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EXHIBIT 99.1
SECOND MORTGAGE
AIG United Guaranty
BULK INSURANCE POLICY
United Guaranty Residential Insurance Company of North Carolina
230 N. Elm Street / 27401 Telephone
336-373-0232
P.O. Box 20327 Nationwide
800-334-0296
Greensboro, NC 27420 Facsimile
336-273-1785
UNITED GUARANTY RESIDENTIAL INSURANCE COMPANY OF NORTH CAROLINA, a stock
insurance company herein called the Company, in consideration of the premium
which has been paid as hereinafter specified and in reliance upon the
Insured's representations and statements made in the Policy Commitment Letter
and in any application for coverage for a loan under this Policy and in any
documents and writings, including any data transferred by electronic media
related thereto, agrees to pay to the Insured identified below benefits as
herein set forth upon Default by a Borrower on a Loan, subject to the terms
and conditions of this Policy.
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INSURED'S IDENTIFICATION NUMBER: 107-3008-000
INSURED: Chase Bank USA, National
Association, 500 Stanton Christiana Road, Ops 4, Floor 3, Newark, DE, 19713, in
its capacity as co-trustee, for
the benefit of the holders of the Revolving Home Equity Loan Asset Backed
Notes, Series 2006-F, and not
in its individual capacity (the "Co-Trustee") under an Indenture,
dated as
of June 30, 2006, by and among
CWHEQ Revolving Home Equity Loan Trust, Series 2006-F, JPMorgan Chase Bank,
N.A., as Indenture Trustee, and
the Co-Trustee.
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SECURITY:
CWHEQ Revolving Home Equity Loan Trust, Series 2006-F
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BULK POLICY EFFECTIVE DATE
TOTAL INSURED AMOUNT:
$1,053,482,745.00
INITIAL PREMIUM: The initial
monthly premium rate is 0.089%.
GKA 6/23/2006
The initial
premium is due 45 days
following the effective
date of coverage.
SUBSEQUENT PREMIUM: The monthly
renewal premium is 0.089%.
Renewal
premiums are due by the 15th of each
month and are
based on the outstanding loan
balances at
the end of the previous month.
Renewal
premiums may be paid by wire or check.
---------------------------------------
ENDORSEMENTS EFFECTIVE DATES
LOAN LOSS PERCENTAGE: 100%
GKA2092 6/23/2006
MAXIMUM CUMULATIVE LIABILITY PERCENTAGE: 8.50%
COVERAGE PERIOD: Not Applicable
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IN WITNESS WHEREOF, the Company has caused this Policy to be signed by its
duly authorized officers to become effective and binding on the Company when
executed by its duly authorized representative.
UNITED GUARANTY RESIDENTIAL
INSURANCE COMPANY OF NORTH CAROLINA
President
_______________________________________
Secretary Authorized
Representative
ATTACH TO BULK INSURANCE
POLICY TERMS AND CONDITIONS
INSURED'S COPY
GKA1163 02/02 Page 1 OF 1
<PAGE>
------------------------------------------------------------------------------
AMENDATORY
ENDORSEMENT
UNITED GUARANTY
RESIDENTIAL INSURANCE COMPANY OF NORTH CAROLINA
230 N. Elm Street/27401
P.O. Box 20327
Greensboro, NC 27420-1367
336.373.0232
800.334.0296
FOR
SECOND MORTGAGE BULK
INSURANCE POLICY
QUALIFIED; CANCELLATION OF
POLICY BY THE INSURED
The above Second Mortgage Bulk Insurance Policy is hereby amended as of the
date stated on the face of this Policy as follows:
A. A new Section 1.36A (Qualified) is added reading as follows:
1.36A Qualified--Qualified means the
Company
(a) maintains at least an A or equivalent rating
by Standard &
Poor's or its successor so
long as that company provides
ratings of insurance
companies writing the kind of insurance
written by the Company and
(b) either
(i) maintains at least an A or equivalent rating
by either
Moody's Investors
Service or Fitch IBCA, Inc. or their
successors so long as
those companies provide ratings of
insurance companies
writing the kind of insurance written
by the Company or
(ii) maintains an excess
of loss reinsurance agreement with an
insurer which
maintains at least an A or equivalent rating
by Standard &
Poor's and by either Moody's Investors
Service or Fitch
IBCA, Inc. or their successors, except
that if the Company
does not satisfy the requirement of
this Section
1.36A(b)(ii) it shall have ninety (90) days
to satisfy the
requirement of Section 1.36A(b)(i).
B. Section 2.10 (Cancellation of Policy by the Insured) is deleted and a new
Section 2.10 (Cancellation of Policy by the Insured) is substituted reading as
follows:
2.10 Cancellation of Policy by the
Insured --The Insured may terminate
this Policy upon thirty (30) written
days' notice to the Company if the
Company shall cease to be Qualified
or if on any date the total
outstanding principal balances of
all Loans listed on the Schedule as of
the Effective Date of the Policy
have been reduced to no more than ten
percent (10%) of the total
outstanding principal balances of all Loans
listed on the Schedule as of the
Effective Date of the Policy. The
Company shall use diligent effort to
remain Qualified. There shall be no
other right of cancellation of this
Policy by the Insured. There shall be
no refund of premium on cancellation
of this Policy pursuant to this
Section if the Insured chose to pay
premium on any basis other than a
single premium. If the Insured has
paid a single premium for this Policy
and this Policy is cancelled
pursuant to this Section, the Company shall
pay a refund in accordance with the
applicable rate schedule if the rate
schedule provides for a refund.
Nothing contained herein shall be held to vary, alter, waive or amend any of
the terms, conditions or provisions of this Policy or any endorsements thereto
except as stated above.
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GKA2092 09/05 page 1 of 1
<PAGE>
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Title of Contents
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1 Definitions ..............................................................................................1
1.1 Borrower
............................................................................................1
1.2 Certificate
.........................................................................................1
1.3 Claim
...............................................................................................1
1.4 Claim Amount
........................................................................................1
1.3 Closed-end Equity Loan
..............................................................................1
1.6 Combined Loan-to-Value
..............................................................................1
1.7 Commitment ..........................................................................................1
1.8 Commitment Letter
...................................................................................1
1.9 Consummated
.........................................................................................2
1.10 Court Expenses
.....................................................................................2
1.11 Default
............................................................................................2
1.12 Due-on-Sale Clause
.................................................................................2
1.13 Effective Date
.....................................................................................2
1.14 Eligible Note
......................................................................................2
1.15 Environmental Impairment
...........................................................................3
1.16 First Deed of Trust
................................................................................4
1.17 Indemnified Persons
................................................................................4
1.18 Insured
............................................................................................4
1.19 Insured Loan Amount
................................................................................4
1.20 Loan
...............................................................................................4
1.21 Loan File
..........................................................................................4
1.22 Loan File Documents
................................................................................5
1.23 Loan Loss Percentage
...............................................................................5
1.24 Loan Transaction
...................................................................................6
1.25 Loss
...............................................................................................6
1.26 Maximum Cumulative Liability
.......................................................................6
1.27 Maximum Cumulative Liability
Percentage ............................................................6
1.28 Open-end Equity Loan
...............................................................................6
1.29 Permitted Encumbrances
.............................................................................6
1.30 Person
.............................................................................................6
1.31 Physical Damage
....................................................................................6
1.32 Policy
.............................................................................................7
1.33 Program Criteria
...................................................................................7
1.34 Property
...........................................................................................7
1.35 Property Value
.....................................................................................7
1.36 Purchase Money Loan
................................................................................7
1.37 Residential
........................................................................................7
1.38 Schedule
...........................................................................................7
1.39 Second Deed of Trust
...............................................................................8
1.40 Security
...........................................................................................8
1.41 Servicer
...........................................................................................8
1.42 Total Insured Amount
...............................................................................8
2 Coverage
.................................................................................................8
2.1 Obtaining Coverage
..................................................................................8
2.2 Representations of the Insured
......................................................................8
2.3 Initial Premium
.....................................................................................9
2.4 Cancellation of Policy for
Non-Payment of Subsequent Premium ........................................9
2.5 Company's Remedies for
Misrepresentation ............................................................9
GKA 01/02 Page 1 of 2
Table of Contents
<PAGE>
2.6 Coverage Period
.....................................................................................9
2.7 Cancellation of a Certificate by
the Insured .......................................................10
2.8 Cancellation of a Certificate by
the Company .......................................................10
2.9 Termination of Coverage
............................................................................10
2.10 Cancellation of Policy by the
Insured .............................................................10
2.11 Cancellation of Policy by Company
.................................................................11
2.12 Loan Modifications
................................................................................11
2.13 Open End Provisions
...............................................................................11
2.14 Assumptions
.......................................................................................11
2.15 Change of Servicing
...............................................................................11
2.16 Loan Assignment
...................................................................................11
2.17 Premium Payments
..................................................................................12
2.18 Coordination of Other Insurance
Benefits ..........................................................12
3 Exclusions From Coverage ................................................................................12
3.1 Balloon Payment
....................................................................................12
3.2 Effective Date
.....................................................................................12
3.3 Incomplete Construction
............................................................................12
3.4 Loan Transaction
...................................................................................12
3.5 Negligence and Fraud
...............................................................................13
3.6 Non-Approved Servicer
..............................................................................13
3.7 Physical Damage
....................................................................................13
3.8 Environmental Impairment
...........................................................................13
3.9 Combined Loan-to-Value
.............................................................................13
3.10 Down Payment
......................................................................................13
3.11 Second Deed of Trust
..............................................................................13
3.12 Breach of Conditions and
Insured's Obligations ....................................................14
3.13 Defenses
..........................................................................................14
3.14 Failure to Conform to Program
Criteria ............................................................14
3.15 Failure to Provide Loan File
......................................................................14
3.16 Failure to Request Notice of
Default ..............................................................14
3.17 Disbursement of Proceeds After
Borrower Two (2) Months in Default .................................14
3.18 Loan in Default Thirty Days
.......................................................................14
4 Conditions Precedent to Payment of Claim
................................................................14
4.1 Notice of Default
..................................................................................15
4.2 Monthly Reports ....................................................................................15
4.3 Company's Option to Accelerate
Filing of a Claim ...................................................15
4.4 Mitigation of Damages
..............................................................................15
4.5 Claim Information and Other
Requirements ...........................................................16
5 Loss Payment Procedure
..................................................................................16
5.1 Filing of Claim
....................................................................................16
5.2 Calculation of Claim Amount
........................................................................16
5.3 Payment of Loss ....................................................................................17
5.4 Discharge of Obligation; Offset
....................................................................17
6 Additional Conditions ...................................................................................18
6.1 Proceedings of Eminent Domain
......................................................................18
6.2 Subrogation
........................................................................................18
6.3 Notice
.............................................................................................18
6.4 Reports and Examinations
...........................................................................18
6.5 Arbitration of Disputes; Suits and
Actions Brought by the Insured ..................................18
6.6 Conformity to Statute; Applicable
Law ..............................................................19
6.7 Parties in Interest
................................................................................19
6.8 Agency
.............................................................................................19
6.9 Electronic Media
...................................................................................19
6.10 Amendments; Waiver
................................................................................20
6.11 Indemnification
...................................................................................20
6.12 Titles ............................................................................................20
</TABLE>
GKA 01/02 Page 2 of 2
Table of Contents
<PAGE>
Terms and
Conditions
1 Definitions
1.1
Borrower--Borrower means any individual legally required to repay
the debt obligation created
pursuant to the Loan. The Borrower shall
include any co-signor or
guarantor of the Loan.
1.2
Certificate--Certificate means the document extending the indicated
coverage to a specified Loan
under this Policy.
1.3
Claim--Claim means the request, made in a form provided or approved
by the Company, to receive the
benefits of this Policy.
1.4
Claim Amount--Claim Amount means the amount calculated in accordance
with Section 5.2 (Calculation
of Claim Amount) of this Policy.
1.5
Closed-end Equity Loan--Closed-end Equity Loan means a loan which
specifies the length of time
for repayment of the loan amount and
for which the proceeds are
disbursed at the time the loan is
Consummated or after any
applicable statutory rescission period.
1.6
Combined Loan-to-Value--Combined Loan-to-Value means that ratio,
expressed as a percentage,
equal to
(a) the sum of
(i) the Insured Loan Amount and
(ii) the outstanding
principal balance, as of the date the Loan
was Consummated, of
(A) the loan, if any, secured by the First Deed
of Trust
and
(B) the loan, if any, secured by any other
mortgage, deed
of trust or
other instrument constituting a lien or
encumbrance on
the Property subordinate to the First
Deed of Trust
divided by
(b) the Property Value of the Property.
1.7
Commitment--Commitment means the document issued by the Company
indicating the terms and
conditions under which the Company will
extend coverage pursuant to
this Policy to a specified loan.
1.8
Commitment Letter--Commitment Letter means the document issued by
the Company, which committed
the Company to issue this Policy on the
conditions and terms outlined
in that document.
GKA 01/02 Page 1 of 20
<PAGE>
1.9
Consummated--Consummated means the date on which the Loan was closed
and all loan documents were
executed.
1.10 Court Expenses--Court Expenses
mean the out-of-pocket costs,
including reasonable attorneys'
fees, if any, incurred by the
Insured in connection with any
judicial proceeding for the purpose
of collecting monies due under
the Loan, initiating and pursuing a
foreclosure action or, if
applicable, for the protection of the
Insured's position as a secured
party under the Second Deed of
Trust. Court Expenses include
the costs of filing or serving
pleadings, conducting
discovery, and enforcing judgment, but Court
Expenses exclude reimbursement
for any time spent by the Insured or
the Insured's employees,
officers or agents.
1.11 Default--Default means
(a)
the failure by a Borrower to pay when due a nonaccelerated
scheduled periodic payment
due under the terms of the Loan or
(b) the failure by a Borrower to pay the
outstanding balance if the
Loan has been accelerated
by reason of violation by the
Borrower of any
Due-on-Sale Clause.
Default does not mean the
violation by the Borrower of any other
term or condition of the Loan,
or any instrument securing the Loan
and creating a lien or
encumbrance on the Property, which is the
basis for an acceleration of
maturity of the Loan and a foreclosure
action under the instrument
securing the Loan and creating a lien or
encumbrance on the Property.
A Loan is deemed to be in
Default for that month as of the close of
business on the installment due
date for which a scheduled monthly
payment has not been made or on
the date the Insured first discovers
the violation of a Due-on-Sale
Clause. For example, a Loan is "three
(3) months in Default" if
the monthly installments due on January 1
through March 1 remain unpaid
as of the close of business on March
1.
1.12 Due-on-Sale Clause--Due-on-Sale
Clause means a contractual provision
granting to the Insured the
right to accelerate the maturity of the
Loan upon a transfer of title
to or an interest in the Property.
1.13 Effective Date--Effective Date
means
(a) with respect to this Policy,
12:01 a.m. on the date designated
as such on the face of
this Policy and,
(b) with respect to a Certificate, 12:01 a.m. on
the date
designated as such on the
Certificate and
(c) with respect to a Commitment
(i) for new Loans, 12:01 a.m. on the date the
Loan was
Consummated or
(ii) for other Loans,
12:01 a.m. on the date of coverage as
indicated on the
Commitment.
A new Loan is a Loan which was
not Consummated as of the date the
Insured submitted an
application for coverage under this Policy.
1.14 Eligible Note--Eligible Note
means the written evidence of
indebtedness
(a) secured by a Second Deed of Trust and
GKA 01/02 Page 2 of 20
<PAGE>
(b) containing, where permitted by law, itself or
in combination
with the Second Deed of
Trust
(i) a clause providing for the acceleration of
maturity at the
option of the holder,
upon a Default and
(ii) a Due-on-Sale Clause
and
(iii) a clause providing
that the Borrower may not take
additional advances under any loan
secured by a lien or
other encumbrance
with priority over any applicable Second
Deed of Trust and
(iv) a waiver of the
Borrower's homestead exemption and
(v)
a clause providing that any default under any lien or
other encumbrance
with priority over any applicable Second
Deed of Trust and/or
the loan such prior lien or
encumbrance secures
is a default under the Eligible Note
and
(c) (i) for an Open-end Equity Loan
(A) under which the Borrower is obligated to
repay a Loan
in monthly
installments of an amount not less than
the interest due
on the outstanding balance of the
Loan and
(B) under which no additional advances may be
made after
a period not to
exceed fifteen (15) years from the
date the Loan
was Consummated and
(C) requiring amortization of the outstanding
balance of
the loan on the
date after which no further advances
may be made as is described in the
preceding
subsection (B)
over a period not to exceed fifteen
(15) years and
(D) with an amortization term of at least twelve
(12)
months and
(E) which allows the Insured to obtain updated
credit and
financial
information periodically after the date the
Loan was
Consummated and
(F) containing, where permitted by law, itself or
in
combination with
the Second Deed of Trust, a clause
which allows the
Insured, upon written notice to the
Borrower as may
be required by law, to reduce or
otherwise limit
the maximum proceeds or line of
credit or
suspend additional draws available to the
Borrower under
the Loan upon either (I) receipt by
the Insured of an appraisal
or other evidence of
value, including
market overviews and market
valuation
systems and techniques, including a
significant
decline in the value of the Property
below the
Property Value or (II) discovery by the
Insured of a
material adverse change in the
Borrower's
financial condition and
(ii) for a Closed-end
Equity Loan
(A) under which the Borrower is obligated to
repay a loan
in positive
amortizing monthly installments of
principal and
interest and
(B) with an amortization term of at least twelve
(12)
months.
1.15 Environmental
Impairment--Environmental Impairment means
environmental contamination,
including nuclear reaction, radioactive
containment, contamination by
toxic waste, chemicals or other
hazardous substance or other
pollution, environmental or similar
hazard (or outstanding claim of
such hazard), not previously
disclosed to and approved in
writing by the Company, affecting the
Property. The term
Environmental Impairment does not include radon,
lead paint or asbestos.
GKA 01/02 Page 3 of 20
<PAGE>
1.16 First Deed of Trust--First Deed
of Trust means a mortgage, deed of
trust, or other instrument which
(a) constitutes or is equivalent to a first lien
or encumbrance on
the Property, subject only
to the Permitted Encumbrances, and
(b) will allow the Person secured thereby, directly
or by a trustee
or other Person, to
foreclose on the Property (by
power-of-sale, judicially
or otherwise) upon default or under
the loan secured thereby
and thereby acquire title to the
Property, subject only to
the Permitted Encumbrances.
1.17 Indemnified
Persons--Indemnified Persons mean the Company and each
of its directors, employees,
agents, successors and assigns.
1.18 Insured--Insured means
(a) the Person designated on the face of this
Policy or
(b) any other Person (i) to whom this Policy has
been assigned, and
(ii) of whom the Company
has been notified, and (iii) to whom
approval has been granted
in accordance with this Policy, but
shall not include the
assignee or purchaser of any individual
Loan insured under this
Policy.
1.19 Insured Loan Amount--Insured
Loan Amount means that amount, with
respect to any Loan, indicated
on the Schedule for such Loan, which
is the original loan amount for
a Closed-end Equity Loan and the
credit limit for an Open-end
Equity Loan.
1.20 Loan--Loan means
(a) a disbursement of proceeds or the opening of
a line of credit
by the Insured or its
predecessor in interest to or for the
benefit of a Borrower who
promises to repay the principal
amount of such
disbursement or any future disbursement under
the line of credit, plus interest, if any, at
a stated annual
rate over time or
(b) an obligation as is described in the
preceding subsection (a),
evidenced by a note which
has been purchased by the Insured or
its predecessor in interest or
(c) refinancing of such an obligation as is
described in the
preceding subsection (a)
by the Insured with or without an
additional disbursement of
proceeds or advance of credit,
which is evidenced, in any
event, by an Eligible Note and which is
covered under this Policy.
1.21 Loan File--Loan File means,
with respect to a Loan, copies of all
documents (including all data
and information in electronic format)
created or received in
connection with the origination and closing
of the Loan, including the Loan
File Documents.
GKA 01/02 Page 4 of 20
<PAGE>
1.22 Loan File Documents--Loan File
Documents mean
(a) the original, fully-completed Loan
application, dated and
signed by the Borrower and
(b) the original credit bureau report on the
Borrower obtained by
the Insured in the Loan
application process and any updated
credit bureau reports on
the Borrower obtained by the Insured
which reports the
appropriate credit scores, if available, and
(c) if applicable, the original verification of
the Borrower's
income obtained by the Insured in
the Loan application process
and
(d) the tax assessment, warranty deed or recorded
land contract for
sale, if applicable,
obtained by the Insured before or at the
time the Loan was Consummated and
(e) the original appraisal, or other evidence of
the Property Value
acceptable to the Company
and
(f) the original Eligible Note and
(g) the original, recorded Second Deed of Trust
and
(h) the original Regulation Z disclosure
statement and
(i) the documentary evidence obtained by the
Insured, before or at
the time the Loan was
Consummated, verifying that the Combined
Loan-to-Value did not exceed the
percentage as set forth in the
Program Criteria which is
applicable to the Loan and
(j) the documentary evidence (such as cancelled
checks or
settlement statement)
verifying that any debts to be paid with
the Loan proceeds were
paid directly by the Insured and
(k) the documentary evidence of the normal and
customary title
search obtained by the
Insured verifying the Loan was, or was
to be immediately after the Loan
was Consummated, secured by a
mortgage, deed of trust,
or other instrument which constituted
or was equivalent to a
Second Deed of Trust and
(1) for a Purchase Money Loan
(i) the original documentary evidence obtain by
the Insured,
before or at the time
the Loan was Consummated, that the
Borrower made the
down payment as disclosed in the Loan
File and
(ii) the original,
fully-completed HUD-1 Settlement Statement,
dated and signed by
the Borrower and
(iii) a copy of the
executed purchase contract and
(m) the original loan history record, maintained
by the Insured in
its normal course of
business, of payments made on the Loan and
(n) the documentary evidence of the Insured's
efforts to effect a
cure of any Default and to
collect the Loan and
(o)
copies of paid bills or receipts for expenses if Default or
foreclosure occurs.
1.23 Loan Loss Percentage--Loan Loss
Percentage means that percentage so
identified on the face of this
Policy.
GKA 01/02 Page 5 of 20
<PAGE>
1.24 Loan Transaction--Loan
Transaction means that transaction between
the Insured or its predecessor
in interest on the Loan and the
Borrower having the
characteristics as set forth in the Certificate.
1.25 Loss--Loss means the liability
of the Company with respect to a Loan
calculated in accordance with
this Policy. A Loss shall be deemed to
have occurred when a Default
occurs, notwithstanding that the amount
of Loss is not then either
presently ascertainable or due and
payable. On and after the date
on which aggregate Losses paid by the
Company and not refunded as
provided by Section 4.3 (Company's
Option to Accelerate Filing of
a Claim) and Section 5.3 (Payment of
Loss) equal the Maximum
Cumulative Liability, the Company shall have
no further obligation to pay a
Loss with respect to Loans insured
under this Policy
notwithstanding the potential for additional
premium to be due with respect
to such Loans.
1.26 Maximum Cumulative
Liability--Maximum Cumulative Liability means an
amount equal to the product of
(a) the Maximum Cumulative Liability Percentage
multiplied by
(b) the Total Insured Amount.
The Maximum Cumulative
Liability shall not be increased by, nor
shall the Insured otherwise
receive any credit for, any recoveries
by the Company from any
Borrower or any other Person in connection
with any payment made by the
Company under this Policy.
1.27 Maximum Cumulative Liability
Percentage--Maximum Cumulative
Liability Percentage means that
percentage so identified on the face
of this Policy.
1.28 Open-end Equity Loan--Open-end
Equity Loan means a loan which
constitutes an open line of
credit up to a predetermined dollar
credit limit against which a
borrower may draw without obtaining
prior approval for each advance
of funds.
1.29 Permitted
Encumbrances--Permitted Encumbrances means only the
following liens, encumbrances,
covenants, conditions, restrictions,
easements and other impediments
to title
(a) any lien established by public bond,
assessment or tax, when no
installment, call or
payment of or under such bond, assessment
or tax is delinquent and
(b) any municipal and zoning ordinances and
exceptions to title
waived by the regulations of federal
mortgage insurers and
guarantors with respect to
mortgages on one-to-four family
residences in effect issue
on the date on which the Loan was
closed and all documents
were executed and
(c) any impediments which will not have a
materially adverse effect
on either the
transferability of the Property or the sale
thereof to a bona fide
purchaser.
1.30 Person--Person means any
individual, corporation, limited liability
company, partnership,
association, or other entity.
1.31 Physical Damage--Physical
Damage means any injury, other than
Environmental Impairment, to
the Property which is tangible, whether
caused by accident or
otherwise, occurring for whatever reason,
GKA 01/02 Page 6 of 20
<PAGE>
including, but not limited to,
physical injury or destruction of
tangible property, defects in
construction, land subsidence, earth
movement or slippage,
earthquake, flood, or any other act of God,
riot, insurrection, civil
s
