SECURITY INSTRUMENTS RENDER THEM
UNENFORCEABLE AGAINST BORROWERS
THEY'VE BEEN PAID FOR YOUR MORTGAGE, AND
THEY'VE LOST THEIR SECURITY INTEREST IN
YOUR REAL PROPERTY.
DEMAND, BY CERTIFIED LETTER, THEY SEND
A SATISFACTION OF MORTGAGE
BY CERTIFIED LETTER, TO YOUR MORTGAGE
COMPANY, AND/OR BANK, TO YOUR COUNTIES
REGISTER OF DEEDS OFFICE, AND TO YOU, IMMEDIATELY.
Reaching a RMBS Pooling and Servicing Agreement
WHEN YOUR LENDER SELLS YOUR MORTGAGE NOTE,
THEY'VE BEEN PAID FOR YOUR HOME.
(Scroll down to page 58 item ii)
FIRST HORIZON HOME MORTGAGE OF KANSAS CITY
MORTGAGE BACKED ASSETS
BUNDLED TOGETHER, 1000'S OF RESIDENTIAL MORTGAGES
POOLED, SECURITIZED, SOLD
GOVERNMENT BACKED
(IF INVESTOR LOSES,
GOVERNMENT BAILS THEM OUT)
INVESTMENT "POOLS"
OF
MIXED RESIDENTIAL RISK (NOT!!)
MORTGAGE NOTES
I've HEARD EVERYTHING. BUT...somehow, you greedy money monger mortgage piggies keep getting government bailouts, keep foreclosing, keep promising, keep the ruse up by returning money which is only 1/11116th of what you've been enabled to make off of all you've been given. You'll keep American Families on the Foreclosure will keep rising, home buying will increase as prices decrease, the economy will never stabalize if Lenders are allowed to play God, give and take, be Master Servicer, and Master Futures Creator, "B" Servicer when purposes serve, even bankrupt if white beaches call. Or if it's finally time to put play away.
POOLING AND SERVICING AGREEMENT
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This Pooling and Servicing Agreement involves
THE BANK OF NEW YORK
FIRST HORIZON HOME LOAN CORPORATION OF KANSAS CITY
FIRST HORIZON ASSET SECURITIES INC
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Title: POOLING AND SERVICING AGREEMENT Governing Law: New York Date: 12/7/2005
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FIRST HORIZON ASSET SECURITIES INC.
Depositor
FIRST HORIZON HOME LOAN CORPORATION
Master Servicer
and
THE BANK OF NEW YORK
Trustee
-----------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2005
-----------------------------------------------------
FIRST HORIZON
ALTERNATIVE MORTGAGE SECURITIES TRUST
2005-FA10
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-FA10
TABLE OF CONTENTS
i
ii
iii
THIS POOLING AND SERVICING AGREEMENT, dated as of November 1, 2005, among
FIRST HORIZON ASSET SECURITIES INC., a Delaware corporation, as depositor (the
"Depositor"), FIRST HORIZON HOME LOAN CORPORATION, a Kansas corporation, as
master servicer (the "Master Servicer"), and THE BANK OF NEW YORK, a banking
corporation organized under the laws of the State of New York, as trustee (the
"Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of three separate REMICs, each having assets as
provided herein. The Certificates will represent the entire beneficial ownership
interest in the Trust Fund. The Regular Certificates will represent "regular
interests" in the Upper REMIC. The Class I-A-R Certificates will represent the
residual interests in the Lower REMIC, Middle REMIC and Upper REMIC, as
described in Section 2.7. The "latest possible maturity date" for federal income
tax purposes of all REMIC regular interests created hereby will be the Latest
Possible Maturity Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a different amount and, in addition, one
Residual Certificate representing the Tax Matters Person Certificate may be
issued in a different amount):
[Remainder of Page Intentionally Left Blank]
1
(1) The Pass-Through Rate with respect to any Distribution Date for the Class
I-A-1 Certificates is the per annum rate equal to (a) 4.800% with respect to the
first Distribution Date, and (b) thereafter, the lesser of (i) LIBOR plus 0.700%
and (ii) 5.500%, subject to a minimum rate of 0.700%.
(2) The Class I-A-2 Certificates are notional amount certificates and will
accrue interest during each Interest Accrual Period on a Notional Amount equal
to the total of the Class Certificate Balances of the Class I-A-1 and Class
I-A-7 Certificates. The initial Notional Amount of the Class I-A-2 Certificates
will be $254,993,215.
(3) The Pass-Through Rate with respect to any Distribution Date for the Class
I-A-2 Certificates is the per annum rate equal to (a) 0.600% with respect to the
first Distribution Date, and (b) thereafter, the lesser of (i) 4.700% minus
LIBOR and (ii) 4.700%, subject to a minimum rate of 0.000%.
(4) The Pass-Through Rate with respect to any Distribution Date for the Class
I-A-7 Certificates is the per annum rate equal to (a) 4.900% with respect to the
first Distribution Date, and (b) thereafter, the lesser of (i) LIBOR plus 0.800%
and (ii) 5.500%, subject to a minimum rate of 0.800%.
2
(5) The Class I-A-8 Certificates are Notional Amount Certificates and will
accrue interest during each Interest Accrual Period on a Notional Amount equal
to the Class Certificate Balance of the Class I-A-1 Certificates. The initial
Notional Amount of the Class I-A-8 Certificates will be $64,500,000.
(6) The Pass-Through Rate with respect to any Distribution Date for the Class
I-A-8 Certificates is the per annum rate equal to (a) 0.100% with respect to the
first Distribution Date, and (b) thereafter, the lesser of (i) 4.800% minus
LIBOR and (ii) 0.100%, subject to a minimum rate of 0.000%.
(7) The Class I-A-PO and Class II-A-PO Certificates are Principal Only
Certificates and will not accrue interest.
(8) The Pass-Through Rate on each Class of Subordinated Certificates is variable
and will be equal to the weighted average of the Designated Mortgage Pool Rates,
weighted on the basis of the Group Subordinate Amount for each Mortgage Pool.
The initial Pass-Through Rate on each Class of Subordinated Certificates for the
first Interest Accrual Period will be 5.482% per annum.
3
Accretion Directed Certificates....... None.
Accrual Certificates.................. None.
Accrual Components.................... None.
Book-Entry Certificates............... All Classes of Certificates other than
the Physical Certificates.
Certificate Group..................... With respect to Pool I, the Group I
Senior Certificates, and with respect to
Pool II, the Group II Senior
Certificates. The Subordinated
Certificates correspond to both of the
Mortgage Pools.
COFI Certificates..................... None.
Component Certificates................ None.
Components............................ None.
Delay Certificates.................... All interest-bearing Classes of
Certificates other than the Non-Delay
Certificates, if any.
ERISA-Restricted Certificates......... The Residual Certificates, Private
Certificates and Certificates of any
Class that no longer satisfy the
applicable rating requirement of the
Underwriters' Exemption.
Floating Rate Certificates............ The Class I-A-1 and Class I-A-7
Certificates.
Group I Senior Certificates........... The Class I-A-1, Class I-A-2, Class
I-A-3A, Class I-A-3B, Class I-A-4A, Class
I-A-4B, Class I-A-5, Class I-A-6, Class
I-A-7, Class I-A-8, Class I-A-PO and
Class I-A-R Certificates.
Group II Senior Certificates.......... The Class II-A-1 and Class II-A-PO
Certificates.
Inverse Floating Rate Certificates.... The Class I-A-2 and Class I-A-8
Certificates.
LIBOR Certificates.................... The Class I-A-1, Class I-A-2, Class I-A-7
and Class I-A-8 Certificates.
NAS Certificates...................... The Class I-A-4A and Class I-A-4B
Certificates.
Non-Delay Certificates................ The LIBOR Certificates.
Notional Amount Certificates.......... The Class I-A-2 and Class I-A-8
Certificates.
Offered Certificates.................. All Classes of Certificates other than
the Private Certificates.
Physical Certificates................. The Private Certificates and the Residual
Certificates.
Planned Principal Classes............. None.
Principal Only Certificates........... The Class I-A-PO and Class II-A-PO
Certificates.
Private Certificates.................. The Class I-A-PO, Class II-A-PO, Class
B-4, Class B-5 and Class B-6
Certificates.
Rating Agencies....................... S&P and Moody's; except for the purposes
of the Class B-4, Class B-5 and Class B-6
Certificates, S&P shall be the sole
Rating Agency. The Class B-6 Certificates
will not be rated
Regular Certificates.................. All Classes of Certificates, other than
the Residual Certificates.
4
Residual Certificates................. The Class I-A-R Certificates.
Retail/Lottery Certificates........... None.
Scheduled Certificates................ None.
Senior Certificates................... The Group I Senior Certificates and Group
II Senior Certificates, collectively.
Senior Mezzanine Certificates......... The Class I-A-3B, Class I-A-4B and Class
I-A-6 Certificates.
Subordinated Certificates............. The Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6
Certificates.
Super Senior Certificates............. The Class I-A-3A, Class I-A-4A and Class
I-A-5 Certificates.
Support Classes....................... None.
Targeted Principal Classes............ None.
Underwriters.......................... Citigroup Global Markets Inc. and UBS
Securities LLC
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
5
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: Not applicable.
Accretion Termination Date: Not applicable.
Accrual Amount: Not applicable.
Accrual Certificates: Not applicable.
Accrued Certificate Interest: For any Class of Certificates entitled to
distributions of interest for any Distribution Date, the interest accrued during
the related Interest Accrual Period at the applicable Pass-Through Rate on the
Class Certificate Balance (or Notional Amount, in the case of the Notional
Amount Certificates) of such Class of Certificates immediately prior to such
Distribution Date, less such Class' share of any Net Interest Shortfall.
Adjusted Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Master Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate less the related Expense Fee Rate.
Advance: The payment required to be made by the Master Servicer with
respect to any Distribution Date pursuant to Section 4.1, the amount of any such
payment being equal to the aggregate of payments of principal and interest (net
of the Master Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that the Master Servicer has
determined would constitute a Nonrecoverable Advance if advanced.
Aggregate Senior Percentage: For any Distribution Date, the percentage
equal to (x) the sum of the Class Certificate Balances of the Senior
Certificates of all Certificate Groups, divided by (y) the aggregate Pool
Principal Balance for both Mortgage Pools on such Distribution Date, in each
case prior to giving effect to any distributions on such Distribution Date
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allocable Share: With respect to any Class of Subordinated Certificates on
any Distribution Date, such Class' pro rata share (based on the Class
Certificate Balance of each Class entitled thereto) of each of the components of
the Subordinated Optimal Principal Amount for each Mortgage Pool; provided that,
solely for purposes of this definition, the applicable Subordinated Optimal
Principal Amount for each Mortgage Pool will be reduced by the amounts required
to be distributed to the related Class PO Certificates in respect of the
applicable Class PO Deferred Amount on such Distribution Date, and any such
reduction in the applicable Subordinate Optimal Principal Amount for a Mortgage
Pool shall reduce the amounts calculated pursuant to clauses (1), (4), (2), (3)
and (5) of the definition thereof, in that order, and the Class Certificate
Balances of each Class of Subordinated Certificates will be reduced by such
amounts in reverse order of priority until the respective Class Certificate
Balances of each Class of Subordinated Certificates has been reduced to zero;
provided further, that, except as provided in this Agreement, no Subordinated
Certificates (other than the Class of Subordinated Certificates with the highest
priority of distribution) shall be entitled on any Distribution Date to receive
distributions pursuant to clauses (2), (3) and (5) of the definition of
Subordinated Optimal Principal Amount unless the Class Prepayment Distribution
Trigger for such Class is satisfied for such Distribution Date.
6
Alternative Title Product: Any one of the following: (i) Lien Protection
Insurance issued by Integrated Loan Services or ATM Corporation of America, (ii)
a Mortgage Lien Report issued by EPN Solutions/ACRAnet, (iii) a Property Plus
Report issued by Rapid Refinance Service through SharperLending.com, or (iv)
such other alternative title insurance product that the Seller utilizes in
connection with its then current underwriting criteria.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the applicable subaccount of the Certificate Account at
the close of business on the related Determination Date on account of (i)
Principal Prepayments on the related Mortgage Pool received after the related
Prepayment Period and Liquidation Proceeds in respect of the related Mortgage
Pool received in the month of such Distribution Date and (ii) all Scheduled
Payments in the related Mortgage Pool due after the related Due Date.
Apportioned Principal Balance: For any Class of Subordinated Certificates
and any Distribution Date, an amount equal to the Class Certificate Balance of
such Class immediately prior to that Distribution Date multiplied by a fraction,
the numerator of which is the applicable Group Subordinate Amount for such
Distribution Date and the denominator of which is the sum of the Group
Subordinate Amounts for such Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the Appraised Value of
the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; (ii) with respect to a
Refinancing Mortgage Loan other than a Streamlined Documentation Mortgage Loan,
the value of the Mortgaged Property based upon the appraisal made at the time of
the origination of such Refinancing Mortgage Loan; and (iii) with respect to a
Streamlined Documentation Mortgage Loan, (a) if the loan-to-value ratio with
respect to the Original Mortgage Loan at the time of the origination thereof was
90% or less, the value of the Mortgaged Property based upon the appraisal made
at the time of the origination of the Original Mortgage Loan and (b) if the
loan-to-value ratio with respect to the Original Mortgage Loan at the time of
the origination thereof was greater than 90%, the value of the Mortgaged
Property based upon the appraisal (which may be a drive-by appraisal) made at
the time of the origination of such Streamlined Documentation Mortgage Loan.
Available Funds: For each Mortgage Pool, with respect to any Distribution
Date, an amount equal to the sum of:
(a) all scheduled installments of interest, net of the Master Servicing
Fee, the Trustee Fee and any amounts due to First Horizon in respect
of the Retained Yield on such Distribution Date, and all scheduled
installments of principal due in respect of the Mortgage Loans in
such Mortgage Pool on the Due Date in the month in which the
Distribution Date occurs and received before the related
Determination Date, together with any Advances in respect thereof;
(b) all Insurance Proceeds, Liquidation Proceeds and Unanticipated
Recoveries received in respect of the Mortgage Loans in such
Mortgage Pool during the calendar month before the Distribution
Date, which in each case is net of unreimbursed expenses incurred in
connection with a liquidation or foreclosure and unreimbursed
Advances, if any;
(c) all Principal Prepayments received in respect of the Mortgage Loans
in such Mortgage Pool during the related Prepayment Period, plus
interest received thereon, net of any Prepayment Interest Excess;
(d) any Compensating Interest in respect of Principal Prepayments in
Full received in respect of the Mortgage Loans in such Mortgage Pool
during the related Prepayment Period (or, in the case of the first
Distribution Date, from the Cut-off Date); and
(e) any Substitution Adjustment Amount or the Purchase Price for any
Deleted Mortgage Loan in the related Mortgage Pool or a Mortgage
Loan in the related Mortgage Pool repurchased by the Seller or the
Master Servicer as of such Distribution Date, reduced by amounts in
reimbursement for Advances previously made and other amounts that
the Master Servicer is entitled to be reimbursed for out of the
Certificate Account pursuant to this Agreement.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Bankruptcy Coverage Termination Date: The date on which the Bankruptcy
Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation
or Debt Service Reduction; provided, however, that a Bankruptcy Loss shall not
be deemed a Bankruptcy Loss hereunder so long as the Master Servicer has
notified the Trustee in writing that the Master Servicer is diligently pursuing
any remedies that may exist in connection with the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any related escrow payments in respect of such
Mortgage Loan are being advanced on a current basis by the Master Servicer, in
either case without giving effect to any Debt Service Reduction or Deficient
Valuation.
8
Bankruptcy Loss Coverage Amount: As of any Determination Date, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated to
the Certificates since the Cut-off Date and (ii) any permissible reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee to the effect that any such reduction will not result in a
downgrading of the then current ratings assigned to the Classes of Certificates
rated by it. As of any Distribution Date on or after the Cross-over Date, the
Bankruptcy Loss Coverage Amount will be zero.
Blanket Mortgage: The mortgage or mortgages encumbering the Cooperative
Property.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in the City of Dallas, or the State of Texas or
the city in which the Corporate Trust Office of the Trustee is located are
authorized or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account or Accounts created and
maintained by the Master Servicer pursuant to Section 3.5 with a depository
institution in the name of the Master Servicer for the benefit of the Trustee on
behalf of Certificateholders and designated "First Horizon Home Loan Corporation
in trust for the registered holders of First Horizon Asset Securities Inc.
Mortgage Pass-Through Certificates, Series 2005-FA10."
Certificate Group: As specified in the Preliminary Statement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: With respect to any Certificate and as of
any Distribution Date, the Certificate Principal Balance on the date of the
initial issuance of such Certificate, as reduced by:
(a) all amounts distributed on previous Distribution Dates on such
Certificate on account of principal,
(b) the principal portion of all Realized Losses previously allocated to
such Certificate, and
(c) in the case of a Subordinated Certificate, such Certificate's pro
rata share, if any, of the Subordinated Certificate Writedown Amount
for previous Distribution Dates.
Certificate Register: The register maintained pursuant to Section 5.2
hereof.
9
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Seller or any affiliate or agent of the Depositor
or the Seller shall be deemed not to be Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect such consent has
been obtained; provided, however, that if any such Person (including the
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof that requires the consent of the Holders of Certificates
of a particular Class as a condition to the taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of the Depositor or
any affiliate of the Depositor in determining which Certificates are registered
in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set forth in
the Preliminary Statement.
Class I-A-1 Corridor Contract: The transaction evidenced by that certain
Confirmation between the Separate Interest Trust and the Corridor Contract
Counterparty with a Trade Date of November 16, 2005 and a reference number of
737485.
Class I-A-1 Corridor Contract Administration Agreement: The Class I-A-1
Corridor Contract Administration Agreement dated as of November 30, 2005 by and
among the Separate Interest Trust, the Corridor Residual Owner and the Trustee.
Class I-A-1 Corridor Contract Termination Date: The Distribution Date
occurring in November 2016.
Class I-A-1 Yield Supplement Amount: For any Distribution Date on or prior
to the Class I-A-1 Corridor Contract Termination date on which the LIBOR exceeds
4.800%, an amount equal to interest for the related Interest Accrual Period on
the lesser of (a) the Class Certificate Balance of the Class I-A-1 Certificates
immediately prior to such Distribution Date and (b) the Class I-A-1 Corridor
Contract Notional Balance for such Distribution Date at a rate equal to the
excess of (i) the lesser of LIBOR and 8.800% over (ii) 4.800%.
Class I-A-7 Corridor Contract: The transaction evidenced by that certain
Confirmation between the Separate Interest Trust and the Corridor Residual Owner
with a Trade Date of November 16, 2005 and a reference number of 737478.
Class I-A-7 Corridor Contract Administration Agreement: The Class I-A-7
Corridor Contract Administration Agreement dated as of November 30, 2005 by and
among the Separate Interest Trust, the Corridor Contract Counterparty and the
Trustee.
Class I-A-7 Corridor Contract Termination Date: The Distribution Date
occurring in November 2016.
Class I-A-7 Yield Supplement Amount: For any Distribution Date on or prior
to the Class I-A-7 Corridor Contract Termination date on which the LIBOR exceeds
4.700%, an amount equal to interest for the related Interest Accrual Period on
the lesser of (a) the Class Certificate Balance of the Class I-A-7 Certificates
immediately prior to such Distribution Date and (b) the Class I-A-7 Corridor
Contract Notional Balance for such Distribution Date at a rate equal to the
excess of (i) the lesser of LIBOR and 8.700% over (ii) 4.700%.
10
Class I-A-PO Deferred Amount: With respect to the Class I-A-PO
Certificates and any Distribution Date through the Cross-over Date, the sum of
(1) the Class I-A-PO Percentage of the principal portion of Non-Excess Losses on
a Discount Mortgage Loan in Pool I allocated to the Class I-A-PO Certificates on
such date, and (2) all amounts previously allocated to the Class I-A-PO
Certificates in respect of such losses and not distributed to the Class I-A-PO
Certificates on prior Distribution Dates.
Class I-A-PO Percentage: (a) With respect to any Discount Mortgage Loan in
Pool I, the fraction, expressed as a percentage, equal to (5.50% - Adjusted Net
Mortgage Rate) divided by 5.50%, and (b) with respect to any Non-Discount
Mortgage Loan in Pool I, 0%.
Class II-A-PO Deferred Amount: With respect to the Class II-A-PO
Certificates and any Distribution Date through the Cross-over Date, the sum of
(1) the Class II-A-PO Percentage of the principal portion of Non-Excess Losses
on a Discount Mortgage Loan in Pool II allocated to the Class II-A-PO
Certificates on such date, and (2) all amounts previously allocated to the Class
II-A-PO Certificates in respect of such losses and not distributed to the Class
II-A-PO Certificates on prior Distribution Dates.
Class II-A-PO Percentage: (a) With respect to any Discount Mortgage Loan
in Pool II, the fraction, expressed as a percentage, equal to (5.25% - Adjusted
Net Mortgage Rate) divided by 5.25%, and (b) with respect to any Non-Discount
Mortgage Loan in Pool II, 0%.
Class Certificate Balance: With respect to any Class of Certificates and
as of any Distribution Date the aggregate of the Certificate Principal Balances
of all Certificates of such Class as of such date, plus the amount of any
Unanticipated Recoveries added to the Class Certificate Balance of such Class of
Certificates pursuant to Section 4.2(g).
Class PO Certificates: The Class I-A-PO and Class II-A-PO Certificates.
Class PO Deferred Amount: (a) With respect to the Class I-A-PO
Certificates, the Class I-A-PO Deferred Amount; and (b) with respect to the
Class II-A-PO Certificates, the Class II-A-PO Deferred Amount.
Class PO Deferred Payment Writedown Amount: For any Distribution Date and
any Class of Principal Only Certificates, the amount, if any, distributed on
such date in respect of the related Class PO Deferred Amount pursuant to Section
4.2(a)(iv) herein. The Subordinated Certificate Writedown Amount and the Class
PO Deferred Payment Writedown Amount will be allocated to the Classes of
Subordinated Certificates in inverse order of priority, until the Class
Certificate Balance of each such Class has been reduced to zero.
Class PO Principal Distribution Amount: With respect to each Distribution
Date and any Class of Principal Only Certificates, an amount equal to the sum
of:
11
(1) the applicable PO Percentage of all Scheduled Payments of
principal due on each Mortgage Loan in the related Mortgage Pool on the
first day of the month in which the Distribution Date occurs, as specified
in the amortization schedule at the time applicable thereto, after
adjustment for previous principal prepayments and the principal portion of
Debt Service Reductions after the Bankruptcy Loss Coverage Amount has been
reduced to zero, but before any adjustment to such amortization schedule
by reason of any other bankruptcy or similar proceeding or any moratorium
or similar waiver or grace period;
(2) the applicable PO Percentage of the Stated Principal Balance of
each Mortgage Loan in the related Mortgage Pool which was the subject of a
Principal Prepayment in Full received by the Master Servicer during the
related Prepayment Period;
(3) the applicable PO Percentage of the sum of (a) all partial
Principal Prepayments for each Mortgage Loan in the related Mortgage Pool
received by the Master Servicer during the related Prepayment Period and
(b) all Unanticipated Recoveries in respect of each Mortgage Loan in the
related Mortgage Pool received by the Master Servicer during the calendar
month preceding such Distribution Date;
(4) the applicable PO Percentage of the sum of (a) the net
Liquidation Proceeds allocable to principal on each Mortgage Loan in the
related Mortgage Pool which became a Liquidated Mortgage Loan during the
related Prepayment Period, other than Mortgage Loans described in clause
(b), and (b) the principal balance of each Mortgage Loan in the related
Mortgage Pool that was purchased by a private mortgage insurer during the
related Prepayment Period as an alternative to paying a claim under the
related mortgage insurance policy; and
(5) the applicable PO Percentage, of the sum of (a) the Stated
Principal Balance of each Mortgage Loan in the related Mortgage Pool which
was repurchased by the Seller in connection with such Distribution Date,
and (b) the difference, if any, between the Stated Principal Balance of a
Mortgage Loan in the related Mortgage Pool that has been replaced by the
Seller with a Substitute Mortgage Loan pursuant to this Agreement in
connection with such Distribution Date and the Stated Principal Balance of
such Substitute Mortgage Loan.
For purposes of clauses (2) and (5) above, the Stated Principal Balance of
a Mortgage Loan will be reduced by the amount of any Deficient Valuation that
occurred prior to the reduction of the Bankruptcy Loss Coverage Amount to zero.
Class Prepayment Distribution Trigger: For a Class of Subordinated
Certificates (other than the Class of Subordinated Certificates with the highest
priority of distribution), a trigger that is satisfied on any Distribution Date
on which a fraction (expressed as a percentage), the numerator of which is the
aggregate of the Class Certificate Balance of such Class and each Class
subordinate thereto, if any, and the denominator of which is the aggregate Pool
Principal Balance for both Mortgage Pools with respect to such Distribution
Date, equals or exceeds such percentage calculated as of the Closing Date.
12
Closing Date: November 30, 2005.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COFI: Not applicable.
COFI Certificates: Not applicable.
Compensating Interest: As to any Distribution Date and any Principal
Prepayment in respect of a Mortgage Loan that is received during the period from
the sixteenth day of the month (or, in the case of the first Distribution Date,
from the Cut-off Date) prior to the month of such Distribution Date through the
last day of such month, an additional payment to the related Mortgage Pool made
by the Master Servicer, to the extent funds are available from the Master
Servicing Fee, equal to the amount of interest at the Adjusted Net Mortgage Rate
for that Mortgage Loan from the date of the prepayment to the related Due Date;
provided that the aggregate of all such payments as to the Mortgage Loans in a
Mortgage Pool shall not exceed 0.0083% of the Pool Principal Balance of such
Mortgage Pool as of the related Determination Date, and provided further that if
a partial Principal Prepayment is applied on or after the first day of the month
following the month of receipt, no additional payment is required for such
Principal Prepayment.
Component: Not applicable.
Component Balance: Not applicable.
Component Certificates: Not applicable.
Cooperative Corporation: The entity that holds title (fee or an acceptable
leasehold estate) to the real property and improvements constituting the
Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Coop Shares: Shares issued by a Cooperative Corporation.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The designated office of the Trustee in the State
of New York at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at The Bank of New York, 101 Barclay
Street, 8W, New York, New York 10286 (Attn: Corporate Trust Mortgage-Backed
Securities Group, First Horizon Asset Securities Inc. Series 2005-FA10),
facsimile no. (212) 815-3986, and which is the address to which notices to and
correspondence with the Trustee should be directed.
13
Corresponding Classes: As to any Middle REMIC Interest identified in
Section 2.7, the Class or Classes that are identified in Section 2.7 as
corresponding to such Middle REMIC interest.
Corresponding Classes of Middle REMIC Interests: As to any Lower REMIC
Interest identified in Section 2.7, the Middle REMIC Interest or Middle REMIC
Interests that are identified in Section 2.7 corresponding to such Lower REMIC
Interest.
Corridor Contract: The Class I-A-1 Corridor Contract or the Class I-A-7
Corridor Contract, as the context may require.
Corridor Contract Account: Has the meaning specified in the applicable
Corridor Contract Administration Agreement.
Corridor Contract Administrator: The Bank of New York and its successors
and permitted assigns under the applicable Corridor Contract Administration
Agreement.
Corridor Contract Administration Agreement: The Class I-A-1 Corridor
Contract Administration Agreement or the Class I-A-7 Corridor Contract
Administration Agreement, as the context may require.
Corridor Contract Counterparty: Swiss Re Financial Products Corporation
and its successors and permitted assigns.
Corridor Contract Notional Balance: With respect to a Corridor Contract,
the "Notional Amount" specified in such Corridor Contract.
Corridor Contract Termination Date: The Class I-A-1 Corridor Contract
Termination Date or the Class I-A-7 Corridor Contract Termination Date, as the
context may require.
Corridor Reserve Fund: A fund created as part of the Separate Interest
Trust pursuant to Section 4.7(a) of this Agreement.
Corridor Residual Owner: As defined in Section 4.7(b).
Cross-over Date: The Distribution Date on which the Class Certificate
Balance of each Class of Subordinated Certificates has been reduced to zero.
Custodial Agreement: The Custodial Agreement dated as of November 30, 2005
by and among the Trustee, the Master Servicer and the Custodian.
Custodian: First Tennessee Bank National Association, a national banking
association, and its successors and assigns, as custodian under the Custodial
Agreement.
Cut-off Date: November 1, 2005.
14
Cut-off Date Pool Principal Balance: With respect to Pool I,
$440,014,985.79, and with respect to Pool II, $34,000,518.87.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction in a proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any reduction that results in a permanent forgiveness of principal.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.2 or 2.3.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then-outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or reduction
results from an order of such court which is final and non-appealable in a
proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.2(e).
Delay Certificates: As specified in the Preliminary Statement.
Delay Delivery Mortgage Loans: The Mortgage Loans for which all or a
portion of a related Mortgage File is not delivered to the Trustee on the
Closing Date. The number of Delay Delivery Mortgage Loans shall not exceed 25%
of the aggregate number of Mortgage Loans as of the Closing Date.
Deleted Mortgage Loan: As defined in Section 2.3(b) hereof.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or the
Percentage Interest appearing on the face thereof.
Depositor: First Horizon Asset Securities Inc., a Delaware corporation, or
its successor in interest.
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
15
Designated Mortgage Pool Rates: With respect to Pool I, 5.50%, and with
respect to Pool II, 5.25%.
Determination Date: As to any Distribution Date, the earlier of (i) the
third Business Day after the 15th day of each month, and (ii) the second
Business Day prior to the related Distribution Date.
Discount Mortgage Loan: Any Mortgage Loan in Pool I with an Adjusted Net
Mortgage Rate of less than 5.50% and any Mortgage Loan in Pool II with an
Adjusted Net Mortgage Rate of less than 5.25%.
Distribution Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.5 in the name of the Trustee for the
benefit of the Certificateholders and designated "The Bank of New York, in trust
for registered Holders of First Horizon Asset Securities Inc. Mortgage
Pass-Through Certificates, Series 2005-FA10." Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 1:30 p.m.
Central time on the Business Day immediately preceding such Distribution Date.
Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in December 2005.
Due Date: With respect to any Distribution Date, the first day of the
month in which the related Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF, as applicable) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with (a) the trust department of a federal or state
chartered depository institution or (b) a trust company, acting in its fiduciary
capacity or (iv) any other account acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
16
ERISA-Qualifying Underwriting: With respect to any ERISA-Restricted
Certificate, a best efforts or firm commitment underwriting or private placement
that meets the requirements of the Underwriters' Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.6(a) hereof.
Event of Default: As defined in Section 7.1 hereof.
Excess Loss: The amount of any (i) Fraud Loss realized after the Fraud
Loss Coverage Termination Date, (ii) Special Hazard Loss realized after the
Special Hazard Coverage Termination Date or (iii) Deficient Valuation realized
after the Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the amount,
if any, by which the sum of any Liquidation Proceeds, Insurance Proceeds and/or
Unanticipated Recoveries in respect of such Mortgage Loan received in the
calendar month in which such Mortgage Loan became a Liquidated Mortgage Loan,
net of any amounts previously reimbursed to the Master Servicer as
Nonrecoverable Advance(s) with respect to such Mortgage Loan pursuant to Section
3.8(a)(iii), exceeds (i) the unpaid principal balance of such Liquidated
Mortgage Loan as of the Due Date in the month in which such Mortgage Loan became
a Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage Rate from
the Due Date as to which interest was last paid or advanced (and not reimbursed)
to Certificateholders up to the Due Date applicable to the Distribution Date
immediately following the calendar month during which such liquidation occurred.
Expense Fee Rate: As to each Mortgage Loan, the sum of the related Master
Servicing Fee Rate and the Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.
First Horizon: First Horizon Home Loan Corporation, a Kansas corporation
and an indirect wholly owned subsidiary of First Horizon National Corporation, a
Tennessee corporation.
Fitch: Fitch Ratings and its successors and/or assigns. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 11.5(b) the address for notices to Fitch shall be Fitch, Inc., One State
Street Plaza, New York, New York 10004, Attention: Residential Mortgage
Surveillance Group, or such other address as Fitch may hereafter furnish to the
Depositor and the Master Servicer.
17
FNMA: The Federal National Mortgage Association, a federally chartered and
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act, or any successor thereto.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a loss
by reason of the denial of coverage under any related Primary Insurance Policy
because of such fraud, dishonesty or misrepresentation.
Fraud Loss Coverage Amount: As of the Closing Date, $9,480,310. As of any
Distribution Date from the first anniversary of the Cut-off Date and prior to
the fifth anniversary of the Cut-off Date, the Fraud Loss Coverage Amount will
equal $4,740,155 minus the aggregate amount of Fraud Losses that would have been
allocated to the Subordinated Certificates in the absence of the Loss Allocation
Limitation since the Cut-off Date. As of any Distribution Date on or after the
earlier of the Cross-over Date or the fifth anniversary, the Fraud Loss Coverage
Amount shall be zero.
Fraud Loss Coverage Termination Date: The date on which the Fraud Loss
Coverage Amount is reduced to zero.
FTBNA: First Tennessee Bank National Association, a national banking
association.
Group I Senior Certificates: As specified in the Preliminary Statement.
Group II Senior Certificates: As specified in the Preliminary Statement.
Group Subordinate Amount: For a Mortgage Pool and any Distribution Date,
the excess of (a) the Pool Principal Balance of such Mortgage Pool for the
immediately preceding Distribution Date, over (b) the aggregate Class
Certificate Balance of the Senior Certificates of the related Certificate Group
immediately prior to that Distribution Date.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Bankruptcy Coverage Amount: $150,000.
Initial Component Balance: Not applicable.
Initial LIBOR Rate: With respect to the calculation of the initial
Pass-Through Rate for the LIBOR Certificates, 4.10% per annum.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect, including any replacement policy or policies for any Insurance Policies.
18
Insurance Proceeds: Proceeds paid by an insurer pursuant to any Insurance
Policy, in each case other than any amount included in such Insurance Proceeds
in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay Certificates
and any Distribution Date, the calendar month prior to the month of such
Distribution Date. With respect to any Non-Delay Certificates and any
Distribution Date, the one month period commencing on the 25th day of the month
preceding the month in which such Distribution Date occurs and ending on the
24th day of the month in which such Distribution Date occurs.
Latest Possible Maturity Date: As to the Group I Senior Certificates, each
Class of Subordinated Certificates, and each Lower REMIC Interest and each
Middle REMIC Interest, the Distribution Date following the third anniversary of
the scheduled maturity date of the Mortgage Loan in Pool I having the latest
scheduled maturity date as of the Cut-off Date. As to the Group II Senior
Certificates, the Distribution Date following the third anniversary of the
scheduled maturity date of the Mortgage Loan in Pool II having the latest
scheduled maturity date as of the Cut-off Date.
Lender PMI Mortgage Loan: Not applicable.
LIBOR: The London interbank offered rate for one month United States
dollar deposits calculated in the manner described in Section 4.9.
LIBOR Business Day: Any day on which banks in London, England and The City
of New York are open and conducting transactions in foreign currency and
exchange.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: For the LIBOR Certificates, the second LIBOR
Business Day immediately preceding the commencement of each Interest Accrual
Period for each LIBOR Certificate.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Master Servicer has determined (in accordance with this Agreement) that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan, including the final disposition of an REO Property.
Liquidation Proceeds: All cash amounts, other than Insurance Proceeds and
Unanticipated Recoveries, received in connection with the partial or complete
liquidation of defaulted Mortgage Loans, whether through trustee's sale,
foreclosure sale or otherwise or amounts received in connection with any
condemnation or partial release of a Mortgaged Property and any other proceeds
received in connection with an REO Property, less the sum of related
unreimbursed Master Servicing Fees, Servicing Advances and Advances.
19
Loan-to-Value Ratio: With respect to any Mortgage Loan and as of any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Loss Allocation Limitation: As defined in Section 4.4(h).
Lost Mortgage Note: Any Mortgage Note, the original of which was
permanently lost or destroyed and has not been replaced.
Lower REMIC: The segregated pool of assets consisting of the Trust Fund
but excluding the Retained Yield, the Middle REMIC Interests, the Lower REMIC
Interests, the RL Interest, the RM Interest, the RU Interest and the Separate
Interest Trust.
Lower REMIC Interests: The REMIC regular interests, within the meaning of
the REMIC Provisions, issued by the Lower REMIC as set forth in Section 2.7.
Maintenance: With respect to any Cooperative Unit, the rent paid by the
Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.
Majority in Interest: As to any Class of Regular Certificates, the Holders
of Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
Master Servicer: First Horizon Home Loan Corporation, a Kansas
corporation, and its successors and assigns, in its capacity as master servicer
hereunder.
Master Servicer Advance Date: As to any Distribution Date, 1:30 p.m.
Central time on the Business Day immediately preceding such Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount payable out of each full payment of interest received on such Mortgage
Loan and equal to one-twelfth of the Master Servicing Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the Due Date in the month
of such Distribution Date (prior to giving effect to any Scheduled Payments due
on such Mortgage Loan on such Due Date), subject to reduction as provided in
Section 3.14.
Master Servicing Fee Rate: For each Mortgage Loan a per annum rate equal
to 0.369%.
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(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
20
Middle REMIC: The segregated pool of assets consisting of the Lower REMIC
Interests.
Middle REMIC Interests: The REMIC regular interests, within the meaning of
the REMIC Provisions, issued by the Middle REMIC as set forth in Section 2.7.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MLPA: The Mortgage Loan Purchase Agreement dated as of November 30, 2005,
by and between First Horizon Home Loan Corporation, as seller, and First Horizon
Asset Securities Inc., as purchaser, as related to the transfer, sale and
conveyance of the Mortgage Loans.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.6.
Moody's: Moody's Investors Service, Inc. and its successors and/or
assigns. If Moody's is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 11.5(b) the address for notices to Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New York, New York
10007, Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on an estate in fee simple or leasehold interest in real property securing
a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.1(b) hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Master Servicer to reflect the addition of Substitute Mortgage
Loans and the deletion of Deleted Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Schedule I, setting
forth the following information with respect to each Mortgage Loan:
(A) the loan number;
(B) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(C) the maturity date;
(D) the original principal balance;
(E) the Cut-off Date Principal Balance;
(F) the first payment date of the Mortgage Loan;
21
(G) the Scheduled Payment in effect as of the Cut-off Date;
(H) the Loan-to-Value Ratio at origination;
(I) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(J) a code indicating whether the residential dwelling is either
(a) a detached single family dwelling (b) a dwelling in a de
minimis PUD, (c) a condominium unit or PUD (other than a de
minimis PUD), (d) a two-to-four unit residential property or
(e) a Cooperative Unit;
(K) the Mortgage Rate;
(L) the purpose for the Mortgage Loan;
(M) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(N) the Master Servicing Fee for the Mortgage Loan; and
(O) a code indicating whether the Mortgage Loan is a MERS Mortgage
Loan.
Such schedule shall also set forth the total of the amounts described
under (4) and (5) above for all of the Mortgage Loans.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: Any of Pool I or Pool II.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time, net of any insurance premium charged by the mortgagee to obtain or
maintain any Primary Insurance Policy.
Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
NAS Certificates: As specified in the Preliminary Statement.
22
NAS Distribution Percentage: 0% through the Distribution Date in November
2010; 30% of the applicable NAS Percentage thereafter through the Distribution
Date in November 2011; 40% of the applicable NAS Percentage thereafter through
the Distribution Date in November 2012; 60% of the applicable NAS Percentage
thereafter through the Distribution Date in November 2013; 80% of the applicable
NAS Percentage thereafter through the Distribution Date in November 2014; and
100% of the applicable NAS Percentage thereafter.
NAS Percentage: 0% through the Distribution Date in November 2010, and for
any Distribution Date thereafter, the lesser of (x) 100% and (y) the percentage
obtained by dividing (1) the aggregate Class Certificate Balances of the NAS
Certificates immediately preceding such Distribution Date by (2) the aggregate
Class Certificate Balances of all Classes of Senior Certificates related to Pool
I (other than the Notional Amount Certificates and the Class I-A-PO
Certificates) immediately preceding such Distribution Date.
NAS Principal Distribution Amount: For any Distribution Date, the total of
the amounts described in clauses (1) through (5) of the definition of Senior
Optimal Principal Amount for Pool I for such date multiplied by the NAS
Distribution Percentage for such date.
National Cost of Funds Index: The National Monthly Median Cost of Funds
Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.
Net Interest Shortfall: For any Distribution Date and each Mortgage Pool,
the sum of (a) the amount of interest which would otherwise have been received
for any Mortgage Loan in such Mortgage Pool that was the subject of (x) a Relief
Act Reduction or (y) a Special Hazard Loss, Fraud Loss, or Deficient Valuation,
after the exhaustion of the respective amounts of coverage for those types of
losses provided by the Subordinated Certificates; and (b) any Net Prepayment
Interest Shortfalls in respect of such Mortgage Pool.
Net Prepayment Interest Shortfalls: As to any Distribution Date and each
Mortgage Pool, the amount by which the aggregate of Prepayment Interest
Shortfalls in respect of the Mortgage Loans in such Mortgage Pool during the
related Prepayment Period exceeds an amount equal to the Compensating Interest
paid in respect of such Mortgage Loans, if any, for such Distribution Date.
Non-Class I-A-PO Percentage: (a) With respect to a Discount Mortgage Loan
in Pool I, the fraction, expressed as a percentage, equal to the Adjusted Net
Mortgage Rate divided by 5.50%, and (b) with respect to each Non-Discount
Mortgage Loan in Pool I, 100%.
Non-Class II-A-PO Percentage: (a) With respect to a Discount Mortgage Loan
in Pool II, the fraction, expressed as a percentage, equal to the Adjusted Net
Mortgage Rate divided by 5.25%, and (b) with respect to each Non-Discount
Mortgage Loan in Pool II, 100%.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Discount Mortgage Loan: Any Mortgage Loan in Pool I with an Adjusted
Net Mortgage Rate that is equal to or greater than 5.50% per annum and any
Mortgage Loan in Pool II with an Adjusted Net Mortgage Rate that is equal to or
greater than 5.25% per annum.
23
Non-Excess Loss: Any Realized Loss other than an Excess Loss.
Non-PO Percentage: (a) With respect to Pool I, the Non-Class I-A-PO
Percentage, and (b) with respect to Pool II, the Non-Class II-A-PO Percentage.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.2 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Notional Amount: As specified in the Preliminary Statement.
Notional Amount Component: Not applicable.
Notional Amount Certificates: As specified in the Preliminary Statement.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A Certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii), if provided for in
this Agreement, signed by a Servicing Officer, as the case may be, and delivered
to the Depositor and the Trustee, as the case may be, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Master Servicer, including, in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i) in
fact be independent of the Depositor and the Master Servicer, (ii) not have any
direct financial interest in the Depositor or the Master Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Optional Termination: The termination of the trust created hereunder in
connection with the purchase of the Mortgage Loans pursuant to Section 9.1(a)
hereof.
Original Group Subordinate Amount: With respect to a Mortgage Pool, the
related Group Subordinate Amount as of the Closing Date.
Original Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
24
Original Subordinated Principal Balance: The aggregate of the Class
Certificate Balances of the Subordinated Certificates as of the Closing Date.
OTS: The Office of Thrift Supervision.
Outside Reference Date: Not applicable.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership interest
in such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: For any interest bearing Class of Certificates, the per
annum rate set forth or calculated in the manner described in the Preliminary
Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each
Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of
any state thereof and subject to supervision and examination
by federal and/or state banking authorities, provided that the
commercial paper and/or long term unsecured debt obligations
of such depository institution or trust company (or in the
case of the principal depository institution in a holding
company system, the commercial paper or long-term unsecured
debt obligations of such holding company, but only if Moody's
is not a Rating Agency) are then rated one of the two highest
long-term and/or the highest short-term ratings of each Rating
Agency for such securities;
25
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent
that such deposits are fully insured by the FDIC and receiving
the highest short-term debt rating of each Rating Agency;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation and receiving the
highest short-term debt rating of each Rating Agency and
containing, at the time of the issuance of such agreements,
such terms and conditions as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by either Rating Agency;
(vii) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as
principal) described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face amount thereof) bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the
United States or any state thereof which, at the time of such
investment, have one of the two highest ratings of each Rating
Agency (except if the Rating Agency is Moody's or S&P, such
rating shall be the highest commercial paper rating of Moody's
or S&P, as applicable, for any such securities);
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if Fitch is a
Rating Agency and has not rated the portfolio, the highest
rating assigned by Moody's) and restricted to obligations
issued or guaranteed by the United States of America or
entities whose obligations are backed by the full faith and
credit of the United States of America and repurchase
agreements collateralized by such obligations; and
(x) such other investments bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by either Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
26
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument.
Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(l) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) an "electing large
partnership" as defined in section 775 of the Code, (vi) a Person that is not
(a) a citizen or resident of the United States, (b) a corporation, partnership,
or other entity created or organized in or under the laws of the United States,
any state thereof or the District of Columbia, (c) an estate whose income from
sources without the United States is includible in gross income for United
States federal income tax purposes regardless of its connection with the conduct
of a trade or business within the United States or (d) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust, unless such Person
has furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form W-8ECI or any applicable successor form, and (vii) any
other Person so designated by the Depositor based upon an Opinion of Counsel
that the Transfer of an Ownership Interest in a Residual Certificate to such
Person may cause any REMIC created hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding; provided, however, that if a
person is classified as a partnership under the Code, such person shall only be
a Permitted Transferee if all of its beneficial owners are described in
subclauses (a), (b), (c) or (d) of clause (vi) and the governing documents of
such person prohibits a transfer of any interest in such person to any person
described in clause (vi). The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality of
the United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Planned Principal Classes: Not applicable.
PO Percentage: (a) With respect to Pool I, the Class I-A-PO Percentage,
and (b) with respect to Pool II, the Class II-A-PO Percentage.
27
Pool I: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool I.
Pool II: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool II.
Pool Principal Balance: For a Mortgage Pool, with respect to any
Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans in such Mortgage Pool which were Outstanding Mortgage Loans on
the Due Date in the month preceding the month of such Distribution Date, and for
the first Distribution Date, as of the Closing Date, less any Principal
Prepayments received on or after such Due Date and distributed to
Certificateholders on the prior Distribution Date.
Prepayment Interest Excess: As to any Principal Prepayment received by the
Master Servicer from the first day through the fifteenth day of any calendar
month (other than the calendar month in which the Cut-off Date occurs), all
amounts paid by the related Mortgagor in respect of interest on such Principal
Prepayment. All Prepayment Interest Excess shall be paid to the Master Servicer
as additional master servicing compensation.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage Loan
and Principal Prepayment received (a) during the period from the sixteenth day
of the month preceding the month of such Distribution Date (or, in the case of
the first Distribution Date, from the Cut-off Date) through the last day of such
month, in the case of a Principal Prepayment in Full, or (b) during the month
preceding the month of such Distribution Date, in the case of a partial
Principal Prepayment, the amount, if any, by which one month's interest at the
related Adjusted Mortgage Rate on such Principal Prepayment exceeds the amount
of interest actually paid by the Mortgagor in connection with such Principal
Prepayment.
Prepayment Period: (a) With respect to any Principal Prepayments in Full
and any Distribution Date, the period from the sixteenth day of the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, from the Cut-off Date) through the fifteenth day of the month
of such Distribution Date, and (b) with respect to any other Principal
Prepayments and any Distribution Date, the month preceding the month of such
Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.
Principal Balance Schedules: Not applicable.
Principal Only Certificates: As specified in the Preliminary Statement.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.
28
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire principal balance of a Mortgage Loan.
Private Certificates: As specified in the Preliminary Statement.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
PUD: Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be purchased
by the Seller pursuant to Section 2.2 or 2.3 hereof or purchased at the option
of the Master Servicer pursuant to Section 3.11, an amount equal to the sum of
(i) 100% of the unpaid principal balance of the Mortgage Loan on the date of
such purchase, (ii) accrued interest thereon at the applicable Mortgage Rate (or
at the applicable Adjusted Mortgage Rate if the purchaser is the Master
Servicer) from the date through which interest was last paid by the Mortgagor to
the Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders, and (iii) any costs and damages incurred by the Trust in
connection with the noncompliance of such Mortgage Loan with any specifically
applicable predatory or abusive lending law.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee. References herein to
a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus
(ii) interest at the Adjusted Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced (and not reimbursed) to Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) any Liquidation Proceeds, Insurance Proceeds
and/or Unanticipated Recoveries received during the month in which such
liquidation occurred (or during the calendar month preceding the related
Distribution Date, as applicable), to the extent applied as recoveries of
interest at the Adjusted Net Mortgage Rate and to principal of the Liquidated
Mortgage Loan. With respect to each Mortgage Loan, other than a Liquidated
Mortgage Loan, which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation.
29
Recognition Agreement: With respect to any Cooperative Loan, an agreement
between the Cooperative Corporation and the originator of such Mortgage Loan
which establishes the rights of such originator in the Cooperative Property.
Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which such
Distribution Date occurs.
Reference Bank: A leading bank with an established place of business in
London engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, not controlled by, or under the common control with, the
Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection with
the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act: The Servicemembers Civil Relief Act or any similar state or
local legislation or regulations.
Relief Act Reductions: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which interest
collectible on such Mortgage Loan for the most recently ended calendar month is
less than interest accrued thereon for such month pursuant to the Mortgage Note.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation, revenue
ruling, revenue procedure or other official announcement or interpretation
relating to REMICs and the REMIC Provisions issued after the Closing Date.
REMIC Pool: Either of the Lower REMIC, Middle REMIC or Upper REMIC.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
30
Request for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits L and M, as
appropriate.
Required Coupon: With respect to Pool I, 5.875% per annum, and with
respect to Pool II, 5.625% per annum.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Required Recordation States: The states of Florida, Maryland and
Mississippi.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Agreement and also
to whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
Retail/Lottery Certificates: Not applicable.
Retained Yield: As to each Mortgage Loan and any Distribution Date, (i) an
amount payable to First Horizon Home Loan Corporation out of each full payment
of interest received on such Mortgage Loan and equal to one-twelfth of the
Retained Yield Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the Due Date in the month of such Distribution Date (prior to giving
effect to any Scheduled Payments due on such Mortgage Loan on such Due Date) and
(ii) each prepayment penalty received, if any.
Retained Yield Rate: For any Non-Discount Mortgage Loan, a per annum rate
equal to the excess of (a) the applicable Mortgage Rate over (b) the Required
Coupon. For any Discount Mortgage Loan, 0%.
RL Interest: The REMIC residual interest, within the meaning of the REMIC
Provisions, issued by the Lower REMIC, which shall be represented by the Class
I-A-R Certificate.
RM Interest: The REMIC residual interest, within the meaning of the REMIC
Provisions, issued by the Middle REMIC, which shall be represented by the Class
I-A-R Certificate.
RU Interest: The REMIC residual interest, within the meaning of the REMIC
Provisions, issued by the Upper REMIC, which shall be represented by the Class
I-A-R Certificate.
Scheduled Balances: Not applicable.
Scheduled Certificates: Not applicable.
31
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan which,
unless otherwise specified herein, shall give effect to any related Debt Service
Reduction and any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: The security agreement with respect to a Cooperative
Loan.
Seller: First Horizon Home Loan Corporation, a Kansas corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans pursuant
to the MLPA.
Senior Certificates: As specified in the Preliminary Statement.
Senior Final Distribution Date: For each Certificate Group, the
Distribution Date on which the Class Certificate Balance of each Class of
related Senior Certificates has been reduced to zero.
Senior Mezzanine Certificates: As specified in the Preliminary Statement.
Senior Optimal Principal Amount: As to a Mortgage Pool and with respect to
each Distribution Date, an amount equal to the sum of:
(1) the related Senior Percentage of the applicable Non-PO
Percentage of all Scheduled Payments of principal due on each Mortgage Loan in
such Mortgage Pool on the first day of the month in which the Distribution Date
occurs, as specified in the amortization schedule at the time applicable thereto
after adjustment for previous principal prepayments and the principal portion of
Debt Service Reductions after the Bankruptcy Loss Coverage Amount has been
reduced to zero, but before any adjustment to such amortization schedule by
reason of any other bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period;
(2) the related Senior Prepayment Percentage of the applicable
Non-PO Percentage of the Stated Principal Balance of each Mortgage Loan in such
Mortgage Pool which was the subject of a Principal Prepayment in Full received
by the Master Servicer during the applicable Prepayment Period;
(3) the related Senior Prepayment Percentage of the applicable
Non-PO Percentage of the sum of (a) all partial Principal Prepayments in respect
of each Mortgage Loan in such Mortgage Pool received during the applicable
Prepayment Period and (b) all Unanticipated Recoveries in respect of each
Mortgage Loan in such Mortgage Pool received during the calendar month preceding
such Distribution Date;
(4) the lesser of:
(a) the related Senior Prepayment Percentage of the sum of (x) the
applicable Non-PO Percentage of the Liquidation Proceeds
allocable to principal on each Mortgage Loan in such Mortgage
Pool which became a Liquidated Mortgage Loan during the
related Prepayment Period, other than Mortgage Loans described
in clause (y), and (y) the applicable Non-PO Percentage of the
Stated Principal Balance of each Mortgage Loan in such
Mortgage Pool that was purchased by a private mortgage insurer
during the related Prepayment Period as an alternative to
paying a claim under the related Insurance Policy; and
32
(b)(i) the related Senior Percentage of the sum of (x) the
applicable Non-PO Percentage of the Stated Principal Balance
of each Mortgage Loan in such Mortgage Pool which became a
Liquidated Mortgage Loan during the related Prepayment Period,
other than Mortgage Loans described in clause (y), and (y) the
applicable Non-PO Percentage of the Stated Principal Balance
of each Mortgage Loan in such Mortgage Pool that was purchased
by a private mortgage insurer during the related Prepayment
Period as an alternative to paying a claim under the related
Insurance Policy minus (ii) the applicable Non-PO Percentage
of the related Senior Percentage of the principal portion of
the related Senior Percentage of the principal portion of
Excess Losses (other than Debt Service Reductions) for such
Mortgage Pool during the related Prepayment Period; and
(5) the related Senior Prepayment Percentage of the sum of (a) the
applicable Non-PO Percentage of the Stated Principal Balance of each Mortgage
Loan in such Mortgage Pool which was repurchased by the seller in connection
with such Distribution Date and (b) the difference, if any, between the
applicable Non-PO Percentage of the Stated Principal Balance of each Mortgage
Loan in such Mortgage Pool that has been replaced by the seller with a
Substitute Mortgage Loan pursuant to this Agreement in connection with such
Distribution Date and the Stated Principal Balance of such Substitute Mortgage
Loan.
Senior Percentage: On any Distribution Date for a Certificate Group, the
lesser of 100% and the percentage (carried to six places rounded up) obtained by
dividing the aggregate Class Certificate Balances of all Classes of Senior
Certificates of such Certificate Group (other than the Notional Amount
Certificates and the Class PO Certificates) immediately preceding such
Distribution Date by the Pool Principal Balance of the related Mortgage Pool
(excluding the aggregate of the applicable PO Percentage of the principal
balance of each Discount Mortgage Loan in the related Mortgage Pool) for the
immediately preceding Distribution Date.
Senior Prepayment Percentage: On any Distribution Date occurring during
the periods set forth below, and as to each Certificate Group, the Senior
Prepayment Percentages described below:
33
provided, however, if on any distribution date, the Aggregate Senior
Percentage exceeds such percentage calculated as of the Closing Date, then the
Senior Prepayment Percentage for both Certificate Groups for such Distribution
Date will equal 100%.
The reductions in the Senior Prepayment Percentage for each Certificate
Group described above will not occur and will remain at the level in effect for
the most recent prior period specified in the table above, unless both of the
following step-down conditions are satisfied with respect to each Mortgage Pool,
as of the last day of the month preceding the Distribution Date:
(1) the aggregate Stated Principal Balance of Mortgage Loans in both
Mortgage Pools delinquent 60 days or more (including for this purpose any
Mortgage Loans in foreclosure or subject to bankruptcy proceedings and Mortgage
Loans with respect to which the related Mortgaged Property, including REO
Property, has been acquired by the Trust) does not exceed 50% of the aggregate
Class Certificate Balances of the Subordinated Certificates as of that date; and
(2) cumulative Realized Losses in both Mortgage Pools do not exceed:
(a) 30% of the Original Subordinated Principal Balance if
such Distribution Date occurs between and including
December 2010 and November 2011;
(b) 35% of the Original Subordinated Principal Balance if
such Distribution Date occurs between and including
December 2011 and November 2012;
(c) 40% of the Original Subordinated Principal Balance if
such Distribution Date occurs between and including
December 2012 and November 2013;
34
(d) 45% of the Original Subordinated Principal Balance if
such Distribution Date occurs between and including
December 2013 and November 2014; and
(e) 50% of the related Original Subordinated Principal
Balance if such Distribution Date occurs during or after
December 2014.
Senior Support Mezzanine Certificates: Not Applicable.
Separate Interest Trust: A trust created pursuant to Section 4.8(a) of
this Agreement which is not an asset of any REMIC created hereunder.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.9.
Servicing Agreement: The servicing agreement, dated as of November 26,
2002 by and between First Horizon Asset Securities Inc. and its assigns, as
owner, and First Tennessee Mortgage Services, Inc., as servicer.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Servicing Rights Transfer and Subservicing Agreement: The servicing rights
transfer and subservicing agreement, dated as of November 26, 2002, by and
between First Horizon Home Loan Corporation, as transferor and subservicer, and
First Tennessee Mortgage Services, Inc., as transferee and servicer.
Special Hazard Coverage Termination Date: The date on which the Special
Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged Property on
account of direct physical loss but not including (i) any loss of a type covered
by a hazard insurance policy or a flood insurance policy required to be
maintained with respect to such Mortgaged Property pursuant to Section 3.9 to
the extent of the amount of such loss covered thereby, or (ii) any loss caused
by or resulting from:
(1) normal wear and tear;
(2) fraud, conversion or other dishonest act on the part of the
Trustee, the Master Servicer or any of their agents or employees (without regard
to any portion of the loss not covered by any errors and omissions policy);
35
(3) errors in design, faulty workmanship or faulty materials, unless
the collapse of the property or a part thereof ensues and then only for the
ensuing loss;
(4) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled, and whether
such loss be direct or indirect, proximate or remote or be in whole or in part
caused by, contributed to or aggravated by a peril covered by the definition of
the term "Special Hazard Loss";
(5) hostile or warlike action in time of peace and war, including
action in hindering, combating or defending against an actual, impending or
expected attack:
(i) by any government or sovereign power, de jure or de facto, or
by any authority maintaining or using military, naval or air
forces;
(ii) by military, naval or air forces; or
(iii) by an agent of any such government, power, authority or
forces;
(6) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or
(7) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or customs
regulations, confiscation by order of any government or public authority or
risks of contraband or illegal transportation or trade.
Special Hazard Loss Coverage Amount: Upon the initial issuance of the
Certificates, $4,740,155. As of any Distribution Date, the Special Hazard Loss
Coverage Amount will equal the greater of
(a) 1.00% (or if greater than 1.00%, the highest percentage of
Mortgage Loans by principal balance secured by Mortgaged Properties in any
single California zip code) of the outstanding principal balance of all the
Mortgage Loans as of the related Determination Date; and
(b) twice the outstanding principal balance of the Mortgage Loan
which has the largest outstanding principal balance as of the related
Determination Date,
less, in each case, the aggregate amount of Special Hazard Losses that would
have been previously allocated to the Subordinated Certificates in the absence
of the Loss Allocation Limitation. As of any Distribution Date on or after the
Cross-over Date, the Special Hazard Loss Coverage Amount will be zero.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
S&P: Standard & Poor's, a division of The McGraw-Hill Companies, Inc., and
its successors and/or assigns. If S&P is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 11.5(b) the address for notices
to S&P shall be Standard & Poor's, 55 Water Street, 41st Floor, New York, New
York 10041, Attention: Mortgage Surveillance Monitoring, or such other address
as S&P may hereafter furnish to the Depositor and the Master Servicer.
36
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the unpaid
principal balance of such Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor.
Streamlined Documentation Mortgage Loan: Any Mortgage Loan originated
pursuant to the Seller's Streamlined Loan Documentation Program then in effect.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Certificate Writedown Amount: As of any Distribution Date,
the amount by which (a) the sum of the Class Certificate Balances of all the
Certificates, after giving effect to the distribution of principal and the
allocation of Realized Losses in reduction of the Class Certificate Balances of
all of the Certificates on such Distribution Date, exceeds (b) the aggregate of
the Pool Principal Balances of both Mortgage Pools on the first day of the month
of such Distribution Date, less any Deficient Valuations occurring before the
Bankruptcy Loss Coverage Amount has been reduced to zero.
Subordinated Optimal Principal Amount: With respect to each Mortgage Pool
and each Distribution Date, an amount equal to the sum of the following (but in
no event greater than the aggregate Class Certificate Balances of the
Subordinated Certificates immediately prior to such Distribution Date):
(1) the related Subordinated Percentage of the applicable Non-PO
Percentage of all Scheduled Payments of principal due on each outstanding
Mortgage Loan in the related Mortgage Pool on the first day of the month in
which the Distribution Date occurs, as specified in the amortization schedule at
the time applicable thereto, after adjustment for previous principal prepayments
and the principal portion of Debt Service Reductions after the Bankruptcy Loss
Coverage Amount has been reduced to zero, but before any adjustment to such
amortization schedule by reason of any other bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period;
(2) the related Subordinated Prepayment Percentage of the applicable
Non-PO Percentage of the Stated Principal Balance of each Mortgage Loan in the
related Mortgage Pool which was the subject of a Principal Prepayment in Full
received by the Master Servicer during the related Prepayment Period;
37
(3) the related Subordinated Prepayment Percentage of the applicable
Non-PO Percentage of the sum of (a) all partial Principal Prepayments received
in respect of each Mortgage Loan in the related Mortgage Pool during the related
Prepayment Period, (b) all Unanticipated Recoveries received in respect of each
Mortgage Loan in the related Mortgage Pool during the calendar month prior to
such Distribution Date, and (c) on the Senior Final Distribution Date, 100% of
any related Senior Optimal Principal Amount remaining undistributed on such
date;
(4) the amount, if any, by which the sum of (a) the applicable
Non-PO Percentage of the net Liquidation Proceeds allocable to principal
received during the related Prepayment Period in respect of each Liquidated
Mortgage Loan in the related Mortgage Pool, other than Mortgage Loans described
in clause (b), and (b) the applicable Non-PO Percentage of the Stated Principal
Balance of each Mortgage Loan in the related Mortgage Pool that was purchased by
a private mortgage insurer during the related Prepayment Period as an
alternative to paying a claim under the related Insurance Policy exceeds (c) the
sum of the amounts distributable to the Senior Certificateholders (other than
the holders of the Class PO Certificates) under clause (4) of the definition of
applicable Senior Optimal Principal Amount on such Distribution Date; and
(5) the related Subordinated Prepayment Percentage of the sum of (a)
the applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in the related Mortgage Pool which was repurchased by the seller
in connection with such Distribution Date and (b) the difference, if any,
between the applicable Non-PO Percentage of the Stated Principal Balance of each
Mortgage Loan in the related Mortgage Pool that has been replaced by the seller
with a Substitute Mortgage Loan pursuant to this Agreement in connection with
such Distribution Date and the Stated Principal Balance of each such Substitute
Mortgage Loan.
Subordinated Percentage: For any Distribution Date and each Certificate
Group, 100% minus the related Senior Percentage.
Subordinated Prepayment Percentage: For any Distribution Date, 100% minus
the Senior Prepayment Percentage.
Subservicer: Any person to whom the Master Servicer has contracted for the
servicing of all or a portion of the Mortgage Loans pursuant to Section 3.2
hereof.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for a
Deleted Mortgage Loan which must, on the date of such substitution, as confirmed
in a Request for Release, substantially in the form of Exhibit L, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) have an Adjusted Net Mortgage Rate not lower than the lower of (a)
the Adjusted Net Mortgage Rate of the Deleted Mortgage Loan or (b) 5.50% in the
case of a Deleted Mortgage Loan from Pool I, or 5.25% in the case of a Deleted
Mortgage Loan from Pool II, provided that the Master Servicing Fee for the
Substitute Mortgage Loan shall be equal to or greater than that of the Deleted
Mortgage Loan; (iii) be accruing interest at a rate no lower than and not more
than 1% per annum higher than, that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to maturity no greater than (and not more than one year less than
that of) the Deleted Mortgage Loan; (vi) not be a Cooperative Loan unless the
Deleted Mortgage Loan was a Cooperative Loan and (vii) comply with each
representation and warranty set forth in Section 2.3 hereof.
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Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.3.
Super Senior Certificates: As specified in the Preliminary Statement.
Support Classes: Not applicable.
Targeted Balance: Not applicable. Targeted Principal Classes: Not
applicable.
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation ss. 1.860F-4(d) and Treasury
regulation ss. 301.6231(a)(7)-1. Initially, the Tax Matters Person shall be the
Trustee.
Tax Matters Person Certificate: The Class I-A-R Certificates with a
Denomination of $0.01.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) all of the Depositor's rights as
purchaser under the MLPA; (iii) the Certificate Account and the Distribution
Account and all amounts deposited therein pursuant to the applicable provisions
of this Agreement; (iv) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; and (v) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing;
provided that the Trust Fund shall exclude the Retained Yield.
Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date and a Mortgage Pool, an amount
equal to one-twelfth of the Trustee Fee Rate multiplied by the applicable Pool
Principal Balance with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum rate
agreed upon in writing on or prior to the Closing Date by the Trustee and the
Depositor.
Unanticipated Recovery: As defined in Section 4.2(g).
39
Undercollateralization Distribution: As defined in Section 4.2(h).
Undercollateralized Group: With respect to any Distribution Date, the
Senior Certificates of any Certificate Group (other than the Principal Only
Certificates) as to which the aggregate Certificate Principal Balance thereof,
after giving effect to distributions pursuant to Section 4.2(a) on such date, is
greater than the applicable Non-PO Percentage of the Pool Principal Balance of
the related Mortgage Pool for such Distribution Date.
Underwriters: As specified in the Preliminary Statement.
Underwriters' Exemption: An individual administrative exemption granted by
the U.S. Department of Labor to the Underwriters providing exceptions from some
of the prohibited transaction rules of ERISA with respect to the initial
purchase, the holding and the subsequent resale by employee benefit plans in
certificates in pass-through trusts having assets and meeting conditions
described therein, as amended by Prohibited Transaction Exemption 2000-58 (65
Fed. Reg. 67765, November 13, 2000), as amended, and Prohibited Transaction
Exemption 2002-41 (67 Fed. Reg. 54487, August 22, 2002), as amended (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
Upper REMIC: The segregated pool of assets consisting of the Middle REMIC
Interests.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. As of any date of determination, (a) 97%
of all Voting Rights will be allocated among all Holders of the Certificates,
other than the Notional Amount Certificates and the Class I-A-R Certificates, in
proportion to their then outstanding Class Certificate Balance; and (b) 2.0% of
all voting rights will be allocated among the Holders of the Notional Amount
Certificates, in proportion to their respective Notional Amounts; and (c) 1.0%
of all Voting Rights will be allocated to the Class I-A-R Certificates (such
Voting Rights to be allocated among the Holders of Certificates of such Class in
accordance with their respective Percentage Interests).
Yield Supplement Amount: The Class I-A-1 Yield Supplement Amount or the
Class I-A-7 Yield Supplement Amount, as the context may require.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to
the Trustee for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and
to the Trust Fund together with (i) the Depositor's right to (A)
require the Seller to cure any breach of a representation or
warranty made by the Seller pursuant to the MLPA, or (B) repurchase
or substitute for any affected Mortgage Loan in accordance herewith,
and (ii) all right, title and interest of the Depositor in, to and
under the Servicing Agreement, which right has been assigned to the
Depositor pursuant to the MLPA.
40
(b) In connection with the transfer and assignment set forth in clause
(a) above, the Depositor has delivered or caused to be delivered to
the Trustee or the Custodian on its behalf (or, in the case of the
Delay Delivery Mortgage Loans, will deliver or cause to be delivered
to the Trustee or the Custodian on its behalf within thirty (30)
days following the Closing Date) for the benefit of the
Certificateholders the following documents or instruments with
respect to each Mortgage Loan so assigned:
(i) (A) the original Mortgage Note endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________, without recourse," with all intervening
endorsements showing a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each
such endorsement being sufficient to transfer all right, title
and interest of the party so endorsing, as noteholder or
assignee thereof, in and to that Mortgage Note); or
(B) with respect to any Lost Mortgage Note, a lost note
affidavit from the Seller stating that the original Mortgage
Note was lost or destroyed, together with a copy of such
Mortgage Note;
(ii) except as provided below and for each Mortgage Loan that is
not a MERS Mortgage Loan, the original recorded Mortgage or a
copy of such Mortgage certified by the Seller as being a true
and complete copy of the Mortgage, and in the case of each
MERS Mortgage Loan, the original recorded Mortgage, noting the
presence of the MIN of the Mortgage Loans and either language
indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a
MOM Loan at origination, the original Mortgage and the
assignment thereof to MERS, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the
Seller as being a true and complete copy of the Mortgage;
(iii) in the case of a Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage, or a copy of
such assignment certified by the Seller as being a true and
complete copy of the assignment, in blank (which may be
included in a blanket assignment or assignments), together
with, except as provided below, all interim recorded
assignments, or copies of such interim assignments certified
by the Seller as being true and complete copies of the interim
assignments, of such Mortgage (each such assignment, when duly
and validly completed, to be in recordable form and sufficient
to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates);
provided that, if the related Mortgage has not been returned
from the applicable public recording office, such assignment
of the Mortgage may exclude the information to be provided by
the recording office;
41
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) either the original or duplicate original title policy, or a
copy of such title policy certified by the Seller as being a
true and complete copy of the title policy (including all
riders thereto), with respect to the related Mortgaged
Property, if available, provided that the title policy
(including all riders thereto) will be delivered as soon as it
becomes available, and if the title policy is not available,
and to the extent required pursuant to the second paragraph
below or otherwise in connection with the rating of the
Certificates, a written commitment or interim binder or
preliminary report of the title issued by the title insurance
or escrow company with respect to the Mortgaged Property, or
in lieu thereof, an Alternative Title Product or a copy of
such Alternative Title Product certified by the Seller as
being a true and complete copy of the Alternative Title
Product; and
(vi) in the case of a Cooperative Loan, the originals of the
following documents or instruments:
1. The Coop Shares, together with a stock power in blank;
2. The executed Security Agreement;
3. The executed Proprietary Lease;
4. The executed Recognition Agreement;
5. The executed UCC-1 financing statement with evidence of
recording thereon which have been filed in all places
required to perfect the Seller's interest in the Coop
Shares and the Proprietary Lease; and
6. Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law,
evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation)
42
In the event that in connection with any Mortgage Loan that is not a MERS
Mortgage Loan the Depositor cannot deliver (a) the original recorded Mortgage or
(b) all interim recorded assignments satisfying the requirements of clause (ii)
or (iii) above, respectively, concurrently with the execution and delivery
hereof because such document or documents have not been returned from the
applicable public recording office, the Depositor shall promptly deliver or
cause to be delivered to the Trustee or the Custodian on its behalf such
original Mortgage or such interim assignment, as the case may be, with evidence
of recording indicated thereon upon receipt thereof from the public recording
office, or a copy thereof, certified, if appropriate, by the relevant recording
office, but in no event shall any such delivery of the original Mortgage and
each such interim assignment or a copy thereof, certified, if appropriate, by
the relevant recording office, be made later than one year following the Closing
Date; provided, however, in the event the Depositor is unable to deliver or
cause to be delivered by such date each Mortgage and each such interim
assignment by reason of the fact that any such documents have not been returned
by the appropriate recording office, or, in the case of each such interim
assignment, because the related Mortgage has not been returned by the
appropriate recording office, the Depositor shall deliver or cause to be
delivered such documents to the Trustee or the Custodian on its behalf as
promptly as possible upon receipt thereof and, in any event, within 720 days
following the Closing Date. The Depositor shall forward or cause to be forwarded
to the Trustee or the Custodian on its behalf (a) from time to time additional
original documents evidencing an assumption or modification of a Mortgage Loan
and (b) any other documents required to be delivered by the Depositor or the
Master Servicer to the Trustee. In the event that the original Mortgage is not
delivered and in connection with the payment in full of the related Mortgage
Loan and the public recording office requires the presentation of a "lost
instruments affidavit and indemnity" or any equivalent document, because only a
copy of the Mortgage can be delivered with the instrument of satisfaction or
reconveyance, the Master Servicer shall execute and deliver or cause to be
executed and delivered such a document to the public recording office. In the
case where a public recording office retains the original recorded Mortgage or
in the case where a Mortgage is lost after recordation in a public recording
office, the Depositor shall deliver or cause to be delivered to the Trustee or
the Custodian on its behalf a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage.
In addition, in the event that in connection with any Mortgage Loan the
Depositor cannot deliver or cause to be delivered the original or duplicate
original lender's title policy (together with all riders thereto), satisfying
the requirements of clause (v) above, concurrently with the execution and
delivery hereof because the related Mortgage has not been returned from the
applicable public recording office, the Depositor shall promptly deliver or
cause to be delivered to the Trustee or the Custodian on its behalf such
original or duplicate original lender's title policy (together with all riders
thereto) upon receipt thereof from the applicable title insurer, but in no event
shall any such delivery of the original or duplicate original lender's title
policy be made later than one year following the Closing Date; provided,
however, in the event the Depositor is unable to deliver or cause to be
delivered by such date the original or duplicate original lender's title policy
(together with all riders thereto) because the related Mortgage has not been
returned by the appropriate recording office, the Depositor shall deliver or
cause to be delivered such documents to the Trustee or the Custodian on its
behalf as promptly as possible upon receipt thereof and, in any event, within
720 days following the Closing Date; provided further, however, that the
Depositor shall not be required to deliver an original or duplicate lender's
title policy (together with all riders thereto) if the Depositor delivers an
Alternative Title Product in lieu thereof. Notwithstanding the preceding, in
connection with any Mortgage Loan for which either the original or duplicate
original title policy has not been delivered to the Trust, if at any time during
the term of this Agreement the parent company of the Seller does not have a long
term senior debt rating of A- or higher from S&P and A- or higher from Fitch (if
rated by Fitch), then the Depositor shall within 30 days deliver or cause to be
delivered to the Trustee or the Custodian on its behalf (if it has not
previously done so) a written commitment or interim binder or preliminary report
of the title issued by the title insurance or escrow company with respect to the
Mortgaged Property.
43
Subject to the immediately following sentence, as promptly as practicable
subsequent to such transfer and assignment, and in any event, within thirty (30)
days thereafter, the Master Servicer shall (i) complete each assignment of
Mortgage, as follows: "First Horizon Mortgage Pass-Through Certificates, Series
2005-FA10, The Bank of New York, as trustee for the holders of the
Certificates", (ii) cause such assignment to be in proper form for recording in
the appropriate public office for real property records and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the assignments of the Mortgages to the Trustee, except that, with
respect to any assignments of Mortgage as to which the Master Servicer has not
received the information required to prepare such assignment in recordable form,
the Master Servicer's obligation to do so and to deliver the same for such
recording shall be as soon as practicable after receipt of such information and
in any event within thirty (30) days after receipt thereof. Notwithstanding the
foregoing, the Master Servicer need not cause to be recorded any assignment
which relates to a Mortgage Loan in any state other than the Required
Recordation States. In the case of Mortgage Loans that have been prepaid in full
as of the Closing Date, the Depositor, in lieu of delivering the above documents
to the Trustee or the Custodian on its behalf, will deposit in the Certificate
Account the portion of such payment that is required to be deposited in the
Certificate Account pursuant to Section 3.8 hereof.
Notwithstanding anything to the contrary in this Agreement, within thirty
days after the Closing Date, the Depositor shall either (i) deliver or cause to
be delivered to the Trustee or the Custodian on its behalf the Mortgage File as
required pursuant to this Section 2.1 for each Delay Delivery Mortgage Loan or
(ii) (A) substitute or cause to be substituted a Substitute Mortgage Loan for
the Delay Delivery Mortgage Loan or (B) repurchase or cause to be repurchased
the Delay Delivery Mortgage Loan, which substitution or repurchase shall be
accomplished in the manner and subject to the conditions set forth in Section
2.3 (treating each Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for
purposes of such Section 2.3), provided, however, that if the Depositor fails to
deliver a Mortgage File for any Delay Delivery Mortgage Loan within the
thirty-day period provided in the prior sentence, the Depositor shall use its
best reasonable efforts to effect or cause to be effected a substitution, rather
than a repurchase of, such Deleted Mortgage Loan and provided further that the
cure period provided for in Section 2.2 or in Section 2.3 shall not apply to the
initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan, but
rather the Depositor shall have five (5) Business Days to cure or cause to be
cured such failure to deliver. At the end of such thirty-day period, the Trustee
or the Custodian, on its behalf shall send a Delay Delivery Certification for
the Delay Delivery Mortgage Loans delivered during such thirty-day period in
accordance with the provisions of Section 2.2. Notwithstanding anything to the
contrary contained in this Agreement, none of the Mortgage Loans in the Trust
Fund is or will be Delay Delivery Mortgage Loans.
SECTION 2.2 Acceptance by Trustee of the Mortgage Loans.
The Trustee or the Custodian, on behalf of the Trustee, acknowledges
receipt of the documents identified in the Initial Certification in the form
annexed hereto as Exhibit E and declares that it or the Custodian holds and will
hold such documents and the other documents delivered to it or the Custodian, as
applicable, constituting the Mortgage Files, and that it or the Custodian, as
applicable, holds or will hold such other assets as are included in the Trust
Fund, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that the Custodian will maintain
possession of the Mortgage Notes in the State of Texas, unless otherwise
permitted by the Rating Agencies.
44
The Trustee agrees to execute and deliver or to cause the Custodian to
execute and deliver on the Closing Date to the Depositor and the Master Servicer
an Initial Certification in the form annexed hereto as Exhibit E. Based on its
or the Custodian's review and examination, and only as to the documents
identified in such Initial Certification, the Custodian, on behalf of the
Trustee, acknowledges that such documents appear regular on their face and
relate to such Mortgage Loan. Neither the Trustee nor the Custodian shall be
under any duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
On or about the thirtieth (30th) day after the Closing Date, the Trustee
shall deliver or shall cause the Custodian to deliver to the Depositor and the
Master Servicer a Delay Delivery Certification in the form annexed hereto as
Exhibit F, with any applicable exceptions noted thereon. Notwithstanding
anything to the contrary contained in this Agreement, none of the Mortgage Loans
in the Trust Fund is or will be Delay Delivery Mortgage Loans.
Not later than 90 days after the Closing Date, the Trustee shall deliver
or shall cause the Custodian to deliver to the Depositor and the Master Servicer
a Subsequent Certification in the form annexed hereto as Exhibit G, with any
applicable exceptions noted thereon.
If, in the course of such review, the Trustee or the Custodian, on behalf
of the Trustee, finds any document constituting a part of a Mortgage File which
does not meet the requirements of Section 2.1, the Trustee shall list or shall
cause the Custodian to list such as an exception in the Subsequent
Certification; provided, however that neither the Trustee nor the Custodian
shall make any determination as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as noteholder
or assignee thereof, in and to that Mortgage Note or (ii) any assignment is in
recordable form or is sufficient to effect the assignment of and transfer to the
assignee thereof under the mortgage to which the assignment relates. The Seller
shall promptly correct or cure such defect within 90 days from the date it was
so notified of such defect and, if the Seller does not correct or cure such
defect within such period, the Seller shall either (a) substitute for the
related Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.3, or (b) purchase such Mortgage Loan from the Trustee within 90 days from the
date the Seller was notified of such defect in writing at the Purchase Price of
such Mortgage Loan; provided, however, that in no event shall such substitution
or purchase occur more than 540 days from the Closing Date, except that if the
substitution or purchase of a Mortgage Loan pursuant to this provision is
required by reason of a delay in delivery of any documents by the appropriate
recording office, and there is a dispute between either the Master Servicer or
the Seller and the Trustee over the location or status of the recorded document,
then such substitution or purchase shall occur within 720 days from the Closing
Date. The Trustee shall deliver or shall cause the Custodian to deliver written
notice to each Rating Agency within 270 days from the Closing Date indicating
each Mortgage Loan (a) which has not been returned by the appropriate recording
office or (b) as to which there is a dispute as to location or status of such
Mortgage Loan. Such notice shall be delivered every 90 days thereafter until the
related Mortgage Loan is returned to the Trustee or the Custodian on its behalf.
Any such substitution pursuant to (a) above or purchase pursuant to (b) above
shall not be effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.5 hereof, if any, and any substitution pursuant to
(a) above shall not be effected prior to the additional delivery to the Trustee
of a Request for Release substantially in the form of Exhibit L. No substitution
is permitted to be made in any calendar month after the Determination Date for
such month. The Purchase Price for any such Mortgage Loan shall be deposited by
the Seller in the Certificate Account on or prior to the Distribution Account
Deposit Date for the Distribution Date in the month following the month of
repurchase and, upon receipt of such deposit and certification with respect
thereto in the form of Exhibit M hereto, the Trustee shall cause the Custodian
to release the related Mortgage File to the Seller and shall execute and deliver
at the Seller's request such instruments of transfer or assignment prepared by
the Seller, in each case without recourse, as shall be necessary to vest in the
Seller, or a designee, the Trustee's interest in any Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions the Seller repurchases
a Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer shall either
(i) cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to the Seller and shall cause
such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations or (ii) cause MERS to designate on
the MERS(R) System the Seller as the beneficial holder of such Mortgage Loan.
45
The Trustee shall retain or shall cause the Custodian to retain possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions set forth herein. The Master Servicer shall promptly deliver to
the Trustee or the Custodian on its behalf, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File as come into the possession of the Master Servicer from time to
time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.1 above shall constitute the sole remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against the Seller.
The mortgage loans permitted by the terms of this Agreement to be included
in the Trust Fund are limited to (i) the Mortgage Loans (which the Depositor
acquired pursuant to the MLPA, which contains, among other representations and
warranties, a representation and warranty of the Seller that no Mortgage Loan is
a "high cost loan" as defined by the specific applicable local, state or federal
predatory and abusive lending laws, and (ii) Substitute Mortgage Loans (which,
by definition as set forth in this Agreement and referred to in the MLPA, are
required to conform to, among other representations and warranties, a
representation and warranty of the Seller set forth in the MLPA that no
Substitute Mortgage Loan is a "high cost loan" as defined by the specific
applicable local, state or federal predatory and abusive lending laws). It is
therefore understood and agreed by the parties hereto that it is not intended
that any Mortgage Loan be included in the Trust Fund that is a "high cost loan"
as defined by the specific applicable local, state or federal predatory and
abusive lending laws.
46
SECTION 2.3 Representations and Warranties of the Master Servicer;
Covenants of the Seller.
(a) The Master Servicer hereby makes the representations and warranties
set forth in Schedule II hereto and by this reference incorporated
herein, to the Depositor and the Trustee, as of the Closing Date, or
if so specified therein, as of the Cut-off Date.
(b) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Schedule B to the MLPA
that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such
breach shall give prompt notice thereof to the other parties. The
Seller hereby covenants that within 90 days of the earlier of its
discovery or its receipt of written notice from any party of a
breach of any representation or warranty made pursuant to Schedule B
to the MLPA which materially and adversely affects the interests of
the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects, and if such breach is not so cured,
shall, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a
"Deleted Mortgage Loan") from the Trust Fund and substitute in its
place a Substitute Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth below; provided, however,
that any such substitution pursuant to (i) above shall not be
effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.5 hereof, if any, and any such
substitution pursuant to (i) above shall not be effected prior to
the additional delivery to the Trustee or the Custodian on its
behalf of a Request for Release substantially in the form of Exhibit
M and the Mortgage File for any such Substitute Mortgage Loan. The
Seller shall promptly reimburse the Master Servicer and the Trustee
for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. With
respect to the representations and warranties described in this
Section which are made to the best of the Seller's knowledge, if it
is discovered by either the Depositor, the Seller or the Trustee
that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan or the interests of the Certificateholders
therein, notwithstanding the Seller's lack of knowledge with respect
to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or
warranty.
47
With respect to any Substitute Mortgage Loan or Loans, the Seller shall
deliver to the Trustee or the Custodian on its behalf for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.1, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.1. No substitution is permitted to be made in any calendar month after
the Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of substitution shall not be part of the
Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted Mortgage
Loan for such month and thereafter the Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Master Servicer
shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the substitution of the
Substitute Mortgage Loan or Loans and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Schedule B to
the MLPA with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the Certificate Account of the amount required to be deposited
therein in connection with such substitution as described in the following
paragraph, the Trustee shall release or shall cause the Custodian to release the
Mortgage File held for the benefit of the Certificateholders relating to such
Deleted Mortgage Loan to the Seller and shall execute and deliver at the
Seller's direction such instruments of transfer or assignment prepared by the
Seller, in each case without recourse, as shall be necessary to vest title in
the Seller, or its designee, the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.3.
For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the month of substitution). The amount of such shortage (the "Substitution
Adjustment Amount") plus an amount equal to the aggregate of any unreimbursed
Advances with respect to such Deleted Mortgage Loans shall be deposited in the
Certificate Account by the Seller on or before the Distribution Account Deposit
Date for the Distribution Date in the month succeeding the calendar month during
which the related Mortgage Loan became required to be purchased or replaced
hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.5 on or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which the Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.5 and receipt of a Request for Release in the form of
Exhibit M hereto, the Trustee shall release or shall cause the Custodian to
release the related Mortgage File held for the benefit of the Certificateholders
to such Person, and the Trustee shall execute and deliver or shall cause the
Custodian to execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
breach available to Certificateholders, the Depositor or the Trustee on their
behalf.
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After giving effect to the sale of the Certificates by the Depositor to
the Underwriters, and thereafter, so long as any Certificates remain
outstanding, the Seller, its affiliates and agents, collectively, shall not
beneficially own Certificates the aggregate fair value of which would represent
90% or more of the beneficial interests in the Trust Fund.
The representations and warranties made pursuant to this Section 2.3 shall
survive delivery of the respective Mortgage Files to the Trustee or the
Custodian for the benefit of the Certificateholders.
SECTION 2.4 Representations and Warranties of the Depositor as to
the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with respect
to each Mortgage Loan as of the date hereof or such other date set forth herein
that as of the Closing Date, and following the transfer of the Mortgage Loans to
it pursuant to the MLPA and immediately prior to the conveyance of the Mortgage
Loans by it to the Trustee pursuant to Section 2.1(a) hereof, the Depositor had
good title to the Mortgage Loans and the Mortgage Notes were subject to no
offsets, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in this Section 2.4 shall survive delivery of the Mortgage Files to the
Trustee. Upon discovery by the Depositor or the Trustee of a breach of any of
the foregoing representations and warranties set forth in this Section 2.4
(referred to herein as a "breach"), which breach materially and adversely
affects the interest of the Certificateholders, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency.
SECTION 2.5 Delivery of Opinion of Counsel in Connection with
Substitutions.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.2 or Section 2.3 shall be made
more than 90 days after the Closing Date unless the Depositor
delivers to the Trustee an Opinion of Counsel, which Opinion of
Counsel shall not be at the expense of either the Trustee or the
Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on
"prohibited transactions" on the Trust Fund or contributions after
the Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of
the Code, respectively, or (ii) cause any REMIC created hereunder to
fail to qualify as a REMIC at any time that any Certificates are
outstanding.
(b) Upon discovery by the Depositor, the Master Servicer or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five
(5) Business Days of discovery) give written notice thereof to the
other parties. In connection therewith, the Trustee shall require
the Depositor to cause the Seller, pursuant to the MLPA and at the
Seller's option, to either (i) substitute, if the conditions in
Section 2.3(b) with respect to substitutions are satisfied, a
Substitute Mortgage Loan for the affected Mortgage Loan, or (ii)
repurchase the affected Mortgage Loan within 90 days of such
discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty made pursuant to Section 2.3.
The Trustee shall reconvey or shall cause the Custodian to reconvey
to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.3.
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SECTION 2.6 Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.
SECTION 2.7 REMIC Matters.
The Preliminary Statement sets forth the "latest possible maturity date"
for federal income tax purposes of all REMIC regular interests created hereby.
The assets of the Lower REMIC shall be as set forth in the definition
thereof. Each interest identified in the first table below by a designation
beginning with "L" shall be a "regular interest" in the Lower REMIC and a Lower
REMIC Interest, and the RL Interest shall be the sole class of residual interest
in the Lower REMIC. The Lower REMIC Interests shall be uncertificated and shall
be held by the Trustee as assets of the Middle REMIC.
The assets of the Middle REMIC shall be as set forth in the definition
thereof. Each interest identified in the second table below by a designation
beginning with "M" shall be a "regular interest" in the Middle REMIC and a
Middle REMIC Interest, and the RM Interest shall be the sole class of residual
interest in the Middle REMIC. The Middle REMIC Interests shall be uncertificated
and shall be held by the Trustee as assets of the Upper REMIC.
The assets of the Upper REMIC shall be as set forth in the definition
thereof. The Regular Certificates shall represent "regular interests" in the
Upper REMIC. The RU Interest shall be the sole class of residual interest in the
Upper REMIC. The Class I-A-R Certificate shall represent ownership of the RL
Interest, RM Interest and RU Interest.
The "Startup Day" for purposes of the REMIC Provisions for each REMIC
hereunder shall be the Closing Date. The Tax Matters Person with respect to each
REMIC hereunder shall be the Trustee and the Trustee shall hold the Tax Matters
Person Certificate. Each REMIC's taxable year shall be the calendar year and its
accounts shall be maintained using the accrual method.
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(1) The Lower REMIC Interest L-I-A-1, Lower REMIC Interest L-I-A-2 and Lower
REMIC Interest L-I-ZZZ shall be Corresponding Classes to these classes of Middle
REMIC Interests: M-I-A-1, M-I-A-3A, M-I-A-3B, M-I-A-4A, M-I-A-4B, M-I-A-5,
M-I-A-6, M-I-A-7, M-I-A-RU, M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6
(provided that with respect to M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6, such
Lower REMIC Interests shall only correspond to the portion supported by Pool I).
The Lower REMIC Interest L-I-PO corresponds to the Middle REMIC Interest M-I-PO.
The Lower REMIC Interest L-II-A-1, Lower REMIC L-II-A-2 and Lower REMIC Interest
L-II-ZZZ shall be Corresponding Classes to these classes of Middle REMIC
Interests: M-II-A-1, M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6 (provided that
with respect to M-B-1, M-B-2, M-B-3, M-B-4, M-B-5 and M-B-6, such Lower REMIC
Interests shall only correspond to the portion supported by Pool II). The Lower
REMIC Interest L-II-PO corresponds to the Middle REMIC Interest M-I-PO.
"L1 Interests" refers to the L-I-A-1 Lower REMIC Interest and the L-II-A-1
Lower REMIC Interests. "L2 Interests" refers to the L-I-A-2 Lower REMIC Interest
and the L-II-A-2 Lower REMIC Interest. "LZZZ Interests" refers to L-I-ZZZ Lower
REMIC Interest and L-II-ZZZ Lower REMIC Interest. "LPO Interests" refer to the
L-I-PO Lower REMIC Interest and the L-II-PO Lower REMIC Interest. Each L1
Interest shall have a principal balance initially equal to 0.9% of the Group
Subordinate Amount of its corresponding Mortgage Pool. Each L2 Interest shall
have a principal balance initially equal to 0.1% of the Group Subordinate Amount
of its corresponding Mortgage Pool. The initial principal balance of each LZZZ
Interest shall equal the excess of the Pool Principal Balance of its
corresponding Mortgage Pool over the sum of (i) the initial principal balances
of the L1 Interests and L2 Interests corresponding to such Mortgage Pool, and
(ii) the portion of the LPO Interest attributable to the Discount Mortgage Loans
in the Mortgage Pool corresponding to such LZZZ Interest.
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Unless a Cross-over Situation (as defined below) exists, principal and
Realized Losses arising with respect to each Mortgage Pool shall be allocated
first to cause the L1 and L2 Interests corresponding to such Mortgage Pool to
equal 0.9% and 0.1% of the Group Subordinate Amount of such Mortgage Pool as of
such Distribution Date (after distributions of principal and allocation of
Realized Losses are made) and all excess principal and Realized Losses shall be
allocated to the LZZZ Interest corresponding to such Mortgage Pool. A L1, L2 or
LZZZ Interest that is allocated principal on any Distribution Date shall receive
such principal, and have its principal balance reduced by the amount of such
principal, on such Distribution Date. Similarly, a L1, L2 or LZZZ Interest that
is allocated a Realized Loss on any Distribution Date shall have its principal
balance reduced by the amount of such Realized Loss on such Distribution Date.
A "Cross-over Situation" exists if on any Distribution Date (after taking
into account distributions of principal and allocations of Realized Losses on
such Distribution Date) the L1 and L2 Interests corresponding to any Mortgage
Pool are in the aggregate less than 1% of the Group Subordinate Amount of the
corresponding Mortgage Pool. If a Cross-over Situation exists on any
Distribution Date, and the weighted average interest rate of the outstanding L1
and L2 Interests is less than the Pass-Through Rate for any Class of Subordinate
Certificates for the following Distribution Date, a Principal Reallocation
Payment (as defined below) shall be made proportionately to the outstanding L1
Interests prior to any other distributions of principal from each such Mortgage
Pool so that the Calculation Rate equals the Pass-Through Rate for each Class of
Subordinate Certificates. If a Cross-over Situation exists on any Distribution
Date, and the weighted average rate of the outstanding L1 and L2 Interests is
greater than the Pass-Through Rate for any Class of Subordinate Certificates for
the following Distribution Date, a Principal Reallocation Payment shall be made
proportionately to the outstanding L2 Interests prior to any other distributions
of principal from each such Mortgage Pool so that the Calculation Rate equals
the Pass-Through Rate for each Class of Subordinate Certificates. A "Principal
Reallocation Payment" is a distribution of the minimum amount of principal that
causes the Calculation Rate (as defined below) with respect to the outstanding
L1 and L2 Interests to equal the Pass-Through Rate for each Class of Subordinate
Certificates. The "Calculation Rate" shall equal the product of (i) 10 and (ii)
the weighted average interest rate of the outstanding L1 and L2 Interests,
treating each L1 Interest as capped at zero or reduced by a fixed percentage of
100% of the interest accruing on such class. Principal Reallocation Payments
shall be made from principal received on the Mortgage Loans from a Mortgage Pool
and shall also consist of a proportionate allocation of Realized Losses from the
Mortgage Loans of a Mortgage Pool. For purposes of making Principal Reallocation
Payments, to the extent that the principal received during the applicable
collection period from the related Mortgage Pool or Mortgage Pools and related
Realized Losses are insufficient to make the necessary reduction of principal,
then interest shall accrue on the LZZZ Interest (and be added to its principal
balance) of the related Mortgage Pool or Mortgage Pools to allow the necessary
Principal Reallocation Payment to be made. The Calculation Rate is designed to
always equal the Pass-Through Rate of each Class of Subordinated Certificates.
If a Cross-over Situation exists, the aggregate principal balances of the
outstanding L1 and L2 Interests of all of the Mortgage Pools shall not be
reduced below one percent of the aggregate Pool Principal Balance of all of the
Mortgage Pools for the following Distribution Date in excess of the Senior
Certificates as of the related Distribution Date (after taking into account
distributions of principal and allocations of Realized Losses on such
Distribution Date). To the extent this limitation prevents the distribution of
principal to the L1 and L2 Interests of a Mortgage Pool and the related LZZZ
Interest has already been reduced to zero, such excess principal from such
Mortgage Pool shall be paid proportionately to the LZZZ Interests of the
Mortgage Pool or Mortgage Pools whose aggregate L1 and L2 Interests are less
than one percent of the related Group Subordinate Amount. Any such shortfall as
a result of the Mortgage Pool or Mortgage Pools receiving the extra payment
having a Designated Mortgage Pool Rate (as defined below) lower than the
Designated Mortgage Pool Rate of the Mortgage Pool or Mortgage Pools from which
the payment was reallocated shall be treated as a Realized Loss and if excess
arises as a result of the Mortgage Pool receiving the extra payment having a
Designated Mortgage Pool Rate higher than the Mortgage Pool from which the
payment was reallocated it shall reimburse the Middle REMIC for prior Realized
Losses.
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53
REMIC Interest M-B-2, Middle REMIC Interest M-B-3, Middle REMIC Interest M-B-4,
Middle REMIC Interest M-B-5, Middle REMIC Interest M-B-6 shall equal the
Calculation Rate as defined in this Section 2.7. The Pass-Through Rate on each
Class of Subordinated Certificates is variable and will be equal to the weighted
average of the Middle REMIC Interest Rates on Middle REMIC Interest M-B-1,
Middle REMIC Interest M-B-2, Middle REMIC Interest M-B-3, Middle REMIC Interest
M-B-4, Middle REMIC Interest M-B-5, Middle REMIC Interest M-B-6, weighted on the
basis of the principal balance of each such Middle REMIC Interest.
On each Distribution Date Available Funds shall be distributed with
respect to the Middle REMIC Interests in a manner such that:
(a) interest accrued, if any, on each Middle REMIC Interest is
distributed with respect to each such Middle REMIC Interest in
the same manner that Accrued Certificate Interest is
distributed with respect to the Corresponding Class or Classes
of Certificates pursuant to Section 4.2; and
(b) principal is distributed (and Realized Losses shall be
allocated) with respect to each such Middle REMIC Interest in
the same manner that principal is distributed (and Realized
Losses is allocated) with respect to the Corresponding Class
or Classes of Certificates pursuant to Section 4.2 and Section
4.4.
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The Class L-I-PO Interest shall be entitled to receive the Class PO
Principal Distribution Amount for Pool I.
The Class L-II-PO Interest shall be entitled to receive the Class PO
Principal Distribution Amount for Pool II.
The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Upper REMIC as cash flow on a REMIC
regular interest, without creating any shortfall-actual or potential (other than
for credit losses) to any REMIC regular interest. To the extent that the
structure is believed to diverge from such intention the Trustee shall resolve
ambiguities to accomplish such result and shall to the extent necessary rectify
any drafting errors or seek clarification to the structure without
Certificateholder approval (but with guidance of counsel) to accomplish such
intention.
SECTION 2.8 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and the Trustee as
follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements of the insurer under each Required Insurance Policy;
and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor,
any affiliate of the Depositor or the Trustee and prepared by the
Master Servicer pursuant to this Agreement will contain any untrue
statement of a material fact or omit to state a material fact
necessary to make such information, certificate, statement or report
not misleading.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.1 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with the terms of (i)
the Servicing Rights Transfer and Subservicing Agreement, pursuant to which
First Tennessee Mortgage Services, Inc. engaged the Master Servicer to
subservice the Mortgage Loans, (ii) this Agreement and (iii) the customary and
usual standards of practice of prudent mortgage loan servicers; provided that if
there is a conflict between the terms of the Servicing Agreement and the
Servicing Rights Transfer and Subservicing Agreement, on the one hand, and this
Agreement, on the other hand, the terms of this Agreement shall prevail. In
connection with such servicing and administration, the Master Servicer shall
have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.2 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
55
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Master Servicer shall not take any action that
is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Master Servicer shall represent and protect the interests of the Trust Fund in
the same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan, and
shall not make or permit any modification, waiver or amendment of any Mortgage
Loan which would cause any REMIC created hereunder to fail to qualify as a REMIC
or result in the imposition of any tax under Section 860F(a) or Section 860G(d)
of the Code. Without limiting the generality of the foregoing, the Master
Servicer, in its own name or in the name of the Depositor and the Trustee, is
hereby authorized and empowered by the Depositor and the Trustee, when the
Master Servicer believes it appropriate in its reasonable judgment, to execute
and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the Mortgage Loans, and with respect to the Mortgaged Properties held
for the benefit of the Certificateholders. The Master Servicer shall prepare and
deliver to the Depositor and/or the Trustee such documents requiring execution
and delivery by either or both of them as are necessary or appropriate to enable
the Master Servicer to service and administer the Mortgage Loans to the extent
that the Master Servicer is not permitted to execute and deliver such documents
pursuant to the preceding sentence. Upon receipt of such documents, the
Depositor and/or the Trustee shall execute such documents and deliver them to
the Master Servicer. The Master Servicer further is authorized and empowered by
the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS, solely as nominee
for the Trustee and its successors and assigns.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.6, and further as
provided in Section 3.8. The costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balances of the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
SECTION 3.2 Subservicing; Enforcement of the Obligations of
Servicers.
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(a) The Master Servicer may arrange for the subservicing of any Mortgage
Loan by a Subservicer pursuant to a subservicing agreement;
provided, however, that such subservicing arrangement and the terms
of the related subservicing agreement must provide for the servicing
of such Mortgage Loans in a manner consistent with the servicing
arrangements contemplated hereunder. Unless the context otherwise
requires, references in this Agreement to actions taken or to be
taken by the Master Servicer in servicing the Mortgage Loans include
actions taken or to be taken by a Subservicer on behalf of the
Master Servicer. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer and a
Subservicer or reference to actions taken through a Subservicer or
otherwise, the Master Servicer shall remain obligated and liable to
the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans in accordance
with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the Subservicer
and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the
Mortgage Loans. All actions of each Subservicer performed pursuant
to the related subservicing agreement shall be performed as an agent
of the Master Servicer with the same force and effect as if
performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with
respect to the Mortgage Loans that are received by a Subservicer
regardless of whether such payments are remitted by the Subservicer
to the Master Servicer.
SECTION 3.3 Rights of the Depositor and the Trustee in Respect of
the Master Servicer.
The Depositor may, but is not obligated to, enforce the obligations of the
Master Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer hereunder
and in connection with any such defaulted obligation to exercise the related
rights of the Master Servicer hereunder; provided that the Master Servicer shall
not be relieved of any of its obligations hereunder by virtue of such
performance by the Depositor or its designee. Neither the Trustee nor the
Depositor shall have any responsibility or liability for any action or failure
to act by the Master Servicer nor shall the Trustee or the Depositor be
obligated to supervise the performance of the Master Servicer hereunder or
otherwise.
SECTION 3.4 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default), the
Trustee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Master Servicer pursuant to
Section 3.9 hereof or any acts or omissions of the predecessor Master Servicer
hereunder), (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder including, but not limited to, repurchases or
substitutions of Mortgage Loans pursuant to Section 2.2 or 2.3 hereof, (iv)
responsible for expenses of the Master Servicer pursuant to Section 2.3 or (v)
deemed to have made any representations and warranties of the Master Servicer
hereunder). Any such assumption shall be subject to Section 7.2 hereof. If the
Master Servicer shall for any reason no longer be the Master Servicer (including
by reason of any Event of Default), the Trustee or its successor shall succeed
to any rights and obligations of the Master Servicer under each subservicing
agreement.
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The Master Servicer shall, upon request of the Trustee, but at the expense
of the Master Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement or substitute subservicing agreement and
the Mortgage Loans then being serviced thereunder and an accounting of amounts
collected or held by it and otherwise use its best efforts to effect the orderly
and efficient transfer of the substitute subservicing agreement to the assuming
party.
SECTION 3.5 Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account.
(a) The Master Servicer shall make reasonable efforts in accordance with
the customary and usual standards of practice of prudent mortgage
servicers to collect all payments called for under the terms and
provisions of the Mortgage Loans to the extent such procedures shall
be consistent with this Agreement and the terms and provisions of
any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any
late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates for payments due on a Mortgage Note for a period not
greater than 180 days; provided, however, that the Master Servicer
cannot extend the maturity of any such Mortgage Loan past the date
on which the final payment is due on the latest maturing Mortgage
Loan as of the Cut-off Date. In the event of any such arrangement,
the Master Servicer shall make Advances on the related Mortgage Loan
in accordance with the provisions of Section 4.1 during the
scheduled period in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such
arrangements. The Master Servicer shall not be required to institute
or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or
condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(b) The Master Servicer shall establish and maintain the Certificate
Account. The Certificate Account shall consist of two separate
subaccounts, each of which shall relate to a particular Mortgage
Pool. The Master Servicer shall deposit or cause to be deposited
into the appropriate subaccount of the Certificate Account no later
than two Business Days after receipt, except as otherwise
specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect
of principal and interest due on the Mortgage Loans on or before the
Cut-off Date) and the following amounts required to be deposited
hereunder:
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(i) all payments on account of principal on the Mortgage Loans in
the related Mortgage Pool, including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans in
the related Mortgage Pool, net of the related Master Servicing
Fee, any Prepayment Interest Excess and, for so long as First
Horizon is the Master Servicer, any Retained Yield;
(iii) all Insurance Proceeds and Liquidation Proceeds in respect of
the related Mortgage Loans in the related Mortgage Pool, other
than proceeds to be applied to the restoration or repair of
the Mortgaged Property or released to the Mortgagor in
accordance with the Master Servicer's normal servicing
procedures;
(iv) any amount required to be deposited by the Master Servicer in
respect of the related Mortgage Pool pursuant to Section
3.5(c) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Master Servicer in
respect of the related Mortgage Pool pursuant to Sections
3.9(b) or 3.9(d);
(vi) all Substitution Adjustment Amounts in respect of the related
Mortgage Pool;
(vii) all Advances in respect of the related Mortgage Pool made by
the Master Servicer pursuant to Section 4.1; and
(viii) any other amounts required to be deposited hereunder in
respect of the related Mortgage Pool.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to
the monthly payment remitted by the Mortgagor, the Master Servicer shall
cause funds to be deposited into the applicable subaccount of the
Certificate Account in an amount required to cause an amount of interest
to be paid with respect to such Mortgage Loan equal to the amount of
interest that has accrued on such Mortgage Loan from the preceding Due
Date at the related Adjusted Mortgage Rate on such date.
The foregoing requirements for remittance by the Master Servicer
shall be exclusive, it being understood and agreed that, without limiting
the generality of the foregoing, payments in the nature of prepayment
penalties, late payment charges, assumption fees or amounts attributable
to reimbursements of Advances, if collected, need not be remitted by the
Master Servicer. In the event that the Master Servicer shall remit any
amount not required to be remitted, it may at any time withdraw or direct
the institution maintaining the Certificate Account to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the Trustee or such other institution
maintaining the Certificate Account which describes the amounts deposited
in error in the Certificate Account. The Master Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this
Section. All funds deposited in the Certificate Account shall be held in
trust for the Certificateholders until withdrawn in accordance with
Section 3.8.
59
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Distribution
Account shall consist of two separate subaccounts, each of which
shall relate to a particular Mortgage Pool. The Trustee shall,
promptly upon receipt, deposit in the Distribution Account and
retain therein the following:
(i) the aggregate amount remitted by the Master Servicer to the
Trustee in respect of a Mortgage Pool pursuant to Section
3.8(a)(ix);
(ii) any amount deposited by the Master Servicer pursuant to this
Section 3.5(c) in connection with any losses on Permitted
Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the applicable subaccount of the Distribution Account,
any provision herein to the contrary notwithstanding. Such direction may
be accomplished by delivering an Officer's Certificate to the Trustee
which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by
the Trustee in trust for the related Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section
3.8. In no event shall the Trustee incur liability for withdrawals from
the Distribution Account at the direction of the Master Servicer.
(iv) The institutions at which the Certificate Account and the
Distribution Account are maintained shall invest funds as
directed by the Master Servicer in Permitted Investments which
in both cases shall mature not later than (i) in the case of
the Certificate Account, the second Business Day next
preceding the related Distribution Account Deposit Date
(except that if such Permitted Investment is an obligation of
the institution that maintains such account, then such
Permitted Investment shall mature not later than the Business
THIS MY FRIENDS, IS HOW YOUR LENDER SELLS YOUR MORTGAGE SERVICING OVER, AND
OVER, AND OVER, AND OVER, AND OVER, AND THREATENS FORECLOSURE AGAINST YOU
EVERY 3 MONTHS, CHARGES SINFUL FEES, ACTUALLY "SELLS" YOUR NOTE (BUT ONLY MOVES YOU
TO THE "B" SERVICER WHO IS ONE OF THE 30 LENDERS WHO OWNS ASSETS IN YOUR MORTGAGE POOL
BUT THE "B" SERVICER IS USUALLY THE LENDER WITH THE MOST DEFAULTS/EARLY PAY-OFFS/RE-FI'S
(MONEY-LOSER'S FOR THE POOL) SO THEY HAVE THE MOST TO LOSE SINCE THE ONE LOSING THE MOST
IS AT THE BOTTOM OF THE DISTRIBUTION POOL...
Lender's are PUSHING homeowners into default. They train their employees on unscrupulous, INCREDIBLY SUCCESSFUL,
SHAMEFUL, BAD, SAD, HORRIBLE, EVIL, BUSINESS TACTICS used without remourse against weary, heartbroken homeowners.
BUT CONSIDER THIS: Lenders (Mortgagees) are taking the original Promissory Note (THEY MUST POSSESS THE ORIGINAL WITH THE ORIGINAL SIGNATURES TO FORECLOSE AGAINST YOU IN FEDERAL COURT) mortgage "security instrument" to your real property and selling it to other investors.
They are selling their security interest in your home. In your real property. They have been paid in full. (And if they are still the Master Servicer, they will continue to receive "distributions", not to mention servicing payments, not to mention late fees, foreclosure fees, re-finance fees, on and on and on,
http://legal.realdealdocs.com/index.php/2008/09/05/reaching-a-cmbs-pooling-and-servicing-agreement/
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