**Exhibit 10.18**

 

 

 

UBS Real EstateSecurities Inc.,as UBS,

 

MortgageIT SPV I,on behalf of the TRS Sub-Trust

 

and

 

MortgageIT, Inc.,as TRS Servicer

 

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TRS SERVICINGAGREEMENT

 

Dated as ofAugust 4, 2004

 

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ConventionalResidential Mortgage Loans

 

 

 

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TABLE OF CONTENTS

 
| ARTICLE I  DEFINITIONS                                                            |                                                                                   |
|----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|
|                                                                                   |                                                                                   |   |
| ARTICLE II  AGREEMENT TO PURCHASE, CONVEYANCE, AND DELIVERY OF THE MORTGAGE LOANS |                                                                                   |
|                                                                                   |                                                                                   |   |
| Section 2.01                                                                      | Conveyance  of Mortgage Loans; Possession of Submission Packages; Books & Records. |   |
|                                                                                   |                                                                                   |   |
| ARTICLE III  REPRESENTATIONS AND WARRANTIES                                       |                                                                                   |
|                                                                                   |                                                                                   |   |
| Section 3.01                                                                      | Servicer  Representations and Warranties.                                              |   |
|                                                                                   |                                                                                   |   |
| ARTICLE IV  ADMINISTRATION AND SERVICING OF MORTGAGE LOANS                        |                                                                                   |
|                                                                                   |                                                                                   |   |
| Section 4.01                                                                      | TRS  Servicer to Act as TRS Servicer.                                                  |   |
| Section 4.02                                                                      | Liquidation  of Mortgage Loans.                                                        |   |
| Section 4.03                                                                      | Collection  of Mortgage Loan Payments.                                                 |   |
| Section 4.04                                                                      | Deposits to  Blocked Account.                                                          |   |
| Section 4.05                                                                      | Permitted  Withdrawals from Blocked Account.                                           |   |
| Section 4.06                                                                      | Escrow  Account.                                                                       |   |
| Section 4.07                                                                      | Payment of  Taxes, Insurance and Other Charges.                                        |   |
| Section 4.08                                                                      | Protection  of Accounts.                                                               |   |
| Section 4.09                                                                      | Maintenance  of Hazard Insurance.                                                      |   |
| Section 4.10                                                                      | Maintenance  of Mortgage Impairment Insurance.                                         |   |
| Section 4.11                                                                      | Maintenance  of Fidelity Bond and Errors and Omissions Insurance.                      |   |
| Section 4.12                                                                      | Delivery of  Document in Possession of Custodian.                                      |   |
| Section 4.13                                                                      | Restoration  of Mortgaged Property.                                                    |   |
| Section 4.14                                                                      | Title,  Management and Disposition of REO Property.                                    |   |
| Section 4.15                                                                      | Sub  Servicer.                                                                         |   |
|                                                                                   |                                                                                   |   |
| ARTICLE V  NOTIFICATION; STATEMENTS                                               |                                                                                   |
|                                                                                   |                                                                                   |   |
| Section 5.01                                                                      | Notifications                                                                          |   |
| Section 5.02                                                                      | Monthly  Reports.                                                                      |   |
|                                                                                   |                                                                                   |   |
| ARTICLE VI  GENERAL SERVICING PROCEDURES                                          |                                                                                   |
|                                                                                   |                                                                                   |   |
| Section 6.01                                                                      | Transfers  of Mortgaged Property.                                                      |   |
| Section 6.02                                                                      | Satisfaction  of Mortgages and Release of Submission Packages.                         |   |
| Section 6.03                                                                      | Servicing  Compensation.                                                               |   |
|                                                                                   |                                                                                   |   |
| ARTICLE VII  THE TRS SERVICER                                                     |                                                                                   |
|                                                                                   |                                                                                   |   |
| Section 7.01                                                                      | Indemnification;  Third Party Claims.                                                  |   |

 

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| Section 7.02                             | Merger or  Consolidation of the TRS Servicer.          |   |
|-----------------------------------------------|--------------------------------------------------------|--------|
| Section 7.03                             | Limitation  on Liability of Servicer and Others.       |   |
| Section 7.04                             | Limitation  on Resignation and Assignment by Servicer. |   |
|                                          |                                                   |   |
| ARTICLE VIII  DEFAULT                    |                                                   |
|                                          |                                                   |   |
| Section 8.01                             | Events of  Default.                                    |   |
| Section 8.02                             | Waiver of  Defaults.                                   |   |
|                                          |                                                   |   |
| ARTICLE IX  TERMINATION                  |                                                   |
|                                          |                                                   |   |
| Section 9.01                             | Termination.                                           |   |
| Section 9.02                             | Retention  and Termination of TRS Servicer.            |   |
|                                          |                                                   |   |
| ARTICLE X  SUCCESSOR TO THE TRS SERVICER |                                                   |
|                                          |                                                   |   |
| Section 10.01                            | Successor  to Servicer.                                |   |
|                                          |                                                   |   |
| ARTICLE XI  MISCELLANEOUS PROVISIONS     |                                                   |
|                                          |                                                   |   |
| Section 11.01                            | Transfer  of Servicing                                 |   |
| Section 11.02                            | Amendment.                                             |   |
| Section 11.03                            | Governing  Law; Jurisdiction.                          |   |
| Section 11.04                            | Notices.                                               |   |
| Section 11.05                            | Severability  of Provisions.                           |   |
| Section 11.06                            | Relationship  of Parties.                              |   |
| Section 11.07                            | Execution;  Successors and Assigns.                    |   |
| Section 11.08                            | Recordation  of Assignments of Mortgage.               |   |
| Section 11.09                            | Merger  and Integration                                |   |
| Section 11.10                            | Headings                                               |   |
| Section 11.11                            | Schedules  and Exhibits                                |   |
| Section 11.12                            | No Bankruptcy  Petition Against the Trust              |   |
| Section 11.13                            | Right to  Inspect                                      |   |
| Section 11.14                            | No  Recourse                                           |   |

 

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This is a TRSServicing Agreement for conventional fixed-rate and adjustable-rate residentialfirst and second mortgage loans, dated as of August 4, 2004 and as may beamended and/or restated from time to time (this “Servicing Agreement” orthis “Agreement”), and is executed among UBS Real Estate SecuritiesInc., as purchaser under the Loan Repurchase Agreement, the Loan ParticipationAgreement and the Loan Purchase Agreement referred to below (in such capacity,“UBS”), MortgageIT SPV I (the “Trust”) acting with respect to theTRS Sub-Trust and MortgageIT, Inc. (“MortgageIT”), as servicer (in suchcapacity, the “TRS Servicer”).

 

**W I T N E S S E T H**

 

WHEREAS,MortgageIT has agreed to sell and contribute to the TRS Sub-Trust and the TRSSub-Trust has agreed to purchase from time to time certain mortgage loanspursuant to a Loan Sale Agreement, dated as of the date hereof betweenMortgageIT, MortgageIT Holdings, Inc. and the TRS Sub-Trust (as amended,supplemented or otherwise modified and in effect from time to time, the “LoanSale Agreement”) on a servicing-released basis, and on the basis that MortgageITwill act as TRS Servicer in the case of mortgage loans sold and contributed byMortgageIT to the TRS Sub-Trust pursuant to such agreement (the “MortgageLoans”);

 

WHEREAS, pursuantto a Mortgage Loan Repurchase Agreement, dated as of the date hereof betweenthe Trust on behalf of the TRS Sub-Trust and UBS (as amended, supplemented orotherwise modified and in effect from time to time, the “Loan RepurchaseAgreement”), a Mortgage Loan Participation Agreement, dated as of the datehereof between the Trust on behalf of the TRS Sub-Trust and UBS (as amended,supplemented or otherwise modified and in effect from time to time, the “LoanParticipation Agreement”) and a Mortgage Loan Purchase Agreement, dated asof the date hereof between the Trust on behalf of the TRS Sub-Trust and UBS (asamended, supplemented or otherwise modified and in effect from time to time,the “Loan Purchase Agreement”), UBS has agreed to purchase, from time totime, at its sole election from the TRS Sub-Trust, the Mortgage Loans;

 

WHEREAS, GMACMortgage Corporation (“GMAC”) has agreed to act as the sub-servicer withrespect to some or all of the Mortgage Loans;

 

WHEREAS, thoseMortgage Loans shall be delivered as whole loans on various Purchase Dates asprovided herein as indicated on the Mortgage Loan Schedule, which is to beannexed hereto on the related Purchase Date as part of Exhibit A;

 

WHEREAS, UBS, theTRS Sub-Trust and the TRS Servicer wish to prescribe the manner of management,servicing and control of the Mortgage Loans;

 

NOW, THEREFORE, inconsideration of the mutual agreements hereinafter set forth, and for othergood and valuable consideration, the receipt and adequacy of which is herebyacknowledged, UBS, the TRS Sub-Trust and the TRS Servicer agree as follows:

 

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**ARTICLE I**

 

**DEFINITIONS**

 

For all purposesof this Servicing Agreement, except as otherwise expressly provided herein orunless the context otherwise requires, capitalized terms not otherwise definedherein shall have the meanings assigned to such terms in the Definitions Listattached as Schedule 1 to the Loan Sale Agreement  (the “Definitions List”).

 

Administration Agreement:  The Administration Agreement dated as ofAugust 4, 2004, between the Trust and MortgageIT as the administrator ofthe Trust, as amended, supplemented or otherwise modified from time to time.

 

Affiliate:  With respect to any Person, any “affiliate”of such Person, as such term is defined in the Bankruptcy Code, other than anatural person.  It is specificallyagreed that the TRS Sub-Trust, MortgageIT and MortgageIT Holdings are“Affiliates” of each other.

 

Agreement:  This Servicing Agreement and all amendmentshereof and supplements hereto.

 

ALTA:  The American Land Title Association or anysuccessor thereto.

 

Ancillary Income:  All fees and amounts charged to theMortgagor by the TRS Servicer for services necessary to the servicing of theMortgage Loans, including but not limited to late charges, NSF Fees,administrative charges (e.g., copying charges for duplicate documents, andcharges for opening escrow accounts), assumption fees and release andreconveyance fees.

 

Blocked Account:  Both collectively and individually, each ofthe accounts established by the TRS Servicer under the Blocked AccountAgreement for the benefit of UBS, which is subject to a security interest infavor of UBS.  The Blocked Account shallonly apply to the Mortgage Loans not being sub-serviced by GMAC, unless UBSdirects otherwise.

 

Blocked Account Agreement:  The Blocked Account Agreement dated as ofAugust 4, 2004, among the TRS Servicer, the Trust on behalf of the TRSSub-Trust, UBS and HSBC Bank as the depository bank, as amended, supplementedor otherwise modified from time to time.

 

CondemnationProceeds:  All awardsor settlements in respect of a Mortgaged Property, whether permanent ortemporary, partial or entire, by exercise of the power of eminent domain orcondemnation, to the extent not required to be released to a Mortgagor inaccordance with the terms of the related Mortgage Documents.

 

CustodialAgreement:  TheCustodial Agreement, dated as of August 4, 2004, among the Trust, theCustodian, MortgageIT, MortgageIT Holdings and UBS, as the same shall bemodified and supplemented and in effect from time to time.

 

Custodian:  JPMorgan Chase Bank, as custodian under theCustodial Agreement, and its successors and permitted assigns thereunder.

 

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Due Date:  The day of the month on which the MonthlyPayment is due on a Mortgage Loan, exclusive of any days of grace.

 

Due Period:  With respect to each Payment Date, theperiod commencing on the first day of the month preceding the month of thePayment Date and ending on the last day of the month preceding the month of thePayment Date.

 

Electronic Tracking Agreement:  The Electronic Tracking Agreement, dated asof August 4, 2004, among UBS, the Trust, MortgageIT, MortgageIT Holdings,MERSCORP, Inc. and Mortgage Electronic Registration Systems, Inc., as the sameshall be amended, supplemented or otherwise modified from time to time;provided that if no Mortgage Loans are or will be MERS Designated MortgageLoans, all references herein to the Electronic Tracking Agreement shall bedisregarded.

 

Eligible Account:  (i) An account or accounts maintained with adepository institution the short-term debt obligations of which are rated AA orbetter by Standard & Poors Ratings Services, or (ii) an account or accountsthe deposits in which are fully insured by the FDIC, or (iii) a trust accountor accounts maintained with a federal or state chartered depository institutionor trust company acting in its fiduciary capacity, the debt obligations ofwhich are rated A-1 or better by Standard & Poors Ratings Services.

 

Errors and OmissionsInsurance Policy:  Anerrors and omissions insurance policy to be maintained by the TRS Servicerpursuant to Section 4.11.

 

Escrow Account:  The separate account or accounts created andmaintained pursuant to Section 4.06.

 

Escrow Payments:  With respect to any Mortgage Loan, theamounts constituting any of ground-rents, taxes, assessments, water rates,sewer rents, municipal charges, mortgage insurance premiums, fire and hazardinsurance premiums, condominium charges, and any other payments required to beescrowed by the Obligor with the Mortgagee pursuant to the Mortgage or anyother document.

 

Event of Default:  Any one of the conditions or circumstancesenumerated in Section 8.01.

 

FDIC:  The Federal Deposit Insurance Corporation orany successor thereto.

 

Fidelity Bond:  A fidelity bond to be maintained by the TRSServicer pursuant to Section 4.11.

 

Insurance Proceeds:  With respect to each Mortgage Loan, proceedsof insurance policies insuring the Mortgage Loan or the related MortgagedProperty.

 

Insured DepositoryInstitution:  InsuredDepository Institution shall have the meaning ascribed to such term bySection 1813(c)(2) of Title 12 of the United States Code, as amended fromtime to time.

 

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LiquidationProceeds:  Cash(exclusive of REO Disposition Proceeds) received in connection with theliquidation of a defaulted Mortgage Loan, whether through the sale orassignment of such Mortgage Loan, trustee’s sale, foreclosure sale orotherwise, or the sale of the related Mortgaged Property if the MortgagedProperty is acquired in satisfaction of the Mortgage Loan.

 

Loan SaleAgreement:  The LoanSale Agreement, dated as of August 4, 2004, among MortgageIT as a seller,MortgageIT Holdings as a seller, and the Trust as purchaser, as amended,supplemented or otherwise modified from time to time.

 

Monthly Payment:  The scheduled monthly payment of principaland interest on a Mortgage Loan.

 

MortgageImpairment Insurance Policy: A mortgage impairment or blanket hazard insurance policy as described inSection 4.10.

 

Mortgage InterestRate:  The annual rateof interest borne on a Mortgage Loan and, with respect to adjustable rateMortgage Loans, as adjusted from time to time in accordance with the provisionsof the Mortgage Note.

 

Mortgage LoanMaturity Date:  Thefinal maturity date as set forth on the Mortgage Note of a Mortgage Loan.

 

Mortgage LoanRemittance Rate:  Withrespect to each Mortgage Loan, an annual rate of interest equal to the MortgageInterest Rate.

 

Person:Any individual, corporation, company, voluntary association, partnership, jointventure, limited liability company, trust, unincorporated association orgovernment (or any agency, instrumentality or political subdivision thereof).

 

Prepayment Charge:  The fee, if any is provided for in therelated Mortgage Note, to be paid by the Mortgagor for the privilege to prepaythe principal obligation of the related Mortgage Loan prior to the relatedMortgage Loan Maturity Date; which when required by the terms of the MortgageNote shall be collected by the TRS Servicer upon the Mortgagor’s full andvoluntary Principal Prepayment except to the extent that: (1) theenforceability thereof may be limited by bankruptcy, insolvency, moratorium,receivership and other similar laws relating to debtors’ and creditors’ rightsgenerally; (2) the collectibility thereof may be limited due to acceleration inconnection with a foreclosure or other involuntary prepayment; (3) subsequentchanges in state or federal law (including decisional authority) limit orprohibit enforceability of the applicable charge; or (4) a servicer has, inresponse to a default as provided for in Section 4.01 of this Agreement,waived, altered, limited or forgiven the Prepayment Charge provided in therelated Note.

 

PrincipalPrepayment:  Any fulland voluntary principal payment made by the Mortgagor or other recovery ofprincipal on a Mortgage Loan which is received in advance of its scheduled DueDate, including any Prepayment Charge or premium thereon, if applicable underthe terms of the Mortgage Documents, and which is not accompanied by an amountof interest

 

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representing scheduled interest due on any date or dates in any monthor months subsequent to the month of prepayment.

 

Purchase Date:  With respect to a Mortgage Loan, the date onwhich UBS purchases such Mortgage Loan from the TRS Sub-Trust.

 

REO Disposition:  The final sale by the TRS Servicer of anyREO Property.

 

REO DispositionProceeds:  All amountsreceived with respect to an REO Disposition pursuant to Section 4.14.

 

REO Property:  A Mortgaged Property acquired by the TRSServicer on behalf of the TRS Sub-Trust and the Purchaser through foreclosureor by deed in lieu of foreclosure, as described in Section 4.14.

 

Securities Act of1933 or the 1933 Act: The Securities Act of 1933, as amended.

 

Sellers:  MortgageIT and MortgageIT Holdings, in theircapacity as sellers under the Loan Sale Agreement.

 

Servicing Advances:  All customary, reasonable and necessary “outof pocket” costs and expenses (including reasonable attorneys’ fees anddisbursements) incurred in the performance by the TRS Servicer of its servicingobligations, including, but not limited to, the cost of (a) the preservation,restoration and protection of the Mortgaged Property, (b) any enforcement orjudicial proceedings, including foreclosures, (c) the management andliquidation of any REO Property and (d) compliance with the obligations underSection 4.07.

 

Servicing Fee:With respect to each Mortgage Loan, the amount of the annual fee payable to theTRS Servicer from the Monthly Payment collected by the TRS Servicer during theprior Due Period, which shall be, without pro ration or portion thereof, equalto: one-twelfth of the product of (a) the Servicing Fee Rate and (b) theoutstanding principal balance of the related Mortgage Loan as of the beginningof the month balance.  The TRSServicer’s right of reimbursement for the earned Servicing Fee by monthlywithdrawal from the Blocked Account pursuant to Section 4.05 shall relateto funds payable as collections and/or recoveries on the related Mortgage Loan.

 

Servicing Fee Rate:  0.50% per annum.

 

Servicing File:  With respect to each Mortgage Loan, the fileretained by the TRS Servicer consisting of originals or copies of all MortgageLoan Documents from the Submission Package.

 

Servicing Officer:  Any officer of the TRS Servicer involved inor responsible for, the administration and servicing of the Mortgage Loans whosename appears on a list of servicing officers furnished by the TRS Servicer tothe TRS Sub-Trust upon request, as such list may from time to time be amended.

 

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Servicing TransferDate:  The effective dateof a transfer of servicing from the TRS Servicer to a Successor Servicer, asprovided in Section 11.01 of this Agreement.

 

Stated TerminationDate:  August 31,2005, as such date may be extended as provided in Section 9.01 hereof.

 

Submission Package:  With respect to each Mortgage Loan, a DrySubmission Package, a Cash Window Submission Package, a Conduit SubmissionPackage or a Conversion Submission Package, as applicable, as such terms aredefined in Schedule 1 to the Loan Sale Agreement.

 

TransactionDocuments:  The LoanSale Agreement, the Loan Repurchase Agreement, the Loan ParticipationAgreement, the Loan Purchase Agreement, the Custodial Agreement, the ServicingAgreement, the Blocked Account Agreement, the Trust Agreement, the ElectronicTracking Agreement and the Administration Agreement.

 

TRS Servicer:  MortgageIT, Inc., or its successor ininterest or assigns, or any successor to the TRS Servicer under this Agreementappointed as herein provided.

 

Trust:  MortgageIT SPV I, a Delaware statutorytrust.

 

Trust Agreement:The Trust Agreement dated as of August 4, 2004, between MortgageIT,MortgageIT Holdings, and Wilmington Trust Company, as Owner Trustee, asamended, supplemented or otherwise modified from time to time.

 

# **ARTICLE II**

# ** **

# **AGREEMENT TOPURCHASE, CONVEYANCE,AND DELIVERY OF THE MORTGAGE LOANS**

# ** **

Section 2.01                                Conveyanceof Mortgage Loans;   Possession ofSubmission Packages; Books & Records.

 

### (a)                                  Conveyanceof Mortgage Loans; Delivery of Mortgage Loan Documents.  Pursuant to the Loan Sale Agreement, on eachPurchase Date, MortgageIT shall sell, transfer, assign, set over and convey tothe TRS Sub-Trust, without recourse, and on a servicing-released basis, butsubject to the terms of this Agreement, all its right, title and interest inand to the Mortgage Loans.  Pursuant tothe Loan Repurchase Agreement, the Loan Participation Agreement and the LoanPurchase Agreement, on each Purchase Date, the TRS Sub-Trust shall sell,transfer, assign, set over and convey to UBS, without recourse and on a servicing-releasedbasis, but subject to the terms of this Agreement, all its right, title andinterest in and to the Mortgage Loans. From and after the sale of the Mortgage Loans to the TRS Sub-Trust, allrights arising out of such the Mortgage Loans including but not limited to allfunds received on or in connection with such Mortgage Loans, shall be receivedand held by the TRS Servicer in trust for the benefit of UBS as owner of suchMortgage Loans, and should the TRS Servicer retain record title to a relatedMortgage, such title shall be held by the TRS Servicer for the sole purpose offacilitating the servicing of the related Mortgage Loan.

 

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### (b)                                 Possessionof Submission Packages.  As of therelated Purchase Date, MortgageIT will have delivered and released to therelated Custodian those Mortgage Documents as required by the Loan SaleAgreement and the Custodial Agreement with respect to each Mortgage Loan.  The contents of each Submission Package not deliveredto the related Custodian are and shall be held in trust by the TRS Servicer forthe benefit of UBS as the owner.  TheTRS Servicer shall maintain a Servicing File consisting of a copy of thecontents of each Submission Package and the originals of the documents in eachSubmission Package not delivered to the related Custodian.  The possession of each Servicing File by theTRS Servicer is at the will of UBS for the sole purpose of servicing therelated Mortgage Loan, and such retention and possession by the TRS Servicer isin a custodial capacity only.  On therelated Purchase Date the ownership of each related Mortgage Note, the relatedMortgage and the related Mortgage Documents and Servicing File shall vestimmediately in the TRS Sub-Trust, and the ownership of all records anddocuments with respect to the related Mortgage Loan prepared by or which comeinto the possession of the TRS Servicer shall vest immediately in UBS and shallbe retained and maintained by the TRS Servicer, in trust, at the will of UBSand only in such custodial capacity. Each Servicing File shall be segregated from the other books and recordsof the TRS Servicer and shall be marked appropriately to reflect clearly thesale of the related Mortgage Loan to UBS. The TRS Servicer shall release its custody of the contents of anyServicing File only in accordance with written instructions from UBS, unlesssuch release is required as incidental to: (i) the TRS Servicer’s servicing ofthe Mortgage Loans; or (ii) a release or reconveyance pursuant toSection 6.02.

###  

### (c)                                  Books& Records.  To the extent thatthe original documents are not required for purposes of realization ofLiquidation Proceeds or Insurance Proceeds, documents maintained by the TRSServicer may be in the form of microfilm or microfiche or such other reliablemeans of recreating original documents, including but not limited to, opticalimagery techniques.  Notwithstanding thesale of the Mortgage Loans to the TRS Sub-Trust, the TRS Servicer may maintaina complete copy of all Mortgage Loan Files at its own expense to fulfill Stateand Federal record retention requirements applicable to sub prime mortgagelenders and/or servicers.

###  

# **ARTICLE III**

 

# **REPRESENTATIONSAND WARRANTIES**

# ** **

Section 3.01                                ServicerRepresentations and Warranties.

##  

The TRS Servicerrepresents and warrants to the TRS Sub-Trust, UBS and the Owner Trustee that asof the date hereof, and as of each Purchase Date:

 

### (a)                                  DueOrganization and Authority.  The TRSServicer is a corporation duly organized, validly existing and in good standingunder the laws of the state of New York and has all licenses necessary to carryon its business as now being conducted and is licensed, qualified and in goodstanding in each state where a Mortgaged Property is located if the laws ofsuch state require licensing or qualification in order to conduct business ofthe type conducted by the TRS Servicer, and in any event the TRS Servicer is incompliance with the laws of any such state to the extent necessary to ensurethe enforceability of the related Mortgage Loan in accordance with the terms ofthis Agreement; the TRS Servicer has the full corporate power and authority to

 

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### execute anddeliver this Agreement and to perform in accordance herewith; the execution,delivery and performance of this Agreement (including all instruments oftransfer to be delivered pursuant to this Agreement) by the TRS Servicer andthe consummation of the transactions contemplated hereby have been duly and validlyauthorized by all necessary corporate action; this Agreement evidences thevalid, binding and enforceable obligation of the TRS Servicer; and allrequisite corporate action has been taken by the TRS Servicer to make thisAgreement valid and binding upon the TRS Servicer in accordance with its terms,except as such terms may be limited by bankruptcy, insolvency, reorganization,moratorium or other similar laws affecting the rights of creditors generallyand by general principals of equity;

###  

### (b)                                 OrdinaryCourse of Business.  Theconsummation of the transactions contemplated by this Agreement are in theordinary course of business of the TRS Servicer, and the transfer, assignmentand conveyance of the Mortgage Notes and the Mortgages by the TRS Servicer pursuantto this Agreement are not subject to the bulk transfer or any similar statutoryprovisions in effect in any applicable jurisdiction;

###  

### (c)                                  NoConflicts.  Neither the executionand delivery of this Agreement, or the transactions contemplated hereby, northe fulfillment of or compliance with the terms and conditions of thisAgreement, will conflict with or result in a breach of any of the terms,conditions or provisions of the TRS Servicer’s charter or by-laws or any legalrestriction or any material agreement or instrument to which the TRS Serviceris now a party or by which it is bound, or constitute a default or result in anacceleration under any of the foregoing, or result in the violation of any law,rule, regulation, order, judgment or decree to which the TRS Servicer or itsproperty is subject;

###  

### (d)                                 Abilityto Perform.  The TRS Servicer doesnot believe, nor does it have any reason or cause to believe, that it cannotperform each and every covenant contained in this Agreement.

###  

### (e)                                  NoLitigation Pending.  There is noaction, suit, proceeding or investigation pending or to the best of the TRSServicer’s knowledge threatened against the TRS Servicer which, either in anyone instance or in the aggregate, is reasonably likely to result in any materialadverse change in the business, operations, financial condition, properties orassets of the TRS Servicer, or in any material impairment of the right orability of the TRS Servicer to carry on its business substantially as nowconducted, or in any material liability on the part of the TRS Servicer, orwhich would draw into question the validity of this Agreement or the MortgageLoans or of any action taken or to be taken in connection with the obligationsof the TRS Servicer contemplated herein, or which would be likely to impairmaterially the ability of the TRS Servicer to perform under the terms of thisAgreement;

###  

### (f)                                    NoConsent Required.  No consent,approval, authorization or order of any court or governmental agency or body isrequired for the execution, delivery and performance by the TRS Servicer of orcompliance by the TRS Servicer with this Agreement or the Mortgage Loans, orthe consummation of the transactions contemplated by this Agreement, or ifrequired, such approval has been obtained prior to the applicable PurchaseDate; and

 

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### (g)                                 NoSecurities Registration.  Neitherthe TRS Servicer nor anyone acting on its behalf has offered, transferred,pledged, sold or otherwise disposed of any Mortgage Loans, any interest in anyMortgage Loans or any other similar security to, or solicited any offer to buyor accept a transfer, pledge or other disposition of any Mortgage Loans, anyinterest in any Mortgage Loans or any other similar security from, or otherwiseapproached or negotiated with respect to any Mortgage Loans, any interest inany Mortgage Loans or any other similar security with, any Person in anymanner, or made any general solicitation by means of general advertising or inany other manner, or taken any other action which would constitute adistribution of the Mortgage Loans under the 1933 Act or which would render thedisposition of any Mortgage Loans a violation of Section 5 of the 1933 Actor require registration pursuant thereto, nor will it act, nor has itauthorized or will it authorize any Person to act, in such manner with respectto the Mortgage Loans.

###  

# **ARTICLE IV**

 

# **ADMINISTRATION ANDSERVICING OF MORTGAGE LOANS**

 

Section 4.01                                TRSServicer to Act as TRS Servicer.

##  

The TRS Servicer,as an independent contractor, shall service and administer the Mortgage Loansand shall have full power and authority, acting alone, to do any and all thingsin connection with such servicing and administration which the TRS Servicer maydeem necessary or desirable, consistent with the terms of this Agreement andwith Accepted Servicing Practices.

 

Consistent withthe terms of this Agreement, the TRS Servicer may waive any Ancillary Income orother fee that may be collected in the ordinary course of servicing theMortgage Loans.  The TRS Servicer shallnot make any future advances to any Mortgagor under any Mortgage Loan.  Unless the Mortgagor is in default withrespect to the Mortgage Loan or such default is, in the judgment of the TRSServicer, imminent, the TRS Servicer shall not permit any modification of anymaterial term of any Mortgage Loan, including any modification that wouldchange the Mortgage Interest Rate, defer or forgive the payment of principal orinterest, reduce or increase the outstanding principal balance, change thePrepayment Charge, or change the Mortgage Loan Maturity Date.  Without limiting the generality of theforegoing, the TRS Servicer shall continue, and is hereby authorized andempowered, to execute and deliver on behalf of itself, the TRS Sub-Trust andUBS, all instruments of satisfaction with respect to the Mortgage Loans andwith respect to the Mortgaged Properties. Upon the request of the TRS Servicer, the TRS Sub-Trust and UBS (on itsown behalf) shall execute and deliver to the TRS Servicer any powers ofattorney or other document furnished to it by the TRS Servicer to carry out itsservicing and administrative duties under this Agreement.

 

In servicing andadministering the Mortgage Loans, the TRS Servicer shall employ procedures andexercise the same care that it customarily employs and exercises in servicingand administering mortgage loans for its own account, giving due considerationto Accepted Servicing Practices.

 

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Section 4.02                                Liquidationof Mortgage Loans.

##  

In the event thatany payment due under any Mortgage Loan and not postponed pursuant toSection 4.01 is not paid when the same becomes due and payable, or in theevent the Mortgagor fails to perform any other covenant or obligation under theMortgage Loan and such failure continues beyond any applicable grace period,the TRS Servicer shall take such action as (1) the TRS Servicer would takeunder similar circumstances with respect to a similar mortgage loan held for itsown account for investment, (2) shall be consistent with Accepted ServicingPractices, and (3) the TRS Servicer shall reasonably and in good faithdetermine to be in the best interest of UBS. In the event that any payment due under any Mortgage Loan is notpostponed pursuant to Section 4.01 and remains delinquent for a period of90 days or any other default continues for a period of 90 days beyond theexpiration of any grace or cure period, the TRS Servicer shall exercisereasonable efforts to foreclose upon or otherwise comparably convert theownership of properties securing those Mortgage Loans which are in default andas to which no satisfactory arrangements can be made for collection ofdelinquent payments.  In suchconnection, the TRS Servicer shall from its own funds make all necessary,reasonable and proper Servicing Advances, provided, however, that the TRSServicer shall not be required to expend its own funds in connection with anyforeclosure or towards the restoration or preservation of any MortgagedProperty, unless it shall determine in its sole reasonable discretion (a) thatsuch preservation, restoration and/or foreclosure will increase the proceeds ofliquidation of the Mortgage Loan after reimbursement to itself for suchexpenses and (b) that such expenses will be recoverable by it either throughLiquidation Proceeds or through Insurance Proceeds; provided that such expensesshall be reimbursed only to the extent that the interest on the Loans and theNotes is paid in full, but neither event described in (a) and (b) above shallbe a condition precedent for the reimbursement of the TRS Servicer.

 

Section 4.03                                Collectionof Mortgage Loan Payments.

 

Continuously fromthe date hereof until the principal and interest on all Mortgage Loans are paidin full, the TRS Servicer shall proceed to collect all payments due, inaccordance with the standard of care it would use with respect to similarmortgage loans held for its own account and consistent with Accepted ServicingPractices, under each of the Mortgage Loans when the same shall become due andpayable and shall ascertain and estimate Escrow Payments in accordance with thestandard of care it would use with respect to similar mortgage loans held forits own account and consistent with Accepted Servicing Practices.

 

Section 4.04                                Depositsto Blocked Account.

 

If anyMortgage Loans are serviced by MortgageIT directly rather than serviced by GMACas sub-servicer, the provisions of this Section 4.04, Section 4.05and Section 4.08 shall control.

 

### (a)                                  TheTRS Servicer shall segregate and hold all funds collected and received relatingto the Mortgage Loans, once such funds have been received in the TRS Servicer’smaster lockbox clearing account and have been identified as relating to theMortgage Loans, separate and apart from any of its own funds and generalassets.  These funds shall be held in aBlocked Account in the form of time deposit or demand accounts, titled“MortgageIT Inc., as

 

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### Servicer, in trustfor UBS Real Estate Securities Inc. and its assignees”, established andmaintained pursuant to the Blocked Account Agreement.  The Blocked Account shall be established with HSBC Bank or anyother entity approved by UBS.  Any fundsdeposited in the Blocked Account shall at all times be fully insured to thefull extent permitted under applicable law. Funds deposited in the Blocked Account may be withdrawn therefrom by theTRS Servicer in accordance with Section 4.05.

###  

The TRS Servicer herebyassigns, pledges and grants a security interest in all of its right, title andinterest in, to and under the Blocked Account and all amounts credited theretoat any time to UBS.

 

### (b)                                 Depositsto Blocked Account.  The TRSServicer shall deposit in the Blocked Account within three (3) Business Daysafter receipt of funds, and retain therein, the following collections receivedby the TRS Servicer and remitted to UBS:

###  

#### (i)                                     allpayments on account of principal on the Mortgage Loans including PrincipalPrepayments and all amounts on account of the repurchase price of MortgageLoans received from MortgageIT, as seller pursuant to the Loan Sale Agreement;

####  

#### (ii)                                  allpayments on account of interest on the Mortgage Loans adjusted to the MortgageLoan Remittance Rate;

####  

#### (iii)                               allInsurance Proceeds including amounts required to be deposited pursuant toSection 4.10 (other than proceeds to be held in the Escrow Account andapplied to the restoration or repair of the Mortgaged Property or released tothe Mortgagor in accordance with Section 4.13), and Section 4.11;

####  

#### (iv)                              anyamounts required to be deposited by the TRS Servicer pursuant toSection 4.11 in connection with the deductible clause in any blankethazard insurance policy;

####  

#### (v)                                 allLiquidation Proceeds;

####  

#### (vi)                              allCondemnation Proceeds which are not applied to the restoration or repair of theMortgaged Property or released to the Mortgagor in accordance withSection 4.14;

####  

#### (vii)                           anyamounts received with respect to or related to any REO Property and all REODisposition Proceeds pursuant to Section 4.14; and

####  

#### (viii)                        anyamounts required to be deposited by the TRS Servicer pursuant toSection 4.08 in connection with the investment in Eligible Accounts.

####  

### (c)                                  Theforegoing requirements for deposit into the Blocked Account shall be exclusive,it being understood and agreed that, without limiting the generality of theforegoing, amounts representing the Servicing Fee collected from the interestportion of the Monthly Payment on the related Mortgage Loan and AncillaryIncome need not be deposited by the TRS Servicer into the Blocked Account,subject to the following: if the TRS Servicer receives notice from UBS that aFacility Default has occurred and is continuing, until it receives furthernotice from UBS that there is no longer any continuing Facility Default, thepreceding exception shall

 

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### not apply andAncillary Income shall be deposited by the TRS Servicer into the BlockedAccount.

###  

### (d)                                 Notwithstandinganything to the contrary in this Agreement, the TRS Servicer shall not beobligated to advance from its own funds (i) any due or delinquent, butuncollected, principal and interest related to a Mortgage Loan or (ii)compensating interest (prepayment interest shortfalls) for any Mortgage Loan.

###  

Section 4.05                                PermittedWithdrawals from Blocked Account.

##  

### (a)                                  TheTRS Servicer shall be permitted to request UBS to make the followingwithdrawals from the Blocked Account, it being understood that only UBS shall,by written instruction, be permitted to direct the bank holding the BlockedAccount to remit funds therefrom:

 

#### (i)                                     toreimburse itself for any Servicing Advances, but only from amounts received onaccount of the corresponding Mortgage Loan;

####  

#### (ii)                                  topay to itself for any income or gain realized from the investment of funds inthe Blocked Account in Eligible Accounts pursuant to Section 4.08;

####  

#### (iii)                               toreimburse itself for expenses incurred and reimbursable to it pursuant toSection 7.01;

####  

#### (iv)                              topay any amount required to be paid pursuant to Section 4.14 related to anyREO Property, it being understood that in the case of any such expenditure orwithdrawal related to a particular REO Property, the amount of such expenditureor withdrawal from the Blocked Account shall be limited to amounts on depositin the Blocked Account with respect to the related REO Property;

####  

#### (v)                                 oneach Payment Date, to pay to UBS, to the extent of available funds on depositin the Blocked Account, an amount equal to all interest due to UBS, togetherwith all principal collections and other recoveries of principal received bythe TRS Servicer (including any Repurchase Prices not recovered directly byUBS) during the preceding month on the Mortgage Loans, in each case to theextent not previously remitted to UBS by the TRS Servicer or the TRS Sub-Trust(it being acknowledged by the parties that amounts representing the PrincipalPrepayments are expected to be remitted to UBS immediately upon receipt and inno event later than the Business Day following the date on which such PrincipalPrepayments were received by the TRS Servicer);

####  

#### (vi)                              towithdraw funds deposited in error;

####  

#### (vii)                           on eachPayment Date, to pay to itself the Servicing Fee from any amounts remainingafter the payment to UBS referenced in clause (v) above, subject toSection 6.03 hereof;

####  

#### (viii)                        on eachPayment Date, from amounts remaining, to make payments in accordance with theTrust Agreement; and

 

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#### (ix)                                toclear and terminate the Blocked Account upon the termination of this Agreementand the Trust Agreement.

####  

### (b)                                 Followingthe TRS Servicer’s receipt of a written notice from UBS notifying the TRSServicer of the occurrence of a Facility Default, an acceleration of the TRSSub-Trust’s obligations under the Loan Repurchase Agreement, the LoanParticipation Agreement, the Loan Purchase Agreement, or an Event of Defaulthereunder, all amounts deposited in the Blocked Account shall be paid to UBS.

###  

Section 4.06                                EscrowAccount.

##  

If anyMortgage Loans are serviced by MortgageIT directly rather than serviced by GMACas sub-servicer, the provisions of this Section 4.06 and of  Section 4.08 shall control.

 

### (a)                                  Establishment.  The TRS Servicer shall segregate and holdall funds collected and received pursuant to a Mortgage Loan constitutingEscrow Payments separate and apart from any of its own funds and general assetsand shall establish and maintain one or more Escrow Accounts, in the form oftime deposit or demand accounts, established in the name of “MortgageIT, Inc.,as Servicer, in trust for UBS Real Estate Securities Inc. and its assignees andvarious Morgagors”.  The Escrow Accountshall be established with [JPMorgan Chase Bank], in a manner that shall providemaximum available insurance thereunder. Funds deposited in the Escrow Account may be drawn on by the TRSServicer in accordance with Section 4.06(c).

###  

### (b)                                 Depositsto Escrow Account.  The TRS Servicershall deposit in the Escrow Account within three (3) Business Days afterreceipt of funds, and retain therein:

###  

#### (i)                                     allEscrow Payments collected on account of the Mortgage Loans, for the purpose ofeffecting payment of any item required under the terms of the related Escrowagreement with the Mortgagor; and

####  

#### (ii)                                  allamounts representing Insurance Proceeds or Condemnation Proceeds that are to beapplied to the restoration or repair of any Mortgaged Property; and

####  

#### (iii)                               anyamounts required to be deposited by the TRS Servicer pursuant toSection 4.08 in connection with the investment in Eligible Accounts.

####  

### (c)                                  Withdrawalsfrom Escrow Account.  Withdrawalsfrom the Escrow Account may be made by the TRS Servicer only:

###  

#### (i)                                     toeffect payments of items constituting Escrow Payments for the related Mortgagepursuant to the terms of the Mortgage or any other related document;

####  

#### (ii)                                  toreimburse the TRS Servicer for any Servicing Advances made by the TRS Servicerpursuant to Section 4.07 with respect to a related Mortgage Loan, but onlyfrom amounts received on the related Mortgage Loan which represent latecollections of Escrow Payments thereunder;

 

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#### (iii)                               torefund to any Mortgagor any funds found to be in excess of the amounts requiredunder the terms of the related Mortgage Loan;

####  

#### (iv)                              fortransfer to the related Blocked Account and application to reduce the principalbalance of the Mortgage Loan in accordance with the terms of the relatedMortgage and Mortgage Note;

####  

#### (v)                                 forapplication to restoration or repair of the Mortgaged Property in accordancewith the procedures outlined in Section 4.13;

####  

#### (vi)                              topay to the TRS Servicer pursuant to Section 4.08, or any Mortgagor to theextent required by law, any interest earned on the funds deposited in theEscrow Account;

####  

#### (vii)                           toclear and terminate the Escrow Account on the termination of this Agreement;and

####  

#### (viii)                        towithdraw funds deposited in error.

 

Section 4.07                                Paymentof Taxes, Insurance and Other Charges.

 

With respect toeach Mortgage Loan, the TRS Servicer shall maintain accurate and customaryservicing records reflecting the status of taxes, assessments, fire and hazardinsurance premiums and other charges which are or may become a lien upon theMortgaged Property.  As to thoseMortgage Loans which are the subject of an “impound account” for the payment oftaxes and/or insurance, the TRS Servicer shall obtain, from time to time, allbills for the payment of such charges (including renewal premiums) subject tothe Escrow Account and shall effect payment thereof prior to the applicablepenalty or termination date, employing for such purpose deposits of theMortgagor in the Escrow Account.  To theextent that a Mortgage does not provide for Escrow Payments, the TRS Servicershall use its best efforts to determine that any such payments coming due anddelinquent prior to the related Purchase Date are made by the Mortgagor.  The TRS Servicer assumes full responsibilityfor the payment of all such bills and shall effect payment of all such bills ina manner and at a time that assures that the lien priority of the Mortgage isnot jeopardized and, in addition, with respect to the payment of taxes, in amanner and at a time that avoids the loss of the Mortgaged Property due to atax sale or the foreclosure of a tax lien, irrespective of each Mortgagor’sfaithful performance in the payment of same or the making of the EscrowPayments, and, if necessary, the TRS Servicer shall make Servicing Advancesfrom its own funds to effect such payments (subject to the TRS Servicer’s rightof reimbursement from the Escrow Account pursuant to Section 4.06(c)(ii)or the Blocked Account pursuant to Section 4.05(a)(i)).

 

Section 4.08                                Protectionof Accounts.

 

Amounts on depositin the Blocked Account and the Escrow Account may at the option of the TRSServicer be invested in Eligible Accounts. Any such Eligible Account shall permit withdrawals therefrom no laterthan the day before the next Payment Date. Any such Eligible Account relating to the Blocked Account shall beestablished in the name of “MortgageIT, Inc., as Servicer, in trust for UBSReal Estate Securities Inc. and its assignees”; any such Eligible Accountrelating to the Escrow Account shall be established in the name of the

 

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TRSServicer or for the benefit of UBS.  Allincome on or gain realized from any such Eligible Account shall be for thebenefit of the TRS Servicer and may be withdrawn at any time by the TRSServicer, subject to Section 4.05(b) and Section 4.06(c).  The TRS Servicer shall be responsible forany losses incurred in respect of any Eligible Account and any taxes imposed onthe TRS Sub-Trust on account of any Eligible Account and shall deposit in theBlocked Account or the Escrow Account, as applicable, out of its own fundsamounts equal to all such losses and taxes immediately as such losses arerealized or assessed.

 

Section 4.09                                Maintenanceof Hazard Insurance.

##  

The TRS Servicershall cause to be maintained for each Mortgage Loan, hazard insurance such thatall improvements upon the Mortgaged Property are insured by a generallyacceptable, licensed and qualified insurer against loss by fire and hazards ofextended coverage, in an amount which is at least equal to the lesser of (i)the replacement value of the improvements securing such Mortgage Loan or (ii)the outstanding principal balance of the Mortgage Loan.

 

If uponorigination of the Mortgage Loan, the related Mortgaged Property was located inan area identified in the Federal Register by the Flood Emergency ManagementAgency as having special flood hazards (and such flood insurance has been madeavailable) a flood insurance policy meeting the requirements of the currentguidelines of the Federal Insurance Administration is in effect with agenerally acceptable, qualified insurance carrier in an amount representingcoverage equal to the lesser of (i) the replacement value of the improvements,(ii) the maximum amount of insurance which is available under the FloodDisaster Protection Act of 1973, as amended or (iii) the outstanding principalbalance of the Mortgage Loan securing such Mortgaged Property.  If at any time during the term of theMortgage Loan, the TRS Servicer determines in accordance with applicable lawthat a Mortgaged Property is located in a special flood hazard area and is notcovered by flood insurance or is covered in an amount less than the amountrequired by (and available under) the Flood Disaster Protection Act of 1973, asamended, the TRS Servicer shall notify the related Mortgagor that the Mortgagormust obtain such flood insurance coverage, and if said Mortgagor fails toobtain the required flood insurance coverage within sixty (60) days after suchnotification, the TRS Servicer shall immediately force place the required floodinsurance on the Mortgagor’s behalf (except as may be prohibited or limited byapplicable law).

 

Pursuant toSection 4.04, any amounts collected by the TRS Servicer under any suchpolicies or with respect to property acquired in liquidation of the MortgageLoan (other than amounts to be deposited in the Escrow Account and applied tothe restoration or repair of the related Mortgaged Property or to be releasedto the Mortgagor, in accordance with the TRS Servicer’s normal servicingprocedures as specified in Section 4.14) shall be deposited in the BlockedAccount subject to withdrawal pursuant to Section 4.05.

 

Section 4.10                                Maintenanceof Mortgage Impairment Insurance.

##  

In the event thatthe TRS Servicer shall obtain and maintain a blanket policy insuring againstlosses arising from fire and hazards covered under extended coverage on all ofthe Mortgage Loans, then, to the extent such policy provides coverage in anamount equal to the

 

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amountrequired pursuant to Section 4.10 and otherwise complies with all otherrequirements of Section 4.10, it shall conclusively be deemed to havesatisfied its obligations as set forth in Section 4.10.  Any amounts collected by the TRS Servicerunder any such policy relating to a Mortgage Loan shall be deposited in theBlocked Account subject to withdrawal pursuant to Section 4.05.  Such policy may contain a deductible clause,in which case, in the event that there shall not have been maintained on therelated Mortgaged Property a policy complying with Section 4.10, and thereshall have been a loss which would have been covered by such policy, the TRSServicer shall deposit in the Blocked Account at the time of such loss theamount not otherwise payable under the blanket policy because of suchdeductible clause, such amount to deposited from the TRS Servicer’s funds,without reimbursement therefor.

 

Section 4.11                                Maintenanceof Fidelity Bond and Errors and Omissions Insurance.

##  

The TRS Servicershall maintain, at its own expense, a blanket Fidelity Bond and an Errors andOmissions Insurance Policy, with broad coverage on all officers, employees orother persons acting in any capacity requiring such persons to handle funds,money, documents or papers relating to the Mortgage Loans (“ServicerEmployees”).  Any such Fidelity Bondand Errors and Omissions Insurance Policy shall be in the form of the MortgageBanker’s Blanket Bond and shall protect and insure the TRS Servicer againstlosses, including forgery, theft, embezzlement, fraud, errors and omissions andnegligent acts of such Servicer Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy also shallprotect and insure the TRS Servicer against losses in connection with therelease or satisfaction of a Mortgage Loan without having obtained payment infull of the indebtedness secured thereby. No provision of this Section 4.11 requiring such Fidelity Bond andErrors and Omissions Insurance Policy shall diminish or relieve the TRSServicer from its duties and obligations as set forth in this Agreement.  The TRS Servicer shall deliver a copy ofsuch fidelity bond and insurance policy to the TRS Sub-Trust and UBS uponrequest.

 

Section 4.12                                Deliveryof Document in Possession of Custodian.

 

The TRS Sub-Trustshall cause either Custodian to deliver to the TRS Servicer, on a timely basis,those mortgage loan documents that the TRS Servicer may request from suchCustodian from time to time.  Shouldsuch Custodian fail to deliver the requested mortgage loan documents on atimely basis, the TRS Servicer shall not be liable for any related loss orexpense arising therefrom.  Any Event ofDefault which is attributable to the failure of such Custodian to deliver orsuch Custodian’s untimely delivery of reasonably requested mortgage loandocuments shall not be chargeable to the TRS Servicer and shall be deemed tonot have occurred.

 

Section 4.13                                Restorationof Mortgaged Property.

 

In the event thatany Mortgaged Property is damaged as a result of an insured act under one ofthe insurance policies discussed in this Agreement or subject to a governmentaltaking, the TRS Servicer shall apply any Insurance Proceeds or CondemnationProceeds (collectively “Proceeds”) actually received by it, inaccordance with Accepted Servicing Practices, applicable law, and the terms ofthe related Mortgage or Deed of Trust. Consistent

 

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therewiththe TRS Servicer shall apply such Proceeds to reduce the principal balance ofthe Mortgage Loan unless;

 

1.                                       Applicablelaw requires otherwise; or

 

2.                                       TheTRS Servicer has determined that restoration and/or repair of the MortgagedProperty is in the best interest of all parties.

 

In thedetermination of whether to allow restoration and/or repair, the TRS Servicerwill consider the following:

 

1.                                       Whetherthe Mortgagor is otherwise in default under the terms of the Mortgage or deedof trust;

 

2.                                       Whetherrestoration and/or repair is economically feasible; and

 

3.                                       Whethersuch restoration and/or repair will have a material impact on the MortgageProperty’s value.

 

The TRS Servicerneed not obtain the approval of UBS prior to releasing any Insurance Proceedsor Condemnation Proceeds to be applied to the restoration or repair of theMortgaged Property if such release is in accordance herewith and with AcceptedServicing Practices.  If UBS is named asan additional loss payee, the TRS Servicer is hereby empowered to endorse anyloss draft issued in respect of such a claim in the name of UBS.

 

Section 4.14                                Title,Management and Disposition of REO Property.

 

In the event thattitle to any Mortgaged Property is acquired in foreclosure or by deed in lieuof foreclosure, the deed or certificate of sale shall be taken in the name ofUBS or its designee of record on the date of acquisition of title, for UBS.  UBS or its designee shall provide the TRSServicer with one or more powers of attorney, if reasonably requested, toenable the TRS Servicer to fulfill its duties under this Agreement.

 

The TRS Servicershall manage, conserve, protect and operate each REO Property for the TRSSub-Trust and UBS, solely for the purpose of its prompt disposition andsale.  The TRS Servicer, either itselfor through an agent selected by the TRS Servicer, shall manage, conserve,protect and operate the REO Property in the same manner that it manages,conserves, protects and operates other foreclosed property for its own account,and in the same manner that similar property in the same locality as the REOProperty is managed.

 

The TRS Servicershall attempt to sell the REO Property (and may temporarily rent the same) onsuch terms and conditions as the TRS Servicer determines in its good faithjudgment to be in the best interest of the TRS Sub-Trust and UBS.  The proceeds of sale of the REO Propertyshall be deposited in the Blocked Account within three (3) Business Days afterreceipt of funds.  As soon as practicalthereafter, the expenses of such sale shall be paid and the TRS Servicer shallreimburse itself from the Blocked Account for any related unreimbursedServicing Advances, unpaid Servicing Fees and unreimbursed expenses andadvances made pursuant to this Agreement.

 

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With respect toeach REO Property, the TRS Servicer shall deposit all funds collected andreceived in connection with the operation of the REO Property in the BlockedAccount within three (3) Business Days after receipt of such funds and shallalso deposit in the Blocked Account all revenues received with respect to theconservation and disposition of the related REO Property.

 

The TRS Servicershall withdraw from the Blocked Account funds necessary for the properoperation, management and maintenance of the REO Property, including the costof maintaining any hazard insurance pursuant to Section 4.10 and the feesof any managing agent of the TRS Servicer, a sub servicer, or the TRS Serviceritself.  The REO management fee shall bean amount that is reasonable and customary in the area where the MortgagedProperty is located.

 

Section 4.15                                SubServicer.

 

The TRS Servicermay, with the prior consent of UBS, appoint a sub-servicer to perform any orall of its duties under this Agreement with respect to any Mortgage Loan.  UBS hereby consents to the appointment ofGMAC as a sub-servicer under this Agreement. GMAC Mortgage Corporation and any other sub-servicer shall service andadminister the Mortgage Loans in accordance with the terms of this Agreementand the Accepted Servicing Practices. The TRS Servicer shall remain liable for any and all of its duties underthis Agreements delegated to GMAC or any other sub-servicer.  Upon appointment of any sub-servicer, orwith respect to GMAC, as of the Closing Date, all of the TRS Servicer’s rightsand remedies (but none of its obligations) under any sub-servicing agreementwith respect to each Mortgage Loan shall be automatically assigned to UBShereunder, including, without limitation, the ability to terminate suchsub-servicer.  The TRS Servicer herebyrepresents, warrants and covenants that any sub-servicing agreement currentlyin existence with any such sub-servicer or hereafter entered into with anysub-servicer does not, and will not, contain any termination fee to be paid toany such Servicer upon termination of such entity as sub servicer of theMortgage Loans.

 

# **ARTICLE V**

 

# **NOTIFICATION;STATEMENTS**

 

Section 5.01                                Notifications.  The TRS Servicer will notify the TRSSub-Trust and UBS in writing of any of the following promptly upon learning ofthe occurrence thereof, describing the same and, if applicable, any remedialsteps being taken with respect thereto:

 

#### (i)                                     receiptof notice or knowledge that the Mortgaged Property relating to a Mortgage Loanhas been damaged by waste, fire, earthquake or earth movement, windstorm,flood, tornado or other casualty or otherwise damaged so as to affect adverselyits Market Value; and

####  

#### (ii)                                  promptlyupon receipt of notice or knowledge of (A) any material default related to anyMortgage Loan, (B) any lien or security interest (other than security interestscreated hereby) on, or claim asserted against, any of the Mortgage Loans which,individually or together with such liens, security interests or claims, isreasonably likely to have a Material Adverse Effect or (C) any event orchange in circumstances which could reasonably be expected to have a MaterialAdverse Effect.

 

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Section 5.02                                MonthlyReports.  Not later than 5:00 p.m.New York City time on each Payment Date, the TRS Servicer will provide to theTRS Sub-Trust and UBS, by electronic or other format acceptable to UBS, thefollowing information in respect of the preceding month:

 

#### (i)                                     Summaryof delinquency and loss experience;

####  

#### (ii)                                  Withrespect to any MERS Designated Mortgage Loan, MERS Reports;

####  

#### (iii)                               A remittance report, in hard copy and electronicformat acceptable to UBS, containing the following information regarding fundscollected during the prior calendar month:

####  

##### (1)                                  MortgageLoan number;

#####  

##### (2)                                  NoteRate;

#####  

##### (3)                                  Remittancesallocable to principal and interest, escrow and taxes;

#####  

##### (4)                                  Paidthrough date;

#####  

##### (5)                                  MortgageLoan balance;

#####  

##### (6)                                  Delinquencystatus;

#####  

##### (7)                                  Whetherthe Mortgaged Property is in foreclosure or has become an real estate ownedproperty;

#####  

##### (8)                                  Whetherany Mortgagor is the subject of any bankruptcy action; and

#####  

##### (9)                                  Anyother information that UBS may reasonably request;

#####  

#### (iv)                              Any additional reports with respect to the TRSServicer’s servicing portfolio as UBS may reasonably request;

####  

#### (v)                                 Any other reports as deemed necessary atsecuritization and reasonably prepared by the TRS Servicer.

####  

In addition, theTRS Servicer shall provide UBS with such information concerning the MortgageLoans as is necessary for UBS to prepare its federal income tax returns as UBSmay reasonably request from time to time.

 

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# **ARTICLE VI**

 

# **GENERAL SERVICINGPROCEDURES**

 

Section 6.01                                Transfersof Mortgaged Property.

##  

Except as limitedby applicable law, the TRS Servicer shall use commercially reasonable effortsto enforce any “due-on-sale” provision contained in any Mortgage or MortgageNote and to deny assumption by the Person to whom the Mortgaged Property hasbeen or is about to be sold whether by absolute conveyance or by contract ofsale, and whether or not the Mortgagor remains liable on the Mortgage and theMortgage Note.  When the MortgagedProperty has been conveyed by the Mortgagor, the TRS Servicer shall, to theextent it has knowledge of such conveyance, exercise its rights to acceleratethe maturity of such Mortgage Loan under the “due-on-sale” clause applicablethereto, provided, however, that the TRS Servicer shall not exercise suchrights if prohibited by law from doing so.

 

If the TRSServicer reasonably believes it is unable under applicable law to enforce such“due-on-sale” clause, the TRS Servicer shall endeavor to enter into (i) anassumption and modification agreement with the Person to whom such property hasbeen conveyed (subject to said Person meeting the TRS Servicer’s underwritingguidelines then in existence) pursuant to which such Person becomes liable underthe Mortgage Note and the original Mortgagor remains liable thereon or (ii) inthe event the TRS Servicer is unable under applicable law to require that theoriginal Mortgagor remain liable under the Mortgage Note, a substitution ofliability agreement with the purchaser of the Mortgaged Property pursuant towhich the original Mortgagor is released from liability and UBS of theMortgaged Property is substituted as Mortgagor and becomes liable under theMortgage Note.  If an assumption fee iscollected by the TRS Servicer for entering into an assumption agreement suchfee will be retained by the TRS Servicer as Ancillary Income, subject toSection 4.04(c).  In connectionwith any such assumption, neither the Mortgage Interest Rate borne by therelated Mortgage Note, the term of the Mortgage Loan nor the outstandingprincipal amount of the Mortgage Loan shall be changed, without UBS’s writtenconsent.

 

Section 6.02                                Satisfactionof Mortgages and Release of Submission Packages.

##  

Upon the paymentin full of any Mortgage Loan, the TRS Servicer shall notify UBS in the weeklyPrincipal Prepayment Remittance and shall be authorized to request theimmediate release of any Mortgage Documents for such Mortgage Loan.  The costs associated with the release orreconveyance shall be borne by the TRS Sub-Trust, to the extent such amountsare not recovered from the Mortgagor.

 

Except as providedfor in Section 4.01 of this Agreement, if the TRS Servicer satisfies orreleases a Mortgage without first having obtained payment in full of theindebtedness secured by the Mortgage without the prior written consent of UBS,upon written demand of UBS and the Majority Investors the TRS Servicer shallrepurchase the related Mortgage Loan at the Repurchase Amount.  The TRS Servicer shall maintain the FidelityBond and Errors and Omissions Insurance Policy as provided for inSection 4.11 insuring the TRS Servicer against

 

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anyloss it may sustain with respect to any Mortgage Loan not satisfied inaccordance with the procedures set forth herein.

 

Section 6.03                                ServicingCompensation.

##  

As compensationfor its services hereunder, the TRS Servicer shall be entitled on the terms setforth herein to request withdrawals from the Blocked Account the amount of itsServicing Fee with respect to such Mortgage Loan; however such withdrawal orretention shall only be permitted to be made from the related Monthly Paymentwith respect to such Mortgage Loan.  TheServicing Fee shall be payable monthly without pro ration and shall be computedon the basis of the unpaid principal balance for such Mortgage Loan as of thefirst day of the related Due Period. For so long as no Facility Default has occurred and is continuing, asservicing compensation, the TRS Servicer shall be entitled to receive theServicing Fee, as provided in Section 4.05(a)(vii) and to retain as incomeall Ancillary Income and other like charges or fees, subject toSection 4.04(c); provided that following the occurrence and during thecontinuance of a Facility Default, the right of the TRS Servicer to receive anysuch servicing compensation shall be suspended and such amounts shall be paidto UBS.

 

# **ARTICLE VII**

 

# **THE TRS SERVICER**

 

Section 7.01                                Indemnification;Third Party Claims.

 

The TRS Servicershall indemnify the TRS Sub-Trust, UBS and the Owner Trustee and theirrespective Affiliates and officers, directors, employees, agents and advisors(each an “Indemnified Party”) harmless from and against any and allliabilities, claims, losses, damages, penalties, fines, forfeitures, reasonablelegal fees and related costs of counsel, judgments, and any other costs, feesand expenses (collectively, the “Costs”) that may be imposed on,incurred by or assessed against such Indemnified Party relating to or arisingout of a third party claim related to the failure of the TRS Servicer, GMACMortgage Corporation as sub servicer or any other sub servicer to perform itsduties and service the Mortgage Loans in strict compliance with the terms ofthis Agreement.  If an Indemnified Partyshall so request, the TRS Servicer shall assume the defense of any suchclaim.  The TRS Servicer shall pay allexpenses in connection with any such claim, including counsel fees, andpromptly pay, discharge and satisfy any judgment or decree which may be enteredagainst it or UBS in respect of such claim. UBS promptly shall reimburse the TRS Servicer for all amounts advancedby it pursuant to the preceding sentence except when the claim is in any wayrelated to the failure of the TRS Servicer to service and administer theMortgage Loans or otherwise to perform its obligations in strict compliancewith the terms of this Agreement.

 

The TRS Servicershall also reimburse an Indemnified Party as and when billed by suchIndemnified Party for all such Indemnified Party’s costs and expenses incurredin connection with the enforcement or the preservation of such IndemnifiedParty’s rights against

 

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the TRS Servicer underthis Agreement, including without limitation the reasonable fees and expensesof its counsel.

 

Section 7.02                                Mergeror Consolidation of the TRS Servicer.

 

The TRS Servicershall keep in full effect its existence, rights and franchises as acorporation, and shall obtain and preserve its qualification to do business asa foreign corporation in each jurisdiction in which such qualification is orshall be necessary to protect the validity and enforceability of this Agreementor any of the Mortgage Loans and to perform its duties under thisAgreement.  Any Person into which theTRS Servicer may be merged or consolidated, or any corporation resulting fromany merger, conversion or consolidation to which the TRS Servicer shall be aparty, or any Person succeeding to the business of the TRS Servicer, shall bethe successor of the TRS Servicer hereunder, without the execution or filing ofany paper or any further act on the part of any of the parties hereto, anythingherein to the contrary notwithstanding.

 

Section 7.03                                Limitationon Liability of Servicer and Others.

 

Neither the TRSServicer nor any of the directors, officers, employees or agents of the TRSServicer shall be under any liability to the TRS Sub-Trust or UBS for anyaction taken or for refraining from the taking of any action in good faithpursuant to this Agreement, or for errors in judgment, provided, however, thatthis provision shall not protect the TRS Servicer against any breach ofwarranties or representations made herein, or failure to perform itsobligations in strict compliance with any standard of care set forth in thisAgreement, or any liability which would otherwise be imposed by reason of anybreach of the terms and conditions of this Agreement.  The TRS Servicer and any director, officer, employee or agent ofthe TRS Servicer may rely in good faith on any document of any kind prima facieproperly executed and submitted by any Person respecting any matters arisinghereunder.  The TRS Servicer shall notbe under any obligation to appear in, prosecute or defend any legal actionwhich is not incidental to its duties to service the Mortgage Loans inaccordance with this Agreement and which in its opinion may involve it in anyexpense or liability, provided, however, that the TRS Servicer may, with theconsent of UBS, undertake any such action which it may deem necessary ordesirable in respect to this Agreement and the rights and duties of the partieshereto.  In such event, the TRS Servicershall be entitled to reimbursement from the TRS Sub-Trust of the reasonable legalexpenses and costs of such action.

 

Section 7.04                                Limitationon Resignation and Assignment by Servicer.

 

The Trust onbehalf of the TRS Sub-Trust and UBS have entered into this Agreement with theTRS Servicer and the TRS Sub-Trust and UBS will purchase the Mortgage Loans inreliance upon the independent status of the TRS Servicer, and therepresentations as to the adequacy of its servicing facilities, personnel,records and procedures, its integrity, reputation and financial standing, andthe continuance thereof.  Therefore, theTRS Servicer shall neither assign this Agreement or the servicing hereunder ordelegate its rights or duties hereunder or any portion hereof (to other than asub servicer) or sell or otherwise dispose of all or substantially all of itsproperty or assets without the prior written consent of UBS, which consentshall not be unreasonably withheld.  TheTRS Servicer shall not resign from the obligations and duties

 

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herebyimposed on it except by mutual consent of the TRS Servicer, the TRS Sub-Trustand UBS or upon the determination that its duties hereunder are no longerpermissible under applicable law and such incapacity cannot be cured by the TRSServicer.  No such resignation shallbecome effective until a successor shall have assumed the TRS Servicer’sresponsibilities and obligations hereunder in the manner provided inSection 10.01.

 

# **ARTICLE VIII**

 

# **DEFAULT**

 

Section 8.01                                Eventsof Default.

 

Each of thefollowing shall constitute an Event of Default on the part of the TRS Servicer:

 

#### (i)                                     anyfailure by the TRS Servicer to remit, or to deposit into the Blocked Account,any payment required to be made under the terms of this Agreement whichcontinues unremedied (a) for a period of one Business Day, in the case of anysuch deposit of amounts referred to in Section 7(h) of the Loan RepurchaseAgreement, or (b) in any other case, for a period of three Business Days afterthe date upon which written notice of such failure, requiring the same to beremedied, shall have been given to the TRS Servicer by UBS (which UBS may inits discretion give); or

####  

#### (ii)                                  failureby the TRS Servicer to observe or perform in any material respect any other ofthe covenants or agreements on the part of the TRS Servicer set forth in thisAgreement, the Blocked Account Agreement or in the Custodial Agreement whichcontinues unremedied for a period of 30 days after the date on which writtennotice of such failure, requiring the same to be remedied, shall have been givento the TRS Servicer by UBS or by the related Custodian (and UBS may or, as thecase may be, shall give such notice as contemplated in clause (i) above); or

####  

#### (iii)                               failureby the TRS Servicer to maintain its license to do business in any jurisdictionwhere the Mortgage Property is located except where the failure to be soqualified would not have a material adverse effect on (a) the validity orenforceability of this Agreement or any of the Mortgage Loans or (b) theability of the TRS Servicer to perform its duties under this Agreement;

####  

#### (iv)                              adecree or order of a court or agency or supervisory authority havingjurisdiction for the appointment of a conservator or receiver or liquidator inany insolvency, readjustment of debt, including bankruptcy, marshaling ofassets and liabilities or similar proceedings, or for the winding-up orliquidation of its affairs, shall have been entered against the TRS Servicerand such decree or order shall have remained in force undischarged or unstayedfor a period of 60 days; or

####  

#### (v)                                 theTRS Servicer shall consent to the appointment of a conservator or receiver orliquidator in any insolvency, readjustment of debt, marshaling of assets andliabilities or similar proceedings of or relating to the TRS Servicer or of orrelating to all or substantially all of its property; or

 

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#### (vi)                              forso long as MortgageIT, Inc. is the TRS Servicer, the occurrence and continuanceof a Facility Default or any of the following circumstances or events (“ServicingTermination Events”):

####  

##### (1)                                  anyfailure by the TRS Servicer to remit to UBS (or other registered holder of aParticipation Certificate) when due any payment required to be made under thisAgreement or such Participation Certificate;

#####  

##### (2)                                  failureby the TRS Servicer duly to observe or perform in any material respect any ofits other covenants or agreements set forth in this Agreement or in any of theother Transaction Documents to which it is a party which continues unremediedfor a period of one (1) business day (or such longer period provided in therelevant notice to the TRS Servicer) after the date on which written notice ofsuch failure, requiring the same to be remedied, shall have been given to theTRS Servicer by UBS; or

#####  

##### (3)                                  anyrepresentation, warranty or certification made or deemed made herein or in anyof the other Transaction Documents by the TRS Servicer or any certificatefurnished to UBS pursuant to the provisions thereof, shall prove to have beenfalse or misleading in any material respect as of the time made or furnished;or

#####  

##### (4)                                  anAct of Insolvency with respect to the TRS Servicer or any of its Affiliates; or

#####  

##### (5)                                  theTRS Servicer ceases to meet the qualifications for maintaining all AgencyApprovals (as defined in the Loan Participation Agreement); or

#####  

##### (6)                                  theTRS Servicer attempts to assign its right to servicing compensation hereunderor attempts without the consent of UBS to sell or otherwise dispose of all orsubstantially all of its property or assets or to assign its servicingresponsibilities this Agreement or to delegate its duties thereunder or anyportion thereof (to other than a sub servicer); or

#####  

##### (7)                                  theTRS Servicer or any of its Affiliates fails to operate or conduct its businessoperations or any material portion thereof in the ordinary course, or the TRSServicer experiences any other material adverse change in its businessoperations or financial condition, which, in UBS’s sole discretion, constitutesa material impairment of the TRS Servicer’s ability to perform its obligationsunder this Agreement or any other related document; or

#####  

##### (8)                                  theTRS Servicer’s membership in MERS is terminated for any reason; or

#####  

##### (9)                                  theTRS Servicer shall default under, or fail to perform as requested under, orshall otherwise materially breach the terms of any material instrument,agreement or contract; or

 

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##### (10)                            thefailure of a Security (as defined in the Loan Participation Agreement) to beissued for any reason whatsoever on or before the date on which such Securitymust be issued and delivered to UBS);

 

#### (vii)                           the TRSServicer shall admit in writing its inability to pay its debts generally asthey become due, file a petition to take advantage of any applicableinsolvency, bankruptcy or reorganization statute, make an assignment for thebenefit of its creditors, voluntarily suspend payment of its obligations orcease its normal business operations for three Business Days.

####  

In each and everysuch case, so long as an Event of Default shall not have been remedied or ifUBS’s obligations to repurchase all Mortgage Loans have been acceleratedpursuant to Section 7 of the Loan Repurchase Agreement (regardless ofwhether the related Event of Default has later been remedied), in addition towhatsoever rights UBS may have at law or equity to damages, includinginjunctive relief and specific performance, UBS, by notice in writing to theTRS Servicer (which UBS may in its discretion give and shall give if requestedto do so by the Majority Investors), may terminate all the rights andobligations of the TRS Servicer under this Agreement and in and to the MortgageLoans and the proceeds thereof (a) immediately, in the case of any Event ofDefault of a kind referred to in clause (iii), (iv) or (v) of Section 7 ofthe Loan Repurchase Agreement or (b) upon payment of all monies otherwise owedhereunder to the TRS Servicer (e.g. Servicing Advances) in any other case;provided that, if a termination occurs immediately, pursuant to clause (a) ofthis sentence, the TRS Servicer’s right to receive all monies otherwise owedhereunder to it in respect of prior periods and, as provided inSection 10.01, all claims of any other Person against the TRS Servicer, inrespect of prior periods shall survive the termination, subject to thefollowing sentence.  Following theoccurrence and during the continuance of a Facility Default, the right of theTRS Servicer to receive any monies hereunder shall be suspended and such amountsshall be paid to UBS.  In all cases, theTRS Servicer’s right to receive any such monies shall be reduced by allamounts, if any, which at the time are payable by the TRS Servicer hereunderinto the Deposit Account, the Escrow Account or to the TRS Sub-Trust orotherwise.

 

Upon receipt by theTRS Servicer of such written notice, all authority and power of the TRSServicer under this Agreement, whether with respect to the Mortgage Loans orotherwise, shall pass to and be vested in the successor appointed pursuant toSection 10.01.  Upon writtenrequest from UBS (which it may or, as appropriate, shall give as provided abovefor such notice), the TRS Servicer shall prepare, execute and deliver to thesuccessor entity designated by UBS any and all documents and other instruments,place in such successor’s possession all Submission Packages, and do or causeto be done all other acts or things necessary or appropriate to effect thepurposes of such notice of termination, including but not limited to thetransfer to such successor for administration by it of all cash amounts whichshall at the time be credited by the TRS Servicer to the Blocked Account orEscrow Account or thereafter received with respect to the Mortgage Loans.

 

Section 8.02                                Waiverof Defaults.

##  

UBS may waive anydefault by the TRS Servicer in the performance of its obligations hereunder andits consequences.  Upon any waiver of apast default, such default

 

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shallcease to exist, and any Event of Default arising therefrom shall be deemed tohave been remedied for every purpose of this Agreement.  No such waiver shall extend to anysubsequent or other default or impair any right consequent thereon except tothe extent expressly so waived.

 

No failure toexercise and no delay in exercising, on the part of the TRS Sub-Trust or UBS,any right, remedy, power or privilege hereunder, shall operate as a waiverthereof; nor shall any single or partial exercise of any right, remedy, poweror privilege hereunder preclude any other or further exercise hereof or theexercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privilegesherein provided are cumulative and not exhaustive of any rights, remedies,powers and privilege provided by law.

 

# **ARTICLE IX**

 

# **TERMINATION**

 

Section 9.01                                Termination.

 

This Agreementshall terminate upon the earliest to occur of (i) the Stated TerminationDate; (ii) the later of the final payment or other liquidation of the lastMortgage Loan or the disposition of any REO Property with respect to the lastMortgage Loan and the remittance of all funds due hereunder; (iii) thetermination of the TRS Servicer by UBS for cause pursuant to Section 8.01or, upon one day’s notice from UBS, without cause; or (iv) mutual consent ofthe TRS Servicer, the TRS Sub-Trust and UBS in writing.

 

Not more than 90days nor fewer than 60 days prior to the then Stated Termination Date, the TRSServicer may send to UBS a written request, requesting that UBS extend the thenStated Termination Date to a date not more than one year from the then StatedTermination Date.  UBS shall respond, inwriting, to any such request within 15 Business Days of UBS’s receipt thereof;provided, that if UBS does not so respond, then the request to extend shall bedeemed denied.

 

Section 9.02                                Retentionand Termination of TRS Servicer.

 

TheTRS Servicer hereby covenants and agrees to act as TRS Servicer for an initialterm beginning on the date of this Agreement and ending on the same day of themonth two (2) months thereafter, which term shall be extendable by UBS forsuccessive terms thereafter of thirty days each (or, as specified in a writingdelivered by UBS to the TRS Servicer, such other term-to-term basis), until thetermination of this Agreement.  The TRSServicer hereby agrees that, upon its receipt of any such notice (includingeach notice pursuant to standing instructions, which shall be deemed deliveredat thirty day intervals for so long as such instructions are in effect) (a “ServicerExtension Notice”), the TRS Servicer shall become bound, for the durationof the term covered by such Servicer Extension Notice, to continue as the TRSServicer subject to and in accordance with the other provisions of thisAgreement.  The TRS Servicer agrees thatif as of the tenth day prior to the last day of any term it shall not havereceived a Servicer Extension Notice from UBS, the TRS Servicer will, withinfive days thereafter, give written notice of such nonreceipt to UBS.

 

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# **ARTICLE X**

 

# **SUCCESSOR TO THETRS SERVICER**

 

Section 10.01                          Successorto Servicer.

##  

The appointmenthereunder of MortgageIT as the TRS Servicer hereunder shall initially be for aterm beginning on the date of this Agreement and ending on the same day of themonth two (2) months thereafter, which term shall be extendable by UBS forsuccessive terms thereafter of thirty days each (or, as specified in a writingdelivered by UBS to the TRS Servicer, such other term-to-term basis), until thetermination of this Agreement.  The termof appointment of any Person as a successor Servicer hereunder shall begin onthe date the appointment is effective and shall end on the last day of the lastterm or, if earlier, on the Stated Termination Date, as then in effect.

 

Prior totermination of the TRS Servicer’s responsibilities and duties under thisAgreement pursuant to Sections 7.04, 8.01, or 9.01 or the end of the last termof the TRS Servicer hereunder, UBS shall, (i) succeed to and assume all of theTRS Servicer’s responsibilities, rights, duties and obligations under thisAgreement, or (ii) appoint a successor which shall succeed to all rights andassume all of the responsibilities, duties and liabilities of the TRS Servicerunder this Agreement prior to the termination of Servicer’s responsibilities,duties and liabilities under this Agreement. In the event that the TRS Servicer’s duties, responsibilities andliabilities under this Agreement should be terminated pursuant to theaforementioned sections, the TRS Servicer shall discharge such duties andresponsibilities during the period from the date it acquires knowledge of suchtermination until the effective date thereof with the same degree of diligencewhich it is obligated to exercise under this Agreement.

 

Any successorappointed as provided herein shall execute, acknowledge and deliver to the TRSServicer and UBS an instrument accepting such appointment, wherein, if thesuccessor and the predecessor Servicers are different Persons, the successorshall agree to indemnify the predecessor Servicer for any liability arising outof the successor’s subsequent acts and omissions related to its duties as thesuccessor servicer, whereupon such successor shall become fully vested with allthe rights, powers, duties, responsibilities, obligations and liabilities ofthe TRS Servicer, with like effect as if originally named as a party to thisAgreement.  Likewise, if the TRSServicer and the successor are different Persons, the TRS Servicer shall agreeto indemnify the successor Servicer for any liability arising out of the TRSServicer’s acts and omissions relating to its acts as TRS Servicer prior to theeffective date of the servicing transfer. Any termination or resignation of the TRS Servicer or termination ofthis Agreement pursuant to Section 7.04, 8.01, or 9.01 or arising out ofthe lapse of a Servicer’s term of appointment hereunder shall not affect anyclaims that UBS may have against the TRS Servicer arising out of the TRSServicer’s actions or failure to act prior to any such termination orresignation.

 

The TRS Servicershall deliver promptly to the successor servicer (if it is a different person)all Submission Packages and related documents and statements held by ithereunder.  In all cases, at the end ofany term of its appointment hereunder, the TRS Servicer shall account for allfunds and shall execute and deliver such instruments and do such other

 

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thingsas UBS may reasonably request, at the TRS Servicer’s sole expense, to vest inany successor all such rights, powers, duties, responsibilities, obligationsand liabilities of the TRS Servicer.

 

The TRS Servicershall be liable for any and all fees and expenses required to terminate theServicing Agreement and/or to effectuate the transfer of the TRS Servicer’sresponsibilities, duties and liabilities to the successor Servicer.

 

# **ARTICLE XI**

 

# **MISCELLANEOUSPROVISIONS**

 

Section 11.01                          Transferof Servicing.  In the event the TRSServicer is terminated pursuant to this Agreement or its term as such hereunderlapses without its being appointed for another, consecutive, term, thefollowing shall be performed:

 

### (a)                                  Withrespect to each Mortgage Loan, on the related Servicing Transfer Date, UBS, orits appointed successor servicer (collectively referred to as “SuccessorServicer”), shall assume all servicing responsibilities related to, and theTRS Servicer shall cease all servicing responsibilities related to, theMortgage Loans.  On or prior to therelated Servicing Transfer Date the TRS Servicer shall take such steps as maybe necessary or appropriate to effectuate and evidence the transfer of theservicing of the Mortgage Loans to the Successor Servicer, including but notlimited to the following:

###  

#### (i)                                     Noticeto Mortgagors.  The TRS Servicershall mail to the Mortgagor of each Mortgage a letter advising the Mortgagor ofthe transfer of the servicing of the related Mortgage Loan to the SuccessorServicer; in accordance with the Cranston-Gonzales National Affordable HousingAct of 1990; provided, however, the content and format of theletter shall have the prior approval of the Successor Servicer.  The TRS Servicer shall provide the SuccessorServicer with copies of all such notices no later than the related ServicingTransfer Date.

####  

#### (ii)                                  Noticeto Taxing Authorities and Insurance Companies.  The TRS Servicer shall transmit to the applicable insurancecompanies (including primary mortgage insurance policy insurers, if applicable)and/or agents, notification of the transfer of the servicing to the SuccessorServicer, and instructions to deliver all notices and insurance statements, asthe case may be, to the Successor Servicer from and after the related ServicingTransfer Date.  The TRS Servicer shallprovide the Successor Servicer with copies of all such notices no later thanthe related Servicing Transfer Date.

####  

#### (iii)                               Deliveryof Servicing Records.  The TRSServicer shall forward to the Successor Servicer, all servicing records in theTRS Servicer’s possession relating to each Mortgage Loan.

####  

#### (iv)                              EscrowPayments.  On the Servicing TransferDate, the TRS Servicer shall provide the Successor Servicer, with immediatelyavailable funds by wire transfer in the amount of the Escrow Account balance.  The TRS Servicer shall provide the SuccessorServicer with an accounting statement sufficient to enable the SuccessorServicer to reconcile the amount of such payment with the accounts of theMortgage Loans.

 

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#### (v)                                 Payoffsand Assumptions.  The TRS Servicershall provide to the Successor Servicer, copies of all assumption statementsgenerated by the TRS Servicer on the Mortgage Loans from the related Cut-offDate to the related Servicing Transfer Date.

####  

#### (vi)                              MortgagePayments Received Prior to Related Servicing Transfer Date.  Prior to the related Servicing Transfer Dateall payments theretofore received by the TRS Servicer on each Mortgage Loanshall be properly applied by the TRS Servicer to the account of the particularMortgagor.

####  

#### (vii)                           MortgagePayments Received After Related Servicing Transfer Date.  The amount of any Monthly Payments receivedby the TRS Servicer after the related Servicing Transfer Date as well as anysuch payments theretofore received but not credited as of such date shall beforwarded within five Business Days of receipt to the Successor Servicer.  The TRS Servicer shall notify the SuccessorServicer of the particulars of the payment, which notification requirementshall be satisfied if the TRS Servicer forwards with its payment sufficientinformation to permit appropriate processing of the payment by the SuccessorServicer.  In addition, the TRS Servicershall endorse to the Successor Servicer the Monthly Payments received by theTRS Servicer after the Servicing Transfer Date.

####  

#### (viii)                        MisappliedPayments.  Misapplied payments shallbe processed as follows:

####  

##### (1)                                  Allparties shall cooperate in correcting misapplication errors;

#####  

##### (2)                                  Theparty receiving notice of a misapplied payment occurring prior to the relatedServicing Transfer Date and discovered after the related Servicing TransferDate shall immediately notify the other parties;

#####  

##### (3)                                  Ifa proven misapplied payment which occurred prior to the related ServicingTransfer Date cannot be identified and said misapplied payment has resulted ina shortage in the Blocked Account or Escrow Account, the TRS Servicer shall beliable for the amount of such shortage. The TRS Servicer shall reimburse the Successor Servicer for the amountof such shortage within thirty (30) days after receipt of written demandtherefor from the Successor Servicer;

#####  

#### (ix)                                Reconciliation.  The TRS Servicer shall, on or before therelated Servicing Transfer Date, reconcile principal balances and make anymonetary adjustments necessary to complete the reconciliation.  Any such monetary adjustments will betransferred between the TRS Servicer and the Successor Servicer as appropriate.

####  

#### (x)                                   IRSForms.  The TRS Servicer shallprepare and file all IRS forms 1098, 1099 and other applicable forms andreports which are required to be filed with respect to the period prior to therelated Servicing Transfer Date in relation to the servicing and ownership ofthe Mortgage Loans.  The TRS Servicershall provide copies of such forms to UBS upon request and shall reimburse UBSfor any costs or penalties incurred by UBS due to the TRS Servicer’s failure tocomply with this paragraph.  The TRSServicer shall not be responsible for the preparation or filing of any suchreports with respect to any period commencing on or after the related ServicingTransfer Date.

 

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#### (xi)                                MERS Designated Mortgage Loans.  Withrespect to any MERS Designated Mortgage Loans, the Master Servicer or Servicerwill modify the “Servicer” and all other relevant fields in the MERS® System toreflect the transfer of Servicing to the Successor Servicer, where applicable.

 

### (b)                                 Withintwo (2) Business Days after the TRS Servicer delivers to the TRS Sub-Trust aninvoice stating the amounts thereof, the TRS Sub-Trust shall, or shall causethe Successor Servicer to, reimburse the TRS Servicer for all ServicingAdvances not previously reimbursed and pay to the TRS Servicer any ServicingFees that were not previously retained by or paid to the TRS Servicer.  The TRS Servicer shall provide UBS with acopy of any such notice that it delivers to the TRS Sub-Trust at the time itgive such notice.  The TRS Servicershall be obligated to deliver the Servicing Files to UBS or Successor Servicerwhether or not all such Servicing Advances shall have been reimbursed and allsuch Servicing Fees shall have been paid, upon the termination of theappointment of the TRS Servicer in connection with an Event of Default pursuantto Section 8.01.  Any invoicedelivered as provided above may be supplemented by another invoice specifyingany further amounts of unreimbursed Servicing Advances and unpaid ServicingFees, which shall be paid in the same manner. In addition, if and to the extent that from and after the ServicingTransfer Date (or such earlier date through which Servicing Advances shall havebeen, for convenience, calculated and reimbursed) the TRS Servicer shouldreceive and pay bills for services properly rendered with respect to theMortgage Loans and REO Property prior to the Servicing Transfer Date, thenServicer shall be entitled to reimbursement for such additional payments.  Within five (5) Business Days after Servicermakes a written request to the TRS Sub-Trust for such reimbursement, supportedby a copy of the pertinent bill for services and including an indication of theMortgage Loan to which the bill relates, the TRS Sub-Trust shall, or shallcause the Successor Servicer to, reimburse the TRS Servicer for such payment.

 

Section 11.02                          Amendment.

 

This Agreement maybe amended from time to time by the TRS Servicer, the TRS Sub-Trust and UBS bywritten agreement signed by the TRS Servicer and UBS.

 

Section 11.03                          GoverningLaw; Jurisdiction.

 

This Agreementshall be governed by, and construed in accordance with, the laws of the Stateof New York without giving effect to the conflict of law principles thereof,and the obligations, rights and remedies of the parties hereunder shall bedetermined in accordance with such laws. With respect to all legal proceedings arising out of or relating to thisAgreement or the transactions contemplated hereby, and any action or proceedingfor recognition and enforcement of any judgment in respect thereof, each of theTRS Servicer, the TRS Sub-Trust and UBS irrevocably submits to thenon-exclusive jurisdiction of the courts of the State of New York and theUnited States District Court located in the Borough of Manhattan, City of NewYork, and each such party irrevocably waives any objection which it may have atany time to the laying of venue of any suit, action or proceeding arising outof or relating hereto brought in any such court, irrevocably waives any claimthat any such suit, action or proceeding brought in any

 

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suchcourt has been brought in any inconvenient forum and further irrevocably waivesthe right to object, with respect to such claim, suit, action or proceedingbrought in any such court, that such court does not have jurisdiction over suchparty, provided that service of process is made by any lawful means.  Without limiting the foregoing, each suchparty irrevocably agrees that service of process in any such action orproceeding may be effected by mailing a copy thereof to it by registered orcertified mail (or any substantially similar form of mail), postage prepaid, toits address set forth in or pursuant to this Agreement for notices.

 

Section 11.04                          Notices.

##  

All demands,notices and communications under or in connection with this Agreement shall bein writing and shall be deemed to have been duly given, made and received  (i) when delivered against receipt ofregistered or certified mail or upon actual receipt of registered or certifiedmail, postage prepaid, return receipt requested; (ii) when delivered bycourier with appropriate evidence of receipt; or (iii) upon transmissionvia facsimile with appropriate evidence of receipt, addressed as follows:

 

#### (i)                                     ifto the TRS Servicer:

####  

MortgageIT, Inc.33 Maiden Lane, 6th FloorNew York, NY 10038Attention:  Michael A. Zigrossi and JohnR. CutiFax:  (212) 651-4674

 

or such other address asmay hereafter be furnished to UBS and the TRS Sub-Trust in writing by the TRSServicer;

 

#### (ii)                                  ifto the TRS Sub-Trust:

####  

MortgageIT SPV I

 

c/o

 

MortgageIT, Inc., asAdministrator for

MortgageIT SPV I33 Maiden Lane, 6th FloorNew York, NY 10038

Attention:  Michael A. Zigrossi and John R. CutiFax:  (212) 651-4674

 

with a copy to:

 

Wilmington Trust Company

Rodney Square North

1100 N. Market Street

Wilmington, DE   19890

Attention:   Corporate Trust Administration

 

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or such other address asmay hereafter be furnished to UBS and the TRS Servicer in writing by the TRSSub-Trust;

 

#### (iii)                               ifto UBS:

####  

UBS Real EstateSecurities Inc.1285 Avenue of the AmericasNew York, New York 10019Attention:  Robert Carpenter

George A. Mangiaracina

Fax:  (212) 713-9607

 

or such other address asmay hereafter be furnished to the TRS Servicer and the TRS Sub-Trust in writingby UBS; and

 

Section 11.05                          Severabilityof Provisions.

 

If any one or moreof the covenants, agreements, provisions or terms of this Agreement shall beheld invalid for any reason whatsoever, 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 affectthe validity or enforceability of the other provisions of this Agreement.

 

Section 11.06                          Relationshipof Parties.

 

Nothing hereincontained shall be deemed or construed to create a partnership or joint venturebetween the parties hereto and the services of the TRS Servicer shall berendered as an independent contractor and not as agent for the TRS Sub-Trustand UBS.

 

Section 11.07                          Execution;Successors and Assigns.

 

This Agreement maybe executed in one or more counterparts and by the different parties hereto onseparate counterparts, each of which, when so executed, shall be deemed to bean original; such counterparts, together, shall constitute one and the sameagreement.  This Agreement shall inureto the benefit of and be binding upon the TRS Servicer, the TRS Sub-Trust andUBS and their respective successors and assigns.

 

Section 11.08                          Recordationof Assignments of Mortgage.

 

To the extentpermitted by applicable law, each of the Assignments of Mortgage is subject torecordation in all appropriate public offices for real property records in allthe counties or other comparable jurisdictions in which any or all of theMortgaged Properties are situated, and in any other appropriate public recordingoffice or elsewhere, such recordation is to be effected at the TRS Sub-Trust’sexpense in the event recordation is either necessary under applicable law orrequested by UBS.

 

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Section 11.09                          Merger andIntegration.

 

Except asspecifically stated otherwise herein, this Agreement sets forth the entireunderstanding of the parties relating to the subject matter hereof, and allprior understandings, written or oral, relating thereto are superseded by this Agreement.  This Agreement may not be modified, amended,waived or supplemented except as provided herein.

 

Section 11.10                          Headings.

 

The headingsherein are for purposes of reference only and shall not otherwise affect themeaning or interpretation of any provision hereof.

 

Section 11.11         Schedules and Exhibits.

 

The schedules andexhibits attached hereto and referred to herein shall constitute a part of thisAgreement and are incorporated into this Agreement for all purposes.

 

Section11.12                          No Bankruptcy PetitionAgainst the TRS Sub-Trust.

 

The TRS Serviceragrees that, prior to the date that is one year and one day after the paymentin full of the Notes, it will not institute against the TRS Sub-Trust, or joinany other Person in instituting against UBS, any bankruptcy, reorganization,arrangement, insolvency or liquidation proceedings or other proceedings underthe laws of the United States or any state of the United States.  This Section 11.12 shall survive thetermination of this Agreement.

 

Section 11.13                          Rightto Inspect.

 

The TRS Serviceragrees that UBS shall have the right to inspect its servicing facilities forthe purpose of satisfying UBS that the TRS Servicer has the ability to servicethe Mortgage Loans as provided under this Agreement.

 

Section 11.14                          NoRecourse.

 

It is expresslyunderstood and agreed by the parties hereto that (a) this Agreement is executedand delivered by Wilmington Trust Company, not individually or personally butsolely as trustee of the TRS Sub-Trust, in the exercise of the powers andauthority conferred and vested in it, (b) each of the representations,undertakings and agreements herein made on the part of the TRS Sub-Trust ismade and intended not as personal representations, undertakings and agreementsby Wilmington Trust Company but is made and intended for the purpose of bindingonly the TRS Sub-Trust, (c) nothing herein contained shall be construed ascreating any liability on Wilmington Trust Company, individually or personally,to perform any covenant either expressed or implied contained herein, all suchliability, if any, being expressly waived by the parties hereto and by anPerson claiming by, through or under the parties hereto and (d) under nocircumstances shall Wilmington Trust Company be personally liable for thepayment of any indebtedness or expenses of the TRS Sub-Trust or be liable forthe breach or failure of any obligation, representation, warranty or covenantmade or undertaken by the TRS Sub-Trust under this Agreement or any otherrelated documents.

 

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IN WITNESSWHEREOF, the TRS Servicer, the TRS Sub-Trust and UBS have caused their names tobe signed hereto by their respective officers thereunto duly authorized as ofthe day and year first above written.

 
|   | MORTGAGEIT SPV I  acting with respect to the  TRS Sub-Trust |
|--------|-------------------------------------------------------------|
|   |                                                        |   |
|   | By:                                                         | WILMINGTON TRUST  COMPANY, |
|   |                                                        | not in its  individual capacity, but solely |
|   |                                                        | as Owner Trustee  under the Trust Agreement |
|   |                                                        |   |
|   | By:                                                         | /s/ Janel R.  Havrilla |   |
|   | Name:                                                       | Janel R.  Havrilla |   |
|   | Title:                                                      | Financial  Services Officer |   |
|   |                                                        |   |
|   |                                                        |   |
|   | MORTGAGEIT,  INC.,                                          |
|   | as TRS Servicer                                             |
|   |                                                        |   |
|   |                                                        |   |
|   | By:                                                         | /s/ JOHN R. CUTI |   |
|   | Name:                                                       | John R. Cuti |   |
|   | Title:                                                      | Secretary |   |
|   |                                                        |   |
|   |                                                        |   |
|   | UBS REAL ESTATE  SECURITIES INC.                            |
|   |                                                        |   |
|   |                                                        |   |
|   | By:                                                         | /s/ ROBERT  CARPENTER |   |
|   | Name:                                                       | Robert Carpenter |
|   | Title:                                                      | Director |
|   |                                                        |   |
|   |                                                        |   |
|   | By:                                                         | /s/ GEORGE A.  MANGIARACINA |   |
|   | Name:                                                       | George A.  Mangiaracina |
|   | Title:                                                      | Managing  Director |
|        |                                                             |  |  |  |  |  |  |  |  |

 

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EXHIBIT A

 

MORTGAGE LOAN SCHEDULE

 

 

On file with UBSReal Estate Securities Inc.

 

A-1

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