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EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of March 4, 2005,
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 February 1, 2005 (the "Pooling
and Servicing
Agreement"), pursuant to which the Trust proposes to issue Home
Equity Mortgage
Asset-Backed Pass-Through Certificates, Series 2005-EMX1 (the
"Certificates")
consisting of sixteen classes designated as Class A-I-1, Class
A-I-2, Class
A-I-3, Class A-II-1, Class A-II-2, Class M-1, Class M-2, Class
M-3, Class M-4,
Class M-5, Class M-6, Class B, Class SB, Class R-I, Class R-II
and Class R-III
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, Class R-I, Class R-II and Class
R-III
Certificates (the "Retained Certificates"). The Class A-I-1,
Class A-I-2, Class
A-I-3, Class A-II-1, Class A-II-2, Class M-1, Class M-2, Class
M-3, Class M-4,
Class M-5 and Class M-6 Certificates were offered to investors
pursuant to a
Prospectus Supplement dated March 1, 2005 (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:
<PAGE>
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 February 2005). In
consideration of
such assignment, RFC will receive from the Company, in
immediately available
funds, an amount equal to $800,010,111.09 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
<PAGE>
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.
<PAGE>
(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 is secured by a leasehold
estate.
<PAGE>
(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, approximately 0.1% of the Group II
Loans are 30 to
59 days Delinquent in payment of principal and interest. As of
the Cut-off Date,
none of the Mortgage Loans are Delinquent in payment of
principal or interest by
60 days or more. 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 Ratio with respect to
Group I Loans,
and the Group II Loans, in each case by outstanding principal
balance at
origination, is 84.8% and 84.6%, respectively.
(xix) No more than approximately 8.3% and 8.8% of the Group I
Loans and the
Group II Loans, respectively, in each case by outstanding
principal balance as
of the Cut-off Date, are located in any one zip code area in
Maryland and
Florida.
(xx) All 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.
(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.
<PAGE>
(xxii) Approximately 13.9% and 7.8% of the Mortgaged Properties
related to the
Group I Loans and the Group II Loans, respectively (in each case
by outstanding
principal balance as of the Cut-off Date), are units in detached
planned unit
developments. Approximately 6.9% and 7.8% of the Mortgaged
Properties related to
the Group I Loans and the Group II Loans, respectively (in each
case by
outstanding principal balance as of the Cut-off Date), are units
in attached
planned unit developments. Approximately 1.2% and 2.0% of the
Mortgaged
Properties related to the Group I Loans and the Group II Loans,
respectively (in
each case by outstanding principal balance as of the Cut-off
Date), are units in
townhouses. None of the Mortgaged Properties related to the
Group I Loans and
the Group II Loans are units in manufactured housing
developments. Approximately
3.2% and 3.6% of the Mortgaged Properties related to the Group I
Loans and the
Group II Loans, respectively (in each case by outstanding
principal balance as
of the Cut-off Date), are condominium units. Eac
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