WMMSC Servicer Guide

ServicerGuide
LastUpdate:12/30/14
ThismanualisthepropertyofWMMSC.Nopartofthisdocumentcanbeusedor
reproducedwithoutpermissionofWMMSC.
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Section101.ServicerEligibility
ServicerswhowishtoparticipateintheWMMSC
(Buyer)Servicingprogrammustfirstcompletea
Seller/ServicerApplication(SSF010)andsubmititto
Buyertogetherwiththefollowingrequired
documentation:(i)professionalresumesoftheprincipal
officersandtheindividualsresponsiblefororigination,
underwriting,accounting,servicing,shippingandfinal
documentationdelivery;(ii)theServicersaudited
financialstatementsfortheprevioustwoyearsandthe
mostcurrentinterimfinancialstatements(YTDProfit
andLossStatement).IfacurrentYTDProfitandLoss
Statementisnotavailableattimeofapplication,thenthe
mostrecentthreeyearsauditedfinancialstatementsare
required;(iii)intheeventtheServicerhasaparent,the
parentsauditedfinancialstatementsfortheprevioustwo
years,andtheparentsmostcurrentYTDProfitandLoss
Statement.IfacurrentYTDProfitandLossStatementis
notavailableatthetimeofapplication,thenthemost
recentthreeyearsauditedfinancialstatementsare
required;(iv)themostrecentauditreportsissuedwith
respecttotheServicerbyFannieMae,FreddieMac,
HUDandanyothergovernmentalorquasigovernmental
agencywithjurisdictionoveranyoftheServicers
operations;(v)acopyoftheServicersqualitycontrol
procedures,fororiginationandservicing,presentlyin
place,andcopiesofthethree(3)mostrecentquality
controlreportstoServicersseniormanagementand
qualitycontrolsummaryreportsassubmittedto
Servicersseniormanagement;(vi)acopyofthe
completedservicingquestionnaire(application
addendum);(vii)acertificateofinsuranceforeachofthe
Servicersfidelitybond,errorsandomissions,and
directorsandofficersliabilityinsurancepolicieswhich
meettherequirementsofSection101.04;and(viii)a
completelistofallnamesunderwhichtheServiceris
doingbusiness,orhasdonebusinessinthelastfive
years.
101.01EligibilityRequirements
Thefollowingeligibilityrequirementsmustbemetprior
toapprovalandmustbemaintainedbytheBuyer
approvedServicersatalltimes.Inaddition,theBuyer
mayrequestevidenceoftheServicerscompliancewith
eachoftheseprovisionsatanytime.TheBuyermay,at
itsowndiscretion,allowdeviationsfromthesestated
requirementsifitbelievesitisinitsownbestinterestto
doso.
1.Experience:TheServicermusthaveaminimum
existingservicingportfolioof3,500mortgagesand
musthaveMBSstylereportingcapabilities(onhard
copyortape)withaninstitutionalinvestor.The
Servicermusthaveatleasttwoyearsofexperience
inservicingconventionalresidentialmortgagesand
mustfollowgenerallyacceptedpracticesand
prudentservicingpractices.IftheServicerhasbeen
inexistenceforlessthantwoyears,financial
informationsubstantiatingtheServicerscapacityto
participateintheBuyersprogramsisrequired.
2.Approvals:TheServicermustbeeitheraHUD
approvedmortgageeorabankorsavingsandloan
whichisinsuredbytheFederalDepositInsurance
Corporation(FDIC).TheServiceranditsparent
company(whetherdirectorindirect),ifapplicable,
mustmeetthecapitalrequirementsoftheFDIC,the
OfficeofThriftSupervision(OTS),oranyother
stateorfederalregulatoryagencythatregulatesthe
Serviceroritsparentcompany.TheServicermust
alsobeeitherFannieMae(FNMA)orFreddieMac
(FHLMC)approved.
3.Facilities:TheServicermustmaintainsatisfactory
facilitiesinwhichtoservicemortgages,including
automatedservicingcapabilities.
4.LegalStanding:TheServicermustbeduly
organized,validlyexisting,properlylicensed,andin
goodlegalstandingunderthelawsofthestateofits
incorporationandineachstateinwhichtheproperty
securingaservicedloanislocated,withthepower
andauthoritytoenterintoaSellingandServicing
Agreement(WMMSC1002)withtheBuyer;andits
compliancewiththetermsandconditionsofthe
SellingandServicingAgreementandthisServicer
Guidewillnotviolateanyoftheprovisionsofits
articlesofincorporation,charterorbylaws,andany
otherinstrumentrelatingtotheconductofthe
businessortheownershipofpropertyoranyother
agreementtowhichitisapartyorbywhichitis
bound.
5.Insurance:TheServicermustmaintainineffect,at
alltimeandatitsexpense,fidelitybond,errorsand
omissionsinsurance,anddirectorsandofficers
liabilitypolicieswhichmeettheBuyers
requirementsasdefinedinSection101.04.
6.GoodStanding:TheServicermustbeingood
standingwithallapplicableregulatoryauthorities
andnotsubjecttoanyextraordinarysupervisionof
itsoperations.
7.ExternalAudits:TheBuyerrequestsacopyof
externalauditsbeprovidediftheServicerissubject
totheserequirements:(a)USAPreports(servicer);
(b)RegABattestationsandreports;and(c)SAS60
internalcontrolreports(sellersandservicers).
101.02RequiredDocumentation
OnceapprovedbytheBuyer,theServicermustexecute
andsubmitthefollowingdocuments,correctand
completeinallmaterialrespects,toBuyer:
Anoriginal,certifiedcopyoftheCorporate
Resolution(WMMSC1008);
ServicerGuide:LoanAdministration
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ASellingandServicingAgreement(WMMSC
1002)
TheACHDebitAuthorization(WMMSC4006);
TheapplicableCustodialAccountLetter
Agreements(WMMSC4002andWMMSC4004);
SellerServicerSupplementalInformation(SSF011)
ContactList(SSF003);
LendersAuthorizationandMICompanyandHUD
ReferenceRequest(SSF006);
LendersAuthorizationandInvestorRelease(SSF
005);and
Certificatesofinsuranceevidencingthefidelity
bond,errorsandomissions,anddirectorsand
officersliabilityinsurancecoveragewhichmeetsthe
BuyersrequirementsasoutlinedinSection101.04.
ApprovedServicersmustcontinuetomeettheeligibility
requirementsasamendedfromtimetotime,inorderto
continuetoserviceloansonbehalfoftheBuyer.
101.03CorporateResolution
Uponapproval,theServicermustsupplytheBuyerwith
anoriginal,certifiedcopyoftheCorporateResolution.
If,atanytime,thereisachangetotheauthorityprovided
bytheCorporateResolutionorchangestothepersons
providedwithsuchauthority,theServicermust
immediatelysubmiteitheranamendedoriginal,certified
copyoftheCorporateResolutionreflectingthecurrent
information,oranoriginalCorporateCertificateof
Authorityreflectingnewauthoritiesgranted.TheBuyer
willnotrecognizeanychangetotheServicers
CorporateResolutionuntiltheoriginal,certifiedcopyof
theCorporateResolutionoranoriginalCorporate
CertificateofAuthorityisreceived.
101.04
FidelityBond,DirectBond,
andErrorsandOmissions
Coverage
TheServicerisresponsibleformaintainingineffect,at
alltimesandatitsexpense,blanketfidelitybond,errors
andomissions,anddirectorsandofficersliability
insurancecoverage.Specificinsurancerequirementsare
indicatedbelow.Insurancecoveragewhichdoesnot
meettheminimumamountrequiredoraninsurance
deductiblewhichexceedsthelimitallowedmustbe
approvedbytheBuyer.Servicersmustrequestawaiver
oftheserequirementsinwritingandprovideevidence
satisfactorytotheBuyerofFNMAsorFHLMCs
approval,asapplicable,oftheServicersinsurance
coverage.
If,atanytime,thereisachangeincoverage,orif
coveragehasexpired,theServicermustimmediately
submitevidenceoftheamendedorrenewedinsurance
coveragetoServicingManagement.RefertoAppendix
Bforthecurrentaddress.
A.AmountofCoverage
Coverageforfidelitybond,errorsandomissions,and
directorsandofficersliabilityinsurancemustbebased
ontheServicerstotalportfolio(allresidentialmortgages
andcommercialloans)whichtheServicerservicedfor
itselfandallotherinvestors,includingtheBuyer,during
thepreceding12months.Theamountofcoveragefor
fidelitybond,errorsandomissions,anddirectorsand
officersliabilityinsuranceiscalculatedasfollows:
TotalPortfolio
MinimumCoverageRequired
$100millionorless$300,000
$100$500million$300,000+.15%oftotalportfolio
exceeding$100million
$500millionto
$1billion
$900,000+.125%oftotalportfolio
exceeding$500million
Over$1billion
$1,525,000+.1%oftotalportfolio
exceeding$1billion
Theamountofcoveragerequiredforadirectsuretybond
maybebasedonthetotalservicingportfoliotheServicer
isservicingonbehalfoftheBuyer,providedthatsuch
suretybondrelatessolelytosuchportfolio.
B.Scope
Thefidelitybond,errorsandomissions,anddirectors
andofficerliabilitycoveragemustinsuretheServicer
againstlossesresultingfromdishonest,negligentor
fraudulentactscommittedbyemployeesoftheServicer,
including,butnotlimitedto,anypersonemployedunder
apermanentortemporaryemploymentagreement,any
personactingasanagentorrepresentativeofthe
Servicer,anyemployeesofoutsidefirmsthatprovide
dataprocessingservicesfortheServicer,eachdirector
andofficerwhohascontroloveroraccesstocash,
securitiesorotherpropertyoftheassociation,and
personsemployedasstudentinterns.Thecoveragemust
alsoprotectagainstdishonest,negligentorfraudulent
actsbytheServicersprincipalowner,iftheServicers
insurancewriterprovidesthattypeofcoverage.
Servicersmustobtainerrorsandomissionscoveragethat
underthetermsofthepolicyorbyseparaterider;(i)
providesthattheinsurerwillnametheBuyer,asan
investor,aslosspayeeonpaymentdraftsissuedbythe
insurerforlossestotheBuyerresultingfromactsor
omissionscoveredbytheinsuranceand(ii)givesthe
Buyer,asaninvestor,therighttofileaclaimdirectly
withtheinsurer,shouldtheServicerfailtodoso,for
lossestotheBuyerresultingfromactscoveredbythe
insurance.
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C.Deductible
Thedeductibleforfidelitybond,directorsandofficers
liability,anddirectsuretycoveragemaybenomorethan
$100,000or5%ofthebondsfaceamount,whicheveris
greater.Thedeductibleforerrorsandomissions
coveragemaybenogreaterthan5%oftheliability
coverageperoccurrence.
D.Cancellation
Theinsurancecertificateissuedmustindicatethe
insurancebrokersoragentsagreementtonotifythe
Buyerofanycancellationorreductionofcoverage
within10daysofsuchreductionorcancellation.
101.05AnnualCertification,Annual
StatementofComplianceandAccountants
Statement
OnorbeforeMarch1stofeachyear,theServicermust
delivertotheBuyer:
(1)anAnnualCertification(WMMSC1007)
(2)anAnnualStatementofCompliance(WMMSC
31477);
(3)anAccountantsStatement;
(4)RegulationAB:17CFR229.1100,1122and1123
Attestation;
(5)SAS60internalreports.
TheAnnualCertificationmustincludecertifications
fromanauthorizedcorporateofficerthat(i)theservicing
eligibilityrequirementssetforthinthisServicerGuide
havebeenreviewed,(ii)theServicerisinfull
compliancewithsuchservicingeligibilityrequirements,
(iii)areviewoftheactivitiesoftheServicerduringthe
precedingcalendaryearandofperformanceunderthis
ServicerGuideandtheSellingandServicingAgreement
throughsuchyearhasbeenmadeundersuchofficers
supervision,and(iv)tothebestofsuchofficers
knowledge,basedonsuchreview,theServicerhas
fulfilledallofitsobligationsunderthisServicerGuide
andtheSellingandServicingAgreementthroughsuch
year.(Iftherehasbeenadefaultinthefulfillmentofany
suchobligation,theAnnualCertificationshallincludea
descriptionofeachsuchdefault,specifyingthenature
andstatusthereof.)IfsorequestedbytheBuyer,the
Servicermustprovideanydocumentationnecessaryto
substantiatethecertificationscontainedintheAnnual
Certification.Acopyofanyrecentthirdpartyaudits
(FNMA,FHLMC,HUD,etc.)willbereviewedbythe
Buyertoverifytherearenodisciplinaryactionstakenby
anyoftheagencies,includingeithersuspensionor
terminationoftheapplicant.Acopyofanyrecentrating
agenciesreviews(Fitch,Moodys,S&P,etc.)willbe
reviewedbytheBuyertonotateanyweaknessesfound
withinsaidreview.
TheAccountantsStatementrequiredtobedelivered
underthisServicerGuidemustbepreparedbyafirmof
independentpublicaccountantsthatisamemberofthe
AmericanInstituteofCertifiedPublicAccountantsand
shallcontainastatementtotheeffectthat,basedonan
examinationconductedbysuchfirm,theServicerisin
compliancewiththeminimumservicingstandards
identifiedintheUniformSingleAttestationProgramfor
MortgageBankers(USAP).OnorafterJanuary1,
2006,theServicerwillalsoberequiredtosubmitan
AttestationinaccordancewithRegulationAB:17CFR
229.1100,1122and1123,assuchregulationsmaybe
amendedfromtimetotime,theassertionofmanagement
oftheServicerthatithascompliedwiththeminimum
servicingstandardsidentifiedintheUSAPorSection
1122ofRegulationABisfairlystatedinallmaterial
respects,exceptfor(i)suchexceptionsassuchfirmshall
believetobeimmaterial,and(ii)suchotherexceptions
asshallbesetforthinsuchstatement.
TheCompanyshallalsocooperatefullywithWMMSC
todelivertoWMMSC,andtoanyofitsassigneesor
designeesintheformatspecifiedinthisServicerGuide,
anyandallstatements,reports,certifications,recordsand
anyotherinformationnecessary,inWMMSCsgood
faithdetermination,toberequiredtopermitWMMSCor
itsassignees/designeestocomplywiththeprovisionsor
RegulationAB17CFR229.1100,1122and1123,
togetherwithsuchdisclosuresrelatingtotheCompany
actinginitscapacityasSeller,theCompanyactinginits
capacityasServicer,theMortgageLoans,orthe
CompanyactinginitscapacityasServicerservicingthe
MortgageLoansreasonablybelievedbyWMMSC,its
assigneeoritsdesigneetoberequiredforsuch
transaction.
Eachoftheupdated,auditedfinancialstatements,
certificates,reportsandotherdocumentationrequired
underthisServicerGuidemustbesenttotheaddress
notedonAppendixBinthisGuide.
101.06PeriodicAudit
TheBuyerreservestherighttoconductperiodicaudits
oftheServicersbooksandrecordsrelatingtoany
mortgageservicedbytheServiceroronbehalfofthe
BuyerandoftheServicersmortgageservicingpractices
andprocedures.TheServicermustcooperatewithsuch
auditsandprovideaccesstotheBuyeranditsagentsto
theServicersoffices,booksandrecordsatreasonable
timesduringtheServicersnormalbusinesshours.In
addition,ifsorequestedbytheBuyeratanytimeduring
theyear,theServicerwillprovidetheBuyerwith
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evidenceofitscurrentcompliancewithalleligibility
requirementsasdescribedinSection101.01.
101.07AgencyAuditReporting
Requirements
IntheeventtheServicerisauditedbyanagencysuchas
FNMA,FHLMC,HUD,etc.,andanyratingagencysuch
asFitchRatings,Inc.,Standard&PoorsRatingServices,
orMoodysInvestorServices;theServicermustcause
theBuyertoreceivecopiesoftheauditreportwithin15
calendardaysoftheServicersreceiptoftheauditreport
fromtheapplicableagencyand/orratingagency.
Intheeventdisciplinaryactionistakenbysuchagency,
includingeithersuspensionorterminationofthe
Servicer,theBuyermustbenotifiedinwritingwithin3
businessdaysofServicersreceiptofsuchnotice.
101.08TerminationofServicing
Privileges
WithoutlimitingtheBuyersrighttotakewhatever
actionitdeemsappropriatetoprotectitsinterestsand
enforceitsrights,theBuyermaysuspendorterminatea
Servicersprivilegesassetforthbelow.
A.ServicingTerminationforCause
Foranyofthefollowingreasons,theBuyermay,atits
discretion,declareanimmediateterminationand
forfeitureofaServicersservicingprivileges:
AnyfailurebytheServicertodeliverorcausetobe
deliveredtheAnnualCertification,anAnnual
StatementofCompliance,ortheAccountants
StatementrequiredpursuanttoSection101.05of
thisServicerGuide.
delivered,anyrequesteddocumentation,whichthe
Buyerhasdeterminedtoberequiredtocomplywith
RegulationAB:17CFR229.1100,1122and1123
asrequiredpursuanttoSection101.05ofthis
ServicerGuide.
deliveredtheSOXCertification/OfficersCertificate
Backup302Certification.
deliveredtheSAS60internalreports.
deliveredacoyofthebalancesheet,income
statementandchangesinfinancialpositionforthe
Selleranditsparentcompany,ifany,coveringthe
mostrecentfiscalyearwhich,ineachcase,have
beenauditedbyindependentpublicaccountants
recognizedinthegeographicareainwhichthe
Selleroperates.
TheServicersfidelitybondand/orerrorsand
omissionsinsuranceiscanceledandnoreplacement
coverageisobtained.
TheServicerfailstoremittheappropriatefundsor
maketheappropriatefundsavailableforACH
withdrawalbytheBuyeronanydatewhichfunds
areduefromtheServicer.
TheServicerfailsinfourconsecutivemonthsto
forwardrequiredpoolaccountingreportstothe
Buyerbythedateonwhichsuchreportsaredue.
TheServicerfailstofollowspecificinstructions
fromtheBuyerregardingtheservicingofa
particularmortgage.
TheBuyerdiscoverstheServicerhas
misrepresentedfactsrelatedtotheEligibility
RequirementssetforthinSection101.01initsinitial
applicationforapprovalasaServicerorinany
informationrelatedtoitsAnnualCertification.
TheServicerisfoundtohaveactedwithconscious
disregardorinanegligentmannerwithrespectto
theBuyersoritsassigneesinterestsinamortgage.
TheBuyerconsiderssuchsuspensionortermination
necessarytoprotectitsinterestorenforceitsrights.
TheServicerfailstomeetanyoftheeligibility
requirementssetforthinSection101.01.
TheServicersells,transfers,subcontracts,pledges,
collateralizes,orencumbersanyportionofits
servicingrightshereunderwithoutpriorapproval
fromtheBuyer.
TheServicerhasbreachedanyrepresentations,
warranties,orobligationssetforthintheServicer
Guide.
TheServicerhaspledged,sold,transferredor
encumberedanyservicingfeeincomeorrights
withoutthepriorwrittenconsentoftheBuyer,in
violationofSection102.03.
TheServicersinsolvency,theadjudicationofthe
Servicerasabankrupt,theappointmentofareceiver
fortheServicer,theServicersexecutionofa
generalassignmentforthebenefitofitscreditors,or
anyotherchangeintheServicersfinancialstatus
that,inouropinion,materiallyandadverselyaffects
itsabilitytoprovidesatisfactoryservicingofthe
mortgages.(Ifanyoftheseeventsshouldoccur,no
interestinanymortgageorpoolofmortgagesshall
bedeemedanassetorliabilityoftheServicers
successorsorassigns,norshallanyinterestpassby
operationoflawwithoutourconsent.)
Thefindingbyacourtofcompetentjurisdictionthat
theServicer,oranyofitsprincipalofficers,has
committedanactthatconstitutescivilfraud,orthe
convictionoftheServiceroritsofficer(s)forany
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criminalactthatisrelatedtotheServicers
mortgageservicingactivities,iftheBuyerbelieves
thatsuchactmateriallyandadverselyaffectsthe
Servicersreputationorthereputationorinterestsof
theBuyer.
IftheBuyerdeclaresaforfeitureofservicingrightsfor
anyofthereasonssetforthabove,nocompensationwill
bepaidtotheServicerandsuchservicingprivileges
shallimmediatelyterminateandreverttotheBuyer
withoutfurtheractionbyanyparty,or,attheBuyer's
discretion,theServicershall,withoutcompensation,
transferitsservicingportfoliotoaBuyerapproved
Servicerwithin60daysofnotificationoftermination.
IntheeventofaterminationunderthisSection101.08
A,theServicershallpromptlydeliveralldocuments,
files,records(includingcomputerizedrecords),and
monies(e.g.,escrowfunds)totheBuyeroritsdesignee.
B.OtherServicingTerminations
TheBuyermayterminateaServicersservicingrights
forcauseforreasonswhichareconsideredlessserious
thanthosesetforthinSection101.08A.Inaddition,the
BuyermayterminateaServicersservicingrights
withoutcause.Ineachofthesesituations,oncethe
BuyernotifiestheServicerthatitsSellingandServicing
Agreementisbeingterminated;theServicerhas60days
inwhichtoselltheBuyersservicingportfoliotoa
BuyerapprovedServicer.TheBuyerswrittenapproval
ofthetransactionmustbeobtainedbeforethetransfer.
TheServicerisresponsibleforallcostsincurredbythe
transferandmayretainanyfeesinvolvedinthe
transaction.
IftheServicerdoesnotarrangeavoluntarytransfer,the
BuyerandServicerwillmutuallydeterminethecurrent
fairmarketvalueoftheservicingbeingterminated.The
fairmarketvalueisthepurchasepriceforthe
involuntarytransferandsaleofservicingtotheBuyer.
IftheBuyerandServicercannotagreeonafairmarket
value,theneachonewillselectanunaffiliated,
nationallyrecognizedservicingbroker,andthosetwo
brokerswillindependentlyestimatethecurrentfair
marketvalue.Theaverageoftheestimatesprovidedby
thebrokerswillbeusedasthecurrentfairmarketvalue.
Thefairmarketvalueisthepurchasepriceforthe
involuntarytransferandsaleofservicingtotheBuyer.
TheBuyerandServicerwillberesponsibleforthecost
oftheirrespectivebrokersvaluationsolicitedbysuch
party.
IntheeventofaterminationunderthisSection101.08B,
theservicershallpromptlydeliveralldocuments,files,
records(includingcomputerizedrecords),andmonies
(e.g.,escrowfunds)(i)totheBuyerapprovedservicerto
whomtheterminatedServicerhastransferredthe
servicingprivileges,ifsuchatransferhasoccurred
withintheprescribedtimeperiodor(ii)totheBuyeror
itsdesignee,iftheservicingprivilegeshavenotbeen
transferredbytheterminatedServicerwithinthe
prescribedtimeperiod.
C.RemediesCumulative
AllrightsandremediesprovidedtotheBuyerinthis
ServicerGuideareinadditiontoanyotherrightor
remedyavailabletotheBuyerundertheSellingand
ServicingAgreementoraffordedbylaworequity,and
maybeexercisedconcurrentlywith,independentlyof,or
insuccessionto,suchotherrights,andsuchrightsand
remediesshallinuretothebenefitoftheBuyer,its
successorsandassigns.ThefailureoftheBuyerto
exerciseanyofitsremediesdoesnotconstituteawaiver
ofthatremedyinthefutureinconnectionwiththesame
oranyotherbreachordefaultbytheServicer.
D.NoRightToDamages
OurdecisiontoterminateaServicer'sservicing
privileges,ortheentireSellingandServicingAgreement
doesnotentitletheServicertorecoveranyexemplary,
punitive,orconsequentialdamages.Ifappropriatewe
mayoffsetanymoniestheServicerowesusatthetime
oftheterminationagainstanyapplicableservicing
compensation,purchaseproceeds,orotherfundsweowe
theServicer,allasfurtherprovidedinSection403.03.
E.Compliance
AnyServicerwhoisnotincompliancewiththerequest
fordocumentationaspartoftheperiodicreviewmaybe
subjecttosuspension/termination.
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Section102.CompensationandSubcontracting
102.01ServicerCompensation
AscompensationforservicingtheBuyersloans,the
Servicerretainsservicingfees,latecharges,assumption
fees,andsomefeeschargedforspecialservices.These
feesarepayabletotheServicerfromthetimetheBuyer
purchasesaloanuntilitispaidinfull,aslongasthe
Servicercollectsthemortgagepayments.Servicingfeesat
liquidationarepayableonlyfrominterestcollectedat
liquidation.RefertoSection301.02forfulldetailson
accountingofservicingfees.
A.ServicingFees
ForeachfixedrateloanservicedfortheBuyer,the
Servicerretainsaservicingfeefrominterestactually
collectedwithrespecttosuchloanmadeupofthe
differencebetweenthemortgageinterestrateandthenet
ratetotheBuyer.Suchfeeisalsopayablewhen
liquidationfundsarereceivedfromtheborrower,whether
derivedfromaforeclosuresale,mortgageinsurance
proceeds,orathirdpartysale.Thenetrateisdefinedas
therateofinterestpayabletotheBuyeroneachloanand
willbeagreedatthetimethecommitmenttopurchasethe
loanisenteredintobytheBuyer.Theservicingfeewillbe
establishedatthetimethemortgageloanissoldbythe
SellertotheBuyerandmaybesubsequentlychangedas
agreeduponbytheBuyerandtheServicer.
Withrespecttomostadjustableratemortgages(ARMs),
theservicingfeeisthedifferencebetweenthegrossmargin
statedinthemortgageNoteandthenetmargintothe
Buyeragreeduponatthetimethecommitmenttopurchase
theloanisenteredintobytheBuyer.Theservicingfeefor
anARMloanwillberetainedbytheServicerfrominterest
actuallycollectedwithrespecttosuchloan.Theservicing
feewillbeestablishedatthetimethemortgageloanissold
bytheSellertotheBuyerandmaybesubsequently
changedasagreeduponbytheBuyerandtheServicer.
However,ifanadjustablerateloanconvertstoafixedrate
loan,theservicingfeemaynotexceedtheoriginal
servicingfeeontheARMNote.
Ifthemortgageinterestrateincludesprimarymortgage
insurancepremiums,theminimumservicingfeemustnot
includethesepremiumamounts.
B.LateChargeProvision
TheServicerisauthorizedtocollectandretainlatecharges
providedforinthenoteorsecurityinstrumentwhich
complywithapplicablestatelaw.Ifthestatelawdoesnot
permitthechargeprovidedforintheNoteorSecurity
Instrument,themaximumamountallowablepursuantto
statelawshouldbeused.Thelatechargeshouldbe
computedonlyontheprincipalandinterestinstallment,not
onthefullmonthlypayment.Latechargesmustbe
collectedfromtheborrower,andmaynotbecollectedfrom
theescrowaccount,deductedfromamonthlyinstallment,
orcapitalized.
102.02SubcontractingorTransferof
Servicing
AServicermaynotoutsourceorsubcontractanyservicing
function,sell,pledgeortransferitsresponsibilityfor
servicinganyloanservicedonbehalfoftheBuyerinwhole
orinpartwithoutpriorwrittenapprovalfromtheBuyer.
Withrespecttooutsourcingorsubcontractingofany
servicingfunctiontoanyvendororotherprovider,the
Servicermustidentifythepartythatwillbeperformingthe
servicingfunction,describethescopeofitsresponsibilities
andprovidesuchotherinformationastheBuyermay
request,includingwithoutlimitationinformationnecessary
todeterminewhethersuchpartyscertificationof
compliancewithservicingcriteriamayberequiredin
connectionwithcertaintransactions.Anyrequestfor
subcontractingorthetransferofservicingmustspecifythe
reasonfortherequest,beaccompaniedbyaTrialBalance
Report(WMMSC4018)andacopyoftheRequestfor
TransferofServicing(WMMSC3008)providing
informationonthequalificationsoftheproposed
transferee.Thisnotificationshouldbereceivedbythe
Buyer60dayspriortotheproposedtransferor
subcontractorscommencementofsubcontracting
activities,asapplicable.TheproposedServicermustmeet
alloftheBuyerseligibilityrequirementsasstatedin
Section101.01andhaveexecutedaWMMSCSellingand
ServicingAgreement.
AlloutstandingobligationsoftheServicertotheBuyer
mustbesatisfiedpriortoanytransfer.TheServicerwillbe
advisedoftheBuyersdecisionandanyotherconditionsto
bemetforapproval.Iftherequestisapproved,the
Servicerandtheproposedtransfereemustexecutethe
RequestforTransferofServicing,theServicingAgreement
signedbytheServicerandtheproposedtransferee,the
originalCustodialAccountForms(4002,4004,4006and
4014forbuydowns);andconsummatethetransfer
accordingtotheBuyersspecificationswithin60daysof
theapprovaldate.A$500transferfeeisduetheBuyer
immediatelyupontheBuyersapprovalofthetransfer.
AnapprovedServicerwillnotberelievedofitsobligations
pursuanttoitsoriginalcontractwiththeBuyerby
establishingasubcontractingrelationshipwithanother
party.AnytransferorsubcontractingwithouttheBuyers
writtenconsentmayresultinsuspensionorterminationof
theServicersprivilegesandforfeitureofservicingrights
forexistingloans.
Asaconditiontoapprovinganyrequesttotransfer
servicing,theBuyerwillrequirethetransfereetoassume
alloftheServicersservicingwarrantiesandobligations
andalloftheSellersrepresentations,warrantiesand
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Section102.CompensationandSubcontracting
obligationsandwillrequirethetransfereetoenter
agreementswhichevidencetheassumptionofsuch
representations,warrantiesandobligations.
TheServicerandthetransfereewillalsobeobligated,
jointlyandseverally,toindemnifyandholdharmless,the
Buyer,itssuccessorsandassignsagainstalllosses,claims,
costsandexpenses(includingreasonableattorneysfees)
thatmayariseagainsttheBuyer,itssuccessorsandassigns,
fromthefailuretocomplywithapplicablelawsand
regulationsrelatedtothetransferofservicing.
102.03PledgeorTransferofServicing
Income
Thepledge,sale,transfer,orencumbranceofanyservicing
feeincomeorrightswithoutthepriorwrittenconsentofthe
Buyerisprohibited.Anypurportedsale,transferorpledge
isgroundsforanimmediateterminationofservicingrights
forcausepursuanttoSection101.08andshallbe
ineffectivetoconferuponanypurportedtransferee,pledge
orotherright,titleorinterestinsuchincomeorservicing.
102.04MergerorConsolidationof
Servicer
AnyentityintowhichtheServicerismergedor
consolidated,oranycorporationresultingfromanymerger,
consolidationorconversiontowhichtheServicerisaparty
shallbedeemedthesuccessortotheServicerandshall
succeedtoalloftheServicersrightsandobligationsunder
theSellingandServicingAgreement,providedthatthe
successormeetstheeligibilitycriteriasetforthinSection
101.01andcomplieswiththetransferofservicing
requirements,asspecifiedinSection102.02ofthis
ServicerGuide.TheBuyer,initssolediscretion,may
rejectanysuchsuccessorandmayterminatetheServicers
servicingprivilegeshereunderasoftheeffectivedateof
suchmergerorconsolidation.Suchterminationshallbe
deemedaterminationforcauseunderSection101.08A
hereof,andtheBuyershallnotbeobligatedtocompensate
theServiceroritssuccessorforsuchtermination.
102.05NotificationofSignificantChanges
TheServicermustsendtheBuyerwrittennoticeofany
contemplatedmajorchangesinitsorganization,including
withsuchnoticecopiesofanyfilingswith,orapprovals
from,itsregulators.TheBuyerrequiresnoticeof,among
otherthings,thefollowingsignificantchangesrelatingto
theServicer:
1.anymergers,consolidationsorreorganizations;
2.anydirectorindirectsubstantialchangeinownership;
Anindirectchangeinownershipincludesany
changeintheownershipoftheServicersparent,any
owneroftheparent,oranybeneficialownerofthe
Servicerthatdoesnotownadirectinterestinthe
Servicer;
3.anychangeincorporatename;
4.anychangefromafederalchartertoastatecharter(or
viceversa)iftheServicerisasavingsandloan
associationorabank;
5.amaterialadversechangeinfinancialcondition;and
6.thesaleofall,orsubstantiallyall,oftheServicers
assetsoralineofbusiness.
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Section103.AdministrativeResponsibilities
103.01InternalAuditControls
TheServicerisresponsibleformaintainingaccurate
recordsandbooksofaccountandanadequatesystemof
auditandinternalcontrols.TheServicermustpromptly
notifytheBuyerinwritingofanymaterialadverse
changeinthefinancialconditionoftheServicerandof
anyfactsorcircumstanceswhichcouldadverselyaffect
theprospectsfortimelyremittanceofprincipaland
interestpaymentsonanyloanortheabilityofthe
Servicertoserviceanyloan.
Foradjustableratemortgages,theServicermustensure
ithassystemsandproceduresinplacewhichcan
adequatelysupporttheongoingservicingrequirements
ofanyadjustableratemortgageprogramofBuyerunder
whichitservices.Becauseofmanyvariablesand
optionspermittedundertheBuyersadjustablerate
mortgageprograms,theServicermustcloselymonitor
theseloans.ItistheServicersresponsibilitytoenforce
eachadjustablerateloanaccordingtoitsterms.This
includesmakingaccuratechangestotheinterestrateand
monthlypaymentamountandcommunicatingthese
changesonatimelybasistotheborrowerandtothe
BuyerontheARMAdjustmentsReport(WMMSC
4013).Thisalsoincludesaccuratecalculationofthenet
ratetotheBuyerfollowingeachadjustmentdate.
103.02Maintenance,Custodyand
OwnershipofLoanFiles
ForallloanssoldtotheBuyer,theSellerwillhavesent
totheappropriateCustodianthefollowingoriginal
documentswithin120daysofpurchase:
Originalnoteevidencingtheobligationofthe
borrower,oralostnoteaffidavitaccompaniedbya
certifiedcopyofthelostnoteandanagreementby
theServicertoindemnifyandholdtheBuyer
harmlessfromanyloss(includingreasonable
attorneysfees)sufferedbytheBuyerduetothe
lackoftheoriginalnote
Originalrecordedsecurityinstrumentandall
applicableridersorafullyrecordedlegible
reproductionthereoforiginallycertifiedtoby
theapplicablerecordingoffice
Originalrecordedassignmentofthesecurity
instrumentorafullyrecordedlegible
Originalrecordedinterveningassignment(s),if
applicableorafullyrecordedlegible
Originaloranoriginallycertifiedcopyofa
finaltitleinsurancepolicyandanyrequired
waiversorattorneysopinion
Originalrecordedassumption,modification,
consolidation,extensionorsubstitution
agreements,includinganymodification
agreementconvertinganadjustablerate
mortgagetoafixedratemortgage,ifapplicable
orafullyrecordedlegiblereproductionthereof
originallycertifiedtobytheapplicable
recordingoffice.
TheFinalDocumentationTransmittal(WMMSC2009)
mustbecompletedandstapledontopofthedocuments.
Additionaloriginaldocumentsmayberequiredtobe
maintainedintheBuyersfilesperspecificmortgage
programs.
A.IndividualLoanFiles
TheServicermustmaintainanindividualfileforeach
loanitservicesfortheBuyer.Thefilemustincludeany
papersorrecordswhicharerequiredtoservicetheloan
properlyandanydocumentswhichattesttothevalidity
oftheloan.
Thefileshouldinclude,butisnotlimitedto,these
documents:
1.Allcreditfiledocumentation(FNMAforms
referencedasindustrystandard,however,forms
equivalenttoFNMAsmaybesubstituted):
UnderwritingApprovalCertificateorthepool
insurancecertificatefromaBuyerapproved
poolinsurer.
TransmittalSummary(FNMA1008)
UniformResidentialLoanApplication(FNMA
1003)typewritten(signedanddatedbythe
borrowerifloanisclosed)
StatementofAssetsandLiabilities(FNMA
1003A)typewritten,ifapplicable
OriginalhandwrittenUniformResidentialLoan
Application(FNMA1003)signedanddatedby
theborrower
Completemortgagepaymenthistory
Verificationofpaymenthistoryonprevious
mortgage,ifapplicable
Verificationofrent,orcopiesof6months
canceledrentpaymentchecks(frontandback),
ifapplicable
ResidentialMortgageCreditReport
Verification(s)ofDeposit(FNMA1006)
Verification(s)ofEmployment(FNMA1005)
Verification(s)ofPreviousEmployment
(FNMA1005),ifapplicable
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CopyofmostrecentYTDpaystub(s),if
applicable
CopiesofW2sforthelast2years,ifapplicable
CopiesofsignedpersonalFederalIncomeTax
Returns(1040s)forlasttwoyearswithall
supportingschedules,ifapplicable
SelfemployedIncomeAnalysis(FNMA1084)
forselfemployedborrowers,ifapplicable
YeartoDateProfitandLossStatementanda
balancesheetifmorethanthreemonthshave
passedsincetheendofthelasttaxyear,if
applicable
BusinessCreditReport,ifapplicable
Allapplicablesignedtaxreturnsforself
employedborrowersorcommissioned
employeesincluding,butnotlimitedto,1040s
withallschedules,K1s,partnershipreturnsand
corporatereturns
AgreementofSale,SalesContract,orPurchase
andSalesAgreement,andEscrowInstructions,
includingamendments
CertificationofCompletionandValue,eitheras
aletterorasaformwhichprovidesthe
necessaryinformation,ifapplicable
UniformResidentialAppraisalReport(FNMA
1004)orAppraisalReportIndividual
CondominiumorPUDUnit(FNMA1073)or
AppraisalReportSmallResidentialIncome
Property(FNMA1025)
RecertificationofAppraisalReport,if
applicable
CertificationandStatementofLimiting
Conditions(FNMA1004B)
Astreetmapshowingthelocationofthesubject
propertyandofallcomparablesused
Anexteriorbuildingsketchofthe
improvementsindicatingthedimensions.A
floorplansketchisnotrequiredunlessthefloor
planisfunctionallyobsolete,resultingina
limitedmarketappealforthepropertyin
comparisontocompetitivepropertiesinthe
neighborhood.Forunitsincondominiumor
cooperativeprojects,interiorperimeterunit
dimensionsarerequiredinsteadofexterior
buildingdimensions
Originalcolorphotographsofthefront,street,
andrearviewsofthesubjectproperty
Originalcolorphotographsofthefrontviewof
eachpropertyusedasacomparable
SingleFamilyComparableRentSchedule
(FNMA1007)orOperatingIncomeStatement
(FNMA216),fortwofamilyproperties,if
applicable
Copyofthecanceledearnestmoneycheck
(frontandback),ifapplicable
Anyotherdataasanattachmentoraddendum
totheappraisalreportformnecessaryto
provideanadequatelysupportedestimateof
marketvalue
BorrowersCertificationandAuthorization
Letter(WMMSC406,orFNMAequivalent)
2.Allclosedloandocumentation(FNMAforms
referencedasindustrystandard,however,forms
equivalenttoFNMAsmaybesubstituted):
MortgageSubmissionVoucher(FreddieMac
13SF)completedinfull
BaileeLetter/TrustReceipt,ifapplicable
UnderwritingApprovalCertificate,original
copywhichwasreturnedtotheSellerafter
underwriting,orthepoolinsurancecertificate
fromaBuyerapprovedpoolinsurer.
Evidencethatallunderwritingconditionsof
loanapprovalhavebeensatisfied,ifanyexisted
(originalandonecopyofeachconditionis
required)
Copyofthenoteandanyapplicable
riders/addenda
Copyofanyassumption,modification,
consolidation,extensionorsubstitution
agreements,includinganymodification
agreementconvertinganadjustablerate
mortgagetoafixedratemortgage,ifapplicable
Copyofthesecurityinstrumentandany
requiredriders/addenda
Copyoftheassignmentofthesecurity
instrumentandinterveningassignment(s),if
applicable
Copyofthetitleinsurancepolicy
SignedcopyoftheoriginalARMdisclosure,if
applicable
CertifiedcopyofthesignedSettlement
Statement(HUDI)or,inescrowstates,the
EscrowAgentsEstimatedSettlement
Statementwhichisexecutedbytheborrower
andcertifiedasatrueandcorrectcopyofthe
original
Theoriginalsurvey/platdrawing.(Ifnot
customary,anendorsementtothetitlepolicy
insuringagainstcircumstanceswhichwould
havebeenshownonasurveyisrequired.)Ifan
approvedMasterTitlePolicyisusedwiththis
endorsement,nosurveywillberequired
Signed,certifiedcopyoftheoriginalGood
FaithEstimateofclosingcosts
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Signed,certifiedcopyoftheoriginalTruthin
Lending,RightofRescissionstatement
Originalmortgageinsurancecertificateand
endorsements,signedbytheSeller,ifapplicable
Originalrecordedpowerofattorneyorcertified
trueandcorrectcopyofthepowerofattorney,
ifapplicable
Copyofthetemporarybuydownschedule,if
applicable
3.Documentationshowingwhenandbywhomthe
loanwasapprovedandthetermsandconditionsof
suchapproval.
4.Documentationshowingthedate,amount,purpose,
andrecipientofeverydisbursementoftheproceeds
ofsuchloan,whethersuchdisbursementsaremade
directlybytheServicerorthroughescrowsorother
personsorconcerns.
5.Documentationcoveringallmodificationsofthe
originalmortgagecontractandshowingthe
appropriateapprovalofeachsuchmodification.
6.Documentationcoveringallreleasesofanyportion
ofthecollateralsupportingtheloan,showing:the
partofthepremisesinvolved;theconsideration,if
any,tosuchinstitution;andarecordofappropriate
approvalofeachsuchrelease.
7.Waterorirrigationcompanystockcertificates.
8.Ledgersheets.
9.Paymentrecords.
10.Insuranceclaimfilesandcorrespondence.
11.Collection,
Foreclosure/REO
files
and
correspondence.
12.Currentandhistoricalcomputerizeddatafiles,
whethergeneratedbytheServicerorbyaservice
bureau.
13.Originalsorcopiesofalldisclosuresrequiredby
stateandfederallawandregulation.
Allloanpapersanddocumentsnecessarytodocumentor
properlyserviceanyoftheBuyersloanswillremainthe
BuyerspropertyorthepropertyoftheBuyersdesignee
orassigneeatalltimes.RecordsintheServicers
possessionareretainedinacustodialcapacityonly.
Theserecordsshouldbemaintainedforsix(6)years
aftertheloanhasliquidated.
UpontheBuyerswrittenrequest,theServicermust
immediatelydeliverallmortgagerecordsanddocuments
totheBuyerortheBuyersdesignee.Thisdeliverymust
beaccompaniedbyalistidentifyingeachloanbyits
Buyerloannumber.TheBuyerwillnotberequiredto
executetrustreceiptsortoparticipateinthedeliveryof
therecordsanddocuments.IftheServicerhas
microfilmedorotherwisecondensedanyofthemortgage
recordsanddocuments,theServicermustpromptly
reproduceanyorallsuchmortgagerecordsatnocostto
theBuyer,oritsdesigneeorassignee,uponrequest.
B.RecordsStorage
Inlieuofretainingcopiesandoriginalsasrequired
above,theServicermaymaintainitsloanfilesinthe
formofmicrofilm,microficheorelectronicmedia,
providedthatthefollowingrequirementsaremet:
1.Thecopiesorelectronicmediaaremadeinthe
regularcourseofbusinesspursuanttoanestablished
writtenpolicyoftheServicerapplyingtoallofits
loanfiles:
2.Thecopiesorelectronicmediaaremadebya
processthataccuratelyreproducesorformsa
durablemediumforreproducingtheoriginal;
3.Thecopiesorelectronicmediaareclearlymarkedto
indicatetheBuyersownershipoftheloanandthe
Buyerloannumberassignedtoit;
4.TheServicermaintainsthecopiesorelectronic
mediainamannerthatpermitsreadytransferto
legiblehardcopiesofthematerialrelatingtothe
loansservicedfortheBuyer;
5.Areader/copierthatcanbeusedbytheBuyer
representativesismaintainedinthesameoffice
wherethecopiesarestored;and
6.TheServicermakesbackupcopiesandretainsthem
offsitetoprotectagainstfireandotherhazard
losses.
TheServicermustbeartheentirecostofrestoringloan
filesandrelateddocumentstransferredtomicrofilm,
microficheorelectronicmediaifthecopiesorelectronic
mediabecomedamagedorlostforanyreason,orif
legiblehardcopiesarerequestedbytheBuyer.
C.MortgageAccountRecords
Permanentmortgageaccountrecords,trackablebythe
assignedBuyerloannumber,mustbemaintainedfor
eachloan.TheBuyerdoesnotspecifytheparticular
systemorformstobeusedforthemortgageaccount
records,butrequiresthesystembecapableofproducing,
atanytimeforanyBuyerloan,anaccounttranscript
itemizingthefollowingsequence:
1.Thedate,amount,anddistributionofeach
installmentbyduedate,
2.Othertransactionsaffectingtheamountsduefromor
totheborrower,and
3.Thelatestoutstandingbalancesofprincipaland
interest,escrowaccountsfortaxesandinsurance,
buydownaccounts,andunappliedpayments.
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Thesystemmustalsoprovideforpromptdisclosureof
anyoverdraftintheaccountbalanceofdepositsforthe
paymentoftaxesandinsurance.
TheaccountrecordsontheBuyersloansshouldbe
maintainedaccordingtosoundandacceptedaccounting
practicesandinawaywhichwillpermittheBuyers
representativestoexamineandaudittheaccountrecords
uponrequest.
D.RequestforData
TheBuyerreservestherighttorequestloanlevel
informationforloansbeingserviced.Informationthatis
housedontheServicerssystemofrecordshouldbe
providedasrequestedbyfax,mail,oremailwithin3
businessdaysorwithinareasonableamountoftime
basedonthequantityandcomplexityofthedata
requested.
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Section201.LoanServicing
201.01ServicingOverview
ThissectionbrieflyoutlinestheServicers
responsibilitieswhenservicingloansfortheBuyer.For
fullinstructionsonservicingandloanaccounting,refer
totheappropriatesectionsofthisGuide.Theuseofthe
Buyersformswillalsobeexplainedinthosesections
anddetailedinstructionsareincludedonsomeforms.
1.TheServicermustservicetheloansaccordingto
industrystandards,thetermsofthemortgagenote
andsecurityinstrumentandapplicablestateand
federallawandregulation.
2.Paymentsmustbecollectedandappliedaccording
totheamortizationscheduleandtheescrow
requirementsofeachloan.Applicationofpartial
paymentsisnotallowedunlessapreapprovedrelief
planisinvolved.Generally,theBuyerpurchases
onlyinterestinarrearsloans,repayableinequal
monthlypayments,exceptforthelastpayment,
basedona30daymonth/360dayyear,reducingthe
principalbalancetozeroattheendoftheterm.Any
formofcapitalizationisnotallowedunderthe
Buyerspurchaseprograms.
3.TheServicermustestablishandmaintainseparate
custodialaccountsfor(i)principalandinterest(the
P&ICustodialAccount),and(ii)taxesand
insurance(theT&ICustodialAccount).Unless
otherwiseapprovedinwritingbytheBuyer,the
fundsintheseaccountsmustbekeptseparatefrom
theServicersgeneralassets.TheServicersrecords
mustclearlyshowtherespectiveinterestsofthe
ServicerandtheBuyerinallaccountsandofeach
individualborrowerinthetaxandinsurance
accounts.
4.Theaccountingperiodcutoffdateisthecalendar
monthend,andtheServicermustsubmitaccounting
reportsnolaterthanthefifth(5th)businessdayof
thefollowingmonth.Theremittancewithdrawalis
originatedbytheBuyerviatheAutomatedClearing
House(ACH)networkonthe20thcalendardayof
eachmonthorontheprecedingbusinessday.The
monthlywithdrawalbytheBuyerwillinclude:
Allscheduledprincipalandinterestpayments
duethefirstdayofthecurrentmonth.
Delinquentpaymentsareincludedevenifthey
havenotbeencollectedfromtheborrower.
Prepaidpaymentsarenotincludeduntiltheyare
due.
Alladditionalprincipalandinterest
collectedinthepreviouscalendarmonth
representingexceptionactivity(e.g.,
liquidationsofanytypeorpartial
prepaymentsofprincipal)asreportedtothe
Buyerviatheaccountingreport.
Collectionofunscheduledprincipalmust
beproperlyappliedtotheoutstanding
mortgageloanprincipalbalanceorthe
relatedmortgageloanmaynotproperly
amortize.Servicersmustcalculateand
applyacurtailmenttoensurethatthe
unpaidprincipalbalanceofthemortgage
loansproperlyamortizes.
5.TheServicermustnotifytheBuyerofthestatus
ofallloans90daysormoredelinquent.
Informationregardingsuchmortgageloans
mustbeprovidedbytheServicertotheBuyer
electronically,nolaterthanthefifth(5th)
businessdayofthemonth.
6.TheServicermustprovidetheBuyerwith
responsestoalldelinquency,foreclosure
bankruptcyandREOexceptionreportsvia
electronicformatnolaterthanthetenth(10th)
businessdayofthemonth.
7.TheServicermustensurethateachproperty
securingaloaniscoveredbyahazardinsurance
policyatalltimes.
8.TheServicermustmaintaintaxrecordsand
forwardtimelytaxpaymentstotherespective
taxingauthorities,ifapplicable.
9.TheServicermustmaintainrecordsofallloans
whichcarryprimarymortgageinsuranceand
floodinsurance.Itmustalsoensuretimely
paymentofthepremiumsfortheseinsurance
coverages.
10.TheServicerisobligatedtoadvanceprincipal
andinterestfundsifaloanbecomes
delinquent,escrowfundsifthereisanescrow
shortage,andfundsforemergencyrepairs,as
necessary.
11.Whenareasonableefforttocureadefaulted
loanisunsuccessful,theServicermust
recommendliquidationunderaccepted
servicingprocedures.Liquidationmaybe
accomplishedbyforeclosingontheproperty,
byacceptingadeedinlieuofforeclosure,or
throughapreforeclosuresale.TheBuyermust
beprovidedwithwrittennotificationforall
loansinwhichtheServicerinitiatesa
foreclosurereferral.Principalandinterest
ServicerGuide:LoanServicing
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Section201.LoanServicing
advancesmustcontinuethroughforeclosure
andREOuntilthemortgagedpropertyhas
beenfullyliquidatedandremovedfromthe
pool.
12.ShortlyaftertheBuyerpurchasesaloan,itis
placedintoamortgagedbackedpool.The
Servicermaynotwaive,modifyorvarythe
maturitydate,loaninterestrateorotherterms
ofaNote/Mortgageonanyloansoldtothe
BuyerwithouttheBuyersapproval.
13.Uponreceiptofliquidationfundsor
notificationofforeclosurereferral,theBuyer
willreleasetheoriginaldocuments(if
documentsareneededforforeclosure,the
Buyerwillreleasethemortgagedocuments
uponfullreinstatementofloanorcertification
fromofficerthatdocumentsarenolonger
needed).
14.TheServicermustincludetheWMMSC
assignedservicernumberonallreportsand
correspondencesenttotheBuyerinorderto
identifytheloansbeingserviced.
15.Allcorrespondence,loanaccountingandloan
servicingreportsshouldbesenttothe
appropriateaddress,aslistedinAppendixB.
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Section202.TaxandInsuranceEscrows
202.01BorrowersEscrowAccount
A.EstablishingtheAccount
WhenconsistentwiththeServicersnormalservicing
practicesandnotprohibitedbylaw,theServicermust
establishanescrowaccountintowhichtheborrower
depositsmonthlyamountssufficienttopayestimated
mortgageandhazardinsurancepremiums,including
renewalpremiums,taxes,groundrents,special
assessments,premiumsformortgagelifeordisability
insuranceandotherchargesastheybecomedue.These
itemswillthenbepaidfromthisaccount.
IftheServicercollectsanddisbursesadditionalfundsfor
thepaymentofotherinsurancepremiums,suchaslife,
majormedical,disability,mortgagecancellation,orother
assessmentswhichtheBuyerdoesnotrequireaspartof
theborrowersmonthlyinstallment,theServicermust
ensure:
Theborrowersmonthlyinstallmentpaymentisnot
returnediftheborrowerfailstoremittheadditional
funds.
Fundsfromtheborrowersescrowaccountarenot
usedtomakeupanyshortagescausedbythe
borrowersfailuretopaytheadditionalfunds.
Theborrowersmonthlybillingorcoupon
distinguishesbetweentheamountofthemonthly
installmentrequiredbytheBuyerandtheamountof
theadditionalfunds.
FundspaidbytheServicerarenotcapitalized.
TheServicerissolelyresponsiblefortheadministration
oftheborrowersescrowaccount.
B.MaintainingtheEscrowAccount
TheServicermustpromptlypayallbillsforescrow
items.TheServicerholdstheBuyer,itssuccessorsand
assigns,harmlessfromallpenalties,losses,ordamages
resultingfromtheServicersfailuretofulfillthis
responsibility.
Foranymortgageloanwhichhasamortizeddownsothat
theLTVis80%orless,theServicermaywaivethe
borrowersfutureobligationtodepositamountsinthe
taxandinsurancereserveprovided:
Theunpaidprincipalbalanceofthenotedividedby
thelesseroftheoriginalappraisedvalueofthe
propertyorthesalespriceis80%orless;
Themortgageisatleast12monthsold;and
Themortgagehasnotbeenmorethan30days
delinquentduringthepreceding12months.
IftheServicerwaivestherighttocollectescrows,the
Buyersrighttoenforcetherequirementiftheborrower
failstoactresponsiblymustberetained.Forspecific
detailsonwaivingprimarymortgageinsurance,referto
Section203.04A.
C.NonEscrowedLoans
IftheServicerdoesnotcollectescrowfundsona
mortgageloan,theServicermustrequireproofof
paymentsofalltaxes,groundrents,assessments,
insuranceorothercharges,oruseothermeans
commonlyusedinthemortgageindustrytosatisfyitself
thatsuchitemsarepaidonatimelybasis.The
ServicersErrorsandOmissionPolicymustalsoinsure
theServicerintheeventlossesareincurrediftaxesor
insurancepremiumsarenotpaidwhendue.The
ServicermustnotifytheBuyerimmediatelyofanyitem
notpaidonatimelybasisandrecommendtotheBuyera
courseofactionundersuchcircumstances.TheBuyer
retainstherighttoenforcethetaxandinsurancereserve
requirementsiftheborrowerfailstoactresponsibly.
D.EscrowAdvances
Whenfundsheldinanescrowaccountareinsufficientto
paytaxes,assessments,groundrents,orothercharges
whichareormaybecomealienonthemortgaged
property,primarymortgageinsurancepremiums,hazard
insurancepremiums,waterorirrigationcompanystock
assessmentsorcharges,theServicermustadvanceits
ownfundstotheindividualborrowersaccount.The
Servicermustdisbursethenecessaryfundsfromthe
borrowersescrowaccountevenifthedisbursement
causesadeficitbalancefortheindividualborrower.
E.ResponsibilityforPayingInterest
TheServicerisresponsibleforpayinganyinterestonthe
borrowersescrowaccountasrequiredbystatelaw.The
BuyerwillnotreimbursetheServicerforanyinterestor
earningspaidtotheborrowerorcreditedtothe
borrowersaccount.
F.AnalysisoftheAccount
Ifanescrowaccountisestablished,theServicermust
determinetheamountofthemonthlydeposittobe
madebytheborrowerandprovidehimorherwithan
analysisofthisaccountatleastannually.Ifasurplus
existsinaborrowersescrowaccount,suchexcessmay
betakenintoconsiderationinfixingtheamounttobe
collectedfortheaccountforthefollowingyearora
refundtotheborrowermaybemadeiftheloanis
current.Ifthesurplusissufficientorissupplementedby
anadditionalcollection,itmaybeusedtopayoneor
morefullinstallmentsofprincipalandinterestoran
additionalprincipalpayment,providedsuchactionsare
consistentwiththetermsoftheloandocumentsandthe
wishesoftheborrower.
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Section202.TaxandInsuranceEscrows
TheServicermayretainasurplusintheborrowers
escrowaccounttotheextentpermittedbytheloan
documentsandallapplicablelaws.Anaverageescrow
balancemustbereflectedontheannualanalysisand
providedtotheborroweruponrequest.
G.AnnualStatementtotheBorrower
Attheendofthecalendaryear,theServicermustsend
theborroweranannualstatementoftheborrowers
account,includingthefollowing:
Thebalanceoftheescrowaccountatthebeginning
oftheyear,
Thetotalamountdepositedintotheescrowaccount
bytheborrowerduringtheyear,
Thetotalamountappliedtotheprincipal,
Thetotalamountappliedtointerest,
Theamountandnatureofdisbursementsmade
duringtheyear(includingalltaxespaidonthe
borrowersbehalf),and;
Thefinalbalanceofallaccountsatyearend.
Upontheborrowersrequest,theServicermustalso
provideadetailedledgeranalysisofalltransactions
affectingtheborrowersmortgagepaymentrecordand
depositaccount,showingindividualdates,amountand
purposesofeachdebitandcredittotheaccounts,
includingthebeginningandendingbalances.
202.02Taxes,
Ground
Rents,
Assessments,andRelated
Charges
TheServicermustmaintainaccuraterecordsontaxes,
groundrents,assessmentsandotherchargeswhichareor
couldbecomealienonpropertiessecuringloans
servicedfortheBuyer.TheServicershouldpaysuch
chargesbeforeanypenaltydateandintimetosecure
themaximumdiscountsavailable.TheServiceris
responsibleforthetimelypaymentofallsuchbillsand
mustpayallpenalties,losses,ordamagesresulting
fromitfailuretodischargethisresponsibility.Similarly,
penaltiesforthelatepaymentoftaxescannotbepassed
ontotheborrowerunlesstheborrowerdirectly
contributedtotheimpositionofthepenalty.
202.03WaterorIrrigationStock
Certificates
Ifapropertyisdependentonasupplyofwaterfurnished
byawaterorirrigationcompanytoitsstockholders,the
stockcertificatemustbeendorsedbytheborrowerand
retainedbytheServicer.TheServicershouldpaythe
assessmentsorchargesforservicesfurnishedtothe
propertyfromtheborrowersescrowaccountifthis
practiceiscustomaryinthelocality.Otherwise,the
Servicermustannuallydeterminewhethertheitemshave
beenpaidbytheborrowerand,ifnot,shouldrequirethe
borrowertomakethepayment.Iftheborrowerdoesnot
makethepayment,however,theServicermustadvance
thenecessaryfundsandmaycreateanescrow
requirementforfutureinstallments.Intheeventastock
certificateislost,theServicermusttakewhateveraction
isnecessarytoobtainareplacementcertificate.Allfees
andexpenseswillbethesoleresponsibilityofthe
Servicer.
202.04InsuranceReserves
Iftheborrowerfailstomaintaintherequiredhazard
insurancecoverage,theServicermustobtaintherequired
coverageandmustcausethepolicytoremaininforceas
longastheServicerservicestheloan.
IftheServiceractedasabrokeroragentinplacing
insurancecoveragenotrequiredbytheBuyer,theBuyer
willnotberesponsibleforanyattorneysfeesandcosts
resultingfromdisputeswithcarriersofsuchinsurance.
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Section203.InsuranceRequirements
203.01General
TheServicermustverifythatthefollowinginsurance
coveragesareinplaceatalltimesforeachmortgage:
Hazard,flood,condominiumandPUDinsurancein
accordancewiththetermsofthisServicerGuide.
Primarymortgageinsuranceinaccordancewiththis
ServicerGuide.
Allclaimsarisingundersuchinsurancecoveragemust
besettledorotherwisedisposedofbytheServicer,and
allsuchinsurancemustbemaintainedatnoexpenseto
theBuyer.
A.EvidenceofInsurance
Foreachmortgage,theServicermustmaintainthe
followingdocumentation:
1.Foronetofourfamilydwellings,anoriginalofthe
hazardinsurancepolicy,floodinsurancepolicy(if
applicable),andanyrelatedendorsement(s).
2.ForpropertiescoveredunderablanketPUDor
condominiumassociationpolicy,anoriginalofthe
blanketpolicy,anyfloodinsurancepolicy,andany
relatedendorsement(s).
Inlieuofapolicy,theServicermaymaintaina
certificateorotherevidenceofinsuranceshowingat
leastthefollowinginformation:
1.Nameofinsuredandmortgagee(nameofinsured
ownersassociation,unitowner,andunitowner
mortgageeifaPUDorcondominiumunit);
2.Addressofmortgagedproperty;
3.Type,amountandeffectivedatesofcoverage;
4.Deductibleamount;
5.Anyendorsementoroptionalcoverageobtainedand
madepartoftheoriginalpolicy;
6.Insurersagreementtoprovideatleastten(10)days
priornoticetothemortgagee(orapplicableunit
ownermortgageeifforaPUDorcondominium
unit)beforeanyreductionincoverageor
cancellationofthepolicy;and
7.Signatureofanauthorizedrepresentativeofthe
insurer,ifrequiredbylaw.
ThePolicyDeclarationspageofaNationalFlood
InsuranceProgram(NFIP)policyisacceptableevidence
offloodinsurance.
TheServicermustpossessaspecimenofeachpolicyand
endorsementforwhichacertificateorotherevidenceof
insuranceismaintainedinlieuofthepolicyor
endorsement.
B.IndemnityofWMMSC
InadditiontoallotherremediesoftheBuyerprovided
forintheSellingandServicingAgreementandthis
ServicerGuide,theServicerwillindemnifytheBuyer
foranylosstheBuyersustainsontheproperty.
C.InsuranceCharges
Premiumsforinsurancecoveringthepropertywillbe
paidwhenduebyborrowersortheServicerifthe
Servicercollectsescrowfundsforsuchpurposes.
PremiumsforinsuranceobtainedbyaPUDor
condominiumownersassociationforthebenefitofthe
PUDorcondominiumprojectwillbepaidbythe
associationasacommonexpenseassessabletoallunit
owners.
D.ChangesinInsuranceRequirements
TheServicermustrequiretheborrowertoobtain
appropriateinsurancecoverageinaccordancewiththe
termsofthesecurityinstrumentwheneitherofthe
followingconditionsexists:
1.TheServicerbecomesawarethatexistingcoverage
doesnotadequatelyprotecttheproperty;or
2.Theareawherethepropertyislocatedwasnot
subjecttofloodinsurancerequirementsatinception
ofthemortgageorwhentheBuyerpurchasedthe
mortgage,buthasnowbeenclassifiedasaSpecial
FloodHazardAreaandtheServicerhasbecome
awareofsuchclassification.
TheServicermustverifythatadequatecoveragehas
beenobtainedandremainsinforce.Iftheborrowerdoes
notobtainsuchcoverage,theServicermustdoso.The
Servicerwillthenadjusttheborrowersescrow
paymentsaccordinglyorbilltheborrowertorecoverthe
advanceiftheServicerdoesnotmaintainanescrow
accountfortheborrower.Iftheborrowerrefusesto
reimbursetheServicer,theServicermayrecommend
accelerationtotheBuyerfortheborrowersdefault
underthetermsofthesecurityinstrument.
Iftheadditionalcoveragecannotbeobtained,the
Servicermustimmediatelymakeappropriate
recommendationstotheBuyer.
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TheServicermayauthorizetheborrowertodiscontinue
floodinsurancecoverageuponverificationofmap
revisionorreceiptofaLetterofMapAmendmentfrom
theFederalEmergencyManagementAgency(FEMA).
E.InsuranceLossSettlements
Uponnotificationoflossordamagetotheproperty,the
Servicerwillmonitorandcoordinatetheclaimprocess
withtheborrowerandtheinsurer.TheServicermust
takeappropriateactionto:
1.Verifytheextentofthelossordamage;
2.Ensurejudiciousdisbursementofinsurance
proceedsforthenecessaryrepairs;
3.Protectthepriorityofthesecurityinstrumentby
obtainingwaiversofmaterialsmansormechanics
liens;
4.Haveasystemforthecontrolanddispositionof
insurancelossdrafts,clearlyidentifyingthe
individualborrowersaccountthroughtheT&I
CustodialAccount.(TheBuyermustnotbenamed
asapayeeonanyinsurancelossdraft.TheServicer
mustbenamedonalldraftsinexcessof$1,000.)
5.Obtainappropriateborroweraffidavitreflecting
theirsatisfactionwiththequalityoftherepairwork;
6.Documentcompletionoftherepairs;and
7.Lossdraftfundsreceivedmustbeheldinacustodial
account(passbookaccountsarenotacceptable).
TheServicermustbenamedaslosspayeeoninsurance
draftsinexcessof$1,000andmustcomplywithany
applicablelawand,whereapplicable,anyrequirementof
themortgageinsurer.Detailsconcerningthelossor
damageanddispositionoftheinsuranceproceedsmust
berecordedintheloanfile.TheServicermustobtainthe
Buyer'sapprovalforuseofanyoutsourcingfirmor
vendorforthepurposeofhazardinsuranceclaimsreview
andsettlement.
TheServicerneednotsubmitareportandrelated
recommendationstotheBuyerunless:
Thesecurityinstrumentisinforeclosureorthe
propertyhasbeenacquiredbytheServicerthrough
foreclosureordeedinlieuofforeclosure;
Propertydamageexceeds$5,000andtheloanis60
ormoredaysdelinquent;
Thepropertyhassufferedatotalorneartotalloss;
TheServicerwishestoapplyinsuranceproceedsto
themortgageinsteadofrepairingtheproperty;or
Insuranceproceedsexceedtheamountsrequiredto
restorethepropertytoitsoriginalcondition.
F.NoticeofLossCondominiumsandPUDs
Theownersassociationofacondominiumprojectmust
agreeinwritingtonotifytheServicerwhenever
i)
damagetoasingleunitcoveredbyamortgage
purchasedbytheBuyerexceeds$5,000;and
ii)
damagetocommonareasandrelatedfacilities
exceeds$10,000.
ForPUDprojects,theownersassociationmustagreein
writingtonotifytheServicerwheneverdamageto
commonareasorrelatedfacilitiesexceeds$10,000.
G.NaturalDisasterLosses
Whenanaturaldisaster(earthquake,flood,tornado,etc.)
resultsinlossesordamagestotheproperty,theServicer
mustpromptly:
Ascertainthenumberofsuchproperties;
Determinetheextentofthelossesordamages;
Secureanyabandonedpropertyagainstvandalismor
theelements;
Assisttheaffectedborrowersinfilingforany
disasterreliefaidavailable;
Assisttheaffectedborrowersthroughcounseling
andanyappropriaterepaymentplan;and
NotifytheBuyerandmakeappropriate
recommendations.
Ifthedisasterresultsinuninsuredlosses,theServicer
mustforwardacompletereportofthefindingstothe
Buyerandrecommendacourseofactiontoprotectthe
interestsoftheBuyerandtheborrower.TheServiceris
authorizedtoexpendupto$2,500foremergencyrepairs
asspecifiedinSection204.02.
203.02HazardInsurance
A.AmountofCoverage
ForonetofourfamilyresidencesandindividualPUD
units,theamountofhazardinsurancecoveragemustat
leastequalthelesserof:
1.100%oftheinsurancevalueoftheimprovements,
or
2.Theunpaidprincipalbalanceofthemortgage
provideditequalstheminimumamountrequiredto
compensatefordamageorlossonareplacement
costbasis.Ifitdoesnot,thencoveragewhich
providestheminimumrequiredamountmustbe
obtained.
CoverageforcondominiumandPUDprojectsmustbe
100%ofcurrentreplacementcostfortheprojects
facilities,includingtheindividualunitsina
condominiumprojectorinaPUDprojectwherethe
blanketpolicycoverstheindividualunits.
Theinsurancecoveragemaynotbeless,however,than
theminimumamountrequiredunderthetermsof
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coveragetofullycompensateforanydamageorlosson
areplacementcostbasis.
TheServicermustensurethatthepropertymustalsobe
adequatelycoveredevenwhenvacantand,where
necessary,mustobtainavacancypermitendorsement.
B.DeductibleAmounts
Unlessahighermaximumamountisrequiredbystate
law,themaximumdeductiblemustbe:
1.Foronetotwofamilyresidencesandindividual
PUDunits:$1,000or1%ofthepolicyfaceamount,
whicheverisless.
2.ForPUDcommonareasandcondominiumprojects:
$10,000or1%ofthepolicyfaceamount,whichever
isless.Ifthepolicyisablanketpolicywhichalso
coverstheindividualPUDunits,thedeductible
relatedtotheindividualunitsshouldbe$1,000or
1%oftheunitsreplacementcost,whicheverisless.
Thedeductiblemayapplytoeitherfireorextended
coverageortoboth.ForcondominiumandPUD
projects,fundstocoverthedeductibleamountsshould
beincludedinthehomeownersassociationoperating
reserveaccount.
C.Carrier
Thepolicymustbeunderwrittenbyacompanycurrently
ratedB/IIorbetterinBestsInsuranceReportsorthe
coveragemustbeunderwrittenbyLloydsofLondon.In
addition,thecompanymustbelicensedtodobusinessin
thestateinwhichthepropertyislocated.
D.MortgageeClause
TheServicersnamemustappearinthemortgagee
clauseofthehazardinsurancepolicyfollowedbythe
phrase,itssuccessorsorassigns.WMMSCshouldnot
appearasmortgageeunlessthepolicycoveragewouldbe
impaired.
203.03FloodInsurance
Floodinsuranceisrequiredatalltimesforanyproperty
locatedinaSpecialFloodHazardAreawhichhas
federallymandatedfloodinsurancepurchase
requirements.PropertieslocatedinSpecialFlood
HazardAreasdesignatedbysymbolsA,AE,A130,AH,
AO,A99,V,VEandV130requirefloodinsurance.
Floodinsurancerequirementsmaybewaivedifi)the
improvementsarenotinaSpecialFloodHazardArea
eventhoughpartoftheproperty(theland)maybe,and
ii)aletterfromtheFederalEmergencyManagement
Agency(FEMA)isprovidedstatingthemapshavebeen
amendedsothatthepropertyisnolongerinaSpecial
FloodHazardArea.
A.AmountofCoverage
Theamountoffloodinsurancerequiredonallproperty
typesis:
1.Theloweroftheminimumamountrequiredto
compensateforanydamageorlossonacurrent
replacementcostbasis(ortheunpaidprincipal
balanceofthemortgageifreplacementcost
coverageisnotavailable),or
2.Themaximuminsuranceavailableunderthe
appropriate
National
Flood
Insurance
Administration.
B.DeductibleAmounts
Forallpropertytypes,unlessahighermaximumamount
isrequiredbystatelaw,thedeductiblemaynotexceed
$1,000or1%ofthepolicyfaceamount,whicheveris
less.
ForcondominiumandPUDcommonareasandeach
buildinginahighriseorverticalcondominiumproject,
thedeductiblemaynotexceed$5,000or1%ofthe
policyfaceamount,whicheverisless.Fundstocover
thedeductibleamountshouldbeincludedinthe
homeownersassociationoperatingreserveaccount.
C.Condominiums
Ifthepropertyisacondominiumandfloodinsuranceis
required,theborrowermustobtainfloodinsuranceon
theindividualunitinadditiontotheinsurancewhich
mustbemaintainedbythehomeownersassociationas
partoftheprojectsblanketfloodinsurancepolicy.The
onlypermissibleexceptionstothiscoveragerequirement
are:
1.Three(3)storycondominiumprojectswithfive(5)
ormoreunitswherethecondominiumis
participatingintheCondominiumMasterPolicy
programwhichbecameavailableonJanuary1,
1989,andisofferedbytheNFIP.Underthispolicy,
theentirebuildingiscoveredunderonepolicy,
includingallunitswithinthebuildingand
improvementsandbettermentswithintheunits
whichareownedincommon.
UndertheCondominiumMasterPolicyprogram,
themaximumamountofbuildingcoveragewhich
canbepurchasedistheactualcashvalueofthe
buildingorthetotalnumberofunits(residentialplus
nonresidential)inthebuildingtimes$185,000,
whicheverisless.
2.Thehomeownersassociationhasinsurance
coverageontheactualcashvalueofthebuilding
whichwouldsufficientlycovereachunitsmarket
valuealongwithallcommonareaswithinthe
complexintheeventofaflood.
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NOTE:Manyinsuringagentsand/orhomeowners
associationswillinsisttheyareproviding
sufficientcoverage.Eveniftheprojectis
insuredunderthenewCondominiumMaster
Policy,theServicermustobtainacopyofthe
Declarationpageofthecondominium
projectsfloodinsurancepolicytodetermine
thatthepolicyamountissufficienttocoverthe
marketvalueofallunitsandcommonareas.
Ifthecoverageisnotsufficient,theborrower
mustobtainfloodinsuranceontheindividual
unitinadditiontotheinsurancemaintainedby
thehomeownersassociation.
D.PUDsandTownhomes
IfthepropertyisinaPUDorisatownhomeandflood
insuranceisrequired,theborrowermustmaintain
floodinsuranceontheindividualunitunlessthereare
improvedcommonareassuchasaclubhouse,tennis
courtsorpools,inwhichcase,floodinsurancemustbe
maintainedbythehomeownersassociationinaddition
totheborrowersindividualunitcoverage.IfthePUD
ortownhomeprojecthasonlyimprovedorlimited
commonareassuchassidewalks,greenbeltsorparking
lots,thehomeownersassociationwillnotberequiredto
maintainafloodinsurancepolicyinadditiontothe
borrowersindividualunitpolicy.
E.MortgageeClause
TheServicersnamemustappearinthemortgagee
clauseofthefloodinsurancepolicyfollowedbythe
phrase,itssuccessorsorassigns.WMMSCshouldnot
appearasmortgageeunlessthepolicycoveragewouldbe
impaired.
203.04MortgageInsurance
TheServicermustmaintaintheprimarymortgage
insurancecoveragewhichwasrequiredforeachloanat
thetimeitwasinitiallyunderwrittenandapprovedfor
saletotheBuyer.However,theServicershouldbe
awarethatduetocurrentpoolcriteria,requiredcoverage
mayvary.
Primarymortgageinsurancemustbeobtainedfrom
companiesmaintainingatleastaAAratingfrom
StandardandPoorsCorporation.Whenmortgage
insuranceisrequired,theServicermustensurethe
mortgageinsurermeetstheBuyerscriteria.
IftheServicerdoesnotmaintaintherequiredamountof
insurancecoverage,replacementcoveragemustbe
obtainedbytheServiceratitsownexpensetoconform
withtheoriginalrequirements.TheServicermustsend
theBuyerevidenceofthisreplacementcoverage.
Ifaninsuredadjustableratemortgageisconvertedtoa
fixedratemortgage,theServicermustensurethe
appropriatemortgageinsurancecoverageismaintained.
TheServicermustnotifythemortgageinsurerofthe
conversionofanyuninsuredloan,mustobtainany
amendmentneededtoconvertfromARMcoverageto
fixedratecoverage,andmustsendthisamendmenttothe
Buyer.IfcancellationoccursduetoServicererrorthe
Buyerreservestherighttorequestrepurchaseofthe
loan.
A.CancellationofPrimaryMortgage
Insurance
TheBuyerwillconsidercancellationofprimary
mortgageinsuranceonacasebycasebasis.Approvalis
inthesolediscretionoftheBuyer,isnotautomaticand
willbesubjecttotheapplicableState'sspecificlawsand
regulations.Thefollowingdocumentationisrequired:
Loanhistoryverifyingthatnopaymenthasbeen:
30daysormorepastdueinthelast12months;
and
60daysormorepastdueinthelast24months.
Copyoftheoriginalorcurrentappraisal.Useof
currentappraisalmustbeapprovedbyBuyer.
Iftheappraisalistheoriginal,theServicerwill
warrantthatthecurrentvalueisatleastequalto
theappraisedvalue.
Anewappraisalmustbebasedonaninspection
ofboththeinteriorandexterioroftheProperty.
Servicerwillwarrantthatithasreviewedthe
appraisalandissatisfiedthattheopinionof
valueisbothreasonableandadequately
supportedbymarketdata.
TheServicermaychargetheborrowerforthe
costofanewappraisal.
Evidenceofseasoning.Evidenceoftwoyears
ofseasoningisrequired.
203.05CondominiumInsurance
PriortothesaletotheBuyerofaloansecuredbyaunit
inacondominium,theServicermustobtainwritten
evidencethatthescopeandamountofinsurance
coveragemeetsorexceedsalllocallaws,ordinancesand
regulationscoveringcondominiumsandthat,inaddition,
thefollowingminimumrequirementsforinsurance
coveragearesatisfied:
A.ScopeofCoverage
Amultiperiltypeofpolicyisrequiredcoveringtheentire
condominiumproject.Thepolicymustprovide,ata
minimum,fireandextendedcoverageandallother
coverageinthekindsandamountscommonlyrequired
byprivateinstitutionalmortgageinvestorsforprojects
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similarinconstruction,locationanduse.Coveragemust
beonareplacementcostbasisforatleast100%ofthe
insurablevaluebasedonareplacementcost.
B.BoilerExplosionInsurance
Ifasteamboilerisoperatingontheproperty,boiler
explosioninsurancemustbeinforce.Thisinsurance
mustbeevidencedbythestandardformofboilerand
machineryinsurancepolicyandmustprovide,ata
minimum,$100,000,peraccidentperlocation.
C.SpecialFloodHazardInsurance
Ifthecondominiumprojectisinanareaidentifiedbythe
SecretaryofHousingandUrbanDevelopmentashaving
specialfloodhazards,ablanketpolicyofflood
insurancemustbemaintainedonthecondominium
projectintheamountoftheaggregateoftheoutstanding
principalbalancesofthemortgagesonthecondominium
units,orthemaximumlimitofcoverageavailableunder
theNationalFloodInsuranceActof1968,asamended,
whicheverisless.
D.NameofInsured
Thenameoftheinsuredstatedundereachrequired
policymustbesimilarinformandsubstancetothe
following:
AssociationofOwnersofthe[Nameof
Condominium]foruseandbenefitofthe
individualowners(designatedbyname,if
required).
E.MortgageeClause
Eachpolicymustcontainthestandardmortgageeclause
endorsedtoprovidethatanyproceedswillbepaidtothe
AssociationofOwnersofthecondominiumfortheuse
andbenefitofmortgageesastheirinterestmayappear,or
otherwiseendorsedtofullyprotecttheinterestofthe
Buyer.
Whenamortgageeclauseisnotapplicable,acertificate
mustbeobtainedbytheServicer.Thiscertificatemust
containtheinformationrequiredforcertificateswhichis
setforthinSection203.01A.Thecertificatemustname
theServicerasthecertificateholderinsteadof
mortgagee.
F.FidelityInsurance
Thecondominiumownersassociationmusthavefidelity
coverageagainstdishonestactsonthepartofdirectors,
managers,trustees,employeesorvolunteersresponsible
forhandlingfundsbelongingtooradministeredbythe
condominiumownersassociation.Thefidelitybondor
insurancemustnamethecondominiumowners
associationastheinsured.Thecoveragemustequalthe
maximumamountoffundsheldbythehomeowners
associationatanyonetimeandmusttotalatleastthree
(3)monthsofassessmentsontheentireproject,plus
reserves.Anappropriateendorsementtothepolicyto
coveranypersonswhoservewithoutcompensationmust
beaddedifthepolicywouldnototherwisecover
volunteers.
G.PublicLiabilityInsurance
Thecondominiumownersassociationmusthavea
comprehensivepolicyofpublicliabilityinsurance
coveringallofthecommonelements,commercialspaces
andpublicwaysinthecondominiumproject.The
insurancepolicymustcontainaseverabilityofinterest
endorsementprecludingtheinsurerfromdenyingthe
claimofacondominiumunitownerbecauseofnegligent
actsofthecondominiumownersassociationorother
businessunitowners.Coveragemustincludeallother
coverageinthekindsandamountsrequiredbyprivate
institutionalmortgageinvestorsforprojectssimilarin
construction,locationanduse.Liabilitycoveragemust
beforatleast$1millionperoccurrenceforpersonal
injuryand/orpropertydamage.
203.06PUDInsurance
Exceptasprovidedinthefollowingsectionsallcoverage
inthekindsandamountsrequiredformortgagesinthis
ServicerGuideisalsorequiredformortgagessecuredby
PlannedUnitDevelopment(PUD)anddeminimusPUD
units.
A.BlanketInsuranceCoverage
Inlieuofmaintaininganindividualhazardinsurance
policyoneachPUDunit,thePUDcorporation,
homeownersassociation,ortrustmaymaintainblanket
hazardinsuranceproviding,ataminimum,fireand
extendedcoverageandallothercoverageinthekinds
andamountscommonlyrequiredbyprivateinstitutional
mortgageinvestorsfordevelopmentssimilarin
construction,locationanduse.Thecoveragemustbein
anamountequaltothefullreplacementvalueofallof
thePUDunitswithoutdeductionfordepreciationor
coinsurance,includingthestructuralportionsand
fixturesownedbythePUDunitowners.Insurance
premiumsfromanyblanketinsurancecoveragemustbe
acommonexpenseofthePUDcorporation,
homeownersassociation,ortrustandbeincludedinthe
regularcommonassessmentsofthePUDunitowners.
ThecoveragemustnamethePUDcorporation,
homeownersassociation,ortrustastheinsuredforthe
benefitofthePUDunitowners.
B.CommonPropertyCoverage
ThePUDcorporation,homeownersassociation,ortrust
musthavefireandextendedcoverageforatleast100%
ofthereplacementcostoftheinsurablePUDcommon
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property.TheinsurancemustnamethePUD
corporation,homeownersassociation,ortrustasthe
insuredforthebenefitofthePUDunitowners.No
mortgageeclauseinfavorofthePUDunitmortgageesis
requiredbytheBuyeroninsurancecoveringcommon
property.
C.FidelityInsurance
ThePUDcorporation,homeownersassociation,or
trustmusthavefidelityinsurancecoveringlossesre
sultingfromdishonestorfraudulentactsonthepartof
thedirectors,managers,trustees,employeesor
volunteersresponsibleforhandlingfundscollectedand
heldforthebenefitofthePUDunitowners.Thefidelity
bondorinsurancemustnamethePUDcorporation,
homeownersassociation,ortrustastheinsured.The
coveragemustequalthemaximumamountoffundsheld
bythehomeownersassociationatanyonetimeand
musttotalatleastthree(3)monthsofassessmentsonthe
entireproject,plusreserves.Anappropriate
endorsementtothepolicytocoveranypersonswho
servewithoutcompensationmustbeaddedifthepolicy
wouldnototherwisecovervolunteers.
NOTE:ThissectiondoesnotapplytodeminimusPUDs.
D.PublicLiabilityInsurance
ThePUDcorporation,homeownersassociation,ortrust
musthaveacomprehensivepolicyofpublicliability
insurancecoveringallofthePUDcommonproperty.
Theinsurancepolicymustcontainaseverabilityof
interestclauseorendorsementprecludingtheinsurer
fromdenyingtheclaimofaPUDunitownerbecauseof
negligentactsofthePUDcorporation,homeowners
association,ortrust,orotherunitowners.Coverage
mustincludeallothercoverageinthekindsandamounts
commonlyrequiredbyprivateinstitutionalmortgage
investorsforprojectssimilarinconstruction,location
anduse.Liabilitycoveragemustbeforatleast$1
millionperoccurrenceforpersonalinjuryand/or
propertydamage.
E.MortgageeClause
Eachpolicymustcontainthestandardmortgageeclause
endorsedtoprovidethatanyproceedswillbepaidtothe
[NameofPUDcorporation,association,ortrust]for
theuseandbenefitofmortgageesastheirinterestmay
appear,orotherwiseendorsedtofullyprotecttheinterest
oftheBuyer.
Whenamortgageeclauseisnotapplicable,acertificate
ofinsurancemustbeobtainedbytheServicer.This
certificatemustcontaintheinformationrequiredfor
certificatesthatissetforthinSection203.01A.The
certificatemustnametheServicerasthecertificate
holderinsteadofthemortgagee.
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Section204.ProtectingtheProperty
ItistheServicersresponsibilitytoactinthemost
timely,efficientandresponsiblemannertosafeguardthe
BuyersinterestinloansbeingservicedfortheBuyer.In
additiontopromptlypayingpropertytaxestoavoid
possibletaxliensandmaintainingadequateinsuranceto
coverdamagefromhazardlosses,theServicermust:
Makeperiodicpropertyinspectionstoforestall
unduedeteriorationwhichmightresultfromneglect
orvandalism,
PromptlynotifytheBuyerandundertake
appropriateactiontooffsettheeffectsofa
borrowersbankruptcy,insolvencyordeath,
condemnationsorotherlegalaction,and
Followanyotherproceduresrequiredtoprotectthe
BuyersrightsandtherightsoftheBuyers
assigneesinthemortgageobligationandthe
mortgagedproperty.
204.01InspectionofProperties
TheServicermustensuremortgagedpropertiesare
occupiedandarebeingproperlymaintained.Under
certaincircumstancesthiswillrequireinspectionofthe
property.TheServicermustcertify,attheendofeach
yearthatanyrequiredinspectionswerecompletedin
accordancewiththeguidelinescontainedherein,andthe
ServicermustfurnishanOfficersCertificatetothat
effecttotheBuyer.SaidOfficersCertificateistobe
receivedbytheBuyerwithin10businessdaysoftheend
ofeachcalendaryear.Propertyinspectionschedulesand
relatedproceduresarediscussedbelow.
Whenpossible,theServicersinspectionshouldinclude
theinterioroftheproperty.Allinspections,regardless
ofpurpose,mustbedocumentedinapropertyinspection
reportorequivalent,andbemadepartoftheindividual
loanfilebutneednotbeforwardedtotheBuyer,except
asdescribedbelow.Thecostsofpropertyinspections
arenotreimbursablebytheBuyer.
A.CurrentLoans
Propertysecuringacurrentloanshouldbeinspected
immediatelywhentheServicerlearnsthepropertymay
bevacantand/orbelievesitisnecessarytopreservethe
valueofthesecurityortheBuyersinterestinaproperty
maybejeopardizedduetonegligenceordefaultonthe
partofaborrowerinanyofthetermsoftheloanother
thandelinquency.
Whenaninspectionindicatesrepairsareunnecessary,
minor,orwillnotcausedeterioration,actionneednot
betaken.However,iftheinspectionindicates
deteriorationisoccurring,orrepairsofanurgentnature
arerequiredtoproperlyrestorethepropertytoa
habitableconditionortocorrectaconditionwhich
mightlowerthevalueoftheproperty,theborrowermust
beremindedoftheobligationtomakesuchrepairs.In
addition,whenacodeviolationnoticeisreceived,the
Servicershouldimmediatelycontacttheborrowerand
makearrangementsforrepairsnecessarytofulfillthe
coderequirements.Ineithercase,theServicershould
documenttheloanfilesregardinganycontactswiththe
borrowerandanyarrangementsmade.
TheServicermustfollowupuntiltherepairsare
completedortheborrowersrefusalorinabilitytomake
therepairsisestablished.Inthelattercase,theServicer
shouldsendtheBuyerapropertyinspectionreportwith
picturesandarecommendation.Ifemergencyrepairs
arerequired,theServicermustmaketherepairs,subject
tothelimitationswhichappearinSection204.02.
B.VacantorAbandonedProperties
Wheneveramortgagedpropertyisfoundtobevacantor
abandoned,theServicermust:
1.Attempttolocatetheborroweranddeterminethe
reasonsfortheabandonmentorvacancy.
2.Arrangefortheprotectionofthepropertyfrom
vandalismordamagebytheelements,including
winterizingwherenecessary.
3.Filetheappropriatenoticewiththemortgage
insurer,ifany,assoonastheServicerhas
established,byathoroughinvestigation,thatthe
propertyhasbeenabandonedbytheborrower.Full
detailsoftheServicersinvestigationand
conclusionsmustbereportedimmediatelyona
propertyinspectionreportwitharecommendation.
Oneoptionavailablefordelinquentloanswhenthe
propertyhasbeenabandonedmaybecommencing
foreclosure.RefertoSection206forafull
discussiononforeclosuremethods.
4.Notifythehazardinsurancecarriertoensurethe
properendorsementismadesothatcoverageis
maintained.
C.DelinquentLoans
RefertoSection205.01Cforadiscussionofproperty
inspectionrequirementsondelinquentloans.
204.02Advances
for
Emergency
Repairs
Ifaninspectionofthepropertyindicatesemergency
repairsarerequired,theServicerisauthorizedtospend
upto$2,500foreachproperty.Sumsinexcessof
$2,500foranypropertyrequiretheBuyersprior
approval.
2041
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Whenrequestingreimbursementforadvances,the
Servicermustsubmitapropertyinspectionreportwith
photosandaStatementofExpensesForm(WMMSC
3001).Allinvoicesandstatementsmustaccompanythe
StatementofExpenses.TheServicermustverifythe
mortgageinsurerapprovedalladvanceexpenditures
beforetheywereincurredwheneversuchpriorapproval
isrequired.
204.03NoticeofLiensandOther
Actions
TheServicermustalwaysdiligentlyacttopreventthe
attachmentofanylienssuperiortothelienofthe
mortgageandmustpromptlynotifytheBuyerwhenever
itreceivesnoticeorotherwisebecomesawarethatany
suchlienisclaimed.Inaddition,theServicermustalso
notifythebuyerincasesofbankruptcy,condemnation,
death,probateproceedings,taxsales,partitions,local
ordinanceviolations,landmarkdesignationproceedings,
orothereventsaffectinganyborrowersormortgaged
properties.
204.04PartialReleasesofProperty
PriorapprovalbytheBuyerisrequiredforanypartial
releaseofpropertysecuringaloanservicedhereunder.
A.RequestforPartialRelease
Therequestforpartialreleaseshouldcontainthe
following:
Mortgagorsnameandaddress
WMMSCloannumber
Servicerloannumber
Typeofrelease
Reasonforrelease
Anynecessarylegaldocuments
Legaldescription
Platmapoutliningthesectiontobereleased
Recentappraisalindicatingthevalueoftheproperty
beforeandaftertherelease
Certifiedcopyofescrowinstructions
Recommendation
LoanAnalysisForm
Writtenevidenceofthemortgageinsurersapproval,
ifapplicable
Whenapartialreleaseisrequestedbytheborrower,the
Servicermustalsosubmitanacceptableresidential
appraisalreportindicatingthevalueoftheproperty
beforeandaftertherelease,acertifiedcopyofthe
escrowinstructions,arecommendation,andananalysis
oftheloan.TheServicermustalsocomplywiththe
provisionsoftheloan.
TheServicermustensurethattheremainingproperty
adequatelycoverstheunpaidprincipalbalanceand
accruedinterestofthemortgagedloan.TheServicer
mustprepareallrequireddocumentationanddeliver
executeddocumentstoallconcernedparties.The
Servicerisalsoresponsibleforrecordinganynecessary
releasedocumentsinordertopreservethepriorityofthe
lien.
Ifapartialreleaseinvolvingover$500isrequestedby
theborrower,theServicermustalsosubmitan
acceptableresidentialappraisalreportindicatingthe
valueofthepropertybeforeandaftertherelease,a
certifiedcopyoftheescrowinstructionsanda
recommendation.TheServicermustcomplywiththe
provisionsoftheloan.
B.UseofProceeds
TheBuyerrequiresthecashconsiderationpaidtobeat
leastequaltothereductioninthevalueofthemortgaged
property.TheServicermustapplyanyproceedstothe
principalinaccordancewiththetermsoftheloanandthe
requirementsofthemortgageinsurer,ifapplicable.This
appliestobothvoluntaryandinvoluntary
(condemnation,easements,eminentdomain,etc.)
releases.
TheBuyermaypermittheServicertoreimbursethe
borrowerforthecostofobtainingthereleasefromany
proceedsandtopaytheborrowerforanyamountby
whichtheproceedsexceedthereductioninthevalueof
themortgagedproperty.
TheBuyermaypermitapartialreleasewithoutcash
considerationiftheremainingpropertywillbeenhanced
invaluebytherelease.
C.AdvicetoTaxAssessors
TheServicershouldnotifythetaxcollectororassessor
ofthereleaseofanyportionofapropertywhichwill
subsequentlyaffecttheamountoftaxestobelevied
againstaproperty.Ifrequiredbylocallaworpractice,
theServicermustobtaintheconsentofanyjuniorlien
holderandconfirmationbythetitleinsurerthatnoloss
inthepriorityofthelienisincurred.
204.05AssignmentsandRecordations
ofMortgages
TheServicermustcompleteatitsownexpenseall
assignments,recordations,orrelatedactionsnecessaryto
protecttheBuyerslienpriority,toconformtolocal
practiceandstatelaw,ortofulfillarequestfromthe
Buyer.TheServicershouldinformtheBuyerofany
materialchangestotheserequirementsastheyoccur.
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204.06PropertyAddressChange
TheServicersrecordsshouldindicateanychangein
propertyidentification,suchasstreetsrenamedor
renumbered,andtheServicershouldobtainany
necessaryinsuranceendorsements.
204.07Assumptions,DueonSale
Thesecurityinstrumentmustcontainadueonsale
clause.However,anassumptionmaybeallowedforthe
mortgageifachangeinownershipoccursandstateor
federallawprohibitsenforcementofthedueonsale
clauseortheloanisanadjustableratemortgage(ARM)
andthetransfereemeetsoccupancyandcurrentBuyer
creditguidelines.Ifthereisareleaseofliability,the
Servicermustalsosendthecompletecreditpackageto
theBuyer,includingthemortgageinsurersapproval
beforeclosingthetransaction.Inallcircumstances,the
Servicermaynotwaive,modifyorvarythematurity
date,loaninterestrateorothertermsofaNote/Mortgage
onanyloansoldtotheBuyerwithouttheBuyers
approval.
TheServicerisresponsiblefordeterminingthe
assumabilityofanyloansubmittedtotheBuyerunder
theindividualmortgageprogram,enforcinganydueon
saleclauses,anddeterminingthecreditworthinessofthe
assumptor/transferee.
Incertainsituations,theServicermaynotacceleratethe
maturityofthedebtupontransferofthepropertywhen
thepropertyisoccupiedbythemortgagor.Those
situationsinclude:
1.Thecreationofalienorotherencumbrance
subordinatetothesecurityinstrument,whichdoes
notrelatetoatransferofrightsofoccupancyinthe
property,providedthatsuchlienorencumbranceis
notcreatedpursuanttoacontractfordeed.
2.Thecreationofapurchasemoneysecurityinterest
forhouseholdappliances.
3.Atransferbydevise,decentoroperationoflaw
uponthedeathofajointtenantortenantbythe
entirety.
4.Thegrantingofaleaseholdinterestontheproperty
withatermofthree(3)yearsorlesswithoutan
optiontopurchase.
5.Atransferinwhichthetransfereeoccupies,orwill
occupythepropertyandthatisoneofthefollowing:
Atransfertoarelative,resultingfromthe
mortgagorsdeath;
atransferwhereinaspouseorachildbecomes
anowneroftheproperty;
atransferresultingfromadecreeofdissolution
ofamarriage,alegalseparationagreement,or
fromanincidentalpropertysettlementbywhich
thespousebecomesanowneroftheproperty.
6.Atransferintoanintervivostrustinwhichthe
mortgagoris,andremains,thebeneficiaryand
occupantofthepropertyunless,asacondition
precedenttothetransfer,themortgagorrefusesto
providetheServicerwithreasonablemeans
acceptabletotheServicerbywhichtheServicerwill
beassuredoftimelynoticeofanysubsequent
transferofthebeneficialinterestorchangein
occupancy.
TheServicermustevaluatethetransfereescreditand
financialcapacityaccordingtothecurrentunderwriting
guidelinessetforthinthisServicerGuide.Oncethe
Servicerhasapprovedthetransferee,theServicermust
obtainapprovalfromthemortgageinsurerbefore
completingthetransfer.ItistheServicers
responsibilitytoensureallrequiredendorsementsofthe
insurancepoliciesareproperlyexecutedsothatcoverage
remainsineffect.TheServicermustalsoprepareall
requireddocumentationanddeliverexecuteddocuments
toallconcernedparties.TheServicerisalsoresponsible
forrecordinganyassumption/releaseagreements
requiredinordertopreservethepriorityofthelienand
providingallnoticesanddisclosuresrequiredbylawor
regulation.
TheBuyerwillnotpermitachangeinthematuritydate,
interestrate,monthlypayment,orifapplicable,margin
specifiedinthenoteupontransferofaproperty.
AnyfeetheServicerchargesinconnectionwithan
assumptionmaynotexceedthelesserofitscustomary
assumptionfeeortheamountallowedunderany
applicablelaworregulation.TheServicermayretain
theentirefee.
A.FixedRateMortgages
Anyconventionalfixedratemortgagesownedinwhole
orinpartbytheBuyermustbeaccelerateduponthe
transfer,orprospectivetransfer,oftitletotheunderlying
propertyifthesecurityinstrumenthasanenforceable
dueonsaleclause,exceptfortransferslistedinitems1
through6ofSection204.07.Whenthissituationoccurs,
theServicermustsubmitaForeclosure
Recommendation/Individual
Delinquency
Report
(WMMSC3003)statingthesituationandtheServicers
recommendationofacceleration.Uponreceivingthe
Buyersapprovalofsuchacceleration,theServicermust
immediatelycommenceforeclosureaction.
Ifasecurityinstrumentdoesnothaveadueonsale
clause,orasecuritypropertyislocatedinawindow
periodstateandtheoriginatingServicerissubjectto
windowperiodrestrictions,theBuyerwillallowa
mortgagetobeassumedattheoriginalnoteratebya
creditworthytransferee.
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B.AdjustableRateMortgages
AnyARMownedinwholeorinpartbytheBuyermay
beassumedsubjecttothefollowingconditions:
1.Theloanhasnotbeenconvertedtoalevelpayment,
fixedratemortgage,
2.Theoriginalloantermsandconditionssurvivethe
assumptiontransaction,
3.TheServicerrepresentsandwarrantsthe
assumptor/transfereemeetsallofthecredit
guidelinesusedatthetimetheoriginalloanwassold
totheBuyer,and,
4.TheServicerhasobtainedtheBuyerspriorwritten
approvaloftheassumptionwhensorequiredbythe
Buyerforaspecificloanorgroupofloans.This
conditionmayariseifasubsequentinvestorhas
additionalrequirementsnotspecifiedintheBuyer
ARMprogram.TheBuyerwillnotifytheServicer
inwritingofanysuchadditionalrequirements.
Whetherornotthereistobeareleaseofliability,the
Servicermustsendthecompletecreditpackageandmust
receivetheBuyersapprovalbeforeclosing.The
packageshouldbereviewedandapprovedbythe
Servicerandtheinsuringagentbeforeitissubmittedto
theBuyer.TheBuyerwillreviewtheassumption
packageandnotifytheServicerwiththeBuyers
approval/denialwithinfivebusinessdaysofreceiptof
thepackage.
C.FHA/VAMortgages
AnyFHAorVAmortgageownedinwholeorinpartby
theBuyermaybeassumedprovidedtheFederalHousing
AdministrationorVeteransAdministrationapprovesof
suchtransferandtheappropriateguarantyorinsuranceis
maintained.
TheServicermustcomplywiththeappropriateagencys
applicationandnotificationrequirementsandmay
chargefeesfortheassumptionasindicatedbythat
agencysregulations.TheServicermayretaintheentire
fee,unlessotherwiseindicatedbygovernment
regulations.TheServicermaynot,however,changethe
interestrate,exceptasrequiredintheoriginalmortgage
noteofanARM.
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Section205.Delinquencies
205.01ServicingDelinquencies
TheServicerspersonnelmustbesufficientlyskilledin
financialcounselingandloanservicingtechniquesto
assistborrowersinbringingtheirloanscurrentand
protectingtheirequityandcreditratingwhileprotecting
theinterestsoftheBuyer.Thepurposeofallcollection
effortsistobringtheaccountcurrentintheshortest
periodoftime.Discussionswiththeborrowershould
includeadeterminationofthecauseofthedelinquency
andanattempttoobtainadefinitecommitmentfromthe
borrowertobringtheaccountcurrent.Iftheaccount
cannotbebroughtcurrentimmediatelyandthe
borrowerscircumstancesandpastrecordjustifyit,the
Servicershouldattempttocurethedelinquencyas
quicklyaspossiblebyemployingthereliefprovisions
discussedinSection205.02.TheBuyerrequiresthatthe
Serviceradheretoindustrystandardsasidentifiedby
FannieMaeDelinquencyServicerGuidelines.Tothe
extentanissuerelativetodelinquency,foreclosure,
bankruptcy,lossmitigationorREOservicingisnot
specificallyaddressedwithinthisServicerGuide,the
mattershouldbeaddressedaccordingtothedirective(s)
associatedwiththeapplicableFannieMaeguidelines.
TheServicershouldtreateachdelinquencyindividually.
ThecollectioneffortshouldbebasedontheServicers
knowledgeoftheborrowerscredithistory,employment
situation,individualcircumstances,propertyandthe
extentofthedelinquency.TheServicerisexpectedto
usenotices,letters,telegrams,telephonecalls,faceto
facecontact,andotherresponsiblecollectiontechniques
employedbyprudentloanservicers.TheServiceris
encouragedtovaryitscollectiontechniquestofitthe
individualcircumstancesandtoavoidestablishinga
fixedroutinewhichmaybeineffectivefordealingwith
borrowerswhoarerepeatedlydelinquent.TheServicer
shouldrecognizethatefficientservicingofadelinquent
mortgageprimarilydependsonpersonalcontact,bothon
thetelephoneandfacetoface,withtheborrower.Form
lettersandnotices,whilehavingaplaceinanyservicing
program,generallyarenotaseffectiveaspersonal
contactandshouldnotbeusedexclusively.
Thefollowingisanexampleofanadequateservicing
programduringthefirst45daysofdelinquency:
1.Identificationofadelinquentloanshouldbemade
bythe15thdayofdelinquency.
2.Alatenoticeshouldbemailedbetweenthe16thand
18thdayofdelinquency.
3.Attemptstocontacttheborrowerbytelephone
shouldcommencebythe20thdayofdelinquency.
4.Ifsatisfactoryarrangementstobringtheaccount
currenthavenotbeenmadebyapproximatelythe
45thdayofdelinquency,afacetofaceinterview
withtheborrowershouldbeconducted.
5.Ifsatisfactoryresponseisnotobtained,theServicer
shouldcontinuetofollowupwithnotices,letters,
telephonecontacts,facetofaceinterviews,etc.,
untiltheloanhasbeenbroughtcurrentorthe
Servicerdeterminesthatanotificationofforeclosure
action,shortsale,deedinlieuofforeclosure,or
otherlossmitigationactionisdeemedappropriateto
resolvethedelinquency.TheServicermustensure
thatattorneyreferraltoinitiateforeclosureactionbe
madenolaterthanthe120thdayofdelinquency,or
soonerifrequiredbythemortgageinsurer.All
appropriatedefaultandbreachlettersmustbesent
priortosubmittingtherecommendation.
TheServicermustmaintaindelinquencyratesonthe
Buyerloansatalevelbeloworcomparablewiththe
industrynormforloansofthesametypeinthesame
geographicarea.ExcessiveDelinquencyNotification
LettersareissuedtoServicerswhoseoveralldelinquency
performancefailstocomparesatisfactorilywiththe
industrynorm.Servicersarerequiredtoreviewand
respondwithacompleteexplanationfortheexcessive
delinquencyratio,andprovideanoutlineofthebusiness
strategytheyhaveadoptedtoachieveanacceptable
percentage.Saidresponsemustbereceivedwithin10
businessdaysofthedateoftheletter.
Thefollowingsectionspresentdetailedservicing
requirementsfordealingwithdelinquenciesonloansin
whichtheBuyerhasaninterest.TheServiceris
encouragedtoemployitsowncollectionproceduresto
bestmeettheseservicingrequirements.These
proceduresmustbeadequateandefficientfordealing
promptlywithdelinquencies.
A.NewBorrowers
Particularattentionshouldbepaidtodelinquencyonthe
partofanewborrower.Duringthefirstfewmonthsof
payment,theaccountshouldbemonitoredtoassurethe
developmentofgoodpayinghabits.Thereasonsfor
delinquencybyanewborrowervaryandmayinclude
theborrowersmisunderstandingofpayment
requirements.TheServicershouldmakepersonal
contactwithanewborrowerbythetenthdayof
delinquencytodeterminethecauseofthedelinquency
andtoemphasizetheimportanceofpaymentonor
beforetheduedate.
B.MonthlyServicerDelinquency,
Foreclosure,BankruptcyandREO
Reporting
Foreachloanwhichis90ormoredaysdelinquentthat
hasnotbeenliquidated,theServicermustfully
documentandsubmitallcollectionactivities,reasonsfor
nonpayment,actionsbeingtakentocurethedefault,
propertyinspectionresults,andallbankruptcy,loss
mitigation,foreclosureandREOactivityinanelectronic
2051
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reportformat.Thedatacontainedwithinthereport
shouldbeinclusiveof,butnotlimitedto,thefollowing
information:reasonfordelinquency,repaymentplan
information,dateofattorneyreferral,lossmitigation
typeandstatus,dateofthefirstlegalaction,dateof
judgmententered,dateofpublication,estimateddateof
foreclosuresale,actualdateofforeclosuresale,
confirmedsaledate,occupancystatus,dateofmost
recentpropertyinspection,conditionofproperty,
evictionstatus,bankruptcychapterandstatus,updated
appraisedvalue,dateofupdatedappraisedvalue,brokers
priceopinionvalue,dateofbrokerspriceopinion,list
priceamount,listpricedate,listpriceexpirationdate,
andrequiredrepairs,offerdate,offeramount,estimated
dateofclosing,actualdateofclosing,andestimatedloss.
Whenaborrowerischronicallydelinquentandthe
Servicerhasexhaustedallreasonablemeansofinducing
theborrowertopayontimeandalllossmitigation
effortshavefailed,theServicermustnotifytheBuyerof
thecommencementofforeclosureaction.The
notificationofsaidactionmustbesubmittedtothe
Buyerinelectronicformatandincludetheforeclosure
referraldate,reasonfordefault,occupancystatus,
conditionofproperty,dateoflastpropertyinspection
andmostcurrentbrokerspriceopinionifavailable..
RefertoSection206forafulldiscussionofforeclosure
methods.
C.ServicerPenaltyAssessments
Intheeventoftheassessmentofdefaultservicingrelated
penaltiestotheServicerasidentifiedinthisSection205,
orinanyofSections206,207,and305theBuyershall
issuecorrespondencetosaidServicerdetailingthe
reasonforthepenaltyanddollaramountassessed.Ifthe
Servicerelectstoappealalloraportionofthepenalty
assessed,theServicermustsubmitawrittenresponseto
theBuyertobereceivedwithinsevenbusinessdaysof
thedateoftheBuyerscorrespondencedetailingthe
reasonfortheappeal,theamountbeingappealed,and
thefactssupportingtheServicersposition.Inaddition,
theServicermustsubmitallapplicablematerialevidence
such
as
system
documentation,
related
documents/correspondenceandotherinformationas
requiredfortheBuyersreviewanddetermination.The
Buyershallissueafinaldeterminationinresponsetothe
Servicerwithin10businessdaysfromthedateofreceipt
oftheServicersletterofappeal.Saidreportmustbe
receivedbytheBuyernolaterthanthe5thbusinessday
ofeachmonthandmustrepresentthestatusofeachloan
asofthepreviousmonthscloseofbusiness.After
receiptofthemonthlyreportfromtheServicer,the
BuyerwillcontacttheServicerviaemailwithany
missingdelinquencyinformation.Forloansina
delinquency,foreclosure,bankruptcyandREOstatus,
theserequestsrequirereviewandresponsebythe
Servicer.TheServicersdetailedresponsetoeachloanin
questionmustbereceivedwithin2businessdays.
Failuretocomplywiththespecifiedtimeframes
identifiedforeitheroftheserequiredsubmissionswill
subjecttheServicertoapenaltyassessmentasprovided
forinSection305.
D.PropertyInspections
TheBuyermustbenotifiedofthepropertyinspection
andconditionviatheMonthlyDelinquencyReportfor
allloans90ormoredaysdelinquent.Fromthenon,the
Servicermustsendmonthlyupdatesviareporton
PropertyInspectionnecessarytoprotecttheBuyers
interestoruponBuyersrequest.Forapropertylocated
inanareawithahighincidenceofvandalismand
neglect,theServicershouldconductsubsequent
inspectionsatleastonceevery30daysuntilthe
delinquencyiscuredortheloanliquidated.
Attheinitialinspection,theServicershouldattempta
facetofaceinterviewwiththeborrowertoestablish:
Thereasonfordelinquency
Whetherthereasonistemporaryorpermanentin
nature
Theattitudeoftheborrowertowardthedebt
Thelengthoftimenecessarytocurethedefault
Ifaborrowerhasbeengrantedreliefprovisionsfor
curingadelinquency,propertyinspectionsshouldbe
madeonafrequentandcontinuingbasisduringthe
periodofrelief.Ifaninspectionrevealsrepairsare
necessary,theServicershouldadvancetherequired
fundsaccordingtoguidelinesinSection204.02.The
borrowersreliefplanmaybemodifiedtospreadthe
repaymentoftheadvanceovertheperiodcoveredbythe
plan,iftheborrowerisfinanciallyabletoassurethe
additionalmonthlyobligationimmediately,ortocallfor
therepaymentoftheadvanceattheendoftherelief
period.
E.Abandonment
TheServicershouldattempttolocatetheborrowerand
ascertainthereasonsforabandonment.TheServicer
musttakeallactionsnecessarytoprotecttheproperty
fromwaste,damage,andvandalism.TheServicermust
reportthefullresultsoftheinvestigationimmediately
andmakearecommendationregardingtheactionwhich
shouldbetaken.TheServicermustalsonotifythe
hazardinsurancecarrierofthevacancysotheproper
policyamendmentmaybemadetoensurecoverage.The
ServicershallprovidenotificationtotheBuyervia
monthlyreport.
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F.MortgageInsuranceRequirements
TheServicershouldbefamiliarwithandsatisfyall
applicablerequirementsofthemortgageinsurer.The
Servicerisexpectedtohaveadequatecontrolstoassure
timelyfilingofallnoticestothemortgageinsurer.
Copiesofroutinenoticessenttothemortgageinsurer
ortheborrowerneednotbesenttotheBuyerunless
specificallyrequested.CopiesoftheNoticeof
DelinquencymustbesenttotheBuyerwiththe
ForeclosureRecommendation/IndividualDelinquency
Report.
Iftheprimarymortgageinsurancepolicywasissuedby
PMIMortgageInsuranceCo.,theServicermustinform
PMIwhentheloanfirstbecomesdelinquentthatthe
policycoversaloanpurchasedbytheBuyer.
IfanyoftheServicersactionscauseinvalidationofa
claim,theServicerwillberesponsiblefortheloss,
includinganyprimaryandpoolinsuranceclaimswhich
maybedenied.Inthealternative,theServicermaybe
requiredtorepurchasetheloan.Ifaloaniscoveredbya
poolinsurancepolicy,theBuyerwillberesponsiblefor
thefilingofanyclaim.
G.UseofTemporaryBuydownFunds
Anyfundsremaininginthebuydownaccountofaloan
inforeclosuremustbedisposedofaccordingtotheterms
ofthebuydownagreement.Thefundsmaynotbeused
toreinstatetheloanorcureanydefaultoftheborrower
onwhichtheforeclosureproceedingsarebased.
205.02BorrowerReliefOptions
TheBuyergrantsServicersdiscretiontoextend
appropriaterelieftoborrowerswhoencounterhardship,
butarecooperativeandhaveproperregardfortheir
obligations.TheServicermustbereadilyavailableto
theborrowertoofferskilledfinancialcounselingand
advice.TheServicershouldmakepersonalcontactwith
adelinquentborrowerasoftenasnecessarytoachievea
solutionwhichwillbringtheloancurrentasquicklyas
possible.TheServicermustbefamiliarwithallthe
formsofreliefdiscussedinthissectionandwillemploy
suchreliefwheneverappropriate,ratherthan
recommendingterminationoftheloan.However,no
suchreliefshouldbegrantedtoanyborrowerunless
thereisareasonableexpectationthatthereliefgranted
willresultinbringingtheloancurrentandmaintainingit
inacurrentstatus.
Beforegrantingrelief,theServicershouldinspectthe
propertyandascertainthereasonforthedefaultandthat
theattitudeandcircumstancesoftheborrowerjustifythe
reliefactioncontemplated.TheServicerisresponsible
forsatisfyingallapplicablemortgageinsurance
requirementsandobtainingallnecessaryapprovalswith
respecttothereliefgranted.TheServicerisresponsible
forcollectinganyrecordingorsimilarcostsincidentalto
thegrantingofrelieffromtheborrower.Whenreliefis
appropriate,theServicershoulddeterminewhetherthe
reliefshouldbeoneofthefollowing:
Aliquidatingplangivingtheborroweradefinite
periodinwhichtoreinstatetheloanbyimmediately
commencingpaymentsinexcessoftheregular
monthlyinstallment.
Aspecialforbearancereliefagreementreducingor
suspendingtheregularmonthlyinstallmentsfora
specifiedperiodoftime.
Amilitaryindulgence.
A.LiquidatingPlan
Ifappropriate,theServicerisauthorizedtoenterintoa
liquidatingplantorepaythetotaldelinquencywithinthe
shortesttimepossible.Therepaymentperiodmustnot
exceed12monthsfromthedateofexecutionoftheplan
withouttheBuyersapproval.IftheServicerwishesto
enterintoaliquidatingplaninwhichtherepayment
periodexceeds12months,theBuyermustapprovethe
planinadvanceandtheplanmustbesetforthinwriting
(withspecificamountsanddates,includingtheyearfor
therepaymentplan)andmustbesignedbytheServicer
andtheborrower.TheServicermustreportthetermsof
anyliquidatingplan(withspecificamountsanddates,
includingtheyearfortherepaymentplan)totheBuyer
andsendtheBuyerasignedcopy.
B.SpecialForbearanceReliefAgreement
Aspecialforbearancereliefagreementisawritten
agreementtoreduceorsuspendregularmortgage
paymentsforaforbearanceperiodofupto12months.
Theseagreementsarerareandusuallyreservedfor
situationsbeyondtheborrowerscontrol,suchas,an
uninsuredmedicalproblem.Attheconclusionofthis
specialforbearancereliefperiod,regularmortgage
paymentsmustberesumedandsatisfactory
arrangementsmadetorepaytheamountsuspended.
TheBuyermustapproveanyspecialforbearancerelief
agreementinadvance.TheServicermustalsoobtain
anynecessaryapprovalfromthemortgageinsurerbefore
executingsuchanagreement.Afterapprovalofthe
terms,theServicermustpreparetheagreement;haveit
executedbyallpartiesandforwardcopiesofthe
completedagreementtoallconcerned.
Iftheborrowerfailstosatisfythetermsofthespecial
forbearancereliefagreement,theServicermust
immediatelyrecommendoneofthefollowingtothe
Buyer:
Anewforbearanceagreement,providedthe
aggregateforbearanceperioddoesnotexceed12
months,or
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Foreclosureor,preferably,acceptanceofadeedin
lieuofforeclosure.
ApprovalofaspecialforbearanceplanbytheBuyer
doesnotrelievetheServicerfromcontinuingtoremit
scheduledprincipalandinterestpayments.
C.MilitaryIndulgence
Forpurposeofthissection,aBorrowerclaiming
entitlementtomilitaryreliefisreferredtoasa
servicemember.Aservicememberservingonactive
militaryservice,oraReservistorNationalGuardsman
calledtoactivemilitaryservicemaybeentitledto
benefitsundertheServicemembersCivilReliefActof
1940,asamended(theAct),and/orvariousStaterelief
statuteswhichmayentitletheservicemembertocertain
benefits.TheServicermustbefamiliarwithall
requirementsoftheActandanyStatestatuesandensure
theycomplywithallrequirements.TheActcoversthe
followingservicemembers:
1.CareermembersoftheUnitedStatesNavy,Marine
Corps,Army,AirForce,orCoastGuard.
2.Membersofareservecomponentofthearmed
servicesvolunteeringfororcalledtoactiveservice.
3.MembersoftheNationalGuardvolunteeringforor
calledtoactiveservice.
CompulsoryorAnnualTrainingthatReservistsare
requiredtoundergoperiodicallytomaintainmembership
inthereservecomponentsofthearmedservicesorthe
NationalGuardisnotconsideredactiveservicefor
militaryreliefpurposes:
1.InterestRateCap:TheActcapsinterestatsix(6%)
percentperyearonaservicemembersMortgage
obligations.Escrowsforinsurance,propertytaxesand
otherassessmentsarenotaffectedandmustbepaidin
accordancewithcontractualterms.Thedifference
betweenthecontractualrateofinterestandsix(6%)
percentisforgiven,notdeferred.
2.EligibleMortgages:
a)TheMortgagemustbethecontractual
obligationoftheservicememberasBorrower
orcoBorrowerundertheNoteorasobligor
underawrittenagreementbywhichthe
servicememberassumestheBorrowers
liabilityundertheNoteandtheBorroweris
releasedfromsuchliability.
b)Theservicemembermusthaveexecutedthe
Noteortheassumptionagreementbeforethe
reportingdateoreffectivedateofthe
servicemembersactiveserviceasshownin
themilitaryorders.
3RequestSubmission:Theratecaprequestmaybe
madebytheservicememberorarepresentative,suchas:
Thespouseoftheservicemember
ThecoBorroweroftheservicemember
Anattorneyoftheservicemember
Anypersonauthorizedtoactonbehalfofthe
servicememberbypowerofattorneythatthe
Servicerhasdulyverified.Acopyofthepowerof
attorneymustbemaintainedintheMortgagefile.
Theservicememberorarepresentativemustsubmita
writtenrequestandcopiesofthemilitaryordersforthe
entiretimeperiodforwhichtheinterestratecapis
requested.Iftherequestorisotherthanthe
servicemember,therequestorsidentityandcontact
addressmustbeestablishedandmaintainedinthe
Mortgagefile.
TheServicerisauthorizedtograntallappropriaterelief
towhichaneligibleborrowerisentitledundertheAct
andanyapplicableStatereliefstatutes,butthetermsof
suchreliefandrelatedinformationshouldbepromptly
reportedtotheBuyerwithinthree(3)businessdaysof
receiptbytheServicer.Ifinterestratereductionis
required,theServicermustnotifytheBuyerthereofby
submittingtoBuyerawrittennoticedetailingthe
relevantfacts,togetherwith(a)thewrittenrequestfrom
theservicemembersortheservicemembers
representative,and(b)acopyoftheservicemembers
orderscallinghim/hertoactiveduty.TheServicerwill
berequiredtoremittotheBuyerattheoriginalinterest
rateandP&IandtheServicerwillbereimbursedthe
differenceoftheoriginalinterestrateandthereduced
interestrateonamonthlybasis.TheServicerwillapply
allP&Ipaymentsinaccordancewiththefollowing
calculationmethod,WMMSCwillonlyreimburse
Servicersifthefollowingcalculationmethodisused:
ExampleoftheActMonthlyInterestRate
DifferentialCredit
ThisexampleillustratesthecalculationofServicer
monthlyinterestratedifferentialcreditforaBorrowers
paymentthatwasreportedbyServicerinJanuary,2011.
ExampleLoanLevelDetail
UnpaidPrincipalBalance(UPB)ofa30yearMortgage
(asof01/2011cycle):
$50,000
OriginalRate:
10.375%
AdjustedInterestRateundertheAct:
6.000%
LoanStatus
Active
Monthlyremittance(draft)cycle:20thofthemonth
P&I
$452.70
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Calculation
1.Interestatoriginalrate=UPBXOriginalRate/12
=$50,000X10.375%/12=432.29
2.Principalappliedtoloan=P&IInterestatOriginal
Rate
=$452.70432.29=$20.41
3.InterestattheActRate=UPBXtheActRate/12
=$50,000X6%/12=$250
4.Amountduetoservicer(InterestSubsidy)Interest
atOriginalRateInterestattheActRate
=$432.29250=$182.29
ForthisExample,Servicerwouldreceiveawireinthe
amountof$182.29fromtheBuyer.
Iftheservicemembersactivemilitaryserviceexceeds
thetimeframeoutlinedintheoriginalordersprovidedby
theServicer,theServicershallrequestacopyofthenew
ordersandshallprovidethemtotheBuyer.
Reimbursementwillbemadeforonlythatportionof
timetheservicememberisrecalledtoactivedutyandis
supportedbytheservicemembersmilitaryorders.The
Servicershouldcontacttheborroweratleastsemi
annuallyduringtheperiodofactivemilitaryserviceto
determinetheborrowerscurrentstatusandthe
anticipateddurationofmilitaryservice.
D.Forbearance,RelieffromForeclosure
UndertheActorStatestatutes,servicememberswhoare
servingorhaveservedonactivedutymaybeentitledto
additionalandvariedformsofprotectionfromcreditors
enforcementofcontractualterms.
Suchprotectionisusuallybasedonhardshipcausedby
militaryserviceandmayremainineffectevenaftera
protectedservicememberisreleasedfromactiveduty.A
courtordermayberequiredtoactivatesuchprotection
ortodenyit.Thisprotectionmayinclude:
1.Deferraland/orrestructuringofpayments
2.Restrictionsonforeclosureaction
3.Extensionofredemptionperiodsfor
completedforeclosures
TheServicermustbefamiliarwithapplicablelawasit
relatestotheparticularcircumstancesofa
servicemember.
IfforeclosureisallowedtoproceedandMortgage
Insuranceclaimiseventuallyfiled,youmustnotifythe
mortgageinsurer(MI)thattheMortgagewassubjectto
militaryreliefsothat:
1.InterestfortheActcappedpaymentsdue
butunpaidbytheservicememberisclaimable
attheNoterate,notattheActcappedrate.
2.Claimableinterestwillnotbecurtailedby
the(MI)foradelaywhichwascausedsolely
bytheServicerscompliancewiththe
applicablemilitaryrelieflaw.
LateCharges:AlllatechargesresultingfromMortgage
paymentsdeferred,restructuredorratecappedunderthe
ActorapplicableStatelawmustbewaived.
CreditReporting:Allservicememberswhoare
receivingprotectionundertheActorapplicablestatelaw
mustbereportedaspayingasagreedtothecredit
repositories.
Documentation:Allcommunications,correspondence,
anddocumentationtoorfromservicemembersseeking
Mortgagereliefforhardshipcausedbyactiveservice
mustbemaintained.
TransfersofServicing:WhenaTransferofServicingto
aSpecialServicerincludesMortgageswhoseinterest
ratesarecappedundertheAct,theTransferormust
identifyeachsuchMortgagetotheTransfereebefore
transferringtheMortgagefilestotheTransferee.
205.03AdvancingResponsibility
TheServicerisobligatedtoadvanceitsownfundsfor
theloansservicedontheBuyersbehalf.Suchadvances
areintendedtoprovidearegularflowoffundsonthe
loansandtoprotectthevalueoftheloanandtheun
derlyingproperty.Ifanadvanceforprincipalandin
terestorforapprovedexpensescannotberecoveredfrom
relatedborrowerpayment,liquidationorinsurance
payments,theBuyerwillreimbursetheServicer,
ensuringthatsuchadvancesdonotbecomeexpensesto
theServicer.ItistheServicersresponsibilityto
continuetoadvanceitsownfundsuntiltheloanisfully
liquidatedbypaymentinfull,foreclosuresaletoathird
partyortheREOdispositionsale.
205.04ServicingBankruptAccounts
TheServicermusttreatallloansofbankruptborrowersit
servicesfortheBuyerinthesamemannerittreatsloans
thatitowns,unlessotherwiseindicatedinthissection.
TheServicermustalwayscomplywiththetermsand
conditionssetforthbythemortgageinsurer.The
Servicershouldactwiththeadviceoflegalcounselwith
athoroughknowledgeofbankruptcylaw.
TheServicermustcompleteandforwardaclaimoneach
bankruptcywithinthetimelimitationplacedbythe
bankruptcycourtandinthemannernormalforthe
districtinwhichthebankruptcyisfiled.
Iftheborrowerwishestoreconfirmthedebt,theServicer
mustproceedwiththisactionimmediatelyandmaydo
sowithouttheBuyerspriorapproval.TheServicer
mustobtaintheBuyersapprovalbeforerefusingto
reaffirmadebtforanyloanwhichtheBuyerownsin
wholeorinpart.
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Ifanyloaninvolvedinabankruptcybecomes
delinquent,theServicermustreportthedelinquencyand
bankruptcyinformationasprovidedinSection205.01B.
Thefollowinginformationshouldbeincludedinthe
report:casenumber,dateoffiling,confirmationhearing
date,1stmeetingofthecreditors,confirmationofthe
plan,preandpostpetitionduedates,motionforrelief
filed,consentorderenters,bktype,and
discharge/dismissaldate.Iftheloanisnotdelinquent
anddoesnotbecomedelinquentduringthetermofthe
bankruptcy,itisnotnecessarytonotifytheBuyerofthe
bankruptcyfilingunlesssomesituationoccurswhich
mightplacetheBuyersinterestinthepropertyin
jeopardy.
A.Chapter7andChapter11
IfaborrowerfilesforbankruptcyunderChapter7or
Chapter11oftheBankruptcyReformActof1978,Title
11oftheUnitedStatesCode,andtheloanbecomestwo
monthsdelinquent,theServicermustforward
correspondencetotheattorney,ortothebankruptcy
trusteeifthereisnoattorneyinvolvedinthecase,
demandingthattheloanbebroughttoacurrentstatus
andmaintainedcurrentonamonthlybasis.TheServicer
mustmakeadrivebyinspectionofthepropertytoverify
occupancyatthistimeandeverymonththereafteruntil
theloanisagaincurrent.Ifnoacceptableactionor
arrangementoccursinthe30daysfollowingthedemand
letterandtheloanbecomesthreemonthsdelinquent,the
Servicermustimmediatelyseekrelieffromthe
automaticstayandreportingmustoccurasprovidedin
Section205.01B.
OncethestayisliftedontheChapter7orChapter11
bankruptcy,theServicermustcomplywithallstateand
locallawsandregulations,andinsuringandguaranty
agencyregulationsbeforecommencingforeclosure.The
Servicermustimmediatelyforwardalettertothe
borrowersattorneyortothebankruptcytrustee,ifthere
isnoattorneyinvolvedinthecase,demandingthatthe
loanbebroughtcurrentimmediatelyandmaintained
current.Uponobtainingrelieffromtheautomaticstay
fromthebankruptcycourt,theServicermustinitiateor
continuewithforeclosureactionandpropertydisposition
asprovidedinSections206and207withinsixtydaysof
thefilingoftheordertoliftthestay.TheServicermust
continuetoreportthestatusoftheloanasprovidedin
Section205.01B.
IftheborrowerfilesunderChapter7orChapter11when
theloanisalready60ormoredaysdelinquentorin
foreclosurestatus,theServicermustceaseallcollection
orforeclosureactivityimmediately.Iftheloanis60
daysormoredelinquent,butnotinforeclosure,the
Servicermustimmediatelyforwardalettertothe
borrowersattorneyortothebankruptcytrusteeifthere
isnoattorneyinvolvedinthecase,requestingthatthe
loanbebroughtcurrentimmediately.Adriveby
inspectionofthepropertyshouldbeconducted
immediatelyandeverymonththereafter.
Ifnoacceptablearrangementoractionoccurswithin30
daysofthedemandletter,theServicermustimmediately
seekrelieffromtheautomaticstay.Iftheloanisin
foreclosureatthetimeoffilingofthebankruptcyaction,
theServicermustimmediatelyseekrelieffromthe
automaticstayandmustreportthestatusoftheloanas
providedinSection205.01B.Iftheloanisnotin
foreclosurestatusatthetimeofthefilingofthe
bankruptcyaction,theServicermustsubmitacompleted
ForeclosureRecommendation/IndividualDelinquency
Report(WMMSC3003)fornotificationpurposes.
B.Chapter13
IfaborrowerfilesbankruptcyunderChapter13,the
Servicermustreviewtherepaymentplanandmustreject
theplaniftheServicercansubstantiatethattheplanis
notreasonable.IftheServicerdeterminesthe
bankruptcyrepaymentplanisunreasonable,counsel
retainedbytheServicershouldfileanobjectiontothe
plan.Iftheplanisreasonable,theServicermustapprove
therepaymentplan.
Iftheloanbecomestwomonthsdelinquentoutsideof
theplanortheborrowerfailstomakepaymentsas
agreedwithintheplan,theServicermustforward
correspondencetotheborrowersattorney,ortothe
bankruptcytrusteerequestingtheloanbebroughtto
currentstatusundertheChapter13repaymentplanand
maintainedtherethroughoutthetermoftheplan.The
Servicermustmakeadrivebyinspectionoftheproperty
toverifyoccupancyatthistimeandeverymonth
thereafteruntiltheloanisbroughttoacurrentstatus
undertheplan.RefertoSection205.01forfurther
details.Ifnoacceptableactionorarrangementoccursin
the30daysfollowingthedemandletter,theServicer
mustimmediatelyseekrelieffromtheautomaticstay.
Eachmonth,theServicermustreportitsactionsonthe
MonthlyDelinquencyReportprovidedinSection205.01
B.
OncethestayisliftedontheChapter13bankruptcy,the
Servicermustcomplywithallstate,local,andinsuring
andguarantyagencyregulationsbeforecommencing
foreclosure.Uponobtainingrelieffromtheautomatic
staythroughtheapplicablecourtaction,theServicer
mustinitiateorcontinuewithforeclosureactionand
propertydispositionasprovidedinSection206and207
withinsixtydaysofthefilingoftheorder.Iftheloanis
inaforeclosurestatusatthetimeofthefilingofthe
bankruptcyaction,theServicermustcontinuetoreport
thestatusoftheloanasprovidedinSection205.01B.If
theloanisnotinaforeclosurestatusatthetimeoffiling
ofthebankruptcyaction,theServicershouldsendthe
requiredbreachletterstothemortgagorandrefertothe
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attorneyforForeclosureactiononcethedemandexpires.
ServicershouldnotifyBuyerwithreferraldate
information.RefertoSection205.01Bforfurtherdetails.
Iftheloanisinforeclosure,theServicermustreportthe
statusoftheloanasprovidedinSection205.01B.
C.CompliancewithLawsandRegulations
Inallcaseswhereabankruptcyisinvolved,theServicer
shallcomplywithallstate,local,andinsuringand
guarantyagencyregulations,aswellaswithalllawsset
forthundertheexistingbankruptcycodeandany
revisionsthereto.ShouldtheServicerhaveany
difficultyinadheringtotheseregulationsandlaws,as
wellastotheservicingrequirementssetforthabove,the
ServicermustcontacttheBuyer.
205.05AdjustableRateMortgage
Delinquencies
ItistheServicersresponsibilitytoenforceeachARM
accordingtoitsterms.Thisincludesmakingaccurate
changestotheinterestrate,themonthlypaymentamount
andcommunicatingthesechangestotheborrower
regardlessofdelinquencystatus.IftheServicerfailsto
makeeithertimelyoraccurateinterestrateorpayment
changes,theServicermustuseitsownfundstosatisfy
anyshortageuntilthenextscheduledchangedate.The
amountsadvancedmustreflectanychangesinthe
interestrateandmonthlypaymentamount.Anyoverage
mustbereturnedtotheborrower.
IfanARMisdelinquent,inforeclosureorinREOstatus
andisscheduledforaninterestratechangeorpayment
change,theServicermusttrackanychangeonits
accountingrecordsandreportthisinformationtothe
4013).TheServicermustnotifytheborrowerofany
paymentchangeaccordingtothetermsoftheNoteeven
whentheloanisdelinquentorinforeclosure,following
thesameproceduresasforacurrentloan.However,if
theloanisinREOstatus,nosuchnotificationis
required.
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Section206.Foreclosure
206.01ServicersNotifications
Notificationoftheforeclosurereferraldateshouldbe
submittedtotheBuyerelectronically.Thenotification
ofsaidactionmustbeinelectronicformatandinclude
theforeclosurereferraldate,reasonfordefault,
occupancystatus,conditionofproperty,dateoflast
propertyinspectionandmostcurrentbrokersprice
opinionifavailable.Ifcollectionandlossmitigation
effortshaveexhausted,theservicershouldensurethe
initiationofforeclosureactionoccurnolaterthanthe
120thdayofdelinquency.TheServicermustalso
submitallnoticespromptlytotheprimarymortgage
insurerasrequired.Acopyofthenoticeneednotbe
senttotheBuyerbutshouldbemadepartofthe
foreclosurerecords.Failuretoinitiateand/orcomplete
theforeclosureactioninaccordancewiththetimeframe
specifiedinSection205.01willresultinaperdiem
interestpenaltyassessmentatthenoterate.
Duringthetimethattheloanremainsinaforeclosure
status,theServicermustprovidemonthlyupdatesof
informationasprovidedinSection205.01B.
A.AssignmenttotheMortgageInsurer
AServicermaynotmakearrangementsforthe
assignmentofadelinquentloantothemortgageinsurer
withouttheBuyerspriorapproval.Ifanassignmentis
approved,theServicerwillcompletethetransactionand
filetheclaim.Iftheinsurerdeclinestheassignmentofa
delinquentloan,theServicermustrequesttheBuyers
approvalbeforetakinganyalternativeaction.
B.DeedInLieuofForeclosure
Adeedinlieuofforeclosureisusuallypreferredto
foreclosure.Iftheborroweriswillingtoexecutea
voluntarydeedinlieuofforeclosure,theServicershould
recommendacceptancebytheBuyeriftheServicer
determines:
SuchactionisintheBuyersbestinterest.
Fullbenefitsofanymortgageinsurancewillbe
received.
Marketabletitle,freefromanyliens,willbe
obtained.
Thepropertywillbevacantatthetimeof
conveyance.
Thefollowingdocumentationisrequiredwhen
requestingtheBuyersapprovaloftheacceptanceofa
deedinlieuofforeclosure:
1.Hardshipletter
2.LossAnalysissheetshowingbenefitofapproving
deedinlieuversusforeclosuresale
3.Brokerspriceopinion
4.Primarymortgageinsurersapproval,ifapplicable
UponreceiptoftheBuyerswrittenapproval,the
ServicerortheServicerscounselshouldprepareany
documentsnecessarytoprocessthedeedinlieuof
foreclosure,followingFannieMaeguidelinestoensure
reimbursementoftheattorneysfeesandcosts.The
Servicermustarrangeforconveyanceoftheproperty.
Theborrowermustagreetoassignandtransfertothe
Buyerallrentsdueandtobecomedue.Ingeneral,the
Servicershouldnottaketitletothemortgagedproperty
untilitisvacant.Ifhardshipexists,theServicermay
taketitleprovidedthedateofpossessionisagreedupon
inadvance.
TheServicermustemailthebuyeroncetheconveyance
documentshavebeensentforrecording.Titleshouldbe
conveyeddirectlyfromtheborrowertotheBuyers
assignee.
C.PreforeclosureSale
TheServicershouldpursueapreforeclosuresalewhena
borrowerisrequiredtosellhisorherhomeintimeof
financialhardship,andifitisforeseenthatitwillbe
difficulttosell,asthecurrentmarketvalueislessthan
theamountrequiredtosatisfytheloanandanysales
costs.
TheServicerisresponsibletoinformtheborrowerthat
theyarerequiredtomaintainthepropertyuntilitissold.
TheBuyermayrequiretheborrowertocontributefunds
ifthesaleproceedsdonotsatisfytheloan.Anyescrow
fundswillnotbereimbursedtothemortgagor.
Thefollowingdocumentationmustbesubmittedtothe
Buyerpriortoanypreforeclosuresale:
Copyofprimarymortgageinsurersapproval,if
applicable
Interiorbrokerspriceopinionorappraisal
LossAnalysissheetshowingbenefitofapproving
shortsaleofferversusREOsale.
EstimatedHUD1settlementstatement
Thefollowingdocumentationmustbesubmittedtothe
Buyerafterthepreforeclosuresale:
Copyofproceedscheckorwireconfirmation
CopyofHUDIsettlementstatement
Copyofprimaryclaim,ifapplicable
CopyofexplanationofbenefitsformonceMIhas
settled
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D.Modifications
Theloanmodificationprocessistoprovidestruggling
Borrowerswhohavedemonstratedawillingnessand
abilitytorepay,withanopportunitytochangethe
originaltermsoftheirloanbasedonademonstratedneed
toachieveanaffordableandsustainablepayment.
Affordabilitymaybeachievedthroughthecapitalization
ofthearrearage,interestratereduction,steprateoran
amortizationtermsextensionscreatingaballoonwhen
theloanreachesitsmaturitydate.
TheServicerneedstocompletetheWMMSC
ModificationRequest(WMMSC4020).Theformneeds
tobefilledoutinitsentiretyinorderforWMMSCto
provideadecision.Theformshouldbesubmittedto
wmmsc.default@chase.comforreview.Thebrokers
priceopinionmustbesubmittedwithin90daysofthe
datetherequestisbeingsubmitted.
Pleasebeadvisedthatnotallmodificationsareallowed.
Somepoolingandservicingagreements(PSAs)have
restrictionsandconditionslimitingwhatcanbedonefor
aloaninthedeal.Ifyouareunsureofwhatyoucan
offertotheborrower,youmayemail
wmmsc.default@chase.comtoseeifthereareany
restrictionstheloanmayhave.
WMMSCverifiestheproposedmodificationterms
requestedfromtheservicercomplieswiththeinvestor
guidelines.
206.02InstitutionofForeclosure
Accelerationofthematurityofaloanmustbe
accomplishedinaccordancewiththetermsofthe
mortgageinstrumentandapplicablelaw.TheBuyer
mustbeprovidedwithwrittennotificationofall
foreclosureactionsasprovidedinSection206.01.The
Servicershouldnotrecommendforeclosureuntilevery
reasonableefforthasbeenmadetocurethedelinquency,
asdiscussedabove.OncetheServicerdeterminesno
othercourseofactionwillcurethedefault,theServicer
shouldpromptlyreferthefiletotheattorneyto
commenceforeclosurewhichshouldbedonenolater
thanthe120thdayofthedelinquency.TheServicer
shouldactivelycontinuealleffortstocurethedefault
andmitigatelossestotheBuyeruntiltheServicercanno
longerlegallydosounderthetermsofthemortgage
instrumentsandfederal,stateorotherapplicable
governinglaworagencyrequirements.TheServicer
shouldprepareandforwardwiththeforeclosure
notificationanynecessarypapersfortheBuyers
executionand,whenappropriateshouldasktheBuyerto
returnthesecurityinstrument.Ifthesecurityinstrument
issenttotheServicer,theServicerwillholditonbehalf
of,andforthebenefitof,theBuyeranditssuccessors
andassigns,andmustensureitssafestorageandreturnit
totheBuyerpromptlywhenforeclosureisdiscontinued.
TheBuyersexecutionofanydocumentsubmittedbythe
ServicerdoesnotimplythattheBuyerhasreviewed
suchdocumentforlegalcompliance.TheServicer
maintainsthisresponsibility.
OnaFHA/VAreconveyance,theServicerisresponsible
forpreparingthenecessarydocumentsandforwarding
themtotheBuyerforexecution.Thisshouldtakeplace
nolaterthantwoweekspriortotheexpectedforeclosure
saledate.TheServicershallmonitortheforeclosure
processtoensurethatnounnecessarydelaysoccur.
TheServicerwillbeassessedaperdieminterestpenalty
atthenoterateforanylateforeclosurereferralandfor
anyunnecessaryorunsupporteddelaysintheforeclosure
process.
A.ForeclosureProcessing
TheServicershouldtakeappropriateactionduringthe
foreclosureprocesstoprotecttheproperty.TheServicer
mustobtaintheBuyersapprovalinadvanceforany
expendituretoprotectthepropertywhichexceeds
$2,500.Inanysituationwheredelayingprotection
actionmightresultinimpairmentoftheproperty,the
ServicershouldcalltheBuyerforapprovalofany
expenditureinexcessof$2,500.TheBuyerwillsend
theServiceraconfirmationofthecostandnatureofthe
protectiveactionapproved.
TheServicershouldretaintheborrowersescrowfunds
andallotherunappliedfunds.TheServicershould
obtainbillsfor,andpayallexpensesdueundertheloan,
includingtaxes,specialassessments,groundrents,and
otherchargeswhichareormaybecomefirstliensupon
thepropertyaswellashazardandmortgageinsurance
premiums.Iftheborrowersescrowfundsare
insufficienttopaytheseitemsastheybecomedueduring
theforeclosure,theServicermustadvancefundsforthe
paymentofsuchexpensestoprotecttheBuyersinterest.
Reimbursementforallapprovedexpensesmaybe
requestedontheStatementofExpenses(WMMSC
3001)atthetimeoffinalpropertydisposition.
TheServicermustinspectthepropertyatleastonce
amonthandmorefrequentlywhencircumstances
warrant.
Notificationsofsaleresultsarerequiredwithin24hours
afterthesale.
B.Attorneys/TrusteesFees
ServicershouldadheretoFNMAguidelinesfor
foreclosurefeesandcostsallowed.Anyexceptions
requiretheBuyersapproval
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Allfeesdiscussedinthissectionaretobepaidbythe
ServicerandwillbereimbursedbytheBuyerafterthe
finalsettlementofthesaleofthepropertyandall
insuranceclaimproceedshavebeenpaid.Ifforeclosure
proceedingsarediscontinued,allfeesandcostsincurred
aretobecollectedfromtheborrowerunlessprohibited
bylaw.Injurisdictionswherethecollectionof
attorneysfeesorcostsfromtheborrowerisprohibited,
theBuyerwillsharesuchexpenseswiththeServicerin
proportiontotheBuyersinterestintheloan.
Indeedoftrustjurisdictions,itistheServicers
responsibilitytoensureaproperindividualorentity,free
fromanyconflictofinterest,servesastrusteeor
substitutetrustee.TheBuyermayselecttheforeclosure
counselorrequestsubstitutionofatrusteetowhomthe
caseistobereferred.TheServicerisexpectedtowork
closelywiththeforeclosurecounsel,trustee,orsubstitute
trusteetoensurepromptandefficientcompletionofthe
foreclosureproceedings.
C.OfferofPaymentDuringForeclosure
Iftheborrowerofferspaymentofthefulldelinquency
duringforeclosure,includingadvances,legalcosts,and
otherforeclosureexpenses,theServicershould
determinethetotalamountofallforeclosurecostsand
expenseswhichwillbeincurrediftheofferisaccepted.
SuchanoffermaybeacceptedbytheServicerifthe
paymentofferedwillcoverallcostsandexpenses.No
offeroffullpaymentmaybedeclinedwithoutthe
Buyersapproval.
Iftheofferisaccepted,afterreceivingthefundsthe
Servicermusttakeactiontopreventadditional
foreclosureexpensesfrombeingincurred,paythe
foreclosureexpenses,andapplytheremainingfundsto
theborrowersaccountandreturnthedebtinstrumentto
theTrusteebycertifiedmail
Iftheborrowerofferstopayanamountlessthanthefull
delinquencyduringforeclosure,theServicershould
determinethetotalamountofforeclosurecostsand
expenseswhichwouldbeincurrediftheofferwere
accepted.TheServicermaydeclinewithoutrequesting
theBuyersapproval,butmustobtaintheBuyers
approvalbeforeaccepting.TheServicers
recommendationshouldincludeanopinionregarding
whethertheforeclosureactionshouldbesuspendedor
dismissedandhowtheremainingdelinquencywillbe
cured.
D.BiddingInstructions
TheServicermustissuebiddinginstructionstoits
employee,agent,ortheattorneyattendingthe
foreclosuresaleunlesstheBuyerdirectsotherwise.
TheServicermustcomplywithallbiddinginstructions
andrequirementsofthemortgageinsurer,when
applicable.TheBuyerdoesnotneedtoapprovethe
maximumbidpriceifitwillrecoverthetotal
indebtedness,includingexpensesandcosts,orifitisthe
maximumamountpermittedbyapplicablelaw.Ifthe
mortgagorhassubstantialassetsorearningpowerand
statelawallowscollectionofdeficiencyamounts,the
ServicermustpreservetheBuyersrightstopursue
collectionandrecoveryofadeficiency.TheServicer
mustobtaintheBuyerspriorapprovalofamaximum
bidwhichisinsufficienttorecoverthetotal
indebtedness.IftheBuyersapprovalofamaximumbid
isrequired,therequestforapprovalmustbe
accompaniedbyanestimatedmarketvalueofthe
propertyinanasisconditionatleast14dayspriorto
theactualforeclosuresaledate.
E.ThirdPartyAcquisitions
Ifthepropertyisdisposedofinathirdpartytransaction
attheforeclosuresale,allreasonableexpensesadvanced
bytheServicerduringtheforeclosureprocessand
approvedinwritingbytheBuyerwillbenettedagainst
theforeclosuresaleproceeds.TheBuyersportionofthe
proceedswillthenbetransferredtotheBuyer.
206.03ClaimProcedures
A.FilingaClaim
Allmortgageinsuranceclaimsmustbefiledwithinthe
timerequiredbythemortgageinsurer.Ifaclaimcannot
befiledwiththemortgageinsurerwithinthattime,the
Servicermustobtainanextensionfromthemortgage
insurer.TheServicermustforwardacopyofthe
mortgageinsurersextensionapprovaltotheBuyerand
mustincludeawrittenexplanationofthereasonforthe
delayandanticipateddatefortheclaimfiling.
TheServicershouldcompletetheclaimaccordingtothe
mortgageinsurersproceduresandforwardacopytothe
Buyer.Themortgageinsurershouldmakesettlement
checkspayabletotheServicer.
IftheprimarymortgageinsurancewasissuedbyPMI
MortgageInsuranceCo.,theServicermustinformPMI
thatthepolicycoversaloanpurchasedbytheBuyer.
Ifthemortgageinsurerfailstopaytheclaimwithin60
days,theServicermustmakedemanduponthemortgage
insurerforimmediatepayment.TheServiceris
responsibleforreimbursementforanyshortfallin
insurancecoverage.
Ifthemortgageinsurerreducestheclaimdueto
administrativeerror,theServicerwillreimbursethe
Buyerfortheamountofsuchreduction.Allclaim
2063
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reductionsordenialsmustbebroughttotheattentionof
theBuyeralongwiththeServicersresponsetothe
reductionordenial
B.DepositofSettlementProceeds
Within1businessdayofreceiptofsettlementfunds,the
Servicershouldimmediatelydeposittheproceedsinto
theP&ICustodialAccount.Theservicershouldemailor
faxacopyofthefinalsignedHUD1thatmustmatch
theproceedsreceived.GrossproceedsalongwithMI
proceedsifreceivedshouldbewiredtothebuyerwithin
2businessdays.IftheloanhasMIinsurancepending,
servicershouldnotholdfundsintheircustodialaccount
untiltheMIclaimhasbeenpaid.Acopyofthe
explanationofbenefitssettlementstatementshouldbe
senttotheBuyeruponreceiptofMIfunds.Donotdelay
liquidatingaloanduetononreceiptofMIproceeds.
Thesecanbesubmittedasasupplementaluponreceipt
offunds.
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Section207.AcquiredProperties
TheServicersresponsibilityforthemaintenance,
securityandmarketingoftheacquiredproperty
continuesuntilthefinaldispositionofthepropertyand
untilallfundsarereceivedbytheBuyer,unlessthe
BuyerrelievestheServicerofthesedutiesbywritten
notification.
IftheBuyerrelievestheServiceroftheresponsibilityfor
maintenanceandmarketingoftheacquiredpropertyfor
cause,theServicershallpaytheBuyerthegreaterof
$1,000or1%oftheunpaidprincipalbalance.
Consistentviolationsmayresultinterminationofthe
SellingandServicingAgreementforcause.
TheServiceracknowledgesdamagesufferedbythe
BuyerduetotheServicersfailuretoproperlyand
expedientlyadministerandmarkettheacquiredproperty
willbereimbursedtotheBuyerbytheServicer.Referto
Section206.03fordetailsonclaimprocedures.
Properservicingshallinclude,butnotbelimitedtothe
followingactions:
1.Inspectionandmaintenanceoftheproperty,
2.Payinginsurancepremiumsandtaxeswhendue,
3.Notificationofacquisitionandprovidingcasefiles,
4.Propertyvaluationandrepair,
5.Expedientmarketingoftheacquiredproperty,
6.ProvidingmonthlyreportsaccordingtoBuyer
requirements,
7.Filingaccounting,and
8.IRSreporting.
207.01InspectionandMaintenance
Servicerisrequiredtocompletemonthlyproperty
inspectionsfromthetimeofacquisitionuntilthecloseof
escrow.Thesereportsshouldbeavailableuponrequest
bytheBuyer..IfatanytimetheServicerascertainsany
damagetotheproperty,theServicermustsubmitaclaim
forinsurancerecovery,obtainrepairbidsandtake
necessaryprotectiveactiontopreventanyrecurrence.
Priortobeginningpropertyrepair,theServicermust
contacttheBuyerforinstructions.TheServicermust
ensuresettlementofanyhazardinsuranceclaimis
promptlycompleted.TheBuyerwilloftenhaveSpecial
HazardInsurancecoverageforlossesoverandabove
thosecoveredbyprimaryhazardinsurance.ThisSpecial
HazardInsuranceisnotinlieuofprimaryhazard
insurancewhichmustbemaintainedbytheServicer.
Anylosscoveredbytheprimaryhazardinsurancecarrier
mustbereportedbytheBuyersoaclaimunderthe
SpecialHazardInsurancePolicymaybesubmitted.
Failuretofileaninsuranceclaimforclaimabledamages
willresultinapenaltybeingassessedatthetimeof
liquidationfortheamountofthecosttorepairsaid
damages.
TheServicermayspendupto$2,500peroccurrencefor
emergencyrepairsofpropertysecuritywithoutthe
Buyerspriorapproval.Iftherequiredsecuringor
emergencyrepairsexceed$2,500,contacttheBuyerfor
verbalapproval.
Forallpropertiesinredemption,confirmation,
ratification,oreviction,theServicerisrequiredto
completeadrivebyBPOwithin10daysandforwardto
theBuyerviaemail.Ifthepropertyremainsoccupied
aftermarketabletitleisobtained,theServicer,should
immediatelycommenceevictionunlesstheoccupancyof
thepropertyenhancesitsmarketability.TheServicer
mustobtaintheBuyerspriorapprovalbeforeallowing
continuedoccupancyorenteringintoalease.
207.02PaymentofTaxesandInsurance
TheServicermustensurethefollowing:
1.Allpropertytaxesandassessmentsarepaidontime.
Penaltiesforlatepaymentofpropertytaxesor
assessmentswillnotbereimbursedtotheServicer.
2.Allassociationduesarepaid,ifappropriate.The
foreclosureactionshouldextinguishanyfeeswhich
becomeduepriortoacquisition.Penaltiesforlate
paymentwillnotbereimbursedtotheServicer.
3.Adequatehazardinsurancecoverageand,if
applicable,floodinsurancecoverageismaintained
atalltimes.
4.TheServicermustascertainthebenefitsofobtaining
vandalismcoverageandmakearecommendationto
theBuyer.
207.03SubmissionofCaseand
MarketingFiles
TheServicermustinformtheBuyeroftheacquisitionof
apropertywithin24hoursoftheforeclosuresaleevenif
aredemptionperiodfollowsthesale.Suchnoticemay
beintheformofaletterandshouldprovidethe
foreclosuresaledate,successfulbidamount,occupancy
status,andanyunexplainedredemptiondates.
Thecasefileisduewithin10daysofacquisitionand
shouldcontainthefollowingdocuments:
If12monthlypaymentsorlessweremadeontheloan,
theServicermustsendthefollowing,alongwiththe
completeoriginationfile.
1.Noteorotherinstrumentevidencingindebtedness.
2.MortgageorDeedofTrust.
3.Originalappraisal.
4.Paymenthistorysinceinceptionoftheloan.
5.Copiesofallforeclosurepleadingsandevidenceof
titleinthenameofapartydesignatedbytheBuyer
Within30daysofpossession,themarketingfileshould
containthefollowingdocuments:
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1.Currentappraisal(reflecting90120daymarketing
time,includingasisandrepairedvalues,
detailedlistofrepairs,costs,incremental
contributoryvalueanda30dayquicksalevalue).
2.CurrentBPO(reflecting90120daymarketingtime,
includingasisandrepairedvalues,detailedlist
ofrepairs,costs,incrementalcontributoryvalueand
a30dayquicksalevalue).
3.SecondBPO
ForProperties>=$40,000
ServicershallorderanadditionalBPOwhenthe
lowestBPOvariesby10percentorgreater
fromtheappraisalandServicerisunableto
effectivelyreconcilethevalues.
Forproperties<$40,000:
Bothvaluesunder$40,000:15percentvariance
Bothvaluesunder$10,000:25percentvariance.
4.Listofcontractorbidsifrepairsrecommended:
$0$3,500:Onebidrequired
Over$3,500upto$10,000:Twobidsrequired
Over$10,000:Threebidsrequired
5.Recommendationforsalespriceandmarketing
strategy.
6.Rentalagreements,ifapprovedbytheBuyer.
Failuretosubmitthecaseandmarketingfilesas
describedwillbeconsideredabreachoftheSellingand
ServicingAgreementandwillsubjecttheServicertoa
perdieminterestpenaltyatthenoterateplusany
additionaldamagessufferedbytheBuyerresultingfrom
thefailure.Ifthecasefileormarketingfileismorethan
30daysoverdue,theBuyerwillrequestarepurchaseof
theBuyersinterest.
207.04MarketingofAcquired
Properties
Themarketingofanacquiredpropertyisadministered
bytheServicersubjecttothedirectionoftheBuyer.The
propertiesmustbemaintainedinmarketablecondition.
InitialSecuringandMaintenanceLimits(property
preservation)
Servicerhasapprovalupto$2,350forinitial
propertypreservationitems(trashout,rekey,lawn,
pool,etc.)Buyermustapproveallexpenses
exceeding$2,350.Buyeristoapproveanybids
over$2,350.
Approvalwillbehandledviaemailunlessotherwise
specifiedbyBuyer.
InitialPreservationLimit:$2,350forrekey,
securing,andthefollowingitems:
Exterior:
Removeallpersonalitemsfromgrounds,
storagebuildings,andgarages.
Installhighvoltagelightbulbsinall
outlets.
Mow,edge,trimshrubbery/trees,andclean
allbeddingareas.
Initialwateringofgroundsinnon
winterizedmonths
InGroundPool:
Clean,secureandmakeoperable(in
season).
Fence,ifneededtocomplywithlocal
law.$500.
CoverperHUDregulations,if
applicable.$500.
MonthlyMaintenance(ifoperating).
$200.
Post
KEEP
OUT/NO
TRESPASSINGatpoolarea.
Providephotos.
NOTE:NEVERDRAININ
GROUNDPOOLS.
AboveGroundPool:
Inmostcasesthesepoolsshouldbe
removed$350.
Removeallmailandadvertisements
Cleanguttersanddownspouts
Interior:
Removeallnonrealtyandpersonalitems
Removeallexposednails,hangers,
sticker,etc.fromwalls/ceilings,doors&
windows
Removedamagedand/orunappealing
windowtreatments
Turnonallutilities(winterizewhen
completed,whenwarranted)
Startfurnace/heatingunits
Cleanallappliances
Cleantoilets,showersandtubs
Cleanallwindows
Cleanflooring,includingcarpet
Installhighvoltagelightbulbsatall
outlets
Initialcostlimitations:
Onetimejanitorial$300
Onetimecarpetcleaning$250
InitialPool$500
Insect/rodentinfestation$250
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OngoingPreservation:
Seasonalgroundsmaintenance,including
mowing,
edging,
trimming
shrubbery/trees,andmulching
Ongoingwateringtokeepgrounds
appearingasoccupied
Ongoingcostlimitations:
Weeklylawnmaintenance$50per
occurrenceprovidephotos.
Periodicinteriorcleaning$65
Monthlypool$200
Snowremoval$50peroccurrence
Winterization$200
Dewinterization$150
Twosmokedetectorsorstate
requirements$60each
CarbonMonoxidedetectors,ifrequired,
$80each
Subsequentongoingpreservationcostsare
billedasincurred.Clearlydocument
scope/reasonablenessofallexpenses
(beforephotos,bids,etc.);allexpensesare
subjecttoaudit
Utilities
Servicerwillensureallutilitiesandwater
areturnedonandinworkingcondition,
providedconditionandseasonwarrant.
Theselectionofabrokerwillbethesoleresponsibility
oftheServicer.TheBuyerrecommendsselectinga
brokerwhoisamemberofalocalMultipleListing
Service,ifoneexists.TheBuyerreservestherightto
directallmarketingactivitiesrelativetotheacquired
propertyintheeventtheBuyerbelieves,initssole
discretion,thatitwouldbeadvantageoustodoso.In
theseinstances,theServicerwillcontinuetoadminister
thereimbursementofexpensesandfacilitatepaymentof
anyapplicabletaxes,hazardinsuranceandotheritems.
TheServicerwillcontinuetoperformthesefunctions
untilthepropertyhasbeenliquidated.
Theinitiallistpriceandtermswillbedeterminedbythe
Buyer.TheServicerwillcompleteandexecutethe
listingagreement.
After90daysonmarket,servicerwillorderanewBPO
fromanagentotherthanthelistingagentatacostnotto
exceed$100.00.AllREOpropertieswillberevalued
every6months.Forpropertiespreviouslyvaluedbelow
$250,000,thiswillbeintheformofaBPO.For
propertiespreviouslyvaluedat$250,000andabove,an
appraisalshouldbeordered..
Whenanofferisreceivedthefollowingdetailsshouldbe
emailedtotheREOAssetManagerassignedtothefile:
1.Buyersname
2.OfferPrice
3.Concessions
4.Estimatednetproceeds
5.Closeofescrowdate
6.Typeoffinancing
7.CurrentListprice,
TheServicermustcontactthemortgageinsurerfor
priorapprovaliftheclaimhasnotyetbeensettled.
Themortgageinsurersinstructionsmustbe
includedwiththeofferpackagesenttotheBuyer.
Uponacceptanceoftheoffer,acopyoftheexecuted
contractmustbesubmittedtotheBuyerwithin10
daysofapproval.
Oncetheofferhasbeenaccepted,theServicermust
ensuretheclosingproceedsonschedule.Ifthereisa
delayinclosingwhichisnotapprovedbytheBuyer,the
Servicermaybeassessedaperdieminterestpenaltyat
thenoterate.
Theclosingdocumentsaretobereviewedbythe
Servicertoensureaccuracyandcompliancewiththe
contractterms.Thedeedmustnamethetrusteeas
transferorandbeforwardedtotheBuyeratleastseven
dayspriortothescheduledclosing.TheBuyerwill
obtaintherequiredsignaturesandwillreturnthe
documentstothespecifiedclosingagent.Preliminary
HUD1mustbeapprovedbyBuyerpriortocloseof
escrow.Anychangesthatreducethenetproceedsby
$1,000afterpreliminaryHUD1hasbeenapprovedneed
Buyerapproval.AcopyofthesignedfinalHUD1isdue
totheBuyerwithin2businessdaysofclosing.
TheBuyerwillpermitthesaleofanacquiredpropertyto
directors,officersandemployeesoftheServicer,orany
subsidiaryoftheServicer,andtospousesandmembers
oftheimmediatefamilywhoresidewithanydirector,
officeroremployeeoftheServicerorasubsidiaryofthe
Servicer(aServicerAffiliatedPerson),andtothe
Buyeremployeesandtheirimmediatefamilies,provided
thatallofthefollowingconditionsaremet:
1.Thesalespriceissubstantiatedbyanindependent
appraisal;
2.Thetermsofthesaleareidenticaltothosethat
wouldotherwisebeofferedtothegeneralpublic;
3.ForasaletoanyServicerAffiliatedPerson,the
transactionisapprovedinadvancebyaresolution
adoptedbyamajorityoftheServicersboardof
directors,withnodirectorhavinganinterestinthe
transactionvoting.Ifnoboardofdirectorsexists
withintheServicersorganization,thetransaction
mustbeapprovedinadvance,bythehighest
decisionmakingbodywithintheServicers
organization,withnopersonhavinganinterestin
thetransactionparticipatinginthedecision;and
4.ForasaletoaBuyeremployeeortoamemberof
hisorherimmediatefamily,theacquiredproperty
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mustbepurchasedastheemployeesorhisorher
immediatefamilymembersprimaryresidence.
207.05Repairs
IfrepairsareapprovedbytheBuyer,TheServicermust
maintainclosescrutinyofthecontractorandmustreport
theprogresstotheBuyerviathemonthlyreport.
Repairsmustbecompletedexpediently.Priortothe
paymentofthecontractorsbill,theServicermust
inspectthepropertytoassureallrepairswerecompleted
properlyandallthenecessaryreleaseshavebeensigned.
TheServicershouldadvancethefundsnecessarytopay
thecontractoruponrepaircompletion.
TheServicershallholdtheBuyerharmlessforany
unpaidmechanicsliens,damagetothepropertyor
surroundingpropertiesorinjurytotheworkmen.
Ifadvantageous,theServicershouldnotdelaythe
marketingofthepropertypendingthecompletionor
repairs.Photosofthecompletedrepairsmustbe
forwardedtotheBuyer.
207.06MonthlyReports
ListingagentwillcompleteaMonthlyMarketingReport
foralllistedproperties,whicharenotundercontract.
ThesereportsshouldbereviewedbytheServicerand
submittedtotheBuyertosupportlistpricereductions,
marketingstrategyrevisionsandoffersreceived..
207.07FileAccounting
A.ReimbursementofP&IAdvances
Claimsettlementchecksaretobedepositedinthe
ServicersP&ICustodialAccountwithin24hoursof
receipt.ALiquidationSchedulemustbereceivedbythe
Buyerwithin48hoursofdeposit.TheServicermaynot
reimburseitselfforexpensesoradvancesfromtheclaim
payment.Failuretocomplywiththisrequirementwill
resultinaperdieminterestpenaltycalculatedatthenote
rate.
Uponreceiptofthefinalliquidationfunds,theServicer
willbereimbursedforanyP&Iadvances..
B.FinalLiquidationProceeds
Allfundsfromthesaleofthepropertyshouldbe
depositedtotheP&ICustodialAccountandwiredtothe
Buyerwithin48hoursofdeposit.Thewiring
instructionsare:
BankNameJPMorganChaseNewYork
ABA#021000021
Account#304652601
AccountName:WashingtonMutualMortgage
SecuritiesCorpOriginatortoBeneficiary:Attn
REO/WMMSCLoan#
ALiquidationSchedulealongwithacopyoftheHUD1
settlementstatement,andthewireconfirmationmustbe
submittedwithin48hoursofdeposit.TheServicer
maynotreimburseitselfforexpensesoradvancesfrom
thesaleproceeds.Failuretocomplywiththis
requirementwillresultinaperdieminterestpenalty
calculatedatthenoterate.
C.ReimbursementofExpenses
Within30daysafterthesaleoftheproperty,aStatement
ofExpenses(WMMSC3001)mustbesubmittedtothe
Buyer.Receiptssubstantiatingallitemsmustbe
includedalongwiththeloanhistoryshowingbilled
disbursementsfromtheescrowaccount.Inlieuof
receiptsfortaxandinsurancedisbursements,theBuyer
willacceptcertifiedcopiesofloanhistorieshighlighting
suchdisbursements.Atableoftransactioncodesshould
alsobeincluded.
TheStatementofExpenseswithallrequiredreceipts
mustbereceivedbytheBuyerwithin30daysofthesale.
FailuretosubmittheStatementofExpenseswillbe
consideredabreachoftheSellingandServicing
Agreement.Ifitisnotreceivedwithin30days,the
BuyerreservestherighttosubjecttheServicertoa
penaltyof$100.00perdayplusanyadditionaldamages
sufferedbytheBuyerresultingfromthedelayordeny
thereimbursementofanyservicingexpense.
Supplementalreimbursementrequestsforutilitybills
willbeconsideredonacasebycasebasis.
TheBuyerreservestherighttoprorateanyandall
expensesduringthetimeframethatanypenaltiesare
assessed.
D.LoanRemoval
TheBuyerwillprovidewritteninstructionstoremove
theloanfromtheServicerssystemalongwith
reimbursementforanyoutstandingP&Iadvancesand
expensesdue.
207.08IRSReporting
Section6050JoftheInternalRevenueCoderequiresthat
theownerofamortgagedpropertywhichwasforeclosed
orabandonedduringthepreviousyearfilean
informationreturn(IRSForm1099A)withtheIRS.
Servicerswhichhaveservicedacquiredpropertiesduring
theyearmustsubmitform1099AtotheIRSandfurnish
theBuyerwithacopy.TheborrowersportionofForm
1099Amustbefurnishedtotheborroweronorbefore
January31stoftheyearfollowingtheacquisition.Ifthe
Servicerhasnoacquiredproperties,theBuyermust
receivewrittenconfirmationofthistoensurecompliance
withIRSregulations.TheBuyerwillfurnishthetax
identificationnumbertotheServicer.
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207.09Primaryand/orPoolInsurance
TheServicermustsubmittotheBuyeracopyofthe
primaryand/orpoolmortgageinsuranceclaimas
requiredbytheinsurerandinaccordancewiththeterms
oftheMasterPolicy.TheServicermustdiligentlyfollow
upwiththemortgageinsurertoensurethattheclaimhas
beenperfectedandnoadditionaldocumentationis
requiredtosettletheclaim.Anydelaysinreceiving
paymentwhichoccurasaresultoftheServicersfailure
toperfecttheclaimwillbeassesseduponfinal
settlementataperdieminterestpenaltyatthenoterate.
Uponreceiptofpaymentoftheprimaryorpool
mortgageinsuranceclaim,acopyoftheExplanationof
Benefitsreceivedfromthemortgageinsurancemustbe
forwardedtotheBuyer.
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Section208.ConversionProcess:AdjustableRate
Mortgages
Foradjustableratemortgages(ARMs)withconversion
options,theborrowermay,inaccordancewiththeterms
oftheapplicablenote,converttheloantoafixedrate,
levelpayment,fullyamortizingloanfortheremainderof
theoriginal30yearterm.Inmostcases,theborrower
mayexercisetheoptiontoconvertatanytimeduringthe
firstfiveyearsoftheloantermoratsuchtimeduringthe
second,third,fourthorfifthyearoftheloanterm,
accordingtotheloandocuments,whichresultinthe
effectiveconversiondateoccurringpriortothefifth
anniversarydateoftheloansorigination.
ItistheServicersresponsibilitytomakeanynecessary
disclosuretotheborrowerregardingthetermsand
conditionsofthe30yearloantowhichtheborroweris
convertingtheARMandtoensurealloftheprocedures
andrequirementssetforthintheloandocumentsand
applicablefederal,state,andlocallawarestrictly
followed.ItisalsotheServicersresponsibilityto
ensureanyconvertedloanretainsitsfirstlienstatus.
208.01VariationsinLoanDocuments
TheServicermustserviceeachARMaccordingtothe
termsofthenote,securityinstrument,disclosuresand
anyridersandaddendatothosedocuments.Exceptfor
thesecurityinstrument,whichmustbethestandard
FNMA/FHLMCsecurityinstrumentforthestatein
whichthepropertyislocated,theBuyermaychangethe
loandocumentationrequirementsinaccordancewith
programchanges.
Shouldtheborrowerwishtoconverttoafixedrateloan
usingalower,unpaidprincipalbalance,thecurtailment
mustberemitted,reportedandpassedthroughbeforethe
conversionisregistered.
TheServicerisresponsibleforenforcingeachARM
accordingtoitstermsandshouldensurethatthenote,
securityinstrument,programdisclosure,andany
addendaorridersmeettherequirementsoftheBuyer.
208.02Eligibility
Inordertoexercisetheconversionoption,theServicer
mustcomplywiththetermsofthemortgagedocuments.
Forconversioneligibilitypurposes,adelinquent
paymentisdefinedasanypaymentnotmadewithinthe
monthitwasdue.Theconversiondoesnotrequireany
requalificationoftheborrower.
208.03ConversionFee
Atthetimeofaconversionrequest,theborrowermust
payanonrefundableconversionfee,asstatedinthe
mortgagedocuments,asoftheeffectiveconversiondate.
TheServicershouldretainitsportionoftheconversion
fee(25%,orascontracted).
208.04NewMortgageInterestRate
Thenewfixedmortgageinterestratewillbecalculated;
i)accordingtothemortgageloandocuments,ii)asthe
rateeffectiveasoftheregistrationdate,andiii)thesum
oftherequiredyield,plustheServicersservicingfee.
Theservicingfeemustbenogreaterthantheservicing
feechargedontheARMbutnolessthan.25%.
208.05EffectiveConversionDate
Theeffectiveconversiondateisthedateonwhichthe
newfixedinterestratebecomeseffective.Thisdate
occursonthefirstdayofthesecondmonthfollowingthe
conversionregistrationdate.Forexample,ifthe
conversionisregisteredanytimeinJanuary,thenew
mortgageinterestratewillbecomeeffectiveonMarch1,
theeffectiveconversiondate,andthenewpayment
amountwillbecomeeffectiveonApril1,thenewfirst
fixedratepaymentdate.
208.06FirstFixedRatePaymentDate
Thefirstfixedratepaymentdateisthedateonwhichthe
firstpaymentbasedonthenewfixedmortgageinterest
rateisdue.Thisdatewillalwaysoccuronemonthafter
theeffectiveconversiondate,onthefirstdayofthe
month.
208.07MortgageInsurance
Requirements
WhenaninsuredARMisconvertedtoafixedrateloan,
theServicermustensuretheappropriatemortgage
insurancecoverageismaintained.TheServicermust
notifythemortgageinsureroftheconversionofany
insuredloan,mustobtainanyrequiredamendmentor
endorsement(ifitistheinsurerspolicytoconvertfrom
ARMtofixedratecoverage),andmustforwardthis
amendmentoracopyofthenotificationtothemortgage
insurancecompanytotheBuyer.
208.08StepbyStepConversion
Procedures:
1.TheborrowermustcontacttheServicerforaquote
onthecurrentmortgageinterestrateandconversion
fee.
2.Forthecurrentmortgageinterestrate,theServicer
willquotefromthecurrentdaysposting,according
tothemortgagedocuments,plustheServicers
servicingfee.TheServicermustalsoexplainthat
theactualratewillonlybelockedinoncethe
conversionfeeisreceived.
3.Fortheconversionfee,theServicerwillquotethe
amount(percentageofprincipalbalanceorfixed
amount)asstatedinthemortgagedocuments.The
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Section208.ConversionProcess:AdjustableRate
Mortgages
Servicermustexplainthatthisquoteisvaliduntil
theendofthecurrentmonthandthattheconversion
feeisnonrefundable.
4.Iftheborrowerelectstoconvertatthequotedrate
andfee,theServicermust:
Ensurethatalltermsoftheconversionoption
accordingtothemortgagedocumentshavebeen
satisfied,and
Afterverifyingtheborrowerscompliancewith
theserequirements,theServicerwillinstructthe
borrowertosubmittherequiredconversionfee.
5.Afterregisteringtheconversion,theServicerwill
preparetheModificationAgreementandall
disclosuresrequiredbylawandwillmailthemto
theborrower.Documentsmustbemailedtothe
borrowernolaterthanthethirdbusinessday
followingtheConversionRegistrationDate.
6.Theborrowerwillcompleteandsignthe
ModificationAgreement,haveitnotarizedand
returnedtotheServicerwithinthetimeframe
specifiedinthemortgagedocuments.IftheServicer
doesnotreceivethecompletepackagewithinthe
requiredtimeframe,theconversioniscanceled.
7.IftheARMhasprimarymortgageinsurance
coverage,theServicermustnotifythemortgage
insureroftheconversion,obtainanyrequired
amendmentsorendorsements(ifitistheinsurers
policytoconvertfromARMtofixedratecoverage),
andforwardthisamendmentorendorsementtothe
Buyer.
8.TheServicerrepresentsandwarrantsthecriteria
listedinitem2abovehavebeenmet.IftheBuyer
determinesatanytimeafterconversionthata
violationexistedatthetimeofconversion,the
Servicerwillberequiredtorepurchasetheloan.
9.TheServicerwillsigntheModificationAgreement
andreturnasignedcopytotheBuyer.Ifthesigned
originalmustberecordedtoperfectthefirstlien,the
ServicermustnotifytheBuyerofthisfact,and
forwardacopyoftherecordedModification
AgreementtotheBuyer.
10.TheServicerwillprovidetheborrowerwithwritten
noticeofconfirmationordenialoftheconversion.
Iftheconversionisdenied,theconversionfeeisnot
returnedtotheborrower.
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Section301.Recordkeeping
TheServicermustmaintainaccurateaccountingand
borrowerpaymentrecords.TheBuyermayexamineany
oftherecordsandaccountingreportsassociatedwithany
loansservicedonbehalfoftheBuyerorinwhichthe
Buyerholdsaninterest,theborrowersremittancesand
anyotherreportsanddocumentationnecessaryto
establishtheServicerscompliancewiththeBuyers
purchaseprogramatanyreasonabletime.TheBuyer
will:
Monitorallmonthlyaccountingreportssubmitted
bytheServicer;
Conductproceduralreviewsduringperiodicvisitsto
theServicersplaceofbusiness;
Conduct,fromtimetotime,indepthauditsofthe
Servicersinternalrecordsandoperatingprocedures.
Amongotherthings,theBuyermayexaminethe
Servicersfinancialrecords,theborrowersescrow
accounts,andtheunderwritingstandardsusedbythe
Servicer;and
Requestindividualloanpaymenthistoriestoensure
properadministrationofborrowersaccounts.
301.01MortgagePaymentRecords
TheServicermustmaintainpermanentloanaccount
recordsforeachloan.Theserecordsmaybeintheform
ofhardcopy(paper),microfiche,orelectronicmediaand
mustbemaintainedforsix(6)yearsaftertheloanis
liquidated.Eachloansaccountrecordmustidentifyit
asapooledloan.TheBuyerdoesnotmandatethe
particularsystemorformstobeusedforthemortgage
accountrecords,butrequiresthesystembecapableof
producinganaccounttranscriptitemizingthefollowing
inchronologicalorder:
Thedate,amount,distribution,installmentduedate
orothertransactionsaffectingtheamountsduefrom
ortotheborrower;and
Thelatestoutstandingbalancesofprincipal,
deposits,advances,andunappliedpayments.
Thesystemmustalsoprovideforthepromptdisclosure
ofanyoverdraftintheaccountbalanceofdepositsfor
thepaymentoftaxesandinsurance.
Theaccountsandrecordsonloansshouldbemaintained
accordingtosoundandgenerallyacceptedaccounting
practicesandinawaywhichwillpermittheBuyer
representativestoexamineandaudittheaccountsand
recordsuponrequest.
301.02ServicerCompensation
ForeachfixedrateloanservicedfortheBuyer,the
Servicerretainsaservicingfeemadeupofthedifference
betweenthemortgageinterestrateandthenetratetothe
Buyer.Thenetrateisdefinedastherateofinterest
payabletotheBuyeroneachloan.Thisservicingfee
mustbeaminimumof.25%andmaynotexceeda
maximumof1.00%perannum.
Foradjustableratemortgages(ARMs),theservicingfee
isthedifferencebetweenthegrossmarginstatedinthe
mortgageNoteandthenetmargintotheBuyer.
Dependingontheloanamount,theservicingfeeforan
ARMloanwillhaveaminimumof.25%andno
maximum.However,ifanARMconvertstoafixedrate
loan,theservicingfeemaynotexceedtheoriginal
servicingfeeontheARMNote.
NoservicingcompensationispayabletotheServiceron
anyloanforanyperiodbeforethepurchasedate.
Servicingfeesatliquidationarepayableonlyin
proportiontointerestcollectedatliquidationonthe
respectiveloan.
Becausesaleproceedsincludeanadjustmentforinterest
andservicingfeesfromthefirstdayofthemonthof
purchasetothepurchasedate,fullservicingfeesare
deductedfromthefirstinstallmentduetheBuyer.On
thepurchasedate,theBuyerwillpayaccruedinterestat
thenetratefromthefirstdayofthemonthofpurchaseto
thepurchasedate.Therefore,theServicerremitsafull
monthsinterestatthenetratewiththefirstinstallment
duetheBuyer.
TheServicermaydeductservicingfeesbefore
depositingdailycollectionsintheP&ICustodial
Account.IftheServicerdecidestodepositgrossinterest
atthemortgageinterestratetotheP&ICustodial
Account,servicingfeesmaybewithdrawndailybythe
Servicer.
Ifnecessary,theServicermayestimateservicingfees
beforethecalendarmonthend.Servicingfeesdeducted
orwithdrawnbytheServicershouldbereportedtothe
Buyerinthemonthlyaccountingreports.
Aftereachcalendarmonthend,theBuyerwill
recomputetheservicingfeesduetotheServicerand
confirmthenetinterestatthenetrateduetotheBuyer
onthenextautomaticwithdrawaldate.TheServicer
mayhavetomakeacashadjustmenttotheP&I
CustodialAccountforanyoverorunderdeductionof
servicingfeesintheprecedingmonth.
ServicerGuide:LoanAccounting
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Section301.Recordkeeping
Anylatecharges,assumptionfees,orothercharges
providedforintheloandocumentswiththeexceptionof
ARMtofixedrateloanconversionfeesasdiscussedin
Section208,andcollectedbytheServicerasadditional
compensationmustbeaccountedforseparatelyfromall
otherpaymentsmadebytheborrowerandmustbe
includedinseparateaccountrecordsandreflectedinthe
bankaccountreconciliation.
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Section302.IdentifyingWMMSCLoans
302.01LoanNumbers
Shortlyafterpurchaseandpriortothefirstmonthend
cutoffdate,theServicerwillbenotifiedoftheninedigit
Buyerloannumber.TheServicermustincludethisloan
numberonallaccountingandservicingreportsand
correspondencewhichrelatetoaspecificloaneffective
withthefirstmonthofreporting.
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Section303.CustodialAccounts
TheServicermustestablish,maintain,andmonitorfor
themortgageloansservicedbytheServiceronbehalfof
theBuyeroneormoreprincipalandinterestcustodial
accounts(collectively,theP&ICustodialAccount),
intowhichallpaymentsofprincipalandinterestshallbe
deposited,andoneormoretaxesandinsurancecustodial
accounts(collectively,theT&ICustodialAccount),
intowhichallpaymentsoftaxesandinsuranceshallbe
deposited.TheP&ICustodialAccountshallbe
maintainedseparatelyfromtheT&ICustodialAccount.
UnlessotherwiseauthorizedbytheBuyerinwriting,
eachcustodialaccountmustbeinsuredbytheFederal
DepositInsuranceCorporation("FDIC").Funds
depositedinacustodialaccountmaynotexceedthelevel
insuredbyFDICdepositinsurance.Anyamounton
depositinaP&ICustodialAccountwhichisnotfully
protectedorinsuredbytheFDICmustbeimmediately
remittedtotheBuyer.AnyamountondepositinaT&I
CustodialAccountwhichisnotfullyprotectedorinsured
bytheFDICmustberemovedfromthataccountand
depositedinanotherfullyFDICinsuredT&ICustodial
AccountestablishedandmaintainedbytheServicer.
Allcustodialaccountrecordsmustbemaintainedina
mannerconsistentwithprudentindustrypracticesand
mustbereadilyaccessibletotheBuyer'srepresentatives
atanytime.
Thedepositoryinstitutionsatwhichcustodialaccounts
areestablishedandmaintainedmustbeassignedthe
followingratingsfromtwoormoreofthespecified
ratingagencies:
CorbetterforTBW
125orbetterforIDC
P3orbetterforMoodys
A3orbetterforStandardandPoors
ItistheServicersresponsibilitytoensurethecontinued
eligibilityofthedepositoryinstitutioninwhichthe
custodialaccountsaremaintained.Shouldadepository
institutionsratingfallbelowtheabovenotedminimums,
theServicerisrequiredtomovethefundstoadepository
institutionmeetingtheaboverequirements,notifythe
Buyerofthechangeinaccountsandexecutenew
CustodialAccountLetterAgreements(WMMSC4002
forP&I,WMMSC4004forT&I,andWMMSC4014for
Buydowns);andACHDebitAuthorization(WMMSC
4006).
TheestablishmentofanyCustodialAccountandany
changesinanexistingaccountmustbecommunicatedto
theBuyerinaLetterAgreementpreparedbythe
Servicer.TheLetterAgreementsvaryaccordingto
whethertheaccountisinhouseornotandaccordingto
thetypeofaccount.
Thoughnotrequired,aServicerwhoservicesloansin
morethanonepoolmayestablishseparateP&IandT&I
CustodialAccountsforeachone.
AssoonastheBuyerpurchasesaloan,theServicermust
transferanyrelatedfundsondeposittotheappropriate
custodialaccount.
TheServicermustestablishareasonabledailywork
cutofftoensurethatcollectionsarecreditedtothe
custodialaccountnolaterthanthebusinessday
followingtheirreceipt.
Allcustodialaccountsmustbedemanddepositaccounts
andmaybeinterestbearing.
303.01PrincipalandInterestCustodial
Accounts
Allfundsforthepaymentofprincipaland/orinterest
whicharereceivedbytheServicermustbeheldintrust
bytheServiceranddepositedtotheP&ICustodial
Account.Thisincludesanyproceedsfromthe
liquidationofadefaultedloan,fromthemortgagepool
insuranceandprimarymortgageinsurance,andfromany
otherpoliciesofinsurancecollectedbytheServicer.
Thisalsoincludesanyprepaymentinpartorinwhole
accompaniedbyinteresttothedateoftheprepayment.
Inthecaseofliquidation,theServicershouldcomplete
andforwardtheLiquidationSchedule(WMMSC4009)
totheBuyerwithin48hoursofdepositoffunds.
Eachaccountmustclearlyindicatetherespective
interestsoftheServicerastrusteeandoftheBuyer.
Theaccountdesignationmustbe:
[ServicersName],asagent,trusteeand/orbaileeof
principalandinterestcustodialaccountfor,WMMSCits
successorsandassigns,forvariousmortgagorsand/or
variousownersofinterestsinWMMSCmortgagebacked
pools.
AssoonastheBuyerpurchasesanyloan,theServicer
musttransferallrelatedprincipalandinterestfundson
handtotheP&ICustodialAccount.
TheServicershouldimmediatelyremittotheBuyerany
amountdepositedintheP&ICustodialAccountthat
exceedstheinsurancelimitssetbythedepositorys
insuranceauthority.Detailedremittanceinstructions
willbepublishedatthetimeeachpoolisissued.The
ServicermustalsonotifytheBuyerwithin24hours
regardingtheamountofthisremittance.
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ACHDEBITPROCEDURES
P&ICustodialAccountswillbedebitedthroughthe
AutomatedClearingHouse(ACH).Whensettingup
theP&ICustodialAccount,theServicermusthave
theACHDebitAuthorization(WMMSC4006)
completedbytheinstitutionwhichhousestheaccount.
ThisinstitutionmustbeamemberoftheACHnetwork
oracorrespondentofanACHmember.Theaccount
maybeoneoftheServicersP&ICustodialAccountsor
itmaybeaseparateclearingaccount.Eachmonthon
thewithdrawaldatetheServicermusthaveonde
positintheP&ICustodialAccount,orclearing
account,samedayfundsorgoodfundsforall
sumsduetheBuyer.Thedepositmustbesufficient
tocovertheamountofthedebitcommunicatedtothe
ServicerontheNoticeofAutomaticWithdrawal.Each
month,theBuyerwilldebittheaccountsonthe20th
calendardayorontheprecedingbusinessdayifthe20th
dayisnotabusinessdaythroughanACHtransaction.If
fundsarenotavailableonthedayofthedraft,the
Servicerwillbeassessedapenalty,atthehighestprime
ratepublisheddailyintheWallStreetJournalcolumn
entitledMoneyRateplus2.0%.
P&IREMITPROCEDURES
EachmonthonthedatethefundsareduetotheBuyer,
theServicermusthaveondepositintheP&ICustodial
Account,orclearingaccount,samedayfundsorgood
fundsforallsumsduetheBuyer.TheServicermust
remittotheBuyerthetotalamountofthedebit
communicatedtotheServicerontheNoticeof
AutomaticWithdrawal.Eachmonth,theServicerwill
remittherequiredfundsperNoticeofAutomatic
Withdrawalonthe20thcalendardayoronthepreceding
businessdayifthe20thdayisnotabusinessday.If
fundsarenotreceivedonthedayoftherequired
remittancedate,theServicerwillbeassessedapenalty,
calculatedusingthehighestannualprimeratepublished
dailyintheWallStreetJournalcolumnentitledMoney
Rateplus2.0%.
TheServicermaymakewithdrawalsfromtheaccount
onlyforthefollowingpurposes:
1.Toreimburseitselffordelinquencyadvancesthat
havebeenrecoveredfromsubsequentcollections
fromtherelatedmortgagor,or
2.Toremoveamountsthathavebeendepositedtothe
accountinerror,or
3.Toremovefees,charges,orothersuchamountsthat
aredepositedonatemporarybasisintheaccount,or
4.Toclearandterminatetheaccount.
TheServicershouldnotusetheP&ICustodialAccount
asacollectionclearingaccount,butestablishaseparate
accountforthispurpose.Refertothediscussionof
clearingaccountsinSection303.03.
303.02TaxesandInsuranceCustodial
Account
TheServicermustdepositallcollectionsoftaxes,
assessments,groundrents,insurancepremiumsand
comparableitemstotheT&ICustodialAccount.The
Servicerisresponsibleforensuringthattheaccountis
maintainedandadministeredinaccordancewith
applicablestateandfederallawsandregulations.The
Servicerwillbesolelyresponsibleforpaymentofany
interestduetothemortgagor.Withdrawalsmaybemade
onlytoeffectthetimelypaymentofborrowerstaxes
andinsurancepremiums,torefundborrowersurpluses,
torecoverservicingadvancesandcomparableitems,to
removeanyamountsdepositedinerror,andtoclearand
terminatetheaccount.
Atleastannually,theServicermustcomputethe
requiredescrowpaymentsbasedonreasonable
estimatesorassessmentsandbillstodeterminethat
sufficientfundsarebeingcollectedtomeetallescrow
payments.IftheamountheldintheT&ICustodial
AccountbytheServicer,togetherwiththefuture
monthlyinstallmentsofescrowpayments,exceedsthe
amountrequiredtopaychargesastheybecomedue,plus
anycushionpermittedunderapplicablelawand
regulation,theServicermusteitherrepaytheexcess
promptlytotheborrowerorcredittheexcesstothe
borrowerbyareductioninmonthlyescrowpayments.
IftheamountheldintheT&ICustodialAccountbythe
Servicerisdeemedinsufficienttopaychargeswhendue,
theServicershouldobtainthenecessaryadditionalfunds
fromtheborrowerbeforethelatestdateonwhichthe
chargesmaybepaidpriortopenalty,lapseofinsurance
policies,etc.Iftheborrowerfailstoremitthedeficient
amount,orifthereisinsufficienttimetoobtainthe
amount,theServicermustpayanychargesdueand
reflecttheshortageintheborrowersT&ICustodial
Account.
Theaccountistobedesignatedinthenameofthe
Serviceractingasanagentforborrowerpaymentsin
ordertoshowthattheaccountiscustodialinnature.
Theaccountdesignationmustbe:
TaxesandInsuranceCustodialAccountforWMMSC,
itssuccessorsandassignsforvariousmortgagorsand/or
variousownersofinterestsintheBuyermortgage
backedpools.
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TheServicermustmaintainrecordsidentifyingeach
borrowerspaymentandtheaccountintowhicheach
paymentisdeposited.
303.03ClearingAccounts
IfthesystemsandproceduresoftheServicerrequirethe
useofclearingaccounts,theseaccountsshouldbe
governedbythefollowingconditions:
1.Thetitlesofsuchaccountsmustreflectthattheyare
custodialinnatureandthedepositoryinwhichthe
accountsaremaintainedmustbeinformedinwriting
thattheyareCustodialAccounts.
2.AcheckdrawnontheP&IorT&ICustodial
Accountmustbedepositedtoadisbursement
clearingaccountbeforeoratthesametimeasany
checksontheclearingaccountareissued.
3.Asingleclearingaccountmustnotbeusedasbotha
collectionandadisbursementclearingaccount.
4.TheServicermustmaintainadequaterecordsand
audittrailstosupportallcreditstoandchargesfrom
theborrowerspaymentrecordsandaccounts.
5.TheServicermustdeposititsservicingfeesintoa
separateaccount.
6.Collectionsdepositedtoadepositoryclearing
accountmustbecreditedtotheappropriate
CustodialAccountnolaterthanthefirstbusiness
dayfollowingtheirreceiptbytheServicer.
303.04InterestBearingAccounts
TheServicermayuseaninterestbearingaccountasits
T&ICustodialAccountprovidedthattherequirements
specifiedfortheestablishmentandmaintenanceofthe
T&ICustodialAccountsetforthaboveandthe
requirementslistedbelowaremet:
1.Theaccountcomplieswithalllocal,stateand
federallawsandregulationsgoverningborrowers
escrowaccountsandinterestbearingaccounts,
2.TheServicerensuresthatallinterestpaidorcredited
totheaccountthatisnotsubsequentlycreditedtoor
paidtotheborrowerswillberemovedfromthe
accountwithin30daysofreceiptofsuchinterest,
3.TheServiceragreesthatundernocircumstanceswill
itasktheBuyertoadvancefundsforthepaymentof
taxes,insurancepremiumsorcomparableitems
becausetheescrowfundsareheldinanaccountnot
withdrawableondemandandaretherefore
unavailable,and
4.TheServicerwillcomply,atitsownexpense,with
allapplicablelaws,regulationsandcontracts
requiringpaymentofinterestonborrowersescrow
accounts.
303.05PrepaymentFees
Ifthenoteorsecurityinstrumentexecutedinconnection
withamortgageloanrequiresthattheborrowerpayafee
orotherchargeintheeventthatallorpartofthe
outstandingprincipalbalanceofthemortgageloanis
prepaidpriortoitsscheduledduedate,theServicermust
collectsuchfeeorotherchargefromtheborrowerin
accordancewiththetermsofthenoteandsecurity
instrument,providedthatcollectionofsuchamountsis
permittedunderapplicablestateandfederallaw.
PrepaymentfeesmustbedepositedintheP&ICustodial
Accountwithin24hoursofreceiptandremittedtothe
Buyeralongwithacopyofthenote,rider,and
addendumsrelatedtotheloan,atthetimetherelated
prepaymentproceedsareremittedtotheBuyer.
PrepaymentfeescollectedbytheServicermustbe
properlyreflectedontheRemittanceReconciliation
(WMMSC4010),CurtailmentsandPrepaidInstallments
Report(WMMSC4007),aswellastheCollection
Report(WMMSC4008)fortheapplicablecollection
period(comparablesystemgeneratedreportsare
acceptable).
Ifanyprepaymentfeesareremittedinerror,arequestfor
arefundmustbecompletedinwritingwithin30daysof
thefundsbeingreceivedbytheBuyer.Acopyofthe
note,rider,andaddendummustbeprovidedwiththis
request.Thesefundsmaynotberecapturedbythe
Servicerbyloweringanyfutureremittances.
303.06Buydownfunds
Allfundsforthepaymentofprincipaland/orinterestthat
arereceivedbytheServicerintheformofbuydown
fundswillbeheldintrustbytheServiceranddeposited
toeithertheP&ICustodialAccountortoaseparate
buydowncustodialaccount.
Dependingonhowthebuydownfundiscalculated,the
fundsmustbedepositedasfollows:
Presentvaluediscountedbuydownfunds:The
Servicermustdepositbuydownfundsinaninterest
bearingcustodialaccountthathasbeenestablished
exclusivelyforthosefunds.Therateofinterest
earnedonthisaccountmustbeequaltothediscount
rateusedtocalculatetheoriginalvalueofthe
buydownfunds.
Fullvaluebuydownfunds:TheServicermay
depositbuydownfundsineithertheP&ICustodial
Accountorinaseparatecustodialaccountfor
buydownfunds.
Neithercustodialaccountmaybeinterestbearing.
TheServicerisresponsibleforaccuratelyaccountingfor
allbuydownfunds.Individualrecordsmustbe
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maintainedforeachbuydownloanandforeachBuyer
pool.Theserecordsmustclearlyidentifythemonthly
principalandinterestamountduefromtheborrower,the
monthlyamountofbuydownfundsandmustbebalanced
totheappropriatecustodialaccounteachmonth.
A.BuydownCustodialAccount
Ifaseparatebuydowncustodialaccountisestablished,
theaccountmustclearlyshowtherespectiveinterestsof
theServicerastrusteeandoftheBuyerasfollows:
BuydownCustodialAccountforWMMSCitssuccessors
andassignsforvariousmortgagesand/ormortgage
backedpools.
Inaddition,theServicermust,bythe20thcalendarday
ofeachmonth,transferthecorrectamountofbuydown
fundstotheP&ICustodialAccount.TheBuyerwillnot
withdrawfundsdirectlyfromabuydowncustodial
account.IftheServicerfailstotransferthefundsbythe
20thdayofeachmonth,anoverdraftmayresultinthe
P&ICustodialAccount.
B.BuydownFundsinP&ICustodial
Account
IfbuydownfundsareheldintheP&ICustodialAccount,
theServicermustensurethatthebuydownfundsare
appliedonlyasspecifiedinatemporarybuydown
agreement.Thebuydownfundsmaynotbeusedtopay
anypastduepayments,reinstatealoan,orcureany
default.Inthecaseofanadvanceofprincipaland
interest,theadvancemustnotbetakenfromthe
buydownfundswithintheP&ICustodialAccount.
303.07LetterAgreementsand
ACHDebitAuthorization
Theappropriatecustodialaccountformsmustbeonfile
withtheBuyerbeforeanyloansarepurchased.Ifthese
formsarenotonfilewithusbeforeascheduledpurchase
date,theBuyerreservestherighttosuspendpurchase
untilthecompletedformsarereceived.However,if
noneoftheloansbeingpurchasedissubjecttoa
buydownplan,theBuydownCustodialAccountLetter
Agreementisnotrequired.Thecustodialaccountforms
are:
1.PrincipalandInterestCustodialAccountLetter
Agreement(WMMSC4002)
2.TaxesandInsuranceCustodialAccountLetter
Agreement(WMMSC4004)
3.BuydownCustodialAccountLetterAgreement
(WMMSC4014)
4.ACHDebitAuthorization(WMMSC4006)
NOTE:ServicersnotinsuredbytheFDICmust
alwaysestablishandmaintainCustodial
AccountsforWMMSC,atanoutside
depositoryinsuredbytheFDIC.
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Section304.LoanAccounting
304.01AmortizationMethod
Allloanswillamortizewithinterestinarrearsreducing
theprincipalbalancetozeroattheendoftheterm.Each
loanmustberepayableinequalmonthlyinstallments,
exceptforthelastinstallment,basedona30day
month/360dayyear.Interestinadvanceisnever
permitted.Inaddition,onlyfullpaymentsofinterestand
principalmaybeappliedandcapitalizationisnot
allowed.Duedatesmayonlybethefirstdayofthe
month.Oddduedateloansareacceptedonanexception
basis.ContactaLoanAccountingSpecialistinthe
ServicerAccountingDepartmentforreporting
requirements.
304.02ApplicationofPayments
Paymentsreceivedfromaborrowerwillordinarily
consistofinterest,principal,depositsforinsurance,
taxes,andrelatedcharges,andlatecharges.
Accordingly,paymentsreceivedfromtheborrowermust
beappliedbytheServicerinthefollowingorder:
1.Escrowdepositsforinsurance,taxes,etc.
2.Interestontheloan
3.Principalontheloan
4.LatechargeandanyotherfeesduetotheServicer
Whenthefullamountofapaymentisnotreceived,the
followingprocedureshouldbefollowed:
1.Ifthedeficiencyintherequiredinstallment
(principal,interest,taxesandinsurance)is$25or
less,theamountappliedtotheborrowersescrow
accountshouldbereduced,or
2.Ifthedeficiencyexceeds$25oriftheborrowerhas
noescrowaccount,theServicermayreturnthe
partialpaymentordeposititintheP&ICustodial
Accountuntilsufficientfundsarereceived.
Wheneverdeficienciesaretreatedasunapplied
payments,thefundsmustbeheldintheP&ICustodial
Accountasunapplieduntilsufficientfundshavebeen
receivedtocompletethefullinstallment.Underno
circumstancesshouldtheprincipalorinterestbeshorted
fortheamountofthedeficiency.Shortpaymentsthat
aredepositedintosuspenseaccountsshouldbeproperly
accountedforandappearontheborrowerspayment
history.
A.TemporaryBuydownFunds
Aloanwithatemporarybuydownmustbeamortizedat
thenoteinterestrate,notattheboughtdowninterest
rate.Thiswillensurethatpaymentsarecollectedto
properlyamortizetheloan.
TheServicermustholdanybuydownfundsintrustand
mustapplythesefundstowardthepaymentofthe
scheduledmonthlyinterestdueonthenoteonlyupon
receiptoftheremainderofthemonthlypaymentfrom
theborrower.Thebuydownfundsmaynotbeusedto
payanypastduepayments,reinstatetheloan,orcure
anydefault.
Iftheloanispaidinfull,theremainingbuydownfunds
willbecreditedtotheoutstandingbalanceatliquidation.
Ifthepropertyissoldasaresultofforeclosure,the
remainingbuydownfundswillbecreditedtothe
outstandingprincipalbalanceatthetimeofsale.In
eithercase,ifapplicable,thefundswillbediscountedto
apresentvalueattheoriginaldiscountpercentage.
Ifthepropertyissoldandtheloanisassumedbythe
purchaser,thebuydownfundswillcontinuetobeapplied
toreducethemortgagepaymentundertheoriginalterms
ofthebuydownplan.
B.Curtailments
Acurtailmentisanyapplicationofadditionalprincipal
whichdoesnotreducetheunpaidprincipalbalanceto
zero.TheServicermayacceptandapplyacurtailment
toreducetheprincipalbalanceonlyiftheloaniscurrent.
Ifacurtailmentisreceivedwhilealoanisnotcurrent,
andthefundsreceivedareinsufficienttobringtheloan
current,thefundsmustbedepositedintotheP&I
CustodialAccountuntiltheloanisbroughtcurrent.
Fordelinquentloans,ifthefundsaresufficienttocover
anypastdueamounts,thefundsmustbeusedtobring
theloancurrent.Anyfundsremainingaftertheloanis
currentmaybeappliedbytheServicerasanadditional
paymentofprincipal.
Fundsreceivedinconsiderationofapartialreleaseof
securitymustbeappliedtotheoutstandingprincipal
balance,andonlyafterapprovalhasbeenreceivedfrom
theBuyer.Fundsreceivedwhenpartofthepropertyis
takenbyeminentdomainmustbeappliedtothe
outstandingprincipalbalanceunlesstheServicer
recommends,andtheBuyerapproves,otherapplication
ofthefunds.
ApprovalmustbeobtainedfromBuyerforany
modificationsthatreducethemonthlypaymentdueto
applicationofacurtailment.
Curtailmentsandprepaidcurtailmentsmustbereported
totheBuyerseparatelyon,orinaformatsimilarto,the
CurtailmentsandPrepaidInstallmentsReport(WMMSC
4007).
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C.CurtailmentAdjustments
Ifacurtailmentismadewithrespecttoamortgageloan,
theprincipalbalanceofthemortgageloanmustbe
reducedtobeanamountequalto1/12oftheproductof
(i)thecurtailmentand(ii)theapplicablenoterate.
Ifacurtailmentisappliedtoaloanthatismorethanone
monthprepaidthecurtailmentadjustmentisapplied
raisingthescheduleUPB,tocorrectlyamortizetheloan.
D.Liquidations
Aliquidationistheapplicationofapaymenttoaloan
whichreducestheunpaidprincipalbalancetozero.
Interestshouldbecalculatedona365dayperdiembasis
inthemonthofliquidation.
LiquidationproceedsmustbedepositedtotheP&I
CustodialAccountwithin24hoursofreceipt.The
Servicermustreportliquidationson,orinasimilar
formatto,theLiquidationSchedule(WMMSC4009)
whichmustbereceivedbytheBuyerwithin48hoursof
thedeposit.
TheServicermustremitliquidationfundswithin48
hoursofreceipttotheBuyersaccount.Theremittance
amountmustagreetotheLiquidationSchedule
(WMMSC4009).
TheServicermustalsocompleteandsendaReleaseof
Mortgageform.TheReleasemustbesubmittedina
timelymanner,andanypenaltiesfordelaysinrecording
willbetheresponsibilityoftheServicer.TheRelease
shouldconformtotheonenormallyusedinthestatein
whichthemortgagedpropertyislocated.Anyspecial
requirementsforthatstateshouldbenotedbythe
Servicerforourinformation.
304.03Advances
A.DelinquencyAdvances
IfamountsdepositedintotheServicersP&ICustodial
Accountareinsufficienttocovertheamountduetothe
BuyerontheACHwithdrawaldate,theServicermust
advanceitsownfundswithrespecttodelinquentand
foreclosedloansandREOproperties.Iftheamounton
depositintheP&ICustodialAccountforanyonepool
onthedayimmediatelyprecedingthewithdrawaldateis
lessthantheamountofthemonthlywithdrawaldue,the
ServicermusthaveondepositintheP&ICustodial
Accountanamountequaltothemonthlywithdrawal.
TheamountadvancedbytheServicermustbeequalto
theprincipalamountplusinterestatthenetrateforthe
applicablepaymentcycleofthedelinquentloan(s).
TheServicermayreimburseitselfforadvancesfrom
collectionofpaymentsfromtheborrower.Monthly
principalandinterestadvancesarenotexpectedto
becomeanexpensetotheServicer.SeeSection207for
afurtherdiscussionofacquiredproperties.
B.ServicingExpenses
Foreachloan,theServicermustadvanceallservicing
costsandexpensesastheyoccur,subjecttoprior
approvalfromtheBuyerwhenrequired.Theseexpenses
mayincludethecostof:
Thepreservation,repairsandprotectionofthe
property,
Anyenforcementofthenoteandsecurity
instrument,includingforeclosures,
Themanagementandliquidationofthepropertyifit
isacquiredinsatisfactionoftheloan,and
Advancesfortaxandinsurance.
C.ReimbursementofExpenses
Expensesmayberecoveredfromtheborrowerupon
reinstatementfromtheforeclosure.Innocasemaythe
Servicerrecoverexpensesfromtheprincipalandinterest
paymentsonanotherloanorfromanotherborrowers
escrowaccount.
TheServicermustcompleteandsubmitaStatementof
Expenses(WMMSC3001)within30daysoffinal
dispositionoftheproperty.RefertoSection207.07C
forfurtherdetails.Copiesofpaidreceiptsorcanceled
checksmustbeincludedforeachitemlistedonthe
StatementofExpenses.Inlieuofreceiptsfortaxand
insurancedisbursements,theBuyerwillacceptcertified
copiesofloanhistorieshighlightingsuchdisbursements.
304.04AdjustableRateLoans
A.InterestorPaymentAdjustments
TheServicermustenforceeachadjustableratemortgage
accordingtoitsterms.Thisincludesmakingperiodic
interestrateandpaymentadjustmentsasspecifiedbythe
note.TheServicermustestablishprocedurestomonitor
theapplicableindexandtosendandreceivenoticesto
andfromtheborrowerinordertoensurethatthe
Servicerusesthelatestavailablevaluefortheindexin
determininganinterestratechangeandthatadjustments
totheinterestratearecorrectlymadeinatimelyfashion.
Thenewmonthlyprincipalandinterestpaymentmustbe
sufficienttofullyamortizetheprincipalbalanceasofthe
adjustmentdateoverthethenremainingtermofthenote
attheadjustedloanrate,unlessotherwisestatedinthe
note.
IftheServicersfailuretoproperlymakeascheduled
interestrateorpaymentadjustmentaffectstheBuyers
3042
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abilitytomakefutureadjustmentsunderthenote,
repurchasemayberequired.TheServicershall
indemnifyandholdtheBuyerharmlessagainstany
losses,claims,liabilities,andexpenses(including
attorneysfees)incurredbytheBuyerasaresultofthe
failuretoproperlyadjusttheinterestrateorpayment
amountofanyloanservicedhereunder.
B.ARMIndices
IndicespublishedintheFederalReserveBulletinH.15
(519)areconsidered,forthepurposesofinterestrate
adjustment,tobeineffectonthedateofrelease.
C.RequiredNoticestoBuyer
Thenewinterestrateand/orthenewprincipaland
interestconstantmustbereportedforadjustablerate
loanstwo(2)monthsbeforethenewpaymentamountis
effective.Forexample,iftheborrowersinterestrateis
scheduledtochangeonJanuary1and/orapayment
changeiseffectiveFebruary1,thenewloaninterestrate
andthenewprincipalandinterestpaymentwillbe
reportedtotheBuyerattheaccountingcycleperiodthat
endsDecember31.
D.NoticestoBorrowers
TheServicermustnotifytheborrowerbeforethe
effectivedateofanychangeintheprincipalandinterest
constant.Thenoticeofpaymentchangeshouldalways
bemailed,incompliancewiththemortgagedocuments,
beforethenewprincipalandinterestpaymentbecomes
effective.Allnoticesmustincludethename,titleand
telephonenumberofapersonwhowillbeabletoanswer
anyinquiriestheborrowermayhaveaboutthenotice
andmustconformtoacceptedservicingpracticesandall
applicablelaws.
E.PrepaidInstallments
Prepaidinstallmentsshouldnotbeacceptedpriortothe
interestrateorpaymentchangeofanadjustablerate
loan.TheServicerisrequiredtosuspendprepaid
installmentsuntilthenewinterestrateand/orP&I
constantisknown.OncethenewP&Iconstantis
determined,theServicershouldapplytheprepaid
installment.Anyexcessshouldberefundedtothe
borrowerordepositedtotheescrowaccount.Any
shortagesmustbecollectedfromtheborroweror
advancedbytheServicerbeforetheprepaidinstallment
isapplied,andreported.
F.DelinquentInstallments
Ifanadjustablerateloanisdelinquent,inforeclosure,or
inREOstatusandisscheduledforaninterestchangeor
paymentchange,theServicermusttrackanychangeon
itsaccountingrecordsandreportthisinformationtothe
4013)orequivalentform.TheServicermustnotifythe
borrowerofanypaymentchangeevenwhentheloanis
delinquentorinforeclosure,followingthesame
proceduresasforacurrentloan.
G.DelinquencyAdvances
Foradjustablerateloans,theamountsadvancedmonthly
fordelinquentprincipalandinterestmustreflectany
changesintheinterestrateandmonthlypayment
amount.
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Section305.ReportingtoWMMSC
TheServicerisrequiredtoreportcertaincompliance
itemsandaccountingreportseachmonthontheactivity
andstatusofloanspurchasedbytheBuyer,beginning
withthemonthofpurchase.Servicersmaychooseany
ofthefollowingmediaforreportingpurposes:
hardcopy(paper)
electronicfilesentviaemail
otherelectronicmedia(e.g.,magnetictape,disk)
Themethodchosenshouldbebasedonloanservicing
volume,andimplementationmustbecoordinated
throughtheBuyersServicerAccountingandIT
Departments.Servicersarerequiredtoreport
electronicallyforeachWMMSCassignedservicer
numberthatcontains100ormoreloans.Regardlessof
themediausedforreportingpurposes,theformatmust
meettheBuyerrequirements.RefertoAppendixEfor
completedetails.
305.01MonthlyReportingPackage
TheServicermustsubmitmonthlyconsolidated
accountingreportsforallloansservicedintheWMMSC
assignedservicernumber.
Themonthlyaccountingpackagemustbereceivedby
theBuyernolaterthan5:00PMEDTonthefifth
businessdayofeachmonth,beginningthemonth
followingthepurchaseoftheloans.
Themonthlyaccountingcycleisacalendarmonthand
beginswiththemonthofpurchase.
Themonthlycollectionactivityisreportedonanactual
loandetailbasiswithremittancesmadeonascheduled
basis.Themonthlyaccountingpackagemustcontainthe
followingtypesofreportsorbeinanautomatedformat:
1.RemittanceReconciliation(WMMSC4010).This
reportreconcilesallP&ICustodialAccountactivity
forthepreviousmonthatServicerlevel.
2.AnalysisofCustodialAccounts(WMMSC4011).
ThisreportreconcilesallT&ICustodialAccount
activityatServicerlevel.
3.CurtailmentsandPrepaidInstallmentsReport
(WMMSC4007).Thisreportmustbecompleted
andsubmittedwheneveradditionalprincipalisap
pliedtoaloan.Prepaidinstallmentsmustbe
reportedseparatelyfromcurtailments.Acurtailment
isanyapplicationofadditionalprincipalwhichdoes
notreducetheunpaidprincipalbalancetozero.
Curtailmentsarepermittedonlywhentheloanis
current.Prepaidinstallmentsarepaymentsreceived
priortothescheduledduedate.
4.CollectionReport(WMMSC4008).Thisreport
mustincludepaymentscollectedonallloans
includingthose30ormoredaysdelinquentasofthe
endofthepreviousmonth.
5.ATrialBalanceReport(WMMSC4018)
6.DelinquencyReport(WMMSC3002)Referto
Section205.01(B)
7.NewLoansReport(WMMSC4017)
8.CopyoftheLiquidationSchedule(WMMSC4009)
RefertoSection304.02(D)
9.Loanhistoriesasrequested
Inadditiontotheabovementionedaccountingpackage,
the
Buyer
also
requires
a
Foreclosure
Recommendation/Individual
Delinquency
Report
(WMMSC3003)bythefifthbusinessdayofthemonth.
AsdetailedinSection205,theBuyerrequiresmonthly
responsestoExceptionTurnaroundReportsand
ExcessiveDelinquencyNotificationLetterswithinstated
timeframes.
TheServicerisalsorequiredtodiscloseanyinstancesof
materialdefaultunderRegulationAB17CFR229.1100
1123,withrespecttotheservicingofanymortgage
loans.TheServicermustdiscloseanyinstanceof
materialdefaultinthemonthsuchdefaulthasbeen
deemedtobematerial,alongwitharecommendationto
theBuyerforcorrectingthematerialdefault.
A.PenaltiesforLateSubmissionofReports
AServicerthatfailstoprovideaccurateaccountingand
servicingreportswithinthetimeframerequiredviolates
itsresponsibilitiesandissubjecttothefollowing
remedies:
1.Forthefirstlatereportingoffenseinany
consecutive12monthperiod,awarningletteris
senttothemanagingofficeroftheinstitution,witha
copytotheaccountingdepartment;
2.Forthesecondlatereportingoffenseinany
consecutive12monthperiod,theServiceris
chargeda$250latereportingfee,perreport;
3.Forthethirdlatereportingoffenseinany
consecutive12monthperiod,theServiceris
chargeda$500latereportingfee,perreport;
4.Forthefourthlatereportingoffenseinany
consecutive12monthperiod,theServicerwillbe
terminatedforcause.
Inaccurateorincompletereportswillbeconsideredthe
sameaslatereportingforthepurposeofassessing
penalties.
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TheBuyerreservestherighttochangethelatereporting
feeandallotherremediesatanytime,atitssole
discretion.
305.02ReportingLiquidations
ALiquidationSchedule(WMMSC4009)mustbe
submittedwhenevertheprincipalbalanceofaloanis
reducedtozero.Oneformissubmittedforeachloan
liquidated.Theoriginalformmustbereceivedbythe
Buyerwithin48hoursofpayoffandbeimmediately
followedby:
1.StatementofLoanPaidinFull/RequestforRelease
ofMortgageDocuments(WMMSC4019)
2.Legaldocumentconveying,releasingorsatisfying
lien
IfcircumstancespreventtheServicerfromprovidingthe
conveyancedocumentwithinfive(5)businessdays,the
liquidationpackageshouldnotbeheldup.Atthetime
thereleasedocumentissubmitted,theServicermust
haveacoverletterattachedadvisingthedatethe
liquidationpackagewassentandprovidetheBuyer
loannumber.
Eachtimealoanispaidinfull,orotherwiseliquidated,
thefundsmustbedepositedtotheP&ICustodial
Accountwithin24hoursaftertheyarereceived.The
Servicermustremitliquidationfundswithin48hoursof
receipttotheBuyersaccount.Theremittanceamount
mustagreetotheLiquidationSchedule(WMMSC
4009).RefertoAppendixBforwireinstructionswhen
remittingliquidationfunds.
FailuretoremitfundstotheBuyerwithinthesetime
frameswillresultinapenaltyassessedtotheServicerat
adailyrateequaltothegreaterof1)thehighestprime
ratequotedintheWallStreetJournalregularcolumn
entitledMoneyRateonthefirstbusinessdayofeach
month,plustwo(2.0%)percent,or2)thenoterateofthe
liquidatingloan.Iftheprimerateisnotpublished,the
ratetobechargedwillbedeterminedbytheBuyer.
Thereisaminimumchargeof$50.00onallpenalties
assessed.
305.03Monthly
Reporting
and
RemittanceSummary
TheBuyerwilldebittheP&ICustodialAccountviathe
ACHnetworkonthe20thcalendardayofeachmonthor
ontheprecedingbusinessdayifthe20thcalendarday
fallsonaweekendorholiday.Thesewithdrawalsbegin
inthemonthfollowingthemonthofpurchaseofaloan.
TheBuyerwillsendaNoticeofAutomaticWithdrawal
totheServicerwithintwobusinessdaysprecedingthe
withdrawaldate.ThisnoticewillenabletheServicerto
determineifsufficientfundsareavailableinaP&I
CustodialAccountandtomakeanynecessaryadvances.
IftheServicerdoesnotreceiveaNoticeofAutomatic
Withdrawal,theServicermustcontacttheBuyerto
obtaintheinformation.TheServicerisresponsiblefor
assuringthatsufficientfundsareavailablefor
withdrawal.
ForeachServicer,theNoticeofAutomaticWithdrawal
andtheactualdebitwillconsistof:
Thetotalof(1)theaggregatescheduledinterest
portions(whetherornotcollected)ofthemonthly
installmentsdueonthefirstdayofthemonthin
whichthewithdrawaldateoccurs(thisamountis
equaltoonemonthsinterestcalculatedatthenet
rate)andthetotalofanyadjustmentsaffectingthe
aggregatescheduleofprincipal,and(2)the
aggregateunscheduledinterestcollectedonloansin
thepoolduringthemonthbeforethemonthinwhich
awithdrawaldateoccurs.
Thetotalof(1)theaggregatescheduledprincipal
portions(whetherornotcollected)ofthemonthly
installmentsdueonthefirstdayofthemonthin
whichthewithdrawaldateoccursandthetotalof
anyadjustmentsaffectingtheaggregatescheduleof
interest,and(2)theaggregateunscheduledprincipal
collectedonloansinthepoolthemonthbeforethe
monthinwhichawithdrawaldateoccurs.
Lesstheaggregatefundspreviouslywiretransferred
totheBuyeronliquidationsandinterimremittances.
Thetablebelowsummarizesthemonthlyaccounting
activities,includingtheServicersreporting
responsibilities,fromthepurchasedatethroughthedate
ofthefirstprincipalandinterestwithdrawal.The
exampledatesshowwhatwouldactuallyhaveoccurred
ifthesalehadbeentransactedonNovember15,2002.
Reporting
Responsibility
Time
Line
Example
Date
TheBuyerpurchasesloans
andforwardsthePurchase
AdvicetotheServicer.
Friday
11/15/02
TheServicersfirstcutoff
date.
Endofthe
month
11/30/02
TheBuyerreceivesthe
Servicers
monthly
accountingpackage.
5thbusiness
day
12/06/02
TheServicerreceivesthe
Notice
of
Automatic
WithdrawalfromtheBuyer.
Two
business
daysbefore
withdrawal
12/18/02
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TheServicerreviewsthe
P&ICustodialAccountto
ensurethatsufficientfunds,
pertheNoticeofAutomatic
Withdrawal,aredeposited.
One
businessday
before
withdrawal
12/19/02
TheBuyerwithdrawsthe
totalamountdue,perthe
Notice
of
Automatic
Withdrawal,fromtheP&I
CustodialAccountviaan
ACHtransaction.
20th
calendarday
orpreceding
businessday
12/20/02
NOTE:
Noticeofanyliquidationandliquidation
fundsmustbereceivedbyWMMSConthe
LiquidationSchedule(WMMSC4009)within
48hoursofreceiptoffunds.
A.MonthlyAccountingPackage
Ifthemonthlyaccountingpackageisnotsubmitted
accuratelyandontime,theBuyermaynotbeableto
processtheunscheduledactivitytotheloansbeforethe
closeofthecurrentcycle.Thiscouldresultina
differencebetweentheamountdraftedpertheNoticeof
AutomaticWithdrawalandtheremittanceamount
calculatedbytheServicer.Ifthisshouldoccur,the
unscheduledactivitywillbeappliedtotheloaninthe
followingcycle.ItistheServicersresponsibilityto
ensurethattheBuyerreceivesanaccuratemonthly
accountingpackagebytherequiredduedatetoavoid
loanleveldiscrepancies.Anyresultinginterest
differenceswillbechargedtotheServicer.
B.AdjustableRateMortgages
IftheARMAdjustmentsReport(WMMSC4013)isnot
submittedaccuratelyandontime,theBuyerwillmake
certainassumptionsregardingthecurrentinterestrate
andmonthlypaymentadjustmentforallARMloansdue
toadjustinthegivenmonth.TheNoticeofAutomatic
Withdrawalwillreflecttheseassumptions.Ifour
assumptionsareincorrect,ourwithdrawalcouldresultin
anoverdraftoftheServicersP&ICustodialAccount.It
istheServicersresponsibilitytoensurethattheBuyer
receivestheARMAdjustmentsReportonatimelybasis
toavoidsuchincorrectwithdrawals.
C.BalloonResets
ForBalloonResetMortgageswithresetoptionsthe
borrowermayresettoamodifiedfixedrate/ARMloan
dependingontheoriginalballoonnote.Mostofthe
jumboballoonloansresetintoanARMforanadditional
30years(40yearstotal).Inmostcases,5,7,and10year
balloonloanshaveanoptiontoresetintoafixedrate,
fullyamortizingpaymentfortheremainderofthe30
years.
ItistheServicersresponsibilitytonotifytheborrower
atleast60calendardaysinadvanceoftheballoon
maturitydate.TheServicermustalsodelivertothe
borroweradescriptionofthehistoricalperformanceof
theapplicableindexandthemaximuminterestrate,
whichmaybedueunderthemodification.Theborrower
mustprovideacceptableproofofoccupancy.Atthetime
oftheballoonresetthenoteholdermustremaininfirst
lienstatus.Overallcapsandfloorsarestatedinthe
originalballoonnote.
OncetheServicerhasreceivedtheborrowersnoticeof
intenttoresetornot,theBuyershouldbenotifiedofthe
interestonlypaymentforthematuritymonthifresetting
ortheintenttopayinfullatthematuritydate.Inmost
casestheballoonresetshouldbecompletedpriortothe
maturitydateoftheballoon.Uponcompletionofthe
balloonreset,theBuyershouldbeprovidedacompleted
copyoftheballoonmodificationdocuments.
D.RecastModification
TheServicermustgetpriorapprovalfromtheBuyerfor
arecastofthemonthlyprincipalandinterestpayment
followingtheborrowerspaymentofasubstantial
curtailment.Neithertheinterestratenorthematurity
datemaybealtered.Whenrequestingapproval,the
ServicershouldprovidetheBuyerwiththefollowing
information:loannumber,borrowersnameandaddress
ofproperty,amountofcurtailment,newprincipaland
interestpayment,andtheeffectivedateofpayment.
AfterobtainingBuyersapproval,theServicerwill
preparetheModificationAgreementandmailtothe
borrower.Theborrowerwillcompleteandsignthe
ModificationAgreementandmailitbacktotheServicer.
TheServicerwillthenfaxacopyofthecompleted
ModificationtotheBuyer,whichmustbereceived30
dayspriortotheeffectivedateofthenewprincipaland
interestpayment.Ifnotreceivedwithin30days,the
changewillnotbecomeeffectiveuntilthenextcycleand
theServicerwillberesponsibleforthedifferencein
remittance.
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Section401.Representations,WarrantiesandObligations
ofServicer
Alloftherepresentations,warrantiesandobligations
containedinthisServicerGuidearemadebythe
Servicerastoeachmortgageservicedonbehalfofthe
Buyer,unlessexpresslywaivedinwritingbytheBuyer.
Allofsaidrepresentations,warrantiesandobligations
madebytheServiceraremadeandgiventotheBuyer
withknowledgethattheBuyerreliesuponsuch
representation,warrantiesandobligationsascontinuing
considerationforallowingtheServicertoretainthe
servicingrightstoeachmortgageservicedfortheBuyer.
TheServicermakessuchrepresentationsandwarranties
andagreestosuchobligationswithspecificknowledge
thattheBuyerintendstoselleachmortgagetothird
partiesinrelianceupontheServicersrepresentations,
warrantiesandobligations.Allrepresentations,
warranties,andobligationsoftheServicershallsurvive
anyinvestigationmadebyoronbehalfoftheBuyer,its
assigneeordesignee,liquidationofthemortgage,
purchaseoftheloanbytheBuyer,itsdesigneeor
assignee,repurchaseofthemortgageorproperty,
terminationoftheSellingandServicingAgreement,or
othersimilareventortransferorsaleofservicing,andall
suchrepresentations,warranties,andobligationsshall
inuretothebenefitoftheBuyer,itssuccessorsand
assigns.
Unlessotherwisespecified,therepresentationsand
warrantiescontainedinthisServicerGuidearemade
withrespecttoeachmortgageasofthedateofdelivery
totheBuyerofanyoralorwrittenreportorremittance
relatedthereto.
401.01General
A.QualificationandAuthorization
TheServicerisdulyqualified,licensed,registered,and
otherwiseauthorizedunderallapplicablefederal,state
andlocallawsandregulationstoserviceandenforce
loansonbehalfoftheBuyerinthejurisdictionwherethe
propertiessecuringsuchloansarelocatedandshall
maintainsuchqualifications,licenses,registrationsand
authorizationsduringthetermoftheSellingand
ServicingAgreement.TheServicerisdulyauthorizedto
execute,deliverandperformitsobligationsunderthe
SellingandServicingAgreement,andsuchSellingand
ServicingAgreement(includingthematerial
incorporatedbyreferencetherein)isavalidandbinding
obligationoftheServicerenforceableinaccordancewith
itsterms.
B.WMMSCForms
TheServicerhascompletedandtransmittedallrequired
reportstotheBuyerinthetimeframestatedinthis
ServicerGuide,inaccordancewiththeinstructions
providedbytheBuyer.
C.UseofBuyersName
TheServicerwarrantsthatitwillconfineitsuseofthe
WMMSCnametothoseusesspecificallyauthorizedby
theBuyerintheServicerGuide.
D.InspectionofRecords
TheServicershallallowtheBuyer,oritsagentor
designee,duringnormalbusinesshours,toinspectall
booksandrecordsoftheServicerpertainingtoits
mortgageoperationsandtoanyloansservicedonbehalf
oftheBuyer.
E.CompliancewithSellingandServicing
AgreementandServicerGuide
Servicerhascompliedandwillcomplywithallthe
terms,conditionsandrequirementsoftheSellingand
ServicingAgreementincludingthisServicerGuideas
suchshallbeamendedduringthetimeloansareserviced
onbehalfoftheBuyer.
F.NormalServicingProceduresApplied
TheServicersservicingofloansonbehalfoftheBuyer
isinaccordancewiththestandardsappliedtothe
Servicersoverallloanservicingportfolio,without
discriminationinanymanneragainstloansservicedon
behalfoftheBuyerandinanyeventshallbeconsistent
withtheservicingpracticesofloanservicersingood
standingintheindustry.
G.NoDisqualificationorSuspension
TheServicerrepresentsandwarrantsthatitssellingor
servicingrightsorprivilegeshavenotbeensuspendedor
terminatedbyanyotherinstitutionorgovernment
agency(including,butnotlimitedtoFHA,FNMA,
FHLMC,orGNMA)andshallpromptlynotifytheBuyer
inwritingbycertifiedmailofsuchsuspensionor
termination.
H.IntegrityofCustodialAccounts
Thecustodialaccountsestablishedhereunderaredemand
accountswhichhavenotbeenpledgedorencumberedin
anymanner.
ServicerGuide:ServicerWarranties
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Section401.Representations,WarrantiesandObligations
ofServicer
I.EligibleServicer
TheServicerisaninstitution,whoseaccountsare
insuredbytheFederalDepositInsuranceCorporation
(FDIC),orisanFHAApprovedMortgagee,and
continuestomeettheeligibilitystandardsasstatedin
Section101ofthisServicerGuide.
J.AccuracyofInformation
EachreportandremittancesubmittedbytheServicerto
theBuyeriscomplete,truthfulandaccurateinall
respects.
K.CompliancebyOthers
Whenanactionisperformedbyathirdpartyforthe
Servicer,whichtheServicerisrequiredtoperformunder
thisServicerGuide,theServicerwarrantsthatsuchthird
partyhascompliedwithallrequirementsofthisServicer
Guide.
L.Warranties
Allrepresentationsandwarrantiesmadeatthetimeof
thesaleofthemortgagetotheBuyerremaintrue,correct
andcomplete.TheServicerisincompliancewith,and
hastakenallnecessaryactiontoensurethatitandeach
mortgageisincompliancewiththisServicerGuide.
M.CompliancewithLaws
TheServicerhasobservedandcomplied,andwill
observeandcomply,withallapplicablelocal,stateand
federallaws,regulationsandordersinservicingeach
mortgageandhasserviced,andwillserviceeach
mortgageinstrictconformitywiththetermsand
conditionsoftheNote,theSecurityInstrumentandeach
ofthedocumentsrelatingtothemortgage.Without
limitingthegeneralityoftheforgoing,theServicer
warrantsthatallescrowpracticesandARMadjustments
havebeenmadeandadministered,andwillbemadeand
administered,infullcompliancewiththenote,security
instrumentandapplicablelawandregulation.
N.NoSolicitationofRefinances
TheServicerhasnotandwillnotconductanydirect
advertisingordirectpromotionalactivities,eitherwritten
orverbal,thathavetheeffectofencouragingaborrower
torefinancealoanservicedhereunder.
O.ConveyanceofServicingRightsto
DelinquentMortgageLoans
TheBuyerhastheoptiontoacquirefromtheServicer,
withoutthepaymenttoServicerofanycompensation
therefore,theservicingrightsrelatingtoanymortgage
loanwhichisdelinquentorotherwiseindefaultfor
ninety(90)daysormore.UpontheServicersreceiptof
writtennoticeoftheBuyerselectiontoexercisesuch
option,theServicershall,withinten(10)businessdays,
notifytheapplicablemortgagorsofthetransferofthe
servicingrightsinaccordancewithallapplicablelaw.In
addition,theServicershalldelivertotheBuyerorits
designeealldocumentsintheServicerspossession
whichrelatetothemortgageloanandtakesuchother
measuresasreasonablyrequestedbytheBuyerorits
designeeinconnectionwiththetransferoftheservicing
rights.
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Page 60
Section402.AssignmentsandRecordationsofMortgages
Anyassignment,recordation,orotheractionregarding
loansservicedbytheServiceronbehalfoftheBuyer,
requestedbytheBuyerorotherwiseconsistentwith
prudentservicingpracticeorlocalpracticeornecessary
toprotectthelienpriorityoftheBuyer,itsdesigneeor
assignee,shallbecompletedbytheServiceratthe
Servicersexpense.TheServicershallpromptlynotify
theBuyerintheeventtherequirementsforrecordingor
filingmortgagesorassignmentsinaparticularstatehave
materiallychanged.
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Section403.RemediesforBreachofRepresentations
andWarranties
403.01RepurchaseObligations
UpondiscoverybytheServicerofabreachofany
representation,warrantyorobligationcontainedinthe
SellingandServicingAgreementorthisServicerGuide,
theServicershallgivepromptwrittennoticetothe
Buyer.UpontheBuyersreceiptofnoticeofthebreach
orindependentdiscoveryofanybreach,theBuyermay,
initssoleandabsolutediscretion,withoutregardtothe
Servicersactualorimpliedknowledgeofthebreachof
suchrepresentation,warrantyorobligation(excepttothe
extenttherepresentation,warrantyorobligationis
expresslyconditioneduponServicersknowledge),and
inadditiontoandwithoutlimitationastoanyother
remedyaccruingtotheBuyer,requiretheServicerto
repurchasetheaffectedloans.
TheServicershall,withoutadjustmentonthebasisof
feesorchargespayablebytheServicer,repurchasesaid
loansupontheServicersreceiptofarepurchasedemand
fromtheBuyer.Therepurchasepricewillrepresentthe
outstandingprincipalbalanceoftheapplicablemortgage,
asdeterminedbytheBuyer,plusinterestcomputed
thereonatthenetrateuptothefirstdayofthemonth
followingthedateofrepurchase,andanyrelated
amountssuchasalldocumentarystamptaxes,recording
fees,transfertaxesandallotherexpensespayablein
connectionwiththetransferofthemortgageloanatthe
timeofrepurchase,andanyattorneysfees,legal
expenses,courtcosts,orotherexpensesthatmayhave
beenincurredbytheBuyerinconnectionwiththeloan
orenforcementoftheobligationtorepurchase.These
fundsmustbewiredtotheBuyerwithin15calendar
daysofthedemand,andbeaccompaniedbya
LiquidationSchedule(WMMSC4009)andany
documentsnecessarytoconveytitle.
Ifathirdpartypurchasesaloanoranyinterestina
loanfromtheBuyerwhichisservicedbythe
Servicer,theBuyermay,atitsoption,exerciseanyrights
orremediesatlaworinequityonbehalfof
suchpartytotheextentthatsuchpartydoesnot
affirmativelydoso.IftheBuyermustrepurchasea
mortgageithassoldtoathirdpartybecausethe
Servicerhasfailedtocomplywiththeterms,repre
sentationsandwarrantiesoftheSellingand
ServicingAgreementandthisServicerGuide,the
Servicermustrepurchasethemortgagefromthe
BuyeratanamountequaltothepriceatwhichtheBuyer
wasrequiredtorepurchasethemortgage,plusany
attendantcostorexpenseincurredbytheBuyerinthe
courseofrepurchasingsuchmortgage.
403.02IndemnityandHoldHarmless
Agreement
TheServicershallindemnifytheBuyerandholdthe
Buyeranditssuccessorsandassignsharmlessagainstall
losses,damages,penalties,fines,forfeitures,courtcosts
andreasonableattorneysfees,judgments,andanyother
costs,feesandexpensesresultingfromanyclaim,
demand,defenseorassertionbasedorgroundedupon,or
resultingfromabreachofanyrepresentation,warranty
orobligationcontainedinormadepursuanttothe
SellingandServicingAgreement,includingthis
ServicerGuide,orfromanyclaim,demand,defenseor
assertionagainstorinvolvingtheBuyerbasedor
groundedupon,orresultingfromsuchbreachorabreach
ofarepresentation,warrantyorobligationmadebythe
Buyerinrelianceuponanyrepresentation,warrantyor
obligationcontainedintheSellingandServicing
AgreementorthisServicerGuide.
TheServiceralsoagreestoindemnifyandholdharmless
eachoftheBuyer,eachPerson,ifany,whocontrols
theBuyerwithinthemeaningoftheSecuritiesActof
1933,asamended,andtheirrespectiveofficersand
directorsagainstanyandalllosses,penalties,fines,
forfeitures,legalfeesandrelatedcosts,judgmentsand
anyothercosts,feesandexpensesthatsuchPersonmay
sustainarisingoutofthirdpartyclaimsbasedon(i)the
failureoftheServicertodeliverorcausetobedelivered
whenrequiredtheAnnualCertification,anAnnual
StatementofComplianceandtheAccountants
StatementrequiredpursuanttoSection101.05ofthis
ServicerGuide,or(ii)anymaterialmisstatementor
omissioninanycertificationpursuanttoSection302(a)
oftheSarbanesOxleyActof2002andRules13a14and
15d14promulgatedbytheSecuritiesandExchange
Commissionthereundermadeinrelianceonanymaterial
misstatementoromissioncontainedintheAnnual
Certification(WMMSC1007)oranAnnualStatementof
Compliance(WMMSC31477)requiredunderthis
ServicerGuide.
TheServicershallalsoindemnifytheBuyerandholdit
harmlessagainstallcourtcosts,reasonableattorneys
feesandanyothercosts,feesandexpensesincurredby
theBuyerinenforcingtheprovisionsoftheSellingand
ServicingAgreementorthisServicerGuide.
TheobligationsoftheServicerunderthisSectionshall
survivethedeliveryandpurchaseofthemortgage,
foreclosure,liquidationorrepurchaseofthemortgage
andsuspensionorterminationoftheSellingand
ServicingAgreement.
4031
(Rev.(7/29/10)
Page 62
Section403.RemediesforBreachofRepresentations
andWarranties
403.03RightofOffset
ToprotecttheBuyersinterests,theBuyerreservesthe
righttooffsetagainstthepurchasepriceforany
mortgagedeliveredforpurchasebytheServicer(orany
amountotherwiseownedbytheBuyertotheServicer)to
recoveranyoutstandingpastduefeesowedtotheBuyer
bytheServicerresultingfromcircumstancesincluding,
butnotlimitedto:
1.Fees,penaltiesorexpensesincurredfromfailureto
deliveranyrequiredfinaldocumentationfor
mortgagespreviouslypurchased;
2.Noticethatasecuredinterestdoesnotexistwhen,in
fact,asecuredinterestdoesexist;
3.Penaltiesforfailuretoproperlyserviceloanson
behalfoftheBuyer;and
4.SituationswheretheBuyerhasreasontobelievethe
Servicerisunabletocontinuetooperateunderthe
termsandconditionssetforthintheSellingand
ServicingAgreementandthisServicerGuide,and
specificallytherepresentationsandwarranties
containedinSection401.Eventsevidencingsuch
situationswouldinclude,withoutlimitation:
Substantialcancellationofwarehouselines
withoutaviablereplacementwarehouse
facility,
Regulatoryauthoritysuspensionorcancellation,
Pendingvoluntaryorinvoluntarybankruptcy,or
Excessivefallout.
403.04RemediesCumulative
AllrightsandremediesprovidedtotheBuyerinthis
ServicerGuideareinadditiontoanyotherrightor
remedyavailabletotheBuyerundertheSellingand
ServicingAgreementoraffordedbylaworequity,and
maybeexercisedconcurrentlywith,independentlyof,or
insuccessionto,andsuchrightsandremediesshallinure
tothebenefitoftheBuyer,itssuccessorsandassigns.
ThefailureoftheBuyertoexerciseanyofitsremedies
doesnotconstituteawaiverofuseofthatremedyinthe
futureinconnectionwiththesameoranyotherbreachor
defaultbytheServicer.
4032
(Rev.7/29/10)
Page 63
AppendixA.GlossaryofTerms
accountantsstatement:Astatementbyafirmof
independentpublicaccountantsthatisamemberofthe
AmericanInstituteofCertifiedPublicAccountantsto
theeffectthatsuchfirmhasexaminedcertain
documentsandrecordsrelatingtothemortgage
servicingoperationsoftheServicersubstantiallyin
compliancewiththeUniformSingleAttestation
ProgramforMortgageBankersandthat,onthebasisof
suchexamination,nothinghassometosuchfirms
attentionthatwouldindicatethatsuchservicinghasnot
beenconductedincompliancetherewith,exceptfor(i)
suchexceptionsassuchfirmshallbelievetobe
immaterialand(ii)suchotherexceptionsasshallbeset
forthinsuchstatement.
accruedinterestTheinterestearnedfortheperiodof
timethathaselapsedsinceinterestwaslastpaid.
adjustableratemortgage(ARM)Amortgagein
whichtheinterestrateisperiodicallyadjustedbasedon
themovementofapreselectedindex.
amortizationPaymentofadebtbyequalperiodic
installmentstoretireprincipalattheendofafixed
periodandtopayaccruedinterestontheoutstanding
balance.
appraisalAreportwhichsetsforthanestimateor
opinionofvalue.
assumptionAgreementbyabuyertoassumethe
liabilityforpaymentofanexistingmortgageordeedof
trust.Theoriginalborrowerremainsliableunless
specificallyreleasedbytheServicer.
automatedclearinghouse(ACH)Thenetwork
throughwhichWMMSCelectronicallydebitsthe
principalandinterestcustodialaccountforthetotal
amountdueeachmonthasstatedontheNoticeof
AutomaticWithdrawal.
buydownMoneyadvancedbyasellerorbuilderto
reducetheborrowersmonthlypaymentsona
mortgageeitherduringtheentiretermofthemortgage
orforthefirstfewyears.
buydownaccountAnaccountinwhichfundsare
heldforapplicationaspartofthemonthlymortgage
paymentwheneachpaymentcomesdueduringthe
termofthebuydown.
BuyerloannumberTheidentificationnumber
assignedbyWMMSCtoeachloanpurchased.
calendarmonthendTheaccountingperiodcutoff
forreportingtoWMMSC.Thedateofthecutoffwill
alwaysbethelastbusinessdayofthemonth.
certifiedcopyAcopyofadocumentwithasigned
endorsementstatingthatthecopyisatrueandcorrect
copyoftheoriginaldocument.
closingcostsMoneypaidbythebuyersandsellersto
effecttheclosingofamortgage.Thisnormally
includesanoriginationfee,discountpoints,title
insurance,survey,attorneysfee,andsuchprepaid
itemsastaxesandinsuranceescrowpayments.
condominiumAunitofrealpropertytowhichtitle
isgiven,usuallytotheinteriorsurfacesanda
proportionateinterestincertaincommonareas.Titleto
thecommonareasisintermsofpercentagesandrefers
totheentirecondominiumprojectlesstheseparately
ownedunits.
curtailmentAnadditionalamountofmoneypaidby
theborrowerwhichisappliedtotheoutstanding
principalbalance,butwhichdoesnotreducethe
outstandingprincipalbalancetozero.
custodialaccountAbankaccountestablishedbythe
Servicerfordepositofborrowersfunds.Thisaccount
maybeforprincipalandinterest,taxesandinsurance
orbuydownfunds.
debtBorrowedmoney,therepaymentofwhichmay
beeithersecuredorunsecuredwithvariouspossible
repaymentschedules.
debttoincomeratiosRatiosusedtoqualifya
borrowerbycomparingtheborrowerstotalmonthly
housingexpenseandtotalmonthlydebttogross
income.
delinquencyThefailuretomaketimelypayments
underaloanagreement.
delinquencyadvancesFundsadvancedbythe
Servicertocoveranydeficitintheprincipaland
interestcustodialaccountonthewithdrawaldatedueto
delinquentinstallments.
dueonsaleclauseTheclausefoundinthesecurity
instrumentthatrequiresthepaymentoftheentireloan
balanceuponsaleortransferofownershipofthe
securedproperty.
equityThedifferencebetweenfairmarketvalueand
theownersindebtednessonthemortgage.
escrowaccountAtrustaccountwhichisestablished
toholdfundsallocatedforthepaymentofrealestate
taxes,hazardormortgageinsurancepremiumsasthey
arereceivedeachmonthanduntilsuchtimeastheyare
disbursedtopayrelatedbills.
escrowholdbackFundsheldinescrowforthe
completionofpostponedimprovementsorrepairs.
FDICAtermusedtorefertotheFederalDeposit
InsuranceCorporationwhichisafederallysponsored
corporationwhoinsuresdepositsinnationalbanksand
othersubscribingfinancialinstitutions.
ServicerGuide:Appendices
V.A1
(Rev.2/8/10)
Page 64
FHAmortgageAmortgagethatisinsuredbythe
FederalHousingAdministration(FHA);maybe
referredtoasagovernmentmortgage.
FHLMC(FreddieMac)Atermcommonlyusedto
refertotheFederalHomeLoanMortgageCorporation,
whichisacongressionallycharteredcorporationthat
purchasesconventionalmortgagesinthesecondary
mortgagemarket.
firstmortgageAmortgagewhichistheprimarylien
againstaproperty.
fiscalyearAny12monthperiodwhichisusedfor
financialreportingandpreparationofbalancesheets,
profitandlossstatementsandotherfinancial
summaries.
fixedratemortgageAmortgageforwhichthe
interestrateissetfortheentiretermoftheloan.Ifthe
interestratechangesduetoenforcementofthedueon
saleprovision,themortgageisconsideredafixedrate
mortgage.
FNMA(FannieMae)Atermcommonlyusedwhen
referringtotheFederalNationalMortgageAssociation.
giftletterAsignedstatementdescribingtheamount
ofanycashgiftusedbytheborrowertoqualifyfora
loanwithreferencethatthegiftneednotberepaid.
GNMA(GinnieMae)Atermcommonlyusedto
refertotheGovernmentNationalMortgage
Association,(partofHUD),whichadministersthe
mortgagebackedsecuritiesprogram;channelsnew
sourcesoffundsintoresidentialfinancingthroughthe
saleofprivatelyissuedsecuritieswhichcarryaGNMA
guaranty.
grossmarginThesumofthenetmarginandthe
Sellersservicingfee.
hazardinsuranceAninsurancecontract,whereby
aninsurerundertakestocompensatetheinsuredfor
lossonpropertybecauseofphysicaldamagebyfire,
windorothernaturaldisasters.
homeownersassociationAnonprofitassociationor
corporationcomprisedofhomeownerswithina
particulardevelopmentwhosepurposeistomaintain
thecommonareasofaPUDorcondominiumproject.
Inacondominiumproject,thegroupdoesnothave
ownershipofthecommonarea,whileinaPUD
project,thegroupdoesholdtitletothecommonareas.
HUDTheU.S.DepartmentofHousingandUrban
Development;responsiblefortheimplementationand
administrationofgovernmenthousingandurban
developmentprograms.
landtovalueTheratioofthevalueofthelandtothe
lowerofthepurchasepriceorcurrentappraisedvalue
expressedasapercentage.
leaseAwrittenagreementbetweentheproperty
ownerandatenantthatcontainstheconditionsunder
whichthetenantmaypossessandusetherealestatefor
aspecifiedperiodoftime.
lifetimeinterestratecapThemaximuminterestrate
thatmayeverbechargedoverthelifeofamortgageon
anARM.
liquidationTheapplicationofapaymenttoa
mortgageloanwhichreducestheoutstandingprincipal
balancetozero.
loanclosingdateThedateonwhichloanproceeds
aredisbursedtotheborrower.
loantovalue(LTV)Theratiooftheoutstanding
principalbalanceofthemortgagetothelowerofthe
appraisedvalueorpurchasepriceofthemortgaged
propertyexpressedasapercentage.
maximumnetrateThenetrateisthemortgage
interestrate(noterate)lessthelendersservicingfee.
Themaximumnetrateandcorrespondingprice
establishtherequirednetyieldtoWMMSCforfixed
ratemortgages.Fixedratemortgageswithnetrates
thatarelessthantheminimumnetratewillbepricedto
producetherequirednetyield.
monthofpurchaseThemonthinwhichWMMSC
fundsaloan.
monthlywithdrawalThetotaloftheprincipaland
interestamountstobedebitedbyWMMSConthe
withdrawaldateviaanACHtransaction.Thisamount
willbestatedontheNoticeofAutomaticWithdrawal.
mortgageloanAloansecuredbyrealpropertyand
evidencedbyformaldocuments,includingthesecurity
instrument,note,titleevidenceandallothernecessary
documentsandpapers,whichareexecutedbythe
borrowerwhenpledgingthepropertyassecurityfor
thepaymentofadebt.
mortgageinterestrateThenoterateorrateof
interestpaidbytheborrower.
negativeamortizationThemortgagepayment
scheduleinwhichtheoutstandingprincipalbalance
increasesinsteadofdecreasingsincethepaymentdoes
notcoverthefullamountofinterestdueinthat
paymentperiod.Theunpaidinterestisaddedtothe
outstandingprincipalbalance.
netmarginThenetmarginisquotedonARMsand
isthegrossmarginminustheSellersservicingfee.It
isusedtocalculatethenewinterestrateatthetimeof
aninterestrateadjustmentbyaddingittothecurrent
indexandtheSellersservicingfee.
netrateThemortgageinterestrate(noterate)less
theSellersservicingfee.Thisistheratepassed
throughtoWMMSC.
V.A2
(Rev.2/8/10)
Page 65
networthThevalueofallofacompanysor
individualsassetsminusitstotalliabilitiesusedasa
meanstoindicatecreditworthinessorfinancial
strength.
netyieldTherequiredyieldtoWMMSC.
noteTheapplicableformofinstrumentthat
evidencesthemortgageloan,includinganyaddenda.
P&ICustodialAccountOneormorecustodial
accountsintowhichisdepositedtheprincipaland
interestportionsofmortgageloanpayments.
plannedunitdevelopment(PUD)Adevelopmentin
whicheachunitownerhastitletoaresidentiallotand
buildingandanonexclusiveeasementonthecommon
areasoftheproject.Theownermayhaveanexclusive
easementoversomepartsofthecommonareas,for
example,aparkingspace.
prepaidinstallmentApaymentreceivedpriortothe
scheduledduedatebutwhichisnotapplieduntilsuch
duedate.
priceThepercentageofparWMMSCwillpayfora
loanapprovedforpurchase.Paris100%oftheunpaid
principalbalanceoftheloan.
projectedprincipalbalanceTheunpaidprincipal
balanceremainingaftertheapplicationofthepayment
dueonthefirstdayofthemonthinwhichWMMSC
purchasesamortgage.
purchasedateThedateWMMSCfundsaloan.
realestateowned(REO)Realpropertyacquiredby
theServiceronbehalfofWMMSCasaresultof
foreclosureorothertransfer.
refinanceTherepaymentofadebtfromtheproceeds
ofanewloanusingthesamepropertyasasecurity.
releaseofliabilityAnagreementtoterminatethe
personalobligationofaborrowerinconnectionwith
thepaymentofamortgagedebt.
secondmortgageAmortgagethathasalienposition
subordinatetothefirstmortgage.
securityinstrumentAmortgage,deedoftrustor
otherdocumentevidencingasecurityinterestinthe
realpropertysecuringamortgageloan.
sellerThetermusedwhenreferringtoaWMMSC
approvedSellersobligationinoriginatingandselling
loanstoWMMSC.
Seller/ServicerIDnumberThenumberassignedto
aSeller/ServiceruponapprovalbyWMMSC.
ServicerThetermusedintheServicerGuidewhen
referringtoaWMMSCapprovedServicersobligation
inservicingloansonthebehalfofWMMSC.
servicingfeeThefeereceivedbytheServicerin
compensationforservicingmortgagespurchasedby
WMMSC,expressedasapercentage.Thisfeeis
calculatedbysubtractingthenetratefromthe
mortgageinterestrate(noterate)oftheloan.
servicingadvancesFundsadvancedbytheServicer
tocoverservicingcostsandexpensesastheyoccur.
surveyAmeasurementofland,preparedbya
registeredlandsurveyor,showingthelocationofthe
landwithreferencetoknownpoints,itsdimensions,
andthelocationanddimensionsofanyimprovements.
T&ICustodialAccountOneormorecustodial
accountsintowhichisdepositedtheportionof
mortgageloanpaymentsintendedtopayfortaxesand
insurance.
VAmortgageAmortgagethatisguaranteedbythe
VA(VeteransAdministration).Thistypeofloanmay
bereferredtoasagovernmentloan.
withdrawaldateThedateonwhichWMMSCdebits
theP&ICustodialAccountviaanACHtransactionfor
thetotalamountofprincipalandinterestduethat
month,includinganyunscheduledcollectionsof
principalandinterestforthepreviousmonth.Thisdate
willusuallybethe20thofthemonth.Ifthe20thfalls
onaweekendorholiday,however,thewithdrawalwill
occurontheprecedingbusinessday.Theinitial
withdrawaldateforanycommitmentwilloccurinthe
monthfollowingthemonthinwhichWMMSC
purchasedallorpartofanycommitment.
WMMSCWashingtonMutualMortgageSecurities
Corporation,awhollyownedsubsidiaryofJPMorgan
ChaseBank,NationalAssociation.
WMMSCassignedservicernumberThe
identificationnumberassignedbyWMMSCtoeach
poolofloanswhichitacquires.
YTDProfitandLossStatementAServicersmost
currentinterimfinancialstatements.
V.A3
(Rev.2/8/10)
Page 66
AppendixB.OfficeLocationsandTelephoneNumbers
WMMSC:
MasterServicingDepartment:
ServicerManagement
MichaelCarsner(614)4225683
Default
SusanPeterson(614)4223356
DocumentCustody
JeffreyGill
(318)4326817
CashManagement
AmyAnangono
(614)4227554
Monthlyaccountingandservicingreports,correspondence,andgeneralinquiriesshouldbe
directedtothefollowingaddress:
WMMSC
3415VisionDrive
Columbus,OH43219
MasterServicingAdministration
MailStop:OH47288
ServicingManagement:
TheAnnualCertification,anAnnualStatementofCompliance,andtheAccountantsStatement
shallbedirectedtoServicingAdministrationatthefollowingaddress:
WMMSC
3415VisionDrive
Columbus,OH43219
Attn:ServicingManagement
MailStop:OH47288
JPMorganChaseCustodyServices:
JPMorganChaseCustodyServices
780DeltaDrive
Monroe,LA712036000
ATTN:FinalDocumentsManager,WMMSCAcct.
MailStop:LA41040
ServicerGuide:AppendixB
VI.B1
(Rev.123014)
Page 67
AppendixC.HolidaySchedule
ThefollowingistheWMMSC2015holidayschedule:
Holiday
Date
DayoftheWeek
NewYear'sDay
January1
Thursday
MartinLutherKingDay
January19
Monday
President'sDay
February16
Monday
MemorialDay
May25
Monday
IndependenceDay
July4
Saturday
LaborDay
September7
Monday
Veteran'sDay
November11
Wednesday
ThanksgivingDay
November26
Thursday
ChristmasDay
December25
Friday
ServicerGuide:AppendixC
VII.C1
(Rev.12/24/2013)
Page 68
AppendixD.WiringInstructions
MasterServicing3415VisionDrive
Columbus,OH43219
ABANumber:021000021
AccountNumber:304652601
JPMorganChaseBankNewYork,NY
Credit:WashingtonMutualMortgageSecuritiesCorp.
ThefollowinginformationmustbeincludedintheRemarksectionofyourwire,exactlyasdocumented
belowandwithoutabbreviation:
PAYOFF
(IfPayoffFundsWMMSCloannumber)
INTERIMREMITTANCE
(IfNotPayoffFundsCoNameINVyourinvestor#)
PCFedWireInstructions:
AppendixDWiringInstructions
Rev.12/30/14
Page 69
AppendixE.ElectronicMonthlyReportingFields
RequiredbyWMMSC
ElectronicFileRequirements:
1.MustbeanExcelfilethatcanbeuploadedintotheWMMSCsystem.(AWorddocumentfilewillnotbeaccepted)
2.Thefilemustcontainalltherequiredfieldsasindicatedintheexample.
3.Donotincludeadditionalinformationthatisnotrequired.
4.Informationmustbeinthesamecolumnandformatasindicatedintheexample.
5.RowOne(1)shouldbetheheaderrowoftitles.
6.Informationmustbereportedone(1)rowperloan.
7.Electronicfilemustbereceivedbythe5thbusinessdayofthemonth.
Example:January2003Cycle
RequiredforARMloansonly
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
WMMSC
Ln#
LenderLn
#
Actual
PTD
P&I
SchIntSchPrn
Curt
PrePaid
Curt
PayoffPrn
Payoff
Date
EndSch
Bal
EndAct
PrnBal
Note
Rate
Service
Fee
PymtChg
Date
NewInt
Rate
New
P&I
P/O
Interest
S/F
Amount
Remit
Example600001111
123456
2/1/03
2889.52298.04591.461166.14
166.14
0
406609.6
406609.6
6.750
0.450
3/1/03
7.250
3017.5
153.2
4068.58
PIF
Example600002222
678910
12/1/023524.622320.451204.17
400
0.00
410920.4501/17/03
0.00
0.00
6.750
0.450
1215.87
154.7413585.8
Total
6414.124618.491795.631566.14
166.14
410920.45
4066089.6406609.6
3017.5
307.9417654.4
ExplanationofColumnHeaders
AWMMSCLn#=WMMSCloannumber
BLenderLn#=Servicerloannumber
CActualPTD=Actualpaidtodate(Monthanddayoflastpaymentreceived).ThedateshouldbeformattedasMM/DD/YY
DP&I=Currentprincipalandinterestpayment
ESchInterest=Scheduledinterestatgrossrate
FSchPrin=Scheduledprincipal
GCurt=Anyadditionalprincipalreceivedduringthemonth
HPrePaidCurtailment=Prepaidcurtailmentreceivedincurrentmonth
IPayoffPrn=Actualprincipalbalancepaidoff
JPayoffDate=Dateloanpaidoff.(ThedateshouldbeformattedasMM/DD/YY)
KEndSchBal=Endingscheduledbalance
LEndActPrnBal=Actualendingprincipalbalance
MNoteRate=Currentinterestrate
NServiceFee=Currentservicefeerate
OPymtChgDate=PaymentchangedateforARMloans
PNewIntRate=NewinterestrateforARMloans
QNewP&I=Newprincipal&interestpaymentforARMloans
RP/OInterest=Payoffinterestcalculatedatthegrossrate
SS/FAmount=ServiceFeeAmount
TRemit=Netremittanceamountdue
NOTE:ColumnsO,P&RarerequiredonlyforAdjustableRateLoans(ARMS)
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