Pepper Residential Securities Trust No. 16 -- Pepper Residential Securities Trust No. 16 (Refinancing) Deal v1.1 Compared To RMBS v3.0

Branded 17g-7 Template 1 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS SEC RULE 17G-7 REPORT OF R&WS: Pepper Residential Securities Trust No. 16 (Refinancing) Deal v1.1 Compared To RMBS v3.0 The description in this report of the asset-pool related representations, warranties and enforcement mechanisms available to investors in the Transaction (this “17g-7 Report”) is based solely upon the forms of the offering documents (and, in limited circumstances, the transaction documents) that have been provided to Moody's by the issuer as of the date of this 17g-7 Report (or as of the date of any subsequent credit rating report issued by Moody's that refers to or includes this 17g-7 Report, to the extent so stated in such subsequent credit rating report). The issuer has advised Moody's that such forms of documents conform in all material respects to the documents in effect for the Transaction as of the date of this 17g-7 Report (or as of the date of the subsequent credit rating report issued by Moody's that refers to or includes this 17g-7 Report). Moody's has not undertaken any other investigation into the accuracy of the issuer's statement. In rating the Transaction, Moody's evaluates the representations, warranties and enforcement mechanisms contained in the offering documents (and, in limited circumstances, the transaction documents) solely as and to the extent described in its rating criteria. Further, Moody's rating may depend significantly on factors other than such representations, warranties and enforcement mechanisms. Moody's does not in this 17g-7 Report provide any opinion or recommendation as to the adequacy or effectiveness of the representations, warranties and enforcement mechanisms described herein (whether with respect to the Transaction or the Benchmark). Investors must conduct their own analysis of the adequacy and effectiveness, and of the legal and other implications, of the representations, warranties and enforcement mechanisms in the Transaction. Moody's has prepared the Benchmark based solely on its review of documentation for a sampling of transactions previously rated by Moody's and its knowledge of industry standards and the market in general. In rating such prior transactions, Moody's likely relied significantly on factors other than the representations, warranties and enforcement mechanisms contained in the related transaction documents. Except to the extent described herein, Moody's has not undertaken to determine whether or to what extent the representations, warranties or enforcement mechanisms in such prior transactions differ from those in transactions that have not been rated by Moody's. Further, in determining which transactions are similar to the Transaction for purposes of preparing this 17g-7 Report, Moody's has relied on its own perception and opinion and has necessarily treated certain transactions as not being "similar" to each other for purposes of this 17g-7 Report, even though they may be similar in one or more respects. Accordingly, there may be transactions in the marketplace that are similar in one or more respects to the Transaction and contain one or more representations, warranties or enforcement mechanisms that differ from or are not included in the Benchmark or in the documents for the Transaction. The asset-backed securities market is dynamic and continuously evolving. Accordingly, representations, warranties and enforcement mechanisms in asset-backed securities transactions may change or differ over time or from one transaction to another, depending on circumstances or the perceptions of market participants. Moody's may periodically update the Benchmark; however, there can be no assurance that the Benchmark will always reflect the current state of the market in all material respects. Moody's is not issuing or offering any securities in the Transaction or otherwise participating in any such issuance or offering. Any such offer can only be made through the issuer. Neither the issuer of the securities referred to herein, nor any other person, is authorized to include this 17g-7 Report (or any portion hereof) in any registration statement, prospectus, free writing prospectus, private placement memorandum or any other disclosure document or regulatory filing, or otherwise to use this 17g-7 Report, directly or indirectly, to sell or offer to sell, or to buy or offer to buy, any security. As used in this 17g-7 Report, which has been prepared for an RMBS transaction, the language “no comparable item” means no comparable representation, warranty or enforcement mechanism (or element thereof) is explicitly set forth in the offering documents (including any exhibit thereto), provided, however, that if such offering documents do not contain any summary of the representations, warranties or enforcement mechanisms (or element thereof) for the Transaction, then “no comparable item” means no comparable representation, warranty or enforcement mechanism (or element thereof) is explicitly stated in (1) the offering documents, (2) any document that is incorporated by reference into, or attached as an exhibit to, the offering documents, (3) any document referenced in the offering documents as expressly qualifying information contained in the offering documents or (4) any document to which the disclosure in the offering documents is either (i) expressly stated to be subject or (ii) expressly stated to be construed together with. This 17g-7 Report is made available to comply with Rule 17g-7 under the United States Securities Exchange Act of 1934, as amended. The Benchmark used in this 17g-7 Report has been prepared based on a review of United States transactions only. 2 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 I. ASSET REPRESENTATIONS I. ASSET REPRESENTATIONS Offering Circular ("OC") A. Representations and Warranties related to Mortgage Loans. With respect to each Mortgage Loan sold by it to the Mortgage Loan Seller, each Originator hereby represents and warrants to the Mortgage Loan Seller and its assigns that, as of the date such Mortgage Loan is sold (the “Closing Date”) or such other date specified herein: A. [OC, 2.5] Pepper selected Mortgage Loans from its pool of eligible loans based on its selection criteria. The Mortgage Loans were selected in accordance with the representations and warranties set out in Section 9.3 (“Representations and Warranties of the Trust Manager and Eligibility Criteria”) from Pepper’s portfolio of mortgage loans currently held by the Disposing Trustee. The Trust Manager represented and warranted that each Mortgage Loan included in the Mortgage Loan Pool satisfied the Eligibility Criteria on the Cut-Off Date. [OC, 9.3] Representations and Warranties of the Trust Manager and Eligibility Criteria. The Trust Manager represented and warranted to the Trustee that each Mortgage Loan which was assigned to the Trustee on the Initial Closing Date satisfied the following eligibility criteria (“Eligibility Criteria”) on the Cut-Off Date: The Trust Manager also represented and warranted to the Trustee that the matters set out below in respect of each Mortgage Loan and Related Security that was assigned to the Trustee on the Initial Closing Date are correct on the Cut-Off Date and the Initial Closing Date: [OC, 10.1] The Trust Manager represented and warranted to the Trustee as at the Cut-Off Date that each Mortgage Loan met the Eligibility Criteria on the Cut-Off Date. (a) Appraisal/ Property Valuation. The Mortgage File contains an Appraisal of the related Mortgaged Property prepared by an appraiser licensed or certified by the applicable governmental body in which the mortgaged property is located in conformity (in form and substance) with the Uniform Standards of Professional Appraisal Practice (“USPAP”) standards and in accordance with the requirements of Title XI of FIRREA. Such Appraisal satisfies current industry practices and complies with (i) Applicable Laws and (ii) customary Fannie Mae or Freddie Mac standard for mortgage loans of the same type as such Mortgage Loans. The Appraisal was made and signed, prior to the final approval of the Mortgage Loan application, by a Qualified Appraiser. Any Person performing any property valuation (including the appraiser) received no benefit from, and such Person’s compensation or referral of further business or flow of business from the Originator was not affected by, the approval or disapproval of the Mortgage Loan. The selection of the Person performing the property valuation was made (i) independently of the broker and the Originator’s loan sales and loan production personnel and (ii) in accordance with the criteria of Fannie Mae and Freddie Mac for selecting an independent appraiser. (a) prior to making the initial advance to the relevant Obligor in relation to the Mortgage Loan, a valuation of the Property the subject of the relevant Related Security was undertaken by an Approved Valuer or on behalf of the Disposing Trustee or the Originator (or any of their respective solicitors); (b) Income, Employment, and Assets. With respect to each Mortgage Loan whose document type on the Mortgage Loan Schedule indicates documented income, employment, and/or assets, the Originator verified the Mortgagor’s income, employment, and/or assets in accordance with the Underwriting Guidelines and employed procedures designed to authenticate the documentation supporting such income, employment, and/or assets. With respect to each Mortgage Loan, in order to test the reasonableness of the income, the Originator used (i) pay statements reflecting current and year- to-date earnings and deductions, (ii) copies of W-2 forms and tax returns provided by Mortgagor, (iii) transcripts received from the IRS pursuant to using IRS Forms 4506 or 4506-T or (iv) where commercially reasonable, public and/or commercially available information (such as salary.com). The Originator reviewed other attributes of the Mortgagor, which may include but are not limited to, assets, disposable income, reserves, employment and credit history, and reasonably determined that such attributes supported the income used to approve the Mortgage Loan. With respect to each Mortgage Loan, other than a Mortgage Loan whose document type on the Mortgage Loan Schedule indicates documented income, the originator employed a commercially reasonable process designed to test the reasonableness of the income used to approve documented Mortgage Loans. (b) [no comparable item] 3 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (c) Occupancy. The Originator has given due consideration to factors, including but not limited to, other real estate owned by a Mortgagor, commuting distance to work, appraiser comments and notes, the location of the property and any difference between the mailing address active in the servicing system and the subject property address to evaluate whether the occupancy status of the property as represented by the Mortgagor is reasonable. (c) [no comparable item] (d) Mortgage Loan Schedule. The information set forth in the Mortgage Loan Schedule (including information contained under each heading in the Mortgage Loan Schedule) annexed to the related Confirmation and the information contained on each related electronic data file delivered to the Mortgage Loan Seller is complete, true and correct and accurately reflects the terms of the documents contained in the Mortgage File in all material respects. And any seller or builder concession in excess of the allowable limits established by Fannie Mae or Freddie Mac and applicable at the time of origination has been subtracted from the Appraised Value of the Mortgaged Property for purposes of determining the LTV. With respect to each Mortgage Loan and as of the Closing Date, the most recent FICO score listed on the Mortgage Loan Schedule was no more than four (4) months old. As of the date of funding of the Mortgage Loan to the Mortgagor, no Appraisal or other property valuation listed on the Mortgage Loan Schedule was more than [ninety (90)][one hundred eighty(180)] calendar days old. (d) [no comparable item] (e) No Fraud. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place (i) on the part of the Obligated Party, or to the best of Originator’s knowledge after due inquiry, the Mortgagor, or any other Person, including, without limitation, any servicer, any appraiser, builder, developer, escrow agent, broker or correspondent, closing or settlement agent, closing attorney, realtor, title company or any other party involved in the solicitation, origination, sale or servicing of the Mortgage Loan or in the determination of the value of the Mortgaged Property or the sale of the Mortgaged Property, (ii) in the application for any insurance in relation to such Mortgage Loan or in connection with the sale of such Mortgage Loan to the Mortgage Loan Seller, or (iii) that would impair in any way the rights of the Mortgage Loan Seller in the Mortgage Loan or Mortgaged Property or that violated Applicable Law. Neither an Obligated Party nor any other Person has made any representations to the Mortgagor that are inconsistent with the Mortgage Loan Documents. (e) the Mortgage Loan and the Related Security were entered into in good faith; to the best of the knowledge, information and belief of the Trust Manager, there was no fraud on the part of any person in connection with the origination of the Mortgage Loan; there has been, in respect of the Mortgage Loan, no failure to comply in any material respect with any applicable law (including, without limitation, the Consumer Credit Legislation) where that failure would materially adversely affect the value of the Mortgage Loan; at the time the Mortgage Loan and Related Security were entered into, the Mortgage Loan and the Related Security complied in all material respects with all applicable laws; there is no fraud, dishonesty, material misrepresentation or negligence on the part of the Trust Manager in connection with the selection of the Mortgage Loans or Related Securities; the assignment of the Mortgage Loans and the Related Securities to the Trustee will not be held by a court to be an undervalue transfer, a fraudulent conveyance, or a voidable preference under any law relating to insolvency; it has selected the Mortgage Loans and Related Securities in good faith; (f) Underwriting Guidelines. Each mortgage loan either (i) was underwritten in substantial conformance with the Originator’s underwriting guidelines in effect at the time of origination without regard to any underwriter discretion or (ii) if not underwritten in conformance with the Originator’s underwriting guidelines, has reasonable and documented compensating factors. The methodology used in underwriting the extension of credit for the mortgage loan includes objective mathematical principles that relate to the relationship between the Mortgagor’s income, assets and liabilities and the proposed payment. The source of the down payment with respect to each Mortgage Loan has been fully verified by the Originator. (f) the Mortgage Loan conforms to one of the Loan Products; [OC, 30] Loan Products means the loan products and their related criteria which are provided by the Originator as set out in the Credit Policy and Procedures Manual, as amended from time to time. the Mortgage Loan was originated by the Originator in accordance with the Mortgage Origination Deed either directly or via a Sub-Originator which has originated the Mortgage Loan in accordance with the relevant Sub-Origination Deed; the Mortgage Loan was originated, underwritten, processed and settled in all material respects in accordance with the Credit Manual; it has selected the Mortgage Loans and Related Securities in good faith; 4 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (g) Mortgage Insurance. Each mortgage loan with a loan-to-loan value ratio at origination in excess of 80% is and will be subject to a primary mortgage insurance (PMI) policy issued by a qualified insurer, which provides coverage in an amount at least equal to that which would be required by Fannie Mae. All provisions of such mortgage insurance policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. The Insurer under such PMI Policy is a Qualified Insurer at the time of origination and as of the Closing Date. Any Mortgage Loan subject to a Mortgagor-paid PMI Policy obligates the Mortgagor thereunder to maintain the PMI Policy and to pay all premiums and charges in connection therewith up to the time it may be discontinued according to Applicable Law. Any such premium is not payable from any portion of the Mortgage Interest Rate. No Mortgage Loan requires payment of such premiums, in whole or in part, by the Mortgage Loan Seller. (g) at the time the Mortgage Loan was entered into, the Property the subject of the Related Security was insured under a General Insurance Policy; (h) Insurance Coverage Not Impaired. With respect to any insurance policy including, but not limited to, hazard, title, or mortgage insurance, covering a Mortgage Loan and/or the related Mortgaged Property, neither the Originator nor any prior holder, has engaged in, and Originator has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsements therein, or the validity and binding effect of either, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by the Originator. (h) [no comparable item] (i) Regulatory Compliance. Any and all requirements of any federal, state or local law including, without limitation, all applicable predatory and abusive lending, usury, truth-in-lending, real estate settlement procedures, consumer credit protection (including Uniform Consumer Credit Code laws, where applicable), fair credit reporting, unfair collection practices, equal credit opportunity or fair housing and disclosure laws applicable to the origination, servicing and collection of each such Mortgage Loan have been complied with in all material respects, and the Mortgagor received all disclosure materials required by applicable law with respect to the origination of each such Mortgage Loan and, if such Mortgage Loan is a Refinanced Mortgage Loan, rescission materials required by applicable laws. The servicing of each Mortgage Loan prior to the securitization closing date complied in all material respects with all then-applicable federal, state and local laws. (i) each Related Security that is required to be registered with, or stamped by, any Governmental Agency is or will be registered and stamped; there has been, in respect of the Mortgage Loan, no failure to comply in any material respect with any applicable law (including, without limitation, the Consumer Credit Legislation) where that failure would materially adversely affect the value of the Mortgage Loan; at the time the Mortgage Loan and Related Security were entered into, the Mortgage Loan and the Related Security complied in all material respects with all applicable laws; the assignment of the Mortgage Loans and the Related Securities to the Trustee will not be held by a court to be an undervalue transfer, a fraudulent conveyance, or a voidable preference under any law relating to insolvency; each Related Security that is required to be registered with, or stamped by, any Governmental Agency is either registered and stamped at the Initial Closing Date or will be registered and stamped prior to the Outstanding Documents Date; (j) Borrower. The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such “living trust” is in compliance with Fannie Mae guidelines applicable at the time of origination of the related Mortgage Loan or otherwise permitted in the Underwriting Guidelines. In the event the Mortgagor is a trustee of a “living trust,” such trustee is a natural person and is an obligor under the Mortgage Note in his or her individual capacity. The Mortgagor is either a United States citizen or a permanent resident alien who has the right legally to live and work permanently in the United States. Evidence of residency status for a permanent resident alien has been validated by documentation acceptable to Fannie Mae. The Mortgagor was not the subject of a bankruptcy proceeding that was dismissed or discharged in the [seven (7)][ten (10)] years prior to the origination of the Mortgage Loan (or such other time period as set forth in the Underwriting Guidelines), unless such bankruptcy was indicated in the Mortgage File and was taken into consideration in accordance with the Underwriting Guidelines. The Mortgagor has not previously owned a property with respect to which a foreclosure sale was completed or with respect to which title was conveyed to the Originator or a deed in lieu of foreclosure was given in the [seven (7)][ten (10)] years prior to the origination of the related Mortgage Loan (or such other time period as set forth in the Underwriting Guidelines). (j) at the time each Mortgage Loan and each Related Security was entered into and as at the Initial Closing Date, it had not received any notice of any insolvency, bankruptcy or liquidation of any relevant Obligor (except that if a Mortgage Loan is in arrears but complies with the Eligibility Criteria, the fact that it is in arrears is not in and of itself notice of insolvency) or any notice that the relevant Obligor did not have the legal capacity to enter into the Related Security; 5 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (k) Source of Loan Payments. No portion of the Mortgage Loan proceeds has been escrowed for the purpose of making monthly payments on behalf of the Mortgagor and no payments due and payable under the terms of the Mortgage Note and Mortgage or deed of trust, except for seller or builder concessions or amounts paid, have been paid by any Person (other than the Mortgagor and any guarantor) who was involved in, or benefited from, the sale or purchase of the Mortgaged Property or the origination, refinancing, sale, purchase or servicing of the Mortgage Loan. (k) [no comparable item] (l) Down-payment. Except as otherwise indicated on the Mortgage Loan Schedule, the Mortgagor paid at least the greater of [3][5]% of the purchase price with his/her own funds. (l) the Outstanding Balance of the Mortgage Loan as at the Cut-Off Date does not exceed A$2,000,000; (m) Ownership/ No Prior Liens. The Originator, or MERS as nominee for the Originator, is the sole owner and holder of the Mortgage Note and the Mortgage (and with respect to any Cooperative Loan, the sole legal, beneficial and equitable owner of the related Cooperative Pledge Agreement). The Originator has full right and authority under all governmental and regulatory bodies having jurisdiction over such Originator, subject to no interest or participation of, or agreement with, any party, to transfer and sell the Mortgage Loan to the Mortgage Loan Seller pursuant to this Agreement free and clear of any encumbrance or right of others, equity, lien, pledge, charge, mortgage, claim, participation interest or security interest of any nature (collectively, a “Lien”); and immediately upon the transfers and assignments herein contemplated, the Originator shall have transferred and sold all of its right, title and interest in and to each Mortgage Loan and the Mortgage Loan Seller will hold good, marketable and indefeasible title to, and be the owner of, each Mortgage Loan subject to no Lien. Following the sale of the Mortgage Loan to the Mortgage Loan Seller, the Mortgage Loan Seller will own and hold such Mortgage Loan free and clear of any and all encumbrances, equities, participation interests, liens, pledges, charges, claims (including, but not limited to, any preference or fraudulent transfer claims), agreements with other parties to sell or otherwise transfer the Mortgage Loan or security interest of any nature encumbering such Mortgage Loan. (m) the Mortgage Loan is secured by a valid and enforceable first registered mortgage over Property (owner occupied or investment and zoned residential) located in either New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, Northern Territory or the Australian Capital Territory; the Mortgage Loans and Related Securities are assignable and will be assigned to the Trust free from Encumbrance. All consents required in relation to the assignment of the Mortgage Loans and Related Securities have been obtained; the Disposing Trustee is, and the Trustee will become on the Initial Closing Date, the sole beneficial owner of the relevant Mortgage Loans and the Related Securities; (n) Security Interest/ Enforceability and Priority of Lien. The Mortgage is a valid, existing, enforceable and perfected, first lien and first priority security interest on the Mortgaged Property therein described. The Mortgaged Property is free and clear of all encumbrances and liens having priority over the lien of the Mortgage except for (i) liens for real estate taxes and special assessments not yet due and payable, (ii) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording which are acceptable to mortgage lending institutions generally, and which are referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or which do not adversely affect the Appraised Value, (iii) liens created pursuant to any federal, state or local law, regulation or ordinance affording liens for the costs of cleanup of hazardous substances or hazardous wastes or for other environmental protection purposes, (iv) such other matters to which like properties are commonly subject that do not individually or in aggregate materially interfere with the benefits of the security intended to be provided by the Mortgage and (v) any security agreement, chattel mortgage or equivalent document. Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes a valid and existing first lien on the property described therein and the Originator has the full right to sell and assign the same to the Trustee. (n) the Mortgage Loan is secured by a valid and enforceable first registered mortgage over Property (owner occupied or investment and zoned residential) located in either New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, Northern Territory or the Australian Capital Territory; the Mortgage Loans and Related Securities are assignable and will be assigned to the Trust free from Encumbrance. All consents required in relation to the assignment of the Mortgage Loans and Related Securities have been obtained; the Title Documents held by the Custodian or Approved Solicitor are the only documents necessary to enforce the provisions of the Mortgage Loan and the Related Securities; it is not aware of any circumstance or event that may materially and adversely affect the value or enforceability of any Mortgage Loan or Related Security; (in respect of the Initial Closing Date only) to the extent that the assignment of the Mortgage Loans and the Related Securities by the relevant Disposing Trustee to the Trust is a security interest as defined in section 12(3)(a) of the PPS Act, that security interest will be perfected for the purposes of the PPSA; (o) Complete Mortgage Files. The Mortgage Loan Documents for the related Mortgage Loans have been or will be delivered to the Custodian in compliance with this Agreement and the Seller Guide. The Originator is in possession of a complete Mortgage File (including all documents used in the qualification of the Mortgagor) for each Mortgage Loan in compliance with Exhibit [ ], except for such documents the originals of which have been delivered to the Custodian, and all documents required to be included in the Mortgage File shall be complete, executed as required and in compliance with Applicable Law. (o) the Title Documents held by the Custodian or Approved Solicitor are the only documents necessary to enforce the provisions of the Mortgage Loan and the Related Securities; 6 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (p) No Prior Modifications. The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any [material] respect, except by a written instrument that, if required by applicable law, has been recorded or is in the process of being recorded. The substance of any such waiver, alteration or modification has been approved by the issuer of any related Primary Mortgage Insurance Policy and title insurance policy, to the extent required by such policies, the terms of such waiver, alteration or modification have been reflected in the Mortgage Loan Schedule and the written instrument reflecting such terms has been included in the Mortgage File. (p) [no comparable item] (q) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, release, cancellation, subordination or rescission. (q) [no comparable item] (r) Taxes and Assessments/ No Outstanding Charges. All taxes, governmental assessments, insurance premiums, leasehold payments, ground rents, water, sewer and municipal charges or other outstanding charges affecting the related Mortgaged Property, which previously became due and owing have been paid by the mortgagor, or an escrow of funds has been established to the extent permitted by law, in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. (r) [no comparable item] (s) Mortgaged Property Undamaged. The Mortgaged Property is in good repair and undamaged by the following (but not limited to) water, waste, fire, earthquake or earth movement, windstorm, hurricane, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended. (s) it is not aware of any circumstance or event that may materially and adversely affect the value or enforceability of any Mortgage Loan or Related Security; (t) No Condemnation. At origination of the Mortgage Loan there was, and as of the Closing Date, there is, and to the Originator's knowledge, no proceeding pending or threatened for the total or partial condemnation of the related Mortgaged Property nor is such a proceeding currently occurring and the Originator has not received notice of any intention by any Person to commence any such proceedings (t) to the best of the knowledge, information and belief of the Trust Manager, the Mortgage Loan is not the subject of any material dispute, litigation or claim which has a significant risk of being adversely determined or which calls into question the title, value or enforceability of the Mortgage Loan or the Related Security; it is not aware of any circumstance or event that may materially and adversely affect the value or enforceability of any Mortgage Loan or Related Security; (u) No Mechanics Liens. To the Originator's knowledge, there are no mechanics’ or materialmen’s or similar liens, encumbrances or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage. (u) [see clause (n) above] (v) Fee Simple Estate/ No Encroachments / Compliance with Zoning. Except for Mortgage Loans secured by Cooperative Shares and Mortgage Loans secured by residential long-term leases, the Mortgaged Property consists of a fee simple estate in real property. All improvements subject to the Mortgage which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property (and wholly within the project with respect to a condominium unit). No improvements on adjoining properties encroach upon the Mortgaged Property except those which are insured against by the related title insurance policy. All improvements on the Mortgaged Property comply with all applicable zoning and subdivision laws and ordinances. (v) the Mortgage Loan is secured by a valid and enforceable first registered mortgage over Property (owner occupied or investment and zoned residential) located in either New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, Northern Territory or the Australian Capital Territory; (w) Leasehold Interests. To the extent the Mortgage Loan is secured by a leasehold interest: as of the origination date of the Mortgage Loan (1) the Mortgagor is the owner of a valid and subsisting interest as tenant under the lease and is not in default thereunder, (2) the lease is in full force and effect, (3) all rents and other charges have been paid, (4) the lessor under the lease is not in default, (5) the execution, delivery, and performance of the Mortgage do not require the consent (other than the consents that have been obtained and are in full force and effect) under, and will not violate or cause a default under, the terms of the lease, (6) the lease is assignable or transferable, (7) the term of such lease does not terminate earlier than [five] [ten] years after the maturity date of the Mortgage Note, (8) the lease does not provide for (w) [no comparable item] 7 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 termination of the lease in the event of the Mortgagor’s default without written notice to the Mortgagee and a reasonable opportunity to cure the default, (9) the lease permits the mortgaging of the related Mortgaged Property, (10) the lease protects the Mortgagee’s interests in the event of a property condemnation and (11) the Mortgaged Property is located in a jurisdiction in which the use of leasehold estates for residential properties is an accepted practice. (x) Lawfully Occupied. As of the related Closing Date, the Mortgaged Property is lawfully occupied under applicable law, and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities, and no Person has received any notice regarding any noncompliance with any use or occupancy law, ordinance, regulation, standard, licenses or certificates with respect to the Mortgaged Property. (x) the Mortgage Loan is secured by a valid and enforceable first registered mortgage over Property (owner occupied or investment and zoned residential) located in either New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, Northern Territory or the Australian Capital Territory; [see also clause (i) above] (y) Mortgage Loan Legal and Binding. The Mortgage Note and the related Mortgage, are genuine, and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as such enforcement may be limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity, whether enforcement is considered in a proceeding in equity or at law. All parties to the Mortgage Note and the Mortgage, had the legal capacity to execute the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and properly executed by such parties. (y) the Mortgage Loan is a legal, valid and binding obligation of the Obligor, enforceable in accordance with its terms against the Obligor; (z) Proceeds Fully Disbursed / Recording Fees Paid. The proceeds of the Mortgage Loan have been fully disbursed to or for the account of the Mortgagor. There is no obligation for the Mortgagee to advance additional funds thereunder. Any and all requirements as to completion of any on site or off site improvement and as to disbursements of any escrow funds there for have been complied with (except for escrow funds for exterior items, which could not be completed due to weather, and escrow funds for the completion of swimming pools scheduled to be completed 12 months following the closing date). All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage have been paid, except recording fees with respect to a Mortgage not recorded as of the Closing Date, and the Mortgagor is not entitled to any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage. (z) there is no obligation to fund Redraws or Further Advances under the Mortgage Loan; (aa) Existence of Title Insurance. Each Mortgage Loan (except (1) any Mortgage Loan secured by a Mortgaged Property located in any jurisdiction as to which an opinion of counsel of the type customarily rendered in such jurisdiction in lieu of title insurance is instead received and (2) any Mortgage Loan secured by Cooperative Shares) is covered by an ALTA lender's title insurance policy or other form of policy or insurance generally acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring (subject to certain exceptions) the Originator, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Additionally, such policy affirmatively insures ingress and egress to and from the Mortgaged Property. Where required by applicable state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. The Originator, its successors and assigns, are the sole insureds of such lender's title insurance policy; such title insurance policy has been duly and validly endorsed to the Mortgage Loan Seller or the assignment to the Mortgage Loan Seller of the Originator's interest therein does not require the consent of or notification to the insurer; and such lender's title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender's title insurance policy, and no prior holder of the related Mortgage, including the Originator, has done, by act or omission, anything which would impair the coverage of such lender's title insurance policy. (aa) at the time the Mortgage Loan was entered into, the Property the subject of the Related Security was insured under a General Insurance Policy; 8 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (bb) Hazard Insurance. The Mortgaged Property is insured by a Qualified Insurer acceptable to Fannie Mae Standards, applicable at the time of origination, against loss by fire, hazards of extended coverage, other hazards required by Fannie Mae to be covered, and other hazards that are customary in the area where the Mortgaged Property is located, in each case, pursuant to insurance policies conforming to Accepted Servicing Practices, in an amount not less than the lesser of (i) the full insurable value of the Mortgaged Property or (ii) the outstanding principal balance owing on the Mortgage Loan, but in no event less than the minimum amount necessary to fully compensate for any damage or loss on a replacement cost basis. If the Mortgaged Property is a condominium unit, it is included under coverage afforded by a blanket policy for the project. If the Mortgaged Property was, at origination of the Mortgage Loan, in an area identified on a flood hazard map or flood insurance rate map issued by the Federal Emergency Management Agency as having special flood hazards, a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect, which policy was issued by a Qualified Insurer and provides coverage in the an amount equal to not less than the least of (i) the outstanding principal balance of the Mortgage Loan, (ii) the full insurable value of the Mortgaged Property, and (iii) the maximum amount of insurance that was available under the National Flood Insurance Act of 1968, as amended. All individual insurance policies on the date of origination, contained a standard mortgagee clause naming the Originator and its successors and assigns as mortgagee and as loss payee and such clause is still in effect, and all premiums thereon have been paid. Each such insurance policy may not be reduced, terminated or canceled without thirty (30) calendar day’s prior written notice to the mortgagee. No such notice has been received by any Obligated Party. The Mortgage obligates the Mortgagor thereunder to maintain all such hazard insurance policies at the Mortgagor’s cost and expense. Should the Mortgagor fail to do so, the Mortgage authorizes the holder of the Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and expense, and to seek reimbursement therefor from the Mortgagor. Each such insurance policy is the valid and binding obligation of the Insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of the Mortgage Loan Seller upon the consummation of the transactions contemplated by this Agreement. No action, inaction, or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage, under any such insurance policies, regardless of the cause of such failure of coverage. (bb) at the time the Mortgage Loan was entered into, the Property the subject of the Related Security was insured under a General Insurance Policy; (cc) No Default. There is no nonmonetary default, nonmonetary breach, nonmonetary violation or event of acceleration existing under the Mortgage or the related Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a nonmonetary default, nonmonetary breach, nonmonetary violation or event of acceleration. No default, breach, violation or event of acceleration has been waived. No foreclosure action is currently threatened or has been commenced with respect to the Mortgage Loan. (cc) the Trust Manager is not aware of any breach (except for arrears in the ordinary course of business) by the Obligor in relation to the Mortgage Loan of any of the material terms governing the Mortgage Loan or its Related Security; (dd) No Rescission. The Mortgage Note and the Mortgage are not subject to any right of rescission, reformation, set-off, counterclaim or defense, including without limitation the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, reformation, set-off, counterclaim or defense, including without limitation the defense of usury, and no such right of rescission, reformation, set-off, counterclaim or defense has been asserted with respect thereto, and there is no basis for the Mortgage Loan to be modified or reformed without the consent of the Mortgagee under Applicable Law. (dd) (in respect of the Initial Closing Date only) immediately following the assignment of the Mortgage Loans and the Related Securities to the Trustee in accordance with the Sale Deed, no such Mortgage Loan or Related Security will be subject to any right of rescission, set-off or counterclaim. (ee) Enforceable Right of Foreclosure. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to the Mortgagor that would interfere with such right of foreclosure. (ee) [no comparable item] 9 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (ff) Mortgaged Property is 1-4 Family. Unless noted on the Mortgage Loan Schedule, each Mortgaged Property is a fee simple estate that is located in the United States or a territory of the United States, at the street address and state identified in the Mortgage Loan Schedule and consists of a one- to four-unit residential property, which may include, but is not limited to, a single family dwelling, townhouse, condominium unit or a unit in a planned unit development or, in the case of a Co- op Loan, leases or occupancy agreements; provided, however, that any condominium project or planned unit development shall conform with the applicable Fannie Mae or Freddie Mac requirements regarding such dwellings applicable at the time of origination of the related Mortgage Loan. As of the date of origination, no portion of the Mortgaged Property was used for commercial purposes, and since the date of origination no portion of the Mortgaged Property has been used for commercial purposes. (ff) the Mortgage Loan is secured by a valid and enforceable first registered mortgage over Property (owner occupied or investment and zoned residential) located in either New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, Northern Territory or the Australian Capital Territory; (gg) Mortgage Loan Qualifies for REMIC. Each Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1). (gg) [no comparable item] (hh) Lost Note Affidavit. With respect to any Mortgage Loan as to which an affidavit has been delivered to the Mortgage Loan Seller certifying that the original Mortgage Note is no longer in existence, if such Mortgage Loan is subsequently in default, the enforcement of such Mortgage Loan will not be materially adversely affected by the absence of the original Mortgage Note. (hh) [no comparable item] (ii) Doing Business. The Mortgage Loan was originated by a savings and loan association, a savings bank, a commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state authority or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. All parties which have had any interest in the Mortgage Loan, whether as Originator, mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were): (A) organized under the laws of such state, or (B) qualified to do business in such state, or (C) federal savings and loan associations or national banks having principal offices in such state, or (D) not otherwise required to be licensed or file "doing business" or similar documentation in such state. All parties which have had any interest in the Mortgage Loan were in compliance with any and all applicable “doing business” and licensing requirements of the laws of the state wherein the Mortgaged Property is located or were not required to be licensed or file "doing business" or similar documentation in such state. (ii) [no comparable item] (jj) Environmental Laws. To the Originator’s knowledge, as of origination of the Mortgage Loan, the related Mortgaged Property was in material compliance with all applicable environmental laws pertaining to environmental hazards including, without limitation, asbestos, and the Mortgaged Property is free from any and all toxic or hazardous substances. Neither the Originator nor, to the Originator’s knowledge, the related Mortgagor, has received any notice of any violation or potential violation of such law. There is no pending action or proceeding directly involving any Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property; (jj) there has been, in respect of the Mortgage Loan, no failure to comply in any material respect with any applicable law (including, without limitation, the Consumer Credit Legislation) where that failure would materially adversely affect the value of the Mortgage Loan; at the time the Mortgage Loan and Related Security were entered into, the Mortgage Loan and the Related Security complied in all material respects with all applicable laws; (kk) Payments Current/ No Prepayments. All payments required to be made up to the close of business on the related Closing Date for such Mortgage Loan under the terms of the Mortgage Note have been made and credited and no Mortgage Loan was more than 30 days past due more than once in the [preceding 12 months][since the origination date] and any such delinquency did not exceed one payment. The Originator has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage. The Mortgage Loan was not prepaid in full prior to the Closing Date and the Originator has not received notification from a Mortgagor that a prepayment in full shall be made after the Closing Date. (kk) [no comparable item] 10 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (ll) Ability to Repay. If an application for the Mortgage Loan was taken on or after January 10, 2014, such Mortgage Loan complied with the “ability to repay” standards as set forth in Section 129C(a) of the federal Truth-in-Lending Act, 15 U.S.C. 1639c(a), and Section 1026.43(c) of Regulation Z. (ll) [no comparable item] (mm) No High Cost Loan. The Mortgage Loan is not a “high cost” loan, “covered” loan, “threshold” loan or “predatory” loan under any applicable state, federal, or local law at the time of the origination of the Mortgage Loan, regardless of whether the Originator or the Seller is exempted from applicable state or local law by virtue of a federal preemption. (mm) [see clause (i) above] (nn) No Bankruptcy. No Mortgagor was a debtor in any state or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated and following the date of origination of the Mortgage Loan and as of the Closing Date, no Mortgagor with respect to the Mortgage Loan was a debtor in any state or federal bankruptcy or insolvency proceeding, and the Mortgaged Property has not been subject to any bankruptcy or foreclosure proceedings. (nn) at the time each Mortgage Loan and each Related Security was entered into and as at the Initial Closing Date, it had not received any notice of any insolvency, bankruptcy or liquidation of any relevant Obligor (except that if a Mortgage Loan is in arrears but complies with the Eligibility Criteria, the fact that it is in arrears is not in and of itself notice of insolvency) or any notice that the relevant Obligor did not have the legal capacity to enter into the Related Security; (oo) Origination; Servicing and Collection Practices; Escrow Deposits. The origination practices used with respect to each Mortgage Loan have been in accordance with Applicable Law and the servicing and collection practices used with respect to each Mortgage Loan have been in accordance with Accepted Servicing Practices, whether such servicing was done by the Originator, its affiliates, or any third party or any sub-servicer or servicing agent of any of the foregoing. With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of the Originator and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. No escrow deposits or Escrow Payments or other charges or payments have been capitalized under the Mortgage Note and no such escrow deposits or Escrow Payments are being held by the Originator for any work on a Mortgaged Property which has not been completed. (oo) the Mortgage Loan conforms to one of the Loan Products; [OC, 30] Loan Products means the loan products and their related criteria which are provided by the Originator as set out in the Credit Policy and Procedures Manual, as amended from time to time. the Mortgage Loan was originated by the Originator in accordance with the Mortgage Origination Deed either directly or via a Sub-Originator which has originated the Mortgage Loan in accordance with the relevant Sub-Origination Deed; the Mortgage Loan was originated, underwritten, processed and settled in all material respects in accordance with the Credit Manual; there has been, in respect of the Mortgage Loan, no failure to comply in any material respect with any applicable law (including, without limitation, the Consumer Credit Legislation) where that failure would materially adversely affect the value of the Mortgage Loan; at the time the Mortgage Loan and Related Security were entered into, the Mortgage Loan and the Related Security complied in all material respects with all applicable laws; the assignment of the Mortgage Loans and the Related Securities to the Trustee will not be held by a court to be an undervalue transfer, a fraudulent conveyance, or a voidable preference under any law relating to insolvency; it has selected the Mortgage Loans and Related Securities in good faith; (pp) Higher Cost Credit Products. No Mortgagor was encouraged or required to select a loan product offered by the Originator that was a higher cost product designed for less creditworthy Mortgagors, unless at the time of the Mortgage Loan’s origination, such Mortgagor did not qualify, taking into account credit history and debt-to-income ratios, for a lower cost credit product then offered by the Originator or an affiliate of the Originator. If, at the time of loan application, the Mortgagor may have qualified for a lower cost credit product then offered by the Originator or any mortgage lending affiliate of the Originator, the Originator referred the Mortgagor’s application to such affiliate for underwriting consideration. (pp) [see clause (i) above] (qq) Data Tape. In addition to its conformity with the Mortgage File, the information contained under each of the headings in the data tape delivered by the Originator to the Mortgage Loan Seller identified on Annex I to the related Assignment Agreement is accurate and factually correct in all material respects. (qq) [no comparable item] 11 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (rr) No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral, pledged account or other security except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in Paragraph (A)(n) above, and unless otherwise indicated, at origination and as of the related Closing Date, such collateral did/does not serve as security for any other obligation. (rr) [no comparable item] (ss) Mortgage Recorded/ Transfer of Mortgage Loans. Each original Mortgage was recorded and the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located. With respect to each MERS Designated Mortgage Loan, the related assignment of mortgage to MERS has been, or is in the process of being, duly and properly recorded. (ss) each Related Security that is required to be registered with, or stamped by, any Governmental Agency is or will be registered and stamped; there has been, in respect of the Mortgage Loan, no failure to comply in any material respect with any applicable law (including, without limitation, the Consumer Credit Legislation) where that failure would materially adversely affect the value of the Mortgage Loan; the Title Documents held by the Custodian or Approved Solicitor are the only documents necessary to enforce the provisions of the Mortgage Loan and the Related Securities; each Related Security that is required to be registered with, or stamped by, any Governmental Agency is either registered and stamped at the Initial Closing Date or will be registered and stamped prior to the Outstanding Documents Date; (tt) No Litigation Pending. There is no action, suit, proceeding or investigation pending, or to the Originator’s knowledge threatened, that is related to the Mortgage Loan. (tt) to the best of the knowledge, information and belief of the Trust Manager, the Mortgage Loan is not the subject of any material dispute, litigation or claim which has a significant risk of being adversely determined or which calls into question the title, value or enforceability of the Mortgage Loan or the Related Security; (uu) MERS Loans. With respect to each MERS Designated Mortgage Loan, the Originator has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS. (uu) [no comparable item] (vv) Due-On-Sale. The Mortgage contains an enforceable provision, to the extent not prohibited by applicable law as of the date of such Mortgage, for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property or the Cooperative Shares are sold or transferred without the prior written consent of the Mortgagee thereunder. (vv) [no comparable item] (ww)No Graduated Payments or Contingent Interests. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature. (ww)[no comparable item] (xx) Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under Applicable Law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Mortgagee to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor. (xx) [no comparable item] (yy) Payment Terms (yy) Payment Terms (i) Principal Payments. Principal payments commenced no more than sixty (60) calendar days after the funds were disbursed to the Mortgagor (or on the Mortgagor’s behalf) in connection with the Mortgage Loan. (i) [no comparable item] (ii) Maturity. The Mortgage Loans have an original term to maturity of not more than thirty (30) years, with interest payable in arrears on the Due Date set forth on the related Mortgage Loan Schedule. (ii) the maximum term of the Mortgage Loan is 40 years from its settlement date and it matures at least 18 months prior to the Maturity Date for the A$ Notes; (iii) Adjustable Rate Mortgage Loan Payment Terms. As to each Adjustable Rate Mortgage Loan on each applicable Adjustment Date, the Mortgage Interest Rate will be adjusted to equal the sum of the Index plus the applicable Gross (iii) [no comparable item] 12 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 Margin, rounded up or down to the nearest or next highest multiple of 0.125% indicated by the Mortgage Note; provided that, the Mortgage Interest Rate will not increase or decrease by more than the Periodic Interest Rate Cap on any Adjustment Date, and will in no event exceed the maximum Mortgage Interest Rate or be lower than the minimum Mortgage Interest Rate listed on the Mortgage Loan Schedule for such Mortgage Loan. As to each Adjustable Rate Mortgage Loan, the Adjustment Date shall occur in a manner such that such Adjustable Rate Mortgage Loan will be a Qualified Mortgage. As to each Adjustable Rate Mortgage Loan, each Mortgage Note requires a monthly payment which is sufficient to fully amortize the outstanding principal balance as of the first calendar day of such period over the then remaining term of such Mortgage Note and to pay interest at the related Mortgage Interest Rate. As to each Adjustable Rate Mortgage Loan, if the related Mortgage Interest Rate changes on an Adjustment Date, the then outstanding principal balance will be re-amortized over the remaining life of such Mortgage Loan. All Adjustable Rate Mortgage Loans have been adjusted on the Adjustment Date in compliance with all Applicable Laws, the terms of the Mortgage Note and Customary Servicing Procedures and the Originator’s servicing system has been updated to reflect any such adjustments. The Originator executed and delivered any and all notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the monthly payment adjustments. Any interest required to be paid to the Mortgagor pursuant to state, federal and local law has been properly paid and credited. (iv) Fixed Rate Mortgage Loan Payment Terms. As to each Fixed Rate Mortgage Loan, each Mortgage Note requires a monthly payment which is sufficient to fully amortize the original principal balance over the remaining term of such Mortgage Note and to pay interest at the related Mortgage Interest Rate. (iv) the Mortgage Loan requires either: - monthly, fortnightly or weekly payments sufficient to pay interest and fully amortise principal over the term of the Mortgage Loan; or - monthly, fortnightly or weekly payments sufficient to pay interest only for an initial period not exceeding 5 years and then sufficient to pay interest and fully amortise principal over the remaining term of the Mortgage Loan; (v) the Obligor has no right to convert from a variable rate to a fixed rate in respect of the Mortgage Loan; (vi) payments of interest by the Obligor in respect of the Mortgage Loan are based on a variable rate of interest; (zz) Consolidation of Future Advances. Any future advances made prior to the cut-off date have been consolidated with the outstanding principal amount secured by the mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term reflected on the mortgage loan schedule. The lien of the mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence. The consolidated principal amount does not exceed the original principal amount of the mortgage loan. (zz) [no comparable item] (aaa)Tax Service Contracts; Flood Certification Contract. The Mortgage Loan is covered by a paid in full, life of loan, tax service contract and a paid in full, life of loan, flood certification contract (where applicable) and each of these contracts is fully assignable to the Mortgage Loan Seller and its assigns. (aaa)[no comparable item] (bbb) Single Premium Credit Life Insurance. No Mortgagor was required to purchase any single premium credit insurance policy (e.g., life, mortgage, disability, accident, unemployment, property or health insurance product) or debt cancellation agreement as a condition of obtaining the extension of credit. No Mortgagor obtained a prepaid single premium credit insurance policy (e.g., life, mortgage, disability, accident, unemployment, property or health insurance product) or debt cancellation agreement in connection with the origination of the Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase single premium credit insurance policies (e.g., life, mortgage, disability, accident, unemployment, property or health insurance product) or debt cancellation agreements as part of the origination of, or as a condition to closing, such Mortgage Loan. (bbb) [no comparable item] 13 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (ccc) No Primary Mortgage Insurance. No Mortgage Loan has primary mortgage insurance. (ccc) [no comparable item] (ddd) TILA Qualified Mortgage. If the Mortgage Loan is identified as “Qualified Mortgage-Safe Harbor” on the Mortgage Loan Schedule, such Mortgage Loan (i) is a “qualified mortgage” within the meaning of Section 1026.43(e)(2) of 12 C.F.R. Part 1026 (“Regulation Z”) without reference to Section 1026.43(e)(4), (5), (6) or (f) of Regulation Z, (ii) complies with the total points and fees limitations for a qualified mortgage set forth in Section 1026.43(e)(3) of Regulation Z (including the inflation adjustments provided for in Section 1026.43(e)(3)(ii) of Regulation Z), (iii) is not a “higher-priced covered transaction” within the meaning of Section 1026.43(b)(4) of Regulation Z, (iv) only includes a prepayment penalty permitted by Section 1026.43(g) of Regulation Z, (v) does not provide for a balloon payment and (vi) qualifies for the safe harbor set forth in Section 1026.43(e)(1)(i) of Regulation Z. (ddd) [no comparable item] (eee)TILA Higher Priced Qualified Mortgage. If the Mortgage Loan is identified as “Qualified Mortgage-Rebuttable Presumption” on the Mortgage Loan Schedule, such Mortgage Loan (i) is a “qualified mortgage” within the meaning of Section 1026.43(e)(2) of Regulation Z without reference to Section 1026.43(e)(4), (5), (6) or (f) of Regulation Z, (ii) complies with the total points and fees limitations for a qualified mortgage set forth in Section 1026.43(e)(3) of Regulation Z (including the inflation adjustments provided for in Section 1026.43(e)(3)(ii) of Regulation Z), (iii) is a “higher-priced covered transaction” within the meaning of Section 1026.43(b)(4) of Regulation Z, (iv) does not provide for a balloon payment and (v) qualifies for the presumption of compliance set forth in Section 1026.43(e)(1)(ii) of Regulation Z. (eee)[no comparable item] (fff) Servicemembers Civil Relief Act. The Mortgagor has not notified the Originator, and the Originator has no knowledge of any relief requested by or allowed to the Mortgagor under the Servicemembers Civil Relief Act or any similar state law or local laws. (fff) [no comparable item] (ggg)Ability to Perform; Solvency. The Originator does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement. The Originator is solvent and will not be rendered insolvent by the consummation of the transactions contemplated hereby. The Originator is not transferring any Mortgage Loan with any intent to hinder, delay or defraud any of the Originator's creditors. (ggg)[see clause (e) above] (hhh) Co-op Loans. With respect to each Co-op Loan: (i) the related Mortgage is a valid, enforceable and subsisting first priority security interest on the related Cooperative Shares securing the related cooperative note, subject only to (a) liens of the Cooperative for unpaid assessments representing the Mortgagor’s pro rata share of the Cooperative’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Security Agreement. There are no liens against or security interest in the Cooperative Shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority over the Originator’s security interest in such Cooperative Shares; (ii) a search for filings of financing statements has been made by a company competent to make the same, which company is acceptable to Fannie Mae and qualified to do business in the jurisdiction where the cooperative unit is located, and such search has not found anything which would materially and adversely affect the Co-op Loan; (iii) the related cooperative that owns title to the related Cooperative apartment building is a “cooperative housing corporation” within the meaning of Section 216 of the Code, and is in material compliance with applicable federal, state and local laws which, if not complied with, could have a material adverse effect on the Mortgaged Property; (iv) there is no prohibition against pledging the shares of the Cooperative or assigning the Co-op Lease. (hhh) [no comparable item] (iii) No Construction Loans. No Mortgage Loan was made in connection with (i) the construction or rehabilitation of a Mortgaged Property or (ii) facilitating the trade-in or exchange of a Mortgaged Property. (iii) the Mortgage Loan is not a construction loan; 14 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 (jjj) No Ground Leases. No Mortgaged Property is subject to a ground lease. (jjj) [no comparable item] (kkk) the Mortgage Loan is denominated and only payable in Australian dollars; (lll) the Mortgage Loan is governed by the laws of a State or Territory of Australia; (mmm) the Obligor in respect of the Mortgage Loan is not an officer or employee of the Originator or an immediate family member of an officer or employee of the Originator. (nnn) the Current LVR of the Mortgage Loan as at the Cut-Off Date does not exceed 95%; II. ENFORCEMENT MECHANISMS II. ENFORCEMENT MECHANISMS A. Repurchase Obligation. Upon discovery by the Depositor or the Originator of the breach by the Originator, Mortgage Loan Seller or Depositor of any representation or warranty under the Mortgage Loan Purchase and Sale Agreement in respect of any Mortgage Loan, which materially adversely affects the value of that Mortgage Loan or the interest therein of the Certificateholders (a “Defective Mortgage Loan”) (each of such parties hereby agreeing to give written notice thereof to the Trustee and the other of such parties), the Trustee, or its designee, shall promptly notify the breaching party in writing of such breach and request that the breaching party cure or cause the cure of such breach within 60 days from the earlier of the date that the breaching party discovered or was notified of such breach, and if the breaching party does not cure or cause the cure of such breach in all material respects during such period, the Trustee shall enforce the breaching party’s obligation under the Mortgage Loan Purchase and Sale Agreement to repurchase at the Repurchase Price or substitute that Mortgage Loan from the Trust Estate or, other than with respect to a breach of the representation and warranty as to good, valid and marketable title, make an indemnification payment with respect to such Mortgage Loan on or prior to the Determination Date following the expiration of such 60-day period; provided, however, that, in connection with any such breach that could not reasonably have been cured within such 60-day period, the breaching party shall be required to repurchase or substitute or make an indemnification payment with respect to the Mortgage Loan no later than 90 days after discovery or notice of such breach, and provided, further, that, if such breach would cause the Mortgage Loan to be other than a “qualified mortgage” (as defined in the Code), then notwithstanding the previous provisions of this paragraph, the breaching party shall be required to repurchase or substitute the Defective Mortgage Loan within 45 days from the date the defect was discovered and the breaching party shall not have the option to make an indemnification payment with respect to such Mortgage Loan. Each determination as to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. The Repurchase Price for the repurchased Mortgage Loan shall be deposited in the Distribution Account, and the Trustee, or its designee, upon receipt of written certification of such deposit, shall release to the breaching party the related Mortgage File and shall execute and deliver (or cause the execution and delivery of) such instruments of transfer or assignment, in each case without recourse, representation or warranties, as either party shall furnish to the Trustee and as shall be necessary to vest in such party any Mortgage Loan released pursuant hereto and the Trustee, or its designee, shall have no further responsibility with regard to such Mortgage File (it being understood that the Trustee shall have no responsibility for determining the sufficiency of such assignment for its intended purpose). It is understood and agreed that the obligation of the breaching party to cure, to cause the cure of or to repurchase or substitute or make an indemnification payment with respect to any Mortgage Loan as to which such a breach has occurred and is continuing shall constitute the sole remedy against such party respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders. A. [OC, 9.3] If at any time the Trustee notifies the Trust Manager that any representation or warranty from the Trust Manager referred to in this Section 9.3 has been breached in respect of a Mortgage Loan or Related Security or the Trust Manager otherwise becomes aware of such breach (in which case it must advise the Trustee), then the Trust Manager must, on demand from the Trustee, pay to the Trustee the amount which is determined by the Trustee to be the Trustee’s loss as a result of the breach of the representation and warranty and in respect of which a Rating Notification has been given. However, until the Trustee becomes actually aware that the Trust Manager has breached a representation or warranty referred to in this Section 9.3 in respect of any Mortgage Loan or Related Security, the Trustee may assume that no such breach has occurred and that the Trust Manager is complying with all such representations and warranties and need not enquire whether that is, in fact, the case. […] The Transaction Documents contain the remedy mechanics set forth in the above for the breach of a representation or warranty with respect to the Mortgage Loans or Related Security in certain circumstances. […] 15 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 B. Missing Documents. Upon receipt of actual knowledge by the Depositor, the Mortgage Loan Seller, the Master Servicer, the Securities Administrator or the Issuer, or receipt of written notice (each of the Depositor, the Mortgage Loan Seller, the Master Servicer, the Securities Administrator and the Issuer hereby agreeing to give written notice thereof to such other parties), of any materially defective document in, or, following the date of delivery to the Securities Administrator, the Issuer and the Depositor of the Custodian Certification required under Section [ ] hereof, that a document is missing from the Mortgage Documents for a Mortgage Loan, the Securities Administrator shall promptly request that the Originator deliver such missing document or cure or cause the cure of such defect within 120 days from the earlier of its discovery or its receipt of notice. If the Originator has not delivered such missing document or cured such defect during such period, the Securities Administrator shall promptly notify the Issuer and the Certificateholders of such failure. In such event, upon receipt of written instruction and satisfactory indemnity from Certificateholders having more than 25% of the Aggregate Voting Interests, the Issuer shall enforce the obligations of the party under the Mortgage Loan Purchase and Servicing Agreement to repurchase that Mortgage Loan from the Issuer at the Purchase Price on or prior to the Determination Date following the expiration of such specified period. None of the Issuer or the Securities Administrator shall be responsible for determining whether such defect or the fact that a document is missing has or may have a material adverse effect on the value of, or the interest of the Certificateholders in, any Mortgage Loan. B. [no comparable item] C. Action to Compel Cure of Breach of Representations. The Trustee shall be obligated to enforce the obligation of a Representing Party in respect of (x) a missing or defective Mortgage Document or (y) any alleged breach of a representation and warranty of such Representing Party set forth in the related Purchase Agreement (including any representation or warranty in respect of a missing or defective Mortgage Document) or of the Originator or Mortgage Loan Seller under the Mortgage Loan Purchase and Sale Agreement if the Originator or Mortgage Loan Seller has an obligation to cure a breach, repurchase or substitute for or make an indemnification payment, if applicable, with respect to a Mortgage Loan under the Mortgage Loan Purchase and Sale Agreement, upon its receipt of (1) (A) written direction to do so by the Holders of more than 50% of the Aggregate Voting Interests of the Senior Certificates, for so long as there is a Controlling Holder under this Agreement, or (B) written direction to do so by the Holders of more than 50% of the Aggregate Voting Interests of the Certificates, if there is no Controlling Holder under this Agreement, and (2) an agreement by Holders directing the Trustee to take such action to provide in advance to the Trustee funds to pay for any fees, costs and expenses incurred by the Trustee, and to provide any indemnification reasonably requested by the Trustee. The Trustee shall provide notice to the Controlling Holder prior to taking any such action. However, Certificateholders shall not have the right to require the Trustee to pursue any action with respect to any Mortgage Loan as to which a final and binding decision by an arbitrator has already been issued, regardless of the particular claims made. C. [no comparable item] D. Third Party Review. The Securities Administrator (to the extent it has the necessary contact information) shall promptly notify the Controlling Holder (if any) and the Trustee of each Mortgage Loan that becomes Delinquent for more than 120 days. The Controlling Holder (at its expense) or, if there is no longer a Controlling Holder, the Trustee (at the expense of the Trust), subject to the limitation in clause (B) of the definition of Available Distribution Amount), shall engage an independent third party to review each Mortgage Loan that has been Delinquent for more than 120 days, other than any such Mortgage Loan that was the subject of a previous arbitration proceeding under the related Purchase Agreement or under the Mortgage Loan Purchase and Sale Agreement, to review whether any breaches of the representations and warranties made by a Representing Party under the related Purchase Agreement have occurred or if the Originator or Mortgage Loan Seller has an obligation to cure a breach, repurchase or substitute for or make an indemnification payment with respect to a Mortgage Loan under the Mortgage Loan Purchase and Sale Agreement. If the Controlling Holder does not notify the Securities Administrator of its engagement of any such independent third party to review any Mortgage Loan within 30 days of such Mortgage Loan becoming delinquent for more than 120 days, the Securities Administrator shall promptly notify the Trustee of the Controlling Holder’s failure to engage such an independent third party reviewer. In such a case, the Trustee shall then engage an independent third party reviewer upon its receipt of any such notice from the Securities Administrator. Such independent third party shall be a recognized third D. [no comparable item] 16 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 party with experience performing due diligence on residential mortgage loans and shall not be the same party that performed the pre-offering review of the Mortgage Loans. With respect to each Mortgage Loan, the Depositor shall make available to the Trustee and such independent third party reviewer, upon request, an electronic version of each related loan file in connection with such review. Any such review shall include, at a minimum, a review as to whether the Mortgage Loan was underwritten in accordance with the Representing Party’s underwriting standards (or in the case of certain identified Mortgage Loans, the underwriting standards of the mortgage lending institution from which the Representing Party purchased the Mortgage Loan, as set forth in the applicable Purchase Agreement) in effect at the time of origination, whether the Mortgage Loan was originated in accordance with all applicable laws and regulations, and whether any fraud may have occurred in connection with the origination of the Mortgage Loan. The third party shall report its findings and provide an attestation that its review and report have not been influenced or affected by interested parties. If, as a result of such review, there is evidence that a breach of a representation or warranty may have occurred requiring a Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) to cure such breach, repurchase or substitute for or make an indemnification payment with respect to the related Mortgage Loan, then the Controlling Holder or the Trustee, as applicable, will enforce such obligations, including mandatory participation in an arbitration proceeding pursuant to the related Purchase Agreement or the Mortgage Loan Purchase and Sale Agreement, as applicable, if necessary. If the Controlling Holder is the same entity as or an Affiliate of the party against which an enforcement action is to be taken, then the Trustee will enforce the remedy obligation of such party. If the Trustee is obligated to enforce the obligation of a Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) in respect of breaches of representations or warranties at the direction of Certificateholders, upon receipt of written notice of a breach, based on the findings of a third party reviewer or otherwise, the Trustee will first (i) demand that the applicable Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) cure such breach, or repurchase, substitute for or make an indemnification payment with respect to the related Mortgage Loan, and (ii) notify the Certificateholders of the Trustee’s submission of such demand. If the applicable Representing Party or the Originator or Mortgage Loan Seller, as applicable, responds to the demand within 60 days of the date of the demand, the Trustee will negotiate with such party so long as such party is pursuing negotiations in good faith. If the applicable Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) fails to satisfy its cure, repurchase or substitution obligations, or if the applicable Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) does not respond to the Trustee within 60 days of its receipt of the Trustee’s demand notice or if the applicable Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) has responded in good faith and the demand is not resolved within 180 days of such initial date of receipt, then the Trustee will not be required to pursue further enforcement action (including commencing arbitration proceedings) in connection with such demand unless it has received (i) (a) written direction to do so by the Holders of more than 50% of the Aggregate Voting Interests of the Senior Certificates, if there is a Controlling Holder under this Agreement or (b) written direction to do so by the Holders of more than 50% of the Aggregate Voting Interests of the Certificates, if there is no longer a Controlling Holder under this Agreement and (ii) an agreement by Holders directing the Trustee to take such action to provide in advance to the Trustee funds to pay for any fees, costs and expenses incurred by the Trustee in pursuing such further action, and provide any indemnification reasonably requested by the Trustee. In connection with any such action against a Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller), the Trustee shall pursue reimbursement for its fees, costs and expenses from such Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) under the terms of the related Purchase Agreement or from the Originator or Mortgage Loan Seller under the terms of the Mortgage Loan Purchase and Sale Agreement, as applicable, if directed to do so by the Certificateholders that provided such funds to the Trustee as described above. If the Trustee recovers any such fees, costs and expenses, it will be obligated to pay these amounts to such Certificateholders, to reimburse such Certificateholders up to any amounts previously paid by such Certificateholders. To the extent not reimbursed by the applicable Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) or the applicable Certificateholders, the Trustee shall be reimbursed from the Trust Estate, subject to the limitation in the definition of Available Distribution Amount. If, as a result of a review of a Mortgage Loan conducted the Controlling Holder or the Trustee, as applicable, concludes that a breach of a representation or warranty that would require a Representing Party (or, in certain cases, the Originator or Mortgage 17 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 Loan Seller) to cure, repurchase or substitute for or make an indemnification payment with respect to the related Mortgage Loan has not occurred, then such party shall notify the Securities Administrator in writing and the Certificateholders shall be notified by the Securities Administrator of this decision and provided details of the review pursuant to a Distribution Date Statement; provided that the Securities Administrator shall only be required to include such notification and any related details on any Distribution Date Statement to the extent it has received the same and shall have no obligation to review or redact any such information so received by it. Holders of more than 50% of the Aggregate Voting Interests of the Certificates may direct the Trustee to enforce a remedy obligation despite such a determination by either the Controlling Holder or the Trustee if, within thirty days of notification of the Certificateholders, (i) the Trustee receives written direction to do so by the Holders of more than 50% of the Aggregate Voting Interests of the Certificates and (ii) the Holders directing the Trustee to enforce the remedy obligation agree to provide in advance to the Trustee funds to pay for any costs and expenses incurred by the Trustee and to provide any indemnification reasonably requested by the Trustee. In connection with any such action directed by Certificateholders, if the Trustee recovers any fees, costs and expenses from such Representing Party (or, in certain cases, the Originator or Mortgage Loan Seller) under the terms of the related Purchase Agreement or from the Originator or Mortgage Loan Seller under the Mortgage Loan Purchase and Sale Agreement, as applicable, it will reimburse such amounts to the applicable Certificateholders to the extent that the Certificateholders have already paid such amounts to the Trustee. E. Arbitration. If an allegation of a breach of a representation or warranty is not resolved to the satisfaction of the party pursuing an action or the applicable Representing Party (or, in certain cases, the Originator), the parties will be required to resolve such dispute by submitting to an arbitration process pursuant to the terms of the related Purchase Agreement or the Mortgage Loan Purchase and Sale Agreement, as applicable. Arbitration will be conducted in accordance with the rules of the American Arbitration Association. Each party to the arbitration will bear its own costs of arbitration, except that the cost of the arbitrator will be shared equally. The finding of the arbitrator shall be final and binding upon all parties, including the Certificateholders and the Trustee. E. [no comparable item] F. Limitation on Rights of Holders. No Certificateholder, solely by virtue of its status as Certificateholder, shall have any right by virtue of or by availing itself of any provision of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Holder previously shall have given to the Trustee a written notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless, except as otherwise specified herein, the Holders of Certificates evidencing not less than [25% of the Class Principal Amount or Class Notional Amount (or Percentage Interest) of Certificates of each Class] [50% of the Aggregate Voting Interests] affected thereby shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the cost, expenses and liabilities to be incurred therein or thereby, and the Trustee, for [sixty] [thirty] days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and no direction inconsistent with such written request has been given such Trustee during such [sixty] [thirty]-day period by Certificateholders [evidencing not less than 25% of the Class Principal Amount or Class Notional Amount (or Percentage Interest) of Certificates of each Class affected thereby] [having more than 50% of the Aggregate Voting Interests]; it being understood and intended, and being expressly covenanted by each Certificateholder with every other Certificateholder, the Securities Administrator and the Trustee, that no one or more Holders of Certificates shall have any right in any manner whatever by virtue of or by availing itself of any provision of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of such Certificates, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Agreement, except in the manner herein provided and for the benefit of all Certificateholders. For the protection and enforcement of the provisions of this Section, each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. F. [no comparable item] 18 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS RMBS v3.0 Pepper Residential Securities Trust No. 16 (Refinancing) v1.1 G. [OC, 13.8 ] Removal of the Trust Manager. A “Trust Manager Default” occurs in respect of the Trust if: […] (b) any representation or warranty made by the Trust Manager under the Transaction Documents is incorrect or misleading when made and such failure is likely to have a Material Adverse Payment Effect, unless such failure is remedied within 30 days after the Trust Manager becoming aware of it. The Trustee may remove the Trust Manager as manager of the Trust Business of the Trust by giving the Trust Manager 30 days’ written notice. However, the Trustee may only give notice if at the time it gives the notice: (a) a Trust Manager Default is continuing in respect of the Trust; and (b) each Designated Rating Agency of the Trust has been notified of the proposed removal of the Trust Manager. 19 MARCH 14, 2017 COMPARISON OF REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS: PEPPER RESIDENTIAL SECURITIES TRUST NO. 16 (REFINANCING) DEAL V1.1 COMPARED TO RMBS V3.0 RESIDENTIAL MBS Report Number: 1063317 © 2017 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications. To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S. To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER. Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.” Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser. Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements. Author Allison Young +1.212.553.4325 allison.young@moodys.com ]]>

Vollständigen Artikel bei Moodys lesen