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FHASI 2006-AR4
MORTGAGE LOAN PURCHASE
AGREEMENT
THIS MORTGAGE LOAN PURCHASE AGREEMENT dated as of
December 28, 2006 by and between FIRST HORIZON HOME LOAN
CORPORATION, a Kansas corporation (the "Seller"), and FIRST HORIZON
ASSET SECURITIES INC. (the "Purchaser").
WHEREAS, the Seller owns certain Mortgage Loans
(as hereinafter defined) which Mortgage Loans are more particularly
listed and described in Schedule A attached hereto and made
a part hereof.
WHEREAS, the Seller and the Purchaser wish to set
forth the terms pursuant to which the Mortgage Loans, excluding the
servicing rights thereto, are to be sold by the Seller to the
Purchaser.
WHEREAS, the Seller will simultaneously transfer
the servicing rights for the Mortgage Loans to First Tennessee
Mortgage Services, Inc. ("FTMSI") pursuant to the Servicing Rights
Transfer and Subservicing Agreement (as hereinafter
defined).
WHEREAS, the Purchaser will engage FTMSI to
service the Mortgage Loans pursuant to the Servicing Agreement (as
hereinafter defined).
NOW, THEREFORE, in consideration of the
foregoing, other good and valuable consideration, and the mutual
terms and covenants contained herein, the parties hereto agree as
follows:
ARTICLE I
Definitions
Agreement : This Mortgage Loan Purchase
Agreement, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms
hereof.
Alternative Title Product : Any one of
the following: (i) Lien Protection Insurance issued by Integrated
Loan Services or ATM Corporation of America, (ii) a Mortgage Lien
Report issued by EPN Solutions/ACRAnet, (iii) a Property Plus
Report issued by Rapid Refinance Service through
SharperLending.com, or (iv) such other alternative title insurance
product that the Seller utilizes in connection with its then
current underwriting criteria.
Business Day : Any day other than (i) a
Saturday or a Sunday, or (ii) a day on which banking institutions
in the City of Dallas, the State of Texas or New York City is
located are authorized or obligated by law or executive order to be
closed.
Closing Date : December 28,
2006
Code : The Internal Revenue Code of
1986, including any successor or amendatory provisions.
Cooperative Corporation : The entity
that holds title (fee or an acceptable leasehold estate) to the
real property and improvements constituting the Cooperative
Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Coop Shares : Shares issued by a
Cooperative Corporation.
Cooperative Loan : Any Mortgage Loan
secured by Coop Shares and a Proprietary Lease.
Cooperative Property : The real
property and improvements owned by the Cooperative Corporation,
including the allocation of individual dwelling units to the
holders of the Coop Shares of the Cooperative Corporation.
Cooperative Unit : A single family
dwelling located in a Cooperative Property.
Custodian : First Tennessee Bank
National Association, and its successors and assigns, as custodian
under the Custodial Agreement dated as of December 28, 2006 by and
among The Bank of New York, as trustee, First Horizon Home Loan
Corporation, as master servicer, and the Custodian.
Cut-Off Date : December 1,
2006.
Cut-off Date Principal Balance : As to
any Mortgage Loan, the Stated Principal Balance thereof as of the
close of business on the Cut-off Date.
Debt Service Reduction : With respect
to any Mortgage Loan, a reduction by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code in the
Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness
of principal.
Deficient Valuation : With respect to
any Mortgage Loan, a valuation by a court of competent jurisdiction
of the Mortgaged Property in an amount less than the
then-outstanding indebtedness under the Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with
any Scheduled Payment that results in a permanent forgiveness of
principal, which valuation or reduction results from an order of
such court which is final and non-appealable in a proceeding under
the United States Bankruptcy Reform Act of 1978, as
amended.
Delay Delivery Mortgage Loans : The
Mortgage Loans for which all or a portion of a related Mortgage
File is not delivered to the Trustee or to the Custodian on its
behalf on the Closing Date. The number of Delay Delivery Mortgage
Loans shall not exceed 25% of the aggregate number of Mortgage
Loans as of the Closing Date.
Deleted Mortgage Loan : As defined in
Section 4.1(c) hereof.
Determination Date : The earlier of (i)
the third Business Day after the 15th day of each month, and (ii)
the second Business Day prior to the 25 th day of each
month, or if such 25 th day is not a Business Day, the
next succeeding Business Day.
GAAP : Generally accepted accounting
principles as in effect from time to time in the United States of
America.
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Insurance Proceeds : Proceeds paid by
an insurer pursuant to any insurance policy, including all riders
and endorsements thereto in effect, including any replacement
policy or policies, in each case other than any amount included in
such Insurance Proceeds in respect of expenses covered by such
insurance policy.
Liquidation Proceeds : Amounts,
including Insurance Proceeds, received in connection with the
partial or complete liquidation of defaulted Mortgage Loans,
whether through trustee’s sale, foreclosure sale or otherwise
or amounts received in connection with any condemnation or partial
release of a Mortgaged Property.
MERS : Mortgage Electronic Registration
Systems, Inc., a corporation organized and existing under the laws
of the State of Delaware, or any successor thereto.
MERS Mortgage Loan : Any Mortgage Loan
registered with MERS on the MERS System.
MERS® System : The system of
recording transfers of mortgages electronically maintained by
MERS.
MIN : The Mortgage Identification
Number for any MERS Mortgage Loan.
MOM Loan : Any Mortgage Loan as to
which MERS is acting as mortgagee, solely as nominee for the
originator of such Mortgage Loan and its successors and
assigns.
Mortgage : The mortgage, deed of trust
or other instrument creating a first lien on the property securing
a Mortgage Note.
Mortgage File : The mortgage documents
listed in Section 3.1 pertaining to a particular Mortgage Loan and
any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage Loans : The mortgage loans
transferred, sold and conveyed by the Seller to the Purchaser,
pursuant to this Agreement.
Mortgage Loan Purchase Price : With
respect to any Mortgage Loan required to be purchased by the Seller
pursuant to Section 4.1(c) hereof, an amount equal to the sum of
(i) 100% of the unpaid principal balance of the Mortgage Loan on
the date of such purchase, and (ii) accrued interest thereon at the
applicable Mortgage Rate from the date through which interest was
last paid by the Mortgagor to the first day in the month in which
the Mortgage Loan Purchase Price is to be distributed to the
Purchaser or its designees.
Mortgage Note : The original executed
note or other evidence of indebtedness evidencing the indebtedness
of a Mortgagor under a Mortgage Loan.
Mortgage Rate : The annual rate of
interest borne by a Mortgage Note from time to time, net of any
insurance premium charged by the mortgagee to obtain or maintain
any primary insurance policy.
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Mortgaged Property : The underlying
property securing a Mortgage Loan, which, with respect to a
Cooperative Loan, is the related Coop Shares and Proprietary
Lease.
Mortgagor : The obligor(s) on a
Mortgage Note.
Principal Prepayment : Any payment of
principal by a Mortgagor on a Mortgage Loan that is received in
advance of its scheduled Due Date and is not accompanied by an
amount representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Proprietary Lease : With respect to any
Cooperative Unit, a lease or occupancy agreement between a
Cooperative Corporation and a holder of related Coop
Shares.
Purchase Price :
$352,689,804.81
Purchaser : First Horizon Asset
Securities Inc., in its capacity as purchaser of the Mortgage Loans
from the Seller pursuant to this Agreement.
Recognition Agreement : With respect to
any Cooperative Loan, an agreement between the Cooperative
Corporation and the originator of such Mortgage Loan which
establishes the rights of such originator in the Cooperative
Property.
Scheduled Payment : The scheduled
monthly payment on a Mortgage Loan due on the first day of the
month allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related Debt Service Reduction and any Deficient Valuation that
affects the amount of the monthly payment due on such Mortgage
Loan.
Security Agreement :
The security agreement with respect to a Cooperative
Loan.
Seller : First Horizon Home Loan
Corporation, a Kansas corporation, and its successors and assigns,
in its capacity as seller of the Mortgage Loans.
Servicing Agreement : The servicing
agreement, dated as of November 26, 2002 by and between First
Horizon Asset Securities Inc. and its assigns, as owner, and First
Tennessee Mortgage Services, Inc., as servicer.
Servicing Rights Transfer and Subservicing
Agreement : The servicing rights transfer and subservicing
agreement, dated as of November 26, 2002 by and between First
Horizon Home Loan Corporation, as transferor and subservicer, and
First Tennessee Mortgage Services, Inc., as transferee and
servicer.
Stated Principal Balance : As to any
Mortgage Loan, the unpaid principal balance of such Mortgage Loan
as specified in the amortization schedule at the time relating
thereto (before any adjustment to such amortization schedule by
reason of any moratorium or similar waiver or grace period) after
giving effect to any previous partial Principal Prepayments and
Liquidation Proceeds allocable to principal (other than with
respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such date and irrespective of any delinquency in
payment by the related Mortgagor.
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Substitute Mortgage Loan : A Mortgage
Loan substituted by the Seller for a Deleted Mortgage Loan which
must, on the date of such substitution, (i) have a Stated Principal
Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not
more than 10% less than the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have a Mortgage Rate not lower than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have a maximum
mortgage rate not more than 1% per annum higher or lower than the
maximum mortgage rate of the Deleted Mortgage Loan; (iv) have a
minimum mortgage rate specified in its related Mortgage Note not
more than 1% per annum higher or lower than the minimum mortgage
rate of the Deleted Mortgage Loan; (v) have the same mortgage
index, reset period and periodic rate as the Deleted Mortgage Loan
and a gross margin not more than 1% per annum higher or lower than
that of the Deleted Mortgage Loan (vi) be accruing interest at a
rate no lower than and not more than 1% per annum higher than, that
of the Deleted Mortgage Loan; (vii) have a loan-to-value ratio no
higher than that of the Deleted Mortgage Loan; (viii) have a
remaining term to maturity no greater than (and not more than one
year less than that of) the Deleted Mortgage Loan; (ix) not be a
Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative
Loan and (x) comply with each representation and warranty set forth
in Schedule B hereto.
Trustee : The Bank of New York and its
successors and, if a successor trustee is appointed hereunder, such
successor.
ARTICLE II
Purchase and Sale
Section 2.1 Purchase Price . In consideration for the payment to it
of the Purchase Price on the Closing Date, pursuant to written
instructions delivered by the Seller to the Purchaser on the
Closing Date, the Seller does hereby transfer, sell and convey to
the Purchaser on the Closing Date, but with effect from the Cut-off
Date, (i) all right, title and interest of the Seller in the
Mortgage Loans, excluding the servicing rights thereto, and all
property securing such Mortgage Loans, including all interest and
principal received or receivable by the Seller with respect to the
Mortgage Loans on or after the Cut-off Date and all interest and
principal payments on the Mortgage Loans received on or prior to
the Cut-off Date in respect of installments of interest and
principal due thereafter, but not including payments of principal
and interest due and payable on the Mortgage Loans on or before the
Cut-off Date, and (ii) all proceeds from the foregoing. Items (i)
and (ii) in the preceding sentence are herein referred to
collectively as "Mortgage Assets."
Section 2.2 Timing . The sale of the Mortgage Assets hereunder shall
take place on the Closing Date.
ARTICLE III
Conveyance and Delivery
Section 3.1 Delivery of Mortgage Files . In connection with the
transfer and assignment set forth in Section 2.1 above, the Seller
has delivered or caused to be delivered to the Trustee or to the
Custodian on its behalf (or, in the case of the Delay Delivery
Mortgage Loans, will deliver or cause to be delivered to the
Trustee or to the Custodian on its behalf within thirty (30) days
following the Closing Date) the following documents or instruments
with respect to each Mortgage Loan so assigned (collectively, the
"Mortgage Files"):
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(a)
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(1) the original Mortgage Note endorsed by
manual or facsimile signature in blank in the following form: "Pay
to the order of ________________, without recourse," with all
intervening endorsements showing a complete chain of endorsement
from the originator to the Person endorsing the Mortgage Note (each
such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note); or
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(2) with respect to
any Lost Mortgage Note, a lost note affidavit from the Seller
stating that the original Mortgage Note was lost or destroyed,
together with a copy of such Mortgage Note;
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(b)
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except as provided below and for each Mortgage
Loan that is not a MERS Mortgage Loan, the original recorded
Mortgage or a copy of such Mortgage certified by the Seller as
being a true and complete copy of the Mortgage, and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the presence
of the MIN of the Mortgage Loans and either language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM
Loan or if the Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment thereof to MERS, with evidence
of recording indicated thereon, or a copy of the Mortgage certified
by the public recording office in which such Mortgage has been
recorded;
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(c)
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a duly executed assignment of the Mortgage in
blank (which may be included in a blanket assignment or
assignments), together with, except as provided below, all interim
recorded assignments of such mortgage (each such assignment, when
duly and validly completed, to be in recordable form and sufficient
to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which the assignment relates); provided that,
if the related Mortgage has not been returned from the applicable
public recording office, such assignment of the Mortgage may
exclude the information to be provided by the recording
office;
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(d)
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the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any;
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(e)
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either the original or duplicate original title
policy (including all riders thereto) with respect to the related
Mortgaged Property, if available, provided that the title policy
(including all riders thereto) will be delivered as soon as it
becomes available, and if the title policy is not available, and to
the extent required pursuant to the second paragraph below or
otherwise in connection with the rating of the Certificates, a
written commitment or interim binder or preliminary report of the
title issued by the title insurance or escrow company with respect
to the Mortgaged Property, or, in lieu thereof, an Alternative
Title Product; and
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(f)
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in the case of a Cooperative Loan, the originals
of the following documents or instruments:
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(1) The Coop Shares,
together with a stock power in blank;
(2) The executed
Security Agreement;
(3) The executed
Proprietary Lease;
(4) The executed
Recognition Agreement;
(5) The executed
UCC-1 financing statement with evidence of recording thereon which
have been filed in all places required to perfect the
Seller’s interest in the Coop Shares and the Proprietary
Lease; and
(6) Executed UCC-3
financing statements or other appropriate UCC financing statements
required by state law, evidencing a complete and unbroken line from
the mortgagee to the Trustee with evidence of recording thereon (or
in a form suitable for recordation).
In the event that in connection with any Mortgage
Loan that is not a MERS Mortgage Loan the Seller cannot deliver (i)
the original recorded Mortgage or (ii) all interim recorded
assignments satisfying the requirements of clause (b) or (c) above,
respectively, concurrently with the execution and delivery hereof
because such document or documents have not been returned from the
applicable public recording office, the Seller shall promptly
deliver or cause to be delivered to the Trustee or the Custodian on
its behalf such original Mortgage or such interim assignment, as
the case may be, with evidence of recording indicated thereon upon
receipt thereof from the public recording office, or a copy
thereof, certified, if appropriate, by the relevant recording
office, but in no event shall any such delivery of the original
Mortgage and each such interim assignment or a copy thereof,
certified, if appropriate, by the relevant recording office, be
made later than one year following the Closing Date; provided,
however, in the event the Seller is unable to deliver or cause to
be delivered by such date each Mortgage and each such interim
assignment by reason of the fact that any such documents have not
been returned by the appropriate recording office, or, in the case
of each such interim assignment, because the related Mortgage has
not been returned by the appropriate recording office, the Seller
shall deliver or cause to be delivered such documents to the
Trustee or the Custodian on its behalf as promptly as possible upon
receipt thereof and, in any event, within 720 days following the
Closing Date; provided, further, however, that the Seller shall not
be required to provide an original or duplicate lender’s
title policy (together with all riders thereto) if the Seller
delivers an Alternative Title Product in lieu thereof. The Seller
shall forward or cause to be f
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