EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of March 29, 2007, between Residential Funding Company,
LLC, a Delaware limited liability company ("RFC") and Residential Asset Securities Corporation, a Delaware
corporation (the "Company").
Recitals
A. RFC has entered into seller contracts ("Seller Contracts") with certain sellers and servicers.
B. The Company wishes to purchase from RFC certain Mortgage Loans (as hereinafter defined)
originated pursuant to the Seller Contracts with respect thereto.
C. The Company, RFC, as master servicer, and U.S. Bank National Association, as trustee (the
"Trustee"), are entering into a Pooling and Servicing Agreement dated as of March 1, 2007 (the "Pooling and
Servicing Agreement"), pursuant to which the Trust proposes to issue Home Equity Mortgage Asset-Backed
Pass-Through Certificates, Series 2007-KS3 (the "Certificates") consisting of sixteen classes designated as
Class A-I-1, Class A-I-2, Class A-I-3, Class A-I-4, A-II, Class M-1S, Class M-2S, Class M-3S, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class SB and Class R Certificates, representing beneficial
ownership interests solely in a trust fund consisting primarily of a pool that will be divided into (i) the
adjustable and fixed rate one-to four-family mortgage loans identified on Exhibit F-1 to the Pooling and
Servicing Agreement (the "Group I Loans") and (ii) the adjustable and fixed rate one- to four-family mortgage
loans identified on Exhibit F-2 to the Pooling and Servicing Agreement (the "Group II Loans," and together with
the Group I Loans, the "Mortgage Loans").
D. In connection with the purchase of the Mortgage Loans, the Company will assign to RFC the
Class R Certificates (the "Retained Certificates").
E. In connection with the purchase of the Mortgage Loans and the issuance of the Certificates, RFC
wishes to make certain representations and warranties to the Company.
F. The Company and RFC intend that the conveyance by RFC to the Company of all its right, title
and interest in and to the Mortgage Loans pursuant to this Agreement shall constitute a purchase and sale and not
a loan.
NOW THEREFORE, in consideration of the recitals and the mutual promises herein and other good and
valuable consideration, the parties agree as follows:
1. All capitalized terms used but not defined herein shall have the meanings assigned thereto in the
Pooling and Servicing Agreement.
2. Concurrently with the execution and delivery hereof, RFC hereby assigns to the Company without recourse
all of its right, title and interest in and to the Mortgage Loans, including all interest and principal received
on or with respect to the Mortgage Loans after the Cut-off Date (other than payments of principal and interest
due on the Mortgage Loans in March 2007). In consideration of such assignment, RFC will receive from the
Company, in immediately available funds, an amount equal to $1,259,556,741.19 and the Retained Certificates. In
connection with such assignment and at the Company's direction, RFC has in respect of each Mortgage Loan endorsed
the related Mortgage Note (other than any Destroyed Mortgage Note, hereinafter defined) to the order of the
Trustee and delivered an assignment of mortgage in recordable form to the Trustee or its agent. A "Destroyed
Mortgage Note" means a Mortgage Note the original of which was permanently lost or destroyed.
The Company and RFC intend that the conveyance by RFC to the Company of all its right, title and
interest in and to the Mortgage Loans pursuant to this Section 2 shall be, and be construed as, a sale of the
Mortgage Loans by RFC to the Company. It is, further, not intended that such conveyance be deemed to be a pledge
of the Mortgage Loans by RFC to the Company to secure a debt or other obligation of RFC. Nonetheless (a) this
Agreement is intended to be and hereby is deemed to be a security agreement within the meaning of Articles 8 and
9 of the Minnesota Uniform Commercial Code and the Uniform Commercial Code of any other applicable jurisdiction;
(b) the conveyance provided for in this Section shall be deemed to be a grant by RFC to the Company of a security
interest in all of RFC's right (including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to (A) the Mortgage Loans, including the Mortgage Notes, the Mortgages, any
related insurance policies and all other documents in the related Mortgage Files, (B) all amounts payable
pursuant to the Mortgage Loans in accordance with the terms thereof and (C) any and all general intangibles
consisting of, arising from or relating to any of the foregoing, and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other property, including, without
limitation, all amounts from time to time held or invested in the Certificate Account or the Custodial Account,
whether in the form of cash, instruments, securities or other property; (c) the possession by the Trustee, the
Custodian or any other agent of the Trustee of Mortgage Notes or such other items of property as constitute
instruments, money, payment intangibles, negotiable documents, goods, deposit accounts, letters of credit,
advices of credit, investment property, certificated securities or chattel paper shall be deemed to be
"possession by the secured party," or possession by a purchaser or a person designated by such secured party, for
purposes of perfecting the security interest pursuant to the Minnesota Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including without limitation, Sections 8-106, 9-313 and
9-106 thereof); and (d) notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts
or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. RFC shall, to the extent consistent with this
Agreement, take such reasonable actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Mortgage Loans and the other property described above, such security interest
would be deemed to be a perfected security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement. Without limiting the generality of the foregoing, RFC shall
prepare and deliver to the Company not less than 15 days prior to any filing date, and the Company shall file, or
shall cause to be filed, at the expense of RFC, all filings necessary to maintain the effectiveness of any
original filings necessary under the Uniform Commercial Code as in effect in any jurisdiction to perfect the
Company's security interest in or lien on the Mortgage Loans including without limitation (x) continuation
statements, and (y) such other statements as may be occasioned by (1) any change of name of RFC or the Company,
(2) any change of location of the state of formation, place of business or the chief executive office of RFC, or
(3) any transfer of any interest of RFC in any Mortgage Loan.
3. Concurrently with the execution and delivery hereof, the Company hereby assigns to RFC without recourse
all of its right, title and interest in and to the Retained Certificates as part of the consideration payable to
RFC by the Company pursuant to this Agreement.
4. RFC represents and warrants to the Company, with respect to each Mortgage Loan that on the date of
execution hereof (or, if otherwise specified below, as of the date so specified and provided that all percentages
of the Mortgage Loans described in this Section 4 are approximate percentages by outstanding principal balance
determined as of the Cut-off Date after deducting payments due during the month of the Cut-off Date):
(i) Immediately prior to the delivery of the Mortgage Loans to the Company, RFC had good title to, and was
the sole owner of, each Mortgage Loan free and clear of any pledge, lien or security interest (other than
(a) rights to servicing and related compensation, and (b) any senior lien relating to a Mortgage Loan listed on
Schedule A attached hereto (the "Junior Lien Mortgage Loans")) and had full right and authority to sell and
assign the Mortgage Loans pursuant to this Agreement.
(ii) The proceeds of the Mortgage Loan have been fully disbursed, there is no requirement for future advances
thereunder and any and all requirements as to completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor (including any escrow funds held to make Monthly Payments pending
completion of such improvements) have been complied with. All costs, fees and expenses incurred in making,
closing or recording the Mortgage Loans were paid.
(iii) The Mortgagor (including any party secondarily liable under the Mortgage File) has no right of set-off,
defense, counterclaim or right of rescission as to any document in the Mortgage File except as may be provided
under the Relief Act.
(iv) RFC and any other originator, servicer or other previous owner of each Mortgage Loan has obtained all
licenses and effected all registrations required under all applicable local, state and federal laws, regulations
and orders, including without limitation truth in lending and disclosure laws, necessary to own or originate the
Mortgage Loans (the failure to obtain such licenses or to comply with such laws, regulations and orders would
make such Mortgage Loans void or voidable).
(v) A policy of title insurance, in the form and amount that is in material compliance with the Program
Guide, was effective as of the closing of each Mortgage Loan, is valid and binding, and remains in full force and
effect except for Mortgaged Properties located in the State of Iowa where an attorney's certificate has been
provided in accordance with the Program Guide. No claims have been made under such title insurance policy and no
holder of the related mortgage, including RFC, has done or omitted to do anything which would impair the coverage
of such title insurance policy.
(vi) Each Mortgage Loan is a valid and enforceable first lien (or in the case of the Junior Lien Mortgage
Loans, junior lien) on the Mortgaged Property subject only to (1) the lien of nondelinquent current real property
taxes and assessments, (2) covenants, conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions appearing of record being acceptable
to mortgage lending institutions generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (3) other matters to which like properties are commonly subject
that do not materially interfere with the benefits of the security intended to be provided by such Mortgage.
(vii) All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and the building restriction lines of the Mortgaged Premises, or the policy of title
insurance affirmatively insures against loss or damage by reason of any violation, variation, encroachment or
adverse circumstance that either is disclosed or would have been disclosed by an accurate survey.
(viii) There are no delinquent tax or delinquent assessment liens against the related Mortgaged Property, and
there are no mechanic's liens or claims for work, labor or material or any other liens affecting such Mortgaged
Property which are or may be a lien prior to, or equal with, the lien of the Mortgage assigned to RFC, except
those liens that are insured against by the policy of title insurance and described in (v) above.
(ix) Each Mortgaged Property is free of material damage and is in good repair and no notice of condemnation
has been given with respect thereto.
(x) The improvements upon the Mortgaged Property are insured against loss by fire and other hazards as
required by the Program Guide, including flood insurance if required under the National Flood Insurance Act of
1968, as amended. The Mortgage requires the Mortgagor to maintain such casualty insurance at the Mortgagor's
expense, and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's expense and to seek reimbursement therefore from the Mortgagor.
(xi) The appraisal was made by an appraiser who meets the minimum qualifications for appraisers as specified
in the Program Guide.
(xii) Each Mortgage Note and Mortgage constitutes a legal, valid and binding obligation of the Mortgagor
enforceable in accordance with its terms except as limited by bankruptcy, insolvency or other similar laws
affecting generally the enforcement of creditors' rights.
(xiii) Each Mortgage Loan is covered by a standard hazard insurance policy.
(xiv) Approximately 0.1% of the Mortgage Loans are secured by a leasehold estate.
(xv) The information set forth on the Mortgage Loan Schedule with respect to each Mortgage Loan is true and
correct in all material respects as of the date or dates which such information is furnished.
(xvi) None of the Mortgage Loans are 30 to 59 days Delinquent in payment of principal and interest. None of
the Mortgage Loans are 60 to 89 days Delinquent in the payment of principal or interest. None of the Mortgage
Loans are 90 or more days Delinquent in the payment of principal or interest. 0.2% of the Mortgage Loans have
been a maximum of 30 or more days Delinquent in payment of principal or interest in the last 12 months. For the
purposes of this representation a Mortgage Loan is considered Delinquent if a Subservicer or the Master Servicer
has made any advances on the Mortgage Loan that have not been reimbursed out of payments by the mortgagor or on
the mortgagor's behalf from a source other than a Subservicer, a Seller, the Master Servicer or an affiliated
entity of either.
(xvii) None of the Mortgage Loans with Loan-to-Value Ratios, or combined Loan-to-Value Ratios with respect to
Junior Lien Loans, at origination in excess of 80% are insured by a borrower-paid, primary mortgage insurance
policy.
(xviii) The weighted average Loan-to-Value Ratio with respect to Group I Loans, and the Group II Loans, in each
case by outstanding principal balance at origination, is 82.6% and 82.9%, respectively.
(xix) No more than approximately 0.2% of the Group I Loans are located in any one zip code area in California
and no more than approximately 0.3% of the Group I Loans are located in any one zip code area outside of
California.
(xx) Approximately 99.9% of the Group I Loans and all of the Group II Loans that are adjustable-rate loans
will adjust semi-annually based on Six-Month LIBOR (as defined in the Prospectus Supplement), and 0.1% of the
Group I Loans that are adjustable-rate loans will adjust annually based on One-Year LIBOR (as defined in the
Prospectus Supplement ). Each of the Mortgage Loans that are adjustable-rate loans will adjust on the Adjustment
Date specified in the related Mortgage Note to a rate equal to the sum (rounded as described in the Prospectus
Supplement) of the related Index described in the Prospectus Supplement and the Note Margin set forth in the
related Mortgage Note, subject to the limitations described in the Prospectus Supplement, and each Mortgage Loan
has an original term to maturity from the date on which the first monthly payment is due of not more than
approximately 30 years. On each Adjustment Date, the Mortgage Rate on each Mortgage Loan that is an
adjustable-rate loan will be adjusted to equal the related Index plus the related Gross Margin, subject in each
case to the Periodic Rate Cap, the Mortgage Rate and the Minimum Mortgage Rate. The amount of the monthly
payment on each Mortgage Loan that is an adjustable-rate loan will be adjusted on the first day of the month
following the month in which the Adjustment Date occurs to equal the amount necessary to pay interest at the
then-applicable Mortgage Rate to fully amortize the outstanding principal balance of such Mortgage Loan over its
remaining term to stated maturity. No Mortgage Loan is subject to negative amortization.
(xxi) With respect to each Mortgage constituting a deed of trust, a trustee, duly qualified under applicable
law to serve as such, has been properly designated and currently so serves and is named in such Mortgage, and no
fees or expenses are or will become payable by the holder of the Mortgage Loan to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the Mortgagor.
(xxii) Approximately 11.3% and 8.6% of the Mortgaged Properties related to the Group I Loans and the Group II
Loans, respectively, are units in detached planned unit developments. Approximately 1.6% and 2.2% of the
Mortgaged Properties related to the Group I Loans and Group II Loans, respectively, are units in attached planned
unit developments. Approximately 1.3% and 2.0% of the Mortgaged Properties related to the Group I Loans and the
Group II Loans, respectively, are units in townhouses. Approximately 5.2% and 4.5% of the Mortgaged Properties
related to the Group I Loans and the Group II Loans, respectively, are condominium units. Approximately 0.1% and
0.2% of the Mortgaged Properties related to the Group I Loans and the Group II Loans, respectively, are
leaseholds. Each Mortgaged Property is suitable for year-round occupancy.
(xxiii) Approximately 93.9% of the Mortgaged Properties related to the Mortgage Loans are secured by the owner's
primary residence. Approximately 2.3% of the Mortgaged Properties related to the Mortgage Loans are secured by
the owner's second or vacation residence. Approximately 3.8% of the Mortgaged Properties related to the Mortgage
Loans are secured by a non-owner occupied residence.
(xxiv) Approximately 74.8% and 76.1% of the Mortgaged Properties related to the Group I Loans and the Group II
Loans, respectively, are secured by detached one-family dwelling units. Approximately 5.7% and 6.3% of the
Mortgaged Properties related to the Group I Loans and the Group II Loans, respectively, are secured by two- to
four-family dwelling units.
(xxv) The average outstanding principal balance of the Group I Loans at origination was approximately
$161,416. The average outstanding principal balance of the Group II Loans at origination was approximately
$175,287. No Group I Loan or Group II Loan at origination had a principal balance of less than $10,050 and
$15,120 or more than $ 1,000,000 and $414,000, respectively.
(xxvi) As of the Cut-off Date, all Mortgage Rate adjustments on the Mortgage Loans that have reached an
Adjustment Date have been done in accordance with the terms of the related Mortgage Note.
(xxvii) Any escrow arrangements established with respect to any Mortgage Loan are in compliance with all
applicable local, state and federal laws and are in compliance with the terms of the related Mortgage Note.
(xxviii) Except as otherwise specifically set forth herein, there is no default, breach, violation or event of
acceleration existing under any Mortgage Note or Mortgage and no event which, with notice and expiration of any
grace or cure period, would constitute a default, breach, violation or event of acceleration, and no such
default, breach, violation or event of acceleration has been waived by RFC or by any other entity involved in
originating or servicing a Mortgage Loan.
(xxix) Each Mortgage Loan constitutes a "qualified mortgage" under Section 860G(a)(3)(A) of the Code and
Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6), (7) and (9), without reliance on the provisions
of Treasury Regulation Section 1.860G-2(a)(3) or Treasury Regulation Section 1.860G-2(f)(2) or any other
provision that would allow a Mortgage Loan to be treated as a "qualified mortgage" notwithstanding its failure to
meet the requirements of Section 860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9).
(xxx) No more than approximately 59.2% of the Group I Loans have been classified by RFC as Credit Grade A4, no
more than approximately 25.0% of the Group I Loans have been classified by RFC as Credit Grade A5, no more than
approximately 9.6% of any Group I Loans have been classified by RFC as Credit Grade AX Mortgage Loans, no more
than approximately 4.4% of the Group I Loans have been classified by RFC as Credit Grade AM Mortgage Loans, no
more than approximately 1.1% of the Group I Loans have been classified by RFC as Credit Grade B Mortgage Loans
and no more than approximately 0.9% of the Group I Loans have been classified by RFC as Credit Grade C Mortgage
Loans, in each case as described generally in the Prospectus Supplement.
(xxxi) No more than approximately 68.0% of the Group II Loans have been classified by RFC as Credit Grade A4,
no more than approximately 16.3% of the Group II Loans have been classified by RFC as Credit Grade A5, no more
than approximately 10.2% of any Group II Loans have been classified by RFC as Credit Grade AX Mortgage Loans, no
more than approximately 4.2% of the Group II Loans have been classified by RFC as Credit Grade AM Mortgage Loans,
no more than approximately 1.0% of the Group II Loans have been classified by RFC as Credit Grade B Mortgage
Loans and no more than approximately 0.6% of the Group II Loans have been classified by RFC as Credit Grade C
Mortgage Loans, in each case as described generally in the Prospectus Supplement.
(xxxii) No Mortgage Loan is a graduated payment loan or has a shared appreciation or contingent interest feature.
(xxxiii) With respect to each Mortgage Loan, either (i) each Mortgage Loan contains a customary provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event the related
Mortgaged Property is sold without the prior consent of the mortgagee thereunder or (ii) the Mortgage Loan is
assumable pursuant to the terms of the Mortgage Note.
(xxxiv) No Mortgage Loan provides for deferred interest or negative amortization.
(xxxv) None of the Mortgage Loans are buy-down Mortgage Loans.
(xxxvi) Each Mortgaged Property is a single parcel of real estate with a one- to four-unit
single family residence thereon, a condominium unit, a manufactured housing unit, a unit in a townhouse, a
planned unit development, a leasehold or a modular home; and no Mortgage Property consists of a mobile home or a
manufactured housing unit that is not permanently affixed to its foundation.
(xxxvii) No more than approximately 34.3% and 42.6% of the Group I Loans and Group II Loans, respectively, were
made to Mortgagors with credit scores as described generally in the Prospectus Supplement of less than 600
excluding Mortgagors whose credit scores are not available to RFC. The weighted average of the credit scores for
the Group I Loans and the Group II Loans for which Credit Scores are available to RFC was approximately 610 and
618, respectively, as of the Cut-off Date.
(xxxviii) No instrument of release or waiver has been executed in connection with the Mortgage Loans, and
no Mortgagor has been released, in whole or in part from its obligations in connection with a Mortgage Loan.
(xxxix) The weighted average remaining term to stated maturity of the Group I Loans and the
Group II Loans, respectively, as of the cut-off date will be approximately 352 and 354 months. The weighted
average original term to maturity of the Group I Loans and the Group II Loans, respectively, as of the cut-off
date will be approximately 354 and 357 months.
(xl) No Group I Loan has a prepayment penalty term that extends beyond five years after the date of
origination.
(xli) Approximately 25.2% of the Group I Loans and 30.6% of the Group II Loans are Balloon Mortgage Loans.
(xlii) None of the Mortgage Loans are loans that, under applicable state or local law in effect at the time of
origination of such Mortgage Loan, are referred to as (1) "high cost" or "covered" loans or (2) any other similar
designation if the law imposes greater restrictions or additional legal liability for residential mortgage loans
with high interest rates, points and/or fees.
(xliii) [Reserved.]
(xliv) Each Group I Loan and Group II Loan listed on the attached Exhibit B has an original term to maturity of
360 months and an original amortization term of 480 months or an original term to maturity of 540 months and an
original amortization term of 540 months or an original term to maturity of 600 months and an original term
amortization term of 600 months.
(xlv) Each Mortgage Loan and prepayment penalty associated with the Mortgage Loan at origination complied in
all material respects with applicable local, state and federal laws, including, without limitation, usury, equal
credit opportunity, real estate settlement procedures, truth-in-lending and disclosure laws, and the consummation
of the transactions contemplated hereby will not involve the violation of any such laws.
(xlvi) None of the Mortgage Loans are subject to the Home Ownership and Equity Protection Act of 1994 ("HOEPA").
(xlvii) None of the Mortgaged Properties are units in manufactured housing developments.
(xlviii) No Mortgage Loan was originated on or after October 1, 2002 and before March 7, 2003, which is secured
by property located in the State of Georgia.
(xlix) No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the
current version of Appendix E of the Standard & Poor's Glossary For File Format For LEVELS(R)Version 5.7 (attached
hereto as Exhibit A); and there is no mortgage loan in the trust that was originated on or after January 1, 2005,
which is a "high cost home loan" as defined under the Indiana Home Practices Act (I.C. 2409); provided that no
representation and warranty is made in this clause (xlvii) with respect to 0.1% and 0.1% of the Group I Loans and
Group II Loans, respectively, secured by property located in the State of Kansas or with respect to approximately
0.3% and 0.2% of the Group I Loans and the Group II Loans, respectively, secured by property located in the State
of West Virginia.
(l) With respect to each Group II Loan, no borrower obtained a prepaid single-premium credit-life, credit
disability, credit unemployment or credit property insurance policy in connection with the origination of the
Mortgage Loan.
(li) The related Subservicer or the Master Servicer for each Mortgage Loan has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
(lii) The Subservicer for each Mortgage Loan or the Master Servicer will fully furnish, in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable
and unfavorable) on its borrower credit files to Equifax, Experian, and Trans Union Credit Information Company
(three of the credit repositories), on a monthly basis.
(liii) With respect to any Group II Loan that contains a provision permitting imposition of a penalty upon a
prepayment prior to maturity:
(i) the Seller's pricing methods include mortgage loans with and without prepayment
premiums;
(ii) borrowers selecting Group II Loans which include such prepayment premiums receive
some benefit, (e.g. a rate or fee reduction), in exchange for selecting a Group II
Loan with a prepayment premium;
(iii) the originator of the Group II Loans had a verifiable policy of offering the
borrower, or requiring third-party brokers to offer the borrower an array of mortgage
loan products that included mortgage loan products with prepayment premiums and
mortgage loan products that did not require payment of such a premium;
(iv) the prepayment premium is disclosed to the borrower in the loan documents
pursuant to applicable state and federal law;
(v) notwithstanding any state or federal law to the contrary, the Master Servicer
shall not impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the borrower's default in making the loan payments; and
(vi) no Group II Loan has a prepayment penalty term that extends beyond three years
after the date of origination, unless the loan will be within 90 days from the date
hereof modified to reduce the prepayment penalty term to no more than three years
after the date of origination and the borrower was notified in writing of such
reduction in prepayment penalty term.
(liv) The originator of each Group II Loan offered the related borrower mortgage loan products for which the
borrower qualified and we are not aware that the originator encouraged or required the borrower to select a
mortgage loan product that is a higher cost product designed for less creditworthy borrowers.
(lv) The originator of the Group II Loans adequately considered the borrower's ability to make payments by
employing underwriting techniques that considered a variety of factors, such as: the borrower's income, assets
and liabilities, and not solely the collateral value, in deciding to extend the credit at the time of origination.
(lvi) No borrower under a Group II Loan in the trust was charged "points and fees" in an amount greater than
(a) $1,000 or (b) 5% of the principal amount of such Mortgage Loan, whichever is greater. For purposes of this
representation, "points and fees" (x) include origination, underwriting, broker and finder's fees and charges
that the lender imposed as a condition of making the Mortgage Loan, whether they are paid to the lender or a
third party; and (y) exclude bona fide discount points, fees paid for actual services rendered in connection with
the origination of the mortgage (such as attorney's fees, notaries fees and fees paid for property appraisals,
credit reports, surveys, title examinations and extracts, flood and tax certifications, and home inspections);
the cost of mortgage insurance or credit-risk price adjustments; the costs of title, hazard, and flood insurance
policies; state and local transfer taxes or fees; escrow deposits for the future payment of taxes and insurance
premiums; and other miscellaneous fees and charges, which miscellaneous fee and charges, in total do not exceed
0.25 percent of the loan amount.
(lvii) With respect to any Group II Loan originated on or after August 1, 2004, neither the related Mortgage
nor the related Mortgage Note requires the borrower to submit to arbitration to resolve any dispute arising out
of or relating in any way to the Mortgage Loan transaction.
(lviii) The principal balance at origination for each Group II Mortgage Loan that is secured by a single family
property located in any state other than the States of Hawaii or Alaska did not exceed $417,000. The principal
balance at origination for each Group II Mortgage Loan that is secured by a single family property located in the
States of Hawaii or Alaska or the Territories of Guam or the Virgin Islands did not exceed $625,500. The
principal balance at origination for each Group II Mortgage Loan that is secured by a two-, three- or four-family
property located in any state other than the States of Hawaii or Alaska did not exceed $533,850, $645,300 or
$801,950, respectively. The principal balance at origination for each Group II Mortgage Loan that is secured by
a two-, three- or four-family property located in the States of Hawaii or Alaska or the Territories of Guam or
the Virgin Islands did not exceed $800,775, $967,950 and $1,202,925, respectively.
(lix) With respect to any Group II Loan that is a subordinate lien mortgage loan:
(i) such lien is on a one- to four-family residence that is the principal residence of
the borrower;
(ii) no subordinate lien mortgage loan has an original principal balance that exceeds
one-half of the one-unit limitation for first lien mortgage loans, i.e. $208,500 (in
Alaska, Guam, Hawaii or Virgin Islands: $312,750), without regard to the number of
units; and
(iii) the original principal balance of the first lien mortgage loan plus the original
principal balance of any subordinate lien mortgage loans relating to the same
mortgaged property does not exceed the applicable Xxxxxxx Mac loan limit for first
lien mortgage loans for that property type (as set out in Section 4(lviii) above).
(lx) No Group II Loan is "seasoned" (a seasoned mortgage loan is one where the date of the mortgage note is
more than 1 year before the date of issuance of the related security).
(lxi) No refinance or purchase money Group II Loan in the trust has an annual percentage rate or total points
and fees that exceed the thresholds set by the Home Ownership and Equity Protection Act of 1994 ("HOEPA") and its
implementing regulations, including 12 CFRss.226.32(a)(1)(i) and (ii).
(lxii) The information set forth in the prepayment charge schedule attached hereto as Exhibit C (the
"Prepayment Charge Schedule") is complete, true and correct in all material respects at the date or dates on which
such information is furnished, and each prepayment penalty is permissible and enforceable in accordance with the
terms disclosed in the Prepayment Charge Schedule upon the mortgagor's full and voluntary principal prepayment
under applicable law, except to the extent that: (1) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to creditors' rights; (2) the collectability
thereof may be limited due to acceleration in connection with a foreclosure or other involuntary prepayment; or
(3) subsequent changes in applicable law may limit or prohibit enforceability thereof under applicable law.
Upon discovery by RFC or upon notice from the Company or the Trustee of a breach of the foregoing
representations and warranties in respect of any Mortgage Loan, or upon the occurrence of a Repurchase Event (as
described in Section 5 below), which materially and adversely affects the interests of any holders of the
Certificates or the Company in such Mortgage Loan (notice of which breach or occurrence shall be given to the
Company by RFC, if it discovers the same), RFC shall, within 90 days after the earlier of its discovery or
receipt of notice thereof, either cure such breach or Repurchase Event in all material respects or, except as
otherwise provided in Section 2.04 of the Pooling and Servicing Agreement, either (i) purchase such Mortgage Loan
from the Trustee or the Company, as the case may be, at a price equal to the Purchase Price for such Mortgage
Loan or (ii) substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan in the manner and
subject to the limitations set forth in Section 2.04 of the Pooling and Servicing Agreement. Notwithstanding the
foregoing, it is understood by the parties hereto that a breach of the representations and warranties made in any
of clauses (xlv) through (lxi) of this Section 4 with respect to any Group II Loan will be deemed to materially
and adversely affect the interests of the Holders of the Certificates in the related Mortgage Loan.
Notwithstanding the foregoing, RFC shall not be required to cure breaches, Repurchase Events or purchase or
substitute for Mortgage Loans as provided above if the substance of such breach or Repurchase Event also
constitutes fraud in the origination of the Mortgage Loan. If the breach of representation and warranty that
gave rise to the obligation to repurchase or substitute a Mortgage Loan pursuant to this Section 4 was the
representation set forth in clause (xlv) of this Section 4, then RFC shall pay to the Trust Fund, concurrently
with and in addition to the remedies provided in the preceding sentence, an amount equal to any liability,
penalty or expense that was actually incurred and paid out of or on behalf of the Trust Fund, and that directly
resulted from such breach, or if incurred and paid by the Trust Fund thereafter, concurrently with such payment.
5. With respect to the Mortgage Loans, a repurchase event ("Repurchase Event") shall have occurred if it is
discovered that, as of the date hereof, the related Mortgage Loan was not a valid first lien or junior lien in
the case of a Junior Lien Loan on the related Mortgaged Property subject only to (i) the lien of real property
taxes and assessments not yet due and payable, (ii) covenants, conditions, and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such Mortgage and such other
permissible title exceptions as are listed in the Program Guide and (iii) other matters to which like properties
are commonly subject which do not materially adversely affect the value, use, enjoyment or marketability of the
Mortgaged Property.
6. RFC hereby represents and warrants to the Company that with respect to each Mortgage Loan, the REMIC's
tax basis in each Mortgage Loan as of the Closing Date is equal to or greater than 100% of the Stated Principal
Balance thereof.
7. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and assigns, and no other person shall have any right or obligation hereunder.
8. RFC, as master servicer under the Pooling and Servicing Agreement (the "Master Servicer"), shall not
waive (or permit a sub-servicer to waive) any Prepayment Charge unless: (i) the enforceability thereof shall have
been limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors'
rights generally, (ii) the enforcement thereof is illegal, or any local, state or federal agency has threatened
legal action if the prepayment penalty is enforced, (iii) the collectability thereof shall have been limited due
to acceleration in connection with a foreclosure or other involuntary payment or (iv) such waiver is standard and
customary in servicing similar Mortgage Loans and relates to a default or a reasonably foreseeable default and
would, in the reasonable judgment of the Master Servicer, maximize recovery of total proceeds taking into account
the value of such Prepayment Charge and the related Mortgage Loan. In no event will the Master Servicer waive a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is not related to a default or a
reasonably foreseeable default. If a Prepayment Charge is waived, but does not meet the standards described
above, then the Master Servicer is required to pay the amount of such waived Prepayment Charge to the holder of
the Class SB Certificates at the time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Custodial Account. Notwithstanding any other provisions of this Agreement, any payments made
by the Master Servicer in respect of any waived Prepayment Charges pursuant to this Section shall be deemed to be
paid outside of the Trust Fund and not part of any REMIC.
[Signature page follows]
IN WITNESS WHEREOF, the parties have entered into this Assignment and Assumption Agreement as of the
date first above written.
RESIDENTIAL FUNDING COMPANY, LLC
By:________________________________
Name:
Title:
RESIDENTIAL ASSET SECURITIES CORPORATION
By:________________________________
Name:
Title:
EXHIBIT A
APPENDIX E OF THE STANDARD & POOR'S GLOSSARY FOR
FILE FORMAT FOR LEVELS(R)VERSION 5.7
REVISED October 20, 0000
XXXXXXXX X - STANDARD & POOR'S PREDATORY LENDING CATEGORIES
Standard & Poor's has categorized loans governed by anti-predatory lending laws in the
Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk
exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note
that certain loans classified by the relevant statute as Covered are included in Standard & Poor's High Cost Loan
Category because they included thresholds and tests that are typical of what is generally considered High Cost by
the industry.
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
CATEGORY UNDER
NAME OF ANTI-PREDATORY LENDING APPLICABLE ANTI-
STATE/JURISDICTION LAW/EFFECTIVE DATE PREDATORY LENDING LAW
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code Xxx.ss.ss.00-00-000 et seq.
Effective July 16, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Covered Loan
Codess.ss.757.01 et seq.
Effective June 2, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Colorado Consumer Equity Protection, Colo. Stat. Covered Loan
Xxx.ss.ss.5-3.5-101 et seq.
Effective for covered loans offered or entered into on or after
January 1, 2003. Other provisions of the Act took effect on June
7, 2002
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Connecticut Connecticut Abusive Home Loan High Cost Home Loan
Lending Practices Act, Conn. Gen. Stat.
ss.ss.36a-746 et seq.
Effective October 1, 2001
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
District of Columbia Home Loan Protection Act, D.C. Code Covered Loan
ss.ss.26-1151.01 et seq.
Effective for loans closed on or after January 28, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Florida Fair Lending Act, Fla. Stat. Xxx.xx.xx. High Cost Home Loan
494.0078 et seq.
Effective October 2, 2002
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Georgia (Oct. 1, 0000 - Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
Mar. 6, 2003) Xxx.ss.ss.7-6A-1 et seq.
Effective October 1, 2002 - March 6 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Georgia as amended Georgia Fair Lending Act, Ga. Code High Cost Home Loan
(Mar. 7, 2003 - current) Xxx.ss.ss.7-6A-1 et seq.
Effective for loans closed on or after
March 7, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
HOEPA Section 32 Home Ownership and Equity Protection High Cost Loan
Act of 1994, 15 U.S.C.ss.1639, 12
C.F.R.ss.ss.226.32 and 226.34
Effective October 1, 1995, amendments
October 1, 2002
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Illinois High Risk Home Loan Act, Ill. Comp. High Risk Home Loan
Stat. tit. 815,ss.ss.137/5 et seq.
Effective January 1, 2004 (prior to this date, regulations under
Residential
Mortgage License Act effective from May 14, 2001)
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Indiana Indiana Home Loan Practices Act, Ind. Code Xxx.ss.ss.24-9-1-1 et High Cost Home LoanS
seq.
Effective January 1, 2005; amended by 2005 HB 1179, effective
July 1, 2005
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Kansas Consumer Credit Code, Kan. Stat. Xxx. High Loan to Value Consumer Loan (xx.xx.
ss.ss.16a-1-101 et seq. 16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999;
Section 16a-3-308a became effective July 1, 1999
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
High APR Consumer Loan (id.ss.16a-3-308a)
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home High Cost Home Loan
Loan Act, Ky. Rev. Stat.ss.ss.360.100 et seq.
Effective June 24, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. 9- High Rate High Fee Mortgage
A,ss.ss.8-101 et seq.
Effective September 29, 1995 and as amended from time to time
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Massachusetts Part 40 and Part 32, 209 X.X.X.xx.xx. High Cost Home Loan
32.00 et seq. and 209 C.M.R.ss.ss.40.01 et seq.
Effective March 22, 2001 and amended from time to time
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. Home Loan
ss.ss.598D.010 et seq.
Effective October 1, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
New Jersey New Jersey Home Ownership Security High Cost Home Loan
Act of 2002, N.J. Rev. Stat.ss.ss.46:10B- 22 et seq.
Effective for loans closed on or after November 27, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. High Cost Home Loan
Stat.ss.ss.58-21A-1 et seq.
Effective as of January 1, 2004; Revised
as of February 26, 2004
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
New York N.Y. Banking Law Article 6-1 High Cost Home Loan
Effective for applications made on or after April 1, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
North Carolina Restrictions and Limitations on High High Cost Home Loan
Cost Home Loans, N.C. Gen. Stat.ss.ss.24-1.1E et seq.
Effective July 1, 2000; amended October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Ohio H.B. 386 (codified in various sections of the Ohio Code), Ohio Covered Loan
Rev. Code Xxx.ss.ss.1349.25 et seq.
Effective May 24, 2002
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Oklahoma Consumer Credit Code (codified in various sections of Title 14A) Subsection 10 Mortgage
Effective July 1, 2000; amended effective January 1, 2004
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C. Code
Xxx.ss.ss.37-23-10 et seq.
Effective for loans taken on or after January 1, 2004
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
West Virginia West Virginia Residential Mortgage Lender, Broker and Servicer West Virginia Mortgage Loan Act Loan
Act, W.
Va. Code Xxx.ss.ss.31-17-1 et seq.
Effective June 5, 2002
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
APPLICABLE ANTI-
LAW/EFFECTIVE DATE PREDATORY LENDING LAW
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Covered Loan
Mar. 6, 2003) Xxx.ss.ss.7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
New Jersey New Jersey Home Ownership Security Covered Home Loan
Act of 2002, N.J. Rev. Stat.ss.ss.46:10B 22 et seq.
Effective November 27, 2003 - July 5, 2004
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
STANDARD & POOR'S HOME LOAN CATEGORIZATION
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
APPLICABLE ANTI-
LAW/EFFECTIVE DATE PREDATORY LENDING LAW
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Home Loan
Mar. 6, 2003) Xxx.ss.ss.7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
New Jersey New Jersey Home Ownership Security Home Loan
Act of 2002, N.J. Rev. Stat.ss.ss.46:10B- 22 et seq.
Effective for loans closed on or after November 27, 2003
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat.ss.ss.58-21A-1 et seq. Home Loan
Effective as of January 1, 2004; Revised as of February 26, 2004
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
North Carolina Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Consumer Home Loan
Xxxx.xx.xx.
24-1.1E et seq.
Effective July 1, 2000; amended October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
South Carolina South Carolina High Cost and Consumer Home Loans Act, S.C. Code Consumer Home Loan
Xxx.ss.ss.37-23-10 et seq.
Effective for loans taken on or after January 1, 2004
--------------------------------------------- ------------------------------------------------------------------ --------------------------------------------
Schedule of Balloon Loans
[ON FILE AT RFC]
EXHIBIT C
Prepayment Charge Schedule
[ATTACHED]
