ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of August 28, 2006,
between Residential Funding Corporation, a Delaware corporation ("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 August 1, 2006 (the "Pooling and Servicing
Agreement"), pursuant to which the Trust proposes to issue Home Equity Mortgage
Asset-Backed Pass-Through Certificates, Series 2006-KS7 (the "Certificates")
consisting of fifteen classes designated as Class A-1, Class A-2, Class X-0,
Xxxxx X-0, Class M-1, Class M-2, Class M-3, 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 of adjustable and fixed rate one-to four-family mortgage loans identified
on Exhibit F to the Pooling and Servicing Agreement (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 and to assign certain of its rights under the Seller
Contracts to the Company, and the Company wishes to assume certain of RFC's
obligations under the Seller Contracts.
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 August 2006). In consideration of such
assignment, RFC will receive from the Company, in immediately available funds,
an amount equal to $565,675,050.35 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),
(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) None 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) As of the Cut-Off Date, approximately 0.1% of the Mortgage Loans are
currently 30 to 59 days delinquent in payment of principal and interest. As
of the Cut-Off Date, approximately 0.1% of the Mortgage Loans have been a
maximum of 30 to 59 days delinquent in payment of principal and interest in
the past 12 months. As of the Cut-Off Date, none of the Mortgage Loans are
currently 60 to 89 days delinquent in the payment of principal and interest.
As of the Cut-Off Date, approximately 0.1% of the Mortgage Loans have been a
maximum of 60 to 89 days delinquent in the payment of principal and interest
in the last 12 months. As of the Cut-Off Date, none of the Mortgage Loans are
currently 90 or more days delinquent in the payment of principal and
interest. As of the Cut-Off Date, none of the Mortgage Loans have been 90 or
more days delinquent in the payment of principal and interest in the past 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) The weighted average Loan-to-Value Ratio with respect to the Mortgage
Loans by outstanding principal balance at origination, is 81.7%.
(xviii) No more than approximately 0.3% of the Mortgage Loans, by outstanding
principal balance as of the Cut-off Date, are located in any one zip code
area in Virginia. No more than approximately 0.2% of the Mortgage Loans by
outstanding principal balance as of the Cut-off Date are located in any one
zip code area outside of Virginia.
(xix) Approximately 97.7% of the Mortgage Loans that are adjustable-rate loans
will adjust semi-annually based on Six-Month 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.
(xx) 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.
(xxi) Approximately 12.0% the Mortgaged Properties related to the Mortgage Loans
(by outstanding principal balance as of the Cut-off Date) are units in
detached planned unit developments. Approximately 1.8% of the Mortgaged
Properties related to the Mortgage Loans (by outstanding principal balance as
of the Cut-off Date) are units in attached planned unit developments.
Approximately 1.0% of the Mortgaged Properties related to the Mortgage Loans
(by outstanding principal balance as of the Cut-off Date) are units in
townhouses. None of the Mortgaged Properties related to the Mortgage Loans
(by outstanding principal balance as of the Cut-off Date) are units in
manufactured housing developments. Approximately 3.4% of the Mortgaged
Properties related to the Mortgage Loans (by outstanding principal balance as
of the Cut-off Date) are condominium units. Each Mortgaged Property is
suitable for year-round occupancy.
(xxii) Approximately 95.5% of the Mortgaged Properties related to the Mortgage
Loans (by outstanding principal balance as of the Cut-off Date) are secured
by the owner's primary residence. Approximately 1.9% of the Mortgaged
Properties related to the Mortgage Loans (by outstanding principal balance as
of the Cut-off Date) are secured by the owner's second or vacation residence.
Approximately 2.6% of the Mortgaged Properties related to the Mortgage Loans
(by outstanding principal balance as of the Cut-off Date) are secured by a
non-owner occupied residence.
(xxiii) Approximately 77.7% of the Mortgaged Properties related to the Mortgage
Loans (by outstanding principal balance as of the Cut-off Date) are secured
by detached one-family dwelling units. Approximately 4.2% of the Mortgaged
Properties related to the Mortgage Loans (by outstanding principal balance as
of the Cut-off Date) are secured by two- to four-family dwelling units.
(xxiv) The average outstanding principal balance of the Mortgage Loans at
origination was approximately $143,669. No Mortgage Loan at origination had a
principal balance of less than $9,000 or more than $731,250.
(xxv) 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.
(xxvi) 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.
(xxvii) 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.
(xxviii) 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).
(xxix) No more than 54.7% of the Mortgage Loans have been classified by RFC as
Credit Grade A4, no more than 27.3% of any Mortgage Loans have been
classified by RFC as Credit Grade A5 Mortgage Loans, no more than 10.4% of
the Mortgage Loans have been classified by RFC as Credit Grade AX Mortgage
Loans, no more than 5.2% of the Mortgage Loans have been classified by RFC as
Credit Grade AM Mortgage Loans, no more than 1.6% of the Mortgage Loans have
been classified by RFC as Credit Grade B Mortgage Loans and no more than 1.1%
of the Mortgage Loans have been classified by RFC as Credit Grade C Mortgage
Loans, in each case as described generally in the Prospectus Supplement.
(xxx) No Mortgage Loan is a graduated payment loan or has a shared appreciation
or contingent interest feature.
(xxxi) 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.
(xxxii) No Mortgage Loan provides for deferred interest or negative
amortization.
(xxxiii) None of the Mortgage Loans are buydown Mortgage Loans.
(xxxiv) 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.
(xxxv) No more than approximately 41.7% of the Mortgage Loans (by outstanding
principal balance as of the Cut-off Date) 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 Mortgage Loans for which Credit Scores are
available to RFC was approximately 612 as of the Cut-off Date.
(xxxvi) 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.
(xxxvii) The weighted average remaining term to stated maturity of the Mortgage
Loans as of the cut-off date will be approximately 354 months. The weighted
average original term to maturity of the Mortgage Loans as of the cut-off date
will be approximately 355 months.
(xxxviii) None of the Mortgage Loans are subject to the Home Ownership and
Equity Protection Act of 1994 ("HOEPA").
(xxxix) To the best of RFC's knowledge, the Subservicer for each Mortgage Loan
has accurately and fully reported its borrower credit files to each of the
Credit Repositories in a timely manner.
(xl) None of the proceeds of any Mortgage Loan were used to finance the purchase
of single premium credit insurance policies.
(xli) No Mortgage Loan has a prepayment penalty term that extends beyond five
years after the date of origination.
(xlii) Approximately 14.6% of the Mortgage Loans are Balloon Mortgage Loans.
(xliii) 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.
(xliv) The information set forth in the prepayment charge schedule attached
hereto as Exhibit A (the "Prepayment Charge Schedule") is complete, true and
correct in all material respects as of the Cut off Date, and each prepayment
charge set forth on the Prepayment Charge Schedule ("Prepayment Charge") is
enforceable and was originated in compliance with all applicable federal, state
and local laws.
(xlv) Each Mortgage Loan as of the time of its origination complied in all
material respects with all applicable local, state and federal laws, including,
but not limited to, all applicable predatory lending laws.
(xlvi) No Mortgage Loan was originated on or after November 5, 2002 and before
August 1, 2036 which is secured by property located in the State of Georgia.
(xlvii) No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as
such terms are defined in the current Appendix E of the Standard & Poor's
Glossary For File Format For LEVELS(R) Version 5.7 (attached hereto as Exhibit
B); provided that no representation and warranty is made in this clause (xlvii)
with respect to 0.4% of the Mortgage Loans and (by outstanding principal balance
as of the Cut-off Date), secured by property located in the State of Kansas or
with respect to 0.1% of the Mortgage Loans (by outstanding principal balance as
of the Cut-off Date), secured by property located in the State of West Virginia;
and provided further that no Qualified Substitute Mortgage Loan shall be a High
Cost Loan or Covered Loan (as such terms are defined in Appendix E of the
Standard & Poor's Glossary For File Format For LEVELS(R) in effect on the date
of substitution), unless the Company shall have received from S&P written
confirmation that the inclusion of any such Mortgage Loan will not adversely
affect the then current ratings assigned to any of the Certificates by S&P.
(xlviii) Each Mortgage Loan listed on the attached Exhibit C has an original
term to maturity of 360 months and an original amortization term of 480 months.
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, the Certificate Insurer 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. 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 (xlvi) 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]
Schedule A
IN WITNESS WHEREOF, the parties have entered into this Assignment and
Assumption Agreement as of the date first above written.
RESIDENTIAL FUNDING CORPORATION
By:________________________________
Name:
Title:
RESIDENTIAL ASSET SECURITIES CORPORATION
By:________________________________
Name:
Title:
SCHEDULE A
JUNIOR LIEN MORTGAGE LOANS
[SEE ATTACHMENT OR ON FILE WITH THE DEPOSITOR]
EXHIBIT A
PREPAYMENT CHARGE SCHEDULE
[SEE ATTACHMENT OR ON FILE WITH THE DEPOSITOR]
EXHIBIT B
APPENDIX E OF THE STANDARD & POOR'S GLOSSARY FOR
FILE FORMAT FOR LEVELS(R) VERSION 5.7
REVISED April 18, 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. xx.xx. 00-00-000 et seq.
Effective July 16, 2003
---------------------------------- ------------------------------------------------- ---------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Covered Loan
Code xx.xx. 757.01 et seq.
Effective June 2, 2003
---------------------------------- ------------------------------------------------- ---------------------------------
Colorado Consumer Equity Protection, Colo. Stat. Covered Loan
Xxx. xx.xx. 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.
xx.xx. 36a-746 et seq.
Effective October 1, 2001
---------------------------------- ------------------------------------------------- ---------------------------------
District of Columbia Home Loan Protection Act, D.C. Code Covered Loan
xx.xx. 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
---------------------------------- ------------------------------------------------- ---------------------------------
---------------------------------- ------------------------------------------------- ---------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
LAW/EFFECTIVE DATE APPLICABLE ANTI-
PREDATORY LENDING LAW
---------------------------------- ------------------------------------------------- ---------------------------------
Georgia (Oct. 1, 0000 - Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
Mar. 6, 2003) Xxx. xx.xx. 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. xx.xx. 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. xx.xx. 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, xx.xx. 137/5 et seq.
Effective January 1, 2004 (prior to this
date, regulations under Residential Mortgage
License Act effective from May 14,
2001)
---------------------------------- ------------------------------------------------- ---------------------------------
Kansas Consumer Credit Code, Kan. Stat. Xxx. High Loan to Value Consumer
xx.xx. 16a-1-101 et seq. Loan (id. ss. 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. xx.xx. 360.100 et seq.
Effective June 24, 2003
---------------------------------- ------------------------------------------------- ---------------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. 9- High Rate High Fee Mortgage
A, xx.xx. 8-101 et seq.
Effective September 29, 1995 and as amended
from time to time
---------------------------------- ------------------------------------------------- ---------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
LAW/EFFECTIVE DATE APPLICABLE ANTI-
PREDATORY LENDING LAW
---------------------------------- ------------------------------------------------- ---------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. xx.xx. High Cost Home Loan
32.00 et seq. and 209 C.M.R. xx.xx. 40.01 et seq.
Effective March 22, 2001 and amended from time
to time
---------------------------------- ------------------------------------------------- ---------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. Home Loan
xx.xx. 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. xx.xx. 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. xx.xx. 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. xx.xx.
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 Covered Loan
Ohio Code), Ohio Rev. Code Xxx. xx.xx.
1349.25 et seq.
Effective May 24, 2002
---------------------------------- ------------------------------------------------- ---------------------------------
Oklahoma Consumer Credit Code (codified in various Subsection 10 Mortgage
sections of Title 14A)
Effective July 1, 2000; amended effective
January 1, 2004
---------------------------------- ------------------------------------------------- ---------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
LAW/EFFECTIVE DATE APPLICABLE ANTI-
PREDATORY LENDING LAW
---------------------------------- ------------------------------------------------- ---------------------------------
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C. Code
Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- ---------------------------------
West Virginia West Virginia Residential Mortgage Lender, West Virginia Mortgage Loan Act
Broker and Servicer Act, W. Loan
Va. Code Xxx. xx.xx. 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. xx.xx. 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. xx.xx. 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. xx.xx. 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. xx.xx. 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. xx.xx. Home Loan
58-21A-1 et seq.
Effective as of January 1, 2004; Revised as of
February 26, 2004
---------------------------------- ------------------------------------------------- ---------------------------------
North Carolina Restrictions and Limitations on High Cost Home Consumer Home Loan
Loans, N.C. Gen. Stat. 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 Consumer Home Loan
Loans Act, S.C. Code Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- ---------------------------------
EXHIBIT C
LIST OF MORTGAGE LOANS WITH ORIGINAL TERM TO MATURITY
OF 360 MONTHS AND AN ORIGINAL AMORTIZATION TERM OF 480 MONTHS
[SEE ATTACHMENT OR ON FILE WITH THE DEPOSITOR]