ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated July
30, 2007, between Residential
Funding Company, LLC, a Delaware limited liability company
("RFC"), and Residential Accredit
Loans, Inc., a Delaware corporation (the "Company").
Recitals
A. RFC has entered into contracts ("Seller
Contracts") with various
seller/servicers, pursuant to which such seller/servicers sell to
RFC mortgage loans.
B. The Company wishes to purchase from RFC
certain Mortgage Loans (as
hereinafter defined) sold to RFC pursuant to the Seller Contracts.
C. The Company, RFC, as master servicer, and
Deutsche Bank Trust Company
Americas, as trustee (the "Trustee"), are entering into a
Series Supplement, dated as of
July 1, 2007 (the "Series Supplement"), and the Standard
Terms of Pooling and Servicing
Agreement, dated as of July 1, 2007 (collectively, the "Pooling
and Servicing Agreement"),
pursuant to which the Company proposes to issue Mortgage
Asset-Backed Pass-Through
Certificates, Series 2007-QH7 (the "Certificates") consisting of
twenty classes designated
as Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 2-A-1, Class
2-A-2, Class R-I, Class R-II,
Class R-III, Class R-IV, Class R-X, 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 SB
Certificates representing beneficial
ownership interests in a trust fund consisting primarily of a
pool that will be divided into
(i) the one- to four-family residential, payment-option, hybrid
adjustable-rate first lien
mortgage loans with a negative amortization feature identified
in Exhibit One-A to the
Series Supplement (the "Group 1 Loans") and (ii) the one- to
four-family residential,
payment-option, hybrid adjustable-rate first lien mortgage
loans with a negative
amortization feature identified in Exhibit One-B to the Series
Supplement (the "Group 2
Loans" and, together with the Group 1 Loans, the "Mortgage Loans").
D. In connection with the purchase of the
Mortgage Loans, the Company will
assign to RFC a de minimis portion of the Class R-I, Class R-II,
Class R-III and Class R-IV
Certificates. The Class 1-A-1, Class 1-A-2, Class 1-A-3,
Class 2-A-1, Class 2-A-2,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8 and
Class M-9 Certificates were offered to investors pursuant to a
Prospectus Supplement dated
July 27, 2007 (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.
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 July 1, 2007 (other than payments of principal and
interest due on the Mortgage
Loans on or before July 1, 2007). In consideration of such
assignment, RFC or its designee
will receive from the Company in immediately available
funds an amount equal to
$359,243,061.74 and a de minimis portion of the Class R-I, Class
R-II, Class R-III and Class
R-IV Certificates. In connection with such assignment and at the
Company's direction, RFC
has in respect of each Mortgage Loan endorsed the related
Mortgage Note (other than any
Destroyed Mortgage Note) to the order of the Trustee and
delivered an assignment of mortgage
in recordable form to the Trustee or its agent.
RFC and the Company agree that the sale of each Pledged
Asset Loan pursuant to this
Agreement will also constitute the assignment, sale,
setting-over, transfer and conveyance
to the Company, without recourse (but subject to RFC's
covenants, representations and
warranties specifically provided herein), of all of RFC's
obligations and all of RFC's
right, title and interest in, to and under, whether now
existing or hereafter acquired as
owner of such Pledged Asset Loan with respect to any and all
money, securities, security
entitlements, accounts, general intangibles, payment
intangibles, instruments, documents,
deposit accounts, certificates of deposit, commodities
contracts, and other investment
property and other property of whatever kind or description
consisting of, arising from or
related, (i) the Credit Support Pledge Agreement, the Funding and
Pledge Agreement among the
Mortgagor or other Person pledging the related Pledged Assets
(the "Customer"), Combined
Collateral LLC and National Financial Services Corporation, and
the Additional Collateral
Agreement between GMAC Mortgage, LLC and the Customer
(collectively, the "Assigned
Contracts"), (ii) all rights, powers and remedies of RFC as owner
of such Pledged Asset Loan
under or in connection with the Assigned Contracts, whether
arising under the terms of such
Assigned Contracts, by statute, at law or in equity, or otherwise
arising out of any default
by the Mortgagor under or in connection with the Assigned
Contracts, including all rights to
exercise any election or option or to make any decision or
determination or to give or
receive any notice, consent, approval or waiver thereunder,
(iii) the Pledged Amounts and
all money, securities, security entitlements, accounts,
general intangibles, payment
intangibles, instruments, documents, deposit accounts,
certificates of deposit, commodities
contracts, and other investment property and other property of
whatever kind or description
and all cash and non-cash proceeds of the sale, exchange, or
redemption of, and all stock or
conversion rights, rights to subscribe, liquidation
dividends or preferences, stock
dividends, rights to interest, dividends, earnings, income,
rents, issues, profits, interest
payments or other distributions of cash or other property that
secures a Pledged Asset Loan,
(iv) all documents, books and records concerning the foregoing
(including all computer
programs, tapes, disks and related items containing any such
information) and (v) all
insurance proceeds (including proceeds from the Federal Deposit
Insurance Corporation or the
Securities Investor Protection Corporation or any other
insurance company) of any of the
foregoing or replacements thereof or substitutions therefor,
proceeds of proceeds and the
conversion, voluntary or involuntary, of any thereof. The
foregoing transfer, sale,
assignment and conveyance does not constitute and is not intended
to result in the creation,
or an assumption by the Company, of any obligation of RFC, or any
other Person in connection
with the Pledged Assets or under any agreement or instrument
relating thereto, including any
obligation to the Mortgagor, other than as owner of the Pledged
Asset Loan.
The Company and RFC intend that the conveyance by RFC
to the Company of all its
right, title and interest in and to the Mortgage Loans pursuant
to this Section 2 shall be,
and be construed as, a sale of the Mortgage Loans by RFC to the
Company. It is, further,
not intended that such conveyance be deemed to be a pledge of
the Mortgage Loans by RFC to
the Company to secure a debt or other obligation of RFC.
Nonetheless, (a) this Agreement is
intended to be and hereby is a security agreement within the
meaning of Articles 8 and 9 of
the Minnesota Uniform Commercial Code and the Uniform
Commercial Code of any other
applicable jurisdiction; (b) the conveyance provided for in this
Section shall be deemed to
be, and hereby is, a grant by RFC to the Company of a security
interest in all of RFC's
right, title and interest, whether now owned or hereafter
acquired, in and to any and all
general intangibles, payment intangibles, accounts, chattel
paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods,
letters of credit, advices of
credit and investment property consisting of, arising from
or relating to any of the
following: (A) the Mortgage Loans, including (i) with respect to
each Cooperative Loan, the
related Mortgage Note, Security Agreement, Assignment of
Proprietary Lease, Cooperative
Stock Certificate, Cooperative Lease, any insurance policies and
all other documents in the
related Mortgage File and (ii) with respect to each Mortgage
Loan other than a Cooperative
Loan, the related Mortgage Note, the Mortgage, any
insurance policies and all other
documents in the related Mortgage File, (B) all monies due or to
become due pursuant to the
Mortgage Loans in accordance with the terms thereof and (C) all
proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash,
instruments, securities or other
property, including without limitation all amounts from time to
time held or invested in the
Certificate Account or the Custodial Account, whether in the
form of cash, instruments,
securities or other property; (c) the possession by the Trustee,
the Custodian or any other
agent of the Trustee of Mortgage Notes or such other items
of property as constitute
instruments, money, payment intangibles, negotiable documents,
goods, deposit accounts,
letters of credit, advices of credit, investment property or
chattel paper shall be deemed
to be "possession by the secured party," or possession by a
purchaser or a person designated
by such secured party, for purposes of perfecting the security
interest pursuant to the
Minnesota Uniform Commercial Code and the Uniform Commercial
Code of any other applicable
jurisdiction (including, without limitation, Sections 8-106,
9-313 and 9-106 thereof); and
(d) notifications to persons holding such property, and
acknowledgments, receipts or
confirmations from persons holding such property, shall be
deemed notifications to, or
acknowledgments, receipts or confirmations from, securities
intermediaries, bailees or
agents of, or persons holding for, (as applicable) the Trustee
for the purpose of perfecting
such security interest under applicable law. RFC shall, to the
extent consistent with this
Agreement, take such reasonable actions as may be necessary
to ensure that, if this
Agreement were determined to create a security interest in the
Mortgage Loans and the other
property described above, such security interest would be
determined to be a perfected
security interest of first priority under applicable law and
will be maintained as such
throughout the term of this Agreement. Without limiting the
generality of the foregoing,
RFC shall prepare and deliver to the Company not less than 15 days
prior to any filing date,
and the Company shall file, or shall cause to be filed, at the
expense of RFC, all filings
necessary to maintain the effectiveness of any original filings
necessary under the Uniform
Commercial Code as in effect in any jurisdiction to perfect the
Company's security interest
in or lien on the Mortgage Loans, including without limitation
(x) continuation statements,
and (y) such other statements as may be occasioned by (1) any
change of name of RFC or the
Company, (2) any change of location of the state of formation,
place of business or the
chief executive office of RFC, or (3) any transfer of any
interest of RFC in any Mortgage
Loan.
Notwithstanding the foregoing, (i) the Master
Servicer shall retain all
servicing rights (including, without limitation, primary
servicing and master servicing)
relating to or arising out of the Mortgage Loans, and all rights
to receive servicing fees,
servicing income and other payments made as compensation for
such servicing granted to it
under the Pooling and Servicing Agreement pursuant to the terms
and conditions set forth
therein (collectively, the "Servicing Rights") and (ii) the
Servicing Rights are not
included in the collateral in which RFC grants a security
interest pursuant to the
immediately preceding paragraph.
3. Concurrently with the execution and delivery
hereof, the Company hereby
assigns to RFC without recourse all of its right, title and
interest in and to a de minimis
portion of the Class R-I, Class R-II, Class R-III and Class R-IV
Certificates as part of the
consideration payable to RFC by the Company pursuant to this
Agreement.
4. RFC represents and warrants to the
Company that on the date of
execution hereof (or, if otherwise specified below, as of the
date so specified 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):
(a) The information set forth in Exhibits
One-A and One-B to the Series
Supplement with respect to each Mortgage Loan or the Mortgage
Loans, as the case may be, is
true and correct in all material respects, at the date or
dates respecting which such
information is furnished;
(b) Each Mortgage Loan with a Loan-to-Value
Ratio at origination in excess
of 80% will be insured by a Primary Insurance Policy covering at
least 35% of the principal
balance of the Mortgage Loan at origination if the Loan-to-Value
Ratio is between 100.00%
and 95.01%, at least 30% of the principal balance of the Mortgage
Loan at origination if the
Loan-to-Value Ratio is between 95.00% and 90.01%, at least
25% of the balance if the
Loan-to-Value Ratio is between 90.00% and 85.01% and at least
12% of the balance if the
Loan-to-Value Ratio is between 85.00% and 80.01%. To the best of
the Company's knowledge,
each such Primary Insurance Policy is in full force and effect
and the Trustee is entitled
to the benefits thereunder;
(c) Each Primary Insurance Policy insures
the named insured and its
successors and assigns, and the issuer of the Primary
Insurance Policy is an insurance
company whose claims-paying ability is currently acceptable to the
Rating Agencies;
(d) Immediately prior to the assignment of
the Mortgage Loans to the
Company, RFC had good title to, and was the sole owner of, each
Mortgage Loan free and clear
of any pledge, lien, encumbrance or security interest (other
than rights to servicing and
related compensation and, with respect to certain Mortgage Loans,
the monthly payment due on
the first Due Date following the Cut-off Date), and no action has
been taken or failed to be
taken by RFC that would materially adversely affect the
enforceability of any Mortgage Loan
or the interests therein of any holder of the Certificates;
(e) Approximately 0.6% of the Group 1 Loans were
30 or more days delinquent
in payment of principal and interest as of the Cut-off Date, and
no Group 1 Loan has been so
delinquent more than once in the 12-month period prior to the
Cut-off Date. Approximately
1.2% of the Group 2 Loans were 30 or more days delinquent in
payment of principal and
interest as of the Cut-off Date, and no Group 1 Loan has been so
delinquent more than once
in the 12-month period prior to the Cut-off Date;
(f) Subject to clause (e) above as respects
delinquencies, there is no
default, breach, violation or event of acceleration existing
under any Mortgage Note or
Mortgage and no event which, with notice and expiration of any
grace or cure period, would
constitute a default, breach, violation or event of
acceleration, and no such default,
breach, violation or event of acceleration has been waived by
the Seller or by any other
entity involved in originating or servicing a Mortgage Loan;
(g) There is no delinquent tax or assessment
lien against any Mortgaged
Property;
(h) No Mortgagor has any right of offset,
defense or counterclaim as to the
related Mortgage Note or Mortgage except as may be provided under
the Servicemembers Civil
Relief Act, formerly known as the Soldiers' and Sailors'
Civil Relief Act of 1940, as
amended, and except with respect to any buydown agreement for a
Buydown Mortgage Loan;
(i) There are no mechanics' liens or claims
for work, labor or material
affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the
lien of the related Mortgage, except such liens that are insured
or indemnified against by a
title insurance policy described under clause (aa) below;
(j) Each Mortgaged Property is free of damage
and in good repair and no
notice of condemnation has been given with respect thereto
and RFC knows of nothing
involving any Mortgaged Property that could reasonably be
expected to materially adversely
affect the value or marketability of any Mortgaged Property;
(k) Each Mortgage Note and Mortgage constitutes
a legal, valid and binding
obligation of the borrower enforceable in accordance with its
terms except as limited by
bankruptcy, insolvency or other similar laws affecting
generally the enforcement of
creditor's rights;
(l) Each Mortgage contains customary and
enforceable provisions which
render the rights and remedies of the holder adequate to
realize the benefits of the
security against the Mortgaged Property, including (i) in the
case of a Mortgage that is a
deed of trust, by trustee's sale, (ii) by summary foreclosure, if
available under applicable
law, and (iii) otherwise by foreclosure, and there is no
homestead or other exemption
available to the Mortgagor that would interfere with such right
to sell at a trustee's sale
or right to foreclosure, subject in each case to applicable
federal and state laws and
judicial precedents with respect to bankruptcy and right of
redemption;
(m) With respect to each Mortgage that is a
deed of trust, a trustee duly
qualified under applicable law to serve as such is properly
named, designated and serving,
and except in connection with a trustee's sale after default
by a Mortgagor, no fees or
expenses are payable by the Seller or RFC to the trustee under
any Mortgage that is a deed
of trust;
(n) The Mortgage Loans are payment-option,
hybrid adjustable-rate first
lien mortgage loans, with a negative amortization feature
having terms to maturity of not
more than 30 years from the date of origination or modification
with monthly payments due,
with respect to a majority of the Mortgage Loans, on the first day
of each month;
(o) If any of the Mortgage Loans are secured by a
leasehold interest, with
respect to each leasehold interest: the use of leasehold estates
for residential properties
is an accepted practice in the area where the related
Mortgaged Property is located;
residential property in such area consisting of leasehold estates
is readily marketable; the
lease is recorded and no party is in any way in breach of any
provision of such lease; the
leasehold is in full force and effect and is not subject to any
prior lien or encumbrance by
which the leasehold could be terminated or subject to any
charge or penalty; and the
remaining term of the lease does not terminate less than ten
years after the maturity date
of such Mortgage Loan;
(p) Each Assigned Contract relating to each
Pledged Asset Loan is a valid,
binding and legally enforceable obligation of the parties thereto,
enforceable in accordance
with their terms, except as limited by bankruptcy,
insolvency or other similar laws
affecting generally the enforcement of creditor's rights;
(q) The Assignor is the holder of all of the
right, title and interest as
owner of each Pledged Asset Loan in and to each of the Assigned
Contracts delivered and sold
to the Company hereunder, and the assignment hereof by RFC
validly transfers such right,
title and interest to the Company free and clear of any pledge,
lien, or security interest
or other encumbrance of any Person;
(r) The full amount of the Pledged Amount
with respect to such Pledged
Asset Loan has been deposited with the custodian under the Credit
Support Pledge Agreement
and is on deposit in the custodial account held thereunder as of
the date hereof;
(s) RFC is a member of MERS, in good standing,
and current in payment of
all fees and assessments imposed by MERS, and has complied with
all rules and procedures of
MERS in connection with its assignment to the Trustee as
assignee of the Depositor of the
Mortgage relating to each Mortgage Loan that is registered with
MERS, including, among other
things, that RFC shall have confirmed the transfer to the
Trustee, as assignee of the
Depositor, of the Mortgage on the MERS(R)System;
(t) No instrument of release or waiver has been
executed in connection with
the Mortgage Loans, and no Mortgagor has been released, in
whole or in part from its
obligations in connection with a Mortgage Loan;
(u) With respect to each Mortgage
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