EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT
AND
ASSUMPTION
AGREEMENT,
dated as of
September
28,
2006,
between
Residential
Funding
Corporation,
a Delaware corporation ("RFC") and Residential Asset Securities
Corporation,
a Delaware corporation
(the "Company").
Recitals
A.
RFC has entered into seller contracts ("Seller Contracts") with
certain sellers and servicers.
B.
The
Company
wishes
to
purchase
from RFC
certain
Mortgage
Loans
(as hereinafter
defined)
originated pursuant to the Seller Contracts with respect thereto.
C.
The
Company,
RFC, as master
servicer,
and U.S.
Bank
National
Association,
as trustee (the
"Trustee"),
are entering
into a Pooling and Servicing
Agreement
dated as of September 1, 2006 (the "Pooling and
Servicing
Agreement"),
pursuant
to
which
the
Trust
proposes
to
issue
Home
Equity
Mortgage
Asset-Backed
Pass-Through
Certificates,
Series 2006-KS8
(the
"Certificates")
consisting
of fifteen
classes
designated as
Class A-1,
Class A-2,
Class A-3,
Class A-4,
Class M-1,
Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7,
Class M-8,
Class M-9,
Class SB and Class R Certificates,
representing beneficial ownership interests
solely in a trust fund
consisting
primarily of a pool of adjustable
and fixed rate one-to
four-family
mortgage
loans identified on Exhibit F to the Pooling and Servicing
Agreement (the "Mortgage Loans).
D.
In
connection
with the
purchase of the
Mortgage
Loans,
the
Company
will assign to RFC the
Class R Certificates (the "Retained 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 and to assign
certain of its rights under
the Seller
Contracts to the
Company,
and the Company
wishes to assume
certain of RFC's
obligations
under the
Seller Contracts.
F.
The
Company
and RFC intend that the
conveyance
by RFC to the Company of all its right,
title
and interest in and to the Mortgage Loans pursuant to this
Agreement
shall
constitute a purchase and sale and not
a loan.
NOW
THEREFORE,
in
consideration
of the
recitals
and the
mutual
promises
herein and other good and
valuable consideration, the parties agree as follows:
1.
All
capitalized
terms used but not
defined
herein
shall
have the
meanings
assigned
thereto in the
Pooling and Servicing Agreement.
2.
Concurrently
with the execution and delivery
hereof,
RFC hereby assigns to the Company without recourse
all of its right,
title and interest in and to the Mortgage Loans,
including all interest and principal
received
on or with respect to the
Mortgage
Loans after the Cut-off
Date (other than
payments of principal
and interest
due on the Mortgage
Loans in
September 2006).
In
consideration
of such
assignment,
RFC will receive from the
Company,
in immediately
available funds, an amount equal to
$567,530,592.62
and the Retained
Certificates.
In
connection with such assignment and at the Company's
direction,
RFC has in respect of each Mortgage Loan endorsed
the related
Mortgage
Note (other
than any
Destroyed
Mortgage
Note,
hereinafter
defined) to the order of the
Trustee and
delivered
an
assignment
of mortgage in
recordable
form to the Trustee or its agent.
A "Destroyed
Mortgage Note" means a Mortgage Note the original of which was
permanently lost or destroyed.
The
Company
and RFC
intend
that the
conveyance
by RFC to the
Company
of all its
right,
title and
interest in and to the
Mortgage
Loans
pursuant to this
Section 2 shall be, and be
construed
as, a sale of the
Mortgage Loans by RFC to the Company.
It is,
further,
not intended that such conveyance be deemed to be a pledge
of the
Mortgage
Loans by RFC to the Company to secure a debt or other
obligation
of RFC.
Nonetheless
(a) this
Agreement
is intended to be and hereby is deemed to be a security
agreement
within the meaning of Articles 8 and
9 of the Minnesota Uniform
Commercial Code and the Uniform
Commercial Code of any other applicable
jurisdiction;
(b) the
conveyance
provided for in this Section shall be deemed to be a grant by RFC
to the Company of a security
interest in all of RFC's right
(including
the power to convey title
thereto),
title and
interest,
whether now
owned or hereafter
acquired,
in and to (A) the Mortgage Loans,
including the Mortgage Notes, the Mortgages,
any
related
insurance
policies
and all other
documents
in the related
Mortgage
Files,
(B) all
amounts
payable
pursuant to the
Mortgage
Loans in
accordance
with the terms
thereof
and (C) any and all
general
intangibles
consisting of, arising from or relating to any of the foregoing,
and all proceeds of the conversion,
voluntary or
involuntary,
of
the
foregoing
into
cash,
instruments,
securities
or
other
property,
including,
without
limitation,
all amounts from time to time held or invested in the
Certificate
Account or the Custodial
Account,
whether in the form of cash,
instruments,
securities or other
property;
(c) the possession by the Trustee,
the
Custodian
or any other
agent of the Trustee of
Mortgage
Notes or such other
items of
property
as
constitute
instruments,
money,
payment
intangibles,
negotiable
documents,
goods,
deposit
accounts,
letters of credit,
advices
of
credit,
investment
property,
certificated
securities
or
chattel
paper
shall
be
deemed
to be
"possession by the secured party," or possession by a purchaser or
a person
designated by such secured party,
for
purposes of perfecting the security
interest
pursuant to the Minnesota
Uniform
Commercial
Code and the Uniform
Commercial Code of any other applicable
jurisdiction
(including
without
limitation,
Sections 8-106,
9-313 and
9-106
thereof);
and
(d) notifications
to persons
holding
such
property,
and
acknowledgments,
receipts
or
confirmations from persons holding such property,
shall be deemed
notifications to, or acknowledgments,
receipts
or confirmations from, financial
intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose
of
perfecting
such
security
interest
under
applicable
law.
RFC shall,
to the extent
consistent
with this
Agreement,
take such
reasonable
actions as may be
necessary to ensure that,
if this
Agreement
were deemed to
create a security
interest in the Mortgage Loans and the other property
described above,
such security
interest
would be deemed to be a perfected
security
interest of first priority under applicable law and will be
maintained
as such
throughout
the term of this
Agreement.
Without
limiting the
generality
of the
foregoing,
RFC shall
prepare and deliver to the Company not less than 15 days prior to
any filing date,
and the Company
shall file, or
shall cause to be filed,
at the expense of RFC,
all
filings
necessary
to
maintain
the
effectiveness
of any
original
filings
necessary
under the Uniform
Commercial
Code as in effect in any
jurisdiction
to perfect the
Company's
security
interest in or lien on the
Mortgage
Loans
including
without
limitation
(x)
continuation
statements,
and (y) such other
statements as may be
occasioned by (1) any
change of name of RFC or the Company,
(2) any change of location of the state of formation,
place of business or the chief
executive
office of RFC, or
(3) any transfer of any interest of RFC in any Mortgage Loan.
3.
Concurrently
with the execution and delivery
hereof,
the Company hereby assigns to RFC without recourse
all of its right,
title and interest in and to the Retained
Certificates as part of the consideration
payable to
RFC by the Company pursuant to this Agreement.
4.
RFC
represents
and
warrants to the
Company,
with
respect to each
Mortgage
Loan that on the date of
execution hereof (or, if otherwise specified below, as of the date
so specified),
(i)
Immediately
prior to the
delivery of the Mortgage
Loans to the Company,
RFC had good title to, and was
the sole
owner of,
each
Mortgage
Loan free and clear of any
pledge,
lien or
security
interest
(other
than
(a) rights to servicing
and related
compensation,
and (b) any
senior lien relating to a Mortgage Loan listed on
Schedule A attached
hereto (the
"Junior
Lien
Mortgage
Loans"))
and had full right and
authority
to sell and
assign the Mortgage Loans pursuant to this Agreement.
(ii)
The proceeds of the Mortgage Loan have been fully
disbursed,
there is no requirement for future advances
thereunder
and any and all
requirements
as to
completion
of any
on-site or
off-site
improvements
and as to
disbursements
of any escrow funds
therefor
(including
any escrow funds held to make
Monthly
Payments
pending
completion
of such
improvements)
have been
complied
with.
All costs,
fees and
expenses
incurred in making,
closing or recording the Mortgage Loans were paid.
(iii)
The Mortgagor
(including any party
secondarily
liable under the Mortgage File) has no right of set-off,
defense,
counterclaim
or right of
rescission
as to any document in the Mortgage
File except as may be provided
under the Relief Act.
(iv)
RFC and any other
originator,
servicer or other
previous
owner of each
Mortgage Loan has obtained all
licenses and effected all registrations
required under all applicable local,
state and federal laws,
regulations
and orders,
including without
limitation truth in lending and disclosure laws,
necessary to own or originate the
Mortgage
Loans (the
failure to obtain such
licenses or to comply with such laws,
regulations
and orders
would
make such Mortgage Loans void or voidable).
(v)
A policy of title
insurance,
in the form and amount
that is in
material
compliance
with the
Program
Guide,
was effective as of the closing of each Mortgage Loan, is valid and
binding,
and remains in full force and
effect
except for
Mortgaged
Properties
located in the State of Iowa where an
attorney's
certificate
has been
provided in accordance with the Program Guide.
No claims have been made under such title
insurance
policy and no
holder of the related
mortgage,
including RFC, has done or omitted to do anything which would
impair the coverage
of such title insurance policy.
(vi)
Each
Mortgage
Loan is a valid and
enforceable
first lien (or in the case of the Junior
Lien
Mortgage
Loans,
junior lien) on the Mortgaged Property subject only to (1) the lien
of nondelinquent
current real property
taxes and assessments,
(2) covenants,
conditions and restrictions,
rights of way, easements and other matters of
public record as of the date of recording of such Mortgage,
such exceptions
appearing of record being
acceptable
to mortgage lending institutions
generally or specifically
reflected in the appraisal made in connection with the
origination
of the related
Mortgage Loan,
and (3) other matters to which like
properties
are commonly
subject
that do not materially interfere with the benefits of the security
intended to be provided by such Mortgage.
(vii)
All
improvements
which were considered in determining the Appraised Value of the
Mortgaged
Property lie
wholly within the boundaries and the building
restriction lines of the Mortgaged Premises,
or the policy of title
insurance
affirmatively
insures
against loss or damage by reason of any violation,
variation,
encroachment
or
adverse circumstance that either is disclosed or would have been
disclosed by an accurate survey.
(viii)
There are no delinquent tax or delinquent
assessment liens against the related
Mortgaged
Property,
and
there are no mechanic's
liens or claims for work,
labor or material or any other liens
affecting
such Mortgaged
Property
which are or may be a lien prior to, or equal with,
the lien of the
Mortgage
assigned
to RFC,
except
those liens that are insured against by the policy of title
insurance and described in (v) above.
(ix)
Each
Mortgaged
Property is free of material
damage and is in good repair and no notice of
condemnation
has been given with respect thereto.
(x)
The
improvements
upon the
Mortgaged
Property
are insured
against
loss by fire and other
hazards as
required by the Program Guide,
including
flood
insurance if required
under the National Flood
Insurance Act of
1968,
as amended.
The Mortgage
requires the Mortgagor to maintain
such
casualty
insurance at the
Mortgagor's
expense,
and on the
Mortgagor's
failure to do so,
authorizes
the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's expense and to seek reimbursement
therefore from the Mortgagor.
(xi)
The appraisal was made by an appraiser who meets the minimum
qualifications
for
appraisers as specified
in the Program Guide.
(xii)
Each
Mortgage
Note and Mortgage
constitutes
a legal,
valid and binding
obligation
of the
Mortgagor
enforceable
in
accordance
with its terms
except as limited by
bankruptcy,
insolvency
or other
similar
laws
affecting generally the enforcement of creditors' rights.
(xiii)
Each Mortgage Loan is covered by a standard hazard insurance
policy.
(xiv)
None of the Mortgage Loans are secured by a leasehold estate.
(xv)
The
information
set forth on the Mortgage
Loan
Schedule with respect to each Mortgage Loan is true and
correct in all material respects as of the date or dates which such
information is furnished.
(xvi)
As of the Cut-Off Date,
none of the Mortgage Loans are currently
30 to 59 days
delinquent in payment of
principal and interest.
As of the Cut-Off Date,
approximately
0.1% of the Mortgage
Loans have been a maximum of
30 to 59 days
delinquent in payment of principal and interest in the past 12
months.
As of the Cut-Off Date, none
of the Mortgage
Loans are currently 60 to 89 days
delinquent in the payment of principal and interest.
As of the
Cut-Off
Date,
approximately
0.1% of the Mortgage
Loans have been a maximum of 60 to 89 days
delinquent
in the
payment of principal
and interest in the last 12 months.
As of the Cut-Off Date,
none of the Mortgage
Loans are
currently 90 or more days
delinquent
in the payment of principal and
interest.
As of the Cut-Off Date,
none of
the Mortgage
Loans have been 90 or more days
delinquent
in the payment of principal
and interest in the past 12
months.
For the purposes of this
representation a Mortgage Loan is considered
Delinquent if a Subservicer or the
Master
Servicer has made any advances on the Mortgage
Loan that have not been
reimbursed
out of payments by the
mortgagor or on the
mortgagor's
behalf from a source other than a Subservicer,
a Seller,
the Master Servicer or
an affiliated entity of either.
(xvii)
The weighted
average
Loan-to-Value
Ratio with respect to the Mortgage
Loans by
outstanding
principal
balance at origination, is 80.9%.
(xviii)
No more than
approximately
0.3% of the
Mortgage
Loans,
by
outstanding
principal
balance
as of the
Cut-off Date,
are located in any one zip code area in Maryland.
No more than
approximately
0.3% of the Mortgage
Loans by
outstanding
principal
balance as of the Cut-off
Date are
located in any one zip code area
outside of
Wisconsin.
(xix)
Approximately 98.1% of the Mortgage Loans that are adjustable-rate
loans will adjust
semi-annually based
on
Six-Month
LIBOR
(as
defined
in
the
Prospectus
Supplement).
Each
of
the
Mortgage
Loans
that
are
adjustable-rate
loans will adjust on the Adjustment Date specified in the related
Mortgage Note to a rate equal to
the sum
(rounded as described in the
Prospectus
Supplement)
of the related
Index
described in the
Prospectus
Supplement and the Note Margin set forth in the related
Mortgage
Note,
subject to the
limitations
described in
the
Prospectus
Supplement,
and each
Mortgage
Loan has an original
term to maturity from the date on which the
first monthly payment is due of not more than
approximately
30 years. On each Adjustment
Date, the Mortgage Rate
on each
Mortgage
Loan that is an
adjustable-rate
loan will be
adjusted
to equal the
related
Index
plus the
related
Gross Margin,
subject in each case to the Periodic
Rate Cap, the Mortgage Rate and the Minimum
Mortgage
Rate.
The amount of the monthly
payment on each
Mortgage Loan that is an
adjustable-rate
loan will be adjusted
on the
first
day of the
month
following
the month in which
the
Adjustment
Date
occurs to equal the
amount
necessary
to pay
interest at the
then-applicable
Mortgage
Rate to fully
amortize
the
outstanding
principal
balance
of such
Mortgage
Loan over its
remaining
term to stated
maturity.
No
Mortgage
Loan is
subject
to
negative amortization.
(xx)
With respect to each Mortgage
constituting a deed of trust, a trustee,
duly qualified
under
applicable
law to serve as such, has been properly
designated
and currently so serves and is named in such Mortgage,
and no
fees or expenses
are or will become
payable by the holder of the Mortgage
Loan to the trustee
under the deed of
trust, except in connection with a trustee's sale after default by
the Mortgagor.
(xxi)
Approximately
14.1% the Mortgaged
Properties
related to the Mortgage
Loans (by
outstanding
principal
balance
as of the
Cut-off
Date) are units in
detached
planned
unit
developments.
Approximately
1.8% of the
Mortgaged
Properties
related to the Mortgage Loans (by outstanding
principal balance as of the Cut-off Date) are
units in
attached
planned
unit
developments.
Approximately
1.0% of the
Mortgaged
Properties
related to the
Mortgage
Loans (by
outstanding
principal
balance as of the Cut-off Date) are units in
townhouses.
None of the
Mortgaged
Properties related to the Mortgage Loans
(by outstanding
principal balance as of the Cut-off Date) are
units
in
manufactured
housing
developments.
Approximately
4.2% of the
Mortgaged
Properties
related
to the
Mortgage Loans (by
outstanding
principal
balance as of the Cut-off Date) are condominium
units.
Each Mortgaged
Property is suitable for year-round occupancy.
(xxii)
Approximately
94.9% of the Mortgaged
Properties related to the Mortgage Loans (by outstanding
principal
balance
as of the
Cut-off
Date)
are
secured
by the
owner's
primary
residence.
Approximately
2.1%
of the
Mortgaged
Properties
related to the Mortgage Loans (by outstanding
principal balance as of the Cut-off Date) are
secured by the owner's second or vacation
residence.
Approximately
3.0% of the Mortgaged
Properties
related to
the Mortgage Loans (by outstanding
principal
balance as of the Cut-off Date) are secured by a non-owner
occupied
residence.
(xxiii)
Approximately
73.9% of the Mortgaged
Properties related to the Mortgage Loans (by outstanding
principal
balance as of the Cut-off
Date) are secured by
detached
one-family
dwelling
units.
Approximately
4.9% of the
Mortgaged
Properties
related to the Mortgage Loans (by outstanding
principal balance as of the Cut-off Date) are
secured by two- to four-family dwelling units.
(xxiv)
The
average
outstanding
principal
balance
of the
Mortgage
Loans at
origination
was
approximately
$146,488.
No Mortgage Loan at origination had a principal balance of less
than $10,000 or more than $822,500.
(xxv)
As of the
Cut-off
Date,
all
Mortgage
Rate
adjustments
on the
Mortgage
Loans that have
reached an
Adjustment Date have been done in accordance with the terms of the
related Mortgage Note.
(xxvi)
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
