Exhibit 10.6
RWT HOLDINGS, INC.
Owner
MORGAN STANLEY CREDIT CORPORATION
Servicer
and
REDWOOD TRUST, INC.
Guarantor
 
MASTER SERVICING AGREEMENT
Dated as of November 1, 2006
Fixed, Adjustable Rate and Additional Collateral Mortgage Loans
Flow Delivery Program

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TABLE OF CONTENTS

              Page  
ARTICLE I DEFINITIONS
    1  
Section 1.01 Defined Terms
    1  
 
       
ARTICLE II BOOKS AND RECORDS; TRANSFER OF MORTGAGE LOANS
    6  
Section 2.01 Books and Records
    6  
Section 2.02 Transfer of Mortgage Loans
    6  
 
       
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SERVICER
    6  
Section 3.01 Representations and Warranties of the Servicer
    6  
 
       
ARTICLE IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
    8  
Section 4.01 Role of the Servicer
    8  
Section 4.02 Collection of Mortgage Loan Payments
    9  
Section 4.03 Realization Upon Defaulted Mortgage Loans
    10  
Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial Accounts
    10  
Section 4.05 Permitted Withdrawals From the Custodial Account
    11  
Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts
    12  
Section 4.07 Permitted Withdrawals From Escrow Account
    13  
Section 4.08 Transfer of Accounts
    13  
Section 4.09 [INTENTIONALLY OMITTED]
    13  
Section 4.10 Errors and Omissions Insurance
    13  
Section 4.11 Title Management and Disposition of REO Property
    14  
Section 4.12 Adjustments to Mortgage Interest Rates
    15  
Section 4.13 Subservicing Agreements Between the Servicer and Subservicers
    15  
Section 4.14 Successor Subservicers
    16  
Section 4.15 Liability of the Servicer
    16  
Section 4.16 Assumption or Termination of Subservicing Agreements
    16  
Section 4.17 Servicing Accounts
    17  
Section 4.18 Permitted Investments
    17  
Section 4.19 Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Mortgage Insurance Policies; Collections Thereunder
    17  
Section 4.20 Maintenance of Hazard Insurance
    18  
 
       
ARTICLE V ADMINISTRATION AND SERVICING OF TRADING ACCOUNTS
    19  
Section 5.01 The Servicer to Service Trading Accounts
    19  
Section 5.02 Agreements with Respect to the Surety Bond
    20  
 
       
ARTICLE VI PAYMENTS TO OWNER
    21  
Section 6.01 Distributions
    21  
Section 6.02 Statements to Owner
    21  
Section 6.03 Monthly Advances by the Servicer
    21  
Section 6.04 Compensating Interest
    22  

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              Page  
ARTICLE VII GENERAL SERVICING PROCEDURE
    23  
Section 7.01 Assumption Agreements
    23  
Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files
    23  
Section 7.03 Servicing Compensation
    23  
Section 7.04 Annual Statement as to Compliance and Attestation
    24  
Section 7.05 Owner’s Right to Examine the Servicer Records
    24  
 
       
ARTICLE VIII REPORTS TO BE PREPARED BY SERVICER
    25  
Section 8.01 The Servicer Shall Provide Information as Reasonably Required
    25  
 
       
ARTICLE IX THE SERVICER
    25  
Section 9.01 Indemnification; Third Party Claims
    25  
Section 9.02 Merger or Consolidation of the Servicer
    26  
Section 9.03 Limitation on Liability of the Servicer and Others
    26  
Section 9.04 The Servicer Not to Resign
    26  
 
       
ARTICLE X DEFAULT
    27  
Section 10.01 Events of Default
    27  
Section 10.02 Waiver of Defaults
    28  
 
       
ARTICLE XI TERMINATION; REPURCHASE
    28  
Section 11.01 Termination
    28  
Section 11.02 Repurchase
    28  
 
       
ARTICLE XII MISCELLANEOUS PROVISIONS
    29  
Section 12.01 Successor to the Servicer
    29  
Section 12.02 Amendment
    30  
Section 12.03 Assignments
    30  
Section 12.04 Assignment of Servicing Rights
    30  
Section 12.05 Governing Law
    30  
Section 12.06 Notices
    30  
Section 12.07 Severability Provisions
    31  
Section 12.08 Exhibits
    31  
Section 12.09 General Interpretive Principles
    31  
Section 12.10 Reproduction of Documents
    32  
Section 12.11 Successors and Assigns
    32  
Section 12.12 Counterparts
    32  
Section 12.13 Non-Solicitation
    32  
Section 12.14 Guaranty of Owner’s Obligations
    33  
 
       
ARTICLE XIII COMPLIANCE WITH REGULATION AB
    33  
Section 13.01 Intent of the Parties; Reasonableness
    33  
Section 13.02 Additional Representations and Warranties of the Servicer
    33  
Section 13.03 Information to Be Provided by the Servicer
    34  
Section 13.04 Annual Statements as to Compliance
    37  
Section 13.05 Report on Assessment of Compliance and Attestation
    38  
Section 13.06 Use of Subservicers and Subcontractors
    39  

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              Page  
Section 13.07 Indemnification; Remedies
    40  
Section 13.08 Third Party Beneficiary
    42  
 
       
EXHIBIT A
       
FORM OF LIMITED POWER OF ATTORNEY
       
 
       
EXHIBIT B
       
FORM OF MONTHLY SERVICER REPORT
       
 
       
EXHIBIT C
       
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
       
 
       
EXHIBIT D
       
FORM OF ANNUAL CERTIFICATION
       

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MORTGAGE LOAN SERVICING AGREEMENT
     This is a MASTER SERVICING AGREEMENT (this “AGREEMENT”), dated and
effective as of November 1, 2006 and is by and between RWT Holdings, Inc., a
Delaware Corporation, as owner (“Owner”), Morgan Stanley Credit Corporation, a
Delaware corporation, as servicer (the “Servicer”), and Redwood Trust, Inc., a
Maryland corporation, as guarantor (“Guarantor”).
PRELIMINARY STATEMENTS
     Pursuant to a Master Mortgage Loan Purchase Agreement dated as of
November 1, 2006 between Owner, Morgan Stanley Credit Corporation, a Delaware
corporation (“Seller”) and Guarantor (as amended, modified restated or
supplemented from time to time, the “Purchase Agreement”), Owner may purchase
from Seller from time to time certain residential, first mortgage loans. In
order to facilitate the servicing of such mortgage loans by the Servicer, the
Servicer, Owner and Guarantor have executed this agreement.
     In consideration of the premises and the mutual agreements hereinafter set
forth, Owner and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
     Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires shall have the following meaning specified in
this Section (capitalized terms used and not otherwise defined herein shall have
the respective meanings specified in the Purchase Agreement to the extent the
same are defined therein):
     “Agreement”: This Master Servicing Agreement and all exhibits hereto, as
the same may from time to time be amended, modified, restated or supplemented.
     “Applicable Law”: All applicable laws of any Governmental Authority,
including, without limitation, federal, state and foreign securities laws, tax
laws, tariff and trade laws, ordinances, judgments, decrees, injunctions, writs
and orders or like actions of any Governmental Authority and rules, regulations,
orders, interpretations, licenses, and permits of any federal, regional, state,
county, municipal or other Governmental Authority.
     “Collateral Base”: With respect to any Mortgage Loan, the value of any
Additional Collateral related to such Mortgage Loan, plus the value of the
Mortgaged Property related to such Mortgage Loan.
     “Condemnation Proceeds”: All awards or settlements in respect of a taking
of a partial or an entire Mortgaged Property by exercise of the power of eminent
domain or condemnation.

 

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     “Custodial Account”: The separate trust account or accounts created and
maintained pursuant to Section 4.04 of this Agreement which shall be entitled
“Morgan Stanley Credit Corporation, in trust for RWT Holdings, Inc.,” or such
other title as is requested by the Owner.
     “Eligible Account”: An account that is (i) maintained at a depository
institution the short-term debt obligations (or, in the case of a depository
institution which is part of a holding company structure, the short-term debt
obligations of such parent holding company) of which have been rated by each
Rating Agency in one of its two highest short-term rating categories at the time
of the deposit therein, or (ii) a trust account maintained with a corporate
trust department of a federal or state chartered depository institution or trust
company, which institution is acting in its fiduciary capacity.
     “Escrow Account”: The separate trust account or accounts created and
maintained pursuant to Section 4.06 on which shall be entitled “Morgan Stanley
Credit Corporation, as Servicer, in trust for Owner and various Mortgagors,” or
such other title as is requested by Owner.
     “Escrow Payments”: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, mortgage insurance premiums, property
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
     “Event of Default”: Any one of the conditions or circumstances enumerated
in Section 10.01.
     “Governmental Authority”: Any nation or government (including any state or
other political subdivision of either thereof) and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
     “Insurance Proceeds”: Proceeds of any Primary Mortgage Insurance Policy,
title policy, hazard policy or other insurance policy covering a Mortgage Loan,
if any, to the extent such proceeds are not to be applied to the restoration of
the related Mortgaged Property or released to the Mortgagor in accordance with
the procedures that the Servicer would follow in servicing mortgage loans held
for its own account.
     “Liquidation Proceeds”: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received by the Servicer in connection with the
liquidation of a defaulted Mortgage Loan through a trustee’s sale, foreclosure
sale or otherwise (including, but not limited to, amounts received with respect
to an Additional Collateral Pledge Agreement), other than amounts received
following the acquisition of REO Property pursuant to Section 4.11.
     “Loan Amount”: With respect to any Mortgage Loan at any time, the
outstanding principal balance of such Mortgage Loan at such time.
     “Loan Documents”: With respect to any Mortgage Loan, the Mortgage Note,
Mortgage, and/or any other documents executed by Mortgagor and delivered to the
Servicer evidencing or securing the Mortgage Loan.

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     “Master Servicer”: With respect to any Securitization Transaction, the
“Master Servicer,” if any, identified in the related transaction documents.
     “Monthly Advance”: The aggregate of the advances made by the Servicer on
any Remittance Date pursuant to Section 6.03.
     “Moody’s”: Moody’s Investors Service, Inc. or its successor in interest.
     “Mortgage Loan”: The “Mortgage Loans” (as defined in the Purchase
Agreement) which are subject to this Agreement from time to time.
     “MSA Mortgage Loan Schedule”: Collectively, a schedule comprised of all
Mortgage Loans subject to servicing under this Agreement, but excluding all
Mortgage Loans assumed or transferred by Owner, or otherwise no longer subject
to servicing under this Agreement.
     “MSCC”: As defined in Section 4.16.
     “Officer’s Certificate”: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President, a Senior Vice President, Vice
President, or an Assistant Vice President of the Servicer, and delivered to
Owner as required by this Agreement.
     “Owner”: The owner of the Mortgage Loans.
     “Permitted Investment”: Any one or more of the following:

  (i)   direct obligations of, or obligations fully guaranteed as to principal
and interest by, the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and credit of the United
States;     (ii)   repurchase obligations (the collateral for which is held by a
third party) with respect to any security described in clause (i) above,
provided that the long-term unsecured obligations of the party agreeing to
repurchase such obligations are at the time rated by each of the Rating Agencies
in one of its two highest rating categories;     (iii)   certificates of
deposit, time deposits, demand deposits and bankers’ acceptances of any bank or
trust company incorporated under the laws of the United States or any state
thereof or the District of Columbia, provided that the short-term commercial
paper of such bank or trust company at the date of acquisition thereof has been
rated by each of the Rating Agencies in its highest rating;     (iv)   money
market funds rated by each of the Rating Agencies in its highest short-term debt
rating category;     (v)   commercial paper (having original maturities of not
more than 365 days) of any corporation incorporated under the laws of the United
States or any state thereof or the District of Columbia which on the date of
acquisition has been rated by each of the Rating Agencies in its highest
short-term rating category; and

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  (vi)   any other obligation or security acceptable to each of the Rating
Agencies (as certified by a letter from each of the Rating Agencies to Owner) in
respect of mortgage pass through certificates rated in one of its two highest
rating categories;

provided, that with the exception of U.S. Treasury Strips, no such instrument
shall be a Permitted Investment if such instrument evidences either (a) the
right to receive interest only payments with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument where the principal and interest
payments with respect to such instruments provide a yield to maturity exceeding
120% of the yield to maturity at par of such underlying obligation.
     “Prepayment Interest Shortfall”: With respect to any Remittance Date and
any Mortgage Loan that was the subject of a principal prepayment during the
related Principal Prepayment Period, an amount equal to one month’s interest at
the Mortgage Loan Remittance Rate on the amount of such principal prepayment
less the amount of interest (adjusted to the Mortgage Loan Remittance Rate) paid
by the Mortgagor in respect of such principal prepayment.
     “Principal Prepayment Period”: As to any Remittance Date, the calendar
month preceding the month of distribution.
     “Rating Agency”: Either of Standard & Poor’s and Moody’s.
     “Record Date”: The close of business of the last Business Day of the month
preceding the month of the related Remittance Date.
     “REMIC”: A real estate mortgage investment conduit, as such term is defined
by the Internal Revenue Code of 1986, as amended.
     “Remittance Date”: The 18th day of any month or, if such 18th day is not a
Business Day, the first Business Day immediately preceding such 18th day.
     “REO Disposition”: The final sale by the Owner of any REO Property.
     “REO Property”: A Mortgaged Property acquired by the Servicer on behalf of
Owner as described in Section 4.11.
     “Servicing Advances”: All customary, reasonable and necessary “out of
pocket” costs and expenses incurred in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) paying
taxes and insurance with respect to the Mortgaged Property, (iii) enforcement of
judicial proceedings, including foreclosures, bankruptcies and defense of claims
relating to the Mortgages and Mortgaged Property, and (iv) the management and
liquidation of the REO Property.
     “Servicing Criteria”: The “servicing criteria” set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.

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     “Servicing Fee”: With respect to any Mortgage Loan and any Remittance Date,
the fee payable monthly to the Servicer pursuant to Section 7.03.
     “Servicing Officer”: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to Owner
upon request, as such list may from time to time be amended.
     “Specially Serviced Mortgage Loan”: A Mortgage Loan as to which the
following events have occurred and is continuing (i) monthly mortgage payment
being more that 60 days delinquent (ii) any filing of insolvency proceeding on
behalf of the related Mortgagor or (iii) any receipt by the Servicer of notice
of foreclosure of the related mortgage property.
     “Standard & Poor’s”: Standard & Poor’s Ratings Services, a division of the
McGraw-Hill Companies, Inc., or its successor in interest.
     “Subcontractor”: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as “servicing” is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority of
the Seller or a Subservicer.
     “Subservicer”: Any Person that services Mortgage Loans on behalf of the
Seller or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Seller under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
     “Subservicing Account”: An account established by a Subservicer which meets
the requirements set forth in Section 4.17 and is otherwise acceptable to the
Servicer, and which must be an Eligible Account.
     “Subservicing Agreement”: The written agreement between the Servicer and a
Subservicer relating to the servicing and administration of the Mortgage Loans
as provided in Section 4.13.
     “Surety Agreement”: The Surety Bond Reimbursement Agreement dated March 17,
1999 between the Surety Bond Issuer and the Servicer pursuant to which the
Surety Bond Issuer has issued the Surety Bond, as the same may be amended,
modified, restated or supplemented from time to time.
     “Surety Bond”: The limited purpose Surety Bond, dated March 17, 1999,
issued by the Surety Bond Issuer in favor of the Sellers, as the same may be
amended, modified, restated or supplemented from time to time.
     “Surety Bond Issuer”: shall mean AMBAC Assurance Corp or its successors.

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ARTICLE II
BOOKS AND RECORDS; TRANSFER OF MORTGAGE LOANS
     Section 2.01 Books and Records.
     The Servicer shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Mortgage Loans, which shall be
appropriately identified in the Servicer’s books and records to clearly reflect
the ownership of the Mortgage Loans by Owner, and subsequent assignments and
transfers of the Mortgage Loans pursuant to Section 2.02 hereof. At the request
of Owner, the Servicer shall promptly deliver to Owner an MSA Mortgage Loan
Schedule setting forth all Mortgage Loans that the Servicer then services and
administers for Owner under this Agreement; provided, however, that the
information contained on such MSA Mortgage Loan Schedule may be as of the
Closing Date for each respective Mortgage Loan and may consist of the Mortgage
Loan Schedule(s) attached to the Bill(s) of Sale for such Mortgage Loans, with
manual deletions or additions thereto or other revisions thereof.
     Section 2.02 Transfer of Mortgage Loans.
     Owner may, with the consent of the Servicer (which shall not be
unreasonably withheld), assign, sell or transfer (each, a “Transfer”) any of
Owner’s interest in and to any of the Mortgage Loans to any institutional
investor that has a net worth of not less than $50,000,000 and owns not less
than $250,000,000 in residential mortgage loans (each, a “Permitted
Transferee”), subject in each case to the rights of the Servicer under the
provisions of this Agreement (including, without limitation, the right of the
Servicer to continue servicing such Mortgage Loans on the terms set forth
herein), except that no such assignment, sale, transfer, pledge, hypothecation
or encumbrance shall increase the Servicer’s liabilities or obligations or
decrease the Servicer’s rights under this Agreement, and Owner shall remain
fully liable for performance of all of its obligations as to the transferred
Mortgage Loans. As a condition precedent to any Transfer (in addition to the
other conditions set forth herein), the Permitted Transferee shall enter into a
servicing agreement with the Servicer in the form of this Agreement, but mutatis
mutandis, and deliver such certificates and opinions as the Servicer may
reasonably require. Upon consummation of any Transfer, the MSA Mortgage Loan
Schedule shall be amended by the Servicer to reflect such transfer.
Notwithstanding the foregoing, Owner shall not make any Transfer of (i) less
than forty (40) Mortgage Loans, (ii) Mortgage Loans with an aggregate unpaid
principal balance less than $5,000,000 to any Person or if the remaining
Mortgage Loans listed on the MSA Mortgage Loan Schedule after giving effect
thereto would have an aggregate unpaid principal balance less than $5,000,000 or
(iii) any Mortgage Loans other than to a Permitted Transferee in a transaction
that complies with the terms of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SERVICER
     Section 3.01 Representations and Warranties of the Servicer.

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     The Servicer represents, warrants and covenants to Owner, as of the date of
this Agreement and as of each Closing Date or as of such other date specified
below, that:
     (i) The Servicer (a) is a corporation, duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, (b) has all
licenses necessary to carry on its business as now being conducted, (c) has all
material licenses and is qualified and in good standing under the laws of each
state where a Mortgaged Property is located to the extent required under
applicable law to effect such qualification, and (d) is in compliance with the
laws of each such state to the extent necessary to permit the enforcement of
Owner’s rights (either directly or through a Subservicer) under each Mortgage
Loan and to permit the servicing of the Mortgage Loans in accordance with the
terms of this Agreement.
     (ii) The Servicer has full power and authority to hold each Mortgage Loan,
to service each Mortgage Loan, to execute and deliver this Agreement, and to
enter into and consummate all transactions contemplated by this Agreement. The
Servicer has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by Owner and the
enforceability against Owner, constitutes a legal, valid and binding obligation
of the Servicer, enforceable against it in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
liquidation, moratorium, reorganization or other similar laws affecting the
rights of creditors generally or by general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
     (iii) The consummation of the transactions contemplated by this Agreement
is in the ordinary course of the Servicer’s business and will not conflict with
or result in a breach of any of the terms, conditions or provisions of the
Servicer’s certificate of incorporation or by-laws or any legal restriction or
any material agreement or instrument to which the Servicer is now party or by
which it is bound, or constitute a material default or result in an acceleration
under any of the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Servicer or its property is
subject.
     (iv) The Servicer is an approved seller/servicer for Fannie Mae or Freddie
Mac in good standing and is a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Section 203 of the National Housing Act. No event
has occurred that would render the Servicer unable to comply with Fannie Mae or
Freddie Mac eligibility requirements or that would require notification to
either Fannie Mae or Freddie Mac.
     (v) The Servicer has no reason or cause to believe that it cannot perform
each covenant contained in this Agreement.
     (vi) There is no action suit, proceeding or investigation pending or, to
the Servicer’s knowledge, threatened, against the Servicer that, in the
Servicer’s judgment, if determined adversely to the Servicer, would materially
and adversely affect the validity or enforceability of this Agreement or the
ability of the Servicer to perform its obligations hereunder in accordance with
the terms hereof.

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     (vii) No consent, approval, authorization or order of any court or
governmental authority is required for the execution and delivery of this
Agreement by the Servicer or for the performance by the Servicer of its
obligations hereunder, other than any such consent, approval, authorization or
order as has been obtained prior to the Closing Date.
     The Servicer shall indemnify Owner and hold it harmless against any losses,
damages, penalties, fines, forfeitures, legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Servicer’s representations and warranties contained in this Section 3.01. It is
understood and agreed that the obligations of the Servicer set forth in this
Section 3.01 to indemnify Owner as provided above constitute the sole remedies
of Owner respecting a breach of the foregoing representations and warranties.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
     Section 4.01 Role of the Servicer.
     The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of prudent mortgage lenders, and shall have full
power and authority, acting alone, to do or cause to be done any and all things
in connection with such servicing and administration that the Servicer may deem
necessary or desirable and consistent with the terms of this Agreement.
     Consistent with the terms of this Agreement, at the respective Mortgagor’s
request or as required by applicable law, the Servicer may waive, modify or vary
any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if, in the Servicer’s reasonable and prudent determination, such waiver,
modification, postponement or indulgence is consistent with industry practice
and not materially adverse to Owner, including actions intended to maximize
collections on such Mortgage Loan; provided, however, that, except as permitted
by the following paragraph, the Servicer shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate,
forgive the payment of any principal or interest payments, make future advances
or extend the final maturity date on such Mortgage Loan. Without limiting the
generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered, to execute and deliver on behalf of itself and Owner,
all instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Property. Owner has provided and shall,
as necessary, promptly furnish the Servicer with such powers of attorney (a form
of which is attached hereto as Exhibit A) as are necessary and appropriate and
with such other documents as are necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this Agreement.
     Notwithstanding any other provision in this Agreement or the Master
Mortgage Loan Purchase Agreement to the contrary:

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     (i) In the case of any Mortgage Loan, the Servicer may waive any late
payment charge, penalty, interest or any assumption fees, or other fees which
may be collected in the ordinary course of servicing such Mortgage Loan;
     (ii) In the case of a Specially Serviced Mortgage Loan, the Servicer shall
notify the Owner in writing by either fax, email or other mutually acceptable
means and obtain the Owner’s written consent prior to the Servicer modifying,
amending or waiving any of the financial terms of, or making any other
modifications to the Mortgage Loan. If Owner notifies the Servicer of its
refusal to consent thereto, then the Servicer shall, at its option, repurchase
the related Specially Serviced Mortgage Loan. Such repurchase shall be at a
price equal to (a) the Assumed Principal Balance of the Mortgage Loan plus
(b) accrued interest on such Assumed Principal Balance at the Mortgage Loan
Remittance Rate has last been paid and distributed to Purchaser to the date of
repurchase. Further, if such Mortgage Loan is an Additional Collateral Mortgage
Loan, Servicer may release a portion of or all of the Additional Collateral
related thereto provided that the release of such Additional Collateral is in
accordance with the Additional Collateral Pledge Agreement; and
     (iii) The Servicer shall specifically notify the Owner and obtain the
Owner’s consent to the Servicer taking any of the following actions: (a) selling
any Specially Serviced Mortgage Loan or REO Property, (b) forgiving principal or
interest on, or permitting to be satisfied at a discount, any Mortgage Loan; or
(c) accepting substitute or additional collateral, or releasing any collateral,
for a Mortgage Loan.
     In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and Owner’s reliance on the
Servicer. In servicing and administering the Mortgage Loans, the Servicer may
permit any Governmental Authority to have access to and review and copy the
files of the Servicer with respect to the Mortgage Loans, and Servicer is
authorized to do whatever is necessary to comply with all Applicable Laws and
the requirements of such Governmental Authority, including without limitation
any required modifications of the Loan Documents.
     Section 4.02 Collection of Mortgage Loan Payments.
     Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Servicer shall proceed diligently to
collect all payments due under each Mortgage Loan when the same shall become due
and payable and shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of any related Primary Mortgage
Insurance Policy, follow such collection procedures as it follows with respect
to mortgage loans comparable to the Mortgage Loans held for its own account.
Further, the Servicer will take special care in ascertaining and estimating
annual ground rents, taxes, assessments, water rates, property insurance
premiums, mortgage insurance premiums, and all other charges that, as provided
in the Mortgage, will become due and payable to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.

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     Section 4.03 Realization Upon Defaulted Mortgage Loans.
     The Servicer shall use reasonable efforts, consistent with the procedures
that the Servicer would use in servicing loans for its own account, to foreclose
upon or otherwise comparably convert the ownership of Mortgaged Properties which
secure Mortgaged Loans which come into and continue in default and as to which
no satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 4.01. In addition, if an Additional Collateral Mortgage Loan
becomes a defaulted Mortgage Loan, the Servicer shall make all reasonable
efforts available under the Loan Documents to realize upon the Additional
Collateral pertaining to such Mortgage Loan, and any proceeds from the
realization thereof (and not such Additional Collateral itself) shall be
included in the related Liquidation Proceeds and deposited in the Custodial
Account, net of any related Servicing Advances. The Servicer shall use
reasonable efforts to realize upon defaulted Mortgage Loans in such a manner as
will maximize the receipt of principal and interest by Owner, taking into
account, among other things, the timing of foreclosure proceedings and any
proceedings with respect to Additional Collateral. The foregoing is subject to
the provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Servicer shall not be required to expend its own funds toward the
restoration of such property in excess of an aggregate of $2,000 during the life
of the Mortgage Loan, unless it shall determine in its discretion (i) that such
restoration will increase the proceeds of liquidation of the related Mortgage
Loan to Owner after reimbursement to itself for such expenses, and (ii) that
such expenses will be recoverable by the Servicer through Insurance Proceeds or
Liquidation Proceeds from the related Mortgaged Property, as contemplated in
Section 4.05.
     In the event that any payment due under any Mortgage Loan becomes 90 days
delinquent and, in the judgment of the Servicer, the related Mortgagor is not
likely to become current within a reasonable period of time, the Servicer shall
commence foreclosure or other proceedings to realize upon the Mortgaged Property
securing such Mortgage Loan.
     Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial
Accounts.
     The Servicer shall establish and maintain at all times appropriate
custodial accounts for principal and interest, and taxes and insurance with
respect to the Mortgage Loans. The Servicer shall segregate and hold all funds
constituting Escrow Payments collected and received pursuant to a Mortgage Loan
to be so deposited, separate and apart from any of its own funds and general
assets.
     The Servicer shall deposit in the Custodial Account and retain therein the
following payments and collections received or made by it subsequent to the
Cut-off Date, or received by it prior to the Cut-off Date but allocable to a
period subsequent thereto, other than in respect of principal and interest on
the Mortgage Loans due on or before the Cut-off Date:
     (i) All payments on account of principal, including principal prepayments,
on the Mortgage Loans;

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     (ii) All payments on account of interest on the Mortgage Loans adjusted to
the Mortgage Loan Remittance Rate;
     (iii) All Liquidation Proceeds;
     (iv) All Insurance Proceeds including amounts required to be deposited
pursuant to Sections 4.06, 4.11 and 4.18, other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer’s normal
servicing procedures the related loan documents or applicable law;
     (v) All Condemnation Proceeds affecting any Mortgaged Property that are not
released to the Mortgagor in accordance with the Servicer’s normal servicing
procedures, the loan documents or applicable law;
     (vi) Any Monthly Advances;
     (vii) All proceeds of any Mortgage Loan repurchased in accordance with
Section 5(c) or (d) of the Purchase Agreement, and all amounts required to be
deposited by the Servicer in connection with shortfalls in principal amount of
Qualified Substitute Mortgage Loans pursuant to Section 5(c) of the Purchase
Agreement;
     (viii) Any amounts required to be deposited by the Servicer pursuant to
Section 6.04 for the month of distribution;
     (ix) Any amounts in respect of Permitted Investments required to be
deposited pursuant to Section 4.18;
     (x) Any amounts required to be deposited by the Servicer in connection with
any REO Property pursuant to Section 4.11; and
     (xi) Any amounts required to be deposited into the Custodial Account
pursuant to Section 7.01.
     The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 7.01, need not be deposited by the
Servicer in the Custodial Account. Any interest paid on funds deposited into the
Custodial Account by the depository institution shall accrue to the benefit of
the Servicer and the Servicer shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05(iv). In addition,
funds in the Custodial Account may be invested in Permitted Investments in
accordance with the provisions set forth in Section 4.18.
     Section 4.05 Permitted Withdrawals From the Custodial Account.
     The Servicer may, from time to time, make withdrawals from the Custodial
Account for the following purposes:

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     (i) To make payments to Owner in the amounts and in the manner provided for
in Section 6.01;
     (ii) To reimburse itself for each unreimbursed Monthly Advance from the
related Monthly Payments collected from the Mortgagors or, to the extent an
unreimbursed Monthly Advance is determined by the Servicer to be unrecoverable,
from any funds in the Custodial Account;
     (iii) To reimburse itself for unreimbursed Servicing Advances and for
unreimbursed Servicing Fees, provided that with respect to any Mortgage Loan the
Servicer’s right to such reimbursement shall be limited, subject to
Section 4.13, to the related funds collected by the Servicer from the Mortgagor
or any other Person including, but not limited to, Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds, and with respect to REO Property,
funds received as rental or similar income. The Servicer’s right to the
reimbursement set forth in the preceding sentence shall be prior to the rights
of Owner to such proceeds and amounts, except that where the Servicer is
required to repurchase a Mortgage Loan pursuant to Section 5(c) or (d) of the
Purchase Agreement, the Servicer’s right to such reimbursement shall be
subsequent to the rights of Owner to receive payment from the Custodial Account
representing the repurchase price set forth in Section 5(c) or (d) of the
Purchase Agreement, as applicable, and representing all other amounts required
to be paid to Owner with respect to such repurchased Mortgage Loan;
     (iv) To pay itself as servicing compensation any interest earned on funds
in the Custodial Account;
     (v) To pay itself with respect to each Mortgage Loan that has been
repurchased pursuant to Section 5(c) or (d) of the Purchase Agreement all
related Monthly Payments and such other amounts as may be collected by the
Servicer from the Mortgagor or otherwise relating to such Mortgage Loan,
provided that such Monthly Payments or other amounts have not been distributed
as of the date on which the related repurchase price is determined;
     (vi) To refund to the Servicer any amount deposited in the Custodial
Account and not required to be deposited therein; and
     (vii) To clear and terminate the Custodial Account upon the termination of
this Agreement.
     Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts.
     The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets. The Servicer will establish
one or more Escrow Accounts for such purpose, each of which shall be an Eligible
Account.
     The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein, (i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement, and (ii) all Insurance Proceeds
which are to be applied to the restoration or repair of any Mortgaged

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Property. The Servicer shall make withdrawals therefrom only to effect such
payments as are required or contemplated under this Agreement, and for such
other purposes as set forth or in accordance with Section 4.07. The Servicer
shall be entitled to retain any interest paid on funds deposited into the Escrow
Account by the depository institution other than interest on escrowed funds
required by law to be paid to a Mortgagor.
     Section 4.07 Permitted Withdrawals From Escrow Account.
     Withdrawals from the Escrow Account may be made by the Servicer (i) to
effect timely payments of ground rents, taxes, assessments, water rates,
property insurance premiums, Primary Mortgage Insurance Policy premiums, if
applicable, and comparable items, (ii) to reimburse the Servicer for any
Servicing Advance made by the Servicer with respect to an Escrow Payment, but
only from amounts received on the related Mortgage Loan which represent late
payments or collections of Escrow Payments thereunder, and only to the extent
permitted by applicable law, (iii) to refund to the Mortgagor any funds as may
be determined to be overages, (iv) for transfer to the Custodial Account in
accordance with the terms of this Agreement, (v) for application to restoration
or repair of the Mortgaged Property, (vi) to pay to the Servicer, or to the
Mortgagor to the extent required by law, any interest paid on the funds
deposited into the Escrow Account, (vii) to refund to the Servicer any amount
deposited in the Escrow Account and not required to be deposited therein or
(viii) to clear and terminate the Escrow Account on the termination of this
Agreement. As part of its servicing duties, the Servicer shall pay to the
Mortgagors interest on funds in the Escrow Account, to the extent required by
law, and to the extent that interest earned on funds in the Escrow Account is
insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
     Section 4.08 Transfer of Accounts.
     The Servicer may transfer the Custodial Account or the Escrow Account to a
different depository institution from time to time. The Servicer shall promptly
notify Owner upon making any such transfer. In any case, the Custodial Account
and Escrow Account shall be Eligible Accounts.
     Section 4.09 [INTENTIONALLY OMITTED]
     Section 4.10 Errors and Omissions Insurance.
     The Servicer shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of Fannie Mae or Freddie
Mac on all officers, employees or other persons acting in any capacity with
regard to the Mortgage Loans to handle funds, money, documents and papers
relating to the Mortgage Loans. The errors and omissions insurance shall be in
the form of the Mortgage Banker’s Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement and omissions
and negligent acts of such Persons and shall also protect and insure the
Servicer against losses in connection with the failure to maintain any insurance
policies required pursuant to this Agreement and the release or satisfaction of
a Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.10 requiring the errors and
omissions insurance

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shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The minimum coverage under any such bond and insurance
policy shall be at least equal to the corresponding amounts required by Fannie
Mae in the Fannie Mae Sellers’ and Servicers’ Guide or by Freddie Mac in the
Freddie Mac Sellers’ and Servicer’s Guide. Upon request of any Owner, the
Servicer shall cause to be delivered to Owner a copy of the insurance policy and
shall use reasonable efforts to obtain a statement from the surety and the
insurer that such insurance policy shall in no event be terminated or materially
modified without thirty (30) days prior written notice to Owner.
     Section 4.11 Title Management and Disposition of REO Property.
     The Servicer shall either itself or through an agent selected by the
Servicer, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. The Servicer shall cause each REO Property to be inspected promptly
upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter. The Servicer shall use reasonable
efforts to dispose of the REO Property in a commercially reasonable manner as
soon as possible. If Owner has notified the Servicer in writing that an REO
Property is held as part of a REMIC, the Servicer will make reasonable efforts
to sell such REO Property within the time necessary to preserve such REMIC
status as advised by Owner in the notice thereof.
     If title to any Mortgaged Property is acquired in foreclosure or by deed in
lieu of foreclosure (each, an “REO Property”), the deed or certificate of sale
shall be taken in the name of the Owner or the Person (which may be the Servicer
for the benefit of the Owner) designated by the Owner, or in the event the Owner
notifies the Servicer that the Owner or such Person is not authorized or
permitted to hold title to real property in the state where the REO Property is
located, or would be adversely affected under the “doing business” or tax laws
of such state by so holding title, the deed or certificate of sale shall be
taken in the name of such Person or Persons as shall be consistent with an
opinion of counsel obtained by the Owner from an attorney duly licensed to
practice law in the state where the REO Property is located. The Servicer
(acting alone or through a subservicer), on behalf of the Owner, shall provide
for the maintenance and disposal of REO on behalf of the Owner as outlined under
section 6 of the collection manual of Servicer.
     The Servicer shall deposit and hold all revenues and funds collected and
received in connection with the operation of each REO Property in the Custodial
Account, and the Servicer shall account separately for revenues and funds
received or expended with respect to each REO Property.
     The Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement to do any and all
things in connection with any REO Property as are consistent with the servicing
standards set forth in Section 4.01. In connection therewith, the Servicer shall
deposit or cause to be deposited on a daily basis in the Custodial Account all
revenues and collections received or collected by it with respect to each REO
Property, including all proceeds of any REO Disposition. The Servicer shall
withdraw

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(without duplication) from the Custodial Account, but solely from the revenues
and collections received or collected by it with respect to a specific REO
Property, such funds necessary for the proper operation, management and
maintenance of such REO Property, including the following:

  (a)   all insurance premiums due and payable in respect of such REO Property;
    (b)   all real estate taxes and assessments in respect of such REO Property
that may result in the imposition of a lien thereon;     (c)   all customary and
reasonable costs and expenses necessary to maintain, repair, appraise, evaluate,
manage or operate such REO Property (including the customary and reasonable
costs incurred by any “managing agent” retained by the Servicer in connection
with the maintenance, management or operation of such REO Property);     (d)  
all reasonable costs and expenses of restoration improvements, deferred
maintenance and tenant improvements; and     (e)   all other reasonable costs
and expenses, including reasonable attorneys’ fees, that the Servicer may suffer
or incur in connection with its performance of its obligations under this
Section (other than costs and expenses that the Servicer is expressly obligated
to bear pursuant to this Agreement).

     To the extent that amounts on deposit in the Custodial Account are
insufficient for the purposes set forth in clauses (1) through (5) above, the
Servicer shall, subject to Section 6.03, advance the amount of funds required to
cover the shortfall with respect thereto. The Servicer shall promptly notify the
Owner in writing of any failure by the Servicer to make a Servicing Advance of
the type specified in clauses (1) or (2) above (irrespective of whether such
Servicing Advance is claimed to be non-recoverable by the Servicer pursuant to
Section 6.03).
     The Servicer shall notify Owner of its receipt of a bona fide offer for any
REO Property. Following the consummation of an REO Disposition, the Servicer
shall remit to the Owner, in accordance with Section 6.01, any proceeds from
such REO Disposition in the Custodial Account following the payment of all
expenses and Servicing Advances relating to the subject REO Property.
     Section 4.12 Adjustments to Mortgage Interest Rates.
     The Servicer shall make interest rate adjustments and payment amount
adjustments for each Adjustable Rate Mortgage Loan in accordance with the terms
of the related Mortgage Note and will deliver to the related Mortgagor written
notice of such adjustments in accordance with the terms of such Mortgage Note
and the requirements of applicable law.
     Section 4.13 Subservicing Agreements Between the Servicer and Subservicers.
     (a) Subject to Section 13.06, the Servicer may enter into Subservicing
Agreements with Subservicers for the servicing and administration of the
Mortgage Loans. The terms of any Subservicing Agreement shall not be
inconsistent with any of the provisions of this Agreement.

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Each Subservicer shall be (i) authorized to transact business in the state or
states in which the Mortgaged Properties related to the Mortgage Loans such
Subservicer is to service are situated, if and to the extent required by
applicable law to enable the Subservicer to perform its obligations hereunder
and under the Subservicing Agreement, and (ii) a Freddie Mac- or Fannie
Mae-approved mortgage servicer. Each Subservicing Agreement must impose on the
Subservicer requirements conforming to the provisions set forth in Section 4.17
and provide for servicing of the Mortgage Loans consistent with the terms of
this Agreement.
     (b) As part of its servicing activities hereunder, the Servicer, for the
benefit of Owner, shall enforce the obligations of each Subservicer under the
related Subservicing Agreement, including, without limitation, any obligation to
make advances in respect of delinquent payments as required by a Subservicing
Agreement. 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, to the extent, if any, that such recovery
(i) exceeds all amounts due in respect of the related Mortgage Loans, or (ii) is
from a specific recovery of costs, expenses or attorneys’ fees against the party
against whom such enforcement is directed.
     Section 4.14 Successor Subservicers.
     The Servicer shall be entitled to terminate any Subservicing Agreement and
the rights and obligations of any Subservicer pursuant to any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, the Servicer either
shall directly service the related Mortgage Loans or shall enter into a
Subservicing Agreement with a successor Subservicer which qualifies under
Section 4.13.
     Section 4.15 Liability of the Servicer.
     Notwithstanding any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and primarily liable to Owner for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 4.01 without diminution of such obligation or liability by
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. The Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the Servicer by such Subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
     Section 4.16 Assumption or Termination of Subservicing Agreements.
     In the event that Morgan Stanley Credit Corporation, or its successors
(collectively, “MSCC”) shall for any reason cease to be the servicer of the
Mortgage Loans under this Agreement, Owner or its designee may, if MSCC does not
terminate any Subservicing

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Agreement in accordance with its terms, thereupon assume all of the rights and
obligations of MSCC under such Subservicing Agreement. Upon such assumption,
Owner or its designee shall be deemed to have assumed all of MSCC’s interest
therein and to have replaced MSCC as a party to each Subservicing Agreement to
the same extent as if the Subservicing Agreements had been assigned to the
assuming party, except that MSCC shall not thereby be relieved of any liability
or obligations under the Subservicing Agreements and MSCC shall continue to be
entitled to any rights or benefits, in each case, which arose prior to its
termination as servicer.
     The Servicer at its expense shall, upon the request of Owner, deliver to
the assuming party all documents and records relating to each Subservicing
Agreement and the Mortgage Loans then being serviced and an accounting of
amounts collected and held by it and otherwise use reasonable efforts to effect
the orderly and efficient transfer of the Subservicing Agreements to the
assuming party.
     Section 4.17 Servicing Accounts.
     In those cases where a Subservicer is servicing a Mortgage Loan pursuant to
a Subservicing Agreement, the Subservicer shall be required to establish and
maintain a Subservicing Account which shall be an Eligible Account. The
Subservicer shall be required to deposit into the Subservicing Account not later
than the first Business Day after receipt all proceeds of Mortgage Loans
received by the Subservicer, less its subservicing compensation to the extent
permitted by the Subservicing Agreement, and to remit such proceeds to the
Servicer for deposit in the Custodial Account not later than the tenth day of
each month, or if such tenth day is not a Business Day, the immediately
succeeding Business Day. For purposes of this Agreement, the Servicer shall be
deemed to have received payments on the Mortgage Loans when the Subservicer has
received such payments pursuant to the Subservicing Agreement.
     Section 4.18 Permitted Investments.
     The Servicer may invest the funds in the Custodial Account in Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Remittance Date next following the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such account, then such Permitted Investment shall
mature not later than such Remittance Date) and shall not be sold or disposed of
prior to its maturity. All such Permitted Investments shall be registered in the
name of the Servicer or its nominee, and held in trust for Owner. All income and
gain realized from any such investment as well as any interest earned on deposit
in the Custodial Account shall be for the benefit of the Servicer, and shall be
withdrawn by the Servicer on the related Remittance Date. The Servicer shall
deposit in the Custodial Account (with respect to investments made hereunder of
funds held therein) an amount equal to the amount of any loss incurred in
respect of any such investment immediately upon realization of such loss without
right of reimbursement.
     Section 4.19 Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Mortgage Insurance Policies; Collections Thereunder.
     With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are

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or may become a lien upon the Mortgaged Property and the status of Primary
Mortgage Insurance Policy premiums and fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges,
including renewal premiums, and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage and applicable law. If a Mortgage does not provide for
Escrow Payments, then the Servicer shall require that any such payments be made
by the Mortgagor at the time they first become due. The Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely
payments of all such bills irrespective of the Mortgagor’s faithful performance
in the payment of same or the making of the Escrow Payments and shall make
advances from its own funds to effect such payments but shall be entitled to
reimbursement thereof in accordance with the terms of this Agreement.
     The Servicer shall maintain in full force and effect a Primary Mortgage
Insurance Policy, with respect to each Mortgage Loan for which such coverage is
required. Such coverage will be maintained until the Loan-to-Value Ratio of the
related Mortgage Loan is reduced to 75% or less in the case of a Mortgage Loan
having a Loan-to-Value Ratio at origination in excess of 80% or until such time,
if any, as such insurance is required to be released in accordance with the
provisions of applicable law including, but not limited to, the Homeowners
Protection Act of 1998. The Servicer shall assure that all premiums due under
any Primary Mortgage Insurance Policy are paid in a timely manner, but, shall be
entitled to reimbursement pursuant to the terms of this Agreement for premiums
paid by the Servicer on behalf of any Mortgagor who is obligated to pay such
premiums but fails to do so. The Servicer shall not cancel or refuse to renew
any Primary Mortgage Insurance Policy in effect on the Funding Date that is
required to be kept in force under this Agreement unless a replacement Primary
Mortgage Insurance Policy for such canceled or nonrenewed policy is obtained
from and maintained with an insurer. The Servicer shall not take any action
which would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Servicer, would
have been covered thereunder.
     In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Owner, claims to the insurer
under any Primary Mortgage Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Mortgage Insurance
Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any
amounts collected by the Servicer under any Primary Mortgage Insurance Policy
shall be deposited in the Collection Account.
     Section 4.20 Maintenance of Hazard Insurance.
     The Servicer shall cause to be maintained for each Mortgage Loan fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount that is at least equal to the lesser
of (a) the maximum insurable value of the improvements securing such Mortgage
Loan and (b) the greater of (1) the Unpaid Principal

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Balance of such Mortgage Loan or (2) an amount such that the proceeds thereof
shall be sufficient to prevent the Mortgagor and/or the loss payee from becoming
a co insurer.
     If any Mortgaged Property is in an area identified by the Federal Emergency
Management Agency as having special flood hazards and such flood insurance has
been made available, then the Servicer will cause to be maintained a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration with a generally acceptable insurance carrier,
in an amount representing coverage not less than the lesser of (a) the minimum
amount required, under the terms of coverage, to compensate for any damage or
loss on a replacement cost basis (or the outstanding principal balance of the
related Mortgage Loan if replacement cost coverage is not available for the type
of building insured) or (b) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended (assuming that the
area in which such Mortgaged Property is located is participating in such
program).
     The Servicer shall also maintain on each REO Property fire, hazard and
liability insurance, and to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance with extended
coverage in an amount which is at least equal to the lesser of (a) the maximum
insurable value of the improvements which are a part of such property and (b)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property plus accrued interest at the Mortgage Interest Rate and
related Servicing Advances.
ARTICLE V
ADMINISTRATION AND SERVICING OF TRADING ACCOUNTS
     Section 5.01 The Servicer to Service Trading Accounts.
     (a) The Servicer represents and warrants that it will service and
administer the Trading Accounts, in accordance with the terms of (i) the
procedures it employs to administer Trading Accounts for its own benefit (as the
same may be amended from time to time) and (ii) the related Additional
Collateral Pledge Agreement.
     (b) The Servicer shall be released from its obligations to administer the
Trading Accounts as applicable upon termination of the related Additional
Collateral Pledge Agreement.
     (c) The Servicer may, without consent of Owner, amend or modify a
Additional Collateral Pledge Agreement in any non-material respect to reflect
administrative or account changes.
     (d) Notwithstanding anything to the contrary in this Agreement (including
without limitation the termination of the Servicing rights and/or obligations of
the Servicer under Article XI of this Agreement), the Servicer shall service and
administer each Trading Account, each Additional Collateral Pledge Agreement and
each Additional Collateral Mortgage Loan, in accordance with the terms of this
Agreement and each Additional Collateral Pledge Agreement; it being understood
and agreed that only the Servicer shall service and administer the related

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securities accounts, lines of credit, mortgages, and guarantors with respect to
Additional Collateral Pledge Agreement.
     (e) Notwithstanding Section 4.04, when the Collateral Base for any
Additional Collateral Mortgage Loan is less than the Loan Amount for such
Additional Collateral Mortgage Loan, the Servicer shall cause cash received upon
exercise of foreclosure rights under the related Additional Collateral Pledge
Agreement, if it has not been previously applied to reduce the principal balance
of such Additional Collateral Mortgage Loan, to be deposited into the Custodial
Account.
     (f) The Servicer shall use its reasonable efforts to realize upon any
Additional Collateral for such of the Additional Collateral Mortgage Loans as
come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments; provided that the Servicer
shall not obtain title to any such Additional Collateral as a result of or in
lieu of the disposition thereof or otherwise; and provided further that (i) the
Servicer shall not proceed with respect to such Additional Collateral in any
manner that would impair the ability to recover against the related Mortgaged
Property, and (ii) the Servicer shall proceed with any acquisition of REO
Property in a manner that preserves the ability to apply the proceeds of such
Additional Collateral against amounts owed under the defaulted Mortgage Loan.
Any proceeds realized from such Additional Collateral (other than amounts to be
released to the Mortgagor or the related guarantor in accordance with procedures
that the Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note
and to the terms and conditions of any security agreement, guarantee agreement,
mortgage or other agreement governing the disposition of the proceeds of such
Additional Collateral) shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05 of this Agreement.
     Section 5.02 Agreements with Respect to the Surety Bond.
     (a) The Servicer represents and warrants to Owner that the Additional
Collateral Mortgage Loans are insured under the terms and provisions of the
Surety Bond, subject to the limitations set forth therein. Owner acknowledges
receipt from the Surety Bond Issuer of a certificate confirming the insurance of
the Additional Collateral Mortgage Loans pursuant to the terms and provisions of
the Surety Bond.
     (b) Owner and the Servicer agree that the Surety Bond Issuer is a third
party beneficiary in respect of the Servicer’s obligations under this Article V.
     (c) With respect to the sale or potential sale of the Additional Collateral
Mortgage Loans, Owner shall not use, circulate, quote or otherwise refer to the
Surety Bond Issuer or the Surety Bond for any purpose, including but not limited
to, the registration, purchase and sale of securities, nor file the Surety Bond
with, or refer to it or to the Surety Bond Issuer, as part of any registration
statement or offering document, without the express prior written consent of the
Surety Bond Issuer as to both form and substance of such disclosure.

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ARTICLE VI
PAYMENTS TO OWNER
     Section 6.01 Distributions.
     On each Remittance Date with respect to each Mortgage Loan, subject to
Section 6.03(c), the Servicer shall distribute to Owner (i) all amounts due on
the Due Date immediately preceding the related Remittance Date (which shall
include all scheduled interest and principal), net of charges against or
withdrawals from the Custodial Account pursuant to clauses (ii) through (vi) of
Section 4.05, plus any principal prepayments received during the related
Principal Prepayment Period, minus (iii) any amounts attributable to Monthly
Payments collected as to such Mortgage Loans but due on a Due Date or Due Dates
subsequent to the current Remittance Date.
     Subject to Section 6.03(c), all distributions made to Owner on each
Remittance Date will be made to Owner of record on the preceding Record Date,
and shall be based on the Mortgage Loans owned and held by Owner, and shall be
made by wire transfer of immediately available funds to the account of Owner at
a bank or other entity having appropriate facilities therefor, or if Owner shall
have so notified the Servicer, by check mailed to the address of Owner as
provided for in Section 12.06.
     With respect to any remittance received by Owner on or after the second
Business Day following the Business Day on which such payment was due, the
Servicer shall pay to Owner interest on any such late payment at an annual rate
equal to the rate of interest as is publicly announced from time to time at its
principal office by Chase Manhattan Bank, N. A., New York, New York, as its
“prime” lending rate (which is not necessarily its lowest rate) (or if Chase
Manhattan Bank, N.A. shall cease to exist or to announce such rate, then such
rate shall be a reasonably comparable rate determined by Servicer in its
reasonable discretion), adjusted as of the date of each change, plus one
(1) percentage point, but in no event greater than the maximum amount permitted
by applicable law. Such interest shall be paid by the Servicer to Owner on the
date such late payment is made and shall cover the period commencing with the
day following such second Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along with
such late payment. The payment by the Servicer of any such interest shall not be
deemed an extension of time for Payment or a waiver of any Event of Default by
the Servicer.
     Section 6.02 Statements to Owner.
     Not later than the tenth (10th) day of each month, the Servicer will
furnish to Owner a monthly remittance report in a format substantially similar
to Exhibit B hereto, which monthly remittance report will be generated as of the
expiration of the preceding month.
     The Servicer shall provide Owner with such information concerning the
Mortgage Loans as is necessary for Owner to prepare its federal income tax
return as Owner may reasonably request from time to time.
     Section 6.03 Monthly Advances by the Servicer.

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     (a) With respect to each Mortgage Loan and subject to Section 6.03(c), on
each Remittance Date the Servicer shall, pursuant to Section 6.01, remit to
Owner the total of all scheduled Monthly Payments due on the preceding Due Date
whether or not such Monthly Payments were collected from the Mortgagor. Any
amounts which are due but uncollected shall, subject to subsection (c) below, be
funded only by using excess cash collections, if any, on deposit in the
Custodial Account.
     (b) If the collections on deposit in the Custodial Account on the
Remittance Date are less than the amount of the required monthly remittance, the
Servicer shall, subject to subsection (c) below, make a Monthly Advance by
depositing to the Custodial Account enough of its own funds to make the total on
deposit equal the full amount of the remittance due Owner. The Servicer may
reimburse itself for its advances from collections from Mortgagors that are
subsequently deposited into the Custodial Account to the extent provided in
Section 4.05.
     (c) If the Servicer determines, in its reasonable judgment, that any
uncollected payment due from a Mortgagor that is due to be paid to Owner
pursuant to Section 6.01 would not be recoverable from Liquidation Proceeds or
other payments or recoveries (including Insurance Proceeds or Condemnation
Proceeds) on the related Mortgage Loan, then the Servicer will ensure that the
amount considered to be non-recoverable will not be funded from excess
collections or advanced by the Servicer, and will therefore not be remitted to
Owner until the earlier to occur of (a) the purchase of the Mortgage Loan by the
Servicer, if applicable, or (b) the acquisition or disposition of title to the
related Mortgaged Property through foreclosure or otherwise, and then in each
case shall only be paid to the extent of such repurchase price or recovery.
     (d) The Servicer’s obligations to make Monthly Advances as to any Mortgage
Loan pursuant to Section 6.03(a) and (b) will continue through the last Monthly
Payment due prior to the payment in full of the Mortgage Loan, or through the
Remittance Date for the remittance of all Liquidation Proceeds or other payments
or recoveries (including Insurance Proceeds or Condemnation Proceeds) with
respect to the related Mortgage Loan or the related REO Property, subject to
Section 6.03(c). With respect to any Mortgage Loans determined to be
unrecoverable and whose Monthly Payments are omitted from the scheduled monthly
remittance, the Servicer shall deliver an Officer’s Certificate to Owner setting
forth the basis of such determination.
     Section 6.04 Compensating Interest.
     Not later than the close of business on the Business Day preceding each
Remittance Date, the Servicer shall from its own funds deposit in the Custodial
Account an amount equal to the lesser of (i) the aggregate of the Prepayment
Interest Shortfalls, if any, that exist in respect of the related Principal
Prepayment Period and (ii) the aggregate of the Servicing Fees for the most
recently ended calendar month.
     If for any reason the Servicer fails to process any principal prepayment on
a timely basis in accordance with Section 4.04(i), the Servicer shall from its
own funds deposit in the Custodial Account, interest at the Mortgage Interest
Rate on the principal prepayment for the period the deposit into the Custodial
Account was delayed.

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ARTICLE VII
GENERAL SERVICING PROCEDURE
     Section 7.01 Assumption Agreements.
     If the Servicer acquires actual knowledge that a Mortgagor has transferred
or proposes to transfer the related Mortgaged Property, the Servicer shall
enforce any related “due-on-sale” clause consistent with its practices for
mortgage loans it services for its own account. If the Servicer elects not to
enforce such due-on-sale clause, the Servicer may enter into an assumption
agreement with the party to whom such Mortgaged Property is to be or has been
conveyed. If any assumption fee is collected by the Servicer for entering into
an assumption agreement, the Servicer shall be entitled to retain a portion of
such fee up to an amount equal to 1% of the outstanding principal balance of the
related Mortgage Loan as additional servicing compensation, and shall deposit
into the Custodial Account any portion thereof that exceeds 1% of such
outstanding principal balance.
     Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files.
     Upon the payment in full of any Mortgage Loan and deposit of such payment
by Servicer into the Custodial Account pursuant to Section 4.04, the Servicer
shall execute any document necessary to satisfy the Mortgage Loan and request
delivery to it of the portion of the Mortgage File held by Owner or the
Custodian. Upon receipt of such request, the related mortgage documents shall be
released to the Servicer within seventy-two (72) hours and the Servicer shall
prepare and process any satisfaction or release. No expense incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Custodial Account or Owner.
     To the extent that Owner acts as its own custodian, from time to time and
as appropriate for the servicing or foreclosure of the Mortgage Loan, including
for this purpose collection under any Primary Mortgage Insurance Policy, Owner
shall, upon request of the Servicer and delivery to Owner of a servicing receipt
signed by a Servicing Officer, release the requested portion of the Mortgage
File held by Owner to the Servicer. Owner shall promptly deliver the request to
return the related Mortgage documents to the Custodian. The Servicer shall
return the Mortgage documents to Owner when the need therefor by the Servicer no
longer exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited into the Custodial
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by Owner to the Servicer.
     Section 7.03 Servicing Compensation.
     In addition to any other fees to which Servicer is entitled hereunder, as
compensation for its services hereunder, the Servicer shall be entitled to a
Servicing Fee payable with respect to

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each Mortgage Loan. As to each Mortgage Loan, the Servicing Fee shall (i) be
payable monthly from payment of interest on such Mortgage Loan prior to the
deposit of such payments into the Custodial Account, (ii) accrue at the
applicable Servicing Fee Rate, and (iii) be computed on the basis of the same
principal amount and for the same period respecting which such interest payment
was computed. The Servicer shall be entitled to recover accrued but unpaid
Servicing Fees in respect of any Mortgage Loan to the extent permitted by
Section 4.05. The Servicer’s right to the Servicing Fee shall not be transferred
in whole or in part except in connection with the transfer of all the Servicer’s
obligations under this Agreement. Servicing compensation in addition to the
Servicing Fee, in the form of assumption fees as provided in Section 7.01,
interest paid on funds deposited in the Escrow Account to the extent permitted
by Section 4.06, default interest in excess of the Mortgage Interest Rate and
late payment charges and other ancillary fees, in each case to the extent
collected, shall be retained by the Servicer and shall not be required to be
deposited into the Custodial Account. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement therefor except as specifically
provided for herein.
     Section 7.04 Annual Statement as to Compliance and Attestation.
     (a) Unless an Annual Statement as to Compliance is delivered as provided in
Section 13.04, the Servicer will deliver to Owner on or before April 1 of each
year, beginning with April 1 of the calendar year after the year in which the
first Closing Date occurs, an Officer’s Certificate stating that (i) a review of
the activities of the Servicer during the preceding calendar year and of
performance under this Agreement has been made under such officer’s supervision,
and (ii) to such officer’s knowledge, based on such review, the Servicer has
fulfilled all of its material obligations under this Agreement throughout such
year in all material respects, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
     (b) Unless a Report on Assessment of Compliance and Attestation is
delivered as provided in Section 13.05, on or before April 1 of each year,
beginning with April 1 of the calendar year after the year in which the first
Closing Date occurs, the Servicer at its expense shall cause a firm of
independent certified public accountants (which may also render other services
to the Servicer) to furnish a report to Owner to the effect that certain
mortgage loans serviced by the Servicer were included in the total population of
Mortgage Loans subject to selection for testing in such firm’s examination of
certain documents and records, that such examination was conducted substantially
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
and that such examination disclosed no items of material noncompliance with the
provisions of the Uniform Single Attestation Program for Mortgage Bankers,
except for such items of noncompliance as shall be set forth in such report.
     Section 7.05 Owner’s Right to Examine the Servicer Records.
     Owner shall have the right to examine and audit upon reasonable prior
written notice, during business hours or at such other times as might be
reasonable under applicable circumstances, any and all of the books, records,
documentation or other information of the Servicer, or held by another for the
Servicer or on its behalf or otherwise, which may be relevant

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to the performance or observance by the Servicer of the terms, covenants or
conditions of this Agreement.
     The Servicer shall provide to Owner and any supervisory agents or examiners
which may relate to Owner access to any documentation regarding the Mortgage
Loans which may be required by all applicable regulations. Such access shall be
afforded without charge, upon reasonable request, during normal business hours
and at the offices of the Servicer.
     Neither Owner nor the Servicer shall, nor will they permit any of their
respective affiliates, employees, agents or representatives to, divulge or
disclose, directly or indirectly, any information concerning the Mortgage Loans
in violation of any law. Neither party shall, nor shall they permit any of their
respective affiliates, employees, agents or representatives to, divulge or
disclose, directly or indirectly, any information concerning the business
practices of the other party to this Agreement. This paragraph does not apply to
information which is not confidential or which has been published or otherwise
made available to the general public prior to the date of this Agreement, or
information required to be released under law or by or to any regulatory,
administrative or judicial body or agency or the furnishing by either party of
information to their respective affiliates, auditors, or attorneys.
ARTICLE VIII
REPORTS TO BE PREPARED BY SERVICER
     Section 8.01 The Servicer Shall Provide Information as Reasonably Required.
     During the term of this Agreement the Servicer shall furnish any reports,
or documentation that Owner may reasonably request. Reports requested may
include reports not specified or otherwise required by this Agreement, for
example, reports with respect to REO Properties, or reports required to comply
with any regulations regarding any supervisory agents or examiners of Owner. All
reports will be delivered in accordance with Owner’s reasonable instructions and
directions. If the reports or other information requested will require the
Servicer to incur additional costs or expenses outside of its normal servicing
procedures, Owner agrees to reimburse the Servicer for those costs and expenses.
The Servicer agrees to execute and deliver all such instruments and take all
such action as Owner, from time to time, may reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
ARTICLE IX
THE SERVICER
     Section 9.01 Indemnification; Third Party Claims.
     (a) Each party hereto agrees to indemnify the other party and hold it
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the other party may sustain in any way related to the breach of such party
in performing its duties and obligations under this Agreement.

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     (b) The Servicer shall (i) promptly notify Owner if a material claim is
made by any party with respect to this Agreement or the Mortgage Loans,
(ii) assume the defense of any such claim and pay all expenses in connection
therewith, including attorneys’ fees, and (iii) promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or Owner in
respect of such claim. The Servicer shall follow any written instructions
received from Owner in connection with such claim. Owner shall promptly
reimburse the Servicer for all amounts paid or advanced by it pursuant to the
preceding sentence, except as to amounts as to which the Servicer is required to
indemnify Owner pursuant to Section 3.01.
     Section 9.02 Merger or Consolidation of the Servicer.
     The Servicer will keep in full effect its existence, rights and franchises
as a corporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
or any of the Mortgage Loans and to perform its duties under this Agreement. Any
Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
     Section 9.03 Limitation on Liability of the Servicer and Others.
     Neither the Servicer nor any of the officers, employees or agents of the
Servicer shall be under any liability to Owner for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
substantially in accordance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement. The Servicer and any
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind appearing to be properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expenses or liability;
provided, however, that the Servicer may, with the consent of Owner, undertake
any such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which Owner will be liable. The
Servicer shall be entitled to be reimbursed therefor from Owner upon written
demand.
     Section 9.04 The Servicer Not to Resign.
     Subject to Section 12.04, the Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) by mutual consent of the
Servicer and Owner, (ii) upon the determination that its duties hereunder are no
longer permissible under applicable law and such

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incapacity cannot be cured by the Servicer (any such determination permitting
the resignation of the Servicer shall be evidenced by an opinion of counsel to
such effect delivered to Owner), (iii) following any breach of this Agreement by
Owner, or (iv) in connection with a sale of substantially all of the assets of
the Servicer. No such resignation shall become effective until a successor shall
have assumed the Servicer’s responsibilities and obligations hereunder in the
manner provided in Section 12.01.
ARTICLE X
DEFAULT
     Section 10.01 Events of Default.
     If one or more of the following “Events of Default” by the Servicer shall
occur and be continuing.

  (i)   any failure by the Servicer to remit to Owner any payment required to be
made under the terms of this Agreement which continues unremedied for a period
(3) Business Days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
Owner; or     (ii)   failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of thirty (30) days (except that such number of days shall be fifteen
(15) in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement) after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by Owner; or     (iii)   a decree or order of a court or agency
or supervisory authority having jurisdiction for the appointment of a
conservator receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of sixty (60) days; or     (iv)   the Servicer shall
consent to the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property; or     (v)   the Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or     (vi)   the Servicer ceases to be
eligible to sell Mortgage Loans to and service Mortgage Loans for Fannie Mae and
Freddie Mac, and continues to be ineligible to sell

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      Mortgage Loans to and service Mortgage Loans for Fannie Mae and Freddie
Mac for a period of sixty (60) days after the date on which written notice of
such ineligibility shall have been given to the Servicer by Fannie Mae and
Freddie Mac;

then, and in each and every such case, so long as an Event of Default shall not
have been remedied, Owner, by notice in writing to the Servicer, in addition to
whatever rights Owner may have at law or in equity to damages, including
injunctive relief and specific performance, may terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof other than, with respect to any Additional
Collateral Mortgage Loan, the obligation to administer the related Additional
Collateral Pledge Agreement. On or after the receipt by the Servicer of such
written notice, (i) all authority and power of the Servicer under this
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the successor appointed pursuant to Section 12.01, except
with respect to any related Additional Collateral Pledge Agreement, and
(ii) upon further written request from Owner, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, deliver to the
successor all Mortgage Files, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Servicer’s sole expense. The Servicer
agrees to cooperate with Owner and such successor in effecting the termination
of the Servicer’s responsibilities and rights hereunder as provided above,
including, without limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited by the Servicer to
the Custodial Account or Escrow Account or thereafter received with respect to
the Mortgage Loans.
     Section 10.02 Waiver of Defaults.
     Owner may waive any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
ARTICLE XI
TERMINATION; REPURCHASE
     Section 11.01 Termination.
     The respective obligations and responsibilities of the Servicer shall
terminate upon the latest to occur of: (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
the disposition of all REO Property and the remittance of all funds due
hereunder, (ii) the date agreed upon by mutual consent of the Servicer and Owner
in writing, (iii) the repurchase by the Servicer of all of the Mortgage Loans
subject to this Agreement, pursuant to Section 11.02, or (iv) a resignation
permitted by Section 9.04 hereof.
     Section 11.02 Repurchase.

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     At the sole option of the Servicer and upon thirty (30) days prior written
notice to Owner, if the aggregate outstanding principal balance of all Mortgage
Loans subject to this Agreement which have not been written off as
non-performing assets shall be less than ten percent (10%) of the aggregate
Purchase Price paid for such Mortgage Loans, the Servicer may repurchase all
such outstanding Mortgage Loans; provided, however, that if such Mortgage Loans
are included in a REMIC, the Servicer agrees not to exercise its right to
repurchase unless and until such right can be exercised in conjunction with a
“qualified liquidation” (as defined in Section 860F(a)(4) of the Code) of such
REMIC, as advised by Owner. Such repurchase by the Servicer of such Mortgage
Loans and all related REO Property shall be at a price equal to 100% of the
outstanding principal balance of each Mortgage Loan on the day of repurchase,
plus accrued and unpaid interest thereon at the Mortgage Loan Remittance Rate to
the first day of the calendar month following repurchase, plus the appraised
value of any such REO Property determined at the expense of the Servicer by an
appraiser mutually agreed upon by the Servicer and Owner.
ARTICLE XII
MISCELLANEOUS PROVISIONS
     Section 12.01 Successor to the Servicer.
     Prior to termination of the Servicer’s responsibilities and duties under
this Agreement pursuant to Sections 9.04, 10.01, 11.01 or 12.04, Owner shall
(i) succeed to and assume all of the Servicer’s responsibilities, rights, duties
and obligations under this Agreement, or (ii) appoint a successor who is a
Fannie Mae/Freddie Mac approved servicer having a net worth of not less than
$15,000,000 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
prior to the termination of the Servicer’s responsibilities, duties and
liabilities under this Agreement.
     In connection with such appointment and assumption, Owner may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Servicer’s
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to one of the aforementioned Sections, the Servicer shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might materially impair
or prejudice the rights or financial condition of its successor. The resignation
or removal of the Servicer pursuant to the aforementioned Sections shall not
become effective until a successor shall be appointed pursuant to this Section
and shall in no event relieve the Servicer of the representations and warranties
previously made pursuant to Section 3.01 hereof or Section 5 of the Purchase
Agreement and the remedies available to Owner with respect thereto hereunder and
thereunder.
     Any successor appointed as provided in this Section 12.01 shall execute,
acknowledge and deliver to the Servicer and to Owner an instrument accepting
such appointment, whereupon such successor shall become fully vested with all
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or termination of this Agreement

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pursuant to Section 9.04, 10.01, 11.01, or 12.04 shall not affect any claims
that Owner may have against the Servicer arising prior to any such termination
or resignation.
     The Servicer shall in a timely and reasonable manner deliver to the
successor the funds in the Custodial Account and the Escrow Account and the
Mortgage Files and related documents and statements held by it hereunder and the
Servicer shall account for all funds. The Servicer shall execute and deliver
such instruments and do such other things all as may reasonably be required to
more fully and definitely vest and confirm in the successor all such rights,
powers, duties and responsibilities of the Servicer. The successor shall make
arrangements as it may deem appropriate to reimburse the Servicer for amounts
the Servicer actually expended pursuant to this Agreement which the Servicer is
entitled to retain hereunder and which would otherwise have been reimbursable to
the Servicer pursuant to this Agreement but for the appointment of the successor
servicer.
     Section 12.02 Amendment.
     This Agreement may be amended from time to time by the Servicer and Owner
only by written agreement signed by the Servicer and Owner. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
     Section 12.03 Assignments.
     Except as required under the Purchase Agreement or by applicable law, the
Assignments shall not be recorded by Seller. The Owner may, at its option and
expense (including all recordation fees), prepare and record any Assignment of
Mortgage.
     Section 12.04 Assignment of Servicing Rights.
     The Servicer may assign the servicing rights with respect to the Mortgage
Loans upon the written consent of Owner, which consent shall not be unreasonably
withheld or delayed; provided, however, the Servicer may, without the consent of
Owner enter into one or more Subservicing Agreements relating to the Mortgage
Loans; further provided, however that notwithstanding any subservicing
arrangement, the Servicer shall remain liable to Owner for all obligations and
responsibilities set forth in this Agreement.
     Section 12.05 Governing Law.
     This Agreement is to be governed by, and construed in accordance with, the
internal laws (as compared to conflicts of law provisions) of the State of
Illinois.
     Section 12.06 Notices.
     Any notices, consents or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been duly
given if personally delivered, sent by overnight courier, or mailed by
registered mail, postage prepaid, and return receipt requested, or transmitted
by telex or telegraph and confirmed by a similar mailed writing, or otherwise

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received, if to Owner, addressed to Owner at One Belvedere Place, Suite 310,
Mill Valley, California 94941, Attention: [ ], fax number [ ], or to such other
address as Owner may designate in writing to the Servicer; if to the Servicer,
addressed to the Servicer at at 2500 Lake Cook Road, Riverwoods, Illinois 60015,
Attention: Senior Vice President, fax number [(    )     -    ], with a copy to
Scott de la Vega, Vice President, Morgan Stanley-Law Division, 1585 Broadway,
New York, New York 10036, fax number (646) 290-2606, or to such other address as
the Servicer may have designated in writing to Owner and Guarantor; and, if to
Guarantor, addressed to Guarantor at One Belvedere Place, Suite 300, Mill
Valley, California 94941, Attention: [ ], fax number [ ], or to such other
address as Guarantor may designate in writing to the Servicer.
     Section 12.07 Severability Provisions.
     Any part, provision, representation or warranty of this Agreement that is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, in such jurisdiction, to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction as to
any Mortgage Loan shall not invalidate or render unenforceable such provision in
any other jurisdiction.
     Section 12.08 Exhibits.
     The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
     Section 12.09 General Interpretive Principles.
     For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:

  (i)   the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;     (ii)  
accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with generally accepted accounting principles;     (iii)  
references herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and
other subdivisions without reference to a document are designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this Agreement;    
(iv)   a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;     (v)   (he words “herein,” “hereof,” “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any
particular provision; and

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  (vi)   the terms “include” or “including” shall mean without limitation by
reason of enumeration.

     Section 12.10 Reproduction of Documents.
     This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and
(iii) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
     Section 12.11 Successors and Assigns.
     The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the parties
hereto.
     Section 12.12 Counterparts.
     This Agreement may be executed in several counterparts, each of which shall
constitute an original, but all of which together, shall constitute one
instrument notwithstanding that all parties are not signatories to the same
counterparts.
     Section 12.13 Non-Solicitation.
     (a) From and after the Closing Date, the Servicer agrees that it will not
take any action or cause any action to be taken by its agents to solicit the
Mortgagor under any Mortgage Loan to refinance a Mortgage Loan, in whole or in
part, without the prior written consent of Owner. It is understood and agreed
that promotions for refinance undertaken by the Servicer or its agents that are
directed to segments of the general public, or to all or segments of the clients
of Morgan Stanley Inc. and its affiliates which may include Mortgagors under any
Mortgage Loan, including, without limitation, directed marketing solicitations,
newspaper, radio and television advertisements, shall not constitute a
solicitation under the terms of this Agreement, provided that no segment shall
consist exclusively of such Mortgagors.
     (b) From and after the Closing Date, Owner agrees that it will not take any
action or cause any action to be taken by its agents to solicit the Mortgagor
under any Mortgage Loan for any purpose, or otherwise directly contact any such
Mortgagor, without the prior written consent of the Servicer. It is understood
and agreed that promotions undertaken by Owner or its agents that are directed
to segments of the general public, or to all or segments of the clients of Owner
or its affiliates, which may include Mortgagors under any Mortgage Loan,
including, without limitation, directed marketing solicitations, newspaper,
radio and television advertisements, shall not constitute a solicitation under
the terms of this Agreement, provided that no segment shall consist primarily of
such Mortgagors.

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     Section 12.14 Guaranty of Owner’s Obligations.
     Guarantor hereby agrees to cause RWT Holdings, Inc. to perform all of its
duties and obligations as Owner hereunder, guaranties the timely performance of
such duties and obligations by RWT Holdings, Inc. and agrees to be jointly and
severally liable to Seller for all such duties and obligations of RWT Holdings,
Inc.
ARTICLE XIII
COMPLIANCE WITH REGULATION AB
     Section 13.01 Intent of the Parties; Reasonableness.
     The Owner and the Servicer acknowledge and agree that the purpose of
Article XIII of this Agreement is to facilitate compliance by the Owner and any
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. Although Regulation AB is applicable by its terms only to
offerings of asset-backed securities that are registered under the Securities
Act, the Servicer acknowledges that investors in privately offered securities
may require that the Owner or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
     Neither the Owner nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder (or
the provision in a private offering of disclosure comparable to that required
under the Securities Act). The Servicer acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Owner or any Depositor in good faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with any Securitization
Transaction, the Servicer shall cooperate fully with the Owner to deliver to the
Owner (including any of its assignees or designees), any Master Servicer and any
Depositor, any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Owner, any
Master Servicer or any Depositor to permit the Owner, such Master Servicer or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Servicer, any Subservicer and the Mortgage
Loans, or the servicing of the Mortgage Loans, reasonably believed by the Owner
or any Depositor to be necessary in order to effect such compliance.
     The Owner (including any of its assignees or designees) shall cooperate
with the Servicer by providing timely notice of requests for information under
these provisions and by reasonably limiting such requests to information
required, in the Owner’s reasonable judgment, to comply with Regulation AB.
     Section 13.02 Additional Representations and Warranties of the Servicer.

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     (a) The Servicer hereby represents to the Owner, to any Master Servicer and
to any Depositor, as of the date on which information is first provided to the
Owner, any Master Servicer or any Depositor under Section 13.03 that, except as
disclosed in writing to the Owner or such Depositor prior to such date: (i) the
Servicer is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Servicer; (ii) the
Servicer has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (iii) no material noncompliance with the
applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Servicer has been disclosed or reported
by the Servicer; (iv) no material changes to the Servicer’s policies or
procedures with respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreement for mortgage loans of a type similar
to the Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (v) there are no aspects of
the Servicer’s financial condition that could have a material adverse effect on
the performance by the Servicer of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material legal or
governmental proceedings pending (or known to be contemplated) against the
Servicer or any Subservicer; and (vii) there are no affiliations, relationships
or transactions relating to the Servicer or any Subservicer with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
     (b) If so requested by the Owner, any Master Servicer or any Depositor on
any date following the date on which information is first provided to the Owner,
any Master Servicer or any Depositor under Section 13.03, the Servicer shall,
within five Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in paragraph (a) of
this Section or, if any such representation and warranty is not accurate as of
the date of such request, provide reasonably adequate disclosure of the
pertinent facts, in writing, to the requesting party.
     Section 13.03 Information to Be Provided by the Servicer.
     In connection with any Securitization Transaction the Servicer shall
(i) within five Business Days following request by the Owner or any Depositor,
provide to the Owner and such Depositor (or, as applicable, cause each
Subservicer to provide), in writing and in form and substance reasonably
satisfactory to the Owner and such Depositor, the information and materials
specified in paragraphs (a), (b) and (e) of this Section, and (ii) as promptly
as practicable following notice to or discovery by the Servicer, provide to the
Owner and any Depositor (in writing and in form and substance reasonably
satisfactory to the Owner and such Depositor) the information specified in
paragraph (d) of this Section.
     (a) If so requested by the Owner or any Depositor, the Servicer shall
provide such information regarding the Servicer, as servicer of the Mortgage
Loans, and each Subservicer (each of the Servicer and each Subservicer, for
purposes of this paragraph, a “Servicer”), as is requested for the purpose of
compliance with Items 1108, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:

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          (A)the Servicer’s form of organization;
          (B)a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer’s experience in
servicing assets of any type as well as a more detailed discussion of the
Servicer’s experience in, and procedures for, the servicing function it will
perform under this Agreement and any Reconstitution Agreements; information
regarding the size, composition and growth of the Servicer’s portfolio of
residential mortgage loans of a type similar to the Mortgage Loans and
information on factors related to the Servicer that may be material, in the good
faith judgment of the Owner or any Depositor, to any analysis of the servicing
of the Mortgage Loans or the related asset-backed securities, as applicable,
including, without limitation:

  (i)   whether any prior securitizations of mortgage loans of a type similar to
the Mortgage Loans involving the Servicer have defaulted or experienced an early
amortization or other performance triggering event because of servicing during
the three-year period immediately preceding the related Securitization
Transaction;     (ii)   the extent of outsourcing the Servicer utilizes;    
(iii)   whether there has been previous disclosure of material noncompliance
with the applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Servicer as a servicer during the
three-year period immediately preceding the related Securitization Transaction;
    (iv)   whether the Servicer has been terminated as servicer in a residential
mortgage loan securitization, either due to a servicing default or to
application of a servicing performance test or trigger; and     (v)   such other
information as the Owner or any Depositor may reasonably request for the purpose
of compliance with Item 1108(b)(2) of Regulation AB;

          (C) a description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the Servicer’s
policies or procedures with respect to the servicing function it will perform
under this Agreement and any Reconstitution Agreements for mortgage loans of a
type similar to the Mortgage Loans;
          (D) information regarding the Servicer’s financial condition, to the
extent that there is a material risk that an adverse financial event or
circumstance involving the Servicer could have a material adverse effect on the
performance by the Servicer of its servicing obligations under this Agreement or
any Reconstitution Agreement;
          (E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer’s overall servicing portfolio of residential
mortgage loans for the three-

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year period immediately preceding the related Securitization Transaction, which
may be limited to a statement by an authorized officer of the Servicer to the
effect that the Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such period, or, if such
statement would not be accurate, information regarding the percentage and type
of advances not made as required, and the reasons for such failure to advance;
          (F) a description of the Servicer’s processes and procedures designed
to address any special or unique factors involved in servicing loans of a
similar type as the Mortgage Loans;
          (G) a description of the Servicer’s processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through liquidation
of mortgaged properties, sale of defaulted mortgage loans or workouts; and
          (H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other practices
with respect to delinquency and loss experience.
          (I) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Servicer; and
          (J) a description of any affiliation or relationship between the
Servicer and any of the following parties to a Securitization Transaction, as
such parties are identified to the Servicer by the Owner or any Depositor in
writing in advance of such Securitization Transaction:
(1) the Sponsor;
(2) the Depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
     (b) For the purpose of satisfying the reporting obligations of an Owner,
Master Servicer or Depositor under the Exchange Act with respect to any class of
asset-backed securities, the Servicer shall (or shall cause each Subservicer to)
(i) provide prompt notice to the Owner, any Master Servicer and any Depositor in
writing of (A) any material litigation or governmental proceedings involving the
Servicer, any Subservicer, (B) any affiliations or relationships that develop
following the closing date of a Securitization Transaction between the Servicer,
any Subservicer and any of the parties specified in clause (J) of paragraph
(a) of this Section (and any other parties identified in writing by the
requesting party) with respect to such Securitization Transaction, (C) any Event
of Default under the terms of this Agreement or any Reconstitution Agreement,
(D) any merger, consolidation or sale of substantially all of the assets of the
Servicer, and (E) the Servicer’s entry into an agreement with a Subservicer to
perform or assist in the performance of any of the Servicer’s obligations under
this Agreement or any

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Reconstitution Agreement, and (ii) provide to the Owner and any Depositor a
description of such proceedings, affiliations or relationships.
     (c) As a condition to the succession to the Servicer or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Servicer or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Servicer or
any Subservicer, the Servicer shall provide to the Owner, any Master Servicer
and any Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Owner and any Depositor of
such succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor, all information
reasonably requested by the Owner or any Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to any class of
asset-backed securities.
     (d) In addition to such information as the Servicer, as servicer, is
obligated to provide pursuant to other provisions of this Agreement not later
than ten days prior to the deadline for the filing of any distribution report on
Form 10-D in respect of any Securitization Transaction that includes any of the
Mortgage Loans serviced by the Servicer or any Subservicer, the Servicer or such
Subservicer, as applicable, shall, to the extent the Servicer or such
Subservicer has knowledge, provide to the party responsible for filing such
report (including, if applicable, the Master Servicer) notice of the occurrence
of any of the following events along with all information, data, and materials
related thereto as may be required to be included in the related distribution
report on Form 10-D (as specified in the provisions of Regulation AB referenced
below):
     (i) any material modifications, extensions or waivers of pool asset terms,
fees, penalties or payments during the distribution period or that have
cumulatively become material over time (Item 1121(a)(11) of Regulation AB;
     (ii) material breaches of pool asset representations or warranties or
transaction covenants (Item 1121(a)(12) of Regulation AB; and
     (e) The Servicer shall provide to the Owner, any Master Servicer and any
Depositor, evidence of the authorization of the person signing any certification
or statement, copies or other evidence of Fidelity Bond Insurance and Errors and
Omission Insurance policy, financial information and reports, and such other
information related to the Servicer or any Subservicer or the Servicer’s or such
Subservicer’s performance hereunder.
     Section 13.04 Annual Statements as to Compliance.
          On or before March 1 of each calendar year, commencing in 2007, the
Servicer shall deliver to the Owner, any Master Servicer and any Depositor a
statement of compliance addressed to the Owner, such Master Servicer and such
Depositor and signed by an authorized officer of the Servicer, to the effect
that (i) a review of the Servicer’s activities during the immediately preceding
calendar year (or applicable portion thereof) and of its performance under this
Agreement and any applicable Reconstitution Agreement during such period has
been made under such officer’s supervision, and (ii) to the best of such
officers’ knowledge, based on such

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review, the Servicer has fulfilled all of its obligations under this Agreement
and any applicable Reconstitution Agreement in all material respects throughout
such calendar year (or applicable portion thereof) or, if there has been a
failure to fulfill any such obligation in any material respect, specifically
identifying each such failure known to such officer and the nature and the
status thereof.
     Section 13.05 Report on Assessment of Compliance and Attestation.
          On or before March 1 of each calendar year, commencing in 2007, the
Servicer shall:

  (i)   deliver to the Owner, any Master Servicer and any Depositor a report (in
form and substance reasonably satisfactory to the Owner, such Master Servicer
and such Depositor) regarding the Servicer’s assessment of compliance with the
Servicing Criteria during the immediately preceding calendar year, as required
under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Owner, such Master Servicer
and such Depositor and signed by an authorized officer of the Servicer, and
shall address each of the Servicing Criteria specified on Exhibit C;     (ii)  
deliver to the Owner, any Master Servicer and any Depositor a report of a
registered public accounting firm reasonably acceptable to the Owner, such
Master Servicer and such Depositor that attests to, and reports on, the
assessment of compliance made by the Servicer and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act;     (iii)   cause each Subservicer, and each Subcontractor
determined by the Servicer pursuant to Section 13.06(b) to be “participating in
the servicing function” within the meaning of Item 1122 of Regulation AB, to
deliver to the Owner, any Master Servicer and any Depositor an assessment of
compliance and accountants’ attestation as and when provided in paragraphs
(a) and (b) of this Section; and     (iv)   if requested by the Owner, any
Master Servicer or any Depositor, deliver, and cause each Subservicer and
Subcontractor as described in clause (iii) to provide, to the Owner, such Master
Servicer and such Depositor and any other Person that will be responsible for
signing the certification (a “Sarbanes Certification”) required by
Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002) on behalf of an asset-backed issuer with respect
to a Securitization Transaction a certification in the form attached hereto as
Exhibit D.

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     The Servicer acknowledges that the parties identified in clause (a)(iv)
above may rely on the certification provided by the Servicer pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
Neither the Owner nor any Master Servicer nor any Depositor will request
delivery of a certification under clause (a)(iv) above unless a Depositor is
required under the Exchange Act to file an annual report on Form 10-K with
respect to an issuing entity whose asset pool includes Mortgage Loans.
     Each assessment of compliance provided by a Subservicer pursuant to
Section 13.05(a)(i) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit C hereto delivered to the
Owner concurrently with the execution of this Agreement or, in the case of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant to
Section 13.05(a)(iii) need not address any elements of the Servicing Criteria
other than those specified by the Servicer pursuant to Section 13.06.
     Section 13.06 Use of Subservicers and Subcontractors.
     The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer as servicer under
this Agreement or any Reconstitution Agreement unless the Servicer complies with
the provisions of paragraph (a) of this Section. The Servicer shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Servicer as servicer under this Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (b) of this Section.
     (a) It shall not be necessary for the Servicer to seek the consent of the
Owner, any Master Servicer or any Depositor to the utilization of any
Subservicer. The Servicer shall cause any Subservicer used by the Servicer (or
by any Subservicer) for the benefit of the Owner and any Depositor to comply
with the provisions of this Section and with Sections 13.02, 13.03(a) and (c),
13.04, 13.05 and 13.07 of this Agreement to the same extent as if such
Subservicer were the Servicer, and to provide the information required with
respect to such Subservicer under Section 13.03(d) of this Agreement. The
Servicer shall be responsible for obtaining from each Subservicer and delivering
to the Owner and any Depositor any servicer compliance statement required to be
delivered by such Subservicer under Section 13.04, any assessment of compliance
and attestation required to be delivered by such Subservicer under Section 13.05
and any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 13.05 as and
when required to be delivered.
     (b) It shall not be necessary for the Servicer to seek the consent of the
Owner, any Master Servicer or any Depositor to the utilization of any
Subcontractor. The Servicer shall promptly upon request provide to the Owner and
any Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory to the
Owner and such Depositor) of the role and function of each Subcontractor
utilized by the Servicer or any Subservicer, specifying (i) the identity of each
such Subcontractor, (ii) which (if any) of such Subcontractors are
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the

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Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (ii) of this paragraph.
     As a condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of Sections 13.05 and 13.07 of this Agreement to
the same extent as if such Subcontractor were the Servicer. The Servicer shall
be responsible for obtaining from each Subcontractor and delivering to the Owner
and any Depositor any assessment of compliance and attestation or other
certifications required to be delivered by such Subcontractor under
Section 13.05, in each case as and when required to be delivered.
     Section 13.07 Indemnification; Remedies.
     (a) The Servicer shall indemnify the Owner, each affiliate of the Owner,
and each of the following parties participating in a Securitization Transaction:
each Person (including, but not limited to, any Master Servicer if applicable)
responsible for the preparation, execution or filing of any report required to
be filed with Commission with respect to such Securitization Transaction, or for
execution of a certification pursuant to Rule 13a-14d or Rule 15d-14d under the
Exchange Act with respect to such Securitization Transaction, each sponsor and
issuing entity; each broker dealer acting as underwriter, placement agent or
initial purchaser, each Person who controls any of such parties or the Depositor
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act); and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and of the Depositor
(each, an “Indemnified Party”), and shall hold each of them harmless from and
against any claims, losses, damages, penalties, fines, forfeitures, legal fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:

  (i)   (A) any untrue statement of a material fact contained or alleged to be
contained in any information, report, certification, data, accountants’ letter
or other material provided under this Article 13 by or on behalf of the
Servicer, or provided under this Article 13 by or on behalf of any Subservicer
or Subcontractor (collectively, the “Servicer Information”), or (B) the omission
or alleged omission to state in the Servicer Information a material fact
required to be stated in the Servicer Information or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the Servicer Information and
not to any other information communicated in connection with a sale or purchase
of securities, without regard to whether the Servicer Information or any portion
thereof is presented together with or separately from such other information;  
  (ii)   any breach by the Servicer of its obligations under this Article XIII,
including any failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification, accountants’ letter or other
material when and as

40

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      required under this Article 13, including any failure by the Servicer to
identify pursuant to Section 13.06(b) any Subcontractor “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB;     (iii)
  any breach by the Servicer of a representation or warranty set forth in
Section 13.02(a) or in a writing furnished pursuant to Section 13.02(b) and made
as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Servicer of a representation or warranty in a writing
furnished pursuant to Section 13.02(b) to the extent made as of a date
subsequent to such closing date; or     (iv)   the negligence, bad faith or
willful misconduct of the Servicer in connection with its performance under this
Article XIII.

     If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an Indemnified Party, then the Servicer agrees
that it shall contribute to the amount paid or payable by such Indemnified Party
as a result of any claims, losses, damages or liabilities incurred by such
Indemnified Party in such proportion as is appropriate to reflect the relative
fault of such Indemnified Party on the one hand and the Servicer on the other.
     In the case of any failure of performance described in clause (a)(ii) of
this Section, the Servicer shall promptly reimburse the Owner, any Depositor, as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Servicer, any Subservicer or
any Subcontractor.
     This indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
     (b) (i) Any failure by the Servicer, any Subservicer or any Subcontractor
to deliver any information, report, certification, accountants’ letter or other
material when and as required under this Article 13, or any breach by the
Servicer of a representation or warranty set forth in Section 13.02(a) or in a
writing furnished pursuant to Section 13.02(b) and made as of a date prior to
the closing date of the related Securitization Transaction, to the extent that
such breach is not cured by such closing date, or any breach by the Servicer of
a representation or warranty in a writing furnished pursuant to Section 13.02(b)
to the extent made as of a date subsequent to such closing date, shall, except
as provided in clause (ii) of this paragraph, immediately and automatically,
without notice or grace period, constitute an Event of Default with respect to
the Servicer under this Agreement and any applicable Reconstitution Agreement,
and shall entitle the Owner or Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Servicer as servicer under this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Servicer; provided that to
the extent that any provision of this Agreement and/or any applicable

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Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Servicer as servicer, such provision
shall be given effect.
     (ii) Any failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants’ letter when and
as required under Section 13.04 or 13.05, including (except as provided below)
any failure by the Servicer to identify pursuant to Section 13.06(b) any
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, which continues unremedied for ten calendar days
after the date on which such information, report, certification or accountants’
letter was required to be delivered shall constitute an Event of Default with
respect to the Servicer under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Owner or Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Servicer as servicer
under this Agreement and/or any applicable Reconstitution Agreement without
payment (notwithstanding anything in this Agreement to the contrary) of any
compensation to the Servicer (and if the Servicer is servicing any of the
Mortgage Loans in a Securitization Transaction, appoint a successor servicer
reasonably acceptable to any Master Servicer for such Securitization
Transaction); provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Servicer
as servicer, such provision shall be given effect.
     Neither the Owner nor any Depositor shall be entitled to terminate the
rights and obligations of the Servicer pursuant to this subparagraph (b)(ii) if
a failure of the Servicer to identify a Subcontractor “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
     (iii) The Servicer shall promptly reimburse the Owner (or any designee of
the Owner, such as a master servicer) and any Depositor, as applicable, for all
reasonable expenses incurred by the Owner (or such designee) or such Depositor,
as such are incurred, in connection with the termination of the Servicer as
servicer and the transfer of servicing of the Mortgage Loans to a successor
servicer. The provisions of this paragraph shall not limit whatever rights the
Owner or any Depositor may have under other provisions of this Agreement and/or
any applicable Reconstitution Agreement or otherwise, whether in equity or at
law, such as an action for damages, specific performance or injunctive relief.
     Section 13.08 Third Party Beneficiary.
     For purposes of this Article XIII and any related provisions thereto, each
Master Servicer shall be considered a third party beneficiary of this Agreement,
entitled to all the rights and benefits hereof as if it were a party to this
Agreement.

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the day and year
first set forth above.

                  RWT HOLDINGS, INC.    
 
           
 
  By::        
 
           
 
  Name:        
 
  Title:        
 
                MORGAN STANLEY CREDIT CORPORATION    
 
           
 
  By:        
 
           
 
  Name:        
 
  Title:        
 
                REDWOOD TRUST, INC.    
 
           
 
  By:        
 
           
 
  Name:        
 
  Title:        

 

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EXHIBIT A
FORM OF LIMITED POWER OF ATTORNEY
     KNOW ALL MEN BY THESE PRESENTS that RWT Holdings, Inc. (“Owner”) having its
principal place of business at 591 Redwood Highway, Suite 3140, Mill Valley,
California 94941, hereby constitutes and appoints Morgan Stanley Credit
Corporation (“the Servicer”), a Delaware corporation having its principal place
of business at 2500 Lake Cook Road, Riverwoods, Illinois 60015, by and through
any of its Vice Presidents or more senior officers, its true and lawful
Attorney-in-Fact, in its name, place and stead and for its benefit, in
connection with all residential mortgage loans serviced by the Servicer for
Owner for the purposes of performing all acts and executing all documents in the
name of Owner necessary and incidental to servicing said loans, including but
not limited to:
     (1) Foreclosing delinquent loans or discontinuing such foreclosure
proceedings, executing claims for insurance benefits under private mortgage
insurance policies and endorsing related proceeds checks made payable to Owner;
     (2) Selling, transferring or otherwise disposing of real property acquired
through foreclosure or otherwise, including but not limited to executing all
contracts, agreements, deeds, assignments or other instruments reasonably
necessary or advisable to effect such sale, transfer or disposition, and
receiving proceeds and endorsing checks made payable to the order of Owner from
such proceedings;
     (3) Preparing, executing and delivering satisfactions, cancellations,
discharges, or full or partial releases of lien, subordination agreements,
modification agreements, assumption agreements, and substitutions of trustees
under deeds of trust;
     (4) Endorsing promissory notes and executing assignments of mortgages,
deeds of trust, deeds to secure debt and other security instruments securing
said promissory notes in connection with loans for which the Servicer has
received full payment of all outstanding amounts due; and
     (5) Any and all such other acts of any kind and nature whatsoever that are
necessary and prudent to service the loans.
     Owner further grants to the Servicer full power and authority to do and
perform all acts necessary for the Servicer to carry into effect the power or
powers granted by or under this Limited Power of Attorney as fully as Owner
might or could do with the same validity as if all and every such act had been
herein particularly stated, expressed and especially provided for, and hereby
ratifies and confirms all that the Servicer shall lawfully have done, do, or
cause to be done by virtue of the powers and authority and contemplated hereby.
This Limited Power of Attorney shall be effective as of November 1, 2006.
     Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney, and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect until revoked
in writing by Owner. Third parties without actual

A-1

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notice may rely upon a certificate to the effect set forth in the preceding
sentence given by the Servicer.

                  ATTEST   RWT HOLDINGS, INC.    
 
               
By:
      By:        
 
               
 
  Name:       Name:    
 
  Title:       Title:    

                 
STATE OF
        )      
 
               
 
        )     ss:
COUNTY OF
        )      
 
               

     On the ___day of___, ___, before me, the undersigned, a Notary Public in
and for said county and state, personally appeared
                                         and                               
          , personally known to me to be the persons who executed the within
instrument as                                          and
                                        , respectively, on behalf of the
corporation therein named, and they duly severally acknowledged that they reside
at                                          and that said instrument is the act
and deed of said corporation, and that they, being authorized to do so, executed
and delivered said instrument and affixed the corporate seal thereto for the
purposes therein contained.
     Witness my hand and official seal:
Notary Public State of                                         
My Commission Expires:                                         

A-2

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EXHIBIT B
FORM OF MONTHLY SERVICER REPORT

B-1

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EXHIBIT C
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
     The assessment of compliance to be delivered by [Morgan Stanley Credit
Corporation] [Subservicer] shall address, at a minimum, the criteria identified
as below as “Applicable Servicing Criteria”:

              Servicing Criteria   Applicable Reference   Criteria   Servicing
Criteria
 
  General Servicing Considerations      
1122(d)(1)(i)
  Policies and procedures are instituted to monitor any performance or other
triggers and events of default in accordance with the transaction agreements.  
X
 
       
1122(d)(1)(ii)
  If any material servicing activities are outsourced to third parties, policies
and procedures are instituted to monitor the third party’s performance and
compliance with such servicing activities.   X
 
       
1122(d)(1)(iii)
  Any requirements in the transaction agreements to maintain a back-up servicer
for the mortgage loans are maintained.    
 
       
1122(d)(1)(iv)
  A fidelity bond and errors and 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.   X
 
       
 
  Cash Collection and Administration    
 
       
1122(d)(2)(i)
  Payments on mortgage loans are 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.   X
 
       
1122(d)(2)(ii)
  Disbursements made via wire transfer on behalf of an obligor or to an investor
are made only by authorized personnel.   X

C-1

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              Servicing Criteria   Applicable Reference   Criteria   Servicing
Criteria
1122(d)(2)(iii)
  Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.   X
 
       
1122(d)(2)(iv)
  The related accounts for the transaction, such as cash reserve accounts or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth in the
transaction agreements.   X
 
       
1122(d)(2)(v)
  Each custodial account is maintained 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 the Securities Exchange Act.   X
 
       
1122(d)(2)(vi)
  Unissued checks are safeguarded so as to prevent unauthorized access.   X
 
       
1122(d)(2)(vii)
  Reconciliations are prepared on a 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.   X
 
       
 
  Investor Remittances and Reporting    

C-2

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              Servicing Criteria   Applicable Reference   Criteria   Servicing
Criteria
1122(d)(3)(i)
  Reports to investors, including 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
mortgage loans serviced by the Servicer.   X
 
       
1122(d)(3)(ii)
  Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction
agreements.   X
 
       
1122(d)(3)(iii)
  Disbursements made to an investor are posted within two business days to the
Servicer’s investor records, or such other number of days specified in the
transaction agreements.   X
 
       
1122(d)(3)(iv)
  Amounts remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.   X
 
       
 
  Pool Asset Administration    
 
       
1122(d)(4)(i)
  Collateral or security on mortgage loans is maintained as required by the
transaction agreements or related mortgage loan documents.   X
 
       
1122(d)(4)(ii)
  Mortgage loan and related documents are safeguarded as required by the
transaction agreements   X
 
       
1122(d)(4)(iii)
  Any additions, removals or substitutions to the asset pool are made, reviewed
and approved in accordance with any conditions or requirements in the
transaction agreements.   X

C-3

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              Servicing Criteria   Applicable Reference   Criteria   Servicing
Criteria
1122(d)(4)(iv)
  Payments on mortgage loans, including any payoffs, made in accordance with the
related mortgage loan 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 mortgage
loan documents.   X
 
       
1122(d)(4)(v)
  The Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.   X
 
       
1122(d)(4)(vi)
  Changes with respect to the terms or status of an obligor’s mortgage loans
(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 documents.   X
 
       
1122(d)(4)(vii)
  Loss mitigation or recovery actions (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 the transaction agreements.   X
 
       
1122(d)(4)(viii)
  Records documenting collection efforts are maintained during the period a
mortgage loan 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 mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).   X
 
       
1122(d)(4)(ix)
  Adjustments to interest rates or rates of return for mortgage loans with
variable rates are computed based on the related mortgage loan documents.   X

C-4

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              Servicing Criteria   Applicable Reference   Criteria   Servicing
Criteria
1122(d)(4)(x)
  Regarding any funds held in trust for an obligor (such as escrow accounts):
(A) such funds are analyzed, in accordance with the obligor’s mortgage loan
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 mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number of days specified
in the transaction agreements.   X
 
       
1122(d)(4)(xi)
  Payments made on behalf of an 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 agreements.   X
 
       
1122(d)(4)(xii)
  Any late payment penalties in 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 or omission.   X
 
       
1122(d)(4)(xiii)
  Disbursements made on behalf of an obligor are posted within two business days
to the obligor’s records maintained by the servicer, or such other number of
days specified in the transaction agreements.   X
 
       
1122(d)(4)(xiv)
  Delinquencies, charge-offs and uncollectible accounts are recognized and
recorded in accordance with the transaction agreements.   X
 
       
1122(d)(4)(xv)
  Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.    

C-5

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[MORGAN STANLEY CREDIT CORPORATION]
     [SUBSERVICER]
Date:

C-6

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EXHIBIT D
FORM OF ANNUAL CERTIFICATION

       Re:   The [ ] agreement dated as of [ l, 200[ ] (the “Agreement”), among
[IDENTIFY PARTIES]

     I,                                                             , the      
                                    of [NAME OF SERVICER] and, in such capacity,
the officer in charge of the Servicer’s responsibility on Exhibit D to the
Agreement. I hereby certify to [the Purchaser], [the Depositor], and the [Master
Servicer], and their officers, with the knowledge and intent that they will rely
upon this certification, that:
          (A) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the “Compliance
Statement”), the report on assessment of the Servicer’s compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of
Regulation AB (the “Servicing Assessment”), the registered public accounting
firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation
Report”), and all other data, servicing reports, officer’s certificates and
other information relating to the performance of the Servicer under the terms of
the Agreement and the servicing of the Mortgage Loans by the Servicer during
200[ ] that were delivered to the [Depositor] [Master Servicer] pursuant to the
Agreement to the extent included in any Form 8-Ks, Form 10-Ds, Form 10-Ks or
similar forms required by the Commission from time to time for the period
covered by the Compliance Statement (collectively, the “Servicer Servicing
Information”);
          (B) Based on my knowledge, the reports and information comprising the
Servicer Servicing Information, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which such
statements were made, not misleading as of the period covered by, or the date of
such reports or information or the date of this certification;
          (C) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been provided to
the [Depositor] [Master Servicer];
          (D) I am responsible for reviewing the activities performed by the
Servicer as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and except as
disclosed in the Compliance Statement, the Servicing Assessment or the
Attestation Report, the Servicer has fulfilled its obligations under the
Agreement in all material respects; and
          (E) The Compliance Statement required to be delivered by the Servicer
pursuant to the Agreement, and the Servicing Assessment and Attestation Report
required to be provided by the Servicer and by any Subservicer or Subcontractor
pursuant to the Agreement, have been provided to the [Depositor] [Master
Servicer]. The Servicing Assessment and the

D-1

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Attestation Report cover all items of the servicing criteria identified on
Exhibit C to the Agreement as applicable to the Servicer. Any material instances
of noncompliance described in such reports have been disclosed to the
[Depositor] [Master Servicer]. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports. The following material
instances of noncompliance identified in the Servicing Assessment and the
Attestation Report relate to the performance or obligations of the Servicer
under the Agreement:                      (if none, state “None.”)

             
 
  Date:        
 
           
 
           
 
  By:        
 
           
 
  Name:        
 
  Title:        

D-2

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MORGAN — SEQUOIA TO TRUSTEE
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
For
Master Servicing Agreement
     THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated as of May 25,
2007 (“Assignment No. II”), is entered into among Sequoia Residential Funding,
Inc. (the “Assignor”), Morgan Stanley Credit Corporation (formerly Morgan
Stanley Dean Witter Credit Corporation), as the servicer (the “Servicer”), and
HSBC Bank USA, National Association (“HSBC Bank”) as Trustee under a Pooling and
Servicing Agreement dated as of May 1, 2007 (the “Pooling and Servicing
Agreement”), among the Assignor, as Depositor, HSBC Bank (in such Trustee
capacity, the “Assignee”) and Wells Fargo Bank, N. A., as Master Servicer and
Securities Administrator.
RECITALS
     WHEREAS, Redwood Trust, Inc. (“Redwood”) and the Servicer have entered into
a certain Master Servicing Agreement, dated as of August 1, 2001 (as amended or
modified to the date hereof, the “2001 Master Servicing Agreement”), and the
Servicer is currently servicing certain mortgage loans (the “Mortgage Loans”)
under the 2001 Master Servicing Agreement; and
     WHEREAS, RWT Holdings, Inc. (“RWT”) has previously acquired from Redwood
and has sold, assigned and transferred all of its right, title and interest in
certain of the Mortgage Loans (the “Specified Mortgage Loans”) which are listed
on the mortgage loan schedule attached as Exhibit I hereto (the “Specified
Mortgage Loan Schedule”) and its rights under the 2001 Master Servicing
Agreement with respect to the Specified Mortgage Loans to Assignor; and
     WHEREAS, the parties hereto agree that notwithstanding anything to the
contrary in the 2001 Master Servicing Agreement, the Specified Mortgage Loans
are currently being serviced by the Servicer pursuant to the Master Servicing
Agreement, dated as of November 1, 2006, between RWT and Servicer (the “Master
Servicing Agreement”); and
     WHEREAS, the Assignor has agreed to sell, assign and transfer to Assignee
all of its right, title and interest in the Specified Mortgage Loans and its
rights under the Master Servicing Agreement with respect to the Specified
Mortgage Loans; and
     WHEREAS, the parties hereto have agreed that the Specified Mortgage Loans
shall be subject to the terms of this Assignment No. II.
     NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties agree as follows:

1

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     1. Assignment and Assumption.
     (a) Effective on and as of the date hereof, the Assignor hereby pledges,
assigns and transfers to the Assignee all of its right, title and interest in
the Specified Mortgage Loans and all of its rights (but none of the Owner’s
obligations) provided under the Master Servicing Agreement to the extent
relating to the Specified Mortgage Loans, the Assignee hereby accepts such
assignment from the Assignor, and the Servicer hereby acknowledges such
assignment and assumption.
     (b) Effective on and as of the date hereof, the Assignor represents and
warrants to the Assignee that the Assignor has not taken any action that would
serve to impair or encumber the Assignee’s interest in the Specified Mortgage
Loans since the date of the Assignor’s acquisition of the Specified Mortgage
Loans.
     2. Recognition of the Assignee.
     From and after the date hereof, the Servicer shall recognize the Assignee
as the holder of the rights and benefits of the Owner with respect to the
Specified Mortgage Loans and the Servicer will service the Specified Mortgage
Loans for the Assignee as if the Assignee and the Servicer had entered into a
separate servicing agreement for the servicing of the Specified Mortgage Loans
in the form of the Master Servicing Agreement (as modified by Appendix A hereto)
(the “Successor MSA”) with the Assignee as the Owner thereunder, which Successor
MSA is incorporated in and made a part of this Assignment No. II. It is the
intention of the parties hereto that the Successor MSA will be treated as a
separate and distinct servicing agreement between the parties hereto to the
extent of the Specified Mortgage Loans and shall be binding upon and for the
benefit of the respective successors and assigns of the parties hereto.
     3. Assignor’s Continuing Rights and Responsibilities.
     Notwithstanding Sections 1 and 2 above, the parties hereto agree that the
Assignor rather than the Assignee shall have the ongoing rights and
responsibilities of the Owner under the following sections of the Master
Servicing Agreement:

      Section   Matter
4.01
  (a) Role of the Servicer.
 
   
7.05, 1st ¶ and 2nd ¶
  (b) Owner’s Right to Examine the Servicer Records.
 
   
8.01
  (c) The Servicer Shall Provide Information as Reasonably
 
   
 
  Required.

2

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      Section   Matter
9.01(a) and (b)
  (d) Indemnification; Third-Party Claims.
 
   
9.03
  (e) Limitation on Liability of Servicer and Others.
 
   
12.03
  (f) Assignments.
 
   
12.13(b)
  (g) Non-Solicitation.

In addition, the Servicer agrees to furnish to the Assignor and Master Servicer
copies of reports, notices, statements and other communications required to be
delivered by the Servicer pursuant to any of the sections of the Master
Servicing Agreement referred to above and under the following sections, at the
times therein specified:

      Section    
4.11, 5th and 6th ¶’s
  (a) Title Management and Disposition of REO Property.
 
   
6.02
  (b) Statements to Owner.
 
   
6.03(d)
  (c) Monthly Advances by the Servicer.
 
   
13.04
  (d) Annual Statement as to Compliance
 
   
13.05
  (e) Report on Assessment of Compliance and Attestation

     4. Successor MSA.
The Successor MSA includes the Master Servicing Agreement as modified by
Appendix A hereto and is made a part of this Assignment No. II.
     5. Representations and Warranties.
     (a) Each of the parties hereto represents and warrants that it is duly and
legally authorized to enter into this Assignment No. II.

3

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     (b) Each of the parties hereto represents and warrants that this Assignment
No. II has been duly authorized, executed and delivered by it and (assuming due
authorization, execution and delivery thereof by each of the other parties
hereto) constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

4

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     6. Continuing Effect.
Except as contemplated hereby, the Master Servicing Agreement shall remain in
full force and effect in accordance with its terms.
     7. Governing Law.
This Assignment No. II and the rights and obligations hereunder shall be
governed by and construed in accordance with the internal laws of the State of
Illinois.
     8. Notices.
Any notices or other communications permitted or required under the Master
Servicing Agreement to be made to the Assignor and Assignee shall be made in
accordance with the terms of the Master Servicing Agreement and shall be sent to
the Assignor and Assignee as follows:
Sequoia Residential Funding, Inc.
One Belvedere Place, Suite 330
Mill Valley, CA 94941
HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018
or to such other address as may hereafter be furnished by the Assignor or
Assignee to the other parties in accordance with the provisions of the Master
Servicing Agreement.
     9. Counterparts.
This Assignment No. II may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same instrument.
     10. Definitions.
Any capitalized term used but not defined in this Assignment No. II has the same
meaning as in the Master Servicing Agreement or the Master Mortgage Loan
Purchase Agreement referred to therein.
     11. Master Servicer.
     The Servicer hereby acknowledges that the Assignee has appointed Wells
Fargo Bank, N. A. (the “Master Servicer”) to act as master servicer and
securities administrator under the Pooling and Servicing Agreement and hereby
agrees to treat all inquiries, instructions, authorizations and other
communications from the Master Servicer as if the same had been received from
the Assignee. The Master Servicer, acting on behalf of the Assignee, shall have
the rights of the Assignee as the Owner under the Successor MSA to enforce the
obligations of

5

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the Servicer thereunder. Any notices or other communications permitted or
required under the Master Servicing Agreement to be made to the Assignee shall
be made in accordance with the terms of the Master Servicing Agreement and shall
be sent to the Master Servicer at the following address:
Wells Fargo Bank, N. A.
P.O. Box 98
Columbia, Maryland 21046
(or, for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland
21045)
Attention: Sequoia Mortgage Trust 2007-2
or to such other address as may hereafter be furnished by the Master Servicer to
Servicer. Any such notices or other communications permitted or required under
the Master Servicing Agreement may be delivered in electronic format unless
manual signature is required in which case a hard copy of such report or
communication shall be required.
     The Servicer further acknowledges that the Assignor has engaged the Master
Servicer to provide certain default administration and that the Master Servicer,
acting as agent of the Assignor, may exercise any of the rights of the Owner
retained by the Assignor in Section 3 above.
     The Servicer shall make all distributions under the Successor MSA, as they
relate to the Specified Mortgage Loans, to the Master Servicer by wire transfer
of immediately funds to:
Wells Fargo Bank, NA
San Francisco, CA
ABA# 121-000-248
Acct# 3970771416
Acct Name: SAS Clearing
FFC: 53145300

[remainder of page intentionally left blank]

6

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment No. II the
day and year first above written.
ASSIGNOR:
SEQUOIA RESIDENTIAL FUNDING, INC.
By:
Name:
Title:
ASSIGNEE:
HSBC BANK USA, NATIONAL
ASSOCIATION
By:
Name:
Title:
SERVICER:
MORGAN STANLEY CREDIT CORPORATION
By:
Name:
Title:

7

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EXHIBIT I

 

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APPENDIX A
MASTER SERVICING AGREEMENT
     1. The definition of Custodial Account is revised to read as follows:
     “ ‘Custodial Account’: The separate trust account or accounts created and
maintained pursuant to Section 4.04 of this Agreement which shall be entitled
“Morgan Stanley Credit Corporation, in trust for ‘HSBC Bank USA, National
Association, as Trustee, under the Pooling and Servicing Agreement dated as of
May 1, 2007,’ or such other title as is requested by the Owner.”
     2. The definition of Escrow Account is revised to read as follows:
“ ‘Escrow Account’: The separate trust account or accounts created and
maintained pursuant to Section 4.06 on which shall be entitled “Morgan Stanley
Credit Corporation, as Servicer, in trust for ‘HSBC Bank USA, National
Association, as Trustee, under the Pooling and Servicing Agreement dated as of
May 1, 2007,’ or such other title as is requested by Owner.”
     3. Section 4.18, second sentence is revised to read as follows:
“All such Permitted Investments shall be registered in the name of the Servicer
or its nominee, and held in trust for HSBC Bank USA, National Association, as
Trustee, under the Pooling and Servicing Agreement dated May 1, 2007.”
     4. Notwithstanding any provision in the Agreement to the contrary, the
Servicer agrees that it will report to the Master Servicer on a monthly basis on
the date specified therein using the formats attached hereto as Exhibit 1.
     5. The third full paragraph of Section 6.01 is hereby deleted in its
entirety and replaced by the following (second deleted in two places before
Business Day):
     “With respect to any remittance received by Owner on or after the Business
Day following the Business Day on which such payment was due, the Servicer shall
pay to Owner interest on any such late payment at an annual rate equal to the
rate of interest as is publicly announced from time to time at its principal
office by Chase Manhattan Bank, N. A., New York, New York, as its “prime”
lending rate (which is not necessarily its lowest rate) (or if Chase Manhattan
Bank, N.A. shall cease to exist or to announce such rate, then such rate shall
be a reasonably comparable rate determined by Servicer in its reasonable
discretion), adjusted as of the date of each change, plus one (1) percentage
point, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by the Servicer to Owner on the date such late
payment is

 

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made and shall cover the period commencing with the day following such Business
Day and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with such late payment. The
payment by the Servicer of any such interest shall not be deemed an extension of
time for Payment or a waiver of any Event of Default by the Servicer.”
     6. Section 10.01 is revised to add an “or” after 10.01(vi) and then to add
the following:
     “failure on the part of the Servicer to comply with Article XIII after the
cure periods provided in Section 13.07.”
     7. Section 13.03 is revised to add the following after 13.03(d)(ii):
     “(iii) information regarding any Mortgage Loan changes (such as additions,
substitutions, or repurchases), and any material changes in origination,
underwriting or other criteria for acquisitions or selection of the Mortgage
Loans (Item 1121(a)(14) of Regulation AB).”
     8. Section 13.05 is revised to delete the first line of 13.05(iv), so that
13.05(iv) reads:
     “deliver, and cause each Subservicer and Subcontractor as described in
clause (iii) to provide, to the Owner, such Master Servicer and such Depositor
and any other Person that will be responsible for signing the certification (a
“Sarbanes Certification”) required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on
behalf of an asset-backed issuer with respect to a Securitization Transaction a
certification in the form attached hereto as Exhibit D.”
     9. The first paragraph under Section 13.07(b)(ii) is revised to read as
follows (addition is in italics):
     “(ii) Any failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants’ letter when and
as required under Section 13.04 or 13.05, including (except as provided below)
any failure by the Servicer to identify pursuant to Section 13.06(b) any
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, which continues unremedied for ten calendar days
after the date on which such information, report, certification or accountants’
letter was required to be delivered shall constitute an Event of Default with
respect to the Servicer under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Owner, the Master Servicer or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Servicer as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Servicer (and if the
Servicer is servicing any of the Mortgage Loans in a Securitization Transaction,
appoint a successor servicer reasonably acceptable to any Master Servicer for
such Securitization Transaction); provided that to the extent that any provision
of this Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following termination
of the Servicer as servicer, such provision shall be given effect.”

 

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EXHIBIT 1
12A. FORM OF MONTHLY REPORTS
Standard Loan Level File Layout – Master Servicing
Exhibit 1: Layout

                          Column Name   Description   Decimal   Format Comment  
Max Size Each file requires the following fields:                    
 
                       
SER_INVESTOR_NBR
  A value assigned by the Servicer to define a group of loans.           Text up
to 20 digits     20  
 
                       
LOAN_NBR
  A unique identifier assigned to each loan by the investor.           Text up
to 10 digits     10  
 
                       
SERVICER_LOAN_NBR
  A unique number assigned to a loan by the Servicer. This may be different than
the LOAN_NBR.           Text up to 10 digits     10  
 
                       
SCHED_PAY_AMT
  Scheduled monthly principal and scheduled interest payment that a borrower is
expected to pay, P&I constant.     2     No commas(,) or dollar signs ($)     11
 
 
                       
NOTE_INT_RATE
  The loan interest rate as reported by the Servicer.     4     Max length of 6
    6  
 
                       
NET_INT_RATE
  The loan gross interest rate less the service fee rate as reported by the
Servicer.     4     Max length of 6     6  
 
                       
SERV_FEE_RATE
  The servicer’s fee rate for a loan as reported by the Servicer.     4     Max
length of 6     6  
 
                       
SERV_FEE_AMT
  The servicer’s fee amount for a loan as reported by the Servicer.     2     No
commas(,) or dollar signs ($)     11  
 
                       
NEW_PAY_AMT
  The new loan payment amount as reported by the Servicer.     2     No
commas(,) or dollar signs ($)     11  
 
                       
NEW_LOAN_RATE
  The new loan rate as reported by the Servicer.     4     Max length of 6     6
 
 
                       
ARM_INDEX_RATE
  The index the Servicer is using to calculate a forecasted rate.     4     Max
length of 6     6  
 
                       
ACTL_BEG_PRIN_BAL
  The borrower’s actual principal balance at the beginning of the processing
cycle.     2     No commas(,) or dollar signs ($)     11  
 
                       
ACTL_END_PRIN_BAL
  The borrower’s actual principal balance at the end of the processing cycle.  
  2     No commas(,) or dollar signs ($)     11  
 
                       
BORR_NEXT_PAY_DUE_DATE
  The date at the end of processing cycle that the borrower’s next payment is
due to the Servicer, as reported by Servicer.           MM/DD/YYYY     10  
 
                       
SERV_CURT_AMT_1
  The first curtailment amount to be applied.     2     No commas(,) or dollar
signs ($)     11  
 
                       
SERV_CURT_DATE_1
  The curtailment date associated with the first curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ_AMT_1
  The curtailment interest on the first curtailment amount, if applicable.     2
    No commas(,) or dollar signs ($)     11  
 
                       
SERV_CURT_AMT_2
  The second curtailment amount to be applied.     2     No commas(,) or dollar
signs ($)     11  
 
                       
SERV_CURT_DATE_2
  The curtailment date associated with the second curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ_AMT_2
  The curtailment interest on the second curtailment amount, if applicable.    
2     No commas(,) or dollar signs ($)     11  

 

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Exhibit 1: Continued   Standard Loan Level File Layout

                          Column Name   Description   Decimal   Format Comment  
Max Size
SERV_CURT_AMT_3
  The third curtailment amount to be applied.     2     No commas(,) or dollar
signs ($)     11  
 
                       
SERV_CURT_DATE_3
  The curtailment date associated with the third curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ_AMT_3
  The curtailment interest on the third curtailment amount, if applicable.     2
    No commas(,) or dollar signs ($)     11  
 
                       
PIF_AMT
  The loan “paid in full” amount as reported by the Servicer.     2     No
commas(,) or dollar signs ($)     11  
 
                       
PIF_DATE
  The paid in full date as reported by the Servicer.           MM/DD/YYYY     10
 
 
                       
 
              Action Code Key:        
 
              15=Bankruptcy,        
 
              30=Foreclosure, ,        
ACTION_CODE
  The standard FNMA numeric code used to indicate the default/delinquent status
of a particular loan.           60=PIF,
63=Substitution,
65=Repurchase,70=REO     2  
 
                       
INT_ADJ_AMT
  The amount of the interest adjustment as reported by the Servicer.     2    
No commas(,) or dollar signs ($)     11  
 
                       
SOLDIER_SAILOR_ADJ_AMT
  The Soldier and Sailor Adjustment amount, if applicable.     2     No
commas(,) or dollar signs ($)     11  
 
                       
NON_ADV_LOAN_AMT
  The Non Recoverable Loan Amount, if applicable.     2     No commas(,) or
dollar signs ($)     11  
 
                       
LOAN_LOSS_AMT
  The amount the Servicer is passing as a loss, if applicable.     2     No
commas(,) or dollar signs ($)     11  
 
                        Plus the following applicable fields:                  
 
 
                       
SCHED_BEG_PRIN_BAL
  The scheduled outstanding principal amount due at the beginning of the cycle
date to be passed through to investors.     2     No commas(,) or dollar signs
($)     11  
 
                       
SCHED_END_PRIN_BAL
  The scheduled principal balance due to investors at the end of a processing
cycle.     2     No commas(,) or dollar signs ($)     11  
 
                       
SCHED_PRIN_AMT
  The scheduled principal amount as reported by the Servicer for the current
cycle — only applicable for Scheduled/Scheduled Loans.     2     No commas(,) or
dollar signs ($)     11  
 
                       
SCHED_NET_INT
  The scheduled gross interest amount less the service fee amount for the
current cycle as reported by the Servicer — only applicable for
Scheduled/Scheduled Loans.     2     No commas(,) or dollar signs ($)     11  
 
                       
ACTL_PRIN_AMT
  The actual principal amount collected by the Servicer for the current
reporting cycle — only applicable for Actual/Actual Loans.     2     No
commas(,) or dollar signs ($)     11  
 
                       
ACTL_NET_INT
  The actual gross interest amount less the service fee amount for the current
reporting cycle as reported by the Servicer — only applicable for Actual/Actual
Loans.     2     No commas(,) or dollar signs ($)     11  
 
                       
PREPAY_PENALTY_AMT
  The penalty amount received when a borrower prepays on his loan as reported by
the Servicer.     2     No commas(,) or dollar signs ($)     11  
 
                       
PREPAY_PENALTY_WAIVED
  The prepayment penalty amount for the loan waived by the servicer.     2    
No commas(,) or dollar signs ($)     11  

 

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Exhibit 1: Continued   Standard Loan Level File Layout

                          Column Name   Description   Decimal   Format Comment  
Max Size
MOD_DATE
  The Effective Payment Date of the Modification for the loan.          
MM/DD/YYYY     10  
 
                       
MOD_TYPE
  The Modification Type.           Varchar - value can be alpha or numeric    
30  
 
                       
DELINQ_P&I_ADVANCE_AMT
  The current outstanding principal and interest advances made by Servicer.    
2     No commas(,) or dollar signs ($)     11  
 
                       
BREACH_FLAG
  Flag to indicate if the repurchase of a loan is due to a breach of
Representations and Warranties           Y=Breach
N=NO Breach
Let blank if N/A     1  

 

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Exhibit 2: Monthly Summary Report by Single Investor
MONTHLY SUMMARY REPORT

              For Month Ended:      mm/dd/yyyy   Servicer Name    
 
           
Prepared by:
      Investor Nbr    
 
           
 
             

Section 1. Remittances and Ending Balances - Required Data

                                  Beginning   Ending   Total Monthly   Total
Ending Unpaid   Total Monthly Principal Loan Count   Loan Count   Remittance
Amount   Principal Balance   Balance
0
    0     $ 0.00     $ 0.00     $ 0.00  

                  Principal Calculation                
1. Monthly Principal Due
    +     $ 0.00  
 
             
2. Current Curtailments
    +     $ 0.00  
 
             
3. Liquidations
    +     $ 0.00  
 
             
4. Other (attach explanation)
    +     $ 0.00  
 
             
5. Principal Due
          $ 0.00  
 
             
6. Interest (reported “gross”)
    +     $ 0.00  
 
             
7. Interest Adjustments on Curtailments
    +     $ 0.00  
 
             
8. Servicing Fees
    –     $ 0.00  
 
             
9. Other Interest (attach explanation)
    +     $ 0.00  
 
             
10. Interest Due                     (need to subtract ser fee)
          $ 0.00  
 
             
 
               
Remittance Calculation
               
11. Total Principal and Interest Due (lines 5+10)
    +     $ 0.00  
 
             
12. Reimbursement of Non-Recoverable Advances
    –     $ 0.00  
 
             
13. Total Realized gains
    +     $ 0.00  
 
             
14. Total Realized Losses
    –     $ 0.00  
 
             
15. Total Prepayment Penalties
    +     $ 0.00  
 
             
16. Total Non-Supported Compensating Interest
    –     $ 0.00  
 
             
17. Other (attach explanation)
          $ 0.00  
 
             
18. Net Funds Due on or before Remittance Date
    $     $ 0.00  
 
             

Section 2. Delinquency Report — Optional Data for Loan Accounting
Installments Delinquent

                                                          Total No.   Total No.
                          In   Real Estate   Total Dollar of   of   30-   60-  
90 or more   Foreclosure   Owned   Amount of Loans   Delinquencies   Days   Days
  Days   (Optional)   (Optional)   Delinquencies
0
    0       0       0       0       0       0     $ 0.00  

 

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Section 3. REG AB Summary Reporting — REPORT ALL APPLICABLE FIELDS

                  REG AB FIELDS   LOAN COUNT   BALANCE
PREPAYMENT PENALTY AMT
    0     $ 0.00  
PREPAYMENT PENALTY AMT WAIVED
    0     $ 0.00  
DELINQUENCY P&I AMOUNT
    0     $ 0.00  

 

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Exhibit 12B : Standard File Layout – Delinquency Reporting
* The column/header names in bold are the minimum fields Wells Fargo must
receive from every Servicer

                                  Format Column/Header Name   Description  
Decimal   Comment
SERVICER_LOAN_NBR
  A unique number assigned to a loan by the Servicer. This may be different than
the LOAN_NBR            
 
               
LOAN_NBR
  A unique identifier assigned to each loan by the originator.            
 
               
CLIENT_NBR
  Servicer Client Number            
 
               
SERV_INVESTOR_NBR
  Contains a unique number as assigned by an external servicer to identify a
group of loans in            
 
  their system.            
 
               
BORROWER_FIRST_NAME
  First Name of the Borrower.            
 
               
BORROWER_LAST_NAME
  Last name of the borrower.            
 
               
PROP_ADDRESS
  Street Name and Number of Property            
 
               
PROP_STATE
  The state where the property located.            
 
               
PROP_ZIP
  Zip code where the property is located.            
 
               
BORR_NEXT_PAY_DUE_DATE
  The date that the borrower’s next payment is due to the servicer at the end of
processing cycle, as reported by Servicer.           MM/DD/YYYY
 
               
LOAN_TYPE
  Loan Type (i.e. FHA, VA, Conv)            
 
               
BANKRUPTCY_FILED_DATE
  The date a particular bankruptcy claim was filed.           MM/DD/YYYY
 
               
BANKRUPTCY_CHAPTER_CODE
  The chapter under which the bankruptcy was filed.            
 
               
BANKRUPTCY_CASE_NBR
  The case number assigned by the court to the bankruptcy filing.            
 
               
POST_PETITION_DUE_DATE
  The payment due date once the bankruptcy has been approved by the courts      
    MM/DD/YYYY
 
               
BANKRUPTCY_DCHRG_DISM_DATE
  The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged
and/or a Motion For Relief Was Granted.           MM/DD/YYYY
 
               
LOSS_MIT_APPR_DATE
  The Date The Loss Mitigation Was Approved By The Servicer           MM/DD/YYYY
 
               
LOSS_MIT_TYPE
  The Type Of Loss Mitigation Approved For A Loan Such As;            
 
               
LOSS_MIT_EST_COMP_DATE
  The Date The Loss Mitigation /Plan Is Scheduled To End/Close          
MM/DD/YYYY
 
               
LOSS_MIT_ACT_COMP_DATE
  The Date The Loss Mitigation Is Actually Completed           MM/DD/YYYY
 
               
FRCLSR_APPROVED_DATE
  The date DA Admin sends a letter to the servicer with instructions to begin
foreclosure proceedings.           MM/DD/YYYY
 
               
ATTORNEY_REFERRAL_DATE
  Date File Was Referred To Attorney to Pursue Foreclosure           MM/DD/YYYY
 
               
FIRST_LEGAL_DATE
  Notice of 1st legal filed by an Attorney in a Foreclosure Action          
MM/DD/YYYY
 
               
FRCLSR_SALE_EXPECTED_DATE
  The date by which a foreclosure sale is expected to occur.          
MM/DD/YYYY
 
               
FRCLSR_SALE_DATE
  The actual date of the foreclosure sale.           MM/DD/YYYY
 
               
FRCLSR_SALE_AMT
  The amount a property sold for at the foreclosure sale.     2     No commas(,)
or dollar signs ($)
 
               
EVICTION_START_DATE
  The date the servicer initiates eviction of the borrower.           MM/DD/YYYY
 
               
EVICTION_COMPLETED_DATE
  The date the court revokes legal possession of the property from the borrower.
          MM/DD/YYYY
 
               
LIST_PRICE
  The price at which an REO property is marketed.     2     No commas(,) or
 
              dollar signs ($)
 
               
LIST_DATE
  The date an REO property is listed at a particular price.           MM/DD/YYYY
 
               
OFFER_AMT
  The dollar value of an offer for an REO property.     2     No commas(,) or
 
              dollar signs ($)
 
               
OFFER_DATE_TIME
  The date an offer is received by DA Admin or by the Servicer.          
MM/DD/YYYY
 
               
REO_CLOSING_DATE
  The date the REO sale of the property is scheduled to close.          
MM/DD/YYYY
 
               
REO_ACTUAL_CLOSING_DATE
  Actual Date Of REO Sale           MM/DD/YYYY
 
               
OCCUPANT_CODE
  Classification of how the property is occupied.            
 
               
PROP_CONDITION_CODE
  A code that indicates the condition of the property.            

 

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                                  Format Column/Header Name   Description  
Decimal   Comment
PROP_INSPECTION_DATE
  The date a property inspection is performed.           MM/DD/YYYY  
APPRAISAL_DATE
  The date the appraisal was done.           MM/DD/YYYY  
CURR_PROP_VAL
  The current “as is” value of the property based on brokers price opinion or
appraisal.     2      
 
               
REPAIRED_PROP_VAL
  The amount the property would be worth if repairs are completed pursuant to a
broker’s price opinion or appraisal.     2      
 
               
If applicable:
               
 
               
DELINQ_STATUS_CODE
  FNMA Code Describing Status of Loan            
 
               
DELINQ_REASON_CODE
  The circumstances which caused a borrower to stop paying on a loan. Code
indicates the reason why the loan is in default for this cycle.            
 
               
MI_CLAIM_FILED_DATE
  Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.      
    MM/DD/YYYY
 
               
MI_CLAIM_AMT
  Amount of Mortgage Insurance Claim Filed           No commas(,) or dollar
signs ($)
 
               
MI_CLAIM_PAID_DATE
  Date Mortgage Insurance Company Disbursed Claim Payment           MM/DD/YYYY
 
               
MI_CLAIM_AMT_PAID
  Amount Mortgage Insurance Company Paid On Claim     2     No commas(,) or
 
              dollar signs ($)
 
               
POOL_CLAIM_FILED_DATE
  Date Claim Was Filed With Pool Insurance Company           MM/DD/YYYY
 
               
POOL_CLAIM_AMT
  Amount of Claim Filed With Pool Insurance Company     2     No commas(,) or
 
              dollar signs ($)
 
               
POOL_CLAIM_PAID_DATE
  Date Claim Was Settled and The Check Was Issued By The Pool Insurer          
MM/DD/YYYY
 
               
POOL_CLAIM_AMT_PAID
  Amount Paid On Claim By Pool Insurance Company     2     No commas(,) or
 
              dollar signs ($)
 
               
FHA_PART_A_CLAIM_FILED_DATE
  Date FHA Part A Claim Was Filed With HUD           MM/DD/YYYY
 
               
FHA_PART_A_CLAIM_AMT
  Amount of FHA Part A Claim Filed     2     No commas(,) or
 
              dollar signs ($)
 
               
FHA_PART_A_CLAIM_PAID_DATE
  Date HUD Disbursed Part A Claim Payment           MM/DD/YYYY
 
               
FHA_PART_A_CLAIM_PAID_AMT
  Amount HUD Paid on Part A Claim     2     No commas(,) or
 
              dollar signs ($)
 
               
FHA_PART_B_CLAIM_FILED_DATE
  Date FHA Part B Claim Was Filed With HUD           MM/DD/YYYY
 
               
FHA_PART_B_CLAIM_AMT
  Amount of FHA Part B Claim Filed     2     No commas(,) or
 
              dollar signs ($)
 
               
FHA_PART_B_CLAIM_PAID_DATE
  Date HUD Disbursed Part B Claim Payment           MM/DD/YYYY
 
               
FHA_PART_B_CLAIM_PAID_AMT
  Amount HUD Paid on Part B Claim     2     No commas(,) or
 
              dollar signs ($)
 
               
VA_CLAIM_FILED_DATE
  Date VA Claim Was Filed With the Veterans Admin           MM/DD/YYYY
 
               
VA_CLAIM_PAID_DATE
  Date Veterans Admin. Disbursed VA Claim Payment           MM/DD/YYYY
 
               
VA_CLAIM_PAID_AMT
  Amount Veterans Admin. Paid on VA Claim     2     No commas(,) or
 
              dollar signs ($)
 
               
MOTION_FOR_RELIEF_DATE
  The date the Motion for Relief was filed   10   MM/DD/YYYY
 
               
FRCLSR_BID_AMT
  The foreclosure sale bid amount   11   No commas(,) or
 
              dollar signs ($)
 
               
FRCLSR_SALE_TYPE
  The foreclosure sales results: REO, Third Party, Conveyance to HUD/VA        
   
 
               
REO_PROCEEDS
  The net proceeds from the sale of the REO property.           No commas(,) or
 
              dollar signs ($)
 
               
BPO_DATE
  The date the BPO was done.            
 
               
CURRENT_FICO
  The current FICO score            
 
               
HAZARD_CLAIM_FILED_DATE
  The date the Hazard Claim was filed with the Hazard Insurance Company.   10  
MM/DD/YYYY
 
               
HAZARD_CLAIM_AMT
  The amount of the Hazard Insurance Claim filed.   11   No commas(,) or dollar
signs ($)

 

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                                  Format Column/Header Name   Description  
Decimal   Comment
HAZARD_CLAIM_PAID_DATE
  The date the Hazard Insurance Company disbursed the claim payment.   10  
MM/DD/YYYY
 
               
HAZARD_CLAIM_PAID_AMT 
  The amount the Hazard Insurance Company paid on the claim.   11   No commas(,)
or dollar signs ($)
ACTION_CODE
  Indicates loan status           Number
 
               
NOD_DATE
              MM/DD/YYYY
 
               
NOI_DATE
              MM/DD/YYYY
 
               
ACTUAL_PAYMENT_PLAN_START_DATE
              MM/DD/YYYY
 
               
ACTUAL_PAYMENT___PLAN_END_DATE
               
 
               
ACTUAL_REO_START_DATE
              MM/DD/YYYY
 
               
REO_SALES_PRICE
              Number
 
               
REALIZED_LOSS/GAIN
  As defined in the Servicing Agreement           Number

Exhibit 2: Standard File Codes – Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:

         
•
  ASUM-   Approved Assumption
 
       
•
  BAP-   Borrower Assistance Program
 
       
•
  CO-   Charge Off
 
       
•
  DIL-   Deed-in-Lieu
 
       
•
  FFA-   Formal Forbearance Agreement
 
       
•
  MOD-   Loan Modification
 
       
•
  PRE-   Pre-Sale
 
       
•
  SS-   Short Sale
 
       
•
  MISC-   Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Wells
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:

  •   Mortgagor     •   Tenant     •   Unknown     •   Vacant

The Property Condition field should show the last reported condition of the
property as follows:

  •   Damaged     •   Excellent     •   Fair     •   Gone     •   Good     •  
Poor     •   Special Hazard     •   Unknown

 

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Exhibit 2: Standard File Codes – Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:

      Delinquency Code   Delinquency Description
001
  FNMA-Death of principal mortgagor
 
   
002
  FNMA-Illness of principal mortgagor
 
   
003
  FNMA-Illness of mortgagor’s family member
 
   
004
  FNMA-Death of mortgagor’s family member
 
   
005
  FNMA-Marital difficulties
 
   
006
  FNMA-Curtailment of income
 
   
007
  FNMA-Excessive Obligation
 
   
008
  FNMA-Abandonment of property
 
   
009
  FNMA-Distant employee transfer
 
   
011
  FNMA-Property problem
 
   
012
  FNMA-Inability to sell property
 
   
013
  FNMA-Inability to rent property
 
   
014
  FNMA-Military Service
 
   
015
  FNMA-Other
 
   
016
  FNMA-Unemployment
 
   
017
  FNMA-Business failure
 
   
019
  FNMA-Casualty loss
 
   
022
  FNMA-Energy environment costs
 
   
023
  FNMA-Servicing problems
 
   
026
  FNMA-Payment adjustment
 
   
027
  FNMA-Payment dispute
 
   
029
  FNMA-Transfer of ownership pending
 
   
030
  FNMA-Fraud
 
   
031
  FNMA-Unable to contact borrower
 
   
INC
  FNMA-Incarceration

 

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Exhibit 2: Standard File Codes – Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:

      Status Code   Status Description
09
  Forbearance
 
   
17
  Pre-foreclosure Sale Closing Plan Accepted
 
   
24
  Government Seizure
 
   
26
  Refinance
 
   
27
  Assumption
 
   
28
  Modification
 
   
29
  Charge-Off
 
   
30
  Third Party Sale
 
   
31
  Probate
 
   
32
  Military Indulgence
 
   
43
  Foreclosure Started
 
   
44
  Deed-in-Lieu Started
 
   
49
  Assignment Completed
 
   
61
  Second Lien Considerations
 
   
62
  Veteran’s Affairs-No Bid
 
   
63
  Veteran’s Affairs-Refund
 
   
64
  Veteran’s Affairs-Buydown
 
   
65
  Chapter 7 Bankruptcy
 
   
66
  Chapter 11 Bankruptcy
 
   
67
  Chapter 13 Bankruptcy

 

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Exhibit 12C: Calculation of Realized Loss/Gain Form 332– Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all
credits as separate line items. Claim packages are due on the remittance report
date. Late submissions may result in claims not being passed until the following
month. The Servicer is responsible to remit all funds pending loss approval and
/or resolution of any disputed items.
     (ii)                                                             
     (iii)                                                            The
numbers on the 332 form correspond with the numbers listed below.
     Liquidation and Acquisition Expenses:

  1.   The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.     2.  
The Total Interest Due less the aggregate amount of servicing fee that would
have been earned if all delinquent payments had been made as agreed. For
documentation, an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.     3.  
Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis. For documentation, an
Amortization Schedule from date of default through liquidation breaking out the
net interest and servicing fees advanced is required.     4-12. Complete as
applicable. Required documentation:

  *   For taxes and insurance advances – see page 2 of 332 form — breakdown
required showing period         of coverage, base tax, interest, penalty.
Advances prior to default require evidence of servicer efforts to recover
advances.     *   For escrow advances — complete payment history         (to
calculate advances from last positive escrow balance forward)     *   Other
expenses — copies of corporate advance history showing all payments     *   REO
repairs > $1500 require explanation     *   REO repairs >$3000 require evidence
of at least 2 bids.     *   Short Sale or Charge Off require P&L supporting the
decision and WFB’s approved Officer Certificate     *   Unusual or extraordinary
items may require further documentation.

  13.   The total of lines 1 through 12.     (iv)   Credits:     14-21. Complete
as applicable. Required documentation:

  *   Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid instructions
and Escrow Agent / Attorney         Letter of Proceeds Breakdown.     *   Copy
of EOB for any MI or gov’t guarantee     *   All other credits need to be
clearly defined on the 332 form

  22.   The total of lines 14 through 21.

      Please Note:   For HUD/VA loans, use line (18a) for Part A/Initial
proceeds and line (18b) for Part B/Supplemental proceeds.

 

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     Total Realized Loss (or Amount of Any Gain)

  23.   The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).

 

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Exhibit 3A: Calculation of Realized Loss/Gain Form 332

                 
Prepared by:
      Date:        
 
               
Phone:
      Email Address:        
 
               

         
Servicer Loan No.
 
Servicer Name
 
Servicer Address

     WELLS FARGO BANK, N.A. Loan No.                                        
     Borrower’s Name:
                                                            
     Property Address:
                                                            
     Liquidation Type: REO Sale                     3rd Party Sale
                     Short Sale                       Charge Off
     Was this loan granted a Bankruptcy deficiency or cramdown
                    Yes                      No
     If “Yes”, provide deficiency or cramdown amount
                                        

                 
Liquidation and Acquisition Expenses:
               
(1)Actual Unpaid Principal Balance of Mortgage Loan
  $                                          (1)        
(2)Interest accrued at Net Rate
                                             (2)        
(3)Accrued Servicing Fees
                                             (3)        
(4)Attorney’s Fees
                                             (4)        
(5)Taxes (see page 2)
                                             (5)        
(6)Property Maintenance
                                             (6)        
(7)MI/Hazard Insurance Premiums (see page 2)
                                             (7)        
(8)Utility Expenses
                                             (8)        
(9)Appraisal/BPO
                                             (9)        
(10) Property Inspections
                                             (10)        
(11) FC Costs/Other Legal Expenses
                                             (11)        
(12) Other (itemize)
                                             (12)        
Cash for Keys                                         
                                             (12)        
HOA/Condo Fees                                        
                                             (12)        
                                                                     
           
               
 
                                             (12)        
 
               
Total Expenses
  $                                          (13)        
Credits:
               
(14) Escrow Balance
  $                                          (14)        
(15) HIP Refund
                                             (15)        
(16) Rental Receipts
                                             (16)        
(17) Hazard Loss Proceeds
                                             (17)        
(18) Primary Mortgage Insurance / Gov’t Insurance
                                             (18a)   HUD Part A
 
                                             (18b)   HUD Part B  

 

--------------------------------------------------------------------------------

 

                 
(19)Pool Insurance Proceeds
                                             (19)        
(20)Proceeds from Sale of Acquired Property
                                             (20)        
(21)Other (itemize)
                                             (21)        
 
               
                                                                     
           
                                             (21)        
 
               
Total Credits
  $                                          (22)        
Total Realized Loss (or Amount of Gain)
  $                                          (23)        

 

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Escrow Disbursement Detail

                          Type                         (Tax /Ins.)   Date Paid  
Period of Coverage   Total Paid   Base Amount   Penalties   Interest
 
                       
 
                       
 
                       

 

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MORGAN – SEQUOIA TO TRUSTEE
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
For
Master Servicing Agreement
     THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated as of May 25,
2007 (“Assignment No. II”), is entered into among Sequoia Residential Funding,
Inc. (the “Assignor”), Morgan Stanley Credit Corporation (formerly Morgan
Stanley Dean Witter Credit Corporation), as the servicer (the “Servicer”), and
HSBC Bank USA, National Association (“HSBC Bank”) as Trustee under a Pooling and
Servicing Agreement dated as of May 1, 2007 (the “Pooling and Servicing
Agreement”), among the Assignor, as Depositor, HSBC Bank (in such Trustee
capacity, the “Assignee”) and Wells Fargo Bank, N. A., as Master Servicer and
Securities Administrator.
RECITALS
     WHEREAS, RWT Holdings, Inc. (“RWT”) and the Servicer have entered into a
certain Master Servicing Agreement, dated as of August 1, 2002 (as amended or
modified to the date hereof, the “2002 Master Servicing Agreement”), and the
Servicer is currently servicing certain mortgage loans (the “Mortgage Loans”)
under the 2002 Master Servicing Agreement; and
     WHEREAS, RWT has previously sold, assigned and transferred all of its
right, title and interest in certain of the Mortgage Loans (the “Specified
Mortgage Loans”) which are listed on the mortgage loan schedule attached as
Exhibit I hereto (the “Specified Mortgage Loan Schedule”) and its rights under
the 2002 Master Servicing Agreement with respect to the Specified Mortgage Loans
to Assignor; and
     WHEREAS, the parties hereto agree that notwithstanding anything to the
contrary in the 2002 Master Servicing Agreement, the Specified Mortgage Loans
are currently being serviced by the Servicer pursuant to the Master Servicing
Agreement, dated as of November 1, 2006, between Assignor and Servicer (the
“Master Servicing Agreement”); and
     WHEREAS, the Assignor has agreed to sell, assign and transfer to Assignee
all of its right, title and interest in the Specified Mortgage Loans and its
rights under the Master Servicing Agreement with respect to the Specified
Mortgage Loans; and
     WHEREAS, the parties hereto have agreed that the Specified Mortgage Loans
shall be subject to the terms of this Assignment No. II.
     NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties agree as follows:

4

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     1. Assignment and Assumption.
          (a) Effective on and as of the date hereof, the Assignor hereby
pledges, assigns and transfers to the Assignee all of its right, title and
interest in the Specified Mortgage Loans and all of its rights (but none of the
Owner’s obligations) provided under the Master Servicing Agreement to the extent
relating to the Specified Mortgage Loans, the Assignee hereby accepts such
assignment from the Assignor, and the Servicer hereby acknowledges such
assignment and assumption.
          (b) Effective on and as of the date hereof, the Assignor represents
and warrants to the Assignee that the Assignor has not taken any action that
would serve to impair or encumber the Assignee’s interest in the Specified
Mortgage Loans since the date of the Assignor’s acquisition of the Specified
Mortgage Loans.
2. Recognition of the Assignee.
From and after the date hereof, the Servicer shall recognize the Assignee as the
holder of the rights and benefits of the Owner with respect to the Specified
Mortgage Loans and the Servicer will service the Specified Mortgage Loans for
the Assignee as if the Assignee and the Servicer had entered into a separate
servicing agreement for the servicing of the Specified Mortgage Loans in the
form of the Master Servicing Agreement (as modified by Appendix A hereto) (the
“Successor MSA”) with the Assignee as the Owner thereunder, which Successor MSA
is incorporated in and made a part of this Assignment No. II. It is the
intention of the parties hereto that the Successor MSA will be treated as a
separate and distinct servicing agreement between the parties hereto to the
extent of the Specified Mortgage Loans and shall be binding upon and for the
benefit of the respective successors and assigns of the parties hereto.
3. Assignor’s Continuing Rights and Responsibilities.
Notwithstanding Sections 1 and 2 above, the parties hereto agree that the
Assignor rather than the Assignee shall have the ongoing rights and
responsibilities of the Owner under the following sections of the Master
Servicing Agreement:

      Section   Matter
 
   
4.01
  (a) Role of the Servicer.
 
   
7.05, 1st ¶ and 2nd ¶
  (b) Owner’s Right to Examine the Servicer Records.
 
   
8.01
  (c) The Servicer Shall Provide Information as Reasonably Required.
 
 

5

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      Section   Matter
 
   
9.01(a) and (b)
  (d) Indemnification; Third-Party Claims.
 
   
9.03
  (e) Limitation on Liability of Servicer and Others.
 
   
12.03
  (f) Assignments.
 
   
12.13(b)
  (g) Non-Solicitation.

In addition, the Servicer agrees to furnish to the Assignor and Master Servicer
copies of reports, notices, statements and other communications required to be
delivered by the Servicer pursuant to any of the sections of the Master
Servicing Agreement referred to above and under the following sections, at the
times therein specified:

      Section    
4.11, 5th and 6th ¶’s
  (a) Title Management and Disposition of REO Property.
 
   
6.02
  (b) Statements to Owner.
 
   
6.03(d)
  (c) Monthly Advances by the Servicer.
 
   
13.04
  (d) Annual Statement as to Compliance
 
   
13.05
  (e) Report on Assessment of Compliance and Attestation

4. Successor MSA.
The Successor MSA includes the Master Servicing Agreement as modified by
Appendix A hereto and is made a part of this Assignment No. II.
5. Representations and Warranties.
     (a) Each of the parties hereto represents and warrants that it is duly and
legally authorized to enter into this Assignment No. II.

6

--------------------------------------------------------------------------------

 

     (b) Each of the parties hereto represents and warrants that this Assignment
No. II has been duly authorized, executed and delivered by it and (assuming due
authorization, execution and delivery thereof by each of the other parties
hereto) constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

7

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     6. Continuing Effect.
     Except as contemplated hereby, the Master Servicing Agreement shall remain
in full force and effect in accordance with its terms.
     7. Governing Law.
This Assignment No. II and the rights and obligations hereunder shall be
governed by and construed in accordance with the internal laws of the State of
Illinois.
     8. Notices.
Any notices or other communications permitted or required under the Master
Servicing Agreement to be made to the Assignor and Assignee shall be made in
accordance with the terms of the Master Servicing Agreement and shall be sent to
the Assignor and Assignee as follows:
Sequoia Residential Funding, Inc.
One Belvedere Place, Suite 330
Mill Valley, CA 94941
HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018
or to such other address as may hereafter be furnished by the Assignor or
Assignee to the other parties in accordance with the provisions of the Master
Servicing Agreement.
     9. Counterparts.
This Assignment No. II may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same instrument.
     10. Definitions.
Any capitalized term used but not defined in this Assignment No. II has the same
meaning as in the Master Servicing Agreement or the Master Mortgage Loan
Purchase Agreement referred to therein.
     11. Master Servicer.
       The Servicer hereby acknowledges that the Assignee has appointed Wells
Fargo Bank, N. A. (the “Master Servicer”) to act as master servicer and
securities administrator under the Pooling and Servicing Agreement and hereby
agrees to treat all inquiries, instructions, authorizations and other
communications from the Master Servicer as if the same had been received from
the Assignee. The Master Servicer, acting on behalf of the Assignee, shall have
the rights of the Assignee as the Owner under the Successor MSA to enforce the
obligations of

8

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the Servicer thereunder. Any notices or other communications permitted or
required under the Master Servicing Agreement to be made to the Assignee shall
be made in accordance with the terms of the Master Servicing Agreement and shall
be sent to the Master Servicer at the following address:
Wells Fargo Bank, N. A.
P.O. Box 98
Columbia, Maryland 21046
(or, for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland
21045)
Attention: Sequoia Mortgage Trust 2007-2
or to such other address as may hereafter be furnished by the Master Servicer to
Servicer. Any such notices or other communications permitted or required under
the Master Servicing Agreement may be delivered in electronic format unless
manual signature is required in which case a hard copy of such report or
communication shall be required.
          The Servicer further acknowledges that the Assignor has engaged the
Master Servicer to provide certain default administration and that the Master
Servicer, acting as agent of the Assignor, may exercise any of the rights of the
Owner retained by the Assignor in Section 3 above.
          The Servicer shall make all distributions under the Successor MSA, as
they relate to the Specified Mortgage Loans, to the Master Servicer by wire
transfer of immediately funds to:
Wells Fargo Bank, NA
San Francisco, CA
ABA# 121-000-248
Acct# 3970771416
Acct Name: SAS Clearing
FFC: 53145300
[remainder of page intentionally left blank]

9

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment No. II the
day and year first above written.
ASSIGNOR:
SEQUOIA RESIDENTIAL FUNDING, INC.
By:
Name:
Title:
ASSIGNEE:
HSBC BANK USA, NATIONAL
ASSOCIATION
By:
Name:
Title:
SERVICER:
MORGAN STANLEY CREDIT CORPORATION
By:
Name:
Title:

10

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EXHIBIT I

 

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APPENDIX A
MASTER SERVICING AGREEMENT
1. The definition of Custodial Account is revised to read as follows:
     “ ‘Custodial Account’: The separate trust account or accounts created and
maintained pursuant to Section 4.04 of this Agreement which shall be entitled
“Morgan Stanley Credit Corporation, in trust for ‘HSBC Bank USA, National
Association, as Trustee, under the Pooling and Servicing Agreement dated as of
May 1, 2007,’ or such other title as is requested by the Owner.”
2. The definition of Escrow Account is revised to read as follows:
“ ‘Escrow Account’: The separate trust account or accounts created and
maintained pursuant to Section 4.06 on which shall be entitled “Morgan Stanley
Credit Corporation, as Servicer, in trust for ‘HSBC Bank USA, National
Association, as Trustee, under the Pooling and Servicing Agreement dated as of
May 1, 2007,’ or such other title as is requested by Owner.”
3. Section 4.18, second sentence is revised to read as follows:
“All such Permitted Investments shall be registered in the name of the Servicer
or its nominee, and held in trust for HSBC Bank USA, National Association, as
Trustee, under the Pooling and Servicing Agreement dated May 1, 2007.”
4. Notwithstanding any provision in the Agreement to the contrary, the Servicer
agrees that it will report to the Master Servicer on a monthly basis on the date
specified therein using the formats attached hereto as Exhibit 1.
5. The third full paragraph of Section 6.01 is hereby deleted in its entirety
and replaced by the following (second deleted in two places before Business
Day):
     “With respect to any remittance received by Owner on or after the Business
Day following the Business Day on which such payment was due, the Servicer shall
pay to Owner interest on any such late payment at an annual rate equal to the
rate of interest as is publicly announced from time to time at its principal
office by Chase Manhattan Bank, N. A., New York, New York, as its “prime”
lending rate (which is not necessarily its lowest rate) (or if Chase Manhattan
Bank, N.A. shall cease to exist or to announce such rate, then such rate shall
be a reasonably comparable rate determined by Servicer in its reasonable
discretion), adjusted as of the date of each change, plus one (1) percentage
point, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be paid by the Servicer to Owner on the date such late
payment is

 

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made and shall cover the period commencing with the day following such Business
Day and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with such late payment. The
payment by the Servicer of any such interest shall not be deemed an extension of
time for Payment or a waiver of any Event of Default by the Servicer.”
     6. Section 10.01 is revised to add an “or” after 10.01(vi) and then to add
the following:
     “failure on the part of the Servicer to comply with Article XIII after the
cure periods provided in Section 13.07.”
     8. Section 13.03 is revised to add the following after 13.03(d)(ii):
     “(iii) information regarding any Mortgage Loan changes (such as additions,
substitutions, or repurchases), and any material changes in origination,
underwriting or other criteria for acquisitions or selection of the Mortgage
Loans (Item 1121(a)(14) of Regulation AB).”
     8. Section 13.05 is revised to delete the first line of 13.05(iv), so that
13.05(iv) reads:
     “deliver, and cause each Subservicer and Subcontractor as described in
clause (iii) to provide, to the Owner, such Master Servicer and such Depositor
and any other Person that will be responsible for signing the certification (a
“Sarbanes Certification”) required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on
behalf of an asset-backed issuer with respect to a Securitization Transaction a
certification in the form attached hereto as Exhibit D.”
     9. The first paragraph under Section 13.07(b)(ii) is revised to read as
follows (addition is in italics):
     “(ii) Any failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants’ letter when and
as required under Section 13.04 or 13.05, including (except as provided below)
any failure by the Servicer to identify pursuant to Section 13.06(b) any
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, which continues unremedied for ten calendar days
after the date on which such information, report, certification or accountants’
letter was required to be delivered shall constitute an Event of Default with
respect to the Servicer under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Owner, the Master Servicer or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Servicer as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Servicer (and if the
Servicer is servicing any of the Mortgage Loans in a Securitization Transaction,
appoint a successor servicer reasonably acceptable to any Master Servicer for
such Securitization Transaction); provided that to the extent that any provision
of this Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following termination
of the Servicer as servicer, such provision shall be given effect.”

 

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EXHIBIT 1
12A. FORM OF MONTHLY REPORTS

                              Standard Loan Level File Layout –                
    Master Servicing                 Exhibit 1: Layout                          
              Max Column Name   Description   Decimal   Format Comment   Size
Each file requires the following fields:                    
SER_INVESTOR_NBR
  A value assigned by the Servicer to define a group of loans.           Text up
to 20 digits     20  
 
                       
LOAN_NBR
  A unique identifier assigned to each loan by the investor.           Text up
to 10 digits     10  
 
                       
SERVICER_LOAN_NBR
  A unique number assigned to a loan by the Servicer. This may be different than
the LOAN_NBR.           Text up to 10 digits     10  
 
                       
SCHED_PAY_AMT
  Scheduled monthly principal and scheduled interest payment that a borrower is
expected to pay, P&I constant.     2     No commas(,) or dollar signs ($)     11
 
 
                       
NOTE_INT_RATE
  The loan interest rate as reported by the Servicer.     4     Max length of 6
    6  
 
                       
NET_INT_RATE
  The loan gross interest rate less the service fee rate as reported by the
Servicer.     4     Max length of 6     6  
 
                       
SERV_FEE_RATE
  The servicer’s fee rate for a loan as reported by the Servicer.     4     Max
length of 6     6  
 
                       
SERV_FEE_AMT
  The servicer’s fee amount for a loan as reported by the Servicer.     2     No
commas(,) or dollar signs ($)     11  
 
                       
NEW_PAY_AMT
  The new loan payment amount as reported by the Servicer.     2     No
commas(,) or dollar signs ($)     11  
 
                       
NEW_LOAN_RATE
  The new loan rate as reported by the Servicer.     4     Max length of 6     6
 
 
                       
ARM_INDEX_RATE
  The index the Servicer is using to calculate a forecasted rate.     4     Max
length of 6     6  
 
                       
ACTL_BEG_PRIN_BAL
  The borrower’s actual principal balance at the beginning of the processing
cycle.     2     No commas(,) or dollar signs ($)     11  
 
                       
ACTL_END_PRIN_BAL
  The borrower’s actual principal balance at the end of the processing cycle.  
  2     No commas(,) or dollar signs ($)     11  
 
                       
BORR_NEXT_PAY_DUE_DATE
  The date at the end of processing cycle that the borrower’s next payment is
due to the Servicer, as reported by Servicer.           MM/DD/YYYY     10  
 
                       
SERV_CURT_AMT_1
  The first curtailment amount to be applied.     2     No commas(,) or dollar
signs ($)     11  
 
                       
SERV_CURT_DATE_1
  The curtailment date associated with the first curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ___AMT_1
  The curtailment interest on the first curtailment amount, if applicable.     2
    No commas(,) or dollar signs ($)     11  
 
                       
SERV_CURT_AMT_2
  The second curtailment amount to be applied.     2     No commas(,) or dollar
signs ($)     11  
 
                       
SERV_CURT_DATE_2
  The curtailment date associated with the second curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ___AMT_2
  The curtailment interest on the second curtailment amount, if applicable.    
2     No commas(,) or dollar signs ($)     11  

 

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                          Exhibit 1: Continued   Standard Loan Level File Layout
                                    Max Column Name   Description   Decimal  
Format Comment   Size
SERV_CURT_AMT_3
  The third curtailment amount to be applied.     2     No commas(,) or dollar
signs ($)     11  
 
                       
SERV_CURT_DATE_3
  The curtailment date associated with the third curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ_AMT_3
  The curtailment interest on the third curtailment amount, if applicable.     2
    No commas(,) or dollar signs ($)     11  
 
                       
PIF_AMT
  The loan “paid in full” amount as reported by the Servicer.     2     No
commas(,) or dollar signs ($)     11  
 
                       
PIF_DATE
  The paid in full date as reported by the Servicer.           MM/DD/YYYY     10
 
 
                       
 
              Action Code Key:        
ACTION_CODE
  The standard FNMA numeric code used to indicate the default/delinquent status
of a particular loan.           15=Bankruptcy,
30=Foreclosure, ,
60=PIF,
63=Substitution,
65=Repurchase,70=REO     2  
 
                       
INT_ADJ_AMT
  The amount of the interest adjustment as reported by the Servicer.     2    
No commas(,) or dollar signs ($)     11  
 
                       
SOLDIER_SAILOR_ADJ_AMT
  The Soldier and Sailor Adjustment amount, if applicable.     2     No
commas(,) or dollar signs ($)     11  
 
                       
NON_ADV_LOAN_AMT
  The Non Recoverable Loan Amount, if applicable.     2     No commas(,) or
dollar signs ($)     11  
 
                       
LOAN_LOSS_AMT
  The amount the Servicer is passing as a loss, if applicable.     2     No
commas(,) or dollar signs ($)     11  
 
                        Plus the following applicable fields:                  
 
 
                       
SCHED_BEG_PRIN_BAL
  The scheduled outstanding principal amount due at the beginning of the cycle
date to be passed through to investors.     2     No commas(,) or dollar signs
($)     11  
 
                       
SCHED_END_PRIN_BAL
  The scheduled principal balance due to investors at the end of a processing
cycle.     2     No commas(,) or dollar signs ($)     11  
 
                       
SCHED_PRIN_AMT
  The scheduled principal amount as reported by the Servicer for the current
cycle — only applicable for Scheduled/Scheduled Loans.     2     No commas(,) or
dollar signs ($)     11  
 
                       
SCHED_NET_INT
  The scheduled gross interest amount less the service fee amount for the
current cycle as reported by the Servicer — only applicable for
Scheduled/Scheduled Loans.     2     No commas(,) or dollar signs ($)     11  
 
                       
ACTL_PRIN_AMT
  The actual principal amount collected by the Servicer for the current
reporting cycle — only applicable for Actual/Actual Loans.     2     No
commas(,) or dollar signs ($)     11  
 
                       
ACTL_NET_INT
  The actual gross interest amount less the service fee amount for the current
reporting cycle as reported by the Servicer — only applicable for Actual/Actual
Loans.     2     No commas(,) or dollar signs ($)     11  
 
                       
PREPAY_PENALTY___AMT
  The penalty amount received when a borrower prepays on his loan as reported by
the Servicer.     2     No commas(,) or dollar signs ($)     11  
 
                       
PREPAY_PENALTY___WAIVED
  The prepayment penalty amount for the loan waived by the servicer.     2    
No commas(,) or dollar signs ($)     11  

 

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                          Exhibit 1: Continued   Standard Loan Level File Layout
                                    Max Column Name   Description   Decimal  
Format Comment   Size
MOD_DATE
  The Effective Payment Date of the Modification for the loan.          
MM/DD/YYYY     10  
 
                       
MOD_TYPE
  The Modification Type.           Varchar — value can be alpha or numeric    
30  
 
                       
DELINQ_P&I_ADVANCE_AMT
  The current outstanding principal and interest advances made by Servicer.    
2     No commas(,) or dollar signs ($)     11  
 
                       
BREACH_FLAG
  Flag to indicate if the repurchase of a loan is due to a breach of
Representations and Warranties           Y=Breach
N=NO Breach
Let blank if N/A     1  

 

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Exhibit 2: Monthly Summary Report by Single Investor
MONTHLY SUMMARY REPORT

              For Month Ended:   mm/dd/yyyy   Servicer Name    
 
           
Prepared by:
      Investor Nbr    
 
           

Section 1. Remittances and Ending Balances — Required Data

                                  Beginning   Ending   Total Monthly   Total
Ending Unpaid   Total Monthly Principal Loan Count   Loan Count   Remittance
Amount   Principal Balance   Balance
0
    0     $ 0.00     $ 0.00     $ 0.00  

                 
Principal Calculation
               
1. Monthly Principal Due
    +     $ 0.00  
 
             
2. Current Curtailments
    +     $ 0.00  
 
             
3. Liquidations
    +     $ 0.00  
 
             
4. Other (attach explanation)
    +     $ 0.00  
 
             
5. Principal Due
          $ 0.00  
 
             
6. Interest (reported “gross”)
    +     $ 0.00  
 
             
7. Interest Adjustments on Curtailments
    +     $ 0.00  
 
             
8. Servicing Fees
    —     $ 0.00  
 
             
9. Other Interest (attach explanation)
    +     $ 0.00  
 
             
10. Interest Due (need to subtract ser fee)
          $ 0.00  
 
             
Remittance Calculation
               
11. Total Principal and Interest Due (lines 5+10)
    +     $ 0.00  
 
             
12. Reimbursement of Non-Recoverable Advances
    —     $ 0.00  
 
             
13. Total Realized gains
    +     $ 0.00  
 
             
14. Total Realized Losses
    —     $ 0.00  
 
             
15. Total Prepayment Penalties
    +     $ 0.00  
 
             
16. Total Non-Supported Compensating Interest
    —     $ 0.00  
 
             
17. Other (attach explanation)
          $ 0.00  
 
             
18. Net Funds Due on or before Remittance Date
  $       $ 0.00  
 
             

Section 2. Delinquency Report — Optional Data for Loan Accounting
Installments Delinquent

                                                          Total No.   Total No.
                          In   Real Estate   Total Dollar of   of   30-   60-  
90 or more   Foreclosure   Owned   Amount of Loans   Delinquencies   Days   Days
  Days   (Optional)   (Optional)   Delinquencies
0
    0       0       0       0       0       0     $ 0.00  

 

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Section 3. REG AB Summary Reporting — REPORT ALL APPLICABLE FIELDS

                  REG AB FIELDS   LOAN COUNT   BALANCE
PREPAYMENT PENALTY AMT
    0     $ 0.00  
PREPAYMENT PENALTY AMT WAIVED
    0     $ 0.00  
DELINQUENCY P&I AMOUNT
    0     $ 0.00  

 

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Exhibit 12B : Standard File Layout – Delinquency Reporting
 

*   The column/header names in bold are the minimum fields Wells Fargo must
receive from every Servicer

                                  Format Column/Header Name   Description  
Decimal   Comment
SERVICER_LOAN_NBR
  A unique number assigned to a loan by the Servicer. This may be different than
the LOAN_NBR            
 
               
LOAN_NBR
  A unique identifier assigned to each loan by the originator.            
 
               
CLIENT_NBR
  Servicer Client Number            
 
               
SERV_INVESTOR_NBR
  Contains a unique number as assigned by an external servicer to identify a
group of loans in their system.            
 
               
BORROWER_FIRST_NAME
  First Name of the Borrower.            
 
               
BORROWER_LAST_NAME
  Last name of the borrower.            
 
               
PROP_ADDRESS
  Street Name and Number of Property            
 
               
PROP_STATE
  The state where the property located.            
 
               
PROP_ZIP
  Zip code where the property is located.            
 
               
BORR_NEXT_PAY_DUE_DATE
  The date that the borrower’s next payment is due to the servicer at the end of
processing cycle, as reported by Servicer.           MM/DD/YYYY
 
               
LOAN_TYPE
  Loan Type (i.e. FHA, VA, Conv)            
 
               
BANKRUPTCY_FILED_DATE
  The date a particular bankruptcy claim was filed.           MM/DD/YYYY
 
               
BANKRUPTCY_CHAPTER_CODE
  The chapter under which the bankruptcy was filed.            
 
               
BANKRUPTCY_CASE_NBR
  The case number assigned by the court to the bankruptcy filing.            
 
               
POST_PETITION_DUE_DATE
  The payment due date once the bankruptcy has been approved by the courts      
    MM/DD/YYYY
 
               
BANKRUPTCY_DCHRG_DISM_DATE
  The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged
and/or a Motion For Relief Was Granted.           MM/DD/YYYY
 
               
LOSS_MIT_APPR_DATE
  The Date The Loss Mitigation Was Approved By The Servicer           MM/DD/YYYY
 
               
LOSS_MIT_TYPE
  The Type Of Loss Mitigation Approved For A Loan Such As;            
 
               
LOSS_MIT_EST_COMP_DATE
  The Date The Loss Mitigation /Plan Is Scheduled To End/Close          
MM/DD/YYYY
 
               
LOSS_MIT_ACT_COMP_DATE
  The Date The Loss Mitigation Is Actually Completed           MM/DD/YYYY
 
               
FRCLSR_APPROVED_DATE
  The date DA Admin sends a letter to the servicer with instructions to begin
foreclosure proceedings.           MM/DD/YYYY
 
               
ATTORNEY_REFERRAL_DATE
  Date File Was Referred To Attorney to Pursue Foreclosure           MM/DD/YYYY
 
               
FIRST_LEGAL_DATE
  Notice of 1st legal filed by an Attorney in a Foreclosure Action          
MM/DD/YYYY
 
               
FRCLSR_SALE_EXPECTED_DATE
  The date by which a foreclosure sale is expected to occur.          
MM/DD/YYYY
 
               
FRCLSR_SALE_DATE
  The actual date of the foreclosure sale.           MM/DD/YYYY
 
               
FRCLSR_SALE_AMT
  The amount a property sold for at the foreclosure sale.     2     No commas(,)
or dollar signs ($)
 
               
EVICTION_START_DATE
  The date the servicer initiates eviction of the borrower.           MM/DD/YYYY
 
               
EVICTION_COMPLETED_DATE
  The date the court revokes legal possession of the property from the borrower.
          MM/DD/YYYY
 
               
LIST_PRICE
  The price at which an REO property is marketed.     2     No commas(,) or
dollar signs ($)
 
               
LIST_DATE
  The date an REO property is listed at a particular price.           MM/DD/YYYY
 
               
OFFER_AMT
  The dollar value of an offer for an REO property.     2     No commas(,) or
dollar signs ($)
 
               
OFFER_DATE_TIME
  The date an offer is received by DA Admin or by the Servicer.          
MM/DD/YYYY
 
               
REO_CLOSING_DATE
  The date the REO sale of the property is scheduled to close.          
MM/DD/YYYY
 
               
REO_ACTUAL_CLOSING_DATE
  Actual Date Of REO Sale           MM/DD/YYYY
 
               
OCCUPANT_CODE
  Classification of how the property is occupied.            
 
               
PROP_CONDITION_CODE
  A code that indicates the condition of the property.            

 

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                                  Format Column/Header Name   Description  
Decimal   Comment
PROP_INSPECTION_DATE
  The date a property inspection is performed.           MM/DD/YYYY
 
               
APPRAISAL_DATE
  The date the appraisal was done.           MM/DD/YYYY
 
               
CURR_PROP_VAL
  The current “as is” value of the property based on brokers price opinion or
appraisal.     2      
 
               
REPAIRED_PROP_VAL
  The amount the property would be worth if repairs are completed pursuant to a
broker’s price opinion or appraisal.     2      
 
               
If applicable:
               
 
               
DELINQ_STATUS_CODE
  FNMA Code Describing Status of Loan            
 
               
DELINQ_REASON_CODE
  The circumstances which caused a borrower to stop paying on a loan. Code
indicates the reason why the loan is in default for this cycle.            
 
               
MI_CLAIM_FILED_DATE
  Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.      
    MM/DD/YYYY
 
               
MI_CLAIM_AMT
  Amount of Mortgage Insurance Claim Filed           No commas(,) or dollar
signs ($)
 
               
MI_CLAIM_PAID_DATE
  Date Mortgage Insurance Company Disbursed Claim Payment           MM/DD/YYYY
 
               
MI_CLAIM_AMT_PAID
  Amount Mortgage Insurance Company Paid On Claim     2     No commas(,) or
dollar signs ($)
 
               
POOL_CLAIM_FILED_DATE
  Date Claim Was Filed With Pool Insurance Company           MM/DD/YYYY
 
               
POOL_CLAIM_AMT
  Amount of Claim Filed With Pool Insurance Company     2     No commas(,) or
dollar signs ($)
 
               
POOL_CLAIM_PAID_DATE
  Date Claim Was Settled and The Check Was Issued By The Pool Insurer          
MM/DD/YYYY
 
               
POOL_CLAIM_AMT_PAID
  Amount Paid On Claim By Pool Insurance Company     2     No commas(,) or
dollar signs ($)
 
               
FHA_PART_A_CLAIM_FILED_DATE
  Date FHA Part A Claim Was Filed With HUD           MM/DD/YYYY
 
               
FHA_PART_A_CLAIM_AMT
  Amount of FHA Part A Claim Filed     2     No commas(,) or dollar signs ($)
 
               
FHA_PART_A_CLAIM_PAID_DATE
  Date HUD Disbursed Part A Claim Payment           MM/DD/YYYY
 
               
FHA_PART_A_CLAIM_PAID_AMT
  Amount HUD Paid on Part A Claim     2     No commas(,) or dollar signs ($)
 
               
FHA_PART_B_CLAIM_FILED_DATE
  Date FHA Part B Claim Was Filed With HUD           MM/DD/YYYY
 
               
FHA_PART_B_CLAIM_AMT
  Amount of FHA Part B Claim Filed     2     No commas(,) or dollar signs ($)
 
               
FHA_PART_B_CLAIM_PAID_DATE
  Date HUD Disbursed Part B Claim Payment           MM/DD/YYYY
 
               
FHA_PART_B_CLAIM_PAID_AMT
  Amount HUD Paid on Part B Claim     2     No commas(,) or dollar signs ($)
 
               
VA_CLAIM_FILED_DATE
  Date VA Claim Was Filed With the Veterans Admin           MM/DD/YYYY
 
               
VA_CLAIM_PAID_DATE
  Date Veterans Admin. Disbursed VA Claim Payment           MM/DD/YYYY
 
               
VA_CLAIM_PAID_AMT
  Amount Veterans Admin. Paid on VA Claim     2     No commas(,) or dollar signs
($)
 
               
MOTION_FOR_RELIEF_DATE
  The date the Motion for Relief was filed     10     MM/DD/YYYY
 
               
FRCLSR_BID_AMT
  The foreclosure sale bid amount     11     No commas(,) or dollar signs ($)
 
               
FRCLSR_SALE_TYPE
  The foreclosure sales results: REO, Third Party, Conveyance to HUD/VA        
   
 
               
REO_PROCEEDS
  The net proceeds from the sale of the REO property.           No commas(,) or
dollar signs ($)
 
               
BPO_DATE
  The date the BPO was done.            
 
               
CURRENT_FICO
  The current FICO score            
 
               
HAZARD_CLAIM_FILED_DATE
  The date the Hazard Claim was filed with the Hazard Insurance Company.     10
    MM/DD/YYYY
 
               
HAZARD_CLAIM_AMT
  The amount of the Hazard Insurance Claim filed.     11     No commas(,) or
dollar signs ($)

 

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                                  Format Column/Header Name   Description  
Decimal   Comment
HAZARD_CLAIM_PAID_DATE
  The date the Hazard Insurance Company disbursed the claim payment.     10    
MM/DD/YYYY
 
               
HAZARD_CLAIM_PAID_AMT
  The amount the Hazard Insurance Company paid on the claim.     11     No
commas(,) or dollar signs ($)
 
               
ACTION_CODE
  Indicates loan status           Number
 
               
NOD_DATE
              MM/DD/YYYY
 
               
NOI_DATE
              MM/DD/YYYY
 
               
ACTUAL_PAYMENT_PLAN_START_DATE
              MM/DD/YYYY
 
               
ACTUAL_PAYMENT___PLAN_END_DATE
               
 
               
ACTUAL_REO_START_DATE
              MM/DD/YYYY
 
               
REO_SALES_PRICE
              Number
 
               
REALIZED_LOSS/GAIN
  As defined in the Servicing Agreement           Number

Exhibit 2: Standard File Codes – Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:

             
 
  •   ASUM-   Approved Assumption
 
           
 
  •   BAP-   Borrower Assistance Program
 
           
 
  •   CO-   Charge Off
 
           
 
  •   DIL-   Deed-in-Lieu
 
           
 
  •   FFA-   Formal Forbearance Agreement
 
           
 
  •   MOD-   Loan Modification
 
           
 
  •   PRE-   Pre-Sale
 
           
 
  •   SS-   Short Sale
 
           
 
  •   MISC-   Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Wells
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:

  •   Mortgagor     •   Tenant     •   Unknown     •   Vacant

The Property Condition field should show the last reported condition of the
property as follows:

  •   Damaged     •   Excellent     •   Fair     •   Gone     •   Good     •  
Poor     •   Special Hazard     •   Unknown

 

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Exhibit 2: Standard File Codes – Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:

      Delinquency     Code   Delinquency Description
001
  FNMA-Death of principal mortgagor
 
   
002
  FNMA-Illness of principal mortgagor
 
   
003
  FNMA-Illness of mortgagor’s family member
 
   
004
  FNMA-Death of mortgagor’s family member
 
   
005
  FNMA-Marital difficulties
 
   
006
  FNMA-Curtailment of income
 
   
007
  FNMA-Excessive Obligation
 
   
008
  FNMA-Abandonment of property
 
   
009
  FNMA-Distant employee transfer
 
   
011
  FNMA-Property problem
 
   
012
  FNMA-Inability to sell property
 
   
013
  FNMA-Inability to rent property
 
   
014
  FNMA-Military Service
 
   
015
  FNMA-Other
 
   
016
  FNMA-Unemployment
 
   
017
  FNMA-Business failure
 
   
019
  FNMA-Casualty loss
 
   
022
  FNMA-Energy environment costs
 
   
023
  FNMA-Servicing problems
 
   
026
  FNMA-Payment adjustment
 
   
027
  FNMA-Payment dispute
 
   
029
  FNMA-Transfer of ownership pending
 
   
030
  FNMA-Fraud
 
   
031
  FNMA-Unable to contact borrower
 
   
INC
  FNMA-Incarceration

 

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Exhibit 2: Standard File Codes – Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:

          Status Code   Status Description   09    
Forbearance
       
 
  17    
Pre-foreclosure Sale Closing Plan Accepted
       
 
  24    
Government Seizure
       
 
  26    
Refinance
       
 
  27    
Assumption
       
 
  28    
Modification
       
 
  29    
Charge-Off
       
 
  30    
Third Party Sale
       
 
  31    
Probate
       
 
  32    
Military Indulgence
       
 
  43    
Foreclosure Started
       
 
  44    
Deed-in-Lieu Started
       
 
  49    
Assignment Completed
       
 
  61    
Second Lien Considerations
       
 
  62    
Veteran’s Affairs-No Bid
       
 
  63    
Veteran’s Affairs-Refund
       
 
  64    
Veteran’s Affairs-Buydown
       
 
  65    
Chapter 7 Bankruptcy
       
 
  66    
Chapter 11 Bankruptcy
       
 
  67    
Chapter 13 Bankruptcy

 

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Exhibit 12C: Calculation of Realized Loss/Gain Form 332– Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all
credits as separate line items. Claim packages are due on the remittance report
date. Late submissions may result in claims not being passed until the following
month. The Servicer is responsible to remit all funds pending loss approval and
/or resolution of any disputed items.
     (v)
     (vi) The numbers on the 332 form correspond with the numbers listed below.
     Liquidation and Acquisition Expenses:

  1.   The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.     2.  
The Total Interest Due less the aggregate amount of servicing fee that would
have been earned if all delinquent payments had been made as agreed. For
documentation, an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.     3.  
Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis. For documentation, an
Amortization Schedule from date of default through liquidation breaking out the
net interest and servicing fees advanced is required.         4-12. Complete as
applicable. Required documentation:

  *   For taxes and insurance advances – see page 2 of 332 form — breakdown
required showing period of coverage, base tax, interest, penalty. Advances prior
to default require evidence of servicer efforts to recover advances.     *   For
escrow advances — complete payment history
(to calculate advances from last positive escrow balance forward)     *   Other
expenses — copies of corporate advance history showing all payments     *   REO
repairs > $1500 require explanation     *   REO repairs >$3000 require evidence
of at least 2 bids.     *   Short Sale or Charge Off require P&L supporting the
decision and WFB’s approved Officer Certificate     *   Unusual or extraordinary
items may require further documentation.

  13.   The total of lines 1 through 12.     (vii)   Credits:     14-21.  
Complete as applicable. Required documentation:

  *   Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid instructions
and Escrow Agent / Attorney Letter of Proceeds Breakdown.     *   Copy of EOB
for any MI or gov’t guarantee     *   All other credits need to be clearly
defined on the 332 form

  22.   The total of lines 14 through 21.

     Please Note:   For HUD/VA loans, use line (18a) for Part A/Initial proceeds
and line (18b) for Part B/Supplemental proceeds.

 

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Total Realized Loss (or Amount of Any Gain)

23.   The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).

 

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Exhibit 3A: Calculation of Realized Loss/Gain Form 332

                     
Prepared by:
              Date:    
 
                   
Phone:
          Email Address:                          

                   Servicer Loan No.

   Servicer Name

     Servicer Address

 
 
               

     WELLS FARGO BANK, N.A. Loan No.
                                                            
     Borrower’s Name:
                                                                                
     Property Address:
                                                                                
     Liquidation Type: REO Sale           3rd Party Sale                    
Short Sale           Charge Off
     Was this loan granted a Bankruptcy deficiency or cramdown       Yes      No
     If “Yes”, provide deficiency or cramdown amount
                                                             

                      Liquidation and Acquisition Expenses:                  (1)
 
Actual Unpaid Principal Balance of Mortgage Loan
  $                                           (1)          (2)  
Interest accrued at Net Rate
                                              (2)          (3)  
Accrued Servicing Fees
                                              (3)          (4)  
Attorney’s Fees
                                              (4)          (5)  
Taxes (see page 2)
                                              (5)          (6)  
Property Maintenance
                                              (6)          (7)  
MI/Hazard Insurance Premiums (see page 2)
                                              (7)          (8)  
Utility Expenses
                                              (8)          (9)  
Appraisal/BPO
                                              (9)          (10)  
Property Inspections
                                              (10)          (11)  
FC Costs/Other Legal Expenses
                                              (11)          (12)  
Other (itemize)
                                              (12)            
Cash for Keys                                                             
                                              (12)            
HOA/Condo Fees                                                             
                                              (12)            
                                                                                
                                              (12)              
Total Expenses
  $                                           (13)         Credits:            
     (14)  
Escrow Balance
  $                                           (14)          (15)  
HIP Refund
                                              (15)          (16)  
Rental Receipts
                                              (16)          (17)  
Hazard Loss Proceeds
                                              (17)          (18)  
Primary Mortgage Insurance / Gov’t Insurance
                                              (18a)   HUD Part A    
 
                                              (18b)   HUD Part B

 

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                      (19)  
Pool Insurance Proceeds
                                              (19)         (20)  
Proceeds from Sale of Acquired Property
                                              (20)         (21)  
Other (itemize)
                                              (21)            
                                                                                
                                              (21)              
Total Credits
  $                                           (22)         Total Realized Loss
(or Amount of Gain)   $                                           (23)        

 

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Escrow Disbursement Detail

                          Type       Period of       Base         (Tax /Ins.)  
Date Paid   Coverage   Total Paid   Amount   Penalties   Interest