FHAMS
2006-FA7
MORTGAGE LOAN PURCHASE
AGREEMENT
THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as
of October 30, 2006 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 : October 30, 2006
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.
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 October 30, 2006 by and among The Bank of New
York, as trustee, First Horizon Home Loan Corporation, as master
servicer, and the Custodian.
Cut-Off Date : October 1, 2006.
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 25 th day of each month, or if such 25
th 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.
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® 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.
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 : $ 216,310,256.61
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.
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; (vii) have a loan-to-value ratio no higher than that
of the Deleted Mortgage Loan; (viii) have a remaining term to
maturity no greater than (and not more than one year less than that
of) the Deleted Mortgage Loan; (ix) not be a Cooperative Loan
unless the Deleted Mortgage Loan was a Cooperative Loan and (x)
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”):
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(a)
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(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
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(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;
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(b)
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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;
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(c)
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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;
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(d)
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the original or
copies of each assumption, modification, written assurance or
substitution agreement, if any;
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(e)
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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
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(f)
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in the case of
a Cooperative Loan, the originals of the following documents or
instruments:
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(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. The Seller
shall forward or cause to be
