Вы находитесь на странице: 1из 136

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
Section 101. Servicer Eligibility
Servicers who wish to participate in the Washington in existence for less than two years, financial
Mutual Mortgage Securities Corp. (“Buyer”) Servicing information substantiating the Servicer’s capacity to
program must first complete a Seller/Servicer participate in the Buyer’s programs is required.
Application (WAMU 5000) and submit it to Buyer 2. Approvals: The Servicer must be either a HUD
together with the following required documentation: (i) approved mortgagee or a bank or savings and loan
professional resumes of the principal officers and the which is insured by the Federal Deposit Insurance
individuals responsible for origination, underwriting, Corporation (FDIC). The Servicer and its parent
accounting, servicing, shipping and final documentation company (whether direct or indirect), if applicable,
delivery; (ii) the Servicer’s audited financial statements must meet the capital requirements of the FDIC, the
for the previous two years and the most current interim Office of Thrift Supervision (OTS), or any other
financial statements (“YTD Profit and Loss Statement”). state or federal regulatory agency that regulates the
If a current YTD Profit and Loss Statement is not Servicer or its parent company. The Servicer must
available at time of application, then the most recent also be either Fannie Mae (FNMA) or Freddie Mac
three years audited financial statements are required; (iii) (FHLMC) approved.
in the event the Servicer has a parent, the parents audited
financial statements for the previous two years, and the 3. Facilities: The Servicer must maintain satisfactory
parent’s most current YTD Profit and Loss Statement. If facilities in which to service mortgages, including
a current YTD Profit and Loss Statement is not available automated servicing capabilities.
at the time of application, then the most recent three 4. Legal Standing: The Servicer must be duly
years audited financial statements are required; (iv) the organized, validly existing, properly licensed, and in
most recent audit reports issued with respect to the good legal standing under the laws of the state of its
Servicer by Fannie Mae, Freddie Mac, HUD and any incorporation and in each state in which the property
other governmental or quasi-governmental agency with securing a serviced loan is located, with the power
jurisdiction over any of the Servicer’s operations; (v) a and authority to enter into a Servicing Contract
copy of the Servicer’s quality control procedures, for (WAMU 1001) with the Buyer; and its compliance
origination and servicing, presently in place, and copies with the terms and conditions of the Servicing
of the three (3) most recent quality control reports to Contract and this Servicing Guide will not violate
Servicer’s senior management and quality control any of the provisions of its articles of incorporation,
summary reports as submitted to Servicer’s senior charter or by-laws, and any other instrument relating
management; (vi) a copy of the completed servicing to the conduct of the business or the ownership of
questionnaire (application addendum); (vii) a certificate property or any other agreement to which it is a
of insurance for each of the Servicer’s fidelity bond, party or by which it is bound.
errors and omissions, and directors and officers liability
insurance policies which meet the requirements of 5. Insurance: The Servicer must maintain in effect, at
Section 101.04; and (viii) a complete list of all names all time and at its expense, fidelity bond, errors and
omissions insurance, and directors and officers
under which the Servicer is doing business, or has done
business in the last five years. liability policies which meet the Buyer’s
requirements as defined in Section 101.04.
101.01 Eligibility Requirements 6. Good Standing: The Servicer must be in good
standing with all applicable regulatory authorities
The following eligibility requirements must be met prior and not subject to any extraordinary supervision of
to approval and must be maintained by the Buyer its operations.
approved Servicers at all times. In addition, the Buyer
may request evidence of the Servicer’s compliance with 7. External Audits: The Buyer request a copy of
each of these provisions at any time. The Buyer may, at external audits be provided if the Servicer is subject
its own discretion, allow deviations from these stated to these requirements: (a) USAP reports (servicer);
requirements if it believes it is in its own best interest to (b) Reg AB attestations and reports; and (c) SAS 60
do so. internal control reports (sellers and servicers).
1. Experience: The Servicer must have a minimum 101.02 Required Documentation
existing servicing portfolio of 3,500 mortgages and
must have MBS style reporting capabilities (on hard Once approved by the Buyer, the Servicer must execute
copy or tape) with an institutional investor. The and submit the following documents, correct and
Servicer must have at least two years of experience complete in all material respects, to Buyer:
in servicing conventional residential mortgages and • An original, certified copy of the Corporate
must follow generally accepted practices and Resolution (WAMU 1008);
prudent servicing practices. If the Servicer has been

Servicing Guide: Loan Administration 101-1


(Rev. 12/11/08)
Section 101. Servicer Eligibility
• A Selling and Servicing Contract (WAMU 1001); A. Amount of Coverage
• An ACH Debit Authorization (WAMU 4006); Coverage for fidelity bond, errors and omissions, and
• An applicable Custodial Account Letter Agreements directors and officer’s liability insurance must be based
(WAMU 4002, WAMU 4003, WAMU 4004 and on the Servicer’s total portfolio (all residential mortgages
WAMU 4005); and commercial loans) which the Servicer serviced for
• Seller-Servicer Supplemental Information (SSF 011) itself and all other investors, including the Buyer, during
• Contact List (SSF 003); the preceding 12 months. The amount of coverage for
fidelity bond, errors and omissions, and directors and
• Lender’s Authorization and MI Company and HUD officer’s liability insurance is calculated as follows:
Reference Request (SSF 006);
• Lender’s Authorization and Investor Release (SSF Total Portfolio Minimum Coverage Required
005); and $100 million or less $300,000
• Certificates of insurance evidencing the fidelity
$100 - $500 million $300,000 + .15% of total portfolio
bond, errors and omissions, and directors and
exceeding $100 million
officers liability insurance coverage which meets the
Buyer’s requirements as outlined in Section 101.04. $500 million to $900,000 + .125% of total portfolio
$1 billion exceeding $500 million
Approved Servicers must continue to meet the eligibility
requirements as amended from time to time, in order to Over $1 billion $1,525,000 + .1% of total portfolio
continue to service loans on behalf of the Buyer. exceeding $1 billion

101.03 Corporate Resolution The amount of coverage required for a direct surety bond
may be based on the total servicing portfolio the Servicer
Upon approval, the Servicer must supply the Buyer with is servicing on behalf of the Buyer, provided that such
an original, certified copy of the Corporate Resolution. surety bond relates solely to such portfolio.
If, at any time, there is a change to the authority provided
by the Corporate Resolution or changes to the persons B. Scope
provided with such authority, the Servicer must The fidelity bond, errors and omissions, and directors
immediately submit either an amended original, certified and officer liability coverage must insure the Servicer
copy of the Corporate Resolution reflecting the current against losses resulting from dishonest, negligent or
information, or an original Corporate Certificate of fraudulent acts committed by employees of the Servicer,
Authority reflecting new authorities granted. The Buyer including, but not limited to, any person employed under
will not recognize any change to the Servicer’s a permanent or temporary employment agreement, any
Corporate Resolution until the original, certified copy of person acting as an agent or representative of the
the Corporate Resolution or an original Corporate Servicer, any employees of outside firms that provide
Certificate of Authority is received. data processing services for the Servicer, each director
101.04 Fidelity Bond, Direct Bond, and officer who has control over or access to cash,
securities or other property of the association, and
and Errors and Omissions Coverage persons employed as student interns. The coverage must
The Servicer is responsible for maintaining in effect, at also protect against dishonest, negligent or fraudulent
all times and at its expense, blanket fidelity bond, errors acts by the Servicer’s principal owner, if the Servicer’s
and omissions, and directors and officers liability insurance writer provides that type of coverage.
insurance coverage. Specific insurance requirements are Servicers must obtain errors and omissions coverage that
indicated below. Insurance coverage which does not under the terms of the policy or by separate rider; (i)
meet the minimum amount required or an insurance provides that the insurer will name the Buyer, as an
deductible which exceeds the limit allowed must be investor, as loss payee on payment drafts issued by the
approved by the Buyer. Servicers must request a waiver insurer for losses to the Buyer resulting from acts or
of these requirements in writing and provide evidence omissions covered by the insurance and (ii) gives the
satisfactory to the Buyer of FNMA’s or FHLMC’s Buyer, as an investor, the right to file a claim directly
approval, as applicable, of the Servicer’s insurance with the insurer, should the Servicer fail to do so, for
coverage. losses to the Buyer resulting from acts covered by the
If, at any time, there is a change in coverage, or if insurance.
coverage has expired, the Servicer must immediately
submit evidence of the amended or renewed insurance C. Deductible
coverage to Relationship Management Operations. The deductible for fidelity bond, directors and officer’s
Refer to Appendix B for the current address. liability, and direct surety coverage may be no more than

101-2 Servicing Guide: Loan Administration


(Rev. 12/11/08)
Section 101. Servicer Eligibility
$100,000 or 5% of the bond’s face amount, whichever is The Servicer must submit an executed Regulatory
greater. The deductible for errors and omissions Officer’s Certificate substantially in the form of WAMU
coverage may be no greater than 5% of the liability 31476.
coverage per occurrence. The Accountants’ Statement required to be delivered
D. Cancellation under this Servicing Guide must be prepared by a firm of
independent public accountants that is a member of the
The insurance certificate issued must indicate the American Institute of Certified Public Accountants and
insurance broker’s or agent’s agreement to notify the shall contain a statement to the effect that, based on an
Buyer of any cancellation or reduction of coverage examination conducted by such firm in compliance with
within 10 days of such reduction or cancellation. the Uniform Single Attestation Program for Mortgage
Bankers (“USAP”). On or after January 1, 2006, the
101.05 Annual Certification, Regulatory Servicer will also be required to submit an Attestation in
Officer’s Certificate and Accountants’ accordance with Section 1122 of Regulation AB: 17
CFR 229.1100-1123, as such regulations may be
Statement
amended from time to time, the assertion of management
On or before March 1st of each year, the Servicer must of the Servicer that it has complied with the minimum
deliver to the Buyer: servicing standards identified in the USAP or Section
1122 of Regulation AB is fairly stated in all material
(1) an Annual Certification (WAMU 1007) signed by an
respects, except for (s) such exceptions as such firm shall
authorized corporate officer;
believe to be immaterial, and (ii) such other exceptions
(2) a Regulatory Officer’s Certificate (WAMU 31476);
as shall be set forth in such statement.
(3) an Accountants’ Statement;
(4) Section 1122 of Regulation AB: 17CFR 229.1100-
1123 Attestation; The Company shall also cooperate fully with
(5) SOX Certification/Officer’s Certificate – Backup Washington Mutual to deliver to Washington Mutual,
302 Certification; and and to any of its assignees or designees in the format
(6) SAS 60 internal reports. specified in Washington Mutual’s Servicer Guide, any
and all statements, reports, certifications, records and any
The Annual Certification must include certifications other information necessary, in Washington Mutual’s
from an authorized corporate officer that (i) the servicing good faith determination, to be required to permit
eligibility requirements set forth in this Servicing Guide Washington Mutual or its assignees/designees to comply
have been reviewed, (ii) the Servicer is in full with the provisions or Regulation AB 17 CFR 229.1100-
compliance with such servicing eligibility requirements, 1123, together with such disclosures relating to the
(iii) a review of the activities of the Servicer during the Company acting in its capacity as Seller, the Company
preceding calendar year and of performance under this acting in its capacity as Servicer, the Mortgage Loans or
Servicing Guide and the Servicing Contract through such the Company acting in its capacity as Servicer servicing
year has been made under such officer’s supervision, and the Mortgage Loans reasonably believed by Washington
(iv) to the best of such officer’s knowledge, based on Mutual, its assignee or its designee to be required for
such review, the Servicer has fulfilled all of its such transaction.
obligations under this Servicing Guide and the Servicing
Contract through such year. (If there has been a default Each of the updated, audited financial statements, the
in the fulfillment of any such obligation, the Annual Annual Certification, the Regulatory Officer’s Certificate
Certification shall include a description of each such and the Accountant’s Statement required under this
default, specifying the nature and status thereof.) If so Servicing Guide must be sent to the address noted on
requested by the Buyer, the Servicer must provide any Appendix B in this Guide.
documentation necessary to substantiate the 101.06 Periodic Audit
certifications contained in the Annual Certification. A
copy of any recent third party audits (FNMA, FHLMC, The Buyer reserves the right to conduct periodic audits
HUD, etc.) will be reviewed by the Buyer to verify there of the Servicer’s books and records relating to any
are no disciplinary actions taken by any of the agencies, mortgage serviced by the Servicer or on behalf of the
including either suspension or termination of the Buyer and of the Servicer’s mortgage servicing practices
applicant. A copy of any recent rating agencies reviews and procedures. The Servicer must cooperate with such
(Fitch, Moody’s, S&P, etc.) will be reviewed by the audits and provide access to the Buyer and its agents to
Buyer to notate any weaknesses found within said the Servicer’s offices, books and records at reasonable
review. times during the Servicer’s normal business hours. In
addition, if so requested by the Buyer at any time during

Servicing Guide: Loan Administration 101-3


(Rev. 12/11/08)
Section 101. Servicer Eligibility
the year, the Servicer will provide the Buyer with recognized in the geographic area in which the
evidence of its current compliance with all eligibility Seller operates.
requirements as described in Section 101.01. • The Servicer’s fidelity bond and/or errors and
101.07 Agency Audit Reporting omissions insurance is canceled and no replacement
coverage is obtained.
Requirements • The Servicer fails to remit the appropriate funds or
In the event the Servicer is audited by an agency such as make the appropriate funds available for ACH
FNMA, FHLMC, HUD, etc., and any rating agency such withdrawal by the Buyer on any date which funds
as Fitch Ratings, Inc., Standard &Poor’s Rating Services, are due from the Servicer.
or Moody’s Investor Services; the Servicer must cause • The Servicer fails in four consecutive months to
the Buyer to receive copies of the audit report within 15 forward required pool accounting reports to the
calendar days of the Servicer’s receipt of the audit report Buyer by the date on which such reports are due.
from the applicable agency and/or rating agency. • The Servicer fails to follow specific instructions
In the event disciplinary action is taken by such agency, from the Buyer regarding the servicing of a
including either suspension or termination of the particular mortgage.
Servicer, the Buyer must be notified in writing within 3 • The Buyer discovers the Servicer has
business days of Servicer’s receipt of such notice. misrepresented facts related to the Eligibility
Requirements set forth in Section 101.01 in its initial
101.08 Termination of Servicing application for approval as a Servicer or in any
Privileges information related to its Annual Certification.
Without limiting the Buyer’s right to take whatever • The Servicer is found to have acted with conscious
action it deems appropriate to protect its interests and disregard or in a negligent manner with respect to
enforce its rights, the Buyer may suspend or terminate a the Buyer’s or its assignee’s interests in a mortgage.
Servicer’s privileges as set forth below. • The Buyer considers such suspension or termination
necessary to protect its interest or enforce its rights.
A. Servicing Termination for Cause
• The Servicer fails to meet any of the eligibility
For any of the following reasons, the Buyer may, at its requirements set forth in Section 101.01.
discretion, declare an immediate termination and
• The Servicer sells, transfers, subcontracts, pledges,
forfeiture of a Servicer’s servicing privileges:
collateralizes, or encumbers any portion of its
• Any failure by the Servicer to deliver or cause to be servicing rights hereunder without prior approval
delivered the Annual Certification, the Regulatory from the Buyer.
Officer’s Certificate, or the Accountants’ Statement • The Servicer has breached any representations,
required pursuant to Section 101.05 of this Servicing warranties, or obligations set forth in the Servicing
Guide. Guide.
• Any failure by the Servicer to deliver or cause to be
• The Servicer has pledged, sold, transferred or
delivered, in the format outlined under Regulation
encumbered any servicing fee income or rights
AB Exhibits Section 501 of this Servicing Guide,
without the prior written consent of the Buyer, in
any requested documentation, which the Buyer has
violation of Section 102.03.
determined to be required to comply with
Regulation AB: 17 CFR 229.1100-1123 as required • The Servicer’s insolvency, the adjudication of the
pursuant to Section 101.05 of this Servicing Guide. Servicer as a bankrupt, the appointment of a receiver
• Any failure by the Servicer to deliver or cause to be for the Servicer, the Servicer’s execution of a
delivered the SOX Certification/Officer’s Certificate general assignment for the benefit of its creditors, or
– Backup 302 Certification. any other change in the Servicer’s financial status
that, in our opinion, materially and adversely affects
• Any failure by the Servicer to deliver or cause to be
its ability to provide satisfactory servicing of the
delivered the SAS 60 internal reports.
mortgages. (If any of these events should occur, no
• Any failure by the Servicer to deliver or cause to be interest in any mortgage or pool of mortgages shall
delivered a coy of the balance sheet, income be deemed an asset or liability of the Servicer’s
statement and changes in financial position for the successors or assigns, nor shall any interest pass by
Seller and its parent company, if any, covering the operation of law without our consent.)
most recent fiscal year which, in each case, have
been audited by independent public accountants • The finding by a court of competent jurisdiction that
the Servicer, or any of its principal officers, has

101-4 Servicing Guide: Loan Administration


(Rev. 12/11/08)
Section 101. Servicer Eligibility
committed an act that constitutes civil fraud, or the whom the terminated Servicer has transferred the
conviction of the Servicer or its officer(s) for any servicing privileges, if such a transfer has occurred
criminal act that is related to the Servicer’s within the prescribed time period or (ii) to the Buyer or
mortgage servicing activities, if the Buyer believes its designee, if the servicing privileges have not been
that such act materially and adversely affects the transferred by the terminated Servicer within the
Servicer’s reputation or the reputation or interests of prescribed time period.
the Buyer.
C. Remedies Cumulative
If the Buyer declares a forfeiture of servicing rights for
any of the reasons set forth above, no compensation will All rights and remedies provided to the Buyer in this
be paid to the Servicer and such servicing privileges Servicing Guide are in addition to any other right or
shall immediately terminate and revert to the Buyer remedy available to the Buyer under the Servicing
without further action by any party, or, at the Buyer's Contract or afforded by law or equity, and may be
discretion, the Servicer shall, without compensation, exercised concurrently with, independently of, or in
transfer its servicing portfolio to a Buyer-approved succession to, such other rights, and such rights and
Servicer within 60 days of notification of termination. remedies shall inure to the benefit of the Buyer, its
successors and assigns. The failure of the Buyer to
In the event of a termination under this Section 101.08 exercise any of its remedies does not constitute a waiver
A, the Servicer shall promptly deliver all documents, of that remedy in the future in connection with the same
files, records (including computerized records), and or any other breach or default by the Servicer.
monies (e.g., escrow funds) to the Buyer or its designee.
D. No Right To Damages
B. Other Servicing Terminations Our decision to terminate a Servicer's servicing
The Buyer may terminate a Servicer’s servicing rights privileges, or the entire Servicing Contract does not
for cause for reasons which are considered less serious entitle the Servicer to recover any exemplary, punitive,
than those set forth in Section 101.08 A. In addition, the or consequential damages. If appropriate we may offset
Buyer may terminate a Servicer’s servicing rights any monies the Servicer owes us at the time of the
without cause. In each of these situations, once the termination against any applicable servicing
Buyer notifies the Servicer that its Servicing Contract is compensation, purchase proceeds, or other funds we owe
being terminated; the Servicer has 60 days in which to the Servicer, all as further provided in Section 403.03.
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 E. Compliance
Servicer is responsible for all costs incurred by the
transfer and may retain any fees involved in the Any Servicer who is not in compliance with the request
transaction. for documentation as part of the periodic review may be
subject to suspension/termination.
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

Servicing Guide: Loan Administration 101-5


(Rev. 12/11/08)
Section 101. Servicer Eligibility

This page left intentionally blank.

101-6 Servicing Guide: Loan Administration


(Rev. 12/11/08)
Section 102. Compensation and Subcontracting
102.01 Servicer Compensation collected from the borrower, and may not be collected from
the escrow account, deducted from a monthly installment,
As compensation for servicing the Buyer’s loans, the or capitalized.
Servicer retains servicing fees, late charges, assumption
fees, and some fees charged for special services. These 102.02 Subcontracting or Transfer of
fees are payable to the Servicer from the time the Buyer Servicing
purchases a loan until it is paid in full, as long as the
Servicer collects the mortgage payments. Servicing fees at A Servicer may not outsource or subcontract any servicing
liquidation are payable only from interest collected at function, sell, pledge or transfer its responsibility for
liquidation. Refer to Section 302.02 for full details on servicing any loan serviced on behalf of the Buyer in whole
accounting of servicing fees. or in part without prior written approval from the Buyer.
With respect to outsourcing or subcontracting of any
A. Servicing Fees servicing function to any vendor or other provider, the
For each fixed rate loan serviced for the Buyer, the Servicer must identify the party that will be performing the
Servicer retains a servicing fee from interest actually servicing function, describe the scope of its responsibilities
collected with respect to such loan made up of the and provide such other information as the Buyer may
difference between the mortgage interest rate and the net request, including without limitation information necessary
rate to the Buyer. Such fee is also payable when to determine whether such party’s certification of
liquidation funds are received from the borrower, whether compliance with servicing criteria may be required in
derived from a foreclosure sale, mortgage insurance connection with certain transactions. Any request for
proceeds, or a third party sale. The net rate is defined as subcontracting or the transfer of servicing must specify the
the rate of interest payable to the Buyer on each loan and reason for the request, be accompanied by a Trial Balance
will be agreed at the time the commitment to purchase the Sheet (WAMU 4018) and a copy of the Request for
loan is entered into by the Buyer. The servicing fee will be Transfer of Servicing (WAMU 3008) providing
established at the time the mortgage loan is sold by the information on the qualifications of the proposed
Seller to the Buyer and may be subsequently changed as transferee. This notification should be received by the
agreed upon by the Buyer and the Servicer. Buyer 60 days prior to the proposed transfer or
subcontractor’s commencement of subcontracting
With respect to most adjustable rate mortgages (ARMs), activities, as applicable. The proposed Servicer must meet
the servicing fee is the difference between the gross margin all of the Buyer’s eligibility requirements as stated in
stated in the mortgage Note and the net margin to the Section 101.01 and have executed a Washington Mutual
Buyer agreed upon at the time the commitment to purchase Mortgage Securities Corp. Selling and Servicing Contract.
the loan is entered into by the Buyer. The servicing fee for
an ARM loan will be retained by the Servicer from interest All outstanding obligations of the Servicer to the Buyer
actually collected with respect to such loan. The servicing must be satisfied prior to any transfer. The Servicer will be
fee will be established at the time the mortgage loan is sold advised of the Buyer’s decision and any other conditions to
by the Seller to the Buyer and may be subsequently be met for approval. If the request is approved, the
changed as agreed upon by the Buyer and the Servicer. Servicer and the proposed transferee must execute the
However, if an adjustable rate loan converts to a fixed rate Request for Transfer of Servicing, the Servicing Agreement
loan, the servicing fee may not exceed the original signed by the Servicer and the proposed transferee, the
servicing fee on the ARM Note. original Custodial Account Forms (4001, 4002, 4004, 4006
and 4014 for buydowns) and consummate the transfer
If the mortgage interest rate includes primary mortgage according to the Buyer’s specifications within 60 days of
insurance premiums, the minimum servicing fee must not the approval date. A $500 transfer fee is due the Buyer
include these premium amounts. immediately upon the Buyer’s approval of the transfer.
B. Late Charge Provision An approved Servicer will not be relieved of its obligations
The Servicer is authorized to collect and retain late charges pursuant to its original contract with the Buyer by
provided for in the note or security instrument which establishing a subcontracting relationship with another
comply with applicable state law. If the state law does not party. Any transfer or subcontracting without the Buyer’s
permit the charge provided for in the Note or Security written consent may result in suspension or termination of
Instrument, the maximum amount allowable pursuant to the Servicer’s privileges and forfeiture of servicing rights
state law should be used. The late charge should be for existing loans.
computed only on the principal and interest installment, not As a condition to approving any request to transfer
on the full monthly payment. Late charges must be servicing, the Buyer will require the transferee to assume
all of the Servicer’s servicing warranties and obligations

102-2
(Rev. 05/16/08) Servicing Guide: Loan Administration
Section 102. Compensation and Subcontracting
and all of the Seller’s representations, warranties and change in the ownership of the Servicer’s parent, any
obligations as set forth in the Seller Guide, and will require owner of the parent, or any beneficial owner of the
the transferee to enter agreements which evidence the Servicer that does not own a direct interest in the
assumption of such representations, warranties and Servicer;
obligations. 3. any change in corporate name;
The Servicer and the transferee will also be obligated, 4. any change from a federal charter to a state charter (or
jointly and severally, to indemnify and hold harmless, the vice versa) if the Servicer is a savings and loan
Buyer, its successors and assigns against all losses, claims, association or a bank;
costs and expenses (including reasonable attorney’s fees)
that may arise against the Buyer, its successors and assigns, 5. a material adverse change in financial condition; and
from the failure to comply with applicable laws and 6. the sale of all, or substantially all, of the Servicer’s
regulations related to the transfer of servicing. assets or a line of business.
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

102-2 Servicing Guide: Loan Administration


(Rev. 05/16/08)
This page left intentionally blank
Section 103. Administrative Responsibilities
103.01 Internal Audit Controls thereof originally certified to by the applicable
recording office
The Servicer is responsible for maintaining accurate • Original or an originally certified copy of a final
records and books of account and an adequate system of title insurance policy and any required waivers or
audit and internal controls. The Servicer must promptly attorney’s opinion
notify the Buyer in writing of any material adverse • Original recorded assumption, modification,
change in the financial condition of the Servicer and of consolidation, extension or substitution agreements,
any facts or circumstances which could adversely affect including any modification agreement converting an
the prospects for timely remittance of principal and adjustable rate mortgage to a fixed rate mortgage, if
interest payments on any loan or the ability of the applicable or a fully recorded legible reproduction
Servicer to service any loan. thereof originally certified to by the applicable
For adjustable rate mortgages, the Servicer must ensure recording office.
it has systems and procedures in place which can The Final Documentation Transmittal (WAMU 2009)
adequately support the ongoing servicing requirements must be completed and stapled on top of the documents
of any adjustable rate mortgage program of Buyer under regardless of when submitted to the Loan Purchase
which it services. Because of many variables and Center. Refer to Appendix B for the current address.
options permitted under the Buyer’s adjustable rate
Additional original documents may be required to be
mortgage programs, the Servicer must closely monitor
maintained in the Buyer’s files per specific mortgage
these loans. It is the Servicer’s responsibility to enforce
each adjustable rate loan according to its terms. This programs.
includes making accurate changes to the interest rate and A. Individual Loan Files
monthly payment amount and communicating these
The Servicer must maintain an individual file for each
changes on a timely basis to the borrower and to the
loan it services for the Buyer. The file must include any
Buyer on the ARM Adjustments Report (WAMU 4013).
papers or records which are required to service the loan
This also includes accurate calculation of the net rate to
properly and any documents which attest to the validity
the Buyer following each adjustment date.
of the loan.
For complete details on the requirements for each
The file should include, but is not limited to, these
adjustable rate mortgage program, refer to the Seller’s
documents:
Guide and all applicable program announcements.
1. All credit file documentation (FNMA forms
103.02 Maintenance, Custody and referenced as industry standard, however, forms
Ownership of Loan Files equivalent to FNMA’s may be substituted):
For all loans sold to the Buyer, the Seller will have sent • Underwriting Approval Certificate (WAMU
to the appropriate Custodian the following original 2010) or the pool insurance certificate from a
documents within 120 days of purchase: Buyer approved pool insurer. Refer to
Appendix D of the Seller Guide for a list of
• Original note evidencing the obligation of the approved pool insurers.
borrower, or a lost note affidavit accompanied by a
• Transmittal Summary (FNMA 1008)
certified copy of the lost note and an agreement by
the Servicer to indemnify and hold the Buyer • Uniform Residential Loan Application (FNMA
harmless from any loss (including reasonable 1003) typewritten (signed and dated by the
attorney’s fees) suffered by the Buyer due to the borrower if loan is closed)
lack of the original note • Statement of Assets and Liabilities (FNMA
1003A) typewritten, if applicable
• Original recorded security instrument and all
applicable riders or a fully recorded legible • Original handwritten Uniform Residential Loan
reproduction thereof originally certified to by the Application (FNMA 1003) signed and dated by
applicable recording office the borrower
• Original recorded assignment of the security • Complete mortgage payment history
instrument or a fully recorded legible reproduction • Verification of payment history on previous
thereof originally certified to by the applicable mortgage, if applicable
recording office • Verification of rent, or copies of 6 month’s
• Original recorded intervening assignment(s), if canceled rent payment checks (front and back),
applicable or a fully recorded legible reproduction if applicable
• Residential Mortgage Credit Report

Servicing Guide: Loan Administration 103-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 103. Administrative Responsibilities
• Verification(s) of Deposit (FNMA 1006) • Original color photographs of the front view of
• Verification(s) of Employment (FNMA 1005) each property used as a comparable
• Verification(s) of Previous Employment • Single-Family Comparable Rent Schedule
(FNMA 1005), if applicable (FNMA 1007) or Operating Income Statement
• Copy of most recent YTD paystub(s), if (FNMA 216), for two-family properties, if
applicable applicable
• Copies of W2s for the last 2 years, if applicable • Copy of the canceled earnest money check
(front and back), if applicable
• Copies of signed personal Federal Income Tax
Returns (1040s) for last two years with all • Any other data - as an attachment or addendum
supporting schedules, if applicable to the appraisal report form - necessary to
provide an adequately supported estimate of
• Self-employed Income Analysis (FNMA 1084) market value
for self-employed borrowers, if applicable
• Borrower’s Certification and Authorization
• Year-to-Date Profit and Loss Statement and a Letter (WAMU 2006, or FNMA equivalent)
balance sheet if more than three months have
passed since the end of the last tax year, if 2. All closed loan documentation (FNMA forms
applicable referenced as industry standard, however, forms
• Business Credit Report, if applicable equivalent to FNMA’s may be substituted):
• All applicable signed tax returns for self- • Mortgage Submission Voucher (WAMU 2001)
employed borrowers or commissioned completed in full
employees including, but not limited to, 1040s • Bailee Letter/Trust Receipt, if applicable
with all schedules, K-1s, partnership returns and • Underwriting Approval Certificate (WAMU
corporate returns 2010), original copy which was returned to the
• Agreement of Sale, Sales Contract, or Purchase Seller after underwriting, or the pool insurance
and Sales Agreement, and Escrow Instructions, certificate from a Buyer approved pool insurer.
including amendments Refer to Appendix D of the Seller Guide for a
• Certification of Completion and Value, either as list of Buyer approved pool insurers.
a letter or as a form which provides the • Evidence that all underwriting conditions of
necessary information, if applicable loan approval have been satisfied, if any existed
• Uniform Residential Appraisal Report (FNMA (original and one copy of each condition is
1004) or Appraisal Report - Individual required)
Condominium or PUD Unit (FNMA 1073) or • Copy of the note and any applicable
Appraisal Report - Small Residential Income riders/addenda
Property (FNMA 1025) • Copy of any assumption, modification,
• Recertification of Appraisal Report, if consolidation, extension or substitution
applicable agreements, including any modification
• Certification and Statement of Limiting agreement converting an adjustable rate
Conditions (FNMA 1004B) mortgage to a fixed rate mortgage, if applicable
• A street map showing the location of the subject • Copy of the security instrument and any
property and of all comparables used required riders/addenda
• An exterior building sketch of the • Copy of the assignment of the security
improvements indicating the dimensions. A instrument and intervening assignment(s), if
floor plan sketch is not required unless the floor applicable
plan is functionally obsolete, resulting in a • Copy of the title insurance policy
limited market appeal for the property in • Signed copy of the original ARM disclosure, if
comparison to competitive properties in the applicable
neighborhood. For units in condominium or
• Certified copy of the signed Settlement
cooperative projects, interior perimeter unit
Statement (HUD-I) or, in escrow states, the
dimensions are required instead of exterior
Escrow Agent’s Estimated Settlement
building dimensions
Statement which is executed by the borrower
• Original color photographs of the front, street, and certified as a true and correct copy of the
and rear views of the subject property original

103-2 Servicing Guide: Loan Administration


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 103. Administrative Responsibilities
• The original survey/plat drawing. (If not These records should be maintained for six (6) years
customary, an endorsement to the title policy after the loan has liquidated.
insuring against circumstances which would Upon the Buyer’s written request, the Servicer must
have been shown on a survey is required.) If an immediately deliver all mortgage records and documents
approved Master Title Policy is used with this to the Buyer or the Buyer’s designee. This delivery must
endorsement, no survey will be required be accompanied by a list identifying each loan by its
• Signed, certified copy of the original Good Buyer loan number. The Buyer will not be required to
Faith Estimate of closing costs execute trust receipts or to participate in the delivery of
• Signed, certified copy of the original Truth-in- the records and documents. If the Servicer has
Lending, Right of Rescission statement microfilmed or otherwise condensed any of the mortgage
• Original mortgage insurance certificate and records and documents, the Servicer must promptly
endorsements, signed by the Seller, if applicable reproduce any or all such mortgage records at no cost to
the Buyer, or it’s designee or assignee, upon request.
• Original recorded power of attorney or certified
true and correct copy of the power of attorney, B. Microfilmed Records
if applicable
In lieu of retaining copies and originals as required
• Copy of the temporary buydown schedule, if above, the Servicer may maintain its loan files in the
applicable form of microfilm, microfiche or magnetic media,
3. Documentation showing when and by whom the provided that the following requirements are met:
loan was approved and the terms and conditions of
such approval. 1. The copies or magnetic media are made in the
regular course of business pursuant to an established
4. Documentation showing the date, amount, purpose, written policy of the Servicer applying to all of its
and recipient of every disbursement of the proceeds loan files:
of such loan, whether such disbursements are made 2. The copies or magnetic media are made by a process
directly by the Servicer or through escrows or other that accurately reproduces or forms a durable
persons or concerns. medium for reproducing the original;
5. Documentation covering all modifications of the 3. The copies or magnetic media are clearly marked to
original mortgage contract and showing the indicate the Buyer’s ownership of the loan and the
appropriate approval of each such modification. Buyer loan number assigned to it;
6. Documentation covering all releases of any portion 4. The Servicer maintains the copies or magnetic
of the collateral supporting the loan, showing: the media in a manner that permits ready transfer to
part of the premises involved; the consideration, if legible hard copies of the material relating to the
any, to such institution; and a record of appropriate loans serviced for the Buyer;
approval of each such release. 5. A reader/copier that can be used by the Buyer
7. Water or irrigation company stock certificates. representatives is maintained in the same office
where the copies are stored; and
8. Ledger sheets. 6. The Servicer makes back-up copies and retains them
9. Payment records. off-site to protect against fire and other hazard
losses.
10. Insurance claim files and correspondence.
The Servicer must bear the entire cost of restoring loan
11. Collection, Foreclosure/REO files and
files and related documents transferred to microfilm,
correspondence.
microfiche or magnetic media if the copies or magnetic
12. Current and historical computerized data files, media becomes damaged or lost for any reason, or if
whether generated by the Servicer or by a service legible hard copies are requested by the Buyer.
bureau.
C. Mortgage Account Records
13. Originals or copies of all disclosures required by
state and federal law and regulation. Permanent mortgage account records, trackable by the
assigned Buyer loan number, must be maintained for
All loan papers and documents necessary to document or each loan. The Buyer does not specify the particular
properly service any of the Buyer’s loans will remain the system or forms to be used for the mortgage account
Buyer’s property or the property of the Buyer’s designee records, but requires the system be capable of producing,
or assignee at all times. Records in the Servicer’s at any time for any Buyer loan, an account transcript
possession are retained in a custodial capacity only. itemizing the following sequence:

Servicing Guide: Loan Administration 103-3


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 103. Administrative Responsibilities
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.

103-4 Servicing Guide: Loan Administration


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 103. Administrative Responsibilities
This page left intentionally blank.

Servicing Guide: Loan Administration 103-5


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 201. Loan Servicing
201.01 Servicing Overview • All additional principal and interest collected in
the previous calendar month representing
This section briefly outlines the Servicer’s exception activity (e.g., liquidations of any type
responsibilities when servicing loans for the Buyer. For or partial prepayments of principal) as reported
full instructions on servicing and loan accounting, refer to the Buyer via the accounting report.
to the appropriate sections of this Guide. For a full
discussion on selling loans to the Buyer, refer to Section • Collection of unscheduled principal must be
503 of the Seller’s Guide. The use of the Buyer’s forms properly applied to the outstanding mortgage
will also be explained in those sections and detailed loan principal balance or the related mortgage
instructions are included on some forms. loan may not properly amortize. Servicers must
1. The Servicer must service the loans according to calculate and apply a curtailment ensure that the
industry standards, the terms of the mortgage note unpaid principal balance of the mortgage loans
and security instrument and applicable state and properly amortizes.
federal law and regulation.
5. The Servicer must notify the Buyer of the status of
2. Payments must be collected and applied according all loans 90 days or more delinquent. Information
to the amortization schedule and the escrow regarding such mortgage loans must be provided by
requirements of each loan. Application of partial the Servicer to the Buyer electronically, no later
payments is not allowed unless a pre-approved relief than the fifth (5th) business day of the month.
plan is involved. Generally, the Buyer purchases
only interest-in-arrears loans, repayable in equal 6. The Servicer must provide the Buyer with
monthly payments, except for the last payment, responses to all delinquency, foreclosure
based on a 30-day month/360-day year, reducing the bankruptcy and REO exception reports via
principal balance to zero at the end of the term. Any electronic format no later than the tenth (10th)
form of capitalization is not allowed under the business day of the month.
Buyer’s purchase programs.
7. The Servicer must ensure that each property
3. The Servicer must establish and maintain separate securing a loan is covered by a hazard insurance
custodial accounts for (i) principal and interest (the policy at all times.
“P&I Custodial Account”), and (ii) taxes and
insurance (the “T&I Custodial Account”). Unless 8. The Servicer must maintain tax records and forward
otherwise approved in writing by the Buyer, the timely tax payments to the respective taxing
funds in these accounts must be kept separate from authorities, if applicable.
the Servicer’s general assets. The Servicer’s records 9. The Servicer must maintain records of all loans
must clearly show the respective interests of the which carry primary mortgage insurance and flood
Servicer and the Buyer in all accounts and of each insurance. It must also ensure timely payment of the
individual borrower in the tax and insurance premiums for these insurance coverages.
accounts.
10. The Servicer is obligated to advance principal and
4. The accounting period cutoff date is the calendar interest funds if a loan becomes delinquent, escrow
month-end, and the Servicer must submit accounting funds if there is an escrow shortage, and funds for
reports no later than the fifth (5th) business day of emergency repairs, as necessary.
the following month. The remittance withdrawal is
11. When a reasonable effort to cure a defaulted loan is
originated by the Buyer via the Automated Clearing
unsuccessful, the Servicer must recommend
House (ACH) network on the 20th calendar day of
each month or on the preceding business day. The liquidation under accepted servicing procedures.
Liquidation may be accomplished by foreclosing
monthly withdrawal by the Buyer will include:
on the property, by accepting a deed-in-lieu of
• All scheduled principal and interest payments foreclosure, or through a preforeclosure sale. The
due the first day of the current month. Buyer must be provided with written notification
Delinquent payments are included even if they for all loans in which the Servicer initiates a
have not been collected from the borrower. foreclosure referral. Principal and interest
Prepaid payments are not included until they are advances must continue through foreclosure and
due. 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

Servicing Guide: Loan Servicing 201-1


(Rev. 05/16/08)
Section 201. Loan Servicing
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.

201-2 Servicing Guide: Loan Servicing


(Rev. 05/16/08)
Section 201. Loan Servicing

This page left intentionally blank.

Servicing Guide: Loan Servicing 201-3


(Rev. 05/16/08)
Section 202. Tax and Insurance Escrows
202.01 Borrower’s Escrow Account If the Servicer waives the right to collect escrows, the
Buyer’s right to enforce the requirement if the borrower
A. Establishing the Account fails to act responsibly must be retained. For specific
details on waiving primary mortgage insurance, refer to
When consistent with the Servicer’s normal servicing
Section 203.04 A.
practices and not prohibited by law, the Servicer must
establish an escrow account into which the borrower C. Non-Escrowed Loans
deposits monthly amounts sufficient to pay estimated
If the Servicer does not collect escrow funds on a
mortgage and hazard insurance premiums, including
mortgage loan, the Servicer must require proof of
renewal premiums, taxes, ground rents, special
payments of all taxes, ground rents, assessments,
assessments, premiums for mortgage life or disability
insurance or other charges, or use other means
insurance and other charges as they become due. These
commonly used in the mortgage industry to satisfy itself
items will then be paid from this account.
that such items are paid on a timely basis. The
If the Servicer collects and disburses additional funds for Servicer’s Errors and Omission Policy must also insure
the payment of other insurance premiums, such as life, the Servicer in the event losses are incurred if taxes or
major medical, disability, mortgage cancellation, or other insurance premiums are not paid when due. The
assessments which the Buyer does not require as part of Servicer must notify the Buyer immediately of any item
the borrower’s monthly installment, the Servicer must not paid on a timely basis and recommend to the Buyer a
ensure: course of action under such circumstances. The Buyer
• The borrower’s monthly installment payment is not retains the right to enforce the tax and insurance reserve
returned if the borrower fails to remit the additional requirements if the borrower fails to act responsibly.
funds. D. Escrow Advances
• Funds from the borrower’s escrow account are not When funds held in an escrow account are insufficient to
used to make up any shortages caused by the pay taxes, assessments, ground rents, or other charges
borrower’s failure to pay the additional funds. which are or may become a lien on the mortgaged
• The borrower’s monthly billing or coupon property, primary mortgage insurance premiums, hazard
distinguishes between the amount of the monthly insurance premiums, water or irrigation company stock
installment required by the Buyer and the amount of assessments or charges, the Servicer must advance its
the additional funds. own funds to the individual borrower’s account. The
• Funds paid by the Servicer are not capitalized. Servicer must disburse the necessary funds from the
The Servicer is solely responsible for the administration borrower’s escrow account even if the disbursement
of the borrower’s escrow account. causes a deficit balance for the individual borrower.

B. Maintaining the Escrow Account E. Responsibility for Paying Interest


The Servicer must promptly pay all bills for escrow The Servicer is responsible for paying any interest on the
items. The Servicer holds the Buyer, its successors and borrower’s escrow account as required by state law. The
assigns, harmless from all penalties, losses, or damages Buyer will not reimburse the Servicer for any interest or
resulting from the Servicer’s failure to fulfill this earnings paid to the borrower or credited to the
responsibility. borrower’s account.

For any mortgage loan which has amortized down so that F. Analysis of the Account
the LTV is 80% or less, the Servicer may waive the If an escrow account is established, the Servicer must
borrower’s future obligation to deposit amounts in the determine the amount of the monthly deposit to be
tax and insurance reserve provided: made by the borrower and provide him or her with an
• The unpaid principal balance of the note divided by analysis of this account at least annually. If a surplus
the lesser of the original appraised value of the exists in a borrower’s escrow account, such excess may
property or the sales price is 80% or less; be taken into consideration in fixing the amount to be
collected for the account for the following year or a
• The mortgage is at least 12 months old; and
refund to the borrower may be made if the loan is
• The mortgage has not been more than 30 days current. If the surplus is sufficient or is supplemented by
delinquent during the preceding 12 months. 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.
Servicing Guide: Loan Servicing 202-1
(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 202. Tax and Insurance Escrows
The Servicer may retain a surplus in the borrower’s been paid by the borrower and, if not, should require the
escrow account to the extent permitted by the loan borrower to make the payment. If the borrower does not
documents and all applicable laws. An average escrow make the payment, however, the Servicer must advance
balance must be reflected on the annual analysis and the necessary funds and may create an escrow
provided to the borrower upon request. requirement for future installments. In the event a stock
certificate is lost, the Servicer must take whatever action
G. Annual Statement to the Borrower is necessary to obtain a replacement certificate. All fees
At the end of the calendar year, the Servicer must send and expenses will be the sole responsibility of the
the borrower an annual statement of the borrower’s Servicer.
account, including the following:
202.04 Insurance Reserves
• The balance of the escrow account at the beginning
of the year, If the borrower fails to maintain the required hazard
• The total amount deposited into the escrow account insurance coverage, the Servicer must obtain the required
by the borrower during the year, coverage and must cause the policy to remain in force as
• The total amount applied to the principal, long as the Servicer services the loan.
• The total amount applied to interest, If the Servicer acted as a broker or agent in placing
• The amount and nature of disbursements made insurance coverage not required by the Buyer, the Buyer
during the year (including all taxes paid on the will not be responsible for any attorney’s fees and costs
borrower’s behalf), and; resulting from disputes with carriers of such insurance.
• 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
202-2 Servicing Guide: Loan Servicing
(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 202. Tax and Insurance Escrows
This page left intentionally blank.

Servicing Guide: Loan Servicing 202-3


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 203. Insurance Requirements
203.01 General The Servicer must possess a specimen of each policy and
endorsement for which a certificate or other evidence of
The Servicer must verify that the following insurance insurance is maintained in lieu of the policy or
coverages are in place at all times for each mortgage: endorsement.
• Hazard, flood, condominium and PUD insurance in
accordance with the terms of this Servicing Guide. B. Indemnity of Washington Mutual
• Primary mortgage insurance in accordance with this Mortgage Securities Corp.
Servicing Guide and, if applicable, the Seller’s In addition to all other remedies of the Buyer provided
Guide. for in the Selling and Servicing Contract and this
• Title insurance in accordance with the requirements Servicing Guide, the Servicer will indemnify the Buyer
of Section 501 of the Seller’s Guide. for any loss the Buyer sustains on the property.
All claims arising under such insurance coverage must
be settled or otherwise disposed of by the Servicer, and C. Insurance Charges
all such insurance must be maintained at no expense to Premiums for insurance covering the property will be
the Buyer. paid when due by borrowers or the Servicer if the
Servicer collects escrow funds for such purposes.
A. Evidence of Insurance Premiums for insurance obtained by a PUD or
For each mortgage, the Servicer must maintain the condominium owners association for the benefit of the
following documentation: PUD or condominium project will be paid by the
association as a common expense assessable to all unit
1. For one- to four-family dwellings, an original of the
owners.
hazard insurance policy, flood insurance policy (if
applicable), and any related endorsement(s).
D. Changes in Insurance Requirements
2. For properties covered under a blanket PUD or
condominium association policy, an original of the The Servicer must require the borrower to obtain
blanket policy, any flood insurance policy, and any appropriate insurance coverage in accordance with the
related endorsement(s). terms of the security instrument when either of the
following conditions exists:
In lieu of a policy, the Servicer may maintain a
certificate or other evidence of insurance showing at 1. The Servicer becomes aware that existing coverage
least the following information: does not adequately protect the property; or
1. Name of insured and mortgagee (name of insured 2. The area where the property is located was not
owners’ association, unit owner, and unit owner subject to flood insurance requirements at inception
mortgagee if a PUD or condominium unit); of the mortgage or when the Buyer purchased the
mortgage, but has now been classified as a Special
2. Address of mortgaged property;
Flood Hazard Area and the Servicer has become
3. Type, amount and effective dates of coverage; aware of such classification.
4. Deductible amount;
The Servicer must verify that adequate coverage has
5. Any endorsement or optional coverage obtained and
been obtained and remains in force. If the borrower does
made part of the original policy;
not obtain such coverage, the Servicer must do so. The
6. Insurer’s agreement to provide at least ten (10) days’ Servicer will then adjust the borrower’s escrow
prior notice to the mortgagee (or applicable unit payments accordingly or bill the borrower to recover the
owner mortgagee if for a PUD or condominium advance if the Servicer does not maintain an escrow
unit) before any reduction in coverage or account for the borrower. If the borrower refuses to
cancellation of the policy; and reimburse the Servicer, the Servicer may recommend
7. Signature of an authorized representative of the acceleration to the Buyer for the borrower’s default
insurer, if required by law. under the terms of the security instrument.
The Policy Declarations page of a National Flood If the additional coverage cannot be obtained, the
Insurance Program (NFIP) policy is acceptable evidence Servicer must immediately make appropriate
of flood insurance. recommendations to the Buyer.

Servicing Guide: Loan Servicing 203-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 203. Insurance Requirements
The Servicer may authorize the borrower to discontinue by the Buyer exceeds $5,000, and ii) damage to common
flood insurance coverage upon verification of map areas and related facilities exceeds $10,000. For PUD
revision or receipt of a Letter of Map Amendment from projects, the owners’ association must agree in writing to
the Federal Emergency Management Agency (FEMA). notify the Servicer whenever damage to common areas
or related facilities exceeds $10,000.
E. Insurance Loss Settlements
Upon notification of loss or damage to the property, the G. Natural Disaster Losses
Servicer will monitor and coordinate the claim process When a natural disaster (earthquake, flood, tornado, etc.)
with the borrower and the insurer. The Servicer must results in losses or damages to the property, the Servicer
take appropriate action to: must promptly:
1. Verify the extent of the loss or damage; • Ascertain the number of such properties;
2. Ensure judicious disbursement of insurance • Determine the extent of the losses or damages;
proceeds for the necessary repairs;
• Secure any abandoned property against vandalism or
3. Protect the priority of the security instrument by
the elements;
obtaining waivers of materialsman’s or mechanic’s
liens; • Assist the affected borrowers in filing for any
disaster relief aid available;
4. Have a system for the control and disposition of
insurance loss drafts, clearly identifying the • Assist the affected borrowers through counseling
individual borrower’s account through the T&I and any appropriate repayment plan; and
Custodial Account. (The Buyer must not be named • Notify the Buyer and make appropriate
as a payee on any insurance loss draft. The Servicer recommendations.
must be named on all drafts in excess of $1,000.) If the disaster results in uninsured losses, the Servicer
5. Obtain appropriate borrower affidavit reflecting must forward a complete report of the findings to the
their satisfaction with the quality of the repair work; Buyer and recommend a course of action to protect the
6. Document completion of the repairs; and interests of the Buyer and the borrower. The Servicer is
7. Loss draft funds received must be held in a custodial authorized to expend up to $2,500 for emergency repairs
account (passbook accounts are not acceptable). as specified in Section 204.02.
The Servicer must be named as loss payee on insurance
drafts in excess of $1,000 and must comply with any
203.02 Hazard Insurance
applicable law and, where applicable, any requirement of
the mortgage insurer. Details concerning the loss or A. Amount of Coverage
damage and disposition of the insurance proceeds must For one- to four-family residences and individual PUD
be recorded in the loan file. The Servicer must obtain the units, the amount of hazard insurance coverage must at
Buyer's approval for use of any outsourcing firm or least equal the lesser of:
vendor for the purpose of hazard insurance claims review 1. 100% of the insurance value of the improvements,
and settlement. or
The Servicer need not submit a report and related 2. The unpaid principal balance of the mortgage
recommendations to the Buyer unless: provided it equals the minimum amount required to
• The security instrument is in foreclosure or the compensate for damage or loss on a replacement
property has been acquired by the Servicer through cost basis. If it does not, then coverage which
foreclosure or deed-in-lieu of foreclosure; provides the minimum required amount must be
• Property damage exceeds $5,000 and the loan is 60 obtained.
or more days delinquent; Coverage for condominium and PUD projects must be
• The property has suffered a total or near total loss; 100% of current replacement cost for the project’s
• The Servicer wishes to apply insurance proceeds to facilities, including the individual units in a
the mortgage instead of repairing the property; or condominium project or in a PUD project where the
• Insurance proceeds exceed the amounts required to blanket policy covers the individual units.
restore the property to its original condition. The insurance coverage may not be less, however, than
the minimum amount required under the terms of
F. Notice of Loss-Condominiums and PUDs coverage to fully compensate for any damage or loss on
The owners’ association of a condominium project must a replacement cost basis.
agree in writing to notify the Servicer whenever i)
damage to a single unit covered by a mortgage purchased
203-2 Servicing Guide: Loan Servicing
(Rev. 8/03)
(Last reviewed 05/16/08)
Section 203. Insurance Requirements
The Servicer must ensure that the property must also be A. Amount of Coverage
adequately covered even when vacant and, where
necessary, must obtain a vacancy permit endorsement. The amount of flood insurance required on all property
types is:
B. Deductible Amounts 1. The lower of the minimum amount required to
Unless a higher maximum amount is required by state compensate for any damage or loss on a current
law, the maximum deductible must be: replacement cost basis (or the unpaid principal
balance of the mortgage if replacement cost
1. For one- to two-family residences and individual coverage is not available), or
PUD units: $1,000 or 1% of the policy face amount,
whichever is less. 2. The maximum insurance available under the
appropriate National Flood Insurance
2. For PUD common areas and condominium projects: Administration.
$10,000 or 1% of the policy face amount, whichever
is less. If the policy is a blanket policy which also B. Deductible Amounts
covers the individual PUD units, the deductible
related to the individual units should be $1,000 or For all property types, unless a higher maximum amount
1% of the unit’s replacement cost, whichever is less. is required by state law, the deductible may not exceed
$1,000 or 1% of the policy face amount, whichever is
The deductible may apply to either fire or extended less.
coverage or to both. For condominium and PUD
projects, funds to cover the deductible amounts should For condominium and PUD common areas and each
be included in the homeowners’ association operating building in a high-rise or vertical condominium project,
reserve account. the deductible may not exceed $5,000 or 1% of the
policy face amount, whichever is less. Funds to cover
C. Carrier the deductible amount should be included in the
homeowners’ association operating reserve account.
The policy must be underwritten by a company currently
rated B/II or better in Best’s Insurance Reports or the C. Condominiums
coverage must be underwritten by Lloyd’s of London. In
addition, the company must be licensed to do business in If the property is a condominium and flood insurance is
the state in which the property is located. required, the borrower must obtain flood insurance on
the individual unit in addition to the insurance which
D. Mortgagee Clause must be maintained by the homeowners’ association as
part of the project’s blanket flood insurance policy. The
The Servicer’s name must appear in the mortgagee only permissible exceptions to this coverage requirement
clause of the hazard insurance policy followed by the
are:
phrase, “its successors or assigns.” Washington Mutual
Mortgage Securities Corp. should not appear as 1. Three (3) story condominium projects with five (5)
mortgagee unless the policy coverage would be or more units where the condominium is
impaired. participating in the Condominium Master Policy
program which became available on January 1,
203.03 Flood Insurance 1989, and is offered by the NFIP. Under this policy,
the entire building is covered under one policy,
Flood insurance is required at all times for any property including all units within the building and
located in a Special Flood Hazard Area which has improvements and betterments within the units
federally mandated flood insurance purchase which are owned in common.
requirements. Properties located in Special Flood Under the “Condominium Master Policy” program,
Hazard Areas designated by symbols A, AE, A1-30, AH, the maximum amount of building coverage which
AO, A99, V, VE and V1-30 require flood insurance. can be purchased is the actual cash value of the
Flood insurance requirements may be waived if i) the building or the total number of units (residential plus
improvements are not in a Special Flood Hazard Area non-residential) in the building times $185,000,
even though part of the property (the land) may be, and whichever is less.
ii) a letter from the Federal Emergency Management 2. The homeowners’ association has insurance
Agency (FEMA) is provided stating the maps have been coverage on the actual cash value of the building
amended so that the property is no longer in a Special which would sufficiently cover each unit’s market
Flood Hazard Area. value along with all common areas within the
complex in the event of a flood.

Servicing Guide: Loan Servicing 203-3


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 203. Insurance Requirements
obtained by the Servicer at its own expense to conform
NOTE: Many insuring agents and/or homeowners’ with the original requirements. The Servicer must send
associations will insist they are providing the Buyer evidence of this replacement coverage.
sufficient coverage. Even if the project is If an insured adjustable rate mortgage is converted to a
insured under the new “Condominium Master fixed rate mortgage, the Servicer must ensure the
Policy”, the Servicer must obtain a copy of the appropriate mortgage insurance coverage is maintained.
Declaration page of the condominium The Servicer must notify the mortgage insurer of the
project’s flood insurance policy to determine conversion of any uninsured loan, must obtain any
that the policy amount is sufficient to cover the amendment needed to convert from ARM coverage to
market value of all units and common areas. fixed rate coverage, and must send this amendment to the
If the coverage is not sufficient, the borrower Buyer. If cancellation occurs due to Servicer error the
must obtain flood insurance on the individual Buyer reserves the right to request repurchase of the
unit in addition to the insurance maintained by loan.
the homeowners’ association. A. Cancellation of Primary Mortgage
D. PUDs and Townhomes Insurance
If the property is in a PUD or is a townhome and flood The Buyer will consider cancellation of primary
insurance is required, the borrower must maintain mortgage insurance on a case-by-case basis. Approval is
flood insurance on the individual unit unless there are in the sole discretion of the Buyer, is not automatic and
improved common areas such as a clubhouse, tennis will be subject to the applicable State's specific laws and
courts or pools, in which case, flood insurance must be regulations. The following documentation is required:
maintained by the homeowners’ association in addition • Loan history verifying that no payment has been:
to the borrower’s individual unit coverage. If the PUD
or townhome project has only improved or limited • 30 days or more past due in the last 12 months;
common areas such as sidewalks, greenbelts or parking and
lots, the homeowners’ association will not be required to • 60 days or more past due in the last 24 months.
maintain a flood insurance policy in addition to the
borrower’s individual unit policy. • Copy of the original or current appraisal. Use of
current appraisal must be approved by Buyer.
E. Mortgagee Clause • If the appraisal is the original, the Servicer will
The Servicer’s name must appear in the mortgagee warrant that the current value is at least equal to
clause of the flood insurance policy followed by the the appraised value.
phrase, “its successors or assigns.” Washington Mutual • A new appraisal must be based on an inspection
Mortgage Securities Corp. should not appear as of both the interior and exterior of the Property.
mortgagee unless the policy coverage would be Servicer will warrant that it has reviewed the
impaired. appraisal and is satisfied that the opinion of
value is both reasonable and adequately
203.04 Mortgage Insurance supported by market data.
The Servicer must maintain the primary mortgage • The Servicer may charge the borrower for the
insurance coverage which was required for each loan at cost of a new appraisal.
the time it was initially underwritten and approved for • Evidence of seasoning. Evidence of two years of
sale to the Buyer. The current mortgage insurance seasoning is required.
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 203.05 Condominium Insurance
to current pool criteria, required coverage may vary. Prior to the sale to the Buyer of a loan secured by a unit
Primary mortgage insurance must be obtained from in a condominium, the Servicer must obtain written
companies maintaining at least a AA rating from evidence that the scope and amount of insurance
Standard and Poor’s Corporation. When mortgage coverage meets or exceeds all local laws, ordinances and
insurance is required, the Servicer must ensure the regulations covering condominiums and that, in addition,
mortgage insurer meets the Buyer’s criteria. the following minimum requirements for insurance
coverage are satisfied:
If the Servicer does not maintain the required amount of
insurance coverage, replacement coverage must be

203-4 Servicing Guide: Loan Servicing


(Rev. 8/03)
(Last reviewed 05/16/08)
Section 203. Insurance Requirements
A. Scope of Coverage managers, trustees, employees or volunteers responsible
for handling funds belonging to or administered by the
A multiperil type of policy is required covering the entire condominium owners association. The fidelity bond or
condominium project. The policy must provide, at a insurance must name the condominium owners’
minimum, fire and extended coverage and all other association as the insured. The coverage must equal the
coverage in the kinds and amounts commonly required maximum amount of funds held by the homeowners’
by private institutional mortgage investors for projects association at any one time and must total at least three
similar in construction, location and use. Coverage must (3) months of assessments on the entire project, plus
be on a replacement cost basis for at least 100% of the reserves. An appropriate endorsement to the policy to
insurable value based on a replacement cost. cover any persons who serve without compensation must
B. Boiler Explosion Insurance be added if the policy would not otherwise cover
volunteers.
If a steam boiler is operating on the property, boiler
explosion insurance must be in force. This insurance G. Public Liability Insurance
must be evidenced by the standard form of boiler and The condominium owners association must have a
machinery insurance policy and must provide, at a comprehensive policy of public liability insurance
minimum, $100,000, per accident per location. covering all of the common elements, commercial spaces
C. Special Flood Hazard Insurance and public ways in the condominium project. The
insurance policy must contain a severability of interest
If the condominium project is in an area identified by the endorsement precluding the insurer from denying the
Secretary of Housing and Urban Development as having claim of a condominium unit owner because of negligent
special flood hazards, a “blanket” policy of flood acts of the condominium owners association or other
insurance must be maintained on the condominium business unit owners. Coverage must include all other
project in the amount of the aggregate of the outstanding coverage in the kinds and amounts required by private
principal balances of the mortgages on the condominium institutional mortgage investors for projects similar in
units, or the maximum limit of coverage available under construction, location and use. Liability coverage must
the National Flood Insurance Act of 1968, as amended, be for at least $1 million per occurrence for personal
whichever is less. injury and/or property damage.
D. Name of Insured 203.06 PUD Insurance
The name of the insured stated under each required Except as provided in the following sections all coverage
policy must be similar in form and substance to the in the kinds and amounts required for mortgages in this
following: Servicing Guide is also required for mortgages secured
“Association of Owners of the [Name of by Planned Unit Development (PUD) and de minimus
Condominium] for use and benefit of the PUD units.
individual owners” (designated by name, if
required).
A. Blanket Insurance Coverage
In lieu of maintaining an individual hazard insurance
E. Mortgagee Clause policy on each PUD unit, the PUD corporation,
Each policy must contain the standard mortgagee clause homeowners’ association, or trust may maintain blanket
endorsed to provide that any proceeds will be paid to the hazard insurance providing, at a minimum, fire and
Association of Owners of the condominium for the use extended coverage and all other coverage in the kinds
and benefit of mortgagees as their interest may appear, or and amounts commonly required by private institutional
otherwise endorsed to fully protect the interest of the mortgage investors for developments similar in
Buyer. construction, location and use. The coverage must be in
an amount equal to the full replacement value of all of
When a mortgagee clause is not applicable, a certificate the PUD units without deduction for depreciation or
must be obtained by the Servicer. This certificate must coinsurance, including the structural portions and
contain the information required for certificates which is fixtures owned by the PUD unit owners. Insurance
set forth in Section 203.01 A. The certificate must name premiums from any blanket insurance coverage must be
the Servicer as the certificate holder instead of a common expense of the PUD corporation,
mortgagee. homeowners’ association, or trust and be included in the
F. Fidelity Insurance regular common assessments of the PUD unit owners.
The coverage must name the PUD corporation,
The condominium owners association must have fidelity homeowners’ association, or trust as the insured for the
coverage against dishonest acts on the part of directors, benefit of the PUD unit owners.
Servicing Guide: Loan Servicing 203-5
(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 203. Insurance Requirements
B. Common Property Coverage certificate must contain the information required for
certificates that is set forth in Section 203.01 A. The
The PUD corporation, homeowners’ association, or trust certificate must name the Servicer as the certificate
must have fire and extended coverage for at least 100% holder instead of the mortgagee.
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

203-6 Servicing Guide: Loan Servicing


(Rev. 8/03)
(Last reviewed 05/16/08)
Section 203. Insurance Requirements
This page left intentionally blank.

Servicing Guide: Loan Servicing 203-7


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 204. Protecting the Property
It is the Servicer’s responsibility to act in the timeliest, might lower the value of the property, the borrower must
efficient and responsible manner to safeguard the be reminded of the obligation to make such repairs. In
Buyer’s interest in loans being serviced for the Buyer. In addition, when a code violation notice is received, the
addition to promptly paying property taxes to avoid Servicer should immediately contact the borrower and
possible tax liens and maintaining adequate insurance to make arrangements for repairs necessary to fulfill the
cover damage from hazard losses, the Servicer must: code requirements. In either case, the Servicer should
• Make periodic property inspections to forestall document the loan files regarding any contacts with the
undue deterioration which might result from neglect borrower and any arrangements made.
or vandalism, The Servicer must follow up until the repairs are
• Promptly notify the Buyer and undertake completed or the borrower’s refusal or inability to make
appropriate action to offset the effects of a the repairs is established. In the latter case, the Servicer
borrower’s bankruptcy, insolvency or death, should send the Buyer a property inspection with
condemnations or other legal action, and pictures and a recommendation. If emergency repairs
• Follow any other procedures required to protect the are required, the Servicer must make the repairs, subject
Buyer’s rights and the rights of the Buyer’s to the limitations which appear in Section 204.02.
assignees in the mortgage obligation and the
mortgaged property.
B. Vacant or Abandoned Properties
Whenever a mortgaged property is found to be vacant or
204.01 Inspection of Properties abandoned, the Servicer must:
1. Attempt to locate the borrower and determine the
The Servicer must ensure mortgaged properties are
reasons for the abandonment or vacancy.
occupied and are being properly maintained. Under
certain circumstances this will require inspection of the 2. Arrange for the protection of the property from
property. The Servicer must certify, at the end of each vandalism or damage by the elements, including
year that any required inspections were completed in “winterizing” where necessary.
accordance with the guidelines contained herein, and the 3. File the appropriate notice with the mortgage
Servicer must furnish an Officers Certificate to that insurer, if any, as soon as the Servicer has
effect to the Buyer. Said Officers Certificate is to be established, by a thorough investigation, that the
received by the Buyer within 10 business days of the end property has been abandoned by the borrower. Full
of each calendar year. Property inspection schedules and details of the Servicer’s investigation and
related procedures are discussed below. conclusions must be reported immediately on a
property inspection with a recommendation. One
When possible, the Servicer’s inspection should include option available for delinquent loans when the
the interior of the property. All inspections, regardless property has been abandoned may be commencing
of purpose, must be documented in the Property foreclosure. Refer to Section 206 for a full
Inspection Report or equivalent, and be made part of the discussion on foreclosure methods.
individual loan file but need not be forwarded to the 4. Notify the hazard insurance carrier to ensure the
Buyer, except as described below. The costs of property proper endorsement is made so that coverage is
inspections are not reimbursable by the Buyer. maintained.
A. Current Loans C. Delinquent Loans
Property securing a current loan should be inspected Refer to Section 205.01 C for a discussion of property
immediately when the Servicer learns the property may inspection requirements on delinquent loans.
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
204.02 Advances for Emergency
part of a borrower in any of the terms of the loan other Repairs
than delinquency. If an inspection of the property indicates emergency
When an inspection indicates repairs are unnecessary, repairs are required, the Servicer is authorized to spend
minor, or will not cause deterioration, action need not up to $2,500 for each property. Sums in excess of
be taken. However, if the inspection indicates $2,500 for any property require the Buyer’s prior
deterioration is occurring, or repairs of an urgent nature approval.
are required to properly restore the property to a
habitable condition or to correct a condition which

Servicing Guide: Loan Servicing 204-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 204. Protecting the Property
When requesting reimbursement for advances, the The Servicer must ensure that the remaining property
Servicer must submit a property inspection with photos adequately covers the unpaid principal balance and
and a Statement of Expenses Form (WAMU 3001). All accrued interest of the mortgaged loan. The Servicer
invoices and statements must accompany the Statement must prepare all required documentation and deliver
of Expenses. The Servicer must verify the mortgage executed documents to all concerned parties. The
insurer approved all advance expenditures before they Servicer is also responsible for recording any necessary
were incurred whenever such prior approval is required. release documents in order to preserve the priority of the
lien.
204.03 Notice of Liens and Other If a partial release involving over $500 is requested by
Actions the borrower, the Servicer must also submit an
acceptable residential appraisal report indicating the
The Servicer must always diligently act to prevent the
value of the property before and after the release, a
attachment of any liens superior to the lien of the
certified copy of the escrow instructions and a
mortgage and must promptly notify the Buyer whenever
recommendation. The Servicer must comply with the
it receives notice or otherwise becomes aware that any
provisions of the loan.
such lien is claimed. In addition, the Servicer must also
notify the buyer in cases of bankruptcy, condemnation, B. Use of Proceeds
death, probate proceedings, tax sales, partitions, local
ordinance violations, landmark designation proceedings, The Buyer requires the cash consideration paid to be at
or other events affecting any borrowers or mortgaged least equal to the reduction in the value of the mortgaged
properties. 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
204.04 Partial Releases of Property applies to both voluntary and involuntary
Prior approval by the Buyer is required for any partial (condemnation, easements, eminent domain, etc.)
release of property securing a loan serviced hereunder. releases.
A. Request for Partial Release The Buyer may permit the Servicer to reimburse the
borrower for the cost of obtaining the release from any
The request for partial release should contain the proceeds and to pay the borrower for any amount by
following: which the proceeds exceed the reduction in the value of
• Mortgagor’s name and address the mortgaged property.
• Washington Mutual Mortgage Securities Corp. loan The Buyer may permit a partial release without cash
number consideration if the remaining property will be enhanced
• Servicer loan number in value by the release.
• Type of release
C. Advice to Tax Assessors
• Reason for release
• Any necessary legal documents The Servicer should notify the tax collector or assessor
of the release of any portion of a property which will
• Legal description subsequently affect the amount of taxes to be levied
• Plat map outlining the section to be released against a property. If required by local law or practice,
• Recent appraisal indicating the value of the property the Servicer must obtain the consent of any junior lien
before and after the release holder and confirmation by the title insurer that no loss
• Certified copy of escrow instructions in the priority of the lien is incurred.
• Recommendation
• Loan Analysis Form 204.05 Assignments and Recordations
• Written evidence of the mortgage insurer’s approval, of Mortgages
if applicable
The Servicer must complete at its own expense all
When a partial release is requested by the borrower, the assignments, recordations, or related actions necessary to
Servicer must also submit an acceptable residential protect the Buyer’s lien priority, to conform with local
appraisal report indicating the value of the property practice and state law, or to fulfill a request from the
before and after the release, a certified copy of the Buyer. The Servicer should inform the Buyer of any
escrow instructions, a recommendation, and a Loan material changes to these requirements as they occur.
Analysis Form. The Servicer must also comply with the
provisions of the loan.

204-2 Servicing Guide: Loan Servicing


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 204. Protecting the Property
204.06 Property Address Change 6. A transfer into an inter vivos trust in which the
mortgagor is, and remains, the beneficiary and
The Servicer’s records should indicate any change in occupant of the property unless, as a condition
property identification, such as streets renamed or precedent to the transfer, the mortgagor refuses to
renumbered, and the Servicer should obtain any provide the Servicer with reasonable means
necessary insurance endorsements. acceptable to the Servicer by which the Servicer will
204.07 Assumptions, Due-on-Sale be assured of timely notice of any subsequent
transfer of the beneficial interest or change in
The security instrument must contain a due-on-sale occupancy.
clause. However, an assumption may be allowed for the
The Servicer must evaluate the transferee’s credit and
mortgage if a change in ownership occurs and state or
financial capacity according to the current underwriting
federal law prohibits enforcement of the due-on-sale
guidelines set forth in the Seller’s Guide. Once the
clause or the loan is an adjustable rate mortgage (ARM)
Servicer has approved the transferee, the Servicer must
and the transferee meets occupancy and current Buyer
obtain approval from the mortgage insurer before
credit guidelines. If there is a release of liability, the
completing the transfer. It is the Servicer’s
Servicer must also send the complete credit package to
responsibility to ensure all required endorsements of the
the Buyer, including the mortgage insurer’s approval
insurance policies are properly executed so that coverage
before closing the transaction. In all circumstances, the
remains in effect. The Servicer must also prepare all
Servicer may not change the mortgage interest rate, or
required documentation and deliver executed documents
other terms of the note on any loan sold to the Buyer.
to all concerned parties. The Servicer is also responsible
The Servicer is responsible for determining the for recording any assumption/release agreements
assumability of any loan submitted to the Buyer under required in order to preserve the priority of the lien and
the individual mortgage program, enforcing any due-on- providing all notices and disclosures required by law or
sale clauses, and determining the creditworthiness of the regulation.
assumptor/transferee. The Buyer will not permit a change in the maturity date,
In certain situations, the Servicer may not accelerate the interest rate, monthly payment, or if applicable, margin
maturity of the debt upon transfer of the property when specified in the note upon transfer of a property.
the property is occupied by the mortgagor. Those Any fee the Servicer charges in connection with an
situations include: assumption may not exceed the lesser of its customary
1. The creation of a lien or other encumbrance assumption fee or the amount allowed under any
subordinate to the security instrument, which does applicable law or regulation. The Servicer may retain
not relate to a transfer of rights of occupancy in the the entire fee.
property, provided that such lien or encumbrance is
not created pursuant to a contract for deed.
A. Fixed Rate Mortgages
2. The creation of a purchase-money security interest Any conventional fixed rate mortgages owned in whole
for household appliances. or in part by the Buyer must be accelerated upon the
transfer, or prospective transfer, of title to the underlying
3. A transfer by devise, decent or operation of law property if the security instrument has an enforceable
upon the death of a joint tenant or tenant by the due-on-sale clause, except for transfers listed in items 1
entirety. through 6 of Section 204.07. When this situation occurs,
4. The granting of a leasehold interest on the property the Servicer must submit a Foreclosure
with a term of three (3) years or less without an Recommendation/Individual Delinquency Report
option to purchase. (WAMU 3003) stating the situation and the Servicer’s
5. A transfer in which the transferee occupies, or will recommendation of acceleration. Upon receiving the
occupy the property and that is one of the following: Buyer’s approval of such acceleration, the Servicer must
immediately commence foreclosure action.
• A transfer to a relative, resulting from the
mortgagor’s death; If a security instrument does not have a due-on-sale
• a transfer wherein a spouse or a child becomes clause, or a security property is located in a window
an owner of the property; period state and the originating Servicer is subject to
• a transfer resulting from a decree of dissolution window period restrictions, the Buyer will allow a
of a marriage, a legal separation agreement, or mortgage to be assumed at the original note rate by a
from an incidental property settlement by which creditworthy transferee.
the spouse becomes an owner of the property.

Servicing Guide: Loan Servicing 204-3


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 204. Protecting the Property
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.

204-4 Servicing Guide: Loan Servicing


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 204. Protecting the Property
This page left intentionally blank.

Servicing Guide: Loan Servicing 204-5


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 205. Delinquencies
205.01 Servicing Delinquencies 5. If satisfactory response is not obtained, the Servicer
should continue to follow up with notices, letters,
The Servicer’s personnel must be sufficiently skilled in telephone contacts, face-to-face interviews, etc.,
financial counseling and loan servicing techniques to until the loan has been brought current or the
assist borrowers in bringing their loans current and Servicer determines that a notification of foreclosure
protecting their equity and credit rating while protecting action, short sale, deed-in-lieu of foreclosure, or
the interests of the Buyer. The purpose of all collection other loss mitigation action is deemed appropriate to
efforts is to bring the account current in the shortest resolve the delinquency. The Servicer must ensure
period of time. Discussions with the borrower should that attorney referral to initiate foreclosure action be
include a determination of the cause of the delinquency made no later than the 120th day of delinquency, or
and an attempt to obtain a definite commitment from the sooner if required by the mortgage insurer. All
borrower to bring the account current. If the account appropriate default and breach letters must be sent
cannot be brought current immediately and the prior to submitting the recommendation.
borrower’s circumstances and past record justify it, the
The Servicer must maintain delinquency rates on the
Servicer should attempt to cure the delinquency as
Buyer loans at a level below or comparable with the
quickly as possible by employing the relief provisions
industry norm for loans of the same type in the same
discussed in Section 205.02. The Buyer requires that the
geographic area. Excessive Delinquency Notification
Servicer adhere to industry standards as identified by
Letters are issued to Servicers whose overall delinquency
Fannie Mae Delinquency Servicer Guidelines. To the
performance fails to compare satisfactorily with the
extent an issure relative to delinquency, foreclosure,
industry norm. Servicers are required to review and
bankruptcy, loss mitigation or REO servicing is not
respond with a complete explanation for the excessive
specifically addressed within this Servicer Guide, the
delinquency ratio, and provide an outline of the business
matter should be addressed according to the directive(s)
strategy they have adopted to achieve an acceptable
associated with the applicable Fannie Mae guidelines.
percentage. Said response must be received within 10
The Servicer should treat each delinquency individually. business days of the date of the letter.
The collection effort should be based on the Servicer’s
The following sections present detailed servicing
knowledge of the borrower’s credit history, employment
requirements for dealing with delinquencies on loans in
situation, individual circumstances, property and the
which the Buyer has an interest. The Servicer is
extent of the delinquency. The Servicer is expected to
encouraged to employ its own collection procedures to
use notices, letters, telegrams, telephone calls, face-to-
best meet these servicing requirements. These
face contact, and other responsible collection techniques
procedures must be adequate and efficient for dealing
employed by prudent loan servicers. The Servicer is
promptly with delinquencies.
encouraged to vary its collection techniques to fit the
individual circumstances and to avoid establishing a A. New Borrowers
fixed routine which may be ineffective for dealing with Particular attention should be paid to delinquency on the
borrowers who are repeatedly delinquent. The Servicer part of a new borrower. During the first few months of
should recognize that efficient servicing of a delinquent payment, the account should be monitored to assure the
mortgage primarily depends on personal contact, both on development of good paying habits. The reasons for
the telephone and face-to-face, with the borrower. Form delinquency by a new borrower vary and may include
letters and notices, while having a place in any servicing the borrower’s misunderstanding of payment
program, generally are not as effective as personal requirements. The Servicer should make personal
contact and should not be used exclusively. contact with a new borrower by the tenth day of
The following is an example of an adequate servicing delinquency to determine the cause of the delinquency
program during the first 45 days of delinquency: and to emphasize the importance of payment on or
1. Identification of a delinquent loan should be made before the due date.
by the 15th day of delinquency.
2. A late notice should be mailed between the 16th and B. Monthly Servicer Delinquency,
18th day of delinquency. Foreclosure, Bankruptcy and REO
3. Attempts to contact the borrower by telephone Reporting
should commence by the 20th day of delinquency. For each loan which is 90 or more days delinquent that
4. If satisfactory arrangements to bring the account has not been liquidated, the Servicer must fully
current have not been made by approximately the document and submit all collection activities, reasons for
45th day of delinquency, a face-to-face interview nonpayment, actions being taken to cure the default,
with the borrower should be conducted. property inspection results, and all bankruptcy, loss
mitigation, foreclosure and REO activity within an
Servicing Guide: Loan Servicing 205-1
(Rev. 8/28/09)
Section 205. Delinquencies
electronic report format. The data contained within the missing delinquency information. For loans in a
report should be inclusive of, but not limited to the delinquency, foreclosure, bankruptcy and REO status.
following information: reason for delinquency, These requests require review and response by the
repayment plan information, date of attorney referral, Servicer. The Servicer’s detailed response to each loan in
loss mitigation type and status, date of the first legal question must be received within 2 business days.
action, date of judgment entered, date of publication, Failure to comply with the specified time frames
estimated date of foreclosure sale, actual date of identified for either of these required submissions will
foreclosure sale, confirmed sale date, occupancy status, subject the Servicer to a penalty assessment as provided
date of most recent property inspection, condition of for in Section 305.
property, eviction status, bankruptcy chapter and status,
updated appraised value, date of updated appraised
D. Property Inspections
value, brokers price opinion value, date of brokers price The Buyer must be notified of the property inspection
opinion, list price amount, list price date, list price and condition via the Monthly Delinquency Report for
expiration date, and required repairs, offer date, offer all loans 90 or more days delinquent. From then on, the
amount, estimated date of closing, actual date of closing, Servicer must send monthly updates via report on
and estimated loss. Property Inspection necessary to protect the Buyer’s
When a borrower is chronically delinquent and the interest or upon Buyer’s request. For a property located
Servicer has exhausted all reasonable means of inducing in an area with a high incidence of vandalism and
the borrower to pay on time and all loss mitigation neglect, the Servicer should conduct subsequent
efforts have failed, the Servicer must notify the Buyer of inspections at least once every 30 days until the
the commencement of foreclosure action. The delinquency is cured or the loan liquidated.
notification of said action must be submitted to the At the initial inspection, the Servicer should attempt a
Buyer in electronic format and include the foreclosure face-to-face interview with the borrower to establish:
referral date, reason for default, occupancy status, • The reason for delinquency
condition of property, date of last property inspection • Whether the reason is temporary or permanent in
and most current broker’s price opinion if available.. nature
Refer to Section 206 for a full discussion of foreclosure • The attitude of the borrower toward the debt
methods. • The length of time necessary to cure the default
If a borrower has been granted relief provisions for
C. Servicer Penalty Assessments curing a delinquency, property inspections should be
made on a frequent and continuing basis during the
In the event of the assessment of default servicing related period of relief. If an inspection reveals repairs are
penalties to the Servicer as identified in this Section 205, necessary, the Servicer should advance the required
or in any of Sections 206, 207, 305 and (in the case of an funds according to guidelines in Section 204.02. The
Interim Servicer) Section 306, the Buyer shall issue borrower’s relief plan may be modified to spread the
correspondence to said Servicer detailing the reason for repayment of the advance over the period covered by the
the penalty and dollar amount assessed. If the Servicer plan, if the borrower is financially able to assure the
elects to appeal all or a portion of the penalty assessed, additional obligation immediately, or to call for the
the Servicer must submit a written response to the Buyer repayment of the advance at the end of the relief period.
to be received within seven business days of the date of
the Buyer’s correspondence detailing the reason for the E. Abandonment
appeal, the amount being appealed, and the facts
The Servicer should attempt to locate the borrower and
supporting the Servicer’s position. In addition, the
ascertain the reasons for abandonment. The Servicer
Servicer must submit all applicable material evidence
must take all actions necessary to protect the property
such as system documentation, related
from waste, damage, and vandalism. The Servicer must
documents/correspondence and other information as
report the full results of the investigation immediately
required for the Buyers review and determination. The
and make a recommendation regarding the action which
Buyer shall issue a final determination in response to the
should be taken. The Servicer must also notify the
Servicer within 10 business days from the date of receipt
hazard insurance carrier of the vacancy so the proper
of the Servicer’s letter of appeal. Said report must be
th policy amendment may be made to ensure coverage. The
received by the Buyer no later than the 5 business day
Servicer shall provide notification to the Buyer via
of each month and must represent the status of each loan
monthly report.
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

205-2 Servicing Guide: Loan Servicing


(Rev. 8/28/09)
Section 205. Delinquencies
F. Mortgage Insurance Requirements respect to the relief granted. The Servicer is responsible
for collecting any recording or similar costs incidental to
The Servicer should be familiar with and satisfy all the granting of relief from the borrower. When relief is
applicable requirements of the mortgage insurer. The appropriate, the Servicer should determine whether the
Servicer is expected to have adequate controls to assure relief should be one of the following:
timely filing of all notices to the mortgage insurer.
Copies of routine notices sent to the mortgage insurer • A liquidating plan giving the borrower a definite
or the borrower need not be sent to the Buyer unless period in which to reinstate the loan by immediately
specifically requested. Copies of the Notice of commencing payments in excess of the regular
Delinquency must be sent to the Buyer with the monthly installment.
Foreclosure Recommendation/Individual Delinquency • A special forbearance relief agreement reducing or
Report. suspending the regular monthly installments for a
specified period of time.
If the primary mortgage insurance policy was issued by • A military indulgence.
PMI Mortgage Insurance Co., the Servicer must inform
PMI when the loan first becomes delinquent that the A. Liquidating Plan
policy covers a loan purchased by the Buyer.
If appropriate, the Servicer is authorized to enter into a
If any of the Servicer’s actions cause invalidation of a liquidating plan to repay the total delinquency within the
claim, the Servicer will be responsible for the loss, shortest time possible. The repayment period must not
including any primary and pool insurance claims which exceed 12 months from the date of execution of the plan
may be denied. In the alternative, the Servicer may be without the Buyer’s approval. If the Servicer wishes to
required to repurchase the loan. If a loan is covered by aenter into a liquidating plan in which the repayment
pool insurance policy, the Buyer will be responsible for period exceeds 12 months, the Buyer must approve the
the filing of any claim. plan in advance and the plan must be set forth in writing
(with specific amounts and dates, including the year for
G. Use of Temporary Buydown Funds the repayment plan) and must be signed by the Servicer
Any funds remaining in the buydown account of a loan and the borrower. The Servicer must report the terms of
in foreclosure must be disposed of according to the terms any liquidating plan (with specific amounts and dates,
of the buydown agreement. The funds may not be used including the year for the repayment plan) to the Buyer
to reinstate the loan or cure any default of the borrower and send the Buyer a signed copy.
on which the foreclosure proceedings are based.
B. Special Forbearance Relief Agreement
205.02 Borrower Relief Options A special forbearance relief agreement is a written
The Buyer grants Servicers discretion to extend agreement to reduce or suspend regular mortgage
appropriate relief to borrowers who encounter hardship, payments for a forbearance period of up to 12 months.
but are cooperative and have proper regard for their These agreements are rare and usually reserved for
obligations. The Servicer must be readily available to situations beyond the borrower’s control, such as, an
the borrower to offer skilled financial counseling and uninsured medical problem. At the conclusion of this
advice. The Servicer should make personal contact with special forbearance relief period, regular mortgage
a delinquent borrower as often as necessary to achieve a payments must be resumed and satisfactory
solution which will bring the loan current as quickly as arrangements made to repay the amount suspended.
possible. The Servicer must be familiar with all the The Buyer must approve any special forbearance relief
forms of relief discussed in this section and will employ agreement in advance. The Servicer must also obtain
such relief whenever appropriate, rather than any necessary approval from the mortgage insurer before
recommending termination of the loan. However, no executing such an agreement. After approval of the
such relief should be granted to any borrower unless terms, the Servicer must prepare the agreement; have it
there is a reasonable expectation that the relief granted executed by all parties and forward copies of the
will result in bringing the loan current and maintaining it completed agreement to all concerned.
in a current status. If the borrower fails to satisfy the terms of the special
Before granting relief, the Servicer should inspect the forbearance relief agreement, the Servicer must
property and ascertain the reason for the default and that immediately recommend one of the following to the
the attitude and circumstances of the borrower justify the Buyer:
relief action contemplated. The Servicer is responsible • A new forbearance agreement, provided the
for satisfying all applicable mortgage insurance aggregate forbearance period does not exceed 12
requirements and obtaining all necessary approvals with months, or
Servicing Guide: Loan Servicing 205-3
(Rev. 8/28/09)
Section 205. Delinquencies
• Foreclosure or, preferably, acceptance of a deed-in- • Any person authorized to act on behalf of the
lieu of foreclosure. servicemember by power of attorney that the
Approval of a special forbearance plan by the Buyer Servicer has duly verified. A copy of the power of
does not relieve the Servicer from continuing to remit attorney must be maintained in the Mortgage file.
scheduled principal and interest payments. The servicemember or a representative must submit a
written request and copies of the military orders for the
C. Military Indulgence entire time period for which the interest rate cap is
For purpose of this section, a Borrower claiming requested. If the requestor is other than the
entitlement to military relief is referred to as a servicemember, the requestor’s identity and contact
“servicemember”. A servicemember serving on active address must be established and maintained in the
military service, or a Reservist or National Guardsman Mortgage file.
called to active military service may be entitled to
The Servicer is authorized to grant all appropriate relief
benefits under the Servicemembers Civil Relief Act of
to which an eligible borrower is entitled under the Act
1940, as amended (the “Act”), and/or various State relief
and any applicable State relief statutes, but the terms of
statutes which may entitle the servicemember to certain
such relief and related information should be promptly
benefits. The Servicer must be familiar with all
reported to the Buyer within three (3) business days of
requirements of the Act and any State statues and ensure
receipt by the Servicer. If interest rate reduction is
they comply with all requirements. The Act covers the
required, the Servicer must notify the Buyer thereof by
following servicemembers:
submitting to Buyer a written notice detailing the
1. Career members of the United States Navy, Marine relevant facts, together with (a) the written request from
Corps, Army, Air Force, and Coast Guard. the servicemembers or the servicemember’s
2. Members of a reserve component of the armed representative, and (b) a copy of the servicemember’s
services volunteering for or called to active service. orders calling him/her to active duty. The Servicer will
3. Members of the National Guard volunteering for or be required to remit to the Buyer at the original interest
called to active service. rate and P&I and the Servicer will be reimbursed the
Compulsory or Annual Training that Reservists are difference of the original interest rate and the reduced
required to undergo periodically to maintain membership interest rate on a monthly basis. The Servicer will apply
in the reserve components of the armed services or the all P&I payments in accordance with the following
National Guard is not considered active service for calculation method, WMMSC will only reimburse
military relief purposes: Servicers if the following calculation method is used:

1 Interest Rate Cap: The Act caps interest at six (6%) Example of the Act Monthly Interest Rate
percent per year on a servicemember’s Mortgage Differential Credit
obligations. Escrows for insurance, property taxes and This example illustrates the calculation of Servicer
other assessments are not affected and must be paid in monthly interest rate differential credit for a Borrower’s
accordance with contractual terms. The difference payment that was reported by Servicer in January, 2004.
between the contractual rate of interest and six (6%)
percent is forgiven, not deferred. Example Loan Level Detail

2 Eligible Mortgages: a) The Mortgage must be the Unpaid Principal Balance (UPB) of a 30 year Mortgage
contractual obligation of the servicemember as Borrower (as of 01/04 cycle): $50,000
or co-Borrower under the Note or as obligor under a Original Rate: 10.375%
written agreement by which the servicemember assumes Adjusted Interest Rate under the Act: 6.000%
the Borrower’s liability under the Note and the Borrower Loan Status Active
is released from such liability. Monthly remittance (draft) cycle: 20th of the month
P&I $452.70
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
205-4 Servicing Guide: Loan Servicing
(Rev. 8/28/09)
Section 205. Delinquencies
Calculation law.
1. Interest at original rate = UPB X Original Rate / 12 Late Charges: All late charges resulting from Mortgage
= $50,000 X 10.375% / 12 = 432.29 payments deferred, restructured or rate-capped under the
2. Principal applied to loan = P&I – Interest at Original Act or applicable State law must be waived.
Rate Credit Reporting: All servicemembers who are
= $452.70 – 432.29 = $20.41 receiving protection under the Act or applicable state law
3. Interest at the Act Rate = UPB X the Act Rate / 12 must be reported as “paying as agreed” to the credit
= $50,000 X 6% / 12 = $250 repositories.
4. Amount due to servicer (Interest Subsidy) – Interest Documentation: All communications, correspondence,
at Original Rate – Interest at the Act Rate and documentation to or from servicemembers seeking
= $432.29 – 250 = $182.29 Mortgage relief for hardship caused by active service
For this Example, Servicer would receive a wire in the must be maintained.
amounts of $182.29 from the Buyer. 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
If the servicemember’s active military service exceeds identify each such Mortgage to the Transferee before
the timeframe outlined in the original orders provided by transferring the Mortgage files to the Transferee.
the Servicer, the Servicer shall request a copy of the new
orders and shall provide them to the Buyer. 205.03 Advancing Responsibility
Reimbursement will be made for only that portion of The Servicer is obligated to advance its own funds for
time the servicemember is recalled to active duty and is the loans serviced on the Buyer’s behalf. Such advances
supported by the servicemember’s military orders. The are intended to provide a regular flow of funds on the
Servicer should contact the borrower at least semi- loans and to protect the value of the loan and the un-
annually during the period of active military service to derlying property. If an advance for principal and in-
determine the borrower’s current status and the terest or for approved expenses cannot be recovered from
anticipated duration of military service. related borrower payment, liquidation or insurance
D. Forbearance, Relief from Foreclosure payments, the Buyer will reimburse the Servicer,
ensuring that such advances do not become expenses to
Under the Act or State statutes, servicemembers who are the Servicer. It is the Servicer’s responsibility to
serving or have served on active duty may be entitled to continue to advance its own funds until the loan is fully
additional and varied forms of protection from creditors’ liquidated by payment-in-full, foreclosure sale to a third
enforcement of contractual terms. party or the REO disposition sale.
Such protection is usually based on hardship caused by
military service and may remain in effect even after a 205.04 Servicing Bankrupt Accounts
protected servicemember is released from active duty. A
The Servicer must treat all loans of bankrupt borrowers it
court order may be required to activate such protection
services for the Buyer in the same manner it treats loans
or to deny it. This protection may include:
that it owns, unless otherwise indicated in this section.
1. Deferral and/or restructuring of payments The Servicer must always comply with the terms and
2. Restrictions on foreclosure action conditions set forth by the mortgage insurer. The
3. Extension of redemption periods for completed Servicer should act with the advice of legal counsel with
foreclosures a thorough knowledge of bankruptcy law.
The Servicer must be familiar with applicable law as it The Servicer must complete and forward a claim on each
relates to the particular circumstances of a bankruptcy within the time limitation placed by the
servicemember. bankruptcy court and in the manner normal for the
district in which the bankruptcy is filed.
If foreclosure is allowed to proceed and Mortgage
Insurance claim is eventually filed, you must notify the If the borrower wishes to reconfirm the debt, the Servicer
mortgage insurer (MI) that the Mortgage was subject to must proceed with this action immediately and may do
military relief so that: so without the Buyer’s prior approval. The Servicer
must obtain the Buyer’s approval before refusing to
1. Interest for the Act-capped payments due but unpaid reaffirm a debt for any loan which the Buyer owns in
by the servicemember is claimable at the Note rate, whole or in part.
not at the Act-capped rate.
2. Claimable interest will not be curtailed by the (MI) If any loan involved in a bankruptcy becomes
for a delay which was caused solely by the delinquent, the Servicer must report the delinquency and
Servicers’ compliance with applicable military relief bankruptcy information as provided in Section 205.01 B.
Servicing Guide: Loan Servicing 205-5
(Rev. 8/28/09)
Section 205. Delinquencies
The following information should be included in the If no acceptable arrangement or action occurs within 30
report: case number, date of filing, confirmation hearing days of the demand letter, the Servicer must immediately
date, 1st meeting of the creditors, confirmation of the seek relief from the automatic stay. If the loan is in
plan, pre and post petition due dates, motion for relief foreclosure at the time of filing of the bankruptcy action,
filed, consent order enters, bk type, and the Servicer must immediately seek relief from the
discharge/dismissal date. If the loan is not delinquent automatic stay and must report the status of the loan as
and does not become delinquent during the term of the provided in Section 205.01B. If the loan is not in
bankruptcy, it is not necessary to notify the Buyer of the foreclosure status at the time of the filing of the
bankruptcy filing unless some situation occurs which bankruptcy action, the Servicer must submit a completed
might place the Buyer’s interest in the property in Foreclosure Recommendation/Individual Delinquency
jeopardy. Report (WAMU 3003) for notification purposes.
A. Chapter 7 and Chapter 11 B. Chapter 13
If a borrower files for bankruptcy under Chapter 7 or If a borrower files bankruptcy under Chapter 13, the
Chapter 11 of the Bankruptcy Reform Act of 1978, Title Servicer must review the repayment plan and must reject
11 of the United States Code, and the loan becomes two the plan if the Servicer can substantiate that the plan is
months delinquent, the Servicer must forward not reasonable. If the Servicer determines the
correspondence to the attorney, or to the bankruptcy bankruptcy repayment plan is unreasonable, counsel
trustee if there is no attorney involved in the case, retained by the Servicer should file an objection to the
demanding that the loan be brought to a current status plan. If the plan is reasonable, the Servicer must approve
and maintained current on a monthly basis. The Servicer the repayment plan.
must make a drive-by inspection of the property to verify
occupancy at this time and every month thereafter until If the loan becomes two months delinquent outside of the
plan or the borrower fails to make payments as agreed
the loan is again current. If no acceptable action or
arrangement occurs in the 30 days following the demand within the plan, the Servicer must forward
letter and the loan becomes three months delinquent, the correspondence to the borrower’s attorney, or to the
bankruptcy trustee requesting the loan be brought to
Servicer must immediately seek relief from the
automatic stay and reporting must occur as provided in current status under the Chapter 13 repayment plan and
Section 205.01B. maintained there throughout the term of the plan. The
Servicer must make a drive-by inspection of the property
Once the stay is lifted on the Chapter 7 or Chapter 11 to verify occupancy at this time and every month
bankruptcy, the Servicer must comply with all state and thereafter until the loan is brought to a current status
local laws and regulations, and insuring and guaranty under the plan. Refer to Section 205.01 for further
agency regulations before commencing foreclosure. The details. If no acceptable action or arrangement occurs in
Servicer must immediately forward a letter to the the 30 days following the demand letter, the Servicer
borrower’s attorney or to the bankruptcy trustee, if there must immediately seek relief from the automatic stay.
is no attorney involved in the case, demanding that the Each month, the Servicer must report its actions on the
loan be brought current immediately and maintained Monthly Delinquency Report provided in Section 205.01
current. Upon obtaining relief from the automatic stay (B).
from the bankruptcy court, the Servicer must initiate or
continue with foreclosure action and property disposition Once the stay is lifted on the Chapter 13 bankruptcy, the
Servicer must comply with all state, local, and insuring
as provided in Sections 206 and 207 within sixty days of
the filing of the order to lift the stay. The Servicer must and guaranty agency regulations before commencing
continue to report the status of the loan as provided in foreclosure. Upon obtaining relief from the automatic
stay through the applicable court action, the Servicer
Section 205.01B.
must initiate or continue with foreclosure action and
If the borrower files under Chapter 7 or Chapter 11 when property disposition as provided in Section 206 and 207
the loan is already 60 or more days delinquent or in within sixty days of the filing of the order. If the loan is
foreclosure status, the Servicer must cease all collection in a foreclosure status at the time of the filing of the
or foreclosure activity immediately. If the loan is 60 bankruptcy action, the Servicer must continue to report
days or more delinquent, but not in foreclosure, the the status of the loan as provided in Section 205.01B. If
Servicer must immediately forward a letter to the the loan is not in a foreclosure status at the time of filing
borrower’s attorney or to the bankruptcy trustee if there of the bankruptcy action, the Servicer should send the
is no attorney involved in the case, requesting that the required breach letters to the mortgagor and refer to they
loan be brought current immediately. A drive-by attorney for Foreclosure action once the demand expires.
inspection of the property should be conducted Servicer should notify Buyer with referral date
immediately and every month thereafter. information. Refer to Section 205.B for further details..
205-6 Servicing Guide: Loan Servicing
(Rev. 8/28/09)
Section 205. Delinquencies
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.

Servicing Guide: Loan Servicing 205-7


(Rev. 8/28/09)
Section 205. Delinquencies
This page left intentionally blank.

205-8 Servicing Guide: Loan Servicing


(Rev. 8/28/09)
Section 206. Foreclosure
206.01 Servicer’s Notifications 4. Primary mortgage insurer’s approval, if applicable
Notification of the foreclosure referral date should be Upon receipt of the Buyer’s written approval, the
submitted to the Buyer electronically. The notification Servicer or the Servicer’s counsel should prepare any
of said action must be in electronic format and include documents necessary to process the deed-in-lieu of
the foreclosure referral date, reason for default, foreclosure, following Fannie Mae guidelines to ensure
occupancy status, condition of property, date of last reimbursement of the attorney’s fees and costs. The
property inspection and most current broker’s price Servicer must arrange for conveyance of the property.
opinion if available. If collection and loss mitigation The borrower must agree to assign and transfer, to the
efforts have exhausted, the servicer should ensure the Buyer, all rents due and to become due. In general, the
initiation of foreclosure action occur no later than the Servicer should not take title to the mortgaged property
120th day of delinquency. The Servicer must also until it is vacant. If hardship exists, the Servicer may
submit all notices promptly to the primary mortgage take title provided the date of possession is agreed upon
insurer as required. A copy of the notice need not be in advance.
sent to the Buyer but should be made part of the The Servicer must email the buyer once the conveyance
foreclosure records. Failure to initiate foreclosure action documents have been sent for recording. Title should be
in accordance with the time frame specified in Section conveyed directly from the borrower to the Buyer’s
205.01 will result in a per diem interest penalty assignee.
assessment at the note rate.
During the time that the loan remains in a foreclosure C. Preforeclosure Sale
status, the Servicer must provide monthly updates of The Servicer should pursue a preforeclosure sale when a
information as provided in Section 205.01B. borrower is required to sell their home in time of
financial hardship, and if it is foreseen that it will be
A. Assignment to the Mortgage Insurer
difficult to sell as the current market value is less than
A Servicer may not make arrangements for the the amount required to satisfy the loan and any sales
assignment of a delinquent loan to the mortgage insurer costs.
without the Buyer’s prior approval. If an assignment is
The Servicer is responsible to inform the borrower that
approved, the Servicer will complete the transaction and
they are required to maintain the property until it is sold.
file the claim. If the insurer declines the assignment of a
The Buyer may require the borrower to contribute funds
delinquent loan, the Servicer must request the Buyer’s
if the sale proceeds do not satisfy the loan. Any escrow
approval before taking any alternative action.
funds will not be reimbursed to the mortgagor.
B. Deed-In-Lieu of Foreclosure The following documentation must be submitted to the
A deed-in-lieu of foreclosure is usually preferred to Buyer prior to any preforeclosure sale:
foreclosure. If the borrower is willing to execute a • Copy of primary mortgage insurer’s approval, if
voluntary deed-in-lieu of foreclosure, the Servicer should applicable
recommend acceptance by the Buyer if the Servicer
determines: • Copy of broker’s opinion

• Such action is in the Buyer’s best interest. • Loss Analysis sheet showing benefit of approving
short sale offer versus REO sale.
• Full benefits of any mortgage insurance will be
received. The following documentation must be submitted to the
• Marketable title, free from any liens, will be Buyer after the preforeclosure sale:
obtained. • Copy of proceeds check or wire confirmation
• The property will be vacant at the time of • Copy of HUD-I settlement statement
conveyance.
• Copy of primary claim, if applicable
The following documentation is required when • Copy of explanation of benefits form once MI has
requesting the Buyer’s approval of the acceptance of a settled
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

Servicing Guide: Loan Servicing 206-1


(Rev. 8/28/09)
Section 206. Foreclosure
206.02 Institution of Foreclosure the Servicer should call the Buyer for approval of any
expenditure in excess of $2,500. The Buyer will send
Acceleration of the maturity of a loan must be the Servicer a confirmation of the cost and nature of the
accomplished in accordance with the terms of the protective action approved.
mortgage instrument and applicable law. The Buyer
The Servicer should retain the borrower’s escrow funds
must be provided with written notification of all
and all other unapplied funds. The Servicer should
foreclosure actions as provided in Section 206.01. The
obtain bills for, and pay all expenses due under the loan,
Servicer should not recommend foreclosure until every
including taxes, special assessments, ground rents, and
reasonable effort has been made to cure the delinquency,
other charges which are or may become first liens upon
as discussed above. Once the Servicer determines no
the property as well as hazard and mortgage insurance
other course of action will cure the default, the Servicer
premiums. If the borrower’s escrow funds are
should promptly refer the file to the attorney to
insufficient to pay these items as they become due during
commence foreclosure which should be done no later
the foreclosure, the Servicer must advance funds for the
than the 120th day of the delinquency. The Servicer
payment of such expenses to protect the Buyer’s interest.
should actively continue all efforts to cure the default
Reimbursement for all approved expenses may be
and mitigate losses to the Buyer until the Servicer can no
requested on the Statement of Expenses (WAMU 3001)
longer legally do so under the terms of the mortgage
at the time of final property disposition.
instruments and federal, state or other applicable
governing law or agency requirements. The Servicer • The Servicer must inspect the property at least once
should prepare and forward with the foreclosure a month and more frequently when circumstances
notification any necessary papers for the Buyer’s warrant.
execution and, when appropriate should ask the Buyer to Notifications of sale results are required within 24 hours
return the security instrument. If the security instrument after the sale.
is sent to the Servicer, the Servicer will hold it on behalf
of, and for the benefit of, the Buyer and its successors B. Attorney’s/Trustee’s Fees
and assigns, and must ensure its safe storage and return it
Servicer should adhere to FNMA guidelines for
to the Buyer promptly when foreclosure is discontinued.
foreclosure fees and costs allowed. Any exceptions
The Buyer’s execution of any document submitted by the
require the Buyer’s approval
Servicer does not imply that the Buyer has reviewed
such document for legal compliance. The Servicer All fees discussed in this section are to be paid by the
maintains this responsibility. Servicer and will be reimbursed by the Buyer after the
final settlement of the sale of the property and all
On a FHA/VA reconveyance, the Servicer is responsible
insurance claim proceeds have been paid. If foreclosure
for preparing the necessary documents and forwarding
proceedings are discontinued, all fees and costs incurred
them to the Buyer for execution. This should take place
are to be collected from the borrower unless prohibited
no later than two weeks prior to the expected foreclosure
by law. In jurisdictions where the collection of
sale date. The Servicer shall monitor the foreclosure
attorney’s fees or costs from the borrower is prohibited,
process to ensure that no unnecessary delays occur.
the Buyer will share such expenses with the Servicer in
The Servicer will be assessed a per diem interest penalty proportion to the Buyer’s interest in the loan.
at the note rate for any late foreclosure referral and for
In deed-of-trust jurisdictions, it is the Servicer’s
any unnecessary or unsupported delays in the foreclosure
responsibility to ensure a proper individual or entity, free
process.
from any conflict of interest, serves as trustee or
A. Foreclosure Processing substitute trustee. The Buyer may select the foreclosure
counsel or request substitution of a trustee to whom the
The Servicer should take appropriate action during the case is to be referred. The Servicer is expected to work
foreclosure process to protect the property. The Servicer closely with the foreclosure counsel, trustee, or substitute
must obtain the Buyer’s approval in advance for any trustee to ensure prompt and efficient completion of the
expenditure to protect the property which exceeds foreclosure proceedings.
$2,500. In any situation where delaying protection
action might result in impairment of the property, 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
206-2 Servicing Guide: Loan Servicing
(Rev. 8/28/09)
Section 206. Foreclosure
payment offered will cover all costs and expenses. No 206.03 Claim Procedures
offer of full payment may be declined without the
Buyer’s approval. A. Filing a Claim
If the offer is accepted, after receiving the funds the All mortgage insurance claims must be filed within the
Servicer must take action to prevent additional time required by the mortgage insurer. If a claim cannot
foreclosure expenses from being incurred, pay the be filed with the mortgage insurer within that time, the
foreclosure expenses, and apply the remaining funds to Servicer must obtain an extension from the mortgage
the borrower’s account and return the debt instrument to insurer. The Servicer must forward a copy of the
the Trustee by certified mail mortgage insurer’s extension approval to the Buyer and
If the borrower offers to pay an amount less than the full must include a written explanation of the reason for the
delinquency during foreclosure, the Servicer should delay and anticipated date for the claim filing.
determine the total amount of foreclosure costs and The Servicer should complete the claim according to the
expenses which would be incurred if the offer were mortgage insurer’s procedures and forward a copy to the
accepted. The Servicer may decline without requesting Buyer. The mortgage insurer should make settlement
the Buyer’s approval, but must obtain the Buyer’s checks payable to the Servicer.
approval before accepting. The Servicer’s
If the primary mortgage insurance was issued by PMI
recommendation should include an opinion regarding
Mortgage Insurance Co., the Servicer must inform PMI
whether the foreclosure action should be suspended or
that the policy covers a loan purchased by the Buyer.
dismissed and how the remaining delinquency will be
cured. If the mortgage insurer fails to pay the claim within 60
days, the Servicer must make demand upon the mortgage
D. Bidding Instructions insurer for immediate payment. The Servicer is
The Servicer must issue bidding instructions to its responsible for reimbursement for any shortfall in
employee, agent, or the attorney attending the insurance coverage.
foreclosure sale unless the Buyer directs otherwise. If the mortgage insurer reduces the claim due to
The Servicer must comply with all bidding instructions administrative error, the Servicer will reimburse the
and requirements of the mortgage insurer, when Buyer for the amount of such reduction. All claim
applicable. The Buyer does not need to approve the reductions or denials must be brought to the attention of
maximum bid price if it will recover the total the Buyer along with the Servicer’s response to the
indebtedness, including expenses and costs, or if it is the reduction or denial
maximum amount permitted by applicable law. If the B. Deposit of Settlement Proceeds
mortgagor has substantial assets or earning power and
state law allows collection of deficiency amounts, the Within 1 business day of receipt of settlement funds, the
Servicer must preserve the Buyer’s rights to pursue Servicer should immediately deposit the proceeds into
collection and recovery of a deficiency. The Servicer the P&I Custodial Account. The servicer should email or
must obtain the Buyer’s prior approval of a maximum fax a copy of the final signed HUD-1 that must much the
bid which is insufficient to recover the total proceeds received.. . Gross proceeds along with MI
indebtedness. If the Buyer’s approval of a maximum bid proceeds if received should be wired to the buyer within
is required, the request for approval must be 2 business days. If the loan has MI insurance pending,
accompanied by an estimated market value of the servicer should hold funds in their custodial account until
property in an “as is” condition at least 14 days prior to the MI claim has been paid. A copy of the explanation of
the actual foreclosure sale date. benefits settlement statement should be sent to the Buyer
upon receipt of MI funds.

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.

Servicing Guide: Loan Servicing 206-3


(Rev. 8/28/09)
Section 206. Foreclosure

This page left intentionally blank.

206-4 Servicing Guide: Loan Servicing


(Rev. 8/28/09)
Section 207. Acquired Properties
The Servicer’s responsibility for the maintenance, The Servicer may spend up to $2,500 per occurrence for
security and marketing of the acquired property emergency repairs of property security without the
continues until the final disposition of the property and Buyer’s prior approval. If the required securing or
until all funds are received by the Buyer, unless the emergency repairs exceed $2,500, contact the Buyer for
Buyer relieves the Servicer of these duties by written verbal approval.
notification. For all properties in redemption, confirmation,
If the Buyer relieves the Servicer of the responsibility for ratification, or eviction, the Servicer is required to
maintenance and marketing of the acquired property for complete a drive-by BPO within 10 days and forward to
cause, the Servicer shall pay the Buyer the greater of the Buyer via email. If the property remains occupied
$1,000 or 1% of the unpaid principal balance. after marketable title is obtained, the Servicer, should
Consistent violations may result in termination of the immediately commence eviction unless the occupancy of
Selling and Servicing Contract for cause. the property enhances its marketability. The Servicer
The Servicer acknowledges damage suffered by the must obtain the Buyer’s prior approval before allowing
Buyer due to the Servicer’s failure to properly and continued occupancy or entering into a lease.
expediently administer and market the acquired property
will be reimbursed to the Buyer by the Servicer. Refer to 207.02 Payment of Taxes and Insurance
Section 206.03 for details on claim procedures. The Servicer must ensure the following:
Proper servicing shall include, but not be limited to the 1. All property taxes and assessments are paid on time.
following actions: Penalties for late payment of property taxes or
1. Inspection and maintenance of the property, assessments will not be reimbursed to the Servicer.
2. Paying insurance premiums and taxes when due, 2. All association dues are paid, if appropriate. The
3. Notification of acquisition and providing case files, foreclosure action should extinguish any fees which
4. Property valuation and repair, become due prior to acquisition. Penalties for late
payment will not be reimbursed to the Servicer.
5. Expedient marketing of the acquired property,
3. Adequate hazard insurance coverage and, if
6. Providing monthly reports according to Buyer
applicable, flood insurance coverage is maintained
requirements,
at all times.
7. Filing accounting, and
4. The Servicer must ascertain the benefits of obtaining
8. IRS reporting. vandalism coverage and make a recommendation to
the Buyer.
207.01 Inspection and Maintenance
Servicer is required to complete monthly property 207.03 Submission of Case and
inspections from the time of acquisition until the close of Marketing Files
escrow. These reports should be available upon request
by the Buyer. . If at any time the Servicer ascertains any The Servicer must inform the Buyer of the acquisition of
damage to the property, the Servicer must submit a claim a property within 24 hours of the foreclosure sale even if
for insurance recovery, obtain repair bids and take a redemption period follows the sale. Such notice may
necessary protective action to prevent any recurrence. be in the form of a letter and should provide the
foreclosure sale date, successful bid amount, occupancy
Prior to beginning property repair, the Servicer must
status, and any unexplained redemption dates.
contact the Buyer for instructions. The Servicer must
ensure settlement of any hazard insurance claim is The case file is due within 10 days of acquisition and
promptly completed. The Buyer will often have Special should contain the following documents:
Hazard Insurance coverage for losses over and above If 12 monthly payments or less were made on the loan,
those covered by primary hazard insurance. This Special the Servicer must send the following, along with the
Hazard Insurance is not in lieu of primary hazard complete origination file.
insurance which must be maintained by the Servicer. 1. Note or other instrument evidencing indebtedness.
Any loss covered by the primary hazard insurance carrier 2. Mortgage or Deed of Trust.
must be reported by the Buyer so a claim under the 3. Original appraisal.
Special Hazard Insurance Policy may be submitted.
4. Payment history since inception of the loan.
Failure to file an insurance claim for claimable damages
will result in a penalty being assessed at the time of 5. Copies of all foreclosure pleadings and evidence of
liquidation for the amount of the cost to repair said title in the name of a party designated by the Buyer
damages. Within 30 days of possession, the marketing file should
contain the following documents:

Servicing Guide: Loan Servicing 207-1


(Rev. 8/01/08)
Section 207. Acquired Properties
1. Current appraisal (reflecting 90-120 day marketing Initial Preservation Limit: $2,350 for re-key,
time, including “as-is” and “repaired” values, securing, and the following items:
detailed list of repairs, costs, incremental • Exterior:
contributory value and a 30 day quick sale value. • Remove all personal items from grounds,
2. Current BPO (reflecting 90-120 day marketing time, storage buildings, and garages.
including “as-is” and “repaired” values, detailed list • Install high-voltage light bulbs in all
of repairs, costs, incremental contributory value and outlets.
a 30 day quick sale value). • Mow, edge, trim shrubbery/trees, and clean
3. Second BPO all bedding areas.
For Properties >= $40,000 • Initial watering of grounds in non-
winterized months
• Servicer shall order an additional BPO when the
lowest BPO varies by 10 percent or greater • In-Ground Pool:
from the appraisal and Servicer is unable to – Clean, secure and make operable (in
effectively reconcile the values. season).
– Fence, if needed to comply with local
For properties < $40,000:
law. $500.
• Both values under $40,000; 15 percent variance – Cover per HUD regulations, if
• Both values under $30,000; 15 percent variance applicable. $500.
• Both values under $20,000; 20 percent variance – Monthly Maintenance (if operating).
$200.
• Both values under $10,000; 25 percent variance.
– Post “KEEP OUT/NO
TRESPASSING” at pool area.
4. List of contractor bids if repairs recommended: – Provide photos.
$0 - $3, 500: One bid required – NOTE: NEVER DRAIN IN-
Over $3,500 up to $10,000: Two bids required GROUND POOLS.
Over $10,000: Three bids required • Above-Ground Pool:
– In most cases these pools should be
5. Recommendation for sales price and marketing
removed $350.
strategy.
• Remove all mail, and advertisements
6. Rental agreements, if approved by the Buyer.
• Clean gutters and downspouts
Failure to submit the case and marketing files as • Interior:
described will be considered a breach of the Selling and • Remove all non-realty and personal items
Servicing Contract and will subject the Servicer to a per
• Remove all exposed nails, hangers,
diem interest penalty at the note rate plus any additional
sticker, etc. from walls/ceilings, doors &
damages suffered by the Buyer resulting from the failure.
windows
If the case file or marketing file is more than 30 days
• Remove damaged and/or unappealing
overdue, the Buyer will request a repurchase of the
window treatments
Buyer’s interest.
• Turn on all utilities (winterize when
207.04 Marketing of Acquired completed, when warranted)
• Start furnace/heating units
Properties • Clean all appliances
The marketing of an acquired property is administered • Clean toilets, showers and tubs
by the Servicer subject to the direction of the Buyer. The • Clean all windows
properties must be maintained in marketable condition. • Clean flooring, including carpet
Initial Securing and Maintenance Limits (property • Install high voltage light bulbs at all
preservation) outlets
• Initial cost limitations:
• Servicer has approval up to $2,350 for initial • One time janitorial $300
property preservation items (trash-out, re-key, lawn, • One time carpet cleaning $250
pool, etc.) Buyer must approve all expenses • Initial Pool $500
exceeding $2,350. Buyer is to approve any bids • Insect/rodent infestation $250
over $2,350.
• Approval will be handled via email unless otherwise
specified by Buyer.

207-2 Servicing Guide: Loan Servicing


(Rev. 8/01/08)
Section 207. Acquired Properties
• On-going Preservation: 1. Buyer’s name
• Seasonal grounds maintenance, including 2. Offer Price
mowing, edging, trimming 3. Concessions
shrubbery/trees, and mulching 4. Estimated net proceeds
• On-going watering to keep grounds
5. Close of escrow date
appearing “as occupied”
• On-going cost limitations: 6. Type of financing
• Weekly lawn maintenance $50 per 7. Current List price,
occurrence – provide photos. The Servicer must contact the mortgage insurer for
• Periodic interior cleaning $65 prior approval if the claim has not yet been settled.
• Monthly pool $200 The mortgage insurer’s instructions must be
• Snow removal $50 per occurrence included with the offer package sent to the Buyer.
• Winterization $200 Upon acceptance of the offer, a copy of the executed
• De winterization $150 contract must be submitted to the Buyer within 10
days of approval.
• Two smoke detectors or state
requirements $60 each Once the offer has been accepted, the Servicer must
• Carbon Monoxide detectors, if required, ensure the closing proceeds on schedule. If there is a
$80 each delay in closing which is not approved by the Buyer, the
• Subsequent ongoing preservation costs are Servicer may be assessed a per diem interest penalty at
billed as incurred. Clearly document the note rate.
scope/ reasonableness of all expenses The closing documents are to be reviewed by the
(before photos, bids, etc.); all expenses are Servicer to ensure accuracy and compliance with the
subject to audit contract terms. The deed must name the trustee as
transferor and be forwarded to the Buyer at least seven
Utilities days prior to the scheduled closing. The Buyer will
obtain the required signatures and will return the
• Servicer will ensure all utilities and water documents to the specified closing agent. Preliminary
are turned on and in working condition, HUD-1 must be approved by Buyer prior to close of
provided condition and season warrant. 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
The selection of a broker will be the sole responsibility
to the Buyer within 2 business days of closing.
of the Servicer. The Buyer recommends selecting a
broker who is a member of a local Multiple Listing The Buyer will permit the sale of an acquired property to
Service, if one exists. The Buyer reserves the right to directors, officers and employees of the Servicer, or any
direct all marketing activities relative to the acquired subsidiary of the Servicer, and to spouses and members
property in the event the Buyer believes, in its sole of the immediate family who reside with any director,
discretion, that it would be advantageous to do so. In officer or employee of the Servicer or a subsidiary of the
these instances, the Servicer will continue to administer Servicer (a “Servicer Affiliated Person”), and to the
the reimbursement of expenses and facilitate payment of Buyer employees and their immediate families, provided
any applicable taxes, hazard insurance and other items. that all of the following conditions are met:
The Servicer will continue to perform these functions 1. The sales price is substantiated by an independent
until the property has been liquidated. appraisal;
The initial list price and terms will be determined by the 2. The terms of the sale are identical to those that
Buyer. The Servicer will complete and execute the would otherwise be offered to the general public;
listing agreement. 3. For a sale to any Servicer Affiliated Person, the
After 90 days on market, servicer will order a new BPO transaction is approved in advance by a resolution
from an agent other than the listing agent at a cost not to adopted by a majority of the Servicer’s board of
exceed $100.00. All REO properties will be re-valued directors, with no director having an interest in the
every 6 months. For properties previously valued below transaction voting. If no board of directors exists
$250,000, this will be in the form of a BPO. For within the Servicer’s organization, the transaction
properties previously valued at $250,000 and above, an must be approved in advance, by the highest
appraisal should be ordered. . decision-making body within the Servicer’s
When an offer is received the following details should be organization, with no person having an interest in
emailed to the REO Asset Manager assigned to the file: the transaction participating in the decision; and

Servicing Guide: Loan Servicing 207-3


(Rev. 8/01/08)
Section 207. Acquired Properties
4. For a sale to a Buyer employee or to a member of
his or her immediate family, the acquired property A Liquidation Schedule along with a copy of the HUD-1
must be purchased as the employee’s or his or her settlement statement, and the wire confirmation must be
immediate family member’s primary residence. submitted within 48 hours of deposit. The Servicer
may not reimburse itself for expenses or advances from
207.05 Repairs the sale proceeds. Failure to comply with this
If repairs are approved by the Buyer, The Servicer must requirement will result in a per diem interest penalty
maintain close scrutiny of the contractor and must report calculated at the note rate.
the progress to the Buyer via the monthly report.
Repairs must be completed expediently. Prior to the C. Reimbursement of Expenses
payment of the contractor’s bill, the Servicer must Within 30 days after the sale of the property, a Statement
inspect the property to assure all repairs were completed of Expenses (WAMU 3001) must be submitted to the
properly and all the necessary releases have been signed. Buyer. Receipts substantiating all items must be
The Servicer should advance the funds necessary to pay included along with the loan history showing billed
the contractor upon repair completion. disbursements from the escrow account. In lieu of
The Servicer shall hold the Buyer harmless for any receipts for tax and insurance disbursements, the Buyer
unpaid mechanics liens, damage to the property or will accept certified copies of loan histories highlighting
surrounding properties or injury to the workmen. such disbursements. A table of transaction codes should
If advantageous, the Servicer should not delay the also be included.
marketing of the property pending the completion or The Statement of Expenses with all required receipts
repairs. Photos of the completed repairs must be must be received by the Buyer within 30 days of the sale.
forwarded to the Buyer. Failure to submit the Statement of Expenses will be
207.06 Monthly Reports considered a breach of the Selling and Servicing
Contract. If it is not received within 30 days, the Buyer
Listing agent will complete a Monthly Marketing Report reserves the right to subject the Servicer to a penalty of
for all listed properties, which are not “under contract”. $100.00 per day plus any additional damages suffered by
These reports should be reviewed by the Servicer and the Buyer resulting from the delay or deny the
submitted to the Buyer to support list price reductions, reimbursement of any servicing expense. Supplemental
marketing strategy revisions and offers received. . reimbursement requests for utility bills will be
considered on a case-by-case basis.
207.07 File Accounting The Buyer reserves the right to prorate any and all
expenses during the time frame that any penalties are
A. Reimbursement of P&I Advances
assessed.
Claim settlement checks are to be deposited in the
Servicer’s P&I Custodial Account within 24 hours of D. Loan Removal
receipt. A Liquidation Schedule must be received by the The Buyer will provide written instructions to remove
Buyer within 48 hours of deposit. The Servicer may not the loan from the Servicer’s system along with
reimburse itself for expenses or advances from the claim reimbursement for any outstanding P&I advances and
payment. Failure to comply with this requirement will expenses due.
result in a per diem interest penalty calculated at the note
rate.
207.08 IRS Reporting
Upon receipt of the final liquidation funds, the Servicer
Section 6050J of the Internal Revenue Code requires that
will be reimbursed for any P&I advances. .
the owner of a mortgaged property which was foreclosed
B. Final Liquidation Proceeds or abandoned during the previous year file an
information return (IRS Form 1099A) with the IRS.
All funds from the sale of the property should be Servicers which have serviced acquired properties during
deposited to the P&I Custodial Account and wired to the the year must submit form 1099A to the IRS and furnish
Buyer within 48 hours of deposit. The wiring the Buyer with a copy. The borrower’s portion of Form
instructions are: 1099A must be furnished to the borrower on or before
Bank Name – JP Morgan Chase – New York January 31st of the year following the acquisition. If the
ABA # 021-000-021 Servicer has no acquired properties, the Buyer must
Account # 304-652601 receive written confirmation of this to ensure compliance
Account Name: BUYER Mortgage Securities Corp with IRS regulations. The Buyer will furnish the tax
Originator to Beneficiary: Attn REO / WMS Loan # identification number to the Servicer.
207-4 Servicing Guide: Loan Servicing
(Rev. 8/01/08)
Section 207. Acquired Properties
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.

Servicing Guide: Loan Servicing 207-5


(Rev. 8/01/08)
Section 207. Acquired Properties

This page left intentionally blank.

207-6 Servicing Guide: Loan Servicing


(Rev. 8/01/08)
Section 208. Conversion Process: Adjustable Rate Mortgages

For adjustable rate mortgages (ARMs) with conversion 208.03 Conversion Fee
options, the borrower may, in accordance with the terms At the time of a conversion request, the borrower must
of the applicable note, convert the loan to a fixed rate, pay a non-refundable conversion fee, as stated in the
level payment, fully amortizing loan for the remainder of mortgage documents, as of the effective conversion date.
the original 30-year term. In most cases, the borrower The Servicer should retain its portion of the conversion
may exercise the option to convert at any time during the fee (25%, or as contracted).
first five years of the loan term or at such time during the
second, third, fourth or fifth year of the loan term, 208.04 New Mortgage Interest Rate
according to the loan documents, which result in the The new fixed mortgage interest rate will be calculated;
effective conversion date occurring prior to the fifth i) according to the mortgage loan documents, ii) as the
anniversary date of the loan’s origination. rate effective as of the registration date, and iii) the sum
It is the Servicer’s responsibility to make any necessary of the required yield, plus the Servicer’s servicing fee.
disclosure to the borrower regarding the terms and The servicing fee must be no greater than the servicing
conditions of the 30-year loan to which the borrower is fee charged on the ARM but no less than .25%.
converting the ARM and to ensure all of the procedures
and requirements set forth in the loan documents and 208.05 Effective Conversion Date
applicable federal, state, and local law are strictly The effective conversion date is the date on which the
followed. It is also the Servicer’s responsibility to new fixed interest rate becomes effective. This date
ensure any converted loan retains its first lien status. occurs on the first day of the second month following the
conversion registration date. For example, if the
208.01 Variations in Loan Documents conversion is registered any time in January, the new
The Servicer must service each ARM according to the mortgage interest rate will become effective on March 1,
terms of the note, security instrument, disclosures and the “effective conversion date,” and the new payment
any riders and addenda to those documents. Except for amount will become effective on April 1, the new “first
the security instrument, which must be the standard fixed rate payment date.”
FNMA/FHLMC security instrument for the state in
which the property is located, the Buyer may change the
208.06 First Fixed Rate Payment Date
loan documentation requirements in accordance with The first fixed rate payment date is the date on which the
program changes. first payment based on the new fixed mortgage interest
Should the borrower wish to convert to a fixed rate loan rate is due. This date will always occur one month after
using a lower, unpaid principal balance, the curtailment the effective conversion date, on the first day of the
must be remitted, reported and passed through before the month.
conversion is registered.
The Servicer is responsible for enforcing each ARM 208.07 Mortgage Insurance
according to its terms and should ensure that the note, Requirements
security instrument, program disclosure, and any When an insured ARM is converted to a fixed rate loan,
addenda or riders meet the requirements listed in Section the Servicer must ensure the appropriate mortgage
II of the Seller’s Guide. insurance coverage is maintained. The Servicer must
notify the mortgage insurer of the conversion of any
208.02 Eligibility insured loan, must obtain any required amendment or
In order to exercise the conversion option, the Servicer endorsement (if it is the insurer’s policy to convert from
must comply with the terms of the mortgage documents. ARM to fixed rate coverage), and must forward this
For conversion eligibility purposes, a delinquent amendment or a copy of the notification to the mortgage
payment is defined as any payment not made within the insurance company to the Loan Purchase Center.
month it was due. The conversion does not require any
requalification of the borrower.

Servicing Guide: Loan Servicing 208-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 208. Conversion Process: Adjustable Rate Mortgages
9. The Servicer will sign the Modification Agreement
208.08 Step-by-Step Conversion and return a signed copy to the Buyer. If the signed
Procedures: original must be recorded to perfect the first lien, the
Servicer must notify the Buyer of this fact, and
1. The borrower must contact the Servicer for a quote
forward a copy of the recorded Modification
on the current mortgage interest rate and conversion
Agreement to the Buyer.
fee.
10. The Servicer will provide the borrower with written
2. For the current mortgage interest rate, the Servicer
notice of confirmation or denial of the conversion.
will quote from the current day’s posting, according
If the conversion is denied, the conversion fee is not
to the mortgage documents, plus the Servicer’s
returned to the borrower.
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.

208-2 Servicing Guide: Loan Servicing


(Rev. 8/03)
(Last reviewed 05/16/08)
Section 208. Conversion Process: Adjustable Rate Mortgages

This page left intentionally blank.

Servicing Guide: Loan Servicing 208-3


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 301. Recordkeeping
The Servicer must maintain accurate accounting and 301.02 Servicer Compensation
borrower payment records. The Buyer may examine any
of the records and accounting reports associated with any For each fixed rate loan serviced for the Buyer, the
loans serviced on behalf of the Buyer or in which the Servicer retains a servicing fee made up of the difference
Buyer holds an interest, the borrower’s remittances and between the mortgage interest rate and the net rate to the
any other reports and documentation necessary to Buyer. The net rate is defined as the rate of interest
establish the Servicer’s compliance with the Buyer’s payable to the Buyer on each loan. This servicing fee
purchase program at any reasonable time. The Buyer must be a minimum of .25% and may not exceed a
will: maximum of 1.00% per annum.
• Monitor all monthly accounting reports submitted For adjustable rate mortgages (ARMs), the servicing fee
by the Servicer; is the difference between the gross margin stated in the
• Conduct procedural reviews during periodic visits to mortgage Note and the net margin to the Buyer.
the Servicer’s place of business; Depending on the loan amount, the servicing fee for an
ARM loan will have a minimum of .25% and no
• Conduct, from time to time, in-depth audits of the maximum. However, if an ARM converts to a fixed rate
Servicer’s internal records and operating procedures. loan, the servicing fee may not exceed the original
Among other things, the Buyer may examine the servicing fee on the ARM Note.
Servicer’s financial records, the borrowers’ escrow
accounts, and the underwriting standards used by the No servicing compensation is payable to the Servicer on
Servicer; and any loan for any period before the purchase date.
Servicing fees at liquidation are payable only in
• Request individual loan payment histories to ensure
proportion to interest collected at liquidation on the
proper administration of borrowers accounts.
respective loan.

301.01 Mortgage Payment Records Because sale proceeds include an adjustment for interest
and servicing fees from the first day of the month of
The Servicer must maintain permanent loan account purchase to the purchase date, full servicing fees are
records for each loan. These records may be in the form deducted from the first installment due the Buyer. On
of hard copy (paper) or microfiche and must be the purchase date, the Buyer will pay accrued interest at
maintained for six (6) years after the loan is liquidated. the net rate from the first day of the month of purchase to
Each loan’s account record must identify it as a pooled the purchase date. Therefore, the Servicer remits a full
loan. The Buyer does not mandate the particular system month’s interest at the net rate with the first installment
or forms to be used for the mortgage account records, but due the Buyer. For a full discussion of the loan sale
requires the system be capable of producing an account transaction, refer to Section 504 of the Seller’s Guide.
transcript itemizing the following in chronological order:
The Servicer may deduct servicing fees before
• The date, amount, distribution, installment due date depositing daily collections in the P&I Custodial
or other transactions affecting the amounts due from Account. If the Servicer decides to deposit gross interest
or to the borrower; and at the mortgage interest rate to the P&I Custodial
• The latest outstanding balances of principal, Account, servicing fees may be withdrawn daily by the
deposits, advances, and unapplied payments. Servicer.
The system must also provide for the prompt disclosure If necessary, the Servicer may estimate servicing fees
of any overdraft in the account balance of deposits for before the calendar month-end. Servicing fees deducted
the payment of taxes and insurance. or withdrawn by the Servicer should be reported to the
Buyer in the monthly accounting reports.
The accounts and records on loans should be maintained
according to sound and generally accepted accounting After each calendar month-end, the Buyer will
practices and in a way which will permit the Buyer recompute the servicing fees due to the Servicer and
representatives to examine and audit the accounts and confirm the net interest at the net rate due to the Buyer
records upon request. 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.

Servicing Guide: Loan Accounting 301-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 301. Recordkeeping
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.

301-2 Servicing Guide: Loan Accounting


(Rev. 8/03)
(Last reviewed 05/16/08)
Section 301. Recordkeeping

This page left intentionally blank.

Servicing Guide: Loan Accounting 301-3


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 302. Identifying Washington Mutual Mortgage
Securities Corp. Loans

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.

Servicing Guide: Loan Accounting 302-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 302. Identifying Washington Mutual Mortgage
Securities Corp. Loans
This page left
intentionally blank.

302-2 Servicing Guide: Loan Accounting


(Rev. 8/03)
(Last Updated 05/16/08)
Section 303. Custodial Accounts
The Servicer must establish, maintain and monitor for Though not required, a Servicer who services loans in
the mortgage loans serviced by the Servicer on behalf of more than one pool may establish separate P&I and T&I
the Buyer one or more principal and interest custodial Custodial Accounts for each one.
account (collectively, the “P & I Custodial Account”),
into which all payments of principal and interest shall be As soon as the Buyer purchases a loan, the Servicer must
deposited, and one or more taxes and insurance custodial transfer any related funds on deposit to the appropriate
account (collectively, the “T & I Custodial Account”), custodial account.
into which all payments of taxes and insurance shall be The Servicer must establish a reasonable daily work
deposited. The P&I Custodial Account shall be cutoff to ensure that collections are credited to the
maintained separately from the T&I Custodial Account. custodial account no later than the business day
Unless otherwise authorized by the Buyer in writing, following their receipt.
each custodial account must be insured by the Federal
Deposit Insurance Corporation ("FDIC"). Funds All custodial accounts must be demand deposit accounts
deposited in a custodial account may not exceed the level and may be interest bearing.
insured by FDIC deposit insurance. Any amount on
deposit in a P&I Custodial Account which is not fully 303.01 Principal and Interest Custodial
protected or insured by the FDIC must be immediately Accounts
remitted to the Buyer. Any amount on deposit in a T&I
Custodial Account which is not fully protected or insured All funds for the payment of principal and/or interest
by the FDIC must be removed from that account and which are received by the Servicer must be held in trust
deposited in another fully FDIC-insured T&I Custodial by the Servicer and deposited to the P&I Custodial
Account established and maintained by the Servicer. Account. This includes any proceeds from the
liquidation of a defaulted loan, from the mortgage pool
All custodial account records must be maintained in a insurance and primary mortgage insurance, and from any
manner consistent with prudent industry practices and other policies of insurance collected by the Servicer.
must be readily accessible to the Buyer's representatives This also includes any prepayment in part or in whole
at any time. accompanied by interest to the date of the prepayment.
In the case of liquidation, the Servicer should complete
The depository institutions at which custodial accounts and forward the Liquidation Schedule (WAMU 4009) to
are established and maintained must be assigned the the Buyer within 48 hours of deposit of funds.
following ratings from two or more of the specified
Each account must clearly indicate the respective
rating agencies:
interests of the Servicer as trustee and of the Buyer.
• “C” or better for TBW
The account designation must be:
• “125” or better for IDC
• “P3” or better for Moody’s [Servicer’s Name], as agent, trustee and/or bailee of
• “A3” or better for Standard and Poor’s principal and interest custodial account for Washington
Mutual Mortgage Securities Corp., its successors and
It is the Servicer’s responsibility to ensure the continued assigns, for various mortgagors and/or various owners of
eligibility of the depository institution in which the interests in Washington Mutual Mortgage Securities
custodial accounts are maintained. Should a depository Corp. mortgage-backed pools.
institutions rating fall below the above noted minimums,
the Servicer is required to move the funds to a depository As soon as the Buyer purchases any loan, the Servicer
institution meeting the above requirements, notify the must transfer all related principal and interest funds on
Buyer of the change in accounts and execute new hand to the P&I Custodial Account.
Custodial Account Letter Agreements and ACH Drafting
The Servicer should immediately remit to the Buyer any
Authorization.
amount deposited in the P&I Custodial Account that
The establishment of any Custodial Account and any exceeds the insurance limits set by the depository’s
changes in an existing account must be communicated to insurance authority. Detailed remittance instructions
the Buyer in a Letter Agreement prepared by the will be published at the time each pool is issued. The
Servicer. The Letter Agreements vary according to Servicer must also notify the Buyer within 24 hours
whether the account is in-house or not and according to regarding the amount of this remittance.
the type of account.

Servicing Guide: Loan Accounting 303-1


(Rev.12/12/08)
Section 303. Custodial Accounts
ACH DRAFT PROCEDURES account for this purpose. Refer to the discussion of
clearing accounts in Section 303.03.
P&I Custodial Accounts will be debited through the
Automated Clearing House (ACH). When setting up 303.02 Taxes and Insurance Custodial
the P&I Custodial Account, the Servicer must have
the ACH Debit Authorization (WAMU 4006) completed
Account
by the institution which houses the account. This in- The Servicer must deposit all collections of taxes,
stitution must be a member of the ACH network or a assessments, ground rents, insurance premiums and
correspondent of an ACH member. The account may comparable items to the T&I Custodial Account. The
be one of the Servicer’s P&I Custodial Accounts or it Servicer is responsible for ensuring that the account is
may be a separate clearing account. Each month on the maintained and administered in accordance with
withdrawal date the Servicer must have on de- applicable state and federal laws and regulations. The
posit in the P&I Custodial Account, or clearing Servicer will be solely responsible for payment of any
account, “same day funds” or “good funds” for all interest due to the mortgagor. Withdrawals may be made
sums due the Buyer. The deposit must be sufficient only to effect the timely payment of borrowers’ taxes
to cover the amount of the debit communicated to the and insurance premiums, to refund borrower surpluses,
Servicer on the Notice of Automatic Withdrawal. Each to recover servicing advances and comparable items, to
month, the Buyer will debit the accounts on the 20th remove any amounts deposited in error, and to clear and
calendar day or on the preceding business day if the 20th terminate the account.
day is not a business day through an ACH transaction. If
funds are not available on the day of the draft, the At least annually, the Servicer must compute the
required escrow payments based on reasonable
Servicer will be assessed a penalty, at the highest prime
rate published daily in the Wall Street Journal column estimates or assessments and bills to determine that
entitled “Money Rate” plus 2.0%. sufficient funds are being collected to meet all escrow
payments. If the amount held in the T&I Custodial
P&I REMIT PROCEDURES Account by the Servicer, together with the future
Each month on the date the funds are due to the Buyer, monthly installments of escrow payments, exceed the
the Servicer must have on deposit in the P&I Custodial amount required to pay charges as they become due, plus
Account, or clearing account, “same day funds” or “good any cushion permitted under applicable law and
funds” for all sums due the Buyer. The Servicer must regulation, the Servicer must either repay the excess
remit to the Buyer the total amount of the debit promptly to the borrower or credit the excess to the
communicated to the Servicer on the Notice of borrower by a reduction in monthly escrow payments.
Automatic Withdrawal. Each month, the Servicer will If the amount held in the T&I Custodial Account by the
remit the required funds per Notice of Automatic Servicer is deemed insufficient to pay charges when due,
Withdrawal on the 20th calendar day or on the preceding the Servicer should obtain the necessary additional funds
business day if the 20th day is not a business day. If from the borrower before the latest date on which the
funds are not received on the day of the required charges may be paid prior to penalty, lapse of insurance
remittance date, the Servicer will be assessed a penalty, policies, etc. If the borrower fails to remit the deficient
calculated using the highest annual prime rate published amount, or if there is insufficient time to obtain the
daily in the Wall Street Journal column entitled “Money amount, the Servicer must pay any charges due and
Rate” plus 2.0%. reflect the shortage in the borrower’s T&I Custodial
The Servicer may make withdrawals from the account Account.
only for the following purposes: The account is to be designated in the name of the
1. To reimburse itself for delinquency advances that Servicer acting as an agent for borrower payments in
have been recovered from subsequent collections order to show that the account is custodial in nature.
from the related mortgagor, or
The account designation must be:
2. To remove amounts that have been deposited to the [Servicer’s Name], as agent, trustee and/or bailee of
account in error, or Taxes and Insurance Custodial Account for Washington
3. To remove fees, charges, or other such amounts that Mutual Mortgage Securities Corp., its successors and
are deposited on a temporary basis in the account, or assigns for various mortgagors and/or various owners of
interests in the Buyer mortgage-backed pools.
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

303-2 Servicing Guide: Loan Accounting


(Rev. 12/12/08)
Section 303. Custodial Accounts
The Servicer must maintain records identifying each 303.05 Prepayment Fees
borrower’s payment and the account into which each
payment is deposited. If the note or security instrument executed in connection
with a mortgage loans requires that the borrower pay a
303.03 Clearing Accounts fee or other charge in the event that all or part of the
outstanding principal balance of the mortgage loans is
If the systems and procedures of the Servicer require the prepaid prior to its scheduled due date, the Servicer must
use of clearing accounts, these accounts should be collect such fee or other charge from the borrower on
governed by the following conditions: accordance with the terms of the note and security
1. The titles of such accounts must reflect that they are instrument, provided that collection of such amounts is
custodial in nature and the depository in which the permitted under applicable state and federal law.
accounts are maintained must be informed in writing
Prepayment fees must be deposited in the P & I
that they are Custodial Accounts.
Custodial Account within 24 hours of receipt and
2. A check drawn on the P&I or T&I Custodial remitted to the Buyer along with a copy of the note,
Account must be deposited to a disbursement rider, and addendums related to the loan, at the time the
clearing account before or at the same time as any related prepayment proceeds are remitted to the Buyer.
checks on the clearing account are issued. Prepayment fees collected by the Servicer must be
3. A single clearing account must not be used as both a properly reflected on the Remittance Reconciliation
collection and a disbursement clearing account. (WAMU 4010), Curtailments and Prepaid Installments
Report (WAMU 4007), as well as the Collection Report
4. The Servicer must maintain adequate records and (WAMU 4008) for the applicable collection period
audit trails to support all credits to and charges from (comparable system generated reports are acceptable).
the borrowers’ payment records and accounts.
If any prepayment fees are remitted in error, a request for
5. The Servicer must deposit its servicing fees into a a refund must be completed in writing within 30 days of
separate account. the funds being received by the Buyer. A copy of the
6. Collections deposited to a depository clearing note, rider, and addendum must be provided with this
account must be credited to the appropriate request. These funds may not be recaptured by the
Custodial Account no later than the first business Servicer by lowering any future remittances.
day following their receipt by the Servicer.
303.06 Buydown funds
303.04 Interest-Bearing Accounts All funds for the payment of principal and/or interest that
The Servicer may use an interest-bearing account as its are received by the Servicer in the form of buydown
T&I Custodial Account provided that the requirements funds will be held in trust by the Servicer and deposited
specified for the establishment and maintenance of the to either the P&I Custodial Account or to a separate
T&I Custodial Account set forth above and the buydown custodial account.
requirements listed below are met: Depending on how the buydown fund is calculated, the
1. The account complies with all local, state and funds must be deposited as follows:
federal laws and regulations governing borrowers’ • Present value discounted buydown funds: The
escrow accounts and interest-bearing accounts, Servicer must deposit buydown funds in an interest-
2. The Servicer ensures that all interest paid or credited bearing custodial account that has been established
to the account that is not subsequently credited to or exclusively for those funds. The rate of interest
paid to the borrowers will be removed from the earned on this account must be equal to the discount
account within 30 days of receipt of such interest, rate used to calculate the original value of the
3. The Servicer agrees that under no circumstances will buydown funds.
it ask the Buyer to advance funds for the payment of • Full value buydown funds: The Servicer may
taxes, insurance premiums or comparable items deposit buydown funds in either the P&I Custodial
because the escrow funds are held in an account not Account or in a separate custodial account for
withdrawable on demand and are therefore buydown funds.
unavailable, and
Neither custodial account may be interest-bearing.
4. The Servicer will comply, at its own expense, with
all applicable laws, regulations and contracts The Servicer is responsible for accurately accounting for
requiring payment of interest on borrowers’ escrow all buydown funds. Individual records must be
accounts. maintained for each buydown loan and for each Buyer

Servicing Guide: Loan Accounting 303-3


(Rev.12/12/08)
Section 303. Custodial Accounts
pool. These records must clearly identify the monthly NOTE: Servicers which are not insured by FDIC
principal and interest amount due from the borrower, the must always establish and maintain Custodial
monthly amount of buydown funds and must be balanced Accounts for Washington Mutual Mortgage
to the appropriate custodial account each month. Securities Corp. at an outside depository that
is insured by FDIC.
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)

303-4 Servicing Guide: Loan Accounting


(Rev. 12/12/08)
Section 304. Loan Accounting
304.01 Amortization Method The Servicer must hold any buydown funds in trust and
must apply these funds toward the payment of the
All loans will amortize with interest-in-arrears reducing scheduled monthly interest due on the note only upon
the principal balance to zero at the end of the term. Each receipt of the remainder of the monthly payment from
loan must be repayable in equal monthly installments, the borrower. The buydown funds may not be used to
except for the last installment, based on a 30-day pay any past due payments, reinstate the loan, or cure
month/360-day year. Interest-in-advance is never any default.
permitted. In addition, only full payments of interest and
principal may be applied and capitalization is not If the loan is paid in full, the remaining buydown funds
allowed. Due dates may only be the first day of the will be credited to the outstanding balance at liquidation.
month. Odd due date loans are accepted on an exception If the property is sold as a result of foreclosure, the
basis. Contact a Loan Accounting Specialist in the remaining buydown funds will be credited to the
Servicer Accounting Department for reporting outstanding principal balance at the time of sale. In
requirements. either case, if applicable, the funds will be discounted to
a present value at the original discount percentage.
304.02 Application of Payments If the property is sold and the loan is assumed by the
Payments received from a borrower will ordinarily purchaser, the buydown funds will continue to be applied
consist of interest, principal, deposits for insurance, to reduce the mortgage payment under the original terms
taxes, and related charges, and late charges. of the buydown plan.
Accordingly, payments received from the borrower must
be applied by the Servicer in the following order: B. Curtailments
1. Escrow deposits for insurance, taxes, etc. A curtailment is any application of additional principal
which does not reduce the unpaid principal balance to
2. Interest on the loan
zero. The Servicer may accept and apply a curtailment
3. Principal on the loan to reduce the principal balance only if the loan is current.
4. Late charge and any other fees due to the Servicer If a curtailment is received while a loan is not current,
and the funds received are insufficient to bring the loan
When the full amount of a payment is not received, the current, the funds must be deposited into the P&I
following procedure should be followed: Custodial Account until the loan is brought current.
1. If the deficiency in the required installment For delinquent loans, if the funds are sufficient to cover
(principal, interest, taxes and insurance) is $25 or any past due amounts, the funds must be used to bring
less, the amount applied to the borrower’s escrow the loan current. Any funds remaining after the loan is
account should be reduced, or current may be applied by the Servicer as an additional
payment of principal.
2. If the deficiency exceeds $25 or if the borrower has
no escrow account, the Servicer may return the Funds received in consideration of a partial release of
partial payment or deposit it in the P&I Custodial security must be applied to the outstanding principal
Account until sufficient funds are received. balance, and only after approval has been received from
the Buyer. Funds received when part of the property is
Whenever deficiencies are treated as unapplied taken by eminent domain must be applied to the
payments, the funds must be held in the P&I Custodial outstanding principal balance unless the Servicer
Account as unapplied until sufficient funds have been recommends, and the Buyer approves, other application
received to complete the full installment. Under no of the funds.
circumstances should the principal or interest be shorted
for the amount of the deficiency. Short payments that Approval must be obtained from Buyer for any
are deposited into suspense accounts should be properly modifications that reduce the monthly payment due to
accounted for and appear on the borrower’s payment application of a curtailment.
history.
Curtailments and prepaid curtailments must be reported
A. Temporary Buydown Funds to the Buyer separately on or in a format similar to the
Curtailments and Prepaid Installments Report (WAMU
A loan with a temporary buydown must be amortized at 4007).
the note interest rate, not at the bought-down interest
rate. This will ensure that payments are collected to
properly amortize the loan.

Servicing Guide: Loan Accounting 304-1


(Rev. 08/10/05)
(Last Reviewed 05/16/08)
Section 304. Loan Accounting
C. Curtailment Adjustments principal and interest advances are not expected to
become an expense to the Servicer. See Section 207 for
If a curtailment is made with respect to a mortgage loan, a further discussion of acquired properties.
the principal balance of the mortgage loan must be
reduced be an amount equal to1/12 of the product of (i) B. Servicing Expenses
the curtailment and (ii) the applicable note rate.
For each loan, the Servicer must advance all servicing
If a curtailment is applied to a loans that is more than one costs and expenses as they occur, subject to prior
month prepaid the curtailment adjustment is applied approval from the Buyer when required. These expenses
raising the schedule UPB, to correctly amortize the loan. may include the cost of:

D. Liquidations • The preservation, repairs and protection of the


property,
A liquidation is the application of a payment to a loan • Any enforcement of the note and security
which reduces the unpaid principal balance to zero. instrument, including foreclosures,
Interest should be calculated on a 365 day per diem basis
in the month of liquidation. • The management and liquidation of the property if it
is acquired in satisfaction of the loan, and
Liquidation proceeds must be deposited to the P&I
Custodial Account within 24 hours of receipt. The • Advances for tax and insurance.
Servicer must report liquidations on, or in a similar
format to, the Liquidation Schedule (WAMU 4009)
C. Reimbursement of Expenses
which must be received by the Buyer within 48 hours of Expenses may be recovered from the borrower upon
the deposit. reinstatement from the foreclosure. In no case may the
Servicer recover expenses from the principal and interest
The Servicer must remit liquidation funds within 48
payments on another loan or from another borrower’s
hours of receipt to the Buyers account. The remittance
escrow account.
amount must agree to the Liquidation Schedule (WAMU
4009). The Servicer must complete and submit a Statement of
Expenses (WAMU 3001) within 30 days of final
The Servicer must also complete and send a Release of
disposition of the property. Refer to Section 207.07 C
Mortgage form. The Release must be submitted in a
for further details. Copies of paid receipts or canceled
timely manner, and any penalties for delays in recording
checks must be included for each item listed on the
will be the responsibility of the Servicer. The Release
Statement of Expenses. In lieu of receipts for tax and
should conform to the one normally used in the state in
insurance disbursements, the Buyer will accept certified
which the mortgaged property is located. Any special
copies of loan histories highlighting such disbursements.
requirements for that state should be noted by the
Servicer for our information. 304.04 Adjustable Rate Loans
304.03 Advances A. Interest or Payment Adjustments
A. Delinquency Advances The Servicer must enforce each adjustable rate mortgage
according to its terms. This includes making periodic
If amounts deposited into the Servicer’s P&I Custodial
interest rate and payment adjustments as specified by the
Account are insufficient to cover the amount due to the
note. The Servicer must establish procedures to monitor
Buyer on the ACH withdrawal date, the Servicer must
the applicable index and to send and receive notices to
advance its own funds with respect to delinquent and
and from the borrower in order to assure that the Servicer
foreclosed loans and REO properties. If the amount on
uses the latest available value for the index in
deposit in the P&I Custodial Account for any one pool
determining an interest rate change and that adjustments
on the day immediately preceding the withdrawal date is
to the interest rate are correctly made in a timely fashion.
less than the amount of the monthly withdrawal due, the
The new monthly principal and interest payment must be
Servicer must have on deposit in the P&I Custodial
sufficient to fully amortize the principal balance as of the
Account an amount equal to the monthly withdrawal.
adjustment date over the then remaining term of the note
The amount advanced by the Servicer must be equal to
at the adjusted loan rate, unless otherwise stated in the
the principal amount plus interest at the net rate for the
note.
applicable payment cycle of the delinquent loan(s).
If the Servicer’s failure to properly make a scheduled
The Servicer may reimburse itself for advances from
interest rate or payment adjustment affects the Buyer’s
collection of payments from the borrower. Monthly
304-2 Servicing Guide: Loan Accounting
(Rev. 08/10/05)
(Last Reviewed 05/16/08)
Section 304. Loan Accounting
ability to make future adjustments under the note, its accounting records and report this information to the
repurchase may be required. The Servicer shall Buyer on the ARM Adjustments Report (WAMU 4013)
indemnify and hold the Buyer harmless against any or equivalent form. The Servicer must notify the
losses, claims, liabilities, and expenses (including borrower of any payment change even when the loan is
attorney’s fees) incurred by the Buyer as a result of the delinquent or in foreclosure, following the same
failure to properly adjust the interest rate or payment procedures as for a current loan.
amount of any loan serviced hereunder.
G. Delinquency Advances
B. ARM Indices
For adjustable rate loans, the amounts advanced monthly
Indices published in the Federal Reserve Bulletin H.15 for delinquent principal and interest must reflect any
(519) are considered, for the purposes of interest rate changes in the interest rate and monthly payment
adjustment, to be in effect on the date of release. amount.

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

Servicing Guide: Loan Accounting 304-3


(Rev. 08/10/05)
(Last Reviewed 05/16/08)
Section 304. Loan Accounting
This page left intentionally
blank.

304-4 Servicing Guide: Loan Accounting


(Rev. 08/10/05)
(Last Reviewed 05/16/08)
Section 305. Reporting to Washington Mutual Mortgage
Securities Corp.
The Servicer is required to report certain compliance 4. Collection Report (WAMU 4008). This report must
items and accounting reports each month on the activity include payments collected on all loans including
and status of loans purchased by the Buyer, beginning those 30 or more days delinquent as of the end of the
with the month of purchase. Servicers may choose any previous month.
of the following media for reporting purposes: 5. A Trial Balance Report (WAMU 4018)
• hard copy (paper) 6. Delinquency Report --Refer to Section 205.01 (B)
• electronic file sent via email 7. New Loans Report (WAMU 4017) and Loans
• other electronic media (e.g., magnetic tape, disk) Removed Report
8. Copy of the Liquidation Schedule (WAMU 4009)
The method chosen should be based on loan servicing
volume, and implementation must be coordinated 9. Loan histories as requested
through the Buyer’s Servicer Accounting and IT
Departments. Servicers are required to report In addition to the above mentioned accounting package,
electronically for each WMMSC assigned servicer the Buyer also requires a Foreclosure
number that contains 100 or more loans. Regardless of Recommendation/Individual Delinquency Report
the media used for reporting purposes, the format must (WAMU 3003) by the fifth business day of the month.
meet the Buyer requirements. Refer to Appendix E for As detailed in Section 205, the Buyer requires monthly
complete details. responses to Exception Turnaround Reports and
Excessive Delinquency Notification Letters within stated
305.01 Monthly Reporting Package time frames.

The Servicer must submit monthly consolidated The Servicer is also required to disclose any instances of
accounting reports for all loans serviced in the WMMSC material default under Regulation AB 17 CFR 229.1100-
assigned servicer number. 1123, with respect to the servicing of any mortgage
loans. The Servicer must disclose any instance of
The monthly accounting package must be received by material default in the month such default has been
the Buyer no later than 5:00 PM EDT on the fifth deemed to be material, along with a recommendation to
business day of each month, beginning the month the Buyer for correcting the material default.
following the purchase of the loans.
A. Penalties for Late Submission of Reports
The monthly accounting cycle is a calendar month and
begins with the month of purchase. A Servicer that fails to provide accurate accounting and
servicing reports within the time frame required violates
The monthly collection activity is reported on an actual
its responsibilities and is subject to the following
loan detail basis with remittances made on a scheduled
remedies:
basis. The monthly accounting package must contain the
following types of reports or be in an automated format: 1. For the first late reporting offense in any
consecutive 12-month period, a warning letter is
1. Remittance Reconciliation (WAMU 4010). This
sent to the managing officer of the institution, with a
report reconciles all P&I Custodial Account activity
copy to the accounting department;
for the previous month at Servicer level.
2. For the second late reporting offense in any
2. Analysis of Custodial Accounts (WAMU 4011).
consecutive 12-month period, the Servicer is
This report reconciles all T&I Custodial Account
charged a $250 late reporting fee, per report;
activity at Servicer level.
3. For the third late reporting offense in any
3. Curtailments and Prepaid Installments Report
consecutive 12-month period, the Servicer is
(WAMU 4007). This report must be completed and
charged a $500 late reporting fee, per report;
submitted whenever additional principal is ap-
plied to a loan. Prepaid installments must be 4. For the fourth late reporting offense in any
reported separately from curtailments. A curtailment consecutive 12-month period, the Servicer will be
is any application of additional principal which does terminated for cause.
not reduce the unpaid principal balance to zero.
Inaccurate or incomplete reports will be considered the
Curtailments are permitted only when the loan is
same as late reporting for the purpose of assessing
current. Prepaid installments are payments received
penalties.
prior to the scheduled due date.

Servicing Guide: Loan Accounting 305-1


(Rev.05/16/08)
Section 305. Reporting to Washington Mutual Mortgage
Securities Corp.
The Buyer reserves the right to change the late reporting withdrawal date. This notice will enable the Servicer to
fee and all other remedies at any time, at its sole determine if sufficient funds are available in a P&I
discretion. Custodial Account and to make any necessary advances.

305.02 Reporting Liquidations If the Servicer does not receive a Notice of Automatic
Withdrawal, the Servicer must contact the Buyer to
A Liquidation Schedule (WAMU 4009) must be obtain the information. The Servicer is responsible for
submitted whenever the principal balance of a loan is assuring that sufficient funds are available for
reduced to zero. One form is submitted for each loan withdrawal.
liquidated. The original form must be received by the
Buyer within 48 hours of payoff and be immediately For each Servicer, the Notice of Automatic Withdrawal
followed by: and the actual debit will consist of:
1. Statement of Loan Paid-in-Full/Request for Release • The total of (1) the aggregate scheduled interest
of Mortgage Documents (WAMU 4019) portions (whether or not collected) of the monthly
installments due on the first day of the month in
2. Legal document conveying, releasing or satisfying which the withdrawal date occurs (this amount is
lien equal to one month’s interest calculated at the net
If circumstances prevent the Servicer from providing the rate) and the total of any adjustments affecting the
conveyance document within five (5) business days, the aggregate schedule of principal, and (2) the
“liquidation package” should not be held up. At the time aggregate unscheduled interest collected on loans in
the release document is submitted, the Servicer must the pool during the month before the month in which
have a cover letter attached advising the date the a withdrawal date occurs.
“liquidation package” was sent and provide the Buyer • The total of (1) the aggregate scheduled principal
loan number. portions (whether or not collected) of the monthly
installments due on the first day of the month in
Each time a loan is paid in full, or otherwise liquidated,
which the withdrawal date occurs and the total of
the funds must be deposited to the P&I Custodial
any adjustments affecting the aggregate schedule of
Account within 24 hours after they are received. The
interest, and (2) the aggregate unscheduled principal
Servicer must remit liquidation funds within 48 hours of
collected on loans in the pool the month before the
receipt to the Buyer’s account. The remittance amount
month in which a withdrawal date occurs.
must agree to the Liquidation Schedule (WAMU 4009).
Refer to Appendix B for wire instructions when • Less the aggregate funds previously wire transferred
remitting liquidation funds. to the Buyer on liquidations and interim remittances.
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

305-2 Servicing Guide: Loan Accounting


(Rev.05/16/08)
Section 305. Reporting to Washington Mutual Mortgage
Securities Corp.
The table below summarizes the monthly accounting loan level discrepancies. Any resulting interest
activities, including the Servicer’s reporting differences will be charged to the Servicer.
responsibilities, from the purchase date through the date
of the first principal and interest withdrawal. The B. Adjustable Rate Mortgages
example dates show what would actually have occurred
If the ARM Adjustments Report (WAMU 4013) is not
if the sale had been transacted on November 15, 2002.
submitted accurately and on time, the Buyer will make
Reporting Time Example certain assumptions regarding the current interest rate
Responsibility Line Date and monthly payment adjustment for all ARM loans due
The Buyer purchases loans Friday 11/15/02 to adjust in the given month. The Notice of Automatic
and forwards the Purchase Withdrawal will reflect these assumptions. If our
Advice to the Servicer. assumptions are incorrect, our withdrawal could result in
an overdraft of the Servicer’s P&I Custodial Account. It
The Servicer’s first cut-off End of the 11/30/02 is the Servicer’s responsibility to ensure that the Buyer
date. month receives the ARM Adjustments Report on a timely basis
to avoid such incorrect withdrawals.
The Buyer receives the 5th business
Servicer’s monthly day 12/06/02 C. Balloon Resets
accounting package. For Balloon Reset Mortgages with reset options the
The Servicer receives the Two borrower may reset to a modified fixed rate/ARM loan
Notice of Automatic business 12/18/02 depending on the original balloon note. Most of the
Withdrawal from the Buyer. days before jumbo balloon loans reset into an ARM for an additional
withdrawal 30 years (40 years total). In most cases, 5, 7, and 10 year
balloon loans have an option to reset into a fixed rate,
The Servicer reviews the One fully amortizing payment for the remainder of the 30
P&I Custodial Account to business day 12/19/02 years.
ensure that sufficient funds, before
per the Notice of Automatic withdrawal It is the Servicer’s responsibility to notify the borrower
Withdrawal, are deposited. at least 60 calendar days in advance of the balloon
maturity date. The Servicer must also deliver to the
The Buyer withdraws the 20th
borrower a description of the historical performance of
total amount due, per the calendar day 12/20/02
the applicable index and the maximum interest rate,
Notice of Automatic or preceding
which may be due under the modification. The borrower
Withdrawal, from the P&I business day
must provide acceptable proof of occupancy. At the time
Custodial Account via an
of the balloon reset the note holder must remain in first
ACH transaction.
lien status. Overall caps and floors are stated in the
NOTE: Notice of any liquidation and liquidation original balloon note.
funds must be received by Washington Mutual
Mortgage Securities Corp. on the Liquidation Once the Servicer has received the borrower’s notice of
Schedule (WAMU 4009) within 48 hours of intent to reset or not, the Buyer should be notified of the
receipt of funds. interest -- only payment for the maturity month if
resetting or the intent to pay in full at the maturity date.
A. Monthly Accounting Package In most cases the balloon reset should be completed prior
to the maturity date of the balloon. Upon completion of
If the monthly accounting package is not submitted the balloon reset, the Buyer should be provided a
accurately and on time, the Buyer may not be able to completed copy of the balloon modification documents.
process the unscheduled activity to the loans before the
close of the current cycle. This could result in a
D. Recast Modification
difference between the amount drafted per the Notice of
The Servicer must get prior approval from the Buyer for
Automatic Withdrawal and the remittance amount
a recast of the monthly principal and interest payment
calculated by the Servicer. If this should occur, the
following the borrower’s payment of a substantial
unscheduled activity will be applied to the loan in the
curtailment. Neither the interest rate nor the maturity
following cycle. It is the Servicer’s responsibility to
date may be altered. Upon requesting approval the
ensure that the Buyer receives an accurate monthly
Servicer should provide the Buyer with the following
accounting package by the required due date to avoid
information: loan number, borrower’s name and address

Servicing Guide: Loan Accounting 305-3


(Rev.05/16/08)
Section 305. Reporting to Washington Mutual Mortgage
Securities Corp.
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.

305-4 Servicing Guide: Loan Accounting


(Rev.05/16/08)
Section 305. Reporting to Washington Mutual Mortgage
Securities Corp.
This page left intentionally
blank.

Servicing Guide: Loan Accounting 305-5


(Rev.05/16/08)
Section 306. Reporting and Remitting to Washington
Mutual Mortgage Securities Corp. for Interim Servicers
An Interim Servicer is defined as a servicer who is 3. Curtailments and Prepaid Installments Report
approved to service loans to the Buyer for an interim (WAMU 4007). This report must be completed and
period of time until the servicing of the loans is submitted whenever additional principal is applied
transferred to Washington Mutual Bank, FA (WAMU). to a loan. Prepaid installments must be reported
separately from curtailments. A curtailment is any
One or more new WMMSC assigned servicer numbers application of additional principal which does not
will be issued to an Interim Servicer. Separate WMMSC reduce the unpaid principal balance to zero.
assigned servicer numbers will be assigned to an Interim Curtailments are permitted only when the loan is
Servicer for portfolios containing servicing released current. Prepaid installments are payments received
loans and for servicing retained loans. prior to the scheduled due date.
An Interim Servicer is required to report certain 4. Collection Report (WAMU 4008). This report must
accounting data each month on the activity and status of include payments collected on all loans including
loans purchased by the Buyer, beginning with the month those 30 or more days delinquent as of the end of the
of purchase. Interim Servicers may choose either of the previous month.
following media for reporting purposes:
5. A Trial Balance Report (WAMU 4018)
• Electronic file sent via email 6. Delinquency Report (WAMU 3002)
• Other electronic media (e.g., magnetic tape, disk) 7. New Loans Report (WAMU 4017) and Loans
Removed Report
The method chosen should be based on loan servicing
volume, and implementation must be coordinated 8. Copy of the Liquidation Schedule (WAMU 4009)
through the Buyer’s Servicer Accounting and IT 9. Loan histories as requested
Departments. Interim Servicers are required to report
electronically for each WMMSC assigned servicer In addition to the above mentioned accounting package,
number regardless of the number of loans in the the Buyer also requires a Foreclosure
portfolio. Regardless of the media used for reporting Recommendation/Individual Delinquency Report
purposes, the format must meet the Buyer’s (WAMU 3003) and monthly REO Exception Report
requirements. Refer to Appendix D for complete details. (WAMU 3009) by the fifth business day of the month.

306.01 Monthly Reporting Package A. Penalties for Late Submission of Reports


The Interim Servicer must submit monthly consolidated An Interim Servicer that fails to provide accurate
accounting reports for all loans serviced in the WMMSC accounting and servicing reports within the time frame
assigned servicer number. required violates its responsibilities and is subject to the
following remedies:
The monthly accounting package must be received by
the Buyer no later than 5:00 PM EDT on the fifth 1. For the first late reporting offense in any
business day of each month, beginning the month consecutive 12-month period, a warning letter is
following the purchase of the loans. sent to the managing officer of the institution, with a
copy to the accounting department;
The monthly accounting cycle is a calendar month and
2. For the second late reporting offense in any
begins with the month of purchase.
consecutive 12-month period, the Interim Servicer is
The monthly collection activity is reported on an actual charged a $250 late reporting fee, per report;
loan detail basis with remittances made on a scheduled 3. For the third late reporting offense in any
basis. The monthly accounting package must contain the consecutive 12-month period, the Interim Servicer is
following types of reports or be in an automated format: charged a $500 late reporting fee, per report;
1. Remittance Reconciliation (WAMU 4010). This 4. For the fourth late reporting offense in any
report reconciles all P&I Custodial Account activity consecutive 12-month period, the Interim Servicer
for the previous month at Servicer level. will be terminated for cause.
2. Analysis of Custodial Accounts (WAMU 4011). Inaccurate or incomplete reports will be considered the
This report reconciles all T&I Custodial Account same as late reporting for the purpose of assessing
activity at Servicer level. penalties.

Servicing Guide: Loan Accounting 306-1


(Rev. 05/16/08)
Section 306. Reporting and Remitting to Washington Mutual
Mortgage Securities Corp. for Interim Servicers
The Buyer reserves the right to change the late reporting with Washington Mutual Bank, FA for curtailment,
fee and all other remedies at any time, at its sole prepayment and delinquency activity that occurred in the
discretion. month prior to the servicing transfer date. The new
servicer (Washington Mutual Bank, FA) will be
306.02 Reporting Liquidations responsible for remitting the scheduled payment and the
curtailment activity for the prior month to the Buyer.
A Liquidation Schedule (WAMU 4009) must be
submitted whenever the principal balance of a loan is In the month the loans are transferred, the Interim
reduced to zero. One form is submitted for each loan Servicer is only required to remit funds for paid off
liquidated. The original form must be received by the loans.
Buyer within 48 hours of payoff and be immediately
followed by: For example, if the servicing transfer date is 04/01/03,
the procedures for the Interim Servicer for the final
1. Statement of Loan Paid-in-Full/Request for Release month of reporting month are as follows:
of Mortgage Documents (WAMU 4019)
2. Legal document conveying, releasing or satisfying 03/31/03 Transfer Month – Last month the Interim
lien Servicer would be required to submit all monthly
accounting reports by 4/7/03 (5th business day).
If circumstances prevent the Interim Servicer from
providing the conveyance document within five (5) 4/18/03 Draft / Remit Date – Interim Servicer: Remit
business days, the “liquidation package” should not be funds due for loans that are paid off 3/1/03 – 3/31/03.
held up. At the time the release document is submitted, New Servicer (Washington Mutual Bank, FA ): Remit
the Interim Servicer must have a cover letter attached 4/01/03 scheduled payment and curtailment activity for
advising the date the “liquidation package” was sent and 3/01/03 – 3/31/03.
provide the Buyer loan number.
The Buyer will debit the P&I Custodial Account via the
Each time a loan is paid in full, or otherwise liquidated, ACH network on the 20th calendar day of each month or
the funds must be deposited to the P&I Custodial on the preceding business day if the 20th calendar day
Account within 24 hours after they are received. The falls on a weekend or holiday. These withdrawals begin
Interim Servicer must remit liquidation funds within 48 in the month following the month of purchase of a loan.
hours of receipt to the Buyer’s account. The remittance
amount must agree to the Liquidation Schedule (WAMU The Buyer will send a Notice of Automatic Withdrawal
4009). to the Interim Servicer within two business days prior to
the withdrawal date. This notice will enable the Interim
Failure to remit funds to the Buyer within these time Servicer to determine if sufficient funds are available in
frames will result in a penalty assessed to the Interim a P&I Custodial Account and to make any necessary
Servicer at a daily rate equal to the greater of 1) the advances.
highest prime rate quoted in the Wall Street Journal
regular column entitled “Money Rate” on the first If the Interim Servicer does not receive a Notice of
business day of each month, plus two (2.0%) percent, or Automatic Withdrawal, the Interim Servicer must
2) the note rate of the liquidating loan. If the prime rate contact the Buyer to obtain the information. The
is not published, the rate to be charged will be Servicer is responsible for assuring that sufficient funds
determined by the Buyer. There is a minimum charge of are available for withdrawal.
$50.00 on all penalties assessed.
For each Interim Servicer, the Notice of Automatic
306.03 Monthly Reporting and Withdrawal and the actual debit will consist of:
Remittance Summary • The total of (1) the aggregate scheduled interest
portions (whether or not collected) of the monthly
The Interim Servicer will be required to report and remit installments due on the first day of the month in
as stated in Section 305.03 except as follows. In the which the withdrawal date occurs (this amount is
month in which servicing of the interim serviced loans is equal to one month’s interest calculated at the net
transferred to Washington Mutual Bank, FA, the Interim rate) and (2) the aggregate unscheduled interest
Servicer is required to report loan level activity to the collected on loans during the month before the
Buyer for the prior month. month in which a withdrawal date occurs.
The Interim Servicer will be responsible for performing a • Plus, the total of (1) the aggregate scheduled
test of expected principal and interest, and to settle cash principal portions (whether or not collected) of the

306-2 Servicing Guide: Loan Accounting


(Rev. 05/16/08)
Section 306. Reporting and Remitting to Washington
Mutual Mortgage Securities Corp. for Interim Servicers
monthly installments due on the first day of the Reporting Time Example
month in which the withdrawal date occurs, and (2) Responsibility Line Date
the aggregate unscheduled principal collected on The Buyer withdraws the 20th 12/20/02
loans the month before the month in which a total amount due, per the calendar day
withdrawal date occurs; Notice of Automatic or preceding
• Less the aggregate funds previously wire transferred Withdrawal, from the P&I business day
to the Buyer on liquidations and interim remittances. Custodial Account via an
ACH transaction.
For those Interim Servicers whose servicing contract
specifies their option to remit funds to the Buyer, the NOTE: Notice of any liquidation and liquidation
amount wired must agree to the remittance amount due funds must be received by Washington Mutual
on the Notice of Automatic Withdrawal. Refer to Section Mortgage Securities Corp. on the Liquidation
303 Custodial Accounts. Schedule (WAMU 4009) within 48 hours of
receipt of funds.
The table below summarizes the monthly accounting
activities, including the Interim Servicer’s reporting A. Monthly Accounting Package
responsibilities, from the purchase date through the date
If the monthly accounting package is not submitted
of the first principal and interest withdrawal. The
accurately or on time, the Buyer may not be able to
example dates show what would actually have occurred
process the unscheduled activity to the loans before the
if the sale had been transacted on November 15, 2002.
close of the current cycle. This could result in a
Reporting Time Example difference between the amount drafted per the Notice of
Responsibility Line Date Automatic Withdrawal and the remittance amount
The Buyer purchases loans Friday 11/15/02 calculated by the Interim Servicer. If this should occur,
and forwards the Purchase the unscheduled activity will be applied to the loan in the
Advice to the Interim following cycle. It is the Interim Servicer’s responsibility
Servicer. to ensure that the Buyer receives an accurate monthly
accounting package by the required due date to avoid
The Interim Servicer’s first End of the 11/30/02 loan level discrepancies.
cut-off date. month
B. Adjustable Rate Mortgages
The Buyer receives the 5th business 12/06/02
Interim Servicer’s monthly day If the ARM Adjustments Report (WAMU 4013) is not
accounting package. submitted accurately and on time, the Buyer will make
certain assumptions regarding the current interest rate
The Interim Servicer Two 12/18/02 and monthly payment adjustment for all ARM loans due
receives the Notice of business to adjust in the given month. The Notice of Automatic
Automatic Withdrawal from days before Withdrawal will reflect these assumptions. If the
the Buyer. withdrawal Buyer’s assumptions are incorrect, the withdrawal could
The Interim Servicer One 12/19/02 result in an overdraft of the Interim Servicer’s P&I
reviews the P&I Custodial business day Custodial Account. It is the Interim Servicer’s
Account to ensure that before responsibility to ensure that the Buyer receives the ARM
sufficient funds, per the withdrawal Adjustments Report on a timely basis to avoid such
Notice of Automatic incorrect withdrawals.
Withdrawal, are deposited.
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.

Servicing Guide: Loan Accounting 306-3


(Rev. 05/16/08)
Section 306. Reporting and Remitting to Washington Mutual
Mortgage Securities Corp. for Interim Servicers
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.

306-4 Servicing Guide: Loan Accounting


(Rev. 05/16/08)
Section 306. Reporting and Remitting to Washington
Mutual Mortgage Securities Corp. for Interim Servicers
This page left intentionally blank.

Servicing Guide: Loan Accounting 306-5


(Rev. 05/16/08)
Section 401. Representations, Warranties and Obligations
of Servicer
All of the representations, warranties and obligations B. Washington Mutual Mortgage Securities
contained in this Servicing Guide are made by the Corp. Forms
Servicer as to each mortgage serviced on behalf of the
Buyer, unless expressly waived in writing by the Buyer. The Servicer has completed and transmitted all required
All of said representations, warranties and obligations reports to the Buyer in the time frame stated in this
made by the Servicer are made and given to the Buyer Servicing Guide, in accordance with the instructions
with knowledge that the Buyer relies upon such provided by the Buyer.
representation, warranties and obligations as continuing
consideration for allowing the Servicer to retain the C. Use of Buyer’s Name
servicing rights to each mortgage serviced for the Buyer. The Servicer warrants that it will confine its use of the
The Servicer makes such representations and warranties Washington Mutual Mortgage Securities Corp. name and
and agrees to such obligations with specific knowledge logo to those uses specifically authorized by the Buyer in
that the Buyer intends to sell each mortgage to third the Seller’s Guide and Servicing Guide.
parties in reliance upon the Servicer’s representations,
warranties and obligations. All representations, D. Inspection of Records
warranties, and obligations of the Servicer shall survive The Servicer shall allow the Buyer, or its agent or
any investigation made by or on behalf of the Buyer, its designee, during normal business hours, to inspect all
assignee or designee, liquidation of the mortgage, books and records of the Servicer pertaining to its
purchase of the loan by the Buyer, its designee or mortgage operations and to any loans serviced on behalf
assignee, repurchase of the mortgage or property, of the Buyer.
termination of the Selling and Servicing Contract, or
other similar event or transfer or sale of servicing, and all E. Compliance with Selling and Servicing
such representations, warranties, and obligations shall Contract and Servicing Guide
inure to the benefit of the Buyer, its successors and
Servicer has complied and will comply with all the
assigns.
terms, conditions and requirements of the Selling and
Unless otherwise specified, the representations and Servicing Contract including this Servicing Guide as
warranties contained in this Servicing Guide are made such shall be amended during the time loans are serviced
with respect to each mortgage as of the date of delivery on behalf of the Buyer.
to the Buyer of any oral or written report or remittance
related thereto. F. Normal Servicing Procedures Applied
The Servicer’s servicing of loans on behalf of the Buyer
401.01 General is in accordance with the standards applied to the
Servicer’s overall loan servicing portfolio, without
A. Qualification and Authorization discrimination in any manner against loans serviced on
The Servicer is duly qualified, licensed, registered, and behalf of the Buyer and in any event shall be consistent
otherwise authorized under all applicable federal, state with the servicing practices of loan servicers in good
and local laws and regulations to service and enforce standing in the industry.
loans on behalf of the Buyer in the jurisdiction where the G. No Disqualification or Suspension
properties securing such loans are located and shall
maintain such qualifications, licenses, registrations and The Servicer represents and warrants that its selling or
authorizations during the term of the Selling and servicing rights or privileges have not been suspended or
Servicing Contract. The Servicer is duly authorized to terminated by any other institution or government
execute, deliver and perform its obligations under the agency (including, but not limited to FHA, FNMA,
Selling and Servicing Contract, and such Selling and FHLMC, or GNMA) and shall promptly notify the Buyer
Servicing Contract (including the material incorporated in writing by certified mail of such suspension or
by reference therein) is a valid and binding obligation of termination.
the Servicer enforceable in accordance with its terms. H. Integrity of Custodial Accounts
The custodial accounts established hereunder are demand
accounts which have not been pledged or encumbered in
any manner.

Servicing Guide: Servicer Warranties 401-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 401. Representations, Warranties and Obligations
of Servicer
I. Eligible Servicer O. Conveyance of Servicing Rights to
The Servicer is an institution, whose accounts are Delinquent Mortgage Loans
insured by the Federal Deposit Insurance Corporation The Buyer has the option to acquire from the Servicer,
(FDIC), or is an FHA-Approved Mortgagee, and without the payment to Servicer of any compensation
continues to meet the eligibility standards as stated in therefore, the servicing rights relating to any mortgage
Section 101 of this Servicing Guide. loan which is delinquent or otherwise in default for
J. Accuracy of Information ninety (90) days or more. Upon the Servicer’s receipt of
written notice of the Buyer’s election to exercise such
Each report and remittance submitted by the Servicer to option, the Servicer shall, within ten (10) business days,
the Buyer is complete, truthful and accurate in all notify the applicable mortgagors of the transfer of the
respects. servicing rights in accordance with all applicable law. In
K. Compliance by Others addition, the Servicer shall deliver to the Buyer or its
designee all documents in the Servicer’s possession
When an action is performed by a third party for the which relate to the mortgage loan and take such other
Servicer, which the Servicer is required to perform under measures as reasonably requested by the Buyer or its
this Servicing Guide, the Servicer warrants that such designee in connection with the transfer of the servicing
third party has complied with all requirements of this rights.
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.

401-2 Servicing Guide: Servicer Warranties


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 401. Representations, Warranties and Obligations
of Servicer
This page left intentionally blank.

Servicing Guide: Servicer Warranties 401-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 402. Assignments and Recordations of Mortgages
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.

Servicing Guide: Servicer Warranties 402-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 402. Assignments and Recordations of Mortgages
This page left intentionally
blank.

402-2 Servicing Guide: Servicer Warranties


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 403. Remedies for Breach of Representations
and Warranties
403.01 Repurchase Obligations 403.02 Indemnity and Hold Harmless
Upon discovery by the Servicer of a breach of any Agreement
representation, warranty or obligation contained in the The Servicer shall indemnify the Buyer and hold the
Selling and Servicing Contract or this Servicing Guide, Buyer and its successors and assigns harmless against all
the Servicer shall give prompt written notice to the losses, damages, penalties, fines, forfeitures, court costs
Buyer. Upon the Buyer’s receipt of notice of the breach and reasonable attorneys’ fees, judgments, and any other
or independent discovery of any breach, the Buyer may, costs, fees and expenses resulting from any claim,
in its sole and absolute discretion, without regard to the demand, defense or assertion based or grounded upon, or
Servicer’s actual or implied knowledge of the breach of resulting from a breach of any representation, warranty
such representation, warranty or obligation (except to the or obligation contained in or made pursuant to the
extent the representation, warranty or obligation is Selling and Servicing Contract, including this Servicing
expressly conditioned upon Servicer’s knowledge), and Guide, or from any claim, demand, defense or assertion
in addition to and without limitation as to any other against or involving the Buyer based or grounded upon,
remedy accruing to the Buyer, require the Servicer to or resulting from such breach or a breach of a
repurchase the affected loans. representation, warranty or obligation made by the Buyer
The Servicer shall, without adjustment on the basis of in reliance upon any representation, warranty or
fees or charges payable by the Servicer, repurchase said obligation contained in the Selling and Servicing
loans upon the Servicer’s receipt of a repurchase demand Contract or this Servicing Guide.
from the Buyer. The repurchase price will represent the
outstanding principal balance of the applicable mortgage, The Servicer also agrees to indemnify and hold harmless
as determined by the Buyer, plus interest computed each of the Buyer, each Person, if any, who “controls”
thereon at the net rate up to the first day of the month the Buyer within the meaning of the Securities Act of
following the date of repurchase, and any related 1933, as amended, and their respective officers and
amounts such as all documentary stamp taxes, recording directors against any and all losses, penalties, fines,
fees, transfer taxes and all other expenses payable in forfeitures, legal fees and related costs, judgments and
connection with the transfer of the mortgage loan at the any other costs, fees and expenses that such Person may
time of repurchase, and any attorney’s fees, legal sustain arising out of third party claims based on (i) the
expenses, court costs, or other expenses that may have failure of the Servicer to deliver or cause to be delivered
been incurred by the Buyer in connection with the loan when required the Annual Certification, the Regulatory
or enforcement of the obligation to repurchase. These Officer’s Certificate and the Accountants’ Statement
funds must be wired to the Buyer within 15 calendar required pursuant to Section 101.05 of this Servicing
days of the demand, and be accompanied by a Guide, or (ii) any material misstatement or omission in
Liquidation Schedule (WAMU 4009) and any documents any certification pursuant to Section 302(a) of the
necessary to convey title. Sarbanes-Oxley Act of 2002 and Rules 13a-14 and 15d-
14 promulgated by the Securities and Exchange
If a third party purchases a loan or any interest in a
Commission thereunder made in reliance on any material
loan from the Buyer which is serviced by the
misstatement or omission contained in the Annual
Servicer, the Buyer may, at its option, exercise any rights
Certification (WAMU 1007) or the Regulatory Officer’s
or remedies at law or in equity on behalf of
Certificate (Form 31476) required under this Servicing
such party to the extent that such party does not
Guide.
affirmatively do so. If the Buyer must repurchase a
mortgage it has sold to a third party because the The Servicer shall also indemnify the Buyer and hold it
Servicer has failed to comply with the terms, repre- harmless against all court costs, reasonable attorneys’
sentations and warranties of the Selling and fees and any other costs, fees and expenses incurred by
Servicing Contract and this Servicing Guide, the the Buyer in enforcing the provisions of the Selling and
Servicer must repurchase the mortgage from the Servicing Contract or this Servicing Guide.
Buyer at an amount equal to the price at which the Buyer
was required to repurchase the mortgage, plus any The obligations of the Servicer under this Section shall
attendant cost or expense incurred by the Buyer in the survive the delivery and purchase of the mortgage,
course of repurchasing such mortgage. foreclosure, liquidation or repurchase of the mortgage
and suspension or termination of the Selling and
Servicing Contract.

Servicing Guide: Servicer Warranties 403-1


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 403. Remedies for Breach of Representations
and Warranties
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.

403-2 Servicing Guide: Servicer Warranties


(Rev. 8/03)
(Last Reviewed 05/16/08)
Section 403. Remedies for Breach of Representations
and Warranties
This page left intentionally blank .

Servicing Guide: Servicer Warranties 403-3


(Rev. 8/03)
(Last Reviewed 05/16/08)
Appendix A. Glossary of Terms
accountants statement: A statement by a firm of certified copy – A copy of a document with a signed
independent public accountants that is a member of the endorsement stating that the copy is a true and correct
American Institute of Certified Public Accountants to copy of the original document.
the effect that such firm has examined certain closing costs – Money paid by the buyers and sellers to
documents and records relating to the mortgage effect the closing of a mortgage. This normally
servicing operations of the Servicer substantially in includes an origination fee, discount points, title
compliance with the Uniform Single Attestation insurance, survey, attorney’s fee, and such prepaid
Program for Mortgage Bankers and that, on the basis of items as taxes and insurance escrow payments.
such examination, nothing has some to such firm’s condominium – A unit of real property to which title
attention that would indicate that such servicing has not is given, usually to the interior surfaces and a
been conducted in compliance therewith, except for (i) proportionate interest in certain common areas. Title to
such exceptions as such firm shall believe to be the common areas is in terms of percentages and refers
immaterial and (ii) such other exceptions as shall be set to the entire condominium project less the separately
forth in such statement. owned units.
accrued interest – The interest earned for the period of curtailment – An additional amount of money paid by
time that has elapsed since interest was last paid. the borrower which is applied to the outstanding
adjustable rate mortgage (ARM) – A mortgage in principal balance, but which does not reduce the
which the interest rate is periodically adjusted based on outstanding principal balance to zero.
the movement of a pre-selected index.
amortization – Payment of a debt by equal periodic custodial account – A bank account established by the
installments to retire principal at the end of a fixed Servicer for deposit of borrower’s funds. This account
period and to pay accrued interest on the outstanding may be for principal and interest, taxes and insurance
balance. or buydown funds.
appraisal – A report which sets forth an estimate or debt – Borrowed money, the repayment of which may
opinion of value. be either secured or unsecured with various possible
assumption – Agreement by a buyer to assume the repayment schedules.
liability for payment of an existing mortgage or deed of debt-to-income ratios – Ratios used to qualify a
trust. The original borrower remains liable unless borrower by comparing the borrower’s total monthly
specifically released by the Servicer. housing expense and total monthly debt to gross
automated clearing house (ACH) – The network income.
through which Washington Mutual Mortgage delinquency – The failure to make timely payments
Securities Corp. electronically debits the principal and under a loan agreement.
interest custodial account for the total amount due each
month as stated on the Notice of Automatic delinquency advances – Funds advanced by the
Withdrawal. Servicer to cover any deficit in the principal and
interest custodial account on the withdrawal date due to
buydown – Money advanced by a seller or builder to delinquent installments.
reduce the borrower’s monthly payments on a
mortgage either during the entire term of the mortgage due-on-sale clause – The clause found in the security
or for the first few years. instrument that requires the payment of the entire loan
balance upon sale or transfer of ownership of the
buydown account – An account in which funds are secured property.
held for application as part of the monthly mortgage
payment when each payment comes due during the equity – The difference between fair market value and
term of the buydown. the owner’s indebtedness on the mortgage.
Buyer loan number – The identification number escrow account – A trust account which is established
assigned by Washington Mutual Mortgage Securities to hold funds allocated for the payment of real estate
Corp. to each loan purchased. taxes, hazard or mortgage insurance premiums as they
are received each month and until such time as they are
calendar month-end – The accounting period cutoff disbursed to pay related bills.
for reporting to Washington Mutual Mortgage
Securities Corp. The date of the cutoff will always be escrow holdback – Funds held in escrow for the
the last business day of the month. completion of postponed improvements or repairs.

Servicing Guide: Appendices V. A-1


(Rev. 8/03)
Appendix A. Glossary of Terms
FDIC – A term used to refer to the Federal Deposit administration of government housing and urban
Insurance Corporation which is a federally-sponsored development programs.
corporation who insures deposits in national banks and land-to-value – The ratio of the value of the land to the
other subscribing financial institutions. lower of the purchase price or current appraised value
FHA mortgage – A mortgage that is insured by the expressed as a percentage.
Federal Housing Administration (FHA); may be lease – A written agreement between the property
referred to as a ‘government’ mortgage. owner and a tenant that contains the conditions under
FHLMC (Freddie Mac) – A term commonly used to which the tenant may possess and use the real estate for
refer to the Federal Home Loan Mortgage Corporation, a specified period of time.
which is a congressionally-chartered corporation that lifetime interest rate cap – The maximum interest rate
purchases conventional mortgages in the secondary that may ever be charged over the life of a mortgage on
mortgage market. an ARM.
first mortgage – A mortgage which is the primary lien liquidation – The application of a payment to a
against a property. mortgage loan which reduces the outstanding principal
fiscal year – Any 12-month period which is used for balance to zero.
financial reporting and preparation of balance sheets, loan closing date – The date on which loan proceeds
profit and loss statements and other financial are disbursed to the borrower.
summaries.
loan-to-value (LTV) – The ratio of the outstanding
fixed rate mortgage – A mortgage for which the principal balance of the mortgage to the lower of the
interest rate is set for the entire term of the loan. If the appraised value or purchase price of the mortgaged
interest rate changes due to enforcement of the due-on- property expressed as a percentage.
sale provision, the mortgage is considered a fixed-rate
mortgage. maximum net rate – The net rate is the mortgage
interest rate (note rate) less the lender’s servicing fee.
FNMA (Fannie Mae) – A term commonly used when The maximum net rate and corresponding price
referring to the Federal National Mortgage Association. establish the required net yield to Washington Mutual
gift letter – A signed statement describing the amount Mortgage Securities Corp. for fixed rate mortgages.
of any cash gift used by the borrower to qualify for a Fixed rate mortgages with net rates that are less than
loan with reference that the gift need not be repaid. the minimum net rate will be priced to produce the
GNMA (Ginnie Mae) – A term commonly used to required net yield.
refer to the Government National Mortgage month of purchase – The month in which Washington
Association, (part of HUD), which administers the Mutual Mortgage Securities Corp. funds a loan.
mortgage-backed securities program; channels new monthly withdrawal – The total of the principal and
sources of funds into residential financing through the interest amounts to be debited by Washington Mutual
sale of privately issued securities which carry a GNMA Mortgage Securities Corp. on the withdrawal date via
guaranty. an ACH transaction. This amount will be stated on the
gross margin – The sum of the net margin and the Notice of Automatic Withdrawal.
Seller’s servicing fee. mortgage loan – A loan secured by real property and
hazard insurance – An insurance contract, whereby evidenced by formal documents, including the security
an insurer undertakes to compensate the insured for instrument, note, title evidence and all other necessary
loss on property because of physical damage by fire, documents and papers, which are executed by the
wind or other natural disasters. borrower when pledging the property as security for
homeowners’ association – A nonprofit association or the payment of a debt.
corporation comprised of homeowners within a mortgage interest rate – The note rate or rate of
particular development whose purpose is to maintain interest paid by the borrower.
the common areas of a PUD or condominium project. negative amortization – The mortgage payment
In a condominium project, the group does not have schedule in which the outstanding principal balance
ownership of the common area, while in a PUD increases instead of decreasing since the payment does
project, the group does hold title to the common areas. not cover the full amount of interest due in that
HUD – The U.S. Department of Housing and Urban payment period. The unpaid interest is added to the
Development; responsible for the implementation and outstanding principal balance.

V. A-2 Servicing Guide: Appendices


(Rev. 8/03)
Appendix A. Glossary of Terms
net margin – The net margin is quoted on ARMs and second mortgage – A mortgage that has a lien position
is the gross margin minus the Seller’s servicing fee. It subordinate to the first mortgage.
is used to calculate the new interest rate at the time of security instrument – A mortgage, deed-of-trust or
an interest rate adjustment by adding it to the current other document evidencing a security interest in the
index and the Seller’s servicing fee. real property securing a mortgage loan.
net rate – The mortgage interest rate (note rate) less seller – The term used in the Seller Guide when
the Seller’s servicing fee. This is the rate passed referring to a Washington Mutual Mortgage Securities
through to Washington Mutual Mortgage Securities Corp. approved Seller’s obligation in originating and
Corp. selling loans to Washington Mutual Mortgage
net worth – The value of all of a company’s or Securities Corp.
individual’s assets minus its total liabilities used as a Seller/Servicer ID number – The number assigned to
means to indicate creditworthiness or financial a Seller/Servicer upon approval by Washington Mutual
strength. Mortgage Securities Corp.
net yield – The required yield to Washington Mutual Servicer – The term used in the Servicing Guide when
Mortgage Securities Corp. referring to a Washington Mutual Mortgage Securities
note – The applicable form of instrument that Corp. approved Servicer’s obligation in servicing loans
evidences the mortgage loan, including any addenda. on the behalf of Washington Mutual Mortgage
P&I Custodial Account – One or more custodial Securities Corp.
accounts into which is deposited the principal and servicing fee – The fee received by the Servicer in
interest portions of mortgage loan payments. compensation for servicing mortgages purchased by
planned unit development (PUD) – A development in Washington Mutual Mortgage Securities Corp.,
which each unit owner has title to a residential lot and expressed as a percentage. This fee is calculated by
building and a non-exclusive easement on the common subtracting the net rate from the mortgage interest rate
areas of the project. The owner may have an exclusive (note rate) of the loan.
easement over some parts of the common areas, for servicing advances – Funds advanced by the Servicer
example, a parking space. to cover servicing costs and expenses as they occur.
prepaid installment – A payment received prior to the survey – A measurement of land, prepared by a
scheduled due date but which is not applied until such registered land surveyor, showing the location of the
due date. land with reference to known points, its dimensions,
price – The percentage of par Washington Mutual and the location and dimensions of any improvements.
Mortgage Securities Corp. will pay for a loan approved T&I Custodial Account – One or more custodial
for purchase. Par is 100% of the unpaid principal accounts into which is deposited the portion of
balance of the loan. mortgage loan payments intended to pay for taxes and
projected principal balance – The unpaid principal insurance.
balance remaining after the application of the payment VA mortgage – A mortgage that is guaranteed by the
due on the first day of the month in which Washington VA (Veterans Administration). This type of loan may
Mutual Mortgage Securities Corp. purchases a be referred to as a “government loan”.
mortgage. withdrawal date – The date on which Washington
purchase date – The date Washington Mutual Mutual Mortgage Securities Corp. debits the P&I
Mortgage Securities Corp. funds a loan. Custodial Account via an ACH transaction for the total
real estate owned (REO) – Real property acquired by amount of principal and interest due that month,
the Servicer on behalf of Washington Mutual Mortgage including any unscheduled collections of principal and
Securities Corp. as a result of foreclosure or other interest for the previous month. This date will usually
transfer. be the 20th of the month. If the 20th falls on a weekend
or holiday, however, the withdrawal will occur on the
refinance – The repayment of a debt from the proceeds preceding business day. The initial withdrawal date for
of a new loan using the same property as a security. any commitment will occur in the month following the
release of liability – An agreement to terminate the month in which Washington Mutual Mortgage
personal obligation of a borrower in connection with Securities Corp. purchased all or part of any
the payment of a mortgage debt. commitment.

Servicing Guide: Appendices V. A-3


(Rev. 8/03)
Appendix A. Glossary of Terms
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.

V. A-4 Servicing Guide: Appendices


(Rev. 8/03)
Appendix B. Office Locations and Telephone Numbers
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

Servicing Guide: Appendices VI. B-1


(Rev. 12/11/08)
Appendix C. Holiday Schedule

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

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

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

Master Servicing – 2210 Enterprise Drive


Florence, SC 29501

ABA Number: 021000021


PC Fed Wire Instructions:
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 #)

Appendix D – Wiring Instructions Rev. 08/07


Appendix E. ARM Adjustment Dates
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 Lender Ln Actual Pre-Paid Payoff End Sch End Act Note Service Pymt Chg New Int New P/O S/F
Ln # # PTD P&I Sch Int Sch Prn Curt Curt Payoff Prn Date Bal Prn Bal Rate Fee Date Rate P&I Interest 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)
Appendix E (Rev 9/22/09)
Appendix F. Servicing Transfer Instructions

Table of Contents
Section Name Page

1. General Seller Requirements During the Interim Servicing Period 3


2. Data Files 3
3. Goodbye Letters 3
4. Copies of Mortgage Loan Histories 4
5. Loan Balance Report 5
6 Escrow Funds at Final Transfer 6
7. Loan Reconciliation Reports 6
8. Mortgage Loan Payments Received On or After the Servicing 7
Transfer Date
9. Non-Sufficient Funds (NSF) Items 8
10. Misapplied Payments 9
11. Mortgage Loan Payoff Funds 9
12. Monthly Reporting to Washington Mutual Mortgage Securities Corp. 11
13. Loss Draft Claim Files 12
14. Loss Draft Checks 12
15. Assumptions 13
16. Servicing Files 13
17. Flood Data Tapes 14
18. Flood Certification Fees 15
19. Hazard Data 16
20. Hazard – Condominium Loans 16
21. Hazard and Flood Lender Placed Insurance Coverage 16
22. Hazard – Insurance Premiums Due Prior to the Servicing Transfer 17
Date
23. Hazard – Premium Notices and Refund Checks 17
24. Private Mortgage Insurance (PMI) 18
25. Optional Insurance 18
26. Property Tax Payment and Policy Requirements 19
27. Tax Contracts – Loans Transferring with Existing Contracts 20
28. Tax Contracts – Loans Transferring without Existing Contracts 20
29. Interest on Escrow 21
30. Adjustable Rate Mortgage (ARM) Loans 21
31. Automatic Clearing House (ACH) 21
32. New York Consolidation, Extension and Modification Agreements 22
33. Non-Qualifying/Simple Assumption/Title Transfer/Escrow 22
34. Third Party Bi-Weekly Payment Programs 23
35. Mortgage Electronic Registry System (MERS) Requirements 24
36. Year End Tax and Interest Reporting Requirements 25

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

Schedules
Letter Name Page

A. Servicing Reports 26
B. Data File 33
C. Form of Transfer of Servicing Notice 34
D. Reporting: Payoff, Actual/Actual, and Scheduled/Scheduled 37
E. Documents Required for Servicing File 38
F. Condominium Notice Letter 39
G. Fee Table of Tax Vendors and Systems Support Providers by State 40
H. ARM Loan History Template 42

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-2
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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,

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-3
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-4
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions

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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-5
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-6
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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
gmwmmscinvestoraccounting@wamu.net

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 gm.cash.acquisition.payments@wamu.net each
Business Day by 3:00 pm Eastern time.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-7
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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;

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-8
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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
gm.cash.acquisition.returned.items@wamu.net.
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
gm.cash.acquisition.reversal@wamu.net.

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;

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-9
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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 gm.cash.acquisition.Payoffs@wamu.net
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-10
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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 masterservicing@wamu.net 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
msdPayoffs@wamu.net 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:

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-11
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-12
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-13
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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;

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-14
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
(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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-15
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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;

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-16
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-17
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-18
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-19
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-20
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-21
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-22
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-23
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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: gm.cash.acquisition.reports@wamu.net

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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-24
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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:
MERS.inquiries@WaMu.net. 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
MERS.inquiries@WaMu.net. 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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-25
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions

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 conversionops@wamu.net.

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 gm.cash.acquisition.reports@wamu.net.
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-26
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
(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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-27
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
(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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-28
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
(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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-29
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-30
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-31
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
(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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-32
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
Schedule B
Data File

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-33
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-34
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-35
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-36
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions

Schedule D
Reporting:
Payoff, Actual/Actual and Scheduled/Scheduled

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-37
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions

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.

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-38
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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]

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-39
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
Schedule G
Fee Table for Tax Vendors and Systems Support Providers by State

State Tax Vendor Fee if Mortgage Fee if Mortgage


/Systems Support Loan has a Life of Loan does not have
Provider Loan Tax a Life of Loan Tax
Contract* 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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-40
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
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

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-41
(Rev. 05/04/07)
Appendix F. Servicing Transfer Instructions
Schedule H
ARM Loan History Template

Washington Mutual Mortgage Securities Corp. Servicing Guide: Appendices VII. F-42
(Rev. 05/04/07)

Вам также может понравиться