WAMU Servicer Guide

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Mortgage Securities Corporation Servicer Guide Last Update: 08/29/09 This manual is the property of Washington Mutual. No part of this document can be used or reproduced without the permission of Washington Mutual. Washington Mutual, Inc. Internal Use Only

Transcript of WAMU Servicer Guide

Page 1: WAMU Servicer Guide

Mortgage Securities Corporation Servicer Guide

Last Update: 08/29/09

This manual is the property of Washington Mutual. No part of this document can be used or reproduced without the permission of Washington Mutual.

Washington Mutual, Inc. Internal Use Only

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Section 101. Servicer Eligibility

Servicing Guide: Loan Administration 101-1 (Rev. 12/11/08)

Servicers who wish to participate in the Washington Mutual Mortgage Securities Corp. (“Buyer”) Servicing program must first complete a Seller/Servicer Application (WAMU 5000) and submit it to Buyer together with the following required documentation: (i) professional resumes of the principal officers and the individuals responsible for origination, underwriting, accounting, servicing, shipping and final documentation delivery; (ii) the Servicer’s audited financial statements for the previous two years and the most current interim financial statements (“YTD Profit and Loss Statement”). If a current YTD Profit and Loss Statement is not available at time of application, then the most recent three years audited financial statements are required; (iii) in the event the Servicer has a parent, the parents audited financial statements for the previous two years, and the parent’s most current YTD Profit and Loss Statement. If a current YTD Profit and Loss Statement is not available at the time of application, then the most recent three years audited financial statements are required; (iv) the most recent audit reports issued with respect to the Servicer by Fannie Mae, Freddie Mac, HUD and any other governmental or quasi-governmental agency with jurisdiction over any of the Servicer’s operations; (v) a copy of the Servicer’s quality control procedures, for origination and servicing, presently in place, and copies of the three (3) most recent quality control reports to Servicer’s senior management and quality control summary reports as submitted to Servicer’s senior management; (vi) a copy of the completed servicing questionnaire (application addendum); (vii) a certificate of insurance for each of the Servicer’s fidelity bond, errors and omissions, and directors and officers liability insurance policies which meet the requirements of Section 101.04; and (viii) a complete list of all names under which the Servicer is doing business, or has done business in the last five years.

101.01 Eligibility Requirements The following eligibility requirements must be met prior to approval and must be maintained by the Buyer approved Servicers at all times. In addition, the Buyer may request evidence of the Servicer’s compliance with each of these provisions at any time. The Buyer may, at its own discretion, allow deviations from these stated requirements if it believes it is in its own best interest to do so. 1. Experience: The Servicer must have a minimum

existing servicing portfolio of 3,500 mortgages and must have MBS style reporting capabilities (on hard copy or tape) with an institutional investor. The Servicer must have at least two years of experience in servicing conventional residential mortgages and must follow generally accepted practices and prudent servicing practices. If the Servicer has been

in existence for less than two years, financial information substantiating the Servicer’s capacity to participate in the Buyer’s programs is required.

2. Approvals: The Servicer must be either a HUD approved mortgagee or a bank or savings and loan which is insured by the Federal Deposit Insurance Corporation (FDIC). The Servicer and its parent company (whether direct or indirect), if applicable, must meet the capital requirements of the FDIC, the Office of Thrift Supervision (OTS), or any other state or federal regulatory agency that regulates the Servicer or its parent company. The Servicer must also be either Fannie Mae (FNMA) or Freddie Mac (FHLMC) approved.

3. Facilities: The Servicer must maintain satisfactory facilities in which to service mortgages, including automated servicing capabilities.

4. Legal Standing: The Servicer must be duly organized, validly existing, properly licensed, and in good legal standing under the laws of the state of its incorporation and in each state in which the property securing a serviced loan is located, with the power and authority to enter into a Servicing Contract (WAMU 1001) with the Buyer; and its compliance with the terms and conditions of the Servicing Contract and this Servicing Guide will not violate any of the provisions of its articles of incorporation, charter or by-laws, and any other instrument relating to the conduct of the business or the ownership of property or any other agreement to which it is a party or by which it is bound.

5. Insurance: The Servicer must maintain in effect, at all time and at its expense, fidelity bond, errors and omissions insurance, and directors and officers liability policies which meet the Buyer’s requirements as defined in Section 101.04.

6. Good Standing: The Servicer must be in good standing with all applicable regulatory authorities and not subject to any extraordinary supervision of its operations.

7. External Audits: The Buyer request a copy of external audits be provided if the Servicer is subject to these requirements: (a) USAP reports (servicer); (b) Reg AB attestations and reports; and (c) SAS 60 internal control reports (sellers and servicers).

101.02 Required Documentation Once approved by the Buyer, the Servicer must execute and submit the following documents, correct and complete in all material respects, to Buyer:

• An original, certified copy of the Corporate Resolution (WAMU 1008);

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Section 101. Servicer Eligibility

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• A Selling and Servicing Contract (WAMU 1001); • An ACH Debit Authorization (WAMU 4006); • An applicable Custodial Account Letter Agreements

(WAMU 4002, WAMU 4003, WAMU 4004 and WAMU 4005);

• Seller-Servicer Supplemental Information (SSF 011) • Contact List (SSF 003); • Lender’s Authorization and MI Company and HUD

Reference Request (SSF 006); • Lender’s Authorization and Investor Release (SSF

005); and • Certificates of insurance evidencing the fidelity

bond, errors and omissions, and directors and officers liability insurance coverage which meets the Buyer’s requirements as outlined in Section 101.04.

Approved Servicers must continue to meet the eligibility requirements as amended from time to time, in order to continue to service loans on behalf of the Buyer.

101.03 Corporate Resolution Upon approval, the Servicer must supply the Buyer with an original, certified copy of the Corporate Resolution. If, at any time, there is a change to the authority provided by the Corporate Resolution or changes to the persons provided with such authority, the Servicer must immediately submit either an amended original, certified copy of the Corporate Resolution reflecting the current information, or an original Corporate Certificate of Authority reflecting new authorities granted. The Buyer will not recognize any change to the Servicer’s Corporate Resolution until the original, certified copy of the Corporate Resolution or an original Corporate Certificate of Authority is received.

101.04 Fidelity Bond, Direct Bond, and Errors and Omissions Coverage The Servicer is responsible for maintaining in effect, at all times and at its expense, blanket fidelity bond, errors and omissions, and directors and officers liability insurance coverage. Specific insurance requirements are indicated below. Insurance coverage which does not meet the minimum amount required or an insurance deductible which exceeds the limit allowed must be approved by the Buyer. Servicers must request a waiver of these requirements in writing and provide evidence satisfactory to the Buyer of FNMA’s or FHLMC’s approval, as applicable, of the Servicer’s insurance coverage. If, at any time, there is a change in coverage, or if coverage has expired, the Servicer must immediately submit evidence of the amended or renewed insurance coverage to Relationship Management Operations. Refer to Appendix B for the current address.

A. Amount of Coverage Coverage for fidelity bond, errors and omissions, and directors and officer’s liability insurance must be based on the Servicer’s total portfolio (all residential mortgages and commercial loans) which the Servicer serviced for itself and all other investors, including the Buyer, during the preceding 12 months. The amount of coverage for fidelity bond, errors and omissions, and directors and officer’s liability insurance is calculated as follows:

Total Portfolio Minimum Coverage Required $100 million or less $300,000 $100 - $500 million $300,000 + .15% of total portfolio

exceeding $100 million $500 million to $1 billion

$900,000 + .125% of total portfolio exceeding $500 million

Over $1 billion $1,525,000 + .1% of total portfolio exceeding $1 billion

The amount of coverage required for a direct surety bond may be based on the total servicing portfolio the Servicer is servicing on behalf of the Buyer, provided that such surety bond relates solely to such portfolio.

B. Scope The fidelity bond, errors and omissions, and directors and officer liability coverage must insure the Servicer against losses resulting from dishonest, negligent or fraudulent acts committed by employees of the Servicer, including, but not limited to, any person employed under a permanent or temporary employment agreement, any person acting as an agent or representative of the Servicer, any employees of outside firms that provide data processing services for the Servicer, each director and officer who has control over or access to cash, securities or other property of the association, and persons employed as student interns. The coverage must also protect against dishonest, negligent or fraudulent acts by the Servicer’s principal owner, if the Servicer’s insurance writer provides that type of coverage. Servicers must obtain errors and omissions coverage that under the terms of the policy or by separate rider; (i) provides that the insurer will name the Buyer, as an investor, as loss payee on payment drafts issued by the insurer for losses to the Buyer resulting from acts or omissions covered by the insurance and (ii) gives the Buyer, as an investor, the right to file a claim directly with the insurer, should the Servicer fail to do so, for losses to the Buyer resulting from acts covered by the insurance. C. Deductible The deductible for fidelity bond, directors and officer’s liability, and direct surety coverage may be no more than

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Section 101. Servicer Eligibility

Servicing Guide: Loan Administration 101-3 (Rev. 12/11/08)

$100,000 or 5% of the bond’s face amount, whichever is greater. The deductible for errors and omissions coverage may be no greater than 5% of the liability coverage per occurrence.

D. Cancellation The insurance certificate issued must indicate the insurance broker’s or agent’s agreement to notify the Buyer of any cancellation or reduction of coverage within 10 days of such reduction or cancellation.

101.05 Annual Certification, Regulatory Officer’s Certificate and Accountants’ Statement

On or before March 1st of each year, the Servicer must deliver to the Buyer:

(1) an Annual Certification (WAMU 1007) signed by an authorized corporate officer;

(2) a Regulatory Officer’s Certificate (WAMU 31476); (3) an Accountants’ Statement; (4) Section 1122 of Regulation AB: 17CFR 229.1100-

1123 Attestation; (5) SOX Certification/Officer’s Certificate – Backup

302 Certification; and (6) SAS 60 internal reports.

The Annual Certification must include certifications from an authorized corporate officer that (i) the servicing eligibility requirements set forth in this Servicing Guide have been reviewed, (ii) the Servicer is in full compliance with such servicing eligibility requirements, (iii) a review of the activities of the Servicer during the preceding calendar year and of performance under this Servicing Guide and the Servicing Contract through such year has been made under such officer’s supervision, and (iv) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all of its obligations under this Servicing Guide and the Servicing Contract through such year. (If there has been a default in the fulfillment of any such obligation, the Annual Certification shall include a description of each such default, specifying the nature and status thereof.) If so requested by the Buyer, the Servicer must provide any documentation necessary to substantiate the certifications contained in the Annual Certification. A copy of any recent third party audits (FNMA, FHLMC, HUD, etc.) will be reviewed by the Buyer to verify there are no disciplinary actions taken by any of the agencies, including either suspension or termination of the applicant. A copy of any recent rating agencies reviews (Fitch, Moody’s, S&P, etc.) will be reviewed by the Buyer to notate any weaknesses found within said review.

The Servicer must submit an executed Regulatory Officer’s Certificate substantially in the form of WAMU 31476. The Accountants’ Statement required to be delivered under this Servicing Guide must be prepared by a firm of independent public accountants that is a member of the American Institute of Certified Public Accountants and shall contain a statement to the effect that, based on an examination conducted by such firm in compliance with the Uniform Single Attestation Program for Mortgage Bankers (“USAP”). On or after January 1, 2006, the Servicer will also be required to submit an Attestation in accordance with Section 1122 of Regulation AB: 17 CFR 229.1100-1123, as such regulations may be amended from time to time, the assertion of management of the Servicer that it has complied with the minimum servicing standards identified in the USAP or Section 1122 of Regulation AB is fairly stated in all material respects, except for (s) such exceptions as such firm shall believe to be immaterial, and (ii) such other exceptions as shall be set forth in such statement. The Company shall also cooperate fully with Washington Mutual to deliver to Washington Mutual, and to any of its assignees or designees in the format specified in Washington Mutual’s Servicer Guide, any and all statements, reports, certifications, records and any other information necessary, in Washington Mutual’s good faith determination, to be required to permit Washington Mutual or its assignees/designees to comply with the provisions or Regulation AB 17 CFR 229.1100-1123, together with such disclosures relating to the Company acting in its capacity as Seller, the Company acting in its capacity as Servicer, the Mortgage Loans or the Company acting in its capacity as Servicer servicing the Mortgage Loans reasonably believed by Washington Mutual, its assignee or its designee to be required for such transaction. Each of the updated, audited financial statements, the Annual Certification, the Regulatory Officer’s Certificate and the Accountant’s Statement required under this Servicing Guide must be sent to the address noted on Appendix B in this Guide.

101.06 Periodic Audit The Buyer reserves the right to conduct periodic audits of the Servicer’s books and records relating to any mortgage serviced by the Servicer or on behalf of the Buyer and of the Servicer’s mortgage servicing practices and procedures. The Servicer must cooperate with such audits and provide access to the Buyer and its agents to the Servicer’s offices, books and records at reasonable times during the Servicer’s normal business hours. In addition, if so requested by the Buyer at any time during

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Section 101. Servicer Eligibility

101-4 Servicing Guide: Loan Administration (Rev. 12/11/08)

the year, the Servicer will provide the Buyer with evidence of its current compliance with all eligibility requirements as described in Section 101.01.

101.07 Agency Audit Reporting Requirements

In the event the Servicer is audited by an agency such as FNMA, FHLMC, HUD, etc., and any rating agency such as Fitch Ratings, Inc., Standard &Poor’s Rating Services, or Moody’s Investor Services; the Servicer must cause the Buyer to receive copies of the audit report within 15 calendar days of the Servicer’s receipt of the audit report from the applicable agency and/or rating agency. In the event disciplinary action is taken by such agency, including either suspension or termination of the Servicer, the Buyer must be notified in writing within 3 business days of Servicer’s receipt of such notice.

101.08 Termination of Servicing Privileges

Without limiting the Buyer’s right to take whatever action it deems appropriate to protect its interests and enforce its rights, the Buyer may suspend or terminate a Servicer’s privileges as set forth below.

A. Servicing Termination for Cause For any of the following reasons, the Buyer may, at its discretion, declare an immediate termination and forfeiture of a Servicer’s servicing privileges:

• Any failure by the Servicer to deliver or cause to be delivered the Annual Certification, the Regulatory Officer’s Certificate, or the Accountants’ Statement required pursuant to Section 101.05 of this Servicing Guide.

• Any failure by the Servicer to deliver or cause to be delivered, in the format outlined under Regulation AB Exhibits Section 501 of this Servicing Guide, any requested documentation, which the Buyer has determined to be required to comply with Regulation AB: 17 CFR 229.1100-1123 as required pursuant to Section 101.05 of this Servicing Guide.

• Any failure by the Servicer to deliver or cause to be delivered the SOX Certification/Officer’s Certificate – Backup 302 Certification.

• Any failure by the Servicer to deliver or cause to be delivered the SAS 60 internal reports.

• Any failure by the Servicer to deliver or cause to be delivered a coy of the balance sheet, income statement and changes in financial position for the Seller and its parent company, if any, covering the most recent fiscal year which, in each case, have been audited by independent public accountants

recognized in the geographic area in which the Seller operates.

• The Servicer’s fidelity bond and/or errors and omissions insurance is canceled and no replacement coverage is obtained.

• The Servicer fails to remit the appropriate funds or make the appropriate funds available for ACH withdrawal by the Buyer on any date which funds are due from the Servicer.

• The Servicer fails in four consecutive months to forward required pool accounting reports to the Buyer by the date on which such reports are due.

• The Servicer fails to follow specific instructions from the Buyer regarding the servicing of a particular mortgage.

• The Buyer discovers the Servicer has misrepresented facts related to the Eligibility Requirements set forth in Section 101.01 in its initial application for approval as a Servicer or in any information related to its Annual Certification.

• The Servicer is found to have acted with conscious disregard or in a negligent manner with respect to the Buyer’s or its assignee’s interests in a mortgage.

• The Buyer considers such suspension or termination necessary to protect its interest or enforce its rights.

• The Servicer fails to meet any of the eligibility requirements set forth in Section 101.01.

• The Servicer sells, transfers, subcontracts, pledges, collateralizes, or encumbers any portion of its servicing rights hereunder without prior approval from the Buyer.

• The Servicer has breached any representations, warranties, or obligations set forth in the Servicing Guide.

• The Servicer has pledged, sold, transferred or encumbered any servicing fee income or rights without the prior written consent of the Buyer, in violation of Section 102.03.

• The Servicer’s insolvency, the adjudication of the Servicer as a bankrupt, the appointment of a receiver for the Servicer, the Servicer’s execution of a general assignment for the benefit of its creditors, or any other change in the Servicer’s financial status that, in our opinion, materially and adversely affects its ability to provide satisfactory servicing of the mortgages. (If any of these events should occur, no interest in any mortgage or pool of mortgages shall be deemed an asset or liability of the Servicer’s successors or assigns, nor shall any interest pass by operation of law without our consent.)

• The finding by a court of competent jurisdiction that the Servicer, or any of its principal officers, has

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Section 101. Servicer Eligibility

Servicing Guide: Loan Administration 101-5 (Rev. 12/11/08)

committed an act that constitutes civil fraud, or the conviction of the Servicer or its officer(s) for any criminal act that is related to the Servicer’s mortgage servicing activities, if the Buyer believes that such act materially and adversely affects the Servicer’s reputation or the reputation or interests of the Buyer.

If the Buyer declares a forfeiture of servicing rights for any of the reasons set forth above, no compensation will be paid to the Servicer and such servicing privileges shall immediately terminate and revert to the Buyer without further action by any party, or, at the Buyer's discretion, the Servicer shall, without compensation, transfer its servicing portfolio to a Buyer-approved Servicer within 60 days of notification of termination. In the event of a termination under this Section 101.08 A, the Servicer shall promptly deliver all documents, files, records (including computerized records), and monies (e.g., escrow funds) to the Buyer or its designee.

B. Other Servicing Terminations The Buyer may terminate a Servicer’s servicing rights for cause for reasons which are considered less serious than those set forth in Section 101.08 A. In addition, the Buyer may terminate a Servicer’s servicing rights without cause. In each of these situations, once the Buyer notifies the Servicer that its Servicing Contract is being terminated; the Servicer has 60 days in which to sell the Buyer’s servicing portfolio to a Buyer approved Servicer. The Buyer’s written approval of the transaction must be obtained before the transfer. The Servicer is responsible for all costs incurred by the transfer and may retain any fees involved in the transaction. If the Servicer does not arrange a voluntary transfer, the Buyer and Servicer will mutually determine the current fair market value of the servicing being terminated. The fair market value is the purchase price for the involuntary transfer and sale of servicing to the Buyer. If the Buyer and Servicer cannot agree on a fair market value, then each one will select an unaffiliated, nationally recognized servicing broker, and those two brokers will independently estimate the current fair market value. The average of the estimates provided by the brokers will be used as the current fair market value. The fair market value is the purchase price for the involuntary transfer and sale of servicing to the Buyer. The Buyer and Servicer will be responsible for the cost of their respective broker’s valuation solicited by such party. In the event of a termination under this Section 101.08 B, the servicer shall promptly deliver all documents, files, records (including computerized records), and monies (e.g., escrow funds) (i) to the Buyer-approved servicer to

whom the terminated Servicer has transferred the servicing privileges, if such a transfer has occurred within the prescribed time period or (ii) to the Buyer or its designee, if the servicing privileges have not been transferred by the terminated Servicer within the prescribed time period.

C. Remedies Cumulative All rights and remedies provided to the Buyer in this Servicing Guide are in addition to any other right or remedy available to the Buyer under the Servicing Contract or afforded by law or equity, and may be exercised concurrently with, independently of, or in succession to, such other rights, and such rights and remedies shall inure to the benefit of the Buyer, its successors and assigns. The failure of the Buyer to exercise any of its remedies does not constitute a waiver of that remedy in the future in connection with the same or any other breach or default by the Servicer.

D. No Right To Damages Our decision to terminate a Servicer's servicing privileges, or the entire Servicing Contract does not entitle the Servicer to recover any exemplary, punitive, or consequential damages. If appropriate we may offset any monies the Servicer owes us at the time of the termination against any applicable servicing compensation, purchase proceeds, or other funds we owe the Servicer, all as further provided in Section 403.03.

E. Compliance Any Servicer who is not in compliance with the request for documentation as part of the periodic review may be subject to suspension/termination.

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Section 101. Servicer Eligibility

101-6 Servicing Guide: Loan Administration (Rev. 12/11/08)

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Section 102. Compensation and Subcontracting

102-2 (Rev. 05/16/08) Servicing Guide: Loan Administration

102.01 Servicer Compensation As compensation for servicing the Buyer’s loans, the Servicer retains servicing fees, late charges, assumption fees, and some fees charged for special services. These fees are payable to the Servicer from the time the Buyer purchases a loan until it is paid in full, as long as the Servicer collects the mortgage payments. Servicing fees at liquidation are payable only from interest collected at liquidation. Refer to Section 302.02 for full details on accounting of servicing fees.

A. Servicing Fees For each fixed rate loan serviced for the Buyer, the Servicer retains a servicing fee from interest actually collected with respect to such loan made up of the difference between the mortgage interest rate and the net rate to the Buyer. Such fee is also payable when liquidation funds are received from the borrower, whether derived from a foreclosure sale, mortgage insurance proceeds, or a third party sale. The net rate is defined as the rate of interest payable to the Buyer on each loan and will be agreed at the time the commitment to purchase the loan is entered into by the Buyer. The servicing fee will be established at the time the mortgage loan is sold by the Seller to the Buyer and may be subsequently changed as agreed upon by the Buyer and the Servicer. With respect to most adjustable rate mortgages (ARMs), the servicing fee is the difference between the gross margin stated in the mortgage Note and the net margin to the Buyer agreed upon at the time the commitment to purchase the loan is entered into by the Buyer. The servicing fee for an ARM loan will be retained by the Servicer from interest actually collected with respect to such loan. The servicing fee will be established at the time the mortgage loan is sold by the Seller to the Buyer and may be subsequently changed as agreed upon by the Buyer and the Servicer. However, if an adjustable rate loan converts to a fixed rate loan, the servicing fee may not exceed the original servicing fee on the ARM Note. If the mortgage interest rate includes primary mortgage insurance premiums, the minimum servicing fee must not include these premium amounts.

B. Late Charge Provision The Servicer is authorized to collect and retain late charges provided for in the note or security instrument which comply with applicable state law. If the state law does not permit the charge provided for in the Note or Security Instrument, the maximum amount allowable pursuant to state law should be used. The late charge should be computed only on the principal and interest installment, not on the full monthly payment. Late charges must be

collected from the borrower, and may not be collected from the escrow account, deducted from a monthly installment, or capitalized.

102.02 Subcontracting or Transfer of Servicing

A Servicer may not outsource or subcontract any servicing function, sell, pledge or transfer its responsibility for servicing any loan serviced on behalf of the Buyer in whole or in part without prior written approval from the Buyer. With respect to outsourcing or subcontracting of any servicing function to any vendor or other provider, the Servicer must identify the party that will be performing the servicing function, describe the scope of its responsibilities and provide such other information as the Buyer may request, including without limitation information necessary to determine whether such party’s certification of compliance with servicing criteria may be required in connection with certain transactions. Any request for subcontracting or the transfer of servicing must specify the reason for the request, be accompanied by a Trial Balance Sheet (WAMU 4018) and a copy of the Request for Transfer of Servicing (WAMU 3008) providing information on the qualifications of the proposed transferee. This notification should be received by the Buyer 60 days prior to the proposed transfer or subcontractor’s commencement of subcontracting activities, as applicable. The proposed Servicer must meet all of the Buyer’s eligibility requirements as stated in Section 101.01 and have executed a Washington Mutual Mortgage Securities Corp. Selling and Servicing Contract. All outstanding obligations of the Servicer to the Buyer must be satisfied prior to any transfer. The Servicer will be advised of the Buyer’s decision and any other conditions to be met for approval. If the request is approved, the Servicer and the proposed transferee must execute the Request for Transfer of Servicing, the Servicing Agreement signed by the Servicer and the proposed transferee, the original Custodial Account Forms (4001, 4002, 4004, 4006 and 4014 for buydowns) and consummate the transfer according to the Buyer’s specifications within 60 days of the approval date. A $500 transfer fee is due the Buyer immediately upon the Buyer’s approval of the transfer. An approved Servicer will not be relieved of its obligations pursuant to its original contract with the Buyer by establishing a subcontracting relationship with another party. Any transfer or subcontracting without the Buyer’s written consent may result in suspension or termination of the Servicer’s privileges and forfeiture of servicing rights for existing loans. As a condition to approving any request to transfer servicing, the Buyer will require the transferee to assume all of the Servicer’s servicing warranties and obligations

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and all of the Seller’s representations, warranties and obligations as set forth in the Seller Guide, and will require the transferee to enter agreements which evidence the assumption of such representations, warranties and obligations. The Servicer and the transferee will also be obligated, jointly and severally, to indemnify and hold harmless, the Buyer, its successors and assigns against all losses, claims, costs and expenses (including reasonable attorney’s fees) that may arise against the Buyer, its successors and assigns, from the failure to comply with applicable laws and regulations related to the transfer of servicing.

102.03 Pledge or Transfer of Servicing Income

The pledge, sale, transfer, or encumbrance of any servicing fee income or rights without the prior written consent of the Buyer is prohibited. Any purported sale, transfer or pledge is grounds for an immediate termination of servicing rights for cause pursuant to Section 101.08 and shall be ineffective to confer upon any purported transferee, pledge or other right, title or interest in such income or servicing.

102.04 Merger or Consolidation of Servicer

Any entity into which the Servicer is merged or consolidated, or any corporation resulting from any merger, consolidation or conversion to which the Servicer is a party shall be deemed the successor to the Servicer and shall succeed to all of the Servicer’s rights and obligations under the Selling and Servicing Contract, provided that the successor meets the eligibility criteria set forth in Section 101.01 and complies with the transfer of servicing requirements, as specified in Section 102.02 of this Servicing Guide. The Buyer, in its sole discretion, may reject any such successor and may terminate the Servicer’s servicing privileges hereunder as of the effective date of such merger or consolidation. Such termination shall be deemed a termination for cause under Section 101.08 A hereof, and the Buyer shall not be obligated to compensate the Servicer or its successor for such termination.

102.05 Notification of Significant Changes The Servicer must send the Buyer written notice of any contemplated major changes in its organization, including with such notice copies of any filings with, or approvals from, its regulators. The Buyer requires notice of, among other things, the following significant changes relating to the Servicer: 1. any mergers, consolidations or reorganizations; 2. any direct or indirect substantial change in ownership.

An “indirect change in ownership” includes any

change in the ownership of the Servicer’s parent, any owner of the parent, or any beneficial owner of the Servicer that does not own a direct interest in the Servicer;

3. any change in corporate name; 4. any change from a federal charter to a state charter (or

vice versa) if the Servicer is a savings and loan association or a bank;

5. a material adverse change in financial condition; and 6. the sale of all, or substantially all, of the Servicer’s

assets or a line of business.

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Section 103. Administrative Responsibilities

Servicing Guide: Loan Administration 103-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

103.01 Internal Audit Controls The Servicer is responsible for maintaining accurate records and books of account and an adequate system of audit and internal controls. The Servicer must promptly notify the Buyer in writing of any material adverse change in the financial condition of the Servicer and of any facts or circumstances which could adversely affect the prospects for timely remittance of principal and interest payments on any loan or the ability of the Servicer to service any loan. For adjustable rate mortgages, the Servicer must ensure it has systems and procedures in place which can adequately support the ongoing servicing requirements of any adjustable rate mortgage program of Buyer under which it services. Because of many variables and options permitted under the Buyer’s adjustable rate mortgage programs, the Servicer must closely monitor these loans. It is the Servicer’s responsibility to enforce each adjustable rate loan according to its terms. This includes making accurate changes to the interest rate and monthly payment amount and communicating these changes on a timely basis to the borrower and to the Buyer on the ARM Adjustments Report (WAMU 4013). This also includes accurate calculation of the net rate to the Buyer following each adjustment date. For complete details on the requirements for each adjustable rate mortgage program, refer to the Seller’s Guide and all applicable program announcements.

103.02 Maintenance, Custody and Ownership of Loan Files

For all loans sold to the Buyer, the Seller will have sent to the appropriate Custodian the following original documents within 120 days of purchase:

• Original note evidencing the obligation of the borrower, or a lost note affidavit accompanied by a certified copy of the lost note and an agreement by the Servicer to indemnify and hold the Buyer harmless from any loss (including reasonable attorney’s fees) suffered by the Buyer due to the lack of the original note

• Original recorded security instrument and all applicable riders or a fully recorded legible reproduction thereof originally certified to by the applicable recording office

• Original recorded assignment of the security instrument or a fully recorded legible reproduction thereof originally certified to by the applicable recording office

• Original recorded intervening assignment(s), if applicable or a fully recorded legible reproduction

thereof originally certified to by the applicable recording office

• Original or an originally certified copy of a final title insurance policy and any required waivers or attorney’s opinion

• Original recorded assumption, modification, consolidation, extension or substitution agreements, including any modification agreement converting an adjustable rate mortgage to a fixed rate mortgage, if applicable or a fully recorded legible reproduction thereof originally certified to by the applicable recording office.

The Final Documentation Transmittal (WAMU 2009) must be completed and stapled on top of the documents regardless of when submitted to the Loan Purchase Center. Refer to Appendix B for the current address. Additional original documents may be required to be maintained in the Buyer’s files per specific mortgage programs.

A. Individual Loan Files The Servicer must maintain an individual file for each loan it services for the Buyer. The file must include any papers or records which are required to service the loan properly and any documents which attest to the validity of the loan. The file should include, but is not limited to, these documents: 1. All credit file documentation (FNMA forms

referenced as industry standard, however, forms equivalent to FNMA’s may be substituted):

• Underwriting Approval Certificate (WAMU 2010) or the pool insurance certificate from a Buyer approved pool insurer. Refer to Appendix D of the Seller Guide for a list of approved pool insurers.

• Transmittal Summary (FNMA 1008) • Uniform Residential Loan Application (FNMA

1003) typewritten (signed and dated by the borrower if loan is closed)

• Statement of Assets and Liabilities (FNMA 1003A) typewritten, if applicable

• Original handwritten Uniform Residential Loan Application (FNMA 1003) signed and dated by the borrower

• Complete mortgage payment history • Verification of payment history on previous

mortgage, if applicable • Verification of rent, or copies of 6 month’s

canceled rent payment checks (front and back), if applicable

• Residential Mortgage Credit Report

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• Verification(s) of Deposit (FNMA 1006) • Verification(s) of Employment (FNMA 1005) • Verification(s) of Previous Employment

(FNMA 1005), if applicable • Copy of most recent YTD paystub(s), if

applicable • Copies of W2s for the last 2 years, if applicable • Copies of signed personal Federal Income Tax

Returns (1040s) for last two years with all supporting schedules, if applicable

• Self-employed Income Analysis (FNMA 1084) for self-employed borrowers, if applicable

• Year-to-Date Profit and Loss Statement and a balance sheet if more than three months have passed since the end of the last tax year, if applicable

• Business Credit Report, if applicable • All applicable signed tax returns for self-

employed borrowers or commissioned employees including, but not limited to, 1040s with all schedules, K-1s, partnership returns and corporate returns

• Agreement of Sale, Sales Contract, or Purchase and Sales Agreement, and Escrow Instructions, including amendments

• Certification of Completion and Value, either as a letter or as a form which provides the necessary information, if applicable

• Uniform Residential Appraisal Report (FNMA 1004) or Appraisal Report - Individual Condominium or PUD Unit (FNMA 1073) or Appraisal Report - Small Residential Income Property (FNMA 1025)

• Recertification of Appraisal Report, if applicable

• Certification and Statement of Limiting Conditions (FNMA 1004B)

• A street map showing the location of the subject property and of all comparables used

• An exterior building sketch of the improvements indicating the dimensions. A floor plan sketch is not required unless the floor plan is functionally obsolete, resulting in a limited market appeal for the property in comparison to competitive properties in the neighborhood. For units in condominium or cooperative projects, interior perimeter unit dimensions are required instead of exterior building dimensions

• Original color photographs of the front, street, and rear views of the subject property

• Original color photographs of the front view of each property used as a comparable

• Single-Family Comparable Rent Schedule (FNMA 1007) or Operating Income Statement (FNMA 216), for two-family properties, if applicable

• Copy of the canceled earnest money check (front and back), if applicable

• Any other data - as an attachment or addendum to the appraisal report form - necessary to provide an adequately supported estimate of market value

• Borrower’s Certification and Authorization Letter (WAMU 2006, or FNMA equivalent)

2. All closed loan documentation (FNMA forms referenced as industry standard, however, forms equivalent to FNMA’s may be substituted):

• Mortgage Submission Voucher (WAMU 2001) completed in full

• Bailee Letter/Trust Receipt, if applicable • Underwriting Approval Certificate (WAMU

2010), original copy which was returned to the Seller after underwriting, or the pool insurance certificate from a Buyer approved pool insurer. Refer to Appendix D of the Seller Guide for a list of Buyer approved pool insurers.

• Evidence that all underwriting conditions of loan approval have been satisfied, if any existed (original and one copy of each condition is required)

• Copy of the note and any applicable riders/addenda

• Copy of any assumption, modification, consolidation, extension or substitution agreements, including any modification agreement converting an adjustable rate mortgage to a fixed rate mortgage, if applicable

• Copy of the security instrument and any required riders/addenda

• Copy of the assignment of the security instrument and intervening assignment(s), if applicable

• Copy of the title insurance policy • Signed copy of the original ARM disclosure, if

applicable • Certified copy of the signed Settlement

Statement (HUD-I) or, in escrow states, the Escrow Agent’s Estimated Settlement Statement which is executed by the borrower and certified as a true and correct copy of the original

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• The original survey/plat drawing. (If not customary, an endorsement to the title policy insuring against circumstances which would have been shown on a survey is required.) If an approved Master Title Policy is used with this endorsement, no survey will be required

• Signed, certified copy of the original Good Faith Estimate of closing costs

• Signed, certified copy of the original Truth-in-Lending, Right of Rescission statement

• Original mortgage insurance certificate and endorsements, signed by the Seller, if applicable

• Original recorded power of attorney or certified true and correct copy of the power of attorney, if applicable

• Copy of the temporary buydown schedule, if applicable

3. Documentation showing when and by whom the loan was approved and the terms and conditions of such approval.

4. Documentation showing the date, amount, purpose, and recipient of every disbursement of the proceeds of such loan, whether such disbursements are made directly by the Servicer or through escrows or other persons or concerns.

5. Documentation covering all modifications of the original mortgage contract and showing the appropriate approval of each such modification.

6. Documentation covering all releases of any portion of the collateral supporting the loan, showing: the part of the premises involved; the consideration, if any, to such institution; and a record of appropriate approval of each such release.

7. Water or irrigation company stock certificates. 8. Ledger sheets. 9. Payment records. 10. Insurance claim files and correspondence. 11. Collection, Foreclosure/REO files and

correspondence. 12. Current and historical computerized data files,

whether generated by the Servicer or by a service bureau.

13. Originals or copies of all disclosures required by state and federal law and regulation.

All loan papers and documents necessary to document or properly service any of the Buyer’s loans will remain the Buyer’s property or the property of the Buyer’s designee or assignee at all times. Records in the Servicer’s possession are retained in a custodial capacity only.

These records should be maintained for six (6) years after the loan has liquidated. Upon the Buyer’s written request, the Servicer must immediately deliver all mortgage records and documents to the Buyer or the Buyer’s designee. This delivery must be accompanied by a list identifying each loan by its Buyer loan number. The Buyer will not be required to execute trust receipts or to participate in the delivery of the records and documents. If the Servicer has microfilmed or otherwise condensed any of the mortgage records and documents, the Servicer must promptly reproduce any or all such mortgage records at no cost to the Buyer, or it’s designee or assignee, upon request.

B. Microfilmed Records In lieu of retaining copies and originals as required above, the Servicer may maintain its loan files in the form of microfilm, microfiche or magnetic media, provided that the following requirements are met: 1. The copies or magnetic media are made in the

regular course of business pursuant to an established written policy of the Servicer applying to all of its loan files:

2. The copies or magnetic media are made by a process that accurately reproduces or forms a durable medium for reproducing the original;

3. The copies or magnetic media are clearly marked to indicate the Buyer’s ownership of the loan and the Buyer loan number assigned to it;

4. The Servicer maintains the copies or magnetic media in a manner that permits ready transfer to legible hard copies of the material relating to the loans serviced for the Buyer;

5. A reader/copier that can be used by the Buyer representatives is maintained in the same office where the copies are stored; and

6. The Servicer makes back-up copies and retains them off-site to protect against fire and other hazard losses.

The Servicer must bear the entire cost of restoring loan files and related documents transferred to microfilm, microfiche or magnetic media if the copies or magnetic media becomes damaged or lost for any reason, or if legible hard copies are requested by the Buyer.

C. Mortgage Account Records Permanent mortgage account records, trackable by the assigned Buyer loan number, must be maintained for each loan. The Buyer does not specify the particular system or forms to be used for the mortgage account records, but requires the system be capable of producing, at any time for any Buyer loan, an account transcript itemizing the following sequence:

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1. The date, amount, and distribution of each installment by due date,

2. Other transactions affecting the amounts due from or to the borrower, and

3. The latest outstanding balances of principal and interest, escrow accounts for taxes and insurance, buydown accounts, and unapplied payments.

The system must also provide for prompt disclosure of any overdraft in the account balance of deposits for the payment of taxes and insurance. The account records on the Buyer’s loans should be maintained according to sound and accepted accounting practices and in a way which will permit the Buyer’s representatives to examine and audit the account records upon request.

D. Request for Data The Buyer reserves the right to request loan level information for loans being serviced. Information that is housed on the Servicers’ system of record should be provided as requested by fax, mail, or email within 3 business days or within a reasonable amount of time based on the quantity and complexity of the data requested.

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Section 201. Loan Servicing

Servicing Guide: Loan Servicing 201-1 (Rev. 05/16/08)

201.01 Servicing Overview This section briefly outlines the Servicer’s responsibilities when servicing loans for the Buyer. For full instructions on servicing and loan accounting, refer to the appropriate sections of this Guide. For a full discussion on selling loans to the Buyer, refer to Section 503 of the Seller’s Guide. The use of the Buyer’s forms will also be explained in those sections and detailed instructions are included on some forms. 1. The Servicer must service the loans according to

industry standards, the terms of the mortgage note and security instrument and applicable state and federal law and regulation.

2. Payments must be collected and applied according to the amortization schedule and the escrow requirements of each loan. Application of partial payments is not allowed unless a pre-approved relief plan is involved. Generally, the Buyer purchases only interest-in-arrears loans, repayable in equal monthly payments, except for the last payment, based on a 30-day month/360-day year, reducing the principal balance to zero at the end of the term. Any form of capitalization is not allowed under the Buyer’s purchase programs.

3. The Servicer must establish and maintain separate custodial accounts for (i) principal and interest (the “P&I Custodial Account”), and (ii) taxes and insurance (the “T&I Custodial Account”). Unless otherwise approved in writing by the Buyer, the funds in these accounts must be kept separate from the Servicer’s general assets. The Servicer’s records must clearly show the respective interests of the Servicer and the Buyer in all accounts and of each individual borrower in the tax and insurance accounts.

4. The accounting period cutoff date is the calendar month-end, and the Servicer must submit accounting reports no later than the fifth (5th) business day of the following month. The remittance withdrawal is originated by the Buyer via the Automated Clearing House (ACH) network on the 20th calendar day of each month or on the preceding business day. The monthly withdrawal by the Buyer will include:

• All scheduled principal and interest payments due the first day of the current month. Delinquent payments are included even if they have not been collected from the borrower. Prepaid payments are not included until they are due.

• All additional principal and interest collected in the previous calendar month representing exception activity (e.g., liquidations of any type or partial prepayments of principal) as reported to the Buyer via the accounting report.

• Collection of unscheduled principal must be

properly applied to the outstanding mortgage loan principal balance or the related mortgage loan may not properly amortize. Servicers must calculate and apply a curtailment ensure that the unpaid principal balance of the mortgage loans properly amortizes.

5. The Servicer must notify the Buyer of the status of

all loans 90 days or more delinquent. Information regarding such mortgage loans must be provided by the Servicer to the Buyer electronically, no later than the fifth (5th) business day of the month.

6. The Servicer must provide the Buyer with

responses to all delinquency, foreclosure bankruptcy and REO exception reports via electronic format no later than the tenth (10th) business day of the month.

7. The Servicer must ensure that each property securing a loan is covered by a hazard insurance policy at all times.

8. The Servicer must maintain tax records and forward timely tax payments to the respective taxing authorities, if applicable.

9. The Servicer must maintain records of all loans which carry primary mortgage insurance and flood insurance. It must also ensure timely payment of the premiums for these insurance coverages.

10. The Servicer is obligated to advance principal and interest funds if a loan becomes delinquent, escrow funds if there is an escrow shortage, and funds for emergency repairs, as necessary.

11. When a reasonable effort to cure a defaulted loan is unsuccessful, the Servicer must recommend liquidation under accepted servicing procedures. Liquidation may be accomplished by foreclosing on the property, by accepting a deed-in-lieu of foreclosure, or through a preforeclosure sale. The Buyer must be provided with written notification for all loans in which the Servicer initiates a foreclosure referral. Principal and interest advances must continue through foreclosure and REO until the mortgaged property has been fully liquidated and removed from the pool.

12. Shortly after the Buyer purchases a loan, it is placed into a mortgaged-backed pool. The Servicer

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may never change the maturity date, loan interest rate or other terms of a Note/Mortgage on any loan sold to the Buyer, and only changes to the loan interest rate and payment amount for adjustable rate loans. In addition, the Servicer may not repurchase a loan to facilitate a modification. This prohibition of repurchase to facilitate a modification extends to any loan which goes into default and subsequent foreclosure.

13. Upon receipt of liquidation funds or notification of foreclosure referral, the Buyer will release the original documents (if documents are needed for foreclosure, the Buyer will release the mortgage documents upon full reinstatement of loan or certification from officer that documents are no longer needed).

14. The Servicer must include the WAMU assigned servicer number on all reports and correspondence sent to the Buyer in order to identify the loans being serviced.

15. All correspondence, loan accounting and loan servicing reports should be sent to the appropriate address, as listed in Appendix B.

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Section 202. Tax and Insurance Escrows

Servicing Guide: Loan Servicing 202-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

202.01 Borrower’s Escrow Account

A. Establishing the Account When consistent with the Servicer’s normal servicing practices and not prohibited by law, the Servicer must establish an escrow account into which the borrower deposits monthly amounts sufficient to pay estimated mortgage and hazard insurance premiums, including renewal premiums, taxes, ground rents, special assessments, premiums for mortgage life or disability insurance and other charges as they become due. These items will then be paid from this account. If the Servicer collects and disburses additional funds for the payment of other insurance premiums, such as life, major medical, disability, mortgage cancellation, or other assessments which the Buyer does not require as part of the borrower’s monthly installment, the Servicer must ensure:

• The borrower’s monthly installment payment is not returned if the borrower fails to remit the additional funds.

• Funds from the borrower’s escrow account are not used to make up any shortages caused by the borrower’s failure to pay the additional funds.

• The borrower’s monthly billing or coupon distinguishes between the amount of the monthly installment required by the Buyer and the amount of the additional funds.

• Funds paid by the Servicer are not capitalized. The Servicer is solely responsible for the administration of the borrower’s escrow account.

B. Maintaining the Escrow Account The Servicer must promptly pay all bills for escrow items. The Servicer holds the Buyer, its successors and assigns, harmless from all penalties, losses, or damages resulting from the Servicer’s failure to fulfill this responsibility. For any mortgage loan which has amortized down so that the LTV is 80% or less, the Servicer may waive the borrower’s future obligation to deposit amounts in the tax and insurance reserve provided:

• The unpaid principal balance of the note divided by the lesser of the original appraised value of the property or the sales price is 80% or less;

• The mortgage is at least 12 months old; and • The mortgage has not been more than 30 days

delinquent during the preceding 12 months.

If the Servicer waives the right to collect escrows, the Buyer’s right to enforce the requirement if the borrower fails to act responsibly must be retained. For specific details on waiving primary mortgage insurance, refer to Section 203.04 A.

C. Non-Escrowed Loans If the Servicer does not collect escrow funds on a mortgage loan, the Servicer must require proof of payments of all taxes, ground rents, assessments, insurance or other charges, or use other means commonly used in the mortgage industry to satisfy itself that such items are paid on a timely basis. The Servicer’s Errors and Omission Policy must also insure the Servicer in the event losses are incurred if taxes or insurance premiums are not paid when due. The Servicer must notify the Buyer immediately of any item not paid on a timely basis and recommend to the Buyer a course of action under such circumstances. The Buyer retains the right to enforce the tax and insurance reserve requirements if the borrower fails to act responsibly.

D. Escrow Advances When funds held in an escrow account are insufficient to pay taxes, assessments, ground rents, or other charges which are or may become a lien on the mortgaged property, primary mortgage insurance premiums, hazard insurance premiums, water or irrigation company stock assessments or charges, the Servicer must advance its own funds to the individual borrower’s account. The Servicer must disburse the necessary funds from the borrower’s escrow account even if the disbursement causes a deficit balance for the individual borrower.

E. Responsibility for Paying Interest The Servicer is responsible for paying any interest on the borrower’s escrow account as required by state law. The Buyer will not reimburse the Servicer for any interest or earnings paid to the borrower or credited to the borrower’s account.

F. Analysis of the Account If an escrow account is established, the Servicer must determine the amount of the monthly deposit to be made by the borrower and provide him or her with an analysis of this account at least annually. If a surplus exists in a borrower’s escrow account, such excess may be taken into consideration in fixing the amount to be collected for the account for the following year or a refund to the borrower may be made if the loan is current. If the surplus is sufficient or is supplemented by an additional collection, it may be used to pay one or more full installments of principal and interest or an additional principal payment, provided such actions are consistent with the terms of the loan documents and the wishes of the borrower.

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The Servicer may retain a surplus in the borrower’s escrow account to the extent permitted by the loan documents and all applicable laws. An average escrow balance must be reflected on the annual analysis and provided to the borrower upon request.

G. Annual Statement to the Borrower At the end of the calendar year, the Servicer must send the borrower an annual statement of the borrower’s account, including the following: • The balance of the escrow account at the beginning

of the year, • The total amount deposited into the escrow account

by the borrower during the year, • The total amount applied to the principal, • The total amount applied to interest, • The amount and nature of disbursements made

during the year (including all taxes paid on the borrower’s behalf), and;

• The final balance of all accounts at year-end. Upon the borrower’s request, the Servicer must also provide a detailed ledger analysis of all transactions affecting the borrower’s mortgage payment record and deposit account, showing individual dates, amount and purposes of each debit and credit to the accounts, including the beginning and ending balances.

202.02 Taxes, Ground Rents, Assessments, and Related Charges

The Servicer must maintain accurate records on taxes, ground rents, assessments and other charges which are or could become a lien on properties securing loans serviced for the Buyer. The Servicer should pay such charges before any penalty date and in time to secure the maximum discounts available. The Servicer is responsible for the timely payment of all such bills and must pay all penalties, losses, or damages resulting from it failure to discharge this responsibility. Similarly, penalties for the late payment of taxes cannot be passed on to the borrower unless the borrower directly contributed to the imposition of the penalty.

202.03 Water or Irrigation Stock Certificates

If a property is dependent on a supply of water furnished by a water or irrigation company to its stockholders, the stock certificate must be endorsed by the borrower and retained by the Servicer. The Servicer should pay the assessments or charges for services furnished to the property from the borrower’s escrow account if this practice is customary in the locality. Otherwise, the Servicer must annually determine whether the items have

been paid by the borrower and, if not, should require the borrower to make the payment. If the borrower does not make the payment, however, the Servicer must advance the necessary funds and may create an escrow requirement for future installments. In the event a stock certificate is lost, the Servicer must take whatever action is necessary to obtain a replacement certificate. All fees and expenses will be the sole responsibility of the Servicer.

202.04 Insurance Reserves If the borrower fails to maintain the required hazard insurance coverage, the Servicer must obtain the required coverage and must cause the policy to remain in force as long as the Servicer services the loan. If the Servicer acted as a broker or agent in placing insurance coverage not required by the Buyer, the Buyer will not be responsible for any attorney’s fees and costs resulting from disputes with carriers of such insurance.

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Section 203. Insurance Requirements

Servicing Guide: Loan Servicing 203-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

203.01 General The Servicer must verify that the following insurance coverages are in place at all times for each mortgage:

• Hazard, flood, condominium and PUD insurance in accordance with the terms of this Servicing Guide.

• Primary mortgage insurance in accordance with this Servicing Guide and, if applicable, the Seller’s Guide.

• Title insurance in accordance with the requirements of Section 501 of the Seller’s Guide.

All claims arising under such insurance coverage must be settled or otherwise disposed of by the Servicer, and all such insurance must be maintained at no expense to the Buyer.

A. Evidence of Insurance For each mortgage, the Servicer must maintain the following documentation: 1. For one- to four-family dwellings, an original of the

hazard insurance policy, flood insurance policy (if applicable), and any related endorsement(s).

2. For properties covered under a blanket PUD or condominium association policy, an original of the blanket policy, any flood insurance policy, and any related endorsement(s).

In lieu of a policy, the Servicer may maintain a certificate or other evidence of insurance showing at least the following information: 1. Name of insured and mortgagee (name of insured

owners’ association, unit owner, and unit owner mortgagee if a PUD or condominium unit);

2. Address of mortgaged property; 3. Type, amount and effective dates of coverage; 4. Deductible amount; 5. Any endorsement or optional coverage obtained and

made part of the original policy; 6. Insurer’s agreement to provide at least ten (10) days’

prior notice to the mortgagee (or applicable unit owner mortgagee if for a PUD or condominium unit) before any reduction in coverage or cancellation of the policy; and

7. Signature of an authorized representative of the insurer, if required by law.

The Policy Declarations page of a National Flood Insurance Program (NFIP) policy is acceptable evidence of flood insurance.

The Servicer must possess a specimen of each policy and endorsement for which a certificate or other evidence of insurance is maintained in lieu of the policy or endorsement.

B. Indemnity of Washington Mutual Mortgage Securities Corp.

In addition to all other remedies of the Buyer provided for in the Selling and Servicing Contract and this Servicing Guide, the Servicer will indemnify the Buyer for any loss the Buyer sustains on the property.

C. Insurance Charges Premiums for insurance covering the property will be paid when due by borrowers or the Servicer if the Servicer collects escrow funds for such purposes. Premiums for insurance obtained by a PUD or condominium owners association for the benefit of the PUD or condominium project will be paid by the association as a common expense assessable to all unit owners.

D. Changes in Insurance Requirements The Servicer must require the borrower to obtain appropriate insurance coverage in accordance with the terms of the security instrument when either of the following conditions exists: 1. The Servicer becomes aware that existing coverage

does not adequately protect the property; or 2. The area where the property is located was not

subject to flood insurance requirements at inception of the mortgage or when the Buyer purchased the mortgage, but has now been classified as a Special Flood Hazard Area and the Servicer has become aware of such classification.

The Servicer must verify that adequate coverage has been obtained and remains in force. If the borrower does not obtain such coverage, the Servicer must do so. The Servicer will then adjust the borrower’s escrow payments accordingly or bill the borrower to recover the advance if the Servicer does not maintain an escrow account for the borrower. If the borrower refuses to reimburse the Servicer, the Servicer may recommend acceleration to the Buyer for the borrower’s default under the terms of the security instrument. If the additional coverage cannot be obtained, the Servicer must immediately make appropriate recommendations to the Buyer.

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The Servicer may authorize the borrower to discontinue flood insurance coverage upon verification of map revision or receipt of a Letter of Map Amendment from the Federal Emergency Management Agency (FEMA).

E. Insurance Loss Settlements Upon notification of loss or damage to the property, the Servicer will monitor and coordinate the claim process with the borrower and the insurer. The Servicer must take appropriate action to: 1. Verify the extent of the loss or damage; 2. Ensure judicious disbursement of insurance

proceeds for the necessary repairs; 3. Protect the priority of the security instrument by

obtaining waivers of materialsman’s or mechanic’s liens;

4. Have a system for the control and disposition of insurance loss drafts, clearly identifying the individual borrower’s account through the T&I Custodial Account. (The Buyer must not be named as a payee on any insurance loss draft. The Servicer must be named on all drafts in excess of $1,000.)

5. Obtain appropriate borrower affidavit reflecting their satisfaction with the quality of the repair work;

6. Document completion of the repairs; and 7. Loss draft funds received must be held in a custodial

account (passbook accounts are not acceptable).

The Servicer must be named as loss payee on insurance drafts in excess of $1,000 and must comply with any applicable law and, where applicable, any requirement of the mortgage insurer. Details concerning the loss or damage and disposition of the insurance proceeds must be recorded in the loan file. The Servicer must obtain the Buyer's approval for use of any outsourcing firm or vendor for the purpose of hazard insurance claims review and settlement. The Servicer need not submit a report and related recommendations to the Buyer unless: • The security instrument is in foreclosure or the

property has been acquired by the Servicer through foreclosure or deed-in-lieu of foreclosure;

• Property damage exceeds $5,000 and the loan is 60 or more days delinquent;

• The property has suffered a total or near total loss; • The Servicer wishes to apply insurance proceeds to

the mortgage instead of repairing the property; or • Insurance proceeds exceed the amounts required to

restore the property to its original condition.

F. Notice of Loss-Condominiums and PUDs The owners’ association of a condominium project must agree in writing to notify the Servicer whenever i) damage to a single unit covered by a mortgage purchased

by the Buyer exceeds $5,000, and ii) damage to common areas and related facilities exceeds $10,000. For PUD projects, the owners’ association must agree in writing to notify the Servicer whenever damage to common areas or related facilities exceeds $10,000.

G. Natural Disaster Losses When a natural disaster (earthquake, flood, tornado, etc.) results in losses or damages to the property, the Servicer must promptly:

• Ascertain the number of such properties; • Determine the extent of the losses or damages; • Secure any abandoned property against vandalism or

the elements; • Assist the affected borrowers in filing for any

disaster relief aid available; • Assist the affected borrowers through counseling

and any appropriate repayment plan; and • Notify the Buyer and make appropriate

recommendations. If the disaster results in uninsured losses, the Servicer must forward a complete report of the findings to the Buyer and recommend a course of action to protect the interests of the Buyer and the borrower. The Servicer is authorized to expend up to $2,500 for emergency repairs as specified in Section 204.02.

203.02 Hazard Insurance

A. Amount of Coverage For one- to four-family residences and individual PUD units, the amount of hazard insurance coverage must at least equal the lesser of: 1. 100% of the insurance value of the improvements,

or 2. The unpaid principal balance of the mortgage

provided it equals the minimum amount required to compensate for damage or loss on a replacement cost basis. If it does not, then coverage which provides the minimum required amount must be obtained.

Coverage for condominium and PUD projects must be 100% of current replacement cost for the project’s facilities, including the individual units in a condominium project or in a PUD project where the blanket policy covers the individual units. The insurance coverage may not be less, however, than the minimum amount required under the terms of coverage to fully compensate for any damage or loss on a replacement cost basis.

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The Servicer must ensure that the property must also be adequately covered even when vacant and, where necessary, must obtain a vacancy permit endorsement.

B. Deductible Amounts Unless a higher maximum amount is required by state law, the maximum deductible must be: 1. For one- to two-family residences and individual

PUD units: $1,000 or 1% of the policy face amount, whichever is less.

2. For PUD common areas and condominium projects: $10,000 or 1% of the policy face amount, whichever is less. If the policy is a blanket policy which also covers the individual PUD units, the deductible related to the individual units should be $1,000 or 1% of the unit’s replacement cost, whichever is less.

The deductible may apply to either fire or extended coverage or to both. For condominium and PUD projects, funds to cover the deductible amounts should be included in the homeowners’ association operating reserve account.

C. Carrier The policy must be underwritten by a company currently rated B/II or better in Best’s Insurance Reports or the coverage must be underwritten by Lloyd’s of London. In addition, the company must be licensed to do business in the state in which the property is located.

D. Mortgagee Clause The Servicer’s name must appear in the mortgagee clause of the hazard insurance policy followed by the phrase, “its successors or assigns.” Washington Mutual Mortgage Securities Corp. should not appear as mortgagee unless the policy coverage would be impaired.

203.03 Flood Insurance Flood insurance is required at all times for any property located in a Special Flood Hazard Area which has federally mandated flood insurance purchase requirements. Properties located in Special Flood Hazard Areas designated by symbols A, AE, A1-30, AH, AO, A99, V, VE and V1-30 require flood insurance. Flood insurance requirements may be waived if i) the improvements are not in a Special Flood Hazard Area even though part of the property (the land) may be, and ii) a letter from the Federal Emergency Management Agency (FEMA) is provided stating the maps have been amended so that the property is no longer in a Special Flood Hazard Area.

A. Amount of Coverage The amount of flood insurance required on all property types is: 1. The lower of the minimum amount required to

compensate for any damage or loss on a current replacement cost basis (or the unpaid principal balance of the mortgage if replacement cost coverage is not available), or

2. The maximum insurance available under the appropriate National Flood Insurance Administration.

B. Deductible Amounts For all property types, unless a higher maximum amount is required by state law, the deductible may not exceed $1,000 or 1% of the policy face amount, whichever is less. For condominium and PUD common areas and each building in a high-rise or vertical condominium project, the deductible may not exceed $5,000 or 1% of the policy face amount, whichever is less. Funds to cover the deductible amount should be included in the homeowners’ association operating reserve account.

C. Condominiums If the property is a condominium and flood insurance is required, the borrower must obtain flood insurance on the individual unit in addition to the insurance which must be maintained by the homeowners’ association as part of the project’s blanket flood insurance policy. The only permissible exceptions to this coverage requirement are: 1. Three (3) story condominium projects with five (5)

or more units where the condominium is participating in the Condominium Master Policy program which became available on January 1, 1989, and is offered by the NFIP. Under this policy, the entire building is covered under one policy, including all units within the building and improvements and betterments within the units which are owned in common. Under the “Condominium Master Policy” program, the maximum amount of building coverage which can be purchased is the actual cash value of the building or the total number of units (residential plus non-residential) in the building times $185,000, whichever is less.

2. The homeowners’ association has insurance coverage on the actual cash value of the building which would sufficiently cover each unit’s market value along with all common areas within the complex in the event of a flood.

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NOTE: Many insuring agents and/or homeowners’

associations will insist they are providing sufficient coverage. Even if the project is insured under the new “Condominium Master Policy”, the Servicer must obtain a copy of the Declaration page of the condominium project’s flood insurance policy to determine that the policy amount is sufficient to cover the market value of all units and common areas.

If the coverage is not sufficient, the borrower must obtain flood insurance on the individual unit in addition to the insurance maintained by the homeowners’ association.

D. PUDs and Townhomes If the property is in a PUD or is a townhome and flood insurance is required, the borrower must maintain flood insurance on the individual unit unless there are improved common areas such as a clubhouse, tennis courts or pools, in which case, flood insurance must be maintained by the homeowners’ association in addition to the borrower’s individual unit coverage. If the PUD or townhome project has only improved or limited common areas such as sidewalks, greenbelts or parking lots, the homeowners’ association will not be required to maintain a flood insurance policy in addition to the borrower’s individual unit policy.

E. Mortgagee Clause The Servicer’s name must appear in the mortgagee clause of the flood insurance policy followed by the phrase, “its successors or assigns.” Washington Mutual Mortgage Securities Corp. should not appear as mortgagee unless the policy coverage would be impaired.

203.04 Mortgage Insurance The Servicer must maintain the primary mortgage insurance coverage which was required for each loan at the time it was initially underwritten and approved for sale to the Buyer. The current mortgage insurance requirements for each mortgage program are described under the applicable mortgage program in the Seller’s Guide. However, the Servicer should be aware that due to current pool criteria, required coverage may vary. Primary mortgage insurance must be obtained from companies maintaining at least a AA rating from Standard and Poor’s Corporation. When mortgage insurance is required, the Servicer must ensure the mortgage insurer meets the Buyer’s criteria. If the Servicer does not maintain the required amount of insurance coverage, replacement coverage must be

obtained by the Servicer at its own expense to conform with the original requirements. The Servicer must send the Buyer evidence of this replacement coverage. If an insured adjustable rate mortgage is converted to a fixed rate mortgage, the Servicer must ensure the appropriate mortgage insurance coverage is maintained. The Servicer must notify the mortgage insurer of the conversion of any uninsured loan, must obtain any amendment needed to convert from ARM coverage to fixed rate coverage, and must send this amendment to the Buyer. If cancellation occurs due to Servicer error the Buyer reserves the right to request repurchase of the loan.

A. Cancellation of Primary Mortgage Insurance

The Buyer will consider cancellation of primary mortgage insurance on a case-by-case basis. Approval is in the sole discretion of the Buyer, is not automatic and will be subject to the applicable State's specific laws and regulations. The following documentation is required:

• Loan history verifying that no payment has been:

• 30 days or more past due in the last 12 months; and

• 60 days or more past due in the last 24 months.

• Copy of the original or current appraisal. Use of current appraisal must be approved by Buyer.

• If the appraisal is the original, the Servicer will warrant that the current value is at least equal to the appraised value.

• A new appraisal must be based on an inspection of both the interior and exterior of the Property. Servicer will warrant that it has reviewed the appraisal and is satisfied that the opinion of value is both reasonable and adequately supported by market data.

• The Servicer may charge the borrower for the cost of a new appraisal.

• Evidence of seasoning. Evidence of two years of seasoning is required.

203.05 Condominium Insurance Prior to the sale to the Buyer of a loan secured by a unit in a condominium, the Servicer must obtain written evidence that the scope and amount of insurance coverage meets or exceeds all local laws, ordinances and regulations covering condominiums and that, in addition, the following minimum requirements for insurance coverage are satisfied:

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A. Scope of Coverage A multiperil type of policy is required covering the entire condominium project. The policy must provide, at a minimum, fire and extended coverage and all other coverage in the kinds and amounts commonly required by private institutional mortgage investors for projects similar in construction, location and use. Coverage must be on a replacement cost basis for at least 100% of the insurable value based on a replacement cost.

B. Boiler Explosion Insurance If a steam boiler is operating on the property, boiler explosion insurance must be in force. This insurance must be evidenced by the standard form of boiler and machinery insurance policy and must provide, at a minimum, $100,000, per accident per location.

C. Special Flood Hazard Insurance If the condominium project is in an area identified by the Secretary of Housing and Urban Development as having special flood hazards, a “blanket” policy of flood insurance must be maintained on the condominium project in the amount of the aggregate of the outstanding principal balances of the mortgages on the condominium units, or the maximum limit of coverage available under the National Flood Insurance Act of 1968, as amended, whichever is less.

D. Name of Insured The name of the insured stated under each required policy must be similar in form and substance to the following:

“Association of Owners of the [Name of Condominium] for use and benefit of the individual owners” (designated by name, if required).

E. Mortgagee Clause Each policy must contain the standard mortgagee clause endorsed to provide that any proceeds will be paid to the Association of Owners of the condominium for the use and benefit of mortgagees as their interest may appear, or otherwise endorsed to fully protect the interest of the Buyer. When a mortgagee clause is not applicable, a certificate must be obtained by the Servicer. This certificate must contain the information required for certificates which is set forth in Section 203.01 A. The certificate must name the Servicer as the certificate holder instead of mortgagee.

F. Fidelity Insurance The condominium owners association must have fidelity coverage against dishonest acts on the part of directors,

managers, trustees, employees or volunteers responsible for handling funds belonging to or administered by the condominium owners association. The fidelity bond or insurance must name the condominium owners’ association as the insured. The coverage must equal the maximum amount of funds held by the homeowners’ association at any one time and must total at least three (3) months of assessments on the entire project, plus reserves. An appropriate endorsement to the policy to cover any persons who serve without compensation must be added if the policy would not otherwise cover volunteers.

G. Public Liability Insurance The condominium owners association must have a comprehensive policy of public liability insurance covering all of the common elements, commercial spaces and public ways in the condominium project. The insurance policy must contain a severability of interest endorsement precluding the insurer from denying the claim of a condominium unit owner because of negligent acts of the condominium owners association or other business unit owners. Coverage must include all other coverage in the kinds and amounts required by private institutional mortgage investors for projects similar in construction, location and use. Liability coverage must be for at least $1 million per occurrence for personal injury and/or property damage.

203.06 PUD Insurance Except as provided in the following sections all coverage in the kinds and amounts required for mortgages in this Servicing Guide is also required for mortgages secured by Planned Unit Development (PUD) and de minimus PUD units.

A. Blanket Insurance Coverage In lieu of maintaining an individual hazard insurance policy on each PUD unit, the PUD corporation, homeowners’ association, or trust may maintain blanket hazard insurance providing, at a minimum, fire and extended coverage and all other coverage in the kinds and amounts commonly required by private institutional mortgage investors for developments similar in construction, location and use. The coverage must be in an amount equal to the full replacement value of all of the PUD units without deduction for depreciation or coinsurance, including the structural portions and fixtures owned by the PUD unit owners. Insurance premiums from any blanket insurance coverage must be a common expense of the PUD corporation, homeowners’ association, or trust and be included in the regular common assessments of the PUD unit owners. The coverage must name the PUD corporation, homeowners’ association, or trust as the insured for the benefit of the PUD unit owners.

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B. Common Property Coverage The PUD corporation, homeowners’ association, or trust must have fire and extended coverage for at least 100% of the replacement cost of the insurable PUD common property. The insurance must name the PUD corporation, homeowners’ association, or trust as the insured for the benefit of the PUD unit owners. No mortgagee clause in favor of the PUD unit mortgagees is required by the Buyer on insurance covering common property.

C. Fidelity Insurance The PUD corporation, homeowners’ association, or trust must have fidelity insurance covering losses re-sulting from dishonest or fraudulent acts on the part of the directors, managers, trustees, employees or volunteers responsible for handling funds collected and held for the benefit of the PUD unit owners. The fidelity bond or insurance must name the PUD corporation, homeowners’ association, or trust as the insured. The coverage must equal the maximum amount of funds held by the homeowners’ association at any one time and must total at least three (3) months of assessments on the entire project, plus reserves. An appropriate endorsement to the policy to cover any persons who serve without compensation must be added if the policy would not otherwise cover volunteers. NOTE: This section does not apply to deminimus PUDs.

D. Public Liability Insurance The PUD corporation, homeowners’ association, or trust must have a comprehensive policy of public liability insurance covering all of the PUD common property. The insurance policy must contain a severability of interest clause or endorsement precluding the insurer from denying the claim of a PUD unit owner because of negligent acts of the PUD corporation, homeowners’ association, or trust, or other unit owners. Coverage must include all other coverage in the kinds and amounts commonly required by private institutional mortgage investors for projects similar in construction, location and use. Liability coverage must be for at least $1 million per occurrence for personal injury and/or property damage.

E. Mortgagee Clause Each policy must contain the standard mortgagee clause endorsed to provide that any proceeds will be paid to the [Name of PUD corporation, association, or trust] for the use and benefit of mortgagees as their interest may appear, or otherwise endorsed to fully protect the interest of the Buyer. When a mortgagee clause is not applicable, a certificate of insurance must be obtained by the Servicer. This

certificate must contain the information required for certificates that is set forth in Section 203.01 A. The certificate must name the Servicer as the certificate holder instead of the mortgagee.

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It is the Servicer’s responsibility to act in the timeliest, efficient and responsible manner to safeguard the Buyer’s interest in loans being serviced for the Buyer. In addition to promptly paying property taxes to avoid possible tax liens and maintaining adequate insurance to cover damage from hazard losses, the Servicer must: • Make periodic property inspections to forestall

undue deterioration which might result from neglect or vandalism,

• Promptly notify the Buyer and undertake appropriate action to offset the effects of a borrower’s bankruptcy, insolvency or death, condemnations or other legal action, and

• Follow any other procedures required to protect the Buyer’s rights and the rights of the Buyer’s assignees in the mortgage obligation and the mortgaged property.

204.01 Inspection of Properties The Servicer must ensure mortgaged properties are occupied and are being properly maintained. Under certain circumstances this will require inspection of the property. The Servicer must certify, at the end of each year that any required inspections were completed in accordance with the guidelines contained herein, and the Servicer must furnish an Officers Certificate to that effect to the Buyer. Said Officers Certificate is to be received by the Buyer within 10 business days of the end of each calendar year. Property inspection schedules and related procedures are discussed below.

When possible, the Servicer’s inspection should include the interior of the property. All inspections, regardless of purpose, must be documented in the Property Inspection Report or equivalent, and be made part of the individual loan file but need not be forwarded to the Buyer, except as described below. The costs of property inspections are not reimbursable by the Buyer.

A. Current Loans Property securing a current loan should be inspected immediately when the Servicer learns the property may be vacant and/or believes it is necessary to preserve the value of the security or the Buyer’s interest in a property may be jeopardized due to negligence or default on the part of a borrower in any of the terms of the loan other than delinquency. When an inspection indicates repairs are unnecessary, minor, or will not cause deterioration, action need not be taken. However, if the inspection indicates deterioration is occurring, or repairs of an urgent nature are required to properly restore the property to a habitable condition or to correct a condition which

might lower the value of the property, the borrower must be reminded of the obligation to make such repairs. In addition, when a code violation notice is received, the Servicer should immediately contact the borrower and make arrangements for repairs necessary to fulfill the code requirements. In either case, the Servicer should document the loan files regarding any contacts with the borrower and any arrangements made. The Servicer must follow up until the repairs are completed or the borrower’s refusal or inability to make the repairs is established. In the latter case, the Servicer should send the Buyer a property inspection with pictures and a recommendation. If emergency repairs are required, the Servicer must make the repairs, subject to the limitations which appear in Section 204.02.

B. Vacant or Abandoned Properties Whenever a mortgaged property is found to be vacant or abandoned, the Servicer must: 1. Attempt to locate the borrower and determine the

reasons for the abandonment or vacancy. 2. Arrange for the protection of the property from

vandalism or damage by the elements, including “winterizing” where necessary.

3. File the appropriate notice with the mortgage insurer, if any, as soon as the Servicer has established, by a thorough investigation, that the property has been abandoned by the borrower. Full details of the Servicer’s investigation and conclusions must be reported immediately on a property inspection with a recommendation. One option available for delinquent loans when the property has been abandoned may be commencing foreclosure. Refer to Section 206 for a full discussion on foreclosure methods.

4. Notify the hazard insurance carrier to ensure the proper endorsement is made so that coverage is maintained.

C. Delinquent Loans Refer to Section 205.01 C for a discussion of property inspection requirements on delinquent loans.

204.02 Advances for Emergency Repairs

If an inspection of the property indicates emergency repairs are required, the Servicer is authorized to spend up to $2,500 for each property. Sums in excess of $2,500 for any property require the Buyer’s prior approval.

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When requesting reimbursement for advances, the Servicer must submit a property inspection with photos and a Statement of Expenses Form (WAMU 3001). All invoices and statements must accompany the Statement of Expenses. The Servicer must verify the mortgage insurer approved all advance expenditures before they were incurred whenever such prior approval is required.

204.03 Notice of Liens and Other Actions

The Servicer must always diligently act to prevent the attachment of any liens superior to the lien of the mortgage and must promptly notify the Buyer whenever it receives notice or otherwise becomes aware that any such lien is claimed. In addition, the Servicer must also notify the buyer in cases of bankruptcy, condemnation, death, probate proceedings, tax sales, partitions, local ordinance violations, landmark designation proceedings, or other events affecting any borrowers or mortgaged properties.

204.04 Partial Releases of Property Prior approval by the Buyer is required for any partial release of property securing a loan serviced hereunder.

A. Request for Partial Release The request for partial release should contain the following:

• Mortgagor’s name and address • Washington Mutual Mortgage Securities Corp. loan

number • Servicer loan number • Type of release • Reason for release • Any necessary legal documents • Legal description • Plat map outlining the section to be released • Recent appraisal indicating the value of the property

before and after the release • Certified copy of escrow instructions • Recommendation • Loan Analysis Form • Written evidence of the mortgage insurer’s approval,

if applicable When a partial release is requested by the borrower, the Servicer must also submit an acceptable residential appraisal report indicating the value of the property before and after the release, a certified copy of the escrow instructions, a recommendation, and a Loan Analysis Form. The Servicer must also comply with the provisions of the loan.

The Servicer must ensure that the remaining property adequately covers the unpaid principal balance and accrued interest of the mortgaged loan. The Servicer must prepare all required documentation and deliver executed documents to all concerned parties. The Servicer is also responsible for recording any necessary release documents in order to preserve the priority of the lien. If a partial release involving over $500 is requested by the borrower, the Servicer must also submit an acceptable residential appraisal report indicating the value of the property before and after the release, a certified copy of the escrow instructions and a recommendation. The Servicer must comply with the provisions of the loan.

B. Use of Proceeds The Buyer requires the cash consideration paid to be at least equal to the reduction in the value of the mortgaged property. The Servicer must apply any proceeds to the principal in accordance with the terms of the loan and the requirements of the mortgage insurer, if applicable. This applies to both voluntary and involuntary (condemnation, easements, eminent domain, etc.) releases. The Buyer may permit the Servicer to reimburse the borrower for the cost of obtaining the release from any proceeds and to pay the borrower for any amount by which the proceeds exceed the reduction in the value of the mortgaged property. The Buyer may permit a partial release without cash consideration if the remaining property will be enhanced in value by the release.

C. Advice to Tax Assessors The Servicer should notify the tax collector or assessor of the release of any portion of a property which will subsequently affect the amount of taxes to be levied against a property. If required by local law or practice, the Servicer must obtain the consent of any junior lien holder and confirmation by the title insurer that no loss in the priority of the lien is incurred.

204.05 Assignments and Recordations of Mortgages

The Servicer must complete at its own expense all assignments, recordations, or related actions necessary to protect the Buyer’s lien priority, to conform with local practice and state law, or to fulfill a request from the Buyer. The Servicer should inform the Buyer of any material changes to these requirements as they occur.

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204.06 Property Address Change The Servicer’s records should indicate any change in property identification, such as streets renamed or renumbered, and the Servicer should obtain any necessary insurance endorsements.

204.07 Assumptions, Due-on-Sale The security instrument must contain a due-on-sale clause. However, an assumption may be allowed for the mortgage if a change in ownership occurs and state or federal law prohibits enforcement of the due-on-sale clause or the loan is an adjustable rate mortgage (ARM) and the transferee meets occupancy and current Buyer credit guidelines. If there is a release of liability, the Servicer must also send the complete credit package to the Buyer, including the mortgage insurer’s approval before closing the transaction. In all circumstances, the Servicer may not change the mortgage interest rate, or other terms of the note on any loan sold to the Buyer.

The Servicer is responsible for determining the assumability of any loan submitted to the Buyer under the individual mortgage program, enforcing any due-on-sale clauses, and determining the creditworthiness of the assumptor/transferee.

In certain situations, the Servicer may not accelerate the maturity of the debt upon transfer of the property when the property is occupied by the mortgagor. Those situations include:

1. The creation of a lien or other encumbrance subordinate to the security instrument, which does not relate to a transfer of rights of occupancy in the property, provided that such lien or encumbrance is not created pursuant to a contract for deed.

2. The creation of a purchase-money security interest for household appliances.

3. A transfer by devise, decent or operation of law upon the death of a joint tenant or tenant by the entirety.

4. The granting of a leasehold interest on the property with a term of three (3) years or less without an option to purchase.

5. A transfer in which the transferee occupies, or will occupy the property and that is one of the following: • A transfer to a relative, resulting from the

mortgagor’s death; • a transfer wherein a spouse or a child becomes

an owner of the property; • a transfer resulting from a decree of dissolution

of a marriage, a legal separation agreement, or from an incidental property settlement by which the spouse becomes an owner of the property.

6. A transfer into an inter vivos trust in which the mortgagor is, and remains, the beneficiary and occupant of the property unless, as a condition precedent to the transfer, the mortgagor refuses to provide the Servicer with reasonable means acceptable to the Servicer by which the Servicer will be assured of timely notice of any subsequent transfer of the beneficial interest or change in occupancy.

The Servicer must evaluate the transferee’s credit and financial capacity according to the current underwriting guidelines set forth in the Seller’s Guide. Once the Servicer has approved the transferee, the Servicer must obtain approval from the mortgage insurer before completing the transfer. It is the Servicer’s responsibility to ensure all required endorsements of the insurance policies are properly executed so that coverage remains in effect. The Servicer must also prepare all required documentation and deliver executed documents to all concerned parties. The Servicer is also responsible for recording any assumption/release agreements required in order to preserve the priority of the lien and providing all notices and disclosures required by law or regulation. The Buyer will not permit a change in the maturity date, interest rate, monthly payment, or if applicable, margin specified in the note upon transfer of a property.

Any fee the Servicer charges in connection with an assumption may not exceed the lesser of its customary assumption fee or the amount allowed under any applicable law or regulation. The Servicer may retain the entire fee.

A. Fixed Rate Mortgages Any conventional fixed rate mortgages owned in whole or in part by the Buyer must be accelerated upon the transfer, or prospective transfer, of title to the underlying property if the security instrument has an enforceable due-on-sale clause, except for transfers listed in items 1 through 6 of Section 204.07. When this situation occurs, the Servicer must submit a Foreclosure Recommendation/Individual Delinquency Report (WAMU 3003) stating the situation and the Servicer’s recommendation of acceleration. Upon receiving the Buyer’s approval of such acceleration, the Servicer must immediately commence foreclosure action. If a security instrument does not have a due-on-sale clause, or a security property is located in a window period state and the originating Servicer is subject to window period restrictions, the Buyer will allow a mortgage to be assumed at the original note rate by a creditworthy transferee.

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B. Adjustable Rate Mortgages Any ARM owned in whole or in part by the Buyer may be assumed subject to the following conditions: 1. The loan has not been converted to a level payment,

fixed rate mortgage, 2. The original loan terms and conditions survive the

assumption transaction, 3. The Servicer represents and warrants the

assumptor/transferee meets all of the current credit guidelines outlined in the Seller’s Guide, and

4. The Servicer has obtained the Buyer’s prior written approval of the assumption when so required by the Buyer for a specific loan or group of loans. This condition may arise if a subsequent investor has additional requirements not specified in the Buyer ARM program. The Buyer will notify the Servicer in writing of any such additional requirements.

Whether or not there is to be a release of liability, the Servicer must send the complete credit package and must receive the Buyer’s approval before closing. The package should be reviewed and approved by the Servicer and the insuring agent before it is submitted to the Buyer. The Buyer will review the assumption package and notify the Servicer with the Buyer’s approval/denial within five business days of receipt of the package.

C. FHA/VA Mortgages Any FHA or VA mortgage owned in whole or in part by the Buyer may be assumed provided the Federal Housing Administration or Veterans Administration approves of such transfer and the appropriate guaranty or insurance is maintained. The Servicer must comply with the appropriate agency’s application and notification requirements and may charge fees for the assumption as indicated by that agency’s regulations. The Servicer may retain the entire fee, unless otherwise indicated by government regulations. The Servicer may not, however, change the interest rate, except as required in the original mortgage note of an ARM.

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205.01 Servicing Delinquencies The Servicer’s personnel must be sufficiently skilled in financial counseling and loan servicing techniques to assist borrowers in bringing their loans current and protecting their equity and credit rating while protecting the interests of the Buyer. The purpose of all collection efforts is to bring the account current in the shortest period of time. Discussions with the borrower should include a determination of the cause of the delinquency and an attempt to obtain a definite commitment from the borrower to bring the account current. If the account cannot be brought current immediately and the borrower’s circumstances and past record justify it, the Servicer should attempt to cure the delinquency as quickly as possible by employing the relief provisions discussed in Section 205.02. The Buyer requires that the Servicer adhere to industry standards as identified by Fannie Mae Delinquency Servicer Guidelines. To the extent an issure relative to delinquency, foreclosure, bankruptcy, loss mitigation or REO servicing is not specifically addressed within this Servicer Guide, the matter should be addressed according to the directive(s) associated with the applicable Fannie Mae guidelines. The Servicer should treat each delinquency individually. The collection effort should be based on the Servicer’s knowledge of the borrower’s credit history, employment situation, individual circumstances, property and the extent of the delinquency. The Servicer is expected to use notices, letters, telegrams, telephone calls, face-to-face contact, and other responsible collection techniques employed by prudent loan servicers. The Servicer is encouraged to vary its collection techniques to fit the individual circumstances and to avoid establishing a fixed routine which may be ineffective for dealing with borrowers who are repeatedly delinquent. The Servicer should recognize that efficient servicing of a delinquent mortgage primarily depends on personal contact, both on the telephone and face-to-face, with the borrower. Form letters and notices, while having a place in any servicing program, generally are not as effective as personal contact and should not be used exclusively. The following is an example of an adequate servicing program during the first 45 days of delinquency: 1. Identification of a delinquent loan should be made

by the 15th day of delinquency. 2. A late notice should be mailed between the 16th and

18th day of delinquency. 3. Attempts to contact the borrower by telephone

should commence by the 20th day of delinquency. 4. If satisfactory arrangements to bring the account

current have not been made by approximately the 45th day of delinquency, a face-to-face interview with the borrower should be conducted.

5. If satisfactory response is not obtained, the Servicer should continue to follow up with notices, letters, telephone contacts, face-to-face interviews, etc., until the loan has been brought current or the Servicer determines that a notification of foreclosure action, short sale, deed-in-lieu of foreclosure, or other loss mitigation action is deemed appropriate to resolve the delinquency. The Servicer must ensure that attorney referral to initiate foreclosure action be made no later than the 120th day of delinquency, or sooner if required by the mortgage insurer. All appropriate default and breach letters must be sent prior to submitting the recommendation.

The Servicer must maintain delinquency rates on the Buyer loans at a level below or comparable with the industry norm for loans of the same type in the same geographic area. Excessive Delinquency Notification Letters are issued to Servicers whose overall delinquency performance fails to compare satisfactorily with the industry norm. Servicers are required to review and respond with a complete explanation for the excessive delinquency ratio, and provide an outline of the business strategy they have adopted to achieve an acceptable percentage. Said response must be received within 10 business days of the date of the letter. The following sections present detailed servicing requirements for dealing with delinquencies on loans in which the Buyer has an interest. The Servicer is encouraged to employ its own collection procedures to best meet these servicing requirements. These procedures must be adequate and efficient for dealing promptly with delinquencies.

A. New Borrowers Particular attention should be paid to delinquency on the part of a new borrower. During the first few months of payment, the account should be monitored to assure the development of good paying habits. The reasons for delinquency by a new borrower vary and may include the borrower’s misunderstanding of payment requirements. The Servicer should make personal contact with a new borrower by the tenth day of delinquency to determine the cause of the delinquency and to emphasize the importance of payment on or before the due date.

B. Monthly Servicer Delinquency, Foreclosure, Bankruptcy and REO Reporting For each loan which is 90 or more days delinquent that has not been liquidated, the Servicer must fully document and submit all collection activities, reasons for nonpayment, actions being taken to cure the default, property inspection results, and all bankruptcy, loss mitigation, foreclosure and REO activity within an

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electronic report format. The data contained within the report should be inclusive of, but not limited to the following information: reason for delinquency, repayment plan information, date of attorney referral, loss mitigation type and status, date of the first legal action, date of judgment entered, date of publication, estimated date of foreclosure sale, actual date of foreclosure sale, confirmed sale date, occupancy status, date of most recent property inspection, condition of property, eviction status, bankruptcy chapter and status, updated appraised value, date of updated appraised value, brokers price opinion value, date of brokers price opinion, list price amount, list price date, list price expiration date, and required repairs, offer date, offer amount, estimated date of closing, actual date of closing, and estimated loss. When a borrower is chronically delinquent and the Servicer has exhausted all reasonable means of inducing the borrower to pay on time and all loss mitigation efforts have failed, the Servicer must notify the Buyer of the commencement of foreclosure action. The notification of said action must be submitted to the Buyer in electronic format and include the foreclosure referral date, reason for default, occupancy status, condition of property, date of last property inspection and most current broker’s price opinion if available.. Refer to Section 206 for a full discussion of foreclosure methods.

C. Servicer Penalty Assessments In the event of the assessment of default servicing related penalties to the Servicer as identified in this Section 205, or in any of Sections 206, 207, 305 and (in the case of an Interim Servicer) Section 306, the Buyer shall issue correspondence to said Servicer detailing the reason for the penalty and dollar amount assessed. If the Servicer elects to appeal all or a portion of the penalty assessed, the Servicer must submit a written response to the Buyer to be received within seven business days of the date of the Buyer’s correspondence detailing the reason for the appeal, the amount being appealed, and the facts supporting the Servicer’s position. In addition, the Servicer must submit all applicable material evidence such as system documentation, related documents/correspondence and other information as required for the Buyers review and determination. The Buyer shall issue a final determination in response to the Servicer within 10 business days from the date of receipt of the Servicer’s letter of appeal. Said report must be received by the Buyer no later than the 5th business day of each month and must represent the status of each loan as of the previous month’s close of business. After receipt of the monthly report from the Servicer, the Buyer will contact the Servicer via email with any

missing delinquency information. For loans in a delinquency, foreclosure, bankruptcy and REO status. These requests require review and response by the Servicer. The Servicer’s detailed response to each loan in question must be received within 2 business days. Failure to comply with the specified time frames identified for either of these required submissions will subject the Servicer to a penalty assessment as provided for in Section 305.

D. Property Inspections The Buyer must be notified of the property inspection and condition via the Monthly Delinquency Report for all loans 90 or more days delinquent. From then on, the Servicer must send monthly updates via report on Property Inspection necessary to protect the Buyer’s interest or upon Buyer’s request. For a property located in an area with a high incidence of vandalism and neglect, the Servicer should conduct subsequent inspections at least once every 30 days until the delinquency is cured or the loan liquidated. At the initial inspection, the Servicer should attempt a face-to-face interview with the borrower to establish: • The reason for delinquency • Whether the reason is temporary or permanent in

nature • The attitude of the borrower toward the debt • The length of time necessary to cure the default If a borrower has been granted relief provisions for curing a delinquency, property inspections should be made on a frequent and continuing basis during the period of relief. If an inspection reveals repairs are necessary, the Servicer should advance the required funds according to guidelines in Section 204.02. The borrower’s relief plan may be modified to spread the repayment of the advance over the period covered by the plan, if the borrower is financially able to assure the additional obligation immediately, or to call for the repayment of the advance at the end of the relief period.

E. Abandonment The Servicer should attempt to locate the borrower and ascertain the reasons for abandonment. The Servicer must take all actions necessary to protect the property from waste, damage, and vandalism. The Servicer must report the full results of the investigation immediately and make a recommendation regarding the action which should be taken. The Servicer must also notify the hazard insurance carrier of the vacancy so the proper policy amendment may be made to ensure coverage. The Servicer shall provide notification to the Buyer via monthly report.

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F. Mortgage Insurance Requirements The Servicer should be familiar with and satisfy all applicable requirements of the mortgage insurer. The Servicer is expected to have adequate controls to assure timely filing of all notices to the mortgage insurer. Copies of routine notices sent to the mortgage insurer or the borrower need not be sent to the Buyer unless specifically requested. Copies of the Notice of Delinquency must be sent to the Buyer with the Foreclosure Recommendation/Individual Delinquency Report. If the primary mortgage insurance policy was issued by PMI Mortgage Insurance Co., the Servicer must inform PMI when the loan first becomes delinquent that the policy covers a loan purchased by the Buyer. If any of the Servicer’s actions cause invalidation of a claim, the Servicer will be responsible for the loss, including any primary and pool insurance claims which may be denied. In the alternative, the Servicer may be required to repurchase the loan. If a loan is covered by a pool insurance policy, the Buyer will be responsible for the filing of any claim.

G. Use of Temporary Buydown Funds Any funds remaining in the buydown account of a loan in foreclosure must be disposed of according to the terms of the buydown agreement. The funds may not be used to reinstate the loan or cure any default of the borrower on which the foreclosure proceedings are based.

205.02 Borrower Relief Options The Buyer grants Servicers discretion to extend appropriate relief to borrowers who encounter hardship, but are cooperative and have proper regard for their obligations. The Servicer must be readily available to the borrower to offer skilled financial counseling and advice. The Servicer should make personal contact with a delinquent borrower as often as necessary to achieve a solution which will bring the loan current as quickly as possible. The Servicer must be familiar with all the forms of relief discussed in this section and will employ such relief whenever appropriate, rather than recommending termination of the loan. However, no such relief should be granted to any borrower unless there is a reasonable expectation that the relief granted will result in bringing the loan current and maintaining it in a current status. Before granting relief, the Servicer should inspect the property and ascertain the reason for the default and that the attitude and circumstances of the borrower justify the relief action contemplated. The Servicer is responsible for satisfying all applicable mortgage insurance requirements and obtaining all necessary approvals with

respect to the relief granted. The Servicer is responsible for collecting any recording or similar costs incidental to the granting of relief from the borrower. When relief is appropriate, the Servicer should determine whether the relief should be one of the following:

• A liquidating plan giving the borrower a definite period in which to reinstate the loan by immediately commencing payments in excess of the regular monthly installment.

• A special forbearance relief agreement reducing or suspending the regular monthly installments for a specified period of time.

• A military indulgence.

A. Liquidating Plan If appropriate, the Servicer is authorized to enter into a liquidating plan to repay the total delinquency within the shortest time possible. The repayment period must not exceed 12 months from the date of execution of the plan without the Buyer’s approval. If the Servicer wishes to enter into a liquidating plan in which the repayment period exceeds 12 months, the Buyer must approve the plan in advance and the plan must be set forth in writing (with specific amounts and dates, including the year for the repayment plan) and must be signed by the Servicer and the borrower. The Servicer must report the terms of any liquidating plan (with specific amounts and dates, including the year for the repayment plan) to the Buyer and send the Buyer a signed copy.

B. Special Forbearance Relief Agreement A special forbearance relief agreement is a written agreement to reduce or suspend regular mortgage payments for a forbearance period of up to 12 months. These agreements are rare and usually reserved for situations beyond the borrower’s control, such as, an uninsured medical problem. At the conclusion of this special forbearance relief period, regular mortgage payments must be resumed and satisfactory arrangements made to repay the amount suspended. The Buyer must approve any special forbearance relief agreement in advance. The Servicer must also obtain any necessary approval from the mortgage insurer before executing such an agreement. After approval of the terms, the Servicer must prepare the agreement; have it executed by all parties and forward copies of the completed agreement to all concerned. If the borrower fails to satisfy the terms of the special forbearance relief agreement, the Servicer must immediately recommend one of the following to the Buyer:

• A new forbearance agreement, provided the aggregate forbearance period does not exceed 12 months, or

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• Foreclosure or, preferably, acceptance of a deed-in-lieu of foreclosure.

Approval of a special forbearance plan by the Buyer does not relieve the Servicer from continuing to remit scheduled principal and interest payments.

C. Military Indulgence For purpose of this section, a Borrower claiming entitlement to military relief is referred to as a “servicemember”. A servicemember serving on active military service, or a Reservist or National Guardsman called to active military service may be entitled to benefits under the Servicemembers Civil Relief Act of 1940, as amended (the “Act”), and/or various State relief statutes which may entitle the servicemember to certain benefits. The Servicer must be familiar with all requirements of the Act and any State statues and ensure they comply with all requirements. The Act covers the following servicemembers: 1. Career members of the United States Navy, Marine Corps, Army, Air Force, and Coast Guard. 2. Members of a reserve component of the armed services volunteering for or called to active service. 3. Members of the National Guard volunteering for or called to active service.

Compulsory or Annual Training that Reservists are required to undergo periodically to maintain membership in the reserve components of the armed services or the National Guard is not considered active service for military relief purposes:

1 Interest Rate Cap: The Act caps interest at six (6%) percent per year on a servicemember’s Mortgage obligations. Escrows for insurance, property taxes and other assessments are not affected and must be paid in accordance with contractual terms. The difference between the contractual rate of interest and six (6%) percent is forgiven, not deferred.

2 Eligible Mortgages: a) The Mortgage must be the contractual obligation of the servicemember as Borrower or co-Borrower under the Note or as obligor under a written agreement by which the servicemember assumes the Borrower’s liability under the Note and the Borrower is released from such liability.

b) The servicemember must have executed the Note or the assumption agreement before the reporting date or effective date of the servicemember’s active service as shown in the military orders.

3 Request Submission: The rate cap request may be made by the servicemember or a representative, such as:

• The spouse of the servicemember • The co-Borrower of the servicemember • An attorney of the servicemember

• Any person authorized to act on behalf of the servicemember by power of attorney that the Servicer has duly verified. A copy of the power of attorney must be maintained in the Mortgage file.

The servicemember or a representative must submit a written request and copies of the military orders for the entire time period for which the interest rate cap is requested. If the requestor is other than the servicemember, the requestor’s identity and contact address must be established and maintained in the Mortgage file.

The Servicer is authorized to grant all appropriate relief to which an eligible borrower is entitled under the Act and any applicable State relief statutes, but the terms of such relief and related information should be promptly reported to the Buyer within three (3) business days of receipt by the Servicer. If interest rate reduction is required, the Servicer must notify the Buyer thereof by submitting to Buyer a written notice detailing the relevant facts, together with (a) the written request from the servicemembers or the servicemember’s representative, and (b) a copy of the servicemember’s orders calling him/her to active duty. The Servicer will be required to remit to the Buyer at the original interest rate and P&I and the Servicer will be reimbursed the difference of the original interest rate and the reduced interest rate on a monthly basis. The Servicer will apply all P&I payments in accordance with the following calculation method, WMMSC will only reimburse Servicers if the following calculation method is used:

Example of the Act Monthly Interest Rate Differential Credit

This example illustrates the calculation of Servicer monthly interest rate differential credit for a Borrower’s payment that was reported by Servicer in January, 2004.

Example Loan Level Detail

Unpaid Principal Balance (UPB) of a 30 year Mortgage (as of 01/04 cycle): $50,000 Original Rate: 10.375% Adjusted Interest Rate under the Act: 6.000% Loan Status Active Monthly remittance (draft) cycle: 20th of the month P&I $452.70

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Calculation 1. Interest at original rate = UPB X Original Rate / 12 = $50,000 X 10.375% / 12 = 432.29 2. Principal applied to loan = P&I – Interest at Original Rate = $452.70 – 432.29 = $20.41 3. Interest at the Act Rate = UPB X the Act Rate / 12 = $50,000 X 6% / 12 = $250 4. Amount due to servicer (Interest Subsidy) – Interest at Original Rate – Interest at the Act Rate = $432.29 – 250 = $182.29 For this Example, Servicer would receive a wire in the amounts of $182.29 from the Buyer. If the servicemember’s active military service exceeds the timeframe outlined in the original orders provided by the Servicer, the Servicer shall request a copy of the new orders and shall provide them to the Buyer. Reimbursement will be made for only that portion of time the servicemember is recalled to active duty and is supported by the servicemember’s military orders. The Servicer should contact the borrower at least semi-annually during the period of active military service to determine the borrower’s current status and the anticipated duration of military service.

D. Forbearance, Relief from Foreclosure Under the Act or State statutes, servicemembers who are serving or have served on active duty may be entitled to additional and varied forms of protection from creditors’ enforcement of contractual terms. Such protection is usually based on hardship caused by military service and may remain in effect even after a protected servicemember is released from active duty. A court order may be required to activate such protection or to deny it. This protection may include: 1. Deferral and/or restructuring of payments 2. Restrictions on foreclosure action 3. Extension of redemption periods for completed foreclosures

The Servicer must be familiar with applicable law as it relates to the particular circumstances of a servicemember.

If foreclosure is allowed to proceed and Mortgage Insurance claim is eventually filed, you must notify the mortgage insurer (MI) that the Mortgage was subject to military relief so that:

1. Interest for the Act-capped payments due but unpaid by the servicemember is claimable at the Note rate, not at the Act-capped rate. 2. Claimable interest will not be curtailed by the (MI) for a delay which was caused solely by the Servicers’ compliance with applicable military relief

law. Late Charges: All late charges resulting from Mortgage payments deferred, restructured or rate-capped under the Act or applicable State law must be waived. Credit Reporting: All servicemembers who are receiving protection under the Act or applicable state law must be reported as “paying as agreed” to the credit repositories. Documentation: All communications, correspondence, and documentation to or from servicemembers seeking Mortgage relief for hardship caused by active service must be maintained. Transfers of Servicing: When a Transfer of Servicing to a Special Servicer includes Mortgages whose interest rates are capped under the Act, the Transferor must identify each such Mortgage to the Transferee before transferring the Mortgage files to the Transferee.

205.03 Advancing Responsibility The Servicer is obligated to advance its own funds for the loans serviced on the Buyer’s behalf. Such advances are intended to provide a regular flow of funds on the loans and to protect the value of the loan and the un-derlying property. If an advance for principal and in-terest or for approved expenses cannot be recovered from related borrower payment, liquidation or insurance payments, the Buyer will reimburse the Servicer, ensuring that such advances do not become expenses to the Servicer. It is the Servicer’s responsibility to continue to advance its own funds until the loan is fully liquidated by payment-in-full, foreclosure sale to a third party or the REO disposition sale.

205.04 Servicing Bankrupt Accounts The Servicer must treat all loans of bankrupt borrowers it services for the Buyer in the same manner it treats loans that it owns, unless otherwise indicated in this section. The Servicer must always comply with the terms and conditions set forth by the mortgage insurer. The Servicer should act with the advice of legal counsel with a thorough knowledge of bankruptcy law. The Servicer must complete and forward a claim on each bankruptcy within the time limitation placed by the bankruptcy court and in the manner normal for the district in which the bankruptcy is filed. If the borrower wishes to reconfirm the debt, the Servicer must proceed with this action immediately and may do so without the Buyer’s prior approval. The Servicer must obtain the Buyer’s approval before refusing to reaffirm a debt for any loan which the Buyer owns in whole or in part. If any loan involved in a bankruptcy becomes delinquent, the Servicer must report the delinquency and bankruptcy information as provided in Section 205.01 B.

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The following information should be included in the report: case number, date of filing, confirmation hearing date, 1st meeting of the creditors, confirmation of the plan, pre and post petition due dates, motion for relief filed, consent order enters, bk type, and discharge/dismissal date. If the loan is not delinquent and does not become delinquent during the term of the bankruptcy, it is not necessary to notify the Buyer of the bankruptcy filing unless some situation occurs which might place the Buyer’s interest in the property in jeopardy.

A. Chapter 7 and Chapter 11 If a borrower files for bankruptcy under Chapter 7 or Chapter 11 of the Bankruptcy Reform Act of 1978, Title 11 of the United States Code, and the loan becomes two months delinquent, the Servicer must forward correspondence to the attorney, or to the bankruptcy trustee if there is no attorney involved in the case, demanding that the loan be brought to a current status and maintained current on a monthly basis. The Servicer must make a drive-by inspection of the property to verify occupancy at this time and every month thereafter until the loan is again current. If no acceptable action or arrangement occurs in the 30 days following the demand letter and the loan becomes three months delinquent, the Servicer must immediately seek relief from the automatic stay and reporting must occur as provided in Section 205.01B. Once the stay is lifted on the Chapter 7 or Chapter 11 bankruptcy, the Servicer must comply with all state and local laws and regulations, and insuring and guaranty agency regulations before commencing foreclosure. The Servicer must immediately forward a letter to the borrower’s attorney or to the bankruptcy trustee, if there is no attorney involved in the case, demanding that the loan be brought current immediately and maintained current. Upon obtaining relief from the automatic stay from the bankruptcy court, the Servicer must initiate or continue with foreclosure action and property disposition as provided in Sections 206 and 207 within sixty days of the filing of the order to lift the stay. The Servicer must continue to report the status of the loan as provided in Section 205.01B. If the borrower files under Chapter 7 or Chapter 11 when the loan is already 60 or more days delinquent or in foreclosure status, the Servicer must cease all collection or foreclosure activity immediately. If the loan is 60 days or more delinquent, but not in foreclosure, the Servicer must immediately forward a letter to the borrower’s attorney or to the bankruptcy trustee if there is no attorney involved in the case, requesting that the loan be brought current immediately. A drive-by inspection of the property should be conducted immediately and every month thereafter.

If no acceptable arrangement or action occurs within 30 days of the demand letter, the Servicer must immediately seek relief from the automatic stay. If the loan is in foreclosure at the time of filing of the bankruptcy action, the Servicer must immediately seek relief from the automatic stay and must report the status of the loan as provided in Section 205.01B. If the loan is not in foreclosure status at the time of the filing of the bankruptcy action, the Servicer must submit a completed Foreclosure Recommendation/Individual Delinquency Report (WAMU 3003) for notification purposes.

B. Chapter 13 If a borrower files bankruptcy under Chapter 13, the Servicer must review the repayment plan and must reject the plan if the Servicer can substantiate that the plan is not reasonable. If the Servicer determines the bankruptcy repayment plan is unreasonable, counsel retained by the Servicer should file an objection to the plan. If the plan is reasonable, the Servicer must approve the repayment plan. If the loan becomes two months delinquent outside of the plan or the borrower fails to make payments as agreed within the plan, the Servicer must forward correspondence to the borrower’s attorney, or to the bankruptcy trustee requesting the loan be brought to current status under the Chapter 13 repayment plan and maintained there throughout the term of the plan. The Servicer must make a drive-by inspection of the property to verify occupancy at this time and every month thereafter until the loan is brought to a current status under the plan. Refer to Section 205.01 for further details. If no acceptable action or arrangement occurs in the 30 days following the demand letter, the Servicer must immediately seek relief from the automatic stay. Each month, the Servicer must report its actions on the Monthly Delinquency Report provided in Section 205.01 (B). Once the stay is lifted on the Chapter 13 bankruptcy, the Servicer must comply with all state, local, and insuring and guaranty agency regulations before commencing foreclosure. Upon obtaining relief from the automatic stay through the applicable court action, the Servicer must initiate or continue with foreclosure action and property disposition as provided in Section 206 and 207 within sixty days of the filing of the order. If the loan is in a foreclosure status at the time of the filing of the bankruptcy action, the Servicer must continue to report the status of the loan as provided in Section 205.01B. If the loan is not in a foreclosure status at the time of filing of the bankruptcy action, the Servicer should send the required breach letters to the mortgagor and refer to they attorney for Foreclosure action once the demand expires. Servicer should notify Buyer with referral date information. Refer to Section 205.B for further details..

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If the loan is in foreclosure, the Servicer must report the status of the loan as provided in Section 205.01B.

C. Compliance with Laws and Regulations In all cases where a bankruptcy is involved, the Servicer shall comply with all state, local, and insuring and guaranty agency regulations, as well as with all laws set forth under the existing bankruptcy code and any revisions thereto. Should the Servicer have any difficulty in adhering to these regulations and laws, as well as to the servicing requirements set forth above, the Servicer must contact the Buyer.

205.05 Adjustable Rate Mortgage Delinquencies

It is the Servicer’s responsibility to enforce each ARM according to its terms. This includes making accurate changes to the interest rate, the monthly payment amount and communicating these changes to the borrower regardless of delinquency status. If the Servicer fails to make either timely or accurate interest rate or payment changes, the Servicer must use its own funds to satisfy any shortage until the next scheduled change date. The amounts advanced must reflect any changes in the interest rate and monthly payment amount. Any overage must be returned to the borrower. If an ARM is delinquent, in foreclosure or in REO status and is scheduled for an interest rate change or payment change, the Servicer must track any change on its accounting records and report this information to the Buyer on the ARM Adjustments Report (WAMU 4013). The Servicer must notify the borrower on any payment change according to the terms of the Note even when the loan is delinquent or in foreclosure, following the same procedures as for a current loan. However, if the loan is in REO status, no such notification is required.

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206.01 Servicer’s Notifications Notification of the foreclosure referral date should be submitted to the Buyer electronically. The notification of said action must be in electronic format and include the foreclosure referral date, reason for default, occupancy status, condition of property, date of last property inspection and most current broker’s price opinion if available. If collection and loss mitigation efforts have exhausted, the servicer should ensure the initiation of foreclosure action occur no later than the 120th day of delinquency. The Servicer must also submit all notices promptly to the primary mortgage insurer as required. A copy of the notice need not be sent to the Buyer but should be made part of the foreclosure records. Failure to initiate foreclosure action in accordance with the time frame specified in Section 205.01 will result in a per diem interest penalty assessment at the note rate. During the time that the loan remains in a foreclosure status, the Servicer must provide monthly updates of information as provided in Section 205.01B.

A. Assignment to the Mortgage Insurer A Servicer may not make arrangements for the assignment of a delinquent loan to the mortgage insurer without the Buyer’s prior approval. If an assignment is approved, the Servicer will complete the transaction and file the claim. If the insurer declines the assignment of a delinquent loan, the Servicer must request the Buyer’s approval before taking any alternative action.

B. Deed-In-Lieu of Foreclosure A deed-in-lieu of foreclosure is usually preferred to foreclosure. If the borrower is willing to execute a voluntary deed-in-lieu of foreclosure, the Servicer should recommend acceptance by the Buyer if the Servicer determines:

• Such action is in the Buyer’s best interest. • Full benefits of any mortgage insurance will be

received. • Marketable title, free from any liens, will be

obtained. • The property will be vacant at the time of

conveyance. The following documentation is required when requesting the Buyer’s approval of the acceptance of a deed-in-lieu of foreclosure: 1. Hardship letter 2. Loss Analysis sheet showing benefit of approving

deed in lieu versus foreclosure sale 3. Broker’s price opinion

4. Primary mortgage insurer’s approval, if applicable Upon receipt of the Buyer’s written approval, the Servicer or the Servicer’s counsel should prepare any documents necessary to process the deed-in-lieu of foreclosure, following Fannie Mae guidelines to ensure reimbursement of the attorney’s fees and costs. The Servicer must arrange for conveyance of the property. The borrower must agree to assign and transfer, to the Buyer, all rents due and to become due. In general, the Servicer should not take title to the mortgaged property until it is vacant. If hardship exists, the Servicer may take title provided the date of possession is agreed upon in advance. The Servicer must email the buyer once the conveyance documents have been sent for recording. Title should be conveyed directly from the borrower to the Buyer’s assignee.

C. Preforeclosure Sale The Servicer should pursue a preforeclosure sale when a borrower is required to sell their home in time of financial hardship, and if it is foreseen that it will be difficult to sell as the current market value is less than the amount required to satisfy the loan and any sales costs. The Servicer is responsible to inform the borrower that they are required to maintain the property until it is sold. The Buyer may require the borrower to contribute funds if the sale proceeds do not satisfy the loan. Any escrow funds will not be reimbursed to the mortgagor. The following documentation must be submitted to the Buyer prior to any preforeclosure sale:

• Copy of primary mortgage insurer’s approval, if applicable

• Copy of broker’s opinion

• Loss Analysis sheet showing benefit of approving short sale offer versus REO sale.

The following documentation must be submitted to the Buyer after the preforeclosure sale:

• Copy of proceeds check or wire confirmation

• Copy of HUD-I settlement statement

• Copy of primary claim, if applicable

• Copy of explanation of benefits form once MI has settled

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206.02 Institution of Foreclosure Acceleration of the maturity of a loan must be accomplished in accordance with the terms of the mortgage instrument and applicable law. The Buyer must be provided with written notification of all foreclosure actions as provided in Section 206.01. The Servicer should not recommend foreclosure until every reasonable effort has been made to cure the delinquency, as discussed above. Once the Servicer determines no other course of action will cure the default, the Servicer should promptly refer the file to the attorney to commence foreclosure which should be done no later than the 120th day of the delinquency. The Servicer should actively continue all efforts to cure the default and mitigate losses to the Buyer until the Servicer can no longer legally do so under the terms of the mortgage instruments and federal, state or other applicable governing law or agency requirements. The Servicer should prepare and forward with the foreclosure notification any necessary papers for the Buyer’s execution and, when appropriate should ask the Buyer to return the security instrument. If the security instrument is sent to the Servicer, the Servicer will hold it on behalf of, and for the benefit of, the Buyer and its successors and assigns, and must ensure its safe storage and return it to the Buyer promptly when foreclosure is discontinued. The Buyer’s execution of any document submitted by the Servicer does not imply that the Buyer has reviewed such document for legal compliance. The Servicer maintains this responsibility. On a FHA/VA reconveyance, the Servicer is responsible for preparing the necessary documents and forwarding them to the Buyer for execution. This should take place no later than two weeks prior to the expected foreclosure sale date. The Servicer shall monitor the foreclosure process to ensure that no unnecessary delays occur. The Servicer will be assessed a per diem interest penalty at the note rate for any late foreclosure referral and for any unnecessary or unsupported delays in the foreclosure process.

A. Foreclosure Processing The Servicer should take appropriate action during the foreclosure process to protect the property. The Servicer must obtain the Buyer’s approval in advance for any expenditure to protect the property which exceeds $2,500. In any situation where delaying protection action might result in impairment of the property,

the Servicer should call the Buyer for approval of any expenditure in excess of $2,500. The Buyer will send the Servicer a confirmation of the cost and nature of the protective action approved. The Servicer should retain the borrower’s escrow funds and all other unapplied funds. The Servicer should obtain bills for, and pay all expenses due under the loan, including taxes, special assessments, ground rents, and other charges which are or may become first liens upon the property as well as hazard and mortgage insurance premiums. If the borrower’s escrow funds are insufficient to pay these items as they become due during the foreclosure, the Servicer must advance funds for the payment of such expenses to protect the Buyer’s interest. Reimbursement for all approved expenses may be requested on the Statement of Expenses (WAMU 3001) at the time of final property disposition.

• The Servicer must inspect the property at least once a month and more frequently when circumstances warrant.

Notifications of sale results are required within 24 hours after the sale.

B. Attorney’s/Trustee’s Fees Servicer should adhere to FNMA guidelines for foreclosure fees and costs allowed. Any exceptions require the Buyer’s approval All fees discussed in this section are to be paid by the Servicer and will be reimbursed by the Buyer after the final settlement of the sale of the property and all insurance claim proceeds have been paid. If foreclosure proceedings are discontinued, all fees and costs incurred are to be collected from the borrower unless prohibited by law. In jurisdictions where the collection of attorney’s fees or costs from the borrower is prohibited, the Buyer will share such expenses with the Servicer in proportion to the Buyer’s interest in the loan. In deed-of-trust jurisdictions, it is the Servicer’s responsibility to ensure a proper individual or entity, free from any conflict of interest, serves as trustee or substitute trustee. The Buyer may select the foreclosure counsel or request substitution of a trustee to whom the case is to be referred. The Servicer is expected to work closely with the foreclosure counsel, trustee, or substitute trustee to ensure prompt and efficient completion of the foreclosure proceedings.

C. Offer of Payment During Foreclosure If the borrower offers payment of the full delinquency during foreclosure, including advances, legal costs, and other foreclosure expenses, the Servicer should determine the total amount of all foreclosure costs and expenses which will be incurred if the offer is accepted. Such an offer may be accepted by the Servicer if the

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payment offered will cover all costs and expenses. No offer of full payment may be declined without the Buyer’s approval. If the offer is accepted, after receiving the funds the Servicer must take action to prevent additional foreclosure expenses from being incurred, pay the foreclosure expenses, and apply the remaining funds to the borrower’s account and return the debt instrument to the Trustee by certified mail If the borrower offers to pay an amount less than the full delinquency during foreclosure, the Servicer should determine the total amount of foreclosure costs and expenses which would be incurred if the offer were accepted. The Servicer may decline without requesting the Buyer’s approval, but must obtain the Buyer’s approval before accepting. The Servicer’s recommendation should include an opinion regarding whether the foreclosure action should be suspended or dismissed and how the remaining delinquency will be cured.

D. Bidding Instructions The Servicer must issue bidding instructions to its employee, agent, or the attorney attending the foreclosure sale unless the Buyer directs otherwise. The Servicer must comply with all bidding instructions and requirements of the mortgage insurer, when applicable. The Buyer does not need to approve the maximum bid price if it will recover the total indebtedness, including expenses and costs, or if it is the maximum amount permitted by applicable law. If the mortgagor has substantial assets or earning power and state law allows collection of deficiency amounts, the Servicer must preserve the Buyer’s rights to pursue collection and recovery of a deficiency. The Servicer must obtain the Buyer’s prior approval of a maximum bid which is insufficient to recover the total indebtedness. If the Buyer’s approval of a maximum bid is required, the request for approval must be accompanied by an estimated market value of the property in an “as is” condition at least 14 days prior to the actual foreclosure sale date.

E. Third Party Acquisitions If the property is disposed of in a third party transaction at the foreclosure sale, all reasonable expenses advanced by the Servicer during the foreclosure process and approved in writing by the Buyer will be netted against the foreclosure sale proceeds. The Buyer’s portion of the proceeds will then be transferred to the Buyer.

206.03 Claim Procedures A. Filing a Claim All mortgage insurance claims must be filed within the time required by the mortgage insurer. If a claim cannot be filed with the mortgage insurer within that time, the Servicer must obtain an extension from the mortgage insurer. The Servicer must forward a copy of the mortgage insurer’s extension approval to the Buyer and must include a written explanation of the reason for the delay and anticipated date for the claim filing. The Servicer should complete the claim according to the mortgage insurer’s procedures and forward a copy to the Buyer. The mortgage insurer should make settlement checks payable to the Servicer. If the primary mortgage insurance was issued by PMI Mortgage Insurance Co., the Servicer must inform PMI that the policy covers a loan purchased by the Buyer. If the mortgage insurer fails to pay the claim within 60 days, the Servicer must make demand upon the mortgage insurer for immediate payment. The Servicer is responsible for reimbursement for any shortfall in insurance coverage. If the mortgage insurer reduces the claim due to administrative error, the Servicer will reimburse the Buyer for the amount of such reduction. All claim reductions or denials must be brought to the attention of the Buyer along with the Servicer’s response to the reduction or denial

B. Deposit of Settlement Proceeds Within 1 business day of receipt of settlement funds, the Servicer should immediately deposit the proceeds into the P&I Custodial Account. The servicer should email or fax a copy of the final signed HUD-1 that must much the proceeds received.. . Gross proceeds along with MI proceeds if received should be wired to the buyer within 2 business days. If the loan has MI insurance pending, servicer should hold funds in their custodial account until the MI claim has been paid. A copy of the explanation of benefits settlement statement should be sent to the Buyer upon receipt of MI funds.

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Section 207. Acquired Properties

Servicing Guide: Loan Servicing 207-1 (Rev. 8/01/08)

The Servicer’s responsibility for the maintenance, security and marketing of the acquired property continues until the final disposition of the property and until all funds are received by the Buyer, unless the Buyer relieves the Servicer of these duties by written notification. If the Buyer relieves the Servicer of the responsibility for maintenance and marketing of the acquired property for cause, the Servicer shall pay the Buyer the greater of $1,000 or 1% of the unpaid principal balance. Consistent violations may result in termination of the Selling and Servicing Contract for cause. The Servicer acknowledges damage suffered by the Buyer due to the Servicer’s failure to properly and expediently administer and market the acquired property will be reimbursed to the Buyer by the Servicer. Refer to Section 206.03 for details on claim procedures. Proper servicing shall include, but not be limited to the following actions: 1. Inspection and maintenance of the property, 2. Paying insurance premiums and taxes when due, 3. Notification of acquisition and providing case files, 4. Property valuation and repair, 5. Expedient marketing of the acquired property, 6. Providing monthly reports according to Buyer

requirements, 7. Filing accounting, and 8. IRS reporting.

207.01 Inspection and Maintenance Servicer is required to complete monthly property inspections from the time of acquisition until the close of escrow. These reports should be available upon request by the Buyer. . If at any time the Servicer ascertains any damage to the property, the Servicer must submit a claim for insurance recovery, obtain repair bids and take necessary protective action to prevent any recurrence. Prior to beginning property repair, the Servicer must contact the Buyer for instructions. The Servicer must ensure settlement of any hazard insurance claim is promptly completed. The Buyer will often have Special Hazard Insurance coverage for losses over and above those covered by primary hazard insurance. This Special Hazard Insurance is not in lieu of primary hazard insurance which must be maintained by the Servicer. Any loss covered by the primary hazard insurance carrier must be reported by the Buyer so a claim under the Special Hazard Insurance Policy may be submitted. Failure to file an insurance claim for claimable damages will result in a penalty being assessed at the time of liquidation for the amount of the cost to repair said damages.

The Servicer may spend up to $2,500 per occurrence for emergency repairs of property security without the Buyer’s prior approval. If the required securing or emergency repairs exceed $2,500, contact the Buyer for verbal approval. For all properties in redemption, confirmation, ratification, or eviction, the Servicer is required to complete a drive-by BPO within 10 days and forward to the Buyer via email. If the property remains occupied after marketable title is obtained, the Servicer, should immediately commence eviction unless the occupancy of the property enhances its marketability. The Servicer must obtain the Buyer’s prior approval before allowing continued occupancy or entering into a lease.

207.02 Payment of Taxes and Insurance The Servicer must ensure the following: 1. All property taxes and assessments are paid on time.

Penalties for late payment of property taxes or assessments will not be reimbursed to the Servicer.

2. All association dues are paid, if appropriate. The foreclosure action should extinguish any fees which become due prior to acquisition. Penalties for late payment will not be reimbursed to the Servicer.

3. Adequate hazard insurance coverage and, if applicable, flood insurance coverage is maintained at all times.

4. The Servicer must ascertain the benefits of obtaining vandalism coverage and make a recommendation to the Buyer.

207.03 Submission of Case and Marketing Files

The Servicer must inform the Buyer of the acquisition of a property within 24 hours of the foreclosure sale even if a redemption period follows the sale. Such notice may be in the form of a letter and should provide the foreclosure sale date, successful bid amount, occupancy status, and any unexplained redemption dates. The case file is due within 10 days of acquisition and should contain the following documents: If 12 monthly payments or less were made on the loan, the Servicer must send the following, along with the complete origination file. 1. Note or other instrument evidencing indebtedness. 2. Mortgage or Deed of Trust. 3. Original appraisal. 4. Payment history since inception of the loan. 5. Copies of all foreclosure pleadings and evidence of

title in the name of a party designated by the Buyer Within 30 days of possession, the marketing file should contain the following documents:

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1. Current appraisal (reflecting 90-120 day marketing time, including “as-is” and “repaired” values, detailed list of repairs, costs, incremental contributory value and a 30 day quick sale value.

2. Current BPO (reflecting 90-120 day marketing time, including “as-is” and “repaired” values, detailed list of repairs, costs, incremental contributory value and a 30 day quick sale value).

3. Second BPO For Properties >= $40,000 • Servicer shall order an additional BPO when the

lowest BPO varies by 10 percent or greater from the appraisal and Servicer is unable to effectively reconcile the values.

For properties < $40,000: • Both values under $40,000; 15 percent variance • Both values under $30,000; 15 percent variance • Both values under $20,000; 20 percent variance • Both values under $10,000; 25 percent variance.

4. List of contractor bids if repairs recommended:

$0 - $3, 500: One bid required Over $3,500 up to $10,000: Two bids required Over $10,000: Three bids required

5. Recommendation for sales price and marketing strategy.

6. Rental agreements, if approved by the Buyer. Failure to submit the case and marketing files as described will be considered a breach of the Selling and Servicing Contract and will subject the Servicer to a per diem interest penalty at the note rate plus any additional damages suffered by the Buyer resulting from the failure. If the case file or marketing file is more than 30 days overdue, the Buyer will request a repurchase of the Buyer’s interest.

207.04 Marketing of Acquired Properties

The marketing of an acquired property is administered by the Servicer subject to the direction of the Buyer. The properties must be maintained in marketable condition. Initial Securing and Maintenance Limits (property preservation) • Servicer has approval up to $2,350 for initial

property preservation items (trash-out, re-key, lawn, pool, etc.) Buyer must approve all expenses exceeding $2,350. Buyer is to approve any bids over $2,350.

• Approval will be handled via email unless otherwise specified by Buyer.

Initial Preservation Limit: $2,350 for re-key, securing, and the following items: • Exterior:

• Remove all personal items from grounds, storage buildings, and garages.

• Install high-voltage light bulbs in all outlets.

• Mow, edge, trim shrubbery/trees, and clean all bedding areas.

• Initial watering of grounds in non-winterized months

• In-Ground Pool: – Clean, secure and make operable (in

season). – Fence, if needed to comply with local

law. $500. – Cover per HUD regulations, if

applicable. $500. – Monthly Maintenance (if operating).

$200. – Post “KEEP OUT/NO

TRESPASSING” at pool area. – Provide photos. – NOTE: NEVER DRAIN IN-

GROUND POOLS. • Above-Ground Pool:

– In most cases these pools should be removed $350.

• Remove all mail, and advertisements • Clean gutters and downspouts

• Interior: • Remove all non-realty and personal items • Remove all exposed nails, hangers,

sticker, etc. from walls/ceilings, doors & windows

• Remove damaged and/or unappealing window treatments

• Turn on all utilities (winterize when completed, when warranted)

• Start furnace/heating units • Clean all appliances • Clean toilets, showers and tubs • Clean all windows • Clean flooring, including carpet • Install high voltage light bulbs at all

outlets • Initial cost limitations:

• One time janitorial $300 • One time carpet cleaning $250 • Initial Pool $500 • Insect/rodent infestation $250

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• On-going Preservation: • Seasonal grounds maintenance, including

mowing, edging, trimming shrubbery/trees, and mulching

• On-going watering to keep grounds appearing “as occupied”

• On-going cost limitations: • Weekly lawn maintenance $50 per

occurrence – provide photos. • Periodic interior cleaning $65 • Monthly pool $200 • Snow removal $50 per occurrence • Winterization $200 • De winterization $150 • Two smoke detectors or state

requirements $60 each • Carbon Monoxide detectors, if required,

$80 each • Subsequent ongoing preservation costs are

billed as incurred. Clearly document scope/ reasonableness of all expenses (before photos, bids, etc.); all expenses are subject to audit

Utilities • Servicer will ensure all utilities and water

are turned on and in working condition, provided condition and season warrant.

The selection of a broker will be the sole responsibility of the Servicer. The Buyer recommends selecting a broker who is a member of a local Multiple Listing Service, if one exists. The Buyer reserves the right to direct all marketing activities relative to the acquired property in the event the Buyer believes, in its sole discretion, that it would be advantageous to do so. In these instances, the Servicer will continue to administer the reimbursement of expenses and facilitate payment of any applicable taxes, hazard insurance and other items. The Servicer will continue to perform these functions until the property has been liquidated. The initial list price and terms will be determined by the Buyer. The Servicer will complete and execute the listing agreement. After 90 days on market, servicer will order a new BPO from an agent other than the listing agent at a cost not to exceed $100.00. All REO properties will be re-valued every 6 months. For properties previously valued below $250,000, this will be in the form of a BPO. For properties previously valued at $250,000 and above, an appraisal should be ordered. . When an offer is received the following details should be emailed to the REO Asset Manager assigned to the file:

1. Buyer’s name 2. Offer Price 3. Concessions 4. Estimated net proceeds 5. Close of escrow date 6. Type of financing 7. Current List price, The Servicer must contact the mortgage insurer for prior approval if the claim has not yet been settled. The mortgage insurer’s instructions must be included with the offer package sent to the Buyer. Upon acceptance of the offer, a copy of the executed contract must be submitted to the Buyer within 10 days of approval.

Once the offer has been accepted, the Servicer must ensure the closing proceeds on schedule. If there is a delay in closing which is not approved by the Buyer, the Servicer may be assessed a per diem interest penalty at the note rate. The closing documents are to be reviewed by the Servicer to ensure accuracy and compliance with the contract terms. The deed must name the trustee as transferor and be forwarded to the Buyer at least seven days prior to the scheduled closing. The Buyer will obtain the required signatures and will return the documents to the specified closing agent. Preliminary HUD-1 must be approved by Buyer prior to close of escrow. Any changes that reduce the net proceeds by $1,000 after preliminary HUD-1 has been approved need Buyer approval. A copy of the signed final HUD-1 is due to the Buyer within 2 business days of closing. The Buyer will permit the sale of an acquired property to directors, officers and employees of the Servicer, or any subsidiary of the Servicer, and to spouses and members of the immediate family who reside with any director, officer or employee of the Servicer or a subsidiary of the Servicer (a “Servicer Affiliated Person”), and to the Buyer employees and their immediate families, provided that all of the following conditions are met: 1. The sales price is substantiated by an independent

appraisal; 2. The terms of the sale are identical to those that

would otherwise be offered to the general public; 3. For a sale to any Servicer Affiliated Person, the

transaction is approved in advance by a resolution adopted by a majority of the Servicer’s board of directors, with no director having an interest in the transaction voting. If no board of directors exists within the Servicer’s organization, the transaction must be approved in advance, by the highest decision-making body within the Servicer’s organization, with no person having an interest in the transaction participating in the decision; and

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4. For a sale to a Buyer employee or to a member of his or her immediate family, the acquired property must be purchased as the employee’s or his or her immediate family member’s primary residence.

207.05 Repairs If repairs are approved by the Buyer, The Servicer must maintain close scrutiny of the contractor and must report the progress to the Buyer via the monthly report. Repairs must be completed expediently. Prior to the payment of the contractor’s bill, the Servicer must inspect the property to assure all repairs were completed properly and all the necessary releases have been signed. The Servicer should advance the funds necessary to pay the contractor upon repair completion. The Servicer shall hold the Buyer harmless for any unpaid mechanics liens, damage to the property or surrounding properties or injury to the workmen. If advantageous, the Servicer should not delay the marketing of the property pending the completion or repairs. Photos of the completed repairs must be forwarded to the Buyer. 207.06 Monthly Reports Listing agent will complete a Monthly Marketing Report for all listed properties, which are not “under contract”. These reports should be reviewed by the Servicer and submitted to the Buyer to support list price reductions, marketing strategy revisions and offers received. .

207.07 File Accounting A. Reimbursement of P&I Advances Claim settlement checks are to be deposited in the Servicer’s P&I Custodial Account within 24 hours of receipt. A Liquidation Schedule must be received by the Buyer within 48 hours of deposit. The Servicer may not reimburse itself for expenses or advances from the claim payment. Failure to comply with this requirement will result in a per diem interest penalty calculated at the note rate. Upon receipt of the final liquidation funds, the Servicer will be reimbursed for any P&I advances. .

B. Final Liquidation Proceeds All funds from the sale of the property should be deposited to the P&I Custodial Account and wired to the Buyer within 48 hours of deposit. The wiring instructions are: Bank Name – JP Morgan Chase – New York ABA # 021-000-021 Account # 304-652601 Account Name: BUYER Mortgage Securities Corp Originator to Beneficiary: Attn REO / WMS Loan #

A Liquidation Schedule along with a copy of the HUD-1 settlement statement, and the wire confirmation must be submitted within 48 hours of deposit. The Servicer may not reimburse itself for expenses or advances from the sale proceeds. Failure to comply with this requirement will result in a per diem interest penalty calculated at the note rate.

C. Reimbursement of Expenses Within 30 days after the sale of the property, a Statement of Expenses (WAMU 3001) must be submitted to the Buyer. Receipts substantiating all items must be included along with the loan history showing billed disbursements from the escrow account. In lieu of receipts for tax and insurance disbursements, the Buyer will accept certified copies of loan histories highlighting such disbursements. A table of transaction codes should also be included. The Statement of Expenses with all required receipts must be received by the Buyer within 30 days of the sale. Failure to submit the Statement of Expenses will be considered a breach of the Selling and Servicing Contract. If it is not received within 30 days, the Buyer reserves the right to subject the Servicer to a penalty of $100.00 per day plus any additional damages suffered by the Buyer resulting from the delay or deny the reimbursement of any servicing expense. Supplemental reimbursement requests for utility bills will be considered on a case-by-case basis. The Buyer reserves the right to prorate any and all expenses during the time frame that any penalties are assessed.

D. Loan Removal The Buyer will provide written instructions to remove the loan from the Servicer’s system along with reimbursement for any outstanding P&I advances and expenses due.

207.08 IRS Reporting Section 6050J of the Internal Revenue Code requires that the owner of a mortgaged property which was foreclosed or abandoned during the previous year file an information return (IRS Form 1099A) with the IRS. Servicers which have serviced acquired properties during the year must submit form 1099A to the IRS and furnish the Buyer with a copy. The borrower’s portion of Form 1099A must be furnished to the borrower on or before January 31st of the year following the acquisition. If the Servicer has no acquired properties, the Buyer must receive written confirmation of this to ensure compliance with IRS regulations. The Buyer will furnish the tax identification number to the Servicer.

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207.09 Primary and/or Pool Insurance The Servicer must submit to the Buyer a copy of the primary and/or pool mortgage insurance claim as required by the insurer and in accordance with the terms of the Master Policy. The Servicer must diligently follow up with the mortgage insurer to ensure that the claim has been perfected and no additional documentation is required to settle the claim. Any delays in receiving payment which occur as a result of the Servicer’s failure to perfect the claim will be assessed upon final settlement at a per diem interest penalty at the note rate. Upon receipt of payment of the primary or pool mortgage insurance claim, a copy of the Explanation of Benefits received from the mortgage insurance must be forwarded to the Buyer.

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Section 208. Conversion Process: Adjustable Rate Mortgages

Servicing Guide: Loan Servicing 208-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

For adjustable rate mortgages (ARMs) with conversion options, the borrower may, in accordance with the terms of the applicable note, convert the loan to a fixed rate, level payment, fully amortizing loan for the remainder of the original 30-year term. In most cases, the borrower may exercise the option to convert at any time during the first five years of the loan term or at such time during the second, third, fourth or fifth year of the loan term, according to the loan documents, which result in the effective conversion date occurring prior to the fifth anniversary date of the loan’s origination.

It is the Servicer’s responsibility to make any necessary disclosure to the borrower regarding the terms and conditions of the 30-year loan to which the borrower is converting the ARM and to ensure all of the procedures and requirements set forth in the loan documents and applicable federal, state, and local law are strictly followed. It is also the Servicer’s responsibility to ensure any converted loan retains its first lien status.

208.01 Variations in Loan Documents The Servicer must service each ARM according to the terms of the note, security instrument, disclosures and any riders and addenda to those documents. Except for the security instrument, which must be the standard FNMA/FHLMC security instrument for the state in which the property is located, the Buyer may change the loan documentation requirements in accordance with program changes. Should the borrower wish to convert to a fixed rate loan using a lower, unpaid principal balance, the curtailment must be remitted, reported and passed through before the conversion is registered. The Servicer is responsible for enforcing each ARM according to its terms and should ensure that the note, security instrument, program disclosure, and any addenda or riders meet the requirements listed in Section II of the Seller’s Guide.

208.02 Eligibility In order to exercise the conversion option, the Servicer must comply with the terms of the mortgage documents. For conversion eligibility purposes, a delinquent payment is defined as any payment not made within the month it was due. The conversion does not require any requalification of the borrower.

208.03 Conversion Fee At the time of a conversion request, the borrower must pay a non-refundable conversion fee, as stated in the mortgage documents, as of the effective conversion date. The Servicer should retain its portion of the conversion fee (25%, or as contracted).

208.04 New Mortgage Interest Rate The new fixed mortgage interest rate will be calculated; i) according to the mortgage loan documents, ii) as the rate effective as of the registration date, and iii) the sum of the required yield, plus the Servicer’s servicing fee. The servicing fee must be no greater than the servicing fee charged on the ARM but no less than .25%.

208.05 Effective Conversion Date The effective conversion date is the date on which the new fixed interest rate becomes effective. This date occurs on the first day of the second month following the conversion registration date. For example, if the conversion is registered any time in January, the new mortgage interest rate will become effective on March 1, the “effective conversion date,” and the new payment amount will become effective on April 1, the new “first fixed rate payment date.”

208.06 First Fixed Rate Payment Date The first fixed rate payment date is the date on which the first payment based on the new fixed mortgage interest rate is due. This date will always occur one month after the effective conversion date, on the first day of the month.

208.07 Mortgage Insurance Requirements

When an insured ARM is converted to a fixed rate loan, the Servicer must ensure the appropriate mortgage insurance coverage is maintained. The Servicer must notify the mortgage insurer of the conversion of any insured loan, must obtain any required amendment or endorsement (if it is the insurer’s policy to convert from ARM to fixed rate coverage), and must forward this amendment or a copy of the notification to the mortgage insurance company to the Loan Purchase Center.

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208-2 Servicing Guide: Loan Servicing (Rev. 8/03) (Last reviewed 05/16/08)

208.08 Step-by-Step Conversion Procedures:

1. The borrower must contact the Servicer for a quote on the current mortgage interest rate and conversion fee.

2. For the current mortgage interest rate, the Servicer will quote from the current day’s posting, according to the mortgage documents, plus the Servicer’s servicing fee. The Servicer must also explain that the actual rate will only be locked in once the conversion fee is received.

3. For the conversion fee, the Servicer will quote the amount (percentage of principal balance or fixed amount) as stated in the mortgage documents. The Servicer must explain that this quote is valid until the end of the current month and that the conversion fee is non-refundable.

4. If the borrower elects to convert at the quoted rate and fee, the Servicer must:

Ensure that all terms of the conversion option according to the mortgage documents have been satisfied, and After verifying the borrower’s compliance with these requirements, the Servicer will instruct the borrower to submit the required conversion fee.

5. After registering the conversion, the Servicer will prepare the Modification Agreement and all disclosures required by law and will mail them to the borrower. Documents must be mailed to the borrower no later than the third business day following the Conversion Registration Date.

6. The borrower will complete and sign the Modification Agreement, have it notarized and returned to the Servicer within the time frame specified in the mortgage documents. If the Servicer does not receive the complete package within the required time frame, the conversion is canceled.

7. If the ARM has primary mortgage insurance coverage, the Servicer must notify the mortgage insurer of the conversion, obtain any required amendments or endorsements (if it is the insurer’s policy to convert from ARM to fixed rate coverage), and forward this amendment or endorsement to the Buyer.

8. The Servicer represents and warrants the criteria listed in item 2 above have been met. If the Buyer determines at any time after conversion that a violation existed at the time of conversion, the Servicer will be required to repurchase the loan.

9. The Servicer will sign the Modification Agreement and return a signed copy to the Buyer. If the signed original must be recorded to perfect the first lien, the Servicer must notify the Buyer of this fact, and forward a copy of the recorded Modification Agreement to the Buyer.

10. The Servicer will provide the borrower with written notice of confirmation or denial of the conversion. If the conversion is denied, the conversion fee is not returned to the borrower.

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Section 301. Recordkeeping

Servicing Guide: Loan Accounting 301-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

The Servicer must maintain accurate accounting and borrower payment records. The Buyer may examine any of the records and accounting reports associated with any loans serviced on behalf of the Buyer or in which the Buyer holds an interest, the borrower’s remittances and any other reports and documentation necessary to establish the Servicer’s compliance with the Buyer’s purchase program at any reasonable time. The Buyer will:

• Monitor all monthly accounting reports submitted by the Servicer;

• Conduct procedural reviews during periodic visits to the Servicer’s place of business;

• Conduct, from time to time, in-depth audits of the Servicer’s internal records and operating procedures. Among other things, the Buyer may examine the Servicer’s financial records, the borrowers’ escrow accounts, and the underwriting standards used by the Servicer; and

• Request individual loan payment histories to ensure proper administration of borrowers accounts.

301.01 Mortgage Payment Records The Servicer must maintain permanent loan account records for each loan. These records may be in the form of hard copy (paper) or microfiche and must be maintained for six (6) years after the loan is liquidated. Each loan’s account record must identify it as a pooled loan. The Buyer does not mandate the particular system or forms to be used for the mortgage account records, but requires the system be capable of producing an account transcript itemizing the following in chronological order:

• The date, amount, distribution, installment due date or other transactions affecting the amounts due from or to the borrower; and

• The latest outstanding balances of principal, deposits, advances, and unapplied payments.

The system must also provide for the prompt disclosure of any overdraft in the account balance of deposits for the payment of taxes and insurance.

The accounts and records on loans should be maintained according to sound and generally accepted accounting practices and in a way which will permit the Buyer representatives to examine and audit the accounts and records upon request.

301.02 Servicer Compensation For each fixed rate loan serviced for the Buyer, the Servicer retains a servicing fee made up of the difference between the mortgage interest rate and the net rate to the Buyer. The net rate is defined as the rate of interest payable to the Buyer on each loan. This servicing fee must be a minimum of .25% and may not exceed a maximum of 1.00% per annum.

For adjustable rate mortgages (ARMs), the servicing fee is the difference between the gross margin stated in the mortgage Note and the net margin to the Buyer. Depending on the loan amount, the servicing fee for an ARM loan will have a minimum of .25% and no maximum. However, if an ARM converts to a fixed rate loan, the servicing fee may not exceed the original servicing fee on the ARM Note.

No servicing compensation is payable to the Servicer on any loan for any period before the purchase date. Servicing fees at liquidation are payable only in proportion to interest collected at liquidation on the respective loan.

Because sale proceeds include an adjustment for interest and servicing fees from the first day of the month of purchase to the purchase date, full servicing fees are deducted from the first installment due the Buyer. On the purchase date, the Buyer will pay accrued interest at the net rate from the first day of the month of purchase to the purchase date. Therefore, the Servicer remits a full month’s interest at the net rate with the first installment due the Buyer. For a full discussion of the loan sale transaction, refer to Section 504 of the Seller’s Guide.

The Servicer may deduct servicing fees before depositing daily collections in the P&I Custodial Account. If the Servicer decides to deposit gross interest at the mortgage interest rate to the P&I Custodial Account, servicing fees may be withdrawn daily by the Servicer.

If necessary, the Servicer may estimate servicing fees before the calendar month-end. Servicing fees deducted or withdrawn by the Servicer should be reported to the Buyer in the monthly accounting reports.

After each calendar month-end, the Buyer will recompute the servicing fees due to the Servicer and confirm the net interest at the net rate due to the Buyer on the next automatic withdrawal date. The Servicer may have to make a cash adjustment to the P&I Custodial Account for any over or under deduction of servicing fees in the preceding month.

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301-2 Servicing Guide: Loan Accounting (Rev. 8/03) (Last reviewed 05/16/08)

Any late charges, assumption fees, or other charges provided for in the loan documents with the exception of ARM to fixed rate loan conversion fees as discussed in Section 208, and collected by the Servicer as additional compensation must be accounted for separately from all other payments made by the borrower and must be included in separate account records and reflected in the bank account reconciliation.

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Section 302. Identifying Washington Mutual Mortgage Securities Corp. Loans

Servicing Guide: Loan Accounting 302-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

302.01 Loan Numbers Shortly after purchase and prior to the first month end cutoff date, the Servicer will be notified of the nine digit Buyer loan number. The Servicer must include this loan number on all accounting and servicing reports and correspondence which relate to a specific loan effective with the first month of reporting.

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Section 303. Custodial Accounts

Servicing Guide: Loan Accounting 303-1 (Rev.12/12/08)

The Servicer must establish, maintain and monitor for the mortgage loans serviced by the Servicer on behalf of the Buyer one or more principal and interest custodial account (collectively, the “P & I Custodial Account”), into which all payments of principal and interest shall be deposited, and one or more taxes and insurance custodial account (collectively, the “T & I Custodial Account”), into which all payments of taxes and insurance shall be deposited. The P&I Custodial Account shall be maintained separately from the T&I Custodial Account. Unless otherwise authorized by the Buyer in writing, each custodial account must be insured by the Federal Deposit Insurance Corporation ("FDIC"). Funds deposited in a custodial account may not exceed the level insured by FDIC deposit insurance. Any amount on deposit in a P&I Custodial Account which is not fully protected or insured by the FDIC must be immediately remitted to the Buyer. Any amount on deposit in a T&I Custodial Account which is not fully protected or insured by the FDIC must be removed from that account and deposited in another fully FDIC-insured T&I Custodial Account established and maintained by the Servicer. All custodial account records must be maintained in a manner consistent with prudent industry practices and must be readily accessible to the Buyer's representatives at any time. The depository institutions at which custodial accounts are established and maintained must be assigned the following ratings from two or more of the specified rating agencies:

• “C” or better for TBW • “125” or better for IDC • “P3” or better for Moody’s • “A3” or better for Standard and Poor’s

It is the Servicer’s responsibility to ensure the continued eligibility of the depository institution in which the custodial accounts are maintained. Should a depository institutions rating fall below the above noted minimums, the Servicer is required to move the funds to a depository institution meeting the above requirements, notify the Buyer of the change in accounts and execute new Custodial Account Letter Agreements and ACH Drafting Authorization.

The establishment of any Custodial Account and any changes in an existing account must be communicated to the Buyer in a Letter Agreement prepared by the Servicer. The Letter Agreements vary according to whether the account is in-house or not and according to the type of account.

Though not required, a Servicer who services loans in more than one pool may establish separate P&I and T&I Custodial Accounts for each one.

As soon as the Buyer purchases a loan, the Servicer must transfer any related funds on deposit to the appropriate custodial account.

The Servicer must establish a reasonable daily work cutoff to ensure that collections are credited to the custodial account no later than the business day following their receipt.

All custodial accounts must be demand deposit accounts and may be interest bearing.

303.01 Principal and Interest Custodial Accounts All funds for the payment of principal and/or interest which are received by the Servicer must be held in trust by the Servicer and deposited to the P&I Custodial Account. This includes any proceeds from the liquidation of a defaulted loan, from the mortgage pool insurance and primary mortgage insurance, and from any other policies of insurance collected by the Servicer. This also includes any prepayment in part or in whole accompanied by interest to the date of the prepayment. In the case of liquidation, the Servicer should complete and forward the Liquidation Schedule (WAMU 4009) to the Buyer within 48 hours of deposit of funds.

Each account must clearly indicate the respective interests of the Servicer as trustee and of the Buyer.

The account designation must be: [Servicer’s Name], as agent, trustee and/or bailee of principal and interest custodial account for Washington Mutual Mortgage Securities Corp., its successors and assigns, for various mortgagors and/or various owners of interests in Washington Mutual Mortgage Securities Corp. mortgage-backed pools.

As soon as the Buyer purchases any loan, the Servicer must transfer all related principal and interest funds on hand to the P&I Custodial Account.

The Servicer should immediately remit to the Buyer any amount deposited in the P&I Custodial Account that exceeds the insurance limits set by the depository’s insurance authority. Detailed remittance instructions will be published at the time each pool is issued. The Servicer must also notify the Buyer within 24 hours regarding the amount of this remittance.

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ACH DRAFT PROCEDURES

P&I Custodial Accounts will be debited through the Automated Clearing House (ACH). When setting up the P&I Custodial Account, the Servicer must have the ACH Debit Authorization (WAMU 4006) completed by the institution which houses the account. This in- stitution must be a member of the ACH network or a correspondent of an ACH member. The account may be one of the Servicer’s P&I Custodial Accounts or it may be a separate clearing account. Each month on the withdrawal date the Servicer must have on de- posit in the P&I Custodial Account, or clearing account, “same day funds” or “good funds” for all sums due the Buyer. The deposit must be sufficient to cover the amount of the debit communicated to the Servicer on the Notice of Automatic Withdrawal. Each month, the Buyer will debit the accounts on the 20th calendar day or on the preceding business day if the 20th day is not a business day through an ACH transaction. If funds are not available on the day of the draft, the Servicer will be assessed a penalty, at the highest prime rate published daily in the Wall Street Journal column entitled “Money Rate” plus 2.0%.

P&I REMIT PROCEDURES

Each month on the date the funds are due to the Buyer, the Servicer must have on deposit in the P&I Custodial Account, or clearing account, “same day funds” or “good funds” for all sums due the Buyer. The Servicer must remit to the Buyer the total amount of the debit communicated to the Servicer on the Notice of Automatic Withdrawal. Each month, the Servicer will remit the required funds per Notice of Automatic Withdrawal on the 20th calendar day or on the preceding business day if the 20th day is not a business day. If funds are not received on the day of the required remittance date, the Servicer will be assessed a penalty, calculated using the highest annual prime rate published daily in the Wall Street Journal column entitled “Money Rate” plus 2.0%.

The Servicer may make withdrawals from the account only for the following purposes: 1. To reimburse itself for delinquency advances that

have been recovered from subsequent collections from the related mortgagor, or

2. To remove amounts that have been deposited to the account in error, or

3. To remove fees, charges, or other such amounts that are deposited on a temporary basis in the account, or

4. To clear and terminate the account.

The Servicer should not use the P&I Custodial Account as a collection clearing account, but establish a separate

account for this purpose. Refer to the discussion of clearing accounts in Section 303.03.

303.02 Taxes and Insurance Custodial Account The Servicer must deposit all collections of taxes, assessments, ground rents, insurance premiums and comparable items to the T&I Custodial Account. The Servicer is responsible for ensuring that the account is maintained and administered in accordance with applicable state and federal laws and regulations. The Servicer will be solely responsible for payment of any interest due to the mortgagor. Withdrawals may be made only to effect the timely payment of borrowers’ taxes and insurance premiums, to refund borrower surpluses, to recover servicing advances and comparable items, to remove any amounts deposited in error, and to clear and terminate the account.

At least annually, the Servicer must compute the required escrow payments based on reasonable estimates or assessments and bills to determine that sufficient funds are being collected to meet all escrow payments. If the amount held in the T&I Custodial Account by the Servicer, together with the future monthly installments of escrow payments, exceed the amount required to pay charges as they become due, plus any cushion permitted under applicable law and regulation, the Servicer must either repay the excess promptly to the borrower or credit the excess to the borrower by a reduction in monthly escrow payments.

If the amount held in the T&I Custodial Account by the Servicer is deemed insufficient to pay charges when due, the Servicer should obtain the necessary additional funds from the borrower before the latest date on which the charges may be paid prior to penalty, lapse of insurance policies, etc. If the borrower fails to remit the deficient amount, or if there is insufficient time to obtain the amount, the Servicer must pay any charges due and reflect the shortage in the borrower’s T&I Custodial Account.

The account is to be designated in the name of the Servicer acting as an agent for borrower payments in order to show that the account is custodial in nature.

The account designation must be: [Servicer’s Name], as agent, trustee and/or bailee of Taxes and Insurance Custodial Account for Washington Mutual Mortgage Securities Corp., its successors and assigns for various mortgagors and/or various owners of interests in the Buyer mortgage-backed pools.

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Section 303. Custodial Accounts

Servicing Guide: Loan Accounting 303-3 (Rev.12/12/08)

The Servicer must maintain records identifying each borrower’s payment and the account into which each payment is deposited.

303.03 Clearing Accounts If the systems and procedures of the Servicer require the use of clearing accounts, these accounts should be governed by the following conditions: 1. The titles of such accounts must reflect that they are

custodial in nature and the depository in which the accounts are maintained must be informed in writing that they are Custodial Accounts.

2. A check drawn on the P&I or T&I Custodial Account must be deposited to a disbursement clearing account before or at the same time as any checks on the clearing account are issued.

3. A single clearing account must not be used as both a collection and a disbursement clearing account.

4. The Servicer must maintain adequate records and audit trails to support all credits to and charges from the borrowers’ payment records and accounts.

5. The Servicer must deposit its servicing fees into a separate account.

6. Collections deposited to a depository clearing account must be credited to the appropriate Custodial Account no later than the first business day following their receipt by the Servicer.

303.04 Interest-Bearing Accounts The Servicer may use an interest-bearing account as its T&I Custodial Account provided that the requirements specified for the establishment and maintenance of the T&I Custodial Account set forth above and the requirements listed below are met: 1. The account complies with all local, state and

federal laws and regulations governing borrowers’ escrow accounts and interest-bearing accounts,

2. The Servicer ensures that all interest paid or credited to the account that is not subsequently credited to or paid to the borrowers will be removed from the account within 30 days of receipt of such interest,

3. The Servicer agrees that under no circumstances will it ask the Buyer to advance funds for the payment of taxes, insurance premiums or comparable items because the escrow funds are held in an account not withdrawable on demand and are therefore unavailable, and

4. The Servicer will comply, at its own expense, with all applicable laws, regulations and contracts requiring payment of interest on borrowers’ escrow accounts.

303.05 Prepayment Fees If the note or security instrument executed in connection with a mortgage loans requires that the borrower pay a fee or other charge in the event that all or part of the outstanding principal balance of the mortgage loans is prepaid prior to its scheduled due date, the Servicer must collect such fee or other charge from the borrower on accordance with the terms of the note and security instrument, provided that collection of such amounts is permitted under applicable state and federal law.

Prepayment fees must be deposited in the P & I Custodial Account within 24 hours of receipt and remitted to the Buyer along with a copy of the note, rider, and addendums related to the loan, at the time the related prepayment proceeds are remitted to the Buyer. Prepayment fees collected by the Servicer must be properly reflected on the Remittance Reconciliation (WAMU 4010), Curtailments and Prepaid Installments Report (WAMU 4007), as well as the Collection Report (WAMU 4008) for the applicable collection period (comparable system generated reports are acceptable).

If any prepayment fees are remitted in error, a request for a refund must be completed in writing within 30 days of the funds being received by the Buyer. A copy of the note, rider, and addendum must be provided with this request. These funds may not be recaptured by the Servicer by lowering any future remittances.

303.06 Buydown funds All funds for the payment of principal and/or interest that are received by the Servicer in the form of buydown funds will be held in trust by the Servicer and deposited to either the P&I Custodial Account or to a separate buydown custodial account.

Depending on how the buydown fund is calculated, the funds must be deposited as follows:

• Present value discounted buydown funds: The Servicer must deposit buydown funds in an interest-bearing custodial account that has been established exclusively for those funds. The rate of interest earned on this account must be equal to the discount rate used to calculate the original value of the buydown funds.

• Full value buydown funds: The Servicer may deposit buydown funds in either the P&I Custodial Account or in a separate custodial account for buydown funds.

Neither custodial account may be interest-bearing.

The Servicer is responsible for accurately accounting for all buydown funds. Individual records must be maintained for each buydown loan and for each Buyer

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pool. These records must clearly identify the monthly principal and interest amount due from the borrower, the monthly amount of buydown funds and must be balanced to the appropriate custodial account each month.

A. Buydown Custodial Account If a separate buydown custodial account is established, the account must clearly show the respective interests of the Servicer as trustee and of the Buyer as follows:

[Servicer’s Name], as agent, trustee and/or bailee of Buydown Custodial Account for Washington Mutual Mortgage Securities Corp., its successors and assigns for various mortgages and/or mortgage-backed pools.

In addition, the Servicer must, by the 20th calendar day of each month, transfer the correct amount of buydown funds to the P&I Custodial Account. The Buyer will not withdraw funds directly from a buydown custodial account. If the Servicer fails to transfer the funds by the 20th day of each month, an overdraft may result in the P&I Custodial Account.

B. Buydown Funds in P&I Custodial Account If buydown funds are held in the P&I Custodial Account, the Servicer must ensure that the buydown funds are applied only as specified in a temporary buydown agreement. The buydown funds may not be used to pay any past due payments, reinstate a loan, or cure any default. In the case of an advance of principal and interest, the advance must not be taken from the buydown funds within the P&I Custodial Account.

303.06 Letter Agreements and ACH Debit Authorization The appropriate custodial account forms must be on file with the Buyer before any loans are purchased. If these forms are not on file with us before a scheduled purchase date, the Buyer reserves the right to suspend purchase until the completed forms are received. However, if none of the loans being purchased is subject to a buydown plan, the Buydown Custodial Account Letter Agreement is not required. The custodial account forms are: 1. Principal and Interest Custodial Account Letter

Agreement (WAMU 4002) 2. Taxes and Insurance Custodial Account Letter

Agreement (WAMU 4004) 3. Buydown Custodial Account Letter Agreement

(WAMU 4014) 4. ACH Debit Authorization (WAMU 4006)

NOTE: Servicers which are not insured by FDIC must always establish and maintain Custodial Accounts for Washington Mutual Mortgage Securities Corp. at an outside depository that is insured by FDIC.

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Section 304. Loan Accounting

Servicing Guide: Loan Accounting 304-1 (Rev. 08/10/05)

(Last Reviewed 05/16/08)

304.01 Amortization Method All loans will amortize with interest-in-arrears reducing the principal balance to zero at the end of the term. Each loan must be repayable in equal monthly installments, except for the last installment, based on a 30-day month/360-day year. Interest-in-advance is never permitted. In addition, only full payments of interest and principal may be applied and capitalization is not allowed. Due dates may only be the first day of the month. Odd due date loans are accepted on an exception basis. Contact a Loan Accounting Specialist in the Servicer Accounting Department for reporting requirements.

304.02 Application of Payments Payments received from a borrower will ordinarily consist of interest, principal, deposits for insurance, taxes, and related charges, and late charges. Accordingly, payments received from the borrower must be applied by the Servicer in the following order: 1. Escrow deposits for insurance, taxes, etc. 2. Interest on the loan 3. Principal on the loan 4. Late charge and any other fees due to the Servicer

When the full amount of a payment is not received, the following procedure should be followed:

1. If the deficiency in the required installment (principal, interest, taxes and insurance) is $25 or less, the amount applied to the borrower’s escrow account should be reduced, or

2. If the deficiency exceeds $25 or if the borrower has no escrow account, the Servicer may return the partial payment or deposit it in the P&I Custodial Account until sufficient funds are received.

Whenever deficiencies are treated as unapplied payments, the funds must be held in the P&I Custodial Account as unapplied until sufficient funds have been received to complete the full installment. Under no circumstances should the principal or interest be shorted for the amount of the deficiency. Short payments that are deposited into suspense accounts should be properly accounted for and appear on the borrower’s payment history.

A. Temporary Buydown Funds A loan with a temporary buydown must be amortized at the note interest rate, not at the bought-down interest rate. This will ensure that payments are collected to properly amortize the loan.

The Servicer must hold any buydown funds in trust and must apply these funds toward the payment of the scheduled monthly interest due on the note only upon receipt of the remainder of the monthly payment from the borrower. The buydown funds may not be used to pay any past due payments, reinstate the loan, or cure any default.

If the loan is paid in full, the remaining buydown funds will be credited to the outstanding balance at liquidation. If the property is sold as a result of foreclosure, the remaining buydown funds will be credited to the outstanding principal balance at the time of sale. In either case, if applicable, the funds will be discounted to a present value at the original discount percentage.

If the property is sold and the loan is assumed by the purchaser, the buydown funds will continue to be applied to reduce the mortgage payment under the original terms of the buydown plan.

B. Curtailments A curtailment is any application of additional principal which does not reduce the unpaid principal balance to zero. The Servicer may accept and apply a curtailment to reduce the principal balance only if the loan is current. If a curtailment is received while a loan is not current, and the funds received are insufficient to bring the loan current, the funds must be deposited into the P&I Custodial Account until the loan is brought current.

For delinquent loans, if the funds are sufficient to cover any past due amounts, the funds must be used to bring the loan current. Any funds remaining after the loan is current may be applied by the Servicer as an additional payment of principal.

Funds received in consideration of a partial release of security must be applied to the outstanding principal balance, and only after approval has been received from the Buyer. Funds received when part of the property is taken by eminent domain must be applied to the outstanding principal balance unless the Servicer recommends, and the Buyer approves, other application of the funds.

Approval must be obtained from Buyer for any modifications that reduce the monthly payment due to application of a curtailment.

Curtailments and prepaid curtailments must be reported to the Buyer separately on or in a format similar to the Curtailments and Prepaid Installments Report (WAMU 4007).

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C. Curtailment Adjustments If a curtailment is made with respect to a mortgage loan, the principal balance of the mortgage loan must be reduced be an amount equal to1/12 of the product of (i) the curtailment and (ii) the applicable note rate.

If a curtailment is applied to a loans that is more than one month prepaid the curtailment adjustment is applied raising the schedule UPB, to correctly amortize the loan.

D. Liquidations A liquidation is the application of a payment to a loan which reduces the unpaid principal balance to zero. Interest should be calculated on a 365 day per diem basis in the month of liquidation.

Liquidation proceeds must be deposited to the P&I Custodial Account within 24 hours of receipt. The Servicer must report liquidations on, or in a similar format to, the Liquidation Schedule (WAMU 4009) which must be received by the Buyer within 48 hours of the deposit.

The Servicer must remit liquidation funds within 48 hours of receipt to the Buyers account. The remittance amount must agree to the Liquidation Schedule (WAMU 4009).

The Servicer must also complete and send a Release of Mortgage form. The Release must be submitted in a timely manner, and any penalties for delays in recording will be the responsibility of the Servicer. The Release should conform to the one normally used in the state in which the mortgaged property is located. Any special requirements for that state should be noted by the Servicer for our information.

304.03 Advances

A. Delinquency Advances If amounts deposited into the Servicer’s P&I Custodial Account are insufficient to cover the amount due to the Buyer on the ACH withdrawal date, the Servicer must advance its own funds with respect to delinquent and foreclosed loans and REO properties. If the amount on deposit in the P&I Custodial Account for any one pool on the day immediately preceding the withdrawal date is less than the amount of the monthly withdrawal due, the Servicer must have on deposit in the P&I Custodial Account an amount equal to the monthly withdrawal. The amount advanced by the Servicer must be equal to the principal amount plus interest at the net rate for the applicable payment cycle of the delinquent loan(s).

The Servicer may reimburse itself for advances from collection of payments from the borrower. Monthly

principal and interest advances are not expected to become an expense to the Servicer. See Section 207 for a further discussion of acquired properties.

B. Servicing Expenses For each loan, the Servicer must advance all servicing costs and expenses as they occur, subject to prior approval from the Buyer when required. These expenses may include the cost of:

• The preservation, repairs and protection of the property,

• Any enforcement of the note and security instrument, including foreclosures,

• The management and liquidation of the property if it is acquired in satisfaction of the loan, and

• Advances for tax and insurance.

C. Reimbursement of Expenses Expenses may be recovered from the borrower upon reinstatement from the foreclosure. In no case may the Servicer recover expenses from the principal and interest payments on another loan or from another borrower’s escrow account.

The Servicer must complete and submit a Statement of Expenses (WAMU 3001) within 30 days of final disposition of the property. Refer to Section 207.07 C for further details. Copies of paid receipts or canceled checks must be included for each item listed on the Statement of Expenses. In lieu of receipts for tax and insurance disbursements, the Buyer will accept certified copies of loan histories highlighting such disbursements.

304.04 Adjustable Rate Loans

A. Interest or Payment Adjustments The Servicer must enforce each adjustable rate mortgage according to its terms. This includes making periodic interest rate and payment adjustments as specified by the note. The Servicer must establish procedures to monitor the applicable index and to send and receive notices to and from the borrower in order to assure that the Servicer uses the latest available value for the index in determining an interest rate change and that adjustments to the interest rate are correctly made in a timely fashion. The new monthly principal and interest payment must be sufficient to fully amortize the principal balance as of the adjustment date over the then remaining term of the note at the adjusted loan rate, unless otherwise stated in the note.

If the Servicer’s failure to properly make a scheduled interest rate or payment adjustment affects the Buyer’s

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ability to make future adjustments under the note, repurchase may be required. The Servicer shall indemnify and hold the Buyer harmless against any losses, claims, liabilities, and expenses (including attorney’s fees) incurred by the Buyer as a result of the failure to properly adjust the interest rate or payment amount of any loan serviced hereunder.

B. ARM Indices Indices published in the Federal Reserve Bulletin H.15 (519) are considered, for the purposes of interest rate adjustment, to be in effect on the date of release.

C. Required Notices to Buyer The new interest rate and/or the new principal and interest constant must be reported for adjustable rate loans two (2) months before the new payment amount is effective. For example, if the borrower’s interest rate is scheduled to change on January 1 and/or a payment change is effective February 1, the new loan interest rate and the new principal and interest payment will be reported to the Buyer at the accounting cycle period that ends December 31.

D. Notices to Borrowers The Servicer must notify the borrower before the effective date of any change in the principal and interest constant. The notice of payment change should always be mailed, in compliance with the mortgage documents, before the new principal and interest payment becomes effective. All notices must include the name, title and telephone number of a person who will be able to answer any inquiries the borrower may have about the notice and must conform to accepted servicing practices and all applicable laws.

E. Prepaid Installments Prepaid installments should not be accepted prior to the interest rate or payment change of an adjustable rate loan. The Servicer is required to suspend prepaid installments until the new interest rate and/or P&I constant is known. Once the new P&I constant is determined, the Servicer should apply the prepaid installment. Any excess should be refunded to the borrower or deposited to the escrow account. Any shortages must be collected from the borrower or advanced by the Servicer before the prepaid installment is applied, and reported.

F. Delinquent Installments If an adjustable rate loan is delinquent, in foreclosure, or in REO status and is scheduled for an interest change or payment change, the Servicer must track any change on

its accounting records and report this information to the Buyer on the ARM Adjustments Report (WAMU 4013) or equivalent form. The Servicer must notify the borrower of any payment change even when the loan is delinquent or in foreclosure, following the same procedures as for a current loan.

G. Delinquency Advances For adjustable rate loans, the amounts advanced monthly for delinquent principal and interest must reflect any changes in the interest rate and monthly payment amount.

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Section 305. Reporting to Washington Mutual Mortgage Securities Corp.

Servicing Guide: Loan Accounting 305-1 (Rev.05/16/08)

The Servicer is required to report certain compliance items and accounting reports each month on the activity and status of loans purchased by the Buyer, beginning with the month of purchase. Servicers may choose any of the following media for reporting purposes:

• hard copy (paper)

• electronic file sent via email

• other electronic media (e.g., magnetic tape, disk)

The method chosen should be based on loan servicing volume, and implementation must be coordinated through the Buyer’s Servicer Accounting and IT Departments. Servicers are required to report electronically for each WMMSC assigned servicer number that contains 100 or more loans. Regardless of the media used for reporting purposes, the format must meet the Buyer requirements. Refer to Appendix E for complete details.

305.01 Monthly Reporting Package The Servicer must submit monthly consolidated accounting reports for all loans serviced in the WMMSC assigned servicer number.

The monthly accounting package must be received by the Buyer no later than 5:00 PM EDT on the fifth business day of each month, beginning the month following the purchase of the loans.

The monthly accounting cycle is a calendar month and begins with the month of purchase.

The monthly collection activity is reported on an actual loan detail basis with remittances made on a scheduled basis. The monthly accounting package must contain the following types of reports or be in an automated format:

1. Remittance Reconciliation (WAMU 4010). This report reconciles all P&I Custodial Account activity for the previous month at Servicer level.

2. Analysis of Custodial Accounts (WAMU 4011). This report reconciles all T&I Custodial Account activity at Servicer level.

3. Curtailments and Prepaid Installments Report (WAMU 4007). This report must be completed and submitted whenever additional principal is ap- plied to a loan. Prepaid installments must be reported separately from curtailments. A curtailment is any application of additional principal which does not reduce the unpaid principal balance to zero. Curtailments are permitted only when the loan is current. Prepaid installments are payments received prior to the scheduled due date.

4. Collection Report (WAMU 4008). This report must include payments collected on all loans including those 30 or more days delinquent as of the end of the previous month.

5. A Trial Balance Report (WAMU 4018) 6. Delinquency Report --Refer to Section 205.01 (B) 7. New Loans Report (WAMU 4017) and Loans

Removed Report 8. Copy of the Liquidation Schedule (WAMU 4009)

9. Loan histories as requested

In addition to the above mentioned accounting package, the Buyer also requires a Foreclosure Recommendation/Individual Delinquency Report (WAMU 3003) by the fifth business day of the month. As detailed in Section 205, the Buyer requires monthly responses to Exception Turnaround Reports and Excessive Delinquency Notification Letters within stated time frames.

The Servicer is also required to disclose any instances of material default under Regulation AB 17 CFR 229.1100-1123, with respect to the servicing of any mortgage loans. The Servicer must disclose any instance of material default in the month such default has been deemed to be material, along with a recommendation to the Buyer for correcting the material default.

A. Penalties for Late Submission of Reports A Servicer that fails to provide accurate accounting and servicing reports within the time frame required violates its responsibilities and is subject to the following remedies:

1. For the first late reporting offense in any consecutive 12-month period, a warning letter is sent to the managing officer of the institution, with a copy to the accounting department;

2. For the second late reporting offense in any consecutive 12-month period, the Servicer is charged a $250 late reporting fee, per report;

3. For the third late reporting offense in any consecutive 12-month period, the Servicer is charged a $500 late reporting fee, per report;

4. For the fourth late reporting offense in any consecutive 12-month period, the Servicer will be terminated for cause.

Inaccurate or incomplete reports will be considered the same as late reporting for the purpose of assessing penalties.

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The Buyer reserves the right to change the late reporting fee and all other remedies at any time, at its sole discretion.

305.02 Reporting Liquidations A Liquidation Schedule (WAMU 4009) must be submitted whenever the principal balance of a loan is reduced to zero. One form is submitted for each loan liquidated. The original form must be received by the Buyer within 48 hours of payoff and be immediately followed by: 1. Statement of Loan Paid-in-Full/Request for Release

of Mortgage Documents (WAMU 4019) 2. Legal document conveying, releasing or satisfying

lien

If circumstances prevent the Servicer from providing the conveyance document within five (5) business days, the “liquidation package” should not be held up. At the time the release document is submitted, the Servicer must have a cover letter attached advising the date the “liquidation package” was sent and provide the Buyer loan number.

Each time a loan is paid in full, or otherwise liquidated, the funds must be deposited to the P&I Custodial Account within 24 hours after they are received. The Servicer must remit liquidation funds within 48 hours of receipt to the Buyer’s account. The remittance amount must agree to the Liquidation Schedule (WAMU 4009). Refer to Appendix B for wire instructions when remitting liquidation funds.

Failure to remit funds to the Buyer within these time frames will result in a penalty assessed to the Servicer at a daily rate equal to the greater of 1) the highest prime rate quoted in the Wall Street Journal regular column entitled “Money Rate” on the first business day of each month, plus two (2.0%) percent, or 2) the note rate of the liquidating loan. If the prime rate is not published, the rate to be charged will be determined by the Buyer. There is a minimum charge of $50.00 on all penalties assessed.

305.03 Monthly Reporting and Remittance Summary The Buyer will debit the P&I Custodial Account via the ACH network on the 20th calendar day of each month or on the preceding business day if the 20th calendar day falls on a weekend or holiday. These withdrawals begin in the month following the month of purchase of a loan.

The Buyer will send a Notice of Automatic Withdrawal to the Servicer within two business days preceding the

withdrawal date. This notice will enable the Servicer to determine if sufficient funds are available in a P&I Custodial Account and to make any necessary advances.

If the Servicer does not receive a Notice of Automatic Withdrawal, the Servicer must contact the Buyer to obtain the information. The Servicer is responsible for assuring that sufficient funds are available for withdrawal.

For each Servicer, the Notice of Automatic Withdrawal and the actual debit will consist of:

• The total of (1) the aggregate scheduled interest portions (whether or not collected) of the monthly installments due on the first day of the month in which the withdrawal date occurs (this amount is equal to one month’s interest calculated at the net rate) and the total of any adjustments affecting the aggregate schedule of principal, and (2) the aggregate unscheduled interest collected on loans in the pool during the month before the month in which a withdrawal date occurs.

• The total of (1) the aggregate scheduled principal portions (whether or not collected) of the monthly installments due on the first day of the month in which the withdrawal date occurs and the total of any adjustments affecting the aggregate schedule of interest, and (2) the aggregate unscheduled principal collected on loans in the pool the month before the month in which a withdrawal date occurs.

• Less the aggregate funds previously wire transferred to the Buyer on liquidations and interim remittances.

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Servicing Guide: Loan Accounting 305-3 (Rev.05/16/08)

The table below summarizes the monthly accounting activities, including the Servicer’s reporting responsibilities, from the purchase date through the date of the first principal and interest withdrawal. The example dates show what would actually have occurred if the sale had been transacted on November 15, 2002.

Reporting Responsibility

Time Line

Example Date

The Buyer purchases loans and forwards the Purchase Advice to the Servicer.

Friday 11/15/02

The Servicer’s first cut-off date.

End of the month

11/30/02

The Buyer receives the Servicer’s monthly accounting package.

5th business day

12/06/02

The Servicer receives the Notice of Automatic Withdrawal from the Buyer.

Two business

days before withdrawal

12/18/02

The Servicer reviews the P&I Custodial Account to ensure that sufficient funds, per the Notice of Automatic Withdrawal, are deposited.

One business day

before withdrawal

12/19/02

The Buyer withdraws the total amount due, per the Notice of Automatic Withdrawal, from the P&I Custodial Account via an ACH transaction.

20th calendar day or preceding business day

12/20/02

NOTE: Notice of any liquidation and liquidation funds must be received by Washington Mutual Mortgage Securities Corp. on the Liquidation Schedule (WAMU 4009) within 48 hours of receipt of funds.

A. Monthly Accounting Package If the monthly accounting package is not submitted accurately and on time, the Buyer may not be able to process the unscheduled activity to the loans before the close of the current cycle. This could result in a difference between the amount drafted per the Notice of Automatic Withdrawal and the remittance amount calculated by the Servicer. If this should occur, the unscheduled activity will be applied to the loan in the following cycle. It is the Servicer’s responsibility to ensure that the Buyer receives an accurate monthly accounting package by the required due date to avoid

loan level discrepancies. Any resulting interest differences will be charged to the Servicer.

B. Adjustable Rate Mortgages If the ARM Adjustments Report (WAMU 4013) is not submitted accurately and on time, the Buyer will make certain assumptions regarding the current interest rate and monthly payment adjustment for all ARM loans due to adjust in the given month. The Notice of Automatic Withdrawal will reflect these assumptions. If our assumptions are incorrect, our withdrawal could result in an overdraft of the Servicer’s P&I Custodial Account. It is the Servicer’s responsibility to ensure that the Buyer receives the ARM Adjustments Report on a timely basis to avoid such incorrect withdrawals.

C. Balloon Resets For Balloon Reset Mortgages with reset options the borrower may reset to a modified fixed rate/ARM loan depending on the original balloon note. Most of the jumbo balloon loans reset into an ARM for an additional 30 years (40 years total). In most cases, 5, 7, and 10 year balloon loans have an option to reset into a fixed rate, fully amortizing payment for the remainder of the 30 years. It is the Servicer’s responsibility to notify the borrower at least 60 calendar days in advance of the balloon maturity date. The Servicer must also deliver to the borrower a description of the historical performance of the applicable index and the maximum interest rate, which may be due under the modification. The borrower must provide acceptable proof of occupancy. At the time of the balloon reset the note holder must remain in first lien status. Overall caps and floors are stated in the original balloon note. Once the Servicer has received the borrower’s notice of intent to reset or not, the Buyer should be notified of the interest -- only payment for the maturity month if resetting or the intent to pay in full at the maturity date. In most cases the balloon reset should be completed prior to the maturity date of the balloon. Upon completion of the balloon reset, the Buyer should be provided a completed copy of the balloon modification documents. D. Recast Modification The Servicer must get prior approval from the Buyer for a recast of the monthly principal and interest payment following the borrower’s payment of a substantial curtailment. Neither the interest rate nor the maturity date may be altered. Upon requesting approval the Servicer should provide the Buyer with the following information: loan number, borrower’s name and address

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of property, amount of curtailment, new principal and interest payment and the effective date of payment. After the approval the Servicer will prepare the Modification Agreement and mail to the borrower. The borrower will complete and sign the Modification Agreement and mail it back to the Servicer. The Servicer will then fax a copy of the completed Modification to the Buyer which must be received 30 days prior to the effective date of the new principal and interest payment. If not received within 30 days, the change will not become effective until the next cycle and the Servicer will be responsible for the difference in remittance.

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Section 306. Reporting and Remitting to Washington Mutual Mortgage Securities Corp. for Interim Servicers

Servicing Guide: Loan Accounting 306-1 (Rev. 05/16/08)

An Interim Servicer is defined as a servicer who is approved to service loans to the Buyer for an interim period of time until the servicing of the loans is transferred to Washington Mutual Bank, FA (WAMU).

One or more new WMMSC assigned servicer numbers will be issued to an Interim Servicer. Separate WMMSC assigned servicer numbers will be assigned to an Interim Servicer for portfolios containing servicing released loans and for servicing retained loans.

An Interim Servicer is required to report certain accounting data each month on the activity and status of loans purchased by the Buyer, beginning with the month of purchase. Interim Servicers may choose either of the following media for reporting purposes:

• Electronic file sent via email

• Other electronic media (e.g., magnetic tape, disk)

The method chosen should be based on loan servicing volume, and implementation must be coordinated through the Buyer’s Servicer Accounting and IT Departments. Interim Servicers are required to report electronically for each WMMSC assigned servicer number regardless of the number of loans in the portfolio. Regardless of the media used for reporting purposes, the format must meet the Buyer’s requirements. Refer to Appendix D for complete details.

306.01 Monthly Reporting Package The Interim Servicer must submit monthly consolidated accounting reports for all loans serviced in the WMMSC assigned servicer number.

The monthly accounting package must be received by the Buyer no later than 5:00 PM EDT on the fifth business day of each month, beginning the month following the purchase of the loans.

The monthly accounting cycle is a calendar month and begins with the month of purchase.

The monthly collection activity is reported on an actual loan detail basis with remittances made on a scheduled basis. The monthly accounting package must contain the following types of reports or be in an automated format:

1. Remittance Reconciliation (WAMU 4010). This report reconciles all P&I Custodial Account activity for the previous month at Servicer level.

2. Analysis of Custodial Accounts (WAMU 4011). This report reconciles all T&I Custodial Account activity at Servicer level.

3. Curtailments and Prepaid Installments Report (WAMU 4007). This report must be completed and submitted whenever additional principal is applied to a loan. Prepaid installments must be reported separately from curtailments. A curtailment is any application of additional principal which does not reduce the unpaid principal balance to zero. Curtailments are permitted only when the loan is current. Prepaid installments are payments received prior to the scheduled due date.

4. Collection Report (WAMU 4008). This report must include payments collected on all loans including those 30 or more days delinquent as of the end of the previous month.

5. A Trial Balance Report (WAMU 4018) 6. Delinquency Report (WAMU 3002) 7. New Loans Report (WAMU 4017) and Loans

Removed Report 8. Copy of the Liquidation Schedule (WAMU 4009)

9. Loan histories as requested

In addition to the above mentioned accounting package, the Buyer also requires a Foreclosure Recommendation/Individual Delinquency Report (WAMU 3003) and monthly REO Exception Report (WAMU 3009) by the fifth business day of the month.

A. Penalties for Late Submission of Reports An Interim Servicer that fails to provide accurate accounting and servicing reports within the time frame required violates its responsibilities and is subject to the following remedies:

1. For the first late reporting offense in any consecutive 12-month period, a warning letter is sent to the managing officer of the institution, with a copy to the accounting department;

2. For the second late reporting offense in any consecutive 12-month period, the Interim Servicer is charged a $250 late reporting fee, per report;

3. For the third late reporting offense in any consecutive 12-month period, the Interim Servicer is charged a $500 late reporting fee, per report;

4. For the fourth late reporting offense in any consecutive 12-month period, the Interim Servicer will be terminated for cause.

Inaccurate or incomplete reports will be considered the same as late reporting for the purpose of assessing penalties.

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The Buyer reserves the right to change the late reporting fee and all other remedies at any time, at its sole discretion.

306.02 Reporting Liquidations A Liquidation Schedule (WAMU 4009) must be submitted whenever the principal balance of a loan is reduced to zero. One form is submitted for each loan liquidated. The original form must be received by the Buyer within 48 hours of payoff and be immediately followed by: 1. Statement of Loan Paid-in-Full/Request for Release

of Mortgage Documents (WAMU 4019) 2. Legal document conveying, releasing or satisfying

lien

If circumstances prevent the Interim Servicer from providing the conveyance document within five (5) business days, the “liquidation package” should not be held up. At the time the release document is submitted, the Interim Servicer must have a cover letter attached advising the date the “liquidation package” was sent and provide the Buyer loan number.

Each time a loan is paid in full, or otherwise liquidated, the funds must be deposited to the P&I Custodial Account within 24 hours after they are received. The Interim Servicer must remit liquidation funds within 48 hours of receipt to the Buyer’s account. The remittance amount must agree to the Liquidation Schedule (WAMU 4009).

Failure to remit funds to the Buyer within these time frames will result in a penalty assessed to the Interim Servicer at a daily rate equal to the greater of 1) the highest prime rate quoted in the Wall Street Journal regular column entitled “Money Rate” on the first business day of each month, plus two (2.0%) percent, or 2) the note rate of the liquidating loan. If the prime rate is not published, the rate to be charged will be determined by the Buyer. There is a minimum charge of $50.00 on all penalties assessed.

306.03 Monthly Reporting and Remittance Summary The Interim Servicer will be required to report and remit as stated in Section 305.03 except as follows. In the month in which servicing of the interim serviced loans is transferred to Washington Mutual Bank, FA, the Interim Servicer is required to report loan level activity to the Buyer for the prior month.

The Interim Servicer will be responsible for performing a test of expected principal and interest, and to settle cash

with Washington Mutual Bank, FA for curtailment, prepayment and delinquency activity that occurred in the month prior to the servicing transfer date. The new servicer (Washington Mutual Bank, FA) will be responsible for remitting the scheduled payment and the curtailment activity for the prior month to the Buyer.

In the month the loans are transferred, the Interim Servicer is only required to remit funds for paid off loans.

For example, if the servicing transfer date is 04/01/03, the procedures for the Interim Servicer for the final month of reporting month are as follows:

03/31/03 Transfer Month – Last month the Interim Servicer would be required to submit all monthly accounting reports by 4/7/03 (5th business day).

4/18/03 Draft / Remit Date – Interim Servicer: Remit funds due for loans that are paid off 3/1/03 – 3/31/03.

New Servicer (Washington Mutual Bank, FA ): Remit 4/01/03 scheduled payment and curtailment activity for 3/01/03 – 3/31/03.

The Buyer will debit the P&I Custodial Account via the ACH network on the 20th calendar day of each month or on the preceding business day if the 20th calendar day falls on a weekend or holiday. These withdrawals begin in the month following the month of purchase of a loan.

The Buyer will send a Notice of Automatic Withdrawal to the Interim Servicer within two business days prior to the withdrawal date. This notice will enable the Interim Servicer to determine if sufficient funds are available in a P&I Custodial Account and to make any necessary advances.

If the Interim Servicer does not receive a Notice of Automatic Withdrawal, the Interim Servicer must contact the Buyer to obtain the information. The Servicer is responsible for assuring that sufficient funds are available for withdrawal.

For each Interim Servicer, the Notice of Automatic Withdrawal and the actual debit will consist of:

• The total of (1) the aggregate scheduled interest portions (whether or not collected) of the monthly installments due on the first day of the month in which the withdrawal date occurs (this amount is equal to one month’s interest calculated at the net rate) and (2) the aggregate unscheduled interest collected on loans during the month before the month in which a withdrawal date occurs.

• Plus, the total of (1) the aggregate scheduled principal portions (whether or not collected) of the

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monthly installments due on the first day of the month in which the withdrawal date occurs, and (2) the aggregate unscheduled principal collected on loans the month before the month in which a withdrawal date occurs;

• Less the aggregate funds previously wire transferred to the Buyer on liquidations and interim remittances.

For those Interim Servicers whose servicing contract specifies their option to remit funds to the Buyer, the amount wired must agree to the remittance amount due on the Notice of Automatic Withdrawal. Refer to Section 303 Custodial Accounts.

The table below summarizes the monthly accounting activities, including the Interim Servicer’s reporting responsibilities, from the purchase date through the date of the first principal and interest withdrawal. The example dates show what would actually have occurred if the sale had been transacted on November 15, 2002.

Reporting Responsibility

Time Line

Example Date

The Buyer purchases loans and forwards the Purchase Advice to the Interim Servicer.

Friday 11/15/02

The Interim Servicer’s first cut-off date.

End of the month

11/30/02

The Buyer receives the Interim Servicer’s monthly accounting package.

5th business day

12/06/02

The Interim Servicer receives the Notice of Automatic Withdrawal from the Buyer.

Two business

days before withdrawal

12/18/02

The Interim Servicer reviews the P&I Custodial Account to ensure that sufficient funds, per the Notice of Automatic Withdrawal, are deposited.

One business day

before withdrawal

12/19/02

Reporting Responsibility

Time Line

Example Date

The Buyer withdraws the total amount due, per the Notice of Automatic Withdrawal, from the P&I Custodial Account via an ACH transaction.

20th calendar day or preceding business day

12/20/02

NOTE: Notice of any liquidation and liquidation funds must be received by Washington Mutual Mortgage Securities Corp. on the Liquidation Schedule (WAMU 4009) within 48 hours of receipt of funds.

A. Monthly Accounting Package If the monthly accounting package is not submitted accurately or on time, the Buyer may not be able to process the unscheduled activity to the loans before the close of the current cycle. This could result in a difference between the amount drafted per the Notice of Automatic Withdrawal and the remittance amount calculated by the Interim Servicer. If this should occur, the unscheduled activity will be applied to the loan in the following cycle. It is the Interim Servicer’s responsibility to ensure that the Buyer receives an accurate monthly accounting package by the required due date to avoid loan level discrepancies.

B. Adjustable Rate Mortgages If the ARM Adjustments Report (WAMU 4013) is not submitted accurately and on time, the Buyer will make certain assumptions regarding the current interest rate and monthly payment adjustment for all ARM loans due to adjust in the given month. The Notice of Automatic Withdrawal will reflect these assumptions. If the Buyer’s assumptions are incorrect, the withdrawal could result in an overdraft of the Interim Servicer’s P&I Custodial Account. It is the Interim Servicer’s responsibility to ensure that the Buyer receives the ARM Adjustments Report on a timely basis to avoid such incorrect withdrawals.

C. Balloon Resets For Balloon Reset Mortgages with reset options the borrower may reset to a modified fixed rate/ARM loan depending on the original balloon note. Most of the jumbo balloon loans reset into an ARM for an additional 30 years (40 years total). In most cases, 5, 7, and 10 year balloon loans have an option to reset into a fixed rate, fully amortizing payment for the remainder of the 30 years.

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It is the Interim Servicer’s responsibility to notify the borrower at least 60 calendar days in advance of the balloon maturity date. The Interim Servicer must also deliver to the borrower a description of the historical performance of the applicable index and the maximum interest rate, which may be due under the modification. The borrower must provide acceptable proof of occupancy. At the time of the balloon reset the note holder must remain in first lien status. Overall caps and floors are stated in the original balloon note. Once the Interim Servicer has received the borrower’s notice of intent to reset or not, the Buyer should be notified of the interest only payment for the maturity month if resetting or the intent to pay in full at the maturity date. In most cases the Balloon Reset should be completed prior to the maturity date of the Balloon. Upon completion of the Balloon Reset the Buyer should be provided a completed copy of the Balloon Modification documents. D. Recast Modification The Interim Servicer must get prior approval from the Buyer for a recast of the monthly principal and interest payment following the borrower’s payment of a substantial curtailment. Neither the interest rate nor the maturity date may be altered. At the time of approval the Interim Servicer should provide the Buyer with additional information such as: loan number, borrower’s name and address of property, amount of curtailment, new principal and interest payment and the effective date of payment. After the approval the Interim Servicer will prepare the Modification Agreement and mail to the borrower. The borrower will complete and sign the Modification Agreement and mail it back to the Interim Servicer. The Interim Servicer will then fax a copy of the completed Modification to the Buyer which must be received 30 days prior to the effective date of the new principal and interest payment. If not received within 30 days, the change will not become effective until the next cycle and the Interim Servicer will be responsible for the difference in remittance.

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Section 401. Representations, Warranties and Obligations of Servicer

Servicing Guide: Servicer Warranties 401-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

All of the representations, warranties and obligations contained in this Servicing Guide are made by the Servicer as to each mortgage serviced on behalf of the Buyer, unless expressly waived in writing by the Buyer. All of said representations, warranties and obligations made by the Servicer are made and given to the Buyer with knowledge that the Buyer relies upon such representation, warranties and obligations as continuing consideration for allowing the Servicer to retain the servicing rights to each mortgage serviced for the Buyer. The Servicer makes such representations and warranties and agrees to such obligations with specific knowledge that the Buyer intends to sell each mortgage to third parties in reliance upon the Servicer’s representations, warranties and obligations. All representations, warranties, and obligations of the Servicer shall survive any investigation made by or on behalf of the Buyer, its assignee or designee, liquidation of the mortgage, purchase of the loan by the Buyer, its designee or assignee, repurchase of the mortgage or property, termination of the Selling and Servicing Contract, or other similar event or transfer or sale of servicing, and all such representations, warranties, and obligations shall inure to the benefit of the Buyer, its successors and assigns. Unless otherwise specified, the representations and warranties contained in this Servicing Guide are made with respect to each mortgage as of the date of delivery to the Buyer of any oral or written report or remittance related thereto.

401.01 General

A. Qualification and Authorization The Servicer is duly qualified, licensed, registered, and otherwise authorized under all applicable federal, state and local laws and regulations to service and enforce loans on behalf of the Buyer in the jurisdiction where the properties securing such loans are located and shall maintain such qualifications, licenses, registrations and authorizations during the term of the Selling and Servicing Contract. The Servicer is duly authorized to execute, deliver and perform its obligations under the Selling and Servicing Contract, and such Selling and Servicing Contract (including the material incorporated by reference therein) is a valid and binding obligation of the Servicer enforceable in accordance with its terms.

B. Washington Mutual Mortgage Securities Corp. Forms The Servicer has completed and transmitted all required reports to the Buyer in the time frame stated in this Servicing Guide, in accordance with the instructions provided by the Buyer.

C. Use of Buyer’s Name The Servicer warrants that it will confine its use of the Washington Mutual Mortgage Securities Corp. name and logo to those uses specifically authorized by the Buyer in the Seller’s Guide and Servicing Guide.

D. Inspection of Records The Servicer shall allow the Buyer, or its agent or designee, during normal business hours, to inspect all books and records of the Servicer pertaining to its mortgage operations and to any loans serviced on behalf of the Buyer.

E. Compliance with Selling and Servicing Contract and Servicing Guide Servicer has complied and will comply with all the terms, conditions and requirements of the Selling and Servicing Contract including this Servicing Guide as such shall be amended during the time loans are serviced on behalf of the Buyer.

F. Normal Servicing Procedures Applied The Servicer’s servicing of loans on behalf of the Buyer is in accordance with the standards applied to the Servicer’s overall loan servicing portfolio, without discrimination in any manner against loans serviced on behalf of the Buyer and in any event shall be consistent with the servicing practices of loan servicers in good standing in the industry.

G. No Disqualification or Suspension The Servicer represents and warrants that its selling or servicing rights or privileges have not been suspended or terminated by any other institution or government agency (including, but not limited to FHA, FNMA, FHLMC, or GNMA) and shall promptly notify the Buyer in writing by certified mail of such suspension or termination.

H. Integrity of Custodial Accounts The custodial accounts established hereunder are demand accounts which have not been pledged or encumbered in any manner.

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401-2 Servicing Guide: Servicer Warranties (Rev. 8/03) (Last Reviewed 05/16/08)

I. Eligible Servicer The Servicer is an institution, whose accounts are insured by the Federal Deposit Insurance Corporation (FDIC), or is an FHA-Approved Mortgagee, and continues to meet the eligibility standards as stated in Section 101 of this Servicing Guide.

J. Accuracy of Information Each report and remittance submitted by the Servicer to the Buyer is complete, truthful and accurate in all respects.

K. Compliance by Others When an action is performed by a third party for the Servicer, which the Servicer is required to perform under this Servicing Guide, the Servicer warrants that such third party has complied with all requirements of this Servicing Guide.

L. Warranties All representations and warranties made at the time of the sale of the mortgage to the Buyer remain true, correct and complete. The Servicer is in compliance with, and has taken all necessary action to ensure that it and each mortgage is in compliance with this Servicing Guide.

M. Compliance with Laws The Servicer has observed and complied, and will observe and comply, with all applicable local, state and federal laws, regulations and orders in servicing each mortgage and has serviced, and will service each mortgage in strict conformity with the terms and conditions of the Note, the Security Instrument and each of the documents relating to the mortgage. Without limiting the generality of the forgoing, the Servicer warrants that all escrow practices and ARM adjustments have been made and administered, and will be made and administered, in full compliance with the note, security instrument and applicable law and regulation.

N. No Solicitation of Refinances The Servicer has not and will not conduct any direct advertising or direct promotional activities, either written or verbal, that have the effect of encouraging a borrower to refinance a loan serviced hereunder.

O. Conveyance of Servicing Rights to Delinquent Mortgage Loans The Buyer has the option to acquire from the Servicer, without the payment to Servicer of any compensation therefore, the servicing rights relating to any mortgage loan which is delinquent or otherwise in default for ninety (90) days or more. Upon the Servicer’s receipt of written notice of the Buyer’s election to exercise such option, the Servicer shall, within ten (10) business days, notify the applicable mortgagors of the transfer of the servicing rights in accordance with all applicable law. In addition, the Servicer shall deliver to the Buyer or its designee all documents in the Servicer’s possession which relate to the mortgage loan and take such other measures as reasonably requested by the Buyer or its designee in connection with the transfer of the servicing rights.

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Section 402. Assignments and Recordations of Mortgages

Servicing Guide: Servicer Warranties 402-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

Any assignment, recordation, or other action regarding loans serviced by the Servicer on behalf of the Buyer, requested by the Buyer or otherwise consistent with prudent servicing practice or local practice or necessary to protect the lien priority of the Buyer, its designee or assignee, shall be completed by the Servicer at the Servicer’s expense. The Servicer shall promptly notify the Buyer in the event the requirements for recording or filing mortgages or assignments in a particular state have materially changed.

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Section 403. Remedies for Breach of Representations and Warranties

Servicing Guide: Servicer Warranties 403-1 (Rev. 8/03)

(Last Reviewed 05/16/08)

403.01 Repurchase Obligations Upon discovery by the Servicer of a breach of any representation, warranty or obligation contained in the Selling and Servicing Contract or this Servicing Guide, the Servicer shall give prompt written notice to the Buyer. Upon the Buyer’s receipt of notice of the breach or independent discovery of any breach, the Buyer may, in its sole and absolute discretion, without regard to the Servicer’s actual or implied knowledge of the breach of such representation, warranty or obligation (except to the extent the representation, warranty or obligation is expressly conditioned upon Servicer’s knowledge), and in addition to and without limitation as to any other remedy accruing to the Buyer, require the Servicer to repurchase the affected loans. The Servicer shall, without adjustment on the basis of fees or charges payable by the Servicer, repurchase said loans upon the Servicer’s receipt of a repurchase demand from the Buyer. The repurchase price will represent the outstanding principal balance of the applicable mortgage, as determined by the Buyer, plus interest computed thereon at the net rate up to the first day of the month following the date of repurchase, and any related amounts such as all documentary stamp taxes, recording fees, transfer taxes and all other expenses payable in connection with the transfer of the mortgage loan at the time of repurchase, and any attorney’s fees, legal expenses, court costs, or other expenses that may have been incurred by the Buyer in connection with the loan or enforcement of the obligation to repurchase. These funds must be wired to the Buyer within 15 calendar days of the demand, and be accompanied by a Liquidation Schedule (WAMU 4009) and any documents necessary to convey title. If a third party purchases a loan or any interest in a loan from the Buyer which is serviced by the Servicer, the Buyer may, at its option, exercise any rights or remedies at law or in equity on behalf of such party to the extent that such party does not affirmatively do so. If the Buyer must repurchase a mortgage it has sold to a third party because the Servicer has failed to comply with the terms, repre-sentations and warranties of the Selling and Servicing Contract and this Servicing Guide, the Servicer must repurchase the mortgage from the Buyer at an amount equal to the price at which the Buyer was required to repurchase the mortgage, plus any attendant cost or expense incurred by the Buyer in the course of repurchasing such mortgage.

403.02 Indemnity and Hold Harmless Agreement The Servicer shall indemnify the Buyer and hold the Buyer and its successors and assigns harmless against all losses, damages, penalties, fines, forfeitures, court costs and reasonable attorneys’ fees, judgments, and any other costs, fees and expenses resulting from any claim, demand, defense or assertion based or grounded upon, or resulting from a breach of any representation, warranty or obligation contained in or made pursuant to the Selling and Servicing Contract, including this Servicing Guide, or from any claim, demand, defense or assertion against or involving the Buyer based or grounded upon, or resulting from such breach or a breach of a representation, warranty or obligation made by the Buyer in reliance upon any representation, warranty or obligation contained in the Selling and Servicing Contract or this Servicing Guide. The Servicer also agrees to indemnify and hold harmless each of the Buyer, each Person, if any, who “controls” the Buyer within the meaning of the Securities Act of 1933, as amended, and their respective officers and directors against any and all losses, penalties, fines, forfeitures, legal fees and related costs, judgments and any other costs, fees and expenses that such Person may sustain arising out of third party claims based on (i) the failure of the Servicer to deliver or cause to be delivered when required the Annual Certification, the Regulatory Officer’s Certificate and the Accountants’ Statement required pursuant to Section 101.05 of this Servicing Guide, or (ii) any material misstatement or omission in any certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-14 promulgated by the Securities and Exchange Commission thereunder made in reliance on any material misstatement or omission contained in the Annual Certification (WAMU 1007) or the Regulatory Officer’s Certificate (Form 31476) required under this Servicing Guide.

The Servicer shall also indemnify the Buyer and hold it harmless against all court costs, reasonable attorneys’ fees and any other costs, fees and expenses incurred by the Buyer in enforcing the provisions of the Selling and Servicing Contract or this Servicing Guide. The obligations of the Servicer under this Section shall survive the delivery and purchase of the mortgage, foreclosure, liquidation or repurchase of the mortgage and suspension or termination of the Selling and Servicing Contract.

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Section 403. Remedies for Breach of Representations and Warranties

403-2 Servicing Guide: Servicer Warranties (Rev. 8/03) (Last Reviewed 05/16/08)

403.03 Right of Offset To protect the Buyer’s interests, the Buyer reserves the right to offset against the purchase price for any mortgage delivered for purchase by the Servicer (or any amount otherwise owned by the Buyer to the Servicer) to recover any outstanding past-due fees owed to the Buyer by the Servicer resulting from circumstances including, but not limited to: 1. Fees, penalties or expenses incurred from failure to

deliver any required final documentation for mortgages previously purchased;

2. Notice that a secured interest does not exist when, in fact, a secured interest does exist;

3. Penalties for failure to properly service loans on behalf of the Buyer; and

4. Situations where the Buyer has reason to believe the Servicer is unable to continue to operate under the terms and conditions set forth in the Selling and Servicing Contract and this Servicing Guide, and specifically the representations and warranties contained in Section 401. Events evidencing such situations would include, without limitation:

• Substantial cancellation of warehouse lines without a viable replacement warehouse facility,

• Regulatory authority suspension or cancellation, • Pending voluntary or involuntary bankruptcy, or • Excessive fallout.

403.04 Remedies Cumulative All rights and remedies provided to the Buyer in this Servicing Guide are in addition to any other right or remedy available to the Buyer under the Selling and Servicing Contract or afforded by law or equity, and may be exercised concurrently with, independently of, or in succession to, and such rights and remedies shall inure to the benefit of the Buyer, its successors and assigns. The failure of the Buyer to exercise any of its remedies does not constitute a waiver of use of that remedy in the future in connection with the same or any other breach or default by the Servicer.

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Section 403. Remedies for Breach of Representations and Warranties

Servicing Guide: Servicer Warranties 403-3 (Rev. 8/03)

(Last Reviewed 05/16/08)

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Appendix A. Glossary of Terms

Servicing Guide: Appendices V. A-1 (Rev. 8/03)

accountants statement: A statement by a firm of independent public accountants that is a member of the American Institute of Certified Public Accountants to the effect that such firm has examined certain documents and records relating to the mortgage servicing operations of the Servicer substantially in compliance with the Uniform Single Attestation Program for Mortgage Bankers and that, on the basis of such examination, nothing has some to such firm’s attention that would indicate that such servicing has not been conducted in compliance therewith, except for (i) such exceptions as such firm shall believe to be immaterial and (ii) such other exceptions as shall be set forth in such statement.

accrued interest – The interest earned for the period of time that has elapsed since interest was last paid. adjustable rate mortgage (ARM) – A mortgage in which the interest rate is periodically adjusted based on the movement of a pre-selected index. amortization – Payment of a debt by equal periodic installments to retire principal at the end of a fixed period and to pay accrued interest on the outstanding balance. appraisal – A report which sets forth an estimate or opinion of value. assumption – Agreement by a buyer to assume the liability for payment of an existing mortgage or deed of trust. The original borrower remains liable unless specifically released by the Servicer. automated clearing house (ACH) – The network through which Washington Mutual Mortgage Securities Corp. electronically debits the principal and interest custodial account for the total amount due each month as stated on the Notice of Automatic Withdrawal. buydown – Money advanced by a seller or builder to reduce the borrower’s monthly payments on a mortgage either during the entire term of the mortgage or for the first few years. buydown account – An account in which funds are held for application as part of the monthly mortgage payment when each payment comes due during the term of the buydown. Buyer loan number – The identification number assigned by Washington Mutual Mortgage Securities Corp. to each loan purchased. calendar month-end – The accounting period cutoff for reporting to Washington Mutual Mortgage Securities Corp. The date of the cutoff will always be the last business day of the month.

certified copy – A copy of a document with a signed endorsement stating that the copy is a true and correct copy of the original document. closing costs – Money paid by the buyers and sellers to effect the closing of a mortgage. This normally includes an origination fee, discount points, title insurance, survey, attorney’s fee, and such prepaid items as taxes and insurance escrow payments. condominium – A unit of real property to which title is given, usually to the interior surfaces and a proportionate interest in certain common areas. Title to the common areas is in terms of percentages and refers to the entire condominium project less the separately owned units. curtailment – An additional amount of money paid by the borrower which is applied to the outstanding principal balance, but which does not reduce the outstanding principal balance to zero. custodial account – A bank account established by the Servicer for deposit of borrower’s funds. This account may be for principal and interest, taxes and insurance or buydown funds. debt – Borrowed money, the repayment of which may be either secured or unsecured with various possible repayment schedules. debt-to-income ratios – Ratios used to qualify a borrower by comparing the borrower’s total monthly housing expense and total monthly debt to gross income. delinquency – The failure to make timely payments under a loan agreement. delinquency advances – Funds advanced by the Servicer to cover any deficit in the principal and interest custodial account on the withdrawal date due to delinquent installments. due-on-sale clause – The clause found in the security instrument that requires the payment of the entire loan balance upon sale or transfer of ownership of the secured property. equity – The difference between fair market value and the owner’s indebtedness on the mortgage. escrow account – A trust account which is established to hold funds allocated for the payment of real estate taxes, hazard or mortgage insurance premiums as they are received each month and until such time as they are disbursed to pay related bills. escrow holdback – Funds held in escrow for the completion of postponed improvements or repairs.

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Appendix A. Glossary of Terms

V. A-2 Servicing Guide: Appendices (Rev. 8/03)

FDIC – A term used to refer to the Federal Deposit Insurance Corporation which is a federally-sponsored corporation who insures deposits in national banks and other subscribing financial institutions. FHA mortgage – A mortgage that is insured by the Federal Housing Administration (FHA); may be referred to as a ‘government’ mortgage. FHLMC (Freddie Mac) – A term commonly used to refer to the Federal Home Loan Mortgage Corporation, which is a congressionally-chartered corporation that purchases conventional mortgages in the secondary mortgage market. first mortgage – A mortgage which is the primary lien against a property. fiscal year – Any 12-month period which is used for financial reporting and preparation of balance sheets, profit and loss statements and other financial summaries. fixed rate mortgage – A mortgage for which the interest rate is set for the entire term of the loan. If the interest rate changes due to enforcement of the due-on-sale provision, the mortgage is considered a fixed-rate mortgage. FNMA (Fannie Mae) – A term commonly used when referring to the Federal National Mortgage Association. gift letter – A signed statement describing the amount of any cash gift used by the borrower to qualify for a loan with reference that the gift need not be repaid. GNMA (Ginnie Mae) – A term commonly used to refer to the Government National Mortgage Association, (part of HUD), which administers the mortgage-backed securities program; channels new sources of funds into residential financing through the sale of privately issued securities which carry a GNMA guaranty. gross margin – The sum of the net margin and the Seller’s servicing fee. hazard insurance – An insurance contract, whereby an insurer undertakes to compensate the insured for loss on property because of physical damage by fire, wind or other natural disasters. homeowners’ association – A nonprofit association or corporation comprised of homeowners within a particular development whose purpose is to maintain the common areas of a PUD or condominium project. In a condominium project, the group does not have ownership of the common area, while in a PUD project, the group does hold title to the common areas. HUD – The U.S. Department of Housing and Urban Development; responsible for the implementation and

administration of government housing and urban development programs. land-to-value – The ratio of the value of the land to the lower of the purchase price or current appraised value expressed as a percentage. lease – A written agreement between the property owner and a tenant that contains the conditions under which the tenant may possess and use the real estate for a specified period of time. lifetime interest rate cap – The maximum interest rate that may ever be charged over the life of a mortgage on an ARM. liquidation – The application of a payment to a mortgage loan which reduces the outstanding principal balance to zero. loan closing date – The date on which loan proceeds are disbursed to the borrower. loan-to-value (LTV) – The ratio of the outstanding principal balance of the mortgage to the lower of the appraised value or purchase price of the mortgaged property expressed as a percentage. maximum net rate – The net rate is the mortgage interest rate (note rate) less the lender’s servicing fee. The maximum net rate and corresponding price establish the required net yield to Washington Mutual Mortgage Securities Corp. for fixed rate mortgages. Fixed rate mortgages with net rates that are less than the minimum net rate will be priced to produce the required net yield. month of purchase – The month in which Washington Mutual Mortgage Securities Corp. funds a loan. monthly withdrawal – The total of the principal and interest amounts to be debited by Washington Mutual Mortgage Securities Corp. on the withdrawal date via an ACH transaction. This amount will be stated on the Notice of Automatic Withdrawal. mortgage loan – A loan secured by real property and evidenced by formal documents, including the security instrument, note, title evidence and all other necessary documents and papers, which are executed by the borrower when pledging the property as security for the payment of a debt. mortgage interest rate – The note rate or rate of interest paid by the borrower. negative amortization – The mortgage payment schedule in which the outstanding principal balance increases instead of decreasing since the payment does not cover the full amount of interest due in that payment period. The unpaid interest is added to the outstanding principal balance.

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Appendix A. Glossary of Terms

Servicing Guide: Appendices V. A-3 (Rev. 8/03)

net margin – The net margin is quoted on ARMs and is the gross margin minus the Seller’s servicing fee. It is used to calculate the new interest rate at the time of an interest rate adjustment by adding it to the current index and the Seller’s servicing fee. net rate – The mortgage interest rate (note rate) less the Seller’s servicing fee. This is the rate passed through to Washington Mutual Mortgage Securities Corp. net worth – The value of all of a company’s or individual’s assets minus its total liabilities used as a means to indicate creditworthiness or financial strength. net yield – The required yield to Washington Mutual Mortgage Securities Corp. note – The applicable form of instrument that evidences the mortgage loan, including any addenda. P&I Custodial Account – One or more custodial accounts into which is deposited the principal and interest portions of mortgage loan payments. planned unit development (PUD) – A development in which each unit owner has title to a residential lot and building and a non-exclusive easement on the common areas of the project. The owner may have an exclusive easement over some parts of the common areas, for example, a parking space. prepaid installment – A payment received prior to the scheduled due date but which is not applied until such due date. price – The percentage of par Washington Mutual Mortgage Securities Corp. will pay for a loan approved for purchase. Par is 100% of the unpaid principal balance of the loan. projected principal balance – The unpaid principal balance remaining after the application of the payment due on the first day of the month in which Washington Mutual Mortgage Securities Corp. purchases a mortgage. purchase date – The date Washington Mutual Mortgage Securities Corp. funds a loan. real estate owned (REO) – Real property acquired by the Servicer on behalf of Washington Mutual Mortgage Securities Corp. as a result of foreclosure or other transfer. refinance – The repayment of a debt from the proceeds of a new loan using the same property as a security. release of liability – An agreement to terminate the personal obligation of a borrower in connection with the payment of a mortgage debt.

second mortgage – A mortgage that has a lien position subordinate to the first mortgage. security instrument – A mortgage, deed-of-trust or other document evidencing a security interest in the real property securing a mortgage loan. seller – The term used in the Seller Guide when referring to a Washington Mutual Mortgage Securities Corp. approved Seller’s obligation in originating and selling loans to Washington Mutual Mortgage Securities Corp. Seller/Servicer ID number – The number assigned to a Seller/Servicer upon approval by Washington Mutual Mortgage Securities Corp. Servicer – The term used in the Servicing Guide when referring to a Washington Mutual Mortgage Securities Corp. approved Servicer’s obligation in servicing loans on the behalf of Washington Mutual Mortgage Securities Corp. servicing fee – The fee received by the Servicer in compensation for servicing mortgages purchased by Washington Mutual Mortgage Securities Corp., expressed as a percentage. This fee is calculated by subtracting the net rate from the mortgage interest rate (note rate) of the loan. servicing advances – Funds advanced by the Servicer to cover servicing costs and expenses as they occur. survey – A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any improvements. T&I Custodial Account – One or more custodial accounts into which is deposited the portion of mortgage loan payments intended to pay for taxes and insurance. VA mortgage – A mortgage that is guaranteed by the VA (Veterans Administration). This type of loan may be referred to as a “government loan”. withdrawal date – The date on which Washington Mutual Mortgage Securities Corp. debits the P&I Custodial Account via an ACH transaction for the total amount of principal and interest due that month, including any unscheduled collections of principal and interest for the previous month. This date will usually be the 20th of the month. If the 20th falls on a weekend or holiday, however, the withdrawal will occur on the preceding business day. The initial withdrawal date for any commitment will occur in the month following the month in which Washington Mutual Mortgage Securities Corp. purchased all or part of any commitment.

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Appendix A. Glossary of Terms

V. A-4 Servicing Guide: Appendices (Rev. 8/03)

WMMSC – Washington Mutual Mortgage Securities Corp. WMMSC assigned servicer number – The identification number assigned by Washington Mutual Mortgage Securities Corp. to each pool of loans which it acquires. YTD Profit and Loss Statement – A Servicer’s most current interim financial statements.

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Appendix B. Office Locations and Telephone Numbers

Servicing Guide: Appendices VI. B-1 (Rev. 12/11/08)

Washington Mutual Mortgage Securities Corp.:

Master Servicing Department: Servicer Accounting (843) 673-4083

Default (843) 673-4162

Document Custody (843) 673-3897

Cash Management (843) 673-3131

Monthly accounting and servicing reports, correspondence, and general inquiries should be directed to the following address:

Washington Mutual Mortgage Securities Corp. 2210 Enterprise Drive Florence, SC 29501 Master Servicing Department Mail Stop: FSC 0247

Servicing Administration: The Annual Certification, the Regulatory Officer’s Certificate, and the Accountants’ Statement shall be directed to Servicing Administration at the following address:

Washington Mutual Mortgage Securities Corp. 2210 Enterprise Drive Florence, SC 29501 Attn: Servicing Administration Mail Stop: FSC 0247

Commitment Registration Desk: (800) 767-2990, Option 1

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Appendix C. Holiday Schedule

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. C-1 (Rev. 12/9/08)

The following is the Washington Mutual Mortgage Securities Corp. 2009 holiday schedule:

Holiday Date Day of the Week

New Year's Day January 1 Thursday

Martin Luther King Day January 19 Monday

President's Day February 16 Monday

Memorial Day May 25 Monday

Independence Day July 4 Saturday

Labor Day September 7 Monday

Columbus Day October 12 Monday

Veteran's Day November 11 Wednesday

Thanksgiving Day November 26 Thursday

Christmas Day December 25 Friday

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Appendix C. Holiday Schedule

VII. C-2 Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices (Rev. 12/9/08)

NOTES

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Appendix D. Wiring Instructions

Appendix D – Wiring Instructions Rev. 08/07

Master Servicing – 2210 Enterprise Drive Florence, SC 29501 ABA Number: 021000021 Account Number: 304-652601 JPMorgan Chase Bank – New York, NY Credit: Washington Mutual Mortgage Securities Corp. The following information must be included in the “Remark” section of your wire, exactly as documented below and without abbreviation: PAYOFF (If Payoff Funds – WMMSC loan number) INTERIM REMITTANCE (If Not Payoff Funds – Co Name INV – your investor #)

PC Fed Wire Instructions:

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Appendix E. ARM Adjustment Dates

Appendix E (Rev 9/22/09)

Electronic Monthly Reporting Fields Required by Washington Mutual Mortgage Securities Corp.: Electronic File Requirements:

1. Must be an Excel file that can be uploaded into WMMSC system. (Word document file will not be accepted) 2. The file must contain all the required fields as indicated in the example. 3. Do not include additional information that is not required. 4. Information must be in the same column and formatted as indicated in the example. 5. Row 1 should be the header row of titles. 6. Information must be reported 1 row per loan. 7. Electronic file must be received by the 5th business day of the month.

Example: January 2003 Cycle

Required for ARM loans only A B C D E F G H I J K L M N O P Q R S T

WMMSC

Ln # Lender Ln

# Actual PTD P&I Sch Int Sch Prn Curt

Pre-Paid Curt Payoff Prn

Payoff Date

End Sch Bal

End Act Prn Bal

Note Rate

Service Fee

Pymt Chg Date

New Int Rate

New P&I

P/O Interest

S/F Amount Remit

Example 6E-08 123456 2/1/03 2889.5 2298.04 591.46 1166.14 166.14 0 406609.6 406609.6 6.750 0.450 3/1/03 7.250 3017.5 153.2 4068.58 PIF

Example 6E-08 678910 12/1/02 3524.62 2320.45 1204.17 400 0.00 410920.45 01/17/03 0.00 0.00 6.750 0.450 1215.87 154.7 413585.8 Total 6414.12 4618.49 1795.63 1566.14 166.14 410920.45 4066089.6 406609.6 3017.5 307.9 417654.4

Explanation of Column Headers A) WMMSC Ln# = Washington Mutual Mortgage Securities Corp loan number B) Lender Ln#= Servicers Loan number C) Actual PTD = Actual paid to date (Month and day of last payment received). The date should be formatted as MM/DD/YY D) P&I = Current principal and interest payment E) Sch Interest = Scheduled interest at gross rate F) Sch Prin = Scheduled principal G) Curt =Any additional principal received during the month H) Pre-Paid Curtailment = Prepaid curtailment received in current month I) Payoff Pm = Actual principal balance paid off J) Payoff Date = Date loan paid off. (The date should be formatted as MM/DD/YY) K) End Sch Bal = Ending scheduled balance L) End Act Prn Bal=Actual ending principal balance M) Note Rate = Current interest rate N) Service Fee = Current service fee rate O) Pymt Chg Date = Payment change date for ARM loans P) New Int Rate = New interest rate for ARM loans Q) New P&I = New principal & interest payment for ARM loans R) P/O Interest = Payoff interest calculated at the gross rate S) S/F Amount = Service Fee Amount T) Remit = Net remittance amount due

NOTE: Columns O,P & R are required only for Adjustable Rate Loans (ARMS)

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-1 (Rev. 05/04/07)

Table of Contents

Section

Name

Page

1. General Seller Requirements During the Interim Servicing Period 32. Data Files 33. Goodbye Letters 34. Copies of Mortgage Loan Histories 45. Loan Balance Report 56 Escrow Funds at Final Transfer 67. Loan Reconciliation Reports 68. Mortgage Loan Payments Received On or After the Servicing

Transfer Date 7

9. Non-Sufficient Funds (NSF) Items 810. Misapplied Payments 911. Mortgage Loan Payoff Funds 912. Monthly Reporting to Washington Mutual Mortgage Securities Corp. 1113. Loss Draft Claim Files 1214. Loss Draft Checks 1215. Assumptions 1316. Servicing Files 1317. Flood Data Tapes 1418. Flood Certification Fees 1519. Hazard Data 1620. Hazard – Condominium Loans 1621. Hazard and Flood Lender Placed Insurance Coverage 1622. Hazard – Insurance Premiums Due Prior to the Servicing Transfer

Date 17

23. Hazard – Premium Notices and Refund Checks 1724. Private Mortgage Insurance (PMI) 1825. Optional Insurance 1826. Property Tax Payment and Policy Requirements 1927. Tax Contracts – Loans Transferring with Existing Contracts 2028. Tax Contracts – Loans Transferring without Existing Contracts 2029. Interest on Escrow 2130. Adjustable Rate Mortgage (ARM) Loans 2131. Automatic Clearing House (ACH) 2132. New York Consolidation, Extension and Modification Agreements 2233. Non-Qualifying/Simple Assumption/Title Transfer/Escrow 2234. Third Party Bi-Weekly Payment Programs 2335. Mortgage Electronic Registry System (MERS) Requirements 2436. Year End Tax and Interest Reporting Requirements 25

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-2 (Rev. 05/04/07)

Schedules Letter

Name

Page

A. Servicing Reports 26B. Data File 33C. Form of Transfer of Servicing Notice 34D. Reporting: Payoff, Actual/Actual, and Scheduled/Scheduled 37E. Documents Required for Servicing File 38F. Condominium Notice Letter 39G. Fee Table of Tax Vendors and Systems Support Providers by State 40H. ARM Loan History Template 42

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-3 (Rev. 05/04/07)

Servicing Transfer Instructions These Servicing Transfer Instructions (STI) are a part of the Memorandum of Sale and are incorporated into the Mortgage Loan Purchase Agreement (MLPA) to facilitate the transfer of servicing of Mortgage Loans purchased pursuant to the terms of the MLPA. Unless otherwise specified herein, capitalized terms used herein shall have the meanings specified in the MLPA.

1. General Seller Requirements During the Interim Servicing Period A. Processing Payments and Payoffs

1. The Seller must report and remit principal and interest and Payoff funds to Washington Mutual Mortgage Securities Corp (WMMSC) during the interim servicing period. (Reference Section XII. Monthly Reporting to WMMSC).

2. Data Files A. Automated Transfers

1. Sellers Using Fidelity MSP i. File Format

(1) The Standard ELI conversion file is required. ii. Timing of data file deliveries

(1) The first data file must delivered to WMB n o later than thirty (30) days prior to the applicable Servicing Transfer Date.

(2) The second data file, containing data as of one (1) Business Day prior to the Servicing Transfer Date, must be delivered to WMB no later than two (2) Business Days after the applicable Servicing Transfer Date.

2. Sellers Not Using Fidelity MSP i. File Format

(1) Seller must provide all of the data listed in Schedule B (Data File).

ii. Data must be provided in an electronic format, as a txt file, or Excel spreadsheet sent to WMB by e-mail or sent in on a CD.

(1) Instructions for a .txt (text) file: (a) Text file must be tab delimited, not fixed length.

(b) Must include a “data dictionary” (cross reference) of the values Seller is sending to WMB.

iii. Do not include any zero principal balance loans. 3. The data files must be complete and accurate and reflect the same

balances as in the Loan Balance Report. Reference Section V. hereto. B. Manual Transfers 1. Seller must provide data files and data dictionaries to WMB

2. Reference to Section V. Loan Balance Report and Section SVI. Servicing Files of this STI for instructions regarding the data to be delivered.

3. Goodbye Letters: A. Content of Goodbye Letters

1. Seller must prepare “goodbye letters” that are in full compliance with all applicable state and federal requirements, including without limitation,

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-4 (Rev. 05/04/07)

the requirements of the Real Estate Settlement Procedures Act, as amended (RESPA) and Reg. X, its implementing regulation.

2. Attached is WMB’s sample of a “goodbye letter.” Reference Schedule C (Form of Transfer of Servicing Notice) hereto. Sellers’ goodbye letters must be substantially similar to the form contained in Schedule C.

3. Goodbye letters must include WMB’s telephone number, business hours, and mailing addresses for payments and correspondence exactly as provided in Schedule C.

B. WMB Approval 1. No later than five (5) Business Days prior to the date on which Seller

must mail the “goodbye letters”, Seller must provide a sample “goodbye letter” to WMB by e-mail for its approval, to the attention of Seller’s designated WMB conversion coordinator.

C. Timing and Notification of Mailing 1. Seller must mail the final, WMB approved “goodbye letters” to the

borrowers in compliance with the RESPa requirements. 2. Seller must provide verification to WMB that the “goodbye letters” were

mailed in accordance with RESPa and Reg X. Verification should be received by the WMB conversion coordinator no later than ten (10) Business Days prior to the applicable Servicing Transfer Date.

4. Copies of Mortgage Loan Histories A. Required Histories

1. Seller must deliver to WMB all Mortgage Loan histories from origination through and including the applicable Servicing Transfer Date.

2. Payment History: Payment histories must include all payments received and disbursed, all applications of payment, and the Unpaid Principal Balance. This must include the application of all principal, interest and Escrow Funds payments and any disbursements, listing the date, amount and payee, from the Escrow Account on the Mortgage Loans.

3. Adjustable Rate Mortgage (ARM) Change History i. Payment histories for adjustable rate mortgage (ARM) loans

must include all of the information listed on Schedule H. (ARM Loan History Template) hereto.

B. Format 1. Histories must be provided to WMB in either hard copy format or in an

electronic .tif file. C. Timing of Receipt

1. All histories must be provided to WMB no later than two (2) business Days after the applicable Servicing Transfer Date.

2. Hard copies of each loan history must be sent to WMB as follows: Washington Mutual Bank Attn: Conversion Operations 7757 Bayberry Road Jacksonsville, FL 32256

3. Deliver electronic .tif files to WMB’s conversion coordinator as identified for each servicing transfer.

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-5 (Rev. 05/04/07)

5. Loan Balance Report A. Sellers Using Fidelity MSP 1. File Format i. The Fidelity 4TB report is required. 2. Effective Date of loan Balance Report data

i. The data in the Loan Balance Report must reflect the same balances as in the data files (See Section II. Data Files of these STI).

3. Timing of Loan Balance Report Deliveries i. The first Loan Balance Report containing Mortgage Loans

effective as of the Cut-off Date must be delivered to WMB no later than thirty (30) days prior to the applicable Servicing Transfer Date.

ii. The final Loan Balance Report must be delivered to WMB no later than two (2) Business Days after the applicable Servicing Transfer Date.

iii. The Loan Balance Report must be delivered to Seller’s WMB designated conversation coordinator.

B. Sellers Not Using Fidelity MSP 1. File Format i. The Loan Balance Report must be in an Excel electronic format.

ii. The Loan Balance Report must include the following data for each Mortgage Loan:

(1) WMB’s and Seller’s Mortgage Loan number; (2) Mortgagor’s full name(s); (3) Outstanding principal balance; (4) Separate balances for Escrow Funds, Escrow Advances,

Buydown Funds, any loss drafts, suspense balances, and any other funds relating to the Mortgage Loan;

(5) Monthly principal and interst; (6) Identification of monthly Escrow Account’s

components; (7) Total monthly Mortgage Loan payments; (8) Mortgage note interest rate(s) since origination; (9) Paid to date; (10) Next payment Due Date; and (11) Monthly Buydown amount, if any.

2. Effective Date of Loan Balance Report data: i. For an automated transfer, the data in these reports must reflect

the same balances as in the data files (See Section II. Data Files of these STI).

ii. For a manual transfer, the data in these reports must reflect balances as of the Business Day immediately preceding the applicable Servicing Transfer Date.

3. Timing of Loan Balance Report Deliveries i. The first Loan Balance Report containing current Mortgage Loan

data must be delivered to WMB no later than thirty (30) days prior to the applicable Servicing Transfer Date.

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-6 (Rev. 05/04/07)

ii. The final Loan Balance Report must be delivered to WMB no later than two (2) Business Days after the applicable Servicing Transfer Date.

iii. The Loan Balance Report must be delivered to Seller’s WMB designated conversion coordinator.

6. Escrow Funds at Final Transfer A. Remittance Requirements

1. Funds required to be delivered to WMB must be sent by wire transfer of immediately available funds.

2. The funds remittance must include, without limitation, the following, for each Mortgage Loan as applicable:

i. Escrow Account balance; ii. Buydown reserve; iii. Loss draft funds; and iv. Unapplied/suspense funds. 3. The funds must match the final balances as of the applicable Servicing

Transfer Date provided in the Loan Balance Report in Section V. hereto. B. Timing of Remittance

1. All funds must be remitted to WMB no later than three (3) Business Days after the applicable Servicing Transfer Date.

C. Wiring Instructions 1. For prime Mortgage Loans and Alt-A Mortgage Loans, Seller must wire

funds to WMB as follows: Washington Mutual Bank, Stockton CA ABA No.: 321180748 Account No.: 1791709406 Credit: Washington Mutual Bank Attn: WMB IRM Debra Miles 2. For non-prime Mortgage Loans, Seller must wire funds to WMB as

follows: Washington Mutual Bank, Stockton CA ABA No.: 321180748 Account No.: 3064727529 Credit: Washington Mutual Bank Attn: WMB IRM Debra Miles

7. Loan Reconciliation Reports A. File Format 1. Sellers Using Fidelity MSP

i. the P139, S50Y and T62D reports (collectively referred to as the “Loan Reconciliation Report) are required. Note: S50Y and T62D MSP reports are not required for actual/actual interim servicer portfolios.

2. Sellers Not Using Fidelity MSP i. Seller must provide report(s) of a reconciliation of cash/prepaid

items vs. delinquent payments and curtailment amounts for each Mortgage Loan (collectively referred to as the “Loan Reconciliation Reports). Note: Applicable for scheduled/scheduled portfolios.

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-7 (Rev. 05/04/07)

ii. The Loan Reconciliation Reports must be in an Excel electronic format.

iii. The Loan Reconciliation Reports must include the following data:

(1) Seller’s Mortgage Loan number (2) WMB’s Mortgage Loan number; (3) Due Date; (4) Actual Unpaid Principal Balance; (5) Delinquent payments; (6) Prepaid payments;

(7) Principal curtailment payments (collected in the final month prior to the applicable Servicing Transfer Date); and

(8) Ending scheduled balance last reports to WMMSC. Note: Note required for actual/actual interim serviced portfolios.

B. Timing of Loan Reconciliation Report Deliveries 1. The Loan Reconciliation Report must be delivered to WMB no later than

two (2) Business Days after the applicable Servicing Transfer Date. 2. The Loan Reconciliation Reports must be delivered by e-mail to

[email protected] 8. Mortgage Loan Payments Received on or After the Servicing Transfer Date A.. Endorsement Requirements

1. The WMB loan number must be indicated on all checks received by the Seller.

2. Seller must endorse all checks payable to WMB as follows: Pay to the order of: Washington Mutual Bank Without Recourse Company Name By: (Signature) Name and Title of Signer

B. Delivery Requirements – Transmittal 1. Each Mortgage Loan payment must be accompanied by a detailed

transmittal listing the following information: i. The WMB loan number; ii. Mortgagor’s Name; iii. Mortgage Loan property address; iv. Payment amount v. Date payment was received by Seller vi. Name of overnight courier and tracking number vii. Any special borrower application instructions; and viii. An identifier if payment funds were sent by wire. 2. Blanket Check or Wire

C. In addition to a detailed transmittal with the information above for all payments on a Mortgage Loan, the Seller also must include a grand total of all payments, balancing to the total amount of the wire or check.

1. Seller must send an encrypted, preferably PGP, electronic copy of the detailed transmittal to WMB at [email protected] each Business Day by 3:00 pm Eastern time.

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D. Timing of Delivery 1. Seller must send all Mortgage Loan payments by wire transfer or

overnight mail to WMB on the same day that such payments are received by the Seller.

E. Wire and Check Delivery Instructions 1. For payments to be sent by wire transfer:

i. Seller must wire funds for prime Mortgage Loan and Alt-A Mortgage Loans to WMB as follows:

Bank Name: Washington Mutual Bank ABA No.: 322271627 Account No.: 1791720064 Beneficiary: Washington Mutual Bank ii. Seller must wire funds for non-prime Mortgage Loans to WMB

as follows: Bank Name: Washington Mutual Bank ABA No.: 322271627 Account No.: 1791720973 Beneficiary: Washington Mutual Bank iii. Seller must include all information described in Section VIII. B.

1 above. 2. For payments sent by overnight courier or regular mail:

i. Seller must send all funds for the Mortgage Loans to WMB as follows:

Washington Mutual Bank Attn: Cash Operations – Payment Processing 7255 Baymeadows Way Jacksonsville, FL 32256

ii. Seller must include all information described in Section VIII. B.1 above.

9. Non-Sufficient Funds (NSF) Items A. Description of Seller Responsibilities

1. For any Mortgage Loan payment that the Seller cashed and such payment was returned for non-sufficient funds (NSF) on or after the applicable Servicing transfer Date, the Seller must deliver to WMB all original NSF items received for each Mortgage Loan, including a history of how the original payment was applied.

B. Seller Instructions for NSF Items 1. Delivery Address

i. Seller must send all original NSF items by overnight courier on the date received to WMB as follows:

Washington Mutual Bank Attn: Return Item Processing 7255 Baymeadows Way Jacksonville, FL 32256

2. Seller must send a copy of all NSF items that are mailed to WMB to the following facsimile number: 972-906-6436.

3. All NSF items must be delivered with a detailed transmittal that includes the following for each Mortgage Loan: i. WMB loan number; ii. Mortgagor’s Name;

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iii. Mortgage Loan property address; iv. Amount of returned item; v. Payee bank and check number; vi. Date the returned item was received by Seller; vii. Source of payment i.e. AutoPay, check, etc.; viii. Reason the item was returned; and ix. Name of overnight courier and tracking number.

4. All transmittals must be submitted by Seller by an encrypted, preferably PGP, electronic file to WMB by 3:00 p.m. Eastern time at [email protected].

C. WMB Requirements for Return of NSF Funds 1. WMB will return funds to the Seller within two (2) Business Days of

receipt of the returned items. 10. Misapplied Payments

A. The party receiving notice of a misapplied payment occurring prior to the applicable Servicing Transfer Date but discovered after the applicable Servicing Transfer Date must notify the other party within one (1) Business Day.

B. A detailed transmittal must be sent that must include the following information: WMB loan number(s) Date(s) of misapplication(s); Where funds were applied; Where funds need to be applied; Effective Date(s) of application’ Cashed check copies, if applicable; and Additional information as necessary and appropriate. C. Research items need to be resolved within five (5) Business Days of notification.

D. All transmittals must be submitted by Seller by an encrypted, preferably PGP, electronic file to WMB by 3:00 p.m. Eastern time at [email protected].

11. Mortgage Loan Payoff Funds Received on or After the Applicable Servicing Transfer Date

A. Payoff Funds Received by Seller on or After the Applicable Servicing Transfer Date

1. Endorsement Requirements i. The WMB loan number must be indicated on all payoff checks

received by the Seller. ii. Seller must endorse all checks as follows: Pay to the order of: Washington Mutual Bank Without Recourse Company Name By: (Signature) Name and Title of Signer

B. Delivery Requirements 1. Each Mortgage Loan Payoff must be accompanied by a copy of a current

Payoff statement. 2. Each Mortgage Loan Payoff must be accompanied by a detailed

transmittal containing the following items: i. Seller Loan Number;

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ii. WMB loan number; iii. Mortgagor’s Name; iv. Check amount; v. Check number; vi. Date payment was received by Seller; vii. Any special Borrower application instructions; viii. Date sent to WMB; and ix. Name of overnight courier and tracking number. 3. Blanket Check or Wire

i. If the Seller chooses to remit funds for more than one Payoff in the same check or wire, in addition to a detailed transmittal with the information above for all Payoffs on a Mortgage Loan, the Seller also must include a grand total balancing to the total amount of the wire or check.

4. Seller must send an encrypted, preferably PGP, electronic copy of the detailed transmittal to WMB at [email protected] each Business Day by 3:00 p.m. Easter time. Seller must specify in the e-mail if the item(s) in the transmittal were sent by wire transfer or overnight courier.

C. Timing of Delivery 1. Seller must deliver all Payoff funds to WMB by wire transfer or

overnight courier on the same day they are received by the Seller. 2. All Payoff checks and wires received by the Seller before 3:00 p.m.

Eastern time are considered same day activity. 3. Any Payoff checks and wire received by the Seller after 3:00 p.m.

Eastern time are considered next day activity and seller must include interest at the note rate to the next Business Day.

D. Wire and Check Delivery Instructions 1. For Payoffs to be sent by wire:

i. Seller must wire Payoff funds for prime Mortgage Loans and Alt-A Mortgage Loans to WMB as follows:

Bank Name: Washington Mutual Bank ABA No.: 322271627 Account No.: 0950151383 Beneficiary: Washington Mutual Bank

ii. Seller must wire Payoff funds for non-prime Mortgage Loans to WMB as follows:

Bank Name: Washington Mutual Bank ABA No.: 322271627 Account No.: 0950151375 Beneficiary: Washington Mutual Bank iii. Seller must include all information described in Section

XI.B.2.ii. above, for each Mortgage Loan. 2. For Payoff funds sent by overnight courier: i. Seller must send Payoff funds to WMB as follows: Washington Mutual Bank Attn: Cash Operations – Payoff Unit 7255 Baymeadows Way Jacksonsville, FL 32256

ii. Seller must include all information described in Section XI.B.2.ii.above.

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12. Monthly Reporting to Washington Mutual Mortgage Securities Corp. A. For interim service Sellers only, Seller must provide month end reports to

WMMSC beginning with the month of the purchase until the month of transfer. Example: Purchase Date (2/20) and Servicing Transfer Date (4/1), Seller must provide the 2/28 and 3/31 month end reports to WMMSC.

B. the seller must use the Payoff Schedule (Refer to Schedule D. Reporting: Payoff, Actual/Acutal and Scheduled/Scheduled in STI) and Payoff calculations as set forth in the WMMSC Seller/Servicer Guide located at www.wamumsc.com or in the MLPA.

C. Reporting and remittance of funds requirements 1. Note: Cut-off Date is equal to the last Business Day of the month.

2. Sellers using a scheduled/scheduled reporting method: i. Cut-off reports are due five (5) Business Days after the Cut-of

Date. ii. Principal and interest funds received by the Seller prior to the

applicable Servicing Transfer Date are due to WMMSC by the eighteenth (18th) calendar day (or the preceding Business Day if the 18th is not a Business Day).

iii. Payoff reporting is due twenty-four (24) hours after Payoff. If a Payoff occurs on a Friday afternoon, reporting is due the following Monday.

iv. Payoff remittance of any Payoff received by the Seller prior to the applicable Servicing Transfer Date is due to WMMSC within twenty-four (24) hours after Payoff. If a Payoff occurs on a Friday afternoon, funds are due the following Monday.

3. Sellers using an actual/actual reporting method: i. Cut-off reports are due five (5) Business Days after the Cut-off

Date. ii. Principal and interest funds received by the Seller prior to the

applicable Servicing Transfer Date are due to WMMSC within five (5) Business Days after the Cut-off Date.

iii. Payoff reporting is due twenty-four (24) hours after Payoff. If a Payoff occurs on a Friday afternoon, reporting is due the following Monday.

iv. Payoff remittance for any Payoff received by the Seller prior to the applicable Servicing Transfer Date is due to WMMSC within twenty-four (24) hours after Payoff. If a Payoff occurs on a Friday afternoon, funds are due the following Monday.

D. Delivery of reports 1. Reports are due five (5) Business Days after the Cut-off Date must be

sent by e-mail to [email protected] or by facsimile to 972-906-6592.

2. A completed Payoff Schedule together with a coy of the Mortgage Note and any Payoff addendums must be sent by e-mail to [email protected] or sent via facsimile to WMMSC at 972-906-6592 within one (1) Business Day of receipt of the Payoff funds.

E. Delivery of monthly remittance and Payoff funds 1. Seller must wire the monthly remittance and Payoff funds to WMMSC

as follows:

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Bank Name: JP Morgan Chase Bank ABA No.: 021000021 Account No.: 304-652601 Bank City/State: New York, NY Credit: Washington Mutual Mortgage Securities Corp 2210 Enterprise Drive Florence, SC 29501 2. Seller must include the following items in the remark section of the wire:

i. Indicate if the funds are for a monthly remittance or to Payoff a Mortgage Loan.

ii. Include the Seller’s name and investor number. 13. Loss Draft Claim Files A. Seller must deliver to WMB any loss draft files for claims currently in process. B. Seller must include the following items in each loss draft file: 1. The insurance estimate; 2. A signed copy of the contractor’s contract; 3. Copies of all previously disbursed drafts;

4. Incoming insurance drafts/checks (copies of the actual checks sent in for endorsements);

5. W-9 Form; 6. Repair plan; 7. Customer’s affidavit; 8. Adjuster’s estimate; 9. Customer’s waiver of lien or contractor’s lien waiver; 10. Letter of satisfaction; 11. Paid receipts; 12. Any applicable forms such as power of attorney, executor of estate, etc.;

and 13. Any paperwork pertaining to litigation

C. Delivery Address Washington Mutual Bank Attention: Loss Draft Department 2210 Enterprise Drive Post Office Box 100562 Florence, SC 29501 D. Timing of Delivery

1. Seller must deliver the insurance loss draft files to WMB no later than three (3) Business Days after the applicable Servicing Transfer Date.

14. Loss Draft Checks

A. Seller must endorse and deliver to WMB all loss draft checks received on or after the applicable Servicing Transfer Date.

B. Endorsement Requirements 1. The WMB loan number must be indicated on each check received by the

Seller. 2. Seller must endorse each check as follows: Pay to the order of: Washington Mutual Bank Without Recourse Company Name

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By: (Signature) Name and Title of signer C. Seller must end any such checks to the following address:

Washington Mutual Bank Attention: Loss Draft Department 2210 Enterprise Drive Post Office Box 100562

Florence, SC 29501 D. Timing of Delivery

1. Seller must send all loss draft checks received on or after the applicable Servicing Transfer Date to WMB by overnight courier on the same day that such payments were received by the Seller.

15. Assumptions

A. Seller must remit to WMB all assumption related fees collected from Mortgagors on assumptions that are in process on the applicable Servicing Transfer Date.

B. Seller must remit fees by check accompanied by a transmittal indicating WMB loan number, amount and current status. Funds must be delivered to WMB by the fifth (5th) Business Day following the applicable Servicing Transfer Date.

C. If Seller is sending Mortgagor(s) checks directly to WMB, all checks must be endorsed as follows:

Pay to the order of: Washington Mutual Bank Without Recourse Company Name By: (Signature) Name and Title of signer D. Delivery Address 1. Seller must send all checks to WMB at the following address: Washington Mutual Bank Attention: Assumptions Department Post Office Box 100512 2210 Enterprise Drive Mail Stop: FSC 0155 Florence, SC 29501 E. Timing of Checks Received After the Servicing Transfer Date 1. Seller must send all assumption checks received on or after the

applicable Servicing Transfer Date to WMB by overnight courier on the same day that such payments were received by the Seller.

F. Seller must deliver all assumption documentation in process on the applicable Servicing Transfer date to WMB. Seller must deliver this by overnight tracked carrier to WMB at the address in Section XV. D. above. Seller must deliver all such assumption documentation to WMB no later than two (2) Business Days after the applicable Servicing Transfer Date.

16. Servicing Files

A. Servicing Files must contain all items required by the MLPA or the WMMSC Seller/Servicer Guide, as applicable. In addition, the following items are needed in the Servicing Files: a copy of the tax information sheet (complete with account numbers, taxing authorities, addresses, Monthly Payments, and next Due

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Date indicating which taxing authorities were paid and the tax contract numbers if TRETS is the tax servicer provider) and closing escrow instructions.

B. Delivery Requirements 1. Seller must identify the files (document the number on the file) with the

applicable WMB loan number. 2. Seller must sort files in each box by the ascending WMB loan number. 3. Seller must include in each box, a WMB loan number list of the files in

that box. C. Delivery Address

1. Seller must deliver, by overnight tracked courier, all such files to the account of WMB to the following address:

Affiliated Computer Services, Inc. Attn: WMB Processing 6 Founders Boulevard Suite H El Paso, Texas 79906 Telephone No.: 915-775-8761

D. Timing of Delivery 1. Automated Transfers

i. Seller must deliver Servicing Files no later than four (4) Business Days after the applicable Servicing Transfer Date.

ii. Seller must NOT SHIP files for Mortgage Loans that have been paid in full between the Closing Date and the applicable Servicing Transfer Date.

2. Manual Transfers i. Seller must deliver Servicing Files no later than two (2) Business

Days after the closing date. ii. Seller must NOT SHIP files prior to the Closing Date. iii. WMB will return any Mortgage Loan files that have been paid in

full between the Closing Date and the applicable Servicing Transfer Date.

17. Flood Data Tapes A. The Seller:

1. must have a life of loan transferable flood certification contact with LandAmerica Tax and Flood Services, Inc (LandAmerica); and

2. shall notify WMB of any Mortgage Loan for which it has not procured the life of loan flood certification contract, or for which the flood certification is with another vendor or provider.

B. In order to ensure that the flood certificates are set up/transferred correctly, Seller must have its flood service provider provide to LandAmerica an initial and final flood certification information tape (flood tape).

C. Delivery Requirements 1. Initial Flood tape

i. Seller must have its flood service provider provide the information listed below on data file or tape to LandAmerica:

(1) Flood insurance required indicator, i.e. yes or no;

(2) Flood zone determination provider; (3) Flood certificate number; (4) Flood zone;

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(5) Determination date; (6) NFIP flood panel; (7) NFIP flood panel effective date; (8) NFIP community number; and (9) Map

ii. If Seller used LandAmeica a loan number cross reference and the flood certificate number must be provided.

2. Final Flood Tape i. Seller must have its flood service provider provide the

information listed below on data file or tape to LandAmerica (same as initial flood tape):

(1) Flood insurance required indicator, i.e. yes or no;

(2) Flood zone determination provider; (3) Flood certificate number; (4) Flood zone; (5) Determination date; (6) NFIP flood panel; (7) NFIP flood panel effective date; (8) NFIP community number; and (9) Map

ii. If Seller used LandAmeica a loan number cross reference and the flood certificate number must be provided.

iii. The final flood tape should only include the loans that transferred to WMB.

D. Delivery Address 1. Seller must have its flood service provider deliver all flood tapes to the

following LandAmerica address: LandAmerica

Attn: WMB Processing – Aleisha Martinez (Telephone No.: 626-339-5221 x 230)

Paul Candalaria (Telephone No.: 626-339-5221 x 246) 1123 S. Parkview Drive Covina, CA 91724

E. Timing of Delivery 1. Initial Flood tape

i. Seller must have its flood servicer provider deliver the initial flood tape to LandAmerica no later than thirty (30) days prior to the applicable Servicing Transfer Date.

2. Final Flood tape i. Seller must have its flood provider deliver the final flood tape to

LandAmerica no later than five (5) Business Days after the applicable Servicing Transfer Date.

18. Flood Certification Fees

A. WMB utilizes LandAmerica Tax and Flood Services, Inc (LandAmerica) for flood insurance services. If Seller does not use LandAmerica, Seller is responsible for costs incurred to set up new life of loan flood certification contract with LandAmerica or to transfer an existing life of loan flood certification contract from another flood service provider.

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B. Upon receipt of data tapes, LandAmerica will notify WMB which contracts are transferable and will bill WMB with in sixty (60) days after the applicable Servicing Transfer Date. WMB will then bill the Seller accordingly within sixty (60) days after receipt of the bill from LandAmerica.

C. Costs to be paid by Sellers are as follows: 1. $8.00 fee per loan for new life of loan certification contract.

LandAmerica charges this fee if Seller does not have a life of loan certification contract or if they have invalid certificate information (no transferable contract with a vendor).

2. $3.50 fee per loan for the conversion of an existing life of loan certification contract from a flood service provider other than LandAmerica. If a life of loan flood certification contract is not transferable, the life of loan flood certification contact must be cancelled by Seller once a reconciliation is completed by LandAmerica.

3. $0.00 – There is no additional charge for any Mortgage Loan that has a fully paid, fully transferable life of loan certification contact with LandAmerica.

19. Hazard Data

A. Seller must ensure that all hazard insurance information is on the Seller’s servicing system and is current. Such information shall include, without limitation, the following:

1. The policy type(s) 2. The expiration date of the insurance policy(ies) 3. The annual premium amount(s) 4. The name of the insurance company(s) 5. The policy number(s) 6. The coverage amount 7. Timing Requirements B. Current hazard information must be on Seller’s servicing system no later than

fifteen (15) days prior to the applicable Servicing Transfer Date. 20. Hazard – Condominium Loans

A. Seller must deliver to WMB by electronic format or the actual hard copy policy the following items relating to Condominium Loans: 1. The blanket policy of the condominium/homeowner’s associations and

individual certificates of insurance (if nay and if available); and 2. A copy of any notifications to condominium associates in Massachusetts

(Reference Schedule F. Condominium Notice Letter hereto). B. Seller must deliver the above items to WMB at the following address; Washington Mutual Bank P.O. Box 100590 (prime Mortgage Loans and Alt A Mortgage Loans) P.O. Box 10564 (non-prime Mortgage Loans) Florence, SC 29501 C. Timing of Delivery

1. Seller must deliver all items to WMB no later than three (3) Business Days after the applicable Servicing Transfer Date.

21. Hazard and Flood Lender Placed Insurance Coverage

A. Seller must provide a listing of all Mortgage Loans with lender placed insurance coverage for both hazard and flood to WMB at the following address;

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Washington Mutual Bank Mail Stop: FSC 0220 2210 Enterprise Drive Florence, SC 29501 B. Delivery Requirements 1. Seller must include the following fields: i. Policy number; ii. Mortgagor’s Name iii. Expiration Date; iv. Coverage amount; v. Premium amount; and vi. Lender place company name and address. C. Timing of Delivery

1. Seller must deliver the list of Mortgage Loans to WMB no later than three (3) Business Days after the applicable Servicing Transfer Date.

22. Hazard - Insurance Premiums Due Prior to the Servicing Transfer Date

A. Seller must pay to the insurance company/agent all hazard, flood, earthquake, wind, etc. insurance premiums that are due within thirty (30) days after the Servicing Transfer Date. Seller must receive the premium notice prior to paying the premiums to the insurance company/agent.

B. Timing of Payment: 1. Seller must pay the premiums to the insurance company/agent at least

one (1) Business Day prior to the applicable Servicing Transfer Date. 23. Hazard – Premium Notices and Refund Checks

A. Seller shall advise the hazard and flood insurance carriers of the mortgagee change to Washington Mutual Bank. The following is the correct loss payee clause for WMB:

Washington Mutual Bank Its Successors and/or Assigns P.O. Box 100590 (prime Mortgage Loans and Alt A Mortgage Loans) P.O. Box 100564 (non-prime Mortgage Loans) Florence, SC 29501 B. Seller shall advise the hazard and flood insurance carriers that all future notices

including premium, refund checks and cancellation notices must be sent to the following address:

Washington Mutual Bank 2210 Enterprise Drive P.O. Box 100590 (prime Mortgage Loans and Alt A Mortgage Loans) P.O. Box 100564 (non-prime Mortgage Loans) Florence, SC 29501 C. Timing of Notification

1. Seller must notify the insurance carriers fifteen (15) days prior to the applicable Servicing Transfer Date.

D. Seller must send to WMB, any premium notices, refund checks, and cancellations received by Seller. Deliver to WMB by overnight courier to the following address:

Washington Mutual Bank 1323 Celebration Blvd Florence, SC 29501

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24. Private Mortgage Insurance (PMI) A. Requirements to Ensure Correct Data Transfers

1. All PMI data points must be on the Seller’s servicing system, and they must be current and accurate. This information must include, without limitation:

i. The month and year of the next premium due date; ii. The amount of the last premium paid to the PMI company; iii. The name of the PMI company; iv. The PMI policy certification n umber;

v. The renewal frequency of the PMI policy (i.e. monthly, annual, or single);

vi. The percentage of PMI coverage; and vii. The PMI rate.

2. The Seller must validate this data on any Mortgage Loan with PMI no later than fifteen (15) Business Days prior to the applicable Servicing Transfer Date.

B. Notice to Mortgage Insurance Companies 1. Seller to Send Notification

i. The Seller must inform by written notice all mortgage insurance companies providing any Primary Mortgage Insurance Policy of the change in the insured’s name on each such policy.

ii. The notification must instruct the mortgage insurance company to change the insured’s name to Washington Mutual Bank on applicable Primary Mortgage Insurance Policies no later than the applicable Servicing Transfer Date.

C. Timing of Notice 1. The Seller must send the notice no later than fifteen (15) Business Days

prior to the applicable Servicing Transfer Date. D. Copy of Notice and Certification to WMB

1. Seller must provide WMB with a sample copy of the notification letter and an officer’s written certification that all such mortgage insurance companies have been notified by an identical letter within five (5) Business Days of the mailing of such notices to the foregoing entities.

E. Seller must deliver this sample letter and certification to WMB as follows: Washington Mutual Bank Attn: PMI Department MailStop: FSC 0220 PO Box 100575 Florence, SC 29501 25. Optional Insurance A. Requirement to Cancel Optional Insurance 1. Seller must cancel any optional insurance on all Mortgage Loans.

2. Seller must deliver a notice to the Mortgagor stating that the optional insurance on the Mortgagor’s Mortgage Loan has been cancelled no later than fifteen (15) calendar days prior to the applicable Servicing Transfer Date.

3. Seller must provide WMB with a sample copy of the notification letter and an officer’s written certification that all optional insurance products have been cancelled and all applicable Mortgagors have been notified of the cancellation no later than the applicable Servicing Transfer Date.

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B. Seller must deliver this sample letter and certification to WMB as follows: Washington Mutual Bank

Attn: Optional Insurance PO Box 100574 2210 Enterprise Drive Florence, SC 29501 26. Property Tax Payment and Policy Requirements A. Requirements to Ensure Correct Data Transfers

1. All property tax data points must be on the Seller’s servicing system, and they must be current and accurate. This information includes, without limitation, the following: i. All tax payees to whom taxes are paid are set up on the loan

level; ii. All tax due dates are set forth to the next time taxes should be

paid; iii. All parcel indicators are set to identify multiple parcels;

iv. All tax amounts reflect the last amount paid, when paid and to whom;

v. All tax payment indicators, i.e. escrow/non-escrow, are set appropriately;

vi. All tax contract numbers are loaded and transferable; vii. All tax exempt property codes are set; and viii. All tax types (i.e. county, city, school, etc) are included.

2. The Seller must validate this data on all Mortgage Loans no later than fifteen (15) Business Days prior to the date of the applicable Servicing Transfer Date.

B. Property Taxes to be Paid Prior to Applicable Servicing Transfer Date 1. All property taxes, interest, late charges, and related penalties on

Mortgage Loans must be current as of the applicable Servicing Transfer Date.

2. Seller must ensure that all tax bills (including interest, late charges and penalties in connection therewith) due within thirty (30) days after the applicable Servicing Transfer Date are paid prior to the applicable Servicing Transfer Date.

C. Special Requirement for Mortgage Loans in Wisconsin 1. For each Mortgage Loan located in the State of Wisconsin that has an

Escrow Account, Seller must provide a tax escrow option notice in accordance with Wis. Stat. Ann. Section 138.052(5M)(b) to the Mortgagor no later than fifteen (15) days prior to the applicable Servicing Transfer Date.

2. Seller must provide WMB with a sample copy of the notification letter and an officer’s written certification that all tax escrow option notices were sent to all eligible Mortgagors no later than the applicable Servicing Transfer Date.

3. Seller must provide a copy of the tax escrow option notice provided in accordance with Wis. Stat. Ann Section 138.052(5m)(b) for each Mortgage Loan located in the State of Wisconsin that has an Escrow Account, to WMB as follows:

Washington Mutual Bank Attn: Tax Department

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2210 Enterprise Dr. P.O. Box 100563 Florence, SC 29501-0563

27. Tax Contracts – Loans Transferring with Existing Contracts

A. Refer to Schedule G. Fee Table of Tax Vendors and Systems Support Providers by State. Note: Only the vendors/service providers listed in Schedule G are used for the states listed.

B. LandAmerica Tax and Flood Services, Inc (LandAmerica) and First American Real Estate Solutions of Texas, L.P. (First American): 1. Loans serviced by LandAmerica and First American must be transferred

with life of loan transferable contacts. 2. Seller must notify the applicable tax service to determine the status of the

tax contracts. The Seller must work with its tax service vendor(s) to ensure that all Mortgage Loans have a valid, fully paid, fully transferable tax service contract prior to the Servicing Transfer Date.

C. ZC Real Estate Tax Solutions Limited (ZCRETS) 1. ZCRETS is a systems support provider. It provides system support in

applicable states. D. Note: If the Seller uses the same tax service as WMB (same vendors not

necessarily the same states by vendor) then the Seller will need to send a complete cross reference with a property state breakdown to LandAmerica. This will enable the tax service to complete the name change to the new tax service.

E. Tax tapes for all Tax Service Vendors and Systems Support Providers: 1. Seller must have its tax service (regardless of service provider) provide

LandAmerica with: i. An initial tax contract information tape (tax tape) no later than

fifteen (15) days prior to the applicable Servicing Transfer Date; and

ii. A final tax tape that only includes the Mortgage Loans that transferred to WMB. This tape must be provided to LandAmerica no later than five (5) Business Days after the applicable Servicing Transfer Date.

F. Deliver the tapes to LandAmerica at the following address: LandAmerica Tax Service C/O Data Integrity 4910 Rivergrade Rd. Ste. 301 Irwindale, CA 91706 Attn: WMB Processing Telephone No.: 626-543-1309 x. 166 28. Tax Contracts – Loan Transferring without Existing Contracts:

A. For any Mortgage Loan that transfers without a tax service contract, Seller must provide WMB with a valid street address and legal description of the related property. WMB will then bill Seller the cost of the tax service contract according to Schedule G. Fee Table of Tax Vendors and Systems Support Providers by State hereto.

B. Timing of Notification 1. Seller must provide the legal descriptions to WMB no later than fifteen

(15) days prior to the applicable Servicing Transfer Date.

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C. Seller must forward all real estate tax bills received after the applicable Servicing Transfer Date to WMB at the following address:

Washington Mutual Bank Attn: Tax Department 2210 Enterprise Dr. P.O. Box 100563 Florence, SC 29501-0563 D. Timing of real estate tax bill delivery

1. Seller must send all real estate tax bills received on or after the applicable Servicing Transfer Date, to WMB by overnight courier on the same day that such items were received by the Seller.

29. Interest on Escrow

A. If interest is required to be paid on funds in an escrow account, Seller must accrue and credit any such interest to the Escrow Account for each such Mortgage Loan that was earned on such Escrow Account prior to but excluding the applicable Servicing Transfer Date.

B. Seller must credit all such amounts prior to the applicable Servicing Transfer Date.

30. Adjustable Rate Mortgage (ARM) Loan

A. Seller must deliver to WMB, an ARM Loan history containing the information on the spreadsheet in Schedule H. ARM Loan History Template hereto.

B. Seller must deliver the spreadsheet to WMB no later than the fifteenth (15th) day (or immediately preceding Business Day if the 15th is not a Business Day) of the month prior to the applicable Servicing Transfer Date.

31. Automatic Clearing House (ACH)

A. WMB will continue to draft all ACH customers active on the Seller’s servicing system as of the applicable Servicing Transfer Date.

B. For ACH Customers the Seller must: 1. ensure no drafting will happen on the part of the Seller after the

applicable Servicing Transfer Date; and 2. provide all necessary drafting information to WMB so that WMB may

successfully set up drafting information within one (1) Business Day after the applicable Servicing Transfer Date.

i. Drafting information must include the following: (1) WMB loan number; (2) Mortgagor’s Name (3) Financial institution name; (4) ABA/routing number; (5) Bank account number; (6) Checking or savings indicator; (7) Draft date or delay days (whichever is applicable); (8) Additional principal amount; and (9) Option ARM draft option, if applicable.

C. Seller must provide WMB with the Mortgagor’s signed or otherwise authenticated ACH agreement for research purposes.

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32. New York Consolidation, Extension and Modification Agreements (NYCEMAs/MECAs)

A. The NYCEMA/MECA combines into one set of rights and obligations all of the promises and agreements stated in the existing notes and mortgages secured by the mortgaged premises; if new funds are advanced to the Mortgagor at the time of the consolidation, a new note and mortgage are executed.

B. Seller must remit to WMB all NYCEMA related fees collected from Mortgagors on NYCEMAs that are in process on the applicable Servicing Transfer Date.

C. Seller must remit fees by check accompanied by a transmittal indicating the WMB loan number, amount and current status. Funds must be delivered to WMB by the fifth (5th) Business Day following the applicable Servicing Transfer Date.

D. If Seller is sending Mortgagor(s) checks directly to WMB each check must be endorsed as follows:

Pay to the order of: Washington Mutual Bank Without Recourse Company Name By: (Signature) Name and Title of signer E. Delivery Address Washington Mutual Bank Attn: Modifications Department 2210 Enterprise Drive Mail Stop: FSC 0155 P.O. Box 100512 Florence, SC 29501-0512 F. Timing of Delivery

1. Seller must send all NYCEMA/MECA checks by overnight courier to WMB on the same day that such payments were received by the Seller.

G. Seller must deliver all NYCEMA/MECA documentation in process on the applicable Servicing Transfer Date to WMB. This includes, without limitation, all required collateral documents, NYCEMA requests, and all correspondence. Seller must deliver these documents by overnight tracked carrier to WMB at the address in XXXII E above. Seller must deliver these documents to WMB within two (2) Business Days after the applicable Servicing Transfer Date.

H. Seller must deliver to WMB a list of all pending NYCEMA transactions involving the Mortgage Loans to the above address, no later than thirty (30) calendar days prior to the applicable Servicing Transfer Date. If the applicable Servicing Transfer Date is less than thirty (30) days, the Seller must deliver the list no later than one (1) Business Day prior to the applicable Servicing Transfer Date.

33. Non-Qualifying/Simple Assumption (Name Changes)/Title Transfer/Escrow Holdbacks

A. Seller must remit to WMB all non-qualifying/simple assumption (name changes)/title transfer related fees collected from Mortgagors on transactions which are in process on the applicable Servicing Transfer Date.

B. Seller must remit fees by check accompanied by a transmittal indicating the WMB loan number, amount, transaction type and current status. Funds must be

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delivered to WMB by the fifth (5th) Business Day following the applicable Servicing Transfer Date.

C. If Seller is sending Mortgagor(s) check directly to WMB, each check must be endorsed as follows:

Pay to the order of: Washington Mutual Bank Without Recourse Company Name By: (Signature) Name and Title of signer D. Delivery Address Washington Mutual Bank Attn: Assumptions/Modifications Department 2210 Enterprise Drive Mail Stop: FSC 0155 P.O. Box 100512 Florence, SC 29501-0512 E. Timing of Delivery Checks Received After the Applicable Servicing Transfer

Date 1. Seller must send all non-qualifying/simple assumption/title transfer

transaction checks by overnight courier to WMB on the same day that such payments were received by the Seller.

F. Seller must deliver to WMB, all documentation for all non-qualifying / simple assumptions (name changes) / title transfers / escrow holdbacks that are pending on the applicable Servicing Transfer Date. Seller must deliver this documentation by overnight tracked carrier to WMB at the address in XXXIII D above. Seller must deliver the documentation no later than two (2) Business Days after the applicable Servicing Transfer Date. 1. For name changes, Seller must include the following documentation for

each Mortgage Loan with a pending name change: i. Marriage and adding spouse: marriage certificate, recorded

deed, transfer agreement, Application Identification Verification (AIV) and a Form W-9.

ii. Divorce: divorce decree w/property settlement, recorded deed, transfer agreement, decree/court order changing a party’s name and their Form W-9.

iii. Death: certified copy of death certificate and last will, letter of administration or equivalent documents.

iv. Death and adding someone: certified copy of death certificate, recorded deed, transfer agreement, AIV, and Form W-9.

v. Adding a child or children: birth certificate, marriage certificate, recorded deed, transfer agreement, AIV and Form W-9.

vi. Immediate family member other than child or children; transfer agreement, AIV, Form W-9, proof of relationship, recorded deed, and proof of name change if different.

vii. Trust: trust agreement (if permissible under applicable law), recorded deed, certificate of trust form, and Form W-9. Also needed is a current certificate of insurance indicating the insured is the trust.

viii. Other name change: petition for name change/court order.

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2. For Escrow Holdbacks, Seller must include the following documentation: i. A copy of the Escrow Holdback Agreement signed by the buyer.

Seller signatures are needed only if funds to be delivered by Sellers. (1) The agreement must state the amount of the holdback

funds, what work/repairs are needed for the property, and a completion date for the work/repairs.

ii. A HUD-1 or Settlement Statement or equivalent form. iii. A copy of the current appraisal.

iv. If the holdback funds are for repairs according to a termite inspection report, then a certificate or invoice of completion from the termite company is required.

v. Appliances: an invoice from the company that installed heater, air conditioner, garage door opener etc.

vi. Roof: (1) a certificate with warranty of workmanship for a

minimum of 2-5 years from the roofing company. A certificate of occupancy (New York state) issued by the city once the work is completed;

(2) a final inspection report; (3) a work completion agreement, evidenced that funds have

been released (copy of check), if the title company has already released funds to buyer/seller completed the work, copies of paid receipts for materials purchased or copies of cancelled checks for payment of the work to contractor/persons involved; and

(4) all lien waivers. 34. Third Party Bi-Weekly Payment Programs

A. Seller must deliver to WMB evidence of notification given to any 3rd party bi-weekly payment program vendor that WMB will now be servicing the Mortgage Loan.

B. Such notification must be provided to WMB no later than three (3) Business Days after the applicable Servicing Transfer Date.

C. Seller must provide WMB with evidence of such notification by e-mail to the following address: [email protected]

35. Mortgage Electronic Registry System (MERS) Requirements

A. If the Seller is a MERS client, all Mortgage Loans must be registered with MERS. The Seller is required to provide a MERS Mortgage Identification Number (MIN) for all Mortgage Loans.

B. For any Washington Mutual Mortgage Securities Corp. purchased Mortgage Loans, the Seller must perform (or cause to be performed) the following necessary transactions on MERS. 1. On the Settlement Date the Seller must complete the Transfer of

Beneficial Rights (TOBR) transaction using the MERS organization identification number of 1003646.

2. On the applicable Servicing Transfer Date the Seller must complete the Transfer of Servicer Rights (TOSR) transaction using the MERS organization identification number of 1000124.

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3. Seller must provide an electronic list of MERS Mortgage Loans to WMB no later than three (3) Business Days after the applicable Servicing Transfer Date. The list must be sent o WMB as follows: [email protected]. This list must include the following fields:

i. Seller loan number; ii. WMB loan number; iii. Settlement Date: iv. Servicing Transfer Date; v. MIN; and vi. MERS as original mortgagee (MOM) indicator.

C. For Washington Muutal Bank purchased loans; the Seller must perform the following necessary transactions on MERS. 1. On the Settlement Date the Seller must complete the Transfer of

Beneficial Rights (TOBR) transaction using the MERS organizational identification number of 1000124.

2. On the applicable Servicing Transfer Date the Seller must complete the Transfer of Servicer Rights (TOSR) transaction using the MERS organization identification number of 1000124.

3. Seller must provide an electronic list of MERS Mortgage Loans to WMB no later than three (3) Business Days after the applicable Servicing Transfer Date. The list must be sent to WMB at [email protected]. This list must include the following fields:

i. Seller loan number; ii. WMB loan number; iii. Settlement Date: iv. Servicing Transfer Date; v. MIN; and vi. MERS as original mortgagee (MOM) indicator

36. Year End Tax and Interest Reporting Requirements

A. Seller is responsible for reporting all tax and interest payments received for the time that the Seller serviced the loan. This will normally be from January of the current year through the applicable Servicing Transfer Date.

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Schedule A

Servicing Reports All servicing reports must be provided in an encrypted, preferably PGP, tab delimited text (.txt) file or other such format mutually agreeable between Seller and WMB. The servicing reports need to be provided at the time frame identified below or at least fifteen (15) Business Days prior to the applicable Servicing Transfer Date and two (2) Business Days after the applicable Transfer Date with data effective as of the Servicing Transfer Date. The reports need to be e-mailed in a compressed or zipped file no larger than five (5) megabytes. If the compressed or zipped file is larger than five (5) megabytes then multiple files need to be e-mailed. The reports need to be e-mailed to [email protected]. I. Conversion Reports A. Servicer release and servicing transfer reconciliation report 1. For Fidelity MSP clients only, provide reports 10N and 4CZ. II. Cashiering Reports

Note: All cash reports are required no later than two (2) Business Days after the applicable Servicing Transfer Date, with data effective as of the Servicing Transfer Date. E-mail all Cashiering Reports to WMB at [email protected]. A. A report listing all Mortgage Loans with automatic payment drafting. 1. Fidelity MSP report 1LD 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Payment due date (5) Payment draft date, or delay delays after due date

(6) Indicator if the draft is for the current payment (c) or if it is in for an advance / delinquent loan (a)

B. A report listing all Mortgage Loans that are on a third party draft program sorted by the draft vendor.

1. Report requirements (Fidelity MSP and non-Fidelity MSP clients) (1) Draft vendor (2) Seller’s loan number (3) WMB loan number (4) Mortgagor’s Name (5) Payment due date C. A report listing all Mortgage Loans with funds held in suspense detailing

application instructions. 1. Fidelity MSP report 5XS 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Suspense amount

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(5) Effective date of application (6) Specific instructions as to how the funds need to be applied D. A report listing all Mortgage Loans that have had Payoff statements produced. 1. Fidelity MSP report 4TN 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Quoted Payoff amount (5) Expiration date of the Payoff quite E. A report listing all Mortgage Loans that have prepayment fees 1. Report requirements (Fidelity MSP and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Prepayment fee term (5) Prepayment fee calculation method (6) Commencement of the prepayment fee period

III. Escrow Reports A. Escrow payee header listing 1. Fidelity MSP report 2EH 2. Non-Fidelity MSP report requirements (1) Payee code (2) Insurance company/taxing authority name (3) Insurance company/taxing authority address (4) Insurance company/taxing authority zip code (5) Insurance company/taxing authority telephone number (6) The number of Mortgage Loans tied to each payee code

B. A state matrix in which the Seller pays interest on escrow and the rate paid for each state.

C. A report listing all Mortgage Loans that have had a loss to the property where funds are currently held by the Seller.

1. Fidelity MSP report 1ET 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Amount of loss draft funds

IV. Insurance Reports A. A report listing all hazard insurance on all Mortgage Loans 1. Report requirements (Fidelity MSP and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Payee code (5) Policy number (6) Premium amount (7) Expiration date (8) Coverage amount

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(9) Coverage type B. Seller’s “open items” report containing all Mortgage Loans for which: (a) hazard

insurance premiums were due and payable on or before the applicable Servicing Transfer Date and will remain unpaid as of the applicable Servicing Transfer Date; and (b) hazard insurance premiums will be due and payable at any time after the applicable Servicing Transfer Date including the last day of the month immediately following the month during which the applicable Servicing Transfer Date occurred, and remain unpaid as of the applicable Servicing Transfer Date.

1. Fidelity MSP report 1AT 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMS loan number (3) Mortgagor’s Name (4) Payee Code (5) Policy number (6) Expiration date (7) Coverage amount C. A report listing all Mortgage Loans with lender placed insurance coverage 1. Fidelity MSP report 4CV 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMS loan number (3) Mortgagor’s Name (4) Payee Code (5) Policy number (6) Expiration date (7) Coverage type (8) Coverage amount (9) Premium (10) State of the property address (11) Principal balance D. A report listing all Mortgage Loans with flood insurance 1. Fidelity MSP report 1LF 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMS loan number (3) Mortgagor’s Name (4) Payee Code (5) Loan type (6) Flood zone (7) Flood program (8) LOMA/LOMR designation (9) Required zone flag (10) Type of coverage (11) Indicator if the Mortgage Loan is escrowed or non-escrowed for

flood insurance (12) Coverage amount (13) Expiration date (14) Principal balance (15) State of the property address (16) County code of the property address

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(17) Origination ate (18) Maturity date

E. A report listing all Mortgage Loans with earthquake and/or windstorm insurance 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Sellers loan number (2) WMB loan number (3) Mortgagor’s Name (4) Payee code (5) Policy number (6) Expiration date (7) Coverage type (8) Coverage amount (9) Premium F. A report listing all Mortgage Loans with Private Mortgage Insurance (PMI) 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Payee code (5) Company Name (6) Certificate Number (7) Premium amount (8) Next PMI premium due date (9) PMI rate (10) PMI percentage of coverage (11) Indicator of renewal frequency (monthly, annual, upfront, etc) G. Seller’s “open items” report containing all Mortgage Loans for which: (9)

Mortgage insurance premiums were due and payable on or before the applicable Servicing Transfer Date and will remain unpaid as of the applicable Servicing Transfer Date; and (b) Mortgage insurance premiums will be due and payable at any time after the applicable Servicing Transfer Date to include the last day of the month immediately following the month during which the applicable Servicing Transfer Date occurred, and remain unpaid as of the applicable Servicing Transfer Date.

1. Fidelty MSP report 1AT 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Payee code (5) Policy Number (6) Expiration date (7) Coverage amount H. A report listing all Mortgage Loans that have had PMI policies that have been

canceled or expired. 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Property address (5) Reason for cancellation

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I. A report listing all Mortgage Loans with a current, property loan-to-value ration that is greater than 80.0% without PMI

1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Current loan-to-value J. A report listing all Mortgage Loans that are self-insured 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Amount and location of self insurance funds K. A report listing all Mortgage Loans with lender paid PMI 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Payee code (5) Company name (6) Certificate number (7) Premium amount (8) Next PMI premium due date (9) PMI rate (10) PMI percent of coverage (11) Indicator for renewal frequency (monthly, annual, upfront, etc) (12) Amount and location of lender paid funds

V. Tax Reports A. A report listing all applicable tax lines on al Mortgage loans 1. Fidelity MSP report 10P-2 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Payee code (5) Tax type; school, county, city, etc. (6) Tax disbursement amount (7) Tax due date (8) Sequence (9) Term (10) Identification of all associated parcels (11) Property address (12) State alpha code

B. Seller’s “open items” report containing all Mortgage Loans for which: (a) taxes were due and payable on or before the applicable Servicing Transfer Date and will remain unpaid as of the applicable Servicing Transfer Date; and (b) taxes will be due and payable at any time after the applicable Servicing Transfer Date to include the last day of the month immediately following the month during which the applicable Servicing Transfer Date occurred, and remain unpaid as of the Servicing Transfer Date.

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1. Fidelity MSP report 1AT 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Payee code (5) Tax due date (6) Tax type; school, county, city, etc (7) Sequence (8) Last tax amount disbursed C. A report listing all Mortgage Loans without a tax service contract 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Property address

VI. Special Loan Reports

A. A report listing all Mortgage Loans with outstanding or p ending assumptions or beneficiary statements.

1. Fidelity MSP report 2TF 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Property address (5) Type of assumption; qualifying or non-qualifying B. A report listing all Mortgage Loans with pending legal name changes 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Property address (5) Transferee name (6) Loan type (7) Type of legal name change (8) Date of name change request C. A report listing all Mortgage Loans with pending escrow completion holdbacks 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Property address (5) Principal balance (6) Status of completion repairs (7) Deadline for completion of repairs (8) Third party recoverable corporate advance balance D. A report listing all Mortgage Loans under a cooperative project 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number

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(3) Mortgagor’s Name (4) Property address (5) Expiration dates of the current UCC filings. E. A report listing all Mortgage Loans pending a New York Consolidation,

Extension or Modification (NYCEM) 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Property address (5) Status of the pending NYCEM F. A report listing all Mortgage Loans which are in the process of being switched

from an adjustable rate mortgage to a fixed rate loan. 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Property address G. A report listing all Balloon Loans 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s name (4) Property Address H. A report listing all Mortgage Loans that have a buy down feature or are secured

by graduated payment mortgage 1. Fidelity MSP reports 4BS and 4GR 2. Non-Fidelity MSP report requirements (1) Seller’s loan number (2) WMB loan number (3) Mortgagor’s Name (4) Property address (5) Buy down amount (6) Buy down term I. A report listing all Mortgage Loans that are subject to the Servicemembers Civil

Relief Act of 1940. 1. Report requirements (Fidelity and non-Fidelity MSP clients) (1) subsidy method, buydown/subsidy or interest reduction (2) calculation method of the reduced p ayment (3) complete copy of the military orders (4) loan history from the active duty orders date to the applicable

Servicing Transfer Date.

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Schedule B Data File

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Schedule C Form of Transfer of Servicing Notice

[Date] [Borrower Name] [Co-Borrower Name] [Address] [City, State, Zip] RE: Notice of Transfer of Servicing [Seller] Number: [Insert Number] Dear [Borrower Name] and [Co-Borrower Name], if applicable: We are writing to notify you that the servicing of your mortgage home loans, that is, the right to collect payments from you, is being assigned, sold or transferred from [Insert Seller’s Name] to Washington Mutual Bank, effective [Insert Servicing Transfer Date]. The assignment, sale or transfer of the servicing of your mortgage loan does not affect any term of condition of your mortgage documents, other than terms directly related to the servicing of your loan. Except in limited circumstances, the law requires that your present servicer send you this notice at least 15 days before the effective date of transfer, or at closing. Your new servicer must also send you a notice no later than 15 days after this effective date of transfer or at closing. Your present servicer is [Insert Seller’s Name]. If you have any questions relating to the transfer of servicing from [Insert Seller’s Name] on or before [Insert Servicing Transfer Date], please call [Insert Seller’s Name] and [the applicable Department of Seller] at the following toll-free telephone number: [Insert Seller’s Name] [Applicable Department of Seller] [Seller’s Toll Free Number] [Seller’s Hours of Operations] Your new servicer will be Washington Mutual Bank (Washington Mutual). If you have any question relating to the transfer of servicing to Washington Mutual on or after [Insert Servicing Transfer Date], please call Washington Mutual’s Enterprise Customer Care Department at the following toll-free telephone number. Washington Mutual Bank Enterprise Customer Care Department 1-866-926-8937 Monday through Friday, 8:00 a.m. to 11:00 p.m. Eastern Time

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The date that [Insert Seller’s Name] will stop accepting payments from you is [Insert Day Before Servicing Transfer Date]. The date that Washington Mutual will start accepting payments from you is [Insert Servicing Transfer Date]. Please send all payments due on or after that date to Washington Mutual. Your checks should be made payable to Washington Mutual. The address listed below should be used for making payments or sending correspondence to Washington Mutual: Payment Address Business and Correspondence Address Washington Mutual Bank Washington Mutual Bank P.O. Box 9001123 P.O. Box 100576 Louisville, KY 40290-1123 Attn: Enterprise Customer Care Dept. Florence, SC 29501-0576 Facsimile No.: 843-673-3507 If your payments are automatically drafted from one of your accounts by your current servicer or you are using the Western Union Equity Accelerator program, you will not need to make any changes as this service will continue as a part of the transfer. However, if you are using another third party bi-weekly drafting program, you will need to contact your current servicer and/or provider to determine whether your automatic drafting will continue to occur. Also, if your payments are made through a military allotment process or a third-party bill payment servicer (e.g. by telephone or an online bill pay service), you must inform your vendor or financial institution of the following, otherwise your payment may not be applied to your loan:

• Your new loan number from Washington Mutual Bank • The change in your payee to Washington Mutual Bank • The new payment mailing address listed above

The transfer of servicing rights will affect the terms of or the continued availability of all mortgage life or disability insurance or any other type of optional insurance or other optional product. These products will not be available to your through Washington Mutual as of the effective date of the transfer of servicing. If you currently have one or more of these products, it is possible that you may be able to maintain coverage by making arrangements directly through the companies offering the products in question. If you wish to pursue continuation of any of these affected products, you must contact the companies directly. Please note that in January [Insert Year Following Year of Servicing Transfer], you should be sent two annual statements – one from [Insert Seller’s Name] reflecting mortgage interest and real estate taxes paid for the period during which it serviced your loan, and one from Washington Mutual reflecting mortgage interest and real estate taxes paid for the period during which it serviced your loan. You should also be aware of the following information, which is set out in more detail in Section 6 of Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2605): During the 60-day period following the effective date of transfer of the loan servicing, a loan payment received by your old servicer before its due-date may not be treated by the new loan servicer as late, and a late fee may not be imposed on you.

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Appendix F. Servicing Transfer Instructions

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-36 (Rev. 05/04/07)

Section 6 of RESPA (12 U.S.C 2605) gives you certain consumer rights. If you send a “qualified written request” to your loan servicer concerning the servicing of your loan, your servicer must provide you with a written acknowledgment within 20 Business Days of receipt of your request. A “qualified written request” is a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, which includes your name and account number, and your reasons for the request. Not later than 60 Business Days after received your request, your servicer must make any appropriate corrections to your account, and must provide you with a written clarification regarding any dispute. During this 60-Business Day period, your servicer may not provide information to a consumer reporting agency concerning any overdue payment related to such period or qualified written request. However, this does not prevent the servicer from initiating foreclosure if proper grounds exist under the mortgage documents. A Business Day is a day on which the offices of the business entity are open to the public for carrying on substantially all of its business functions. Section 6 of RESPA also provides for damages and costs for individuals or classes of individuals in circumstances where servicers are shown to have violated the requirements of that Section. You should seek legal advice if you believe your rights have been violated. Welcome to Washington Mutual. We look forward to the opportunity to service your home loan. Sincerely, Enterprise Customer Care Department Washington Mutual Bank

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Schedule D Reporting:

Payoff, Actual/Actual and Scheduled/Scheduled

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Schedule E Documents Required for Servicing File

Refer to all items in Exhibit A-2 of MLPA which includes copies of all documents Exhibit A-1. In addition to a coy of the tax information sheet (complete with account numbers, taxing authorities, addresses, Monthly Payments, and next Due Date indicating which taxing authorities were paid and the tax contract number if TRETS is the tax service provider) and closing escrow instructions.

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Appendix F. Servicing Transfer Instructions

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Schedule F Condominium Notice Letter

Date: Condominium Name Attention: Condominium Association Street Address City, State, Zip RE: Property located at Washington Mutual Mortgage Loan No. Current Owner Certified Mail No. To whom it may concern: Please amend your records to reflect Washington Mutual Bank as servicer on the Mortgage Loan described above. Any notices regarding default of the association fees should be mailed to the following address: Washington Mutual Bank 7255 Baymeadows Way Jacksonsville, Florida 32256 Please be sure to include the property address, current owner and the Mortgage loan number shown above on all notifications. Sincerely, [Seller’s name]

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Appendix F. Servicing Transfer Instructions

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Schedule G Fee Table for Tax Vendors and Systems Support Providers by State

State Tax Vendor

/Systems Support Provider

Fee if Mortgage Loan has a Life of

Loan Tax Contract*

Fee if Mortgage Loan does not have a Life of Loan Tax

Contract ** Alabama First American $17.50 $50.00 Alaska LandAmerica $17.50 $43.00 Arizona ZCERTS $10.00 $10.00

Arkansas LandAmerica $17.50 $43.00 California ZCERTS $10.00 $10.00 Colorado ZCERTS $10.00 $10.00

Connecticut First American $17.50 $50.00 Delaware ZCERTS $10.00 $10.00

District of Columbia ZCERTS $10.00 $10.00 Florida ZCERTS $10.00 $10.00 Georgia First American $17.50 $50.00 Guam LandAmerica $17.50 $43.00 Hawaii LandAmerica $17.50 $43.00 Idaho ZCERTS $10.00 $10.00 Illinois First American $17.50 $50.00 Indiana First American $17.50 $50.00

Iowa LandAmerica $17.50 $43.00 Kansas LandAmerica $17.50 $43.00

Kentucky First American $17.50 $50.00 Louisiana First American $17.50 $50.00

Maine First American $17.50 $50.00 Maryland First American $17.50 $50.00

Massachusetts First American $17.50 $50.00 Mexico LandAmerica $17.50 $43.00

Michigan First American $17.50 $50.00 Minnesota LandAmerica $17.50 $43.00 Mississippi First American $17.50 $50.00 Missouri LandAmerica $17.50 $43.00 Montana LandAmerica $17.50 $43.00 Nebraska LandAmerica $17.50 $43.00 Nevada ZCERTS $10.00 $10.00

New Hampshire First American $17.50 $50.00 New Jersey First American $17.50 $50.00 New Mexico ZCERTS $10.00 $10.00 New York First American $17.50 $50.00

North Carolina ZCERTS $10.00 $10.00 North Dakota LandAmerica $17.50 $43.00

Ohio First American $17.50 $50.00 Oklahoma LandAmerica $17.50 $43.00

Oregon ZCERTS $10.00 $10.00 Pennsylvania First American $17.50 $50.00 Puerto Rico First American $17.50 $50.00

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Rhode Island First American $17.50 $50.00 South Carolina First American $17.50 $50.00 South Dakota LandAmerica $17.50 $43.00

Tennessee ZCERTS $10.00 $10.00 Texas LandAmerica $17.50 $43.00 Utah ZCERTS $10.00 $10.00

Vermont First American $17.50 $50.00 Virgin Islands First American $17.50 $50.00

Virginia First American $17.50 $50.00 Washington ZCERTS $10.00 $10.00

West Virginia First American $17.50 $50.00 Wisconsin First American $17.50 $50.00 Wyoming LandAmerica $17.50 $43.00

* Fee by Vendor: First American = $17.50; LandAmerica = $17.50; ZCERTS = $10.00 ** Fee by Vendor: First American = $50.00; LandAmerica = $43.00; ZCERTS = $10.00

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Schedule H ARM Loan History Template