EXHIBIT 10.7
 

SEQUOIA MORTGAGE TRUST 2011-1
MORTGAGE PASS-THROUGH CERTIFICATES

MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
 
Between
 
REDWOOD RESIDENTIAL ACQUISITION CORPORATION,
 
and
 
SEQUOIA RESIDENTIAL FUNDING, INC.
 
dated as of March 1, 2011

 

 
 

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TABLE OF CONTENTS
 
PAGE

     
Section 1.
Representations and Warranties of RRAC and Sequoia
1
Section 2.
Additional Representations, Warranties and Agreements of RRAC
1
Section 3.
Conveyance of Mortgage Loans
3
Section 4.
Intention of Parties
4
Section 5.
Termination
5
Section 6.
Miscellaneous
5
Schedule A.
Mortgage Loan Schedule
 

 
 

 
 

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MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
 
This Mortgage Loan Purchase and Sale Agreement (the “Agreement”) is made as of
March 1, 2011, by and between Redwood Residential Acquisition Corporation, a
Delaware corporation (“RRAC”), and Sequoia Residential Funding, Inc., a Delaware
corporation (“Sequoia”).

WHEREAS, the parties hereto desire to provide for the purchase and sale of the
Mortgage Loans on the date hereof (the “Closing Date”) in accordance with the
terms and conditions set forth in this Agreement.

NOW, THEREFORE, the parties in consideration of good and valuable and fair
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, hereby agree as follows:

Section 1. Representations and Warranties of RRAC and Sequoia.  RRAC and
Sequoia, each as to itself and not the other, hereby represents, warrants and
agrees for the benefit of the other party that:

(a)           Authorization.  The execution, delivery and performance of this
Agreement by it are within its respective powers and have been duly authorized
by all necessary action on its part.

(b)           No Conflict.  The execution, delivery and performance of this
Agreement will not violate or conflict with (i) its charter or bylaws, (ii) any
resolution or other corporate action by it, or (iii) any decisions, statutes,
ordinances, rulings, directions, rules, regulations, orders, writs, decrees,
injunctions, permits, certificates or other requirements of any court or other
governmental or public authority in any way applicable to or binding upon it,
and will not result in or require the creation, except as provided in or
contemplated by this Agreement, of any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind upon the Mortgage Loans.

(c)           Binding Obligation.  This Agreement has been duly executed by it
and is its legally valid and binding obligation, enforceable against it in
accordance with this Agreement’s terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general principles of equity.

Section 2. Additional Representations, Warranties and Agreements of RRAC.

(a)           Title and Mortgage Loan Schedule.  RRAC represents and warrants
to, and agrees with, Sequoia that (i) on the Closing Date, RRAC will have good,
valid and marketable title to the mortgage loans identified on Schedule A hereto
(the “Mortgage Loans”), in each case free and clear of all liens, mortgages,
deeds of trust, pledges, security interests, charges, encumbrances or other
claims; (ii) upon transfer to Sequoia, Sequoia will receive good, valid and
marketable title to all of the Mortgage Loans, in

 
 

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each case free and clear of any liens, mortgages, deeds of trust, pledges,
security interests, charges, encumbrances or other claims; and (iii) as to each
Mortgage Loan that is not a Schedule 1B Mortgage Loan (as defined in the PHH
AAR), as of the date on which RRAC purchased such Mortgage Loan from either
First Republic Bank or PHH Mortgage Corporation, as applicable (each, an
“Originator”), and as to each Schedule 1B Mortgage Loan, as of the date on which
DLJ Mortgage Capital, Inc. purchased such Mortgage Loan from PHH Mortgage
Corporation, the information set forth in the Mortgage Loan Schedule in the
fields identified as “Document Type,” “Monthly Income” and “Assets Verified” is
complete, true and correct in all material respects.

(b)           Additional Representations Regarding Encumbrances and Property
Type.  RRAC represents and warrants to, and agrees with, Sequoia that, as of the
Closing Date:

(i)            as to each Mortgage Loan, the lien of the Mortgage is free and
clear of all adverse claims, liens and encumbrances having priority over the
first lien of the Mortgage subject only to (1) the lien of non-delinquent
current real property taxes and assessments not yet due and payable, (2)
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording which are acceptable to
mortgage lending institutions generally and which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal and (3)
other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property.

(ii)           as to each Mortgage Loan relating to the PHH AAR, the related
Mortgaged Property is located in the U.S. or a territory of the U.S. and
consists of a one- to four-unit residential property, which may include, but is
not limited to, a single-family dwelling, townhouse, condominium unit, or unit
in a planned unit development or, in the case of a Cooperative Loan (as defined
in the PHH AAR), one or more leases or occupancy agreements.

 (c)            Security Interest Matters.  RRAC hereby represents and warrants
for the benefit of Sequoia and the Trustee (as defined in the Pooling and
Servicing Agreement, dated as of February 1, 2011 (as in effect on the date of
execution hereof, the “Pooling and Servicing Agreement”) among Sequoia, as
depositor, Wells Fargo Bank, N.A., as master servicer and securities
administrator, and Citibank, N.A., as trustee) (as assignee of Sequoia):  (i)
this Agreement creates a valid and continuing security interest (as defined in
the applicable UCC) in the Mortgage Loans in favor of Sequoia, which security
interest is prior to all other Liens, and is enforceable as such as against
creditors of and purchasers from RRAC; (ii) the Mortgage Notes constitute
“instruments” within the meaning of the applicable UCC; (iii) RRAC, immediately
prior to its transfer of Mortgage Loans under this Agreement, will own and have
good, valid and marketable title to the Mortgage Loans free and clear of any
Lien, claim or encumbrance of any Person; (iv) RRAC has received all consents
and approvals required by the terms of the Mortgage Loans to the sale of the
Mortgage Loans hereunder to Sequoia; (v) all original

 
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executed copies of each Mortgage Note that constitute or evidence the Mortgage
Loans have been delivered to the Custodian (as assignee of Sequoia); (vi) RRAC
has received a written acknowledgment from the Custodian that such Custodian is
holding the Mortgage Notes that constitute or evidence the Mortgage Loans solely
on behalf and for the benefit of Sequoia or its assignee; (vii) other than the
security interest granted to Sequoia pursuant to this Agreement and security
interests granted to lenders which will be automatically released on the Closing
Date, RRAC has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Mortgage Loans; RRAC has not authorized the filing
of and is not aware of any financing statements against it that include a
description of collateral covering the Mortgage Loans other than any financing
statement relating to the security interest granted to Sequoia hereunder or that
will be automatically released upon the sale to Sequoia; (viii) RRAC is not
aware of any judgment or tax lien filing against itself; and (ix) none of the
Mortgage Notes that constitute or evidence the Mortgage Loans have any marks or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than Sequoia.

(d)           Repurchase Obligation.  In the event of a breach of any of the
representations and warranties of RRAC specified in this Section 2 that
materially adversely affects the value of a Mortgage Loan or the interest
therein of the Certificateholders (as assignees of Sequoia), RRAC will
repurchase such Mortgage Loan pursuant to Section 2.04 of the Pooling and
Servicing Agreement.

Section 3.    Conveyance of Mortgage Loans.

(a)           Mortgage Loans.  In return for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, RRAC, concurrently
with the execution and delivery hereof, hereby sells, transfers, assigns, sets
over and otherwise conveys to Sequoia, without recourse, all of RRAC’s right,
title and interest in and to the Mortgage Loans, including the related Mortgage
Documents and all principal and interest received by RRAC on or with respect to
the Mortgage Loans after February 1, 2011 (the “Cut-off Date”) (other than
Scheduled Payments due on or before such date), and all such payments due after
such date but received on or prior to such date and intended by the related
Mortgagors to be applied after such date, all insurance policies with respect to
the Mortgage Loans, and all proceeds of the foregoing.

Sequoia shall pay the purchase price for the Mortgage Loans by delivering to
RRAC on the Closing Date cash in an amount mutually agreed upon by RRAC and
Sequoia.

On or prior to the Closing Date, RRAC shall deliver or cause to be delivered to
Sequoia or, at Sequoia’s direction, to the Custodian, the Trustee Mortgage File
for each Mortgage Loan in the manner set forth in Article 3 of the Custodial
Agreement as in effect on the date of execution hereof, by and among Wells Fargo
Bank, N.A., as custodian and master servicer, RRAC, as seller, Sequoia, as
depositor, and Citibank, N.A., as trustee.  

 
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(b)           Limited Remedies.  Sequoia acknowledges and agrees that it shall
have no recourse to RRAC with respect to any Defective Mortgage Loan except as
provided in Section 2(d) and that Sequoia’s remedies with respect to any other
Defective Mortgage Loans shall be exercised with respect to the Originator of
such Defective Mortgage Loan as set forth in the Assignment, Assumption and
Recognition Agreement, dated as of March 1, 2011 (the “PHH AAR”), among RRAC,
Sequoia, Citibank, N.A., as trustee, and PHH Mortgage Corporation, or the
Assignment, Assumption and Recognition Agreement, dated as of March 1, 2011,
among RRAC, Sequoia, Citibank, N.A., as trustee, and First Republic Bank (the
“FRB AAR”), as applicable.

Section 4.    Intention of Parties.  The conveyance of the Mortgage Loans and
all other property hereunder by RRAC as contemplated hereby is absolute and is
intended by the parties to constitute a sale of the Mortgage Loans and such
other property by RRAC to Sequoia.  It is, further, not intended that such
conveyance be the grant of a security interest to secure a loan or other
obligation.  However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans and the other property described in Section 3(a) are
held to be the property of RRAC, or if for any other reason this Agreement is
held or deemed to create a security interest in the Mortgage Loans and such
other property, then this Agreement shall constitute a security agreement, and
the conveyance provided for in Section 3(a) shall be deemed to be a grant by
RRAC to Sequoia of, and RRAC hereby grants to Sequoia, to secure all of RRAC’s
obligations hereunder, a security interest in all of RRAC’s right, title and
interest, whether now owned or hereafter acquired, in and to (i) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, and the right to all
payments of principal and interest received on or with respect to the Mortgage
Loans after the Cut-off Date (other than Scheduled Payments due on or before
such date), and all such payments due after such date but received on or prior
to such date and intended by the related Mortgagors to be applied after such
date, (ii) all of RRAC’s right, title and interest, if any, in and to all
amounts from time to time credited to and the proceeds of any Custodial Accounts
or any Escrow Account established with respect to the Mortgage Loans, (iii) with
respect to the Mortgage Loans, to the extent set forth in the FRB AAR and the
PHH AAR, RRAC’s rights and obligations under the applicable Servicing Agreement
and all of RRAC’s rights under the Mortgage Loan Purchase and Sale Agreement,
(iv)  all of RRAC’s right, title and interest, if any, in REO Property and the
proceeds thereof, (v) all of RRAC’s rights under any Insurance Policies related
to the Mortgage Loans, (vi) RRAC’s security interest in any collateral pledged
to secure the Mortgage Loans, including the Mortgaged Properties, and (vii) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all Insurance
Proceeds, Liquidation Proceeds and condemnation awards.

RRAC and Sequoia shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement.  RRAC
shall arrange for filing any Uniform

 
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Commercial Code financing statements and continuation statements in connection
with such security interest.

Section 5.    Termination.
Notwithstanding any termination of this Agreement or the completion of all sales
contemplated hereby, the representations, warranties and agreements in Sections
1 and 2 hereof shall survive and remain in full force and effect.

Section 6.    Miscellaneous.

(a)           Amendments, Etc.  No rescission, modification, amendment,
supplement or change of this Agreement shall be valid or effective unless in
writing and signed by all of the parties to this Agreement.  No amendment of
this Agreement may modify or waive the representations, warranties and
agreements set forth in Sections 1 and 2 hereof.

(b)           Binding Upon Successors, Etc.  This Agreement shall bind and inure
to the benefit of and be enforceable by RRAC and Sequoia, and the respective
successors and assigns thereof.  The parties hereto acknowledge that Sequoia is
acquiring the Mortgage Loans for the purpose of selling, transferring,
assigning, setting over and otherwise conveying them to the Trustee, pursuant to
the Pooling and Servicing Agreement.  RRAC acknowledges and consents to the
assignment to the Trustee by Sequoia of all of Sequoia's rights against RRAC
hereunder in respect of the Mortgage Loans sold to Sequoia and that the
enforcement or exercise of any right or remedy against RRAC hereunder by the
Trustee or to the extent permitted under Section 2.04 of the Pooling and
Servicing Agreement shall have the same force and effect as if enforced and
exercised by Sequoia directly.

(c)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

(d)           Governing Law.  This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of
New York notwithstanding any law, rule, regulation, or other conflict-of-law
provisions to the contrary.
 
 
(e)           Headings.  The headings of the several parts of this Agreement are
inserted for convenience of reference and are not intended to be a part of or
affect the meaning or interpretation of this Agreement.

(f)           Definitions.  Capitalized terms not otherwise defined herein have
the meanings ascribed to such terms in the Pooling and Servicing Agreement as in
effect on the date of execution hereof.

 
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(g)           Nonpetition Covenant.  Until one year plus one day shall have
elapsed since the termination of the Pooling and Servicing Agreement in
accordance with its terms, RRAC shall not petition or otherwise invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against Sequoia under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of Sequoia or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of Sequoia.

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IN WITNESS WHEREOF, each party has caused this Mortgage Loan Purchase and Sale
Agreement to be executed by its duly authorized officer or officers as of the
day and year first above written.

 

 
REDWOOD RESIDENTIAL ACQUISITION CORPORATION
       
By:
     
Name:
     
Title:
                     
SEQUOIA RESIDENTIAL FUNDING, INC.
           
By:
     
Name:
     
Title:
   

 
 

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SCHEDULE A
MORTGAGE LOAN SCHEDULE
 
[Refer to Schedule A of Exhibit 10.1]

 
 

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