EXECUTION
MORTGAGE LOAN PURCHASE
AGREEMENT
This Mortgage Loan Purchase Agreement (the
“Agreement”), dated as of October 1, 2006, is between
HSI Asset Securitization Corporation, a Delaware corporation (the
“Company”), and HSBC Bank USA, National Association, a
national banking association (the “Seller”).
The Company and the Seller hereby recite and
agree as follows:
1. Defined Terms . Terms used without definition herein shall
have the respective meanings assigned to them in the Pooling and
Servicing Agreement, dated as of October 1, 2006, by and among HSI
Asset Securitization Corporation, as depositor, Wells Fargo Bank,
N.A., as master servicer, securities administrator and custodian
(in such capacity, the “Custodian”), Clayton Fixed
Income Services Inc., as credit risk manager, and Deutsche Bank
National Trust Company, as trustee (the “ Trustee
”), relating to the issuance of the HSI Asset Securitization
Corporation Trust 2006-HE1 Mortgage Pass-Through Certificates,
Series 2006-HE1 (the “Pooling and Servicing
Agreement”). Unless otherwise defined herein, capitalized
terms used herein shall have the same meanings assigned to them in
the Pooling and Servicing Agreement.
2. Purchase of Mortgage Loans
. The Seller hereby sells,
transfers, assigns and conveys, and the Company hereby purchases
the mortgage loans (the “Mortgage Loans”) listed on the
Mortgage Loan Schedule in Exhibit 1 .
3. Purchase Price; Purchase and Sale
. The purchase price (the
“Purchase Price”) for the Mortgage Loans shall be
$1,302,565,110.67 inclus ive of
accrued and unpaid interest on the Mortgage Loans at the weighted
average interest rate borne by the Mortgage Loans from the date
hereof to but not including the Closing Date, payable by the
Company to the Seller on the Closing Date either (i) by appropriate
notation of an inter-company transfer between affiliates of HSBC or
(ii) in immediately available federal funds wired to such bank as
may be designated by the Seller.
Upon payment of the Purchase Price, the Seller
shall be deemed to have transferred, assigned, set over and
otherwise conveyed to the Company all the right, title and interest
of the Seller in and to the Mortgage Loans as of the Cut-Off Date,
including all interest and principal due on the Mortgage Loans
after the Cut-Off Date (including Scheduled Payments due after the
Cut-Off Date but received by the Seller on or before the Cut-Off
Date, but not including payments of principal and interest due on
the Mortgage Loans on or before the Cut-Off Date), together with
all of the Seller’s right, title and interest in and to the
proceeds of any related title, hazard, primary mortgage or other
insurance policies.
Concurrently with the execution and delivery of
this Agreement, the Seller hereby assigns to the Company all of its
rights and interest (but none of its obligations) under the (i)
Servicing Agreements and (ii) Assignment, Assumption and
Recognition Agreements listed on Exhibit 2 hereto (the
“Assignment Agreements”), to the extent relating to the
Mortgage Loans. The Company hereby accepts such assignment, and
shall be entitled to exercise all such rights of the Seller under
the Servicing Agreements and the Assignment Agreements as if the
Company had been a party to such agreement.
The Company hereby acknowledges its acceptance
of all right, title and interest in, to and under the Mortgage
Loans and other property, and its rights under the Servicing
Agreements and the Assignment Agreements, now existing or hereafter
created, conveyed to it pursuant to this Section 3.
The Company hereby directs the Seller, and the
Seller hereby agrees, to deliver to the Trustee all documents,
instruments and agreements required to be delivered by the Company
to the Trustee under the Pooling and Servicing Agreement and such
other documents, instruments and agreements as the Company or the
Trustee shall reasonably request.
4. Representations and Warranties
. The Seller hereby represents and
warrants to the Company with respect to each Mortgage Loan in
either Loan Group as of the date hereof and as of the Closing Date
as follows:
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(a)
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With respect to
each Mortgage Loan, as of the date hereof and as of the Closing
Date:
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(1)
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The Seller has
good title to the Mortgage Loans and the Mortgage Loans were
subject to no offsets, defenses or counterclaims.
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(2)
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The information
set forth in the Mortgage Loan Schedule is complete, true and
correct as of the Cut-off Date.
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(3)
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The Mortgaged
Property is free of material damage and waste and there is no
proceeding pending for the total or partial condemnation of the
Mortgaged Property.
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(4)
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From and after
the Cut-off Date, there have been no delinquent taxes, ground
rents, water charges, sewer rents, assessments, insurance premiums,
leasehold payments or other outstanding charges affecting the
related Mortgaged Property.
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(5)
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From and after
the Cut-off Date, the terms of the Mortgage Note and the Mortgage
have not been impaired, waived, altered or modified in any respect,
except by written instruments, recorded in the applicable public
recording office if necessary to maintain the lien priority of the
Mortgage, and which have been delivered to the Trustee on behalf of
the Company; the substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent
required by the related policy, and is reflected on the Mortgage
Loan Schedule. No instrument of waiver, alteration or modification
has been executed, and no borrower has been released, in whole or
in part, except in connection with an assumption agreement approved
by the title insurer, to the extent required by the policy, and
which assumption agreement has been delivered to the Custodian and
the terms of which are reflected in the Mortgage Loan
Schedule.
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(6)
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All buildings
upon the Mortgaged Property are insured by an insurer against loss
by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, in
an amount not less than (i) 100.00% of the replacement cost of
all improvements to the Mortgaged Property, (ii) either (A) the
outstanding principal balance of the Mortgage Loan with respect to
each first lien Mortgage Loan or (B) with respect to each second
lien Mortgage Loan, the sum of the outstanding principal balance of
the related first lien Mortgage Loan and the outstanding principal
balance of the second lien Mortgage Loan, (iii) the amount
necessary to avoid the operation of any co-insurance provisions
with respect to the Mortgaged Property, and consistent with the
amount that would have been required as of the date of origination
in accordance with the underwriting guidelines or (iv) the
amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost
basis. All such insurance policies contain a standard mortgagee
clause naming the originator, its successors and assigns as
mortgagee and all premiums thereon have been paid. If the Mortgaged
Property is in an area identified on a Flood Hazard Map or Flood
Insurance Rate Map issued by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance
has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the
requirements of Fannie Mae and Freddie Mac. The Mortgage obligates
the borrower thereunder to maintain all such insurance at the
borrower’s cost and expense, and on the borrower’s
failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at borrower’s cost and expense and to seek
reimbursement therefor from the Mortgagor.
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(7)
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The Mortgage
has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release.
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(8)
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The Mortgage is
a valid, existing and enforceable first or second lien (as
indicated on the Mortgage Loan Schedule) on the Mortgaged Property,
including all improvements on the Mortgaged Property subject only
to (a) the lien of current real property taxes and assessments
not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of the
public record as of the date of recording being acceptable to
mortgage lending institutions generally and specifically referred
to in the lender’s title insurance policy delivered to the
Originator of the Mortgage Loan and which do not materially and
adversely affect the Appraised Value of the Mortgaged Property,
(c) to the extent the Mortgage Loan is a second lien Mortgage
Loan (as reflected on the Mortgage Loan Schedule), the related
first lien on the Mortgaged Property and (d) other matters to which
like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of
the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid,
existing and enforceable first or second lien and first or second
priority security interest (in each case, as indicated on the
Mortgage Loan Schedule) on the property described therein and the
Seller has full right to sell and assign the same to the
Company.
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(9)
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From and after
the date the Mortgage Loan was purchased by the Seller from the
related Mortgage Loan Seller (the “Initial Sale Date”),
and immediately prior to the transfer and assignment of each
Mortgage Loan by the Seller to the Company, the Seller was the sole
legal, beneficial and equitable owner of the Mortgage Note and the
Mortgage. The Seller has full right to transfer and sell the
Mortgage Loan to the Company free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security
interest.
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(10)
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There is no
default, breach, violation or event of acceleration existing under
the Mortgage or the Mortgage Note, no event which, with the passage
of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach,
violation or event of acceleration. With respect to each second
lien Mortgage Loan, (i) the first lien Mortgage Loan is in full
force and effect, (ii) there is no default, breach, violation or
event of acceleration existing under such first lien Mortgage or
the related Mortgage Note, (iii) no event which, with the passage
of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation, or event of
acceleration thereunder, (iv) either (A) the first lien Mortgage
contains a provision which allows or (B) applicable law requires,
the mortgagee under the second lien Mortgage Loan to receive notice
of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the first lien Mortgage, (v)
the related first lien does not provide for or permit negative
amortization under such first lien Mortgage Loan and (vi) either no
consent for the Mortgage Loan is required by the holder of the
first lien or such consent has been obtained and is contained in
the Mortgage File.
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(11)
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From and after
the Cut-off Date, no mechanics’ or similar liens or claims
have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such lien) affecting
the related Mortgaged Property which are or may be liens prior to,
or equal or coordinate with, the lien of the related
Mortgage.
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(12)
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Since Initial
Sale Date of the Mortgage Loan, the Mortgaged Property has not been
subject to any bankruptcy proceeding or foreclosure proceeding and
the Mortgagor has not filed for protection under applicable
bankruptcy laws. There is no homestead or other exemption available
to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee’s sale or the right to
foreclose the Mortgage. The Mortgagor has not notified the Seller
and the Seller has no knowledge of any relief requested by the
borrower under the Servicemembers Civil Relief Act.
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(13)
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To the
Seller’s knowledge, the Mortgaged Property is in material
compliance with all applicable environmental laws pertaining to
environmental hazards including, without limitation, asbestos, and
neither the Seller nor, to the Seller’s knowledge, the
related Mortgagor, has received any notice of any violation or
potential violation of such law.
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(14)
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There is no
Mortgage Loan that was o
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