MORTGAGE LOAN PURCHASE AGREEMENT
This
Mortgage Loan Purchase Agreement (the “Agreement”), dated as of February 1,
2006, is between HSI Asset Securitization Corporation, a Delaware corporation
(the “Company”), and HSBC Bank USA, National Association, a national banking
association (the “Seller”).
The
Company and the Seller hereby recite and agree as follows:
1. Defined
Terms.
Terms
used without definition herein shall have the respective meanings assigned
to
them in the Pooling and Servicing Agreement, dated as of February 1, 2006 (the
“Pooling and Servicing Agreement”), by and among the Depositor, NC Capital
Corporation, as mortgage loan seller (the “Mortgage Loan Seller”), JPMorgan
Chase Bank, National Association, as servicer, Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator and Deutsche Bank National Trust Company,
as trustee (the “Trustee”) and custodian, relating to the issuance of the HSI
Asset Securitization Corporation Trust 2006-NC1 Mortgage Pass-Through
Certificates, Series 2006-NC1 (the “Pooling and Servicing Agreement”). Unless
otherwise defined herein, capitalized terms used herein shall have the same
meanings assigned to them in the Pooling and Servicing Agreement.
2. Purchase
of Mortgage Loans.
The
Seller hereby sells, transfers, assigns and conveys, and the Company hereby
purchases the mortgage loans (the “Mortgage Loans”) listed on the Mortgage Loan
Schedule in Exhibit
1.
3. Purchase
Price; Purchase and Sale.
The
purchase price (the “Purchase Price”) for the Mortgage Loans shall be
$329,313,059.48 inclusive
of
accrued
and unpaid interest on the Mortgage Loans at the weighted average interest
rate
borne by the Mortgage Loans from the date hereof to but not including the
Closing Date, payable by the Company to the Seller on the Closing Date either
(i) by appropriate notation of an inter-company transfer between affiliates
of
HSBC or (ii) in immediately available Federal funds wired to such bank as may
be
designated by the Seller.
Upon
payment of the Purchase Price, the Seller shall be deemed to have transferred,
assigned, set over and otherwise conveyed to the Company all the right, title
and interest of the Seller in and to the Mortgage Loans as of the Cut-Off Date,
including all interest and principal due on the Mortgage Loans after the Cut-Off
Date (including Scheduled Payments due after the Cut-Off Date but received
by
the Seller on or before the Cut-Off Date, but not including payments of
principal and interest due on the Mortgage Loans on or before the Cut-Off Date),
together with all of the Seller’s right, title and interest in and to the
proceeds of any related title, hazard, primary mortgage or other insurance
policies.
The
Company hereby directs the Seller, and the Seller hereby agrees, to deliver
to
the Trustee all documents, instruments and agreements required to be delivered
by the Company to the Trustee under the Pooling and Servicing Agreement and
such
other documents, instruments and agreements as the Company or the Trustee shall
reasonably request.
4. Representations
and Warranties.
The
Seller hereby represents and warrants to the Company with respect to each
Mortgage Loan as of the date hereof and as of the Closing Date as follows:
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(a)
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With
respect to each Mortgage Loan in either Loan Group, as of the date
hereof
and as of the Closing Date:
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(1)
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The
Seller has good title to the Mortgage Loans and the Mortgage Loans
were
subject to no offsets, defenses or
counterclaims.
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(2)
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Except
with respect to payments not yet more than 30 days past due, there
has
been no delinquency, exclusive of any grace period, in any payment
by the
borrower since the Initial Sale Date of the Mortgage
Loan.
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(3)
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The
Mortgaged Property is free of material damage and waste and there
is no
proceeding pending for the total or partial condemnation of the Mortgaged
Property.
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(4)
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From
and after the Initial Sale Date to the Closing Date, there have been
no
delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable
in
future installments or other outstanding charges affecting the related
Mortgaged Property;
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(5)
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From
and after the Initial Sale Date to the Closing Date, the terms of
the
Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments, recorded
in the
applicable public recording office if necessary to maintain the lien
priority of the Mortgage, and which have been delivered to the Trustee
on
behalf of the Company; the substance of any such waiver, alteration
or
modification has been approved by the title insurer, to the extent
required by the related policy, and is reflected on the related Mortgage
Loan Schedule. No instrument of waiver, alteration or modification
has
been executed, and no borrower has been released, in whole or in
part,
except in connection with an assumption agreement approved by the
title
insurer, to the extent required by the policy, and which assumption
agreement has been delivered to the Custodian and the terms of which
are
reflected in the related Mortgage Loan
Schedule;
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(6)
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All
buildings upon the Mortgaged Property are insured by an insurer acceptable
to Xxxxxx Xxx and Xxxxxxx Mac against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where
the
Mortgaged Property is located, in an amount not less than the greatest
of
(i) 100.00% of the replacement cost of all improvements to the
Mortgaged Property, (ii) the outstanding principal balance of
the Mortgage Loan, (iii) the amount necessary to avoid the operation
of any co-insurance provisions with respect to the Mortgaged Property,
and
consistent with the amount that would have been required as of the
date of
origination in accordance with the underwriting guidelines or
(iv) the amount necessary to fully compensate for any damage or loss
to the improvements that are a part of such property on a replacement
cost
basis. All such insurance policies contain a standard mortgagee clause
naming the Mortgage Loan Originator, its successors and assigns as
mortgagee and all premiums thereon have been paid. If the Mortgaged
Property is in an area identified on a Flood Hazard Map or Flood
Insurance
Rate Map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available)
a
flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration is in effect which policy
conforms
to the requirements of the Underwriting Guidelines. The Mortgage
obligates
the borrower thereunder to maintain all such insurance at the borrower’s
cost and expense, and on the borrower’s failure to do so, authorizes the
holder of the Mortgage to maintain such insurance at borrower’s cost and
expense and to seek reimbursement therefor from the
Mortgagor;
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(7)
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The
Mortgage has not been satisfied, cancelled, subordinated or rescinded,
in
whole or in part, and the Mortgaged Property has not been released
from
the lien of the Mortgage, in whole or in part, nor has any instrument
been
executed that would effect any such satisfaction, cancellation,
subordination, rescission or
release;
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(8)
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The
Mortgage is a valid, existing and enforceable first lien (as indicated
on
the Mortgage Loan Schedule) on the Mortgaged Property, including
all
improvements on the Mortgaged Property subject only to (a) the lien
of current real property taxes and assessments not yet due and payable,
(b) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
being
acceptable to mortgage lending institutions generally and specifically
referred to in the lender’s title insurance policy delivered to the
Mortgage Loan Seller of the Mortgage Loan and which do not adversely
affect the Appraised Value of the Mortgaged Property, and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to
be
provided by the Mortgage or the use, enjoyment, value or marketability
of
the related Mortgaged Property. Any security agreement, chattel mortgage
or equivalent document related to and delivered in connection with
the
Mortgage Loan establishes and creates a valid, existing and enforceable
first lien and first priority security interest (in each case, as
indicated on the Mortgage Loan Schedule) on the property described
therein
and the Seller has full right to sell and assign the same to the
Company.
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(9)
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From
and after the Initial Sale Date and immediately prior to the transfer
and
assignment of each Mortgage Loan by the Seller to the Company, the
Seller
was the sole legal, beneficial and equitable owner of the Mortgage
Note
and the Mortgage. The Seller has full right to transfer and sell
the
Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity,
lien, pledge, charge, claim or security
interest;
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(10)
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There
is no default, breach, violation or event of acceleration existing
under
the Mortgage or the Mortgage Note, no event which, with the passage
of
time or with notice and the expiration of any grace or cure period,
would
constitute a default, breach, violation or event of acceleration,
and the
Seller has not waived any default, breach, violation or event of
acceleration.
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(11)
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From
and after the Initial Sale Date to the Closing Date, no mechanics’ or
similar liens or claims have been filed for work, labor or material
(and
no rights are outstanding that under law could give rise to such
lien)
affecting the related Mortgaged Property which are or may be liens
prior
to, or equal or coordinate with, the lien of the related
Mortgage;
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(12)
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Since
the Initial Sale Date of the Mortgage Loan, the Mortgaged Property
has not
been subject to any bankruptcy proceeding or foreclosure proceeding
and
the Mortgagor has not filed for protection under applicable bankruptcy
laws. There is no homestead or other exemption available to the Mortgagor
which would interfere with the right to sell the Mortgaged Property
at a
trustee’s sale or the right to foreclose the Mortgage. The Mortgagor has
not notified the Seller and the Seller has no knowledge of any relief
requested by the borrower under the Servicemembers Civil Relief
Act;
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(13)
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From
and after the Initial Sale Date to the Closing Date, the Mortgaged
Property is in material compliance with all applicable environmental
laws
pertaining to environmental hazards including, without limitation,
asbestos, and neither the Seller nor, to the Seller’s knowledge, the
related Mortgagor, has received any notice of any violation or potential
violation of such law;
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(14)
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There
is no Mortgage Loan that was originated on or after October 1, 2002
through March 7, 2003 which is governed by Georgia Fair Lending
Act.
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(15)
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No
Mortgage Loan is (a) subject to the provisions of the Homeownership
and
Equity Protection Act of 1994 as amended (“HOEPA”), (b) a “high cost”
mortgage loan, “covered” mortgage loan, “high risk home” mortgage loan or
“predatory” mortgage loan or any other comparable term, no matter how
defined under any federal, state or local law, or (c) subject to
any
comparable federal, state or local statutes or regulations, or any
other
statute or regulation providing for heightened regulatory scrutiny
or
assignee liability to holders of such mortgage loans, or (d) a High
Cost
Loan or Covered Loan, as applicable (as such terms are defined in
the then
cuurent Standard & Poor’s LEVELS® Glossary Version 5.6(c) Revised,
Appendix E).
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(16)
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Each
Mortgage Loan at the time it was made complied in all material respects
with applicable local, state and federal laws, including, but not
limited
to, all applicable predatory and abusive lending
laws.
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(17)
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The
information set forth in the Mortgage Loan Schedule with respect
to
Prepayment Charges is complete, true and correct in all material
respects
and, subject to applicable federal and state law, each Prepayment
Charge
is permissible, enforceable and collectible.
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(18)
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No
Mortgage Loan Mortgage Loan is (i) a “High-Cost Home Loan” as defined in
the New Jersey Home Ownership Act effective November 27, 2003, (ii)
a
“High-Cost Home Loan” as defined in the New Mexico Home Loan Protection
Act effective January 1, 2004, (iii) a “High-Cost Home Mortgage Loan” as
defined in the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004 or (iv) a “High Cost Home Loan” as defined in the Indiana
Home Loan Practices Act effective January 1,
2005.
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(b)
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In
addition to the representations and warranties in Paragraph 4(a)
above,
with respect to the Group I Mortgage Loans, as of the date hereof
and as
of the Closing Date:
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(1)
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The
outstanding Scheduled Principal Balance of each Group I Mortgage
Loan does
not exceed the applicable maximum original loan amount limitations
with
respect to conforming, first lien one-to-four family residential
mortgage
loans as set forth in the Xxxxxxx Mac Selling
Guide.
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(2)
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To
the best of Seller’s knowledge: (a) no borrower was required to purchase
any single premium credit insurance policy (e.g., life, mortgage,
disability, accident, unemployment, or health insurance product)
or debt
cancellation agreement as a condition of obtaining the extension
of
credit; (b) no borrower obtained a prepaid single premium credit
insurance
policy (e.g., life, mortgage, disability, accident, unemployment,
or
health insurance product) in connection with the origination of the
Group
I Mortgage Loan; and (c) no proceeds from any Group I Mortgage Loan
were
used to purchase single premium credit insurance policies or debt
cancellation agreements as part of the origination of, or as a condition
to closing, such Group I Mortgage
Loan.
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(3)
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The
Servicer for each Group I Mortgage Loan has fully furnished in the
past
(and the Pooling and Servicing Agreement requires the Servicer to
so
furnish in the future), 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, on a monthly
basis.
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(4)
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With
respect to any Group I Mortgage Loan that contains a provision permitting
imposition of a Prepayment Charge upon a prepayment prior to maturity,
to
the best of the Seller’s knowledge: (i) pursuant to the Mortgage Loan
Seller’s underwriting guidelines, the borrower must agree to such a
premium in exchange for a monetary benefit, including but not limited
to a
rate or fee reduction, (ii) prior to such Group I Mortgage Loan’s
origination, the borrower was offered the option of obtaining a mortgage
loan that did not require payment of such Prepayment Charge, (iii)
the
Prepayment Charge is disclosed to the borrower in the loan documents
pursuant to applicable state and federal law, (iv) the duration of
the
prepayment period during which the Prepayment Charge may be imposed
does
not exceed three years from the date of the related Mortgage Note,
and (v)
notwithstanding any state or federal law to the contrary, the Servicer
shall not impose such Prepayment Charge in any instance when the
mortgage
debt is accelerated or paid off in connection with the workout of
a
delinquent mortgage or due to the borrower’s default.
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(5)
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With
respect to any Group I Mortgage 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.
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(6)
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To
the best of the Seller’s knowledge, no borrower was encouraged or required
to select a Group I Mortgage Loan product offered by the Mortgage
Loan
Seller which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Group I Mortgage Loan’s origination,
such borrower did not qualify taking into account credit history
and debt
to income ratios for a lower cost credit product then offered by
the
Mortgage Loan Seller or any affiliate of the Mortgage Loan Seller.
If, at
the time of loan application, the borrower may have qualified for
a lower
cost credit product then offered by any mortgage lending affiliate
of the
Mortgage Loan Seller, the Mortgage Loan Seller referred the borrower’s
application to such affiliate for underwriting
consideration.
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(7)
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To
the best of the Seller’s knowledge, the methodology used in underwriting
the extension of credit for each Group I Mortgage Loan employs objective
mathematical principles which relate the borrower’s income, assets and
liabilities to the proposed payment and such underwriting methodology
does
not rely on the extent of the borrower’s equity in the collateral as the
principal determining factor in approving such credit extension.
Such
underwriting methodology confirmed that at the time of origination
the
borrower had the reasonable ability to make timely payments on the
Group I
Mortgage Loan.
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(8)
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To
the best of the Seller’s knowledge, no borrower under a Group I Mortgage
Loan was charged “points and fees” in an amount greater than (a) $1,000 or
(b) 5.00% of the principal amount of such Group I 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 attorneys’ 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 that, in total, do not exceed 0.25 percent of the loan
amount.
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(9)
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All
fees and charges (including finance charges) and whether or not financed,
assessed, collected or to be collected in connection with the origination
and servicing of each Group I Mortgage Loan have been disclosed in
writing
to the borrower in accordance with applicable state and federal law
and
regulation.
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It
is
understood and agreed that the representations and warranties of the Seller
set
forth in this Section 4 shall survive the Closing Date. Upon the discovery
by
either the Seller or the Company of a breach of any of the foregoing
representations and warranties (excluding a breach with respect to
representation in subparagraph (a)(17) of Section 4 above) that adversely and
materially affects the value of the related Mortgage Loan and that does not
also
constitute a breach of a representation or warranty of the Mortgage Loan Seller
under the Pooling and Servicing Agreement, the party discovering the breach
shall give prompt written notice to the other. Within 30 days of the earlier
of
either discovery by or notice to the Seller of any breach of any of the
foregoing representations or warranties that materially and adversely affects
the value of any Mortgage Loan, the Seller shall use its best efforts to cure
such breach in all material respects and, if such defect or breach cannot be
remedied, the Seller shall, at the Company’s option as specified in writing and
provided to the Seller, (i) if such 30 day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan from the Trust Fund
and substitute in its place a Substitute Mortgage Loan; or (ii) repurchase
such
Mortgage Loan at the Repurchase Price. Notwithstanding the foregoing, with
respect to any of the foregoing representations and warranties made in
subparagraph (b) of this Section 4, a breach of any such representations or
warranty shall be deemed to materially and adversely affect the value of the
affected Mortgage Loan and the interests of Certificateholders therein, thus
requiring the Seller to repurchase or substitute such Mortgage Loan irrespective
of the Seller’s knowledge of the breach or violation of the representations or
warranties.
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Notwithstanding
the preceding paragraph, in connection with the Seller’s representations and
warranties made in subparagraph (a)(17) of Section 4 and within 90 days of
the
earlier of discovery by the Seller or receipt of notice from the Servicer of
a
breach of such representation and warranty by the Seller, which breach
materially and adversely affects the interests of the Class P Certificateholders
in any Prepayment Charge, the Seller shall, if (i) such representation and
warranty is breached and a Principal Prepayment has occurred or (ii) if a change
in law subsequent to the Closing Date limits the enforceability of the
Prepayment Charge, pay, at the time of such Principal Prepayment or change
in
law, the amount of the scheduled Prepayment Charge, for the benefit of the
holders of the Class P Certificates, by depositing such amount into the
Distribution Account no later than the Remittance Date immediately following
the
Prepayment Period in which such Principal Prepayment on the related Mortgage
Loan or such change in law has occurred.
5. Repurchase
and Substitution of Mortgage Loans.
In the
event the Mortgage Loan Seller fails to perform its repurchase or substitution
obligations under Section 2.03 of the Pooling and Servicing Agreement resulting
from the insolvency or financial inability of the Mortgage Loan Seller to do
so,
the Seller may, in its sole discretion, opt to undertake such repurchase or
substitution.
6. Underwriting.
The
Seller hereby agrees to furnish any and all information, documents,
certificates, letters or opinions with respect to the Mortgage Loans, reasonably
requested by the Company in order to perform any of its obligations or satisfy
any of the conditions on its part to be performed or satisfied pursuant to
the
Underwriting Agreement or the Purchase Agreement at or prior to the Closing
Date.
7. Notices.
All
demands, notices and communications hereunder shall be in writing, shall be
effective only upon receipt and shall, if sent to the Company, be addressed
to
it at HSI Asset Securitization Corporation, 000 Xxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Head MBS Principal Finance, or, if sent
to
the Seller, be addressed to it at HSBC Bank USA, National Association, 000
Xxxxx
Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Head MBS Principal Finance.
8. Miscellaneous.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated except by a writing signed by the party against
whom enforcement of such change, waiver, discharge or termination is sought.
This Agreement may be signed in any number of counterparts, each of which shall
be deemed an original, which taken together shall constitute one and the same
instrument. This Agreement shall bind and inure to the benefit of and be
enforceable by the Company and the Seller and their respective successors and
assigns.
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[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Company and the Seller have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
HSI
ASSET
SECURITIZATION CORPORATION
By:
/s/
Xxxxxx
Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Vice President
HSBC
BANK
USA, NATIONAL ASSOCIATION
By:
/s/
Xxx X.
Xxxxxxxx
Name:
Xxx
X. Xxxxxxxx
Title:
Managing Director #14311
EXHIBIT
1
Mortgage
Loan Schedule
[To
be
retained in a separate closing binder entitled “HASCO 2006-NC1 Mortgage Loan
Schedules”
at the Washington, D.C. offices of XxXxx Xxxxxx LLP]
1-1
