EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of March 4, 2005, between
Residential Funding Corporation, a Delaware corporation ("RFC") and Residential
Asset Securities Corporation, a Delaware corporation (the "Company").
Recitals
A. RFC has entered into seller contracts ("Seller Contracts") with
certain sellers and servicers.
B. The Company wishes to purchase from RFC certain Mortgage Loans (as
hereinafter defined) originated pursuant to the Seller Contracts with respect
thereto.
C. The Company, RFC, as master servicer, and U.S. Bank National
Association, as trustee (the "Trustee"), are entering into a Pooling and
Servicing Agreement dated as of February 1, 2005 (the "Pooling and Servicing
Agreement"), pursuant to which the Trust proposes to issue Home Equity Mortgage
Asset-Backed Pass-Through Certificates, Series 2005-EMX1 (the "Certificates")
consisting of sixteen classes designated as Class A-I-1, Class A-I-2, Class
A-I-3, Class A-II-1, Class A-II-2, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class B, Class SB, Class R-I, Class R-II and Class R-III
representing beneficial ownership interests solely in a trust fund consisting
primarily of a pool that will be divided into (i) the adjustable and fixed rate
one-to four-family mortgage loans identified on Exhibit F-1 to the Pooling and
Servicing Agreement (the "Group I Loans") and (ii) the adjustable and fixed rate
one- to four-family mortgage loans identified on Exhibit F-2 to the Pooling and
Servicing Agreement (the "Group II Loans," and together with the Group I Loans,
the "Mortgage Loans").
D. In connection with the purchase of the Mortgage Loans, the Company
will assign to RFC the Class SB, Class R-I, Class R-II and Class R-III
Certificates (the "Retained Certificates"). The Class A-I-1, Class A-I-2, Class
A-I-3, Class A-II-1, Class A-II-2, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates were offered to investors pursuant to a
Prospectus Supplement dated March 1, 2005 (the "Prospectus Supplement").
E. In connection with the purchase of the Mortgage Loans and the
issuance of the Certificates, RFC wishes to make certain representations and
warranties to the Company and to assign certain of its rights under the Seller
Contracts to the Company, and the Company wishes to assume certain of RFC's
obligations under the Seller Contracts.
F. The Company and RFC intend that the conveyance by RFC to the Company
of all its right, title and interest in and to the Mortgage Loans pursuant to
this Agreement shall constitute a purchase and sale and not a loan.
NOW THEREFORE, in consideration of the recitals and the mutual promises
herein and other good and valuable consideration, the parties agree as follows:
1. All capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.
2. Concurrently with the execution and delivery hereof, RFC hereby assigns to
the Company without recourse all of its right, title and interest in and to the
Mortgage Loans, including all interest and principal received on or with respect
to the Mortgage Loans after the Cut-off Date (other than payments of principal
and interest due on the Mortgage Loans in February 2005). In consideration of
such assignment, RFC will receive from the Company, in immediately available
funds, an amount equal to $800,010,111.09 and the Retained Certificates. In
connection with such assignment and at the Company's direction, RFC has in
respect of each Mortgage Loan endorsed the related Mortgage Note (other than any
Destroyed Mortgage Note, hereinafter defined) to the order of the Trustee and
delivered an assignment of mortgage in recordable form to the Trustee or its
agent. A "Destroyed Mortgage Note" means a Mortgage Note the original of which
was permanently lost or destroyed.
The Company and RFC intend that the conveyance by RFC to the Company of
all its right, title and interest in and to the Mortgage Loans pursuant to this
Section 2 shall be, and be construed as, a sale of the Mortgage Loans by RFC to
the Company. It is, further, not intended that such conveyance be deemed to be a
pledge of the Mortgage Loans by RFC to the Company to secure a debt or other
obligation of RFC. Nonetheless (a) this Agreement is intended to be and hereby
is deemed to be a security agreement within the meaning of Articles 8 and 9 of
the Minnesota Uniform Commercial Code and the Uniform Commercial Code of any
other applicable jurisdiction; (b) the conveyance provided for in this Section
shall be deemed to be a grant by RFC to the Company of a security interest in
all of RFC's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related insurance
policies and all other documents in the related Mortgage Files, (B) all amounts
payable pursuant to the Mortgage Loans in accordance with the terms thereof and
(C) any and all general intangibles consisting of, arising from or relating to
any of the foregoing, and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including, without limitation, all amounts from time to time held or
invested in the Certificate Account or the Custodial Account, whether in the
form of cash, instruments, securities or other property; (c) the possession by
the Trustee, the Custodian or any other agent of the Trustee of Mortgage Notes
or such other items of property as constitute instruments, money, payment
intangibles, negotiable documents, goods, deposit accounts, letters of credit,
advices of credit, investment property, certificated securities or chattel paper
shall be deemed to be "possession by the secured party," or possession by a
purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the Minnesota Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction
(including without limitation, Sections 8-106, 9-313 and 9-106 thereof); and (d)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. RFC shall, to the
extent consistent with this Agreement, take such reasonable actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans and the other property described above, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement. Without limiting the generality of the foregoing, RFC shall
prepare and deliver to the Company not less than 15 days prior to any filing
date, and the Company shall file, or shall cause to be filed, at the expense of
RFC, all filings necessary to maintain the effectiveness of any original filings
necessary under the Uniform Commercial Code as in effect in any jurisdiction to
perfect the Company's security interest in or lien on the Mortgage Loans
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of RFC or the Company,
(2) any change of location of the state of formation, place of business or the
chief executive office of RFC, or (3) any transfer of any interest of RFC in any
Mortgage Loan.
3. Concurrently with the execution and delivery hereof, the Company hereby
assigns to RFC without recourse all of its right, title and interest in and to
the Retained Certificates as part of the consideration payable to RFC by the
Company pursuant to this Agreement.
4. RFC represents and warrants to the Company, with respect to each Mortgage
Loan that on the date of execution hereof (or, if otherwise specified below, as
of the date so specified),
(i) Immediately prior to the delivery of the Mortgage Loans to the Company, RFC
had good title to, and was the sole owner of, each Mortgage Loan free and clear
of any pledge, lien or security interest (other than (a) rights to servicing and
related compensation, and (b) any senior lien relating to a Mortgage Loan listed
on Schedule A attached hereto (the "Junior Lien Mortgage Loans") and had full
right and authority to sell and assign the Mortgage Loans pursuant to this
Agreement.
(ii) The proceeds of the Mortgage Loan have been fully disbursed, there is no
requirement for future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor (including any escrow funds held to make Monthly
Payments pending completion of such improvements) have been complied with. All
costs, fees and expenses incurred in making, closing or recording the Mortgage
Loans were paid.
(iii) The Mortgagor (including any party secondarily liable under the Mortgage
File) has no right of set-off, defense, counterclaim or right of rescission as
to any document in the Mortgage File except as may be provided under the Relief
Act.
(iv) RFC and any other originator, servicer or other previous owner of each
Mortgage Loan has obtained all licenses and effected all registrations required
under all applicable local, state and federal laws, regulations and orders,
including without limitation truth in lending and disclosure laws, necessary to
own or originate the Mortgage Loans (the failure to obtain such licenses or to
comply with such laws, regulations and orders would make such Mortgage Loans
void or voidable).
(v) A policy of title insurance, in the form and amount that is in material
compliance with the Program Guide, was effective as of the closing of each
Mortgage Loan, is valid and binding, and remains in full force and effect except
for Mortgaged Properties located in the State of Iowa where an attorney's
certificate has been provided in accordance with the Program Guide. No claims
have been made under such title insurance policy and no holder of the related
mortgage, including RFC, has done or omitted to do anything which would impair
the coverage of such title insurance policy.
(vi) Each Mortgage Loan is a valid and enforceable first lien (or in the case of
the Junior Lien Mortgage Loans, junior lien) on the Mortgaged Property subject
only to (1) the lien of nondelinquent current real property taxes and
assessments, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Mortgage Loan, and (3) other
matters to which like properties are commonly subject that do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage.
(vii) All improvements which were considered in determining the Appraised Value
of the Mortgaged Property lie wholly within the boundaries and the building
restriction lines of the Mortgaged Premises, or the policy of title insurance
affirmatively insures against loss or damage by reason of any violation,
variation, encroachment or adverse circumstance that either is disclosed or
would have been disclosed by an accurate survey.
(viii) There are no delinquent tax or delinquent assessment liens against the
related Mortgaged Property, and there are no mechanic's liens or claims for
work, labor or material or any other liens affecting such Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of the Mortgage
assigned to RFC, except those liens that are insured against by the policy of
title insurance and described in (v) above.
(ix) Each Mortgaged Property is free of material damage and is in good repair
and no notice of condemnation has been given with respect thereto.
(x) The improvements upon the Mortgaged Property are insured against loss by
fire and other hazards as required by the Program Guide, including flood
insurance if required under the National Flood Insurance Act of 1968, as
amended. The Mortgage requires the Mortgagor to maintain such casualty insurance
at the Mortgagor's expense, and on the Mortgagor's failure to do so, authorizes
the holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's expense and to seek reimbursement therefore from the Mortgagor.
(xi) The appraisal was made by an appraiser who meets the minimum qualifications
for appraisers as specified in the Program Guide.
(xii) Each Mortgage Note and Mortgage constitutes a legal, valid and binding
obligation of the Mortgagor enforceable in accordance with its terms except as
limited by bankruptcy, insolvency or other similar laws affecting generally the
enforcement of creditors' rights.
(xiii) Each Mortgage Loan is covered by a standard hazard insurance policy.
(xiv) None of the Mortgage Loans is secured by a leasehold estate.
(xv) The information set forth on the Mortgage Loan Schedule with respect to
each Mortgage Loan is true and correct in all material respects as of the date
or dates which such information is furnished.
(xvi) As of the Cut-off Date, approximately 0.1% of the Group II Loans are 30 to
59 days Delinquent in payment of principal and interest. As of the Cut-off Date,
none of the Mortgage Loans are Delinquent in payment of principal or interest by
60 days or more. For the purposes of this representation a Mortgage Loan is
considered Delinquent if a Subservicer or the Master Servicer has made any
advances on the Mortgage Loan that have not been reimbursed out of payments by
the mortgagor or on the mortgagor's behalf from a source other than a
Subservicer, a Seller, the Master Servicer or an affiliated entity of either.
(xvii) None of the Mortgage Loans with Loan-to-Value Ratios, or combined
Loan-to-Value Ratios with respect to Junior Lien Loans, at origination in excess
of 80% are insured by a borrower-paid, primary mortgage insurance policy.
(xviii) The weighted average Loan-to-Value Ratio with respect to Group I Loans,
and the Group II Loans, in each case by outstanding principal balance at
origination, is 84.8% and 84.6%, respectively.
(xix) No more than approximately 8.3% and 8.8% of the Group I Loans and the
Group II Loans, respectively, in each case by outstanding principal balance as
of the Cut-off Date, are located in any one zip code area in Maryland and
Florida.
(xx) All of the Mortgage Loans that are adjustable-rate loans will adjust
semi-annually based on Six-Month LIBOR (as defined in the Prospectus
Supplement). Each of the Mortgage Loans that are adjustable-rate loans will
adjust on the Adjustment Date specified in the related Mortgage Note to a rate
equal to the sum (rounded as described in the Prospectus Supplement) of the
related Index described in the Prospectus Supplement and the Note Margin set
forth in the related Mortgage Note, subject to the limitations described in the
Prospectus Supplement, and each Mortgage Loan has an original term to maturity
from the date on which the first monthly payment is due of not more than
approximately 30 years. On each Adjustment Date, the Mortgage Rate on each
Mortgage Loan that is an adjustable-rate loan will be adjusted to equal the
related Index plus the related Gross Margin, subject in each case to the
Periodic Rate Cap, the Mortgage Rate and the Minimum Mortgage Rate. The amount
of the monthly payment on each Mortgage Loan that is an adjustable-rate loan
will be adjusted on the first day of the month following the month in which the
Adjustment Date occurs to equal the amount necessary to pay interest at the
then-applicable Mortgage Rate to fully amortize the outstanding principal
balance of such Mortgage Loan over its remaining term to stated maturity. No
Mortgage Loan is subject to negative amortization.
(xxi) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the holder of the Mortgage Loan to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor.
(xxii) Approximately 13.9% and 7.8% of the Mortgaged Properties related to the
Group I Loans and the Group II Loans, respectively (in each case by outstanding
principal balance as of the Cut-off Date), are units in detached planned unit
developments. Approximately 6.9% and 7.8% of the Mortgaged Properties related to
the Group I Loans and the Group II Loans, respectively (in each case by
outstanding principal balance as of the Cut-off Date), are units in attached
planned unit developments. Approximately 1.2% and 2.0% of the Mortgaged
Properties related to the Group I Loans and the Group II Loans, respectively (in
each case by outstanding principal balance as of the Cut-off Date), are units in
townhouses. None of the Mortgaged Properties related to the Group I Loans and
the Group II Loans are units in manufactured housing developments. Approximately
3.2% and 3.6% of the Mortgaged Properties related to the Group I Loans and the
Group II Loans, respectively (in each case by outstanding principal balance as
of the Cut-off Date), are condominium units. Each Mortgaged Property is suitable
for year-round occupancy.
(xxiii) Approximately 96.3% and 96.2% of the Mortgaged Properties related to the
Group I Loans and the Group II Loans, respectively (in each case by outstanding
principal balance as of the Cut-off Date) are secured by the owner's primary
residence. Approximately 1.3% and 1.0% of the Mortgaged Properties related to
the Group I Loans and the Group II Loans, respectively (in each case by
outstanding principal balance as of the Cut-off Date) are secured by the owner's
second or vacation residence. Approximately 3.7% and 3.8% of the Mortgaged
Properties related to the Group I Loans and the Group II Loans, respectively (in
each case by outstanding principal balance as of the Cut-off Date) are secured
by a non-owner occupied residence.
(xxiv) Approximately 69.8% and 72.0% of the Mortgaged Properties related to the
Group I Loans and the Group II Loans, respectively (in each case by outstanding
principal balance as of the Cut-off Date), are secured by detached one-family
dwelling units. Approximately 5.1% and 6.8% of the Mortgaged Properties related
to the Group I Loans and the Group II Loans, respectively (in each case by
outstanding principal balance as of the Cut-off Date), are secured by two- to
four-family dwelling units.
(xxv) The average outstanding principal balance of the Group I Loans at
origination was approximately $159,681. The average outstanding principal
balance of the Group II Loans at origination was approximately $142,981. No
Group I Loan or Group II Loan at origination had a principal balance of less
than $10,000 and $11,000 or more than $750,000, and $510,000, respectively.
(xxvi) As of the Cut-off Date, all Mortgage Rate adjustments on the Mortgage
Loans that have reached an Adjustment Date have been done in accordance with the
terms of the related Mortgage Note.
(xxvii) Any escrow arrangements established with respect to any Mortgage Loan
are in compliance with all applicable local, state and federal laws and are in
compliance with the terms of the related Mortgage Note.
(xxviii) Except as otherwise specifically set forth herein, there is no default,
breach, violation or event of acceleration existing under any Mortgage Note or
Mortgage and no event which, with notice and expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration,
and no such default, breach, violation or event of acceleration has been waived
by RFC or by any other entity involved in originating or servicing a Mortgage
Loan.
(xxix) Each Mortgage Loan constitutes a qualified mortgage under Section
860G(a)(3)(A) of the Code and Treasury Regulations Section 1.860G-2(a)(1).
(xxx) None of the Group I Loans have been classified by RFC as Credit Grade A4,
no more than 88.9% of any Group I Loans have been classified by RFC as Credit
Grade AX Mortgage Loans, no more than 9.8% of the Group I Loans have been
classified by RFC as Credit Grade AM Mortgage Loans, no more than 1.3% of the
Group I Loans have been classified by RFC as Credit Grade B Mortgage Loans, no
more than 0.1% of the Group I Loans have been classified by RFC as Credit Grade
C Mortgage Loans and none of the Group I Loans have been classified by RFC as
Credit Grade CM Mortgage Loans, in each case as described generally in the
Prospectus Supplement.
(xxxi) None of the Group II Loans have been classified by RFC as Credit Grade
A4, no more than 88.6% of any Group II Loans have been classified by RFC as
Credit Grade AX Mortgage Loans, no more than 9.1% of the Group II Loans have
been classified by RFC as Credit Grade AM Mortgage Loans, no more than 2.2% of
the Group II Loans have been classified by RFC as Credit Grade B Mortgage Loans,
no more than 0.1% of the Group II Loans have been classified by RFC as Credit
Grade C Mortgage Loans and none of the Group II Loans have been classified by
RFC as Credit Grade CM Mortgage Loans, in each case as described generally in
the Prospectus Supplement.
(xxxii) No Mortgage Loan is a graduated payment loan or has a shared
appreciation or contingent interest feature.
(xxxiii) With respect to each Mortgage Loan, either (i) each Mortgage Loan
contains a customary provision for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event the related Mortgaged
Property is sold without the prior consent of the mortgagee thereunder or (ii)
the Mortgage Loan is assumable pursuant to the terms of the Mortgage Note.
(xxxiv) No Mortgage Loan provides for deferred interest or negative
amortization.
(xxxv) None of the Mortgage Loans are buydown Mortgage Loans.
(xxxvi) Each Mortgaged Property is a single parcel of real estate with a one- to
four-unit single family residence thereon, a condominium unit, a manufactured
housing unit, a unit in a townhouse, a planned unit development, a leasehold or
a modular home; and no Mortgage Property consists of a mobile home or a
manufactured housing unit that is not permanently affixed to its foundation.
(xxxvii) No more than approximately 28.4% and 30.1% of the Group I Loans and
Group II Loans, respectively (by outstanding principal balance as of the Cut-off
Date), were made to Mortgagors with credit scores as described generally in the
Prospectus Supplement of less than 600 excluding Mortgagors whose credit scores
are not available to RFC. The weighted average of the credit scores for the
Group I Loans and the Group II Loans for which Credit Scores are available to
RFC was approximately 626 and 623, respectively, as of the Cut-off Date.
(xxxviii) No instrument of release or waiver has been executed in connection
with the Mortgage Loans, and no Mortgagor has been released, in whole or in part
from its obligations in connection with a Mortgage Loan.
(xxxix) The weighted average remaining term to stated maturity of the Group I
Loans and the Group II Loans, respectively, as of the cut-off date will be
approximately 343 and 344 months. The weighted average original term to maturity
of the Group I Loans and the Group II Loans, respectively, as of the cut-off
date will be approximately 345 and 347 months.
(xl) None of the Mortgage Loans are subject to the Home Ownership and Equity
Protection Act of 1994 ("HOEPA").
(xli) To the best of RFC's knowledge, the Subservicer for each Mortgage Loan has
accurately and fully reported its borrower credit files to each of the Credit
Repositories in a timely manner.
(xlii) None of the proceeds of any Mortgage Loan were used to finance the
purchase of single premium credit insurance policies.
(xliii) No Group I Loan or Group II Loan has a prepayment penalty term that
extends beyond five years after the date of origination.
(xliv) Approximately 4.3% of the Group I Loans and 3.6% of the Group II Loans
are Balloon Mortgage Loans.
(xlv) None of the Mortgage Loans are loans that, under applicable state or local
law in effect at the time of origination of such Mortgage Loan, are referred to
as (1) "high cost" or "covered" loans or (2) any other similar designation if
the law imposes greater restrictions or additional legal liability for
residential mortgage loans with high interest rates, points and/or fees.
(xlvi) The information set forth in the prepayment charge schedule attached
hereto as Exhibit A (the "Prepayment Charge Schedule") is complete, true and
correct in all material respects as of the Cut-off Date, and each prepayment
charge set forth on the Prepayment Charge Schedule ("Prepayment Charge") is
enforceable and was originated in compliance with all applicable federal, state
and local laws.
(xlvii) Each Mortgage Loan as of the time of its origination complied in all
material respects with all applicable local, state and federal laws, including,
but not limited to, all applicable predatory lending laws.
(xlviii) No Mortgage Loan was originated on or after October 1, 2002 and before
March 7, 2003, which is secured by property located in the State of Georgia.
(xlix) No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as
such terms are defined in Appendix E of the Standard & Poor's Glossary For File
Format For LEVELS(R) Version 5.6b Revised (attached hereto as Exhibit B);
provided that no representation and warranty is made in this clause (xlix) with
respect to 0.1% and 0.1% of the Group I Loans and Group II Loans (in each case
by outstanding principal balance as of the Cut-off Date), respectively, secured
by property located in the State of Kansas or with respect to 0.1% and 0.1% of
the Group I Loans and the Group II Loans (in each case by outstanding principal
balance as of the Cut-off Date), respectively, secured by property located in
the State of West Virginia.
(l) With respect to any Group II Loan originated on or after August 1, 2004 and
underlying the Certificates, neither the related Mortgage nor the related
Mortgage Note requires the borrower to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Upon discovery by RFC or upon notice from the Company or the Trustee of
a breach of the foregoing representations and warranties in respect of any
Mortgage Loan, or upon the occurrence of a Repurchase Event (as described in
Section 5 below), which materially and adversely affects the interests of any
holders of the Certificates, the Certificate Insurer or the Company in such
Mortgage Loan (notice of which breach or occurrence shall be given to the
Company by RFC, if it discovers the same), RFC shall, within 90 days after the
earlier of its discovery or receipt of notice thereof, either cure such breach
or Repurchase Event in all material respects or, except as otherwise provided in
Section 2.04 of the Pooling and Servicing Agreement, either (i) purchase such
Mortgage Loan from the Trustee or the Company, as the case may be, at a price
equal to the Purchase Price for such Mortgage Loan or (ii) substitute a
Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan in the manner
and subject to the limitations set forth in Section 2.04 of the Pooling and
Servicing Agreement. Notwithstanding the foregoing, RFC shall not be required to
cure breaches, Repurchase Events or purchase or substitute for Mortgage Loans as
provided above if the substance of such breach or Repurchase Event also
constitutes fraud in the origination of the Mortgage Loan. If the breach of
representation and warranty that gave rise to the obligation to repurchase or
substitute a Mortgage Loan pursuant to this Section 4 was the representation set
forth in clause (xlvii) of this Section 4, then RFC shall pay to the Trust Fund,
concurrently with and in addition to the remedies provided in the preceding
sentence, an amount equal to any liability, penalty or expense that was actually
incurred and paid out of or on behalf of the Trust Fund, and that directly
resulted from such breach, or if incurred and paid by the Trust Fund thereafter,
concurrently with such payment.
5. With respect to the Mortgage Loans, a repurchase event ("Repurchase Event")
shall have occurred if it is discovered that, as of the date hereof, the related
Mortgage Loan was not a valid first lien or junior lien in the case of a Junior
Lien Loan on the related Mortgaged Property subject only to (i) the lien of real
property taxes and assessments not yet due and payable, (ii) covenants,
conditions, and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage and such other
permissible title exceptions as are listed in the Program Guide and (iii) other
matters to which like properties are commonly subject which do not materially
adversely affect the value, use, enjoyment or marketability of the Mortgaged
Property.
6. Concurrently with the execution and delivery hereof, RFC hereby assigns to
the Company, and the Company hereby assumes, all of RFC's rights and obligations
under the Seller Contracts with respect to the Mortgage Loans to be serviced
under the Pooling and Servicing Agreement, insofar as such rights and
obligations relate to (a) any representations and warranties regarding a
Mortgage Loan made by a Seller under any Seller Contract and any remedies
available under the Seller Contract for a breach of any such representations and
warranties if (i) the substance of such breach also constitutes fraud in the
origination of the Mortgage Loan or (ii) the representation and warranty relates
to the absence of toxic materials or other environmental hazards that could
affect the Mortgaged Property, or (b) the Seller's obligation to deliver to RFC
the documents required to be contained in the Mortgage File and any rights and
remedies available to RFC under the Seller Contract in respect of such
obligation or in the event of a breach of such obligation; provided that,
notwithstanding the assignment and assumption hereunder, RFC shall have the
concurrent right to exercise remedies and pursue indemnification upon a breach
by a Seller under any Seller Contract of any of its representations and
warranties. If the Company or RFC asserts that it is not required to cure
breaches or to purchase or substitute for Mortgage Loans under the Pooling and
Servicing Agreement because the substance of the breach also constitutes fraud
in the origination of any Mortgage Loan, then the substance of the related
breach shall automatically be deemed to constitute fraud in the origination of a
Mortgage Loan for purposes of clause (i) of this Section 6.
7. RFC hereby represents and warrants to the Company that with respect to each
Mortgage Loan, the REMIC's tax basis in each Mortgage Loan as of the Closing
Date is equal to or greater than 100% of the Stated Principal Balance thereof.
8. This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns, and no other person shall
have any right or obligation hereunder.
9. RFC, as master servicer under the Pooling and Servicing Agreement (the
"Master Servicer"), shall not waive (or permit a sub-servicer to waive) any
Prepayment Charge unless: (i) the enforceability thereof shall have been limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally, (ii) the enforcement thereof is
illegal, or any local, state or federal agency has threatened legal action if
the prepayment penalty is enforced, (iii) the collectability thereof shall have
been limited due to acceleration in connection with a foreclosure or other
involuntary payment or (iv) such waiver is standard and customary in servicing
similar Mortgage Loans and relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Master Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan. In no event will the Master Servicer waive
a Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default. If a Prepayment
Charge is waived, but does not meet the standards described above, then the
Master Servicer is required to pay the amount of such waived Prepayment Charge
to the holder of the Class SB Certificates at the time that the amount prepaid
on the related Mortgage Loan is required to be deposited into the Custodial
Account. Notwithstanding any other provisions of this Agreement, any payments
made by the Master Servicer in respect of any waived Prepayment Charges pursuant
to this Section shall be deemed to be paid outside of the Trust Fund and not
part of any REMIC.
[Signatures begin on following page.]
IN WITNESS WHEREOF, the parties have entered into this Assignment and
Assumption Agreement as of the date first above written.
RESIDENTIAL FUNDING CORPORATION
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
EXHIBIT A
Prepayment Charge Schedule
(see attachment)
EXHIBIT B
APPENDIX E OF THE STANDARD & POOR'S GLOSSARY FOR
FILE FORMAT FOR LEVELS(R) VERSION 5.6b REVISED
REVISED February 07, 0000
XXXXXXXX X - STANDARD & POOR'S ANTI-PREDATORY LENDING CATEGORIZATION
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
Applicable
Anti-Predatory Lending
Law/Effective Date Law
---------------------------- ---------------------------------------- --------------------------
---------------------------- ---------------------------------------- --------------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code Xxx. xx.xx. 00-00-000 et seq.
Effective July 16, 2003
---------------------------- ---------------------------------------- --------------------------
---------------------------- ---------------------------------------- --------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code Covered Loan
xx.xx. 757.01 et seq.
Effective June 2, 2003
---------------------------- ---------------------------------------- --------------------------
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. xx.xx. 5-3.5-101 et seq.
Effective for covered loans offered or
entered into on or after January 1,
2003. Other provisions of the Act took effect on
June 7, 2002
---------------------------- ---------------------------------------- --------------------------
Connecticut Connecticut Abusive Home Loan Lending High Cost Home Loan
Practices Act, Conn. Gen. Stat. xx.xx.
36a-746 et seq.
Effective October 1, 2001
---------------------------- ---------------------------------------- --------------------------
District of Columbia Home Loan Protection Act, D.C. Code xx.xx. Covered Loan
26-1151.01 et seq.
Effective for loans closed on or after
January 28, 2003
---------------------------- ---------------------------------------- --------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. xx.xx. High Cost Home Loan
494.0078 et seq.
Effective October 2, 2002
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 0000 - Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
Georgia as amended (Mar. Georgia Fair Lending Act, Ga. Code High Cost Home Loan
7, 2003 - current) Xxx. xx.xx. 7-6A-1 et seq.
Effective for loans closed on or after
March 7, 2003
---------------------------- ---------------------------------------- --------------------------
HOEPA Section 32 Home Ownership and Equity Protection High Cost Loan
Act of 1994, 15 U.S.C. ss. 1639, 12
C.F.R. xx.xx. 226.32 and 226.34
Effective October 1, 1995, amendments
October 1, 2002
---------------------------- ---------------------------------------- --------------------------
Illinois High Risk Home Loan Act, Ill. Comp. High Risk Home Loan
Stat. tit. 815, xx.xx. 137/5 et seq.
Effective January 1, 2004 (prior to this date,
regulations under Residential Mortgage License Act
effective from May 14, 2001)
---------------------------- ---------------------------------------- --------------------------
Indiana Indiana Home Loan Practices Act, Ind. High Cost Home Loan
Code Xxx. xx.xx. 24-9-1-1 et seq.
Effective for loans originated on or after January
1, 2005.
---------------------------- ---------------------------------------- --------------------------
ansas Consumer Credit Code, Kan. Stat. Xxx. High Loan to Value
xx.xx. 16a-1-101 et seq. Consumer Loan (id. ss.
16a-3-207)
and;
Sections 16a-1-301 and 16a-3-207
became effective April 14, 1999;
Section 16a-3-308a became effective
July 1, 1999
---------------------------- ---------------------------------------- --------------------------
High APR Consumer Loan
(id. ss. 16a-3-308a)
---------------------------- ---------------------------------------- --------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home Loan High Cost Home Loan
Act, Ky. Rev. Stat. xx.xx. 360.100 et seq.
Effective June 24, 2003
---------------------------- ---------------------------------------- --------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. High Rate High Fee
9-A, xx.xx. 8-101 et seq. Mortgage
Effective September 29, 1995 and as
amended from time to time
---------------------------- ---------------------------------------- --------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. xx.xx. High Cost Home Loan
32.00 et seq. and 209 C.M.R. xx.xx. 40.01
et seq.
Effective March 22, 2001 and amended
from time to time
---------------------------- ---------------------------------------- --------------------------
Massachusetts Predatory Home Loan High Cost Home Mortgage
Practices Act Loan
Mass. Gen. Laws ch. 183C, xx.xx. 1 et seq.
Effective November 7, 2004
---------------------------- ---------------------------------------- --------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. Home Loan
xx.xx. 598D.010 et seq.
Effective October 1, 2003
---------------------------- ---------------------------------------- --------------------------
ew Jersey New Jersey Home Ownership Security Act High Cost Home Loan
of 2002, N.J. Rev. Stat. xx.xx. 46:10B-22
et seq.
Effective for loans closed on or after
November 27, 2003
---------------------------- ---------------------------------------- --------------------------
New Mexico Home Loan Protection Act, N.M. Rev. High Cost Home Loan
Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on or
after April 1, 2003
---------------------------- ---------------------------------------- --------------------------
North Carolina Restrictions and Limitations on High High Cost Home Loan
Cost Home Loans, N.C. Gen. Stat. xx.xx.
24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end lines
of credit)
---------------------------- ---------------------------------------- --------------------------
Ohio H.B. 386 (codified in various sections Covered Loan
of the Ohio Code), Ohio Rev. Code Xxx.
xx.xx. 1349.25 et seq.
Effective May 24, 2002
---------------------------- ---------------------------------------- --------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10 Mortgage
various sections of Title 14A)
Effective July 1, 2000; amended
effective January 1, 2004
---------------------------- ---------------------------------------- --------------------------
South Carolina South Carolina High Cost and Consumer High Cost Home Loan
Home Loans Act, S.C. Code Xxx. xx.xx.
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
---------------------------- ---------------------------------------- --------------------------
West Virginia West Virginia Residential Mortgage West Virginia Mortgage
Lender, Broker and Servicer Act, W. Loan Act Loan
Va. Code Xxx. xx.xx. 31-17-1 et seq.
Effective June 5, 2002
---------------------------- ---------------------------------------- --------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
---------------------------- ---------------------------------------- --------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
Applicable
Anti-Predatory Lending
Law/Effective Date Law
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Covered Loan
Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act Covered Home Loan
of 2002, N.J. Rev. Stat. xx.xx. 46:10B-22
et seq.
Effective November 27, 2003 - July 5,
2004
---------------------------- ---------------------------------------- --------------------------
STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
Applicable
Anti-Predatory Lending
Law/Effective Date Law
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Home Loan
Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act Home Loan
of 2002, N.J. Rev. Stat. xx.xx. 46:10B-22
et seq.
Effective for loans closed on or after
November 27, 2003
---------------------------- ---------------------------------------- --------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Home Loan
Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------
North Carolina Restrictions and Limitations on High Consumer Home Loan
Cost Home Loans, N.C. Gen. Stat. xx.xx.
24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end lines
of credit)
---------------------------- ---------------------------------------- --------------------------
South Carolina South Carolina High Cost and Consumer Consumer Home Loan
Home Loans Act, S.C. Code Xxx. xx.xx.
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
---------------------------- ---------------------------------------- --------------------------
