Common use of Conveyance of Home Equity Loans Original Issuance of Certificates Tax Treatment Clause in Contracts

Conveyance of Home Equity Loans Original Issuance of Certificates Tax Treatment. Section 2.01. Acknowledgment; Conveyance of Home Equity Loans; Custody of Mortgage Files. (a) The Depositor, concurrently with the execution and delivery of this Agreement, does hereby irrevocably transfer, assign, sell, set over and otherwise convey to the Trustee for the benefit of the Certificateholders without recourse (subject to Sections 2.02 and 2.04) (i) all of its right, title and interest in and to the unpaid principal balance of each Home Equity Loan and each Eligible Substitute Home Equity Loan, including all Interest Collections and Principal Collections in respect of any such Home Equity Loan received after the Cut-Off Date with respect to each Initial Home Equity Loan and after the Subsequent Cut-Off Date with respect to each Eligible Substitute Home Equity Loan pursuant to the Home Equity Loan Purchase Agreement; (ii) property which secured such Home Equity Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance policies in respect of the Home Equity Loans; (iv) all proceeds of any of the foregoing; and (v) one share of the Depositor's Preferred Stock. [In addition, on or prior to the Closing Date, the Depositor shall cause the Certificate Insurer to deliver the Certificate Insurance Policy to the Trustee.] (b) The Depositor agrees to take, or to cause to be taken, such actions and to execute such documents (including without limitation the filing of all necessary continuation statements for the UCC-1 financing statement filed in the State of Illinois and the State of Delaware, as applicable (which shall have been filed as promptly as practicable, but in no event later than 10 days following the effective date of this Agreement), describing the Home Equity Loans and naming the Depositor as seller and the Trustee as buyer, and any amendments or other filings to the UCC-1 financing statement required to reflect a change in the applicable UCC, or a change of the name or corporate structure of the Depositor, or the filing of any additional UCC-1 financing statement due to any change in the principal office of the Depositor) as are necessary to perfect and protect the Certificateholders' interests in the Trust created hereunder, including each Home Equity Loan and the proceeds thereof (other than delivering to the Trustee possession of the Mortgage Files, which possession will, subject to the terms hereof, be maintained by the Servicers on behalf of the Master Servicer as custodian and bailee for the Trustee). The parties hereto intend that the transactions set forth herein constitute a sale and not a pledge by the Depositor to the Trust of all the Depositor's right, title and interest in and to the Home Equity Loans and other Trust property as and to the extent described above. In the event the transactions set forth herein are characterized as a pledge and not a sale, the Depositor hereby grants to the Trustee a security interest in all of the Depositor's right, title and interest in, to and under the Home Equity Loans and such other Trust property, to secure all of the Depositor's obligations hereunder, and this Agreement shall constitute a security agreement under applicable law. With respect to the Home Equity Loans sold by each Seller to the Depositor, the Master Servicer shall cause such Seller to file as promptly as practicable, but in no event later than ten days following the effective date of this Agreement, in the appropriate public filing office or offices UCC-1 financing statements and continuation statements describing such Home Equity Loans and naming such Seller as seller and the Depositor as buyer, to file appropriate continuation statements thereto, to file amendments thereto in the case of a change in the applicable UCC, name change or change in corporate structure and to file appropriate additional UCC-1 financing statements, if any, if such Seller changes its jurisdiction of incorporation. (c) In connection with such transfer and assignment by the Depositor and the Master Servicer, acting through the Servicers, the Trustee and the Master Servicer hereby acknowledge that the Servicers are holding, with respect to the Home Equity Loans transferred on the Closing Date, and will hold, with respect to each Eligible Substitute Home Equity Loan, on and from the applicable Transfer Date, as custodian and bailee for the Trustee, the following documents or instruments with respect to each such Home Equity Loan (the "Related Documents"): (i) the original Mortgage Note with all intervening endorsements showing a complete chain of title from the originator of such Home Equity Loan to the Seller or a copy of such original Mortgage Note with an accompanying lost note affidavit; (ii) the original Mortgage, with evidence of recording thereon, provided that if the original Mortgage has been delivered for recording to the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located but has not yet been returned to the Seller by such recording office, the Seller may hold a copy of such original Mortgage; and (iii) originals of any amendments to the Mortgage Note or Mortgage, any modification or assumption agreements and any previous assignments of such Home Equity Loan; provided, however, that as to any Home Equity Loan, if, as evidenced by an Opinion of Counsel delivered to and in form and substance satisfactory to the Trustee, (x) an optical image or other electronic representation of the related documents specified in clauses (i) through (iii) above are enforceable in the relevant jurisdictions to the same extent as the original of such document and (y) such optical image or other representation does not impair the ability of an owner of such Home Equity Loan to transfer its interest in such Home Equity Loan, such optical image or other representation may be held by the Master Servicer, acting through the Servicers, as custodian and bailee for the Trustee, in lieu of the physical documents specified above. (d) Except as hereinafter provided, the Master Servicer, acting through the Servicers, shall be entitled to maintain possession of all of the foregoing documents and instruments, shall not be required to deliver any of them to the Trustee and shall not be required to record an assignment of Mortgage in favor of the Trustee with respect to any Home Equity Loan. In the event, however, that possession of any of such documents or instruments is required by any Person (including the Trustee) acting as successor master servicer pursuant to Section 7.04 or 8.02 in order to carry out the duties of Master Servicer hereunder, then such successor shall be entitled to request delivery, at the expense of the Master Servicer, of such documents or instruments by the Master Servicer and to retain such documents or instruments for servicing purposes; provided that the Trustee or such servicers shall maintain such documents at such offices as may be required by any regulatory body having jurisdiction over such Home Equity Loans. (e) The Master Servicer's right to maintain possession, directly or through the Servicers, of the documents enumerated above shall continue so long as (i) at least two of Moody's, Standard & Poor's and Fitch assign a long-term senior unsecuxxx xxxt rating to HFC of at least "Baa3", in the case of Moody's, "BBB", in the case of Fitch, and "BBB-", in the case of Stanxxxx & Poor's, or such lower ratings as shall be acceptable to the Rating Agencies in order to maintain their current ratings of the Class A and Class M Certificates, and (ii) each of the Servicers remains an Affiliate of HFC. At such time as either of the conditions specified in the preceding sentence is not satisfied, as promptly as practicable, but in no event more than 90 days thereafter in the case of clause (i) below and 60 days in the case of clause (ii) below, the Master Servicer shall cause each Servicer, at such Servicer's expense or, at the Master Servicer's discretion, the Master Servicer's expense, to (i) either (x) record an assignment of Mortgage in favor of the Trustee (which may be a blanket assignment if permitted by applicable law) with respect to each of the Home Equity Loans being serviced by such Servicer in the appropriate real property or other records or (y) deliver to the Trustee the assignment of such Mortgage in favor of the Trustee in form for recordation, together with an Opinion of Counsel addressed to the Trustee to the effect that recording is not required to protect the Trustee's right, title and interest in and to the related Home Equity Loan or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loan, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), and (ii) unless an Opinion of Counsel, reasonably acceptable to the Trustee and the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), is delivered to the Trustee to the effect that delivery of the Mortgage Files is not necessary to protect the Trustee's right, title and interest in and to the related Home Equity Loans or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loans, deliver the related Mortgage Files to the Trustee to be held by the Trustee in trust, upon the terms herein set forth, for the use and benefit of all present and future Certificateholders, and the Trustee shall retain possession thereof except to the extent the Master Servicer or Servicers require any Mortgage Files for normal servicing as contemplated by Section 3.08. The Master Servicer shall cause the Servicers to appoint the Trustee their attorney-in-fact to prepare, execute and record any assignments of Mortgages required under this Section 2.01 in the event that the Servicers or the Master Servicer should fail to do so on a timely basis. (f) Within 90 days following delivery, if any, of the Mortgage Files to the Trustee pursuant to the preceding subsection, the Trustee shall review each such Mortgage File to ascertain that all required documents set forth in this Section 2.01 have been executed and received and that such documents relate to the Home Equity Loans identified on the Home Equity Loan Schedule, and in so doing the Trustee may rely on the purported due execution and genuineness of any signature thereon. If within such 90-day period the Trustee finds any document constituting a part of a Mortgage File not to have been executed or received or to be unrelated to the Home Equity Loans identified in said Home Equity Loan Schedule or, if in the course of its review, the Trustee determines that such Mortgage File is otherwise defective in any material respect, the Trustee shall promptly upon the conclusion of its review notify the Depositor and the Master Servicer, and the Depositor and the Master Servicer shall have a period of 90 days after such notice within which to correct or cure any such defect; provided, however, that if such defect shall not have been corrected or cured within such 90-day period due to the failure of the related office of real property or other records to return any document constituting a part of a Mortgage File, the Depositor or the Master Servicer shall so notify the Trustee and the period during which such defect may be corrected or cured shall be extended for one additional 90-day period. (g) The Trustee shall have no responsibility for reviewing any Mortgage File except as expressly provided in this Section 2.01. In reviewing any Mortgage File pursuant to this Section 2.01, the Trustee shall have no responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form (except, if applicable, to determine if the Trustee is the assignee or endorsee), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction, whether any Person executing any document is authorized to do so or whether any signature thereon is genuine, but shall only be required to determine whether a document has been executed, that it appears to be what it purports to be and, where applicable, that it purports to be recorded. (h) The Master Servicer hereby confirms to the Trustee that on or prior to the Closing Date and on or prior to the applicable Transfer Date with respect to any Eligible Substitute Home Equity Loan, the portions of the Electronic Ledger relating to such Home Equity Loans have been or will have been clearly and unambiguously marked, and the appropriate entries have been or will have been made in its general accounting records, to indicate that such Home Equity Loans have been transferred to the Trustee and constitute part of the Trust in accordance with the terms hereof.

Conveyance of Home Equity Loans Original Issuance of Certificates Tax Treatment. Section 2.01. Acknowledgment; Conveyance of Home Equity Loans; Custody of Mortgage Files. (a) The Depositor, concurrently with the execution and delivery of this Agreement, does hereby irrevocably transfer, assign, sell, set over and otherwise convey to the Trustee for the benefit of the Certificateholders without recourse (subject to Sections 2.02 and 2.04) (i) all of its right, title and interest in and to the unpaid principal balance of each Home Equity Loan and each Eligible Substitute Home Equity Loan, including all Interest Collections and Principal Collections in respect of any such Home Equity Loan received after the Cut-Off Date with respect to each Initial Home Equity Loan and after the Subsequent Cut-Off Date with respect to each Eligible Substitute Home Equity Loan pursuant to the Home Equity Loan Purchase Agreement; (ii) property which secured such Home Equity Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance policies in respect of the Home Equity Loans; (iv) all proceeds of any of the foregoing; and (v) one share of the Depositor's Preferred Stock. [In addition, on or prior to the Closing Date, the Depositor shall cause the Certificate Insurer to deliver the Certificate Insurance Policy to the Trustee.] (b) The Depositor agrees to take, or to cause to be taken, such actions and to execute such documents (including without limitation the filing of all necessary continuation statements for the UCC-1 financing statement filed in the State of Illinois and the State of Delaware, as applicable (which shall have been filed as promptly as practicable, but in no event later than 10 days following the effective date of this Agreement), describing the Home Equity Loans and naming the Depositor as seller and the Trustee as buyer, and any amendments or other filings to the UCC-1 financing statement required to reflect a change in the applicable UCC, or a change of the name or corporate structure of the Depositor, or the filing of any additional UCC-1 financing statement due to any change in the principal office of the Depositor) as are necessary to perfect and protect the Certificateholders' interests in the Trust created hereunder, including each Home Equity Loan and the proceeds thereof (other than delivering to the Trustee possession of the Mortgage Files, which possession will, subject to the terms hereof, be maintained by the Servicers on behalf of the Master Servicer as custodian and bailee for the Trustee). The parties hereto intend that the transactions set forth herein constitute a sale and not a pledge by the Depositor to the Trust of all the Depositor's right, title and interest in and to the Home Equity Loans and other Trust property as and to the extent described above. In the event the transactions set forth herein are characterized as a pledge and not a sale, the Depositor hereby grants to the Trustee a security interest in all of the Depositor's right, title and interest in, to and under the Home Equity Loans and such other Trust property, to secure all of the Depositor's obligations hereunder, and this Agreement shall constitute a security agreement under applicable law. With respect to the Home Equity Loans sold by each Seller to the Depositor, the Master Servicer shall cause such Seller to file as promptly as practicable, but in no event later than ten days following the effective date of this Agreement, in the appropriate public filing office or offices UCC-1 financing statements and continuation statements describing such Home Equity Loans and naming such Seller as seller and the Depositor as buyer, to file appropriate continuation statements thereto, to file amendments thereto in the case of a change in the applicable UCC, name change or change in corporate structure and to file appropriate additional UCC-1 financing statements, if any, if such Seller changes its jurisdiction of incorporationprincipal office. (c) In connection with such transfer and assignment by the Depositor and the Master Servicer, acting through the Servicers, the Trustee and the Master Servicer hereby acknowledge that the Servicers are holding, with respect to the Home Equity Loans transferred on the Closing Date, and will hold, with respect to each Eligible Substitute Home Equity Loan, on and from the applicable Transfer Date, as custodian and bailee for the Trustee, the following documents or instruments with respect to each such Home Equity Loan (the "Related Documents"):Loan: (i) the original Mortgage Note with all intervening endorsements showing a complete chain of title from the originator of such Home Equity Loan to the Seller or a copy of such original Mortgage Note with an accompanying lost note affidavit; (ii) the original Mortgage, with evidence of recording thereon, provided that if the original Mortgage has been delivered for recording to the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located but has not yet been returned to the Seller by such recording office, the Seller may hold a copy of such original Mortgage; and (iii) originals of any amendments to the Mortgage Note or Mortgage, any modification or assumption agreements and any previous assignments of such Home Equity Loan; provided, however, that as to any Home Equity Loan, if, as evidenced by an Opinion of Counsel delivered to and in form and substance satisfactory to the Trustee, (x) an optical image or other electronic representation of the related documents specified in clauses (i) through (iii) above are enforceable in the relevant jurisdictions to the same extent as the original of such document and (y) such optical image or other representation does not impair the ability of an owner of such Home Equity Loan to transfer its interest in such Home Equity Loan, such optical image or other representation may be held by the Master Servicer, acting through the Servicers, as custodian and bailee for the Trustee, in lieu of the physical documents specified above. (d) Except as hereinafter provided, the Master Servicer, acting through the Servicers, shall be entitled to maintain possession of all of the foregoing documents and instruments, shall not be required to deliver any of them to the Trustee and shall not be required to record an assignment of Mortgage in favor of the Trustee with respect to any Home Equity Loan. In the event, however, that possession of any of such documents or instruments is required by any Person (including the Trustee) acting as successor master servicer pursuant to Section 7.04 or 8.02 in order to carry out the duties of Master Servicer hereunder, then such successor shall be entitled to request delivery, at the expense of the Master Servicer, of such documents or instruments by the Master Servicer and to retain such documents or instruments for servicing purposes; provided that the Trustee or such servicers shall maintain such documents at such offices as may be required by any regulatory body having jurisdiction over such Home Equity Loans. (e) The Master Servicer's right to maintain possession, directly or through the Servicers, of the documents enumerated above shall continue so long as (i) at least two of Moody's, Standard & Poor's and Fitch assign a long-term senior unsecuxxx xxxt rating to HFC of at least "Baa3", in the case of Moody's, "BBB", in the case of Fitch, and "BBB-", in the case of Stanxxxx & Poor's, or such lower ratings as shall be acceptable to the Rating Agencies in order to maintain their current ratings of the Class A and Class M Certificates, and (ii) each of the Servicers remains an Affiliate of HFC. At such time as either of the conditions specified in the preceding sentence is not satisfied, as promptly as practicable, but in no event more than 90 days thereafter in the case of clause (i) below and 60 days in the case of clause (ii) below, the Master Servicer shall cause each Servicer, at such Servicer's expense or, at the Master Servicer's discretion, the Master Servicer's expense, to (i) either (x) record an assignment of Mortgage in favor of the Trustee (which may be a blanket assignment if permitted by applicable law) with respect to each of the Home Equity Loans being serviced by such Servicer in the appropriate real property or other records or (y) deliver to the Trustee the assignment of such Mortgage in favor of the Trustee in form for recordation, together with an Opinion of Counsel addressed to the Trustee to the effect that recording is not required to protect the Trustee's right, title and interest in and to the related Home Equity Loan or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loan, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), and (ii) unless an Opinion of Counsel, reasonably acceptable to the Trustee and the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), is delivered to the Trustee to the effect that delivery of the Mortgage Files is not necessary to protect the Trustee's right, title and interest in and to the related Home Equity Loans or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loans, deliver the related Mortgage Files to the Trustee to be held by the Trustee in trust, upon the terms herein set forth, for the use and benefit of all present and future Certificateholders, and the Trustee shall retain possession thereof except to the extent the Master Servicer or Servicers require any Mortgage Files for normal servicing as contemplated by Section 3.08. The Master Servicer shall cause the Servicers to appoint the Trustee their attorney-in-fact to prepare, execute and record any assignments of Mortgages required under this Section 2.01 in the event that the Servicers or the Master Servicer should fail to do so on a timely basis. (f) Within 90 days following delivery, if any, of the Mortgage Files to the Trustee pursuant to the preceding subsection, the Trustee shall review each such Mortgage File to ascertain that all required documents set forth in this Section 2.01 have been executed and received and that such documents relate to the Home Equity Loans identified on the Home Equity Loan Schedule, and in so doing the Trustee may rely on the purported due execution and genuineness of any signature thereon. If within such 90-day period the Trustee finds any document constituting a part of a Mortgage File not to have been executed or received or to be unrelated to the Home Equity Loans identified in said Home Equity Loan Schedule or, if in the course of its review, the Trustee determines that such Mortgage File is otherwise defective in any material respect, the Trustee shall promptly upon the conclusion of its review notify the Depositor and the Master Servicer, and the Depositor and the Master Servicer shall have a period of 90 days after such notice within which to correct or cure any such defect; provided, however, that if such defect shall not have been corrected or cured within such 90-day period due to the failure of the related office of real property or other records to return any document constituting a part of a Mortgage File, the Depositor or the Master Servicer shall so notify the Trustee and the period during which such defect may be corrected or cured shall be extended for one additional 90-day period. (g) The Trustee shall have no responsibility for reviewing any Mortgage File except as expressly provided in this Section 2.01. In reviewing any Mortgage File pursuant to this Section 2.01, the Trustee shall have no responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form (except, if applicable, to determine if the Trustee is the assignee or endorsee), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction, whether any Person executing any document is authorized to do so or whether any signature thereon is genuine, but shall only be required to determine whether a document has been executed, that it appears to be what it purports to be and, where applicable, that it purports to be recorded. (h) The Master Servicer hereby confirms to the Trustee that on or prior to the Closing Date and on or prior to the applicable Transfer Date with respect to any Eligible Substitute Home Equity Loan, the portions of the Electronic Ledger relating to such Home Equity Loans have been or will have been clearly and unambiguously marked, and the appropriate entries have been or will have been made in its general accounting records, to indicate that such Home Equity Loans have been transferred to the Trustee and constitute part of the Trust in accordance with the terms hereof.

Conveyance of Home Equity Loans Original Issuance of Certificates Tax Treatment. Section 2.01. Acknowledgment; Conveyance of Home Equity Loans; Custody of Mortgage Files. (a) The Depositor, concurrently with the execution and delivery of this Agreement, does hereby irrevocably transfer, assign, sell, set over and otherwise convey to the Trustee for the benefit of the Certificateholders without recourse (subject to Sections 2.02 and 2.04) (i) all of its right, title and interest in and to the unpaid principal balance of each Home Equity Loan and each Eligible Substitute Home Equity Loan, including all Interest Collections and Principal Collections in respect of any such Home Equity Loan received after the Cut-Off Date with respect to each Initial Home Equity Loan and after the Subsequent Cut-Off Date with respect to each Eligible Substitute Home Equity Loan pursuant to the Home Equity Loan Purchase Agreement; (ii) property which secured such Home Equity Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance policies in respect of the Home Equity Loans; (iv) all proceeds of any of the foregoing; and (v) one share of the Depositor's Preferred Stock. [In addition, on or prior to the Closing Date, the Depositor shall cause the Certificate Insurer to deliver the Certificate Insurance Policy to the Trustee.] (b) The Depositor agrees to take, or to cause to be taken, such actions and to execute such documents (including without limitation the filing of all necessary continuation statements for the UCC-1 financing statement filed in the State of Illinois and the State of Delaware, as applicable (which shall have been filed as promptly as practicable, but in no event later than 10 days following the effective date of this Agreement), describing the Home Equity Loans and naming the Depositor as seller and the Trustee as buyer, and any amendments or other filings to the UCC-1 financing statement required to reflect a change in the applicable UCC, or a change of the name or corporate structure of the Depositor, or the filing of any additional UCC-1 financing statement due to any change in the principal office of the Depositor) as are necessary to perfect and protect the Certificateholders' interests in the Trust created hereunder, including each Home Equity Loan and the proceeds thereof (other than delivering to the Trustee possession of the Mortgage Files, which possession will, subject to the terms hereof, be maintained by the Servicers on behalf of the Master Servicer as custodian and bailee for the Trustee). The parties hereto intend that the transactions set forth herein constitute a sale and not a pledge by the Depositor to the Trust of all the Depositor's right, title and interest in and to the Home Equity Loans and other Trust property as and to the extent described above. In the event the transactions set forth herein are characterized as a pledge and not a sale, the Depositor hereby grants to the Trustee a security interest in all of the Depositor's right, title and interest in, to and under the Home Equity Loans and such other Trust property, to secure all of the Depositor's obligations hereunder, and this Agreement shall constitute a security agreement under applicable law. With respect to the Home Equity Loans sold by each Seller to the Depositor, the Master Servicer shall cause such Seller to file as promptly as practicable, but in no event later than ten days following the effective date of this Agreement, in the appropriate public filing office or offices UCC-1 financing statements and continuation statements describing such Home Equity Loans and naming such Seller as seller and the Depositor as buyer, to file appropriate continuation statements thereto, to file amendments thereto in the case of a change in the applicable UCC, name change or change in corporate structure and to file appropriate additional UCC-1 financing statements, if any, if such Seller changes its jurisdiction of incorporation. (c) In connection with such transfer and assignment by the Depositor and the Master Servicer, acting through the Servicers, the Trustee and the Master Servicer hereby acknowledge that the Servicers are holding, with respect to the Home Equity Loans transferred on the Closing Date, and will hold, with respect to each Eligible Substitute Home Equity Loan, on and from the applicable Transfer Date, as custodian and bailee for the Trustee, the following documents or instruments with respect to each such Home Equity Loan (the "Related Documents"):Loan: (i) the original Mortgage Note with all intervening endorsements showing a complete chain of title from the originator of such Home Equity Loan to the Seller or a copy of such original Mortgage Note with an accompanying lost note affidavit; (ii) the original Mortgage, with evidence of recording thereon, provided that if the original Mortgage has been delivered for recording to the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located but has not yet been returned to the Seller by such recording office, the Seller may hold a copy of such original Mortgage; and (iii) originals of any amendments to the Mortgage Note or Mortgage, any modification or assumption agreements and any previous assignments of such Home Equity Loan; provided, however, that as to any Home Equity Loan, if, as evidenced by an Opinion of Counsel delivered to and in form and substance satisfactory to the Trustee, (x) an optical image or other electronic representation of the related documents specified in clauses (i) through (iii) above are enforceable in the relevant jurisdictions to the same extent as the original of such document and (y) such optical image or other representation does not impair the ability of an owner of such Home Equity Loan to transfer its interest in such Home Equity Loan, such optical image or other representation may be held by the Master Servicer, acting through the Servicers, as custodian and bailee for the Trustee, in lieu of the physical documents specified above. (d) Except as hereinafter provided, the Master Servicer, acting through the Servicers, shall be entitled to maintain possession of all of the foregoing documents and instruments, shall not be required to deliver any of them to the Trustee and shall not be required to record an assignment of Mortgage in favor of the Trustee with respect to any Home Equity Loan. In the event, however, that possession of any of such documents or instruments is required by any Person (including the Trustee) acting as successor master servicer pursuant to Section 7.04 or 8.02 in order to carry out the duties of Master Servicer hereunder, then such successor shall be entitled to request delivery, at the expense of the Master Servicer, of such documents or instruments by the Master Servicer and to retain such documents or instruments for servicing purposes; provided that the Trustee or such servicers shall maintain such documents at such offices as may be required by any regulatory body having jurisdiction over such Home Equity Loans. (e) The Master Servicer's right to maintain possession, directly or through the Servicers, of the documents enumerated above shall continue so long as (i) at least two of Moody's, Standard & Poor's and Fitch assign a long-term senior unsecuxxx xxxt rating unsecured xxxx xating to HFC of at least "Baa3", in the case of Moody's, "BBB", in the case of Fitch, and "BBB-", in the case of Stanxxxx Standarx & PoorXxxr's, or such lower ratings as shall be acceptable to the Rating Agencies in order to maintain their current ratings of the Class A and Class M Certificates, and (ii) each of the Servicers remains an Affiliate of HFC. At such time as either of the conditions specified in the preceding sentence is not satisfied, as promptly as practicable, but in no event more than 90 days thereafter in the case of clause (i) below and 60 days in the case of clause (ii) below, the Master Servicer shall cause each Servicer, at such Servicer's expense or, at the Master Servicer's discretion, the Master Servicer's expense, to (i) either (x) record an assignment of Mortgage in favor of the Trustee (which may be a blanket assignment if permitted by applicable law) with respect to each of the Home Equity Loans being serviced by such Servicer in the appropriate real property or other records or (y) deliver to the Trustee the assignment of such Mortgage in favor of the Trustee in form for recordation, together with an Opinion of Counsel addressed to the Trustee to the effect that recording is not required to protect the Trustee's right, title and interest in and to the related Home Equity Loan or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loan, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), and (ii) unless an Opinion of Counsel, reasonably acceptable to the Trustee and the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), is delivered to the Trustee to the effect that delivery of the Mortgage Files is not necessary to protect the Trustee's right, title and interest in and to the related Home Equity Loans or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loans, deliver the related Mortgage Files to the Trustee to be held by the Trustee in trust, upon the terms herein set forth, for the use and benefit of all present and future Certificateholders, and the Trustee shall retain possession thereof except to the extent the Master Servicer or Servicers require any Mortgage Files for normal servicing as contemplated by Section 3.08. The Master Servicer shall cause the Servicers to appoint the Trustee their attorney-in-fact to prepare, execute and record any assignments of Mortgages required under this Section 2.01 in the event that the Servicers or the Master Servicer should fail to do so on a timely basis. (f) Within 90 days following delivery, if any, of the Mortgage Files to the Trustee pursuant to the preceding subsection, the Trustee shall review each such Mortgage File to ascertain that all required documents set forth in this Section 2.01 have been executed and received and that such documents relate to the Home Equity Loans identified on the Home Equity Loan Schedule, and in so doing the Trustee may rely on the purported due execution and genuineness of any signature thereon. If within such 90-day period the Trustee finds any document constituting a part of a Mortgage File not to have been executed or received or to be unrelated to the Home Equity Loans identified in said Home Equity Loan Schedule or, if in the course of its review, the Trustee determines that such Mortgage File is otherwise defective in any material respect, the Trustee shall promptly upon the conclusion of its review notify the Depositor and the Master Servicer, and the Depositor and the Master Servicer shall have a period of 90 days after such notice within which to correct or cure any such defect; provided, however, that if such defect shall not have been corrected or cured within such 90-day period due to the failure of the related office of real property or other records to return any document constituting a part of a Mortgage File, the Depositor or the Master Servicer shall so notify the Trustee and the period during which such defect may be corrected or cured shall be extended for one additional 90-day period. (g) The Trustee shall have no responsibility for reviewing any Mortgage File except as expressly provided in this Section 2.01. In reviewing any Mortgage File pursuant to this Section 2.01, the Trustee shall have no responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form (except, if applicable, to determine if the Trustee is the assignee or endorsee), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction, whether any Person executing any document is authorized to do so or whether any signature thereon is genuine, but shall only be required to determine whether a document has been executed, that it appears to be what it purports to be and, where applicable, that it purports to be recorded. (h) The Master Servicer hereby confirms to the Trustee that on or prior to the Closing Date and on or prior to the applicable Transfer Date with respect to any Eligible Substitute Home Equity Loan, the portions of the Electronic Ledger relating to such Home Equity Loans have been or will have been clearly and unambiguously marked, and the appropriate entries have been or will have been made in its general accounting records, to indicate that such Home Equity Loans have been transferred to the Trustee and constitute part of the Trust in accordance with the terms hereof.

Conveyance of Home Equity Loans Original Issuance of Certificates Tax Treatment. Section 2.01. Acknowledgment; Conveyance of Home Equity Loans; Custody of Mortgage Files. (a) The Depositor, concurrently with the execution and delivery of this Agreement, does hereby irrevocably transfer, assign, sell, set over and otherwise convey to the Trustee for the benefit of the Certificateholders without recourse (subject to Sections 2.02 and 2.04) (i) all of its right, title and interest in and to the unpaid principal balance of each Home Equity Loan and each Eligible Substitute Home Equity Loan, including its Cut-Off Date Principal Balance, and all Interest Collections and Principal Collections collections in respect of any such Home Equity Loan thereof received on or after the Cut-Off Date with respect to each Initial Home Equity Loan and after the Subsequent Cut-Off Date with respect to each Eligible Substitute Home Equity Loan pursuant to the Home Equity Loan Purchase AgreementDate; (ii) property which secured such Home Equity Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; and (iii) its interest in any insurance policies in respect of the Home Equity Loans; (iv) all proceeds of any of the foregoing; and (v) one share of the Depositor's Preferred Stock. [In addition, on or prior to the Closing Date, the Depositor shall cause the Certificate Insurer to deliver the Certificate Insurance Policy to the Trustee.] (b) The Depositor agrees to take, or to cause to be taken, such actions and to execute such documents (including without limitation the filing of all necessary continuation statements for the UCC-1 financing statement filed in the State of Illinois and the State of Delaware, as applicable (which shall have been filed as promptly as practicable, but in no event later than 10 15 days following the effective date of this Agreement), Closing Date) describing the Home Equity Loans and naming the Depositor as seller debtor and the Trustee as buyersecured party, and any amendments or other filings to the UCC-1 financing statement required to reflect a change in the applicable UCC, or a change UCC of the name or corporate structure of the Depositor, or the filing of any additional UCC-1 financing statement due to any change in the principal office of the Depositor) as are necessary to perfect and protect the Certificateholders' interests in the Trust created hereunder, including each Home Equity Loan and the proceeds thereof (other than delivering to the Trustee possession of the Mortgage Files, which possession will, subject to the terms hereof, be maintained by the Servicers on behalf of the Master Servicer as custodian and bailee for the Trustee). The parties hereto intend that the transactions set forth herein constitute a sale and not a pledge by the Depositor to the Trust of all the Depositor's right, title and interest in and to the Home Equity Loans and other Trust property as and to the extent described above. In the event the transactions set forth herein are characterized as a pledge and not a sale, the Depositor hereby grants to the Trustee a security interest in all of the Depositor's right, title and interest in, to and under the Home Equity Loans and such other Trust property, to secure all of the Depositor's obligations hereunder, and this Agreement shall constitute a security agreement under applicable law. With respect to the Home Equity Loans sold by each Seller to the Depositor, the Master Servicer shall cause such Seller to file as promptly as practicable, but in no event later than ten 15 days following the effective date of this AgreementClosing Date, in the appropriate public filing office or offices UCC-1 financing statements and continuation statements describing such Home Equity Loans and naming such Seller as seller and the Depositor as buyer, to file appropriate continuation statements thereto, to file amendments thereto in the case of a change in the applicable UCC, name change or change in corporate structure and to file appropriate additional UCC-1 financing statements, if any, if such Seller changes its jurisdiction of incorporationprincipal office. (c) In connection with such transfer and assignment by the Depositor and Depositor, the Master Servicer, acting through the Servicers, the Trustee and the Master Servicer acknowledges hereby acknowledge that the Servicers are it is holding, with respect to the Home Equity Loans transferred on the Closing Date, and will hold, with respect to each Eligible Substitute Home Equity Loan, on and from the applicable Transfer Date, as custodian and bailee for the Trustee, Trustee the following documents or instruments with respect to each such Home Equity Loan (the "Related Documents"):Loan: (i) the original Mortgage Note Note, endorsed in blank, with all intervening endorsements showing a complete chain of title from the originator of such Home Equity Loan to the Seller or a copy of such original Mortgage Note with an accompanying lost note affidavit;; 25 (ii) the original Mortgage, with evidence of recording thereon, provided that if the original Mortgage has been delivered for recording to the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located but has not yet been returned to the Seller by such recording office, the Seller may hold a copy of such original Mortgage; and (iii) originals of any amendments to the Mortgage Note or Mortgage, any modification or assumption agreements and any previous assignments of such Home Equity Loan; provided, however, that as to any Home Equity Loan, if, as evidenced by an Opinion of Counsel delivered to and in form and substance satisfactory to the Trustee, (x) an optical image or other electronic representation of the related documents specified in clauses (i) through (iii) above are enforceable in the relevant jurisdictions to the same extent as the original of such document and (y) such optical image or other representation does not impair the ability of an owner of such Home Equity Loan to transfer its interest in such Home Equity Loan, such optical image or other representation may be held by the Master Servicer, acting through the Servicers, as custodian and bailee for the Trustee, Trustee in lieu of the physical documents specified above. (d) Except as hereinafter provided, the Master Servicer, acting through the Servicers, shall be entitled to maintain possession of all of the foregoing documents and instruments, instruments and shall not be required to deliver any of them to the Trustee and shall not be required to record an assignment of Mortgage in favor of the Trustee with respect to any Home Equity LoanTrustee. In the event, however, that possession of any of such documents or instruments is required by any Person (including the Trustee) acting as successor master servicer pursuant to [Section 7.04 or 8.02 8.02] in order to carry out the duties of Master Servicer hereunder, then such successor shall be entitled to request delivery, at the expense of the Master Servicer, of such documents or instruments by the Master Servicer and to retain such documents or instruments for servicing purposes; provided that the Trustee or such servicers shall maintain such documents at such offices as may be required by any regulatory body having jurisdiction over such Home Equity Loans. (e) The Master Servicer's right to maintain possession, directly or through the Servicers, of the documents enumerated above shall continue so long as (i) at least two of Moody's, Standard & Poor's and Fitch assign a the long-term senior unsecuxxx xxxt rating to unsecured debt of HFC is assigned ratings of at least "Baa3", in the case of Moody's, "BBB", in the case of Fitch, A" by Fitch and "BBB-"A-3" by Moodx'x, in the case of Stanxxxx & Poor's, or xx such lower ratings as shall be acceptable to the Rating Agencies in order to maintain their current ratings of the Class A and Class M Certificates, and (ii) each of the Servicers remains an Affiliate of HFC. At such time as either of the conditions specified in the preceding sentence is not satisfied, as promptly as practicable, but in no event more than 90 days thereafter in the case of clause (i) below and 60 days in the case of clause (ii) below, the Master Servicer shall cause each Servicer, at such Servicer's expense or, at the Master Servicer's discretion, the Master Servicer's expense, to (i) either (x) record an assignment of Mortgage in favor of the Trustee (which may be a blanket assignment if permitted by applicable law) with respect to each of the Home Equity Loans being serviced by such Servicer in the appropriate real property or other records or (y) deliver to the Trustee the assignment of such Mortgage in favor of the Trustee in form for recordation, together with an Opinion of Counsel addressed to the Trustee to the effect that recording is not required to protect the Trustee's right, title and interest in and to the related Home Equity Loan or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loan, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), and (ii) unless an Opinion of Counsel, reasonably acceptable to the Trustee and the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), is delivered to the Trustee to the effect that delivery of the Mortgage Files is not necessary to protect the Trustee's right, title and interest in and to the related Home Equity Loans or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loans, deliver the related Mortgage Files to the Trustee to be held by the Trustee in trust, upon the terms herein set forth, for the use and benefit of all present and future Certificateholders, and the Trustee shall retain possession thereof except to the extent the Master Servicer or Servicers require any Mortgage Files for normal servicing as contemplated by [Section 3.083.07]. The Master Servicer shall cause the Servicers to appoint the Trustee their attorney-in-fact to prepare, execute and record any assignments of Mortgages required under this Section 2.01 in the event that the Servicers or the Master Servicer should fail to do so on a timely basis. (f) Within 90 days following delivery, if any, of the Mortgage Files to the Trustee pursuant to the preceding subsection, the Trustee shall review each such Mortgage File to ascertain that all required documents set forth in this Section 2.01 have been executed and received and that such documents relate to the Home Equity Loans identified on the Home Equity Loan Schedule, and in so doing the Trustee may rely on the purported due execution and genuineness of any signature thereon. If within such 90-day period the Trustee finds any document constituting a part of a Mortgage File not to have been executed or received or to be unrelated to the Home Equity Loans identified in said Home Equity Loan Schedule or, if in the course of its review, the Trustee determines that such Mortgage File is otherwise defective in any material respect, the Trustee shall promptly upon the conclusion of its review notify the Depositor and the Master Servicer, and the Depositor and the Master Servicer shall have a period of 90 days after such notice within which to correct or cure any such defect; provided, however, that if such defect shall not have been corrected or cured within such 90-day period due to the failure of the related office of real property or other records to return any document constituting a part of a Mortgage File, the Depositor or the Master Servicer shall so notify the Trustee and the period during which such defect may be corrected or cured shall be extended for one additional 90-day period. (g) The Trustee shall have no responsibility for reviewing any Mortgage File except as expressly provided in this Section 2.01. In reviewing any Mortgage File pursuant to this Section 2.01, the Trustee shall have no responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form (except, if applicable, to determine if the Trustee is the assignee or endorsee), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction, whether any Person executing any document is authorized to do so or whether any signature thereon is genuine, but shall only be required to determine whether a document has been executed, that it appears to be what it purports to be and, where applicable, that it purports to be recorded. (h) The Master Servicer hereby confirms to the Trustee that on or prior to the Closing Date and on or prior to the applicable Transfer Date with respect to any Eligible Substitute Home Equity Loan, the portions of the Electronic Ledger relating to such Home Equity Loans have been or will have been clearly and unambiguously marked, and the appropriate entries have been or will have been made in its general accounting records, to indicate that such Home Equity Loans have been transferred to the Trustee and constitute part of the Trust in accordance with the terms hereof.

Conveyance of Home Equity Loans Original Issuance of Certificates Tax Treatment. Section 2.01. Acknowledgment; Conveyance of Home Equity Loans; Custody of Mortgage Files. (a) The Depositor, concurrently with the execution and delivery of this Agreement, does hereby irrevocably transfer, assign, sell, set over and otherwise convey to the Trustee for the benefit of the Certificateholders without recourse (subject to Sections 2.02 and 2.04) (i) all of its right, title and interest in and to the unpaid principal balance of each Home Equity Loan and each Eligible Substitute Home Equity Loan, including all Interest Collections and Principal Collections in respect of any such Home Equity Loan received after the Cut-Off Date with respect to each Initial Home Equity Loan and after the Subsequent Cut-Off Date with respect to each Eligible Substitute Home Equity Loan pursuant to the Home Equity Loan Purchase Agreement; (ii) property which secured such Home Equity Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance policies in respect of the Home Equity Loans; (iv) all proceeds of any of the foregoing; and (v) one share of the Depositor's Preferred Stock. [In addition, on or prior to the Closing Date, the Depositor shall cause the Certificate Insurer to deliver the Certificate Insurance Policy to the Trustee.] (b) The Depositor agrees to take, or to cause to be taken, such actions and to execute such documents (including without limitation the filing of all necessary continuation statements for the UCC-1 financing statement filed in the State of Illinois and the State of Delaware, as applicable (which shall have been filed as promptly as practicable, but in no event later than 10 15 days following the effective date of this AgreementClosing Date), describing the Home Equity Loans and naming the Depositor as seller and the Trustee as buyer, and any amendments or other filings to the UCC-1 financing statement required to reflect a change in the applicable UCC, or a change of the name or corporate structure of the Depositor, or the filing of any additional UCC-1 financing statement due to any change in the principal office of the Depositor) as are necessary to perfect and protect the Certificateholders' interests in the Trust created hereunder, including each Home Equity Loan and the proceeds thereof (other than delivering to the Trustee possession of the Mortgage Files, which possession will, subject to the terms hereof, be maintained by the Servicers on behalf of the Master Servicer as custodian and bailee for the Trustee). The parties hereto intend that the transactions set forth herein constitute a sale and not a pledge by the Depositor to the Trust of all the Depositor's right, title and interest in and to the Home Equity Loans and other Trust property as and to the extent described above. In the event the transactions set forth herein are characterized as a pledge and not a sale, the Depositor hereby grants to the Trustee a security interest in all of the Depositor's right, title and interest in, to and under the Home Equity Loans and such other Trust property, to secure all of the Depositor's obligations hereunder, and this Agreement shall constitute a security agreement under applicable law. With respect to the Home Equity Loans sold by each Seller to the Depositor, the Master Servicer shall cause such Seller to file as promptly as practicable, but in no event later than ten 15 days following the effective date of this AgreementClosing Date, in the appropriate public filing office or offices UCC-1 financing statements and continuation statements describing such Home Equity Loans and naming such Seller as seller and the Depositor as buyer, to file appropriate continuation statements thereto, to file amendments thereto in the case of a change in the applicable UCC, name change or change in corporate structure and to file appropriate additional UCC-1 financing statements, if any, if such Seller changes its jurisdiction of incorporationprincipal office. (c) In connection with such transfer and assignment by the Depositor and the Master Servicer, acting through the Servicers, the Trustee and the Master Servicer hereby acknowledge that the Servicers are holding, with respect to the Home Equity Loans transferred on the Closing Date, and will hold, with respect to each Eligible Substitute Home Equity Loan, on and from the applicable Transfer Date, as custodian and bailee for the Trustee, the following documents or instruments with respect to each such Home Equity Loan (the "Related Documents"):Loan: (i) the original Mortgage Note Note, endorsed in blank, with all intervening endorsements showing a complete chain of title from the originator of such Home Equity Loan to the Seller or a copy of such original Mortgage Note with an accompanying lost note affidavit; (ii) the original Mortgage, with evidence of recording thereon, provided that if the original Mortgage has been delivered for recording to the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located but has not yet been returned to the Seller by such recording office, the Seller may hold a copy of such original Mortgage; and (iii) originals of any amendments to the Mortgage Note or Mortgage, any modification or assumption agreements and any previous assignments of such Home Equity Loan; provided, however, that as to any Home Equity Loan, if, as evidenced by an Opinion of Counsel delivered to and in form and substance satisfactory to the Trustee, (x) an optical image or other electronic representation of the related documents specified in clauses (i) through (iii) above are enforceable in the relevant jurisdictions to the same extent as the original of such document and (y) such optical image or other representation does not impair the ability of an owner of such Home Equity Loan to transfer its interest in such Home Equity Loan, such optical image or other representation may be held by the Master Servicer, acting through the Servicers, as custodian and bailee for the Trustee, in lieu of the physical documents specified above. (d) Except as hereinafter provided, the Master Servicer, acting through the Servicers, shall be entitled to maintain possession of all of the foregoing documents and instruments, shall not be required to deliver any of them to the Trustee and shall not be required to record an assignment of Mortgage in favor of the Trustee with respect to any Home Equity Loan. In the event, however, that possession of any of such documents or instruments is required by any Person (including the Trustee) acting as successor master servicer pursuant to Section 7.04 or 8.02 in order to carry out the duties of Master Servicer hereunder, then such successor shall be entitled to request delivery, at the expense of the Master Servicer, of such documents or instruments by the Master Servicer and to retain such documents or instruments for servicing purposes; provided that the Trustee or such servicers shall maintain such documents at such offices as may be required by any regulatory body having jurisdiction over such Home Equity Loans. (e) The Master Servicer's right to maintain possession, directly or through the Servicers, of the documents enumerated above shall continue so long as (i) at least two of Moody's, Standard & Poor's and Fitch assign a the long-term senior unsecuxxx xxxt rating to unsecured debt of HFC is assigned ratings of at least "Baa3", in the case of Moody's, "BBB", in the case of Fitch, A" by Fitch and "BBB-"A3" by Moodx'x, in the case of Stanxxxx & Poor's, or xx such lower ratings as shall be acceptable to the Rating Agencies in order to maintain their current ratings of the Class A and Class M Certificates, and (ii) each of the Servicers remains an Affiliate of HFC. At such time as either of the conditions specified in the preceding sentence is not satisfied, as promptly as practicable, but in no event more than 90 days thereafter in the case of clause (i) below and 60 days in the case of clause (ii) below, the Master Servicer shall cause each Servicer, at such Servicer's expense or, at the Master Servicer's discretion, the Master Servicer's expense, to (i) either (x) record an assignment of Mortgage in favor of the Trustee (which may be a blanket assignment if permitted by applicable law) with respect to each of the Home Equity Loans being serviced by such Servicer in the appropriate real property or other records or (y) deliver to the Trustee the assignment of such Mortgage in favor of the Trustee in form for recordation, together with an Opinion of Counsel addressed to the Trustee to the effect that recording is not required to protect the Trustee's right, title and interest in and to the related Home Equity Loan or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loan, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), and (ii) unless an Opinion of Counsel, reasonably acceptable to the Trustee and the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), is delivered to the Trustee to the effect that delivery of the Mortgage Files is not necessary to protect the Trustee's right, title and interest in and to the related Home Equity Loans or to perfect a first priority security interest in favor of the Trustee in the related Home Equity Loans, deliver the related Mortgage Files to the Trustee to be held by the Trustee in trust, upon the terms herein set forth, for the use and benefit of all present and future Certificateholders, and the Trustee shall retain possession thereof except to the extent the Master Servicer or Servicers require any Mortgage Files for normal servicing as contemplated by Section 3.08. The Master Servicer shall cause the Servicers to appoint the Trustee their attorney-in-attorney- in- fact to prepare, execute and record any assignments of Mortgages required under this Section 2.01 in the event that the Servicers or the Master Servicer should fail to do so on a timely basis. (f) Within 90 days following delivery, if any, of the Mortgage Files to the Trustee pursuant to the preceding subsection, the Trustee shall review each such Mortgage File to ascertain that all required documents set forth in this Section 2.01 have been executed and received and that such documents relate to the Home Equity Loans identified on the Home Equity Loan Schedule, and in so doing the Trustee may rely on the purported due execution and genuineness of any signature thereon. If within such 90-day period the Trustee finds any document constituting a part of a Mortgage File not to have been executed or received or to be unrelated to the Home Equity Loans identified in said Home Equity Loan Schedule or, if in the course of its review, the Trustee determines that such Mortgage File is otherwise defective in any material respect, the Trustee shall promptly upon the conclusion of its review notify the Depositor and the Master Servicer, and the Depositor and the Master Servicer shall have a period of 90 days after such notice within which to correct or cure any such defect; provided, however, that if such defect shall not have been corrected or cured within such 90-day period due to the failure of the related office of real property or other records to return any document constituting a part of a Mortgage File, the Depositor or the Master Servicer shall so notify the Trustee and the period during which such defect may be corrected or cured shall be extended for one additional 90-day period. (g) The Trustee shall have no responsibility for reviewing any Mortgage File except as expressly provided in this Section 2.01. In reviewing any Mortgage File pursuant to this Section 2.01, the Trustee shall have no responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form (except, if applicable, to determine if the Trustee is the assignee or endorsee), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction, whether any Person executing any document is authorized to do so or whether any signature thereon is genuine, but shall only be required to determine whether a document has been executed, that it appears to be what it purports to be and, where applicable, that it purports to be recorded. (h) The Master Servicer hereby confirms to the Trustee that on or prior to the Closing Date and on or prior to the applicable Transfer Date with respect to any Eligible Substitute Home Equity Loan, the portions of the Electronic Ledger relating to such Home Equity Loans have been or will have been clearly and unambiguously marked, and the appropriate entries have been or will have been made in its general accounting records, to indicate that such Home Equity Loans have been transferred to the Trustee and constitute part of the Trust in accordance with the terms hereof.

Conveyance of Home Equity Loans Original Issuance of Certificates Tax Treatment. Section 2.01. Acknowledgment; Conveyance of Home Equity Loans; Custody of Mortgage Files. (a) The Depositor, concurrently with the execution and delivery of this Agreement, does hereby irrevocably transfer, assign, sell, set over and otherwise convey to the Trustee Trustee, on behalf of the Trust, for the benefit of the Certificateholders without recourse (subject to Sections 2.02 and 2.04) (i) all of its right, title and interest in and to the unpaid principal balance of each Initial Home Equity Loan and each Eligible Substitute Home Equity Loan, including all Interest Collections and Principal Collections in respect of any such Home Equity Loan received after the Cut-Off Date with respect to each Initial Home Equity Loan and after the Subsequent Cut-Off Date with respect to each Eligible Substitute Home Equity Loan pursuant to the Home Equity Loan Purchase Agreement; (ii) property which secured such Home Equity Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance policies in respect of the Home Equity LoansLoans (including any Insurance Proceeds); (iv) all proceeds of any of the foregoing; and (v) one share of the Depositor's ’s Preferred Stock. [In addition, on or prior The parties hereto acknowledge and agree that it is the policy and intent of the Trust to only acquire Home Equity Loans consistent with the Closing Date, the Depositor shall cause the Certificate Insurer to deliver the Certificate Insurance Policy to the Trusteeterms set forth in Section 2.04(b) of this Agreement.] (b) The Depositor agrees to take, or to cause to be taken, such actions and to execute such documents (including without limitation the filing of all necessary continuation statements for the UCC-1 financing statement filed in the State of Illinois and the State of Delaware, as applicable Delaware (which shall have been filed as promptly as practicable, but in no event later than 10 days following the effective date of this Agreement), describing the Home Equity Loans and naming the Depositor as seller and the Trustee Trustee, on behalf of the Trust, as buyer, and any amendments or other filings to the UCC-1 financing statement required to reflect a change in the applicable UCC, UCC or a change of the name or corporate structure of the Depositor, or the filing of any additional UCC-1 financing statement due to any change in the principal office of the Depositor) as are necessary to perfect and protect the Certificateholders' ’ interests in the Trust created hereunder, including each Home Equity Loan and the proceeds thereof (other than delivering to the Trustee possession of the Mortgage Files, which possession will, subject to the terms hereof, be maintained by the Servicers Subservicers on behalf of the Master Servicer as custodian and bailee for the Trustee). The parties hereto intend that the transactions set forth herein constitute a sale and not a pledge by the Depositor to the Trust Trustee, on behalf of the Trust, of all the Depositor's ’s right, title and interest in and to the Home Equity Loans and other Trust property as and to the extent described above. In the event the transactions set forth herein are characterized as a pledge and not a sale, the Depositor hereby grants to the Trustee Trustee, on behalf of the Trust, a security interest in all of the Depositor's ’s right, title and interest in, to and under the Home Equity Loans and such other Trust property, to secure all of the Depositor's ’s obligations hereunder, and this Agreement shall constitute a security agreement under applicable law. With respect to the Home Equity Loans sold by each Seller to the Depositor, the Master Servicer shall cause such Seller to file as promptly as practicable, but in no event later than ten days following the effective date of this Agreement, in the appropriate public filing office or offices UCC-1 financing statements and continuation statements describing such Home Equity Loans and naming such Seller as seller and the Depositor as buyer, to file appropriate continuation statements thereto, to file amendments thereto in the case of a change in the applicable UCC, name change or change in corporate structure and to file appropriate additional UCC-1 financing statements, if any, if such Seller changes its jurisdiction of incorporation. (c) In connection with such transfer and assignment by the Depositor and the Master Servicer, acting through the ServicersSubservicers, the Trustee and the Master Servicer hereby acknowledge that the Servicers Subservicers are holding, with respect to the Initial Home Equity Loans transferred on the Closing DateLoans, and will hold, with respect to each Eligible Substitute Home Equity Loan, on and from the applicable Transfer Date, as custodian and bailee for the Trustee, the following documents or instruments with respect to each such Home Equity Loan (the "“Related Documents"”): (i) the original Mortgage Note with all intervening endorsements showing a complete chain of title from the originator of such Home Equity Loan to the Seller or a copy of such original Mortgage Note with an accompanying lost note affidavit; (ii) the original Mortgage, with evidence of recording thereon, provided that if the original Mortgage has been delivered for recording to the appropriate public recording office of the jurisdiction in which the Mortgaged Property is located but has not yet been returned to the Seller by such recording office, the Seller may hold a copy of such original Mortgage; and; (iii) originals of any amendments to the Mortgage Note or Mortgage, any modification or assumption agreements and any previous assignments of such Home Equity Loan; and (iv) for each Mortgage Loan registered on the MERS® System, the original assignment into the name of MERS® including the related MIN of the Mortgage Loan; provided, however, that as to any Home Equity Loan, if, as evidenced by an Opinion of Counsel delivered to and in form and substance reasonably satisfactory to the Trustee, (x) an optical image or other electronic representation of the related documents specified in clauses (i) through (iiiiv) above are is enforceable in the relevant jurisdictions to the same extent as the original of such document and (y) such optical image or other representation does not impair the ability of an owner of such Home Equity Loan to transfer its interest in such Home Equity Loan, such optical image or other representation may be held by the Master Servicer, acting through the ServicersSubservicers, as custodian and bailee for the Trustee, in lieu of the physical documents specified above. (d) Except as hereinafter provided, the Master Servicer, acting through the ServicersSubservicers, shall be entitled to maintain possession of all of the foregoing documents and instruments, shall not be required to deliver any of them to the Trustee and shall not be required to record an assignment of Mortgage in favor of the Trustee Trustee, on behalf of the Trust, with respect to any Home Equity Loan. In the event, however, that possession of any of such documents or instruments is required by any Person (including the Trustee) acting as successor master servicer pursuant to Section 7.04 6.04 or 8.02 7.02 in order to carry out the duties of Master Servicer hereunder, then such successor shall be entitled to request delivery, at the expense of the Master Servicer, of such documents or instruments by the Master Servicer and to retain such documents or instruments for servicing purposes; provided that the Trustee or such servicers shall maintain such documents at such offices as may be required by any regulatory body having jurisdiction over such Home Equity Loans. (e) The Master Servicer's ’s right to maintain possession, directly or through the Servicerseach Subservicer, of the documents enumerated above related Mortgage Files shall continue so long as (i) at least two of Moody'sXxxxx’x, Standard & Poor's ’s and Fitch assign a long-term senior unsecuxxx xxxt unsecured debt rating to HFC HSBC Finance of at least "“Baa3"”, in the case of Moody'sXxxxx’x, "“BBB"”, in the case of Fitch, and "“BBB-"”, in the case of Stanxxxx Standard & Poor's’s, or such lower ratings as shall be rating acceptable to the Rating Agencies in order to maintain their current ratings of the Class A and Class M Certificatesassigned by Xxxxx’x, Standard & Poor’s and Fitch, and (iiy) each of the Servicers such Subservicer remains an Affiliate of HFCHSBC Finance. At such time as either of the conditions specified in the preceding sentence is not satisfied, as promptly as practicable, but in no event more than 90 days thereafter in the case of clause (i) below, 60 days in the case of clause (ii) below and 60 days in the case of clause (iiiii) below, the Master Servicer shall cause each ServicerSubservicer, at such Servicer's Subservicer’s expense or, at to the Master Servicer's discretionextent the Subservicer fails to pay, the Master Servicer's ’s expense, to (i) either (x) record an assignment of Mortgage in favor of the Trustee Trustee, on behalf of the Trust (which may be a blanket assignment if permitted by applicable law) ), with respect to each of the Home Equity Loans being serviced by such Servicer Subservicer in the appropriate real property or other records or (y) deliver to the Trustee the assignment of such Mortgage in favor of the Trustee Trustee, on behalf of the Trust, in form for recordation, together with an Opinion of Counsel addressed to the Trustee to the effect that recording is not required to protect the Trustee's ’s right, title and interest in and to the related Home Equity Loan or to perfect a first priority security interest in favor of the Trustee Trustee, on behalf of the Trust, in the related Home Equity Loan, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating Agencies [and the Certificate Insurer] (as evidenced in writing)Trustee, and (ii) unless an Opinion of Counsel, reasonably acceptable to the Trustee and the Rating Agencies [and the Certificate Insurer] (as evidenced in writing), is delivered to the Trustee to the effect that delivery of the Mortgage Files is not necessary to protect the Trustee's ’s right, title and interest in and to the related Home Equity Loans or to perfect a first priority security interest in favor of the Trustee Trustee, on behalf of the Trust, that will be prior to all other present and future claims in the related Home Equity Loans, deliver the related Mortgage Files to the Trustee or a custodian on its behalf to be held by the Trustee or such custodian on its behalf in trust, upon the terms herein set forth, for the use and benefit of all present and future Certificateholders, and the Trustee or such custodian on its behalf shall retain possession thereof except to the extent the Master Servicer or Servicers Subservicers require any Mortgage Files for normal servicing as contemplated by Section 3.08, and (iii) have a Responsible Officer of the applicable Seller endorse the original Mortgage Note with respect to each of the Home Equity Loans being serviced by the Subservicer to “Pay to the order of ____________ without recourse” with all intervening endorsements showing a complete chain of title from the originator of such Home Equity Loan to the applicable Seller. The Master In the event that the Subservicers or the Servicer should fail to prepare, execute and record any assignments of Mortgages required under this Section 2.01 on a timely basis, the Servicer shall cause the Servicers Subservicers to appoint the Trustee as their attorney-in-fact to prepare, execute and record any assignments of Mortgages requested in writing by the Majority Certificateholder required under this Section 2.01 in 2.01. Such preparation, execution and recording shall be at the event expense of the Subservicers, or to the extent not paid by the Subservicers, the Servicer; provided that if the Servicers Trustee is not reasonably assured of payment of such expenses from the Subservicer or the Master Servicer should fail Servicer, the Trustee may require reasonable indemnity against such expense as a condition to do so on a timely basistaking any such action. (f) Within 90 days following delivery, if any, of the Mortgage Files to the Trustee or a custodian on its behalf pursuant to the preceding subsection, the Trustee or a custodian on its behalf shall review each such Mortgage File to ascertain that all required documents set forth in this Section 2.01 have been executed and received and that such documents relate to the Home Equity Loans identified on the Home Equity Loan Schedule, and in so doing the Trustee or such custodian on its behalf may rely on the purported due execution and genuineness of any signature thereon. If within such 90-day period the Trustee or custodian finds any document constituting a part of a Mortgage File not to have been executed or received or to be unrelated to the Home Equity Loans identified in said Home Equity Loan Schedule or, if in the course of its review, the Trustee or custodian determines that such Mortgage File is otherwise defective in any material respect, the Trustee or custodian shall promptly upon the conclusion of its review notify the Depositor and the Master Servicer, and the Depositor and the Master Servicer shall have a period of 90 days after such notice within which to correct or cure any such defect; provided, however, that if such defect shall not have been corrected or cured within such 90-day period due to the failure of the related office of real property or other records to return any document constituting a part of a Mortgage File, the Depositor or the Master Servicer shall so notify the Trustee and the period during which such defect may be corrected or cured shall be extended for one additional 90-day period. (g) The Trustee or a custodian on its behalf shall have no responsibility for reviewing any Mortgage File except as expressly provided in this Section 2.012.01(f). In reviewing any Mortgage File pursuant to this Section 2.01, the Trustee or a custodian on its behalf shall have no responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form (except, if applicable, to determine if the Trustee is the assignee or endorsee), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction, whether any Person executing any document is authorized to do so or whether any signature thereon is genuine, but shall only be required to determine whether a document has been executed, that it appears to be what it purports to be and, where applicable, that it purports to be recorded. (h) The Master Servicer hereby confirms to the Trustee that on or prior to the Closing Date with respect to the Initial Home Equity Loans and on or prior to the applicable Transfer Date with respect to any Eligible Substitute Home Equity Loan, the portions of the Electronic Ledger relating to such the Home Equity Loans have been or will have been clearly and unambiguously marked, and the appropriate entries have been or will have been made in its general accounting records, to indicate that such the Home Equity Loans have been transferred to the Trustee Trustee, on behalf of the Trust, and constitute part of the Trust in accordance with the terms hereof. (i) In connection with the assignment, pursuant to Section 2.01(e)(i), of any Home Equity Loan registered on the MERS® System, the Servicer shall cause each Subservicer, at such Subservicer’s expense or, to the extent the Subservicer fails to pay, the Servicer’s expense, at the time specified in the second sentence of Section 2.01(e)(i), to cause the MERS® System to indicate that such Home Equity Loans have been assigned to the Trust in accordance with this Agreement by including (or deleting, in the case of Home Equity Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code “[IDENTIFY TRUST SPECIFIC CODE]” in the field “[IDENTIFY THE FIELD NAME FOR TRUST]” which identifies the Trust and (b) the code “[IDENTIFY SERIES SPECIFIC CODE NUMBER]” in the field “Pool Field” which identifies the series of the Certificates issued in connection with such Home Equity Loans. The Servicer agrees that it will not alter the codes referenced in this paragraph with respect to any Home Equity Loan during the term of this Agreement unless and until such Home Equity Loan is repurchased in accordance with the terms of this Agreement, and there is filed any financing statement or amendment thereof necessary to comply with the New York UCC or the UCC of any applicable jurisdiction.