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ASSET BACKED FUNDING CORPORATION
as Purchaser
and
BANK OF AMERICA, NATIONAL ASSOCIATION
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Fixed and Adjustable Rate Mortgage Loans
ABFC 2006-HE1 Trust
Asset-Backed Certificates, Series 2006-HE1
Dated as of November 1, 2006
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS..........................................................3
Section 1.01.
Definitions...................................................3
ARTICLE II SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE
PRICE...................3
Section 2.01.
Sale of Mortgage Loans........................................3
Section 2.02.
Obligations of Seller Upon Sale...............................3
Section 2.03.
Payment of Purchase Price for the Mortgage Loans..............5
Section 2.04.
Regulation AB Compliance......................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES FOR
BREACH................6
Section 3.01.
Representations and Warranties Relating to the Mortgage Loans.6
Section 3.02.
Seller Representations and Warranties........................11
ARTICLE IV SELLER'S
COVENANTS.................................................12
Section 4.01.
Covenants of the Seller......................................12
ARTICLE V
TERMINATION.........................................................13
Section 5.01.
Termination..................................................13
ARTICLE VI MISCELLANEOUS
PROVISIONS...........................................13
Section 6.01.
Amendment....................................................13
Section 6.02.
Governing Law................................................13
Section 6.03.
Notices......................................................13
Section 6.04.
Severability of Provisions...................................14
Section 6.05.
Counterparts.................................................14
Section 6.06.
Further Agreements...........................................14
Section 6.07.
Intention of the Parties.....................................14
Section 6.08.
Successors and Assigns; Assignment of this Agreement.........15
Section 6.09.
Survival.....................................................15
Schedule I Option One
Mortgage Loan Schedule
Schedule II Ameriquest
Mortgage Loan Schedule
Schedule III Accredited
Mortgage Loan Schedule
Schedule IV
C-BASS Mortgage Loan Schedule
Schedule V
NC Capital Mortgage Loan Schedule
Schedule VI WMC
Mortgage Loan Schedule
Schedule VII Mortgage
Loan Schedule (Group 1)
Schedule VIII Mortgage Loan
Schedule (Group 2)
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MORTGAGE LOAN
PURCHASE AGREEMENT, dated as of November 1, 2006 (the
"Agreement"), between
BANK OF AMERICA,
NATIONAL ASSOCIATION ("Bank of America"
or the "Seller") and ASSET BACKED FUNDING CORPORATION (the
"Purchaser").
W I T N E S S E T H:
WHEREAS, pursuant to the Flow Sale and Servicing Agreement (the
"Option One
Sale and Servicing Agreement"), dated as of July 28, 2006, by and
among Bank of
America, as the
purchaser,
Option One
Mortgage Corporation, as company and
seller ("Option
One"), and Option One Owner Trust
2001-1A, Option One Owner
Trust 2001-1B,
Option One Owner Trust
2001-2, Option One Owner Trust 2002-3,
Option One Owner Trust 2003-4, Option One Owner Trust 2003-5,
Option One Owner
Trust 2005-6, Option
One Owner Trust 2005-7, Option One Owner Trust 2005-8
and
Option One Owner Trust 2005-9 (collectively, the "Option One Owner Trusts"),
as
sellers, and the related Memorandum of Sale, dated October 30, 2006
(the "Option
One Memorandum of Sale"), among Bank of America,
Option One and the
Option One
Owner Trusts, the
Seller is the owner of either the notes or other evidence of
indebtedness (the "Option One Mortgage Notes") or other evidence of
ownership so
indicated on
Schedule I hereto, and the other documents or instruments
constituting the Mortgage File (collectively, the "Option One
Mortgage Loans");
WHEREAS, pursuant to
the Master Mortgage
Loan Purchase Agreement (the
"Ameriquest Sale and
Servicing Agreement"),
dated as of September
1, 2006, by
and between Bank of America, as the purchaser, and Ameriquest Mortgage
Company,
as the seller
("Ameriquest"),
and the related Memorandum of Sale, dated
September 7, 2006 (the "Ameriquest Memorandum of Sale"), by and
between Bank of
America and
Ameriquest,
the Seller is the owner of either the
notes or other
evidence of indebtedness (the "Ameriquest Mortgage Notes") or other evidence
of
ownership so
indicated on Schedule II hereto, and the other documents or
instruments
constituting the
Mortgage File (collectively, the "Ameriquest
Mortgage Loans");
WHEREAS, pursuant to
the Flow Sale and Interim Servicing Agreement (the
"Accredited Sale and
Servicing Agreement"),
dated as of September
1, 2006, by
and between Bank of America, as the purchaser, and Accredited Home Lenders,
Inc., as the seller
("Accredited"),
and the related the
Memorandum
of Sale,
dated September 28, 2006 (the "Accredited Memorandum of Sale"), by and between
Bank of America and
Accredited, the Seller
is the owner of either the notes or
other evidence
of indebtedness (the "Accredited Mortgage Notes") or other
evidence of
ownership so indicated on Schedule III hereto, and the other
documents or
instruments
constituting the
Mortgage File
(collectively,
the
"Accredited Mortgage Loans");
WHEREAS, pursuant to the Mortgage Loan Purchase Agreement (the
"C-BASS Sale
and Servicing Agreement"), dated as of September 1, 2006, by and
between Bank of
America, as the
purchaser, and
Credit-Based Asset Servicing and Securitization
LLC, as the
seller ("C-BASS"), and the related Memorandum of Sale, dated
September 28, 2006
(the "C-BASS
Memorandum of Sale"),
by and between Bank
of
America and
C-BASS, the Seller is the owner of either the notes or other
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evidence of
indebtedness (the
"C-BASS Mortgage
Notes") or other
evidence of
ownership so
indicated on Schedule IV hereto, and the other documents or
instruments
constituting the Mortgage File (collectively, the "C-BASS Mortgage
Loans");
WHEREAS, pursuant to the Flow Sale and Interim Servicing Agreement
(the "NC
Capital Sale and
Servicing Agreement"),
dated as of September
1, 2006, by and
between Bank of America, as the purchaser, and NC Capital Corp., as the
seller
("NC Capital") and the related Memorandum of Sale, dated
September 7, 2006 (the
"NC Capital Memorandum of Sale"), by and between Bank of America
and NC Capital,
the Seller is the owner of either the notes or other evidence of indebtedness
(the "NC Capital Mortgage Notes") or other evidence of ownership so
indicated on
Schedule V hereto, and
the other documents
or instruments constituting the
Mortgage File (collectively, the "NC Capital Mortgage Loans");
WHEREAS, pursuant to
the Flow Sale and Interim Servicing Agreement (the
"WMC Sale and
Servicing Agreement"
and together
with the Option One
Sale and
Servicing Agreement, the Ameriquest Sale and Servicing Agreement,
the Accredited
Sale and Servicing Agreement, the C-BASS Sale and Servicing
Agreement and the NC
Capital Sale and
Servicing Agreement,
the "Sale and
Servicing Agreements"),
dated as of October 1, 2006, by and between Bank of America,
as the purchaser,
and WMC Mortgage Corp., as the seller ("WMC") and the related
Memoranda of Sale,
dated October 25, 2006 and November 27, 2006 (collectively, the "WMC Memoranda
of Sale" and together
with the Option One
Memorandum of Sale,
the Ameriquest
Memorandum of Sale, the Accredited Memorandum of Sale, the C-BASS
Memorandum of
Sale and the NC Capital Memorandum of Sale, the
"Memoranda of Sale"),
each by
and between Bank of America and WMC Mortgage, the Seller is the owner of
either
the notes or other evidence of indebtedness (the "WMC Mortgage Notes") or
other
evidence of
ownership so indicated on Schedule VI hereto, and the other
documents or instruments constituting the Mortgage File
(collectively, the
"WMC
Mortgage Loans" and together with the Option One Mortgage Loans,
the Ameriquest
Mortgage Loans, the Accredited Mortgage Loans, the C-BASS Mortgage
Loans and the
NC Capital Mortgage Loans, the "Mortgage Loans");
WHEREAS, the
Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on
the related real properties (the "Mortgaged Properties")
securing such Mortgage Loans, including rights (a) to any
property acquired
by
foreclosure or deed in lieu of foreclosure or otherwise, and (b) to
the proceeds
of any insurance policies covering the Mortgage Loans or the Mortgaged
Properties or the obligors on the Mortgage Loans;
WHEREAS, the parties
hereto desire that the Seller sell the Mortgage Loans
to the Purchaser and the Purchaser purchase the Mortgage Loans from the Seller
pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement, dated
as of November
1, 2006 (the
"Pooling and Servicing Agreement"), among the
Purchaser, as
depositor,
Option One, as a servicer, JPMorgan Chase Bank,
National Association,
as a servicer,
Litton Loan Servicing
LP, as a servicer,
Wells Fargo Bank,
N.A., as master
servicer (the "Master Servicer") and as
securities
administrator (the
"Securities
Administrator"),
and U.S. Bank
National Association,
as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to ABFC 2006-HE1 Trust.
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NOW,
THEREFORE, in
consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
All
capitalized
terms used but not
defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of Mortgage Loans.
The
Seller does hereby agree to and does hereby sell, assign, set over,
and
otherwise convey to the Purchaser, without recourse, on the Closing
Date (i) all
of its right, title
and interest in and to each Mortgage Loan and the related
Cut-off Date Principal Balance thereof, including any Related Documents; (ii)
all payments on or
collections in respect
of the Mortgage Loans
due after the
Cut-off Date; (iii) property which secured such Mortgage Loan and
which has been
acquired by foreclosure or deed in lieu of foreclosure; (iv) its
interest in any
insurance policies
in respect
of the Mortgage Loans; (v) the rights of the
Seller under the
Consulting
Agreement;
and (vii) all
proceeds of any of
the
foregoing.
Section 2.02. Obligations of Seller Upon Sale.
In
connection with any transfer pursuant to Section 2.01 hereof, the
Seller
further agrees,
at its own expense,
on or prior to the
Closing Date,
(x) to
indicate in its books and records that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement and (y) to deliver to the
Purchaser and the
Trustee two
computer files containing true and complete lists of all the
Mortgage Loans specifying, among other things, for each Mortgage
Loan, as of the
Cut-off Date, its account number and Cut-off Date Principal
Balance. Such
files
(the "Mortgage Loan Schedules"), which are set forth on Exhibits
D-1 and D-2 to
the Pooling and
Servicing Agreement,
shall also be marked
as Schedule VII and
Schedule VIII, respectively, to this Agreement and are hereby
incorporated into
and made a part of this Agreement.
In connection with
such transfer and assignment of the Mortgage Loans, the
Seller shall, on behalf of the Purchaser, deliver and deposit with the
Trustee,
or the Custodian on behalf of the Trustee, the following documents or
instruments (with respect to each Mortgage Loan, a "Mortgage File")
with respect
to each Mortgage Loan so transferred and assigned:
(i) the original Mortgage Note, including any riders thereto,
endorsed
in
blank, or with respect to any lost Mortgage Note, a Lost Note
Affidavit,
together with a copy of the related Mortgage Note;
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(ii) the original Mortgage with evidence of recording thereon
including any riders thereto, and the original recorded power of
attorney,
if
the Mortgage was executed pursuant to a power of attorney, with
evidence
of
recording thereon or, if such Mortgage or power of attorney
has been
submitted for
recording but has not been returned from the applicable
public recording
office, has been lost
or is not otherwise
available, a
copy
of such Mortgage or power of attorney, as the case may be, certified
to
be a true and complete copy of the original submitted for
recording;
(iii) an original
Assignment, in form
and substance
acceptable for
recording. The Assignment shall be assigned in blank;
(iv) an original copy of any intervening Assignment showing a
complete
chain of assignments;
(v) the original or a certified copy of the lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
If
any of the documents
referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but
either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of
such document,
the obligations of the
Seller to deliver such
documents shall be
deemed to be
satisfied upon (1)
delivery to the Trustee, or the Custodian on behalf of the
Trustee, no later
than the Closing Date, of a copy of each such document
certified by the related Originator, the Seller, title company, escrow
agent or
closing attorney in
the case of (x) above or the applicable public recording
office in the case of (y) above to be a true and complete copy of the original
that was submitted
for recording and (2) if such copy is certified by the
Seller, delivery to
the Trustee,
or the Custodian on behalf of the Trustee,
promptly upon receipt
thereof of either the original or a copy of such document
certified by the applicable public recording office to be a true and
complete
copy of the original.
If the original
lender's title insurance policy was not
delivered pursuant to
Section 2.02(v) above,
the Seller shall deliver or cause
to be delivered to the
Trustee, or the
Custodian on behalf of
the Trustee, a
written commitment or
interim binder or
preliminary report of
title issued by
the title insurance or escrow company, with the original to be delivered
to the
Trustee, or the
Custodian on behalf of the Trustee, promptly upon receipt
thereof. The Seller
shall deliver or cause
to be delivered to the Trustee, or
the Custodian on behalf of the Trustee, promptly upon receipt thereof any
other
documents constituting
a part of a Mortgage
File received with
respect to any
Mortgage Loan, including, but not limited to, any original
documents evidencing
an assumption or modification of any Mortgage Loan. The Assignments
referred to
in Section 2.02(iii) above are not required to be recorded by the
Seller.
Upon
discovery or receipt
of notice of any materially defective document
in, or that a document
is missing
from, a Mortgage File, or is materially
mutilated, damaged or
torn, the Seller shall
have 120 days to cure such defect
or deliver such
missing document to
the Trustee or the
Custodian on behalf of
the Trustee (or 90 days after the earlier of Seller's discovery or receipt of
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notification if such
defect would cause the related Mortgage Loan not to be a
"qualified mortgage" for REMIC purposes) or 150 days following the
Closing Date,
in the case of missing
Mortgages or Assignments, or deliver such missing
document to the Trustee or the Custodian on behalf of the Trustee.
If the Seller
does not cure such
defect or deliver such
missing document within such time
period, the Seller
shall either repurchase or substitute for such Mortgage Loan
in accordance with Section 2.03 of the Pooling and Servicing
Agreement.
It
is understood and agreed that the obligations of the Seller set
forth in
this Section 2.02 to cure, repurchase or substitute for a defective Mortgage
Loan constitute
the sole remedies of
the Purchaser
respecting a defective
or
missing document.
The
Purchaser hereby
acknowledges its
acceptance of all right, title and
interest to the Mortgage Loans and other property, now existing and hereafter
created, conveyed to it pursuant to Section 2.01.
The
parties hereto intend that the transaction set forth herein be a sale
by the Seller to the Purchaser of all the Seller's right,
title and interest
in
and to the Mortgage Loans and other property described above. In the event the
transaction set forth
herein is deemed
not to be a sale,
the Seller hereby
grants to the Purchaser a security interest in all of the Seller's
right, title
and interest in, to and under the Mortgage Loans and other property described
above, whether now
existing or hereafter created, to secure all of the Seller's
obligations hereunder;
and this Agreement shall constitute a security agreement
under applicable
law. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be
necessary to ensure
that, if this
Agreement were deemed to create a security interest in the
Mortgage Loans,
such security interest would be deemed to be a perfected
security interest of
first priority under applicable law and will be maintained
as such throughout the term of the Pooling and Servicing
Agreement.
Section 2.03. Payment of Purchase Price for the Mortgage Loans.
In
consideration
of the sale of the
Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees (i) to pay to the Seller
on
the Closing Date by transfer of immediately available funds, as directed by
the
Seller, an amount equal to $[______________], and (ii) to deliver to or at
the
direction of the
Seller on the Closing
Date, a 100% interest in each of the
Class R Certificates
and the Class R-X Certificates (clauses (i) and (ii)
together, the
"Purchase Price").
The Seller shall pay,
and be billed directly
for, all reasonable
expenses incurred by
the Purchaser in connection with the
issuance of the
Certificates,
including, without
limitation,
printing fees
incurred in connection with the prospectus relating to the Certificates, blue
sky registration fees and expenses, fees and reasonable expenses of
Purchaser's
counsel, fees
of the rating agencies requested to rate the Certificates,
accountant's fees and expenses and the fees and expenses of the
Trustee, Master
Servicer and Securities Administrator and other out-of-pocket
costs, if any.
Section 2.04. Regulation AB Compliance.
For
so long as the Securities Administrator is required to file
any report
with the Commission
pursuant to Section 3.33 of the Pooling and Servicing
Agreement, the Seller
shall furnish to the
Securities
Administrator, on
each
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Distribution Date,
the "significance estimate" of the Interest Rate Swap
Agreement, in each case calculated in accordance with Item 1115 of
Regulation AB
as of such Distribution Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01.
Representations
and Warranties Relating to the Mortgage
Loans.
The
representations
and warranties
with respect to the
Mortgage Loans in
the related
Sale and Servicing Agreement were made as of the dates of the
related Memorandum or
Memoranda of Sale. The Seller's right, title and interest
in such
representations and warranties and the remedies in connection
therewith
have been assigned by
the Seller to the Company and by the Company to the Trust
in various assignment,
assumption and recognition agreements among the Seller,
the Company, the Master Servicer, the Trustee and the various
Originators.
In
addition, the Seller
hereby assumes, on and after September 8, 2007, the
obligations of Ameriquest with respect to the mortgage loan
representations made
by Ameriquest in
Section 3.03 of the
Ameriquest Sale and
Servicing
Agreement
(the "Ameriquest Representations and Warranties"). To the extent that any fact,
condition or event with respect to a Mortgage Loan constitutes a breach of both
(i) a representation
or warranty of an Originator under the applicable Sale and
Servicing Agreement
and (ii) a
representation or
warranty of the Seller under
this Agreement (other than Section 3.01(xi) and (xix) below),
the only right or
remedy of the
Purchaser shall be the
right to enforce the
obligations of the
applicable Originator
under any applicable
representation or
warranty made by
it; provided,
however, to the extent that any fact,
condition or event with
respect to an
Ameriquest Mortgage
Loan constitutes a breach of an
Ameriquest
Representation and
Warranty and such breach is discovered on or after September
8, 2007, Ameriquest
shall have no
obligation or liabil
