**Exhibit 10.24**

 

 

UBS Real EstateSecurities Inc.,(UBS)

 

MortgageITHoldings, Inc.,(Master Servicer)

 

and

 

MortgageIT SPV I,(Trust)

 

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REIT 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                                                                      | REIT  Servicer to Act as REIT 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  REIT SERVICER                                                    |                                                                                   |
|                                                                                   |                                                                                   |   |
| Section 7.01                                                                      | Indemnification;  Third Party Claims.                                                  |   |
|                                                                                        |                                                                                        |  |  |

 

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| Section 7.02                              | Merger  or Consolidation of the REIT 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 REIT Servicer.           |   |
|                                           |                                                   |   |
| ARTICLE X  SUCCESSOR TO THE REIT 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 REIT Sub-Trust.    |   |
| Section 11.13                             | Right to Inspect.                                      |   |
| Section 11.14                             | No Recourse.                                           |   |

 

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Thisis a REIT Servicing Agreement for conventional fixed-rate and adjustable-rateresidential first and second mortgage loans, dated as of August 4, 2004and as may be amended and/or restated from time to time (this “ServicingAgreement” or this “Agreement”), and is executed among UBS RealEstate Securities Inc., as purchaser under the Loan Purchase Agreement (asdefined below) (in such capacity, “UBS”), MortgageIT SPV I (the “Trust”)acting with respect to the REIT Sub-Trust and MortgageIT Holdings, Inc. (“MortgageITHoldings”), as servicer (in such capacity, the “REIT Servicer”).

 

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

 

WHEREAS,MortgageIT Holdings has agreed to sell and contribute to the REIT Sub-Trust andthe REIT Sub-Trust has agreed to purchase from time to time certain mortgageloans pursuant to a Loan Sale Agreement, dated as of the date hereof, betweenMortgageIT, Inc. (“MortgageIT”), MortgageIT Holdings and the Trust, acting withrespect to the REIT Sub-Trust (as amended, supplemented or otherwise modifiedand in effect from time to time, the “Loan Sale Agreement”) on aservicing-released basis, and on the basis that MortgageIT Holdings will act asREIT Servicer in the case of mortgage loans sold and contributed by MortgageITHoldings to the REIT Sub-Trust pursuant to such agreement (the “MortgageLoans”);

 

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

 

WHEREAS,those Mortgage Loans shall be delivered as whole loans on various PurchaseDates as provided herein as indicated on the Mortgage Loan Schedule, which isto be annexed hereto on the related Purchase Date as part of Exhibit A;

 

WHEREAS,UBS, the REIT Sub-Trust and the REIT Servicer wish to prescribe the manner ofmanagement, servicing and control of the Mortgage Loans;

 

NOW,THEREFORE, in consideration of the mutual agreements hereinafter set forth, andfor other good and valuable consideration, the receipt and adequacy of which ishereby acknowledged, UBS, the REIT Sub-Trust and the REIT Servicer agree asfollows:

 

# **ARTICLE I**DEFINITIONS

# ** **

Forall purposes of this Servicing Agreement, except as otherwise expresslyprovided herein or unless the context otherwise requires, capitalized terms nototherwise defined herein shall have the meanings assigned to such terms in theDefinitions List attached as Schedule 1 to the Loan Sale Agreement (the “DefinitionsList”).

 

AdministrationAgreement:  TheAdministration Agreement dated as of August 4, 2004, between the Trust andMortgageIT, as amended, supplemented or otherwise modified from time to time.

 

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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 REIT 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.

 

AncillaryIncome:  All fees andamounts charged to the Mortgagor by the REIT Servicer for services necessary tothe servicing of the Mortgage Loans, including but not limited to late charges,NSF Fees, administrative charges (e.g., copying charges for duplicatedocuments, and charges for opening escrow accounts), assumption fees andrelease and reconveyance fees.

 

BlockedAccount:  Bothcollectively and individually, any “blocked” or “controlled” accountsestablished by the REIT Servicer at the direction of, and for the benefit ofUBS, which is subject to a security interest in favor of UBS.  Any such Blocked Account shall beestablished with respect to any Mortgage Loans which are being directlyserviced by the REIT, rather than serviced by GMAC as sub-servicer and shall bedocumented pursuant to a blocked account agreement in form and substancesatisfactory to UBS.

 

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:  The CustodialAgreement, dated as of August 4, 2004, among the Trust, the Custodian,MortgageIT, MortgageIT Holdings and UBS, as the same shall be modified andsupplemented and in effect from time to time.

 

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

 

DueDate:  The day of themonth on which the Monthly Payment is due on a Mortgage Loan, exclusive of anydays of grace. 

 

DuePeriod:  With respectto each Payment Date, the period commencing on the first day of the monthpreceding the month of the Payment Date and ending on the last day of the monthpreceding the month of the Payment Date.

 

ElectronicTracking Agreement: The Electronic Tracking Agreement, dated as of August 4, 2004,among UBS, the Trust, MortgageIT, MortgageIT Holdings, MERSCORP, Inc. andMortgage Electronic Registration Systems, Inc., as the same shall be amended,supplemented or otherwise modified from time to time; provided that if noMortgage Loans are or will be MERS Designated Mortgage Loans, all referencesherein to the Electronic Tracking Agreement shall be disregarded.

 

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EligibleAccount:  (i) Anaccount or accounts maintained with a depository institution the short-termdebt obligations of which are rated AA or better by Standard & PoorsRatings Services, or (ii) an account or accounts the deposits in which arefully insured by the FDIC, or (iii) a trust account or accounts maintained witha federal or state chartered depository institution or trust company acting inits fiduciary capacity, the debt obligations of which are rated A-1 or betterby Standard & Poors Ratings Services.

 

Errorsand Omissions Insurance Policy:  An errors and omissions insurance policy to be maintained by theREIT Servicer pursuant to Section 4.11.

 

EscrowAccount:  The separateaccount or accounts created and maintained pursuant to Section 4.06.

 

EscrowPayments:  Withrespect to any Mortgage Loan, the amounts constituting any of ground-rents,taxes, assessments, water rates, sewer rents, municipal charges, mortgageinsurance premiums, fire and hazard insurance premiums, condominium charges,and any other payments required to be escrowed by the Obligor with theMortgagee pursuant to the Mortgage or any other document.

 

Eventof Default:  Any oneof the conditions or circumstances enumerated in Section 8.01.

 

FDIC:  The Federal Deposit Insurance Corporation orany successor thereto.

 

FidelityBond:  A fidelity bondto be maintained by the REIT Servicer pursuant to Section 4.11.

 

InsuranceProceeds:  Withrespect to each Mortgage Loan, proceeds of insurance policies insuring theMortgage Loan or the related Mortgaged Property.

 

InsuredDepository Institution: Insured Depository Institution shall have the meaning ascribed to suchterm by Section 1813(c)(2) of Title 12 of the United States Code, asamended from time to time.

 

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.

 

MonthlyPayment:  Thescheduled monthly payment of principal and interest on a Mortgage Loan.

 

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

 

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MortgageInterest Rate:  Theannual rate of interest borne on a Mortgage Loan and, with respect toadjustable rate Mortgage Loans, as adjusted from time to time in accordancewith the provisions of the Mortgage Note.

 

MortgageLoan Maturity Date: The final maturity date as set forth on the Mortgage Note of a MortgageLoan.

 

MortgageLoan Remittance Rate: With respect to each Mortgage Loan, an annual rate of interest equal tothe Mortgage Interest 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).

 

PrepaymentCharge:  The fee, ifany is provided for in the related Mortgage Note, to be paid by the Mortgagorfor the privilege to prepay the principal obligation of the related MortgageLoan prior to the related Mortgage Loan Maturity Date; which when required bythe terms of the Mortgage Note shall be collected by the REIT Servicer upon theMortgagor’s full and voluntary Principal Prepayment except to the extent that:(1) the enforceability thereof may be limited by bankruptcy, insolvency,moratorium, receivership and other similar laws relating to debtors’ andcreditors’ rights generally; (2) the collectibility thereof may be limited dueto acceleration in connection with a foreclosure or other involuntaryprepayment; (3) subsequent changes in state or federal law (includingdecisional authority) limit or prohibit enforceability of the applicablecharge; or (4) a servicer has, in response to a default as provided for inSection 4.01 of this Agreement, waived, altered, limited or forgiven thePrepayment Charge provided in the related 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 representing scheduled interest due on any date or dates in anymonth or months subsequent to the month of prepayment.

 

PurchaseDate:  With respect toa Mortgage Loan, the date on which UBS purchases such Mortgage Loan from theREIT Sub-Trust.

 

REITServicer:  MortgageITHoldings, Inc., or its successor in interest or assigns, or any successor tothe REIT Servicer under this Agreement appointed as herein provided.

 

REODisposition:  Thefinal sale by the REIT Servicer of any REO Property.

 

REODisposition Proceeds: All amounts received with respect to an REO Disposition pursuant toSection 4.14.

 

REOProperty:  A MortgagedProperty acquired by the REIT Servicer actions with respect to the REITSub-Trust and the Purchaser through foreclosure or by deed in lieu offoreclosure, as described in Section 4.14.

 

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SecuritiesAct of 1933 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.

 

ServicingAdvances:  Allcustomary, reasonable and necessary “out of pocket” costs and expenses(including reasonable attorneys’ fees and disbursements) incurred in theperformance by the REIT Servicer of its servicing obligations, including, butnot limited to, the cost of (a) the preservation, restoration and protection ofthe Mortgaged Property, (b) any enforcement or judicial proceedings, includingforeclosures, (c) the management and liquidation of any REO Property and (d)compliance with the obligations under Section 4.07.

 

ServicingFee: With respect to each Mortgage Loan, the amount of theannual fee payable to the REIT Servicer from the Monthly Payment collected bythe REIT Servicer during the prior Due Period, which shall be, without proration or portion thereof, equal to: one-twelfth of the product of (a) theServicing Fee Rate and (b) the outstanding principal balance of the relatedMortgage Loan as of the beginning of the month balance.  The REIT Servicer’s right of reimbursementfor the earned Servicing Fee by monthly withdrawal from the Blocked Accountpursuant to Section 4.05 shall relate to funds payable as collectionsand/or recoveries on the related Mortgage Loan. 

 

ServicingFee Rate:  0.50% perannum.

 

ServicingFile:  With respect toeach Mortgage Loan, the file retained by the REIT Servicer consisting oforiginals or copies of all Mortgage Loan Documents from the Submission Package.

 

ServicingOfficer:  Any officerof the REIT Servicer involved in or responsible for, the administration andservicing of the Mortgage Loans whose name appears on a list of servicingofficers furnished by the REIT Servicer to the REIT Sub-Trust upon request, assuch list may from time to time be amended.

 

ServicingTransfer Date:  Theeffective date of a transfer of servicing from the REIT Servicer to a SuccessorServicer, as provided in Section 11.01 of this Agreement.

 

StatedTermination Date: August 31, 2005, as such date may be extended as provided inSection 9.01 hereof.

 

SubmissionPackage:  With respectto each Mortgage Loan, a Dry Submission Package, a Cash Window SubmissionPackage, a Conduit Submission Package or a Conversion Submission Package, asapplicable, as such terms are defined in Schedule 1 to the Loan SaleAgreement.

 

SubservicingAccount:  Anycollection, servicing, custodial or escrow account established by GMAC.

 

TransactionDocuments:  The LoanSale Agreement, the Loan Repurchase Agreement, the Loan ParticipationAgreement, the Loan Purchase Agreement, the Custodial 

 

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Agreement, the TRSServicing Agreement, this Agreement, the Blocked Account Agreement, the TrustAgreement, the Electronic Tracking Agreement and the Administration Agreement.

 

Trust:  MortgageIT SPV I, a Delaware statutorytrust.

 

TrustAgreement: The Trust Agreement dated as of August 4,2004, by and among MortgageIT, MortgageIT Holdings, and Wilmington TrustCompany, as Owner Trustee, as amended, supplemented or otherwise modified fromtime to time.

 

# **ARTICLE II**AGREEMENT TO PURCHASE, CONVEYANCE,AND DELIVERY OF THE MORTGAGE LOANS

# ** **

## Section 2.01                                Conveyanceof Mortgage Loans; Possession of Submission Packages; Books & Records.

 

### (a)                                  Conveyanceof Mortgage Loans; Delivery of Mortgage Loan Documents.  Pursuant to the Loan Sale Agreement, on eachPurchase Date, MortgageIT Holdings shall sell, transfer, assign, set over andconvey to the REIT Sub-Trust, 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. Pursuant to the Note Purchase Agreement, the REIT Sub-Trust shall pledgeto UBS all its right, title and interest in and to the Mortgage Loans.  From and after the sale of the MortgageLoans to the REIT Sub-Trust, all rights arising out of such Mortgage Loans,including but not limited to all funds received on or in connection with suchMortgage Loans, shall be received and held by the REIT Servicer in trust forthe benefit of UBS as owner of such Mortgage Loans, and should the REITServicer retain record title to a related Mortgage, such title shall be held bythe REIT Servicer for the sole purpose of facilitating the servicing of therelated Mortgage Loan.

 

### (b)                                 Possessionof Submission Packages.  As of therelated Purchase Date, MortgageIT Holdings will have delivered and released tothe related 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 notdelivered to the related Custodian are and shall be held in trust by the REITServicer for the benefit of UBS as the owner. The REIT Servicer shall maintain a Servicing File consisting of a copyof the contents of each Submission Package and the originals of the documentsin each Submission Package not delivered to the related Custodian.  The possession of each Servicing File by theREIT Servicer is at the will of UBS for the sole purpose of servicing therelated Mortgage Loan, and such retention and possession by the REIT Serviceris in 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 REIT 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 REIT Servicer shall vest immediately in UBS andshall be retained and maintained by the REIT Servicer, in trust, at the will ofUBS and only in such custodial capacity. Each Servicing File shall be segregated from the other books and recordsof the REIT Servicer and shall be marked appropriately to reflect clearly thesale of

 

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the related Mortgage Loanto UBS.  The REIT Servicer shall releaseits custody of the contents of any Servicing File only in accordance withwritten instructions from UBS, unless such release is required as incidentalto: (i) the REIT Servicer’s servicing of the Mortgage Loans; or (ii) a releaseor reconveyance pursuant to Section 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 REITServicer 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 REIT Sub-Trust, the REIT Servicer maymaintain a complete copy of all Mortgage Loan Files at its own expense tofulfill State and Federal record retention requirements applicable to sub primemortgage lenders and/or servicers.

 

# **ARTICLE III**REPRESENTATIONS AND WARRANTIES

# ** **

## Section 3.01                                ServicerRepresentations and Warranties.

##  

TheREIT Servicer represents and warrants to the REIT Sub-Trust, UBS and the OwnerTrustee that as of the date hereof, and as of each Purchase Date:

 

### (a)                                  DueOrganization and Authority.  TheREIT Servicer is a corporation duly organized, validly existing and in goodstanding under the laws of the state of Maryland and has all licenses necessaryto carry on its business as now being conducted and is licensed, qualified andin good standing in each state where a Mortgaged Property is located if thelaws of such state require licensing or qualification in order to conductbusiness of the type conducted by the REIT Servicer, and in any event the REITServicer is in compliance with the laws of any such state to the extentnecessary to ensure the enforceability of the related Mortgage Loan inaccordance with the terms of this Agreement; the REIT Servicer has the fullcorporate power and authority to execute and deliver this Agreement and toperform in accordance herewith; the execution, delivery and performance of thisAgreement (including all instruments of transfer to be delivered pursuant tothis Agreement) by the REIT Servicer and the consummation of the transactionscontemplated hereby have been duly and validly authorized by all necessarycorporate action; this Agreement evidences the valid, binding and enforceableobligation of the REIT Servicer; and all requisite corporate action has beentaken by the REIT Servicer to make this Agreement valid and binding upon theREIT Servicer in accordance with its terms, except as such terms may be limitedby bankruptcy, insolvency, reorganization, moratorium or other similar lawsaffecting the rights of creditors generally and by general principals ofequity;

###  

### (b)                                 OrdinaryCourse of Business.  Theconsummation of the transactions contemplated by this Agreement are in the ordinarycourse of business of the REIT Servicer, and the transfer, assignment andconveyance of the Mortgage Notes and the Mortgages by the REIT Servicerpursuant to this Agreement are not subject to the bulk transfer or any similarstatutory provisions in effect in any applicable jurisdiction;

 

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### (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 REIT Servicer’s charter or by-laws or any legalrestriction or any material agreement or instrument to which the REIT 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 REIT Servicer or itsproperty is subject;

###  

### (d)                                 Abilityto Perform.  The REIT 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 REITServicer’s knowledge threatened against the REIT Servicer which, either in anyone instance or in the aggregate, is reasonably likely to result in anymaterial adverse change in the business, operations, financial condition,properties or assets of the REIT Servicer, or in any material impairment of theright or ability of the REIT Servicer to carry on its business substantially asnow conducted, or in any material liability on the part of the REIT Servicer,or which would draw into question the validity of this Agreement or theMortgage Loans or of any action taken or to be taken in connection with theobligations of the REIT Servicer contemplated herein, or which would be likelyto impair materially the ability of the REIT Servicer to perform under theterms of this Agreement;

###  

### (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 REIT Servicer of orcompliance by the REIT 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

###  

### (g)                                 NoSecurities Registration.  Neitherthe REIT 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 in anyMortgage Loans or any other similar security with, any Person in any manner, ormade any general solicitation by means of general advertising or in any othermanner, or taken any other action which would constitute a distribution of theMortgage Loans under the 1933 Act or which would render the disposition of anyMortgage Loans a violation of Section 5 of the 1933 Act or requireregistration pursuant thereto, nor will it act, nor has it authorized or willit authorize any Person to act, in such manner with respect to the MortgageLoans. 

 

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# **ARTICLE IV**ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

# ** **

## Section 4.01                                REITServicer to Act as REIT Servicer.

##  

TheREIT Servicer, as an independent contractor, shall service and administer theMortgage Loans and shall have full power and authority, acting alone, to do anyand all things in connection with such servicing and administration which theREIT Servicer may deem necessary or desirable, consistent with the terms ofthis Agreement and with Accepted Servicing Practices.

 

Consistentwith the terms of this Agreement, the REIT Servicer may waive any AncillaryIncome or other fee that may be collected in the ordinary course of servicingthe Mortgage Loans.  The REIT Servicershall not make any future advances to any Mortgagor under any MortgageLoan.  Unless the Mortgagor is indefault with respect to the Mortgage Loan or such default is, in the judgmentof the REIT Servicer, imminent, the REIT Servicer shall not permit anymodification of any material term of any Mortgage Loan, including anymodification that would change the Mortgage Interest Rate, defer or forgive thepayment of principal or interest, reduce or increase the outstanding principalbalance, change the Prepayment Charge, or change the Mortgage Loan MaturityDate.  Without limiting the generalityof the foregoing, the REIT Servicer shall continue, and is hereby authorizedand empowered, to execute and deliver **on behalf of** itself, the REIT Sub-Trust andUBS, all instruments of satisfaction with respect to the Mortgage Loans andwith respect to the Mortgaged Properties. Upon the request of the REIT Servicer, the REIT Sub-Trust and UBS (onits own behalf) shall execute and deliver to the REIT Servicer any powers ofattorney or other document furnished to it by the REIT Servicer to carry outits servicing and administrative duties under this Agreement.

 

Inservicing and administering the Mortgage Loans, the REIT Servicer shall employprocedures and exercise the same care that it customarily employs and exercisesin servicing and administering mortgage loans for its own account, giving dueconsideration to Accepted Servicing Practices.

 

## Section 4.02                                Liquidationof Mortgage Loans. 

##  

In theevent that any payment due under any Mortgage Loan and not postponed pursuantto Section 4.01 is not paid when the same becomes due and payable, or inthe event the Mortgagor fails to perform any other covenant or obligation underthe Mortgage Loan and such failure continues beyond any applicable graceperiod, the REIT Servicer shall take such action as (1) the REIT Servicer wouldtake under similar circumstances with respect to a similar mortgage loan heldfor its own account for investment, (2) shall be consistent with AcceptedServicing Practices, and (3) the REIT Servicer shall reasonably and in goodfaith determine 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 REIT 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

 

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such connection, the REITServicer shall from its own funds make all necessary, reasonable and properServicing Advances, provided, however, that the REIT Servicer shall not berequired to expend its own funds in connection with any foreclosure or towardsthe restoration or preservation of any Mortgaged Property, unless it shalldetermine in its sole reasonable discretion (a) that such preservation,restoration and/or foreclosure will increase the proceeds of liquidation of theMortgage Loan after reimbursement to itself for such expenses and (b) that suchexpenses will be recoverable by it either through Liquidation Proceeds orthrough Insurance Proceeds; provided that such expenses shall be reimbursedonly to the extent that the interest on the Loans and the Notes is paid infull, but neither event described in (a) and (b) above shall be a conditionprecedent for the reimbursement of the REIT Servicer.

 

## Section 4.03                                Collectionof Mortgage Loan Payments.

##  

Continuouslyfrom the date hereof until the principal and interest on all Mortgage Loans arepaid in full, the REIT 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 aBlocked Account is established as a result of the REIT directly servicing anyMortgage Loans, the provisions of this Section 4.04, Section 4.05 andSection 4.08 shall control.

 

### (a)                                  TheREIT Servicer shall segregate and hold all funds collected and receivedrelating to the Mortgage Loans, once such funds have been received in the REITServicer’s master lockbox clearing account and have been identified as relatingto the Mortgage 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 Servicer, in trust for UBS Real Estate Securities Inc. andits assignees”, established and maintained pursuant tothe Blocked Account Agreement.  TheBlocked Account shall be established with HSBC Bank or any other entityapproved by UBS.  Any funds deposited inthe Blocked Account shall at all times be fully insured to the full extentpermitted under applicable law.  Fundsdeposited in the Blocked Account may be withdrawn therefrom by the REITServicer in accordance with Section 4.05. 

###  

The REIT Servicerhereby assigns, pledges and grants a security interest in all of its right,title and interest in, to and under the Blocked Account and all amountscredited thereto at any time to UBS.

 

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

 

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#### (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)                               all Insurance Proceedsincluding amounts required to be deposited pursuant to Section 4.10 (otherthan proceeds to be held in the Escrow Account and applied to the restorationor repair of the Mortgaged Property or released to the Mortgagor in accordancewith Section 4.13), and Section 4.11; 

####  

#### (iv)                              anyamounts required to be deposited by the REIT 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)                           any amounts received withrespect to or related to any REO Property and all REO Disposition Proceedspursuant to Section 4.14; and

####  

#### (viii)                        any amounts required to bedeposited by the REIT Servicer pursuant to Section 4.08 in connection withthe 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 REIT Servicer into the Blocked Account,subject to the following: if the REIT 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 not apply and Ancillary Income shall be deposited bythe REIT Servicer into the Blocked Account. 

###  

### (d)                                 Notwithstandinganything to the contrary in this Agreement, the REIT 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)                                  TheREIT 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:

 

11

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#### (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)                               to reimburse itself forexpenses incurred and reimbursable to it pursuant to Section 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 REIT 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 REIT Servicer or the REITSub-Trust (it being acknowledged by the parties that amounts representing thePrincipal Prepayments are expected to be remitted to UBS immediately uponreceipt and in no event later than the Business Day following the date on whichsuch Principal Prepayments were received by the REIT Servicer);

####  

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

####  

#### (vii)                           on each Payment Date, to payto itself the Servicing Fee from any amounts remaining after the payment to UBSreferenced in clause (v) above, subject to Section 6.03 hereof;

####  

#### (viii)                        on each Payment Date, fromamounts remaining, to make payments in accordance with the Trust Agreement; and

####  

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

####  

### (b)                                 Followingthe REIT Servicer’s receipt of a written notice from UBS notifying the REITServicer of the occurrence of a Facility Default, an acceleration of the REITSub-Trust’s obligations under the Loan Repurchase Agreement, the Loan ParticipationAgreement, the Loan Purchase Agreement, or an Event of Default hereunder, allamounts deposited in the Blocked Account shall be paid to UBS. 

###  

## Section 4.06                                EscrowAccount.

##  

If theREIT directly services any of the Mortgage Loans, the REIT Servicer shallestablish an Escrow Account and the provisions of this Section 4.06 and ofSection 4.08 shall control.

 

12

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### (a)                                  Establishment.  The REIT 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 “MortgageITHoldings, Inc., as Servicer, in trust for UBS Real Estate Securities Inc. andits assignees and various Mortgagors”. The Escrow Account shall be established with HSBC Bank, in a manner thatshall provide maximum available insurance thereunder.  Funds deposited in the Escrow Account may be drawn on by the REITServicer in accordance with Section 4.06(c).  

###  

### (b)                                 Depositsto Escrow Account.  The REITServicer shall deposit in the Escrow Account within three (3) Business Daysafter receipt 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)                               any amounts required tobe deposited by the REIT Servicer pursuant to Section 4.08 in connectionwith the investment in Eligible Accounts.

####  

### (c)                                  Withdrawalsfrom Escrow Account.  Withdrawalsfrom the Escrow Account may be made by the REIT 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 REIT Servicer for any Servicing Advances made by the REITServicer pursuant to Section 4.07 with respect to a related Mortgage Loan,but only from amounts received on the related Mortgage Loan which representlate collections of Escrow Payments thereunder;

####  

#### (iii)                               to refund to anyMortgagor any funds found to be in excess of the amounts required under theterms 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 REIT 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)                           to clear and terminate theEscrow Account on the termination of this Agreement; and

 

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#### (viii)                        to withdraw funds deposited inerror.

####  

## Section 4.07                                Paymentof Taxes,Insurance and Other Charges.

##  

Withrespect to each Mortgage Loan, the REIT 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 REIT 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 applicable penaltyor termination date, employing for such purpose deposits of the Mortgagor inthe Escrow Account.  To the extent thata Mortgage does not provide for Escrow Payments, the REIT Servicer shall useits best efforts to determine that any such payments coming due and delinquentprior to the related Purchase Date are made by the Mortgagor.  The REIT Servicer assumes fullresponsibility for the payment of all such bills and shall effect payment ofall such bills in a manner and at a time that assures that the lien priority ofthe Mortgage is not jeopardized and, in addition, with respect to the paymentof taxes, in a manner and at a time that avoids the loss of the MortgagedProperty due to a tax sale or the foreclosure of a tax lien, irrespective ofeach Mortgagor’s faithful performance in the payment of same or the making ofthe Escrow Payments, and, if necessary, the REIT Servicer shall make ServicingAdvances from its own funds to effect such payments (subject to the REITServicer’s right of reimbursement from the Escrow Account pursuant toSection 4.06(c)(ii) or the Blocked Account pursuant toSection 4.05(a)(i)).

 

## Section 4.08                                Protectionof Accounts.

##  

Amountson deposit in the Blocked Account and the Escrow Account may at the option ofthe REIT Servicer be invested in Eligible Accounts.  Any such Eligible Account shall permit withdrawals therefrom nolater than the day before the next Payment Date.  Any such Eligible Account relating to the Blocked Account shallbe established 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 REITServicer or for the benefit of UBS.  Allincome on or gain realized from any such Eligible Account shall be for thebenefit of the REIT Servicer and may be withdrawn at any time by the REITServicer, subject to Section 4.05(b) and Section 4.06(c).  The REIT Servicer shall be responsible forany losses incurred in respect of any Eligible Account and any taxes imposed onthe REIT 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.

##  

TheREIT Servicer shall cause to be maintained for each Mortgage Loan, hazardinsurance such that all improvements upon the Mortgaged Property are insured bya generally acceptable, licensed and qualified insurer against loss by fire andhazards of extended coverage, in an amount which is at least equal to thelesser of (i) the replacement value of the

 

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improvements securingsuch Mortgage Loan or (ii) the outstanding principal balance of the MortgageLoan.

 

Ifupon origination of the Mortgage Loan, the related Mortgaged Property waslocated in an area identified in the Federal Register by the Flood EmergencyManagement Agency as having special flood hazards (and such flood insurance hasbeen made available) a flood insurance policy meeting the requirements of thecurrent guidelines 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 REIT 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 REIT 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 REIT Servicer shall immediately force place the requiredflood insurance on the Mortgagor’s behalf (except as may be prohibited orlimited by applicable law).

 

Pursuantto Section 4.04, any amounts collected by the REIT 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 REIT 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 theevent that the REIT Servicer shall obtain and maintain a blanket policyinsuring against losses arising from fire and hazards covered under extendedcoverage on all of the Mortgage Loans, then, to the extent such policy providescoverage in an amount equal to the amount required pursuant toSection 4.10 and otherwise complies with all other requirements ofSection 4.10, it shall conclusively be deemed to have satisfied itsobligations as set forth in Section 4.10. Any amounts collected by the REIT Servicer under any such policyrelating to a Mortgage Loan shall be deposited in the Blocked Account subject towithdrawal pursuant to Section 4.05. Such policy may contain a deductible clause, in which case, in the eventthat there shall not have been maintained on the related Mortgaged Property apolicy complying with Section 4.10, and there shall have been a loss whichwould have been covered by such policy, the REIT Servicer shall deposit in theBlocked Account at the time of such loss the amount not otherwise payable underthe blanket policy because of such deductible clause, such amount to depositedfrom the REIT Servicer’s funds, without reimbursement therefor.

 

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## Section 4.11                                Maintenanceof Fidelity Bond and Errors and Omissions Insurance.

##  

TheREIT Servicer shall maintain, at its own expense, a blanket Fidelity Bond andan Errors and Omissions Insurance Policy, with broad coverage on all officers,employees or other persons acting in any capacity requiring such persons tohandle 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 REIT 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 REIT 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 REITServicer from its duties and obligations as set forth in this Agreement.  The REIT Servicer shall deliver a copy ofsuch fidelity bond and insurance policy to the REIT Sub-Trust and UBS uponrequest.

 

## Section 4.12                                Deliveryof Document in Possession of Custodian.

##  

TheREIT Sub-Trust shall cause either Custodian to deliver to the REIT Servicer, ona timely basis, those mortgage loan documents that the REIT Servicer mayrequest from such Custodian from time to time. Should such Custodian fail to deliver the requested mortgage loandocuments on a timely basis, the REIT Servicer shall not be liable for anyrelated loss or expense arising therefrom. Any Event of Default which is attributable to the failure of suchCustodian to deliver or such Custodian’s untimely delivery of reasonablyrequested mortgage loan documents shall not be chargeable to the REIT Servicerand shall be deemed to not have occurred. 

 

## Section 4.13                                Restorationof Mortgaged Property.

##  

In theevent that any Mortgaged Property is damaged as a result of an insured actunder one of the insurance policies discussed in this Agreement or subject to agovernmental taking, the REIT Servicer shall apply any Insurance Proceeds orCondemnation Proceeds (collectively “Proceeds”) actually received by it,in accordance with Accepted Servicing Practices, applicable law, and the termsof the related Mortgage or Deed of Trust. Consistent therewith the REIT Servicer shall apply such Proceeds toreduce the principal balance of the Mortgage Loan unless;

 

1.                                       Applicablelaw requires otherwise; or

 

2.                                       TheREIT 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 REIT Servicerwill consider the following:

 

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

 

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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.

 

TheREIT Servicer need not obtain the approval of UBS prior to releasing anyInsurance Proceeds or Condemnation Proceeds to be applied to the restoration orrepair of the Mortgaged Property if such release is in accordance herewith andwith Accepted Servicing Practices.  IfUBS is named as an additional loss payee, the REIT Servicer is hereby empoweredto endorse any loss draft issued in respect of such a claim in the name of UBS.

 

## Section 4.14                                Title, Management and Disposition of REOProperty.

##  

In theevent that title to any Mortgaged Property is acquired in foreclosure or bydeed in lieu of foreclosure, the deed or certificate of sale shall be taken inthe name of UBS or its designee of record on the date of acquisition of title,for UBS.  UBS or its designee shallprovide the REIT Servicer with one or more powers of attorney, if reasonablyrequested, to enable the REIT Servicer to fulfill its duties under this Agreement.

 

TheREIT Servicer shall manage, conserve, protect and operate each REO Property forthe REIT Sub-Trust and UBS, solely for the purpose of its prompt dispositionand sale.  The REIT Servicer, eitheritself or through an agent selected by the REIT Servicer, shall manage,conserve, protect and operate the REO Property in the same manner that itmanages, conserves, protects and operates other foreclosed property for its ownaccount, and in the same manner that similar property in the same locality asthe REO Property is managed.  

 

TheREIT Servicer shall attempt to sell the REO Property (and may temporarily rentthe same) on such terms and conditions as the REIT Servicer determines in itsgood faith judgment to be in the best interest of the REIT 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 REIT Servicer shallreimburse itself from the Blocked Account for any related unreimbursedServicing Advances, unpaid Servicing Fees and unreimbursed expenses andadvances made pursuant to this Agreement. 

 

Withrespect to each REO Property, the REIT Servicer shall deposit all fundscollected and received in connection with the operation of the REO Property inthe Blocked Account within three (3) Business Days after receipt of such fundsand shall also deposit in the Blocked Account all revenues received withrespect to the conservation and disposition of the related REO Property.

 

TheREIT Servicer shall withdraw from the Blocked Account funds necessary for theproper operation, management and maintenance of the REO Property, including thecost of maintaining any hazard insurance pursuant to Section 4.10 and thefees of any managing agent of the REIT Servicer, a sub servicer, or the REITServicer itself.  The REO management feeshall be an amount that is reasonable and customary in the area where theMortgaged Property is located.

 

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## Section 4.15                                Sub-Servicer.

##  

TheREIT Servicer may, with the prior consent of UBS, appoint a sub-servicer toperform any or all of its duties under this Agreement with respect to anyMortgage Loan.  UBS hereby consents tothe appointment of GMAC as a sub servicer under this Agreement.  GMAC and any other sub-servicer shallservice and administer the Mortgage Loans in accordance with the terms of thisAgreement, the Accepted Servicing Practices. The REIT Servicer shall remain liable for any and all of its dutiesunder this Agreement 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 REIT 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 REIT 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.  

##  

TheREIT Servicer will notify the REIT Sub-Trust and UBS in writing of any of thefollowing promptly upon learning of the occurrence thereof, describing the sameand, if applicable, any remedial steps 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.

####  

## Section 5.02                                MonthlyReports.

##  

Notlater than 5:00 p.m. New York City time on each Payment Date, the REIT Servicerwill provide to the REIT Sub-Trust and UBS, by electronic or other formatacceptable to UBS, the following information in respect of the preceding month:

####  

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

####  

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

 

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#### (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 REITServicer’s servicing portfolio as UBS may reasonably request;

####  

#### (v)                                           Any other reports as deemed necessary at securitizationand reasonably prepared by the REIT Servicer.

####  

Inaddition, the REIT Servicer shall provide UBS with such information concerningthe Mortgage Loans as is necessary for UBS to prepare its federal income taxreturns as UBS may reasonably request from time to time.

 

# **ARTICLE VI**GENERAL SERVICING PROCEDURES

# ** **

## Section 6.01                                Transfersof Mortgaged Property.

##  

Exceptas limited by applicable law, the REIT Servicer shall use commerciallyreasonable efforts to enforce any “due-on-sale” provision contained in anyMortgage or Mortgage Note and to deny assumption by the Person to whom theMortgaged Property has been or is about to be sold whether by absoluteconveyance or by contract of sale, and whether or not the Mortgagor remainsliable on the Mortgage and the Mortgage Note. When the Mortgaged Property has been conveyed by the Mortgagor, the REITServicer shall, to the extent it has knowledge of such conveyance, exercise itsrights to accelerate the maturity of such Mortgage 

 

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Loan under the“due-on-sale” clause applicable thereto, provided, however, that the REITServicer shall not exercise such rights if prohibited by law from doingso.  

 

If theREIT Servicer reasonably believes it is unable under applicable law to enforcesuch “due-on-sale” clause, the REIT Servicer shall endeavor to enter into (i)an assumption and modification agreement with the Person to whom such propertyhas been conveyed (subject to said Person meeting the REIT Servicer’s underwritingguidelines then in existence) pursuant to which such Person becomes liableunder the Mortgage Note and the original Mortgagor remains liable thereon or(ii) in the event the REIT Servicer is unable under applicable law to requirethat the original Mortgagor remain liable under the Mortgage Note, asubstitution of liability agreement with the purchaser of the MortgagedProperty pursuant to which the original Mortgagor is released from liabilityand UBS of the Mortgaged Property is substituted as Mortgagor and becomesliable under the Mortgage Note.  If anassumption fee is collected by the REIT Servicer for entering into anassumption agreement such fee will be retained by the REIT Servicer asAncillary Income, subject to Section 4.04(c).  In connection with any such assumption, neither the MortgageInterest Rate borne by the related Mortgage Note, the term of the Mortgage Loannor the outstanding principal amount of the Mortgage Loan shall be changed,without UBS’s written consent.

 

## Section 6.02                                Satisfactionof Mortgages and Release of Submission Packages.

##  

Uponthe payment in full of any Mortgage Loan, the REIT Servicer shall notify UBS inthe weekly Principal Prepayment Remittance and shall be authorized to requestthe immediate release of any Mortgage Documents for such Mortgage Loan.  The costs associated with the release orreconveyance shall be borne by the REIT Sub-Trust, to the extent such amountsare not recovered from the Mortgagor.

 

Exceptas provided for in Section 4.01 of this Agreement, if the REIT Servicersatisfies or releases a Mortgage without first having obtained payment in fullof the indebtedness secured by the Mortgage without the prior written consentof UBS, upon written demand of UBS and the Majority Investors the REIT Servicershall repurchase the related Mortgage Loan at the Repurchase Amount.  The REIT Servicer shall maintain theFidelity Bond and Errors and Omissions Insurance Policy as provided for inSection 4.11 insuring the REIT Servicer against any loss it may sustainwith respect to any Mortgage Loan not satisfied in accordance with theprocedures set forth herein.

 

## Section 6.03                                ServicingCompensation.

##  

Ascompensation for its services hereunder, the REIT Servicer shall be entitled onthe terms set forth herein to request withdrawals from the Blocked Account orthe Subservicing Account the amount of its Servicing Fee with respect to suchMortgage Loan; however such withdrawal or retention shall only be permitted tobe made from the related Monthly Payment with respect to such MortgageLoan.  The Servicing Fee shall bepayable monthly without pro ration and shall be computed on the basis of theunpaid principal balance for such Mortgage Loan as of the first day of therelated Due Period.  For so long as noFacility Default has occurred and is continuing, as servicing compensation, theREIT Servicer shall be entitled to receive the Servicing Fee, as provided inSection 4.05(a)(vii) and to retain as income all

 

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Ancillary Income andother like charges or fees, subject to Section 4.04(c); provided thatfollowing the occurrence and during the continuance of a Facility Default, theright of the REIT Servicer to receive any such servicing compensation shall besuspended and such amounts shall be paid to UBS.

 

# **ARTICLE VII**THEREIT SERVICER

# ** **

## Section 7.01                                Indemnification;Third Party Claims.

##  

TheREIT Servicer shall indemnify the REIT Sub-Trust, UBS and the Owner Trustee andtheir respective Affiliates and officers, directors, employees, agents andadvisors (each an “Indemnified Party”) harmless from and against any andall liabilities, claims, losses, damages, penalties, fines, forfeitures,reasonable legal fees and related costs of counsel, judgments, and any othercosts, fees and expenses (collectively, the “Costs”) that may be imposedon, incurred by or assessed against such Indemnified Party relating to orarising out of a third party claim related to the failure of the REIT Servicer,GMAC Mortgage Corporation as sub servicer or any other sub servicer to performits duties and service the Mortgage Loans in strict compliance with the termsof this Agreement.  If an IndemnifiedParty shall so request, the REIT Servicer shall assume the defense of any suchclaim.  The REIT 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 REIT Servicer for all amounts advancedby it pursuant to the preceding sentence except when the claim is in any wayrelated to the failure of the REIT Servicer to service and administer theMortgage Loans or otherwise to perform its obligations in strict compliancewith the terms of this Agreement.

 

TheREIT Servicer shall also reimburse an Indemnified Party as and when billed bysuch Indemnified Party for all such Indemnified Party’s costs and expensesincurred in connection with the enforcement or the preservation of such IndemnifiedParty’s rights against the REIT Servicer under this Agreement, includingwithout limitation the reasonable fees and expenses of its counsel.

 

## Section 7.02                                Mergeror Consolidation of the REIT Servicer.

##  

TheREIT Servicer shall keep in full effect its existence, rights and franchises asa corporation, and shall obtain and preserve its qualification to do businessas a 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 theREIT Servicer may be merged or consolidated, or any corporation resulting fromany merger, conversion or consolidation to which the REIT Servicer shall be aparty, or any Person succeeding to the business of the REIT Servicer, shall bethe successor of the REIT Servicer hereunder, without the execution or filingof any paper or any further act on the part of any of the parties hereto,anything herein to the contrary notwithstanding.

 

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## Section 7.03                                Limitationon Liability of Servicer and Others.

##  

Neitherthe REIT Servicer nor any of the directors, officers, employees or agents ofthe REIT Servicer shall be under any liability to the REIT Sub-Trust or UBS forany action 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 REIT 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 REIT Servicer and any director, officer, employee or agent ofthe REIT 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 REIT 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 REIT 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 REITServicer shall be entitled to reimbursement from the REIT Sub-Trust of thereasonable legal expenses and costs of such action.

 

## Section 7.04                                Limitationon Resignation and Assignment by Servicer.

##  

TheTrust actions with respect to the REIT Sub-Trust and UBS have entered into thisAgreement with the REIT Servicer and the REIT Sub-Trust and UBS will purchasethe Mortgage Loans in reliance upon the independent status of the REITServicer, and the representations as to the adequacy of its servicingfacilities, personnel, records and procedures, its integrity, reputation andfinancial standing, and the continuance thereof.  Therefore, the REIT Servicer shall neither assign this Agreementor the servicing hereunder or delegate its rights or duties hereunder or anyportion hereof (to other than a sub servicer) or sell or otherwise dispose ofall or substantially all of its property or assets without the prior writtenconsent of UBS, which consent shall not be unreasonably withheld.  The REIT Servicer shall not resign from theobligations and duties hereby imposed on it except by mutual consent of theREIT Servicer, the REIT Sub-Trust and UBS or upon the determination that itsduties hereunder are no longer permissible under applicable law and suchincapacity cannot be cured by the REIT Servicer.  No such resignation shall become effective until a successorshall have assumed the REIT Servicer’s responsibilities and obligationshereunder in the manner provided in Section 10.01.

 

# **ARTICLE VIII**DEFAULT

# ** **

## Section 8.01                                Eventsof Default.

##  

Eachof the following shall constitute an Event of Default on the part of the REITServicer:

 

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#### (i)                                               anyfailure by the REIT 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 SaleAgreement, 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 REIT Servicer by UBS (which UBS may inits discretion give); or

####  

#### (ii)                                            failureby the REIT Servicer to observe or perform in any material respect any other ofthe covenants or agreements on the part of the REIT Servicer set forth in thisAgreement or in the Custodial Agreement which continues unremedied for a periodof 30 days after the date on which written notice of such failure, requiringthe same to be remedied, shall have been given to the REIT Servicer by UBS orby the related Custodian (and UBS may or, as the case may be, shall give suchnotice as contemplated in clause (i) above); or

####  

#### (iii)                                         failureby the REIT 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 REIT Servicer to perform its duties under this Agreement;

####  

#### (iv)                                        adecree or order of a court or agency or supervisory authority having jurisdictionfor the appointment of a conservator or receiver or liquidator in anyinsolvency, readjustment of debt, including bankruptcy, marshaling of assetsand liabilities or similar proceedings, or for the winding-up or liquidation ofits affairs, shall have been entered against the REIT Servicer and such decreeor order shall have remained in force undischarged or unstayed for a period of60 days; or

####  

#### (v)                                           theREIT 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 REIT Servicer or of orrelating to all or substantially all of its property; or

####  

#### (vi)                                        forso long as MortgageIT Holdings is the REIT Servicer, the occurrence andcontinuance of a Facility Default or any of the following circumstances orevents (“Servicing Termination Events”):

####  

##### (1)                                       anyfailure by the REIT 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 REIT 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 REIT Servicer) after the date on

 

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##### which written notice of such failure, requiring thesame to be remedied, shall have been given to the REIT Servicer by UBS; or

#####  

##### (1)                                       anyrepresentation, warranty or certification made or deemed made herein or in anyof the other Transaction Documents by the REIT 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

#####  

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

#####  

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

#####  

##### (4)                                       theREIT 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

#####  

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

#####  

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

#####  

##### (7)                                       theREIT 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

#####  

##### (8)                                       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)                                     theREIT Servicer shall admit in writing its inability to pay its debts generallyas they 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.

####  

Ineach and every such case, so long as an Event of Default shall not have beenremedied or if UBS’s obligations to repurchase all Mortgage Loans have beenaccelerated pursuant to Section 7 of the Loan Sale Agreement (regardlessof whether the related Event of

 

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Default has later beenremedied), in addition to whatsoever rights UBS may have at law or equity todamages, including injunctive relief and specific performance, UBS, by noticein writing to the REIT Servicer (which UBS may in its discretion give and shallgive if requested to do so by the Majority Investors), may terminate all therights and obligations of the REIT Servicer under this Agreement and in and tothe Mortgage Loans and the proceeds thereof (a) immediately, in the case of anyEvent of Default referred to in the Loan Sale Agreement or (b) upon payment ofall monies otherwise owed hereunder to the REIT Servicer (e.g. ServicingAdvances) in any other case; provided that, if a termination occursimmediately, pursuant to clause (a) of this sentence, the REIT Servicer’s rightto receive all monies otherwise owed hereunder to it in respect of priorperiods and, as provided in Section 10.01, all claims of any other Personagainst the REIT Servicer, in respect of prior periods shall survive thetermination, subject to the following sentence.  Following the occurrence and during the continuance of a FacilityDefault, the right of the REIT Servicer to receive any monies hereunder shallbe suspended and such amounts shall be paid to UBS.  In all cases, the REIT Servicer’s right to receive any suchmonies shall be reduced by all amounts, if any, which at the time are payableby the REIT Servicer hereunder into the Deposit Account, the Escrow Account orto the REIT Sub-Trust or otherwise. 

 

Uponreceipt by the REIT Servicer of such written notice, all authority and power ofthe REIT Servicer under this Agreement, whether with respect to the MortgageLoans or otherwise, shall pass to and be vested in the successor appointedpursuant to Section 10.01.  Uponwritten request from UBS (which it may or, as appropriate, shall give asprovided above for such notice), the REIT Servicer shall prepare, execute anddeliver to the successor entity designated by UBS any and all documents andother instruments, place in such successor’s possession all SubmissionPackages, and do or cause to be done all other acts or things necessary orappropriate to effect the purposes of such notice of termination, including butnot limited to the transfer to such successor for administration by it of allcash amounts which shall at the time be credited by the REIT Servicer to theBlocked Account or Escrow Account or thereafter received with respect to theMortgage Loans.

 

## Section 8.02                                Waiverof Defaults.

##  

UBSmay waive any default by the REIT Servicer in the performance of itsobligations hereunder and its consequences. Upon any waiver of a past default, such default shall cease to exist,and any Event of Default arising therefrom shall be deemed to have beenremedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impairany right consequent thereon except to the extent expressly so waived. 

 

Nofailure to exercise and no delay in exercising, on the part of the REITSub-Trust or UBS, any right, remedy, power or privilege hereunder, shalloperate as a waiver thereof; nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder preclude any other or furtherexercise hereof or the exercise of any other right, remedy, power orprivilege.  The rights, remedies, powersand privileges herein provided are cumulative and not exhaustive of any rights,remedies, powers and privilege provided by law.

 

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# **ARTICLE IX**TERMINATION

# ** **

## Section 9.01                                Termination.

##  

ThisAgreement shall terminate upon the earliest to occur of (i) the StatedTermination Date; (ii) the later of the final payment or other liquidationof the last Mortgage Loan or the disposition of any REO Property with respectto the last Mortgage Loan and the remittance of all funds due hereunder; (iii)the termination of the REIT Servicer by UBS for cause pursuant toSection 8.01 or, upon one day’s notice from UBS, without cause; or (iv)mutual consent of the REIT Servicer, the REIT Sub-Trust and UBS in writing.

 

Notmore than 90 days nor fewer than 60 days prior to the then Stated TerminationDate, the REIT Servicer may send to UBS a written request, requesting that UBSextend the then Stated Termination Date to a date not more than one year fromthe then Stated Termination Date.  UBSshall respond, in writing, to any such request within 15 Business Days of UBS’sreceipt thereof; provided, that if UBS does not so respond, then the request toextend shall be deemed denied.

 

## Section 9.02                                Retentionand Termination of REIT Servicer.

##  

TheREIT Servicer hereby covenants and agrees to act as REIT Servicer for aninitial term beginning on the date of this Agreement and ending on the same dayof the month two (2) months thereafter, which term shall be extendable by UBSfor successive terms thereafter of thirty days each (or, as specified in awriting delivered by UBS to the REIT Servicer, such other term-to-term basis),until the termination of this Agreement. The REIT Servicer hereby agrees that, upon its receipt of any suchnotice (including each notice pursuant to standing instructions, which shall bedeemed delivered at thirty day intervals for so long as such instructions arein effect) (a “Servicer Extension Notice”), the REIT Servicer shallbecome bound, for the duration of the term covered by such Servicer ExtensionNotice, to continue as the REIT Servicer subject to and in accordance with theother provisions of this Agreement.  TheREIT Servicer agrees that if as of the tenth day prior to the last day of anyterm it shall not have received a Servicer Extension Notice from UBS, the REITServicer will, within five days thereafter, give written notice of suchnonreceipt to UBS.

 

# **ARTICLE X**SUCCESSORTO THE REIT SERVICER

# ** **

## Section 10.01                          Successorto Servicer.

##  

Theappointment hereunder of MortgageIT Holdings as the REIT Servicer hereundershall initially be for a term beginning on the date of this Agreement andending on the same day of the month two (2) months thereafter, which term shallbe extendable by UBS for successive terms thereafter of thirty days each (or,as specified in a writing delivered by UBS to the REIT Servicer, such otherterm-to-term basis), until the termination of this Agreement.  The term of appointment of any Person as asuccessor Servicer hereunder shall begin on the date the

 

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appointment is effectiveand shall end on the last day of the last term or, if earlier, on the StatedTermination Date, as then in effect.

 

Priorto termination of the REIT 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 REIT Servicer hereunder, UBS shall, (i) succeed to and assume all of theREIT 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 REIT Servicerunder this Agreement prior to the termination of Servicer’s responsibilities,duties and liabilities under this Agreement. In the event that the REIT Servicer’s duties, responsibilities andliabilities under this Agreement should be terminated pursuant to theaforementioned sections, the REIT 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.

 

Anysuccessor appointed as provided herein shall execute, acknowledge and deliverto the REIT Servicer and UBS an instrument accepting such appointment, wherein,if the successor and the predecessor Servicers are different Persons, thesuccessor shall agree to indemnify the predecessor Servicer for any liabilityarising out of the successor’s subsequent acts and omissions related to its dutiesas the successor servicer, whereupon such successor shall become fully vestedwith all the rights, powers, duties, responsibilities, obligations andliabilities of the REIT Servicer, with like effect as if originally named as aparty to this Agreement.  Likewise, ifthe REIT Servicer and the successor are different Persons, the REIT Servicershall agree to indemnify the successor Servicer for any liability arising outof the REIT Servicer’s acts and omissions relating to its acts as REIT Servicerprior to the effective date of the servicing transfer.  Any termination or resignation of the REITServicer or termination of this Agreement pursuant to Section 7.04, 8.01,or 9.01 or arising out of the lapse of a Servicer’s term of appointmenthereunder shall not affect any claims that UBS may have against the REITServicer arising out of the REIT Servicer’s actions or failure to act prior toany such termination or resignation.

 

TheREIT Servicer shall deliver promptly to the successor servicer (if it is a differentperson) all Submission Packages and related documents and statements held by ithereunder.  In all cases, at the end ofany term of its appointment hereunder, the REIT Servicer shall account for allfunds and shall execute and deliver such instruments and do such other thingsas UBS may reasonably request, at the REIT Servicer’s sole expense, to vest inany successor all such rights, powers, duties, responsibilities, obligationsand liabilities of the REIT Servicer.

 

TheREIT Servicer shall be liable for any and all fees and expenses required toterminate the Servicing Agreement and/or to effectuate the transfer of the REITServicer’s responsibilities, duties and liabilities to the successor Servicer.

 

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# **ARTICLE XI**MISCELLANEOUSPROVISIONS

# ** **

## Section 11.01                          Transfer of Servicing.  In the event the REIT Servicer is terminatedpursuant to this Agreement or its term as such hereunder lapses without itsbeing appointed for another, consecutive, term, the following shall beperformed:

 

### (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 theREIT Servicer shall cease all servicing responsibilities related to, theMortgage Loans.  On or prior to therelated Servicing Transfer Date the REIT 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 REIT 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 REIT Servicer shall provide theSuccessor Servicer with copies of all such notices no later than the relatedServicing Transfer Date.

####  

#### (ii)                                            Noticeto Taxing Authorities and Insurance Companies.  The REIT 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 REIT Servicer shallprovide the Successor Servicer with copies of all such notices no later thanthe related Servicing Transfer Date.

####  

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

####  

#### (iv)                                        EscrowPayments.  On the Servicing TransferDate, the REIT Servicer shall provide the Successor Servicer, with immediatelyavailable funds by wire transfer in the amount of the Escrow Accountbalance.  The REIT Servicer shallprovide the Successor Servicer with an accounting statement sufficient to enablethe Successor Servicer to reconcile the amount of such payment with theaccounts of the Mortgage Loans.

####  

#### (v)                                           Payoffsand Assumptions.  The REIT Servicershall provide to the Successor Servicer, copies of all assumption statementsgenerated by the REIT 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 REIT

 

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Servicer on each MortgageLoan shall be properly applied by the REIT Servicer to the account of theparticular Mortgagor.

####  

#### (vii)                                     MortgagePayments Received After Related Servicing Transfer Date.  The amount of any Monthly Payments receivedby the REIT 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 REIT Servicer shall notify the SuccessorServicer of the particulars of the payment, which notification requirementshall be satisfied if the REIT Servicer forwards with its payment sufficientinformation to permit appropriate processing of the payment by the SuccessorServicer.  In addition, the REITServicer shall endorse to the Successor Servicer the Monthly Payments receivedby the REIT Servicer after the Servicing Transfer Date.

####  

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

####  

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

#####  

##### (2)                        The partyreceiving 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)                        If aproven 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 REIT Servicer shall beliable for the amount of such shortage. The REIT 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 REIT 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 REIT Servicer and the Successor Servicer asappropriate.

####  

#### (x)                                             IRSForms.  The REIT 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 REIT Servicershall provide copies of such forms to UBS upon request and shall reimburse UBSfor any costs or penalties incurred by UBS due to the REIT Servicer’s failureto comply with this paragraph.  The REITServicer 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.

####  

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

 

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### (b)                                 Withintwo (2) Business Days after the REIT Servicer delivers to the REIT Sub-Trust aninvoice stating the amounts thereof, the REIT Sub-Trust shall, or shall causethe Successor Servicer to, reimburse the REIT Servicer for all ServicingAdvances not previously reimbursed and pay to the REIT Servicer any ServicingFees that were not previously retained by or paid to the REIT Servicer.  The REIT Servicer shall provide UBS with a copyof any such notice that it delivers to the REIT Sub-Trust at the time it givesuch notice.  The REIT Servicer shall beobligated to deliver the Servicing Files to UBS or Successor Servicer whetheror not all such Servicing Advances shall have been reimbursed and all suchServicing Fees shall have been paid, upon the termination of the appointment ofthe REIT Servicer in connection with an Event of Default pursuant toSection 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 REIT 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 REIT 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 REIT Sub-Trust shall, or shallcause the Successor Servicer to, reimburse the REIT Servicer for such payment.

###  

## Section 11.02                          Amendment.

##  

ThisAgreement may be amended from time to time by the REIT Servicer, the REITSub-Trust and UBS by written agreement signed by the REIT Servicer and UBS.

 

## Section 11.03                          GoverningLaw; Jurisdiction.

##  

ThisAgreement shall be governed by, and construed in accordance with, the laws ofthe State of New York without giving effect to the conflict of law principlesthereof, and the obligations, rights and remedies of the parties hereundershall be determined in accordance with such laws.  With respect to all legal proceedings arising out of or relatingto this Agreement or the transactions contemplated hereby, and any action orproceeding for recognition and enforcement of any judgment in respect thereof,each of the REIT Servicer, the REIT Sub-Trust and UBS irrevocably submits tothe non-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 such court has beenbrought in any inconvenient forum and further irrevocably waives the right toobject, with respect to such claim, suit, action or proceeding brought in anysuch court, that such court does not have jurisdiction over such party,provided that service of process is made by any lawful means.  Without limiting the foregoing, each such partyirrevocably agrees that service of process in any such action or proceeding maybe effected by mailing a copy thereof to it by registered or certified mail (orany substantially similar form of mail), postage prepaid, to its address setforth in or pursuant to this Agreement for notices.

 

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## Section 11.04                          Notices.

##  

Alldemands, notices and communications under or in connection with this Agreementshall be in writing and shall be deemed to have been duly given, made andreceived  (i) when deliveredagainst receipt of registered or certified mail or upon actual receipt ofregistered or certified mail, postage prepaid, return receipt requested;(ii) when delivered by courier with appropriate evidence of receipt; or(iii) upon transmission via facsimile with appropriate evidence ofreceipt, addressed as follows:

 

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

 

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

 

or such other addressas may hereafter be furnished to UBS and the REIT Sub-Trust in writing by theREIT Servicer;

 

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

####  

MortgageIT SPV I, actingwith respect to the REIT Sub-Trust

 

c/o 

 

MortgageIT Holdings,Inc., as Administrator forMortgageIT SPV I, acting with respect to the REIT Sub-Trust33 Maiden Lane, 6th FloorNew York, NY  10038Attention:  Michael A. Zigrossi and JohnR. CutiFax:  (212) 651-4674

 

with a copy to:

 

Wilmington Trust CompanyRodney Square North1100 N. Market StreetWilmington, DE   19890Attention:  Corporate TrustAdministration

 

or such otheraddress as may hereafter be furnished to UBS and the REIT Servicer in writingby the REIT Sub-Trust;

 

#### (iii)                                         ifto UBS:

####  

UBS Real EstateSecurities Inc.1285 Avenue of the Americas

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New York, New York 10019Attention:  Robert Carpenter

George A. Mangiaracina

 

Fax:  (212) 713-9607

 

or such otheraddress as may hereafter be furnished to the REIT Servicer and the REITSub-Trust in writing by UBS; and

 

## Section 11.05                          Severabilityof Provisions.

##  

If anyone or more of the covenants, agreements, provisions or terms of this Agreementshall be held invalid for any reason whatsoever, then such covenants,agreements, provisions or terms shall be deemed severable from the remainingcovenants, agreements, provisions or terms of this Agreement and shall in noway affect the validity or enforceability of the other provisions of thisAgreement.

 

## Section 11.06                          Relationshipof Parties.

##  

Nothingherein contained shall be deemed or construed to create a partnership or jointventure between the parties hereto and the services of the REIT Servicer shallbe rendered as an independent contractor and not as agent for the REITSub-Trust and UBS.

 

## Section 11.07                          Execution;Successors and Assigns.

##  

ThisAgreement may be executed in one or more counterparts and by the differentparties hereto on separate counterparts, each of which, when so executed, shallbe deemed to be an original; such counterparts, together, shall constitute oneand the same agreement.  This Agreementshall inure to the benefit of and be binding upon the REIT Servicer, the REITSub-Trust and UBS and their respective successors and assigns.  

 

## Section 11.08                          Recordationof Assignments of Mortgage.

##  

To theextent permitted by applicable law, each of the Assignments of Mortgage issubject to recordation in all appropriate public offices for real propertyrecords in all the counties or other comparable jurisdictions in which any orall of the Mortgaged Properties are situated, and in any other appropriatepublic recording office or elsewhere, such recordation is to be effected at theREIT Sub-Trust’s expense in the event recordation is either necessary underapplicable law or requested by UBS.

 

## Section 11.09                          Mergerand Integration.

##  

Exceptas specifically 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 thisAgreement.  This Agreement may not bemodified, amended, waived or supplemented except as provided herein.

 

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## Section 11.10                          Headings.

##  

Theheadings herein are for purposes of reference only and shall not otherwiseaffect the meaning or interpretation of any provision hereof.

 

## Section 11.11                          Schedules andExhibits.

##  

Theschedules and exhibits attached hereto and referred to herein shall constitutea part of this Agreement and are incorporated into this Agreement for allpurposes.

 

## Section 11.12                          NoBankruptcy Petition Against the REIT Sub-Trust.

##  

TheREIT Servicer agrees that, prior to the date that is one year and one day afterthe payment in full of the Notes, it will not institute against the REITSub-Trust, or join any other Person in instituting against UBS, any bankruptcy,reorganization, arrangement, insolvency or liquidation proceedings or otherproceedings under the laws of the United States or any state of the UnitedStates.  This Section 11.12 shallsurvive the termination of this Agreement.

 

## Section 11.13                          Rightto Inspect.  

##  

TheREIT Servicer agrees that UBS shall have the right to inspect its servicingfacilities for the purpose of satisfying UBS that the REIT Servicer has the abilityto service the Mortgage Loans as provided under this Agreement.

 

## Section 11.14                          NoRecourse.

##  

It isexpressly understood and agreed by the parties hereto that (a) this Agreementis executed and delivered by Wilmington Trust Company, not individually orpersonally but solely as trustee of the REIT Sub-Trust, in the exercise of thepowers and authority conferred and vested in it, (b) each of therepresentations, undertakings and agreements herein made on the part of theREIT Sub-Trust is made and intended not as personal representations,undertakings and agreements by Wilmington Trust Company but is made andintended for the purpose of binding only the REIT Sub-Trust, (c) nothing hereincontained shall be construed as creating any liability on Wilmington TrustCompany, individually or personally, to perform any covenant either expressedor implied contained herein, all such liability, if any, being expressly waivedby the parties hereto and by an Person claiming by, through or under theparties hereto and (d) under no circumstances shall Wilmington Trust Company bepersonally liable for the payment of any indebtedness or expenses of the REITSub-Trust or be liable for the breach or failure of any obligation,representation, warranty or covenant made or undertaken by the REIT Sub-Trustunder this Agreement or any other related documents.

 

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INWITNESS WHEREOF, the REIT Servicer, the REIT Sub-Trust and UBS have causedtheir names to be signed hereto by their respective officers thereunto dulyauthorized as of the day and year first above written.

 
|   | MORTGAGEIT SPV  I,                         |
|--------|--------------------------------------------|
|   | acting with  respect to the REIT 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  HOLDINGS, INC.,                |
|   | as REIT 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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