EXHIBIT 4.3
EXECUTION COPY
RESIDENTIAL FUNDING CORPORATION,
as Master Servicer
HOME EQUITY LOAN TRUST 2000-HS1,
as Issuer
and
THE CHASE MANHATTAN BANK
as Indenture Trustee
SERVICING AGREEMENT
Dated as of September 26, 2000
Revolving Credit Loans
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This Servicing Agreement, dated as of September 26, 2000, among
Residential Funding Corporation (the "Master Servicer"), the Home Equity Loan
Trust 2000-HS1 (the "Issuer"), and The Chase Manhattan Bank (the "Indenture
Trustee").
W I T N E S S E T H T H A T:
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WHEREAS, pursuant to the terms of the Revolving Credit Loan
Purchase Agreement, Residential Funding Corporation (in its capacity as Seller)
will sell to the Depositor the Revolving Credit Loans together with the Related
Documents on the Closing Date, and thereafter all Additional Balances created on
or after the Cut-off Date (except as set forth herein);
WHEREAS, the Depositor will sell the Revolving Credit Loans and
all of its rights under the Revolving Credit Loan Purchase Agreement to the
Issuer, together with the Related Documents on the Closing Date, and thereafter
all Additional Balances created on or after the Cut-off Date (except as set
forth herein);
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer
will issue and transfer to or at the direction of the Depositor, the
Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue and
transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the
Master Servicer will service the Revolving Credit Loans directly or through one
or more Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For all purposes of this Servicing Agreement, except
as otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the Indenture dated
the date hereof (the "Indenture"), between the Issuer and The Chase Manhattan
Bank, as indenture trustee, which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
Section 1.02 Other Definitional Provisions. (a) All terms defined in this
Servicing Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Servicing Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Servicing Agreement or in any such certificate or other document, and
accounting terms partly defined in this Servicing Agreement or in any such
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certificate or other document, to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import when
used in this Servicing Agreement shall refer to this Servicing Agreement as a
whole and not to any particular provision of this Servicing Agreement; Section
and Exhibit references contained in this Servicing Agreement are references to
Sections and Exhibits in or to this Servicing Agreement unless otherwise
specified; the term "including" shall mean "including without limitation"; and
the term "proceeds" shall have the meaning ascribed thereto in the UCC.
(d) The definitions contained in this Servicing Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
Section 1.03 Interest Calculations. All calculations of interest hereunder that
are made in respect of the Loan Balance of a Revolving Credit Loan shall be made
on a daily basis using a 365-day year. All calculations of interest on the
Securities shall be made on the basis of the actual number of days in an
Interest Period and a year assumed to consist of 360 days. The calculation of
the Servicing Fee shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All dollar amounts calculated hereunder shall be rounded
to the nearest penny with one-half of one penny being rounded up.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Representations and Warranties Regarding the Master Servicer. The
Master Servicer represents and warrants to the Issuer and for the benefit of the
Indenture Trustee, as pledgee of the Revolving Credit Loans, as of the Cut-off
Date:
(a) The Master Servicer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the corporate
power to own its assets and to transact the business in which it is currently
engaged. The Master Servicer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of the business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
other) of the Master Servicer;
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(b) The Master Servicer has the power and authority to make, execute, deliver
and perform this Servicing Agreement and all of the transactions contemplated
under this Servicing Agreement, and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Servicing Agreement.
When executed and delivered, this Servicing Agreement will constitute the legal,
valid and binding obligation of the Master Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies;
(c) The Master Servicer is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Servicing Agreement, except for such consent, license, approval or
authorization, or registration or declaration, as shall have been obtained or
filed, as the case may be;
(d) The execution and delivery of this Servicing Agreement and the performance
of the transactions contemplated hereby by the Master Servicer will not violate
any provision of any existing law or regulation or any order or decree of any
court applicable to the Master Servicer or any provision of the Certificate of
Incorporation or Bylaws of the Master Servicer, or constitute a material breach
of any mortgage, indenture, contract or other agreement to which the Master
Servicer is a party or by which the Master Servicer may be bound; and
(e) No litigation or administrative proceeding of or before any court, tribunal
or governmental body is currently pending, or to the knowledge of the Master
Servicer threatened, against the Master Servicer or any of its properties or
with respect to this Servicing Agreement or the Securities which in the opinion
of the Master Servicer has a reasonable likelihood of resulting in a material
adverse effect on the transactions contemplated by this Servicing Agreement.
The foregoing representations and warranties shall survive any
termination of the Master Servicer hereunder.
Section 2.02 Representations and Warranties of the Issuer. The Issuer hereby
represents and warrants to the Master Servicer and for the benefit of the
Indenture Trustee, as pledgee of the Revolving Credit Loans, as of the Cut-off
Date:
(a) The Issuer is a business trust duly formed and in good standing under the
laws of the State of Delaware and has full power, authority and legal right to
execute and deliver this Servicing Agreement and to perform its obligations
under this Servicing Agreement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Servicing Agreement; and
(b) The execution and delivery by the Issuer of this Servicing Agreement and the
performance by the Issuer of its obligations under this Servicing Agreement will
not violate any provision of any law or regulation governing the Issuer or any
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order, writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Issuer or any of its assets. Such
execution, delivery, authentication and performance will not conflict with, or
result in a breach or violation of, any mortgage, deed of trust, lease or other
agreement or instrument to which the Issuer is bound.
Section 2.03 Enforcement of Representations and Warranties. The Master Servicer,
on behalf of and subject to the direction of the Indenture Trustee, as pledgee
of the Revolving Credit Loans, or the Issuer, shall enforce the representations
and warranties of the Seller pursuant to the Revolving Credit Loan Purchase
Agreement. Upon the discovery by the Seller, the Depositor, the Master Servicer,
the Indenture Trustee, the Credit Enhancer, the Issuer, or any Custodian of a
breach of any of the representations and warranties made in the Revolving Credit
Loan Purchase Agreement, in respect of any Revolving Credit Loan which
materially and adversely affects the interests of the Securityholders or the
Credit Enhancer, the party discovering such breach shall give prompt written
notice to the other parties (any Custodian being so obligated under a Custodial
Agreement). The Master Servicer shall promptly notify the Seller of such breach
and request that, pursuant to the terms of the Revolving Credit Loan Purchase
Agreement, the Seller either (i) cure such breach in all material respects
within 45 days (with respect to a breach of the representations and warranties
contained in Section 3.1(a) of the Revolving Credit Loan Purchase Agreement) or
90 days (with respect to a breach of the representations and warranties
contained in Section 3.1(b) of the Revolving Credit Loan Purchase Agreement)
from the date the Seller was notified of such breach or (ii) purchase such
Revolving Credit Loan from the Issuer at the price and in the manner set forth
in Section 3.1(b) of the Revolving Credit Loan Purchase Agreement; provided that
the Seller shall, subject to compliance with all the conditions set forth in the
Revolving Credit Loan Purchase Agreement, have the option to substitute an
Eligible Substitute Loan or Loans for such Revolving Credit Loan. In the event
that the Seller elects to substitute one or more Eligible Substitute Loans
pursuant to Section 3.1(b) of the Revolving Credit Loan Purchase Agreement, the
Seller shall deliver to the Issuer with respect to such Eligible Substitute
Loans, the original Credit Line Agreement, the Mortgage, and such other
documents and agreements as are required by the Revolving Credit Loan Purchase
Agreement. Payments due with respect to Eligible Substitute Loans in the month
of substitution shall not be transferred to the Issuer and will be retained by
the Master Servicer and remitted by the Master Servicer to the Seller on the
next succeeding Payment Date provided a payment at least equal to the applicable
Minimum Monthly Payment has been received by the Issuer for such month in
respect of the Revolving Credit Loan to be removed. The Master Servicer shall
amend or cause to be amended the Revolving Credit Loan Schedule to reflect the
removal of such Revolving Credit Loan and the substitution of the Eligible
Substitute Loans and the Master Servicer shall promptly deliver the amended
Revolving Credit Loan Schedule to the Owner Trustee and the Indenture Trustee.
It is understood and agreed that the obligation of the Seller to cure
such breach or purchase or substitute for such Revolving Credit Loan as to which
such a breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Issuer and the Indenture Trustee, as
pledgee of the Revolving Credit Loans, against the Seller. In connection with
the purchase of or substitution for any such Revolving Credit Loan by the
Seller, the Issuer shall assign to the Seller all of its right, title and
interest in respect of the Revolving Credit Loan Purchase Agreement applicable
to such Revolving Credit Loan. Upon receipt of the Repurchase Price, or upon
completion of such substitution, the Master Servicer shall notify the Custodian
and then the Custodian shall deliver the Mortgage Files to the Master Servicer,
together with all relevant endorsements and assignments prepared by the Master
Servicer which the Indenture Trustee shall execute.
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ARTICLE III
ADMINISTRATION AND SERVICING OF REVOLVING CREDIT LOANS
Section 3.01 The Master Servicer.
(a) The Master Servicer shall service and administer the Revolving Credit Loans
in a manner generally consistent with the terms of the Program Guide and in a
manner consistent with the terms of this Servicing Agreement and which shall be
normal and usual in its general mortgage servicing activities and shall have
full power and authority, acting alone or through a subservicer, to do any and
all things in connection with such servicing and administration which it may
deem necessary or desirable, it being understood, however, that the Master
Servicer shall at all times remain responsible to the Issuer and the Indenture
Trustee, as pledgee of the Revolving Credit Loans, for the performance of its
duties and obligations hereunder in accordance with the terms hereof and the
Program Guide. Without limiting the generality of the foregoing, the Master
Servicer shall continue, and is hereby authorized and empowered by the Issuer
and the Indenture Trustee, as pledgee of the Revolving Credit Loans, to execute
and deliver, on behalf of itself, the Issuer, the Indenture Trustee or any of
them, any and all instruments of satisfaction or cancellation, or of partial or
full release or discharge and all other comparable instruments with respect to
the Revolving Credit Loans and with respect to the Mortgaged Properties. The
Issuer, the Indenture Trustee and the Custodian, as applicable, shall furnish
the Master Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder. In addition, the Master Servicer may, at its
own discretion and on behalf of the Indenture Trustee, obtain credit information
in the form of a Credit Score from a credit repository. On the Closing Date, the
Indenture Trustee shall deliver to the Master Servicer a limited power of
attorney substantially in the form of Exhibit B hereto.
If the Mortgage relating to a Revolving Credit Loan did not have a lien
senior to the Revolving Credit Loan on the related Mortgaged Property as of the
Cut-off Date, then the Master Servicer, in such capacity, may not consent to the
placing of a lien senior to that of the Mortgage on the related Mortgaged
Property. If the Mortgage relating to a Revolving Credit Loan had a lien senior
to the Revolving Credit Loan on the related Mortgaged Property as of the Cut-off
Date, then the Master Servicer, in such capacity, may consent to the refinancing
of the prior senior lien, provided that the following requirements are met:
(i) the resulting Combined Loan-to-Value Ratio ("Combined Loan-to-Value Ratio")
of such Revolving Credit Loan is no higher than that permitted by the Program
Guide, provided, however, the Mortgagor's debt-to-income ratio is less than the
original debt-to-income ratio as set forth on the Revolving Credit Loan
Schedule; or
(ii) the resulting Combined Loan-to-Value Ratio of such Revolving Credit Loan is
no higher than the Combined Loan-to-Ratio prior to such refinancing; provided,
however, if such refinanced mortgage loan is a "rate and term" mortgage loan
(meaning, the Mortgagor does not receive any cash from the refinancing), the
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Combined Loan-to-Value Ratio may increase to the extent of either (a) the
reasonable closing costs of such refinancing or (b) any decrease in the value of
the related Mortgaged Property, if the Mortgagor is in good standing;
(iii) the interest rate, or, in the case of an adjustable rate existing senior
lien, the maximum interest rate, for the loan evidencing the refinanced senior
lien is no higher than the interest rate or the maximum interest rate, as the
case may be, on the loan evidencing the existing senior lien immediately prior
to the date of such refinancing; provided, however, (a) if the loan evidencing
the existing senior lien prior to the date of refinancing has an adjustable rate
and the loan evidencing the refinanced senior lien has a fixed rate, then the
current interest rate on the loan evidencing the refinanced senior lien may be
up to 2.0% higher than the then current loan rate of the loan evidencing the
existing senior lien and (b) if the loan evidencing the existing senior lien
prior to the date of refinancing has a fixed rate and the loan evidencing the
refinanced senior lien has an adjustable rate, then the maximum interest rate on
the loan evidencing the refinanced senior lien shall be less than or equal to
(x) the interest rate on the loan evidencing the existing senior lien prior to
the date of refinancing plus (y) 2.0%; and
(b) the loan evidencing the refinanced senior lien is not subject to negative
amortization.
The Master Servicer may also, without prior approval of the Rating
Agencies or the Credit Enhancer, increase the Credit Limits on Revolving Credit
Loans (a "Credit Limit Increase"), provided that (i) a new appraisal is
obtained, (ii) the new Combined Loan-to-Value Ratio of any such Revolving Credit
Loan after giving effect to such increase is less than or equal to the Combined
Loan-to-Value Ratio of the Revolving Credit Loan as of the Cut-off Date, (iii)
the Master Servicer receives verbal verification of employment of the related
Mortgagor and (iv) the payment history of the related Mortgagor is within the
underwriting parameters of the Program Guide. In addition, the Master Servicer
may increase the Credit Limits on Revolving Credit Loans without obtaining new
appraisals provided that clauses (iii) and (iv) of the preceding sentence are
satisfied, the Combined Loan-to-Value Ratio of the Revolving Credit Loan
following the Credit Limit Increase will be limited to 100% and at no time shall
the aggregate Principal Balance of such Revolving Credit Loans exceed 10% of the
current Pool Balance; provided, further, however, that for Revolving Credit
Loans with original Combined Loan-to-Value Ratios in excess of 80%, the Combined
Loan-to-Value Ratio resulting from such Credit Limit Increase must be less than
or equal to the original Combined Loan-to-Value Ratio and at no time shall the
aggregate Principal Balance of such Revolving Credit Loans exceed 5% of the
current Pool Balance.
In connection with servicing the Revolving Credit Loans, the Master
Servicer may take reasonable actions to encourage or effect the termination of
Loan Agreements that have become dormant.
The relationship of the Master Servicer (and of any successor to the
Master Servicer as servicer under this Servicing Agreement) to the Issuer under
this Servicing Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
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(c) The Master Servicer may enter into Subservicing Agreements with Subservicers
for the servicing and administration of certain of the Revolving Credit Loans.
References in this Servicing Agreement to actions taken or to be taken by the
Master Servicer in servicing the Revolving Credit Loans include actions taken or
to be taken by a Subservicer on behalf of the Master Servicer and any amount
actually received by such Subservicer in respect of a Revolving Credit Loan
shall be deemed to have been received by the Master Servicer whether or not
actually received by the Master Servicer. Each Subservicing Agreement will be
upon such terms and conditions as are not inconsistent with this Servicing
Agreement and as the Master Servicer and the Subservicer have agreed. With the
approval of the Master Servicer, a Subservicer may delegate its servicing
obligations to third-party servicers, but such Subservicers will remain
obligated under the related Subservicing Agreements. The Master Servicer and the
Subservicer may enter into amendments to the related Subservicing Agreements;
provided, however, that any such amendments shall not cause the Revolving Credit
Loans to be serviced in a manner that would be materially inconsistent with the
standards set forth in this Servicing Agreement. The Master Servicer shall be
entitled to terminate any Subservicing Agreement in accordance with the terms
and conditions thereof and without any limitation by virtue of this Servicing
Agreement; provided, however, that in the event of termination of any
Subservicing Agreement by the Master Servicer or the Subservicer, the Master
Servicer shall either act as servicer of the related Revolving Credit Loan or
enter into a Subservicing Agreement with a successor Subservicer which will be
bound by the terms of the related Subservicing Agreement. The Master Servicer
shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Master Servicer and nothing contained in this Servicing
Agreement shall be deemed to limit or modify such indemnification.
In the event that the rights, duties and obligations of the Master
Servicer are terminated hereunder, any successor to the Master Servicer in its
sole discretion may, to the extent permitted by applicable law, terminate the
existing Subservicing Agreement with any Subservicer in accordance with the
terms of the applicable Subservicing Agreement or assume the terminated Master
Servicer's rights and obligations under such subservicing arrangements which
termination or assumption will not violate the terms of such arrangements.
As part of its servicing activities hereunder, the Master Servicer, for
the benefit of the Securityholders and the Credit Enhancer, shall use reasonable
efforts to enforce the obligations of each Subservicer under the related
Subservicing Agreement, to the extent that the non-performance of any such
obligation would have a material adverse effect on a Revolving Credit Loan. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Revolving Credit Loans. The Master Servicer
shall pay the costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds all amounts due in
respect of the related Revolving Credit Loan or (ii) from a specific recovery of
costs, expenses or attorneys fees against the party against whom such
enforcement is directed.
Section 3.02 Collection of Certain Revolving Credit Loan Payments. (a) The
Master Servicer shall make reasonable efforts to collect all payments called for
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under the terms and provisions of the Revolving Credit Loans, and shall, to the
extent such procedures shall be consistent with this Servicing Agreement and
generally consistent with the Program Guide, follow such collection procedures
as shall be normal and usual in its general mortgage servicing activities.
Consistent with the foregoing, and without limiting the generality of the
foregoing, the Master Servicer may in its discretion waive any late payment
charge, penalty interest or other fees which may be collected in the ordinary
course of servicing such Revolving Credit Loan. The Master Servicer may also
extend the Due Date for payment due on a Revolving Credit Loan in accordance
with the Program Guide, provided, however, that the Master Servicer shall first
determine that any such waiver or extension will not impair the coverage of any
related insurance policy or materially adversely affect the lien of the related
Mortgage (except as described below) or the interests of the Securityholders and
the Credit Enhancer. Consistent with the terms of this Servicing Agreement, the
Master Servicer may also:
(i) waive, modify or vary any term of any Revolving Credit Loan (including
reduce the Credit Limit or extend the period during which a Draw may be made by
the Mortgagor pursuant to the Loan Agreement with respect to any Revolving
Credit Loan);
(ii) consent to the postponement of strict compliance with any such term or in
any manner grant indulgence to any Mortgagor;
(iii) arrange with a Mortgagor a schedule for the payment of principal and
interest due and unpaid;
(iv) forgive any portion of the amounts contractually owed under the Revolving
Credit Loan;
(v) capitalize any past due amounts owed under the Revolving Credit Loan by
adding amounts in arrearage to the existing principal balance of the Revolving
Credit Loan (a "Capitalization Workout"), provided, however, that the Master
Servicer shall not enter into a Capitalization Workout unless the Combined
Loan-to-Value Ratio of the Revolving Credit Loan prior to the Capitalization
Workout equals or exceeds 80%;
(vi) reset the due date for the Revolving Credit Loan, or any combination of the
foregoing;
if in the Master Servicer's determination such waiver, modification,
postponement or indulgence, arrangement or other action referred to above is not
materially adverse to the interests of the Securityholders or the Credit
Enhancer and is generally consistent with the Master Servicer's policies with
respect to revolving credit loans similar to Revolving Credit Loans; provided,
however, that the Master Servicer may not, except in the case of an extension of
the period during which a Draw may be made by the Mortgagor, pursuant to this
Section 3.02, modify or permit any Subservicer to modify any Revolving Credit
Loan (including without limitation any modification that would change the Loan
Rate, forgive the payment of any principal or interest (unless in connection
with the liquidation of the related Revolving Credit Loan), capitalize any
arrearage for the related Revolving Credit Loan or extend the final maturity
date of such Revolving Credit Loan) unless such Revolving Credit Loan is in
default or, in the judgment of the Master Servicer, such default is reasonably
foreseeable. Notwithstanding the foregoing, the final maturity date of such
Revolving Credit Loans will not be extended beyond the Final Scheduled Payment
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Date. The general terms of any waiver, modification, postponement or indulgence
with respect to any of the Revolving Credit Loans will be included in the
Servicing Certificate, and such Revolving Credit Loans will not be considered
"delinquent" for the purposes of the Basic Documents so long as the Mortgagor
complies with the terms of such waiver, modification, postponement or
indulgence. In addition, if a Revolving Credit Loan is in default or, in the
judgment of the Master Servicer, such default is reasonably foreseeable, the
Master Servicer may, through modification, convert such Revolving Credit Loan to
a fully amortizing closed-end loan. Notwithstanding the foregoing, the Master
Servicer in its sole discretion (i) may permit the Mortgagor (or may enter into
a modification agreement which will allow the Mortgagor) to make monthly
payments, with respect to any Billing Cycle during the related Draw Period, in a
minimum amount that will be equal to the related finance charge for such Billing
Cycle and (ii) may reduce the amount of the Credit Limit (to an amount no less
than the then current Principal Balance of such Revolving Credit Loan) in
connection with any refinancing of a senior lien pursuant to the second
paragraph of Section 3.01(a) of this Agreement.
(b) The Master Servicer shall establish a Custodial Account, which shall be an
Eligible Account in which the Master Servicer shall deposit or cause to be
deposited any amounts representing payments and collections in respect of the
Revolving Credit Loans received by it subsequent to the Cut-off Date (other than
in respect of the payments referred to in the following paragraph) within one
Business Day following receipt thereof (or otherwise on or prior to the Closing
Date), including the following payments and collections received or made by it
(without duplication):
(i) all payments of principal or interest on the Revolving Credit Loans received
by the Master Servicer from the respective Subservicer, net of any portion of
the interest thereof retained by the Subservicer as Subservicing Fees;
(ii) the aggregate Repurchase Price of the Revolving Credit Loans purchased by
the Master Servicer pursuant to Section 3.15;
(iii) Net Liquidation Proceeds net of any related Foreclosure Profit;
(iv) all proceeds of any Revolving Credit Loans repurchased by the Seller
pursuant to the Revolving Credit Loan Purchase Agreement, and all Substitution
Adjustment Amounts required to be deposited in connection with the substitution
of an Eligible Substitute Loan pursuant to the Revolving Credit Loan Purchase
Agreement;
(v) insurance proceeds, other than Net Liquidation Proceeds, resulting from any
insurance policy maintained on a Mortgaged Property; and
(vi) amounts required to be paid by the Master Servicer pursuant to Section 8.08
provided, however, that with respect to each Collection Period, the Master
Servicer shall be permitted to retain from payments in respect of interest on
the Revolving Credit Loans, the Master Servicing Fee for such Collection Period.
The foregoing requirements respecting deposits to the Custodial Account are
exclusive, it being understood that, without limiting the generality of the
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foregoing, the Master Servicer need not deposit in the Custodial Account amounts
representing Foreclosure Profits, fees (including annual fees) or late charge
penalties payable by Mortgagors (such amounts to be retained as additional
servicing compensation in accordance with Section 3.09 hereof), or amounts
received by the Master Servicer for the accounts of Mortgagors for application
towards the payment of taxes, insurance premiums, assessments and similar items.
In the event any amount not required to be deposited in the Custodial Account is
so deposited, the Master Servicer may at any time withdraw such amount from the
Custodial Account, any provision herein to the contrary notwithstanding. The
Custodial Account may contain funds that belong to one or more trust funds
created for the notes or certificates of other series and may contain other
funds respecting payments on revolving credit loans or other mortgage loans
belonging to the Master Servicer or serviced or master serviced by it on behalf
of others. Notwithstanding such commingling of funds, the Master Servicer shall
keep records that accurately reflect the funds on deposit in the Custodial
Account that have been identified by it as being attributable to the Revolving
Credit Loans and shall hold all collections in the Custodial Account to the
extent they represent collections on the Revolving Credit Loans for the benefit
of the Trust, the Securityholders and the Indenture Trustee, as their interests
may appear. The Master Servicer shall retain all Foreclosure Profits as
additional servicing compensation.
The Master Servicer may cause the institution maintaining the Custodial
Account to invest any funds in the Custodial Account in Permitted Investments
(including obligations of the Master Servicer or any of its Affiliates, if such
obligations otherwise qualify as Permitted Investments), which shall mature not
later than the Business Day preceding the next Payment Date and shall not be
sold or disposed of prior to its maturity. Except as provided above, all income
and gain realized from any such investment shall inure to the benefit of the
Master Servicer and shall be subject to its withdrawal or order from time to
time. The amount of any losses incurred in respect of the principal amount of
any such investments shall be deposited in the Custodial Account by the Master
Servicer out of its own funds immediately as realized.
(c) The Master Servicer will require each Subservicer to hold all funds
constituting collections on the Revolving Credit Loans, pending remittance
thereof to the Master Servicer, in one or more accounts meeting the requirements
of an Eligible Account, and invested in Permitted Investments.
Section 3.03 Withdrawals from the Custodial Account. The Master Servicer shall,
from time to time as provided herein, make withdrawals from the Custodial
Account of amounts on deposit therein pursuant to Section 3.02 that are
attributable to the Revolving Credit Loans for the following purposes:
(a) to deposit in the Payment Account, on the Business Day prior to each Payment
Date, an amount equal to the Interest Collections and Principal Collections
required to be distributed on such Payment Date;
(b) prior to either an Amortization Event or the Collection Period during which
the Revolving Period ends, to pay to the Seller, the amount of any Additional
Balances as and when created during the related Collection Period, provided,
that the aggregate amount so paid to the Seller in respect of Additional
Balances at any time during any Collection Period shall not exceed the amount of
Principal Collections theretofore received for such Collection Period;
<PAGE>
(c) to the extent deposited to the Custodial Account, to reimburse itself or the
related Subservicer for previously unreimbursed expenses incurred in maintaining
individual insurance policies pursuant to Section 3.04, or Liquidation Expenses
paid pursuant to Section 3.07 or otherwise reimbursable pursuant to the terms of
this Servicing Agreement (to the extent not payable pursuant to Section 3.09),
such withdrawal right being limited to amounts received on particular Revolving
Credit Loans (other than any Repurchase Price in respect thereof) which
represent late recoveries of the payments for which such advances were made, or
from related Liquidation Proceeds or the proceeds of the purchase of such
Revolving Credit Loan;
(d) to pay to itself out of each payment received on account of interest on a
Revolving Credit Loan as contemplated by Section 3.09, an amount equal to the
related Master Servicing Fee (to the extent not retained pursuant to Section
3.02), and to pay to any Subservicer any Subservicing Fees not previously
withheld by the Subservicer;
(e) to the extent deposited in the Custodial Account to pay to itself as
additional servicing compensation any interest or investment income earned on
funds deposited in the Custodial Account and Payment Account that it is entitled
to withdraw pursuant to Sections 3.02(b) and 5.01;
(f) to the extent deposited in the Custodial Account, to pay to itself as
additional servicing compensation any Foreclosure Profits (to the extent
permitted by law);
(g) to pay to itself or the Seller, with respect to any Revolving Credit Loan or
property acquired in respect thereof that has been purchased or otherwise
transferred to the Seller, the Master Servicer or other entity, all amounts
received thereon and not required to be distributed to Securityholders as of the
date on which the related Purchase Price or Repurchase Price is determined;
(h) to withdraw any other amount deposited in the Custodial Account that was not
required to be deposited therein pursuant to Section 3.02; and
(i) after the occurrence of an Amortization Event, to pay to the Seller, the
Excluded Amount for each Revolving Credit Loan.
Since, in connection with withdrawals pursuant to clauses (c), (d), (f) and (g),
the Master Servicer's entitlement thereto is limited to collections or other
recoveries on the related Revolving Credit Loan, the Master Servicer shall keep
and maintain separate accounting, on a Revolving Credit Loan by Revolving Credit
Loan basis, for the purpose of justifying any withdrawal from the Custodial
Account pursuant to such clauses. Notwithstanding any other provision of this
Servicing Agreement, the Master Servicer shall be entitled to reimburse itself
for any previously unreimbursed expenses incurred pursuant to Section 3.07 or
otherwise reimbursable pursuant to the terms of this Servicing Agreement that
the Master Servicer determines to be otherwise nonrecoverable (except with
respect to any Revolving Credit Loan as to which the Repurchase Price has been
paid), by withdrawal from the Custodial Account of amounts on deposit therein
<PAGE>
attributable to the Revolving Credit Loans on any Business Day prior to the
Payment Date succeeding the date of such determination.
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses. The
Master Servicer shall cause to be maintained for each Revolving Credit Loan
hazard insurance naming the Master Servicer or related Subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Revolving Credit Loan from time to time or (ii) the combined principal balance
owing on such Revolving Credit Loan and any mortgage loan senior to such
Revolving Credit Loan from time to time; provided, however, that such coverage
may not be less than the minimum amount required to fully compensate for any
loss or damage on a replacement cost basis. The Master Servicer shall also cause
to be maintained on property acquired upon foreclosure, or deed in lieu of
foreclosure, of any Revolving Credit Loan, fire insurance with extended coverage
in an amount which is at least equal to the amount necessary to avoid the
application of any co-insurance clause contained in the related hazard insurance
policy. Amounts collected by the Master Servicer under any such policies (other
than amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account to the extent called for by Section 3.02. In
cases in which any Mortgaged Property is located at any time during the life of
a Revolving Credit Loan in a federally designated flood area, the hazard
insurance to be maintained for the related Revolving Credit Loan shall include
flood insurance (to the extent available). All such flood insurance shall be in
amounts equal to the lesser of (i) the amount required to compensate for any
loss or damage to the Mortgaged Property on a replacement cost basis and (ii)
the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program). The
Master Servicer shall be under no obligation to require that any Mortgagor
maintain earthquake or other additional insurance and shall be under no
obligation itself to maintain any such additional insurance on property acquired
in respect of a Revolving Credit 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. If the Master Servicer shall obtain and maintain a blanket
policy consistent with its general mortgage servicing activities insuring
against hazard losses on all of the Revolving Credit Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.04, it being understood and agreed that such
policy may contain a deductible clause, in which case the Master Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with the first sentence of this Section 3.04 and
there shall have been a loss which would have been covered by such policy,
deposit in the Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause. Any such deposit by the Master
Servicer shall be made on the last Business Day of the Collection Period in the
month in which payments under any such policy would have been deposited in the
Custodial Account. In connection with its activities as servicer of the
Revolving Credit Loans, the Master Servicer agrees to present, on behalf of
itself, the Issuer and the Indenture Trustee, claims under any such blanket
policy.
Section 3.05 Modification Agreements; Release or Substitution of Lien. (a) The
Master Servicer or the related Subservicer, as the case may be, shall be
entitled to (A) execute assumption agreements, substitution agreements, and
<PAGE>
instruments of satisfaction or cancellation or of partial or full release or
discharge, or any other document contemplated by this Servicing Agreement and
other comparable instruments with respect to the Revolving Credit Loans and with
respect to the Mortgaged Properties subject to the Mortgages (and the Issuer and
the Indenture Trustee each shall promptly execute any such documents on request
of the Master Servicer) and (B) approve the granting of an easement thereon in
favor of another Person, any alteration or demolition of the related Mortgaged
Property or other similar matters, if it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner of
the related Revolving Credit Loan, that the security for, and the timely and
full collectability of, such Revolving Credit Loan would not be adversely
affected thereby. A partial release pursuant to this Section 3.05 shall be
permitted only if the Combined Loan-to-Value Ratio for such Revolving Credit
Loan after such partial release does not exceed the Combined Loan-to-Value Ratio
for such Revolving Credit Loan as of the Cut-off Date. Any fee collected by the
Master Servicer or the related Subservicer for processing such request will be
retained by the Master Servicer or such Subservicer as additional servicing
compensation.
(b) The Master Servicer may enter into an agreement with a Mortgagor to release
the lien on the Mortgaged Property relating to a Revolving Credit Loan (the
"Existing Lien"), if at the time of such agreement the Revolving Credit Loan is
current in payment of principal and interest, under any of the following
circumstances:
(i) in any case in which, simultaneously with the release of the Existing Lien,
the Mortgagor executes and delivers to the Master Servicer a Mortgage on a
substitute Mortgaged Property, provided that the Combined Loan-to-Value Ratio of
the Revolving Credit Loan (calculated based on the Appraised Value of the
substitute Mortgaged Property) is not greater than the Combined Loan-to-Value
Ratio prior to releasing the Existing Lien;
(ii) in any case in which, simultaneously with the release of the Existing Lien,
the Mortgagor executes and delivers to the Master Servicer a Mortgage on a
substitute Mortgaged Property, provided that: (A) the Combined Loan-to-Value
Ratio of the Revolving Credit Loan (calculated based on the Appraised Value of
the substitute Mortgaged Property) is not greater than the lesser of (1) 100%
and (2) 105% of the Combined Loan-to-Value Ratio prior to releasing the Existing
Lien; and (B) the Master Servicer determines that at least two appropriate
compensating factors are present (compensating factors may include, without
limitation, an increase in the Mortgagor's monthly cash flow after debt service,
the Mortgagor's debt-to-income ratio has not increased since origination, or an
increase in the Mortgagor's credit score); or
(iii) in any case in which, at the time of release of the Existing Lien, the
Mortgagor does not provide the Master Servicer with a Mortgage on a substitute
Mortgaged Property (any Revolving Credit Loan that becomes and remains unsecured
in accordance with this subsection, an "Unsecured Loan"), provided that: (A) the
current Combined Loan-to-Value Ratio is greater than or equal to 85%; (B) the
Master Servicer shall not permit the release of an Existing Lien under this
clause (iii) as to more than 100 Revolving Credit Loans in any calendar year;
(C) at no time shall the aggregate Principal Balance of Unsecured Loans exceed
2.5% of the then Pool Balance; (D) the Mortgagor agrees to an automatic debit
<PAGE>
payment plan; and (E) the Master Servicer shall provide notice to each Rating
Agency that has requested notice of such releases.
In connection with any Unsecured Loan, the Master Servicer may require the
Mortgagor to enter into an agreement under which: (i) the Loan Rate may be
increased effective until a substitute Mortgage meeting the criteria under (i)
or (ii) above is provided; or (ii) any other provision may be made which the
Master Servicer considers to be appropriate. Thereafter, the Master Servicer
shall determine in its discretion whether to accept any proposed Mortgage on any
substitute Mortgaged Property as security for the Revolving Credit Loan, and the
Master Servicer may require the Mortgagor to agree to any further conditions
which the Master Servicer considers appropriate in connection with such
substitution, which may include a reduction of the Loan Rate (but not below the
Loan Rate in effect at the Closing Date). Any Revolving Credit Loan as to which
a Mortgage on a substitute Mortgaged Property is provided in accordance with the
preceding sentence shall no longer be deemed to be an Unsecured Loan.
Section 3.06 Trust Estate; Related Documents (a) When required by the provisions
of this Servicing Agreement, the Issuer or the Indenture Trustee shall execute
instruments to release property from the terms of the Trust Agreement, Indenture
or Custodial Agreement, as applicable, or convey the Issuer's or the Indenture
Trustee's interest in the same, in a manner and under circumstances which are
not inconsistent with the provisions of this Servicing Agreement. No party
relying upon an instrument executed by the Issuer or the Indenture Trustee as
provided in this Section 3.06 shall be bound to ascertain the Issuer's or the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
(b) If from time to time the Master Servicer shall deliver to the Custodian
copies of any written assurance, assumption agreement or substitution agreement
or other similar agreement pursuant to Section 3.05, the Custodian shall check
that each of such documents purports to be an original executed copy (or a copy
of the original executed document if the original executed copy has been
submitted for recording and has not yet been returned) and, if so, shall file
such documents, and upon receipt of the original executed copy from the
applicable recording office or receipt of a copy thereof certified by the
applicable recording office shall file such originals or certified copies with
the Related Documents. If any such documents submitted by the Master Servicer do
not meet the above qualifications, such documents shall promptly be returned by
the Custodian to the Master Servicer, with a direction to the Master Servicer to
forward the correct documentation.
(c) Upon receipt of a Request for Release from the Master Servicer,
substantially in the form of Exhibit C (or an electronic request in a form
acceptable to the Custodian) to the effect that a Revolving Credit Loan has been
the subject of a final payment or a prepayment in full and the related Revolving
Credit Loan has been terminated or that substantially all Liquidation Proceeds
which have been determined by the Master Servicer in its reasonable judgment to
be finally recoverable have been recovered, and upon deposit to the Custodial
Account of such final monthly payment, prepayment in full together with accrued
and unpaid interest to the date of such payment with respect to such Revolving
Credit Loan or, if applicable, Liquidation Proceeds, the Custodian shall
promptly release the Related Documents to the Master Servicer, which the
Indenture Trustee shall execute, along with such documents as the Master
Servicer or the Mortgagor may request to evidence satisfaction and discharge of
<PAGE>
such Revolving Credit Loan, upon request of the Master Servicer. If from time to
time and as appropriate for the servicing or foreclosure of any Revolving Credit
Loan, the Master Servicer requests the Custodian to release the Related
Documents and delivers to the Custodian a trust receipt reasonably satisfactory
to the Custodian and signed by a Responsible Officer of the Master Servicer, the
Custodian shall release the Related Documents to the Master Servicer. If such
Revolving Credit Loans shall be liquidated and the Custodian receives a
certificate from the Master Servicer as provided above, then, upon request of
the Master Servicer, the Custodian shall release the trust receipt to the Master
Servicer.
Section 3.07 Realization Upon Defaulted Revolving Credit Loans; Loss Mitigation.
With respect to such of the Revolving Credit Loans as come into and continue in
default, the Master Servicer will decide whether to (i) foreclose upon the
Mortgaged Properties securing such Revolving Credit Loans, (ii) write off the
unpaid principal balance of the Revolving Credit Loans as bad debt, (iii) take a
deed in lieu of foreclosure, (iv) accept a short sale (a payoff of the Revolving
Credit Loan for an amount less than the total amount contractually owed in order
to facilitate a sale of the Mortgaged Property by the Mortgagor) or permit a
short refinancing (a payoff of the Revolving Credit Loan for an amount less than
the total amount contractually owed in order to facilitate refinancing
transactions by the Mortgagor not involving a sale of the Mortgaged Property),
(v) arrange for a repayment plan, (vi) agree to a modification in accordance
with this Servicing Agreement, or (vii) take an unsecured note, in connection
with a negotiated release of the lien of the Mortgage in order to facilitate a
settlement with the Mortgagor; in each case subject to the rights of any related
first lien holder; provided that in connection with the foregoing if the Master
Servicer has actual knowledge that any Mortgaged Property is affected by
hazardous or toxic wastes or substances and that the acquisition of such
Mortgaged Property would not be commercially reasonable, then the Master
Servicer will not cause the Issuer or the Indenture Trustee to acquire title to
such Mortgaged Property in a foreclosure or similar proceeding. In connection
with such decision, the Master Servicer shall follow such practices (including,
in the case of any default on a related senior mortgage loan, the advancing of
funds to correct such default if deemed to be appropriate by the Master
Servicer) and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and as shall be
required or permitted by the Program Guide; provided that the Master Servicer
shall not be liable in any respect hereunder if the Master Servicer is acting in
connection with any such foreclosure or attempted foreclosure which is not
completed or other conversion in a manner that is consistent with the provisions
of this Servicing Agreement. The foregoing is subject to the proviso that the
Master Servicer shall not be required to expend its own funds in connection with
any foreclosure or attempted foreclosure which is not completed or towards the
correction of any default on a related senior mortgage loan or restoration of
any property unless it shall determine that such expenditure will increase Net
Liquidation Proceeds. In the event of a determination by the Master Servicer
that any such expenditure previously made pursuant to this Section 3.07 will not
be reimbursable from Net Liquidation Proceeds, the Master Servicer shall be
entitled to reimbursement of its funds so expended pursuant to Section 3.03.
Notwithstanding any provision of this Servicing Agreement, a Revolving
Credit Loan may be deemed to be finally liquidated if substantially all amounts
expected by the Master Servicer to be received in connection with the related
defaulted Revolving Credit Loan have been received; provided, however, that any
<PAGE>
subsequent collections with respect to any such Revolving Credit Loan shall be
deposited to the Custodial Account and treated as Interest Collections. For
purposes of determining the amount of any Liquidation Proceeds or Insurance
Proceeds, or other unscheduled collections, the Master Servicer may take into
account minimal amounts of additional receipts expected to be received or any
estimated additional liquidation expenses expected to be incurred in connection
with the related defaulted Revolving Credit Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, who shall hold the same on behalf of
the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding any
such acquisition of title and cancellation of the related Revolving Credit Loan,
such Mortgaged Property shall (except as otherwise expressly provided herein) be
considered to be an outstanding Revolving Credit Loan held as an asset of the
Issuer until such time as such property shall be sold. Consistent with the
foregoing for purposes of all calculations hereunder, so long as such Mortgaged
Property shall be considered to be an outstanding Revolving Credit Loan it shall
be assumed that, notwithstanding that the indebtedness evidenced by the related
Credit Line Agreement shall have been discharged, such Credit Line Agreement in
effect at the time of any such acquisition of title before any adjustment
thereto by reason of any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period will remain in effect.
Any proceeds from the purchase or repurchase of any Revolving Credit
Loan pursuant to the terms of this Servicing Agreement (including without
limitation Sections 2.03 and 3.15) will be applied in the following order of
priority: first, to the Master Servicer or the related Subservicer, all
Servicing Fees payable therefrom to the Payment Date on which such amounts are
to be deposited in the Payment Account; second, as Interest Collections, accrued
and unpaid interest on the related Revolving Credit Loan, at the Net Loan Rate
to the Payment Date on which such amounts are to be deposited in the Payment
Account; and third, as Principal Collections, as a recovery of principal on the
Revolving Credit Loan.
Liquidation Proceeds with respect to a Liquidated Revolving Credit Loan
will be applied in the following order of priority: first, to reimburse the
Master Servicer or the related Subservicer in accordance with this Section 3.07
for any Liquidation Expenses; second, to the Master Servicer or the related
Subservicer, all unpaid Servicing Fees through the date of receipt of the final
Liquidation Proceeds; third, as Principal Collections, as a recovery of
principal on the Revolving Credit Loan, up to an amount equal to the Loan
Balance of the related Revolving Credit Loan immediately prior to the date it
became a Liquidated Revolving Credit Loan; fourth, as Interest Collections,
accrued and unpaid interest on the related Revolving Credit Loan at the Net Loan
Rate through the date of receipt of the final Liquidation Proceeds; and fifth,
to Foreclosure Profits.
Proceeds and other recoveries from a Revolving Credit Loan after it
becomes a Liquidated Revolving Credit Loan will be applied in the following
order of priority: first, to reimburse the Master Servicer or the related
Subservicer in accordance with this Section 3.07 for any expenses previously
<PAGE>
unreimbursed from Liquidation Proceeds or otherwise; second, to the Master
Servicer or the related Subservicer, all unpaid Servicing Fees payable thereto
through the date of receipt of the proceeds previously unreimbursed from
Liquidation Proceeds or otherwise; third, as Interest Collections, up to an
amount equal to the sum of (a) the Loan Balance of the related Revolving Credit
Loan immediately prior to the date it became a Liquidated Revolving Credit Loan,
less any Net Liquidation Proceeds previously received with respect to such
Revolving Credit Loan and applied as a recovery of principal, and (b) accrued
and unpaid interest on the related Revolving Credit Loan at the Net Loan Rate
through the date of receipt of the proceeds; and fourth, to Foreclosure Profits.
Section 3.08 Issuer and Indenture Trustee to Cooperate. On or before each
Payment Date, the Master Servicer will notify the Indenture Trustee or the
Custodian, with a copy to the Issuer, of the termination of or the payment in
full and the termination of any Revolving Credit Loan during the preceding
Collection Period. Upon receipt of payment in full, the Master Servicer is
authorized to execute, pursuant to the authorization contained in Section 3.01,
if the assignments of Mortgage have been recorded to the extent required under
the Revolving Credit Loan Purchase Agreement, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Master Servicer if required by applicable law and be delivered
to the Person entitled thereto. It is understood and agreed that any expenses
incurred in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in the Custodial Account. From time to time
and as appropriate for the servicing or foreclosure of any Revolving Credit
Loan, the Indenture Trustee or the Custodian shall, upon request of the Master
Servicer and delivery to the Indenture Trustee or Custodian, with a copy to the
Issuer, of a Request for Release, in the form annexed hereto as Exhibit C (or an
electronic request, in a form acceptable to the Custodian), signed by a
Servicing Officer, release or cause to be released the related Mortgage File to
the Master Servicer and the Issuer or Indenture Trustee shall promptly execute
such documents, in the forms provided by the Master Servicer, as shall be
necessary for the prosecution of any such proceedings or the taking of other
servicing actions. Such trust receipt shall obligate the Master Servicer to
return the Mortgage File to the Indenture Trustee or the Custodian (as specified
in such receipt) when the need therefor by the Master Servicer no longer exists
unless the Revolving Credit Loan shall be liquidated, in which case, upon
receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the trust receipt shall be released to the Master Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Revolving Credit Loan that is in default following recordation of the
assignments of Mortgage in accordance with the provisions of the Revolving
Credit Loan Purchase Agreement, the Indenture Trustee or the Issuer shall, if so
requested in writing by the Master Servicer, promptly execute an appropriate
assignment in the form provided by the Master Servicer to assign such Revolving
Credit Loan for the purpose of collection to the Master Servicer (any such
assignment shall unambiguously indicate that the assignment is for the purpose
of collection only), and, upon such assignment, such assignee for collection
will thereupon bring all required actions in its own name and otherwise enforce
the terms of the Revolving Credit Loan and deposit or credit the Net Liquidation
Proceeds, exclusive of Foreclosure Profits, received with respect thereto in the
Custodial Account. In the event that all delinquent payments due under any such
Revolving Credit Loan are paid by the Mortgagor and any other defaults are
cured, then the assignee for collection shall promptly reassign such Revolving
Credit Loan to the Indenture Trustee and return all Related Documents to the
place where the related Mortgage File was being maintained.
<PAGE>
In connection with the Issuer's obligation to cooperate as provided in
this Section 3.08 and all other provisions of this Servicing Agreement requiring
the Issuer to authorize or permit any actions to be taken with respect to the
Revolving Credit Loans, the Indenture Trustee, as pledgee of the Revolving
Credit Loans and as assignee of record of the Revolving Credit Loans on behalf
of the Issuer pursuant to Section 3.13 of the Indenture, expressly agrees, on
behalf of the Issuer, to take all such actions on behalf of the Issuer and to
promptly execute and return all instruments reasonably required by the Master
Servicer in connection therewith; provided, that if the Master Servicer shall
request a signature of the Indenture Trustee, on behalf of the Issuer, the
Master Servicer will deliver to the Indenture Trustee an Officer's Certificate
stating that such signature is necessary or appropriate to enable the Master
Servicer to carry out its servicing and administrative duties under this
Servicing Agreement.
Section 3.09 Servicing Compensation; Payment of Certain Expenses by Master
Servicer. The Master Servicer shall be entitled to receive the Master Servicing
Fee in accordance with Sections 3.02 and 3.03 as compensation for its services
in connection with servicing the Revolving Credit Loans. Moreover, additional
servicing compensation in the form of late payment charges and other receipts
not required to be deposited in the Custodial Account as specified in Section
3.02 shall be retained by the Master Servicer. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder (including payment of all other fees and expenses not expressly stated
hereunder to be for the account of the Securityholders, including, without
limitation, the fees and expenses of the Owner Trustee, Indenture Trustee and
any Custodian) and shall not be entitled to reimbursement therefor.
Section 3.10 Annual Statement as to Compliance. (a) The Master Servicer will
deliver to the Issuer, each Underwriter and the Indenture Trustee, with a copy
to the Credit Enhancer, on or before March 31 of each year, beginning March 31,
2001, an Officer's Certificate stating that (i) a review of the activities of
the Master Servicer during the preceding calendar year and of its performance
under servicing agreements, including this Servicing Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has complied in all
material respects with the minimum servicing standards set forth in the Uniform
Single Attestation Program for Mortgage Bankers and has fulfilled all of its
material obligations in all material respects throughout such year, or, if there
has been material noncompliance with such servicing standards or a default in
the fulfillment in all material respects of any such obligation relating to this
Servicing Agreement, such statement shall include a description of such
noncompliance or specify each such default, as the case may be, known to such
officer and the nature and status thereof.
(b) The Master Servicer shall deliver to the Issuer and the Indenture Trustee,
with a copy to the Credit Enhancer, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice by means of an Officer's Certificate of any event which with the giving
of notice or the lapse of time or both, would become a Servicing Default.
Section 3.11 Annual Servicing Report. On or before March 31 of each year,
beginning March 31, 2001, the Master Servicer at its expense shall cause a firm
of nationally recognized independent public accountants (who may also render
<PAGE>
other services to the Master Servicer) to furnish a report to the Issuer, the
Indenture Trustee, the Depositor, each Underwriter, the Credit Enhancer and each
Rating Agency stating its opinion that, on the basis of an examination conducted
by such firm substantially in accordance with standards established by the
American Institute of Certified Public Accountants, the assertions made pursuant
to Section 3.10 regarding compliance with the minimum servicing standards set
forth in the Uniform Single Attestation Program for Mortgage Bankers during the
preceding calendar year are fairly stated in all material respects, subject to
such exceptions and other qualifications that, in the opinion of such firm, such
accounting standards require it to report. In rendering such statement, such
firm may rely, as to matters relating to the direct servicing of revolving
credit loans by Subservicers, upon comparable statements for examinations
conducted by independent public accountants substantially in accordance with
standards established by the American Institute of Certified Public Accountants
(rendered within one year of such statement) with respect to such Subservicers.
Section 3.12 Access to Certain Documentation and Information Regarding the
Revolving Credit Loans. Whenever required by statute or regulation, the Master
Servicer shall provide to the Credit Enhancer, any Securityholder upon
reasonable request (or a regulator for a Securityholder) or the Indenture
Trustee, reasonable access to the documentation regarding the Revolving Credit
Loans such access being afforded without charge but only upon reasonable request
and during normal business hours at the offices of the Master Servicer. Nothing
in this Section 3.12 shall derogate from the obligation of the Master Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Mortgagors and the failure of the Master Servicer to provide access as
provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.
Section 3.13 Maintenance of Certain Servicing Insurance Policies. The Master
Servicer shall during the term of its service as servicer maintain in force (i)
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as master servicer hereunder and (ii) a fidelity
bond in respect of its officers, employees or agents. Each such policy or
policies and bond shall be at least equal to the coverage that would be required
by Fannie Mae or Freddie Mac, whichever is greater, for Persons performing
servicing for revolving credit loans purchased by such entity.
Section 3.14 Information Required by the Internal Revenue Service and Reports of
Foreclosures and Abandonments of Mortgaged Property. The Master Servicer shall
prepare and deliver all federal and state information reports with respect to
the Revolving Credit Loans when and as required by all applicable state and
federal income tax laws. In particular, with respect to the requirement under
Section 6050J of the Code to the effect that the Master Servicer or Subservicer
shall make reports of foreclosures and abandonments of any mortgaged property
for each year beginning in 2000, the Master Servicer or Subservicer shall file
reports relating to each instance occurring during the previous calendar year in
which the Master Servicer (i) on behalf of the Issuer, acquires an interest in
any Mortgaged Property through foreclosure or other comparable conversion in
full or partial satisfaction of a Revolving Credit Loan, or (ii) knows or has
reason to know that any Mortgaged Property has been abandoned. The reports from
the Master Servicer or Subservicer shall be in form and substance sufficient to
meet the reporting requirements imposed by Section 6050J and Section 6050H
(reports relating to mortgage interest received) of the Code.
<PAGE>
Section 3.15 Optional Repurchase of Defaulted Revolving Credit Loans.
(a) Notwithstanding any provision in Section 3.07 to the contrary, the Master
Servicer, at its option and in its sole discretion, may repurchase any Revolving
Credit Loan delinquent in payment for a period of 60 days or longer for a price
equal to the Repurchase Price.
(b) Subject to the conditions set forth below, the Servicer, upon receipt of
written notice and direction from the Issuer, shall cause the retransfer of
Revolving Credit Loans from the Trust to the Issuer as of the close of business
on a Payment Date (the "Transfer Date"). On the fifth Business Day (the
"Transfer Notice Date") prior to the Transfer Date designated in such notice,
the Servicer shall give the Indenture Trustee, the Rating Agencies and the
Credit Enhancer a notice of the proposed retransfer that contains a list of the
Revolving Credit Loans to be retransferred. Such retransfers of Revolving Credit
Loans shall be permitted upon satisfaction of the following conditions:
(i) No Amortization Event has occurred;
(ii) On the Transfer Date, the Outstanding Reserve Amount (after giving effect
to the removal from the Trust of the Revolving Credit Loans proposed to be
transferred) will equal or exceed Reserve Amount Target;
(iii) On or before the Transfer Date, the Servicer shall have delivered to the
Indenture Trustee a revised Revolving Credit Loan Schedule showing that the
Revolving Credit Loans transferred to the Certificateholders are no longer owned
by the Trust;
(iv) The Servicer shall represent and warrant that no selection procedures
reasonably believed by the Servicer to be adverse to the interests of the
Noteholders or the Credit Enhancer were utilized in the selection of the
Revolving Credit Loans to be removed from the Trust and the Servicer shall have
received the consent of the Credit Enhancer as to the selection of the
particular Revolving Credit Loans to be removed; and
(v) The Servicer shall have delivered to the Indenture Trustee and the Credit
Enhancer an officer's certificate certifying that the items set forth in
subparagraphs (i) through (iv), inclusive, have been performed or are true and
correct, as the case may be. The Indenture Trustee may conclusively rely on such
officer's certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
The Servicer shall not be permitted to effect the retransfer of any
Revolving Credit Loan except under the conditions specified above. Upon
receiving the requisite notice and direction from the Issuer, the Servicer shall
perform in a timely manner those acts required of it, as specified above. Upon
satisfaction of the above conditions, on the Transfer Date the Indenture Trustee
shall deliver, or cause to be delivered, to the Issuer a written itemization of
each Revolving Credit Loan being transferred, together with the Revolving Credit
File for each such Revolving Credit Loan, and the Indenture Trustee shall
execute and deliver to the Issuer or its designee such other documents prepared
by the Servicer as shall be reasonably necessary to transfer such Revolving
Credit Loans to the Certificateholders. Any such transfer of the Trust's right,
title and interest in and to Revolving Credit Loans shall be without recourse,
representation or warranty by or of the Indenture Trustee or the Trust to the
Issuer or its designee.
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ARTICLE IV
SERVICING CERTIFICATE
Section 4.01 Statements to Securityholders. (a) With respect to each Payment
Date, on the Business Day following the related Determination Date, the Master
Servicer shall forward to the Indenture Trustee and the Indenture Trustee
pursuant to Section 3.26 of the Indenture shall forward or cause to be forwarded
by mail to each Certificateholder, Noteholder, the Credit Enhancer, the
Depositor, the Owner Trustee, the Certificate Paying Agent and each Rating
Agency, a statement setting forth the following information (the "Servicing
Certificate") as to the Notes and Certificates, to the extent applicable:
(a) the aggregate amount of (a) Interest Collections, (b) Principal Collections
and (c) Substitution Adjustment Amounts;
(b) the amount of such distribution as principal to the Noteholders;
(c) the amount of such distribution as interest to the Noteholders, separately
stating the portion thereof in respect of overdue accrued interest;
(d) the amount of any Credit Enhancement Draw Amount, if any, for such Payment
Date and the aggregate amount of prior draws thereunder not yet reimbursed; (e)
the amount of such distribution as principal and interest to the
Certificateholders of the Certificates, separately stating the portion thereof
which resulted in a reduction of the Certificate Principal Balance thereof;
(f) the aggregate Loan Balance of the Revolving Credit Loans as of the end of
the preceding Collection Period;
(g) the aggregate amount of Additional Balances created during the previous
Collection Period conveyed to the Issuer;
(h) the number and aggregate Loan Balances of Revolving Credit Loans (a) as to
which the Minimum Monthly Payment is Delinquent for 30-59 days, 60-89 days and
90 or more days, respectively, (b) that are foreclosed and (c) that have become
REO, in each case as of the end of the related Collection Period; provided,
however, that such information will not be provided on the statements relating
to the first Payment Date;
(i) the weighted average Net Loan Rate for the related Collection Period;
(j) the aggregate Liquidation Loss Amounts with respect to the related
Collection Period, the amount of any Liquidation Loss Distribution Amounts with
<PAGE>
respect to the Notes, and the aggregate of the Liquidation Loss Amounts from all
Collection Periods to date expressed as dollars and as a percentage of the
aggregate Cut-off Date Loan Balance;
(k) the aggregate Excess Loss Amounts with respect to the related Collection
Period and the aggregate of the Excess Loss Amounts from all Collection Periods
to date;
(l) the aggregate Special Hazard Losses, Fraud Losses, Bankruptcy Losses and
losses caused by or resulting from an Extraordinary Event with respect to the
related Collection Period and the aggregate of each of such losses from all
Collection Periods to date;
(m) the Note Balance of each Class of Notes and the Certificate Principal
Balance of the Certificates after giving effect to the distribution of principal
on such Payment Date;
(n) the aggregate Servicing Fees for the related Collection Period and the
aggregate amount of Draws for the related Collection Period;
(o) the number and amount of any increases in the Credit Limits of the Revolving
Credit Loans during the related Collection Period;
(p) the Outstanding Reserve Amount, the Undercollateralization Amount, the
Special Hazard Amount, the Fraud Loss Amount, the Bankruptcy Loss Amount and the
Reserve Amount Target immediately following such Payment Date; and
(q) (1) the number and principal amount of release agreements pursuant to
Section 3.05(b) entered into during the calendar year and since the Closing
Date, stated separately, for the Revolving Credit Loans and, the aggregate
outstanding principal amount of such release agreements expressed as a
percentage of the Pool Balance with information provided separately with respect
to all Unsecured Loans and (2) the number and principal amount of Capitalization
Workouts pursuant to Section 3.02(a)(v) entered into during the calendar year
and since the Closing Date, stated separately for the Revolving Credit Loans,
and the aggregate outstanding amount of the Capitalization Workouts expressed as
a percentage of the Pool Balance.
In the case of information furnished pursuant to clauses (ii) and (iii)
above, the amounts shall be expressed as an aggregate dollar amount per Variable
Funding Note, Term Note or Certificate, as applicable, with a $1,000
denomination.
In addition, the Master Servicer shall forward to the Indenture Trustee
any other information reasonably requested by the Indenture Trustee necessary to
make distributions pursuant to Section 3.05 of the Indenture. Prior to the close
of business on the Business Day next succeeding each Determination Date, the
Master Servicer shall furnish a written statement to the Certificate Paying
Agent and the Indenture Trustee setting forth the aggregate amounts required to
be withdrawn from the Custodial Account and deposited into the Payment Account
on the Business Day preceding the related Payment Date pursuant to Section 3.03.
The determination by the Master Servicer of such amounts shall, in the absence
of obvious error, be presumptively deemed to be correct for all purposes
hereunder and the Owner Trustee and Indenture Trustee shall be protected in
<PAGE>
relying upon the same without any independent check or verification. In
addition, upon the Issuer's written request, the Master Servicer shall promptly
furnish information reasonably requested by the Issuer that is reasonably
available to the Master Servicer to enable the Issuer to perform its federal and
state income tax reporting obligations.
Section 4.02 Tax Reporting. So long as Residential Funding Corporation or any
Affiliate thereof owns 100% of the Certificates, then no separate federal and
state income tax returns and information returns or reports will be filed with
respect to the Issuer, and the Issuer will be treated as an entity wholly owned
by Residential Funding Corporation or an affiliate thereof.
ARTICLE V
PAYMENT ACCOUNT
Section 5.01 Payment Account. The Indenture Trustee shall establish and maintain
a Payment Account titled "The Chase Manhattan Bank, as Indenture Trustee, for
the benefit of the Securityholders, the Certificate Paying Agent and the Credit
Enhancer pursuant to the Indenture, dated as of September 26, 2000, between Home
Equity Loan Trust 2000-HS1 and The Chase Manhattan Bank". The Payment Account
shall be an Eligible Account. On each Payment Date, amounts on deposit in the
Payment Account will be distributed by the Indenture Trustee in accordance with
Section 3.05 of the Indenture. The Indenture Trustee shall, upon written request
from the Master Servicer, invest or cause the institution maintaining the
Payment Account to invest the funds in the Payment Account in Permitted
Investments designated in the name of the Indenture Trustee, which shall mature
not later than the Business Day next preceding the Payment Date next following
the date of such investment (except that (i) any investment in the institution
with which the Payment Account is maintained may mature on such Payment Date and
(ii) any other investment may mature on such Payment Date if the Indenture
Trustee shall advance funds on such Payment Date to the Payment Account in the
amount payable on such investment on such Payment Date, pending receipt thereof
to the extent necessary to make distributions on the Securities) and shall not
be sold or disposed of prior to maturity. All income and gain realized from any
such investment shall be for the benefit of the Master Servicer and shall be
subject to its withdrawal or order from time to time. The amount of any losses
incurred in respect of any such investments shall be deposited in the Payment
Account by the Master Servicer out of its own funds immediately as realized.
ARTICLE VI
THE MASTER SERVICER
Section 6.01 Liability of the Master Servicer. The Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Master Servicer herein.
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Master Servicer. Any corporation into which the Master Servicer may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Master
Servicer shall be a party, or any corporation succeeding to the business of the
Master Servicer, shall be the successor of the Master 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.
<PAGE>
The Master Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; provided, that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
revolving credit loans, is reasonably satisfactory to the Indenture Trustee (as
pledgee of the Revolving Credit Loans), the Issuer and the Credit Enhancer, is
willing to service the Revolving Credit Loans and executes and delivers to the
Indenture Trustee and the Issuer an agreement, in form and substance reasonably
satisfactory to the Credit Enhancer, the Indenture Trustee and the Issuer, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Master Servicer under this Servicing Agreement; provided, further, that each
Rating Agency's rating of the Securities in effect immediately prior to such
assignment and delegation will not be qualified, reduced, or withdrawn as a
result of such assignment and delegation (as evidenced by a letter to such
effect from each Rating Agency), if determined without regard to the Credit
Enhancement Instrument; and provided, further, that the Owner Trustee receives
an Opinion of Counsel to the effect that such assignment or delegation shall not
cause the Trust to be treated as a corporation for federal or state income tax
purposes.
Section 6.03 Limitation on Liability of the Master Servicer and Others. Neither
the Master Servicer nor any of the directors or officers or employees or agents
of the Master Servicer shall be under any liability to the Issuer, the Owner
Trustee, the Indenture Trustee or the Securityholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect
the Master Servicer or any such Person against any liability which would
otherwise be imposed by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. The Master Servicer
and any director or officer or employee or agent of the Master 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 Master
Servicer and any director or officer or employee or agent of the Master Servicer
shall be indemnified by the Issuer and held harmless against any loss, liability
or expense incurred in connection with any legal action relating to this
Servicing Agreement or the Securities, including any amount paid to the Owner
Trustee or the Indenture Trustee pursuant to Section 6.06(b), other than any
loss, liability or expense incurred by reason of its willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard of its obligations and duties hereunder. The
Master Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its duties to service the
Revolving Credit Loans in accordance with this Servicing Agreement, and which in
its opinion may involve it in any expense or liability; provided, however, that
the Master Servicer may in its sole discretion undertake any such action which
it may deem necessary or desirable in respect of this Servicing Agreement, and
the rights and duties of the parties hereto and the interests of the
Securityholders. In such event, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Issuer, and the Master Servicer shall be entitled to be
<PAGE>
reimbursed therefor. The Master Servicer's right to indemnity or reimbursement
pursuant to this Section 6.03 shall survive any resignation or termination of
the Master Servicer pursuant to Section 6.04 or 7.01 with respect to any losses,
expenses, costs or liabilities arising prior to such resignation or termination
(or arising from events that occurred prior to such resignation or termination).
Section 6.04 Master Servicer Not to Resign. Subject to the provisions of Section
6.02, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Master Servicer so causing such a conflict being of a type and
nature carried on by the Master Servicer or its subsidiaries or Affiliates at
the date of this Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Master Servicer has proposed a successor servicer to the
Issuer and the Indenture Trustee in writing and such proposed successor servicer
is reasonably acceptable to the Issuer, the Indenture Trustee and the Credit
Enhancer; (b) each Rating Agency shall have delivered a letter to the Issuer,
the Credit Enhancer and the Indenture Trustee prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Master Servicer hereunder will not result in the reduction or
withdrawal of the then current rating of the Securities, if determined without
regard to the Credit Enhancement Instrument; and (c) such proposed successor
servicer is reasonably acceptable to the Credit Enhancer, as evidenced by a
letter to the Issuer and the Indenture Trustee; provided, however, that no such
resignation by the Master Servicer shall become effective until such successor
servicer or, in the case of (i) above, the Indenture Trustee, as pledgee of the
Revolving Credit Loans, shall have assumed the Master Servicer's
responsibilities and obligations hereunder or the Indenture Trustee, as pledgee
of the Revolving Credit Loans, shall have designated a successor servicer in
accordance with Section 7.02. Any such resignation shall not relieve the Master
Servicer of responsibility for any of the obligations specified in Sections 7.01
and 7.02 as obligations that survive the resignation or termination of the
Master Servicer. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Indenture Trustee and the Credit Enhancer.
Section 6.05 Delegation of Duties. In the ordinary course of business, the
Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 6.04.
Section 6.06 Master Servicer to Pay Indenture Trustee's and Owner Trustee's Fees
and Expenses; Indemnification. (a) The Master Servicer covenants and agrees to
pay to the Owner Trustee, the Indenture Trustee and any co-trustee of the
Indenture Trustee or the Owner Trustee from time to time, and the Owner Trustee,
the Indenture Trustee and any such co-trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
each of them in the execution of the trusts created under the Trust Agreement
and the Indenture and in the exercise and performance of any of the powers and
duties under the Trust Agreement or the Indenture, as the case may be, of the
Owner Trustee, the Indenture Trustee and any co-trustee, and the Master Servicer
will pay or reimburse the Indenture Trustee and any co-trustee upon request for
all reasonable expenses, disbursements and advances incurred or made by the
<PAGE>
Indenture Trustee or any co-trustee in accordance with any of the provisions of
this Servicing Agreement except any such expense, disbursement or advance as may
arise from its negligence, willful misfeasance or bad faith.
(b) The Master Servicer agrees to indemnify the Indenture Trustee and the Owner
Trustee for, and to hold the Indenture Trustee and the Owner Trustee, as the
case may be, harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Indenture Trustee
or the Owner Trustee, as the case may be, arising out of, or in connection with,
the acceptance and administration of the Issuer and the assets thereof,
including the costs and expenses (including reasonable legal fees and expenses)
of defending the Indenture Trustee or the Owner Trustee, as the case may be,
against any claim in connection with the exercise or performance of any of its
powers or duties under any Basic Document, provided that:
(i) with respect to any such claim, the Indenture Trustee or Owner Trustee, as
the case may be, shall have given the Master Servicer written notice thereof
promptly after the Indenture Trustee or Owner Trustee, as the case may be, shall
have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Issuer, the Indenture
Trustee or Owner Trustee, as the case may be, shall cooperate and consult fully
with the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Servicing Agreement to the contrary, the
Master Servicer shall not be liable for settlement of any claim by the Indenture
Trustee or the Owner Trustee, as the case may be, entered into without the prior
consent of the Master Servicer.
No termination of this Servicing Agreement shall affect the obligations
created by this Section 6.06 of the Master Servicer to indemnify the Indenture
Trustee and the Owner Trustee under the conditions and to the extent set forth
herein.
Notwithstanding the foregoing, the indemnification provided by the
Master Servicer in this Section 6.06(b) shall not pertain to any loss, liability
or expense of the Indenture Trustee or the Owner Trustee, including the costs
and expenses of defending itself against any claim, incurred in connection with
any actions taken by the Indenture Trustee or the Owner Trustee at the direction
of the Noteholders or Certificateholders, as the case may be, pursuant to the
terms of this Servicing Agreement.
ARTICLE VII
DEFAULT
Section 7.01 Servicing Default. If any one of the following events ("Servicing
Default") shall occur and be continuing:
<PAGE>
(a) Any failure by the Master Servicer to deposit in the Custodial Account or
Payment Account any deposit required to be made under the terms of this
Servicing Agreement which continues unremedied for a period of five Business
Days after the date upon which written notice of such failure shall have been
given to the Master Servicer by the Issuer or the Indenture Trustee, or to the
Master Servicer, the Issuer and the Indenture Trustee by the Credit Enhancer; or
(b) Failure on the part of the Master Servicer duly to observe or perform in any
material respect any other covenants or agreements of the Master Servicer set
forth in the Securities or in this Servicing Agreement, which failure, in each
case, materially and adversely affects the interests of Securityholders or the
Credit Enhancer and which continues unremedied for a period of 45 days after the
date on which written notice of such failure, requiring the same to be remedied,
and stating that such notice is a "Notice of Default" hereunder, shall have been
given to the Master Servicer by the Issuer or the Indenture Trustee, or to the
Master Servicer, the Issuer and the Indenture Trustee by the Credit Enhancer; or
(c) The entry against the Master Servicer of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or
(d) The Master Servicer shall voluntarily go into liquidation, consent to the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or of or relating to
all or substantially all of its property, or a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, 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 Master Servicer and such decree or order shall
have remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations,
then, and in every such case, so long as a Servicing Default shall not have been
remedied by the Master Servicer, either the Issuer or the Indenture Trustee,
with the consent of the Credit Enhancer, or the Credit Enhancer, by notice then
given in writing to the Master Servicer (and to the Issuer and the Indenture
Trustee if given by the Credit Enhancer) may terminate all of the rights and
obligations of the Master Servicer as servicer under this Servicing Agreement
other than its right to receive servicing compensation and expenses for
servicing the Revolving Credit Loans hereunder during any period prior to the
date of such termination and the Issuer or the Indenture Trustee, with the
consent of the Credit Enhancer, or the Credit Enhancer may exercise any and all
other remedies available at law or equity. Any such notice to the Master
Servicer shall also be given to each Rating Agency, the Credit Enhancer and the
Issuer. On or after the receipt by the Master Servicer of such written notice,
all authority and power of the Master Servicer under this Servicing Agreement,
whether with respect to the Securities or the Revolving Credit Loans or
otherwise, shall pass to and be vested in the Indenture Trustee as pledgee of
the Revolving Credit Loans, pursuant to and under this Section 7.01; and,
without limitation, the Indenture Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
<PAGE>
otherwise, any and all documents and other instruments, and to 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 of each
Revolving Credit Loan and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the transfer to the Indenture Trustee for the administration
by it of all cash amounts relating to the Revolving Credit Loans that shall at
the time be held by the Master Servicer and to be deposited by it in the
Custodial Account, or that have been deposited by the Master Servicer in the
Custodial Account or thereafter received by the Master Servicer with respect to
the Revolving Credit Loans. All reasonable costs and expenses (including, but
not limited to, attorneys' fees) incurred in connection with amending this
Servicing Agreement to reflect such succession as Master Servicer pursuant to
this Section 7.01 shall be paid by the predecessor Master Servicer (or if the
predecessor Master Servicer is the Indenture Trustee, the initial Master
Servicer) upon presentation of reasonable documentation of such costs and
expenses.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a payment on a Revolving Credit Loan which was due prior to the
notice terminating the Master Servicer's rights and obligations hereunder and
received after such notice, that portion to which the Master Servicer would have
been entitled pursuant to Sections 3.03 and 3.09 as well as its Master Servicing
Fee in respect thereof, and any other amounts payable to the Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 7.01(a) or under Section 7.01(b) after the applicable grace
periods specified in such Sections, shall not constitute a Servicing Default if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Master Servicer and such delay or failure was caused by an act
of God or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The preceding sentence shall not relieve
the Master Servicer from using reasonable efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Servicing
Agreement and the Master Servicer shall provide the Indenture Trustee, the
Credit Enhancer and the Securityholders with notice of such failure or delay by
it, together with a description of its efforts to so perform its obligations.
The Master Servicer shall immediately notify the Indenture Trustee, the Credit
Enhancer and the Owner Trustee in writing of any Servicing Default.
Section 7.02 Indenture Trustee to Act; Appointment of Successor. (a) On and
after the time the Master Servicer receives a notice of termination pursuant to
Section 7.01 or sends a notice pursuant to Section 6.04, the Indenture Trustee
as pledgee of the Revolving Credit Loans shall be the successor in all respects
to the Master Servicer in its capacity as servicer under this Servicing
Agreement and the transactions set forth or provided for herein and shall be
<PAGE>
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms and provisions hereof. Nothing in
this Servicing Agreement or in the Trust Agreement shall be construed to permit
or require the Indenture Trustee to (i) succeed to the responsibilities, duties
and liabilities of the initial Master Servicer in its capacity as Seller under
the Revolving Credit Loan Purchase Agreement, (ii) be responsible or accountable
for any act or omission of the Master Servicer prior to the issuance of a notice
of termination hereunder, (iii) require or obligate the Indenture Trustee, in
its capacity as successor Master Servicer, to purchase, repurchase or substitute
any Revolving Credit Loan, (iv) fund any Additional Balances with respect to any
Revolving Credit Loan, (v) fund any losses on any Permitted Investment directed
by any other Master Servicer, or (vi) be responsible for the representations and
warranties of the Master Servicer. As compensation therefor, the Indenture
Trustee shall be entitled to such compensation as the Master Servicer would have
been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Indenture Trustee is unwilling to act as
successor Master Servicer, or (ii) if the Indenture Trustee is legally unable so
to act, the Indenture Trustee as pledgee of the Revolving Credit Loans may (in
the situation described in clause (i)) or shall (in the situation described in
clause (ii)) appoint or petition a court of competent jurisdiction to appoint
any established housing and home finance institution, bank or other mortgage
loan or home equity loan servicer having a net worth of not less than
$10,000,000 as the successor to the Master Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder; provided, that any such successor Master Servicer shall be
acceptable to the Credit Enhancer, as evidenced by the Credit Enhancer's prior
written consent which consent shall not be unreasonably withheld and provided
further that the appointment of any such successor Master Servicer will not
result in the qualification, reduction or withdrawal of the ratings assigned to
the Securities by the Rating Agencies, if determined without regard to the
Credit Enhancement Instrument. Pending appointment of a successor to the Master
Servicer here under, unless the Indenture Trustee is prohibited by law from so
acting, the Indenture Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the successor
shall be entitled to receive compensation out of payments on Revolving Credit
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.09 (or such lesser compensation as
the Indenture Trustee and such successor shall agree). The appointment of a
successor Master Servicer shall not affect any liability of the predecessor
Master Servicer which may have arisen under this Servicing Agreement prior to
its termination as Master Servicer (including, without limitation, the
obligation to purchase Revolving Credit Loans pursuant to Section 3.01, to pay
any deductible under an insurance policy pursuant to Section 3.04 or to
indemnify the Indenture Trustee pursuant to Section 6.06), nor shall any
successor Master Servicer be liable for any acts or omissions of the predecessor
Master Servicer or for any breach by such Master Servicer of any of its
representations or warranties contained herein or in any related document or
agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Servicing Agreement, as shall be necessary to effectuate
any such succession.
(b) Any successor, including the Indenture Trustee, to the Master Servicer as
servicer shall during the term of its service as servicer (i) continue to
service and administer the Revolving Credit Loans for the benefit of the
Securityholders, (ii) maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master
<PAGE>
Servicer hereunder and a fidelity bond in respect of its officers, employees and
agents to the same extent as the Master Servicer is so required pursuant to
Section 3.13 and (iii) be bound by the terms of the Insurance Agreement.
(c) Any successor Master Servicer, including the Indenture Trustee, shall not be
deemed in default or to have breached its duties hereunder if the predecessor
Master Servicer shall fail to deliver any required deposit to the Custodial
Account or otherwise cooperate with any required servicing transfer or
succession hereunder.
Section 7.03 Notification to Securityholders. Upon any termination of or
appointment of a successor to the Master Servicer pursuant to this Article VII
or Section 6.04, the Indenture Trustee shall give prompt written notice thereof
to the Securityholders, the Credit Enhancer, the Issuer and each Rating Agency.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment. This Servicing Agreement may be amended from time to
time by the parties hereto, provided that any amendment be accompanied by a
letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Securities, if
determined without regard to the Credit Enhancement Instrument, and the consent
of the Credit Enhancer and the Indenture Trustee.
Section 8.02 GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 8.03 Notices. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
at or mailed by certified mail, return receipt requested, to (a) in the case of
the Master Servicer, 10 Universal City Plaza, Suite 2100, Universal City,
California 91608, Attention: Director - Bond Administration, (b) in the case of
the Credit Enhancer, Ambac Assurance Corporation, One State Street Plaza, 19th
Floor, New York, New York 10004, Attention: Consumer Asset-Backed Securities
Group, (c) in the case of Standard & Poor's, 55 Water Street, New York, New York
10041, Attention: Residential Mortgage Surveillance Group, (d) in the case of
Fitch, One State Street Plaza, New York, New York 10004, Attention: Residential
Mortgage Group, (e) in the case of the Owner Trustee, Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration, (f) in the case of the Issuer, to
Home Equity Loan Trust 2000-HS1, c/o Owner Trustee, Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration, (g) in the case of the Indenture
Trustee, The Chase Manhattan Bank, 450 West 33rd Street, New York, NY, 10001,
Attention: Structured Finance Services and (h) in the case of the Underwriter,
Residential Funding Securities Corporation, 4800 Montgomery Lane, Suite 150,
Bethesda, Maryland 20814, Attention: Director of Compliance; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. Any notice required or permitted to be mailed to a
Securityholder shall be given by first class mail, postage prepaid, at the
<PAGE>
address of such Securityholder as shown in the Register. Any notice so mailed
within the time prescribed in this Servicing Agreement shall be conclusively
presumed to have been duly given, whether or not the Securityholder receives
such notice. Any notice or other document required to be delivered or mailed by
the Indenture Trustee to any Rating Agency shall be given on a reasonable
efforts basis and only as a matter of courtesy and accommodation and the
Indenture Trustee shall have no liability for failure to delivery such notice or
document to any Rating Agency.
Section 8.04 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Servicing Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Servicing Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Servicing Agreement
or of the Securities or the rights of the Securityholders thereof.
Section 8.05 Third-Party Beneficiaries. This Servicing Agreement will inure to
the benefit of and be binding upon the parties hereto, the Securityholders, the
Credit Enhancer, the Owner Trustee and their respective successors and permitted
assigns. Except as otherwise provided in this Servicing Agreement, no other
Person will have any right or obligation hereunder.
Section 8.06 Counterparts. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
Section 8.07 Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 8.08 Termination Upon Purchase by the Master Servicer or Liquidation of
All Revolving Credit Loans; Partial Redemption. (a) The respective obligations
and responsibilities of the Master Servicer, the Issuer and the Indenture
Trustee created hereby shall terminate upon the last action required to be taken
by the Issuer pursuant to the Trust Agreement and by the Indenture Trustee
pursuant to the Indenture following the earlier of:
(i) the date on or before which the Indenture or Trust Agreement is terminated,
or
(ii) the purchase by the Master Servicer from the Issuer of all Revolving Credit
Loans and all property acquired in respect of any Revolving Credit Loan at a
price equal to 100% of the unpaid Loan Balance of each Revolving Credit Loan,
plus accrued and unpaid interest thereon at the Weighted Average Net Loan Rate
up to the day preceding the Payment Date on which such amounts are to be
distributed to Securityholders, plus any amounts due and owing to the Credit
Enhancer under the Insurance Agreement (any unpaid Master Servicing Fee shall be
deemed paid at such time).
<PAGE>
The right of the Master Servicer to purchase the assets of the Issuer pursuant
to clause (ii) above is conditioned upon the Pool Balance as of such date (after
application of payments received during the related Collection Period) being
less than ten percent of the aggregate of the Cut-off Date Loan Balances of the
Revolving Credit Loans. If such right is exercised by the Master Servicer, the
Master Servicer shall deposit the amount calculated pursuant to clause (ii)
above with the Indenture Trustee pursuant to Section 4.10 of the Indenture and,
upon the receipt of such deposit, the Indenture Trustee or Custodian shall
release to the Master Servicer, the files pertaining to the Revolving Credit
Loans being purchased.
(b) Subject to the provisions of clause (c) below, the Master Servicer has the
right to purchase a portion of the assets of the Issuer upon the Pool Balance as
of such date (after application of payments received during the related
Collection Period) being less than ten percent of the aggregate of the Cut-off
Date Loan Balances of the Revolving Credit Loans at a price equal to 100% of the
unpaid Loan Balance of each Revolving Credit Loan so purchased, plus accrued and
unpaid interest thereon at the Weighted Average Net Loan Rate up to the day
preceding the Payment Date on which such amounts are to be distributed to
Securityholders, plus any amounts due and owing to the Credit Enhancer under the
Insurance Agreement (any unpaid Master Servicing Fee shall be deemed paid at
such time). If such right is exercised by the Master Servicer, the Master
Servicer shall deposit the amount calculated above with the Indenture Trustee
pursuant to Section 5.02 of the Indenture and, upon the receipt of such deposit,
the Indenture Trustee or Custodian shall release to the Master Servicer, the
files pertaining to the Revolving Credit Loans being purchased.
(c) With respect to any purchase of a portion of the Revolving Credit Loans by
the Master Servicer pursuant to subsection (b) above, the following conditions
must be satisfied: (i) the Master Servicer shall have delivered to the Indenture
Trustee and the Credit Enhancer a loan schedule containing a list of all
Revolving Credit Loans remaining in the Trust after such removal; (ii) the
Master Servicer shall represent and warrant that no selection procedures adverse
to the interests of the Securityholders or the Credit Enhancer were used by the
Master Servicer in selecting such Revolving Credit Loans; and (iii) each Rating
Agency shall have notified the Master Servicer that such retransfer would not
result in a reduction or withdrawal of the ratings of the Securities, if
determined without regard to the Credit Enhancement Instrument. In lieu of a
cash payment, if an Amortization Event had previously occurred, all or a portion
of such purchase price by the Master Servicer may be in the form of Additional
Balances on other Revolving Credit Loans not previously conveyed to the Issuer.
(d) The Master Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee for execution, at the time the Revolving Credit Loans are to
be released to the Master Servicer, appropriate documents assigning each such
Revolving Credit Loan from the Indenture Trustee or the Issuer to the Master
Servicer or the appropriate party.
Section 8.09 Certain Matters Affecting the Indenture Trustee. For all purposes
of this Servicing Agreement, in the performance of any of its duties or in the
exercise of any of its powers hereunder, the Indenture Trustee shall be subject
to and entitled to the benefits of Article VI of the Indenture.
<PAGE>
Section 8.10 Owner Trustee Not Liable for Related Documents. The recitals
contained herein shall be taken as the statements of the Depositor, and the
Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Servicing Agreement, of any Basic Document or of the Certificates (other than
the signatures of the Owner Trustee on the Certificates) or the Notes, or of any
Related Documents. The Owner Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders under
the Trust Agreement or the Noteholders under the Indenture, including, the
compliance by the Depositor or the Seller with any warranty or representation
made under any Basic Document or in any related document or the accuracy of any
such warranty or representation, or any action of the Certificate Paying Agent,
the Certificate Registrar or the Indenture Trustee taken in the name of the
Owner Trustee.
<PAGE>
IN WITNESS WHEREOF, the Master Servicer, the Indenture Trustee and the
Issuer have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
RESIDENTIAL FUNDING CORPORATION,
as Master Servicer
By: /s/ Julie Steinhagen
Name: Julie Steinhagen
Title: Director
HOME EQUITY LOAN TRUST 2000-HS1
By: Wilmington Trust Company, not
in its individual capacity but
solely as Owner Trustee
By: /s/ W. Chris Sponenberg
Name: W. Chris Sponenberg
Title: Assistant Vice President
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By: /s/ Mark McDermott
Name: Mark McDermott
Title: Trust Officer
<PAGE>
EXHIBIT A
REVOLVING CREDIT LOAN SCHEDULE
See Exhibit 1 of Revolving Credit Loan Purchase Agreement
<PAGE>
EXHIBIT B
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That The Chase Manhattan Bank, as Indenture Trustee (the "Trustee"),
under the Indenture (the "Indenture") among and the Indenture Trustee, a
national banking association organized and existing under the laws of the State
of New York, and having its principal office located at 450 West 33rd Street, in
the City of New York in the State of New York, hath made, constituted and
appointed, and does by these presents make, constitute and appoint Residential
Funding Corporation, a corporation organized and existing under the laws of the
State of Delaware, its true and lawful Attorney-in-Fact, with full power and
authority to sign, execute, acknowledge, deliver, file for record, and record
any instrument on its behalf and to perform such other act or acts as may be
customarily and reasonably necessary and appropriate to effectuate the following
enumerated transactions in respect of any of the mortgages or deeds of trust
(the "Mortgages" and the "Deeds of Trust", respectively) creating a trust or
second lien or an estate in fee simple interest in real property securing a
Revolving Credit Loan and promissory notes secured thereby (the "Mortgage
Notes") for which the undersigned is acting as Indenture Trustee for various
Securityholders (whether the undersigned is named therein as mortgagee or
beneficiary or has become mortgagee by virtue of Endorsement of the Mortgage
Note secured by any such Mortgage or Deed of Trust) and for which Residential
Funding Corporation is acting as master servicer pursuant to a Servicing
Agreement, dated as of September 26, 2000 (the "Servicing Agreement").
This appointment shall apply only to transactions which the Trustee is
authorized to enter into under the Indenture, but in no event shall apply to any
transactions other than the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where said
modification or re-recording is for the purpose of correcting the Mortgage or
Deed of Trust to conform same to the original intent of the parties thereto or
to correct title errors discovered after such title insurance was issued and
said modification or re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an easement
in favor of a public utility company or a government agency or unit with powers
of eminent domain; this section shall include, without limitation, the execution
of partial satisfactions/releases, partial reconveyances or the execution of
requests to trustees to accomplish same.
3. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking of a
deed in lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such foreclosure,
including, without limitation, any and all of the following acts:
a. The substitution of trustee(s) serving under a Deed of Trust, in accordance
with state law and the Deed of Trust;
<PAGE>
b. Statements of breach or non-performance;
c. Notices of default;
d. Cancellations/rescissions of notices of default and/or notices of sale;
e. The taking of a deed in lieu of foreclosure; and
f. Such other documents and actions as may be necessary under the terms of the
Mortgage, Deed of Trust or state law to expeditiously complete said
transactions.
4. The conveyance of the properties to the mortgage insurer, or the closing of
the title to the property to be acquired as real estate owned, or conveyance of
title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction/release of a Mortgage or Deed of Trust or full
reconveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related Mortgage Note.
7. The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the Revolving Credit Loan secured and
evidenced thereby pursuant to the requirements of a Residential Funding
Corporation Seller Contract, including, with limitation, by reason of conversion
of an adjustable rate mortgage loan from a variable rate to a fixed rate.
8. The full assignment of a Mortgage or Deed of Trust upon payment and discharge
of all sums secured thereby in conjunction with the refinancing thereof,
including, without limitation, the endorsement of the related Mortgage Note.
9. The modification or re-recording of a Mortgage or Deed of Trust, where said
modification or re-recording is for the purpose of any modification pursuant to
Section 3.01 of the Servicing Agreement.
10. The subordination of the lien of a Mortgage or Deed of Trust, where said
subordination is in connection with any modification pursuant to Section 3.01 of
the Servicing Agreement, and the execution of partial satisfactions/releases in
connection with such same Section 3.01.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect has not been
revoked unless an instrument of revocation has been made in writing by the
undersigned.
THE CHASE MANHATTAN BANK, not in its
individual capacity, but solely as
Indenture Trustee under the
Agreements and the Indentures
By:
Name:
Title:
STATE OF )
SS.
COUNTY OF )
On this th day of , 2000, before me the undersigned, Notary Public of
said State, personally appeared personally known to me to be duly authorized
officers of The Chase Manhattan Bank that executed the within instrument and
personally known to me to be the persons who executed the within instrument on
behalf of The Chase Manhattan Bank therein named, and acknowledged to me such
The Chase Manhattan Bank executed the within instrument pursuant to its by-laws.
WITNESS my hand and official seal.
Notary Public in and for the
State of
After recording, please mail to:
Attn:
<PAGE>
EXHIBIT C
FORM OF REQUEST FOR RELEASE
DATE:
TO:
Re: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Revolving Credit Loans, we request
the release of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Revolving Credit LoanPrepaid in Full
Revolving Credit Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
Residential Funding Corporation
Authorized Signature
...............................................................................
TO CUSTODIAN/INDENTURE TRUSTEE: Please acknowledge this request, and check off
documents being enclosed with a copy of this form. You should retain this form
for your files in accordance with the terms of the Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or
Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name
Title
Date
<PAGE>
