exv10w9



 





Exhibit 10.9




Execution Version




 





FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT




between




BANK OF AMERICA, NATIONAL ASSOCIATION,

as Seller and as Servicer,




and




RWT HOLDINGS, INC.,

as Purchaser




July 1, 2006




Residential Mortgage Loans




 





 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	SECTION 1. Definitions
	 	 	1	 
	SECTION 2. Purchase and Conveyance
	 	 	15	 
	SECTION 3. Mortgage Loan Schedule
	 	 	16	 
	SECTION 4. Purchase Price
	 	 	16	 
	SECTION 5. Examination of Mortgage Files
	 	 	16	 
	SECTION 6. Delivery of Mortgage Loan Documents
	 	 	17	 
	Subsection 6.01 Possession of Mortgage Files
	 	 	17	 
	Subsection 6.02 Books and Records
	 	 	17	 
	Subsection 6.03 Delivery of Mortgage Loan Documents
	 	 	18	 
	SECTION 7. Representations, Warranties and Covenants; Remedies for Breach
	 	 	18	 
	Subsection 7.01 Representations and Warranties Regarding Individual Mortgage Loans
	 	 	18	 
	Subsection 7.02 Seller and Servicer Representations
	 	 	29	 
	Subsection 7.03 Repurchase; Substitution
	 	 	31	 
	Subsection 7.04 Repurchase of Mortgage Loans With Early Payment Default
	 	 	32	 
	Subsection 7.05 Purchase Price Protection
	 	 	33	 
	SECTION 8. Closing
	 	 	33	 
	Subsection 8.01 Closing Conditions
	 	 	33	 
	Subsection 8.02 Closing Documents
	 	 	34	 
	SECTION 9. [Reserved.]
	 	 	34	 
	SECTION 10. Costs
	 	 	34	 
	SECTION 11. Administration and Servicing of Mortgage Loans
	 	 	34	 
	Subsection 11.01 Servicer to Act as Servicer; Subservicing
	 	 	34	 
	Subsection 11.02 Liquidation of Mortgage Loans
	 	 	37	 
	Subsection 11.03 Collection of Mortgage Loan Payments
	 	 	37	 
	Subsection 11.04 Establishment of Custodial Account; Deposits in Custodial Account
	 	 	37	 
	Subsection 11.05 Withdrawals From the Custodial Account
	 	 	39	 
	Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow Account
	 	 	40	 
	Subsection 11.07 Withdrawals From Escrow Account
	 	 	41	 
	Subsection 11.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder
	 	 	41	 
	Subsection 11.09 Transfer of Accounts
	 	 	42	 
	Subsection 11.10 Maintenance of Hazard Insurance
	 	 	42	 
	Subsection 11.11 Maintenance of Primary Mortgage Insurance Policy; Claims
	 	 	43	 
	Subsection 11.12 Fidelity Bond; Errors and Omissions Insurance
	 	 	43	 
	Subsection 11.13 Title, Management and Disposition of REO Property
	 	 	44	 
	Subsection 11.14 Servicing Compensation
	 	 	45	 
	Subsection 11.15 Distributions
	 	 	45	 
	Subsection 11.16 Statements to the Purchaser
	 	 	45	 
	Subsection 11.17 Advances by the Servicer
	 	 	46	 
	Subsection 11.18 Assumption Agreements
	 	 	47	 
	Subsection 11.19 Satisfaction of Mortgages and Release of Mortgage Files
	 	 	47	 
	Subsection 11.20 Servicer Shall Provide Access and Information as Reasonably Required
	 	 	48	 
	Subsection 11.21 Inspections
	 	 	48	 
	Subsection 11.22 Restoration of Mortgaged Property
	 	 	48	 
	Subsection 11.23 Fair Credit Reporting Act
	 	 	49	 






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	 	 	Page	 
	SECTION 12. The Servicer
	 	 	49	 
	Subsection 12.01 Indemnification; Third Party Claims
	 	 	49	 
	Subsection 12.02 Merger or Consolidation of the Servicer
	 	 	49	 
	Subsection 12.03 Limitation on Liability of the Servicer and Others
	 	 	50	 
	Subsection 12.04 Seller and Servicer Not to Resign
	 	 	50	 
	Subsection 12.05 Liability for Failure to Deliver Servicing Files
	 	 	50	 
	SECTION 13. Default
	 	 	50	 
	Subsection 13.01 Events of Default
	 	 	50	 
	Subsection 13.02 Waiver of Default
	 	 	52	 
	SECTION 14. Termination
	 	 	52	 
	Subsection 14.01 Termination
	 	 	52	 
	Subsection 14.02 Successors to the Servicer
	 	 	52	 
	SECTION 15. Notices
	 	 	53	 
	SECTION 16. Severability Clause
	 	 	54	 
	SECTION 17. No Partnership
	 	 	54	 
	SECTION 18. Counterparts
	 	 	54	 
	SECTION 19. Governing Law
	 	 	55	 
	SECTION 20. Intention of the Parties
	 	 	55	 
	SECTION 21. Waivers
	 	 	55	 
	SECTION 22. Exhibits
	 	 	55	 
	SECTION 23. General Interpretive Principles
	 	 	55	 
	SECTION 24. Reproduction of Documents
	 	 	56	 
	SECTION 25. Amendment
	 	 	56	 
	SECTION 26. Confidentiality
	 	 	56	 
	SECTION 27. Entire Agreement
	 	 	57	 
	SECTION 28. Further Agreements
	 	 	57	 
	SECTION 29. Successors and Assigns
	 	 	57	 
	SECTION 30. Non-Solicitation
	 	 	58	 
	SECTION 31. Protection of Consumer Information
	 	 	59	 
	SECTION 32. Cooperation of the Company with a Reconstitution; Regulation AB Compliance
	 	 	59	 






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EXHIBITS




	 	 	 
	EXHIBIT 1

	 	MORTGAGE LOAN DOCUMENTS
	 
	 	 
	EXHIBIT 2

	 	CONTENTS OF EACH MORTGAGE FILE
	 
	 	 
	EXHIBIT 3

	 	UNDERWRITING GUIDELINES
	 
	 	 
	EXHIBIT 4

	 	[RESERVED]
	 
	 	 
	EXHIBIT 5

	 	FORM OF MONTHLY REMITTANCE REPORT
	 
	 	 
	EXHIBIT 6

	 	FORM OF TERM SHEET
	 
	 	 
	ADDENDUM I

	 	REGULATION AB COMPLIANCE ADDENDUM






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FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT




     THIS FLOW MORTGAGE LOAN SALE AND SERVICING AGREEMENT (the “Agreement”), dated July 1,
2006, is hereby executed by and between RWT HOLDINGS, INC., a Delaware corporation, as purchaser
(the “Purchaser”), and BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking
association, as seller (the “Seller”) and as servicer (the “Servicer”).



WITNESSETH:




     WHEREAS, the Seller has agreed to sell from time to time to the Purchaser, and the Purchaser
has agreed to purchase from time to time from the Seller, certain conventional, residential,
first-lien mortgage loans (the “Mortgage Loans”) as described herein on a
servicing-retained basis, and which shall be delivered as whole loans as provided herein; and



     WHEREAS, the Mortgage Loans will be sold by the Seller and purchased by the Purchaser as pools
or groups of whole loans, servicing retained (each, a “Mortgage Loan Package”) on the
various Closing Dates as provided herein; and



     WHEREAS, each of the Mortgage Loans will be secured by a mortgage, deed of trust or other
security instrument creating a first lien on a residential dwelling located in the jurisdiction
indicated on the related Mortgage Loan Schedule which will be annexed to a Term Sheet (as defined
herein) on the related Closing Date; and



     WHEREAS, the Purchaser, the Seller and the Servicer wish to prescribe the manner of the
conveyance, servicing and control of the Mortgage Loans;



     NOW, THEREFORE, in consideration of the premises and mutual agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Purchaser, the Seller and the Servicer agree as follows:



     SECTION 1. Definitions.



     For purposes of this Agreement, the following capitalized terms shall have the respective
meanings set forth below.



     Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to this Agreement
which provides for the adjustment of the Mortgage Interest Rate payable in respect thereto.



     Adjustment Date: As to each Adjustable Rate Mortgage Loan, the date on which the
Mortgage Interest Rate is adjusted in accordance with the terms of the related Mortgage Note and
Mortgage.



     Agency Transfer: As defined in Section 32 of this Agreement.



     Agreement: This Flow Mortgage Loan Sale and Servicing Agreement including all
exhibits, schedules, amendments and supplements hereto.



 









 





     ALTA: The American Land Title Association or any successor thereto.



     Appraised Value: With respect to any Mortgaged Property, the lesser of (i) the value
thereof as determined by a Qualified Appraiser at the time of origination of the Mortgage Loan, and
(ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds
of the Mortgage Loan; provided, however, that in the case of a Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the value determined by an appraisal made for the
originator of such Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by a Qualified Appraiser.



     Assignment of Mortgage: An individual assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction in which
the related Mortgaged Property is located to give record notice of the sale of the Mortgage to the
Purchaser.



     Assumed Principal Balance: As to each Mortgage Loan as of any date of determination,
(i) the principal balance of the Mortgage Loan outstanding as of the Cut-off Date after application
of payments due on or before the Cut-off Date, whether or not received, minus (ii) all amounts
previously distributed to the Purchaser with respect to the Mortgage Loan pursuant to Subsection
11.15 and representing (a) payments or other recoveries of principal or (b) advances of scheduled
principal payments made pursuant to Subsection 11.17.



     Balloon Mortgage Loan: A Mortgage Loan that provided on the date of origination for
monthly payments up to but not including the maturity date based on an amortization extending
beyond its maturity date.



     Balloon Payment: With respect to any Balloon Mortgage Loan as of any date of
determination, the final payment payable on the maturity of such Mortgage Loan, which shall include
the entire remaining principal balance.



     Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a legal holiday
in the State of New York or the State of California, or (iii) a day on which banks in the State of
New York or the State of California are authorized or obligated by law or executive order to be
closed.



     Closing Date: The date or dates, set forth in the related Term Sheet, on which the
Purchaser will purchase and the Seller will sell the Mortgage Loans identified therein.



     CLTA: The California Land Title Association or any other successor thereto.



     Code: The Internal Revenue Code of 1986, as amended, or any successor statute
thereto.



     Commission: The United States Securities and Exchange Commission.



     Condemnation Proceeds: All awards, compensation and settlements in respect of a
taking (whether permanent or temporary) of all or part of a Mortgaged Property by exercise of
the power of condemnation or the right of eminent domain, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.



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     Consumer Information: Any personally identifiable information in any form (written
electronic or otherwise) relating to a Mortgagor, including, but not limited to: a Mortgagor’s
name, address, telephone number, Mortgage Loan number, Mortgage Loan payment history, delinquency
status, insurance carrier or payment information, tax amount or payment information; the fact that
the Mortgagor has a relationship with the Company or the originator of the related Mortgage Loan;
and any other non-public personally identifiable information.



     Convertible Mortgage Loan: An Adjustable Rate Mortgage Loan that by its terms and
subject to certain conditions allows the Mortgagor to convert the adjustable Mortgage Interest Rate
thereon to a fixed Mortgage Interest Rate.



     Cooperative Corporation: With respect to any Cooperative Loan, the cooperative
apartment corporation that holds legal title to the related Cooperative Project and grants
occupancy rights to units therein to stockholders through Cooperative Leases or similar
arrangements.



     Cooperative Lease: The lease on a Cooperative Unit evidencing the possessory interest
of the owner of the Cooperative Shares in such Cooperative Unit.



     Cooperative Loan: A Mortgage Loan that is secured by a first lien on and perfected
security interest in Cooperative Shares and the related Cooperative Lease granting exclusive rights
to occupy the related Cooperative Unit in the building owned by the related Cooperative
Corporation.



     Cooperative Project: With respect to any Cooperative Loan, all real property and
improvements thereto and rights therein and thereto owned by a Cooperative Corporation including
without limitation the land, separate dwelling units and all common elements.



     Cooperative Shares: With respect to any Cooperative Loan, the shares of stock issued
by a Cooperative Corporation and allocated to a Cooperative Unit and represented by a stock
certificate.



     Cooperative Unit: With respect to a Cooperative Loan, a specific unit in a
Cooperative Project.



     Credit Score: The credit score for each Mortgage Loan shall be the minimum of two
credit bureau scores obtained at origination or such other time by the Seller. If two credit
bureau scores are obtained, the Credit Score will be the lower score. If three credit bureau
scores are obtained, the Credit Score will be the middle of the three. When there is more than one
applicant, the lowest of the applicants’ Credit Scores will be used. There is only one (1) score
for any loan regardless of the number of borrowers and/or applicants. The minimum Credit Score for
each Mortgage Loan will be in accordance with the Seller’s Underwriting Standards (as defined
below).



     Custodial Account: As defined in Subsection 11.04.



     Customary Servicing Procedures: With respect to any Mortgage Loan, those mortgage
servicing practices (including collection procedures) of prudent
mortgage banking  institutions



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which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, and which are in accordance with Fannie Mae servicing
practices and procedures, for MBS pool mortgages, as defined in the Fannie Mae Guides including
future updates.



     Cut-off Date: With respect to each Mortgage Loan, the first day of the month of the
related Closing Date as set forth in the related Term Sheet.



     Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a Substitute
Mortgage Loan in accordance with this Agreement.



     Determination Date: With respect to each Remittance Date, the 15th day (or, if such
15th day is not a Business Day, the following Business Day) of the month in which such Remittance
Date occurs.



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



     Due Period: With respect to each Remittance Date, the period beginning on the second
day of the month preceding the month of the Remittance Date, and ending on the first day of the
month of the Remittance Date.



     Eligible Investments: Any one or more of the following obligations or securities:




     (i) direct obligations of, and obligations fully guaranteed by the United States of
America or any agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America;




     (ii) (a) demand or time deposits, federal funds or bankers’ acceptances issued by any
depository institution or trust company incorporated under the laws of the United States of
America or any state thereof and subject to supervision and examination by federal and/or
state banking authorities, provided that the commercial paper and/or the short-term deposit
rating and/or the long-term unsecured debt obligations or deposits of such depository
institution or trust company at the time of such investment or contractual commitment
providing for such investment are rated in one of the two highest rating categories by each
Rating Agency and (b) any other demand or time deposit or certificate of deposit that is
fully insured by the FDIC;




     (iii) repurchase obligations with a term not to exceed thirty (30) days and with
respect to (a) any security described in clause (i) above and entered into with a
depository institution or trust company (acting as principal) described in clause (ii)(a)
above;




     (iv) securities bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state thereof that are
rated in one of the two highest rating categories by each Rating Agency at the time of such
investment or contractual commitment providing for such investment; provided, however, that
securities issued by any particular corporation will not be Eligible Investments to the



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extent that investments therein will cause the then outstanding principal amount of
securities issued by such corporation and held as Eligible Investments to exceed 10% of the
aggregate outstanding principal balances of all of the Mortgage Loans and Eligible
Investments;




     (v) commercial paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more than one year
after the date of issuance thereof) which are rated in one of the two highest rating
categories by each Rating Agency at the time of such investment;




     (vi) any other demand, money market or time deposit, obligation, security or investment
as may be acceptable to each Rating Agency as evidenced in writing by each Rating Agency;
and




     (vii) any money market funds the collateral of which consists of obligations fully
guaranteed by the United States of America or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and credit of the
United States of America (which may include repurchase obligations secured by collateral
described in clause (i)) and other securities and which money market funds are rated in one
of the two highest rating categories by each Rating Agency.



     provided,
however, that no instrument or security shall be an Eligible Investment if such
instrument or security evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or if such security provides for payment of both principal
and interest with a yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.



     Escrow Account: As defined in Subsection 11.06.



     Escrow Payments: The amounts constituting ground rents, taxes, assessments, Primary
Mortgage Insurance Policy premiums, fire and hazard insurance premiums, flood insurance premiums,
condominium charges and other payments as may be required to be escrowed by the Mortgagor with the
Mortgagee pursuant to the terms of any Mortgage Note or Mortgage.



     Event of Default: Any one of the conditions or circumstances enumerated in Subsection
13.01.



     Fannie Mae: The entity formerly known as the Federal National Mortgage Association or
any successor thereto.



     Fannie Mae Guides: The Fannie Mae Sellers’ Guide and the Fannie Mae Servicers’ Guide
and all amendments or additions thereto in effect on and after the related Closing Date.



     FDIC: The Federal Deposit Insurance Corporation or any successor thereto.



     Fidelity Bond: The fidelity bond required to be obtained by the Servicer pursuant to
Subsection 11.12.



5









 





     FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended and in effect from time to time.



     First Remittance Date: With respect to each Mortgage Loan Package, the 18th day (or
if such 18th day is not a Business Day, the first Business Day immediately preceding such
18th day) of the calendar month immediately following the Closing Date; provided,
however, if the Transfer Date is not one (1) or more Business Days prior to the first day of such
calendar month, such date will be the 18th day (or if such 18th day is not a Business Day, the
first Business Day immediately preceding such 18th day) of the next succeeding calendar
month.



     Freddie Mac: The entity formerly known as the Federal Home Loan Mortgage Corporation
or any successor thereto.



     Freddie Mac Guide: The Freddie Mac Single Family Seller/Servicer Guide and all
amendments or additions thereto in effect on and after the related Closing Date.



     Full Prepayment: Any payment of the entire principal balance of a Mortgage Loan which
is received in advance of its scheduled Due Date and is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months subsequent to the
month of prepayment.



     GAAP: Generally accepted accounting principles consistently applied.



     Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the fixed percentage
amount set forth in the related Mortgage Note and the Mortgage Loan Schedule that is added to the
Index on each Adjustment Date in accordance with the terms of the related Mortgage Note to
determine the new Mortgage Interest Rate for such Mortgage Loan.



     HUD: The United States Department of Housing and Urban Development or any successor
thereto.



     Index: With respect to any Adjustable Rate Mortgage Loan, the index identified on the
Mortgage Loan Schedule and set forth in the related Mortgage Note for the purpose of calculating
the Mortgage Interest Rate thereon.



     Initial Rate Cap: With respect to each Adjustable Rate Mortgage Loan and the initial
Adjustment Date therefor, a number of percentage points per annum that is set forth in the Mortgage
Loan Schedule and in the related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Adjustable Rate Mortgage Loan may increase or decrease from the Mortgage
Interest Rate in effect immediately prior to such Adjustment Date.



     Insurance Proceeds: With respect to each Mortgage Loan, proceeds of insurance
policies insuring the Mortgage Loan or the related Mortgaged Property.



     IO Adjustable Rate Mortgage Loan: An Adjustable Rate Mortgage Loan with respect to
which accrued interest only is payable by a Mortgagor on each Due Date until the IO Conversion
Date.



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     IO Conversion Date: With respect to an IO Adjustable Rate Mortgage Loan, the date
that references the end of the “interest only period” applicable thereto.



     Lifetime Rate Cap: As to each Adjustable Rate Mortgage Loan, the maximum Mortgage
Interest Rate which shall be as permitted in accordance with the provisions of the related Mortgage
Note.



     Liquidation Proceeds: The proceeds received in connection with the liquidation of a
defaulted Mortgage Loan through trustee’s sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of REO Property, Insurance Proceeds and Condemnation Proceeds.



     Loan-to-Value Ratio: With respect to any Mortgage Loan as of any date of
determination, the ratio, expressed as a percentage, on such date of the outstanding principal
balance of the Mortgage Loan, to the Appraised Value of the related Mortgaged Property.



     LTV: Loan-to-Value Ratio.



     Master Servicer: With respect to any Securitization Transaction, the “master
servicer,” if any, identified in the related transaction documents.



     MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor thereto.



     MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS System.



     MERS System: The system of recording transfers of mortgages electronically maintained
by MERS.



     MIN: The Mortgage Identification Number for any MERS Mortgage Loan.



     Minimum Interest Rate: With respect to each Adjustable Rate Mortgage Loan, a rate
that is set forth on the Mortgage Loan Schedule and in the related Mortgage Note and is the minimum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be decreased.



     Monthly Payment: The scheduled monthly payment on a Mortgage Loan due on any Due Date
allocable to principal and/or interest on such Mortgage Loan pursuant to the terms of the related
Mortgage Note.



     Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage Note
which creates a first lien on an unsubordinated estate in fee simple in real property securing the
Mortgage Note; except that with respect to real property located in jurisdictions in which the use
of leasehold estates for residential properties is a widely-accepted practice, the mortgage, deed
of trust or other instrument securing the Mortgage Note may secure and create a first lien upon a
leasehold estate of the Mortgagor.



7









 





     Mortgage File: With respect to each Mortgage Loan, the documents pertaining thereto
specified in Exhibit 2 to be provided and any additional documents required to be added to
the Mortgage File pursuant to this Agreement.



     Mortgage Interest Rate: With respect to each Mortgage Loan, the annual rate at which
interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the
related Mortgage Note, including, but not limited to, the limitations on such interest rate imposed
by the Initial Rate Cap, the Periodic Rate Cap, the Minimum Interest Rate and the Lifetime Rate
Cap, if any.



     Mortgage Loan: An individual Mortgage Loan which is the subject of this Agreement,
each Mortgage Loan originally sold and subject to this Agreement being identified on the related
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the Mortgage File, the
Servicing File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds, any escrow accounts related to the Mortgage
Loan and all other rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan, excluding replaced or repurchased mortgage loans.



     Mortgage Loan Documents: With respect to any Mortgage Loan, the documents listed in
Exhibit 1 hereto.



     Mortgage Loan Package: The pool or group of whole loans purchased on a Closing Date,
as described in the Mortgage Loan Schedule annexed to the related Term Sheet.



     Mortgage Loan Remittance Rate: With respect to any Mortgage Loan, the annual rate of
interest payable to the Purchaser, which shall be equal to the related Mortgage Interest Rate minus
the related Servicing Fee Rate.



     Mortgage Loan Schedule: The schedule of Mortgage Loans prepared for each Closing
Date, such schedule setting forth the following information with respect to each Mortgage Loan:



          (1) the Company’s Mortgage Loan identifying number;




          (2) the Mortgagor’s name;




          (3) the street address of the Mortgaged Property including the city, state and zip code;




          (4) a code indicating whether the Mortgaged Property is owner-occupied, a second home or an
investor property;




          (5) the type of residential property constituting the Mortgaged Property;




          (6) the original months to maturity or the remaining months to maturity from the Cut-off Date,
in any case based on the original amortization schedule and, if different, the maturity expressed
in the same manner but based on the actual amortization schedule;




          (7) the Appraised Value (including the purchase price of the Mortgaged Property, if
applicable) and Loan-to-Value Ratio at origination;




8









 








          (8) the Mortgage Interest Rate at origination and as of the Cut-off Date;




          (9) the Mortgage Loan origination date;




          (10) the actual interest paid through date;




          (11) the scheduled interest paid through date;




          (12) the stated maturity date of the Mortgage Loan;




          (13) the amount of the Monthly Payment at origination and as of the Cut-off Date;




          (14) the original principal amount of the Mortgage Loan;




          (15) the Stated Principal Balance of the Mortgage Loan as of the Cut-off Date;




          (16) a code indicating the purpose of the Mortgage Loan (i.e., purchase, rate and term
refinance, equity take-out refinance);




          (17) a code indicating the documentation style (i.e. full, alternative or reduced);




          (18) the number of times during the twelve (12) month period preceding the Closing Date that
any Monthly Payment has been received thirty (30) or more days after its Due Date;




          (19) the date on which the first Monthly Payment is due subsequent to the origination date;




          (20) a code indicating whether or not the Mortgage Loan is insured as to payment defaults by a
Primary Mortgage Insurance Policy; and, in the case of any Mortgage Loan which is insured as to
payment defaults by a Primary Mortgage Insurance Policy, the name of the provider of such Primary
Mortgage Insurance Policy;




          (21) a code indicating whether or not the Mortgage Loan is the subject of a Prepayment Penalty
as well as the terms of the Prepayment Penalty;




          (22) the Primary Mortgage Insurance Policy Certificate Number, if applicable;




          (23) the Primary Mortgage Insurance Policy Coverage Percentage, if applicable;




          (24) a code indicating the Credit Score of the Mortgagor at the time of origination of the
Mortgage Loan;




          (25) a code indicating the credit grade and specific loan/underwriting program of each
Mortgage Loan as assigned by the Company pursuant to the Underwriting Standards;





9









 








          (26) with respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date and the
Adjustment Date frequency;




          (27) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;




          (28) with respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the terms
of the Mortgage Note;




          (29) with respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Interest Rate
under the terms of the Mortgage Note;




          (30) with respect to each Adjustable Rate Mortgage Loan, the Initial Rate Cap and Periodic
Rate Cap;




          (31) with respect to each Adjustable Rate Mortgage Loan, the first Adjustment Date immediately
following origination and the Cut-off Date;




          (32) with respect to each Adjustable Rate Mortgage Loan, the Index;




          (33) with respect to each Adjustable Rate Mortgage Loan, a code indicating whether the
Mortgage Loan is a Convertible Mortgage Loan;




          (34) the loan type (i.e. fixed, adjustable; 2/28, 3/27, 5/25, etc.);




          (35) a code indicating whether the Mortgage Loan is a MERS Mortgage Loan and, if so, the
corresponding MIN;




          (36) a code indicating if the Mortgage Loan is subject to a transferable life-of-loan real
estate tax service contract; and




          (37) a code indicating if the Mortgage Loan is subject to a fully transferable life-of-loan
flood certification and contract with First American Flood Data Services.




     With respect to the Mortgage Loans in the aggregate being acquired on a Closing Date, the
Mortgage Loan Schedule shall set forth the following information, as of the Cut-off Date unless
otherwise specified:



          (1) the number of Mortgage Loans;




          (2) the current aggregate outstanding principal balance of the Mortgage Loans;




          (3) the weighted average Mortgage Interest Rate of the Mortgage Loans;




          (4) the weighted average original months to maturity of the Mortgage Loans and the weighted
average remaining months to maturity of the Mortgage Loans.





10









 








     Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor secured
by a Mortgage or, in the case of a Cooperative Loan, secured by the Cooperative Shares and the
Cooperative Lease.



     Mortgaged Property: The Mortgagor’s real property securing repayment of a related
Mortgage Note, consisting of a fee simple interest in a single parcel of real property improved by
a Residential Dwelling.



     Mortgagee: The mortgagee or beneficiary named in the Mortgage and the successors and
assigns of such mortgagee or beneficiary.



     Mortgagor: The obligor on a Mortgage Note, who is an owner of the Mortgaged Property
and the grantor or mortgagor named in the Mortgage and such grantor’s or mortgagor’s successors in
title to the Mortgaged Property.



     NAIC: The National Association of Insurance Commissioners or any successor
organization.



     Officer’s Certificate: A certificate signed by the Chairman of the Board, the Vice
Chairman of the Board, a President or a Vice President of the Person on behalf of whom such
certificate is being delivered.



     Opinion of Counsel: A written opinion of counsel, who may be salaried counsel for the
Person on behalf of whom the opinion is being given, reasonably acceptable to each Person to whom
such opinion is addressed.



     OTS: The Office of Thrift Supervision or any successor.



     P&I Advance: As defined in Subsection 11.17.



     Partial Prepayment: Any payment of principal on a Mortgage Loan, other than a Full
Prepayment, which is received in advance of its scheduled Due Date and is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.



     Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan, the maximum increase or
decrease in the Mortgage Interest Rate, on any Adjustment Date as provided in the related Mortgage
Note, if applicable.



     Person: An individual, corporation, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated organization or government or
any agency or political subdivision thereof.



     Pledge Agreement: The specific agreement creating a first lien on and pledge of the
Cooperative Shares and the related Cooperative Lease securing a Cooperative Loan.



     Prepayment Penalty: With respect to each Mortgage Loan, the penalty if the Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note or Mortgage.



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     Prepayment Interest Shortfall: As to any Remittance Date and any Mortgage Loan, (a)
if such Mortgage Loan was the subject of a Full Prepayment during the related Principal Prepayment
Period, the excess of one month’s interest (adjusted to the Mortgage Loan Remittance Rate) on the
Assumed Principal Balance of such Mortgage Loan outstanding immediately prior to such prepayment,
over the amount of interest (adjusted to the Mortgage Loan Remittance Rate) actually paid by the
Mortgagor in respect of such Principal Prepayment Period, and (b) if such Mortgage Loan was the
subject of a Partial Prepayment during the related Principal Prepayment Period, an amount equal to
the excess of one month’s interest at the Mortgage Loan Remittance Rate on the amount of such
Partial Prepayment, over the amount of interest actually paid by the Mortgagor in respect of such
Partial Prepayment during such Principal Prepayment Period.



     Primary Mortgage Insurance Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer.



     Principal Prepayment: Any full or partial payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including any Prepayment
Penalty or premium thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent to the month of
prepayment.



     Principal Prepayment Period: As to any Remittance Date, the calendar month preceding
the calendar month in which such Remittance Date occurs.



     Purchase Price: The price paid on the related Closing Date by the Purchaser to the
Seller pursuant to this Agreement in exchange for the Mortgage Loans included in the related
Mortgage Loan Package, as calculated pursuant to Section 4 and the related Term Sheet.



     Purchase Price Percentage: For each Mortgage Loan included in a Mortgage Loan
Package, the percentage of par set forth in the related Term Sheet that is used to calculate the
Purchase Price of the Mortgage Loans included in such Mortgage Loan Package.



     Purchaser: The Person listed as such in the initial paragraph of this Agreement,
together with its successors and assigns as permitted under the terms of this Agreement.



     Qualified Appraiser: With respect to each Mortgage Loan, an appraiser, duly appointed
by the originator, who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both
satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of FIRREA and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.



     Qualified Insurer: An insurance company duly qualified as such under the laws of the
states in which the Mortgaged Properties are located, duly authorized and licensed in such states
to transact the applicable insurance business and to write the insurance provided by the insurance
policy issued by it, approved as an insurer by Fannie Mae and Freddie Mac.



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     Rating Agencies: Standard & Poor’s Ratings Services, a division of The McGraw- Hill
Companies, Inc., Moody’s Investors Service, Inc., Fitch, Inc. or, in the event that some or all
ownership of the Mortgage Loans is evidenced by mortgage-backed securities, the nationally
recognized rating agencies issuing ratings with respect to such securities, if any.



     Reconstitution Agreement: The agreement or agreements entered into by the Seller and
the Purchaser and certain third parties on the Reconstitution Date or Reconstitution Dates with
respect to any or all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer or a Securitization Transaction as provided in Subsection 32.01.



     Reconstitution Date: The date or dates on which any or all of the Mortgage Loans
serviced under this Agreement shall be removed from this Agreement and reconstituted as part of a
Whole Loan Transfer or Securitization Transaction pursuant to Section 32 hereof. On such date, the
Mortgage Loans transferred shall cease to be covered by this Agreement and the Seller shall cease
to service such Mortgage Loans under this Agreement.



     Record Date: The close of business of the last Business Day of the month preceding
the month of the related Remittance Date.



     Regulation AB: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification
and interpretation as have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff from time to time.



     Regulation AB Compliance Addendum: Addendum I attached hereto and
incorporated herein by reference thereto.



     Refinanced Mortgage Loan: A Mortgage Loan which was made to a Mortgagor who owned the
Mortgaged Property prior to the origination of such Mortgage Loan and the proceeds of which were
used in whole or part to satisfy an existing mortgage.



     REMIC: A “real estate mortgage investment conduit” within the meaning of Section 860D
of the Code.



     Remittance Date: The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately preceding such 18th day) of any month, beginning with the First
Remittance Date with respect to each Mortgage Loan Package.



     REO Disposition: The final sale by the Servicer or the Purchaser of an REO Property.



     REO Disposition Proceeds: All amounts received with respect to an REO Disposition
pursuant to Subsection 11.13.



     REO Property: A Mortgaged Property acquired by the Servicer through foreclosure or
deed in lieu of foreclosure, as described in Subsection 11.13.



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     Repurchase Price: With respect to any Mortgage Loan, a price equal to (i) the product
of the Purchase Price Percentage and the Stated Principal Balance of the Mortgage Loan, plus, (ii)
interest on such outstanding principal balance at the related Mortgage Loan Remittance Rate from
the last date through which interest was last paid and distributed to the Purchaser to the last day
of the month in which such repurchase occurs, plus, (iii) reasonable and customary third party
expenses incurred in connection with the transfer of the Mortgage Loan being repurchased; provided,
however, that if at the time of repurchase the Servicer is not the Seller or an affiliate of the
Seller, the amount described in clause (ii) shall be computed at the sum of (i) the Mortgage Loan
Remittance Rate and (ii) the Servicing Fee Rate.



     Residential Dwelling: Any one of the following: (i) a detached one-family dwelling,
(ii) a detached two- to four-family dwelling, (iii) a one-family dwelling unit in a condominium
project or (iv) a one-family dwelling in a planned unit development, none of which is a
cooperative, mobile or manufactured home.



     Securities Act: The Securities Act of 1933, as amended.



     Securitization Transaction: Any transaction involving either (1) a sale or other
transfer of some or all of the Mortgage Loans directly or indirectly by the Purchaser to an issuing
entity in connection with an issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately placed, rated or
unrated securities, the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of some or all of the
Mortgage Loans.



     Seller: Bank of America, National Association, a national banking association, or its
successor in interest or any successor to the Seller under this Agreement appointed as herein
provided.



     Servicer: Bank of America, National Association, a national banking association, or
its successor in interest or any successor to the Servicer under this Agreement appointed as herein
provided.



     Servicing Advances: All customary, reasonable and necessary out-of-pocket costs and
expenses incurred in the performance by the Servicer of its servicing obligations, including, but
not limited to, the cost of (a) the preservation, restoration and protection of the Mortgaged
Property, (b) any enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in satisfaction of
the Mortgage, and (d) payments made by the Servicer with respect to a Mortgaged Property pursuant
to Subsection 11.08.



     Servicing Fee: With respect to each Mortgage Loan, the amount of the annual fee the
Purchaser shall pay to the Servicer, which shall, for each month, be equal to one-twelfth of the
product of the applicable Servicing Fee Rate and the Stated Principal Balance of such Mortgage
Loan. Such fee shall be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is computed. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and payable solely from, the



14









 







interest portion (including recoveries with respect to interest from Liquidation Proceeds and other
proceeds, to the extent permitted by Subsection 11.05) of related Monthly Payments collected by the
Servicer, or as otherwise provided under Subsection 11.05.



     Servicing Fee Rate: With respect to each Mortgage Loan, the per annum rate set forth
on the related Mortgage Loan Schedule or if not specified thereon, in the related Term Sheet.



     Servicing File: With respect to each Mortgage Loan, the documents pertaining thereto
specified in Exhibit 2 and copies of all documents for such Mortgage Loan specified in
Exhibit 1.



     Servicing Officer: Any officer of the Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished to the Purchaser by the Servicer, as such list may be amended from time to time.



     Stated Principal Balance: As to each Mortgage Loan as to any date of determination,
(i) the principal balance of the Mortgage Loan as of the first day of the month for which such
calculation is being made after giving effect to the principal portion of any Monthly Payments due
on or before such date, whether or not received, as well as any Principal Prepayments received
before such date, minus (ii) all amounts previously distributed to the Purchaser with respect to
the Mortgage Loan representing payments or recoveries of principal, or advances in lieu thereof.



     Substitute Mortgage Loan: A mortgage loan substituted by the Seller for a Deleted
Mortgage Loan which must, on the date of such substitution, be approved by the Purchaser and meet
the conditions described in Section 7.03(b) of this Agreement.



     Term Sheet: With respect to each Mortgage Loan and Mortgage Loan Package, the Term
Sheet, substantially in the form of Exhibit 6 attached hereto, confirming the sale by
Seller and the purchase by the Purchaser of the Mortgage Loan Package on the related Closing Date.



     Transfer Date: The date or dates, set forth in the related Term Sheet, on which the
servicing related provisions of this Agreement will become effective and the Servicer will begin
servicing the Mortgage Loans for the benefit of the Purchaser.



     Underwriting Guidelines: As to each Mortgage Loan Package, the written underwriting
guidelines in effect as of the origination date of such Mortgage Loans, attached hereto as
Exhibit 3, as may be updated and incorporated into Exhibit 3 from time to time by
attaching such updates to the Term Sheet.



     Whole Loan Transfer: Any sale or transfer by the Purchaser of some or all of the
Mortgage Loans (including an Agency Transfer), other than a Securitization Transaction.



     SECTION 2. Purchase and Conveyance.



     The Seller, in exchange for the payment of the applicable Purchase Price by the Purchaser on
the related Closing Date, receipt of which is hereby acknowledged, hereby sells,



15









 







transfers,
assigns, sets over and conveys to the Purchaser, without recourse, but subject to the terms of this
Agreement, all of its rights, title and interest in and to the Mortgage Loans in a Mortgage Loan
Package having a Stated Principal Balance in an amount as set forth in the related Term Sheet, or
in such other amount as agreed by the Purchaser and the Seller as evidenced by the actual aggregate
principal balance of the Mortgage Loan Package accepted by the Purchaser on the related Closing
Date, together with the related Mortgage Files and all rights and obligations arising under the
documents contained therein, other than the servicing rights to such Mortgage Loans.



     With respect to each Mortgage Loan, the Purchaser shall own and be entitled to (1) the
principal portion of all Monthly Payments due after the related Cut-off Date, (2) all other
recoveries of principal collected after the related Cut-off Date (provided, however, that the
principal portion of all Monthly Payments due on or before the related Cut-off Date and collected
by the Seller or any successor servicer after the related Cut-off Date shall belong to the Seller),
and (3) all payments of interest on the Mortgage Loans (minus that portion of any such payment
which is allocable to the period prior to the related Cut-off Date). The Stated Principal Balance
of each Mortgage Loan as of the related Cut-off Date is determined after application of payments of
principal due on or before the related Cut-off Date whether or not collected, together with any
unscheduled Principal Prepayments collected prior to the related Cut-off Date; provided, however,
that Monthly Payments for a Due Date beyond the Cut-off Date shall not be applied to reduce the
principal balance. Such Monthly Payments shall be the property of the Purchaser. The Seller shall
remit any such Monthly Payments to the Purchaser on the Remittance Date following collection
thereof.



     SECTION 3. Mortgage Loan Schedule.



     The Seller shall deliver the Mortgage Loan Schedule (which will be annexed to the related Term
Sheet) to the Purchaser at least two (2) Business Days prior to the related Closing Date.



     SECTION 4. Purchase Price.



     The Purchase Price for the Mortgage Loans being acquired on a Closing Date shall be equal to
the sum of (a) the product of (i) the Purchase Price Percentage stated in the related Term Sheet
(subject to adjustment as provided therein) and (ii) the Stated Principal Balance of the
Mortgage Loans listed on the related Mortgage Loan Schedule, plus (b) an amount equal
to accrued interest on the aggregate Stated Principal Balance of the Mortgage Loans at the weighted
average Mortgage Interest Rate of such Mortgage Loans from the related Cut-off Date through the day
prior to the related Closing Date, both inclusive (assuming 30/360) (the “Purchase Price”).
If so provided in the related Term Sheet, portions of the Mortgage Loans shall be priced
separately.



     The Purchase Price as set forth in the preceding paragraph for the Mortgage Loans shall be
paid on the related Closing Date by wire transfer of immediately available funds.



16









 






     SECTION 5. Examination of Mortgage Files.


     The Seller shall, at the direction of the Purchaser, (a) deliver to the Purchaser or its
designee in escrow, for examination with respect to each Mortgage Loan to be purchased on the
related Closing Date, the related Mortgage File, or (b) make the related Mortgage File available to
the Purchaser for examination at the Seller’s offices or such other location as shall otherwise be
agreed upon by the Purchaser and the Seller. The Seller shall make available to Purchaser the
Mortgage File in digital format on compact disks or DVD which shall include, without limitation,
imaged documents as required for Purchaser’s due diligence review. Such examination may be made by
the Purchaser or its designee at any reasonable time before or after the related Closing Date. The
Purchaser may, at its option and without notice to the Seller, purchase all or part of the Mortgage
Loan package without conducting any partial or complete examination. The fact that the Purchaser
has conducted or has determined not to conduct any partial or complete examination of the Mortgage
Files shall not affect the Purchaser’s (or any of its successors’) rights to demand repurchase or
other relief or remedy provided for in this Agreement.



     SECTION 6. Delivery of Mortgage Loan Documents.



     Subsection 6.01 Possession of Mortgage Files.



     The contents of each Mortgage File required to be retained by the Servicer to service the
Mortgage Loans pursuant to this Agreement and thus not delivered to the Purchaser or its designee
are and shall be held in trust by the Servicer for the benefit of the Purchaser as the owner
thereof. The Servicer’s possession of any portion of each such Mortgage File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the Mortgage Loans pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a custodial capacity only.
The ownership of each Mortgage Note, Mortgage and the contents of each Mortgage File is vested in
the Purchaser and the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Servicer at the will of the
Purchaser in such custodial capacity only. The Mortgage File retained by the Servicer with respect
to each Mortgage Loan pursuant to this Agreement shall be appropriately identified in the
Servicer’s computer system to reflect clearly the ownership of such related Mortgage Loan by the
Purchaser. The Servicer shall release from its custody the contents of any Mortgage File retained
by it only in accordance with this Agreement, except when such release is
required in connection with a repurchase of any such Mortgage Loan pursuant to Subsection 7.03
of this Agreement or if required under applicable law or court order.



     Subsection 6.02 Books and Records.



     The sale of each Mortgage Loan will be reflected on the Seller’s balance sheet and other
financial statements as a sale of assets by the Seller. The Seller shall maintain a complete set
of books and records for the Mortgage Loans sold by it which shall be appropriately identified in
the Seller’s computer system to clearly reflect the ownership of the Mortgage Loans by the
Purchaser.



     In addition to the foregoing, the Seller shall provide to any supervisory agents or examiners
that regulate the Purchaser, including but not limited to, the OTS, the FDIC and other



17









 







similar
entities, access, during normal business hours, upon reasonable advance notice to the Seller and
without charge to the Seller or such supervisory agents or examiners, to any documentation
regarding the Mortgage Loans that may be required by any applicable regulator.



     Subsection 6.03 Delivery of Mortgage Loan Documents.



     The Seller shall deliver and release to the Purchaser or its designee the Mortgage Loan
Documents no later than four (4) Business Days prior to the related Closing Date. If the Seller
cannot deliver the original recorded Mortgage Loan Documents on the related Closing Date, the
Seller shall, promptly upon receipt thereof and in any case not later than 120 days from the
Closing Date, deliver such original recorded documents to the Purchaser or its designee (unless the
Seller is delayed in making such delivery by reason of the fact that such documents shall not have
been returned by the appropriate recording office). If delivery is not completed within 120 days
of the related Closing Date solely because such documents shall not have been returned by the
appropriate recording office, the Seller shall deliver such document to Purchaser, or its designee,
within such time period as specified in a Seller’s Officer’s Certificate. In the event that
documents have not been received by the date specified in the Seller’s Officer’s Certificate, a
subsequent Seller’s Officer’s Certificate shall be delivered by such date specified in the prior
Seller’s Officer’s Certificate, stating a revised date for receipt of documentation. The procedure
shall be repeated until the documents have been received and delivered. The Seller shall use its
best efforts to effect delivery of all delayed recorded documents within 180 days of the related
Closing Date. If delivery of all Mortgage Loan Documents with respect to any Mortgage Loan is not
completed within 360 days of the related Closing Date then, at Purchaser’s option, the Seller shall
repurchase such Mortgage Loan in such manner set forth in Section 7.03.



     Any review by the Purchaser or its designee of the Mortgage Files shall in no way alter or
reduce the Seller’s obligations hereunder.



     If the Purchaser or its designee discovers any defect with respect to any document
constituting part of a Mortgage File, the Purchaser shall, or shall cause its designee to, give
written specification of such defect to the Seller and the Seller shall cure or repurchase such
Mortgage Loan in accordance with Section 7.03.



     The Seller shall forward to the Purchaser, or its designee, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan entered into within one
week of their execution and shall also provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public recording office to be a
true and complete copy of the original within five (5) days of its return from the appropriate
public recording office.



     SECTION 7. Representations, Warranties and Covenants; Remedies for Breach.



     Subsection 7.01 Representations and Warranties Regarding Individual Mortgage Loans.



     The Seller and, solely as specified below, the Servicer, hereby represent and warrant to the
Purchaser that, as to each Mortgage Loan, as of the related Closing Date or such other date
specified herein:



18









 





     (a) The information set forth in the Mortgage Loan Schedule annexed to the related Term Sheet
and the information contained in the related electronic data file delivered by the Seller to the
Purchaser is true, correct and complete.



     (b) There are no defaults by the Seller, the Servicer or any prior originator in complying
with the terms of the Mortgage, and all taxes, ground rents, governmental assessments, insurance
premiums, leasehold payments, water, sewer and municipal charges which previously became due and
owing have been paid, or escrow funds have been established in an amount sufficient to pay for
every such escrowed item which remains unpaid and which has been assessed but is not yet due and
payable.



     (c) The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or
modified in any respect, except by written instruments which have been recorded in the applicable
public recording office required by law or if necessary to maintain the lien priority of the
Mortgage, and which have been delivered to the Purchaser; the substance of any such waiver,
alteration or modification has been approved by the insurer under the Primary Mortgage Insurance
Policy, if any, and by the title insurer, to the extent required by the related policy, and is
reflected on the related Mortgage Loan Schedule. No other instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the insurer under the Primary Mortgage
Insurance Policy, if any, and by the title insurer, to the extent required by the policy, and which
assumption agreement is a part of the Mortgage File and is reflected on the related Mortgage Loan
Schedule.



     (d) The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off,
counterclaim or defense, including, without limitation, the defense of usury, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, and no such right of rescission, set-off, counterclaim or defense
has been asserted with respect thereto; and the Mortgagor was not a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated.



     (e) All buildings or other customarily insured improvements upon the Mortgaged Property are
insured by an insurer generally acceptable to Fannie Mae and to prudent mortgage lending
institutions against loss by fire, hazards of extended coverage and such other hazards as are
provided for in the Fannie Mae Guides as well as all additional requirements set forth herein,
pursuant to an insurance policy conforming to the requirements of Customary Servicing Procedures
and providing coverage in an amount equal to the lesser of (i) the full insurable value of the
Mortgaged Property or (ii) the outstanding principal balance owing on the Mortgage Loan, but in no
event less than the minimum amount necessary to fully compensate for any damage or loss on a
replacement cost basis. All such insurance policies are in full force and effect and contain a
standard mortgagee clause naming the originator of the Mortgage Loan, its successors and assigns as
mortgagee and all premiums thereon have been paid. If the Mortgaged Property is in an area
identified on a flood hazard map or flood insurance rate map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has been made
available), a flood insurance policy meeting the requirements of the current



19









 







guidelines of the Federal Insurance Administration is in effect which policy conforms to the requirements of Fannie
Mae or Freddie Mac. Such flood insurance policy is in an amount representing coverage not less than
the least of (A) the outstanding principal balance of the Mortgage Loan, (B) the full insurable
value of the related Mortgaged Property and (C) the maximum amount of insurance which was available
under the Flood Disaster Protection Act of 1973, as amended. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at the Mortgagor’s cost and
expense and to seek reimbursement therefor from the Mortgagor. Each such insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and will be in full force
and effect and inure to the benefit of the Purchaser upon the consummation of the purchase of the
Mortgage Loans as contemplated by this Agreement. The Seller has not acted or failed to act so as
to impair the coverage of any such insurance policy or the validity, binding effect and
enforceability thereof;



     (f) Any and all requirements of any federal, state or local law including, without limitation,
usury, truth in lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity, fair housing or disclosure laws applicable to the origination and servicing of
the Mortgage Loans have been complied with. The Servicer maintains, and shall maintain, evidence of
such compliance as required by applicable law or regulation and shall make such evidence available
for inspection at the Servicer’s office during normal business hours upon reasonable advance
notice. No Mortgage Loan is (a) covered by the Home Ownership and Equity Protection Act of 1994,
as amended (“HOEPA”), (b) a “high cost,” “threshold,” “covered,” “predatory,” “abusive,” “high risk
home” or similarly defined loan, including refinance loans, under any other applicable law (or a
similarly classified loan using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having high interest rates,
points and/or fees), provided that any Mortgage Loan secured by a Mortgaged Property in Illinois
characterized as a “threshold” loan shall not be a “high cost” loan unless it is characterized as
“predatory” under applicable local law; the Seller has implemented and conducted compliance
procedures to determine if each Mortgage Loan is “high-cost” home loan under the applicable laws
and performed a review of the disclosure provided to the related Mortgagor in accordance with such
laws and the related Mortgage Note in order to determine that such Mortgage Loan, if subject to any
such law, does not violate any such law or (c) a “High Cost Loan” or “Covered Loan,” as defined in
the then current Standard & Poor’s LEVELS® Glossary, Appendix E.



     (g) The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in
part (other than as to Principal Prepayments in full which may have been received on or after the
related Cut-off Date and prior to the related Closing Date), and the Mortgaged Property has not
been released from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation, subordination, rescission or
release. Neither the Seller nor the Servicer has waived the performance by the Mortgagor of any
action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in
default, and neither the Seller nor the Servicer has waived any default.



20









 





     (h) The Mortgage is a valid, existing, perfected and enforceable first lien on the Mortgaged
Property, including all improvements on the Mortgaged Property, free and clear of all adverse
claims, liens and encumbrances having priority over the lien of the Mortgage, subject only to (i)
the lien of current real property taxes and assessments not yet due and payable, (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of the public record as of
the date of recording being acceptable to mortgage lending institutions generally and either (A)
specifically referred to in the lender’s title insurance policy delivered to the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised Value of the Mortgaged Property
and (iii) other matters to which like properties are commonly subject which do not individually or
in the aggregate materially interfere with the benefits of the security intended to be provided by
the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and delivered in connection
with the Mortgage Loan establishes and creates a valid, existing and enforceable first lien and
first priority security interest on the property described therein and the Seller has the full
right to sell and assign the same to the Purchaser.



     (i) The Mortgage Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects in accordance with
its terms except as enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the enforcement of the
rights of creditors and (ii) general principles of equity, whether enforcement is sought in a
proceeding in equity or at law and the Seller has taken all action necessary to transfer such
rights of enforceability to the Purchaser.



     (j) All parties to the Mortgage Note and the Mortgage had the legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note
and the Mortgage have been duly and properly executed by such parties. Either the Mortgagor is a
natural person or the related co-borrower or guarantor is a natural person.



     (k) The proceeds of the Mortgage Loan have been fully disbursed to or for the account of the
Mortgagor and there is no obligation for the Mortgagee to advance additional funds thereunder and
any and all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any amounts paid or due
to the Mortgagee pursuant to the Mortgage Note or Mortgage.



     (l) The Seller and all other parties which have had any interest in the Mortgage Loan, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and
disposed of such interest, were) in compliance with any and all applicable “doing business” and
licensing requirements of the laws of the state wherein the Mortgaged Property is located.



     (m) The Mortgage Loan is covered by an ALTA or CLTA lender’s title insurance policy,
acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or
Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained in (h)(i), (ii) and (iii) above) the



21









 







Seller, its successors and assigns as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan, against any
loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of
the Mortgage providing for adjustment in the Mortgage Interest Rate or Monthly Payment. The Seller
and its successors and assigns are the sole insureds of such lender’s title insurance policy, and
such lender’s title insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement and will inure to
the benefit of the Purchaser and its assigns without any further act. No claims have been made
under such lender’s title insurance policy, and no prior holder of the Mortgage has done, by act or
omission, anything which would impair the coverage of such lender’s title insurance policy. In
connection with the issuance of such lender’s title insurance policy, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be received, retained
or realized by any attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller.



     (n) There is no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach, violation or event
permitting acceleration, and neither the Seller nor the Servicer has waived any default, breach,
violation or event permitting acceleration.



     (o) There are no mechanics’ or similar liens or claims filed for work, labor or material (and
no rights are outstanding that under law could give rise to such lien) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage.



     (p) All improvements which were considered in determining the Appraised Value of the related
Mortgaged Property lay wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the Mortgaged Property.



     (q) The Mortgage Loan was originated by a commercial bank or similar banking institution which
is supervised and examined by a federal or state authority, or by a mortgagee approved by the
Secretary of HUD.



     (r) Principal payments on the Mortgage Loan commenced no more than sixty (60) days after (i)
the IO Conversion Date, with respect to the IO Adjustable Rate Mortgage Loans and (ii) the proceeds
of the Mortgage Loan were disbursed, with respect to all Mortgage Loans other than IO Adjustable
Rate Mortgage Loans. The Mortgage Loans identified on the related Mortgage Loan Schedule have an
original term to maturity of not more than (i) twenty-five (25) years with respect to the IO
Adjustable Rate Mortgage Loans and (ii) thirty (30) years with respect to all other Mortgage Loans,
with interest payable in arrears on the first day of the month. As to each Adjustable Rate
Mortgage Loan, on each applicable Adjustment Date, the Mortgage Interest Rate will be adjusted to
equal the sum of the Index plus the applicable Gross Margin, rounded up or down as provided in the
Mortgage Note; provided, however, that the Mortgage Interest Rate will not increase or decrease by
more than the Initial Rate Cap on the first Adjustment Date or the Periodic Rate Cap on any
subsequent Adjustment Date, if applicable, and



22









 







will in no event exceed the Lifetime Rate Cap. Each
Mortgage Note evidencing a Mortgage Loan other than an Adjustable Rate Mortgage Loan requires a
Monthly Payment which is sufficient to amortize the original principal balance fully over the
original term thereof and to pay interest at the related Mortgage Interest Rate. Each Mortgage
Note evidencing an Adjustable Rate Mortgage Loan requires a Monthly Payment which is sufficient
(after the IO Conversion Date, with respect to the IO Adjustable Rate Mortgage Loans) (i) during
the period prior to the first adjustment to the Mortgage Interest Rate, to amortize the original
principal balance fully over the remaining term thereof and to pay interest at the related Mortgage
Interest Rate, and (ii) during the period following each Adjustment Date, to amortize the
outstanding principal balance fully as of the first day of such period over the then remaining term
of such Mortgage Note and to pay interest at the related Mortgage Interest Rate. No Mortgage Note
evidencing an Adjustable Rate Mortgage Loan permits negative amortization. Interest on the Mortgage
Note is calculated on the basis of a 360-day year consisting of twelve 30-day months. No Mortgage
Loan provides for interest payable on a simple interest basis. No Mortgage Loan provides for an
increase in the related Mortgage Interest Rate upon the occurrence of a default under the terms of
the related Mortgage Note. No IO Adjustable Rate Mortgage Loan has an interest only period in
excess of ten (10) years.



     (s) There is no proceeding pending or, to the Seller’s knowledge, threatened for the total or
partial condemnation of the Mortgaged Property and such property is in good repair and is undamaged
by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, so as to
affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use
for which the premises were intended.



     (t) The Mortgage and related Mortgage Note contain customary and enforceable provisions such
as to render the rights and remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby, including (i) in the case of a
Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial
foreclosure. To the best of the Seller’s knowledge, following the date of origination of the
Mortgage Loan, the Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed for protection
under applicable bankruptcy laws. There is no homestead or other exemption or right available to
the Mortgagor or any other person which would interfere with the right to sell the Mortgaged
Property at a trustee’s sale or the right to foreclose the Mortgage.



     (u) The Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or Freddie Mac.



     (v) The Mortgage Note is not and has not been secured by any collateral except the lien of the
corresponding Mortgage on the Mortgaged Property and the security interest of any applicable
security agreement or chattel mortgage referred to in (h) above.



     (w) The Mortgage File contains an appraisal of the related Mortgaged Property, in a form
acceptable to Fannie Mae or Freddie Mac and such appraisal complies with the requirements of
FIRREA, and was made and signed, prior to the approval of the Mortgage Loan application, by a
Qualified Appraiser.



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     (x) In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and currently so serves and is named
in the Mortgage, and no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.



     (y) The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not
have a shared appreciation, balloon payment or other contingent interest feature, nor does it
contain any “buydown” provision which is currently in effect.



     (z) The Mortgage contains an enforceable provision for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder.



     (aa) The Mortgagor has received all disclosure materials required by applicable law with
respect to the making of mortgage loans of the same type as the Mortgage Loan and rescission
materials required by applicable law if the Mortgage Loan is a Refinanced Mortgage Loan and has
acknowledged receipt of such materials to the extent required by applicable law and such documents
will remain in the Mortgage File.



     (bb) No Mortgage Loan has an LTV at origination in excess of 95%. Each Mortgage Loan with an
LTV at origination in excess of 80% will be subject to a Primary Mortgage Insurance Policy, issued
by an insurer acceptable to Fannie Mae or Freddie Mac at the time of origination, which insures
that portion of the Mortgage Loan in excess of the portion of the Appraised Value of the Mortgaged
Property as required by Fannie Mae. All provisions of such Primary Mortgage Insurance Policy have
been and are being complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. Any Mortgage subject to any such Primary Mortgage Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance and to pay all premiums and charges
in connection therewith at least until the LTV of such Mortgage Loan is reduced to less than 80%.
The Mortgage Interest Rate for the Mortgage
Loan does not include any such insurance premium. No Mortgage Loan requires payment of such
premiums, in whole or in part, by the Purchaser.



     (cc) The Mortgaged Property is lawfully occupied under applicable law, all inspections,
licenses and certificates required to be made or issued with respect to all occupied portions of
the Mortgaged Property and, with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy, have been made or obtained from the appropriate authorities
and no improvement located on or part of the Mortgaged Property is in violation of any zoning law
or regulation.



     (dd) The Assignment of Mortgage is in recordable form and is acceptable for recording under
the laws of the jurisdiction in which the Mortgaged Property is located.



     (ee) All payments required to be made prior to the related Cut-off Date for such Mortgage Loan
under the terms of the Mortgage Note have been made, the Mortgage Loan has not been dishonored,
there are no material defaults under the terms of the Mortgage Loan; no Mortgage Loan has been more
than thirty (30) days delinquent in the twelve month period



24









 







immediately prior to the related
Cut-off Date and no Mortgage Loan will be more than thirty (30) days delinquent as of the related
Transfer Date.



     (ff) None of the Seller, the Servicer or any prior originator or servicer has advanced funds,
or induced, solicited or knowingly received any advance from any party other than the Mortgagor,
directly or indirectly, for the payment of any amount due under the Mortgage Loan.



     (gg) With respect to each Mortgage Loan, the Seller is in possession of a complete Mortgage
File except for the documents which have been delivered to the Purchaser or which have been
submitted for recording and not yet returned.



     (hh) Immediately prior to the payment of the related Purchase Price, the Seller was the sole
owner and holder of the Mortgage Loans and the indebtedness evidenced by the Mortgage Note. The
Mortgage Loans, including the Mortgage Note and the Mortgage, were not assigned or pledged by the
Seller and the Seller had good and marketable title thereto, and the Seller had full right to
transfer and sell the Mortgage Loans to the Purchaser free and clear of any encumbrance,
participation interest, lien, equity, pledge, claim or security interest and had full right and
authority subject to no interest or participation in, or agreement with any other party to sell or
otherwise transfer the Mortgage Loans. Following the sale of the Mortgage Loans, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to relinquish all rights to
monitor, possess and control the Mortgage Loan except in connection with the servicing of the
Mortgage Loan by the Servicer as set forth in this Agreement. After the related Closing Date,
neither the Seller nor the Servicer will have any right to modify or alter the terms of the sale of
the Mortgage Loans and neither the Seller nor the Servicer will have any obligation or right to
repurchase the Mortgage Loans, except as provided in this Agreement or as otherwise agreed to by
the Seller, the Servicer and the Purchaser.



     (ii) Any future advances made prior to the related Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly insured as having
first lien priority by a title insurance policy, an endorsement to the policy insuring the
mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae and Freddie
Mac. The consolidated principal amount does not exceed the original principal amount of the
Mortgage Loan.



     (jj) The Mortgage Loan was underwritten in accordance with the Underwriting Guidelines in
effect at the time of origination with exceptions thereto exercised in a reasonable manner.



     (kk) The Mortgaged Property is located in the state identified in the related Mortgage Loan
Schedule and consists of a parcel of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit, or an individual
unit in a planned unit development; provided, however, that any condominium project or planned unit
development generally conforms with the Underwriting Guidelines regarding



25









 







such dwellings, and no
residence or dwelling is a mobile home, manufactured dwelling or cooperative.



     (ll) If the Mortgaged Property is a condominium unit or a planned unit development (other than
a de minimis planned unit development) such condominium or planned unit development project meets
Fannie Mae or Freddie Mac eligibility requirements for sale to Fannie Mae or Freddie Mac, as the
case may be, or is located in a condominium or planned unit development project which has received
Fannie Mae or Freddie Mac project approval or as to which Fannie Mae’s and Freddie Mac’s
eligibility requirements have been waived.



     (mm) The Seller used no adverse selection procedures in selecting the Mortgage Loan from among
the outstanding first-lien, residential mortgage loans owned by it which were available for
inclusion in the Mortgage Loans.



     (nn) Each Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the Code.



     (oo) With respect to each Mortgage where a lost note affidavit has been delivered in place of
the related Mortgage Note, the related Mortgage Note is no longer in existence.



     (pp) No fraud, error, omission, misrepresentation, negligence or similar occurrence with
respect to the Mortgage Loan has taken place on the part of the Seller, the Servicer or any
originator or servicer or the Mortgagor or on the part of any other party involved in the
origination of the Mortgage Loan.



     (qq) The origination practices used by the Seller and the collection and servicing practices
used by the Servicer with respect to each Mortgage Loan have been in all respects legal, proper,
prudent and customary in the mortgage origination and servicing industry and the collection and
servicing practices used by the Servicer have been acceptable to Fannie Mae and Freddie Mac.



     (rr) The Mortgagor is not in bankruptcy and is not insolvent and no Mortgagor was a debtor in
any state or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated and the Mortgaged Property has not been subject to any bankruptcy or foreclosure
proceedings.



     (ss) Neither the Seller nor the Servicer have any knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit
standing that could reasonably be expected to cause investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent or materially adversely
affect the value or the marketability of the Mortgage Loan.



     (tt) The Mortgagor has not notified the Seller or the Servicer, and neither the Seller nor the
Servicer has knowledge of any relief requested by the Mortgagor under the Servicemembers Civil
Relief Act, as amended, or any similar state or local laws.




26









 





          (uu) No Mortgage Loan was made in connection with (i) the construction or rehabilitation of a
Mortgaged Property or (ii) facilitating the trade-in or exchange of a Mortgaged Property.




          (vv) The Mortgaged Property is free from any and all toxic or hazardous substances and there
exists no violation of any local, state or federal environmental law, rule or regulation. There is
no pending action or proceeding directly involving any Mortgaged Property of which the Seller or
the Servicer is aware in which compliance with any environmental law, rule or regulation is an
issue and nothing further remains to be done to satisfy in full all requirements of each such law,
rule or regulation constituting a prerequisite to use and enjoyment of said property.




          (ww) No action, inaction, or event has occurred and no state of affairs exists or has existed
that has resulted or will result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, Primary Mortgage Insurance Policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be received by the
Seller or the Servicer or any designee of the Seller or the Servicer or any corporation in which
the Seller, the Servicer or any officer, director, or employee of the Seller or the Servicer had a
financial interest at the time of placement of such insurance.




          (xx) With respect to any ground lease to which a Mortgaged Property may be subject: (A) the
Mortgagor is the owner of a valid and subsisting leasehold interest under such ground lease; (B)
such ground lease is in full force and effect, unmodified and not supplemented by any writing or
otherwise; (C) all rent, additional rent and other charges reserved therein have been fully paid to
the extent payable as of the related Closing Date; (D) the Mortgagor enjoys the quiet and peaceful
possession of the leasehold estate; (E) the Mortgagor is not in default under any of the terms of
such ground lease, and there are no circumstances which, with the passage of time or the giving of
notice, or both, would result in a default under such ground lease; (F) the lessor under such
ground lease is not in default under any of the terms or provisions of such ground lease on the
part of the lessor to be observed or performed; (G) the lessor under such ground lease has
satisfied any repair or construction obligations due as of the related Closing Date pursuant to the
terms of such ground lease; (H) the execution, delivery and performance of the Mortgage do not
require the consent (other than those consents which have been obtained and are in full force and
effect) under, and will not contravene any provision of or cause a default under, such ground
lease; (I) the term of such lease does not terminate earlier than the maturity date of the Mortgage
Note; (J) the ground lease is assignable or transferable; (K) the ground lease does not provide for
termination of the lease in the event of lessee’s default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (L) the ground lease
permits the mortgaging of the related Mortgaged Property; (M) the ground lease protects the
mortgagee’s interests in the event of a property condemnation; and (N) the use of leasehold estates
for residential properties is a widely accepted practice in the jurisdiction in which the Mortgaged
Property is located.




          (yy) Each Mortgage Loan originated in the state of Texas pursuant to Article XVI, Section
50(a)(6) of the Texas Constitution (a “Texas Refinance Loan”) has been originated in compliance
with the provisions of Article XVI, Section 50(a)(6) of the Texas Constitution, Texas

27









 








Civil Statutes and the Texas Finance Code. If the Mortgage Loan was originated in Texas, it
is not a cash-out refinancing.




          (zz) All of the terms of the related Mortgage Note pertaining to interest adjustments, payment
adjustments and adjustments of the outstanding principal balance, if any, are enforceable and such
adjustments on such Mortgage Loan have been made properly and in accordance with the provisions of
such Mortgage Loan.




          (aaa) No Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
“Executive Order”) or the regulations promulgated by the Office of Foreign Assets Control of the
United States Department of the Treasury (the “OFAC Regulations”) or in violation of the Executive
Order or the OFAC Regulations, and no Mortgagor is subject to the provisions of such Executive
Order or the OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC
Regulations.




          (bbb) All information on the Mortgage Loan Schedule and electronic data file delivered to the
Purchaser regarding the Prepayment Penalty is complete and accurate in all material respects and
each Prepayment Penalty is permissible and enforceable in accordance with its terms under
applicable law. Prepayment Penalties on the Mortgage Loans are applicable to prepayments resulting
from both refinancings and sales of the related Mortgaged Properties and the terms of such
Prepayment Penalties do not provide for a waiver or release (i.e., “holidays”) during the term of
the Prepayment Penalty. No Mortgage Loan provides for the payment of a Prepayment Penalty beyond
the three-year term following the origination of the Mortgage Loan. With respect to any Mortgage
Loan that contains a provision permitting imposition of a Prepayment Penalty: (i) prior to the
Mortgage Loan’s origination, the Mortgagor agreed to such Prepayment Penalty in exchange for a
monetary benefit, including, but not limited to, a rate or fee reduction, (ii) prior to the
Mortgage Loan’s origination, the Mortgagor was offered the choice of another mortgage product that
did not require payment of such a premium, (iii) the Prepayment Penalty is disclosed to the
Mortgagor in the loan documents pursuant to applicable state and federal law, and (iv)
notwithstanding any state or federal law to the contrary, the Seller shall not impose such
Prepayment Penalty in any instance when the mortgage debt is accelerated as the result of the
Mortgagor’s default in making the Monthly Payments.




          (ccc) As to each consumer report (as defined in the Fair Credit Reporting Act, Public Law
91-508) or other credit information furnished by the Seller or the Servicer to the Purchaser, the
Seller and the Servicer have full right and authority and are not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not precluded from furnishing the
same to any subsequent or prospective purchaser of such Mortgage Loan. The Seller shall hold the
Purchaser harmless from any and all damages, losses, costs and expenses (including attorney’s fees)
arising from disclosure of credit information in connection with the purchase and sale of Mortgage
Loans.




          (ddd) There is no action, suit, proceeding or investigation pending or, to the knowledge of
the Seller or the Servicer, threatened that is related to the Mortgage Loan and likely to affect
materially and adversely the servicing of such Mortgage Loan.




28









 








          (eee) With respect to escrow deposits and payments that the Servicer is entitled to collect,
all such payments are in the possession of, or under the control of the Servicer, and there exist
no deficiencies in connection therewith for which customary arrangements for repayment thereof have
not been made. All escrow payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. As to any Mortgage Loan that is
the subject of an escrow, escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every escrowed item that remains unpaid and has been
assessed but is not yet due and payable. No escrow deposits or other charges or payments due under
the Mortgage Note have been capitalized under any Mortgage or the related Mortgage Note.




          Subsection 7.02 Seller and Servicer Representations.




               The Seller and the Servicer hereby represent and warrant to the Purchaser that, as to itself
as of the related Closing Date:



          (a) It is a national banking association, duly organized, validly existing, and in good
standing under the laws of the United States and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing in the states where
the Mortgaged Property is located if the laws of such state require licensing or qualification in
order to conduct business of the type conducted by it. It is an approved seller/servicer in good
standing of conventional residential mortgage loans for Fannie Mae or Freddie Mac and is a
HUD-approved mortgagee under Section 203 of the National Housing Act. It has corporate power and
authority to execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by it and the consummation of the transactions contemplated
hereby have been duly and validly authorized. This Agreement, assuming due authorization,
execution and delivery by the Purchaser, evidences the legal, valid, binding and enforceable
obligation of it, subject to applicable law except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other similar laws
affecting the enforcement of the rights of creditors and (ii) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law. All requisite corporate action has been
taken by it to make this Agreement valid and binding upon it in accordance with the terms of this
Agreement.




          (b) No consent, approval, authorization or order is required for the transactions contemplated
by this Agreement from any court, governmental agency or body, or federal or state regulatory
authority having jurisdiction over it or, if required, such consent, approval, authorization or
order has been or will, prior to the related Closing Date, be obtained.




          (c) The consummation of the transactions contemplated by this Agreement are in its ordinary
course of business and will not result in the breach of any term or provision of its articles of
association or by-laws or result in the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any obligation under, any agreement,
indenture or loan or credit agreement or other instrument to which it or its property is

29









 








subject, or result in the violation of any law, rule, regulation, order, judgment or decree to
which it or its property is subject.




          (d) Its transfer, assignment and conveyance of the Mortgage Notes and the Mortgages pursuant
to this Agreement are not subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction.




          (e) There is no action, suit, proceeding or investigation pending or, to its best knowledge,
threatened against it which, either individually or in the aggregate, would result in any material
adverse change in its business, operations, financial condition, properties or assets, or in any
material impairment of its right or ability to carry on its business substantially as now conducted
or which would draw into question the validity of this Agreement or the Mortgage Loans or of any
action taken or to be taken in connection with its obligations contemplated herein, or which would
materially impair its ability to perform under the terms of this Agreement.




          (f) To the best of the Seller’s knowledge, the Seller is not in material default under any
agreement, contract, instrument or indenture to which the Seller is a party or by which it (or any
of its assets) is bound, which default would have a material adverse effect on the ability of the
Seller to perform under this Agreement, nor, to the best of the Seller’s knowledge, has any event
occurred which, with the giving of notice, the lapse of time or both, would constitute a default
under any such agreement, contract, instrument or indenture and have a material adverse effect on
the ability of the Seller to perform its obligations under this Agreement.




          (g) It does not believe, nor does it have any reason or cause to believe, that it cannot
perform each and every covenant contained in this Agreement.




          (h) It acknowledges and agrees that the Servicing Fee shall be treated by the Servicer, for
accounting and tax purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement.




          (i) It has determined that the disposition of the Mortgage Loans pursuant to this Agreement
will be afforded sale treatment for accounting and tax purposes.




          (j) It is solvent and the sale of the Mortgage Loans will not cause it to become insolvent.
The sale of the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any of
its creditors.




          (k) It has not dealt with any broker, investment banker, agent or other person that may be
entitled to any commission or compensation in connection with the sale of the Mortgage Loans.




          (l) To the best of the Seller’s knowledge, neither this Agreement nor any statement, report or
other agreement, document or instrument furnished or to be furnished pursuant to this Agreement
contains any materially untrue statement of fact or omits to state a fact necessary to make the
statements contained therein not misleading.




30









 








          Subsection 7.03 Repurchase; Substitution.




          (a) It is understood and agreed that the representations and warranties set forth in Sections
7.01 and 7.02 shall survive the sale of the Mortgage Loans and delivery of the Mortgage File to the
Purchaser, or its designee, and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination, or lack
of examination, of any Mortgage Loan Document. With respect to the representations and warranties
contained in Section 7.02 that are made to the best of Seller’s knowledge after reasonable inquiry
and investigation, if it is discovered by either the Seller or the Purchaser that the substance of
such representation and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan, the Purchaser shall be entitled to all the remedies to
which it would be entitled for a breach of representation or warranty, including, without
limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of
knowledge with respect to the inaccuracy at the time the representation or warranty was made. Upon
discovery by the Seller, the Servicer or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value of the Mortgage
Loans or the interest of the Purchaser in any Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other. The Seller shall have a period of sixty (60) days
from the earlier of its discovery or its receipt of notice of any such breach within which to
correct or cure such breach. The Seller hereby covenants and agrees that if any such breach is not
corrected or cured within such sixty (60) day period, the Seller shall, at the Purchaser’s option
either repurchase such Mortgage Loan at the Repurchase Price or substitute a mortgage loan for the
defective Mortgage Loan as provided below. In the event that any such breach shall involve any
representation or warranty set forth in Section 7.02, and such breach is not cured within sixty
(60) days of the earlier of either discovery by or notice to the Seller of such breach, all
Mortgage Loans shall, at the option of the Purchaser, be repurchased by the Seller at the
Repurchase Price. Any such repurchase shall be accomplished by wire transfer of the amount of the
Repurchase Price to an account designated by the Purchaser.




          (b) If the Seller is required to repurchase any Mortgage Loan pursuant to this Subsection 7.03
as a result of a breach of any of the representations and warranties set forth in Subsection 7.01,
the Seller may, with the Purchaser’s prior consent, within two (2) years from the related Closing
Date, remove such defective Mortgage Loan from the terms of this Agreement and substitute another
mortgage loan for such defective Mortgage Loan, in lieu of repurchasing such defective Mortgage
Loan. Any Substitute Mortgage Loan shall (a) have a principal balance at the time of substitution
not in excess of the principal balance of the Deleted Mortgage Loan (the amount of any difference,
plus one month’s interest thereon at the Mortgage Loan Remittance Rate borne by the Deleted
Mortgage Loan, being paid by the Seller and deemed to be a Principal Prepayment to an account
designated by the Purchaser), (b) have a Mortgage Interest Rate not less than, and not more than
one percentage point greater than, the Mortgage Interest Rate of the Deleted Mortgage Loan, (c)
have a remaining term to stated maturity not later than, and not more than one year less than, the
remaining term to stated maturity of the Deleted Mortgage Loan, (d) be, in the reasonable
determination of the Purchaser, of the same type, quality and character (including location of the
Mortgaged Property) as the Deleted Mortgage Loan as if the breach had not occurred, (e) have a
Loan-to-Value Ratio at origination no greater than that of the Deleted Mortgage Loan, (f) have the
same lien priority as

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that of the Deleted Mortgage Loan and (g) be, in the reasonable determination of the
Purchaser, in material compliance with the representations and warranties contained in this
Agreement and described in Subsection 7.01 as of the date of substitution.




          (c) The Seller shall amend the related Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement and the substitution of such substitute Mortgage Loan
therefore. Upon such amendment, the Purchaser shall review the Mortgage File delivered to it
relating to the substitute Mortgage Loan. The Monthly Payment on a substitute Mortgage Loan due on
the Due Date in the month of substitution shall be the property of the Seller and the Monthly
Payment on the Deleted Mortgage Loan for which the substitution is made due on such date shall be
the property of the Purchaser.




          (d) It is understood and agreed that the obligation of the Seller set forth in this Subsection
7.03 to cure, repurchase or substitute for a defective Mortgage Loan, and to indemnify Purchaser
pursuant to Subsection 12.01, constitutes the sole remedies of the Purchaser respecting a breach of
the foregoing representations and warranties. If the Seller fails to repurchase or substitute for
a defective Mortgage Loan in accordance with this Subsection 7.03, or fails to cure a defective
Mortgage Loan to Purchaser’s reasonable satisfaction in accordance with this Subsection 7.03, or to
indemnify Purchaser pursuant to Subsection 12.01, that failure shall be an Event of Default and the
Purchaser shall be entitled to pursue all available remedies. No provision of this paragraph shall
affect the rights of the Purchaser to terminate this Agreement for cause, as set forth in
Subsections 13.01 and 14.01.




          (e) Any cause of action against the Seller or the Servicer, as applicable, relating to or
arising out of the breach of any representations and warranties made in Subsections 7.01 and 7.02
shall accrue as to any Mortgage Loan upon (i) notice thereof by the Purchaser to the Seller or the
Servicer, as applicable, (ii) failure by the Seller or the Servicer, as applicable, to cure such
breach or repurchase such Mortgage Loan as specified above, and (iii) demand upon the Seller or the
Servicer, as applicable, by the Purchaser for compliance with this Agreement.




          (f) In the event that any Mortgage Loan is held by a REMIC, notwithstanding any contrary
provision of this Agreement, with respect to any Mortgage Loan that is not in default or as to
which no default is imminent, Purchaser may, in connection with any repurchase or substitution of a
defective Mortgage Loan pursuant to this Subsection 7.03, require that the Seller deliver, at the
Seller’s expense, an Opinion of Counsel to the effect that such repurchase or substitution will not
(i) result in the imposition of taxes on “prohibited transactions” of such REMIC (as defined in
Section 860F of the Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to
qualify as a REMIC at any time.




          Subsection 7.04 Repurchase of Mortgage Loans With Early Payment Default.




          If a Monthly Payment becomes one (1) or more scheduled Monthly Payments delinquent at any time
on or prior to the first day of the second calendar month following the related Closing Date (or
such other date set forth in the related Term Sheet), then the Seller, at the Purchaser’s option,
shall (a) promptly repurchase the related Mortgage Loan from the Purchaser in accordance with the
procedures set forth in Subsection 7.03 hereof, however, any such repurchase shall be made at the
Repurchase Price, (b) indemnify the Purchaser in accordance

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with Subsection 12.01 hereof, or (c) substitute a mortgage loan acceptable to the Purchaser in
accordance with Subsection 7.03 hereof.




          Subsection 7.05 Purchase Price Protection.




          With respect to any Mortgage Loan that prepays in full on or prior to the last day of the
third full month following the related Closing Date (or such other date set forth in the related
Term Sheet, the Seller shall reimburse the Purchaser an amount equal to the product of (a) the
amount by which Purchase Price Percentage paid by the Purchaser to the Seller for such Mortgage
Loan exceeds 100% and (b) the outstanding principal balance of the Mortgage Loan as of the Cut-off
Date. Such payment shall be made within thirty (30) days of such payoff.




          SECTION 8. Closing.

Subsection 8.01 Closing Conditions.




          The closing for the purchase and sale of each Mortgage Loan Package shall take place on the
respective Closing Date. The closing shall be either by telephone, confirmed by letter or wire as
the parties hereto shall agree, or conducted in person, at such place as the parties hereto shall
agree.




          The closing for each Mortgage Loan Package shall be subject to the satisfaction of each of the
following conditions:




          (a) the Seller shall have delivered to the Purchaser the related Mortgage Loan Schedule and an
electronic data file containing information on a loan-level basis;




          (b) all of the representations and warranties of the Seller under this Agreement shall be true
and correct as of the related Closing Date (or, with respect to Subsection 7.01, such other date
specified therein) in all material respects and no default shall have occurred hereunder which,
with notice or the passage of time or both, would constitute an Event of Default hereunder;




          (c) the Purchaser shall have received from the custodian an initial certification with respect
to its receipt of the Mortgage Loan Documents for the related Mortgage Loans;




          (d) the Purchaser shall have received originals of the related Term Sheet executed by the
Seller and a funding memorandum setting forth the Purchase Price(s), and the accrued interest
thereon, for the Mortgage Loan Package; and




          (e) all other terms and conditions of this Agreement and the related Term Sheet to be
satisfied by the Seller shall have been complied with in all material respects.




          Upon satisfaction of the foregoing conditions, the Purchaser shall pay to the Seller on such
Closing Date the Purchase Price for the related Mortgage Loan Package, plus accrued interest
pursuant to Section 4 of this Agreement.




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          Subsection 8.02 Closing Documents.




          (a)  On or before the initial Closing Date, the Seller shall submit to the Purchaser fully
executed originals of the following documents:





	 	(i)	 	this Agreement, in four counterparts;
	 
	 	(ii)	 	if requested by the Purchaser, a Custodial Account Letter Agreement;
	 
	 	(iii)	 	if requested by the Purchaser, an Escrow Account Letter Agreement; and





          (b)  On or before each Closing Date, the Seller shall submit to the Purchaser fully executed
originals of the following documents:





	 	(i)	 	the related Term Sheet;
	 
	 	(ii)	 	the related Mortgage Loan Schedule;






(iii)     the Purchaser shall have received from its custodian an initial certification
with respect to its receipt of the Mortgage Loan Documents for the related Mortgage Loans;




(iv)     a certificate or other evidence of merger or change of name, signed or stamped by
the applicable regulatory authority, if any of the Mortgage Loans were acquired by the
Seller by merger or acquired or originated by the Seller while conducting business under a
name other than its present name, if applicable.



          SECTION 9. [Reserved.]




          SECTION 10. Costs.




          The Seller and the Servicer shall pay any commissions due their salespeople and the legal fees
and expenses of their attorneys. The Purchaser shall pay the cost of delivering the Mortgage Files
to the Purchaser or its designee, the cost of recording the Assignments of Mortgage, any custodial
fees incurred in connection with the release of any Mortgage Loan Documents as may be required by
the servicing activities hereunder and all other costs and expenses incurred in connection with the
sale of the Mortgage Loans by the Seller to the Purchaser, including without limitation the
Purchaser’s attorneys’ fees. The Seller shall pay the cost of delivering the Mortgage Loan
Documents to the Purchaser or its designee for each related Closing Date.




          SECTION 11. Administration and Servicing of Mortgage Loans.




          Subsection 11.01 Servicer to Act as Servicer; Subservicing.




          Effective as of each related Transfer Date, the Servicer, as an independent contractor, shall
service and administer the Mortgage Loans in accordance with this Agreement and Customary Servicing
Procedures and the terms of the Mortgage Notes and Mortgages, and shall have full power and
authority, acting alone or through subservicers or agents, to do or cause to


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be done any and all things in connection with such servicing and administration which the
Servicer may deem necessary or desirable and consistent with the terms of this Agreement. With
respect to each Mortgage Loan Package, the related Mortgage Loans shall be serviced on an interim
basis by a servicer to be chosen by the Purchaser, the Servicer shall have no obligations or duties
or liabilities hereunder or otherwise with respect to the servicing of such Mortgage Loans prior to
the related Transfer Date; provided, however, the Servicer shall be entitled to the Servicing Fees
with respect to such Mortgage Loan Package as of the related Closing Date. The Purchaser and the
Servicer agree to direct payment of such Servicing Fees, net of any fees agreed to by the Purchaser
and the Servicer due to any servicer or subservicer of the related Mortgage Loans for the period
from the Closing Date to the Transfer Date, to the Servicer at the time of any related remittance
for such period on such Mortgage Loans. The Servicer may perform its servicing responsibilities
through agents or independent contractors, but shall not thereby be released from any of its
responsibilities hereunder. Notwithstanding anything to the contrary, the Servicer may delegate
any of its duties under this Agreement to one or more of its affiliates without regard to any of
the requirements of this section; provided, however, that the Servicer shall not be released from
any of its responsibilities hereunder by virtue of such delegation. The Mortgage Loans may be
subserviced by one or more unaffiliated subservicers on behalf of the Servicer provided each
subservicer is a Fannie Mae approved seller/servicer or a Freddie Mac approved seller/servicer in
good standing, and no event has occurred, including but not limited to a change in insurance
coverage, that would make it unable to comply with the eligibility for seller/servicers imposed by
Fannie Mae or Freddie Mac, or which would require notification to Fannie Mae or Freddie Mac. The
Servicer shall pay all fees and expenses of the subservicer from its own funds (provided that any
such expenditures that would constitute Servicing Advances if made by the Servicer hereunder shall
be reimbursable to the Servicer as Servicing Advances), and the subservicer’s fee shall not exceed
the Servicing Fee.




          At the cost and expense of the Servicer, without any right of reimbursement from the Custodial
Account, the Servicer shall be entitled to terminate the rights and responsibilities of a
subservicer and arrange for any servicing responsibilities to be performed by a successor
subservicer meeting the requirements in the preceding paragraph; provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Servicer, at the Servicer’s option,
from electing to service the related Mortgage Loans itself. If the Servicer’s responsibilities and
duties under this Agreement are terminated and if requested to do so by the Purchaser, the Servicer
shall at its own cost and expense terminate the rights and responsibilities of the subservicer as
soon as is reasonably possible. The Servicer shall pay all fees, expenses or penalties necessary
in order to terminate the rights and responsibilities of the subservicer from the Servicer’s own
funds without reimbursement from the Purchaser.




          The Servicer shall be entitled to enter into an agreement with the subservicer for
indemnification of the Servicer by the subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.




          Any subservicing agreement and any other transactions or services relating to the Mortgage
Loans involving the subservicer shall be deemed to be between the subservicer and Servicer alone,
and the Purchaser shall have no obligations, duties or liabilities with respect to the subservicer
including no obligation, duty or liability of the Purchaser to pay the subservicer’s fees and
expenses. For purposes of distributions and advances by the Servicer pursuant to this

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Agreement, the Servicer shall be deemed to have received a payment on a Mortgage Loan when the
subservicer has received such payment.




          Consistent with the terms of this Agreement, and subject to the REMIC Provisions if the
Mortgage Loans have been transferred to a REMIC, the Servicer may waive, modify or vary any term of
any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor; provided, however, that (unless the Mortgagor is in
default with respect to the Mortgage Loan, or such default is, in the judgment of the Servicer,
imminent, and the Servicer has the consent of the Purchaser) the Servicer shall not enter into any
payment plan or agreement to modify payments with a Mortgagor lasting more than six (6) months or
permit any modification with respect to any Mortgage Loan that would change the Mortgage Interest
Rate, the Lifetime Rate Cap (if applicable), the Initial Rate Cap (if applicable), the Periodic
Rate Cap (if applicable) or the Gross Margin (if applicable), defer or forgive the payment of any
principal or interest, change the outstanding principal amount (except for actual payments of
principal), make any future advances or extend the final maturity date with respect to such
Mortgage Loan, or accept substitute or additional collateral or release any collateral for such
Mortgage Loan. Without limiting the generality of the foregoing, the Servicer in its own name or
acting through subservicers or agents is hereby authorized and empowered by the Purchaser when the
Servicer believes it appropriate and reasonable in its best judgment, to execute and deliver, on
behalf of itself or the Purchaser, all instruments of satisfaction or cancellation, or of partial
or full release, discharge and all other comparable instruments, with respect to the Mortgage Loans
and the Mortgaged Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or cause to be held
title to such properties, on behalf of the Purchaser pursuant to the provisions of Subsection
11.13.




          The Purchaser shall furnish to the Servicer any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.




          Whether in connection with the foreclosure of a Mortgage Loan or otherwise, the Servicer shall
from its own funds make all necessary and proper Servicing Advances; provided, however, that the
Servicer is not required to make a Servicing Advance unless the Servicer determines in the exercise
of its good faith judgment that such Servicing Advance would ultimately be recoverable from REO
Disposition Proceeds, Insurance Proceeds or Condemnation Proceeds (with respect to each of which
the Servicer shall have the priority described in Subsection 11.05 for purposes of withdrawals from
the Custodial Account). Any Servicing Advance in excess of $15,000 shall be made only with the
written approval of the Purchaser.




          Notwithstanding anything to the contrary contained herein, in connection with a foreclosure or
acceptance of a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic substances or wastes, or if
the Purchaser otherwise requests an environmental inspection or review of such Mortgaged Property,
such an inspection or review is to be conducted by a qualified inspector at the Purchaser’s
expense. Upon completion of the inspection, the Servicer shall promptly provide the Purchaser with
a written report of the environmental inspection. In the event (a) the environmental inspection
report indicates that the Mortgaged Property is

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contaminated by hazardous or toxic substances or wastes and (b) the Purchaser directs the
Servicer to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean up costs, as applicable, from the
related Liquidation Proceeds, or if the Liquidation Proceeds are insufficient fully to reimburse
the Servicer, the Servicer shall be entitled to be reimbursed from amounts in the Custodial Account
pursuant to Subsection 11.05 hereof. In the event the Purchaser directs the Servicer not to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged Property from the
Custodial Account pursuant to Subsection 11.05 hereof.




          Subsection 11.02 Liquidation of Mortgage Loans.




          In the event that any payment due under any Mortgage Loan is not paid when the same becomes
due and payable, or in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace period, the Servicer
shall take such action as it shall deem to be in the best interest of the Purchaser. In the event
that any payment due under any Mortgage Loan remains delinquent for a period of ninety (90) days or
more, the Servicer shall commence foreclosure proceedings in accordance with Customary Servicing
Procedures and the guidelines set forth by Fannie Mae or Freddie Mac and FHA or VA, as applicable.
In such connection, the Servicer shall from its own funds make all necessary and proper Servicing
Advances. If the portion of any Liquidation Proceeds allocable as a recovery of interest on any
Mortgage Loan is less than the full amount of accrued and unpaid interest on such Mortgage Loan as
of the date such proceeds are received, then the applicable Servicing Fees with respect to such
Mortgage Loan shall be paid first and any amounts remaining thereafter shall be distributed to the
Purchaser.




          Subsection 11.03 Collection of Mortgage Loan Payments.




          Continuously from the date hereof until the principal and interest on all Mortgage Loans are
paid in full, the Servicer will proceed diligently, in accordance with this Agreement, to collect
all payments due under each of the Mortgage Loans when the same shall become due and payable.
Further, the Servicer will in accordance with Customary Servicing Procedures ascertain and estimate
taxes, assessments, fire and hazard insurance premiums, premiums for Primary Mortgage Insurance
Policies, and all other charges that, as provided in any Mortgage, will become due and payable to
the end that the installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.




          Subsection 11.04 Establishment of Custodial Account; Deposits in Custodial Account.




          The Servicer shall segregate and hold all funds collected and received pursuant to each
Mortgage Loan separate and apart from any of its own funds and general assets and shall establish
and maintain one or more Custodial Accounts (collectively, the “Custodial Account”), titled
“Bank of America, National Association, in trust for RWT Holdings, Inc. as Purchaser of Mortgage
Loans and various Mortgagors.” Such Custodial Account shall be established with a commercial bank,
a savings bank or a savings and loan association (which may be a depository affiliate of the
Servicer) which meets the guidelines set forth by Fannie Mae or Freddie Mac as

37









 







an eligible depository institution for custodial accounts. The Custodial Account shall
initially be established and maintained at Bank of America, National Association, or any successor
thereto, and shall not be transferred to any other depository institution without the Purchaser’s
approval, which shall not unreasonably be withheld. In any case, the Custodial Account shall be
insured by the FDIC in a manner which shall provide maximum available insurance thereunder and
which may be drawn on by the Servicer.




          The Servicer shall deposit in the Custodial Account on a daily basis, and retain therein the
following payments and collections received or made by it subsequent to the related Cut-off Date
(other than in respect of principal and interest on the Mortgage Loans due on or before the related
Cut-off Date):



(a) all payments on account of principal, including Principal Prepayments, on the Mortgage Loans;



(b) all payments on account of interest on the Mortgage Loans adjusted to the related Mortgage Loan
Remittance Rate;



(c) all Liquidation Proceeds;



(d) all proceeds received by the Servicer under any title insurance policy, hazard insurance
policy, Primary Mortgage Insurance Policy or other insurance policy other than proceeds to be held
in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with Customary Servicing Procedures;



(e) all awards or settlements in respect of condemnation proceedings or eminent domain affecting
any Mortgaged Property which are not released to the Mortgagor in accordance with Customary
Servicing Procedures;



(f) any amount required to be deposited in the Custodial Account pursuant to Subsections 11.15,
11.17 and 11.19;



(g) any amount required to be deposited by the Servicer in connection with any REO Property
pursuant to Subsection 11.13;



(h) all amounts required to be deposited by the Servicer in connection with shortfalls in principal
amount of Substitute Mortgage Loans pursuant to Subsection 7.03;



(i) with respect to each Full Prepayment and each Partial Prepayment, an amount (to be paid by the
Servicer out of its own funds) equal to the Prepayment Interest Shortfall; provided, however, that
the Servicer’s aggregate obligations under this paragraph for any month shall be limited to the
total amount of Servicing Fees actually received with respect to the Mortgage Loans by the Servicer
during such month; and



(j) amounts required to be deposited by the Servicer in connection with the deductible clause of
any hazard insurance policy.




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          The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges, assumption fees and other ancillary fees need not be deposited by
the Servicer in the Custodial Account.




          The Servicer may invest the funds in the Custodial Account in Eligible Investments designated
in the name of the Servicer for the benefit of the Purchaser, which shall mature not later than the
Business Day next preceding the Remittance Date next following the date of such investment (except
that (A) any investment in the institution with which the Custodial Account is maintained may
mature on such Remittance Date and (B) any other investment may mature on such Remittance Date if
the Servicer shall advance funds on such Remittance Date, pending receipt thereof to the extent
necessary to make distributions to the Purchaser) and shall not be sold or disposed of prior to
maturity. Notwithstanding anything to the contrary herein and above, all income and gain realized
from any such investment shall be for the benefit of the Servicer and shall be subject to
withdrawal by the Servicer. The amount of any losses incurred in respect of any such investments
shall be deposited in the Custodial Account by the Servicer out of its own funds immediately as
realized.




          Subsection 11.05 Withdrawals From the Custodial Account.




          The Servicer shall, from time to time, withdraw funds from the Custodial Account for the
following purposes:



(a) to make payments to the Purchaser in the amounts and in the manner provided for in Subsection
11.15;



(b) to reimburse itself for P&I Advances, the Servicer’s right to reimburse itself pursuant to this
subclause (b) with respect to any Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and such other amounts as may be collected by the
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan, it being understood that,
in the case of any such reimbursement, the Servicer’s right thereto shall be prior to the rights of
the Purchaser with respect to such Mortgage Loan, except that, where the Seller is required to
repurchase a Mortgage Loan, pursuant to Subsection 7.03, the Servicer’s right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase Price pursuant to Subsection
7.03, and all other amounts required to be paid to the Purchaser with respect to such Mortgage
Loan;



(c) to reimburse itself for any unpaid Servicing Fees and for unreimbursed Servicing Advances, the
Servicer’s right to reimburse itself pursuant to this subclause (c) with respect to any Mortgage
Loan being limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other amounts as may be collected by the Servicer from the Mortgagor or otherwise relating to
the Mortgage Loan, it being understood that, in the case of any such reimbursement, the Servicer’s
right thereto shall be prior to the rights of the Purchaser unless the Seller is required to
repurchase a Mortgage Loan pursuant to Subsection 7.03, or Seller is required to pay the Prepayment
Interest Shortfall pursuant to Subsection 11.15, in which case the Servicer’s right to such
reimbursement shall be subsequent to the payment to the


39









 









Purchaser of the related Repurchase Price pursuant to Subsection 7.03, or Seller is required to pay
Prepayment Interest Shortfall pursuant to Subsection 11.15, and all other amounts required to be
paid to the Purchaser with respect to such Mortgage Loan;


(d) to reimburse itself for unreimbursed Servicing Advances and for unreimbursed P&I Advances, to
the extent that such amounts are nonrecoverable (as certified by the Servicer to the Purchaser in
an Officer’s Certificate) by the Servicer pursuant to subclause (b) or (c) above, provided that the
Mortgage Loan for which such advances were made is not required to be repurchased by a Seller
pursuant to Subsection 7.03;



(e) to reimburse itself for expenses incurred by and reimbursable to it pursuant to Subsection
12.01;



(f) to withdraw amounts to make P&I Advances in accordance with Subsection 11.17;



(g) to pay to itself any interest earned or any investment earnings on funds deposited in the
Custodial Account, net of any losses on such investments;



(h) to withdraw any amounts inadvertently deposited in the Custodial Account; and



(i) to clear and terminate the Custodial Account upon the termination of this Agreement.




          Upon request, the Servicer will provide the Purchaser with copies of reasonably acceptable
invoices or other documentation relating to Servicing Advances that have been reimbursed from the
Custodial Account.




          Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow Account.




          The Servicer shall segregate and hold all funds collected and received pursuant to each
Mortgage Loan which constitute Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Escrow Accounts (collectively, the
“Escrow Account”), titled “Bank of America, National Association, in trust for RWT
Holdings, Inc. as Purchaser of Mortgage Loans and various Mortgagors.” The Escrow Account shall be
established with a commercial bank, a savings bank or a savings and loan association (which may be
a depository affiliate of Servicer), which meets the guidelines set forth by Fannie Mae or Freddie
Mac as an eligible institution for escrow accounts. The Escrow Account shall initially be
established and maintained at Bank of America, National Association, or any successor thereto, and
shall not be transferred to any other depository institution without the Purchaser’s approval,
which shall not unreasonably be withheld. In any case, the Escrow Account shall be insured by the
FDIC in a manner which shall provide maximum available insurance thereunder and which may be drawn
on by the Servicer.




          The Servicer shall deposit in the Escrow Account on a daily basis, and retain therein: (a) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose of effecting timely
payment of any such items as required under the terms of this Agreement and (b) all amounts
representing proceeds of any hazard insurance policy which are to be applied to the restoration or
repair of any Mortgaged Property. The Servicer shall make withdrawals therefrom only in accordance
with Subsection 11.07 hereof. As part of its servicing duties, the

40









 







Servicer shall pay to the Mortgagors interest on funds in the Escrow Account, to the extent
required by law.




          Subsection 11.07 Withdrawals From Escrow Account.




          Withdrawals from the Escrow Account shall be made by the Servicer only (a) to effect timely
payments of ground rents, taxes, assessments, premiums for Primary Mortgage Insurance Policies,
fire and hazard insurance premiums or other items constituting Escrow Payments for the related
Mortgage, (b) to reimburse the Servicer for any Servicing Advance made by Servicer pursuant to
Subsection 11.08 hereof with respect to a related Mortgage Loan, (c) to refund to any Mortgagor any
funds found to be in excess of the amounts required under the terms of the related Mortgage Loan,
(d) for transfer to the Custodial Account upon default of a Mortgagor or in accordance with the
terms of the related Mortgage Loan and if permitted by applicable law, (e) for application to
restore or repair of the Mortgaged Property, (f) to pay to the Mortgagor, to the extent required by
law, any interest paid on the funds deposited in the Escrow Account, (g) to pay to itself any
interest earned on funds deposited in the Escrow Account (and not required to be paid to the
Mortgagor), (h) to the extent permitted under the terms of the related Mortgage Note and applicable
law, to pay late fees with respect to any Monthly Payment which is received after the applicable
grace period, (i) to withdraw suspense payments that are deposited into the Escrow Account, (j) to
withdraw any amounts inadvertently deposited in the Escrow Account or (k) to clear and terminate
the Escrow Account upon the termination of this Agreement.




          Subsection 11.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder.




          With respect to each Mortgage Loan, the Servicer shall maintain accurate records reflecting
the status of ground rents, taxes, assessments and other charges which are or may become a lien
upon the Mortgaged Property and the status of premiums for Primary Mortgage Insurance Policies and
fire and hazard insurance coverage and shall obtain, from time to time, all bills for the payment
of such charges (including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage. To the extent that a Mortgage does not provide for Escrow
Payments, the Servicer shall determine that any such payments are made by the Mortgagor. The
Servicer assumes full responsibility for the timely payment of all such bills and shall effect
timely payments of all such bills irrespective of each Mortgagor’s faithful performance in the
payment of same or the making of the Escrow Payments and shall make Servicing Advances to effect
such payments, subject to its ability to recover such Servicing Advances pursuant to Subsections
11.05(c), 11.05(d) and 11.07(b). No costs incurred by the Servicer or subservicers in effecting
the payment of taxes and assessments on the Mortgaged Properties shall, for the purpose of
calculating remittances to the Purchaser, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so permit.




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          Subsection 11.09 Transfer of Accounts.




          The Servicer may transfer the Custodial Account or the Escrow Account to a different
depository institution. Such transfer shall be made only upon providing written notice to the
Purchaser.




          Subsection 11.10 Maintenance of Hazard Insurance.




          The Servicer shall cause to be maintained for each Mortgage Loan fire and hazard insurance
with extended coverage customary in the area where the Mortgaged Property is located by an insurer
acceptable to Fannie Mae or Freddie Mac and FHA or VA, as applicable, in an amount which is at
least equal to the lesser of (a) the full insurable value of the Mortgaged Property or (b) the
greater of (i) the outstanding principal balance owing on the Mortgage Loan and (ii) an amount such
that the proceeds of such insurance shall be sufficient to avoid the application to the Mortgagor
or loss payee of any coinsurance clause under the policy. If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as a special flood
hazard area (and such flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the National Flood Insurance
Program, in an amount representing coverage not less than the lesser of (A) the minimum amount
required under the terms of the coverage to compensate for any damage or loss to the Mortgaged
Property on a replacement-cost basis (or the outstanding principal balance of the Mortgage Loan if
replacement-cost basis is not available) or (B) the maximum amount of insurance available under the
National Flood Insurance Program. The Servicer shall also maintain on REO Property fire and hazard
insurance with extended coverage in an amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance and, to the extent
required and available under the National Flood Insurance Program, flood insurance in an amount
required above. Any amounts collected by the Servicer under any such policies (other than amounts
to be deposited in the Escrow Account and applied to the restoration or repair of the property
subject to the related Mortgage or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor in accordance with Customary Servicing Procedures) shall be deposited in
the Custodial Account, subject to withdrawal pursuant to Subsection 11.05. It is understood and
agreed that no earthquake or other additional insurance need be required by the Servicer of any
Mortgagor or maintained on REO Property other than pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional insurance. All policies
required hereunder shall be endorsed with standard mortgagee clauses with loss payable to Servicer,
and shall provide for at least thirty (30) days prior written notice of any cancellation, reduction
in amount or material change in coverage to the Servicer. The Servicer shall not interfere with
the Mortgagor’s freedom of choice in selecting either its insurance carrier or agent; provided,
however, that the Servicer shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Fannie Mae or Freddie Mac and FHA or VA, as applicable, and
are licensed to do business in the state wherein the property subject to the policy is located.




          The hazard insurance policies for each Mortgage Loan secured by a unit in a condominium
development or planned unit development shall be maintained with respect to such

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Mortgage Loan and the related development in a manner which is consistent with Fannie Mae or
Freddie Mac requirements and FHA or VA requirements, as applicable.




          Subsection 11.11 Maintenance of Primary Mortgage Insurance Policy; Claims.




          With respect to each Mortgage Loan with a LTV in excess of 80%, the Servicer shall, without
any cost to the Purchaser, maintain or cause the Mortgagor to maintain in full force and effect a
Primary Mortgage Insurance Policy insuring the portion over 78% (or such other percentage in
conformance with then current Fannie Mae requirements until terminated pursuant to the Homeowners
Protection Act of 1988, 12 USC § 4901, et seq. or any other applicable federal, state or local law
or regulation. In the event that such Primary Mortgage Insurance Policy shall be terminated other
than as required by law, the Servicer shall obtain from another insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated Primary Mortgage
Insurance Policy. If the insurer shall cease to be a qualified insurer, the Servicer shall obtain
from another qualified insurer a replacement Primary Mortgage Insurance Policy. The Servicer shall
not take any action which would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Servicer would have been covered
thereunder. In connection with any assumption or substitution agreement entered into or to be
entered into pursuant to Subsection 11.18, the Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such Primary Mortgage Insurance Policy and shall take all actions
which may be required by such insurer as a condition to the continuation of coverage under such
Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy is terminated as a
result of such assumption or substitution of liability, the Servicer shall obtain a replacement
Primary Mortgage Insurance Policy as provided above.




          In connection with its activities as servicer, the Servicer agrees to prepare and present or
to assist the Purchaser in preparing and presenting, on behalf of itself and the Purchaser, claims
to the insurer under any Primary Mortgage Insurance Policy in a timely fashion in accordance with
the terms of such Primary Mortgage Insurance Policy and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Mortgage Insurance Policy respecting a
defaulted Mortgage Loan. Pursuant to Subsection 11.06, any amounts collected by the Servicer under
any Primary Mortgage Insurance Policy shall be deposited in the Escrow Account, subject to
withdrawal pursuant to Subsection 11.07.




          Subsection 11.12 Fidelity Bond; Errors and Omissions Insurance.




          The Servicer shall maintain, at its own expense, a blanket Fidelity Bond and an errors and
omissions insurance policy, with broad coverage on all officers, employees or other persons acting
in any capacity requiring such persons to handle funds, money, documents or papers relating to the
Mortgage Loans. These policies must insure the Servicer against losses resulting from fraud,
theft, errors, omissions, negligence, dishonest or fraudulent acts committed by the Servicer’s
personnel, any employees of outside firms that provide data processing services for the Servicer,
and temporary contract employees or student interns. The Fidelity Bond shall also protect and
insure the Servicer against losses in connection with the release or satisfaction of a Mortgage
Loan without having obtained payment in full of the indebtedness secured thereby.




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No provision of this Subsection 11.12 requiring such Fidelity Bond and errors and omissions
insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such Fidelity Bond and insurance policy shall be at
least equal to the corresponding amounts required by FHA or VA, Fannie Mae in the Fannie Mae Guides
or by Freddie Mac in the Freddie Mac Guide, as amended or restated from time to time, as
applicable, or in an amount as may be permitted to the Servicer by express waiver of FHA or VA and
Fannie Mae or Freddie Mac, as applicable. Upon request of the Purchaser, the Servicer shall cause
to be delivered to the Purchaser a certified true copy of such Fidelity Bond or a certificate
evidencing the same with a statement that the Servicer shall endeavor to provide written notice to
the Purchaser thirty (30) days prior to modification or any material change.




          Subsection 11.13 Title, Management and Disposition of REO Property.




          (a) Subject to Subsection 11.02, in the event that title to the Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be taken in
the name of the Purchaser or its nominee.




          (b) The Purchaser, by giving notice to the Servicer, may elect to manage and dispose of all
REO Property acquired pursuant to this Agreement by itself. If the Purchaser so elects, the
Purchaser shall assume control of REO Property at the time of its acquisition and the Servicer
shall forward the related Mortgage File to the Purchaser as soon as is practicable. Promptly upon
assumption of control of any REO Property, the Purchaser shall reimburse any related Servicing
Advances or other expenses incurred by the Servicer with respect to that REO Property.




          (c) If the Purchaser has not informed the Servicer that it will manage REO Property, the
provisions of this Subsection 11.13(c) shall apply. The Servicer shall cause to be deposited on a
daily basis in the Custodial Account all revenues received with respect to the conservation of the
related REO Property. The Servicer shall make distributions as required on each Remittance Date to
the Purchaser of the net cash flow from the REO Property (which shall equal the revenues from such
REO Property net of the expenses described above and of any reserves reasonably required from time
to time to be maintained to satisfy anticipated liabilities for such expenses).




          The disposition of REO Property shall be carried out by the Servicer, subject to Subsection
11.01. The Purchaser shall pay the Servicer a fee of 1.5% of the sales price for such REO Property
for services associated with managing the REO Property through its disposition. Upon the request
of the Purchaser, and at the Purchaser’s expense, the Servicer shall cause an appraisal of the REO
Property to be performed for the Purchaser.




          The Servicer shall either itself or through an agent selected by the Servicer, manage,
conserve, protect and operate the REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the same manner that
similar property in the same locality as the REO Property is managed. Any disbursement in excess
of $15,000 shall be made only with the written approval of the Purchaser. The Servicer shall
deduct such costs from the proceeds of the sale of the REO Property (providing documentary evidence
of such costs) and shall not withdraw funds to cover such costs from the Custodial Account.




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          Subsection 11.14 Servicing Compensation.




          As compensation for its services hereunder and subject to Subsection 11.15, the Servicer shall
be entitled to retain the Servicing Fee from interest payments actually collected on the Mortgage
Loans. Additional servicing compensation in the form of assumption fees, late payment charges,
prepayment penalties, fees related to the disposition of REO Property and other ancillary income
shall be retained by the Servicer to the extent not required to be deposited in the Custodial
Account. The Servicer shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement therefor except as
specifically provided for herein. The Servicing Fee shall not be reduced by the amount of any
guarantee fee payable to FHA or VA.




          Subsection 11.15 Distributions.




          On each Remittance Date the Servicer shall remit by wire transfer of immediately available
funds to the account designated in writing by the Purchaser of record on the preceding Record Date
(a) all amounts credited to the Custodial Account at the close of business on the related
Determination Date, net of charges against or withdrawals from the Custodial Account pursuant to
Subsection 11.05(b) through (h), plus (b) all amounts, if any, which the Servicer is obligated to
distribute pursuant to Subsection 11.17, minus (c) any amounts attributable to Principal
Prepayments received after the end of the calendar month preceding the month in which the
Remittance Date occurs, minus (d) any amounts attributable to Monthly Payments collected but due on
a Due Date or Due Dates subsequent to the first day of the month in which the Remittance Date
occurs.




          Not later than each Remittance Date, the Seller shall from its own funds deposit in the
Custodial Account an amount equal to the aggregate Prepayment Interest Shortfall due to either
Partial Prepayment or Full Prepayment, if any, existing in respect of the related Principal
Prepayment Period.




          With respect to any remittance received by the Purchaser after the Business Day on which such
payment was due, the Servicer shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the rate of interest as is publicly announced from time to time at its
principal office by Bank of America, National Association, or its successor, as its prime lending
rate, adjusted as of the date of each change, plus two percent (2%), but in no event greater than
the maximum amount permitted by applicable law. Such interest shall be paid by the Servicer to the
Purchaser on the date such late payment is made and shall cover the period commencing with the
Business Day on which such payment was due and ending with the Business Day immediately preceding
the Business Day on which such payment is made, both inclusive. The payment by the Servicer of any
such interest shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Servicer.




          Subsection 11.16 Statements to the Purchaser.




          Not later than five (5) days prior to each related Remittance Date, the Servicer shall forward
to the Purchaser in an electronic format a statement, substantially in the form of Exhibit
5 and certified by a Servicing Officer, setting forth on a loan-by-loan basis: (a) the amount
of




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the distribution made on such Remittance Date which is allocable to principal and allocable to
interest; (b) the amount of servicing compensation received by the Servicer during the prior
calendar month; and (c) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the preceding month. Such statement shall also include information regarding delinquencies
on Mortgage Loans, indicating the number and aggregate principal amount of Mortgage Loans which are
either one (1), two (2) or three (3) or more months delinquent. The Servicer shall submit to the
Purchaser monthly a liquidation report with respect to each Mortgaged Property sold in a
foreclosure sale as of the related Record Date and not previously reported. Such liquidation
report shall be incorporated into the remittance report delivered to Purchaser in the form of
Exhibit 5 hereto. The Servicer shall also provide such information as set forth above to
the Purchaser in electronic form in the Servicer’s standard format, a copy of which has been
provided by the Servicer.




          The Servicer shall prepare and file any and all tax returns, information statements or other
filings required to be delivered to any governmental taxing authority, the Mortgagor or to the
Purchaser pursuant to any applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby. In addition, the Servicer shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for such Purchaser to prepare federal income tax
returns as the Purchaser may reasonably request from time to time.




          Subsection 11.17 Advances by the Servicer.




          On the Business Day immediately preceding each related Remittance Date, the Servicer shall
either (a) deposit in the Custodial Account from its own funds an amount equal to the aggregate
amount of all Monthly Payments (with interest adjusted to the Mortgage Loan Remittance Rate) which
were due on the Mortgage Loans during the applicable Due Period and which were delinquent at the
close of business on the immediately preceding Determination Date (each such advance, a “P&I
Advance”), (b) cause to be made an appropriate entry in the records of the Custodial Account
that amounts held for future distribution have been, as permitted by this Subsection 11.17, used by
the Servicer in discharge of any such P&I Advance or (c) make P&I Advances in the form of any
combination of (a) or (b) aggregating the total amount of advances to be made. Any amounts held
for future distribution and so used shall be replaced by the Servicer by deposit in the Custodial
Account on or before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be made on such Remittance
Date. The Servicer’s obligation to make P&I Advances as to any Mortgage Loan will continue through
the last Monthly Payment due prior to the payment in full of a Mortgage Loan, or through the last
related Remittance Date prior to the Remittance Date for the distribution of all other payments or
recoveries (including proceeds under any title, hazard or other insurance policy, or condemnation
awards) with respect to a Mortgage Loan; provided, however, that such obligation shall cease if the
Servicer, in its good faith judgment, determines that such P&I Advances would not be recoverable
pursuant to Subsection 11.05(d). The determination by the Servicer that a P&I Advance, if made,
would be nonrecoverable, shall be evidenced by an Officer’s Certificate of the Servicer, delivered
to the Purchaser, which details the reasons for such determination. The Servicer shall not have
any obligation to advance amounts in respect of shortfalls relating to the Servicemembers Civil
Relief Act and similar state and local laws.




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          Subsection 11.18 Assumption Agreements.




          The Servicer will use its best efforts to enforce any “due-on-sale” provision contained in any
Mortgage or Mortgage Note; provided that, subject to the Purchaser’s prior approval, the Servicer
shall permit such assumption if so required in accordance with the terms of the Mortgage or the
Mortgage Note. When the Mortgaged Property has been conveyed by the Mortgagor prior to payment in
full of the Mortgage Loan, the Servicer will, to the extent it has knowledge of such conveyance,
exercise its rights to accelerate the maturity of such Mortgage Loan under the “due-on-sale” clause
applicable thereto; provided, however, the Servicer will not exercise such rights if prohibited by
law from doing so or if the exercise of such rights would impair or threaten to impair any recovery
under the related Primary Mortgage Insurance Policy, if any. In connection with any such
assumption, the outstanding principal amount, the Monthly Payment, the Mortgage Interest Rate, the
Lifetime Rate Cap (if applicable), the Gross Margin (if applicable), the Initial Rate Cap (if
applicable) or the Periodic Rate Cap (if applicable) of the related Mortgage Note shall not be
changed, and the term of the Mortgage Loan will not be increased or decreased. If an assumption is
allowed pursuant to this Subsection 11.18, the Servicer with the prior consent of the issuer of the
Primary Mortgage Insurance Policy, if any, is authorized to enter into a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the original Mortgagor is
released from liability and the purchaser of the Mortgaged Property is substituted as Mortgagor and
becomes liable under the Mortgage Note.




          Subsection 11.19 Satisfaction of Mortgages and Release of Mortgage Files.




          Upon the payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for such purposes, the
Servicer will obtain the portion of the Mortgage File that is in the possession of the Purchaser or
its designee, prepare and process any required satisfaction or release of the Mortgage and notify
the Purchaser in accordance with the provisions of this Agreement. The Purchaser agrees to deliver
to the Servicer (or cause to be delivered to the Servicer) the original Mortgage Note for any
Mortgage Loan not later than five (5) Business Days following its receipt of a notice from the
Servicer that such a payment in full has been received or that a notification has been received
that such a payment in full shall be made. Such Mortgage Note shall be held by the Servicer, in
trust, for the purpose of canceling such Mortgage Note and delivering the canceled Mortgage Note to
the Mortgagor in a timely manner as and to the extent provided under any applicable federal or
state law.




          In the event the Servicer grants a satisfaction or release of a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage, the Servicer shall remit to
the Purchaser the Stated Principal Balance of the related Mortgage Loan by deposit thereof in the
Custodial Account. The Fidelity Bond shall insure the Servicer against any loss it may sustain
with respect to any Mortgage Loan not satisfied in accordance with the procedures set forth herein.




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          Subsection 11.20 Servicer Shall Provide Access and Information as Reasonably
Required.




          The Servicer shall provide to the Purchaser, and for any Purchaser insured by FDIC or NAIC,
the supervisory agents and examiners of FDIC and OTS or NAIC, access to any documentation regarding
the Mortgage Loans which may be required by applicable regulations. Such access shall be afforded
without charge, but only upon reasonable request, during normal business hours and at the offices
of the Servicer.




          In addition, the Servicer shall furnish upon request by the Purchaser, during the term of this
Agreement, such periodic, special or other reports or information, whether or not provided for
herein, as shall be necessary, reasonable and appropriate with respect to the purposes of this
Agreement and applicable regulations. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions the Purchaser may require. The Servicer
agrees to execute and deliver all such instruments and take all such action as the Purchaser, from
time to time, may reasonably request in order to effectuate the purposes and to carry out the terms
of this Agreement.




          Subsection 11.21 Inspections.




          The Servicer shall inspect the Mortgaged Property as often deemed necessary by the Servicer to
assure itself that the value of the Mortgaged Property is being preserved. In addition, if any
Mortgage Loan is more than ninety (90) days delinquent, the Servicer shall, upon written request of
the Purchaser, inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Customary Servicing Procedures or as may be required by the primary mortgage
guaranty insurer. The Servicer shall keep written report of each such inspection and shall provide
a copy of such inspection to the Purchaser upon the request of the Purchaser.




          Subsection 11.22 Restoration of Mortgaged Property.




          The Servicer need not obtain the approval of the Purchaser prior to releasing any Insurance
Proceeds or Condemnation Proceeds to the Mortgagor to be applied to the restoration or repair of
the Mortgaged Property if such release is in accordance with Customary Servicing Procedures. For
claims greater than $15,000, at a minimum, the Servicer shall comply with the following conditions
in connection with any such release of Insurance Proceeds or Condemnation Proceeds:



(a) the Servicer shall receive satisfactory independent verification of completion of repairs and
issuance of any required approvals with respect thereto;



(b) the Servicer shall take all steps necessary to preserve the priority of the lien of the
Mortgage, including, but not limited to requiring waivers with respect to mechanics’ and
materialmen’s liens;



(c) the Servicer shall verify that the Mortgage Loan is not in default; and




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(d) pending repairs or restoration, the Servicer shall place the Insurance Proceeds or Condemnation
Proceeds in the Escrow Account.




          If the Purchaser is named as an additional loss payee, the Servicer is hereby empowered to
endorse any loss draft issued in respect of such a claim in the name of the Purchaser.




          Subsection 11.23 Fair Credit Reporting Act.




          The Servicer, in its capacity as servicer for each Mortgage Loan, agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company (three of the credit repositories), on a
monthly basis.




          SECTION 12. The Servicer.




          Subsection 12.01 Indemnification; Third Party Claims.




          (a) The Servicer agrees to indemnify and hold harmless the Purchaser against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Purchaser may sustain in any way related to the failure of
the Servicer to service the Mortgage Loans in compliance with the terms of this Agreement.




          (b) The Servicer shall immediately notify the Purchaser if a claim is made by a third party
with respect to this Agreement or the Mortgage Loans, and the Servicer shall assume (with the
written consent of the Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees. If the Servicer has assumed the defense of the Purchaser, the
Servicer shall provide the Purchaser with a written report of all expenses and advances incurred by
the Servicer pursuant to this Subsection 12.01 and the Purchaser shall promptly reimburse the
Servicer for all amounts advanced by it pursuant to the preceding sentence except when the claim in
any way relates to the failure of the Servicer to service the Mortgage Loans in accordance with the
terms of this Agreement.




          Subsection 12.02 Merger or Consolidation of the Servicer.




          The Servicer will keep in full effect its existence, rights and franchises as a national
banking association, and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.




          Any Person into which the Servicer may be merged or consolidated, or any entity resulting from
any merger, conversion or consolidation to which the Servicer shall be a party, or any Person
succeeding to substantially all of the business of the Servicer (whether or not related to loan
servicing), shall be the successor of the Servicer hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.




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          Subsection 12.03 Limitation on Liability of the Servicer and Others.




          The duties and obligations of the Servicer shall be determined solely by the express
provisions of this Agreement, the Servicer shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Servicer. Neither the Servicer nor any
of the directors, officers, employees or agents of the Servicer shall be under any liability to the
Purchaser for any action taken or for refraining from the taking of any action in accordance with
Customary Servicing Procedures and otherwise in good faith pursuant to this Agreement or for errors
in judgment; provided, however, that this provision shall not protect the Servicer against any
liability resulting from any breach of any representation or warranty made herein, or from any
liability specifically imposed on the Servicer herein; and, provided further, that this provision
shall not protect the Servicer against any liability that would otherwise be imposed by reason of
the willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of the obligations or duties hereunder. The Servicer and any director, officer,
employee or agent of the Servicer may rely on any document of any kind which it in good faith
reasonably believes to be genuine and to have been adopted or signed by the proper authorities
respecting any matters arising hereunder. Subject to the terms of Subsection 12.01, the Servicer
shall have no obligation to appear with respect to, prosecute or defend any legal action which is
not incidental to the Servicer’s duty to service the Mortgage Loans in accordance with this
Agreement.




          Subsection 12.04 Seller and Servicer Not to Resign.




          Neither the Seller nor the Servicer shall assign this Agreement or resign from the obligations
and duties hereby imposed on it except by mutual consent of the Servicer or the Seller, as the case
may be, and the Purchaser or upon the determination that the Servicer’s duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by the Servicer. Any
such determination permitting the unilateral resignation of the Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser, which Opinion of Counsel shall be in
form and substance acceptable to the Purchaser. No such resignation or assignment shall become
effective until a successor has assumed the Servicer’s responsibilities and obligations hereunder
in accordance with Subsection 14.02.




          Subsection 12.05 Liability for Failure to Deliver Servicing Files.




          The Servicer shall have no liability for any failure to carry out its servicing
responsibilities hereunder which is directly caused by the failure of a prior owner of the related
Mortgage Loans to deliver to the Servicer the Servicing Files (or portions thereof) necessary to
service such Mortgage Loans in material compliance with the Customary Servicing Procedures or this
Agreement.




          SECTION 13. Default.




          Subsection 13.01 Events of Default.




          In case one or more of the following Events of Default by the Servicer shall occur and be
continuing:




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(a) any failure by the Servicer to remit to the Purchaser any payment required to be made under the
terms of this Agreement which continues unremedied for a period of two (2) Business Days after the
date upon which written notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Purchaser;



(b) failure by the Servicer to duly observe or perform, in any material respect, any other
covenants, obligations or agreements of the Servicer as set forth in this Agreement which failure
continues unremedied for a period of thirty (30) days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the Servicer by the
Purchaser;



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



(d) the Servicer shall consent to the appointment of a conservator or receiver or liquidator in any
insolvency, bankruptcy, readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or relating to all or substantially all of the
Servicer’s property;



(e) the Servicer shall admit in writing its inability to pay its debts as they become due, file a
petition to take advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations;



(f) the Servicer shall cease to be qualified to do business under the laws of any state in which a
Mortgaged Property is located, but only to the extent such qualification is necessary to ensure the
enforceability of each Mortgage Loan and to perform the Servicer’s obligations under this
Agreement; or



(g) the Servicer shall fail to meet the servicer eligibility qualifications of Fannie Mae or the
Servicer shall fail to meet the servicer eligibility qualifications of Freddie Mac;



then, and in each and every such case, so long as an Event of Default shall not have been remedied,
the Purchaser, by notice in writing to the Servicer, may, in addition to whatever rights the
Purchaser may have at law or equity to damages, including injunctive relief and specific
performance, commence termination of all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. Upon receipt by the Servicer
of such written notice from the Purchaser stating that they intend to terminate the Servicer as a
result of such Event of Default, all authority and power of the Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Subsection 14.02. Upon written request from the Purchaser, the
Servicer shall prepare, execute and deliver to a successor any and all documents and other
instruments, place in such successor’s possession all Mortgage Files and do or cause to be done all
other acts or things necessary or appropriate to effect the purposes of such notice of

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termination, including, but not limited to, the transfer and endorsement or assignment of the
Mortgage Loans and related documents to the successor at the Servicer’s sole expense. The Servicer
agrees to cooperate with the Purchaser and such successor in effecting the termination of the
Servicer’s responsibilities and rights hereunder, including, without limitation, the transfer to
such successor for administration by it of all amounts which shall at the time be credited by the
Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.




          Subsection 13.02 Waiver of Default.




          The Purchaser may waive any default by the Servicer in the performance of its obligations
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 been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto except to the extent expressly so waived.




          SECTION 14. Termination.




          Subsection 14.01 Termination.




          The respective obligations and responsibilities of the Servicer, as servicer, shall terminate
upon (a) the distribution to the Purchaser of the final payment or liquidation with respect to the
last Mortgage Loan (or advances of same by the Servicer) or (b) the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure with respect to the last Mortgage Loan and
the remittance of all funds due hereunder. Upon written request from the Purchaser in connection
with any such termination, the Servicer shall prepare, execute and deliver, any and all documents
and other instruments, place in the Purchaser’s possession all Mortgage Files, and do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans
and related documents, or otherwise, at the Purchaser’s sole expense. The Servicer agrees to
cooperate with the Purchaser and such successor in effecting the termination of the Servicer’s
responsibilities and rights hereunder as servicer, including, without limitation, the transfer to
such successor for administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.




          Subsection 14.02 Successors to the Servicer.




          Prior to the termination of the Servicer’s responsibilities and duties under this Agreement
pursuant to Subsections 12.04, 13.01 or 14.01, the Purchaser shall, (a) succeed to and assume all
of the Servicer’s responsibilities, rights, duties and obligations under this Agreement or (b)
appoint a successor which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Servicer under this Agreement upon such termination. In connection
with such appointment and assumption, the Purchaser may make such arrangements for the compensation
of such successor out of payments on Mortgage Loans as it and such successor shall agree. In the
event that the Servicer’s duties, responsibilities and liabilities under this Agreement shall be
terminated pursuant to the aforementioned Subsections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge

52









 








of such termination until the effective date thereof with the same degree of diligence and
prudence which it is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of its successor. The
resignation or removal of the Servicer pursuant to the aforementioned Subsections shall not become
effective until a successor shall be appointed pursuant to this Subsection and shall in no event
relieve the Seller of the representations and warranties made pursuant to Subsections 7.01 and 7.02
and the remedies available to the Purchaser under Subsection 7.03, it being understood and agreed
that the provisions of such Subsections 7.01 and 7.02 shall be applicable to the Seller
notwithstanding any such resignation or termination of the Servicer, or the termination of this
Agreement.




          Any successor appointed as provided herein shall execute, acknowledge and deliver to the
Servicer and to the Purchaser an instrument accepting such appointment, whereupon such successor
shall become fully vested with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or this Agreement pursuant to Subsections 12.04,
13.01 or 14.01 shall not affect any claims that the Purchaser may have against the Servicer arising
prior to any such termination or resignation.




          The Servicer shall promptly deliver to the successor the funds in the Custodial Account and
Escrow Account and all Mortgage Files and related documents and statements held by it hereunder and
the Servicer shall account for all funds and shall execute and deliver such instruments and do such
other things as may reasonably be required to more fully and definitively vest in the successor all
such rights, powers, duties, responsibilities, obligations and liabilities of the Servicer.




          Upon a successor’s acceptance of appointment as such, the Servicer shall notify by mail the
Purchaser of such appointment.




          SECTION 15. Notices.




          All demands, notices and communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed, by registered or certified mail, return receipt requested, or, if
by other means, when received by the other party at the address as follows:





	 	(a)	 	if to the Purchaser:


RWT Holdings, Inc.

One Belvedere Place, Suite 360

Mill Valley, CA 94904

Attention: Laura J. Jeffery

Phone: (415) 380-2337

Facsimile: (415) 381-1773

	 
	 	(b)	 	if to the Seller:


Bank of America, National Association





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	 	 	 	201 North Tryon Street

Charlotte, North Carolina 28255

Attention: Secondary Marketing Manager

	 
	 	(c)	 	if to the Servicer:


Bank of America, National Association

101 East Main Street, Suite 400

Louisville, Kentucky 40232

Attention: Servicing Manager




or such other address as may hereafter be furnished to the other party by like notice. Any such
demand, notice or communication hereunder shall be deemed to have been received on the date
delivered to or received at the premises of the addressee (as evidenced, in the case of registered
or certified mail, by the date noted on the return receipt).




          SECTION 16. Severability Clause.




          Any part, provision, representation or warranty of this Agreement which is prohibited or which
is held to be void or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or unenforceable or is held to be
void or unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction, to the
extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any part, provision,
representation or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in good-faith, to develop
a structure the economic effect of which is nearly as possible the same as the economic effect of
this Agreement without regard to such invalidity.




          SECTION 17. No Partnership.




          Nothing herein contained shall be deemed or construed to create a co-partnership or joint
venture between the parties hereto and the services of the Servicer shall be rendered as an
independent contractor and not as agent for the Purchaser.




          SECTION 18. Counterparts.




          This Agreement may be executed simultaneously in any number of counterparts. Each counterpart
shall be deemed to be an original, and all such counterparts shall constitute one and the same
instrument.




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          SECTION 19. Governing Law.




          EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW, THE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PROVISIONS OF NEW YORK OR ANY OTHER JURISDICTION.




          SECTION 20. Intention of the Parties.




          It is the intention of the parties that the Purchaser is purchasing, and the Seller is
selling, the Mortgage Loans and not a debt instrument of the Seller or another security.
Accordingly, the parties hereto each intend to treat the transaction for federal income tax
purposes as a sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related Mortgage Files to
determine the characteristics of the Mortgage Loans which shall affect the federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with all reasonable
requests made by the Purchaser in the course of such review.




          It is not the intention of the parties that such conveyances be deemed a pledge thereof.
However, in the event that, notwithstanding the intent of the parties, such assets are held to be
the property of the Seller or if for any other reason this Agreement is held or deemed to create a
security interest in either such assets, then (a) this Agreement shall be deemed to be a security
agreement within the meaning of the Uniform Commercial Code of the State of New York and (b) the
conveyances provided for in this Agreement shall be deemed to be an assignment and a grant by the
Seller to the Purchaser of a security interest in all of the assets transferred, whether now owned
or hereafter acquired.




          SECTION 21. Waivers.




          No term or provision of this Agreement may be waived or modified unless such waiver or
modification is in writing and signed by the party against whom such waiver or modification is
sought to be enforced.




          SECTION 22. Exhibits.




          The exhibits to this Agreement are hereby incorporated and made a part hereof and are an
integral part of this Agreement.




          SECTION 23. General Interpretive Principles.




          For purposes of this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:




55









 








(a) the terms defined in this Agreement have the meanings assigned to them in this Agreement and
include the plural as well as the singular, and the use of any gender herein shall be deemed to
include the other gender;



(b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance
with generally accepted accounting principles;



(c) references herein to “Articles,” “Sections,” “Subsections,” “Paragraphs” and other subdivisions
without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and
other subdivisions of this Agreement;



(d) reference to a Subsection without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference appears, and this rule shall
also apply to Paragraphs and other subdivisions;



(e) the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and



(f) the term “include” or “including” shall mean without limitation by reason of enumeration.




          SECTION 24. Reproduction of Documents.




          This Agreement and all documents relating thereto, including, without limitation (a) consents,
waivers and modifications which may hereafter be executed, (b) documents received by any party at
the closing and (c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process. The parties hereto agree that any such
reproduction shall be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party hereto in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in
evidence.




          SECTION 25. Amendment.




          This Agreement may be amended from time to time by the Purchaser, the Seller and the Servicer
by written agreement signed by the parties hereto.




          SECTION 26. Confidentiality.




          Each of the Purchaser, the Seller and the Servicer shall employ proper procedures and
standards designed to maintain the confidential nature of the terms of this Agreement, except to
the extent (a) the disclosure of which is reasonably believed by such party to be required in
connection with regulatory requirements or other legal requirements relating to its affairs; (b)
disclosed to any one or more of such party’s employees, officers, directors, agents, attorneys

56










 




or accountants who would have access to the contents of this Agreement and such data and
information in the normal course of the performance of such person’s duties for such party, to the
extent such party has procedures in effect to inform such person of the confidential nature
thereof; (c) that is disclosed in a prospectus, prospectus supplement or private placement
memorandum relating to a Securitization Transaction of the Mortgage Loans by the Purchaser (or an
affiliate assignee thereof) or to any person in connection with the resale or proposed resale of
all or a portion of the Mortgage Loans by such party in accordance with the terms of this
Agreement; and (d) that is reasonably believed by such party to be necessary for the enforcement of
such party’s rights under this Agreement.




     SECTION 27. Entire Agreement.



     This Agreement constitutes the entire agreement and understanding relating to the subject
matter hereof between the parties hereto and any prior oral or written agreements between them
shall be deemed to have merged herewith.



     SECTION 28. Further Agreements.



     The Seller, the Servicer and the Purchaser each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.



     SECTION 29. Successors and Assigns.



     This Agreement shall bind and inure to the benefit of and be enforceable by the initial
Purchaser, the Seller and the Servicer, and the respective successors and assigns of the Purchaser,
the Seller and the Servicer. The initial Purchaser and any subsequent purchasers may assign this
Agreement to any Person to whom any Mortgage Loan is transferred pursuant to a sale or financing
upon prior written notice to the Servicer in accordance with the following paragraph; provided,
however, that except in connection with Securitizations, as to which no such quantitative
limitation shall apply, the Servicer shall not be required to service the Mortgage Loans for more
than three (3) Persons for assignees of RWT Holdings, Inc. or its respective affiliates at any time
and shall not recognize any assignment of this Agreement to the extent that following such
assignment more than such number of Persons would be purchasers hereunder. As used herein, the
trust formed in connection with a Securitization shall be deemed to constitute a single “Person.”
Upon any such assignment and written notice thereof to the Servicer, the Person to whom such
assignment is made shall succeed to all rights and obligations of the Purchaser under this
Agreement to the extent of the related Mortgage Loan or Mortgage Loans and this Agreement, to the
extent of the related Mortgage Loan or Mortgage Loans, shall be deemed to be a separate and
distinct agreement between the Servicer and such purchaser, and a separate and distinct agreement
between the Servicer and each other purchaser to the extent of the other related Mortgage Loan or
Mortgage Loans.



     At least five (5) Business Days prior to the end of the month preceding the date upon which
the first remittance is to be made to an assignee of the Purchaser, the Purchaser shall provide to
the Servicer written notice of any assignment setting forth: (a) the Servicer’s applicable
Mortgage Loan identifying number for each of the Mortgage Loans affected by such



57









 




assignment; (b) the aggregate scheduled transfer balance of such Mortgage Loans; and (c) the
full name, address and wiring instructions of the assignee and the name and telephone number of an
individual representative for such assignee, to whom the Servicer should: (i) send remittances;
(ii) send any notices required by or provided for in this Agreement; and (iii) deliver any legal
documents relating to the Mortgage Loans (including, but not limited to, contents of any Mortgage
File obtained after the effective date of any assignment).




     If the Purchaser has not provided the notice of assignment required by this Section 29, the
Servicer shall not be required to treat any other Person as a “Purchaser” hereunder and may
continue to treat the Purchaser which purports to assign the Agreement as the “Purchaser” for all
purposes of this Agreement.



     SECTION 30. Non-Solicitation.



     From and after the Closing Date, the Seller, the Servicer and any of their respective
affiliates hereby agrees that it will not take any action or permit or cause any action to be taken
by any of its agents or affiliates, or by any independent contractors on its behalf, to personally,
by telephone or mail, solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the Purchaser. It is
understood and agreed that all rights and benefits relating to the solicitation of any Mortgagors
and the attendant rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be transferred to the
Purchaser pursuant hereto on the Closing Date and none of the Seller, the Servicer or any of their
respective affiliates shall take any action to undermine these rights and benefits.



     Notwithstanding the foregoing, it is understood and agreed that the Seller, the Servicer or
any of their respective affiliates:


(a) may advertise its availability for handling refinancings of mortgages in its portfolio,
including the promotion of terms it has available for such refinancings, through the sending of
letters or promotional material, so long as it does not specifically target Mortgagors and so long
as such promotional material either is sent to the mortgagors for all of the mortgages in the
A-quality servicing portfolio of the Seller, the Servicer and any of their affiliates (those it
owns as well as those serviced for others) or sent to all of the mortgagors who have specific types
of mortgages (such as FHA, VA, conventional fixed-rate or conventional adjustable-rate, or sent to
those mortgagors whose mortgages fall within specific interest rate ranges;



(b) may provide pay-off information and otherwise cooperate with individual mortgagors who contact
it about prepaying their mortgages by advising them of refinancing terms and streamlined
origination arrangements that are available; and



(c) may offer to refinance a Mortgage Loan made within thirty (30) days following receipt by it of
a pay-off request from the related Mortgagor.




58









 








     Promotions undertaken by the Seller or the Servicer or by any affiliate of the Seller or the
Servicer which are directed to the general public at large (including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and television
advertisements), shall not constitute solicitation under this Section 30.



     SECTION 31. Protection of Consumer Information.



     Each party agrees that it (i) shall comply with any applicable laws and regulations regarding
the privacy and security of Consumer Information, (ii) shall not use Consumer Information in any
manner inconsistent with any applicable laws and regulations regarding the privacy and security of
Consumer Information, (iii) shall not disclose Consumer Information to third parties except at the
specific written direction of the Seller or the Servicer, (iv) shall maintain adequate physical,
technical and administrative safeguards to protect Consumer Information from unauthorized access
and (v) shall immediately notify the Seller of any actual or suspected breach of the
confidentiality of Consumer Information.



     SECTION 32. Cooperation of the Company with a Reconstitution; Regulation AB
Compliance.



     The Seller acknowledges and the Purchaser agrees that with respect to some or all of the
Mortgage Loans, the Purchaser may effect either:



     (1) one or more Whole Loan Transfers; and



     (2) one or more Securitizations;



     provided, however, that no more than three (3) persons shall be assignees of the Purchaser’s
interest in this Agreement with respect to a given Mortgage Loan Package.



     The Seller shall cooperate with the Purchaser in connection with any Whole Loan Transfer
contemplated by the Purchaser pursuant to this Section. In connection therewith, the Purchaser
shall deliver any Reconstitution Agreement or other document related to the Whole Loan Transfer to
the Seller at least fifteen (15) days prior to such transfer and the Seller shall execute any
Reconstitution Agreement which contains servicing provisions substantially similar to those herein
or otherwise reasonably acceptable to the Purchaser and the Seller and which restates the
representations and warranties contained in Subsection 7.01 as of the related Closing Date (except
to the extent any such representation or warranty is not accurate on such date) and Subsection 7.02
herein as of the Reconstitution Date. Any prospective assignees of the Purchaser who have entered
into a commitment to purchase any of the Mortgage Loans in a Whole Loan Transfer may review and
underwrite the Seller’s servicing and origination operations, upon reasonable prior notice to the
Seller, and the Seller shall cooperate with such review and underwriting to the extent such
prospective assignees request information or documents that are available and can be produced
without unreasonable expense or effort. Subject to any applicable laws, the Seller shall make the
Mortgage Files related to the Mortgage Loans held by the Seller available at the Seller’s principal
operations center for review by any such prospective assignees during normal business hours upon
reasonable prior notice to the Seller (in no event fewer than five (5) Business Days’ prior
notice). The Seller may, in its sole



59









 




discretion, require that such prospective assignees sign a confidentiality agreement with
respect to such information disclosed to the prospective assignee which is not available to the
public at large and a release agreement with respect to its activities on the Seller’s premises.
The Purchaser hereby agrees to reimburse the Seller for reasonable “out-of-pocket” expenses
incurred by the Seller that relate to such Whole Loan Transfer, including without limitation
reimbursement for the amount which reasonably reflects time and effort expended by the Seller in
connection therewith.




     In order to facilitate compliance with Regulation AB promulgated under the Securities Act, the
Servicer and the Purchaser agree to comply with the provisions of the Regulation AB Compliance
Addendum attached hereto as Addendum I. All Mortgage Loans not sold or transferred
pursuant to a Whole Loan Transfer or Securitization shall be subject to this Agreement and shall
continue to be serviced in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect. It is understood and agreed by the Purchaser
and the Servicer that the right to effectuate such Whole Loan Transfer or Securitization as
contemplated by this Section 32 is limited to the Purchaser.



[SIGNATURES ON FOLLOWING PAGE]




60









 





     IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their
respective officers thereunto duly authorized on the date first above written.



RWT HOLDINGS, INC.,

as Purchaser




By:                                                                

Name:

Title:




BANK OF AMERICA, NATIONAL ASSOCIATION,

as Seller and as Servicer




By:                                                                

Name:

Title:




[Flow Mortgage Loan Sale and Servicing Agreement, dated July 1, 2006]




 









 





EXHIBIT 1




MORTGAGE LOAN DOCUMENTS



With respect to each Mortgage Loan, the Mortgage Loan Documents shall consist of the following:





     (a) the original Mortgage Note bearing all intervening endorsements, endorsed in blank
and signed in the name of the Seller by an officer thereof or, if the original Mortgage Note
has been lost or destroyed, a lost note affidavit;


(a) the original Assignment of Mortgage with assignee’s name left blank;



(b) the original of any guarantee executed in connection with the Mortgage Note;



(c) the original Mortgage with evidence of recording thereon, or if any such mortgage has not been
returned from the applicable recording office or has been lost, or if such public recording office
retains the original recorded mortgage, a photocopy of such mortgage certified by the Seller to be
a true and complete copy of the original recorded mortgage;



(d) the originals of all assumption, modification, consolidation or extension agreements, if any,
with evidence of recording thereon;



(e) the originals of all intervening assignments of mortgage with evidence of recording thereon, or
if any such intervening assignment of mortgage has not been returned from the applicable recording
office or has been lost or if such public recording office retains the original recorded
assignments of mortgage, a photocopy of such intervening assignment of mortgage, certified by the
Seller to be a true and complete copy of the original recorded intervening assignment of mortgage;



(f) the original mortgagee title insurance policy including an Environmental Protection Agency
Endorsement and, with respect to any Adjustable Rate Mortgage Loan, an adjustable-rate endorsement;



(g) the original of any security agreement, chattel mortgage or equivalent document executed in
connection with the Mortgage; and



(h) a copy of any applicable power of attorney.



1-1




 









 





EXHIBIT 2




CONTENTS OF EACH MORTGAGE FILE




     With respect to each Mortgage Loan, the Mortgage File shall include each of the following
items, unless otherwise disclosed to the Purchaser on the data tape, which shall be available for
inspection by the Purchaser and which shall be retained by the Servicer or delivered to the
Purchaser:



          (a) Copies of the Mortgage Loan Documents.



(i) Residential loan application.



(j) Mortgage Loan closing statement.



(k) Verification of employment and income, if required.



(l) Verification of acceptable evidence of source and amount of down payment.



(m) Credit report on Mortgagor, in a form acceptable to either Fannie Mae or Freddie Mac.



(n) Residential appraisal report.



(o) Photograph of the Mortgaged Property.



(p) Survey of the Mortgaged Property, unless a survey is not required by the title insurer.



(q) Copy of each instrument necessary to complete identification of any exception set forth in the
exception schedule in the title policy, i.e., map or plat, restrictions, easements, home owner
association declarations, etc.



(r) Copies of all required disclosure statements.



(s) If applicable, termite report, structural engineer’s report, water potability and septic
certification.



(t) Sales contract, if applicable.



(u) The Primary Mortgage Insurance policy or certificate of insurance or electronic notation of the
existence of such policy, where required pursuant to the Agreement.



(v) Evidence of electronic notation of the hazard insurance policy, and, if required by law,
evidence of the flood insurance policy.



2-1




 









 





EXHIBIT 3




UNDERWRITING GUIDELINES




[ON FILE WITH THE PURCHASER]



3-1




 









 





EXHIBIT 4




[Reserved]



4-1




 









 





EXHIBIT 5




FORM OF MONTHLY REMITTANCE REPORT



5-1




 









 





EXHIBIT 6




FORM OF TERM SHEET




          CLOSING DATE:                                         




     This Term Sheet (this “Term Sheet”), dated as of                      (the “Closing Date”), confirms the
sale by Bank of America, National Association (the “Seller”) to RWT Holdings, Inc. (the
“Purchaser”), and the purchase by the Purchaser from the Seller, of the first lien residential
mortgage loans on a servicing retained basis described on the Mortgage Loan Schedule attached as
Schedule I hereto (the “Mortgage Loans”), pursuant to the terms of the Flow Mortgage Loan Sale and
Servicing Agreement (the “Flow Sale and Servicing Agreement”), dated as of July 1, 2006, by and
between the Purchaser and the Seller. Capitalized terms that are used herein but are not defined
herein shall have the respective meanings set forth in the Flow Sale and Servicing Agreement.



     For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Seller does hereby bargain, sell, convey, assign and transfer to Purchaser
without recourse, except as provided in the Flow Sale and Servicing Agreement, and on a servicing
retained basis, all right, title and interest of the Seller in and to each of the Mortgage Loans,
together with all documents maintained as part of the related Mortgage Files, all Mortgaged
Properties which secure any Mortgage Loan but are acquired by foreclosure, deed in lieu of
foreclosure after the Cut-off Date or otherwise, all payments of principal and interest received on
the Mortgage Loans after the Cut-off Date, all other unscheduled collections collected in respect
of the Mortgage Loans after the Cut-off Date, and all proceeds of the foregoing, subject, however,
to the rights of the Seller under the Flow Sale and Servicing Agreement.



     The Seller has delivered to the Purchaser or its designee prior to the date hereof the
documents with respect to each Mortgage Loan required to be delivered under the Flow Sale and
Servicing Agreement.



     For purposes of the Mortgage Loans sold pursuant to this Term Sheet, certain terms shall be as
set forth below:



	 	 	 	 	 	 	 	 	 
	Stated Principal Balance:

	 	 	$	 	 
 

	 	 
	Closing Date:

	 	 	 	 	 
 

	 	 
	Transfer Date:

	 	 	 	 	 
 

	 	 
	Cut-off Date:

	 	 	 	 	 
 

	 	 
	Purchase Price Percentage: 

	 	 	 	 	                                        %	 	 
	Servicing Fee Rate:

	 	 	 	 	                                        %	 	 





I-1




 









 





     In WITNESS WHEREOF, the parties hereto, by the hands of their duly authorized officers,
execute this Term Sheet as of the Closing Date referred to above.



	 	 	 	 	 	 	 	 	 
	RWT HOLDINGS, INC.	 	 	 	BANK OF AMERICA, NATIONAL ASSOCIATION
	as Purchaser	 	 	 	as Seller
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	Its:

	 	 	 	 	 	Its:	 	 
	 

	 	 
	 	 	 	 	 	 




6-2




 









 





ADDENDUM I




REGULATION AB COMPLIANCE ADDENDUM




TO FLOW SALE AND SERVICING AGREEMENT




(Servicing-retained)




     SECTION 1. DEFINED TERMS



     Capitalized terms used but not defined herein shall have the meanings assigned to such terms
in the Agreement. The following terms shall have the meanings set forth below, unless the context
clearly indicates otherwise:



     Commission: The United States Securities and Exchange Commission.



     Company Information: As defined in Section 2.07(a).



     Depositor: The depositor, as such term is defined in Regulation AB, with respect to
any Securitization Transaction.



     Exchange Act: The Securities Exchange Act of 1934, as amended.



     Master Servicer: With respect to any Securitization Transaction, the “master
servicer,” if any, identified in the related transaction documents.



     Qualified Correspondent: Any Person from which the Company purchased Mortgage Loans,
provided that this term shall not include the Purchaser or an affiliate of the Purchaser and
provided further that the following conditions are satisfied: (i) such Mortgage Loans were
originated pursuant to an agreement between the Company and such Person that contemplated that such
Person would underwrite mortgage loans from time to time, for sale to the Company, in accordance
with underwriting guidelines designated by the Company (“Designated Guidelines”) or guidelines that
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans were in fact
underwritten as described in clause (i) above and were acquired by the Company within 180 days
after origination; (iii) either (x) the Designated Guidelines were, at the time such Mortgage Loans
were originated, used by the Company in origination of mortgage loans of the same type as the
Mortgage Loans for the Company’s own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Company on a consistent basis for use by
lenders in originating mortgage loans to be purchased by the Company; and (iv) the Company
employed, at the time such Mortgage Loans were acquired by the Company, pre-purchase or
post-purchase quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through particular channels)
designed to ensure that Persons from which it purchased mortgage loans properly applied the
underwriting criteria designated by the Company.



I-1









 





     Reconstitution Agreement: The agreement or agreements entered into by the Company and
the Purchaser and/or certain third parties on the Reconstitution Date or Dates with respect to any
or all of the Mortgage Loans serviced hereunder, in connection with a Whole Loan Transfer or
Securitization Transaction.



     Regulation AB: Subpart 229.1100 — Asset Backed Securities (Rgulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification
and interpretation as have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Releast No. 33-8518, 70 Fed. Reg. 1,505, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff from time to time.



     Securities Act: The Securities Act of 1933, as amended.



     Securitization Transaction: Any transaction involving either (1) a sale or other
transfer of some or all of the Mortgage Loans directly or indirectly by the Purchaser to an issuing
entity in connection with an issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately placed, rated or
unrated securities, the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of some or all of the
Mortgage Loans.



     Servicer: As defined in Section 2.03(c).



     Servicing Criteria: The “servicing criteria” set forth in Item 1122(d) of Regulation
AB for which the Company is responsible in its capacity as Servicer as identified on Exhibit B
hereto, provided that such Exhibit B may be amended from time to time to reflect changes in
Regulation AB.



     Sponsor: With respect to any Securitization Transaction, the Person identified in
writing to the Company by the Purchaser as sponsor for such Securitization Transaction.



     Static Pool Information: Static pool information as described in Item 1l05(a)(l)-(3)
and 1105(c) of Regulation AB.



     Subcontractor: Any vendor, subcontractor or other Person that is not responsible for
the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed
securities market) of Mortgage Loans but performs one or more discrete functions identified in Item
l122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer, provided that this term shall not include the Purchaser, an affiliate of
the Purchaser or originators of Mortgage Loans acquired by the Company from the Purchaser or an
affiliate of the Purchaser.



     Subservicer: Any Person that services Mortgage Loans on behalf of the Company or any
Subservicer and is responsible for the performance (whether directly or through Subservicers or
Subcontractors) of a substantial portion of the material servicing functions identified in Item
1122(d) of Regulation AB that are required to be performed by the Company under this



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Agreement
or any Reconstitution Agreement, provided that this term shall not include the Purchaser, an
affiliate of the Purchaser or originators of Mortgage Loans acquired by the Company from the
Purchaser or an affiliate of the Purchaser.




     Third-Party Originator: Each Person, other than a Qualified Correspondent, that
originated Mortgage Loans acquired by the Company, provided that this term shall not include
originators of Mortgage Loans acquired by the Company from the Purchaser or an affiliate of the
Purchaser.



     Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage Loans
(including an Agency Transfer), other than a Securitization Transaction.



     SECTION 2. COMPLIANCE WITH REGULATION AB



     Subsection 2.01 Intent of the Parties; Reasonableness.



     The Purchaser and the Company acknowledge and agree that the purpose of this Reg AB Addendum
is to facilitate compliance by the Purchaser and any Depositor with the provisions of Regulation AB
and related rules and regulations of the Commission and that the provisions of this Reg AB Addendum
shall be applicable to all Mortgage Loans included in a Securitization Transaction closing on or
after January 1, 2006, regardless whether the Mortgage Loans were purchased by the Purchaser from
the Company prior to the date hereof. Although Regulation AB is applicable by its terms only to
offerings of asset-backed securities that are registered under the Securities Act, the Company
acknowledges that investors in privately offered securities may require that the Purchaser or any
Depositor provide comparable disclosure in unregistered offerings. References in this Reg AB
Addendum to compliance with Regulation AB include provision of comparable disclosure in private
offerings.



     Neither the Purchaser nor any Depositor shall exercise its right to request delivery of
information or other performance under these provisions other than in good faith, or for purposes
other than compliance with the Securities Act, the Exchange Act and the rules and regulations of
the Commission thereunder (or the provision in a private offering of disclosure comparable to that
required under the Securities Act). The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive guidance provided
by the Commission or its staff, consensus among participants in the asset-backed securities
markets, advice of counsel, or otherwise, and agrees to comply with reasonable requests made by the
Purchaser, any Master Servicer or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In connection with any
Securitization Transaction, the Company shall cooperate fully with the Purchaser and any Master
Servicer to deliver to the Purchaser (including any of its assignees or designees) and one of any
Master Servicer or any Depositor (as requested), any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of the Purchaser or any
Depositor to permit the Purchaser, such Master Servicer or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the Company, any
Subservicer, any Third-Party Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans, reasonably believed by the Purchaser, the Master
Servicer or any Depositor to be necessary in order to effect such compliance.



I-3









 





     The Purchaser and the Company also acknowledge and agree that Section 2.02(a)(i)-(v), Section
2.03(c), (e) and (f), Section 2.04, Section 2.05 and Section 2.06 of this Reg AB Addendum shall
only be applicable with respect to any Mortgage Loan if the Company (or Subservicer, if any)
services such Mortgage Loan for a period following the closing date of a related Securitization
Transaction.



     For purposes of this Reg AB Addendum, the term “Purchaser” shall refer to RWT Holdings, Inc.
and its successors in interest and assigns. In addition, any notice or request that must be “in
writing” or “written” may be made by electronic mail.



     Subsection 2.02 Additional Representations and Warranties of the Company. 



     (a) The Company shall be deemed to represent to the Purchaser, to any Master Servicer and to
any Depositor, as of the date on which information is first provided to the Purchaser, any Master
Servicer or any Depositor under Section 2.03 that, except as disclosed in writing to the Purchaser,
such Master Servicer or such Depositor prior to such date: (i) the Company is not aware and has not
received notice that any default, early amortization or other performance triggering event with
respect to the Company has occurred as to any other securitization due to any act or failure to act
of the Company; (ii) the Company has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a servicing performance test
or trigger; (iii) no material noncompliance with the Servicing Criteria with respect to other
securitizations of residential mortgage loans involving the Company as servicer has been disclosed
or reported by the Company; (iv) no material changes to the Company’s policies or procedures with
respect to the servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have occurred during the
three-year period immediately preceding the related Securitization Transaction; (v) there are no
aspects of the Company’s financial condition that are reasonably expected to have a material
adverse effect on the performance by the Company of its servicing obligations under this Agreement
or any Reconstitution Agreement; (vi) there are no material legal or governmental proceedings
pending (or known to be contemplated) against the Company, any Subservicer or any Third-Party
Originator; and (vii) there are no affiliations, relationships or transactions relating to the
Company, any Subservicer or any Third-Party Originator with respect to any Securitization
Transaction and any party thereto identified in writing to the Company by the related Depositor of
a type described in Item 1119 of Regulation AB.



     (b) If so requested in writing by the Purchaser, any Master Servicer or any Depositor on any
date following the date on which information is first provided to the Purchaser, any Master
Servicer or any Depositor under Section 2.03, the Company shall use its best efforts to confirm in
writing within five (5) Business Days, but in no event later than ten (10) Business Days, following
such request the accuracy of the representations and warranties set forth in paragraph (a) of this
Section or, if any such representation and warranty is not accurate as of the date of such request,
provide within five (5) Business Days, but in no event later than ten (10)
Business Days, reasonably adequate disclosure of the pertinent facts, in writing, to the
requesting party.



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     Subsection 2.03 Information to Be Provided by the Company. 



     In connection with any Securitization Transaction, the Company shall use its best efforts to
(i) within five (5) Business Days, but in no event later than ten (10) Business Days, following
written request by the Purchaser or any Depositor, provide to the Purchaser and such Depositor (or,
as applicable, cause each Third-Party Originator and each Subservicer to provide), in writing and
in form and substance reasonably satisfactory to the Purchaser and such Depositor, the information
and materials specified in paragraphs (a), (b), (c) and (f) of this Section, and (ii) as promptly
as practicable following notice to or discovery by the Company, provide to the Purchaser and any
Depositor (in writing and in form and substance reasonably satisfactory to the Purchaser and such
Depositor) the information specified in paragraph (d) of this Section.



     (a) If so requested in writing by the Purchaser or any Depositor, the Company shall provide
such information regarding (i) the Company, as originator of the Mortgage Loans (including as an
acquirer of Mortgage Loans from a Qualified Correspondent), or (ii) each Third-Party Originator,
and (iii) as applicable, each Subservicer, as is requested for the purpose of compliance with Items
1103(a)(l), 1105, 1110, 1117 and 1119 of Regulation AB. Such information shall include, at a
minimum:




     (A) the originator’s form of organization;




     (B) a description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description shall include
a discussion of the originator’s experience in originating mortgage loans of a similar type
as the Mortgage Loans; information regarding the size and composition of the originator’s
origination portfolio; and information that may be material, in the good faith judgment of
the Purchaser or any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage loans of
similar type(s) as the Mortgage Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance with Item 1110(b)(2) of
Regulation AB;




     (C) a description of any legal or governmental proceedings pending (or known to be
contemplated) against the Company, each Third-Party Originator and each Subservicer that
would be material to securityholders; and




     (D) a description of any affiliation or relationship between the Company, each
Third-Party Originator, each Subservicer and any of the following parties to a
Securitization Transaction, as such parties are identified to the Company by the Purchaser
or any Depositor in writing in advance of such Securitization Transaction:




	 	(1)	 	the sponsor;
	 
	 	(2)	 	the depositor;
	 
	 	(3)	 	the issuing entity;
	 
	 	(4)	 	any servicer;
	 
	 	(5)	 	any trustee;
	 
	 	(6)	 	any originator;
	 
	 	(7)	 	any significant obligor;
	 
	 	(8)	 	any enhancement or support provider; and





I-5









 





	 	(9)	 	any other material transaction party.





     (b) If so requested in writing by the Purchaser or any Depositor, the Company shall provide
(or, as applicable, cause each Third-Party Originator to provide) Static Pool Information solely
with respect to securitized pools of mortgage loans (of a similar type as the Mortgage Loans, as
reasonably identified by the Purchaser as provided below) that were included in securitizations
that closed during the five (5) years preceding the closing date of the related Securitization
Transaction and for which Banc of America Mortgage Securities, Inc. was the depositor. Such Static
Pool Information shall be prepared by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(3) of Regulation AB. To
the extent that there is reasonably available to the Company (or Third-Party Originator) Static
Pool Information with respect to more than one mortgage loan type, the Purchaser or any Depositor
shall be entitled to specify whether some or all of such information shall be provided pursuant to
this paragraph. The content of such Static Pool Information may be in the form customarily
provided by the Company, and need not be customized for the Purchaser or any Depositor. Such
Static Pool Information for each prior securitized pool shall be presented in increments no less
frequently than quarterly over the life of the mortgage loans included in such prior securitized
pool. The most recent periodic increment must be as of a date no later than 135 days prior to the
date of the prospectus or other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information shall be provided in an
electronic format that provides a permanent record of the information provided, such as a portable
document format (pdf) file, or other such electronic format reasonably required by the Purchaser or
the Depositor, as applicable.



     Promptly following notice or discovery of a material error in Static Pool Information provided
pursuant to the immediately preceding paragraph (including an omission to include therein
information required to be provided pursuant to such paragraph) during the applicable offering
period for the securities, the Company shall provide corrected Static Pool Information to the
Purchaser or any Depositor, as applicable, in the same format in which Static Pool Information was
previously provided to such party by the Company.



     If so requested in writing by the Purchaser or any Depositor, the Company shall provide (or,
as applicable, cause each Third-Party Originator to provide), at the expense of the requesting
party (to the extent of any additional incremental expense associated with delivery pursuant to
this Reg AB Addendum), such statements and agreed-upon procedures letters of certified public
accountants reasonably acceptable to the Purchaser or Depositor, as applicable, pertaining to
Static Pool Information relating to securitizations closed on or after January 1, 2006, as the
Purchaser or such Depositor shall reasonably request. Such statements and letters shall be
addressed to and be for the benefit of such parties as the Purchaser or such Depositor shall
designate, which may include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to a Securitization
Transaction. Any such statement or letter may take the form of a standard, generally
applicable document accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.



I-6









 





     (c) If so requested in writing by the Purchaser or any Depositor, the Company shall provide
such information regarding the Company, as servicer of the Mortgage Loans, and each Subservicer
(each of the Company and each Subservicer, for purposes of this paragraph, a “Servicer”), as is
requested for the purpose of compliance with Item 1108, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:




     (A) the Servicer’s form of organization;




     (B) a description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of any type as
well as a more detailed discussion of the Servicer’s experience in, and procedures for, the
servicing function it will perform under the Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the Servicer’s portfolio of
residential mortgage loans of a type similar to the Mortgage Loans and information on
factors related to the Servicer that may be material, in the good faith judgment of the
Purchaser or any Depositor, to any analysis of the servicing of the Mortgage Loans or the
related asset-backed securities, as applicable, including, without limitation:




     (1) whether any prior securitizations of mortgage loans of a type similar to
the Mortgage Loans involving the Servicer have defaulted or experienced an early
amortization or other performance triggering event because of servicing by the
Servicer during the three-year period immediately preceding the related
Securitization Transaction;




     (2) the extent of outsourcing the Servicer utilizes;




     (3) whether there has been previous disclosure of material noncompliance with
the applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Servicer as a servicer during the
three-year period immediately preceding the related Securitization Transaction;




     (4) whether the Servicer has been terminated as servicer in a residential
mortgage loan securitization, either due to a servicing default or to application of
a servicing performance test or trigger; and




     (5) such other information as the Purchaser or any Depositor may reasonably
request for the purpose of compliance with Item 1108(b)(2) of Regulation AB;




     (C) a description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Servicer’s policies or procedures
with respect to the servicing function it will perform under the Agreement and
any Reconstitution Agreements for mortgage loans of a type similar to the Mortgage
Loans;




     (D) information regarding the Servicer’s financial condition, to the extent that there
is a material risk that an adverse financial event or circumstance involving the Servicer
could have a material adverse effect on the performance by the Company of its servicing
obligations under the Agreement or any Reconstitution Agreement;



I-7









 






     (E) information regarding advances made by the Servicer on the Mortgage Loans and the
Servicer’s overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization Transaction, which may be limited to
a statement by an authorized officer of the Servicer to the effect that the Servicer has
made all advances required to be made on residential mortgage loans serviced by it during
such period, or, if such statement would not be accurate, information regarding the
percentage and type of advances not made as required, and the reasons for such failure to
advance;




     (F) a description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type as the Mortgage
Loans;




     (G) a description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged properties, sale of
defaulted mortgage loans or workouts; and




     (H) information as to how the Servicer defines or determines delinquencies and
charge-offs, including the effect of any grace period, re-aging, restructuring, partial
payments considered current or other practices with respect to delinquency and loss
experience.




     (I) a description of any legal or governmental proceedings pending (or known to be
contemplated) against the Servicer that would be material to securityholders; and




     (J) a description of any affiliation or relationship between the Servicer and any of
the following parties to a Securitization Transaction, as such parties are identified to the
Servicer by the Purchaser or any Depositor in writing in advance of a Securitization
Transaction.




	 	(1)	 	the sponsor;
	 
	 	(2)	 	the depositor;
	 
	 	(3)	 	the issuing entity;
	 
	 	(4)	 	any servicer;
	 
	 	(5)	 	any trustee;
	 
	 	(6)	 	any originator;
	 
	 	(7)	 	any significant obligor;
	 
	 	(8)	 	any enhancement or support provider; and
	 
	 	(9)	 	any other material transaction party.





     (d) For the purpose of satisfying its reporting obligation under the Exchange Act with respect
to any class of asset-backed securities, for so long as the Depositor is required to file reports
under the Exchange Act with respect to a Securitization Transaction, the Company shall (or shall
cause each Subservicer and Third-Party Originator to) (i) provide prompt notice to the Purchaser,
any Master Servicer and any Depositor in writing of (A) any litigation or governmental proceedings
pending against the Company, any Subservicer or any Third-Party



I-8









 




Originator that would be material
to securityholders and (B) any affiliations or relationships that develop following the closing
date of a Securitization Transaction between the Company, any Subservicer or any Third-Party
Originator and any of the parties specified in clause (D) of paragraph (a) of this Section (and any
other parties identified in writing by the requesting party) with respect to such Securitization
Transaction, but only to the extent that such affiliations or relationships do not include the
Purchaser, Depositor or any of their respective affiliates as a party, (C) any Event of Default of
which it is aware or has received notice under the terms of the Agreement or any Reconstitution
Agreement, (D) any merger or consolidation where the Company is not the surviving entity or sale of
substantially all of the assets of the Company, and (E) the Company’s entry into an agreement with
a Subservicer to perform or assist in the performance of any of the Company’s obligations under the
Agreement or any Reconstitution Agreement and (ii) provide to the Purchaser and any Depositor a
description of such proceedings, affiliations or relationships.




     (e) As a condition to the succession to the Company or any Subservicer as servicer or
subservicer under the Agreement or any Reconstitution Agreement by any Person (i) into which the
Company or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Company or any Subservicer, the Company shall provide to the Purchaser, any Master
Servicer and any Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Purchaser and any Depositor of such succession
or appointment and (y) in writing and in form and substance reasonably satisfactory to the
Purchaser and such Depositor, all information reasonably requested in writing by the Purchaser or
any Depositor in order to comply with its reporting obligation under Item 6.02 of Form 8-K with
respect to any class of asset-backed securities.



     (f) In addition to such information as the Company, as servicer, is obligated to provide
pursuant to other provisions of the Agreement, not later than ten (10) days prior to the deadline
for the filing of any distribution report on Form 10-D in respect of any Securitization Transaction
that includes any of the Mortgage Loans serviced by the Company or any Subservicer, the Company or
such Subservicer, as applicable, shall, to the extent the Company or such Subservicer has
knowledge, provide to the party responsible for filing such report (including, if applicable, the
Master Servicer) notice of the occurrence of any of the following events along with all
information, data and materials related thereto and reasonably available to it as may be required
to be included in the related distribution report on Form 10-D (as specified in the provisions of
Regulation AB referenced below):




     (i) any modifications, extensions or waivers of pool asset terms, fees, penalties or
payments during the distribution period or that have cumulatively become
material over time (Item 1121(a)(11) of Regulation AB) that would be material to the
securityholders;




     (ii) breaches of pool asset representations or warranties or transaction covenants
(Item 1121(a)(12) of Regulation AB) that would be material to the securityholders; and




     (iii) information regarding new asset-backed securities issuances backed by the same
pool assets, any pool asset changes (such as additions, substitutions or repurchases),



I-9









 






and
any changes in origination, underwriting or other criteria for acquisition or selection of
pool assets (Item 1121(a)(14) of Regulation AB) that would be material to the
securityholders.



     (g) The Company shall provide to the Purchaser, any Master Servicer and any Depositor, upon
written request, evidence of the authorization of the person signing any certification or
statement, copies of Fidelity Bond Insurance and Errors and Omissions Insurance policy evidence,
publicly available financial information and reports, and, to the extent material to
securityholders, such other information related to the Company or any Subservicer of the Company’s
or such Subservicer’s performance hereunder.



     Subsection 2.04 Servicer Compliance Statement.



     On or before March 5th of each calendar year when the Depositor is required to file reports
under the Exchange Act with respect to the related Securitization Transaction, commencing in 2007,
the Company shall deliver to the Purchaser and any Master Servicer, or any Depositor if a Master
Servicer has not been identified for the related Securitization Transaction, a statement of
compliance addressed to such parties and signed by an authorized officer of the Company, to the
effect that (i) a review of the Company’s activities during the immediately preceding calendar year
(or applicable portion thereof) and of its performance under the Agreement and any applicable
Reconstitution Agreement during such period has been made under such officer’s supervision, and
(ii) to the best of such officers’ knowledge, based on such review, the Company has fulfilled all
of its obligations under the Agreement and any applicable Reconstitution Agreement in all material
respects throughout such calendar year (or applicable portion thereof) or, if there has been a
failure to fulfill any such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.



     Subsection 2.05 Report on Assessment of Compliance and Attestation.



     (a) On or before March 5th of each calendar year when the Depositor is required to file
reports under the Exchange Act with respect to the related Securitization Transaction, commencing
in 2007, the Company shall:




     (i) deliver to the Purchaser and any Master Servicer, or any Depositor if a Master
Servicer has not been identified for the related Securitization Transaction, a report (in
form and substance reasonably satisfactory to such parties) regarding the Company’s
assessment of compliance with the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be addressed to such parties and signed by an
authorized officer of the Company, and shall address each of the “Applicable Servicing
Criteria” specified on Exhibit B hereto;




     (ii) deliver to the Purchaser and any Master Servicer, or any Depositor if a Master
Servicer has not been identified for the related Securitization Transaction, a report of a
registered public accounting firm reasonably acceptable to such parties that attests to, and
reports on, the assessment of compliance made by the Company and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules



I-10









 






1  02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act;




     (iii) cause each Subservicer, and each Subcontractor determined by the Company pursuant
to Section 2.06(b) to be “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, to deliver to the Purchaser and any Master Servicer, or any
Depositor if a Master Servicer has not been identified for the related Securitization
Transaction, an assessment of compliance and accountants’ attestation as and when provided
in paragraphs (a) and (b) of this Section; and




     (iv) deliver, and cause each Subservicer, and each Subcontractor determined by the
Company pursuant to Section 2.06(b) to be “participating in the servicing function” within
the meaning of Item 1122 of Regulation AB, to deliver, to the Purchaser and any Master
Servicer, or any Depositor if a Master Servicer has not been identified for the related
Securitization Transaction, and any other Person that will be responsible for signing the
certification (a “Sarbanes Certification”) required by Rules 13a-14(d) and 15d-14(d) under
the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of an
asset-backed issuer with respect to a Securitization Transaction a certification, signed by
the appropriate officer of the Company, in the form attached hereto as Exhibit A.



     The Company acknowledges that the parties identified in clause (a)(iv) above may rely on the
certification provided by the Company pursuant to such clause in signing a Sarbanes Certification
and filing such with the Commission. Neither the Purchaser nor any Depositor will request delivery
of a certification under clause (a)(iv) above unless a Depositor is required under the Exchange Act
to file an annual report on Form 10-K with respect to an issuing entity whose asset pool includes
Mortgage Loans.



     (b) Each assessment of compliance provided by a Subservicer pursuant to Section 2.05(a)(iii)
shall address each of the Servicing Criteria specified on substantially Exhibit B hereto or, in the
case of a Subservicer subsequently appointed as such, on or prior to the date of such appointment.
An assessment of compliance provided by a Subcontractor pursuant to Section 2.05(a)(iii) need not
address any elements of the Servicing Criteria other than those specified by the Company pursuant
to Section 2.06.



     Subsection 2.06 Use of Subservicers and Subcontractors.



     The Company shall not hire or otherwise utilize the services of any Subservicer to fulfill any
of the obligations of the Company as servicer under the Agreement or any Reconstitution Agreement
unless the Company complies with the provisions of paragraph (a) of this Section. The Company
shall not hire or otherwise utilize the services of any Subcontractor, and shall not authorize any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to fulfill any of the
obligations of the Company as servicer under the Agreement or any Reconstitution Agreement unless
the Company complies with the provisions of paragraph (b) of this Section.



     (a) It shall not be necessary for the Company to seek the consent of the Purchaser, any Master
Servicer or any Depositor to the utilization of any Subservicer. The Company shall



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cause any
Subservicer used by the Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of this Section and with Sections 2.02, 2.03(c), (e), (f)
and (g), 2.04, 2.05 and 2.07 of this Reg AB Addendum to the same extent as if such Subservicer were
the Company, and to provide the information required with respect to such Subservicer under Section
2.03(d) of this Reg AB Addendum. The Company shall be responsible for obtaining from each
Subservicer and delivering to the Purchaser and any Depositor any servicer compliance statement
required to be delivered by such Subservicer under Section 2.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 2.05 and any certification
required to be delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 2.05 as and when required to be delivered.




     (b) It shall not be necessary for the Company to seek the consent of the Purchaser, any Master
Servicer or any Depositor to the utilization of any Subcontractor. The Company shall promptly upon
written request provide to the Purchaser and any Master Servicer, or any Depositor (or any designee
of the Depositor, such as an administrator) if a Master Servicer has not been identified for the
related Securitization Transaction, a written description (in form and substance reasonably
satisfactory to such parties) of the role and function of each Subcontractor utilized by the
Company or any Subservicer, specifying (i) the identity of each such Subcontractor, (ii) which (if
any) of such Subcontractors are “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB and (iii) which elements of the Servicing Criteria will be addressed in
assessments of compliance provided by each Subcontractor identified pursuant to clause (ii) of this
paragraph.



     (c) As a condition to the utilization of any Subcontractor determined to be “participating in
the servicing function” within the meaning of Item 1122 of Regulation AB, the Company shall cause
any such Subcontractor used by the Company (or by any Subservicer) for the benefit of the Purchaser
and any Depositor to comply with the provisions of Sections 2.05 and 2.07 of this Reg AB Addendum
to the same extent as if such Subcontractor were the Company. The Company shall be responsible for
obtaining from each Subcontractor and delivering to the Purchaser and any Depositor any assessment
of compliance and attestation required to be delivered by such Subcontractor under Section 2.05, in
each case as and when required to be delivered.



     Subsection 2.07 Indemnification; Remedies. 



     The Company shall indemnify the Purchaser, each affiliate of the Purchaser, and each of the
following parties participating in a Securitization Transaction: each Sponsor; each issuing entity;
each Person (including, but not limited to, any Master Servicer if applicable) responsible for the
preparation, execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such Securitization Transaction;
each broker dealer acting as underwriter, placement agent or initial purchaser, each Person who
controls any of such parties or the Depositor (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act); and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and of the Depositor (each, an
“Indemnified Party”), and shall hold each of them harmless from and against any



I-12









 




claims, losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of or based upon:




     (a) (A) any untrue statement of a material fact contained or alleged to be contained in any
information, report, certification, accountants’ letter or other material provided in written or
electronic format under this Article II by or on behalf of the Company, or provided under this
Article II by or on behalf of any Subservicer, Subcontractor or Third-Party Originator
(collectively, the “Company Information”), or (B) the omission or alleged omission to state in the
Company Information a material fact required to be stated in the Company Information or necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Company Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard to whether the
Company Information or any portion thereof is presented together with or separately from such other
information;



     (b) any breach by the Company of its obligations under this Article II, including particularly
any failure by the Company, any Subservicer, any Subcontractor or any Third-Party Originator to
deliver any information, report, certification, accountants’ letter or other material when and as
required under this Article II, including any failure by the Company to identify pursuant to
Section 2.06(b) any Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB;



     (c) any breach by the Company of a representation or warranty set forth in Section 2.02(a) or
in a writing furnished pursuant to Section 2.02(b) and made as of a date prior to the closing date
of the related Securitization Transaction, to the extent that such breach is not cured by such
closing date, or any breach by the Company of a representation or warranty in a writing furnished
pursuant to Section 2.02(b) to the extent made as of a date subsequent to such closing date, or



     (d) the negligence, bad faith or willful misconduct of the Company in connection with its
performance under this Article II.



     If the indemnification provided for herein is unavailable or insufficient to hold harmless an
Indemnified Party, then the Company agrees that it shall contribute to the amount paid or payable
by such Indemnified Party as a result of any claims, losses, damages or liabilities incurred by
such Indemnified Party in such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Company on the other.



     In the case of any failure of performance described in clause (a)(ii) of this Section, the
Company shall promptly reimburse the Purchaser, any Depositor, as applicable, and each Person
responsible for the preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such party in order to obtain



I-13









 




the information, report, certification, accountants’ letter or other material not delivered as
required by the Company, any Subservicer, any Subcontractor or any Third-Party Originator.




     (e) This indemnification shall survive the termination of the Agreement or the termination of
any party to the Agreement.




     (i) Any failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’ letter or other
material when and as required under this Article II, or any breach by the Company of a
representation or warranty set forth in Section 2.02(a) or in a writing furnished pursuant
to Section 2.02(b) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by such closing
date, or any breach by the Company of a representation or warranty in a writing furnished
pursuant to Section 2.02(b) to the extent made as of a date subsequent to such closing date,
shall, except as provided in clause (ii) of this paragraph, immediately and automatically,
without notice or grace period, constitute an Event of Default with respect to the Company
under the Agreement and any applicable Reconstitution Agreement, and shall entitle the
Purchaser or Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Company as servicer under the Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in the Agreement or any
applicable Reconstitution Agreement to the contrary) of any compensation to the Company
(and, if the Company is servicing any of the Mortgage Loans in a Securitization Transaction,
appoint a successor servicer reasonably acceptable to any Master Servicer for such
Securitization Transaction); provided that to the extent that any provision of the Agreement
and/or any applicable Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company as servicer, such
provision shall be given effect.




     (ii) Any failure by the Company, any Subservicer or any Subcontractor to deliver any
information, report, certification or accountants’ letter when and as required under Section
2.04 or 2.05, including (except as provided below) any failure by the Company to identify
pursuant to Section 2.06(b) any Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, which continues unremedied for ten (10)
calendar days after the date on which such information, report,
certification or accountants’ letter was required to be delivered shall constitute an
Event of Default with respect to the Company under the Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser, any Master Servicer or any
Depositor, as applicable, in its sole discretion to terminate the rights and obligations of
the Company as servicer under the Agreement and/or any applicable Reconstitution Agreement
without payment (notwithstanding anything in this Agreement to the contrary) of any
compensation to the Company; provided that to the extent that any provision of the Agreement
and/or any applicable Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company as servicer, such
provision shall be given effect.



     Neither the Purchaser nor any Depositor shall be entitled to terminate the rights and
obligations of the Company pursuant to this subparagraph (b)(ii) if a failure of the Company to



I-14









 




identify a Subcontractor “participating in the servicing function” within the meaning of Items 1122
of Regulation AB was attributable solely to the role or functions of such Subcontractor with
respect to mortgage loans other than the Mortgage Loans.




     (f) The Company shall promptly reimburse the Purchaser (or any designee of the Purchaser), any
Master Servicer and any Depositor, as applicable, for all reasonable expenses incurred by the
Purchaser (or such designee) or such Depositor, as such are incurred, in connection with the
termination of the Company as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit whatever rights the Purchaser
or any Depositor may have under other provisions of the Agreement and/or any applicable
Reconstitution Agreement or otherwise, whether in equity or at law, such as an action for damages,
specific performance or injunctive relief.



     Subsection 2.08 Third-party Beneficiary. 



     For purposes of this Reg AB Addendum and any related provisions thereto, each Master Servicer
shall be considered a third-party beneficiary of the Agreement, entitled to all the rights and
benefits hereof as if it were a direct party to the Agreement.



I-15









 





EXHIBIT A




FORM OF ANNUAL CERTIFICATION





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




I,                                         , the                               
           of Bank of America, National
Association, certify to [the Purchaser], [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent that they will rely
upon this certification, that:




     (1) I have reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on assessment of the
Company’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB and
identified as the responsibility of the Company on Exhibit B to the Regulation AB Compliance
Addendum to the Agreement (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of
Regulation AB (the “Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section
1122(b) of Regulation AB (the “Attestation Report”), and all servicing reports, officer’s
certificates and other information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the “Company Servicing
Information”);



     (2) Based on my knowledge, the Company Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company Servicing Information;



     (3) Based on my knowledge, all of the Company Servicing Information required to be provided by
the Company under the Agreement has been provided to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee];



     (4) I am responsible for reviewing the activities performed by the Company as servicer under
the Agreement, and based on my knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under the Agreement in all
material respects; and



     (5) The Compliance Statement required to be delivered by the Company pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to be provided by the
Company and by any Subservicer or Subcontractor pursuant to the Agreement, have been provided to
the [Depositor] [Master Servicer]. Any material instances of noncompliance described in such
reports have been disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.



I-16









 





	 	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 







I-17










 





EXHIBIT B




SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE



The assessment of compliance to be delivered by [the Company] [Name of Subservicer] shall address,
at a minimum, the criteria identified as below as “Applicable Servicing Criteria”;




	 	 	 	 	 
	 	 	 	 	Applicable
	 	 	 	 	Servicing
	Servicing Criteria	 	Criteria
	Reference	 	Criteria	 	 
	 
	 	 	 	 
	 

	 	General Servicing Considerations 	 	 
	1122(d)(1)(i)

	 	Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the transaction
agreements.
	 	x
	 
	 	 	 	 
	1122(d)(1)(ii)

	 	If any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
	 	x
	 
	 	 	 	 
	1122(d)(1)(iii)

	 	Any requirements in the transaction
agreements to maintain a back-up
servicer for the mortgage loans are maintained.	 	 
	 
	 	 	 	 
	1122(d)(1)(iv)

	 	A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period in the
amount of coverage required by and otherwise in accordance with the terms of
the transaction agreements.
	 	x
	 
	 	 	 	 
	 

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

	 	Payments on mortgage loans are deposited into the appropriate custodial
bank accounts and related bank clearing accounts no more than two business
days following receipt, or such other number of days specified in the
transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(2)(ii)

	 	Disbursements made via wire transfer on behalf of an obligor or to an
investor are made only by authorized personnel.
	 	x
	 
	 	 	 	 
	1122(d)(2)(iii)

	 	Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(2)(iv)

	 	The related accounts for the transaction, such as cash reserve accounts
or accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth in the
transaction agreements.
	 	x






I-18









 






	 	 	 	 	 
	 	 	 	 	Applicable
	 	 	 	 	Servicing
	Servicing Criteria	 	Criteria
	Reference	 	Criteria	 	 
	 
	 	 	 	 
	1122(d)(2)(v)

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

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

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

	 	Investor Remittances and Reporting	 	 
	 
	 	 	 	 
	1122(d)(3)(i)

	 	Reports to investors, including those to be filed with the Commission,
are maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors’ or the
trustee’s records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.
	 	x
	 
	 	 	 	 
	1122(d)(3)(ii)

	 	Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction
agreements.
	 	x
	 
	 	 	 	 
	1122(d)(3)(iii)

	 	Disbursements made to an investor are posted within two business days to
the Servicer’s investor records, or such other number of days specified in the
transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(3)(iv)

	 	Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank statements.
	 	x






I-19









 






	 	 	 	 	 
	 	 	 	 	Applicable
	 	 	 	 	Servicing
	Servicing Criteria	 	Criteria
	Reference	 	Criteria	 	 
	 
	 	 	 	 
	 

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

	 	Collateral or security on mortgage loans is maintained as required by the
transaction agreements or related mortgage loan documents.
	 	x
	 
	 	 	 	 
	1122(d)(4)(ii)

	 	Mortgage loan and related documents are safeguarded as required by the
transaction agreements
	 	x
	 
	 	 	 	 
	1122(d)(4)(iii)

	 	Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or requirements in the
transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(4)(iv)

	 	Payments on mortgage loans, including any payoffs, made in accordance
with the related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt, or such other
number of days specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
	 	x
	 
	 	 	 	 
	1122(d)(4)(v)

	 	The Servicer’s records regarding the mortgage loans agree with the
Servicer’s records with respect to an obligor’s unpaid principal balance.
	 	x
	 
	 	 	 	 
	1122(d)(4)(vi)

	 	Changes with respect to the terms or status of an obligor’s mortgage
loans (e.g., loan modifications or re-agings) are made, reviewed and approved
by authorized personnel in accordance with the transaction agreements and
related pool asset documents.
	 	x
	 
	 	 	 	 
	1122(d)(4)(vii)

	 	Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements established by the
transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(4)(viii)

	 	Records documenting collection efforts are maintained during the period a
mortgage loan is delinquent in accordance with the transaction agreements.
Such records are maintained on at least a monthly basis, or such other period
specified in the transaction agreements, and describe the entity’s activities
in monitoring delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).
	 	x






I-20









 






	 	 	 	 	 
	 	 	 	 	Applicable
	 	 	 	 	Servicing
	Servicing Criteria	 	Criteria
	Reference	 	Criteria	 	 
	 
	 	 	 	 
	1122(d)(4)(ix)

	 	Adjustments to interest rates or rates of return for mortgage loans with
variable rates are computed based on the related mortgage loan documents.
	 	x
	 
	 	 	 	 
	1122(d)(4)(x)

	 	Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor’s
mortgage loan documents, on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable mortgage loan documents
and state laws; and (C) such funds are returned to the obligor within 30
calendar days of full repayment of the Mortgage Loans, or such other number of
days specified in the transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(4)(xi)

	 	Payments made on behalf of an obligor (such as tax or insurance payments)
are made on or before the related penalty or expiration dates, as indicated on
the appropriate bills or notices for such payments, provided that such support
has been received by the servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(4)(xii)

	 	Any late payment penalties in connection with any payment to be made on
behalf of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or omission.
	 	x
	 
	 	 	 	 
	1122(d)(4)(xiii)

	 	Disbursements made on behalf of an obligor are posted within two business
days to the obligor’s records maintained by the servicer, or such other number
of days specified in the transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(4)(xiv)

	 	Delinquencies, charge-offs and uncollectible accounts are recognized and
recorded in accordance with the transaction agreements.
	 	x
	 
	 	 	 	 
	1122(d)(4)(xv)

	 	Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in the
transaction agreements.	 	 






I-21









 





	 	 	 	 	 
	 	 	[BANK OF AMERICA, NATIONAL

ASSOCIATION]
	 
	 	 	 	 
	 	 	[NAME OF SUBSERVICER]
	 
	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	Name:
	 
	 	 	 	 
	 

	 	 	 	Title:







I-22









 








BANK OF AMERICA—SEQUOIA TO TRUSTEE




ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT




For




Flow Mortgage Loan Sale and Servicing Agreement




     THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated as of March 30, 2007 (the
“Assignment”), is entered into among Sequoia Residential Funding, Inc. (the “Assignor”), Bank of
America, National Association, as the servicer (the “Servicer”), and HSBC Bank USA, National
Association (“HSBC Bank”) as Trustee under a Pooling and Servicing Agreement dated as of March 1,
2007 (the “Pooling and Servicing Agreement”), among the Assignor, as Depositor, HSBC Bank (in such
Trustee capacity, the “Assignee”) and Wells Fargo Bank, N. A., as Master Servicer and Securities
Administrator.



RECITALS




          WHEREAS, RWT Holdings, Inc. (“RWT”) and the Servicer have entered into a certain Flow Mortgage
Loan Sale and Servicing Agreement, dated as of July 1, 2006 (the “Flow Sale and Servicing
Agreement”), and the Servicer is currently servicing certain mortgage loans (the “Mortgage Loans”)
under the Flow Sale and Servicing Agreement; and




     WHEREAS, RWT has previously sold, assigned and transferred all of its right, title and
interest in certain of the Mortgage Loans (the “Specified Mortgage Loans”) which are listed on the
mortgage loan schedule attached as Exhibit I hereto (the “Specified Mortgage Loan
Schedule”) and its rights under the Flow Sale and Servicing Agreement with respect to the Specified
Mortgage Loans to Assignor; and



     WHEREAS, the Assignor has agreed to sell, assign and transfer to Assignee all of its right,
title and interest in the Specified Mortgage Loans and its right under the Flow Sale and Servicing
Agreement with respect to the Specified Mortgage Loans; and



     WHEREAS, the parties hereto have agreed that the Specified Mortgage Loans shall be subject to
the terms of this Assignment.



     NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and
valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties
agree as follows:



     1. Assignment and Assumption.



          (a) Effective on and as of the date hereof, the Assignor hereby pledges, assigns and transfers
to the Assignee all of its right, title and interest in the Specified Mortgage Loans and all of its
rights (but none of the Purchaser’s obligations) provided under the Flow Sale and Servicing
Agreement to the extent relating to the Specified Mortgage Loans, the Assignee
hereby accepts such assignment from the Assignor, and the Servicer hereby acknowledges such
assignment and assumption.




23









 






          (b) Effective on and as of the date hereof, the Assignor represents and
warrants to the Assignee that the Assignor has not taken any action that would serve
to impair or encumber the Assignee’s interest in the Specified Mortgage Loans since
the date of the Assignor’s acquisition of the Specified Mortgage Loans.


2. Recognition of the Assignee.




From and after the date hereof, subject to Section 3 below, the Servicer shall recognize the
Assignee as the holder of the rights and benefits of the Purchaser with respect to the
Specified Mortgage Loans and the Servicer will service the Specified Mortgage Loans for the
Assignee as if the Assignee and the Servicer had entered into a separate servicing agreement
for the servicing of the Specified Mortgage Loans in the form of the Flow Sale and Servicing
Agreement (as amended hereby) with the Assignee as the Purchaser thereunder, the terms of
which Flow Sale and Servicing Agreement are incorporated herein by reference and amended
hereby. It is the intention of the parties hereto that this Assignment will be a separate and
distinct agreement, and the entire agreement, between the parties hereto to the extent of the
Specified Mortgage Loans and shall be binding upon and for the benefit of the respective
successors and assigns of the parties hereto.


3. Assignor’s Continuing Rights and Responsibilities.




Notwithstanding Sections 1 and 2 above, the parties hereto agree that the Assignor rather than the
Assignee shall have the ongoing rights to take action and the responsibilities of the
Purchaser under the following sections of the Flow Sale and Servicing Agreement:



Flow Sale and Servicing Agreement:



	 	 	 
	Section	 	Matter
	7.03, 1st,
2nd and 3rd
¶’s

	 	(a) Repurchase; Substitution.
	 
	 	 
	11.01, 5th,
6th,
7th and
8th
¶’s

	 	(b) Servicer to Act as Servicer;
Subservicing.
	 
	 	 
	11.02

	 	(c) Liquidation of Mortgage Loans.
	 
	 	 
	11.13(c)

	 	(d) Title, Management and Disposition of REO Property.
	 
	 	 
	11.20

	 	(e) Servicer Shall Provide Access and Information as
Reasonably Required.
	 
	 	 
	12.01

	 	(f) Indemnification; Third-Party Claims.
	 
	 	 
	12.04

	 	(g) Seller and Servicer Not to Resign.






24









 






	 	 	 
	Section	 	Matter
	32

	 	(h) Cooperation of the Company with a Reconstitution; Regulation
AB Compliance.






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



     Flow Sale and Servicing Agreement:



	 	 	 
	Section	 	 
	 
	 	 
	11.09

	 	(a) Transfer of Accounts.
	 
	 	 
	11.16

	 	(b) Statements to the Purchaser.
	 
	 	 
	Subsection 2.04
of Addendum I

	 	(c) Servicer Compliance Statement.
	 
	 	 
	Subsection 2.05
of Addendum I

	 	(d) Report on Assessment of Compliance and
Attestation.





4. Amendment to the Flow Sale and Servicing Agreement.




The Flow Sale and Servicing Agreement are hereby amended as set forth in Appendix A
hereto with respect to the Specified Mortgage Loans.


5. Representations and Warranties.




(a) The Assignee represents and warrants that it is a sophisticated investor able to
evaluate the risks and merits of the transactions contemplated hereby, and that it
has not relied in connection therewith upon any statements or representations of the
Servicer or the Assignor other than those contained in the Flow Sale and Servicing
Agreement or this Assignment.



(b) Each of the parties hereto represents and warrants that it is duly and legally
authorized to enter into this Assignment.



(c) Each of the parties hereto represents and warrants that this Assignment has


25









 






been duly authorized, executed and delivered by it and (assuming due authorization,
execution and delivery thereof by each of the other parties hereto) constitutes its
legal, valid and binding obligation, enforceable against it in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law).



26









 




6. Continuing Effect.




Except as contemplated hereby, the Flow Sale and Servicing Agreement shall remain in full force and
effect in accordance with their terms. This Assignment constitutes a Reconstitution Agreement
as contemplated in Section 32 of the Flow Sale and Servicing Agreement and the Reconstitution
Date shall be the date hereof with respect to the Specified Mortgage Loans listed on
Exhibit I on the date hereof.


7. Governing Law.




This Assignment and the rights and obligations hereunder shall be governed by and construed in
accordance with the internal laws of the State of New York.


8. Notices.




Any notices or other communications permitted or required under the Flow Sale and Servicing
Agreement to be made to the Assignor and Assignee shall be made in accordance with the terms
of the Flow Sale and Servicing Agreement and shall be sent to the Assignor and Assignee as
follows:



Sequoia Residential Funding, Inc.




One Belvedere Place, Suite 330




Mill Valley, CA 94941




HSBC Bank USA, National Association




452 Fifth Avenue




New York, NY 10018




or to such other address as may hereafter be furnished by the Assignor or Assignee
to the other parties in accordance with the provisions of the Flow Sale and
Servicing Agreement.


9. Counterparts.




This Assignment may be executed in counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the same
instrument.


10. Definitions.




Any capitalized term used but not defined in this Assignment has the same meaning as in the Flow
Sale and Servicing Agreement.



27









 







11. Master Servicer.




     The Servicer hereby acknowledges that the Assignee has appointed Wells Fargo Bank, N. A. (the
“Master Servicer”) to act as master servicer and securities administrator under the Pooling and
Servicing Agreement and hereby agrees to treat all inquiries, instructions, authorizations and
other communications from the Master Servicer as if the same had been received from the Assignee.
The Master Servicer, acting on behalf of the Assignee, shall have the rights of the Assignee as the
Purchaser under the Flow Sale and Servicing Agreement to enforce the obligations of the Servicer
thereunder. Any notices or other communications permitted or required under the Flow Sale and
Servicing Agreement to be made to the Assignee shall be made in accordance with the terms of the
Flow Sale and Servicing Agreement and shall be sent to the Master Servicer at the following
address:



Wells Fargo Bank, N. A.

P.O. Box 98

Columbia, Maryland 21046

(or, for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045)

Attention: Sequoia Mortgage Trust 2007-1




or to such other address as may hereafter be furnished by the Master Servicer to
Servicer. Any such notices or other communications permitted or required under the
Flow Sale and Servicing Agreement may be delivered in electronic format unless
manual signature is required in which case a hard copy of such report or
communication shall be required.



     The Servicer further acknowledges that the Assignor has engaged the Master Servicer to provide
certain default administration and that the Master Servicer, acting as agent of the Assignor, may
exercise any of the rights of the Purchaser retained by the Assignor in Section 3 above.



     The Servicer shall make all distributions under the Flow Sale and Servicing Agreement, as they
relate to the Specified Mortgage Loans, to the Master Servicer by wire transfer of immediately
funds to:


Wells Fargo Bank, NA

San Francisco, CA

ABA# 121-000-248

Acct# 3970771416

Acct Name: SAS Clearing

FFC: 50996600




28









 









12. Successors and Assigns.



     Upon a transfer of the Specified Mortgage Loans by the Assignee (other than in respect of
repurchases pursuant to Section 6.03 or Section 7.03 of the Flow Sale and Servicing Agreement) to a
buyer (“buyer”), such transfer shall constitute a Reconstitution subject to the terms of Section 32
of the Flow Sale and Servicing Agreement. Upon the closing of such transfer, the rights and
obligations of Purchaser retained by the Assignor pursuant to this Assignment shall automatically
terminate and the buyer shall be deemed to possess all of the rights and obligations of Purchaser
under the Flow Sale and Servicing Agreement, provided, however, that the Assignor shall remain
liable for any obligations as Purchaser arising from or attributable to the period from the date
hereof to the closing date of such transfer.



[remainder of page intentionally left blank]




29









 








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



	 	 	 	 	 
	 	 	ASSIGNOR:
	 
	 	 	 	 
	 	 	SEQUOIA RESIDENTIAL FUNDING, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	ASSIGNEE:
	 
	 	 	 	 
	 	 	HSBC BANK USA, NATIONAL ASSOCIATION
	 
	 	 	 	 
	 	 	
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	SERVICER:
	 
	 	 	 	 
	 	 	BANK OF AMERICA, NATIONAL ASSOCIATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 






30









 








EXHIBIT I














 








APPENDIX A




MODIFICATIONS TO THE FLOW SALE AND SERVICING AGREEMENT




     1. The definition of “Business Day” in Section 1 of the Agreement is hereby deleted in its
entirety and replaced with the following:




“Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a legal
holiday in the State of New York, or the State of California, or the State of Maryland or
the State of Minnesota, or (iii) a day on which banks in the State of New York, or the State
of California, or the State of Maryland or the State of Minnesota are authorized or
obligated by law or executive order to be closed.”



     2. The definition of “Closing Date” is hereby revised to read as follows:




“Closing Date: March 30, 2007, except with respect to the first paragraph
of Section 2, Section 3, Section 4, Subsection 6.01, Subsection 6.03, Section 7.01
and the Term Sheet(s).”



     3. The definition of “Cut-off Date” is hereby revised to read as follows:




“Cut-off Date: March 1, 2007, except with respect to the first paragraph of
Section 2, Section 3, Section 4, Subsection 6.01, Subsection 6.03, Section 7.01 and
the Term Sheet(s).”



     4. The definition of “First Remittance Date” is hereby revised to read as follows:




“First Remittance Date: April 18, 2007.”



     5. Subsection 11.01 is revised to add the following sentence at then end of the fifth paragraph:




     “Notwithstanding anything to the contrary in the this Agreement, the Servicer shall not
make or permit any modification, waiver or amendment of any term of a Mortgage Loan that
could cause any REMIC holding such Mortgage Loan to fail to qualify as a REMIC or result in
the imposition of any tax under Section 860F(a) or 860G(d) of the Code on any REMIC holding
such Mortgage Loan.”



     6. Subsection 11.04, first sentence of the first paragraph is revised to read as follows:




     “The Servicer shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Collection Accounts (collectively, the “Collection
Account”), titled “HSBC Bank USA, National Association, in trust for the holders of Sequoia
Mortgage Trust 2007-1 Mortgage Pass-Through Certificates.”













 





     7. Notwithstanding anything to the contrary in the Flow Sale and Servicing Agreement, any
Custodial Accounts established by the Servicer pursuant to Subsection 11.04 of the Flow Sale and
Servicing Agreement shall qualify as Eligible Accounts as defined in the Pooling and Servicing
Agreement.



     8. Subsection 11.13 is revised to add the following paragraphs at the end of the section:




     “The REO Property must be sold within three years following the end of the calendar
year of the date of acquisition if a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held, unless (i) the
Purchaser shall have been supplied with an Opinion of Counsel (at the Servicer’s expense) to
the effect that the holding by the related trust of such Mortgaged Property subsequent to
such three-year period (and specifying the period beyond such three-year period for which
the Mortgaged Property may be held) will not result in the imposition of taxes on
“prohibited transactions” of the related trust as defined in Section 860F of the Code, or
cause the related REMIC to fail to qualify as a REMIC, in which case the related trust may
continue to hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel), or (ii) the Purchaser (at the Servicer’s expense) or the Servicer shall
have applied for, prior to the expiration of such three-year period, an extension of such
three-year period in the manner contemplated by Section 856(e)(3) of the Code, in which case
the three-year period shall be extended by the applicable period. If a period longer than
three years is permitted under the foregoing sentence and is necessary to sell any REO
Property, the Servicer shall report monthly to the Purchaser as to progress being made in
selling such REO Property.




     Notwithstanding any other provision of this Agreement, if a REMIC election has been
made, no Mortgaged Property held by a REMIC shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of the related trust
or sold in such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify at any time as “foreclosure property” within a meaning of
Section 860G(a)(8) of the Code, (ii) subject to the related trust to the imposition of any
federal or state income taxes on “net income from foreclosure property” with respect to such
Mortgaged Property within the meaning of Section 860G(c) of the Code, or (iii) cause the
sale of such Mortgaged Property to result in the receipt by the related trust or any income
from non-permitted assets as described in Section 860F(a) (2)(B) of the Code, unless the
Servicer has agreed to indemnify and hold harmless the related trust with respect to the
imposition of any such taxes.”



     9. Subsection 11.16, first sentence of the first paragraph is revised to read as follows:




     “Not later than the tenth (10th) day of each month, the Servicer shall forward to the
Purchaser in an electronic format statements, in substantially the same forms as, and
providing the information described in, Exhibit 7 hereto; or as otherwise mutually
agreed to by Servicer and the Master Servicer”













 





     10. The Flow Sale and Servicing Agreement is modified by adding a new Subsection 11.24 which
reads as follows:




     “Subsection 11.24 Compliance with REMIC Provisions.




     If a REMIC election has been made with respect to the arrangement under which the Mortgage Loans
and REO Property are held, the Servicer shall not take any action, cause the REMIC to take any
action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited to the tax on
“prohibited transactions” as defined in Section 860F(a)(2) of the Code and the tax on
“contribution” to a REMIC set forth in Section 860G(d) of the Code unless the Servicer has received
an Opinion of Counsel (at the expense of the party seeking to take such actions) to the effect that
the contemplated action will not endanger such REMIC status or result in the imposition of any such
tax.”














 





EXHIBIT 7




FORM OF MONTHLY REPORTS




	 	 	 	 	 	 	 	 	 
	Standard File Layout - Master Servicing	 	 	 	 
	Column Name	 	Description	 	Decimal	 	Format Comment
	SER_INVESTOR_NBR

	 	A value assigned by the Servicer to define a group of
loans.
	 	 	 	 	 	Text up to 20 digits
	 
	 	 	 	 	 	 	 	 
	LOAN_NBR

	 	A unique identifier assigned to each loan by the investor.
	 	 	 	 	 	Text up to 10 digits
	 
	 	 	 	 	 	 	 	 
	SERVICER_LOAN_NBR

	 	A unique number assigned to a loan by the Servicer. This
may be different than the LOAN_NBR.
	 	 	 	 	 	Text up to 10 digits
	 
	 	 	 	 	 	 	 	 
	SCHED_PAY_AMT

	 	Scheduled monthly principal and scheduled interest
payment that a borrower is expected to pay, P&I constant.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	NOTE_INT_RATE

	 	The loan interest rate as reported by the Servicer.
	 	 	4	 	 	Max length of 6
	 
	 	 	 	 	 	 	 	 
	NET_INT_RATE

	 	The loan gross interest rate less the service fee rate as
reported by the Servicer.
	 	 	4	 	 	Max length of 6
	 
	 	 	 	 	 	 	 	 
	SERV_FEE_RATE

	 	The servicer’s fee rate for a loan as reported by the
Servicer.
	 	 	4	 	 	Max length of 6
	 
	 	 	 	 	 	 	 	 
	SERV_FEE_AMT

	 	The servicer’s fee amount for a loan as reported by the
Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	NEW_PAY_AMT

	 	The new loan payment amount as reported by the Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	NEW_LOAN_RATE

	 	The new loan rate as reported by the Servicer.
	 	 	4	 	 	Max length of 6
	 
	 	 	 	 	 	 	 	 
	ARM_INDEX_RATE

	 	The index the Servicer is using to calculate a forecasted
rate.
	 	 	4	 	 	Max length of 6
	 
	 	 	 	 	 	 	 	 
	ACTL_BEG_PRIN_BAL

	 	The borrower’s actual principal balance at the beginning
of the processing cycle.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	ACTL_END_PRIN_BAL

	 	The borrower’s actual principal balance at the end of the
processing cycle.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	BORR_NEXT_PAY_DUE_DATE

	 	The date at the end of processing cycle that the
borrower’s next payment is due to the Servicer, as
reported by Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	SERV_CURT_AMT_1

	 	The first curtailment amount to be applied.
	 	 	2	 	 	No commas(,) or dollar signs ($)






 









 






	 	 	 	 	 	 	 	 	 
	Standard File Layout - Master Servicing	 	 	 	 
	Column Name	 	Description	 	Decimal	 	Format Comment
	SERV_CURT_DATE_1

	 	The curtailment date associated with the first curtailment
amount.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	CURT_ADJ_AMT_1

	 	The curtailment interest on the first curtailment amount,
if applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SERV_CURT_AMT_2

	 	The second curtailment amount to be applied.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SERV_CURT_DATE_2

	 	The curtailment date associated with the second curtailment
amount.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	CURT_ADJ_AMT_2

	 	The curtailment interest on the second curtailment amount,
if applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SERV_CURT_AMT_3

	 	The third curtailment amount to be applied.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SERV_CURT_DATE_3

	 	The curtailment date associated with the third curtailment
amount.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	CURT_ADJ_AMT_3

	 	The curtailment interest on the third curtailment amount,
if applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	PIF_AMT

	 	The loan “paid in full” amount as reported by the Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	PIF_DATE

	 	The paid in full date as reported by the Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	ACTION_CODE

	 	The standard FNMA numeric code used to indicate the
default/delinquent status of a particular loan.
	 	 	 	 	 	Action Code Key: 15=Bankruptcy,

30=Foreclosure, , 60=PIF,

63=Substitution,

65=Repurchase,70=REO
	 
	 	 	 	 	 	 	 	 
	INT_ADJ_AMT

	 	The amount of the interest adjustment as reported by the
Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SOLDIER_SAILOR_ADJ_AMT

	 	The Soldier and Sailor Adjustment amount, if applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	NON_ADV_LOAN_AMT

	 	The Non Recoverable Loan Amount, if applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	LOAN_LOSS_AMT

	 	The amount the Servicer is passing as a loss, if applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SCHED_BEG_PRIN_BAL

	 	The scheduled outstanding principal amount due at the
beginning of the cycle date to be passed through to
investors.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SCHED_END_PRIN_BAL

	 	The scheduled principal balance due to investors at the end
of a processing cycle.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	SCHED_PRIN_AMT

	 	The scheduled principal amount as reported by the Servicer
for the current cycle — only applicable for
Scheduled/Scheduled Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)






 









 






	 	 	 	 	 	 	 	 	 
	Standard File Layout - Master Servicing	 	 	 	 
	Column Name	 	Description	 	Decimal	 	Format Comment
	SCHED_NET_INT

	 	The scheduled gross
interest amount less
the service fee
amount for the
current cycle as
reported by the
Servicer — only
applicable for
Scheduled/Scheduled
Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	ACTL_PRIN_AMT

	 	The actual principal
amount collected by
the Servicer for the
current reporting
cycle — only
applicable for
Actual/Actual Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	ACTL_NET_INT

	 	The actual gross
interest amount less
the service fee
amount for the
current reporting
cycle as reported by
the Servicer — only
applicable for
Actual/Actual Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	PREPAY_PENALTY_AMT

	 	The penalty amount
received when a
borrower prepays on
his loan as reported
by the Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	PREPAY_PENALTY_WAIVED

	 	The prepayment
penalty amount for
the loan waived by
the servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	MOD_DATE

	 	The Effective Payment
Date of the
Modification for the
loan.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	MOD_TYPE

	 	The Modification Type.
	 	 	 	 	 	Varchar — value can be alpha or numeric
	 
	 	 	 	 	 	 	 	 
	DELINQ_P&I_ADVANCE_AMT

	 	The current
outstanding principal
and interest advances
made by Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	BREACH_FLAG

	 	Flag to indicate if
the repurchase of a
loan is due to a
breach of
Representations and
Warranties
	 	 	 	 	 	Y=Breach

N=NO Breach

Let blank if N/A






 









 






Exhibit 2: Monthly Summary Report by Single Investor



MONTHLY SUMMARY REPORT




	 	 	 	 	 	 	 
	For Month Ended: mm/dd/yyyy

	 	Servicer Name	 	 	 	 
	 

	 	 	 	 	 	 
	Prepared by:                                         

	 	Investor Nbr	 	 	 	 
	 

	 	 	 	 	 	 





Section 1. Remittances and Ending Balances — Required Data




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






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






Section 2. Delinquency Report — Optional Data for Loan Accounting




Installments Delinquent




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






 









 






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




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







 









 





Standard File Layout — Delinquency Reporting




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Format
	Column/Header Name	 	Description	 	Decimal	 	Comment
	SERVICER_LOAN_NBR

	 	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LOAN_NBR

	 	A unique identifier assigned to each loan by the originator.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CLIENT_NBR

	 	Servicer Client Number	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SERV_INVESTOR_NBR

	 	Contains a unique number as assigned by an external servicer to identify a group of loans in their system.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BORROWER_FIRST_NAME

	 	First Name of the Borrower.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BORROWER_LAST_NAME

	 	Last name of the borrower.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_ADDRESS

	 	Street Name and Number of Property	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_STATE

	 	The state where the property located.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_ZIP

	 	Zip code where the property is located.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BORR_NEXT_PAY_DUE_DATE

	 	The date that the borrower’s next payment is due to the servicer at the end of processing cycle, as reported by Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOAN_TYPE

	 	Loan Type (i.e. FHA, VA, Conv)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_FILED_DATE

	 	The date a particular bankruptcy claim was filed.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_CHAPTER_CODE

	 	The chapter under which the bankruptcy was filed.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_CASE_NBR

	 	The case number assigned by the court to the bankruptcy filing.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	POST_PETITION_DUE_DATE

	 	The payment due date once the bankruptcy has been approved by the courts
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_DCHRG_DISM_DATE

	 	The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged and/or a Motion For Relief Was Granted.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_APPR_DATE

	 	The Date The Loss Mitigation Was Approved By The Servicer
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_TYPE

	 	The Type Of Loss Mitigation Approved For A Loan Such As;	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_EST_COMP_DATE

	 	The Date The Loss Mitigation /Plan Is Scheduled To End/Close
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_ACT_COMP_DATE

	 	The Date The Loss Mitigation Is Actually Completed
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_APPROVED_DATE

	 	The date DA Admin sends a letter to the servicer with instructions to begin foreclosure proceedings.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	ATTORNEY_REFERRAL_DATE

	 	Date File Was Referred To Attorney to Pursue Foreclosure
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FIRST_LEGAL_DATE

	 	Notice of 1st legal filed by an Attorney in a Foreclosure Action
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_SALE_EXPECTED_DATE

	 	The date by which a foreclosure sale is expected to occur.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_SALE_DATE

	 	The actual date of the foreclosure sale.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_SALE_AMT

	 	The amount a property sold for at the foreclosure sale.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	EVICTION_START_DATE

	 	The date the servicer initiates eviction of the borrower.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	EVICTION_COMPLETED_DATE

	 	The date the court revokes legal possession of the property from the borrower.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LIST_PRICE

	 	The price at which an REO property is marketed.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	LIST_DATE

	 	The date an REO property is listed at a particular price.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	OFFER_AMT

	 	The dollar value of an offer for an REO property.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	OFFER_DATE_TIME

	 	The date an offer is received by DA Admin or by the Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	REO_CLOSING_DATE

	 	The date the REO sale of the property is scheduled to close.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	REO_ACTUAL_CLOSING_DATE

	 	Actual Date Of REO Sale
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	OCCUPANT_CODE

	 	Classification of how the property is occupied.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_CONDITION_CODE

	 	A code that indicates the condition of the property.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_INSPECTION_DATE

	 	The date a property inspection is performed.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	APPRAISAL_DATE

	 	The date the appraisal was done.
	 	 	 	 	 	MM/DD/YYYY






 









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Format
	Column/Header Name	 	Description	 	Decimal	 	Comment
	CURR_PROP_VAL

	 	The current “as is” value of the property based on brokers price opinion or appraisal.
	 	 	2	 	 	 
	 
	 	 	 	 	 	 	 	 
	REPAIRED_PROP_VAL

	 	The amount the property would be worth if repairs are completed pursuant to a broker’s price opinion or appraisal.
	 	 	2	 	 	 
	 
	 	 	 	 	 	 	 	 
	If applicable:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DELINQ_STATUS_CODE

	 	FNMA Code Describing Status of Loan	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DELINQ_REASON_CODE

	 	The circumstances which caused a borrower to stop paying on a loan. Code indicates the reason why the loan is in default for this cycle.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	MI_CLAIM_FILED_DATE

	 	Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	MI_CLAIM_AMT

	 	Amount of Mortgage Insurance Claim Filed
	 	 	 	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	MI_CLAIM_PAID_DATE

	 	Date Mortgage Insurance Company Disbursed Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	MI_CLAIM_AMT_PAID

	 	Amount Mortgage Insurance Company Paid On Claim
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_FILED_DATE

	 	Date Claim Was Filed With Pool Insurance Company
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_AMT

	 	Amount of Claim Filed With Pool Insurance Company
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_PAID_DATE

	 	Date Claim Was Settled and The Check Was Issued By The Pool Insurer
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_AMT_PAID

	 	Amount Paid On Claim By Pool Insurance Company
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_FILED_DATE

	 	Date FHA Part A Claim Was Filed With HUD
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_AMT

	 	Amount of FHA Part A Claim Filed
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_PAID_DATE

	 	Date HUD Disbursed Part A Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_PAID_AMT

	 	Amount HUD Paid on Part A Claim
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_FILED_DATE

	 	Date FHA Part B Claim Was Filed With HUD
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_AMT

	 	Amount of FHA Part B Claim Filed
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_PAID_DATE

	 	Date HUD Disbursed Part B Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_PAID_AMT

	 	Amount HUD Paid on Part B Claim
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	VA_CLAIM_FILED_DATE

	 	Date VA Claim Was Filed With the Veterans Admin
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	VA_CLAIM_PAID_DATE

	 	Date Veterans Admin. Disbursed VA Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	VA_CLAIM_PAID_AMT

	 	Amount Veterans Admin. Paid on VA Claim
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	Current property value

	 	Currency	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date of (Appraisal of BPO)

	 	Date/Time	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BK Discharge Dates

	 	Date/Time	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BK Dismissal Dates

	 	Date/Time	 	 	 	 	 	 






Standard File Codes — Delinquency Reporting




The Loss Mit Type field should show the approved Loss Mitigation Code as follows:





	 	•	 	ASUM-Approved Assumption
	 
	 	•	 	BAP- Borrower Assistance Program
	 
	 	•	 	CO- Charge Off
	 
	 	•	 	DIL- Deed-in-Lieu
	 
	 	•	 	FFA- Formal Forbearance Agreement
	 
	 	•	 	MOD- Loan Modification
	 
	 	•	 	PRE- Pre-Sale




 









 







	 	•	 	SS- Short Sale
	 
	 	•	 	MISC- Anything else approved by the PMI or Pool Insurer





NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation Types other than
those above are used, the Servicer must supply Wells Fargo Bank with a description of each of the
Loss Mitigation Types prior to sending the file.



The Occupant Code field should show the current status of the property code as follows:




	 	•	 	Mortgagor
	 
	 	•	 	Tenant
	 
	 	•	 	Unknown
	 
	 	•	 	Vacant





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





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




 









 











Standard File Codes — Delinquency Reporting, Continued




The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:



	 	 	 
	Delinquency	 	 
	Code	 	Delinquency Description
	001

	 	FNMA-Death of principal mortgagor
	 
	 	 
	002

	 	FNMA-Illness of principal mortgagor
	 
	 	 
	003

	 	FNMA-Illness of mortgagor’s family member
	 
	 	 
	004

	 	FNMA-Death of mortgagor’s family member
	 
	 	 
	005

	 	FNMA-Marital difficulties
	 
	 	 
	006

	 	FNMA-Curtailment of income
	 
	 	 
	007

	 	FNMA-Excessive Obligation
	 
	 	 
	008

	 	FNMA-Abandonment of property
	 
	 	 
	009

	 	FNMA-Distant employee transfer
	 
	 	 
	011

	 	FNMA-Property problem
	 
	 	 
	012

	 	FNMA-Inability to sell property
	 
	 	 
	013

	 	FNMA-Inability to rent property
	 
	 	 
	014

	 	FNMA-Military Service
	 
	 	 
	015

	 	FNMA-Other
	 
	 	 
	016

	 	FNMA-Unemployment
	 
	 	 
	017

	 	FNMA-Business failure
	 
	 	 
	019

	 	FNMA-Casualty loss
	 
	 	 
	022

	 	FNMA-Energy environment costs
	 
	 	 
	023

	 	FNMA-Servicing problems
	 
	 	 
	026

	 	FNMA-Payment adjustment
	 
	 	 
	027

	 	FNMA-Payment dispute
	 
	 	 
	029

	 	FNMA-Transfer of ownership pending
	 
	 	 
	030

	 	FNMA-Fraud
	 
	 	 
	031

	 	FNMA-Unable to contact borrower
	 
	 	 
	INC

	 	FNMA-Incarceration






 









 






Exhibit 2: Standard File Codes — Delinquency Reporting, Continued




The FNMA Delinquent Status Code field should show the Status of Default as follows:




	 	 	 	 	 
	Status Code	 	Status Description
	 	09	 	 	Forbearance

	 	 	 	 	 

	 	17	 	 	Pre-foreclosure Sale Closing Plan Accepted

	 	 	 	 	 

	 	24	 	 	Government Seizure

	 	 	 	 	 

	 	26	 	 	Refinance

	 	 	 	 	 

	 	27	 	 	Assumption

	 	 	 	 	 

	 	28	 	 	Modification

	 	 	 	 	 

	 	29	 	 	Charge-Off

	 	 	 	 	 

	 	30	 	 	Third Party Sale

	 	 	 	 	 

	 	31	 	 	Probate

	 	 	 	 	 

	 	32	 	 	Military Indulgence

	 	 	 	 	 

	 	43	 	 	Foreclosure Started

	 	 	 	 	 

	 	44	 	 	Deed-in-Lieu Started

	 	 	 	 	 

	 	49	 	 	Assignment Completed

	 	 	 	 	 

	 	61	 	 	Second Lien Considerations

	 	 	 	 	 

	 	62	 	 	Veteran’s Affairs-No Bid

	 	 	 	 	 

	 	63	 	 	Veteran’s Affairs-Refund

	 	 	 	 	 

	 	64	 	 	Veteran’s Affairs-Buydown

	 	 	 	 	 

	 	65	 	 	Chapter 7 Bankruptcy

	 	 	 	 	 

	 	66	 	 	Chapter 11 Bankruptcy

	 	 	 	 	 

	 	67	 	 	Chapter 13 Bankruptcy







 









 






Calculation of Realized Loss/Gain Form 332 —  Instruction Sheet




NOTE: Do not net or combine items. Show all expenses individually and all credits as
separate line items. Claim packages are due on the remittance report date. Late submissions
may result in claims not being passed until the following month. The Servicer is responsible
to remit all funds pending loss approval and /or resolution of any disputed items.




	 	(a)	 	 
	 
	 	(b)	 	The numbers on the 332 form correspond with the numbers listed below.





Liquidation and Acquisition Expenses:




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





4-12. Complete as applicable. Required documentation:




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





13. The total of lines 1 through 12.



(c) Credits: 



14-21. Complete as applicable. Required documentation:




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





22. The total of lines 14 through 21.



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



Total Realized Loss (or Amount of Any Gain)



 









 









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




 









 











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




	 	 	 	 	 	 	 	 	 
	Prepared by:

	 	 
 

	 	Date: 
	 	 
 

	 	 
	 
	 	 	 	 	 	 	 	 
	Phone:

	 	 
 

	 	Email Address: 
	 	 
 

	 	 






	 	 	 	 	 
	Servicer Loan No.

	 	Servicer Name
	 	Servicer Address
	 
	 	 	 	 
	 
	 	 	 	 





	 	 	 	 	 
	WELLS FARGO BANK, N.A. Loan No.                                                             
	 
	 	 	 	 
	Borrower’s Name:

	 	 
 

	 	 
	Property Address:

	 	 
 

	 	 






	 	 	 	 	 	 	 
	Liquidation Type: REO Sale

	 	3rd Party Sale
	 	Short Sale
	 	Charge Off






Was this loan granted a Bankruptcy deficiency or cramdown            Yes            No




If “Yes”, provide deficiency or cramdown amount                                                             




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