exv4w3



 






EXHIBIT 4.3




MASTER SERVICING AGREEMENT




Dated as of                                                              , 200_-_




among




SEQUOIA MORTGAGE TRUST 200_-_, Issuer




and




                                                            , Master Servicer




and




                                                            , Trustee




Relating to the Pledged Mortgages

Pledged as Collateral for the Issuer’s

Collateralized Mortgage Bonds,

in the Aggregate Initial

Principal Amount of $                    





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	1.

	 	DEFINED TERMS
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	MORTGAGE DOCUMENTS
	 	 	18	 
	 
	 	 	 	 	 	 
	(a)

	 	Trustee to Retain Possession of Documents	 	 	18	 
	 
	 	 	 	 	 	 
	(b)

	 	Trustee to Cooperate; Release of Trustee Mortgage Files	 	 	22	 
	 
	 	 	 	 	 	 
	(c)

	 	Documents, Records and Funds in Possession of Master Servicer to be Held for Trustee	 	 	22	 
	 
	 	 	 	 	 	 
	3.

	 	GENERAL DUTIES OF THE MASTER SERVICER
	 	 	25	 
	 
	 	 	 	 	 	 
	(a)

	 	Master Servicer to Service Pledged Mortgages	 	 	25	 
	 
	 	 	 	 	 	 
	(b)

	 	Subservicing; Enforcement of the Obligations of Servicers	 	 	26	 
	 
	 	 	 	 	 	 
	(c)

	 	Successor Servicers	 	 	27	 
	 
	 	 	 	 	 	 
	(d)

	 	Liability of the Master Servicer	 	 	27	 
	 
	 	 	 	 	 	 
	(e)

	 	No Contractual Relationship Between Servicers and the Trustee	 	 	28	 
	 
	 	 	 	 	 	 
	(f)

	 	Rights of the Issuer and the Trustee in Respect of the Master Servicer	 	 	28	 
	 
	 	 	 	 	 	 
	(g)

	 	Trustee to Act as Master Servicer	 	 	28	 
	 
	 	 	 	 	 	 
	(h)

	 	Collection of Pledged Mortgage Payments; Eligible Accounts; Servicing Accounts; Bond Account	 	 	28	 
	 
	 	 	 	 	 	 
	(i)

	 	Collection of Taxes, Assessments and Similar Items; Escrow Accounts	 	 	32	 
	 
	 	 	 	 	 	 
	(j)

	 	Access to Certain Documentation and Information Regarding the Pledged Mortgages	 	 	32	 
	 
	 	 	 	 	 	 
	(k)

	 	Permitted Withdrawals from the Bond Account	 	 	32	 
	 
	 	 	 	 	 	 
	(l)

	 	Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies	 	 	33	 
	 
	 	 	 	 	 	 
	(m)

	 	Enforcement of Due-On-Sale Clauses; Assumption Agreements	 	 	35	 
	 
	 	 	 	 	 	 
	(n)

	 	Realization Upon Defaulted Pledged Mortgages; Purchase of Certain Pledged Mortgages	 	 	36	 
	 
	 	 	 	 	 	 
	(o)

	 	Access to Certain Documentation	 	 	37	 
	 
	 	 	 	 	 	 
	(p)

	 	Master Servicer Annual Statement of Compliance	 	 	37	 
	 
	 	 	 	 	 	 
	(q)

	 	Master Servicer Assessments of Compliance and Attestation Reports	 	 	38	 
	 
	 	 	 	 	 	 
	(r)

	 	Errors and Omissions Insurance; Fidelity Bonds	 	 	39	 
	 
	 	 	 	 	 	 
	(s)

	 	Master Servicer Monthly Data	 	 	39	 






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	4.

	 	ADVANCES
	 	 	39	 
	 
	 	 	 	 	 	 
	5.

	 	SERVICING COMPENSATION AND EXPENSES
	 	 	39	 
	 
	 	 	 	 	 	 
	6.

	 	THE MASTER SERVICER
	 	 	40	 
	 
	 	 	 	 	 	 
	(a)

	 	Liabilities of the Master Servicer	 	 	40	 
	 
	 	 	 	 	 	 
	(b)

	 	Merger or Consolidation of the Master Servicer	 	 	40	 
	 
	 	 	 	 	 	 
	(c)

	 	Limitation on Liability of the Master Servicer and Others	 	 	41	 
	 
	 	 	 	 	 	 
	(d)

	 	Limitation on Resignation of the Master Servicer	 	 	41	 
	 
	 	 	 	 	 	 
	7.

	 	SERVICING DEFAULT; TERMINATION AND LIABILITIES
	 	 	41	 
	 
	 	 	 	 	 	 
	(a)

	 	Servicing Default	 	 	41	 
	 
	 	 	 	 	 	 
	(b)

	 	Trustee to Act; Appointment of Successor	 	 	43	 
	 
	 	 	 	 	 	 
	(c)

	 	Notification to Bondholders	 	 	43	 
	 
	 	 	 	 	 	 
	8.

	 	MISCELLANEOUS
	 	 	44	 
	 
	 	 	 	 	 	 
	(a)

	 	Term of Master Servicing Agreement	 	 	44	 
	 
	 	 	 	 	 	 
	(b)

	 	Assignment	 	 	44	 
	 
	 	 	 	 	 	 
	(c)

	 	Notices	 	 	44	 
	 
	 	 	 	 	 	 
	(d)

	 	Inspection and Audit Rights	 	 	44	 
	 
	 	 	 	 	 	 
	(e)

	 	Governing Law	 	 	45	 
	 
	 	 	 	 	 	 
	(f)

	 	Amendments	 	 	45	 
	 
	 	 	 	 	 	 
	(g)

	 	Severability	 	 	45	 
	 
	 	 	 	 	 	 
	(h)

	 	No Joint Venture	 	 	45	 
	 
	 	 	 	 	 	 
	(i)

	 	Execution in Counterparts	 	 	45	 
	 
	 	 	 	 	 	 
	(j)

	 	Limitation of Liability of [                    ]	 	 	45	 
	 
	 	 	 	 	 	 
	(k)

	 	Nonpetition Covenants	 	 	46	 
	 
	 	 	 	 	 	 
	SCHEDULE I SCHEDULE OF PLEDGED MORTGAGES	 	 	I-1	 
	 
	 	 	 	 	 	 
	SCHEDULE II REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER	 	II-1

	 
	 	 	 	 	 	 
	SCHEDULE III REPRESENTATIONS AND WARRANTIES AS TO THE PLEDGED MORTGAGE LOANS	 	III-1







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	SCHEDULE IV REPRESENTATIONS AND WARRANTIES OF THE ISSUER	 	IV-1

	 
	 	 	 	 	 	 
	EXHIBIT A FORM of INITIAL CERTIFICATION of TRUSTEE	 	 	A-1	 
	 
	 	 	 	 	 	 
	EXHIBIT B Form of FINAL CERTIFICATION of TRUSTEE	 	 	B-1	 
	 
	 	 	 	 	 	 
	EXHIBIT C REQUEST for RELEASE	 	 	C-1	 
	 
	 	 	 	 	 	 
	EXHIBIT D REQUEST for RELEASE of DOCUMENTS	 	 	D-1	 
	 
	 	 	 	 	 	 
	EXHIBIT E SERVICING CRITERIA	 	 	E-1	 






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MASTER SERVICING AGREEMENT




     THIS MASTER SERVICING AGREEMENT is made and entered into as of                                                              , 200_, by and
among Sequoia Mortgage Trust 200_-_, a statutory business trust formed under the laws of the State
of Delaware (the “Issuer”),                                                              , a                      corporation (the “Master
Servicer”) and                                                             , a                                                              corporation (in its
capacity as trustee under the Indenture referred to below, the “Trustee”).



PRELIMINARY STATEMENT




     The Issuer was formed for the purpose of issuing bonds secured by mortgage collateral. The
Issuer has entered into a trust indenture, dated as of                                                              , 200___(the “Indenture”),
between the Issuer and the Trustee, pursuant to which the Issuer intends to issue its
Collateralized Mortgage Bonds, in the aggregate initial principal amount of $                                         (the
“Bonds”).



     Pursuant to the Indenture, as security for the indebtedness represented by such Bonds, the
Issuer is and will be pledging to the Trustee, or granting the Trustee a security interest in,
among other things, certain Pledged Mortgages, its rights under this Agreement, the Bond Account,
the Distribution Account and certain Insurance Policies (as each such term is defined herein).



     The parties desire to enter into this Agreement to provide, among other things, for the
servicing of the Pledged Mortgages by the Master Servicer. The Master Servicer acknowledges that,
in order further to secure the Bonds, the Issuer is and will be granting to the Trustee a security
interest in, among other things, its rights under this Agreement, and the Master Servicer agrees
that all covenants and agreements made by the Master Servicer herein with respect to the Pledged
Mortgages shall also be for the benefit and security of the Trustee and Holders of the Bonds. For
its services hereunder, the Master Servicer will receive a Master Servicing Fee (as defined herein)
with respect to each Pledged Mortgage serviced hereunder.



     The Master Servicer has entered into Servicing Agreements (as defined herein) with Servicers
(as defined herein) to perform, as independent contractors, servicing functions for the Master
Servicer with respect to the Pledged Mortgages. For its services under a Servicing Agreement, each
Servicer will receive a Servicing Fee (as defined herein) with respect to each Pledged Mortgage
serviced by it thereunder.



     In addition, the Issuer will enter into a Management Agreement, dated as of the date hereof,
with Redwood Trust, Inc. (in such capacity, the “Manager”), pursuant to which the Manager will
conduct certain operations of the Issuer. Actions by or required of the Issuer hereunder may be
performed on its behalf by the Manager or any sub-manager appointed to act for the Issuer.




	 	1.	 	DEFINED TERMS.





     Except as otherwise specified or as the context may otherwise require, the following terms
have the respective meanings set forth below for all purposes of this Agreement, and the
definitions of such terms are
applicable to the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms:



     “ADDITIONAL SERVICER”: Each affiliate of a Servicer that Services any of the Mortgage
Loans and each Person who is not an affiliate of any Servicer, who Services 10% or more of the
Mortgage Loans.



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     “ADJUSTED NET MORTGAGE RATE” means, as to each Pledged Mortgage and at any time, the per annum
rate equal to the Mortgage Rate less the sum of the Master Servicing Fee Rate and the related
Servicing Fee Rate.



     [“ADJUSTMENT DATE” means, as to any Pledged Mortgage, the date on which the related Mortgage
Rate adjusts annually after a period of ten years following origination, in accordance with the
terms of the related Mortgage Note.]



     “ADVANCE” means the payment required to be made by the Master Servicer with respect to any
Payment Date pursuant to Section 4, the amount of any such payment being equal to the aggregate of
payments of principal and interest (net of the Master Servicing Fee and the applicable Servicing
Fee and net of any net income in the case of any REO Property) on the Pledged Mortgages that were
due on the related Due Date and not received as of the close of business on the related
Determination Date, less the aggregate amount of any such delinquent payments that the Master
Servicer has determined would constitute a Nonrecoverable Advance if advanced.



     “AGREEMENT” means this Master Servicing Agreement, as the same may be amended or supplemented
from time to time.



     “AMOUNT HELD FOR FUTURE DISTRIBUTION” means, as to any Payment Date, the aggregate amount held
in the Bond Account at the close of business on the related Determination Date on account of (i)
Principal Prepayments and Liquidation Proceeds received in the month of such Payment Date and (ii)
all Scheduled Payments due after the related Due Date.



     “APPRAISED VALUE” means (i) with respect to a Pledged Mortgage other than a Refinancing
Pledged Mortgage, the lesser of (a) the value of the Mortgaged Property based upon the appraisal
made at the time of the origination of such Pledged Mortgage and (b) the sales price of the
Mortgaged Property at the time of the origination of such Pledged Mortgage; or (ii) with respect to
a Refinancing Pledged Mortgage, the value of the Mortgaged Property based upon the appraisal made
at the time of the origination of such Refinancing Pledged Mortgage.



     “AVAILABLE FUNDS” means, as to any Payment Date, the sum of (i) all scheduled installments of
interest (net of the related Expense Fees) and principal due [on the Due Date in the month] in
which such Payment Date occurs and received prior to the related Determination Date, together with
any Advances in respect thereof; (ii) all Insurance Proceeds and all Liquidation Proceeds for the
[month] preceding the month of such Payment Date, net of unreimbursed expenses incurred in
connection with a liquidation or foreclosure and
unreimbursed Advances; (iii) all partial or full prepayments received during the related
Prepayment Period; and (iv) amounts received with respect to such Payment Date as the Substitution
Adjustment Amount or purchase price in respect to such Payment Date as the Substitution Adjustment
Amount or purchase price in respect of a Deleted Pledged Mortgage or a Pledged Mortgage purchased
by Redwood Trust [or by the Master Servicer] as of such Payment Date, reduced by amounts in
reimbursement for Advances previously made and other amounts as to which the applicable Servicer or
the Master Servicer is entitled to be reimbursed pursuant to the Master Servicing Agreement.



     “BANKRUPTCY CODE” means the United States Bankruptcy Reform Act of 1978, as amended.



     “BLANKET MORTGAGE” means the mortgage or mortgages encumbering the Cooperative Property.



     “BOND ACCOUNT” means, with respect to the Bonds, the separate Eligible Account created and
maintained by the Master Servicer pursuant to Section 3(h)(v) with a depository institution in the
name of the Master Servicer for the benefit of the Trustee on behalf of the Bondholders and
designated



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“                                                            in trust for the registered holders of
Sequoia Mortgage Trust 200_-___Collateralized Mortgage Bonds.”




     “BOND DISTRIBUTION AMOUNT” means, as to any Payment Date, the sum of (i) the Senior Interest
Payment Amount, (ii) the Senior Principal Payment Amount, (iii) the Class [B-1] Interest Payment
Amount, (iv) the Class [B-1] Principal Payment Amount, (v) the Class [B-2] Interest Payment Amount
and (vi) the Class [B-2] Principal Payment Amount.



     “BONDHOLDER” or “HOLDER” means the Person in whose name a Bond is registered in the Bond
Register (as defined in the Indenture).



     “BONDS” mean the Issuer’s Collateralized Mortgage Bonds.



     “BUSINESS DAY” means any day other than (i) a Saturday or a Sunday, or (ii) a day on which
banking institutions in the City of New York, New York, the State of California or the city in
which the Corporate Trust Office (as defined in the Indenture) of the Trustee is located are
authorized or obligated by law or executive order to be closed.



     “CERTIFICATE INTEREST PAYMENT AMOUNT” means, as to any Payment Date, one month’s interest
accrued during the related Interest Accrual Period at the Certificate Interest Rate on the Invested
Amount, subject to reduction pursuant to Section 3(h)(viii). The Certificate Interest Payment
Amount shall be calculated on the basis of a 360-day year of twelve 30-day months.



     “CERTIFICATE INTEREST RATE” means, for any Interest Accrual Period beginning prior to the
Interest Conversion Date                                         .



     “CERTIFICATE PAYING AGENT” has the meaning assigned thereto in the Deposit Trust Agreement.



     “CLASS [B-1] BOND INTEREST RATE” means, with respect to any Interest Accrual Period, the
annual rate at which interest accrues on the Subordinated Bonds as specified in such Bonds and in
Section 2.03(c) of the Indenture.



     “CLASS [B-1] INTEREST CARRYOVER SHORTFALL” means, the amount by which sum of (i) the interest
at the Class [B-1] Bond Interest Rate on the Class [B-1] Principal Amount and (ii) the interest at
the Class [B-1] Bond Interest Rate on any Class [B-1] Principal Carryover Shortfall, on each prior
Payment Date, exceeded the amount actually distributed as interest on such prior Payment Dates and
not subsequently distributed.



     “CLASS [B-1] INTEREST PAYMENT AMOUNT” means, as of any Payment Date, the sum of (i) interest
at the Class [B-1] Bond Interest Rate on the Class [B-1] Principal Amount, (ii) interest at the
Class [B-1] Bond Interest Rate on any Class [B-1] Principal Carryover Shortfall, (iii) the Class
[B-1] Interest Carryover Shortfall and (iv) interest at the Class [B-1] Bond Interest Rate on any
Class [B-1] Interest Carryover Shortfall.



     “CLASS [B-1] PERCENTAGE” means, as to any Payment Date, the percentage equivalent of a
fraction the numerator of which is the Class [B-1] Principal Amount immediately prior to such date
and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Class
[B-1] Principal Amount, (iii) the Class [B-2] Principal Amount and (iv) the Invested Amount, in
each case immediately prior to such date.



     “CLASS [B-1] PRINCIPAL AMOUNT” means, as of any Payment Date, the lesser of (i)_the aggregate
of the Stated Principal Balances of the Pledged Mortgages, less the Senior Class Principal



3









 







Amount
immediately prior to such date, and (ii) the Original Class [B-1] Principal
Amount reduced by all
amounts previously distributed to holders of the Class [B-1] bonds as payments of principal.



     “CLASS [B-1] PRINCIPAL CARRYOVER SHORTFALL” means, as to any Payment Date, the excess of (i)
the Original Class [B-1] Principal Amount reduced by all amounts previously distributed to holders
of the Class [B-1] Bonds as payments of principal or Class [B-1] Principal Carryover Shortfall,
over (ii) the Class [B-1] Principal Amount immediately prior to such date.



     “CLASS [B-1] PRINCIPAL PAYMENT AMOUNT” means, as to any Payment Date, the sum of (i) the Class
[B-1] Percentage of the sum of (a) the principal portion of the Schedules Payment due on each
Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each
Pledged Mortgage that was purchased by Redwood Trust or another person pursuant to the Mortgage
Loan Purchase Agreement [or by the Master Servicer in connection with any optional purchase by the
Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution
Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such
Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the
related Prepayment Period, (e) with respect to each Pledged Mortgage that became a Liquidated
Pledged Mortgage during the [calendar month] preceding the month of such Payment Date, the Stated
Principal Balance of such Pledged Mortgage and (f) all partial and full principal prepayments by
borrowers received during the related Prepayment Period and (ii) any Class [B-1] Principal
Carryover Shortfall.



     “CLASS [B-2] BOND INTEREST RATE” means, with respect to any Interest Accrual Period, the
annual rate at which interest accrues on the Subordinated Bonds as specified in such Bonds and in
Section 2.03(c) of the Indenture.



     “CLASS [B-2] INTEREST CARRYOVER SHORTFALL” means, the amount by which sum of (i) the interest
at the Class [B-2] Bond Interest Rate on the Class [B-2] Principal Amount and (ii) the interest at
the Class [B-2] Bond Interest Rate on any Class [B-2] Principal Carryover Shortfall, on each prior
Payment Date, exceeded the amount actually distributed as interest on such prior Payment Dates and
not subsequently distributed.



     “CLASS [B-2] INTEREST PAYMENT AMOUNT” means, as to any Payment Date, the sum of (i) interest
at the Class [B-2] Bond Interest Rate on the Class [B-2] Principal Amount, (ii) interest at the
Class [B-2] Bond Interest Rate on any Class [B-2] Principal Carryover Shortfall, (iii) the Class
[B-2] Interest Carryover Shortfall and (iv) interest at the Class [B-2] Bond Interest Rate on any
Class [B-2] Interest Carryover Shortfall.



     “CLASS [B-2] PERCENTAGE” means, as to any Payment Date, the percentage equivalent of a
fraction the numerator of which is the Class [B-2] Principal Amount immediately prior to such date
and the denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Class
[B-1] Principal Amount, (iii) the Class [B-2] Principal Amount and (iv) the Invested Amount, in
each case immediately prior to such date.



     “CLASS [B-2] PRINCIPAL AMOUNT” means, as of any Payment Date, the lesser of (i) the aggregate
of the Stated Principal Balances of the Pledged Mortgages, less the sum of the Senior Class
Principal Amount and the Class [B-2] Principal Amount, in each case immediately prior to such date,
and (i) the Original Class [B-2] Principal Amount reduced by all amounts previously distributed to
holders of the Class [B-2] Bonds as payments of principal.



     “CLASS [B-2] PRINCIPAL CARRYOVER SHORTFALL” means, as to any Payment Date, the excess of (i)
the Original Class [B-2] Principal Amount reduced by all amounts previously distributed to



4









 







holders
of the Class [B-2] Bonds as payments of principal or Class [B-2] Principal Carryover Shortfall,
over (ii) the Class [B-2] Principal Amount immediately prior to such date.



     “CLASS [B-2] PRINCIPAL PAYMENT AMOUNT” means, as to any Payment Date, the sum of (i) the Class
[B-2] Percentage of the sum of (a) the principal portion of the Schedules Payment due on each
Pledged Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each
Pledged Mortgage that was purchased by Redwood Trust or another person pursuant to the Mortgage
Loan Purchase Agreement [or by the Master Servicer in connection with any optional purchase by the
Master Servicer of a defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution
Adjustment Amount in connection with any Deleted Pledged Mortgage received with respect to such
Payment Date, (d) any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received during the
[calendar month] preceding the month of such Payment Date, (e) with respect to each Pledged
Mortgage that became a Liquidated Pledged Mortgage during the [calendar month] preceding the month
of such Payment Date, the Stated Principal Balance of such Pledged Mortgage and (f) all partial and
full principal prepayments by borrowers received during the related Prepayment Period and (ii) any
Class [B-2] Principal Carryover Shortfall.



     “CLASS PRINCIPAL AMOUNT” shall have the meaning ascribed thereto in the Indenture.



     “CLOSING DATE” means                                                              , 200_.



     “CODE” means the Internal Revenue Code of 1986, including any successor or amendatory
provisions.



     “COLLECTION ACCOUNT” means the Eligible Account or Accounts established and maintained by the
Master Servicer in accordance with Section 3(h)(iii).



     “COMPANY” means Sequoia Mortgage Funding Corporation, a Delaware corporation, which, as of the
Closing Date, owns all of the outstanding beneficial interests in the Issuer.



     “CONTROLLING CLASS” means the Class A-1 Bonds or, if the Class A-1 Bonds are no longer
Outstanding, the most senior Class of Subordinated Bonds then Outstanding.



     “COOPERATIVE CORPORATION” means the entity that holds title (fee or an acceptable leasehold
estate) to the real property and improvements constituting the Cooperative Property and which
governs the Cooperative Property, which Cooperative Corporation must qualify as a Cooperative
Housing Corporation under Section 216 of the Code.



     “COOPERATIVE LOAN” means any Pledged Mortgage secured by Cooperative Shares and a Proprietary
Lease.



     “COOPERATIVE PROPERTY” means the real property and improvements owned by the Cooperative
Corporation, including the allocation of individual dwelling units to the holders of the
Cooperative Shares of the Cooperative Corporation.



     “COOPERATIVE SHARES” means shares issued by a Cooperative Corporation.



     “COOPERATIVE UNIT” means a single family dwelling located in a Cooperative Property.



     “CUT-OFF DATE” means, with respect to the Pledged Mortgages,                                                              , 200_.



     “CUT-OFF DATE POOL PRINCIPAL BALANCE” means $                                        .



5









 





     “CUT-OFF DATE PRINCIPAL BALANCE” means, as to any Pledged Mortgage, the Stated Principal
Balance thereof as of the close of business on the Cut-off Date.



     “DEBT SERVICE REDUCTION” means, with respect to any Pledged Mortgage, a reduction by a court
of competent jurisdiction in a proceeding under the Bankruptcy Code in the Scheduled Payment for
such Pledged Mortgage which became final and non-appealable, except such a reduction resulting from
a Deficient Valuation or any reduction that results in a permanent forgiveness of principal.



     “DEBT SERVICE REDUCTION PLEDGED MORTGAGE” means any Pledged Mortgage that became the subject
of a Debt Service Reduction.



     “DEFECTIVE PLEDGED MORTGAGE” means any Pledged Mortgage required to be purchased by the Master
Servicer pursuant to Section 2(a) hereof.



     “DEFICIENT VALUATION” means, with respect to any Pledged Mortgage, a valuation by a court of
competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding
indebtedness under the Pledged Mortgage, or any reduction in the amount of principal to be paid in
connection with any Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is final and non-appealable in a
proceeding under the Bankruptcy Code.



     “DELETED PLEDGED MORTGAGE” has the meaning ascribed thereto in Section 5.



     “DEPOSIT TRUST AGREEMENT” means the Amended and Restated Deposit Trust Agreement, dated as of
                                                             , 200_, between the Company and the Owner Trustee, as such Deposit Trust Agreement may
be amended or supplemented from time to time.



     “DETERMINATION DATE” means, as to any Payment Date, the _th day of the [month] in which such
Payment Date occurs or, if such _th day is not a Business Day, the next succeeding Business Day;
provided, however, that if such next succeeding Business Day is less than two Business Days prior
to the related Payment Date, then the Determination Date shall be the next Business Day preceding
the _th day of such [month].



     “DISTRIBUTION ACCOUNT” means the Eligible Account or Accounts created and maintained with the
Trustee pursuant to Section 8.02 of the Indenture, to which shall be remitted from time to time
certain of the funds the Master Servicer has collected and deposited in the Bond Account with
respect to the Pledged Mortgages, as required hereunder and under the Indenture.



     “DISTRIBUTION ACCOUNT DEPOSIT DATE” means, as to any Payment Date, [12:30 p.m. Pacific time]
on the Business Day immediately preceding such Payment Date.



     “DUE DATE” means the first day of the month.



     “DUFF & PHELPS” means Duff & Phelps Credit Rating Company, or any successor thereto. If Duff
& Phelps is designated as a Rating Agency in the Indenture, for purposes of Section 8(c) the
address for notices to Duff & Phelps shall be Duff & Phelps Credit Rating Company, 55 E. Monroe
Street, 35th Floor, Chicago, Illinois 60603, Attention: MBS Monitoring, or such other
address as Duff & Phelps may hereafter furnish to the Issuer and the Master Servicer.



     “ELIGIBLE ACCOUNT” means any of (i) an account or accounts maintained with a federal or state
chartered depository institution or trust company the short-term unsecured debt obligations of
which (or, in the case of a depository institution or trust company that is the principal
subsidiary of a holding company, the debt obligations of such holding company, but only if Moody’s
is not a Rating Agency)



6









 







have the highest short-term ratings of each Rating Agency at the time any amounts are held on deposit therein, or (ii) an
account or accounts in a depository institution or trust company in which such accounts are insured
by the FDIC or the SAIF (to the limits established by the FDIC or the SAIF) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating Agency, the Bondholders have a claim with respect to
the funds in such account or a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing such funds that is superior to claims of
any other depositors or creditors of the depository institution or trust company in which such
account is maintained, or (iii) a trust account or accounts maintained with the trust department of
a federal or state chartered depository institution or trust company, acting in its fiduciary
capacity or (iv) any other account acceptable to each Rating Agency. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition, accounts maintained with
the Trustee.



     “ESCROW ACCOUNT” means the Eligible Account or Accounts established and maintained pursuant to
Section 3(i) hereof.



     “EXCESS PROCEEDS” means, with respect to any Liquidated Pledged Mortgage, the amount, if any,
by which the sum of any Liquidation Proceeds of such Pledged Mortgage received in the calendar
month in which such Pledged Mortgage became a Liquidated Pledged Mortgage, net of any amounts
previously reimbursed to the Master Servicer as Nonrecoverable Advance(s) with respect to such
Pledged Mortgage pursuant to Section 3(k)(iii), exceeds (a) the unpaid principal balance of such
Liquidated Pledged Mortgage as of the Due Date in the month in which such Pledged Mortgage became a
Liquidated Pledged Mortgage plus (b) accrued interest at the Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to Bondholders up to the Due Date
applicable to the Payment Date immediately following the calendar month during which such
liquidation occurred.



     “EXPENSE RATE” means, as to each Pledged Mortgage, the sum of the related Servicing Fee Rate,
the related Master Servicing Fee Rate and Trustee Fee Rate.



     “FDIC” means the Federal Deposit Insurance Corporation, or any successor thereto.



     “FHLMC” means the Federal Home Loan Mortgage Corporation, a corporate instrumentality of the
United States created and existing under Title III of the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.



     “FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989.



     “FITCH” means Fitch Investors Service, L.P., or any successor thereto. If Fitch is designated
as a Rating Agency in the Indenture, for purposes of Section 8(c) the address for notices to Fitch
shall be Fitch Investors Service, L.P., One State Street Plaza, New York, New York 10004,
Attention: Residential Mortgage Surveillance Group, or such other address as Fitch may hereafter
furnish to the Issuer and the Master Servicer.



     “FNMA” means the Federal National Mortgage Association, a federally chartered and privately
owned corporation organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.



     “INDENTURE” means the trust indenture, dated as of the date hereof, between the Issuer and the
Trustee, as such Indenture may be amended or supplemented from time to time in accordance with its
terms.



     “INDEPENDENT ACCOUNTANTS” shall have the meaning ascribed to such term under the Indenture.



7









 





     “INDEX” means, as to each Pledged Mortgage, the index from time to time in effect for the
adjustment of the Mortgage Rate set forth as such on the related Mortgage Note.



     “INSURANCE POLICY” means, with respect to any Pledged Mortgage, any insurance policy,
including all riders and endorsements thereto in effect, including any replacement policy or
policies for any Insurance Policies.



     “INSURANCE PROCEEDS” means proceeds paid by an insurer pursuant to any Insurance Policy, in
each case other than any amount included in such Insurance Proceeds in respect of Insured Expenses.



     “INSURED EXPENSES” means expenses covered by an Insurance Policy or any other insurance policy
with respect to the Pledged Mortgages.



     “INTEREST ACCRUAL PERIOD” means, with respect to each Class of Bonds, the Investor Certificate
and any Payment Date                                         .



     [“INTEREST CONVERSION DATE” means, as to the Pledged Mortgages, the date on which the first
Adjustment Date occurs.]



     “INVESTED AMOUNT” means, as of any Payment Date, the lesser of (i) the aggregate of the Stated
Principal Balances of the Pledged Mortgages, less the sum of (x) the Senior Class Principal Amount
(y) the Class [B-1] Principal Amount and (z) the Class [B-2] Principal Amount, in each case
immediately prior to such date, and (ii) the Original Invested Amount reduced by all amounts
previously distributed to the Holder of the Investor Certificate in reduction of the Invested
Amount.



     “INVESTED AMOUNT PAYMENT” means, as to any Payment Date, the sum of (i) the Investor
Percentage of the sum of (a) the principal portion of the Scheduled Payment due on each Pledged
Mortgage [on the related Due Date], (b) the principal portion of the purchase price of each Pledged
Mortgage that was purchased by the Redwood Trust or another Person pursuant to the Mortgage Loan
Purchase Agreement as of such Payment Date, (c) the Substitution Adjustment Amount in connection
with any Deleted Pledged Mortgage received with respect to such Payment Date and (d) any Insurance
Proceeds or Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages that are
not yet Liquidated Pledged Mortgages received during the [calendar month] preceding the month of
such Payment Date, and (e) all partial and full principal prepayments by borrowers received during
the related Prepayment Period, and (ii) with respect to each Pledged Mortgage that became a
Liquidated Pledged Mortgage during the [calendar month] preceding the month of such Payment Date,
the Liquidation Proceeds allocable to principal received with respect to such Pledged Mortgage,
after application of such amounts pursuant to clause (e) of the definition of Senior Principal
Payment Amount clause
(e) of the definition of Class [B-1] Principal Payment Amount and clause (e) of the definition
of Class [B-2] Principal Payment Amount.



     “INVESTOR CERTIFICATE” shall have the meaning ascribed thereto in the Deposit Trust Agreement.



     “INVESTOR PERCENTAGE” means, as of any Payment Date, the difference between 100% and the sum
of the Senior Percentage, the Class [B-1] Percentage and the Class [B-2] Percentage.



     “LIQUIDATED PLEDGED MORTGAGE” means with respect to any Payment Date, a defaulted Pledged
Mortgage (including any REO Property) which was liquidated in the [calendar month] preceding the
month of such Payment Date and as to which the Master Servicer has certified (in accordance with
this Agreement) that it has received all amounts it expects to receive in connection with the
liquidation of such Pledged Mortgage including the final disposition of an REO Property.



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     “LIQUIDATION PROCEEDS” means amounts, including Insurance Proceeds, received in connection
with the partial or complete liquidation of defaulted Pledged Mortgages, whether through trustee’s
sale, foreclosure sale or otherwise or amounts received in connection with any condemnation or
partial release of a Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Master Servicing Fees, Servicing Advances and
Advances.



     “LOAN-TO-VALUE RATIO” means, with respect to any Pledged Mortgage and as to any date of
determination, the fraction (expressed as a percentage) the numerator of which is the principal
balance of the related Pledged Mortgage at such date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.



     “MANAGEMENT AGREEMENT”: the agreement between the Trust and [          ], pursuant to
which the Trust has delegated certain administrative functions of the Trust to the Manager.



     “MANAGER”: the person acting in such capacity pursuant to the Management Agreement.



     “MAINTENANCE” means with respect to any Cooperative Unit, the rent paid by the Mortgagor to
the Cooperative Corporation pursuant to the Proprietary Lease.



     “MARGIN” means as to each Pledged Mortgage, the percentage amount set forth on the related
Mortgage Note added to the Index in calculating the Mortgage Rate thereon.



     “MASTER SERVICER” means                                         , a                     corporation, and its successors and
assigns, in its capacity as master servicer hereunder.



     “MASTER SERVICER ADVANCE DATE” means as to any Payment Date, [12:30 p.m. Pacific time] on the
Business Day immediately preceding such Payment Date.



     “MASTER SERVICING FEE” means as to each Pledged Mortgage and any Payment Date, an amount equal
to [one month’s] interest at the related Master Servicing Fee Rate on the Stated Principal Balance
of such
Pledged Mortgage or, in the event of any payment of interest which accompanies a Principal
Prepayment in Full made by the Mortgagor, interest at the Master Servicing Fee Rate on the Stated
Principal Balance of such Pledged Mortgage for the period covered by such payment of interest,
subject to reduction as provided in Section 5(a).



     “MASTER SERVICING FEE RATE” means with respect to each Pledged Mortgage,                     % per annum.



     “MAXIMUM RATE” means as to any Pledged Mortgage, the maximum rate set forth on the related
Mortgage Note at which interest can accrue on such Pledged Mortgage.



     “MINIMUM RATE” means as to any Pledged Mortgage, the minimum rate set forth on the related
Mortgage Note at which interest can accrue on such Pledged Mortgage.



     “MOODY’S” means Moody’s Investors Service, Inc., or any successor thereto. If Moody’s is
designated as a Rating Agency in the Indenture, for purposes of Section 8(c) the address for
notices to Moody’s shall be Moody’s Investors Service, Inc., 99 Church Street, New York, New York
10007, Attention: [Residential Pass-Through Monitoring], or such other address as Moody’s may
hereafter furnish to the Issuer and the Master Servicer.



     “MORTGAGE” means the mortgage, deed of trust or other instrument creating a first lien on an
estate in fee simple or leasehold interest in real property securing a Mortgage Note.



9









 





     “MORTGAGE DOCUMENTS” mean the mortgage documents listed in Section 2(a)(i) pertaining to a
particular Pledged Mortgage and any additional documents delivered to the Trustee to be added to
the Mortgage Documents pursuant to this Agreement.



     “MORTGAGE NOTE” means the original executed note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Pledged Mortgage.



     “MORTGAGE RATE” means the annual rate of interest borne by a Mortgage Note from time to time.



     “MORTGAGED PROPERTY” means the underlying property securing a Pledged Mortgage, which, with
respect to a Cooperative Loan, is the related Cooperative Shares and Proprietary Lease.



     “MORTGAGOR” means the obligor(s) on a Mortgage Note.



     “NET INTEREST SHORTFALL” means, as to any Payment Date, the amount by which the sum of (i) the
amount of interest which would otherwise have been received with respect to any Pledged Mortgage
that was the subject of a Relief Act Reduction and (ii) any Prepayment Interest Shortfalls, in each
case during the calendar month preceding the month of such Payment Date, exceeds the sum of (i) the
Master Servicing Fee for such period and (ii) the Certificate Interest Payment Amount, the Invested
Amount Payment and the amounts otherwise payable on such Payment Date to the holder of the Investor
Certificate.



     “NET MORTGAGE RATE” means, as to any Pledged Mortgage and Payment Date, the related Mortgage
Rate as of the Due Date in the month preceding the month of such Payment Date reduced by the
related Expense Rate.



     “NONRECOVERABLE ADVANCE” means any portion of an Advance or Servicer Advance previously made
or proposed to be made by the Master Servicer or the related Servicer, as the case may be, that, in
the good faith judgment of the Master Servicer or such Servicer, will not be ultimately recoverable
by the Master Servicer from the related Mortgagor, related Liquidation Proceeds or otherwise.



     “OFFICER’S CERTIFICATE” means a certificate (i) signed by the Chairman of the Board, the Vice
Chairman of the Board, the President, a Managing Director, a Vice President (however denominated),
an Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of the Master Servicer, or (ii) if provided for in this Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the Trustee as required by this
Agreement.



     “OPINION OF COUNSEL” means a written opinion of counsel, who may be counsel for the Master
Servicer, including, in-house counsel, reasonably acceptable to the Trustee.



     “ORIGINAL CLASS [B-1] PRINCIPAL AMOUNT” means $                    .



     “ORIGINAL CLASS [B-2] PRINCIPAL AMOUNT” means $                    .



     “ORIGINAL INVESTED AMOUNT” means $                    .



     “ORIGINAL PLEDGED MORTGAGE” means the Pledged Mortgage refinanced in connection with the
origination of a Refinancing Pledged Mortgage.



     “ORIGINAL SENIOR CLASS PRINCIPAL AMOUNT” means $                    .



10









 





     “ORIGINAL SUBORDINATION AMOUNT” means the sum of the Original Class [B-1] Principal Amount the
Original Class [B-2] Principal Amount and the Original Invested Amount.



     “OTS” means the Office of Thrift Supervision.



     “OUTSTANDING” shall have the meaning ascribed thereto in the Indenture.



     “OUTSTANDING PLEDGED MORTGAGE” means, as of any Due Date, a Pledged Mortgage with a Stated
Principal Balance greater than zero which was not the subject of a Principal Prepayment in Full
prior to such Due Date and which did not become a Liquidated Pledged Mortgage prior to such Due
Date.



     “OWNER TRUSTEE” means                                         , a Delaware banking corporation, not in its
individual capacity but solely as Owner Trustee under the Deposit Trust Agreement, until a
successor Person shall have become the Owner Trustee pursuant to the applicable provisions of the
Deposit Trust Agreement, and thereafter “Owner Trustee” shall mean such successor Person.



     “PAYMENT DATE” means, with respect to the Bonds and the Investor Certificate, the _th day of
each [calendar month] after the initial issuance of the Bonds and the Investor Certificate or, if
such _th day is not a Business Day, the next succeeding Business Day, commencing in                                         
200_.



     [“PERIODIC RATE CAP” means, as to any Pledged Mortgage and any Adjustment Date, the maximum
percentage increase or decrease to the related Mortgage Rate on any such Adjustment Date, as
specified in the related Mortgage Note.]



     “PERMITTED INVESTMENTS” means, at the time, any one or more of the following obligations and
securities.




	 	(i)	 	obligations of the United States or any agency thereof, provided such
obligations are backed by the full faith and credit of the United States;
	 
	 	(ii)	 	general obligations of or obligations guaranteed by any state of the United
States or the District of Columbia receiving the highest long-term debt rating of each
Rating Agency, or such lower rating which will not result in a change in the rating
assigned to the Bonds by each Rating Agency;
	 
	 	(iii)	 	commercial paper or finance company paper which is then receiving the highest
commercial or finance company paper rating of each Rating Agency, or such lower rating
as will not result in a change in the rating assigned to the Bonds by each Rating
Agency;
	 
	 	(iv)	 	certificates of deposit, demand or time deposits, or bankers’ acceptances
issued by any depository institution or trust company incorporated under the laws of
the United States or of any state thereof and subject to supervision and examination by
federal and/or state banking authorities, provided that the commercial paper and/or
long-term unsecured debt obligations of such depository institution or trust company
(or in the case of the principal depository institution in a holding company system,
the commercial paper or long-term unsecured debt obligations of such holding company,
but only if Moody’s Investors Service, Inc. (“Moody’s”) is a Rating Agency) are then
rated one of the two highest long-term and the highest short-term ratings of each
Rating Agency for such securities, or such lower ratings as will not result in a change
in the rating assigned to the Bonds by each Rating Agency;




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	 	(v)	 	demand or time deposits or certificates of deposit issued by any bank or trust
company or savings institution by any bank, insurance company or other corporation
containing, at the time of issuance of such agreements, such terms and conditions as
will not result in a change in the rating then assigned to the Bonds by each Rating
Agency;
	 
	 	(vi)	 	guaranteed reinvestment agreements issued by any bank, insurance company or
other corporation containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in a change in the rating then assigned to the
Bonds by each Rating Agency;
	 
	 	(vii)	 	repurchase obligations with respect to any security described in clauses (i)
and (ii) above, in either case entered into with a depository institution or trust
company (acting as principal) described in clause (iv) above;
	 
	 	(viii)	 	securities (other than stripped bonds, stripped coupons or instruments sold at a
purchase price in excess of 115% of the face amount thereof) bearing interest or sold
at a discount issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment, have one of the two
highest ratings of each Rating Agency (except if the Rating Agency is Moody’s, such
rating shall be the highest commercial paper rating of Moody’s for any such
securities), or such lower rating as will not result in a change in the rating then
assigned to the Bonds by each Rating Agency, as evidenced by a signed writing delivered
by each such Rating Agency;
	 
	 	(ix)	 	interests in any money market fund which at the date of acquisition of the
interests in such fund and throughout the time such interests are held in such fund has
the highest applicable rating by each applicable Rating Agency or such lower rating as
will not result in a change in the rating then assigned to the Bonds by each Rating
Agency;
	 
	 	(x)	 	short term investment funds sponsored by any trust company or national banking
association incorporated under the laws of the United States or any state thereof which
on the date of acquisition has been rated by each applicable Rating Agency in their
respective highest applicable rating category or such lower rating as will not result
in a change assigned to the Bonds by each Rating Agency; and
	 
	 	(xi)	 	such other investments having a specified stated maturity and bearing interest
or sold at a discount acceptable to each applicable Rating Agency as will not result in
a change in the rating then assigned to the Bonds by each Rating Agency, as evidenced
by a signed writing delivered by each Rating Agency;




provided, that no such instrument shall be a Permitted Investment if (i) such instrument evidences
the right to receive interest only payments with respect to the obligations underlying such
instrument or (ii) such instrument would require the Issuer to register as an investment company
under the Investment Company Act of 1940, as amended.




     “PERSON” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government, or any agency or political
subdivision thereof.



     “PLEDGED MORTGAGE” means such of the mortgage loans granted by the Issuer to the Trustee under
the Indenture as security for the Bonds, as from time to time are held as part of the Trust Estate
(including any REO Property), the mortgage loans so held being identified in the Schedule of
Pledged Mortgages, notwithstanding foreclosure or other acquisition of title of the related
Mortgaged Property.



12









 





     “POOL STATED PRINCIPAL BALANCE” means, as to any Payment Date, the aggregate of the Stated
Principal Balances of the Pledged Mortgages which were Outstanding Pledged Mortgages on the Due
Date in the month preceding the month of such Payment Date.



     “PREPAYMENT INTEREST SHORTFALL” means, as to any Payment Date, Pledged Mortgage and Principal
Prepayment, the amount, if any, by which one month’s interest at the related Mortgage Rate on such
Principal Prepayment exceeds the amount of interest paid in connection with such Principal
Prepayment.



     “PREPAYMENT PERIOD” means, as to any Payment Date, the calendar month preceding the month of
such Payment Date.



     “PRIMARY INSURANCE POLICY” means each policy of primary mortgage guaranty insurance or any
replacement policy therefor with respect to any Pledged Mortgage.



     “PRINCIPAL PREPAYMENT” means any payment of principal by a Mortgagor on a Pledged Mortgage
that is received in advance of its scheduled Due Date and is not accompanied by an amount
representing scheduled interest due on any date or dates in any month or months subsequent to the
month of prepayment. Partial Principal Prepayments shall be applied by the Master Servicer in
accordance with the terms of the related Mortgage Note.



     “PRINCIPAL PREPAYMENT IN FULL” means any Principal Prepayment made by a Mortgagor of the
entire principal balance of a Pledged Mortgage.



     “PROPRIETARY LEASE” means, with respect to any Cooperative Unit, a lease or occupancy
agreement between a Cooperative Corporation and a holder of related Cooperative Shares.



     “PROSPECTUS SUPPLEMENT” means the Prospectus Supplement dated                                         , 200___relating to
the Bonds.



     “PUD” means Planned Unit Development.



     “PURCHASE PRICE” means, with respect to any Pledged Mortgage required to be purchased by the
Master Servicer pursuant to Section 2(a)(ii) or 2(d)(iv) or purchased at the option of the Master
Servicer pursuant to Section 3(n), an amount equal to the sum of (i) 100% of the unpaid principal
balance of the Pledged Mortgage on the date of such purchase, and (ii) accrued interest thereon at
the applicable Mortgage Rate (or at the applicable Adjusted Net Mortgage Rate if the purchaser is
the Master Servicer) from the date through which interest was last paid by the Mortgagor to the Due
Date in the month in which the Purchase Price is to be distributed to Bondholders and the holder of
the Investor Certificate.



     “QUALIFIED INSURER” means a mortgage guaranty insurance company duly qualified as such under
the laws of the state of its principal place of business and each state having jurisdiction over
such insurer in connection with the insurance policy issued by such insurer, duly authorized and
licensed in such states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a FNMA- or
FHLMC-approved mortgage insurer or having a claims
paying ability rating of at least “AA” or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a Pledged Mortgage must
have at least as high a claims paying ability rating as the insurer it replaces had on the Closing
Date.



     “REGULATION AB” Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarifications
and interpretations as have been provided by the Commission in the adopting release (Asset-Backed



13









 







Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff from time to time.



     “RATING AGENCY” shall mean each of the Rating Agencies specified in the Indenture. If either
such organization or a successor is no longer in existence, “Rating Agency” shall be such
nationally recognized statistical rating organization, or other comparable Person, as is designated
by the Issuer, notice of which designation shall be given to the Trustee. References herein to a
given rating or rating category of a Rating Agency shall mean such rating category without giving
effect to any modifiers.



     “REALIZED LOSS” means, with respect to each Liquidated Pledged Mortgage, an amount (not less
than zero or more than the Stated Principal Balance of the Pledged Mortgage) as of the date of such
liquidation, equal to (i) the Stated Principal Balance of the Liquidated Pledged Mortgage as of the
date of such liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to Bondholders up to the Due Date in
the month in which Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Pledged Mortgage from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation occurred, to the extent
applied as recoveries of interest at the Adjusted Net Mortgage Rate and to principal of the
Liquidated Pledged Mortgage. With respect to each Pledged Mortgage which has become the subject of
a Deficient Valuation, if the principal amount due under the related Mortgage Note has been
reduced, the difference between the principal balance of the Pledged Mortgage outstanding
immediately prior to such Deficient Valuation and the principal balance of the Pledged Mortgage as
reduced by the Deficient Valuation. With respect to each Pledged Mortgage which has become the
subject of a Debt Service Reduction and any Payment Date, the amount, if any, by which the
principal portion of the related Scheduled Payment has been reduced.



     “RECOGNITION AGREEMENT” means, with respect to any Cooperative Loan, an agreement between the
Cooperative Corporation and the originator of such Pledged Mortgage which establishes the rights of
such originator in the Cooperative Property.



     “REFINANCING PLEDGED MORTGAGE” means any Pledged Mortgage originated in connection with the
refinancing of an existing mortgage loan.



     “RELEVANT SERVICING CRITERIA”: The Servicing Criteria applicable to each party, as set forth
on Exhibit [ ] attached hereto. Multiple parties can have responsibility for the same Relevant
Servicing Criteria. With respect to a Servicing Function Participant engaged by the Master
Servicer, the Trustee or each Servicer, the term “Relevant Servicing Criteria” may refer to a
portion of the Relevant Servicing Criteria applicable to such parties.



     “RELIEF ACT” means the Soldiers’ and Sailors’ Civil Relief Act of 1940, as amended.



     “RELIEF ACT REDUCTIONS” means, with respect to any Payment Date and any Pledged Mortgage as to
which there has been a reduction in the amount of interest collectible thereon for the most
recently ended calendar month as a result of the application of the Relief Act, the amount, if any,
by which (i) interest collectible on such Pledged Mortgage for the most recently ended calendar
month is less than (ii) interest accrued thereon for such month pursuant to the Mortgage Note.



     “REO PROPERTY” means a Mortgaged Property acquired by the Trust Estate through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Pledged Mortgage.



     “REPLACEMENT PLEDGED MORTGAGE” means a Pledged Mortgage substituted by the Master Servicer for
a Deleted Pledged Mortgage which must, on the date of such substitution, as confirmed in a Request
for Release, substantially in the form of Exhibit C, (i) have a principal balance, after deduction
of the principal portion of the Scheduled Payment due in the month of substitution, not in



14









 







excess
of, and not more than                     % less than, the Stated Principal Balance of the Deleted Pledged Mortgage;
(ii) be accruing interest at a rate no lower than and not more than                     % per annum higher than, that
of the Deleted Pledged Mortgage; (iii) have a Loan-to-Value Ratio no higher than that of the
Deleted Pledged Mortgage; (iv) have a Mortgage Rate not lower than, and not more than                     % per
annum higher than that of the Deleted Pledged Mortgage; (v) have a remaining term to maturity no
greater than (and not more than                      less than that of the Deleted Pledged Mortgage; and (vi)
comply with each representation and warranty set forth in Section 2(d)(ii).



     “REQUEST FOR RELEASE” means the Request for Release submitted by the Master Servicer to the
Trustee, substantially in the form of Exhibits C and D, as appropriate.



     “REQUIRED INSURANCE POLICY” means with respect to any Pledged Mortgage, any insurance policy
that is required to be maintained from time to time under this Agreement.



     “SAIF” means the Savings Association Insurance Fund, or any successor thereto.



     “S&P” means Standard & Poor’s Ratings Group, a division of McGraw-Hill Inc. If S&P is
designated as a Rating Agency in the Indenture, for purposes of Section 8(c) the address for
notices to S&P shall be Standard & Poor’s Ratings Group, 26 Broadway, 15th Floor, New York, New
York 10004, Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Issuer and the Master Servicer.



     “SCHEDULE OF PLEDGED MORTGAGES” means the schedule attached hereto as Schedule A listing the
Pledged Mortgages to be serviced by the Master Servicer pursuant to this Agreement (as from time to
time amended by the Master Servicer to reflect the addition of Replacement Pledged Mortgages and
the deletion of Deleted Pledged Mortgages pursuant to the provisions of this Agreement and Section
8.04 of the Indenture) pledged to the Trustee as part of the Trust Estate and from time to time
subject to this Agreement and the Indenture, setting forth the following information with respect
to each Pledged Mortgage:




	 	(i)	 	the loan number;
	 
	 	(ii)	 	the Mortgagor’s name and the street address of the Mortgaged Property,
including the zip code;
	 
	 	(iii)	 	the maturity date;
	 
	 	(iv)	 	the original principal balance;
	 
	 	(v)	 	the Cut-off Date Principal Balance;
	 
	 	(vi)	 	the first payment date of the Pledged Mortgage;
	 
	 	(vii)	 	the Scheduled Payment in effect as of the Cut-off Date;
	 
	 	(viii)	 	the Loan-to-Value Ratio at origination;
	 
	 	(ix)	 	a code indicating whether the residential dwelling at the time of origination
was represented to be owner-occupied;
	 
	 	(x)	 	a code indicating whether the residential dwelling is either (a) a detached
single family dwelling, (b) a dwelling in a PUD, (c) a condominium unit, (d) a two- to
four-unit residential property or (e) a Cooperative Unit;




15









 






	 	(xi)	 	the Mortgage Rate in effect as of the Cut-off Date;
	 
	 	(xii)	 	the Master Servicing Fee Rate;
	 
	 	(xiii)	 	the Maximum Rate and the Minimum Rate;
	 
	 	(xiv)	 	the Periodic Rate Cap;
	 
	 	(xv)	 	the Adjustment Date;
	 
	 	(xvi)	 	the Margin;
	 
	 	(xvii)	 	the purpose for the Pledged Mortgage; and
	 
	 	(xviii)	 	the type of documentation program pursuant to which the Pledged Mortgage was originated.




Such schedule shall also set forth (a) the total of the amounts described under (v) and (vii) above
and (b) the weighted average, weighted on the basis of the Cut-off Date Principal Balance, of the
amounts described under (xi) and (xii) above, in each case for all of the Pledged Mortgages.




     “SCHEDULED PAYMENT” means the scheduled [monthly payment] on a Pledged Mortgage due on any Due
Date allocable to principal and/or interest on such Pledged Mortgage which, unless otherwise
specified herein, shall give effect to any related Debt Service Reduction and any Deficient
Valuation that affects the amount of the monthly payment due on such Pledged Mortgage.



     “SECURITY AGREEMENT” means with respect to any Cooperative Loan, the agreement between the
owner of the related Cooperative Shares and the originator of the related Mortgage Note, which
defines the terms of the security interest in such Cooperative Shares and the related Proprietary
Lease.



     “SERVICING CRITERIA”: The criteria set forth in paragraph (d) of Item 1122 of Regulation AB,
as such may be amended from time to time.



     “SERVICING FUNCTION PARTICIPANT”:Any Subservicer or Subcontractor, other than each
Servicer, the Master Servicer and the Trustee, that is participating in the servicing function
within the meaning of Regulation AB, unless such Person’s activities relate only to 5% or less of
the Mortgage Loans.



     “SENIOR BOND INTEREST RATE” means, with respect to any Interest Accrual Period, the
annual rate at which interest accrues on the Senior Bonds as specified in such Bonds in Section
2.03(c) of the Indenture.



     “SENIOR BONDS” means the Class A-1 Bonds.



     “SENIOR CLASS PRINCIPAL AMOUNT” means, as of any Payment Date, the Original Senior Class
Principal Amount reduced by all amounts previously distributed to Holders of the Senior Bonds as
payments of principal.



     “SENIOR INTEREST PAYMENT AMOUNT” means, as to any Payment Date, the sum of (i) [one month’s]
interest accrued during the related Interest Accrual Period at the Senior Bond Interest Rate on the
Senior Class Principal Amount, subject to reduction pursuant to Section 5 and (ii) the sum of the
amounts, if any, by which the amounts described in clause (i) above on each prior Payment Date



16









 







exceeded the amount actually distributed as interest on such prior Payment Dates and not
subsequently distributed.



     “SENIOR PERCENTAGE” means, as to any Payment Date, the percentage equivalent of a fraction the
numerator of which is the Senior Class Principal Amount immediately prior to such date and the
denominator of which is the sum of (i) the Senior Class Principal Amount, (ii) the Class [B-1]
Principal Amount (iii) the Class [B-2] Principal Amount and (iv) the Invested Amount, in each case
immediately prior to such date.



     “SENIOR PRINCIPAL PAYMENT AMOUNT” means, as to any Payment Date, the Senior Percentage of the
sum of (a) the principal portion of each Scheduled Payment due on each Pledged Mortgage [on the
related Due Date], (b) the principal portion of the purchase price of each Pledged Mortgage that
was purchased by Redwood Trust or another Person pursuant to the Mortgage Loan Purchase Agreement
[or any optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such
Payment Date, (c) the Substitution Adjustment Amount in connection with any Deleted Pledged
Mortgages received with respect to such Payment Date (d) any Insurance Proceeds or Liquidation
Proceeds allocable to recoveries of principal of Pledged Mortgages that are not yet Liquidated
Pledged Mortgages received during the [calendar month] preceding the month of such Payment Date,
(e) with respect to any Pledged Mortgages that became a Liquidated Pledged Mortgages during the
[calendar month] preceding the month of such Payment Date, the Stated Principal Balance of such
Pledged Mortgage and (f) all partial and full principal prepayments by borrowers received during
the related Prepayment Period.



     “SEQUOIA” means Sequoia Mortgage Funding Corporation, a Delaware corporation, and its
successors and assigns.



     “SERVICER” means any person with which the Master Servicer has entered into a Servicing
Agreement for the servicing of all or a portion of the Pledged Mortgages pursuant to Section 3(b).



     “SERVICER ADVANCE” means the meaning ascribed to such term in Section 3(h)(iv).



     “SERVICING ACCOUNT” means the separate Eligible Account or Accounts created and maintained
pursuant to Section 3(h)(ii).



     “SERVICING ADVANCES” means all customary, reasonable and necessary “out of pocket” costs and
expenses incurred in the performance by the Master Servicer of its servicing obligations,
including, but not limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any expenses reimbursable to the Master Servicer pursuant to Section 3(n)
and any enforcement or judicial proceedings, including foreclosures, (iii) the management and
liquidation of any REO Property and (iv) compliance with the obligations under Section 3(l).



     “SERVICING AGREEMENT” means any agreement between the Master Servicer and the related Servicer
relating to servicing and/or administration of certain Pledged Mortgages as provided in Section
3(b).



     “SERVICING DEFAULT” means a servicing default as described under Section 7(a) of this
Agreement.



     “SERVICING FEE” means, as to each Pledged Mortgage and any Payment Date, an amount equal to
one month’s interest at the applicable Servicing Fee Rate on the Stated Principal Balance of such
Pledged Mortgage.



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     “SERVICING FEE RATE” means, with respect to any Pledged Mortgage, the per annum rate set forth
in the Schedule of Pledged Mortgages for such Pledged Mortgage.



     “SERVICING OFFICER” means any officer of the Master Servicer involved in, or responsible for,
the administration and servicing of the Pledged Mortgage whose name and facsimile signature appear
on a list of servicing officers furnished to the Trustee by the Master Servicer on the Closing Date
pursuant to this Agreement, as such list may from time to time be amended.



     “STATED PRINCIPAL BALANCE” means, as to any Pledged Mortgage and Due Date, the unpaid
principal balance of such Pledged Mortgage as of such Due Date as specified in the amortization
schedule at the time relating thereto (before any adjustment to such amortization schedule by
reason of any moratorium or similar waiver or grace period) after giving effect to any previous
partial Principal Prepayments and Liquidation Proceeds allocable to principal (other than with
respect to any Liquidated Pledged Mortgage) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor.



     “SUBCONTRACTOR”: Any vendor, subcontractor or other Person that is not responsible
for the overall servicing of Mortgage Loans but performs one or more discrete functions identified
in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority of any Servicer
(or a Subservicer of any Servicer), the Master Servicer or the Trustee.



     “SUBORDINATED BONDS” means the Class [B-1] Bonds and the Class [B-2] Bonds.



     “SUBSERVICER”: Any Person that (i) services Mortgage Loans on behalf of any Servicer, and
(ii) is responsible for the performance (whether directly or through sub-servicers or
Subcontractors) of Servicing functions required to be performed under this Agreement, any related
Servicing Agreement or any sub-servicing agreement that are identified in Item 1122(d) of
Regulation AB. “SUBSTITUTION ADJUSTMENT AMOUNT” has the meaning ascribed to such term pursuant to
Section 2(d)(iv).



     “TRUST”: Sequoia Mortgage Trust 200_-_, a trust established by a deposit trust agreement
between the depositor and [     ], as owner trustee.



     “TRUST ESTATE” shall have the meaning ascribed to such term in the Indenture.



     “TRUSTEE FEE” means, as to any Payment Date, the fee payable to the Trustee pursuant to
Section 6.07(1) of the Indenture, in an amount equal to one-twelfth of the Trustee Fee Rate
multiplied by the Pool Stated Principal Balance with respect to such Payment Date.



     “TRUSTEE FEE RATE” means, with respect to each Pledged Mortgage, the per annum rate agreed
upon in writing on or prior to the Closing Date by the Trustee and the Issuer.



     “TRUSTEE MORTGAGE FILE” means, with respect to each Pledged Mortgage, the original documents
and instruments relating thereto to be retained in the custody and possession of the Trustee, as
set forth and enumerated in Section 2(a) of this Agreement.



     “WITHDRAWAL DATE” means the ___th day of each month, or if such day is not a Business Day, the
next preceding Business Day.




	 	2.	 	MORTGAGE DOCUMENTS






	 	(a)	 	Trustee to Retain Possession of Documents.




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          (i) Concurrently with the execution and delivery hereof, the Issuer has pledged, transferred
and assigned to the Trustee for the benefit of the Bondholders, as collateral for the payment of
principal and interest on the Bonds, all right, title and interest of the Issuer in and to the
Trust Estate for the Bonds, including the Pledged Mortgages. Prior to or contemporaneous with the
execution of this Agreement, or within the applicable time periods specified below, the Issuer
shall have delivered or caused to be delivered to the Trustee, or its custodian, with respect to
each Pledged Mortgage all originals of the Mortgage Documents and any other instruments relating
thereto specified below, which shall be referred to in this Agreement as the “Trustee Mortgage
File” relating to such Pledged Mortgage:




               (A) the original Mortgage Note, endorsed by manual or facsimile signature
in blank in the following form: “Pay to the order of
                                                             without recourse”, with all intervening
endorsements showing a complete chain of endorsement from the originator to
the Person endorsing it to the Trustee (each such endorsement being sufficient
to transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note);




               (B) except as provided below, the original recorded Mortgage or a copy of
such Mortgage certified by the Master Servicer as being a true and complete
copy of the Mortgage;




               (C) a duly executed assignment of the Mortgage (which may be included in
a blanket assignment or assignments), together with, except as provided below,
all interim recorded assignments of such mortgage (each such assignment, when
duly and validly completed, to be in recordable form and sufficient to effect
the assignment of transfer to the assignee thereof, under the Mortgage to
which the relates); provided that, if the related Mortgage has not returned
from the applicable public recording office, such assignment of the Mortgage
may exclude the information to be provided by the recording office;




               (D) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any;




               (E) except as provided below, the original or duplicate original lender’s
title policy and all riders thereto; and




               (F) In the case of a Cooperative Loan, the originals of the following
documents or instruments:




                  (a) The Cooperative Shares, together with a stock power in blank;




                  (b) The executed Security Agreement;




                  (c) The executed Proprietary Lease;




                  (d) The executed Recognition Agreement;




                  (e) The executed assignment of Recognition Agreement;




                  (f) The executed UCC-1 financing statement with evidence of
recording thereon which have been filed in all places required to
perfect the Trustee’s and the Bondholder’s interest in the Cooperative
Shares and the Proprietary Lease; and



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                  (g) Executed UCC-3 financing statements or other appropriate UCC
financing statements required by state law, evidencing a complete and
unbroken line from the mortgagee to the Trustee with evidence of
recording thereon (or in a form suitable for recordation).



     In the event that in connection with any Pledged Mortgage the Issuer cannot deliver (i) the
original recorded Mortgage, (ii) all interim recorded assignments or (iii) the lender’s title
policy (together with all riders thereto) satisfying the requirements of clause (B), (C) or (E)
above, respectively, concurrently with the execution and delivery hereof because such document or
documents have not been returned from the applicable public recording office in the case of clause
(B) or (C) above, or because the title policy has not been delivered to either the Master Servicer
or the Issuer by the applicable title insurer in the case of clause (E) above, the Issuer shall
promptly deliver to the Trustee, in the case of clause (B) or (C) above, such original Mortgage or
such interim assignment, as the case may be, with evidence of recording indicated thereon upon
receipt thereof from the public recording office, or a copy thereof, certified, if appropriate, by
the relevant recording office, but in no event shall any such delivery of the original Pledged
Mortgage and each such interim assignment or a copy thereof, certified, if appropriate, by the
relevant recording office, be made later than one year following the Closing Date, or, in the case
of clause (E) above, later than 120 days following the Closing Date; provided, however, that in the
event the Issuer is unable to deliver by such date each Mortgage and each such interim assignment
by reason of the fact that any such documents have not been returned by the appropriate recording
office, or, in the case of each such interim assignment, because the related Mortgage has not been
returned by the appropriate recording office, the Issuer shall deliver such documents to the
Trustee as promptly as possible upon receipt thereof and, in any event, within ___days following
the Closing Date. The Issuer shall forward or cause to be forwarded to the Trustee (a) from time
to time additional original documents evidencing an assumption or modification of a Pledged
Mortgage and (b) any other documents required to be delivered by the Issuer or the Master Servicer
to the Trustee. In the event that the original Mortgage is not delivered and in connection with
the payment in full of the related Pledged Mortgage the public recording office requires the
presentation of a “lost instruments affidavit and indemnity” or any equivalent document, because
only a copy of the Mortgage can be delivered with the instrument of satisfaction or reconveyance,
the Master Servicer shall execute and deliver or cause to be executed and delivered such a document
to the public recording office. In the case where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after recordation in a public recording
office, the Issuer shall deliver to the Trustee a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded Mortgage.



     As promptly as practicable subsequent to such pledge, transfer and assignment, and in any
event within thirty (30) days thereafter, the Master Servicer shall (i) affix the Trustee’s name to
each assignment of Mortgage, as the assignee thereof, (ii) cause such assignment to be in proper
form for recording in the appropriate public office for real property records within thirty (30)
days after receipt thereof and (iii) cause to be delivered for recording in the appropriate public
office for real property records the assignments of the Mortgages to the Trustee, except that, with
respect to any assignment of a Mortgage as to which the Master Servicer has not received the
information required to prepare such assignment in recordable form, the Master Servicer’s
obligation to do so and to deliver the same for such recording shall be as soon as practicable
after receipt of such information and in any event within thirty (30) days after the receipt
thereof, and the Master Servicer need not cause to be recorded any assignment which relates to a
Pledged Mortgage (a) the Mortgaged Property and Trustee Mortgage File relating to which are located
in California or (b) in any other jurisdiction under the laws
of which, as evidenced by an Opinion of Counsel delivered by the Issuer (at the Issuer’s
expense) to the Trustee in accordance with Section 3.11 of the Indenture, the recordation of such
assignment is not necessary to protect the Trustee’s and the Bondholders’ interest in the related
Pledged Mortgage.




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     In the case of Pledged Mortgages that have been prepaid in full as of the Closing Date, the
Issuer, in lieu of delivering the above documents to the Trustee, will deposit in the Bond Account
the portion of such payment that is required to be deposited in the Bond Account pursuant to
Section 3(h).



     Until the Bonds have been paid in full and the Issuer has otherwise fulfilled its obligations
under the Indenture, the Trustee shall retain possession and custody of each Trustee Mortgage File
in accordance with and subject to the terms and conditions set forth in the Indenture and this
Agreement.



               (ii) The Trustee acknowledges receipt of the documents identified in the Initial Certification
in the form annexed hereto as Exhibit A and declares that it holds and will hold such documents and
the other documents delivered to it constituting the Trustee Mortgage Files, and that it holds or
will hold such other assets as are included in the Trust Estate, in trust for the exclusive use and
benefit of all present and future Bondholders. The Trustee acknowledges that it will maintain
possession of the Mortgage Notes in the State of                     , unless otherwise permitted by the
Rating Agencies.



     The Trustee agrees to execute and deliver on the Closing Date to the Issuer and the Master
Servicer an Initial Certification in the form annexed hereto as Exhibit A. Based on its review and
examination required by and in accordance with Sections 6.16 and 8.04 of the Indenture, and only as
to the documents identified in such Initial Certification, the Trustee acknowledges that such
documents appear regular on their face and relate to such Pledged Mortgage; provided that the
Trustee shall be under no obligation to ascertain that, except the information set forth in items
(i) through (iv) and (vi) of the Schedule of Pledged Mortgages, any information set forth in said
schedule is accurate. The Trustee shall be under no duty or obligation to inspect, review or
examine said documents, instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they have actually been
recorded in the real estate records or that they are other than what they purport to be on their
face.



     Not later than 90 days after the Closing Date, the Trustee shall deliver to the Issuer and the
Master Servicer a Final Certification in the form annexed hereto as Exhibit B, with any applicable
exceptions noted thereon.



     If, in the course of such review, the Trustee finds any document constituting a part of a
Trustee Mortgage File which does not meet the requirements of Section 2(a)(i), the Trustee shall
list such as an exception in the Final Certification; provided, however, that the Trustee shall not
make any determination as to whether (i) any endorsement is sufficient to transfer all right, title
and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note or (ii) that any assignment is in recordable form or is sufficient to effect the assignment of
and transfer to the assignee thereof under the mortgage to which the assignment relates. The
Master Servicer shall promptly correct or cure such defect within 90 days from the date it was so
notified of such defect and, if the Master Servicer does not correct or cure such defect within
such period, the Master Servicer shall either (a) substitute for the related Pledged Mortgage a
Replacement Pledged Mortgage, which substitution shall be accomplished in the manner and subject to
the conditions set forth in Section 2(d)(iv), or (b) purchase such Pledged Mortgage from the
Trustee within 90 days from the date the Master Servicer was notified of such defect in writing at
the Purchase Price of such Pledged Mortgage. Any such substitution pursuant to (a) above shall not
be effected prior to the delivery to the Trustee of a Request for Release substantially in the form
of Exhibit D. No substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Pledged Mortgage shall be
deposited by the Master Servicer in the Bond Account on or prior to the Distribution Account Report
Date in the month following the month of purchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit D hereto, the Trustee shall release the
related Trustee Mortgage File to the Master Servicer and shall execute and deliver at the Master
Servicer’s request such instruments of transfer or assignment prepared



21









 







by the Master Servicer, in each case without recourse, as shall be necessary to vest in the
Master Servicer, or a designee, the Trustee’s interest in any Pledged Mortgage released pursuant
hereto.



     The Trustee shall retain possession and custody of each Trustee Mortgage File in accordance
with and subject to the terms and conditions set forth herein. The Master Servicer shall promptly
deliver to the Trustee, upon the execution or receipt thereof, the originals of such other
documents or instruments constituting the Trustee Mortgage File as come into the possession of the
Master Servicer from time to time.



     It is understood and agreed that the obligation of the Master Servicer to substitute for or to
purchase any Pledged Mortgage which does not meet the requirements of Section 2(a)(i) shall
constitute the sole remedy respecting such defect available to the Trustee and any Bondholder
against the Master Servicer.



          (b) Trustee to Cooperate; Release of Trustee Mortgage Files.




     Upon the payment in full of any Pledged Mortgage, or the receipt by the Master Servicer
of a notification that payment in full will be escrowed in a manner customary for such purposes,
the Master Servicer will immediately notify the Trustee by delivering, or causing to be delivered,
a “Request for Release” substantially in the form of Exhibit D, all in accordance with Section
8.08(c) of the Indenture. Upon receipt of such request, the Trustee shall promptly release the
related Trustee Mortgage File to the Master Servicer, and the Trustee shall at the Master
Servicer’s direction execute and deliver to the Master Servicer the request for reconveyance, deed
of reconveyance or release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage in each case provided by the Master Servicer, together with the Mortgage Note with written
evidence of cancellation thereon, all in accordance with Section 8.08(c) of the Indenture.
Expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the related Mortgagor. From time to time and as shall be appropriate for the
servicing or foreclosure of any Pledged Mortgage, including for such purpose collection under any
policy of flood insurance, any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged Property from the lien of the Mortgage or the making
of any corrections to the Mortgage Note or the Mortgage or any of the other documents included in
the Trustee Mortgage File, the Trustee shall, upon delivery to the Trustee in accordance with
Section 8.08(c) of the Indenture of a Request for Release in the form of Exhibit C signed by a
Servicing Officer, release the Trustee Mortgage File to the Master Servicer or, at the Master
Servicer’s direction, to the related Servicer. Subject to the further limitations set forth below,
the Master Servicer shall cause the Trustee Mortgage File or documents so released to be returned
to the Trustee when the need therefor by the Master Servicer no longer exists, unless the Pledged
Mortgage is liquidated and the proceeds thereof are deposited in the Bond Account, in which case
the Master Servicer shall deliver to the Trustee a Request for Release in the form of Exhibit D,
signed by a Servicing Officer.



     If the Master Servicer at any time seeks to initiate a foreclosure proceeding in respect of
any Mortgaged Property as authorized by this Agreement, the Master Servicer shall deliver or cause
to be delivered to the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee’s sale or other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain
a deficiency judgment or to enforce any other remedies or rights provided by the Mortgage Note or
the Mortgage or otherwise available at law or in equity.



          (c) Documents, Records and Funds in Possession of Master Servicer to be
Held for Trustee.




               (i) Notwithstanding any other provisions of this Agreement, the Master Servicer shall deliver
to the Trustee as required by this Agreement and the Indenture all documents and



22









 







instruments relating to the Pledged Mortgages coming into the possession of the Master
Servicer from time to time and shall account fully to the Trustee for any funds received by the
Master Servicer or which otherwise are collected by the Master Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Pledged Mortgage. All Trustee Mortgage Files, including
without limitation the Mortgage Documents contained therein, funds collected or held by, or under
the control of, the Master Servicer from time to time in respect of any Pledged Mortgages, whether
from the collection of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, including but not limited to any funds on deposit in any Eligible Account and any other
items constituting a part of the Trust Estate which from time to time come into the possession of
the Master Servicer, shall be held by the Master Servicer for and on behalf of the Trustee and the
Bondholders as specified in Section 8.10 of the Indenture, and shall be and remain the sole and
exclusive property of the Trustee, subject to the applicable provisions of this Agreement and the
Indenture. The Master Servicer also agrees that it shall not create, incur or subject any Trustee
Mortgage File, Mortgage Documents or other documents relating to a Pledged Mortgage which are in
the possession of the Master Servicer with respect to each Pledged Mortgage (each a “Master
Servicer Mortgage File”) or any funds that are deposited in the Distribution Account, the Bond
Account, any Eligible Account, Servicing Account or Escrow Account, or any funds that otherwise are
or may become due or payable to the Trustee for the benefit of the Bondholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of set-off against any Master Servicer Mortgage File or
Trustee Mortgage File or any funds collected or held by, or under the control of, the Master
Servicer from time to time in respect of a Pledged Mortgage; provided, however, that the Master
Servicer shall be entitled to set-off against and deduct from any such funds any amounts that are
properly due and payable to the Master Servicer under this Agreement.



               (ii) The Master Servicer hereby acknowledges that concurrently with the execution of this
Agreement, the Trustee has acquired and holds a security interest in the Trustee Mortgage Files and
in all Pledged Mortgages represented by such Master Servicer Mortgage Files and Trustee Mortgage
Files and in all funds now or hereafter held by, or under the control of, the Master Servicer that
are collected by the Master Servicer in connection with the Pledged Mortgages, whether as Scheduled
Payments, as Principal Prepayments, or as Liquidation Proceeds or Insurance Proceeds, and in all
proceeds of the foregoing and proceeds of proceeds (but excluding any Master Servicing Fees,
[Servicing Fees], Trustee Fees and any other amounts or reimbursements to which the Master Servicer
is entitled under this Agreement). The Master Servicer agrees that so long as the Pledged Mortgages
are assigned to the Trustee, all Master Servicer Mortgage Files and Trustee Mortgage Files (and any
documents or instruments constituting a part of such files), and such funds which come into the
possession or custody of, or which are subject to the control of, the Master Servicer shall be held
by the Master Servicer for and on behalf of the Trustee as the Trustee’s agent and bailee for
purposes of perfecting the Trustee’s security interest therein, as provided by Section 9-305 of the
Uniform Commercial Code of the state in which such property is located, or by other laws, as
specified in Section 8.10 of the Indenture. The Master Servicer hereby accepts such agency and
acknowledges that the Trustee, as secured party, will be deemed to have possession at all times of
all Master Servicer Mortgage Files, Trustee Mortgage Files and any other documents or instruments
constituting a part of such files, such funds and other items for purposes of Section 9-305 of the
Uniform Commercial Code of the state in which such property is held by the Master Servicer.



          (d) Representations, Warranties and Covenants of the Issuer and the Master
Servicer.




               (i)                                         , in its capacity as Master Servicer, hereby makes the
representations and warranties set forth in Schedule II hereto, and by this reference incorporated
herein, to the Issuer and the Trustee, as of the Closing Date, or if so specified therein, as of
the Cut-off Date.



23









 





               (ii)                                         , in its capacity as Master Servicer, hereby makes the
representations and warranties set forth in Schedule III hereto, and by this reference incorporated
herein, to the Issuer and the Trustee, as of the Closing Date, or if so specified therein, as of
the Cut-off Date.



               (iii) The Issuer hereby makes the representations and warranties set forth in Schedule IV
hereto, and by this reference incorporated herein, to the Trustee and the Master Servicer, as of
the Closing Date.



               (iv) Upon discovery by any of the parties hereto of a breach of a representation or warranty
made pursuant to Section 2(d)(ii) that materially and adversely affects the interests of the
Bondholders in any Pledged Mortgage, the party discovering such breach shall give prompt notice
thereof to the other parties. The Master Servicer hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a breach of any
representation or warranty made pursuant to Section 2(d)(ii) which materially and adversely affects
the interests of the Bondholders, in any Pledged Mortgage, it shall cure such breach in all
material respects, and if such breach is not so cured, shall, (i) remove such Pledged Mortgage (a
“Deleted Pledged Mortgage”) from the Trust Estate and substitute in its place a Replacement Pledged
Mortgage, in the manner and subject to the conditions set forth in this Section 2(d); or (ii)
purchase the affected Pledged Mortgage or Pledged Mortgages from the Trustee at the Purchase Price
in the manner set forth below; provided, however, that any such substitution pursuant to (i) above
shall not be effected prior to the delivery to the Trustee of a Request for Release substantially
in the form of Exhibit D, and the Trustee Mortgage File for any such Replacement Pledged Mortgage.
The Issuer shall promptly reimburse the Master Servicer and the Trustee for any expenses reasonably
incurred by the Master Servicer or the Trustee in respect of enforcing the remedies for such
breach. With respect to the representations and warranties described in this Section 2(d) which
are made to the best of the Issuer’s knowledge, if it is discovered by either the Issuer or the
Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the interests of the Bondholders therein, notwithstanding the
Issuer’s lack of knowledge with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or warranty.



     With respect to any Replacement Pledged Mortgage or Mortgages, the Issuer shall deliver to the
Trustee for the benefit of the Bondholders the Mortgage Note, the Mortgage, the related assignment
of the Mortgage, and such other documents and agreements as are required by Section 2(a), with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2(a). No substitution is
permitted to be made in any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Replacement Pledged Mortgages in the month of substitution shall not
be part of the Trust Estate and will be retained by the Master Servicer on the next succeeding
Payment Date. For the month of substitution, Available Funds will include the monthly payment due
on any Deleted Pledged Mortgage for such month and thereafter the Master Servicer shall be entitled
to retain all amounts received in respect of such Deleted Pledged Mortgage.



     The Master Servicer shall amend the Schedule of Pledged Mortgages for the benefit of the
Bondholders to reflect the removal of such Deleted Pledged Mortgage or Mortgages and the
substitution of the Replacement Pledged Mortgage or Mortgages and the Master Servicer shall deliver
the amended Schedule of Pledged Mortgages to the Trustee. Upon such substitution, the Replacement
Pledged Mortgage or Mortgages shall be subject to the terms of this Agreement in all respects, and
the Master Servicer shall be deemed to have made with respect to such Replacement Pledged Mortgage
or Mortgages, as of the date of substitution, the representations and warranties made pursuant to
Section 2(d)(ii) with respect to such Pledged Mortgage or Mortgages. Upon any such substitution
and the deposit to the Bond Account of the amount required to be deposited therein in connection
with such substitution as described in the following paragraph, the Trustee shall release the
Trustee Mortgage File held for the benefit of the Bondholders relating to such Deleted Pledged
Mortgage or Mortgages to the Master



24









 







Servicer and shall execute and deliver at the Master Servicer’s direction such instruments of
transfer or assignment prepared by the Master Servicer, in each case without recourse, as shall be
necessary to vest title in the Master Servicer, or its designee, the Trustee’s interest in any
Deleted Pledged Mortgage or Mortgages substituted for pursuant to this Section 2(d).



     For any month in which the Master Servicer substitutes one or more Replacement Pledged
Mortgages for one or more Deleted Pledged Mortgages, the Master Servicer will determine the amount
(if any) by which the aggregate principal balance of all such Replacement Pledged Mortgages as of
the date of substitution is less than the aggregate Stated Principal Balance of all such Deleted
Pledged Mortgages (after application of the scheduled principal portion of the monthly payments due
in the month of substitution). The amount of such shortage (the “Substitution Adjustment Amount”)
shall be deposited into the Bond Account by the Master Servicer on or before the Distribution
Account Deposit Date for the Payment Date in the month succeeding the calendar month during which
the related Pledged Mortgage became required to be purchased or replaced hereunder.



     In the event that the Master Servicer shall have purchased a Pledged Mortgage, the Purchase
Price therefor shall be deposited in the Bond Account pursuant to Section 3(h) and in compliance
with the provisions of Section 8.04 of the Indenture on or before the Distribution Account Deposit
Date for the Payment Date in the month following the month during which the Master Servicer became
obligated hereunder to purchase or replace such Pledged Mortgage and upon such deposit of the
Purchase Price and receipt of a Request for Release in the form of Exhibit D hereto, the Trustee
shall release the related Trustee Mortgage File held for the benefit of the Bondholders to such
Person, and the Trustee shall execute and deliver at such Person’s direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse, as shall be
necessary to transfer title from the Trustee pursuant to Sections 8.08(c) and 8.12 of the
Indenture. It is understood and agreed that the obligation under this Agreement of any Person to
cure, purchase or replace any Pledged Mortgage as to which a breach has occurred and is continuing
shall constitute the sole remedy against such Persons respecting such breach available to
Bondholders or the Trustee on their behalf.



     The representations and warranties made pursuant to this Section 2(d) shall survive delivery
of the respective Trustee Mortgage Files to the Trustee for the benefit of the Bondholders.



               (e) Covenants of the Master Servicer.



     The Master Servicer hereby covenants to the Issuer and the Trustee as follows:




     (i) the Master Servicer shall comply in the performance of its obligations
under this Agreement with all reasonable rules and requirements of the insurer under
each Required Insurance Policy; and




     (ii) no written information, certificate of an officer, statement furnished in
writing or written report delivered to the Issuer, any affiliate of the Issuer or
the Trustee and prepared by the Master Servicer pursuant to this Agreement will
contain any untrue statement of a material fact or omit to state a material fact
necessary to make such information, certificate, statement or report not misleading.



     3. GENERAL DUTIES OF THE MASTER SERVICER.



     The parties agree that, subject to the provisions of Section 7 hereof, the Master Servicer
shall service the Pledged Mortgages in the manner and on the terms and conditions set forth below:



               (a) Master Servicer to Service Pledged Mortgages.



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     For and on behalf of the Issuer, the Trustee and the Bondholders, the Master Servicer shall
service and administer the Pledged Mortgages in accordance with the terms of this Agreement and
customary and usual standards of practice of prudent mortgage loan servicers. In connection with
such servicing and administration, the Master Servicer shall have full power and authority, acting
alone and/or through Servicers as provided in Section 3(b), 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 but not limited to, the power and authority, subject to the terms hereof,
(i) to execute and deliver, on behalf of the Bondholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of any Mortgaged Property
and assumptions of the Mortgage Notes and related Mortgages (but only in the manner provided in
this Agreement), (iii) to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv)
to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing
any Pledged Mortgage; provided that the Master Servicer shall not take, or permit any Servicer to
take, any action that is inconsistent with or prejudices the interests of the Trustee or the
Bondholders in any Pledged Mortgage or the rights and interests of the Issuer, the Trustee and the
Bondholders under this Agreement. The Master Servicer shall represent and protect the interests of
the Trustee in the same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Pledged Mortgage. Without limiting
the generality of the foregoing, the Master Servicer, in its own name or in the name of any
Servicer or the Issuer and the Trustee, is hereby authorized and empowered by the Issuer and the
Trustee, when the Master Servicer or the Servicer, as the case may be, believes it appropriate in
its reasonable judgment, to execute and deliver, on behalf of the Trustee, the Issuer, the
Bondholders or any of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect to the Pledged
Mortgages and with respect to the Mortgaged Properties held for the benefit of the Trustee and the
Bondholders. The Master Servicer shall prepare and deliver to the Issuer and/or the Trustee such
documents requiring execution and delivery by either or both of them as are necessary or
appropriate to enable the Master Servicer to service and administer the Pledged Mortgages to the
extent that the Master Servicer is not permitted to execute and deliver such documents pursuant to
the preceding sentence. Upon receipt of such documents, the Issuer and/or the Trustee shall
execute such documents and deliver them to the Master Servicer.



     In accordance with the standards of the preceding paragraph, the Master Servicer shall advance
or cause to be advanced funds as necessary for the purpose of effecting the payment of taxes and
assessments on the Mortgaged Properties, which advances shall be reimbursable in the first instance
from related collections from the Mortgagors pursuant to Section 3(i), and further as provided in
Section 3(k). The costs incurred by the Master Servicer, if any, in effecting the timely payments
of taxes and assessments on the Mortgaged Properties and related insurance premiums shall not, for
the purpose of calculating payments to the Bondholders, be added to the Stated Principal Balances
of the related Pledged Mortgages, notwithstanding that the terms of such Pledged Mortgages so
permit.



          (b)  Subservicing; Enforcement of the Obligations of Servicers.




               (i) The Master Servicer may arrange for the servicing of any Pledged Mortgage by a Servicer
pursuant to a Servicing Agreement; provided, however, that such servicing arrangement and the terms
of the related Servicing Agreement must provide for the servicing of such Pledged Mortgages in a
manner consistent with the servicing arrangements contemplated hereunder. Each Servicer of a
Pledged Mortgage shall be entitled to receive and retain, as provided in the related Servicing
Agreement and in Section 5(a), the related Servicing Fee from payments of interest received on such
Pledged Mortgage after payment of all amounts required to be remitted to the Master Servicer in
respect of such Pledged Mortgage. Unless the context otherwise requires, references in this
Agreement to actions taken or to be taken by the Master Servicer in servicing the Pledged Mortgages
include actions taken or to be taken by a Servicer on behalf of the Master Servicer. With the
approval of the Master Servicer, a Servicer may delegate its servicing obligations to third-party
servicers, but such Servicer will remain obligated under the related Servicing Agreement. The
Master Servicer and Servicer may enter



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into amendments to the related Servicing Agreement or a different form of Servicing Agreement;
provided, however, that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement in a manner which would materially and adversely affect
the interests of the Trustee and the Bondholders.



               (ii) For purposes of this Agreement, the Master Servicer shall be deemed to have received any
collections, recoveries or payments with respect to the Pledged Mortgages that are received by a
Servicer regardless of whether such payments are remitted by the Servicer to the Master Servicer.



               (iii) As part of its servicing activities hereunder, the Master Servicer, for the benefit of
the Trustee and the Bondholders, shall use its best reasonable efforts to enforce the obligations
of each Servicer under the related Servicing Agreement, to the extent that the non-performance of
any such obligation would have material and adverse effect on a Pledged Mortgage. Such
enforcement, including, without limitation, the legal prosecution of claims, termination of
Servicing Agreements and the pursuit of other appropriate remedies, shall be in such form and
carried out to such an extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Pledged Mortgages. The Master Servicer
shall pay the costs of such enforcement at its own expense, and shall be reimbursed therefor only
(i) from a general recovery resulting from such enforcement to the extent, if any, that such
recovery exceeds all amounts due in respect of the related Pledged Mortgage or (ii) from a specific
recovery of costs, expenses or attorneys fees against the party against whom such enforcement is
directed.



          (c) Successor Servicers.




     The Master Servicer shall be entitled to terminate any Servicing Agreement that may exist in
accordance with the terms and conditions of such Servicing Agreement and without any limitation by
virtue of this Agreement; provided, however, that in the event of termination of any Servicing
Agreement by the Master Servicer or the Servicer, the Master Servicer shall either act as servicer
of the related Pledged Mortgage or enter into a Servicing Agreement with a successor Servicer which
will be bound by the terms of the related Servicing Agreement. If the Master Servicer or any
affiliate of the Master Servicer acts as servicer, it will not assume liability for the
representations and warranties of the Servicer which it replaces. If the Master Servicer enters
into a Servicing Agreement with a successor Servicer, the Master Servicer shall use reasonable
efforts to have the successor Servicer assume liability for the representations and warranties made
by the terminated Servicer in respect of the related Pledged Mortgages and, in the event of any
such assumption by the successor Servicer, the Master Servicer may, in the exercise of its business
judgment, release the terminated Servicer from liability for such representations and warranties.



          (d) Liability of the Master Servicer.



Notwithstanding any Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer or a Servicer or references to actions taken
through a Servicer or otherwise, the Master Servicer shall remain obligated and liable to the
Trustee and Bondholders for the servicing and administering of the Pledged Mortgages in accordance
with the provisions of Section 3(a) without diminution of such obligation or liability by virtue of
such Servicing Agreements or arrangements or by virtue of indemnification from the Servicer and to
the same extent and under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Pledged Mortgages. The Master Servicer shall be entitled to enter
into any agreement with a Servicer for indemnification of the Master Servicer and nothing contained
in this Agreement shall be deemed to limit or modify such indemnification.




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           (e) No Contractual Relationship Between Servicers and the
Trustee.




     Any Servicing Agreement that may be entered into and any other transactions or services
relating to the Pledged Mortgages involving a Servicer in its capacity as such and not as an
originator shall be deemed to be between the Servicer and the Master Servicer alone and the Trustee
and Bondholders shall not be deemed parties thereto and shall have no claims, rights, obligations,
duties or liabilities with respect to the Servicer in its capacity as such except as set forth in
Section 3(g).



          (f) Rights of the Issuer and the Trustee in Respect of the Master
Servicer.




     The Issuer may, but is not obligated to, enforce the obligations of the Master Servicer
hereunder and may, but is not obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer hereunder and in connection with any such defaulted obligation to
exercise the related rights of the Master Servicer hereunder; provided that the Master Servicer
shall not be relieved of any of its obligations hereunder by virtue of such performance by the
Issuer or its designee. Neither the Trustee nor the Issuer shall have any responsibility or
liability for any action or failure to act by the Master Servicer nor shall the Trustee or the
Issuer be obligated to supervise the performance of the Master Servicer hereunder or otherwise.



          (g) Trustee to Act as Master Servicer.




     In the event that the Master Servicer shall for any reason no longer be the Master Servicer
hereunder (including by reason of a Servicing Default), the Trustee or its successor shall
thereupon assume all of the rights and obligations of the Master Servicer hereunder arising
thereafter, except that the Trustee shall not be (i) liable for losses of the Master Servicer
pursuant to Section 3(l) or any acts or omissions of the predecessor Master Servicer hereunder,
(ii) obligated to make Advances if it is prohibited from doing so by applicable law, (iii)
obligated to effectuate purchases or substitutions of Pledged Mortgages hereunder, including but
not limited to purchases or substitutions pursuant to Section 2(a)(ii) or 2(d)(iv), (iv)
responsible for expenses of the Master Servicer pursuant to Section 2(d)(iv) or (v) deemed to have
made any representations and warranties of the Master Servicer hereunder. Any such assumption
shall be subject to Section 7(b). If the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Servicing Default), the Trustee or its successor shall
succeed to any rights of the Master Servicer under each Servicing Agreement and any obligations of
the Master Servicer under each Servicing Agreement arising thereafter. The Trustee or the
successor Master Servicer shall be deemed to have assumed all of the Master Servicer’s interest
therein and to have replaced the Master Servicer as a party to any Servicing Agreement entered into
by the Master Servicer as contemplated by Section 3(b) to the same extent as if such Servicing
Agreement had been assigned to the assuming party except that the Master Servicer shall not be
relieved of any liability or obligations under any such Servicing Agreement.



     The Master Servicer shall, upon request of the Trustee, but at the expense of the Master
Servicer, deliver to the assuming party all documents and records relating to each Servicing
Agreement or substitute servicing agreement and the Pledged Mortgages then being serviced
thereunder and an accounting of amounts collected or held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of the substitute Servicing Agreement to the assuming
party.



          (h) Collection of Pledged Mortgage Payments; Eligible Accounts; Servicing
Accounts; Bond Account.




               (i) The Master Servicer shall make reasonable efforts in accordance with the customary and
usual standards of practice of prudent mortgage servicers to collect all payments called for under
the terms and provisions of the Pledged Mortgages to the extent such procedures shall be consistent
with this Agreement and the terms and provisions of any related Required Insurance Policy.
Consistent



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with the foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge or any prepayment charge or penalty interest in connection with the prepayment of a Pledged
Mortgage and (ii) extend the due dates for payments due on a Mortgage Note for a period not greater
than 120 days; provided, however, that the Master Servicer cannot extend the maturity of any such
Pledged Mortgage past the date on which the final payment is due on the latest maturing Pledged
Mortgage as of the Cut-off Date. In the event of any such arrangement, the Master Servicer shall
make Advances on the related Pledged Mortgage in accordance with the provisions of Section 4 during
the scheduled period in accordance with the amortization schedule of such Pledged Mortgage without
modification thereof by reason of such arrangements. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that enforcing the provision of the Mortgage
or other instrument pursuant to which such payment is required is prohibited by applicable law.



               (ii) In those cases where a Servicer is servicing Pledged Mortgages pursuant to a Servicing
Agreement, the Master Servicer shall cause each Servicer, pursuant to the respective Servicing
Agreement, to establish and maintain one or more Servicing Accounts, each of which shall be an
Eligible Account. The Servicer will be required under its Servicing Agreement to deposit into the
Servicing Account on a daily basis no later than the Business Day following receipt all proceeds of
Pledged Mortgages received by the Servicer, less its Servicing Fees and unreimbursed Servicer
Advances and expenses, to the extent permitted by the Servicing Agreement. The Servicer shall not
be required to deposit in the Servicing Account payments or collections in the nature of prepayment
charges or late charges.



               (iii) The Master Servicer shall establish and maintain a Collection Account, which shall be an
Eligible Account, into which the Master Servicer shall deposit or cause to be deposited on or
before each Withdrawal Date payments, collections and Servicer Advances remitted by Servicers in
respect of the Pledged Mortgages.



               (iv) On or before the Withdrawal Date in each calendar month, the Master Servicer shall cause
each Servicer, pursuant to its Servicing Agreement, to remit to the Master Servicer for deposit in
the Collection Account all funds held in the Servicing Account with respect to each Pledged
Mortgage serviced by such Servicer that are required to be remitted to the Master Servicer. The
Servicer will also be required, pursuant to the Servicing Agreement, to advance on or before each
such Withdrawal Date amounts equal to any Scheduled Payments (net of its Servicing Fees with
respect thereto) not received on any Pledged Mortgages by the Servicer (such amount, a “Servicer
Advance”). The Servicer’s obligation to advance with respect to each Pledged Mortgage will
continue up to and including the first day of the month following the date on which the related
Mortgaged Property is sold at a foreclosure sale or is acquired by the Issuer by deed in lieu of
foreclosure or otherwise. All such Servicer Advances received by the Master Servicer shall be
deposited promptly by it in the Collection Account or the Bond Account, as appropriate.



               Within five Business Days after the receipt by a Servicer of a Principal Prepayment in Full or
any Liquidation Proceeds or Insurance Proceeds (not required to be applied to the restoration or
repair of the related Mortgaged Property), the Master Servicer shall cause such Servicer, pursuant
to the related Servicing Agreement, to remit such amounts to the Master Servicer for deposit in the
Collection Account.



               (v) The Master Servicer shall establish and maintain a Bond Account, which shall be an
Eligible Account, into which the Master Servicer shall deposit or cause to be deposited on a daily
basis within one Business Day of receipt, except as otherwise specifically provided herein, the
following payments and collections remitted by Servicers or received by it in respect of Pledged
Mortgages subsequent to the Cut-off Date (other than in respect of principal and interest due on
the



29









 







Pledged Mortgages on or before the Cut-off Date) and the following amounts required to be
deposited hereunder:




     (A) all payments on account of principal on the Pledged Mortgages,
including Principal Prepayments and the principal component of any Servicer
Advance;




     (B) all payments on account of interest on the Pledged Mortgages, net
of the sum of the related Master Servicing Fee and related Servicing Fee,
and the interest component of any Servicer Advance;




     (C) all Insurance Proceeds and Liquidation Proceeds (net of any related
expenses of the related Servicer), other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor
in accordance with the Master Servicer’s normal servicing procedures;




     (D) any amount required to be deposited by the Master Servicer pursuant
to Section 3(h)(vii) in connection with any losses on Permitted Investments;




     (E) any amounts required to be deposited by the Master Servicer
pursuant to Sections 3(l) and 3(n);




     (F) all Purchase Prices from the Master Servicer and all Substitution
Adjustment Amounts;




     (G)all Advances made by the Master Servicer pursuant to Section 4; and




     (H) any other amounts required to be deposited hereunder.



     [In addition, on or prior to the last day of the month in which the Closing Date occurs, the
Issuer shall cause an amount equal to $                     to be deposited in the Bond Account, such amount
to be treated as a Principal Prepayment in Full of a Pledged Mortgage.]



               (vi) In addition, with respect to any Pledged Mortgage that is subject to a buydown agreement,
on each Due Date for such Pledged Mortgage, in addition to the monthly payment remitted by the
Mortgagor, the Master Servicer shall cause funds to be deposited into the Bond Account in an amount
required to cause an amount of interest to be paid with respect to such Pledged Mortgage equal to
the amount of interest that has accrued on such Pledged Mortgage from the preceding Due Date at the
Mortgage Rate net of the Master Servicing Fee on such date.



     The foregoing requirements for remittance by the Master Servicer shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing, payments in the
nature of prepayment penalties, late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. In the event that the Master Servicer shall remit any amount not
required to be remitted, it may at any time withdraw or direct the institution maintaining the Bond
Account to withdraw such amount from the Bond Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by delivering written notice
thereof to the Trustee or such other institution maintaining the Bond Account which describes the
amounts deposited in error in the Bond Account. The Master Servicer shall maintain adequate
records with respect to all withdrawals made pursuant to this Section 3(h)(vi). All funds
deposited in the Bond Account shall be held in trust for the Bondholders until withdrawn in
accordance with Section 3(k).



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               (vii) On or prior to each Distribution Account Deposit Date, after payment of any amount
described in Section 6.17 of the Indenture, as well as any amounts owed to the Trustee pursuant to
Section 6.07 of the Indenture, the Master Servicer will withdraw from the Bond Account the Bond
Distribution Amount, to the extent of Available Funds, and will deposit such amount in the
Distribution Account.



               (viii) On each Payment Date, after payment of any amount described in Section 6.17 of the
Indenture, as well as any amounts owed to the Trustee pursuant to Section 6.07 of the Indenture,
the Master Servicer shall withdraw the Available Funds remaining on deposit in the Bond Account,
after giving effect to the withdrawal therefrom pursuant to Section 3(h)(vii) above, and pay such
funds to the Certificate Paying Agent for application in the following order of priority and, in
each case, to the extent of funds remaining:




     (1) to the Investor Certificates, an amount allocable to interest equal
to the Certificate Interest Payment Amount for such Payment Date;




     (2) to the Investor Certificates, an amount allocable to principal
equal to the Invested Amount Payment for such Date; and




     (3) to the holders of the Investor Certificates, the balance of any
Available Funds remaining in the Bond Account.



     With respect to each Payment Date, the amounts described in clause (1) of this Section
3(h)(viii) for such Payment Date shall be reduced by the Investor Certificates’ pro rata share
(based on the Interest Payment Amount of the Investor Certificates before reduction pursuant to
this Section 3(h)(viii)) of each (A) Relief Act Reduction incurred during the calendar month
preceding the month of such Payment Date and (B) Prepayment Interest Shortfalls. In addition, with
respect to each Payment Date, the amounts described in clauses (2) and (3) of this Section
3(h)(viii) for such Payment Date shall be reduced by an amount equal to the excess, if any, of
Prepayment Interest Shortfalls, after giving effect to the reduction described in the immediately
preceding sentence, over the Master Servicing Fee for such payment date.



               (ix) Each institution at which the Bond Account, the Distribution Account or the Collection
Account is maintained shall invest the funds therein as directed in writing by the Master Servicer
in Permitted Investments, which shall mature not later than (i) in the case of the Bond Account,
the second Business Day next preceding the related Distribution Account Deposit Date (except that
if such Permitted Investment is an obligation of the institution that maintains such account, then
such Permitted Investment shall mature not later than the Business Day next preceding such
Distribution Account Deposit Date), (ii) in the case of the Collection Account, the next Business
Day and (iii) in the case of the Distribution Account, the Business Day next preceding the related
Payment Date (except that if such Permitted Investment is an obligation of the institution that
maintains such account, then such Permitted Investment shall mature not later than such Payment
Date) and, in each case, shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Trustee, for the benefit of the Bondholders.
All income and gain (net of any losses) realized from any such investment of funds on deposit in
the Bond Account, the Distribution Account or the Collection Account shall be for the benefit of
the Master Servicer as servicing compensation and shall be remitted to it monthly as provided
herein. The amount of any realized losses in the Bond Account, the Distribution Account or the
Collection Account incurred in any such account in respect of any such investments shall promptly
be deposited by the Master Servicer in the Bond Account, the Distribution Account or the Collection
Account, as applicable. The Trustee in its fiduciary capacity shall not be liable for the amount
of any loss incurred in respect of any investment or lack of investment of funds held in the Bond
Account, the Distribution Account or the Collection Account and made in accordance with this
Section 3(h)(ix).



31









 





               (x) The Master Servicer shall give notice to the Trustee, the Issuer and each Rating Agency of
any proposed change of the location of the Bond Account not later than 30 days and not more than 45
days prior to any change thereof.



          (i) Collection of Taxes, Assessments and Similar Items; Escrow Accounts.




               (i) To the extent required by the related Mortgage Note and not violative of current law, the
Master Servicer shall cause each Servicer to establish and maintain one or more accounts (each, an
“Escrow Account”) and deposit and retain therein all collections from the Mortgagors (or advances
by the Servicer) for the payment of taxes, assessments, hazard insurance premiums or comparable
items for the account of the Mortgagors. Nothing herein shall require the Master Servicer or any
Servicer to compel a Mortgagor to establish an Escrow Account in violation of applicable law.



               (ii) Withdrawals of amounts so collected from the Escrow Accounts may be made only to effect
timely payment of taxes, assessments, hazard insurance premiums, condominium or PUD association
dues, or comparable items, to reimburse the Master Servicer or the related Servicer out of related
collections for any payments made pursuant to Sections 3(l) (with respect to taxes and assessments
and insurance premiums) and 3(m) (with respect to hazard insurance), to refund to any Mortgagors
any sums determined to be overages, to pay interest, if required by law or the terms of the related
Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow Account or to clear and
terminate the Escrow Account at the termination of this Agreement in accordance with Section 8(a).
The Escrow Accounts shall not be a part of the Trust Estate.



               (iii) The Master Servicer shall advance any payments referred to in Section 3(i)(i) that are
not timely paid by the Mortgagors or advanced by the Servicers on the date when the tax, premium or
other cost for which such payment is intended is due, but the Master Servicer shall be required so
to advance only to the extent that such advances, in the good faith judgment of the Master
Servicer, will be recoverable by the Master Servicer out of Insurance Proceeds, Liquidation
Proceeds or otherwise.



          (j) Access to Certain Documentation and Information Regarding the Pledged
Mortgages.




     The Master Servicer shall afford, or shall cause the Servicers to afford, the Issuer and the
Trustee reasonable access to all records and documentation regarding the Pledged Mortgages and all
accounts, insurance information and other matters relating to this Agreement, such access being
afforded without charge, but only upon reasonable request and during normal business hours at the
office designated by the Master Servicer.



     Upon reasonable advance notice in writing, the Master Servicer will provide, or will cause the
Servicers to provide, to each Bondholder which is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation regarding the
Pledged Mortgages sufficient to permit such Bondholder to comply with applicable regulations of the
OTS or other regulatory authorities with respect to investment in the Bonds; provided that the
Master Servicer and any Servicer shall be entitled to be reimbursed by each such Bondholder for
actual expenses incurred by the Master Servicer or such Servicer in providing such reports and
access.



          (k) Permitted Withdrawals from the Bond Account. 




     The Master Servicer may from time to time make withdrawals from the Bond Account for the
following purposes:




     (i) to pay to the Master Servicer or the related Servicer (to the extent not
previously retained), the servicing compensation to which it is entitled pursuant to



32









 







Section 5(a), and to pay to the Master Servicer, as additional master servicing
compensation, earnings on or investment income with respect to funds in or credited
to the Bond Account;




     (ii) to reimburse the Master Servicer or the related Servicer for unreimbursed
Advances or Servicer Advances made by it, such right of reimbursement pursuant to
this subclause (ii) being limited to amounts received on the Pledged Mortgage(s) in
respect of which any such Advance or Servicer Advance was made;




     (iii) to reimburse the Master Servicer for any Nonrecoverable Advance
previously made;




     (iv) to reimburse the Master Servicer for Insured Expenses from the related
Insurance Proceeds;




     (v) to reimburse the Master Servicer for (A) unreimbursed Servicing Advances,
the Master Servicer’s right to reimbursement pursuant to this clause (A) with
respect to any Pledged Mortgage being limited to amounts received on such Pledged
Mortgage(s) which represent late recoveries of the payments for which such advances
were made pursuant to Section 3(a) or Section 3(i) and (B) for unpaid Master
Servicing Fees as provided in Section 3(n);




     (vi) to pay to the purchaser, with respect to each Pledged Mortgage or property
acquired in respect thereof that has been pursuant to Section 2(a)(ii), 2(d)(iv) or
3(n), all amounts thereon after the date of such purchase;




     (vii) to reimburse the Master Servicer for expenses incurred by it and
reimbursable pursuant to Section 6(c) and to pay the Trustee amounts due to it
pursuant to Section 6.07(2) and (3) of the Indenture;




     (viii) to withdraw any amount deposited in the Bond Account and not required to
be deposited therein;




     (ix) on or prior to the Distribution Account Deposit Date, withdraw an amount
equal to the related Bond Distribution Amount and the Trustee Fee for such Payment
Date, to the extent on deposit, and remit such amount to the Trustee for deposit in
the Distribution Account; and




     (x) to clear and terminate the Bond Account upon termination of this Agreement
pursuant to Section 8(a).



     The Master Servicer shall keep and maintain separate accounting, on a Pledged Mortgage by
Pledged Mortgage basis, for the purpose of justifying any withdrawal from the Bond Account pursuant
to such subclauses (i), (ii), (iv), (v) and (vi). Prior to making any withdrawal from the Bond
Account pursuant to subclause (iii), the Master Servicer shall deliver to the Trustee an Officer’s
Certificate of a Servicing Officer indicating the amount of any previous Advance determined by the
Master Servicer to be a Nonrecoverable Advance and identifying the related Pledged Mortgage(s) and
their respective portions of such Nonrecoverable Advance.



          (l) Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies.




               (i) The Master Servicer shall cause to be maintained, for each Pledged Mortgage, hazard
insurance with extended coverage in an amount that is at least equal to the lesser of (A)



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the maximum insurable value of the improvements securing such Pledged Mortgage or (B) the
greater of (y) the outstanding principal balance of the Pledged Mortgage and (z) an amount such
that the proceeds of such policy shall be sufficient to prevent the Mortgagor and/or the mortgagee
from becoming a co-insurer. Each such policy of standard hazard insurance shall contain, or have
an accompanying endorsement that contains, a standard mortgagee clause. To the extent it may do so
without breaching the related Servicing Agreement, the Master Servicer shall replace any Servicer
that does not cause such insurance, to the extent it is available, to be maintained. Any amounts
collected by the Master Servicer under any such policies (other than the amounts to be applied to
the restoration or repair of the related Mortgaged Property or amounts released to the Mortgagor in
accordance with the Master Servicer’s normal servicing procedures) shall be deposited in the Bond
Account or the related Servicing Account, as applicable. Any cost incurred by the Master Servicer
or any Servicer in maintaining any such insurance shall not, for the purpose of calculating
payments to the Bondholders or remittances to the Trustee for their benefit, be added to the
principal balance of the Pledged Mortgage, notwithstanding that the terms of the Pledged Mortgage
so permit. Such costs shall be recoverable by the Master Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3(k). It is
understood and agreed that no earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of origination of the
Pledged Mortgage in a federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Master Servicer shall cause flood insurance to be
maintained with respect to such Pledged Mortgage. Such flood insurance shall be in an amount equal
to the least of (A) the original principal balance of the related Pledged Mortgage, (B) the
replacement value of the improvements which are part of such Mortgaged Property, and (C) the
maximum amount of such insurance available for the related Mortgaged Property under the national
flood insurance program.



     In the event that the Master Servicer shall obtain and maintain a blanket policy insuring
against hazard losses on all of the Pledged Mortgages, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first sentence of this Section 3(l)(i), it being
understood and agreed that such policy may contain a deductible clause on terms substantially
equivalent to those commercially available and maintained by comparable servicers. If such policy
contains a deductible clause, the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property a policy complying with the first sentence of
this Section 3(l)(i), and there shall have been a loss that would have been covered by such policy,
deposit in the Bond Account the amount not otherwise payable under the blanket policy because of
such deductible clause. In connection with its activities as Master Servicer of the Pledged
Mortgages, the Master Servicer agrees to present, on behalf of itself, the Issuer and the Trustee
for the benefit of the Bondholders, claims under any such blanket policy.



               (ii) The Master Servicer shall not take, or permit any Servicer to take, any action which
would result in non-coverage under any applicable Primary Insurance Policy of any loss which, but
for the actions of the Master Servicer or any Servicer, would have been covered thereunder. The
Master Servicer shall not cancel or refuse to renew any such Primary Insurance Policy that is in
effect at the date of the initial issuance of the Bonds and is required to be kept in force
hereunder unless the replacement Primary Insurance Policy for such canceled or non-renewed policy
is maintained with a Qualified Insurer. The Master Servicer shall not be required to maintain any
Primary Insurance Policy with respect to any Pledged Mortgage with a Loan-to-Value Ratio less than
or equal to 80% as of any date of determination or, based on a new appraisal, the principal balance
of such Pledged Mortgage represents 80% or less of the new Appraised Value. The Master Servicer
agrees to effect the timely payment of the premiums on each Primary Insurance Policy, and such
costs not otherwise recoverable shall be recoverable by the Master Servicer from the related
liquidation proceeds.



     In connection with its activities as Master Servicer of the Pledged Mortgages, the Master
Servicer agrees to present, or cause the related Servicer to present, on behalf of itself, the
Trustee and the



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Bondholders, claims to the insurer under any Primary Insurance Policies and, in this regard,
to take such reasonable action as shall be necessary to permit recovery under any Primary Insurance
Policies respecting defaulted Pledged Mortgages. Any amounts collected by a Servicer or the Master
Servicer under any Primary Insurance Policies shall be deposited in the Servicing Account, the
Collection Account or the Bond Account, as applicable.



          (m) Enforcement of Due-On-Sale Clauses; Assumption Agreements.




               (i) Except as otherwise provided in this Section 3(m), when any property subject to a Mortgage
has been conveyed by the Mortgagor, the Master Servicer or the related Servicer shall, to the
extent that it has knowledge of such conveyance, enforce any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing, neither the Master
Servicer nor the related Servicer is required to exercise such rights with respect to a Pledged
Mortgage if the Person to whom the related Mortgaged Property has been conveyed or is proposed to
be conveyed satisfies the terms and conditions contained in the Mortgage Note and Mortgage related
thereto and the consent of the mortgagee under such Mortgage Note or Mortgage is not otherwise so
required under such Mortgage Note or Mortgage as a condition to such transfer. In the event that
(A) the Master Servicer or the related Servicer is prohibited by law from enforcing any such
due-on-sale clause, (B) coverage under any Required Insurance Policy would be adversely affected,
(C) the Mortgage Note does not include a due-on-sale clause or (D) nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section 3(m)(ii), to take or
enter into an assumption and modification agreement from or with the person to whom such property
has been or is about to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Pledged Mortgage shall continue to be covered (if so covered before the Master
Servicer enters such agreement) by the applicable Required Insurance Policies. The Master
Servicer, subject to Section 3(m)(ii), is also authorized with the prior approval of the insurers
under any Required Insurance Policies to enter into a substitution of liability agreement with such
Person, pursuant to which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the foregoing,
the Master Servicer shall not be deemed to be in default under this Section 3(m) by reason of any
transfer or assumption which he Master Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever.



               (ii) Subject to the Master Servicer’s duty to enforce any due-on-sale clause to the extent set
forth in Section 3(m)(i), in any case in which a Mortgaged Property has been conveyed to a Person
by a Mortgagor, and such Person is to enter into an assumption agreement or modification agreement
or supplement to the Mortgage Note or Mortgage that requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor from liability on
the Pledged Mortgage, the Master Servicer shall prepare and deliver or cause to be prepared and
delivered to the Trustee for signature and shall direct, in writing, the Trustee to execute the
assumption agreement with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise to
comply with any applicable laws regarding assumptions or the transfer of the Mortgaged Property to
such Person. In connection with any such assumption, no material term of the Mortgage Note may be
changed. In addition, the substitute Mortgagor and the Mortgaged Property must be acceptable to
the Master Servicer in accordance with its underwriting standards as then in effect. Together with
each such substitution, assumption or other agreement or instrument delivered to the Trustee for
execution by it, the Master Servicer shall deliver an Officer’s Certificate signed by a Servicing
Officer stating that the requirements of this subsection have been met in connection therewith.
The Master Servicer shall notify, or cause the related Servicer to notify, the Trustee that any
such substitution or assumption agreement has been completed by forwarding



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to the Trustee the original of such substitution or assumption agreement, which in the case of
the original shall be added to the related Trustee Mortgage File and shall, for all purposes, be
considered a part of such Trustee Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Any fee collected by the Master Servicer or any Servicer
for entering into an assumption or substitution of liability agreement will be retained by the
Master Servicer as additional master servicing compensation.



     (n) Realization Upon Defaulted Pledged Mortgages; Purchase of Certain Pledged
Mortgages.



     The Master Servicer shall use reasonable efforts to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Pledged Mortgages as come into and
continue in default and as to which no satisfactory arrangements can be made for collection of
delinquent payments. In connection with such foreclosure or other conversion, the Master Servicer
shall follow such practices and procedures as it shall deem necessary or advisable, as shall be
normal and usual in its general mortgage servicing activities and as shall meet the requirements of
the insurer under any Required Insurance Policy. Notwithstanding the foregoing, the Master
Servicer shall not be required to expend its own funds in connection with any foreclosure or
towards the restoration of any property unless it shall determine (A) that such restoration and/or
foreclosure will increase the proceeds of liquidation of the Pledged Mortgage after reimbursement
to itself of such expenses and (B) that such expenses will be recoverable to it through Liquidation
Proceeds (respecting which it shall have priority for purposes of withdrawals from the Bond
Account). The Master Servicer shall be responsible for all other costs and expenses incurred by it
in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof from
the liquidation proceeds with respect to the related Mortgaged Property, as provided in the
definition of Liquidation Proceeds. If the Master Servicer has knowledge that a Mortgaged Property
which the Master Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a 1 mile radius of any site listed in the Expenditure Plan for the
Hazardous Substance Clean Up Bond Act of 1984 or other site with environmental or hazardous waste
risks known to the Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its established environmental
review procedures.



     With respect to any REO Property, the deed or certificate of sale shall be taken in the name
of the Trustee for the benefit of the Bondholders, or its nominee, on behalf of the Bondholders.
The Trustee’s name shall be placed on the title to such REO Property solely as the Trustee under
the Indenture and not in its individual capacity. The Master Servicer shall ensure that the title
to such REO Property references the Indenture and the Trustee’s capacity thereunder. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located and may, incident to
its conservation and protection of the interests of the Bondholders, rent the same, or any part
thereof, as the Master Servicer deems to be in the best interest of the Bondholders for the period
prior to the sale of such REO Property. The net monthly rental income, if any, from such REO
Property shall be deposited in the Bond Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and withholding required by
Sections 1445 and 6050J of the Code with respect to foreclosures and abandonments, the tax
reporting required by Section 6050H of the Code with respect to the receipt of mortgage interest
from individuals and, if required by Section 6050P of the Code with respect to the cancellation of
indebtedness by certain financial entities, by preparing such tax and information returns as may be
required, in the form required, and delivering the same to the Trustee for filing.



     The decision of the Master Servicer to foreclose on a defaulted Pledged Mortgage shall be
subject to a determination by the Master 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 Properties, net of reimbursement to the Master Servicer for expenses incurred (including
any property or



36









 







other taxes) in connection with such management and net of unreimbursed Master Servicing Fees,
Servicing Fees, Advances, Servicer Advances and Servicing Advances, shall be applied to the payment
of principal of and interest on the related defaulted Pledged Mortgages (with interest accruing as
though such Pledged Mortgages were still current and adjustments, if applicable, to the Mortgage
Rate were being made in accordance with the terms of the Mortgage Note) and all such income shall
be deemed, for all purposes in this Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the Bond Account. To the extent the net
income received during any calendar month is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related Pledged Mortgage for
such calendar month, such excess shall be considered to be a partial prepayment of principal of the
related Pledged Mortgage.



     The proceeds from any liquidation of a Pledged Mortgage, as well as any income from an REO
Property, will be applied in the following order of priority: first, to reimburse the Master
Servicer or the related Servicer for any related unreimbursed Advances or Servicing Advances,
Master Servicing Fees and Servicing Fees, as applicable; second, to reimburse the Master Servicer
or the related Servicer for any unreimbursed Advances or Servicer Advances, as applicable, and to
reimburse the Bond Account for any Nonrecoverable Advances (or portions thereof) that were
previously withdrawn by the Master Servicer pursuant to Section 3(k)(iii) that related to such
Pledged Mortgage; third, to accrued and unpaid interest (to the extent no Advance or Servicer
Advance has been made for such amount or any such Advance or Servicer Advance has been reimbursed)
on the Pledged Mortgage or related REO Property at the Net Mortgage Rate to the Due Date occurring
in the month in which such amounts are required to be distributed; and fourth, as a recovery of
principal of the Pledged Mortgage. Excess Proceeds, if any, from the liquidation of a Liquidated
Pledged Mortgage will be retained by the Master Servicer as additional servicing compensation
pursuant to Section 5(a).



     The Master Servicer, in its sole discretion, shall have the right to purchase for its own
account from the Issuer any Pledged Mortgage which is 91 days or more delinquent at a price equal
to the Purchase Price. The Purchase Price for any Pledged Mortgage purchased hereunder shall be
deposited in the Bond Account and the Trustee, upon receipt of a certificate from the Master
Servicer in the form of Exhibit D hereto, shall release or cause to be released to the purchaser of
such Pledged Mortgage the related Trustee Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such Pledged Mortgage, in each
case without recourse, as shall be necessary to vest in the purchaser of such Pledged Mortgage any
Pledged Mortgage released pursuant hereto and the purchaser of such Pledged Mortgage shall succeed
to all the Issuer’s and the Trustee’s right, title and interest in and to such Pledged Mortgage and
all security and documents related thereto. Such assignment shall be an assignment outright and
not for security. The purchaser of such Pledged Mortgage shall thereupon own such Pledged
Mortgage, and all security and documents, free of any further obligation to the Issuer, the Trustee
or the Bondholders with respect thereto.



     (o) Access to Certain Documentation.



     The Master Servicer shall provide to the OTS and the FDIC and to comparable regulatory
authorities supervising Holders of Subordinated Bonds and the examiners and supervisory agents of
the OTS, the FDIC and such other authorities, access to the documentation regarding the Pledged
Mortgages required by applicable regulations of the OTS and the FDIC. Such access shall be
afforded without charge, but only upon reasonable and prior written request and during normal
business hours at the offices designated by the Master Servicer. Nothing in this Section 3(o)
shall limit the obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the Master Servicer or any
Servicer to provide access as provided in this Section 3(o) as a result of such obligation shall
not constitute a breach of this Section 3(o).



     (p) Master Servicer Annual Statement of Compliance. 



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     The Master Servicer shall deliver (and the Master Servicer shall cause any Servicing Function
Participant engaged by it to deliver) to the Manager and the Trustee on or before March 10 (with a
5 calendar day cure period) of each year, commencing in March 200_, an Officer’s Certificate
stating, as to the signer thereof, that (A) a review of such party’s activities during the
preceding calendar year or portion thereof and of such party’s performance under this Agreement, or
such other applicable agreement in the case of a Servicing Function Participant, has been made
under such officer’s supervision and (B) to the best of such officer’s knowledge, based on such
review, such party has fulfilled all its obligations under this Agreement, or such other applicable
agreement in the case of a Servicing Function Participant, in all material respects throughout such
year or portion thereof, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and the nature and status
thereof. Promptly after receipt of each such Officer’s Certificate, the Manager shall review such
Officer’s Certificate and, if applicable, consult with each such party, as applicable, as to the
nature of any failures by such party, in the fulfillment of any of such party’s obligations
hereunder or, in the case of a Servicing Function Participant, under such other applicable
agreement.



     (q) Master Servicer Assessments of Compliance and Attestation Reports. 




     (i) By March 10 (with a 5 calendar day cure period) of each year, commencing in March
200_, the Master Servicer, at its own expense, shall furnish, and shall cause any Servicing
Function Participant engaged by it to furnish, each at its own expense, to the Manager and
the Trustee, a report on an assessment of compliance with the Relevant Servicing Criteria
that contains (A) a statement by such party of its responsibility for assessing compliance
with the Relevant Servicing Criteria, (B) a statement that such party used the Servicing
Criteria to assess compliance with the Relevant Servicing Criteria, (C) such party’s
assessment of compliance with the Relevant Servicing Criteria as of and for the fiscal year
covered by the Form 10-K required to be filed pursuant to Section 8.07(b) of the Indenture,
including, if there has been any material instance of noncompliance with the Relevant
Servicing Criteria, a discussion of each such failure and the nature and status thereof, and
(D) a statement that a registered public accounting firm has issued an attestation report on
such party’s assessment of compliance with the Relevant Servicing Criteria as of and for
such period.




     (ii) By March 10 (with a 5 calendar day cure period) of each year, commencing in March
200_, the Master Servicer, at its own expense, shall cause, and shall cause any Servicing
Function Participant engaged by it to cause, each at its own expense, a registered public
accounting firm (which may also render other services to the Master Servicer or such other
Servicing Function Participants, as the case may be) and that is a member of the American
Institute of Certified Public Accountants to furnish a report to the Manager and the
Trustee, to the effect that (i) it has obtained a representation regarding certain matters
from the management of such party, which includes an assertion that such party has complied
with the Relevant Servicing Criteria, and (ii) on the basis of an examination conducted by
such firm in accordance with standards for attestation engagements issued or adopted by the
PCAOB, it is expressing an opinion as to whether such party’s compliance with the Relevant
Servicing Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such party’s assessment of compliance with the Relevant Servicing
Criteria. In the event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an opinion.
Such report must be available for general use and not contain restricted use language.




     (iii) Promptly after receipt of such report on assessment of compliance and
accountants’ report, (i) the Manager shall review such reports and, if applicable, consult
with the Master Servicer and any Servicing Function Participant engaged by the Master
Servicer as to the nature of any material instance of noncompliance with the Relevant
Servicing Criteria by the
Master Servicer, and (ii) the Master Servicer shall confirm that the assessments, taken
as a whole,



38









 







address all of the Servicing Criteria and taken individually address the
Relevant Servicing Criteria for each party as set forth on Exhibit E and on any similar
exhibit set forth in each Servicing Agreement in respect of each Servicer, and that each
assessment is coupled with an attestation meeting the requirements of this Section and
notify the Manager of any exceptions. The Master Servicer shall not be required to deliver
any such assessments or accountants’ reports until April 15 in any given year so long as it
has received written confirmation from the Manager that a Form 10-K is not required to be
filed in respect of the Trust Fund for the preceding calendar year.



     (r) Errors and Omissions Insurance; Fidelity Bonds.



     The Master Servicer shall obtain and maintain in force, and shall cause each Servicer to
obtain and maintain in force, (a) a policy or policies of insurance covering errors and omissions
in the performance of its obligations as Master Servicer hereunder or as Servicer under its
Servicing Agreement, as the case may be, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for persons performing servicing for mortgage loans
purchased by FNMA or FHLMC. In the event that any such policy or bond ceases to be in effect, the
Master Servicer shall obtain a comparable replacement policy or bond from an insurer or issuer
meeting the requirements set forth above as of the date of such replacement.



     (s) Master Servicer Monthly Data.



     On or before [noon California time] on the Determination Date, the Master Servicer shall
provide by modem to the Trustee with respect to the Pledged Mortgages, an electronic data file
(accompanied by a hardcopy report) in a format which is mutually agreed upon by the Master Servicer
and the Trustee. The Trustee shall be under no duty to recalculate, verify or recompute the
information provided to it by the Master Servicer hereunder.



     4. ADVANCES.



     The Master Servicer shall determine on or before each Master Servicer Advance Date whether it
is required to make an Advance pursuant to the definition thereof. If the Master Servicer
determines it is required to make an Advance, it shall, on or before the Master Servicer Advance
Date, either (i) deposit into the Bond Account an amount equal to the Advance or (ii) make an
appropriate entry in its records relating to the Bond Account that any Amount Held for Future
Distribution has been used by the Master Servicer in discharge of its obligation to make any such
Advance. Any funds so applied shall be replaced by the Master Servicer by deposit in the Bond
Account no later than the close of business on the next Master Servicer Advance Date. The Master
Servicer shall be entitled to be reimbursed from the Bond Account for all Advances of its own funds
made pursuant to this Section 4 as provided in Section 3(k). The obligation to make Advances with
respect to any Pledged Mortgage shall continue if such Pledged Mortgage has been foreclosed or
otherwise terminated and the related Mortgaged Property has not been liquidated. The Master
Servicer shall inform the Trustee of the amount of the Advance to be made on each Master Servicer
Advance Date no later than the Second Business Day before the related Payment Date.



     The Master Servicer shall deliver to the Trustee on the related Master Servicer Advance Date
an Officer’s Certificate of a Servicing Officer indicating the amount of any proposed Advance
determined by the Master Servicer to be a Nonrecoverable Advance.



     5. SERVICING COMPENSATION AND EXPENSES.



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     As compensation for its activities hereunder, the Master Servicer shall be entitled out of
each payment of interest on a Pledged Mortgage (or portion thereof) to retain or withdraw from the
Bond Account an amount equal to the Master Servicing Fee for such Payment Date.



     Additional master servicing compensation in the form of Excess Proceeds, prepayment penalties,
assumption fees, late payment charges and all income and gain net of any losses realized from
Permitted Investments shall be retained by the Master Servicer to the extent not required to be
deposited in the Bond Account pursuant to Section 3(h). The Master Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities hereunder (including
payment of any premiums for hazard insurance and any Primary Insurance Policy and maintenance of
the other forms of insurance coverage required by this Agreement) and shall not be entitled to
reimbursement therefor except as specifically provided in this Agreement.



     As compensation for its activities under its Servicing Agreement, each Servicer shall be
entitled to retain out of each payment of interest on a Pledged Mortgage (or portion thereof) an
amount equal to interest at the applicable Servicing Fee Rate on the Stated Principal Balance of
the related Pledged Mortgage for the period covered by such interest payment.



     Additional servicing compensation in the form of prepayment penalties, assumption fees and
late payment charges shall be retained by the Servicers to the extent not required to be deposited
in the Servicing Accounts pursuant to the related Servicing Agreement. Each Servicer shall be
required to pay all expenses incurred by it in connection with its servicing activities under its
Servicing Agreement (including payment of any premium for hazard insurance and any Primary
Insurance Policy and maintenance of the other forms of insurance coverage required by this
Agreement and its Servicing Agreement) and shall not be entitled to reimbursement therefor except
as specifically provided in its Servicing Agreement and not inconsistent with this Agreement.



     In the event of any Prepayment Interest Shortfalls, the aggregate Master Servicing Fee for
such Payment Date shall be reduced (but not below zero) by an amount equal to such Prepayment
Interest Shortfalls.



     6. THE MASTER SERVICER.



     (a) Liabilities of the Master Servicer.



     The Master Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by it herein.



     (b) Merger or Consolidation of the Master Servicer.



     The Master Servicer will keep in full effect its existence, rights and franchises as a
corporation under the laws of the United States or under the laws of one of the states thereof and
will obtain and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Pledged Mortgages and to perform its duties under
this Agreement.



     Any Person into which the Master Servicer may be merged or consolidated, or any Person
resulting from any merger or consolidation to which the Master Servicer shall be a party, or any
person succeeding to the business of the Master Servicer, shall be the successor of the Master
Servicer hereunder, without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Master Servicer shall be qualified to sell mortgage loans
to, and to service mortgage loans on behalf of, FNMA or FHLMC.



40









 





     (c) Limitation on Liability of the Master Servicer and Others.



     Neither the Master Servicer nor any of the directors, officers, employees or agents of the
Master Servicer shall be under any liability to the Issuer or the Bondholders for any action taken
or for refraining from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the Master Servicer or
any such Person against any breach of representations or warranties made by it herein or protect
the Master Servicer or any such Person from any liability which would otherwise be imposed by
reasons of willful misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director, officer, employee or agent of the Master
Servicer shall be indemnified by the Issuer and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or the Bonds, other
than any loss, liability or expense related to any specific Pledged Mortgage or Pledged Mortgages
(except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. The Master Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its respective duties hereunder
and which in its opinion may involve it in any expense or liability; provided, however, that the
Master Servicer may in its 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 and
interests of the Issuer, the Trustee and the Bondholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be expenses, costs
and liabilities of the Issuer, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Bond Account.



     (d) Limitation on Resignation of the Master Servicer.



     The Master Servicer shall not resign from the obligations and duties hereby imposed on it
except (a) upon appointment of a successor servicer and receipt by the Trustee of a letter from
each Rating Agency that such a resignation and appointment will not result in a downgrading of the
rating of any of the Bonds or (b) upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination under clause (b) permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee. No such resignation shall become effective until the Trustee or a
successor master servicer shall have assumed the Master Servicer’s responsibilities, duties,
liabilities and obligations hereunder.



     7. SERVICING DEFAULT; TERMINATION AND LIABILITIES.



     (a) Servicing Default.



     Any of the following acts or occurrences shall constitute a Servicing Default by the Master
Servicer under this Agreement:



               (i) any failure by the Master Servicer to deposit in the Bond Account or remit to the Trustee
any payment (other than a payment required to be made under Section 4) required to be made under
the terms of this Agreement, which failure shall continue unremedied for five days after the date
upon which written notice of such failure shall have been given to the Master Servicer by the
Trustee or the Issuer or to the Master Servicer, the Trustee and the Issuer by the Holders of Bonds
representing more than 50% of the aggregate Class Principal Amount of the Controlling Class; or



41









 





               (ii) any failure by the Master Servicer to observe or perform in any material respect any
other of the covenants or agreements on the part of the Master Servicer contained in this
Agreement, which failure shall continue unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to the Master Servicer by the Trustee or the
Issuer or to the Master Servicer, the Trustee and the Issuer by the Holders of Bonds representing
more than 50% of the aggregate Class Principal Amount of the Controlling Class; or



               (iii) a decree or order of a court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of 60 consecutive days; or



               (iv) the Master Servicer shall consent to the appointment of a receiver or liquidator in any
insolvency, of debt, marshalling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or all or all of the property of the Master Servicer; or



               (v) the Master Servicer shall admit in writing its inability to pay its debts generally as
they become due, file a to take advantage of, or commence a voluntary case under, any insolvency or
reorganization statute, make an assignment the benefit of its creditors, or voluntarily suspend
payment of its obligations; or



               (vi) any failure of the Master Servicer to make any Advance in the manner and at the time
required to be made pursuant to 4 which continues unremedied for a period of one Business Day the
date of such failure.



     If a Servicing Default described in clauses (i) to (v) of this Section 7(a) shall occur, then,
and in each and every such case, so long as such Servicing Default shall not have been remedied the
Trustee may (subject to Section 3.07 and Section 8.11 of the Indenture), by notice in writing to
the Master Servicer (with a copy to each Rating Agency), and in addition to any other rights the
Trustee may have on behalf of the Bondholders as a result of such Servicing Default, terminate all
of the rights and obligations of the Master Servicer thereafter arising under this Agreement and in
and to the Pledged Mortgages and the proceeds thereof, other than its rights as a Bondholder under
the Indenture and its obligations which are not assumed by the Trustee pursuant to clauses (i),
(iii) and (v) of Section 3(g). If a Servicing Default described in clause (vi) shall occur, the
Trustee shall, by notice in writing to the Master Servicer and the Issuer, terminate all of the
rights and obligations of the Master Servicer under this Agreement and in and to the Pledged
Mortgages and the proceeds thereof, other than its rights as a Bondholder under the Indenture and
its obligations which are not assumed by the Trustee pursuant to clauses (i), (iii) and (v) of
Section 3(g). On and after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to the Pledged Mortgages
or otherwise, shall pass to and be vested in the Trustee. The Trustee shall thereupon make any
Advance described in clause (vi) subject to clause (ii) of the first sentence of Section 3(g). The
Trustee is hereby authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do
or accomplish all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or assignment of the
Pledged Mortgages and related documents, or otherwise. The Master Servicer agrees to cooperate
with the Trustee in effecting the termination of the Master Servicer’s responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee of all cash amounts which
shall at the time be credited to the Bond Account or thereafter be received with respect to the
Pledged Mortgages.



     Notwithstanding any termination of the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to receive, out of any late collection of a Scheduled Payment on a
Pledged



42









 







Mortgage which was due prior to the notice terminating such Master Servicer’s rights and
obligations as Master Servicer hereunder and received after such notice, that portion thereof to
which such Master Servicer would have been entitled pursuant to Sections 3(k)(i) through (viii),
and any other amounts payable to such Master Servicer hereunder the entitlement to which arose
prior to the termination of its activities hereunder.



     (b) Trustee to Act; Appointment of Successor.



     On and after the time the Master Servicer receives a notice of termination pursuant to Section
7(a), the Trustee shall, subject to and to the extent provided in Section 3(g), be the successor to
the Master Servicer in its capacity as master servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and provisions hereof and
applicable law including the obligation to make Advances pursuant to Section 4. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Pledged Mortgages that the
Master Servicer would have been entitled to charge to the Bond Account or Distribution Account if
the Master Servicer had continued to act hereunder. Notwithstanding the foregoing, if the Trustee
has become the successor to the Master Servicer in accordance with Section 7(a), the Trustee may,
if it shall be unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Section 4 or if it is otherwise unable to so act, appoint, or petition a court
of competent jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the Bonds by each Rating
Agency as the successor to the Master Servicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Master Servicer hereunder. Any successor to the
Master Servicer shall be an institution which is a FNMA and FHLMC approved seller/servicer in good
standing, which has a net worth of at least $15,000,000, which is willing to service the Pledged
Mortgages and which executes and delivers to the Issuer and the Trustee an agreement accepting such
delegation and assignment, containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer (other than liabilities of the
Master Servicer under Section 6(c) incurred prior to termination of the Master Servicer under
Section 7(a)), with like effect as if originally named as a party to this Agreement; provided that
each Rating Agency acknowledges that its rating of the Bonds in effect immediately prior to such
assignment and delegation will not be qualified or reduced as a result of such assignment and
delegation. Pending appointment of a successor to the Master Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to Section 3(g), act in such
capacity as hereinabove provided. In connection with such appointment and assumption, the Trustee
may make such arrangements for the compensation of such successor out of payments on Pledged
Mortgages as it and such successor shall agree; provided, however, that no such compensation shall
be in excess of the Master Servicing Fee permitted the Master Servicer hereunder. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor master servicer shall
be deemed to be in default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by the failure of the
Master Servicer to deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.



     Any successor to the Master Servicer as master servicer shall give notice to the Mortgagors of
such change of servicer and shall, during the term of its service as master servicer, maintain in
force the policy or policies that the Master Servicer is required to maintain pursuant to Section
3(r).



     (c) Notification to Bondholders.



               (i) Upon any termination of or appointment of a successor to the Master Servicer, the Trustee
shall give prompt written notice thereof to Bondholders and to each Rating Agency.



43









 





               (ii) Within 60 days after the occurrence of any Servicing Default, the Trustee shall transmit
by mail to all Bondholders notice of each such Servicing Default hereunder known to the Trustee,
unless such Servicing Default shall have been cured or waived.



     8. MISCELLANEOUS.



     (a) Term of Master Servicing Agreement.



     The obligations to be performed by the Master Servicer under this Agreement shall commence on
and as of the date on which the Issuer issues the Bonds and shall terminate as to each Pledged
Mortgage upon (i) the payment in full of all principal and interest due under such Pledged Mortgage
or other liquidation of such Pledged Mortgage as contemplated by this Agreement, (ii) the
termination of the Master Servicer’s rights and powers under this Agreement by the Trustee as
provided in Section 7(a) of this Agreement, or (iii) the release by the Trustee of its security
interest in any Pledged Mortgage.



     (b) Assignment.



     Notwithstanding anything to the contrary contained herein, except as provided in Section 6(a),
this Agreement may not be assigned by the Master Servicer without the prior written consent of the
Trustee.



     (c) Notices.



     All directions, demands and notices hereunder shall be in writing and shall be deemed to have
been duly given when delivered at the following addresses of the parties:



	 	 	 	 	 	 	 
	 

	 	The Master Servicer:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	The Issuer:
	 	Sequoia Mortgage Trust 200___-___	 	 
	 

	 	 	 	c/o Trust Company	 	 
	 

	 	 	 	Attention: Corporate Trust Administration	 	 
	 
	 	 	 	 	 	 
	 

	 	With a copy to:
	 	Sequoia Mortgage Funding Corporation	 	 
	 

	 	 	 	391 Redwood Highway, Suite 3100	 	 
	 

	 	 	 	Mill Valley, California 94941	 	 
	 

	 	 	 	Attention: Michael W. Perry	 	 
	 
	 	 	 	 	 	 
	 

	 	The Trustee:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Attention: Corporate Trust Department	 	 







			
	     Any Rating Agency:	 	The address specified therefor in the definition corresponding
to the name of such Rating Agency.





     Any of the parties may at any time give notice in writing to the others of a change of its
address for the purpose of this Section 8(c).



     (d) Inspection and Audit Rights.



44









 





     The Master Servicer agrees that, on reasonable prior notice, it will permit and will cause
each Servicer to permit any representative of the Issuer or the Trustee during the Master
Servicer’s normal business hours, to examine all the books of account, records, reports and other
papers of the Master Servicer relating to the Pledged Mortgages, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public accountants selected
by the Trustee and to discuss its affairs, finances and accounts relating to the Pledged Mortgages
with its officers, employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes said accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be reasonably requested.
Any out-of-pocket expense incident to the exercise by the Issuer or the Trustee of any right under
this Section 8(d) shall be borne by the party requesting such inspection; all other such expenses
shall be borne by the Master Servicer or the related Servicer.



     (e) Governing Law.



     This Agreement shall be construed in accordance with and governed by the substantive laws of
the State of New York applicable to agreements made and to be performed in the State of New York
and the obligations, rights and remedies of the parties hereto and the Bondholders shall be
determined in accordance with such laws.



     (f) Amendments.



     This Agreement shall not be amended, changed, modified, terminated or discharged in whole or
in part except (i) by an instrument in writing signed by all parties hereto, or their respective
successors or assigns and (ii) in compliance with Section 8.10 of the Indenture.



     (g) Severability.



     If any one or more of the covenants, agreements, provisions or terms of this Agreement shall
be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other provisions of this
Agreement.



     (h) No Joint Venture.



     The Servicer and the Issuer are not partners or joint venturers with each other and nothing
herein shall be construed to make them such partners or joint venturers or impose any liability as
such of either of them.



     (i) Execution in Counterparts.



     This Agreement may be executed in one or more counterparts, any of which shall constitute an
original as against any party whose signature appears on it, and all of which shall together
constitute a single instrument. This Agreement shall become binding when one or more counterparts,
individually or taken together, bear the signatures of all parties.



     (j) Limitation of Liability of [                    ].



     It is expressly understood and agreed by the parties hereto that (a) this Agreement is
executed and delivered by                                                                                 , not individually
or personally but solely as owner trustee of Sequoia Trust 200_-___under the Deposit Trust
Agreement, in the exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertakings and agreements by                                          but
is made and intended for



45









 







the purpose for binding only the Trust, (c) nothing herein contained shall be construed as
creating any liability on                                         , other than any liability arising out
of its gross negligence, bad faith or willful misconduct, and (d) under no circumstances shall
                                         be personally liable for the payment of any indebtedness or expenses
of the Trust or be liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under this Agreement or the other Operative Documents.



     (k) Nonpetition Covenants.



     Notwithstanding any prior termination of this Agreement, the Master Servicer shall not, prior
to the date which is one year and one day after the termination of this Agreement with respect to
the Issuer or the Depositor, acquiesce, petition or otherwise invoke or cause the Issuer or the
Depositor (or any assignee) to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or
state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any
substantial part of its property, or ordering the winding up or liquidation of the affairs of the
Issuer or the Depositor.



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



	 	 	 	 	 
	 	 	SEQUOIA MORTGAGE TRUST 200_-_,

as Issuer
	 
	 	 	 	 
	 	 	By:                                         TRUST COMPANY,
	 

	 	not in its individual capacity but solely as Owner

Trustee

	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	as Master Servicer
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	as Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 





46









 






47









 





SCHEDULE I




Schedule of Pledged Mortgages





I-1









 








SCHEDULE II




SEQUOIA MORTGAGE TRUST 200__-__

Collateralized Mortgage Bonds




Representations and Warranties of the Master Servicer




                                                                  (“___”) hereby makes the representations and warranties set forth in
this Schedule II to the Issuer and the Trustee, as of the Closing Date, or if so specified herein,
as of the Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule II shall
have the meanings ascribed thereto in the Master Servicing Agreement (the “Master Servicing
Agreement”) relating to the above-referenced Series, among                      ___, as Master Servicer,
Sequoia Mortgage Trust 200___-___, as Issuer, and                                                                                 , as
Trustee.



     (1)                      is duly organized as a corporation and is validly existing and in good
standing under the laws of the State of ___and is duly authorized and qualified to transact
any and all business contemplated by the Master Servicing Agreement to be conducted by
                     in any state in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to ensure its ability to enforce
each Pledged Mortgage, to service the Pledged Mortgages in accordance with the terms of the Master
Servicing Agreement and to perform any of its other obligations under the Master Servicing
Agreement in accordance with the terms thereof.



     (2)                      has the full corporate power and authority to sell and service each
Pledged Mortgage, and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by the Master Servicing Agreement and has duly authorized by all
necessary corporate action on the part of                      the execution, delivery and performance
of the Master Servicing Agreement; and the Master Servicing Agreement, assuming the due
authorization, execution and delivery thereof by the other parties thereto, constitutes a legal,
valid and binding obligation of                     , enforceable against                      in
accordance with its terms, except that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally
and (b) the remedy of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.



     (3) The execution and delivery of the Master Servicing Agreement by                     , the
servicing of the Pledged Mortgages by                      under the Master Servicing Agreement, the
consummation of any other of the transactions contemplated by the Master Servicing Agreement, and
the fulfillment of or compliance with the terms thereof are in the ordinary course of business of
                     and will not (A) result in a material breach of any term or provision of the
charter or by-laws of                      or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default under, the terms of any other
material agreement or instrument to which                      is a party or by which it may be bound,
or (C) constitute a material violation of any statute, order or regulation applicable to
                     of any court, regulatory body, administrative agency or governmental body having
jurisdiction over                     ; and                      is not in breach or violation of any
material indenture or other material agreement or instrument, or in violation of any statute, order
or regulation of any court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or



II-1









 







violation may materially impair                     ’s ability to perform or meet any of its
obligations under the Master Servicing Agreement.



     (4) Each Servicer is an approved servicer of conventional mortgage loans for FNMA or FHLMC or
is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act.



     (5) No litigation is pending or, to the best of ___’s knowledge, threatened against ___
                     that would materially and adversely affect the execution, delivery or enforceability of the
Master Servicing Agreement or the ability of                      to service the Pledged Mortgages or to
perform any of its other obligations under the Master Servicing Agreement in accordance with the
terms thereof.



     (6) No consent, approval, authorization or order of any court or governmental agency or body
is required for the execution, delivery and performance by                      of, or compliance by
                                         with, the Master Servicing Agreement or the consummation of the transactions
contemplated thereby, or if any such consent, approval, authorization or order is required,
                     has obtained the same.



II-2









 





SCHEDULE III




SEQUOIA MORTGAGE TRUST 200__-__

Collateralized Mortgage Bonds




Representations and Warranties as to the Pledged Mortgages




                                              (“___”) hereby makes the representations and warranties set forth in
this Schedule III to the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule III shall have the
meanings ascribed thereto in the Master Servicing Agreement (the “Master Servicing Agreement”)
relating to the above-referenced Series, among                      as Master Servicer, Sequoia Mortgage
Trust 200___-___, as Issuer, and                                                                                 , as Trustee.



     (1) The information set forth on Schedule I to the Master Servicing Agreement with respect to
each Pledged Mortgage is true and correct in all material respects as of the Closing Date.



     (2) As of the Closing Date, all payments due with respect to each Pledged Mortgage prior to
the Cut-off Date have been made; and as of the Cut-off Date, [no Pledged Mortgage has been
contractually delinquent for 30 or more days during the twelve months prior to the Cut-off Date].



     (3) No Pledged Mortgage had a Loan-to-Value Ratio at origination in excess of ___%.



     (4) With respect to any Pledged Mortgage that is not a Cooperative Loan, each Mortgage is a
valid and enforceable first lien on the Mortgaged Property subject only to (a) the lien of
non-delinquent current real property taxes and assessments, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the appraisal made in connection with
the origination of the related Pledged Mortgage, and (c) 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 such Mortgage.



     (5) Immediately prior to the pledge of the Pledged Mortgages to the Trustee for the benefit of
the Bondholders, the Issuer had good title to, and was the sole owner of, each Pledged Mortgage
free and clear of any pledge, lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement with, any other party, to
pledge and assign the same pursuant to the Indenture.



     (6) There is no delinquent tax or assessment lien against any Mortgaged Property.



     (7) There is no valid offset, defense or counterclaim to any Mortgage Note or Mortgage,
including the obligation of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.



     (8) There are no mechanics’ liens or claims for work, labor or material affecting any
Mortgaged Property which are or may be a lien prior to, or equal with, the lien of such Mortgage,
except those which are insured against by the title insurance policy referred to in item (12)
below.



     (9) To the best of the                     ’s knowledge, each Mortgaged Property is free of material
damage, and is in good repair.



III-1









 





     (10) Each Pledged Mortgage at origination complied in all material respects with applicable
state and federal laws, including, without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and consummation of the transactions
contemplated hereby will not involve the violation of any such laws.



     (11) As of the Closing Date, no prior holder of any Mortgage has modified the Mortgage in any
material respect (except that a Pledged Mortgage may have been modified by a written instrument
which has been recorded or submitted for recordation, if necessary, to protect the interests of the
Bondholders and which has been delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole or in part from the
lien of such Mortgage; or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.



     (12) A lender’s policy of title insurance together with a condominium endorsement and an
extended coverage endorsement, if applicable, and a variable rate endorsement in an amount at least
equal to the Cut-off Date Stated Principal Balance of each such Pledged Mortgage or a commitment
(binder) to issue the same was effective on the date of the origination of each Pledged Mortgage,
each such policy is valid and remains in full force and effect, and each such policy was issued by
a title insurer qualified to do business in the jurisdiction where the Mortgaged Property is
located and acceptable to FNMA or FHLMC and is in a form acceptable to FNMA or FHLMC, which policy
insures the Master Servicer and successor owners of indebtedness secured by the insured Mortgage,
(a) as to the first priority lien of the Mortgage subject to the exceptions set forth in paragraph
(4) above and (b) against loss by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage Note and Mortgage with respect to adjustment in the
Mortgage Rate and Scheduled Payment; to the best of the Issuer’s knowledge, no claims have been
made under such mortgage title insurance policy and no prior holder of the related Mortgage,
including the Master Servicer or the Issuer, has done, by act or omission, anything which would
impair the coverage of such mortgage title insurance policy.



     (13) Each Pledged Mortgage was originated by an entity that satisfied at the time of
origination the requirements of Section 3(a)(41) of the Securities Exchange Act of 1934, as
amended.



     (14) To the best of                     ’s knowledge, all of the improvements which were included for the
purpose of determining the Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.



     (15) To the best of                     ’s knowledge, no improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation. To the best of
                    ’s knowledge, all inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate authorities, unless the lack thereof
would not have a material adverse effect on the value of such Mortgaged Property, and the Mortgaged
Property is lawfully occupied under applicable law.



     (16) The Mortgage Note and the related Mortgage are genuine, and each is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with its terms and under
applicable law. To the best of                     ’s knowledge, all parties to the Mortgage Note and the
Mortgage had legal capacity to execute the Mortgage Note and the Mortgage and each Mortgage Note
and Mortgage have been duly and properly executed by such parties.



     (17) The proceeds of the Pledged Mortgage have been fully disbursed, there is no requirement
for future advances thereunder and any and all requirements as to completion of any on-site or
off-site



III-2









 







improvements and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making, or closing or recording the Pledged Mortgages were
paid.



     (18) The related Mortgage contains customary and enforceable provisions which render the
rights and remedies of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including, (i) in the case of a Mortgage designated as a
deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure.



     (19) With respect to each Mortgage constituting a deed of trust, 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 the Trust Estate to
the trustee under the deed of trust, except in connection with a trustee’s sale after default by
the Mortgagor.



     (20) Each Mortgage Note and each Mortgage is in substantially one of the forms acceptable to
FNMA or FHLMC, with such riders as have been acceptable to FNMA or FHLMC, as the case may be.



     (21) There exist no deficiencies with respect to escrow deposits and payments, if such are
required, for which customary arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due ___have been capitalized under the
Mortgage or the related Mortgage Note.



     (22) The origination, underwriting and collection practices used by the Master Servicer with
respect to each Pledged Mortgage have been in all respects legal, prudent and customary
in the Mortgage lending and servicing business.



     (23) There is no pledged account or other security other than real estate securing the
Mortgagor’s obligations.



     (24) No Pledged Mortgage has a shared appreciation feature, or other contingent interest
feature.



     (25) Each Pledged Mortgage is assumable if the proposed transferee submits certain information
required to evaluate the transferee’s ability to repay the Pledged Mortgage and the holder of the
Mortgage Note reasonably determines that the security for the Pledged Mortgage would not be
impaired by the assumption.



     (26) None of the Pledged Mortgages provides for a prepayment penalty.



     (27) Except with respect to ___Pledged Mortgages representing approximately ___% of the
Cut-off Date Pool Principal Balance, each Pledged Mortgage which had a Loan-to-Value Ratio at
origination in excess of 80% is the subject of a Primary Insurance Policy that insures that portion
of the original principal balance of the related Pledged Mortgage equal to the product of the
original principal balance thereof and a fraction, the numerator of which is the excess of the
original principal balance of the related Pledged Mortgage over 75% of the lesser of the appraised
value and selling price of the related Mortgaged Property and the denominator of which is the
original principal balance of the related Pledged Mortgage, plus accrued interest thereon and
related foreclosure expenses. Each such Primary Insurance Policy is issued by a Qualified Insurer
acceptable to each of the Rating Agencies. All provisions of any such Primary Insurance Policy
have been and are being complied with, any such policy is in full force and effect, and all
premiums due thereunder have been paid. Any Mortgage subject to any such Primary Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance and to pay all premiums and charges
in connection therewith. The Mortgage Rate for each Pledged Mortgage is net of any such insurance
premium.



III-3









 





     (28) At the Cut-off Date, the improvements upon each Mortgaged Property are covered by a valid
and existing hazard insurance policy with a generally acceptable carrier that provides for fire and
extended coverage and coverage for such other hazards as are customary in the area where the
Mortgaged Property is located in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements securing such Pledged Mortgage or (ii) the greater of (a) the
outstanding principal balance of the Pledged Mortgage and (b) an amount such that the proceeds of
such policy shall be sufficient to prevent the Mortgagor and/or the mortgagee from becoming a
co-insurer. If the Mortgaged Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. All such individual insurance policies and
all flood policies referred to in item (29) below contain a standard mortgagee clause naming
                     or the original mortgagee, and its successors in interest, as mortgagee, and                     
has received no notice that any premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance including flood insurance at the
Mortgagor’s cost and expense, and upon the Mortgagor’s failure to do so, authorizes the holder of
the Mortgage to obtain and maintain such insurance at the Mortgagor’s cost and expense and to seek
reimbursement therefor from the Mortgagor.



     (29) If the Mortgaged Property is in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood Insurance Administration is in
effect with respect to such Mortgaged Property with a generally acceptable carrier in an amount
representing coverage not less than the least of (A) the original outstanding principal balance of
the Pledged Mortgage, (B) the minimum amount required to compensate for damage or loss on a
replacement cost basis, or (C) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.



     (30) To the best of                     ’s knowledge, there is no proceeding pending or threatened for the
total or partial condemnation of any Mortgaged Property, nor is such a proceeding currently
occurring.



     (31) There is no material monetary default existing under any Mortgage or the related Mortgage
Note and, to the best of the Issuer’s knowledge, there is no material event which, with the passage
of time or with notice and the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under the Mortgage or the related Mortgage Note; and
                     has not waived any default, breach, violation or event of acceleration.



     (32) Other than with respect to Mortgaged Property underlying a Cooperative Loan, each
Mortgaged Property is improved by a one- to four-family residential dwelling including condominium
units and dwelling units in PUDs, which, to the best of                     ’s knowledge, does not include
mobile homes and does not constitute other than real property under state law.



     (33) Each Pledged Mortgage is being serviced by the Master Servicer or a Servicer as provided
in Section 3(b) of the Master Servicing Agreement.



     (34) There is no obligation on the part of the Issuer or any other party under the terms of
the Mortgage or related Mortgage Note to make payments in addition to those made by the Mortgagor.



     (35) Any future advances made 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 reflected on the Schedule of
Pledged Mortgages. The consolidated principal amount does not exceed the original principal amount
of the Pledged Mortgage. The Mortgage Note does not permit or obligate the Master Servicer to make
future advances to the Mortgagor at the option of the Mortgagor.



III-4









 





     (36) There are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every such item which remains unpaid
and which has been assessed, but is not yet due and payable. Except for (A) payments in the nature
of escrow payments, and (B) interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is later, to the day which precedes by one month
the Due Date of the first installment of principal and interest, including without limitation taxes
and insurance payments,                      has not advanced funds, or induced, solicited or knowingly received
any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the Mortgage.



     [(37) Each Pledged Mortgage was underwritten in all material respects in accordance with the
underwriting guidelines set forth in the Prospectus Supplement.]



     (38) Prior to the approval of the Pledged Mortgage application, an appraisal of the related
Mortgaged Property was obtained from a qualified appraiser, duly appointed by the originator, who
had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval of the Pledged
Mortgage; such appraisal is in a form acceptable to FNMA or FHLMC.



     (39) None of the Pledged Mortgages is a graduated payment mortgage loan or a growing equity
mortgage loan or subject to a buy down or similar arrangement.



     (40) Any leasehold estate securing a Pledged Mortgage has a term of not less than five years
in excess of the term of the related Pledged Mortgage.



     (41) All of the Pledged Mortgages have a payment date on or before the Due Date in the month
of the first Payment Date.



     (42) [None] of the Pledged Mortgages are Convertible Pledged Mortgages.



     [(43) As of the Closing Date, the Index for the adjustment of the Mortgage Rate of each
Pledged Mortgage is                                                             .]



     (44) The Pledged Mortgages, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.



     (45) [None] of the Pledged Mortgages are Cooperative Loans.



III-5









 





SCHEDULE IV




SEQUOIA Mortgage Trust 200__-__

Collateralized Mortgage Bonds




Representations and Warranties of the Issuer.




     Sequoia Mortgage Trust 200___-___(the “Issuer”) hereby makes the representations and warranties
set forth in this Schedule IV to the Master Servicer and the Trustee, as of the Closing Date.
Capitalized terms used but not otherwise defined in this Schedule IV shall have the meanings
ascribed thereto in the Master Servicing Agreement (the “Master Servicing Agreement”) relating to
the above-referenced Series, among                                         , as Master Servicer, Sequoia Mortgage
Trust 200___-___, as Issuer, and                                                             , as Trustee.



     (1) The Issuer is a statutory business trust duly organized, validly existing and in good
standing under the laws of the State of Delaware, and possesses all requisite authority, power,
licenses, permits and franchises to conduct any and all business contemplated by the Master
Servicing Agreement and to comply with its obligations under the terms of this Agreement, the
performance of which have been duly authorized by all necessary action.



     (2) Neither the execution and delivery of the Master Servicing Agreement by the Issuer, nor
the performance and compliance with the terms thereof by the Issuer will (A) result in a material
breach of any term or provision of the instruments creating the Issuer or governing its operations,
or (B) materially conflict with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material agreement or instrument to
which the Issuer is a party or by which it may be bound, or (C) constitute a material violation of
any statute, order or regulation applicable to the Issuer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the Issuer; and the Issuer is
not in breach or violation of any material indenture or other material agreement or instrument, or
in violation of any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or violation may materially
impair the Issuer’s ability to perform or meet any of its obligations under the Master Servicing
Agreement.



     (3) This Agreement, and all documents and instruments contemplated hereby, which are executed
and delivered by the Issuer, will, assuming due authorization, execution by and delivery to the
other parties hereto and thereto, constitute valid, legal and binding obligations of the Issuer,
enforceable in accordance with their respective terms, except that (a) the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.



     (4) No litigation is pending or, to the best of the Issuer’s knowledge, threatened against the
Issuer that would materially and adversely affect the execution, delivery or enforceability of the
Master Servicing Agreement or the ability of the Issuer to perform its obligations thereunder.



     (5) Immediately prior to the transfer and assignment of the Pledged Mortgages to the Trustee,
the Issuer had good title to, and was the sole owner of, each Pledged Mortgage free and clear of
any liens, charges or encumbrances or any ownership or participation interests in favor of any
other Person.




IV-1









 






EXHIBIT A




FORM OF INITIAL CERTIFICATION OF TRUSTEE




[date]




[Master Servicer]




[Issuer]




	 	 	 	 	 
	 

	 	Re:
	 	Master Servicing Agreement among Sequoia Mortgage Trust 200___-___, as Issuer,
                    , as Master Servicer, and                     ,as Trustee,
Collateralized Mortgage Bonds






     Gentlemen:



     In accordance with Section 2(b) of the above-captioned Master Servicing Agreement (the “Master
Servicing Agreement”), the undersigned, as Trustee, hereby certifies that, as to each Pledged
Mortgage listed in the Schedule of Pledged Mortgages (other than any Pledged Mortgage listed in the
attached schedule), it has received:




	 	(i)	 	the original Mortgage Note, endorsed as provided in the following form: “Pay
to the order of                     , without recourse”; and
	 
	 	(ii)	 	a duly executed assignment of the Mortgage (which may be included in a blanket
assignment or assignments).





     Based on its review and examination and only as to the foregoing documents, such documents
appear regular on their face and related to such Pledged Mortgage.



     The Trustee has made no independent examination of any documents contained in each Trustee
Mortgage File beyond the review specifically required in the Master Servicing Agreement.



     The Trustee makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Trustee Mortgage File of
any of the Pledged Mortgages identified on the Schedule of Pledged Mortgages, (ii) the
collectability, insurability, effectiveness or suitability of any such Pledged Mortgage or (iii)
the correctness of any information set forth in the Schedule of Pledged Mortgages, other than the
information specified in items (i) through (iv) and (vi) thereof.



     Capitalized words and phrases used herein shall have the respective meanings assigned to them
in the Master Servicing Agreement.



	 	 	 
	 

	 	                                                            
	 

	 	as Trustee
	 
	 	 
	 

	 	By:                                                            
	 

	 	Name:                                                            
	 

	 	Title:                                                            








A-1









 








EXHIBIT B




FORM OF FINAL CERTIFICATION OF TRUSTEE




[date]




[Master Servicer]




[Issuer]




	 	 	 	 	 
	 

	 	Re:
	 	Master Servicing Agreement among Sequoia Mortgage Trust 200___-___, as Issuer,
                                         , as Master Servicer, and                     ,as Trustee,
Collateralized Mortgage Bonds,






     Gentlemen:



     In accordance with Section 2(b) of the above-captioned Master Servicing Agreement (the “Master
Servicing Agreement”), the undersigned, as Trustee, hereby certifies that as to each Pledged
Mortgage listed in the Schedule of Pledged Mortgages (other than any Pledged Mortgage paid in full
or listed on the attached Document Exception Report) it has received:



     (i) The original Mortgage Note, endorsed in the form provided in Section 2(a) of the Master
Servicing Agreement, with all intervening endorsements showing a complete chain of endorsement from
the originator to the Issuer.



     (ii) The original recorded Mortgage.



     (iii) A duly executed assignment of the Mortgage in the form provided in Section 2(a) of the
Master Servicing Agreement, or, if the Master Servicer has certified or the Trustee otherwise knows
that the related Mortgage has not been returned from the applicable recording office, a copy of the
assignment of the Mortgage (excluding information to be provided by the recording office).



     (iv) The original or duplicate original recorded assignment or assignments of the Mortgage
showing a complete chain of assignment from the originator to the Issuer.



     (v) The original or duplicate original lender’s title policy and all riders thereto or, any
one of an original title binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company.



     Based on its review and examination and only as to the foregoing documents, (a) such documents
appear regular on their face and related to such Pledged Mortgage, and (b) the information set
forth in items (i), (ii), (iii), (iv), (vi) and (xi) of the definition of the “Schedule of Pledged
Mortgages” in Section 1.01 of the Master Servicing Agreement accurately reflects information set
forth in the Trustee Mortgage File.



     The Trustee has made no independent examination of any documents contained in each Trustee
Mortgage File beyond the review specifically required in the Master Servicing Agreement. The
Trustee makes no representations as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in each Trustee Mortgage File of any of the Pledged
Mortgages identified on the Schedule of Pledged Mortgages, or (ii) the collectability,
insurability, effectiveness or suitability of





B-1









 







any such Pledged Mortgage. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any endorsement is sufficient
to transfer all right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.




     Capitalized words and phrases used herein shall have the respective meanings assigned to them
in the Master Servicing Agreement.



	 	 	 
	 

	 	                                                            
	 

	 	as Trustee
	 
	 	 
	 

	 	By:                                                            
	 

	 	Name:                                                            
	 

	 	Title:                                                            








B-2









 








EXHIBIT C




REQUEST FOR RELEASE

(for Trustee)




Sequoia Mortgage Trust 200__-__

Collateralized Mortgage Bonds




Loan Information




Name of Mortgagor:                                                                                                                                                                                                                                                




Servicer:                                                                                                                                                                                                                                                




Loan No:                                                                                                                                                                                                                                                




Trustee




Name:                                                                                                                                                                                                                                                




Address                                                                                                                                                                                                                                                




Trustee




Mortgage File No:                                                                                                                                                                                                                                                




     The undersigned Master Servicer hereby acknowledges that it has received from
                                        , as Trustee for the Holders of Bonds of the above-referenced Series,
the documents referred to below (the “Documents”). All capitalized terms not otherwise defined in
this Request for Release shall have the meanings given them in the Master Servicing Agreement (the
“Master Servicing Agreement”) relating to the above-referenced Series among the Trustee,                                         , as Master Servicer, and Sequoia Mortgage Trust 200_-_1,
as Issuer.



     ( )      Mortgage Note dated                     ,19___, in the original principal sum of $                    , made
by                      . payable to, or endorsed to the order of, the Trustee.



     ( )      Mortgage recorded on                      as instrument no.                      in the
County Recorder’s Office of the County of                     , State of                      in
book/reel/docket                      of official records at page/image                     .



     ( )      Deed of Trust recorded on                      as instrument no.                      in the
County Recorder’s Office of the County of                      State of                      in
book/reel/docket                      of official records at page/image                     .



     ( )      Assignment of Mortgage or Deed of Trust to the Trustee, recorded on                      as
instrument no.                                           in the County Recorder’s Office of the County of                     , State of
                     in book/reel/docket                      of official records at page/image
                    .





C-1









 








     ( )      Other documents, including any amendments, assignments or other assumptions of the
Mortgage Note or Mortgage.



     ( )                                                                  



     ( )                                                                  



     ( )                                                                  



     ( )                                                                  



     The undersigned Master Servicer hereby acknowledges and agrees as follows:



     (1) The Master Servicer shall hold and retain possession of the Documents in trust for the
benefit of the Trustee, solely for the purposes provided in the Agreement.



     (2) The Master Servicer shall not cause or knowingly permit the Documents to become subject
to, or encumbered by, any claim, liens, security interest, charges, writs of attachment or other
impositions nor shall the Master Servicer assert or seek to assert any claims or rights of setoff
to or against the Documents or any proceeds thereof.



     (3) The Master Servicer shall return each and every Document previously requested from the
Trustee Mortgage File to the Trustee when the need therefor no longer exists, unless the Pledged
Mortgage relating to the Documents has been liquidated and the proceeds thereof have been remitted
to the Bond Account and except as expressly provided in the Master Servicing Agreement.



     (4) The Documents and any proceeds thereof, including any proceeds of proceeds, coming into
the possession or control of the Master Servicer shall at all times be earmarked for the account of
the Trustee, and the Master Servicer shall keep the Documents and any proceeds separate and
distinct from all other property in the Master Servicer’s possession, custody or control.



	 	 	 
	 

	 	                                                            
	 
	 	 
	 

	 	By:                                                            
	 

	 	Name:                                                            
	 

	 	Title:                                                            






     Date:                                                            





C-2









 








EXHIBIT D




REQUEST FOR RELEASE OF DOCUMENTS




     To:                                                                                                                        



	 	 	 	 	 
	 

	 	Re:
	 	The Master Servicing Agreement dated                      ___, 19___among
                     (“                    ”), as Master Servicer, Sequoia Mortgage Trust 200___-___, as
Issuer, and                     , as Trustee






Ladies and Gentlemen:




     In connection with the administration of the Pledged Mortgages held by you as Trustee for
Sequoia Mortgage Trust 200___-___, as Issuer, we request the release of the Trustee Mortgage File for
the Pledged Mortgage(s) described below, for the reason indicated.


FT Account#:                                         Pool #:



Mortgagor’s Name, Address and Zip Code:



Pledged Mortgage Number:



Reason for Requesting Documents (check one)




                         1. Pledged Mortgage paid in full (                     hereby certifies that all amounts have
been received.)



                         2. Pledged Mortgage Liquidated (                     hereby certifies that all proceeds of
foreclosure, insurance, or other liquidation have been finally received.)



                         3. Pledged Mortgage in Foreclosure.



                         4. Other (explain):                                         



     If item 1 or 2 above is checked, and if all or part of the Trustee Mortgage File was
previously released to us, please release to us our previous receipt on file with you, as well as
an additional documents in your possession relating to the above-specified Pledged Mortgage. If
item 3 or 4 is checked, upon return of all of the above documents to you as Trustee, please
acknowledge your receipt by signing in the space indicated below, and returning this form.



	 	 	 
	 

	 	                                                            
	 
	 	 
	 

	 	By:                                                            
	 

	 	Name:                                                            
	 

	 	Title:                                                            






Date:                                                            






D-1









 








TRUSTEE CONSENT TO RELEASE AND

ACKNOWLEDGEMENT OF RECEIPT




                                                                                                                        




By:                                                            

Name:                                                            

Title:                                                            




Date:                                                            






D-2









 








EXHIBIT E




SERVICING CRITERIA




     The assessments of compliance to be delivered by the Master Servicer pursuant to this
Agreement and by the Trustee pursuant to the Indenture shall address, at a minimum, the criteria
identified as below as “Applicable Servicing Criteria” with respect to such party:



     Where there are multiple checks for criteria the attesting party will identify in their management
assertion that they are attesting only to the portion of the distribution chain they are
responsible for in the related transaction agreements.



	 	 	 	 	 	 	 	 	 
	Regulation AB	 	 	 	 	 	 	 	 
	Reference	 	Servicing Criteria	 	Servicers	 	Master Servicer	 	Trustee
	 

	 	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
	 	X
	 	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
	 	X	 	 
	1122(d)(1)(iii)

	 	Any requirements in the transaction
agreements to maintain a back-up
servicer for the Pool Assets 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
	 	X	 	 
	 

	 	Cash Collection and Administration	 	 	 	 	 	 
	1122(d)(2)(i)

	 	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.
	 	X
	 	X
	 	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
	 	X
	 	X
	1122(d)(2)(iii)

	 	Advances of funds or guarantees
regarding collections, cash flows or
distributions, and

	 	X
	 	X	 	 






E-1









 






	 	 	 	 	 	 	 	 	 
	Regulation AB	 	 	 	 	 	 	 	 
	Reference	 	Servicing Criteria	 	Servicers	 	Master Servicer	 	Trustee
	 	 	
any interest or
other fees charged for such advances,
are made, reviewed and approved as
specified in the transaction
agreements.
	 
	 
	 	 
	1122(d)(2)(iv)

	 	The related accounts for the
transaction, such as cash reserve
accounts or accounts established as a
form of over collateralization, are
separately maintained (e.g., with
respect to commingling of cash) as
set forth in the transaction
agreements.
	 	X
	 	X
	 	X
	1122(d)(2)(v)

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

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

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


	 	X
	 	X
	 	X






E-2









 






	 	 	 	 	 	 	 	 	 
	Regulation AB	 	 	 	 	 	 	 	 
	Reference	 	Servicing Criteria	 	Servicers	 	Master Servicer	 	Trustee
	 	 	
the total unpaid principal balance and number of pool Assets serviced
by the Servicer.
	 
	 
	 	 
	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
	 	X
	 	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
	 	X
	 	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
	 	X
	 	X
	 

	 	Pool Asset Administration	 	 	 	 	 	 
	1122(d)(4)(i)

	 	Collateral or security on pool assets
is maintained as required by the
transaction agreements or related
pool asset documents.
	 	X	 	 	 	 
	1122(d)(4)(ii)

	 	Pool assets 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 pool assets, including
any payoffs, made in accordance with
the related pool asset 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 pool asset documents.
	 	X	 	 	 	 
	1122(d)(4)(v)

	 	The Servicer’s records regarding the
pool assets 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 pool assets
(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	 	 	 	 






E-3









 






	 	 	 	 	 	 	 	 	 
	Regulation AB	 	 	 	 	 	 	 	 
	Reference	 	Servicing Criteria	 	Servicers	 	Master Servicer	 	Trustee
	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 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 the entity’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).
	 	X	 	 	 	 
	1122(d)(4)(ix)

	 	Adjustments to interest rates or
rates of return for pool assets with
variable rates are computed based on
the related pool asset documents.
	 	X	 	 	 	 
	1122(d)(4)(x)

	 	Regarding any funds held in trust for

an obligor (such as escrow accounts):
	 	X	 	 	 	 
	 

	 	(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 assets, or such
other number of days specified in the
transaction agreements.	 	 	 	 	 	 
	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
	 	X	 	 	 	 






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	Regulation AB	 	 	 	 	 	 	 	 
	Reference	 	Servicing Criteria	 	Servicers	 	Master Servicer	 	Trustee
	 

	 	funds and not
charged to the obligor, unless the
late payment was due to the obligor’s
error or omission.	 	 	 	 	 	 
	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
	 	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.	 	 	 	 	 	 






	 	 	 
	 

	 	[NAME OF COMPANY]
	 
	 	 
	 

	 	By:
	 
	 	 
	 

	 	Name:                                                                                                                    
	 
	 	 
	 

	 	Title:                                                                                                                    
	 
	 	 
	 

	 	Date:                                                                                                                    







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