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MORTGAGE LOAN PURCHASE
AGREEMENT
This Mortgage Loan Purchase Agreement (the
"Agreement"), dated as of November 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 November 1, 2006, by and among HSI Asset
Securitization Corporation, as depositor, CitiMortgage, Inc., as
master servicer, Citibank, N.A., as securities administrator, Wells
Fargo Bank, N.A., as custodian (the "Custodian"), OfficeTiger
Global Real Estate 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-HE2 Mortgage Pass-Through Certificates,
Series 2006-HE2 (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
$1,571,483,257.47 inclusive 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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