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FOR GNMA MORTGAGE LOANS

 

by and between

 

 

 

and

 

 

(Purchaser)

 

 

 

 

ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES		2
Section 1.01	Definitions.	2
Section 1.02	General Interpretive Principles	12
ARTICLE II PROCEDURES; ITEMS TO BE DELIVERED		13
Section 2.01	Sale of Current Excess Servicing Spread	13
Section 2.02	[Reserved]	13
Section 2.03	Items to be Delivered on the Agreement Date	13
Section 2.04	Items to be Delivered on the Sale Date	14
Section 2.05	Sale Date Transactions	16
ARTICLE III PAYMENTS AND DISTRIBUTIONS		16
Section 3.01	Purchase Price	16
Section 3.02	Payments by Purchaser	18
Section 3.03	Accounts	18
Section 3.04	Priority of Payments	21
Section 3.05	Withdrawals from the Current Spread Reserve Account	22
Section 3.06	Payment to Seller of Base Servicing Fee	22
Section 3.07	Intent and Characterization	23
ARTICLE IV [RESERVED]		23
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER		23
Section 5.01	Due Organization and Good Standing	23
Section 5.02	Authority and Capacity	24
Section 5.03	Agency Agreements.	24
Section 5.04	Title to the Mortgage Servicing Rights	25
Section 5.05	Effective Agreements	25
Section 5.06	No Accrued Liabilities	25
Section 5.07	Seller/Servicer Standing	25
Section 5.08	MERS Membership	25
Section 5.09	Agency Set-off Rights	26
Section 5.10	Ability to Perform; Solvency	26
Section 5.11	Material Documents	26
Section 5.12	Obligations with Respect to Origination	26
Section 5.13	No Actions.	27
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE  LOANS AND SERVICING		27
Section 6.01	Servicing Agreements; Applicable Laws	27

Section 6.02	Related Escrow Accounts	27
Section 6.03	Accuracy of Servicing Information	27
Section 6.04	No Purchaser Responsibility	27
Section 6.05	Location of Credit Files	28
Section 6.06	Representations Concerning the Current Excess Servicing Spread	28
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER		29
Section 7.01	Due Organization and Good Standing	29
Section 7.02	Authority and Capacity	29
Section 7.03	Effective Agreements	29
Section 7.04	Sophisticated Investor	30
Section 7.05	No Actions	30
ARTICLE VIII SELLER COVENANTS		30
Section 8.01	Servicing Obligations	30
Section 8.02	Cooperation; Further Assurances	31
Section 8.03	Financing Statements	31
Section 8.04	Supplemental Information	31
Section 8.05	Access to Information	31
Section 8.06	Home Affordable Modification Program	32
Section 8.07	Distribution Date Data Tapes and Reports	32
Section 8.08	Financial Statements and Officer’s Certificates	34
Section 8.09	Monthly Management Calls	35
Section 8.10	Timely Payment of Agency Obligations	35
Section 8.11	Servicing Agreements	35
Section 8.12	Transfer of Mortgage Servicing Rights	35
Section 8.13	Consents to Transaction Documents	36
Section 8.14	Accounts	36
Section 8.15	Notification of Certain Events	36
Section 8.16	Financing; Pledge of Current Excess Servicing Spread	36
Section 8.17	Existence, etc	37
Section 8.18	Consent to Sub-Servicing	38
Section 8.19	Nonpetition Covenant	38
Section 8.20	Data Tape; Schedule of Mortgage Loans	38
Section 8.21	Insurance.	38
Section 8.22	Defense of Title.	38
Section 8.23	Refinancing of Mortgage Loans.	39
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER		39
Section 9.01	Correctness of Representations and Warranties	39
Section 9.02	Compliance with Conditions	39

Section 9.03	Corporate Resolution	39
Section 9.04	No Material Adverse Change	40
Section 9.05	Consents	40
Section 9.06	Delivery of Transaction Documents	40
Section 9.07	Certificate of Seller	40
Section 9.08	Valuation	41
Section 9.09	Opinions of Counsel	41
Section 9.10	Acquisition of Mortgage Servicing Rights by Seller	41
Section 9.11	Good Standing Certificate of Seller	41
Section 9.12	No Actions or Proceedings.	41
Section 9.13	Fees, Costs and Expenses.	41
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER		41
Section 10.01	Correctness of Representations and Warranties	42
Section 10.02	Compliance with Conditions	42
Section 10.03	Corporate Resolution	42
Section 10.04	No Material Adverse Change	42
Section 10.05	Certificate of Purchaser	42
Section 10.06	Good Standing Certificate of Purchaser	42
ARTICLE XI INDEMNIFICATION; CURE		43
Section 11.01	Indemnification by Seller	43
Section 11.02	Indemnification by Purchaser	45
Section 11.03	Award of Damages	46
Section 11.04	Other Rights	47
ARTICLE XII MISCELLANEOUS		47
Section 12.01	Costs and Expenses	47
Section 12.02	Confidentiality	47
Section 12.03	Broker’s Fees	48
Section 12.04	Relationship of Parties	49
Section 12.05	Survival of Representations and Warranties	49
Section 12.06	Notices	49
Section 12.07	Waivers	49
Section 12.08	Entire Agreement; Amendment	50
Section 12.09	Binding Effect	50
Section 12.10	Headings	50
Section 12.11	Applicable Law	50
Section 12.12	Incorporation of Exhibits	50
Section 12.13	Counterparts	51
Section 12.14	Severability of Provisions	51
Section 12.15	Public Announcement	51
Section 12.16	Assignment	51
Section 12.17	Termination	52
Section 12.18	Third Party Beneficiaries	52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)           The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

 

 

(b)           Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

 

(c)           References herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

 

(d)           A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

 

(e)           The words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and

 

(f)            The term “include” or “including” shall mean without limitation by reason of enumeration.

 

 

 

Section 2.01         Sale of Current Excess Servicing Spread.

 

 

Section 2.02         [Reserved].

 

Section 2.03         Items to be Delivered on the Agreement Date.

 

 

(a)           This Agreement and all agreements, certificates, opinions and instruments required to be delivered pursuant to this Agreement on the Agreement Date;

 

 

(b)           The Future Spread Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Future Spread Agreement on the Agreement Date; and

 

(c)           The executed Purchase and Sale Agreement.

 

Section 2.04         Items to be Delivered on the Sale Date.

 

(a)           On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:

 

 

 

(iii)       All agreements, certificates, opinions and instruments required to be delivered pursuant to this Agreement and Future Spread Agreement on the Sale Date;

 

(iv)      All agreements, certificates, opinions and instruments required to be delivered under the executed Purchase and Sale Agreement reasonably related to the transactions contemplated hereunder that are required to be delivered on the Sale Date;

 

(v)       The executed Current Spread Distribution Account Agreement;

 

(vi)      The executed Current Spread Distribution Account Control Agreement;

 

(vii)     The executed Current Spread Reserve Account Agreement;

 

(viii)    The executed Current Spread Reserve Account Control Agreement;

 

(ix)       An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;

 

(x)        An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Current Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;

 

(xi)       An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the sale of Current Excess Servicing Spread to Purchaser hereunder;

 

(xii)      A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Closing  Date to be delivered by Seller;

 

(xiii)     A secretary’s certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;

 

(xiv)     An officer’s certificate of Seller that all conditions precedent to the purchase of the Mortgage Servicing Rights under the Purchase and Sale Agreement have been satisfied (or if waived, such waiver has been approved by Purchaser);

 

(xv)      A duly executed corporate certificate of Seller required by Section 9.07 dated as of the Sale Date;

 

(xvi)     A duly executed corporate certificate of Purchaser required by Section 10.05 dated as of the Sale Date;

 

 

(xviii)   A UCC-1 financing statement relating to the security interest of Purchaser in the Current Excess Servicing Spread, in form and substance reasonably acceptable to Purchaser.

 

(b)           On the Sale Date, subject to the satisfaction of the terms and conditions herein, Seller shall provide Purchaser with copies of the following:

 

 

(i)         Any amendments, modifications or restatements of the Purchase and Sale Agreement;

 

(ii)        The bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller;

 

(iii)       The executed Power of Attorney; and

 

(iv)       The final Schedule of Mortgage Loans as of the Cut-off Date (including all of the contents set forth in Exhibit A to the Purchase and Sale Agreement).

 

Section 2.05         Sale Date Transactions.

 

 

 

 

 

 

Section 3.01         Purchase Price.

 

 

 

 

Section 3.02         Payments by Purchaser.

 

 

 

Section 3.03         Accounts.

 

 

 

(b)       Third Party Controlled Current Spread Distribution Account.

 

 

(i)            The Third Party Controlled Current Spread Distribution Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections with respect to the Mortgage Loans, MSR Successor Proceeds, Sales Proceeds and Repurchase Prices.  The Third Party Controlled Current Spread Distribution Account will be established pursuant to the Current Spread Distribution Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control.  So long as permitted by the Current Spread Distribution Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Current Spread Distribution Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Current Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Current Spread Distribution Account.  Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchaser’s interest in the Third Party Controlled Current Spread Distribution Account.

 

(ii)          Each of the Seller and the Purchaser shall remit any MSR Successor Proceeds received by such party after the Sale Date directly to the Third Party Controlled Current Spread Distribution Account.  The Purchaser shall remit any proceeds received by the Purchaser in connection with the sale of the Mortgage Servicing Rights and appointment of a successor servicer following the termination of the Seller, as servicer of the Mortgage Loans, by the Agency in excess of MSR Successor Proceeds to the Seller, as directed by the Seller.

 

(iii)          Seller shall direct each payer of Sales Proceeds to remit such payments directly to the Third Party Controlled Current Spread Distribution Account.

 

(iv)          Seller shall direct Bank of America to remit any Repurchase Price under the Purchase and Sale Agreement, directly to the Third Party Controlled Current Spread Distribution Account.

 

(v)           If Seller receives any amounts required to be deposited into the Third Party Controlled Current Spread Distribution Account in error, Seller shall promptly remit such funds to the Third Party Controlled Current Spread Distribution Account.

 

(c)        Current Spread Reserve Account.  The Current Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser.  The Current Spread Reserve Account will be established pursuant to the Current Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control.  So long as permitted by the Current Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Current Spread Reserve Account strictly in accordance with Section 3.05.  Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchaser’s interest in the Current Spread Reserve Account.

 

 

 

 

(d)       Agency Reserve Account.  On the Closing Date, the Purchaser shall establish the Agency Reserve Account, which shall be pledged to Ginnie Mae pursuant to the GNMA Acknowledgment Agreement.  The Agency Reserve Account shall be available for Claims and Losses payable to Ginnie Mae pursuant to Section 8(e) of the GNMA Acknowledgement Agreement.  The Reserve Account Deposit Amount shall be deposited in the Agency Reserve Account pursuant to the Priority of Payments until the amounts on deposit in the Agency Reserve Account are equal to the Target Reserve Account.  On any Distribution Date, if the amount on deposit in the Agency Reserve Account exceeds the Target Reserve Amount, such excess shall be released to Purchaser.

 

 

Section 3.04          Priority of Payments.

 

 

(a)       first, on each Distribution Date, to pay to the parties necessary to cure the failure of the issuer to make a required remittance to security holders then-outstanding under the Ginnie Mae Contract;

 

(b)       second, from amounts in the Third Party Controlled Current Spread Distribution Account attributable to MSR Successor Proceeds, pro rata, (A) the Current Excess Servicing Spread Percentage of such MSR Successor Proceeds to Purchaser, and (B) the Retained Servicing Spread Percentage of such MSR Successor Proceeds to Seller; provided, that (I) prior to the distribution to Purchaser of any MSR Successor Proceeds pursuant to clause (A), such MSR Successor Proceeds shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and second, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any MSR Successor Proceeds pursuant to clause (B), such MSR Successor Proceeds shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount.

 

(c)       third, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller;

 

(d)       fourth, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 3.04(c), any accrued and unpaid Base Servicing Fee to Seller;

 

 

(e)        fifth, on each Distribution Date, pro rata, (A) to Purchaser, any Current Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of MSR Successor Proceeds paid pursuant to Section 3.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of MSR Successor Proceeds paid pursuant to Section 3.04(a)); provided, that (I) prior to the distribution to Purchaser of any Current Excess Servicing Spread pursuant to clause (A), the Current Excess Servicing Spread shall be applied first, to the Agency Reserve Account for the payment of the Reserve Account Deposit Amount, second, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and third, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount; and

 

(f)        sixth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Current Spread Distribution Account.

 

 

Section 3.05          Withdrawals from the Current Spread Reserve Account.

 

 

Section 3.06          Payment to Seller of Base Servicing Fee.

 

 

 

Section 3.07          Intent and Characterization.

 

(a)        Seller and Purchaser intend that the sale of the Current Excess Servicing Spread pursuant to this Agreement constitutes a valid sale of such Current Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to the Current Excess Servicing Spread not be part of Seller’s estate in the event of the bankruptcy of Seller.  Seller and Purchaser intend and agree to treat the transfer and assignment of the Current Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes.  Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.

 

(b)       In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the Purchase Price.

 

 

 

 

 

 

 

 

Section 5.01          Due Organization and Good Standing.

 

 

Section 5.02          Authority and Capacity.

 

 

Section 5.03          Agency Agreements.

 

 

 

Section 5.04          Title to the Mortgage Servicing Rights.

 

 

Section 5.05          Effective Agreements.

 

 

Section 5.06          No Accrued Liabilities.

 

 

Section 5.07          Seller/Servicer Standing.

 

 

Section 5.08          MERS Membership.

 

 

 

Section 5.09          Agency Set-off Rights.

 

 

Section 5.10          Ability to Perform; Solvency.

 

 

Section 5.11          Material Documents.

 

 

Section 5.12          Obligations with Respect to Origination.

 

 

 

Section 5.13          No Actions.

 

 

 

 

 

Section 6.01          Servicing Agreements; Applicable Laws.

 

 

Section 6.02          Related Escrow Accounts.

 

 

Section 6.03          Accuracy of Servicing Information.

 

 

Section 6.04          No Purchaser Responsibility.

 

 

 

Section 6.05          Location of Credit Files.

 

 

Section 6.06          Representations Concerning the Current Excess Servicing Spread.

 

(a)        Seller has not assigned, pledged, conveyed, or encumbered the Current Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Current Excess Servicing Spread on the Sale Date, Seller was the sole owner of the Current Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the Agency under the Servicing Agreements, free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Current Excess Servicing Spread.  No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Current Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.

 

(b)       The sale by Seller to Purchaser of the Current Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such sale.

 

(c)        As contemplated under Section 3.07(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as “Secured Party” and Seller as “Debtor”, and describing the Current Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit I attached hereto, the Seller has taken all steps necessary under the UCC to perfect the sale of the Current Excess Servicing Spread to Purchaser and all right, title and interest of Purchaser in, to and under the Current Excess Servicing Spread.

 

(d)       Purchaser has and will continue to have the full right, power and authority to pledge the Current Excess Servicing Spread, and the Current Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to the Agency’s consent.

 

(e)       Each Servicing Agreement constitutes an Eligible Servicing Agreement.

 

 

 

 

 

Section 7.01          Due Organization and Good Standing.

 

 

Section 7.02          Authority and Capacity.

 

 

Section 7.03          Effective Agreements.

 

 

 

Section 7.04          Sophisticated Investor.

 

 

Section 7.05          No Actions.

 

 

 

 

 

Section 8.01          Servicing Obligations.

 

(a)       Seller shall pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Agency, the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and in accordance with the Purchase and Sale Agreement.

 

(b)       Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller or Bank of America.

 

(c)        Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the Agency for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.

 

(d)       Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of the Agency.

 

 

Section 8.02      Cooperation; Further Assurances.

 

 

Section 8.03      Financing Statements.

 

 

Section 8.04      Supplemental Information.

 

 

Section 8.05      Access to Information.

 

 

 

Section 8.06      Home Affordable Modification Program.

 

 

Section 8.07      Distribution Date Data Tapes and Reports.

 

 

(a)       An Electronic Data File in form and substance acceptable to Purchaser containing, for each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;

 

(b)       A Summary Activity Report with respect to the Mortgage Loans with respect to the prior Collection Period containing:

 

(i)           aggregate beginning principal balance as of the first and last date of the Collection Period,

 

(ii)           aggregate regular principal collected,

 

(iii)          aggregate noncash principal,

 

(iv)         aggregate interest collected,

 

(v)          aggregate liquidation principal,

 

(vi)         aggregate curtailments,

 

(vii)        liquidations,

 

(viii)       short sales,

 

 

(ix)          (1) for each Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage, interest rate, the loan-to-value ratio and the FICO score, and (2) for each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;

 

(c)       A Delinquency Report with respect to the Mortgage Loans containing:

 

(i)            The aggregate outstanding principal balance of the Mortgage Loans  and percentages of the aggregate outstanding principal balance of the Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:

 

(1)          Current Mortgage Loans,

 

(2)          0-29 days delinquent,

 

(3)          30-59 days delinquent,

 

(4)          60-89 days delinquent,

 

(5)          90 days or more delinquent,

 

(6)          Mortgage Loans in Foreclosure,

 

(7)          Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and

 

(8)          Mortgage Loans in which the Mortgagor is in bankruptcy;

 

 

(ii)           For each of the above categories, a roll report showing the migration of Mortgage Loans in such category from the last day of the second prior Collection Period;

 

(d)       A Disbursement Report for such Distribution Date containing:

 

(i)            The Servicing Spread Collections for the prior Collection Period,

 

(ii)           The Base Servicing Fee paid to Seller,

 

(iii)          The amount of the Current Excess Servicing Spread paid to Purchaser,

 

(iv)          The amount of funds, if any, transferred to the Current Spread Reserve Account,

 

(v)           The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Current Spread Distribution Account or the Current Spread Reserve Account, and

 

(vi)          The amount of funds paid to Seller from the Current Spread Reserve Account.

 

Section 8.08     Financial Statements and Officer’s Certificates.

(a)       If Seller’s financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Seller’s most recent audited quarterly financial statements within 45 days of the end of each of Seller’s fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Seller’s fiscal years.

 

(b)       Within 45 days of the end of each of Seller’s fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Seller’s consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).

 

 

Section 8.09     Monthly Management Calls.

 

 

 

Section 8.10     Timely Payment of Agency Obligations.

 

 

Section 8.11     Servicing Agreements.

 

 

Section 8.12      Transfer of Mortgage Servicing Rights.

 

 

 

Section 8.13     Consents to Transaction Documents.

 

 

Section 8.14     Accounts.

 

 

Section 8.15     Notification of Certain Events.

 

 

Section 8.16      Financing; Pledge of Current Excess Servicing Spread.

 

 

 

Section 8.17     Existence, etc.

 

 

(a)       preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;

 

(b)       comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;

 

(c)       keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;

 

(d)       not move its chief executive office or chief operating office from the addresses referred to in Exhibit I unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;

 

(e)       pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained.  Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;

 

(f)        keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;

 

(g)       keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document;

 

 

(h)       maintain its status as a Ginnie Mae issuer and as a HUD approved mortgagee/servicer; and

 

(i)        comply with its obligations under the Transaction Documents to which it is a party, and each other agreement entered into with the Agency.

 

Section 8.18     Consent to Sub-Servicing.

 

 

Section 8.19      Nonpetition Covenant.

 

 

Section 8.20     Data Tape; Schedule of Mortgage Loans.

 

 

Section 8.21     Insurance.

 

 

Section 8.22     Defense of Title.

 

 

 

Section 8.23     Refinancing of Mortgage Loans.

 

 

 

 

 

Section 9.01     Correctness of Representations and Warranties.

 

 

Section 9.02     Compliance with Conditions.

 

 

Section 9.03     Corporate Resolution.

 

 

 

Section 9.04     No Material Adverse Change.

 

 

Section 9.05     Consents.

 

 

Section 9.06     Delivery of Transaction Documents.

 

 

Section 9.07     Certificate of Seller.

 

 

 

Section 9.08          Valuation.

 

 

Section 9.09          Opinions of Counsel.

 

 

 

Section 9.10          Acquisition of Mortgage Servicing Rights by Seller.

 

 

Section 9.11          Good Standing Certificate of Seller.

 

 

Section 9.12          No Actions or Proceedings.

 

 

Section 9.13          Fees, Costs and Expenses.

 

 

 

 

 

 

Section 10.01          Correctness of Representations and Warranties.

 

 

Section 10.02          Compliance with Conditions.

 

 

Section 10.03          Corporate Resolution.

 

 

Section 10.04          No Material Adverse Change.

 

 

Section 10.05          Certificate of Purchaser.

 

 

Section 10.06          Good Standing Certificate of Purchaser.

 

 

 

 

 

Section 11.01          Indemnification by Seller.

 

(a)          Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the “Purchaser Indemnitees”) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Sale Date which result from:

 

(i)            Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement or the Assignment Agreement;

 

(ii)           Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;

 

(iii)          Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;

 

(iv)          Any exercise of any rights of setoff or other netting arrangements by the Agency against Seller that results in a decrease in MSR Successor Proceeds or in a shortfall of funds to pay the Current Excess Servicing Spread;

 

(v)           Any breach by Seller of the Purchase and Sale Agreement;

 

(vi)          Any payments made pursuant to clause first of Section 3.04(a) hereof;

 

(vii)         Any amounts paid to Ginnie Mae from the Agency Reserve Account;

 

 

(viii)        Seller not maintaining a “Secured Party” under the GNMA Acknowledgment Agreement or any breach of the GNMA Acknowledgment Agreement by the “Secured Party” thereunder; and

 

(ix)           Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i) – (viii) above;

 

 

 

(b)          REIT Requirements.   Notwithstanding anything in Section 11.01(a) above, in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under ARTICLE XI hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT.  

 

 

Section 11.02          Indemnification by Purchaser.

 

 

(a)          Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and

 

(b)          Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;

 

 

 

Section 11.03          Award of Damages.

 

(a)          

 

(i)             In the event that an award of damages or other payments is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach had an adverse impact on the value of the Total Servicing Spread, the Current Excess Servicing Spread Percentage of that award shall be distributed to Purchaser or its designee and the remainder of that award shall be distributed to Seller or its designee.

 

(ii)            In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of  the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach did not have an adverse impact on the value of the Total Servicing Spread, the entirety of the award shall be distributed to Seller or its designee.

 

 

(b)          In the event that a Party or designee of a Party receives an award pursuant to Sections 11.03(a)(i) or (ii) and some or all of that amount is to be distributed to the other Party or a designee of the other Party pursuant to Sections 11.03(a)(i) or (ii), the Party or the Party’s designee in possession of the applicable amount shall promptly notify the other Party or the other Party’s designee as to the award’s existence and request that the other Party or other Party’s designee, as applicable, designate an account to which the amount shall be remitted.  Once the necessary account information has been provided by the appropriate Party or designee of a Party, the applicable amount shall be remitted by wire transfer of immediately available federal funds to the account so designated.

 

(c)          Two Business Days prior to each Distribution Date, the Seller shall, provide Purchaser with a monthly report of all claims and legal disputes made or pending with Bank of America during the prior month, including the amounts of any claims made or resolved during such month.

 

Section 11.04          Other Rights.

 

(a)          The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the GNMA Acknowledgment Agreement.

 

(b)          To the extent that Bank of America returns any proceeds to Seller in connection with a failed transaction pursuant to Section 7.02 of the Purchase and Sale Agreement, the Seller shall promptly pay to the Purchaser, the Purchaser’s portion of such proceeds.

 

 

 

Section 12.01          Costs and Expenses.

 

 

Section 12.02          Confidentiality.

 

 

Section 12.03          Broker’s Fees.

 

 

Section 12.04          Relationship of Parties.

 

 

Section 12.05          Survival of Representations and Warranties.

 

 

Section 12.06          Notices.

 

 

(a)          If to Purchaser, to:

 

(212) 479-5343

 

(b)          If to Seller, to:

 

 

Section 12.07          Waivers.

 

 

 

(a)          Extend the time for the performance of any of the obligations or other transactions of the other; and

 

(b)          Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other here­under.

 

 

Section 12.08          Entire Agreement; Amendment.

 

 

Section 12.09          Binding Effect.

 

 

Section 12.10          Headings.

 

 

Section 12.11          Applicable Law.

 

 

Section 12.12          Incorporation of Exhibits.

 

 

 

Section 12.13          Counterparts.

 

 

Section 12.14          Severability of Provisions.

 

 

Section 12.15          Public Announcement.

 

 

Section 12.16          Assignment.

 

(a)          Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Seller’s interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Seller’s obligations under this Agreement.  Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Current Excess Servicing Spread and to assign the related rights under this Agreement.  If Purchaser assigns any rights under this Agreement to a third party (a “Third Party Assignment“), such third party (a “Third Party Assignee“) shall enter into a new agreement (a “Third Party Current Spread Agreement“) with Seller or Seller’s assignee that provides such Third Party Assignee with the same rights with respect to the Current Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.

 

 

(b)          Seller shall maintain a register on which it enters the name and address of each holder of the Current Excess Servicing Spread and each holder’s interest in the Current Excess Servicing Spread (the “Holder Register”) for each transaction described in Section 12.16(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Current Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.

 

Section 12.17          Termination.

 

 

Section 12.18          Third Party Beneficiaries.

 

 

 

 

 

	MSR VIII LLC Purchaser
	By:	/s/ Brian Sigman
	Name:	Brian Sigman
	Title:	Chief Financial Officer
	NATIONSTAR MORTGAGE LLC
	Seller
	By:	/s/ Amar Patel
	Name:	Amar Patel
	Title:	Executive Vice President

 

 

 

 

 

 

	NATIONSTAR MORTGAGE LLC
	Seller
	By:
	Name:
	Title:

 

 

 

(a)	(b)	(c)	(d)	(e)	(f) (column  (d) – column (e))	(g) ([  ]% of column (f))
Sale Date	Loan # of Mortgage Loan	Principal Balance of Mortgage Loan as of the Sale Date	Servicing Spread Rate	Base Servicing Fee Rate	Net Servicing Spread Rate	Current Excess Servicing Spread

 

 

 

 

 

 

 

 

 

 

 

(i)          Each of the Company’s representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;

 

 

(ii)          All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;

 

 

(iii)          The conditions set forth in Sections 9.04 and 9.05 of the Agreement have been satisfied; and

 

 

(iv)          As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of Company’s consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

LOCATION OF CREDIT FILES

 

 

 

 

 

[DELIVERED SEPARATELY]

 

 

 

FORM OF DELINQUENCY REPORT