Brown & Wood Draft
December 14, 2000
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
------------------------------------------------
This is an Assignment, Assumption and Recognition Agreement (this
"Agreement") made this 18th day of December, 2000, among Greenwich Capital
Financial Products, Inc. (the "Original Owner"), Bankers Trust Company of
California, N.A., as trustee of HarborView Mortgage Loan Trust 2000-2 (the
"Subsequent Purchaser") and Washington Mutual Bank, FA ("WMBFA").
RECITALS
A. The mortgage loans listed on Exhibit One hereto (the "Serviced Loans")
are currently being serviced by WMBFA for the Original Owner pursuant to the
Master Mortgage Loan Purchase and Servicing Agreement, dated as of October 1,
2000, as amended by the First Amendment (the "First Amendment"), dated as of
October 1, 2000 (the "Servicing Agreement"), between the Original Owner,
Washington Mutual Bank, Washington Mutual Bank fsb and WMBFA, a copy of which
is annexed hereto as Exhibit Two.
B. The Original Owner proposes, pursuant to the Pooling and Servicing
Agreement, dated as of December 1, 2000, between the Original Owner and the
Subsequent Purchaser, to transfer the Serviced Loans to the Subsequent
Purchaser as part of a publicly issued and privately placed mortgage-backed
securities transaction.
C. Section 24 of the Servicing Agreement provides that, among other
things, the Original Owner may assign the Servicing Agreement to any person to
whom any "Mortgage Loan" (as that term is defined in the Servicing Agreement)
is transferred, whether pursuant to a sale or financing. Pursuant to Section
12 of the Servicing Agreement, the Original Owner may, subject to certain
conditions set forth therein, effect one or more "Pass-Through Transfers" (as
that term is defined in the Servicing Agreement) with respect to some or all
of the Mortgage Loans.
D. In consideration of the mutual promises contained herein the parties
hereto agree that the Serviced Loans shall be subject to the terms of this
Agreement.
Warranties
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1. The Original Owner and WMBFA mutually warrant and represent that, with
respect to the Serviced Loans, the Servicing Agreement is in full force and
effect as of the date hereof and, except as provided in the First Amendment, a
copy of which is included in Exhibit Two, has not been amended or modified in
any way with respect to the Serviced Loans and no notice of termination has
been given thereunder.
Assignment and Assumption
-------------------------
2. The Original Owner hereby assigns to the Subsequent Purchaser all of
its right, title and interest in and to the Servicing Agreement as the
"Purchaser" thereunder to the extent of the Serviced Loans, and the Subsequent
Purchaser hereby assumes, solely as trustee of HarborView Mortgage Loan Trust
2000-2 and not in its individual capacity, all of the Original Owner's right,
title and interest in and to (including, without limitation, the Original
Owner's obligations under) the Servicing Agreement as the "Purchaser"
thereunder to the extent of the Serviced Loans from and after the date hereof,
and the Original Owner shall be relieved and released of all of its
obligations under the Servicing Agreement to the extent of the Serviced Loans
from and after the date hereof.
Recognition of the Subsequent Purchaser
---------------------------------------
3. From and after the date hereof, WMBFA shall recognize the Subsequent
Purchaser as the owner of the Serviced Loans and will service the Serviced
Loans for the Subsequent Purchaser as if the Subsequent Purchaser and WMBFA
had entered into a separate servicing agreement for the servicing of the
Serviced Loans in the form of the Servicing Agreement with the Subsequent
Purchaser as the "Purchaser" thereunder, the terms of which Servicing
Agreement are incorporated herein by reference. It is the intention of the
Original Owner, WMBFA and the Subsequent Purchaser that this Agreement will be
a separate and distinct servicing agreement with respect to the Serviced
Loans, and the entire agreement between WMBFA and the Subsequent Owner to the
extent of the Serviced Loans and shall be binding upon and for the benefit of
their respective successors and assigns.
4. The parties hereto hereby agree that, from and after the date hereof,
the definition of "Determination Date" in the Servicing Agreement, as it
relates to the Serviced Loans, shall be amended to read as follows:
"With respect to each Distribution Date, the fifth day
prior to such Distribution Date, or if such day is not
a Business Day, the Business Day immediately following
such day."
5. WMBFA agrees that, from and after the date hereof, all amounts
required to be remitted or distributed by WMBFA to the Subsequent Purchaser as
"Purchaser" under the Servicing Agreement shall be remitted pursuant to the
account held at Bankers Trust Company of California, N.A., entitled
"Distribution Account, Bankers Trust Company of California, N.A., as Trustee,
in trust for the registered Certificateholders of HarborView Mortgage Loan
Trust 2000-2, Mortgage Loan Pass-Through Certificates, Series 2000-2", and
bearing the account number 31072.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Assignment,
Assumption and Recognition Agreement by their duly authorized officers as of
the day and year first above written.
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
(Original Owner)
By:_______________________________________
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as trustee of HarborView Mortgage Loan Trust 2000-2
(Subsequent Owner)
By:_______________________________________
Name:
Title:
WASHINGTON MUTUAL BANK, FA
(WMBFA)
By:_______________________________________
Name:
Title:
<PAGE>
EXHIBIT ONE
List of Serviced Loans
----------------------
<PAGE>
EXHIBIT TWO
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Copies of Servicing Agreement and First Amendment
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
WASHINGTON MUTUAL BANK, FA
WASHINGTON MUTUAL BANK
WASHINGTON MUTUAL BANK fsb
Sellers
WASHINGTON MUTUAL BANK, FA
Servicer
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
Initial Purchaser
Dated as of October 1, 2000
Adjustable Rate Mortgage Loans
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Definitions..................................................1
SECTION 2. Agreement to Purchase ......................................11
SECTION 3. Mortgage Loan Schedules.....................................11
SECTION 4. Purchase Price .............................................11
SECTION 5. Examination of Mortgage Files ..............................12
SECTION 6. Conveyance from Seller to Initial Purchaser ................13
Subsection 6.01. Conveyance of Mortgage Loans;
Possession of Servicing Files ...................13
Subsection 6.02. Books and Records ...............................13
Subsection 6.03. Delivery of Mortgage Loan Documents..............13
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach ......................14
Subsection 7.01. Representations and Warranties Respecting
the Seller ......................................14
Subsection 7.02. Representations and Warranties Regarding
Individual Mortgage Loans .......................16
Subsection 7.03. Remedies for Breach of Representations
and Warranties ..................................22
Subsection 7.04 Repurchase of Certain Mortgage Loans ............24
SECTION 8. Closing ....................................................24
SECTION 9. Closing Documents ..........................................25
SECTION 10. Costs ......................................................27
SECTION 11. Servicer Servicing Obligations .............................27
SECTION 12. Removal of Mortgage Loans from Inclusion under This
Agreement Upon a Whole Loan Transfer or a Pass-Through
Transfer on One or More Reconstitution Dates ...............27
SECTION 13. The Servicer ...............................................30
Subsection 13.01. Additional Indemnification by the Servicer ....30
Subsection 13.02. Merger or Consolidation of the Servicer .......30
Subsection 13.03. Limitation on Liability of the Servicer
and Others ....................................31
Subsection 13.04. Servicer Not to Resign ........................31
Subsection 13.05. No Transfer of Servicing ......................32
SECTION 14. DEFAULT ...................................................32
Subsection 14.01. Events of Default .............................32
Subsection 14.02. Waiver of Defaults ............................33
SECTION 15. Termination ...............................................33
SECTION 16. Successor to the Servicer .................................34
SECTION 17. Financial Statements ......................................35
SECTION 18. Mandatory Delivery: Grant of Security Interest ............35
SECTION 19. Notices ...................................................35
SECTION 20. Severability Clause .......................................37
SECTION 21. Counterparts ..............................................37
SECTION 22. Governing Law .............................................37
SECTION 23. Intention of the Parties ..................................37
SECTION 24. Successors and Assigns ....................................37
SECTION 25. Waivers ...................................................38
SECTION 26. Exhibits ..................................................38
SECTION 27. General Interpretive Principles ...........................38
SECTION 28. Nonsolicitation ...........................................38
SECTION 29. Reproduction of Documents .................................39
SECTION 30. Further Agreements ........................................39
SECTION 31. Conflicting Provisions ....................................39
SECTION 32. Obligations of the Sellers ................................39
<PAGE>
Page
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EXHIBITS
EXHIBIT 1 SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3 SECURITY RELEASE CERTIFICATION
EXHIBIT 4 ASSIGNMENT AND CONVEYANCE
EXHIBIT 5 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 FORM OF CUSTODIAL AGREEMENT
EXHIBIT 7 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 8 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 9 SERVICING ADDENDUM
EXHIBIT 10 FORM OF CONFIRMATION
SCHEDULE I MORTGAGE LOAN SCHEDULE
<PAGE>
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING
AGREEMENT (the "Agreement"), dated as of October 1, 2000, by and between
Greenwich Capital Financial Products, Inc., having an office at 600 Steamboat
Road, Greenwich, Connecticut 06830 (the "Initial Purchaser", and the Initial
Purchaser or the Person, if any, to which the Initial Purchaser has assigned
its rights and obligations hereunder as Purchaser with respect to a Mortgage
Loan, and each of their respective successors and assigns, the "Purchaser")
and Washington Mutual Bank, FA, a savings association organized under the laws
of the United States ("WMBFA"), Washington Mutual Bank fsb, a savings bank
organized under the laws of the United States ("WMBfsb"), and Washington
Mutual Bank, a Washington state chartered stock savings bank ("WMB"), as
sellers (each, "Seller" and, collectively, the "Sellers") and WMBFA, as
servicer (the "Servicer").
W I T N E S S E T H :
WHEREAS, each Seller desires to sell, from time to time,
to the Purchaser, and the Purchaser desires to purchase, from time to time,
from such Seller, certain conventional adjustable rate residential first lien
mortgage loans, (the "Mortgage Loans") as described herein on a
servicing-retained basis, and which shall be delivered in groups of whole
loans on various dates as provided herein (each, a "Closing Date");
WHEREAS, each Mortgage Loan 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 for the related Mortgage Loan Package, which is to be annexed
hereto on each Closing Date as Schedule I;
WHEREAS, the Purchaser and the Sellers desire that WMBFA
service the Mortgage Loans in the manner described in this Agreement;
WHEREAS, the Purchaser, the Servicer and the Sellers wish
to prescribe the manner of the conveyance, servicing and control of the
Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans
from the Sellers, the Purchaser desires to sell some or all of the Mortgage
Loans to one or more purchasers as a whole loan transfer in a whole loan or
participation format or a public or private mortgage-backed securities
transaction;
NOW, THEREFORE, in consideration of the premises and
mutual agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Purchaser, the Servicer and the Sellers agree as follows:
SECTION 1. Definitions. For purposes of this Agreement
the following capitalized terms shall have the respective meanings set forth
below.
Adjustment Date: With respect to each Mortgage Loan, the
date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on such Mortgage Loan is adjusted in accordance with the terms of the
related Mortgage Note.
Agreement: This Master Mortgage Loan Purchase and
Servicing Agreement including all exhibits, schedules, amendments and
supplements hereto.
Appraised Value: With respect to any Mortgaged Property,
the lesser of (i) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of FNMA and FHLMC, and
(ii) the purchase price paid for the related Mortgaged Property by the
Mortgagor with the proceeds of the Mortgage Loan, provided, however, in the
case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is
based solely upon the value determined by an appraisal made for the originator
of such Refinanced Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by an appraiser who met the minimum requirements of FNMA and
FHLMC.
Assignment and Conveyance: An assignment and conveyance
of the Mortgage Loans purchased on a Closing Date in the form annexed hereto
as Exhibit 4.
Assignment of Mortgage: An individual 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 give record notice of the sale of the Mortgage to the
Purchaser.
Business Day: Any day other than a Saturday or Sunday, or
a day on which banking and savings and loan institutions in the States of
California, Washington or New York are authorized or obligated by law or
executive order to be closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the
proceeds of which were in excess of the principal balance of any existing
first mortgage on the related Mortgaged Property and related closing costs,
and were used to pay any such existing first mortgage, related closing costs
and subordinate mortgages on the related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser
from time to time shall purchase and one or more Sellers from time to time
shall sell to the Purchaser, the Mortgage Loans listed on the related Mortgage
Loan Schedule with respect to the related Mortgage Loan Package.
Closing Documents: With respect to any Closing Date, the
documents required pursuant to Section 9.
Code: The Internal Revenue Code of 1986, or any successor
statute thereto.
Condemnation Proceeds: All awards, compensation and
settlements in respect of a taking of all or part of a Mortgaged Property by
exercise of the power of condemnation or the right of eminent domain.
Confirmation: With respect to any Mortgage Loan Package
purchased and sold on any Closing Date, the letter agreement between the
Purchaser and one or more Sellers, in the form annexed hereto as Exhibit 10
(including any exhibits, schedules and attachments thereto), setting forth the
terms and conditions of such transaction and describing the Mortgage Loans to
be purchased by the Purchaser on such Closing Date. A Confirmation may relate
to more than one Mortgage Loan Package to be purchased on one or more Closing
Dates hereunder.
Convertible Mortgage Loan: A Mortgage Loan that by its
terms and subject to certain conditions contained in the related Mortgage or
Mortgage Note allows the Mortgagor to convert the adjustable Mortgage Interest
Rate on such Mortgage Loan to a fixed Mortgage Interest Rate.
Custodial Account: The separate account or accounts, each
of which shall be an Eligible Account, created and maintained pursuant to this
Agreement, which shall be entitled Washington Mutual Bank, FA, as servicer, in
trust for the Purchaser and various Mortgagors, Adjustable Rate Mortgage
Loans", established at WMBFA (so long as WMBFA maintains short term debt
ratings and long term deposit ratings in one of the two highest categories by
each of Moody's and S&P) or at another financial institution acceptable to the
Purchaser.
Custodial Agreement: The agreement governing the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents, a form of which agreement is
annexed hereto as Exhibit 6.
Custodian: The custodian under the Custodial Agreement,
or its successor in interest or assigns, or any successor to the Custodian
under the Custodial Agreement, as therein provided.
Cut-off Date: The first day of the month in which the
related Closing Date occurs.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
Determination Date: With respect to each Distribution
Date, the fifteenth (15th) day of the calendar month in which such
Distribution Date occurs or, if such fifteenth (15th) day is not a Business
Day, the Business Day immediately preceding such fifteenth (15th) day.
Distribution Date: The eighteenth (18th) day of each
month, commencing on the eighteenth day of the month next following the month
in which the related Cut-off Date occurs, or if such eighteenth (18th) day is
not a Business Day, the first Business Day immediately following such
eighteenth (18th) day.
Due Date: With respect to each Distribution Date, the
first day of the calendar month in which such Distribution Date occurs, which
is the day on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
Due Period: With respect to each Distribution Date, the
period commencing on the second day of the month preceding the month of the
Distribution Date and ending on the first day of the month of the Distribution
Date.
Eligible Account: Either (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of
a depository institution or trust company that is the principal subsidiary of
a holding company, the short-term unsecured debt obligations of such holding
company) are rated A-1 by S&P or Prime-1 by Moody's (or a comparable rating if
another rating agency is specified by the Initial Purchaser by written notice
to the Seller) at the time any amounts are held on deposit therein, (ii) an
account or accounts the deposits in which are fully insured by the FDIC or
(iii) a trust account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary capacity.
Eligible Accounts may bear interest.
Escrow Account: The separate trust account or accounts
created and maintained pursuant to this Agreement which shall be entitled
Washington Mutual Bank, FA, as servicer, in trust for the Purchaser and
various Mortgagors, Adjustable Rate Mortgage Loans", established at WMBFA (so
long as WMBFA maintains short term debt ratings and long term deposit ratings
which are rated in one of the two highest categories by each of Moody's and
S&P) or at another financial institution acceptable to the Purchaser.
Escrow Payments: The amounts constituting ground rents,
taxes, assessments, water charges, sewer rents, Primary Insurance Policy
premiums, fire and hazard insurance premiums and other payments required to be
escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any
Mortgage Note or Mortgage.
Event of Default: Any one of the events enumerated in
Section 14.01.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation or any
successor thereto.
Final Recovery Determination: With respect to any
defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO
Property repurchased by a Seller pursuant to this Agreement), a determination
made by the Servicer that all Insurance Proceeds, Liquidation Proceeds and
other payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a servicing
officer of the Servicer, of each Final Recovery Determination.
FNMA: Fannie Mae or any successor thereto.
Gross Margin: With respect to any Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
HUD: The United States Department of Housing and Urban
Development or any successor thereto.
Index: With respect to any Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the interest rate thereon.
Initial Closing Date: The Closing Date on which the
Initial Purchaser purchases and one or more Sellers sell the first Mortgage
Loan Package hereunder.
Initial Purchaser: Greenwich Capital Financial Products,
Inc., or any successor.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Liquidation Proceeds: Amounts, other than Insurance
Proceeds and Condemnation Proceeds, received in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received following the acquisition of
REO Property.
Loan-to-Value Ratio or LTV: With respect to any Mortgage
Loan as of any date of determination, the ratio on such date of the
outstanding principal amount of the Mortgage Loan, to the Appraised Value of
the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any
Adjustment Date.
Minimum Mortgage Interest Rate: With respect to each
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any
Adjustment Date.
Monthly Advance: The aggregate of the advances made by
the Servicer on any Distribution Date pursuant to Section 11.21.
Monthly Payment: With respect to any Mortgage Loan, the
scheduled combined payment of principal and interest payable by a Mortgagor
under the related Mortgage Note on each Due Date.
Moody's: Moody's Investors Service, Inc. or its successor
in interest.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on Mortgaged Property securing the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the
Mortgage and the successors and assigns of such mortgagee or beneficiary.
Mortgage File: The items pertaining to a particular
Mortgage Loan referred to in Exhibit 5 annexed hereto, and any additional
documents required to be added to the Mortgage File pursuant to this Agreement
or the related Confirmation.
Mortgage Interest Rate: With respect to each Mortgage
Loan, the annual rate that interest accrues on such Mortgage Loan from time to
time in accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage
loan, sold, assigned and transferred to the Purchaser pursuant to this
Agreement and the related Confirmation and identified on the Mortgage Loan
Schedule annexed to this Agreement on such Closing Date, 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, exclusive
of servicing rights relating thereto.
Mortgage Loan Documents: The documents listed in Section
2 of the Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Package: The Mortgage Loans listed on a
Mortgage Loan Schedule, delivered to the Custodian and the Purchaser at least
three (3) Business Days prior to the related Closing Date (or such other date
specified in the related Confirmation) and attached to this Agreement as
Schedule I on the related Closing Date.
Mortgage Loan Schedule: With respect to each Mortgage
Loan Package, the schedule of Mortgage Loans to be annexed hereto as Schedule
I (or a supplement thereto) on each Closing Date for the Mortgage Loan Package
delivered on such Closing Date in both hard copy and floppy disk, such
schedule setting forth the following information with respect to each Mortgage
Loan in the Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2) the Mortgagor's first and last name; (3) the street address of the
Mortgaged Property including the state and zip code; (4) a code indicating
whether the Mortgaged Property is owner-occupied; (5) the type of Residential
Dwelling constituting the Mortgaged Property; (6) the original months to
maturity; (7) the original date of the Mortgage Loan and the remaining months
to maturity from the Cut-off Date, based on the original amortization
schedule; (8) the Loan-to-Value Ratio at origination; (9) the Mortgage
Interest Rate in effect immediately following the Cut-off Date; (10) the date
on which the first Monthly Payment was due on the Mortgage Loan; (11) the
stated maturity date; (12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date; (14) the last
Due Date on which a Monthly Payment was actually applied to the unpaid Stated
Principal Balance; (15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date; (17) the first Adjustment Date; (18) the Gross
Margin; (19) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing); (20) the Maximum
Mortgage Interest Rate under the terms of the Mortgage Note; (21) the Minimum
Mortgage Interest Rate under the terms of the Mortgage Note; (22) the Mortgage
Interest Rate at origination; (23) the Periodic Rate Cap; (24) the first
Adjustment Date immediately following the Cut-off Date; (25) the Index; (26)
the date on which the first Monthly Payment was due on the Mortgage Loan and,
if such date is not consistent with the Due Date currently in effect, such Due
Date; (27) a code indicating the documentation style (i.e., full, alternative
or reduced); (28) a code indicating if the Mortgage Loan is subject to a
Primary Insurance Policy; (29) the Appraised Value of the Mortgaged Property;
and (30) the sale price of the Mortgaged Property, if applicable. With respect
to the Mortgage Loan Package in the aggregate, the Mortgage Loan Schedule
shall set forth the following information, as of the related Cut-off Date: (1)
the number of Mortgage Loans; (2) the current principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date to reflect the
addition of the Mortgage Loan Schedule with respect to the related Mortgage
Loan Package.
Mortgage Note: The original executed note or other
evidence of the Mortgage Loan indebtedness of a Mortgagor.
Mortgaged Property: The Mortgagor's real property
securing repayment of a related Mortgage Note, consisting of a fee simple
interest in a single parcel of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note, the owner of
the Mortgaged Property and the grantor or mortgagor named in the related
Mortgage and such grantor's or mortgagor's successor's in title to the
Mortgaged Property.
Net Mortgage Rate: With respect to any Mortgage Loan (or
the related REO Property), as of any date of determination, a per annum rate
of interest equal to the then applicable Mortgage Interest Rate for such
Mortgage Loan minus the Servicing Fee Rate.
Nonrecoverable Advance: Any Monthly Advance or Servicing
Advance previously made or proposed to be made in respect of a Mortgage Loan
or REO Property that, in the good faith business judgment of the Servicer,
will not, or, in the case of a proposed Monthly Advance or Servicing Advance,
would not be, ultimately recoverable from related late payments, Insurance
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.
Officer's Certificate: A certificate signed by the
Chairman of the Board or the Vice Chairman of the Board or a President or a
Vice President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Person on behalf of whom such
certificate is being delivered.
Opinion of Counsel: A written opinion of counsel, who may
be salaried counsel for the Person on behalf of whom the opinion is being
given, reasonably acceptable to each Person to whom such opinion is addressed.
Pass-Through Transfer: The sale or transfer of some or
all of the Mortgage Loans by the Purchaser to a trust to be formed as part of
a publicly issued or privately placed mortgage-backed securities transaction.
Periodic Rate Cap: With respect to each Mortgage Loan and
any Adjustment Date therefor, a number of percentage points per annum that is
set forth in the related Mortgage Loan Schedule and in the related Mortgage
Note, which is the maximum amount by which the Mortgage Interest Rate for such
Mortgage Loan may increase (without regard to the Maximum Mortgage Interest
Rate) or decrease (without regard to the Minimum Mortgage Interest Rate) on
such Adjustment Date from the Mortgage Interest Rate in effect immediately
prior to such Adjustment Date.
Person: An individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Preliminary Servicing Period: With respect to any
Mortgage Loans, the period commencing on the related Closing Date and ending
on the date the Servicer enters into Reconstitution Agreements which amend or
restate the servicing provisions of this Agreement.
Primary Insurance Policy: A policy of primary mortgage
guaranty insurance issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date, including any prepayment penalty or premium thereon, which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price: The price paid on the related Closing
Date by the Purchaser to a Seller pursuant to the related Confirmation in
exchange for the Mortgage Loans purchased on such Closing Date as calculated
as provided in Section 4.
Qualified Insurer: Any insurer which meets the
requirements of FNMA and FHLMC.
Qualified Substitute Mortgage Loan: A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this
Agreement which must, on the date of such substitution, (i) have an
outstanding principal balance, after application of all scheduled payments of
principal and interest due during or prior to the month of substitution, not
in excess of the Stated Principal Balance of the Deleted Mortgage Loan as of
the Due Date in the calendar month during which the substitution occurs, (ii)
have a Mortgage Interest Rate not less than (and not more than one percentage
point in excess of) the Mortgage Interest Rate of the Deleted Mortgage Loan,
(iii) have a Net Mortgage Rate equal to the Net Mortgage Rate of the Deleted
Mortgage Loan, (iv) have a remaining terms to maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage Loan, (v) have
the same Due Date as the Due Date on the Deleted Mortgage Loan, (vi) have a
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (vii) be
covered under a Primary Insurance Policy if such Qualified Substitute Mortgage
Loan had a Loan-to-Value Ratio at origination in excess of 80%, (viii) conform
to each representation and warranty set forth in Section 7.02 of this
Agreement and (ix) be the same type of mortgage loan (i.e. with the same Gross
Margin and Index as the Deleted Mortgage Loan). In the event that one or more
mortgage loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Interest Rates described in clause
(ii) hereof shall be determined on the basis of weighted average Mortgage
Interest Rates, the Net Mortgage Rates described in clause (iii) hereof shall
be satisfied as to each such mortgage loan, the terms described in clause (iv)
shall be determined on the basis of weighted average remaining terms to
maturity, the Loan-to-Value Ratios described in clause (vi) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (viii) hereof must be satisfied as to each Qualified Substitute
Mortgage Loan or in the aggregate, as the case may be.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the
proceeds of which are not in excess of the existing first mortgage loan on the
related Mortgaged Property and related closing costs, and were used
exclusively to satisfy the then existing first mortgage loan of the Mortgagor
on the related Mortgaged Property and to pay related closing costs.
Reconstitution Agreements: The agreement or agreements
entered into by one or more Sellers, the Servicer and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or all of the Mortgage Loans serviced hereunder, in connection with a Whole
Loan Transfer or a Pass-Through Transfer as provided in Section 12.
Reconstitution Date: The date or dates on which any or
all of the Mortgage Loans serviced under this Agreement shall be removed from
this Agreement and reconstituted as part of a Whole Loan Transfer or
Pass-Through Transfer pursuant to Section 12 hereof.
Record Date: With respect to each Distribution Date, the
last Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
REMIC: A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax
law relating to REMICs, which appear in Sections 860A through 860G of the
Code, and related provisions, and proposed, temporary and final regulations
and published rulings, notices and announcements promulgated thereunder, as
the foregoing may be in effect from time to time.
REO Account: The separate trust account or accounts
created and maintained pursuant to this Agreement which shall be entitled
"Washington Mutual Bank, FA in trust for the Purchaser, as of [date of
acquisition of title], Adjustable Rate Mortgage Loans".
REO Disposition: The final sale by the Servicer of any
REO Property.
REO Property: A Mortgaged Property acquired as a result
of the liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a
price equal to (i) the Stated Principal Balance of such Mortgage Loan, plus
(ii) interest on such Stated Principal Balance at the Net Mortgage Rate from
and including the last Due Date through which interest has been paid by or on
behalf of the Mortgagor to, but not including, the first day of the month
following the date of repurchase, less amounts received in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account for
distribution in connection with such Mortgage Loan.
Residential Dwelling: Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a FNMA eligible condominium project, or
(iv) a detached one-family dwelling in a planned unit development, none of
which is a co-operative, mobile or manufactured home.
Servicing Addendum: The terms and conditions attached
hereto as Exhibit 9 which will govern the servicing of the Mortgage Loans by
the Servicer during the Preliminary Servicing Period.
Servicing Advances: All customary, reasonable and
necessary "out-of-pocket" costs and expenses incurred by the Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) preservation, restoration and repair of a Mortgaged Property, (ii)
any enforcement or judicial proceedings with respect to a Mortgage Loan,
including foreclosure actions and (iii) the management and liquidation of REO
Property.
Servicing Fee: With respect to each Mortgage Loan, the
amount of the annual servicing fee the Purchaser shall pay to the Servicer,
which shall, for each month, be equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) the unpaid principal balance of the Mortgage Loan.
Such fee shall be payable or, in the case of a delinquent Mortgage Loan or REO
Property, accrue, monthly, computed on the basis of the same principal amount
and period respectively 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 payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds and other
proceeds, to the extent permitted by Section 11.05) of related Monthly Payment
collected by the Servicer, or as otherwise proved under Section 11.05. If the
Preliminary Servicing Period includes any partial month, the Servicing Fee for
such month shall be pro rated at a per diem rate based upon a 30-day month.
Servicing Fee Rate: With respect to each Mortgage Loan,
the per annum rate specified in the related Confirmation at which the
Servicing Fee accrues.
Servicing File: With respect to each Mortgage Loan, the
file retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
S&P: Standard & Poor's Ratings Group or its successor in
interest.
Stated Principal Balance: As to each Mortgage Loan as of
any date of determination, (i) the principal balance of the Mortgage Loan as
of the related Cut-off Date after giving effect to payments of principal due
on or before such date, whether or not collected from the Mortgagor on or
before such date, minus (ii) all amounts previously distributed to the
Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal. As to each Mortgage Loan that is a Qualified
Substitute Mortgage Loan, as of any date of determination, (i) the principal
balance of such Mortgage Loan as of the close of business on the date of
substitution after giving effect to payments of principal due on or before
such date, whether or not collected from the Mortgagor on or before such date,
minus (ii) all amounts previously distributed to the Purchaser with respect to
such Mortgage Loan representing payments or recoveries of principal.
Whole Loan Transfer: Any sale or transfer of some or all
of the Mortgage Loans by the Purchaser to a third party, which sale or
transfer is not a Pass-Through Transfer.
SECTION 2. Agreement to Purchase. Each Seller identified
in the related Confirmation agrees to sell, and the Purchaser agrees to
purchase, from time-to-time, the Mortgage Loans set forth in the related
Confirmation, or such other principal amount of Mortgage Loans as agreed by
the Purchaser and such Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser from such Seller on
the related Closing Date.
SECTION 3. Mortgage Loan Schedules. The applicable
Seller or Sellers shall deliver the Mortgage Loan Schedule for a Mortgage Loan
Package to be purchased on a particular Closing Date to the Purchaser at least
five (5) Business Days prior to the related Closing Date (or such other date
specified in the related Confirmation).
SECTION 4. Purchase Price. The Purchase Price for each
Mortgage Loan listed on the related Mortgage Loan Schedule shall be the
percentage of par as stated in the related Confirmation (subject to adjustment
as provided therein), multiplied by its Stated Principal Balance as of the
related Cut-off Date. If so provided in the related Confirmation, portions of
the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the
Initial Purchaser shall pay to the applicable Seller or Sellers, at closing,
accrued interest on the Stated Principal Balance of each Mortgage Loan as of
the related Cut-off Date at its Net Mortgage Rate from the related Cut-off
Date through the day prior to the related Closing Date, both inclusive.
The Purchaser shall own and be entitled to receive with
respect to each Mortgage Loan purchased, (1) all scheduled principal due after
the related Cut-off Date, (2) all other recoveries of principal collected
after the related Cut-off Date (provided, however, that all scheduled payments
of principal due on or before the related Cut-off Date and collected by the
applicable Seller or the Servicer after the related Cut-off Date shall belong
to such Seller), and (3) all payments of interest on the Mortgage Loans net of
the Servicing Fee (minus that portion of any such interest payment that is
allocable to the period prior to the related Cut-off Date). The Stated
Principal Balance of each Mortgage Loan as of the related Cut-off Date is
determined after application to the reduction of principal of payments of
principal due on or before the related Cut-off Date whether or not collected.
Therefore, for the purposes of this Agreement, payments of scheduled principal
and interest prepaid for a Due Date following the related Cut-off Date shall
not be applied to the principal balance as of the related Cut-off Date. Such
prepaid amounts (minus the applicable Servicing Fee) shall be the property of
the Purchaser. The Servicer shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the
Purchaser, for remittance by the Servicer to the Purchaser on the first
related Distribution Date. All payments of principal and interest, less the
applicable Servicing Fee, due on a Due Date following the related Cut-off Date
shall belong to the Purchaser.
SECTION 5. Examination of Mortgage Files. In addition to
the rights granted to the Initial Purchaser under the related Confirmation to
underwrite the Mortgage Loans and review the Mortgage Files prior to the
Closing Date, prior to the related Closing Date, each Seller shall (a) deliver
to the Custodian in escrow, for examination with respect to each Mortgage Loan
to be purchased on such Closing Date, the related Mortgage File, including the
Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
related Mortgage File available to the Initial Purchaser for examination at
such Seller's offices or such other location as shall otherwise be agreed upon
by the Initial Purchaser and such Seller. Such examination may be made by the
Initial Purchaser or its designee at any reasonable time before or after the
related Closing Date. If the Initial Purchaser makes such examination prior to
the related Closing Date and identifies any Mortgage Loans that do not conform
to the terms of the related Confirmation or the Initial Purchaser's
underwriting standards, such Mortgage Loans may, at the Initial Purchaser's
option, be rejected for purchase by the Initial Purchaser. If not purchased by
the Initial Purchaser, such Mortgage Loans shall be deleted from the related
Mortgage Loan Schedule. The Initial Purchaser may, at its option and without
notice to the applicable Seller or Sellers, purchase all or part of any
Mortgage Loan Package without conducting any partial or complete examination.
The fact that the Initial Purchaser has conducted or has determined not to
conduct any partial or complete examination of the Mortgage Files shall not
affect the Initial Purchaser's (or any of its successors') rights to demand
repurchase or other relief or remedy provided for in this Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession
of Servicing Files.
Each Seller, simultaneously with the payment of the
Purchase Price, shall execute and deliver to the Initial Purchaser an
Assignment and Conveyance with respect to the Mortgage Loans being sold by
such Seller in the related Mortgage Loan Package in the form attached hereto
as Exhibit 4. The Servicing File retained by the Servicer with respect to each
Mortgage Loan pursuant to this Agreement shall be appropriately identified in
the Servicer's computer system to reflect clearly the sale of such related
Mortgage Loan to the Purchaser. The Servicer shall release from its custody
the contents of any Servicing File retained by it only in accordance with this
Agreement, except when such release is required in connection with a
repurchase of any such Mortgage Loan pursuant to Subsection 7.03 or 7.04.
Subsection 6.02. Books and Records.
Record title to each Mortgage and the related Mortgage
Note as of the related Closing Date shall be in the name of the Servicer, the
related Seller, the Purchaser, the Custodian or one or more designees of the
Purchaser, as the Purchaser shall designate. Notwithstanding the foregoing,
beneficial ownership of each Mortgage and the related Mortgage Note shall be
vested solely in the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including,
but not limited to, all funds received by a Seller or the Servicer after the
related Cut-off Date on or in connection with a Mortgage Loan as provided in
Section 4 shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all such funds received on or in connection
with a Mortgage Loan as provided in Section 4 shall be received and held by
the Seller in trust for the benefit of the Purchaser or the assignee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to
the terms of this Agreement.
It is the express intention of the parties that the
transactions contemplated by this Agreement be, and be construed as, a sale of
the Mortgage Loans by the applicable Seller or Sellers and not a pledge of the
Mortgage Loans by such Seller or Sellers to the Purchaser to secure a debt or
other obligation of such Seller or Sellers. Consequently, the sale of each
Mortgage Loan by a Seller shall be reflected as a sale on such Seller's
business records, tax returns and financial statements.
Subsection 6.03. Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement to be executed among
and delivered by the Initial Purchaser, the Custodian and the Servicer prior
to the Initial Closing Date, the Servicer shall, on behalf of the applicable
Seller or Sellers, from time to time in connection with each Closing Date, at
least three (3) Business Days prior to such Closing Date, deliver and release
to the Custodian those Mortgage Loan Documents as required by the Custodial
Agreement with respect to each Mortgage Loan to be purchased and sold on the
related Closing Date and set forth on the related Mortgage Loan Schedule
delivered with such Mortgage Loan Documents.
The Custodian shall certify its receipt of all such
Mortgage Loan Documents required to be delivered pursuant to the Custodial
Agreement for the related Closing Date, as evidenced by the Trust Receipt and
Initial Certification of the Custodian in the form annexed to the Custodial
Agreement. The fees and expenses of the Custodian during such period shall be
paid by the Purchaser.
The Servicer shall forward to the Custodian original
documents evidencing an assumption, modification, consolidation or extension
of any Mortgage Loan entered into in accordance with this Agreement within two
weeks of their execution, provided, however, that , if any such original
document has been submitted for recordation, the Servicer shall provide the
original of such document within two weeks of receipt from the recording
office or, if such original is permanently retained by the recording office,
the Servicer shall deliver to the Custodian a copy of such document certified
by the appropriate public recording office to be a true and complete copy of
the original.
SECTION 7. Representations, Warranties and Covenants of
the Seller: Remedies for Breach.
Subsection 7.01. Representations and Warranties
Respecting the Seller.
Each Seller, severally and not jointly, represents,
warrants and covenants to the Purchaser as of the initial Closing Date and
each subsequent Closing Date or as of such date specifically provided herein
or in the applicable Assignment and Conveyance as to itself and, if
applicable, as to Mortgage Loans sold by it on such date:
(i) WMBFA is a federally chartered savings association,
duly organized, validly existing and in good standing under the laws of the
United States. WMBfsb is a savings bank, duly organized, validly existing and
in good standing under the laws of the United States. WMB is a Washington
state chartered stock savings bank, duly organized, validly existing and in
good standing under the laws of the State of Washington. Each Seller is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan and the servicing of the Mortgage Loan in accordance with
the terms of this Agreement;
(ii) The Seller has the full power and authority to hold
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. The Seller has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this Agreement,
and this Agreement, assuming due authorization, execution and delivery by the
Purchaser, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency, receivership,
conservatorship or reorganization;
(iii) The execution and delivery of this Agreement by the
Seller and the performance of and compliance with the terms of this Agreement
will not violate the Seller's charter or bylaws or constitute a default under
or result in a breach or acceleration of, any material contract, agreement or
other instrument to which the Seller is a party or which may be applicable to
the Seller or its assets;
(iv) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a violation
with respect to, any order or decree of any court or any order or regulation
of any federal, state, municipal or governmental agency having jurisdiction
over the Seller or its assets, which violation could reasonably be expected to
have consequences that would materially and adversely affect the condition
(financial or otherwise) or the operation of the Seller or its assets or could
reasonably be expected to have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(v) The Seller is an approved seller/servicer for FNMA
and FHLMC in good standing and is a HUD approved mortgagee pursuant to Section
203 of the National Housing Act. No event has occurred, including but not
limited to a change in insurance coverage, which would make the Seller unable
to comply with FNMA, FHLMC or HUD eligibility requirements or which would
require notification to FNMA, FHLMC or HUD;
(vi) The Seller does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vii) Immediately prior to the payment of the Purchase
Price for each Mortgage Loan, the Seller was the owner of record of the
related Mortgage and the indebtedness evidenced by the related Mortgage Note
and upon the payment of the Purchase Price by the Purchaser, in the event that
the Seller retains record title, the Seller shall retain such record title to
each Mortgage, each related Mortgage Note and the related Mortgage Files with
respect thereto in trust for the Purchaser as the owner thereof and only for
the purpose of servicing and supervising the servicing of each Mortgage Loan;
(viii) There are no actions or proceedings against, or
investigations of, the Seller before any court, administrative or other
tribunal (A) that prohibit its entering into this Agreement, (B) seeking to
prevent the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that could reasonably be expected to
prohibit or materially and adversely affect the performance by the Seller of
its obligations under, or the validity or enforceability of, this Agreement;
(ix) 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 or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date;
(x) The consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions; and
(xi) The information delivered by the Seller to the
Purchaser with respect to the Seller's loan loss, foreclosure and delinquency
experience for the twelve (12) months immediately preceding the Initial
Closing Date on mortgage loans underwritten to the same standards as the
Mortgage Loans and covering mortgaged properties similar to the Mortgaged
Properties, is true and correct in all material respects.
Subsection 7.02. Representations and Warranties Regarding
Individual Mortgage Loans.
Each Seller, severally and not jointly, hereby represents
and warrants to the Purchaser that, as to each Mortgage Loan sold by it, as of
the related Closing Date for such Mortgage Loan:
(i) The information set forth in the related Mortgage
Loan Schedule is complete, true and correct;
(ii) The Mortgage Loan is in compliance with all
requirements set forth in the related Confirmation, and the characteristics of
the related Mortgage Loan Package as set forth in the related Confirmation are
true and correct;
(iii) All payments required to be made up to the close of
business on the Closing Date for such Mortgage Loan under the terms of the
Mortgage Note have been made; the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other than
the owner of the related Mortgaged Property, directly or indirectly, for the
payment of any amount required by the Mortgage Note or Mortgage; and there has
been no delinquency, exclusive of any period of grace, in any payment by the
Mortgagor thereunder during the last twelve months;
(iv) There are no delinquent taxes, ground rents, water
charges, sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments or other outstanding
charges affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage have
not been impaired, waived, altered or modified in any respect, except by
written instruments, recorded in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage, and which have been
delivered to the Custodian; the substance of any such waiver, alteration or
modification has been approved by the insurer under the Primary Insurance
Policy, if any, and the title insurer, to the extent required by the related
policy, and is reflected on the related Mortgage Loan Schedule. No instrument
of waiver, alteration or modification has been executed, and no Mortgagor has
been released, in whole or in part, except in connection with an assumption
agreement approved by the insurer under the Primary Insurance Policy, if any,
the title insurer, to the extent required by the policy, and which assumption
agreement has been delivered to the Custodian and the terms of which are
reflected in the related Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not subject
to any right of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note and the Mortgage, or the exercise of any right thereunder, render the
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;
(vii) All buildings upon the Mortgaged Property are
insured by an insurer acceptable to FNMA and FHLMC against loss by fire,
hazards of extended coverage and such other hazards as are customary in the
area where the Mortgaged Property is located, pursuant to insurance policies
conforming to the requirements of the Servicing Addendum. All such insurance
policies contain a standard mortgagee clause naming the Seller, its successors
and assigns as mortgagee and all premiums thereon have been paid. If the
Mortgaged Property is in an area identified on a Flood Hazard Map or Flood
Insurance Rate Map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available) a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration is in effect which policy conforms to the
requirements of FNMA and FHLMC. 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 Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(viii) 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,
fair housing or disclosure laws applicable to the origination and servicing of
mortgage loans of a type similar to the Mortgage Loans have been complied
with;
(ix) The Mortgage has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;
(x) The Mortgage is a valid, existing and enforceable
first lien on the Mortgaged Property, including all improvements on the
Mortgaged Property subject only to (a) the lien of current real property taxes
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record
as of the date of recording being acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not adversely
affect the Appraised Value of the Mortgaged Property, and (c) 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, existing and enforceable first lien and first priority security
interest on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as
of the date of origination of the Mortgage Loan, subject to a mortgage, deed
of trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;
(xi) The Mortgage Note and the related Mortgage are
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and the Mortgage
had legal capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage
have been duly and properly executed by such parties. The Mortgagor is a
natural person;
(xiii) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation
for the Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the Mortgagee pursuant to the
Mortgage Note or Mortgage;
(xiv) The Seller is the sole legal, beneficial and
equitable owner of the Mortgage Note and the Mortgage and has 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;
(xv) All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) in
compliance with any and all applicable "doing business" and licensing
requirements of the laws of the state wherein the Mortgaged Property is
located;
(xvi) The Mortgage Loan is covered by an ALTA lender's
title insurance policy (which, has an adjustable rate mortgage endorsement in
the form of ALTA 6.0 or 6.1) acceptable to FNMA and FHLMC, issued by a title
insurer acceptable to FNMA and FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in (x)(a) and (b) 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 and against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of
the Mortgage providing for adjustment in the Mortgage Interest Rate and
Monthly Payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged Property,
and against encroachments by or upon the Mortgaged Property or any interest
therein. The Seller is the sole insured of such lender's title insurance
policy, 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;
(xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation or
event of acceleration;
(xviii) 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 lien) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(xix) All improvements which were considered in
determining the Appraised Value of the related Mortgaged Property lay wholly
within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property;
(xx) The Mortgage Loan was originated by the Seller or by
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 by a mortgagee approved as such by the Secretary of HUD.
(xxi) Principal payments on the Mortgage Loan commenced
no more than sixty days after the proceeds of the Mortgage Loan were
disbursed. The Mortgage Loan bears interest at the Mortgage Interest Rate.
With respect to each Mortgage Loan, the Mortgage Note is payable on the first
day of each month in Monthly Payments, which, are changed on each Adjustment
Date, and are sufficient to fully amortize the original principal balance over
the original term thereof and to pay interest at the related Mortgage Interest
Rate. The Index for each Mortgage Loan is as defined in the related
Confirmation. The Mortgage Note does not permit negative amortization. No
Mortgage Loan is a Convertible Mortgage Loan;
(xxii) The origination and collection practices used by
the Seller with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage origination and
servicing industry. The Mortgage Loan has been serviced by the Seller and any
predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and Escrow Payments, if any, 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. No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under any
Mortgage or the related Mortgage Note and no such escrow deposits or Escrow
Payments are being held by the Seller for any work on a Mortgaged Property
which has not been completed;
(xxiii) The Mortgaged Property is free of damage and
waste and there is no proceeding pending for the total or partial condemnation
thereof;
(xxiv) The Mortgage and related Mortgage Note contain
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, (a) in
the case of a Mortgage designated as a deed of trust, by trustee's sale, and
(b) otherwise by judicial foreclosure. The Mortgaged Property has not been
subject to any bankruptcy proceeding or foreclosure proceeding and the
Mortgagor has not filed for protection under applicable bankruptcy laws. 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. 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;
(xxv) The Mortgage Loan was underwritten in accordance
with the underwriting standards of the Seller in effect at the time the
Mortgage Loan was originated which underwriting standards satisfy the
standards of FNMA and FHLMC; and the Mortgage Note and Mortgage are on forms
acceptable to FNMA and FHLMC;
(xxvi) The Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage on the
Mortgaged Property and the security interest of any applicable security
agreement or chattel mortgage referred to in (x) above;
(xxvii) The Mortgage File contains an appraisal of the
related Mortgaged Property which satisfied the standards of FNMA and FHLMC and
was made and signed, prior to the approval of the Mortgage Loan application,
by a qualified 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, whose compensation is not affected by the approval or
disapproval of the Mortgage Loan and who met the minimum qualifications of
FNMA and FHLMC. Each appraisal of the Mortgage Loan was made in accordance
with the relevant provisions of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989;
(xxviii) In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the Purchaser to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(xxix) No Mortgage Loan contains provisions pursuant to
which Monthly Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or
(c) contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(xxx) The Mortgagor has executed a statement to the
effect that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of adjustable rate mortgage loans
and rescission materials with respect to Refinanced Mortgage Loans, and such
statement is and will remain in the Mortgage File;
(xxxi) No Mortgage Loan was made in connection with (a)
the construction or rehabilitation of a Mortgaged Property or (b) facilitating
the trade-in or exchange of a Mortgaged Property;
(xxxii) The Seller has no knowledge of any circumstances
or condition existing as of the related Closing Date with respect to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that can reasonably be expected to cause the Mortgage Loan to be an
unacceptable investment or adversely affect the value of the Mortgage Loan;
(xxxiii) Each Mortgage Loan with an LTV at origination in
excess of 80% is and will be subject to a Primary Mortgage Insurance Policy,
issued by a Qualified Insurer, which insures that portion of the Mortgage Loan
in excess of the portion of the Appraised Value of the Mortgaged Property
required by FNMA. All provisions of such Primary 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. Any Mortgage subject to any such
Primary Insurance Policy obligates the Mortgagor thereunder to maintain such
insurance and to pay all premiums and charges in connection therewith. The
Mortgage Interest Rate for the Mortgage Loan does not include any such
insurance premium;
(xxxiv) The Mortgaged Property is lawfully occupied under
applicable law; 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, have been made or obtained from the appropriate
authorities;
(xxxv) No error, omission, misrepresentation, negligence,
fraud or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any person, including without limitation the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
(xxxvi) The Assignment of Mortgage is in blank and in
recordable form (except for insertion of applicable recording information) and
is acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(xxxvii) Any principal advances made to the Mortgagor
prior to the Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to FNMA and FHLMC. The consolidated principal
amount does not exceed the original principal amount of the Mortgage Loan;
(xxxviii) No Mortgage Loan has a balloon payment feature;
(xxxix) If the Residential Dwelling on the Mortgaged
Property is a condominium unit or a unit in a planned unit development (other
than a de minimis planned unit development) such condominium or planned unit
development project meets the eligibility requirements of FNMA and FHLMC;
(x1) No Mortgage Loan which is a Cash-out Refinancing was
originated in the State of Texas;
(x1i) The source of the down payment with respect to each
Mortgage Loan has been fully verified by the Seller;
(x1ii) The Mortgage Note, the Mortgage, the Assignment of
Mortgage and any other documents required to be delivered with respect to each
Mortgage Loan pursuant to the Custodial Agreement, have been delivered to the
Custodian all in compliance with the specific requirements of the Custodial
Agreement. With respect to each Mortgage Loan, the Seller is in possession of
a complete Mortgage File in compliance with Exhibit 5, except for such
documents as have been delivered to the Custodian;
(x1iii) Interest on each Mortgage Loan is calculated on
the basis of a 360-day year consisting of twelve 30-day months; and
(x1iv) The Mortgaged Property is in material compliance
with all applicable environmental laws pertaining to environmental hazards
including, without limitation, asbestos, and neither the Seller nor, to the
Seller's knowledge, the related Mortgagor, has received any notice of any
violation or potential violation of such law.
Subsection 7.03. Remedies for Breach of Representations
and Warranties.
It is understood and agreed that the representations and
warranties set forth in Subsections 7.01 and 7.02 shall survive the sale of
the Mortgage Loans to the Purchaser and shall inure to the benefit of the
Purchaser, notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment of Mortgage or the examination or lack of
examination of any Mortgage File. Upon discovery by either a Seller (the
"Breaching Seller") or the Purchaser of a breach of any of the foregoing
representations and warranties made by the Breaching Seller which materially
and adversely affects the value of the Mortgage Loans sold by the Breaching
Seller or the interest of the Purchaser (or which materially and adversely
affects the interests of the Purchaser in the related Mortgage Loan in the
case of a representation and warranty relating to a particular Mortgage Loan
sold by the Breaching Seller), the party discovering such breach shall give
prompt written notice to the other.
Within 60 days of the earlier of either discovery by or
notice to the Breaching Seller of any breach of a representation or warranty
which materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans sold by the Breaching Seller, the Breaching Seller shall use
its best efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured, the Breaching Seller shall, at the Purchaser's
option, repurchase such Mortgage Loan at the Repurchase Price. In the event
that a breach shall involve any representation or warranty set forth in
Subsection 7.01 and such breach cannot be cured within 60 days of the earlier
of either discovery by or notice to the Breaching Seller of such breach, all
of the Mortgage Loans shall, at the Purchaser's option, be repurchased by the
Breaching Seller at the Repurchase Price. The Breaching Seller shall, at the
request of the Purchaser and assuming that Breaching Seller has a Qualified
Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided
above, remove such Mortgage Loan and substitute in its place a Qualified
Substitute Mortgage Loan or Loans; provided that such substitution shall be
effected not later than 120 days after the related Closing Date. If the
Breaching Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage Loan(s)
pursuant to the foregoing provisions of this Subsection 7.03 shall occur on a
date designated by the Purchaser and shall be accomplished by deposit in the
Custodial Account of the amount of the Repurchase Price for distribution to
the Purchaser on the next scheduled Distribution Date.
At the time of repurchase of any deficient Mortgage Loan,
the Purchaser and the Breaching Seller shall arrange for the reassignment of
the repurchased Mortgage Loan to the Breaching Seller and the delivery to the
Breaching Seller of any documents held by the Custodian relating to the
repurchased Mortgage Loan. In the event the Repurchase Price is deposited in
the Custodial Account, the Breaching Seller shall, simultaneously with such
deposit, give written notice to the Purchaser that such deposit has taken
place. Upon such repurchase the related Mortgage Loan Schedule shall be
amended to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
As to any Deleted Mortgage Loan for which Breaching Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the Breaching
Seller shall effect such substitution by delivering to the Purchaser for such
Qualified Substitute Mortgage Loan or Loans the Mortgage Note, the Assignment
of Mortgage and such other documents and agreements as are required by, and
within the time period specified in, the Custodial Agreement, with the
Mortgage Note endorsed as required therein. The Breaching Seller shall deposit
in the Custodial Account the Monthly Payment less the Servicing Fee due on
such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution will be retained by the
Breaching Seller. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan
in the month of substitution, and the Breaching Seller shall thereafter be
entitled to retain all amounts subsequently received by the Breaching Seller
in respect of such Deleted Mortgage Loan. The Breaching Seller shall give
written notice to the Purchaser that such substitution has taken place and
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Breaching Seller shall be deemed to have
made with respect to such Qualified Substitute Mortgage Loan or Loans, as of
the date of substitution, the covenants, representations and warranties set
forth in Sections 7.01 and 7.02.
For any month in which the Breaching Seller substitutes one
or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Breaching Seller will determine the amount (if any) by which the
aggregate principal balance of all such Qualified Substitute Mortgage Loans as
of the date of substitution is less than the aggregate Stated Principal
Balance of all such Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). An amount equal to the
product of the amount of such shortfall multiplied by the Repurchase Price
shall be distributed by the Servicer in the month of substitution pursuant to
the Servicing Addendum. Accordingly, on the date of such substitution, the
Breaching Seller will deposit from its own funds into the Custodial Account an
amount equal to such amount.
In addition to such cure, repurchase and substitution
obligation, the Breaching Seller shall indemnify the Purchaser and hold it
harmless against (i) any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any third party claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Breaching Seller's representations and warranties contained in this Section 7
and (ii) reasonable legal fees and expenses incurred by the Purchaser as a
result of the Breaching Seller's failure to perform its obligations under this
Agreement. It is understood and agreed that the obligations of the Breaching
Seller set forth in this Subsection 7.03 to cure or repurchase a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Subsection
7.03 constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
Any cause of action against the Breaching Seller relating to
or arising out of the breach of any representations and warranties made in
Subsections 7.01 or 7.02 shall accrue as to any Mortgage Loan upon (i)
discovery of such breach by the Purchaser or notice thereof by the Breaching
Seller to the Purchaser, (ii) failure by the Breaching Seller to cure such
breach, repurchase such Mortgage Loan or substitute a Qualified Substitute
Mortgage Loan as specified above, and (iii) demand upon the Breaching Seller
by the Purchaser for compliance with the relevant provisions of this
Agreement.
Subsection 7.04 Repurchase of Certain Mortgage Loans.
In the event that the first Monthly Payment on a Mortgage
Loan due after the related Closing Date is not paid by the last day of the
month in which such Monthly Payment is due, the applicable Seller shall
repurchase such Mortgage Loan at a price equal to (i) the product of the
Stated Principal Balance of such Mortgage Loan times the Purchase Price
percentage as stated in the related Confirmation, plus (ii) interest on such
Stated Principal Balance at the Net Mortgage Rate from and including the last
Due Date through which interest has been paid by or on behalf of the Mortgagor
through the last day of the month prior to the month in which such Mortgage
Loan is repurchased. The foregoing price shall be paid as provided for in
Subsection 7.03.
SECTION 8. Closing. The closing for each Mortgage Loan
Package shall take place on the related Closing Date. At the Purchaser's
option, 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 each
Closing Date shall be subject to each of the following conditions:
(a) all of the representations and warranties of the
Sellers under this Agreement shall be true and
correct as of the related Closing Date and no event
shall have occurred which, with notice or the
passage of time, would constitute a default under
this Agreement;
(b) the Initial Purchaser shall have received, or the
Initial Purchaser's attorneys shall have received
in escrow, all Closing Documents as specified in
Section 9, 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;
(c) each Seller selling Mortgage Loans on such Closing
Date shall have delivered and released to the
Custodian all documents required pursuant to the
Custodial Agreement; and
(d) all other terms and conditions of this Agreement
shall have been complied with.
Subject to the foregoing conditions, the Initial Purchaser
shall pay to the applicable Seller or Sellers on the related Closing Date the
Purchase Price for the Mortgage Loans purchased from such Seller or Sellers,
plus accrued interest pursuant to Section 4, by wire transfer of immediately
available funds to the account designated by such Seller or Sellers.
SECTION 9. Closing Documents.
(a) On or before the Initial Closing Date, the Sellers and
the Servicer shall submit to the Initial Purchaser fully executed originals of
the following documents:
1. this Agreement, in four counterparts;
2. the Custodial Agreement, in six counterparts, in the
form attached as Exhibit 6 hereto;
3. a Custodial Account Letter Agreement in the form
attached as Exhibit 7 hereto;
4. an Escrow Account Letter Agreement in the form
attached as Exhibit 8 hereto;
5. an Officer's Certificate, in the form of Exhibit 1
hereto, including all attachments thereto;
6. an Opinion of Counsel to the Seller, in the form of
Exhibit 2 hereto;
7. each Seller's underwriting guidelines; and
8. If a Seller chooses to use facsimile signatures to
endorse Mortgage Notes, the Seller must provide a
copy of, and must retain in its corporate records
the following specific documentation authorizing
the use of facsimile signatures: (i) a resolution
from its board of directors authorizing specific
officers to use facsimile signatures; stating that
facsimile signatures will be a valid and binding
act on Seller's part; and authorizing Seller's
corporate secretary to certify the validity of the
resolution, the names of the officers authorized to
execute documents by using facsimile signatures,
and the authenticity of specimen forms of facsimile
signatures; (ii) the corporate secretary's
certification of the authenticity and validity of
the board of directors' resolution; and (iii) a
notarized "certification of facsimile signature,"
which includes both the facsimile and the original
signatures of the signing officer(s) and each
officer's certification that the facsimile is a
true and correct copy of his or her original
signature.
(b) The Closing Documents for the Mortgage Loans to be
purchased on each Closing Date shall consist of fully executed originals of
the following documents:
1. the related Confirmation;
2. the related Mortgage Loan Schedule, one copy to be
attached hereto and one copy to be attached to the
Custodian's counterpart of the Custodial Agreement,
as the Mortgage Loan Schedule thereto;
3. a Custodian's Trust Receipt and Initial
Certification, as required under the Custodial
Agreement, in a form acceptable to the Initial
Purchaser;
4. an Officer's Certificate, in the form of Exhibit 1
hereto, including all attachments thereto;
5. if requested by the Initial Purchaser, an Opinion
of Counsel to the Seller, in the form of Exhibit 2
hereto; provided that no more than one opinion of
counsel shall be required in any six month period
unless the Purchaser has determined that a material
adverse change may have occurred with respect to
any Seller;
6. if requested by the Initial Purchaser, an Opinion
of Counsel to the Custodian, in a form acceptable to
the Initial Purchaser;
7. a Security Release Certification, in the form of
Exhibit 3 hereto executed by any Person, as
requested by the Initial Purchaser, if any of the
Mortgage Loans has at any time been subject to any
security interest, pledge or hypothecation for the
benefit of such Person;
8. a certificate or other evidence of merger or change
of name, signed or stamped by the applicable
regulatory authority, if any of the Mortgage Loans
were acquired by a Seller by merger or acquired or
originated by a Seller while conducting business
under a name other than its present name, if
applicable; and
9. an Assignment and Conveyance in the form of Exhibit
4 hereto.
SECTION 10. Costs. The Purchaser shall pay any commissions
due its salesmen and the legal fees and expenses of its attorneys. All costs
and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans, including recording fees, fees for title policy endorsements
and continuations and fees for recording Assignments of Mortgage and the
Sellers' attorney's fees, shall be paid by the Sellers. The Purchaser shall be
responsible for the fees of the Custodian.
SECTION 11. Servicer Servicing Obligations. The Servicer, as
independent contract servicer, shall service and administer the Mortgage Loans
during the Preliminary Servicing Period in accordance with the terms and
provisions set forth in the Servicing Addendum attached as Exhibit 9, which
Servicing Addendum is incorporated herein by reference.
SECTION 12. Removal of Mortgage Loans from Inclusion under
This Agreement Upon a Whole Loan Transfer or a
Pass-Through Transfer on One or More Reconstitution
Dates.
The Sellers, the Servicer and the Initial Purchaser agree
that with respect to some or all of the Mortgage Loans, the Initial Purchaser
may effect either:
(1) one or more Whole Loan Transfers; and/or
(2) one or more Pass-Through Transfers;
provided, however, that unless otherwise agreed in writing, the Servicer shall
not be required to recognize the sale or assignment by the Initial Purchaser
of any Mortgage Loans included in a Mortgage Loan Package if following such
sale or assignment there would be more than three (3) Purchasers with respect
to the Mortgage Loans in such Mortgage Loan Package.
With respect to each Whole Loan Transfer or Pass-Through
Transfer, as the case may be, entered into by the Initial Purchaser, the
Seller and the Servicer agree:
(1) to cooperate fully with the Initial Purchaser and
any prospective purchaser with respect to all
reasonable requests and due diligence procedures
and with respect to the preparation (including, but
not limited to, the endorsement, delivery,
assignment, and execution) of the Mortgage Loan
Documents and other related documents, and with
respect to servicing requirements reasonably
requested by the rating agencies and credit
enhancers;
(2) to execute all Reconstitution Agreements provided
that each of the Sellers, the Servicer and the
Initial Purchaser is given an opportunity to review
and reasonably negotiate in good faith the content
of such documents not specifically referenced or
provided for herein;
(3) with respect to any Whole Loan Transfer or
Pass-Through Transfer, each applicable Seller shall
make the representations and warranties in
Subsection 7.01 regarding itself and, if such Whole
Loan Transfer or Pass-Through Transfer occurs
within 6 months of the related Closing Date or such
later period as specified in the related
Confirmation, in Subsection 7.02 regarding the
Mortgage Loans originally sold by such Seller to
the Initial Purchaser pursuant to this Agreement as
of the date of the Whole Loan Transfer or
Pass-Through Transfer, modified to the extent
necessary to accurately reflect the pool statistics
of the Mortgage Loans as of the date of such Whole
Loan Transfer or Pass-Through Transfer and any
events or circumstances existing or arising
subsequent to the related Closing Date(s);
(4) to deliver to the Initial Purchaser for inclusion
in any prospectus or other offering material such
publicly available information regarding each of
the applicable Seller or Sellers and the Servicer,
its financial condition and its mortgage loan
delinquency, foreclosure and loss experience and
any additional publicly available information
requested by the Initial Purchaser, and to
indemnify the Initial Purchaser and its affiliates
for material misstatements contained in such
information;
(5) to deliver to the Initial Purchaser and to any
Person designated by the Initial Purchaser, at the
Initial Purchaser's expense, such statements and
audit letters of reputable, certified public
accountants pertaining to information provided by a
Seller or the Servicer pursuant to clause 4 above
as shall be reasonably requested by the Initial
Purchaser;
(6) to deliver to the Initial Purchaser, and to any
Person designated by the Initial Purchaser, such
legal documents and in-house Opinions of Counsel as
are customarily delivered by originators or
servicers, as the case may be, and reasonably
determined by the Initial Purchaser to be necessary
in connection with Whole Loan Transfers or
Pass-Through Transfers, as the case may be, such
in-house Opinions of Counsel for a Pass-Through
Transfer to be in the form reasonably acceptable to
the Initial Purchaser, it being understood that the
cost of any opinions of outside special counsel
that may be required for a Whole Loan Transfer or
Pass-Through Transfer, as the case may be, shall be
the responsibility of the Initial Purchaser;
(7) to negotiate and execute one or more subservicing
agreements between the Servicer and any master
servicer which is generally considered to be a
prudent master servicer in the secondary mortgage
market, designated by the Initial Purchaser in its
sole discretion after consultation with the
Servicer and/or one or more custodial and servicing
agreements among the Initial Purchaser, the
Servicer and a third party custodian/trustee which
is generally considered to be a prudent
custodian/trustee in the secondary mortgage market
designated by the Initial Purchaser in its sole
discretion after consultation with the Servicer, in
either case for the purpose of pooling the Mortgage
Loans with other Mortgage Loans for resale or
securitization; provided, however, that the
Servicer shall be under no obligation to execute
any subservicing agreement or custodial and
servicing agreement unless the obligations and
duties of the Servicer thereunder are not
materially different from the obligations and
duties of the Servicer during the Preliminary
Servicing Period;
(8) in connection with any securitization of any
Mortgage Loans, to execute a pooling and servicing
agreement, which pooling and servicing agreement
may, at the Initial Purchaser's direction, contain
contractual provisions including, but not limited
to, a 24-day certificate payment delay (54-day
total payment delay), servicer advances of
delinquent scheduled payments of principal and
interest through liquidation (unless deemed
non-recoverable) and prepayment interest shortfalls
(to the extent of the monthly servicing fee payable
thereto), servicing and mortgage loan
representations and warranties which in form and
substance conform to the representations and
warranties in this Agreement and to secondary
market standards for securities backed by mortgage
loans similar to the Mortgage Loans and such
provisions with regard to servicing
responsibilities, investor reporting, segregation
and deposit of principal and interest payments,
custody of the Mortgage Loans, and other covenants
as are required by the Initial Purchaser and one or
more nationally recognized rating agencies for
"AAA" rated mortgage pass-through transactions
which are "mortgage related securities" for the
purposes of the Secondary Mortgage Market
Enhancement Act of 1984, unless otherwise mutually
agreed; provided, however, none of the Sellers nor
the Servicer shall be under any obligation to
execute any pooling and servicing agreement which
(x) requires the Servicer to make remittances other
than monthly as provided herein or (ii) imposes any
obligations and duties on such Seller or the
Servicer that are materially different from the
obligations and duties of the Sellers and, during
the Preliminary Servicing Period, the Servicer
under this Agreement. At the option of the Initial
Purchaser, the facilities of the Depository Trust
Company ("DTC") may be used in connection with any
class of security issued pursuant to any pooling
agreement, subject only to the consent of the DTC.
If the Initial Purchaser deems it advisable at any
time to pool the Mortgage Loans with other mortgage
loans for the purpose of resale or securitization,
the Servicer agrees to execute one or more
subservicing agreements between itself (as
servicer) and a master servicer designated by the
Initial Purchaser at its sole discretion, and/or
one or more servicing agreements among the
Servicer, the Initial Purchaser and a trustee
designated by the Initial Purchaser at its sole
discretion, such agreements in each case
incorporating terms and provisions substantially
identical to those described in the immediately
preceding paragraph; provided, however, that the
Servicer shall be under no obligation to execute
any subservicing agreement or servicing agreement
unless the obligations and duties of the Servicer
thereunder are not materially different from the
obligations and duties of the Servicer during the
Preliminary Servicing Period.
All Mortgage Loans not sold or transferred pursuant to a
Whole Loan Transfer or Pass-Through Transfer shall be subject to this
Agreement and shall continue to be serviced for the remainder of the
Preliminary Servicing Period in accordance with the terms of this Agreement
and with respect thereto this Agreement shall remain in full force and effect.
SECTION 13. The Servicer.
Subsection 13.01. Additional Indemnification by the Servicer.
The Servicer shall indemnify the Purchaser and hold the
Purchaser 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 Purchaser may
sustain in any way related to the failure of the Servicer to service the
Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 12.
Subsection 13.02. Merger or Consolidation of the Servicer.
The Servicer shall keep in full force and effect its
existence, rights and franchises as a savings association organized under the
laws of the United States except as permitted herein, and shall 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 enable the Servicer to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be the successor of the Servicer
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 whose deposits are insured by FDIC or a company whose
business is the origination and servicing of mortgage loans, shall be a FNMA
or FHLMC approved seller/servicer and shall satisfy any requirements of
Section 16 with respect to the qualifications of a successor to the Servicer.
Subsection 13.03. Limitation on Liability of the Servicer
and Others.
Neither the Servicer nor any of the officers, employees or
agents of the Servicer shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in good faith in
connection with the servicing of the Mortgage Loans pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer 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 any
breach of the terms and conditions of this Agreement. The Servicer and any
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duty to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may result in its incurring any expenses or
liability; provided, however, that the Servicer 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 legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities for which the
Purchaser shall be liable, the Servicer shall be entitled to reimbursement
therefor from the Purchaser upon written demand except when such expenses,
costs and liabilities are subject to a Seller's indemnification under
Subsection 7.03 or the Servicer's indemnification under Subsection 13.01.
Subsection 13.04. Servicer Not to Resign.
The Servicer shall not (except in connection with a merger
or consolidation permitted pursuant to Section 13.02) assign this Agreement or
resign from the obligations and duties hereby imposed on it except by mutual
consent of the Servicer and the Purchaser or upon the determination that its
servicing duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer in which event the Servicer
may resign as servicer. Any such determination permitting the resignation of
the Servicer as servicer 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 and which shall be provided at the
cost of the Servicer. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder in the manner provided in Section 16.
Subsection 13.05. No Transfer of Servicing.
The Servicer acknowledges that the Purchaser has acted in
reliance upon the Servicer'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 Servicer shall not (except in
connection with a merger or consolidation permitted pursuant to Section 13.02)
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, which consent will not be unreasonably withheld.
SECTION 14. DEFAULT.
Subsection 14.01. Events of Default.
In case one or more of the following Events of Default by
the Servicer shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the
Purchaser any payment required to be made under the terms of this Agreement
which continues unremedied for a period of one Business Day after the date
upon which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Purchaser; or
(ii) failure on the part of the Servicer duly to
observe or perform in any material respect any other of the covenants or
agreements on the part of the Servicer set forth in this Agreement or in the
Custodial 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 Servicer by the
Purchaser or by the Custodian; 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
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of sixty days; or
(iv) the Servicer shall consent to the appointment
of a conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property; or
(v) the Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or
(vi) failure by the Servicer to be in compliance
with the "doing business" or licensing laws of any jurisdiction where a
Mortgaged Property is located; or
(vii) the Servicer ceases to meet the
qualifications of either a FNMA or FHLMC seller/servicer; or
(viii) the Servicer attempts, without the consent
of the Purchaser, to sell or otherwise dispose of all or substantially all of
its property or assets or, except in connection with a merger or consolidation
permitted pursuant to Section 13.02, to assign this Agreement or the servicing
responsibilities hereunder or, except as provided in any Reconstitution
Agreement, to delegate its duties hereunder or any portion thereof;
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 Servicer
may, in addition to whatever rights the Purchaser may have at law or equity to
damages, including injunctive relief and specific performance, terminate all
the rights and obligations of the Servicer as servicer under this Agreement.
On or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer to service the Mortgage Loans under this Agreement
shall on the date set forth in such notice pass to and be vested in the
successor appointed pursuant to Section 16.
Subsection 14.02. Waiver of Defaults.
The Purchaser may waive any default by the Servicer 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.
SECTION 15. Termination. The respective obligations and
responsibilities of the Servicer, as servicer, shall terminate upon the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the Servicer) or the
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure with respect to the last Mortgage Loan and the remittance of all
funds due hereunder unless terminated with respect to all or a portion of the
Mortgage Loans on an earlier date at the option of the Purchaser pursuant to
Section 14. Upon written request from the Purchaser in connection with any
such termination, the Servicer shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser'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 Servicer's sole expense. The Servicer
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder as
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, REO Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
SECTION 16. Successor to the Servicer. Prior to termination
of Servicer's responsibilities and duties under this Agreement pursuant to
Section 14 or 15, the Purchaser shall (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer as
servicer 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 it and such successor
shall agree. In the event that the Servicer's duties, responsibilities and
liabilities as servicer 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 the Purchaser or such successor. The termination of the
Servicer as servicer pursuant to the aforementioned Sections shall not become
effective until a successor shall be appointed pursuant to this Section 16 and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Subsections 7.01 and 7.02 (in its capacity as a Seller) and
the remedies available to the Purchaser under Subsection 7.03 (with respect to
the Servicer in its capacity as a Seller) or 7.04, it being understood and
agreed that the provisions of such Subsections 7.01, 7.02 and 7.03 and 7.04
shall be applicable to the Servicer notwithstanding any such resignation or
termination of the Servicer, or the termination of this Agreement.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer 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 Servicer, with like effect as if originally named as a
party to this Agreement and the Custodial Agreement provided, however, that
such successor shall not assume, and Servicer shall indemnify such successor
for, any and all liabilities arising out of the Servicer's acts as servicer.
Any termination of the Servicer as servicer pursuant to Section 14 or 15 shall
not affect any claims that the Purchaser may have against the Servicer arising
prior to any such termination or resignation or remedies with respect to such
claims.
The Servicer shall timely deliver to the successor the funds
in the Custodial Account, REO Account and the Escrow Account and the Mortgage
Files and related documents and statements held by it hereunder and the
Servicer shall account for all funds. The Servicer 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 Servicer
as servicer. The successor shall make arrangements as it may deem appropriate
to reimburse the Servicer for amounts the Servicer actually expended as
servicer pursuant to this Agreement which the successor is entitled to retain
hereunder and which would otherwise have been recovered by the Servicer
pursuant to this Agreement but for the appointment of the successor servicer.
The Servicer shall be entitled to the Servicing Fee until such time as it
shall be relieved of its duties hereunder as servicer by a successor servicer;
provided that the servicer shall not be entitled to the Servicing Fee
following termination of the Servicer's rights under this Agreement pursuant
to Subsection 14.01 following an Event of Default.
SECTION 17. Financial Statements. The Servicer understands
that in connection with the Purchaser's marketing of the Mortgage Loans, the
Purchaser shall make available to prospective purchasers the Servicer's
financial statements of Washington Mutual, Inc. for the most recently
completed three fiscal years respecting which such statements are available.
The Servicer also shall make available any comparable interim statements of
Washington Mutual, Inc. to the extent any such statements are publicly
available. The Servicer, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The
Servicer also shall make available information on its servicing performance
with respect to mortgage loans serviced for others, including delinquency
ratios, to the extent such information is publicly available.
The Servicer also agrees to allow access to knowledgeable
financial, accounting, origination and servicing officers of the Servicer for
the purpose of answering questions asked by any prospective purchaser
regarding recent developments affecting the Servicer, its loan origination or
servicing practices or the financial statements of Washington Mutual, Inc.
SECTION 18. Mandatory Delivery: Grant of Security Interest.
The sale and delivery of each Mortgage Loan on or before the related Closing
Date is mandatory from and after the date of the execution of the related
Confirmation, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Initial Purchaser for the
losses and damages incurred by the Initial Purchaser (including damages to
prospective purchasers of the Mortgage Loans) in the event of the applicable
Seller's failure to deliver each of the related Mortgage Loans or one or more
Mortgage Loans otherwise acceptable to the Initial Purchaser on or before the
related Closing Date. Each Seller hereby grants to the Initial Purchaser a
lien on and a continuing security interest in each Mortgage Loan sold by it
hereunder and each document and instrument evidencing each such Mortgage Loan
to secure the performance by such Seller of its obligation hereunder, and such
Seller agrees that it holds such Mortgage Loans in custody for the Initial
Purchaser subject to the Initial Purchaser's (i) right to reject any Mortgage
Loan under the terms of this Agreement and the related Confirmation, and (ii)
obligation to pay the related Purchase Price for the Mortgage Loans. All
rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION 19. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, return receipt requested, or, if by
other means, when received by the other party at the address as follows:
(i) if to the Purchaser:
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Attn: Mortgage Finance
(ii) if to the Sellers:
Washington Mutual Bank, FA
1201 Third Avenue, WMT0511
Seattle, Washington 98101
Attention: Mary A. Morehead
Telephone: (206) 377-4798
Telecopy: (206) 554-2717
Washington Mutual Bank fsb
1201 Third Avenue, WMT0511
Seattle, Washington 98101
Attention: Mary A. Morehead
Telephone: (206) 377-4798
Telecopy: (206) 554-2717
Washington Mutual Bank
1201 Third Avenue
Seattle, Washington 98101
Attention: Mary A. Morehead
Telephone: (206) 377-4798
Telecopy: (206) 554-2717
(iii) if to the Servicer:
Washington Mutual Bank, FA
9451 Corbin Avenue (Mail Stop: N010206)
Northridge, CA 91324
Attention: Gabe Barroso
Telephone: 818-775-8407
Telecopy: 818-775-2819
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 20. Severability Clause. 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 21. Counterparts. This Agreement may be
executed simultaneously in any number of counterparts. Each counterpart shall
be deemed to be an original, and all such counterparts shall constitute one
and the same instrument.
SECTION 22. Governing Law. The Agreement shall be construed
in accordance with the laws of the State of New York without regard to any
conflicts of law provisions and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with the laws of the State
of New York, except to the extent preempted by Federal law.
SECTION 23. Intention of the Parties. It is the intention of
the parties that the Initial Purchaser is purchasing, and the Sellers are
selling, the Mortgage Loans and not a debt instrument of the Sellers or
another security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Sellers, and a
purchase by the Purchaser, of the Mortgage Loans. The Initial Purchaser shall
have the right to review the Mortgage Loans and the related Mortgage Loan
Files to determine the characteristics of the Mortgage Loans which shall
affect the Federal income tax consequences of owning the Mortgage Loans and
the Sellers shall cooperate with all reasonable requests made by the Initial
Purchaser in the course of such review.
SECTION 24. Successors and Assigns. This Agreement shall
bind and inure to the benefit of and be enforceable by the Sellers, the
Servicer and the Purchaser and their respective successors and assigns.
Subject to Section 12, the Purchaser may assign this Agreement to any Person
to whom any Mortgage Loan is transferred whether pursuant to a sale or
financing and to any Person to whom the servicing or master servicing of any
Mortgage Loan is sold or transferred. Upon any such assignment, the Person to
whom such assignment is made shall succeed to all rights and obligations of
the Purchaser under this Agreement to the extent of the related Mortgage Loan
or Mortgage Loans and this Agreement, to the extent of the related Mortgage
Loan or Loans, shall be deemed to be a separate and distinct Agreement between
the applicable Seller or Sellers and such Purchaser, and a separate and
distinct Agreement between the applicable Seller and Sellers and each other
Purchaser to the extent of the other related Mortgage Loan or Loans. In the
event that this Agreement is assigned to any Person to whom the servicing or
master servicing of any Mortgage Loan is sold or transferred, the rights and
benefits under this agreement which inure to the Purchaser shall inure to the
benefit of both the Person to whom such Mortgage Loan is transferred and the
Person to whom the servicing or master servicing of the Mortgage Loan has been
transferred; provided that, the right to require a Mortgage Loan to be
repurchased by a Seller pursuant to Subsection 7.03 or 7.04 shall be retained
solely by the Purchaser. Except in connection with a merger or consolidation
permitted pursuant to Section 13.02, this Agreement shall not be assigned,
pledged or hypothecated by the Servicer to a third party without the consent
of the Purchaser.
SECTION 25. Waivers. No term or provision of this Agreement
may be waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to be
enforced.
SECTION 26. Exhibits. The exhibits to this Agreement are
hereby incorporated and made a part hereof and are an integral part of this
Agreement.
SECTION 27. General Interpretive Principles. For purposes of
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) 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;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) 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;
(d) 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;
(e) the words "herein," "hereof," "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
SECTION 28. Nonsolicitation. Each Seller and the Servicer
covenants and agrees that it shall not take any action to solicit the
refinancing of any Mortgage Loan following the date hereof or provide
information to any other entity to solicit the refinancing of any Mortgage
Loan; provided that, the foregoing shall not preclude a Seller or the Servicer
from (a) engaging in solicitations to the general public by newspaper, radio,
television or other media which are not directed toward the Mortgagors, (b)
refinancing the Mortgage Loan of any Mortgagor who, without solicitation,
contacts the Seller or the Servicer to request the refinancing of the related
Mortgage Loan, (c) engaging in solicitations of optional insurance or other
bank products (not including mortgage loans), or (d) engaging in general
solicitations to its customer base, including by mass mailing or as part of
monthly or periodic statements mailed to its borrowers or to holders of
deposit or other accounts, which do not target the Mortgagors.
SECTION 29. Reproduction of Documents. This Agreement and
all documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) 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 30. Further Agreements. The Sellers, the Servicer
and the Purchaser each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements as
may be necessary or appropriate to effectuate the purposes of this Agreement.
SECTION 31. Conflicting Provisions. In the event of a
conflict between the terms of any Confirmation and the terms of this
Agreement, the terms of the Confirmation shall prevail and control.
SECTION 32.Obligations of the Sellers. The obligations and
liability of each of the Sellers under this Agreement are several, and no
Seller shall be responsible for the obligations of any other Seller under this
Agreement. Each representation, warranty, indemnity and covenant made by one
Seller under the Agreement is made by, or on behalf of, and with respect to,
that Seller only and not to any other Seller.
<PAGE>
IN WITNESS WHEREOF, the Sellers, the Servicer and the
Purchaser have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the date first above written.
WASHINGTON MUTUAL BANK, FA
(Seller)
By: ______________________________
Name: ____________________________
Title:____________________________
WASHINGTON MUTUAL BANK
(Seller)
By: ______________________________
Name: ____________________________
Title:____________________________
WASHINGTON MUTUAL BANK fsb
(Seller and Servicer)
By: ______________________________
Name: ____________________________
Title:____________________________
GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC.
(Initial Purchaser)
By: ______________________________
Name: ____________________________
Title:____________________________
<PAGE>
EXHIBIT 1
---------
SELLER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly
elected ______________ of [SELLER], a ______________ (the "Seller"), and
further certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy of
the [Certificate of Incorporation and by-laws][Certificate of limited
partnership and limited partnership agreement] of the Seller as are in
full force and effect on the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Seller,
signed (a) the Master Mortgage Loan Purchase and Servicing Agreement (the
"Purchase Agreement"), dated as of ____ 1, 2000, by and between the
Seller and Greenwich Capital Financial Products, Inc. (the "Purchaser");
(b) the Confirmation, dated _____________ 2000, between the Seller and
the Purchaser (the "Confirmation"); [(c) the Custodial Agreement, dated
as of ____ 1, 2000, among the Purchaser, the Seller and ____________ (the
"Custodial Agreement"); and (d)] any other document delivered prior
hereto or on the date hereof in connection with the sale of the Mortgage
Loans in accordance with the Purchase Agreement and the Confirmation was,
at the respective times of such signing and delivery, and is as of the
date hereof, duly elected or appointed, qualified and acting as such
officer or attorney-in-fact, and the signatures of such persons appearing
on such documents are their genuine signatures.
4. Attached hereto as Attachment III is a Certificate of Good
Standing of the Seller dated ______________, 2000. No event has occurred
since ___________________, 2000 which has affected the good standing of
the Seller under the laws of the State of ___________.
5. All of the representations and warranties of the Seller contained
in Subsections 7.01 and 7.02 of the Purchase Agreement were true and
correct in all material respects as of the date of the Purchase Agreement
and are true and correct in all material respects as of the date hereof.
6. The Seller has performed all of its duties and has satisfied all
the material conditions on its part to be performed or satisfied prior to
the related Closing Date pursuant to the Purchase Agreement and the
related Confirmation.
All capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Seller.
Dated:
-----------------------------
[Seal]
[SELLER]
(Seller)
By:
---------------------------------------
Name:
---------------------------------------
Title: Vice President
I, _______________________, [Assistant] Secretary of the Seller,
hereby certify that _________________________ is the duly elected, qualified
and acting Vice President of the Seller and that the signature appearing above
is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
---------------------
[Seal]
[SELLER]
(Seller)
By:
-----------------------------------
Name:
----------------------------------
Title: [Assistant] Secretary
<PAGE>
EXHIBIT 2
---------
[FORM OF OPINION OF COUNSEL TO THE SELLER]
------------------------------
(Date)
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Re: Master Mortgage Loan Purchase and Servicing Agreement,
dated as of ____ 1, 2000
Gentlemen:
I have acted as counsel to [SELLER], a _________________ (the
"Seller"), in connection with the sale of certain mortgage loans by the Seller
to Greenwich Capital Financial Products, Inc. (the "Purchaser") pursuant to
(i) a Master Mortgage Loan Purchase and Servicing Agreement, dated as of ____
1, 2000, between the Seller and the Purchaser (the "Purchase Agreement"), the
Custodial Agreement, dated as of _____ 1, 2000, among the Seller, the
Purchaser, and _________________ (the "Custodial Agreement") [and the
Confirmation, dated __________, 2000, between the Seller and the Purchaser
(the "Confirmation")]. Capitalized terms not otherwise defined herein have the
meanings set forth in the Purchase Agreement.
In connection with rendering this opinion letter, I, or attorneys
working under my direction, have examined, among other things, originals,
certified copies or copies otherwise identified to my satisfaction as being
true copies of the following:
A. The Purchase Agreement;
B. [The Confirmation;]
C. The Custodial Agreement;
D. The Seller's [Certificate of Incorporation and
by-laws][certificate of limited partnership and limited
partnership agreement], as amended to date; and
E. Resolutions adopted by the Board of Directors of the Seller
with specific reference to actions relating to the transactions
covered by this opinion (the "Board Resolutions").
For the purpose of rendering this opinion, I have made such
documentary, factual and legal examinations as I deemed necessary under the
circumstances. As to factual matters, I have relied upon statements,
certificates and other assurances of public officials and of officers and
other representatives of the Seller, and upon such other certificates as I
deemed appropriate, which factual matters have not been independently
established or verified by me. I have also assumed, among other things, the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to me as originals, and the conformity
to original documents of all documents submitted to me as copies and the
authenticity of the originals of such copied documents.
On the basis of and subject to the foregoing examination, and in
reliance thereon, and subject to the assumptions, qualifications, exceptions
and limitations expressed herein, I am of the opinion that:
1. The Seller has been duly [incorporated][formed] and is validly
existing and in good standing under the laws of the State of __________ with
corporate power and authority to own its properties and conduct its business
as presently conducted by it. The Seller has the corporate power and authority
to service the Mortgage Loans, and to execute, deliver, and perform its
obligations under the Purchase Agreement, the Custodial Agreement [and the
Confirmation] (sometimes collectively, the "Agreements").
2. The Purchase Agreement, the Custodial Agreement [and the
Confirmation] have been duly and validly authorized, executed and delivered by
the Seller.
3. The Purchase Agreement, the Custodial Agreement [and the
Confirmation] constitute valid, legal and binding obligations of the Seller,
enforceable against the Seller in accordance with their respective terms.
4. No consent, approval, authorization or order of any state or
federal court or government agency or body is required for the execution,
delivery and performance by the Seller of the Purchase Agreement, the
Custodial Agreement [and the Confirmation], or the consummation of the
transactions contemplated by the Purchase Agreement, the Custodial Agreement
[and the Confirmation], except for those consents, approvals, authorizations
or orders which previously have been obtained.
5. Neither the servicing of the Mortgage Loans by the Seller as
provided in the Purchase Agreement [and the Confirmation,] nor the fulfillment
of the terms of or the consummation of any other transactions contemplated in
the Purchase Agreement, the Custodial Agreement [and the Confirmation] will
result in a breach of any term or provision of the [certificate of
incorporation or by-laws][certificate of limited partnership or limited
partnership agreement] of the Seller, or, to the best of my knowledge, will
conflict with, result in a breach or violation of, or constitute a default
under, (i) the terms of any indenture or other agreement or instrument known
to me to which the Seller is a party or by which it is bound, (ii) any State
of ____________ or federal statute or regulation applicable to the Seller, or
(iii) any order of any State of ____________ or federal court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Seller, except in any such case where the default, breach or violation would
not have a material adverse effect on the Seller or its ability to perform its
obligations under the Purchase Agreement and the Custodial Agreement.
6. There is no action, suit, proceeding or investigation pending or,
to the best of my knowledge, threatened against the Seller which, in my
judgment, either in any one instance or in the aggregate, would draw into
question the validity of the Purchase Agreement or the Custodial Agreement or
which would be likely to impair materially the ability of the Seller to
perform under the terms of the Purchase Agreement or the Custodial Agreement.
7. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Purchase Agreement is sufficient fully to transfer to the
Purchaser all right, title and interest of the Seller thereto as noteholder
and mortgagee.
8. The Assignments of Mortgage are in recordable form and upon
completion will be acceptable for recording under the laws of the State of
___________. When endorsed, as provided in the Custodial Agreement, the
Mortgage Notes will be duly endorsed under ______________ law.
The opinions above are subject to the following additional
assumptions, exceptions, qualifications and limitations:
A. I have assumed that all parties to the Agreements other than the
Seller have all requisite power and authority to execute, deliver and perform
their respective obligations under each of the Agreements, and that the
Agreements have been duly authorized by all necessary corporate action on the
part of such parties, have been executed and delivered by such parties and
constitute the legal, valid and binding obligations of such parties.
B. My opinion expressed in paragraphs 3 and 7 above is subject to
the qualifications that (i) the enforceability of the Agreements may be
limited by the effect of laws relating to (1) bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, including, without limitation, the
effect of statutory or other laws regarding fraudulent conveyances or
preferential transfers, and (2) general principles of equity upon the specific
enforceability of any of the remedies, covenants or other provisions of the
Agreements and upon the availability of injunctive relief or other equitable
remedies and the application of principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law) as such
principles relate to, limit or affect the enforcement of creditors' rights
generally and the discretion of the court before which any proceeding for such
enforcement may be brought; and (ii) I express no opinion herein with respect
to the validity, legality, binding effect or enforceability of (a) provisions
for indemnification in the Agreements to the extent such provisions may be
held to be unenforceable as contrary to public policy or (b) Section 18 of the
Purchase Agreement.
C. I have assumed, without independent check or certification, that
there are no agreements or understandings among the Seller, the Purchaser and
any other party which would expand, modify or otherwise affect the terms of
the documents described herein or the respective rights or obligations of the
parties thereunder.
I am admitted to practice in the State of ___________, and I render
no opinion herein as to matters involving the laws of any jurisdiction other
than the State of _________ and the Federal laws of the United States of
America.
Very truly yours,
<PAGE>
EXHIBIT 3
---------
SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
___________________________, hereby relinquishes any and all right,
title and interest it may have in and to the Mortgage Loans described in
Exhibit A attached hereto upon purchase thereof by Greenwich Capital Financial
Products, Inc. from the Seller named below pursuant to that certain Master
Mortgage Loan Purchase and Servicing Agreement, dated as of _____ 1, 2000, as
of the date and time of receipt by ______________________________ of
$__________ for such Mortgage Loans (the "Date and Time of Sale"), and
certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released to
the Seller named below or its designees as of the Date and Time of Sale.
Name and Address of Financial Institution
--------------------------------------------
(Name)
--------------------------------------------
(Address)
By:
-----------------------------------------
<PAGE>
II. Certification of Release
The Seller named below hereby certifies to Greenwich Capital
Financial Products, Inc. that, as of the Date and Time of Sale of the above
mentioned Mortgage Loans to Greenwich Capital Financial Products, Inc., the
security interests in the Mortgage Loans released by the above named
corporation comprise all security interests relating to or affecting any and
all such Mortgage Loans. The Seller warrants that, as of such time, there are
and will be no other security interests affecting any or all of such Mortgage
Loans.
________________________________________
Seller
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
<PAGE>
EXHIBIT 4
---------
ASSIGNMENT AND CONVEYANCE
On this _______ day of ________, 2000, [SELLER(s)] (each, a
"Seller") as the Sellers under that certain Master Mortgage Loan Purchase and
Servicing Agreement, dated as of October 1, 2000 (the "Agreement") does each
hereby sell, transfer, assign, set over and convey to Greenwich Capital
Financial Products, Inc. as Purchaser under the Agreement, without recourse,
but subject to the terms of the Agreement, all of its rights, title and
interest in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Attachment 1, together with the related Mortgage Files and
all rights and obligations arising under the documents contained therein.
Pursuant to Section 6.03 of the Agreement, each Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Custodial Agreement. The contents of each related Servicing File required
to be retained to service the Mortgage Loans pursuant to the Agreement and
thus not delivered to the Purchaser are and shall be held in trust by the
Servicer for the benefit of the Purchaser as the owner thereof. The Servicer's
possession of any portion of each such Servicing File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the related
Mortgage Loan pursuant to the Agreement, and such retention and possession by
the Servicer shall be in a custodial capacity only. The ownership of each
Mortgage Note, Mortgage, and the contents of the Mortgage File and Servicing
File is vested in the Purchaser and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or which come into the
possession of any Seller or the Servicer shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by such Seller or
the Servicer at the will of the Purchaser in such custodial capacity only.
Each Seller confirms to the Purchaser that the representation and
warranties set forth in Sections 7.01 and 7.02 of the Agreement are true and
correct as of the date hereof, and that all statements made in the Seller's
Officer's Certificate and all Attachments thereto remain complete, true and
correct in all respects as of the date hereof. Each Seller further represents
that the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto,
in the aggregate, have the characteristics specified on the pool summary
report attached hereto as Attachment 2.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
[SELLERS]
(Seller)
By:
----------------------------------------
Name:
--------------------------------------
Title:
------------------------------------
<PAGE>
EXHIBIT 5
---------
CONTENTS OF EACH 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 Servicer or delivered to the
Custodian:
1. Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income.
5. Verification of acceptable evidence of source and amount of
downpayment.
6. Credit report on Mortgagor.
7. Residential appraisal report.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property.
10. Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
11. All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
12. If available, termite report, structural engineer's report,
water potability and septic certification.
13. Sales Contract, if applicable.
14. Hazard insurance policy.
15. Tax receipts, insurance premium receipts, ledger sheets,
payment history from date of origination, insurance claim
files, correspondence, current and historical computerized data
files, and all other processing, underwriting and closing
papers and records which are customarily contained in a
mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
16. Amortization schedule, if available.
17. Payment history for Mortgage Loans that have been closed for
more than 90 days.
18. The original lender's title insurance policy in the form of an
ALTA mortgage title insurance policy, containing each of the
endorsements required by FNMA and insuring the Purchaser and
its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan.
<PAGE>
EXHIBIT 6
---------
CUSTODIAL AGREEMENT
<PAGE>
EXHIBIT 7
---------
CUSTODIAL ACCOUNT LETTER AGREEMENT
________________________ __, 2000
To:
-----------------------------------
-----------------------------------
-----------------------------------
(the "Depository")
As Servicer under the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of October 1, 2000, we hereby authorize and request you to
establish an account, as a Custodial Account, to be designated as "Washington
Mutual Bank, FA, as Servicer in trust for the Purchaser and various
Mortgagors, Adjustable Rate Mortgage Loans." All deposits in the account shall
be subject to withdrawal therefrom by order signed by the Servicer. You may
refuse any deposit which would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
[SERVICER]
(Servicer)
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Date:
---------------------------------------
<PAGE>
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 full amount deposited at
any time in the account will be insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
----------------------------------
Depository
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Date:
-----------------------------
<PAGE>
EXHIBIT 8
----------
ESCROW ACCOUNT LETTER AGREEMENT
, 2000
------------ --
To:
-------------------------------
-------------------------------
-------------------------------
(the "Depository")
As Servicer under the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of October 1, 2000, we hereby authorize and request you to
establish an account, as an Escrow Account, to be designated as "Washington
Mutual Bank, FA, as servicer in trust for the Purchaser and various
Mortgagors, Adjustable Rate Mortgage Loans." All deposits in the account shall
be subject to withdrawal therefrom by order signed by the Servicer. You may
refuse any deposit which would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
[Servicer]
(Servicer)
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Date:
--------------------------------------
<PAGE>
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 full amount deposited at
any time in the account will be insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
--------------------------------------------
Depository
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Date:
---------------------------------------
<PAGE>
EXHIBIT 9
---------
SERVICING ADDENDUM
Section 11.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement 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 Servicer
may deem necessary or desirable and consistent with the terms of this
Agreement.
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination such
waiver, modification, postponement or indulgence is not materially adverse to
the Purchaser; provided, however, that the Servicer shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, defer or forgive the payment of any principal or interest
payments, reduce the outstanding principal amount (except for actual payments
of principal), make additional advances of additional principal or extend the
final maturity date on such Mortgage Loan. Without limiting the generality of
the foregoing, the Servicer shall continue, and is hereby authorized and
empowered, to execute and deliver on behalf of itself, and the Purchaser, 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 Property. If reasonably required by
the Servicer, the Purchaser shall furnish the Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Servicer
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted
mortgage servicing practices of prudent lending institutions and the
Purchaser's reliance on the Servicer.
Section 11.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest
on all Mortgage Loans are paid in full, the Servicer shall 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 and the terms and provisions of any related
Primary 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 Servicer shall take special care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will become due and payable to the end that
the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 11.03 Realization Upon Defaulted Mortgage Loans.
(a) The Servicer shall use its best efforts, consistent with the
procedures that the Servicer would use in servicing loans for its own account,
to foreclose upon or otherwise comparably convert the ownership of such
Mortgaged Properties 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 11.01. The Servicer shall use its best efforts to realize
upon defaulted Mortgage Loans in such a 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 Servicer 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 Purchaser after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Servicer through
Insurance Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 11.05. In the event that any payment due
under any Mortgage Loan is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the Servicer shall take such action as it shall deem to be in the best
interest of the Purchaser. In the event that any payment due under any
Mortgage Loan remains delinquent for a period of 90 days or more, the Servicer
shall commence foreclosure proceedings, provided that prior to commencing
foreclosure proceedings, the Servicer shall notify the Purchaser in writing of
the Servicer's intention to do so, and the Servicer shall not commence
foreclosure proceedings if the Purchaser objects to such action within ten
(10) Business Days of receiving such notice. The Servicer shall notify the
Purchaser in writing of the commencement of foreclosure proceedings. In such
connection, the Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related Mortgaged Property, as
contemplated in Section 11.05.
(b) Notwithstanding the foregoing provisions of this Section 11.03,
with respect to any Mortgage Loan as to which the Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Servicer shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action, with respect to, such Mortgaged Property if, as a result of any
such action, the Purchaser would be considered to hold title to, to be a
mortgagee-in-possession of, or to be an owner or operator of such Mortgaged
Property within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law, unless the Servicer has also previously determined, based on
its reasonable judgment and a prudent report prepared by a Person who
regularly conducts environmental audits using customary industry standards,
that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required,
that it would be in the best economic interest of the Purchaser to
take such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 11.03 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Custodial Account as provided in
Section 11.05(vii).
If the Servicer determines, as described above, that it is in the
best economic interest of the Purchaser to take such actions as are necessary
to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials affecting any such Mortgaged
Property, then the Servicer shall take such action as it deems to be in the
best economic interest of the Purchaser. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Custodial Account
as provided in Section 11.05(vii).
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Servicer for any related unreimbursed or unpaid amount due to the Servicer,
pursuant to Section 11.05(ii), (iii), (iv)(b), (vi) or (vii); second, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the
amount of such recovery will be allocated by the Servicer as follows: first,
to unpaid Servicing Fees; and second, to the balance of the interest then due
and owing.
Section 11.04 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Servicer 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, in the form of time deposit or demand accounts. The
creation of any Custodial Account shall be evidenced by a Custodial Account
Letter Agreement in the form of Exhibit 7.
The Servicer shall deposit in the Custodial Account on a daily basis
and no later than the end of the Business Day following receipt thereof, and
retain therein the following payments and collections received by it
subsequent to the related Cut-off Date, or received by it prior to the related
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
related Cut-off Date:
(i) all payments on account of principal on the Mortgage Loans
(including all Principal Prepayments);
(ii) all payments on account of interest on the Mortgage Loans net
of the Servicing Fee;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 11.10 and 11.11, 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 the
Servicer's normal servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law;
(vi) all Monthly Advances;
(vii) all proceeds of any Mortgage Loan repurchased in accordance
with Sections 7.03 and 7.04 and all amounts required to be deposited by the
Servicer in connection with shortfalls in principal amount of Qualified
Substitute Mortgage Loans pursuant to Section 7.03;
(viii) any amounts required to be deposited by the Servicer pursuant
to Section 11.11 in connection with the deductible clause in any blanket
hazard insurance policy. Such deposit shall be made from the Servicer's own
funds, without reimbursement therefor;
(ix) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 11.13;
(x) any amounts required to be deposited in the Custodial Account
pursuant to Section 11.20; and
(xi) with respect to each Principal Prepayment in full, an amount
(to be paid by the Servicer out of its own funds without reimbursement
therefor) which, when added to all amounts allocable to interest received in
connection with such Principal Prepayment, equals one month's interest on the
amount of principal so prepaid at the Net Mortgage Rate, provided, however,
that in no event shall the aggregate of deposits made by the Servicer pursuant
to this clause (xi) exceed the aggregate amount of the Seller's Servicing Fee
in the calendar month in which such deposits are required.
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, Servicing Fees and payments in the nature of late
payment charges and assumption fees, to the extent permitted by Section 11.19,
need not be deposited by the Servicer in the Custodial Account. Such Custodial
Account shall be an Eligible Account. Any interest or earnings on funds
deposited in the Custodial Account by the depository institution shall accrue
to the benefit of the Servicer and the Servicer shall be entitled to retain
and withdraw such interest from the Custodial Account pursuant to Section
11.05(iv). The Servicer shall give notice to the Purchaser of the location of
the Custodial Account when established and prior to any change thereof.
If the balance on deposit in the Custodial Account exceeds $75,000
as of the commencement of business on any Business Day and the Custodial
Account constitutes an Eligible Account solely pursuant to clause (ii) of the
definition of Eligible Account, the Servicer shall, on or before twelve
o'clock noon Eastern time on such Business Day, withdraw from the Custodial
Account any and all amounts payable to the Purchaser and remit such amounts to
the Purchaser by wire transfer of immediately available funds.
Section 11.05 Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, withdraw from the Custodial
Account for the following purposes:
(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Section 11.14;
(ii) to reimburse itself for Monthly Advances, the Servicer'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 Fees) or Liquidation Proceeds, Condemnation Proceeds,
proceeds of an REO Disposition or Insurance Proceeds, in respect of such
Mortgage Loan, it being understood that, in the case of such reimbursement,
the Servicer's right thereto shall be prior to the rights of Purchaser, except
that, where the Servicer is required to repurchase a Mortgage Loan, pursuant
to Subsection 7.03, the Servicer's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price pursuant to
Subsection 7.03, 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, the
Servicer's right to reimburse itself pursuant to this subclause (iii) with
respect to any Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, proceeds of an REO Disposition and
such other amounts as may be collected by the Servicer from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that, in the case
of such reimbursement, the Servicer's right thereto shall be prior to the
rights of the Purchaser, except that, where the Servicer is required to
repurchase a Mortgage Loan, pursuant to Section 7.03, the Servicer's right to
such reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to Section 7.03 and all other amounts required to be
paid to the Purchaser with respect to such Mortgage Loan;
(iv) to pay to itself pursuant to Section 11.22 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all
such interest to be withdrawn monthly not later than each Distribution Date),
and (b) the Servicing Fee (to the extent not already netted from amounts
deposited in the Custodial Account) from that portion of any payment or
recovery as to interest on a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has
been repurchased pursuant to Section 7.03 all amounts received thereon and not
distributed as of the date on which the related Repurchase Price is
determined;
(vi) to reimburse the Servicer for any Monthly Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable Advance;
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to Section
11.03(b), but only to the extent of amounts received in respect of the
Mortgage Loans to which such expense is attributable;
(viii) to clear and terminate the Custodial Account on the
termination of this Agreement.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) - (vii)
above. The Servicer shall provide written notification in the form of an
Officers' Certificate to the Purchaser, on or prior to the next succeeding
Distribution Date, upon making any withdrawals from the Custodial Account
pursuant to subclause (vi) above.
Section 11.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer 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, in the form of time
deposit or demand accounts. The creation of any Escrow Account shall be
evidenced by Escrow Account Letter Agreement in the form of Exhibit 8.
The Servicer 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, and (ii) all Insurance
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property. The Servicer shall make withdrawals therefrom 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 11.08. The Servicer 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 Servicer 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 11.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer (i)
to effect timely payments of ground rents, taxes, assessments, water rates,
hazard insurance premiums, Primary Insurance Policy premiums, if applicable,
and comparable items, (ii) to reimburse the Servicer for any Servicing Advance
made by the Servicer 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 Servicer, or to the Mortgagor to the extent required by law, any interest
paid on the funds deposited in the Escrow Account, or (vii) to clear and
terminate the Escrow Account on the termination of this Agreement.
Section 11.08 Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies; Collections
Thereunder.
With respect to each Mortgage Loan, the Servicer 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 Insurance Policy premiums and
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges, including insurance 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 Servicer in
amounts sufficient for such purposes, as allowed under the terms of the
Mortgage and applicable law. To the extent that the Mortgage does not provide
for Escrow Payments, the Servicer shall determine that any such payments are
made by the Mortgagor at the time they first become due. The Servicer shall,
in accordance with accepted mortgage servicing practices of prudent lending
institutions, take appropriate actions to arrange for the timely payment of
all such bills and shall make advances from its own funds to effect such
payments, unless the Servicer determines in good faith that any such advance
would be a Nonrecoverable Advance. The determination by the Servicer that any
proposed payment, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officer's Certificate delivered to the Purchaser.
The Servicer shall maintain in full force and effect, a Primary
Insurance Policy, issued by a Qualified Insurer, with respect to each Mortgage
Loan for which such coverage is required under this Agreement. Such coverage
shall be maintained until the Loan-to-Value Ratio of the related Mortgage Loan
is reduced to that amount for which FNMA or applicable law no longer requires
such insurance to be maintained. The Servicer will not cancel or refuse to
renew any Primary Insurance Policy in effect on the Closing Date that is
required to be kept in force under this Agreement unless a replacement Primary
Insurance Policy for such cancelled or non- renewed policy is obtained from
and maintained with a Qualified Insurer. The Servicer shall not take any
action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Servicer, would
have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
11.19, the Servicer shall promptly notify the insurer under the related
Primary 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 Insurance Policy. If such Primary
Insurance Policy is terminated as a result of such assumption or substitution
of liability, the Servicer shall obtain a replacement Primary Insurance Policy
as provided above.
In connection with its activities as servicer, the Servicer agrees
to prepare and present, on behalf of itself, and the Purchaser, claims to the
insurer under any Primary Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Insurance Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 11.04, any amounts
collected by the Servicer under any Primary Insurance Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
11.05.
Section 11.09 Transfer of Accounts.
The Servicer may transfer the Custodial Account or the Escrow
Account to a different depository institution from time to time. Such transfer
shall be made only upon obtaining the consent of the Purchaser, which consent
shall not be unreasonably withheld. In any case, the Custodial Account and
Escrow Account shall be Eligible Accounts.
Section 11.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan
fire and hazard insurance with extended coverage as is customary in the area
where the Mortgaged Property is located in an amount which is at least equal
to the lesser of (i) the amount necessary to fully compensate for any damage
or loss to the improvements which are a part of such property on a replacement
cost basis or (ii) the outstanding principal balance of the Mortgage Loan, in
each case in an amount not less than such amount as is necessary to prevent
the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area identified on a Flood Hazard Boundary Map or
Flood Insurance Rate Map issued by the Flood Emergency Management Agency as
having special flood hazards and such flood insurance has been made available,
the Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the lesser of (i) the outstanding principal balance of
the Mortgage Loan or (ii) the maximum amount of insurance which is available
under the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended. The Servicer also shall maintain on any
REO Property, fire and hazard insurance with extended coverage in an amount
which is at least equal to the lesser of (i) the maximum insurable value of
the improvements which are a part of such property and (ii) the outstanding
principal balance of the related Mortgage Loan at the time it became an REO
Property plus accrued interest at the Mortgage Interest Rate and related
Servicing Advances, liability insurance and, to the extent required and
available under the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Pursuant to Section 11.04, any amounts collected by the Servicer 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 the Servicer's
normal servicing procedures, shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 11.05. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Purchaser, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance need be required by the Servicer of the Mortgagor
or maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable 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 Sellers
or Servicer or, upon request of the Purchaser, to the Purchaser, and shall
provide for at least thirty days prior written notice of any cancellation,
reduction in the amount of, or material change in, coverage to the Servicer.
The Servicer shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Servicer shall not accept any such insurance policies from insurance companies
unless such companies currently reflect a General Policy Rating of B:III or
better in Best's Key Rating Guide and are licensed to do business in the state
wherein the property subject to the policy is located.
Section 11.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer that has a Best rating of
B:III insuring against hazard losses on all of Mortgaged Properties securing
the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 11.10 and otherwise
complies with all other requirements of Section 11.10, the Servicer shall
conclusively be deemed to have satisfied its obligations as set forth in
Section 11.10, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO
Property a policy complying with Section 11.10, and there shall have been one
or more losses 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 Servicer 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 Servicer shall cause to be delivered to the Purchaser a
certified true copy of such policy and 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 11.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA or FHLMC on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The fidelity bond and errors and omissions insurance shall be
in the form of the Mortgage Banker's Blanket Bond and shall protect and insure
the Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of such persons. Such fidelity bond
shall also protect and insure the Servicer 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 11.12 requiring the fidelity bond and errors and omissions
insurance shall diminish or relieve the Servicer 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 Servicing Guide or by FHLMC in the FHLMC
Sellers' and Servicers' Guide. Upon request of the Purchaser, the Servicer
shall cause to be delivered to the Purchaser a certified true copy of the
fidelity bond and insurance policy and 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.
Section 11.13 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 person designated by the Purchaser, or in
the event such person 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 Servicer from an attorney duly licensed to practice law in the state
where the REO Property is located. 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 Servicer shall either itself or through an agent selected by the
Servicer, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) 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. If a REMIC election is or is to be made with respect to the
arrangement under which the Mortgage Loans and any REO Property are held, the
Servicer shall manage, conserve, protect and operate each REO Property in a
manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by such REMIC of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income
from foreclosure property" within the meaning of Section 860G(c)(2) of the
Code. The Servicer 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 annually thereafter. The Servicer shall make or cause to be
made a written report of each such inspection. Such reports shall be retained
in the Servicing File. The Servicer shall use its 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 Servicer determines, and gives appropriate notice to the Purchaser, that a
longer period is necessary for the orderly liquidation of such REO Property.
If a period longer than one year is necessary to sell any REO property, (i)
the Servicer shall report monthly to the Purchaser as to the progress being
made in selling such REO Property and (ii) if, with the written consent of the
Purchaser, a purchase money mortgage is taken in connection with such sale,
such purchase money mortgage shall name the Servicer as mortgagee, and a
separate servicing agreement between the Servicer and the Purchaser shall be
entered into with respect to such purchase money mortgage. Notwithstanding the
foregoing, if a REMIC election is made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, such REO Property
shall be disposed of within two years or such other period as may be permitted
under Section 860G(a)(8) of the Code.
With respect to each REO Property, the Servicer shall segregate and
hold all funds collected and received in connection with the operation of the
REO Property separate and apart from its own funds or general assets and shall
establish and maintain a separate REO Account for each REO Property in the
form of a non-interest bearing demand account, unless an Opinion of Counsel is
obtained by the Servicer to the effect that the classification as a grantor
trust or REMIC for federal income tax purposes of the arrangement under which
the Mortgage Loans and the REO Property is held will not be adversely affected
by holding such funds in another manner. Each REO Account shall be established
with the Servicer or, with the prior consent of the Purchaser, with a
commercial bank, a mutual savings bank or a savings association. The creation
of any REO Account shall be evidenced by a letter agreement substantially in
the form of the Custodial Account Letter Agreement attached as Exhibit 7
hereto. An original of such letter agreement shall be furnished to any
Purchaser upon request.
The Servicer shall deposit or cause to be deposited, on a daily
basis in each REO Account all revenues received with respect to the related
REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of maintaining any hazard insurance pursuant to Section 11.10 hereof and the
fees of any managing agent acting on behalf of the Servicer. The Servicer
shall not be entitled to retain interest paid or other earnings, if any, on
funds deposited in such REO Account. On or before each Determination Date, the
Servicer shall withdraw from each REO Account and deposit into the Custodial
Account the net income from the REO Property on deposit in the REO Account.
The Servicer shall furnish to the Purchaser on each Distribution
Date, an operating statement for each REO Property covering the operation of
each REO Property for the previous month. Such operating statement shall be
accompanied by such other information as the Purchaser shall reasonably
request.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the
best interest of the Purchaser only with the prior written consent of the
Purchaser. If as of the date title to any REO Property was acquired by the
Servicer there were outstanding unreimbursed Servicing Advances or Servicing
Fees with respect to the REO Property, or if any Servicing Advances or
Servicing Fees accrue after such date, the Servicer, upon an REO Disposition
of such REO Property, shall be entitled to reimbursement for any such amounts
from proceeds received in connection with such REO Disposition. The proceeds
from the REO Disposition, net of any payments to the Servicer as provided
above, shall be deposited in the REO Account and shall be transferred to the
Custodial Account on the Determination Date in the month following receipt
thereof for distribution on the succeeding Distribution Date in accordance
with Section 11.14.
Section 11.14 Distributions.
On each Distribution Date, the Servicer shall distribute 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 11.05; plus (ii)
all Monthly Advances, if any, which the Servicer is obligated to distribute
pursuant to Section 11.21, minus (iii) any amounts attributable to Principal
Prepayments received after the last day of the calendar month immediately
preceding the related Distribution Date, minus (iv) any amounts attributable
to Monthly Payments collected but due on a Due Date or Dates subsequent to the
preceding Determination Date.
All distributions made to the Purchaser on each Distribution Date
will be made to the Purchaser of record on the preceding Record Date, and
shall be based on the Mortgage Loans owned and held by the Purchaser, and
shall be made by wire transfer of immediately available funds to the account
of the Purchaser at a bank or other entity having appropriate facilities
therefor, if the Purchaser shall have so notified the Servicer or by check
mailed to the address of the Purchaser. If the Purchaser purchased Mortgage
Loans from more than one Seller, distributions on each Distribution Date may
be made by not more than two wire transfers or two checks, as the case may be.
With respect to any remittance received by the Purchaser on or after
the second Business Day following the Business Day on which such payment was
due, the Servicer shall pay to the Purchaser interest on any such late payment
at an annual rate equal to the rate of interest as is publicly announced from
time to time at its principal office by Chase Manhattan Bank, New York, New
York, as its prime lending 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 paid by the Servicer to
the Purchaser on the date such late payment is made and shall cover the period
commencing with the day following such second Business Day and ending with the
Business Day on which such payment is made, both inclusive. Such interest
shall be remitted along with such late payment. The payment by the Servicer of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Servicer.
Section 11.15 Remittance Reports.
Within two Business Days following each Determination Date, the
Servicer shall deliver electronically to the Purchaser or its designee the
determination data with respect to the related Distribution Date, together
with such other information with respect to the Mortgage Loans as the
Purchaser may reasonably require to allocate distributions made pursuant to
this Agreement and provide appropriate statements with respect to such
distributions.
If the Purchaser purchased Mortgage Loans from more than one Seller,
the Servicer may submit the foregoing information in two separate reports, one
relating to Mortgage Loans sold by WMBFA and one relating to Mortgage Loans
sold by WMB and/or WMBfsb.
Section 11.16 Statements to the Purchaser.
Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Purchaser or its designee a statement prepared
by the Servicer setting forth the status of the Custodial Account as of the
close of business on such Distribution Date and showing, for the period
covered by such statement, the aggregate amount of deposits into and
withdrawals from the Custodial Account of each category of deposit specified
in Section 11.04 and each category of withdrawal specified in Section 11.05.
In addition, not more than sixty days after the end of each calendar
year, the Servicer shall furnish to each Person who was the Purchaser at any
time during such calendar year, (i) as to the aggregate of remittances for the
applicable portion of such year, an annual statement in accordance with the
requirements of applicable federal income tax law, and (ii) listing of the
principal balances of the Mortgage Loans outstanding at the end of such
calendar year.
The Servicer shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to any Purchaser pursuant to any applicable
law with respect to the Mortgage Loans and the transactions contemplated
hereby. In addition, the Servicer shall provide the Purchaser with such
information concerning the Mortgage Loans as is necessary for the Purchaser to
prepare its federal income tax return as any Purchaser may reasonably request
from time to time.
Section 11.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 11.02,
with respect to any REO Property, the Servicer shall furnish to the Purchaser
a statement covering the Servicer's efforts in connection with the sale of
such REO Property and any rental of such REO Property incidental to the sale
thereof for the previous month, together with the operating statement. Such
statement shall be accompanied by such other information as the Purchaser
shall reasonably request.
Section 11.18 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 Servicer shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property.
Section 11.19 Assumption Agreements.
The Servicer shall, 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 applicable thereto; provided, however,
that the Servicer shall not exercise any such rights if prohibited by law from
doing so or if the exercise of such rights would impair or threaten to impair
any recovery under the related Primary Insurance Policy, if any. If the
Servicer reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Servicer shall 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 11.19, the Servicer, with the prior written consent of the
insurer under the Primary Insurance Policy, 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.
In connection with any such assumption or substitution of liability,
the Servicer shall follow the underwriting practices and procedures of prudent
mortgage lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability, Mortgage
Interest Rate, the amount of the Monthly Payment, and the final maturity date
of such Mortgage Note may not be changed. The Servicer 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. Any fee collected by the Servicer for
entering into an assumption or substitution of liability agreement in excess
of 1% of the outstanding principal balance of the Mortgage Loan shall be
deposited in the Custodial Account pursuant to Section 11.04.
Notwithstanding the foregoing paragraphs of this Section or any
other provision of this Agreement, the Servicer 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 Servicer may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Section 11.19, 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 11.20 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the
Purchaser by a certification of a servicing officer of the Servicer (a
"Servicing Officer"), 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 11.04 have been or will be so deposited, and shall request
execution of any document necessary to satisfy the Mortgage Loan and delivery
to it of the portion of the Mortgage File held by the Purchaser or the
Purchaser's designee. Upon receipt of such certification and request, the
Purchaser, shall promptly release the related mortgage documents to the
Servicer and the Servicer shall prepare and process any satisfaction or
release. No expense incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Custodial Account or the
Purchaser.
In the event the Servicer 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 Servicer, upon written demand, shall remit to the
Purchaser the then outstanding principal balance of the related Mortgage Loan
by deposit thereof in the Custodial Account. The Servicer shall maintain a
fidelity bond insuring the Servicer 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 servicing or
foreclosure of a Mortgage Loan, including for this purpose collection under
any Primary Insurance Policy, the Servicer may request pursuant to the
Custodial Agreement the release of a portion of the Mortgage File held by the
Custodian. The Servicer shall be obligated to return the related Mortgage
documents to the Custodian when the need therefor by the Servicer 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,
as set forth in the Custodial Agreement.
Section 11.21 Monthly Advances by the Servicer.
(a) Not later than the close of business on the Business Day
preceding each Distribution Date, the Servicer shall deposit in the Custodial
Account an amount equal to all payments not previously advanced by the
Servicer, whether or not deferred pursuant to Section 11.01, of principal (due
after the Cut-off Date) and interest not allocable to the period prior to the
Cut-off Date, at the Mortgage Interest Rate net of the Servicing Fee, which
were due on a Mortgage Loan and delinquent at the close of business on the
related Determination Date.
(b) The obligation of the Servicer to make such Monthly Advances is
mandatory, notwithstanding any other provision of this Agreement, and, with
respect to any Mortgage Loan or REO Property, shall continue until a Final
Recovery Determination in connection therewith; provided that, notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be
made hereunder by the Servicer if such Monthly Advance would, if made,
constitute a Nonrecoverable Advance. The determination by the Servicer that it
has made a Nonrecoverable Advance or that any proposed Monthly Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
Section 11.22 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall,
subject to Section 11.04(xi), be entitled to withdraw from the Custodial
Account or to retain from interest payments on the Mortgage Loans the amounts
provided for as the Servicer's Servicing Fee. Additional servicing
compensation in the form of assumption fees, as provided in Section 11.19, NSF
fees and late payment charges or otherwise shall be retained by the Servicer
to the extent not required to be deposited in the Custodial Account. The
Servicer 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.
Section 11.23 Notification of Adjustments.
On each Adjustment Date, the Servicer shall make interest rate
adjustments for each Mortgage Loan in compliance with the requirements of the
related Mortgage and Mortgage Note. The Servicer shall execute and deliver the
notices required by each Mortgage and Mortgage Note regarding interest rate
adjustments. Upon request of the Purchaser, the Servicer also shall provide
notification to the Purchaser of all applicable data and information regarding
such interest rate adjustments and the Servicer's methods of implementing such
interest rate adjustments. Upon the discovery by the Servicer or the Purchaser
that the Servicer has failed to adjust a Mortgage Interest Rate or a Monthly
Payment pursuant to the terms of the related Mortgage Note and Mortgage, the
Servicer shall immediately deposit in the Custodial Account from its own funds
the amount of any interest loss caused thereby without reimbursement therefor.
Section 11.24 Statement as to Compliance.
The Servicer will deliver to the Purchaser not later than April 30
of each year, an Officers' Certificate stating, as to each signatory thereof,
that (i) a review of the activities of the Servicer during the preceding 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 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 officer and
the nature and status thereof. Copies of such statement shall be provided by
the Purchaser to any Person identified as a prospective purchaser of the
Mortgage Loans.
Section 11.25 Independent Public Accountants' Servicing Report.
Not later than 90 days following the end of each fiscal year of the
Servicer, the Servicer at its expense shall cause a firm of independent public
accountants (which may also render other services to the Servicer) which is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Purchaser or its designee to the effect that such firm has
examined certain documents and records relating to the mortgage servicing
operations of the Servicer and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, such firm confirms that such servicing has been
conducted in compliance thereunder except for such significant exceptions or
errors in records that, in the opinion of such firm, the Uniform Single
Attestation Program for Mortgage Bankers requires it to report. Copies of such
statement shall be provided by the Purchaser to any Person identified as a
prospective purchaser of the Mortgage Loans.
Section 11.26 Access to Certain Documentation.
The Servicer shall provide to the Office of Thrift Supervision, the
FDIC and any other federal or state banking or insurance regulatory authority
that may exercise authority over the Purchaser access to the documentation
regarding the Mortgage Loans serviced by the Servicer required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Servicer. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Servicer by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Servicer.
Section 11.27 Reports and Returns to be Filed by the Servicer.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Servicer shall
file information reports with respect to the receipt of mortgage interest
received in a trade or business, reports of foreclosures and abandonments of
any Mortgaged Property and information returns relating to cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such
Sections 6050H, 6050J and 6050P of the Code.
Section 11.28 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Servicer shall
not take any action, cause the REMIC to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of the
REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on "prohibited transactions" as defined
in Section 860F(a)(2) of the Code and the tax on "contributions" to a REMIC
set forth in Section 860G(d) of the Code) unless the Servicer has received an
Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such REMIC status
or result in the imposition of any such tax.
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EXHIBIT 10
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FORM OF CONFIRMATION
