FHASI 2005-AR5
MORTGAGE LOAN PURCHASE AGREEMENT
THIS
MORTGAGE LOAN PURCHASE AGREEMENT dated as of September 30, 2005
by
and between FIRST HORIZON HOME LOAN
CORPORATION, a Kansas corporation (the
"Seller"), and FIRST HORIZON ASSET
SECURITIES INC. (the "Purchaser").
WHEREAS,
the Seller owns certain Mortgage Loans (as hereinafter defined)
which Mortgage Loans are more particularly
listed and described in Schedule A
attached hereto and made a part hereof.
WHEREAS,
the Seller and the Purchaser wish to set forth the terms
pursuant
to which the Mortgage Loans, excluding the
servicing rights thereto, are to be
sold by the Seller to the Purchaser.
WHEREAS,
the Seller will simultaneously transfer the servicing rights
for
the Mortgage Loans to First Tennessee
Mortgage Services, Inc. ("FTMSI") pursuant
to the Servicing Rights Transfer and
Subservicing Agreement (as hereinafter
defined).
WHEREAS,
the Purchaser will engage FTMSI to service the Mortgage Loans
pursuant to the Servicing Agreement (as
hereinafter defined).
NOW,
THEREFORE, in consideration of the foregoing, other good and
valuable
consideration, and the mutual terms and
covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
Definitions
Agreement:
This Mortgage Loan Purchase Agreement, as the same may be
amended, supplemented or otherwise modified
from time to time in accordance with
the terms hereof.
Alternative Title Product: Any one of the following: (i) Lien
Protection
Insurance issued by Integrated Loan
Services or ATM Corporation of America, (ii)
a Mortgage Lien Report issued by EPN
Solutions/ACRAnet, (iii) a Property Plus
Report issued by Rapid Refinance Service
through SharperLending.com, or (iv)
such other alternative title insurance
product that the Seller utilizes in
connection with its then current
underwriting criteria.
Business
Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day
on which banking institutions in the City
of Dallas, the State of Texas or New
York City is located are authorized or
obligated by law or executive order to be
closed.
Closing Date:
September 30, 2005
Code: The
Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Cooperative Corporation: The entity that holds title (fee or an
acceptable
leasehold estate) to the real property and
improvements constituting the
Cooperative Property and which governs the
Cooperative Property, which
Cooperative Corporation must qualify as a
Cooperative Housing Corporation under
Section 216 of the Code.
<PAGE>
Coop
Shares: Shares issued by a Cooperative Corporation.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and
a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by
the
Cooperative Corporation, including the
allocation of individual dwelling units
to the holders of the Coop Shares of the
Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative
Property.
Custodian:
First Tennessee Bank National Association, and its successors
and assigns, as custodian under the
Custodial Agreement dated as of September
30, 2005 by and among The Bank of New York,
as trustee, First Horizon Home Loan
Corporation, as master servicer, and the
Custodian.
Cut-Off
Date: September 1, 2005.
Cut-off
Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close
of business on the Cut-off Date.
Debt
Service Reduction: With respect to any Mortgage Loan, a reduction
by
a court of competent jurisdiction in a
proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage
Loan which became final and
non-appealable, except such a reduction
resulting from a Deficient Valuation or
any reduction that results in a permanent
forgiveness of principal.
Deficient
Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the
Mortgaged Property in an amount less than
the then-outstanding indebtedness under the
Mortgage Loan, or any reduction in
the amount of principal to be paid in
connection with any Scheduled Payment that
results in a permanent forgiveness of
principal, which valuation or reduction
results from an order of such court which
is final and non-appealable in a
proceeding under the United States
Bankruptcy Reform Act of 1978, as amended.
Delay
Delivery Mortgage Loans: The Mortgage Loans for which all or a
portion of a related Mortgage File is not
delivered to the Trustee or to the
Custodian on its behalf on the Closing
Date. The number of Delay Delivery
Mortgage Loans shall not exceed 25% of the
aggregate number of Mortgage Loans as
of the Closing Date.
Deleted
Mortgage Loan: As defined in Section 4.1(c) hereof.
Determination Date: The earlier of (i) the third Business Day after
the
15th day of each month, and (ii) the second
Business Day prior to the 25th day
of each month, or if such 25th day is not a
Business Day, the next succeeding
Business Day.
GAAP:
Generally accepted accounting principles as in effect from time
to
time in the United States of America.
2
<PAGE>
Insurance
Proceeds: Proceeds paid by an insurer pursuant to any insurance
policy, including all riders and
endorsements thereto in effect, including any
replacement policy or policies, in each
case other than any amount included in
such Insurance Proceeds in respect of
expenses covered by such insurance policy.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete
liquidation of defaulted Mortgage Loans,
whether through trustee's sale, foreclosure
sale or otherwise or amounts
received in connection with any
condemnation or partial release of a Mortgaged
Property.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of
the State of Delaware, or any successor
thereto.
MERS
Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS
System.
MERS(R)
System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The
Mortgage Identification Number for any MERS Mortgage Loan.
MOM Loan:
Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of
such Mortgage Loan and its successors
and assigns.
Mortgage:
The mortgage, deed of trust or other instrument creating a
first
lien on the property securing a Mortgage
Note.
Mortgage
File: The mortgage documents listed in Section 3.1 pertaining
to
a particular Mortgage Loan and any
additional documents required to be added to
the Mortgage File pursuant to this
Agreement.
Mortgage
Loans: The mortgage loans transferred, sold and conveyed by the
Seller to the Purchaser, pursuant to this
Agreement.
Mortgage
Loan Purchase Price: With respect to any Mortgage Loan required
to be purchased by the Seller pursuant to
Section 4.1(c) hereof, an amount equal
to the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on
the date of such purchase, and (ii) accrued
interest thereon at the applicable
Mortgage Rate from the date through which
interest was last paid by the
Mortgagor to the first day in the month in
which the Mortgage Loan Purchase
Price is to be distributed to the Purchaser
or its designees.
Mortgage
Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of
a Mortgagor under a Mortgage Loan.
Mortgage
Rate: The annual rate of interest borne by a Mortgage Note from
time to time, net of any insurance premium
charged by the mortgagee to obtain or
maintain any primary insurance policy.
3
<PAGE>
Mortgaged
Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop Shares and
Proprietary Lease.
Mortgagor:
The obligor(s) on a Mortgage Note.
Principal
Prepayment:
Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance
of its scheduled Due
Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to
the month of prepayment.
Proprietary Lease:
With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of
related
Coop Shares.
Purchase
Price: $217,852,959.08
Purchaser:
First Horizon Asset Securities Inc., in its capacity as
purchaser of the Mortgage Loans from the
Seller pursuant to this Agreement.
Recognition Agreement:
With respect to any Cooperative Loan, an agreement
between the Cooperative Corporation and the originator of such Mortgage
Loan
which establishes the rights of such
originator in the Cooperative Property.
Scheduled
Payment: The scheduled monthly payment on a Mortgage Loan due
on
the first day of the month
allocable to principal and/or interest on such
Mortgage Loan which, unless otherwise
specified herein, shall give effect to any
related Debt Service Reduction and any Deficient Valuation that affects the
amount of the monthly payment due on such
Mortgage Loan.
Security
Agreement:
The security agreement
with respect to a Cooperative
Loan.
Seller:
First Horizon Home Loan Corporation, a Kansas corporation, and
its
successors and assigns, in its capacity as
seller of the Mortgage Loans.
Servicing
Agreement:
The servicing
agreement,
dated as of November
26,
2002 by and between First Horizon Asset Securities Inc. and its assigns, as
owner, and First Tennessee Mortgage
Services, Inc., as servicer.
Servicing
Rights Transfer and Subservicing Agreement: The servicing
rights
transfer and subservicing agreement, dated as of November 26, 2002 by and
between First Horizon Home Loan
Corporation, as transferor and subservicer, and
First Tennessee Mortgage Services, Inc., as
transferee and servicer.
Stated
Principal Balance: As to any Mortgage Loan, the
unpaid principal
balance of such Mortgage Loan as specified
in the amortization
schedule at the
time relating thereto (before any adjustment to
such amortization
schedule by
reason of any moratorium or similar waiver or
grace period) after giving effect
to any previous partial Principal
Prepayments and Liquidation Proceeds allocable
to principal (other than with respect to any
Liquidated
Mortgage Loan) and
to
the payment of principal due on such date
and irrespective of any delinquency in
payment by the related Mortgagor.
4
<PAGE>
Substitute
Mortgage Loan: A
Mortgage Loan substituted by the Seller for a
Deleted Mortgage Loan which must, on the
date of such
substitution, (i) have
a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of
substitution,
not in excess of, and
not
more than 10% less than the Stated
Principal Balance of the Deleted Mortgage
Loan; (ii) have a Mortgage Rate not
lower than the Mortgage Rate of the Deleted
Mortgage Loan; (iii) have a maximum mortgage rate not more than 1% per
annum
higher or lower than the maximum
mortgage rate of the Deleted Mortgage Loan;
(iv) have a minimum mortgage rate specified in its related
Mortgage Note not
more than 1% per annum higher or lower than the
minimum mortgage rate of the
Deleted Mortgage Loan; (v) have the same mortgage index, reset period and
periodic rate as the Deleted Mortgage Loan and a gross margin
not more than 1%
per annum higher or lower than that of the Deleted Mortgage Loan (vi) be
accruing interest at a rate no lower than
and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iv) have a loan-to-value ratio no
higher than that of the Deleted
Mortgage Loan; (vii) have a remaining term to
maturity no greater than (and not more than one year less than that of)
the
Deleted Mortgage Loan; (viii) not be a Cooperative Loan unless the Deleted
Mortgage Loan was a Cooperative
Loan and (ix) comply
with each
representation
and warranty set forth in Schedule B
hereto.
Trustee:
The Bank of New
York and its
successors
and, if a successor
trustee is appointed hereunder, such
successor.
ARTICLE II
Purchase and Sale
Section
2.1 Purchase Price. In consideration for the payment to it of the
Purchase Price on the Closing Date,
pursuant to written
instructions
delivered
by the Seller to the Purchaser on the Closing Date, the Seller does hereby
transfer, sell and convey to the Purchaser
on the Closing Date, but with effect
from the Cut-off Date, (i) all right, title and interest of the Seller
in the
Mortgage Loans, excluding the servicing rights thereto, and all property
securing such Mortgage Loans, including all interest and
principal received
or
receivable by the Seller with respect to the Mortgage Loans on or after the
Cut-off Date and all interest and principal payments on the Mortgage Loans
received on or prior to the Cut-off Date in
respect of
installments of interest
and principal due thereafter, but not including payments of principal and
interest due and payable on the Mortgage
Loans on or before the
Cut-off Date,
and (ii) all proceeds from the foregoing. Items (i) and (ii) in the
preceding
sentence are herein referred to
collectively as "Mortgage Assets."
Section
2.2 Timing. The sale
of the Mortgage Assets
hereunder shall take
place on the Closing Date.
ARTICLE III
Conveyance and Delivery
Section
3.1 Delivery of Mortgage Files. In connection with the transfer
and assignment set forth in Section 2.1 above, the Seller has delivered or
caused to be delivered to the Trustee or to
the Custodian on its
behalf (or, in
the case of the Delay Delivery Mortgage Loans, will deliver or cause to be
delivered to the Trustee or to the
Custodian on its
behalf within
thirty (30)
days following the Closing Date) the
following documents or
instruments
with
respect to each Mortgage Loan so assigned
(collectively, the "Mortgage Files"):
5
<PAGE>
(a)
(1) the
original Mortgage Note endorsed by manual or facsimile
signature in
blank in the
following form: "Pay to the order of
________________, without recourse," with all intervening
endorsements showing
a complete chain of endorsement from the
originator to the
Person endorsing
the Mortgage Note (each such
endorsement being
sufficient
to transfer all right, title and
interest of the
party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note); or
(2) with respect to any Lost Mortgage Note, a lost note affidavit
from the Seller stating that the original Mortgage Note was lost or
destroyed, together with a copy of such Mortgage Note;
(b)
except as
provided below and for
each Mortgage
Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage or a copy of
such
Mortgage certified by
the Seller as being a true and complete copy
of the Mortgage,
and in the case of
each MERS Mortgage
Loan, the
original Mortgage,
noting the
presence of the MIN of
the Mortgage
Loans and either language indicating that the Mortgage Loan is a
MOM
Loan if the Mortgage
Loan is a MOM Loan or if the Mortgage Loan was
not a MOM Loan
at origination, the original Mortgage and the
assignment thereof to
MERS, with
evidence of recording
indicated
thereon, or a copy of the Mortgage certified by the public
recording
office in which such Mortgage has been recorded;
(c)
a duly
executed assignment of the Mortgage in blank (which
may be
included in a blanket
assignment or
assignments), together
with,
except as provided below, all interim recorded assignments of such
mortgage (each such assignment, when duly and validly completed,
to
be in recordable form and sufficient to effect the assignment of
and
transfer to the
assignee thereof,
under the Mortgage to
which the
assignment relates);
provided that, if the related Mortgage has not
been returned from the
applicable public
recording office, such
assignment of
the Mortgage may exclude the information to be
provided by the recording office;
(d)
the original or copies of each
assumption,
modification,
written
assurance or substitution agreement, if any;
(e)
either the
original or duplicate
original title policy
(including
all riders thereto) with respect to the related Mortgaged
Property,
if available, provided
that the title policy
(including all riders
thereto) will be delivered as soon as it becomes available, and if
the title policy is not available, and to the extent required
pursuant to the second
paragraph below or
otherwise in
connection
with the rating of the Certificates, a written commitment or
interim
binder or preliminary report of the title issued by the title
insurance or escrow company with respect to the Mortgaged
Property,
or, in lieu thereof, an Alternative Title Product; and
6
<PAGE>
(f)
in the case of a
Cooperative
Loan, the originals of the following
documents or instruments:
(1) The Coop
Shares, together with a stock power in blank;
(2) The executed
Security Agreement;
(3) The executed
Proprietary Lease;
(4) The executed
Recognition Agreement;
(5) The
executed UCC-1 financing statement with evidence of
recording thereon which have been filed in all places required
to perfect the
Seller's interest in the Coop Shares and
the
Proprietary Lease; and
(6) Executed
UCC-3 financing
statements or other
appropriate UCC
financing statements
required by state law, evidencing a
complete and unbroken
line from the
mortgagee to the Trustee
with evidence of recording thereon (or in a form suitable
for
recordation).
In the
event that in connection with any Mortgage Loan that is not
a MERS
Mortgage Loan the Seller cannot
deliver (i) the
original recorded
Mortgage or
(ii) all interim recorded assignments
satisfying the
requirements of clause (b)
or (c) above, respectively, concurrently with the execution
and delivery hereof
because such document or documents
have not been
returned from the
applicable
public recording office, the Seller shall promptly deliver or cause to be
delivered to the Trustee or the Custodian
on its behalf such
original Mortgage
or such interim assignment, as the case may be, with
evidence of recording
indicated thereon upon receipt thereof from
the public recording
office, or a
copy thereof, certified, if appropriate,
by the relevant
recording office, but
in no event shall any such delivery of the original Mortgage and each such
interim assignment or a copy thereof,
certified, if appropriate, by the relevant
recording office, be made later than one year following the Closing Date;
provided, however, in the event the Seller is unable
to deliver or cause to be
delivered by such date each Mortgage and
each such interim
assignment by reason
of the fact that any such documents have not been returned by the
appropriate
recording office, or, in the case of each
such interim
assignment, because
the
related Mortgage has not been returned by
the appropriate
recording office, the
Seller shall deliver or cause to be
delivered such
documents to the
Trustee or
the Custodian on its behalf as promptly as
possible upon receipt thereof and, in
any event, within 720 days following the Closing Date; provided, further,
however, that the Seller shall not be required to provide an original or
duplicate lender's title policy (together
with all riders thereto) if the Seller
delivers an Alternative Title Product in
lieu thereof. T
