Exhibit 10.9
MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
dated as of January 1, 2006
between
RWT HOLDINGS, INC.,
Purchaser
PHH MORTGAGE CORPORATION
(formerly known as Cendant Mortgage Corporation) and
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST
(formerly known as Cendant Residential Mortgage Trust)
Sellers
and
REDWOOD TRUST, INC.
Guarantor

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TABLE OF CONTENTS

              Page
ARTICLE I: DEFINITIONS
    1  
Section 1.01 Defined Terms
    1  
 
       
ARTICLE II: SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS
    13  
Section 2.01 Sale and Conveyance of Mortgage Loans
    13  
Section 2.02 Possession of Mortgage Files
    14  
Section 2.03 Books and Records
    15  
Section 2.04 Defective Documents; Delivery of Mortgage Loan Documents
    15  
Section 2.05 Transfer of Mortgage Loans
    16  
 
       
ARTICLE III: REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REPURCHASE
AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS
    18  
Section 3.01 Representations and Warranties of each Seller
    18  
Section 3.02 Representations and Warranties of the Servicer
    20  
Section 3.03 Representations and Warranties as to Individual Mortgage Loans
    20  
Section 3.04 Repurchase and Substitution
    29  
Section 3.05 Certain Covenants of each Seller and the Servicer
    30  
 
       
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND CONDITIONS
PRECEDENT TO FUNDING
    31  
Section 4.01 Representations and Warranties
    31  
Section 4.02 Conditions Precedent to Closing
    33  
 
       
ARTICLE V: ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
    34  
Section 5.01 PHH Mortgage to Act as Servicer; Servicing Standards; Additional
Documents; Consent of the Purchaser
    34  
Section 5.02 Collection of Mortgage Loan Payments
    36  
Section 5.03 Reports for Specially Serviced Mortgage Loans and Foreclosure Sales
    36  
Section 5.04 Establishment of Collection Account; Deposits in Collection Account
    36  
Section 5.05 Permitted Withdrawals from the Collection Account
    37  
Section 5.06 Establishment of Escrow Accounts; Deposits in Escrow
    39  

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              Page
Section 5.07 Permitted Withdrawals From Escrow Accounts
    39  
Section 5.08 Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Insurance Policies; Collections Thereunder
    39  
Section 5.09 Transfer of Accounts
    41  
Section 5.10 Maintenance of Hazard Insurance
    41  
Section 5.11 Maintenance of Mortgage Impairment Insurance Policy
    42  
Section 5.12 Fidelity Bond; Errors and Omissions Insurance
    42  
Section 5.13 Management of REO Properties
    43  
Section 5.14 Sale of Specially Serviced Mortgage Loans and REO Properties
    45  
Section 5.15 Realization Upon Specially Serviced Mortgage Loans and REO
Properties
    45  
Section 5.16 Investment of Funds in the Collection Account
    47  
Section 5.17 Compensating Interest
    48  
 
       
ARTICLE VI: REPORTS; REMITTANCES; ADVANCES
    48  
Section 6.01 Remittances
    48  
Section 6.02 Reporting
    49  
Section 6.03 Monthly Advances by the Servicer
    49  
Section 6.04 Non-recoverable Advances
    50  
Section 6.05 Itemization of Servicing Advances
    50  
Section 6.06 Officer’s Certificate
    50  
 
       
ARTICLE VII: GENERAL SERVICING PROCEDURE
    50  
Section 7.01 Enforcement of Due-on-Sale Clauses, Assumption Agreements
    50  
Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files
    51  
Section 7.03 Servicing Compensation
    51  
Section 7.04 Annual Compliance Statement
    52  
Section 7.05 Annual Assessment of Compliance and Attestation Report
    52  
Section 7.06 Purchaser’s Right to Examine Servicer Records
    52  
Section 7.07 Additional Requirements in Connection With Securitization
Transactions
    53  
 
       
ARTICLE VIII: REPORTS TO BE PREPARED BY THE SERVICER
    52  
Section 8.01 The Servicer’s Reporting Requirements
    52  
Section 8.02 Financial Statements
    53  
 
       
ARTICLE IX: THE SELLERS
    54  

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              Page
Section 9.01 Indemnification; Third Party Claims
    54  
Section 9.02 Merger or Consolidation of the Seller
    54  
Section 9.03 Limitation on Liability of the Sellers and Others
    55  
Section 9.04 Servicer Not to Resign
    55  
 
       
ARTICLE X: DEFAULT
    55  
Section 10.01 Events of Default
    55  
 
       
ARTICLE XI: TERMINATION
    57  
Section 11.01 Term and Termination
    57  
Section 11.02 Survival
    57  
 
       
ARTICLE XII: ARTICLE XII: GENERAL PROVISIONS
    58  
Section 12.01 Successor to the Servicer
    58  
Section 12.02 Governing Law
    58  
Section 12.03 Notices
    58  
Section 12.04 Severability of Provisions
    59  
Section 12.05 Schedules and Exhibits
    59  
Section 12.06 General Interpretive Principles
    59  
Section 12.07 Waivers and Amendments, Noncontractual Remedies; Preservation of
Remedies
    60  
Section 12.08 Captions
    60  
Section 12.09 Counterparts; Effectiveness
    60  
Section 12.10 Entire Agreement; Amendment
    60  
Section 12.11 Further Assurances
    60  
Section 12.12 Intention of the Seller
    61  
Section 12.13 Guaranty of Purchaser’s Obligations
    61  

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SCHEDULES

     
A.
  Mortgage Loan Schedule
B.
  Content of Mortgage File
B-1
  Purchaser’s Mortgage File
C.
  Cendant Guidelines and Restrictions

EXHIBITS

      Exhibit 2.05   Form of Assignment, Assumption and Recognition Agreement
Exhibit 5.03(a)
  Report P-4DL
Exhibit 5.03(b)
  Report S-5L2
Exhibit 5.03(c)
  Form of Notice of Foreclosure
Exhibit 5.04-1
  Form of Collection Account Certification
Exhibit 5.04-2
  Form of Collection Account Letter Agreement
Exhibit 5.06-1
  Form of Escrow Account Certification
Exhibit 5.06-2
  Form of Escrow Account Letter Agreement
Exhibit 6.02(a)
  Report P-139 — Monthly Statement of Mortgage Accounts
Exhibit 6.02(b)
  Report S-50Y — Private Pool Detail Report
Exhibit 6.02(c)
  Report S-213 — Summary of Curtailments Made Remittance Report
Exhibit 6.02(d)
  Report S-214 — Summary of Paid in Full Remittance Report
Exhibit 6.02(e)
  Report S-215 — Consolidation of Remittance Report
Exhibit 6.02(f)
  Report T-62C — Monthly Accounting Report
Exhibit 6.02(g)
  Report T-62E — Liquidation Report
Exhibit 8.01
  Report P-195 Delinquency Report
Exhibit 9
  Form of Officer’s Certificate
Exhibit 10
  Form of Warranty Bill of Sale
Exhibit 11
  Form of Assessment of Compliance
Exhibit 12
  Form of Back-Up SOX Certificate

iv

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MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
     This Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of
January 1, 2006, is entered into between RWT Holdings, Inc., as the Purchaser
(“Purchaser”), PHH Mortgage Corporation (formerly known as“Cendant Mortgage” and
referred to herein as “PHH Mortgage) and Bishop’s Gate Residential Mortgage
Trust (formerly known as Cendant Residential Mortgage Trust) (the “Trust,”
together with PHH Mortgage, the “Sellers” and individually, each a “Seller”), as
the Sellers, and Redwood Trust, Inc., as the Guarantor (“Guarantor”).
PRELIMINARY STATEMENT
     1. PHH Mortgage is engaged in the business, inter alia, of making loans to
individuals, the repayment of which is secured by a first lien mortgage on such
individuals’ residences (each, a “Mortgage Loan”). The Trust is engaged in the
business of purchasing such Mortgage Loans from PHH Mortgage and selling same to
investors.
     2. Purchaser is engaged in the business, inter alia, of purchasing Mortgage
Loans for its own account.
     3. PHH Mortgage has established certain terms, conditions and loan
programs, as described in PHH Mortgage’ s Program and Underwriting Guidelines
(the “PHH Guide”) and Purchaser is willing to purchase Mortgage Loans that
comply with the terms of such terms, conditions and loan programs. The
applicable provisions of the PHH Guide are attached hereto as Schedule C.
     4. Purchaser and Sellers desire to establish a flow program whereby PHH
Mortgage will make Mortgage Loans which meet the applicable provisions of the
Cendant Guide, and Purchaser will, on a regular basis, purchase such Mortgage
Loans from PHH Mortgage or the Trust, as applicable, provided the parties agree
on the price, date and other conditions or considerations as set forth in this
Agreement.
     5. Purchaser and Sellers wish to prescribe the terms and manner of purchase
by the Purchaser and sale by the Sellers of the Mortgage Loans, and the
management and servicing of the Mortgage Loans by PHH Mortgage, as the Servicer
(the “ Servicer”), in this Agreement.
     NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, the Purchaser and the Sellers agree as follows:
ARTICLE I:
DEFINITIONS
     Section 1.01 Defined Terms. Whenever used in this Agreement, the following
words and phrases shall have the following meaning specified in this Article:
     “Acceptance of Assignment and Assumption of Lease Agreement”: The specific
agreement creating a first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease securing a Cooperative Loan.

1

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     “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.
     “Agreement”: This Mortgage Loan Flow Purchase, Sale & Servicing Agreement
between the Purchaser, the Sellers and the Guarantor.
     “ALTA”: The American Land Title Association.
     “Appraised Value”: With respect to any Mortgaged Property, the lesser of:
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of FNMA and FHLMC; or (ii) the
purchase price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan; provided that, in the case of a Refinanced
Mortgage Loan, such value of the Mortgaged Property shall be based solely upon
the value determined by an appraisal made for the originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an
appraiser who met the minimum requirements of FNMA and FHLMC.
     “ARM Loan”: An “adjustable rate” Mortgage Loan, the Note Rate of which is
subject to periodic adjustment in accordance with the terms of the Mortgage
Note.
     “Assignment”: An individual assignment of a Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale or transfer of the Mortgage Loan.
     “Assignment of Proprietary Lease”: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease.
     “Assessment of Compliance”: The statement as defined in Section 7.05
hereto.
     “Attestation Report”: The report as defined in Section 7.05 hereto.
     “Assignment of Recognition Agreement”: With respect to a Cooperative Loan,
an assignment of the Recognition Agreement sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Recognition Agreement.
     “Back-Up SOX Certificate”: The certificate as defined in Section 7.07
hereto.
     “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.

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     “Business Day”: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which the Federal Reserve is closed.
     “Cendant Guide”: As defined in paragraph 3 of the Preliminary Statement to
this Agreement.
     “Code”: The Internal Revenue Code of 1986, as amended.
     “Collection Account”: The separate trust account or accounts created and
maintained pursuant to Section 5.04 which shall be entitled “PHH Mortgage
Corporation, as servicer and custodian for the Purchaser of Mortgage Loans under
the Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of
January 1, 2006.”
     “Compliance Statement”: The statement as defined in Section 7.04 hereto.
     “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.
     “Consent”: A document executed by the Cooperative Corporation
(i) consenting to the sale of the Cooperative Unit to the Mortgagor and
(ii) certifying that all maintenance charges relating to the Cooperative Unit
have been paid.
     “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 Proprietary Leases or similar arrangements.
     “Cooperative Lien Search”: A search for (a) federal tax liens, mechanics’
liens, lis pendens, judgments of record or otherwise against (i) the Cooperative
Corporation and (ii) the seller of the Cooperative Unit, (b) filings of
Financing Statements and (c) the deed of the Cooperative Project into the
Cooperative Corporation.
     “Cooperative Loan”: A Mortgage Loan that is secured by a first lien on and
a perfected security interest in Cooperative Shares and the related Proprietary
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 Shares”: 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.

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     “Credit Documents”: Those documents, comprising part of the Mortgage File,
required of the Mortgagor, as described in Section 2 (Specific Loan Program
Guidelines) of the Cendant Guide. The Credit Documents are specified on
Schedule B-3 hereto.
     “Cut-off Date” : The first day of the month in which the respective Funding
Date occurs.
     “Defective Mortgage Loan”: As defined in Section 3.04(3).
     “Deleted Mortgage Loan”: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
     “Depositor”: With respect to any Securitization Transaction, the
“depositor”, if any, specified by the Purchaser and identified in related
transaction documents.
     “Determination Date”: The 15th day of each calendar month, commencing on
the 15th day of the month following the Funding Date, or, if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day.
     “Distribution Report”: In connection with any Securitization Transaction, a
distribution report on Form 10-D required to be filed with the SEC under
Regulation AB.
     “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 period commencing
on the first day of the month immediately preceding the month of such Remittance
Date and ending on the last day of the month immediately preceding the month of
such Remittance Date.
     “Eligible Account”: One or more accounts (i) that are maintained with a
depository institution the long-term unsecured debt obligations of which have
been rated by each Rating Agency in one of its two highest rating categories at
the time of any deposit therein, (ii) that are trust accounts with any
depository institution held by the depository institution in its capacity as a
corporate trustee, or (iii) the deposits in which are insured by the FDIC (to
the limits established by the FDIC) and the uninsured deposits in which are
otherwise secured such that the Purchaser has a claim with respect to the funds
in such accounts or a perfected first security interest against any collateral
securing such funds that is superior to claims of any other depositors or
creditors of the depository institution with which such accounts are maintained.
In addition, solely with respect to Mortgage Loans which are not part of a
securitization, “Eligible Account” shall include any accounts that meet the
standards established from time to time by FNMA for eligible custodial
depositories.
     “Environmental Assessment”: A “Phase I” environmental assessment of a
Mortgaged Property prepared by an Independent Person who regularly conducts
environmental assessments and who has any necessary license(s) required by
applicable law and has five years experience in conducting environmental
assessments.
     “Environmental Conditions Precedent to Foreclosure”: As defined in Section
5.15.
     “Environmental Laws”: All federal, state, and local statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees or other governmental
restrictions relating to the

4

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environment or to emissions, discharges or releases of pollutants, contaminants
or industrial, toxic or hazardous substances or wastes into the environment,
including ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or industrial, toxic
or hazardous substances or wastes or the cleanup or other remediation thereof.
     “Escrow Account”: The separate trust account or accounts created and
maintained pursuant to Section 5.06 which shall be entitled “PHH Mortgage
Corporation, as servicer and custodian for the Purchaser under the Mortgage Loan
Flow Purchase, Sale & Servicing Agreement, dated as of August 1, 2002 (as
amended), and various mortgagors.”
     “Escrow Payments”: The amounts constituting ground rents, taxes,
assessments, water rates, mortgage 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.
     “Estoppel Letter”: A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant Proprietary
Lease will be in full force and effect as of the date of issuance thereof,
(ii) the related Stock Certificate was registered in the Mortgagor’s name and
the Cooperative Corporation has not been notified of any lien upon, pledge of,
levy of execution on or disposition of such Stock Certificate, and (iii) the
Mortgagor is not in default under the appurtenant Proprietary Lease and all
charges due the Cooperative Corporation have been paid.
     “Event of Default”: Any one of the conditions or circumstances enumerated
in Section 10.01.
     “Exchange Act”: The Securities Exchange Act of 1934, as amended.
     “FDIC”: The Federal Deposit Insurance Corporation or any successor
organization.
     “FHLMC”: The Federal Home Loan Mortgage Corporation (also known as Freddie
Mac) or any successor organization.
     “FHLMC Servicing Guide”: The FHLMC/Freddie Mac Sellers’ and Servicers’
Guide in effect on and after the Funding Date.
     “Fidelity Bond”: A fidelity bond to be maintained by the Servicer pursuant
to Section 5.12.
     “Financing Statement”: A financing statement in the form of a UCC-1 filed
pursuant to the Uniform Commercial Code to perfect a security interest in the
Cooperative Shares and Pledge Instruments.
     “Financing Statement Change”: A financing statement in the form of a UCC-3
filed to continue, terminate, release, assign or amend an existing Financing
Statement.
     “FNMA”: The Federal National Mortgage Association (also known as Fannie
Mae) or any successor organization.

5

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     “FNMA Guide”: The FNMA/Fannie Mae Selling Guide and the Servicing Guide,
collectively, in effect on and after the Funding Date.
     “Funding Date”: Each date (up to four per month) that Purchaser purchases
Mortgage Loans from the Sellers hereunder.
     “Gross Margin”: With respect to each ARM Loan, the fixed percentage added
to the Index on each Rate Adjustment Date, as specified in each related Mortgage
Note and listed in the Mortgage Loan Schedule.
     “Guarantor”: Redwood Trust, Inc., or its successor in interest.
     “Independent”: With respect to any specified Person, such Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in the applicable Mortgagor, the Sellers, the Purchaser, or
their Affiliates; and (b) is not connected with the applicable Mortgagor, the
Sellers, the Purchaser, or their respective Affiliates as an officer, employee,
promoter, underwriter, trustee, member, partner, shareholder, director, or
Person performing similar functions.
     “Index”: With respect to each ARM Loan, on each Rate Adjustment Date, the
applicable rate index set forth on the Mortgage Loan Schedule, which shall be an
index described on such Mortgage Loan Schedule.
     “Insolvency Proceeding”: With respect to any Person: (i) any case, action,
or proceeding with respect to such Person before any court or other 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.
     “Insurance Proceeds”: Proceeds of any Primary Insurance Policy, title
policy, hazard policy or other insurance policy covering a Mortgage Loan, if
any, to the extent such proceeds are not to be applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing mortgage loans held for
its own or its Affiliates’ account or managed by it for third-party
institutional investors.
     “Legal Documents”: Those documents, comprising part of the Mortgage File,
set forth in Schedule B-1 of this Agreement.
     “Lender-Paid Mortgage Insurance Rate”: With respect to any Mortgage Loan,
the Lender-Paid Mortgage Insurance Rate for any “lender-paid” Primary Insurance
Policy shall be a per annum rate equal to the percentage indicated on the
Mortgage Loan Schedule.
     “Liquidation Proceeds”: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received by the Servicer in connection with the
liquidation of a defaulted Mortgage Loan through trustee’s sale, foreclosure
sale or otherwise, other than amounts received following the acquisition of an
REO Property in accordance with the provisions hereof.

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     “Loan-to-Value Ratio” or “LTV”: With respect to any Mortgage Loan, the
original principal balance of such Mortgage Loan divided by the lesser of the
Appraised Value of the related Mortgaged Property or the purchase price. The
Loan-to-Value Ratio of any Additional Collateral Mortgage Loan (as defined in
Exhibit 11 hereto) shall be calculated by reducing the principal balance of such
Additional Collateral Mortgage Loan by the amount of Additional Collateral (as
defined in Exhibit 11 hereto) with respect to such Mortgage Loan.
     “MAI Appraiser”: With respect to any real property, a member of the
American Institute of Real Estate Appraisers with a minimum of 5 years of
experience appraising real property of a type similar to the real property being
appraised and located in the same geographical area as the real property being
appraised.
     “Master Servicer”: With respect to any Securitization Transaction, the
“master servicer”, if any, identified by the Purchaser and identified in related
transaction documents.
     “Maximum Rate”: With respect to each ARM Loan, the rate per annum set forth
in the related Mortgage Note as the maximum Note Rate thereunder. The Maximum
Rate as to each ARM Loan is set forth on the related Mortgage Loan Schedule.
     “Minimum Rate”: With respect to each ARM Loan, the rate per annum set forth
in the related Mortgage Note as the minimum Note Rate thereunder. The Minimum
Rate as to each ARM Loan is set forth on the related Mortgage Loan Schedule.
     “Monthly Advance”: The aggregate amount of the advances made by the
Servicer on any Remittance Date pursuant to and as more fully described in
Section 6.03.
     “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.
     “Monthly Period”: Initially, the period from the Funding Date through to
and including the first Record Date during the term hereof, and, thereafter, the
period commencing on the day after each Record Date during the term hereof and
ending on the next succeeding Record Date during the term hereof (or, if
earlier, the date on which this Agreement terminates).
     “Mortgage”: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first 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
Proprietary Lease and related Cooperative Shares, which in either case secures
the Mortgage Note.
     “Mortgaged Property”: With respect to a Mortgage Loan, the underlying real
property securing repayment of a Mortgage Note, consisting of a fee simple
estate.
     “Mortgage File”: With respect to a particular Mortgage Loan, those
origination and servicing documents, escrow documents, and other documents as
are specified on Schedule B-1 to this Agreement and any additional documents
required to be added to the Mortgage File pursuant to the related Purchase Price
and Terms Letter.
     “Mortgage Loan”: Each individual mortgage loan or Cooperative Loan
(including all documents included in the Mortgage File evidencing the same, all
Monthly Payments, Principal

7

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Prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds,
and other proceeds relating thereto, and any and all rights, benefits, proceeds
and obligations arising therefrom or in connection therewith) which is the
subject of this Agreement and the related Purchase Price and Terms Letter. The
Mortgage Loans subject to this Agreement shall be identified on Mortgage Loan
Schedules prepared in connection with each Funding Date.
     “Mortgage Loan Schedule”: The list of Mortgage Loans identified on each
Funding Date that sets forth the information with respect to each Mortgage Loan
that is specified on Schedule A hereto (as amended from time to time to reflect
the addition of any Qualified Substitute Mortgage Loans). A Mortgage Loan
Schedule will be prepared for each Funding Date.
     “Mortgage Note”: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
     “Mortgagor”: The obligor on a Mortgage Note.
     “Negative Amortization”: That portion of interest accrued at the Note Rate
in any month which exceeds the Monthly Payment on the related Mortgage Loan for
such month and which, pursuant to the terms of the Mortgage Note, is added to
the principal balance of the Mortgage Loan.
     “Non-recoverable Advance”: As of any date of determination, any Monthly
Advance or Servicing Advance previously made or any Monthly Advance or Servicing
Advance proposed to be made in respect of a Mortgage Loan which, in the good
faith judgment of the Servicer and in accordance with the servicing standard set
forth in Section 5.01, will not or, in the case of a proposed advance, would not
be ultimately recoverable pursuant to Section 5.05 (3) or (4) hereof. The
determination by the Servicer that it has made a Non-recoverable Advance or that
any proposed advance would constitute a Non-recoverable Advance shall be
evidenced by an Officer’s Certificate satisfying the requirements of Section
6.04 hereof and delivered to the Purchaser on or before the Determination Date
in any month.
     “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.
     “Offering Materials”: All documents, tapes, or other materials relating to
the Mortgage Loans provided by Seller to Purchaser prior to Purchaser submitting
its bid to purchase the Mortgage loans.
     “Officers’ Certificate”: A certificate signed by (i) the President or a
Vice President and (ii) the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered by the
Servicer to the Purchaser as required by this Agreement.
     “Payment Adjustment Date”: The date on which Monthly Payments shall be
adjusted. Payment Adjustment Date shall occur on the date which is eleven months
from the first payment date for the Mortgage Loan, unless otherwise specified in
the Mortgage Note, and on each anniversary of such first Payment Adjustment
Date.
     “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

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Loan, all accrued and unpaid prepayment penalties, premiums, and/or interest
with respect thereto, and all other unpaid sums due with respect to such
Mortgage Loan.
     “Periodic Rate Cap”: With respect to each ARM Loan, the provision in each
Mortgage Note that limits permissible increases and decreases in the Note Rate
on any Rate Adjustment Date to not more than ‘a specified’ percentage point.
     “Permitted Investments”: Investments that mature, unless payable on demand,
not later than the Business Day preceding the related Remittance Date; provided
that such investments shall only consist of the following:
     (i) direct obligations of, or obligations fully guaranteed as to principal
and interest by, the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and credit of the United
States;
     (ii) repurchase obligations (the collateral for which is held by a third
party) with respect to any security described in clause (i) above, provided that
the long-term unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in one of its two
highest rating categories;
     (iii) certificates of deposit, time deposits and bankers’ acceptances of
any bank or trust company incorporated under the laws of the United States or
any state, provided that the long-term unsecured debt obligations of such bank
or trust company (or, in the case of the principal depository institution of a
depository institution holding company, the long-term unsecured debt obligations
of the depository institution holding company) at the date of acquisition
thereof have been rated by each Rating Agency in one of its two highest rating
categories;
     (iv) commercial paper (having original maturities of not more than
365 days) of any corporation incorporated under the laws of the United States or
any state thereof which on the date of acquisition has been rated by each Rating
Agency in its highest rating category; and
     (v) any other demand, money market or time deposit account or obligation,
or interest-bearing or other security or investment, acceptable to the Purchaser
(such acceptance evidenced in writing);
provided further that “Permitted Investments” shall not include any instrument
described hereunder which evidences either the right to receive (a) only
interest with respect to the obligations underlying such instrument or (b) both
principal and interest payments derived from obligations underlying such
instrument and the interest and principal payments with respect to such
instrument provide a yield to maturity at par greater than 120% of the yield to
maturity at par of the underlying obligations.
     “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.

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     “Pledge Instruments”: With respect to each Cooperative Loan, the Stock
Power, the Assignment of the Proprietary Lease, the Assignment of the Mortgage
Note and the Acceptance of Assignment and Assumption of Lease Agreement.
     “Prepaid Monthly Payment”: Any Monthly Payment received prior to its
scheduled Due Date and which is intended to be applied to a Mortgage Loan on its
scheduled Due Date.
     “Primary Insurance Policy”: Each primary policy of mortgage insurance in
effect with respect to a Mortgage Loan and as so indicated on the Mortgage Loan
Schedule, or any replacement policy therefor obtained by the Servicer pursuant
to Section 5.08.
     “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 prepayment penalty or 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.
     “Proprietary Lease”: The lease on a Cooperative Unit evidencing the
possessory interest of the owner of the Cooperative Shares in such Cooperative
Unit.
     “Purchase Price and Terms Letter”: With respect to any pool of Mortgage
Loans purchased and sold on any Funding Date, the letter agreement between the
Purchaser and Seller (including any exhibits, schedules and attachments
thereto), setting forth the terms and conditions of such transaction and
describing the Mortgage Loans to be purchased by the Purchaser on such Funding
Date. A Purchase Price and Terms Letter may relate to more than one pool of
Mortgage Loans to be purchased on one or more Funding Dates hereunder.
     “Purchaser”: RWT Holdings, Inc., or its successor in interest or any
successor under this Agreement appointed as herein provided.
     “Purchaser’s Account”: The account of the Purchaser at a bank or other
entity most recently designated in a written notice by the Purchaser to the
Sellers as the “Purchaser’s Account.”
     “Purchase Price”: As to each Mortgage Loan to be sold hereunder, the price
set forth in the Mortgage Loan Schedule and the related Purchase Price and Terms
Letter.
     “Qualified Mortgage Insurer”: American Guaranty Corporation, Commonwealth
Mortgage Assurance Company, General Electric Mortgage Insurance Companies,
Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance Company,
Republic Mortgage Insurance Company or United Guaranty Residential Insurance
Corporation.
     “Qualified Substitute Mortgage Loan”: A Mortgage Loan substituted by a
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
(i) have an outstanding principal balance, after deduction of all scheduled
payments due and received in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Unpaid Principal Balance of
the Deleted Mortgage Loan and not less than ninety percent (90%) of the Unpaid
Principal Balance of the Deleted Mortgage Loan (the amount of any shortfall to
be distributed by the

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applicable Seller to the Purchaser in the month of substitution), (ii) have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan, (iii) have a Note Rate not less than
(and not more than one percentage point greater than) the Note Rate of the
Deleted Mortgage Loan, (iv) with respect to each ARM Loan, have a Minimum Rate
not less than that of the Deleted Mortgage Loan, (v) with respect to each ARM
Loan, have a Maximum Rate not less than that of the Deleted Mortgage Loan and
not more than two (2) percentage points above that of the Deleted Mortgage Loan,
(vi) with respect to each Adjustable Rate Mortgage Loan, have a Gross Margin not
less than that of the Deleted Mortgage Loan, (vii) with respect to each ARM
Loan, have a Periodic Rate Cap equal to that of the Deleted Mortgage Loan,
(viii) have a Loan-to-Value Ratio at the time of substitution equal to or less
than the Loan-to-Value Ratio of the Deleted Mortgage Loan at the time of
substitution, (ix) with respect to each ARM Loan, have the same Rate Adjustment
Date as that of the Deleted Mortgage Loan, (x) with respect to each ARM Loan,
have an Index as provided herein for all ARM Loans subject to this Agreement,
(xi) comply as of the date of substitution with each representation and warranty
set forth in Sections 3.01, 3.02 and 3.03, (xii) be in the same credit grade
category as the Deleted Mortgage Loan and (xiii) have the same prepayment
penalty term.
     “Rate Adjustment Date”: With respect to each ARM Loan, the date on which
the Note Rate adjusts.
     “Rating Agency”: Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Moody’s Investors Service, Inc., and Fitch, Inc.
     “Recognition Agreement”: An agreement among a Cooperative Corporation, a
lender and a Mortgagor with respect to a Cooperative Loan whereby such parties
(i) acknowledge that such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such Cooperative Loan.
     “Record Date”: The close of business of the last Business Day of the month
immediately preceding the month of the related Remittance Date.
     “Refinanced Mortgage Loan”: A Mortgage Loan that was made to a Mortgagor
who owned the Mortgaged Property prior to the origination of such Mortgage Loan
and the proceeds of which were used in whole or part to satisfy an existing
mortgage.
     “Regulation AB”: Subpart 229.1100 — Asset-Backed Securities
(Regulation AB), 17 C.F.R. Sections 229.1100-1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the SEC in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the
staff of the SEC, or as may be provided by the SEC or its staff from time to
time.
     “REMIC”: A “real estate mortgage investment conduit” within the meaning of
Section 860D of the Internal Revenue Code or any similar tax vehicle providing
for the pooling of assets (such as a Financial Asset Security Investment Trust).
     “Remittance Date”: The 18th day of each calendar month, commencing on the
18th day of the month following the Funding Date, or, if such 18th day is not a
Business Day, then the next Business Day immediately preceding such 18th day.

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     “Remittance Rate”: With respect to each Mortgage Loan, the related Note
Rate minus the Servicing Fee Rate.
     “REO Disposition”: The final sale by the Servicer of any REO Property.
     “REO Disposition Proceeds”: All amounts received with respect to any REO
Disposition.
     “REO Property”: A Mortgaged Property acquired by the Servicer on behalf of
the Purchaser as described in Section 5.13.
     “Repurchase Price”: As to (a) any Defective Mortgage Loan required to be
repurchased hereunder with respect to which a breach occurred or (b) any
Mortgage Loan required to be repurchased pursuant to Section 3.04 and/or Section
7.02, an amount equal to the Unpaid Principal Balance of such Mortgage Loan at
the time of repurchase multiplied by the Purchase Price; plus (2) interest on
such Mortgage Loan at the applicable Note Rate from the last date through which
interest has been paid and distributed to the Purchaser hereunder to the date of
repurchase; minus (3) any amounts received in respect of such Defective Mortgage
Loan which are being held in the Collection Account for future remittance.
     “Scheduled Principal Balance”: With respect to any Mortgage Loan, (i) the
outstanding principal balance as of the Funding Date after application of
principal payments due on or before such date whether or not received, minus
(ii) all amounts previously remitted to the Purchaser with respect to such
Mortgage Loan representing (a) payments or other recoveries of principal, or (b)
advances of principal made pursuant to Section 6.03.
     “SEC”: The United States Securities and Exchange Commission.
     “Securities Act”: The Securities Act of 1933, as amended.
     “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.
     “Securitization Trust”: With respect to a Securitization Transaction, the
“trust”, if any, specified by the Purchaser and identified in the related
transaction documents.
     “Sellers”: PHH Mortgage Corporation, a New Jersey corporation and Bishop’s
Gate Residential Mortgage Trust (formerly known as Cendant Residential Mortgage
Trust), a Delaware business trust, or their successors in interest or any
successor under this Agreement appointed as herein provided.
     “Servicer”: PHH Mortgage Corporation, a New Jersey corporation.
     “Servicer’s Mortgage File”: The documents pertaining to a particular
Mortgage Loan which are specified on Exhibit B-2 attached hereto and any
additional documents required to be included or added to the “Servicer’s
Mortgage File” pursuant to this Agreement.

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     “Servicing Advances”: All “out of pocket” costs and expenses that are
customary, reasonable and necessary which are incurred by the Servicer in the
performance of its servicing obligations hereunder, including (without
duplication) (i) reasonable attorneys’ fees and (ii) the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the servicing,
management and liquidation of any Specially Serviced Mortgaged Loans and/or any
REO Property, and (d) compliance with the Servicer’s obligations under Section
5.08.
     “Servicing Event”: Any of the following events with respect to any Mortgage
Loan: (i) any Monthly Payment being more than 60 days delinquent; (ii) any
filing of an Insolvency Proceeding by or on behalf of the related Mortgagor, any
consent by or on behalf of the related Mortgagor to the filing of an Insolvency
Proceeding against such Mortgagor, or any admission by or on behalf of such
Mortgagor of its inability to pay such Person’s debts generally as the same
become due; (iii) any filing of an Insolvency Proceeding against the related
Mortgagor that remains undismissed or unstayed for a period of 60 days after the
filing thereof; (iv) any issuance of any attachment or execution against, or any
appointment of a conservator, receiver or liquidator with respect to, all or
substantially all of the assets of the related Mortgagor or with respect to any
Mortgaged Property; (v) any receipt by the Servicer of notice of the foreclosure
or proposed foreclosure of any other lien on the related Mortgaged Property;
(vi) any proposal of a material modification (as reasonably determined by the
Seller) to such Mortgage Loan due to a default or imminent default under such
Mortgage Loan; or (vii) in the reasonable judgment of the Servicer, the
occurrence, or likely occurrence within 60 days, of a payment default with
respect to such Mortgage Loan that is likely to remain uncured by the related
Mortgagor within 60 days thereafter.
     “Servicing Fee”: The annual fee, payable monthly to the Servicer out of the
interest portion of the Monthly Payment actually received on each Mortgage Loan.
The Servicing Fee with respect to each Mortgage Loan for any calendar month (or
a portion thereof) shall be 1/12 of the product of (i) the Scheduled Principal
Balance of the Mortgage Loan and (ii) the Servicing Fee Rate applicable to such
Mortgage Loan.
     “Servicing Fee Rate”: (i) with respect to any ARM Loan, 0.375% per annum;
provided that, prior to the first Rate Adjustment Date with respect to any such
Mortgage Loan, such rate may be, at the Servicer’s option, not less than 0.25%
per annum; and (ii) with respect to any Mortgage Loan other than an ARM Loan,
0.25% per annum.
     “Servicing Officer”: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a written list of servicing officers furnished by the Servicer
to the Purchaser upon request therefor by the Purchaser, as such list may from
time to time be amended.
     “Specially Serviced Mortgage Loan”: A Mortgage Loan as to which a Servicing
Event has occurred and is continuing.
     “Stock Certificate”: With respect to a Cooperative Loan, the certificates
evidencing ownership of the Cooperative Shares issued by the Cooperative
Corporation.
     “Stock Power”: With respect to a Cooperative Loan, an assignment of the
Stock Certificate or an assignment of the Cooperative Shares issued by the
Cooperative Corporation.

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     “Trust”: Bishop’s Gate Residential Mortgage Trust.
     “Uniform Commercial Code”: The Uniform Commercial Code as in effect on the
date hereof in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the security interest in any collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, “Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.
     “Unpaid Principal Balance”: With respect to any Mortgage Loan, at any time,
the actual outstanding principal balance then payable by the Mortgagor under the
terms of the related Mortgage Note including any cumulative Negative
Amortization.
     “Warranty Bill of Sale”: A warranty bill of sale with respect to the
Mortgage Loans purchased on a Funding Date in the form annexed hereto as
Exhibit 10.
ARTICLE II:
SALE AND CONVEYANCE OF MORTGAGE LOANS;
POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
     Section 2.01 Sale and Conveyance of Mortgage Loans.
     Seller agrees to sell and Purchaser agrees to purchase, from time to time,
those certain Mortgage Loans identified in a Mortgage Loan Schedule, at the
price and on the terms set forth herein and in the related Purchase Price and
Terms Letter. Purchaser, on any Funding Date, shall be obligated to purchase
only such Mortgage Loans set forth in the applicable Mortgage Loan Schedule,
subject to the terms and conditions of this Agreement and the related Purchase
Price and Terms Letter.
     Purchaser will purchase Mortgage Loan(s) from Seller, up to four (4) times
per month on such Funding Dates as may be agreed upon by Purchaser and Seller.
The closing shall, at Purchaser’s option be either: by telephone, confirmed by
letter or wire as the parties shall agree; or conducted in person at such place,
as the parties shall agree. On the Funding Date and subject to the terms and
conditions of this Agreement, each Seller will sell, transfer, assign, set over
and convey to the Purchaser, without recourse except as set forth in this
Agreement, and the Purchaser will purchase, all of the right, title and interest
of the applicable Seller in and to the Mortgage Loans being conveyed by it
hereunder, as identified on the Mortgage Loan Schedule.
     Examination of the Mortgage Files may be made by Purchaser or its designee
as follows. No later than 5 Business Days prior to the Funding Date, Seller will
deliver to Purchaser or its custodian, Legal Documents required pursuant to
Schedule B-1. Within 30 days following each funding date , Seller shall make the
Credit Documents available to Purchaser upon Purchaser’s request for review, at
Seller’s place of business and during reasonable business hours. If Purchaser
makes such examination and identifies any Mortgage Loans that do not conform to
the Cendant Guide, such Mortgage Loans will be deleted from the Mortgage Loan
Schedule at Purchaser’s discretion. Purchaser may, at its option and without
notice to Seller, purchase all or part of the Mortgage Loans without conducting
any partial or complete examination. The fact that Purchaser has conducted or
has failed to conduct any partial or complete examination of the

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Mortgage Loan files shall not affect Purchaser’s rights to demand repurchase,
substitution or other relief as provided herein.
     On the Funding Date and in accordance with the terms herein, Purchaser will
pay to Seller, by wire transfer of immediately available funds, the Purchase
Price, together with interest, if any, accrued from the Cut-off Date through the
day immediately preceding the Funding Date, according to the instructions to be
provided, respectively, by PHH Mortgage and the Trust. Seller, simultaneously
with the payment of the Purchase Price, shall execute and deliver to Purchaser a
Warranty Bill of Sale with respect to the Mortgage Loans in the form annexed
hereto as Exhibit 10.
     Purchaser shall be entitled to all scheduled principal due after the
Cut-off Date, all other recoveries of principal collected after the Cut-off Date
and all payments of interest on the Mortgage Loans (minus that portion of any
such payment which is allocable to the period prior to the Cut-off Date).
Notwithstanding the foregoing, on the first Remittance Date after the Funding
Date the Purchaser shall be entitled to receive the interest accrued from the
Cut-off Date through the day immediately preceding the Funding Date. The
principal balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal due on or before the Cut-off Date
whether or not collected. Therefore, payments of scheduled principal and
interest prepaid for a due date beyond the Cut-off Date shall not be applied to
the principal balance as of the Cut-off Date. Such prepaid amounts shall be the
property of Purchaser. Seller shall hold any such prepaid amounts for the
benefit of Purchaser for subsequent remittance by Seller to Purchaser. All
scheduled payments of principal due on or before the Cut-off Date and collected
by Seller after the Cut-off Date shall belong to Seller.
     Section 2.02 Possession of Mortgage Files.
     Upon the sale of any Mortgage Loan, the ownership of such Mortgage Loan,
including the Mortgage Note, the Mortgage, the contents of the related Mortgage
File and all rights, benefits, payments, proceeds and obligations arising
therefrom or in connection therewith, shall then be vested in the Purchaser, and
the ownership of all records and documents with respect to such Mortgage Loan
prepared by or which come into the possession of the Seller shall immediately
vest in the Purchaser and, to the extent retained by the Seller, shall be
retained and maintained, in trust, by the Seller at the will of the Purchaser in
a custodial capacity only. The contents of such Mortgage File not delivered to
the Purchaser are and shall be held in trust by the Seller for the benefit of
the Purchaser as the owner thereof and the Sellers’ possession of the contents
of each Mortgage File so retained is at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Seller is in a custodial capacity only. Mortgage Files shall
be maintained separately from the other books and records of the Seller. Each
Seller shall release from its custody of the contents of any Mortgage File only
in accordance with written instructions from the Purchaser, except where such
release is required as incidental to the Servicer ‘s servicing of the Mortgage
Loans or is in connection with a repurchase or substitution of any such Mortgage
Loan pursuant to Section 3.04.
     Any documents released to a Seller or the Servicer in connection with the
foreclosure or servicing of any Mortgage Loan shall be held by such Person in
trust for the benefit of the Purchaser in accordance with this Section 2.02.
Such Person shall return to the Purchaser such documents when such Person’s need
therefor in connection with such foreclosure or servicing no longer exists
(unless sooner requested by the Purchaser); provided that, if such Mortgage Loan
is

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liquidated, then, upon the delivery by a Seller or the Servicer to the Purchaser
of a request for the release of such documents and a certificate certifying as
to such liquidation, the Purchaser shall promptly release and, to the extent
necessary, deliver to such Person such documents.
     Section 2.03 Books and Records.
     The sale of each of its Mortgage Loans shall be reflected on the applicable
Seller’s balance sheet and other financial statements as a sale of assets by the
applicable Seller. Each Seller shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the Mortgage Loans it conveyed
to the Purchaser which shall be clearly marked to reflect the sale of each
Mortgage Loan to the Purchaser and the ownership of each Mortgage Loan by the
Purchaser.
     Section 2.04 Defective Documents; Delivery of Mortgage Loan Documents.
     If, subsequent to the related Funding Date, the Purchaser or either Seller
finds any document or documents constituting a part of a Mortgage File to be
defective or missing in any material respect (in this Section 2.04, a “Defect”),
the party discovering such Defect shall promptly so notify the other parties. If
the Defect pertains to the Mortgage Note or the Mortgage, then the applicable
Seller shall have a period of 45 days within which to correct or cure any such
defect after the earlier of such Seller’s discovery of same or such Seller being
notified of same. If such Defect can ultimately be cured but is not reasonably
expected to be cured within such 45 day period, such Seller shall have such
additional time as is reasonably determined by the Purchaser to cure or correct
such Defect provided that such Seller has commenced curing or correcting such
Defect and is diligently pursuing same. If the Defect pertains to any other
document constituting a part of a Mortgage File, then such Seller shall have a
period of 90 days within which to correct or cure any such Defect after the
earlier of such Seller’s discovery of same or such Seller being notified of
same. If such Defect can ultimately be cured but is not reasonably expected to
be cured within the 90 day period, then such Seller shall have such additional
time as is reasonably determined by the Purchaser to cure or correct such Defect
provided such Seller has commenced curing or correcting such Defect and is
diligently pursuing same. PHH Mortgage hereby covenants and agrees that, if any
material Defect cannot be corrected or cured, the related Mortgage Loan shall
automatically constitute, upon the expiration of the applicable cure period
described above and without any further action by any other party, a Defective
Mortgage Loan, whereupon PHH Mortgage shall repurchase such Mortgage Loan by
paying to the Purchaser the Repurchase Price therefor in accordance with Section
3.04(3) and (4).
     The applicable Seller will, with respect to each Mortgage Loan to be
purchased by the Purchaser, deliver and release to the Purchaser the Legal
Documents as set forth in Section 2.01. If the applicable Seller cannot deliver
an original Mortgage with evidence of recording thereon, original assumption,
modification and substitution agreements with evidence of recording thereon or
an original intervening assignment with evidence of recording thereon within the
applicable time periods, then such Seller shall promptly deliver to the
Purchaser such original Mortgages and original intervening assignments with
evidence of recording indicated thereon upon receipt thereof from the public
recording official, except in cases where the original Mortgage or original
intervening assignments are retained permanently by the recording office, in
which case, such Seller shall deliver a copy of such Mortgage or intervening
assignment, as the case may be, certified to be a true and complete copy of the
recorded original thereof. If the

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applicable Seller cannot deliver the original security instrument or if an
original intervening assignment has been lost, then the applicable Seller will
deliver a copy of such security instrument or intervening assignment, certified
by the local public recording official. If the original title policy has been
lost, the applicable Seller will deliver a duplicate original title policy.
     If the original Mortgage was not delivered pursuant to the preceding
paragraph, then the applicable Seller shall use its best efforts to promptly
secure the delivery of such originals and shall cause such originals to be
delivered to the Purchaser promptly upon receipt thereof. Notwithstanding the
foregoing, if the original Mortgage, original assumption, modification, and
substitution agreements, the original of any intervening assignment or the
original policy of title insurance is not so delivered to the Purchaser within
180 days following the Funding Date, then, upon written notice by the Purchaser
to PHH Mortgage, the Purchaser may, in its sole discretion, then elect (by
providing written notice to PHH Mortgage) to treat such Mortgage Loan as a
Defective Mortgage Loan, whereupon PHH Mortgage shall repurchase such Mortgage
Loan by paying to the Purchaser the Repurchase Price therefor in accordance with
Section 3.04(3) and (4) or substitute a Qualified Substitute Mortgage Loan as
therein provided. It is understood that from time to time certain local recorder
offices become backlogged with document volume. It is agreed that the Seller
will provide an Officer’s Certificate to document that the Seller has performed
all necessary tasks to insure delivery of the required documentation within
180 days and the delay beyond 180 is caused by the backlog. If the delay exceeds
360 days, regardless of the backlog the Purchaser may elect to collect the
documents with its own resources with the reasonable cost and expense to be
borne by the Seller. The fact that the Purchaser has conducted or failed to
conduct any partial or complete examination of the Mortgage Files shall not
affect its right to demand repurchase or any other remedies provided in this
Agreement.
     At the Purchaser’s request, the Assignments shall be promptly recorded in
the name of the Purchaser or in the name of a Person designated by the Purchaser
in all appropriate public offices for real property records. If any such
Assignment is lost or returned unrecorded because of a defect therein, then the
applicable Seller shall promptly prepare a substitute Assignment to cure such
defect and thereafter cause each such Assignment to be duly recorded. All
recording fees related to such a one-time recordation of the Assignments to or
by a Seller shall be paid by the applicable Seller.
     Section 2.05 Transfer of Mortgage Loans.
     Subject to the provisions of this Section 2.05, the Purchaser shall have
the right, without the consent of the Sellers, at any time and from time to
time, to assign any of the Mortgage Loans and all or any part of its interest
under this Agreement and designate any person to exercise any rights of the
Purchaser hereunder, and the assignees or designees shall accede to the rights
and obligations hereunder of the Purchaser with respect to such Mortgage Loans.
The Sellers recognize that the Mortgage Loans may be divided into “packages” for
resale (“Mortgage Loan Packages”).
     All of the provisions of this Agreement shall inure to the benefit of the
Purchaser and any such assignees or designees. All references to the Purchaser
shall be deemed to include its assignees or designees. Utilizing resources
reasonably available to the Seller without incurring any cost except the
Seller’s overhead and employees’ salaries, the applicable Seller shall cooperate
in any such assignment of the Mortgage Loans and this Agreement; provided that
the

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Purchaser shall bear all costs associated with any such assignment of the
Mortgage Loans and this Agreement other than such Seller’s overhead or employees
‘ salaries.
     The Servicer and the Purchaser acknowledge that the Servicer shall continue
to remit payments to the Purchaser on the Remittance Date after the transfer of
the Mortgage Loans, unless the Servicer was notified in writing of the new
record owner of the Mortgage Loans prior to the immediately preceding Record
Date, in which case, the Servicer shall remit to the new record owner (or
trustee or master servicer, as the case may be) of the Mortgage Loans.
     The Servicer and Purchaser agree that in no event will the Servicer be
required to remit funds or send remittance reports to more than four (4) Persons
(not including the Servicer or any Affiliate or transferee thereof) at any given
time with respect to any Mortgage Loans sold on a particular Funding Date.
     Any prospective assignees of the Purchaser who have entered into a
commitment to purchase any of the Mortgage Loans may review and underwrite the
Servicer’s servicing and origination operations, upon reasonable prior notice to
the Servicer, and the Servicer shall cooperate with such review and underwriting
to the extent such prospective assignees request information or documents that
are reasonably available and can be produced without unreasonable expense or
effort. The Servicer shall make the Mortgage Files related to the Mortgage Loans
held by the Servicer available at the Servicer’s principal operations center for
review by any such prospective assignees during normal business hours upon
reasonable prior notice to the Servicer (in no event less than 5 Business Days
prior notice). The Servicer may, in its sole discretion, require that such
prospective assignees sign a confidentiality agreement with respect to such
information disclosed to the prospective assignee which is not available to the
public at large and a release agreement with respect to its activities on the
Servicer’s premises.
     The Servicer shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Servicer shall
note transfers of Mortgage Loans. The Purchaser may, subject to the terms of
this Agreement, sell and transfer, in whole or in part, any or all of the
Mortgage Loans; provided that no such sale and transfer shall be binding upon
the Servicer unless such transferee shall agree in writing to an Assignment,
Assumption and Recognition Agreement, in substantially the form of Exhibit 2.05
attached hereto, and an executed copy of such Assignment, Assumption and
Recognition Agreement shall have been delivered to the Servicer. The Servicer
shall evidence its acknowledgment of any transfers of the Mortgage Loans to any
assignees of the Purchaser by executing such Assignment, Assumption and
Recognition Agreement. The Servicer shall mark its books and records to reflect
the ownership of the Mortgage Loans by any such assignees, and the previous
Purchaser shall be released from its obligations hereunder accruing after the
date of transfer to the extent such obligations relate to Mortgage Loans sold by
the Purchaser. This Agreement shall be binding upon and inure to the benefit of
the Purchaser and the Servicer and their permitted successors, assignees and
designees.
ARTICLE III:
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REPURCHASE AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS
     Section 3.01 Representations and Warranties of each Seller.

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     Each Seller, as to itself, represents, warrants and covenants to the
Purchaser that as of each Funding Date or as of such date specifically provided
herein:
     (1) Due Organization. The Seller is an entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and has all licenses necessary to carry on its business now being
conducted and is licensed, qualified and in good standing under the laws of each
state where a Mortgaged Property is located or is otherwise exempt under
applicable law from such qualification or is otherwise not required under
applicable law to effect such qualification; no demand for such qualification
has been made upon the Seller by any state having jurisdiction and in any event
the Seller is or will be in compliance with the laws of any such state to the
extent necessary to enforce each Mortgage Loan and with respect to PHH Mortgage,
service each Mortgage Loan in accordance with the terms of this Agreement.
     (2) Due Authority. The Seller had the full power and authority and legal
right to originate the Mortgage Loans that it originated, if any, and to acquire
the Mortgage Loans that it acquired. The Seller has the full power and authority
to hold each Mortgage Loan, to sell each Mortgage Loan and to execute, deliver
and perform, and to enter into and consummate, all transactions contemplated by
this Agreement. The Seller 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 the
Purchaser, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, receivership, conservatorship, insolvency,
moratorium and other laws relating to or affecting creditors’ rights generally
or the rights of creditors of banks and to the general principles of equity
(whether such enforceability is considered in a proceeding in equity or at law).
     (3) No Conflict. The execution and delivery of this Agreement, the
acquisition or origination, as applicable, of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans, the consummation of the transactions
contemplated hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement, will not conflict with or result in a breach of
any of the terms, conditions or provisions of the Seller’s organizational
documents and bylaws or any legal restriction or any agreement or instrument to
which the Seller is now a party or by which it is bound, or constitute a default
or result in an acceleration under any of the foregoing, or result in the
violation of any law, rule, regulation, order, judgment or decree to which the
Seller or its property is subject, or impair the ability of the Purchaser to
realize on the Mortgage Loans;
     (4) Ability to Perform. The Seller does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
     (5) No Material Default. Neither the Seller nor any of its Affiliates is in
material default under any agreement, contract, instrument or indenture of any
nature whatsoever to which the Seller or any of its Affiliates is a party or by
which it (or any of its assets) is bound, which default would have a material
adverse effect on the ability of the Seller to perform under this Agreement,
nor, to the best of the Seller’s knowledge, has any event occurred which, with
notice, lapse of time or both, would constitute a default under any such
agreement, contract, instrument or indenture and have a material adverse effect
on the ability of the Seller to perform its obligations under this Agreement;

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     (6) Financial Statements. PHH Mortgage has delivered to the Purchaser
financial statements as to its fiscal year ended December 31,2004. Except as has
previously been disclosed to the Purchaser in writing: (a) such financial
statements fairly present the results of operations and changes in financial
position for such period and the financial position at the end of such period of
PHH Mortgage and its subsidiaries; and (b) such financial statements are true,
correct and complete as of their respective dates and have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth in the notes thereto. The
Trust has delivered to the Purchaser financial statements dated as of
December 31, 2004 (the “Trust Financials”) and such Trust Financials fairly
present the results of operations and changes in financial position for such
period and the financial position at the end of such period of the Trust. Except
as has previously been disclosed to the Purchaser in writing, there has been no
change in such Trust Financials since their date and the Trust is not aware of
any errors or omissions therein;
     (7) No Change in Business. There has been no change in the business,
operations, financial condition, properties or assets of the applicable Seller
since (i) in the case of PHH Mortgage, the date of its financial statements and
(ii) in the case of the Trust, the date of delivery of the Trust Financials,
that would have a material adverse effect on the ability of the applicable
Seller to perform its obligations under this Agreement;
     (8) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Seller’s knowledge, threatened,
against the Seller, which, either in any one instance or in the aggregate, if
determined adversely to the Seller would adversely affect the sale of the
Mortgage Loans to the Purchaser or the execution, delivery or enforceability of
this Agreement or result in any material liability of the Seller, or draw into
question the validity of this Agreement, or have a material adverse effect on
the financial condition of the Seller;
     (9) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Seller of or compliance by the Seller with this
Agreement, the delivery of the Mortgage Files to the Purchaser, the sale of the
Mortgage Loans to the Purchaser or the consummation of the transactions
contemplated by this Agreement or, if required, such approval has been obtained
prior to the Funding Date;
     (10) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement is in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
     (11) No Broker. The Seller has not dealt with any broker or agent or anyone
else who might be entitled to a fee or commission in connection with this
transaction; and
     (12) No Untrue Information. Neither this Agreement nor any statement,
report or other agreement, document or instrument furnished or to be furnished
pursuant to this Agreement contains or will contain any materially untrue
statement of fact or omits or will omit to state a fact necessary to make the
statements contained therein not misleading.

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     (13) Non-solicitation. The Seller agrees that it shall not solicit any
Mortgagors (in writing or otherwise) to refinance any of the Mortgage Loans;
provided that mass advertising or mailings (such as placing advertisements on
television, on radio, in magazines or in newspapers or including messages in
billing statements) that are not exclusively directed towards the Mortgagors
shall not constitute solicitation and shall not violate this covenant;
     Section 3.02 Representations and Warranties of the Servicer.
     The Servicer represents, warrants and covenants to the Purchaser that as of
the Funding Date or as of such date specifically provided herein:
     (1) Ability to Service. The Servicer is an approved seller/servicer for
FNMA and FHLMC in good standing and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Section 203 of the National Housing
Act, with facilities, procedures and experienced personnel necessary for the
servicing of mortgage loans of the same type as the Mortgage Loans. No event has
occurred that would make the Servicer unable to comply with FNMA or FHLMC
eligibility requirements or that would require notification to either FNMA or
FHLMC;
     (2) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Servicer’s knowledge, threatened,
against the Servicer which, either in any one instance or in the aggregate, if
determined adversely to the Servicer would adversely affect the ability of the
Servicer to service the Mortgage Loans hereunder in accordance with the terms
hereof or have a material adverse effect on the financial condition of the
Servicer; and
     (3) Collection Practices. The collection practices used by the Servicer
with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper and prudent in the mortgage servicing business.
     (4) Non-solicitation. The Servicer agrees that it shall not solicit any
Mortgagors (in writing or otherwise) to refinance any of the Mortgage Loans;
provided that mass advertising or mailings (such as placing advertisements on
television, on radio, in magazines or in newspapers or including messages in
billing statements) that are not exclusively directed towards the Mortgagors
shall not constitute solicitation and shall not violate this covenant;
     Section 3.03 Representations and Warranties as to Individual Mortgage
Loans.
     With respect to each Mortgage Loan, the applicable Seller hereby makes the
following representations and warranties to the Purchaser on which the Purchaser
specifically relies in purchasing such Mortgage Loan. Such representations and
warranties speak as of the Funding Date unless otherwise indicated, but shall
survive any subsequent transfer, assignment or conveyance of such Mortgage
Loans:
     (1) Mortgage Loan as Described. Such Mortgage Loan complies with the terms
and conditions set forth herein, and all of the information set forth with
respect thereto on the Mortgage Loan Schedule is true and correct in all
material respects;
     (2) Complete Mortgage Files. The instruments and documents specified in
Section 2.02 with respect to such Mortgage Loan have been delivered to the
Purchaser in compliance with the requirements of Article II. The Seller is in
possession of a Mortgage File respecting

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such Mortgage Loan, except for such documents as have been previously delivered
to the Purchaser;
     (3) Owner of Record. The Mortgage relating to such Mortgage Loan has been
duly recorded in the appropriate recording office, and the applicable Seller or
Servicer is the owner of record of such Mortgage Loan and the indebtedness
evidenced by the related Mortgage Note;
     (4) Payments Current. All payments required to be made up to and including
the Funding Date for such Mortgage Loan under the terms of the Mortgage Note
have been made, such that such Mortgage Loan is not delinquent 30 days or more
on the Funding Date. Unless otherwise disclosed in the Offering Materials or the
Mortgage Loan Schedule, there has been no delinquency, exclusive of any period
of grace, in any payment by the Mortgagor thereunder during the twelve months
preceding the Funding Date; and, if the Mortgage Loan is a Cooperative Loan, no
foreclosure action or private or public sale under the Uniform Commercial Code
has ever been threatened or commenced with respect to the Cooperative Loan;
     (5) No Outstanding Charges. There are no delinquent taxes, insurance
premiums, assessments, including assessments payable in future installments, or
other outstanding charges affecting the Mortgaged Property related to such
Mortgage Loan;
     (6) Original Terms Unmodified. The terms of the Mortgage Note and the
Mortgage related to such Mortgage Loan (and the Proprietary Lease and the Pledge
Instruments with respect to each Cooperative Loan,) have not been impaired,
waived, altered or modified in any material respect, except as specifically set
forth in the related Mortgage Loan Schedule;
     (7) No Defenses. The Mortgage Note and the Mortgage related to such
Mortgage Loan (and the Acceptance of Assignment and Assumption of Lease
Agreement related to each Cooperative Loan) are not subject to any right of
rescission, set-off or defense, including the defense of usury, nor will the
operation of any of the terms of such Mortgage Note and such Mortgage, or the
exercise of any right thereunder, render such Mortgage unenforceable, in whole
or in part, or subject to any right of rescission, set-off or defense, including
the defense of usury and no such right of rescission, set-off or defense has
been asserted with respect thereto;
     (8) Hazard Insurance. (a) All buildings upon the Mortgaged Property related
to such Mortgage Loan are insured by an insurer acceptable to FNMA or FHLMC
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where such Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of either Section 5.10 or
Section 5.11. All such insurance policies (collectively, the “hazard insurance
policy”) contain a standard mortgagee clause naming the originator of such
Mortgage Loan, its successors and assigns, as mortgagee. Such policies are the
valid and binding obligations of the insurer, and all premiums thereon due to
date have been paid. The related Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at such Mortgagor’s cost and expense, and on such
Mortgagor’s failure to do so, authorizes the holder of such Mortgage to maintain
such insurance at such Mortgagor’s cost and expense and to seek reimbursement
therefor from such Mortgagor; or (b) in the case of a condominium or unit in a
planned unit development (“PUD”) project that is not covered by an individual
policy, the condominium or PUD project is covered by a “master” or “blanket”
policy and there exists and is in the Servicer’s Mortgage File a certificate of
insurance showing that the individual unit that secures the first mortgage is
covered under such policy. The insurance policy contains a

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standard mortgagee clause naming the originator of such Mortgage Loan (and its
successors and assigns), as insured mortgagee. Such policies are the valid and
binding obligations of the insurer, and all premiums thereon have been paid. The
insurance policy provides for advance notice to the Seller or Servicer if the
policy is canceled or not renewed, or if any other change that adversely affects
the Seller’s interests is made; the certificate includes the types and amounts
of coverage provided, describes any endorsements that are part of the “master”
policy and would be acceptable pursuant to the FNMA Guide;
     (9) Compliance With Applicable Laws. All requirements of any federal, state
or local law (including usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws) applicable to the origination and servicing of such Mortgage Loan have
been complied with in all material respects;
     (10) No Satisfaction of Mortgage. The Mortgage related to such Mortgage
Loan has not been satisfied, canceled or subordinated, in whole or in part, or
rescinded, and the related Mortgaged Property has not been released from the
lien of such Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or rescission;
     (11) Valid First Lien. The Mortgage including any Negative Amortization,
related to such Mortgage Loan is a valid, subsisting and enforceable perfected
first lien on the related Mortgaged Property, including all improvements on the
related Mortgaged Property, which Mortgaged Property is free and clear of any
encumbrances and liens having priority over the first lien of the Mortgage
subject only to (a) the lien of current real estate taxes and special
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording of such Mortgage which are acceptable to mortgage lending
institutions generally, are referred to in the lender’s title insurance policy
and do not adversely affect the market value or intended use of the related
Mortgaged Property, and (c) other matters to which like properties are commonly
subject which do not individually or in the aggregate materially interfere with
the benefits of the security intended to be provided by such Mortgage or the
use, enjoyment, or market value of the related Mortgaged Property; with respect
to each Cooperative Loan, each Acceptance of Assignment and Assumption of Lease
Agreement creates a valid, enforceable and subsisting first security interest in
the collateral securing the related Mortgage Note subject only to (a) the lien
of the related Cooperative Corporation for unpaid assessments representing the
obligor’s pro rata share of the Cooperative Corporation’s payments for its
blanket mortgage, current and future real property taxes, insurance premiums,
maintenance fees and other assessments to which like collateral is commonly
subject and (b) other matters to which like collateral is commonly subject which
do not materially interfere with the benefits of the security intended to be
provided by the Acceptance of Assignment and Assumption of Lease Agreement;
provided, however, that the appurtenant Proprietary Lease may be subordinated or
otherwise subject to the lien of any mortgage on the Cooperative Project;
     (12) Validity of Documents. The Mortgage Note and the Mortgage related to
such Mortgage Loan (and the Acceptance of Assignment and Assumption of Lease
Agreement with respect to each Cooperative Loan) are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the

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enforcement of creditors’ rights generally and general equitable principles
(regardless whether such enforcement is considered in a proceeding in equity or
at law);
     (13) Valid Execution of Documents. All parties to the Mortgage Note and the
Mortgage related to such Mortgage Loan had legal capacity to enter into such
Mortgage Loan and to execute and deliver the related Mortgage Note and the
related Mortgage and the related Mortgage Note and the related Mortgage have
been duly and properly executed by such parties; with respect to each
Cooperative Loan, all parties to the Mortgage Note and the Mortgage Loan had
legal capacity to execute and deliver the Mortgage Note, the Acceptance of
Assignment and Assumption of Lease Agreement, the Proprietary Lease, the Stock
Power, the Recognition Agreement, the Financing Statement and the Assignment of
Proprietary Lease and such documents have been duly and properly executed by
such parties; each Stock Power (i) has all signatures guaranteed or (ii) if all
signatures are not guaranteed, then such Cooperative Shares will be transferred
by the stock transfer agent of the Cooperative Corporation if the Seller
undertakes to convert the ownership of the collateral securing the related
Cooperative Loan;
     (14) Full Disbursement of Proceeds. Such Mortgage Loan has closed and the
proceeds of such Mortgage Loan have been fully disbursed prior to the Funding
Date; provided that, with respect to any Mortgage Loan originated within the
previous 120 days, alterations and repairs with respect to the related Mortgaged
Property or any part thereof may have required an escrow of funds in an amount
sufficient to pay for all outstanding work within 120 days of the origination of
such Mortgage Loan, and, if so, such funds are held in escrow by the Seller, a
title company or other escrow agent;
     (15) Ownership. The Mortgage Note and the Mortgage related to such Mortgage
Loan have not been assigned, pledged or otherwise transferred by the applicable
Seller, in whole or in part, and the Seller has good and marketable title
thereto, and the Seller is the sole owner thereof (and with respect to any
Cooperative Loan, the sole owner of the related Acceptance of Assignment and
Assumption of Lease Agreement)and has full right and authority to transfer and
sell such Mortgage Loan, and is transferring such Mortgage Loan to the Purchaser
free and clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest;
     (16) Doing Business. All parties that have had any interest in such
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the related Mortgaged Property is located;
     (17) Title Insurance. (a) Such Mortgage Loan is covered by an ALTA lender’s
title insurance policy or short form title policy acceptable to FNMA and FHLMC
(or, in jurisdictions where ALTA policies are not generally approved for use, a
lender’s title insurance policy acceptable to FNMA and FHLMC), issued by a title
insurer acceptable to FNMA and FHLMC and qualified to do business in the
jurisdiction where the related Mortgaged Property is located, insuring (subject
to the exceptions contained in clauses (11)(a) and (b) above) the Seller or
Servicer, its successors and assigns as to the first priority lien of the
related Mortgage in the original principal amount of such Mortgage Loan
including any Negative Amortization and in the case of ARM Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of such Mortgage providing for adjustment to the applicable Note
Rate and Monthly Payment. Additionally, either such lender’s title insurance
policy affirmatively insures that there is ingress and egress to and from the
Mortgaged Property or the

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Seller warrants that there is ingress and egress to and from the Mortgaged
Property and the lender’ s title insurance policy affirmatively insures against
encroachments by or upon the related Mortgaged Property or any interest therein
or any other adverse circumstance that either is disclosed or would have been
disclosed by an accurate survey. The Seller or Servicer is the sole insured of
such lender’s title insurance policy, and such lender’s title insurance policy
is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement and will inure
to the benefit of the Purchaser without any further act. No claims have been
made under such lender’s title insurance policy, neither the Seller, nor to the
best of Seller’s knowledge, any prior holder of the related Mortgage has done,
by act or omission, anything that would impair the coverage of such lender’s
insurance policy, and there is no act, omission, condition, or information that
would impair the coverage of such lender’s insurance policy; (b) The mortgage
title insurance policy covering each unit mortgage in a condominium or PUD
project related to such Mortgage Loan meets all requirements of FNMA and FHLMC;
     (18) No Defaults. (a) There is no default, breach, violation or event of
acceleration existing under the Mortgage, the Mortgage Note, or any other
agreements, documents, or instruments related to such Mortgage Loan; (b) to the
best of the Seller’s knowledge, there is no event that, with the lapse of time,
the giving of notice, or both, would constitute such a default, breach,
violation or event of acceleration; (c) the Mortgagor(s) with respect to such
Mortgage Loan is (1) not in default under any other Mortgage Loan or (2) the
subject of an Insolvency Proceeding; (d) no event of acceleration has previously
occurred, and no notice of default has been sent, with respect to such Mortgage
Loan; (e) in no event has the Seller waived any of its rights or remedies in
respect of any default, breach, violation or event of acceleration under the
Mortgage, the Mortgage Note, or any other agreements, documents, or instruments
related to such Mortgage Loan; and (f) with respect to each Cooperative Loan,
there is no default in complying with the terms of the Mortgage Note, the
Acceptance of Assignment and Assumption of Lease Agreement and the Proprietary
Lease and all maintenance charges and assessments (including assessments payable
in the future installments, which previously became due and owing) have been
paid, and the Seller has the right under the terms of the Mortgage Note,
Acceptance of Assignment and Assumption of Lease Agreement and Recognition
Agreement to pay any maintenance charges or assessments owed by the Mortgagor;
     (19) No Mechanics’ Liens. As of the date of origination of such Mortgage
Loan, there were no mechanics’ or similar liens, except such liens as are
expressly insured against by a title insurance policy, or claims that have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property that are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;
     (20) Location of Improvements; No Encroachments. As of the date of
origination of such Mortgage Loan, to the best of the Seller’s knowledge, all
improvements that were considered in determining the Appraised Value of the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of such Mortgaged Property, and no improvements on adjoining
properties encroach upon such Mortgaged Property except as permitted under the
terms of the FNMA Guide and the FHLMC Selling Guide; to the best of the Seller’s
knowledge, no improvement located on or part of any Mortgaged Property is in
violation of any applicable zoning law or regulation, and all inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of such Mortgaged Property, and with

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respect to the use and occupancy of the same, including certificates of
occupancy, have been made or obtained from the appropriate authorities;
     (21) Origination; Payment Terms. Principal payments on such Mortgage Loan
commenced or will commence no more than 60 days after funds were disbursed in
connection with such Mortgage Loan. If the interest rate on the related Mortgage
Note is adjustable, the adjustment is based on the Index set forth on the
related Mortgage Loan Schedule. The related Mortgage Note is payable on the
first day of each month in arrears, in accordance with the payment terms
described on the related Mortgage Loan Schedule. With respect to any Mortgage
Loan subject to Negative Amortization the Monthly Payments are sufficient during
the period following each Payment Adjustment Date to fully amortize the
outstanding principal balance as of the first day of such period (including any
Negative Amortization) over the original term thereof in accordance with the
terms and conditions set forth in the Mortgage Note ;
     (22) Due On Sale. Except as noted otherwise on the Mortgage Loan Schedule,
the related Mortgage contains the usual and customary “due-on-sale” clause or
other similar provision for the acceleration of the payment of the Unpaid
Principal Balance of such Mortgage Loan if the related Mortgaged Property or any
interest therein is sold or transferred without the prior consent of the
mortgagee thereunder;
     (23) Prepayment Penalty. Except as noted otherwise on the Mortgage Loan
Schedule, such Mortgage Loan is not subject to any Prepayment Penalty;
     (24) Mortgaged Property Undamaged; No Condemnation. To the best of the
Seller’s knowledge, as of the Funding Date, the related Mortgaged Property (and
with respect to a Cooperative Loan, the related Cooperative Project and
Cooperative Unit) is free of material damage and waste and there is no
proceeding pending for the total or partial condemnation thereof;
     (25) Customary Provisions. The related Mortgage contains customary and
enforceable provisions that render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee’s sale, and (b) in the case
of a Mortgage, otherwise by judicial foreclosure;
     (26) Conformance With Underwriting Standards. Such Mortgage Loan was
underwritten in accordance with the Cendant Guide;
     (27) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property on forms and with riders approved by FNMA and FHLMC, signed
prior to the approval of such Mortgage Loan application by an appraiser, duly
appointed by the originator of such Mortgage Loan, whose compensation is not
affected by the approval or disapproval of such Mortgage Loan and who met the
minimum qualifications of FNMA and FHLMC for appraisers. Each appraisal of the
Mortgage Loan was made in accordance with the relevant provisions of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989;
     (28) Deeds of Trust. If the related Mortgage constitutes a deed of trust,
then a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by

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the Purchaser to the trustee under such deed of trust, except in connection with
a trustee’s sale after default by the related Mortgagor;
     (29) LTV; Primary Mortgage Insurance Policy. Except with respect to
Additional Collateral Mortgage Loans (as defined in Exhibit 11 hereto), if such
Mortgage Loan had a Loan-to-Value Ratio of more than 80% at origination, such
Mortgage Loan is and will be subject to a Primary Insurance Policy issued by a
Qualified Mortgage Insurer, which insures the Seller or Servicer, its successors
and assigns and insureds in the amount set forth on the Mortgage Loan Schedule;
provided that, a Primary Mortgage Insurance Policy will not be required for any
Cooperative Loan if (i) the proceeds of such Cooperative Loan were used to
purchase a Cooperative Unit at the “insider’s price” when the building was
converted to a Cooperative Corporation, (ii) the value of the Cooperative Unit
for purposes of establishing the LTV at origination was such “insider’s price”,
(iii) the principal amount of the Cooperative Loan at origination was not more
than 100% of such “insider’s price” and (iv) the LTV at origination, as
calculated using the Appraised Value at origination, was less than or equal to
80%. All provisions of such Primary Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. Any related Mortgage subject to any such Primary
Insurance Policy (other than a “lender-paid” Primary Insurance Policy) obligates
the Mortgagor thereunder to maintain such insurance for the time period required
by law and to pay all premiums and charges in connection therewith. As of the
date of origination, the Loan-to-Value Ratio of such Mortgage Loan is as
specified in the applicable Mortgage Loan Schedule;
     (30) Occupancy. As of the date of origination of such Mortgage Loan, to the
best of the Seller’s knowledge, the related Mortgaged Property (or with respect
to a Cooperative Loan, the related Cooperative Unit) is lawfully occupied under
applicable law and all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the Mortgaged Property
(or with respect to a Cooperative Loan, the related Cooperative Unit) and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities;
     (31) Supervision and Examination by a Federal or State Authority. Each
Mortgage Loan either was (a) closed in the name of the PHH Mortgage, or
(b) closed in the name of another entity that is either a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or an institution which is supervised and examined by a federal or state
authority, or a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act (a “HUD
Approved Mortgagee”), and was so at the time such Mortgage Loan was originated
(PHH Mortgage or such other entity, the “Originator”) or (c) closed in the name
of a loan broker under the circumstances described in the following sentence. If
such Mortgage Loan was originated through a loan broker, such Mortgage Loan met
the Originator’s underwriting criteria at the time of origination and was
originated in accordance with the Originator’s policies and procedures and the
Originator acquired such Mortgage Loan from the loan broker contemporaneously
with the origination thereof. The Mortgage Loans that the Trust is selling to
Purchaser were originated by or on behalf of PHH Mortgage and subsequently
assigned to the Trust.
     (32) Adjustments. All of the terms of the related Mortgage Note pertaining
to interest rate adjustments, payment adjustments and adjustments of the
outstanding principal balance, if any, are enforceable and such adjustments will
not affect the priority of the lien of the related

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Mortgage; all such adjustments on such Mortgage Loan have been made properly and
in accordance with the provisions of such Mortgage Loan;
     (33) Insolvency Proceedings; Soldiers’ and Sailors’ Relief Act. To the best
of the Seller’s knowledge, the related Mortgagor (1) is not the subject of any
Insolvency Proceeding; and (2) has not requested any relief allowed to such
Mortgagor under the Soldiers’ and Sailors’ Civil Relief Act of 1940;
     (34) FNMA/FHLMC Documents. Such Mortgage Loan was closed on standard FNMA
or FHLMC documents or on such documents otherwise acceptable to them;
     (35) Unless otherwise disclosed in the Offering Materials or the Mortgage
Loan Schedule, no Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a “buydown” provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
     (36) The Assignment is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located;
     (37) Any principal advances made to the Mortgagor prior to the Cut-off Date
have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan plus any Negative
Amortization;
     (38) Unless otherwise disclosed in the Offering Materials or the Mortgage
Loan Schedule, no Mortgage Loan has a balloon payment feature. With respect to
any Mortgage Loan with a balloon payment feature, the Mortgage Note is payable
in Monthly Payments based on a thirty year amortization schedule and has a final
Monthly Payment substantially greater than the proceeding Monthly Payment which
is sufficient to amortize the remaining principal balance of the Mortgage Loan;
     (39) If the residential dwelling on the Mortgaged Property is a condominium
unit or a unit in a planned unit development (other than a de minimis planned
unit development) such condominium or planned unit development project meets the
eligibility requirements of the Cendant Guide;
     (40) No Mortgage Loan is subject to the provisions of the Homeownership and
Equity Protection Act of 1994;
     (41) Unless otherwise disclosed in the Offering Materials or the Mortgage
Loan Schedule, no Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;
     (42) The Seller has no knowledge of any circumstances or condition with
respect to the Mortgage, the Mortgage Property (or with respect to a Cooperative
Loan, the Acceptance of Assignment and Assumption of Lease Agreement, the
Cooperative Unit or the Cooperative

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Project), the Mortgagor or the Mortgagor’s credit standing that can reasonably
be expected to cause the Mortgage Loan to be an unacceptable investment, cause
the Mortgage Loan to become delinquent, or adversely affect the value of the
Mortgage Loan;
     (43) Interest on each Mortgage Loan is calculated on the basis of a 360-day
year consisting of twelve 30-day months;
     (44) To the best of Seller’s knowledge, the Mortgaged Property is in
material compliance with all applicable environmental laws pertaining to
environmental hazards including, without limitation, asbestos, and neither the
Seller nor, to the Seller’s knowledge, the related Mortgagor, has received any
notice of any violation or potential violation of such law;
     (45) Unless otherwise disclosed in the Offering Materials or the Mortgage
Loan Schedule, no Mortgage Loan is subject to negative amortization;
     (46) With respect to each Cooperative Loan, a Cooperative Lien Search has
been made by a company competent to make the same which company is acceptable to
FNMA and qualified to do business in the jurisdiction where the Cooperative Unit
is located;
     (47) With respect to each Cooperative Loan, (i) the terms of the related
Proprietary Lease is longer than the terms of the Cooperative Loan, (ii) there
is no provision in any Proprietary Lease which requires the Mortgagor to offer
for sale the Cooperative Shares owned by such Mortgagor first to the Cooperative
Corporation, (iii) there is no prohibition in any Proprietary Lease against
pledging the Cooperative Shares or assigning the Proprietary Lease and (iv) the
Recognition Agreement is on a form of agreement published by the Aztech Document
Systems, Inc. or includes provisions which are no less favorable to the lender
than those contained in such agreement;
     (48) With respect to each Cooperative Loan, each original UCC financing
statement, continuation statement or other governmental filing or recordation
necessary to create or preserve the perfection and priority of the first
priority lien and security interest in the Cooperative Shares and Proprietary
Lease has been timely and properly made. Any security agreement, chattel
mortgage or equivalent document related to the Cooperative Loan and delivered to
the Mortgagor or its designee establishes in the Mortgagor a valid and
subsisting perfected first lien on and security interest in the Mortgaged
Property described therein, and the Mortgagor has full right to sell and assign
the same; and
     (49) With respect to each Cooperative Loan, each Acceptance of Assignment
and Assumption of Lease Agreement contains enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization of the benefits of the security provided thereby. The Acceptance of
Assignment and Assumption of Lease Agreement contains an enforceable provision
for the acceleration of the payment of the unpaid principal balance of the
Mortgage Note in the event the Cooperative Unit is transferred or sold without
the consent of the holder thereof.
     (50) No fraud, error, omission, misrepresentation, or negligence with
respect to a Mortgage Loan has taken place on the part of any person, including
without limitation, the Mortgagor, any appraiser, any builder or developer or
any other party involved in the origination of the Mortgage Loan.

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     Section 3.04 Repurchase and Substitution.
     (1) It is understood and agreed that the representations and warranties set
forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment or the examination of any Mortgage File.
     (2) Upon discovery by either of the Sellers or the Purchaser of a breach of
any of the representations and warranties contained in Sections 3.01, 3.02 or
3.03 that materially and adversely affects the interest of the Purchaser (or
that materially and adversely affects the interests of the Purchaser in the
related Mortgage Loan, in the case of a representation or warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the other.
     (3) Unless permitted a greater period of time to cure as set forth in
Section 2.04, the applicable Seller shall have a period of 60 days from the
earlier of either discovery by or receipt of written notice from the Purchaser
to the Seller of any breach of any of the representations and warranties
contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects
the interest of the Purchaser (or that materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan, in the case of a
representation or warranty relating to a particular Mortgage Loan) (a “Defective
Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include
(a) any Mortgage Loan treated or designated as such in accordance with Section
2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the
first regularly scheduled payment of principal and interest) within which to
correct or cure such breach. If such breach can ultimately be cured but is not
reasonably expected to be cured within the 60-day period, then the applicable
Seller shall have such additional time, if any, as is reasonably determined by
the Purchaser to cure such breach provided that the Seller has commenced curing
or correcting such breach and is diligently pursuing same. Each Seller hereby
covenants and agrees with respect to each Mortgage Loan conveyed by it that, if
any breach relating thereto cannot be corrected or cured within the applicable
cure period or such additional time, if any, as is reasonably determined by the
Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase
the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding
anything to the contrary contained herein, if the first regularly scheduled
payment of principal and interest due under any Mortgage Loan has been
delinquent more than 30 days, or becomes delinquent after the Funding Date and
remains delinquent for a period of 30 days, the Purchaser may, by written notice
to the applicable Seller, require that the Seller repurchase the related
Mortgage Loan. However, if the Seller provides evidence that the delinquency was
due to a servicing setup error, no repurchase shall be required. Within 10
Business Days following the delivery of any such written notice from the
Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by
paying the Repurchase Price therefor by wire transfer of immediately available
funds directly to the Purchaser’s Account.
     Notwithstanding the previous paragraph, the applicable Seller may, at its
option and assuming that such Seller has a Qualified Substitute Mortgage Loan or
Loans, rather than repurchase the Mortgage Loan as provided above, remove such
Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified
Substitute Mortgage Loan or Loans, provided that in no event may any such
substitution be made later than the second anniversary after the Cut-off Date.
If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the Defective Mortgage Loan.

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     As to any Deleted Mortgage Loan for which the applicable Seller substitutes
a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall
effect such substitution by delivering to the Purchaser or its designee for such
Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required
by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
applicable Seller shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Sections 3.01, 3.02 and
3.03.
     For any month in which the applicable Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
applicable Seller will determine the amount (if any) by which the aggregate
principal balance of all such Qualified Substitute Mortgage Loans as of the date
of substitution (after application of scheduled principal payments due in the
month of substitution which have been received or as to which an advance has
been made) is less than the aggregate outstanding principal balance of all such
Deleted Mortgage Loans. The amount of such shortfall shall be paid by the
applicable Seller on the date of such substitution) by wire transfer of
immediately available funds directly to the Purchaser’s Account.
     (4) Any repurchase of a Defective Mortgage Loan required hereunder shall be
accomplished by payment of the applicable Repurchase Price within 3 Business
Days of expiration of the applicable time period referred to above in paragraph
3.04(3) by wire transfer of immediately available funds directly to the
Purchaser’s Account. It is understood and agreed that the obligations of a
Seller (a) set forth in this Section 3.04(3) to cure any breach of such Seller’s
representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to
repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to
indemnify the Purchaser in connection with any breach of a Seller’s
representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall
constitute the sole remedies of the Purchaser respecting a breach of such
representations and warranties.
     (5) The parties further agree that, in recognition of the Trust’s rights
against PHH Mortgage with respect to the Mortgage Loans acquired by it from PHH
Mortgage and conveyed to the Purchaser hereunder, the Purchaser shall have the
right to cause PHH Mortgage to repurchase directly any Defective Mortgage Loan
(other than as a result of a breach by the Trust of Section 3.03 (3) or 3.03(15)
hereof, in which case the Purchaser shall have the right to cause the Trust to
repurchase directly the Defective Mortgage Loan) acquired hereunder by the
Purchaser from the Trust.
     Section 3.05 Certain Covenants of each Seller and the Servicer.
     Without incurring undue effort or any cost except the Seller’s overhead or
employees ‘ salaries, each Seller shall take reasonable steps to assist the
Purchaser, if the Purchaser so requests by 30 days’ advance written notice to
the related Seller or Sellers, in re-selling the Mortgage Loans in a whole loan
sale or in securitizing the Mortgage Loans and selling undivided interests in
such Mortgage Loans in a public offering or private placement or selling
participating interests in such Mortgage Loans, which steps may include,
(a) providing any information relating to the Mortgage Loans reasonably
necessary to assist in the preparation of any disclosure documents,
(b) providing information relating to delinquencies and defaults with respect to
the Servicer’s servicing portfolio (or such portion thereof as is similar to the
Mortgage Loans), (c) entering into any other servicing, custodial or other
similar agreements, that are consistent with

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the provisions of this Agreement, and which contain such provisions as are
customary in securitizations rated “AAA” (including a securitization involving a
REMIC or CMO) (a “Securitization”) and (d) provide such opinions of counsel as
are customary in such transactions, provided, however, that any opinion of
outside counsel shall be provided at Purchaser’s expense. In connection with
such a Securitization, the Purchaser may be required to engage a master servicer
or trustee to determine the allocation of payments to and make remittances to
the certificateholders, at the Purchaser’s sole cost and expense. In the event
that a master servicer or trustee is requested by the Purchaser to determine the
allocation of payments and to make remittances to the certificateholders, the
Servicer agrees to service the Mortgage Loans in accordance with the reasonable
and customary requirements of such Securitization, which may include the
Servicer’s acting as a subservicer in a master servicing arrangement. With
respect to the then owners of the Mortgage Loans, the Servicer shall thereafter
deal solely with such master servicer or trustee, as the case may be with
respect to such Mortgage Loans which are subject to the Securitization and shall
not be required to deal with any other party with respect to such Mortgage
Loans. The cost of such securitization shall be borne by the Purchaser, other
than the Seller’s overhead or employees’ salaries.
ARTICLE IV:
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
AND CONDITIONS PRECEDENT TO FUNDING
     Section 4.01 Representations and Warranties.
     The Purchaser represents, warrants and covenants to the Seller that as of
each Funding Date or as of such date specifically provided herein:
     (1) Due Organization. The Purchaser is an entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and has all licenses necessary to carry on its business now being
conducted and is licensed, qualified and in good standing under the laws of each
state where a Mortgaged Property is located or is otherwise exempt under
applicable law from such qualification or is otherwise not required under
applicable law to effect such qualification; no demand for such qualification
has been made upon the Purchaser by any state having jurisdiction and in any
event the Purchaser is or will be in compliance with the laws of any such state
to the extent necessary to enforce each Mortgage Loan.
     (2) Due Authority. The Purchaser had the full power and authority and legal
right to acquire the Mortgage Loans that it acquired. The Purchaser has the full
power and authority to hold each Mortgage Loan, to sell each Mortgage Loan and
to execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Purchaser 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 the Seller, constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, reorganization, receivership,
conservatorship, insolvency, moratorium and other laws relating to or affecting
creditors’ rights generally or the rights of creditors of banks and to the
general principles of equity (whether such enforceability is considered in a
proceeding in equity or at law);

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     (3) No Conflict. None of the execution and delivery of this Agreement, the
acquisition or origination, as applicable, of the Mortgage Loans by the
Purchaser, the purchase of the Mortgage Loans, the consummation of the
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Purchaser’s organizational
documents and bylaws or any legal restriction or any agreement or instrument to
which the Purchaser is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in
the violation of any law, rule, regulation, order, judgment or decree to which
the Purchaser or its property is subject, or impair the ability of the Purchaser
to realize on the Mortgage Loans, or impair the value of the Mortgage Loans;
     (4) Ability to Perform. The Purchaser does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
     (5) No Material Default. The Purchaser is not in material default under any
agreement, contract, instrument or indenture of any nature whatsoever to which
the Purchaser is a party or by which it (or any of its assets) is bound, which
default would have a material adverse effect on the ability of the Purchaser to
perform under this Agreement, nor, to the best of the Purchaser’s knowledge, has
any event occurred which, with notice, lapse of time or both would constitute a
default under any such agreement, contract, instrument or indenture and have a
material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement;
     (6) No Change in Business. There has been no change in the business,
operations, financial condition, properties or assets of the Purchaser since the
date of the Purchaser’s financial statements that would have a material adverse
effect on the ability of the Purchaser to perform its obligations under this
Agreement;
     (7) Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Purchaser’s knowledge, threatened,
against the Purchaser, which, either in any one instance or in the aggregate, if
determined adversely to the Purchaser would adversely affect the purchase of the
Mortgage Loans or the execution, delivery or enforceability of this Agreement or
result in any material liability of the Purchaser, or draw into question the
validity of this Agreement, or the Mortgage Loans or have a material adverse
effect on the financial condition of the Purchaser;
     (8) Broker. The Purchaser has not dealt with any broker or agent or anyone
else who might be entitled to a fee or commission in connection with this
transaction.
     (9) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Purchaser of or compliance by the Purchaser with this
Agreement, the purchase of the Mortgage Loans from the Seller or the
consummation of the transactions contemplated by this Agreement or, if required,
such approval has been obtained prior to the Funding Date;
     (10) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement is in the ordinary course of business of the
Purchaser;
     (11) Non-Petition Agreement. The Purchaser covenants and agrees that it
shall not, prior to the date which is one year and one day (or if longer, the
applicable preference period

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then in effect) after the payment in full of all rated obligations of Bishop’s
Gate Residential Mortgage Trust, acquiesce, petition or otherwise, directly or
indirectly, invoke or cause Bishop’s Gate Residential Mortgage Trust to invoke
the process of any governmental authority for the purpose of commencing or
sustaining a case against Bishop’s Gate Residential Mortgage Trust under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator, or other similar
official of Bishop’s Gate Residential Mortgage Trust. This covenant and
agreement shall be binding upon the Purchaser and any assignee or transferee of
the Purchaser;
     (12) No Untrue Information. Neither this Agreement nor any statement,
report or other agreement, document or instrument furnished or to be furnished
pursuant to this Agreement contains or will contain any materially untrue
statement of fact or omits or will omit to state a fact necessary to make the
statements contained therein not misleading;
     (13) Non-solicitation. The Purchaser agrees that it shall not solicit any
Mortgagors (in writing or otherwise) to refinance any of the Mortgage Loans;
provided that mass advertising or mailings (such as placing advertisements on
television, on radio, in magazines or in newspapers or including messages in
billing statements) that are not exclusively directed towards the Mortgagors
shall not constitute solicitation and shall not violate this covenant; and
     (14) Privacy. Purchaser agrees and acknowledges that as to all nonpublic
personal information received or obtained by it with respect to any Mortgagor:
(a) such information is and shall be held by Purchaser in accordance with all
applicable law, including but not limited to the privacy provisions of the
Gramm-Leach Bliley Act; (b) such information is in connection with a proposed or
actual secondary market sale related to a transaction of the Mortgagor for
purposes of 16 C.F.R.§313.14(a)(3); and (c) Purchaser is hereby prohibited from
disclosing or using any such information other than to carry out the express
provisions of this Agreement, or as otherwise permitted by applicable law.
     Section 4.02 Conditions Precedent to Closing.
     Each purchase of Mortgage Loans hereunder shall be subject to each of the
following conditions:

  (a)   All of the representations and warranties of Seller under the Cendant
Guide, and of Seller and Purchaser under this Agreement shall be true and
correct as of the Funding Date, and no event shall have occurred which, with
notice or the passage of time, would constitute an Event of Default under this
Agreement or under the Cendant Guide;     (b)   Purchaser shall have received,
or Purchaser’s attorneys shall have received in escrow, all closing documents as
specified herein, in such forms as are agreed upon and acceptable to Purchaser,
duly executed by all signatories other than Purchaser as required pursuant to
the respective terms thereof;     (c)   All other terms and conditions of this
Agreement shall have been complied with.

     Subject to the foregoing conditions, Purchaser shall pay to Seller on each
Funding Date the applicable Purchase Price as provided herein.

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ARTICLE V:
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

     Section 5.01   PHH Mortgage to Act as Servicer; Servicing Standards;
Additional Documents; Consent of the Purchaser.

     (1) The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans and REO Property from and after each Funding Date
in accordance with the terms and provisions of the Mortgage Loans, applicable
law and the terms and provisions of this Agreement for and on behalf of, and in
the best interests of, the Purchaser (without taking into account any
relationship the Servicer may have with any Mortgagor or other Person, the
participation, if any, of the Servicer in any financing provided in connection
with the sale of any Mortgaged Property, or the Servicer’s obligation to advance
any expenses or incur any costs in the performance of its duties hereunder) in
accordance with a standard that is not less than the higher of (a) the same
care, skill, prudence and diligence with which it services similar assets held
for its own or its Affiliates’ account and (b) the same care, skill, prudence
and diligence with which it services similar assets for third party
institutional investors, in each case giving due consideration to customary and
usual standards of practice of prudent institutional mortgage loan servicers
utilized with respect to mortgage loans comparable to the Mortgage Loans.
Subject to the foregoing standards, in connection with such servicing and
administration, the Servicer shall seek to maximize the timely recovery of
principal and interest on the Mortgage Notes; provided that nothing contained
herein shall be construed as an express or implied guarantee by the Servicer of
the collectibility of payments on the Mortgage Loans or shall be construed as
impairing or adversely affecting any rights or benefits specifically provided by
this Agreement to the Seller, including with respect to Servicing Fees.
     In the event that any of the Mortgage Loans included on the Mortgage Loan
Schedule for a particular Funding Date are Additional Collateral Mortgage Loans
(as defined in Exhibit 11 hereto), Seller and Purchaser shall enter into an
Additional Collateral Assignment and Servicing Agreement, substantially in the
form of Exhibit 11 hereto, and such Additional Collateral Mortgage Loans will be
serviced in accordance with the terms of the related Additional Collateral
Assignment and Servicing Agreement and the terms of this Agreement.
     (2) To the extent consistent with Section 5.01(1) and further subject to
any express limitations set forth in this Agreement, the Servicer (acting alone
or, solely in the circumstances permitted hereunder, acting through a
subservicer) shall have full power and authority to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including the power and authority (a) to execute
and deliver, on behalf of the Purchaser, customary consents or waivers and other
instruments and documents (including estoppel certificates), (b) to consent to
transfers of any Mortgaged Property and assumptions of the Mortgage Notes and
related Mortgages, (c) to submit claims to collect any Insurance Proceeds and
Liquidation Proceeds, (d) to consent to the application of any Insurance
Proceeds or Condemnation Proceeds to the restoration of the applicable Mortgaged
Property or otherwise, (e) to bring an action in a court of law, including an
unlawful detainer action, to enforce rights of the Purchaser with respect to any
Mortgaged Property, (f) to execute and deliver, on behalf of the Purchaser,
documents relating to the management, operation, maintenance, repair, leasing,
marketing and sale of any Mortgaged Property or any REO Property, and (g) to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that the Servicer shall not take
any action not

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provided for in this Agreement that is materially inconsistent with or
materially prejudices the interest of the Purchaser in any Mortgage Loan or
under this Agreement. If reasonably requested by the Servicer, the Purchaser
shall furnish the Servicer with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans and the REO Properties, including documents
relating to the foreclosure, receivership, management, operation, maintenance,
repair, leasing, marketing and sale (in foreclosure or otherwise) of any
Mortgaged Property or any REO Property.
     (3) Notwithstanding anything to the contrary contained herein:
     (a) the Servicer acknowledges that the Purchaser will retain title to, and
ownership of, the Mortgage Loans and the REO Properties and that the Servicer
does not hereby acquire any title to, security interest in, or other rights of
any kind in or to any Mortgage Loan or REO Property or any portion thereof;
     (b) the Servicer shall not file any lien or any other encumbrance on,
exercise any right of setoff against, or attach or assert any claim in or on any
Mortgage Loan or REO Property, unless authorized pursuant to a judicial or
administrative proceeding or a court order;
     (c) the Servicer shall, in servicing the Mortgage Loans, follow and comply
with the servicing guidelines established by FNMA, provided that the Servicer
shall specifically notify the Purchaser in writing and obtain the Purchaser’s
written consent prior to the Servicer taking any of the following actions:
(1) modifying, amending or waiving any of the financial terms of, or making any
other material modifications to, a Mortgage Loan, except the Servicer may, upon
the Mortgagor’s request, accept a principal prepayment and re-amortize the then
remaining principal balance over the then remaining term of the loan (resulting
in a lower scheduled monthly payment but no change in the maturity date);
(2) selling any Specially Serviced Mortgage Loan; (3) making, with respect to
any Specially Serviced Mortgage Loan or REO Property, Servicing Advances
provided that the Servicer shall not be required to so advise the Purchaser to
the extent that each related Servicing Advance as to the related Mortgaged
Property or REO Property is in the best interests of the Purchaser or other
owner of the Mortgage Loan and that are deemed to be recoverable by the
Servicer; (4) forgiving principal or interest on, or permitting to be satisfied
at a discount, any Mortgage Loan; (5) accepting substitute or additional
collateral, or releasing any collateral, for a Mortgage Loan. If the Purchaser
has not approved or rejected in writing any proposed action(s) recommended by
the Servicer to be taken hereunder within 20 Business Days of the date such
recommendation is made, then the Purchaser shall be deemed to have rejected such
recommended action(s) and the Servicer shall not take any such action(s);
     (d) the Servicer shall notify the Purchaser of any modification, waiver or
amendment of any term of any Mortgage Loan and the date thereof and shall
deliver to the Purchaser, for deposit in the related Mortgage File, an original
counterpart of the agreement relating to such modification, waiver or amendment
promptly following the execution thereof;
     (e) the Servicer shall remain primarily liable for the full performance of
its obligations hereunder notwithstanding any appointment by the Servicer of a
subservicer or subservicers hereunder; and

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     (f) the Purchaser may at any time and from time to time, in its sole
discretion, upon 10 Business Days written notice to the Servicer, terminate the
Servicer’s servicing obligations hereunder with respect to (1) any REO Property
or (2) any Mortgage Loan that, in accordance with the Purchaser’s internal
credit classification criteria, has been classified as “doubtful” or a “loss.”
Upon the effectiveness of any such termination of the Servicer’s servicing
obligations with respect to any such REO Property or Mortgage Loan, the Servicer
shall deliver all agreements, documents, and instruments related thereto to the
Purchaser, in accordance with applicable law.
     Section 5.02 Collection of Mortgage Loan Payments.
     Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Servicer will proceed diligently to collect
all payments due under each Mortgage Loan when the same shall become due and
payable and shall, to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Primary Insurance Policy,
follow such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans, which procedures shall in any event comply
with the servicing standards set forth in Section 5.01. Furthermore, the
Servicer shall ascertain and estimate annual ground rents, taxes, assessments,
fire and hazard insurance premiums, mortgage insurance premiums, and all other
charges that, as provided in the Mortgages, will become due and payable to the
end that the installments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable.
     Section 5.03 Reports for Specially Serviced Mortgage Loans and Foreclosure
Sales.
     The Servicer shall, within five (5) calendar days following each Record
Date, deliver to the Purchaser monthly reports (substantially in the form of
Exhibit 5.03(a) and Exhibit 5.03(b) attached hereto) with respect to all
Specially Serviced Mortgage Loans. In addition, the Servicer shall, within one
(1) Business Day following the occurrence of any foreclosure sale with respect
to any Mortgaged Property, deliver to the Purchaser a notice of foreclosure sale
substantially in the form of Exhibit 5.03(c) attached hereto.
     Section 5.04 Establishment of Collection Account; Deposits in Collection
Account.
     The 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,
in the form of time deposit or demand accounts. The creation of any Collection
Account shall be evidenced by a certification in the form of Exhibit 5.04-1
attached hereto, in the case of an account established with the Servicer, or a
letter agreement in the form of Exhibit 5.04-2 attached hereto, in the case of
an account held by a depository other than the Servicer. In either case, a copy
of such certification or letter agreement shall be furnished to the Purchaser.
     The Servicer shall deposit in the Collection Account on a daily basis,
within two Business Days after receipt (or as otherwise required pursuant to
this Agreement in the case of clauses (8), (9), (10) and (11) of this Section
5.04) and retain therein the following payments and collections received or made
by it subsequent to each Funding Date, or received by it prior to the Funding
Date but allocable to a period subsequent thereto, other than in respect of
principal and interest on the Mortgage Loans due on or before the Funding Date:

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  (4)   all payments on account of principal, including Principal Prepayments,
on the Mortgage Loans;     (5)   all payments on account of interest on the
Mortgage Loans;     (6)   all Liquidation Proceeds;     (7)   all REO Proceeds;
    (8)   all Insurance Proceeds, including amounts required to be deposited
pursuant to Sections 5.10 and 5.11, other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Properties or
released to the applicable Mortgagors in accordance with the Servicer’s normal
servicing procedures, the related Mortgages or applicable law;     (9)   all
Condemnation Proceeds affecting any Mortgaged Property which are not released to
a Mortgagor in accordance with the Servicer’s normal servicing procedures, the
related Mortgage or applicable law;     (10)   any Monthly Advances in
accordance with Section 6.03;     (11)   any amounts required to be deposited by
the Servicer pursuant to Section 5.11 in connection with the deductible clause
in any blanket hazard insurance policy, such deposit to be made from the
Servicer’s own funds without reimbursement therefor;     (12)   any amounts
required to be deposited by the Servicer pursuant to Section 5.16 in connection
with any losses on Permitted Investments;     (13)   any amounts required to be
deposited in the Collection Account pursuant to Sections 7.01 or 7.02 or
otherwise pursuant to the terms hereof; and     (11)   any amounts required to
be deposited in the Collection Account pursuant to Section 5.17.

The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 7.01, need not be deposited by the
Servicer in the Collection Account and shall be retained by the Servicer as
additional compensation.
     Section 5.05 Permitted Withdrawals from the Collection Account.
     The 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 reimburse itself for unreimbursed Monthly Advances and Servicing
Advances that the Servicer has determined to be Non-Recoverable Advances as
provided in Section 6.04;

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     (2) to make payments to the Purchaser in the amounts, at the times and in
the manner provided for in Section 6.01;
     (3) to reimburse itself for Monthly Advances, the Servicer’s right to
reimburse itself pursuant to this Subsection (3) being limited to amounts
received on the related Mortgage Loan which represent late payments of principal
and/or interest with respect to which any such Monthly Advance was made;
     (4) to reimburse itself for unreimbursed Servicing Advances and for
unreimbursed Monthly Advances, the Servicer’s right to reimburse itself pursuant
to this Subsection (4) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such
other amounts as may be collected by the Servicer from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that, in the case
of such reimbursement, the Servicer’s right thereto shall be prior to the rights
of the Purchaser, except that, where a Seller or the Servicer is required to
repurchase (or substitute a Qualified Substitute Mortgage Loan for) a Mortgage
Loan pursuant to Sections 2.04, 3.04 and/or 7.02, the Servicer’s right to such
reimbursement shall be subsequent and subordinate to the payment to the
Purchaser of the applicable Repurchase Price (or delivery of a Qualified
Substitute Mortgage Loan) and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
     (5) to pay to itself, solely out of the interest portion of the Monthly
Payment actually received with respect to a Mortgage Loan during the period
ending on the most recent Determination Date, the Servicing Fee with respect to
such Mortgage Loan;
     (6) to pay to itself as additional servicing compensation (a) any interest
earned on funds in the Collection Account (all such interest to be withdrawn
monthly not later than each Remittance Date) and (b) any prepayment penalties or
premiums relating to any Principal Prepayments; provided that no such amounts
shall be payable as servicing compensation to the extent they relate to a
Mortgage Loan with respect to which a default, breach, violation, or event of
acceleration exists or would exist but for the lapse of time, the giving of
notice, or both;
     (7) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Sections 2.04, 3.04 and/or 7.02 all amounts received
thereon and not distributed as of the date on which the related Repurchase Price
is determined (except to the extent that such amounts constitute part of the
Repurchase Price to be remitted to the Purchaser);
     (8) to remove any amounts deposited into the Collection Account in error;
and
     (9) to clear and terminate the Collection Account upon the termination of
this Agreement, with any funds contained therein to be distributed in accordance
with the terms of this Agreement.
     The 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.
     Section 5.06 Establishment of Escrow Accounts; Deposits in Escrow.

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     The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts. The creation of any Escrow Account shall be evidenced by a
certification in the form shown on Exhibit 5.06-1 attached hereto, in the case
of an account established with the Servicer, or a letter agreement in the form
shown on Exhibit 5.06-2 attached hereto, in the case of an account held by a
depository other than the Servicer, such depository having been consented to by
the Purchaser. In either case, a copy of such certification or letter agreement
shall be furnished to the Purchaser.
     The Servicer shall deposit in each Escrow Account on a daily basis, and
retain therein, (i) all Escrow Payments collected on account of the related
Mortgage Loans for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement, and (ii) all Insurance Proceeds
which are to be applied to the restoration or repair of any Mortgaged Property.
The Servicer shall make withdrawals therefrom only to effect such payments as
are required under Sections 5.07 and/or 5.08. The Servicer shall be entitled to
retain any interest paid on funds deposited in the Escrow Account by the
depository institution other than interest on escrowed funds required by law to
be paid to the Mortgagor and, to the extent required by law, the Servicer shall
pay interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes, without any right of reimbursement therefor.
     Section 5.07 Permitted Withdrawals From Escrow Accounts.
     Withdrawals from any Escrow Account may be made by the Servicer only (i) to
effect timely payments of ground rents, taxes, assessments, water rates, hazard
insurance premiums, Primary Insurance Policy premiums, if applicable, and
comparable items constituting Escrow Payments for the related Mortgage, (ii) to
reimburse the Servicer for any Servicing Advance made by the Servicer with
respect to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan that represent late payments or collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined to
be overages, (iv) if permitted by applicable law, for transfer to the Collection
Account in accordance with the terms of this Agreement, (v) for application to
the restoration or repair of the Mortgaged Property in accordance with the terms
of the related Mortgage Loan, (vi) to pay to the Servicer, or to the Mortgagor
to the extent required by law, any interest paid on the funds deposited in the
Escrow Account, (vii) to reimburse a Mortgagor in connection with the making of
the Payoff of the related Mortgage Loan or the termination of all or part of the
escrow requirement in connection with the Mortgage Loan, (viii) to remove any
amounts deposited into the Escrow Account in error; or (ix) to clear and
terminate the Escrow Account on the termination of this Agreement.

     Section 5.08   Payment of Taxes, Insurance and Other Charges; Maintenance
of Primary Insurance Policies; Collections Thereunder.

     With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are or may become a lien upon the Mortgaged Property and
the status of Primary Insurance Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges, including renewal premiums, and shall effect payment thereof prior

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to the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and accumulated
by the Servicer in amounts sufficient for such purposes, as allowed under the
terms of the Mortgage and applicable law. If a Mortgage does not provide for
Escrow Payments, then the Servicer shall require that any such payments be made
by the Mortgagor at the time they first become due. The Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely
payments of all such bills irrespective of the Mortgagor’s faithful performance
in the payment of same or the making of the Escrow Payments and shall make
advances from its own funds to effect such payments but shall be entitled to
reimbursement thereof in accordance with the terms of this Agreement.
     The Servicer shall maintain in full force and effect a Primary Insurance
Policy, conforming in all respects to the description set forth in Section
3.03(29), issued by an insurer described in that Section, with respect to each
Mortgage Loan for which such coverage is required. Such coverage will be
maintained until the Loan-to-Value Ratio of the related Mortgage Loan is reduced
to 75% or less in the case of a Mortgage Loan having a Loan-to-Value Ratio at
origination in excess of 80% or until such time, if any, as such insurance is
required to be released in accordance with the provisions of applicable law
including, but not limited to, the Homeowners Protection Act of 1998. The
Servicer shall assure that all premiums due under any Primary Insurance Policy
are paid in a timely manner, but, shall be entitled to reimbursement pursuant to
the terms of this Agreement for premiums paid by the Servicer on behalf of any
Mortgagor who is obligated to pay such premiums but fails to do so. The Servicer
shall not cancel or refuse to renew any Primary Insurance Policy in effect on
the Funding Date that is required to be kept in force under this Agreement
unless a replacement Primary Insurance Policy for such canceled or nonrenewed
policy is obtained from and maintained with an insurer that satisfies the
standards set forth in Section 3.03(29). The Servicer shall not take any action
which would result in noncoverage under any applicable Primary Insurance Policy
of any loss which, but for the actions of the Servicer, would have been covered
thereunder. In connection with any assumption or substitution agreement entered
into or to be entered into pursuant to Section 7.01, the Servicer shall promptly
notify the insurer under the related Primary Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as a
condition to the continuation of coverage under the Primary Insurance Policy. If
such Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, then the Servicer shall obtain, and, except as
otherwise provided above, maintain, a replacement Primary Insurance Policy as
provided above.
     In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Insurance Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 5.04, any amounts
collected by the Servicer under any Primary Insurance Policy shall be deposited
in the Collection Account, subject to withdrawal in accordance with Section
5.05.
     Section 5.09 Transfer of Accounts.

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     The Servicer may transfer the Collection Account or any Escrow Account to a
different depository institution from time to time; provided that (i) no such
transfer shall be made unless all certifications or letter agreements required
under Section 5.04 have been executed and delivered by the parties thereto; and
(ii) concurrently upon any such transfer, the Servicer shall give written notice
thereof to the Purchaser. Notwithstanding anything to the contrary contained
herein, the Collection Account and each Escrow Account shall at all times
constitute Eligible Accounts.
     Section 5.10 Maintenance of Hazard Insurance.
     The Servicer shall cause to be maintained for each Mortgage Loan fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount that is at least equal to the lesser
of (a) the maximum insurable value of the improvements securing such Mortgage
Loan and (b) the greater of (1) the Unpaid Principal Balance of such Mortgage
Loan or (2) an amount such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the loss payee from becoming a co-insurer.
     If any Mortgaged Property is in an area identified by the Federal Emergency
Management Agency as having special flood hazards and such flood insurance has
been made available, then the Servicer will cause to be maintained a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration with a generally acceptable insurance carrier,
in an amount representing coverage not less than the lesser of (a) the minimum
amount required, under the terms of coverage, to compensate for any damage or
loss on a replacement cost basis (or the outstanding principal balance of the
related Mortgage Loan if replacement cost coverage is not available for the type
of building insured) or (b) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended (assuming that the
area in which such Mortgaged Property is located is participating in such
program).
     The Servicer shall also maintain on each REO Property fire, hazard and
liability insurance, and to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance with extended
coverage in an amount which is at least equal to the lesser of (a) the maximum
insurable value of the improvements which are a part of such property and (b)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property plus accrued interest at the Note Rate and related
Servicing Advances.
     All such policies shall be endorsed with standard mortgagee clauses with
loss payable to the Servicer, or upon request to the Purchaser, and shall
provide for at least 30 days prior written notice of any cancellation, reduction
in the amount of, or material change in, coverage to the Servicer. The Servicer
shall not interfere with the Mortgagor’s freedom of choice in selecting either
his insurance carrier or agent, provided that the Servicer shall not accept any
such insurance policies from insurance companies unless such companies
(a) currently reflect (1) a general policyholder’s rating of B+ or better and a
financial size category of III or better in Best’s Key Rating Guide, or (2) a
general policyholder’s rating of “A” or “A-” or better in Best’s Key Rating
Guide, and (b) are licensed to do business in the state wherein the related
Mortgaged Property is located. Notwithstanding the foregoing, the Servicer may
accept a policy underwritten by Lloyd’s of London or, if it is the only coverage
available, coverage under a state’s Fair Access to Insurance Requirement
(FAIR) Plan. If a hazard policy becomes in danger of being terminated, or the
insurer ceases to have the ratings noted above, the Servicer shall

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notify the Purchaser and the related Mortgagor, and shall use its best efforts,
as permitted by applicable law, to obtain from another qualified insurer a
replacement hazard insurance policy substantially and materially similar in all
respects to the original policy. In no event, however, shall a Mortgage Loan be
without a hazard insurance policy at any time, subject only to Section 5.11.
     Pursuant to Section 5.04, any amounts collected by the 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 the Servicer’s normal servicing
procedures, shall be deposited in the Collection Account within two Business
Days after receipt, subject to withdrawal in accordance with Section 5.05. Any
cost incurred by the Servicer in maintaining any such insurance shall not, for
the purpose of calculating remittances to the Purchaser, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
     It is understood and agreed that no earthquake or other additional
insurance need be required by the Servicer of the Mortgagor or maintained on
property acquired in respect of the Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
     Section 5.11 Maintenance of Mortgage Impairment Insurance Policy.
     If the Servicer obtains and maintains a blanket policy issued by an issuer
that has a Best’s Key rating of A+:V insuring against hazard losses on all of
the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 5.10 and otherwise
complies with all other requirements of Section 5.10, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 5.10, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, if there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with Section 5.10 and
there shall have been one or more losses which would have been covered by such
policy, deposit in the Collection Account the amount not otherwise payable under
the blanket policy because of such deductible clause; provided that the Servicer
shall not be entitled to obtain reimbursement therefor. In connection with its
activities as servicer of the Mortgage Loans, the Servicer agrees to prepare and
present, on behalf of the Purchaser, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy. Upon request of the
Purchaser, the Servicer shall cause to be delivered to the Purchaser a certified
true copy of such policy and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without 30 days’
prior written notice to the Purchaser.
     Section 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, with broad coverage with
responsible companies that would meet the requirements of FNMA and FHLMC on all
officers, employees or other Persons acting in any capacity with regard to the
Mortgage Loan to handle funds, money, documents and papers relating to the
Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in
the form of the “Mortgage Banker’s Blanket Bond” and shall protect and insure
the Servicer against losses, including losses arising by virtue of any Mortgage
Loan not being satisfied in

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accordance with the procedures set forth in Section 7.02 and/or losses resulting
from or arising in connection with forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of or by such Persons. Such Fidelity Bond shall
also protect and insure the Servicer against losses in connection with the
failure to maintain any insurance policies required pursuant to this Agreement
and the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 5.12 requiring the Fidelity Bond and errors and omissions insurance
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The minimum coverage under any such bond and insurance
policy shall be at least equal to the corresponding amounts required by FNMA in
the FNMA Guide and by FHLMC in the FHLMC Servicing Guide. The Servicer shall
cause to be delivered to the Purchaser on or before the Funding Date: (i) a
certified true copy of the Fidelity Bond and insurance policy; (ii) a written
statement from the surety and the insurer that such Fidelity Bond or insurance
policy shall in no event be terminated or materially modified without 30 days’
prior written notice to the Purchaser; and (iii) written evidence reasonably
satisfactory to the Purchaser that such Fidelity Bond or insurance policy
provides that the Purchaser is a beneficiary or loss payee thereunder.
     Section 5.13 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 of the Purchaser or the Person (which may be the
Servicer for the benefit of the Purchaser) designated by the Purchaser, or in
the event the Purchaser notifies the Servicer that the Purchaser or such Person
is not authorized or permitted to hold title to real property in the state where
the REO Property is located, or would be adversely affected under the “doing
business” or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an opinion of counsel obtained by the Purchaser from an attorney
duly licensed to practice law in the state where the REO Property is located.
The Servicer (acting alone or through a subservicer), on behalf of the
Purchaser, shall, subject to Section 5.01(3)(c), dispose of any REO Property
pursuant to Section 5.14. Unless an appraisal prepared by an MAI Appraiser who
is Independent in accordance with the provisions of 12 C.F.R. 225.65 shall have
been obtained in connection with the acquisition of such REO Property, promptly
following any acquisition by the Purchaser (through the Servicer) of an REO
Property, the Servicer shall obtain a narrative appraisal thereof (at the
expense of the Purchaser) in order to determine the fair market value of such
REO Property. The Servicer shall promptly notify the Purchaser of the results of
such appraisal and forward such appraisal to the Purchaser. The Servicer shall
also cause each REO Property to be inspected promptly upon the acquisition of
title thereto and shall cause each REO Property to be inspected at least
annually thereafter, and Servicer shall be entitled to be reimbursed for
expenses in connection therewith in accordance with this Agreement. The Servicer
shall make or cause to be made a written report of each such inspection. Such
reports shall be retained in the Servicer’s Mortgage File and copies thereof
shall be forwarded by the Servicer to the Purchaser. The Servicer shall also
furnish to the Purchaser the applicable reports required under Section 8.01.
     Notwithstanding anything to the contrary contained herein, if a REMIC
election has been or is to be made with respect to the arrangement under which
the Mortgage Loans and the REO Properties are held, then the Servicer shall
manage, conserve, protect and operate each REO Property in a manner that does
not cause such REO Property to fail to qualify as “foreclosure property” within
the meaning of Section 86OG(a)(8) of the Code or result in the receipt by such

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REMIC of any “income from non-permitted assets” within the meaning of
Section 86OF(a)(2)(B) or any “net income from foreclosure property” within the
meaning of Section 86OG(c)(2) of the Code (or comparable provisions of any
successor or similar legislation).
     The Servicer shall deposit and hold all revenues and funds collected and
received in connection with the operation of each REO Property in the Collection
Account, and the Servicer shall account separately for revenues and funds
received or expended with respect to each REO Property.
     The Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement (and, in particular,
Section 5.01(3)(c)), to do any and all things in connection with any REO
Property as are consistent with the servicing standards set forth in Section
5.01. In connection therewith, the Servicer shall deposit or cause to be
deposited on a daily basis in the Collection Account all revenues and
collections received or collected by it with respect to each REO Property,
including all proceeds of any REO Disposition. Subject to Section 5.15, the
Servicer shall withdraw (without duplication) from the Collection Account, but
solely from the revenues and collections received or collected by it with
respect to a specific REO Property, such funds necessary for the proper
operation, management and maintenance of such REO Property, including the
following:

  (10)   all insurance premiums due and payable in respect of such REO Property;
    (11)   all real estate taxes and assessments in respect of such REO Property
that may result in the imposition of a lien thereon;     (12)   all customary
and reasonable costs and expenses necessary to maintain, repair, appraise,
evaluate, manage or operate such REO Property (including the customary and
reasonable costs incurred by any “managing agent” retained by the Servicer in
connection with the maintenance, management or operation of such REO Property);
    (13)   all reasonable costs and expenses of restoration improvements,
deferred maintenance and tenant improvements; and     (14)   all other
reasonable costs and expenses, including reasonable attorneys’ fees, that the
Servicer may suffer or incur in connection with its performance of its
obligations under this Section (other than costs and expenses that the Servicer
is expressly obligated to bear pursuant to this Agreement).

     To the extent that amounts on deposit in the Collection Account are
insufficient for the purposes set forth in clauses (1) through (5) above, the
Servicer shall, subject to Section 6.04, advance the amount of funds required to
cover the shortfall with respect thereto. The Servicer shall promptly notify the
Purchaser in writing of any failure by the Servicer to make a Servicing Advance
of the type specified in clauses (1) or (2) above (irrespective of whether such
Servicing Advance is claimed to be non-recoverable by the Servicer pursuant to
Section 6.04).
     Following the consummation of an REO Disposition, the Servicer shall remit
to the Purchaser, in accordance with Section 6.01, any proceeds from such REO
Disposition in the Collection Account following the payment of all expenses and
Servicing Advances relating to the subject REO Property.

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     Section 5.14 Sale of Specially Serviced Mortgage Loans and REO Properties.
     Subject to Section 5.01 (and, specifically, Section 5.01(3)(c)) and Section
5.15, the Servicer shall offer to sell any REO Property in the manner that is in
the best interests of the Purchaser or other owner of the REO, but no later than
the time determined by the Servicer to be sufficient to result in the sale of
such REO Property on or prior to the time specified in Section 5.15. In
accordance with the servicing standards set forth in Section 5.01, the Servicer
or designated agent of the Servicer shall solicit bids and offers from Persons
for the purchase of any Specially Serviced Mortgage Loan or REO Property and,
upon receipt thereof, promptly (but in any event within 3 Business Days) present
such bids and offers to the Purchaser. The Servicer shall not accept any bid or
offer for any Specially Serviced Mortgage Loan or REO Property except in
compliance with Section 5.01(3)(c). The Purchaser may reject any bid or offer if
the Purchaser determines the rejection of such bid or offer would be in the best
interests of the Purchaser. The Purchaser shall notify the Servicer of such
determination within three (3) Business Days of notice of any such bids from the
Servicer. If the Purchaser rejects any bid or offer, the Servicer shall, if
appropriate, seek an extension of the 3 year period referred to in Section 5.15.
     Subject to Section 5.01 (and, specifically, Section 5.01(3)(c)) and Section
5.15, the Servicer shall act on behalf of the Purchaser in negotiating and
taking any other action necessary or appropriate in connection with the sale of
any Specially Serviced Mortgage Loan or REO Property, including the collection
of all amounts payable in connection therewith. The terms of sale of any
Specially Serviced Mortgage Loan or REO Property shall be in the sole discretion
of the Purchaser. Any sale of a Specially Serviced Mortgage Loan or any REO
Disposition shall be without recourse to, or representation or warranty by, the
Purchaser or the Servicer, and, if consummated in accordance with the terms of
this Agreement, then the Servicer shall have no liability to the Purchaser with
respect to the purchase price therefor accepted by the Purchaser. The proceeds
of any sale after deduction of the expenses of such sale incurred in connection
therewith shall be promptly deposited in (a) if such sale is an REO Disposition,
in the Collection Account in accordance with Section 5.13 and (b) in any other
circumstance, the Collection Account in accordance with Section 5.04.

     Section 5.15   Realization Upon Specially Serviced Mortgage Loans and REO
Properties.

     Subject to Section 5.01(3)(c), the Servicer shall foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Specially Serviced Mortgage Loans as come into and continue in default and as to
which (a) in the reasonable judgment of the Servicer, no satisfactory
arrangements can, in accordance with prudent lending practices, be made for
collection of delinquent payments pursuant to Section 5.01 and (b) such
foreclosure or other conversion is otherwise in accordance with Section 5.01.
The Servicer shall not be required to expend its own funds in connection with
any foreclosure or towards the restoration, repair, protection or maintenance of
any property unless it shall determine that such expenses will be recoverable to
it as Servicing Advances either through Liquidation Proceeds or through
Insurance Proceeds (in accordance with Section 5.05) or from any other source
relating to the Specially Serviced Mortgage Loan. The Servicer shall be required
to advance funds for all other costs and expenses incurred by it in any such
foreclosure proceedings; provided that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property, as
contemplated by Section 5.05.

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     Upon any Mortgaged Property becoming an REO Property, the Servicer shall
promptly notify the Purchaser thereof, specifying the date on which such
Mortgaged Property became an REO Property. Pursuant to its efforts to sell such
REO Property, the Servicer shall, either itself or through an agent selected by
it, protect and conserve such REO Property in accordance with the servicing
standards set forth in Section 5.01 and may, subject to Section 5.01(3)(c) and
incident to its conservation and protection of the interests of the Purchaser,
rent the same, or any part thereof, for the period to the sale of such REO
Property.
     Notwithstanding anything to the contrary contained herein, the Purchaser
shall not, and the Servicer shall not on the Purchaser’s behalf, acquire any
real property (or personal property incident to such real property) except in
connection with a default or a default that is imminent on a Mortgage Loan. If
the Purchaser acquires any real property (or personal property incident to such
real property) in connection with such a default, then such property shall be
disposed of by the Servicer in accordance with this Section and Section 5.14 as
soon as possible but in no event later than 2 years after its acquisition by the
Servicer on behalf of the Purchaser, unless the Servicer obtains, at the expense
of the Purchaser, in a timely fashion an extension from the Internal Revenue
Service for an additional specified period.
     Any recommendation of the Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Servicer that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any REO Property, net of
reimbursement to the Servicer for Servicing Advances incurred with respect to
such REO Property under Section 5.13, shall be applied to the payment of the
costs and expenses set forth in Section 5.13(4), with any remaining amounts to
be promptly deposited in the Collection Account in accordance with Section 5.13.
     If, in the exercise of its servicing obligations with respect to any
Mortgaged Property hereunder, the Servicer deems it is necessary or advisable to
obtain an Environmental Assessment, then the Servicer shall so obtain an
Environmental Assessment, it being understood that all reasonable costs and
expenses incurred by the Servicer in connection with any such Environmental
Assessment (including the cost thereof) shall be deemed to be Servicing Advances
recoverable by the Servicer pursuant to Section 5.13(4). Such Environmental
Assessment shall (a) assess whether (1) such Mortgaged Property is in material
violation of applicable Environmental Laws or (2) after consultation with an
environmental expert, taking the actions necessary to comply with applicable
Environmental Laws is reasonably likely to produce a greater recovery on a net
present value basis than not taking such actions, and (b) identify whether
(1) any circumstances are present at such Mortgaged Property relating to the
use, management or disposal of any hazardous materials for which investigation,
testing, monitoring, containment, clean-up or re mediation could be required
under any federal, state or local law or regulation, or (2) if such
circumstances exist, after consultation with an environmental expert, taking
such actions is reasonably likely to produce a greater recovery on a present
value basis than not taking such actions. (The conditions described in the
immediately preceding clauses (a) and (b) shall be referred to herein as
“Environmental Conditions Precedent to Foreclosure.”) If any such Environmental
Assessment so warrants, the Servicer is hereby authorized to and shall perform
such additional environmental testing as it deems necessary and prudent to
establish the satisfaction of the foregoing Environmental Conditions Precedent
to Foreclosure or to proceed as set forth below (such additional testing
thereafter being included in the term “Environmental Assessment “).

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     If an Environmental Assessment deemed necessary or advisable by the
Servicer in accordance with this Section 5.15 establishes that any of the
Environmental Conditions Precedent to Foreclosure is not satisfied with respect
to any Mortgaged Property, but the Servicer in good faith reasonably believes
that it is in the best economic interest of the Purchaser to proceed against
such Mortgaged Property and, if title thereto is acquired, to take such
remedial, corrective or other action with respect to the unsatisfied condition
or conditions as may be prescribed by applicable law to satisfy such condition
or conditions, then the Servicer shall so notify the Purchaser. If, pursuant to
Section 5.01(3)(c), the Purchaser has notified the Servicer in writing to
proceed against such Mortgaged Property, then the Servicer shall so proceed. The
cost of any remedial, corrective or other action contemplated by the preceding
sentence in respect of any of the Environmental Conditions Precedent to
Foreclosure that is not satisfied shall not be an expense of the Servicer and
the Servicer shall not be required to expend or risk its own funds or otherwise
incur any financial liability in connection with any such action.
     If an Environmental Assessment deemed necessary or advisable by the
Servicer in accordance with this Section 5.15 establishes that any of the
Environmental Conditions Precedent to Foreclosure is not satisfied with respect
to any Mortgaged Property and, in accordance with Section 5.01(3)(c), the
Purchaser elects or is deemed to have elected not to proceed against such
Mortgaged Property, then the Servicer shall, subject to Section 5.01(3)(c), take
such action as it deems to be in the best economic interest of the Purchaser
(other than proceeding against the Mortgaged Property or directly or indirectly
becoming the owner or operator thereof) as determined in accordance with the
servicing standard set forth in Section 5.01 and is hereby authorized at such
time as it deems appropriate to release such Mortgaged Property from the lien of
the related Mortgage.
     Prior to the Servicer taking any action with respect to the use, management
or disposal of any hazardous materials on any Mortgaged Property, the Servicer
shall request the approval of the Purchaser in accordance with Section
5.01(3)(c) and, if such action is approved by the Purchaser, (a) keep the
Purchaser apprised of the progress of such action; and (b) take such action in
compliance with all applicable Environmental Laws.
     Section 5.16 Investment of Funds in the Collection Account.
     The Servicer may direct any depository institution which holds the
Collection Account to invest the funds in the Collection Account in one or more
Permitted Investments bearing interest. All such Permitted Investments shall be
held to maturity, unless payable on demand. In the event amounts on deposit in
the Collection Account are at any time invested in a Permitted Investment
payable on demand, the Servicer shall:

  (a)   consistent with any notice required to be given thereunder, demand that
payment thereon be made on the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of (1) all amounts then
payable thereunder and (2) the amount required to be withdrawn on such date; and
    (b)   demand payment of all amounts due thereunder promptly upon
determination by the Servicer or notice from the Purchaser that such Permitted
Investment would not constitute a Permitted Investment in respect of funds
thereafter on deposit in the Collection Account.

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     All income and gain realized from investment of funds deposited in the
Collection Account shall be for the benefit of the Servicer and shall be subject
to its withdrawal in accordance with Section 5.05. The Servicer shall deposit in
the Collection Account the amount of any loss incurred in respect of any
Permitted Investment immediately upon realization of such loss.
     Except as otherwise expressly provided in this Agreement, if any default
occurs in the making of a payment due under any Permitted Investment, or if a
default occurs in any other performance required under any Permitted Investment,
the Purchaser may elect to take such action, or instruct the Servicer to take
such action, as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings, at the
expense of the Servicer.
     Section 5.17 Compensating Interest.
     Not later than the close of business on the Business Day preceding each
Remittance Date, the Servicer shall from its own funds deposit in the Collection
Account an amount equal to the lesser of (i) the aggregate of the interest on
the amount of each Principal Prepayment included in such remittance at the
related Remittance Rate from the date of such Principal Prepayment to the end of
the month in which such Principal Prepayment occurred, to the extent not
collected from payments on or other recovery in respect of the related Mortgage
Loan and (ii) the aggregate of the Servicing Fees in respect of the most
recently ended calendar month.”
ARTICLE VI:
REPORTS; REMITTANCES; ADVANCES
     Section 6.01 Remittances.
     (1) On each Remittance Date, the Servicer shall remit to the Purchaser
(a) all amounts credited to the Collection Account as of the close of business
on the last day of the related Due Period (including (1) the amount of any
Principal Prepayment, together with interest thereon at the related Remittance
Rate to the end of the month in which prepayment of the related Mortgage Loan
occurs to the extent deposited pursuant to Section 5.17, and (2) all proceeds of
any REO Disposition net of amounts payable to the Servicer pursuant to Section
5.13), net of charges against or withdrawals from the Collection Account in
accordance with Section 5.05, which charges against or withdrawals from the
Collection Account the Servicer shall make solely on such Remittance Date, plus
(b) all Monthly Payments that were delinquent on the last day of the related Due
Period but received prior to the close of business on the related Determination
Date, plus (c) all Monthly Advances, if any, which the Servicer is obligated to
remit pursuant to Section 6.03; provided that the Servicer shall not be required
to remit, until the next following Remittance Date, any amounts attributable to
Monthly Payments collected but due on a Due Date or Dates subsequent to the
related Due Period.
     (2) All remittances made to the Purchaser on each Remittance Date will be
made to the Purchaser by wire transfer of immediately available funds
accordingly to the instructions that will be provided by Purchaser to the
Servicer.
     (3) With respect to any remittance received by the Purchaser after the
Business Day on which such payment was due, the Servicer shall pay to the
Purchaser interest on any such late

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payment at an annual rate equal to One-month LIBOR (as published in the Wall
Street Journal) plus 200 basis points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be paid by the Servicer
to the Purchaser on the date such late payment is made and shall cover the
period commencing with the Business Day on which such payment was due and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with such late payment. Neither the payment by
the Servicer nor the acceptance by the Purchaser of any such interest shall be
deemed an extension of time for payment or a waiver by the Purchaser of any
Event of Default.
     Section 6.02 Reporting.
     On or before the 5th calendar day (or, if such day is not a Business Day,
on the immediately succeeding Business Day) of each month during the term
hereof, the Servicer shall deliver to the Purchaser monthly accounting reports
in the form of Exhibits 6.02(a) through 6.02(g) attached hereto with respect to
the most recently ended Monthly Period. Such monthly accounting reports shall
include information as to the aggregate Unpaid Principal Balance of all Mortgage
Loans, the scheduled amortization of all Mortgage Loans, any delinquencies and
the amount of any Principal Prepayments as of the most recently ended Record
Date.
     The Servicer shall provide the Purchaser with such information concerning
the Mortgage Loans as is necessary for the Purchaser to prepare its federal
income tax return as the Purchaser may reasonably request from time to time.
     Section 6.03 Monthly Advances by the Servicer.
     (1) Not later than the close of business on the Business Day immediately
preceding each Remittance Date, the Servicer shall deposit in the Collection
Account an amount equal to all Monthly Payments not previously advanced by the
Servicer (with interest adjusted to the Remittance Rate) that were due on a
Mortgage Loan and delinquent at the close of business on the related
Determination Date. The Servicer may reduce the total amount to be deposited in
the Collection Account as required by the foregoing sentence by the amount of
funds in the Collection Account which represent Prepaid Monthly Payments.
     (2) The Servicer’s obligations to make Monthly Advances as to any Mortgage
Loan will continue through the last Monthly Payment due prior to the payment in
full of the Mortgage Loan, or through the Remittance Date prior to the
Remittance Date for the remittance of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds, Condemnation Proceeds and
REO Disposition Proceeds) with respect to the Mortgage Loan; provided that such
obligation shall cease if the Servicer furnishes to the Purchaser an Officers’
Certificate evidencing the determination by the Servicer in accordance with
Section 6.04 that an advance with respect to such Mortgage Loan would constitute
a Non-recoverable Advance.
     Section 6.04 Non-recoverable Advances.
     The determination by the Servicer that it has made a Non-recoverable
Advance or that any Monthly Advance or Servicing Advance, if made, would
constitute a Non-recoverable Advance shall be evidenced by an Officers’
Certificate delivered to the Purchaser detailing the reasons for such
determination.

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     Section 6.05 Itemization of Servicing Advances.
     The Servicer shall provide the Purchaser with an itemization of all
Servicing Advances incurred or made by the Servicer hereunder as the Purchaser
may from time to time reasonably request.
     Section 6.06 Officer’s Certificate.
     The Seller shall deliver to the Purchaser an Officer’s Certificate in the
form attached hereto as Exhibit 9 on the Initial Funding Date and upon
Purchaser’s reasonable request thereafter.
ARTICLE VII:
GENERAL SERVICING PROCEDURE
     Section 7.01 Enforcement of Due-on-Sale Clauses, Assumption Agreements.
     (1) The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any “
due-on-sale” clause applicable thereto; provided that the Servicer shall not
exercise any such rights if prohibited by law from doing so or if the exercise
of such rights would impair or threaten to impair any recovery under the related
Primary Insurance Policy, if any.
     (2) If the Servicer is prohibited from enforcing such “due-on-sale” clause,
then the Servicer will enter into an assumption agreement with the Person to
whom the Mortgaged Property has been conveyed or is proposed to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and, to the
extent permitted by applicable state law, the Mortgagor remains liable thereon.
(For purposes of this Section 7.01, the term “assumption” is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.) If any
Mortgage Loan is to be assumed, then the Servicer shall inquire into the
creditworthiness of the proposed transferee and shall use the same underwriting
criteria for approving the credit of the proposed transferee that are used with
respect to underwriting mortgage loans of the same type as the Mortgage Loans.
Where an assumption is allowed, the Servicer, with the prior written consent of
the primary mortgage insurer, if any, and subject to the conditions of Section
7.01(3), shall, and is hereby authorized to, enter into a substitution of
liability agreement with the Person to whom the Mortgaged Property is proposed
to be conveyed pursuant to which the original mortgagor is released from
liability and such Person is substituted as mortgagor and becomes liable under
the related Mortgage Note. Any such substitution of liability agreement shall be
in lieu of an assumption agreement. In no event shall the Note Rate, the amount
of the Monthly Payment or the final maturity date be changed. The Servicer shall
notify the Purchaser that any such substitution of liability or assumption
agreement has been completed by forwarding to the Purchaser the original of any
such substitution of liability or assumption agreement, which document shall be
added to the related Purchaser’s Mortgage File and shall, for all purposes, be
considered a part of such Purchaser’s Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an

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assumption or substitution of liability agreement shall be retained by the
Servicer as additional compensation for servicing the Mortgage Loans.
     (3) If the credit of the proposed transferee does not meet such
underwriting criteria, then the Servicer shall, to the extent permitted by the
Mortgage or the Mortgage Note and by applicable law, accelerate the maturity of
the Mortgage Loan.
     Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files.
     Upon the payment in full of any Mortgage Loan, the Servicer will
immediately notify the Purchaser by a certification of a Servicing Officer,
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 5.04 have been or
will be so deposited and shall request delivery to it of the Purchaser’s
Mortgage File held by the Purchaser. Upon receipt of such certification and
request, the Purchaser shall promptly release or cause to be released the
related mortgage documents to the Servicer and the Servicer shall promptly
prepare and process any satisfaction or release. No expense incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account.
     If the Servicer satisfies or releases a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage, or should it
otherwise take such action which results in a reduction of the coverage under
the Primary Insurance Policy, if any, then the Servicer shall promptly give
written notice thereof to the Purchaser, and, within 10 Business Days following
written demand therefor from the Purchaser to the Servicer, the Servicer shall
repurchase the related Mortgage Loan by paying to the Purchaser the Repurchase
Price therefor by wire transfer of immediately available funds directly to the
Purchaser’s Account.
     Section 7.03 Servicing Compensation.
     As compensation for its services hereunder, the Servicer shall be entitled
to retain from interest payments on the Mortgage Loans the amounts provided for
as the Servicing Fee. The Servicing Fee in respect of a Mortgage Loan for a
particular month shall become payable only upon the receipt by the Servicer from
the Mortgagor of the full Monthly Payment in respect of such Mortgage Loan.
Additional servicing compensation in the form of assumption fees, as provided in
Section 7.01, late payment charges and other servicer compensation for
modifications, short sales, and other shall be retained by the Servicer to the
extent not required to be deposited in the Collection Account. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for herein.
     Section 7.04 Annual Compliance Statement.
     The Servicer will deliver to the Purchaser and any Master Servicer, no
later than March 1 of each year, beginning with March 1, 2007, an Officers’
Certificate (“Compliance Statement”) to the effect that (i) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such officer’s supervision, and (ii) to
the best of such officers’ knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement in all material respects
throughout such year, or, if there has

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been a failure to fulfill any such obligation in any material respect,
specifying each such failure and the nature and status thereof.
     Section 7.05 Annual Assessment of Compliance and Attestation Report.
     The Servicer shall deliver to the Purchaser and any Master Servicer, no
later than March 1 of each year, beginning March 1, 2007, an assessment of
compliance with servicing criteria on a certification substantially in the form
of Exhibit 11 hereto (“Assessment of Compliance”), or such other form as
mutually agreed upon by the Servicer and the Purchaser, and related attestation
report (“Attestation Report”) as of and for the period ending on December 31 of
the preceding calendar year, which Assessment of Compliance and Attestation
Report will relate to each of the servicing criteria identified as the
Servicer’s responsibility on Schedule 1122 thereto (the “Servicing Criteria”)
and shall comply with the provisions of Regulation AB. Each such Assessment of
Compliance shall include (a) a statement of the party’s responsibility for
assessing compliance with the Servicing Criteria, (b) a statement that such
party used the criteria identified in Item 1122 (d) of Regulation AB to assess
compliance with the Servicing Criteria, (c) disclosure of any material instance
of noncompliance identified by such party, and (d) a statement that a registered
public accounting firm has issued an Attestation Report on such party’s
Assessment of Compliance with the Servicing Criteria.
     Section 7.06 Purchaser’s Right to Examine Servicer Records.
     The Purchaser shall have the right to examine and audit, during business
hours or at such other times as are reasonable under applicable circumstances,
upon ten days advance notice any and all of (i) the credit and other loan files
relating to the Mortgage Loans or the Mortgagors, (ii) any and all books,
records, documentation or other information of the Servicer (whether held by the
Servicer or by another) relating to the servicing of the Mortgage Loans and
(iii) any and all books, records, documentation or other information of the
Servicer (whether held by the Servicer or by another) that are relevant to the
performance or observance by the Servicer of the terms, covenants or conditions
of this Agreement. The Servicer shall be obligated to make the foregoing
information available to the Purchaser at the site where such information is
stored; provided that the Purchaser shall be required to pay all reasonable
costs and expenses incurred by the Servicer in making such information
available.
     Section 7.07 Additional Requirements in Connection With Securitization
Transactions.
     Back-Up SOX Certification. In connection with any Securitization
Transaction, the Servicer shall provide to the Purchaser and the Master
Servicer, no later than March 1 of each year in which the Trust is required to
file a Form 10-K with the SEC in connection with a Pass-Through Transfer, an
Officer’s Certificate (a “Back-Up SOX Certification”) in the form of Exhibit 12
attached hereto.
     Servicer Information. If so requested by the Purchaser or any Depositor in
connection with any Securitization Transaction, the Servicer shall provide such
information regarding the Servicer, as servicer of the Mortgage Loans, and any
Subservicer, as is reasonably requested for the purpose of compliance with
Item 1108 of Regulation AB.
     Additional Monthly Reporting Requirements:

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     In connection with any Securitization Transaction, the Servicer shall
provide to the Purchaser and the Master Servicer prompt notice of the occurrence
of any of the following: any event of default under the terms of this Agreement;
any merger, consolidation or sale of substantially all of the assets of the
Servicer; the Servicer’s engagement of any subservicer, contractor or vendor to
perform or assist in the performance of any of the Servicer’s obligations under
this Agreement; any material litigation involving the Servicer; and any
affiliation or other significant relationship between the Servicer and other
transaction parties, as such parties are identified to the Servicer by the
Purchaser or any Depositor in writing in advance of such Securitization
Transaction.
     No later than ten days prior to the deadline for the filing of any
Distribution Report that includes any of the Mortgage Loans serviced by the
Servicer, the Servicer shall provide to the Purchaser and the Master Servicer
notice of the occurrence of any of the following events along with all
information, data and materials related thereto as may be required to be
included in the related Distribution Report (as specified in the provisions of
Regulation AB referenced below):

  (a)   any material changes to the Servicer’s definition or determination of
delinquencies, charge-offs and uncollectible accounts (Item 1121 (a) (9) of
Regulation AB);     (b)   any material modifications, extensions or waivers of
pool asset terms, fees, penalties or payments during the distribution period or
that have cumulatively become material over time (Item 1121(a) (11) of
Regulation AB);     (c)   material breaches of pool asset representations or
warranties or transaction covenants (Item 1121(a) (12) of Regulation AB); and  
  (d)   information regarding new asset-backed security issuances backed by the
same pool assets, any pool asset changes (such as, additions, substitutions or
repurchases), and any material changes in origination, underwriting or other
criteria for acquisition or selection of pool assets (Item 1121(a) (14) of
Regulation AB).

     Additional Information. The Servicer shall provide to the Purchaser and the
Master Servicer such additional information as the Purchaser or Master Servicer
may reasonably request, including evidence of the authorization of the person
signing any certification or statement, financial information and reports, and
such other information related to the Servicer or its performance hereunder.
     Intention of the Parties and Interpretation. The Purchaser and the Servicer
acknowledge and agree that the purpose of Sections 7.04, 7.05 and this 7.07 is
to facilitate compliance by the Master Servicer and the Depositor with the
provisions of Regulation AB, as such may be amended from time to time and
subject to clarification and interpretive advice as may be issued by the staff
of the SEC from time to time. Therefore, the Servicer agrees that (a) the
obligations of the Servicer hereunder shall be interpreted in such a manner as
to accomplish that purpose, (b) the Servicer’s obligations hereunder will be
supplemented and modified as necessary to be consistent with any such
amendments, interpretive advice or guidance, convention or consensus among
active participants in the asset-backed securities markets, advice of counsel,
or otherwise in respect of the requirements of Regulation AB, (c) the Servicer
shall comply with

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requests made by the Master Servicer or the Depositor for delivery of additional
or different information as the Master Servicer or the Depositor may determine
in good faith is necessary to comply with the provisions of Regulation AB, and
(d) no amendment of this Agreement shall be required to effect such changes in
the Servicer’s obligations as are necessary to accommodate evolving
interpretations of the provisions of Regulation AB.
     Neither the Purchaser, nor any Depositor or Master Servicer shall exercise
its right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the SEC
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Purchaser (including any of its
assignees or designees, any Depositor and any Master Servicer) shall cooperate
with the Servicer by providing timely notice of requests for information under
these provisions and by reasonably limiting such requests to information
required, in the Purchaser’s reasonable judgment, to comply with Regulation AB.
     Indemnification. The Servicer shall indemnify and hold harmless the
Purchaser, the Master Servicer and each of their directors, officers, employees,
agents and affiliates (each, an “Indemnified Party”) from and against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses sustained by an
Indemnified Party arising out of or based upon (i) any breach by the Servicer of
any of its obligations under Section 7.04, 7.05 or 7.07, including particularly
its obligations to provide any Compliance Statement, Assessment of Compliance,
Attestation Report or any information, data or materials required to be provided
by the Servicer under this Agreement and included in any Exchange Act report;
(b) any untrue statement of a material fact contained or alleged to be contained
in any information, data or material provided by the Servicer under
Sections 7.04, 7.05 or 7.07 hereof (the “Servicer Information”) or the omission
or alleged omission to state in the Servicer Information a material fact
required to be stated in the Servicer Information or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; or (c) the negligence, bad faith or willful misconduct of
the Servicer in connection with its performance under Sections 7.04, 7.05 and
7.07. If the indemnification provided for herein is unavailable or insufficient
to hold harmless an Indemnified Party , then the Servicer agrees that it shall
contribute to the amount paid or payable by an Indemnified Party as a result of
any claims, losses, damages or liabilities incurred by an Indemnified Party in
such proportion as is appropriate to reflect the relative fault of the
Indemnified Party on one hand and the Servicer on the other. The indemnification
in this subsection shall survive the termination of this Agreement or the
termination of any party to this Agreement.
     Master Servicer as Third Party Beneficiary. For purposes of Sections 7.04.
7.05 and 7.07 related to the requirements for delivery of Assessments of
Compliance, Attestation Reports, Compliance Statements, Back-Up SOX Certificates
and additional monthly reporting requirements, the Master Servicer shall be
considered a third-party beneficiary of this Agreement, entitled to all rights
and benefits hereof as if it were a party to the Agreement.
ARTICLE VIII:
REPORTS TO BE PREPARED BY THE SERVICER
     Section 8.01 The Servicer’s Reporting Requirements.

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     Electronic Format. If requested by the Purchaser, the Servicer shall supply
any and all information regarding the Mortgage Loans and the REO Properties,
including all reports required to be delivered pursuant to Section 5.03, Section
6.02 and this Section 8.01, to the Purchaser in electronic format reasonably
acceptable to Purchaser, unless otherwise limited by the servicing system
utilized by the Servicer.
     Additional Reports; Further Assurances. On or before the 3rd Business Day
preceding each Determination Date, the Servicer shall deliver to the Purchaser
(i) a report, acceptable to the Purchaser, describing in reasonable detail all
Mortgage Loans that are 90 days or more delinquent and the Servicer’s activities
in connection with such delinquencies and (ii) a report (substantially in the
form of Exhibit 8.01 attached hereto) with respect to delinquent Mortgage Loans.
Utilizing resources reasonably available to the Servicer without incurring any
cost except the Servicer’s overhead and employees’ salaries, the Servicer shall
furnish to the Purchaser during the term of this Agreement such periodic,
special or other reports, information or documentation, whether or not provided
for herein, as shall be reasonably requested by the Purchaser with respect to
Mortgage Loans or REO Properties (provided the Purchaser shall have given the
Servicer reasonable notice and opportunity to prepare such reports, information
or documentation), including any reports, information or documentation
reasonably required to comply with any regulations of any governmental agency or
body having jurisdiction over the Purchaser, all such reports or information to
be as provided by and in accordance with such applicable instructions and
directions as the Purchaser may reasonably request. If any of such reports are
not customarily prepared by the Servicer or require that the Servicer program
data processing systems to create the reports, then the Purchaser shall pay to
the Servicer a fee mutually agreed to by the Purchaser and the Servicer taking
into account the Servicer’s actual time and cost in preparing such reports. The
Servicer agrees to execute and deliver all such instruments and take all such
action as the Purchaser, from time to time, may reasonably request in order to
effectuate the purposes and to carry out the terms of this Agreement.
     Section 8.02 Financial Statements.
     The Servicer understands that, in connection with marketing the Mortgage
Loans, the Purchaser may make available to any prospective purchaser of the
Mortgage Loans the Servicer’s audited financial statements for its fiscal year
1999 and its audited financial statements for fiscal year 2000, together with
any additional statements provided pursuant to the next sentence. During the
term hereof, the Servicer will deliver to the Purchaser audited financial
statements for each of its fiscal years following the Funding Date and all other
financial statements prepared following the Funding Date to the extent any such
statements are available upon request to the public at large.
     The Servicer also agrees to make available upon reasonable notice and
during normal business hours to any prospective purchasers of the Mortgage Loans
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Servicer or the financial
statements of the Servicer which may affect, in any material respect, the
Servicer’s ability to comply with its obligations under this Agreement, and to
permit any prospective purchasers upon reasonable notice and during normal
business hours to inspect the Servicer’s servicing facilities for the purpose of
satisfying such prospective purchasers that the Servicer has the ability to
service the Mortgage Loans in accordance with this Agreement.

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ARTICLE IX:
THE SELLERS
     Section 9.01 Indemnification; Third Party Claims.
     Each Seller shall indemnify and hold harmless the Purchaser, its directors,
officers, agents, employees, and assignees (each, an “Indemnified Party”) from
and against any costs, damages, expenses (including reasonable attorneys’ fees
and costs, irrespective of whether or not incurred in connection with the
defense of any actual or threatened action, proceeding, or claim), fines,
forfeitures, injuries, liabilities or losses (“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 such Seller of any of its
representations and warranties contained in Article III or (ii) a breach by such
Seller 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 in Section 9.03. The applicable
Seller shall immediately (i) notify the Purchaser if a claim is made by a third
party with respect to this Agreement, any Mortgage Loan and/or any REO Property
(ii) assume (with the prior written consent of the Purchaser) the defense of any
such claim and pay all expenses in connection therewith, including attorneys’
fees, and (iii) promptly pay, discharge and satisfy any judgment, award, or
decree that may be entered against it or the Purchaser in respect of such claim.
Nothing contained herein shall prohibit the Purchaser, at its expense, from
retaining its own counsel to assist in any such proceedings or to observe such
proceedings; provided that neither Seller shall be obligated to pay or comply
with any settlement to which it has not consented. The Servicer shall be
reimbursed from amounts on deposit in the Collection Account for all amounts
advanced by it pursuant to the second preceding sentence except when the claim
in any way relates to the Servicer’s indemnification pursuant to this Section
9.01.
     Section 9.02 Merger or Consolidation of the Seller.
     Each Seller will keep in full effect its existence, rights and franchises
as a corporation or a Delaware business trust, as applicable, 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.
     Any Person into which a Seller 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 such Seller’s assets to such
Person) to which the Seller shall be a party, or any Person succeeding to the
business of the Seller, shall be the successor of the Seller 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; provided
that, unless otherwise consented to by the Purchaser, the successor or surviving
Person, in the case of a merger or consolidation, etc. of the Servicer, shall be
an institution qualified to service mortgage loans on behalf of FNMA and FHLMC
in accordance with the requirements of Section 3.02(1), shall not cause a rating
on any security backed by a Mortgage Loan to be downgraded and shall satisfy the
requirements of Section 12.01 with respect to the qualifications of a successor
to such Seller.

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     Section 9.03 Limitation on Liability of the Sellers and Others.
     Neither the Sellers nor any of the officers, employees or agents of the
Sellers shall be under any liability to the Purchaser for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement or pursuant to the express written instructions of the Purchaser, or
for errors in judgment made in good faith; provided that this provision shall
not protect the Sellers or any such Person against any breach of warranties or
representations made herein, or failure to perform its obligations in compliance
with any standard of care set forth in this Agreement, or any liability which
would otherwise be imposed by reasons of willful misfeasance, bad faith, gross
negligence or any breach in the performance of the obligations and duties
hereunder. The Sellers and any officer, employee or agent of the Sellers may
rely in good faith on any document of any kind reasonably believed by the
Sellers or such Person to be genuine and prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
     The Sellers shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to their duties hereunder and
which in their opinion may involve them in any expense or liability; provided
that the Sellers may in their discretion undertake any such action 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 the Sellers shall be entitled to be reimbursed therefor
out of the Collection Account. This indemnity shall survive the termination of
this Agreement.
     Section 9.04 Servicer Not to Resign.
     With respect to the retention by PHH Mortgage of the servicing of the
Mortgage Loans and the REO Properties hereunder, PHH Mortgage acknowledges that
the Purchaser has acted in reliance upon PHH Mortgage’s Independent status, the
adequacy of its servicing facilities, plan, personnel, records and procedures,
its integrity, reputation and financial standing and the continuance thereof.
Consequently, PHH Mortgage shall not assign the servicing rights retained by it
hereunder to any third party nor resign from the obligations and duties hereby
imposed on it except (i) with the approval of the Purchaser, such approval not
to be unreasonably withheld, or (ii) 3 Business Days following any determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by PHH Mortgage. Any determination permitting
the transfer of the servicing rights or the resignation of PHH Mortgage under
Subsection (ii) hereof shall be evidenced by an opinion of counsel to such
effect delivered to the Purchaser, which opinion of counsel shall be in form and
substance reasonably acceptable to the Purchaser.
ARTICLE X:
DEFAULT
     Section 10.01 Events of Default.
     In case one or more of the following events shall occur and be continuing:

  (1)   any failure by the Servicer to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of 3 Business Days unless such failure to remit is due to a cause
beyond the

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      Servicer’s control, including an act of God, act of civil, military or
governmental authority, fire, epidemic, flood, blizzard, earthquake, riot, war,
or sabotage, provided that the Servicer gives the Purchaser notice of such cause
promptly and uses its reasonable efforts to correct such failure to remit and
does so remit within 2 Business Days following the end of the duration of the
cause of such failure to remit;     (2)   any failure on the part of a
Seller/Servicer duly to observe or perform in any material respect any of the
covenants or agreements on the part of such Seller/Servicer set forth in this
Agreement which continues unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the applicable Seller/Servicer by the Purchaser; provided
that such 30-day period shall not begin with respect to any failure to cure,
repurchase or substitute in accordance with Sections 2.04 and/or 3.04 until the
expiration of the cure periods provided for in Sections 2.04 and/or 3.04, as
applicable;     (3)   any filing of an Insolvency Proceeding by or on behalf of
a Seller/Servicer, any consent by or on behalf of a Seller/Servicer to the
filing of an Insolvency Proceeding against a Seller/Servicer, or any admission
by or on behalf of a Seller/Servicer of its inability to pay its debts generally
as the same become due;     (4)   any filing of an Insolvency Proceeding against
a Seller/Servicer that remains undismissed or unstayed for a period of 60 days
after the filing thereof;     (5)   any issuance of any attachment or execution
against, or any appointment of a conservator, receiver or liquidator with
respect to, all or substantially all of the assets of a Seller/Servicer;     (6)
  any failure or inability of PHH Mortgage to be eligible to service Mortgage
Loans for FNMA or FHLMC;     (7)   any sale, transfer, assignment, or other
disposition by a Seller/Servicer of all or substantially all of its property or
assets to a Person who does not meet the qualifications enumerated or
incorporated by reference into Section 9.02, any assignment by a Seller/Servicer
of this Agreement or any of a Seller’s/Servicer’s rights or obligations
hereunder except in accordance with Section 9.04, or any action taken or omitted
to be taken by a Seller/Servicer in contemplation or in furtherance of any of
the foregoing, without the consent of the Purchaser; or     (8)   any failure by
the Seller to be in compliance with applicable “doing business” or licensing
laws of any jurisdiction where Mortgaged Property is located;

then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Sellers may, in
addition to whatever rights the Purchaser may have at law or in equity to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Sellers under this Agreement and in and to the
Mortgage Loans and the proceeds thereof subject to Section 12.01, without the
Purchaser’s incurring any penalty or fee of any kind whatsoever in connection
therewith; provided that, upon the occurrence of an Event of Default under
Subsection (3), (4) or (5) of this

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Section 10.01, this Agreement and all authority and power of the Sellers
hereunder (whether with respect to the Mortgage Loans, the REO Properties or
otherwise) shall automatically cease. On or after the receipt by the Sellers of
such written notice, all authority and power of the Sellers under this Agreement
(whether with respect to the Mortgage Loans or otherwise) shall cease.
Notwithstanding the occurrence of an Event of Default, the Sellers or the
Servicer, as applicable, shall be entitled to all amounts due to such party and
remaining unpaid on such date of termination.
ARTICLE XI:
TERMINATION
     Section 11.01 Term and Termination.
     (1) The servicing obligations of the Servicer under this Agreement may be
terminated as provided in Section 10.01 hereof.
     (2) In any case other than as provided under Subsection (1) hereof, the
respective obligations and responsibilities of the Sellers hereunder shall
terminate upon: (a) the later of the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan or the disposition of
all REO Property and the remittance of all funds due hereunder; or (b) the
mutual written consent of the Sellers and the Purchaser.
     (3) Upon any termination of this Agreement or the servicing obligations of
the Servicer hereunder, then the Servicer shall prepare, execute and deliver all
agreements, documents and instruments, including all Servicer Mortgage Files,
and do or accomplish all other acts or things necessary or appropriate to effect
such termination, all at the Servicer’s sole expense. In any such event, the
Servicer agrees to cooperate with the Purchaser in effecting the termination of
the Servicer’s servicing responsibilities hereunder, including the transfer to
the Purchaser or its designee for administration by it of all cash amounts which
shall at the time be contained in, or credited by the Servicer to, the
Collection Account and/or the Escrow Account or thereafter received with respect
to any Mortgage Loan or REO Property.
     Section 11.02 Survival.
     Notwithstanding anything to the contrary contained herein, the
representations and warranties of the parties contained herein and in any
certificate or other instrument delivered pursuant hereto, as well as the other
covenants hereof (including those set forth in Section 9.01) that, by their
terms, require performance after the termination by this Agreement, shall
survive the delivery and payment for the Mortgage Loans on each Funding Date as
well as the termination of this Agreement and shall inure to the benefit of the
parties, their successors and assigns. Sellers further agree that the
representations, warranties and covenants made by Sellers herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by Purchaser notwithstanding any investigation heretofore made by
Purchaser or on Purchaser’s behalf.

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ARTICLE XII:
GENERAL PROVISIONS
     Section 12.01 Successor to the Servicer.
     Upon the termination of the Servicer’s servicing responsibilities and
duties under this Agreement pursuant to Section 9.04, 10.01, or 11.01, the
Purchaser shall (i) succeed to and assume all of the Servicer ‘s
responsibilities, rights, duties and obligations under this Agreement or
(ii) appoint a successor servicer which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Servicer under this
Agreement prior to the termination of the Servicer’s responsibilities, duties
and liabilities under this Agreement. If the Servicer’s duties, responsibilities
and liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, then the Servicer shall continue to discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof (if applicable)
all on the terms and conditions contained herein and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The termination of the Servicer’s servicing responsibilities
pursuant to any of the aforementioned Sections shall not, among other things,
relieve the Servicer of its obligations pursuant to Section 2.04 and/or 7.02,
the representations and warranties or other obligations set forth in
Sections 2.04, 3.01, 3.02 and 3.03 and the remedies available to the Purchaser
under the various provisions of this Agreement. In addition, such termination
shall not affect any claims that the Purchaser may have against the Servicer
arising prior to any such termination.
     Section 12.02 Governing Law.
     This Agreement is to be governed by, and construed in accordance with the
internal laws of the State of New York without giving effect to principals of
conflicts of laws. The obligations, rights, and remedies of the parties
hereunder shall be determined in accordance with such laws.
     Section 12.03 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
telex, telegraph or telecopier and confirmed by a similar writing mailed or sent
by courier as provided above, to (i) in the case of the Purchaser, RWT Holdings,
Inc., One Belvedere Place, Suite 310, Mill Valley, California 94941, Attention:
John Isbrandtsen, fax number (415) 381-1773, or such other address as may
hereafter be furnished to the Sellers in writing by the Purchaser, (ii) in the
case of the PHH Mortgage, PHH Mortgage Corporation, 6000 Atrium Way, Mt. Laurel,
NJ 08054, Attention: Peter A. Thomas, Vice President, Secondary Marketing, fax
number (___) ___-___, (iii) in the case of the Trust, c/o PHH Mortgage
Corporation, as Administrator, 6000 Atrium Way, Mt. Laurel, New Jersey 08054,
Attention: Peter A. Thomas, Vice President, Secondary Marketing, fax number
(___) ___-___, or such other address as may hereafter be furnished to the
Purchaser and the Guarantor in writing by the applicable Seller, and (and
(iv) in the case of the Guarantor, Redwood Trust, Inc., One Belvedere Place,
Suite 300, Mill Valley, California 94941, Attention

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Brett Nicholas, fax number (415) 381-1773), or such other address as may
hereafter be furnished to the Sellers in writing by the Guarantor.
     Section 12.04 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.
     Section 12.05 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.
     Section 12.06 General Interpretive Principles.
     For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:

  (1)   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;     (2)   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);  
  (3)   accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with generally accepted accounting principles;     (4)  
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;     (5)   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;     (6)   a
reference to a “day” shall be a reference to a calendar day;     (7)   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     (8)   the
terms “include” and “including” shall mean without limitation by reason of
enumeration .

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     Section 12.07   Waivers and Amendments, Noncontractual Remedies;
Preservation of Remedies.

     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. No such written
instrument shall be effective unless it expressly recites that it is intended to
amend, supersede, cancel, renew or extend this Agreement or to waive compliance
with one or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege, or any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof or the exercise of any
other such right, power or privilege. The rights and remedies herein provided
are cumulative and are not exclusive of any rights or remedies that any party
may otherwise have at law or in equity.
     Section 12.08 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.
     Section 12.09 Counterparts; Effectiveness.
     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.
This Agreement shall become effective as of the date first set forth herein upon
the due execution and delivery of this Agreement by each of the parties hereto.
     Section 12.10 Entire Agreement; Amendment.
     This Agreement (including the schedules and exhibits annexed hereto or
referred to herein), together with the Cendant Guide and each Purchase Price and
Terms Letter, 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. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the authorized representatives
of the parties hereto.
     Section 12.11 Further Assurances.
     Each party hereto shall take such additional action as may be reasonably
necessary to effectuate this Agreement and the transactions contemplated hereby.
The Sellers will promptly and duly execute and deliver to the Purchaser such
documents and assurances and take such further action as the Purchaser may from
time to time reasonably request in order to carry out more effectively the
intent and purpose of this Agreement and to establish and protect the rights and
remedies created or intended to be created in favor of the Purchaser.

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     Section 12.12 Intention of the Seller.
     Each Seller intends that the conveyance of such Seller’s right, title and
interest in and to the Mortgage Loans to the Purchaser shall constitute a sale
and not a pledge of security for a loan. If such conveyance is deemed to be a
pledge of security for a loan, however, the applicable Seller intends that the
rights and obligations of the parties to such loan shall be established pursuant
to the terms of this Agreement. Each Seller also intends and agrees that, in
such event, (i) the applicable Seller shall be deemed to have granted to the
Purchaser and its assigns a first priority security interest in such Seller’s
entire right, title and interest in and to the Mortgage Loans, all principal and
interest received or receivable with respect to the Mortgage Loans, all amounts
held from time to time in the accounts mentioned pursuant to this Agreement and
all reinvestment earnings on such amounts, together with all of the applicable
Seller’s right, title and interest in and to the proceeds of any title, hazard
or other insurance policies related to such Mortgage Loans and (ii) this
Agreement shall constitute a security agreement under applicable law. All rights
and remedies of the Purchaser under this Agreement are distinct from, and
cumulative with, any other rights or remedies under this Agreement or afforded
by law or equity and all such rights and remedies may be exercised concurrently,
independently or successively.
     Section 12.13 Guaranty of Purchaser’s Obligations
     Guarantor hereby agrees to cause RWT Holdings, Inc. to perform all of its
duties and obligations as the Purchaser hereunder, guaranties the timely
performance of such duties and obligations by RWT Holdings, Inc. and agrees to
be jointly and severally liable to the Sellers for all such duties and
obligations of RWT Holdings, Inc.

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     IN WITNESS WHEREOF, the Sellers, the Purchaser and the Guarantor have
caused their names to be signed hereto by their respective officers as of the
date first written above.

            RWT HOLDINGS, INC.
      By:             Name:           Title:           PHH MORTGAGE CORPORATION
      By:           Name:           Title:           BISHOP’S GATE RESIDENTIAL
MORTGAGE TRUST (formerly known as
CENDANT RESIDENTIAL MORTGAGE
TRUST)
      By:           Name:           Title:           REDWOOD TRUST, INC.
      By:           Name:           Title:        

 

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SCHEDULE B-1
CONTENTS OF PURCHASER’S MORTGAGE FILE
     With respect to each Mortgage Loan, the Purchaser’s Mortgage File shall
include each of the following items, which shall be available for inspection by
the Purchaser, and which shall be retained by the applicable Seller or delivered
to the Purchaser pursuant to the provisions of the Sellers’ Warranties and
Servicing Agreement.

  1.   The original Mortgage Note bearing all intervening endorsements,
endorsed, at the direction of the Purchaser either (2) in blank and signed in
the name of the applicable Seller by an authorized officer. To the extent that
there is no space on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge, if state law so allows and the
Purchaser is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by
“[Seller], successor by merger to [name of predecessor].” If the Mortgage Loan
was acquired or originated by the Seller while doing business under another
name, the endorsement must be by “[Seller], formerly known as [previous name];”
    2.   To the extent applicable, the original of each power of attorney,
surety agreement or guaranty agreement with respect to such Mortgage Loan;    
3.   The original executed recorded Mortgage (together with the standard
adjustable note mortgage rider, and convertible note rider, if applicable, if
the Mortgage Loan is an ARM Loan), with evidence of recording thereon, or, if
the original executed Mortgage has not yet been returned from the recording
office, a copy of the original executed Mortgage certified by the applicable
Seller, title insurance company, escrow agent or closing attorney to be a true
copy of the original of the Mortgage which has been delivered for recording in
the appropriate recording office of the jurisdiction in which the Mortgaged
Property is located. The standard FNMA/FHLMC Condominium Rider or PUD Rider must
be attached to the Mortgage if the Mortgaged Property is a condominium or is
located in a PUD.     4.   The original Assignment of Mortgage for each Mortgage
Loan, in form and substance acceptable for recording. The Mortgage shall be
assigned, at the direction of the Purchaser either (2) with assignee’s name left
blank. The Assignment of Mortgage must be duly recorded only on the direction of
the Purchaser. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by “[Seller], successor by merger to [name
of predecessor].” If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
“[Seller], formerly known as [previous name].”     5.   The original policy of
title insurance (or a preliminary title report, binder or commitment if the
original title insurance policy has not been received from the insurance
company).

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  6.   Originals of any executed intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment has not
yet been returned from the recording office, a copy of such assignment certified
by the Seller to be a true copy of the original of the assignment which has been
sent for recording in the appropriate jurisdiction in which the Mortgaged
Property is located.     7.   The original Primary Insurance Policy or the
electronic certificate number of such policy and the identity of the named
mortgagee.     8.   Originals of all assumption, modification and substitution
agreements, if any, or, if the originals of any such assumption, modification
and substitution agreements have not yet been returned from the recording
office, a copy of such instruments certified by the applicable Seller to be a
true copy of the original of such instruments which have been sent for recording
in the appropriate jurisdictions in which the Mortgaged Properties are located.
    9.   Certified copy of the pledge agreement as executed in connection with
loans with additional collateral.

     The following items should be included in Schedule B-1 with respect to any
Cooperative Loan:
     (9) (A) the original Mortgage Note, endorsed (on the Mortgage Note or an
allonge attached thereto) “Pay to the order of                      , without
recourse” and signed by facsimile signature in the name of such Seller by an
authorized officer, with all intervening endorsements showing a complete, valid
and proper chain of title from the originator of such Mortgage Loan to such
Seller;
           (B) or a certified copy of the Mortgage Note (endorsed as provided
above) together with a lost note affidavit providing indemnification to the
holder thereof for any losses incurred due to the fact that the original
Mortgage Note is missing;
     (10) the original Acceptance of Assignment and Assumption of Lease
Agreement for each Mortgage Loan, from such Seller signed by original or by
facsimile signature to                      , which assignment shall be in form
and substance acceptable for recording (except for the recording information);
     (11) the original Stock Certificate and related Stock Power, in blank,
executed by the Mortgagor with such signature guaranteed and original Stock
Power, in blank executed by the Seller;
     (12) the original Proprietary Lease and the Assignment of Proprietary Lease
executed by the Mortgagor in blank or if the Proprietary Lease has been assigned
by the Mortgagor to the Seller, then the Seller must execute an assignment of
the Assignment of Proprietary Lease in blank;
     (13) the original Recognition Agreement and the original Assignment of
Recognition Agreement;

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     (14) the recorded state and county Financing Statements and Financing
Statement Changes;
     (15) an Estoppel Letter and/or Consent;
     (16) the Cooperative Lien Search;
     (17) the guaranty of the Mortgage Note and Cooperative Loan, if any; and
     (18) the original of any security agreement or similar document executed in
connection with the Cooperative Loan.
     (11) Certified copy of the pledge agreement as executed in connection with
loans with additional collateral.

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EXHIBIT 2.05
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
     THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this “Assignment”),
dated of [           ], 200[     ], is entered into among [             
       ], a                       (the “Assignee”), RWT Holdings, Inc. (the
“Assignor”), [PHH Mortgage Corporation] [Bishop’s Gate Residential Mortgage
Trust] the “Seller ”), with PHH Mortgage Corporation, as the servicer (the
“Servicer”).
RECITALS
     WHEREAS the Assignor, the Seller and [PHH Mortgage Corporation] [Bishop’s
Gate Residential Mortgage Trust], the Servicer and Redwood Trust, Inc., as
Guarantor, have entered into a certain Mortgage Loan Flow Purchase, Sale and
Servicing Agreement, dated as of August 1, 2002 (as amended or modified to the
date hereof, the “Agreement”), pursuant to which the Assignor has acquired
certain Mortgage Loans pursuant to the terms of the Agreement and Servicer has
agreed to service such Mortgage Loans; and
     WHEREAS the Assignee has agreed, on the terms and conditions contained
herein, to purchase from the Assignor [certain] [all] of the Mortgage Loans (the
“Specified Mortgage Loans”) which are subject to the provisions of the Agreement
and are listed on the mortgage loan schedule attached as Exhibit I hereto (the
“Specified Mortgage Loan Schedule”);
     NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties agree as follows:
     1. Assignment and Assumption
          (a) On and of the date hereof, the Assignor hereby sells, assigns and
transfers to the Assignee all of its right, title and interest in the Specified
Mortgage Loans and all rights related thereto as provided under the Agreement to
the extent relating to the Specified Mortgage Loans, the Assignee hereby accepts
such assignment from the Assignor, and the Seller hereby acknowledges such
assignment and assumption.
          (b) On and as of the date hereof, the Assignor represents and warrants
to the Assignee that the Assignor has not taken any action that would serve to
impair or encumber the Assignee’s ownership interests in the Specified Mortgage
Loans since the date of the Assignor’s acquisition of the Specified Mortgage
Loans.
     2. Recognition of Purchaser
     From and after the date hereof, both the Assignee and the Seller shall note
the transfer of the Specified Mortgage Loans to the Assignee in their respective
books and records and shall recognize the Assignee as the owner of the Specified
Mortgage Loans, and Servicer shall service the Specified Mortgage Loans for the
benefit of the Assignee pursuant to the Agreement, the terms of which are
incorporated herein by reference. It is the intention of the Seller, the
Servicer, the Assignee and the Assignor that the Assignment shall be binding
upon and inure to the benefit of the Assignee and the Assignor and their
successors and assigns.

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     3. Representations and Warranties
          (a) The Assignee represents and warrants that it is a sophisticated
investor able to evaluate the risks and merits of the transactions contemplated
hereby, and that it has not relied in connection therewith upon any statements
or representations of the Seller or the Assignor other than those contained in
the Agreement or this Assignment.
          (b) Each of the parties hereto represents and warrants that it is duly
and legally authorized to enter into this Assignment.
          (c) Each of the parties hereto represents and warrants that this
Assignment has been duly authorized, executed and delivered by it and (assuming
due authorization, execution and delivery thereof by each of the other parties
hereto) constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
     4. Continuing Effect
     Except as contemplated hereby, the Agreement shall remain in full force and
effect in accordance with its terms.
     5. Governing Law
     This Assignment and the rights and obligations hereunder shall be governed
by and construed in accordance with the internal laws of the State of New York.
     6. Notices
     Any notices or other communications permitted or required under the
Agreement to be made to the Assignee shall be made in accordance with the terms
of the Agreement and shall be sent to the Assignee as follows:
[                    ], or to such other address as may hereafter be furnished
by the Assignee to the parties in accordance with the provisions of the
Agreement.
     7. Counterparts
     This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same instrument.
     8. Definitions
     Any capitalized term used but not defined in this Agreement has the same
meaning as in the Agreement.

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     IN WITNESS WHEREOF, the parties hereto have executed this Assignment the
day and year first above written.

                  ASSIGNOR:    
 
                REDWOOD TRUST, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   
 
                SELLER:    
 
                [PHH MORTGAGE CORPORATION]
[BISHOP’S GATE RESIDENTIAL
MORTGAGE TRUST]    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   
 
                ASSIGNEE:    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   
 
                SERVICER:    
 
                PHH MORTGAGE CORPORATION    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

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EXHIBIT 10
FORM OF WARRANTY BILL OF SALE
     On this             day of            , 200     , [PHH Mortgage
Corporation] [Bishop’s Gate Residential Mortgage Trust] (“Seller”) as the Seller
under that certain Mortgage Loan Flow Purchase, Sale & Servicing Agreement,
dated as of January 1, 2006 (the “Agreement”) does hereby sell, transfer,
assign, set over and convey to [                     ] as Purchaser under the
Agreement, without recourse, but subject to the terms of the Agreement, all
rights, title and interest of the Seller in and to the Mortgage Loans listed on
the Mortgage Loan Schedule attached hereto, together with the related Mortgage
Files and all rights and obligations arising under the documents contained
therein. Pursuant to Section 2.01 of the Agreement, the Seller has delivered to
the Purchaser or its custodian the Legal Documents for each Mortgage Loan to be
purchased as set forth in the Agreement. The contents of each related Servicer’s
Mortgage File required to be retained by PHH Mortgage Corporation (“PHH”) to
service the Mortgage Loans pursuant to the Agreement and thus not delivered to
the Purchaser are and shall be held in trust by PHH for the benefit of the
Purchaser as the owner thereof. PHH ‘s possession of any portion of each such
Servicer’s Mortgage File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Agreement,
and such retention and possession by PHH shall be in a custodial capacity only.
The ownership of each Mortgage Note, Mortgage, and the contents of the Mortgage
File and Servicer’s Mortgage File is vested in the Purchaser and the ownership
of all records and documents with respect to the related Mortgage Loan prepared
by or which come into the possession of PHH shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by PHH at the will of
the Purchaser in such custodial capacity only.
     The Seller confirms to the Purchaser that the representations and
warranties set forth in Sections 3.01, [3.02] and 3.03 of the Agreement are true
and correct as of the date hereof, and that all statements made in the Sellers’
Officer’s Certificate and all attachments thereto remain complete, true and
correct in all respects as of the date hereof.
     Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.

                  [PHH MORTGAGE CORPORATION]
[BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST]
 
           
 
  (Seller)        
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        

 

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EXHIBIT 11
FORM OF ASSESSMENT OF COMPLIANCE
To RWT Holdings and [Master Servicer]
Re: Residential Mortgage Loans (including first and second lien, closed-end and
revolving balance HELOC mortgage loans
     As of and for the year ended December 31, [     ], the undersigned officer
of PHH Mortgage hereby certifies as follows:

  1.   PHH Mortgage is responsible for assessing compliance with the servicing
criteria applicable to it (as identified in Schedule 1122 hereto) (the
“Servicing Criteria”) for this asset class;     2.   PHH Mortgage used the
criteria listed in paragraph (d) of Section 229.1122 of Regulation AB to assess
compliance with the Servicing Criteria;     3.   [Except as described below,]
PHH Mortgage has complied, in all material respects, with the applicable
servicing criteria for this asset class; and         [DESCRIBE ANY MATERIAL
INSTANCE OF NONCOMPLIANCE]     4.   a registered public accounting firm has
issued an attestation report on PHH Mortgage’s compliance with the Servicing
Criteria.

Signature
Name:
Title:
[Date]

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  Schedule
 
  1122 to
 
  Exhibit 11

SERVICING CRITERIA
NOTE: The criteria shown with a checked box þ are applicable to PHH Mortgage’s
duties under any transaction agreement for any loans covered by this Servicer’s
Report. Criteria shown with a blank box ¨ are inapplicable to this servicer.
     (A) General Servicing Considerations
þ Policies and procedures are instituted to monitor any performance or other
triggers and events of default in accordance with transaction agreements.
þ If any material servicing activities are outsourced to third parties, policies
and procedures are instituted to monitor the third party’s performance and
compliance with such servicing activities.
þ Any requirements in the transaction agreements to maintain a back-up servicer
for the pool assets are maintained.
þ A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in the
amount of coverage required by and otherwise in accordance with the terms of the
transaction agreements.
     (B) Cash Collection and Administration
þ Payments on pool assets are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
agreements.
þ Disbursements made via wire transfer on behalf of an obligor or to an investor
are made only by authorized personnel.
þ Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made reviewed and approved as specified in the transaction agreements.
þ The related accounts for the transaction, such as cash reserve accounts or
accounts established as a form of overcollateralization, are separately
maintained

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(e.g., with respect to commingling of cash) as set forth in the transaction
agreements.
þ Each custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes of this
criterion, “federally insured depository institution” with respect to a foreign
financial institution means a foreign financial institution that meets the
requirements of Section 240.13k-1(b)(1) of Regulation AB.
þ Unissued checks are safeguarded so as to prevent unauthorized access.
þ Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and related bank
clearing accounts. These reconciliations:

  (A)   Are mathematically accurate;     (B)   Are prepared within 30 calendar
days after the bank statement cutoff date, or such other number of days
specified in the transaction agreements;     (C)   Are reviewed and approved by
someone other than the person who prepared the reconciliation; and     (D)  
Contain explanations for reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification, or such other number
of days specified in the transaction agreements.

     (C) Investor remittances and reporting
¨ Reports to investors, including those to be filed with the Securities Exchange
Commission (the “Commission”), are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically, such reports:
     (A) Are prepared in accordance with timeframes and other terms set forth in
the transaction agreements;
     (B) Provide information calculated in accordance with the terms specified
in the transaction agreements;
     (C) Are filed with the Commission as required by its rules and regulations;
and

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     (D) Agree with investors’ or the trustee’s records as to the total unpaid
principal balance and number of pool assets serviced by the servicer.
¨ Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction
agreements.
¨ Disbursements made to an investor are posted within two business days to the
servicer’s investor records, or such other number of days specified in the
transaction agreements.
¨ Amounts remitted to investors per the investor reports agree with cancelled
checks, or other form of payment or custodial bank statements.
     (D) Pool Asset Administration
þ Collateral or security on pool assets is maintained as required by the
transaction agreements or related pool asset documents.
þ Pool assets and related documents are safeguarded as required by the
transaction agreements.
þ Any additions, removals or substitutions to the asset pool are made, reviewed
and approved in accordance with any conditions or requirements in the
transaction agreements.
þ Payments on pool assets, including any payoffs, made in accordance with the
related pool asset documents are posted to the applicable servicer’s obligor
records maintained no more than two business days after receipt, or such other
number of days specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in accordance with the related
asset documents.
þ PHH Mortgage’s records regarding the pool assets agree with PHH Mortgage’s
records with respect to an obligor’s unpaid principal balance.

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þ Changes with respect to the terms or status of an obligor’s pool asset (e.g.,
loan modifications or re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements and related pool asset
documents.
þ Loss mitigation or recovery actions (e.g. forbearance plans, modifications and
deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
þ Records documenting collection efforts are maintained during the period a pool
asset is delinquent in accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such other period specified in
the transaction agreements, and describe PHH Mortgage’s activities in monitoring
delinquent pool assets including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
þ Adjustments to interest rates or rates of return for pool assets with variable
rates are computed based on the related pool asset documents.
þ Regarding any funds held in trust for an obligor (such as escrow accounts):
(A) Such funds are analyzed, in accordance with the obligor’s pool asset
documents, on at least an annual basis, or such other period specified in the
transaction agreements;
(B) Interest on such funds is paid, or credited, to obligors in accordance with
applicable pool asset documents and state laws; and
(C) Such funds are returned to the obligor within 30 calendar days of full
repayment of the related pool asset, or such other number of days specified in
the transaction agreements.
þ Payments made on behalf of an obligor (such as tax or insurance payments) are
made on or before the related penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided that such support has
been received by PHH Mortgage at least 30 calendar days prior to these dates, or
such other number of days specified in the transaction agreements.

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þ Any late payment penalties in connection with any payment to be made on behalf
of an obligor are paid from PHH Mortgage’s funds and not charged to the obligor,
unless the late payment was due to obligor’s error or omission.
þ Disbursements made on behalf of an obligor are posted within two business days
to the obligor’s records maintained by PHH Mortgage, or such other number of
days specified in the transaction agreements.
þ Delinquencies, charge-offs and uncollectible amounts are recognized and
recorded in accordance with the transaction agreements.
þ Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.

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EXHIBIT 12
FORM OF BACK-UP SOX CERTIFICATION
          Re: The Mortgage Loan Flow Purchase, Sale and Servicing Agreement
dated as of January 1, 2006 between RWT Holdings, Inc., as Purchaser; PHH
Mortgage Corporation and Bishop’s Gate Residential Mortgage Trust, as Sellers;
and Redwood Trust, Inc. as Guarantor
     I,                                            , the                      
of PHH Mortgage Corporation (the “Servicer”), certify to the Purchaser, any
Depositor, and the Master Servicer, and their officers, with the knowledge and
intent that they will rely upon this certification, that:
     (i) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the “Compliance
Statement”), the report on assessment of the Servicer’s compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of
Regulation AB (the “Assessment of Compliance”), the registered public accounting
firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation
Report”), and all other data, servicing reports, officer’s certificates and
information relating to the performance of the Servicer under the terms of the
Agreement during 200[ ] that were delivered to the Master Servicer pursuant to
the Agreement (collectively, the “Servicing Information”);
     (ii) Based on my knowledge, the Servicing Information, taken as a whole,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading as of the
period covered by or the date of such reports or information or the date of this
certification;
     (iii) Based on my knowledge, all of the Servicing Information required to
be provided by the Servicer under the Agreement has been provided to the Master
Servicer and the Purchaser;
     (iv) I am responsible for reviewing the activities performed by the
Servicer under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Compliance Statement, the Assessment of Compliance or the Attestation
Report, the Servicer has fulfilled its obligations under the Agreement in all
material respects; and

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     (v) The Compliance Statement, the Assessment of Compliance and Attestation
Report required to be provided by the Servicer pursuant to the Agreement, have
been provided to the Master Servicer and the Purchaser. The Assessment of
Compliance and the Attestation Report cover all items of the servicing criteria
identified on Exhibit 11 to the Agreement as applicable to the Servicer. Any
material instances of noncompliance described in such reports have been
disclosed to the Master Servicer and to the Purchaser. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.

                  PHH MORTGAGE CORPORATION
(Servicer)      
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
  Date:        

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PHH – SEQUOIA TO TRUSTEE
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
For
Mortgage Loan Flow Purchase, Sale & Servicing Agreement
And
Additional Collateral Servicing Agreement
     THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated as of May 25,
2007 (the “Assignment”), is entered into among Sequoia Residential Funding, Inc.
(the “Assignor”), PHH Mortgage Corporation (formerly known as Cendant Mortgage
Corporation) (“PHH”) and Bishop’s Gate Residential Mortgage Trust (formerly
known as Cendant Residential Mortgage Trust), as the sellers (the “Sellers”),
and PHH, as the servicer (the “Servicer”), and HSBC Bank USA, National
Association (“HSBC Bank”) as Trustee under a Pooling and Servicing Agreement
dated as of May 1, 2007 (the “Pooling and Servicing Agreement”), among the
Assignor, as Depositor, HSBC Bank (in such Trustee capacity, the “Assignee”),
and Wells Fargo Bank, N. A., as Master Servicer and Securities Administrator.
RECITALS
     WHEREAS, Redwood Trust, Inc. (“Redwood”), the Sellers and the Servicer have
entered into a certain Mortgage Loan Flow Purchase, Sale & Servicing Agreement,
dated as of July 27, 2001, with Redwood as purchaser, PHH as servicer and
seller, Bishop’s Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust) as seller (as amended or modified to the date
hereof, the “2001 Flow Servicing Agreement”), and pursuant to the Purchase Price
and Terms Letter(s) and Warranty Bill(s) of Sale issued under the 2001 Flow
Servicing Agreement and listed in Appendix A hereto (the “Purchase Price and
Terms Letter(s)” and “Bill(s) of Sale,” respectively) Redwood acquired from the
Sellers certain Mortgage Loans (the “Mortgage Loans”) and the Servicer has
agreed to service such Mortgage Loans. In addition, certain of the Mortgage
Loans are subject to the Additional Collateral Servicing Agreement, dated as of
July 27, 2001 (the “2001 Additional Collateral Agreement”), between Redwood
Trust and the Servicer; and
     WHEREAS, RWT Holdings, Inc. (“RWT Holdings”) has previously acquired from
Redwood and has sold, assigned and transferred all of its right, title and
interest in certain of the Mortgage Loans (the “Specified Mortgage Loans”) which
are listed on the mortgage loan schedule attached as Exhibit I hereto (the
“Specified Mortgage Loan Schedule”) and certain rights under the 2001 Flow
Servicing Agreement and the 2001 Additional Collateral Agreement with respect to
the Specified Mortgage Loans to Assignor; and
     WHEREAS, the parties hereto agree that notwithstanding anything to the
contrary in the 2001 Flow Servicing Agreement and the 2001 Additional Collateral
Agreement, the Specified Mortgage Loans are currently being serviced by PHH
pursuant to the Mortgage Loan Flow Purchase, Sale & Servicing Agreement among
RWT Holdings, PHH Mortgage Corporation (formerly known as Cendant Mortgage
Corporation) (“PHH”) and Bishop’s Gate Residential Mortgage Trust (formerly
known as Cendant Residential Mortgage Trust), as Sellers, and PHH,

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as Servicer, dated January 1, 2006 (the “2006 Flow Purchase and Servicing
Agreement”) and the Additional Collateral Servicing Agreement between RWT
Holdings and Servicer dated August 1, 2002 (the “2002 Additional Collateral
Agreement”) (the 2006 Flow Purchase and Servicing Agreement and the 2002
Additional Collateral Agreement collectively referred to herein as the
“Agreements”); and
     WHEREAS, the parties hereto have agreed that the Specified Mortgage Loans
shall be subject to the terms of this Assignment.
     NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties agree as follows:
     1. Assignment and Assumption.
          (a) Effective on and as of the date hereof, the Assignor hereby
pledges, assigns and transfers to the Assignee all of its right, title and
interest in the Specified Mortgage Loans and all of its rights (but none of the
Purchaser’s representations, warranties or obligations) provided under the
Agreements to the extent relating to the Specified Mortgage Loans, the Assignee
hereby accepts such assignment from the Assignor, and the Sellers and the
Servicer hereby acknowledge such assignment and assumption.
               (b) Effective on and as of the date hereof, the Assignor
represents and warrants to the Assignee that the Assignor has not taken any
action that would serve to impair or encumber the Assignee’s interest in the
Specified Mortgage Loans since the date of the Assignor’s acquisition of the
Specified Mortgage Loans.
     2. Recognition of the Assignee.
     From and after the date hereof, subject to Section 3 below, the Sellers and
the Servicer shall recognize the Assignee as the holder of the rights and
benefits of the Purchaser with respect to the Specified Mortgage Loans and the
Servicer will service the Specified Mortgage Loans for the Assignee as if the
Assignee and the Servicer had entered into separate servicing agreements for the
servicing of the Specified Mortgage Loans in the form of the 2006 Flow Purchase
and Servicing Agreement and the 2002 Additional Collateral Agreement (each as
amended hereby) with the Assignee as the Purchaser thereunder, the terms of
which Agreements are incorporated herein by reference and amended hereby. It is
the intention of the parties hereto that this Assignment will be a separate and
distinct agreement, and the entire agreement, between the parties hereto to the
extent of the Specified Mortgage Loans and shall be binding upon and for the
benefit of the respective successors and assigns of the parties hereto.
     3. Assignor’s Continuing Rights and Responsibilities.
     Notwithstanding Sections 1 and 2 above, the parties hereto agree that the
Assignor rather than the Assignee shall have the ongoing rights and
responsibilities of the Purchaser under the following sections of the
Agreements:

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2006 Flow Purchase and Servicing Agreement:

      Section   Matter  
2.04, 3rd ¶
  (a) Defective Documents; Delivery of Mortgage Loan Documents.
 
   
3.04(3), 1st ¶
  (b) Repurchase and Substitution.
 
   
5.01(3)(c) and (d)
  (c) Consent of the Purchaser.
 
   
5.14
  (d) Sale of Specially Serviced Mortgage Loans and REO Properties.
 
   
5.15, 6th and 8th ¶’s
  (e) Realization Upon Specially Serviced Mortgage Loans and REO Properties.
 
   
7.06
  (f) Purchaser’s Right to Examine Servicer Records.
 
   
9.01 penultimate sentence
  (g) Indemnification; Third-Party Claims.

2002 Additional Collateral Agreement:

      Section   Matter
5(a) and (c)
  Surety Bond.

     In addition, the Servicer agrees to furnish upon request to the Assignor
and the Master Servicer copies of reports, notices, statements and other
communications required to be delivered by the Servicer pursuant to any of the
sections of the Agreements referred to above and under the following sections,
at the times therein specified:
2006 Flow Purchase and Servicing Agreement:

      Section      
5.03
  (a) Reports for Specially Serviced Mortgage Loans and Foreclosure Sales.
 
   
5.13, 1st and 5th ¶’s
  (b) Management of REO Properties.
 
   
5.15, 2nd ¶
  (c) Realization Upon Specially Serviced Mortgage Loans and REO Properties.
 
   
6.02
  (d) Reporting.
 
   
6.04
  (e) Non-recoverable Advances.

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      Section      
6.05
  (f) Itemization of Servicing Advances.
 
   
7.02
  (g) Satisfaction of Mortgages and Release of Mortgage Files.
 
   
7.04
  (h) Annual Compliance Statement.
 
   
7.05
  (i) Annual Assessment of Compliance and Attestation Report.
 
   
7.07
  (j) Back-Up SOX Certification
 
   
8.01
  (k) The Servicer’s Reporting Requirements.
 
   
8.02, 1st ¶
  (l) Financial Statements.
 
   
9.01
  (m) Indemnification; Third-Party Claims

          2002 Additional Collateral Agreement:
          N/A.
     4. Amendment to the Agreements.
     The parties to this Assignment agree to deem the 2002 Additional Collateral
Agreement together with the 2006 Flow Purchase and Servicing Agreement, as a
single servicing agreement (the “Combined Servicing Agreement”) for purposes of
Section 7.04 (Annual Compliance Statement) and 7.05 (Annual Assessment of
Compliance and Attestation Report) of the 2006 Flow Purchase and Servicing
Agreement. Accordingly, the certificates delivered by the Servicer pursuant to
those sections shall address all categories applicable to the Combined Servicing
Agreement.
     In addition, the Agreements are hereby amended as set forth in Appendix B
hereto with respect to the Specified Mortgage Loans.
     5. Representations and Warranties.
          (a) Each of the parties hereto represents and warrants that it is duly
and legally authorized to enter into this Assignment.
          (b) Each of the parties hereto represents and warrants that this
Assignment has been duly authorized, executed and delivered by it and (assuming
due authorization, execution and delivery thereof by each of the other parties
hereto) constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

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     6. Continuing Effect.
     Except as contemplated hereby, the Agreements shall remain in full force
and effect in accordance with their terms.
     7. Governing Law.
     This Assignment and the rights and obligations hereunder shall be governed
by and construed in accordance with the internal laws of the State of New York.
     8. Notices.
     Any notices or other communications permitted or required under the
Agreements to be made to the Assignor and Assignee shall be made in accordance
with the terms of the Agreements and shall be sent to the Assignor and Assignee
as follows:

     
 
  Sequoia Residential Funding, Inc.
 
  One Belvedere Place, Suite 330
 
  Mill Valley, CA 94941
 
  Facsimile Number: 415-381-1773
 
   
 
  HSBC Bank USA, National Association
 
  452 Fifth Avenue
 
  New York, NY 10018

     or to such other address as may hereafter be furnished by the Assignor or
Assignee to the other parties in accordance with the provisions of the
Agreements.
     9. Counterparts.
     This Assignment may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same instrument.
     10. Definitions.
     Any capitalized term used but not defined in this Assignment has the same
meaning as in the Agreements.
               11. Master Servicer.
     The Sellers and the Servicer hereby acknowledge that the Assignee has
appointed Wells Fargo Bank, N. A. (the “Master Servicer”) to act as master
servicer and securities administrator under the Pooling and Servicing Agreement
and hereby agree to treat all inquiries, instructions, authorizations and other
communications from the Master Servicer as if the same had been received from
the Assignee. The Master Servicer, acting on behalf of the Assignee, shall have
the rights of the Assignee as the Purchaser under the Agreements to enforce the
obligations of the Servicer thereunder. Any notices or other communications
permitted or required under the

85

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Agreements to be made to the Assignee shall be made in accordance with the terms
of the Agreements and shall be sent to the Master Servicer at the following
address:

      Wells Fargo Bank, N. A.   P.O. Box 98   Columbia, Maryland 21046   (or,
for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045)  
Attention: Sequoia Mortgage Trust 2007-2

or to such other address as may hereafter be furnished by the Master Servicer to
Seller and Servicer. Any such notices or other communications permitted or
required under the Agreements may be delivered in electronic format unless
manual signature is required in which case a hard copy of such report or
communication shall be required.
     The Servicer further acknowledges that the Assignor has engaged the Master
Servicer to provide certain default administration and that the Master Servicer,
acting as agent of the Assignor, may exercise any of the rights of the Purchaser
retained by the Assignor in Section 3 above.
     The Servicer shall make all distributions under the Agreements, as they
relate to the Specified Mortgage Loans, to the Master Servicer by wire transfer
of immediately funds to:
Wells Fargo Bank, NA
San Francisco, CA
ABA# 121-000-248
Acct# 3970771416
Acct Name: SAS Clearing
FFC: 53145300

     
 
  [remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment the day and
year first above written.

              ASSIGNOR:
 
            SEQUOIA RESIDENTIAL FUNDING, INC.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            ASSIGNEE:
 
            HSBC BANK USA, NATIONAL
 
            ASSOCIATION
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            SELLER:
 
            PHH MORTGAGE CORPORATION
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            SELLER:
 
            BISHOP’S GATE RESIDENTIAL     MORTGAGE TRUST

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  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       
 
            SERVICER:
 
            PHH MORTGAGE CORPORATION
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

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EXHIBIT I

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APPENDIX A

          Purchase Price       and Terms   Warranty Bill(s) of   Letter(s)  
Sale    
 
    1/28/02  

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APPENDIX B
MODIFICATIONS TO THE 2006 FLOW PURCHASE AND SERVICING AGREEMENT
     1. The definition of “Business Day” is hereby revised to read as follows
(addition in italics):
     “ ‘Business Day’: Any day other than (i) a Saturday or Sunday, (ii) a day
on which banking or savings associations in the States of Maryland or Minnesota
are authorized or obligated by law or executive order to be closed, or (iii) a
day on which the Federal Reserve is closed.”
     2. The definition of “Collection Account” is hereby revised to read as
follows:
     “‘Collection Account’: The separate trust account or accounts created and
maintained pursuant to Section 5.04 which shall be entitled ‘HSBC Bank USA,
National Association, as Trustee on behalf of the holders of Sequoia Mortgage
Trust 2007-2 Mortgage Pass-Through Certificates.’”
     3. The definition of “Cut-off Date” is hereby revised to read as follows:
     “‘Cut-off Date’: May 1, 2007.”
     4. The definition of “Due Period” is hereby revised to read as follows:
“‘Due Period’: With respect to each Remittance Date, the period commencing on
the second day of the month immediately preceding the month of such Remittance
Date and ending on the first day of the month of such Remittance Date.”
5. The definition of “Escrow Account” is hereby revised to read as follows
(changes in italics):
     “ ‘Escrow Account’: The separate trust account or accounts created and
maintained pursuant to Section 5.06 which shall be entitled “PHH Mortgage
Corporation, as servicer and custodian for the Purchaser under the Mortgage Loan
Flow Purchase, Sale & Servicing Agreement, dated as of January 1, 2006 (as
amended), and various mortgagors.”
6. Section 3.03 is revised to delete the “and” at the end of Section 3.03(48),
to replace the “.” at the end of Section 3.03(49) with “;”, to replace the “.”
at the end of Section 3.03(50) with “;” and to add the following representations
and warranties at the end of such Section:
     “(51) No Mortgage Loan was originated on or after October 1, 2002 and prior
to March 7, 2003, which is secured by property located in the State of Georgia.
No Mortgage Loan was originated on or after March 7, 2003 which is a “high cost
home loan” as defined under the Georgia Fair Lending Act, which became effective
October 1, 2002;

 

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     (52) Each Mortgage Loan at the time it was made complied in all material
respects with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws;
     (53) None of the mortgage loans are High Cost as defined by the applicable
predatory and abusive lending laws and no mortgage loan is a “high cost” or
“covered” mortgage loan, as applicable (as such terms are defined in the then
current Standard and Poor’s LEVELS Glossary which is now Version 5.7,
Appendix E);
     (54) No Mortgage Loan which is secured by property located in the State of
New Jersey is a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act, which became effective November 27, 2003;
     (55) No Mortgage Loan which is secured by property located in the State of
New Mexico is a “High-Cost Home Loan” as defined in the New Mexico Home Loan
Protection Act, which became effective January 1, 2004;
     (56) No Mortgage Loan which is secured by property located in the State of
Kentucky is a “High-Cost Home Loan” as defined in the Kentucky House Bill 287,
which became effective June 24, 2003;
     (57) No Mortgage Loan which is secured by property located in the
Commonwealth of Massachusetts is a “High Cost Home Mortgage Loan” as defined in
the Massachusetts Predatory Home Loan Practices Act (Mass. Ann. Laws ch. 183C)
which became effective November 7, 2004;
     (58) No Mortgage Loan that is secured by property located in the State of
Illinois is a “High-Risk Home Loan” as defined in the Illinois High Risk Home
Loan Act effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et seq.); and
none of the Mortgage Loans that are secured by property located in the State of
Illinois are in violation of the provisions of the Illinois Interest Act (815
Ill. Comp. Stat. 205/1 et. seq.);
     (59) No Mortgage Loan that is secured by property located in the State of
Indiana is a “High Cost Home Loan” as defined in Indiana’s Home Loan Practices
Act (I.C. 24-9), which became effective January 1, 2005;
     (60) None of the proceeds of any Mortgage Loan were used to finance the
purchase of single premium credit insurance policies; and
     (61) No Mortgage Loan contains prepayment penalties that extend beyond five
years after the date of origination.”
7. The first sentence of Section 5.03 is hereby replaced with the following:
“The Servicer shall, within five (5) calendar days following each Record Date,
deliver to the Purchaser monthly reports (substantially in the form of
Exhibit 1: 12B and 12C attached hereto or in such other format and content
mutually agreed upon) with respect to all Specially Serviced Mortgage Loans.”
8. The first sentence of Section 6.02 is hereby replaced with the following:

 

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“On or before the 5th calendar day (or, if such day is not a Business Day, on
the immediately succeeding Business Day) of each month during the term hereof,
the Servicer shall deliver to the Purchaser monthly accounting reports in the
form of Exhibit 1: 12A attached hereto, or in such other format and content
mutually agreed upon, with respect to the most recently ended Monthly Period.”
9. Section 10.01 is revised to read as follows:
“(1) any failure by the Servicer to remit to the Purchaser any payment required
to be made under the terms of this Agreement which continues unremedied for a
period of 3 Business Days;”
10. Section 10.01 is revised to add an “or” and the following after 10.01(8):
“(9) any failure by the Servicer to comply with Sections 7.04, 7.05 or 7.07 of
this Agreement.”
     11. Exhibit 11 to the Flow Purchase and Servicing Agreement, the Form of
Assessment of Compliance, is hereby deleted in its entirety and replaced by
Exhibit II attached to this Assignment.

 

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MODIFICATIONS TO THE 2002 ADDITIONAL COLLATERAL AGREEMENT
1. A definition of “Collection Account” is added to read as follows:
“‘Collection Account’: The separate trust account or accounts created and
maintained pursuant to Section 5.04 of the Purchase and Servicing Agreement
which shall be entitled ‘HSBC Bank USA, National Association, as Trustee on
behalf of the holders of Sequoia Mortgage Trust 2007-2 Mortgage Pass-Through
Certificates.’”
2. Section 2(d) is hereby revised by deleting the “and” at the end of Section
2(d)(ii), deleting the “.” at the end of Section 2(d)(iii) and replacing it with
“; and” and then adding the following at the end of such section:
“(iv) The Additional Collateral Mortgage Loans are insured under the terms and
provisions of the Surety Bond subject to the limitations set forth therein. All
requirements for transferring coverage under the Surety Bond in respect of such
Additional Collateral Mortgage Loans to the Trustee (as defined in the Pooling
and Servicing Agreement) shall be complied with.”
3. Section 7 is hereby revised by adding the following sentence at the end of
the paragraph:
“Notwithstanding the foregoing, the obligations and responsibilities of the
Servicer shall terminate upon any Event of Default of the Seller/Servicer
enumerated under Section 10.01 of the Purchase and Servicing Agreement and the
appointed successor servicer shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement.”

 

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EXHIBIT 1

                              Standard Loan Level File Layout – Master Servicing
                Exhibit 12A: Layout                                         Max
Column Name   Description   Decimal   Format Comment   Size Each file requires
the following fields:                    
 
                       
SER_INVESTOR_NBR
  A value assigned by the Servicer to define a group of loans.           Text up
to 20 digits     20  
 
                       
LOAN_NBR
  A unique identifier assigned to each loan by the investor.           Text up
to 10 digits     10  
 
                       
SERVICER_LOAN_NBR
  A unique number assigned to a loan by the Servicer. This may be different than
the LOAN_NBR.           Text up to 10 digits     10  
 
                       
SCHED_PAY_AMT
  Scheduled monthly principal and scheduled interest payment that a borrower is
expected to pay, P&I constant.     2     No commas(,) or
dollar signs ($)     11  
 
                       
NOTE_INT_RATE
  The loan interest rate as reported by the Servicer.     4     Max length of 6
    6  
 
                       
NET_INT_RATE
  The loan gross interest rate less the service fee rate as reported by the
Servicer.     4     Max length of 6     6  
 
                       
SERV_FEE_RATE
  The servicer’s fee rate for a loan as reported by the Servicer.     4     Max
length of 6     6  
 
                       
SERV_FEE_AMT
  The servicer’s fee amount for a loan as reported by the Servicer.     2     No
commas(,) or
dollar signs ($)     11  
 
                       
NEW_PAY_AMT
  The new loan payment amount as reported by the Servicer.     2     No
commas(,) or
dollar signs ($)     11  
 
                       
NEW_LOAN_RATE
  The new loan rate as reported by the Servicer.     4     Max length of 6     6
 
 
                       
ARM_INDEX_RATE
  The index the Servicer is using to calculate a forecasted rate.     4     Max
length of 6     6  
 
                       
ACTL_BEG_PRIN_BAL
  The borrower’s actual principal balance at the beginning of the processing
cycle.     2     No commas(,) or
dollar signs ($)     11  
 
                       
ACTL_END_PRIN_BAL
  The borrower’s actual principal balance at the end of the processing cycle.  
  2     No commas(,) or
dollar signs ($)     11  
 
                       
BORR_NEXT_PAY_DUE_DATE
  The date at the end of processing cycle that the borrower’s next payment is
due to the Servicer, as reported by Servicer.           MM/DD/YYYY     10  
 
                       
SERV_CURT_AMT_1
  The first curtailment amount to be applied.     2     No commas(,) or
dollar signs ($)     11  
 
                       
SERV_CURT_DATE_1
  The curtailment date associated with the first curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ_AMT_1
  The curtailment interest on the first curtailment amount, if applicable.     2
    No commas(,) or
dollar signs ($)     11  
 
                       
SERV_CURT_AMT_2
  The second curtailment amount to be applied.     2     No commas(,) or
dollar signs ($)     11  
 
                       
SERV_CURT_DATE_2
  The curtailment date associated with the second curtailment amount.          
MM/DD/YYYY     10  
 
                       
CURT_ADJ_AMT_2
  The curtailment interest on the second curtailment amount, if applicable.    
2     No commas(,) or
dollar signs ($)     11  

 

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

 

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

 

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

 

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

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

Section 1. Remittances and Ending Balances — Required Data

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

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

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

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

 

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

 

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

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

 

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

 

Exhibit 12B : Standard File Layout – Delinquency Reporting
 

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

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

 

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

 

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

 

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

 

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

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

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

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

  •   Mortgagor     •   Tenant     •   Unknown     •   Vacant

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

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

 

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

 

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

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

 

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

 

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

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

 

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

 

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

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

4-12.   Complete as applicable. Required documentation:

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

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

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

     22.    The total of lines 14 through 21.

 

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

 

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

     Total Realized Loss (or Amount of Any Gain)

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

 

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

 

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

                 
Prepared by:
          Date:    
 
         
 
Phone:
          Email Address:    
 
           

          Servicer Loan No.   Servicer Name   Servicer Address
 
       

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

                      Liquidation and Acquisition Expenses:                 (1)
 
Actual Unpaid Principal Balance of Mortgage Loan
  $                                          (1)         (2)  
Interest accrued at Net Rate
                                             (2)         (3)  
Accrued Servicing Fees
                                             (3)         (4)  
Attorney’s Fees
                                             (4)         (5)  
Taxes (see page 2)
                                             (5)         (6)  
Property Maintenance
                                             (6)         (7)  
MI/Hazard Insurance Premiums (see page 2)
                                             (7)         (8)  
Utility Expenses
                                             (8)         (9)  
Appraisal/BPO
                                             (9)         (10)  
Property Inspections
                                             (10)         (11)  
FC Costs/Other Legal Expenses
                                             (11)         (12)  
Other (itemize)
                                             (12)            
Cash for Keys                                                            
                                             (12)            
HOA/Condo Fees                                                            
                                             (12)            
                                                                                
                                             (12)            
 
                   
Total Expenses
  $                                          (13)         Credits:              
  (14)  
Escrow Balance
  $                                          (14)         (15)  
HIP Refund
                                             (15)         (16)  
Rental Receipts
                                             (16)         (17)  
Hazard Loss Proceeds
                                             (17)         (18)  
Primary Mortgage Insurance / Gov’t Insurance
                                             (18a)   HUD Part A    
 
                                             (18b)   HUD Part B (19)  
Pool Insurance Proceeds
                                             (19)         (20)  
Proceeds from Sale of Acquired Property
                                             (20)         (21)  
Other (itemize)
                                             (21)            
                                                            
                                             (21)            
 
                   
Total Credits
  $                                          (22)         Total Realized Loss
(or Amount of Gain)   $                                          (23)        

1

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Escrow Disbursement Detail

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

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               EXHIBIT II
FORM OF ASSESSMENT OF COMPLIANCE

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

[IDENTIFY PARTIES]
I,                                                             , the           
                               of PHH Mortgage Corporation, certify to [the
Purchaser], [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent that
they will rely upon this certification, that:
     (1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the “Compliance
Statement”), the report on assessment of the Company’s compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB and identified as
the responsibility of the Company on Exhibit A hereto (the “Servicing
Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of
Regulation AB (the “Servicing Assessment”), the registered public accounting
firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the “Company Servicing Information”);
     (2) Based on my knowledge, the Company Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Company Servicing Information;
     (3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been provided to
the [Depositor] [Master Servicer] [Securities Administrator] [Trustee];
     (4) I am responsible for reviewing the activities performed by the Company
as servicer under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Compliance Statement, the Servicing Assessment or the Attestation Report,
the Company has fulfilled its obligations under the Agreement in all material
respects; and
     (5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation Report
required to be provided by the Company and by any Subservicer or Subcontractor
pursuant to the Agreement, have been provided to the [Depositor] [Master
Servicer]. Any material instances of noncompliance described in such reports
have been disclosed to the [Depositor] [Master Servicer]. Any material instance
of noncompliance with the Servicing Criteria has been disclosed in such reports.

             
 
  Date:        
 
           

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  By:        
 
           
 
      Name:    
 
      Title:    

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EXHIBIT A
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
“Applicable Servicing Criteria”;

                            Applicable Servicing Criteria   Servicing Reference
  Criteria   Criteria  
 
  General Servicing Considerations    
 
       
1122(d)(1)(i)
  Policies and procedures are instituted to monitor any performance or other
triggers and events of default in accordance with the transaction agreements.  
x
 
       
1122(d)(1)(ii)
  If any material servicing activities are outsourced to third parties, policies
and procedures are instituted to monitor the third party’s performance and
compliance with such servicing activities.   x
 
       
1122(d)(1)(iii)
  Any requirements in the transaction agreements to maintain a back-up servicer
for the mortgage loans are maintained.    
 
       
1122(d)(1)(iv)
  A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in the
amount of coverage required by and otherwise in accordance with the terms of the
transaction agreements.   x
 
       
 
  Cash Collection and Administration    
 
       
1122(d)(2)(i)
  Payments on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
agreements.   x
 
       
1122(d)(2)(ii)
  Disbursements made via wire transfer on behalf of an obligor or to an investor
are made only by authorized personnel.   x
 
       
1122(d)(2)(iii)
  Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.   x
 
       
1122(d)(2)(iv)
  The related accounts for the transaction, such as cash reserve accounts or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth in the
transaction agreements.   x

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                            Applicable Servicing Criteria   Servicing Reference
  Criteria   Criteria  
1122(d)(2)(v)
  Each custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes of this
criterion, “federally insured depository institution” with respect to a foreign
financial institution means a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.   x
 
       
1122(d)(2)(vi)

1122(d)(2)(vii)
  Unissued checks are safeguarded so as to prevent unauthorized access.

Reconciliations are prepared on a monthly basis for all asset-backed securities
related bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date, or such other
number of days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the reconciliation; and
(D) contain explanations for reconciling items. These reconciling items are
resolved within 90 calendar days of their original identification, or such other
number of days specified in the transaction agreements.  

x
 
       
 
  Investor Remittances and Reporting    
 
       
1122(d)(3)(i)
  Reports to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors’ or the
trustee’s records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.   x
 
       
1122(d)(3)(ii)
  Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction
agreements.   x
 
       
1122(d)(3)(iii)
  Disbursements made to an investor are posted within two business days to the
Servicer’s investor records, or such other number of days specified in the
transaction agreements.   x
 
       
1122(d)(3)(iv)
  Amounts remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.   x
 
       
 
  Pool Asset Administration    
 
       
1122(d)(4)(i)
  Collateral or security on mortgage loans is maintained as required by the
transaction agreements or related mortgage loan documents.   x

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                            Applicable Servicing Criteria   Servicing Reference
  Criteria   Criteria  
1122(d)(4)(ii)
  Mortgage loan and related documents are safeguarded as required by the
transaction agreements   x
 
       
1122(d)(4)(iii)
  Any additions, removals or substitutions to the asset pool are made, reviewed
and approved in accordance with any conditions or requirements in the
transaction agreements.   x  
1122(d)(4)(iv)
  Payments on mortgage loans, including any payoffs, made in accordance with the
related mortgage loan documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance with the related mortgage
loan documents.   x
 
       
1122(d)(4)(v)
  The Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.   x
 
       
1122(d)(4)(vi)
  Changes with respect to the terms or status of an obligor’s mortgage loans
(e.g., loan modifications or re-agings) are made, reviewed and approved by
authorized personnel in accordance with the transaction agreements and related
pool asset documents.   x
 
       
1122(d)(4)(vii)
  Loss mitigation or recovery actions (e.g., forbearance plans, modifications
and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable)
are initiated, conducted and concluded in accordance with the timeframes or
other requirements established by the transaction agreements.   x
 
       
1122(d)(4)(viii)
  Records documenting collection efforts are maintained during the period a
mortgage loan is delinquent in accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or such other period
specified in the transaction agreements, and describe the entity’s activities in
monitoring delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).   x
 
       
1122(d)(4)(ix)
  Adjustments to interest rates or rates of return for mortgage loans with
variable rates are computed based on the related mortgage loan documents.   x

5

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                            Applicable Servicing Criteria   Servicing Reference
  Criteria   Criteria  
1122(d)(4)(x)
  Regarding any funds held in trust for an obligor (such as escrow accounts):
(A) such funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar days of full
repayment of the Mortgage Loans, or such other number of days specified in the
transaction agreements.   x
 
       
1122(d)(4)(xi)
  Payments made on behalf of an obligor (such as tax or insurance payments) are
made on or before the related penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior to these dates, or
such other number of days specified in the transaction agreements.   x
 
       
1122(d)(4)(xii)
  Any late payment penalties in connection with any payment to be made on behalf
of an obligor are paid from the servicer’s funds and not charged to the obligor,
unless the late payment was due to the obligor’s error or omission.   x
 
       
1122(d)(4)(xiii)
  Disbursements made on behalf of an obligor are posted within two business days
to the obligor’s records maintained by the servicer, or such other number of
days specified in the transaction agreements.   x
 
       
1122(d)(4)(xiv)
  Delinquencies, charge-offs and uncollectible accounts are recognized and
recorded in accordance with the transaction agreements.   x
 
       
1122(d)(4)(xv)
  Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.    

[PHH MORTGAGE CORPORATION]
[NAME OF SUBSERVICER]
Date:                                                             

6

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                  By:           Name:           Title:      

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PHH – SEQUOIA TO TRUSTEE
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
For
Mortgage Loan Flow Purchase, Sale & Servicing Agreement
And
Additional Collateral Servicing Agreement
     THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated as of May 25,
2007 (the “Assignment”), is entered into among Sequoia Residential Funding, Inc.
(the “Assignor”), PHH Mortgage Corporation (formerly known as Cendant Mortgage
Corporation) (“PHH”) and Bishop’s Gate Residential Mortgage Trust (formerly
known as Cendant Residential Mortgage Trust), as the sellers (the “Sellers”),
and PHH, as the servicer (the “Servicer”), and HSBC Bank USA, National
Association (“HSBC Bank”) as Trustee under a Pooling and Servicing Agreement
dated as of May 1, 2007 (the “Pooling and Servicing Agreement”), among the
Assignor, as Depositor, HSBC Bank (in such Trustee capacity, the “Assignee”),
and Wells Fargo Bank, N. A., as Master Servicer and Securities Administrator.
RECITALS
     WHEREAS, RWT Holdings, Inc., (“RWT Holdings”), the Sellers and the Servicer
have entered into a certain Mortgage Loan Flow Purchase, Sale & Servicing
Agreement, dated as of August 1, 2002, with RWT Holdings as purchaser, PHH as
servicer and seller, Bishop’s Gate Residential Mortgage Trust (formerly known as
Cendant Residential Mortgage Trust) as seller, and Redwood Trust, Inc., as
guarantor, (as amended or modified to the date hereof, the “2002 Flow Servicing
Agreement”), and pursuant to the Purchase Price and Terms Letter(s) and Warranty
Bill(s) of Sale issued under the 2002 Flow Servicing Agreement and listed in
Appendix A hereto (the “Purchase Price and Terms Letter(s)” and “Bill(s) of
Sale,” respectively) RWT Holdings acquired from the Sellers certain Mortgage
Loans (the “Mortgage Loans”) and the Servicer has agreed to service such
Mortgage Loans. In addition, certain of the Mortgage Loans are subject to the
Additional Collateral Servicing Agreement, dated as of August 1, 2002 (the
“Additional Collateral Agreement”), between RWT Holdings and the Servicer; and
     WHEREAS, RWT Holdings has previously sold, assigned and transferred all of
its right, title and interest in certain of the Mortgage Loans as well as in
certain mortgage loans purchased separately from Redwood Trust, Inc. and
currently being serviced by Servicer pursuant to the 2002 Flow Servicing
Agreement and the Additional Collateral Agreement (the “Specified Mortgage
Loans”) which are listed on the mortgage loan schedule attached as Exhibit I
hereto (the “Specified Mortgage Loan Schedule”) and certain rights under the
2002 Flow Servicing Agreement and the Additional Collateral Agreement with
respect to the Specified Mortgage Loans to Assignor; and
     WHEREAS, the parties hereto agree that notwithstanding anything to the
contrary in the 2002 Flow Servicing Agreement and the Additional Collateral
Agreement, the Specified Mortgage Loans are currently being serviced by PHH
pursuant to the Mortgage Loan Flow Purchase, Sale & Servicing Agreement among
RWT Holdings, PHH Mortgage Corporation (formerly known as Cendant Mortgage
Corporation) (“PHH”) and Bishop’s Gate Residential Mortgage Trust (formerly
known as Cendant Residential Mortgage Trust), as Sellers, and PHH, as Servicer,
dated January 1, 2006 (the “2006 Flow Purchase and Servicing Agreement”) and the

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Additional Collateral Agreement (the 2006 Flow Purchase and Servicing Agreement
and the Additional Collateral Agreement collectively referred to herein as the
“Agreements”); and
     WHEREAS, the parties hereto have agreed that the Specified Mortgage Loans
shall be subject to the terms of this Assignment.
     NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties agree as follows:
     1. Assignment and Assumption.
          (a) Effective on and as of the date hereof, the Assignor hereby
pledges, assigns and transfers to the Assignee all of its right, title and
interest in the Specified Mortgage Loans and all of its rights (but none of the
Purchaser’s representations, warranties or obligations) provided under the
Agreements to the extent relating to the Specified Mortgage Loans, the Assignee
hereby accepts such assignment from the Assignor, and the Sellers and the
Servicer hereby acknowledge such assignment and assumption.
     (b) Effective on and as of the date hereof, the Assignor represents and
warrants to the Assignee that the Assignor has not taken any action that would
serve to impair or encumber the Assignee’s interest in the Specified Mortgage
Loans since the date of the Assignor’s acquisition of the Specified Mortgage
Loans.
2. Recognition of the Assignee.
From and after the date hereof, subject to Section 3 below, the Sellers and the
Servicer shall recognize the Assignee as the holder of the rights and benefits
of the Purchaser with respect to the Specified Mortgage Loans and the Servicer
will service the Specified Mortgage Loans for the Assignee as if the Assignee
and the Servicer had entered into separate servicing agreements for the
servicing of the Specified Mortgage Loans in the form of the 2006 Flow Purchase
and Servicing Agreement and the Additional Collateral Agreement (each as amended
hereby) with the Assignee as the Purchaser thereunder, the terms of which
Agreements are incorporated herein by reference and amended hereby. It is the
intention of the parties hereto that this Assignment will be a separate and
distinct agreement, and the entire agreement, between the parties hereto to the
extent of the Specified Mortgage Loans and shall be binding upon and for the
benefit of the respective successors and assigns of the parties hereto.
3. Assignor’s Continuing Rights and Responsibilities.
Notwithstanding Sections 1 and 2 above, the parties hereto agree that the
Assignor rather than the Assignee shall have the ongoing rights and
responsibilities of the Purchaser under the following sections of the
Agreements:
2006 Flow Purchase and Servicing Agreement:

      Section   Matter  
2.04, 3rd ¶
  (a) Defective Documents; Delivery of Mortgage Loan Documents.
 
   
3.04(3), 1st ¶
  (b) Repurchase and Substitution.

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      Section   Matter  
5.01(3)(c) and (d)
  (c) Consent of the Purchaser.
 
   
5.14
  (d) Sale of Specially Serviced Mortgage Loans and REO Properties.
 
   
 
   
5.15, 6th and 8th ¶’s
  (e) Realization Upon Specially Serviced Mortgage Loans and REO Properties.
 
   
7.06
  (f) Purchaser’s Right to Examine Servicer Records.
 
   
9.01 penultimate sentence
  (g) Indemnification; Third-Party Claims.

Additional Collateral Agreement:

      Section   Matter
5(a) and (c)
  Surety Bond.

In addition, the Servicer agrees to furnish upon request to the Assignor and the
Master Servicer copies of reports, notices, statements and other communications
required to be delivered by the Servicer pursuant to any of the sections of the
Agreements referred to above and under the following sections, at the times
therein specified:
               2006 Flow Purchase and Servicing Agreement:

      Section      
5.03
  (a) Reports for Specially Serviced Mortgage Loans and Foreclosure Sales.
 
   
5.13, 1st and 5th ¶’s
  (b) Management of REO Properties.
 
   
5.15, 2nd ¶
  (c) Realization Upon Specially Serviced Mortgage Loans and REO Properties.
 
   
6.02
  (d) Reporting.
 
   
6.04
  (e) Non-recoverable Advances.
 
   
6.05
  (f) Itemization of Servicing Advances.

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      Section      
7.02
  (g) Satisfaction of Mortgages and Release of Mortgage Files.
 
   
7.04
  (h) Annual Compliance Statement.
 
   
7.05
  (i) Annual Assessment of Compliance and Attestation Report.
 
   
7.07
  (j) Back-Up SOX Certification
 
   
8.01
  (k) The Servicer’s Reporting Requirements.
 
   
8.02, 1st ¶
  (l) Financial Statements.
 
   
9.01
  (m) Indemnification; Third-Party Claims

          Additional Collateral Agreement:
          N/A.
     4. Amendment to the Agreements.
The parties to this Assignment agree to deem the Additional Collateral Agreement
together with the 2006 Flow Purchase and Servicing Agreement, as a single
servicing agreement (the “Combined Servicing Agreement”) for purposes of Section
7.04 (Annual Compliance Statement) and 7.05 (Annual Assessment of Compliance and
Attestation Report) of the 2006 Flow Purchase and Servicing Agreement.
Accordingly, the certificates delivered by the Servicer pursuant to those
sections shall address all categories applicable to the Combined Servicing
Agreement.
In addition, the Agreements are hereby amended as set forth in Appendix B hereto
with respect to the Specified Mortgage Loans.
     5. Representations and Warranties.
     (a) Each of the parties hereto represents and warrants that it is duly and
legally authorized to enter into this Assignment.
     (b) Each of the parties hereto represents and warrants that this Assignment
has been duly authorized, executed and delivered by it and (assuming due
authorization, execution and delivery thereof by each of the other parties
hereto) constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

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     6. Continuing Effect.
Except as contemplated hereby, the Agreements shall remain in full force and
effect in accordance with their terms.

12

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          7. Governing Law.
This Assignment and the rights and obligations hereunder shall be governed by
and construed in accordance with the internal laws of the State of New York.
          8. Notices.
Any notices or other communications permitted or required under the Agreements
to be made to the Assignor and Assignee shall be made in accordance with the
terms of the Agreements and shall be sent to the Assignor and Assignee as
follows:
Sequoia Residential Funding, Inc.
One Belvedere Place, Suite 330
Mill Valley, CA 94941
Facsimile Number: 415-381-1773
HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018
or to such other address as may hereafter be furnished by the Assignor or
Assignee to the other parties in accordance with the provisions of the
Agreements.
9. Counterparts.
This Assignment may be executed in counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
10. Definitions.
Any capitalized term used but not defined in this Assignment has the same
meaning as in the Agreements.
11. Master Servicer.
     The Sellers and the Servicer hereby acknowledge that the Assignee has
appointed Wells Fargo Bank, N. A. (the “Master Servicer”) to act as master
servicer and securities administrator under the Pooling and Servicing Agreement
and hereby agree to treat all inquiries, instructions, authorizations and other
communications from the Master Servicer as if the same had been received from
the Assignee. The Master Servicer, acting on behalf of the Assignee, shall have
the rights of the Assignee as the Purchaser under the Agreements to enforce the
obligations of the Servicer thereunder. Any notices or other communications
permitted or required under the Agreements to be made to the Assignee shall be
made in accordance with the terms of the Agreements and shall be sent to the
Master Servicer at the following address:

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

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment the day and
year first above written.

                  ASSIGNOR:    
 
                SEQUOIA RESIDENTIAL FUNDING, INC.    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                ASSIGNEE:    
 
                HSBC BANK USA, NATIONAL         ASSOCIATION    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                SELLER:         PHH MORTGAGE CORPORATION    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                SELLER:         BISHOP’S GATE RESIDENTIAL         MORTGAGE TRUST
   
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

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                SERVICER:         PHH MORTGAGE CORPORATION    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

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EXHIBIT I

 

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APPENDIX A

          Purchase Price and Terms Letter(s)   Warranty Bill(s) of Sale
 
    10/23/03  
 
    2/20/04  
 
    10/21/05  
 
    11/18/05  
 
    12/21/05  

 

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APPENDIX B
MODIFICATIONS TO THE 2006 FLOW PURCHASE AND SERVICING AGREEMENT
1. The definition of “Business Day” is hereby revised to read as follows
(addition in italics):
     “ ‘Business Day’: Any day other than (i) a Saturday or Sunday, (ii) a day
on which banking or savings associations in the States of Maryland or Minnesota
are authorized or obligated by law or executive order to be closed, or (iii) a
day on which the Federal Reserve is closed.”
2. The definition of “Collection Account” is hereby revised to read as follows:
     “‘Collection Account’: The separate trust account or accounts created and
maintained pursuant to Section 5.04 which shall be entitled ‘HSBC Bank USA,
National Association, as Trustee on behalf of the holders of Sequoia Mortgage
Trust 2007-2 Mortgage Pass-Through Certificates.’”
3. The definition of “Cut-off Date” is hereby revised to read as follows:
     “‘Cut-off Date’: May 1, 2007.”
4. The definition of “Due Period” is hereby revised to read as follows:
“‘Due Period’: With respect to each Remittance Date, the period commencing on
the second day of the month immediately preceding the month of such Remittance
Date and ending on the first day of the month of such Remittance Date.”
5. The definition of “Escrow Account” is hereby revised to read as follows
(changes in italics):
     “ ‘Escrow Account’: The separate trust account or accounts created and
maintained pursuant to Section 5.06 which shall be entitled “PHH Mortgage
Corporation, as servicer and custodian for the Purchaser under the Mortgage Loan
Flow Purchase, Sale & Servicing Agreement, dated as of January 1, 2006 (as
amended), and various mortgagors.”
6. Section 3.03 is revised to delete the “and” at the end of Section 3.03(48),
to replace the “.” at the end of Section 3.03(49) with “;”, to replace the “.”
at the end of Section 3.03(50) with “;” and to add the following representations
and warranties at the end of such Section:
     “(51) No Mortgage Loan was originated on or after October 1, 2002 and prior
to March 7, 2003, which is secured by property located in the State of Georgia.
No Mortgage Loan was originated on or after March 7, 2003 which is a “high cost
home loan” as defined under the Georgia Fair Lending Act, which became effective
October 1, 2002;
     (52) Each Mortgage Loan at the time it was made complied in all material
respects with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws;
     (53) None of the mortgage loans are High Cost as defined by the applicable
predatory and abusive lending laws and no mortgage loan is a “high cost” or
“covered” mortgage loan, as applicable (as such terms are defined in the then
current Standard and Poor’s LEVELS Glossary which is now Version 5.7,
Appendix E);

 

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     (54) No Mortgage Loan which is secured by property located in the State of
New Jersey is a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act, which became effective November 27, 2003;
     (55) No Mortgage Loan which is secured by property located in the State of
New Mexico is a “High-Cost Home Loan” as defined in the New Mexico Home Loan
Protection Act, which became effective January 1, 2004;
     (56) No Mortgage Loan which is secured by property located in the State of
Kentucky is a “High-Cost Home Loan” as defined in the Kentucky House Bill 287,
which became effective June 24, 2003;
     (57) No Mortgage Loan which is secured by property located in the
Commonwealth of Massachusetts is a “High Cost Home Mortgage Loan” as defined in
the Massachusetts Predatory Home Loan Practices Act (Mass. Ann. Laws ch. 183C)
which became effective November 7, 2004;
     (58) No Mortgage Loan that is secured by property located in the State of
Illinois is a “High-Risk Home Loan” as defined in the Illinois High Risk Home
Loan Act effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et seq.); and
none of the Mortgage Loans that are secured by property located in the State of
Illinois are in violation of the provisions of the Illinois Interest Act (815
Ill. Comp. Stat. 205/1 et. seq.);
     (59) No Mortgage Loan that is secured by property located in the State of
Indiana is a “High Cost Home Loan” as defined in Indiana’s Home Loan Practices
Act (I.C. 24-9), which became effective January 1, 2005;
     (60) None of the proceeds of any Mortgage Loan were used to finance the
purchase of single premium credit insurance policies; and
     (61) No Mortgage Loan contains prepayment penalties that extend beyond five
years after the date of origination.”
7. The first sentence of Section 5.03 is hereby replaced with the following:
“The Servicer shall, within five (5) calendar days following each Record Date,
deliver to the Purchaser monthly reports (substantially in the form of
Exhibit 1: 12B and 12C attached hereto or in such other format and content
mutually agreed upon) with respect to all Specially Serviced Mortgage Loans.”
11. The first sentence of Section 6.02 is hereby replaced with the following:
“On or before the 5th calendar day (or, if such day is not a Business Day, on
the immediately succeeding Business Day) of each month during the term hereof,
the Servicer shall deliver to the Purchaser monthly accounting reports in the
form of Exhibit 1: 12A attached hereto, or in such other format and content
mutually agreed upon, with respect to the most recently ended Monthly Period.”
12. Section 10.01 is revised to read as follows:
“(1) any failure by the Servicer to remit to the Purchaser any payment required
to be made under the terms of this Agreement which continues unremedied for a
period of 3 Business Days;”
13. Section 10.01 is revised to add an “or” and the following after 10.01(8):
“(9) any failure by the Servicer to comply with Sections 7.04, 7.05 or 7.07 of
this Agreement.”

 

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11. Exhibit 11 to the Flow Purchase and Servicing Agreement, the Form of
Assessment of Compliance, is hereby deleted in its entirety and replaced by
Exhibit II attached to this Assignment.

 

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MODIFICATIONS TO THE ADDITIONAL COLLATERAL AGREEMENT
1. A definition of “Collection Account” is added to read as follows:
     “‘Collection Account’: The separate trust account or accounts created and
maintained pursuant to Section 5.04 of the Purchase and Servicing Agreement
which shall be entitled ‘HSBC Bank USA, National Association, as Trustee on
behalf of the holders of Sequoia Mortgage Trust 2007-2 Mortgage Pass-Through
Certificates.’”
4. Section 2(d) is hereby revised by deleting the “and” at the end of Section
2(d)(ii), deleting the “.” at the end of Section 2(d)(iii) and replacing it with
“; and” and then adding the following at the end of such section:
“(iv) The Additional Collateral Mortgage Loans are insured under the terms and
provisions of the Surety Bond subject to the limitations set forth therein. All
requirements for transferring coverage under the Surety Bond in respect of such
Additional Collateral Mortgage Loans to the Trustee (as defined in the Pooling
and Servicing Agreement) shall be complied with.”
5. Section 7 is hereby revised by adding the following sentence at the end of
the paragraph:
“Notwithstanding the foregoing, the obligations and responsibilities of the
Servicer shall terminate upon any Event of Default of the Seller/Servicer
enumerated under Section 10.01 of the Purchase and Servicing Agreement and the
appointed successor servicer shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement.”

 

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EXHIBIT 1
Standard Loan Level File Layout – Master Servicing
Exhibit 12A: Layout

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

 

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Exhibit 1: Continued            Standard Loan Level File Layout

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

 

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Exhibit 1: Continued            Standard Loan Level File Layout

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

 

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

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

Section 1. Remittances and Ending Balances — Required Data

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

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

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

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

 

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

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

 

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

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

 

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

 

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

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

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

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

  •   Mortgagor     •   Tenant     •   Unknown     •   Vacant

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

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

 

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

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

 

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

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

 

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

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

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

  13.   The total of lines 1 through 12.

Credits:

  14-21.   Complete as applicable. Required documentation:

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

  22.   The total of lines 14 through 21.

 

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

Total Realized Loss (or Amount of Any Gain)

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

 

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

                     
Prepared by:
          Date:                              
Phone:
      Email Address:                              

                      Servicer Loan No.         Servicer Name         Servicer
Address                      

WELLS FARGO BANK, N.A. Loan No.
                                                                       
                                                 

         
Borrower’s Name:
                 
Property Address:
                 

             
Liquidation Type: REO Sale
  3rd Party Sale   Short Sale   Charge Off              
Was this loan granted a Bankruptcy deficiency or cramdown
  Yes   No

If “Yes”, provide deficiency or cramdown amount
                 

             
Liquidation and Acquisition Expenses:
           
(1) Actual Unpaid Principal Balance of Mortgage Loan
  $       (1)
 
         
(2) Interest accrued at Net Rate
          (2)
 
         
(3) Accrued Servicing Fees
          (3)
 
         
(4) Attorney’s Fees
          (4)
 
         
(5) Taxes (see page 2)
          (5)
 
         
(6) Property Maintenance
          (6)
 
         
(7) MI/Hazard Insurance Premiums (see page 2)
          (7)
 
         
(8) Utility Expenses
          (8)
 
         
(9) Appraisal/BPO
          (9)
 
         
(10) Property Inspections
          (10)
 
         
(11) FC Costs/Other Legal Expenses
          (11)
 
         
(12) Other (itemize)
          (12)
 
         
Cash for Keys                                         
          (12)
 
         
HOA/Condo Fees                                         
          (12)
 
         
                                                            
          (12)
 
         
 
           
Total Expenses
  $       (13)
 
         
 
           
Credits:
           
(14) Escrow Balance
  $       (14)
 
         
(15) HIP Refund
          (15)
 
         
(16) Rental Receipts
          (16)
 
         
(17) Hazard Loss Proceeds
          (17)
 
         
(18) Primary Mortgage Insurance / Gov’t Insurance
          (18a) HUD Part A
 
         
 
          (18b) HUD Part B
 
         
(19) Pool Insurance Proceeds
          (19)
 
         
(20) Proceeds from Sale of Acquired Property
          (20)
 
         
(21) Other (itemize)
          (21)
 
         
                                                                     
           
          (21)
 
           
Total Credits
  $       (22)
 
         
Total Realized Loss (or Amount of Gain)
  $       (23)
 
         

1

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Escrow Disbursement Detail

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

2

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          EXHIBIT II
FORM OF ASSESSMENT OF COMPLIANCE
     Re:     The [    ] agreement dated as of [    ], 200[ ] (the “Agreement”),
among [IDENTIFY PARTIES]
I,                                                             , the           
                               of PHH Mortgage Corporation, certify to [the
Purchaser], [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent that
they will rely upon this certification, that:
     (1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the “Compliance
Statement”), the report on assessment of the Company’s compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB and identified as
the responsibility of the Company on Exhibit A hereto (the “Servicing
Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of
Regulation AB (the “Servicing Assessment”), the registered public accounting
firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the “Company Servicing Information”);
     (2) Based on my knowledge, the Company Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Company Servicing Information;
     (3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been provided to
the [Depositor] [Master Servicer] [Securities Administrator] [Trustee];
     (4) I am responsible for reviewing the activities performed by the Company
as servicer under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Compliance Statement, the Servicing Assessment or the Attestation Report,
the Company has fulfilled its obligations under the Agreement in all material
respects; and
     (5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation Report
required to be provided by the Company and by any Subservicer or Subcontractor
pursuant to the Agreement, have been provided to the [Depositor] [Master
Servicer]. Any material instances of noncompliance described in such reports
have been disclosed to the [Depositor] [Master Servicer]. Any material instance
of noncompliance with the Servicing Criteria has been disclosed in such reports.

            Date:           By:           Name:           Title:        

1

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EXHIBIT A
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
“Applicable Servicing Criteria”;

                  Applicable         Servicing Servicing Criteria   Criteria
Reference   Criteria    
 
  General Servicing Considerations    
 
       
1122(d)(1)(i)
  Policies and procedures are instituted to monitor any performance or other
triggers and events of default in accordance with the transaction agreements.  
x
 
       
1122(d)(1)(ii)
  If any material servicing activities are outsourced to third parties, policies
and procedures are instituted to monitor the third party’s performance and
compliance with such servicing activities.   x
 
       
1122(d)(1)(iii)
  Any requirements in the transaction agreements to maintain a back-up servicer
for the mortgage loans are maintained.    
 
       
1122(d)(1)(iv)
  A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in the
amount of coverage required by and otherwise in accordance with the terms of the
transaction agreements.   x
 
       
 
  Cash Collection and Administration    
 
       
1122(d)(2)(i)
  Payments on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
agreements.   x
 
       
1122(d)(2)(ii)
  Disbursements made via wire transfer on behalf of an obligor or to an investor
are made only by authorized personnel.   x
 
       
1122(d)(2)(iii)
  Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.   x
 
       
1122(d)(2)(iv)
  The related accounts for the transaction, such as cash reserve accounts or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth in the
transaction agreements.   x
 
       

2

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                  Applicable         Servicing Servicing Criteria   Criteria
Reference   Criteria    
1122(d)(2)(v)
  Each custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes of this
criterion, “federally insured depository institution” with respect to a foreign
financial institution means a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.   x
 
       
1122(d)(2)(vi)
  Unissued checks are safeguarded so as to prevent unauthorized access.      
1122(d)(2)(vii)
  Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and related bank
clearing accounts. These reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the bank statement cutoff date, or
such other number of days specified in the transaction agreements; (C) reviewed
and approved by someone other than the person who prepared the reconciliation;
and (D) contain explanations for reconciling items. These reconciling items are
resolved within 90 calendar days of their original identification, or such other
number of days specified in the transaction agreements.   x
 
       
 
  Investor Remittances and Reporting    
 
       
1122(d)(3)(i)
  Reports to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors’ or the
trustee’s records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.   x
 
       
1122(d)(3)(ii)
  Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction
agreements.   x
 
       
1122(d)(3)(iii)
  Disbursements made to an investor are posted within two business days to the
Servicer’s investor records, or such other number of days specified in the
transaction agreements.   x
 
       
1122(d)(3)(iv)
  Amounts remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.   x
 
       
 
  Pool Asset Administration    
 
       
1122(d)(4)(i)
  Collateral or security on mortgage loans is maintained as required by the
transaction agreements or related mortgage loan documents.   x

3

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                  Applicable         Servicing Servicing Criteria   Criteria
Reference   Criteria    
1122(d)(4)(ii)
  Mortgage loan and related documents are safeguarded as required by the
transaction agreements   x
 
       
1122(d)(4)(iii)
  Any additions, removals or substitutions to the asset pool are made, reviewed
and approved in accordance with any conditions or requirements in the
transaction agreements.   x
 
       
1122(d)(4)(iv)
  Payments on mortgage loans, including any payoffs, made in accordance with the
related mortgage loan documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance with the related mortgage
loan documents.   x
 
       
1122(d)(4)(v)
  The Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.   x
 
       
1122(d)(4)(vi)
  Changes with respect to the terms or status of an obligor’s mortgage loans
(e.g., loan modifications or re-agings) are made, reviewed and approved by
authorized personnel in accordance with the transaction agreements and related
pool asset documents.   x
 
       
1122(d)(4)(vii)
  Loss mitigation or recovery actions (e.g., forbearance plans, modifications
and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable)
are initiated, conducted and concluded in accordance with the timeframes or
other requirements established by the transaction agreements.   x
 
       
1122(d)(4)(viii)
  Records documenting collection efforts are maintained during the period a
mortgage loan is delinquent in accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or such other period
specified in the transaction agreements, and describe the entity’s activities in
monitoring delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).   x
 
       
1122(d)(4)(ix)
  Adjustments to interest rates or rates of return for mortgage loans with
variable rates are computed based on the related mortgage loan documents.   x

4

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                  Applicable         Servicing Servicing Criteria   Criteria
Reference   Criteria    
1122(d)(4)(x)
  Regarding any funds held in trust for an obligor (such as escrow accounts):
(A) such funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar days of full
repayment of the Mortgage Loans, or such other number of days specified in the
transaction agreements.   x
 
       
1122(d)(4)(xi)
  Payments made on behalf of an obligor (such as tax or insurance payments) are
made on or before the related penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior to these dates, or
such other number of days specified in the transaction agreements.   x
 
       
1122(d)(4)(xii)
  Any late payment penalties in connection with any payment to be made on behalf
of an obligor are paid from the servicer’s funds and not charged to the obligor,
unless the late payment was due to the obligor’s error or omission.   x
 
       
1122(d)(4)(xiii)
  Disbursements made on behalf of an obligor are posted within two business days
to the obligor’s records maintained by the servicer, or such other number of
days specified in the transaction agreements.   x
 
       
1122(d)(4)(xiv)
  Delinquencies, charge-offs and uncollectible accounts are recognized and
recorded in accordance with the transaction agreements.   x
 
       
1122(d)(4)(xv)
  Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.    

            [PHH MORTGAGE CORPORATION]
[NAME OF SUBSERVICER]
      Date:                 By:                   Name:           Title:       

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