MORTGAGE LOAN PURCHASE AGREEMENT
EXECUTION
This
Mortgage Loan Purchase Agreement (the “Agreement”), dated as of May 1, 2007, is
between HSI Asset Securitization Corporation, a Delaware corporation (the
“Company”), and HSBC Bank USA, National Association, a national banking
association (the “Seller”).
WHEREAS,
the Seller, pursuant to that certain Amended and Restated Master Mortgage
Loan
Purchase and Interim Servicing Agreement, dated March 1, 2006, by and between
the Seller, as purchaser and NC Capital Corporation, as seller (the “Mortgage
Loan Seller”) (the “Transfer Agreement”), has purchased certain mortgage loans,
each identified on the Mortgage Loan Schedule attached hereto as part of
Exhibit
1 (collectively, the “Mortgage Loans”);
NOW,
THEREFORE, in consideration of the mutual agreements herein set forth, and
for
other good and valuable consideration, the receipt and adequacy of which
are
hereby acknowledged, the Seller and the Company 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 May 1, 2007 (the
“Pooling and Servicing Agreement”), by and among HSI Asset Securitization
Corporation, as depositor, Xxxxx Fargo Bank, N.A., as master servicer,
securities administrator and custodian (in such capacity, the “Custodian”),
OfficeTiger Global Real Estate Services Inc., as credit risk manager, and
Deutsche Bank National Trust Company, as trustee (the “Trustee”),
relating to the issuance of the HSI Asset Securitization Corporation Trust
2007-NC1 Mortgage Pass-Through Certificates, Series 2007-NC1. 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 without recourse, 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
$1,029,013,149.07 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.
Concurrently
with the execution and delivery of this Agreement, the Seller hereby assigns
to
the Company all of its rights and interest (but none of its obligations)
under
the (i) Servicing Agreements and (ii) the Transfer Agreement attached as
Exhibit
2 hereto (the “Transfer Agreement”), to the extent relating to the Mortgage
Loans. The Company hereby accepts such assignment, and shall be entitled
to
exercise all such rights of the Seller under the Servicing Agreements and
the
Transfer Agreement as if the Company had been a party to such
agreement.
The
Company hereby acknowledges its acceptance of all right, title and interest
in,
to and under the Mortgage Loans and other property, and its rights under
the
Servicing Agreements and the Transfer Agreement, now existing or hereafter
created, conveyed to it pursuant to this Section 3.
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, 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 29 days past due, there
has
been no delinquency greater than 29 days 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 Cut-off 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 Cut-off 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 Custodian; 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 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 prudent mortgage lending institutions in the secondary mortgage
market
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) either (A) the outstanding principal balance of the
Mortgage Loan with respect to each first lien Mortgage Loan or
(B) with respect to each second lien Mortgage Loan, the sum of the
outstanding principal balance of the related first lien Mortgage
Loan and
the outstanding principal balance of the second lien 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
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 is acceptable to prudent
mortgage
lending institutions in the secondary mortgage market. 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 (except
to a
senior Mortgage in the case of a Mortgage that is a second lien)
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 or second 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 originator of the Mortgage Loan and which do not adversely
affect
the appraised value of the Mortgaged Property, (c) to the extent the
Mortgage Loan is a second lien Mortgage Loan (as reflected on the
Mortgage
Loan Schedule), the related first lien on the Mortgaged Property;
and
(d) 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 or second lien and first or second 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 date the Mortgage Loan was purchased by the Seller
from the
Mortgage Loan Seller (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 Company 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. With respect to each second lien Mortgage Loan, (i) the
first lien Mortgage Loan is in full force and effect, (ii) there is
no default, breach, violation or event of acceleration existing
under such
first lien Mortgage or the related Mortgage Note, (iii) 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 thereunder, (iv) either (A) the first lien
Mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the second lien Mortgage Loan to
receive
notice of, and affords such mortgagee an opportunity to cure any
default
by payment in full or otherwise under the first lien Mortgage,
(v) the related first lien does not provide for or permit negative
amortization under such first lien Mortgage Loan, and (vi) either no
consent for the Mortgage Loan is required by the holder of the
first lien
or such consent has been obtained and is contained in the Mortgage
File;
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(11)
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From
and after the Cut-off Date, except as insured against by the related
title
insurance, 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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From
and after the Cut-off Date, 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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To
the Seller’s knowledge, 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 and
before March 7, 2003, which is secured by property located in the
state of
Georgia. There is no Mortgage Loan that was originated on or after
March
7, 2003, which is a “high cost home loan” as defined under the Georgia
Fair Lending Act;
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(15)
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No
Mortgage Loan is (a) (1) subject to the provisions of the Homeownership
and Equity Protection Act of 1994 as amended (“HOEPA”) or (2) is in
violation of any state law or ordinance similar to HOEPA or (3)
has an
“annual percentage rate” or “total points and fees” (as each such term is
defined under HOEPA) payable by the Mortgagor that exceed the applicable
thresholds defined under HOEPA (as defined in 12 CFR 226.32 (a)(1)(i)
and
(ii)), (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 current version of Standard & Poor’s
LEVELS® Glossary;
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(16)
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Each
Mortgage Loan, and any prepayment penalty associated with such
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 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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(19)
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All
parties which have had any interest in the Mortgage Loan, whether
as
mortgagee, assignee, pledgee or otherwise, are (or, during the
period in
which they held and disposed of such interest, were) in compliance
with
any and all applicable “doing business” and licensing requirements of the
laws of the state wherein the Mortgaged Property is located or
were not
required to be licensed in such
state;
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(20)
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The
Mortgage Loan is covered by an American Land Title Association
(“ALTA”)
lender’s title insurance policy (which, in the case of an Adjustable Rate
Mortgage Loan has an adjustable rate mortgage endorsement in the
form of
ALTA 6.0 or 6.1), acceptable to prudent lending institutions in
the
secondary mortgage market and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the
exceptions contained in (8)(a) through (d) above) the originator,
its
successors and assigns as to the first or second (as indicated
on the
related Mortgage Loan Schedule) priority lien of the Mortgage in
the
original principal amount of the Mortgage Loan and, with respect
to any
Adjustable Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions
of the Mortgage providing for adjustment in the mortgage interest
rate and
monthly payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property
or
any interest therein. The originator (or its predecessor in interest)
is
the sole insured of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect and will be
in
full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under
such
lender’s title insurance policy, and no prior holder of the related
Mortgage, including the originator, has done, by act or omission,
anything
which would impair the coverage of such lender’s title insurance
policy;
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(21)
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The
Mortgaged Property is lawfully occupied under applicable law;
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(22)
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The
Seller has no knowledge of any circumstances or condition with
respect to
the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s
credit standing that can reasonably be expected to cause the Mortgage
Loan
to become delinquent; and
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(23)
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At
time of origination, no improvement located on or being part of
the
Mortgaged Property was in violation of any applicable zoning and
subdivision laws or ordinances.
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(b) In
addition to the representations and warranties of the Seller set forth in
Section 4(a) above, the Seller hereby represents and warrants to the Company
the
representations and warranties with respect to each Mortgage Loan as set
forth
in the Transfer Agreement and listed in Exhibit 3 hereto are true and correct
as
of the Initial Sale Date or such other date as may be specified on Exhibit
3
hereto.
7
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 the
representation made in subparagraph (a)(17) of Section 4 above) that adversely
and materially affects the value of the related Mortgage Loan, 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 clauses (14), (15) and (16) of
subparagraph (a) of this Section 4, a breach of any such representation 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 representation or
warranty.
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 applicable
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 the Transfer Agreement resulting from the insolvency or
financial inability of the Mortgage Loan Seller to do so, the Seller shall
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
Purchase Agreement or the underwriting agreement dated June 4, 2007, among
the
Company, the Seller, HSBC Securities (USA) Inc., Xxxxxxx Capital Markets,
LLC
and Xxxxxxxx Capital Partners, L.P. at or prior to the Closing
Date.
8
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.
[SIGNATURE
PAGE FOLLOWS]
9
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/
Xxxx
Xxxxx
Name:
Xxxx Xxxxx
Title:
Officer #15252
EXHIBIT
1
Mortgage
Loan Schedule
[To
be
retained in a separate closing binder entitled “HASCO 2007-NC1 Mortgage Loan
Schedules” at the Washington, D.C. offices of XxXxx Xxxxxx LLP]
I-1
EXHIBIT
2
Transfer
Agreement
Amended
and Restated Master Mortgage Loan Purchase and Interim Servicing Agreement,
dated March 1, 2006, by and between HSBC Bank USA, National Association,
as
purchaser and NC Capital Corporation, as seller.
II-1
EXHIBIT
3
Representations
and Warranties of HSBC Bank USA, National Association
as
to
the Individual Mortgage Loans
HSBC
Bank
USA, National Association hereby makes the representations and warranties
set
forth in this Exhibit 3 as to the Mortgage Loans, to the Depositor as of
the
Initial Sale Date or such other date as may be specified below. Capitalized
terms used but not otherwise defined in this Agreement (including this Exhibit
3) shall have the meanings ascribed thereto in the Amended and Restated Master
Mortgage Loan Purchase and Interim Servicing Agreement, dated March 1, 2006,
by
and between HSBC Bank USA, National Association, as purchaser and NC Capital
Corporation, as seller.
(1) The
information set forth in the related Mortgage Loan Schedule is complete,
true
and correct in all material respects as of the Cut-Off Date, unless another
date
is set forth in the Mortgage Loan Schedule;
(2) The
Mortgage Loan is in compliance with all requirements set forth in the related
Confirmation, and the characteristics of the related Mortgage Loan Package
as
set forth in the related Confirmation are true and correct.
(3) All
payments required to be made up to the close of business on the Closing Date
for
such Mortgage Loan under the terms of the Mortgage Note have been made; neither
the Mortgage Loan Seller nor the Interim Servicer has advanced funds, or
induced, solicited or knowingly received any advance of funds from a party
other
than the owner of the related Mortgaged Property, directly or indirectly,
for
the payment of any amount required by the Mortgage Note or Mortgage (except
for
interest accruing from the date of the Mortgage Note or the date of disbursement
of the Mortgage proceeds, whichever is greater, to the day which precedes
by one
month the Due Date of the first installment of principal and interest); and
there has been no delinquency in excess of thirty (30) days, exclusive of
any
period of grace, in any payment by the Mortgagor thereunder since the
origination of the Mortgage Loan;
(4) There
are
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;
(5) 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, or in the
process of being recorded, in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage, and which have been
delivered or will be delivered to the Custodian on behalf of the Purchaser;
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 Mortgagor 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;
III-1
(6) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will
the
operation of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage unenforceable, in whole
or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(7) All
buildings upon the Mortgaged Property are insured by an insurer acceptable
to
FNMA and FHLMC 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% of the replacement cost
of all
improvements to the Mortgaged Property, (ii) either (A) the outstanding
principal balance of the Mortgage Loan with respect to each first lien Mortgage
Loan or (B) with respect to each second lien Mortgage Loan, the sum of the
outstanding principal balance of the related first lien mortgage loan and
the
outstanding principal balance of the second lien Mortgage Loan, (iii) the
amount
necessary to avoid the operation of any co-insurance provisions with respect
to
the Mortgaged Property, 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 Interim Servicer, 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 Mortgagor thereunder to maintain all
such
insurance at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor’s cost and expense and to seek reimbursement therefor from the
Mortgagor;
(8) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement procedures,
predatory and abusive lending, consumer credit protection, equal credit
opportunity, fair housing or disclosure laws applicable to the origination
and
servicing of mortgage loans of a type similar to the Mortgage Loans have
been
complied with;
(9) 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;
III-2
(10) The
Mortgage (including any Negative Amortization which may arise thereunder)
is a
valid, existing and enforceable first or second (as indicated on the Mortgage
Loan Schedule) lien 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 originator of the Mortgage Loan and which do not adversely
affect the Appraised Value of the Mortgaged Property, (c) to the extent the
Mortgage Loan is a second lien Mortgage Loan, the related first lien on the
Mortgaged Property; and (d) 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
or
second (as indicated on the Mortgage Loan Schedule) lien and first or second
(as
indicated on the Mortgage Loan Schedule) priority security interest on the
property described therein and the Mortgage Loan Seller has full right to
sell
and assign the same to the Purchaser. The Mortgaged Property was not, as
of the
date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust,
deed to secure debt or other security instrument creating a lien subordinate
to
the lien of the Mortgage;
(11) The
Mortgage Note and the related Mortgage are genuine and each is the legal,
valid
and binding obligation of the maker thereof, enforceable in accordance with
its
terms, except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of
creditors’ rights generally and by law;
(12) All
parties to the Mortgage Note and the Mortgage had legal capacity to enter
into
the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage,
and the Mortgage Note and the Mortgage have been duly and properly executed
by
such parties. The Mortgagor is a natural person;
(13) The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor and there is no obligation for the Mortgagee to advance additional
funds thereunder and any and all requirements as to completion of any on-site
or
off-site improvement and as to disbursements of any escrow funds therefor
have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage have been paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due to the
Mortgagee pursuant to the Mortgage Note or Mortgage;
(14) Immediately
prior to the transfer and assignment herein contemplated, the Mortgage Loan
Seller was the sole legal, beneficial and equitable owner of the Mortgage
Note
and the Mortgage. Mortgage Loan 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;
III-3
(15) All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they
held
and disposed of such interest, were) in compliance with any and all applicable
“doing business” and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;
(16) The
Mortgage Loan is covered by an American Land Title Association (“ALTA”) lender’s
title insurance policy (which, in the case of an Adjustable Rate Mortgage
Loan
has an adjustable rate mortgage endorsement in the form of ALTA 6.0 or 6.1)
issued by a title insurer acceptable to the Underwriting Guidelines and
qualified to do business in the jurisdiction where the Mortgaged Property
is
located, insuring (subject to the exceptions contained in (x)(a) and (b)
and
with respect to any second lien Mortgage Loan (c) above) the Mortgage Loan
Seller, its successors and assigns as to the first or second (as indicated
on
the related Mortgage Loan Schedule) priority lien of the Mortgage in the
original principal amount of the Mortgage Loan (including, if the Mortgage
Loan
provides for amortization, the maximum amount of Negative Amortization in
accordance with the Mortgage) and, with respect to any Adjustable Rate Mortgage
Loan, against any loss by reason of the invalidity or unenforceability of
the
lien resulting from the provisions of the Mortgage providing for adjustment
in
the Mortgage Interest Rate and Monthly Payment and Negative Amortization
provisions of the Mortgage Note. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property or
any
interest therein. The Interim Servicer is the sole insured of such lender's
title insurance policy, and such lender’s title insurance policy is in full
force and effect and will be in full force and effect upon the consummation
of
the transactions contemplated by this Agreement. No claims have been made
under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Mortgage Loan Seller, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;
(17) There
is
no default, breach, violation or event of acceleration existing under the
Mortgage or the Mortgage Note and, to Mortgage Loan Seller’s or Interim
Servicer’s knowledge, 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 Mortgage Loan Seller
has not
waived any default, breach, violation or event of acceleration. With respect
to
each second lien Mortgage Loan (i) the first lien mortgage loan is in full
force
and effect, (ii) there is no default, breach, violation or event of acceleration
existing under such first lien mortgage or the related mortgage note, (iii)
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 thereunder, (iv) either (A) the first lien mortgage contains
a
provision which allows or (B) applicable law requires, the mortgagee under
the
second lien Mortgage Loan to receive notice of, and affords such mortgagee
an
opportunity to cure any default by payment in full or otherwise under the
first
lien mortgage, (v) the related first lien does not provide for or permit
negative amortization under such first lien Mortgage Loan, and (vi) either
no
consent for the Mortgage Loan is required by the holder of the first lien
or
such consent has been obtained and is contained in the Mortgage
File;
III-4
(18) There
are
no mechanics’ or similar liens or claims which 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;
(19) As
of the
date of origination of the Mortgage Loan, all improvements which were considered
in determining the Appraised Value of the related Mortgaged Property lay
wholly
within the boundaries and building restriction lines of the Mortgaged Property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property;
(20) The
Mortgage Loan was originated by the Interim Servicer or by a savings and
loan
association, a savings bank, a commercial bank or similar banking institution
which is supervised and examined by a federal or state authority, or by a
mortgagee approved as such by the Secretary of HUD;
(21) Principal
payments on the Mortgage Loan shall commence (with respect to newly originated
Mortgage Loans) or commenced no more than sixty days after the proceeds of
the
Mortgage Loan were disbursed. The Mortgage Loan bears interest at the Mortgage
Interest Rate. With respect to each Mortgage Loan which is not a Negative
Amortization Loan, the Mortgage Note is payable on the first day of each
month
in Monthly Payments, which, in the case of a Fixed Rate Mortgage Loans, are
sufficient to fully amortize the original principal balance over the original
term thereof (other than with respect to a Mortgage Loan identified on the
related Mortgage Loan Schedule as an interest-only Mortgage Loan during the
interest-only period or a Mortgage Loan which is identified on the related
Mortgage Loan Schedule as a Balloon Mortgage Loan) and to pay interest at
the
related Mortgage Interest Rate, and, in the case of an Adjustable Rate Mortgage
Loan, are changed on each Adjustment Date, and in any case, are sufficient
to
fully amortize the original principal balance over the original term thereof
(other than with respect to a Mortgage Loan identified on the related Mortgage
Loan Schedule as an interest-only Mortgage Loan during the interest-only
period
or a Mortgage Loan which is identified on the related Mortgage Loan Schedule
as
a Balloon Mortgage Loan) and to pay interest at the related Mortgage Interest
Rate. With respect to each Negative Amortization Mortgage Loan, the related
Mortgage Note requires a Monthly Payment which is sufficient during the period
following each Payment Adjustment Date, to fully amortize the outstanding
principal balance as of the first day of such period (including any Negative
Amortization) over the then remaining term of such Mortgage Note and to pay
interest at the related Mortgage Interest Rate; provided, that the Monthly
Payment shall not increase to an amount that exceeds 107.5% of the amount
of the
Monthly Payment that was due immediately prior to the Payment Adjustment
Date;
provided, further, that the payment adjustment cap shall not be applicable
with
respect to the adjustment made to the Monthly Payment that occurs in a year
in
which the Mortgage Loan has been outstanding for a multiple of 5 years and
in
any such year the Monthly Payment shall be adjusted to fully amortize the
Mortgage Loan over the remaining term. With respect to each Mortgage Loan
identified on the Mortgage Loan Schedule as an interest-only Mortgage Loan,
the
interest-only period shall not exceed ten (10) years (or such other period
specified on the Mortgage Loan Schedule) and following the expiration of
such
interest-only period, the remaining Monthly Payments shall be sufficient
to
fully amortize the original principal balance over the remaining term of
the
Mortgage Loan. With respect to each Balloon Mortgage Loan, the Mortgage Note
requires a monthly payment which is sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate and requires a final Monthly Payment
substantially greater than the preceding monthly payment which is sufficient
to
repay the remained unpaid principal balance of the Balloon Mortgage Loan
as the
Due Date of such monthly payment. The Index for each Adjustable Rate Mortgage
Loan is as defined in the related Confirmation. No Mortgage Loan is a
Convertible Mortgage Loan;
III-5
(22) The
origination, servicing and collection practices used by the Interim Servicer
with respect to each Mortgage Note and Mortgage including, without limitation,
the establishment, maintenance and servicing of the Escrow Accounts and Escrow
Payments, if any, since origination, have been in all respects legal, proper,
prudent and customary in the mortgage origination and servicing industry.
The
Mortgage Loan has been serviced by the Interim Servicer and any predecessor
servicer in accordance with the terms of the Mortgage Note. With respect
to
escrow deposits and Escrow Payments (other than with respect to each Mortgage
Loan which is indicated by the Interim Servicer to be a second lien Mortgage
Loan and for which the mortgagee under the first lien is collecting Escrow
Payments), if any, all such payments are in the possession of, or under the
control of, the Interim Servicer and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not
been
made. No escrow deposits or Escrow Payments or other charges or payments
due the
Interim Servicer have been capitalized under any Mortgage or the related
Mortgage Note and no such escrow deposits or Escrow Payments are being held
by
the Interim Servicer for any work on a Mortgaged Property which has not been
completed;
(23) The
Mortgaged Property is free of material damage and waste and there is no
proceeding pending for the total or partial condemnation thereof;
(24) The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (a) in the case of a Mortgage designated as
a deed
of trust, by trustee’s sale, and (b) otherwise by judicial or non-judicial
foreclosure. 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 that would materially interfere with
the
right to sell the Mortgaged Property at a trustee’s sale or the right to
foreclose the Mortgage subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and rights of redemption. The Mortgagor
has
not notified the Mortgage Loan Seller and the Mortgage Loan Seller has no
knowledge of any relief requested by the Mortgagor under the Servicemembers
Civil Relief Act;
III-6
(25) The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
in
effect at the time the Mortgage Loan was originated; and the Mortgage Note
and
Mortgage are on forms acceptable to prudent mortgage lending institutions
in the
secondary market;
(26) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage on the Mortgaged Property and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(x) above;
(27) The
Mortgage File contains an appraisal of the related Mortgaged Property which
was
on appraisal form 1004 or form 2055 with an interior inspection and was made
and
signed, prior to the approval of the Mortgage Loan application, by a qualified
appraiser, duly appointed by the Mortgage Loan Seller or the Interim Servicer,
who had no interest, direct or indirect in the Mortgaged Property or in any
loan
made on the security thereof, whose compensation is not affected by the approval
or disapproval of the Mortgage Loan and who met the minimum qualifications
of
FNMA and FHLMC. Each appraisal of the Mortgage Loan was made in accordance
with
the relevant provisions of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989;
(28) In
the
event the Mortgage constitutes 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 the Mortgage, and no fees or expenses are or will
become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
(29) No
Mortgage Loan contains provisions pursuant to which Monthly Payments are
(a)
paid or partially paid with funds deposited in any separate account established
by the Mortgage Loan Seller, the Interim Servicer, the Mortgagor, or anyone
on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor
or (c)
contains any other similar provisions which may constitute a “buydown”
provision. The Mortgage Loan is not a graduated payment mortgage loan and
the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(30) The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by applicable law with respect to the making
of fixed rate mortgage loans in the case of Fixed Rate Mortgage Loans, and
adjustable rate mortgage loans in the case of Adjustable Rate Mortgage Loans
and
rescission materials with respect to Refinanced Mortgage Loans, and such
statement is and will remain in the Mortgage File;
(31) No
Mortgage Loan was made in connection with (a) the construction or rehabilitation
of a Mortgaged Property or (b) facilitating the trade-in or exchange of a
Mortgaged Property;
(32) Neither
the Mortgage Loan Seller nor the Interim Servicer has knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged Property,
the Mortgagor or the Mortgagor’s credit standing that can reasonably be expected
to cause the Mortgage Loan to be an unacceptable investment, or cause the
Mortgage Loan to become delinquent, in each instance, taking into account
the
relative Underwriting Guidelines applicable to the related
Mortgagor;
III-7
(33) No
Mortgage Loan had an LTV or CLTV at origination in excess of 100%;
(34) As
of the
related Closing Date, the Mortgaged Property is lawfully occupied under
applicable law; all inspections, licenses and certificates required to be
made
or issued with respect to all occupied portions of the Mortgaged Property
and,
with respect to the use and occupancy of the same, including but not limited
to
certificates of occupancy, have been made or obtained from the appropriate
authorities;
(35) No
error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to the origination, modification or amendment of a Mortgage Loan
has
taken place on the part of any person, including without limitation the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;
(36) The
Assignment of Mortgage is in recordable form, except for the name of the
assignee which is blank, and is acceptable for recording under the laws of
the
jurisdiction in which the Mortgaged Property is located;
(37) Any
principal advances made to the Mortgagor after the date of origination of
the
Mortgage Loan but prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second (as indicated on the Mortgage Loan Schedule)
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable
to
FNMA or FHLMC. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan plus any Negative
Amortization;
(38) If
the
Residential Dwelling on the Mortgaged Property is a condominium unit or a
unit
in a planned unit development (other than a de minimis planned unit development)
such condominium or planned unit development project meets the eligibility
requirements of the Underwriting Guidelines;
(39) To
the
extent required by the Underwriting Guidelines, the source of the down payment
with respect to each Mortgage Loan has been fully verified by the Mortgage
Loan
Seller or Interim Servicer;
(40) Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months;
III-8
(41) The
Mortgaged Property is in material compliance with all applicable environmental
laws pertaining to environmental hazards including, without limitation,
asbestos, and neither the Mortgage Loan Seller, the Interim Servicer nor,
to the
Mortgage Loan Seller’s or the Interim Servicer’s knowledge, the related
Mortgagor, has received any notice of any violation or potential violation
of
such law;
(42) The
Mortgage Loan Seller shall, at its own expense, cause each Mortgage Loan
to be
covered by a Tax Service Contract which is assignable to the Purchaser or
its
designee; provided however, that if the Mortgage Loan Seller fails to purchase
such Tax Service Contract, the Mortgage Loan Seller shall be required to
reimburse the Purchaser for all costs and expenses incurred by the Purchaser
in
connection with the purchase of any such Tax Service Contract;
(43) Each
Mortgage Loan is covered by a Flood Zone Service Contract which is assignable
to
the Purchaser or its designee or, for each Mortgage Loan not covered by such
Flood Zone Service Contract, the Mortgage Loan Seller agrees to purchase
such
Flood Zone Service Contract;
(44) As
of the
related Closing Date, 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 applicable Standard &
Poor’s LEVELS® Glossary Revised, Appendix E);
(45) No
predatory, abusive or deceptive lending practices, including but not limited
to,
the extension of credit to a mortgagor without regard for the mortgagor’s
ability to repay the Mortgage Loan and the extension of credit to a mortgagor
which has no apparent benefit to the mortgagor, were employed in connection
with
the origination of the Mortgage Loan;
(46) The
debt-to-income ratio of the related Mortgagor was not greater than 55% at
the
origination of the related Mortgage Loan;
(47) No
Mortgagor was required to purchase any credit insurance product (e.g., life,
mortgage, disability, accident, unemployment or health insurance product)
or
debt cancellation agreement as a condition of obtaining the extension of
credit.
No Mortgagor obtained a prepaid single premium credit life, mortgage,
disability, accident, unemployment or health insurance product in connection
with the origination of the Mortgage Loan. No proceeds from any Mortgage
Loan
were used to purchase single premium credit insurance policies as part of
the
origination of, or as a condition to closing, such Mortgage
Loan;
III-9
(48) The
Mortgage Loans were not selected from the outstanding one to four-family
mortgage loans in the Mortgage Loan Seller’s portfolio at the related Closing
Date as to which the representations and warranties set forth in this Agreement
could be made in a manner so as to affect adversely the interests of the
Purchaser;
(49) The
Mortgage contains a provision for the acceleration of the payment of the
unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder;
(50) The
Mortgage Loan complies with all applicable consumer credit statutes and
regulations, including, without limitation, the respective Uniform Consumer
Credit Code laws in effect in Alabama, Colorado, Idaho, Indiana, Iowa, Kansas,
Maine, Oklahoma, South Carolina, Utah, West Virginia and Wyoming, has been
originated by a properly licensed entity, and in all other respects, complies
with all of the material requirements of any such applicable laws;
(51) The
information set forth in the Prepayment Charge Schedule is complete, true
and
correct in all material respects and, subject to applicable federal and state
law, each Prepayment Charge is permissible, enforceable and
collectable;
(52) The
Mortgage Loan was not prepaid in full prior to the Closing Date and neither
the
Mortgage Loan Seller nor the Interim Servicer has received notification from
a
Mortgagor that a prepayment in full shall be made after the Closing
Date;
(53) No
Mortgage Loan is secured by cooperative housing, commercial property or mixed
use property;
(54) Except
as
set forth on the related Mortgage Loan Schedule, none of the Mortgage Loans
are
subject to a prepayment penalty. For any Mortgage Loan originated prior to
October 1, 2002 that is subject to a prepayment penalty, such prepayment
penalty
does not extend beyond five years after the date of origination. For any
Mortgage Loan originated on or following October 1, 2002 that is subject
to a
prepayment penalty, such prepayment penalty does not extend beyond three
years
after the date of origination. With respect to any Mortgage Loan that contains
a
provision permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to the Mortgage Loan’s origination, the Mortgagor agreed to
such premium in exchange for a monetary benefit, including but not limited
to a
rate or fee reduction, (ii) prior to the Mortgage Loan’s origination, the
Mortgagor was offered the option of obtaining a Mortgage Loan that did not
require payment of such a premium, (iii) the prepayment premium is disclosed
to
the Mortgagor in the loan documents pursuant to applicable state and federal
law, and (iv) notwithstanding any state or federal law to the contrary, the
Interim Servicer shall not impose such prepayment premium in any instance
when
the mortgage debt is accelerated as the result of the Mortgagor’s default in
making the loan payments;
(55) The
Mortgage Loan Seller and the Interim Servicer have complied with all applicable
anti-money laundering laws and regulations, including without limitation
the USA
Patriot Act of 2001 (collectively, the “Anti-Money
Laundering Laws”);
the
Mortgage Loan Seller and the Interim Servicer have established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws,
have conducted the requisite due diligence in connection with the origination
of
each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including
with respect to the legitimacy of the applicable Mortgagor and the origin
of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws. No Mortgage Loan
is
subject to nullification pursuant to Executive Order 13224 (the “Executive
Order”)
or the
regulations promulgated by the Office of Foreign Assets Control of the United
States Department of the Treasury (the “OFAC
Regulations”)
or in
violation of the Executive Order or the OFAC Regulations, and no Mortgagor
is
subject to the provisions of such Executive Order or the OFAC Regulations
nor
listed as a “blocked person” for purposes of the OFAC
Regulations;
III-10
(56) No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Mortgage Loan Seller or Interim Servicer which is a higher cost product
designed for less creditworthy borrowers, unless at the time of the Mortgage
Loan’s origination, such Mortgagor 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 Mortgagor may have qualified for a for
a lower
cost credit product then offered by any mortgage lending affiliate of the
Mortgage Loan Seller, the Mortgage Loan Seller referred the Mortgagor’s
application to such affiliate for underwriting consideration;
(57) The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs objective mathematical principles which relate the Mortgagor’s income,
assets, liabilities and/or credit history to the proposed payment and such
underwriting methodology does not rely on the extent of the Mortgagor’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 (application/approval) the Mortgagor had a reasonable ability
to
make timely payments on the Mortgage Loan;
(58) With
respect to each Mortgage Loan, the Interim Servicer has fully and accurately
furnished complete information on the related borrower credit files to Equifax,
Experian and Trans Union Credit Information Company, in accordance with the
Fair
Credit Reporting Act and its implementing regulations, on a monthly basis
and
the Interim Servicer for each Loan will furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information on its borrower credit files to Equifax, Experian, and Trans
Union
Credit Information Company, on a monthly basis;
(59) All
points and fees related to each Mortgage Loan were disclosed in writing to
the
related Borrower in accordance with applicable state and federal laws and
regulations. Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no related Borrower was charged “points and fees” (whether or not
financed) in an amount greater than 8% of the principal amount of such loan,
and
the amount of any such “points and fees” were in accordance with applicable
state laws. 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 such Mortgage Loan were disclosed in writing
to the related Mortgagor in accordance with applicable state and federal
laws
and regulations;
III-11
(60) The
Interim Servicer will transmit full-file credit reporting data for each Mortgage
Loan and for each Mortgage Loan, Interim Servicer agrees it shall report
one of
the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off;
(61) No
Mortgage Loan is a “manufactured housing loan” or “home improvement home loan”
pursuant to the New Jersey Home Ownership Act. No Mortgage Loan is a “High-Cost
Home Loan” or a refinanced “Covered Home Loan,” in each case, as defined in the
New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46;10B-22
et
seq.);
(62) 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);
(63) No
Mortgage Loan is secured by real property or secured by a manufactured home
located in the state of Georgia unless (x) such Mortgage Loan was originated
prior to October 1, 2002 or after March 6, 2003, or (y) the property securing
the Mortgage Loan is not, nor will be, occupied by the Mortgagor as the
Mortgagor’s principal dwelling. No Mortgage Loan is a “High Cost Home Loan” as
defined in the Georgia Fair Lending Act, as amended (the “Georgia
Act”).
Each
Mortgage Loan that is a “Home Loan” under the Georgia Act complies with all
applicable provisions of the Georgia Act. No Mortgage Loan secured by owner
occupied real property or an owner occupied manufactured home located in
the
State of Georgia was originated (or modified) on or after October 1, 2002
through and including March 6, 2003;
(64) No
Mortgage Loan is a “High-Cost” loan as defined under the New York Banking Law
Section 6-1, effective as of April 1, 2003;
(65) No
Mortgage Loan (a) is secured by property located in the State of New York;
(b)
had an unpaid principal balance at origination of $300,000 or less, and (c)
has
an application date on or after April 1, 2003, the terms of which Mortgage
Loan
equal or exceed either the APR or the points and fees threshold for “high-cost
home loans”, as defined in Section 6-1 of the New York State Banking
Law;
(66) No
Mortgage Loan is a “High Cost Home Loan” as defined in the Arkansas Home Loan
Protection Act effective July 16, 2003 (Act 1340 or 2003);
(67) No
Mortgage Loan is a “High Cost Home Loan” as defined in the Kentucky high-cost
loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
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(68) No
Mortgage Loan secured by property located in the State of Nevada is a “home
loan” as defined in the Nevada Assembly Xxxx No. 284;
(69) No
Mortgage Loan is a “manufactured housing loan” or “home improvement home loan”
pursuant to the New Jersey Home Ownership Act. No Mortgage Loan is a “High-Cost
Home Loan” or a refinanced “Covered Home Loan,” in each case, as defined in the
New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46;10B-22
et
seq.);
(70) No
Mortgage Loan is a subsection 10 mortgage under the Oklahoma Home Ownership
and
Equity protection Act;
(71) No
Mortgage Loan is a “High-Cost Home Loan” as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004 (N.M. Stat. Xxx. §§ 58-21A-1 et
seq.);
(72) No
Mortgage Loan is a “High-Risk Home Loan” as defined in the Illinois High-Risk
Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et
seq.);
(73) No
Loan
that is secured by property located within the State of Maine meets the
definition of a (i) “high-rate, high-fee” mortgage loan under Article VIII,
Title 9-A of the Maine Consumer Credit Code or (ii) “High-Cost Home Loan” as
defined under the Maine House Xxxx 383 X.X. 494, effective as of September
13,
2003;
(74) With
respect to any Loan for which a mortgage loan application was submitted by
the
Mortgagor after April 1, 2004, no such Loan secured by Mortgaged Property
in the
State of Illinois which has a Loan Interest Rate in excess of 8.0% per annum
has
lender-imposed fees (or other charges) in excess of 3.0% of the original
principal balance of the Loan;
(75) No
Mortgage Loan secured by a Mortgaged Property located in the Commonwealth
of
Massachusetts was made to pay off or refinance an existing loan or other
debt of
the related borrower (as the term “borrower” is defined in the regulations
promulgated by the Massachusetts Secretary of State in connection with
Massachusetts House Xxxx 4880 (2004)) unless either (1) (a) the related Mortgage
Interest Rate (that would be effective once the introductory rate expires,
with
respect to Adjustable Rate Mortgage Loans) did or would not exceed by more
than
2.25% the yield on United States Treasury securities having comparable periods
of maturity to the maturity of the related Mortgage Loan as of the fifteenth
day
of the month immediately preceding the month in which the application for
the
extension of credit was received by the related lender or (b) the Mortgage
Loan
is an “open-end home loan” (as such term is used in the Massachusetts House Xxxx
4880 (2004)) and the related Mortgage Note provides that the related Mortgage
Interest Rate may not exceed at any time the Prime rate index as published
in
The Wall Street Journal plus a margin of one percent, or (2) such Mortgage
Loan
is in the “borrower's interest,” as documented by a “borrower's interest
worksheet” for the particular Mortgage Loan, which worksheet incorporates the
factors set forth in Massachusetts House Xxxx 4880 (2004) and the regulations
promulgated thereunder for determining “borrower's interest,” and otherwise
complies in all material respects with the laws of the Commonwealth of
Massachusetts;
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(76)
No Loan
is a “High Cost Home Loan” governed by the Indiana Home Loan Practices Act, Ind.
Code Xxx. §§ 24-9-1-1 et seq.;
(77) The
Mortgagor has not made or caused to be made any payment in the nature of
an
“average” or “yield spread premium” to a mortgage broker or a like Person which
has not been fully disclosed to the Mortgagor;
(78) The
sale
or transfer of the Mortgage Loan by the Mortgage Loan Seller complies with
all
applicable federal, state, and local laws, rules, and regulations governing
such
sale or transfer, including, without limitation, the Fair and Accurate Credit
Transactions Act (“FACT Act”) and the Fair Credit Reporting Act, each as may be
amended from time to time, and the Mortgage Loan Seller has not received
any
actual or constructive notice of any identity theft, fraud, or other
misrepresentation in connection with such Mortgage Loan or any party
thereto;
(79) With
respect to each MOM Loan, a MIN has been assigned by MERS and such MIN is
accurately provided on the Mortgage Loan Schedule. The related Assignment
of
Mortgage to MERS has been duly and properly recorded, or has been delivered
for
recording to the applicable recording office;
(80) With
respect to each MOM Loan, Mortgage Loan Seller has not received any notice
of
liens or legal actions with respect to such Mortgage Loan and no such notices
have been electronically posted by MERS;
(81) With
respect to each Mortgage Loan, (i) if the related first lien provides for
negative amortization, the CLTV was calculated at the maximum principal balance
of such first lien that could result upon application of such negative
amortization feature, and (ii) either no consent for the Mortgage Loan is
required by the holder of the first lien or such consent has been obtained
and
is contained in the Mortgage File; and
(82) No
Mortgagor was required to submit to arbitration to resolve any dispute arising
out of or relating in any way to the Mortgage Loan transaction.
(83) No
Mortgage Loan that was originated on or after October 31, 2004, is subject
to
mandatory arbitration except when the terms of the arbitration also contain
a
waiver provision that provides that in the event of a sale or transfer of
the
Mortgage Loan or interest in the Mortgage Loan to Xxxxxx Mae, the terms of
the
arbitration are null and void and cannot be reinstated;
(84)
No
Mortgage Loan is secured by a lien on a “condo hotel;”
(85) With
respect to any Mortgage Loan insured by PMI:
such
Mortgage Loan is an Eligible Loan;
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(B) the
description of each Mortgage Loan contained in the Mortgage Loan Schedule
submitted to Purchaser on the related Closing Date is true and correct in
all
material respects;
(C) such
Mortgage Loan has not been past due with respect to any scheduled installment
payment during the twelve (12) months immediately preceding the related Closing
Date, nor has such Mortgage Loan ever been sixty (60) days or more past due
with
respect to any scheduled installment payment;
(D) an
appraisal (and not an automated valuation model) was obtained in connection
with
such Mortgage Loan, unless the use of an alternative evaluation methodology
was
disclosed to Purchaser;
(E) such
Mortgage Loan was originated in compliance with the originator’s underwriting
guidelines;
(F) such
Mortgage Loan has not been in foreclosure at any time prior to the related
Closing Date, nor has any borrower on such Mortgage Loan been a party to
any
foreclosure action within twelve (12) months prior to the origination of
such
Mortgage Loan unless a reasonable exception to the originator’s underwriting
guidelines was made and documented in the origination file; and
(G) multiple
loans to one borrower have been disclosed to the Purchaser in the related
Mortgage Loan Schedule, or a separate file sent by the
Company.
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