Item 1. Business.
Omitted.
Item 1A.
Item 1A. Risk Factors.
Omitted.
Item 1B.
Item 1B. Unresolved Staff Comments.
None.
Item 2.
Item 2. Properties.
Omitted.
Item 3.
Item 3. Legal Proceedings.
Omitted.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
Omitted.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Omitted.
Item 6.
Item 6. Selected Financial Data.
Omitted.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation.
Omitted.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Omitted.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Omitted.
Item 9.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
Omitted.
Item 9A.
Item 9A. Controls and Procedures.
Omitted.
Item 9A(T). Controls and Procedures.
Omitted.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
Omitted.
Item 11.
Item 11. Executive Compensation.
Omitted.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Omitted.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Omitted.
Item 14.
Item 14. Principal Accounting Fees and Services.
Omitted.
ADDITIONAL DISCLOSURE ITEMS FOR REGULATION AB
Item 1112(b) of Regulation AB, Significant Obligor Financial Information.
No single obligor represents 10% or more of the pool assets held by the issuing entity.
Item 1114(b)(2) of Regulation AB, Significant Enhancement Provider Financial Information.
No entity or group of affiliated entities provides any external credit enhancement or other support for the certificates within this transaction as described under Item 1114 (a) of Regulation AB.
Item 1115(b) of Regulation AB, Certain Derivatives Instruments (Financial Information).
Bear Stearns Financial Products Inc. provides an Interest Rate Cap Contract derivative instrument for the trust as disclosed in the 424 Prospectus. No additional disclosure is necessary because the significance percentage for the interest rate corridor is less than 10%.
On March 16, 2008, JPMorgan Chase & Co. agreed to guarantee the obligations of Bear Stearns Financial Products Inc. under the Interest Rate Cap Contract pursuant to the terms of the Guaranty Agreement described below in Item 1119. Additional disclosure with respect to JPMorgan Chase & Co. can be found below in Item 1119. The significance percentage represented by the guarantee of the Interest Rate Cap Contract is less than 10%. Except with respect to the addition of this guarantee, the terms and conditions of the Interest Rate Cap Contract remain unchanged.
Item 1117 of Regulation AB, Legal Proceedings.
The following updates disclosure which originally provided in connection with the Form 424B5 filed on 3/1/2007 by the trust, SEC Accession No. 0000911420-07-000177.
The sponsor has received a civil investigative demand (CID), from the Federal Trade Commission (FTC), seeking documents and data relating to the sponsor's business and servicing practices. The CID was issued pursuant to a December 8, 2005 resolution of the FTC authorizing non-public investigations of various unnamed subprime lenders, loan servicers and loan brokers to determine whether there have been violations of certain consumer protections laws. The sponsor is cooperating with the FTC's inquiry.
On March 10, 2008, EMC received notice from the Staff of the FTC that the Staff believed EMC and its parent, The Bear Stearns Companies, Inc. had violated a number of Federal consumer protection statutes in connection with its servicing activities. With the notice, the Staff delivered a draft complaint and draft consent order seeking certain injunctive relief regarding business practices and unspecified monetary redress. The Staff also indicated that it had been authorized to offer an opportunity to resolve the matter though consent negotiations before it seeks approval from the FTC to proceed with the filing of a complaint. EMC expects to engage in such discussions with the Staff.
RODRIGUEZ v. EMC Mortgage Corporation and The Bear Stearns Companies
This purported class action is pending in U. S. District Court for the District of Connecticut. The case was filed in December 2007. It seeks certification of a class made up of African-American and Hispanic borrowers who had a non-prime loan serviced by EMC and who were subjected to allegedly improper servicing practices, including imposition of unwarranted fees, pyramiding of late fees, unjustified forced-placing of insurance, failure to properly apply payments, improper reporting of derogatory credit information, and failure to properly administer escrow accounts. EMC and Bear Stearns have filed motions to dismiss and to strike.
MONACO v. Bear Stearns Residential Mortgage Corporation
This purported class action is pending in U. S. District Court for the Central District of California. It was originally filed in August 2007. A third amended complaint was filed on February 26, 2008. The case involves BSRMC's option ARM product. The complaint alleges that certain aspects of the loan, including the variable rate feature and the possibility of negative amortization, were not properly disclosed. The case brings counts under the Truth-in-Lending Act and under California law prohibiting unfair, deceptive and/or fraudulent business practices. The complaint seeks to certify a class made up of all borrowers who obtained an Option ARM loan from BSRMC secured by their primary residence in the four years prior to the case being filed. BSRMC will be filing a response to the third amended complaint shortly.
Item 1119 of Regulation AB, Affiliations and Certain Relationships and Related Transactions.
The information regarding this Item has been previously filed in a 424(b)(5) filing dated March 1, 2007.
On March 16, 2008, JPMorgan Chase & Co. ("JPMorgan Chase") announced that it had entered into an Agreement and Plan of Merger, dated March 16, 2008 (the "Agreement and Plan of Merger"), and subsequently amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 24, 2008 (such amendment, together with the Agreement and Plan of Merger, the "Merger Agreement"), with The Bear Stearns Companies Inc., the parent company of the Bear Stearns Financial Products Inc. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in Merger Agreement, a wholly-owned subsidiary of JPMorgan Chase will merge with and into The Bear Stearns Companies Inc. with The Bear Stearns Companies Inc. continuing as the surviving corporation and as a wholly-owned subsidiary of JPMorgan Chase. The Merger Agreement has been approved by the Boards of Directors of The Bear Stearns Companies Inc. and JPMorgan Chase and is subject to customary closing conditions, including stockholder approval. The Federal Reserve, the Office of the Comptroller of the Currency and other federal agencies have given all necessary approvals for the merger. The merger is expected to be completed by the end of the second calendar year quarter of 2008, however there can be no assurance that the merger will close as contemplated.
In connection with the Merger Agreement, JPMorgan Chase issued an Amended and Restated Guaranty Agreement, effective as of March 16, 2008 (the "Guaranty"), guaranteeing the obligations and liabilities of The Bear Stearns Companies Inc. and certain of its affiliates, including the Bear Stearns Financial Products Inc's obligations under the Interest Rate Cap Contract . A copy of the Guaranty is filed as Exhibit 99.1 to this Form 10-K. Except with respect to the addition of this Guaranty, the terms and conditions of the Interest Rate Cap Contract remain unchanged.
JPMorgan Chase is a financial holding company incorporated under Delaware law, whose principal office is located in New York, New York. JPMorgan Chase currently holds approximately $1.6 trillion in assets, and has $123 billion in stockholders' equity with operations worldwide. JPMorgan Chase services include investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world's corporate, institutional and government clients under its JPMorgan and Chase brands. Information about JPMorgan Chase is available at www.jpmorganchase.com.
Item 1122 of Regulation AB, Compliance with Applicable Servicing Criteria.
The reports on assessment of compliance with the servicing criteria for asset-backed securities and the related attestation reports on such assessments of compliance are attached hereto under Item 15.
Item 15. Exhibits, Financial Statement Schedules.
(a) Exhibits.
(4.1) Pooling and Servicing Agreement, dated February 1, 2007, among Structured Asset Mortgage Investments II Inc., as depositor, Wells Fargo Bank National Association, as master servicer and as securities administrator, EMC Mortgage Corporation and Citibank, N.A., as trustee (As previously filed on Form 8-K filed on March 16, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.1) Yield Maintenance Agreements, dated February 28, 2007, between Bear Stearns Financial Products Inc. and the Trustee on the behalf of Structured Asset Mortgage Investments II Trust 2007-AR2 (As previously filed on Form 8-K filed on March 16, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.2) Terms Agreement, dated February 28, 2007, to the Underwriting Agreement, dated February 26, 2007 between Bear Stearns & Co. and Structured Asset Mortgage Investments II Inc. (As previously filed on Form 8-K filed on March 16, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.3) Custodial Agreement dated February 28, 2007, by and among CITIBANK, N.A., as trustee, Structured Asset Mortgage Investment II Inc., as depositor, Wells Fargo Bank, National Association, as master servicer and securities administrator and Wells Fargo Bank, National Association, as custodian (As previously filed on Form 8-K filed on March 16, 2007 and Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.4) Servicing Agreement, dated February 1, 2007, between Structured Asset Mortgage Investments II Inc. and EMC Mortgage Corporation (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.5) Second Amended and Restated Flow Mortgage Loan Sale and Servicing Agreement dated February 1, 2006, hereby executed by and between EMC Mortgage Corporation, as purchaser and Bank of America, National Association, a national banking association, as seller and as servicer (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.6) Regulation AB Compliance Addendum dated February 1, 2006, by and between EMC Mortgage Corporation and Bank of America, National Association to that certain Second Amended and Restated Flow Mortgage Loan Sale and Servicing Agreement, dated February 1, 2006, by and between the Company and the (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.7) Assignment, Assumption and Recognition Agreement dated February 28, 2007, by Structured Asset Mortgage Investments II Inc. Citibank, N.A., as trustee and EMC Mortgage Corporation acknowledged and agreed to by Wells Fargo Bank, National Association, as securities administrator and master servicer (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.8) Assignment, Assumption and Recognition Agreement made and entered into as of February 28, 2007 among EMC Mortgage Corporation Citibank, N.A., as trustee Bank of America, National Association and acknowledged and agreed to by Structured Asset Mortgage Investments II Inc. and Well Fargo Bank, National Association, as master servicer (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.9) Mortgage Loan Purchase Agreement dated February 28, 2007, as amended and supplemented by any and all amendments hereto (collectively, the "Agreement"), by and between EMC Mortgage Corporation (the "Mortgage Loan Seller"), and Structured Asset Mortgage Investments II Inc. (the "purchaser") (As previously filed on on Form 8-K filed on March 16, 2007 and Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.10) Cap Contracts between Bear Stearns Financial Products Inc. ("Bear Stearns") and Structured Asset Mortgage Investments II Trust 2007-AR2 (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(31) Rule 13a-14(d)/15d-14(d) Certification.
(33) Reports on assessment of compliance with servicing criteria for asset-backed securities.
(34) Attestation reports on assessment of compliance with servicing criteria for asset-backed securities.
(35) Servicer compliance statement.
(99.1) Amended and Restated Guaranty Agreement of JPMorgan Chase & Co. effective as of March 16, 2008
(b) Not applicable.
(c) Omitted.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Structured Asset Mortgage Investments II Trust 2007-AR2 (Issuing Entity)
Wells Fargo Bank, N.A. (Master Servicer)
/s/ William Augustin IV William Augustin IV, Vice President (senior officer in charge of the servicing function of the master servicer)
Date: March 30, 2008
Exhibit Index
Exhibit No.
(4.1) Pooling and Servicing Agreement, dated February 1, 2007, among Structured Asset Mortgage Investments II Inc., as depositor, Wells Fargo Bank National Association, as master servicer and as securities administrator, EMC Mortgage Corporation and Citibank, N.A., as trustee (As previously filed on Form 8-K filed on March 16, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.1) Yield Maintenance Agreements, dated February 28, 2007, between Bear Stearns Financial Products Inc. and the Trustee on the behalf of Structured Asset Mortgage Investments II Trust 2007-AR2 (As previously filed on Form 8-K filed on March 16, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.2) Terms Agreement, dated February 28, 2007, to the Underwriting Agreement, dated February 26, 2007 between Bear Stearns & Co. and Structured Asset Mortgage Investments II Inc. (As previously filed on Form 8-K filed on March 16, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.3) Custodial Agreement dated February 28, 2007, by and among CITIBANK, N.A., as trustee, Structured Asset Mortgage Investment II Inc., as depositor, Wells Fargo Bank, National Association, as master servicer and securities administrator and Wells Fargo Bank, National Association, as custodian (As previously filed on Form 8-K filed on March 16, 2007 and Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.4) Servicing Agreement, dated February 1, 2007, between Structured Asset Mortgage Investments II Inc. and EMC Mortgage Corporation (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.5) Second Amended and Restated Flow Mortgage Loan Sale and Servicing Agreement dated February 1, 2006, hereby executed by and between EMC Mortgage Corporation, as purchaser and Bank of America, National Association, a national banking association, as seller and as servicer (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.6) Regulation AB Compliance Addendum dated February 1, 2006, by and between EMC Mortgage Corporation and Bank of America, National Association to that certain Second Amended and Restated Flow Mortgage Loan Sale and Servicing Agreement, dated February 1, 2006, by and between the Company and the (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.7) Assignment, Assumption and Recognition Agreement dated February 28, 2007, by Structured Asset Mortgage Investments II Inc. Citibank, N.A., as trustee and EMC Mortgage Corporation acknowledged and agreed to by Wells Fargo Bank, National Association, as securities administrator and master servicer (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.8) Assignment, Assumption and Recognition Agreement made and entered into as of February 28, 2007 among EMC Mortgage Corporation Citibank, N.A., as trustee Bank of America, National Association and acknowledged and agreed to by Structured Asset Mortgage Investments II Inc. and Well Fargo Bank, National Association, as master servicer (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.9) Mortgage Loan Purchase Agreement dated February 28, 2007, as amended and supplemented by any and all amendments hereto (collectively, the "Agreement"), by and between EMC Mortgage Corporation (the "Mortgage Loan Seller"), and Structured Asset Mortgage Investments II Inc. (the "purchaser") (As previously filed on on Form 8-K filed on March 16, 2007 and Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(10.10) Cap Contracts between Bear Stearns Financial Products Inc. ("Bear Stearns") and Structured Asset Mortgage Investments II Trust 2007-AR2 (As previously filed on Form 8-K/A filed on April 19, 2007 and hereby incorporated by reference into this report on Form 10-K)
(31) Rule 13a-14(d)/15d-14(d) Certification.
(33) Reports on assessment of compliance with servicing criteria for asset-backed securities.
(34) Attestation reports on assessment of compliance with servicing criteria for asset-backed securities.
(35) Servicer compliance statement.
(99.1) Amended and Restated Guaranty Agreement of JPMorgan Chase & Co. effective as of March 16, 2008