Standard & Poor's 17g-7 Disclosure Report - Standard and Poor's ...

Standard & Poor's 17g-7Disclosure ReportJan. 27, 2012SEC Rule 17g-7SEC Rule 17g-7 requires anNRSRO, for any reportaccompanying a credit ratingrelating to an asset-backedsecurity as defined in the Rule,to include a description of therepresentations, warranties andenforcement mechanismsavailable to investors and adescription of how they differfrom the representations,warranties and enforcementmechanisms in issuances ofsimilar securities.This is Standard & Poor’s 17g-7Disclosure Report for thetransaction shown in the titleabove.AH Mortgage ServicerAdvance Revolving Trust 3 -Series 2012-OSAdvance receivables-backed notes series 2012-OSPrimary Credit Analyst:Jack Kahan, New York, (1) 212-438-8012jack_kahan@standardandpoors.comAnalytical Manager:Sharif Mahdavian, New York, (1) 212-438-2412sharif_mahdavian@standardandpoors.com

U.S. RMBS Servicer Advances Standard & Poor's 17g-7 Disclosure Report: AH Mortgage ServicerAdvance Revolving Trust 3 – Series 2012 OSAs required by SEC Rule 17g-7, this report includes only those representations, warranties and enforcement mechanisms availableto investors. This report does not include representations and warranties without a corresponding enforcement mechanism orremedy in the transaction documents that may be exercised by investors (or their representatives).Table 1No. Benchmark Transaction Differences betweentransaction andbenchmark1 The Seller hereby makes the followingrepresentations and warranties onwhich the Depositor and the Issuer arerelying in accepting the AggregateReceivables and executing thisAgreement. The representations aremade as of the execution and delivery ofthis Agreement, and as of each date ofconveyance of the Initial Receivables orany Additional Receivables, asapplicable, pursuant to this Agreement.Such representations and warrantiesshall survive the sale and/orcontribution of any AggregateReceivables to the Depositor and are asfollows:2 The Seller is receiving fair considerationand reasonably equivalent value inexchange for the sale and/or contribution ofthe Aggregate Receivables to the Depositorunder this Agreement.3 No sale, contribution, transfer, assignmentor conveyance of Aggregate Receivablesby the Seller to the Depositor contemplatedby this Agreement will be subject to the bulktransfer or any similar statutory provisionsin effect in any applicable jurisdiction.Representations and warrantiesAHMSI, as receivables seller andas servicer, hereby makes thefollowing representations andwarranties for the benefit of theDepositor, the PC Issuer, the InitialTransferor, the Transferor, theIssuer, the Indenture Trustee, theNoteholders, the Delaware VFNIssuer, the Delaware VFN IndentureTrustee and the Delaware VFNNoteholders on which the Depositoris relying in purchasing theAggregate Receivables andexecuting this Agreement, on whichthe PC Issuer is relying inpurchasing the AggregateReceivables and executing theReceivables Pooling Agreement, onwhich the Initial Transferor is relyingon acquiring PC1 and executing therelated PC1 Transfer Agreement,on which the Transferor is relyingon acquiring PC1 and executing therelated PC1 Transfer Agreement,on which the Issuer is relying onacquiring PC1, and on which theNoteholders and the Delaware VFNNoteholders are relying inpurchasing the Notes and the VFNNotes, respectively. Therepresentations are made as of thedate of this Agreement, and as ofeach Sale Date. Suchrepresentations and warrantiesshall survive the sale and/orcontribution, assignment, transferand conveyance of anyReceivables and any other relatedTransferred Assets to the Depositorand the PC Issuer.The aggregate considerationreceived by AHMSI, as receivablesseller, pursuant to this Agreement isfair consideration having areasonably equivalent value to thevalue of the AggregateReceivables.The aggregate considerationreceived by AHMSI, as receivablesseller, pursuant to this Agreement isfair consideration having areasonably equivalent value to thevalue of the AggregateReceivables.Copyright © 2012 by Standard & Poor's Financial Services LLC, All rights reserved. No reprint or dissemination without S&P’s permission.See Terms of Use/ Disclaimer on the last page. Page 2

U.S. RMBS Servicer Advances Standard & Poor's 17g-7 Disclosure Report: AH Mortgage ServicerAdvance Revolving Trust 3 – Series 2012 OS4 The Seller has no reason to believe that atthe time of the sale and/or contribution ofany Receivables to the Depositor pursuanthereto, such Receivables will not be paid infull.5 The Seller has not waived or forgiven anyobligation of a Mortgagor to repay anyServicing Advance, in whole or in part.6 Each Initial Receivable and AdditionalReceivable is payable in United Statesdollars and has been created pursuant toand in accordance with the terms of therelated Pooling and Servicing Agreement,in accordance with the Seller’s customaryprocedures with respect to the applicableSecuritization Trust and in the ordinarycourse of business of the Seller.7 The sale and/or contribution to theDepositor and the Issuer of the rights toreimbursement Servicing Advances undereach Securitization Trust, and theassignment and Grant thereof to theIndenture Trustee, does not violate theterms of the related Pooling and ServicingAgreement or any other document oragreements to which the Seller is a party orto which its assets or properties are subject.AHMSI has no reason to believethat at the time of the transfer ofany Receivables to the Depositorpursuant hereto, such Receivableswill not be paid in full.As of the related Sale Date, eachReceivable represents validentitlement to be paid, has not beenrepaid in whole or in part or beencompromised, adjusted, extended,satisfied, subordinated, rescinded,waived, amended or modified, andis not subject to compromise,adjustment, extension, satisfaction,subordination, rescission, set-off,counterclaim, defense, waiver,amendment or modification by anyPerson.Each Receivable is an EligibleReceivable that is payable in UnitedStates dollars and has beencreated pursuant to a DesignatedServicing Agreement that is anEligible Servicing Agreement, inaccordance with the terms of suchDesignated Servicing Agreementand with the customary proceduresand in the ordinary course ofbusiness of AHMSI. EachReceivable arises from an Advancefor which AHMSI is entitled toreimbursement pursuant to aDesignated Servicing Agreement.Neither the execution, delivery andperformance of this Agreement, theother Transaction Documents orthe Related Documents by AHMSI,nor the consummation by AHMSI ofthe transactions contemplatedhereby or thereby nor the fulfillmentof or compliance with the terms andconditions of this Agreement, theRelated Documents or the otherTransaction Documents to whichAHMSI is a party (A) will violate theorganizational documents ofAHMSI, (B) will constitute a default(or an event which, with notice orlapse of time or both, wouldconstitute a default), or result in abreach or acceleration of, anymaterial indenture, agreement orother material instrument to whichAHMSI or any of its Affiliates is aparty or by which it or any of themis bound, or which may beapplicable to AHMSI, (C)constitutes a default (whether withnotice or lapse of time or both), orresults in the creation or impositionof any Adverse Claim upon any ofthe property or assets of AHMSIunder the terms of any of theforegoing, or (D) violates anyCopyright © 2012 by Standard & Poor's Financial Services LLC, All rights reserved. No reprint or dissemination without S&P’s permission.See Terms of Use/ Disclaimer on the last page. Page 3

U.S. RMBS Servicer Advances Standard & Poor's 17g-7 Disclosure Report: AH Mortgage ServicerAdvance Revolving Trust 3 – Series 2012 OS14 Each such Receivable is entitled to be paid,has not been repaid in whole or beencompromised, adjusted (except by partialpayment), extended, satisfied,subordinated, rescinded, amended ormodified, and is not subject to compromise,adjustment, extension, satisfaction,subordination, rescission, set-off,counterclaim, defense, amendment ormodification by the Seller.15 No Receivable is an obligation of aSecuritization Trust for which aSecuritization Termination Event hasoccurred and is continuing.16 None of the Receivables are related toServicing Advances reimbursed other thanin accordance with the terms and provisionsof the related Pooling and ServicingAgreements.17 Each Receivable is an obligation of aSecuritization Trust for which the Poolingand Servicing Agreement provides that (A)the Servicer may enter into an advancefacility with any person which provides thatsuch Person may receive an assignment orpledge of the Servicer’s rights to bereimbursed for Servicing Advances undersuch Pooling and Servicing Agreement, (B)all Servicing Advances as to a MortgageLoan are reimbursed on a First In First Out(“FIFO”) basis, such that the Servicingincluding those relating toconsumer protection, is valid andenforceable and, at the time it issold to the Depositor, will not besubject to any set-off, counterclaimor other defense to payment by theObligor, the related MBS Trust,MBS Trustee, any other owner orany other party.As of the related Sale Date, eachReceivable represents validentitlement to be paid, has not beenrepaid in whole or in part or beencompromised, adjusted, extended,satisfied, subordinated, rescinded,waived, amended or modified, andis not subject to compromise,adjustment, extension, satisfaction,subordination, rescission, set-off,counterclaim, defense, waiver,amendment or modification by anyPerson.Each Receivable is an EligibleReceivable that is payable in UnitedStates dollars and has beencreated pursuant to a DesignatedServicing Agreement that is anEligible Servicing Agreement, inaccordance with the terms of suchDesignated Servicing Agreementand with the customary proceduresand in the ordinary course ofbusiness of AHMSI. EachReceivable arises from an Advancefor which AHMSI is entitled toreimbursement pursuant to aDesignated Servicing Agreement.Each Receivable is an EligibleReceivable that is payable in UnitedStates dollars and has beencreated pursuant to a DesignatedServicing Agreement that is anEligible Servicing Agreement, inaccordance with the terms of suchDesignated Servicing Agreementand with the customary proceduresand in the ordinary course ofbusiness of AHMSI. EachReceivable arises from an Advancefor which AHMSI is entitled toreimbursement pursuant to aDesignated Servicing Agreement.Each Receivable arising under aDesignated Servicing Agreement isfully transferable and such transferwill not violate the terms of, orrequire the consent of any Personunder the related DesignatedServicing Agreement or any otherdocument or agreement to whichAHMSI is a party or to which itsassets or properties are subject.Copyright © 2012 by Standard & Poor's Financial Services LLC, All rights reserved. No reprint or dissemination without S&P’s permission.See Terms of Use/ Disclaimer on the last page. Page 6

U.S. RMBS Servicer Advances Standard & Poor's 17g-7 Disclosure Report: AH Mortgage ServicerAdvance Revolving Trust 3 – Series 2012 OSAdvances of a particular type that weredisbursed first in time will be reimbursedprior to Servicing Advances of the sametype with respect to that Mortgage Loanthat were disbursed later in time, and (C)other than with respect to SecuritizationTrusts with Modified Call Language, theServicer shall be reimbursed for alloutstanding and unreimbursed ServicingAdvances under such Pooling andServicing Agreement upon exercise of aclean-up call with respect to the relatedSecuritization Trust.18 In respect of the [derivative contract]entered into by the Issuer, [the derivativecounterparty] makes the representationsset out in Section 3 of the ISDA MasterAgreement.19 In respect of the [derivative contract]entered into by the Issuer, [the derivativecounterparty] makes the representationsset out in Paragraph 9 of the US ISDACredit Support Annex.20 Repurchase Upon Breach. The Issuer, theDepositor, the Indenture Trustee or theSeller, as the case may be, shall inform theIssuer, the Depositor, the Seller, the Co-Agents and the Indenture Trustee (asapplicable) promptly (but in no event laterthan two (2) Business Days following suchdiscovery), in writing, upon the discovery ofany breach of the Seller’s or Depositor’srepresentations and warranties hereunder.If any such representation or warrantypertains to a Receivable (including therepresentations under Sections # and #)),unless such breach shall have been curedwithin ten (10) days after the earlier tooccur of the discovery of such breach bythe Issuer, the Depositor or the Seller (asapplicable) or receipt of written notice ofsuch breach by the Issuer, the Depositor,any Co-Agent, the Indenture Trustee or theSeller (as applicable) or waived by any Co-Agent, the Seller or the Depositor, asapplicable, shall repurchase suchReceivable from the Issuer at a price equalto the outstanding Receivables Balance ofsuch Receivable as of the date ofrepurchase (the “Repurchase Price”);provided, that neither the Depositor nor theSeller shall repurchase any suchReceivable pursuant to this Section #unless the Collateral CoverageRequirement is not satisfied. The Seller orthe Depositor, as applicable, shall pay anyRepurchase Price directly to the IndentureTrustee for deposit into the ReimbursementAccount.In respect of the Interest Rate Capentered into by the PC Issuer, TheBank of New York Mellon makesthe representations set out inSection 3 of the ISDA MasterAgreement.In respect of the Interest Rate Capentered into by the PC Issuer, TheBank of New York Mellon makesthe representations set out inParagraph 9 of the US ISDA CreditSupport Annex.Enforcement mechanism(s)AHMSI shall inform the IndentureTrustee, the Administrative Agent,the Delaware VFN IndentureTrustee and the Delaware VFNAdministrative Agent promptly, inwriting, upon the discovery of anybreach of its representations,warranties or covenants hereunder.Unless such breach shall havebeen cured or waived within thirty(30) days after the earlier to occurof the discovery of such breach byAHMSI or receipt of written noticeof such breach by AHMSI, suchthat, in the case of a representationand warranty, such representationand warranty shall be true andcorrect in all material respects as ifmade on such day, and AHMSIshall have delivered to theIndenture Trustee and theDelaware VFN Indenture Trusteean officer’s certificate describing thenature of such breach and themanner in which the relevantrepresentation and warrantybecame true and correct or thebreach was otherwise cured,AHMSI shall either repurchase theaffected Receivables or indemnifyits assignees and any entitieshaving a pari passu undividedinterest in such Receivables(including the Depositor, the PCIssuer, the Initial Transferor, theTransferor, the Issuer, theIndenture Trustee, the DelawareVFN Issuer, the Delaware VFNCopyright © 2012 by Standard & Poor's Financial Services LLC, All rights reserved. No reprint or dissemination without S&P’s permission.See Terms of Use/ Disclaimer on the last page. Page 7

U.S. RMBS Servicer Advances Standard & Poor's 17g-7 Disclosure Report: AH Mortgage ServicerAdvance Revolving Trust 3 – Series 2012 OS21 Breach of any representation by the[derivative counterparty] constitutes anEvent of Default under section 5 of theISDA Master Agreement, entitling theIssuer to terminate the [derivative contract]early, whereupon an early terminationpayment may be payable to, or by, theIssuer. Such payments will be measuredand paid as described in Section 6(e) of theISDA Master Agreement.Indenture Trustee and each of theirrespective assignees), against andhold its assignees and any entitieshaving any pari passu undividedinterest in such Receivables(including the Depositor, the PCIssuer, the Initial Transferor, theTransferor, the Issuer, theIndenture Trustee, the DelawareVFN Issuer, the Delaware VFNIndenture Trustee and each of theirrespective assignees) harmlessfrom any cost, liability and expense,including, without limitation,reasonable attorneys’ fees andexpenses, whether incurred inenforcement proceedings betweenthe parties or otherwise, incurred asa result of, or arising from, suchbreach (each such repurchase orindemnification amount to be paidhereunder, an “IndemnityPayment”), the amount of whichshall equal the ReceivablesBalance of any affected Receivable.This Section 4(d) sets forth theexclusive remedy for a breach ofrepresentation, warranty orcovenant by AHMSI, as servicer,pertaining to a Receivable.Notwithstanding the foregoing, thebreach of any representation,warranty or covenant shall not bewaived by the Issuer or theDelaware VFN Issuer under anycircumstances without the consentof the Majority Holders of all Notesthen outstanding under theIndenture and the holders of theVFN Notes outstanding under theDelaware VFN Indenture.Breach of any representation byThe Bank of New York Mellonconstitutes an Event of Defaultunder section 5 of the ISDA MasterAgreement, entitling the PC Issuerto terminate the Interest Rate Capearly, whereupon an earlytermination payment may bepayable to, or by, the Issuer. Suchpayments will be measured andpaid as described in Section 6(e) ofthe ISDA Master Agreement.The language in the Standard & Poor’s 17g-7 Benchmark reflects representations, warranties and enforcement mechanismsavailable to investors that commonly appear in the transaction documents for a specific type of security. In order to make thebenchmarks generic, we made the following modifications. Specific article or section numbers have been replaced by anumber symbol (Example: ‘Section 5’ now reads as ‘Section #’). Proper nouns have been replaced with the bracketed nameof the role the entity plays in the transaction (Example: ‘ABC Corp’ now reads as [Seller]). Numbers or amounts specific to adeal have been replaced with a number symbol (Example: ‘more than 30%’ now reads as ‘more than #%’). Non-numericalCopyright © 2012 by Standard & Poor's Financial Services LLC, All rights reserved. No reprint or dissemination without S&P’s permission.See Terms of Use/ Disclaimer on the last page. Page 8

U.S. RMBS Servicer Advances Standard & Poor's 17g-7 Disclosure Report: AH Mortgage ServicerAdvance Revolving Trust 3 – Series 2012 OScharacteristics have been replaced by a generic description (Example: ‘financing of agricultural and construction equipment’now reads as ‘financing of [type of] equipment’).This Standard & Poor's 17g-7 Disclosure Report was prepared based on Standard & Poor’s current good faith understandingof SEC Rule 17g-7. This Standard & Poor's 17g-7 Disclosure Report is not intended to be, and may not be relied upon as,legal advice.Copyright © 2012 by Standard & Poor's Financial Services LLC, All rights reserved. No reprint or dissemination without S&P’s permission.See Terms of Use/ Disclaimer on the last page. Page 9

U.S. RMBS Servicer Advances Standard & Poor's 17g-7 Disclosure Report: AH Mortgage ServicerAdvance Revolving Trust 3 – Series 2012 OSTerms of UseCopyright © 2012 by Standard & Poor’s Financial Services LLC (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved.No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any part thereof(Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system,without the prior written permission of S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, andany third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee theaccuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions, regardless of thecause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content isprovided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORSOR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWAREOR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary,compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income orlost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and notstatements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. S&P assumes no obligationto update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill,judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other businessdecisions. S&P’s opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor.While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of duediligence or independent verification of any information it receives.S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of theirrespective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P hasestablished policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analyticalprocess.S&P may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of securities or fromobligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites,www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributedthrough other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available atwww.standardandpoors.com/usratingsfees.STANDARD & POOR’S, S&P, GLOBAL CREDIT PORTAL and RATINGSDIRECT are registered trademarks of Standard & Poor’s Financial Services LLC.Copyright © 2012 by Standard & Poor's Financial Services LLC, All rights reserved. No reprint or dissemination without S&P’s permission.See Terms of Use/ Disclaimer on the last page. Page 10