
Retained Interest Holder: Lehman Capital or any successor in
interest by assignment or otherwise.
Retained Interest Rate: Initially, 0.15% per annum. In the event
that the Servicing Fee Rate is modified, the Retained Interest
Rate shall be modified by a corresponding amount so that the sum
of the Servicing Fee Rate and the Retained Interest Rate
applicable to each Mortgage Loan shall always equal 0.50% per
annum.
22. The definition of "Servicing Advances" in Article I is hereby amended in
its entirety to read as follows:
"Servicing Advances" means all customary, reasonable and necessary
"out-of-pocket" costs and expenses (including reasonable
attorneys' fees and disbursements) incurred by the Servicer in the
performance by the Servicer of its servicing obligations
hereunder, including, but not limited to, (a) Property Protection
Expenses, Escrow Payments, and Property Improvement Expenses, and
(b) any enforcement or administrative or judicial proceedings,
including foreclosures.
23. The definition of "Servicing Fee" in Article I is hereby amended in its
entirety to read as follows:
"Servicing Fee" means an amount equal to one-twelfth the product
of (a) a rate per annum equal to 0.35% and (b) the outstanding
principal balance of the Loan. The Servicing Fee is payable solely
from the interest portion (including recoveries with respect to
interest from Liquidation Proceeds) of such Monthly Payment
collected by the Servicer or as otherwise provided under this
Agreement. In the event servicing is transferred to a successor
servicer, clause (a) of the Servicing Fee may not exceed 0.50% per
annum. For purposes of the definitions of "Prepayment Interest
Shortfall Amount" and "Mortgage Loan Remittance Rate", calculation
of amounts remitted to the Collection Account pursuant to Section
2.3(b) and calculation of compensating interest pursuant to
Section 6.9, the rate per annum in clause (a) of the definition of
"Servicing Fee" shall be 0.50%.
24. The definition of "Servicing File" in Article I is hereby replaced with
the following:
"Servicing File" means with respect to each Loan, the file
retained by the Servicer.
25. A new definition of "Special Servicing Fee" is hereby added to Article I
after the definition of "Setup Fee" to read as follows:
"Special Servicing Fee" means with respect to each Mortgage Loan
that becomes greater than 150 days delinquent, a fee of $1,500,
payable once upon such Mortgage Loan becoming 150 days delinquent.
The Special Servicing Fee shall be paid in installments of $125
per month over a period of twelve months (or, if any remaining
balance of this fee remains unpaid at the time of liquidation of
the Mortgage Loan, such amount shall be paid on the Distribution
Date immediately after liquidation) as set forth in Section
9.34(b) of the Trust Agreement.
26. The parties hereto acknowledge that Section 2.1 (Transfer of Servicing
Files to Servicer) of the Flow Servicing Agreement shall be inapplicable
to this Agreement.
27. The parties hereto acknowledge that the provisions of Section 2.2
(Release of Loan Documents) are superceded by the provisions of the
Custodial Agreement.
28. Section 2.3(a) is hereby amended by replacing the word "Owner" in the
first, second and eighteenth lines thereof with the words "Trustee and
the Trust Fund" and by adding "if the accounts of the Servicer are FDIC
insured" after the first use of the word "Servicer" in the seventh line
thereof.
29. Section 2.3(b) is hereby amended by adding the words "and the Retained
Interest" after the words "Servicing Fee" in the third line, by deleting
the word "and" at the end of clause (iv), deleting the period at the end
of clause (v) and replacing it with a semi-colon followed by the word
"and", and by adding a new clause (vi) to read as follows:
(vi) any Prepayment Interest Shortfall Amount.
30. Section 2.3(e) is hereby amended by replacing the reference to "Owner"
in the third line thereof with "Trustee or Trust Fund".
31. Section 2.3(f) is hereby amended by adding "in accordance with the
Freddie Mac Seller/Servicer Guide" to the end of the first sentence
thereof, by replacing the word "Owner" in the final sentence of the
first paragraph with "Trust Fund", and deleting "FNMA or" and "seller-"
in the second paragraph thereof.
32. Section 2.3(i) is hereby amended by adding "the Trustee, the Guarantor"
after the word "Obligor" in the second line thereof.
33. A new Section 2.3(l) (Credit Reporting) is hereby added to read as
follows:
Section 2.3(l) Credit Reporting.
For each Mortgage Loan, the Servicer will accurately and fully
report its underlying borrower credit files to each of the following
credit repositories: Equifax Credit Information Services, Inc., Trans
Union, LLC and Experian Information Solution, Inc., on a monthly basis
in a timely manner.
34. A new Section 2.3(m) (Retained Interest) is hereby added to read as
follows:
Section 2.3(m) Retained Interest.
On each Distribution Date, the Servicer shall remit the Retained
Interest to the Retained Interest Holder.
35. Section 2.5 (Servicing Compensation) is hereby amended by deleting the
first two sentences thereof and by replacing the final sentence with the
following:
In the event that the Servicer deposits into the Collection
Account any Ancillary Income, the Servicer may withdraw such
amount pursuant to Section 6.2(c). The Servicer shall also be
entitled to the Special Servicing Fee.
36. Section 3.1 (Default Management Responsibilities) is hereby amended by
replacing the references to "Owner" with "Trustee and Trust Fund" in
each instance, and by adding "Notwithstanding anything to the contrary
in this Agreement, the Servicer shall not, unless default by the related
Mortgagor is, in the reasonable judgment of the Servicer, imminent,
knowingly permit any modification, waiver or amendment of any material
term of any Mortgage Loan (including but not limited to the interest
rate, the principal balance, the amortization schedule, or any other
term affecting the amount or timing of payments on the Mortgage Loan or
the collateral therefor) unless the Servicer shall have provided to the
Master Servicer, the Trustee and the Guarantor an Opinion of Counsel in
writing to the effect that such modification, waiver or amendment would
not cause an Adverse REMIC Event. The cost of such Opinion of Counsel
shall be reimbursable pursuant to Section 6.2(d)." to the end of such
Section.
37. Section 3.2 (Foreclosure) is hereby amended by (i) replacing the first
sentence thereof with the following:
In the event that any payment due under any Mortgage Loan
remains delinquent for a period of 65 days or any other default
continues for a period of 65 days beyond the expiration of any
grace or cure period, the Servicer shall commence foreclosure
proceedings and provide notice thereof to the Master Servicer and
the Trustee in writing. The Servicer shall retain an attorney and
supervise the conduct of the foreclosure proceeding.
; (ii) by replacing the word "Owner" in the sixth line thereof
with "the Trust Fund"; (iii) replacing the word "Owner" in the tenth
through thirteenth lines thereof with "Master Servicer and Guarantor"
and (iv) replacing the words "five (5)" with "thirty (30)".
38. Section 3.3 (Deed in Lieu) is hereby amended by replacing the word
"Owner" in the fourth and seventh lines thereof with "Trustee and Trust
Fund", by replacing the word "Owner" in the tenth through the thirteenth
lines thereof with "Master Servicer and Guarantor" and by replacing the
words "five (5)" with "thirty (30)".
39. Section 3.4 (Priority; Insurance Claims) is hereby amended by replacing
the word "Owner" with "Trust Fund".
40. Section 3.5 (Bankruptcy of Obligor) is hereby amended by replacing the
word "Owner" with "Trust Fund".
41. Section 3.6 (Discounted Payoffs) is hereby amended by replacing the word
"three" with "five".
42. Section 4.1 (Property Management and Disposition Services) is hereby
amended by adding the following paragraphs after the first paragraph
thereto:
In the event that the Trust Fund acquires any REO Property in
connection with a default or imminent default on a Mortgage Loan, the
Servicer shall dispose of such REO Property not later than the end of
the third taxable year after the year of its acquisition by the Trust
Fund unless the Servicer has applied for and received a grant of
extension from the Internal Revenue Service to the effect that, under
the REMIC Provisions and any relevant proposed legislation and under
applicable state law, the applicable Trust REMIC may hold REO Property
for a longer period without adversely affecting the REMIC status of such
REMIC or causing the imposition of a federal or state tax upon such
REMIC. If the Servicer has received such an extension, then the Servicer
shall continue to attempt to sell the REO Property for its fair market
value for such period longer than three years as such extension permits
(the "Extended Period"). If the Servicer has not received such an
extension and the Servicer is unable to sell the REO Property within the
period ending 3 months before the end of such third taxable year after
its acquisition by the Trust Fund or if the Servicer has received such
an extension, and the Servicer is unable to sell the REO Property within
the period ending three months before the close of the Extended Period,
the Servicer shall, before the end of the three year period or the
Extended Period, as applicable, (i) purchase such REO Property at a
price equal to the REO Property's fair market value or (ii) auction the
REO Property to the highest bidder (which may be the Servicer) in an
auction reasonably designed to produce a fair price prior to the
expiration of the three-year period or the Extended Period, as the case
may be. The Trustee shall sign any document or take any other action
reasonably requested by the Servicer which would enable the Servicer, on
behalf of the Trust Fund, to request such grant of extension.
Notwithstanding any other provisions of this Agreement, no REO
Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would: (i) cause
such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code; or (ii) subject any Trust
REMIC to the imposition of any federal income taxes on the income earned
from such REO Property, including any taxes imposed by reason of
Sections 860F or 860G(c) of the Code, unless the Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
43. Section 4.2 is hereby amended by replacing each reference to the word
"Owner" with "Master Servicer and Guarantor" and changing the words
"five (5)" to "thirty (30)".
44. Section 5.4 (Annual Audit) is hereby amended by changing the reference
to "April 30, 2000" in the second line thereof to "April 30, 2001".
45. A new Section 5.5 is added to the Flow Servicing Agreement to read as
follows:
Section 5.5 Annual Officer's Certificate.
On or before April 30 of each year, beginning with April 30,
2001, the Servicer, at its own expense, will deliver to the Master
Servicer and the Guarantor a Servicing Officer's certificate
stating, as to each signer thereof, that (i) a review of the
activities of the Servicer during such preceding fiscal year and
of performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of all such obligations,
specifying each such default known to such officers and the nature
and status thereof including the steps being taken by the Servicer
to remedy such default.
46. Section 6.2 (Remittances and Monthly Report) is hereby amended as
follows:
(1) the first sentence shall be deleted in its entirety;
(2) replacing the words "in the following priority" in the second
sentence of the first paragraph with "as follows";
(3) paragraph (b) shall be deleted in its entirety and replaced with
the following new paragraph (b):
(b) to make payments to the Retained Interest Holder and the
Master Servicer in the amounts and in the manner provided by
Section 6.6.
(4) by replacing the words "then Servicer may seek reimbursement from
Owner (as set forth in Section 6.4 below), it being understood
that, in the case of such reimbursement from the Collection
Account, Servicer's right thereto shall be prior to the rights of
Owner" in paragraph (d) with "then the Servicer may reimburse
itself from amounts on deposit in the Collection Account, it being
understood that the Servicer's right to such amounts from the
Collection Account shall be prior to the rights of the Trust
Fund."
(5) new paragraphs (e) and (f) shall be added to read as follows:
(e) to reimburse the Servicer for Monthly Advances of the
Servicer's funds made pursuant to Section 6.8. The
Servicer's right to reimburse itself pursuant to this
subclause (e) with respect to any Mortgage Loan being
limited to amounts received on the related Mortgage Loan
which represent late payments of principal and/or interest
respecting which any such advance was made, it being
understood that, in the case of any such reimbursement, the
Servicer's right to such reimbursement shall be prior to the
rights of the Trust Fund; provided, however, that in the
event that the Servicer determines in good faith that any
unreimbursed Monthly Advances will not be recoverable from
amounts representing late recoveries of payments of
principal or interest respecting the particular Mortgage
Loan as to which such Monthly Advance was made or from
Liquidation Proceeds or Insurance Proceeds with respect to
such Mortgage Loan, the Servicer may reimburse itself for
such amounts from the Collection Account, it being
understood, in the case of any such reimbursement, that the
Servicer's right thereto shall be prior to the rights of the
Trust Fund;
(f) to reimburse the Servicer for any amounts owed pursuant to
Section 8.3(a).
(6) and by deleting the last paragraph.
47. Section 6.3 (Remittance Upon Termination) is hereby amended by restating
paragraph (b) and paragraph (c) of such Section as follows:
(b) to make payments to the Retained Interest Holder and the
Master Servicer in the amounts and in the manner provided by
Section 6.6; and
(c) to reimburse itself for all unpaid Servicing Fees, Monthly
Advances and Servicing Advances, it being understood that
the Servicer's rights to such reimbursement shall be prior
to the rights of the Trust Fund.
48. The parties hereto acknowledge that Section 6.4 (Billing) shall be
inapplicable to this Reconstitution Agreement.
49. The parties hereto acknowledge that Section 6.5 (Missing Document
Report) shall be superseded by the provisions of the Custodial
Agreement.
50. New Sections 6.6, 6.7, 6.8 and 6.9 are hereby added to the Flow
Servicing Agreement to read as follows:
Section 6.6. Remittances.
On each Distribution Date the Servicer shall (i) pay any
outstanding MGIC Insurance Premiums, (ii) remit to the Retained
Interest Holder the Retained Interest for such Due Period and
(iii) remit on a scheduled/scheduled basis by wire transfer of
immediately available funds to the Master Servicer (a) all amounts
deposited in the Collection Account as of the close of business on
the last day of the related Collection Period (net of charges
against or withdrawals from the Collection Account pursuant to
Section 6.2), plus (b) all Monthly Advances, if any, which the
Servicer is obligated to make pursuant to Section 6.8, minus (c)
any amounts attributable to Principal Prepayments, Liquidation
Proceeds, insurance proceeds, condemnation proceeds or REO
Property disposition proceeds received after the applicable
Collection Period, which amounts shall be remitted on the
following Distribution Date, together with any additional interest
required to be deposited in the Collection Account in connection
with a Prepayment Interest Shortfall Amount in accordance with
Section 2.3(b)(vi), and minus (d) any amounts attributable to
Monthly Payments collected but due on a due date or dates
subsequent to the first day of the month in which such
Distribution Date occurs, which amounts shall be remitted on the
Distribution Date or Dates next succeeding the Collection Period
for such amounts.
With respect to any remittance received by the Master
Servicer after the Business Day on which such payment was due, the
Servicer shall pay to the Master Servicer interest on any such
late payment at an annual rate equal to the Prime Rate, adjusted
as of the date of each change, plus three percentage points, but
in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Collection
Account by the Servicer on the date such late payment is made and
shall cover the period commencing with the day following such
Business Day and ending with the Business Day on which such
payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding
Distribution Date. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Servicer.
All remittances required to be made to the Master Servicer
shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA #: 091-000-019
Acct#: 3970771416
Account Name: Corporate Trust Clearing
For further credit to: #13671500 ARC 2000-BC2
Section 6.7 Statements to Master Servicer.
Not later than the tenth calendar day (or if such tenth
calendar day is not a Business Day, the immediately preceding
Business Day) of each month, the Servicer shall furnish to the
Master Servicer (a) a monthly remittance advice containing such
information in the form attached hereto as Exhibit A-1 or other
mutually acceptable format as to the accompanying remittance and
the period ending on the preceding Determination Date and (b) all
such information required pursuant to clause (a) above on a
magnetic tape or other similar media reasonably acceptable to the
Master Servicer. The Master Servicer will convert such data into a
format acceptable to the Guarantor and provide monthly reports to
the Guarantor pursuant to the Trust Agreement.
Such monthly remittance advice shall also include on a
cumulative basis the amount of any (i) claims filed, (ii) claim
payments made, (iii) claims denied and (iv) policies cancelled
with respect to those Serviced Mortgage Loans covered by
loan-level primary mortgage insurance policies provided by MGIC or
any other provider of primary mortgage insurance purchased by the
Trust.
The Servicer shall provide the Master Servicer with such
information available to it concerning the Mortgage Loans as is
necessary for the Master Servicer to prepare the Trust Fund's
federal income tax return as the Master Servicer may reasonably
request from time to time.
Section 6.8 Monthly Advances by Servicer.
On the Business Day immediately preceding each Distribution
Date, the Servicer shall deposit in the Collection Account from
its own funds or from amounts held for future distribution an
amount equal to all Monthly Payments which were due on the
Mortgage Loans during the applicable Collection Period and which
were delinquent at the close of business on the immediately
preceding Determination Date. Any amounts held for future
distribution and so used shall be replaced by the Servicer by
deposit in the Collection Account on or before any future
Distribution Date if funds in the Collection Account on such
Distribution Date shall be less than remittances to the Master
Servicer required to be made on such Distribution Date. The
Servicer shall keep appropriate records of such amounts and will
provide such records to the Guarantor and the Master Servicer upon
request. The Guarantor, in its reasonable judgment, shall have the
right to require the Servicer to remit from its own funds to the
Collection Account an amount equal to all Monthly Advances
previously made out of funds held in the Collection Account and
not previously reimbursed from collections on the Mortgage Loans,
and in such event, the Servicer shall thereafter remit all Monthly
Advances from its own funds. In no event shall the preceding
sentence be construed as limiting the Servicer's right to (i) pass
through late collections on the related Mortgage Loans in lieu of
making Monthly Advances or (ii) reimburse itself for such Monthly
Advances from late collections on the related Mortgage Loans.
The Servicer shall make Monthly Advances through the
Distribution Date immediately preceding the distribution of all
Liquidation Proceeds and other payments or recoveries (including
insurance proceeds and condemnation proceeds) with respect to the
related Mortgage Loans.
Section 6.9 Compensating Interest.
The Servicer shall deposit in the Collection Account on a
daily basis, and retain therein with respect to each Principal
Prepayment, the Prepayment Interest Shortfall Amount, if any, for
the month of such distribution. Such deposit shall be made from
the Servicer's own funds, without reimbursement therefor up to a
maximum amount per month of the Servicing Fee actually received
for such month for the Mortgage Loans.
51. Section 7.1(e) (Litigation) is hereby amended by adding "in any one
instance or in the aggregate," after "if adversely determined,".
52. Section 7.1(g) (FNMA or FHLMC Approved) is hereby amended by deleting
"FNMA or" in each instance and by deleting "seller/" in the first
sentence thereto.
53. A new paragraph is hereby added at the end of Section 7.1
(Representations and Warranties) to read as follows:
It is understood and agreed that the representations and
warranties set forth in Section 7.1 shall survive the engagement
of the Servicer to perform the servicing responsibilities
hereunder and the delivery of the Servicing Files to the Servicer
and shall inure to the benefit of the Trustee and the Trust Fund.
Upon discovery by either the Servicer, the Master Servicer or the
Trustee of a breach of any of the foregoing representations and
warranties which materially and adversely affects the ability of
the Servicer to perform its duties and obligations under this
Agreement or otherwise materially and adversely affects the value
of the Mortgage Loans, the Mortgaged Property or the priority of
the security interest on such Mortgaged Property or the interest
of the Trustee or the Trust Fund, the party discovering such
breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or
notice to the Servicer of any breach of a representation or
warranty set forth in Section 7.1 which materially and adversely
affects the ability of the Servicer to perform its duties and
obligations under this Agreement or otherwise materially and
adversely affects the value of the Loans, the Mortgaged Property
or the priority of the security interest on such Mortgaged
Property, the Servicer shall use its best efforts promptly to cure
such breach in all material respects and, if such breach cannot be
cured, the Servicer shall, at the Trustee's option, assign the
Servicer's rights and obligations under this Agreement (or
respecting the affected Loans) to a successor Servicer selected by
the Trustee with the prior consent and approval of the Master
Servicer and the Guarantor. Such assignment shall be made in
accordance with Section 10.4.
In addition, the Servicer shall indemnify (from its own
funds) the Trustee, the Trust Fund, the Guarantor and the Master
Servicer and hold each of them harmless against any costs
resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Servicer's
representations and warranties contained in this Agreement. It is
understood and agreed that the remedies set forth in this Section
7.1 constitute the sole remedies of the Master Servicer, the Trust
Fund and the Trustee respecting a breach of the foregoing
representations and warranties.
Any cause of action against the Servicer relating to or
arising out of the breach of any representations and warranties
made in Section 7.1 shall accrue upon (i) discovery of such breach
by the Servicer or notice thereof by the Trustee or Master
Servicer to the Servicer, (ii) failure by the Servicer to cure
such breach within the applicable cure period, and (iii) demand
upon the Servicer by the Trustee, the Guarantor or the Master
Servicer for compliance with this Agreement.
54. Section 8.2 (Servicer's Indemnity of Owner) is hereby amended by
changing the word "Owner" in the second, fifth and ninth lines thereof
to "Master Servicer, Guarantor, Trustee and the Trust Fund".
55. Section 8.3 (Owner's Indemnity of Servicer; Limitation on Liability of
Servicer) is hereby amended by (i) replacing Section 8.3(a) with the
following:
The Servicer and any director or officer or employee or agent of
the Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of its reckless disregard of obligations and
duties hereunder.
, (ii) deleting the fifth and sixth sentences of Section 8.3(d), and
(iii) changing the word "Owner" in Section 8.3(b) to "Master Servicer,
Guarantor, Trustee or Trust Fund".
56. Section 9.1 (Events of Default) is hereby amended by changing the words
"three (3) Business Days" in Section 9.1(a) to "one (1) Business Day"
and by replacing Section 9.1(h) with the following: "Servicer is not an
approved servicer for FHLMC".
57. The parties hereto acknowledge that the remedies set forth in Section
10.1(b) may be exercised by either the Master Servicer or Trustee on
behalf of the Trust Fund.
58. A new paragraph is hereby added as the final paragraph of Section
10.1(b) to read as follows:
By a written notice, the Trustee and the Master Servicer,
with the Guarantor's consent, may waive any default by the
Servicer in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default
shall cease to exist, and any Event of Default under Section 9.1
arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
59. Section 10.1(c) is hereby amended in its entirety to read as follows:
(c) With the prior consent of Freddie Mac, the Directing
Holder may terminate the rights and obligations of the Servicer
under this Agreement without cause. Any such termination shall be
with 30 days' prior notice, in writing and delivered to the
Trustee, the Master Servicer and the Servicer by registered mail.
The Servicer shall comply with the termination procedures set
forth in Section 10.4 hereof. The Master Servicer or the Trustee
shall have no right to terminate the Servicer pursuant to this
Section 10.1(c). In the event of a termination pursuant to this
Section 10.1(c), the Directing Holder shall (i) appoint a
successor servicer pursuant to Section 10.4 and (ii) pay to the
Servicer a sum, as liquidated damages, from its own funds without
reimbursement, equal to the product of (a) two, (b) the annual
servicing fee rate, and (c) the aggregate unpaid principal balance
of the Loans for which this Agreement is going to be terminated as
of the last day of the month following receipt of such notice of
termination.
60. Section 10.1(d) is hereby deleted in its entirety.
61. Section 10.2 is hereby amended by changing the word "Owner" to "Master
Servicer, the Guarantor and the Depositor".
62. Section 10.3 (Servicer Not to Resign) is hereby amended by changing the
word "Owner" to the "Master Servicer, the Guarantor and the Trustee",
except in the last sentence thereof where the word "Owner" shall be
replaced by the word "Master Servicer".
63. The following new paragraphs are hereby added to Section 10.4
immediately preceding the existing paragraph of Section 10.4, to read as
follows:
Upon the termination of the Servicer's responsibilities and
duties under this Agreement (a) pursuant to Sections 10.1(b), 10.3
or 12.12, the Master Servicer shall, in accordance with the
provisions of the Trust Agreement, (i) succeed to and assume all
of the Servicer's responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor meeting the
eligibility requirements of this Agreement and which shall succeed
to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement simultaneously
with the termination of the Servicer's responsibilities, duties
and liabilities under this Agreement; or (b) pursuant to Section
10.1(c), the Directing Holder shall appoint a successor which
shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under
this Agreement simultaneously with the termination of the
Servicer's responsibilities, duties and liabilities under this
Agreement. Any successor to the Servicer shall be subject to the
approval of the Master Servicer, the Guarantor, the Depositor and
each Rating Agency (as such term is defined in the Trust
Agreement). Each Rating Agency must deliver to the Trustee a
letter to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Certificates. In addition, with
respect to any FHA Loans serviced hereunder, the Servicer shall
provide notice of such change in servicers to HUD on HUD Form
92080 or such other form as prescribed by HUD, at least 10 days
after such transfer of servicing. In connection with such
appointment and assumption, the Master Servicer or the Depositor,
as applicable, may make such arrangements for the compensation of
such successor out of payments on Loans as it and such successor
shall agree; provided, however, that no such compensation shall be
in excess of that permitted the Servicer under this Agreement. In
the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to
the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date
thereof with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement, and shall take no
action whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not
become effective until a successor shall be appointed pursuant to
this Section 10.4 and shall in no event relieve the Servicer of
the representations and warranties made pursuant to Sections 7.1
and the remedies available to the Trustee under Section 7.1, it
being understood and agreed that the provisions of such Section
7.1 shall be applicable to the Servicer notwithstanding any such
resignation or termination of the Servicer, or the termination of
this Agreement.
Within a reasonable period of time, but in no event longer
than 30 days of the appointment of a successor entity, the
Servicer shall prepare, execute and deliver to the successor
entity any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect
the purposes of such notice of termination. The Servicer shall
cooperate with the Trustee and the Master Servicer, as applicable,
and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of
servicing responsibilities to the successor Servicer, including
without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time
be credited by the Servicer to the Collection Account or any
Escrow Account or thereafter received with respect to the Loans.
In the event the Servicer is terminated pursuant to Section
10.1(c), the Directing Holder shall be responsible for payment
from its own funds without reimbursement of any out-of-pocket
costs incurred by the Servicer and the Master Servicer in
connection with the transfer of the Serviced Mortgage Loans to a
successor servicer.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Trustee, the Servicer and the
Master Servicer an instrument (i) accepting such appointment,
wherein the successor shall make the representations and
warranties set forth in Section 7.1 and (ii) an assumption of the
due and punctual performance and observance of each covenant and
condition to be performed and observed by the Servicer under this
Agreement, whereupon such successor shall become fully vested with
all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally
named as a party to this Agreement. Any termination or resignation
of the Servicer or termination of this Agreement pursuant to
Sections 10.1 or 10.3 shall not affect any claims that the Master
Servicer or the Trustee may have against the Servicer arising out
of the Servicer's actions or failure to act prior to any such
termination or resignation.
The Servicer shall deliver within three (3) Business Days to
the successor Servicer the funds in the Collection Account and
Escrow Account and all Loan Documents and related documents and
statements held by it hereunder and the Servicer shall account for
all funds and shall execute and deliver such instruments and do
such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers,
duties, responsibilities, obligations and liabilities of the
Servicer.
Upon a successor's acceptance of appointment as such, the
Servicer shall notify the Trustee and Master Servicer of such
appointment in accordance with the notice procedures set forth
herein.
Except as otherwise provided in this Agreement, all
reasonable costs and expenses incurred in connection with any
transfer of servicing hereunder (whether as a result of
termination or removal of the Servicer or resignation of the
Servicer or otherwise), including, without limitation, the costs
and expenses of the Master Servicer or any other Person in
appointing a successor servicer, or of the Master Servicer in
assuming the responsibilities of the Servicer hereunder, or of
transferring the Servicing Files and the other necessary data to
the successor servicer shall be paid by the terminated, removed or
resigning Servicer from its own funds without reimbursement.
64. Section 12.2 (Choice of Law) shall be deleted in its entirety.
65. Section 12.4 (Entire Agreement; Amendments; Waivers) is hereby amended
by replacing "the party against whom such amendment is sought to be
enforced" with "the Servicer and Lehman Capital, with the written
consent of the Master Servicer, the Trustee and the Guarantor", and by
deleting the third sentence thereof and replacing it with "The Master
Servicer may, by written notice to the Servicer, extend the time for or
waive the performance of any of the obligations of the Servicer
hereunder."
66. Section 12.5 (No Joint Venture; Limited Agency) is hereby amended by
replacing the word "Owner" with "Trustee, Trust Fund, Master Servicer or
Lehman Capital" in each instance.
67. New Sections 12.10 (Intended Third Party Beneficiaries), 12.11
(Guarantor Audit and Inspection Rights; Access to Financial Statements),
12.12 (Guarantor Right of Termination or Event of Default), 12.13 (Fees
for Failure to Provide Timely Reports), 12.14 (Confidentiality) and
12.15 (Deficiency Judgments) (are added to the Flow Servicing Agreement
to read as follows:
Section 12.10 Intended Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary, the
parties to this Agreement agree that it is appropriate, in
furtherance of the intent of such parties as set forth herein,
that the Master Servicer, the Trustee, the Guarantor and the
Directing Holder receive the benefit of the provisions of this
Agreement as intended third party beneficiaries of this Agreement
to the extent of such provisions. The Servicer shall have the same
obligations to the Master Servicer, the Trustee, the Guarantor and
the Directing Holder as if they were parties to this Agreement,
and the Master Servicer, the Trustee, the Guarantor and the
Directing Holder shall have the same rights and remedies to
enforce the provisions of this Agreement as if they were parties
to this Agreement. The Servicer shall only take direction from the
Master Servicer (if direction by the Master Servicer is required
under this Agreement) unless otherwise directed by this Agreement
or the Loss Mitigation Advisory Agreement. Notwithstanding the
foregoing, all rights and obligations of the Master Servicer and
the Trustee hereunder (other than the right to indemnification)
shall terminate upon termination of the Trust Agreement and of the
Trust Fund pursuant to the Trust Agreement, and all rights of the
Guarantor hereunder (other than the right to indemnification)
shall terminate upon termination of the Guaranty.
Section 12.11 Guarantor Audit and Inspection Rights: Access
to Financial Statements.
(a) During business hours, or at such other times as may be
reasonable under the applicable circumstances, and upon reasonable
advance notice to the Servicer, the Guarantor, with the assistance and
cooperation of an appropriate Servicing Officer or other financial
officer of the Servicer, shall have the right to (i) review and audit
the Servicer's servicing procedures as they relate to the Serviced
Mortgage Loans and (ii) examine and audit the Servicing Files and
related book, records and other information of the Servicer, but solely
as they relate to the Serviced Mortgage Loans and this Agreement.
(b) Within ninety days after the Closing Date, to the extent the
Servicing Files contain information relating to the underwriting
criteria used in the origination of each Mortgage Loan, the Guarantor
will have the right to review up to 800 of the Servicing Files and the
related underwriting documentation in order to ascertain whether each
such Mortgage Loan was originated generally in accordance with the
applicable underwriting standards. If the Guarantor determinates that
more than 20% (by number) of such 800 Mortgage Loans were not originated
in accordance with the applicable underwriting standards, the Guarantor
will have the right to review additional Servicing Files until the
Guarantor obtains a sample containing less than 20% (by number) of
Mortgage Loans not so originated.
(c) With respect to any Mortgage Loan that goes into foreclosure,
the Guarantor will have the right to request the Servicer to deliver a
copy of the related Servicing File to the Guarantor to review.
(d) Within thirty days of their issuance to the public (in the
event that Servicer is a SEC reporting company) or to its members or
stockholders, the Servicer shall make available to the Guarantor a copy
of its audited financial statements. The Servicer shall also make
available upon the request of the Guarantor any comparable interim
financial statements, but only to the extent that such statements have
been prepared by or on behalf of the Servicer in the normal course of
its business and are available upon request to its members or
stockholders or to the public at large.
Section 12.12 Guarantor Right of Termination or Declaration of
Event of Default.
Notwithstanding any other provision of this Agreement, in the
event either (i) any Class of Certificates issued by the Trust Fund with
an initial rating assigned by the Rating Agencies of "AA" (or an
equivalent rating) is downgraded to "A" (or an equivalent rating) or
lower, or (ii) a Realized Loss is applied to reduce the principal
balance of the Class B Certificates, the Guarantor, in its sole
discretion, shall have the right to terminate the Servicer or Servicers
(or any subservicers) of the Serviced Mortgage Loans to which such
applied Realized Loss is attributable and to appoint a successor
servicer in accordance with the procedures set forth in Section 10.4.
Section 12.13 Fees for Failure to Provide Timely Reports.
In the event the Master Servicer fails to provide certain reports
to the Guarantor accurately, completely and timely due to the Servicer's
failure to timely provide the necessary information to the Master
Servicer, and the Master Servicer is required to pay a fee to the
Guarantor, such fee shall be paid by the Servicer; provided, however,
that no more than one such fee shall be payable in any month. The fees
are as follows:
1. For the first such failure, the amount of $500; provided,
however, that the Master Servicer shall not be required to
make any such payment upon the first such failure during
each successive two-year period following the Closing Date.
2. For the second such failure, the amount of $750.
3. For the third such failure, the amount of $1,000.
Neither the Master Servicer nor the Servicer shall be required to
make any such payments upon the first such failure during each
successive two year period following the Closing Date.
Section 12.14 Confidentiality.
The Servicer and the Master Servicer shall keep the terms of this
Agreement and the Trust Agreement regarding fees and expenses
confidential to the extent such information is not otherwise disclosed
in or pursuant to the Trust Agreement or any publicly available
documents.
Section 12.15. Deficiency Judgments.
Pursuant to the Trust Agreement, the Holders of the Subordinate
Certificates that are or may be affected by a Realized Loss on a
Liquidated Mortgage Loan are deemed to have repurchased the ownership
interest in such Liquidated Mortgage Loan held by Holders of the Senior
Certificates. In connection with the liquidation of a Mortgage Loan, if
(i) the Servicer is directed by the Master Servicer to seek a deficiency
judgment, (ii) the Servicer is offered suitable indemnification and
reimbursement for expenses from the Holders of Subordinate Certificates,
and (iii) such action is permitted by law, the Servicer shall seek a
deficiency judgment under such Liquidated Mortgage Loan on behalf of the
Holders of the Subordinate Certificates to the extent of any Realized
Loss.
<PAGE>
EXHIBIT A-1
MONTHLY REPORTING FORMAT TO NORWEST BANK
The format for the tape should be:
1. Record length of 240
2. Blocking factor of 07 records per block
3. ASCII
4. Unlabeled tape
5. 6250 or 1600 BPI (please indicate)
<TABLE>
<CAPTION>
COBOL
Field Name Position Length "picture"
---------- -------- ------ ---------
<S> <C> <C> <C>
Master Servicer No. 001-002 2 "01"
Unit Code 003-004 2 " "
Loan Number 005-014 10 X(10)
Borrower Name 015-034 20 X(20)
Old Payment Amount 035-045 11 S9(9)V9(02)
Old Loan Rate 046-051 6 9(2)V9(04)
Servicer Fee Rate 052-057 6 9(2)V9(04)
Servicer Ending Balance 058-068 11 S9(9)V9(02)
Servicer Next Due Date 069-076 8 CCYYMMDD
Curtail Amt 1 - Before 077-087 11 S9(9)V9(02)
Curtail Date 1 088-095 8 CCYYMMDD
Curtail Amt 1 - After 096-106 11 S9(9)V9(02)
Curtail Amt 2 - Before 107-117 11 S9(9)V9(02)
Curtail Date 2 118-125 8 CCYYMMDD
Curtail Amt 2 - After 126-136 11 S9(9)V9(02)
Curtail Amt 3 - Before 137-147 11 S9(9)V9(02)
Curtail Date 3 148-155 8 CCYYMMDD
Curtail Amt 3 - After 156-166 11 S9(9)V9(02)
New Payment Amount 167-177 11 S9(9)V9(02)
New Loan Rate 178-183 6 9(2)V9(04)
Index Rate 184-189 6 9(2)V9(04)
Remaining Term 190-192 3 9(3)
Liquidation Amount 193-203 11 S9(9)V9(02)
Action Code 204-205 2 X(02)
Scheduled Principal 206-216 11 S9(9)V9(02)
Scheduled Interest 217-227 11 S9(9)V9(02)
Scheduled Ending Balance 228-238 11 S9(9)V9(02)
FILLER 239-240 2 X(02)
Trailer Record:
Number of Records 001-006 6 9(06)
FILLER 007-240 234 X(234)
</TABLE>
<PAGE>
Field Names and Descriptions:
<TABLE>
<CAPTION>
Field Name Description
---------- -----------
<S> <C>
Master Servicer No. Hard code as "01" used internally
Unit Code Hard code as " " used internally
Loan Number Investor's loan number
Borrower Name Last name of borrower
Old Payment Amount P&I amount used for the applied payment
Old Loan Rate Gross interest rate used for the applied payment
Servicer Fee Rate Servicer's fee rate
Servicer Ending Balance Ending actual balance after a payment has been applied
Servicer Next Due Date Borrower's next due date for a payment
Curtailment Amount 1 - Before Amount of curtailment applied before the payment
Curtailment Date 1 Date of curtailment should coincide with the payment date
applicable to the curtailment
Curtailment Amount 1 - After Amount of curtailment applied after the payment
Curtailment Amount 2 - Before Amount of curtailment applied before the payment
Curtailment Date 2 Date of curtailment should coincide with the payment date
applicable to the curtailment
Curtailment Amount 2 - After Amount of curtailment applied after the payment
Curtailment Amount 3 - Before Amount of curtailment applied before the payment
Curtailment Date 3 Date of curtailment should coincide with the payment date
applicable to the curtailment
Curtailment Amount 3 - After Amount of curtailment applied after the payment
New Payment Amount For ARM, Equal, or Buydown loans,
when a payment change occurs, this
is the scheduled payment
New Loan Rate For ARM loans, when the gross
interest rate change occurs, this
is the scheduled rate
Index Rate For ARM loans, the index rate used in calculating the new
gross interest rate
Remaining Term For ARM loans, the number of months left on the loan used
to determine the new P&I amount
Liquidation Amount The payoff amount of the loan
Action Code For delinquent loans:
12 -- Relief Provisions
15 -- Bankruptcy/Litigation
20 -- Referred for Deed-in-lieu, short sale
30 -- Referred to attorney to
begin foreclosure
60 -- Loan Paid in full
70 -- Real Estate Owned
Scheduled Principal Amount of principal from borrower payment due to
bondholder
Scheduled Interest Amount of interest from borrower payment due to bondholder
Scheduled Ending Balance Ending scheduled balance of loan
FILLER Should be filled with spaces
</TABLE>
<PAGE>
Delinquency Reporting Data Fields to be
provided to Master Servicer
Servicer Loan #
Investor Loan #
Borrower Name
Address
State
Due Date
Action Code
FC Received
File Referred to Atty
NOD
Complaint Filed
Sale Published
Target Sale Date
Actual Sale Date
Loss Mit Approval Date
Loss Mit Type
Loss Mit Estimated Completion Date
Loss Mit Actual Completion Date
Loss Mit Broken Plan Date
BK Chapter
BK Filed Date
Post Petition Due
Motion for Relief
Lift of Stay
RFD
Occupant Code
Eviction Start Date
Eviction Completed Date
List Price
List Date
Accepted Offer Price
Accepted Offer Date
Estimated REO Closing Date
Actual REO Sale Date
<PAGE>
