RESIDENTIAL FUNDING CORPORATION,
as Master Servicer
HOME EQUITY LOAN TRUST 2006-HSA4,
as Issuer
and
JPMORGAN CHASE BANK, N.A.
as Indenture Trustee
SERVICING AGREEMENT
Dated as of July 28, 2006
Home Equity Loans
TABLE OF CONTENTS
ARTICLE I Definitions................................................................................1
Section 1.01 Definitions................................................................................1
Section 1.02 Other Definitional Provisions..............................................................1
Section 1.03 Interest Calculations; Servicing Fee.......................................................2
ARTICLE II Representations and Warranties.............................................................2
Section 2.01 Representations and Warranties Regarding the Master Servicer...............................2
Section 2.02 Representations and Warranties of the Issuer...............................................3
Section 2.03 Enforcement of Representations and Warranties..............................................4
ARTICLE III Administration and Servicing of Home Equity Loans..........................................5
Section 3.01 The Master Servicer........................................................................5
Section 3.02 Collection of Certain Home Equity Loan Payments...........................................10
Section 3.03 Permitted Withdrawals from the Custodial Account..........................................13
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses.............................14
Section 3.05 Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements; Release or Substitution of
Lien......................................................................................15
Section 3.06 Trust Estate; Related Documents...........................................................18
Section 3.07 Realization Upon Defaulted Home Equity Loans; Loss Mitigation.............................18
Section 3.08 Issuer and Indenture Trustee to Cooperate.................................................21
Section 3.09 Servicing Compensation; Payment of Certain Expenses by Master.............................22
Section 3.10 Annual Statement as to Compliance.........................................................22
Section 3.11 Annual Servicing Report...................................................................23
Section 3.12 Access to Certain Documentation and Information Regarding the Home Equity Loans...........23
Section 3.13 Maintenance of Certain Servicing Insurance Policies.......................................24
Section 3.14 Information Required by the Internal Revenue Service and Reports of Foreclosures and Abandonments of
Mortgaged Property........................................................................24
Section 3.15 Optional Repurchase or Transfer of Home Equity Loans......................................24
Section 3.16 Limited Home Equity Loan Repurchase Right.................................................26
ARTICLE IV Servicing Certificate.....................................................................26
Section 4.01 Statements to Securityholders.............................................................26
Section 4.02 Tax Reporting.............................................................................29
Section 4.03 Exchange Act Reporting....................................................................29
ARTICLE V Payment Account...........................................................................30
Section 5.01 Payment Account...........................................................................30
ARTICLE VI The Master Servicer.......................................................................30
Section 6.01 Liability of the Master Servicer..........................................................31
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the Master Servicer......31
Section 6.03 Limitation on Liability of the Master Servicer and Others.................................31
Section 6.04 Master Servicer Not to Resign.............................................................32
Section 6.05 Delegation of Duties......................................................................32
Section 6.06 Master Servicer to Pay Indenture Trustee's and Owner Trustee's Fees and Expenses;
Indemnification ........................................................................32
ARTICLE VII Default...................................................................................34
Section 7.01 Servicing Default.........................................................................34
Section 7.02 Indenture Trustee to Act; Appointment of Successor........................................36
Section 7.03 Notification to Securityholders...........................................................37
Section 7.04 Servicing Trigger; Removal of Master Servicer.............................................37
ARTICLE VIII Miscellaneous Provisions..................................................................38
Section 8.01 Amendment.................................................................................38
Section 8.02 GOVERNING LAW.............................................................................38
Section 8.03 Notices...................................................................................39
Section 8.04 Severability of Provisions................................................................39
Section 8.05 Third-Party Beneficiaries.................................................................39
Section 8.06 Counterparts..............................................................................40
Section 8.07 Effect of Headings and Table of Contents..................................................40
Section 8.08 Termination Upon Purchase by the Master Servicer or Liquidation of Home Equity Loans......40
Section 8.09 Certain Matters Affecting the Indenture Trustee...........................................41
Section 8.10 Owner Trustee Not Liable for Related Documents............................................41
ARTICLE IX Compliance with Regulation AB.............................................................41
Section 9.01 Intent of the Parties; Reasonableness.....................................................41
Section 9.02 Additional Representations and Warranties of the Indenture Trustee........................42
Section 9.03 Information to be provided by the Indenture Trustee.......................................43
Section 9.04 Report on Assessment of Compliance and Attestation........................................43
Section 9.05 Indemnification; Remedies.................................................................43
EXHIBITS
Exhibit A Home Equity Loan Schedule............................................................A-1
Exhibit B Limited Power of Attorney............................................................B-1
Exhibit C Form of Request for Release..........................................................C-1
Exhibit D Form of Lender Certification for Assignment
of Home Equity Loan..................................................................D-1
Exhibit E Form 10-K Certificate................................................................E-1
Exhibit F Form of Back-Up Certification to Form 10-K Certificate...............................F-1
Exhibit G Servicing Criteria...................................................................G-1
This Servicing Agreement, dated as of July 28, 2006, among Residential Funding Corporation (the "Master Servicer"),
the Home Equity Loan Trust 2006-HSA4 (the "Issuer"), and JPMorgan Chase Bank, N.A. (the "Indenture Trustee").
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the terms of the Purchase Agreement, Residential Funding Corporation (in its capacity as
Seller) will sell to the Depositor the Home Equity Loans together with the Related Documents on the Closing Date and thereafter all
Additional Balances on the Home Equity Loans created on or after the Cut-off Date (except as set forth herein);
WHEREAS, the Depositor will sell the Home Equity Loans and all of its rights under the Purchase Agreement to the
Issuer, together with the Related Documents on the Closing Date, and thereafter all Additional Balances on the Home Equity Loans
created on or after the Cut-off Date (except as set forth herein);
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will issue and transfer to or at the direction of
the Depositor, the Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue and transfer to or at the direction of the
Depositor, the Notes; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the Master Servicer will service the Home Equity Loans
directly or through one or more Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. For all purposes of this Servicing Agreement, except as otherwise expressly provided herein or unless
the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the
Definitions contained in Appendix A to the Indenture dated the date hereof (the "Indenture"), between the Issuer and JPMorgan Chase
Bank, N.A., as indenture trustee, which is incorporated by reference herein. All other capitalized terms used herein shall have the
meanings specified herein.
Section 1.02 OTHER DEFINITIONAL PROVISIONS. All terms defined in this Servicing Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
As used in this Servicing Agreement and in any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Servicing Agreement or in any such certificate or other document, and accounting terms partly
defined in this Servicing Agreement or in any such certificate or other document, to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting
terms in this Servicing Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this Servicing Agreement or in any such certificate or other
document shall control.
The words "hereof," "herein," "hereunder" and words of similar import when used in this Servicing Agreement shall refer to
this Servicing Agreement as a whole and not to any particular provision of this Servicing Agreement; Section and Exhibit references
contained in this Servicing Agreement are references to Sections and Exhibits in or to this Servicing Agreement unless otherwise
specified; the term "including" shall mean "including without limitation"; and the term "proceeds" shall have the meaning ascribed
thereto in the UCC.
The definitions contained in this Servicing Agreement are applicable to the singular as well as the plural forms of such
terms and to the masculine as well as the feminine and neuter genders of such terms.
Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes
(in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to
a Person are also to its permitted successors and assigns.
Section 1.03 INTEREST CALCULATIONS; SERVICING FEE. All calculations of interest hereunder that are made in respect of the Loan
Balance of a Home Equity Loan shall be made in accordance with the method of calculation set forth in the related Mortgage Note. All
calculations of interest on the Notes shall be made on the basis of the actual number of days in an Interest Period and a year
assumed to consist of 360 days. The calculation of the Servicing Fee shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All dollar amounts calculated hereunder shall be rounded to the nearest xxxxx with one-half of one xxxxx being
rounded up.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER SERVICER. The Master Servicer represents and warrants to the
Issuer and for the benefit of the Indenture Trustee, as pledgee of the Home Equity Loans and the Credit Enhancer, as of the Closing
Date:
The Master Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to own its assets and to transact the business in which it is currently engaged. The Master
Servicer is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or properties owned or leased by it requires such qualification and in which the failure
to so qualify would have a material adverse effect on the business, properties, assets, or condition (financial or other) of the
Master Servicer;
The Master Servicer has the power and authority to make, execute, deliver and perform this Servicing Agreement and all of
the transactions contemplated under this Servicing Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Servicing Agreement. When executed and delivered, this Servicing Agreement will
constitute the legal, valid and binding obligation of the Master Servicer enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies;
The Master Servicer is not required to obtain the consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this Servicing Agreement, except for such consent, license, approval
or authorization, or registration or declaration, as shall have been obtained or filed, as the case may be;
The execution and delivery of this Servicing Agreement and the performance of the transactions contemplated hereby by the
Master Servicer will not violate any provision of any existing law or regulation or any order or decree of any court applicable to
the Master Servicer or any provision of the Certificate of Incorporation or Bylaws of the Master Servicer, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which the Master Servicer is a party or by which the Master
Servicer may be bound;
No litigation or administrative proceeding of or before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Master Servicer threatened, against the Master Servicer or any of its properties or with respect to this
Servicing Agreement or the Securities which in the opinion of the Master Servicer has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this Servicing Agreement; and
The Master Servicer is a member of MERS in good standing, and will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the Home Equity Loans that are registered with MERS.
The foregoing representations and warranties shall survive any termination of the Master Servicer hereunder.
Section 2.02 REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer hereby represents and warrants to the Master Servicer and
for the benefit of the Indenture Trustee, as pledgee of the Home Equity Loans, and the Credit Enhancer, as of the Closing Date:
The Issuer is a statutory trust duly formed and in good standing under the laws of the State of Delaware and has full power,
authority and legal right to execute and deliver this Servicing Agreement and to perform its obligations under this Servicing
Agreement, and has taken all necessary action to authorize the execution, delivery and performance by it of this Servicing Agreement;
and
The execution and delivery by the Issuer of this Servicing Agreement and the performance by the Issuer of its obligations
under this Servicing Agreement will not violate any provision of any law or regulation governing the Issuer or any order, writ,
judgment or decree of any court, arbitrator or governmental authority or agency applicable to the Issuer or any of its assets. Such
execution, delivery and performance will not require the consent or approval of, the giving of notice to, the filing or registration
with, or the taking of any action, other than such actions that have already been taken, with respect to, any governmental authority
or agency regulating the activities of limited liability companies. Such execution, delivery, authentication and performance will
not conflict with, or result in a breach or violation of, any mortgage, deed of trust, lease or other agreement or instrument to
which the Issuer is bound.
Section 2.03 ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. The Master Servicer, on behalf of and subject to the direction of
the Indenture Trustee, as pledgee of the Home Equity Loans, or the Issuer or the Credit Enhancer, shall enforce the representations
and warranties of the Seller pursuant to the Purchase Agreement. Upon the discovery by the Seller, the Depositor, the Master
Servicer, the Indenture Trustee, the Credit Enhancer, the Issuer, or any Custodian of a breach of any of the representations and
warranties made in the Purchase Agreement, in respect of any Home Equity Loan, which materially and adversely affects the interests
of the Securityholders or the Credit Enhancer in that Home Equity Loan, the party discovering such breach shall give prompt written
notice to the other parties (any Custodian being so obligated under a Custodial Agreement). The Master Servicer shall promptly
notify the Seller of such breach and request that, pursuant to the terms of the Purchase Agreement, the Seller either (i) cure such
breach in all material respects within 45 days (with respect to a breach of the representations and warranties contained in Section
3.1(a) of the Purchase Agreement) or 90 days (with respect to a breach of the representations and warranties contained in Section
3.1(b) of the Purchase Agreement) from the date the Seller was notified of such breach or (ii) purchase such Home Equity Loan from
the Issuer at the price, during the time, and in the manner set forth in Section 3.1(c) of the Purchase Agreement; provided that the
Seller shall, subject to compliance with all the conditions set forth in the Purchase Agreement, have the option to substitute an
Eligible Substitute Loan or Loans for such Home Equity Loan. If the breach of representation and warranty that gave rise to the
obligation to repurchase or substitute a Home Equity Loan pursuant to Section 3.1 of the Purchase Agreement was the representation
and warranty set forth in clause (b)(x) of Section 3.1 of the Purchase Agreement, then the Master Servicer shall request that the
Seller pay to the Trust, concurrently with and in addition to the remedies provided in the preceding sentence, an amount equal to any
liability, penalty or expense (including reasonable legal fees and expenses) that was actually incurred and paid out of or on behalf
of the Trust, and that directly resulted from such breach, or if incurred and paid by the Trust thereafter, concurrently with such
payment. In the event that the Seller elects to substitute one or more Eligible Substitute Loans pursuant to Section 3.1(c) of the
Purchase Agreement, the Seller shall deliver to the Custodian on behalf of the Issuer with respect to such Eligible Substitute Loans,
the original Loan Agreement, the Mortgage, and such other documents and agreements as are required by the Purchase Agreement.
Payments due with respect to Eligible Substitute Loans in the month of substitution shall not be transferred to the Issuer and will
be retained by the Master Servicer and remitted by the Master Servicer to the Seller on the next succeeding Payment Date provided a
payment at least equal to the applicable Minimum Monthly Payment has been received by the Issuer for such month in respect of the
Home Equity Loan to be removed. The Master Servicer shall amend or cause to be amended the Home Equity Loan Schedule to reflect the
removal of such Home Equity Loan and the substitution of the Eligible Substitute Loans and the Master Servicer shall promptly deliver
the amended Home Equity Loan Schedule to the Owner Trustee and the Indenture Trustee.
It is understood and agreed that the obligation of the Seller to cure such breach or purchase or substitute for such Home
Equity Loan as to which such a breach has occurred and is continuing and to make any additional payments required under the Purchase
Agreement in connection with a breach of the representation and warranty contained in Section 3.1(b)(x) thereof shall constitute the
sole remedy respecting such breach available to the Issuer and the Indenture Trustee, as pledgee of the Home Equity Loans, against
the Seller. In connection with the purchase of or substitution for any such Home Equity Loan by the Seller, the Issuer shall assign
to the Seller all of its right, title and interest in respect of the Purchase Agreement applicable to such Home Equity Loan. Upon
receipt of the Repurchase Price, or upon completion of such substitution, the Master Servicer shall notify the Custodian and the
Indenture Trustee and then the Custodian shall deliver the Mortgage Files to the Master Servicer, together with all relevant
endorsements and assignments prepared by the Master Servicer which the Indenture Trustee shall execute. If the Master Servicer is
Residential Funding Corporation, then the Indenture Trustee may, with the consent of the Credit Enhancer, and at the direction of the
Credit Enhancer, shall, give the notification and require the purchase or substitution provided for in the first preceding paragraph
in the event of such a breach of a representation or warranty made by Residential Funding Corporation in the Purchase Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING OF HOME EQUITY LOANS
Section 3.01 THE MASTER SERVICER.
(a) The Master Servicer shall service and administer the Home Equity Loans in a manner generally consistent with the terms of
the Program Guide and in a manner consistent with the terms of this Servicing Agreement, following such procedures as it would employ
in its good faith business judgment and which are normal and usual in its general mortgage servicing activities, and shall have full
power and authority, acting alone or through a Subservicer, to do any and all things which it may deem necessary or desirable in
connection with such servicing and administration, it being understood, however, that the Master Servicer shall at all times remain
responsible to the Issuer and the Indenture Trustee, as pledgee of the Home Equity Loans, and the Credit Enhancer for the performance
of its duties and obligations hereunder in accordance with the terms hereof and the Program Guide.
Without limiting the generality of the foregoing, the Master Servicer shall continue, and is hereby authorized and empowered
by the Issuer and the Indenture Trustee, as pledgee of the Home Equity Loans, to execute and deliver, on behalf of itself, the
Issuer, the Indenture Trustee or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release,
or discharge, or of consent to assumption or modification in connection with a proposed conveyance, or of assignment of any Mortgage
and Mortgage Note in connection with the repurchase of a Home Equity Loan and all other comparable instruments, or with respect to
the modification or re-recording of a Mortgage for the purpose of correcting the Mortgage, the subordination of the lien, as
permitted pursuant to this Agreement, of the Mortgage in favor of a public utility company or government agency or unit with powers
of eminent domain, the taking of a deed in lieu of foreclosure, the commencement, prosecution or completion of judicial or
non-judicial foreclosure, the conveyance of a Mortgaged Property to the related insurer, the acquisition of any property acquired by
foreclosure or deed in lieu of foreclosure on behalf of the Trust, the Credit Enhancer and the Noteholders, or the management,
marketing and conveyance of any property acquired by foreclosure or deed in lieu of foreclosure with respect to the Home Equity Loans
and with respect to the Mortgaged Properties.
The Issuer, the Indenture Trustee and the Custodian, as applicable, shall furnish the Master Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Master Servicer to carry out its servicing and administrative
duties hereunder. On the Closing Date, the Indenture Trustee shall deliver to the Master Servicer a limited power of attorney
substantially in the form of Exhibit B hereto. In connection with servicing and administering the Home Equity Loans, the Master
Servicer and any Affiliate of the Master Servicer may perform services such as appraisals and brokerage services that are not
customarily provided by servicers of mortgage loans, and shall be entitled to reasonable compensation therefor in accordance with
Section 3.03. In addition, the Master Servicer may, at its own discretion and on behalf of the Indenture Trustee, obtain credit
information in the form of a Credit Score from a Credit Repository. The Program Guide and any other Subservicing Agreement entered
into between the Master Servicer and any Subservicer shall require the Subservicer to accurately and fully report its borrower credit
files to each of the Credit Repositories in a timely manner. The Master Servicer is further authorized and empowered by the Issuer
and the Indenture Trustee, on behalf of the Noteholders and the Indenture Trustee, in its own name or in the name of the Subservicer,
when the Master Servicer or the Subservicer, as the case may be, believes it appropriate in its best judgment to register any Home
Equity Loan on the MERS(R)System, or cause the removal from the registration of any Home Equity Loan on the MERS(R)System, to execute
and deliver, on behalf of the Indenture Trustee and the Noteholders or any of them, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a Mortgage in the name of MERS, solely as nominee for the
Indenture Trustee and its successors and assigns. Any expenses incurred in connection with the actions described in the preceding
sentence shall be borne by the Master Servicer, with no right of reimbursement.
(b) If the Mortgage relating to a Home Equity Loan did not have a lien senior to the Home Equity Loan on the related Mortgaged
Property as of the Cut-off Date, then the Master Servicer, in such capacity, may not consent to the placing of a lien senior to that
of the Mortgage on the related Mortgaged Property. If the Mortgage relating to a Home Equity Loan had a lien senior to the Home
Equity Loan on the related Mortgaged Property as of the Cut-off Date, then the Master Servicer, in such capacity, may consent to the
refinancing of the prior senior lien, provided that the following requirements are met:
(i) (A) the Mortgagor's debt-to-income ratio resulting from such refinancing is less than the original debt-to-income ratio as
set forth on the Home Equity Loan Schedule; provided, however, that in no instance shall the resulting Combined Loan-to-Value Ratio
of such Home Equity Loan be higher than that permitted by the Program Guide; or (B) the resulting Combined Loan-to-Value Ratio of
such Home Equity Loan is no higher than the Combined Loan-to-Value Ratio prior to such refinancing; provided, however, if such
refinanced mortgage loan is a "rate and term" mortgage loan (meaning, the Mortgagor does not receive any cash from the refinancing),
the Combined Loan-to-Value Ratio may increase to the extent of either (a) the reasonable closing costs of such refinancing or (b) any
decrease in the value of the related Mortgaged Property, if the Mortgagor is in good standing as defined by the Program Guide;
(ii) the interest rate, or, in the case of an adjustable rate existing senior lien, the maximum interest rate, for the loan
evidencing the refinanced senior lien is no more than 2.0% higher than the interest rate or the maximum interest rate, as the case
may be, on the loan evidencing the existing senior lien immediately prior to the date of such refinancing; provided, however, (a) if
the loan evidencing the existing senior lien prior to the date of refinancing has an adjustable rate and the loan evidencing the
refinanced senior lien has a fixed rate, then the current interest rate on the loan evidencing the refinanced senior lien may be up
to 2.0% higher than the then-current loan rate of the loan evidencing the existing senior lien and (b) if the loan evidencing the
existing senior lien prior to the date of refinancing has a fixed rate and the loan evidencing the refinanced senior lien has an
adjustable rate, then the maximum interest rate on the loan evidencing the refinanced senior lien shall be less than or equal to (x)
the interest rate on the loan evidencing the existing senior lien prior to the date of refinancing plus (y) 2.0%; and
(iii) the loan evidencing the refinanced senior lien is not subject to negative amortization.
The Master Servicer may also, without prior approval of the Rating Agencies or the Credit Enhancer, increase the Credit
Limits on the Home Equity Loans (a "Credit Limit Increase"), provided that (i) a new appraisal is obtained, (ii) the new Combined
Loan-to-Value Ratio of any such Home Equity Loan after giving effect to such increase is less than or equal to the Combined
Loan-to-Value Ratio of the Home Equity Loan as of the Cut-off Date, (iii) the Master Servicer receives verbal verification of
employment of the related Mortgagor and (iv) the payment history of the related Mortgagor is within the underwriting parameters of
the Program Guide. In addition, the Master Servicer may increase the Credit Limits on Home Equity Loans without obtaining new
appraisals provided that clauses (iii) and (iv) of the preceding sentence are satisfied, the Combined Loan-to-Value Ratio of the Home
Equity Loan following the Credit Limit Increase will be limited to 100% and at no time shall the aggregate Loan Balance of such Home
Equity Loans exceed 5% of the current Pool Balance; provided, further, however, that for Home Equity Loans with original Combined
Loan-to-Value Ratios in excess of 80%, the Combined Loan-to-Value Ratio resulting from such Credit Limit Increase must be less than
or equal to the original Combined Loan-to-Value Ratio and at no time shall the aggregate Loan Balance of such Home Equity Loans
exceed 5% of the current Pool Balance.
In connection with servicing the Home Equity Loans, the Master Servicer may take reasonable actions to encourage or effect
the termination of Loan Agreements that have become dormant.
The relationship of the Master Servicer (and of any successor to the Master Servicer as servicer under this Servicing
Agreement) to the Issuer under this Servicing Agreement is intended by the parties to be that of an independent contractor and not
that of a joint venturer, partner or agent.
All costs incurred by the Master Servicer or by Subservicers in effecting the timely payment of taxes and assessments on the
properties subject to the Home Equity Loans shall not, for the purpose of calculating monthly distributions to Certificateholders, be
added to the amount owing under the related Home Equity Loans, notwithstanding that the terms of such Home Equity Loan so permit, and
such costs shall be recoverable to the extent permitted by Section 3.03.
(c) The Master Servicer may enter into Subservicing Agreements with Subservicers for the servicing and administration of certain
of the Home Equity Loans. Any Subservicing Agreement that may be entered into and any other transactions or services relating to the
Home Equity Loans involving a Subservicer in its capacity as such and not as an originator shall be deemed to be between the
Subservicer and the Master Servicer alone and the Indenture Trustee and Securityholders shall not be deemed parties thereto and shall
have no claims, rights, obligations, duties or liabilities with respect to the Subservicer in its capacity as such except as set
forth in Section 7.02. Each Subservicer of a Home Equity Loan shall be entitled to receive and retain, as provided in the related
Subservicing Agreement and in Section 3.02, the related Subservicing Fee from payments of interest received on such Home Equity Loan
after payment of all amounts required to be remitted to the Master Servicer in respect of such Home Equity Loan. For any Home Equity
Loan that is a nonsubserviced Home Equity Loan, the Master Servicer shall be entitled to receive and retain an amount equal to the
Subservicing Fee from payments of interest. References in this Servicing Agreement to actions taken or to be taken by the Master
Servicer in servicing the Home Equity Loans include actions taken or to be taken by a Subservicer on behalf of the Master Servicer
and any amount actually received by such Subservicer in respect of a Home Equity Loan shall be deemed to have been received by the
Master Servicer whether or not actually received by the Master Servicer. Each Subservicing Agreement will be upon such terms and
conditions as are not inconsistent with this Servicing Agreement and as the Master Servicer and the Subservicer have agreed. With
the approval of the Master Servicer, a Subservicer may delegate its servicing obligations to third-party servicers, but such
Subservicers will remain obligated under the related Subservicing Agreements. The Master Servicer and the Subservicer may enter into
amendments to the related Subservicing Agreements; provided, however, that any such amendments shall not cause the Home Equity Loans
to be serviced in a manner that would be materially inconsistent with the standards set forth in this Servicing Agreement. The
Master Servicer shall be entitled to terminate any Subservicing Agreement in accordance with the terms and conditions thereof and
without any limitation by virtue of this Servicing Agreement; provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall either act as servicer of the related Home Equity Loan
or enter into a Subservicing Agreement with a successor Subservicer which will be bound by the terms of the related Subservicing
Agreement. If the Master Servicer or any Affiliate of Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the Master Servicer enters into a Subservicing Agreement
with a successor Subservicer, the Master Servicer shall use reasonable efforts to have the successor Subservicer assume liability for
the representations and warranties made by the terminated Subservicer in respect of the related Home Equity Loans and, in the event
of any such assumption by the successor Subservicer, the Master Servicer may, in the exercise of its business judgment, release the
terminated Subservicer from liability for such representations and warranties.
As part of its servicing activities hereunder, the Master Servicer, for the benefit of the Securityholders and the Credit
Enhancer, shall use reasonable efforts to enforce the obligations of each Subservicer under the related Subservicing Agreement, to
the extent that the non-performance of any such obligation would have a material adverse effect on a Home Equity Loan. Such
enforcement, including, without limitation, the legal prosecution of claims, termination of Subservicing Agreements and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner of the related Home Equity Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement to the extent, if any, that such recovery exceeds all amounts due in respect of the related Home Equity Loan or (ii)
from a specific recovery of costs, expenses or attorneys fees against the party against whom such enforcement is directed.
Notwithstanding any Subservicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements
between the Master Servicer or a Subservicer or reference to actions taken through a Subservicer or otherwise, the Master Servicer
shall remain obligated and liable to the Indenture Trustee, the Credit Enhancer, the Noteholders and the Certificateholders for the
servicing and administering of the Home Equity Loans in accordance with the provisions of this Section 3.01 without diminution of
such obligation or liability by virtue of such Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if the Master Servicer alone were servicing and
administering the Home Equity Loans. The Master Servicer shall be entitled to enter into any agreement with a Subservicer or Program
Seller for indemnification of the Master Servicer and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
In the event the Master Servicer shall for any reason no longer be the master servicer (including by reason of a Servicing
Default), the Indenture Trustee, its designee or the successor servicer for the Indenture Trustee shall be deemed to have assumed all
of the Master Servicer's interest therein and to have replaced the Master Servicer as a party to the Subservicing Agreement to the
same extent as if the Subservicing Agreement had been assigned to the assuming party, except that the Master Servicer shall not
thereby be relieved of any liability or obligations under the Subservicing Agreement, nor shall the Indenture Trustee be responsible
for any obligations or liabilities prior to such replacement. The Indenture Trustee shall not be responsible for any representations
and warranties made by the Master Servicer pursuant to such Subservicing Agreement.
The Master Servicer shall, upon request of the Indenture Trustee but at the expense of the Master Servicer, deliver to the
assuming party all documents and records relating to each Subservicing Agreement and the Home Equity Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its best efforts to effect the orderly and efficient transfer of
each Subservicing Agreement to the assuming party.
Section 3.02 COLLECTION OF CERTAIN HOME EQUITY LOAN PAYMENTS.
(a) The Master Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the
Home Equity Loans, and shall, to the extent such procedures shall be consistent with this Servicing Agreement and generally
consistent with the Program Guide, follow such collection procedures as it would employ in its good faith business judgment and which
are normal and usual in its general mortgage servicing activities. Consistent with the foregoing, and without limiting the
generality of the foregoing, the Master Servicer may in its discretion waive any late payment charge, penalty interest or other fees
which may be collected in the ordinary course of servicing such Home Equity Loan. The Master Servicer may also extend the Due Date
for payment due on a Home Equity Loan in accordance with the Program Guide, provided, however, that the Master Servicer shall first
determine that any such waiver or extension will not impair the coverage of any related insurance policy or materially adversely
affect the lien of the related Mortgage (except as described below) or the interests of the Securityholders and the Credit Enhancer.
Notwithstanding anything in this Section to the contrary, the Master Servicer or any Subservicer shall not enforce any prepayment
charge to the extent that such enforcement would violate any applicable law. Consistent with the terms of this Servicing Agreement
and subject to Section 3.01(a) herein, the Master Servicer may also:
(i) waive, modify or vary any term of any Home Equity Loan (including reduce the Credit Limit or extend the period during which
a Draw may be made by the Mortgagor pursuant to the Loan Agreement with respect to any Home Equity Loan);
(ii) consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor;
(iii) arrange with a Mortgagor a schedule for the payment of principal and interest due and unpaid;
(iv) forgive any portion of the amounts contractually owed under the Home Equity Loan;
(v) capitalize any past due amounts owed under the Home Equity Loan by adding amounts in arrearage to the existing Loan Balance
of the Home Equity Loan (a "Capitalization Workout"), provided, however, that the Master Servicer shall not enter into a
Capitalization Workout unless the Combined Loan-to-Value Ratio of the Home Equity Loan prior to the Capitalization Workout equals or
exceeds 80%; and
(vi) reset the due date for the Home Equity Loan, or any combination of the foregoing,
if in the Master Servicer's determination such waiver, modification, postponement or indulgence, arrangement or other action referred
to above is not materially adverse to the interests of the Securityholders or the Credit Enhancer and is generally consistent with
the Master Servicer's policies with respect to home equity loans similar to Home Equity Loans; provided, however, that the Master
Servicer may not, except in the case of an extension of the period during which a Draw may be made by the Mortgagor, pursuant to this
Section 3.02, modify or permit any Subservicer to modify any Home Equity Loan, (including without limitation any modification that
would change the Loan Rate, forgive the payment of any principal or interest (unless in connection with the liquidation of the
related Home Equity Loan), capitalize any arrearage for the related Home Equity Loan or extend the due date of any payment) unless
such Home Equity Loan is in default or, in the judgment of the Master Servicer, such default is reasonably foreseeable.
Notwithstanding the foregoing, the final maturity date of any Home Equity Loan will not be extended beyond the Final Scheduled
Payment Date. The general terms of any waiver, modification, postponement or indulgence with respect to any of the Home Equity Loans
will be included in the Servicing Certificate, and such Home Equity Loans will not be considered "delinquent" for the purposes of the
Basic Documents so long as the Mortgagor complies with the terms of such waiver, modification, postponement or indulgence. In
addition, if a Home Equity Loan is in default or, in the judgment of the Master Servicer, such default is reasonably foreseeable, the
Master Servicer may, through modification, convert such Home Equity Loan to a fully amortizing closed-end loan. Notwithstanding the
foregoing, the Master Servicer in its sole discretion (i) may permit the Mortgagor (or may enter into a modification agreement which
will allow the Mortgagor) to make monthly payments, with respect to any Billing Cycle during the related Draw Period, in a minimum
amount that will be equal to the related finance charge for such Billing Cycle and (ii) may reduce the amount of the Credit Limit (to
an amount no less than the then current Loan Balance of such Home Equity Loan) in connection with any refinancing of a senior lien
pursuant to Section 3.01(b) of this Agreement. In connection with any Curtailment of a Home Equity Loan, the Master Servicer, to the
extent not inconsistent with the terms of the Mortgage Note and local law and practice, may permit the Home Equity Loan to be
reamortized such that the Minimum Monthly Payment is recalculated as an amount that will fully amortize the remaining Loan Balance
thereof by the Final Scheduled Payment Date based on the original Loan Rate.
(b) The Master Servicer shall establish a Custodial Account, which shall be an Eligible Account in which the Master Servicer
shall deposit or cause to be deposited any amounts representing payments and collections in respect of the Home Equity Loans received
by it on or after the Cut-off Date, within one Business Day following receipt thereof, except as otherwise specifically provided
herein, including the following payments and collections received or made by it (without duplication):
(i) all payments on account of principal, (including Principal Prepayments made by Mortgagors on the
Home Equity Loans or from any REO Proceeds received in connection with an REO Property for which an REO Disposition has occurred);
(ii) all payments on account of interest at the Adjusted Mortgage Rate on the Home Equity Loans, or
from any REO Proceeds received in connection with an REO Property for which an REO Disposition has occurred;
(iii) the aggregate Repurchase Price of the Home Equity Loans purchased by the Master Servicer pursuant
to Section 3.15 or by the Limited Repurchase Price Holder pursuant to Section 3.16 and amounts received from the Seller pursuant to
Article 3 of the Purchase Agreement in respect of any liability, penalty or expense that resulted from a breach of the representation
and warranty set forth in Section 3.1(b)(x) of the Purchase Agreement;
(iv) Net Liquidation Proceeds net of any related Foreclosure Profit;
(v) all proceeds of any Home Equity Loans repurchased by the Seller pursuant to the Purchase
Agreement, and all Substitution Adjustment Amounts required to be deposited in connection with the substitution of an Eligible
Substitute Loan pursuant to the Purchase Agreement;
(vi) Insurance Proceeds, other than Net Liquidation Proceeds, resulting from any insurance policy
maintained on a Mortgaged Property; and
(vii) amounts required to be paid by the Master Servicer pursuant to Sections 3.04 and 8.08 and any
payments or collections received in the nature of prepayment charges;
provided, however, that with respect to each Collection Period, the Master Servicer shall be permitted to retain from payments in
respect of interest on the Home Equity Loans, the Master Servicing Fee for such Collection Period. The foregoing requirements
respecting deposits to the Custodial Account are exclusive, it being understood that, without limiting the generality of the
foregoing, the Master Servicer need not deposit in the Custodial Account amounts representing Foreclosure Profits, fees (including
annual fees), assumption charges or late charge penalties payable by Mortgagors (such amounts to be retained as additional servicing
compensation in accordance with Section 3.09 hereof), or amounts received by the Master Servicer for the accounts of Mortgagors for
application towards the payment of taxes, insurance premiums, assessments and similar items. In the event any amount not required to
be deposited in the Custodial Account is so deposited, the Master Servicer may at any time withdraw such amount from the Custodial
Account, any provision herein to the contrary notwithstanding. The Custodial Account may contain funds that belong to one or more
trusts created for the notes or certificates of other series and may contain other funds respecting payments on home equity loans or
other mortgage loans belonging to the Master Servicer or serviced or master serviced by it on behalf of others. Notwithstanding such
commingling of funds, the Master Servicer shall keep records that accurately reflect the funds on deposit in the Custodial Account
that have been identified by it as being attributable to the Home Equity Loans and shall hold all collections in the Custodial
Account to the extent they represent collections on the Home Equity Loans for the benefit of the Trust, the Securityholders, the
Credit Enhancer and the Indenture Trustee, as their interests may appear. The Master Servicer shall retain all Foreclosure Profits
as additional servicing compensation.
With respect to Insurance Proceeds, Net Liquidation Proceeds, REO Proceeds and the proceeds of the purchase of any Home
Equity Loan received in any calendar month, the Master Servicer may elect to treat such amounts to be deposited in the Custodial
Account for distribution in accordance with Section 3.05 of the Indenture for distribution on the Payment Date in the month of
receipt, but is not obligated to do so. If the Master Servicer so elects, such amounts will be deemed to have been received (and any
related Liquidation Loss Amount shall be deemed to have occurred) on the last day of the month prior to the receipt thereof.
The Master Servicer may cause the institution maintaining the Custodial Account to invest any funds in the Custodial Account
in Permitted Investments (including obligations of the Master Servicer or any of its Affiliates, if such obligations otherwise
qualify as Permitted Investments), which shall mature not later than the Business Day preceding the next Payment Date and shall not
be sold or disposed of prior to its maturity. Except as provided above, all income and gain realized from any such investment shall
inure to the benefit of the Master Servicer and shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of the principal amount of any such investments shall be deposited in the Custodial Account by the Master
Servicer out of its own funds immediately as realized.
(c) The Master Servicer will require each Subservicer to hold all funds constituting collections on the Home Equity Loans,
pending remittance thereof to the Master Servicer, in one or more accounts meeting the requirements of an Eligible Account, and
invested in Permitted Investments.
Section 3.03 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT. The Master Servicer shall, from time to time as provided herein,
make withdrawals from the Custodial Account of amounts on deposit therein pursuant to Section 3.02 that are attributable to the Home
Equity Loans for the following purposes:
(a) to deposit in the Payment Account, on the Business Day prior to each Payment Date, an amount equal to the Interest
Collections and Principal Collections required to be distributed on such Payment Date and any payments or collections in the nature
of prepayment charges received during the related Collection Period;
(b) prior to either an Amortization Event or the Collection Period during which the Revolving Period ends, to pay to the Seller,
the amount of any Additional Balances as and when created during the related Collection Period, provided, that the aggregate amount
so paid to the Seller in respect of Additional Balances at any time during any Collection Period shall not exceed the amount of
Principal Collections theretofore received for such Collection Period;
(c) to the extent deposited to the Custodial Account, to reimburse itself or the related Subservicer for
previously unreimbursed expenses incurred in maintaining individual insurance policies pursuant to Section 3.04, or Liquidation
Expenses paid pursuant to Section 3.07 or otherwise reimbursable pursuant to the terms of this Servicing Agreement (to the extent not
payable pursuant to Section 3.09), such withdrawal right being limited to amounts received on particular Home Equity Loans (other
than any Repurchase Price in respect thereof) which represent late recoveries of the payments for which such advances were made, or
from related Liquidation Proceeds or the proceeds of the purchase of such Home Equity Loan;
(d) to pay to itself out of each payment received on account of interest on a Home Equity Loan as contemplated
by Section 3.09, an amount equal to the related Master Servicing Fee (to the extent not retained pursuant to Section 3.02), and to
pay to any Subservicer any Subservicing Fees not previously withheld by the Subservicer;
(e) to the extent deposited in the Custodial Account to pay to itself as additional servicing compensation any
interest or investment income earned on funds deposited in the Custodial Account and Payment Account that it is entitled to withdraw
pursuant to Sections 3.02(b) and 5.01;
(f) to the extent deposited in the Custodial Account, to pay to itself as additional servicing compensation any Foreclosure
Profits (to the extent permitted by law);
(g) to pay to itself, a Subservicer or the Seller, or any other appropriate person, as the case may be, with
respect to any Home Equity Loan or property acquired in respect thereof that has been purchased or otherwise transferred to the
Seller, the Master Servicer, the Limited Repurchase Right Holder or other entity, all amounts received thereon and not required to be
distributed to Securityholders as of the date on which the related Purchase Price or Repurchase Price is determined;
(h) to withdraw any other amount deposited in the Custodial Account that was not required to be deposited
therein pursuant to Section 3.02;
(i) after the occurrence of an Amortization Event, to pay to the Seller, the Excluded Amount for each Home
Equity Loan; and
(j) to reimburse itself for amounts expended by it (a) pursuant to Section 3.06 in good faith in connection
with the restoration of property damaged by an Uninsured Cause, and (b) in connection with the liquidation of a Home Equity Loan or
disposition of an REO Property to the extent not otherwise reimbursed pursuant to clause (c) above.
Since, in connection with withdrawals pursuant to clauses (c), (d), (f) and (g), the Master Servicer's entitlement thereto is limited
to collections or other recoveries on the related Home Equity Loan, the Master Servicer shall keep and maintain separate accounting,
on a Home Equity Loan by Home Equity Loan basis, for the purpose of justifying any withdrawal from the Custodial Account pursuant to
such clauses. Notwithstanding any other provision of this Servicing Agreement, the Master Servicer shall be entitled to reimburse
itself for any previously unreimbursed expenses incurred pursuant to Section 3.07 or otherwise reimbursable pursuant to the terms of
this Servicing Agreement that the Master Servicer determines to be otherwise nonrecoverable (except with respect to any Home Equity
Loan as to which the Repurchase Price has been paid), by withdrawal from the Custodial Account of amounts on deposit therein
attributable to the Home Equity Loans on any Business Day prior to the Payment Date succeeding the date of such determination.
Section 3.04 MAINTENANCE OF HAZARD INSURANCE; PROPERTY PROTECTION EXPENSES.
(a) The Master Servicer shall cause to be maintained for each Home Equity Loan hazard insurance naming the
Master Servicer or related Subservicer as loss payee thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such Home Equity Loan from time to time or (ii) the
combined Loan Balance owing on such Home Equity Loan and any mortgage loan senior to such Home Equity Loan from time to time;
provided, however, that such coverage may not be less than the minimum amount required to fully compensate for any loss or damage on
a replacement cost basis. The Master Servicer shall also cause to be maintained on property acquired upon foreclosure, or deed in
lieu of foreclosure, of any Home Equity Loan, fire insurance with extended coverage in an amount which is at least equal to the
amount necessary to avoid the application of any co-insurance clause contained in the related hazard insurance policy. Amounts
collected by the Master Servicer under any such policies (other than amounts to be applied to the restoration or repair of the
related Mortgaged Property or property thus acquired or amounts released to the Mortgagor in accordance with the Master Servicer's
normal servicing procedures) shall be deposited in the Custodial Account to the extent called for by Section 3.02. In cases in which
any Mortgaged Property is located at any time during the life of a Home Equity Loan in a federally designated flood area, the hazard
insurance to be maintained for the related Home Equity Loan shall include flood insurance (to the extent available). All such flood
insurance shall be in amounts equal to the lesser of (i) the amount required to compensate for any loss or damage to the Mortgaged
Property on a replacement cost basis and (ii) the maximum amount of such insurance available for the related Mortgaged Property under
the national flood insurance program (assuming that the area in which such Mortgaged Property is located is participating in such
program). The Master Servicer shall be under no obligation to require that any Mortgagor maintain earthquake or other additional
insurance and shall be under no obligation itself to maintain any such additional insurance on property acquired in respect of a Home
Equity Loan, other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such
additional insurance.
If the Master Servicer shall obtain and maintain a blanket policy consistent with its general mortgage servicing activities
insuring against hazard losses on all of the Home Equity Loans, it shall conclusively be deemed to have satisfied its obligations as
set forth in the first sentence of this Section 3.04, it being understood and agreed that such policy may contain a deductible
clause, in which case the Master Servicer shall, in the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with the first sentence of this Section 3.04 and there shall have been a loss which would have been
covered by such policy, deposit in the Custodial Account the amount not otherwise payable under the blanket policy because of such
deductible clause. Any such deposit by the Master Servicer shall be made on the last Business Day of the Collection Period in the
month in which payments under any such policy would have been deposited in the Custodial Account. In connection with its activities
as servicer of the Home Equity Loans, the Master Servicer agrees to present, on behalf of itself, the Issuer and the Indenture
Trustee, claims under any such blanket policy.
Section 3.05 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AND MODIFICATION AGREEMENTS; RELEASE OR SUBSTITUTION OF LIEN.
(a)When any Mortgaged Property is conveyed by the Mortgagor, the Master Servicer or Subservicer, to the extent it has knowledge of
such conveyance, shall enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent permitted under
applicable law and governmental regulations, but only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy or otherwise adversely affect the interests of the Certificateholders or the Credit
Enhancer. Notwithstanding the foregoing:
(i) the Master Servicer shall not be deemed to be in default under this Section 3.05(a) by reason of any
transfer or assumption which the Master Servicer is restricted by law from preventing; and
(ii) if the Master Servicer determines that it is reasonably likely that any Mortgagor will bring, or if any
Mortgagor does bring, legal action to declare invalid or otherwise avoid enforcement of a due-on-sale clause contained in
any Mortgage Note or Mortgage, the Master Servicer shall not be required to enforce the due-on-sale clause or to contest
such action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale clause to the extent set forth in Section
3.05(a), the Master Servicer or the related Subservicer, as the case may be, shall be entitled to (A) execute assumption agreements,
substitution agreements, and instruments of satisfaction or cancellation or of partial or full release or discharge, or any other
document contemplated by this Servicing Agreement and other comparable instruments with respect to the Home Equity Loans and with
respect to the Mortgaged Properties subject to the Mortgages (and the Issuer and the Indenture Trustee each shall promptly execute
any such documents on request of the Master Servicer) and (B) approve the granting of an easement thereon in favor of another Person,
any alteration or demolition of the related Mortgaged Property or other similar matters, if it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner of the related Home Equity Loan, that the security for,
and the timely and full collectability of, such Home Equity Loan would not be adversely affected thereby. A partial release pursuant
to this Section 3.05 shall be permitted only if the Combined Loan-to-Value Ratio for such Home Equity Loan after such partial release
does not exceed the Combined Loan-to-Value Ratio for such Home Equity Loan as of the Cut-off Date. Any fee collected by the Master
Servicer or the related Subservicer for processing such request will be retained by the Master Servicer or such Subservicer as
additional servicing compensation.
(c) The Master Servicer may enter into an agreement with a Mortgagor to release the lien on the Mortgaged
Property relating to a Home Equity Loan (the "Existing Lien"), if at the time of such agreement the Home Equity Loan is current in
payment of principal and interest, under any of the following circumstances:
(i) in any case in which, simultaneously with the release of the Existing Lien, the Mortgagor executes and delivers to the
Master Servicer a Mortgage on a substitute Mortgaged Property, provided that the Combined Loan-to-Value Ratio of the Home Equity Loan
(calculated based on the Appraised Value of the substitute Mortgaged Property) is not greater than the Combined Loan-to-Value Ratio
prior to releasing the Existing Lien;
(ii) in any case in which, simultaneously with the release of the Existing Lien, the Mortgagor executes and delivers to the
Master Servicer a Mortgage on a substitute Mortgaged Property, provided that: (A) the Combined Loan-to-Value Ratio of the Home Equity
Loan (calculated based on the Appraised Value of the substitute Mortgaged Property) is not greater than the lesser of (1) 100% and
(2) 105% of the Combined Loan-to-Value Ratio prior to releasing the Existing Lien; and (B) the Master Servicer determines that at
least two appropriate compensating factors are present (compensating factors may include, without limitation, an increase in the
Mortgagor's monthly cash flow after debt service, the Mortgagor's debt-to-income ratio has not increased since origination, or an
increase in the Mortgagor's credit score); or
(iii) in any case in which, at the time of release of the Existing Lien, the Mortgagor does not provide the Master Servicer with a
Mortgage on a substitute Mortgaged Property (any Home Equity Loan that becomes and remains unsecured in accordance with this
subsection, an "Unsecured Loan"), provided that: (A) the current Combined Loan-to-Value Ratio is greater than or equal to 85%; (B)
the Master Servicer shall not permit the release of an Existing Lien under this clause (iii) as to more than 100 Home Equity Loans in
any calendar year; (C) at no time shall the aggregate Loan Balance of Unsecured Loans exceed 2.5% of the then Pool Balance; (D) the
Mortgagor agrees to an automatic debit payment plan; and (E) the Master Servicer shall provide notice to each Rating Agency that has
requested notice of such releases.
In connection with any Unsecured Loan, the Master Servicer may require the Mortgagor to enter into an agreement under which:
(i) the Loan Rate may be increased effective until a substitute Mortgage meeting the criteria under (i) or (ii) above is provided; or
(ii) any other provision may be made which the Master Servicer considers to be appropriate. Thereafter, the Master Servicer shall
determine in its discretion whether to accept any proposed Mortgage on any substitute Mortgaged Property as security for the Home
Equity Loan, and the Master Servicer may require the Mortgagor to agree to any further conditions which the Master Servicer considers
appropriate in connection with such substitution, which may include a reduction of the Loan Rate (but not below the Loan Rate in
effect at the Closing Date). Any Home Equity Loan as to which a Mortgage on a substitute Mortgaged Property is provided in
accordance with the preceding sentence shall no longer be deemed to be an Unsecured Loan.
(d) Subject to any other applicable terms and conditions of this Agreement, the Master Servicer shall be
entitled to approve an assignment in lieu of satisfaction with respect to any Home Equity Loan, provided the obligee with respect to
such Home Equity Loan following such proposed assignment provides the Master Servicer with a "Lender Certification for Assignment of
Home Equity Loan" in the form attached hereto as Exhibit D, in form and substance satisfactory to the Indenture Trustee and Master
Servicer, providing the following: (i) that the Home Equity Loan is secured by Mortgaged Property located in a jurisdiction in which
an assignment in lieu of satisfaction is required to preserve lien priority, minimize or avoid mortgage recording taxes or otherwise
comply with, or facilitate a refinancing under, the laws of such jurisdiction; (ii) that the substance of the assignment is, and is
intended to be, a refinancing of such Home Equity Loan and that the form of the transaction is solely to comply with, or facilitate
the transaction under, such local laws; (iii) that the Home Equity Loan following the proposed assignment will have a rate of
interest at least 0.25 percent below or above the rate of interest on such Home Equity Loan prior to such proposed assignment; and
(iv) that such assignment is at the request of the borrower under the related Home Equity Loan. Upon approval of an assignment in
lieu of satisfaction with respect to any Home Equity Loan, the Master Servicer shall receive cash in an amount equal to the unpaid
Loan Balance of and accrued interest on such Home Equity Loan and the Master Servicer shall treat such amount as a Principal
Prepayment in Full with respect to such Home Equity Loan for all purposes hereof.
Section 3.06 TRUST ESTATE; RELATED DOCUMENTS (a) When required by the provisions of this Servicing Agreement, the Issuer
or the Indenture Trustee shall execute instruments to release property from the terms of the Trust Agreement, Indenture or Custodial
Agreement, as applicable, or convey the Issuer's or the Indenture Trustee's interest in the same, in a manner and under circumstances
which are not inconsistent with the provisions of this Servicing Agreement. No party relying upon an instrument executed by the
Issuer or the Indenture Trustee as provided in this Section 3.06 shall be bound to ascertain the Issuer's or the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.
(b) If from time to time the Master Servicer shall deliver to the Custodian copies of any written assurance,
assumption agreement or substitution agreement or other similar agreement pursuant to Section 3.05, the Custodian shall check that
each of such documents purports to be an original executed copy (or a copy of the original executed document if the original executed
copy has been submitted for recording and has not yet been returned) and, if so, shall file such documents, and upon receipt of the
original executed copy from the applicable recording office or receipt of a copy thereof certified by the applicable recording office
shall file such originals or certified copies with the Related Documents. If any such documents submitted by the Master Servicer do
not meet the above qualifications, such documents shall promptly be returned by the Custodian to the Master Servicer, with a
direction to the Master Servicer to forward the correct documentation.
(c) Upon receipt of a Request for Release from the Master Servicer, substantially in the form of Exhibit C to
the effect that a Home Equity Loan has been the subject of a final payment or a prepayment in full and the related Home Equity Loan
has been terminated or that substantially all Liquidation Proceeds which have been determined by the Master Servicer in its
reasonable judgment to be finally recoverable have been recovered, and upon deposit to the Custodial Account of such final monthly
payment, prepayment in full together with accrued and unpaid interest to the date of such payment with respect to such Home Equity
Loan or, if applicable, Liquidation Proceeds, the Custodian shall promptly release the Related Documents to the Master Servicer,
which the Indenture Trustee shall execute, along with such documents as the Master Servicer or the Mortgagor may request to evidence
satisfaction and discharge of such Home Equity Loan, upon request of the Master Servicer. If from time to time and as appropriate
for the servicing or foreclosure of any Home Equity Loan, the Master Servicer requests the Custodian to release the Related Documents
and delivers to the Custodian a trust receipt reasonably satisfactory to the Custodian and signed by a Responsible Officer of the
Master Servicer, the Custodian shall release the Related Documents to the Master Servicer. If such Home Equity Loans shall be
liquidated and the Custodian receives a certificate from the Master Servicer as provided above, then, upon request of the Master
Servicer, the Custodian shall release the trust receipt to the Master Servicer.
Section 3.07 REALIZATION UPON DEFAULTED HOME EQUITY LOANS; LOSS MITIGATION. With respect to such of the Home Equity Loans as
come into and continue in default, the Master Servicer will decide whether to (i) foreclose upon the Mortgaged Properties securing
such Home Equity Loans, (ii) write off the unpaid Loan Balance of the Home Equity Loans as bad debt, (iii) take a deed in lieu of
foreclosure, (iv) accept a short sale (a payoff of the Home Equity Loan for an amount less than the total amount contractually owed
in order to facilitate a sale of the Mortgaged Property by the Mortgagor) or permit a short refinancing (a payoff of the Home Equity
Loan for an amount less than the total amount contractually owed in order to facilitate refinancing transactions by the Mortgagor not
involving a sale of the Mortgaged Property), (v) arrange for a repayment plan, (vi) agree to a modification in accordance with this
Servicing Agreement, or (vii) take an unsecured note, in connection with a negotiated release of the lien of the Mortgage in order to
facilitate a settlement with the Mortgagor; in each case subject to the rights of any related first lien holder; provided that in
connection with the foregoing if the Master Servicer has actual knowledge that any Mortgaged Property is affected by hazardous or
toxic wastes or substances and that the acquisition of such Mortgaged Property would not be commercially reasonable, then the Master
Servicer will not cause the Issuer or the Indenture Trustee to acquire title to such Mortgaged Property in a foreclosure or similar
proceeding. In connection with such decision, the Master Servicer shall follow such practices (including, in the case of any default
on a related senior mortgage loan, the advancing of funds to correct such default if deemed to be appropriate by the Master Servicer)
and procedures as it shall deem necessary or advisable and as shall be normal and usual in its general mortgage servicing activities
and as shall be required or permitted by the Program Guide; provided that the Master Servicer shall not be liable in any respect
hereunder if the Master Servicer is acting in connection with any such foreclosure or attempted foreclosure which is not completed or
other conversion in a manner that is consistent with the provisions of this Servicing Agreement. The foregoing is subject to the
proviso that the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or attempted
foreclosure which is not completed or towards the correction of any default on a related senior mortgage loan or restoration of any
property unless it shall determine that such expenditure will increase Net Liquidation Proceeds. In the event of a determination by
the Master Servicer that any such expenditure previously made pursuant to this Section 3.07 will not be reimbursable from Net
Liquidation Proceeds, the Master Servicer shall be entitled to reimbursement of its funds so expended pursuant to Section 3.03.
In addition, the Master Servicer may pursue any remedies that may be available in connection with a breach of a
representation and warranty with respect to any such Home Equity Loan in accordance with Section 2.03. However, the Master Servicer
is not required to continue to pursue both foreclosure (or similar remedies) with respect to the Home Equity Loans and remedies in
connection with a breach of a representation and warranty if the Master Servicer determines in its reasonable discretion that one
such remedy is more likely to result in a greater recovery as to the Home Equity Loan. Upon the occurrence of a Cash Liquidation or
REO Disposition, following the deposit in the Custodial Account of all Insurance Proceeds, Liquidation Proceeds and other payments
and recoveries referred to in the definition of "Cash Liquidation" or "REO Disposition," as applicable, upon receipt by the Indenture
Trustee of written notification of such deposit signed by a Servicing Officer, the Indenture Trustee or any Custodian, as the case
may be, shall release to the Master Servicer the related Mortgage File and the Indenture Trustee shall execute and deliver such
instruments of transfer or assignment prepared by the Master Servicer, in each case without recourse, representation or warranty as
shall be necessary to vest in the Master Servicer or its designee, as the case may be, the related Home Equity Loan, and thereafter
such Home Equity Loan shall not be part of the Trust. Notwithstanding the foregoing or any other provision of this Agreement, in the
Master Servicer's sole discretion with respect to any defaulted Home Equity Loan or REO Property as to either of the following
provisions, (i) a Cash Liquidation or REO Disposition may be deemed to have occurred if substantially all amounts expected by the
Master Servicer to be received in connection with the related defaulted Home Equity Loan or REO Property have been received;
provided, however, a Cash Liquidation or REO Disposition shall be deemed to have occurred with respect to any Home Equity Loan that is
180 days or more delinquent as of the end of the related Collection Period; provided further, however, any subsequent collections
with respect to any such Home Equity Loan shall be deposited to the Custodial Account, and (ii) for purposes of determining the
amount of any Liquidation Proceeds, Insurance Proceeds, REO Proceeds or any other unscheduled collections or the amount of any
Liquidation Loss Amount, the Master Servicer may take into account minimal amounts of additional receipts expected to be received or
any estimated additional liquidation expenses expected to be incurred in connection with the related defaulted Home Equity Loan or
REO Property.
In the event that title to any Mortgaged Property is acquired in foreclosure by the Trust or by deed in lieu of foreclosure,
the deed or certificate of sale shall be issued in the name of the Indenture Trustee or a nominee thereof, who shall hold the same on
behalf of the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding any such acquisition of title and
cancellation of the related Home Equity Loan, such Mortgaged Property shall (except as otherwise expressly provided herein) be
considered to be an outstanding Home Equity Loan held as an asset of the Issuer until such time as such property shall be sold.
Consistent with the foregoing for purposes of all calculations hereunder, so long as such Mortgaged Property shall be considered to
be an outstanding Home Equity Loan it shall be assumed that, notwithstanding that the indebtedness evidenced by the related Loan
Agreement shall have been discharged, such Loan Agreement in effect at the time of any such acquisition of title before any
adjustment thereto by reason of any bankruptcy or similar proceeding or any moratorium or similar waiver or grace period will remain
in effect.
Any proceeds from the purchase or repurchase of any Home Equity Loan, that occur before such Home Equity Loan is deemed
liquidated, pursuant to the terms of this Servicing Agreement (including without limitation Sections 2.03, 3.15 and 3.16) will be
applied in the following order of priority: first, to the Master Servicer or the related Subservicer, all Servicing Fees payable
therefrom to the Payment Date on which such amounts are to be deposited in the Payment Account; second, as Interest Collections,
accrued and unpaid interest on the related Home Equity Loan, at the Net Loan Rate to the Payment Date on which such amounts are to be
deposited in the Payment Account; and third, as Principal Collections, as a recovery of principal on the Home Equity Loan.
Liquidation Proceeds with respect to a Liquidated Home Equity Loan will be applied in the following order of priority:
first, to reimburse the Master Servicer or the related Subservicer in accordance with this Section 3.07 for any Liquidation Expenses;
second, to the Master Servicer or the related Subservicer, all unpaid Servicing Fees through the date of receipt of the final
Liquidation Proceeds; third, as Principal Collections, as a recovery of principal on the Home Equity Loan, up to an amount equal to
the Loan Balance of the related Home Equity Loan immediately prior to the date it became a Liquidated Home Equity Loan; fourth, as
Interest Collections, accrued and unpaid interest on the related Home Equity Loan at the Net Loan Rate through the date of receipt of
the final Liquidation Proceeds; and fifth, to Foreclosure Profits.
Proceeds and other recoveries from a Home Equity Loan after it becomes a Liquidated Home Equity Loan will be applied in the
following order of priority: first, to reimburse the Master Servicer or the related Subservicer in accordance with this Section 3.07
for any expenses previously unreimbursed from Liquidation Proceeds or otherwise; second, to the Master Servicer or the related
Subservicer, all unpaid Servicing Fees payable thereto through the date of receipt of the proceeds previously unreimbursed from
Liquidation Proceeds or otherwise; third, as Interest Collections, up to an amount equal to the sum of (a) the Loan Balance of the
related Home Equity Loan immediately prior to the date it became a Liquidated Home Equity Loan, less any Net Liquidation Proceeds
previously received with respect to such Home Equity Loan and applied as a recovery of principal, and (b) accrued and unpaid interest
on the related Home Equity Loan at the Net Loan Rate through the date of deemed liquidation; and fourth, to Foreclosure Profits.
In the event of a default on a Home Equity Loan one or more of whose obligors is a Non-United States Person, in connection
with any foreclosure or acquisition of a deed in lieu of foreclosure (together, "foreclosure") in respect of such Home Equity Loan,
the Master Servicer will cause compliance with the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto) necessary to assure that no withholding tax obligation arises with respect to the proceeds of such foreclosure except to the
extent, if any, that proceeds of such foreclosure are required to be remitted to the obligors on such Home Equity Loan.
Section 3.08 ISSUER AND INDENTURE TRUSTEE TO COOPERATE. On or before each Payment Date, the Master Servicer will notify the
Indenture Trustee or the Custodian, with a copy to the Issuer, of the termination of or the payment in full and the termination of
any Home Equity Loan during the preceding Collection Period. Upon receipt of payment in full, the Master Servicer is authorized to
execute, pursuant to the authorization contained in Section 3.01, if the assignments of Mortgage have been recorded to the extent
required under the Purchase Agreement, an instrument of satisfaction regarding the related Mortgage, which instrument of satisfaction
shall be recorded by the Master Servicer if required by applicable law and be delivered to the Person entitled thereto and cause the
removal from the registration of the MERS(R)System of such Mortgage. It is understood and agreed that any expenses incurred in
connection with such instrument of satisfaction or transfer shall be reimbursed from amounts deposited in the Custodial Account.
From time to time and as appropriate for the servicing or foreclosure of any Home Equity Loan, the Indenture Trustee or the Custodian
shall, upon request of the Master Servicer and delivery to the Indenture Trustee or Custodian, with a copy to the Issuer, of a
Request for Release, in the form annexed hereto as Exhibit C, signed by a Servicing Officer, release or cause to be released the
related Mortgage File to the Master Servicer and the Issuer or Indenture Trustee shall promptly execute such documents, in the forms
provided by the Master Servicer, as shall be necessary for the prosecution of any such proceedings or the taking of other servicing
actions. Such trust receipt shall obligate the Master Servicer to return the Mortgage File to the Indenture Trustee or the Custodian
(as specified in such receipt) when the need therefor by the Master Servicer no longer exists unless the Home Equity Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer similar to that hereinabove specified, the trust
receipt shall be released to the Master Servicer.
In order to facilitate the foreclosure of the Mortgage securing any Home Equity Loan that is in default following
recordation of the assignments of Mortgage in accordance with the provisions of the Purchase Agreement, the Indenture Trustee or the
Issuer shall, if so requested in writing by the Master Servicer, promptly execute an appropriate assignment in the form provided by
the Master Servicer to assign such Home Equity Loan for the purpose of collection to the Master Servicer (any such assignment shall
unambiguously indicate that the assignment is for the purpose of collection only), and, upon such assignment, such assignee for
collection will thereupon bring all required actions in its own name and otherwise enforce the terms of the Home Equity Loan and
deposit or credit the Net Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect thereto in the Custodial
Account. In the event that all delinquent payments due under any such Home Equity Loan are paid by the Mortgagor and any other
defaults are cured, then the assignee for collection shall promptly reassign such Home Equity Loan to the Indenture Trustee and
return all Related Documents to the place where the related Mortgage File was being maintained.
In connection with the Issuer's obligation to cooperate as provided in this Section 3.08 and all other provisions of this
Servicing Agreement requiring the Issuer to authorize or permit any actions to be taken with respect to the Home Equity Loans, the
Indenture Trustee, as pledgee of the Home Equity Loans and as assignee of record of the Home Equity Loans on behalf of the Issuer
pursuant to Section 3.13 of the Indenture, expressly agrees, on behalf of the Issuer, to take all such actions on behalf of the
Issuer and to promptly execute and return all instruments reasonably required by the Master Servicer in connection therewith;
provided, that if the Master Servicer shall request a signature of the Indenture Trustee, on behalf of the Issuer, the Master Servicer
will deliver to the Indenture Trustee an Officer's Certificate stating that such signature is necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties under this Servicing Agreement.
Section 3.09 SERVICING COMPENSATION; PAYMENT OF CERTAIN EXPENSES BY MASTER SERVICER. The Master Servicer shall be entitled to
receive the Master Servicing Fee in accordance with Sections 3.02 and 3.03 as compensation for its services in connection with
servicing the Home Equity Loans. Subject to Section 3.07, in the event that Liquidation Proceeds, Insurance Proceeds and REO
Proceeds in respect of a Cash Liquidation or REO Disposition exceed the unpaid Loan Balance of such Home Equity Loan plus unpaid
interest accrued thereon (including REO Imputed Interest) at the related Net Loan Rate, the Master Servicer shall be entitled to
retain therefrom and to pay to itself and/or the related Subservicer, any Foreclosure Profits. Additional servicing compensation in
the form of assumption fees, investment income on amounts in the Custodial Account or the Certificate Distribution Account or
otherwise shall be retained by the Master Servicer or the Subservicer to the extent provided herein. Moreover, additional servicing
compensation in the form of late payment charges, investment income on amounts in the Payment Account and other receipts not required
to be deposited in the Custodial Account as specified in Section 3.02(b) shall be retained by the Master Servicer. The Master
Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder (including payment of all
other fees and expenses not expressly stated hereunder to be for the account of the Securityholders, including, without limitation,
the fees and expenses of the Owner Trustee, Indenture Trustee and any Custodian) and shall not be entitled to reimbursement therefor.
Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. (a) The Master Servicer will deliver to the Depositor, the Issuer, the
Credit Enhancer and the Indenture Trustee on or before the earlier of (a) March 31 of each year or (b) with respect to any calendar
year during which the Depositor's annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, the date on which the annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission, a servicer compliance certificate, signed by an authorized officer
of the Master Servicer, as described in Item 1123 of Regulation AB, to the effect that:
(i) A review of the Master Servicer's activities during the reporting period and of its performance under this
Servicing Agreement has been made under such officer's supervision.
(ii) To the best of such officer's knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Servicing Agreement in all material respects throughout the reporting period or, if there has been a failure
to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status
thereof.
The Master Servicer shall use commercially reasonable efforts to obtain from all other parties participating in the
servicing function any additional certifications required under Item 1123 of Regulation AB to the extent required to be included in a
Report on Form 10-K; provided, however, that a failure to obtain such certifications shall not be a breach of the Master Servicer's
duties hereunder if any such party fails to deliver such a certification.
(b) The Master Servicer shall deliver to the Issuer and the Indenture Trustee, with a copy to the Credit
Enhancer, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice
by means of an Officer's Certificate of any event which with the giving of notice or the lapse of time or both, would become a
Servicing Default.
Section 3.11 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT. On or before the earlier of (a) March 31 of each year or
(b) with respect to any calendar year during which the Depositor's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, the date on which the annual report is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission, the Master Servicer at its expense shall cause a
firm of independent public accountants, which shall be members of the American Institute of Certified Public Accountants, to furnish
a report to the Depositor and the Indenture Trustee the attestation required under Item 1122(b) of Regulation AB. In rendering such
statement, such firm may rely, as to matters relating to the direct servicing of home equity loans by Subservicers, upon comparable
statements for examinations conducted by independent public accountants substantially in accordance with standards established by the
American Institute of Certified Public Accountants (rendered within one year of such statement) with respect to such Subservicers.
Section 3.12 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE HOME EQUITY LOANS. The Master Servicer shall provide
to the Credit Enhancer, any Securityholder upon reasonable request (or a regulator for a Securityholder) or the Indenture Trustee,
reasonable access to the documentation regarding the Home Equity Loans such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the Master Servicer. Nothing in this Section 3.12 shall
derogate from the obligation of the Master Servicer to observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as provided in this Section 3.12 as a result of such obligation
shall not constitute a breach of this Section 3.12.
Section 3.13 MAINTENANCE OF CERTAIN SERVICING INSURANCE POLICIES. The Master Servicer shall during the term of its service as
servicer maintain in force (i) a policy or policies of insurance covering errors and omissions in the performance of its obligations
as master servicer hereunder and (ii) a fidelity bond in respect of its officers, employees or agents. Each such policy or policies
and bond shall be at least equal to the coverage that would be required by Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, for
Persons performing servicing for Home Equity Loans purchased by such entity. Coverage of the Master Servicer under a policy or bond
obtained by an Affiliate of the Master Servicer and providing the coverage required by this Section 3.13 shall satisfy the
requirements of this Section 3.13.
Section 3.14 INFORMATION REQUIRED BY THE INTERNAL REVENUE SERVICE AND REPORTS OF FORECLOSURES AND ABANDONMENTS OF MORTGAGED
PROPERTY. The Master Servicer shall prepare and deliver all federal and state information reports with respect to the Home Equity
Loans when and as required by all applicable state and federal income tax laws. In particular, with respect to the requirement under
Section 6050J of the Code to the effect that the Master Servicer or Subservicer shall make reports of foreclosures and abandonments
of any mortgaged property for each year beginning in 2006, the Master Servicer or Subservicer shall file reports relating to each
instance occurring during the previous calendar year commencing with the fiscal year 2006 in which the Master Servicer (i) on behalf
of the Issuer, acquires an interest in any Mortgaged Property through foreclosure or other comparable conversion in full or partial
satisfaction of a Home Equity Loan, or (ii) knows or has reason to know that any Mortgaged Property has been abandoned. The reports
from the Master Servicer or Subservicer shall be in form and substance sufficient to meet the reporting requirements imposed by
Section 6050J and Section 6050H (reports relating to mortgage interest received) of the Code.
Section 3.15 OPTIONAL REPURCHASE OR TRANSFER OF HOME EQUITY LOANS.
(a) Notwithstanding any provision in Section 3.07 to the contrary, the Master Servicer, at its option and in
its sole discretion, may repurchase any Home Equity Loan that is delinquent in payment for a period of 90 days or longer for a price
equal to the Repurchase Price; provided that such Home Equity Loan is 90 days or more delinquent at the time of repurchase. If at
any time the Master Servicer makes a payment to the Payment Account covering the amount of the Repurchase Price for such a Home
Equity Loan, and the Master Servicer provides to the Indenture Trustee a certification signed by a Servicing Officer stating that the
amount of such payment has been deposited in the Payment Account, then the Indenture Trustee shall execute the assignment of such
Home Equity Loan at the request of the Master Servicer without recourse, representation or warranty to the Master Servicer which
shall succeed to all the Indenture Trustee's right, title and interest in and to such Loan, and all security and documents relative
thereto. Such assignment shall be an assignment outright and not for security. The Master Servicer will thereupon own such Home
Equity Loan, and all such security and documents, free of any further obligation to the Indenture Trustee or the Securityholders with
respect thereto.
(b) Subject to the conditions set forth below, the Master Servicer, upon receipt of written notice and
direction from the Issuer, shall cause the retransfer of Home Equity Loans from the Indenture Trustee to the Issuer as of the close
of business on a Payment Date (the "Transfer Date"). On the fifth Business Day (the "Transfer Notice Date") prior to the Transfer
Date designated in such notice, the Master Servicer shall give the Indenture Trustee, the Rating Agencies and the Credit Enhancer a
notice of the proposed retransfer that contains a list of the Home Equity Loans to be retransferred. Such retransfers of Home Equity
Loans shall be permitted upon satisfaction of the following conditions:
(i) No Amortization Event has occurred or will result from such retransfer;
(ii) On the Transfer Date, the Overcollateralization Amount (after giving effect to the removal from the Trust of the Home Equity
Loans proposed to be transferred) will equal or exceed the Required Overcollateralization Amount;
(iii) On or before the Transfer Date, the Master Servicer shall have delivered to the Indenture Trustee and the Custodian a
revised Home Equity Loan Schedule showing that the Home Equity Loans are no longer owned by the Trust;
(iv) The Master Servicer shall represent and warrant that the Home Equity Loans to be removed from the Trust were selected at
random and the Master Servicer shall have received the consent of the Credit Enhancer as to the selection of the particular Home
Equity Loans to be removed; and
(v) The Master Servicer shall have delivered to the Indenture Trustee and the Credit Enhancer an officer's certificate
certifying that the items set forth in subparagraphs (i) through (iv), inclusive, have been performed or are true and correct, as the
case may be. The Indenture Trustee may conclusively rely on such officer's certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability in so relying.
The Master Servicer shall not be permitted to effect the retransfer of any Home Equity Loan except under the conditions
specified above. Upon receiving the requisite notice and direction from the Issuer, the Master Servicer shall perform in a timely
manner those acts required of it, as specified above. Upon satisfaction of the above conditions, on the Transfer Date the Indenture
Trustee shall deliver, or cause to be delivered, to the Issuer a written itemization of each Home Equity Loan being transferred,
together with the Mortgage File for each such Home Equity Loan, and the Indenture Trustee shall execute and deliver to the Issuer or
its designee such other documents prepared by the Master Servicer as shall be reasonably necessary to transfer such Home Equity Loans
to the Certificateholders. Any such transfer of the Trust's right, title and interest in and to the Home Equity Loans shall be
without recourse, representation or warranty by or of the Indenture Trustee or the Trust to the Issuer or its designee.
Section 3.16 LIMITED HOME EQUITY LOAN REPURCHASE RIGHT. The Limited Repurchase Right Holder will have the irrevocable option at
any time to purchase any of the Home Equity Loans at the Repurchase Price, up to a maximum of five Home Equity Loans. In the event
that this option is exercised as to any five Home Equity Loans in the aggregate, this option will thereupon terminate. If at any
time the Limited Repurchase Right Holder makes a payment to the Custodial Account covering the amount of the Repurchase Price for
such a Home Equity Loan, and the Limited Repurchase Right Holder provides to the Indenture Trustee a certification signed by a
Servicing Officer stating that the amount of such payment has been deposited in the Custodial Account, then the Indenture Trustee
shall execute the assignment of such Home Equity Loan at the request of the Limited Repurchase Right Holder without recourse to the
Limited Repurchase Right Holder which shall succeed to all the Indenture Trustee's right, title and interest in and to such Home
Equity Loan, and all security and documents relative thereto. Such assignment shall be an assignment outright and not for security.
The Limited Repurchase Right Holder will thereupon own such Mortgage, and all such security and documents, free of any further
obligation to the Indenture Trustee with respect thereto.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01 STATEMENTS TO SECURITYHOLDERS. (a) With respect to each Payment Date, on the Business Day following the related
Determination Date, the Master Servicer shall forward to the Indenture Trustee and the Indenture Trustee pursuant to Section 3.26 of
the Indenture shall forward or cause to be forwarded by mail or otherwise make available electronically at xxx.xxxxxxxx.xxx/xxx to
each Certificateholder, Noteholder, the Credit Enhancer, the Depositor, the Owner Trustee, the Certificate Paying Agent and each
Rating Agency, a statement setting forth the following information (the "Servicing Certificate") as to the Notes and Certificates, to
the extent applicable:
(i) the applicable Record Date, Determination Date and Payment Date;
(ii) the aggregate amount of payments received with respect to the Home Equity Loans, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the identity of the party receiving such fees or expenses;
(v) the aggregate amount of (a) Interest Collections, (b) Principal Collections and (c) Substitution Adjustment Amounts for such
Collection Period;
(vi) the amount paid as principal to the Noteholders of each Class of Notes;
(vii) the amount paid as interest to the Noteholders of each Class of Notes, separately stating the portion thereof in respect of
Prepayment Interest Shortfalls, Relief Act Shortfalls or Net WAC Cap Shortfalls, if any;
(viii) the aggregate Interest Distribution Amount remaining unpaid, if any, for each Class of Notes, after giving effect to the
payments made on such Payment Date;
(ix) [Reserved];
(x) the amount of any draw on the Policy for such Payment Date, the amount paid to the Credit Enhancer in reimbursement for
prior draws and the aggregate amount of prior draws under the Policy not yet reimbursed;
(xi) the amount of such distribution as principal and interest to the Certificateholders of the Certificates, separately stating
the portion thereof which resulted in a reduction of the Certificate Loan Balance thereof;
(xii) the aggregate Loan Balance of the Home Equity Loans as of the end of the preceding Collection Period;
(xiii) the aggregate amount of Additional Balances on the Home Equity Loans created during the previous Collection Period conveyed
to the Issuer;
(xiv) the number and aggregate Loan Balances of Home Equity Loans (a) as to which the Minimum Monthly Payment is Delinquent for
30-59 days, 60-89 days and 90 or more days, respectively, (b) that are foreclosed and (c) that have become REO, in each case as of
the end of the related Collection Period; provided, however, that such information will not be provided on the statements relating to
the first Payment Date;
(xv) the Note Rate and the Net WAC Rate for the related Collection Period;
(xvi) the aggregate Liquidation Loss Amounts with respect to the related Collection Period, the amount of any Liquidation Loss
Distribution Amounts with respect to the Notes, and the aggregate of the Liquidation Loss Amounts from all Collection Periods to date
expressed as dollars and as a percentage of the aggregate Cut-off Date Loan Balance;
(xvii) the aggregate Bankruptcy Losses and losses caused by or resulting from an Extraordinary Event with respect to the related
Collection Period and the aggregate of each of such losses from all Collection Periods to date;
(xviii) the Security Balance of each Class of Notes and the Certificate Principal Balance of the Certificates after giving effect to
the distribution of principal on such Payment Date;
(xix) the aggregate Servicing Fees for the related Collection Period and the aggregate amount of Draws for the related Collection
Period;
(xx) the number and amount of any increases in the Credit Limits of the Home Equity Loans during the related Collection Period;
(xxi) the Overcollateralization Amount, the Undercollateralization Amount and the Required Overcollateralization Amount
immediately following such Payment Date; and
(xxii) any material modifications, extensions or waivers to the terms of the Home Equity Loans during the Collection Period or that
have cumulatively become material over time;
(xxiii) any material breaches of Home Equity Loan representations or warranties or covenants in the Purchase Agreement;
(xxiv) the number and principal amount of release agreements pursuant to Section 3.05(c) entered into during the calendar year and
since the Closing Date, stated separately, for the Home Equity Loans and, the aggregate outstanding principal amount of such release
agreements expressed as a percentage of the Pool Balance with information provided separately with respect to all Unsecured Loans and
(2) the number and principal amount of Capitalization Workouts pursuant to Section 3.02(a)(v) entered into during the calendar year
and since the Closing Date and the aggregate outstanding amount of the Capitalization Workouts expressed as a percentage of the Pool
Balance; and
(xxv) the calculation of any Servicing Trigger or Trigger Event.
In the case of information furnished pursuant to clauses (ii) and (iii) above, the amounts shall be expressed as an
aggregate dollar amount per Variable Funding Note, Term Note or Certificate, as applicable, with a $1,000 denomination.
If an Amortization Event or Servicing Default shall occur, on the Business Day following the related Determination Date, the
Master Servicer shall forward to the Indenture Trustee, a statement of such effect, including the nature of such Amortization Event
or Servicing Default. The Indenture Trustee shall deliver or cause to be delivered by mail to the Credit Enhancer notice of such
Amortization Event or Servicing Default, including, the nature thereof. Such statement may be included in, or separate from, the
regular statement to Securityholders.
In addition, the Master Servicer shall forward to the Indenture Trustee any other information reasonably requested by the
Indenture Trustee necessary to make distributions pursuant to Section 3.05 of the Indenture. Prior to the close of business on the
Business Day next succeeding each Determination Date, the Master Servicer shall furnish a written statement to the Certificate Paying
Agent and the Indenture Trustee setting forth the aggregate amounts required to be withdrawn from the Custodial Account and deposited
into the Payment Account on the Business Day preceding the related Payment Date pursuant to Section 3.03. The determination by the
Master Servicer of such amounts shall be presumptively deemed to be correct for all purposes hereunder and the Owner Trustee and
Indenture Trustee shall be protected in relying upon the same without any independent check or verification. In addition, upon the
Issuer's written request, the Master Servicer shall promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Master Servicer to enable the Issuer to perform its federal and state income tax reporting obligations.
Section 4.02 TAX REPORTING. So long as Residential Funding Corporation or any Affiliate thereof owns 100% of the Certificates,
then no separate federal and state income tax returns and information returns or reports will be filed with respect to the Issuer,
and the Issuer will be treated as an entity wholly owned by Residential Funding Corporation or an affiliate thereof.
Section 4.03 EXCHANGE ACT REPORTING.
(a) The Master Servicer shall, on behalf of the Depositor and in respect of the Trust Estate, sign and cause to be filed
with the Commission any periodic reports required to be filed under the provisions of the Exchange Act, and the rules and regulations
of the Commission thereunder including, without limitation, reports on Form 10-K, Form 10-D and Form 8-K. In connection with the
preparation and filing of such periodic reports, the Indenture Trustee shall timely provide to the Master Servicer (I) a list of
Securityholders as shown on the Certificate Register and the Note Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims, charges or complaints involving the Indenture Trustee,
as trustee hereunder, or the Trust Estate that are received by the Indenture Trustee, (III) notice of all matters that, to the actual
knowledge of a Responsible Officer of the Indenture Trustee, have been submitted to a vote of the Securityholders, other than those
matters that have been submitted to a vote of the Securityholders at the request of the Depositor or the Master Servicer, and (IV)
notice of any failure of the Indenture Trustee to make any distribution to the Securityholders as required pursuant to this
Agreement. Neither the Master Servicer nor the Indenture Trustee shall have any liability with respect to the Master Servicer's
failure to properly prepare or file such periodic reports resulting from or relating to the Master Servicer's inability or failure to
obtain any information not resulting from the Master Servicer's own negligence or willful misconduct
(b) Any Form 10-K filed with the Commission in connection with this Section 4.03 shall include:
(i) A certification, signed by the senior officer in charge of the servicing functions of the Master Servicer, in the form
attached as Exhibit E hereto or such other form as may be required or permitted by the Commission (the "Form 10-K Certification"), in
compliance with Rules 13a-14 and 15d-14 under the Exchange Act and any additional directives of the Commission.
(ii) A report regarding its assessment of compliance during the preceding calendar year with all applicable servicing criteria
set forth in relevant Commission regulations with respect to mortgage-backed securities transactions taken as a whole involving the
Master Servicer that are backed by the same types of assets as those backing the certificates, as well as similar reports on
assessment of compliance received from other parties participating in the servicing function as required by relevant Commission
regulations, as described in Item 1122(a) of Regulation AB. The Master Servicer shall obtain from all other parties participating in
the servicing function any required certifications.
(iii) With respect to each assessment report described immediately above, a report by a registered public accounting firm that
attests to, and reports on, the assessment made by the asserting party, as set forth in relevant Commission regulations, as described
in Regulation 1122(b) of Regulation AB and Section 3.11.
(iv) The servicer compliance certificate required to be delivered pursuant Section 3.10.
(c) In connection with the Form 10-K Certification, the Indenture Trustee shall provide the Master Servicer with a
back-up certification substantially in the form attached hereto as Exhibit F.
(d) This Section 4.03 may be amended in accordance with this Servicing Agreement without the consent of the
Securityholders.
(e) The Indenture Trustee shall make available on the Indenture Trustee's internet website each of the reports filed
with the Commission by or on behalf of the Depositor under the Exchange Act, as soon as reasonably practicable upon delivery of such
reports to the Indenture Trustee.
ARTICLE V
PAYMENT ACCOUNT
Section 5.01 PAYMENT ACCOUNT. The Indenture Trustee shall establish and maintain a Payment Account titled "JPMorgan Chase Bank,
N.A., as Indenture Trustee, for the benefit of the Securityholders, the Certificate Paying Agent and the Credit Enhancer pursuant to
the Indenture, dated as of July 28, 2006, between Home Equity Loan Trust 2006-HSA4 and JPMorgan Chase Bank, N.A." The Payment
Account shall be an Eligible Account. On each Payment Date, amounts on deposit in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture. The Indenture Trustee shall, upon written request from the
Master Servicer, invest or cause the institution maintaining the Payment Account to invest the funds in the Payment Account in
Permitted Investments designated in the name of the Indenture Trustee, which shall mature not later than the Business Day next
preceding the Payment Date next following the date of such investment (except that (i) any investment in the institution with which
the Payment Account is maintained or any investment in a fund for which the institution acts as a custodian, may mature on such
Payment Date and (ii) any other investment may mature on such Payment Date if the Indenture Trustee shall advance funds on such
Payment Date to the Payment Account in the amount payable on such investment on such Payment Date, pending receipt thereof to the
extent necessary to make distributions on the Securities) and shall not be sold or disposed of prior to maturity. All income and
gain realized from any such investment shall be for the benefit of the Master Servicer and shall be subject to its withdrawal or
order from time to time. The amount of any losses incurred in respect of any such investments shall be deposited in the Payment
Account by the Master Servicer out of its own funds immediately as realized.
ARTICLE VI
THE MASTER SERVICER
Section 6.01 LIABILITY OF THE MASTER SERVICER. The Master Servicer shall be liable in accordance herewith only to the extent of
the obligations specifically imposed upon and undertaken by the Master Servicer herein.
Section 6.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE MASTER SERVICER. Any corporation into which
the Master Servicer may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Master Servicer shall be a party, or any corporation succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
The Master Servicer may assign its rights and delegate its duties and obligations under this Servicing Agreement; provided,
that the Person accepting such assignment or delegation shall be a Person which is qualified to service Home Equity Loans, is
reasonably satisfactory to the Indenture Trustee (as pledgee of the Home Equity Loans), the Issuer and the Credit Enhancer, is
willing to service the Home Equity Loans and executes and delivers to the Indenture Trustee and the Issuer an agreement, in form and
substance reasonably satisfactory to the Credit Enhancer, the Indenture Trustee and the Issuer, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and condition to be performed or observed by the Master
Servicer under this Servicing Agreement; provided, further, that each Rating Agency's rating of the Securities in effect immediately
prior to such assignment and delegation will not be qualified, reduced, or withdrawn as a result of such assignment and delegation
(as evidenced by a letter to such effect from each Rating Agency), if determined without regard to the Policy; and provided, further,
that the Owner Trustee receives an Opinion of Counsel to the effect that such assignment or delegation shall not cause the Trust to
be treated as a corporation for federal or state income tax purposes.
Notwithstanding anything to the contrary set forth herein, any Person into which the Master Servicer may be merged or
converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the
Master Servicer shall be a party, or any Person succeeding to the business of the Master Servicer, shall be the successor of the
Master Servicer, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto.
The conversion of Residential Funding Corporation's organizational structure from a Delaware corporation to a limited
liability company shall not require the consent of any party or notice to any party and shall not in any way affect the rights or
obligations of Residential Funding Corporation hereunder.
Section 6.03 LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS. Neither the Master Servicer nor any of the directors or
officers or employees or agents of the Master Servicer shall be under any liability to the Issuer, the Owner Trustee, the Indenture
Trustee or the Securityholders for any action taken or for refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect the Master Servicer or any such Person against any
liability which would otherwise be imposed by reason of its willful misfeasance, bad faith or gross negligence in the performance of
its duties hereunder or by reason of its reckless disregard of its obligations and duties hereunder. The Master Servicer and any
director or officer or employee or agent of the Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising hereunder. The Master Servicer and any director or
officer or employee or agent of the Master Servicer shall be indemnified by the Issuer and held harmless against any loss, liability
or expense incurred in connection with any legal action relating to this Servicing Agreement or the Securities, including any amount
paid to the Owner Trustee or the Indenture Trustee pursuant to Section 6.06(b), other than any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to service the Home Equity Loans in accordance with this
Servicing Agreement, and which in its opinion may involve it in any expense or liability; provided, however, that the Master Servicer
may in its sole discretion undertake any such action which it may deem necessary or desirable in respect of this Servicing Agreement,
and the rights and duties of the parties hereto and the interests of the Securityholders. In such event, the reasonable legal
expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Issuer, and
the Master Servicer shall be entitled to be reimbursed therefor. The Master Servicer's right to indemnity or reimbursement pursuant
to this Section 6.03 shall survive any resignation or termination of the Master Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such resignation or termination (or arising from events that
occurred prior to such resignation or termination).
Section 6.04 MASTER SERVICER NOT TO RESIGN. Subject to the provisions of Section 6.02, the Master Servicer shall not resign from
the obligations and duties hereby imposed on it except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other activities of the Master Servicer so causing such a conflict
being of a type and nature carried on by the Master Servicer or its subsidiaries or Affiliates at the date of this Servicing
Agreement or (ii) upon satisfaction of the following conditions: (a) the Master Servicer has proposed a successor servicer to the
Issuer and the Indenture Trustee in writing and such proposed successor servicer is reasonably acceptable to the Issuer, the
Indenture Trustee and the Credit Enhancer; (b) each Rating Agency shall have delivered a letter to the Issuer, the Credit Enhancer
and the Indenture Trustee prior to the appointment of the successor servicer stating that the proposed appointment of such successor
servicer as Master Servicer hereunder will not result in the reduction or withdrawal of the then current rating of the Securities, if
determined without regard to the Policy; and (c) such proposed successor servicer is reasonably acceptable to the Credit Enhancer, as
evidenced by a letter to the Issuer and the Indenture Trustee; provided, however, that no such resignation by the Master Servicer
shall become effective until such successor servicer or, in the case of (i) above, the Indenture Trustee, as pledgee of the Home
Equity Loans, shall have assumed the Master Servicer's responsibilities and obligations hereunder or the Indenture Trustee, as
pledgee of the Home Equity Loans, shall have designated a successor servicer in accordance with Section 7.02. Any such resignation
shall not relieve the Master Servicer of responsibility for any of the obligations specified in Sections 7.01 and 7.02 as obligations
that survive the resignation or termination of the Master Servicer. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Indenture Trustee and the Credit Enhancer.
Section 6.05 DELEGATION OF DUTIES. In the ordinary course of business, the Master Servicer at any time may delegate any of its
duties hereunder to any Person, including any of its Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those with which the Master Servicer complies pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and shall not constitute a resignation within the
meaning of Section 6.04.
Section 6.06 MASTER SERVICER TO PAY INDENTURE TRUSTEE'S AND OWNER TRUSTEE'S FEES AND EXPENSES; INDEMNIFICATION. (a) The Master
Servicer covenants and agrees to pay to the Owner Trustee, the Indenture Trustee and any co-trustee of the Indenture Trustee or the
Owner Trustee from time to time, and the Owner Trustee, the Indenture Trustee and any such co-trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by each of them in the execution of the trusts created under the Trust Agreement and the Indenture
and in the exercise and performance of any of the powers and duties under the Trust Agreement or the Indenture, as the case may be,
of the Owner Trustee, the Indenture Trustee and any co-trustee, and the Master Servicer will pay or reimburse the Indenture Trustee
and any co-trustee upon request for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee or
any co-trustee in accordance with any of the provisions of this Servicing Agreement or the Indenture except any such expense,
disbursement or advance as may arise from its negligence, willful misfeasance or bad faith.
(b) The Master Servicer agrees to indemnify the Indenture Trustee and the Owner Trustee for, and to hold the
Indenture Trustee and the Owner Trustee, as the case may be, harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Indenture Trustee or the Owner Trustee, as the case may be, arising
out of, or in connection with, the acceptance and administration of the Issuer and the assets thereof, including the costs and
expenses (including reasonable legal fees and expenses) of defending the Indenture Trustee or the Owner Trustee, as the case may be,
against any claim in connection with the exercise or performance of any of its powers or duties under any Basic Document, provided
that:
(i) with respect to any such claim, the Indenture Trustee or Owner Trustee, as the case may be, shall have given the Master
Servicer written notice thereof promptly after the Indenture Trustee or Owner Trustee, as the case may be, shall have actual
knowledge thereof;
(ii) while maintaining control over its own defense, the Issuer, the Indenture Trustee or Owner Trustee, as the case may be,
shall cooperate and consult fully with the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Servicing Agreement to the contrary, the Master Servicer shall not be liable for settlement
of any claim by the Indenture Trustee or the Owner Trustee, as the case may be, entered into without the prior consent of the Master
Servicer.
No termination of this Servicing Agreement shall affect the obligations created by this Section 6.06 of the Master Servicer
to indemnify the Indenture Trustee and the Owner Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the Master Servicer in this Section 6.06(b) shall not be
available (a) for any loss, liability or expense of the Indenture Trustee or the Owner Trustee, including the costs and expenses of
defending itself against any claim, incurred in connection with any actions taken by the Indenture Trustee or the Owner Trustee at
the direction of the Noteholders or Certificateholders, as the case may be, pursuant to the terms of this Servicing Agreement or (b)
where indemnification by the Indenture Trustee is required pursuant to Section 9.05(a).
ARTICLE VII
DEFAULT
Section 7.01 SERVICING DEFAULT. If any one of the following events ("Servicing Default") shall occur and be continuing:
(a) Any failure by the Master Servicer to deposit in the Custodial Account or Payment Account any deposit
required to be made under the terms of this Servicing Agreement which continues unremedied for a period of five Business Days after
the date upon which written notice of such failure shall have been given to the Master Servicer by the Issuer or the Indenture
Trustee, or to the Master Servicer, the Issuer and the Indenture Trustee by the Credit Enhancer; or
(b) Failure on the part of the Master Servicer duly to observe or perform in any material respect any other
covenants or agreements of the Master Servicer set forth in the Securities or in this Servicing Agreement, which failure, in each
case, materially and adversely affects the interests of Securityholders or the Credit Enhancer and which continues unremedied for a
period of 45 days after the date on which written notice of such failure, requiring the same to be remedied, and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the Master Servicer by the Issuer or the Indenture Trustee, or to
the Master Servicer, the Issuer and the Indenture Trustee by the Credit Enhancer; or
(c) The entry against the Master Servicer of a decree or order by a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a trustee, conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding
up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60
consecutive days; or
(d) The Master Servicer shall voluntarily go into liquidation, consent to the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or of or relating to all or substantially all of its property, or a decree or order
of a court, agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver,
liquidator or similar person in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and such decree or order
shall have remained in force undischarged, unbonded or unstayed for a period of 60 days; or the Master Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations,
then, and in every such case, so long as a Servicing Default shall not have been remedied by the Master Servicer, either the Issuer
or the Indenture Trustee, with the consent of the Credit Enhancer, or the Credit Enhancer, by notice then given in writing to the
Master Servicer (and to the Issuer and the Indenture Trustee if given by the Credit Enhancer) may terminate all of the rights and
obligations of the Master Servicer as servicer under this Servicing Agreement other than its right to receive servicing compensation
and expenses for servicing the Home Equity Loans hereunder during any period prior to the date of such termination and the Issuer or
the Indenture Trustee, with the consent of the Credit Enhancer, or the Credit Enhancer may exercise any and all other remedies
available at law or equity. Any such notice to the Master Servicer shall also be given to each Rating Agency, the Credit Enhancer
and the Issuer. On or after the receipt by the Master Servicer of such written notice, all authority and power of the Master
Servicer under this Servicing Agreement, whether with respect to the Securities or the Home Equity Loans or otherwise, shall pass to
and be vested in the Indenture Trustee as pledgee of the Home Equity Loans, as successor Master Servicer pursuant to and under this
Section 7.01; and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Master Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and
endorsement of each Home Equity Loan and related documents, or otherwise. The Master Servicer agrees to cooperate with the Indenture
Trustee in effecting the termination of the responsibilities and rights of the Master Servicer hereunder, including, without
limitation, the transfer to the Indenture Trustee for the administration by it of all cash amounts relating to the Home Equity Loans
that shall at the time be held by the Master Servicer and to be deposited by it in the Custodial Account, or that have been deposited
by the Master Servicer in the Custodial Account or thereafter received by the Master Servicer with respect to the Home Equity Loans.
All reasonable costs and expenses (including, but not limited to, attorneys' fees) incurred in connection with amending this
Servicing Agreement to reflect such succession as Master Servicer pursuant to this Section 7.01 shall be paid by the predecessor
Master Servicer (or if the predecessor Master Servicer is the Indenture Trustee, the initial Master Servicer) upon presentation of
reasonable documentation of such costs and expenses.
Notwithstanding any termination of the activities of the Master Servicer hereunder, the Master Servicer shall be entitled to
receive, out of any late collection of a payment on a Home Equity Loan which was due prior to the notice terminating the Master
Servicer's rights and obligations hereunder and received after such notice, that portion to which the Master Servicer would have been
entitled pursuant to Sections 3.03 and 3.09 as well as its Master Servicing Fee in respect thereof, and any other amounts payable to
the Master Servicer hereunder the entitlement to which arose prior to the termination of its activities hereunder.
Notwithstanding the foregoing, a delay in or failure of performance under Section 7.01(a) or under Section 7.01(b) after the
applicable grace periods specified in such Sections, shall not constitute a Servicing Default if such delay or failure could not be
prevented by the exercise of reasonable diligence by the Master Servicer and such delay or failure was caused by an act of God or the
public enemy, acts of declared or undeclared war, public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall not relieve the Master Servicer from using
reasonable efforts to perform its respective obligations in a timely manner in accordance with the terms of this Servicing Agreement
and the Master Servicer shall provide the Indenture Trustee, the Credit Enhancer and the Securityholders with notice of such failure
or delay by it, together with a description of its efforts to so perform its obligations. The Master Servicer shall immediately
notify the Indenture Trustee, the Credit Enhancer and the Owner Trustee in writing of any Servicing Default.
Section 7.02 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Master Servicer receives a notice of termination pursuant to Section 7.01 or sends a notice pursuant to
Section 6.04, the Indenture Trustee as pledgee of the Home Equity Loans shall be the successor in all respects to the Master Servicer
in its capacity as servicer under this Servicing Agreement and the transactions set forth or provided for herein and shall be subject
to all the responsibilities, duties and liabilities relating thereto placed on the Master Servicer by the terms and provisions
hereof. Nothing in this Servicing Agreement or in the Trust Agreement shall be construed to permit or require the Indenture Trustee
as successor Master Servicer to (i) succeed to the responsibilities, duties and liabilities of the initial Master Servicer in its
capacity as Seller under the Purchase Agreement, (ii) be responsible or accountable for any act or omission of the Master Servicer
prior to the issuance of a notice of termination hereunder, (iii) require or obligate the Indenture Trustee, in its capacity as
successor Master Servicer, to purchase, repurchase or substitute any Home Equity Loan, (iv) fund any Additional Balances with respect
to any Home Equity Loan, (v) fund any losses on any Permitted Investment directed by any other Master Servicer, or (vi) be
responsible for the representations and warranties of the Master Servicer. As compensation therefor, the Indenture Trustee as
successor Master Servicer shall be entitled to such compensation as the Master Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, (i) if the Indenture Trustee is unwilling to act as successor
Master Servicer, or (ii) if the Indenture Trustee is legally unable so to act, the Indenture Trustee as pledgee of the Home Equity
Loans may (in the situation described in clause (i)) or shall (in the situation described in clause (ii)) appoint or petition a court
of competent jurisdiction to appoint any established housing and home finance institution, bank or other mortgage loan or home equity
loan servicer having a net worth of not less than $10,000,000 as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master Servicer hereunder; provided, that any such successor
Master Servicer shall be acceptable to the Credit Enhancer, as evidenced by the Credit Enhancer's prior written consent which consent
shall not be unreasonably withheld and provided further, that the appointment of any such successor Master Servicer will not result
in the qualification, reduction or withdrawal of the ratings assigned to the Securities by the Rating Agencies, if determined without
regard to the Policy. Pending appointment of a successor to the Master Servicer here under, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive compensation out of payments on Home Equity Loans in an amount
equal to the compensation which the Master Servicer would otherwise have received pursuant to Section 3.09 (or such lesser
compensation as the Indenture Trustee and such successor shall agree). The appointment of a successor Master Servicer shall not
affect any liability of the predecessor Master Servicer which may have arisen under this Servicing Agreement prior to its termination
as Master Servicer (including, without limitation, the obligation to purchase Home Equity Loans pursuant to Section 3.01, to pay any
deductible under an insurance policy pursuant to Section 3.04 or to indemnify the Indenture Trustee pursuant to Section 6.06), nor
shall any successor Master Servicer be liable for any acts or omissions of the predecessor Master Servicer or for any breach by such
Master Servicer of any of its representations or warranties contained herein or in any related document or agreement. The Indenture
Trustee and such successor shall take such action, consistent with this Servicing Agreement, as shall be necessary to effectuate any
such succession.
(b) Any successor, including the Indenture Trustee, to the Master Servicer as servicer shall during the term of
its service as servicer (i) continue to service and administer the Home Equity Loans for the benefit of the Securityholders, (ii)
maintain in force a policy or policies of insurance covering errors and omissions in the performance of its obligations as Master
Servicer hereunder and a fidelity bond in respect of its officers, employees and agents to the same extent as the Master Servicer is
so required pursuant to Section 3.13 and (iii) be bound by the terms of the Insurance Agreement.
(c) Any successor Master Servicer, including the Indenture Trustee, shall not be deemed in default or to have
breached its duties hereunder if the predecessor Master Servicer shall fail to deliver any required deposit to the Custodial Account
or otherwise cooperate with any required servicing transfer or succession hereunder.
(d) In connection with the termination or resignation of the Master Servicer hereunder, either (i) the
successor Master Servicer, including the Indenture Trustee if the Indenture Trustee is acting as successor Master Servicer, shall
represent and warrant that it is a member of MERS in good standing and shall agree to comply in all material respects with the rules
and procedures of MERS in connection with the servicing of the Home Equity Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS' rules and regulations, or (ii) the predecessor Master
Servicer shall cooperate with the successor Master Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Indenture Trustee and to execute and deliver such other notices, documents
and other instruments as may be necessary or desirable to effect a transfer of such Home Equity Loan or servicing of such Home Equity
Loan on the MERS(R)System to the successor Master Servicer. The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any assignments of Mortgage that may be required under this
subsection (d). The successor Master Servicer shall cause such assignment to be delivered to the Indenture Trustee or the Custodian
promptly upon receipt of the original with evidence of recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03 NOTIFICATION TO SECURITYHOLDERS. Upon any termination of or appointment of a successor to the Master Servicer
pursuant to this Article VII or Section 6.04, the Indenture Trustee shall give prompt written notice thereof to the Securityholders,
the Credit Enhancer, the Issuer and each Rating Agency.
Section 7.04 SERVICING TRIGGER; REMOVAL OF MASTER SERVICER .
(a) Upon determination by the Credit Enhancer or the Master Servicer that a Servicing Trigger has occurred, such party
shall give written notice of such Servicing Trigger to the Master Servicer or Credit Enhancer, as applicable, the Depositor, the
Indenture Trustee and to each Rating Agency.
(b) At any time after such determination and while a Servicing Trigger is continuing, the Credit Enhancer may direct the
Indenture Trustee in writing to remove the Master Servicer if the Credit Enhancer makes a determination that the manner of master
servicing was a factor contributing to the size of the delinquencies or losses incurred in the Trust Estate.
(c) Upon receipt of directions to remove the Master Servicer pursuant to the preceding clause (b), the Indenture Trustee
shall notify the Master Servicer that it has been terminated and the Master Servicer shall be terminated in the same manner as
specified in Sections 7.01 and 7.02.
(d) After notice of occurrence of a Servicing Trigger has been given and while a Servicing Trigger is continuing, until
and unless the Master Servicer has been removed as provided in clause (b), the Master Servicer covenants and agrees to act as the
Master Servicer for a term from the occurrence of the Servicing Trigger to the end of the calendar quarter in which such Servicing
Trigger occurs, which term may at the Credit Enhancer's discretion be extended by written notice to the Indenture Trustee and the
Master Servicer for successive terms of three (3) calendar months each, until the termination of the Trust Estate. The Master
Servicer will, upon the receipt of each such notice of extension (a "Master Servicer Extension Notice") become bound for the duration
of the term covered by such Master Servicer Extension Notice to continue as Master Servicer subject to and in accordance with this
Servicing Agreement. If, as of the fifteenth (15th) day prior to the last day of any term as the Master Servicer, the Indenture
Trustee shall not have received any Master Servicer Extension Notice from the Credit Enhancer, the Indenture Trustee shall, within
five (5) days thereafter, give written notice of such nonreceipt to the Credit Enhancer and the Master Servicer. If any such term
expires without a Master Servicer Extension Notice then the Indenture Trustee shall act as successor Master Servicer as provided in
Section 7.02.
(e) No provision of this Section 7.04 shall have the effect of limiting the rights of the Depositor, the Indenture
Trustee, the Noteholders or the Credit Enhancer under Section 7.01.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 AMENDMENT. This Servicing Agreement may be amended from time to time by the parties hereto, provided that any
amendment be accompanied by a letter from the Rating Agencies that the amendment will not result in the downgrading or withdrawal of
the rating then assigned to the Securities, if determined without regard to the Policy, and provided further, that the Credit
Enhancer and the Indenture Trustee shall consent thereto.
Section 8.02 GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.03 NOTICES. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered at or mailed by certified mail, return receipt requested, to (a) in the case of the Master
Servicer, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention: Director - Bond Administration, (b) in the case of
the Depositor, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: President, (c) in the case of the
Credit Enhancer, MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: IPM-SF, Re: Home Equity Loan Trust
2006-HSA4, (d) in the case of Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Surveillance Group, (e) in the case of Moody's, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS Monitoring Department,
(f) in the case of the Owner Trustee, Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration, (g) in the case of the Issuer, to Home Equity Loan Trust 2006-HSA4, c/o Owner
Trustee, Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention:
Corporate Trust Administration, (h) in the case of the Indenture Trustee, JPMorgan Chase Bank, N.A., 000 Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxx 00000, Attention: Worldwide Securities Services/ Structured Finance Services--2006-HSA4 and (i) in the case of the Underwriters,
to Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel, and to
Residential Funding Securities, LLC, 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Director of
Compliance; or, as to each party, at such other address as shall be designated by such party in a written notice to each other
party. Any notice required or permitted to be mailed to a Securityholder shall be given by first class mail, postage prepaid, at the
address of such Securityholder as shown in the Register. Any notice so mailed within the time prescribed in this Servicing Agreement
shall be conclusively presumed to have been duly given, whether or not the Securityholder receives such notice. Any notice or other
document required to be delivered or mailed by the Indenture Trustee to any Rating Agency shall be given on a reasonable efforts
basis and only as a matter of courtesy and accommodation and the Indenture Trustee shall have no liability for failure to delivery
such notice or document to any Rating Agency.
Section 8.04 SEVERABILITY OF PROVISIONS. If any one or more of the covenants, agreements, provisions or terms of this Servicing
Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this Servicing Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Servicing Agreement or of the Securities or the rights of the
Securityholders thereof.
Section 8.05 THIRD-PARTY BENEFICIARIES. This Servicing Agreement will inure to the benefit of and be binding upon the parties
hereto, the Securityholders, the Credit Enhancer, the Depositor, the Owner Trustee and their respective successors and permitted
assigns. Except as otherwise provided in this Servicing Agreement, no other Person will have any right or obligation hereunder. The
Credit Enhancer is a third-party beneficiary of this Servicing Agreement.
Section 8.06 COUNTERPARTS. This instrument may be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 8.07 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 8.08 TERMINATION UPON PURCHASE BY THE MASTER SERVICER OR LIQUIDATION OF HOME EQUITY LOANS. (a) The respective
obligations and responsibilities of the Master Servicer, the Issuer and the Indenture Trustee created hereby shall terminate upon the
last action required to be taken by the Issuer pursuant to the Trust Agreement and by the Indenture Trustee pursuant to the Indenture
following the earlier of:
(i) the date on or before which the Indenture or Trust Agreement is terminated; or
(ii) the purchase by the Master Servicer of all Home Equity Loans and all property acquired in respect of any Home Equity Loan
remaining in the Trust (other than the Policy).
(b) The right of the Master Servicer to purchase the Home Equity Loans is conditioned upon the Pool Balance as
of such date (after application of payments received during the related Collection Period) being equal to or less than ten percent of
the aggregate of the Cut-off Date Loan Balances of the Home Equity Loans; provided, however, that no such purchase will be permitted
if it would result in a draw under the Policy or would result in any amounts owing to the Credit Enhancer remaining unreimbursed,
unless, in either case, the Credit Enhancer consents in writing to the purchase. The purchase by the Master Servicer of the Home
Equity Loans and all property acquired (including REO Property) in respect of such Home Equity Loans shall be at a price equal to
100% of the unpaid Loan Balance of each Home Equity Loan, plus accrued and unpaid interest on each such Home Equity Loan, at the
applicable Net Loan Rate, plus the Policy premium rate, up to the first day of the month in which such amounts are to be distributed
to Securityholders, or in the case of REO Property, the fair market value of the REO Property, plus any amounts due and owing to the
Credit Enhancer under the Insurance Agreement in respect of the Policy or the Notes (any unpaid Master Servicing Fee shall be deemed
paid at such time). The purchase price paid by the Master Servicer for the Home Equity Loans shall also include any amounts owed to
the Trust by the Seller pursuant to the penultimate sentence of the second paragraph of Section 3.1(c) of the Purchase Agreement,
that remain unpaid on the date of such purchase. If such right is exercised by the Master Servicer, the Master Servicer shall
deposit the amount calculated pursuant to this Section 8.08(b) with the Indenture Trustee for deposit in the Payment Account and,
upon the receipt of such deposit, the Indenture Trustee or Custodian shall release to the Master Servicer, the files pertaining to
the Home Equity Loans being purchased.
(c) In addition to the foregoing, on any Payment Date on which the Pool Balance (after application of payment
received during the related Collection Period) is equal to or less than ten percent of the aggregate of the Cut-off Date Loan
Balances of the Home Equity Loans, the Master Servicer shall have the right, at its option, to purchase the Notes in whole, but not in
part, at a price equal to the outstanding Security Balance of the Notes plus the sum of Interest Distribution Amount thereon for the
related Interest Period and any previously unpaid Interest Distribution Amount, plus any amounts due to the Credit Enhancer under the
Insurance Agreement in respect of the Policy or the Notes. If the Master Servicer exercises this right to purchase the outstanding
Notes, the Master Servicer will promptly purchase the Home Equity Loans pursuant to this Section 8.08.
(d) The Master Servicer, at its expense, shall prepare and deliver to the Indenture Trustee for execution, at
the time the Home Equity Loans are to be released to the Master Servicer, appropriate documents assigning each such Home Equity Loan
from the Indenture Trustee or the Issuer to the Master Servicer or the appropriate party.
Section 8.09 CERTAIN MATTERS AFFECTING THE INDENTURE TRUSTEE. For all purposes of this Servicing Agreement, in the performance
of any of its duties or in the exercise of any of its powers hereunder, the Indenture Trustee shall be subject to and entitled to the
benefits of Article VI of the Indenture.
Section 8.10 OWNER TRUSTEE NOT LIABLE FOR RELATED DOCUMENTS. The recitals contained herein shall be taken as the statements of
the Depositor, and the Owner Trustee assumes no responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Servicing Agreement, of any Basic Document or of the Certificates (other
than the signatures of the Owner Trustee on the Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall at
no time have any responsibility or liability with respect to the sufficiency of the Owner Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under the Trust Agreement or the Noteholders under the Indenture, including, the
compliance by the Depositor or the Seller with any warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action of the Certificate Paying Agent, the Certificate
Registrar or the Indenture Trustee taken in the name of the Owner Trustee.
ARTICLE IX
COMPLIANCE WITH REGULATION AB
Section 9.01 INTENT OF THE PARTIES; REASONABLENESS.
The Depositor, the Indenture Trustee and the Master Servicer acknowledge and agree that the purpose of this Article IX is to
facilitate compliance by the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission. The
Depositor shall not exercise its right to request delivery of information or other performance under these provisions other than in
good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the
Commission under the Securities Act and the Exchange Act. Each of the Master Servicer and the Indenture Trustee acknowledges that
interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with reasonable requests made by the Depositor in good faith for delivery of information under these provisions on
the basis of evolving interpretations of Regulation AB. Each of the Master Servicer and the Indenture Trustee shall cooperate
reasonably with the Depositor to deliver to the Depositor (including any of its assignees or designees), any and all disclosure,
statements, reports, certifications, records and any other information necessary in the reasonable, good faith determination of the
Depositor to permit the Depositor to comply with the provisions of Regulation AB.
Section 9.02 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE INDENTURE TRUSTEE.
(a) The Indenture Trustee shall be deemed to represent and warrant to the Depositor as of the date hereof and on each
date on which information is provided to the Depositor under Sections 9.01, 9.02(b) or 9.03 that, except as disclosed in writing to
the Depositor prior to such date: (i) it is not aware and has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other Securitization Transaction due to any default of the Indenture Trustee;
(ii) there are no aspects of its financial condition that could have a material adverse effect on the performance by it of its
trustee obligations under this Servicing Agreement or any other Securitization Transaction as to which it is the trustee; (iii) there
are no material legal or governmental proceedings pending (or known to be contemplated) against it that would be material to
Noteholders; (iv) there are no relationships or transactions (as described in Item 1119(b) of Regulation AB) relating to the Indenture
Trustee with respect to the Depositor or any sponsor, issuing entity, servicer, trustee, originator, significant obligor, enhancement
or support provider or other material transaction party (as each of such terms are used in Regulation AB) relating to the
Securitization Transaction contemplated by the Servicing Agreement, as identified by the Depositor to the Indenture Trustee in
writing as of the Closing Date (each, a "Transaction Party") that are outside the ordinary course of business or on terms other than
would be obtained in an arm's length transaction with an unrelated third party, apart from the Securitization Transaction, and that
are material to the investors' understanding of the Term Notes; and (v) the Indenture Trustee is not an affiliate (as contemplated by
Item 1119(a) of Regulation AB) of any Transaction Party. The Depositor shall notify the Indenture Trustee of any change in the
identity of a Transaction Party after the Closing Date.
(b) If so requested by the Depositor on any date following the Closing Date, the Indenture Trustee shall, within five
Business Days following such request, confirm in writing the accuracy of the representations and warranties set forth in paragraph
(a) of this Section or, if any such representation and warranty is not accurate as of the date of such confirmation, provide the
pertinent facts, in writing, to the Depositor. Any such request from the Depositor shall not be given more than once each calendar
quarter, unless the Depositor shall have a reasonable basis for questioning the accuracy of any of the representations and
warranties.
Section 9.03 INFORMATION TO BE PROVIDED BY THE INDENTURE TRUSTEE.
For so long as the Term Notes are outstanding, for the purpose of satisfying the Depositor's reporting obligation under the
Exchange Act with respect to any class of Term Notes, the Indenture Trustee shall provide to the Depositor a written description of
(a) any litigation or governmental proceedings pending against the Indenture Trustee as of the last day of each calendar month that
would be material to Noteholders, and (b) any affiliations or relationships (as described in Item 1119 of Regulation AB) that develop
following the Closing Date between the Indenture Trustee and any Transaction Party of the type described in Section 9.02(a)(iv) or
9.02(a)(v) as of the last day of each calendar year. Any descriptions required with respect to legal proceedings, as well as updates
to previously provided descriptions, under this Section 9.03 shall be given no later than five Business Days prior to the
Determination Date following the month in which the relevant event occurs, and any notices and descriptions required with respect to
affiliations, as well as updates to previously provided descriptions, under this Section 9.03 shall be given no later than January 31
of the calendar year following the year in which the relevant event occurs. As of the related Payment Date with respect to each
Report on Form 10-D with respect to the Term Notes filed by or on behalf of the Depositor, and as of March 15 preceding the date each
Report on Form 10-K with respect to the Term Notes is filed, the Indenture Trustee shall be deemed to represent and warrant that any
information previously provided by the Indenture Trustee under this Article IX is materially correct and does not have any material
omissions unless the Indenture Trustee has provided an update to such information. The Depositor will allow the Indenture Trustee to
review any disclosure relating to material litigation against the Indenture Trustee prior to filing such disclosure with the
Commission to the extent the Depositor changes the information provided by the Indenture Trustee.
Section 9.04 REPORT ON ASSESSMENT OF COMPLIANCE AND ATTESTATION.
On or before March 15 of each calendar year, the Indenture Trustee shall:
(a) deliver to the Depositor a report (in form and substance reasonably satisfactory to the Depositor) regarding the
Indenture Trustee's assessment of compliance with the applicable Servicing Criteria during the immediately preceding calendar year,
as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be signed by an
authorized officer of the Indenture Trustee, and shall address each of the Servicing Criteria specified on Exhibit G hereto; and
(b) deliver to the Depositor a report of a registered public accounting firm satisfying the requirements of Rule 2-01 of
Regulation S-X under the Securities Act and the Exchange Act that attests to, and reports on, the assessment of compliance made by
the Indenture Trustee and delivered pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.
Section 9.05 INDEMNIFICATION; REMEDIES.
(a) The Indenture Trustee shall indemnify the Depositor, each affiliate of the Depositor, the Master Servicer and each
affiliate of the Master Servicer, and the respective present and former directors, officers, employees and agents of each of the
foregoing, and shall hold each of them harmless from and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) (A) any untrue statement of a material fact contained or alleged to be contained in any information,
report, certification, accountants' attestation or other material provided under this Article IX by or on behalf of the Indenture
Trustee (collectively, the "Indenture Trustee Information"), or (B) the omission or alleged omission to state in the Indenture
Trustee Information a material fact required to be stated in the Indenture Trustee Information or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading; or
(ii) any failure by the Indenture Trustee to deliver any information, report, certification, or other material
when and as required under this Article IX, other than a failure by the Indenture Trustee to deliver an accountants' attestation.
(b) In the case of any failure of performance described in clause (ii) of Section 9.05(a), as well as a failure to
deliver an accountants' attestation, the Indenture Trustee shall (i) promptly reimburse the Depositor for all costs reasonably
incurred by the Depositor in order to obtain the information, report, certification, accountants' attestation or other material not
delivered by the Indenture Trustee as required and (ii) cooperate with the Depositor to mitigate any damages that may result from
such failure.
(c) The Depositor and the Master Servicer shall indemnify the Indenture Trustee, each affiliate of the Indenture Trustee
and the respective present and former directors, officers, employees and agents of the Indenture Trustee, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs, judgments,
and any other costs, fees and expenses that any of them may sustain arising out of or based upon (i) any untrue statement of a
material fact contained or alleged to be contained in any information provided under this Servicing Agreement by or on behalf of the
Depositor or Master Servicer for inclusion in any report filed with Commission under the Exchange Act (collectively, the "RFC
Information"), or (ii) the omission or alleged omission to state in the RFC Information a material fact required to be stated in the
RFC Information or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading.
(d) Notwithstanding any provision in this Section 9.05 to the contrary, the parties agree that none of the Indenture
Trustee, the Depositor or the Master Servicer shall be liable to the other for any consequential or punitive damages whatsoever,
whether in contract, tort (including negligence and strict liability), or any other legal or equitable principle; provided, however,
that such limitation shall not be applicable with respect to third party claims made against a party.
IN WITNESS WHEREOF, the Master Servicer, the Indenture Trustee and the Issuer have caused this Servicing Agreement to be
duly executed by their respective officers or representatives all as of the day and year first above written.
RESIDENTIAL FUNDING CORPORATION,
as Master Servicer
By: /s/Xxxxxxxxxxx Xxxxxxxx
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Associate
HOME EQUITY LOAN TRUST 2006-HSA4
By: Wilmington Trust Company, not in its individual capacity but solely as
Owner Trustee
By: /s/Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Financial Services Officer
JPMORGAN CHASE BANK, N.A.,
as Indenture Trustee
By: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
Acknowledged and Agreed
solely with respect to Article IX:
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
By: __/s/Xxxxxxx Anderson____
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
EXHIBIT A
HOME EQUITY LOAN SCHEDULE
EXHIBIT B
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That JPMorgan Chase Bank, N.A., as Indenture Trustee (the "Indenture Trustee"), under the Indenture (the "Indenture")
between Home Equity Loan Trust 2006-HSA4 and the Indenture Trustee, a national banking association organized and existing under the
laws of the State of New York, and having its principal office located at 4 New York Plaza, in the City of New York in the State of
New York, hath made, constituted and appointed, and does by these presents make, constitute and appoint Residential Funding
Corporation, a corporation organized and existing under the laws of the State of Delaware, its true and lawful Attorney-in-Fact, with
full power and authority to sign, execute, acknowledge, deliver, file for record, and record any instrument on its behalf and to
perform such other act or acts as may be customarily and reasonably necessary and appropriate to effectuate the following enumerated
transactions in respect of any of the mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust", respectively) creating a
trust or second lien or an estate in fee simple interest in real property securing a Home Equity Loan and promissory notes secured
thereby (the "Mortgage Notes") for which the undersigned is acting as Indenture Trustee for various Securityholders (whether the
undersigned is named therein as mortgagee or beneficiary or has become mortgagee by virtue of Endorsement of the Mortgage Note
secured by any such Mortgage or Deed of Trust) and MBIA Insurance Corporation, as credit enhancer, and for which Residential Funding
Corporation is acting as master servicer pursuant to a Servicing Agreement, dated as of July 28, 2006 (the "Servicing Agreement").
This appointment shall apply only to transactions which the Indenture Trustee is authorized to enter into under the
Indenture, but in no event shall apply to any transactions other than the following enumerated transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust, where said modification or re-recording is for the purpose
of correcting the Mortgage or Deed of Trust to conform same to the original intent of the parties thereto or to correct title errors
discovered after such title insurance was issued and said modification or re-recording, in either instance, does not adversely affect
the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to an easement in favor of a public utility company or a
government agency or unit with powers of eminent domain; this section shall include, without limitation, the execution of partial
satisfactions/releases, partial reconveyances or the execution of requests to trustees to accomplish same.
3. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking of a deed in lieu of foreclosure, or the completion
of judicial or non-judicial foreclosure or termination, cancellation or rescission of any such foreclosure, including, without
limitation, any and all of the following acts:
a. The substitution of trustee(s) serving under a Deed of Trust, in accordance with state law and the Deed of Trust;
b. Statements of breach or non-performance;
c. Notices of default;
d. Cancellations/rescissions of notices of default and/or notices of sale;
e. The taking of a deed in lieu of foreclosure; and
f. Such other documents and actions as may be necessary under the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions.
4. The conveyance of the properties to the mortgage insurer, or the closing of the title to the property to be acquired as real
estate owned, or conveyance of title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction/release of a Mortgage or Deed of Trust or full reconveyance upon payment and discharge of all sums
secured thereby, including, without limitation, cancellation of the related Mortgage Note.
7. The assignment of any Mortgage or Deed of Trust and the related Mortgage Note, in connection with the repurchase of the Home
Equity Loan secured and evidenced thereby pursuant to the requirements of a Residential Funding Corporation Seller Contract,
including, with limitation, by reason of conversion of an adjustable rate mortgage loan from a variable rate to a fixed rate.
8. The full assignment of a Mortgage or Deed of Trust upon payment and discharge of all sums secured thereby in conjunction
with the refinancing thereof, including, without limitation, the endorsement of the related Mortgage Note.
9. The modification or re-recording of a Mortgage or Deed of Trust, where said modification or re-recording is for the purpose
of any modification pursuant to Section 3.01 of the Servicing Agreement.
10. The subordination of the lien of a Mortgage or Deed of Trust, where said subordination is in connection with any
modification pursuant to Section 3.01 of the Servicing Agreement, and the execution of partial satisfactions/releases in connection
with such same Section 3.01.
The undersigned gives said Attorney-in-Fact full power and authority to execute such instruments and to do and perform all and every
act and thing necessary and proper to carry into effect the power or powers granted by or under this Limited Power of Attorney as
fully as the undersigned might or could do, and hereby does ratify and confirm to all that said Attorney-in-Fact shall lawfully do or
cause to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power granted under this Limited Power of Attorney; and may be
satisfied that this Limited Power of Attorney shall continue in full force and effect has not been revoked unless an instrument of
revocation has been made in writing by the undersigned.
JPMORGAN CHASE BANK, N.A., not in its individual capacity, but solely as
Indenture Trustee under the Indenture
By: __________________________________________
Name:
Title:
STATE OF )
SS.
COUNTY OF )
On this day of ______, 2006, before me the undersigned, Notary Public of said State, personally appeared personally
known to me to be duly authorized officers of JPMorgan Chase Bank, N.A. that executed the within instrument and personally known to
me to be the persons who executed the within instrument on behalf of JPMorgan Chase Bank, N.A. therein named, and acknowledged to me
such JPMorgan Chase Bank, N.A. executed the within instrument pursuant to its by-laws.
WITNESS my hand and official seal.
Notary Public in and for the
State of ______________________
After recording, please mail to:
Attn:___________________________
EXHIBIT C
FORM OF REQUEST FOR RELEASE
DATE:
TO:
Re: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Home Equity Loans, we request the release of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Home Equity Loan Prepaid in Full
Home Equity Loan Repurchased
"We hereby certify that all amounts received or to be received in connection with such payments which are required to be deposited
have been or will be so deposited as provided in the Servicing Agreement."
Residential Funding Corporation
Authorized Signature
........................................................................................................................................
TO CUSTODIAN/INDENTURE TRUSTEE: Please acknowledge this request, and check off documents being enclosed with a copy of this form.
You should retain this form for your files in accordance with the terms of the Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or
Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name
Title
Date
EXHIBIT D
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF
HOME EQUITY LOAN
____________, 20__________
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
JPMorgan Chase Bank, N.A.
000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Residential Funding Corporation Series 2006-HSA4
Re: Home Equity Loan Pass-Through Certificates,
Series 2006-HSA4, Assignment of Home Equity Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by __________ (the "Indenture Trustee") to
(the "Lender") of (the "Home Equity Loan") pursuant to Section 3.05 of the Servicing Agreement (the
"Servicing Agreement"), dated as of July 28, 2006 among Home Equity Loan Trust 2006-HSA4, as issuer, Residential Funding Corporation,
as master servicer, and the Indenture Trustee. All terms used herein and not otherwise defined shall have the meanings set forth in
the Servicing Agreement. The Lender hereby certifies, represents and warrants to, and covenants with, the Master Servicer and the
Indenture Trustee that:
(i) the Home Equity Loan is secured by Mortgaged Property located in a jurisdiction in which an assignment in
lieu of satisfaction is required to preserve lien priority, minimize or avoid mortgage recording taxes or otherwise comply with, or
facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a refinancing of such Home Equity Loan and the
form of the transaction is solely to comply with, or facilitate the transaction under, such local laws;
(iii) the Home Equity Loan following the proposed assignment will be modified to have a rate of interest at least
0.25 percent below or above the rate of interest on such Home Equity Loan prior to such proposed assignment; and
(iv) such assignment is at the request of the borrower under the related Home Equity Loan.
Very truly yours,
(Lender)
By: ______________________________
Name:
Title:
EXHIBIT E
FORM OF FORM 10-K CERTIFICATE
I, [identify the certifying individual], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D required to be filed in respect of the period covered
by this report on Form 10-K of the trust (the Exchange Act periodic reports) pursuant to the Servicing Agreement dated July 28, 2006
(the "Agreement") among Residential Funding Corporation (the "Master Servicer"), Home Equity Loan Trust 2006-HSA4 (the "Issuer") and
JPMorgan Chase Bank, N.A. (the "Indenture Trustee") and acknowledged and agreed to by Residential Funding Mortgage Securities II, Inc.
2. Based on my knowledge, Exchange Act periodic reports, taken as a whole, do not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other information required to be provided under Form 10-D for
the period covered by this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the Master Servicer and based on my knowledge and the compliance
review conducted in preparing the servicer compliance statement required in this report under Item 1123 of Regulation AB and except
as disclosed in the Exchange Act periodic reports, the Master Servicer has fulfilled its obligations under the Agreement; and
5. All of the reports on assessment of compliance with servicing criteria for asset-backed securities and their related
attestation reports on assessment of compliance with servicing criteria for asset-backed securities required to be included in this
report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to
this report, except as otherwise disclosed in this report. Any material instances of noncompliance described in such reports have
been disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied on the information provided to me by the following unaffiliated
parties: [the Indenture Trustee].
Date:____________
_________________________________*
[Signature]
Name:
Title:
* - to be signed by the senior officer in charge of the servicing functions of the Master Servicer
EXHIBIT F
[FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE]
The undersigned, a Responsible Officer of [__________] (the "Indenture Trustee") certifies that:
(a) The Indenture Trustee has performed all of the duties specifically required to be performed by it pursuant to the
provisions of the Servicing Agreement dated as of July 28, 2006 (the "Agreement") by and among Residential Funding Corporation,
as Master Servicer, Home Equity Loan Trust 2006-HSA4, as Issuer and the Indenture Trustee in accordance with the standards set
forth therein.
(b) Based on my knowledge, the list of Securityholders as shown on the Certificate Register and the Note Register as of
the end of each calendar year that is provided by the Indenture Trustee pursuant to the Agreement is accurate as of the last day
of the 20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________, 20__.]
Name:__________________________________________
Title:
EXHIBIT G
SERVICING CRITERIA
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Indenture Trustee shall address, at a minimum, the criteria identified
as below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------ ----------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
------------------------------------------------------------------------------------------ ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
REFERENCE CRITERIA
-------------------- --------------------------------------------------------------------- ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
GENERAL SERVICING CONSIDERATIONS
-------------------- --------------------------------------------------------------------- ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the
transaction agreements.
-------------------- --------------------------------------------------------------------- ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
-------------------- --------------------------------------------------------------------- ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the pool assets are maintained.
-------------------- --------------------------------------------------------------------- ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
agreements.
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CASH COLLECTION AND ADMINISTRATION
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1122(d)(2)(i) Payments on pool assets are deposited into the appropriate |X| (as to accounts
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements. held by Trustee)
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1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to |X| (as to investors
an investor are made only by authorized personnel. only)
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1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
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The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with |X| (as to accounts
respect to commingling of cash) as set forth in the transaction held by Trustee)
1122(d)(2)(iv) agreements.
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1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
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1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
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1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
specified in the transaction agreements.
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INVESTOR REMITTANCES AND REPORTING
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1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of pool assets serviced by the
servicer.
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1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance |X|
with timeframes, distribution priority and other terms set forth in
the transaction agreements.
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Disbursements made to an investor are posted within two business
days to the servicer's investor records, or such other number of |X|
1122(d)(3)(iii) days specified in the transaction agreements.
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Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank |X|
1122(d)(3)(iv) statements.
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POOL ASSET ADMINISTRATION
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1122(d)(4)(i) Collateral or security on pool assets is maintained as required by
the transaction agreements or related asset pool documents.
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Pool assets and related documents are safeguarded as required by
1122(d)(4)(ii) the transaction agreements
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1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
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1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in accordance
with the related pool asset documents are posted to the servicer's
obligor records maintained no more than two business days after
receipt, or such other number of days specified in the transaction
agreements, and allocated to principal, interest or other items
(e.g., escrow) in accordance with the related pool asset documents.
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1122(d)(4)(v) The servicer's records regarding the pool assets agree with the
servicer's records with respect to an obligor's unpaid principal
balance.
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1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's pool
asset (e.g., loan modifications or re-agings) are made, reviewed
and approved by authorized personnel in accordance with the
transaction agreements and related pool asset documents.
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1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
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1122(d)(4)(viii) Records documenting collection efforts are maintained during the
period a pool asset is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent pool assets including, for example, phone calls, letters
and payment rescheduling plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).
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1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool assets
with variable rates are computed based on the related pool asset
documents.
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1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's pool asset documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable pool asset documents and state laws; and
(C) such funds are returned to the obligor within 30 calendar days
of full repayment of the related pool asset, or such other number
of days specified in the transaction agreements.
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1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
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1122(d)(4)(xii) Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds and
not charged to the obligor, unless the late payment was due to the
obligor's error or omission.
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Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
1122(d)(4)(xiii) agreements.
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1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
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Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained |X|
1122(d)(4)(xv) as set forth in the transaction agreements.
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