MORTGAGE LOAN PURCHASE AGREEMENT

Exhibit 10.2

EXECUTION COPY

MORTGAGE LOAN PURCHASE AGREEMENT

dated as of November 13, 2006

among

OPTION ONE MORTGAGE CORPORATION,

as Responsible Party

SG MORTGAGE FINANCE CORP.,

as Seller

and

SG MORTGAGE SECURITIES, LLC,

as Purchaser

and

acknowledged and agreed by

WELLS FARGO BANK, N.A.,

as Interim Trustee and as Master Servicer

TABLE OF CONTENTS

SCHEDULES & EXHIBITS:

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MORTGAGE LOAN PURCHASE AGREEMENT

This MORTGAGE LOAN PURCHASE AGREEMENT, dated as of November 13, 2006 (this " Agreement "), is among OPTION ONE MORTGAGE CORPORATION (in its individual capacity, " Option One "), a California corporation, as responsible party (in such capacity, the " Responsible Party "), SG MORTGAGE FINANCE CORP., a Delaware corporation, as seller (the " Seller "), and SG MORTGAGE SECURITIES, LLC, a Delaware limited liability company, as purchaser (the " Purchaser ").

Capitalized terms used but not defined herein have the meanings set forth in the Pooling and Servicing Agreement, dated as of December 1, 2006 (the " Pooling and Servicing Agreement "), among the Purchaser, as depositor, Wells Fargo Bank, N.A. (in its individual capacity, " Wells Fargo "), as securities administrator, custodian and master servicer (in such capacities, the " Master Servicer "), Option One, as servicer (in such capacity, the " Servicer "), and HSBC Bank USA, National Association, as trustee (the " Trustee ").

W I T N E S S E T H

WHEREAS, the Seller purchased the Mortgage Loans from the Responsible Party (or from certain trusts established by the Responsible Party (the " Option One Trusts ")), and, in connection with any securitization of the Mortgage Loans, the Responsible Party agreed to cooperate with the Seller and to take certain actions (including, without limitation, to make the representations and warranties contained herein regarding the Responsible Party and the Mortgage Loans);

WHEREAS, pursuant to the Trust Agreement (as amended, supplemented or otherwise modified from time to time), dated as of May 18, 2005, between the Seller, as beneficiary, and Wells Fargo, as trustee (in such capacity, the " Interim Trustee "), the Interim Trustee holds the Mortgage Loans in trust for the benefit of the Seller, and, pursuant to the Custodial Agreement, dated as of August 16, 2005, between the Seller, as owner, and Wells Fargo, as custodian (the " Custodian "), the Custodian holds the Mortgage Loan Files in trust for the benefit of the Seller;

WHEREAS, the Seller intends to sell and the Purchaser intends to purchase the Mortgage Loans (as hereinafter identified) on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, the Purchaser intends to deposit the Mortgage Loans into a mortgage pool comprising the Trust Fund, which will be evidenced by a single series of asset-backed certificates designated as SG Mortgage Securities Trust 2006-OPT2 Asset-Backed Certificates, Series 2006-OPT2 (the " Certificates "), and the Certificates will consist of twenty-one classes of certificates and will be issued pursuant to the Pooling and Servicing Agreement;

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NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Agreement to Purchase . The Seller agrees to sell and the Purchaser agrees to purchase, on December 14, 2006 (the " Closing Date "), all the Seller’s right title and interest in certain first lien and second lien, adjustable-rate and fixed-rate, interest-only and fully-amortizing, one- to four-family residential mortgage loans purchased by the Seller from the Responsible Party (as more fully defined in the Pooling and Servicing Agreement, the " Mortgage Loans "), having an aggregate principal balance as of the close of business on December 1, 2006, (the " Cut-off Date ") of $813,345,795.44 (the " Closing Balance "), after giving effect to all payments due on the Mortgage Loans on or before the Cut-off Date, whether or not received including the right to any Prepayment Charges payable by the related Mortgagors in connection with any Principal Prepayments on the Mortgage Loans, on a servicing-retained basis.

SECTION 2. Mortgage Loan Schedule . The Purchaser and the Seller have agreed upon which of the Mortgage Loans are to be purchased by the Purchaser pursuant to this Agreement and the Seller will prepare or cause to be prepared on or prior to the Closing Date a Mortgage Loan Schedule, attached hereto as Exhibit 3 (the " Mortgage Loan Schedule "), that shall describe such Mortgage Loans and set forth all of the Mortgage Loans to be purchased under this Agreement, including the Prepayment Charges. The Mortgage Loan Schedule will conform to the requirements set forth in this Agreement and to the definition of "Mortgage Loan Schedule" under the Pooling and Servicing Agreement.

SECTION 3. Consideration .

(a) In consideration for the Mortgage Loans to be purchased hereunder the Purchaser shall, as described in Section 8 , pay to or upon the order of the Seller in immediately available funds an amount (the " Total Purchase Price ") equal to (i) the net sale proceeds of the Class A-1, Class A-2, Class A-3A, Class A-3B, Class A-3C, Class A-3D, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, and (ii) the Class CE, Class P and Class R Certificates.

(b) The Purchaser or any assignee, transferee or designee of the Purchaser shall be entitled to all scheduled payments of principal due after the Cut-off Date, all other payments of principal due and collected after the Cut-off Date, and all payments of interest on the Mortgage Loans allocable to the period after the Cut-off Date. All scheduled payments of principal and interest due on or before the Cut-off Date and collected after the Cut-off Date shall belong to the Seller.

(c) Pursuant to the Pooling and Servicing Agreement and the Assignment and Recognition Agreement, dated as of December 1, 2006, between the Purchaser, as assignor, the Trustee, as assignee, Option One, as servicer and responsible party, and the Seller, the Purchaser will assign all of its right, title and interest in and to the Mortgage Loans, together with its rights under this Agreement, to the Trustee for the benefit of the Certificateholders.

SECTION 4. Transfer of the Mortgage Loans .

(a) Possession of Mortgage Files . Each of the Seller and the Interim Trustee does hereby sell, and in connection therewith hereby assigns, to the Purchaser, effective as of the

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Closing Date, without recourse but subject to the terms of this Agreement, all of its right, title and interest in, to and under the Mortgage Loans, including the related Prepayment Charges. The contents of each Mortgage File not delivered to the Purchaser or to any assignee, transferee or designee of the Purchaser on or prior to the Closing Date are and shall be held in trust by the Seller for the benefit of the Purchaser or any assignee, transferee or designee of the Purchaser. Upon the sale of the Mortgage Loans, the ownership of each Mortgage Note, the related Mortgage and the other contents of the related Mortgage File is vested in the Purchaser and the ownership of all records and documents with respect to the related Mortgage Loan prepared by or that come into the possession of the Seller on or after the Closing Date shall immediately vest in the Purchaser and shall be delivered immediately to the Purchaser or as otherwise directed by the Purchaser.

(b) Delivery of Mortgage Loan Documents . The Seller will, on or prior to the Closing Date, deliver or cause to be delivered to the Purchaser or any assignee, transferee or designee of the Purchaser the complete Mortgage File (as defined in Exhibit 1 ) for each Mortgage Loan included on the Mortgage Loan Schedule, which Mortgage File shall contain the Mortgage Loan Documents (as defined in Exhibit 2 ).

The Seller shall forward to the Purchaser original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan within two (2) weeks of their execution, provided , however , that the Seller shall provide the Purchaser with a certified true copy of any such document submitted for recordation within two (2) weeks of its execution, and shall provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office to be a true and complete copy of the original within ninety (90) days of its submission for recordation, subject to extension for reasonable cause.

In the event any document required to be delivered to the Purchaser pursuant to this Section 4(b) , including an original or copy of any document submitted for recordation to the appropriate public recording office, is not so delivered to the Purchaser, or to such other Person as the Purchaser shall designate in writing, within ninety (90) days following the Closing Date (other than with respect to the Assignments of Mortgage which shall be delivered to the Purchaser in blank and recorded subsequently by the Purchaser or its designee), and in the event that the Seller does not cure such failure within thirty (30) days of discovery or receipt of written notification of such failure from the Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser, be repurchased by the Seller at the price and in the manner specified in Section 7 . The foregoing repurchase obligation shall not apply in the event that the Seller cannot deliver an original document submitted for recordation to the appropriate public recording office within the specified period due to a delay caused by the recording office in the applicable jurisdiction; provided that the Seller shall instead deliver a recording receipt of such recording office or, if such recording receipt is not available, an officer’s certificate of a servicing officer of the Responsible Party, confirming that such documents have been accepted for recording; provided that, upon request of the Purchaser and delivery by the Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its designee said officer’s certificate. In addition to its repurchase obligations set forth above in this paragraph, the Seller shall exert customary and diligent efforts to cause the delivery to the Purchaser of the documents required to be delivered under the preceding paragraphs. Each document required to be delivered under this Section 4(b) shall be delivered by the Seller within three hundred and sixty (360) days of the Closing Date.

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The Responsible Party shall pay all initial recording fees, if any, for the Assignments of Mortgage and any other fees or costs in transferring all original documents to the Purchaser or, upon written request of the Purchaser, to the Purchaser or the Purchaser’s designee. The Seller (at the expense of the Responsible Party) shall be responsible for recording the Assignments of Mortgage.

(c) Acceptance of Mortgage Loans . The documents delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or any assignee, transferee or designee of the Purchaser at any time before or after the Closing Date (and with respect to each document permitted to be delivered after the Closing Date, within seven days of its delivery) to ascertain that all required documents have been executed and received and that such documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

(d) Transfer of Interest in Agreements . The Purchaser has the right to assign its interest under this Agreement, in whole or in part, to the Trustee, as may be required to effect the purposes of the Pooling and Servicing Agreement, without the consent of the Seller or the Responsible Party, and the assignee shall succeed to the rights hereunder of the Purchaser. Any expense reasonably incurred by or on behalf of the Purchaser or the Trustee in connection with enforcing any obligations of the Seller or the Responsible Party under this Agreement will be promptly reimbursed by the Seller or the Responsible Party, as applicable.

(e) Examination of Mortgage Files . Prior to the Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser, or to any assignee, transferee or designee of the Purchaser for examination, the Mortgage File pertaining to each Mortgage Loan or (ii) make such Mortgage Files available to the Purchaser or to any assignee, transferee or designee of the Purchaser for examination. Such examination may be made by the Purchaser or the Trustee, and their respective designees, upon reasonable notice to the Seller during normal business hours before the Closing Date and within sixty (60) days after the Closing Date. If any such person makes such examination prior to the Closing Date and identifies any Mortgage Loans that do not conform to the requirements of the Purchaser as described in this Agreement, such Mortgage Loans shall be deleted from the Mortgage Loan Schedule. The Purchaser may, at its option and without notice to the Seller, purchase all or part of the Mortgage Loans without conducting any partial or complete examination. The fact that the Purchaser or any person has conducted or has failed to conduct any partial or complete examination of the Mortgage Files shall not affect the rights of the Purchaser or any assignee, transferee or designee of the Purchaser to demand repurchase or other relief as provided herein or under the Pooling and Servicing Agreement.

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SECTION 5. Representations, Warranties and Covenants of the Responsible Party and the Seller .

(a) The Responsible Party hereby represents and warrants to the Seller and the Purchaser, as of the date hereof and as of the Closing Date, and covenants, that:

• (i) The Responsible Party is duly organized, validly existing and in good standing under the laws of the state of California and is and will remain in compliance with the laws of each state in which any Mortgaged Property is located to the extent necessary to ensure the enforceability of each Mortgage Loan;

  (ii) The Responsible Party has the full power and authority to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. The Responsible Party has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Seller and the Purchaser, constitutes a legal, valid and binding obligation of the Responsible Party, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or reorganization;

  (iii) The execution and delivery of this Agreement by the Responsible Party and the performance of and compliance with the terms of this Agreement which are applicable to the Responsible Party will not violate the Responsible Party’s certificate of incorporation or bylaws or constitute a default under or result in a breach or acceleration of, any material contract, agreement or other instrument to which the Responsible Party is a party or which may be applicable to the Responsible Party or its assets;

  (iv) The Responsible Party is not in violation of, and the execution and delivery of this Agreement by the Responsible Party and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over the Responsible Party or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or otherwise) or the operation of the Responsible Party or its assets or might have consequences that would materially and adversely affect the enforceability of the Mortgage Loans or this Agreement or the performance of its obligations and duties hereunder;

  (v) The Responsible Party does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant of the Responsible Party contained in this Agreement;

  (vi) There are no actions or proceedings against, or investigations of, the Responsible Party before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by the Responsible Party of its obligations under, or the validity or enforceability of, this Agreement;

  (vii) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Responsible Party of, or compliance by the Responsible Party with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained prior to the Closing Date;

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• (viii) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Responsible Party; and

  (ix) Neither this Agreement nor any written statement, report or other document prepared and furnished by the Responsible Party pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement of material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

(b) The Seller hereby represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, and covenants, that:

• (i) The Seller is duly organized, validly existing and in good standing as a corporation under the laws of the State of Delaware with full corporate power and authority to conduct its business as presently conducted by it to the extent material to the consummation of the transactions contemplated herein. The Seller has the full corporate power and authority to own the Mortgage Loans and to transfer and convey the Mortgage Loans to the Purchaser and has the full corporate power and authority to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions of this Agreement.

  (ii) The Seller has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Responsible Party, the Interim Trustee and the Purchaser, constitutes a legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or reorganization.

  (iii) The execution, delivery and performance of this Agreement by the Seller (x) does not conflict and will not conflict with, does not breach and will not result in a breach of and does not constitute and will not constitute a default (or an event, which with notice or lapse of time or both, would constitute a default) under (A) any terms or provisions of the certificate of incorporation or bylaws of the Seller, (B) any term or provision of any material agreement, contract, instrument or indenture, to which the Seller is a party or by which the Seller or any of its property is bound or (C) any law, rule, regulation, order, judgment, writ, injunction or decree of any court or governmental authority having jurisdiction over the Seller or any of its property and (y) does not create or impose and will not result in the creation or imposition of any lien, charge or encumbrance which would have a material adverse effect upon the Mortgage Loans or any documents or instruments evidencing or securing the Mortgage Loans.

  (iv) No consent, approval, authorization or order of, registration or filing with, or notice on behalf of the Seller to any governmental authority or court is required, under federal laws or the laws of the State of Delaware, for the execution, delivery and

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• performance by the Seller of, or compliance by the Seller with, this Agreement or the consummation by the Seller of any other transaction contemplated hereby; provided , however , that the Seller makes no representation or warranty regarding federal or state securities laws in connection with the sale or distribution of the Certificates.

  (v) The Seller is not in violation of, and the execution and delivery of this Agreement by the Seller and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over the Seller or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or otherwise) or the operation of the Seller or its assets or might have consequences that would materially and adversely affect the performance of its obligations and duties hereunder.

  (vi) The Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement.

  (vii) Immediately prior to the sale of the Mortgage Loans to the Purchaser as herein contemplated, the Seller will be the beneficial owner, and the Interim Trustee will be the legal owner, of the related Mortgage and the indebtedness evidenced by the related Mortgage Note, and, upon the payment to the Seller of the Total Purchase Price, in the event that the Seller retains or has retained record title, the Seller shall retain such record title to each Mortgage, each related Mortgage Note and the related Mortgage Files with respect thereto in trust for the Purchaser as the owner thereof from and after the date hereof.

  (viii) There are no actions or proceedings against, or investigations known to it of, the Seller before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the sale of the Mortgage Loans by the Seller or the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by the Seller of its obligations under, or validity or enforceability of, this Agreement.

  (ix) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Seller, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller are not subject to the bulk transfer or any similar statutory provisions.

  (x) The Seller has not dealt with any broker, investment banker, agent or other person, except for the Purchaser or any of its affiliates, that may be entitled to any commission or compensation in connection with the sale of the Mortgage Loans.

  (xi) There is no litigation currently pending or, to the best of the Seller’s knowledge without independent investigation, threatened against the Seller that would reasonably be expected to adversely affect the transfer of the Mortgage Loans, the issuance of the Certificates or the execution, delivery, performance or enforceability of this Agreement, or that would result in a material adverse change in the financial condition of the Seller.

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• (xii) The Seller is solvent and will not be rendered insolvent by the consummation of the transactions contemplated hereby. The Seller is not transferring any Mortgage Loan with any intent to hinder, delay or defraud any of its creditors.

  (xiii) The Seller makes each of the additional representations and warranties set forth on Schedule I hereto.

(c) The Seller hereby makes the representations and warranties set forth in Sections 6(b) , (q) , (r) , (w) , (pp) , (vv)  and (kkkk) with the exception that the words "Whole Loan Sale Date" in such sections are replaced with the words "Cut-off Date", provided , however , that (i) the phrase "except with respect to payments not yet 30 days past due" shall be replaced with the phrase "except with respect to payments not more than 30 days delinquent based on OTS methodology" in both places where it appears in Section 6(b) , (ii) the phrase "up to the close of business on" shall be replaced with "prior to" where it appears in Section 6(b) , and (iii) if any corresponding representation or warranty of the Responsible Party set forth in any such section with respect to any Mortgage Loan was not true and correct as of the Whole Loan Sale Date (as defined below) and was not subsequently cured prior to the Cut-off Date, the Seller shall be deemed not to have made such representation or warranty under such section with respect to such Mortgage Loan and shall have no corresponding obligation to repurchase or substitute any such Mortgage Loan under Section 7 . In addition, the Seller makes the representations and warranties set forth in Sections 6(zz) , (ttt) and (vvvv)  to the Purchaser and its assigns.

(d) As of the Closing Date and immediately prior to the sale of the Mortgage Loans hereunder, the Seller is the sole beneficial and equitable owner of the related Mortgage Notes and the related Mortgages and has full right to transfer and sell the Mortgage Loans to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest.

SECTION 6. Representations and Warranties of the Responsible Party Relating to the Mortgage Loans .

• The Responsible Party hereby represents and warrants to the Seller and the Purchaser that, as to each Mortgage Loan, as of the Closing Date or, if specified below, as of the date that such Mortgage Loan was purchased by the Seller from the Responsible Party (the " Whole Loan Sale Date "):

  (a) The information set forth in the Mortgage Loan Schedule is complete, true and correct as of the Cut-off Date;

  (b) Except with respect to payments not yet 30 days past due, all payments required to be made up to the close of business on the Whole Loan Sale Date under the terms of the related Mortgage Note have been made; neither the Responsible Party nor any applicable Option One Trust has advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by

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• the Mortgage Note or Mortgage; and as of the Whole Loan Sale Date, except with respect to payments less than 30 days past due, there has been no delinquency, exclusive of any period of grace, in any payment by the Mortgagor thereunder since origination;

  (c) There are no delinquent taxes, insurance premiums or other outstanding charges that would jeopardize the lien priority of the Mortgage Loan;

  (d) 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 Purchaser; and the substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required by the related policy. No instrument of waiver, alteration or modification has been executed, and no Mortgagor 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 Purchaser;

  (e) The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note and the Mortgage, or the exercise of any right thereunder, render the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto;

  (f) All buildings upon the Mortgaged Property are insured by an insurer acceptable to Fannie Mae and Freddie Mac against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located, pursuant to insurance policies conforming to the requirements of the Pooling and Servicing Agreement. All such insurance policies contain a standard mortgagee clause naming the Responsible Party, its successors and assigns as mortgagee and all premiums thereon have been paid. If upon origination of the Mortgage Loan, the Mortgaged Property was 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 and conforming to the requirements of Fannie Mae or Freddie Mac is in effect. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to maintain such insurance at Mortgagor’s cost and expense and to seek reimbursement therefor from the Mortgagor. The hazard insurance policy is the valid and binding obligation of the insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of the Responsible Party upon the consummation of the transactions contemplated by this Agreement. Neither the Responsible Party nor any applicable Option One Trust has engaged in, or has any knowledge of the Mortgagor’s having engaged in, any act or omission which would

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• impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either, including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by the Responsible Party or any applicable Option One Trust;

  (g) Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, fair housing, predatory and abusive lending laws, or disclosure laws applicable to the origination and servicing of loans of a type similar to the Mortgage Loans have been complied with and the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and the Responsible Party shall maintain in its possession, available for the Purchaser’s inspection, and shall deliver to the Purchaser upon demand, evidence of compliance with all such requirements;

  (h) The Mortgage has not been satisfied, canceled, 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. Neither the Responsible Party nor any applicable Option One Trust has waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has the Responsible Party or any applicable Option One Trust waived any default resulting from any action or inaction by the Mortgagor;

  (i) With respect to any First Lien Mortgage Loan, the related Mortgage is a valid, existing and enforceable first lien on the related Mortgaged Property and, with respect to any Second Lien Mortgage Loan, the related Mortgage is a valid, existing and enforceable second lien on the related Mortgaged Property, including all improvements on the related Mortgaged Property subject only to (1) with respect to any Second Lien Mortgage Loan, the related First Lien, (2) the lien of current real property taxes and assessments which are not delinquent, (3) covenants, conditions and restrictions, rights of way, easements, mineral right reservations and other matters of the public record as of the date of recording of such Mortgage which are acceptable to mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the related Mortgage Loan and which do not adversely affect the Appraised Value of the related Mortgaged Property, and (4) 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 related Mortgage or the use, enjoyment, value (as determined by Appraised 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 (y) with respect to any First Lien Mortgage Loan, a valid, subsisting and enforceable first lien and first priority security interest and (z) with respect to any Second Lien Mortgage Loan, a valid, subsisting and enforceable second lien and second priority security

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• interest, in each case, on the property described therein, and the Seller has the full right to sell and assign the same to the Purchaser. Except as set forth on the Mortgage Loan Schedule, the Mortgaged Property was not, as of the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage;

  (j) The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms;

  (k) All parties to the Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and properly executed by such parties;

  (l) The Mortgagor is a natural person who executed the related Mortgage either in an individual capacity or, provided that the related Mortgage is guaranteed by a natural person, as trustee for a family trust;

  (m) The proceeds of the Mortgage Loan have been fully disbursed to or for the account of the Mortgagor and there is no obligation for the mortgagee to advance additional funds thereunder and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage have been paid, and the Mortgagor is not entitled to any refund of any amounts paid or due to the mortgagee pursuant to the Mortgage Note or Mortgage;

  (n) As of the Whole Loan Sale Date and immediately prior to the sale of the Mortgage Loan to the Seller, the Responsible Party or the Option One Trusts were the sole beneficial and equitable owner of the related Mortgage Note and the related Mortgage and had full right to transfer and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest;

  (o) All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) in compliance with any and all applicable "doing business" and licensing requirements of the laws of the state wherein the Mortgaged Property is located;

  (p) The Mortgage Loan is covered by an ALTA lender’s title insurance policy and, in the case of an Adjustable Rate Mortgage Loan, with an adjustable rate mortgage endorsement, such endorsement substantially in the form of ALTA Form 6.0 or 6.1, or with respect to any Mortgage Loan for which the related Mortgaged Property is located in California a CLTA lender’s title insurance policy, or other generally acceptable form of policy or insurance acceptable to Fannie Mae and Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the

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• jurisdiction where the Mortgaged Property is located, insuring (subject to the exceptions contained in clauses (i)(1) , (2)  and (3)  above) the Responsible Party, its successors and assigns as to the first or second, as applicable, priority lien of the Mortgage in the original principal amount of the Mortgage Loan and, with respect to an Adjustable Rate Mortgage Loan, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment in the Mortgage Rate and Monthly Payment. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress to and from the Mortgaged Property, and against encroachments by or upon the Mortgaged Property or any interest therein. The Responsible Party is the sole insured of such lender’s title insurance policy, and such lender’s title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement. Such lender’s title insurance policy has been duly and validly endorsed to the Purchaser or the assignment to the Purchaser of the Responsible Party’s interest therein does not require the consent of or notification to the related insurer. No claims have been made under such lender’s title insurance policy, and no prior holder of the related Mortgage, including the Responsible Party, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy;

  (q) As of the Whole Loan Sale Date, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and 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 Responsible Party has not waived (either for itself, for any applicable Option One Trust or for the Seller) any default, breach, violation or event of acceleration. For purposes of the foregoing, a delinquent payment of less than thirty (30) days on a Mortgage Loan in and of itself does not constitute a default, breach, violation or event of acceleration (or an event which, with the passage of time or with notice and the expiration of any grace or cure period, has occurred that would constitute a default, breach, violation or event of acceleration) with respect to such Mortgage Loan;

  (r) As of the Whole Loan Sale Date, there are no mechanics’ or similar liens or claims which 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;

  (s) All improvements which were considered in determining the Appraised Value of the related Mortgaged Property lay wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property;

  (t) The Mortgage Loan was originated or acquired by the Responsible Party (and if acquired by the Responsible Party the Mortgage Loan was underwritten in all material respects with the Underwriting Guidelines) or originated by a savings and loan association, a savings bank, a commercial bank or similar banking institution which is supervised and examined by a federal or state authority, or by a mortgagee approved as such by the Secretary of HUD.

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• (u) Payments on the Mortgage Loan shall commence (with respect to any newly originated Mortgage Loans) or commenced no more than two months after the proceeds of the Mortgage Loan were disbursed. The Mortgage Loan bears interest at the Mortgage Rate. The Mortgage Note is payable on the first day of each month (except with respect to the Mortgage Loans set forth in the Mortgage Loan Schedule as having Monthly Payments due on a day other than the first day of each month) in Monthly Payments, which, in the case of a Fixed Rate Mortgage Loans, are sufficient to fully amortize the original principal balance over the original term thereof, of not more than forty (40) years, and to pay interest at the related Mortgage Rate, and, in the case of an Adjustable Rate Mortgage Loan, are changed on each Adjustment Date, and in any case, are sufficient to fully amortize the original principal balance over the original term thereof and to pay interest at the related Mortgage Rate. The Index for each Adjustable Rate Mortgage Loan is as defined in the Mortgage Loan Schedule. Interest on the Mortgage Loan is calculated on the basis of a 360 day year consisting of twelve 30-day months. The Mortgage Note does not permit negative amortization;

  (v) The origination and collection practices used by the Responsible Party, with respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing industry. The Mortgage Loan has been serviced by the Responsible Party and any predecessor servicer in accordance with the terms of the Mortgage Note and applicable law. With respect to escrow deposits and Escrow Payments, if any, all such payments are in the possession of, or under the control with, the Responsible Party, and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. An escrow of funds is not prohibited by applicable law with respect to any Mortgage Loan for which such escrow of funds has been established. All Mortgage Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. If, pursuant to the terms of the Mortgage Note, another index was selected for determining the Mortgage Rate, the same index was used with respect to each Mortgage Note which required a new index to be selected, and such selection did not conflict with the terms of the related Mortgage Note. The Responsible Party or an Affiliate thereof executed and delivered any and all notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and the monthly payment adjustments. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited. No escrow deposits or Escrow Payments or other charges or payments due the Responsible Party have been capitalized under any Mortgage or the related Mortgage Note and no such escrow deposits or Escrow Payments are being held by the Responsible Party for any work on a Mortgaged Property which has not been completed;

  (w) As of the Whole Loan Sale Date, the Mortgaged Property is free of material damage and waste that affect adversely the value of the Mortgaged Property and there is no proceeding pending or threatened for the total or partial condemnation thereof;

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• (x) The Mortgage and related Mortgage Note contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise, by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. Since the date of origination 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 Responsible Party and the Responsible Party