EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of May 27, 2004, 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 JPMorgan Chase Bank, as
trustee (the "Trustee"), are entering into a Pooling and Servicing Agreement
dated as of March 1, 2004 (the "Pooling and Servicing Agreement"), pursuant to
which the Trust proposes to issue Home Equity Mortgage Asset-Backed Pass-Through
Certificates, Series 2004-KS5 (the "Certificates") consisting of twenty-one
classes designated as Class A-I-1, Class A-I-2, Class A-I-3, Class A-I-4, Class
A-I-5, Class A-I-6, Class A-II-A, Class A-II-B1, Class A-II-B2, Class A-II-B3,
Class M-I-1, Class M-I-2, Class M-I-3, Class M-II-1, Class M-II-2, Class M-II-3,
Class SB-I, Class SB-II, Class R-I, Class R-II and Class R-III representing
beneficial ownership interests solely in a trust fund consisting primarily of a
pool that will be divided into (i) the fixed rate one-to four-family mortgage
loans identified on Exhibit F-1 to the Pooling and Servicing Agreement (the
"Group I Loans"), (ii) the adjustable rate one- to four-family mortgage loans
identified on Exhibit F-2 to the Pooling and Servicing Agreement (the "Group
II-A Loans") and (iii) the adjustable rate one- to four-family mortgage loans
identified on Exhibit F-3 to the Pooling and Servicing Agreement (the "Group
II-B Loans," together with the Group II-A Loans, the "Group II Loans," and
together with the Group I Loans and Group II-A Loans, the "Mortgage Loans").
D. In connection with the purchase of the Mortgage Loans, the Company
will assign to RFC the Class SB-I, Class SB-II, Class R-I, Class R-II and Class
R-III Certificates (collectively, the "Retained Certificates"). The Class A-I-1,
Class A-I-2, Class A-I-3, Class A-I-4, Class A-I-5, Class A-I-6, Class A-II-A,
Class A-II-B1, Class A-II-B2, Class A-II-B3, Class M-I-1, Class M-I-2, Class
M-I-3, Class M-II-1, Class M-II-2 and Class M-II-3 Certificates were offered to
investors pursuant to a Prospectus Supplement dated May 20, 2004 (the
"Prospectus Supplement").
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.
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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 May 2004). In consideration of such
assignment, RFC will receive from the Company, in immediately available funds,
an amount equal to $1,170,629,539 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
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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).
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(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
(a) with respect to 0.4% of the Group I Loans and 0.2% of the Group II Loans,
for which only a title search was conducted, and (b) 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.
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(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, none of the Mortgage Loans are Delinquent in
payment of principal and interest by 30 or more days. 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) Approximately 0.2% of the Group I Loans, 0.1% of the Group II-A Loans and
0.1% of the Group II-B Loans, respectively, which have 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. The weighted average Loan-to-Value Ratio with respect to the Group I
Loans, Group II-A Loans and Group II-B Loans, in each case by outstanding
principal balance at origination, is 80.12%, 81.62% and 81.95%, respectively.
(xviii) No more than approximately 0.4%, 0.4% and 0.4% of the Group I Loans,
Group II-A Loans and the Group II-B Loans, respectively, in each case by
outstanding principal balance as of the Cut-off Date, are located in any one zip
code area in New York, California and California, respectively. No more than
approximately 0.3%, 0.4% and 0.3% of the Group I Loans, Group II-A Loans and the
Group II-B Loans, respectively, in each case by outstanding principal balance as
of the Cut-off Date, are located in any one zip code area outside of New York,
California and California, respectively.
(xix) The Mortgage Rates on the Group I Loans are fixed. The Mortgage Rates on
the Group II Loans are adjustable. All of the Group II Loans will adjust
semi-annually based on Six-Month LIBOR (as defined in the Prospectus
Supplement). Each Group II Loan 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 Group II 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
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payment on each Group II 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 the Group II 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 6.03%, 7.06% and 8.84% of the Mortgaged Properties related
to the Group I Loans, Group II-A Loans and the Group II-B Loans, respectively
(in each case by outstanding principal balance as of the Cut-off Date), are
units in detached planned unit developments. Approximately 2.94%, 3.00% and
2.45% of the Mortgaged Properties related to the Group I Loans, Group II-A Loans
and the Group II-B Loans, respectively (in each case by outstanding principal
balance as of the Cut-off Date), are units in attached planned unit
developments. Approximately 0.99%, 0.58% and 0.82% of the Mortgaged Properties
related to the Group I Loans, Group II-A Loans and the Group II-B Loans,
respectively (in each case by outstanding principal balance as of the Cut-off
Date), are units in townhouses. Approximately 2.47%, 1.42% and 1.16% of the
Mortgaged Properties related to the Group I Loans, Group II-A Loans and the
Group II-B Loans, respectively (in each case by outstanding principal balance as
of the Cut-off Date) are units in manufactured housing. Each Mortgaged Property
is suitable for year-round occupancy.
(xxii) Approximately 3.80%, 3.82% and 3.27% of the Mortgaged Properties related
to the Group I Loans, Group II-A Loans and the Group II-B Loans, respectively
(in each case by outstanding principal balance as of the Cut-off Date), are
condominium units.
(xxiii) Approximately 94.17%, 95.11% and 95.45% of the Mortgaged Properties
related to the Group I Loans, Group II-A Loans and the Group II-B Loans,
respectively (in each case by outstanding principal balance as of the Cut-off
Date) are secured by the owner's primary residence. Approximately 0.55%,0.85 %
and 1.11% of the Mortgaged Properties related to the Group I Loans, Group II-A
Loans and the Group II-B Loans, respectively (in each case by outstanding
principal balance as of the Cut-off Date) are secured by the owner's second or
vacation residence. Approximately 5.28%, 4.04% and 3.44% of the Mortgaged
Properties related to the Group I Loans, Group II-A Loans and the Group II-B
Loans, respectively (in each case by outstanding principal balance as of the
Cut-off Date) are secured by a non-owner occupied residence.
(xxiv) Approximately 78.13%, 79.09% and 79.68% of the Mortgaged Properties
related to the Group I Loans, Group II-A Loans and the Group II-B Loans,
respectively (in each case by outstanding principal balance as of the Cut-off
Date), are secured by detached one-family dwelling units. Approximately 5.56%,
5.01% and 3.78% of the Mortgaged Properties related to the Group I Loans, Group
II-A Loans and the Group II-B Loans, respectively (in each case by outstanding
principal balance as of the Cut-off Date), are secured by two- to four-family
dwelling units.
(xxv) The average outstanding principal balance of the Group I Loans at
origination was approximately $118,393. The average outstanding principal
balance of the Group II-A Loans at origination was approximately $146,736. The
average outstanding principal balance of the Group II-B Loans at origination was
approximately $146,928. No Group I Loan, Group II-A Loan or Group II-B Loan at
origination had a principal balance of less than $10,000, $30,000 and $24,000 or
more than $600,000, $420,000 and $690,000, respectively.
(xxvi) As of the Cut-off Date, all Mortgage Rate adjustments on the Group II-A
Loans and on the Group II-B 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 Regulations Section 1.860G-2(a)(1).
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(xxx) No more than 40.92% of any Group I Loans have been classified by RFC as
Credit Grade A4, no more than 45.14% of any Group I Loans have been classified
by RFC as Credit Grade AX Mortgage Loans, no more than 8.98% of the Group I
Loans have been classified by RFC as Credit Grade AM Mortgage Loans, no more
than 3.72% of the Group I Loans have been classified by RFC as Credit Grade B
Mortgage Loans, no more than 0.96% of the Group I Loans have been classified by
RFC as Credit Grade C Mortgage Loans and no more than 0.28% of the Group I Loans
have been classified by RFC as Credit Grade CM Mortgage Loans, in each case as
described generally in the Prospectus Supplement.
(xxxi) No more than 37.79% of any Group II-A Loans have been classified by RFC
as Credit Grade A4, no more than 31.38% of any Group II-A Loans have been
classified by RFC as Credit Grade AX Mortgage Loans, no more than 16.53% of the
Group II-A Loans have been classified by RFC as Credit Grade AM Mortgage Loans,
no more than 9.34% of the Group II-A Loans have been classified by RFC as Credit
Grade B Mortgage Loans, no more than 3.61% of the Group II-A Loans have been
classified by RFC as Credit Grade C Mortgage Loans and no more than 1.36% of the
Group II-A Loans have been classified by RFC as Credit Grade CM Mortgage Loans,
in each case as described generally in the Prospectus Supplement.
(xxxii) No more than 39.18% of any Group II-B Loans have been classified by RFC
as Credit Grade A4, no more than 32.37% of any Group II-B Loans have been
classified by RFC as Credit Grade AX Mortgage Loans, no more than 15.88% of the
Group II-B Loans have been classified by RFC as Credit Grade AM Mortgage Loans,
no more than 7.43% of the Group II-B Loans have been classified by RFC as Credit
Grade B Mortgage Loans, no more than 3.68% of the Group II-B Loans have been
classified by RFC as Credit Grade C Mortgage Loans and no more than 1.45% of the
Group II-B Loans have been classified by RFC as Credit Grade CM Mortgage Loans,
in each case as described generally in the Prospectus Supplement.
(xxxiii) No Mortgage Loan is a graduated payment loan or has a shared
appreciation or contingent interest feature.
(xxxiv) 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.
(xxxv) No Mortgage Loan provides for deferred interest or negative amortization.
(xxxvi) None of the Mortgage Loans are buydown Mortgage Loans.
(xxxvii) 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.
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(xxxviii) No more than approximately 21.13%, 40.07% and 36.76% of the Group I
Loans, Group II-A Loans and the Group II-B Loans, respectively (in each case 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 Group I Loans, the Group II-A
Loans and the Group II-B Loans for which Credit Scores are available to RFC was
approximately 636, 611 and 612, respectively, as of the Cut-off Date.
(xxxix) 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.
(xl) The weighted average remaining term to stated maturity of the Group I
Loans, Group II-A Loans and the Group II-B Loans, respectively, as of the
cut-off date will be approximately 334, 359 and 359 months. The weighted average
original term to maturity of the Group I Loans, Group II-A Loans and the Group
II-B Loans, respectively, as of the cut-off date will be approximately 335, 360
and 360 months.
(xli) None of the Mortgage Loans are subject to the Home Ownership and Equity
Protection Act of 1994 ("HOEPA").
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(xlii) 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.
(xliii) None of the proceeds of any Mortgage Loan were used to finance the
purchase of single premium credit insurance policies.
(xliv) No Group I Loan or Group II-B Loan has a prepayment penalty term that
extends beyond five years after the date of origination. No Group II-A Loan has
a prepayment penalty term that extends beyond three years after the date of
origination.
(xlv) Approximately 3.2% of the Group I Loans are Balloon Mortgage Loans.
(xlvi) With the exception of loans secured by property in the state of New
Jersey, none of the Mortgage Loans are loans that are referred to as "high cost"
or "covered" loans or any other similar designation under applicable state or
local law in effect at the time of origination of such loan that expressly
provides for assignee liability. None of the Mortgage Loans secured by property
in the state of New Jersey are considered "high-cost home loans" under the New
Jersey Home Ownership Security Act of 2002. None of the non-purchase money loans
secured by property in the state of New Jersey are considered "covered home
loans" under the New Jersey Home Ownership Act of 2002.
(xlvii) 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.
(xlviii) 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.
(xlix) 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.
(l) The principal balance at origination for each Group II-A Mortgage Loan that
is secured by a single family property located in any state other than the
States of Alaska or Hawaii did not exceed $333,700. The principal balance at
origination for each Group II-A Mortgage Loan that is secured by a single family
property located in the States of Hawaii or Alaska did not exceed $500,550. The
principal balance at origination for each Group II-A Mortgage Loan that is
secured by a two-, three- or four- family property located in any state other
than the States of Alaska or Hawaii did not exceed $427,150, $516,300 or
$641,650, respectively. The principal balance at origination for each Group II-A
Mortgage Loan that is secured by a two-, three- or four- family property located
in the States of Hawaii or Alaska did not exceed $640,725, $774,450 and
$962,475, respectively.
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
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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 clause (xli),
(xlii), (xliii), (xliv), (xlvi), (xlix) or (l) of this Section 4 with respect to
any Group II-A 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
(xlvii) 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. Concurrently with the execution and delivery hereof, RFC hereby assigns to
the Company, and the Company hereby assumes, all of RFC's rights and obligations
under the Seller Contracts with respect to the Mortgage Loans to be serviced
under the Pooling and Servicing Agreement, insofar as such rights and
obligations relate to (a) any representations and warranties regarding a
Mortgage Loan made by a Seller under any Seller Contract and any remedies
available under the Seller Contract for a breach of any such representations and
warranties if (i) the substance of such breach also constitutes fraud in the
origination of the Mortgage Loan or (ii) the representation and warranty relates
to the absence of toxic materials or other environmental hazards that could
affect the Mortgaged Property, or (b) the Seller's obligation to deliver to RFC
the documents required to be contained in the Mortgage File and any rights and
remedies available to RFC under the Seller Contract in respect of such
obligation or in the event of a breach of such obligation; provided that,
notwithstanding the assignment and assumption hereunder, RFC shall have the
10
concurrent right to exercise remedies and pursue indemnification upon a breach
by a Seller under any Seller Contract of any of its representations and
warranties. If the Company or RFC asserts that it is not required to cure
breaches or to purchase or substitute for Mortgage Loans under the Pooling and
Servicing Agreement because the substance of the breach also constitutes fraud
in the origination of any Mortgage Loan, then the substance of the related
breach shall automatically be deemed to constitute fraud in the origination of a
Mortgage Loan for purposes of clause (i) of this Section 6.
7. 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.
8. 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.
9. 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.
[Signatures begin on following page.]
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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: Xxxxx Xxxxxxxxxx
Title: Managing Director
RESIDENTIAL ASSET SECURITIES CORPORATION
By:________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
