EX-33.C 5 ex33c.txt New Century Mortgage Corporation Certification Regarding Compliance with Applicable Servicing Criteria 1. New Century Mortgage Corporation, (the "Servicer") is responsible for assessing compliance with the servicing criteria applicable to it under paragraph (d) of Item 1122 of Regulation AB, as of and for the 12-month period ending December 31, 2006 (the "Reporting Period"), as set forth in Appendix A hereto. The transactions covered by this report include asset-backed securities transactions for which the Servicer acted as servicer involving residential mortgage loans as set forth in Appendix B (the "Platform"); 2. Except as set forth in paragraph 3 below, the Servicer used the criteria set forth in paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the applicable servicing criteria; 3. The criteria listed in the column titled "Inapplicable Servicing Criteria" on Appendix A hereto are inapplicable to the Servicer based on the activities it performs, directly or through its Vendors, with respect to the Platform; 4. Due to the instances of material noncompliance, as described on Appendix C hereto, the Servicer did not comply with the servicing set forth in Item 1122(d) of Regulation AB as of and for the 12-month period ending December 31, 2006, for loans serviced by the Servicer that were included in publicly issued mortgage-backed security transactions issued on or after January 1, 2006. 5. KPMG LLP, the Servicer's independent registered public accounting firm, has not completed its examination of the Servicer's compliance with the applicable servicing criteria set forth in Appendix A hereto as of and for the year ended December 31, 2006. KPMG LLP's report dated April 4, 2007 on the Servicer's compliance with such servicing criteria disclaims an opinion. April 4, 2007 New Century Mortgage Corporation By: /s/ Kevin Cloyd ------------------------- Name: Kevin Cloyd Title: Executive Vice President Appendix A
-------------------------------------------------------------------------------------------------------------------------------- Servicing Criteria Applicable Servicing Inapplicable Criteria Servicing Criteria -------------------------------------------------------------------------------------------------------------------------------- Reference Criteria Performed Performed by NOT by subservicer(s) Performed Vendor(s) or vender(s) by for which for which New Century New New Century or by Performed Century is is NOT the subservicer(s) Directly the Responsible or vendor(s) by Responsible Party retained by New Century Party the Company -------------------------------------------------------------------------------------------------------------------------------- General Servicing Considerations -------------------------------------------------------------------------------------------------------------------------------- Policies and procedures are instituted to monitor any X performance or other triggers and events of default in 1122(d)(1)(i) accordance with the transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- If any material servicing activities are outsourced to X third parties, policies and procedures are instituted to monitor the third party's performance and compliance with 1122(d)(1)(ii) such servicing activities. -------------------------------------------------------------------------------------------------------------------------------- Any requirements in the transaction agreements to maintain a X 1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained. -------------------------------------------------------------------------------------------------------------------------------- A fidelity bond and errors and omissions policy is in effect X on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the 1122(d)(1)(iv) transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- Cash Collection and Administration -------------------------------------------------------------------------------------------------------------------------------- Payments on mortgage loans are deposited into the X(1) X(1) appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the 1122(d)(2)(i) transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- Disbursements made via wire transfer on behalf of an obligor X 1122(d)(2)(ii) or to an investor are made only by authorized personnel. -------------------------------------------------------------------------------------------------------------------------------- Advances of funds or guarantees regarding collections, cash X flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as 1122(d)(2)(iii) specified in the transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- The related accounts for the transaction, such as cash X reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the 1122(d)(2)(iv) transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- Each custodial account is maintained at a federally insured X depository institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities 1122(d)(2)(v) Exchange Act. --------------------------------------------------------------------------------------------------------------------------------
------------------------------ 1 1122(d)(2)(i) is performed directly by New Century only as it relates to the recording and application of borrowers payments. The initial processing of cash receipts at the lockbox was performed by a vendor that did not provide an Item 1122 attestation report.
-------------------------------------------------------------------------------------------------------------------------------- Servicing Criteria Applicable Servicing Inapplicable Criteria Servicing Criteria -------------------------------------------------------------------------------------------------------------------------------- Reference Criteria Performed Performed by NOT by subservicer(s) Performed Vendor(s) or vender(s) by for which for which New Century New New Century or by Performed Century is is NOT the subservicer(s) Directly the Responsible or vendor(s) by Responsible Party retained by New Century Party the Company -------------------------------------------------------------------------------------------------------------------------------- Unissued checks are safegaurded so as to prevent X 1122(d)(2)(vi) unauthorized access. -------------------------------------------------------------------------------------------------------------------------------- Reconciliations are prepared on a monthly basis for all X asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transactidn agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in 1122(d)(2)(vii) the transaction agreements. --------------------------------------------------------------------------------------------------------------------------------- Investor Remittances and Reporting --------------------------------------------------------------------------------------------------------------------------------- Reports to investors, including those to be filed with the X X(2) Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number of mortgage loans serviced by the 1122(d)(3)(i) Servicer. --------------------------------------------------------------------------------------------------------------------------------- Amounts due to investors are allocated and remitted in X accordance with timeframes, distribution priority and other 1122(d)(3)(ii) terms set forth in the transaction agreements. --------------------------------------------------------------------------------------------------------------------------------- Disbursements made to an investor are posted within two X business days to the Servicer's investor records, or such 1122(d)(3)(iii) other number of days specified in the transaction agreements. --------------------------------------------------------------------------------------------------------------------------------- Amounts remitted to investors per the investor reports X agree with cancelled checks, or other form of payment, or 1122(d)(3)(iv) custodial bank statements. --------------------------------------------------------------------------------------------------------------------------------- Pool Asset Administration --------------------------------------------------------------------------------------------------------------------------------- Collateral or security on mortgage loans is maintained as X required by the transaction agreements or related mortgage 1122(d)(4)(i) loan documents. --------------------------------------------------------------------------------------------------------------------------------- Mortgage loans and related documents are safeguarded as X 1122(d)(4)(ii) required by the transaction agreements. --------------------------------------------------------------------------------------------------------------------------------- Any additions, removals or substitutions to the asset pool X are made, reviewed and approved in accordance with any 1122(d)(4)(iii) conditions or requirements in the transaction agreements. ---------------------------------------------------------------------------------------------------------------------------------
2. 1122(d)(3)(1)(C) is not performed directly by New Century and the servicer obtained an assertion of management and an accompanying Item 1122 attestation report from the party performing such activities.
-------------------------------------------------------------------------------------------------------------------------------- Servicing Criteria Applicable Servicing Inapplicable Criteria Servicing Criteria -------------------------------------------------------------------------------------------------------------------------------- Reference Criteria Performed Performed by NOT by subservicer(s) Performed Vendor(s) or vender(s) by for which for which New Century New New Century or by Performed Century is is NOT the subservicer(s) Directly the Responsible or vendor(s) by Responsible Party retained by New Century Party the Company -------------------------------------------------------------------------------------------------------------------------------- Payments on mortgage loans, including any payoffs, made in X(3) X(3) accordance with the related mortgage loan documents are posted to the Servicer's obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in 1122(d)(4)(iv) accordance with the related mortgage loan documents. --------------------------------------------------------------------------------------------------------------------------------- The Servicer's records regarding the mortgage loans agree X with the Servicer's records with respect to an obligor's 1122(d)(4)(v) unpaid principal balance. -------------------------------------------------------------------------------------------------------------------------------- Changes with respect to the terms or status of an obligor's X mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorised personnel in accordance with the transaction agreements and related pool 1122(d)(4)(vi) asset documents. -------------------------------------------------------------------------------------------------------------------------------- Loss mitigation or recovery actions (e.g., forbearance plans, X modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other 1122(d)(4)(vii) requirements established by the transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- Records documenting collection efforts are maintained during X the period a mortgage loan is delinquent in accordance with the transaction agreements. Such records arc maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent mortgage loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness 1122(d)(4)(viii) or unemployment). -------------------------------------------------------------------------------------------------------------------------------- Adjustments to interest rates or rates of return for mortgage X loans with variable rates are computed based on the related 1122(d)(4)(ix) pool asset documents. -------------------------------------------------------------------------------------------------------------------------------- Regarding any funds held in trust for an obligor (such as X escrow accounts): (A) such funds are analyzed, in accordance with the obligor's mortgage loans documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable mortage loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related mortgage loans, or such other number of days 1122(d)(4)(x) specified in the transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- Payments made on behalf of an obligor (such as tax or X insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other 1122(d)(4)(xi) number of days specified in the transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- Any late payment penalties in connection with any payment X to be made on behalf of an obligor are paid from the Servicer's funds and not charged to the obligor, unless the 1122(d)(4)(xii) late payment was due to the obligor's error or omission. --------------------------------------------------------------------------------------------------------------------------------
3. 1122(d)(4)(iv) is performed directly by New Century only as it relates to the recording and application of borrower payments. The initial processing of cash receipts at the lockbox was performed by a vendor that did not provide an Item 1122 attestation report.
-------------------------------------------------------------------------------------------------------------------------------- Servicing Criteria Applicable Servicing Inapplicable Criteria Servicing Criteria -------------------------------------------------------------------------------------------------------------------------------- Reference Criteria Performed Performed by NOT by subservicer(s) Performed Vendor(s) or vender(s) by for which for which New Century New New Century or by Performed Century is is NOT the subservicer(s) Directly the Responsible or vendor(s) by Responsible Party retained by New Century Party the Company -------------------------------------------------------------------------------------------------------------------------------- Disbursements made on behalf of an obligor are posted X(4) X(4) within two business days to the obligor's records maintained by the servicer, or such other number of days specified in 1122(d)(4)(xiii) the transaction agreements. -------------------------------------------------------------------------------------------------------------------------------- Delinquencies, charge-offs and uncollectible accounts are X recognized and recorded in accordance with the transaction 1122(d)(4)(xiv) agreements. -------------------------------------------------------------------------------------------------------------------------------- Any external enhancement or other support, identified in Item X 1114(a)(1) through (3) or Item 1115 of Regulation AB, is 1122(d)(4)(xv) maintained as set forth in the transaction agreements. --------------------------------------------------------------------------------------------------------------------------------
---------- 4. 1122(d)(4)(xiii) is performed directly by New Century only as it relates to processing of insurance payments. Tax payments are processed by a vendor for which the Company has obtained an Item 1122 attestation report from the vendor performing such activities. APPENDIX B TRANSACTIONS IDENTIFIED ON PLATFORM Transaction Name Closing Date CMLT 2006-NC1 February 8, 2006 NCHET 2006-S1 February 27, 2006 NCHET 2006-1 March 30, 2006 CMLTI 2006-NC1 June 1, 2006 CMLT 2006-NC2 June 21, 2006 NCHET 2006-Alt 1 June 22, 2006 NCHET 2006-2 June 29, 2006 CMLT 2006-NC3 August 10, 2006 CMLTI 2006-NC2 September 1, 2006 MLT 2006-NC4 September 28, 2006 CMLTI 2006-HE3 December 1, 2006 CMLT 2006-NC5 December 19, 2006 APPENDIX C 1. New Century (the "Servicer") has identified the following material noncompliance with servicing criteria 1122(d)(1)(ii), 1122(d)(1)(iv), 1122(d)(2)(vii)(B), 1122(d)(4)(vi) and 1122(d)(4)(vii) applicable to the Platform during the year ended December 31, 2006 as follows: Servicing criteria 1122(d)(1)(ii) The Servicer did not have adequate policies and procedures in place to monitor the material servicing activities outsourced to the third party performing the initial processing of cash receipts at the lockbox. Servicing criteria 1122(d)(1)(iv) The Servicer did not maintain adequate fidelity bond coverage. Servicing criteria 1122(d)(2)(vii)(B) The Servicer did not complete bank account reconciliations within the time required. Servicing criteria 1122(d)(4)(vi) The Servicer did not review and approve changes to the terms or status of an obligor's pool asset as required by the respective transaction agreements and related pool asset documents. Servicing criteria 1122(d)(4)(vii) The Servicer did not: Initiate, conduct and conclude loss mitigation or recovery actions within time frames or other requirements of therespective transaction agreements; Execute forbearance plans as required by the respective transaction agreements; Execute pre-foreclosure sales or short payoffs resulting from the acceptance of funds in an amount that is less than the total borrower indebtedness as required by the respective transaction agreements; and Execute foreclosures as required by the respective transaction agreements.