EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT
AND
ASSUMPTION
AGREEMENT,
dated as of October
27,
2006,
between
Residential
Funding
Company,
LLC,
a
Delaware
limited
liability
company
("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.
C.
The
Company,
RFC,
as master
servicer
(in such
capacity,
the
"Master
Servicer"),
and U.S.
Bank
National
Association,
as trustee
(the
"Trustee"),
are entering into a Pooling and Servicing
Agreement
dated as of
October
27, 2006 (the "Pooling and Servicing
Agreement"),
pursuant to which
the Trust
proposes to issue Home Equity
Mortgage
Asset-Backed
Pass-Through
Certificates,
Series 2006-EMX9 (the
"Certificates")
consisting of seventeen
classes
designated as
Class A-I-1,
Class A-I-2,
Class A-I-3,
Class A-I-4,
Class A-II,
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
M-10,
Class SB
and
Class R
representing
beneficial ownership interests solely in a trust fund consisting
primarily
of a pool that will be divided
into (i) the
adjustable
and fixed
rate
one-to
four-family
mortgage
loans
identified
on Exhibit
F-1 to the
Pooling and Servicing
Agreement (the "Group I Loans") and (ii) the adjustable
and fixed rate one- to four-family
mortgage
loans
identified on Exhibit F-2
to the Pooling and Servicing
Agreement
(the
"Group II
Loans," and together
with the Group I Loans, the "Mortgage Loans").
D.
In
connection
with
the
purchase
of the
Mortgage
Loans,
the
Company
will
assign
to RFC
the
Class SB
and
Class R
Certificates
(the
"Retained Certificates").
The Class A-I-1,
Class A-I-2,
Class A-I-3,
Class
A-I-4, Class A-II,
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 and Class M-10 Certificates were
offered
to
investors
pursuant
to
a
Prospectus
Supplement
dated
October 25, 2006 (the "Prospectus Supplement").
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
October 2006).
In
consideration
of such
assignment,
RFC will receive from
the
Company,
in
immediately
available
funds,
an
amount
equal
to
$716,819,049.08
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
and
provided
that
all
percentages of the Mortgage Loans
described in this Section 4 are approximate
percentages
by
outstanding
principal
balance
determined as of the Cut-off
Date after deducting payments due during the month of the Cut-off
Date):
(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 Exhibit 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) None of the Group I Loans are 30 to 59 days
Delinquent
in
payment
of
principal or interest.
No more than
approximately
0.1% of the Group I Loans
have been a maximum of 30 to 59 days
Delinquent
in payment of
principal
or
interest
in the
last 12
months.
None of the
Group I Loans
are 60 or more
days
Delinquent
in payment of
principal
or
interest.
None of the Group I
Loans
have
been a
maximum
of 60 or more
days
Delinquent
in
payment
of
principal
or interest
in the last 12 months.
None of the Group II Loans are
30 or more days
Delinquent in payment of principal or interest.
No more than
approximately
0.1% of the Group II Loans
have
been a maximum
of 30 or more
days
Delinquent
in payment of
principal
or interest in the last 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)
None of the Mortgage Loans with Loan-to-Value
Ratios, or combined
Loan-to-Value
Ratios with
respect to Junior Lien Loans,
at
origination
in
excess of 80% are
insured
by a
borrower-paid,
primary
mortgage
insurance
policy.
(xviii)
The
weighted
average
Loan-to-Value
Ratios with
respect to the
Group I Loans,
and the Group II Loans, in each case by outstanding
principal
balance at origination, are 86.3% and 86.7%, respectively.
(xix) No more than
approximately 0.5% of the Group I Loans are located in any
one zip code
area in
Maryland
and no more
than
approximately
0.5% of the
Group I Loans are
located in any one zip code area
outside of
Maryland.
No
more than
approximately 0.6% of the Group II Loans are located in any one zip
code area outside of Massachusetts and no more than
approximately 0.4% of the
Group
II
Loans
are
located
in
any
one
zip
code
area
outside
of
Massachusetts.
(xx)
All of the
Mortgage
Loans that are
adjustable-rate
loans will adjust
semi-annually
based on Six-Month
LIBOR.
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
related
Mortgage
Note) 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.
(xxi) 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.
(xxii)
Approximately 15.1% and 11.1% of the Mortgaged
Properties related
to the
Group I
Loans
and the
Group II
Loans,
respectively,
are units in
detached
planned
unit
developments.
Approximately
2.4%
and
1.9%
of the
Mortgaged
Properties
related to the Group I
Loans and the
Group II
Loans,
respectively,
are units in attached planned unit developments.
Approximately
1.6% and 1.2% of the
Mortgaged
Properties
related to the Group I
Loans and
the
Group II
Loans,
respectively,
are units in
townhouses.
Approximately
7.0% and 7.3% of the
Mortgaged
Properties
related to the Group I
Loans and
the Group II
Loans,
respectively,
are
condominium
units.
Each
Mortgaged
Property is suitable for year-round occupancy.
(xxiii)
Approximately
94.0% and all of the Mortgaged
Properties
related
to the Group I Loans and the Group II Loans, respectively,
are secured by the
owner's
primary
residence.
Approximately
2.1%
and
none of the
Mortgaged
Properties related to the Group I Loans and the Group II Loans,
respectively,
are secured by the owner's second or vacation
residence.
Approximately
3.9%
and none of the
Mortgaged
Properties
related to the
Group I
Loans and the
Group II Loans, respectively, are secured by a non-owner occupied
residence.
(xxiv)
Approximately 62.7% and 69.7% of the Mortgaged
Properties related
to the Group I
Loans and the
Group II
Loans,
respectively,
are secured by
detached
one-family
dwelling
units.
Approximately
11.1%
and
9.0% of the
Mortgaged
Properties
related to the Group I
Loans and the
Group II
Loans,
respectively, are secured by two- to four-family dwelling units.
(xxv) The
average
outstanding
principal
balance
of the
Group I
Loans at
origination was
approximately
$191,469.
The average
outstanding
principal
balance of the Group II Loans at origination was
approximately
$177,209.
No
Group I Loan at
origination
had a principal
balance of less than $13,000 or
more
than
$1,000,000.
No
Group II
Loan
at
origination
had a
principal
balance of less than $15,400 or more than $416,800.
(xxvi)
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.
(xxvii)
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.
(xxviii)
Except as otherwise
specifically
set forth herein,
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 RFC or by any
other
entity
involved
in
originating or servicing a Mortgage Loan.
(xxix)
Each
Mortgage
Loan
constitutes
a
"qualified
mortgage"
under
Section
860G(a)(3)(A)
of the Code and
Treasury
Regulation
Section
1.860G
2(a)(1),
(2), (4), (5), (6), (7) and (9),
without reliance on the provisions
of Treasury
Regulation Section 1.860G 2(a)(3) or Treasury
Regulation Section
1.860G
2(f)(2) or any other
provision that would allow a Mortgage Loan to be
treated as a
"qualified
mortgage"
notwithstanding
its
failure to meet the
requirements
of Section
860G(a)(3)(A)
of the Code and
Treasury
Regulation
Section 1.860G 2(a)(1), (2), (4), (5), (6), (7) and (9).
(xxx) No more than 45.2% of the Group I
Loans have been
classified by RFC as
Credit Grade A4 Mortgage
Loans,
no more than 33.9% of the Group I Loans have
been
classified by RFC as Credit Grade A5 Mortgage
Loans, no more than 10.6%
of the Group I
Loans have been
classified by RFC as Credit Grade AX Mortgage
Loans,
no more than 5.8% of the Group I Loans have been
classified by RFC as
Credit Grade AM Mortgage
Loans,
no more than 2.7% of the Group I
Loans have
been
c
