Exhibit 4.3
================================================================================
[NAME OF SERVICER],
as Servicer,
and
IMPAC SECURED ASSETS CORP.
as Depositor
___________________________
SERVICING AGREEMENT
Dated as of _______________
___________________________
________________Mortgage Loans
ISAC MBN Trust Series 200_-__
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions
Section 1.01 Definitions......................................................
Section 1.02 Other Definitional Provisions....................................
Section 1.03 Interest Calculations............................................
ARTICLE II
Representations and Warranties
Section 2.01 Representations and Warranties Regarding the Servicer............
Section 2.02 Representations and Warranties of the Depositor..................
Section 2.03 Enforcement of Representations and Warranties....................
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 The Servicer.....................................................
Section 3.02 Collection of Certain Mortgage Loan Payments.....................
Section 3.03 Withdrawals From the Collection Account..........................
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses....
Section 3.05 Modification Agreements..........................................
Section 3.06 Trust Estate; Related Documents..................................
Section 3.07 Realization Upon Defaulted Mortgage Loans........................
Section 3.08 Depositor and Indenture Trustee to Cooperate.....................
Section 3.09 Servicing Compensation; Payment of Certain Expenses by Servicer..
Section 3.10 Annual Statement as to Compliance................................
Section 3.11 Assessments of Compliance and Attestation Reports................
Section 3.12 Access to Certain Documentation and Information Regarding the
Mortgage Loans...............
Section 3.13 Maintenance of Certain Servicing Insurance Policies..............
Section 3.14 Information Required by the Internal Revenue Service Generally
and Reports of Foreclosures and Abandonments of Mortgaged
Property........................................
Section 3.15 Optional Repurchase of Defaulted Mortgage Loans..................
Section 3.16 Intention of the Parties and Interpretation......................
ARTICLE IV
Servicing Certificate
Section 4.01 Statements to Securityholders....................................
ARTICLE V
Distribution and Payment Accounts
Section 5.01 Distribution Account.............................................
Section 5.02 Payment Account..................................................
ARTICLE VI
The Servicer
Section 6.01 Liability of the Servicer........................................
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer...............
Section 6.03 Limitation on Liability of the Servicer and Others...............
Section 6.04 Servicer Not to Resign...........................................
Section 6.05 Delegation of Duties.............................................
Section 6.06 Servicer to Pay Indenture Trustee's and Owner Trustee's Fees and
Expenses;
Indemnification.................................................
ARTICLE VII
Default
Section 7.01 Servicing Default................................................
Section 7.02 Indenture Trustee to Act; Appointment of Successor...............
Section 7.03 Notification to Securityholders..................................
ARTICLE VIII
Miscellaneous Provisions
Section 8.01 Amendment........................................................
Section 8.02 GOVERNING LAW....................................................
Section 8.03 Notices..........................................................
Section 8.04 Severability of Provisions.......................................
Section 8.05 Third-Party Beneficiaries........................................
Section 8.06 Counterparts.....................................................
Section 8.07 Effect of Headings and Table of Contents.........................
Section 8.08 Termination Upon Purchase by the Servicer or Liquidation of All
Mortgage Loans..............
Section 8.09 Certain Matters Affecting the Indenture Trustee..................
Section 8.10 Authority of the Administrator...................................
EXHIBIT A MORTGAGE LOAN SCHEDULE...........................................
EXHIBIT B POWER OF ATTORNEY................................................
EXHIBIT C CERTIFICATE PURSUANT TO SECTION 3.08.............................
EXHIBIT D FORM OF REQUEST FOR RELEASE......................................
EXHIBIT E SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE...
Schedule 1 Mortgage Insurance Component Schedule............................
This Servicing Agreement, dated as of _______________, between [Name of
Servicer], as Servicer (the "Servicer") and Impac Secured Assets Corp., as
Depositor (the "Depositor"),
W I T N E S S E T H T H A T:
WHEREAS, Impac Secured Assets Corp., will create ISAC MBN
Trust Series 200_-__, an owner trust (the "Issuing Entity") under Delaware law,
and will transfer the Mortgage Loans and all of its rights under the Mortgage
Loan Purchase Agreement to the Issuing Entity;
WHEREAS, pursuant to the terms of a Trust Agreement dated as
of _______________ (the "Owner Trust Agreement") between the Depositor and
______________________, as owner trustee (the "Owner Trustee"), the Depositor
will sell the Mortgage Collateral to Issuing Entity in exchange for the cash
proceeds of the Securities;
WHEREAS, pursuant to the terms of the Trust Agreement between
the Depositor and the Owner Trustee, the Issuing Entity will issue and transfer
to or at the direction of the Depositor, the Mortgage-Backed Certificates,
Series 200_-__ (the "Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of
_______________ (the "Indenture") between the Issuing Entity and the Indenture
Trustee, the Issuing Entity will issue and transfer to or at the direction of
the Purchaser the Mortgage-Backed Notes, Series 200_-__ (the "Notes"),
consisting of the Notes and secured by the Mortgage Collateral;
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase
Agreement, the Depositor will acquire the Initial Loans; and
WHEREAS, pursuant to the terms of this Servicing Agreement,
the Servicer will service the Mortgage 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 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 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; and the term "including" shall mean "including without
limitation".
(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 Principal Balance of a Mortgage 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
down.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER. The
Servicer represents and warrants to Depositor, the Issuing Entity and for the
benefit of the Indenture Trustee, as pledgee of the Mortgage Collateral, and the
Securityholders, as of the Cut-Off Date, [the date of the Servicing Agreement],
the Closing Date [and any Deposit Date], that:
(i) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of [_______]
and has the corporate power to own its assets and to transact the
business in which it is currently engaged. The 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 Servicer;
(ii) The 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 execu tion, delivery
and performance of this Servicing Agreement. When executed and
delivered, this Servicing Agreement will constitute the legal, valid
and binding obligation of the 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;
(iii) The 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;
(iv) The execution and delivery of this Servicing Agreement
and the performance of the transactions contemplated hereby by the
Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Servicer or any provision of the Certificate of Incorporation or Bylaws
of the Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Servicer is a party
or by which the Servicer may be bound; and
(v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to
the knowledge of the Servicer threatened, against the Servicer or any
of its properties or with respect to this Servicing Agreement or the
Notes or the Certificates which in the opinion of the 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 Servicer hereunder.
Section 2.02 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor hereby represents and warrants to the Servicer for the benefit of the
Indenture Trustee, as pledgee of the Mortgage Collateral, and the
Securityholders, as of the Cut-Off Date, the Closing Date and any Deposit Date,
that:
(i) The Depositor is a corporation in good standing under the
laws of the State of California;
(ii) The Depositor 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
(iii) The execution and delivery by the Depositor of this
Servicing Agreement and the performance by the Depositor of its
obligations under this Servicing Agreement will not violate any
provision of any law or regulation governing the Depositor or any
order, writ, judgment or decree of any court, arbitrator or
governmental authority or agency applicable to the Depositor or any of
its assets. Such execution, delivery, authentication and performance
will not require the authorization, consent or approval of, the giving
of notice to, the filing or registration with, or the taking of any
other action with respect to, any governmental authority or agency
regulating the activities of limited liability companies. 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 Depositor is
bound.
Section 2.03 ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. The
Servicer, on behalf of and subject to the direction of the Indenture Trustee, as
pledgee of the Mortgage Collateral, or the Credit Enhancer, shall enforce the
representations and warranties of the Sponsor pursuant to the Mortgage Loan
Purchase Agreement. Upon the discovery by the Sponsor, the Servicer, the
Indenture Trustee, the Credit Enhancer, the Depositor or any Custodian of a
breach of any of the representations and warranties made in the Mortgage Loan
Purchase Agreement, in respect of any Mortgage 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
Servicer shall promptly notify the Sponsor of such breach and request that,
pursuant to the terms of the Mortgage Loan Purchase Agreement, the Sponsor
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 Mortgage Loan Purchase Agreement) or 90 days (with respect to a
breach of the representations and warranties contained in Section 3.1(b) of the
Mortgage Loan Purchase Agreement) from the date the Sponsor was notified of such
breach or (ii) purchase such Mortgage Loan from the Depositor at the price and
in the manner set forth in Section 3.1(b) of the Mortgage Loan Purchase
Agreement; PROVIDED that the Sponsor shall, subject to the conditions set forth
in the Mortgage Loan Purchase Agreement, have the option to substitute an
Eligible Substitute Mortgage Loan or Loans for such Mortgage Loan. In the event
that the Sponsor elects to substitute one or more Eligible Substitute Mortgage
Loans pursuant to Section 3.1(b) of the Mortgage Loan Purchase Agreement, the
Sponsor shall deliver to the Depositor with respect to such Eligible Substitute
Mortgage Loans, the original Mortgage Note, the Mortgage, and such other
documents and agreements as are required by the Mortgage Loan Purchase
Agreement. No substitution will be made in any calendar month after the
Determination Date for such month. Payments due with respect to Eligible
Substitute Mortgage Loans in the month of substitution shall not be transferred
to the Depositor and will be retained by the Servicer and remitted by the
Servicer to the Sponsor on the next succeeding Payment Date provided a payment
has been received by the Depositor for such month in respect of the Mortgage
Loan to be removed. The Servicer shall amend or cause to be amended the Mortgage
Loan Schedule to reflect the removal of such Mortgage Loan and the sub stitution
of the Eligible Substitute Mortgage Loans and the Servicer shall promptly
deliver the amended Mortgage Loan Schedule to the Owner Trustee and Indenture
Trustee.
It is understood and agreed that the obligation of the Sponsor to cure
such breach or purchase or substitute for such Mortgage Loan as to which such a
breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Depositor and the Indenture Trustee, as
pledgee of the Mortgage Collateral, against the Sponsor. In connection with the
purchase of or substitution for any such Mortgage Loan by the Sponsor, the
Depositor shall assign to the Sponsor all of the right, title and interest in
respect of the Mortgage Loan Purchase Agreement applicable to such Mortgage
Loan. Upon receipt of the Repurchase Price, or upon completion of such
substitution, the applicable Custodian shall deliver the Mortgage Files to the
Servicer, together with all relevant endorsements and assignments.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 THE SERVICER. (a) The Servicer shall service and
administer the Mortgage Loans in the same manner as would prudent institutional
mortgage lenders servicing comparable mortgage loans for their own account in
the jurisdictions where the related Mortgaged Properties are located 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, how ever, that the Servicer
shall at all times remain responsible to the Depositor, the Indenture Trustee,
as pledgee of the Mortgage Collateral, and the Securityholders for the
performance of its duties and obligations hereunder in accordance with the terms
hereof and the servicing standard set forth above. Without limiting the
generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered by the Depositor and the Indenture Trustee, as pledgee
of the Mortgage Collateral, to execute and deliver, on behalf of itself, the
Depositor, the Securityholders and 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 Mortgage
Loans and with respect to the Mortgaged Properties. The Depositor, the Indenture
Trustee and the Custodian, as applicable, shall furnish the Servicer with any
powers of attorney and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder. On the
Closing Date, the Depositor shall deliver to the Servicer a power of attorney
substantially in the form of Exhibit B hereto.
If the Mortgage relating to a Mortgage Loan did not have a lien senior
on the related Mortgaged Property as of the Cut-Off Date, then the 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
Mortgage Loan had a lien senior to the Mortgage Loan on the related Mort gaged
Property as of the Cut-Off Date, then the Servicer, in such capacity, may
consent to the refinancing of such senior lien; PROVIDED that (i) the resulting
Combined Loan-to-Value Ratio of such Mortgage Loan is no higher than the
Combined Loan-to-Value Ratio prior to such refinancing and (ii) the interest
rate for the loan evidencing the refinanced senior lien on the date of such
refinancing is no higher than the interest rate on the loan evidencing the
existing senior lien immediately prior to the date of such refinancing.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Servicing Agreement) to the Depositor 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.
(b) The Servicer has entered into Initial Subservicing Agreements with
the Initial Subservicers for the servicing and administration of the Mortgage
Loans and may enter into additional Sub servicing Agreements with Subservicers
for the servicing and administration of certain of the Mortgage Loans.
References in this Servicing Agreement to actions taken or to be taken by the
Servicer in servicing the Mortgage Loans include actions taken or to be taken by
a Subservicer on behalf of the Servicer and any amount received by such
Subservicer in respect of a Mortgage Loan shall be deemed to have been received
by the Servicer whether or not actually received by the Servicer. Each
Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Servicing Agreement and as the Servicer and the
Subservicer have agreed. With the approval of the Servicer, a Subservicer may
delegate its servicing obligations to third-party servicers, but such
Subservicers will remain obligated under the related Subservicing Agreements.
The Servicer and the Subservicer may enter into amendments to the related
Subservicing Agreements; PROVIDED, HOWEVER, that any such amendments shall be
consistent with and not violate the provisions of this Servicing Agreement. The
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 Servicer or the Subservicer, the Servicer
shall either act as servicer of the related Mortgage Loan or enter into a
Subservicing Agreement with a successor Subservicer which will be bound by the
terms of the related Subservicing Agreement. The Servicer shall be entitled to
enter into any agreement with a Subservicer for indemnification of the 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 Servicer
are terminated hereunder, any successor to the 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 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 Servicer, for the
benefit of the Depositor, 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 material and
adverse effect on a Mortgage 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 Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. The 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 Mortgage 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 MORTGAGE LOAN PAYMENTS. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mort gage Loans, and shall, to the extent such
procedures shall be consistent with this Servicing Agreement, 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 Servicer may in its discretion (i) waive any
late payment charge, penalty interest or other fees which may be collected in
the ordinary course of servicing such Mortgage Loan and (ii) arrange with a
Mortgagor a schedule for the payment of principal and interest due and unpaid;
PROVIDED such arrangement is consistent with the Servicer's policies with
respect to home equity mortgage loans; PROVIDED, FURTHER, that notwithstanding
such arrangement such Mortgage Loans will be included in the information
regarding delinquent Mortgage Loans set forth in the Servicing Certificate. The
Servicer may also extend the Due Date for payment due on a Mortgage Loan,
PROVIDED, HOWEVER, that the Servicer shall first determine that any such waiver
or extension will not adversely affect the lien of the related Mortgage.
Consistent with the terms of this Servicing Agreement, the Servicer may also
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's determination such waiver,
modification, post ponement or indulgence is not materially adverse to the
interests of the Securityholders or the Credit Enhancer, PROVIDED, HOWEVER, that
the Servicer may not modify or permit any Subservicer to modify any Mortgage
Loan (including without limitation any modification that would change the
Mortgage Rate, forgive the payment of any principal or interest (unless in
connection with the liquidation of the related Mortgage Loan) or extend the
final maturity date of such Mortgage Loan) unless such Mortgage Loan is in
default or, in the judgment of the Servicer, such default is reasonably
foreseeable.
(b) The Servicer shall establish an account (the "Collection Account")
in which the Servicer shall deposit or cause to be deposited any amounts
representing payments on and any collections in respect of the Mortgage Loans
received by it subsequent to the Cut-Off Date as to any Initial Loan or the
related Deposit Date as to any Additional Loan (other than in respect of the
payments referred to in the following paragraph) within __ Business Day[s]
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 of or interest on the Mortgage
Loans received by the 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 Mortgage Loans
purchased by the Servicer pursuant to Section 3.15;
(iii) Net Liquidation Proceeds net of any related Foreclosure
Profit;
(iv) all proceeds of any Mortgage Loans repurchased by the
Sponsor pursuant to the Mortgage Loan Purchase Agreement, and all
Substitution Adjustment Amounts required to be deposited in connection
with the substitution of an Eligible Substitute Mortgage Loan pursuant
to the Mortgage 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 Servicer pursuant to
Section 8.08.
PROVIDED, HOWEVER, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Servicer need not deposit in the Collection Account amounts representing
Foreclosure Profits, fees (including annual fees) or late charge penalties,
payable by Mortgagors, or amounts received by the 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 Collection Account is so deposited, the Servicer may at any
time withdraw such amount from the Collection Account, any provision herein to
the contrary notwithstanding. The Collection 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 mortgage loans
belonging to the Servicer or serviced or serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Servicer shall keep records that
accurately reflect the funds on deposit in the Collection Account that have been
identified by it as being attributable to the Mortgage Loans and shall hold all
collections in the Collection Account to the extent they represent collections
on the Mortgage Loans for the benefit of the Depositor, the Indenture Trustee,
the Securityholders and the Credit Enhancer, as their interests may appear. The
Servicer shall remit all Foreclosure Profits to itself as additional servicing
compensation.
The Servicer may cause the institution maintaining the Collection
Account to invest any funds in the Collection Account in Eligible Investments
(including obligations of the Servicer or any of its Affiliates, if such
obligations otherwise qualify as Eligible Investments), which shall mature not
later than the Business Day next preceding the 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 be for the benefit of the
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 Collection Account by the Servicer out of
its own funds immediately as realized.
(c) The Servicer will require each Subservicer to hold all
funds constituting
collections on the Mortgage Loans, pending remittance thereof to the Servicer,
in one or more accounts meeting the requirements of an Eligible Account, and
invested in Eligible Investments, unless, all such collections are remitted on a
daily basis to the Servicer for deposit into the Collection Account.
Section 3.03 WITHDRAWALS FROM THE COLLECTION ACCOUNT. The Servicer
shall, from time to time as provided herein, make withdrawals from the
Collection Account of amounts on deposit therein pursuant to Section 3.02 that
are attributable to the Mortgage Loans for the following purposes:
(i) to deposit in the Distribution Account, on the Business
Day prior to each Payment Date, an amount equal to the Security
Collections required to be distributed on such Payment Date;
(ii) to the extent deposited to the Collection 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
Mortgage 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 Mortgage Loan;
(iii) to pay to itself out of each payment received on account
of interest on a Mortgage Loan as contemplated by Section 3.09, an
amount equal to the related 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;
(iv) to the extent deposited in the Collection Account to pay
to itself as additional servicing compensation any interest or
investment income earned on funds deposited in the Collection Account
and Payment Account that it is entitled to withdraw pursuant to
Sections 3.02(b) and 5.01;
(v) to the extent deposited in the Collection Account, to pay
to itself as additional servicing compensation any Foreclosure Profits;
(vi) to pay to itself or the Sponsor, with respect to any
Mortgage Loan or property acquired in respect thereof that has been
purchased or otherwise transferred to the Sponsor, the 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 Repur chase Price is determined;
(vii) to withdraw any other amount deposited in the Collection
Account that was not required to be deposited therein pursuant to
Section 3.02;
(viii) to pay to the Sponsor the amount, if any, deposited in
the Collection Account by the Indenture Trustee upon release thereof
from the Funding Account representing payments for Additional Loans;
and
(ix) after the occurrence of an Amortization Event, to pay to
the Sponsor, the Excluded Amount.
Since, in connection with withdrawals pursuant to clauses (iii), (iv), (vi) and
(vii), the Servicer's entitlement thereto is limited to collections or other
recoveries on the related Mortgage Loan, the Servicer shall keep and maintain
separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose
of justifying any withdrawal from the Collection Account pursuant to such
clauses. Notwithstanding any other provision of this Servicing Agreement, the
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 Servicer determines to be
otherwise nonrecoverable (except with respect to any Mortgage Loan as to which
the Repurchase Price has been paid), by withdrawal from the Collection Account
of amounts on deposit therein attributable to the Mortgage 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 Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the 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
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time. The Servicer shall also cause to be maintained on property acquired
upon foreclosure, or deed in lieu of foreclosure, of any Mortgage 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 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 Servicer's normal servicing procedures)
shall be deposited in the Collection 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 Mortgage Loan in a federally designated flood area, the hazard
insurance to be maintained for the related Mortgage 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
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
Mortgage Loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Servicer shall obtain and maintain a blanket policy consistent with its
general mortgage servicing activities insuring against hazard losses on all of
the Mortgage 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 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 Collection Account the amount not otherwise
payable under the blanket policy because of such deductible clause. Any such
deposit by the 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 Collection Account. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to
present, on behalf of itself, the Depositor, the Issuing Entity, the Indenture
Trustee and the Securityholders, claims under any such blanket policy.
Section 3.05 MODIFICATION AGREEMENTS. The Servicer or the related
Subservicer, as the case may be, shall be entitled to (A) execute assumption
agreements, substitution agreements, and 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 Mortgage Loans and with respect to the Mortgaged Properties
subject to the Mortgages (and the Depositor shall promptly execute any such
documents on request of the 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 Mortgage Loan, that the security for, and the
timely and full collectability of, such Mortgage 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 Mortgage Loan after
such partial release does not exceed the Combined Loan-to-Value Ratio for such
Mortgage Loan as of the Cut-Off Date. Any fee collected by the Servicer or the
related Sub servicer for processing such request will be retained by the
Servicer or such Subservicer as additional servicing compensation.
Section 3.06 TRUST ESTATE; RELATED DOCUMENTS. (a) When required by the
provisions of this Servicing Agreement, the Depositor shall execute instruments
to release property from the terms of this Servicing Agreement, or convey the
Depositor '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 Depositor as provided in this Article
III shall be bound to ascertain the Depositor '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 Servicer shall deliver to the Depositor or
the related Custodian copies of any written assurance, assumption agreement or
substitution agreement or other similar agreement pursuant to Section 3.05, the
Depositor or the related 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 Servicer do not meet the above qualifications, such documents
shall promptly be returned by the Depositor or the related Custodian to the
Servicer, with a direction to the Servicer to forward the correct documentation.
(c) Upon Depositor Request accompanied by an Officers' Certificate of
the Servicer pursuant to Section 3.09 of this Servicing Agreement to the effect
that a Mortgage Loan has been the subject of a final payment or a prepayment in
full and the related Mortgage Loan has been terminated or that substantially all
Liquidation Proceeds which have been determined by the Servicer in its
reasonable judgment to be finally recoverable have been recovered, and upon
deposit to the Collection 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 Mortgage Loan or, if applicable, Liquidation Proceeds, the
Depositor shall promptly release the Related Documents to the Servicer, along
with such documents as the Servicer or the Mortgagor may request as contemplated
by the Servicing Agreement to evidence satisfaction and discharge of such
Mortgage Loan. If from time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Servicer requests the Depositor or the
related Custodian to release the Related Documents and delivers to the Depositor
or the related Custodian a trust receipt reasonably satisfactory to the
Depositor or the related Custodian and signed by a Responsible Officer of the
Servicer, the Depositor or the related Custodian shall release the Related
Documents to the Servicer. If such Mortgage Loans shall be liquidated and the
Depositor or the related Custodian receives a certificate from the Servicer as
provided above, then, upon request of the Depositor or the related Custodian
shall release the trust receipt to the Servicer.
Section 3.07 REALIZATION UPON DEFAULTED MORTGAGE LOANS. With respect to
such of the Mortgage Loans as come into and continue in default, the Servicer
will decide whether to foreclose upon the Mortgaged Properties securing such
Mortgage Loans or write off the unpaid principal balance of the Mortgage Loans
as bad debt; provided that if the 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 Servicer will not cause the Depositor to acquire title to
such Mortgaged Property in a foreclosure or similar proceeding. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices (including, in the case of any default on a related senior mortgage
loan, the advanc ing of funds to correct such default) and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities; PROVIDED that the Servicer shall not be
liable in any respect hereunder if the 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 Servicer shall not
be required to expend its own funds in connection with any fore closure 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 Servicer that any such expenditure
previously made pursuant to this Section 3.07 will not be reimbursable from Net
Liquidation Proceeds, the Servicer shall be entitled to reimbursement of its
funds so expended pursuant to Section 3.03.
Notwithstanding any provision of this Servicing Agreement, a Mortgage
Loan may be deemed to be finally liquidated if substantially all amounts
expected by the Servicer to be received in connection with the related defaulted
Mortgage Loan have been received; PROVIDED, HOWEVER, any subsequent collections
with respect to any such Mortgage Loan shall be deposited to the Collection
Account. For purposes of determining the amount of any Liquidation Proceeds or
Insurance Proceeds, or other unscheduled collections, the 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 Mortgage 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 Depositor and the Indenture Trustee as their interests
may appear, or to their respective nominee on behalf of Securityholders.
Notwithstanding any such acquisition of title and cancellation of the related
Mortgage Loan, such Mortgaged Property shall (except as otherwise expressly
provided herein) be considered to be an outstanding Mortgage Loan held as an
asset of the Depositor 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
Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness
evidenced by the related Mortgage Note shall have been discharged, such Mortgage
Note 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 foreclosure proceedings or the purchase or repurchase
of any Mortgage Loan pursuant to the terms of this Servicing Agreement, as well
as any recovery resulting from a collection of Liquidation Proceeds or Insurance
Proceeds, will be applied in the following order of priority: first, to
reimburse the Servicer or the related Subservicer in accordance with Section
3.07; second, to all Servicing Fees payable therefrom; third, to the extent of
accrued and unpaid interest on the related Mortgage Loan, at the Net Mortgage
Rate to the Due Date prior to the Payment Date on which such amounts are to be
deposited in the Payment Account; fourth, as a recovery of principal on the
Mortgage Loan; and fifth, to Foreclosure Profits.
Section 3.08 DEPOSITOR AND INDENTURE TRUSTEE TO COOPERATE. On or before
each Payment Date, the Servicer will notify the Indenture Trustee or the
relevant Custodian, with a copy to the Depositor, of the termination of or the
payment in full and the termination of any Mortgage Loan during the preceding
Collection Period, which notification shall be by a certification in substan
tially the form attached hereto as Exhibit C (which certification shall include
a statement to the effect that all amounts received in connection with such
payment which are required to be deposited in the Collection Account pursuant to
Section 3.02 have been so deposited or credited) of a Servicing Officer. Upon
receipt of payment in full, the Servicer is authorized to execute, pursuant to
the authorization contained in Section 3.01, if the assignments of Mortgage have
been recorded as required under the Mortgage Loan Purchase Agreement, an
instrument of satisfaction regarding the related Mortgage, which instrument of
satisfaction shall be recorded by the 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 Collection Account.
From time to time and as appropriate for the servicing or foreclosure of any
Mortgage Loan, the Indenture Trustee or the relevant Custodian shall, upon
request of the Servicer and delivery to the Indenture Trustee or relevant
Custodian, with a copy to the Depositor, of a Request for Release, in the form
annexed hereto as Exhibit D, signed by a Servicing Officer, release or cause to
be released the related Mortgage File to the Servicer and the Depositor and
Indenture Trustee shall promptly execute such documents, in the forms provided
by the 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 Servicer to return the Mortgage File to the Indenture Trustee or
the related Custodian (as specified in such receipt) when the need therefor by
the Servicer no longer exists unless the Mortgage 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 Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the assignments of
Mortgage in accordance with the provisions of the Mortgage Loan Purchase
Agreement, the Depositor shall, if so requested in writing by the Servicer,
promptly execute an appropriate assignment in the form provided by the Servicer
to assign such Mortgage Loan for the purpose of collection to the 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 Mortgage Loan and deposit or credit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments due
under any such Mortgage Loan are paid by the Mortgagor and any other defaults
are cured then the assignee for collection shall promptly reassign such Mortgage
Loan to the Depositor and return all Related Documents to the place where the
related Mortgage File was being maintained.
In connection with the Depositor's obligation to cooperate as provided
in this Section 3.08 and all other provisions of this Servicing Agreement
requiring the Depositor to authorize or permit any actions to be taken with
respect to the Mortgage Loans, the Indenture Trustee, as pledgee of the Mortgage
Collateral in the Depositor, expressly agrees, on behalf of the Depositor, to
take all such actions on behalf of the Depositor and to promptly execute and
return all instruments reasonably required by the Servicer in connection
therewith; PROVIDED that if the Servicer shall request a signature of the
Indenture Trustee, on behalf of the Depositor, the Servicer will deliver to the
Indenture Trustee an Officer's Certificate stating that such signature is
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Servicing Agreement.
Section 3.09 SERVICING COMPENSATION; PAYMENT OF CERTAIN EXPENSES BY
SERVICER. The Servicer shall be entitled to receive the Servicing Fee in
accordance with Section 3.03 as compen sation for its services in connection
with servicing the Mortgage Loans. Moreover, additional servicing compensation
in the form of late payment charges and certain other receipts not required to
be deposited in the Collection Account as specified in Section 3.02 shall be
retained by the Servicer. The 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 Administrator, Owner Trustee, Indenture Trustee and any Custodian) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Servicer shall
deliver to the Depositor, the Issuing Entity 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 Servicer of Default. The Servicer
will deliver to the Depositor, the Issuing Entity and the Indenture Trustee,
with a copy to the Credit Enhancer, not later than February 28 of each calendar
year beginning in 2007, an Officer's Certificate (an "Annual Statement of
Compliance") stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement or other applicable servicing agreement has been made under
such officer's supervision and (ii) to the best of such officers' knowledge,
based on such review, the Servicer has fulfilled all of its obligations under
this Agreement or other applicable servicing agreement in all material respects
throughout such year, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status of cure provisions thereof. Such Annual
Statement of Compliance shall contain no restrictions or limitations on its use.
In the event that the Servicer has delegated any servicing responsibilities with
respect to the Mortgage Loans to a subservicer, the Servicer shall deliver a
similar Annual Statement of Compliance by that subservicer to the Indenture
Trustee as described above as and when required with respect to the Servicer.
If the Servicer cannot deliver the related Annual Statement of
Compliance by February 28th of such year, the Indenture Trustee, at its sole
option, may permit a cure period for the Servicer to deliver such Annual
Statement of Compliance, but in no event later than March 10th of such year.
Failure of the Servicer to timely comply with this Section 3.10 shall
be deemed a Servicing Default, and the Indenture Trustee may, in addition to
whatever rights the Indenture Trustee may have under this Agreement and at law
or equity or to damages, including injunctive relief and specific performance,
upon notice immediately terminate all the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Servicer for the same. This paragraph shall supercede
any other provision in this Agreement or any other agreement to the contrary.
Section 3.11 ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS. On and
after January 1, 2006, the Servicer shall service and administer the Mortgage
Loans in accordance with all applicable requirements of the Servicing Criteria.
Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1123 of
Regulation AB, the Servicer shall deliver to the Issuing Entity, the Indenture
Trustee, the Depositor, the Credit Enhancer and each Rating Agency on or before
February 28 of each calendar year beginning in 2007, a report regarding the
Servicer's assessment of compliance (an "Assessment of Compliance") with the
Servicing Criteria during the preceding calendar year. The Assessment of
Compliance must be reasonably satisfactory to the Indenture Trustee, and as set
forth in Regulation AB, the Assessment of Compliance must contain the following:
(a) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Servicer;
(b) A statement by such officer that such officer used the Servicing
Criteria attached as Exhibit E hereto, and which will also be attached to the
Assement of Compliance, to assess compliance with the Servicing Criteria
applicable to the Servicer;
(c) An assessment by such officer of the Servicer's compliance with the
applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Servicer, that are backed by the same asset type
as the Mortgage Loans;
(d) A statement that a registered public accounting firm has issued an
attestation report on the Servicer's Assessment of Compliance for the period
consisting of the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Servicer, which statement shall be based on the activities it
performs with respect to asset-backed securities transactions taken as a whole
involving the Servicer, that are backed by the same asset type as the Mortgage
Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on Exhibit E hereto which are indicated as applicable to the Servicer.
On or before February 28 of each calendar year beginning in 2007, the
Servicer shall furnish to the Issuing Entity, the Indenture Trustee, the
Depositor, the Credit Enhancer and each Rating Agency a report (an "Attestation
Report") by a registered public accounting firm that attests to, and reports on,
the Assessment of Compliance made by the Depositor, as required by Rules 13a-18
and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which
Attestation Report must be made in accordance with standards for attestation
reports issued or adopted by the Public Company Accounting Oversight Board.
The Servicer shall cause any subservicer, and each subcontractor
determined by the Servicer to be "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, to deliver to the Issuing
Entity, the Indenture Trustee, the Depositor, the Credit Enhancer and each
Rating Agency an Assessment of Compliance and Attestation Report as and when
provided above.
Such Assessment of Compliance, as to any subservicer, shall at a
minimum address each of the Servicing Criteria specified on Exhibit E hereto
which are indicated as applicable to any "primary servicer." Notwithstanding the
foregoing, as to any subcontractor, an Assessment of Compliance is not required
to be delivered unless it is required as part of a Form 10-K with respect to the
Trust Fund.
If the Servicer cannot deliver any Assessment of Compliance or
Attestation Report by February 28th of such year, the Indenture Trustee, at its
sole option, may permit a cure period for the Servicer to deliver such
Assessment of Compliance or Attestation Report, but in no event later than March
10th of such year.
Failure of the Master Servicer to timely comply with this Section 3.11
shall be deemed a Servicing Default, and the Indenture Trustee may, in addition
to whatever rights the Indenture Trustee may have under this Agreement and at
law or equity or to damages, including injunctive relief and specific
performance, upon notice immediately terminate all the rights and obligations of
the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Servicer for the same. This paragraph
shall supercede any other provision in this Agreement or any other agreement to
the contrary.
The Indenture Trustee shall also provide an Assessment of Compliance
and Attestation Report, as and when provided above, which shall at a minimum
address each of the Servicing Criteria specified on Exhibit E hereto which are
indicated to the "indenture trustee." In addition, the Indenture Trustee shall
cause the Custodian to deliver to the Indenture Trustee and the Depositor an
Assessment of Compliance and Attestation Report, as and when provided above,
which shall at a minimum address each of the Servicing Criteria specified on
Exhibit E hereto which are indicated as applicable to a "custodian."
Notwithstanding the foregoing, as to any Custodian, an Assessment of Compliance
is not required to be delivered unless it is required as part of a Form 10-K
with respect to the Trust Fund.
Section 3.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE LOANS. Whenever required by statute or regulation, the 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 Mortgage Loans such access being
afforded without charge but only upon reasonable request and during normal
business hours at the offices of the Servicer. Nothing in this Section 3.12
shall derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of the 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
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 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 FNMA or
FHLMC, whichever is greater, for Persons performing servicing for mortgage loans
purchased by such entity.
Section 3.14 INFORMATION REQUIRED BY THE INTERNAL REVENUE SERVICE
GENERALLY AND REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED PROPERTY.
The Servicer shall prepare and deliver all federal and state information reports
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 Servicer or Subservicer shall make reports of foreclosures
and abandonments of any mortgaged property for each year beginning in ____, the
Servicer or Subservicer shall file reports relating to each instance occurring
during the previous calendar year in which the Servicer (i) on behalf of the
Depositor, acquires an interest in any Mortgaged Property through foreclosure or
other comparable conversion in full or partial satisfaction of a Mortgage Loan,
or (ii) knows or has reason to know that any Mortgaged Property has been
abandoned. The reports from the 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.
Section 3.15 OPTIONAL REPURCHASE OF DEFAULTED MORTGAGE LOANS.
Notwithstanding any provision in Section 3.07 to the contrary, the Servicer may
repurchase any Mortgage Loan delinquent in payment for a period of 60 days or
longer for a price equal to the Repurchase Price.
Section 3.16 INTENTION OF THE PARTIES AND INTERPRETATION. Each of the
parties acknowledges and agrees that the purpose of Sections 3.10 and 3.11 of
this Agreement is to facilitate compliance with the provisions of Regulation AB
promulgated by the SEC under the 1934 Act (17 C.F.R. ss.ss. 229.1100 -
229.1123), as such may be amended from time to time and subject to clarification
and interpretive advice as may be issued by the staff of the SEC from time to
time. Therefore, each of the parties agrees that (a) the obligations of the
parties hereunder shall be interpreted in such a manner as to accomplish that
purpose, (b) the parties' obligations hereunder will be supplemented and
modified as necessary to be consistent with any such amendments, interpretive
advice or guidance, convention or consensus among active participants in the
asset-backed securities markets, advice of counsel, or otherwise in respect of
the requirements of Regulation AB, (c) the parties shall comply with requests
made by the Indenture Trustee or the Depositor for delivery of additional or
different information as the Indenture Trustee or the Depositor may determine in
good faith is necessary to comply with the provisions of Regulation AB, and (d)
no amendment of this Agreement shall be required to effect any such changes in
the parties' obligations as are necessary to accommodate evolving
interpretations of the provisions of Regulation AB.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01 STATEMENTS TO SECURITYHOLDERS. (a) With respect to each
Payment Date, the 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 as to
the Notes and Certificates, to the extent applicable:
(i) the aggregate amount of (a) Security Interest Collections
with respect to the Notes and the Certificates, (b) aggregate Security
Principal Collections with respect to the Notes and the Certificates
and (c) Security Collections for the related Collection Period with
respect to the Notes and the Certificates;
(ii) the amount of such distribution to the Securityholders of
the Notes and the Certificates applied to reduce the principal balance
thereof and separately stating the portion thereof in respect of the
Accelerated Principal Distribution Amount and the amount to be
deposited in the Funding Account on such Payment Date;
(iii) the amount of such distribution to the Securityholders
of the Notes and the Certificates allocable to interest and separately
stating the portion thereof in respect of overdue accrued interest;
(iv) the Credit Enhancement Draw Amount, if any, for such
Payment Date and the aggregate amount of prior draws thereunder not yet
reimbursed;
(v) the aggregate Principal Balance of (a) the ________ Loans,
(b) the ______ Loans, (c) the _________ Loans, as of the end of the
preceding Collection Period and (d) all of the Mortgage Loans;
(vi) the Weighted Average Net Mortgage Rate for the related
Collection Period and the Weighted Average Net Mortgage Rate for (a)
the ________ Loans, (b) the _______Loans and (c) the _________ Loans
for the related Collection Period;
(vii) the Special Capital Distribution Amount and the Required
Special Capital Distribution Amount, in each case as the end of the
related Collection Period; and
(viii) the aggregate amount of Additional Loans acquired
during the previous Collection Period with amounts in respect of Net
Principal Collections from the Funding Account;
(ix) the aggregate Liquidation Loss Amounts with respect to
the related Collection Period, the amount of any remaining Carryover
Loss Amount with respect to the Notes and Certificates, respectively,
and the aggregate of the Liquidation Loss Amounts from all Collection
Periods to date expressed as a percentage of the sum of (a) the Cut-Off
Date Pool Balance and (b) the amount by which the Pool Balance as of
the latest date that the Additional Loans have been transferred to the
Depositor exceeds the Cut-Off Date Pool Balance;
(x) any unpaid interest on the Notes and Certificates,
respectively, after such Distribution Date;
(xi) the aggregate Principal Balance of each Class of Notes
and of the Certificates after giving effect to the distribution of
principal on such Payment Date;
(xii) the respective Security Percentage applicable to the
Notes and Certificates, after application of payments made on such
Payment Date;
(xiii) the amount distributed pursuant to Section 3.05(a)(xi)
of the Indenture on such Payment Date;
(xiv) the applicable record dates, accrual periods,
determination dates for calculating distributions and general
distribution dates;
(xv) the total cash flow received and the general sources
thereof;
(xvi) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
(xvii) the amount of any Net Swap Payment payable to the
Derivative Administrator, any Net Swap Payment payable to the Swap
Provider, any Swap Termination Payment payable to the Derivative
Administrator and any Swap Termination Payment payable to the Swap
Provider;
(xviii) the Interest Carry Forward Amount and any Basis Risk
Shortfall Carry Forward Amount for each Class of Certificates;
(xix) the Certificate Principal Balance or Certificate
Notional Amount, as applicable, of each Class after giving effect (i)
to all distributions allocable to principal on such Distribution Date
and (ii) the allocation of any Applied Realized Loss Amounts for such
Distribution Date;
(xx) the number and Stated Principal Balance of the Mortgage
Loans in each Loan Group in respect of which (A) one Scheduled Payment
is Delinquent, (B) two Scheduled Payments are Delinquent, (C) three or
more Scheduled Payments are Delinquent and (D) foreclosure proceedings
have been commenced, in each case as of the close of business on the
last day of the calendar month preceding such Distribution Date and
separately identifying such information for the (1) first lien Mortgage
Loans, (2) second lien Mortgage Loans, and (3) Adjustable Rate Mortgage
Loans, in each such Loan Group; PROVIDED, HOWEVER, that such
information will not be provided on the statements relating to the
first Payment Date;
(xxi) the amount of Advances included in the distribution on
such Distribution Date (including the general purpose of such
Advances), the aggregate amount of unreimbursed Advances at the close
of business on the Distribution Date, and the general source of funds
for reimbursements;
(xxii) the cumulative amount of Applied Realized Loss Amounts
to date;
(xxiii) if applicable, material modifications, extensions or
waivers to Mortgage Loan terms, fees, penalties or payments during the
preceding calendar month or that have become material over time;
(xxiv) with respect to any Mortgage Loan that was liquidated
during the preceding calendar month, the loan number and Stated
Principal Balance of, and Realized Loss on, such Mortgage Loan as of
the close of business on the Determination Date preceding such
Distribution Date;
(xxv) the total number and principal balance of any real
estate owned or REO Properties as of the close of business on the
Determination Date preceding such Distribution Date;
(xxvi) the three month rolling average of the percent
equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of the Mortgage Loans that are 60 days or more
delinquent or are in bankruptcy or foreclosure or are REO Properties,
and the denominator of which is the aggregate Stated Principal Balance
of all of the Mortgage Loans in each case as of the close of business
on the last day of the calendar month preceding such Distribution Date
and separately identifying such information for the (1) first lien
Mortgage Loans, and (2) Adjustable Rate Mortgage Loans;
(xxvii) the Realized Losses during the related Prepayment
Period and the cumulative Realized Losses through the end of the
preceding month;
(xxviii) whether a Trigger Event exists;
(xxix) updated pool composition data including the following
with respect to each Loan Group: average loan balance, weighted average
mortgage rate, weighted average loan-to-value ratio at origination,
weighted average FICO at origination weighted average remaining term;
and [NOTE - Item 1121(a)(8) requires updated pool composition
information, the foregoing is a suggestion of what to provide]
(xxx) information about any additions of, substitutions for or
removal of any Mortgage Loans from the Trust Fund, and any changes in
the underwriting, acquisition or selection criteria as to any Mortgage
Loans added to the Trust Fund.
In the case of information furnished pursuant to clauses (ii) and (iii)
above, the amounts shall be expressed as an aggregate dollar amount per Note or
Certificate with a $1,000 denomination.
Prior to the close of business on the Business Day next succeeding each
Determination Date, the Servicer shall furnish a written statement to the
Depositor, the Owner Trustee, the Depositor, the Certificate Paying Agent and
the Indenture Trustee setting forth (i) all the foregoing information, (ii) the
aggregate amounts required to be withdrawn from the Collection Account and
deposited into the Payment Account on the Business Day preceding the Payment
Date pursuant to Section 3.03 and (iii) the amounts (A) withdrawn from the
Payment Account and deposited to the Funding Account pursuant to Section 8.02(b)
of the Indenture and (B) withdrawn from the Funding Account and deposited to the
Collection Account pursuant to Section 8.02(c)(i) of the Indenture. The
determination by the 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 relying upon the same
without any independent check or verification. In addition, upon the Depositor
's written request, the Servicer shall promptly furnish information reasonably
requested by the Depositor that is reasonably available to the Servicer to
enable the Depositor to perform its federal and state income tax reporting
obligations.
ARTICLE V
DISTRIBUTION AND PAYMENT ACCOUNTS
Section 5.01 DISTRIBUTION ACCOUNT. The Servicer shall establish and
maintain a separate trust account (the "Distribution Account") titled "ISAC MBN
Trust Series 200_-_, [for the benefit of the Noteholders, the Certificateholders
and the Credit Enhancer pursuant to the Indenture, dated as of _______________,
between ISAC MBN Trust Series 200_-_ and [Name of Indenture Trustee]. The
Distribution Account shall be an Eligible Account. On the Business Day prior to
each Payment Date, (i) amounts deposited into the Distribution Account pursuant
to Section 3.03(i) hereof will be distributed by the Servicer in accordance with
Section ____ of the [Trust] Agreement, and (ii) the portion of such amounts then
distributable with respect to the Mortgage Collateral shall be deposited into
the Payment Account. [The Servicer shall invest or cause the institution
maintaining the Distribution Account to invest the funds in the Distribution
Account in Eligible Investments designated in the name of the [Servicer], 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 Distribution Account is maintained may mature on
such Payment Date and (ii) any other investment may mature on such Payment Date
if the Servicer 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 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
Distribution Account by the Servicer out of its own funds immediately as
realized.]
Section 5.02 PAYMENT ACCOUNT. The Indenture Trustee shall establish and
maintain a separate trust account (the "Payment Account") titled
"_______________________, as Indenture Trustee, for the benefit of the
Noteholders, the Certificate Paying Agent and the Credit Enhancer pursuant to
the Indenture, dated as of _______________, between ISAC MBN Trust Series
200_-__ and __________________________________". 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 Servicer, invest or cause the institution maintaining the Payment Account to
invest the funds in the Payment Account in Eligible 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 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
Servicer out of its own funds immediately as realized.
ARTICLE VI
THE SERVICER
Section 6.01 LIABILITY OF THE SERVICER. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Servicer herein.
Section 6.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. Any corporation into which the 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 Servicer
shall be a party, or any corporation succeeding to the business of the Servicer,
shall be the successor of the Servicer, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
The 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
mortgage loans on behalf of FNMA or FHLMC, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Mortgage Collateral), the Depositor and the
Credit Enhancer, is willing to service the Mortgage Loans and executes and
delivers to the Indenture Trustee and the Depositor an agreement, in form and
substance reason ably satisfactory to the Credit Enhancer, the Indenture Trustee
and the Depositor, 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 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) or considered to be below
investment grade without taking into account the Credit Enhancement Instrument.
Section 6.03 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Depositor, the Issuing
Entity, 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 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 Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on any document of any kind PRIMA FACIE properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer and any director
or officer or employee or agent of the Servicer shall be indemnified by the
Depositor 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
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Servicing Agreement) and 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 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 Mortgage Loans in accordance with this Servicing Agreement, and
which in its opinion may involve it in any expense or liability; PROVIDED,
HOWEVER, that the 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 hereunder. 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 Depositor, and the Servicer shall be entitled to be
reimbursed therefor. The Servicer's right to indemnity or reimbursement pursuant
to this Section 6.03 shall survive any resignation or termination of the
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 SERVICER NOT TO RESIGN. Subject to the provisions of
Section 6.02, the 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 activi
ties carried on by it or its subsidiaries or Affiliates, the other activities of
the Servicer so causing such a conflict being of a type and nature carried on by
the Servicer or its subsidiaries or Affiliates at the date of this Servicing
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Depositor, the Administrator
and the Indenture Trustee in writing and such proposed successor servicer is
reasonably acceptable to the Depositor, the Administrator, the Indenture Trustee
and the Credit Enhancer; (b) each Rating Agency shall have delivered a letter to
the Depositor, 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 Servicer hereunder will not result in the reduction
or withdrawal of the then current rating of the Securities; and (c) such
proposed successor servicer is reasonably acceptable to the Credit Enhancer, as
evidenced by a letter to the Depositor and the Indenture Trustee; PROVIDED,
HOWEVER, that no such resignation by the Servicer shall become effective until
such successor servicer or, in the case of (i) above, the Indenture Trustee, as
pledgee of the Mortgage Collateral, shall have assumed the Servicer's
responsibilities and obligations hereunder or the Indenture Trustee, as pledgee
of the Mortgage Collateral, shall have designated a successor servicer in
accordance with Section 7.02. Any such resignation shall not relieve the
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
Servicer. The Servicer shall have no claim (whether by subrogation or otherwise)
or other action against any Securityholder or the Credit Enhancer for any
amounts paid by the Servicer pursuant to any provision of this Servicing
Agreement. Any such determination permitting the resignation of the 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 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 Servicer complies pursuant to
Section 3.01. Such delegation shall not relieve the 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 SERVICER TO PAY INDENTURE TRUSTEE'S AND OWNER TRUSTEE'S
FEES AND EXPENSES; INDEMNIFICATION. (a) The Servicer covenants and agrees to pay
to the Owner Trustee, the Indenture Trustee and any co-trustee of the Indenture
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 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 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 or bad faith.
(b) The 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 or willful misconduct on its part, arising out of, or in
connection with, the acceptance and administration of the Depositor and the
assets thereof, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself 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 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
Depositor, the Indenture Trustee or Owner Trustee, as the case may be,
shall cooperate and consult fully with the Servicer in preparing such
defense; and
notwithstanding anything in this Servicing Agreement to the contrary, the
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 Servicer, which consent shall not be unreasonably withheld.
No termination of this Servicing Agreement shall affect the obligations
created by this Section 6.06 of the 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
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:
(i) Any failure by the Servicer to deposit in the Collection
Account, the Funding 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 Servicer by
the Depositor, the Issuing Entity or the Indenture Trustee or to the
Servicer, the Depositor, the Issuing Entity and the Indenture Trustee
by the Credit Enhancer; or
(ii) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of
the Servicer set forth in the Securi ties 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 Servicer by the Depositor, the
Issuing Entity or the Indenture Trustee or to the Servicer, the
Depositor, the Issuing Entity and the Indenture Trustee by the Credit
Enhancer; or
(iii) The entry against the 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
proceed ings, 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
(iv) The 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
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 proceed ings,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of any appli cable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(v) Any failure by the Sponsor (so long as the Sponsor is the
Servicer) or the Servicer, as the case may be, to pay when due any
amount payable by it under the terms of the Insurance Agreement which
continues unremedied for a period of three (3) Business Days after the
date upon which written notice of such failure shall have been given to
the Sponsor (so long as the Sponsor is the Servicer) or the Servicer,
as the case may be; or
(vi) Failure on the part of the Sponsor or the Servicer to
duly perform in any material respect any covenant or agreement set
forth in the Insurance Agreement, which failure in each case materially
and adversely affects the interests of the Credit Enhancer and
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Depositor, the Indenture Trustee, the
Sponsor or the Servicer, as the case may be, by the Credit Enhancer.
then, and in every such case, other than that set forth in (vi) hereof, so long
as a Servicing Default shall not have been remedied by the Servicer, either the
Depositor, subject to the direction of the Indenture Trustee as pledgee of the
Mortgage Collateral, with the consent of the Credit Enhancer, or the Credit
Enhancer, by notice then given in writing to the Servicer (and to the Depositor
and the Issuing Entity if given by the Credit Enhancer) and in the case of the
event set forth in (vi) hereof, the Credit Enhancer with the consent of
Securityholders at least 51% of the aggregate Principal Balance of the Notes and
the Certificates may terminate all of the rights and obligations of the Servicer
as servicer under this Servicing Agreement other than its right to receive
servicing compensation and expenses for servicing the Mortgage Loans hereunder
during any period prior to the date of such termination and the Depositor,
subject to the direction of the Indenture Trustee as pledgee of the Mortgage
Collateral, 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 Servicer shall also be given to each Rating Agency, the Credit Enhancer,
the Depositor and the Issuing Entity. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Servicing Agreement, whether with respect to the Securities or the Mortgage
Loans or otherwise, shall pass to and be vested in the Depositor, subject to the
direction of the Indenture Trustee as pledgee of the Mortgage Collateral,
pursuant to and under this Section 7.01; and, without limitation, the Depositor
is hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or 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 endorse ment of each Mortgage Loan and related
documents, or otherwise. The Servicer agrees to cooperate with the Depositor in
effecting the termination of the responsibilities and rights of the Servicer
hereunder, including, without limitation, the transfer to the Indenture Trustee
for the administration by it of all cash amounts relating to the Mortgage Loans
that shall at the time be held by the Servicer and to be deposited by it in the
Collection Account, or that have been deposited by the Servicer in the
Collection Account or thereafter received by the Servicer with respect to the
Mortgage 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 Servicer pursuant to this Section 7.01
shall be paid by the predecessor Servicer (or if the predecessor Servicer is the
Indenture Trustee, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Notwithstanding any termination of the activities of the
Servicer hereunder, the Servicer shall be entitled to receive, out of any late
collection of a payment on a Mortgage Loan which was due prior to the notice
terminating the Servicer's rights and obligations hereunder and received after
such notice, that portion to which the Servicer would have been entitled
pursuant to Sections 3.03 and 3.09 as well as its Servicing Fee in respect
thereof, and any other amounts payable to the 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(i) or under Section 7.01(ii) after the applicable
grace periods specified in such Sections, shall not constitute a Servicer
Default if such delay or failure could not be prevented by the exercise of
reasonable diligence by the 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 pre ceding sentence shall
not relieve the 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 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
Servicer shall immediately notify the Indenture Trustee, the Credit Enhancer and
the Owner Trustee in writing of any Servicer Default.
Section 7.02 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) On
and after the time the Servicer receives a notice of termination pursuant to
Section 7.01 or sends a notice pursuant to Section 6.04, the Indenture Trustee
on behalf of the Noteholders shall be the successor in all respects to the
Servicer in its capacity as servicer under this Servicing Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the 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 Servicer in its capacity as Sponsor under the Mortgage Loan Purchase
Agreement, (ii) be responsible or accountable for any act or omission of the
Servicer prior to the issuance of a notice of termination hereunder, (iii)
require or obligate the Indenture Trustee, in its capacity as successor
Servicer, to purchase, repurchase or substitute any Mortgage Loan, (iv) fund any
losses on any Eligible Investment directed by any other Servicer, or (v) be
responsible for the representations and warranties of the Servicer. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the 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 Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee on behalf
of the Mortgage Collateral holders 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 Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; PROVIDED that any such successor
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
Servicer will not result in the qualification, reduction or withdrawal of the
ratings assigned to the Securities by the Rating Agencies. Pending appointment
of a successor to the Servicer hereunder, 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 Mortgage Loans in an amount equal to the compensation which the
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 Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Servicing Agreement prior
to its termination as Servicer (including, without limitation, the obligation to
purchase Mortgage 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 Servicer be liable for any
acts or omissions of the predecessor Servicer or for any breach by such 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 on behalf of the
Noteholders, to the Servicer as servicer shall during the term of its service as
servicer (i) continue to service and administer the Mortgage 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
Servicer hereunder and a fidelity bond in respect of its officers, employees and
agents to the same extent as the Servicer is so required pursuant to Section
3.13.
(c) Any successor Servicer, including the Indenture Trustee on behalf
of the Mortgage Collateral holders, shall not be deemed in default or to have
breached its duties hereunder if the predecessor Servicer shall fail to deliver
any required deposit to the Collection Account or otherwise cooperate with any
required servicing transfer or succession hereunder.
Section 7.03 NOTIFICATION TO SECURITYHOLDERS. Upon any termination or
appointment of a successor to the 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 Depositor, the Issuing Entity 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 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 Servicer, [Name and Address of Servicer], (b) in the case of the
Credit Enhancer, ________________, ________, ______________, Attention:
_________________, ___________________________, (c) in the case of [Moody's,
___________, 4th Floor, 99 Church Street, New York, New York 10007], (d) in the
case of [Standard & Poor's, 26 Broadway, 15th Floor, New York, New York 10004,
Attention: Residential Mortgage Surveillance Group], (e) in the case of the
Owner Trustee, the Corporate Trust Office, and (f) in the case of the Issuing
Entity, to ISAC MBN Trust Series 200_-__, c/o ______________________,
__________________, __________, ______________, Attention:
__________________________, with a copy to the Administrator at ______________
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 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, the Indenture 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 SERVICER OR LIQUIDATION
OF ALL MORTGAGE LOANS. The respective obligations and responsibilities of the
Servicer and the Depositor created hereby shall terminate upon the last action
required to be taken by the Issuing Entity 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 Servicer from the Depositor of all
Mortgage Loans and all property acquired in respect of any Mortgage
Loan at a price equal to the greater of (a) 100% of the unpaid
Principal Balance of each Mortgage Loan, plus accrued and unpaid
interest thereon at the Weighted Average Net Mortgage 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 and (b) the fair market
value of the Mortgage Loans as determined by two bids from competitive
participants in the adjustable home equity loan market.
The right of the Servicer to purchase the assets of the Depositor pursuant to
clause (ii) above is conditioned upon the Pool Balance as of the Final Scheduled
Payment Date being less than ten percent of the aggregate of the Cut-Off Date
Principal Balances of the Mortgage Loans. If such right is exercised by the
Servicer, the 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 relevant
Custodian shall release to the Servicer, the files pertaining to the Mortgage
Loans being purchased.
The Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee and the Owner Trustee for execution, at the time the Mortgage
Loans are to be released to the Servicer, appropriate documents assigning each
such Mortgage Loan from the Depositor to the 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.
Section 8.10 AUTHORITY OF THE ADMINISTRATOR. Each of the parties to
this Agreement ACKNOWLEDGES that the Issuing Entity and the Owner Trustee have
each appointed the Administrator to act as its agent to perform the duties and
obligations of the Issuing Entity hereunder. Unless otherwise instructed by the
Issuing Entity or the Owner Trustee, copies of all notices, requests, demands
and other documents to be delivered to the Issuing Entity or the Owner Trustee
pursuant to the terms hereof shall be delivered to the Administrator. Unless
otherwise instructed by the Issuing Entity or the Owner Trustee, all notices,
requests, demands and other documents to be executed or delivered, and any
action to be taken, by the Issuing Entity or the Owner Trustee pursuant to the
terms hereof may be executed, delivered and/or taken by the Administrator
pursuant to the Administration Agreement.]
IN WITNESS WHEREOF, the Servicer and the Depositor 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.
[NAME OF SERVICER], as Servicer
By_________________________________
Title:
IMPAC SECURED ASSETS CORP.
as Depositor
By_________________________________
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
POWER OF ATTORNEY
EXHIBIT C
CERTIFICATE PURSUANT TO SECTION 3.08
EXHIBIT D
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Collateral, 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) Mortgage Loan
Prepaid in Full Mortgage 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."
_______________________________
[Name of Servicer]
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
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other: ___________________________
_________________________________
Name
_________________________________
Title
_________________________________
Date
EXHIBIT E
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
DEFINITIONS KEY:
PRIMARY SERVICER - transaction party having X - obligation
borrower contact
MASTER SERVICER - aggregator of pool assets [X] - under consideration for
obligation
TRUSTEE - waterfall calculator (may be the
Master Servicer)
BACK-UP SERVICER - named in the transaction
(in the event a Back up Servicer
becomes the Primary Servicer, follow
Primary Servicer obligations)
CUSTODIAN - safe keeper of pool assets
PAYING AGENT - distributor of funds to
ultimate investor
TRUSTEE - fiduciary of the transaction
"NOTE: THE DEFINITIONS ABOVE DESCRIBE THE ESSENTIAL FUNCTION THAT THE PARTY
PERFORMS, RATHER THAN THE PARTY'S TITLE.
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
REG AB REFERENCE SERVICING CRITERIA PRIMARY MASTER CUSTODIAN PAYING TRUSTEE
SERVICER SERVICER AGENT
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
GENERAL SERVICING CONSIDERATIONS
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(1)(i) Policies and procedures are X X X
instituted to monitor any --------
performance or other triggers and (Sec.
events of default in accordance with 9.01)
the transaction agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(1)(ii) If any material servicing activities X X
are outsourced to third parties,
policies and procedures are
instituted to monitor the third
party's performance and compliance
with such servicing activities.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Any requirements in the transaction
agreements to maintain a back-up
servicer for the Pool Assets are
1122(d)(1)(iii) maintained.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(1)(iv) A fidelity bond and errors and X X
omissions policy is in effect on the
party participating in the servicing
function throughout the reporting
period in the amount of coverage
required by and otherwise in
accordance with the terms of the
transaction agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
CASH COLLECTION AND ADMINISTRATION
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(2)(i) Payments on pool assets are X X X
deposited into the appropriate
custodial bank accounts and
related bank clearing accounts no
more than two business
days following receipt, or such other
number of days
specified in the transaction
agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Disbursements made via wire transfer X X X X
on behalf of an obligor or to an
investor are made only by authorized
1122(d)(2)(ii) personnel.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Advances of funds or guarantees X X X X
regarding collections, cash flows or (Sec.
distributions, and any interest or 8.01)
other fees charged for such
advances, are made, reviewed and
approved as specified in the
1122(d)(2)(iii) transaction agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
The related accounts for the [X] X
transaction, such as cash reserve
accounts or accounts established as
a form of over collateralization,
are separately maintained (e.g.,
with respect to commingling of cash)
as set forth in the transaction
1122(d)(2)(iv) agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Each custodial account is maintained X X X
at a federally insured depository
institution as set forth in the
transaction agreements. For purposes
of this criterion, "federally
insured depository institution" with
respect to a foreign financial
institution means a foreign
financial institution that meets the
requirements of Rule 13k-1(b)(1) of
1122(d)(2)(v) the Securities Exchange Act.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Unissued checks are safeguarded so X
1122(d)(2)(vi) as to prevent unauthorized access.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(2)(vii) Reconciliations are prepared on a X X X X
monthly basis for all asset-backed
securities related bank accounts,
including custodial accounts and
related bank clearing accounts.
These reconciliations are (A)
mathematically accurate; (B) prepared
within 30 calendar days after the bank
statement cutoff date, or such other
number of days specified in the
transaction agreements; (C) reviewed
and approved by someone other than the
person who prepared the reconciliation;
and (D) contain explanations for
reconciling items. These reconciling
items are resolved within 90 calendar
days of their original identification,
or such other number of days
specified in the transaction
agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
INVESTOR REMITTANCES AND REPORTING
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(3)(i) Reports to investors, including X X X
those to be filed with the
Commission, are maintained in
accordance with the transaction
agreements and applicable Commission
requirements. Specifically, such
reports (A) are prepared in
accordance with timeframes and other
terms set forth in the transaction
agreements; (B) provide information
calculated in accordance with the
terms specified in the transaction
agreements; (C) are filed with the
Commission as required by its rules
and regulations; and (D) agree with
investors' or the trustee's records
as to the total unpaid principal
balance and number of Pool Assets
serviced by the Servicer.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Amounts due to investors are X X X X
allocated and remitted in accordance
with timeframes, distribution
priority and other terms set forth
1122(d)(3)(ii) in the transaction agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Disbursements made to an investor X X X X
are posted within two business days
to the Servicer's investor records,
or such other number of days
specified in the transaction
1122(d)(3)(iii) agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(3)(iv) Amounts remitted to investors per X X X X
the investor reports agree with
cancelled checks, or other form of
payment, or custodial bank
statements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
POOL ASSET ADMINISTRATION
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(4)(i) Collateral or security on pool X X
assets is maintained as required by
the transaction agreements or
related pool asset documents.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(4)(ii) Pool assets and related documents X X
are safeguarded as required by the
transaction agreements
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(4)(iii) Any additions, removals or X X X
substitutions to the asset pool are
made, reviewed and approved in
accordance with any conditions or
requirements in the transaction
agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(4)(iv) Payments on pool assets, including X
any payoffs, made in accordance with
the related pool asset documents are
posted to the Servicer's obligor
records maintained no more than two
business days after receipt, or such
other number of days specified in
the transaction agreements, and
allocated to principal, interest or
other items (e.g., escrow) in
accordance with the related pool
asset documents.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
The Servicer's records regarding the X
pool assets agree with the
Servicer's records with respect to
an obligor's unpaid principal
1122(d)(4)(v) balance.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Changes with respect to the terms or X X
status of an obligor's pool assets
(e.g., loan modifications or
re-agings) are made, reviewed and
approved by authorized personnel in
accordance with the transaction
agreements and related pool asset
1122(d)(4)(vi) documents.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Loss mitigation or recovery actions X X
(e.g., forbearance plans,
modifications and deeds in lieu of
foreclosure, foreclosures and
repossessions, as applicable) are
initiated, conducted and concluded
in accordance with the timeframes or
other requirements established by
1122(d)(4)(vii) the transaction agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(4)(viii) Records documenting collection X
efforts are maintained during the
period a pool asset is delinquent in
accordance with the transaction
agreements. Such records are
maintained on at least a monthly
basis, or such other period
specified in the transaction
agreements, and describe the
entity's activities in monitoring
delinquent pool assets including,
for example, phone calls, letters
and payment rescheduling plans in
cases where delinquency is deemed
temporary (e.g., illness or
unemployment).
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(4)(ix) Adjustments to interest rates or X X
rates of return for pool assets with
variable rates are computed based on
the related pool asset documents.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
1122(d)(4)(x) Regarding any funds held in trust X
for an obligor (such as escrow
accounts): (A) such funds are
analyzed, in accordance with the
obligor's pool asset documents, on
at least an annual basis, or such
other period specified in the
transaction agreements; (B) interest
on such funds is paid, or credited,
to obligors in accordance with
applicable pool asset documents and
state laws; and (C) such funds are
returned to the obligor within 30
calendar days of full repayment of
the related pool assets, or such
other number of days specified in
the transaction agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Payments made on behalf of an X
obligor (such as tax or insurance
payments) are made on or before the
related penalty or expiration dates,
as indicated on the appropriate
bills or notices for such payments,
provided that such support has been
received by the servicer at least 30
calendar days prior to these dates,
or such other number of days
specified in the transaction
1122(d)(4)(xi) agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Any late payment penalties in X
connection with any payment to be made
on behalf of an obligor are paid from
the Servicer's funds and not charged
to the obligor, unless the late
payment was due to the obligor's error
1122(d)(4)(xii) or omission.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Disbursements made on behalf of an X
obligor are posted within two
business days to the obligor's records
maintained by the servicer, or such
other number of days specified in
1122(d)(4)(xiii) the transaction agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Delinquencies, charge-offs and X X
uncollectible accounts are
recognized and recorded in
accordance with the transaction
1122(d)(4)(xiv) agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Any external enhancement or other X
support, identified in Item
1114(a)(1) through (3) or Item 1115
of Regulation AB, is maintained as
set forth in the transaction
1122(d)(4)(xv) agreements.
- ------------------- -------------------------------------- ---------- ----------- ------------ --------- ---------
Schedule 1
Mortgage Insurance Component Schedule