EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated September 12, 2007, between
Residential Funding Company, LLC, a Delaware limited liability company ("RFC"), and
Residential Accredit Loans, Inc., a Delaware corporation (the "Company").
RECITALS
A. RFC has entered into contracts ("Seller Contracts") with various
seller/servicers, pursuant to which such seller/servicers sell to RFC mortgage loans.
B. The Company wishes to purchase from RFC certain Mortgage Loans (as
hereinafter defined) sold to RFC pursuant to the Seller Contracts.
C. The Company, RFC, as master servicer, and Deutsche Bank Trust Company
Americas, as trustee (the "Trustee"), are entering into a Series Supplement, dated as of
August 1, 2007 (the "Series Supplement"), and the Standard Terms of Pooling and Servicing
Agreement, dated as of August 1, 2007 (together, the "Pooling and Servicing Agreement"),
pursuant to which the Company proposes to issue Mortgage Asset-Backed Pass-Through
Certificates, Series 2007-QA5 (the "Certificates") consisting of fourteen classes designated
as Class I-A-1, Class I-A-2, Class II-A-1, Class II-A-2, Class III-A-1, Class III-A-2, Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3, Class R-I and Class R-II
Certificates representing beneficial ownership interests in a trust fund consisting
primarily of a pool that will be divided into (i) one- to four-family residential hybrid
adjustable-rate first lien mortgage loans identified in Exhibit One-A to the Series
Supplement (the "Group I Loans"), (ii) one- to four-family residential hybrid
adjustable-rate first lien mortgage loans identified in Exhibit One-B to the Series
Supplement (the "Group II Loans") and (iii) one- to four-family residential hybrid
adjustable-rate first lien mortgage loans identified in Exhibit One-C to the Series
Supplement (the "Group III Loans," and together with the Group I Loans and the Group II
Loans, the "Mortgage Loans").
D. In connection with the purchase of the Mortgage Loans, the Company will
assign to RFC a de minimis portion of each of the Class R-I Certificates and Class R-II
Certificates.
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, and with respect to the Sharia Mortgage Loans,
all amounts in respect of profit payments and acquisition payments, received on or with
respect to the Mortgage Loans after August 1, 2007 (other than payments of principal and
interest, and with respect to the Sharia Mortgage Loans, all amounts in respect of profit
payments and acquisition payments, due on the Mortgage Loans on or before September 12,
2007). In consideration of such assignment, RFC or its designee will receive from the
Company in immediately available funds an amount equal to $367,510,834.71 and a de minimis
portion of each of the Class R-I Certificates and Class R-II 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) to the
order of the Trustee and delivered an assignment or security instrument, as applicable, of
mortgage in recordable form to the Trustee or its agent.
RFC and the Company agree that the sale of each Pledged Asset Loan pursuant to this
Agreement will also constitute the assignment, sale, setting-over, transfer and conveyance
to the Company, without recourse (but subject to RFC's covenants, representations and
warranties specifically provided herein), of all of RFC's obligations and all of RFC's
right, title and interest in, to and under, whether now existing or hereafter acquired as
owner of such Pledged Asset Loan with respect to any and all money, securities, security
entitlements, accounts, general intangibles, payment intangibles, instruments, documents,
deposit accounts, certificates of deposit, commodities contracts, and other investment
property and other property of whatever kind or description consisting of, arising from or
related to, (i) the Credit Support Pledge Agreement, the Funding and Pledge Agreement among
the Mortgagor or other Person pledging the related Pledged Assets (the "Customer"), Combined
Collateral LLC and National Financial Services Corporation, and the Additional Collateral
Agreement between GMAC Mortgage, LLC and the Customer (collectively, the "Assigned
Contracts"), (ii) all rights, powers and remedies of RFC as owner of such Pledged Asset Loan
under or in connection with the Assigned Contracts, whether arising under the terms of such
Assigned Contracts, by statute, at law or in equity, or otherwise arising out of any default
by the Mortgagor under or in connection with the Assigned Contracts, including all rights to
exercise any election or option or to make any decision or determination or to give or
receive any notice, consent, approval or waiver thereunder, (iii) the Pledged Amounts and
all money, securities, security entitlements, accounts, general intangibles, payment
intangibles, instruments, documents, deposit accounts, certificates of deposit, commodities
contracts, and other investment property and other property of whatever kind or description
and all cash and non-cash proceeds of the sale, exchange, or redemption of, and all stock or
conversion rights, rights to subscribe, liquidation dividends or preferences, stock
dividends, rights to interest, dividends, earnings, income, rents, issues, profits, interest
payments or other distributions of cash or other property that secures a Pledged Asset Loan,
(iv) all documents, books and records concerning the foregoing (including all computer
programs, tapes, disks and related items containing any such information) and (v) all
insurance proceeds (including proceeds from the Federal Deposit Insurance Corporation or the
Securities Investor Protection Corporation or any other insurance company) of any of the
foregoing or replacements thereof or substitutions therefor, proceeds of proceeds and the
conversion, voluntary or involuntary, of any thereof. The foregoing transfer, sale,
assignment and conveyance does not constitute and is not intended to result in the creation,
or an assumption by the Company, of any obligation of RFC, or any other Person in connection
with the Pledged Assets or under any agreement or instrument relating thereto, including any
obligation to the Mortgagor, other than as owner of the Pledged Asset Loan.
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 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, and hereby is, a grant by RFC to the Company of a security interest in all of RFC'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, including with respect to each Sharia Mortgage Loan, the
related Sharia Mortgage Loan Security Instrument, Sharia Mortgage Loan Co-Ownership
Agreement, Obligation to Pay, Assignment Agreement and Amendment of Security Instrument, any
insurance policies and all other documents in the related Mortgage File, 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,
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 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, 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. RFC 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,
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.
Notwithstanding the foregoing, (i) the Master Servicer shall retain all
servicing rights (including, without limitation, primary servicing and master servicing)
relating to or arising out of the Mortgage Loans, and all rights to receive servicing fees,
servicing income and other payments made as compensation for such servicing granted to it
under the Pooling and Servicing Agreement pursuant to the terms and conditions set forth
therein (collectively, the "Servicing Rights") and (ii) the Servicing Rights are not
included in the collateral in which RFC grants a security interest pursuant to the
immediately preceding paragraph.
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 a de minimis
portion of the Class R-1 Certificates as part of the consideration payable to RFC by the
Company pursuant to this Agreement.
4. RFC represents and warrants to the Company that on the date of execution
hereof (or, if otherwise specified below, as of the date so specified):
(a) The information set forth in Exhibit One to the Series Supplement with
respect to each Mortgage Loan or the Mortgage Loans, as the case may be, is true and correct
in all material respects, at the date or dates respecting which such information is
furnished;
(b) Each Mortgage Loan with a Loan-to-Value Ratio at origination in excess
of 80% will be insured by a Primary Insurance Policy covering at least 35% of the principal
balance of the Mortgage Loan at origination if the Loan-to-Value Ratio is between 100.00%
and 95.01%, at least 30% of the principal balance of the Mortgage Loan at origination if the
Loan-to-Value Ratio is between 95.00% and 90.01%, at least 25% of the balance if the
Loan-to-Value Ratio is between 90.00% and 85.01% and at least 12% of the balance if the
Loan-to-Value Ratio is between 85.00% and 80.01%. To the best of the Company's knowledge,
each such Primary Insurance Policy is in full force and effect and the Trustee is entitled
to the benefits thereunder;
(c) Each Primary Insurance Policy insures the named insured and its
successors and assigns, and the issuer of the Primary Insurance Policy is an insurance
company whose claims-paying ability is currently acceptable to the Rating Agencies;
(d) Immediately prior to the assignment 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, encumbrance or security interest (other than rights to servicing and
related compensation and, with respect to certain Mortgage Loans, the monthly payment due on
the first Due Date following the Cut-off Date), and no action has been taken or failed to be
taken by RFC that would materially adversely affect the enforceability of any Mortgage Loan
or the interests therein of any holder of the Certificates;
(e) None of the Mortgage Loans was 30 or more days delinquent in payment of
principal and interest as of the Cut-off Date, and none of the Mortgage Loans has been so
delinquent more than once in the 12-month period prior to the Cut-off Date;
(f) Subject to clause (e) above as respects delinquencies, 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 the Seller or by any other
entity involved in originating or servicing a Mortgage Loan;
(g) There is no delinquent tax or assessment lien against any Mortgaged
Property;
(h) No Mortgagor has any right of offset, defense or counterclaim as to the
related Mortgage Note or Mortgage except as may be provided under the Servicemembers Civil
Relief Act, formerly known as the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, and except with respect to any buydown agreement for a Buydown Mortgage Loan;
(i) 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 the related Mortgage, except such liens that are insured or indemnified against by a
title insurance policy described under clause (aa) below;
(j) Each Mortgaged Property is free of damage and in good repair and no
notice of condemnation has been given with respect thereto and RFC knows of nothing
involving any Mortgaged Property that could reasonably be expected to materially adversely
affect the value or marketability of any Mortgaged Property;
(k) Each Mortgage Loan at the time it was made complied in all material
respects with applicable local, state, and federal laws, including, but not limited to, all
applicable anti-predatory lending laws;
(l) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder adequate to realize the benefits of the
security against the Mortgaged Property, including (i) in the case of a Mortgage that is a
deed of trust, by trustee's sale, (ii) by summary foreclosure, if available under applicable
law, and (iii) otherwise by foreclosure, and there is no homestead or other exemption
available to the Mortgagor that would interfere with such right to sell at a trustee's sale
or right to foreclosure, subject in each case to applicable federal and state laws and
judicial precedents with respect to bankruptcy and right of redemption;
(m) With respect to each Mortgage that is a deed of trust, a trustee duly
qualified under applicable law to serve as such is properly named, designated and serving,
and except in connection with a trustee's sale after default by a Mortgagor, no fees or
expenses are payable by the Seller or RFC to the trustee under any Mortgage that is a deed
of trust;
(n) The Mortgage Loans are hybrid adjustable-rate, fully-amortizing, first
lien mortgage loans having terms to maturity of not more than 30 years from the date of
origination or modification with monthly payments due, with respect to a majority of the
Mortgage Loans, on the first day of each month;
(o) No Mortgage Loan provides for deferred interest or negative
amortization;
(p) If any of the Mortgage Loans are secured by a leasehold interest, with
respect to each leasehold interest: the use of leasehold estates for residential properties
is an accepted practice in the area where the related Mortgaged Property is located;
residential property in such area consisting of leasehold estates is readily marketable; the
lease is recorded and no party is in any way in breach of any provision of such lease; the
leasehold is in full force and effect and is not subject to any prior lien or encumbrance by
which the leasehold could be terminated or subject to any charge or penalty; and the
remaining term of the lease does not terminate less than ten years after the maturity date
of such Mortgage Loan;
(q) Each Assigned Contract relating to each Pledged Asset Loan is a valid,
binding and legally enforceable obligation of the parties thereto, enforceable in accordance
with their terms, except as limited by bankruptcy, insolvency or other similar laws
affecting generally the enforcement of creditor's rights;
(r) The Assignor is the holder of all of the right, title and interest as
owner of each Pledged Asset Loan in and to each of the Assigned Contracts delivered and sold
to the Company hereunder, and the assignment hereof by RFC validly transfers such right,
title and interest to the Company free and clear of any pledge, lien, or security interest
or other encumbrance of any Person;
(s) The full amount of the Pledged Amount with respect to such Pledged
Asset Loan has been deposited with the custodian under the Credit Support Pledge Agreement
and is on deposit in the custodial account held thereunder as of the date hereof;
(t) RFC is a member of MERS, in good standing, and current in payment of
all fees and assessments imposed by MERS, and has complied with all rules and procedures of
MERS in connection with its assignment to the Trustee as assignee of the Depositor of the
Mortgage relating to each Mortgage Loan that is registered with MERS, including, among other
things, that RFC shall have confirmed the transfer to the Trustee, as assignee of the
Depositor, of the Mortgage on the MERS(R)System;
(u) 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;
(v) With respect to each Mortgage Loan, either (i) the Mortgage Loan is
assumable pursuant to the terms of the Mortgage Note, or (ii) the 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;
(w) 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;
(x) Except with respect to approximately 4.7%, 5.6% and 4.5% of the
aggregate principal balance of the Group I Loans, Groups II Loans and Mortgage Loans in the
aggregate, respectively, in which, in lieu of an appraisal, a valuation of the mortgaged
property was obtained using one of several automated valuation models, the appraisal was
made by an appraiser who meets the minimum qualifications for appraisers as specified in the
Program Guide;
(y) To the best of RFC's knowledge, 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;
(z) Each Mortgage Loan was originated (1) by a savings and loan
association, savings bank, commercial bank, credit union, insurance company or similar
institution that is supervised and examined by a federal or state authority, (2) by a
mortgagee approved by the Secretary of HUD pursuant to Sections 203 and 211 of the National
Housing Act, as amended, or (3) by a mortgage broker or correspondent lender in a manner
such that the Certificates would qualify as "mortgage related securities" within the meaning
of Section 3(a)(41) of the Securities Exchange Act of 1934, as amended;
(aa) All improvements which were considered in determining the Appraised
Value of the Mortgaged Properties lie wholly within the boundaries and the building
restriction lines of the Mortgaged Properties, 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;
(bb) Each Mortgage Note and Mortgage constitutes a legal, valid and binding
obligation of the borrower, or the consumer in the case of each Sharia Mortgage Loan,
enforceable in accordance with its terms except as limited by bankruptcy, insolvency or
other similar laws affecting generally the enforcement of creditor's rights;
(cc) None of the Mortgage Loans are subject to the Home Ownership and Equity
Protection Act of 1994;
(dd) None of the Mortgage Loans are loans that, under applicable state or
local law in effect at the time of origination of such 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;
(ee) None of the Mortgage Loans secured by a property located in the State
of Georgia was originated on or after October 1, 2002 and before March 7, 2003;
(ff) No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as
such terms are defined in the then current Standard & Poor's LEVELS(R)Glossary which is now
Version 6.0, Appendix E (attached hereto as Exhibit B));
(gg) No fraud or misrepresentation has taken place in connection with the
origination of any Mortgage Loan;
(hh) No mortgage loan has a prepayment penalty term that extends beyond five
years after the date of origination;
(ii) The information set forth in the prepayment charge schedule attached
hereto as Exhibit A (the "Prepayment Charge Schedule") is complete, true and correct in all
material respects as of the Cut off Date, and each prepayment charge set forth on the
Prepayment Charge Schedule ("Prepayment Charge") is enforceable and was originated in
compliance with all applicable federal, state and local laws; and
(jj) With respect to each Sharia Mortgage Loan, mortgage pass-through
certificates or notes representing interests in mortgage loans that are in all material
respects of the same type as the Mortgage Loans, and which are structured to be permissible
under Islamic law utilizing a declining balance co-ownership structure, have been, for a
least one year prior to the date hereof, (a) held by investors other than employee benefit
plans, and (b) rated at least BBB- or Baa3, as applicable, by a Rating Agency.
(kk) RFC hereby represents and warrants, after due inquiry, that no Mortgage
Loan has a loan-to-value ratio that exceeds 100% on the Closing Date.
RFC shall provide written notice to GMAC Mortgage, LLC of the sale of each Pledged
Asset Loan to the Company hereunder and by the Company to the Trustee under the Pooling and
Servicing Agreement, and shall maintain the Schedule of Additional Owner Mortgage Loans (as
defined in the Credit Support Pledge Agreement), showing the Trustee as the Additional Owner
of each such Pledged Asset Loan, all in accordance with Section 7.1 of the Credit Support
Pledge Agreement.
Upon discovery by RFC or upon notice from the Company or the Trustee of a breach of
the foregoing representations and warranties in respect of any Mortgage Loan which
materially and adversely affects the interests of any holders of the Certificates or of the
Company in such Mortgage Loan or upon the occurrence of a Repurchase Event (hereinafter
defined), 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,
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. 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 and warranty set forth in
clause (k) 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 each Mortgage Loan, a first lien repurchase event
("Repurchase Event") shall have occurred if it is discovered that, as of the date thereof,
the related Mortgage was not a valid first lien 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 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. In addition, with respect to any
Mortgage Loan as to which the Company delivers to the Trustee or the Custodian an affidavit
certifying that the original Mortgage Note has been lost or destroyed, if such Mortgage Loan
subsequently is in default and the enforcement thereof or of the related Mortgage is
materially adversely affected by the absence of the original Mortgage Note, a Repurchase
Event shall be deemed to have occurred and RFC will be obligated to repurchase or substitute
for such Mortgage Loan in the manner set forth in Section 4 above.
6. 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.
IN WITNESS WHEREOF, the parties have entered into this Assignment and
Assumption Agreement on the date first written above.
RESIDENTIAL FUNDING COMPANY, LLC
By:
Name:
Title: Associate
RESIDENTIAL ACCREDIT LOANS, INC.
By:
Name:
Title: Vice President
EXHIBIT A
PREPAYMENT CHARGE SCHEDULE
[On file with the Depositor]
EXHIBIT B
APPENDIX E OF THE STANDARD & POOR'S GLOSSARY FOR
FILE FORMAT FOR LEVELS(R)VERSION 6.0
APPENDIX E - 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.
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STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
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STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
APPLICABLE
ANTI-PREDATORY LENDING
LAW/EFFECTIVE DATE LAW
---------------------------- ---------------------------------------- --------------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code Xxx.ss.ss.00-00-000 et seq.
Effective July 16, 2003
---------------------------- ---------------------------------------- --------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code Covered Loan
ss.ss.757.01 et seq.
Effective June 2, 2003
---------------------------- ---------------------------------------- --------------------------
---------------------------- ---------------------------------------- --------------------------
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx.ss.ss.5-3.5-101 et seq.
Effective for covered loans offered or
entered into on or after January 1,
2003. Other provisions of the Act took
effect on June 7, 2002
---------------------------- ---------------------------------------- --------------------------
Connecticut Connecticut Abusive Home Loan Lending High Cost Home Loan
Practices Act, Conn. Gen. Xxxx.xx.xx.
36a-746 et seq.
Effective October 1, 2001
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District of Columbia Home Loan Protection Act, D.C. Xxxxxx.xx. Covered Loan
26-1151.01 et seq.
Effective for loans closed on or after
January 28, 2003
---------------------------- ---------------------------------------- --------------------------
Florida Fair Lending Act, Fla. Stat. Xxx.xx.xx. High Cost Home Loan
494.0078 et seq.
Effective October 2, 2002
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 0000 - Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
Mar. 6, 2003) Xxx.ss.ss.7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
Georgia as amended (Mar. Georgia Fair Lending Act, Ga. Code High Cost Home Loan
7, 2003 - current) Xxx.ss.ss.7-6A-1 et seq.
Effective for loans closed on or after
March 7, 2003
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HOEPA Section 32 Home Ownership and Equity Protection High Cost Loan
Act of 1994, 15 U.S.C.ss.1639, 12
C.F.R.ss.ss.226.32 and 226.34
Effective October 1, 1995, amendments
October 1, 2002
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Illinois High Risk Home Loan Act, Ill. Comp. High Risk Home Loan
Stat. tit. 815,ss.ss.137/5 et seq.
Effective January 1, 2004 (prior to
this date, regulations under
Residential Mortgage License Act
effective from May 14, 2001)
---------------------------- ---------------------------------------- --------------------------
Indiana Indiana Home Loan Practices Act, Ind. High Cost Home Loans
Code Xxx.ss.ss.24-9-1-1 et seq.
Effective January 1, 2005; amended by
2005 HB 1179, effective July 1, 2005.
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Kansas Consumer Credit Code, Kan. Stat. Xxx. High Loan to Value
ss.ss.16a-1-101 et seq. Consumer Loan (xx.xx.
Sections 16a-1-301 and 16a-3-207 16a-3-207) and;
became effective April 14, 1999;
Section 16a-3-308a became effective
July 1, 1999
---------------------------- ---------------------------------------- --------------------------
High APR Consumer Loan
(id.ss.16a-3-308a)
---------------------------- ---------------------------------------- --------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home Loan High Cost Home Loan
Act, Ky. Rev. Stat.ss.ss.360.100 et seq.
Effective June 24, 2003
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Maine Truth in Lending, Me. Rev. Stat. tit. High Rate High Fee
9-A,ss.ss.8-101 et seq. Mortgage
Effective September 29, 1995 and as
amended from time to time
---------------------------- ---------------------------------------- --------------------------
Massachusetts Part 40 and Part 32, 209 X.X.X.xx.xx. High Cost Home Loan
32.00 et seq. and 209 C.M.R.ss.ss.40.01
et seq.
Effective March 22, 2001 and amended
from time to time
---------------------------- ---------------------------------------- --------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. Home Loan
ss.ss.598D.010 et seq.
Effective October 1, 2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act High Cost Home Loan
of 2002, N.J. Rev. Stat.ss.ss.46:10B-22
et seq.
Effective for loans closed on or after
November 27, 2003
---------------------------- ---------------------------------------- --------------------------
New Mexico Home Loan Protection Act, N.M. Rev. High Cost Home Loan
Stat.ss.ss.58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on or
after April 1, 2003
---------------------------- ---------------------------------------- --------------------------
North Carolina Restrictions and Limitations on High High Cost Home Loan
Cost Home Loans, N.C. Gen. Xxxx.xx.xx.
24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end lines
of credit)
---------------------------- ---------------------------------------- --------------------------
Ohio H.B. 386 (codified in various sections Covered Loan
of the Ohio Code), Ohio Rev. Code Xxx.
ss.ss.1349.25 et seq.
Effective May 24, 2002
---------------------------- ---------------------------------------- --------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10 Mortgage
various sections of Title 14A)
Effective July 1, 2000; amended
effective January 1, 2004
---------------------------- ---------------------------------------- --------------------------
Rhode Island Rhode Island Home Loan Protection Act, High Cost Home Loan
R.I. Gen. Lawsss.ss.34-25.2-1 et seq.
Effective December 31, 2006.
---------------------------- ---------------------------------------- --------------------------
South Carolina South Carolina High Cost and Consumer High Cost Home Loan
Home Loans Act, S.C. Code Xxx.xx.xx.
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
---------------------------- ---------------------------------------- --------------------------
Tennessee Tennessee Home Loan Protection Act, High Cost Home Loan
Tenn. Code Xxx.ss.ss.00-00-000 et seq.
Effective January 1, 2007.
---------------------------- ---------------------------------------- --------------------------
West Virginia West Virginia Residential Mortgage West Virginia Mortgage
Lender, Broker and Servicer Act, W. Loan Act Loan
Va. Code Xxx.ss.ss.31-17-1 et seq.
Effective June 5, 2002
---------------------------- ---------------------------------------- --------------------------
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
APPLICABLE
ANTI-PREDATORY LENDING
LAW/EFFECTIVE DATE LAW
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Covered Loan
Mar. 6, 2003) Xxx.ss.ss.7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act Covered Home Loan
of 2002, N.J. Rev. Stat.ss.ss.46:10B-22
et seq.
Effective November 27, 2003 - July 5,
2004
---------------------------- ---------------------------------------- --------------------------
STANDARD & POOR'S HOME LOAN CATEGORIZATION
------------------------------------------------------------------------------------------------
STATE/JURISDICTION NAME OF ANTI-PREDATORY LENDING CATEGORY UNDER
APPLICABLE
ANTI-PREDATORY LENDING
LAW/EFFECTIVE DATE LAW
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Home Loan
Mar. 6, 2003) Xxx.ss.ss.7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act Home Loan
of 2002, N.J. Rev. Stat.ss.ss.46:10B-22
et seq.
Effective for loans closed on or after
November 27, 2003
---------------------------- ---------------------------------------- --------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Home Loan
Stat.ss.ss.58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------
North Carolina Restrictions and Limitations on High Consumer Home Loan
Cost Home Loans, N.C. Gen. Xxxx.xx.xx.
24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end lines
of credit)
---------------------------- ---------------------------------------- --------------------------
South Carolina South Carolina High Cost and Consumer Consumer Home Loan
Home Loans Act, S.C. Code Xxx.xx.xx.
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
---------------------------- ---------------------------------------- --------------------------
