ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of March 12, 2007, between Residential Funding
Company, LLC, a Delaware limited liability company ("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.
C. The Company, RFC, as master servicer (in such capacity, the "Master Servicer"), and
U.S. Bank National Association, as trustee (the "Trustee"), are entering into a Pooling and Servicing
Agreement dated as of March 1, 2007 (the "Pooling and Servicing Agreement"), pursuant to which the Trust
proposes to issue Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-EMX1 (the
"Certificates") consisting of seven classes designated as Class A-I-1, Class A-I-2, Class A-I-3,
Class A-I-4, Class A-II, Class SB and Class R 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 and Class R Certificates (the "Retained Certificates"). The Class A-I-1, Class A-I-2,
Class A-I-3, Class A-I-4 and Class A-II Certificates were offered to investors pursuant to a Prospectus
Supplement dated March 8, 2007 (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.
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 March 2007). In consideration of
such assignment, RFC will receive from the Company, in immediately available funds, an amount equal to
$689,671,957.00 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 and provided
that all percentages of the Mortgage Loans described in this Section 4 are approximate percentages by
outstanding principal balance determined as of the Cut-off Date after deducting payments due during the
month of the Cut-off Date):
(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 Exhibit A attached hereto (the "Junior Lien Mortgage Loans")) and
had full right and authority to sell and assign the Mortgage Loans pursuant to this Agreement.
(ii) The proceeds of the Mortgage Loan have been fully disbursed, there is no
requirement for future advances thereunder and any and all requirements as to completion of any on-site
or off-site improvements and as to disbursements of any escrow funds therefor (including any escrow
funds held to make Monthly Payments pending completion of such improvements) have been complied with.
All costs, fees and expenses incurred in making, closing or recording the Mortgage Loans were paid.
(iii) The Mortgagor (including any party secondarily liable under the Mortgage File)
has no right of set-off, defense, counterclaim or right of rescission as to any document in the Mortgage
File except as may be provided under the Relief Act.
(iv) RFC and any other originator, servicer or other previous owner of each
Mortgage Loan has obtained all licenses and effected all registrations required under all applicable
local, state and federal laws, regulations and orders, including without limitation truth in lending and
disclosure laws, necessary to own or originate the Mortgage Loans (the failure to obtain such licenses
or to comply with such laws, regulations and orders would make such Mortgage Loans void or voidable).
(v) A policy of title insurance, in the form and amount that is in material
compliance with the Program Guide, was effective as of the closing of each Mortgage Loan, is valid and
binding, and remains in full force and effect except for Mortgaged Properties located in the State of
Iowa where an attorney's certificate has been provided in accordance with the Program Guide. No claims
have been made under such title insurance policy and no holder of the related mortgage, including RFC,
has done or omitted to do anything which would impair the coverage of such title insurance policy.
(vi) Each Mortgage Loan is a valid and enforceable first lien (or in the case of
the Junior Lien Mortgage Loans, junior lien) on the Mortgaged Property subject only to (1) the lien of
nondelinquent current real property taxes and assessments, (2) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the origination of the
related Mortgage Loan, and (3) other matters to which like properties are commonly subject that do not
materially interfere with the benefits of the security intended to be provided by such Mortgage.
(vii) All improvements which were considered in determining the Appraised Value of
the Mortgaged Property lie wholly within the boundaries and the building restriction lines of the
Mortgaged Premises, or the policy of title insurance affirmatively insures against loss or damage by
reason of any violation, variation, encroachment or adverse circumstance that either is disclosed or
would have been disclosed by an accurate survey.
(viii) There are no delinquent tax or delinquent assessment liens against the related
Mortgaged Property, and there are no mechanic's liens or claims for work, labor or material or any other
liens affecting such Mortgaged Property which are or may be a lien prior to, or equal with, the lien of
the Mortgage assigned to RFC, except those liens that are insured against by the policy of title
insurance and described in (v) above.
(ix) Each Mortgaged Property is free of material damage and is in good repair and
no notice of condemnation has been given with respect thereto.
(x) The improvements upon the Mortgaged Property are insured against loss by fire
and other hazards as required by the Program Guide, including flood insurance if required under the
National Flood Insurance Act of 1968, as amended. The Mortgage requires the Mortgagor to maintain such
casualty insurance at the Mortgagor's expense, and on the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the Mortgagor's expense and to seek
reimbursement therefore from the Mortgagor.
(xi) The appraisal was made by an appraiser who meets the minimum qualifications
for appraisers as specified in the Program Guide.
(xii) Each Mortgage Note and Mortgage constitutes a legal, valid and binding
obligation of the Mortgagor enforceable in accordance with its terms except as limited by bankruptcy,
insolvency or other similar laws affecting generally the enforcement of creditors' rights.
(xiii) Each Mortgage Loan is covered by a standard hazard insurance policy.
(xiv) None of the Mortgage Loans are secured by a leasehold estate.
(xv) The information set forth on the Mortgage Loan Schedule with respect to each
Mortgage Loan is true and correct in all material respects as of the date or dates which such
information is furnished.
(xvi) None of the Group I Loans are 30 to 59 days Delinquent in payment of principal
or interest. None of the Group I Loans have been a maximum of 30 to 59 days Delinquent in payment of
principal or interest in the last 12 months. None of the Group I Loans are 60 or more days Delinquent
in payment of principal or interest. None of the Group I Loans have been a maximum of 60 or more days
Delinquent in payment of principal or interest in the last 12 months. None of the Group II Loans are 30
or more days Delinquent in payment of principal or interest. None of the Group II Loans have been a
maximum of 30 or more days Delinquent in payment of principal or interest in the last 12 months. For
the purposes of this representation a Mortgage Loan is considered Delinquent if a Subservicer or the
Master Servicer has made any advances on the Mortgage Loan that have not been reimbursed out of payments
by the mortgagor or on the mortgagor's behalf from a source other than a Subservicer, a Seller, the
Master Servicer or an affiliated entity of either.
(xvii) 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 Ratios with respect to the Group I Loans,
and the Group II Loans, in each case by outstanding principal balance at origination, are 84.1% and
83.8%, respectively.
(xix) No more than approximately 0.7% of the Group I Loans are located in any one
zip code area in New York and no more than approximately 0.7% of the Group I Loans are located in any
one zip code area outside of New York. No more than approximately 0.7% of the Group II Loans are
located in any one zip code area outside of New York and no more than approximately 0.7% of the Group II
Loans are located in any one zip code area outside of New York.
(xx) All of the Mortgage Loans that are adjustable-rate loans will adjust
semi-annually based on Six-Month LIBOR. 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 related Mortgage Note) 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 18.5% and 12.0% of the Mortgaged Properties related to the
Group I Loans and the Group II Loans, respectively, are units in detached planned unit developments.
Approximately 2.3% and 2.8% of the Mortgaged Properties related to the Group I Loans and the Group II
Loans, respectively, are units in attached planned unit developments. Approximately 2.3% and 0.6% of
the Mortgaged Properties related to the Group I Loans and the Group II Loans, respectively, are units in
townhouses. Approximately 6.4% and 7.1% of the Mortgaged Properties related to the Group I Loans and
the Group II Loans, respectively, are condominium units. Each Mortgaged Property is suitable for
year-round occupancy.
(xxiii) Approximately 91.8% and 93.8% of the Mortgaged Properties related to the
Group I Loans and the Group II Loans, respectively, are secured by the owner's primary residence.
Approximately 3.4% and 1.7% of the Mortgaged Properties related to the Group I Loans and the Group II
Loans, respectively, are secured by the owner's second or vacation residence. Approximately 4.9% and
4.5% of the Mortgaged Properties related to the Group I Loans and the Group II Loans, respectively, are
secured by a non-owner occupied residence.
(xxiv) Approximately 62.9% and 63.9% of the Mortgaged Properties related to the
Group I Loans and the Group II Loans, respectively, are secured by detached one-family dwelling units.
Approximately 7.6% and 13.6% of the Mortgaged Properties related to the Group I Loans and the Group II
Loans, respectively, are secured by two- to four-family dwelling units.
(xxv) The average outstanding principal balance of the Group I Loans at origination
was approximately $190,197. The average outstanding principal balance of the Group II Loans at
origination was approximately $179,915. No Group I Loan at origination had a principal balance of less
than $8,990 or more than $1,000,000. No Group II Loan at origination had a principal balance of less
than $14,980 or more than $639,000.
(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 Regulation Section 1.860G 2(a)(1), (2), (4), (5), (6), (7) and
(9), without reliance on the provisions of Treasury Regulation Section 1.860G 2(a)(3) or Treasury
Regulation Section 1.860G 2(f)(2) or any other provision that would allow a Mortgage Loan to be treated
as a "qualified mortgage" notwithstanding its failure to meet the requirements of Section 860G(a)(3)(A)
of the Code and Treasury Regulation Section 1.860G 2(a)(1), (2), (4), (5), (6), (7) and (9).
(xxx) No more than 49.5% of the Group I Loans have been classified by RFC as Credit
Grade A4 Mortgage Loans, no more than 33.6% of the Group I Loans have been classified by RFC as Credit
Grade A5 Mortgage Loans, no more than 8.1% of the Group I Loans have been classified by RFC as Credit
Grade AX Mortgage Loans, no more than 5.4% of the Group I Loans have been classified by RFC as Credit
Grade AM Mortgage Loans, no more than 1.6% of the Group I Loans have been classified by RFC as Credit
Grade B Mortgage Loans and no more than 2.1% of the Group I Loans have been classified by RFC as Credit
Grade C Mortgage Loans, in each case as described generally in the Prospectus Supplement.
(xxxi) No more than 51.4% of the Group II Loans have been classified by RFC as Credit
Grade A4 Mortgage Loans, no more than 31.7% of the Group II Loans have been classified by RFC as Credit
Grade A5 Mortgage Loans, no more than 8.8% of the Group II Loans have been classified by RFC as Credit
Grade AX Mortgage Loans, no more than 4.3% of the Group II Loans have been classified by RFC as Credit
Grade AM Mortgage Loans, no more than 2.0% of the Group II Loans have been classified by RFC as Credit
Grade B Mortgage Loans and no more than 2.2% of the Group II Loans have been classified by RFC as Credit
Grade C 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 36.3% and 37.0% of the Group I Loans and Group II
Loans, respectively, 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 615.9 and 615.4, 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, as of the cut-off date, will be approximately 340 months and 345 months,
respectively. The weighted average original term to maturity of the Group I Loans and the Group II
Loans, as of the cut-off date, will be approximately 344 months and 349 months, respectively.
(xl) No Group I Loan has a prepayment penalty term that extends beyond five years
after the date of origination.
(xli) Approximately 58.7% of the Group I Loans and 58.0% of the Group II Loans are
Balloon Mortgage Loans.
(xlii) 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.
(xliii) 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, abusive and fair lending laws.
(xliv) None of the Mortgage Loans are subject to the Home Ownership and Equity
Protection Act of 1994 ("HOEPA").
(xlv) None of the Mortgaged Properties are units in manufactured housing
developments.
(xlvi) There is no Mortgage Loan in the trust that was originated on or after October
1, 2002 and before March 7, 2003, which is secured by property located in the State of Georgia.
(xlvii) No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such
terms are defined in the current version of Appendix E of the Standard & Poor's Glossary For File Format
For LEVELS® Version 5.7 (attached hereto as Exhibit B); and there is no mortgage loan in the trust that
was originated on or after January 1, 2005, which is a "high cost home loan" as defined under the
Indiana Home Practices Act (I.C. 2409); provided that no representation and warranty is made in this
clause (xlvii) with respect to none and none of the Group I Loans and Group II Loans, 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, respectively, secured by property located in the State of West Virginia.
(xlviii) With respect to each Group II Loan, no borrower obtained a prepaid
single-premium credit-life, credit disability, credit unemployment or credit property insurance policy
in connection with the origination of the Mortgage Loan.
(xlix) The related Subservicer or the Master Servicer for each Mortgage Loan has
fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to
Equifax, Experian, and Trans Union Credit Information Company (three of the credit repositories), on a
monthly basis.
(l) The Subservicer for each Mortgage Loan or the Master Servicer will fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (i.e., favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit repositories), on a monthly
basis.
(li) With respect to any Group II Loan that contains a provision permitting
imposition of a penalty upon a prepayment prior to maturity:
(i) the Seller's pricing methods include mortgage loans with and without
prepayment premiums;
(ii) borrowers selecting Group II Loans which include such prepayment
premiums receive some benefit, (e.g. a rate or fee reduction), in exchange
for selecting a Group II Loan with a prepayment premium;
(iii) the originator of the Group II Loans had a verifiable policy of
offering the borrower, or requiring third-party brokers to offer the
borrower an array of mortgage loan products that included mortgage loan
products with prepayment premiums and mortgage loan products that did
not require payment of such a premium;
(iv) the prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law;
(v) notwithstanding ay state or federal law to the contrary, the Master
Servicer shall not impose such prepayment premium in any instance when
the mortgage debt is accelerated as the result of the borrower's default in
making the loan payments; and
(vi) no Group II Loan has a prepayment penalty term that extends beyond
three years after the date of origination.
(lii) The originator of each Group II Loan offered the related borrower mortgage
loan products for which the borrower qualified and we are not aware that the originator encouraged or
required the borrower to select a mortgage loan product that is a higher cost product designed for less
creditworthy borrowers.
(liii) The originator of the Group II Loans adequately considered the borrower's
ability to make payments by employing underwriting techniques that considered a variety of factors, such
as: the borrower's income, assets and liabilities, and not solely the collateral value, in deciding to
extend the credit at the time of origination.
(liv) No borrower under a Group II Loan in the trust was charged "points and fees"
in an amount greater than (a) $1,000 or (b) 5% of the principal amount of such Mortgage Loan, whichever
is greater. For purposes of this representation, "points and fees" (x) include origination,
underwriting, broker and finder's fees and charges that the lender imposed as a condition of making the
Mortgage Loan, whether they are paid to the lender or a third party; and (y) exclude bona fide discount
points, fees paid for actual services rendered in connection with the origination of the mortgage (such
as attorney's fees, notaries fees and fees paid for property appraisals, credit reports, surveys, title
examinations and extracts, flood and tax certifications, and home inspections); the cost of mortgage
insurance or credit-risk price adjustments; the costs of title, hazard, and flood insurance policies;
state and local transfer taxes or fees; escrow deposits for the future payment of taxes and insurance
premiums; and other miscellaneous fees and charges, which miscellaneous fee and charges, in total do not
exceed 0.25 percent of the loan amount.
(lv) With respect to any Group II Loan originated on or after August 1, 2004,
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.
(lvi) The principal balance at origination for each Group II Mortgage Loan that is
secured by a single family property located in any state other than the States of Hawaii or Alaska did
not exceed $417,000. The principal balance at origination for each Group II Mortgage Loan that is
secured by a single family property located in the States of Hawaii or Alaska or the Territories of Guam
or the Virgin Islands did not exceed $625,500. The principal balance at origination for each Group II
Mortgage Loan that is secured by a two-, three- or four-family property located in any state other than
the States of Hawaii or Alaska did not exceed $553,850, $645,300 or $801,950, respectively. The
principal balance at origination for each Group II Mortgage Loan that is secured by a two-, three- or
four-family property located in the States of Hawaii or Alaska or the Territories of Guam or the Virgin
Islands did not exceed $800,775, $967,950 and $1,202,925, respectively.
(lvii) With respect to any Group II Loan that is a subordinate lien mortgage loan:
(i) such lien is on a one- to four-family residence that is the principal
residence of the borrower;
(ii) no subordinate lien mortgage loan has an original principal balance
that exceeds one-half of the one-unit limitation for first lien mortgage loans, i.e. $208,500 (in
Alaska, Guam, Hawaii or Virgin Islands: $312,750), without regard to the number of units;
and
(iii) the original principal balance of the first lien mortgage loan plus
the original principal balance of any subordinate lien mortgage loans relating to the same
mortgaged property does not exceed the applicable Xxxxxxx Mac loan limit for first lien mortgage
loans for that property type (as set out in Section 4(lvi) above).
(lviii) No Group II Loan is "seasoned" (a seasoned mortgage loan is one where the date
of the mortgage note is more than 1 year before the date of issuance of the related security).
(lix) No refinance or purchase money mortgage loan in the trust has an APR or total
points and fees that exceed the thresholds set by the Home Ownership and Equity Protection Act of 1994
("HOEPA") and its implementing regulations, including 12 CFR § 226.32(a)(1)(i) and (ii).
(lx) No fraud or misrepresentation has taken place in connection with the
origination of any Mortgage Loan.
Upon discovery by RFC or upon notice from the Company, the Trustee or the Certificate Insurer
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, it is understood by the parties hereto that a breach of the
representations and warranties made in any of clauses (xliii) through (lix) of this Section 4 with
respect to any Group II Loan will be deemed to materially and adversely affect the interests of the
Holders of the Certificates in the related 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 (xliii) 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. [Reserved.]
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. The Certificate Insurer is an express third party beneficiary of this Agreement with the
right to enforce this Agreement against RFC and the Company.
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.
10. With respect to each Subset Mortgage Loan, if the related Mortgagor fails to remit at
least two of the first three Monthly Payments due under such Subset Mortgage Loan during the month in
which such Monthly Payment was due, RFC shall repurchase such Mortgage Loan at the Purchase Price, less
the applicable Servicing Fee and Subservicing Fee, and subject to the limitations set forth in Section
2.04 of the Pooling and Servicing Agreement, within 60 days of written notice of such failure from the
Holder of the Class SB Certificates. Notwithstanding the foregoing, RFC shall not have the obligation to
repurchase any Subset Mortgage Loan in accordance with this Section 10 unless RFC has received written
notice from the Holder of the Class SB Certificates of such breach of such covenant for such Subset
Mortgage Loan within 60 days of the date of breach of such covenant. For purposes of this Section 10,
any Monthly Payment on a Subset Mortgage Loan received by a prior servicer before the servicing of such
Subset Mortgage Loan has been transferred to the Master Servicer or the related Subservicer or any
Monthly Payment that was received but misapplied by the Master Servicer or the related Subservicer shall
be deemed to be received by the Master Servicer or the related Subservicer as of the date of receipt by
such prior servicer, the Master Servicer or the Subservicer, as applicable. "Subset Mortgage Loans"
means any Mortgage Loan that has its first Monthly Payment due on or after December 1, 2006 under the
terms of the related Mortgagor Note.
[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 COMPANY, LLC
By:________________________________
Name:
Title:
RESIDENTIAL ASSET SECURITIES CORPORATION
By:________________________________
Name:
Title:
EXHIBIT A
LIST OF JUNIOR LIEN MORTGAGE LOANS
[SEE ATTACHMENT OR ON FILE WITH THE DEPOSITOR]
EXHIBIT B
APPENDIX E OF THE STANDARD & POOR'S GLOSSARY FOR
FILE FORMAT FOR LEVELS® VERSION 5.7 REVISED
REVISED October 20, 0000
XXXXXXXX X - Standard & Poor's Predatory Lending Categories
Standard & Poor's has categorized loans governed by anti-predatory lending laws in the
Jurisdictions listed below into three categories based upon a combination of factors that include (a)
the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in
those laws. Note that certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and tests that are typical of
what is generally considered High Cost by the industry.
---------------------------------------------------------------------------------------------------------------------
Standard & Poor's High Cost Loan Categorization
---------------------------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
Date Anti-Predatory Lending Law
---------------------------------- ------------------------------------------------- --------------------------------
Arkansas Arkansas Home Loan Protection Act, Ark. Code High Cost Home Loan
Xxx. §§ 00-00-000 et seq.
Effective July 16, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code §§ Covered Loan
757.01 et seq.
Effective June 2, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Colorado Consumer Equity Protection, Colo. Stat. Xxx. §§ Covered Loan
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 Practices High Cost Home Loan
Act, Conn. Gen. Stat. §§ 36a-746 et seq.
Effective October 1, 2001
---------------------------------- ------------------------------------------------- --------------------------------
District of Columbia Home Loan Protection Act, D.C. Code §§ Covered Loan
26-1151.01 et seq.
Effective for loans closed on or after January
28, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. §§ 494.0078 High Cost Home Loan
et seq.
Effective October 2, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Mar. 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Xxx. §§ High Cost Home Loan
2003) 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Georgia as amended (Mar. 7, 0000 Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Xxx. §§ High Cost Home Loan
- current) 7-6A-1 et seq.
Effective for loans closed on or after March 7,
2003
---------------------------------- ------------------------------------------------- --------------------------------
HOEPA Section 32 Home Ownership and Equity Protection Act of High Cost Loan
1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and
226.34
Effective October 1, 1995, amendments October
1, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Illinois High Risk Home Loan Act, Ill. Comp. Stat. tit. High Risk Home Loan
815, §§ 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. Code Xxx. High Cost Home Loans
§§ 24-9-1-1 et seq.
Effective January 1, 2005; amended by 2005 HB
1179, effective July 1, 2005.
---------------------------------- ------------------------------------------------- --------------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Kansas Consumer Credit Code, Kan. Stat. Xxx. §§ High Loan to Value Consumer
16a-1-101 et seq. Loan (id. § 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. §
16a-3-308a)
---------------------------------- ------------------------------------------------- --------------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Kentucky 2003 KY H.B. 000 - Xxxx Xxxx Xxxx Xxxx Xxx, Xx. High Cost Home Loan
Rev. Stat. §§ 360.100 et seq.
Effective June 24, 2003
---------------------------------- ------------------------------------------------- --------------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ High Rate High Fee Mortgage
8-101 et seq.
Effective September 29, 1995 and as amended
from time to time
---------------------------------- ------------------------------------------------- --------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. §§ 32.00 et High Cost Home Loan
seq. and 209 C.M.R. §§ 40.01 et seq.
Effective March 22, 2001 and amended from time
to time
---------------------------------- ------------------------------------------------- --------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. §§ Home Loan
598D.010 et seq.
Effective October 1, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, High Cost Home Loan
N.J. Rev. Stat. §§ 46:10B-22 et seq.
Effective for loans closed on or after November
27, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat. §§ High Cost Home Loan
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 Cost Home High Cost Home Loan
Loans, N.C. Gen. Stat. §§ 24-1.1E et seq.
Effective July 1, 2000; amended October 1, 2003
(adding open-end lines of credit)
---------------------------------- ------------------------------------------------- --------------------------------
Ohio H.B. 386 (codified in various sections of the Covered Loan
Ohio Code), Ohio Rev. Code Xxx. §§ 1349.25 et
seq.
Effective May 24, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Oklahoma Consumer Credit Code (codified in various Subsection 10 Mortgage
sections of Title 14A)
Effective July 1, 2000; amended effective
January 1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
Rhode Island Rhode Island Home Loan Protection Act, R.I. High Cost Home Loan
Gen. Laws §§ 34-25.2-1 et seq. Effective
December 31, 2006.
---------------------------------- ------------------------------------------------- --------------------------------
South Carolina South Carolina High Cost and Consumer Home High Cost Home Loan
Loans Act, S.C. Code Xxx. §§ 37-23-10 et seq.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
Tennessee Tennessee Home Loan Protection Act, Tenn. Code High Cost Home Loan
Xxx. §§ 00-00-000 et seq. Effective January 1,
2007.
---------------------------------- ------------------------------------------------- --------------------------------
West Virginia West Virginia Residential Mortgage Lender, West Virginia Mortgage Loan
Broker and Servicer Act, W. Va. Code Xxx. §§ Act Loan
31-17-1 et seq.
Effective June 5, 2002
---------------------------------------------------------------------------------------------------------------------
Standard & Poor's Covered Loan Categorization
---------------------------------- ------------------------------------------------- --------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
Date Anti-Predatory Lending Law
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Mar. 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Xxx. §§ Covered Loan
2003) 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, Covered Home Loan
N.J. Rev. Stat. §§ 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 Law/Effective Category under Applicable
Date Anti-Predatory Lending Law
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Mar. 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Xxx. §§ Home Loan
2003) 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, Home Loan
N.J. Rev. Stat. §§ 46:10B-22 et seq.
Effective for loans closed on or after November
27, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat. §§ Home Loan
58-21A-1 et seq.
Effective as of January 1, 2004; Revised as of
February 26, 2004
---------------------------------- ------------------------------------------------- --------------------------------
North Carolina Restrictions and Limitations on High Cost Home Consumer Home Loan
Loans, N.C. Gen. Stat. §§ 24-1.1E et seq.
Effective July 1, 2000; amended October 1, 2003
(adding open-end lines of credit)
---------------------------------- ------------------------------------------------- --------------------------------
South Carolina South Carolina High Cost and Consumer Home Consumer Home Loan
Loans Act, S.C. Code Xxx. §§ 37-23-10 et seq.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
