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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 liability with
respect to such
Mortgage Loans and the only right or remedy of the Purchaser
wit
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