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Loans constituting GwA Pcolsa in accordance with FHA, VA or RECD regulations, as applicable, and GNMA re,m lations. The monthly remuneration of the Servicer for its servicing functions, and the guaranty fee charged by GNMA, are based on the unpaid principal amount of the Series A GNMA Certificates outstanding. In compliance with GNMA regulations and policies, the total of these servicing and guaranty fees equals 0.50% per annum calculated on the principal balance of. each Series A Mortgage Loan outstanding on the last day of the month preceding such calculation. The GNMA Pass -Through Rate is determined by deducting from the Mortgage Rate the 0.50% servicing and guaranty fees and Excess Service Fee, if any, because the servicing and guaranty fees and Excess Service Fee, if any, are deducted from payments on the Series A Mortgage Loans before payments are passed through to the Trustee. It is expected that interest and principal payments on the Series A Mortgage Loans received by the Servicer will be the source of money for payments on the Series A GNMA Certificates. If such payments are less than the amount then due, the Servicer is obligated to advance its own funds to ensure timely payment of all scheduled payments on the Series A GNMA Certificates. GNMA guarantees such timely payment in the event of the failure of the Servicer to pass through an amount equal to the scheduled payments (whether or not made by the Mortgagors). If such payments are not received as scheduled the Trustee has recourse directly to GNMA. The Servicer is required to advise GNMA in advance of any impending default on scheduled payments so that GNMA as guarantor will be able to continue such payments as scheduled in accordance with the GNMA Mortgage -Backed Securities Guide (the "GNMA Guide"). The GNMA guaranty agreement to he entered into by GNMA and the Servicer upon issuance of the Series A GNMA Certificates (the "GNMA Guaranty Agreement:") will provide that, in the event of it default by the Servicer, including (i) a request_ to GNMA to make a payment of principal of or .interest on a Series A GNMA Certificate when the Mortgagor is not in default under the Mortgage Note, (ii) insolvency of. the Stirvi.cer, or (iii) default by the Servicer under any other guaranty agreement with GNMA, GNMA shall have the right, by latter- to the Servicer, to effect and complete the extinguishment of the Servicer's interest in the related Series A Mortgage Loans. and the related Series A Mortgage Loans shall thereupon berme the absolute property of 01MA. subject only to tt++ unsatLstied rights Of the holder of the Series A aNM Certificates In such event, all parer and authority at the Servicer with respect to for servicing of such OWa Pools, including the right to collect ttu. *vrvitinq f— -also will terminate and espire. The authority r,; viosr under the terms of the QS Ouide will be passe t a" be Vested in QJM. and Q1 M will be the to all respects to tie sw"joer is its capacity as Sol v a 4,W1 , and wi l l be sebj• + t o at l a .1 too placed as the am - leer n