MORTGAGE LOAN PURCHASE AGREEMENT
This
Mortgage Loan Purchase Agreement (the “Agreement”), dated as of October 30,
2007, is between HSI Asset Securitization Corporation, a Delaware corporation
(the “Company”), and HSBC Bank USA, National Association, a national banking
association (the “Seller”).
The
Company and the Seller hereby recite and agree as follows:
1. Defined
Terms.
Terms
used without definition herein shall have the respective meanings assigned
to
them in the Pooling and Servicing Agreement, dated as of October 1, 2007, by
and
among the Company, as depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the
“Master Servicer”) Xxxxx Fargo Bank, N.A. as securities administrator (the
“Securities Administrator”), Xxxxx Fargo Bank, N.A. as custodian (the
“Custodian”), and Deutsche Bank National Trust Company, as trustee (the
“Trustee”),
relating to the issuance of the HSI Asset Loan Obligation Trust 2007-2 Mortgage
Pass-Through Certificates, Series 2007-2 (the “Pooling and Servicing
Agreement”). Unless otherwise defined herein, capitalized terms used herein
shall have the same meanings assigned to them in the Pooling and Servicing
Agreement.
2. Purchase
of Mortgage Loans.
The
Seller hereby sells, transfers, assigns and conveys, and the Company hereby
purchases the mortgage loans (the “Mortgage Loans”) listed on the Mortgage Loan
Schedule in Exhibit
1.
The
Company and Seller intend that the conveyance by Seller 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
Seller to the Company. It is, further, not intended that such conveyance be
deemed to be a pledge of the Mortgage Loans by the Seller to the Company to
secure a debt or other obligation of the Seller. However, in the event that
the
Mortgage Loans are held to be property of the Seller, or if for any reason
this
Agreement is held or deemed to create a security interest in the Mortgage Loans,
then it is intended that (a) this Agreement shall be a security agreement
within the meaning of Articles 8 and 9 of the New York Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction;
(b) the conveyance provided for in this paragraph shall be deemed to be,
and hereby is, a grant by the Seller to the Company of a security interest
in
all of the Seller’s right, title and interest, whether now owned or hereafter
acquired, in and to any and all general intangibles, payment intangibles,
accounts, chattel paper, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices of credit and
investment property consisting of, arising from or relating to any of the
following: (A) the Mortgage Loans, the related Mortgage Note, the Mortgage,
any insurance policies and all other documents in the related Mortgage File,
(B) all monies due or to become due pursuant to the Mortgage Loans in
accordance with the terms thereof and (C) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or
other property; (c) the possession by the Trustee, the Securities
Administrator 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 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
New York 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, securities intermediaries, bailees or agents of, or persons
holding for (as applicable) the Trustee for the purpose of perfecting such
security interest under applicable law. The Seller shall, to the extent
consistent with this Agreement, take such reasonable actions as may be necessary
to ensure that, if this Agreement were determined to create a security interest
in the Mortgage Loans and the other property described above, such security
interest would be determined 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, the Seller
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 the Seller, 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 the Seller or the Company, (2) any change of location of the
place of business or the chief executive office of the Seller or, (3) any
transfer of any interest of the Seller in any Mortgage Loan.
3. Purchase
Price; Purchase and Sale.
The
purchase price (the “Purchase Price”) for the Mortgage Loans shall be
$450,145,191
inclusive
of accrued
and unpaid interest on the Mortgage Loans at the weighted average interest
rate
borne by the Mortgage Loans from the date hereof to but not including the
Closing Date, payable by the Company to the Seller on the Closing Date either
(i) by appropriate notation of an inter-company transfer between affiliates
of
HSBC or (ii) in immediately available federal funds wired to such bank as may
be
designated by the Seller.
Upon
payment of the Purchase Price, the Seller shall be deemed to have transferred,
assigned, set over and otherwise conveyed to the Company all the right, title
and interest of the Seller in and to the Mortgage Loans as of the Cut-Off Date,
including all interest and principal due on the Mortgage Loans after the Cut-Off
Date (including Scheduled Payments due after the Cut-Off Date but received
by
the Seller on or before the Cut-Off Date, but not including payments of
principal and interest due on the Mortgage Loans on or before the Cut-Off Date),
together with all of the Seller’s right, title and interest in and to the
proceeds of any related title, hazard, primary mortgage or other insurance
policies.
The
Company hereby directs the Seller, and the Seller hereby agrees, to deliver
to
the Trustee all documents, instruments and agreements required to be delivered
by the Company to the Trustee under the Pooling and Servicing Agreement and
such
other documents, instruments and agreements as the Company or the Trustee shall
reasonably request.
4. Representations
and Warranties.
The
Seller hereby represents and warrants to the Company with respect to each
Mortgage Loan as of the date hereof and as of the Closing Date as follows:
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(a)
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With
respect to each Mortgage Loan, as of the date hereof and as of the
Closing
Date:
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(1)
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There
is no default, breach, violation or event of acceleration existing
under
the mortgage or the Mortgage Note and there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments, insurance
premiums,
leasehold payments, or other outstanding charges affecting the
related
Mortgaged Property;
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(2)
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The
terms of the Mortgage Note and the mortgage have not been impaired,
waived, altered or modified in any respect, except by written instruments,
recorded, or in the process of being recorded, in the applicable
public
recording office if necessary to maintain the lien priority of
the
mortgage. No instrument of waiver, alteration or modification has
been
executed, and no mortgagor has been released, in whole or in part,
except
in connection with an assumption agreement approved by the title
insurer,
to the extent required by the policy, and which assumption agreement
has
been delivered to the custodian;
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(3)
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The
Mortgage Note and the mortgage are not subject to any right of
rescission,
set-off, counterclaim or defense, including the defense of usury,
nor will
the operation of any of the terms of the Mortgage Note and the
mortgage,
or the exercise of any right under the Mortgage Note or the mortgage,
render the mortgage unenforceable, in whole or in part, or subject
to any
right of rescission, set-off, counterclaim or defense, including
the
defense of usury and no such right of rescission, set-off, counterclaim
or
defense has been asserted with respect
thereto;
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(4)
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All
buildings upon the Mortgaged Property are insured by an insurer
in
accordance with the applicable underwriting guidelines against
loss by
fire, hazards of extended coverage and such other hazards as are
customary
in the area where the Mortgaged Property is
located;
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(5)
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Any
and all requirements of any federal, state or local law including,
without
limitation, usury, truth in lending, real estate settlement procedures,
predatory and abusive lending, consumer credit protection, equal
credit
opportunity, fair housing or disclosure laws (i) applicable to
the
origination and servicing of Mortgage Loans of a type similar to
the
Mortgage Loans to be transferred to the Trust and (ii) applicable
to any
prepayment penalty associated with the Mortgage Loans at origination,
have
been complied with;
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(6)
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The
mortgage has not been satisfied, cancelled, subordinated or rescinded,
in
whole or in part, and the Mortgaged Property has not been released
from
the lien of the mortgage, in whole or in part, nor has any instrument
been
executed that would effect any such satisfaction, cancellation,
subordination, rescission or
release;
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(7)
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The
mortgage is a valid, existing and enforceable first lien on the
Mortgaged
Property, including all improvements on the Mortgaged Property
subject
only to:
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(i)
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the
lien of current real property taxes and assessments not yet due
and
payable;
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(ii)
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covenants,
conditions and restrictions, rights of way, easements and other
matters of
the public record as of the date of recording acceptable to mortgage
lending institutions generally and specifically referred to in
the
lender’s title insurance policy delivered to the originator of the
Mortgage Loan and which do not materially and adversely affect
the
appraised value of the Mortgaged
Property;
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(iii)
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to
the extent the Mortgage Loan is a Second Lien Mortgage Loan, the
related
first lien on the Mortgaged Property;
and
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(iv)
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other
matters to which like properties are commonly subject which do
not
materially interfere with the benefits of the security intended
to be
provided by the mortgage or the use, enjoyment, value or marketability
of
the related Mortgaged Property. Any security agreement, chattel
mortgage
or equivalent document related to and delivered in connection with
the
Mortgage Loan establishes and creates a valid, existing and enforceable
first or second lien and first or second priority security interest
on the
property described therein. The Mortgaged Property was not, as
of the date
of origination of the Mortgage Loan, subject to a mortgage, deed
of trust,
deed to secure debt or other security instrument creating a lien
subordinate to the lien of the
mortgage;
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(8)
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The
Mortgage Note and the related mortgage are genuine and each is
the legal,
valid and binding obligation of the maker thereof, enforceable
in
accordance with its terms, except as such enforcement may be limited
by
bankruptcy, insolvency, reorganization or other similar
laws;
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4
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(9)
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The
Mortgage Loan is covered by an American Land Title Association
lender’s
title insurance policy;
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(10)
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The
Mortgage Loan was (a) originated by the applicable Mortgage Loan
Seller or
by a savings and loan association, a savings bank, a commercial
bank,
credit union, insurance company or similar institution which is
supervised
and examined by a federal or state authority, or by a mortgagee
approved
as such by the Secretary of HUD or (b) acquired by the applicable
Mortgage
Loan Seller through loan brokers or correspondents in which case
the
Mortgage Loan was re-underwritten by the applicable Mortgage Loan
Seller
in accordance with the applicable underwriting guidelines (including
exception practices as set forth in such underwriting guidelines)
and each
such loan broker or correspondent shall be a qualified
correspondent;
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(11)
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The
Mortgaged Property is lawfully occupied under applicable law; all
inspections, licenses and certificates required to be made or issued
with
respect to all occupied portions of the Mortgaged Property and,
with
respect to the use and occupancy of the same, including but not
limited to
certificates of occupancy, have been made or obtained from the
appropriate
authorities;
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(12)
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The
Mortgage Note is not and has not been secured by any collateral
except the
lien of the corresponding mortgage on the Mortgaged Property and
the
security interest of any applicable security agreement or chattel
mortgage;
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(13)
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The
Mortgaged Property is free of damage and waste and there is no
proceeding
pending for the total or partial condemnation of the Mortgaged
Property;
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(14)
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No
Mortgage Loan is (i)(a) subject to the provisions of the Homeownership
and
Equity Protection Act of 1994 as amended (“HOEPA”) or (b) has an annual
percentage rate or total points and fees that exceeds the HOEPA
thresholds
(as defined in 12 CFR 226.32 (a)(1)(i) and (ii)), (ii) a “high cost”
mortgage loan, “covered” mortgage loan, “high risk home” mortgage loan, or
“predatory” mortgage loan or any other comparable term, no matter how
defined under any federal, state or local law, (iii) subject to
any
comparable federal, state or local statutes or regulations, or
any other
statute or regulation providing for heightened regulatory scrutiny
or
assignee liability to holders of such Mortgage Loans, or (iv) a
High Cost
Loan or Covered Loan, as applicable (as such terms are defined
in the
current Standard & Poor’s LEVELS® Glossary Revised, Appendix
E).
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(15)
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No
Mortgage Loan is secured by real property or secured by a manufactured
home located in the state of Georgia unless (x) such Mortgage Loan
was
originated prior to October 1, 2002 or after March 6, 2003, or
(y) the
property securing the Mortgage Loan is not, nor will be, occupied
by the
mortgagor as the mortgagor’s principal
dwelling;
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(16)
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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);
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(17)
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With
respect to each Mortgage Loan, the applicable Servicer or its subservicer
has fully and accurately furnished complete information (i.e.,
favorable
or unfavorable) on the related borrower credit files to Equifax,
Experian
and Trans Union Credit Information Company, in accordance with
the Fair
Credit Reporting Act and its implementing regulations, on a monthly
basis;
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(18)
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With
respect to any Mortgage Loan that contains a provision permitting
imposition of a premium upon a prepayment prior to maturity: (i)
prior to
the Mortgage Loan’s origination, the related mortgagor agreed to such
premium in exchange for a monetary benefit, including but not limited
to a
rate or fee reduction, (ii) prior to the Mortgage Loan’s origination, the
related mortgagor was offered the option of obtaining a Mortgage
Loan that
did not require payment of such a premium; provided, that such
offer may
have been evidenced by the applicable Mortgage Loan Seller’s rate
sheet/pricing grid relating to such Mortgage Loan, which provided
that the
Mortgage Loan had a full prepayment premium buy-out pricing adjustment
available, (iii) the prepayment premium is disclosed to the related
mortgagor in the mortgage loan documents pursuant to applicable
state and
federal law, and (iv) notwithstanding any state or federal law
to the
contrary, the servicers shall not impose such prepayment charge
in any
instance when the Mortgage Loan is accelerated or paid off in connection
with the workout of a delinquent Mortgage Loan or as the result
of the
mortgagor’s default in making the loan
payments;
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(19)
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No
mortgagor was required to purchase any credit insurance product
(e.g.,
life, mortgage, disability, accident, unemployment or health insurance
product) or debt cancellation agreement as a condition of obtaining
the
extension of credit. No mortgagor obtained a prepaid single premium
credit
insurance policy (e.g., life, mortgage, disability, accident, unemployment
or health insurance product) or debt cancellation agreement in
connection
with the origination of the Mortgage Loan. No proceeds from any
Mortgage
Loan were used to purchase single premium credit insurance policies
or
debt cancellation agreements as part of the origination of, or
as a
condition to closing, such Mortgage Loan;
and
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(20)
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All
points and fees related to each Mortgage Loan were disclosed in
writing to
the related borrower in accordance with applicable state and federal
laws
and regulations.
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(21)
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The
Seller has good title to the Mortgage Loans and the Mortgage Loans
were
subject to no offsets, defenses or
counterclaims.
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(22)
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The
information set forth in the Mortgage Loan Schedule is complete,
true and
correct as of the Cut-off Date.
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It
is
understood and agreed that the representations and warranties of the Seller
set
forth in this Section 4 shall survive the Closing Date. Upon the discovery
by
either the Seller or the Company of a breach of any of the foregoing
representations and warranties that (i) adversely and materially affects the
value of the related Mortgage Loan and (ii) does not also constitute a breach
of
a representation or warranty of the applicable Mortgage Loan Seller under the
applicable Transfer Agreement (except that this clause (ii) shall not apply
to
Mortgage Loans originated by American Home Mortgage Corp.), the party
discovering the breach shall give prompt written notice to the other. Within
30
days of the earlier of either discovery by or notice to the Seller of any breach
of any of the foregoing representations or warranties that materially and
adversely affects the value of any Mortgage Loan, the Seller shall use its
best
efforts to cure such breach in all material respects and, if such defect or
breach cannot be remedied, the Seller shall, at the Company’s option as
specified in writing and provided to the Seller, (i) if such 30 day period
expires prior to the second anniversary of the Closing Date, remove such
Mortgage Loan from the Trust Fund and substitute in its place a Substitute
Mortgage Loan; or (ii) repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the foregoing, with respect to any of the foregoing
representations and warranties made in subparagraphs (b) of this Section 4,
a
breach of any such representation or warranty shall be deemed to materially
and
adversely affect the value of the affected Mortgage Loan and the interests
of
Certificateholders therein, thus requiring the Seller to repurchase or
substitute such Mortgage Loan irrespective of the Seller’s knowledge of the
breach or violation of the representation or warranty.
5. Repurchase
and Substitution of Mortgage Loans.
In the
event a Mortgage Loan Seller fails to perform its repurchase or substitution
obligations under its related Transfer Agreement resulting from the insolvency
or financial inability of such Mortgage Loan Seller to do so, the Seller may,
in
its sole discretion, opt to undertake such repurchase or
substitution.
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6. Underwriting.
The
Seller hereby agrees to furnish any and all information, documents,
certificates, letters or opinions with respect to the Mortgage Loans, reasonably
requested by the Company in order to perform any of its obligations or satisfy
any of the conditions on its part to be performed or satisfied pursuant to
the
underwriting agreement dated October 30, 2007, among the Company, the Seller
and
HSBC Securities (USA) Inc., or the Purchase Agreement at or prior to the Closing
Date.
7. Notices.
All
demands, notices and communications hereunder shall be in writing, shall be
effective only upon receipt and shall, if sent to the Company, be addressed
to
it at HSI Asset Securitization Corporation, 000 Xxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS/MBS Structured Finance, or, if sent
to
the Seller, be addressed to it at HSBC Bank USA, National Association, 000
Xxxxx
Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS/MBS Structured Finance.
8. Miscellaneous.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated except by a writing signed by the party against
whom enforcement of such change, waiver, discharge or termination is sought.
This Agreement may be signed in any number of counterparts, each of which shall
be deemed an original, which taken together shall constitute one and the same
instrument. This Agreement shall bind and inure to the benefit of and be
enforceable by the Company and the Seller and their respective successors and
assigns.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Company and the Seller have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
HSI
ASSET SECURITIZATION
CORPORATION
By:
/s/
Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Vice President
HSBC
BANK USA, NATIONAL
ASSOCIATION
By:
/s/
Xxxxx Xxxx
Name:
Xxxxx Xxxx
Title:
Officer #15567
EXHIBIT
1
Mortgage
Loan Schedule
To
be
retained in a separate closing binder entitled “HALO 2007-2 Mortgage Loan
Schedules” at the Chicago offices of Xxxxx Xxxxx LLP
1-1
