SURETY BOND

 

Financial Guaranty Insurance Company

125 Park Avenue

New York, New York 10017

(212) 312-3000 (800) 352-0001

 

SURETY BOND

 

Form 9133

Page 1 of 5

 

Issuer:                                         GMACM Home Equity Loan

Policy Number:  04030006

      Trust 2004-HE1                            Control Number:  0010001

 

Insured Obligations:

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$1,259,311,000  in  aggregate  maximum  principal  amount of GMACM  Home  Equity

Loan-Backed Term Notes, Series 2004-HE1,  Class A-1, Class A-2 and Class A-3 and

GMACM Home Equity  Loan-Backed  Variable Pay Revolving  Notes,  Series 2004-HE1,

(collectively, the "Notes")

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Indenture Trustee:  Wells Fargo Bank, N.A.

 

Financial Guaranty Insurance Company  ("Financial  Guaranty"),  a New York stock

insurance  company,  in  consideration  of the right of  Financial  Guaranty  to

receive  monthly  premiums  pursuant to the Indenture (as defined below) and the

Insurance Agreement referred to therein, and subject to the terms of this Surety

Bond, hereby  unconditionally and irrevocably agrees to pay each Insured Amount,

to the extent set forth in the Indenture,  to the Indenture  Trustee named above

or its successor,  as trustee for the Holders of the Notes,  except as otherwise

provided herein with respect to Preference  Amounts.  Capitalized terms used and

not otherwise  defined herein shall have the meanings  assigned to such terms in

the Annex A attached  to the  Indenture  as in effect and  executed  on the date

hereof.

 

The term "Insured  Amount" for any Payment Date means (1) any Deficiency  Amount

for such  Payment  Date and the Notes and (2) any  Preference  Amount to be paid

pursuant to the terms of this Surety Bond on the Payment  Date in respect of the

Notes.

 

The term  "Deficiency  Amount"  means,  with respect to any Payment Date and the

Notes, as applicable, an amount, if any, equal to the sum of:

 

      (1)    the amount by which the aggregate amount of accrued interest on the

             Notes,  excluding any Relief Act  Shortfalls for that Payment Date,

             at the  respective  Note Rates on that  Payment  Date  exceeds  the

             amount  on  deposit  in the  Note  Payment  Account  available  for

             interest distributions on the Notes on that Payment Date; and

 

      (2)    (i) with respect to any Payment Date that is not the Final  Payment

             Date,  any  Liquidation  Loss Amount with  respect to the  Mortgage

             Loans for that Payment Date, to the extent not  distributed as part

             of the Principal Distribution Amount to the Holders of the Notes on

             such Payment Date or deposited into the Funding  Account as part of

             the Principal  Distribution Amount for such Payment Date or applied

             to reduce the Overcollateralization Amount on such Payment Date; or

 

 

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             (ii) on the Final Payment Date, the aggregate outstanding principal

             balance of the Notes to the extent otherwise not paid on that date.

 

The term "Final Payment Date" for each Class of the Notes means the Payment Date

occurring in June, 2034.

 

Financial  Guaranty  will pay a  Deficiency  Amount with respect to the Notes by

12:00 noon (New York City Time) in immediately  available funds to the Indenture

Trustee on the later of (i) the second  Business Day  following the Business Day

on which Financial  Guaranty shall have received Notice that a Deficiency Amount

is due in respect of the Notes,  and (ii) the Payment  Date on which the related

Deficiency  Amount  is  payable  to the  Holders  of the Notes  pursuant  to the

Indenture,  for  disbursement  to the Holders of the Notes in the same manner as

other  payments  with respect to the Notes are  required to be made.  Any Notice

received by  Financial  Guaranty  after 12:00 noon New York City time on a given

Business  Day or on any day that is not a  Business  Day shall be deemed to have

been received by Financial Guaranty on the next succeeding Business Day.

 

Upon payment of a Deficiency Amount hereunder, Financial Guaranty shall be fully

subrogated  to the rights of the  Holders of the Notes to receive  the amount so

paid. Financial Guaranty's  obligations with respect to the Notes hereunder with

respect to each Payment Date shall be discharged to the extent funds  consisting

of the related Deficiency Amount are received by the Indenture Trustee on behalf

of the  Holders of the Notes for  payment to such  Holders,  as  provided in the

Indenture  and  herein,  whether or not such funds are  properly  applied by the

Indenture Trustee.

 

If any  portion  or all of  any  amount  that  is  insured  hereunder  that  was

previously  distributed to a holder of Notes is  recoverable  and recovered from

such Holder as a voidable  preference by a trustee in bankruptcy pursuant to the

U.S.  Bankruptcy  Code,  pursuant  to a final  non-appealable  order  of a court

exercising  proper  jurisdiction  in an insolvency  proceeding (a "Final Order")

(such recovered amount, a "Preference  Amount"),  Financial Guaranty will pay on

the guarantee  described in the first paragraph  hereof, an amount equal to each

such  Preference  Amount by 12:00  noon on the  second  Business  Day  following

receipt by Financial  Guaranty on a Business Day of (x) a certified  copy of the

court order  requiring  the return of the  Preference  Amount,  together with an

opinion of counsel  satisfactory  to Financial  Guaranty that the order is final

and not  subject  to  appeal  (a  "Final  Order"),  (y) an  assignment,  in form

reasonably   satisfactory  to  Financial  Guaranty,   irrevocably  assigning  to

Financial  Guaranty all rights and claims of the Indenture  Trustee  and/or such

Holder of the Notes  relating to or arising  under any Notes  against the debtor

who paid such Preference Amount and constituting an appropriate  instrument,  in

form satisfactory to Financial  Guaranty,  appointing  Financial Guaranty as the

agent of the Indenture  Trustee and/or such Holder in respect of such Preference

Amount,  including  without  limitation in any legal  proceeding  related to the

Preference Amount, and (z) a Notice appropriately  completed and executed by the

Indenture Trustee or such Holder, as the case may be. Such payment shall be made

to the  receiver,  conservator,  debtor-in-possession  or trustee in  bankruptcy

named in the Final Order and not to the Indenture Trustee or Holder of the Notes

directly  (unless the Holder has  previously  paid such amount to such receiver,

conservator,  debtor-in-possession or trustee named in such Final Order in which

 

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case payment  shall be made to the  Indenture  Trustee for  distribution  to the

Holder  upon  delivery  of  proof of such  payment  reasonably  satisfactory  to

Financial Guaranty).  Notwithstanding the foregoing, in no event shall Financial

Guaranty be (i)  required to make any payment  under this Surety Bond in respect

of any Preference  Amount to the extent such  Preference  Amount is comprised of

amounts  previously paid by Financial Guaranty