EXHIBIT 10.1

 

EXECUTION

 

FLOW MORTGAGE LOAN SUBSERVICING AGREEMENT

 

dated as of December 28, 2016

 

between

 

NEW RESIDENTIAL MORTGAGE LLC

 

Servicing Rights Owner

 

And

 

PHH MORTGAGE CORPORATION

 

Servicer

 

(Agency & Private Label Servicing)

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I.

 

 

 

DEFINITIONS

1

 

 

 

1.01

Defined Terms

1

 

 

 

ARTICLE II.

 

 

 

ENGAGEMENT FOR SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS
AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS

15

 

 

 

2.01

Engagement For Servicing of Mortgage Loans

15

 

 

 

2.02

Maintenance of Servicing Files

16

 

 

 

2.03

Books and Records

17

 

 

 

2.04

Delivery of Mortgage Loan Documents

17

 

 

 

2.05

Transfer of Mortgage Loans; Reconstitutions

18

 

 

 

2.06

Obligations of Servicing Rights Owner Prior to a related Effective Date

18

 

 

 

2.07

MERS

21

 

 

 

2.08

Transfer of Servicing

21

 

 

 

ARTICLE III.

 

 

 

REPRESENTATIONS AND WARRANTIES OF THE SERVICER

21

 

 

 

3.01

Representations and Warranties of Servicer

21

 

 

 

ARTICLE IV.

 

 

 

REPRESENTATIONS AND WARRANTIES OF THE SERVICING RIGHTS OWNER

22

 

 

 

4.01

Representations and Warranties

22

 

 

 

4.02

Representations and Warranties of Servicing Rights Owner Regarding Individual
Mortgage Loans

24

 

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ARTICLE V.

 

 

 

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

24

 

 

 

5.01

Appointment of Servicer; Servicing Standards; Additional Documents; Consent of
Servicing Rights Owner

24

 

 

 

5.02

Collection of Mortgage Loan Payments

25

 

 

 

5.03

Additional Service Request

26

 

 

 

5.04

Establishment of Collection Account; Deposits in Collection Account

26

 

 

 

5.05

Permitted Withdrawals from the Collection Account

26

 

 

 

5.06

Establishment of Escrow Accounts; Deposits in Escrow

27

 

 

 

5.07

Permitted Withdrawals From Escrow Accounts

27

 

 

 

5.08

Payment of Taxes, Insurance and Other Charges

27

 

 

 

5.09

Transfer of Accounts

28

 

 

 

5.10

Maintenance of Hazard Insurance

28

 

 

 

5.11

Buydown Mortgage Loans

28

 

 

 

5.12

Fidelity Bond; Errors and Omissions Insurance

28

 

 

 

5.13

Realization Upon Defaulted Serviced Mortgage Loans and REO Properties

29

 

 

 

5.14

Management of REO Properties

29

 

 

 

5.15

HELOC Loan Advances

30

 

 

 

5.16

Engagement of Contractors

30

 

 

 

5.17

Other Services

32

 

 

 

5.18

Service Level Agreements

34

 

 

 

5.19

Power of Attorney

35

 

 

 

5.20

Repurchase Facilitation

35

 

 

 

5.21

FHA/VA Loan Servicing Provisions

35

 

 

 

ARTICLE VI.

 

 

 

REPORTS; REMITTANCES; ADVANCES

36

 

 

 

6.01

Remittances to Mortgage Loan Investor and Servicing Rights Owner

36

 

 

 

6.02

Reporting; Delinquency Control

37

 

 

 

6.03

Servicing Advances; Reimbursement of Servicing Advances

39

 

 

 

6.04

P&I Advances; Compensating Interest

40

 

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6.05

Disaster Recovery Plan

41

 

 

 

6.06

Sanction Lists; Suspicious Activity Reports

43

 

 

 

6.07

Litigation Management

43

 

 

 

6.08

Resolution of Disputes and Monetary Errors

44

 

 

 

6.09

DFS Consent Order

44

 

 

 

ARTICLE VII.

 

 

 

SERVICING COMPENSATION

45

 

 

 

7.01

Servicing Compensation

45

 

 

 

ARTICLE VIII.

 

 

 

AUDIT RIGHTS

48

 

 

 

8.01

Servicing Rights Owner’s Right to Examine Servicer Records

48

 

 

 

ARTICLE IX.

 

 

 

INDEMNIFICATION

50

 

 

 

9.01

Indemnification; Third Party Claims

50

 

 

 

9.02

Merger or Consolidation of Servicer

52

 

 

 

9.03

Limitation on Liability of Servicer and Others

52

 

 

 

ARTICLE X.

 

 

 

DEFAULT

53

 

 

 

10.01

Events of Default

53

 

 

 

10.02

Waiver of Default

55

 

 

 

ARTICLE XI.

 

 

 

TERMINATION

56

 

 

 

11.01

Term and Termination

56

 

 

 

11.02

Payment Obligations upon Termination and Transfer of Servicing

57

 

 

 

ARTICLE XII.

 

 

 

GENERAL PROVISIONS

58

 

 

 

12.01

Governing Law; Consent to Service; Waiver of Jury Trial

58

 

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12.02

Notices

59

 

 

 

12.03

No Solicitation

59

 

 

 

12.04

Reserved

59

 

 

 

12.05

Severability of Provisions

59

 

 

 

12.06

Schedules and Exhibits

60

 

 

 

12.07

General Interpretive Principles

60

 

 

 

12.08

Assignment; Waivers and Amendments

60

 

 

 

12.09

Captions

61

 

 

 

12.10

Counterparts

61

 

 

 

12.11

Entire Agreement

61

 

 

 

12.12

Further Assurances

61

 

 

 

12.13

Confidentiality

61

 

 

 

12.14

Force Majeure

65

 

 

 

12.15

Executory Contract

65

 

 

 

12.16

Independence of Parties

66

 

Schedules

 

A.            Pricing Schedule

 

Exhibits

 

Exhibit 1

Contents of Each Mortgage File

Exhibit 2

Advance Threshold Matrix

Exhibit 3

Form of Collection Account Letter Agreement

Exhibit 4

Form of Escrow Account Letter Agreement

Exhibit 5

Litigation Protocols

Exhibit 6

Quarterly Financial Covenants

Exhibit 7

Quarterly Financial Covenant Certification

Exhibit 8

Form of Reports

Exhibit 9

Form of Limited Power of Attorney

Exhibit 10

Daily Data Elements

Exhibit 11

Service Level Agreements

Exhibit 12

List and Timing of Reports

Exhibit 13

Vendor List

Exhibit 14

Form of Quarterly Certificate

Exhibit 15

Advance Standards

 

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FLOW MORTGAGE LOAN SUBSERVICING AGREEMENT

 

This Flow Mortgage Loan Subservicing Agreement, dated as of December 28, 2016,
is entered into between New Residential Mortgage LLC, as Servicing Rights Owner
(the “Servicing Rights Owner”) and PHH Mortgage Corporation (“PHH Mortgage” or
the “Servicer”), as Servicer.

 

PRELIMINARY STATEMENT

 

WHEREAS, from time to time Servicing Rights Owner desires to engage from time to
time Servicer as sub-servicer for portfolios of residential mortgage loans in
which the related Servicing Rights are owned by Servicing Rights Owner; and

 

WHEREAS, Servicer and Servicing Rights Owner have agreed that Servicer shall
subservice certain of the mortgage loans on behalf of Servicing Rights Owner
commencing on the related Effective Date in accordance with the terms and
provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
Servicing Rights Owner and Servicer agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

1.01                             Defined Terms.

 

Whenever used in this Agreement, the following words and phrases shall have the
following meaning specified in this Article:

 

“Accepted Servicing Practices”: Those mortgage servicing standards, policies and
practices which are in accordance with the practices of prudent mortgage lending
institutions that service mortgage loans of the same type as such Mortgage Loans
for their own account in the jurisdiction where the related Mortgaged Property
is located, taking into account Investor Guidelines.

 

“Advance”:  A P&I Advance or a Servicing Advance.

 

“Affiliate”:  When used with reference to a specified Person, any Person that
(i) directly or indirectly controls or is controlled by or is under common
control with the specified Person, (ii) is an officer of, partner in or trustee
of, or serves in a similar capacity with respect to, the specified Person or of
which the specified Person is an officer, partner or trustee, or with respect to
which the specified Person serves in a similar capacity, or (iii) directly or
indirectly is the beneficial owner of 10% or more of any class of equity
securities of the specified Person or of which the specified Person is directly
or indirectly the owner of 10% or more of any class of equity securities;
provided, however, that, with respect to the Servicing Rights Owner, an
Affiliate shall be limited to New Residential Investment Corp. and its direct or
indirect wholly-owned subsidiaries.  For purposes of this definition, the term
“control” (including its correlative meanings “controlled by” and “under common
control with”) means possession, directly or

 

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indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).

 

“Agency”:  Fannie Mae, Freddie Mac, FHA, VA, USDA or HUD, as applicable.

 

“Agreement”:  This Flow Mortgage Loan Subservicing Agreement between Servicing
Rights Owner and Servicer.

 

“Ancillary Fees”:  All income derived from the Mortgage Loans (other than the
Float Benefit, payments of principal, interest, prepayment premiums, escrow
payments, servicing fees and Servicing Fees), including, but not limited to,
late payment charges, charges for dishonored checks, pay-off fees, assumption
fees, conversion fees, conversion fees, subordination fees, wire transfer fees,
reinstatement fees, lien release fees, reconveyance fees, payoff quote fees, pay
by phone fees and such similar fees and charges, in any case to the extent not
exceeding or violating any applicable amounts or limitations under Applicable
Requirements.

 

“Applicable Requirements”:  As to any Mortgage Loan and REO Property, as of the
time of reference: (a) all federal, state and local laws, statutes, rules,
regulations and ordinances applicable to the Servicing Rights Owner or the
Servicer that are related to residential mortgage loans or the servicing or
subservicing thereof, including with limitation the Vendor Oversight Guidance
and applicable FHA Regulations, USDA Regulations or VA Regulations; (b) all
Mortgage Loan-related contractual obligations of the Servicing Rights Owner, as
servicer, including, without limitation, applicable Investor Guidelines, (d) all
other applicable requirements and guidelines related to the servicing or
subservicing of residential mortgage loans as promulgated by (i) any
Governmental Authority having jurisdiction, including without limitation the
CFPB and (ii) any applicable Insurer; (e) Accepted Servicing Practices, (f) the
terms of the related Mortgage Loan Documents and (g) all other applicable
judicial and administrative judgments, assurances, orders, stipulations,
directives, consent decrees (including, without limitation, the DFS Consent
Order), awards, writs and injunctions that is made or given at any time by any
Governmental Authority applicable to the servicing or subservicing of the
Mortgage Loans; provided, that in the event that either the Servicing Rights
Owner or the Servicer becomes subject to such judicial or administrative
judgment, order, stipulation, directive, consent decree, award, writ or
injunction after the initial Sale Date that would affect the servicing or
subservicing of the Mortgage Loans hereunder, such party shall promptly notify
the other party of the relevant terms thereof.

 

“ARM Loan”:  An “adjustable rate” Mortgage Loan, the Note Rate of which is
subject to periodic adjustment in accordance with the terms and provisions of
the related Mortgage Note.

 

“Bankruptcy Code”:  The Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101-1330),
as amended, modified, or supplemented from time to time, and any successor
statute, and all rules and regulations issued or promulgated in connection
therewith.

 

“Business Day”:  Any day other than (i) a Saturday or Sunday, (ii) a day on
which the Federal Reserve is closed, (iii) a day that is not a business day as
provided in the related Investor Guidelines, or (iv) the Friday following
Thanksgiving Day.

 

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“Buydown Funds”:  In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown Mortgage
Loan, the buyer of such property, the mortgagee or any other source, plus
interest earned thereon, in order to enable the Mortgagor to reduce the payments
required to be made from the Mortgagor’s funds in the early years of a Mortgage
Loan.

 

“Buydown Mortgage Loan”:  Any Mortgage Loan in respect of which, pursuant to a
buydown agreement, (i) the Mortgagor pays less than the full monthly payments
specified in the Mortgage Note for a specified period, and (ii) the difference
between the payments required under such buydown agreement and the Mortgage Note
is provided from Buydown Funds.

 

“CFPB”:  The Consumer Financial Protection Bureau, an independent federal agency
operating as part of the United States Federal Reserve System.

 

“Change of Control”:  With respect to the Servicer, shall mean (i) any
transaction or event as a result of which the PHH Parent ceases to own, directly
or indirectly, at least 51% of the stock of Servicer; (ii) the sale, transfer,
or other disposition of all or substantially all of Servicer’s assets (excluding
any such action taken in connection with any securitization transaction or
routine sales of mortgage loans); or (iii) the consummation of a merger or
consolidation of Servicer with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the continuing
or surviving entity’s equity outstanding immediately after such merger,
consolidation or such other reorganization is owned by persons who were not
equityholders of the Servicer immediately prior to such merger, consolidation or
other reorganization.  With respect to the PHH Parent, shall mean (i) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act as in effect on the Effective Date) is or shall become the
“beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act as in effect on the Effective Date), directly or indirectly, of (A) more
than 50% on a fully diluted basis of the voting interests in the PHH Parent’s
Equity Interests or (B) 25% or more on a fully diluted basis of the voting
interests in the PHH Parent’s Equity Interests, to the extent that such “person”
or “group” (y) is identified on the then most recent list (as of the time of
such “person” or “group” becoming such a beneficial owner) of up to five
(5) competitors of the Servicing Rights Owner provided in writing by the
Servicing Rights Owner to the Servicer no later than the initial Sale Date,
which list may be updated semi-annually in writing by the Servicing Rights Owner
during the months of June and December (commencing with June 2017) and (z) has
at least two (2) representatives on the Board of Directors of PHH Corporation,
or (ii) if at any time, individuals who on the date hereof constituted the Board
of Directors of PHH Corporation (together with any directors whose election by
such Board of Directors or whose nomination for election by the shareholders of
PHH Corporation after the date hereof, as the case may be, was approved by a
vote of the majority of the directors then still in office who were either
directors on the date hereof or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of PHH Corporation then in office.

 

“Code”:  The Internal Revenue Code of 1986, as amended.

 

“Collection Account”:  The separate time deposit or demand account or accounts
maintained pursuant to Section 5.04 which shall be entitled “PHH Mortgage as
agent, trustee

 

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and/or bailee for New Residential Mortgage LLC and/or payments of various owners
of interest in mortgage-backed securities” (or other similar titling).

 

“Commission”:  The United States Securities and Exchange Commission.

 

“Compensating Interest”:  For any Remittance Date, the aggregate Prepayment
Interest Shortfall Amount, if any, under the Investor Guidelines.

 

“Compensatory Fees”:  Any compensatory fees, fines, penalties or other monies
assessed by the Agency for failure to adhere to the applicable Investor
Guidelines in servicing the Mortgage Loans.

 

“Condemnation Proceeds”:  All awards or settlements in respect of a taking of an
entire Mortgaged Property or a part thereof by exercise of the power of eminent
domain or condemnation, to the extent not required to be released to a Mortgagor
in accordance with the terms of the related Mortgage Loan Documents.

 

“Cooperative Corporation”:  With respect to any Cooperative Loan, the
cooperative apartment corporation that holds legal title to the related
Cooperative Project and grants occupancy rights to units therein to stockholders
through Cooperative Leases or similar arrangements.

 

“Cooperative Lease”:  The lease on a Cooperative Unit evidencing the possessory
interest of the owner of the Cooperative Stock in such Cooperative Unit.

 

“Cooperative Loan”:  A Mortgage Loan that is secured by a first lien on and a
perfected security interest in Cooperative Stock and the related Cooperative
Lease granting exclusive rights to occupy the related Cooperative Unit in the
building owned by the related Cooperative Corporation.

 

“Cooperative Project”:  With respect to any Cooperative Loan, all real property
and improvements thereto and rights therein and thereto owned by a Cooperative
Corporation including without limitation the land, separate dwelling units and
all common elements.

 

“Cooperative Stock”:  With respect to any Cooperative Loan, the shares of stock
issued by a Cooperative Corporation and allocated to a Cooperative Unit and
represented by a stock certificates.

 

“Cooperative Unit”:  With respect to any Cooperative Loan, a specific unit in a
Cooperative Project.

 

“Custodial Agreement”:  With respect to any Mortgage Loan, the agreement
governing the retention of the Mortgage Loan Documents.

 

“Custodian”:  With respect to any Custodial Agreement, the custodian thereunder.

 

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“Deboarding Fee”:  To the extent payable under this Agreement, a fee in the
amount set forth on Schedule A payable to Servicer in connection with the
transfer of the servicing of a Mortgage Loan from Servicer to a successor
servicer at the direction of Servicing Rights Owner.

 

“Default Firms”:  Any foreclosure attorneys, bankruptcy attorneys and eviction
attorneys engaged by Servicer in accordance with Section 5.16.

 

“Delinquent Mortgage Loan”:  Any Mortgage Loan with respect to which the Monthly
Payment would be considered thirty (30) days or more delinquent following the
MBA Methodology.

 

“Determination Date”:  The date designated as the cut-off date, determination
date or similar date set forth in the Investor Guidelines.

 

“DFS Consent Order”:  The Consent Order, dated November 9, 2016, among the
Servicer, PHH Home Loans, LLC and NYDFS.

 

“Due Date”:  With respect to any Mortgage Loan, the day of the month on which
each Monthly Payment is due thereon, exclusive of any days of grace.

 

“Due Period”:  With respect to each Remittance Date, the monthly period
determined in accordance with Investor Guidelines.

 

“Effective Date”:  The date, as set forth in the related Servicing Transfer
Notice (other than in respect of the Initial Mortgage Loans), on which
responsibility for the servicing and administration of a pool of Mortgage Loans
is transferred to Servicer; provided that, notwithstanding the foregoing, solely
with respect to the Initial Mortgage Loans, the Transfer Date for such Initial
Mortgage Loans shall be the applicable Sale Date (as defined in the Purchase
Agreement).

 

“Eligible Account”:  With respect to any account, any depository institution
that meets the custodial account requirements of applicable Investor Guidelines.

 

“Equity Interests”: of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interest in (however designated) equity of such Person, including any common
stock, preferred stock, any limited or general partnership interest and any
limited liability company membership interest; provided that, for the avoidance
of doubt and without limitation, “Equity Interests” shall exclude the
convertible notes and any other indebtedness convertible into or exchangeable
for Equity Interests.

 

“Escrow Account”:  The separate time deposit or demand account or accounts
created and maintained pursuant to Section 5.06 which shall be entitled “PHH
Mortgage as agent, trustee and/or bailee for New Residential Mortgage LLC and/or
payments of various mortgagors” (or other similar titling).

 

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“Escrow Payments”:  The amounts constituting taxes, assessments, water rates,
sewer rents, flood insurance premiums, fire and hazard insurance premiums and
other payments required to be escrowed by the Mortgagor with the mortgagee
pursuant to any Mortgage Loan.

 

“Exchange Act”:  The Securities Exchange Act of 1934, as amended.

 

“Event of Default”:  Any one of the conditions or circumstances enumerated in
Section 10.01.

 

“Fannie/Freddie Transfer”:  The sale or transfer by Servicing Rights Owner of
some or all of the Mortgage Loans to Fannie Mae or Freddie Mac which sale or
transfer is not a Securitization Transaction or a Whole Loan Transfer.

 

“Fannie Mae”:  The Federal National Mortgage Association or any successor
organization.

 

“Fannie Mae Guide”:  The Fannie Mae Selling Guide and Servicing Guide,
collectively, in effect on and as amended, modified, and/or supplemented from
time to time after the related Effective Date.

 

“Fannie Mae Mortgage Loan”:  A mortgage loan with respect to which Fannie Mae
owns the beneficial interest therein or that serves as collateral for
mortgage-backed securities on which the payment of principal and interest is
guaranteed by Fannie Mae.

 

“FHA”: The Federal Housing Administration or any successor thereto.

 

“FHA Insurance Contract”: Contractual obligation of FHA respecting the insurance
of an FHA Loan pursuant to the National Housing Act, as amended.

 

“FHA Loan”: A Mortgage Loan which is the subject of an FHA Insurance Contract as
evidenced by a certificate of Mortgage Insurance.

 

“FHA Regulations”: Regulations promulgated by HUD under the National Housing
Act, codified in Title 24 of the Code of Federal Regulations, and other HUD
issuances relating to mortgage loans insured by the FHA.

 

“Fidelity Bond”:  A fidelity bond to be maintained by Servicer in accordance
with the Fannie Mae Guide pursuant to Section 5.12.

 

“Float Benefit”:  (1) All interest paid on funds held in any Collection Account
or Escrow Account, to the extent not payable to any Investor or Mortgagor and
(2) an amount equal to any economic credit afforded to the holder of the related
Collection Account or Escrow Account.

 

“Freddie Mac”:  The Federal Home Loan Mortgage Corporation or any successor
organization.

 

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“Freddie Mac Mortgage Loan”:  A mortgage loan with respect to which Freddie Mac
owns the beneficial interest therein or that serves as collateral for
mortgage-backed securities on which the payment of principal and interest is
guaranteed by Freddie Mac.

 

“Freddie Mac Servicing Guide”:  The Freddie Mac Sellers’ and Servicers’ Guide in
effect on and as amended, modified, and/or supplemented from time to time and
after the related Effective Date.

 

“Governmental Authority”:  Any court, board, agency, commission, office or other
authority or quasi-governmental authority of any nature whatsoever for any
governmental unit (foreign, federal, state, county, district, municipal, city or
otherwise) whether now or hereafter in existence.

 

“HELOC Loan” means a home equity line of credit subserviced by Servicer on
behalf of Servicing Rights Owner hereunder.

 

“HELOC Loan Advance” means an advance of funds to or on behalf of a Mortgagor
pursuant to a HELOC Loan.

 

“HMDA”:  The Home Mortgage Disclosure Act, as amended.

 

“HOEPA”:  The Home Ownership and Equity Protection Act of 1994, as amended.

 

“HUD”:  The United States Department of Housing and Urban Development, or any
successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.

 

“Initial Mortgage Loans”:  The Mortgage Loans serviced hereunder as to which the
related Servicing Rights were sold by Servicer to Servicing Rights Owner under
that certain Purchase Agreement.

 

“In-process Loan Modification”:  A trial or permanent loan modification offered
by the Servicer, Agency or any prior servicer that was either accepted by the
Mortgagor or for which the time for the Mortgagor to accept the offer has not
expired and the offer has not been rejected.  The term also means and includes
(a) trial modifications in which the Servicer, Agency or any prior servicer
agreed to modify the payment terms of the Mortgage Loan unless the Servicer or a
prior servicer has clear written evidence that the Mortgagor has failed to
perform under the trial loan modification terms and (b) modifications in which
the Mortgagor completed making the trial payments, but the permanent
modification was not input into the Servicer or any prior servicer’s system.

 

“Insolvency Proceeding”:  With respect to any Person:  (i) any case, action, or
proceeding with respect to such Person before any Governmental Authority
relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up, or relief of debtors; or (ii) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of the creditors generally of such
Person or any substantial portion of such Person’s creditors; in any case
undertaken under federal, state or foreign law, including the Bankruptcy Code.

 

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“Insurance Proceeds”:  Proceeds of any 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 Accepted Servicing Practices.

 

“Insurer”:  FHA, VA, USDA or any private mortgage insurer, pool insurer and any
insurer or guarantor under any standard hazard insurance policy, any federal
flood insurance policy, any title insurance policy, any earthquake insurance
policy or other insurance policy, and any successor thereto, with respect to the
Mortgage Loan or the Mortgaged Property.

 

“Investor Guidelines”:  The Fannie Mae Guide, the Freddie Mac Guide or
comparable servicing guidelines  issued by the Federal Housing Administration,
the VA or the USDA, (in each case, including but not limited to the applicable
Mortgage Loan Investor manuals, handbooks, bulletins, circulars, announcements,
issuances, releases, letters, correspondence and other instructions) any
servicing agreement or Reconstitution Agreement, in each case to the extent
applicable to any Mortgage Loan or REO Property.

 

“Liquidation Proceeds”:  Amounts, other than Insurance Proceeds and Condemnation
Proceeds or those received following the acquisition of REO Property in
accordance with the provisions hereof, received by Servicer in connection with
the liquidation of a defaulted Mortgage Loan, whether through sale or assignment
of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise, other than
amounts received following the acquisition of an REO Property in accordance with
the provisions hereof.

 

“Losses”:  Any and all claims, losses, damages, penalties, fines, forfeitures,
judgments, and any other costs, fees and expenses (including reasonable
attorneys’ fees and costs).

 

“Loss Mitigation”:  With respect to any Mortgage Loan, any modified or proposed
payment arrangement, proposed, trial or permanent loan modification, In-process
Loan Modification, forbearance plan, short sale, deed-in-lieu agreement, and any
other non-foreclosure home retention or non-retention option offered by the
Servicer, Agency or any prior servicer that is made available to the Mortgagor
by or through Servicer, Agency, or any prior servicer, including any application
or request of a Mortgagor for any of the foregoing.  For avoidance of doubt,
this definition shall apply only to Mortgage Loans in loss mitigation or where a
loss mitigation application is pending.

 

“MBA Methodology”: A method of calculating delinquency of a Mortgage Loan based
upon Mortgage Bankers Association method, under which method a Mortgage Loan is
considered delinquent if the payment had not been received by the end of the day
immediately preceding the Mortgage Loan’s next due date (generally the last day
of the month in which the payment was due).  For example, a Mortgage Loan with a
due date of August 1, 2016, with no payment received by the close of business on
August 31, 2016, would have been reported as delinquent on September 1, 2016.

 

“MERS”:  Mortgage Electronic Registration Systems, Inc., or any successor
thereto.

 

“Monthly Payment”:  The scheduled monthly payment of principal and interest on a
Mortgage Loan which is payable by a Mortgagor under the related Mortgage Note.

 

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“Mortgage”:  The mortgage, deed of trust or other instrument securing a Mortgage
Note, which creates a first lien or second lien on either (i) with respect to a
Mortgage Loan other than a Cooperative Loan, an unsubordinated estate in fee
simple in real property or (ii) with respect to a Cooperative Loan, the
Cooperative Lease and related Cooperative Stock, which in either case secures
the Mortgage Note.

 

“Mortgage File”:  With respect to a particular Mortgage Loan, the Mortgage Loan
Documents, any origination, servicing or escrow documents, and any additional
documents required to be added to the Mortgage File pursuant to this Agreement
set forth on Exhibit 1.

 

“Mortgage Loan”:  Each mortgage loan which is the subject of this Agreement.

 

“Mortgage Loan Documents”:  With respect to each Mortgage Loan, the documents
delivered to the related Custodian pursuant to the related Custodial Agreement.

 

“Mortgage Loan Investor”:  With respect to any Mortgage Loan, the party to whom
Servicing Rights Owner is obligated to remit Monthly Payments in respect of such
Mortgage Loan.

 

“Mortgage Loan Schedule”:  With respect to any Initial Mortgage Loans, the
schedule of Mortgage Loans contained in an Excel file delivered to Servicing
Rights Owner by Servicer on the related Effective Date setting forth certain
information with respect to each Mortgage Loan, and, with respect to any
Mortgage Loans, which are not Initial Mortgage Loans, made subject to this
Agreement after the date hereof, the mortgage loan schedule attached to the
related Servicing Transfer Notice delivered to Servicer in connection therewith.

 

“Mortgage Note”:  The note or other evidence of the indebtedness of a Mortgagor
secured by a Mortgage.

 

“Mortgaged Property”:  With respect to a Mortgage Loan, the underlying real
property securing repayment of a Mortgage Note, consisting of a fee simple
estate.

 

“Mortgagor”:  The obligor on a Mortgage Note.

 

“New Loan Data File”:  Except with respect to the Initial Mortgage Loans, with
respect to each Mortgage Loan delivered by Servicing Rights Owner to Servicer to
be serviced under this Agreement, the data file produced by Servicing Rights
Owner pursuant to the Servicing Transfer Instructions which is used to enable
Servicer to set up each Mortgage Loan on its EDP system.

 

“Non-recoverable Advance”:  As of any date of determination, any Advance
previously made or any Advance proposed to be made in respect of a Mortgage Loan
which, in the good faith judgment of Servicer and in accordance with Applicable
Requirements, will not or, in the case of a proposed Advance, would not be
ultimately recoverable from amounts collected in respect of such Mortgage Loan.

 

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“Note Rate”:  With respect to any Mortgage Loan at any time any determination
thereof is to be made, the annual rate at which interest accrues thereon as set
forth in the related Mortgage Note.

 

“NYDFS”: New York Department of Financial Services.

 

“Off-shore Vendor”: Any Vendor which is located outside the United States of
America and/or the services provided by any Vendor are being performed outside
the United States of America.

 

“P&I Advance”:  An advance made on account of a delinquent principal and/or
interest payment in accordance with the applicable Investor Guidelines.

 

“Payoff”:  With respect to any Mortgage Loan, any payment or recovery received
in advance of the last scheduled Due Date of such Mortgage Loan, which payment
or recovery consists of principal in an amount equal to the outstanding
principal balance of such Mortgage Loan, all accrued and unpaid premiums, and/or
interest with respect thereto, and all other unpaid sums due with respect to
such Mortgage Loan.

 

“Person”:  Any individual, corporation, limited liability company, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

 

“PHH Parent”: PHH Corporation, a Maryland corporation.

 

“Prepayment Interest Shortfall Amount”:  With respect to any Mortgage Loan that
was subject to a Principal Prepayment in full or in part during any Due Period,
the amount of interest required to be remitted by the Servicing Rights Owner, if
any, under applicable Investor Guidelines.

 

“Primary Mortgage Insurance Policy” or “PMI Policy”:  Each policy of primary
mortgage insurance in effect on the applicable Effective Date with respect to
any Mortgage Loan, or any replacement policy therefor.

 

“Prime Rate”:  The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal (Northeast edition).

 

“Principal Prepayment”:  Any payment or other recovery of principal on a
Mortgage Loan (including a Payoff), other than a Monthly Payment or a Prepaid
Monthly Payment which is received in advance of its scheduled Due Date,
including any premium thereon, which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment and which is intended to reduce the
principal balance of the Mortgage Loan.

 

“Prior Servicer”:  All servicers and subservicers, collectively and
individually, other than Servicer, which, at any time prior to the applicable
Effective Date, serviced or subserviced any of the Mortgage Loans.

 

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“Private Label Mortgage Loan”: Any Mortgage Loan that is not a Fannie Mae
Mortgage Loan or a Freddie Mac Mortgage Loan.

 

“Purchase Agreement”: That certain agreement for the purchase and sale of
servicing rights, dated as of the date hereof, between Servicer and Servicing
Rights Owner.

 

“Quarterly Financial Covenants”:  As defined in Section 6.02.

 

“Quarterly Financial Covenants Report”:  As defined in Section 6.02.

 

“Reconstitution”:  Any Fannie/Freddie Transfer, Securitization Transaction or
Whole Loan Transfer.

 

“Reconstitution Agreement”:  With respect to Private Label Mortgage Loans, the
fully executed contracts (including any pooling agreement, servicing agreement,
custodial agreement or other agreement or arrangement) assigned to the Servicing
Rights Owner and defining the rights and obligations of the Servicing Rights
Owner.

 

“Reconstitution Agreement (MSR)”:  The agreement(s) entered into by Servicing
Rights Owner and/or other third parties in connection with a sale of the
Servicing Rights as set forth in Section 2.05 hereof with respect to any or all
of the Mortgage Loans serviced hereunder.

 

“Reconstitution Date”:  The date(s) on which any or all of the Mortgage Loans
serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Reconstitution pursuant to Section 2.05 hereof.

 

“Remittance Date”:  The remittance date set forth in the applicable Investor
Guidelines.

 

“REO Disposition”:  The final sale by Servicer of any REO Property.

 

“REO Disposition Proceeds”:  All amounts received with respect to any REO
Disposition.

 

“REO Property”:  A Mortgaged Property acquired by Servicer on behalf of
Servicing Rights Owner through foreclosure or deed in lieu of foreclosure,
abandonment or reclamation from bankruptcy in connection with a defaulted
Mortgage Loan, as described in Section 5.14.

 

“Reporting Date”:  The fifth (5th) Business Day of each month.

 

“Retention Agreement”:  As defined in Section 12.03.

 

“Securitization Transaction”:  Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.

 

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“Service Level Agreements” or “SLAs”:  As defined in Section 5.18 of this
Agreement.

 

“Servicer”:  PHH Mortgage Corporation, a New Jersey corporation.

 

“Servicer Economics”:  The sum of the following, without duplication, Servicing
Fees, Ancillary Fees and other compensation set forth on Schedule A payable to
the Servicer.

 

“Servicing Advances”:  All customary, reasonable and necessary “out of pocket”
costs and expenses, including reasonable attorneys’ fees and disbursements,
advanced by Servicer in the performance of its servicing obligations in
accordance with Applicable Requirements, including, but not limited to, the cost
of:

 

(i)                                     the preservation, restoration and
protection of a Mortgaged Property or REO Property, including third party loss
draft processing fees;

 

(ii)                                  any remedial, enforcement or Loss
Mitigation actions relating to the Mortgage Loan or any administrative or
judicial proceedings, including without limitation mediation proceedings,
relating to a Mortgage Loan, and including foreclosures, evictions, deed in lieu
of foreclosures or loan modifications;

 

(iii)                               the management, liquidation, marketing,
sale, renovation, repair, maintenance and preservation of a Mortgaged Property
or REO Property, including reasonable fees paid to any independent contractor in
connection therewith;

 

(iv)                              Escrow Payments (and similar amounts not
required to be escrowed out of Mortgagor payments) and other charges which are
or may become a lien upon a Mortgaged Property or REO Property, Primary Mortgage
Insurance Policy premiums and fire and hazard insurance coverage;

 

(v)                                 the assessment and evaluation of a Mortgage
Loan and the related Mortgaged Property or REO Property, including broker price
opinions, environmental evaluations, property inspections, surveys and
appraisals, lien searches and title insurance and reviews;

 

(vi)                              lien release fees, including any reconveyance,
recording, administrative and vendor fees associated therewith, property
inspection fees, vacant property registration fees, court-ordered mediation
hearings and loss draft processing fees, in each case to the extent not
collected from the Mortgagor; and

 

(vii)                           such other expenditures which are deemed to be
Servicing Advances herein or otherwise permitted under Investor Guidelines.

 

“Servicing Fee”:  For each Mortgage Loan serviced by Servicer hereunder, the
applicable monthly servicing fee calculated in accordance with Schedule A
attached hereto.

 

“Servicing File”:  With respect to each Mortgage Loan, all documents, whether in
hard copy, computer record, microfiche or any other format, evidencing and
pertaining to a particular Mortgage Loan and relating to the origination,
servicing, collection, payment and foreclosure of

 

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such Mortgage Loan, necessary to service the Mortgage Loans in accordance with
Applicable Requirements or required to be held by the mortgage loan servicers
under Applicable Requirements, including without limitation the following
documents with respect to each Mortgage Loan: (a) a schedule of all transactions
credited or debited to the Mortgage Loan, including the Escrow Account and any
suspense account; (b) a copies of the Mortgage Loan Documents; (c) any notes
created by the Servicer (or any prior servicer) personnel reflecting
communications with the Mortgagor about the Mortgage Loan; (d) any reports
specific to the Mortgage Loan created by the Servicer (or any prior servicer) in
connection with the servicing of the Mortgage Loan; (e) copies of information or
documents provided by Mortgagor to the Servicer in connection with any error
resolution or Loss Mitigation; and (f) any documents or records required to be
maintained by mortgage loan servicers under the applicable Investor Guidelines,
and any additional documents relating to such Mortgage Loan as are in, or as may
from time to time come into, Servicer’s possession or control; provided that,
with respect to the time period in which Servicer was not the servicer of such
Mortgage Loans, such documents described in clauses (a) through (f) for such
time period will be in the Servicing File to the extent in the Servicer’s
possession or control.

 

“Servicing Officer”:  Any officer of Servicer involved in, or responsible for,
the administration and servicing of the Mortgage Loans whose name appears on a
written list of servicing officers furnished by Servicer to Servicing Rights
Owner upon request therefor by Servicing Rights Owner, as such list may from
time to time be amended.

 

“Servicing Rights”:  With respect to all Mortgage Loans, collectively, (i) the
rights and obligations to service, administer, collect payments for the
reduction of principal and application of interest, collect payments on account
of taxes and insurance, pay taxes and insurance and other Escrow Payments, remit
collected payments, provide foreclosure services, provide full escrow
administration; (ii) any other obligations required by any Agency, Mortgage Loan
Investor or Insurer in, of, or for such Mortgage Loans pursuant to any Investor
Guidelines; (iii) the right to possess any and all documents, files, records,
Mortgage Files, servicing documents, servicing records, data tapes, computer
records, or other information pertaining to the Mortgage Loans or pertaining to
the past, present or prospective servicing of the Mortgage Loans; (iv) the right
to receive servicing fees, Ancillary Fees, other proceeds arising from or
connected to the Mortgage Loans and REO Properties and the benefits derived from
the Accounts arising from or connected to such Mortgage Loans; (v) all rights
and benefits relating to the direct solicitation of the related Mortgagors for
refinance or modification of the Mortgage Loans and/or for any other product or
service and the attendant right, title and interest in and to the list of such
Mortgagors; (vi) to the extent set forth in the Investor Guidelines, all
clean-up call or related rights; (vii) all rights, powers and privileges
incident to any of the foregoing; and (viii) all agreements, documents or
instruments evidencing any of the foregoing.

 

“Servicing Rights Owner”:  New Residential Mortgage LLC, or its successor in
interest or any successor under this Agreement appointed as herein provided.

 

“Servicing Rights Owner’s Account”:  The account of Servicing Rights Owner at a
bank or other entity most recently designated in a written notice by Servicing
Rights Owner to Servicer as the “Servicing Rights Owner’s Account.”

 

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“Servicing Rights Owner Economics”:  The sum of the following, with duplication,
(i) all prepayment penalties/premiums and servicing-related fees payable to the
Servicing Rights Owner as servicer of the Mortgage Loans under the applicable
Investor Guidelines and received during the applicable prior Mortgage Loan
Investor accounting cycle or applicable portion thereof, (ii) all recoveries on
the Mortgage Loans during the applicable prior Mortgage Loan Investor accounting
cycle or applicable portion thereof of Servicing Advances and P&I Advances
previously funded or reimbursed by the Servicing Rights Owner to the Servicer or
the prior servicer and (iii) all other outstanding amounts collected during the
applicable prior Mortgage Loan Investor accounting cycle or applicable portion
thereof and payable to the Servicing Rights Owner under this Agreement
(including Float Benefit and any Loss Mitigation or incentive fees payable to
the Servicing Rights Owner as servicer under applicable Investor Guidelines as
described in Section 6.01).

 

“Servicing Transfer Costs”:  With respect to each Mortgage Loan, an amount equal
to the lesser of (a) all reasonable out-of-pocket costs incurred in connection
with the transfer of the servicing of the Mortgage Loans from Servicer to a
successor servicer or subservicer, including but not limited to all applicable
boarding fees incurred from the successor servicer, custodial recertification
costs, the costs of transferring the Servicing File, the costs of assigning any
Mortgages from the name of Seller to such successor, and the costs of changing
the names of the subservicer and the owner in MERS and (b) fifteen dollars ($15)
per Mortgage Loan.

 

“Servicing Transfer Date”:  With respect to any Initial Mortgage Loans, the
related Effective Date.  With respect to any other Mortgage Loans (excluding the
Initial Mortgage Loans), the date specified on the related Servicing Transfer
Notice on which, Servicing Rights Owner or Prior Servicer shall have completed
the transfer of servicing to Servicer.

 

“Servicing Transfer Instructions”: Such instructions with respect to the
transfer of servicing from the Prior Servicer to Servicer as agreed to by the
parties hereto.

 

“Servicing Transfer Notice”:  Other than in respect of any Initial Mortgage
Loans, in a form mutually agreed upon, by and between Servicing Rights Owner and
Servicer, from time to time, pursuant to which additional Mortgage Loans, as
described on the schedule attached thereto (which schedule shall become part of
the Mortgage Loan Schedule as of the related Effective Date), are made subject
to the terms of this Agreement.

 

“SRO Distribution Date”:  The sixth (6th) Business Day of each month.

 

“USDA”: The United States Department of Agriculture or any successor thereto.

 

“USDA Regulations”:  The regulations promulgated by the USDA and other USDA
issuances relating to mortgage loans guaranteed by the USDA.

 

“VA”:  The United States Department of Veterans Affairs or any successor
thereto.

 

“VA Loan”:  A Mortgage Loan guaranteed by the VA.

 

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“VA Regulations”: The regulations promulgated by the VA pursuant to the
Serviceman’s Readjustment Act, as amended, codified in Title 38 of the Code of
Federal Regulations, and other VA issuances relating to mortgage loans
guaranteed by the VA.

 

“Vendor”:  Any third-party contractors, vendor and/or service provider engaged
by the Servicer in accordance with general servicing practices and procedures
and Applicable Requirements; provided, however, this definition of Vendor shall
not include consulting services and non-trade business support services (i) not
involved with and not having access to the servicing process or (ii) not
involved with  the protection of, or having access to, information and/or data
related to the Mortgagor, the Mortgage Loans or the Servicing Rights.

 

“Vendor Oversight Guidance”:  All applicable requirements and guidelines related
to the oversight of third-party contractors, vendors and/or service providers as
promulgated by (i) the CFPB (including but not limited to CFPB Bulletin
2012-03), (ii) the Board of Governors of the Federal Reserve System (including
but not limited to the “Guidance on Managing Outsourcing Risk” dated December 5,
2013), (iii) the Federal Deposit Insurance Corporation (including but not
limited to FIL-44-2008 (“Guidance for Managing Third-Party Risk”)), (iv) the
Office of the Comptroller of the Currency (including but not limited to OCC
Bulletin 2013-29 (“Risk Management Guidance”) and (v) the Federal Financial
Institutions Examination Council.

 

“Whole Loan Transfer”:  Any sale or transfer of some or all of the Mortgage
Loans, other than a Securitization Transaction or a Fannie/Freddie Transfer.

 

ARTICLE II.

 

ENGAGEMENT FOR SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS
AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS

 

2.01                             Engagement For Servicing of Mortgage Loans

 

This Agreement shall become effective immediately upon the occurrence of the
Initial Sale Date (as defined in the Purchase Agreement).  To the extent that
the Purchase Agreement terminates without the occurrence of any Sale Date, this
Agreement shall be void ab initio.

 

Other than in respect of the Initial Mortgage Loans, as to which servicing shall
begin on the related Sale Date (as defined in the Purchase Agreement) of the
Servicing Rights, notwithstanding anything to the contrary in this Section 2.01,
mortgage loans may be made subject hereto in accordance with this Section 2.01.
The Servicing Rights Owner shall deliver a draft Servicing Transfer Notice
setting forth the proposed Servicing Transfer Date and a description, containing
such details as Servicer may reasonably request, of the Mortgage Loans to be
serviced by Servicer hereunder.  Any such draft Servicing Transfer Notice shall
be given to Servicer no later than sixty (60) days prior to the related
Servicing Transfer Date.  Except with respect to any Initial Mortgage Loans,
Servicer shall have fourteen (14) days to review and evaluate the product
specifications, underwriting guidelines, system support and servicing transfer
protocols and procedures of the related Prior Servicer and underlying seller, as

 

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applicable, or originator.  Following such review and evaluation, Servicer shall
promptly notify Servicing Rights Owner if it agrees or declines to service such
mortgage loans pursuant to the terms of this Agreement.

 

Upon Servicer’s acceptance of any such additional Mortgage Loans, each party
shall execute the Servicing Transfer Notice and Servicer shall assume
responsibility under this Agreement to service and administer such Mortgage
Loans upon the delivery, in accordance with the Servicing Transfer Instructions,
of the related New Loan Data File and all related Mortgage Loan Documents by
Servicing Rights Owner.

 

Servicing Rights Owner shall provide the New Loan Data File for each Mortgage
Loan to Servicer promptly upon Servicing Rights Owner’s receipt of the written
notice from Servicer wherein Servicer agrees to service such Mortgage Loans. 
Servicing Rights Owner shall notify Servicer promptly of any changes in the
information contained in the New Loan Data File that affects the servicing of
such Mortgage Loan.  Servicing Rights Owner agrees to cause the related
Custodian to recognize the Servicer as the subservicer of the Mortgage Loans. 
The Servicer shall request directly from the Custodian copies of the Mortgage
Note, the Mortgage or any other documents in the Custodian’s possession that
Servicer deems reasonably necessary in connection with its performance of the
servicing of such Mortgage Loan.

 

2.02                             Maintenance of Servicing Files

 

Servicer shall maintain a Servicing File with respect to each Mortgage Loan,
consisting of all documents necessary to service the Mortgage Loans in
accordance with Applicable Requirements.  The possession of each Servicing File
by Servicer is for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by Servicer is in a custodial capacity only. 
Servicer acknowledges that the ownership of each Mortgage Loan, including the
Mortgage Note, the Mortgage, the Mortgage Loan Documents, the contents of the
related Servicing File and all rights, benefits, proceeds and obligations
arising therefrom or in connection therewith, is vested in the applicable
Mortgage Loan Investor.  All rights arising out of the Mortgage Loans including
all funds received on or in connection with the Mortgage Loans and all records
or documents with respect to the Mortgage Loans prepared by or which come into
the possession of Servicer shall immediately vest in the applicable Mortgage
Loan Investor and shall be received and held by Servicer for the sole purpose of
servicing the Mortgage Loans and such retention and possession by Servicer is in
a custodial capacity only in trust for the exclusive benefit of the applicable
Mortgage Loan Investor as the owner of the related Mortgage Loans.  Servicing
Rights Owner acknowledges that Servicer will create electronically imaged
versions of the documents contained in the Servicing File and any and all hard
copies of such documents will be destroyed by Servicer in accordance with its
standard record retention policy, as may be amended from time to time to the
extent such destruction is not prohibited by Applicable Requirements.

 

The Servicer shall promptly notify the Servicing Rights Owner if it becomes
aware of any incorrect or missing information or documents relating to any
Mortgage Loan or Servicing File to the extent material to the servicing of a
Mortgage Loan and compliance with the Servicer’s obligations hereunder.

 

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2.03                             Books and Records

 

Servicer shall be responsible for maintaining, and shall maintain, a set of
books and records for the Mortgage Loans which shall be appropriately identified
in Servicer’s computer system to reflect the ownership of the Mortgage Loans by
the applicable Mortgage Loan Investor.  To the extent that original documents
are not required for purposes of realization of Liquidation Proceeds or
Insurance Proceeds and to the extent permitted by Applicable Requirements,
documents maintained by Servicer may be in the form of electronically imaged or
scanned documents or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques.

 

Subject to any contractual requirements of Servicer’s system vendor, the
Servicer shall provide the Servicing Rights Owner, its Affiliates and/or its
agents with access to one or more electronic portals to allow the Servicing
Rights Owner to monitor the Mortgage Loans.  Through such portals, the Servicing
Rights Owner shall be provided with access on demand to certain reports and data
referenced in this Agreement as further mutually agreed upon from time to time. 
The Servicer’s portals shall include the following data and documents:
(i) imaged Mortgage Loan Documents and Servicing File (to the extent held by PHH
on the initial Sale Date or any other individual Mortgage Loan Document
requested by the Servicing Rights Owner to be imaged which is not imaged as of
the initial Sale Date (it being understood that the Servicing Rights Owner shall
bear the expense of imaging in Mortgage Loan Documents and Servicing File in
excess of five hundred (500) Mortgage Loans per calendar quarter); (ii) imaged
copies of substantially all Mortgagor communications; (iii) records of
substantially all Mortgagor written communications; (iv) to the extent available
or reasonably requested by the Servicing Rights Owner to the extent not imaged
at the time of the Servicing Rights Owner’s request, imaged copies of all
litigation, bankruptcy and foreclosure documents related solely to each Mortgage
Loan (for the avoidance of doubt, such imaged copies of litigation, bankruptcy
and foreclosure documents will not include those unrelated to the Mortgage
Loans); (v) current servicing comments regarding all Mortgagor communications
and all activity related to each Mortgage Loan with sufficient detail to
understand the status of any issues; (vi) a document identifying any Default
Firm(s) engaged relating to the Mortgage Loan, if applicable; (vii) upon
request, call recordings; (viii) upon request, insurance, including lender paid
insurance, if applicable, hazard and flood; and (ix) a document identifying the
single point of contact.

 

2.04                             Delivery of Mortgage Loan Documents

 

Servicer shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Sections 5.01 promptly after their execution;
provided, however, that Servicer shall provide the Custodian with a certified
true copy of any such document submitted for recordation promptly after its
execution, and shall provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original promptly after
receipt thereof.

 

Except as provided herein, the original Mortgage Loan Documents for each
Mortgage Loan shall be retained by the Custodian pursuant to the Custodial
Agreement.  During the time that any such documentation is held by Servicer,
such possession is in trust for the benefit of  the

 

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applicable Mortgage Loan Investor, and Servicer shall return such documentation
to the Custodian upon the request of such Mortgage Loan Investor, Servicing
Rights Owner or the Custodian or when Servicer’s need therefore no longer
exists.

 

The Servicer shall not be responsible for any fees, expenses and costs of the
Custodian arising under the Custodial Agreement.

 

2.05                             Transfer of Mortgage Loans; Reconstitutions

 

Servicing Rights Owner shall have the right, without the prior written consent
of Servicer, to sell the one or more Servicing Rights in respect of any Mortgage
Loans (the “Offered Assets”) and, to the extent the prospective third party
purchaser elects not to retain the Servicer as the subservicer of Offered
Assets, (i) this Agreement shall terminate solely with respect to such Offered
Assets in accordance with Section 11.01(b), (ii) the Servicer shall cooperate in
transfer the servicing to such third party purchaser’s successor servicer and
(iii) with respect to the Offered Assets which actually were sold, the Servicing
Rights Owner shall pay the applicable Deboarding Fees on the applicable transfer
date to such third party purchaser’s successor servicer.  Notwithstanding the
foregoing, Servicing Rights Owner will afford Servicer an opportunity to review
the final bid the Servicing Rights Owner receives from prospective third party
purchasers of the Offered Assets which the Servicing Rights Owner anticipates to
accept (the “Final Bid”), including the purchase price, payment terms, closing
conditions and any financing terms.  Servicing Rights Owner will provide to
Servicer access to the same information regarding the potential sale as are
provided to the other bidders, when or promptly after such information is
provided to other bidders.  Servicing Rights Owner shall afford Servicer an
opportunity to bid for the Offered Assets for a period of two (2) Business Days
after Servicing Rights Owner discloses to Servicer the Final Bid from the
prospective third party purchaser(s) of the Offered Assets. If Servicing Rights
Owner determines that the terms and conditions of Servicer’s bid for the Offered
Assets represents the most favorable overall economic and contractual
arrangement to Servicing Rights Owner compared to the bids for the Offered
Assets from prospective third party purchasers and Servicer demonstrates to
Servicing Rights Owner’s satisfaction that it has sufficient financial resources
to close the purchase and sale of the Offered Assets upon such terms and
conditions within the time period set forth in the Final Bid, then Servicing
Rights Owner will make good faith efforts to consummate the purchase and sale of
the Offered Assets with Servicer upon such terms and conditions.

 

2.06                             Obligations of Servicing Rights Owner Prior to
a related Effective Date

 

Except with respect to any Initial Mortgage Loans, Servicing Rights Owner shall
take, or cause the Prior Servicer to take, the following actions with respect to
any Mortgage Loans (other than the Initial Mortgage Loans) prior to the related
Effective Date (or within such time as may otherwise be specified below) in
order to effect the transfer of the servicing and administration of the Mortgage
Loans which are not Initial Mortgage Loans to Servicer on such related Effective
Date.

 

(a)                                 Preliminary Test File.  On or prior to a
related Effective Date, if requested by Servicer, Servicing Rights Owner shall
forward, or cause the Prior Servicer to forward, to Servicer a preliminary test
file (including, as applicable, master file, escrow file, payee file,

 

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ARM master file, ARM history, all HMDA data required by Fannie Mae and Freddie
Mac, etc.) containing all of the Mortgage Loans as of the date mutually agreed
upon by Servicer and Servicing Rights Owner in all material respects.  The
preliminary test file shall include all field descriptions and record layouts;

 

(b)                                 Notice to Hazard Insurers.  Servicing Rights
Owner shall inform, or shall cause the Prior Servicer to inform, by written
notice all hazard insurance companies and/or their agents of the transfer and
request a change in the loss payee mortgage endorsement clause to Servicer’s
name. Servicing Rights Owner shall provide, or shall cause the Prior Servicer to
provide, Servicer with a copy of the notification letter and an officer’s
written certification that all hazard insurance companies have been notified by
an identical letter;

 

(c)                                  Notice to Mortgagors.  Servicing Rights
Owner shall mail, or shall cause the Prior Servicer to mail, to the Mortgagor of
each Mortgage Loan a letter advising the Mortgagor of the transfer of the
servicing of the related Mortgage Loan to Servicer as may be required under
Applicable Requirements, including the Real Estate Settlement Procedures Act.
Servicing Rights Owner shall provide, or shall cause the Prior Servicer to
provide, Servicer with a copy of one notification letter and a report containing
a listing of all Mortgage Loans receiving the notification as may be required
under Applicable Requirements, including the Real Estate Settlement Procedures
Act. In addition, Servicer shall:

 

(i)                                     Within fifteen (15) days following each
Servicing Transfer Date, deliver to each related Mortgagor a “Welcome Letter” in
accordance with Applicable Requirements.  Notwithstanding the above, the
Servicing Rights Owner, the Servicer, and the prior subservicer may agree to
send in accordance with Applicable Requirements a joint notification to the
related Mortgagors regarding the transfer of the servicing function to the
Servicer.  The Servicer and the Servicing Rights Owner agree that the form of
any notice sent to Mortgagors under this Section 2.06(c) shall be subject to
approval by the Servicing Rights Owner and the Servicer;

 

(ii)                                  furnish to each Mortgagor each notice
(including privacy notices) required to be provided to such Mortgagors in
accordance with Applicable Requirements and in form and substance mutually
agreed upon by the Servicing Rights Owner and the Servicer;

 

(iii)                               include in the related Servicing File a copy
of each notice furnished to a Mortgagor pursuant to this Section 2.06(c); and

 

(iv)                              notwithstanding the foregoing, except as
required by Applicable Requirements, no applicable notification shall be
required pursuant to this Section 2.06(c) to the extent that the Servicer is
already acting as the Servicer with respect to the Mortgage Loans.

 

(d)                                 ARM Adjustments.  With respect to each ARM
Mortgage Loan whose index value for any interest adjustment date is available on
or prior to the related Effective Date, Servicing Rights Owner shall make, or
shall cause the Prior Servicer to make, all such adjustments and shall inform
the related Mortgagors of such adjustments;

 

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(e)                                  Delivery of Books and Records.  Servicing
Rights Owner will, on or before the applicable Effective Date, deliver, or cause
to be delivered, to Servicer all of the books, records, data, files and Mortgage
Loan Documents, including records in a mutually agreed upon electronic indexed
form, reasonably required by Servicer to document and service each Mortgage
Loan; such books, records, data, files and documents contain all of the items
which are required by the Applicable Requirements to service the Mortgage Loans.

 

(f)                                   Real Estate Taxes.  In the event that any
real estate taxes or assessments in connection with a Mortgage Loan are
delinquent at the time of, or would become delinquent if not paid within 30 days
after, the applicable Effective Date, then Servicer shall not be responsible
hereunder for any penalties or interest resulting from such delinquency;
provided that Servicer shall be responsible for any such penalties and/or
interest incurred from such delinquency for any Initial Mortgage Loans in
accordance with the Purchase Agreement. Servicing Rights Owner shall either
(a) ensure that each first lien Mortgage Loan is covered by a tax service
contract with CoreLogic, Inc. or (b) if not so covered, then pay to Servicer a
one-time fee in the applicable amount set forth on Schedule A, in respect of
each such Mortgage Loan.  With respect to any Initial Mortgage Loans, Servicer
shall either (a) ensure that such Initial Mortgage Loan is covered by a tax
service contract with CoreLogic, Inc. or (b) if not so covered, at its sole
cost, then pay (without reimbursement thereof) the applicable amount to
establish such tax service contract.

 

(g)                                  Hazard Insurance.  In the event that there
is no hazard insurance policy covering the property securing a Mortgage Loan
that Servicer shall subservice hereunder at the time of, or if the coverage
under a hazard insurance policy shall lapse without payment of the required
premium within thirty (30) days after, the applicable Effective Date and such a
policy is required to be maintained under the Applicable Requirements, then in
no event shall Servicer be responsible hereunder for the absence of hazard
insurance coverage until thirty (30) days have elapsed since such applicable
Effective Date.

 

(h)                                 Flood Insurance Determination Contracts.  To
the extent required by Applicable Requirements, Servicing Rights Owner shall
obtain, at Servicing Rights Owner’s sole cost and expense, before the applicable
Effective Date, “life of loan” or “life-time” transferable flood insurance
determination contracts from CoreLogic, Inc. or ServiceLink on each Mortgage
Loan.  Servicing Rights Owner shall either (a) assign to Servicer, on or
promptly following the applicable Effective Date, the related certified and
guaranteed assignable flood insurance determination contracts Servicing Rights
Owner obtained for such Mortgage Loans or (b) pay to Servicer a one-time fee in
the applicable amount set forth on Schedule A for each Mortgage Loan transferred
to Servicer for subservicing hereunder which is not subject to such a flood
insurance determination contract.

 

(i)                                     Other Insurance.  In the event that the
monthly payments in connection with a Mortgage Loan to be subserviced by
Servicer hereunder include amounts to pay premiums for accident, health, and
life insurance, and similar types of personal insurance products, then at the
applicable Effective Date, Servicing Rights Owner shall include, or cause to be
included, a notice of such fact to Servicer.

 

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2.07                        MERS

 

With respect to any MERS Mortgage Loan (other than the Initial Mortgage Loans),
at the Servicing Rights Owner’s expense, Servicer shall update all required MERS
fields, with the cooperation of the Servicing Rights Owner, as necessary and
comply with all applicable requirements of MERS; and transfer of servicing to
Servicer.

 

2.08                        Transfer of Servicing

 

Except with respect to any Initial Mortgage Loans, the transfer of the servicing
obligations with respect to the Mortgage Loans to Servicer shall be in
accordance with the Servicing Transfer Instructions in all material respects.

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES OF THE SERVICER

 

3.01                             Representations and Warranties of Servicer

 

Servicer represents and warrants to Servicing Rights Owner that as of the
initial Sale Date and as of each Effective Date and/or such other date as set
forth herein:

 

(a)                                 Due Organization and Good Standing. 
Servicer (i) is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, (ii) has all licenses necessary to
carry on its business as now being conducted, (iii) is licensed, qualified and
in good standing under the laws of each state where a Mortgaged Property is
located if the laws of such state require licensing or qualification in order to
conduct business of the type conducted by Servicer and (iv) is in compliance
with the laws of any such state to the extent necessary to permit the servicing
of the Mortgage Loans in accordance with the terms of this Agreement;

 

(b)                                 Power and Authority; Enforceability. 
Servicer has the full power and authority to execute and deliver this Agreement,
and to enter into and consummate all transactions contemplated by this
Agreement. 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 Servicing
Rights Owner, constitutes a legal, valid and binding obligation of Servicer,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy and insolvency laws affecting the rights of creditors generally and
to general principles of equity (regardless of whether enforcement of such
remedies is considered in a proceeding in equity or law);

 

(c)                                  No Conflict.  The execution and delivery of
this Agreement by Servicer, the servicing of the Mortgage Loans by Servicer
hereunder, the consummation of any other of the transactions contemplated
hereunder, and the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of Servicer and will not (i) result in a breach of
any term or provision of the organizational documents of Servicer or
(ii) conflict with, result in a breach, violate, or result in a default under or
acceleration of, the terms of any material agreement, indenture or loan or
credit agreement or other material instrument to which Servicer

 

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is a party or by which it may be bound, or (iii) constitute a violation of any
Applicable Requirements including any statute, rule, regulation, order, judgment
or decree applicable to Servicer of any Governmental Authority having
jurisdiction over Servicer;

 

(d)                                 Ability to Service.  Servicer has the
facilities, procedures and experienced personnel necessary for the servicing of
mortgage loans of the same type as the Mortgage Loans.  Servicer does not
believe, nor does it have any cause or reason to believe, that it cannot perform
each and every obligation and covenant applicable to it contained in this
Agreement;

 

(e)                                  No Litigation Pending.  There is no action,
suit, proceeding or investigation pending or, to the best of Servicer’s
knowledge, threatened, against Servicer which, either in any one instance or in
the aggregate, if determined adversely to Servicer would adversely affect the
ability of Servicer to service the Mortgage Loans hereunder in accordance with
the terms; and

 

(f)                                   No Consent Required.  No consent,
approval, authorization or order of any Governmental Authority or body is
required for the performance by Servicer of or compliance by Servicer with this
Agreement, or if required, such approval has been obtained prior to the initial
Effective Date.

 

(g)                                  Agency Approvals.  The Servicer is an
approved servicer for, and in good standing with, each Agency and is a HUD and
VA approved mortgagee pursuant to Section 203 of the National Housing Act, and
shall maintain such approvals throughout the term of this Agreement.  No event
has occurred, including but not limited to, a change in insurance coverage, that
would make the Servicer unable to comply with eligibility requirements of each
Agency, or that would require notification to any Agency and, to the best of the
Servicer’s knowledge, there are no pending business issues with any Agency that
would likely materially adversely affect the ability of the Servicer to service
mortgage loans on behalf of such entities or to comply with Applicable
Requirements. Servicer has not received any written notice from an Agency that
it intends to terminate the Servicer’s status as an approved servicer.

 

(h)                                 MERS. The Servicer is a member of MERS in
good standing. The Servicer shall maintain a MERS quality assurance plan to
promote compliance with all MERS requirements and Applicable Requirements and
provide the Servicing Rights Owner with a copy of such plan upon request.

 

ARTICLE IV.

 

REPRESENTATIONS AND WARRANTIES OF THE SERVICING RIGHTS OWNER

 

4.01                             Representations and Warranties

 

Servicing Rights Owner represents and warrants to Servicer that as of the
initial Sale Date and each related Effective Date or as otherwise set forth
herein:

 

(a)                                 Due Organization and Good Standing.
Servicing Rights Owner (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, (ii) has all
licenses necessary to carry on its business as now being conducted, except for
such

 

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licenses, the absence of which individually or in the aggregate, would not have
a material adverse effect on the ability of Servicing Rights Owner to conduct
its business as it is presently conducted or the enforceability of any Mortgage
Loan, (iii) is licensed, qualified and in good standing under the laws of each
state where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
Servicing Rights Owner and (iv) is in compliance with the laws of any such state
to the extent necessary to permit the servicing of the Mortgage Loans in
accordance with the terms of this Agreement;

 

(b)                                 Power and Authority; Enforceability. 
Servicing Rights Owner has the full power and authority to execute and deliver
this Agreement, and to enter into and consummate all transactions contemplated
by this Agreement. Servicing Rights Owner 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 Servicer, constitutes a legal, valid and binding obligation of
Servicing Rights Owner, enforceable against it in accordance with its terms,
subject to applicable bankruptcy and insolvency laws affecting the rights of
creditors generally and to general principles of equity (regardless of whether
enforcement of such remedies is considered in a proceeding in equity or law);

 

(c)                                  No Conflict.  The execution and delivery of
this Agreement by Servicing Rights Owner, the consummation of any other of the
transactions contemplated hereunder, and the fulfillment of or compliance with
the terms hereof are in the ordinary course of business of Servicing Rights
Owner and will not (i) result in a breach of any term or provision of the
organizational documents of Servicing Rights Owner or (ii) conflict with, result
in a breach, violate, or result in a default under or acceleration of, the terms
of any material agreement, indenture or loan or credit agreement or other
material instrument to which Servicing Rights Owner is a party or by which it
may be bound, or (iii) constitute a violation of any Applicable Requirements
including any statute, rule, regulation, order, judgment or decree applicable to
Servicing Rights Owner of any Governmental Authority having jurisdiction over
Servicing Rights Owner;

 

(d)                                 No Litigation Pending.  There is no action,
suit, proceeding or investigation pending or, to the best of Servicing Rights
Owner’s knowledge, threatened, against Servicing Rights Owner which, either in
any one instance or in the aggregate, if determined adversely to Servicing
Rights Owner would adversely affect the ability of Servicing Rights Owner to
engage the Servicer to service the Mortgage Loans hereunder in accordance with
the terms; and

 

(e)                                  No Consent Required.  Except for approvals
required from the applicable Agency in connection with any Effective Date or
Servicing Transfer Date, no consent, approval, authorization or order of any
Governmental Authority is required for the performance by Servicing Rights Owner
of or compliance by Servicing Rights Owner with this Agreement, or if required,
such approval has been obtained prior to the initial Effective Date or Servicing
Transfer Date.

 

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4.02                             Representations and Warranties of Servicing
Rights Owner Regarding Individual Mortgage Loans.

 

As to each Mortgage Loan other than any Initial Mortgage Loan, Servicing Rights
Owner represents and warrants and covenants to Servicer as of the related
Effective Date:

 

(a)                                 Mortgage Loans as Described.  The
information set forth in the related Mortgage Loan Schedule and the information
contained on the New Loan Data File delivered to the Servicer is true and
correct in all material respects; and

 

(b)                                 Ownership.  The Servicing Rights Owner is
the owner of the Servicing Rights associated with each Mortgage Loan.

 

ARTICLE V.

 

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

 

5.01                             Appointment of Servicer; Servicing Standards;
Additional Documents; Consent of Servicing Rights Owner

 

(a)                                 Servicer hereby agrees to service the
Mortgage Loans from and after the related Effective Date through the termination
of this Agreement, as applicable, pursuant to the terms and provisions of this
Agreement and Applicable Requirements; provided, however, in the event of an
explicit conflict between the terms of this Agreement and the Investor
Guidelines in respect of the Mortgage Loans, the terms and conditions of the
Investor Guidelines shall govern and control to the extent of such conflict.

 

(b)                                 Servicer shall maintain all written
regulations, policies and procedures necessary for compliance with Applicable
Requirements, including, without limitation, policies and procedures to ensure
compliance with unfair and deceptive acts and practices laws, including the
proper crediting of payments and foreclosure proceedings.  Servicer shall update
such regulations, policies and procedures as required and shall provide copies
thereof to Servicing Rights Owner or of any update with respect to collection or
loss mitigation procedures promptly following the implementation of a material
change.

 

(c)                                  Upon the Servicing Rights Owner’s request,
the Servicer shall reasonably cooperate with the Servicing Rights Owner and any
backup servicer designated by the Servicing Rights Owner, including, but not
limited to, working and coordinating with such backup servicer’s personnel to
provide applicable mapping system fields, data checks, conversion routines and
other assistance to enable such backup servicer to receive readable data from
the Servicer on a periodic basis, which frequency shall be determined by the
Servicing Rights Owner.  The Servicing Rights Owner shall reimburse the Servicer
for its reasonable, actual and documented out-of-pocket or internally allocated,
as applicable, costs and expenses incurred by the Servicer in connection with
its cooperation with such backup servicer.

 

(d)                                 The Servicer shall maintain its current
internal quality control program that reviews, on a regular basis, its
compliance with and conformity to all Applicable Requirements (including all
applicable regulations, rules, directives and published guidance of

 

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the CFPB, as such may be amended, modified or supplemented from time to time) to
which the Servicer is subject.  The program shall include evaluating and
monitoring the overall quality of the Servicer’s loan servicing and origination
activities, including collection call programs, in accordance with Accepted
Servicing Practices and this Agreement.

 

(e)                                  On a calendar quarterly basis (no later
than twenty (20th) day following the end of each calendar quarter), the Servicer
shall provide to the Servicing Rights Owner (i) a written summary (in form and
substance mutually agreed upon the Servicing Rights Owner and Servicer) setting
forth material findings of such quality control program relevant to the
servicing of the Mortgage Loans relating to (x) the first two calendar months of
calendar quarter immediately preceding the calendar quarter in which such
summary is provided and (y) the last calendar month of the second calendar
quarter immediately preceding the calendar quarter in which such summary is
provided and (ii) a copy of its quality control program.  The quality control
will include tests of business process controls and loan level sampling and
diligence.

 

(f)                                   The Servicer shall track any issues that
emerge from the quality control reviews of itself and its Vendors, Off-shore
Vendors to ensure that the Servicing Rights Owner is promptly notified of any
potential material issues on a calendar quarterly basis (no later than 30 days
following the end of each calendar quarter) and that such potential material
issues are timely addressed and remediated.  The Servicer shall provide the
Servicing Rights Owner with notice of any material modifications to the quality
control program as promptly as possible and in any event not later than on a
calendar quarterly basis (no later than 30 days following the end of each
calendar quarter) following the implementation of such modification, in which
case the Servicing Rights Owner shall have the option to perform a due diligence
review of the revised quality control program on reasonable notice to the
Servicer.

 

(g)                                  Where applicable, the Servicer will comply
with the National Housing Act, as amended, and with the Servicemembers Civil
Relief Act of 2003, as amended, and with all rules and regulations issued under
each of those statutes, and with requirements of Insurers, including
requirements concerning the giving of notices and submitting of claims required
to be given or submitted pursuant to Applicable Requirements.

 

(h)                                 The Servicing Rights Owner expressly assumes
the full risk of ownership on all Servicing Advances (including, without
limitation, arising out of denials by any Agency or Investor of reimbursement of
any Servicing Advance where the Servicer has performed its obligations in
accordance with Applicable Requirements and the standards set forth on
Exhibit 15). The Servicer shall be liable for denials by any Agency or Investor
of reimbursement of any Servicing Advance where such Servicing Advance is not
reimbursed because the Servicer has failed to perform its obligations in
accordance with Applicable Requirements and the standards set forth on
Exhibit 15.

 

5.02                             Collection of Mortgage Loan Payments

 

Continuously from the applicable Effective Date with respect to a Mortgage Loan
until (i) the principal and interest on such Mortgage Loan is paid in full or
(ii) servicing of such Mortgage Loan is transferred to another servicer,
Servicer will proceed diligently to collect all

 

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payments due under such Mortgage Loan when the same shall become due and payable
and shall, to the extent such procedures shall be consistent with the Applicable
Requirements.

 

5.03                             Additional Service Request

 

If fulfilling Servicing Rights Owner’s request would require Servicer to perform
activities that are not customarily performed by Servicer under similar
servicing arrangements and Servicer would incur out-of-pocket costs or
internally allocated costs, Servicer shall promptly notify Servicing Rights
Owner of the costs related thereto, with a statement of work identifying such
work and costs related thereto.  Servicing Rights Owner, following receipt of
notification from Servicer of such statement of work, shall either (x) instruct
Servicer to proceed with fulfilling such request by execution of such statement
of work and Servicing Rights Owner shall be responsible for reimbursing Servicer
for the costs identified in such statement of work after the fulfillment of such
request to Servicing Rights Owner’s reasonable satisfaction or (y) decline to
make such request to Servicer.  Servicing Rights Owner shall pay such invoiced
amount no later than thirty (30) days after Servicing Rights Owner’s receipt of
the invoice from Servicer.

 

5.04                             Establishment of Collection Account; Deposits
in Collection Account

 

Servicer shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Collection Accounts, each of
which shall be an Eligible Account.  The creation or designation of any
Collection Account shall be evidenced by a letter agreement in the form of
Exhibit 3 attached hereto, which shall be furnished to Servicing Rights Owner
upon Servicing Rights Owner’s request.  Servicer shall make such deposits to
each Collection Account in accordance with the Applicable Requirements (and, in
all cases, within two (2) Business Days of the Servicer’s receipt thereof);
provided that payments in the nature of Ancillary Fees (other than Float
Benefit) need not be deposited by Servicer in the Collection Account, all of
which shall accrue to the Servicer and be retained by Servicer as additional
compensation

 

Servicing Rights Owner shall be entitled to all Float Benefit from funds held in
the Collection Account. To the extent that the Float Benefit constitutes
economic credits in a calendar month, Servicer shall pay the same to Servicing
Rights Owner no later than twelve (12) days following such calendar month.

 

5.05                             Permitted Withdrawals from the Collection
Account

 

Servicer may, from time to time in accordance with the provisions hereof,
withdraw amounts from the Collection Account for the following purposes (without
duplication):

 

(1)                                 to make payments in the manner provided for
in Section 6.01;

 

(2)                                 to remove any amounts deposited into the
Collection Account in error;

 

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(3)                                 to clear and terminate the Collection
Account in the event a new Collection Account has been established, or upon the
termination of this Agreement, with any funds contained therein to be
distributed in accordance with the terms of this Agreement; and

 

(4)                                 except for disputed amounts, to reimburse
itself for any amounts payable by the Servicing Rights Owner to the Servicer as
to which the Servicing Rights Owner has failed to pay the Servicer when and as
due in accordance with this Agreement; provided that the Servicer has given the
Servicing Rights Owner at least ten (10) days’ notice of any such failure to
pay.

 

Servicer shall keep and maintain a separate, detailed accounting, on a Mortgage
Loan-by-Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account pursuant to this Section 5.05.

 

5.06                             Establishment of Escrow Accounts; Deposits in
Escrow

 

Servicer shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan which constitute Escrow Payments separate and apart from any
of its own funds and general assets and shall establish and maintain one or more
Escrow Accounts, each of which shall be an Eligible Account.  The creation of
any Escrow Account shall be evidenced by a letter agreement in the form shown on
Exhibit 4 attached hereto, which shall be furnished to Servicing Rights Owner
upon Servicing Rights Owner’s request.

 

Servicer shall make such deposits to each Escrow Account in accordance with the
Applicable Requirements (and, in all cases, within two (2) Business Days of the
Servicer’s receipt thereof).

 

Servicing Rights Owner shall be entitled to all Float Benefit from funds held in
the Escrow Account.  To the extent that the Float Benefit constitutes economic
credits in a calendar month, Servicer shall pay the same to Servicing Rights
Owner no later than twelve (12) days following such calendar month.  To the
extent that Servicer uses its own funds to fund any interest on escrowed funds
required by Applicable Regulations to be paid to the Mortgagor, Servicing Rights
Owner shall reimburse the Servicer or any interest on escrowed funds required by
Applicable Regulations to be paid to the Mortgagor upon invoice therefor.

 

5.07                             Permitted Withdrawals From Escrow Accounts

 

Withdrawals from any Escrow Account may be made by Servicer in accordance with
the applicable Investor Guidelines.  If Servicer collects any late payments or
collections from the Mortgagor which had previously been reimbursed to Servicer
by Servicing Rights Owner or from the Collection Account, Servicer shall credit
such amount against Servicing Rights Owner’s monthly Servicing Advance
reimbursement obligation.

 

5.08                             Payment of Taxes, Insurance and Other Charges

 

With respect to each Mortgage Loan, Servicer shall maintain accurate records
reflecting the status of taxes, assessments, and other charges which are or may
become a lien upon the

 

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Mortgaged Property and the status of fire and hazard insurance coverage and
shall make payment thereof, if and as required, in accordance with the
Applicable Requirements, such payments (if not from escrowed Mortgagor funds)
constituting Servicing Advances hereunder.

 

5.09                             Transfer of Accounts

 

The Escrow Account and Collection Account shall be maintained at a financial
institution designated by Servicing Rights Owner that reasonably satisfies the
Servicer’s operational guidelines; provided that, to the extent the Servicing
Rights Owner directs the Servicer to change such accounts to a different
depository institution from time to time that meets the Eligible Account
requirements more than one (1) time in any calendar year, the Servicing Rights
Owner shall pay any reasonable, actual and documented out-of-pocket or
internally allocated, as applicable, costs of for such additional change in
depository institution.

 

Servicer may transfer, upon the prior written consent of Servicing Rights Owner,
the Collection Account or any Escrow Account to a different depository
institution from time to time that meets the Eligible Account requirements.

 

5.10                             Maintenance of Hazard Insurance

 

Servicer shall cause to be maintained for each Mortgage Loan and REO Property
fire and hazard insurance with extended coverage as is customary in the area
where the Mortgaged Property is located in an amount consistent with Applicable
Requirements.

 

Any amounts collected by Servicer under any such policies other than amounts to
be deposited in the Escrow Account and applied to the restoration or repair of
the Mortgaged Property or REO Property, or released to the Mortgagor in
accordance with Accepted Servicing Practices, shall be deposited in the
Collection Account within two (2) Business Days after receipt and identification
thereof (which identification shall occur, in no event, later than five
(5) Business Days following receipt).

 

Any amounts advanced by Servicer pursuant to this Section 5.10 shall be deemed
Servicing Advances.

 

5.11                             Buydown Mortgage Loans

 

With respect to each Buydown Mortgage Loan, Servicing Rights Owner shall have
responsibility or obligation to deposit into the Escrow Account any required
Buydown Funds. With respect to each Buydown Mortgage Loan, Servicer will
distribute to the Mortgage Loan Investor on each Remittance Date an amount of
Buydown Funds required under the terms of the Mortgage Loan.

 

5.12                             Fidelity Bond; Errors and Omissions Insurance

 

The Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy and a mortgage impairment policy, with
broad coverage with financially responsible companies that meet the current
requirements of each Mortgage Loan Investor on all officers, employees or other
Persons acting in any capacity with regard to the

 

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Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The fidelity bond and errors and omissions insurance shall
protect and insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Persons.
Such fidelity bond and errors and omissions insurance policy 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
Applicable Requirements and the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby.

 

5.13                             Realization Upon Defaulted Serviced Mortgage
Loans and REO Properties

 

In the event that any payment due under any Mortgage Loan is not paid when the
same becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, consistent with Section 5.01 hereof,
Servicer shall take such action as shall be required in accordance with the
Applicable Requirements. If the Applicable Requirements require the consent or
approval of any Person, (other than the Servicing Rights Owner) Servicer, on
behalf of Servicing Rights Owner, shall take such action, if any, to obtain any
such consent or approval.

 

5.14                             Management of REO Properties

 

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 required by applicable Investor Guidelines; provided that,
unless required in accordance with Investor Guidelines (it being understood that
the Servicer shall provide notice to the Servicing Rights Owner within five
(5) Business Days of a change in the Investor Guidelines that require the title
to be conveyed in the name of the Servicing Rights Owner to
Group_NRM_OPS@fortress.com or such other email address as is updated from time
to time by the Servicing Rights Owner), in no event shall the Servicer have
title to the Mortgaged Property conveyed in the name of the Servicing Rights
Owner without the Servicing Rights Owner’s prior written consent. To the extent
that amounts on deposit in the Collection Account are insufficient for funding
the management of REO Properties, Servicer shall, subject to Section 5.13,
advance the amount of funds required to cover the shortfall with respect thereto
and shall be entitled to reimbursement of such Servicing Advance in accordance
with Section 6.03.

 

Prior to transferring any REO Property to the Mortgage Loan Investor, the
Servicer shall comply with all Applicable Requirements related to the
maintenance of such property. The Servicer shall maintain on each REO Property
monthly fire and hazard insurance with extended coverage in an amount that is at
least equal to the maximum insurable value of the improvements that are a part
of such property and, to the extent required and available under the national
flood insurance program, flood insurance, all in the amounts and with such
coverage as required under Applicable Requirements.

 

Solely with respect to any REO Property which was converted from a Private Label
Mortgage Loan, the Servicing Rights Owner may direct the Servicer to utilize an
REO manager identified by the Servicing Rights Owner; provided that, to the
extent such REO manager identified by the Servicing Rights Owner is not
currently a Vendor of the Servicer, the Servicer

 

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shall engage such REO manager utilizing its vender management system and will
promptly notify the Servicing Rights Owner upon the Servicer’s approval or
rejection of such REO manager.

 

5.15                             HELOC Loan Advances

 

To the extent that Servicer funds any HELOC Loan Advance, Servicer shall use its
commercially reasonable efforts to obtain reimbursement in accordance with the
applicable Servicing Agreement and, if any such HELOC Loan Advance is not
reimbursed from the related HELOC Loan investor, the Servicer shall provide
notice thereof and the Servicer shall bill the Servicing Rights Owner for such
funding as a Servicing Advance under this Agreement on a monthly basis. At any
time, to the extent permitted under Applicable Requirements, the Servicer shall
freeze future draws under such HELOC Loan and, if such freezing is not
permitted, the Servicer shall fund future HELOC Loan Advances on such HELOC Loan
and be reimbursed for the same as Servicing Advances under this Agreement in
each case to the extent the Servicer is unable to obtain reimbursement from the
related HELOC Loan investor.

 

5.16                             Engagement of Contractors

 

(a)                                 Exhibit 13 will set forth the following
lists (in a format reasonably acceptable to the Servicing Rights Owner):
(i) Vendors (excluding Off-shore Vendors) that the Servicer engages on a
platform-wide basis to which the Servicer has assigned a tier 1 or tier 2 risk
tier rating, a summary of activities for each such Vendor and the applicable
risk tier the Servicer has assigned such Vendor, (ii) Off-shore Vendors that the
Servicer engages on a platform-wide basis to which the Servicer has assigned a
tier 1 or tier 2 risk tier rating, a summary of activities for each such Vendor
and the applicable risk tier the Servicer has assigned such Off-shore Vendor,
(iii) Default Firms engaged by the Servicer for foreclosures only which the
Servicer has assigned a tier 1 or tier 2 risk tier rating and identifying the
applicable risk tier the Servicer has assigned such Default Firm and
(iv) Default Firms engaged by the Servicer for litigation only (excluding
foreclosures) (collectively, the “Vendor List”).

 

(b)                                 From time to time, the Servicer may engage
Vendors to provide services to the Servicer that are related to the Mortgage
Loans.  On a calendar quarterly basis (no later than 30 days following the end
of each calendar quarter), the Servicer shall notify the Servicing Rights Owner
of any new Vendors and/or Default Firms engaged to provide services with respect
to the Mortgage Loans.  In the event any such additional Vendor and/or Default
Firm used by Servicer or any Off-shore Vendor is identified by the Servicing
Rights Owner as having been materially deficient relating to the services
provided that relate to the Mortgage Loans in the reasonable judgment of the
Servicing Rights Owner, the Servicing Rights Owner shall notify the Servicer
with its concerns of such Vendor and/or Default Firm.  The Servicer shall
promptly respond to the Servicing Rights Owner and the parties hereto shall
cooperate in good faith to resolve the Servicing Rights Owner’s concerns and/or
findings relating to such Vendor and/or Default Firm, including but not limited
to determining if such material deficiencies can be corrected or to replace such
Vendor or Default Firm, as applicable, with another Vendor or Default Firm, as
applicable, mutually acceptable to the parties and in accordance with Applicable
Requirements.  In addition, the Servicer shall promptly notify the Servicing
Rights Owner of any material deficiencies with respect to any Vendor and/or
Default Firm used by the Servicer with

 

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respect to any Mortgage Loan.  The Servicer shall promptly notify the Servicing
Rights Owner of any material deficiencies with respect to any Vendor and/or
Default Firm used by the Servicer with respect to any Mortgage Loan.

 

(c)                                  The Servicer shall oversee all Vendors,
Off-shore Vendors and Default Firms on the Vendor List in accordance with the
Vendor Oversight Guidance and its third-party management policy, and require
that all Vendors’, Off-shore Vendors’ and Default Firms’ on the Vendor List
policies and procedures relating to services provided with respect to this
Agreement comply with all Applicable Requirements, the Vendor Oversight Guidance
and the servicing standards consistent with this Agreement.  Solely as it
relates to violation by a Vendor that adversely affects the Mortgage Loans or
any Mortgagor which the Servicer knows or should have reasonably known, the
Servicer shall provide to the Servicing Rights Owner, within twenty-one (21)
Business Days therefrom, (i) notice of any violations  by any Vendor, Off-shore
Vendor and/or Default Firm under the Vendor Oversight Guidance, the servicer’s
third-party management policy and/or Applicable Requirements and (ii) a summary
and action-plan by the Servicer detailing how such violation(s) will be
remediated.  The Servicer shall provide the Servicing Rights Owner with a
searchable electronic copy of the Servicer’s then current third-party management
policy on a calendar quarterly basis (no later than 30 days following the end of
each calendar quarter) via electronic mail, the Servicer’s website and/or a DVD
or other portable storage device, provided, however, that the Servicer shall
provide the Servicing Rights Owner with notice of any material modifications to
the third-party management policy as promptly as possible and in any event not
later than on a calendar quarterly basis (no later than 30 days following the
end of each calendar quarter) following the implementation of such modification,
in which case the Servicing Rights Owner shall have the option to perform a due
diligence review of the revised third-party management policy on reasonable
notice to the Servicer.

 

(d)                                 Any Vendor, Off-shore Vendor and/or Default
Firms engaged by Servicer shall be engaged on commercially reasonable, arm’s
length basis and compensation consistent with Applicable Requirements.

 

(e)                                  All Default Firms to be used in connection
with the servicing and administration of the Mortgage Loans and REO Properties
shall be engaged in accordance with Applicable Requirements.

 

(f)                                   The Servicer shall conduct periodic
reviews of the Vendors, Off-shore Vendors and Default Firms on the Vendor List
that are involved in performing servicing activities related to this Agreement
in accordance with the Vendor Oversight Guidance and the Servicer’s policies and
procedures to confirm compliance with respect to the terms of this Agreement and
Applicable Requirements.  The Servicer shall maintain a risk management program
that establishes appropriate controls in place to monitor the Servicer’s
Vendors, Off-shore Vendors and Default Firms.  This program will include
evaluating Default Firms used by the Servicer for compliance with Applicable
Requirements, including all compensation arrangements with such Default Firms
are consistent with this Agreement and Applicable Requirements, and as part of
the Servicer’s quality control program, verification of sample documents filed
or otherwise utilized by such firms in any foreclosure or bankruptcy proceeding
or other foreclosure-related litigation.  During such periodic reviews, the
Servicer shall confirm

 

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that the Vendors, Off-shore Vendors and Default Firms providing services with
respect to this Agreement are not subject to litigation or other enforcement
actions that could have a material effect on such Vendor’s, Off-shore Vendor’s
and/or Default Firm’s financial viability or reputation.  On a calendar
quarterly basis (no later than 30 days following the end of each calendar
quarter), the Servicer shall provide to the Servicing Rights Owner the results
of the periodic reviews completed on any Vendors, Off-shore Vendors and Default
Firms on the Vendor List during such calendar quarter, which shall include
performance scorecards (where applicable), risk rating and risk-tier assignment
system.  The Servicer shall provide the Servicing Rights Owner with notice of
any material modifications to the Servicer’s scorecarding, risk-rating, or
risk-tiering methodology as promptly as possible and in any event not later than
on a calendar quarterly basis (no later than 30 days following the end of each
calendar quarter) following the implementation of such modification, in which
case the Servicing Rights Owner shall have the option to perform a due diligence
review of the revised Servicer’s scorecarding, risk-rating, or risk-tiering
methodology on reasonable notice to the Servicer.

 

(g)                                  The Servicer shall oversee all Vendors,
Off-shore Vendors and Default Firms on the Vendor List in accordance with the
Vendor Oversight Guidance and its third-party management policy.  If reasonably
necessary for the Servicing Rights Owner to comply with the requirements of any
Governmental Authority that exercises authority over the Servicing Rights Owner,
the Servicer shall, unless explicitly prohibited under Applicable Requirements
or under the applicable Vendor, Off-shore Vendor or Default Firm contract, at
the request of the Servicing Rights Owner, provide Servicing Rights Owner with
copies of any contracts, by or with any Vendors, Off-shore Vendors and/or
Default Firms on the Vendor List and any reports, evaluations, reviews or
assessments with respect to such contractors.

 

(h)                                 In accordance with the terms and conditions
of Servicer’s agreement with the applicable Vendor, Off-shore Vendor and/or
Default Firm, Servicer shall satisfy in a timely manner its financial
obligations to the Vendors, Off-shore Vendors and Default Firms providing
services with respect to this Agreement to the extent such financial obligation
is required to be made under such agreement.  Servicer shall maintain
appropriate controls to ensure that (i) compensation paid to the Vendors,
Off-shore Vendors and Default Firms on the Vendor List providing foreclosure
services with respect to the Mortgage Loans is based on a method that is
consistent with Applicable Requirements and considers the accuracy, completeness
and legal compliance of foreclosure filings and (ii) that such services are
provided only as frequently as reasonably necessary in light of the
circumstances, and, in the case of both (i) and (ii) above, is not based solely
on increased foreclosure volume or meeting processing timelines

 

5.17                             Other Services

 

(a)                                 The Servicer shall identify a Servicing
Officer with respect to the Mortgage Loans, who shall serve as the principal
point of contact for the Servicing Rights Owner for purposes of answering
questions with respect to the Subservicing pursuant to this Agreement.  The
Servicer will provide prompt notice to the Servicing Rights Owner if a change
occurs with the Servicing Officer.

 

(b)                                 The Servicer shall provide notice to the
Servicing Rights Owner no later than two (2) Business Days after receipt by the
office of Servicer’s general counsel of notice

 

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from any Agency, Insurer or Governmental Authority of an inquiry relating to an
alleged violation of Applicable Requirements with respect to any Mortgage Loans
that could reasonably result in a sanction, fee or other liability to the
Servicing Rights Owner or otherwise materially adversely affect the Servicing
Rights Owner or the Servicer’s ability to perform its obligations under this
Agreement, including, but not limited to, any allegations of discrimination by
the Servicer and any civil investigative demand or request for information,
unless disclosing such inquiry to the Servicing Rights Owner is expressly
prohibited by such entity or by Applicable Requirements and (ii) promptly
provide a copy (redacted as necessary to the extent providing unredacted copies
is expressly prohibited by such entity or by Applicable Requirements) of any
such allegation, demand or inquiry to the Servicing Rights Owner, unless
providing such redacted copy is expressly prohibited by such entity or by
Applicable Requirements, in which case Servicer shall provide to Servicing
Rights Owner a detailed summary of such materials in writing or verbally, in
each case unless such disclosure is expressly prohibited by such entity or by
Applicable Requirements.  The Servicer shall cooperate with the Servicing Rights
Owner to respond promptly and completely to any such allegations or inquiries
and similarly to any such allegations or inquiries received by the Servicing
Rights Owner.

 

(c)                                  The Servicer shall provide notice to the
Servicing Rights Owner no later than five (5) Business Days after receipt by the
office of the Servicer’s general counsel of notice or knowledge that an
investigation of the Servicer’s servicing practices by any Governmental
Authority relating to an alleged violation of Applicable Requirements with
respect to any Mortgage Loans has determined that material deficiencies in
servicing performance or violation of Applicable Requirements has occurred,
unless expressly prohibited by the related Governmental Authority or by
Applicable Requirements.  The Servicer shall, upon request of the Servicing
Rights Owner, confer with the Servicing Rights Owner to advise the Servicing
Rights Owner of the status of any such investigation.

 

(d)                                 The Servicer shall provide notice to the
Servicing Rights Owner no later than five (5) Business Days after receipt by the
office of the Servicer’s general counsel of notice or knowledge if (i) the
Servicer reasonably believes that a Governmental Authority is reasonably likely
to suspend, revoke or limit any license or approval necessary for the Servicer
to service the Mortgage Loans in accordance with the terms of this Agreement or
(ii) a special investigation or non-routine exam of the Servicer commenced by a
Governmental Authority is reasonably likely to materially and adversely affect
the Mortgage Loans, in each case, unless expressly prohibited by the related
Governmental Authority or by Applicable Requirements.  The Servicer shall, upon
request of the Servicing Rights Owner, confer with the Servicing Rights Owner to
advise the Servicing Rights Owner of the status of any such potential action or
investigation.

 

(e)                                  Within five (5) Business Days after receipt
by the office of the Servicer’s general counsel of the final reports or findings
with respect to any investigation referenced in clauses (c) or (d) above, the
Servicer shall deliver to the Servicing Rights Owner a copy of any such reports
and/or findings relating to any material deficiencies in servicing performance
or violations of Applicable Requirements (redacted as necessary to the extent
providing unredacted copies is expressly prohibited by such entity or by
Applicable Requirements, unless providing such redacted copy is expressly
prohibited by such entity or by Applicable Requirements, in which case Servicer
shall provide to Servicing Rights Owner a detailed summary of such materials in
writing or verbally, in each case unless such disclosure is expressly prohibited
by

 

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such entity or by Applicable Requirements).  Within five (5) Business Days of
the Servicer’s general counsel’s receipt, Servicer shall provide the Servicing
Rights Owner a copy of any consent decree terms and/or any proposed consent
decree terms in connection with any investigation or settlement negotiations of
the Servicer’s servicing practices by any Governmental Authority (redacted as
necessary to the extent providing unredacted copies is expressly prohibited by
such Governmental Authority or by Applicable Requirements, unless providing such
redacted copy is expressly prohibited by such entity or by Applicable
Requirements, in which case Servicer shall provide to Servicing Rights Owner a
detailed summary of such materials in writing or verbally, in each case unless
such disclosure is expressly prohibited by such Governmental Authority or by
Applicable Requirements).

 

(f)                                   Reserved.

 

(g)                                  The Servicer shall maintain a log of all
“qualified written requests” (as such term is used in the Real Estate Settlement
Procedures Act) relating to the Mortgage Loans, records of all “level 1” and
“level 2” escalated telephone complaints related to the Mortgage Loans and a log
of all “level 3” escalated telephone complaints related to the Mortgage Loans.
The Servicer shall provide copies of such records and logs and copies of any
correspondence or documentation relating to any items included in such logs no
later than 30 days following the end of each calendar quarter, or reasonably
promptly upon reasonable request the Servicing Rights Owner.

 

(h)                                 The Servicer shall maintain a MERS quality
assurance plan to promote compliance with all MERS requirements and Applicable
Requirements and provide the Servicing Rights Owner with a copy of such plan
upon request.  The Servicer shall provide the Servicing Rights Owner with prompt
notice of any material modification to its MERS quality assurance plan made
after the date hereof and agrees to cooperate in good faith in addressing any
questions or concerns of the Servicing Rights Owner regarding such
modification.  The Servicer shall cooperate with any audit by the Servicing
Rights Owner with respect to any Mortgage Loan registered with MERS and
compliance with the MERS requirements, including providing access to any
relevant documentation or information in connection therewith.

 

5.18                             Service Level Agreements.

 

(a)                                 The Servicer shall comply with the Service
Level Agreements (“SLAs”) as set forth from time to time on Exhibit 11, or as
modified pursuant to this Section 5.18; provided, however, that the Servicer
will not be responsible for delays, errors or omissions caused by the Servicing
Rights Owner or any verifiable factors outside of the Servicer’s control.

 

(b)                                 The Servicer shall report the Servicer’s
actual results with respect to the SLAs in the form of report and
timeline(s) described in Exhibit 12.  The Servicing Rights Owner and the
Servicer shall cooperate in good faith to resolve any questions or issues
regarding the SLAs and the Servicer’s performance with respect to such SLAs.

 

(c)                                  At either party’s request, the Servicing
Rights Owner and the Servicer shall review the SLAs and any proposed
modifications to the SLAs (including the related tools

 

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and methodologies for measuring or calculating compliance with such SLAs). Such
modifications shall become effective when acknowledged in writing and signed by
both parties.

 

(d)                                 The remedy for failure to satisfy any SLAs
shall be as set forth in the SLAs; provided that, for the avoidance of doubt,
where the failure to satisfy any SLAs is otherwise a breach of this Agreement,
nothing herein shall restrict or limit any rights or remedies available to the
Servicing Rights Owners under this Agreement or Applicable Requirements.

 

5.19                             Power of Attorney.

 

Upon request of Servicer, the Servicing Rights Owner shall execute a mutually
agreed upon number of limited powers of attorney substantially in the form set
forth in Exhibit 9 hereto and provide such original executed limited powers of
attorney to the Servicer for use in connection with the servicing activities
contemplated in this Agreement.  The Servicing Rights Owner agrees to provide
additional original executed limited powers of attorney as may be requested by
the Servicer from time to time.

 

5.20                             Repurchase Facilitation.

 

The Servicer shall promptly notify the Servicing Rights Owner if it becomes
aware of any repurchase claim by the applicable Agency with respect to any
Mortgage Loan and shall cooperate with any reasonable requests of the Servicing
Rights Owner for information with respect to such Mortgage Loan and in
connection with coordinating the repurchase claim (including, but not limited
to, providing copies of related collection system comments) and delivery of the
applicable Mortgage Loan file and related documents to the Servicing Rights
Owner or its designee with respect to such repurchase transaction.  Once the
rebuttal process has been completed and the related Agency requires repurchase
of the related Mortgage Loan, unless Servicer is required to repurchase such
Mortgage Loan pursuant to this Section 5.20 or under the Purchase Agreement, the
Servicing Rights Owner shall repurchase the related Mortgage Loan or deliver to
the Servicer the applicable repurchase price amount in order to be drafted by or
remitted to the applicable Agency.  Upon such repurchase, unless otherwise
mutually agreed upon, the Servicing Rights Owner or its designee shall take
immediate title to the applicable Mortgage Loan.

 

In the event any repurchase claim by the applicable Agency with respect to any
Mortgage Loan arises out of or relates to a breach of the representations,
warranties or covenants of Servicer under this Agreement, Servicer shall
(i) repurchase such Mortgage Loan from the applicable Agency and (ii) repurchase
the related Servicing Rights from Purchaser in an amount equal to Servicing
Rights Reimbursement Price (as defined in the Purchase Agreement).  In
connection therewith, Servicer and Servicing Rights Owner shall work together to
facilitate such repurchase by the Servicer in accordance with Applicable
Requirements.

 

5.21                             FHA/VA Loan Servicing Provisions.

 

Notwithstanding anything set forth to the contrary in this Agreement, the
Servicer shall service VA Loans in strict compliance with the VA Regulations and
the Servicer shall diligently seek to mitigate losses by utilizing applicable
remedies in accordance with the VA Regulations.

 

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Notwithstanding anything set forth to the contrary in this Agreement, the
Servicer shall service FHA Loans in strict compliance with the following
provisions:

 

(i)                                     Servicer shall service the Mortgage
Loans in accordance with the provisions provided in this Agreement including, in
the case of FHA Loans, taking all actions by a mortgagee in accordance with FHA
Regulations.  The Servicer shall not (unless the Mortgagor is in default or such
default is, in the judgment of the Servicer, reasonably foreseeable) permit any
modification that would in the case of FHA Loans, affect the FHA Insurance
Contract with respect to such Mortgage Loan.

 

(ii)                                  In servicing and administering the FHA
Loans, the Servicer shall comply strictly with the National Housing Act and the
FHA Regulations, and administrative guidelines issued thereunder or pursuant
thereto (insofar as the same apply to any Mortgage Loan) and, to the extent
permitted hereunder, promptly discharge all of the obligations of the mortgagee
thereunder.

 

(iii)                               In the event that any payment due under any
FHA Loan serviced by the Servicer pursuant to this Agreement becomes Delinquent,
the Servicer shall take all such actions as are in the best interests of the
applicable Investor and permitted under any applicable FHA loss mitigation
proceedings.

 

ARTICLE VI.

 

REPORTS; REMITTANCES; ADVANCES

 

6.01                             Remittances to Mortgage Loan Investor and
Servicing Rights Owner

 

(a)                                 On each Remittance Date, Servicer shall
remit to the related Mortgage Loan Investor amounts in the Collection
Account(s) to the extent required in accordance with the applicable Investor
Guidelines.

 

(b)                                 On each SRO Distribution Date, Servicer
shall remit to the Servicing Rights Owner’s Account all Servicing Rights Owner
Economics (to the extent greater than zero and net of lender paid mortgage
insurance) with respect to the Mortgage Loans.

 

(c)                                  The Servicer shall provide the Servicing
Rights Owner with sufficient information in an electronic format to confirm and
reconcile the calculation of the Servicing Rights Owner Economics each month,
including any Servicer Economics (on a loan-by-loan basis) and reflecting all
applicable fees payable to Servicing Rights Owner and to Servicer.

 

(d)                                 All Float Benefit shall be payable to the
Servicing Rights Owner, which amounts shall be included in the calculation of
the Servicing Rights Owner Economics in accordance with this Section 6.01.  The
Servicing Rights Owner shall be responsible for all fees and charges associated
with maintaining any Collection Account or Escrow Account.

 

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6.02                             Reporting; Delinquency Control

 

(a)                                 Servicer shall deliver such reports to the
Mortgage Loan Investor as are required in accordance with the applicable
Investor Guidelines and deliver a copy of such reports to Servicing Rights
Owner.

 

(b)                                 The Servicer shall provide the Servicing
Rights Owner, in an electronic format, a monthly report containing data elements
to be mutually agreed upon by the parties detailing all the Servicing Rights
Owner Economics and the Servicer Economics.  Pursuant to Section 6.01, the
Servicer shall provide the Servicing Rights Owner with sufficient information to
reflect the calculation of the Servicing Rights Owner Economics and the Servicer
Economics, together with such other standard reports as mutually agreed upon (to
be attached hereto on Exhibit 8) and identified on Exhibit 12 hereto.  The
Servicer shall also provide the Servicing Rights Owner, in an electronic format,
the periodic reports set forth on Exhibit 12 hereto.

 

(c)                                  In addition, the Servicer shall cooperate
in good faith with the Servicing Rights Owner to provide any periodic, special
or other reports, information or documentation as may be reasonably requested
from time to time and the reasonable, actual and documented out-of-pocket or
internally allocated, as applicable, expenses incurred by the Servicer shall be
reimbursed by the Servicing Rights Owner only to the extent the applicable
information for such reports is not readily available without the Servicer
incurring material costs and expenses and as otherwise agreed from time to time.

 

(d)                                 No later than (i) forty-five (45) calendar
days after the end of each of the first three quarterly fiscal periods of each
fiscal year of Servicer after the initial Sale Date and (ii) ninety (90)
calendar days after the end of each fiscal year of Servicer after the initial
Sale Date, in each case, the Servicer shall deliver to Servicing Rights Owner, a
certificate in the form of Exhibit 6 (the “Quarterly Financial Covenants
Report”), signed by the chief financial officer of the Servicer certifying as to
whether the financial covenants set forth on Exhibit 6 attached hereto (the
“Quarterly Financial Covenants”) have been met, together with reasonable
supporting documentation and backup which would permit the Servicing Rights
Owner to verify, validate and corroborate the certifications made in the
Quarterly Financial Covenants Report.

 

(e)                                  The Servicer shall cause a certified public
accountant selected and employed by it to provide the Servicing Rights Owner not
later than ninety (90) days after the close of Servicer’s fiscal year, with a
certified statement of the Servicer’s financial condition as of the close of its
fiscal year.  The  Servicer shall deliver a Report on Assessment of Compliance
with Applicable Servicing Criteria relating to compliance with the relevant
servicing criteria under Item 1122 of Regulation AB promulgated by the
Securities and Exchange Commission (or compliance with the Uniform Single
Attestation Program for Mortgage Bankers) by an independent public accounting
firm which is a member of the Public Company Accounting Oversight Board at such
time that such statements, certifications and other reports are delivered to the
Agencies or other Mortgage Loan Investors.

 

(f)                                   As promptly as possible and in no event
later than two (2) Business Days following receipt thereof, the Servicer shall
notify the Servicing Rights Owner of (i) any notice by an Agency regarding the
termination or potential termination of the Servicer as an eligible

 

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servicer for such Agency, (ii) any notices of material noncompliance received
from any Agency that is not resolved within the cure period provided by the
Agency, if applicable, and (iii) any downgrade of the Servicer’s servicer
ratings with any rating agency.  In the event any items of material
noncompliance with Applicable Requirements are discovered, or are specifically
noted in connection with any audit or examination of the Servicer’s servicing of
any of the Mortgage Loans, the Servicer shall promptly address and resolve such
items and report the status, findings and resolution of such items in a timely
manner to the Servicing Rights Owner and as otherwise required by the applicable
Agencies.

 

(g)                                  The Servicer shall as promptly as possible
and in no event later than two (2) Business Days following receipt thereof,
forward to the Servicing Rights Owner any and all communications received from
Mortgage Loan Investors regarding the Servicing Rights or affecting the
servicing of the Mortgage Loans.  It is understood and agreed that compliance
with this clause (g) shall be satisfied to the extent that the Servicing Rights
Owner directly receives (including via electronic mail) any such correspondence
from Mortgage Loan Investors.  In addition, the Servicer shall provide the
litigation report contemplated by Exhibit 12, on a monthly basis, which shall
include any litigation, including mortgagor litigation, contested foreclosure
actions, mortgagor bankruptcy proceedings, arising with respect to any of the
Mortgage Loans; provided, however, the Servicer shall, as promptly as possible
and in no event later than two (2) Business Days following receipt by the office
of the Servicer’s general counsel, provide Servicing Rights Owner with notice of
any litigation that could reasonably result in a material adverse effect on the
Servicing Rights Owner or the Servicing Rights or the Servicer’s ability to
perform its obligations under this Agreement.  At the Servicing Rights Owner’s
reasonable request, the Servicer shall cooperate in good faith in discussing
such litigation or any litigation described in the litigation reports.

 

(h)                                 The Servicer shall provide the Servicing
Rights Owner, in an electronic format, with a month end collection and
delinquency report containing data elements to be mutually agreed upon by the
parties (or required by Applicable Requirements) identifying and describing on a
loan-level basis the status of any Delinquent Mortgage Loans, and any Loss
Mitigation efforts, including, but not limited to, loan modifications and
forbearances.  Loan-level monthly reports shall be properly coded by the
Servicer to identify Mortgage Loans affected by Loss Mitigation efforts or other
changes in payment terms and such reports shall reflect such pending payment
terms.

 

(i)                                     In addition, the Servicer shall provide
to the Servicing Rights Owner, in an electronic format, with reports each
Business Day containing data elements set forth on Exhibit 10 and such other
additional data elements as mutually agreed upon, by and between Servicing
Rights Owner and Servicer, from time to time.

 

(j)                                    The Servicer agrees that the information
furnished to the Servicing Rights Owner or any Mortgage Loan Investor by the
Servicer regarding its financial condition or its servicing operations is true
and correct in all material respects as of each date such information is
provided to the Servicing Rights Owner.

 

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6.03                             Servicing Advances; Reimbursement of Servicing
Advances.

 

(a)                                 The Servicer shall, from time to time during
the term of this Agreement, and for ease of administration, make Servicing
Advances when in its good faith judgment it is necessary or advisable to do so
under applicable Investor Guidelines, and the Servicer shall not have any
obligation to notify the Servicing Rights Owner before making any Servicing
Advance.

 

(b)                                 The Servicer shall seek the Servicing Rights
Owner’s prior written consent with respect to any Servicing Advances which
exceeds such thresholds set forth in Exhibit 2 to the extent that the Servicer
deems such Servicing Advance necessary, in the best interest of the Servicing
Rights Owner or Mortgage Loan Investor and not expected to be recoverable but
are not required by Applicable Requirements.  In addition, the Servicer and the
Servicing Rights Owner shall have conference calls on a monthly basis, at a
regular time and date to be agreed upon by the parties, to discuss any Servicing
Advances that Servicer deems necessary and that are in the best interest of the
Servicing Rights Owner or Mortgage Loan Investor but are not required under
Applicable Requirements and not otherwise recoverable.

 

(c)                                  The Servicer shall reasonably cooperate
with the Servicing Rights Owner, Servicing Rights Owner’s lender(s) and any
rating agency in connection with the Servicing Rights Owner’s financing of any
Servicing Advances.

 

(d)                                 The Servicer shall be entitled to be
reimbursed for all Servicing Advances made by the Servicer pursuant to this
Agreement on a monthly basis as further described in this Section 6.03.  No
later than the fifth (5th) Business Day of each month, or as mutually agreed by
the Servicing Rights Owner and Servicer, the Servicer shall provide the
Servicing Rights Owner and Servicing Rights Owner’s lender(s) (as identified to
the Servicer by the Servicing Rights Owner) with reasonable and customary
documentation in accordance with Applicable Requirements (and any other
information reasonably requested by the Servicing Rights Owner or Servicing
Rights Owner’s lender(s)) evidencing Servicing Advances made by the Servicer in
the previous month.  Within two (2) Business Days of Servicing Rights Owner and
Servicing Rights Owner’s lender’s receipt of such notice, the Servicing Rights
Owner shall remit (or cause to be remitted) the amount set forth in the written
notice provided by the Servicer (or such lesser amount as reasonably determined
by the Servicer) via wire transfer to the Servicer.  To the extent that Servicer
recovers any amounts on account of reimbursed Servicing Advances, such amounts
shall be netted against the next invoice sent by Servicer to the Servicing
Rights Owner.

 

(e)                                  Notwithstanding any provision in this
Agreement to the contrary, the Servicer shall reimburse the Servicing Rights
Owner for any Servicing Advances and/or P&I Advances made by the Servicer and
reimbursed by the Servicing Rights Owner in the event the applicable Agency
declines to reimburse such advance as a result of the failure of the Servicer to
service the related Mortgage Loan in accordance with Applicable Requirements or
the Servicer’s failure to properly maintain appropriate documentations of such
advances and/or properly submit reimbursements requests in accordance with the
Investor Guidelines.

 

(f)                                   The Servicer shall provide report
described and during the timeframe set forth in Exhibit 12 relating to Servicing
Advances which are not eligible for reimbursement under Investor Guidelines or
the Agency declines to reimburse such Servicing Advances and

 

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documenting the reason that such Servicing Advances are not recoverable.  In
addition, from time to time and upon the reasonable request of the Servicing
Rights Owner, the Servicer shall provide, to the Servicing Rights Owner and
Servicing Rights Owner’s lender(s) such documentation, data and/or reports in
the Servicer’s possession or control by the Servicing Rights Owner and/or
Servicing Rights Owner’s lender(s) to enable Servicing Rights Owner to finance
the Servicing Advances and/or P&I Advances.

 

(g)                                  The Servicer shall provide the Servicing
Rights Owner with its “stop advance” policy and “clawback” policy.  With respect
to any Private Label Mortgage Loan, the Servicer shall modify its “stop advance”
policy and/or “clawback” policy to the extent requested by the Servicer Rights
Owner and, subject to compliance with Applicable Requirements, shall implement
such change with respect to the Private Label Mortgage Loans as soon as
reasonably practicable.

 

6.04                             P&I Advances; Compensating Interest

 

(a)                                 The Servicer shall make all required P&I
Advances to each Mortgage Loan Investor using funds available for remittance to
the applicable Mortgage Loan Investor to the extent permitted under applicable
Investor Guidelines.  The Servicer shall reasonably cooperate with the Servicing
Rights Owner, Servicing Rights Owner’s lender(s) and any rating agency in
connection with the Servicing Rights Owner’s financing of any P&I Advances,
Compensating Interest and, with respect to Private Label Mortgage Loans,
deferred servicing fees.

 

(b)                                 Payment Mechanics.

 

(i)                                     No later than three (3) Business Days
before each applicable Remittance Date related to the Mortgage Loans, Servicer
shall furnish Servicing Rights Owner and Servicing Rights Owner’s lender(s) (as
identified to the Servicer by the Servicing Rights Owner) with a written
statement no later than 10:00 a.m. (New York City time) estimating the aggregate
amount of P&I Advances, guaranty (or other similar) fees and lender paid
mortgage insurance to be remitted to the applicable Mortgage Loan Investor(s) on
such Remittance Date.  No later than one (1) Business Day before each applicable
Remittance Date related to the Mortgage Loans, Servicer shall furnish Servicing
Rights Owner and Servicing Rights Owner’s lender(s) (as identified to the
Servicer by the Servicing Rights Owner) with a written statement (the “P&I
Advance Statement”) no later than 10:00 a.m. (New York City time), updating and
revising such estimate, of the aggregate amount of P&I Advances, guaranty (or
other similar) fees and lender paid mortgage insurance to be remitted to the
applicable Mortgage Loan Investor(s) on such Remittance Date.  Each such
statement shall include such reasonable pool level detail to enable Servicing
Rights Owner and Servicing Rights Owner’s lender(s) to verify such P&I Advances,
guaranty (or other similar) fees and lender paid mortgage insurance and
Compensating Interest, as applicable, and any other information reasonably
requested by the Servicing Rights Owner or Servicing Rights Owner’s lender(s). 
With respect to each P&I Advance Statement, Servicing Rights Owner shall deposit
available funds in the amount indicated on such statement into the applicable

 

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account directed by Servicer no later than one Business Day prior to the
applicable Remittance Date.

 

(ii)                                  No later than five (5) Business Days
before the applicable date in which Compensating Interest and/or securitized
excess interest is required to be remitted to the applicable Mortgage Loan
Investor, Servicer shall furnish Servicing Rights Owner and Servicing Rights
Owner’s lender(s) (as identified to the Servicer by the Servicing Rights Owner)
with a written statement (the “Interest Statement”) of the aggregate amount of
Compensating Interest and/or securitized excess interest to be remitted to the
applicable Mortgage Loan Investor(s).  With respect to each Interest Statement,
Servicing Rights Owner shall deposit available funds in the amount indicated on
such statement into the applicable Collection Account or as otherwise directed
by Servicer no later than one Business Day prior to the applicable Remittance
Date.

 

(iii)                               To the extent the amounts the Servicing
Rights Owner (or its lender(s)) funded exceeded the amounts required to be paid
to the applicable Mortgage Loan Investor on the related Remittance Date, the
Servicer shall remit such excess funds to the Servicing Rights Owner/ Mortgage
Loan Investor or lender(s), as applicable, on the same Remittance Date that such
amounts were deposited in the applicable Collection Account.  In the event that
Servicing Rights Owner fails to deposit amounts on account of P&I Advances,
guaranty (or other similar) fees, lender paid mortgage insurance or Compensating
Interest in the applicable Collection Account, Servicer shall have no obligation
to remit any of the foregoing from its own funds; provided, however, that if the
Servicer remits any of the foregoing, it shall be entitled to reimbursement
pursuant to Section 6.03 and Section 6.04.

 

(c)                                  The Servicer shall provide the Servicing
Rights Owner with a loan-level report in a format mutually acceptable to the
parties setting forth on an aggregate basis all P&I Advances made or reimbursed
during the related reporting period and the P&I Advances outstanding on a
cumulative basis for each Mortgage Loan.  The Servicer shall provide the
Servicing Rights Owner with a detailed loan-level report in a format mutually
acceptable to the parties setting forth on a loan-level and aggregate basis all
Servicing Advances made or reimbursed during the related reporting period and
the Servicing Advances outstanding on a cumulative basis for each Mortgage
Loan.  The Servicer shall take all commercially reasonable efforts to seek full
reimbursed for outstanding P&I Advances and Servicing Advances upon the
liquidation of the related Mortgage Loan.  The Servicer shall cooperate in good
faith with the Servicing Rights Owner to pursue full reimbursement of
outstanding P&I Advances and Servicing Advances.

 

6.05                             Disaster Recovery Plan.

 

The Servicer shall maintain a current business continuity plan (“BCP”) that
addresses the continuation of services if an incident (act or omission) impairs
or disrupts the Servicer’s obligation to provide the services contemplated under
this Agreement.

 

On a calendar quarterly basis (no later than 30 days following the end of each
calendar quarter), the Servicer shall provide the Servicing Rights Owner (and
any applicable regulatory

 

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agencies having jurisdiction over the Servicing Rights Owner) with a copy of the
applicable BCPs (as previously identified in writing by the Servicing Rights
Owner.  The Servicer shall provide the Servicing Rights Owner with notice of any
material modifications to the applicable BCPs as promptly as possible and in any
event not later than on a calendar quarterly basis (no later than 30 days
following the end of each calendar quarter) following the implementation of such
modification, in which case the Servicing Rights Owner shall have the option to
perform a due diligence review of the revised BCPs on reasonable notice to the
Servicer

 

The Servicer warrants that the BCP conforms to Applicable Requirements for
business continuity planning (collectively, the “BCP Standards”), which shall
cover, but are not limited to, recovery strategy, loss of critical personnel,
restoring access to documents and data to the Servicing Rights Owner, documented
recovery plans covering all areas of operations pursuant to this Agreement,
vital records protection, and testing plans.  The Servicer will maintain and
test the BCP at regular intervals (no less frequently than annually or as
otherwise mutually agreed to ensure that the BCP complies with BCP Standards and
shall provide reporting of the test results to the Servicing Rights Owner upon
request.  The Servicer will comply with the BCP during the term of this
Agreement.  The Servicer shall notify the Servicing Rights Owner of any material
modifications to the BCP.

 

The Servicer shall provide disaster recovery and backup capabilities through
which it will be able to perform its obligations under this Agreement.  The
recovery strategy shall, at a minimum, provide for recovery after short and long
term disruptions in facilities, environmental support, workforce availability
and data processing equipment.  If requested by the Servicing Rights Owner, the
Servicer shall provide evidence of its capability to meet any applicable
regulatory requirement concerning business continuity applicable to the
Servicing Rights Owner or the Servicer. In the event that the Servicing Rights
Owner’s internal requirements concerning business continuity diverge materially
from those of the Servicer, to the extent requested by the Servicing Rights
Owner, the parties shall cooperate and mutually agree on a plan of enhancement
or modification, with any reasonable, actual and documented out-of-pocket or
internally allocated, as applicable, costs of such enhancement or modification
to the BCP to be paid by the Servicing Rights Owner.

 

The Servicer shall notify the Servicing Rights Owner immediately of the
occurrence of any catastrophic event that affects or could reasonably be
expected to affect the Servicer’s performance of the services contemplated under
this Agreement.

 

The BCP shall include appropriate provisions to ensure the continued
availability of critical third-party services and to ensure an orderly
transition to new service providers should that become necessary.  The Servicer
shall require that any of its Vendors, Off-shore Vendors and Default Firms
providing critical services with respect to this Agreement provide copies of
their own business continuity plans to the Servicer and, upon the Servicing
Rights Owner’s request, the Servicer shall make such plans available to the
Servicing Rights Owner unless disclosing such business continuity plans to the
Servicing Rights Owner is expressly prohibited by the applicable contract with
such Person or by Applicable Requirements.

 

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6.06                             Sanction Lists; Suspicious Activity Reports.

 

(a)                                 The Servicer represents, warrants and
covenants that it has, and shall maintain, policies and internal controls
reasonably designed to comply with the economic sanctions administered or
enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control
(“OFAC”; collectively, with OFAC, the “Sanction Lists”) and the requirements of
this Section 2.19(a).  The Servicer shall screen all existing Mortgagors monthly
against the Sanction Lists.  The Servicer’s policies shall detail steps (i) to
identify and resolve potential matches against the Sanction Lists, and
(ii) required for record retention in accordance with regulatory requirements. 
The Servicer shall promptly notify the Servicing Rights Owner of any unresolved
potential matches against the Sanction Lists.

 

(b)                                 The Servicer represents, warrants and
covenants that is has, and shall maintain, policies, training and internal
controls reasonably designed to detect and investigate potential suspicious
activity and fraud by Mortgagors and related mortgage participants in compliance
with the requirements of this Section 6.06(b).  The Servicer will promptly
disclose to the Servicing Rights Owner potentially suspicious or unusual
activity detected as part of the services performed on behalf of the Servicing
Rights Owner and provide other information with respect thereto reasonably
requested by the Servicing Rights Owner.  The Servicer represents and warrants
that it has processes in place for such escalation and disclosure process.  The
Servicer represents that it will file any required Suspicious Activity Reports
(“SARs”) with respect to the Mortgagors and/or other Persons related to the
Mortgage Loans engaged in suspicious activities if appropriate, and will
maintain records of all such SARs filed and investigations performed in
accordance with regulatory requirements.  The Servicer further represents,
warrants and covenants that it has, and shall maintain, policies regarding
(i) conducting investigations in a timely manner that is consistent with
regulatory expectations and requirements, (ii) maintaining appropriate records
for reviews, investigations and escalations, and (iii) if applicable, reviewing
requests made pursuant to Section 314(a) of the USA PATRIOT ACT through the
Financial Crimes Enforcement Network.

 

6.07                             Litigation Management.

 

Any litigation related solely to a single Mortgage Loan and incidental to the
Servicer’s servicing obligations hereunder (other than litigation between or
among the Servicing Rights Owner, on the one hand, and Servicer, on the other
hand) shall be managed by the Servicer or its counsel on behalf of the Servicing
Rights Owner, such as foreclosure, evictions, quiet title and bankruptcy
filings, at the Servicer’s internal expense with respect to administration of
such litigation (excluding, however, third party costs such as reasonable
out-of-pocket attorney’s fees and expenses for which the Servicing Rights Owner
shall remain responsible and which shall be a Servicing Advance hereunder). 
Unless expressly prohibited by Applicable Requirements, no litigation
proceedings shall be brought in the name of the Servicing Rights Owner.

 

The parties shall manage litigation relating to other Mortgage Loans in
accordance with the Litigation Protocol attached hereto as Exhibit 5.

 

In addition to the other reports the Servicer is providing under this Agreement,
the Servicer shall provide the Servicing Rights Owner, on a calendar quarterly
basis (no later than 30

 

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days following the end of each calendar quarter), the following
litigation-related reports, in form and substance mutually agreed upon and set
forth on Exhibit 12: (i) results of periodic foreclosure firm audits,
(ii) results of monthly scorecards of foreclosure and bankruptcy firms,
including peer comparisons, (iii) changes in scorecarding methodology,
(iv) changes in Servicer’s foreclosure checklist or other foreclosure practices,
(v) annual certification that each foreclosure firm is approved by the Agencies,
if applicable and (vi) monthly reports summarizing litigation, foreclosure and
bankruptcy activity (volume, new, resolved, costs/expenses projections, etc.).

 

6.08                             Resolution of Disputes and Monetary Errors.

 

In the event either party, in good faith, disputes any sum the other party
contends are due and payable hereunder, such disputing party shall deliver to
the contending party a written notice of dispute.  All sums that are not
disputed shall be paid as and when due under this Agreement.  If the contending
party provides documentation substantiating that the disputed amount is properly
due and payable, the disputing party shall pay such amount within five
(5) Business Days after receipt of such documentation.  If the parties remain in
dispute thereafter, the parties shall work together in good faith to resolve
such dispute.

 

6.09                             DFS Consent Order.

 

The Servicer shall notify the Servicing Rights Owner within five (5) Business
Days of the receipt by the office of the Servicer’s general counsel of any
notice from the NYDFS that the NYDFS has determined material noncompliance by
the Servicer with the DFS Consent Order in respect of the servicing of the
Mortgage Loans.  Servicer shall make available to the Servicing Rights Owner via
a secure web meeting (or such other medium reasonably acceptable to the
Servicing Rights Owner) of any and all reports which Servicer or its Affiliates
have delivered to a Governmental Authority required under the DFS Consent Order
within five (5) Business Day of Servicer’s submission to such Governmental
Authority, unless disclosure to the Servicing Rights Owner is expressly
prohibited by such entity or by Applicable Requirements.  At the Servicing
Rights Owner’s request, the Servicer agrees to participate in calendar quarterly
basis (no later than 30 days following the end of each calendar quarter) (which
meetings may be in-person, telephonic or via a secure web meeting) to discuss
the DFS Consent Order, except with respect to any disclosure to the Servicing
Rights Owner that is expressly prohibited by such entity or by Applicable
Requirements.

 

No later than forty-five (45) calendar days after the end of each fiscal quarter
after the initial Sale Date, the Servicer shall deliver to Servicing Rights
Owner, a certificate in the form of Exhibit 14 (the “Quarterly Report”), signed
by the chief risk and compliance officer of the Servicer or PHH Parent.

 

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ARTICLE VII.

 

SERVICING COMPENSATION

 

7.01                             Servicing Compensation

 

(a)                                 In consideration of the servicing duties of
Servicer described in this Agreement, for each Mortgage Loan serviced by
Servicer hereunder, Servicer shall be entitled to the applicable Servicing Fees
specified in Schedule A.

 

(b)                                 The Servicing Fee for a Mortgage Loan shall
be payable on a monthly basis for each month or part thereof that such loan is
serviced hereunder and (i) with respect the month in which the applicable Sale
Date (as defined in the Purchase Agreement) occurs with respect to the Mortgage
Loans, if such Sale Date is not the first (1st) Business Day of such month, such
Servicing Fee shall be prorated, (ii) with respect the month in which the
applicable Sale Date (as defined in the Purchase Agreement) occurs with respect
to the Mortgage Loans, if such Sale Date is on the first (1st) Business Day of
such month, such Servicing Fee shall not be prorated and (iii) with respect to
servicing transfer of a Mortgage Loan from the Servicer to a successor servicer,
(x) to the extent the transfer date to such successor occurs on the first (1st)
day of a calendar month, such Servicing Fee shall be prorated for such month or
(y) to the extent the transfer date to such successor occurs on any day other
than the first (1st) day of a calendar month, such Servicing Fee shall not be
prorated for such month.  The Servicing Rights Owner shall pay the Servicer
Economics on a monthly basis within ten (10) Business Days following receipt of
each invoice therefore.

 

(c)                                  As additional compensation, Servicer shall
be entitled to:

 

(i)                                     receive and retain all Ancillary Fees
(other than Float Benefit as described in Schedule A);

 

(ii)                                  such fees as are set forth on Schedule A;
and

 

(iii)                               Deboarding Fees to the extent due and
payable under this Agreement.

 

(d)                                 Notwithstanding anything to the contrary in
this Agreement, in no event shall the Servicer be entitled to any boarding fees
or other similar fees with respect to any Initial Mortgage Loan.

 

(e)                                  Either party may give written notice
(“Change Notice”) to the other party of (i) any legal, regulatory or
governmental policy enactment, amendment, reform (including but not limited to
those reforms resulting from the Dodd-Frank regulatory reform legislation),
change or development, (ii) any restructuring of a government-sponsored entity,
(iii) any judicial and administrative judgments, orders, stipulations,
injunctions, guidelines or settlements, or (iv) any change in interpretation of
any legal, regulatory or other requirement by any Governmental Authority, that,
in any of the foregoing cases, and in the sole reasonable judgment of such party
providing such notice, either (x) makes any material part of Servicer’s business
unlawful or improper, (y) otherwise restricts or permits Servicer from engaging
in any material business

 

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activity, or (z) has, or may reasonably be expected to have, a material effect
on Servicer, its business, operations, financial condition, results of
operations, prospects, or Servicer’s ability to perform any of its material
obligations under this Agreement, in each case, which is (I) not the result of
or arising from the Servicer’s failure to comply with Applicable Requirements
and (II) not the result of any requirements imposed on Servicer by, or agreed to
by Servicer with, a Governmental Authority which are not imposed on or required
of similar mortgage loan servicers servicing mortgage loans similar to the
Mortgage Loans and which, in the aggregate, have caused an increase in the
Servicer’s cost to service the Mortgage Loans in an amount equal to no less than
[***] of the annual “Base Monthly Servicing Fee” as calculated in accordance
with Schedule A (determined, initially, as of the initial Sale Date and after
any change pursuant to a Change Notice, as of the date of such Change Notice). 
Likewise, to the extent that the Servicing Rights Owner believes that a change
in any of the foregoing has caused a decrease in the Servicer’s cost to service
the Mortgage Loans in an amount equal to no less than [***] of the annual “Base
Monthly Servicing Fee” as calculated in accordance with Schedule A (determined,
initially, as of the initial Sale Date and after any change pursuant to a Change
Notice, as of the date of such Change Notice), the Servicing Rights Owner may
deliver a Change Notice to the Servicer.  In the event of such Change Notice,
Servicer and Servicing Rights Owner shall review and renegotiate in good faith
the Servicing Fees and any other fees paid by Servicing Rights Owner, the
performance standards and/or the services to be performed under this Agreement
in order to reflect such change in Servicer’s cost to deliver the services under
this Agreement in compliance with, or to otherwise address any effect on the
economics of the transaction from, any such event or occurrence described in any
of clauses (i) through (iv) above.  To the extent that the Servicer and the
Servicing Rights Owner agree upon a change in accordance with a Change Notice,
any future Change Notice shall be based upon the Servicer’s cost to service the
Mortgage Loans effective as of the revised terms pursuant to the Change Notice. 
In the event that Servicer and Servicing Rights Owner do not promptly agree upon
a mutually acceptable adjustment to the Servicing Fees, and/or services to be
performed under this Agreement, the parties agree to follow the following
procedure: one designated representative from each party shall meet and confer
in good faith to attempt to resolve the dispute (“Tier I Dispute Resolution”). 
Initially, the respective representatives designated to perform Tier I Dispute
Resolution shall be designated upon receipt of a Change Notice by Servicing
Rights Owner upon receipt of a Change Notice and the Senior Vice President of
Servicing of Servicer.  If both representatives are not appointed within 20
days, or if the dispute cannot be resolved by representatives appointed to
perform Tier I Dispute Resolution within sixty (60) days following the date on
which the latter last of the two representatives is designated by the parties,
the parties agree that the dispute shall then be submitted upon expiration of
such period to senior members of management (“Tier II Dispute Resolution”).  If
such senior members of management are not appointed by both Servicing Rights
Owner and Servicer within 10 days, or if the dispute cannot be resolved by such
senior members of management representatives appointed to perform Tier II
Dispute Resolution after thirty (30) days following the date such dispute is
submitted to them, the parties agree that the dispute shall be finally settled
by arbitration administered by the

 

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*[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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American Arbitration Association in accordance with the provisions of its
Commercial Arbitration Rules and as follows:

 

(i)                                     Any controversy or claim arising out of
or relating to the foregoing shall be settled by arbitration administered by the
American Arbitration Association in accordance with its Commercial Arbitration
Rules, and judgment rendered by the arbitration panel arbitrator(s) may be
entered in any court having jurisdiction thereof (subject to the appellate
procedures described below).

 

(ii)                                  An arbitrator selected by the claimant and
an arbitrator selected by respondent shall, within 10 days of their appointment,
select a third neutral arbitrator.  The three arbitrators shall constitute the
arbitration panel. In the event that they are unable to do so, the parties or
their attorneys may request the American Arbitration Association to appoint the
third neutral arbitrator. Prior to the commencement of hearings, each of the
arbitrators appointed shall provide an oath or undertaking of impartiality.

 

(iii)                               The arbitration proceedings shall be
conducted before the arbitration panel of three neutral arbitrators. The place
of arbitration shall be in New York City New York. The language of the
arbitration shall be English. This agreement shall be governed by and
interpreted in accordance with the laws of the State of New York. The parties
acknowledge that this agreement evidences a transaction involving interstate
commerce. The United States Arbitration Act shall govern the interpretation,
enforcement, and proceedings pursuant to the arbitration clause in this
agreement.

 

(iv)                              Either party may apply to the arbitration
panel seeking injunctive relief until the arbitration judgment is rendered or
the controversy is otherwise resolved. Either party also may, without waiving
any remedy under this agreement, seek from any court having jurisdiction any
interim or provisional relief that is necessary to protect the rights or
property of that party, pending the establishment of the arbitral panel (or
pending the arbitral panel’s determination of the merits of the controversy).

 

(v)                                 Consistent with the expedited nature of
arbitration, each party will, upon the written request of the other party,
promptly provide the other with copies of documents relevant to the issues
raised by any claim or counterclaim. Any dispute regarding discovery, or the
relevance or scope thereof, shall be determined by the arbitration panel, which
determination shall be conclusive. All document discovery shall be completed
within 60 days following the appointment of the arbitration panel.

 

(vi)                              At the request of a party, the arbitration
panel shall have the discretion to order examination by deposition of witnesses
to the extent the arbitration panel deems such additional discovery relevant and
appropriate. Depositions shall be limited to a maximum of three per party and
shall be held within 30 days of the making of a request. Additional depositions
may be scheduled only with the permission of the arbitration panel, and for good
cause shown. Each deposition shall be limited to a maximum of seven hours
duration. All objections are reserved for the arbitration hearing except for
objections based on privilege and proprietary or confidential information.

 

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(vii)                           The judgment shall be made within nine months of
the filing of the notice of intention to arbitrate (demand), and each arbitrator
shall agree to comply with this schedule before accepting appointment. However,
this time limit may be extended by agreement of the parties or by the
arbitration panel if necessary.  The judgment of the arbitration panel shall be
accompanied by a reasoned opinion.

 

(viii)                        Except as may be required by law, neither a party
nor an arbitrator may disclose the existence, content, or results of any
arbitration hereunder without the prior written consent of both parties.

 

(ix)                              Notwithstanding anything to the contrary, the
parties hereby agree: that the opinion of the arbitration panel may be appealed
pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”);
and that the opinion shall not be considered final until after the time for
filing the notice of appeal pursuant to the Appellate Rules has expired. Appeals
must be initiated within thirty (30) days of receipt of an Underlying Award, as
defined by Rule A-3 of the Appellate Rules, by filing a Notice of Appeal with
any AAA office. Following the appeal process the decision rendered by the appeal
tribunal may be entered in any court having jurisdiction thereof.

 

(x)                                 To the extent that the arbitration panel
determines that a party to arbitration under this Section 7.01(e) has failed to
prevail in that arbitration, the arbitration panel shall allocate to that party
all costs and expenses of the arbitrators and shall allocate the costs and
expenses (including attorneys’ fees and costs) as appropriate given the merits
of the matters arbitrated.

 

ARTICLE VIII.

 

AUDIT RIGHTS

 

8.01                             Servicing Rights Owner’s Right to Examine
Servicer Records

 

(a)                                 Servicing Rights Owner, its third party
auditors and regulatory officials with regulatory authority over Servicing
Rights Owner or its Affiliates and the Servicing Rights shall have the right to
examine, audit and or review (each, an “Audit”), upon reasonable advance written
notice to Servicer of not less than five (5) Business Days, during Servicer’s
normal business hours any and all of (i) the Mortgage Files (which are then in
Servicer’s possession or control or otherwise reasonably obtainable by the
Servicer), (ii) any and all books, records, documentation or other information
of Servicer (whether held by Servicer or by another) relating to the servicing
of the Mortgage Loans and (iii) any and all books, records, documentation or
other information of Servicer (whether held by Servicer or by another) that are
relevant to the performance or observance by Servicer of the terms, covenants or
conditions of this Agreement. In such reviews, the Servicer will allow the
Servicing Rights Owner, its Affiliates, its agents and its counsel, accountants
and other representatives, during normal business hours and upon reasonable
notice and provided that such review shall not unduly or unreasonably interrupt
the Servicer’s business operations, to, at any time and from time to time,
access to review the Servicer’s servicing platform, the Mortgage Files (which
are then in Servicer’s possession or control or otherwise reasonably obtainable
by the Servicer), facilities, employees servicing files,

 

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servicing documents, servicing records, data tapes, computer records, servicing
systems, and other computer and technology systems or other information
pertaining to the Servicing Rights, the Mortgage Loans, P&I Advances,
Compensating Interest and the Servicing Advances.   Servicing Rights Owner’s
right to perform Audits shall be limited to two (2) Audits in any calendar year
(absent an Event of Default); provided that the Servicing Rights Owner,
notwithstanding the foregoing, shall be permitted further on-site access if
required by Governmental Authorities to the books, records, and/or other
information of the Servicer across the Servicer’s entire servicing platform
(excluding any access or information relating to any mortgagor data or
performance data for mortgage loans which are not Mortgage Loans) and with
respect to the Mortgage Loans, including the servicing systems, computer
systems, books, records, or other information of the Servicer relating to the
Mortgage Loans, whether held by the Servicer or by another on its behalf
(including but not limited to reviewing call transcripts and listening to audio
of calls to Mortgagors (in-person or remotely)) at any time, upon five
(5) Business Days’ notice.  To the extent the Servicing Rights Owner (absent an
Event of Default) performs more than 2 Audits in any calendar year, the
Servicing Rights Owner shall reimburse the Servicer for its reasonable, actual
and documented out-of-pocket or internally allocated, as applicable, costs and
expenses incurred by the Servicer in connection with its cooperation for such
3rd or greater Audit in a calendar year (absent an Event of Default).  The
Servicer shall reasonably cooperate with any request of the Servicing Rights
Owner in connection with such examination/audit and shall facilitate such audits
and in connection therewith shall provide Servicing Rights Owner and its
designees access to Servicer’s offices, servicing systems, computer systems,
books and records concerning the Servicer, this Agreement and the Mortgage Loans
at any time.

 

(b)                                 Any Audit under this Section 8.01 shall be
conducted with minimum disruption to Servicer’s operations and shall not
compromise the privacy or security of any data relating to Servicer’s clients or
Servicer’s operations not specifically related to the services provided by
Servicer to Servicing Rights Owner hereunder.  Servicing Rights Owner shall
treat Servicer’s Confidential Information acquired during Audits as Confidential
Information in accordance with the provisions of Section 12.13. In the event
that Servicer has Audits scheduled by or on behalf of Servicer’s other clients
or regulatory officials at or about the same time as a requested Audit by or on
behalf of Servicing Rights Owner, Servicing Rights Owner shall cooperate with
Servicer to arrange a mutually agreeable date and time for such Audit.  Servicer
shall make the foregoing information available to Servicing Rights Owner at the
site where such information is stored.  Servicing Rights Owner, its auditors and
regulators shall not be permitted to download or print any of Servicer’s
proprietary information including, without limitation, policies and procedures. 
Servicing Rights Owner shall be required to pay all reasonable costs and
expenses which relate specifically to the provision of information to Servicing
Rights Owner, incurred by Servicer in making such information available and in
providing Audit related support to Servicing Rights Owner, including, without
limitation, overtime payable to the Servicer’s employees to satisfy such
provision.

 

(c)                                  The Servicer shall cooperate in good faith
with the Servicing Rights Owner, its agents, and regulators in responding to any
reasonable inquiries regarding the Servicer’s Subservicing of the Mortgage Loans
and the Servicer’s compliance with, and ability to perform its obligations
under, the provisions of this Agreement and Applicable Requirements, including
without limitation inquiries regarding the Servicer’s qualifications, expertise,
capacity

 

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and staffing levels, training programs, work quality and workload balance,
reputation (including complaints), information security, document custody
practices, business continuity and financial viability, monitoring and oversight
of the Vendors, Off-shore Vendors and Default Firms as well as the current
accuracy of the representations and warranties made by the Servicer in
Article III.  If commercially practicable, the Servicer shall provide the
Servicing Rights Owner with at least ninety (90) days’ prior written notice if
it intends to discontinue or change its current servicing system of record.

 

(d)                                 On a calendar quarterly basis (no later than
twenty (20th) day following the end of each calendar quarter), the Servicer
shall notify the Servicing Rights Owner of the final results of any and all
reviews or audits conducted by or obtained by the Servicer, its Vendors,
Off-shore Vendors Default Firms, agents or representatives (including internal
and external auditors) relating to the Servicer’s operating practices and
procedures to the extent relevant to the services provided by the Servicer under
this Agreement during such calendar quarter, and, the Servicer shall make
summaries of such results available to the Servicing Rights Owner to the extent
disclosing such results to the Servicing Rights Owner is not expressly
prohibited by the applicable contract with such Person or by Applicable
Requirements.  Such reviews shall include, without limitation, rating agency
reviews, SSAE 16 reviews, and MERS reconciliation reports.

 

(e)                                  For the Servicer’s data processing
environment and internal controls related to its obligations under this
Agreement, the Servicer shall, upon the Servicing Right’s Owner’s request,
provide, no later than 30 days following the end of each calendar year end, the
Servicing Rights Owner with a copy of the Servicer’s SSAE 16 SOC 1 Type II
attestation performed by an independent audit firm with coverage of a minimum of
nine months and a bridge letter for each year starting the year ended
December 31, 2017 for so long as the Servicer performs the Subservicing under
this Agreement. To the extent the Servicer relies upon Vendors with respect to
critical systems in connection with its obligations under this Agreement, the
Servicer shall obtain and provide Servicing Right’s Owner with copies of SSAE 16
or equivalent reviews unless disclosing such copies to the Servicing Rights
Owner is expressly prohibited by the applicable Vendor’s contract with the
Servicer or by Applicable Requirements.

 

(f)                                   The Servicer shall provide the Servicing
Rights Owner with prompt notice of any material modification to its MERS quality
assurance plan made after the date hereof and agrees to cooperate in good faith
in addressing any questions or concerns of the Servicing Rights Owner regarding
such modification.  The Servicer shall cooperate with any audit by the Servicing
Rights Owner with respect to any Mortgage Loan registered with MERS and
compliance with the MERS requirements, including providing access to any
relevant documentation or information in connection therewith.

 

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ARTICLE IX.

 

INDEMNIFICATION

 

9.01                             Indemnification; Third Party Claims

 

(a)                                 Servicer shall indemnify, defend and hold
harmless Servicing Rights Owner, its directors, officers, agents, employees, and
assignees (each, an “Indemnified Party”) from and against any Losses suffered or
sustained in any way by any such Person, no matter how or when arising
(including Losses incurred or sustained in connection with any judgment, award,
or settlement, and claims by or on behalf of a third party, and regardless of
whether any risk of the foregoing was known or unknown to Servicer as of the
Effective Date), in connection with or relating to (i) a breach by Servicer of
any of its representations and warranties contained herein, (ii) a breach by
Servicer of any of its covenants and other obligations contained herein
including any failure to service the Mortgage Loans in compliance with the terms
hereof and in accordance with the standard of care set forth in this Agreement,
Applicable Requirements and Accepted Servicing Practices, including any
Agency-imposed fees, penalties or curtailments or cancellation of insurance
imposed on the Owner resulting from therefrom, (iii) the failure of Servicer or
any Vendors, Off-shore Vendors and/or Default Firms hired by Servicer to perform
its duties and service the Mortgage Loans in strict compliance with the terms of
this Agreement, the Mortgage Loan documents and Applicable Requirements and
(iv) the Servicer’s use or misuse of any power of attorney provided to the
Servicer under this Agreement. For the avoidance of doubt, the indemnification
provided by Servicer herein shall be with respect to claims involving
third-parties and claims between Servicing Rights Owner and Servicer.

 

(b)                                 Servicing Rights Owner shall indemnify,
defend and hold harmless Servicer, its directors, officers, agents, employees,
and assignees (each, a “Servicer Indemnified Party”) from and against any Losses
suffered or sustained in any way by any such Person, no matter how or when
arising (including Losses incurred or sustained in connection with any judgment,
award, or settlement), in connection with or relating to (i) a breach by
Servicing Rights Owner of any of its representations and warranties contained in
herein, (ii) a breach by Servicing Rights Owner of any of its covenants and
other obligations contained herein, (iii) compliance with the directions or
policies of the Servicing Rights Owner (except where such directions or policies
are in violation of Applicable Requirements unless Servicer shall have given
Servicing Rights Owner written notice of such potential violation and rationale
thereof and Servicing Rights Owner has not withdrawn such direction or
policies), and (iv) any claim that is brought against Servicer after the
Servicing Transfer Date that relates to the Mortgage Loans, except to the extent
Servicer is liable to the Servicing Rights Owner therefor under this Agreement
or the Purchase Agreement. For the avoidance of doubt, the indemnification
provided by Servicer herein shall be with respect to claims involving
third-parties and claims between Servicing Rights Owner and Servicer.

 

(c)                                  Notwithstanding anything contained herein
to the contrary, Servicer, Servicing Rights Owner, any Servicer Indemnified
Party or other Indemnified Party shall not be responsible or liable in any way
for any indirect, special, incidental or consequential damages, including lost
profits or savings, damage to business reputation or loss of opportunity, and
any punitive and exemplary damages.

 

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(d)                                 Promptly after receipt by an indemnified
party under Section 9.01 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 9.01, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
that it may have to any indemnified party under this Section 9.01, except to the
extent that it has been prejudiced in any material respect, or from any
liability that it may have, otherwise than under this Section 9.01.  The
indemnifying party shall assume (with the consent of the indemnified party) the
defense of any such claim and pay all expenses in connection therewith,
including attorneys’ fees, and promptly pay, discharge, and satisfy any judgment
or decree which may be entered against it or the indemnified party in respect of
such claim.  The indemnifying party shall follow any reasonable written
instructions received from the indemnified party in connection with such claim.
The Servicer shall provide the Servicing Rights Owner a monthly report of legal
action(s) by individual Mortgagor(s) relating to the Mortgage Loans and against
the Servicer or the Servicing Rights Owner.

 

The obligations set forth in this Section 9.01 shall survive the termination of
this Agreement.

 

9.02                             Merger or Consolidation of Servicer

 

Servicer will keep in full effect its existence, rights and franchises as a
company under the laws of the state of its organization and will obtain and
preserve its qualification to do business as a foreign entity 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.

 

Following receipt of Servicing Rights Owner’s written consent (not to be
unreasonably withheld or delayed), any Person into which Servicer may be merged
or consolidated, or any corporation resulting from any merger, conversion or
consolidation (including by means of the sale of all or substantially all of
Servicer’s assets to such Person) to which Servicer shall be a party, or any
Person succeeding to the business of Servicer, shall be the successor of
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.

 

9.03                             Limitation on Liability of Servicer and Others

 

Neither Servicer nor any of the officers, employees or agents of Servicer shall
be under any liability to Servicing Rights Owner for any action taken or for
refraining from the taking of any action pursuant to the terms of this Agreement
or pursuant to the written directions or written policies of the Servicing
Rights Owner; provided, that this provision shall not protect Servicer or any
such Person against any breach of warranties or representations made herein, or
failure to perform its obligations in compliance with this Agreement or any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith, negligence or any breach in the performance of the obligations and
duties hereunder.  Servicer and any officer, employee or agent of Servicer may
rely in good faith on any document of any kind reasonably believed by

 

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Servicer or such Person to be genuine and prima facie properly executed and
submitted by the Servicing Rights Owner respecting any matters arising
hereunder.

 

Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its duties hereunder and which in its
opinion may involve it in any expense or liability; provided, that Servicer may
in its discretion, and following the prior written consent of the Servicing
Rights Owner, undertake any such action where it is a named party and that it
may deem necessary or desirable in respect of 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 Servicer shall be entitled to be reimbursed therefor as
Servicing Advances in accordance with Section 6.03.  This reimbursement right
shall survive the termination of this Agreement.

 

ARTICLE X.

 

DEFAULT

 

10.01                      Events of Default

 

In case one or more of the following events shall occur and be continuing:

 

(1)                                 any failure by Servicer to remit to
Servicing Rights Owner any payment required to be made under the terms of this
Agreement which continues unremedied for a period of one (1) Business Day after
the date on which such payment was required to be remitted under the terms of
this Agreement;

 

(2)                                 any failure on the part of Servicer duly to
observe or perform in any material respect any of the covenants, obligations or
agreements on the part of Servicer set forth in this Agreement which continues
unremedied for a period of thirty (30) 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 the Servicing Rights Owner;

 

(3)                                 any filing of an Insolvency Proceeding by or
on behalf of Servicer or PHH Parent, any consent by or on behalf of Servicer or
PHH Parent to the filing of an Insolvency Proceeding against Servicer or PHH
Parent, any admission by or on behalf of Servicer or PHH Parent of their
respective inability to pay its debts generally as the same become due or
intention not to; or

 

(4)                                 any filing of an Insolvency Proceeding
against Servicer or PHH Parent that remains undismissed or unstayed for a period
of thirty (30) days after the filing thereof;

 

(5)                                 until the end of the Initial Term, any
failure by PHH Parent or the Servicer to comply with the Quarterly Financial
Covenants set forth in the Quarterly Financial Covenants Report;

 

(6)                                 a decree or order of a court or agency or
supervisory authority having jurisdiction for the appointment of a conservator
or receiver or liquidator or other

 

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similar official in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and/or PHH Parent and such decree or order shall have remained in
force, undischarged or unstayed for a period of thirty (30) days;

 

(7)                                 any representation or warranty made by the
Servicer hereunder shall prove to be untrue or incomplete in any material
respect and, if such breach of a representation or warranty is capable of being
cured, continues unremedied for a period of thirty (30) 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 the Servicing Rights Owner;

 

(8)                                 (A) the Servicer shall cease being an
approved subservicer/servicer in good standing with any Agency or a HUD approved
mortgagee, (B) any Agency provides a notice of termination to the Servicer or
the Servicing Rights Owner for failure of the Servicer to comply with the
applicable Investor Guidelines and the foregoing is not cured or otherwise
resolved within sixty (60) days of the receipt of such notice of termination (or
such lesser timeframe as set forth in such notice for such termination to be
effective) or (C) any Agency directs or otherwise notifies the Servicing Rights
Owner that such Agency demands that the Servicer should be terminated;

 

(9)                                 failure of the Servicer to maintain any
required qualification, license or approval to do business, to service
residential mortgage loans, or to otherwise collect debts or perform any
activities relating to residential mortgage loans in any jurisdiction where the
Mortgaged Properties are located, to the extent required under Applicable
Requirements; provided that in jurisdictions where the Servicer’s servicing of
affected Mortgage Loans is de minimis to the Servicer’s overall servicing of
Mortgage Loans under this Agreement and such failure in such jurisdictions does
not materially and adversely affect the related Servicing Rights, the Servicer
shall have thirty days to cure any such failure; provided, however, that if such
failure is not cured within thirty days but is reasonably susceptible of a cure
within an additional 30 days and the Servicer is diligently pursuing a cure, the
Servicer shall have an additional 30 days to cure such failure;

 

(10)                          the then-current primary and/or special servicer
rating (if any) of Servicing Rights Owner assigned by any rating agency is
downgraded by the applicable rating agency from such rating (or any
corresponding rating) which is caused by Servicer’s failure to service in
accordance with Applicable Requirements;

 

(11)                          the Servicer attempts to assign its rights to
servicing compensation hereunder or the Servicer attempts, without the consent
of the Servicing Rights Owner, to sell or otherwise dispose of all or
substantially all of its property or assets or to assign this Agreement or the
Subservicing responsibilities hereunder or to delegate its duties hereunder or
any portion thereof without the consent of the Servicing Rights Owner;  or

 

(12)                          except for the DFS Consent Order, an investigation
by any Governmental Authority that is commenced after the initial Sale Date has
determined (by

 

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consent order or judicial or related enforcement action as to which relevant
appeals have been exhausted) that material deficiencies in servicing performance
or violation of Applicable Requirements by the Servicer has occurred after the
initial Sale Date which, in either case, has material adverse effect on the
Servicer or the PHH Parent and its ability to perform under this Agreement,

 

(13)                          (A) the NYDFS has instituted additional
requirements and/or obligations on the Servicer in connection with the DFS
Consent Order which have a material adverse effect on the Servicer and its
ability to perform under this Agreement and/or (B) the NYDFS has determined (by
consent order or judicial or related enforcement action as to which relevant
appeals have been exhausted) material noncompliance of the DFS Consent Order by
the Servicer with respect to the servicing of the Mortgage Loans, which has a
material adverse effect on the Servicer and its ability to perform under this
Agreement;

 

(14)                          during the Initial Term, without the Servicing
Rights Owner’s prior written consent, a Change of Control has occurred with
respect to the Servicer or PHH Parent; provided that, to the extent that the
Servicer has notified the Servicing Rights Owner of the occurrence of a Change
of Control that has not received the Servicing Rights Owner’s prior written
consent, the Servicing Rights Owner must elect to exercise such Event of Default
within five (5) Business Days of receipt of such notice;

 

(15)                          the Servicing Rights Owner shall cease being an
approved subservicer/servicer in good standing with Fannie Mae or Freddie Mac or
a HUD approved mortgagee, which, in each case, is caused by the Servicer’s
failure to service in accordance with Applicable Requirements;

 

then, and in each and every such case, so long as an Event of Default shall not
have been remedied, Servicing Rights Owner, by notice in writing to Servicer
may, in addition to whatever rights Servicing Rights Owner may have at law or in
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof subject to Section 11.02,
without Servicing Rights Owner’s incurring any penalty or fee of any kind
whatsoever in connection therewith for exercising such right of termination;
provided that no such termination shall relieve the obligation of Servicing
Rights Owner to pay or reimburse Servicer for amounts payable or reimbursable to
it under this Agreement  (other than any Deboarding Fee).

 

On or after the receipt by Servicer of such written notice, all authority and
power of Servicer under this Agreement (whether with respect to the Mortgage
Loans or otherwise) shall cease; provided that the parties acknowledge and agree
that any such termination and transfer of servicing shall occur in such a manner
as to comply with Applicable Requirements (and, accordingly, may occur in staged
transfers over a number of months).

 

In the event Servicer is terminated by Servicing Rights Owner under this
Section 10.01, the Servicer (i) shall not be entitled to any Deboarding Fees and
(ii) shall be responsible for the Servicing Transfer Costs incurred in
connection with the transfer of servicing of the Mortgage Loans and REO
Properties to a successor servicer or subservicer.

 

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Each party shall promptly notify the other party in the event of any event of
default or other termination event with respect to such party set forth in this
Agreement or any event that would become an Event of Default or termination
event with the giving of notice and/or passage of time.

 

The rights of termination, as provided herein, are in addition to all other
available rights and remedies, including the right to recover damages in respect
of any breach.

 

10.02                      Waiver of Default

 

Servicing Rights Owner may waive in writing any default by Servicer in the
performance of its obligations hereunder and its consequences. Upon any 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 thereto except to the extent expressly so waived.

 

ARTICLE XI.

 

TERMINATION

 

11.01                      Term and Termination

 

(a)                                 Term.

 

(i)                                     The initial term of this Agreement shall
be from the initial Sale Date hereof until the date that is the third (3rd)
anniversary of the initial Sale Date (the “Initial Term”). Except as otherwise
permitted in the Agreement, neither party shall be permitted to terminate this
Agreement without cause during the Initial Term.

 

(ii)                                  If this Agreement has not otherwise been
terminated pursuant to this Article XI, then the term of this Agreement shall
automatically be renewed for successive one (1) year terms after the expiration
of the Initial Term; provided that, following the Initial Term, (A) the
Servicing Rights Owner may terminate this Agreement, without cause, with 180
days prior written notice to the Servicer and (B) the Servicer may terminate
this Agreement, without cause, with nine (9) months’ prior written notice to the
Servicing Rights Owner.

 

(iii)                               Notwithstanding anything to the contrary in
this Agreement, the Servicing Rights Owner may terminate this Agreement without
cause with respect to some of the Mortgage Loans and/or REO Properties from time
to time after the end of the Initial Term; provided that (x) at any time, to the
extent that an Agency has indicated that it is terminating, or will be
terminating, the Servicer Rights Owner (not caused by the Servicer’s
performance), subject to payment of the applicable Deboarding Fee, the Servicing
Rights Owner may terminate this Agreement without cause with respect to the
affected Mortgage Loans and REO Properties; and (y) that, at any time during
each of the second and third years of the Initial Term (as measured based upon
the anniversary of the first Sale Date), subject to payment of the applicable
Deboarding Fee, Servicing Rights

 

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Owner may terminate an amount of Mortgage Loans and/or REO Properties that does
not exceed twenty-five percent (25%) of Initial Mortgage Loans (calculated as of
the date the applicable notice of termination is delivered by the Servicing
Rights Owner to the Servicer) upon not less than (A) 90 days prior notice if the
number of Mortgage Loans is 50,000 or less and (B) 120 days prior notice if the
number of Mortgage Loans is over 50,000.

 

(iv)                              This Agreement shall otherwise terminate upon
the earliest of (i) the distribution of the final payment on or liquidation of
the last Mortgage Loan and REO Property subject to this Agreement or (ii) as
otherwise set forth in this Article XI.

 

(b)                                 Successor to Servicer; Requirements and
Effect of Termination; Servicing Transfers.  Upon the termination of Servicer’s
servicing responsibilities and duties under this Agreement, Servicing Rights
Owner shall have the right, in its sole discretion, to (i) succeed to and assume
the servicing of the Mortgage Loans and REO Properties or (ii) appoint a
successor servicer to assume the servicing of the Mortgage Loans and REO
Properties. If Servicer’s duties, responsibilities and liabilities under this
Agreement should be terminated under this Agreement, then Servicer shall
continue to discharge such duties and responsibilities during the period from
the date it acquires knowledge of such termination until a successor servicer or
subservicer has been appointed by the Servicing Rights Owner or a Mortgage Loan
Investor, as applicable, and a servicing transfer has been completed in
accordance with Applicable Requirements (such period of time, the “Servicing
Transition Period”) all on the terms and conditions contained herein. The
Servicer shall not be relieved of its obligation under this Agreement until such
time. During the Servicing Transition Period, the Servicing Rights Owner and the
Servicer shall discharge such duties and responsibilities with the same degree
of diligence and prudence that it is obligated to exercise under this Agreement.
Subject to applicable consents needed for transferring the servicing
responsibilities and duties, the parties acknowledge and agree that time is of
the essence in connection with any termination of this Agreement as to any or
all of the Mortgage Loans and REO Properties.

 

Upon the effective date related to the termination of Servicer’s servicing
responsibilities and duties under this Agreement in whole or in part, Servicer
shall promptly deliver to Servicing Rights Owner or the successor servicer the
funds in the related Collection Account, the HELOC Advance Account and the
Escrow Accounts and the Mortgage Files (which are then in Servicer’s possession
or control or otherwise reasonably obtainable by the Servicer), Servicing Files,
any Mortgage Loan Documents (which are then in Servicer’s possession or control)
and related documents and statements held by it hereunder and Servicer shall
account for all funds received by Servicer on behalf of Servicing Rights Owner
or the Mortgage Loan Investors. Servicer shall execute and deliver such
instruments and do such other things all as may reasonably be required to more
fully and definitively vest and confirm in the successor all such rights,
powers, duties, responsibilities, obligations and liability of Servicer.

 

Upon (x) valid and proper termination of this Agreement, (y) the payment and/or
reimbursement of the appropriate party of any amounts then due and payable to
such party and (z) the expiration of the any Servicing Transition Period, no
party hereto shall have any liability or further obligation to the other party
hereunder, except as may exist as a result of the survival of provisions
specified in this Agreement to so survive.

 

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11.02                      Payment Obligations upon Termination and Transfer of
Servicing

 

In the event either party terminates this Agreement with respect to some or all
of the Mortgage Loans and REO Properties, Servicing Rights Owner shall, prior to
the date of such termination, pay to Servicer an amount equal to the sum of
(i) all outstanding undisputed expenses and advances (including Servicing
Advances and P&I Advances) for which Servicer is entitled to reimbursement under
this Agreement, (ii) all outstanding Servicing Fees and other servicing
compensation which have accrued as of the effective date of such termination and
(iii) to the extent the Servicing Rights Owner terminates without cause pursuant
to Section 11.01(a)(iii) or other applicable provisions of this Agreement, the
applicable Deboarding Fee. To the extent that any such amounts are not invoiced
by Servicer prior to the date of termination, such amounts shall be reimbursed
to Servicer within ten (10) Business Days of invoice and customary back-up
documentation is received by the Servicing Rights Owner therefor.  Any disputed
amounts shall be resolved as promptly as practicable with payment promptly after
resolution thereof.

 

ARTICLE XII.

 

GENERAL PROVISIONS

 

12.01                      Governing Law; Consent to Service; Waiver of Jury
Trial

 

THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

 

ANY LEGAL ACTION, SUIT OR OTHER PROCEEDING ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK, OR IN THE UNITED STATES COURTS FOR THE SOUTHERN DISTRICT OF NEW YORK. 
WITH RESPECT TO ANY SUCH PROCEEDING IN ANY SUCH COURT:  (A) EACH PARTY GENERALLY
AND UNCONDITIONALLY SUBMITS ITSELF AND ITS PROPERTY TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT; AND (B) EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION IT HAS OR HEREAFTER MAY HAVE TO THE VENUE OF
SUCH PROCEEDING, AS WELL AS ANY CLAIM IT HAS OR MAY HAVE THAT SUCH PROCEEDING IS
IN AN INCONVENIENT FORUM.

 

THE PARTIES HERETO HEREBY VOLUNTARILY, KNOWINGLY AND IRREVOCABLY WAIVE ANY RIGHT
EACH MAY HAVE TO TRIAL BY JURY IN THE EVENT OF ANY LITIGATION CONCERNING THIS
AGREEMENT.

 

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12.02                      Notices

 

Any notices or other communications permitted or required hereunder shall be in
writing and shall be deemed conclusively to have been given if personally
delivered, sent by courier with delivery against signature therefor, mailed by
registered mail, postage prepaid, and return receipt requested or transmitted by
telecopier and confirmed by a similar writing mailed or sent by courier as
provided above, to (i) in the case of Servicing Rights Owner, New Residential
Mortgage LLC, c/o New Residential Investment Corp., 1345 Avenue of the Americas,
45th Floor, New York, New York 10105, Attention: Jonathan Grebinar, Austin
Sandler and Andrew Miller, Email:      jgrebinar@fortress.com;
amiller@fortress.com; asandler@fortress.com, or at such other address as may
hereafter be furnished to Servicer in writing by Servicing Rights Owner and
(ii) in the case of Servicer, PHH Mortgage Corporation, One Mortgage Way, Mt.
Laurel, New Jersey  08054, Attention: Vice President, Servicing, or such other
address as may hereafter be furnished to Servicing Rights Owner in writing by
Servicer.

 

12.03                      No Solicitation

 

Subject to the terms of any mutually agreed upon portfolio retention agreement
(a “Retention Agreement”), Servicer agrees that it will not take any action, or
cause any action to be taken by any of its agents or affiliates, or by any
independent contractors on its behalf, to personally, by telephone or mail,
solicit the borrower or obligor under any related Mortgage Loan for any purpose
whatsoever, including but not limited to any pay-off requests or refinance of a
Mortgage Loan, accident, health, life, property and casualty insurance, or any
other non-mortgage related products or services, in whole or in part, without
the prior written consent of Servicing Rights Owner, except for products or
processes that facilitate normal servicing activities, such as “phonepay”,
portfolio defense or automatic payment plans. Notwithstanding the foregoing, it
is understood and agreed that promotions undertaken by or on behalf of Servicer
or any of its affiliates which are directed to the general public at large,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section 12.03.  In addition, notwithstanding
the forgoing, Servicer may solicit Mortgagors for Mortgage Loan Investor or
government sponsored refinance programs (e.g., HARP) and other non-mortgage
products to the extent that Servicing Rights Owner gives its prior written
consent to Servicer’s solicitation of such other non-mortgage products.

 

12.04                      Reserved

 

12.05                      Severability of Provisions

 

If any one or more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever held invalid, the invalidity of any
such covenant, agreement, provision or term of this Agreement shall in no way
affect the validity or enforceability of the other provisions of this Agreement;
provided, however, that if the invalidity of any covenant, agreement or
provision shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is as nearly as possible the
same as the economic effect of this Agreement.

 

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12.06                      Schedules and Exhibits

 

The schedules and exhibits that are attached to this Agreement are hereby
incorporated herein and made a part hereof by this reference.

 

12.07                      General Interpretive Principles

 

For purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires:

 

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

 

(b)                                 any reference in this Agreement to this
Agreement or any other agreement, document, or instrument shall be a reference
to this Agreement or any other such agreement, document, or instrument as the
same has been amended, modified, or supplemented in accordance with the terms
hereof and thereof (as applicable);

 

(c)                                  accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally accepted
accounting principles, consistently applied;

 

(d)                                 references herein to “Articles,” “Sections,”
“Subsections,” “Paragraphs,” and other subdivisions without reference to a
document are to designated articles, Sections, subsections, paragraphs and other
subdivisions of this Agreement, unless the context shall otherwise require;

 

(e)                                  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;

 

(f)                                   a reference to a “day” shall be a
reference to a calendar day;

 

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

 

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

 

12.08                      Assignment; Waivers and Amendments

 

This Agreement may be amended, superseded, canceled, renewed or extended and the
terms hereof may be waived, only by a written instrument signed by authorized
representatives of the parties or, in the case of a waiver, by an authorized
representative of the party waiving compliance of the other party’s obligation
hereunder.

 

This Agreement may be assigned only with the written consent of both Servicer
and Servicing Rights Owner. The Servicing Rights Owner may also assign to an
Affiliate without the

 

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consent of the Servicer, provided that the assignment is made with respect to an
least fifty thousand (50,000) Mortgage Loans and the Servicer, the Servicing
Rights Owner and the Affiliate enter into an assignment and assumption agreement
pursuant to which the Affiliate assumes the obligations of the Servicing Rights
Owner under this Agreement with respect to the applicable Mortgage Loans
(including, without limitation, the representations, warranties and covenants of
Servicing Rights Owner set forth in Article IV).

 

12.09                      Captions

 

All Section titles or captions contained in this Agreement or in any schedule or
exhibit annexed hereto or referred to herein, and the table of contents to this
Agreement, are for convenience only, shall not be deemed a part of this
Agreement and shall not affect the meaning or interpretation of this Agreement.

 

12.10                      Counterparts

 

This Agreement may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.  Delivery of
an executed counterpart of a signature page of this Agreement in Portable
Document Format (PDF) or by facsimile transmission shall be effective as
delivery of a manually executed original counterpart of this Agreement.

 

12.11                      Entire Agreement

 

This Agreement and the Purchase Agreement (including the schedules and exhibits
annexed hereto or referred to herein) contains the entire agreement between the
parties hereto with respect to the transactions contemplated hereby and
supersedes all prior agreements, written or oral, with respect thereto.

 

12.12                      Further Assurances

 

Each party hereto shall take such additional action as may be reasonably
necessary to effectuate this Agreement and the transactions contemplated
hereby.  In addition, the parties agree to cooperate and work in good faith to
solve any and all issues or developments that arise during the course of the
business relationship evidenced hereby.

 

12.13                      Confidentiality

 

(a)                                 Confidential Information.  The term
“Confidential Information” shall include: (i) all proprietary information that a
party makes available or discloses, directly or indirectly, (the “Provider”), in
writing, electronically, orally, visually or in any other medium, to the other
party (the “Recipient”) or such information that the Recipient obtains access to
pursuant to this Agreement, including but not limited  to information relating
to the other party’s intellectual property and proprietary information,
trademarks, copyrights, trade secrets, clients, customer lists, business
contacts, business plans, customer leads and methods of generating customer
leads, policies, procedures, techniques, discoveries, inventions, writings,
conceptions, know-how, standards, computer programs, computer software,
databases, products, source or

 

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object code, product or service specifications, manuals, agreements, economic
and financial information, marketing plans, data, reports, analyses,
compilations, ideas and tangible expression of ideas, statistics, summaries,
studies, and any other materials or information, or any materials based
thereon.  Confidential Information may also include material non-public
information of the Provider within the meaning of Regulation FD promulgated by
the Commission under the Exchange Act. This list of Confidential Information is
not exclusive and may now or in the future include other types of information
that constitute Confidential Information which are expressly included within the
scope of this Agreement by reference; (ii) Customer Information as such term is
defined below in Section 12.13(e) and (iii) the terms of this Agreement.
Servicing Rights Owner hereby permits Servicer to analyze all data provided by
Servicer in its capacity as servicer hereunder for performance results,
delinquency trends, prepayment insights and to support all client data
requirements, in accordance with Applicable Requirements.

 

(b)                                 Confidentiality Requirements.  In connection
with this Agreement and the services performed hereunder, the parties may
exchange and have access to each other’s Confidential Information.  Confidential
Information shall be used by each party solely in the performance of its
obligations or the exercise of its rights pursuant to this Agreement.  A party
receiving Confidential Information from the other party under this Agreement,
the Recipient, agrees that any Confidential Information provided by the other
party, the Provider, shall be kept strictly confidential and shall not be
disclosed in any manner whatsoever, in whole or in part, to any employee, agent,
consultant, or third party, except (i) as may be necessary to perform its
obligations or exercise its rights pursuant to this Agreement, (ii) as may be
agreed upon in writing by the Provider prior to disclosure, (iii) to the
Recipient’s regulators and examiners, (iv) to defend itself in connection with a
legal proceeding regarding the Transactions, (v) as required by Applicable
Requirements, (vii) to the Recipient’s Affiliates’ officers, directors,
attorneys, accountants, employees, agents and representatives and, with respect
to the Servicing Rights Owner only, rating agencies, consultants, bankers,
financial advisors and potential financing sources (collectively,
“Representatives”), or (viii) as otherwise required by Applicable Requirements. 
Each party shall notify its employees of their confidentiality obligations with
respect to the Confidential Information and shall require its employees to
comply with these obligations.  Prior to disclosing any Confidential Information
pursuant to this subsection, Recipient shall inform each Representative that
shall receive such Confidential Information of the confidential nature of the
information, and each consultant or third party shall have written
confidentiality obligations to Recipient at least as stringent as those
appearing in this Agreement.  Each party will use its reasonable best efforts to
ensure that its Representatives to whom Confidential Information is disclosed
take such action as shall be necessary or advisable to preserve and protect the
confidentiality of Confidential Information; provided, however, that each party
shall be responsible for any breach by its Representatives of the
confidentiality requirements of this Agreement.  A Recipient shall not
duplicate, copy or reproduce, in tangible or electronic form, including, without
limitation,  by means of photocopying, transcribing of voice recording, or
electronic imaging, delivery or processing, Confidential Information except in
the ordinary course of business for the performance of its obligations or the
exercise of its rights pursuant to this Agreement. Confidential Information
shall be deemed the exclusive property of the disclosing party. The Recipient
acknowledges that it and its Representatives are aware that U.S. securities laws
prohibit any person or entity who has material non-public information about a
company from purchasing or selling, directly or indirectly, securities of such
company (including entering into hedging transactions involving such
securities), or from

 

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communicating such information to any other person or entity under circumstances
in which it is reasonably foreseeable that such person or entity is likely to
trade in such securities.  The Recipient agrees that it will not use and that it
will use its reasonable best efforts to assure that none of its Representatives
will use any Confidential Information in contravention of the U.S. securities
laws.

 

(c)                                  Disclosures.  If the Recipient is legally
compelled (whether by depositions, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigation, demand or other
similar process, or by the rules or regulations of a governmental agency with
jurisdiction over a party) to disclose any Confidential Information of the
Provider, the Recipient shall, except as prohibited by law, provide the Provider
with prompt written notice of any such request or requirement prior to
disclosure of any Confidential Information so that the Provider may seek, at its
own expense, a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement.  If the Provider seeks a
protective order or other appropriate remedy, the Recipient shall, at the
Provider’s expense, provide such cooperation as the Provider shall reasonably
request.  If, in the absence of a protective order or other appropriate remedy
or the receipt by the Recipient of a waiver from the Provider, the Recipient is
required to disclose Confidential Information to any person, the Recipient may,
without liability hereunder, disclose to such person only that portion of the
Confidential Information which the Recipient is advised by reasonable written
opinion of counsel is legally required to be disclosed, and will exercise its
reasonable efforts to assist the Provider, at the Provider’s expense, in
obtaining a protective order or other reliable assurance that confidential
treatment will be accorded to the Confidential Information that is disclosed.

 

(d)                                 Exclusions.  With the exception of Customer
Information, the obligations of confidentiality in this Section 12.13 shall not
in any way restrict or impair either party’s right to use, disclose or otherwise
deal with: (i) Confidential Information that is or becomes generally available
to the public by publication or otherwise other than as a result of a disclosure
directly or indirectly by the Recipient that violates the terms of this
Agreement; (ii) Confidential Information which the Recipient can show was in the
possession of or known by the Recipient, or its parent, subsidiary or affiliated
company, prior to disclosure by the Provider under this Agreement and which was
not acquired, directly or indirectly, under any confidentiality obligation
applicable to the provider of such information and which the Recipient was
permitted to use without restriction; or (iii) Confidential Information which is
independently acquired or developed by the Recipient without reference to or
reliance upon any Confidential Information furnished by the Provider and without
violation of its obligations hereunder or any other confidentiality obligations
owed to the Provider.

 

(e)                                  Customer Information and Security
Measures.  Terms used in this paragraph have the meanings given them under Title
V of the Gramm-Leach-Bliley Act (15 U.S.C. Section 6801, et seq.) (the “GLBA”)
as amended from time to time.  Pursuant to this Agreement, Servicing Rights
Owner may disclose to Servicer certain nonpublic personally identifiable
information about Servicing Rights Owner’s consumers or Customers (“Customer
Information”).  Servicer agrees to maintain the confidentiality of all such
Customer Information to the same extent that Servicing Rights Owner is required
to maintain it. Servicer agrees not to disclose or use any such Customer
Information except to carry out the purposes for which Servicing Rights Owner
provided such Customer Information, including use as permitted by the

 

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GLBA in the ordinary course of business to carry out those purposes.  Servicer
further agrees that Servicer has implemented and will maintain throughout the
term of this Agreement security measures (“Security Measures”) designed to:
(i) ensure the security and confidentiality of the Customer Information,
(ii) protect against any anticipated threats or hazards to the security and
integrity of the Customer Information, (iii) protect against unauthorized access
to or use of the Customer Information that could result in substantial harm or
inconvenience to any customer of Servicing Rights Owner, and (iv) ensure the
proper disposal of the Customer Information.  Servicer agrees to (i) notify
Servicing Rights Owner as soon as possible after verification in the event it
becomes aware of any intrusion, security breach, or unauthorized access to or
use of any Customer Information in its possession or that of its service
providers, (ii) take measures to determine the scope of the breach and restore
or enhance the security of the Customer Information to avoid further breaches
and (iii) assist Servicing Rights Owner in identifying and notifying any of
Servicing Rights Owner’s Customers whose Customer Information was subject to the
unauthorized access or use. Servicer must receive Servicing Rights Owner’s prior
written approval of any communications to customers regarding a breach in the
security of Customer Information.  Servicing Rights Owner shall review and grant
its approval or rejection of any such communications within one (1) Business Day
of its receipt of the communication(s) from Servicer.  If Servicing Rights Owner
rejects any communication, Servicing Rights Owner shall provide to Servicer
detailed changes to be made to the communication to receive Servicing Rights
Owner’s approval.  Servicer shall not be liable or responsible (and Servicing
Rights Owner shall be liable and responsible) for any: (y) delay in sending any
communication(s) to Customers if Servicing Rights Owner does not timely or
appropriately approve or reject any communication; or (z) Losses to the extent
resulting from Servicing Rights Owner’s rejection of or changes to any
communication(s). Servicer also agrees that it will abide by the Fair Credit
Reporting Act, as amended by the Fair and Accurate Credit Transactions Act of
2003, and any rules, regulations, or orders issued thereunder (“FACT Act”) and
that all Consumer Information will be properly disposed of by Servicer in
accordance with the FACT Act and any other applicable federal and state laws and
regulations.

 

(f)                                   Injunctive Relief.  The parties agree that
monetary damages for breach of the obligations under this Section 12.13 may not
be adequate and that the non-disclosing party shall be entitled to injunctive
relief with respect to a breach thereof.

 

(g)                                  Return of Confidential Information. 
Following the termination of this Agreement, each party agrees that it will
return or destroy all copies of Confidential Information of the other party,
without retaining any copies thereof, and destroy all copies of any analyses,
compilations, studies or other documents prepared by it or for its use
containing or reflecting any Confidential Information; provided, however, that
each party may retain such limited copies or materials containing Confidential
Information of the other party for customary document retention and audit
purposes, as required by Applicable Law, and subject to the terms of this
Agreement.

 

(h)                                 Survival.  The provisions of this
Section 12.13 shall survive termination of this Agreement.

 

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12.14                      Force Majeure.

 

Each party will be excused from performance under this Agreement, except for any
payment obligations for services that have been or are being performed
hereunder, for any period and to the extent that it is prevented from
performing, in whole or in part, as a result of delays caused by the other party
or any act of God, war, civil disturbance, court order, labor dispute, or other
cause beyond its reasonable control, including failure, fluctuations, or
unavailability of heat, light, air conditioning, or telecommunications
equipment.  A party excused from performance pursuant to this Section shall
exercise commercially reasonable efforts to continue to perform its obligations
hereunder and shall thereafter continue with reasonable due diligence and good
faith to remedy its inability to so perform, except that nothing herein shall
obligate either party to settle a strike or labor dispute when it does not wish
to do so.  Such nonperformance will not be deemed a breach of this Agreement as
long as the party uses commercially reasonable efforts to expeditiously remedy
the problem causing such nonperformance and to execute its disaster recovery
plan then in existence.  If the failure of a party to perform under this
Agreement as a result of a force majeure event exceeds fifteen (15) days, the
other party may terminate this Agreement immediately without liability and the
parties shall cooperate in good faith to facilitate the transfer of servicing to
a successor servicer or subservicer designated by the Servicing Rights Owner. 
Notwithstanding the foregoing, in the event the force majeure provisions set
forth in the Investor Guidelines are more restrictive as they relate to the
Servicing Rights Owner or the Servicer, such provisions in the Investor
Guidelines shall control in the event an Agency is a Mortgage Loan Investor.

 

12.15                      Executory Contract.

 

Notwithstanding any provision in this Agreement to the contrary, the parties
intend and the Servicer acknowledges and agrees that, in the event it files
bankruptcy under 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), this Agreement
is an “executory contract” within the meaning of Section 365 of the Bankruptcy
Code and, therefore, Servicer shall have no right to modify on any basis
whatsoever, including without limitation Section 105 of the Bankruptcy Code, any
of the terms, provisions or conditions of this Agreement in any such bankruptcy
proceeding and hereby irrevocably waives any ability to do so.  Further,
Servicer acknowledges and agrees that its services provided under this Agreement
are essential and should Servicer fail to perform its obligations under this
Agreement, Servicing Rights Owner shall suffer irreparable harm and,
consequently, Servicing Rights Owner shall have the right to obtain  on an
expedited basis an order from the bankruptcy court: (i) lifting the Section 362
automatic stay so as to permit Servicing Rights Owner to terminate this
Agreement; and (ii) compelling Servicer to immediately assume or reject this
Agreement in accordance with the provisions of Section 365 of the Bankruptcy
Code.  In the event this Agreement is rejected under Section 365 of the
Bankruptcy Code, this Agreement shall be terminated and Servicer agrees to
immediately comply with its obligations under this Agreement with respect to
termination of this Agreement.  Finally, Servicer acknowledges and agrees that
Section 506(c) of the Bankruptcy Code has no application to this Agreement and,
even if it did, Servicer hereby expressly waives any right to surcharge
Servicing Rights Owner under Section 506(c) of the Bankruptcy Code.

 

65

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12.16                      Independence of Parties.

 

Servicer shall have the status of, and act as, an independent contractor.
Nothing herein contained shall be construed to create a partnership, joint
venture or fiduciary relationship between Servicing Rights Owner and Servicer.

 

[Signature page follows]

 

66

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IN WITNESS WHEREOF, Servicer and Servicing Rights Owner have caused their names
to be signed hereto by their respective officers as of the date first written
above.

 

 

NEW RESIDENTIAL MORTGAGE LLC

 

By: New Residential Investment Corp., its managing member

 

 

 

 

By:

/s/ Nicola Santoro, Jr.

 

 

Name: Nicola Santoro, Jr.

 

 

Title: Chief Financial Officer

 

 

 

 

 

 

 

PHH MORTGAGE CORPORATION

 

 

 

 

 

 

 

By:

/s/ Glen A. Messina

 

 

Name: Glen A. Messina

 

 

Title: President and Chief Executive Officer

 

[Signature Page to Flow Mortgage Loan Subservicing Agreement]

 

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

 

SCHEDULE A

 

PRICING SCHEDULE

 

Base Fee Monthly Servicing Fee

 

 

 

Base Fee

 

$

[***]

 

Add-on for FHA, VA or Non-Agency Loans

 

$

[***]

 

Add-on for ARMs or Interest Only Loans

 

$

[***]

 

Monthly Fees for Loans in Default

 

 

 

30 - 59 days past due

 

$

[***]

 

60 - 89 days past due

 

$

[***]

 

90+ days past due

 

$

[***]

 

Bankruptcy

 

$

[***]

 

Foreclosure

 

$

[***]

 

REO

 

$

[***]

 

Late Charges / Ancillary Income

 

[***]

 

Loss Mitigation Incentives

 

[***]

 

 

 

 

 

Collection Accounts

 

[***]

 

Claims Fees

 

[***]

 

Fannie Mae/Freddie Mac

 

$

[***]

 

MI Claim

 

$

[***]

 

FHA Part A

 

$

[***]

 

FHA Part B

 

$

[***]

 

 

 

 

 

New Loan Setup Fee (Waived for Initial Mortgage Loans)

 

 

 

 

 

 

 

- Automated transfer boarding fee

 

$

[***]

 

 

 

 

 

- Manual boarding fee

 

$

[***]

 

 

 

 

 

Reporting

 

[***]

 

Mailed Monthly Statements

 

[***]

 

New York Mortgage Loans

 

[***]

 

 

 

 

 

Deboarding Fee, per Mortgage Loan

 

 

 

Without Cause, sale of Servicing Rights

 

 

 

Year 1

 

$

[***]

 

Year 2

 

$

[***]

 

Year 3

 

$

[***]

 

Without Cause, 11.01(a)(iii)(x)

 

$

[***]

 

Without Cause, 11.01(a)(iii)(y)

 

$

[***]

 

Without Cause, otherwise

 

$

[***]

 

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

A-1

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

 

Tax Contract Transfer Fees (not applicable to Initial Mortgage Loans):

 

 

 

- Tax contract transfer fee for any loan with tax contract not through CoreLogic

 

$

[***]

 

(Seasoned Loan greater than 1 year with required info from previous tax
provider)

 

 

 

- Tax contract transfer fee for any loan with tax contract not through CoreLogic

 

$

[***]

 

(Seasoned Loan greater than 1 year w/ limited info from previous tax provider,
requiring legal description to complete search and place under tax service)

 

 

 

- Tax contract transfer fee for any loan without a tax contract at time of
transfer

 

$

[***]

 

(New Originations/Less than 1 year require individual documents containing the
HUD1/Closing Disclosure and Legal Description to complete search and place under
tax service)

 

 

 

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

A-2

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

 

EXHIBIT 1

 

CONTENTS OF EACH MORTGAGE FILE

 

To be mutually agreed upon from time to time by the parties based upon the
mortgage loans.

 

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

 

EXHIBIT 2

 

ADVANCE THRESHOLD MATRIX

 

Advance Category

 

Approval
Per
Advance
Threshold

 

Attorney Fees (Contested Foreclosure)

 

$

[***]

 

Hazard Insurance

 

$

[***]

 

HOA

 

$

[***]

 

Litigation Fees (Non-Routine)

 

$

[***]

 

MI

 

$

[***]

 

Mod Advances

 

$

[***]

 

Prop Preservation

 

$

[***]

 

Property Taxes

 

$

[***]

 

Title Curative

 

$

[***]

 

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

EXHIBIT 3

 

FORM OF COLLECTION ACCOUNT LETTER AGREEMENT

 

[DATE]

 

To: [    ]

 

As Servicer under the Subservicing Agreement, dated as of [month/date/year] (the
“Agreement”) by and between you and the below signed Servicer, we hereby certify
to you that we have established an account, number [      ], at [insert name of
financial institution], as a Collection Account pursuant to Section [section
number] of the Agreement, to be designated as “[      ], in trust for [account
name].

 

 

[                           ]

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

EXHIBIT 4

 

FORM OF ESCROW ACCOUNT LETTER AGREEMENT

 

[DATE]

 

To: [    ]

 

As Servicer under the Subservicing Agreement, dated as of [month/date/year] (the
“Agreement”) by and between you and the below signed Servicer, we hereby certify
to you that we have established an account, number [      ], at [insert name of
financial institution], as an Escrow Account pursuant to Section [section
number] of the Agreement, to be designated as “[      ], in trust for [account
name].

 

 

[                           ]

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

EXHIBIT 5

 

LITIGATION PROTOCOLS

 

As used herein, contested litigation Mortgage Loans (“CL Loans”) means any
Mortgage Loan that involves a lawsuit or other dispute resolution mechanism
(including but not limited to arbitration or mediation) in which a standalone
lawsuit or a responsive claim (including but not limited to a counterclaim or
third party claim filed in a judicial foreclosure action) asserts outside of the
ordinary course claims.

 

A.            For all CL Loans, the Servicer shall comply with the following
instructions:

 

1.              Contact with Borrower:  The Servicer will not make any outbound
calls related to CL Loans or conduct any solicitation efforts by mail or e-mail
directly to a represented Borrower without prior written consent from the
Servicing Rights Owner or outside counsel designated in writing by the Servicing
Rights Owner as a liaison (the “Designated Persons”) unless otherwise required
by applicable law.

 

2.              Foreclosure: The Servicer shall not take any foreclosure-related
actions on a CL Loan (including but not limited to issuing / recording Notices
of Acceleration, Default or Sale as well as any eviction, marketing or other
Real Estate Owned activities) without the prior written consent of a Designated
Person unless otherwise necessary to protect the secured interest in the
property or to meet applicable investor requirements.

 

3.              Property Inspections and Preservation:  Unless requested by a
Designated Person not to do so, for every CL Loan the Servicer shall take all
property preservation and inspection measures that are in accordance with the
Applicable Requirements unless otherwise prohibited by applicable law.

 

4.              Tax:  Unless requested by a Designated Person not do so, for
every CL Loan the Servicer shall take all tax related actions (including but not
limited to responding to correspondence and notices, paying due or delinquent
property taxes for impounded and escrowed CL Loans, and monitoring non-impounded
loans for payment status in order to protect against tax liens or a loss of the
property through the payment of tax advances and/or the creation of an escrow
account) in accordance with Applicable Requirements.

 

5.              Insurance:  Unless requested by a Designated Person not do so,
for every CL Loan the Servicer shall take all insurance related actions
(including but not limited to responding to correspondence and notices as well
as paying premiums and/or arranging for any needed hazard, earthquake, flood and
purchase money insurance coverage) in accordance with Applicable Requirements.

 

6.              Loss Mitigation Apart from Loan Modifications:  For every CL
Loan, the Servicer shall not engage in any loss mitigation activities (other
than loan modifications),

 

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

 

including but not limited to collection calls efforts, short sales,
deeds-in-lieu of foreclosure or deficiency waivers without the prior written
consent of a Designated Person unless otherwise required to do so under
applicable law or investor requirements.

 

7.              Bankruptcy: For every CL Loan with respect to which the related
Mortgagor is subject to a bankruptcy or insolvency proceeding, except as
otherwise provided in subsections 3, 4, 5, and 8 of these instructions, the
Servicer shall not take any action (including but not limited to filing proofs
of claim or motions for relief from stay) without the prior written consent of a
Designated Person unless otherwise necessary to protect the interests in the
second property, the interests of the Servicing Rights Owner, or to comply with
applicable investor requirements.

 

8.              Payment Processing:  Unless requested by a Designated Person not
do so, for every CL Loan the Servicer shall take all payment processing actions
in accordance with Applicable Requirements.

 

9.              Communication and Cooperation:  Communication between the
Servicer and Designated Persons shall be conducted in a manner (dependent in
part on the parties at issue in the litigation as well as the law applicable to
that litigation) so as to not waive the attorney-client privilege or the work
product doctrine evidentiary privilege.

 

10.       Loan Modifications:  Unless requested by a Designated Person not do
so, for every CL Loan, the Servicer shall conduct all loan modification efforts
(including but not limited to solicitation, collection of financial documents,
verification of income, underwriting, issuance of denials and other
correspondence as well as trial and permanent modification implementation)
consistent with Applicable Requirements and the Agreement, and applicable law.

 

11.       Credit Reporting:  The Servicer will not take any credit reporting
action related to CL Loans without prior written consent from a Designated
Person.

 

B.            If a new litigation or other dispute resolution mechanism is filed
after the applicable Sale Date that would cause a Mortgage Loan to become a CL
Loan, the Servicer shall provide a copy of the complaint or other operative
pleading or claim to the Servicing Rights Owner at the following email address: 
Group_NRM_OPS@fortress.com (or such other email address as provided from time to
time).    Unless the Servicer and Servicing Rights Owner determine otherwise,
the provisions of this Protocol related to CL Loans shall thereafter apply to
such a litigation or proceeding.

 

C.            For each Mortgage Loan subject to an associated lawsuit that does
not qualify such Mortgage Loan as a CL Loan, the Servicer shall service such
Mortgage Loan consistent with its own litigation procedures, the Agreement, and
applicable law.

 

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

 

D.            The above notwithstanding, the Servicer shall remain obligated to
comply with all applicable law, regulations, and investor requirements with
regard to its servicing of any CL Loans.

 

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

 

EXHIBIT 6

 

QUARTERLY FINANCIAL COVENANTS

 

A.                                    With respect to the Servicer’s financial
condition, as of any date of determination:

 

i.                                          Minimum adjusted net worth for
sellers/servicers (as described in the Fannie Mae Guides and calculated in
accordance with Fannie Mae Guides for sellers/servicers, equal to a minimum of
$100 million.

 

ii.                                       Minimum adjusted net worth for
sellers/servicers (as described in the Fannie Mae Guides) to total assets (as
defined in the Fannie Mae Guides) net of the sum of (i) mortgage warehouse
financings and (ii) to the extent purchase of the Servicing Rights are treated
as a financing by the Seller’s auditors, the related purchase price of the
Servicing Rights as set forth in the MSRPA, are greater than 25% (calculated in
accordance with Fannie Mae Guidelines).

 

iii.                                    Minimum liquidity at least equal to
minimum liquidity requirements for sellers/servicers (calculated in accordance
with Fannie Mae Guidelines).

 

iv.                                   Declines in net worth for
sellers/servicers (as described and calculated in the Fannie Mae Guides) is not
greater than the amount described in the Fannie Mae Guide which would be deemed
a breach of the applicable lender contract); provided that, to the extent Fannie
Mae permits any waivers to any breaches of this covenant, the Servicing Rights
Owner shall be deemed to have granted such waiver to this Quarterly Financial
Covenant.

 

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

 

EXHIBIT 7

 

FORM OF QUARTERLY FINANCIAL COVENANT CERTIFICATION

 

I,                        ,                         of [name of Servicer]
(“Servicer”), do hereby certify that, except as set forth on the bottom of this
certification:

 

(i)                                     Servicer is in compliance with the
Quarterly Financial Covenants set forth in that certain Subservicing Agreement,
dated as of             , by and between New Residential Mortgage LLC and
Servicer (as amended, restated, supplemented or otherwise modified from time to
time, the “Agreement”);

 

(ii)                                  The attached supporting documentation and
backup attached to this Quarterly Financial Covenant Certification with respect
to the financial covenants are true, complete and correct.

 

[EXCEPTIONS TO THE FOREGOING:]

 

Capitalized terms used but not defined herein shall have the meanings assigned
thereto in the Agreement.

 

IN WITNESS WHEREOF, I have signed this certificate.

 

Date:                         , 20   

 

 

[Name of Servicer]

 

By:

                                  ,                               

 

 

 

 

 

 

 

 

 

Name:

 

Title:

 

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

 

EXHIBIT 8

 

FORM OF REPORTS

 

[Provided under separate cover]

 

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

 

EXHIBIT 9

 

FORM OF LIMITED POWER OF ATTORNEY

 

New Residential Mortgage LLC (the “Servicing Rights Owner”), a [         ]
limited liability company, whose address is [            ], constitutes and
appoints [              ] (the “Servicer”), a [          ] limited liability
company, its true and lawful attorney-in-fact, in its name, place and stead to
take the following designated actions in connection with any mortgage loan or
real estate owned property (each, a “Mortgage Loan”) owned by the Servicing
Rights Owner and serviced by the Servicer pursuant to that certain Subservicing
Agreement, dated as of [                  ] between the Servicing Rights Owner
and the Servicer:

 

1.                          To ask, demand, sue for, collect and receive all
sums of money, debts or other obligations of any kind with respect to a Mortgage
Loan which are now or shall after this date become due, owing or payable, or
otherwise belong to the Servicing Rights Owner, to settle and compromise any of
such debts or obligations that may be or become due to the Servicing Rights
Owner, to endorse in the name of the Servicing Rights Owner for deposit in the
appropriate account any instrument payable to or to the order of the Servicing
Rights Owner; in each case with respect to a Mortgage Loan.

 

2.                          To make demand(s) on behalf of the Servicing Rights
Owner upon any or all parties liable on a Mortgage Loan; to declare defaults
with respect to a Mortgage Loan; to give notices of intention to accelerate; to
give notices of acceleration and any other notices as the Servicer deems
reasonably appropriate; to post all notices as required by law and the documents
securing a Mortgage Loan in order to foreclose such Mortgage Loan; to handle all
aspects of foreclosure on behalf of the Servicing Rights Owner, including, but
not limited to, conducting the foreclosure sale, bidding for the Servicing
Rights Owner and executing all documents including all deeds and conveyances,
needed to effect such foreclosure sale and/or liquidation; to execute any
documents or instruments necessary for the offer, listing, closing of sale, and
conveyance of real estate owned property, including, but not limited to, grant,
warranty, quit claim and statutory deeds or similar instruments of conveyance;
to execute any documents or instruments in connection with any bankruptcy or
receivership of a mortgagor on a Mortgage Loan; to file suit and prosecute legal
actions against all parties liable for amounts due under a Mortgage Loan,
including, but not limited to, any deficiency amounts due following foreclosure;
to take such other actions and exercise such rights which may be taken by the
Servicing Rights Owner under the terms of any Mortgage Loan, including, but not
limited to, satisfaction, release, cancellation or discharge of mortgage,
eviction, unlawful detainer, or similar dispossessory proceeding, sale, taking
possession of, release of security instruments, realization upon all or any part
of a Mortgage Loan or any collateral therefor or guaranty thereof; and to
assign, convey, accept or otherwise transfer, the Servicing Rights Owner’s
interest in any Mortgage Loan.

 

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

 

3.                          To perform all other acts and do all other things as
may be reasonably necessary to manage the Mortgage Loans.

 

Nothing herein shall give the attorney-in-fact hereunder the right or power to
negotiate or settle any suit, counterclaim or action against the Servicing
Rights Owner.  The Servicing Rights Owner shall have no obligation to inspect or
review any agreement or other document or item executed by the attorney-in-fact
hereunder on behalf of the Servicing Rights Owner pursuant to this Limited Power
of Attorney and as such, the attorney-in-fact hereunder expressly acknowledges
that the Servicing Rights Owner is relying upon such attorney-in-fact to
undertake any and all necessary procedures to confirm the accuracy of any such
agreement, document or other item.

 

This Limited Power of Attorney shall continue in full force and effect unless
terminated in writing by an officer of the Servicing Rights Owner so authorized
to do so (a “Revocation”).

 

Any third party may rely upon a copy of this Limited Power of Attorney, to the
same extent as if it were an original, and shall be entitled to rely on a
writing signed by the attorney-in-fact hereunder to establish conclusively the
identity of a particular right, power, capacity, asset, liability, obligation,
property, loan or commitment of such attorney-in-fact for all purposes of this
Limited Power of Attorney, unless a Revocation has been recorded in the public
records of the jurisdiction where this Limited Power of Attorney has been
recorded, or unless such third party has received actual written notice of a
Revocation.

 

No attorney-in-fact hereunder shall be obligated to furnish a bond or other
security in connection with its actions hereunder.

 

The Servicing Rights Owner authorizes the Servicer, by and through any of its
directors or officers, or any other employee who is duly authorized by the
Servicer as attorney-in-fact appointed hereunder, to certify, deliver, and/or
record copies and originals of this Limited Power of Attorney.

 

If any provision of this Limited Power of Attorney shall be held invalid,
illegal or unenforceable, the validity, legality or enforceability of each of
the other provisions hereof shall not be affected thereby.

 

[Signature Page Follows]

 

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

 

IN WITNESS WHEREOF, [         ] has caused this Limited Power of Attorney to be
executed and subscribed in its name as of                ,     .

 

 

 

NEW RESIDENTIAL MORTGAGE LLC

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

WITNESS:

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

 

 

WITNESS:

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

 

 

 

 

STATE OF

                                                     

 

)

 

 

 

) ss

COUNTY OF

                                                     

 

)

 

I certify that                           , personally came before me and
acknowledged that he/she, is the
                           of                               and that he/she as
                                being authorized to do so, executed the
foregoing Limited Power of Attorney on behalf of said company.

 

IN WITNESS WHEREOF, I have hereunto set my hand and have affixed my official
seal.

 

 

 

 

 

 

, Notary Public

 

 

My Commission Expires:

 

 

 

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

 

EXHIBIT 10

 

DAILY DATA ELEMENTS

 

#

 

PHH Data Field

 

Area

 

[***]

 

[***]

 

[***]

 

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

EXHIBIT 11

 

SERVICE LEVEL AGREEMENTS

 

Service Level Agreement

 

Service
Level

 

Service
Level Credit

 

Measurement
Window

Advance Reimbursement
(Applicable to FNMA & FHLMC)

 

[***]

 

1

 

[***]

 

Quarterly

 

 

 

 

 

 

 

 

 

Telephone Calls

 

Call Answer Rate
Subservicer shall maintain a minimum answer rate of [***]% (excluding abandons
[***] seconds).

Call Answer Time
The average answer time for incoming calls shall be [***] seconds or less.

Language line available for non-English speaking customers

 

1

 

$

[***]

 

Monthly

 

 

 

 

 

 

 

 

 

Customer Satisfaction Surveys

 

[***]% or more Customers select the Required Rating in response to Question 1 of
the Survey.
1. Surveys = Surveys conducted by PHH at the completion of calls to the PHH
First Mortgage Call Center and the HELOC Call Center that consist of the
following questions: “[***]”

Required Rating = Customer responds with a positive rating of [***] to Question
1 of the Survey. Scores are based on a [***] scale with [***] being the best.

· [***] Positive
· [***] Neutral
· [***] Negative

 

1

 

$

[***]

 

Monthly

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

Escalated Customer Service Issues

 

Escalated Complaint Acknowledgment:
[***]% or more of Level 3 Escalated Complaints Acknowledged to the Customer and
escalated to Investor within Required Time (as contractually agreed upon) or
[***] Business Day following receipt of the Escalated Complaint by OOP. Office
of the President (OOP) = centralized contact to address Escalated Complaints and
Regulatory Complaints for PHH. For each Escalated Complaint and Regulatory
Complaint, the OOP shall maintain a detailed log of the specific of the issues,
status and resolution. PHH personnel shall promptly transfer all Escalated and
Regulatory Complaints to the OOP.

 

2

 

$

[***]

 

Quarterly

 

 

 

 

 

 

 

 

 

System Availability (Doc Viewer/Web Direct)

 

Web Direct, Doc Viewer, PHHMyWay >= [***]% Monthly Average (not to include
scheduled maintenance) during Measurement Window

The Servicer shall provide the Servicing Rights Owner at least [***] Business
Days’ notice prior to any scheduled maintenance or other scheduled access
interruption of website portals; provided that the Servicer shall [***] notify
the Servicing Rights Owner of any unscheduled access interruptions.

The Servicer shall use commercially reasonable efforts to address any access or
availability issues on the [***] Business Day on which such issues arises.

During any such unscheduled access interruptions, the Servicer shall use
commercially reasonable efforts to provide Servicing Rights Owner certain
reports and data in an alternative medium.

 

2

 

$

[***]

 

Monthly

 

 

 

 

 

 

 

 

 

Foreclosure Referrals

 

[***]

 

2

 

$

[***]

 

Quarterly

 

 

 

 

 

 

 

 

 

Foreclosure Timelines

 

[***]

 

2

 

$

[***]

 

Quarterly

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

Response Times- Customer Requests/Inquiries

 

PHH will respond within the time period indicated [***]% of the time. Time
period begins from the date of PHH’s receipt of the request

 

 

 

 

 

 

 

1.

Lien Satisfaction — within [***]% of state guidelines

 

 

 

 

 

 

 

2.

Address change requests including:
- First Mortgage — [***] business days
- HELOC — [***] business days

 

 

 

 

 

 

 

 

In each case, measurement begins after PHH receives the properly completed
address change authorization

 

 

 

 

 

 

 

3.

Account history requests — [***] business days

 

3

 

[***]

 

Monthly

 

4.

Credit bureau disputes — [***] business days to research and send correction to
the credit bureau and/or send explanation letter to the customer.

 

 

 

 

 

 

 

5.

Missing payment inquiry — [***] business days

 

 

 

 

 

 

 

6.

Monetary adjustments — [***] business days

 

 

 

 

 

 

 

7.

Non-monetary adjustments — [***] business days

 

 

 

 

 

 

 

8.

Payoff letter request — [***] business days after PHH receives the properly
completed customer authorization form.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Facing Website — Web Availability

 

Consumer Facing Website online with a Monthly average availability greater than
or equal to [***]%. Measurement window is [***]. All scheduled maintenance will
occur outside of operating hours. Availability for the purpose of the service
level shall be calculated exclusive of scheduled service outages and emergency
maintenance.

 

3

 

[***]

 

Monthly

 

 

 

 

 

 

 

 

 

QWR/NOE/RFI

 

QWR/NOE/RFI All valid borrower inquiries are acknowledged within [***] business
days: and resolved within [***] business days or within a total of [***]
business days if an extension is required in accordance with the Subservicing
Compliance Requirements.

 

3

 

[***]

 

Monthly

 

 

 

 

 

 

 

 

 

Continuous Monitoring

 

PHH to provide daily continuous monitoring data to NRM for the following areas
(data fields to be agreed upon between PHH and NRM)

 

2

 

$

[***]

 

Monthly

 

 

 

 

 

 

 

 

 

Bankruptcy

 

PHH to perform daily update of bankruptcy information from LexisNexis (Banko),
Pacer, or equivalent service. All MFRs, Contractual and bankruptcy planning
related ledgers meet FNMA Guidelines. In addition, filing performance must be
met for the following timelines:

 

2

 

$

[***]

 

Quarterly

 

 

1.

[***]% of POCs filed within [***] days of bar date

 

 

 

 

 

 

 

 

2.

[***]% of payment change notices filed within [***] days of

 

 

 

 

 

 

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

 

 

 

payment change. This includes both interest and escrow related changes

 

 

 

 

 

 

 

 

3.

[***]% of PPFN filed within [***] days of service being incurred, minimum
threshold of $[***].

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[***]% of all expenses will be filed within FNMA guideline of [***] days of the
applicable milestone, for conventional loans [***] days after one of the
following:

 

 

 

 

 

 

Claims

 

·

Completion of a workout option

 

2

 

$[***]

 

Quarterly

 

 

·

Third party sale completed

 

 

 

 

 

 

 

 

·

Date mortgage is reinstated or paid off

 

 

 

 

 

 

 

 

·

FNMA disposes of property acquired through foreclosure of FNMA mortgage release

 

 

 

 

 

 

 

PHH shall perform the Subservicing Services in accordance with the Service
Levels. PHH shall monitor, measure, collect and report performance against the
Services Levels beginning with the transfer of servicing and provide reporting
within [***] days after month end.

 

In the event of a Service Level Default, the following shall apply:

 

(a) Level 1 Service Level Defaults. If PHH’s performance results in a Service
Level Default with respect to a Level 1 Service Level, then PHH shall (i) pay
the applicable Service Level Credit and (ii) promptly conduct a root cause
analysis and prepare and provide for its review and approval a formal written
remediation plan (including remediation time frames) designed to remediate the
cause of the failure and prevent the reoccurrence of such Service Level Default
(“Remediation Plan”). PHH shall promptly implement the final Remediation Plan at
PHH’s sole cost.

 

(b) Level 2 Service Level Defaults. If PHH’s performance results in a Service
Level Default with respect to a Level 2 Service Level for [***] calendar months,
then PHH shall provide a written plan of corrective actions to be implemented
within [***] calendar days, including a mutually agreed upon date by which such
plan shall be implemented. PHH shall also pay the applicable Service Level
Credit. If PHH fails to meet the same Level 2 Service Level for any [***] or
more calendar months in a rolling twelve month period, then PHH shall refund the
applicable Service Level Credit for the applicable month and promptly conduct a
root cause analysis and prepare and provide for its review and approval a
Remediation Plan. PHH may implement at PHH’s sole cost the Remediation Plan in
order to address the Service Level Default, pending receipt of a response from
client. Upon receipt of client response, PHH promptly shall implement the final
Remediation Plan at PHH’s sole cost.

 

(c) Level 3 Service Level Defaults. If PHH performance results in a Service
Level Default with respect to a Level 3 Service Level for [***] consecutive
reporting periods, PHH shall provide client with a written plan of corrective
actions to be implemented within [***] calendar days, including a mutually
agreed upon date by which such plan shall be implemented. Notwithstanding the
foregoing, if the failure has not be remedied and the Service Level fully
satisfied within [***], PHH will provide a Service Fee Credit of $[***] and
continue until remediated to the agreed upon performance standard.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

EXHIBIT 12

 

LIST AND TIMING OF REPORTS

 

Report

 

Frequency

 

Day of receipt

 

[***]

 

[***]

 

[***]

 

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

 

EXHIBIT 13

 

VENDOR LISTS

 

Service Provider

 

Description of
Services Provided

 

Vendor Work Site(s)

 

Risk Ranking

 

[***]

 

[***]

 

[***]

 

[***]

 

 

Law Firm

 

Risk Ranking

 

Jurisdiction

Aldridge Pite

 

[***]

 

FL/GA/CA/OR/UT

Fein Such Law Group

 

[***]

 

NJ/NY

Feiwell & Hannoy]

 

[***]

 

IN

Hunt Leibert & Jacobson

 

[***]

 

CT

Korde & Associates

 

[***]

 

MA/NH/RI

Lerner Sampson & Rothfuss

 

[***]

 

OH/KY

Malcolm Cisneros

 

[***]

 

CA/AZ/NV/OR

McCabe Weisberg & Conway

 

[***]

 

NJ/NY/PA

Phelan Hallinan Diamond & Jones

 

[***]

 

FL/GA/NJ/PA

Pincus Law Group

 

[***]

 

NY

Rogers Townsend & Thomas

 

[***]

 

SC

Samuel I. White

 

[***]

 

DC/MD/VA/WV

Shapiro & Brown

 

[***]

 

MD/VA

Shapiro & Ingle

 

[***]

 

AL/NC/TN

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

Shapiro & Kreisman

 

[***]

 

IL

Shapiro Denardo

 

[***]

 

NJ/PA

Shapiro DiCaro & Barak

 

[***]

 

NY

Shapiro Fishman & Gache

 

[***]

 

FL

Shapiro Van Ess Phillips & Barragate

 

[***]

 

KY/OH/IN

 

Ballard, Spahr - PA

Birch, de Jongh

Bryan Cave

Burr & Forman

Cades Schutte

Chuck & Tsoong

DLA Piper

Richard H. Dollison

Duane Morris LLP

Dudley Topper Feuerz

Michelle Ghidotti

Goodwin Procter

Herold Law

Hinshaw & Culberson

Katten

Lane Powell

LeClair Ryan

Lewis Brisbois

Lindquist & Venom

Malcolm & Cisneros

McElroy Deutsch

McGlinchy Stafford

Moran Karamouzis LLP

Moulton Bellingham

Pierce Couch

Primmer Piper

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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

 

Quarles & Brady LLP

Quattlebaum Grooms

Reed Smith LLP

Riker Danzig

Schwabe Williamson

Severson Werson

Sirote & Permutt

Spilman Thomas & Battle

Stern & Eisenberg

Weltman Weinberg

Robert E. Weiss, Inc

Samuel I. White

Williams Mullen

Womble Carlyle Sandridge

 

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

 

EXHIBIT 14

 

Form of Quarterly Certificate

 

In my role as the Chief Risk and Compliance Officer for PHH Corporation (the
“Company”), I am responsible for overseeing the Company’s compliance program,
including aspects of the program related to the Consent Order Pursuant to New
York Banking Law § 44, among the New York State Department of Financial
Services, PHH Mortgage Corporation (“PHH Mortgage”) and PHH Home Loans, LLC
(“PHH Home Loans”), dated as of November 9, 2016 (the “DFS Consent Order”) and I
hereby certify that during the period [.        to.        ], to my knowledge
after due inquiry, the Company has been in compliance with the DFS Consent Order
in all material respects.

 

 

Executed on [Insert Date]

 

 

 

 

 

[               ]

 

Chief Risk and Compliance Officer

 

PHH Mortgage Corporation

 

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EXHIBIT 15

 

ADVANCE STANDARDS

 

[***]

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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