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RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
as Purchaser,
and
RESIDENTIAL FUNDING CORPORATION
as Seller
________________
HOME LOAN PURCHASE AGREEMENT
Dated as of September 1, 2004
________________
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions................................................................1
ARTICLE II
SALE OF HOME LOANS AND RELATED PROVISIONS
Section 2.1. Sale of Home Loans.........................................................2
Section 2.2. Payment of Purchase Price..................................................4
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties......................................4
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller...................................................12
ARTICLE V
SERVICING
Section 5.1. Servicing.................................................................13
ARTICLE VI
LIMITATION ON LIABILITY OF THE SELLER
Section 6.1. Limitation on Liability of the Seller.....................................13
ARTICLE VII
TERMINATION
Section 7.1. Termination...............................................................13
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1. Amendment.................................................................13
Section 8.2. GOVERNING LAW.............................................................13
Section 8.3. Notices...................................................................14
Section 8.4. Severability of Provisions................................................14
Section 8.5. Relationship of Parties...................................................14
Section 8.6. Counterparts..............................................................15
Section 8.7. Further Agreements........................................................15
Section 8.8. Intention of the Parties..................................................15
Section 8.9. Successors and Assigns; Assignment of This Agreement......................15
Section 8.10. Survival..................................................................16
Exhibit A Home Loan Schedule
Exhibit B Standard & Poor's Glossary For File Format For LEVELS(R) Version 5.6 Revised
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This HOME LOAN PURCHASE AGREEMENT (this "Agreement" or "Home Loan
Purchase Agreement"), dated as of September 1, 2004, is made between Residential
Funding Corporation (the "Seller") and Residential Funding Mortgage Securities
II, Inc. (the "Purchaser").
W I T N E S S E T H :
WHEREAS, the Seller owns Home Loans and the Related Documents for
the Home Loans indicated on the Home Loan Schedule attached as Exhibit A hereto
(collectively, the "Home Loans"), including rights to (a) any property acquired
by foreclosure or deed in lieu of foreclosure or otherwise, and (b) the proceeds
of any insurance policies covering the Home Loans;
WHEREAS, the parties hereto desire that the Seller sell the Home
Loans to the Purchaser pursuant to the terms of this Agreement together with the
Related Documents on the Closing Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the
Purchaser will sell the Home Loans to the Issuer in exchange for the cash
proceeds of the Securities;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer
will issue and transfer to or at the direction of the Depositor, the
Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will
issue and transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of the Servicing Agreement, the
Master Servicer will service the Home Loans directly or through one or more
Subservicers.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. For all purposes of this Home Loan Purchase Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions contained in Appendix A to the
Indenture dated September 29, 2004 (the "Indenture"), between Home Loan Trust
2004-HI3, as issuer, and JPMorgan Chase Bank, as indenture trustee, which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
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ARTICLE II
SALE OF HOME LOANS AND RELATED PROVISIONS
Section 2.1. Sale of Home Loans.
(a) The Seller, by the execution and delivery of this Agreement, does hereby
sell, assign, set over, and otherwise convey to the Purchaser, without
recourse, all of its right, title and interest in, to and under the
following, and wherever located: (i) the Home Loans, all interest
accruing thereon and all collections in respect thereof received on or
after the Cut-off Date; (ii) property which secured a Home Loan and
which has been acquired by foreclosure or deed in lieu of foreclosure;
(iii) the interest of the Seller in any insurance policies in respect of
the Home Loans; and (iv) all proceeds of the foregoing. Such conveyance
shall be deemed to be made, with respect to the Cut-off Date Loan
Balances, as of the Closing Date, subject to the receipt by the Seller
of consideration therefor as provided herein under clause (b) of Section
2.2.
(b) In connection with such conveyance, the Seller further agrees, at its
own expense, on or prior to the Closing Date to indicate in its books
and records that the Home Loans have been sold to the Purchaser pursuant
to this Agreement and to deliver to the Purchaser true and complete
lists of all of the Home Loans specifying for each Home Loan (i) its
account number and (ii) its Cut-off Date Loan Balance. Such lists, which
form part of the Home Loan Schedule, shall be marked as Exhibit A to
this Agreement and are hereby incorporated into and made a part of this
Agreement.
(c) In connection with such conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Custodian, on
or before the Closing Date, the following documents or instruments with
respect to each Home Loan:
(i) the original Mortgage Note endorsed without recourse to the Indenture
Trustee and showing an unbroken chain of endorsement from the originator
thereof to the Person endorsing it or, with respect to any Home Loan as
to which the original Mortgage Note has been permanently lost or
destroyed and has not been replaced, a Lost Note Affidavit from the
related seller or Residential Funding Corporation stating the original
Mortgage Note was lost, misplaced or destroyed together with a copy of
such Note;
(ii) the original Mortgage with evidence of recording thereon, or a copy of
the original Mortgage with evidence of recording thereon;
(iii) assignments (which may be included in one or more blanket assignments if
permitted by applicable law) of the Mortgage recorded to "JPMorgan Chase
Bank as indenture trustee" c/o the Seller at an address specified by the
Seller;
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(iv) originals of any intervening assignments of the Mortgage, with evidence
of recording thereon, or a copy of such original intervening assignment
with evidence of recording indicated thereon; and
(v) a true and correct copy of each assumption, modification, consolidation
or substitution agreement, if any, relating to the Home Loan.
Within the time period for the review of each Mortgage File set
forth in Section 2.3 of the Custodial Agreement, if a defect or omission in any
Mortgage File is discovered which may materially and adversely affect the value
of the related Home Loan, or the interests of the Indenture Trustee (as pledgee
of the Home Loans), the Noteholders, the Certificateholders or the Credit
Enhancer in such Home Loan, including the Seller's failure to deliver any
document required to be delivered to the Custodian on behalf of the Indenture
Trustee (provided that a Mortgage File will not be deemed to contain a defect
for an unrecorded assignment under clause (iii) above if the Seller has
submitted such assignment for recording or if such assignment is not required to
be recorded pursuant to the terms of the following paragraph), the Seller shall
cure such defect, repurchase the related Home Loan at the Repurchase Price or
substitute an Eligible Substitute Loan for the related Home Loan upon the same
terms and conditions set forth in Section 3.1 hereof for breaches of
representations and warranties as to the Home Loans. As set forth in Section
2.03 of the Custodial Agreement, the Custodian shall deliver to the Indenture
Trustee a certificate (the "Interim Certification") to the effect that all
documents required to be delivered pursuant to this Subsection 2.1(c) have been
executed and received and that such documents relate to the Home Loans
identified on the Home Loan Schedule, except for any exceptions listed on
Schedule B attached to such Interim Certification.
Within 60 days after the receipt by the Master Servicer of the
recording information, the Seller at its own expense shall complete and submit
for recording in the appropriate public office for real property records each of
the assignments referred to in clause (iii) above. While such assignment to be
recorded is being recorded, the Custodian shall retain a photocopy of such
assignment. If any assignment is lost or returned unrecorded to the Custodian
because of any defect therein, the Seller is required to prepare a substitute
assignment or cure such defect, as the case may be, and the Seller shall cause
such assignment to be recorded in accordance with this paragraph.
In the event that the Seller delivers to the Custodian on behalf
of the Indenture Trustee any Mortgage Note or assignment in blank, the Seller
shall, or shall cause the Custodian to, complete the endorsement of the Mortgage
Note and the assignment in conjunction with the Interim Certification issued by
the Custodian.
In instances where an original Mortgage or any original
intervening assignment of Mortgage was not, in accordance with clause (ii),
(iii), (iv) or (v) above (or copies thereof as permitted in this section 2.1(c)
above), delivered by the Seller to the respective Custodian prior to or
concurrently with the execution and delivery of this Agreement, the Seller will
deliver or cause to be delivered the originals of such documents to such
Custodian promptly upon receipt thereof.
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The Purchaser hereby acknowledges its acceptance of all right,
title and interest to the property, conveyed to it pursuant to this Section 2.1.
(d) The parties hereto intend that the transactions set forth herein constitute
a sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Home Loans and other property as and to the extent
described above. In the event the transactions set forth herein are deemed not
to be a sale, the Seller hereby grants to the Purchaser a security interest in
all of the Seller's right, title and interest in, to and under the Home Loans
and such other property, to secure all of the Seller's obligations hereunder,
and this Agreement shall constitute a security agreement under applicable law.
The Seller agrees to take or cause to be taken such actions and to execute such
documents, including without limitation the filing of all necessary UCC-1
financing statements filed in the State of Minnesota (which shall have been
submitted for filing as of the Closing Date), any continuation statements with
respect thereto and any amendments thereto required to reflect a change in the
name or corporate structure of the Seller or the filing of any additional UCC-1
financing statements due to the change in the principal office or jurisdiction
of incorporation of the Seller, as are necessary to perfect and protect the
Purchaser's interests in each Home Loan and the proceeds thereof.
Section 2.2. Payment of Purchase Price.
(a) The "Purchase Price" for the Home Loans shall be an amount equal to
$219,862,495.32 in immediately available funds, together with the Certificates.
(b) In consideration of the sale of the Home Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser shall pay to the Seller on the
Closing Date by wire transfer of immediately available funds to a bank account
designated by the Seller, the amount specified above in clause (a); provided,
that such payment may be on a net funding basis if agreed by the Seller and the
Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties. The Seller
represents and warrants to the Purchaser, as of the Closing Date (or if
otherwise specified below, as of the date so specified):
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(a) As to the Seller:
(i) The Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate
power to own its assets and to transact the business in which it is
currently engaged. The Seller is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties owned
or leased by it requires such qualification and in which the failure to
so qualify would have a material adverse effect on the business,
properties, assets or condition (financial or other) of the Seller;
(ii) The Seller has the power and authority to make, execute, deliver and
perform its obligations under this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary corporate
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of the Seller enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) The Seller is not required to obtain the consent of any other Person or
any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, licenses,
approvals or authorizations, or registrations or declarations, as shall
have been obtained or filed, as the case may be;
(iv) The execution and delivery of this Agreement and the performance of the
transactions contemplated hereby by the Seller will not violate any
provision of any existing law or regulation or any order or decree of
any court applicable to the Seller or any provision of the Certificate
of Incorporation or Bylaws of the Seller, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which
the Seller is a party or by which the Seller may be bound;
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge
of the Seller threatened, against the Seller or any of its properties or
with respect to this Agreement or the Certificates which in the opinion
of the Seller has a reasonable likelihood of resulting in a material
adverse effect on the transactions contemplated by this Agreement;
(vi) This Agreement constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
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insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(vii) This Agreement constitutes a valid transfer and assignment to the
Purchaser of all right, title and interest of the Seller in, to and
under the Home Loans, all monies due or to become due with respect
thereto, and all proceeds of such Cut-off Date Loan Balances with
respect to the Home Loans and such funds as are from time to time
deposited in the Custodial Account (excluding any investment earnings
thereon) as assets of the Trust and all other property specified in the
definition of "Trust" as being part of the corpus of the Trust conveyed
to the Purchaser by the Seller;
(viii) The Seller is not in default with respect to any order or decree of any
court or any order, regulation or demand or any federal, state,
municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or might have
consequences that would materially adversely affect its performance
hereunder; and
(ix) The Seller has not transferred the Home Loans to the Purchaser with any
intent to hinder, delay or defraud any of its creditors.
(b) As to the Home Loans:
(i) The information set forth in the Home Loan Schedule with respect to each
Home Loan is true and correct in all material respects as of the date or
dates respecting which such information is furnished;
(ii) [Reserved];
(iii) The related Mortgage Note and the Mortgage have not been assigned or
pledged, the Seller has good and marketable title thereto and the Seller
is the sole owner and holder of the Home Loan free and clear of any and
all liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature and has full right
and authority, under all governmental and regulatory bodies having
jurisdiction over the ownership of the applicable Home Loans to sell and
assign the same pursuant to this Agreement;
(iv) To the best of Seller's knowledge, there is no valid offset, defense or
counterclaim of any obligor under any Mortgage;
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(v) To the best of Seller's knowledge, there is no delinquent recording or
other tax or fee or assessment lien against any related Mortgaged
Property;
(vi) To the best of Seller's knowledge, there is no proceeding pending or
threatened for the total or partial condemnation of the related
Mortgaged Property;
(vii) To the best of Seller's knowledge, there are no mechanics' or similar
liens or claims which have been filed for work, labor or material
affecting the related Mortgaged Property which are, or may be liens
prior or equal to, or subordinate with, the lien of the related
Mortgage, except liens which are fully insured against by the title
insurance policy referred to in clause (xi);
(viii) As of the Cut-off Date, none of the Home Loans were 30 or more days
delinquent;
(ix) For each Home Loan, the related Mortgage File contains each of the
documents and instruments specified to be included therein;
(x) Each Home 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 and usury laws;
(xi) A policy of title insurance in the form and amount required by the
Program Guide was effective as of the closing of each Home Loan and each
such policy is valid and remains in full force and effect, and a title
search or other assurance of title customary in the relevant
jurisdiction was obtained with respect to each Home Loan as to which no
title insurance policy or binder was issued;
(xii) None of the Mortgaged Properties is a mobile home that is permanently
attached to its foundation and none of the Mortgaged Properties are
manufactured housing units that are not permanently attached to their
foundation;
(xiii) Approximately 7.9% of the Cut-off Date Loan Balance of the Home Loans
are secured by Mortgaged Properties located in Ohio.
(xiv) Approximately 94.9% of the Home Loans by Cut-Off Date Loan Balance, had
a Combined Loan-to-Value Ratio in excess of 100%;
(xv) None of the mortgage loans in the mortgage pool are loans that, under
applicable state or local law in effect at the time of origination of
the 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;
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(xvi) None of the proceeds of any Home Loan were used to finance the purchase
of single premium credit insurance policies;
(xvii) The Seller will submit for filing or cause to be submitted for filing
UCC-1 financing statements in accordance with the terms of this
Agreement;
(xviii) Each Mortgage is substantially similar to one another and constitutes a
legal, valid and binding obligation of the related Mortgagor enforceable
in accordance with its terms except as may be limited by bankruptcy,
insolvency or similar laws affecting generally the enforcement of
creditor's rights;
(xix) To the best of Seller's knowledge, the physical property subject to each
Mortgage is free of material damage and is in good repair;
(xx) The Seller has not received a notice of default of any senior mortgage
loan related to a Mortgaged Property which has not been cured by a party
other than the related Subservicer;
(xxi) No Home Loan has a prepayment penalty term that extends beyond five
years after the date of origination;
(xxii) None of the Home Loans are reverse Home Loans;
(xxiii) None of the Home Loans have a remaining term to stated maturity of less
than 54 months. As of the Cut-off Date, the Loan Rates on the Home Loans
range between 6.490% per annum and 17.990% per annum and the weighted
average Loan Rate is approximately 11.8910% per annum. The weighted
average remaining term to stated maturity of the Home Loans as of the
Cut-off Date is approximately 215 months;
(xxiv) (A) Each Mortgaged Property with respect to the Home Loans consists of a
single parcel of real property with a single family residence erected
thereon, manufactured housing permanently attached to its foundation or
an individual condominium unit. (B) With respect to the Home Loans (i)
approximately 2.01% (by Cut-off Date Loan Balance) are secured by real
property improved by individual condominium units and (ii) approximately
90.97% (by Cut-off Date Loan Balance) of the Home Loans are secured by
real property with a single family residence erected thereon;
(xxv) Approximately 99.96% of the Home Loans are secured by second mortgages
or deeds of trust;
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(xxvi) If any of the Home 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; and the remaining term of the lease does not terminate less
than five years after the maturity date of such Home Loan;
(xxvii) Each Subservicer meets all applicable requirements under the Servicing
Agreement, is properly qualified to service the Home Loans and has been
servicing the Home Loans prior to the Cut-off Date in accordance with
the terms of the Program Guide;
(xxviii)For each Home Loan, if required, as of the Cut-off Date, flood
insurance has been obtained which meets all applicable requirements of
Section 3.04 of the Servicing Agreement. For each Home Loan, hazard
insurance has been obtained which meets all applicable requirements of
Section 3.04 of the Servicing Agreement;
(xxix) There is no material default, breach, violation or event of acceleration
existing under the terms of any Mortgage Note or Mortgage and no event
which, with notice and expiration of any grace or cure period, would
constitute a material default, breach, violation or event of
acceleration under the terms of any Mortgage Note or Mortgage, and no
such material default, breach, violation or event of acceleration has
been waived by the Seller or by any other entity involved in originating
or servicing a Home Loan;
(xxx) No instrument of release or waiver has been executed in connection with
the Home Loans, and no Mortgagor has been released, in whole or in part
from its obligations in connection with a Home Loan;
(xxxi) With respect to each Home Loan that is a second lien, either (i) no
consent for the Home Loan was required by the holder of the related
prior lien or liens or (ii) such consent has been obtained and is
contained in the Mortgage File;
(xxxii) With respect to each Home Loan, either (i) the Home Loan is assumable
pursuant to the terms of the Mortgage Note, or (ii) the Home Loan
contains a customary provision for the acceleration of the payment of
the unpaid principal balance of the Home Loan in the event the related
Mortgaged Property is sold without the prior consent of the mortgagee
thereunder;
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(xxxiii)Each Mortgage File either contains (a) an original Mortgage Note or (b)
with respect to any Home Loan as to which the original Mortgage Note has
been permanently lost or destroyed and has not been replaced, a Lost
Note Affidavit together with a copy of such Mortgage Note;
(xxxiv) No Home Loan was originated on or after October 1, 2002 and before March
7, 2003, which is secured by property located in the State of Georgia;
(xxxv) No Home Loan except as provided in clause (xxxviii) is a High Cost Loan
or Covered Loan, as applicable (as such terms are defined in Appendix E
of the Standard & Poor's Glossary For File Format For LEVELS(R) Version
5.6 Revised (attached hereto as Exhibit B)); provided that no
representation and warranty is made in this clause (xxxvii) with respect
to any Home Loan secured by property located in the States of Kansas or
West Virginia; and
(xxxvi) As of the Cut-Off Date, 22 of the Home Loans, representing approximately
0.3% of the Home Loans, were subject to the Home Ownership and
Protection Act of 1994, referred to as the Homeownership Act.
Upon discovery by Seller or upon notice from the Purchaser, the
Credit Enhancer, the Issuer, the Owner Trustee, the Indenture Trustee or any
Custodian, as applicable, of a breach of any representation or warranty in
clause (a) above which materially and adversely affects the interests of the
Securityholders or the Credit Enhancer in any Home Loan, the Seller shall,
within 45 days of its discovery or its receipt of notice of such breach, either
(i) cure such breach in all material respects or (ii) to the extent that such
breach is with respect to a Home Loan or a Related Document, either (A)
repurchase such Home Loan from the Trust at the Repurchase Price, or (B)
substitute one or more Eligible Substitute Loans for such Home Loan, in each
case in the manner and subject to the conditions and limitations set forth
below.
(c) Upon discovery by the Seller or upon notice from the Purchaser, the Credit
Enhancer, the Issuer, the Owner Trustee, the Indenture Trustee or any Custodian,
as applicable, of a breach of any representation or warranty in clause (b) above
with respect to any Home Loan or upon the occurrence of a Repurchase Event that
materially and adversely affects the interests of the Securityholders or the
Credit Enhancer or of the Purchaser in such Home Loan (notice of which shall be
given to the Purchaser by the Seller, if it discovers the same), notwithstanding
the Seller's lack of knowledge with respect to the substance of such
representation and warranty or Repurchase Event, the Seller 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)
repurchase such Home Loan from the Trust at the Repurchase Price, or (ii)
substitute one or more Eligible Substitute Loans for such Home Loan, in each
case in the manner and subject to the conditions set forth below. If the breach
of representation and warranty that gave rise to the obligation to repurchase or
substitute a Home Loan pursuant to this Section 3.1 was the representation and
warranty set forth in clause (x) of Section 3.1(b), then the Seller shall pay,
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
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incurred and paid out of or on behalf of the Trust, and that directly resulted
from such breach, or if incurred and paid by the Trust thereafter, concurrently
with such payment. The Repurchase Price for any such Home Loan repurchased by
the Seller and any amounts paid by the Seller in connection with the preceding
sentence shall be deposited or caused to be deposited by the Master Servicer in
the Custodial Account maintained by it pursuant to Section 3.02 of the Servicing
Agreement.
The Seller may only substitute an Eligible Substitute Loan or
Loans for a Deleted Loan pursuant to this Section 3.1(c) if the Seller obtains
an Opinion of Counsel generally to the effect that the substitution of an
Eligible Substitute Loan or Loans for a Deleted Loan will not cause an entity
level federal or state income tax to be imposed on the Trust. The Seller shall
also deliver to the Custodian on behalf of the Trust, with respect to such
Eligible Substitute Loan or Loans, the original Mortgage Note and all other
documents and agreements as are required by Section 2.1(c), with the Mortgage
Note endorsed as required by Section 2.1(c). No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Eligible Substitute Loans in the month of substitution shall not
be part of the Trust and will be retained by the Master Servicer and remitted by
the Master Servicer to the Seller on the next succeeding Payment Date, provided
that a payment at least equal to the applicable Monthly Payment has been
received by the Trust, for such month in respect of the Deleted Loan. For the
month of substitution, distributions to the Custodial Account pursuant to the
Servicing Agreement will include the Monthly Payment due on a Deleted Loan for
such month and thereafter the Seller shall be entitled to retain all amounts
received in respect of such Deleted Loan. The Master Servicer shall amend or
cause to be amended the Home Loan Schedule to reflect the removal of such
Deleted Loan and the substitution of the Eligible Substitute Loan or Loans and
the Master Servicer shall deliver the amended Home Loan Schedule to the
Indenture Trustee. Upon such substitution, the Eligible Substitute Loan or Loans
shall be subject to the terms of this Agreement and the Servicing Agreement in
all respects, the Seller shall be deemed to have made the representations and
warranties (other than any statistical representation or warranty) with respect
to the Eligible Substitute Loan set forth in Section 3.1(b) as of the date of
substitution, and the Seller shall be obligated to repurchase or substitute for
any Eligible Substitute Loan as to which a Repurchase Event has occurred as
provided herein. In connection with the substitution of one or more Eligible
Substitute Loans for one or more Deleted Loans, the Master Servicer will
determine the amount (such amount, a "Substitution Adjustment Amount"), if any,
by which the aggregate principal balance of all such Eligible Substitute Loans
as of the date of substitution is less than the aggregate principal balance of
all such Deleted Loans (after application of the principal portion of the
Monthly Payments due in the month of substitution that are to be distributed to
the Custodial Account in the month of substitution). The Seller shall deposit
the amount of such shortfall into the Custodial Account on the day of
substitution, without any reimbursement therefor.
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Upon receipt by the Indenture Trustee on behalf of the Trust and
the Custodian of written notification, signed by a Servicing Officer, of the
deposit of such Repurchase Price or of such substitution of an Eligible
Substitute Loan (together with the complete related Mortgage File) and deposit
of any applicable Substitution Adjustment Amount as provided above, the
Custodian, on behalf of the Indenture Trustee shall release to the Seller the
related Mortgage File for the Home Loan being repurchased or substituted for and
the Indenture Trustee on behalf of the Trust shall execute and deliver such
instruments of transfer or assignment prepared by the Master Servicer, in each
case without recourse, as shall be necessary to vest in the Seller or its
designee such Home Loan released pursuant hereto and thereafter such Home Loan
shall not be an asset of the Trust.
It is understood and agreed that the obligation of the Seller to
cure any breach, or to repurchase or substitute for, any Home Loan as to which
such a breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Purchaser, the Issuer, the
Certificateholders (or the Owner Trustee on behalf of the Certificateholders)
and the Noteholders (or the Indenture Trustee on behalf of the Noteholders)
against the Seller.
It is understood and agreed that the representations and
warranties set forth in this Section 3.1 shall survive delivery of the
respective Mortgage Files to the Indenture Trustee, or the Custodian.
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller. The Seller hereby covenants that, except
for the transfer hereunder, the Seller will not sell, pledge, assign or transfer
to any other Person, or grant, create, incur or assume any Lien on any Home
Loan, or any interest therein. The Seller will notify the Indenture Trustee in
writing, as assignee of the Purchaser, of the existence of any Lien (other than
as provided above) on any Home Loan immediately upon discovery thereof; and the
Seller will defend the right, title and interest of the Issuer, as assignee of
the Purchaser, in, to and under the Home Loans against all claims of third
parties claiming through or under the Seller; provided, however, that nothing in
this Section 4.1 shall be deemed to apply to any Liens for municipal or other
local taxes and other governmental charges if such taxes or governmental charges
shall not at the time be due and payable or if the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings.
12
ARTICLE V
SERVICING
Section 5.1. Servicing. The Seller will service the Home Loans pursuant to the
terms and conditions of the Servicing Agreement and will service the Home Loans
directly or through one or more subservicers in accordance therewith.
ARTICLE VI
LIMITATION ON LIABILITY OF THE SELLER
Section 6.1. Limitation on Liability of the Seller. None of the directors,
officers, employees or agents of the Seller shall be under any liability to the
Purchaser, it being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for, the execution
of this Agreement. Except as and to the extent expressly provided herein or in
the Servicing Agreement, the Seller shall not be under any liability to the
Trust, the Owner Trustee, the Indenture Trustee or the Securityholders. The
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
ARTICLE VII
TERMINATION
Section 7.1. Termination. The respective obligations and responsibilities of the
Seller and the Purchaser created hereby shall terminate, except for the Seller's
indemnity obligations as provided herein, upon the termination of the Owner
Trust pursuant to the terms of the Trust Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1. Amendment. This Agreement may be amended from time to time by the
Seller and the Purchaser by written agreement signed by the Seller and the
Purchaser, with the consent of the Credit Enhancer (which consent shall not be
unreasonably withheld).
Section 8.2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
13
Section 8.3. Notices. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
at or mailed by registered mail, postage prepaid, addressed as follows:
(i) if to the Seller:
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Managing Director, Structured Finance
or, such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
(ii) if to the Purchaser:
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Managing Director, Structured Finance
(iii) if to the Custodian: Xxxxx Fargo Bank, N.A. 1015 00
Xxxxxx X.X. Xxxxxxxxxxx, Xxxxxxxxx 00000 Attention: MDC --
Account Manager
or such other address as may hereafter be furnished to the Seller in writing by
the
Purchaser.
Section 8.4. Severability of Provisions. If any one or more of the covenants,
agreements, provisions of terms of this Agreement shall be held invalid for any
reason whatsoever, then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity of enforceability of
the other provisions of this Agreement.
Section 8.5. Relationship of Parties. Nothing herein contained shall be deemed
or construed to create a partnership or joint venture between the parties
hereto, and the services of the Seller shall be rendered as an independent
contractor and not as agent for the Purchaser.
14
Section 8.6. Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 8.7. Further Agreements. The Purchaser and the Seller each agree to
execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Section 8.8. Intention of the Parties. It is the intention of the parties that
the Purchaser is purchasing, and the Seller is selling, the Home Loans, rather
than a loan by the Purchaser to the Seller secured by the Home Loans.
Accordingly, the parties hereto each intend to treat the transaction for federal
income tax purposes as a sale by the Seller, and a purchase by the Purchaser, of
the Home Loans. The Purchaser will have the right to review the Home Loans and
the Related Documents to determine the characteristics of the Home Loans which
will affect the federal income tax consequences of owning the Home Loans and the
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.
Section 8.9. Successors and Assigns; Assignment of This Agreement. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, Purchaser and their respective successors and assigns. The obligations
of the Seller under this Agreement cannot be assigned or delegated to a third
party without the consent of the Credit Enhancer and the Purchaser, which
consent shall be at the Credit Enhancer's and the Purchaser's sole discretion,
except that the Purchaser and the Credit Enhancer acknowledge and agree that the
Seller may assign its obligations hereunder to any Affiliate of the Seller, to
any Person succeeding to the business of the Seller, to any Person into which
the Seller is merged and to any Person resulting from any merger, conversion or
consolidation to which the Seller is a party. The parties hereto acknowledge
that the Purchaser is acquiring the Home Loans for the purpose of contributing
them to the Issuer. Pursuant to the terms of the Trust Agreement, the Issuer
will issue and transfer to or at the direction of the Purchaser, the
Certificates and pursuant to the terms of the Indenture, the Issuer will issue
and transfer to or at the direction of the Purchaser, the Notes secured by the
Home Loans. As an inducement to the Purchaser to purchase the Home Loans, the
Seller acknowledges and consents to (i) the assignment by the Purchaser to the
Issuer of all of the Purchaser's rights against the Seller pursuant to this
Agreement insofar as such rights relate to Home Loans transferred to the Issuer
and to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Issuer, (ii) the enforcement or exercise of
any right or remedy against the Seller pursuant to this Agreement by or on
behalf of the Issuer and (iii) the Issuer's pledge of its interest in this
Agreement to the Indenture Trustee and the enforcement by the Indenture Trustee
of any such right or remedy against the Seller following an Event of Default
under the Indenture. Such enforcement of a right or remedy by the Issuer or the
Indenture Trustee, as applicable, shall have the same force and effect as if the
right or remedy had been enforced or exercised by the Purchaser directly.
15
Section 8.10. Survival. The representations and warranties made herein by the
Seller and the provisions of Article VI hereof shall survive the purchase of the
Home Loans hereunder.
16
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed to this Home Loan Purchase Agreement by their
respective officers thereunto duly authorized as of the day and year first above
written.
RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
as Purchaser
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Vice President
RESIDENTIAL FUNDING CORPORATION
as Seller
By: /s/ Xxxxx Xxx
Name: Xxxxx Xxx
Title: Director
17
Exhibit A
HOME LOAN SCHEDULE
(Provided Upon Request)
EXHIBIT B
Appendix E of the Standard & Poor's Glossary For File Format
For LEVELS(R) Version 5.6 Revised
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
STANDARD & POOR'S
HIGH COST LOAN CATEGORIZATION
MaineHigh Rate High Fee Mortgage
State/Jurisdiction Name of Anti-Predatory Category under
Lending Law/Effective Date Applicable
Anti-Predatory
Lending Law
-----------------------------------------------------------------------------------------------
Arkansas Arkansas Home Loan Protection High Cost Home Loan
Act, Ark. Code Xxx. xx.xx.
00-00-000 et seq.
Effective July 16, 2003
-----------------------------------------------------------------------------------------------
Cleveland Heights, OH OH Ordinance No. 72-2003 Covered Loan
(PSH), Mun. Code xx.xx. 757.01 et
seq. Effective June 2, 2003
-----------------------------------------------------------------------------------------------
Colorado Consumer Equity Protection, Covered Loan
Colo. Stat. Xxx. xx.xx. 5-3.5-101 et
seq. Effective for covered loans
offered or entered into on or after
January 1, 2003. Other provisions of
the Act took effect on June 7, 2002
-----------------------------------------------------------------------------------------------
Connecticut Connecticut Abusive Home Loan High Cost Home Loan
Lending Practices Act, Conn.
Gen. Stat. xx.xx. 36a-746 et seq.
Effective October 1, 2001
-----------------------------------------------------------------------------------------------
District of Columbia Home Loan Protection Act, Covered Loan
D.C. Code xx.xx. 26-1151.01 et
seq.
Effective for loans closed on
or after January 28, 2003
-----------------------------------------------------------------------------------------------
Florida Fair Lending Act, Fla. Stat. High Cost Home Loan
Xxx. xx.xx. 494.0078 et seq.
Effective October 2, 2002
-----------------------------------------------------------------------------------------------
Georgia (Oct 1, 2002 - Mar 6, 2003) Georgia Fair Lending Act, Ga. High Cost Home Loan
Code Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 -
March 6, 2003
-----------------------------------------------------------------------------------------------
Georgia as amended (Xxx 0, 0000 - Xxxxxxx Fair Lending Act, Ga. High Cost Home Loan
current) Code Xxx. xx.xx. 7-6A-1 et seq.
Effective for loans closed on
or after March 7, 2003
-----------------------------------------------------------------------------------------------
HOEPA Section 32 Home Ownership and Equity High Cost Loan
Protection Act of 1994, 15
U.S.C. ss. 1639, 12 C.F.R. xx.xx.
226.32 and 226.34 Effective October 1,
1995, amendments October 1, 2002
-----------------------------------------------------------------------------------------------
Illinois High Risk Home Loan Act, Ill. High Risk Home Loan
Comp. Stat. tit. 815, xx.xx.
137/5 et seq. Effective
January 1, 2004 (prior to
this date, regulations under
Residential Mortgage License
Act effective from May 14,
2001)
-----------------------------------------------------------------------------------------------
Kansas Consumer Credit Code, Kan. High Loan to Value
Stat. Xxx. xx.xx. 16a-1-101 et Consumer Loan and;
seq. High APR Consumer Loan
Sections 16a-1-301 and
16a-3-207 became effective
April 14, 1999; Section
16a-3-308a became effective
July 1, 1999
-----------------------------------------------------------------------------------------------
Kentucky 2003 KY H.B. 287 - High Cost High Cost Home Loan
Home Loan Act, Ky. Rev. Stat.
xx.xx. 360.100 et seq. Effective
June 24, 2003
-----------------------------------------------------------------------------------------------
Maine Truth in Lending, Me. Rev. High Rate High Fee
Stat. tit. 9-A, xx.xx. 8-101 et Mortgage
seq.
Effective September 29, 1995
and as amended from time to
time
-----------------------------------------------------------------------------------------------
Massachusetts Part 40 and Part 32, 209 High Cost Home Loan
C.M.R. xx.xx. 32.00 et seq. and 209
C.M.R. xx.xx. 40.01 et seq. Effective
March 22, 2001 and amended from time to
time
-----------------------------------------------------------------------------------------------
Nevada Assembly Xxxx No. 284, Nev. Home Loan
Rev. Stat. xx.xx. 598D.010 et seq.
Effective October 1, 2003
-----------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership High Cost Home Loan
Security Act of 2002, N.J.
Rev. Stat. xx.xx. 46:10B-22 et
seq.
Effective for loans closed on
or after November 27, 2003
-----------------------------------------------------------------------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications
made on or after April 1, 2003
-----------------------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, High Cost Home Loan
N.M. Rev. Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February
26, 2004
-----------------------------------------------------------------------------------------------
North Carolina Restrictions and Limitations High Cost Home Loan
on High Cost Home Loans, N.C.
Gen. Stat. xx.xx. 24-1.1E et seq.
Effective July 1, 2000;
amended October 1, 2003
(adding open-end lines of
credit)
-----------------------------------------------------------------------------------------------
Ohio H.B. 386 (codified in various Covered Loan
sections of the Ohio Code),
Ohio Rev. Code Xxx. xx.xx.
1349.25 et seq.
Effective May 24, 2002
-----------------------------------------------------------------------------------------------
Oklahoma Consumer Credit Code Subsection 10 Mortgage
(codified in various sections
of Title 14A)
Effective July 1, 2000;
amended effective January 1,
2004
-----------------------------------------------------------------------------------------------
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C.
Code Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on
or after January 1, 2004
-----------------------------------------------------------------------------------------------
West Virginia West Virginia Residential West Virginia
Mortgage Lender, Broker and Mortgage Loan Act Loan
Servicer Act, W. Va. Code
Xxx. xx.xx. 31-17-1 et seq.
Effective June 5, 2002
-----------------------------------------------------------------------------------------------
STANDARD & POOR'S
COVERED LOAN CATEGORIZATION
State/Jurisdiction Name of Anti-Predatory Category under
Lending Law/Effective Date Applicable
Anti-Predatory
Lending Law
-----------------------------------------------------------------------------------------------
Georgia (Oct 1, 2002 - Mar 6, 2003) Georgia Fair Lending Act, Ga. Covered Loan
Code Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 -
March 6, 2003
-----------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Covered Home Loan
Security Act of 2002, N.J.
Rev. Stat. xx.xx. 46:10B-22 et
seq.
Effective November 27, 2003 -
July 5, 2004
-----------------------------------------------------------------------------------------------
STANDARD & POOR'S
HOME LOAN CATEGORIZATION
State/Jurisdiction Name of Anti-Predatory Category under
Lending Law/Effective Date Applicable
Anti-Predatory
Lending Law
-----------------------------------------------------------------------------------------------
Georgia (Oct 1, 2002 - Mar 6, 2003) Georgia Fair Lending Act, Ga. Home Loan
Code Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 -
March 6, 2003
-----------------------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Home Loan
Security Act of 2002, N.J.
Rev. Stat. xx.xx. 46:10B-22 et
seq.
Effective for loans closed on
or after November 27, 2003
-----------------------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, Home Loan
N.M. Rev. Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February
26, 2004
----------------------------------------------------------------------------------------------
North Carolina Restrictions and Limitations Consumer Home Loan
on High Cost Home Loans, N.C.
Gen. Stat. xx.xx. 24-1.1E et seq.
Effective July 1, 2000;
amended October 1, 2003
(adding open-end lines of
credit)
-----------------------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer Home Loan
Consumer Home Loans Act, S.C.
Code Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on
or after January 1, 2004
-----------------------------------------------------------------------------------------------
