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
WELLS FARGO HOME MORTGAGE, INC., a California corporation (formerly known as
Norwest Mortgage, Inc. and referred to herein as 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 Bank," 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, 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 Loan are currently being serviced by the
Servicer pursuant to a Seller's Warranties and Servicing Agreement between
Lehman Brothers Bank, FSB (the "Bank") and the Servicer, dated as of March 1,
2000 (DAcc 2000-WO2) (the "SWSA").
WHEREAS, pursuant to an Assignment, Assumption and Recognition
Agreement, dated as of May 1, 2000, the Bank has assigned all of its rights,
title and interest in the Serviced Mortgage Loans to Lehman Capital and
delegated all of its duties and obligations as purchaser under the SWSA to
Lehman Capital, and Lehman Capital has accepted such assignment and
delegation.
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 SWSA 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 SWSA between
Lehman Capital and the Servicer incorporated by reference herein (regardless
if such terms are defined in the SWSA), shall have the meanings 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 SWSA, except
as otherwise provided herein and on Exhibit A hereto, and that the provisions
of the SWSA, 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 Brothers Bank, FSB under the
SWSA to enforce the obligations of the Servicer under the SWSA and the term
"Purchaser" as used in the SWSA in connection with any rights of the Purchaser
shall refer to the Master Servicer except as otherwise specified in Exhibit A
hereto. The Master Servicer, with the prior written 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, as provided in Article X of the SWSA.
Notwithstanding anything herein to the contrary, in no event shall the Master
Servicer assume any of obligations of Lehman Brothers Bank, FSB under the
SWSA; 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 SWSA.
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 22102
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:
WELLS FARGO HOME MORTGAGE, INC.
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 SWSA
1. Unless otherwise specified herein, any provisions of the SWSA, including
definitions, relating to (i) representations and warranties relating to
the Mortgage Loans and not relating to the servicing of the Mortgage
Loans, (ii) Mortgage Loan repurchase obligations, (iii) Whole Loan and
Pass-Through Transfers and Reconstitution, and (iv) Assignments of
Mortgage, shall be disregarded. The exhibits to the SWSA 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 "Custodial Agreement" in Article I is hereby amended
in its entirety to read as follows:
Custodial Agreement: The custodial agreement relating to the
custody of the Serviced Mortgage Loans among U.S. Bank Trust
National Association, as Custodian, the Trustee and the Depositor.
4. The definition of "Custodian" in Article I is hereby amended in its
entirety to read as follows:
Custodian: U.S. Bank Trust National Association or its successor
in interest or assigns or any successor to the Custodian under the
Custodial Agreement as provided therein.
5. The definition of "Determination Date" in Article I is hereby amended in
its entirety to read as follows:
Determination Date: The last day of the related Due Period (or if
such last day is not a Business Day, the Business Day immediately
preceding such last day).
6. The definition of "First Remittance Date" in Article I is hereby amended
in its entirety to read as follows:
First Remittance Date: June 18, 2000.
7. The definition of "Mortgage Loan Documents" in Article I is hereby
amended by replacing the words "addenda and riders" with the words
"addenda, riders and modification agreements" in each instance.
8. The definition of "Opinion of Counsel" in Article I is hereby amended by
adding the words ", provided that any Opinion of Counsel relating to (a)
qualification of the Mortgage Loans in a REMIC or (b) compliance with
the REMIC Provisions, must be an opinion of counsel who (i) is in fact
independent of the Servicer and any master servicer of the Mortgage
Loans, (ii) does not have any material direct or indirect financial
interest in the Servicer or any master servicer of the Mortgage Loans or
in an affiliate of either and (iii) is not connected with the Servicer
or any master servicer of the Mortgage Loans as an officer, employee,
director or person performing similar functions" to the end of such
definition.
9. A new definition of "Prepayment Interest Shortfall Amount" is added to
Article I immediately following the definition of "PMI Policy" to read
as follows:
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part
during any Due Period, which Principal Prepayment was applied to
such Mortgage Loan prior to such Mortgage Loan's Due Date in such
Due Period, the amount of interest (net of the related Servicing
Fee for Principal Prepayments in full only) that would have
accrued on the amount of such Principal Prepayment during the
period commencing on the date as of which such Principal
Prepayment was applied to such Mortgage Loan and ending on the day
immediately preceding such Due Date, inclusive.
10. The definition of "Principal Prepayment Period" is hereby replaced in
its entirety by the following:
"The second day of the month immediately preceding the Remittance
Date to the first day of the month of the Remittance Date."
11. A new definition of "Realized Loss" is added to Article I immediately
following the definition of "Qualified Substituted Mortgage Loan" to
read as follows:
Realized Loss: With respect to each Liquidated Mortgage Loan
(as defined in the Trust Agreement), an amount equal to (i) the
unpaid principal balance of such Mortgage Loan as of the date of
liquidation, minus (ii) Liquidation Proceeds received, to the
extent allocable to principal, net of amounts that are
reimbursable therefrom to the Master Servicer or the Servicer with
respect to such Mortgage Loan (other than Monthly Advances of
principal) including expenses of liquidation.
12. The definition of "Remittance Date" in Article I is hereby amended by
deleting ", beginning with the first Remittance Date".
13. The definition of "REO Property" in Article I is hereby amended by
replacing the word "Purchaser" with "Trustee and the Trust Fund".
14. Section 2.01 (Conveyance of Mortgage Loans; Possession of Mortgage
Files; Maintenance of Servicing Files) is hereby amended by deleting the
first paragraph and replacing the word "Purchaser" with the words
"Trustee and the Trust Fund" in each instance.
15. Section 2.02 (Books and Records; Transfer of Mortgage Loans) is hereby
amended to change the word "FNMA" in the last sentence of the second
paragraph of such section to "FHLMC"; to change the reference to
"Purchaser" in the first paragraph and the second sentence of the second
paragraph of such section to "Trustee and the Trust Fund"; and by
amending the third paragraph of such section to read as follows:
The Servicer shall maintain with respect to each Serviced Mortgage
Loan and shall make available for inspection by the Master
Servicer or its designee the related Servicing File during the
time the Trust Fund retains ownership of a Mortgage Loan and
thereafter in accordance with applicable laws and regulations.
The parties acknowledge that the fourth paragraph of Section 2.02 shall be
inapplicable to this Agreement.
16. The parties acknowledge that Section 2.03 (Custodial Agreement; Delivery
of Documents) shall be superceded by the provisions of the Custodial
Agreement.
17. Section 3.01(c) (No Conflicts) is hereby amended by deleting the words
"the acquisition of the Mortgage Loans by the Company, the sale of the
Mortgage Loans to the Purchaser".
18. Section 3.01(d) (Ability to Service) is hereby amended by deleting the
words "FNMA or" in each instance.
19. Section 3.01(f) (Ability to Perform) is hereby amended by deleting the
second and third sentences thereof.
20. Section 3.01(h) (No Consent Required) is hereby amended by deleting the
words "or the sale of the Mortgage Loans".
21. A new paragraph is hereby added at the end of Section 3.01 (Company
Representations and Warranties) to read as follows:
It is understood and agreed that the representations and
warranties set forth in Section 3.01 (a) through (h), (l) and (o)
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, the Trust Fund and the Master Servicer. 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 3.01 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 12.01.
In addition, the Servicer shall indemnify (from its own
funds) the Trustee, the Trust Fund, the Guarantor and 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
3.01 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 3.01 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 or the Master Servicer for
compliance with this Agreement.
22. Section 4.01 (Company to Act as Servicer) is hereby amended by (i)
replacing the word "Purchaser" in the fifth and 21st lines of the second
paragraph thereto with "Trustee and the Trust Fund", (ii) adding a new
sentence after the first sentence of the second paragraph thereto to
read as follows:
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.
and (iii) replacing the word "Purchaser" in the 23rd line of the second
paragraph thereto with "Trustee".
23. Section 4.02 (Liquidation of Mortgage Loans) is hereby amended by (i)
adding the following to the end of the second sentence thereto:
no later than such 90th day; provided, however, that the Company
is required to commence foreclosure proceedings on the 65th day of
such delinquency if the Company determines no alternative
resolution strategy would be effective.
(ii) replacing the word "Purchaser" in the seventh and nineteenth
lines of the first paragraph thereto with "Trustee and the Trust
Fund", (iii) replacing the word "Purchaser" in the second sentence of
the second paragraph thereto with "Trust Fund", (iv) replacing the
word "Purchaser" in the last sentence of the second paragraph and the
first line of the third paragraph thereto with "Master Servicer and
Guarantor", and (v) replacing the word "Purchaser" in the fourth line
of the third paragraph thereto with "Master Servicer, with the
Guarantor's consent".
24. Section 4.04 (Establishment of and Deposits to Custodial Account) is
hereby amended as follows:
(a) the words "in trust for the Purchaser and/or subsequent
purchasers of Mortgage Loans, and various Mortgagors-P&I" in
the fourth and fifth lines of the first sentence of the
first paragraph shall be replaced by the following: "in
trust for Norwest Bank Minnesota, National Association, as
Master Servicer for the ARC 2000-BC2 Trust".
(b) by amending clause (ix) to read as follows:
(ix) the amount of any Prepayment Interest Shortfall
Amount;
(c) by adding the word "and" after the semi-colon in clause (x)
and designating the two lines after clause (x) as clause
(xi).
25. Section 4.05 (Permitted Withdrawals From Custodial Account) is hereby
amended by (i) adding the following to the beginning of clause (i):
(a) to pay any outstanding MGIC Insurance Premiums, and (b)
and (ii) replacing the last five lines of clause (ii) with the following:
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 Custodial 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;
26. Section 4.06 (Establishment of and Deposits to Escrow Account) shall be
amended by deleting the words "Purchaser and/or subsequent purchasers of
Residential Mortgage Loans, and various Mortgagors-T&I" in the fourth
and fifth lines of the first sentence of the first paragraph, and
replacing it with the following:
"in trust for Norwest Bank Minnesota, National Association, as
Master Servicer for the ARC 2000-BC2 Trust".
27. Section 4.09 (Protection of Accounts) is hereby amended by replacing the
word "Purchaser" in the third line thereto with "Trustee and the Trust
Fund".
28. Section 4.10 (Maintenance of Hazard Insurance) is hereby amended by
adding two new sentences to the end of the first paragraph to read as
follows:
The Company acknowledges that it is holding such policies for the
benefit of the Trust Fund. In the event a new hazard insurance
policy is obtained, such insurer must be acceptable to FHLMC.
29. Section 4.13 (Inspections) is hereby amended by replacing the words
"FNMA or" with "FHLMC".
30. Section 4.14 (Restoration of Mortgaged Property) is hereby amended by
replacing the word "Purchaser" in the last sentence thereto with
"Trustee or Trust Fund".
31. Section 4.15 (Maintenance of PMI Policy; Claims) is hereby amended by
replacing the word "Purchaser" in the second and seventh lines thereto
with "Master Servicer, Trustee or Trust Fund".
32. Section 4.16 (Title, Management and Disposition of REO Property) is
hereby amended by (i) replacing the word "Purchaser" in the first
paragraph thereto with "Trust Fund", (ii) replacing the word "Purchaser"
in the second and last lines of the third paragraph thereof with "Trust
Fund", (iii) replacing the reference to "one year" in the eighth line of
the third paragraph thereof with "three years" and (iv) adding two new
paragraphs after the third paragraph thereof to read as follows:
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.
(v) deleting the first sentence of the fourth paragraph thereto, (vi)
replacing the word "sentence" with "paragraph" in the sixth line of the fourth
paragraph thereto, (vii) replacing the word "Purchaser" in the third line of
the sixth paragraph thereto with "Trust Fund" and (viii) replacing the word
"advances" in the sixth line of the sixth paragraph thereof with "Monthly
Advances".
33. Section 4.17 is hereby amended by replacing the words "Remittance Date"
with "tenth calendar day of".
34. A new Section 4.21 (Credit Reporting) is hereby added to read as
follows:
Section 4.21 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.
35. Section 5.01 (Remittances) is amended by adding the following sentence
as the last sentence of the first paragraph thereof:
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
36. Section 5.02 (Statements to Purchaser) is hereby amended in its entirety
to read as follows:
Section 5.02 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 returns as the Master Servicer may reasonably
request from time to time.
37. Section 5.03 (Monthly Advances by Company) is hereby amended by (i)
inserting the following after the second sentence thereof:
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 Custodial Account an amount equal to all Monthly Advances
previously made out of funds held in the Custodial 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.
(ii) deleting the words "if requested by a Rating Agency
(hereinafter defined) or a guarantor in connection with a
securitization," from the third sentence thereto; and
(iii) deleting the last sentence thereto.
38. Section 6.02 (Satisfaction of Mortgages and Release of Mortgage Files)
is hereby amended by replacing the word "Purchaser" in the third line of
the second paragraph thereto with the word "Trust Fund".
39. Section 6.04 (Annual Statement as to Compliance) is hereby amended by
replacing the words "May 31, 2000" in the second line of the first
sentence thereof with the words "May 31, 2001".
40. Section 6.05 (Annual Independent Accountants' Servicing Report) is
hereby amended by replacing the words "May 31, 2000" in the first line
of the first sentence thereof with the words "May 31, 2001".
41. A new Section 7.03 (Compensating Interest) is added to Article VII to
immediately follow Section 7.02 and to read as follows:
Section 7.03 Compensating Interest
The Servicer shall deposit in the Custodial 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 distribution. Such deposit shall be made from the
Servicer's own funds, without reimbursement therefor up to a
maximum amount of the Servicing Fee actually received for such
month for the Mortgage Loans.
42. Section 8.01 (Indemnification; Third Party Claims) is amended by
replacing the word "Purchaser" in the first line thereof with the words
"Trust Fund, Trustee, Guarantor and Master Servicer"; by replacing the
word "Purchaser" in the third line thereof with the words "Trust Fund,
Master Servicer or Guarantor"; by changing the word "Purchaser" in the
tenth line thereof to "Master Servicer, Trustee, Guarantor or Trust
Fund"; and by changing the word "Purchaser" in the last sentence of such
Section to "Trust Fund."
43. Section 8.03 (Limitation on Liability of Company and Others) is amended
by changing the word "Purchaser" in the second line thereof to "Trust
Fund, the Trustee or the Master Servicer"; and by changing the word
"Purchaser" in the sixteenth line thereof to "Trust Fund."
44. Section 8.04 (Limitation on Resignation and Assignment by Company) is
hereby amended by replacing the word "Purchaser" in the seventh line of
the first paragraph thereof and the second line of the second paragraph
thereto with "Master Servicer, the Trustee and the Guarantor".
45. Section 11.01 (Termination) is hereby amended by restating subclause
(ii) thereof to read as follows:
(ii) mutual consent of the Servicer and the Trustee in writing,
provided such termination is also acceptable to the Master
Servicer, the Guarantor and the Rating Agencies.
46. The first paragraph of Section 11.02 (Termination Without Cause) is
hereby deleted and replaced with the following:
With the prior written consent of the Guarantor, the
Directing Holder may terminate the rights and obligations of the
Servicer under this Agreement. Any such termination shall be with
30 days' prior notice, in writing and delivered to the Trustee,
the Guarantor, the Master Servicer and the Servicer by registered
mail as provided in Section 12.05. The Servicer shall comply with
the termination procedures set forth in Section 12.01 hereof. The
Master Servicer or the Trustee shall have no right to terminate
the Servicer pursuant to the foregoing sentences of this Section
11.02.
The second paragraph of Section 11.02 is amended by replacing the
word "Purchaser" with "Directing Holder from its own funds without
reimbursement."
47. Section 11.03 is hereby amended by replacing the first paragraph thereof
with the following:
Subject to the requirements set forth in this Section 11.03, the
Directing Holder may terminate this Agreement, with the prior written
consent of the Master Servicer, the Trustee, the Guarantor and the
Depositor, with respect to the servicing of those Mortgage Loans that
are determined to be Distressed Mortgage Loans as of the Notice Date and
servicing of such Mortgage Loans will be transferred to the Special
Servicer. The appointment of a Special Servicer by the Directing Holder
and the execution of a special servicing agreement between the Directing
Holder and the Special Servicer shall be subject to the consent of the
Master Servicer, the Trustee, the Guarantor and the Depositor, and the
receipt of confirmation from the Rating Agencies that the transfer of
servicing to the Special Servicer shall not result in a reduction of any
rating previously given by such Rating Agency to any Certificate. Any
monthly fee paid to the Special Servicer in connection with any Mortgage
Loan serviced by such Special Servicer shall not exceed one-twelfth of
the product of (a) 0.50% and (b) the outstanding principal balance of
such Mortgage Loan.
All reasonable costs and expenses incurred in connection with a
transfer of servicing to the Special Servicer including, without
limitation, the costs and expenses of the Master Servicer or any other
Person in appointing a Special Servicer, or of transferring the
Servicing Files and the other necessary data to the Special Servicer
shall be paid by the Directing Holder from its own funds without
reimbursement.
The Directing Holder shall be responsible for the delivery of all
required Transfer Notices and will send a copy of the Transfer Notice to
the Master Servicer.
48. Section 12.01 (Successor to Company) is hereby amended by:
(i) replacing the words "Prior to" with "Upon" in the first line
of the first paragraph thereto;
(ii) replacing the reference to the words "Section 11.02" with
"Section 12.14" in the second line thereof;
(iii) adding the words ", in accordance with the Trust Agreement,"
after the word "shall" in the second line of the first
paragraph thereto;
(iv) adding the following new sentences immediately following the
first sentence of the first paragraph thereof to read as
follows:
Prior to termination of the Servicer's responsibilities,
rights, duties and obligations under this Agreement pursuant to
Section 11.02, 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. Any successor to the Servicer shall be subject to
the approval of the Master Servicer, the Depositor, the Guarantor
and each Rating Agency, as evidenced by a letter from such Rating
Agency delivered to the Trustee that the transfer of servicing
will not result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Certificates.
(v) amending the existing second sentence of the first paragraph
thereof by (a) changing the word "Purchaser" to "the
Depositor and the Master Servicer" and (b) by adding the
following proviso at the end of such sentence:
; provided, however, that no such compensation shall be in
excess of that permitted the Servicer under this Agreement.
(vi) replacing the word "Purchaser" in the second line of the
second paragraph thereof with "Trustee and Master Servicer".
(vii) adding the following new sentence at the end of the third
paragraph thereof:
In the event the Servicer is terminated pursuant to Section
11.02, the Directing Holder shall be responsible for payment of
any out-of-pocket costs from its own funds without reimbursement
incurred by the Servicer and the Master Servicer in connection
with the transfer of the Serviced Mortgage Loans to a successor
servicer.
Except as otherwise provided in the 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.
49. Section 12.02 (Amendment) is hereby amended by replacing the words "by
the Company and by written agreement signed by the Company and the
Purchaser" with "written agreement by the Servicer and Lehman Capital,
with the written consent of the Master Servicer, the Trustee and the
Guarantor".
50. Section 12.03 (Governing Law) is hereby amended by deleting the first
sentence thereof.
51. Section 12.04 (Duration of Agreement) is hereby amended by deleting the
last sentence thereof.
52. Section 12.07 (Relationship of Parties) is hereby amended by replacing
the words "the Purchaser" with "Lehman Capital, the Master Servicer, the
Trustee or the Trust Fund".
53. Section 12.10 (Assignment by Purchaser) is hereby deleted in its
entirety.
54. Section 12.11 (Solicitation of Mortgagor) is hereby amended by replacing
the word "Purchaser" with "Lehman Capital or the Trustee" in each
instance.
55. New Sections 12.12 (Intended Third Party Beneficiaries), 12.13
(Guarantor Audit and Inspection Rights; Access to Financial Statements),
12.14 (Guarantor Rights of Termination or Declaration of Event of
Default), 12.15 (Fees for Failure to Provide Timely Reports), 12.16
(Confidentiality) and 12.17 (Deficiency Judgments) are added to the SWSA
to read as follows:
Section 12.12 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
Guarantor, the Trustee 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 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 12.13 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 knowledgeable
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 determines 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 12.14 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 12.01.
Section 12.15 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. 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.
The Master Servicer shall not be required to make any such
payments upon the first such failure during each successive two year
period following the Closing Date.
Section 12.16 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 12.17. 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>
