MORTGAGE LOAN PURCHASE AGREEMENT
THIS
MORTGAGE LOAN PURCHASE AGREEMENT dated as of March 30, 2006 by and between
FIRST
HORIZON HOME LOAN CORPORATION, a Kansas corporation (the “Seller”), and FIRST
TENNESSEE BANK NATIONAL ASSOCIATION (the “Purchaser”).
WHEREAS,
the Seller owns certain Mortgage Loans (as hereinafter defined) which Mortgage
Loans are more particularly listed and described in Schedule
A
attached
hereto and made a part hereof.
WHEREAS,
the Seller and the Purchaser wish to set forth the terms pursuant to which
the
Mortgage Loans, excluding the servicing rights thereto, are to be sold by the
Seller to the Purchaser.
WHEREAS,
the Seller will simultaneously transfer the servicing rights for the Mortgage
Loans to First Tennessee Mortgage Services, Inc. (“FTMSI”) pursuant to the
Servicing Rights Transfer and Subservicing Agreement (as hereinafter
defined).
WHEREAS,
the Purchaser will engage FTMSI to service the Mortgage Loans pursuant to the
Servicing Agreement (as hereinafter defined).
NOW,
THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE
I
Definitions
Agreement:
This
Mortgage Loan Purchase Agreement, as the same may be amended, supplemented
or
otherwise modified from time to time in accordance with the terms
hereof.
Alternative
Title Product:
Any one
of the following: (i) Lien Protection Insurance issued by Integrated Loan
Services or ATM Corporation of America, (ii) a Mortgage Lien Report issued
by
EPN Solutions/ACRAnet, (iii) a Property Plus Report issued by Rapid Refinance
Service through XxxxxxxXxxxxxx.xxx, or (iv) such other alternative title
insurance product that the Seller utilizes in connection with its then current
underwriting criteria.
Business
Day:
Any day
other than (i) a Saturday or a Sunday, or (ii) a day on which banking
institutions in the City of Dallas, the State of Texas or New York City is
located are authorized or obligated by law or executive order to be
closed.
Closing
Date:
March
30, 2006
Code:
The
Internal Revenue Code of 1986, including any successor or amendatory
provisions.
Cooperative
Corporation:
The
entity that holds title (fee or an acceptable leasehold estate) to the real
property and improvements constituting the Cooperative Property and which
governs the Cooperative Property, which Cooperative Corporation must qualify
as
a Cooperative Housing Corporation under Section 216 of the Code.
Coop
Shares:
Shares
issued by a Cooperative Corporation.
Cooperative
Loan:
Any
Mortgage Loan secured by Coop Shares and a Proprietary Lease.
Cooperative
Property:
The
real property and improvements owned by the Cooperative Corporation, including
the allocation of individual dwelling units to the holders of the Coop Shares
of
the Cooperative Corporation.
Cooperative
Unit:
A
single family dwelling located in a Cooperative Property.
Custodian:
First
Tennessee Bank National Association, and its successors and assigns, as
custodian under the Custodial Agreement dated as of March 30, 2006 by and among
The Bank of New York, as trustee, First Horizon Home Loan Corporation, as master
servicer, and the Custodian.
Cut-Off
Date:
March
1, 2006.
Cut-off
Date Principal Balance:
As to
any Mortgage Loan, the Stated Principal Balance thereof as of the close of
business on the Cut-off Date.
Debt
Service Reduction:
With
respect to any Mortgage Loan, a reduction by a court of competent jurisdiction
in a proceeding under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan which became final and non-appealable, except such a reduction
resulting from a Deficient Valuation or any reduction that results in a
permanent forgiveness of principal.
Deficient
Valuation:
With
respect to any Mortgage Loan, a valuation by a court of competent jurisdiction
of the Mortgaged Property in an amount less than the then-outstanding
indebtedness under the Mortgage Loan, or any reduction in the amount of
principal to be paid in connection with any Scheduled Payment that results
in a
permanent forgiveness of principal, which valuation or reduction results from
an
order of such court which is final and non-appealable in a proceeding under
the
United States Bankruptcy Reform Act of 1978, as amended.
Delay
Delivery Mortgage Loans:
The
Mortgage Loans for which all or a portion of a related Mortgage File is not
delivered to the Trustee or to the Custodian on its behalf on the Closing Date.
The number of Delay Delivery Mortgage Loans shall not exceed 25% of the
aggregate number of Mortgage Loans as of the Closing Date.
Deleted
Mortgage Loan:
As
defined in Section 4.1(c) hereof.
Determination
Date:
The
earlier of (i) the third Business Day after the 15th day of each month, and
(ii)
the second Business Day prior to the 25th
day of
each month, or if such 25th
day is
not a Business Day, the next succeeding Business Day.
GAAP:
Generally accepted accounting principles as in effect from time to time in
the
United States of America.
2
Insurance
Proceeds:
Proceeds paid by an insurer pursuant to any insurance policy, including all
riders and endorsements thereto in effect, including any replacement policy
or
policies, in each case other than any amount included in such Insurance Proceeds
in respect of expenses covered by such insurance policy.
Liquidation
Proceeds:
Amounts, including Insurance Proceeds, received in connection with the partial
or complete liquidation of defaulted Mortgage Loans, whether through trustee’s
sale, foreclosure sale or otherwise or amounts received in connection with
any
condemnation or partial release of a Mortgaged Property.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan registered with MERS on the MERS System.
MERS®
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
The
Mortgage Identification Number for any MERS Mortgage Loan.
MOM
Loan:
Any
Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for
the
originator of such Mortgage Loan and its successors and assigns.
Mortgage:
The
mortgage, deed of trust or other instrument creating a first lien on the
property securing a Mortgage Note.
Mortgage
File:
The
mortgage documents listed in Section 3.1 pertaining to a particular Mortgage
Loan and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Loans:
The
mortgage loans transferred, sold and conveyed by the Seller to the Purchaser,
pursuant to this Agreement.
Mortgage
Loan Purchase Price:
With
respect to any Mortgage Loan required to be purchased by the Seller pursuant
to
Section 4.1(c) hereof, an amount equal to the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on the date of such purchase, and (ii)
accrued interest thereon at the applicable Mortgage Rate from the date through
which interest was last paid by the Mortgagor to the first day in the month
in
which the Mortgage Loan Purchase Price is to be distributed to the Purchaser
or
its designees.
Mortgage
Note:
The
original executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage
Rate:
The
annual rate of interest borne by a Mortgage Note from time to time, net of
any
insurance premium charged by the mortgagee to obtain or maintain any primary
insurance policy.
3
Mortgaged
Property:
The
underlying property securing a Mortgage Loan, which, with respect to a
Cooperative Loan, is the related Coop Shares and Proprietary Lease.
Mortgagor:
The
obligor(s) on a Mortgage Note.
Principal
Prepayment:
Any
payment of principal by a Mortgagor on a Mortgage Loan that is received in
advance of its scheduled Due Date and is not accompanied by an amount
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Proprietary
Lease:
With
respect to any Cooperative Unit, a lease or occupancy agreement between a
Cooperative Corporation and a holder of related Coop Shares.
Purchase
Price:
$[
]
Purchaser:
First
Tennessee Bank National Association, in its capacity as purchaser of the
Mortgage Loans from the Seller pursuant to this Agreement.
Recognition
Agreement:
With
respect to any Cooperative Loan, an agreement between the Cooperative
Corporation and the originator of such Mortgage Loan which establishes the
rights of such originator in the Cooperative Property.
Scheduled
Payment:
The
scheduled monthly payment on a Mortgage Loan due on the first day of the month
allocable to principal and/or interest on such Mortgage Loan which, unless
otherwise specified herein, shall give effect to any related Debt Service
Reduction and any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
Security
Agreement: The
security agreement with respect to a Cooperative Loan.
Seller:
First
Horizon Home Loan Corporation, a Kansas corporation, and its successors and
assigns, in its capacity as seller of the Mortgage Loans.
Servicing
Agreement:
The
servicing agreement, dated as of November 26, 2002 by and between First
Tennessee Bank National Association, and its assigns, as owner, and First
Tennessee Mortgage Services, Inc., as servicer.
Servicing
Rights Transfer and Subservicing Agreement:
The
servicing rights transfer and subservicing agreement, dated as of November
26,
2002 by and between First Horizon Home Loan Corporation, as transferor and
subservicer, and First Tennessee Mortgage Services, Inc., as transferee and
servicer.
Stated
Principal Balance:
As to
any Mortgage Loan, the unpaid principal balance of such Mortgage Loan as
specified in the amortization schedule at the time relating thereto (before
any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period) after giving effect to any previous partial Principal
Prepayments and Liquidation Proceeds allocable to principal (other than with
respect to any Liquidated Mortgage Loan) and to the payment of principal due
on
such date and irrespective of any delinquency in payment by the related
Mortgagor.
4
Substitute
Mortgage Loan:
A
Mortgage Loan substituted by the Seller for a Deleted Mortgage Loan which must,
on the date of such substitution, (i) have a Stated Principal Balance, after
deduction of the principal portion of the Scheduled Payment due in the month
of
substitution, not in excess of, and not more than 10% less than the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Rate not
lower than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have a maximum
mortgage rate not more than 1% per annum higher or lower than the maximum
mortgage rate of the Deleted Mortgage Loan; (iv) have a minimum mortgage rate
specified in its related Mortgage Note not more than 1% per annum higher or
lower than the minimum mortgage rate of the Deleted Mortgage Loan; (v) have
the
same mortgage index, reset period and periodic rate as the Deleted Mortgage
Loan
and a gross margin not more than 1% per annum higher or lower than that of
the
Deleted Mortgage Loan (vi) be accruing interest at a rate no lower than and
not
more than 1% per annum higher than, that of the Deleted Mortgage Loan; (vii)
have a loan-to-value ratio no higher than that of the Deleted Mortgage Loan;
(viii) have a remaining term to maturity no greater than (and not more than
one
year less than that of) the Deleted Mortgage Loan; (ix) not be a Cooperative
Loan unless the Deleted Mortgage Loan was a Cooperative Loan and (x) comply
with
each representation and warranty set forth in Schedule
B
hereto.
Trustee:
The
Bank of New York and its successors and, if a successor trustee is appointed
hereunder, such successor.
ARTICLE
II
Purchase
and Sale
Section
2.1 Purchase
Price»
.
In
consideration for the payment to it of the Purchase Price on the Closing Date,
pursuant to written instructions delivered by the Seller to the Purchaser on
the
Closing Date, the Seller does hereby transfer, sell and convey to the Purchaser
on the Closing Date, but with effect from the Cut-off Date, (i) all right,
title
and interest of the Seller in the Mortgage Loans, excluding the servicing rights
thereto, and all property securing such Mortgage Loans, including all interest
and principal received or receivable by the Seller with respect to the Mortgage
Loans on or after the Cut-off Date and all interest and principal payments
on
the Mortgage Loans received on or prior to the Cut-off Date in respect of
installments of interest and principal due thereafter, but not including
payments of principal and interest due and payable on the Mortgage Loans on
or
before the Cut-off Date, and (ii) all proceeds from the foregoing. Items (i)
and
(ii) in the preceding sentence are herein referred to collectively as “Mortgage
Assets.”
Section
2.2 Timing.
The
sale of the Mortgage Assets hereunder shall take place on the Closing
Date.
ARTICLE
III
Conveyance
and Delivery
Section
3.1 Delivery
of Mortgage Files.
In
connection with the transfer and assignment set forth in Section 2.1 above,
the
Seller has delivered or caused to be delivered to the Trustee or to the
Custodian on its behalf (or, in the case of the Delay Delivery Mortgage Loans,
will deliver or cause to be delivered to the Trustee or to the Custodian on
its
behalf within thirty (30) days following the Closing Date) the following
documents or instruments with respect to each Mortgage Loan so assigned
(collectively, the “Mortgage Files”):
5
| (a) |
(1)the
original Mortgage Note endorsed by manual or facsimile signature in
blank
in the following form: “Pay to the order of ________________, without
recourse,” with all intervening endorsements showing a complete chain of
endorsement from the originator to the Person endorsing the Mortgage
Note
(each such endorsement being sufficient to transfer all right, title
and
interest of the party so endorsing, as noteholder or assignee thereof,
in
and to that Mortgage Note); or
|
(2) with
respect to any Lost Mortgage Note, a lost note affidavit from the Seller stating
that the original Mortgage Note was lost or destroyed, together with a copy
of
such Mortgage Note;
| (b) |
except
as provided below and for each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage or a copy of such Mortgage certified
by the Seller as being a true and complete copy of the Mortgage, and
in
the case of each MERS Mortgage Loan, the original recorded Mortgage,
noting the presence of the MIN of the Mortgage Loans and either language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan
is a
MOM Loan or if the Mortgage Loan was not a MOM Loan at origination,
the
original Mortgage and the assignment thereof to MERS, with evidence
of
recording indicated thereon, or a copy of the Mortgage certified by
the
Seller as being a true and complete copy of the
Mortgage;
|
| (c) |
in
the case of a Mortgage Loan that is not a MERS Mortgage Loan, a
duly executed assignment of the Mortgage, or a copy of such assignment
certified by the Seller as being a true and complete copy of the
assignment, in blank (which may be included in a blanket assignment
or
assignments), together with, except as provided below, all interim
recorded assignments, or copies of such interim assignments certified
by
the Seller as being true and complete copies of the interim assignments,
of such Mortgage (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of
and
transfer to the assignee thereof, under the Mortgage to which the
assignment relates); provided that, if the related Mortgage has not
been
returned from the applicable public recording office, such assignment
of
the Mortgage may exclude the information to be provided by the recording
office;
|
| (d) |
the
original or copies of each assumption, modification, written assurance
or
substitution agreement, if any;
|
| (e) |
either
the original or duplicate original title policy, or a copy of such
title
policy certified by the Seller as being a true and complete copy of
the
title policy (including all riders thereto), with respect to the related
Mortgaged Property, if available, provided that the title policy
(including all riders thereto) will be delivered as soon as it becomes
available, and if the title policy is not available, and to the extent
required pursuant to the second paragraph below or otherwise in connection
with the rating of the Certificates, a written commitment or interim
binder or preliminary report of the title issued by the title insurance
or
escrow company with respect to the Mortgaged Property, or in
lieu
thereof, an Alternative Title Product or a copy of such Alternative
Title
Product certified by the Seller as being a true and complete copy of
the
Alternative Title Product;
and
|
6
| (f) |
in
the case of a Cooperative Loan, the originals of the following documents
or instruments:
|
(1) The
Coop
Shares, together with a stock power in blank;
(2) The
executed Security Agreement;
(3) The
executed Proprietary Lease;
(4) The
executed Recognition Agreement;
(5) The
executed UCC-1 financing statement with evidence of recording thereon which
have
been filed in all places required to perfect the Seller’s interest in the Coop
Shares and the Proprietary Lease; and
(6) Executed
UCC-3 financing statements or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
In
the
event that in connection with any Mortgage Loan that is not a MERS Mortgage
Loan
the Seller cannot deliver (i) the original recorded Mortgage or (ii) all interim
recorded assignments satisfying the requirements of clause (b) or (c) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office, the Seller shall promptly deliver or cause to be delivered
to
the Trustee or the Custodian on its behalf such original Mortgage or such
interim assignment, as the case may be, with evidence of recording indicated
thereon upon receipt thereof from the public recording office, or a copy
thereof, certified, if appropriate, by the relevant recording office, but in
no
event shall any such delivery of the original Mortgage and each such interim
assignment or a copy thereof, certified, if appropriate, by the relevant
recording office, be made later than one year following the Closing Date;
provided, however, in the event the Seller is unable to deliver or cause to
be
delivered by such date each Mortgage and each such interim assignment by reason
of the fact that any such documents have not been returned by the appropriate
recording office, or, in the case of each such interim assignment, because
the
related Mortgage has not been returned by the appropriate recording office,
the
Seller shall deliver or cause to be delivered such documents to the Trustee
or
the Custodian on its behalf as promptly as possible upon receipt thereof and,
in
any event, within 720 days following the Closing Date; provided, further,
however, that the Seller shall not be required to provide an original or
duplicate lender’s title policy (together with all riders thereto) if the Seller
delivers an Alternative Title Product in lieu thereof. The Seller shall forward
or cause to be forwarded to the Trustee or the Custodian on its behalf (i)
from
time to time additional original documents evidencing an assumption or
modification of a Mortgage Loan and (ii) any other documents required to be
delivered by the Seller to the Trustee. In the event that the original Mortgage
is not delivered and in connection with the payment in full of the related
Mortgage Loan and the public recording office requires the presentation of
a
“lost instruments affidavit and indemnity” or any equivalent document, because
only a copy of the Mortgage can be delivered with the instrument of satisfaction
or reconveyance, the Seller shall execute and deliver or cause to be executed
and delivered such a document to the public recording office. In the case where
a public recording office retains the original recorded Mortgage or in the
case
where a Mortgage is lost after recordation in a public recording office, the
Seller shall deliver or cause to be delivered to the Trustee or the Custodian
on
its behalf a copy of such Mortgage certified by such public recording office
to
be a true and complete copy of the original recorded Mortgage.
7
In
addition, in the event that in connection with any Mortgage Loan the Seller
cannot deliver or cause to be delivered the original or duplicate original
lender’s title policy (together with all riders thereto), satisfying the
requirements of clause (v) above, concurrently with the execution and delivery
hereof because the related Mortgage has not been returned from the applicable
public recording office, the Seller shall promptly deliver or cause to be
delivered to the Trustee or the Custodian on its behalf such original or
duplicate original lender’s title policy (together with all riders thereto) upon
receipt thereof from the applicable title insurer, but in no event shall any
such delivery of the original or duplicate original lender’s title policy be
made later than one year following the Closing Date; provided, however, in
the
event the Seller is unable to deliver or cause to be delivered by such date
the
original or duplicate original lender’s title policy (together with all riders
thereto) because the related Mortgage has not been returned by the appropriate
recording office, the Seller shall deliver or cause to be delivered such
documents to the Trustee or the Custodian on its behalf as promptly as possible
upon receipt thereof and, in any event, within 720 days following the Closing
Date.
Notwithstanding
anything to the contrary in this Agreement, within thirty days after the Closing
Date, the Seller shall either (i) deliver or cause to be delivered to the
Trustee or the Custodian on its behalf the Mortgage File as required pursuant
to
this Section 3.1 for each Delay Delivery Mortgage Loan or (ii) (A) substitute
or
cause to be substituted a Substitute Mortgage Loan for the Delay Delivery
Mortgage Loan or (B) repurchase or cause to be repurchased the Delay Delivery
Mortgage Loan, which substitution or repurchase shall be accomplished in the
manner and subject to the conditions set forth in Section 4.1 (treating each
Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for purposes of such
Section 4.1), provided, however, that if the Seller fails to deliver a Mortgage
File for any Delay Delivery Mortgage Loan within the thirty-day period provided
in the prior sentence, the Seller shall use its best reasonable efforts to
effect or cause to be effected a substitution, rather than a repurchase of,
such
Deleted Mortgage Loan and provided further that the cure period provided for
in
Section 4.1 hereof shall not apply to the initial delivery of the Mortgage
File
for such Delay Delivery Mortgage Loan, but rather the Seller shall have five
(5)
Business Days to cure or cause to be cured such failure to deliver.
8
ARTICLE
IV
Representations
and Warranties
Section
4.1 Representations
and Warranties of the Seller»
.
(a) The
Seller hereby represents and warrants to the Purchaser, as of the date of
execution and delivery hereof, that:
(1) The
Seller is duly organized as a Kansas corporation and is validly existing and
in
good standing under the laws of the State of Kansas and is duly authorized
and
qualified to transact any and all business contemplated by this Agreement to
be
conducted by the Seller in any state in which a Mortgaged Property is located
or
is otherwise not required under applicable law to effect such qualification
and,
in any event, is in compliance with the doing business laws of any such state,
to the extent necessary to ensure its ability to enforce each Mortgage Loan
and
to perform any of its other obligations under this Agreement in accordance
with
the terms thereof.
(2) The
Seller has the full corporate power and authority to sell each Mortgage Loan,
and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Seller the execution, delivery
and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
constitutes a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(3) The
execution and delivery of this Agreement by the Seller, the sale of the Mortgage
Loans by the Seller under this Agreement, the consummation of any other of
the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms thereof are in the ordinary course of business of
the
Seller and will not (a) result in a material breach of any term or provision
of
the charter or by-laws of the Seller or (b) materially conflict with, result
in
a material breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which the
Seller is a party or by which it may be bound, or (c) constitute a material
violation of any statute, order or regulation applicable to the Seller of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Seller; and the Seller is not in breach or violation
of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it which
breach or violation may materially impair the Seller’s ability to perform or
meet any of its obligations under this Agreement.
9
(4) No
litigation is pending or, to the best of the Seller’s knowledge, threatened
against the Seller that would prohibit the execution or delivery of, or
performance under, this Agreement by the Seller.
(5) The
Seller is a member of MERS in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the MERS Mortgage Loans for as long as such Mortgage Loans are registered
with MERS.
| (b) |
The
Seller hereby makes the representations and warranties set forth in
Schedule
B
hereto to the Purchaser, as of the Closing Date, or if so specified
therein, as of the Cut-off Date.
|
| (c) |
Upon
discovery by either of the parties hereto of a breach of a representation
or warranty made pursuant to Schedule
B
hereto that materially and adversely affects the interests of the
Purchaser in any Mortgage Loan, the party discovering such breach shall
give prompt notice thereof to the other party. The Seller hereby covenants
that within 90 days of the earlier of its discovery or its receipt
of
written notice from the Purchaser of a breach of any representation
or
warranty made pursuant to Schedule
B
hereto which materially and adversely affects the interests of the
Purchaser in any Mortgage Loan, it shall cure such breach in all material
respects, and if such breach is not so cured, shall, (i) if such 90-day
period expires prior to the second anniversary of the Closing Date,
remove
such Mortgage Loan (a “Deleted Mortgage Loan”) from the pools of mortgages
listed on Schedule
B
hereto and substitute in its place a Substitute Mortgage Loan, in the
manner and subject to the conditions set forth in this Section; or
(ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the Purchaser
at the Mortgage Loan Purchase Price in the manner set forth below.
With
respect to the representations and warranties described in this Section
which are made to the best of the Seller’s knowledge, if it is discovered
by either the Seller or the Purchaser that the substance of such
representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan or the
interests of the Purchaser therein, notwithstanding the Seller’s lack of
knowledge with respect to the substance of such representation or
warranty, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
|
With
respect to any Substitute Mortgage Loan or Loans, the Seller shall deliver
to
the Trustee or to the Custodian on its behalf the Mortgage Note, the Mortgage,
the related assignment of the Mortgage, and such other documents and agreements
as are required by Section 3.1, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 3.1. No substitution is permitted to be made
in
any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Substitute Mortgage Loans in the month of
substitution will be retained by the Seller. Upon such substitution, the
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Schedule
B
hereto
with respect to such Mortgage Loan.
10
It
is
understood and agreed that the obligation under this Agreement of the Seller
to
cure, repurchase or replace any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedy against the Seller respecting
such breach available to the Purchaser on its behalf.
The
representations and warranties contained in this Agreement shall not be
construed as a warranty or guaranty by the Seller as to the future payments
by
any Mortgagor.
It
is
understood and agreed that the representations and warranties set forth in
this
Section 4.1 shall survive the sale of the Mortgage Loans to the Purchaser
hereunder.
ARTICLE
V
Miscellaneous
Miscellaneous
Section
5.1 Transfer
Intended as Sale»
.
It is
the express intent of the parties hereto that the conveyance of the Mortgage
Loans by the Seller to the Purchaser be, and be construed as, an absolute sale
thereof in accordance with GAAP and for regulatory purposes. It is, further,
not
the intention of the parties that such conveyances be deemed a pledge thereof
by
the Seller to the Purchaser. However, in the event that, notwithstanding the
intent of the parties, the Mortgage Loans are held to be the property of the
Seller or the Purchaser, respectively, or if for any other reason this Agreement
is held or deemed to create a security interest in such assets, then (i) this
Agreement shall be deemed to be a security agreement within the meaning of
the
Uniform Commercial Code of the State of Texas and (ii) the conveyance of the
Mortgage Loans provided for in this Agreement shall be deemed to be an
assignment and a grant by the Seller to the Purchaser of a security interest
in
all of the Mortgage Loans, whether now owned or hereafter acquired.
The
Seller and the Purchaser shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, 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
the
Agreement. The Seller and the Purchaser shall arrange for filing any Uniform
Commercial Code continuation statements in connection with any security interest
granted hereby.
Section
5.2 Seller’s
Consent to Assignment.
The
Seller hereby acknowledges the Purchaser’s right to assign, transfer and convey
all of the Purchaser’s rights under this Agreement to a third party and that the
representations and warranties made by the Seller to the Purchaser pursuant
to
this Agreement will, in the case of such assignment, transfer and conveyance,
be
for the benefit of such third party. The Seller hereby consents to such
assignment, transfer and conveyance.
Section
5.3 Specific
Performance.
Either
party or its assignees may enforce specific performance of this
Agreement.
Section
5.4 Notices.
All
notices, demands and requests that may be given or that are required to be
given
hereunder shall be sent by United States certified mail, postage prepaid, return
receipt requested, to the parties at their respective addresses as
follows:
| If to | ||
| the Purchaser: | 000 Xxxxxxx Xxxxxx | |
| Xxxxxxx, Xxxxxxxxx 00000 | ||
| Attn: Xxxxx X. Xxxxxxxx | ||
| If to the Seller: | 0000 Xxxxxxx Xxx | |
| Xxxxxx, Xxxxx 00000 | ||
| Attn: Xxxxx X. Xxxx | ||
Section
5.5 Choice
of Law.
This
Agreement shall be construed in accordance with and governed by the substantive
laws of the State of Texas applicable to agreements made and to be performed
in
the State of Texas and the obligations, rights and remedies of the parties
hereto shall be determined in accordance with such laws.
[remainder
of page intentionally left blank]
11
IN
WITNESS WHEREOF, the Purchaser and the Seller have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
30th day of March, 2006.
FIRST
HORIZON HOME LOAN CORPORATION, as Seller
By:
Xxxxx
XxXxx
Executive
Vice President
FIRST
TENNESSEE BANK NATIONAL ASSOCIATION, as Purchaser
By:
Xxxxxx
Xxxxx
Vice
President
Mortgage
Loan Purchase Agreement I - 2006-AR1 Signature Page
SCHEDULE
A
[Available
Upon Request From Trustee]
A-1
SCHEDULE
B
Representations
and Warranties as to the Mortgage Loans
First
Horizon Home Loan Corporation (the “Seller”) hereby makes the representations
and warranties set forth in this Schedule
B
on which
First Tennessee Bank National Association (the “Purchaser”) relies in accepting
the Mortgage Loans. Such representations and warranties speak as of the
execution and delivery of the Mortgage Loan Purchase Agreement, dated as of
March 30, 2006 (the “MLPA”), between First Horizon Home Loan Corporation, as
seller, and the Purchaser and as of the Closing Date, or if so specified herein,
as of the Cut-off Date or date of origination of the Mortgage Loans, but shall
survive the sale, transfer, and assignment of the Mortgage Loans to the
Purchaser and any subsequent sale, transfer and assignment by the Purchaser
to a
third party. Capitalized terms used but not otherwise defined in this
Schedule
B
shall
have the meanings ascribed thereto in the MLPA or the Pooling and Servicing
Agreement, dated as of March 1, 2006, between First Horizon Asset Securities
Inc., as depositor, First Horizon Home Loan Corporation, as master servicer,
and
The Bank of New York, as trustee.
| (1) |
The
information set forth on Schedule
A
to
the MLPA, with respect to each Mortgage Loan is true and correct in
all
material respects as of the Closing Date.
|
| (2) |
Each
Mortgage is a valid and enforceable first lien on the Mortgaged Property
subject only to (a) the lien of nondelinquent current real property
taxes
and assessments and liens or interests arising under or as a result
of any
federal, state or local law, regulation or ordinance relating to hazardous
wastes or hazardous substances and, if the related Mortgaged Property
is a
unit in a condominium project or Planned Unit Development, any lien
for
common charges permitted by statute or homeowner association fees,
(b)
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 generally acceptable to mortgage
lending institutions in the area wherein the related Mortgaged Property
is
located or specifically reflected in the appraisal made in connection
with
the origination of the related Mortgage Loan, and (c) 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
such Mortgage.
|
| (3) |
Immediately
prior to the assignment of the Mortgage Loans to the Purchaser, the
Seller
had good title to, and was the sole owner of, each Mortgage Loan free
and
clear of any pledge, lien, encumbrance or security interest and had
full
right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign the same pursuant
to
this Agreement.
|
| (4) |
As
of the date of origination of each Mortgage Loan, there was no delinquent
tax or assessment lien against the related Mortgaged
Property.
|
B-1
| (5) |
There
is no valid offset, defense or counterclaim to any Mortgage Note or
Mortgage, including the obligation of the Mortgagor to pay the unpaid
principal of or interest on such Mortgage
Note.
|
| (6) |
There
are no mechanics’ liens or claims for work, labor or material affecting
any Mortgaged Property which are or may be a lien prior to, or equal
with,
the lien of such Mortgage, except those which are insured against by
the
title insurance policy referred to in item (11)
below.
|
| (7) |
To
the best of the Seller’s knowledge, no Mortgaged Property has been
materially damaged by water, fire, earthquake, windstorm, flood, tornado
or similar casualty (excluding casualty from the presence of hazardous
wastes or hazardous substances, as to which the Seller makes no
representation) so as to affect adversely the value of the related
Mortgaged Property as security for such Mortgage Loan. With respect
to the
representations and warranties contained within this item (7) that
are
made to the knowledge or the best knowledge of the Seller or as to
which
the Seller has no knowledge, if it is discovered that the substance
of any
such representation and warranty is inaccurate and the inaccuracy
materially and adversely affects the value of the related Mortgage
Loan,
or the interest therein of the Purchaser, then notwithstanding the
Seller’s lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the
representation and warranty was made, such inaccuracy shall be deemed
a
breach of the applicable representation and warranty and the Seller
shall
take such action described in Section 4.1(c) of this Agreement in respect
of such Mortgage Loan.
|
| (8) |
Each
Mortgage Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws and specifically applicable predatory
and abusive lending laws, or any noncompliance does not have a material
adverse effect on the value of the related Mortgage
Loan.
|
| (9) |
No
Mortgage Loan is a “high cost loan” as defined by the specific applicable
predatory and abusive lending laws.
|
| (10) |
Except
as reflected in a written document contained in the related Mortgage
File,
the Seller has not modified the Mortgage in any material respect;
satisfied, cancelled or subordinated such Mortgage in whole or in part;
released the related Mortgaged Property in whole or in part from the
lien
of such Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect
thereto.
|
| (11) |
A
lender’s policy of title insurance together with a condominium endorsement
and extended coverage endorsement, if applicable, in an amount at least
equal to the Cut-off Date Principal Balance of each such Mortgage Loan
or
a commitment (binder) to issue the same was effective on the date of
the
origination of each Mortgage Loan, each such policy is valid and remains
in full force and effect, or, in lieu thereof, an Alternative Title
Product.
|
B-2
| (12) |
To
the best of the Seller’s knowledge, all of the improvements which were
included for the purpose of determining the appraised value of the
Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property, unless such failure
to be
wholly within such boundaries and restriction lines or such encroachment,
as the case may be, does not have a material effect on the value of
such
Mortgaged Property.
|
| (13) |
To
the best of the Seller’s knowledge, as of the date of origination of each
Mortgage Loan, no improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation
unless
such violation would not have a material adverse effect on the value
of
the related Mortgaged Property. To the best of the Seller’s knowledge, 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 and fire underwriting certificates, have
been
made or obtained from the appropriate authorities, unless the lack
thereof
would not have a material adverse effect on the value of such Mortgaged
Property.
|
| (14) |
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 and under applicable
law.
|
| (15) |
The
proceeds of the Mortgage Loans have been fully disbursed and there
is no
requirement for future advances
thereunder.
|
| (16) |
The
related Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a
deed of
trust, by trustee’s sale, and (ii) otherwise by judicial
foreclosure.
|
| (17) |
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
to the trustee under the deed of trust, except in connection with a
trustee’s sale after default by the
Mortgagor.
|
| (18) |
As
of the Closing Date, the improvements upon each Mortgaged Property
are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire and extended coverage and
coverage for such other hazards as are customarily required by
institutional single family mortgage lenders in the area where the
Mortgaged Property is located, and the Seller has received no notice
that
any premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance
including flood insurance at the Mortgagor’s cost and expense. Anything to
the contrary in this item (18) notwithstanding, no breach of this item
(18) shall be deemed to give rise to any obligation of the Seller to
repurchase or substitute for such affected Mortgage Loan or Loans so
long
as the Seller maintains a blanket policy.
|
B-3
| (19) |
If
at the time of origination of each Mortgage Loan, the related Mortgaged
Property was in an area then identified in the Federal Register by
the
Federal Emergency Management Agency as having special flood hazards,
a
flood insurance policy in a form meeting the then-current requirements
of
the Flood Insurance Administration is in effect with respect to such
Mortgaged Property with a generally acceptable
carrier.
|
| (20) |
To
the best of the Seller’s knowledge, there is no proceeding pending or
threatened for the total or partial condemnation of any Mortgaged
Property, nor is such a proceeding currently
occurring.
|
| (21) |
To
best of the Seller’s knowledge, there is no material event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a material non-monetary default, breach,
violation or event of acceleration under the Mortgage or the related
Mortgage Note; and the Seller has not waived any material non-monetary
default, breach, violation or event of
acceleration.
|
| (22) |
Any
leasehold estate securing a Mortgage Loan has a stated term at least
as
long as the term of the related Mortgage
Loan.
|
| (23) |
Each
Mortgage Loan was selected from among the outstanding adjustable-rate
one-
to four-family mortgage loans in the Seller’s portfolio at the Closing
Date as to which the representations and warranties made with respect
to
the Mortgage Loans set forth in this Schedule
B
can be made. No such selection was made in a manner intended to adversely
affect the interests of the
Certificateholders.
|
| (24) |
The
Mortgage Loans provide for the full amortization of the amount financed
over a series of monthly payments.
|
| (25) |
At
origination, substantially all of the Mortgage Loans in Pool I, Pool
II,
Pool III and Pool IV had stated terms to maturity of 30
years.
|
| (26) |
Scheduled
monthly payments made by the Mortgagors on the Mortgage Loans either
earlier or later than their Due Dates will not affect the amortization
schedule or the relative application of the payments to principal and
interest.
|
| (27) |
The
Mortgagors may prepay all of the Mortgage Loans at any time without
penalty.
|
B-4
| (28) |
Approximately
83.92%, 98.75%, 95.22% and 98.94% of the Mortgage Loans in Pool I,
Pool
II, Pool III and Pool IV, respectively, are jumbo mortgage loans that
have
Stated Principal Balances at origination that exceed the then applicable
limitations for purchase by Xxxxxx Xxx and Xxxxxxx
Mac.
|
| (29) |
Each
Mortgage Loan in Pool I, Pool II, Pool III and Pool IV was originated
on
or after June 29, 2005, January 24, 2005, November 3, 2005 and January
25,
2005, respectively.
|
| (30) |
The
latest stated maturity date of any Mortgage Loan in Pool I is March
1,
2036, and the earliest is August 1, 2035. The latest stated maturity
date
of any Mortgage Loan in Pool II is April 1, 2036, and the earliest
is
February 1, 2035. The latest stated maturity date of any Mortgage Loan
in
Pool III is March 1, 2036, and the earliest is December 1, 2035. The
latest stated maturity date of any Mortgage Loan in Pool IV is March
1,
2036, and the earliest is February 1,
2035.
|
| (31) |
No
Mortgage Loan was delinquent more than 30 days as of the Cut-off
Date.
|
| (32) |
No
Mortgage Loan had a Loan-to-Value Ratio at origination of more than
95%.
Generally, each Mortgage Loan with a Loan-to-Value Ratio at origination
of
greater than 80% is covered by a Primary Insurance Policy issued by
a
mortgage insurance company that is acceptable to Xxxxxx Mae or Xxxxxxx
Mac.
|
| (33) |
Each
Mortgage Loan constitutes a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code.
|
| (34) |
No
Mortgage Loan is a “high cost loan” as defined by the specific applicable
local, state or federal predatory and abusive lending laws. In addition,
no Mortgage Loan is a “High Cost Loan” or a “Covered Loan”, as applicable
(as such terms are defined in the then current Standard & Poor’s
LEVELSâ
Glossary which is now Version 5.6c Revised, Appendix E) and no Mortgage
Loan originated on or after October 1, 2002 through March 6, 2003 is
governed by the Georgia Fair Lending Act.
|
| (35) |
Appraisal
form 1004 or form 2055 with an interior inspection for first lien mortgage
loans has been obtained for all related mortgaged properties, other
than
condominiums, investment properties, two to four unit properties and
exempt properties, for which appraisal form 1004 or form 2055 has not
been
obtained.
|
Appraisal
form 704, 2065 or 2055 with an exterior only inspection for junior lien
mortgages combined with first lien mortgages (including home equity lines of
credit) has been obtained for all related mortgaged properties, other than
condominiums, investment properties, two to four unit properties and exempt
properties, for which appraisal form 1004 or form 2055 has not been obtained.
Appraisal form 704, 2065 or 2055 with an exterior only inspection for all other
junior lien mortgages has been obtained for all related mortgaged properties,
other than those related mortgaged properties that qualify for an Automated
Valuation Model.
B-5
