EXHIBIT 99.3
EXECUTION
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered into
as of the 1st day of October, 2000, by and between LEHMAN CAPITAL, A DIVISION
OF LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation ("Lehman Capital"),
and CHASE MANHATTAN MORTGAGE CORPORATION, a New Jersey corporation (the
"Servicer"), having an office at 343 Thornall Street, Edison, New Jersey
08837, recites and provides as follows:
RECITALS
WHEREAS, Lehman Brothers Bank, FSB ("Bank") acquired certain first lien,
adjustable rate residential mortgage loans from the Servicer, which mortgage
loans were either originated or acquired by the Servicer.
WHEREAS, such mortgage loans are currently serviced by the Servicer for
the Bank pursuant to a Mortgage Loan Purchase, Warranties and Servicing
Agreement (Whole Loan Series 2000-WL-1) (the "Servicing Agreement"), dated as
of October 1, 2000 and annexed as Exhibit B hereto, by and between Bank, as
purchaser, and the Servicer, as seller and servicer.
WHEREAS, pursuant to an Assignment, Assumption and Recognition Agreement,
dated as of October 30, 2000 (the "Assignment and Assumption Agreement") and
annexed as Exhibit C hereto, Lehman Capital acquired from Bank all of Bank's
right, title and interest in and to certain of the mortgage loans currently
serviced under the Servicing Agreement (hereinafter, the "Mortgage Loans") and
assumed for the benefit of each of the Servicer and the Bank the obligations
of the Bank as owner of the Mortgage Loans pursuant to such Servicing
Agreement.
WHEREAS, Lehman Capital has conveyed all of the 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 The Chase Manhattan
Bank (the "Trustee"), pursuant to a trust agreement dated as of October 1,
2000 (the "Trust Agreement"), among the Trustee, Aurora Loan Services Inc., as
master servicer ("Aurora," and, together with any successor Master Servicer
appointed pursuant to the provisions of the Trust Agreement, the "Master
Servicer"), and SASCO.
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 Lehman Capital (with the consent of the Master Servicer) to
terminate the rights and obligations of the Servicer hereunder at any time
without cause and to the other conditions set forth herein.
WHEREAS, Lehman Capital and the Servicer agree that the provisions of the
Servicing Agreement shall continue to apply to the Serviced Mortgage Loans,
but only to the extent provided herein and that this Agreement shall
constitute a "reconstitution" of the Mortgage Loans (as such term is defined
in Section 11.01 of the Servicing 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 the
conditions specified herein to terminate for cause the rights and obligations
of the Servicer under this Agreement.
WHEREAS, Lehman Capital and the Servicer intend that each of the Master
Servicer and the Trustee 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 Servicing Agreement
incorporated by reference herein (regardless of whether such terms are defined
in the Servicing Agreement), shall have the meanings ascribed to such terms in
the Trust Agreement.
2. Custodianship. The parties hereto acknowledge that LaSalle Bank, N.A.
will act as custodian of the Serviced Mortgage Files for the Trustee pursuant
to a Custodial Agreement, dated October 1, 2000, among The Chase Manhattan
Bank, the Trustee and SASCO, as depositor of the Trust Fund.
3. 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 Servicing
Agreement, except as otherwise provided herein and on Exhibit A hereto, and
that the provisions of the 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.
4. Trust Cut-off Date. The parties hereto acknowledge that by operation
of Section 4.04 and Section 5.01 of the Servicing Agreement, the remittance on
November 20, 2000 to the Trust Fund is to include principal collected after
October 1, 2000 (the "Trust Cut-off Date") through the preceding Determination
Date plus interest, at the Mortgage Loan Remittance Rate collected through
such Determination Date exclusive of any portion thereof allocable to a period
prior to the Trust Cut-off Date, with the adjustments specified in clauses
(ii), (iii) and (iv) of Section 5.01 of the Servicing Agreement.
5. 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 SASCO 2000-5 Trust Fund (the "Trust Fund") created pursuant to
the Trust Agreement, shall have the same rights as Lehman Capital, as
purchaser, under the Servicing Agreement to enforce the obligations of the
Servicer under the Master Servicing Agreement and the term "Purchaser" as used
in the Master Servicing Agreement in connection with any rights of the
Purchaser shall refer to the Trust Fund or, as the context requires, the
Master Servicer or the Trustee acting in its capacity as agent for the Trust
Fund, except as otherwise specified in Exhibit A hereto. The Master Servicer
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 an Event of Default
as provided in Article IX of the Servicing Agreement. Notwithstanding anything
herein to the contrary, in no event shall the Master Servicer assume any of
the obligations of Lehman Capital under the Servicing Agreement 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.
6. 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 (other than those
representations and warranties made by the Servicer in Section 3.02 of the
Servicing Agreement) in connection with the transactions contemplated by the
Trust Agreement and issuance of the Certificates issued pursuant thereto.
7. 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.
All notices required to be delivered to the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Aurora Loan Services Inc.
2530 South Parker Road
Suite 601
Aurora, Colorado 80014
Attention: E. Todd Whittemore, Master Servicing, SASCO/ALS 2000-5
Telephone: (303) 632-3000
Telecopier: (303) 632-3001
All remittances required to be made to the Master Servicer under this
Agreement shall be made on a scheduled/scheduled basis to the following wire
account:
The Chase Manhattan Bank
New York, New York
ABA#: 021-000-021
Account Name: Aurora Loan Services Inc., Master Servicing Payment
Clearing Account
Account Number: 066-661059
Beneficiary: Aurora Loan Services Inc.
For further credit to: SASCO/ALS 2000-5
All notices required to be delivered to the Trustee hereunder shall be
delivered to the Trustee at the following address:
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attn: Capital Markets Fiduciary Services/SASCO 2000-5
All notices required to be delivered to Lehman Capital hereunder shall be
delivered to Lehman Capital at the following address:
Lehman Capital, a Division of Lehman
Brothers Holdings Inc.
2000 Vesey Street
New York, New York 10285-0900
Attention: Mortgage Backed Finance Department
Telephone: (212) 526-7000
Telecopier: (212) 528-7209
All notices required to be delivered to the Servicer hereunder shall be
delivered to the address of its office as set forth in the first paragraph of
this Agreement.
8. 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.
9. 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.
<PAGE>
Executed as of the day and year first above written.
LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC., as
Owner
By: /s/ Stanley Labanowski
-----------------------------------------
Name: Stanley Labanowski
Title: Authorized Signatory
CHASE MANHATTAN MORTGAGE
CORPORATION, as Servicer
By: /s/ Michael D. Katz
-----------------------------------------
Name: Michael D. Katz
Title: Senior Vice President
Acknowledged By:
AURORA LOAN SERVICES INC.,
as Master Servicer
By: /s/ Ralph A. Lenzi
----------------------------------
Name: Ralph A Lenzi III
Title: CEO
THE CHASE MANHATTAN BANK
as Trustee
By: /s/ Karen Dobres
-----------------------------------
Name: Karen Dobres
Title: Trust Officer
<PAGE>
EXHIBIT A
Modifications to the Servicing Agreement
1. Master Servicer as Agent of the Trust Fund. The parties hereto
acknowledge that all consents, approvals, recommendations and directions
required to be obtained by the Servicer from the Purchaser pursuant to
Articles IV, V and VI of the Servicing Agreement shall be obtained by the
Servicer from the Master Servicer in its capacity as master servicer of
the Trust Fund.
2. The second paragraph of Section 4.01 (Seller to Act as Servicer) is
hereby amended and restated in its entirety to read as follows:
Consistent with the terms of this Agreement, the Seller may waive
any late payment charge, assumption fee or other fee that may be
collected in the ordinary course of servicing the Mortgage Loans. The
Seller shall not make any future advances to any obligor under any
Mortgage Loan, and (unless the Mortgagor is in default with respect to
the Mortgage Loan or such default is, in the judgment of the Seller,
reasonably foreseeable) the Seller shall not permit any modification of
any material term of any Mortgage Loan, including any modification that
would change the Mortgage Interest Rate, defer or forgive the payment of
principal or interest, reduce or increase the outstanding principal
balance (except for actual payments of principal) or change the final
maturity date on such Mortgage Loan. In the event of any such
modification which permits the deferral of interest or principal payments
on any Mortgage Loan, the Seller shall, on the Business Day immediately
preceding the Remittance Date in any month in which any such principal or
interest payment has been deferred, deposit in the Custodial Account from
its own funds, in accordance with Section 4.04, an amount equal to the
difference between (a) such month's principal and one month's interest at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Seller shall
be entitled to reimbursement for such advances to the same extent as for
all other advances made pursuant to Section 4.05. Without limiting the
generality of the foregoing, the Seller shall continue, and is hereby
authorized and empowered, to execute and deliver on behalf of itself and
the Trustee, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged
Properties. Upon the request of the Seller, the Trustee shall execute and
deliver to the Seller any powers of attorney and other documents,
furnished to it by the Seller and reasonably satisfactory to the Trustee,
necessary or appropriate to enable the Seller to carry out its servicing
and administrative duties under this Agreement.
3. Section 6.05 (Annual Independent Certified Public Accountants' Servicing
Report) is hereby amended by changing the reference to "Purchaser"
therein to the "Master Servicer".
4. Section 8.01 (Indemnification; Third Party Claims) is hereby amended and
restated in its entirety to read as follows:
The Servicer shall indemnify the Trust Fund, the Trustee and the
Master Servicer and hold each of them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgements, and any other costs,
fees and expenses, as applicable to such indemnified party's interest,
that any of such parties may sustain in any way related to the failure of
the Servicer to perform its duties and service the Mortgage Loans during
the Interim Servicing Period in strict compliance with the terms of this
Agreement. The Servicer further agrees to indemnify the Trust Fund, the
Trustee, the Master Servicer, and Lehman Capital and hold each such
parties harmless against any and all claims, losses, damages, penalties,
fees; forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses, as applicable to such indemnified party's
interest, that such parties may sustain in any way related to a breach of
a representation and warranty set forth in Section 3.01 or Section 3.02
of this Agreement. The Servicer immediately shall notify the Master
Servicer if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent
of the indemnified party) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgement or decree which may be entered
against it or any of such parties in respect of such claim. The Servicer
shall follow any written instructions received from the Master Servicer
in connection with such claim but shall only be required to make advances
in connection with the defense of such claim if the Servicer in its
reasonable judgment determines that reimbursement of such advances will
be recoverable from the Trust Fund (or Lehman Capital or the Master
Servicer acting on behalf of the Trust Fund). The Trustee from the assets
of the Trust Fund promptly shall reimburse the Servicer for all amounts
advanced by it pursuant to the preceding sentence except, to the extent
of any losses related to the Servicer's wrongdoing, when the claim is in
any way related to the Servicer's indemnification for breaches of a
representation or warranty set forth in Section 3.01 or Section 3.02 or
the failure of the Servicer to service and administer the Mortgage Loans
in strict compliance with the terms of this Agreement, or the gross
negligence, bad faith or willful misconduct of the Servicer.
The Trust Fund, Lehman Capital and the Master Servicer shall each
respectively indemnify the Servicer and hold it harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that the Servicer may sustain in any way related
to such party's failure to perform its respective duties in compliance
with the terms of this Agreement, or, in the case of the Master Servicer,
to master service and administer the Mortgage Loans in compliance with
this Agreement and the Trust Agreement. The provisions of this Section
8.01 shall survive termination of this Agreement..
5. Section 9.01 is hereby amended by changing all references to "Purchaser"
in the paragraph following clause (ix) of such section to "Master
Servicer."
6. Section 9.02 (Waiver of Default) is hereby amended by changing the
reference to "Purchaser" therein to the "Master Servicer".
7. Section 10.02 (Termination Without Cause) is hereby amended by (i)
changing all references to "Purchaser" in such section to "Lehman
Capital" and (ii) replacing the first sentence thereof with the
following: "Lehman Capital may, with the prior written consent of the
Master Servicer and the Trustee, terminate any rights the Seller may have
hereunder, without cause, upon written notice."
8. Section 12.01 (Successor to the Seller) is hereby amended in its entirety
to read as follows:
Simultaneously with the termination of the Servicer's
responsibilities and duties under this Agreement (a) pursuant to Sections
4.13, 8.04, 9.01, 10.01 or 10.02, 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 set forth in Sections 8.02
hereof and (ii) and which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Servicer under this
Agreement 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, Lehman Capital, the
Trustee 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 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
the Mortgage 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 12.01 and shall
in no event relieve the Servicer of the representations and warranties
made pursuant to Section 3.01, 3.02 and 3.03 and the remedies available
to the Trustee under Section 8.01, it being understood and agreed that
the provisions of such Sections 3.01, 3.02, 3.03 and 8.01 shall be
applicable to the Servicer, with respect to the period prior to the
Servicer's resignation or removal, 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 90
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 Custodial Account or any Escrow Account or thereafter
received with respect to the Mortgage Loans.
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 3.01 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 4.13, 8.04, 9.01, 10.01 or 10.02 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 (i) within three (3) Business Days to the
successor Servicer the funds in the Custodial Account and Escrow Account
and (ii) within a reasonable period of time, but in no event longer than
90 days of the appointment of a successor servicer, all Mortgage 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.
Except as otherwise provided in this Agreement, all reasonable costs
and expenses incurred in connection with any transfer of servicing
hereunder as a result of termination or removal of the Servicer for cause
pursuant to Section 9.01 of this Servicing Agreement, 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 Servicer from its own
funds without reimbursement.
<PAGE>
EXHIBIT B
Mortgage Loan Purchase, Warranties and Servicing Agreement
<PAGE>
LEHMAN BROTHERS BANK, FSB
Purchaser,
CHASE MANHATTAN MORTGAGE CORPORATION,
Seller and Servicer
MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of October 1, 2000
Whole Loan Series 2000-WL-1
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms..............................................1
ARTICLE II
SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY
OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Agreement to Purchase.....................................12
Section 2.02 Purchase Price............................................12
Section 2.03 Servicing of Mortgage Loans...............................13
Section 2.04 Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files............................13
Section 2.05 Books and Records.........................................14
Section 2.06 Transfer of Mortgage Loans................................15
Section 2.07 Delivery of Mortgage Loan Documents.......................15
Section 2.08 Quality Control Procedures................................16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE; REVIEW
OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of the Seller..............17
Section 3.02 Representations and Warranties as to Individual
Mortgage Loans............................................19
Section 3.03 Repurchase; Substitution..................................28
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01 Seller to Act as Servicer................................30
Section 4.02 Collection of Mortgage Loan Payments.....................32
Section 4.03 Realization Upon Defaulted Mortgage Loans................32
Section 4.04 Establishment of Custodial Accounts;
Deposits in Custodial Accounts...........................33
Section 4.05 Permitted Withdrawals From the Custodial Account.........35
Section 4.06 Establishment of Escrow Accounts; Deposits
in Escrow Accounts.......................................36
Section 4.07 Permitted Withdrawals From Escrow Account................36
Section 4.08 Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Mortgage Insurance Policies;
Collections Thereunder...................................37
Section 4.09 Transfer of Accounts.....................................38
Section 4.10 Maintenance of Hazard Insurance..........................38
Section 4.11 Maintenance of Mortgage Impairment Insurance Policy......39
Section 4.12 Fidelity Bond, Errors and Omissions Insurance............39
Section 4.13 Title, Management and Disposition of REO Property........40
Section 4.14 Notification of Maturity Date............................41
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01 Distributions............................................42
Section 5.02 Statements to the Purchaser..............................43
Section 5.03 Monthly Advances by the Seller...........................44
Section 5.04 Liquidation Reports......................................44
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements....................................45
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files..46
Section 6.03 Servicing Compensation...................................47
Section 6.04 Annual Statement as to Compliance........................47
Section 6.05 Annual Independent Certified Public Accountants'
Servicing Report.........................................47
Section 6.06 Purchaser's Right to Examine Seller Records..............48
Section 6.07 Annual Officer's Certificate.............................48
ARTICLE VII
Section 7.01 Seller Shall Provide Information as Reasonably Required..48
ARTICLE VIII
THE SELLER
Section 8.01 Indemnification; Third Party Claims......................49
Section 8.02 Merger or Consolidation of the Seller....................49
Section 8.03 Limitation on Liability of. the Seller and Others........50
Section 8.04 Seller Not to Assign or Resign...........................50
Section 8.05 No Transfer of Servicing.................................50
ARTICLE IX
DEFAULT
Section 9.01 Events of Default........................................51
Section 9.02 Waiver of Defaults.......................................53
ARTICLE X
TERMINATION
Section 10.01 Termination..............................................53
Section 10.02 Termination Without Cause................................53
ARTICLE XI
RECONSTITUTION OF MORTGAGE LOANS
Section 11.01 Reconstitution of Mortgage Loans.........................53
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to the Seller.................................54
Section 12.02 Amendment...............................................55
Section 12.03 Recordation of Agreement................................55
Section 12.04 Governing Law...........................................56
Section 12.05 Notices.................................................56
Section 12.06 Severability of Provisions..............................56
Section 12.07 Exhibits................................................57
Section 12.08 General Interpretive Principles.........................57
Section 12.09 Reproduction of Documents...............................57
Section 12.10 Confidentiality of Information..........................58
Section 12.11 Recordation of Assignments of Mortgage..................58
Section 12.12 Assignment by Purchaser.................................58
Section 12.13 No Partnership..........................................58
Section 12.14 Execution: Successors and Assigns.......................59
Section 12.15 Entire Agreement........................................59
Section 12.16 No Solicitation.........................................59
Section 12.17 Closing.................................................59
Section 12.18 Section 12.18 Intended Third Party Beneficiaries........60
EXHIBITS
A Contents of Mortgage File
B Custodial Account Letter Agreement
C Escrow Account Letter Agreement
D Form of Assignment and Assumption
E Form of Trial Balance
F Mortgage Loan Schedule
G Request for Release of Documents and
Receipt
H Pool Statistics
SCHEDULES
A Purchase Price and Terms Letter dated August 18, 2000 and revised as
of September 19, 2000
<PAGE>
This is a Mortgage Loan Purchase, Warranties and Servicing Agreement,
dated as of October 1, 2000, and is executed between Lehman Brothers Bank,
FSB, as Purchaser (the "Purchaser"), and Chase Manhattan Mortgage Corporation
(the "Seller"), as seller and servicer.
W I T N E S SE T H
WHEREAS, the Purchaser has heretofore agreed to purchase from the
Seller and the Seller has heretofore agreed to sell to the Purchaser certain
Mortgage Loans, exclusive of the servicing rights associated with such
Mortgage Loans, pursuant to the terms of a letter agreement dated as of August
18, 2000 and revised as of September 19, 2000 by and between the Seller and
the Purchaser (the "Purchase Price and Terms Letter").
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule,
which is annexed hereto as Exhibit F; and
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself and the
Mortgage Loans and the management, servicing, transfer and control of the
Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and the Seller agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings
specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices (including collection procedures) of
prudent mortgage banking institutions which service mortgage loans of the same
type as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located, and which are in accordance with FNMA servicing practices
and procedures, for MBS pool mortgages, as defined in the FNMA Guides
including future updates.
Adjustment Date: As to each Mortgage Loan, the date on which the
Mortgage Interest Rate is adjusted in accordance with the terms of the related
Mortgage Note.
Agreement: This Mortgage Loan Purchase, Warranties and Servicing
Agreement including all exhibits hereto, amendments hereof and supplements
hereto.
ALTA: The American Land Title Association or any successor thereto.
Applicable Requirements: Shall mean and include with respect to the
Mortgage Loans: (i) all contractual obligations of Seller, and the originator
and any Prior Servicers including, without limitation, those contractual
obligations contained in this Agreement, in any agreement with any insurer or
in the Mortgage Loan Documents, (ii) all applicable federal, state and local
legal and regulatory requirements (including statutes, rules, regulations and
ordinances) binding upon Seller, the Originator and any Prior Servicer; (iii)
all other applicable requirements and guidelines of each governmental agency,
board, commission, instrumentality and other governmental body or office
having jurisdiction, including without limitation those of any insurer; (iv)
all other applicable judicial and administrative judgments, orders,
stipulations, awards, writs and injunctions; and (v) Accepted Servicing
Practices.
Appraised Value: With respect to any Mortgaged Property, the lesser
of ( i) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage
Loan and (ii) the purchase price paid for the related Mortgaged Property by
the Mortgagor with the proceeds of the Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale or transfer of the Mortgage Loan.
Assignment and Assumption: An assignment and assumption agreement in
the form of Exhibit D hereto.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than: (i) a Saturday or Sunday, or (ii) a
legal holiday in the State of New York, or (iii) a day on which banks in the
State of New York are authorized or obligated by law or executive order to be
closed.
Closing Date: October 13, 2000, or such other date as shall be
mutually agreed upon by the parties hereto.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated
to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Custodial Account: Each separate demand account or accounts created
and maintained pursuant to Section 4.04 which shall be entitled "Chase
Manhattan Mortgage Corporation, in trust for the [Purchaser], Owner of Whole
Loan Series 2000-WL-1" and shall be established in an Eligible Account, in the
name of the Person that is the Purchaser with respect to the related Mortgage
Loans.
Cut-off Date: October 1, 2000
Determination Date: The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the
month of the related Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Remittance Date, the period
commencing on the second day of the month preceding the month of such
Remittance Date and ending on the first day of the month of the Remittance
Date.
Eligible Account: An account established and maintained: (a) within
FDIC insured accounts (or other accounts with comparable insurance coverage
acceptable to the Rating Agencies) created, maintained and monitored by the
Seller so that all funds deposited therein are fully insured, (b) with the
corporate trust department of a financial institution assigned a long-term
debt rating of not less than Baa3, and a short term debt rating of P3, from
Moody's Investors Services and, if ownership of the Mortgage Loans is
evidenced by mortgaged backed securities, the equivalent ratings of the rating
agencies, and held such that the rights of the Purchaser and the owner of the
Mortgage Loans shall be fully protected against the claims of any creditors of
the Seller and of any creditors or depositors of the institution in which such
account is maintained and (c) in a separate non-trust account without FDIC or
other insurance in an Eligible Institution. In the event that a Custodial
Account is established pursuant to clause (b) or (c) of the preceding
sentence, the Seller shall provide the Purchaser with written notice on the
Business Day following the date on which the applicable institution fails to
meet the applicable ratings requirements.
Eligible Institution: An institution having (i) the highest
short-term debt rating, and one of the two highest long-term debt ratings of
the Rating Agency; or (ii) with respect to any Custodial Account, an unsecured
long-term debt rating of at least one of the two highest unsecured long-term
debt ratings of the Rating Agencies.
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Chase Manhattan
Mortgage Corporation, in trust for the [Purchaser], Owner of Whole Loan Series
2000-WL-1, and various Mortgagors" and shall be established in an Eligible
Account, in the name of the Person that is the Purchaser with respect to the
related Mortgage Loans.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 9.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller
pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
First Remittance Date: November 18, 2000, or if such day is not a
Business Day, the first Business Day immediately succeeding such date.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
FNMA Guides: The FNMA Sellers, Guide and the FNMA Servicers' Guide
and all amendments or additions thereto.
GAAP: Generally accepted accounting procedures, consistently applied.
HUD: The United States Department of Housing and Urban Development or
any successor.
Index: On each Adjustment Date, the applicable index shall be a rate
per annum equal to the weekly average yield on U.S. Treasury securities
adjusted to a constant maturity of one year as made available by the Federal
Reserve Board, or, if not so published, as reported by any Federal Reserve
Bank or by any U.S. Government department or agency, for the week for which
such figures were most recently published or reported as of the date 45 days
prior to the Adjustment Date.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Lehman Capital: Lehman Capital, a division of Lehman Brothers
Holdings, Inc., a Delaware corporation.
Lifetime Rate Cap: As to each Mortgage Loan, the maximum Mortgage
Interest Rate over the term of such Mortgage Loan. Such maximum to range from
_____ to _____ with a weighted average equal to _____.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio of the original outstanding principal amount of the Mortgage Loan, to
the Appraised Value of the Mortgaged Property.
Margin: With respect to each Mortgage Loan, the fixed percentage
amount set forth in each related Mortgage Note which is added to the Index in
order to determine the related Mortgage Interest Rate, as set forth in the
Mortgage Loan Schedule.
Master Servicer: The Master Servicer identified by Purchaser with
respect to a reconstitution of the Mortgage Loans.
Monthly Advance: The aggregate of the advances made by the Seller on
any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan which is payable by a Mortgagor under the related
Mortgage Note.
Mortgage: With respect to a Mortgage Loan that is not a Coop Loan,
the mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on an unsubordinated estate in fee simple in real
property securing the Mortgage Note; except that with respect to real property
located in jurisdictions in-which the use of leasehold estates for residential
properties is a widely-accepted practice, the mortgage, deed of trust or other
instrument securing the Mortgage Note may secure and create a first lien upon
a leasehold estate of the Mortgagor.
Mortgage File: The mortgage documents pertaining to a particular
Mortgage Loan which are specified in Exhibit A hereto and any additional
documents required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or
blanket hazard insurance policy as required by Section 4.11.
Mortgage Interest Rate: The annual rate at which interest accrues on
any Mortgage Loan in accordance with the provisions of the related Mortgage
Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the Mortgage Loan, Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding
replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents listed in Exhibit A.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest remitted to the Purchaser, which shall be equal to
the Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans annexed hereto
as Exhibit F, such schedule setting forth the following information with
respect to each Mortgage Loan in the related Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the state
and zip code;
(4) a code indicating whether the Mortgaged Property is a single
family residence, a 2-4 family dwelling, a PUD, or a unit in a high-rise or
low-rise condominium project;
(5) the original months to maturity or the remaining months to
maturity from the Cut-off Date, in any case based on the original amortization
schedule, and if different, the maturity expressed in the same manner but
based on the actual amortization schedule;
(6) a code indicating whether the loan is an adjustable rate, fixed
rate or balloon Mortgage Loan;
(7) a code indicating the lien status of the Mortgage Loan;
(8) the Loan to Value Ratio at origination;
(9) the appraised value and purchase price, if applicable, of the
Mortgage Property;
(10) the Mortgage Interest Rate at the time of origination;
(11) the Mortgage Interest Rate as of the Cut-off Date;
(12) the origination date of the Mortgage Loan;
(13) the first payment date of the Mortgage Loan;
(14) the stated maturity date of the Mortgage Loan;
(15) the amount of the monthly principal and interest Payment as of
the Cut-Off Date;
(16) the amount of the monthly principal and interest Payment at the
time of origination;
(17) the scheduled next due date of the Mortgage Loan;
(18) the number of times thirty days delinquent in the past twelve
months;
(19) the original principal amount of the Mortgage Loan;
(20) the scheduled principal balance of the Mortgage Loan as of the
close of business on the Cut-off Date; after deduction of payments of
principal due on or before the Cut-off Date, whether or not collected, if
applicable;
(21) the Mortgage Loan purpose type;
(22) the Indices and Payment and Rate Adjustment Frequencies;
(23) the initial Interest Rate Adjustment Date;
(24) the next Interest Rate Adjustment Date;
(25) the Gross Margin;
(26) the minimum Mortgage Interest Rate under the terms of the
Mortgage Note;
(27) the maximum Mortgage Interest Rate under the terms of the
Mortgage Note;
(28) the Mortgage Interest Rate adjustment cap at the initial
Interest Rate Adjustment Date;
(29) the Mortgage Interest Rate adjustment cap at all subsequent
Interest Rate Adjustment Dates;
(30) the Lifetime Mortgage Interest Rate Cap;
(31) the occupancy status of the Mortgaged Property at the time of
origination;
(32) the Mortgagor's FICO score;
(33) a code indicating the Mortgage Insurance provider and percentage
of coverage, if applicable;
(34) the Mortgage Insurance Certificate Number;
(35) the loan documentation type;
(36) borrower Social Security Number;
(37) the monthly Servicing Fee, if provided.
With respect to the Mortgage Loans in the aggregate, the Mortgage
Loan Schedule shall set forth the following information, as of the Cut-off
Date:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans;
(4) the weighted average maturity of the Mortgage Loans;
(5) the weighted average months to next adjustment;
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Mortgage Loan that is not a
Co-op Loan, the underlying real property securing repayment of a Mortgage
Note, consisting of a single parcel of real estate considered to be real
estate under the laws of the State in which such real property is located,
which may include condominium units and planned unit developments, improved by
a residential dwelling; except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, a leasehold estate of the Mortgagor, the term
of which is equal to or longer than the term of the Mortgage.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization: A gradual increase in the mortgage debt that
occurs when the monthly fixed installment is not sufficient for full
application to both principal and interest. The interest shortage is added to
the unpaid principal balance to create "negative" amortization.
OCC: office of the Comptroller of the Currency, its successors and
assigns.
Officers, Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President
or a Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Seller, and delivered to
the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Purchaser, 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 the Master Servicer of the Mortgage Loans, (ii) does not
have any material direct or indirect financial interest in the Servicer or the
Master Servicer of the Mortgage Loans or in an affiliate of either and (iii)
is not connected with the Servicer or the Master Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar
functions. The cost of the preparation and delivery of any such opinion
requested by the Trustee shall be an expense of the trust Fund unless Lehman
Capital decides, in its own discretion, to bear such expense for the Trust
Fund, in which case any such cost will be borne by Lehman Capital.
Originator: Means, with respect to any Mortgage Loan, the entity(ies)
that (i) took the Mortgagor's loan application (ii) processed the Mortgagor's
loan application, or (iii) closed and/or funded the Mortgagor's Mortgage Loan.
OTS: Office of Thrift Supervision, its successors and assigns.
Periodic Rate Cap: As to each Mortgage Loan, the maximum increase or
decrease in the Mortgage Interest Rate on any Adjustment Date, starting with
the second Adjustment Date, which is 200 basis points (2%) above or below,
respectively, the Mortgage Interest Rate in effect during the immediately
preceding 12 month period.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that is subject to a voluntary (not including discounted payoffs)
Principal Prepayment in full or in part during the related Principal
Prepayment Period, which Principal Prepayment was applied to such Mortgage
Loan prior to such Mortgage Loan's Due Date in such related Principal
Prepayment 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.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
insurance represented to be in effect pursuant to the Mortgage Loan Schedule,
or any replacement policy therefor obtained by the Seller pursuant to Section
4.08 in each case, in a form acceptable to FNMA or FHLMC and issued by a
Qualified Insurer.
Prime Rate: The prime rate announced to be in effect from time to
time as published as the average rate in The Wall Street Journal (Northeast
Edition).
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan full or partial which is received in advance of its scheduled
Due Date, including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Principal Prepayment Period: With respect to any Remittance Date, the
calendar month immediately preceding the month in which the related Remittance
Date occurs.
Prior Servicer: Any Person that was a servicer of any Mortgage Loan
before Seller became the Servicer of the Mortgage Loan.
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals to this
Agreement.
Purchaser: Lehman Brothers Bank, FSB, its successors in interest and
assigns.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect in the mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
FIRREA and the regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by FNMA
and FHLMC.
Rating Agencies: Standard & Poor's Ratings Services, Moody's
Investors Service or, in the event that some or all ownership of the Mortgage
Loans is evidenced by mortgage-backed securities, the nationally recognized
rating agencies issuing ratings with respect to such securities, if any.
Regulation X: HUD regulations implementing RESPA.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in the Internal Revenue Code of 1986, as amended.
Remittance Date: The 18th day of any month, beginning with the First
Remittance Date, or if such 18th day is not a Business Day, the first Business
Day immediately succeeding such 18th day.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: Amounts received by the Seller in
connection with a related REO Disposition.
REO Property: A Mortgaged Property acquired by the Seller on behalf
of the Purchaser as described in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan, a price equal to
(i) the outstanding principal balance of the Mortgage Loan, plus (ii) interest
on such outstanding principal balance at the Mortgage Loan Remittance Rate
from the last date through which interest has been paid and distributed to the
Purchaser to the date of repurchase, plus, (iii) other unreimbursed advances
recoverable pursuant to Applicable Requirements, and third-party expenses
incurred in connection with the transfer of the Mortgage Loan being
repurchased; less amounts received or advanced in respect of such repurchased
Mortgage Loan which are being held in the Custodial Account for distribution
in the month of repurchase.
RESPA: Real Estate Settlement Procedure Act, as amended.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Seller's Officer's Certificate: A certificate signed by the Chairman
of the Board, President, any Vice President or Treasurer of Seller stating the
date by which Seller expects to receive any missing documents sent for
recording from the applicable recording office.
Servicer: Chase Manhattan Mortgage Corporation, its successors and
assigns.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys, fees and
disbursements) incurred in the performance by the Seller of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not
limited to, foreclosures, bankruptcies, condemnations, drug seizures,
elections, foreclosures by subordinate or superior lienholders, and other
legal actions incidental to the servicing of the Mortgage Loans (provided that
such expenses are reasonable and that the Seller specifies the Mortgage
Loan(s) to which such expenses relate, and provided further that any such
enforcement, administrative or judicial proceeding does not arise out of a
breach of any representation, warranty or covenant of the Seller hereunder),
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in full or partial satisfaction of the Mortgage, (d)
taxes, assessments, water rates., sewer rates and other charges which are or
may become a lien upon the Mortgaged Property, and Primary Mortgage Insurance
Policy premiums and fire and hazard insurance coverage, (e) any expenses
reasonably sustained by the Seller, as servicer, with respect to the
liquidation of the Mortgaged Property in accordance with the terms of this
Agreement and (f) compliance with the obligations under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Seller, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the Servicing
Fee Rate and (b) the outstanding principal balance of such Mortgage Loan. Such
fee shall be payable monthly, computed on the basis of the same principal
amount and period respecting which any related interest payment on a Mortgage
Loan is computed. The obligation of the Purchaser to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the extent permitted by Section 4.05) of such Monthly Payment collected by the
Seller, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum
equal to 25 basis points (0.25%).
Servicing File: With respect to each Mortgage Loan, the file retained
by the Seller consisting of originals of all documents in the Mortgage File
which are not delivered to the Purchaser and copies of the Mortgage Loan
Documents listed in Exhibit A, the originals of which are delivered to the
Purchaser or its designee pursuant to Section 2.04.
Servicing Officer: Any officer of the Seller involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Seller to the
Purchaser upon request, as such list may from time to time be amended.
Servicing Rights: Means the obligations to collect the payments for
the reduction of principal and application of interest, pay taxes and
insurance, remit collected payments, provide foreclosure services, provide
full escrow administration and otherwise administer the Mortgage Loans in
accordance with Applicable Requirements, together with the right to receive
the servicing fee income and any ancillary income arising from or connected to
the Mortgage Loans. Servicing Rights shall include retention of the related
escrow or impound accounts created and maintained by Seller with respect to
the Mortgage Loans for the deposit and retention of interest and principal,
taxes, assessments or grounds rents, hazard and mortgage insurance and other
related escrow or custodial items.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of such Mortgage Loan at the Cut-off
Date after giving effect to payments of principal due on or before such date,
whether or not received, minus (ii) all amounts previously distributed to the
Purchaser with respect to the Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Subservicer: Any subservicer which is subservicing the Mortgage Loans
pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 4.01.
Subservicing Agreement: An agreement between the Seller and a
Subservicer for the servicing of the Mortgage Loans.
Trust: Any trust identified by Purchaser into which Mortgage Loans
have been placed as part of a reconstitution.
Trust Agreement: The agreement pursuant to which the Trust is
created.
Trustee: Any trustee identified by Purchaser in connection with any
Trust.
Trust Fund: Any trust-fund identified by the Trustee with respect to
a Trust.
ARTICLE II
SERVICING OF MORTGAGE LOANS;
RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to purchase the
Mortgage Loans, exclusive of the servicing rights associated therewith, having
an aggregate principal balance on the Cut-off Date in an amount as set forth
in the Mortgage Loan Schedule. The Seller shall deliver the Mortgage Loan
Schedule for the Mortgage Loans to be purchased on the Closing Date to the
Purchaser at least two (2) Business Days prior to the Closing Date.
Section 2.02 Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Letter (subject to adjustment as
provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans listed on the attached Mortgage Loan
Schedule, after application of scheduled payments of principal due on or
before the Cut-off Date whether or not collected. The initial principal amount
of the Mortgage Loans shall be the aggregate principal balance of the Mortgage
Loans, so computed as of the Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the Mortgage Loans as of the Cut-off Date at the weighted average
Mortgage Loan Remittance Rate of the Mortgage Loans.
The Purchase Price plus accrued interest as set forth in the
preceding paragraph shall be paid on the Closing Date by wire transfer of
immediately available funds.
The Purchaser shall be entitled to (1) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date (provided, however, that all scheduled payments of
principal due on or before the Cut-off Date and collected by the Seller or any
successor servicer after the Cut-off Date shall belong to the Seller), and (3)
all payments of interest on the Mortgage Loans net of applicable Servicing
Fees (minus that portion of any such payment which is allocable to the period
prior to the Cut-off Date). The outstanding principal balance of each Mortgage
Loan as of the Cut-off Date is determined after application of payments of
principal due on or before the Cut-off Date whether or not collected, together
with any unscheduled Principal Prepayments collected prior to the Cut-off
Date; provided, however, that payments of scheduled principal and interest
prepaid for a Due Date beyond the Cut-off Date shall not be applied to the
principal balance as of the Cut-off Date. Such prepaid amounts shall be the
property of the Purchaser. The Seller shall deposit any such prepaid amounts
into the Custodial Account, which account is established for the benefit of
the Purchaser for subsequent remittance by the Seller to the Purchaser.
If, subsequent to the Closing Date, the amount on which the Purchase
Price with respect to a Mortgage Loan was based is found to be in error, or
if, for any other reason, the Purchase Price or such other amounts are found
to be in error within ten (10) Business Days of the receipt of information
sufficient to provide notice that payment is due the party benefiting from the
error shall pay an amount sufficient to correct and reconcile the Purchase
Price plus interest thereon at an agreed upon market rate or such other
amounts and shall provide a reconciliation statement and such other
documentation sufficient reasonably to satisfy the other party concerning the
accuracy of such reconciliation.
Section 2.03 Servicing of Mortgage Loans.
Simultaneously with the execution and delivery of this Agreement, the
Seller does hereby agree to service the Mortgage Loans listed on the Mortgage
Loan Schedule subject to the terms of this Agreement. The rights of the
Purchaser to receive payments with respect to the related Mortgage Loans shall
be as set forth in this Agreement.
Section 2.04 Record Title and Possession of Mortgage
Files; Maintenance of Servicing Files.
As of the Closing Date, the Seller sold, transferred, assigned, set
over and conveyed to the Purchaser, without recourse, and the Seller hereby
acknowledges that the Purchaser has, subject to the terms of this Agreement,
all the right, title and interest of the Seller in and to the Mortgage Loans.
The delivery of the Mortgage Files was on the Closing Date at the expense of
the Seller. Seller shall maintain a Servicing File consisting of a copy of the
contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Purchaser. The Servicing File shall contain
all documents necessary to service the Mortgage Loans. The possession of each
Servicing File by the Seller is at the will of the Purchaser, for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Seller is in a custodial capacity only. From the Closing
Date, the ownership of each Mortgage Loan, including the Mortgage Note, the
Mortgage, the contents of the related Mortgage File and all rights, benefits,
proceeds and obligations arising therefrom or in connection therewith, has
been vested in the Purchaser. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received on or in connection with the
Mortgage Loans and all records or documents with respect to the Mortgage Loans
prepared by or which come into the possession of the Seller shall be received
and held by the Seller in trust for the benefit of the Purchaser as the owner
of the Mortgage Loans. Any portion of the Mortgage Files retained by the
Seller shall be appropriately identified in the Seller's computer system to
clearly reflect the ownership of the Mortgage Loans by the Purchaser. The
Seller shall release its custody of the contents of the Mortgage Files only in
accordance with written instructions of the Purchaser, except when such
release is required as incidental to the Seller's servicing of the Mortgage
Loans or is in connection with a repurchase of any Mortgage Loan or Loans with
respect thereto pursuant to this Agreement, such written instructions shall
not be required.
Section 2.05 Books and Records.
The sale of each Mortgage Loan has been reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the
Seller. The Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Seller's computer system to clearly reflect
the ownership of the Mortgage Loan by the Purchaser. In particular, the Seller
shall maintain in its possession, available for inspection by the Purchaser,
or its designee and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of FNMA or FHLMC, as applicable, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Seller and periodic
inspection reports as required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Seller may be in the form
of microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long as
the Seller complies with the requirements of the FNMA Guides.
The Seller shall maintain with respect to each Mortgage Loan and
shall make available for inspection by any Purchaser or its designee the
related Servicing File during the time the Purchaser retains ownership of a
Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
In addition to the foregoing, Seller shall provide to any supervisory
agents or examiners that regulate Purchaser, including but not limited to, the
OTS, the FDIC and other similar entities, access, during normal business
hours, upon reasonable advance notice to Seller and without charge to Seller
or such supervisory agents or examiners, to any documentation regarding the
Mortgage Loans that may be required by any applicable regulator.
Section 2.06 Transfer of Mortgage Loans.
The Seller shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Seller
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms hereof. For the
purposes of this Agreement, the Seller shall be under no obligation to deal
with any person with respect to this Agreement or any Mortgage Loan unless a
notice of the transfer of such Mortgage Loan has been delivered to the Seller
in accordance with this Section 2.06 and the books and records of the Seller
show such person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans, provided, however, that (i) the transferee will not be deemed to be a
Purchaser hereunder binding upon the Seller unless such transferee shall agree
in writing to be bound by the terms of this Agreement and an original
counterpart of the instrument of transfer and an Assignment and Assumption of
this Agreement in the form of Exhibit D hereto executed by the transferee
shall have been delivered to the Seller, and (ii) in no event shall there be
more than three (3) Persons at any given time having the status of "Purchaser"
hereunder. The Purchaser also shall advise the Seller of the transfer. Upon
receipt of notice of the transfer, the Seller shall mark its books and records
to reflect the ownership of the Mortgage Loans of such assignee, and the
previous Purchaser shall be released from its obligations hereunder with
respect to the Mortgage Loans sold or transferred.
Section 2.07 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Purchaser or its designee
the Mortgage Loan Documents. The documents enumerated as items (1), (2), (3),
(4), (5), (6), (7), (8), and (16) in Exhibit A hereto shall be delivered by
the Seller to the Purchaser or its designee no later than four (4) Business
Days prior to the Closing Date pursuant to a bailee letter agreement. All
other documents in Exhibit A hereto, together with all other documents
executed in connection with the Mortgage Loan that Seller may have in its
possession, shall be retained by the Servicer in trust for the Purchaser. If
the Seller cannot deliver the original recorded Mortgage Loan Documents or the
original policy of title insurance, including riders and endorsements thereto,
on the Closing Date, the Seller shall, promptly upon receipt thereof and in
any case not later than 180 days from the-Closing Date, deliver such original
documents, including original recorded documents, to the Purchaser or its
designee (unless the Seller is delayed in making such delivery by reason of
the fact that such documents shall not have been returned by the appropriate
recording office). If delivery is not completed within 180 days of the Closing
Date solely due to delays in making such delivery by reason of the fact that
such documents shall not have been returned by the appropriate recording
office, Seller shall deliver such document to Purchaser, or its designee,
within such time period as specified in a Seller's Officer's Certificate. In
the event that documents have not been received by the date specified in the
Seller's Officer's Certificate, a subsequent Seller's Officer's Certificate
shall be delivered by such date specified in the prior Seller's officer's
Certificate, stating a revised date for receipt of documentation. The
procedure shall be repeated until the documents have been received and
delivered. The Seller shall continue to use commercially reasonable best
efforts to effect delivery within 270 days of the Closing Date.
The Seller shall pay all initial recording fees, for the Assignments
of Mortgage and any other fees in connection with the transfer of all original
documents to the Purchaser or its designee. Seller shall prepare, in
recordable form, all Assignments of Mortgage necessary to assign the Mortgage
Loans to Purchaser, or its designee. Seller shall be responsible for recording
the Assignments of Mortgage.
Seller shall provide a copy of the title insurance policy to
Purchaser or its designee within ninety (90) days of the receipt of the
recorded documents (required for issuance of such policy) from the applicable
recording office.
Any review by the Purchaser, or its designee, of the Mortgage Files
shall in no way alter or reduce the Seller's obligations hereunder.
If the Purchaser or its designee discovers any defect with respect to
a Mortgage File, the Purchaser shall, or shall cause its designee to, give
written specification of such defect to the Seller in the exception report or
the certification delivered pursuant to this Section 2.07, and the Seller
shall cure or, repurchase such Mortgage Loan in accordance with Section 3.03.
The Seller shall forward to the Purchaser, or its designee, original
documents evidencing an assumption, modification, consolidation or extension
of any Mortgage Loan entered into in accordance with Section 4.01 or 6.01
within one week of their execution; provided, however, that the Seller shall
provide the Purchaser, or its designee, with a certified true copy of any such
document submitted for recordation within one week of its execution, and shall
provide the original of any document submitted for recordation or a copy of
such document certified by the appropriate public recording office to be a
true and complete copy of the original within sixty (60) days of its
submission for recordation.
From time to time, in order to fulfill its obligations hereunder, the
Seller may have a need for Mortgage Loan Documents to be released from
Purchaser, or its designee. Purchaser shall, or shall cause its designee, upon
the written request of the Seller, within ten (10) Business Days, deliver to
the Seller, any requested documentation previously delivered to Purchaser as
part of the Mortgage File, provided that such documentation is promptly
returned to Purchaser, or its designee,, when the Seller no longer requires
possession of the document, and provided that during the time that any such
documentation is held by the Seller, such possession is in trust for the
benefit of Purchaser. Seller shall indemnify Purchaser, and its designee, from
and against any and all losses, claims, damages, penalties, fines,
forfeitures, costs and expenses (including court costs and reasonable
attorney's fees) resulting from or related to the loss, damage, or
misplacement of any documentation delivered to Seller pursuant to this
paragraph.
Section 2.08 Quality Control Procedures.
The Seller must have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal
documents, credit documents, property appraisals, and underwriting decisions.
The program must be capable of evaluating and monitoring the overall quality
of its loan production and servicing activities. The program is to ensure that
the Mortgage Loans are originated and serviced in accordance with prudent
mortgage banking practices and accounting principles; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SELLER; REPURCHASE; REVIEW OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of the Seller
The Seller represents, warrants and covenants to the Purchaser that
as of the Closing Date or as of such date specifically provided herein:
(a) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of New Jersey and has all
licenses necessary to carry out its business as now being conducted, and is
licensed and qualified to transact business in and is in good standing under
the laws of each state in which any Mortgaged Property is located or is
otherwise exempt under applicable law from such licensing or qualification or
is otherwise not required under applicable law to effect such licensing or
qualification and no demand for such licensing or qualification has been made
upon such Seller by any such state, and in any event such Seller is in
compliance with the laws of any such state to the extent necessary to ensure
the enforceability of each Mortgage Loan and the servicing of the Mortgage
Loans in accordance with the terms of this Agreement;
(b) The Seller has the full power and authority and legal right to
hold, transfer and convey each Mortgage Loan, to sell each Mortgage Loan and
to execute, deliver and perform, and to enter into and consummate all
transactions contemplated by this Agreement and to conduct its business as
presently conducted, has duly authorized the execution, delivery and
performance of this Agreement and any agreements contemplated hereby, has duly
executed and delivered this Agreement, and any agreements contemplated hereby,
and this Agreement and each Assignment of Mortgage to the Purchaser and any
agreements contemplated hereby, constitutes a legal, valid and binding
obligation of the Seller, enforceable against it in accordance with its terms,
and all requisite corporate action has been taken by the Seller to make this
Agreement and all agreements contemplated hereby valid and binding upon the
Seller in accordance with their terms;
(c) None of the execution and delivery of this Agreement, the
origination of the Mortgage Loans by the Seller, the sale of the Mortgage
Loans to the Purchaser, the consummation of the transactions contemplated
hereby, or the fulfillment of or compliance with the terms and conditions of
this Agreement will conflict with any of the terms, conditions or provisions
of the Seller's charter or by-laws or materially conflict with or result in a
material breach of any of the terms, conditions or provisions of any legal
restriction or any agreement or instrument to which the Seller is now a party
or by which it is bound, or constitute a default or result in an acceleration
under any of the foregoing, or result in the material violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its
property is subject or impair the ability of the Purchaser to realize on the
Mortgage Loans or impair the value of the Mortgage Loans;
(d) Each Mortgage Note, each Mortgage, each Assignment of Mortgage
and any other documents required pursuant to this Agreement to be delivered to
the Purchaser or its designee, or its assignee for each Mortgage Loan, have
been, on or before the Closing Date, delivered to the Purchaser or its
designee, or its assignee;
(e) There is no litigation, suit, proceeding or investigation pending
or threatened, or any order or decree outstanding, with respect to the Seller
which is reasonably likely to have a material adverse effect on the sale or
servicing of the Mortgage Loans, the execution, delivery, performance or
enforceability of this Agreement, or which is reasonably likely to have a
material adverse effect on the financial condition of the Seller.
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement,
except for consents, approvals, authorizations and orders which have been
obtained;
(g) The consummation of the transactions contemplated by this
Agreement is in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction;
(h) The origination and servicing practices used by the Seller, any
originator and Prior Servicers, with respect to each Mortgage Note and
Mortgage have been legal and in accordance with applicable laws and
regulations, and in all material respects proper and prudent in the mortgage
origination and servicing business. With respect to escrow deposits and
payments that the Seller is entitled to collect, all such payments are in the
possession of, or under the control of, the Seller, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All escrow payments have been collected
in full compliance with state and federal law and the provisions of the
related Mortgage Note and Mortgage. As to any Mortgage Loan that is the
subject of an escrow, escrow of funds is not prohibited by applicable law and
has been established in an amount sufficient to pay for every escrowed item
that remains unpaid and has been assessed but is not yet due and payable. No
escrow deposits or other charges or payments due under the Mortgage Note have
been capitalized under any Mortgage or the related Mortgage Note;
(i) The Seller used no adverse selection procedures in selecting from
among the outstanding first lien residential mortgage loans owned by it which
were available for inclusion in the sale to Purchaser;
(j) The Seller will treat the sale of the Mortgage Loans to the
Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
(k) Seller is an approved seller/servicer of residential mortgage
loans for FNMA/FHLMC and HUD, with such facilities, procedures and personnel
necessary for the sound servicing of such mortgage loans. The Seller is duly
qualified, licensed, registered and otherwise authorized under all applicable
federal, state and local laws, and regulations, if applicable, meets the
minimum capital requirements set forth by the OCC, and is in good standing to
sell mortgage loans to and service mortgage loans for FNMA/FHLMC and no event
has occurred which would make Seller unable to comply with eligibility
requirements or which would require notification to either FNMA or FHLMC;
(l) The Seller does not believe, nor does it have any cause or reason
to believe, that it cannot perform each and every covenant contained in this
Agreement. The Seller is solvent and the sale of the Mortgage Loans will not
cause the Seller to become insolvent. The sale of the Mortgage Loans is not
undertaken with the intent to hinder, delay or defraud any of the Seller's
creditors;
(m) No statement, tape, diskette, form, report or other document
prepared by, or on behalf of, Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect;
(n) The Seller acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Seller, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement; in the opinion of Seller, the consideration
received by Seller upon the sale of the Mortgage Loans to Purchaser under this
Agreement constitutes fair consideration for the Mortgage Loans under current
market conditions.
(o) The Seller has delivered to the Purchaser financial statements as
to its last two complete fiscal years. All such financial statements fairly
present the pertinent results of operations and changes in financial position
for each of such periods and the financial position at the end of each such
period of the Seller and its subsidiaries and have been prepared in accordance
with generally accepted accounting principals consistently applied throughout
the periods involved, except as set forth in the notes thereto. There has been
no change in the business, operations, financial condition, properties or
assets of the Seller since the date of the Seller's financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement;
(p) The Seller has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or compensation
in connection with the sale of the Mortgage Loans.
Section 3.02 Representations and Warranties as to
Individual Mortgage Loans.
References in this Section to percentages of Mortgage Loans refer in
each case to the percentage of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, based on the aggregate outstanding balances of
the Mortgage Loans as of the Cut-off Date, and giving effect to scheduled
Monthly Payments due on or prior to the Cut-off Date, whether or not received.
References to percentages of Mortgaged Properties refer, in each case, to the
percentages of expected aggregate principal balances of the related Mortgage
Loans (determined as described in the preceding sentence). The Seller hereby
represents and warrants to the Purchaser, as to each Mortgage Loan, as of the
Closing Date as follows:
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects as of the Cut-off Date;
(b) With respect to each Mortgage Loan, the Mortgage creates a valid,
subsisting and enforceable first lien or a first priority ownership interest
in an estate in fee simple in real property securing the related Mortgage
Note. No Mortgage is a Co-op Loan.
(c) All payments due prior to the Cut-off Date for such Mortgage Loan
have been made and credited as of the Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and has not been dishonored; there are
no material defaults under the terms of the Mortgage Loan; the Seller has not
advanced funds, or induced, solicited or knowingly received any advance of
funds from a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required by the Mortgage Loan; and there has been no
more than one delinquency during the preceding twelve-month period, and such
delinquency did not last more than 30 days;
(d) There are no defaults by Seller in complying with the terms of
the Mortgage, and all taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof
except in connection with an assumption agreement and which assumption
agreement is part of the Mortgage File and the terms of which are reflected in
the Mortgage Loan Schedule; the substance of any such waiver, alteration or
modification has been approved by the issuer of any related Primary Mortgage
Insurance Policy and title insurance policy, to the extent required by the
related policies;
(f) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the terms
of the Mortgage Note or the Mortgage, or the exercise of -any right
thereunder, render the Mortgage Note or Mortgage unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto; and the
Mortgagor was not a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(g) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the FNMA Guides,
against loss by fire, hazards of extended coverage and such other hazards as
are provided for in the FNMA Guides or by FHLMC, as well as all additional
requirements set forth in Section 4.10 of this Agreement. All such standard
hazard policies are in full force and effect and on the date of origination
contained a standard mortgagee clause naming the Seller and its successors in
interest and assigns as mortgagee loss payee and such clause is still in
effect and all premiums due thereon have been paid. If required by the Flood
Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration which policy conforms to FNMA and FHLMC
requirements, as well as all additional requirements set forth in Section 4.10
of this Agreement. Such policy was issued by an insurer acceptable under FNMA
or FHLMC guidelines. The Mortgage obligates the Mortgagor -thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor. The hazard insurance policy is the
valid and binding obligation of the Insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this Agreement. The
Seller has not engaged in, and has no knowledge of the Mortgagor's or any
Originator's or Prior Servicer's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either;
(h) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects; the Seller has maintained, and as servicer shall continue to
maintain, evidence of such compliance as required by applicable law or
regulation and shall make such evidence available for inspection at Seller's
office during normal business hours upon reasonable advance notice;
(i) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action
would cause the Mortgage Loan to be in default, nor has the Seller waived any
default resulting from any action or inaction by the Mortgagor;
(j) The Mortgage is a valid, subsisting, enforceable and perfected
first lien on the Mortgaged Property, including all buildings on the Mortgaged
Property and a ' 11 installations and mechanical, electrical, plumbing,
heating and air conditioning systems affixed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing securing the Mortgage Note's original principal balance. The
Mortgage and the Mortgage Note do not contain any evidence of any Security
interest or other interest or right thereto. Such lien is free and clear of
all adverse claims, liens and encumbrances having priority over the first lien
of the Mortgage subject only to (1) the lien of non-delinquent current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording which are acceptable to mortgage
lending institutions generally and either (A) which are referred to in either
the Originator's title insurance policy (to the extent short form policies are
not utilized) or in the appraisal made for the Originator of the Mortgage
Loan, or (B) which do not adversely affect the Appraised Value of the
Mortgaged Property as set forth in such appraisal,. and (3) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or
the use, enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien and first priority
security interest on the property described therein, and the Seller has the
full right to sell and assign the same to the Purchaser.
(k) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors and the Seller has taken all action necessary to transfer
such rights of enforceability to the Purchaser. All parties to the Mortgage
Note and the Mortgage had the legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note and the Mortgage. The Mortgage
Note and the Mortgage have been duly and properly executed by such parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of Seller or the
Mortgagor, or, to the best of Seller's knowledge, on the part of any other
party involved in the origination of the Mortgage Loan. The proceeds of the
Mortgage Loan have been fully disbursed and there is no requirement for future
advances thereunder, and any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow funds
therefor have been satisfied. All costs, fees and expenses incurred in making
or closing the Mortgage Loan and the recording of the Mortgage were paid or
are in the process of being paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
(l) The Seller or its affiliate is the sole legal, beneficial and
equitable owner and holder of the Mortgage Loan and the indebtedness evidenced
by the Mortgage Note, except for the Assignments of Mortgage which have been
sent for recording, and upon recordation the Purchaser or its designee will be
the owner of record of the Mortgage and the indebtedness evidenced by the
Mortgage Note, and upon the sale of the Mortgage Loan to the Purchaser, the
Seller will retain the Mortgage File or any part thereof with respect thereto
not delivered to the Purchaser or the Purchaser's designee in trust only for
the purpose of servicing and supervising the servicing of the Mortgage Loan.
Immediately prior to the transfer and assignment to the Purchaser on the
Closing Date, the Mortgage Loan, including the Mortgage Note and the Mortgage,
were not subject to an assignment, sale or pledge, and the Seller had good and
marketable title to and was the sole owner thereof and had full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest and has
the full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign the Mortgage Loan pursuant
to this Agreement and following the sale of the Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan, except for the purposes of servicing the Mortgage Loan as set
forth in this Agreement. After the Closing Date, the Seller will have no right
to modify or alter the terms of the sale of the Mortgage Loan and the Seller
will have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement, or as otherwise
agreed to by the Seller and the Purchaser;
(m) Each Mortgage Loan is covered by an ALTA lender's title'
insurance policy or other generally acceptable form of policy or insurance
acceptable to FNMA or FHLMC, issued by a title insurer acceptable to FNMA or
FHLMC and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in (j)(1),
(2) and (3) above) the Seller, its successors and assigns, as to the first
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan. Where required by state law or regulation, the Mortgagor has been given
the opportunity to choose the carrier of the required mortgage title
insurance. The Seller, its successors and assigns, are the sole insureds of
such lender's title insurance policy, such title insurance policy has been
duly and validly endorsed to the Purchaser or the assignment to the Purchaser
of the Seller's interest therein does not require the consent of or
notification to the insurer and such lender's title insurance policy is in
full force and effect and 'will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and no prior holder
of the related mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;
(n) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cu
. re period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
(o) There are no mechanics, or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the
related Mortgage;
(p) All improvements subject to the Mortgage which were considered in
determining the appraised value of the Mortgaged Property lie wholly within
the boundaries and building restriction lines of the Mortgaged Property (and
wholly within the project with respect to a condominium unit) and no
improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by the title insurance policy referred
to in clause (m) above and all improvements on the Mortgaged Property comply
with all applicable zoning and subdivision laws and ordinances;
(q) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with all the terms, conditions and requirements of the
Seller's 103 LTV product underwriting standards (see Exhibit I).in effect at
the time of origination of such Mortgage Loan. The Mortgage Notes and
Mortgages are on forms generally acceptable to the industry. The Mortgage Loan
bears interest at an adjustable rate as set forth in the Mortgage Loan
Schedule, and Monthly Payments under the Mortgage Note are due and payable on
the first day of each month. The Mortgage contains the usual and enforceable
provisions for the acceleration of the payment of the unpaid principal amount
of the Mortgage Loan if the related Mortgaged Property is sold or transferred
without the prior consent of the mortgagee thereunder. At the time the
Mortgage Loan was originated, the Originator was either a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to Sections 203 and
211 of the National Housing Act or a savings and loan association, a savings
bank, a commercial bank or similar banking institution which is supervised and
examined by a Federal or State authority, or is appropriately licensed in the
applicable jurisdiction for the origination activities performed.
(r) The Mortgaged Property is not subject to any material damage by
waste, fire, earthquake, windstorm, flood or other casualty. At origination of
the Mortgage Loan there was, there has not been, and there currently is, no
proceeding pending, or to the actual knowledge of Seller threatened, for the
total or partial condemnation of the Mortgaged Property. To the best of
Seller's knowledge, there are no such proceedings scheduled to commence at a
future date;
(s) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by
judicial foreclosure. There is no homestead or other exemption available to
the Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage;
(t) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as
'Such, has been properly designated and currently so serves and is named in
the Mortgage, and no fees or expenses, except as may be required by local law,
are or will become payable by the Purchaser to the trustee under the deed of
trust, except in connection with a trustee's sale or attempted sale after
default by the Mortgagor;
(u) The Mortgage File contains an appraisal of the related Mortgaged
Property signed prior to the final approval of the mortgage loan application
by a Qualified Appraiser, approved by the Seller, who had no interest, direct
or indirect, in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of FNMA or FHLMC and Title XI of the Federal Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated. The
appraisal is in a form acceptable to FNMA or FHLMC and was made by a Qualified
Appraiser;
(v) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of
such state, or (2) qualified to do business in such state, or (3) federal
savings and loan associations or national banks or a Federal Home Loan Bank or
savings bank having principal offices in such state, or (4) not doing business
in such state;
(w) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(y) The Mortgage Loan does not contain "graduated payment",
"contingent interest" or "shared appreciation of features; to the extent any
Mortgage Loan contains any buydown provision, such buydown funds have been
maintained and administered in accordance with, and such Mortgage Loan
otherwise complies with, FNMA/FHLMC requirements relating to buydown loans;
(z) The Mortgagor is not in bankruptcy and, to the best of the
Seller's knowledge, the Mortgagor is not insolvent or in bankruptcy and the
Seller has no knowledge of any circumstances or condition with respect to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that could reasonably be expected to cause investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or materially adversely affect the value or marketability of the
Mortgage Loan;
(aa) The Mortgage Loans accrue interest at a fixed rate for the first
seven (7) years and thereafter are one year adjustable rate mortgage loans.
The Mortgage Loans have an original term to maturity of not more than 30
years, with interest payable in arrears on the first day of each month. As to
each Mortgage Loan, on each applicable Adjustment Date, the Mortgage Interest
Rate will be adjusted to equal the sum of the Index, plus the applicable
Margin; provided, that the Mortgage Interest Rate, on each applicable
Adjustment Date starting with the second Adjustment Date, will not increase or
decrease by more than the Periodic Rate Cap. over the term of each Mortgage
Loan, the Mortgage Interest Rate will not exceed such Mortgage Loan's Lifetime
Rate Cap. Each Mortgage Note requires a monthly payment which is sufficient
(a) during the period prior to the first adjustment to the Mortgage Interest
Rate, to fully amortize the original principal balance over the original term
thereof and to pay interest at the related Mortgage Interest Rate, and (b)
during the period following each Adjustment Date, to fully amortize the
outstanding principal balance as of the first day of such period over the then
remaining term of such Mortgage Note and to pay interest at the related
Mortgage Interest Rate. The Mortgage Notes provide that when the Mortgage
Interest Rate changes on an Adjustment Date, the then outstanding principal
balance will be reamortized over the remaining life of the Mortgage Loan. No
Mortgage Loan contains terms or provisions which would result in negative
amortization. None of the Mortgage Loans contain a conversion feature.
(bb) See Exhibit attached.
(cc) See Exhibit attached.
(dd) See Exhibit attached.
(ee) Intentionally omitted.
(ff) Intentionally omitted.
(gg) Intentionally omitted.
(hh) The maximum LTV of each Mortgage Loan is 103% and all Mortgage
Loans have a Primary Mortgage Insurance Policy insuring at least 35% of the
Mortgage Loan. Each Mortgage Loan is and will be insured as to payment
defaults by a Primary Mortgage Insurance Policy except where the Primary
Mortgage Insurance Policy was (i) cancelled at the request of the Mortgagor
pursuant to the cancellation requirements of an investor, including but not
limited to Chase, state law or, as applicable, the Home Owners Protection Act
or (ii) automatically terminated in accordance with the termination
requirements of an investor, including but not limited to Chase, state law,
or, as applicable, the Home Owners Protection Act. All provisions of such
Primary Mortgage Insurance Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid. No Mortgage Loan requires payment of such premiums, in whole or in part
by the Purchaser. No action, inaction, or event has occurred and no state of
facts exists that has, or will result in the exclusion from, denial of, or
defense to coverage. Any Mortgage Loan subject to a Primary Mortgage Insurance
Policy obligates the Mortgagor thereunder to maintain the Primary Mortgage
Insurance Policy and to pay all premiums and charges in connection therewith.
The Mortgage Interest Rate for the Mortgage Loan as set forth on the Mortgage
Loan Schedule is net of any such insurance premium;
(ii) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws, of the jurisdiction in which the
Mortgaged Property is located;
(jj) As to Mortgage Loans that are not secured by an interest in a
leasehold estate, the Mortgaged-Property is located in the state identified in
the Mortgage Loan Schedule and consists of a single parcel of real property
with a detached single family residence erected thereon, or an individual
condominium unit in a condominium project, or an individual unit in a planned
unit development, provided, however, that no residence or dwelling is a single
parcel of real property with a cooperative housing corporation erected
thereon, or a mobile home. As of the date of origination, no portion of the
Mortgaged Property is used for commercial purposes, and since the date or
origination, to the best of the Seller's knowledge, no portion of the
Mortgaged Property is used for commercial purposes;
(kk) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the funds were disbursed in connection with the Mortgage
Loan. The Mortgage Note is payable on the first day of each month in equal
monthly installments of principal and interest, which installments are subject
to change due to the adjustments to the Mortgage Interest Rate on each
Adjustment Date with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization;
(ll) As of the date of origination of the Mortgage Loan, the Mortgage
Property was lawfully occupied under applicable law, and all inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(mm) If the Mortgaged Property is a condominium unit or a planned
unit development (other than a de minimis planned unit development), such
condominium, or planned unit development project meets Seller's eligibility
requirements as set forth in Seller's underwriting guidelines;
(nn) To the best of Seller's knowledge, there is no pending action or
proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; to the best of Seller's
knowledge, there is no violation of any environmental law, rule or regulation
with respect to the Mortgaged Property, and Seller has not received notice of
any such violation; and nothing further remains to be done to satisfy in full
all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
(oo) The Mortgagor has not notified the Seller, and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors, Civil Relief Act of 1940;
(pp) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(qq) No action has been taken or failed to be taken by Seller, on or
prior to the Closing Date which has-resulted or will result in an exclusion
from, denial of, or defense to coverage under any Primary Mortgage Insurance
Policy (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising
out of actions, representations, errors, omissions, negligence, or fraud of
the Seller, or for any other reason under such coverage;
(rr) Each Mortgage Loan has been serviced in all material respects in
compliance with Applicable Requirements. All applicable Mortgage Interest Rate
adjustments have been made in compliance with state and federal laws and the
terms of the related Mortgage Note;
(ss) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development. pursuant to sections 203 and 211
of the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority;
(tt) With respect to any ground lease to which a Mortgaged Property
may be subject: (i) the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease: (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise;
(iii) all rent, additional rent and other charges reserved therein have been
fully paid to the extent payable as of the Closing Date; (iv) the Mortgagor
enjoys the quiet and peaceful possession of the leasehold estate, subject to
any sublease; (v) the Mortgagor is not in default under any of the terms of
such ground lease, and there are no circumstances which, with the passage of
time or the giving of notice, or both, would result in a default under such
ground lease; (vi) the lessor under such ground lease is not in default under
any of the terms or provisions of such ground lease on the part of the lessor
to be observed or performed; (vii,) the lessor under such ground lease has
satisfied any repair or construction obligations due as of the Closing Date
pursuant to the terms of such ground lease; and (viii) the execution, delivery
and performance of the Mortgage do not require the consent (other than those
consents which have been obtained and are in full force and effect) under, and
will not contravene any provision of or cause a default under, such ground
lease; and
(uu) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments, ground rents relating to the
Mortgage Loans have been paid by Seller to the extent such items are required
to be paid by Seller pursuant to Applicable Requirements and as herein
provided.
Section 3.03 Repurchase; Substitution.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage
Loans, delivery of the Mortgage Loan Documents to the Purchaser, or its
designee, and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination, or lack of examination, of any Mortgage File. Upon discovery by
either the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the
value of the Mortgage Loans or the interest of the Purchaser in any Mortgage
Loan or all of the Mortgage Loans, the party discovering such breach shall
give prompt written notice to the other. The Seller shall have a period of
sixty days from the earlier of its discovery or its receipt of notice of any
such breach within which to correct or cure such breach. The Seller hereby
covenants and agrees that if any such breach is not corrected or cured within
such sixty day period, the Seller shall, at the Purchaser's option and not
later than ninety days of its discovery or its receipt of notice of such
breach, repurchase such Mortgage Loan at the Repurchase Price or, with the
Purchaser's prior consent, which consent shall not be unreasonably withheld,
substitute a Mortgage Loan as provided below. In the event that any such
breach shall involve any representation or warranty set forth in Section 3.01,
and such breach is not cured within sixty days of the earlier of either
discovery by or notice to the Seller of such breach, all Mortgage Loans shall,
at the option of the Purchaser, be repurchased by the Seller at the Repurchase
Price. Any such repurchase shall be accomplished by deposit in the Custodial
Account of the amount of the Repurchase Price, after deducting therefrom any
amounts received in respect of such repurchased Mortgage Loan and being held
in the Custodial Account for future distribution.
If the Seller is required to repurchase any Mortgage Loan pursuant to
this Section 3.03, the Seller may, with the Purchaser's prior consent, which
consent shall not be unreasonably withheld, within 120 days from the Closing
Date, remove such defective Mortgage Loan from the terms of this Agreement and
substitute another mortgage loan for such defective Mortgage Loan, in lieu of
repurchasing such defective Mortgage Loan. Any substitute Mortgage Loan shall
(a) have a principal balance at the time of substitution not in excess of the
principal balance of the defective Mortgage Loan (the amount of any
difference, plus one month's interest thereon at the Mortgage Interest Rate
borne by the defective Mortgage Loan, being paid by the Seller and deemed to
be a Principal Prepayment to be deposited by the Seller in the Custodial
Account), (b) have a Mortgage Interest Rate not less than, and not more than
one percentage point greater than, the Mortgage Interest Rate of the removed
Mortgage Loan, which shall adjust annually during the adjustable period in
accordance with the same Index and Margin, and with the same Lifetime Rate Cap
and Periodic Rate Cap, (c) have a remaining term to stated maturity not later
than, and not more than one year less than, the remaining term to stated
maturity of the removed Mortgage Loan, (d) be, in the reasonable determination
of the Purchaser, of the same type, quality and character (including location
of the Mortgaged Property) as the removed Mortgage Loan as if the breach had
not occurred, (e) have a Loan-to-Value Ratio at origination no greater than
that of the removed Mortgage Loan, (f) be, in the reasonable determination of
the Purchaser, in material compliance with the representations and warranties
contained in this Agreement and described in Section 3.02 as of the date of
substitution, and (g) not have been more than 60 days delinquent since its
Origination Date.
The Seller shall amend the Mortgage Loan Schedule to reflect the
withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such substitute Mortgage Loan therefor. Upon such amendment,
the Purchaser shall review the Mortgage File delivered to it relating to the
substitute Mortgage Loan. In the event of such a substitution, accrued
interest on the substitute Mortgage Loan for the month in which the
substitution occurs and any Principal Prepayments made thereon during such
month shall be the property of the Purchaser and accrued interest for such
month on the Mortgage Loan for which the substitution is made and any
Principal Prepayments made thereon during such month shall be the property of
the Seller. The principal payment on a substitute Mortgage Loan due on the Due
Date in the month of substitution shall be the property of the Seller and the
principal payment on the Mortgage Loan for which the substitution is made due
on such date shall be the property of the Purchaser.
It is understood and agreed that the obligation of the Seller set
forth in this Section 3.03 to cure, repurchase or substitute for a defective
Mortgage Loan, and to indemnify Purchaser pursuant to section 8.01,
constitutes the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties. If the Seller fails to repurchase or
substitute for a defective Mortgage Loan in accordance with this Section 3.03,
or fails to cure a defective Mortgage Loan to Purchaser's reasonable
satisfaction in accordance with this Section 3.03, or to indemnify Purchaser
pursuant to Section 8.01, that failure shall, upon compliance by the Purchaser
with the next to the last paragraph of this Section 3.03, be an Event of
Default and the Purchaser shall be entitled to pursue all remedies available
in this Agreement as a result thereof. No provision of this paragraph shall
affect the rights of the Purchaser to terminate this Agreement for cause, as
set forth in Sections 10.01 and 11.01.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Sections 3.01 and
3.02 shall accrue as to any Mortgage Loan upon (i) the earlier of discovery of
such breach by the Seller or notice thereof by the Purchaser to the Seller,
(ii) failure by the Seller to cure such breach or repurchase such Mortgage
Loan as specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may elect not to require repurchase or permit substitution pursuant
to Subsection 3.03 after the applicable REMIC's "start up day" (as defined in
Section 860G(a) (9) of the Code), unless the Seller has obtained an opinion of
Counsel to the effect that such repurchase or substitution will not (i) result
in the imposition of taxes on "prohibited transactions" of such REMIC (as
defined in Section 860F of the Code) or otherwise subject the REMIC to tax, or
(ii) cause the REMIC to fail to qualify as a REMIC at any time.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01 Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Applicable Requirements, and shall have full power and authority, acting
alone, to do or cause to be done any and all things in connection with such
servicing and administration which the Seller may deem necessary or desirable
and consistent with the terms of this Agreement and with Applicable
Requirements and exercise the same care that it customarily employs for its
own account. Except as set forth in this Agreement, the Seller shall service
the Mortgage Loans in strict compliance with the servicing provisions of the
FNMA Guides (special servicing option), which include, but are not limited to,
provisions regarding the liquidation of Mortgage Loans, the collection of
Mortgage Loan payments, the payment of taxes, insurance and other charges, the
maintenance of hazard insurance with a Qualified Insurer, the maintenance of
mortgage impairment insurance, the maintenance of fidelity bond and errors and
omissions insurance, inspections, the restoration of Mortgaged Property, the
maintenance of Primary Mortgage Insurance Policies, insurance claims, the
title, management of REO Property, permitted withdrawals with respect to REO
Property, liquidation reports, and reports of foreclosures and abandonments of
Mortgaged Property, the transfer of Mortgaged Property, the release of
Mortgage Files, annual statements, and examination of records and facilities.
In the event of any conflict, inconsistency or discrepancy between any of the
servicing provisions of this Agreement and any of the servicing provisions of
the FNMA Guides, the provisions of this Agreement shall control and be binding
upon the Purchaser and the Seller.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
any such term or in any manner grant indulgence to any Mortgagor if in the
Seller's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser,
provided, however that unless the Seller has obtained the prior written
consent of the Purchaser, the Seller shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate,
forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal) or
change the final maturity date on such Mortgage Loan. In the event of any such
modification which has been agreed to in writing by the Purchaser and which
permits the deferral of interest or principal payments on any Mortgage Loan,
the Seller shall, on the Business Day immediately preceding the Remittance
Date in any month in which any such principal or interest payment has been
deferred, deposit in the Custodial Account from its own funds, in accordance
with Section 4.04, the difference between (a) such month's principal and one
month's interest at the Mortgage Loan Remittance Rate on the unpaid principal
balance of such Mortgage Loan and (b) the amount paid by the Mortgagor. The
Seller shall be entitled to reimbursement for such advances to the same extent
as for all other advances pursuant to Section 4.05. Without limiting the
generality of the foregoing, the Seller shall continue, and is hereby
authorized and empowered, to prepare, execute and deliver, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. Notwithstanding anything herein to the
contrary, the Seller may not enter into a forbearance agreement or similar
arrangement with respect to any Mortgage Loan which runs more than 180 days
after the first delinquent Due Date. Any such agreement shall be approved by
any applicable holder of a Primary Mortgage insurance Policy, if required.
In servicing and administering the Mortgage Loans, the Seller shall
employ Applicable Requirements, giving due consideration to the Purchaser's
reliance on the Seller. Unless a different time period is stated in this
Agreement, Purchaser shall be deemed to have given consent in connection with
a particular matter if Purchaser does not affirmatively grant or deny consent
within 5 Business Days from the date Purchaser receives a second written
request for consent for such matter from Seller as servicer.
The Mortgage Loans may be subserviced by the Subservicer on behalf of
the Seller provided that the Subservicer is an entity that engages in the
business of originating, acquiring or servicing loans, and in either case
shall be authorized to transact business, and licensed to service mortgage
loans, in the state or states where the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to
enable the Subservicer to perform its obligations hereunder and under the
Subservicing Agreement, and in either case shall be a FHLMC or FNMA approved
mortgage servicer in good standing, and no event has occurred, including but
not limited to a change in insurance coverage, which would make it unable to
comply with the eligibility requirements for lenders imposed by FNMA or for
seller/servicers imposed by FHLMC, or which would require notification to FNMA
or FHLMC. In addition, each Subservicer will obtain and preserve its
qualifications to do business as a foreign corporation and its licenses to
service mortgage loans, in each jurisdiction in which such qualifications
and/or licenses are or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
or cause to be performed its duties under the related Subservicing Agreement.
The Seller may perform any of its servicing responsibilities hereunder or may
cause the Subservicer to perform any such servicing responsibilities on its
behalf, but the use by the Seller of the Subservicer shall not release the
Seller from any of its obligations hereunder and the Seller shall remain
responsible hereunder for all acts and omissions of the Subservicer as fully
as if such acts and omissions were those of the Seller. The Seller shall pay
all fees and expenses of the Subservicer from its own funds, and the
Subservicer's fee shall not exceed the Servicing Fee. Seller shall notify
Purchaser promptly in writing upon the appointment of any Subservicer.
At the cost and expense of the Seller, without any right of
reimbursement from the Custodial Account, the Seller shall be entitled to
terminate the rights and responsibilities of the Subservicer and arrange for
any servicing responsibilities to be performed by a successor subservicer
meeting the requirements in the preceding paragraph, provided, however, that
nothing contained herein shall be deemed to prevent or prohibit the Seller, at
the Seller's option, from electing to service the related Mortgage Loans
itself. In the event that the Seller's responsibilities and duties under this
Agreement are terminated pursuant to Section 4.13, 8.04, 9.01, 10.01 or 10.02
and if requested to do so by the Purchaser, the Seller shall at its own cost
and expense terminate the rights and responsibilities of the Subservicer
effective as of the date of termination of the Seller. The Seller shall pay
all fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of the Subservicer from the Seller's own funds without
reimbursement from the Purchaser.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Seller and the Subservicer or any
reference herein to actions taken through the Subservicer or otherwise, the
Seller shall not be relieved of its obligations to the Purchaser and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Seller shall be
entitled to enter into an agreement with the Subservicer for indemnification
of the Seller by the Subservicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification. The Seller will indemnify
and hold Purchaser harmless from any loss, liability or expense arising out of
its use of a Subservicer to perform any of its servicing duties,
responsibilities and obligations hereunder.
Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving the Subservicer shall be deemed to be
between the Subservicer and Seller alone, and the Purchaser shall have no
obligations, duties or liabilities with respect to the Subservicer including
no obligation, duty or liability of Purchaser to pay the Subservicer's fees
And expenses. For purposes of distributions and advances by the Seller
pursuant to this Agreement, the Seller shall be deemed to have received a
payment on a Mortgage Loan when the Subservicer has received such payment.
Section 4.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each Mortgage Loan
ceases to be serviced subject to this Agreement, the Seller will proceed
diligently to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement, Applicable Requirements, and the terms and
provisions of related Primary Mortgage Insurance Policy, follow such
collection procedures as it follows with respect to mortgage loans comparable
to the Mortgage Loans and held for its own account. Further, the Seller will
take special care in ascertaining and estimating annual escrow payments, and
all other charges that, as provided in the Mortgage, will become due and
payable, so that the installments payable by the Mortgagors will be sufficient
to pay such charges as and when they become due and payable.
Section 4.03 Realization Upon Defaulted Mortgage Loans.
The Seller shall use its best efforts, consistent with the procedures
that the Seller would use in servicing loans for its own account, consistent
with Applicable Requirements, any Primary Mortgage Insurance Policies and the
best interest of Purchaser, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the mortgage Loans as come into
and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 4.01.
Foreclosure or comparable proceedings shall be initiated within one hundred
twenty (120) days of default for Mortgaged Properties for which no
satisfactory arrangements can be made for collection of delinquent payments.
The Seller shall use commercially reasonable best efforts to realize upon
defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Seller shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to the Purchaser after reimbursement to itself for such
expenses, and (ii) that such expenses will be recoverable by the Seller
through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 4.05. Seller shall obtain prior approval
of Purchaser as to restoration expenses in excess of ten thousand dollars
($10,000). The Seller shall notify the Purchaser in writing of the
commencement of foreclosure proceedings and prior to the acceptance or
rejection of any offer of reinstatement. The Seller shall be responsible for
all costs and expenses incurred by it in any such proceedings or functions;
provided, however, that it shall be entitled to reimbursement thereof from the
related property, as contemplated in Section 4.05. Notwithstanding anything to
the contrary contained herein, with respect to any Mortgage Loan as to which
the Purchaser has received actual notice of, or has actual knowledge of, the
presence of any toxic or hazardous substance on the related Mortgaged
Property, the Purchaser may instruct Seller not to take title or possession of
the Mortgaged Property or any other action reasonable under the circumstances.
In the event that Seller as servicer receives notice that the Mortgage
Property is contaminated by any toxic or hazardous substance, Seller shall so
notify Purchaser.
In the event that a Mortgage Loan becomes part of a REMIC, and
becomes REO Property, such property shall be disposed of by Seller, with the
consent of Purchaser as required pursuant to this Agreement, within two years
after becoming an REO Property, unless Seller provides to the trustee under
such REMIC an opinion of counsel to the effect that the holding of such REO
Property subsequent to two years after its becoming REO Property, will not
result in the imposition of taxes on "prohibited transactions" as defined in
Section 860F of the Code, or cause the transaction to fail to qualify as a
REMIC at any time that certificates are outstanding. Seller shall manage,
conserve, protect and operate each such REO Property for the
certificateholders solely for the purpose of its prompt disposition and sale
in a manner which does not cause such property to fail to qualify as
"foreclosure property" within the meaning of Section 860F(a)(2)(E) of the
Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC provisions of the Code. Pursuant to its efforts to
sell such property, the Seller shall either itself or through an agent
selected by Seller, protect and conserve such property in the same manner and
to such an extent as is customary in the locality where such property is
located. Additionally, Seller shall perform the tax withholding and reporting
related to Sections 1445 and 60501 of the Code, if required by the REMIC.
Section 4.04 Establishment of Custodial Accounts; Deposits
in Custodial Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts. The Custodial Account shall be an Eligible Account. Funds deposited
in the Custodial Account may be drawn on in accordance with Section 4.05. The
creation of any Custodial Account shall be evidenced by a letter agreement in
the form shown in Exhibit B hereto. The original of such letter agreement
shall be furnished to the Purchaser on the Closing Date, and upon the request
of any subsequent Purchaser.
The Seller shall deposit in the Custodial Account on a daily basis,
and retain therein the following payments and collections received or made by
it subsequent to the Cut-off Date, or received by it prior to the Cut-off Date
but allocable to a period subsequent thereto, other than in respect of
principal and interest on the Mortgage Loans due on or before the Cut-off
Date:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 4.08, 4.10 and 4.11, other than proceeds
to be held in the Escrow Account and applied to the restoration or repair
of the Mortgaged Property or released to the Mortgagor in accordance with
Applicable Requirements;
(vi) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with Applicable
Requirements;
(vii) any Monthly Advances;
(viii) all proceeds of any Mortgage Loan repurchased in accordance
with Section 3.03 and Section 3.04;
(ix) any amounts required to be deposited by the Seller pursuant to
Section 4.10 in connection with the deductible clause in any blanket
hazard insurance policy, such deposit shall be made from the Seller's own
funds, without reimbursement therefor;
(x) any amounts required to be deposited in the Custodial Account
pursuant to Section 4.01, 4.13 or 6.02;
(xi) any Prepayment Interest Shortfall Amount;
The foregoing requirements for deposit in the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
and assumption fees, to the extent permitted by Section 6.01, need not be
deposited by the Seller in the Custodial Account. Any interest paid on funds
deposited in the Custodial Account by the depository institution shall accrue
to the benefit of the Seller and the Seller shall be entitled to retain and
withdraw such interest from the Custodial Account pursuant to Section 4.05
(iv).
Section 4.05 Permitted Withdrawals From the Custodial
Account.
The Seller may, from time to time, withdraw from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the
manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the Seller's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan which represent late collections
(net of the related Servicing Fee) of principal and/or interest
respecting which any such advance was made, it being understood that, in
the case of such reimbursement, the Seller's right thereto shall be prior
to the rights of the Purchaser, except that, where the Seller is required
to repurchase a Mortgage Loan, pursuant to Section 3.03 or Section 3.04,
the Seller's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to such Section
and all other amounts required to be paid to the Purchaser with respect
to such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances and
any unpaid Servicing Fees, the Seller's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan being
limited to related proceeds from Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds in accordance with the relevant
provisions of the FNMA Guides or as otherwise set forth in this
Agreement, it being understood that for those Mortgage Loans in
foreclosure, the Purchaser shall reimburse the Seller for Servicing
Advances and Servicing Fees through the completion of foreclosure and
disposition of the REO Property; such reimbursement shall be monthly
after completion of foreclosure or deed-in-lieu proceedings;
(iv) to pay to itself as part of its servicing compensation: (a) any
interest earned on funds in the Custodial Account (all such interest to
be withdrawn monthly not later than each Remittance Date), and (b) the
Servicing Fee from that portion of any payment or recovery as to interest
with respect to a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has
been repurchased pursuant to Section 3.03 or Section 3.04 all amounts
received thereon and not distributed as of the date on which the related
repurchase price is determined,
(vi) to transfer funds to another Eligible Account in accordance
with Section 4.09 hereof;
(vii) to remove funds inadvertently placed in the Custodial Account
by the Seller; and
(viii) clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.06 Establishment of Escrow Accounts;
Deposits in Escrow Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. The Escrow Account shall be an Eligible
Account. Funds deposited in the Escrow Account may be drawn on by the Seller
in accordance with Section 4.07. The creation of any Escrow Account shall be
evidenced by a letter agreement in the form shown in Exhibit C. The original
of such letter agreement shall be furnished to the Purchaser on the Closing
Date, and upon request to any subsequent purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments
are insufficient to cover escrow disbursements.
The Seller shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth or in accordance with Section 4.07. The
Seller shall be entitled to retain any interest paid on funds deposited in the
Escrow Account by the depository institution other than interest on escrowed
funds required by law to be paid to the Mortgagor and, to the extent required
by law, the Seller shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by Seller only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, Primary Mortgage Insurance Policy premiums, if applicable,
fire and hazard insurance premiums, condominium assessments and
comparable items;
(ii) to reimburse Seller for any Servicing Advance made by Seller
with respect to a related Mortgage Loan but only from amounts received on
the related Mortgage Loan which represent late payments or collections of
Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to
be overages;
(iv) for transfer to the Custodial Account in accordance with the
terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Seller, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to clear and terminate the Escrow Account on the termination
of this Agreement. As part of its servicing duties, the Seller shall pay
to the Mortgagors interest on funds in Escrow Account, to the extent
required by law, and to the extent that interest earned on funds in the
Escrow Account is insufficient, shall pay such interest from its own
funds, without any reimbursement therefor; and
(viii) to pay to the Mortgagors or other parties Insurance Proceeds
deposited in accordance with Section 4.06.
Section 4.08 Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Mortgage Insurance
Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the
Mortgaged Property and the status of primary mortgage insurance premiums and
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges, including renewal premiums and shall
effect payment thereof prior to the applicable penalty or termination date and
at a time appropriate for securing maximum discounts allowable, employing for
such purpose deposits of the Mortgagor in the Escrow Account which shall have
been estimated and accumulated by the Seller in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or applicable law. To the
extent that the Mortgage does not provide for Escrow Payments, the Seller
shall determine that any such payments are made by the Mortgagor at the time
they first become due. The Seller assumes full responsibility for the timely
payment of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds
to effect such payments.
The Seller will maintain in full force and effect Primary Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each Mortgage
Loan for which such coverage is herein required. Such coverage will be
maintained until the loan-to-value ratio of the related Mortgage Loan is
reduced to 80% or less in the case of a Mortgage Loan having a Loan-to-Value
Ratio at origination in excess of 80%. The Seller will not cancel or refuse to
renew any Primary Mortgage Insurance Policy in effect on the Closing Date that
is required to be kept in force under this Agreement unless a replacement
Primary Mortgage Insurance Policy for such canceled or nonrenewed policy is
obtained from and maintained with a Qualified Insurer. The Seller shall not
take any action which would result in non-coverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of
the Seller would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Seller shall promptly notify the insurer under
the related Primary Mortgage Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under the Primary Mortgage Insurance Policy. If
such Primary Mortgage Insurance Policy is terminated as a result of such
assumption or substitution of liability, the Seller shall obtain a replacement
Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Private Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such Primary Mortgage Insurance Policy and, in
this regard, to take such action as shall be necessary to permit recovery
under any Primary Mortgage Insurance Policy respecting a defaulted Mortgage
Loan. Pursuant to Section 4.04, any amounts collected by the Seller under any
Primary Mortgage Insurance Policy shall be deposited in the Custodial account,
subject to withdrawal pursuant to Section 4.05.
Section 4.09 Transfer of Accounts.
The Seller may transfer the Custodial Account or the Escrow Account
to a different Eligible Account from time to time. Such transfer shall be made
only upon obtaining the prior written consent of the Purchaser, which consent
will not be unreasonably withheld.
Section 4.10 Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is acceptable to FNMA and FHLMC
and customary in the area where the Mortgaged Property is located in an amount
which is equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan, and (b) an amount such
that the proceeds thereof shall be sufficient to prevent the Mortgagor and/or
the mortgagee from becoming a co-insurer. If required by the Flood Disaster
Protection Act of 1973, as amended, each Mortgage Loan shall be covered by a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration in effect with an insurance carrier
acceptable to FNMA and/or FHLMC, in an amount representing coverage not less
than the least of (i) the outstanding principal balance of the Mortgage Loan,
(ii) the maximum insurable value of the improvements securing such Mortgage
Loan or (iii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Seller determines in accordance with applicable
law and pursuant to the FNMA Guides that a Mortgaged Property is located in a
special flood hazard area and is not covered by flood insurance or is covered
in an amount less than the amount required by the Flood Disaster Protection
Act of 1973, as amended, the Seller shall 'notify the related Mortgagor that
the Mortgagor must obtain such flood insurance coverage, and if said Mortgagor
fails to obtain the required flood insurance coverage within forty-five (45)
days after such notification, the Seller shall immediately force place the
required flood insurance on the Mortgagor's behalf. The Seller shall also
maintain on each REO Property, fire and hazard insurance with extended
coverage in an amount which is at least equal to the maximum insurable value
of the improvements which are a part of such property, and, to the extent
required and available under the Flood Disaster Protection Act of 1973, as
amended, flood insurance in an amount as provided above. Any amounts collected
by the Seller under any such policies other than amounts to be deposited in
the Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with
Applicable Requirements, shall be deposited in the Custodial Account, subject
to withdrawal pursuant to Section 4.05. It is understood and agreed that no
other additional insurance need be requited by the Seller of the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to this Agreement, the FNMA Guides or such applicable state or
federal laws and regulations as shall at any time be in force and as shall
require such additional insurance. All such policies shall be endorsed with
standard mortgagee clauses with loss payable to the Seller and its successors
and/or assigns and shall provide for at least thirty days prior written notice
of any cancellation, reduction in the amount or material change in coverage to
the Seller. The Seller shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Seller shall not accept any such insurance policies from insurance
companies unless such companies are Qualified Insurers.
Section 4.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller shall obtain and maintain a blanket
policy issued by an issuer acceptable to FNMA and/or FHLMC insuring against
hazard losses on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to
Section 4.10 and otherwise complies with all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10, it being understood and agreed that such policy may
contain a deductible clause, in which case the Seller shall, in the event that
there shall not have been maintained on the related Mortgaged Property or REO
Property a policy complying with Section 4.10, and there shall have been a
loss which would have been covered by such policy, deposit in the Custodial
Account the amount not otherwise payable under the blanket policy because of
such deductible clause. In connection with its activities as servicer of the
Mortgage Loans, the Seller agrees to prepare and present, on behalf of the
Purchaser, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy. Upon request of the Purchaser, the
Seller shall cause to be delivered to the Purchaser a certified true copy of
such policy and shall use commercially reasonable best efforts to obtain a
statement from the insurer thereunder that such policy shall in no' event be
terminated or materially modified without thirty days, prior written notice to
the Purchaser.
Section 4.12 Fidelity Bond, Errors and Omissions Insurance.
The Seller shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in
any capacity with regard to the Mortgage Loan to handle funds, money,
documents and papers relating to the Mortgage Loan. The Fidelity Bond shall be
in the form of the Mortgage Banker's Blanket Bond and shall protect and insure
the Seller against losses, including forgery, theft, embezzlement and fraud of
such persons. The errors and omissions insurance shall protect and insure the
Seller against losses arising out of errors and omissions and negligent acts
of such persons. Such errors and omissions insurance shall also protect and
insure the Seller against losses in connection with the failure to maintain
any insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 4.12 requiring the
Fidelity Bond or errors and omissions insurance shall diminish or relieve the
Seller from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by FNMA in the FNMA Guide or by
FHLMC in the FHLMC Guide. The Seller shall deliver to the Purchaser a
certificate from the surety and the insurer as to the existence of the
Fidelity Bond and errors and omissions insurance policy and shall obtain a
statement from the surety and the insurer that such Fidelity Bond or insurance
policy shall in no event be terminated or materially modified without thirty
days, prior written notice to the Purchaser. The Seller shall notify the
Purchaser within five business days of receipt of notice that such Fidelity
Bond or insurance policy will be, or has been, materially modified or
terminated. The Purchaser (or any party having the status of Purchaser
hereunder) and any subsidiary thereof and their successors or assigns as their
interests may appear must be named as loss payees on the Fidelity Bond and as
additional insured on the errors and omissions policy. Upon request by
Purchaser, Seller shall provide Purchaser with an insurance certificate
certifying coverage under this Section 4.12, and will provide an update to
such certificate upon request, or upon renewal or material modification of
coverage.
Section 4.13 Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of, foreclosure, the deed or certificate of
sale shall be taken in the name of the Purchaser or its designee, or in the
event the Purchaser or its designee is not authorized or permitted to hold
title to real property in the state where the REO Property is located, or
would be adversely affected under the "doing business" or tax laws of such
state by so holding title, the deed or certificate of sale shall be taken in
the name of such Person or Persons as shall be consistent with an opinion of
counsel obtained by the Seller from an attorney duly licensed to practice law
in the state where the REO Property is located (the "Owners"). Any Person or
Persons holding such title other than the Purchaser shall acknowledge in
writing that such title is being held as nominee for the benefit of the
Purchaser.
The Seller shall notify the Purchaser in accordance with the FNMA
Guides of each acquisition of REO Property upon such acquisition, together
with a copy of the drive by appraisal or brokers price opinion of the
Mortgaged Property obtained in connection with such acquisition, and
thereafter assume the responsibility for marketing such REO property in
accordance with Applicable Requirements. Thereafter, the Seller shall continue
to provide certain administrative services to the Purchaser relating to such
REO Property as set forth in this Section 4.13.
The fee for such administrative services shall be $1,500 to be paid
upon liquidation of the REO Property. No Servicing Fee shall be assessed on
any REO Property from and after the date on which it becomes an REO Property.
The Seller shall, either itself or through an agent selected by the
Seller, and in accordance with the FNMA Guides manage, conserve, protect and
operate each REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in
the same manner that similar property in the same locality as the REO Property
is managed. The Seller shall cause each REO Property to be inspected promptly
upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least monthly thereafter or more frequently as required by the
circumstances. The Seller shall make or cause the Seller to be made a written
report of each such inspection. Such reports shall be retained in the Mortgage
File and copies thereof shall be forwarded by the Seller to the Purchaser.
The Seller shall use commercially reasonable best efforts to dispose
of the REO Property as soon as possible and shall sell such REO Property in
any event within one year after title has been taken to such REO Property,
unless the Seller determines, and gives an appropriate notice to the Purchaser
to such effect, that a longer period is necessary for the orderly liquidation
of such REO Property. If a longer period than one (1) year is permitted under
the foregoing sentence and is necessary to sell any REO Property, the Seller
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property. No REO Property shall be marketed for less than the
appraised value, without the prior consent of Purchaser. No REO Property shall
be sold for less than ninety five percent (95%) of its appraised value,
without the prior consent of Purchaser. If as of the date title to any REO
Property was acquired by or on behalf of the Purchaser there were outstanding
unreimbursed Servicing Advances with respect to the REO Property, the Seller
shall be entitled to immediate reimbursement from the Purchaser for any
related unreimbursed Servicing Advances. All requests for reimbursement of
Servicing Advances shall be in accordance with the FNMA Guides. The
disposition of REO Property shall be carried out by the Seller at such price,
and upon such terms and conditions, as the Seller deems to be in the best
interests of the Purchaser. Seller shall provide monthly reports to Purchaser
in reference to the status of the marketing of the REO Properties.
Notwithstanding anything to the contrary contained herein, the
Purchaser may, at the Purchaser's sole option, terminate the Seller as
servicer of any such REO Property without payment of any termination fee with
respect thereto, provided that the Seller shall on the date said termination
takes effect be reimbursed by withdrawal from the Custodial Account for any
unreimbursed advances of the Seller's funds made pursuant to Section 5.03 and
any unreimbursed Servicing Advances in each case relating to the Mortgage Loan
underlying such REO Property notwithstanding anything to the contrary set
forth in Section 4.05. In the event of any such termination, the provisions of
Section 11.01 hereof shall apply to said termination and the transfer of
servicing responsibilities with respect to such REO Property to the Purchaser
or its designee.
Section 4.14 Notification of Maturity Date.
With respect to each Mortgage Loan, the Seller shall execute and
deliver to the Mortgagor any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the maturity date if required under applicable law.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01 Distributions.
On each Remittance Date, the Seller shall distribute by wire transfer
to the Purchaser (i) all amounts credited to the Custodial Account as of the
close of business on the preceding Determination Date, net of charges against
or withdrawals from the Custodial Account pursuant to Section 4.05, plus (ii)
all Monthly Advances, if any, which the Seller is obligated to distribute
pursuant to Section 5.03, plus (iii) any Prepayment Interest Shortfall Amount,
provided that the Servicer's obligation as to payment of such amount shall be
limited to the Servicing Fee earned during the month of the distribution (iv)
any amounts attributable to Monthly Payments collected but due on a Due Date
or Dates subsequent to the preceding Determination Date, which amounts shall
be remitted on the Remittance Date next succeeding the Due Period for such
amounts, and any Principal Prepayments received during the month of such
Remittance Date, which amounts shall be remitted on the next succeeding
Remittance Date. It is understood that, by operation of Section 4.04, the
remittance on the first Remittance Date is to include principal collected
after the Cut-off Date through the preceding Determination Date plus interest,
at the Mortgage Loan Remittance Rate collected through such Determination Date
exclusive of any portion thereof allocable to the period prior to the Cut-off
Date, with the adjustments specified in clauses (ii), (iii) and (iv) above.
With respect to any remittance received by the Purchaser after the
Business Day on which such payment was due, the Seller shall pay to the
Purchaser 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 Custodial Account by
the Seller on the date such late payment is made and shall cover the period
commencing with the day following the Business Day on which such payment was
due 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 Remittance Date. The payment by the Seller of any such
interest shall not be deemed an extension of time for payment or a waiver of
any Event of Default by the Seller.
The wiring instructions for remittances of the Purchaser are as
follows:
Aurora Loan Services, Inc.
Bank: Chase Manhattan Bank
ABA# 021-000-021
Acct# 066-611059
Account Name: ALS M/S Payment Clearing Account
City: New York, New York
Reference: Attn: Linda Sherman
The names, addresses and phone numbers of four employees of Purchaser, two of
whom Servicer could contact to confirm receipt of the first remittance are:
Ron Sierra Todd Whittemore
Aurora Loan Services, Inc. Senior vice President
2530 S. Parker Road Aurora Loan Services, Inc.
Suite 601 2530 S. Parker Road
Aurora, Colorado 80014 Suite 601
Phone: (303) 632-3450 Aurora, Colorado 80014
Phone: (303) 632-3422
Linda Sherman Pete Karr
Assistant Vice President Senior Vice President
Aurora Loan Services, Inc. Aurora Loan Services, Inc.
2530 S. Parker Road 2530 S. Parker Road
Suite 601 Suite 601
Aurora, Colorado 80014 Aurora, Colorado 80014
Phone: (303) 632-3448 Phone: (303) 632-3458
Section 5.02 Statements to the Purchaser
The Seller shall furnish to Purchaser an individual loan accounting
report, as of the last Business Day of each month, in the Seller's assigned
loan number order to document Mortgage Loan payment activity on an individual
Mortgage Loan basis. With respect to each month, the corresponding individual
loan accounting report shall be received by the Purchaser no later than the
fifth Business Day of the following month on a disk or tape or other
computer-readable format in such format as may be mutually agreed upon by both
Purchaser and Seller, and no later than the seventh Business Day of the
following month in hard copy, which report, in hard copy, shall be
substantially in the form of Exhibit E, and shall contain the following:
(i) With respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
prepayment penalties or premiums, along with a detailed report of
interest on principal prepayment amounts remitted in accordance with
Section 4.04);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the Seller
during the prior distribution period;
(iv) the aggregate Stated Principal Balance of the Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Seller as
servicer during the prior distribution period pursuant to Section 4.05;
and
(vi) The number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3)
90 days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
The Seller shall also provide a trial balance, sorted in Purchaser's
assigned loan number order, in the form of Exhibit E hereto, with each such
Report.
The Seller shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to Purchaser pursuant to any applicable law with respect to the Mortgage
Loans and the transactions contemplated hereby. In addition, the Seller shall
provide Purchaser with such information concerning the Mortgage Loans as is
necessary for Purchaser to prepare its federal income tax return as Purchaser
may reasonably request from time to time.
In addition, not more than 60 days after the end of each calendar
year, the Seller shall furnish to each Person who was a Purchaser at any time
during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Section 5.03 Monthly Advances by the Seller.
Not later than the close of business on the Business Day preceding
each Remittance Date, the Seller shall deposit in the Custodial Account an
amount equal to all payments not previously advanced by the Seller, whether or
not deferred pursuant to Section 4.01, of principal (due after the Cut-off
Date) and interest not allocable to the period prior to the Cut-off Date, at
the Mortgage Loan Remittance Rate, which were due on a Mortgage Loan and
delinquent at the close of business on the related Determination Date.
The Seller's obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the last Monthly Payment due prior to the
payment in full of the Mortgage Loan, or through the Remittance Date prior to
the date on which the Mortgaged Property is liquidated (including Insurance
Proceeds, proceeds from the sale of REO Property or condemnation awards) with
respect to the Mortgage Loan, unless the Seller deems such advance to be
nonrecoverable. In such event, the Seller shall deliver to the Purchaser an
Officer's Certificate of the Seller to the effect that an officer of the
Seller has reviewed the related Mortgage File and has made the reasonable
determination that any additional advances are nonrecoverable.
Section 5.04 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed-in-lieu of
foreclosure, the Seller shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property. The Seller shall also provide reports
on the status of REO Property containing such information as Purchaser may
reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements.
The Seller will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that
the Seller shall not exercise any such rights if prohibited by law or the
terms of the Mortgage Note from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related Primary
Mortgage Insurance Policy, if any. If the Seller reasonably believes it is
unable under applicable law to enforce such "due-on-sale" clause, the Seller,
with the approval of the Purchaser (such approval not to be unreasonably
withheld), will enter into an assumption agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant
to which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. Where
an assumption is allowed pursuant to this Section 6.01, the Seller, with the
prior consent of the Purchaser and the primary mortgage insurer, if any, is
authorized to enter into a substitution of liability agreement with the person
to whom the Mortgaged Property has been conveyed or is proposed to be conveyed
pursuant to which the original mortgagor is released from liability and such
Person is substituted as mortgagor and becomes liable under the related
Mortgage Note. Any such substitution of liability agreement shall be in lieu
of an assumption agreement. Purchaser shall be deemed to have consented to-any
assumption for which Purchaser was given notification and requested to
consent, but for which neither a consent nor an objection was given by
Purchaser within two Business Days of such notification.
In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of the FNMA
Guides. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate borne by the related Mortgage Note, the amount of the
Monthly Payment and the maturity date may not be changed. If the credit of the
proposed transferee does not meet such underwriting criteria, the Seller
diligently shall, to the extent permitted by the Mortgage or the Mortgage Note
and by applicable law, accelerate the maturity of the Mortgage Loan. The
Seller shall notify the Purchaser that any such substitution of liability or
assumption agreement has been completed by forwarding to the Purchaser the
original of any such substitution of liability or assumption agreement, which
document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. All fees
collected by the Seller for entering into an assumption or substitution of
liability agreement shall belong to the Seller.
Notwithstanding the foregoing paragraphs of this Section or any other
provision of this Agreement, the Seller shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Seller may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 6.01, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Section 6.02 Satisfaction of Mortgages and Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser
by a certification, which certification shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant
to Section 4.04 have been or will be so deposited, of a Servicing Officer and
shall request delivery to it of the portion of the Mortgage File held by the
Purchaser. The Purchaser shall no later than five Business Days after receipt
of such certification and request, release or cause to be released to
the-Seller, the related Mortgage Loan Documents and, upon its receipt of such
documents, the Seller shall promptly prepare and execute (pursuant to a power
of attorney or limited officer appointment to be provided by Purchaser to
Seller) the requisite satisfaction or release. No expense incurred in
connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Custodial Account.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
mortgage instruments, the Seller, upon written demand, shall remit within two
Business Days to the Purchaser the then outstanding principal balance of the
related Mortgage Loan by deposit thereof in the Custodial Account. The Seller
shall maintain the Fidelity Bond and errors and omissions insurance insuring
the Seller against any loss it may sustain with respect to any Mortgage Loan
not satisfied in accordance with the procedures set forth herein.
From time to time and as appropriate for the service or foreclosure
of the Mortgage Loan, including for the purpose of collection under any
Primary Mortgage Insurance Policy, the Purchaser shall, upon request of the
Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the portion of the Mortgage File held by the
Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return the related Mortgage documents to the Purchaser when the need therefor
by the Seller no longer exists, unless the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Custodial Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Seller has delivered to the Purchaser a certificate of
a Servicing Officer certifying as to the name and address of the Person to
which such Mortgage File or such document was delivered and the purpose or
purposes of such delivery. Upon receipt of a certificate of a Servicing
Officer stating that such Mortgage Loan was liquidated, the servicing receipt
shall be released by the Purchaser to the Seller.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Seller shall be
entitled to withdraw from the Custodial Account (to the extent of interest
payments collected on the Mortgage Loans) or to retain from interest payments
on the Mortgage Loans the amounts provided for as the Seller's Servicing Fee,
subject to payment of -compensating interest on Principal Prepayments as
capped by the Servicing Fee pursuant to Section 5.01 (iii). Additional
servicing compensation in the form of income and other benefits derived from
escrow and custodial accounts assumption fees, as provided in Section 6.01,
late payment charges and other similar ancillary fees or otherwise shall be
retained by the Seller to the extent no , t required to be deposited in the
Custodial Account. The Seller shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for herein.
Section 6.04 Annual Statement as to Compliance.
The Seller will deliver to the Purchaser as, of September 30 of each
year, beginning with 2000, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Seller during
the preceding calendar 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 Seller has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. Copies of
such statement shall be provided by the Seller to the Purchaser upon request.
Section 6.05 Annual Independent Certified Public
Accountants' Servicing Report.
Within one hundred twenty (120) days of Seller's fiscal year end
(December 31 of each year beginning December 31, 2000) the Seller at its
expense shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a
statement to the 'Purchaser to the effect that such firm has examined certain
documents and records relating to the Seller's servicing of mortgage loans of
the same type as the Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may include this
Agreement, and that, on the basis of such an examination, conducted
substantially in the uniform single attestation program for mortgage bankers,
such firm is of the opinion that the Seller's servicing has been conducted in
compliance with the agreements examined pursuant to this Section 6.05, except
for (i) such exceptions as such firm shall believe to be immaterial, and (ii)
such other exceptions as shall be set forth in such statement. Copies of such
statement shall be provided by the Seller to the Purchaser. In addition, on an
annual basis, Seller shall provided Purchaser with copies of its audited
financial statements upon execution by Purchaser of an agreement to keep
confidential the contents of such financial statements.
Section 6.06 Purchaser's Right to Examine Seller Records.
The Purchaser shall have the right to examine and audit upon
reasonable notice to the Seller, during business hours or at such other times
as might be reasonable under applicable circumstances, any and all of the
books, records, documentation or other information of the Seller, or held by
another for the Seller or on its behalf or otherwise, which relates to the
performance or observance by the Seller of the terms, covenants or conditions
of this Agreement.
The Seller shall provide to the Purchaser and any supervisory agents
or examiners representing a state or federal governmental agency having
jurisdiction over the Purchaser, including but not limited to OTS, FDIC and
other similar entities, access to any documentation regarding the Mortgage
Loans in the possession of the Seller which may be required by any applicable
regulations. Such access shall be afforded without charge, upon reasonable
request, during normal business hours and at the offices of the Seller, and in
accordance with the federal government, FDIC, OTS, or any other similar
regulations.
Section 6.07 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 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 officer and the nature
and status thereof including the steps being taken by the Servicer to remedy
such default.
ARTICLE VII
Section 7.01 Seller Shall Provide Information as Reasonably Required.
The Seller shall furnish to the Purchaser during the term of this
Agreement, such periodic, special or other reports, information or
documentation, whether or not provided for herein, as shall be necessary,
reasonable or appropriate in respect to the Purchaser, or otherwise in respect
to the Mortgage Loans and the performance of the Seller under this Agreement,
including any reports, information or documentation reasonably required to
comply with any regulations regarding any supervisory agents or examiners of
the Purchaser all such reports or information to be as provided by and in
accordance with such applicable instructions and directions as the Purchaser
may reasonably request in relation to this Agreement or the performance of the
Seller under this Agreement. The Seller agrees to execute and deliver all such
instruments and take all such action as the Purchaser, from time to time, may
reasonably request in order to effectuate the purpose and to carry out the
terms of this Agreement.
In connection with marketing the mortgage Loans, the Purchaser may
make available to a prospective purchaser audited financial statements of the
Seller for the most recently completed two (2) fiscal years for which such
statements are available, as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by any Consolidated Statement
of Operations. If it has not already done so, the Seller shall furnish
promptly to the Purchaser or a prospective purchaser copies of the statements
specified above; provided, however, that prior to furnished such statements or
information to any prospective purchaser, the Seller may require such
prospective purchaser to execute a confidentiality agreement in a form
satisfactory to the Seller.
The Seller shall make reasonably available to the Purchase or any
prospective Purchaser a knowledgeable financial or accounting officer for the
purpose of answering questions and to permit any prospective purchaser to
inspect the Seller's servicing facilities for the purpose of satisfying such
prospective purchaser that the Seller has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VIII
THE SELLER
Section 8.01 Indemnification; Third Party Claims.
The Seller agrees to indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of
the Seller to observe and perform its duties, obligations, covenants, and
agreements to service the Mortgage Loans in strict compliance with the terms
of this Agreement. The Seller agrees to indemnify the Purchaser and hold it
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees and expenses that the Purchaser may sustain in any way related to the
breach of a representation or warranty set forth in Sections 3.01 or 3.02 of
this Agreement. The Seller shall immediately notify the -Purchaser if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the consent of the Purchaser) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the Purchaser in respect of such claim. The Seller shall follow any
written instructions received from the Purchaser in connection with such
claim. The Purchaser shall promptly reimburse the Seller for all amounts
advanced by it pursuant to the two preceding sentences except when the claim
relates to the failure of the Seller to service and administer the Mortgages
in strict compliance with the terms of this Agreement, the breach of
representation or warranty set forth in Sections 3.01 or 3.02, or the gross
negligence, bad faith or willful misconduct of Seller. The provisions of this
Section 8.01 shall survive termination of this Agreement.
Section 8.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Seller shall be a party, or any Person succeeding to the business of
the Seller whether or not related to loan servicing, shall be the successor of
the Seller hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor or surviving
Person shall be an institution (i) having a GAAP net worth of not less than
$25,000,000, (ii) the deposits of which are insured by the FDIC, SAIF and/or
BIF, or which is a HUD-approved mortgagee whose primary business is in
origination and servicing of first lien mortgage loans, and (iii) who is a
FNMA or FHLMC approved seller/service in good standing.
Section 8.03 Limitation on Liability of. the Seller and Others.
Neither the Seller nor any of the officers, employees or agents of
the Seller shall be under any liability to the Purchaser for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment made in good faith; provided, however,
that this provision shall not protect the Seller or any such person against
any breach of warranties or representations made herein, or failure to perform
its obligations in strict compliance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
negligence, bad faith or willful misconduct, or any breach of the terms and
conditions of this Agreement. The Seller and any officer, employee or agent of
the Seller may rely in good faith on any document of any kind prima facie
properly executed and submitted by the Purchaser respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
reasonable opinion may involve it in any expenses or liability; provided,
however, that the Seller may, with the consent of the Purchaser, undertake any
such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
reasonable legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities for which the Purchaser
will be liable, and the Seller shall be entitled to be reimbursed therefor
from the Purchaser upon written demand.
Section 8.04 Seller Not to Assign or Resign.
The Seller shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Seller and the Purchaser or upon the determination that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Seller. Any such determination permitting the resignation of the
Seller shall be evidenced by an Opinion of Counsel to such effect delivered to
the Purchaser which Opinion of Counsel shall be in form and substance
acceptable to the Purchaser. No such resignation shall become effective until
a successor shall have assumed the Seller's responsibilities and obligations
hereunder in the manner provided in Section 11.01.
Section 8.05 No Transfer of Servicing.
With respect to the retention of the Seller to service the Mortgage
Loans hereunder, the Seller acknowledges that the Purchaser has acted in
reliance upon the Seller's independent status, the adequacy of its servicing
facilities, plan, , personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this Section, the Seller shall not either
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion thereof, or sell or otherwise dispose of all
or substantially all of its property or assets, without the prior written
approval of the Purchaser.
Without in any way limiting the generality of this Section 8.05, in
the event that the Seller either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof without (i) satisfying the requirements set forth herein or (ii) the
prior written consent of the Purchaser, then the Purchaser shall have the
right to terminate this Agreement as set forth in Section 10.02, without any
payment of any penalty or damages and without any liability whatsoever to the
Seller (other than with respect to accrued but unpaid Servicing Advances
remaining unpaid) or any third party.
ARTICLE IX
DEFAULT
Section 9.01 Events of Default.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of two Business Days after the date upon which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Seller by the Purchaser or the date upon which
such non-payment is discovered by Seller; or
(ii) failure on the part of the Seller duly to observe or perform in
any material respect any other of the covenants or agreements on the part
of the Seller set forth in this Agreement which continues unremedied for
a period of thirty days (except that such number of days shall be fifteen
in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement) after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Seller by the Purchaser; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been entered
against the Seller and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidation in any insolvency, bankruptcy, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Seller or of or relating to all or substantially all of
its property; or
(v) the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) Seller ceases to be approved by both FNMA and FHLMC as a
mortgage loan seller and servicer for more than thirty days; or
(vii) the Seller attempts to assign its right to servicing
compensation hereunder or the Seller attempts, without the consent of the
Purchaser, to sell or otherwise dispose of all or substantially all of
its property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereof; or
(viii) the Seller ceases to be (a) licensed to service first lien
residential mortgage loans, in each jurisdiction in which a Mortgaged
Property is located and such licensing is required, and (b) qualified to
transact business in any jurisdiction where it is currently so qualified,
but only to the extent such non-qualification materially and adversely
affects the Seller's ability to perform its obligations hereunder; or
(ix) the Seller fails to meet the eligibility criteria set forth in
the last sentence of Section 8.02.
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Purchaser, by notice in writing to the Seller may,
in addition to whatever rights the Purchaser may have under Sections 3.03 and
8.01 and at law or equity or to damages, including injunctive relief and
specific performance, terminate all the rights and obligations of the Seller
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Seller for the same. On or after the receipt by the
Seller of such written notice, all authority and power of the Seller under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall
pass to and be vested in the successor appointed pursuant to Section 11.01.
Upon written request from the Purchaser, the Seller shall prepare, execute and
deliver, any and all documents and other instruments, place in such
successor's possession all Mortgage Files, and do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at the Seller's sole
expense. The Seller agrees to cooperate with the Purchaser and such successor
in effecting the termination of the Seller's responsibilities and rights
hereunder, 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 Seller to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans or any REO Property.
Section 9.02 Waiver of Defaults.
The Purchaser may waive only by written notice any default by the
Seller in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to exist, and
any Event of Default 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 in writing.
ARTICLE X
TERMINATION
Section 10.01 Termination.
The respective obligations and responsibilities of the Seller shall
terminate upon: (i) the later of the final payment or other liquidation (or
any advance with respect thereto) of the last Mortgage Loan or the disposition
of all REO Property and the remittance of all funds due hereunder; or (ii) by
mutual consent of the Seller and the Purchaser in writing; or (iii)
termination with or without cause under the terms of this Agreement.
Section 10.02 Termination Without Cause.
The Purchaser may, at its sole option, terminate any rights the
Seller may have hereunder, without cause, upon written notice. Any such notice
of termination shall be in writing and delivered to the Seller as provided in
Section 11.05 of this Agreement. In the event of such termination, the
Purchaser' agrees to pay as liquidated damages, a sum equal to a percentage of
the aggregate unpaid principal balance of the Mortgage Loans, as follows: two
and one half percent (2.5%) for any Mortgage Loans having Mortgaged Property
in the states of New York, New Jersey or Connecticut; two percent (2.0%) for
all remaining Mortgage Loans. Notwithstanding the foregoing, there shall be no
fee or liquidated damages for termination pursuant to this Section with
respect to any Mortgage Loans ninety (90) days or more delinquent.
ARTICLE XI
RECONSTITUTION OF MORTGAGE LOANS
Section 11.01 Reconstitution of Mortgage Loans.
(a) The Seller acknowledges and the Purchaser agrees that with
respect to some or all of the Mortgage Loans, the Purchaser may effect either:
(i) one or more sales of the Mortgage Loans as whole loan transfers
(each, a "Whole Loan Transfer"); and/or
(ii) one or more sales of the Mortgage Loans as pass-through
transfer (each, a "Pass-Through Transfer").
(b) With respect to each Whole Loan Transfer or Pass-Through
Transfer, as the case may be, the Seller agrees:
(i) cooperate fully with the Purchaser and any prospective purchaser
with respect to all reasonable requests and reasonable due diligence
procedures including participating in meetings with rating agencies, bond
insurers and such other parties as the Purchaser shall designate and
participating in meetings with prospective purchasers of the Mortgage
Loans or interests therein and providing information reasonably requested
by such purchasers;
(i) to execute all agreements required to be executed by the Seller
in connection with such Whole Loan Transfer or Pass-Through Transfer
provided that such agreements will not contain any greater obligations on
the part of Seller as are contained in this Agreement and Seller is given
an opportunity to review and reasonably negotiate in good faith the
content of such documents.
(ii) to deliver to the Purchaser and to any Person designated by the
Purchaser for inclusion in any prospectus or other offering material such
publicly available information regarding the Seller, its financial
condition and its mortgage loan delinquency, foreclosure experience and
any additional information reasonably requested by the Purchaser, and to
- indemnify the Purchaser and its affiliates for material misstatements
contained in such information, and (c) such statements and audit letters
of reputable, certified public accountants pertaining to information
provided by the Seller as shall be reasonably requested by the Purchaser;
and
(iii) to deliver to the Purchaser, and to any Person designated by
the Purchaser, such in-house opinions of counsel in a form reasonably
acceptable to the Purchaser as are customarily delivered by servicers and
reasonably determined by the Purchaser to be necessary in connection with
Whole Loan Transfers or Pass-Through Transfers.
(iv) the third party costs incurred by Seller in connection with
compliance with this Section 11.01, including but not limited to the
costs of opinions of outside special counsel that may be required for a
Whole Loan Transfer or Pass-Through Transfer, shall be the responsibility
of the Purchaser.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to the Seller.
Prior to termination of Seller's responsibilities and duties under
this Agreement pursuant to Sections 4.13, 8.04, 9.01, 10.01 or 10.02, the
Purchaser shall (i) succeed to and assume all of the Seller's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02
hereof and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Seller under this Agreement
prior to the termination of Seller's responsibilities, duties and liabilities
under this Agreement. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as the Purchaser and such successor shall
agree. In the event that the Seller's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
Sections, the Seller 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 Seller pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section and shall in no event relieve the Seller of
the representations and warranties made pursuant to Sections 3.01, 3.02 and
3.03 and the remedies available to the Purchaser thereunder and under Section
8.01, it being understood and agreed that the provisions of such Sections
3.01, 3.02, 3.03 and 8.01 shall be applicable to the Seller notwithstanding
any such resignation or termination of the Seller, or the termination of this
Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Seller and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Seller, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Seller or this Agreement pursuant to
Section 4.13, 8.04, 9.01, 10.01, or 10.02 shall not affect any claims that the
Purchaser may have against the Seller arising prior to any such termination or
resignation.
The Seller shall promptly deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Seller shall account for
all funds. The Seller shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely
vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Seller. The successor
shall make arrangements as it may deem appropriate to reimburse the Seller for
unrecovered Servicing Advances which the successor retains hereunder and which
would otherwise have been recovered by the Seller pursuant to this Agreement
but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Seller
shall notify by mail the Purchaser of such appointment.
Section 12.02 Amendment.
This Agreement may be amended from time to time by the Seller and the
Purchaser by written agreement signed by the Seller and the Purchaser.
Section 12.03 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any of all the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Seller at the Seller's expense on direction of the Purchaser accompanied by an
opinion of counsel to the effect that such recordation materially and
beneficially affects the interest of the Purchaser or is necessary for the
administration or servicing of the Mortgage Loans.
Section 12.04 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York except to the extent preempted by federal
law, without giving effect to choice of law principles. The obligations,
rights and remedies, of the parties hereunder shall be determined in
accordance with such laws.
Section 12.05 Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally delivered at or mailed by registered mail, postage
prepaid, and return receipt requested or certified mail, return receipt
requested, or transmitted by telex, telegraph or telecopier and confirmed by a
similar mailed writing, as follows:
(i) if to the Seller:
Chase Manhattan Mortgage Corporation
343 Thornall Street
Edison, NJ 08837
Attention: Michael D. Katz
with copy to: General Counsel
(ii) if to the Purchaser:
Lehman Brothers Bank, FSB
3 World Financial Center
New York, NY 10285
Attention: Matthew Ziffer
with copy to: General Counsel
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 12.06 Severability of Provisions.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any provision hereof. If the invalidity of any part, provision, representation
or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
Section 12.07 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 12.08 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular,
and the use of any gender herein shall be deemed to include the other
gender;
(ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles;
(iii) references herein to "Articles", "Sections", Subsections",
"Paragraphs", and other subdivisions without reference to a document are
to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same
Section in which the reference appears, and this rule shall also apply to
Paragraphs and other subdivisions;
(v) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular provision;
(vi) the term "include" or "including" shall mean without limitation
by reason of enumeration; and
(vii) headings of the Articles and Sections in this Agreement are
for reference purposes only and shall not be deemed to have any
substantive effect.
Section 12.09 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
Section 12.10 Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it may
become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Each party agrees to keep all
non-public information regarding the other party strictly confidential, and to
use all such information solely in order to effectuate the purpose of the
Agreement, provided that each party may provide confidential information to
its employees, agents and affiliates who have a need to know such information
in order to effectuate the transaction, provided further that such information
is identified as confidential non-public information. In addition,
confidential information may be provided to a regulatory authority with
supervisory power over Purchaser, provided such information is identified as
confidential non-public information.
Section 12.11 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in
which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
Section 12.12 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Seller
hereof, to assign, in whole or in part, its interest under this Agreement with
respect to some or all of the Mortgage Loans, and designate any person to
exercise any rights of the Purchaser hereunder, by executing an Assignment and
Assumption Agreement substantially in the form of Exhibit D hereto and the
assignee or designee shall accede to the rights and obligations hereunder of
the Purchaser with respect to such Mortgage Loans. In no event shall Purchaser
sell a partial interest in any Mortgage Loan without the written consent of
Seller, which consent shall not be unreasonably denied. All references to the
Purchaser in this Agreement shall be deemed to include its assignee or
designee. However, in no event shall there be more than three (3) Persons at
any given time having the status of "Purchaser" hereunder.
Section 12.13 No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Seller shall be rendered as an independent contractor and not as agent for
Purchaser.
Section 12.14 Execution: Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same agreement. Subject to Section 8.04, this
Agreement shall inure to the benefit of and be binding upon the Seller and the
Purchaser and their respective successors and assigns.
Section 12.15 Entire Agreement.
The Seller acknowledges that no representations, agreements or
promises were made to the Seller by the Purchaser or any of its employees
other than those representations, agreements or promises specifically
contained herein. This Agreement sets forth the entire understanding between
the parties hereto and shall be binding upon all successors of both parties.
In the event of any inconsistency between the Purchase Price and Terms Letter
and this Agreement, this Agreement shall control.
Section 12.16 No Solicitation.
From and after-the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan to refinance the Mortgage Loan, in whole or in part, without the
prior written consent of the Purchaser. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Seller or any
affiliate of the Seller which are directed to the general public at large, or
segments thereof, provided that no segment shall consist primarily of the
Mortgage Loans, including, without limitation, mass mailing based on
commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this Section 12.16.
This Section 12.16 shall not be deemed to preclude the Seller or any of its
affiliates from soliciting any Mortgagor for any other financial products or
services. In addition, Seller shall use its commercially reasonable best
efforts to prevent the sale of the name of any Mortgagor to any Person who is
not an affiliate of Seller and who Seller knows will solicit the Mortgagor for
refinance.
Section 12.17 Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. The closing shall be either: by telephone,
confirmed by letter or wire as the parties shall agree, or conducted in
person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser a magnetic diskette, or transmit by
modem, a listing on a loan-level basis of the information contained in the
Mortgage Loan Schedule;
(b) all of the representations and warranties of the Seller under
this Agreement shall be materially true and correct as of the Closing Date and
no event shall have occurred which, with notice or the passage of time, would
constitute a material default under this Agreement;
(c) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all closing documents, in such forms as are
agreed upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(d) the Seller shall have delivered and released to the Purchaser (or
its designee) on or prior to the Closing Date all documents required pursuant
to the terms of this Agreement; and
(e) all other terms and conditions of this Agreement and the Purchase
Price and Terms Letter shall have been materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant
to Section 2.02 of this Agreement, by wire transfer of immediately available
funds to the account designated by the Seller.
Section 12.18 Section 12.18 Intended Third Party Beneficiaries.
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 and the trustee receive the benefit of the provisions of this
Agreement as intended third party beneficiaries of this Agreement to the
extent of such provisions.
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
LEHMAN BROTHERS BANK, FSB Purchaser
By:
---------------------------------
Name:
Title:
CHASE MANHATTAN MORTGAGE CORPORATION
Seller and Servicer
By:
----------------------------------
Name: Michael D. Katz
Title: Senior Vice President
<PAGE>
EXHIBIT A
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser, and which shall be retained by the Seller in the Servicing File or
delivered to the Purchaser or its -designee pursuant to Sections 2.04 and 2.05
of the Mortgage Loan Purchase, Warranties and Servicing Agreement.
1. The original Mortgage Note endorsed "Pay to the order of _________
____________, without recourse," and signed in the name of the Seller by an
authorized officer, with all intervening endorsements showing a complete chain
of title from the originator to the Seller. If the Mortgage Loan was acquired
by the Seller in a merger, the endorsement must be by "[Seller], successor by
merger to the [name of predecessor]". If the Mortgage Loan was acquired or
originated by the Seller while doing business under another name, the
endorsement must be by "[Seller] formerly known as [previous name]". In the
event that the original Mortgage Note is lost, a lost note affidavit may be
provided.
2. The original Mortgage with evidence of recording thereon, or a
copy thereof certified by the public recording office in which such mortgage
has been recorded or, if the original Mortgage has not been returned from the
applicable public recording office, a true certified copy, certified by the
Seller, of the original Mortgage together with a certificate of the Seller
certifying that the original Mortgage has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located.
3. The original or certified to be true copy, certified by the
Seller, of the Primary Mortgage Insurance Policy, if required.
4. The original Assignment, from the Seller to ____________________,
or in accordance with Purchaser's instructions, which assignment shall, but
for any blanks requested by Purchaser, be in form and substance acceptable for
recording, or a copy certified by Seller as a true and correct copy of the
original Assignment which has been sent for recordation. If the Mortgage Loan
was acquired or originated by the Seller while doing business under another
name, the Assignment must be by "(Seller] formerly known as [previous name]".
5. With respect to Mortgage Loans that are not Co-op Loans, the
original policy of title insurance, including riders and endorsements thereto,
or if the policy has not yet been issued, a written commitment or interim
binder or preliminary report of title issued by the title insurance or escrow
company.
6. Originals of all recorded intervening Assignments, or copies
thereof, certified by the public recording office in which such Assignments
have been recorded showing a complete chain of title from the originator to
the Seller, with evidence of recording thereon, or a copy thereof certified by
the public recording office in which such Assignment has been recorded or, if
the original Assignment has not been returned from the applicable public
recording office, a true certified copy, certified by the Seller of the
original Assignment together with a certificate of the Seller certifying that
the original Assignment has been delivered for recording in the appropriate
public recording office of the jurisdiction in which the Mortgaged Property is
located.
7. Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such-document has not been returned from the
applicable public recording office, a true certified copy, certified by the
Seller, of such original document together with certificate of Seller
certifying the original of such document has been delivered for recording in
the appropriate recording office of the jurisdiction in which the Mortgage
Property is located.
8. If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a person on behalf
of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original
power of attorney or other such instrument has been delivered for recording in
the appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located.
9. Intentionally Deleted
10. Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending or real estate settlement procedure forms required by law.
11. Residential loan application.
12. Uniform underwriter and transmittal summary (FNMA Form 1008) or
reasonable equivalent.
13. Credit report on the mortgagor.
14. Business credit report, if applicable.
15. Residential appraisal report and attachments thereto.
16. The original of any guarantee executed in connection with the
Mortgage Note.
17. verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program, all in accordance with
Seller's underwriting guidelines.
18. Verification of acceptable evidence of source and amount of down
payment, in accordance with Seller's underwriting guidelines.
19. Photograph of the Mortgaged Property (may be part of appraisal).
20. Survey of the Mortgaged Property, if any.
21. Sales contract, if applicable.
22. If available, termite report, structural engineer's report, water
portability and septic certification.
23. Any original security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
24. The original of any guarantee executed in connection with the
Mortgage Note.
Notwithstanding anything to the `contrary herein, Seller may provide
one certificate for all of the Mortgage Loans indicating that the documents
were delivered for recording.
<PAGE>
EXHIBIT A
Contents of Mortgage File
<PAGE>
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
October 13, 2000
To: The Chase Manhattan Bank
270 Park Avenue
NewYork, NY 10017
(the "Depository")
As "Seller" under the Mortgage Loan Purchase, Warranties and Servicing
Agreement, dated as of October 1, 2000, Whole Loan Series 2000-WL-1 (the
"Agreement"), we hereby authorize and request you to establish an account, as
a Custodial Account pursuant to Section 4.04 of the Agreement, to be
designated as "Chase Manhattan Mortgage Corporation, in trust for the
Purchaser, Owner of Whole Loan Series 00b-WL-1-1 All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Seller. This
letter is submitted to you in duplicate. Please execute and return one
original to us.
CHASE MANHATTAN MORTGAGE CORPORATION
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
The undersigned, as "Depository", hereby certifies that the above described
account has been established under Account Number ________________________, at
the office of the depository indicated above, and agrees to honor withdrawals
on such account as provided above.
THE CHASE MANHATTAN BANK
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
<PAGE>
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
October 13, 2000
To: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
(the "Depository").
As "Seller" under the Mortgage Loan Purchase, Warranties and
Servicing Agreement, dated as of October 1, 2000 Whole Loan Series 2000-WL-1
(the "Agreement"), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 4.06 of the Agreement, to be
designated as "Chase Manhattan Mortgage Corporation, in trust for the
Purchaser, Owner of Whole Loan Series 2000-WL-1, and various Mortgagors.11 All
deposits in the account shall be subject to withdrawal therefrom by order
signed by the Seller. This letter is submitted to you in duplicate. Please
execute and return one original to us.
CHASE MANHATTAN MORTGAGE CORPORATION
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
The undersigned, as "Depository", hereby certifies that the above described
account has been established under Account Number I at the office of the
depository indicated above, and agrees to honor withdrawals on such account as
provided above.
THE CHASE MANHATTAN BANK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
<PAGE>
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ___________________,
between ________________________, a _________________________________________
corporation ("Assignor"),and ___________________________, ___________________ a
corporation ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all
of the right, title and interest of Assignor, as Purchaser, in, to and under
(a) those certain Mortgage Loans listed on Exhibit A attached hereto (the
"Mortgage Loans") and (b) that certain Purchase, Warranties and Servicing
Agreement, Whole Loan Series 2000-WL-1 (the "Purchase, Warranties and
Servicing Agreement"), dated as of October 1, 2000 by and between Lehman
Brothers Bank, FSB, Purchaser and Chase Manhattan Mortgage Corporation, Seller
and Servicer, with respect to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under and
all obligations of the Assignor with respect to any mortgage loans subject to
the Purchase, Warranties and Servicing Agreement which are not the Mortgage
Loans set forth on Exhibit A attached hereto and are not the subject of this
Assignment and Assumption Agreement.
2. The assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice or, and has no knowledge
of, any offsets, counterclaims or other defenses available to the Seller or
the Servicer with respect to the Purchase, Warranties and Servicing Agreement
or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Purchase, Warranties and
Servicing Agreement or the Mortgage Loans, including without limitation the
transfer of the servicing obligations under the purchase, Warranties and
Servicing Agreement. The Assignor has no knowledge of, and has not received
notice of, any waivers under or amendments or other modifications of, or
assignments of rights or obligations under or defaults under, the Purchase,
Warranties and Servicing Agreement, or the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage
Loans, any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition
of the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar
security with, any person in any manner, or made by general solicitation by
means of general advertising or in any other manner, or taken any other action
which' would constitute a distribution of the Mortgage Loans under the
Securities Act of 1933 (the "1933 Act") or which would render the disposition
of the Mortgage Loans a violation of Section 5 of the 1933 Act or require
registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor, the Seller and the Servicer that:
a. The Assignee is a corporation duly organized, validly existing
and in' good standing under the laws of the jurisdiction of its incorporation,
and has all requisite corporate power and authority to acquire, own and
purchase the Mortgage Loans;
b. The Assignee has full corporate power and authority to execute,
deliver and perform under this Assignment and Assumption Agreement, and to
consummate the transactions set forth herein. The execution, delivery and
performance of the Assignee of this Assignment and Assumption Agreement, and
the consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Assignee. This Assignment
and Assumption Agreement has been duly executed and delivered by the Assignee
and constitutes the valid and legally binding obligation of the Assignee
enforceable against the Assignee in accordance with its respective terms;
c. To the best of Assignee's knowledge, no material consent,
approval, order or authorization of, or declaration, filing or registration
with, any governmental entity is required to be obtained or made by the
Assignee in connection with the execution, delivery or performance by the
Assignee of this Assignment and Assumption Agreement, or the consummation by
it of the transactions contemplated hereby;
d. The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Purchase, Warranties and Servicing
Agreement and the Mortgage Loans, and from and after the date hereof, the
Assignee assumes for the benefit of each of the Seller, the Servicer and the
Assignor all of the Assignor's obligations as Purchaser thereunder, with
respect to the Mortgage Loans;
e. The Assignee understands that the Mortgage Loans have not been
registered under the 1933 Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the Mortgage
Loans is in excess of $250, 000 and will be paid by cash remittance of the
full purchase price within sixty (60) days of the sale;
g. The Assignee is acquiring the Mortgage Loans f or investment
for its own account only and not for any other person;
h. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and financial and business
matters that it is capable of evaluating the merits and the risks of
investment in the Mortgage Loans;
i. The Assignee has been furnished with all information regarding
the Mortgage Loans that it has requested from the Assignor, the Seller or the
Servicer;
j. Neither the Assignee nor anyone acting on its behalf has
offered,. transferred, pledged, sold or otherwise disposed of the Mortgage
Loans, an interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition
of the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action
which would constitute a distribution of the Mortgage Loans under the 1933 Act
or which would render the disposition of the Mortgage Loans a violation of
Section 5 of the 1933 Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"),
and the Assignee is not directly or indirectly purchasing the Mortgage Loans
on behalf of, investment manager of, as named fiduciary of, as trustee of, or
with assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans
will not result in a prohibited transaction under section 406 of ERISA or
section 4975 of the Code.
Distributions shall be made by wire transfer of immediately
available funds to ______________________ for the account of __________________
__________ account number _____________________________________________________
Applicable statements should be mailed to _____________________________________
____________________________________________.
<PAGE>
The Assignor's address for purposes for all notices and correspondence related
to the Mortgage Loans and this Agreement is:
-----------------------------------------
-----------------------------------------
Attention:
--------------------------------
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption to be executed by their duly authorized officers as of the date
first above written.
--------------------------------------- -------------------------------
Assignor Assignee
By: By:
------------------------------------ -----------------------------
Its: Its:
---------------------------------- -----------------------------
Taxpayer Identification Taxpayer Identification
Number: Number:
-------------------------------- --------------------------
Acknowledged:
Chase Manhattan Mortgage Corporation
By:
------------------------------------
Its:
-----------------------------------
<PAGE>
EXHIBIT A to Assignment and Assumption Agreement
MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT
<PAGE>
EXHIBIT B to Assignment and Assumption Agreement
THE MORTGAGE LOANS
<PAGE>
EXHIBIT E
FORM OF TRIAL BALANCE
<PAGE>
EXHIBIT F
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
RE: Mortgage Loan #
----------------------------------------
BORROWER:
------------------------------------------------------------------
PROPERTY:
-------------------------------------------------------------------
Pursuant to a Mortgage Loan Purchase, Warranties and Servicing Agreement (the
"Agreement") between the Seller and the Purchaser, the undersigned hereby
certifies that he or she is an officer of the Seller requesting release of the
documents for the reason specified below. The undersigned further certifies
that:
(Check one of the items below)
_____ On , the above captioned mortgage loan was paid in full or that the
Seller has been notified that payment in full has been or will be escrowed.
The Seller hereby certifies that all amounts with respect to this loan which
are required under the Agreement have been or will be deposited in the
Custodial Account as required.
_____ The above captioned loan is being repurchased pursuant to the terms
of Agreement. The Seller hereby certifies that the repurchase price has been
credited to the Custodial Account as required under the Agreement.
____ The above captioned loan is being placed in foreclosure and the
original documents are required to proceed with the foreclosure action. The
Seller hereby certifies that the documents will be returned to the Purchaser
in the event of reinstatement.
_____ Other (explain)
----------------------------------------------------
----------------------------------------------------
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Agreement.
<PAGE>
Based on this certification and the indemnities provided for in the Agreement,
please release to the Seller all original mortgage documents in your
possession relating to this loan.
Dated: By:
------------------------------ -----------------------------
Signature
-----------------------------
Title
Send documents to:
Acknowledgement:
Purchaser hereby acknowledges that all original documents previously released
on the above captioned mortgage loan have been returned and received by the
Purchaser.
Dated: By:
----------------------------- -------------------------------
Signature
-------------------------------
Title
<PAGE>
EXHIBIT H
(WL-1)
<PAGE>
EXHIBIT C
Assignment, Assumption and Recognition Agreement
<PAGE>
EXHIBIT D
Mortgage Loan Schedule
