EXECUTION COPY
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
Dated as of November 1, 2006,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of November 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
SERIES 2006-QH1
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS...............................................................4
Section 1.01.
Definitions.......................................................4
Section 1.02.
Determination of LIBOR...........................................29
Section 1.03.
Use of Words and Phrases.........................................30
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..........30
Section 2.01.
Conveyance of Mortgage Loans.....................................30
Section 2.02.
Acceptance by Trustee............................................30
Section 2.03.
Representations, Warranties and Covenants of the Master
Servicer and the Company.........................................30
Section 2.04.
Representations and Warranties of Sellers.(See Section 2.04
of the Standard Terms)...........................................33
Section 2.05.
Execution and Authentication of Certificates/Issuance of
Certificates Evidencing Interests in REMICs......................33
Section 2.06.
Conveyance of REMIC I Regular Interests and REMIC II Regular
Interests SB-IO and SB-PO; Acceptance by the Trustee.............33
Section 2.07.
Issuance of Certificates Evidencing Interest in REMIC II and
REMIC III........................................................34
Section 2.08.
Purposes and Powers of the Trust.................................34
Section 2.09.
Agreement Regarding Ability to Disclose..........................34
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS...........................35
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS...........................................39
Section 4.01.
Certificate Account..............................................39
Section 4.02.
Distributions....................................................39
Section 4.03.
Statements to Certificateholders; Statements to the Rating
Agencies; Exchange Act Reporting.................................43
Section 4.04.
Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer..................................43
Section 4.05.
Allocation of Realized Losses....................................44
Section 4.06.
Reports of Foreclosures and Abandonment of Mortgaged Property....46
Section 4.07.
Optional Purchase of Defaulted Mortgage Loans....................46
Section 4.08.
Surety Bond......................................................46
Section 4.09.
Yield Maintenance Agreements.....................................46
Section 4.10.
The Certificate Policy...........................................47
ARTICLE V
THE
CERTIFICATES.........................................................49
ARTICLE VI
THE COMPANY AND THE MASTER
SERVICER......................................50
Section 6.01.
Respective Liabilities of the Company and Master Servicer........50
Section 6.02.
Merger or Consolidation of the Company or Master Servicer;
Assignment of Rights and Delegation of Duties by the Master
Servicer.........................................................50
Section 6.03.
Limitation on Liability of the Company, Master Servicer and
Others...........................................................50
Section 6.04.
Company and Master Servicer Not to Resign........................50
ARTICLE VII
DEFAULT..................................................................51
ARTICLE VIII
CONCERNING THE
TRUSTEE...................................................52
ARTICLE IX
TERMINATION..............................................................53
ARTICLE X
REMIC
PROVISIONS.........................................................54
Section 10.01.
REMIC Administration.............................................54
Section 10.02.
Master Servicer; REMIC Administrator and Trustee
Indemnification..................................................54
Section 10.03.
Designation of REMICs............................................54
Section 10.04.
Distributions on the REMIC I Regular Interests...................54
Section 10.05.
Compliance with Withholding Requirements.........................54
ARTICLE XI
MISCELLANEOUS
PROVISIONS.................................................55
Section 11.01.
Amendment........................................................55
Section 11.02.
Recordation of Agreement; Counterparts...........................55
Section 11.03.
Limitation on Rights of Certificateholders.......................55
Section 11.04.
Governing Law....................................................55
Section 11.05.
Notices..........................................................55
Section 11.06.
Required Notices to Rating Agency and Subservicer................56
Section 11.07.
Severability of Provisions.......................................56
Section 11.08.
Supplemental Provisions for Resecuritization.....................56
Section 11.09.
Allocation of Voting Rights......................................56
Section 11.10.
No Petition......................................................56
ARTICLE XII....COMPLIANCE WITH REGULATION AB 60
EXHIBITS
Exhibit One:
Mortgage Loan Schedule
Exhibit Two:
Information to be Included in Monthly Distribution Date Statement
Exhibit Three:Standard Terms of Pooling and Servicing Agreement,
dated as of November
1, 2006
This is a Series Supplement,
dated as of November 1, 2006 (the "Series
Supplement"),
to the Standard
Terms of Pooling and
Servicing
Agreement,
dated as of November 1, 2006 and
attached
as Exhibit
Four
hereto
(the
"Standard
Terms"
and,
together
with this
Series
Supplement,
the
"Pooling
and
Servicing
Agreement"
or
"Agreement"),
among
RESIDENTIAL
ACCREDIT
LOANS,
INC., as the company
(together
with its permitted
successors and assigns,
the
"Company"),
RESIDENTIAL
FUNDING
COMPANY,
LLC as master
servicer
(together
with its
permitted
successors
and assigns,
the "Master
Servicer"),
and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Trustee (together with its permitted successors and
assigns, the "Trustee").
PRELIMINARY STATEMENT:
The
Company
intends
to
sell
mortgage
asset-backed
pass-through
certificates
(collectively,
the "Certificates"),
to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans.
The terms and
provisions of the Standard Terms are hereby
incorporated
by reference
herein as though set forth in full
herein.
If any term or provision
contained
herein shall
conflict with or be
inconsistent
with any
provision
contained in the Standard
Terms,
the
terms and
provisions
of this Series
Supplement
shall
govern.
All
capitalized
terms not
otherwise
defined
herein
shall
have the
meanings
set forth in the
Standard
Terms.
The
Pooling and Servicing Agreement shall be dated as of the date of
this Series Supplement.
REMIC I
As
provided
herein,
the
REMIC
Administrator
will make an
election
to treat the
segregated
pool of assets
consisting of the Mortgage
Loans and certain other related assets
subject to this Agreement (but
excluding the Yield
Maintenance
Agreements) as a real estate
mortgage
investment conduit (a "REMIC") for federal income tax purposes,
and such segregated
pool of assets will be
designated
as "REMIC I." The Class R-I
Certificates
will
represent
the sole Class of "residual
interests"
in REMIC I for purposes of the REMIC
Provisions
(as
defined
herein)
under
federal
income
tax law.
The Class R-I
Certificates
will not bear
interest or have a
Certificate
Principal
Balance.
The
following
table
irrevocably
sets
forth the designation,
remittance rate (the
"Uncertificated
REMIC I Pass-Through Rate") and
initial
Uncertificated
Principal Balance for each of the "regular interests" in REMIC I
(the
"REMIC I Regular
Interests").
The "latest
possible
maturity date"
(determined
solely for
purposes of
satisfying
Treasury
regulation
Section
1.860G-1(a)(4)(iii))
for each REMIC I
Regular
Interest
shall be the Maturity Date.
None of the REMIC I Regular
Interests will be
certificated.
UNCERTIFICATED
REMIC I
INITIAL UNCERTIFICATED
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
LT1
Variable(1)
$340,431,657.46
December 26, 2036
LT2
Variable(1)
$12,116.90
December 26, 2036
LT3
0.00%
$21,931.86
December 26, 2036
LT4
Variable(1)
$21,931.86
December 26, 2036
____________
(1)
Calculated in accordance with the definition of
"Uncertificated
REMIC I Pass Through
Rate" herein.
REMIC II
As provided herein,
the REMIC
Administrator
will elect to treat the segregated pool
of assets
consisting
of the REMIC I Regular
Interests
as a REMIC for
federal
income
tax
purposes,
and such
segregated
pool of assets will be designated as REMIC II. The Class R-II
Certificates
will represent
ownership of the sole Class of "residual
interests" in REMIC II
for
purposes
of
the
REMIC
Provisions
under
federal
income
tax
law.
The
Class
R-II
Certificates
will not bear interest and will not have a Certificate
Principal
Balance.
The
following table irrevocably sets forth the designation,
type,
Pass-Through
Rate,
aggregate
Initial
Certificate
Principal
Balance,
Maturity Date, initial ratings and certain features
for each Class of
Certificates
that evidence
"regular
interests" in REMIC II and the REMIC
II
Regular
Interests
SB-IO and
SB-PO
(the
"REMIC II
Regular
Interests").
The
"latest
possible
maturity date"
(determined
solely for purposes of satisfying
Treasury
Regulation
Section
1.860G-1(a)(4)(iii))
for each REMIC II Regular Interest and the
Certificates
shall
be
the
Maturity
Date.
The
REMIC
II
Regular
Interests
SB-IO
and
SB-PO
will
not
be
certificated.
AGGREGATE
INITIAL
S&P/
CERTIFICATE
MOODY'S/
PASS-THROUGH PRINCIPAL
MATURITY
-----------
MINIMUM
DESIGNATION
RATE
BALANCE
FEATURES
DATE
DBRS
DENOMINATION
Class A-1
Adjustable $192,035,000.00
Adjustable Rate
December
AAA/Aaa/AAA
$100,000.00
Rate(1)(2)
26, 2036
Class A-2
Adjustable $80,014,000.00
Adjustable Rate
December
AAA/Aaa/AAA
$100,000.00
Rate(1)(2)
26, 2036
Class A-3
Adjustable $48,009,000.00
Adjustable
December
AAA/Aaa/AAA
$100,000.00
Rate(1)(2)
Rate/Insured
26, 2036
Class M-1
Adjustable
$8,342,000.00
Mezzanine/AdjustableDecember
AA/Aa2/AA
$100,000.00
Rate(1)(2)
Rate
26, 2036
Class M-2
Adjustable
$4,426,000.00
Mezzanine/AdjustableDecember
A/A2/A
$100,000.00
Rate(1)(2)
Rate
26, 2036
Class M-3
Adjustable
$1,703,000.00
Mezzanine/AdjustableDecember
A-/
$100,000.00
Rate(1)(2)
Rate
26, 2036
Baa1/A(low)
Class M-4
Adjustable
$1,702,000.00
Mezzanine/AdjustableDecember
BBB/Baa2/BBB $100,000.00
Rate(1)(2)
Rate
26, 2036
Class M-5
Adjustable
$1,702,000.00
Mezzanine/AdjustableDecember
NR/Baa3/B(low)$100,000.00
Rate(1)(2)
Rate
26, 2036
SB-PO
$2,544,638.08
N/A
Subordinate/PrincipaDecember
N/A
N/A
(3)
Only
26, 2036
SB-IO
(4)
N/A
Subordinate/InterestDecember
N/A
N/A
Only
26, 2036
(1)
The
REMIC II
Regular
Interests,
ownership of which is
represented
by the Class A
Certificates and Class M
Certificates,
will accrue interest at a per annum rate equal to the
lesser of (i) LIBOR plus the applicable Margin and (ii) the Net
Rate Cap.
(2)
The Class A
Certificates and Class M
Certificates will also entitle their holders to
receive certain
payments from the Holder of the Class SB
Certificates
from amounts to which
the
Holder
of the
Class SB
Certificates
is
entitled,
which
will not be a part of their
ownership of the related REMIC II Regular Interests.
(3)
The REMIC II Regular Interest SB-PO will have no entitlement to
interest,
and will be
entitled
to
distributions
of
principal
in
an
aggregate
amount
equal
to
the
Overcollateralization Amount pursuant to the terms and conditions
of this Agreement.
(4)
The REMIC II Regular
Interest SB-IO will have no
entitlement to principal,
and will
be
entitled
to
distributions
of
interest in an
aggregate
amount
equal to the
interest
distributable
with respect to the Class SB Certificates
pursuant the terms and conditions of
this Agreement.
REMIC III
As
provided
herein,
the
REMIC
Administrator
will make an
election
to treat the
segregated
pool of
assets
consisting
of REMIC II
Regular
Interests
SB-IO and SB-PO as a
REMIC for federal income tax purposes,
and such
segregated pool of assets will be designated
as "REMIC
III." The
Class
R-X
Certificates
will
represent
the sole
Class of
"residual
interests" in REMIC III for purposes of the REMIC
Provisions
under
federal
income tax law.
The Class R-X
Certificates
will not bear
interest or have
Certificate
Principal
Balance.
The following table
irrevocably
sets forth the
designation,
Pass-Through
Rate,
aggregate
Initial
Certificate
Principal
Balance,
Maturity Date, initial ratings and certain features
for the Class SB
Certificates
which
represent
the single
"regular
interest" in REMIC III
designated
the
"REMIC
III
Regular
Interest."
The
"latest
possible
maturity
date"
(determined
solely
for
purposes
of
satisfying
Treasury
regulation
Section
1.860G-1(a)(4)(iii)) for the REMIC III Regular Interest shall be
the Maturity Date.
AGGREGATE
INITIAL
S&P/
CERTIFICATE
MOODY'S/
PASS-THROUGH
PRINCIPAL
MATURITY
-----------
MINIMUM
DESIGNATION
RATE
BALANCE
FEATURES
DATE
DBRS
DENOMINATION
Class SB
Variable(1) $2,544,638.08
Subordinate/Adjustable December
NR/NR/NR
N/A
Rate
26, 2036
____________
(1)
The Class SB
Certificates
will accrue
interest as described
in the
definition
of
Accrued Certificate
Interest.
The Class SB
Certificates will not accrue interest on
their Certificate
Principal
Balance.
The REMIC III Regular Interest will not have a
Pass-Through
Rate, but will be entitled to 100% of all amounts paid or deemed
paid on
REMIC II Regular Interests SB-IO and SB-PO.
The
Mortgage
Loans
have an
aggregate
Cut-off
Date
Principal
Balance
equal
to
$340,487,638.08.
The Mortgage Loans are payment-option
adjustable-rate
first lien mortgage loans with
a negative
amortization
feature having terms to maturity at origination or
modification
of
generally not more than 30 years.
In consideration of the mutual agreements herein
contained,
the Company,
the Master
Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01...DEFINITIONS.
Whenever used in this Agreement,
the following words and phrases,
unless the context
otherwise requires, shall have the meanings specified in this
Article.
Accrued
Certificate
Interest:
With
respect
to each
Distribution
Date
and
each
Class of Class A
Certificates and Class M
Certificates,
interest accrued during the related
Interest
Accrual
Period
at the
Pass-Through
Rate
on the
Certificate
Principal
Balance
thereof
immediately
prior
to such
Distribution
Date at the
Pass-Through
Rate
for
that
Distribution Date.
The amount of Accrued
Certificate
Interest on each Class of Class A Certificates and
Class M Certificates shall be reduced by the amount of Prepayment
Interest
Shortfalls on the
Mortgage
Loans
during the prior
calendar
month to the extent not
covered by
Compensating
Interest
pursuant to
Section 3.16
and by Relief Act Shortfalls on the Mortgage Loans during
the
related
Due Period.
All such
reductions
with
respect to the
Mortgage
Loans will be
allocated
among the
Class A
Certificates
and Class M
Certificates
in
proportion
to the
amount of Accrued
Certificate
Interest
payable on such
Certificates
on such
Distribution
Date absent such reductions.
Accrued
Certificate
Interest,
with respect to any Class of Class A-2,
Class A-3 or
Class M
Certificates
for any
Distribution
Date,
shall
further be reduced by the interest
portion of
Realized
Losses
allocated
to any
Class of
Class M
Certificates
pursuant
to
Section 4.05.
Accrued
Certificate
Interest
with respect to the Class A
Certificates
and Class M
Certificates
shall
accrue on the basis of a 360-day
year and the
actual
number of days in
the related Interest Accrual Period.
If
any
interest
portion
of
a
Realized
Loss
is
allocated
to
the
Class
A-3
Certificates,
subject to the terms of the
Certificate
Policy,
the amount of the
allocated
shortfall
will be drawn under the
Certificate
Policy and
distributed to the Holders of the
Class A-3
Certificates.
In addition,
to the extent the Available
Distribution
Amount with
respect to the Class A-3 Certificates is less than Accrued
Certificate
Interest on the Class
A-3
Certificates,
other
than
as a
result
of
Prepayment
Interest
Shortfalls,
Deferred
Interest,
the Net WAC Cap Rate and Relief Act
Shortfalls,
the shortfall
will be covered by
the Certificate Policy, in accordance with its terms.
With
respect
to each
Distribution
Date
and the
Class SB
Certificates,
interest
accrued during the related Interest
Accrual Period at the
Pass-Through
Rate on the Notional
Amount
as
specified
in the
definition
of
Pass-Through
Rate,
immediately
prior to such
Distribution
Date,
reduced by any interest
shortfalls
with respect to the Mortgage
Loans,
including
Prepayment Interest
Shortfalls to the extent not covered by Compensating
Interest
pursuant to
Section 3.16
or by Excess Cash Flow pursuant to
Section 4.02(c)(iii)
and (iv).
Accrued
Certificate
Interest on the
Class SB
Certificates
shall
accrue on the basis of a
360-day year and the actual number of days in the related Interest
Accrual Period.
Adjustment
Date:
With
respect
to each
Mortgage
Loan,
each date set forth in the
related
Mortgage
Note on which an
adjustment
to the interest
rate on such
Mortgage
Loan
becomes effective.
Available
Distribution
Amount:
As to any Distribution
Date, an amount equal to (a)
the sum of (i) the amount
relating to the Mortgage Loans on deposit in the Custodial
Account
as of the close of business on the immediately
preceding
Determination
Date,
including any
Subsequent
Recoveries,
and amounts deposited in the Custodial Account in connection with
the
substitution of Qualified
Substitute
Mortgage Loans,
(ii) the amount of any Advance made on
the immediately
preceding
Certificate
Account Deposit Date,
(iii) any amount
deposited in
the
Certificate
Account on the related
Certificate
Account
Deposit
Date
pursuant to the
second
paragraph of Section
3.12(a),
(iv) any amount
deposited in the Certificate
Account
pursuant
to Section
4.07 or Section
9.01,
(v) any amount
that the Master
Servicer is not
permitted
to withdraw
from the
Custodial
Account or the
Certificate
Account
pursuant to
Section
3.16(e),
(vi) any amount
received
by the
Trustee
pursuant
to the Surety Bond in
respect of such
Distribution
Date and (vii) the
proceeds of any Pledged Assets
received by
the Master
Servicer,
reduced by (b) the sum as of the close of business
on the
immediately
preceding
Determination
Date of (v) any payments or
collections
consisting
of
Prepayment
Charges on the Mortgage Loans that were received
during the related
Prepayment
Period;
(w)
aggregate
Foreclosure Profits,
(x) the Amount Held for Future Distribution,
and (y) amounts
permitted to be
withdrawn by the Master
Servicer
from the
Custodial
Account in respect of
the Mortgage Loans pursuant to clauses
(ii)-(x),
inclusive,
of Section
3.10(a) and (z) the
Certificate Insurer Premium paid to the Certificate Insurer.
Available
Funds Rate: With respect to any
Distribution
Date, a per annum rate equal
to (i) the product of (x) the
Interest
Remittance
Amount
plus full and
partial
Principal
Prepayments
available to be distributed
on such
Distribution
Date and (y) a fraction,
the
numerator
of which is 12 and the
denominator
of which
is the
aggregate
Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date,
adjusted to an actual/360 rate.
Basis
Risk
Shortfall:
With
respect
to
the
Class
A
Certificates
and
Class
M
Certificates
and any
Distribution
Date, the sum of (a) an amount equal to the excess of (x)
Accrued
Certificate
Interest for such Class of
Certificates
calculated at a per annum rate
equal to LIBOR plus the related
Margin for such
Distribution
Date (not to exceed 10.00% per
annum with respect to any Offered
Certificate other than the Class A-3 Certificates,
and not
to exceed
11.50% per annum
with
respect to the Class A-3
Certificates),
over (y)
Accrued
Certificate
Interest
for such Class
calculated
assuming
the Net Rate Cap was equal to the
Net WAC Cap Rate for such
Distribution
Date,
(b) any
shortfalls for such
Class calculated
pursuant
to
clause
(a) above
remaining
unpaid
from
prior
Distribution
Dates,
and
(c) interest
on the amount in clause (b) to the extent not
previously
paid from Excess Cash
Flow or the Yield
Maintenance
Agreements from the Distribution Date on which such amount was
incurred at a per annum rate equal to One-Month
LIBOR plus the related
Margin (not to exceed
10.00%
per
annum
with
respect
to
any
Offered
Certificate
other
than
the
Class
A-3
Certificates,
and not to exceed 11.50% per annum with respect to the Class A-3
Certificates)
for the current Distribution Date.
Book-Entry Certificate:
The Class A Certificates and Class M Certificates.
Capitalization
Reimbursement
Amount:
As to any
Distribution
Date,
the
amount of
Advances
or
Servicing
Advances
that were
added to the
Stated
Principal
Balance
of the
Mortgage
Loans
during the prior
calendar
month and
reimbursed
to the Master
Servicer or
Subservicer on or prior to such Distribution Date pursuant to
Section
3.10(a)(vii),
plus the
Capitalization
Reimbursement
Shortfall
Amount
remaining
unreimbursed
from
any
prior
Distribution
Date and
reimbursed to the Master
Servicer or
Subservicer on or prior to such
Distribution Date.
Capitalization
Reimbursement
Shortfall
Amount:
As to any
Distribution
Date,
the
amount,
if any, by which the amount of Advances or Servicing
Advances that were added to the
Stated
Principal
Balance of the Mortgage
Loans during the preceding
calendar month exceeds
the
amount
of
principal
payments
on
the
Mortgage
Loans
included
in
the
Available
Distribution Amount for that Distribution Date.
Certificate:
Any Class A, Class M, Class SB or Class R Certificate.
Certificate
Account:
The
separate
account
or
accounts
created
and
maintained
pursuant to Section 4.01 of the Standard Terms,
which shall be entitled
"DEUTSCHE BANK TRUST
COMPANY
AMERICAS,
as trustee,
in trust for the registered
holders of Residential
Accredit
Loans,
Inc.,
Mortgage
Asset-Backed
Pass-Through
Certificates,
Series 2006-QH1" and which
must be an Eligible Account.
Certificate
Insurer:
Ambac
Assurance
Corporation,
a
Wisconsin-domiciled
stock
insurance corporation or any successor thereto.
Certificate
Insurer
Account:
An account of the
Certificate
Insurer
maintained at
Citibank,
N.A. (ABA No.
021000089),
Account No.
40609486,
or such other account as may be
designated
by the
Certificate
Insurer to the Trustee in writing not less than five Business
Days prior to the related Distribution Date.
Certificate Insurer Default:
As defined in Section 4.10 (h).
Certificate
Insurer Premium:
The premium payable to the Certificate
Insurer on each
Distribution
Date in an
amount
equal
to one
twelfth
of the
product
of the
Certificate
Insurer
Premium
Rate and the
Certificate
Principal
Balance of the Class A-3
Certificates
immediately prior to such Distribution Date.
Certificate
Insurer
Premium
Modified
Rate:
With
respect
to
any
date
of
determination,
the
Certificate
Insurer
Premium
Rate
times a
fraction
equal
to (x) the
Certificate
Principal
Balance
of the
Class A-3
Certificates
as of such date over (y) the
aggregate Stated Principal Balance of the Mortgage Loans as of such
date.
Certificate
Insurer Premium Rate: With respect to any Distribution
Date, the premium
percentage
set
forth
in
the
commitment
letter
dated
November
29,
2006
between
the
Certificate Insurer and Residential Funding.
Certificate Policy: The Certificate
Guaranty Insurance Policy (No. AB1044BE),
issued
by the
Certificate
Insurer
in
favor
of the
Trustee
for the
benefit
of the
Class
A-3
Certificates.
Certificate
Principal
Balance:
With respect to any Class A
Certificate
or Class M
Certificate,
on any date of
determination,
an amount
equal to (i) the Initial
Certificate
Principal
Balance of such
Certificate as specified on the face thereof minus (ii) the sum of
(x) the aggregate of all amounts
previously
distributed with respect to such Certificate (or
any predecessor
Certificate) and applied to reduce the Certificate
Principal Balance thereof
pursuant
to
Section
4.02(c)
and (y) in the case of any
Class of Class
A-2,
Class A-3 or
Class M
Certificates,
the
aggregate of all
reductions
in
Certificate
Principal
Balance
deemed to have occurred in connection
with Realized
Losses which were
previously
allocated
to such
Certificate (or any
predecessor
Certificate)
pursuant to Section 4.05,
other than
any Insured
Payment in respect of such amount that has been paid by the
Certificate
Insurer
and is included in clause (x) above;
provided,
that with respect to any
Distribution
Date,
the
Certificate
Principal
Balance of the Class A-2,
Class A-3, Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5
Certificates,
in that order, will be increased to the extent of
Realized
Losses
previously
allocated
thereto and remaining
unreimbursed,
but only to the
extent of Subsequent
Recoveries
received during the preceding
calendar month.
With respect
to
each
Class
SB
Certificate,
on any
date
of
determination,
an
amount
equal
to the
Percentage
Interest
evidenced by such Certificate,
multiplied by an amount equal to (i) the
excess,
if any, of (A) the then
aggregate
Stated
Principal
Balance of the Mortgage
Loans
over (B) the then aggregate
Certificate
Principal
Balance of the Class A
Certificates
and
Class M Certificates then
outstanding,
which represents the sum of (i) the Initial Principal
Balance of the REMIC II Regular
Interest
SB-PO,
as reduced
by
Realized
Losses
allocated
thereto and payments
deemed made thereon,
and (ii) accrued and unpaid
interest on the REMIC
II Regular
Interest
SB-IO,
as reduced by Realized
Losses
allocated
thereto.
The Class R
Certificates will not have a Certificate Principal Balance.
Class A Certificate:
Any one of the Class A-1,
Class A-2 or Class A-3
Certificates,
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially in the
form annexed to the
Standard
Terms as Exhibit A, senior to the Class M
Certificates,
Class
SB Certificates and Class R Certificates
with respect to distributions
and the allocation of
Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular
interest"
in REMIC II for
purposes of the REMIC
Provisions
and (ii) the right to
receive Basis Risk Shortfalls.
Class A-3 Yield Maintenance Agreement:
The yield maintenance agreement,
entered into
for the
benefit of the Class A-3
Certificates,
dated as of the
Closing
Date
between
the
Yield Maintenance Agreements Provider and the Trustee.
Class
A/Class
M
Yield
Maintenance
Agreement:
The
yield
maintenance
agreement,
entered
into
for the
benefit
of the
Class A and
Class M
Certificates,
dated
as of the
Closing Date between the Yield Maintenance Agreements Provider and
the Trustee.
Class A Principal
Distribution
Amount:
With
respect to any
Distribution
Date (i)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for that Distribution
Date, the Principal
Distribution
Amount for that Distribution Date or
(ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that
Distribution
Date, the lesser of:
(i) the Principal Distribution Amount for that Distribution Date;
and
(ii)
the excess, if any, of (A) the aggregate
Certificate
Principal Balance of the
Class A Certificates
immediately
prior to that
Distribution Date over (B) the lesser of
(x) the
product of (1) the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be
made on that
Distribution
Date and
(y) the
excess,
if any,
of the
aggregate
Stated
Principal
Balance of the Mortgage Loans after giving effect to
distributions
to be made
on that Distribution Date, over the Overcollateralization Floor.
Class A-1
Certificate:
The Class
A-1
Certificates,
executed
by the
Trustee
and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as Exhibit A.
Class
A-1
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.190% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.380% per annum.
Class A-2
Certificate:
The Class
A-2
Certificates,
executed
by the
Trustee
and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as Exhibit A.
Class
A-2
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.230% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.460% per annum.
Class A-3
Certificate:
The Class
A-3
Certificates,
executed
by the
Trustee
and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as Exhibit A.
Class
A-3
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.200% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.400% per annum.
Class A-P Certificates:
None.
Class M
Certificates:
Collectively,
the Class M-1,
Class M-2, Class M-3, Class M-4
and Class M-5 Certificates.
Class M-1 Certificate:
Any one of the Class M-1 Certificates
executed by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed to the
Standard
Terms as Exhibit B, senior to the Class M-2,
Class M-3, Class M-4, Class M-5, Class
SB and Class R
Certificates
with respect to
distributions
and the
allocation
of Realized
Losses as set forth in Section 4.05, and
evidencing (i) an interest
designated as a "regular
interest"
in REMIC II for
purposes
of the REMIC
Provisions
and (ii) the right to
receive
Basis Risk Shortfalls.
Class
M-1
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.420% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.630% per annum.
Class M-1 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution Date after distribution of the Class A Principal
Distribution
Amount or (ii) on
or after the Stepdown
Date if a Trigger
Event is not in effect for that
Distribution
Date,
the lesser of:
(i)....the remaining
Principal
Distribution
Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A
Certificates
(after
taking
into
account the payment of the Class A
Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate
Principal
Balance
of the
Class M-1
Certificates
immediately
prior to that
Distribution
Date
over
(B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage and (2) the
aggregate
Stated
Principal
Balance
of
the
Mortgage
Loans
after
giving
effect
to
distributions
to be made
on that
Distribution
Date
and
(y) the
excess,
if any,
of the
aggregate
Stated
Principal
Balance
of
the
Mortgage
Loans
after
giving
effect
to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-2 Certificate:
Any one of the Class M-2 Certificates
executed by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed to the
Standard
Terms as Exhibit
B,
senior to the Class M-3,
Class M-4,
Class M-5,
Class SB and
Class R Certificates
with respect to
distributions
and the allocation of Realized Losses as
set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular
interest"
in REMIC II for
purposes
of the REMIC
Provisions
and (ii) the right to receive
Basis Risk
Shortfalls.
Class
M-2
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.620% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.930% per annum.
Class M-2 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date
after
distribution
of the
Class A
Principal
Distribution
Amount
and
Class M-1
Principal
Distribution
Amount or (ii) on or after the Stepdown
Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution
Amount for that Distribution Date after
distribution
of the
Class A
Principal
Distribution
Amount
and
the
Class M-1
Principal
Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A
Certificates
and
Class M-1
Certificates
(after taking into account
the
payment
of the
Class A
Principal
Distribution
Amount
and
the
Class M-1
Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate
Principal Balance of
the Class M-2
Certificates
immediately
prior to that
Distribution Date over (B) the lesser
of (x) the
product of (1) the
applicable
Subordination
Percentage
and
(2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be
made on that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the
Mortgage
Loans
after
giving
effect
to
distributions
to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-3 Certificate:
Any one of the Class M-3 Certificates
executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit
B,
senior to the Class
M-4,
Class
M-5,
Class SB and
Class R
Certificates
with
respect to
distributions
and the allocation of Realized Losses as set forth in Section 4.05,
and
evidencing
(i) an interest
designated as a "regular
interest" in REMIC II for purposes
of the REMIC Provisions and (ii) the right to receive Basis Risk
Shortfalls.
Class
M-3
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 1.100% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 1.650% per annum.
Class M-3 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution Date after distribution of the Class A Principal
Distribution Amount,
Class M-1
Principal
Distribution
Amount
and
Class M-2
Principal
Distribution
Amount or (ii) on or
after the Stepdown Date if a Trigger Event is not in effect for
that
Distribution
Date,
the
lesser of:
(i)....the remaining
Principal
Distribution
Amount for that Distribution Date after
distribution of the Class A Principal
Distribution Amount,
Class M-1 Principal
Distribution
Amount and Class M-2 Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A,
Class M-1 and Class M-2
Certificates
(after taking into account the
payment of the Class A Principal
Distribution
Amount, the Class M-1
Principal
Distribution
Amount
and the
Class M-2
Principal
Distribution
Amount
for that
Distribution
Date) and
(2) the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable
Subordination
Percentage and (2) the
aggregate Stated Principal
Balance of the Mortgage Loans after giving
effect to distributions to be made on that
Distribution
Date and (y) the excess,
if any, of
the
aggregate
Stated
Principal
Balance
of the
Mortgage
Loans
after
giving
effect
to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-4 Certificate:
Any one of the Class M-4 Certificates
executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit
B,
senior to the
Class
M-5,
Class SB and Class R
Certificates
with
respect
to
distributions
and the
allocation
of
Realized
Losses as set
forth in
Section
4.05,
and
evidencing
(i) an interest
designated
as a "regular
interest"
in REMIC II for purposes of
the REMIC Provisions and (ii) the right to receive Basis Risk
Shortfalls.
Class
M-4
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 1.450% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 2.175% per annum.
Class M-4 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution Date after distribution of the Class A Principal
Distribution Amount,
Class M-1
Principal
Distribution
Amount,
Class M-2
Principal
Distribution
Amount
and
Class M-3
Principal
Distribution
Amount or (ii) on or after the
Stepdown
Date if a Trigger
Event is
not in effect for that Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution
Amount for that Distribution Date after
distribution of the Class A Principal
Distribution Amount,
Class M-1 Principal
Distribution
Amount,
Class M-2 Principal
Distribution Amount and Class M-3 Principal Distribution Amount;
and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A,
Class M-1,
Class M-2 and Class M-3
Certificates
(after taking into
account the payment of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution Amount and the Class M-3 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate
Principal Balance of
the Class M-4
Certificates
immediately
prior to that
Distribution Date over (B) the lesser
of (x) the
product of (1) the
applicable
Subordination
Percentage
and
(2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be
made on that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the
Mortgage
Loans
after
giving
effect
to
distributions
to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-5 Certificate:
Any one of the Class M-5 Certificates
executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B, senior to the Class SB and Class R Certificates
with respect to distributions
and
the
allocation
of
Realized
Losses as set forth in
Section
4.05,
and
evidencing
(i) an
interest
designated as a "regular
interest" in REMIC II for purposes of the REMIC Provisions
and (ii) the right to receive Basis Risk Shortfalls.
Class
M-5
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination
Date, 1.50% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 2.250% per annum.
Class M-5 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution Date after distribution of the Class A Principal
Distribution Amount,
Class M-1
Principal Distribution Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal
Distribution
Amount
and
Class M-4
Principal
Distribution
Amount
or (ii) on or after the
Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution
Amount for that Distribution Date after
distribution of the Class A Principal
Distribution Amount,
Class M-1 Principal
Distribution
Amount, the Class M-2 Principal
Distribution Amount,
Class M-3 Principal Distribution Amount
and Class M-4 Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A,
Class M-1,
Class M-2,
Class M-3 and Class M-4
Certificates
(after
taking into account the payment of the Class A Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount
and the
Class M-4
Principal
Distribution
Amount
for that
Distribution
Date) and (2) the
Certificate
Principal Balance of the Class M-5
Certificates
immediately
prior to that
Distribution
Date over
(B) the
lesser
of
(x) the
product
of
(1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal
Balance of
the Mortgage Loans after giving effect to distributions to be made
on that
Distribution
Date
and (y) the excess,
if any, of the aggregate Stated
Principal
Balance of the Mortgage Loans
after
giving
effect
to
distributions
to be made
on
that
Distribution
Date,
over
the
Overcollateralization Floor.
Class R Certificate:
Any one of the Class R-I
Certificates,
Class R-II Certificates
or Class R-X Certificates.
Class R-I Certificate:
Any one of the Class R-I Certificates
executed by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed to the
Standard
Terms as Exhibit D and
evidencing an interest
designated as a "residual
interest"
in REMIC I for purposes of the REMIC Provisions.
Class
R-II
Certificate:
Any one of the
Class
R-II
Certificates
executed
by the
Trustee and
authenticated by the Certificate
Registrar
substantially in the form annexed to
the
Standard
Terms as
Exhibit
D and
evidencing
an
interest
designated
as a
"residual
interest" in REMIC II for purposes of the REMIC Provisions.
Class R-X Certificate:
Any one of the Class R-X Certificates
executed by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed to the
Standard
Terms as Exhibit D and
evidencing an interest
designated as a "residual
interest"
in REMIC III for purposes of the REMIC Provisions.
Class SB
Certificate:
Any one of the Class SB
Certificates
executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit R,
subordinate to the Class A Certificates
and Class M Certificates
with respect to
distributions
and the
allocation
of
Realized
Losses as set
forth in
Section
4.05,
and
evidencing
ownership of the REMIC III Regular Interest,
together with certain obligations to
pay Basis Risk Shortfalls.
Closing Date:
November 29, 2006.
Corporate
Trust
Office:
The
principal
office
of
the
Trustee
at
which
at any
particular
time
its
corporate
trust
business
with
respect
to this
Agreement
shall be
administered,
which
office at the date of the
execution
of this
instrument
is located at
1761 East St. Andrew Place, Santa Ana, California 92705-4934,
Attention:
Residential Funding
Company, LLC, RALI 2006-QH1.
Cumulative
Insurance
Payments:
As of any time of
determination,
(i) the aggregate
amount
of
all
Insured
Payments
previously
made
by the
Certificate
Insurer
under
the
Certificate
Policy plus interest
thereon from the date such amounts became due until paid in
full,
at a rate of
interest
equal
to the
Late
Payment
Rate
minus
(ii)
the sum of the
aggregate of all
payments
previously
made to the
Certificate
Insurer
pursuant to Section
4.02 hereof as reimbursement for such amounts.
Cut-off Date Balance:
$340,487,638.08.
Cut-off Date:
November 1, 2006.
Deferred
Interest:
The
amount
of
interest
which
is
deferred
and
added to the
principal
balance of a Mortgage Loan due to negative
amortization.
For purposes of REMIC I,
Deferred
Interest
shall be
allocated
to REMIC I Regular
Interest
LT1 in reduction of the
portion
of
the
Uncertificated
Accrued
Interest
thereon
distributable
on
the
related
Distribution
Date and shall
result in an increase in the
principal
balance
thereof to the
extent of such reduction.
Deficiency Amount:
As defined in the Certificate Policy.
Determination Date:
With respect to any Distribution Date, the second Business Day
prior to each Distribution Date.
Discount Net Mortgage Rate:
Not applicable.
Due Period:
With respect to each Distribution
Date, the calendar month in which such
Distribution Date occurs.
Excess Bankruptcy Loss:
Not applicable.
Excess Cash Flow:
With respect to any
Distribution
Date, an amount equal to the sum
of (A) the excess of (i) the
Available
Distribution
Amount for that
Distribution Date over
(ii) the sum of (a) the
Interest
Distribution
Amount for that
Distribution
Date,
(b) the
lesser of
(1) the
aggregate
Certificate
Principal
Balance
of
Class A
Certificates
and
Class M
Certificates
immediately
prior
to such
Distribution
Date and
(2) the
Principal
Remittance
Amount for that
Distribution
Date to the extent not
applied to pay
interest on
the
Class A
Certificates
and
Class M
Certificates
on
such
Distribution
Date
and
(c)
reimbursements
to
the
Certificate
Insurer
for
Insured
Payments
and
(B) the
Overcollateralization Reduction Amount, if any, for that
Distribution Date.
Excess Fraud Loss:
Not applicable.
Excess
Overcollateralization
Amount:
With
respect to any
Distribution
Date,
the
excess,
if any, of (a) the
Overcollateralization
Amount on such
Distribution Date over (b)
the Required Overcollateralization Amount.
Excess Special Hazard Loss:
Not applicable.
Excess Subordinate Principal Amount:
Not applicable.
Expense Fee Rate:
With respect to any Mortgage Loan as of any date of
determination,
the sum of the
Servicing
Fee
Rate and the rate per
annum
at which
the
Subservicing
Fee
accrues.
Gross Margin:
With respect to each Mortgage Loan,
the fixed
percentage set forth in
the related
Mortgage Note and indicated on the Mortgage Loan Schedule
attached hereto as the
"NOTE
MARGIN,"
which
percentage
is added to the related Index on each
Adjustment
Date to
determine
(subject to rounding in accordance
with the related
Mortgage
Note,
the Periodic
Cap, the Maximum
Mortgage Rate and the Minimum
Mortgage
Rate) the interest rate to be borne
by such Mortgage Loan until the next Adjustment Date.
Index:
With respect to any Mortgage Loan and as to any Adjustment Date
therefor,
the
related index as stated in the related Mortgage Note.
Initial Subordinate Class Percentage:
Not applicable.
Insured Payment:
With respect to the Class A-3
Certificates,
as of any Distribution
Date,
the
Deficiency
Amount,
if any, for such
Distribution
Date paid by the
Certificate
Insurer pursuant to the Certificate Policy.
Interest Accrual Period:
With respect to the Distribution
Date in December 2006, the
period
commencing
on the
Closing
Date and
ending
on the day
immediately
preceding
the
Distribution
Date in
December
2006,
and with
respect to any
Distribution
Date after the
Distribution
Date in December 2006,
the period
commencing on the
Distribution
Date in the
month
immediately
preceding the month in which such
Distribution
Date occurs and ending on
the day immediately preceding such Distribution Date.
Interest
Carryforward
Amount:
With respect to any Class of Class A Certificates
or
Class M Certificates
and any Distribution
Date, the sum of (a) on any
Distribution
Date on
which the Pass-Through
Rate is equal to the Available Funds Rate, the excess,
if any, of (i)
Accrued
Certificate
Interest for such Class assuming the Net Rate Cap for such
Distribution
Date was equal to the Net WAC Cap Rate
over
(ii)
Accrued
Certificate
Interest
calculated
based on such
Available
Funds Rate and (b)
interest
on the amount
calculated
pursuant to
clause
(a)
for
any
prior
Distribution
Date
that
remains
unreimbursed
at the
related
Pass-Through Rate for such Distribution Date.
Interest
Distribution
Amount:
For
any
Distribution
Date,
the
aggregate
of the
amounts payable pursuant to Section 4.02(c)(i).
Interest Only Certificates:
None.
Interest
Remittance
Amount:
With respect to any
Distribution
Date, the portion of
the
Available
Distribution
Amount
for such
Distribution
Date
attributable
to
interest
received or advanced with respect to the Mortgage
Loans,
net of the Expense Fee Rate and the
Certificate Insurer Premium.
Late Payment Rate: As defined in the Certificate Policy.
LIBOR:
With
respect to any
Distribution
Date,
the
arithmetic
mean of the London
interbank
offered rate
quotations for one-month
U.S.
Dollar
deposits,
expressed on a per
annum basis, determined in accordance with Section 1.02.
LIBOR
Business
Day:
Any day other
than (i) a
Saturday
or Sunday or (ii) a day on
which
banking
institutions
in London,
England are required or
authorized
to by law to be
closed.
LIBOR Certificates:
The Class A Certificates and Class M Certificates.
LIBOR Rate Adjustment Date: With respect to each
Distribution
Date, the second LIBOR
Business Day immediately preceding the commencement of the related
Interest Accrual Period.
Liquidation
Proceeds:
As
defined in the
Standard
Terms but
excluding
Subsequent
Recoveries.
Margin: The Class A-1 Margin,
Class A-2 Margin,
Class A-3 Margin,
Class M-1 Margin,
Class M-2 Margin, Class M-3 Margin, Class M-4 Margin and Class M-5
Margin , as applicable.
Marker Rate: With respect to the Class SB
Certificates
or REMIC II Regular
Interest
SB-IO and any
Distribution
Date,
a per
annum
rate
equal to two (2)
times
the
weighted
average of the
Uncertificated
REMIC I
Pass-Through
Rates for REMIC I Regular
Interest LT2
and REMIC I Regular Interest LT3.
Maturity
Date:
December 26, 2036, the
Distribution
Date in the month of the latest
scheduled maturity date of any Mortgage Loan.
Maximum
Mortgage
Rate:
As to any
Mortgage
Loan,
the per annum rate
indicated in
Mortgage
Loan
Schedule
hereto
attached
hereto as the "NOTE
CEILING,"
which
rate is the
maximum
interest
rate that may be
applicable
to such
Mortgage Loan at any time during the
life of such Mortgage Loan.
Maximum Net
Mortgage
Rate:
As to any Mortgage
Loan and any date of
determination,
the Maximum Mortgage Rate minus the Expense Fee Rate.
Mortgage Loan Schedule:
The list or lists of the Mortgage
Loans
attached
hereto as
Exhibit
One ( and as
amended
from
time
to time
to
reflect
the
addition
of
Qualified
Substitute Mortgage Loans),
which list or lists shall set forth the following
information as
to each Mortgage Loan:
(i)....the Mortgage Loan identifying number ("RFC LOAN #");
(ii)...the maturity of the Mortgage Note ("MATURITY DATE");
(iii)..the Mortgage Rate as of origination ("ORIG RATE");
(iv)...the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(v)....the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vi)...the
scheduled
monthly
payment of
principal,
if any, and interest as of the
Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I");
(vii)..the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(viii).the Maximum Mortgage Rate ("NOTE CEILING");
(ix)...the maximum Net Mortgage Rate ("NET CEILING");
(x)....the Note Margin ("NOTE MARGIN");
(xi)...the Note Margin ("NOTE MARGIN");
(xii)..the Periodic Cap ("PERIODIC DECR" or "PERIODIC INCR");
(xiii).the rounding of the
semi-annual
or annual
adjustment
to the
Mortgage
Rate
("NOTE METHOD");
(xiv)..the Loan-to-Value Ratio at origination ("LTV");
(xv)...the rate at which the
Subservicing
Fee accrues
("SUBSERV
FEE") and at which
the Servicing Fee accrues ("MSTR SERV FEE");
(xvi)..a code "T," "BT" or "CT"
under the column "LN
FEATURE,"
indicating
that the
Mortgage Loan is secured by a second or vacation residence; and
(xvii).a code "N" under the column "OCCP CODE,"
indicating
that the Mortgage Loan is
secured by a non-owner occupied residence.
Such schedule may consist of multiple
reports that
collectively set forth all of the
information required.
Mortgage
Rate:
With respect to any
Mortgage
Loan,
the interest
rate borne by the
related Mortgage Note, or any modification
thereto other than a Servicing
Modification.
The
Mortgage
Rate on each
Mortgage
Loan will
adjust on each
Adjustment
Date to equal the sum
(rounded
to the nearest
multiple of one eighth of one percent
(0.125%) or up to the nearest
one-eighth
of one
percent,
which are
indicated
by a "U" on the
Mortgage
Loan
Schedule,
except in the case of the Mortgage
Loans
indicated by an "X" on the Mortgage
Loan
Schedule
under the heading
"NOTE
METHOD"),
of the related
Index plus the Note Margin,
in each case
subject to the applicable Periodic Cap, Maximum Mortgage Rate and
Minimum Mortgage Rate.
Net
Mortgage
Rate:
With
respect
to
any
Mortgage
Loan
as
of
any
date
of
determination,
a per annum rate equal to the Mortgage
Rate for such Mortgage Loan as of such
date minus the related Expense Fee Rate.
Net
Rate
Cap:
With
respect
to any
Class
of
Class A
Certificates
and
Class M
Certificates
and any
Distribution
Date,
the
least of (i) the Net WAC Cap
Rate,
(ii) the
Available
Funds
Rate,
and (iii) (A) with
respect to the Class
A-1,
Class A-2 and Class M
Certificates,
10.000% per annum and (B) with
respect to the Class A-3
Certificates
11.500%
per annum.
Net WAC Cap Rate:
With
respect
to the
Offered
Certificates
and any
Distribution
Date,
a per annum rate (which will not be less than zero)
equal to the
weighted
average of
the Net Mortgage
Rates of the Mortgage
Loans using the Net Mortgage
Rates in effect on such
Mortgage
Loans
during
the
related
Due
Period
(minus,
with
respect
to the
Class
A-3
Certificates,
the Certificate Insurer Premium Rate),
multiplied by a fraction,
expressed as
a percentage,
the numerator of which is 30 and the
denominator of which is the actual number
of days in the related Interest Accrual Period for such
Certificates.
Note Margin:
With respect to each Mortgage
Loan,
the fixed
percentage set forth in
the related
Mortgage
Note and
indicated in Exhibit One hereto as the "NOTE
MARGIN,"
which
percentage
is added to the Index on each
Adjustment
Date to determine
(subject to rounding
in accordance
with the related
Mortgage
Note,
the Periodic Cap, the Maximum
Mortgage Rate
and the Minimum
Mortgage
Rate) the interest rate to be borne by such Mortgage Loan until the
next Adjustment Date.
Notional
Amount:
With respect to the Class SB
Certificates
or the REMIC II Regular
Interest SB-IO,
immediately
prior to any Distribution
Date is equal to the aggregate of the
Uncertificated Principal Balances of the REMIC I Regular Interests.
Offered Certificates:
The Class A Certificates and the Class M Certificates.
Optional
Termination
Date:
Any
Distribution
Date on or after which the
aggregate
Stated
Principal
Balance
(after
giving
effect
to
distributions
to
be
made
on
such
Distribution Date) of the Mortgage Loans is less than 10.00% of the
Cut-off Date Balance.
Overcollateralization
Amount:
With respect to any Distribution
Date, the excess, if
any, of (a) the
aggregate
Stated
Principal
Balance of the
Mortgage
Loans
before
giving
effect to
distributions
of principal to be made on such
Distribution
Date over (b) the sum
of (i) the aggregate
Certificate
Principal
Balance of the Class A
Certificates and Class M
Certificates
before
taking
into
account
distributions
of
principal
to be
made on such
Distribution
Date and (ii) any Interest
Carryforward
Amounts
(without
taking into account
interest payable thereon) payable to such Certificates on such
Distribution Date.
Overcollateralization
Floor:
An amount equal to the product of 0.50% and the Cut-off
Date Balance.
Overcollateralization
Increase
Amount:
With respect to any
Distribution
Date, the
lesser of
(a) Excess
Cash Flow for that
Distribution
Date (to the extent not used to cover
the amounts described in clauses (b)(v) and
(vi) of the definition of Principal
Distribution
Amount
as
of
such
Distribution
Date)
and
(b) the
excess
of
(1) the
Required
Overcollateralization
Amount for such
Distribution
Date over (2) the
Overcollateralization
Amount for such Distribution Date.
Overcollateralization
Reduction
Amount:
With
respect to any
Distribution
Date on
which the
Excess
Overcollateralization
Amount
is,
after
taking
into
account
all other
distributions
to
be
made
on
such
Distribution
Date,
greater
than
zero,
the
Overcollateralization
Reduction
Amount
shall
be
equal
to
the
l
of
(i) the
Excess
Overcollateralization
Amount for that
Distribution
Date and (ii) the
Principal
Remittance
Amount on such Distribution Date.
Pass-Through
Rate: With respect to each class of
Certificates
(other than the Class
SB Certificates and Class R Certificates),
and any Distribution
Date, a per annum rate equal
to the lesser of (i) LIBOR plus the
related
Margin for such
Distribution
Date and (ii) the
Net Rate Cap for such Distribution Date.
With
respect
to the
Class SB
Certificates
and any
Distribution
Date or REMIC II
Regular
Interest
SB-IO, a rate per annum equal to the
percentage
equivalent of a fraction,
the
numerator of which is the sum of the amounts
calculated
pursuant to clauses (i) through
(iii) below,
and the denominator of which is the aggregate
principal
balance of the REMIC I
Regular
Interests.
For
purposes
of
calculating
the
Pass-Through
Rate for the
Class SB
Certificates
or the REMIC II Regular
Interest
SB-IO,
the
numerator is equal to the sum of
the following components:
(i)....the
Uncertificated
Pass-Through
Rate for REMIC I Regular
Interest LT1 minus
the Marker Rate,
applied to a notional amount equal to the
Uncertificated
Principal Balance
of REMIC I Regular Interest LT1;
(ii)...the
Uncertificated
Pass-Through
Rate for REMIC I Regular
Interest LT2 minus
the Marker Rate,
applied to a notional amount equal to the
Uncertificated
Principal Balance
of REMIC I Regular Interest LT2; and
(iii)..the
Uncertificated
Pass-Through
Rate for REMIC I Regular
Interest LT4 minus
twice the Marker
Rate,
applied to a notional
amount equal to the
Uncertificated
Principal
Balance of REMIC I Regular Interest LT4.
Prepayment
Assumption:
The
prepayment
assumption
to be used for
determining
the
accrual of original issue
discount and premium and market
discount on the
Certificates
for
federal
income tax
purposes,
which assumes a constant
prepayment
rate of 25% per annum of
the then outstanding principal balance of the Mortgage Loans.
Prepayment
Charge:
With respect to any Mortgage
Loan,
the charges or premiums,
if
any,
received
in
connection
with a full or partial
prepayment
of such
Mortgage
Loan in
accordance with the terms thereof.
Prepayment
Charge
Loan:
Any
Mortgage
Loan for which a
Prepayment
Charge
may be
assessed
and to which such
Prepayment
Charge the Class SB
Certificates
are
entitled,
as
indicated on the Mortgage Loan Schedule.
Principal
Distribution
Amount:
With respect to any Distribution Date, the lesser of
(a) the
excess of (x)
Available
Distribution
Amount
over (y) the sum of (1) the
Interest
Distribution
Amount
and (2)
reimbursements
to the
Certificate
Insurer
for
the
Insured
Payments made with respect to interest and (b) the sum of:
(i)....the
principal
portion of each
Monthly
Payment
received
or
Advanced
with
respect to the related Due Period on each Outstanding Mortgage
Loan;
(ii)...the
Stated
Principal
Balance of any
Mortgage
Loan
repurchased
during the
related
Prepayment
Period (or deemed to have been so repurchased in accordance
with Section
3.07(b))
pursuant
to
Section
2.02,
2.03,
2.04 or 4.07 and the
amount
of any
shortfall
deposited in the Custodial
Account in connection with the
substitution of a Deleted Mortgage
Loan pursuant to Section 2.03 or 2.04 during the prior calendar
month;
(iii)..the
principal
portion
of
all
other
unscheduled
collections,
other
than
Subsequent
Recoveries,
on the Mortgage
Loans
received (or deemed to have been so received)
during the prior calendar month or, in the case of Principal
Prepayments in Full,
during the
related Prepayment Period, including,
without limitation,
Curtailments,
Insurance Proceeds,
Liquidation
Proceeds,
REO
Proceeds
and,
except to the extent
applied to offset
Deferred
Interest,
Principal
Prepayments,
to the extent applied by the Master Servicer as recoveries
of principal pursuant to Section 3.14;
(iv)...the
lesser
of
(A) Subsequent
Recoveries
for
such
Distribution
Date
and
(B) the
principal
portion of any Realized Losses
allocated to the Class M Certificates on a
prior Distribution Date and remaining unpaid;
(v)....the lesser of (A) the
sum of (1) the
Excess
Cash Flow for such
Distribution
Date (to the extent not used pursuant to clause (iv) of this
definition on such
Distribution
Date) and (2) payments
received by the Trustee
under the Class
A/Class M Yield
Maintenance
Agreement
in respect of Realized
Losses to the extent
necessary
to maintain
the
Required
Overcollateralization
Amount and (B) the
principal
portion of any Realized
Losses incurred
(or deemed to have been incurred) on any Mortgage
Loans in the calendar month
preceding such
Distribution Date that are allocated to any Class of Certificates;
and
(vi)...the
lesser of (a) the
Excess
Cash Flow for such
Distribution
Date,
to the
extent not used pursuant to clause (v) of this definition on such
Distribution
Date, and (b)
the amount of any Overcollateralization Increase Amount for such
Distribution Date;
minus
(vii)..(A)
the
amount
of
any
Overcollateralization
Reduction
Amount
for
such
Distribution
Date and (B) the
amount of any
Capitalization
Reimbursement
Amount
for such
Distribution Date.
Principal Only Certificates:
None.
Principal
Remittance
Amount:
With
respect to any
Distribution
Date,
all amounts
described in clauses (b)(i) through (iii) of the definition of
Principal
Distribution
Amount
for that Distribution Date.
Record
Date:
With
respect
to each
Distribution
Date and each Class of Book Entry
Certificates,
the Business Day
immediately
preceding such
Distribution
Date. With respect
to each Class of
Definitive
Certificates,
the close of business on the last Business Day of
the month next preceding the month in which the related
Distribution
Date occurs,
except in
the case of the first Record Date which shall be the Closing Date.
Regular Certificates:
The Class A, Class M and Class SB Certificates.
Relief Act:
The Servicemembers Civil Relief Act, as amended.
Relief Act
Shortfalls:
Interest
shortfalls on the Mortgage Loans resulting from the
Relief Act or similar legislation or regulations.
REMIC I: The
segregated
pool of assets with respect to which a REMIC
election is to
be made, consisting of:
(i)....the Mortgage Loans and the related Mortgage Files,
(ii)...all payments
and
collections
in respect of the Mortgage
Loans due after the
Cut-off Date (other than
Monthly
Payments due in the month of the Cut-off Date ) as shall be
on
deposit
in the
Custodial
Account
or in
the
Certificate
Account
and
identified
as
belonging to the Trust Fund,
(iii)..property
which
secured a Mortgage
Loan and which has been
acquired
for the
benefit of the Certificateholders by foreclosure or deed in lieu of
foreclosure,
(iv)...the hazard insurance policies and Primary Insurance
Policies, if any,
and
(v)....all proceeds of clauses (i) through (iv) above.
Notwithstanding
the
foregoing,
the
REMIC
election
with
respect
to
REMIC
I
specifically excludes the Yield Maintenance Agreements.
REMIC
I Distribution
Amount: For any Distribution
Date, the Available
Distribution
Amount shall be
distributed to the REMIC I Regular
Interests and the Class R-I
Certificates
in the following amounts and priority:
(i)
to the extent of the Available
Distribution Amount, to REMIC II as the
holder of REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4, pro rata,
in an amount equal to
(A) their
Uncertificated
Accrued Interest for such
Distribution
Date, plus (B) any amounts
in respect thereof remaining unpaid from previous
Distribution
Dates, in the case of REMIC I
Regular
Interest LT1 each such amount having first been reduced by any
Deferred
Interest for
the related Distribution Date; and
(ii)
to the extent of the Available
Distribution Amount remaining after the
distributions
made
pursuant
to clause (i)
above,
to REMIC II as the holder of the REMIC I
Regular Interests, in an amount equal to:
(A)
in respect of REMIC I Regular
Interests LT2, LT3 and LT4, their
respective Principal Distribution Amounts;
(B)
in respect of REMIC I Regular
Interest LT1 any remainder
until
the Uncertificated Principal Balance thereof is reduced to zero;
(C)
any remainder in respect of REMIC I Regular
Interests
LT2, LT3
and LT4, pro rata according to their respective
Uncertificated
Principal Balances as reduced
by
the
distributions
deemed
made
pursuant
to
(A)
above,
until
their
respective
Uncertificated Principal Balances are reduced to zero; and
(iii)
any remaining amounts to the Holders of the Class R-I Certificates.
REMIC I Principal
Reduction Amounts:
For any Distribution Date, the amounts by which
the
principal
balances of REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4,
respectively,
will be
reduced
on such
Distribution
Date by the
allocation
of
Realized
Losses and the
distribution of principal, determined as follows:
For purposes of the succeeding
formulas the following symbols shall have the meanings
set forth below:
Y1 =...the
aggregate
principal
balance
of
REMIC
I
Regular
Interest
LT1
after
distributions on the prior Distribution Date.
Y2 =...the principal
balance of REMIC I Regular
Interest LT2 after
distributions on
the prior Distribution Date.
Y3 =...the principal
balance of REMIC I Regular
Interest LT3 after
distributions on
the prior Distribution Date.
Y4 =...the principal
balance of REMIC I Regular
Interest LT4 after
distributions on
the prior Distribution Date (note:
Y3 = Y4).
AY1 =..the REMIC I Regular Interest LT1 Principal Reduction Amount.
AY2 =..the REMIC I Regular Interest LT2 Principal Reduction Amount.
AY3 =..the REMIC I Regular Interest LT3 Principal Reduction Amount.
AY4 =..the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 =...the
aggregate
principal
balance of REMIC I Regular
Interests
LT1, LT2, LT3
and LT4 after
distributions
and the allocation of Realized Losses on the prior
Distribution
Date.
P1 =...the
aggregate
principal
balance of REMIC I Regular
Interests
LT1, LT2, LT3
and
LT4
after
distributions
and
the
allocation
of
Realized
Losses
to be made on such
Distribution Date.
AP =...P0 - P1 = the
aggregate
of REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4
Principal Reduction Amounts.
=the
aggregate
of the
principal
portions of Realized
Losses to be allocated
to, and the
principal
distributions
to be made on, the
Certificates
on such
Distribution
Date
(including
distributions
of accrued and unpaid
interest on the Class SB
Certificates
for prior Distribution Dates).
R0 =...the Net WAC Cap
Rate
(stated
as a
monthly
rate)
after
giving
effect
to
amounts distributed and Realized Losses allocated on the prior
Distribution Date.
R1 =...the Net WAC Cap
Rate
(stated
as a
monthly
rate)
after
giving
effect
to
amounts to be distributed and Realized Losses to be allocated on
such Distribution Date.
a =....(Y2 +
Y3)/P0.
The
initial
value
of a on the
Closing
Date
for use on the
first Distribution Date shall be 0.0001.
a0 =...the
lesser of (A) the sum for all
Classes
of
Certificates,
other
than the
Class SB
Certificates,
of the product for each Class of (i) the
monthly
interest
rate (as
limited by the Net WAC Cap Rate, if applicable)
for such Class
applicable for
distributions
to be made on such
Distribution
Date and (ii) the aggregate
Certificate
Principal
Balance
for such
Class
after
distributions
and the
allocation
of
Realized
Losses
on the prior
Distribution Date and (B) R0*P0.
a1
=..the
lesser of (A) the sum for all
Classes
of
Certificates,
other
than the
Class SB
Certificates,
of the product for each Class of (i) the
monthly
interest
rate (as
limited by the Net WAC Cap Rate, if applicable)
for such Class
applicable for
distributions
to be made on the
next
succeeding
Distribution
Date and
(ii)
the
aggregate
Certificate
Principal
Balance for such Class after
distributions
and the allocation of Realized
Losses
to be made on such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
AY1 =..AP - AY2 - AY3 - AY4;
AY2 =..(a/2){( a0R1 - a1R0)/R0R1};
AY3 =..aAP - AY2; and
AY4 =..AY3.
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1)....If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
(2)....If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a1R0P0 - a0R1P1}/{2R1R0P1 -
a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
REMIC I Realized
Losses:
Realized Losses on the Mortgage Loans shall be allocated to
the REMIC I Regular
Interests
as follows:
The
interest
portion of Realized
Losses on the
Mortgage Loans,
if any, shall be allocated
among REMIC I Regular
Interests LT1, LT2 and LT4
pro rata
according
to the amount of
interest
accrued
but
unpaid
thereon,
in
reduction
thereof.
Any
interest
portion of such
Realized
Losses in excess of the
amount
allocated
pursuant
to the
preceding
sentence
shall be treated
as a
principal
portion of
Realized
Losses
not
attributable
to
any
specific
Mortgage
Loan
and
allocated
pursuant
to the
succeeding
sentences.
The principal
portion of Realized
Losses on the Mortgage
Loans,
if
any,
shall
be
allocated
first,
to REMIC I
Regular
Interests
LT2,
LT3 and LT4 pro rata
according to their respective
Principal
Reduction Amounts to the extent thereof in reduction
of the
Uncertificated
Principal Balance of such REMIC I Regular
Interests and, second,
the
remainder,
if any, of such
principal
portion of such Realized
Losses shall be allocated to
REMIC I Regular Interest LT1 in reduction of the Uncertificated
Principal Balance thereof.
REMIC I Regular Interests:
REMIC I Regular Interests LT1, LT2, LT3 and LT4.
REMIC I Regular
Interest LT1: A regular
interest in REMIC I that is held as an asset
of REMIC
II,
that has an
initial
principal
balance
equal to the
related
Uncertificated
Principal
Balance,
that bears
interest at the related
Uncertificated
REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I Regular
Interest LT1
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT1 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT1 on such Distribution Date.
REMIC I Regular
Interest LT2: A regular
interest in REMIC I that is held as an asset
of REMIC
II,
that has an
initial
principal
balance
equal to the
related
Uncertificated
Principal
Balance,
that bears
interest at the related
Uncertificated
REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I Regular
Interest LT2
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT2 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT2 on such Distribution Date.
REMIC I Regular
Interest LT3: A regular
interest in REMIC I that is held as an asset
of REMIC
II,
that has an
initial
principal
balance
equal to the
related
Uncertificated
Principal
Balance,
that bears
interest at the related
Uncertificated
REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I Regular
Interest LT3
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT3 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT3 on such Distribution Date.
REMIC I Regular
Interest LT4: A regular
interest in REMIC I that is held as an asset
of REMIC
II,
that has an
initial
principal
balance
equal to the
related
Uncertificated
Principal
Balance,
that bears
interest at the related
Uncertificated
REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I Regular
Interest LT4
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT4 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT4 on such Distribution Date.
REMIC II: The
segregated
pool of assets
subject
hereto,
constituting a portion of
the primary trust created
hereby and to be
administered
hereunder,
with respect to which a
separate
REMIC
election
is to be made,
consisting
of the REMIC I Regular
Interests.
The
REMIC
election
with
respect
to
REMIC
II
specifically
excludes
the
Yield
Maintenance
Agreements.
REMIC II
Regular
Interest:
Any one of
REMIC
II
Regular
Interest
A-1,
REMIC II
Regular
Interest A-2, REMIC II Regular
Interest A-3, REMIC II Regular Interest M-1, REMIC II
Regular
Interest M-2, REMIC II Regular
Interest M-3, REMIC II Regular Interest M-4, REMIC II
Regular Interest M-5, REMIC II Regular Interest SB-IO or
REMIC II Regular Interest SB-PO.
REMIC II Regular
Interest
A-1: A regular
interest in REMIC II which has a principal
balance equal to the
principal
balance of the Class A-1
Certificates
and which is entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR
plus the Class A-1 Margin and (ii)
the Net WAC Cap Rate.
Interest
accrued in any
Interest
Accrual
Period and not paid on the
related
Distribution
Date shall carry forward to each succeeding
Distribution
Date without
interest until paid.
REMIC
II
Regular
Interest
A-2:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class A-2
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class A-2 Margin
and (ii) the Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC
II
Regular
Interest
A-3:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class A-3
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class A-3 Margin
and (ii) the Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC
II
Regular
Interest
M-1:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-1
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-1 Margin
and (ii) the Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC
II
Regular
Interest
M-2:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-2
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-2 Margin
and (ii) the Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC
II
Regular
Interest
M-3:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-3
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-3 Margin
and (ii) the Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC
II
Regular
Interest
M-4:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-4
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-4 Margin
and (ii) the Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC
II
Regular
Interest
M-5:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-5
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-5 Margin
and (ii) the Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC II Regular
Interest
SB-IO: A regular
interest in REMIC II that has no initial
principal,
that bears
interest at the
related
Pass-Through
Rate,
and that has such other
terms as are described herein.
REMIC II Regular
Interest
SB-PO: A regular
interest in REMIC II that has an initial
principal
balance equal to the initial
principal
balance for the Class SB Certificates,
as
set forth in the
Preliminary
Statement,
that
bears no
interest,
and that has such
other
terms as are described herein.
REMIC III: The
segregated
pool of assets subject
hereto,
constituting a portion of
the primary trust created
hereby and to be
administered
hereunder,
with respect to which a
separate
REMIC
election is to be made,
consisting of the REMIC II Regular
Interests
SB-IO
and SB-PO.
REMIC III Regular Interest:
The separate
beneficial
ownership interest in REMIC III
issued
hereunder and designated as a "regular
interest" in REMIC III, the ownership of which
is
evidenced by the Class SB
Certificates.
The REMIC III Regular
Interest
will not have a
Pass-Through
Rate,
but
will be
entitled
to
100% of all
amounts
distributed
or
deemed
distributed on REMIC II Regular Interests SB-IO and SB-PO.
Required
Overcollateralization
Amount:
With
respect to any
Distribution
Date (i)
prior to the
Stepdown
Date,
an
amount
equal to 0.75% of the
aggregate
Stated
Principal
Balance of the Mortgage
Loans as of the Cut-off Date;
(ii) on or after the Stepdown Date but
prior to the
Distribution
Date in December 2012,
provided a Trigger Event is not in effect,
the
greater
of (x)
1.875% of the
outstanding
aggregate
Stated
Principal
Balance of the
Mortgage Loans after giving effect to
distributions
made on that
Distribution
Date and (y)
the
Overcollateralization
Floor;
(iii) on or after
the
Stepdown
Date and on or after the
Distribution
Date in December
2012,
provided a Trigger Event is not in effect,
the greater
of (x) 1.50% of the
outstanding
aggregate
Stated
Principal
Balance of the Mortgage
Loans
after
giving
effect
to
distributions
made
on
that
Distribution
Date
and
(y)
the
Overcollateralization
Floor;
and (iv) on or after the Stepdown Date if a Trigger Event is in
effect, the Required
Overcollateralization
Amount for the immediately preceding Distribution
Date;
provided
that the
Required
Overcollateralization
Amount
may be
reduced so long as
written
confirmation
is obtained from each rating agency that the reduction
will not reduce
the ratings
assigned to the Class A
Certificates
and
Class M
Certificates
by that rating
agency
(without
regard
to the
Certificate
Policy)
below
the
lower of the
then-current
ratings or the ratings
assigned to those
certificates
as of the closing date by that rating
agency.
Senior Certificate:
Any one of the Class A Certificates.
Senior Enhancement
Percentage:
With respect to any Distribution Date, the percentage
obtained by dividing (x) the sum of (i) the
aggregate
Certificate
Principal
Balance of the
Class M
Certificates
and (ii) the
Overcollateralization
Amount,
in each case prior to the
distribution
of the
Principal
Distribution
Amount on such
Distribution
Date,
by (y) the
aggregated
Stated
Principal
Balance
of
the
Mortgage
Loans
after
giving
effect
to
distributions to be made on that Distribution Date.
Sixty-Plus Delinquency
Percentage:
With respect to any Distribution Date on or after
the Stepdown Date,
the arithmetic
average,
for each of the three
consecutive
Distribution
Dates ending with such Distribution
Date, of the fraction,
expressed as a percentage,
equal
to (x) the aggregate Stated
Principal
Balance of the Mortgage Loans that are 60 or more days
delinquent in payment of principal and interest for the
applicable
Due Date
preceding
that
Distribution
Date,
including
Mortgage
Loans in
foreclosure,
REO
Properties and Mortgage
Loans in bankruptcy
over (y) the aggregate
Stated
Principal
Balance of all of the Mortgage
Loans immediately preceding that Distribution Date.
Stated Principal
Balance:
With respect to any Mortgage Loan or related REO Property,
and as of any date of
determination,
(i) the sum of (a) the
Cut-off Date Principal
Balance
of the
Mortgage
Loan plus
(b) any
amount
by which the
Stated
Principal
Balance
of the
Mortgage Loan has been increased
pursuant to a Servicing
Modification
and (c) any amount by
which the Stated
Principal
Balance of the
Mortgage
Loan has been
increased
for
Deferred
Interest
pursuant to the terms of the related
Mortgage Note on or prior to the
Distribution
Date,
minus
(ii) the
sum of (a) the
principal
portion of the
Monthly
Payments
due with
respect to such
Mortgage
Loan or REO
Property
during
each Due Period
ending with the Due
Period
relating to the most recent
Distribution
Date which were received or with respect to
which an Advance was made,
(b) all
Principal
Prepayments with respect to such Mortgage Loan
or REO Property,
and all Insurance Proceeds,
Liquidation
Proceeds and REO Proceeds,
to the
extent
applied
by the
Master
Servicer
as
recoveries
of
principal
in
accordance
with
Section 3.14
with
respect to such
Mortgage
Loan or REO
Property,
in each case which were
distributed
pursuant to Section 4.02 on any previous
Distribution Date, and (c) any Realized
Loss
incurred
with
respect to such
Mortgage
Loan
allocated
to
Certificateholders
with
respect thereto for any previous Distribution Date.
Stepdown
Date:
The
earlier
to
occur
of (1)
the
Distribution
Date
immediately
following the Distribution
Date on which the aggregate
Certificate
Principal Balance of the
Class A
Certificates
has
been
reduced
to
zero
and (2) the
later
to
occur
of (x) the
Distribution
Date in December
2009 and (y) the first
Distribution
Date on which the Senior
Enhancement
Percentage is greater than or equal to (a) on any Distribution
Date prior to the
Distribution Date in December 2012,
approximately
15.00% and (b) on any Distribution Date on
or after the Distribution Date in December 2012, 12.00%.
Subordination
Percentage:
With
respect
to each class of Class A
Certificates
and
Class M Certificates, the respective approximate percentage set
forth in the table below:
Class
Percentage (1)
Percentage (2)
A
85.000%
88.000%
M-1
91.125%
92.900%
M-2
94.375%
95.500%
M-3
95.625%
96.500%
M-4
96.875%
97.500%
M-5
98.125%
98.500%
(1)
For any Distribution Date prior to the Distribution Date in
December 2012.
(2)
For any Distribution Date in December 2012 or thereafter.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution
Date if
(a) the Sixty-Plus
Delinquency
Percentage,
as determined on that Distribution Date, exceeds
40.00% of the Senior
Enhancement
Percentage for that
Distribution Date or (b) the aggregate
amount of Realized
Losses on the
Mortgage
Loans as a
percentage
of the initial
aggregate
Stated
Principal
Balance as of the
Cut-off
Date
exceeds the
applicable
amount set forth
below:
o
December 2008 to November 2009: 0.150% with respect to December
2008, plus
an
additional 1/12th of 0.250% for each month through November 2009.
o
December 2009 to November 2010: 0.400% with respect to December
2009, plus
an
additional 1/12th of 0.300% for each month through November 2010.
o
December 2010 to November 2011: 0.700% with respect to December
2010, plus
an
additional 1/12th of 0.300% for each month through November 2011.
o
December 2011 to November 2012: 1.000% with respect to July 2011,
plus an
additional 1/12th of 0.350% for each month through November 2012.
o
December 2012 to November 2013: 1.350% with respect to December
2012, plus
an
additional 1/12th of 0.150% for each month through November 2013.
o
July 2013 and thereafter: 1.500%.
2006-QH1 REMIC:
Any of REMIC I, REMIC II or REMIC III, as the case may be.
Uncertificated
Accrued
Interest:
With respect to the REMIC I Regular
Interests for
any
Distribution
Date,
one
month's
interest
at
the
related
Uncertificated
REMIC
I
Pass-Through
Rate
for
such
Distribution
Date,
accrued
on its
Uncertificated
Principal
Balance,
immediately prior to such
Distribution
Date.
Uncertificated
Accrued Interest for
the REMIC I Regular
Interests
shall
accrue on the
basis of a 360-day
year
consisting
of
twelve
30-day
months.
For
purposes of
calculating
the amount of
Uncertificated
Accrued
Interest
for
the
REMIC I
Regular
Interests
for any
Distribution
Date,
any
Prepayment
Interest
Shortfalls
and Relief Act
Shortfalls
(to the extent not
covered by
Compensating
Interest)
relating to the Mortgage Loans for any
Distribution
Date shall be allocated among
REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4, pro rata,
based on, and to the extent of,
Uncertificated
Accrued
Interest,
as
calculated
without
application
of
this
sentence.
Uncertificated
Accrued
Interest
on
REMIC
II
Regular
Interest
SB-PO
shall
be
zero.
Uncertificated
Accrued
Interest
on REMIC II Regular
Interest
SB-IO for each
Distribution
Date shall equal Accrued Certificate Interest for the Class SB
Certificates.
Uncertificated
Principal
Balance:
The
principal
amount
of any
REMIC
I
Regular
Interest
outstanding as of any date of determination.
The
Uncertificated
Principal Balance
of each REMIC I Regular Interest shall be reduced first by Realized
Losses
allocated
thereto
by the definition of REMIC I Realized
Losses,
and by all
distributions
of principal deemed
made
on
such
REMIC
I
Regular
Interest
on such
Distribution
Date.
The
Uncertificated
Principal
Balance
of each
REMIC I Regular
Interest
shall
never be less than
zero.
With
respect to the REMIC II
Regular
Interest
SB-PO the
initial
amount set forth with
respect
thereto
in the
Preliminary
Statement
as reduced by
distributions
deemed
made in respect
thereof
pursuant to Section 4.02 and Realized Losses
allocated
thereto
pursuant to Section
4.05.
Uncertificated
REMIC I Pass-Through
Rate: With respect to any Distribution
Date and
(i)
REMIC I
Regular
Interests
LT1 and LT2,
the Net WAC Cap
Rate,
(ii)
REMIC I
Regular
Interest
LT3,
zero
(0.00%) and (iii) REMIC I Regular
Interest
LT4,
twice the Net WAC Cap
Rate.
Underwriter:
Goldman, Sachs & Co.
Yield Maintenance Agreements:
The Class A-3 Yield Maintenance Agreement together with
the Class A/Class M Yield Maintenance Agreement.
Yield Maintenance Agreements Provider:
Bear Stearns Financial Products Inc.
SECTION 1.02.
DETERMINATION OF LIBOR.
LIBOR
applicable
to
the
calculation
of
the
Pass-Through
Rate
on
the
LIBOR
Certificates
for any
Interest
Accrual
Period
will be
determined
as of each
LIBOR
Rate
Adjustment
Date. On each LIBOR Rate
Adjustment
Date, or if such LIBOR Rate
Adjustment Date
is not a Business Day, then on the next
succeeding
Business Day,
LIBOR shall be established
by the
Trustee
and, as to any
Interest
Accrual
Period,
will equal the rate for one month
United States dollar
deposits that appears on the Dow Jones
Telerate
Screen Page 3750 as of
11:00 a.m.,
London time,
on such LIBOR Rate
Adjustment
Date.
"Dow Jones
Telerate
Screen
Page 3750" means the display
designated
as page 3750 on the Telerate
Service (or such other
page as may replace page 3750 on that service for the purpose of
displaying
London
interbank
offered
rates of major
banks).
If such
rate does not
appear
on such page (or such
other
page as may
replace
that page on that
service,
or if such
service
is no longer
offered,
LIBOR
shall
be so
established
by use
of
such
other
service
for
displaying
LIBOR
or
comparable
rates as may be
selected
by the
Trustee
after
consultation
with
the
Master
Servicer),
the rate will be the
Reference
Bank
Rate.
The
"Reference
Bank
Rate" will be
determined
on the basis of the rates at which
deposits
in U.S.
Dollars
are offered by the
reference
banks
(which
shall be any three major banks that are engaged in
transactions
in
the London
interbank
market,
selected by the
Trustee
after
consultation
with the Master
Servicer) as of 11:00 a.m.,
London time, on the LIBOR Rate
Adjustment Date to prime banks in
the London
interbank market for a period of one month in amounts
approximately
equal to the
aggregate
Certificate
Principal
Balance of the LIBOR
Certificates
then
outstanding.
The
Trustee will request the principal
London office of each of the reference
banks to provide a
quotation of its rate.
If at least two such
quotations
are
provided,
the rate will be the
arithmetic
mean of the quotations
rounded up to the next multiple of 1/16%.
If on such date
fewer than two quotations are provided as requested,
the rate will be the arithmetic
mean of
the rates
quoted by one or more major banks in New York City,
selected by the Trustee
after
consultation
with the Master
Servicer,
as of 11:00 a.m.,
New York City time,
on such date
for loans in U.S.
Dollars
to
leading
European
banks for a period of one month in
amounts
approximately equal to the aggregate
Certificate
Principal Balance of the LIBOR Certificates
then
outstanding.
If no such
quotations
can be
obtained,
the rate
will be LIBOR for the
prior Distribution
Date;
provided however,
if, under the priorities
described above, LIBOR
for a
Distribution
Date would be based on LIBOR for the previous
Distribution
Date for the
third
consecutive
Distribution
Date,
the
Trustee,
after
consultation
with
the
Master
Servicer,
shall
select an
alternative
comparable
index
(over
which the
Trustee
has no
control),
used for
determining
one-month
Eurodollar
lending rates that is calculated
and
published (or otherwise made available) by an independent party.
The
establishment
of LIBOR by the Trustee and the Master
Servicer on any LIBOR Rate
Adjustment Date and the Master
Servicer's
subsequent
calculation of the
Pass-Through
Rate
applicable
to the
LIBOR
Certificates
for the
relevant
Interest
Accrual
Period,
in the
absence of manifest error, will be final and binding.
Promptly
following
each LIBOR Rate
Adjustment
Date the
Trustee
shall
supply the
Master
Servicer
with the results of its
determination
of LIBOR on such date.
Furthermore,
the Trustee will supply to any
Certificateholder
so requesting by telephone by calling (800)
735-7777 the Pass-Through
Rate on the LIBOR
Certificates for the current and the immediately
preceding Interest Accrual Period.
SECTION 1.03.
USE OF WORDS AND PHRASES.
"Herein," "hereby,"
"hereunder,"
"hereof,"
"hereinbefore,"
"hereinafter" and other
equivalent
words refer to the Pooling and
Servicing
Agreement
as a whole.
All
references
herein to Articles,
Sections or Subsections shall mean the corresponding
Articles,
Sections
and
Subsections
in the Pooling and Servicing
Agreement.
The
definitions
set forth herein
include both the singular and the plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01.
CONVEYANCE OF MORTGAGE LOANS.
(A)
The Company,
concurrently with the execution and delivery hereof,
does hereby assign
to the Trustee for the benefit of the
Certificateholders
and the Certificate Insurer without
recourse
all the right,
title and
interest
of the
Company in and to the
Mortgage
Loans,
including all interest and principal
received on or with respect to the Mortgage
Loans after
the Cut-off Date (other than payments of principal
and interest due on the Mortgage
Loans in
the
month of the
Cut-off
Date).
In
connection
with such
transfer
and
assignment,
the
Company does hereby
deliver to the Trustee the
Certificate
Policy (as defined in the Series
Supplement), if any for the benefit of the Holders of the Class A-3
Certificates.
(B)
In
connection
with
such
assignment,
except as set forth in
Section
2.01(c)
and
subject to Section
2.01(d)
below,
the Company does hereby (1) with respect to each Mortgage
Loan
(other
than a
Cooperative
Loan or a Sharia
Mortgage
Loan),
deliver
to the
Master
Servicer
(or an
Affiliate
of the Master
Servicer)
each of the
documents
or
instruments
described
in clause
(I)(ii)
below
(and the
Master
Servicer
shall
hold (or
cause
such
Affiliate
to hold) such
documents
or
instruments
in trust for the use and
benefit of all
present
and future
Certificateholders),
(2) with
respect to each MOM Loan,
deliver to and
deposit
with the
Trustee,
or the
Custodian
on behalf of the
Trustee,
the
documents
or
instruments
described
in clauses
(I)(i) and (v) below,
(3) with
respect to each
Mortgage
Loan that is not a MOM Loan but is
registered
on the MERS(R)System,
deliver to and
deposit
with the Trustee,
or to the Custodian on behalf of the Trustee,
the documents or instruments
described in clauses (I)(i),
(iv) and (v) below,
(4) with respect to each Mortgage Loan that
is not a MOM Loan and is not
registered on the MERS(R)System,
deliver to and deposit with the
Trustee,
or to the
Custodian
on
behalf
of
the
Trustee,
the
documents
or
instruments
described
in
clauses
(I)(i),
(iii),
(iv)
and (v)
below,
and (5) with
respect
to each
Cooperative
Loan and Sharia
Mortgage
Loan,
deliver to and deposit with the Trustee,
or to
the
Custodian on behalf of the Trustee,
the documents
and
instruments
described in clause
(II) and clause (III) below:
(I)
with
respect
to
each
Mortgage
Loan
so
assigned
(other
than
a
Cooperative Loan or a Sharia Mortgage Loan):
(I)
The original Mortgage Note,
endorsed without recourse in blank or to the order of the
Trustee,
and showing an unbroken
chain of
endorsements
from the
originator
thereof to the
Person
endorsing
it to the
Trustee,
or with
respect to any
Destroyed
Mortgage
Note,
an original
lost note
affidavit
from the related
Seller or
Residential
Funding
stating
that the original
Mortgage
Note was
lost,
misplaced or
destroyed,
together
with a copy of the related
Mortgage
Note;
(II)
The
original
Mortgage,
noting
the
presence
of the MIN of the
Mortgage
Loan and
language
indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan
is a MOM Loan,
with evidence of recording
indicated
thereon or a copy of the
Mortgage with evidence of recording indicated thereon;
(III)
The original
Assignment
of the
Mortgage to the Trustee
with
evidence of recording
indicated
thereon or a copy of such
assignment
with
evidence
of
recording
indicated thereon;
(IV)
The original
recorded
assignment or assignments of the Mortgage
showing an unbroken
chain of title from the
originator
thereof to the Person
assigning it to the
Trustee (or to MERS,
if the Mortgage
Loan is
registered
on the MERS(R)System
and noting the presence of a MIN) with
evidence of
recordation
noted thereon
or
attached
thereto,
or a copy
of such
assignment
or
assignments
of the
Mortgage with evidence of recording indicated thereon; and
(V)
The original of each modification,
assumption
agreement or preferred loan agreement,
if any,
relating
to
such
Mortgage
Loan
or a copy
of
each
modification,
assumption agreement or preferred loan agreement
(II) with respect to each Cooperative Loan so assigned:
(I)
The original Mortgage Note,
endorsed without recourse to the order of the Trustee and
showing an unbroken chain of
endorsements
from the originator
thereof to the
Person endorsing it to the Trustee,
or with respect to any Destroyed
Mortgage
Note, an original lost note
affidavit
from the related
Seller or Residential
Funding
stating
that the
original
Mortgage
Note
was
lost,
misplaced
or
destroyed, together with a copy of the related Mortgage Note;
(II)
A counterpart of the Cooperative
Lease and the Assignment of Proprietary Lease to the
originator of the
Cooperative
Loan with
intervening
assignments
showing an
unbroken
chain of title from such
originator to the Trustee or a copy of such
Cooperative
Lease and
Assignment
of
Proprietary
Lease
and
copies of such
intervening assignments;
(III)
The related Cooperative Stock Certificate,
representing the related Cooperative Stock
pledged with respect to such Cooperative
Loan,
together with an undated stock
power (or other similar instrument) executed in blank or copies
thereof;
(IV)
The
original
recognition
agreement
by
the
Cooperative
of the
interests
of the
mortgagee with respect to the related Cooperative Loan or a copy
thereof;
(V)
The Security Agreement or a copy thereof;
(VI)
Copies of the original UCC-1 financing
statement,
and any
continuation
statements,
filed by the originator of such
Cooperative
Loan as secured party,
each with
evidence of recording thereof,
evidencing the interest of the originator under
the Security Agreement and the Assignment of Proprietary Lease;
(VII)
Copies of the filed UCC-3
assignments of the security
interest
referenced in clause
(vi)
above
showing an
unbroken
chain of title
from the
originator
to the
Trustee,
each with evidence of recording
thereof,
evidencing the interest of
the originator
under the Security
Agreement and the Assignment of Proprietary
Lease;
(VIII)
An executed
assignment of the interest of the
originator in the Security
Agreement,
Assignment of Proprietary
Lease and the
recognition
agreement
referenced in
clause (iv) above,
showing an unbroken
chain of title from the
originator to
the Trustee, or a copy thereof;
(IX)
The original of each modification,
assumption
agreement or preferred loan agreement,
if any,
relating
to
such
Cooperative
Loan or a copy of each
modification,
assumption agreement or preferred loan agreement; and
(X)
A duly completed UCC-1 financing
statement showing the Master Servicer as debtor, the
Company
as secured
party and the
Trustee as
assignee
and a duly
completed
UCC-1
financing
statement
showing
the
Company as debtor and the Trustee as
secured party,
each in a form
sufficient for filing,
evidencing the interest
of such debtors in the Cooperative Loans or copies thereof;
(III) with respect to each Sharia Mortgage Loan so assigned:
(I)
The original
Obligation to Pay, endorsed without recourse in blank or to the
order of
the Trustee and showing an unbroken chain of
endorsements
from the originator
thereof to the
Person
endorsing
it to the
Trustee,
or with
respect to any
Destroyed
Obligation to Pay, an original
affidavit from the related Seller or
Residential
Funding
stating
that the
original
Obligation
to Pay was lost,
misplaced or destroyed, together with a copy of the related
Obligation to Pay;
(II)
The original
Sharia
Mortgage
Loan Security
Instrument,
with evidence of recording
indicated
thereon or a copy of the Sharia
Mortgage Loan
Security
Instrument
with evidence of recording indicated thereon;
(III)
An original Assignment and Amendment of Security
Instrument,
assigned to the Trustee
with evidence of recording
indicated
thereon or a copy of such Assignment and
Amendment of Security Instrument with evidence of recording
indicated thereon;
(IV)
The original
recorded
assignment or assignments of the Sharia Mortgage Loan Security
Instrument
showing an unbroken chain of title from the
originator
thereof to
the Person
assigning
it to the Trustee
with
evidence of
recordation
noted
thereon or attached
thereto,
or a copy of such
assignment or
assignments of
the Sharia
Mortgage
Loan
Security
Instrument
with
evidence
of
recording
indicated thereon;
(V)
The original Sharia Mortgage Loan
Co-Ownership
Agreement with respect to the related
Sharia
Mortgage
Loan or a copy
of such
Sharia
Mortgage
Loan
Co-Ownership
Agreement; and
(VI)
The original of each
modification or assumption
agreement,
if any, relating to such
Sharia Mortgage Loan or a copy of each modification or assumption
agreement.
(C)
The Company
may, in lieu of
delivering
the original of the
documents
set forth in
Sections
2.01(b)(I)(iii),
(iv) and (v), Sections (b)(II)(ii),
(iv), (vii), (ix) and (x) and
Sections
2.01(b)(III)(ii),
(iii),
(iv), (v) and (vi) (or copies
thereof) to the Trustee or
to the
Custodian on behalf of the Trustee,
deliver
such
documents to the Master
Servicer,
and the Master
Servicer
shall hold such
documents
in trust for the use and
benefit of all
present and future
Certificateholders
and the Certificate
Insurer until such time as is set
forth in the next
sentence.
Within
thirty
Business
Days
following the earlier of (i) the
receipt
of the
original
of all of the
documents
or
instruments
set
forth
in
Sections
2.01(b)(I)(iii),
(iv) and (v), Sections
(b)(II)(ii),
(iv), (vii), (ix) and (x) and Sections
2.01(b)(III)(ii),
(iii),
(iv),
(v) and (vi) (or copies
thereof) for any Mortgage
Loan and
(ii) a written
request by the Trustee to deliver those
documents
with respect to any or all
of the
Mortgage
Loans
then being held by the Master
Servicer,
the Master
Servicer
shall
deliver a complete set of such
documents to the Trustee or to the
Custodian on behalf of the
Trustee.
The parties
hereto agree that it is not intended
that any Mortgage
Loan be included
in the Trust
Fund that is either
(i) a
"High-Cost
Home
Loan" as defined in the New Jersey
Home
Ownership Act effective
November 27, 2003,
(ii) a "High-Cost
Home Loan" as defined in
the New Mexico Home Loan
Protection
Act effective
January 1, 2004,
(iii) a "High Cost Home
Mortgage
Loan" as defined in the
Massachusetts
Predatory
Home Loan Practices Act effective
November
7, 2004 or (iv) a
"High-Cost
Home Loan" as defined in the Indiana
House
Enrolled
Act No. 1229, effective as of January 1, 2005.
(D)
Notwithstanding
the provisions of Section
2.01(c),
in connection
with any Mortgage
Loan,
if
the
Company
cannot
deliver
the
original
of
the
Mortgage,
any
assignment,
modification,
assumption
agreement or preferred loan agreement (or copy thereof as permitted
by Section
2.01(b)) with evidence of recording
thereon
concurrently
with the execution and
delivery
of this
Agreement
because
of (i) a delay
caused by the public
recording
office
where
such
Mortgage,
assignment,
modification,
assumption
agreement
or
preferred
loan
agreement
as the case may be,
has been
delivered
for
recordation,
or (ii) a delay in the
receipt of certain
information
necessary
to prepare
the related
assignments,
the Company
shall
deliver or cause to be
delivered
to the Trustee or to the
Custodian on behalf of the
Trustee a copy of such Mortgage, assignment,
modification,
assumption agreement or preferred
loan agreement.
The Company (i) shall promptly cause to be recorded in the
appropriate
public office
for real property
records the Assignment
referred to in clause (I)(iii) of Section
2.01(b),
except (a) in states
where,
in the
opinion of counsel
acceptable
to the
Trustee
and the
Master
Servicer,
such
recording is not required to protect the
Trustee's
interests in the
Mortgage Loan against the claim of any
subsequent
transferee or any successor to or creditor
of the Company or the
originator
of such
Mortgage
Loan or (b) if MERS is identified on the
Mortgage or on a properly
recorded
assignment
of the
Mortgage as the
mortgagee
of record
solely as nominee for the Seller and its
successors
and assigns,
(ii) shall
promptly cause
to be filed the Form UCC-3
assignment and UCC-1
financing
statement
referred to in clauses
(II)(vii)
and (x),
respectively,
of Section
2.01(b) and (iii) shall
promptly
cause to be
recorded in the appropriate
public
recording office for real property records the Assignment
Agreement and
Amendment of Security
Instrument
referred to in clause
(III)(iii) of Section
2.01(b). If any Assignment,
Assignment Agreement and Amendment of Security
Instrument,
Form
UCC-3 or Form UCC-1, as applicable,
is lost or returned
unrecorded to the Company because of
any defect therein,
the Company shall prepare a substitute
Assignment,
Assignment Agreement
and Amendment of Security
Instrument,
Form UCC-3 or Form UCC-1, as applicable,
or cure such
defect,
as the case may be, and cause such
Assignment or Assignment
Agreement and Amendment
of Security
Instrument to be recorded in accordance
with this
paragraph.
The Company shall
promptly
deliver or cause to be
delivered
to the
applicable
person
described
in Section
2.01(b),
any
Assignment,
substitute
Assignment,
Assignment
Agreement
and
Amendment
of
Security
Instrument or Form UCC-3 or Form UCC-1,
as applicable,
(or copy thereof)
recorded
in connection with this paragraph,
with evidence of recording
indicated
thereon at the time
specified in Section
2.01(c).
In connection
with its servicing of
Cooperative
Loans,
the
Master Servicer will use its best efforts to file timely
continuation
statements with regard
to each
financing
statement and
assignment
relating to
Cooperative
Loans as to which the
related Cooperative Apartment is located outside of the State of
New York.
If the Company
delivers to the Trustee or to the
Custodian
on behalf of the Trustee
any
Mortgage
Note,
Obligation
to Pay,
Assignment
Agreement
and
Amendment
of
Security
Instrument
or
Assignment
of
Mortgage
in blank,
the
Company
shall,
or shall
cause the
Custodian to,
complete the
endorsement of the Mortgage Note,
Obligation to Pay,
Assignment
Agreement and Amendment of Security
Instrument
and Assignment of Mortgage in the name of the
Trustee
in
conjunction
with
the
Interim
Certification
issued
by
the
Custodian,
as
contemplated by Section 2.02.
In
connection
with the
assignment
of any
Mortgage
Loan
registered
on the MERS(R)
System,
the Company further agrees that it will cause,
at the Company's own expense,
within
30 Business
Days after the Closing
Date,
the MERS(R)System to indicate
that such
Mortgage
Loans have been assigned by the Company to the Trustee in
accordance
with this
Agreement for
the benefit of the
Certificateholders
by
including
(or
deleting,
in the case of Mortgage
Loans which are
repurchased
in accordance
with this
Agreement) in such computer
files (a)
the code in the field
which
identifies
the
specific
Trustee and (b) the code in the field
"Pool Field" which
identifies the series of the
Certificates
issued in connection with such
Mortgage
Loans.
The Company
further agrees that it will not, and will not permit the Master
Servicer to, and the Master
Servicer
agrees that it will not, alter the codes
referenced in
this
paragraph
with respect to any Mortgage
Loan during the term of this
Agreement
unless
and until such Mortgage Loan is repurchased in accordance with the
terms of this Agreement.
(E)
Residential
Funding hereby assigns to the Trustee its security interest in and
to any
Additional
Collateral or Pledged
Assets,
its right to receive
amounts due or to become due
in
respect
of
any
Additional
Collateral
or
Pledged
Assets
pursuant
to
the
related
Subservicing
Agreement and its rights as beneficiary
under the Surety Bond in respect of any
Additional
Collateral
Loans.
With
respect
to any
Additional
Collateral
Loan or Pledged
Asset Loan,
Residential
Funding shall cause to be filed in the appropriate
recording office
a UCC-3
statement
giving notice of the
assignment of the related
security
interest to the
Trust
Fund and
shall
thereafter
cause the
timely
filing
of all
necessary
continuation
statements with regard to such financing statements.
(F)
It is intended
that the
conveyance
by the
Company to the
Trustee of the
Mortgage
Loans
as
provided
for
in
this
Section
2.01
be and
the
Uncertificated
REMIC
Regular
Interests,
if any (as
provided for in Section
2.06),
be construed as a sale by the Company
to the Trustee of the Mortgage Loans and any
Uncertificated
REMIC Regular
Interests for the
benefit
of the
Certificateholders.
Further,
it is not
intended
that such
conveyance
be
deemed to be a pledge of the Mortgage
Loans and any
Uncertificated
REMIC Regular
Interests
by the
Company
to the
Trustee
to
secure
a
debt
or
other
obligation
of the
Company.
Nonetheless,
(a) this Agreement is intended to be and hereby is a security
agreement
within
the
meaning
of
Articles 8 and 9 of the New York
Uniform
Commercial
Code and the
Uniform
Commercial
Code of any other
applicable
jurisdiction;
(b) the
conveyance
provided for in
Section
2.01 shall be deemed to be, and hereby is, (1) a grant by the
Company to the Trustee
of a security
interest in all of the
Company's
right
(including
the power to convey title
thereto),
title and interest,
whether now owned or hereafter acquired, in and to any and all
general intangibles,
payment intangibles,
accounts,
chattel paper, instruments,
documents,
money,
deposit
accounts,
certificates
of
deposit,
goods,
letters of credit,
advices of
credit and
investment
property
and other
property
of
whatever
kind or
description
now
existing
or
hereafter
acquired
consisting
of,
arising
from
or
relating
to any of the
following:
(A) the Mortgage Loans,
including (i) with respect to each Cooperative
Loan, the
related
Mortgage
Note,
Security
Agreement,
Assignment of Proprietary
Lease,
Cooperative
Stock
Certificate and Cooperative
Lease, (ii) with respect to each Sharia Mortgage Loan, the
related
Sharia
Mortgage
Loan
Security
Instrument,
Sharia
Mortgage
Loan
Co-Ownership
Agreement,
Obligation to Pay and Assignment
Agreement and Amendment of Security
Instrument,
(iii) with respect to each Mortgage Loan other than a
Cooperative
Loan or a Sharia
Mortgage
Loan, the related
Mortgage Note and Mortgage,
and (iv) any insurance
policies and all other
documents
in the related
Mortgage
File,
(B) all amounts
payable
pursuant to the Mortgage
Loans in accordance with the terms thereof,
(C) any
Uncertificated
REMIC Regular
Interests
and (D) all
proceeds of the
conversion,
voluntary or
involuntary,
of the
foregoing
into
cash,
instruments,
securities or other property,
including
without
limitation all amounts
from time to time held or
invested
in the
Certificate
Account
or the
Custodial
Account,
whether in the form of cash,
instruments,
securities or other property and (2) an assignment
by the
Company
to the
Trustee
of any
security
interest
in any
and
all of
Residential
Funding's
right
(including the power to convey title thereto),
title and interest,
whether
now owned or hereafter
acquired,
in and to the property
described in the foregoing
clauses
(1)(A),
(B),
(C) and (D)
granted by
Residential
Funding to the
Company
pursuant
to the
Assignment
Agreement;
(c) the
possession
by the
Trustee,
any
Custodian on behalf of the
Trustee or any other agent of the
Trustee of
Mortgage
Notes or such other items of property
as constitute instruments,
money, payment intangibles,
negotiable documents,
goods, deposit
accounts,
letters of credit, advices of credit, investment property,
certificated securities
or chattel paper shall be deemed to be "possession
by the secured
party," or possession by a
purchaser
or a person
designated
by such secured
party,
for
purposes of
perfecting
the
security
interest
pursuant
to
the
Minnesota
Uniform
Commercial
Code
and
the
Uniform
Commercial
Code
of any
other
applicable
jurisdiction
as in
effect
(including,
without
limitation,
Sections
8-106,
9-313,
9-314
and 9-106
thereof);
and (d)
notifications
to
persons holding such property,
and
acknowledgments,
receipts or confirmations
from persons
holding such
property,
shall be deemed
notifications
to, or
acknowledgments,
receipts or
confirmations from,
securities
intermediaries,
bailees or agents of, or persons holding for
(as
applicable)
the Trustee for the
purpose of
perfecting
such
security
interest
under
applicable law.
The
Company
and, at the
Company's
direction,
Residential
Funding and the Trustee
shall, to the extent
consistent with this Agreement,
take such reasonable
actions as may be
necessary to ensure that, if this Agreement were
determined to create a security
interest in
the
Mortgage
Loans,
any
Uncertificated
REMIC
Regular
Interests
and the other
property
described
above,
such
security
interest
would be
determined
to be a perfected
security
interest of first
priority
under
applicable
law and will be maintained as such
throughout
the term of this
Agreement.
Without
limiting the generality of the
foregoing,
the Company
shall
prepare
and deliver to the Trustee not less than 15 days prior to any
filing date and,
the Trustee
shall
forward for filing,
or shall
cause to be
forwarded
for filing,
at the
expense of the Company,
all filings
necessary to maintain the
effectiveness of any original
filings
necessary
under the
Uniform
Commercial
Code as in effect in any
jurisdiction
to
perfect
the
Trustee's
security
interest
in
or
lien
on
the
Mortgage
Loans
and
any
Uncertificated
REMIC
Regular
Interests,
as evidenced by an
Officers'
Certificate
of the
Company,
including
without
limitation
(x)
continuation
statements,
and (y)
such
other
statements
as may be
occasioned
by (1)
any
change
of name of
Residential
Funding,
the
Company or the Trustee
(such
preparation
and filing shall be at the expense of the Trustee,
if occasioned by a change in the Trustee's
name),
(2) any change of type or
jurisdiction of
organization
of
Residential
Funding or the
Company,
(3) any
transfer of any
interest of
Residential
Funding or the Company in any
Mortgage
Loan or (4) any transfer of any interest
of Residential Funding or the Company in any Uncertificated REMIC
Regular Interest.
(G)
The Master
Servicer
hereby
acknowledges
the receipt by it of the
Initial
Monthly
Payment
Fund.
The
Master
Servicer
shall hold such
Initial
Monthly
Payment
Fund in the
Custodial
Account and shall
include
such
Initial
Monthly
Payment
Fund in the
Available
Distribution
Amount for the initial
Distribution
Date.
Notwithstanding
anything herein to
the
contrary,
the Initial
Monthly
Payment Fund shall not be an asset of any REMIC.
To the
extent that the Initial
Monthly
Payment Fund
constitutes a reserve fund for federal
income
tax purposes,
(1) it shall be an outside
reserve fund and not an asset of any REMIC,
(2) it
shall be owned by the Seller and (3) amounts
transferred by any REMIC to the Initial
Monthly
Payment Fund shall be treated as transferred
to the Seller or any
successor,
all within the
meaning of Section 1.860G-2(h) of the Treasury Regulations.
(H)
The
Company
agrees
that
the
sale of each
Pledged
Asset
Loan
pursuant
to this
Agreement will also constitute the
assignment,
sale,
setting-over,
transfer and conveyance
to the Trustee,
without
recourse
(but subject to the Company's
covenants,
representations
and warranties
specifically
provided herein), of all of the Company's obligations and all of
the Company's
right,
title and interest in, to and under,
whether now existing or hereafter
acquired
as owner
of the
Mortgage
Loan
with
respect
to any and all
money,
securities,
security
entitlements,
accounts,
general
intangibles,
payment
intangibles,
instruments,
documents,
deposit
accounts,
certificates
of
deposit,
commodities
contracts,
and other
investment
property
and other
property
of
whatever
kind or
description
consisting
of,
arising from or related to (i) the Assigned
Contracts,
(ii) all rights,
powers and remedies
of the
Company
as owner of such
Mortgage
Loan
under or in
connection
with the
Assigned
Contracts,
whether arising under the terms of such Assigned Contracts,
by statute, at law or
in equity,
or otherwise
arising out of any default by the
Mortgagor
under or in connection
with the
Assigned
Contracts,
including
all rights to exercise any election or option or to
make any
decision or
determination
or to give or receive any notice,
consent,
approval or
waiver
thereunder,
(iii)
the
Pledged
Amounts
and
all
money,
securities,
security
entitlements,
accounts,
general intangibles,
payment intangibles,
instruments,
documents,
deposit
accounts,
certificates
of
deposit,
commodities
contracts,
and other
investment
property
and
other
property
of
whatever
kind or
description
and all cash and
non-cash
proceeds of the sale, exchange,
or redemption of, and all stock or conversion rights,
rights
to subscribe,
liquidation
dividends or
preferences,
stock
dividends,
rights to interest,
dividends,
earnings,
income,
rents,
issues,
profits,
interest
payments
or
other
distributions
of cash or
other
property
that
secures
a
Pledged
Asset
Loan,
(iv)
all
documents,
books and records
concerning
the
foregoing
(including
all computer
programs,
tapes,
disks
and
related
items
containing
any such
information)
and (v) all
insurance
proceeds
(including
proceeds
from
the
Federal
Deposit
Insurance
Corporation
or
the
Securities
Investor
Protection
Corporation
or any other
insurance
company) of any of the
foregoing or
replacements
thereof or
substitutions
therefor,
proceeds of proceeds and the
conversion,
voluntary
or
involuntary,
of
any
thereof.
The
foregoing
transfer,
sale,
assignment and
conveyance
does not constitute and is not intended to result in the creation,
or an assumption
by the Trustee,
of any
obligation
of the Company,
or any other person in
connection
with the Pledged
Assets or under any
agreement or instrument
relating
thereto,
including any obligation to the Mortgagor, other than as owner of
the Mortgage Loan.
SECTION 2.02.
ACCEPTANCE BY TRUSTEE.
The Trustee
acknowledges
receipt (or,
with respect to Mortgage
Loans
subject to a
Custodial
Agreement,
and
based
solely
upon a receipt
or
certification
executed
by the
Custodian,
receipt by the respective
Custodian as the duly
appointed
agent of the Trustee)
of the
documents
required to be delivered to the Trustee (or the
Custodian on behalf of the
Trustee)
pursuant to Section 2.01(b) above (except that for purposes of such
acknowledgement
only,
a Mortgage
Note may be endorsed in blank) and
declares
that it, or the
Custodian as
its agent,
holds and will hold such documents and the other documents
constituting a part of
the
Custodial
Files
delivered
to it,
or a
Custodian
as its
agent,
and the
rights
of
Residential Funding with respect to any Pledged Assets,
Additional
Collateral and the Surety
Bond
assigned to the Trustee
pursuant to Section
2.01,
in trust for the use and benefit of
all
present
and
future
Certificateholders
and the
Certificate
Insurer.
The
Trustee or
Custodian (the
Custodian
being so obligated
under a Custodial
Agreement)
agrees,
for the
benefit of
Certificateholders
and the
Certificate
Insurer,
to review each
Custodial File
delivered
to it
pursuant
to
Section
2.01(b)
within
45 days
after the
Closing
Date to
ascertain that all required
documents
(specifically as set forth in Section
2.01(b)),
have
been executed and received,
and that such documents
relate to the Mortgage Loans
identified
on the
Mortgage
Loan
Schedule,
as
supplemented,
that have been
conveyed
to it,
and to
deliver to the Trustee a
certificate
(the
"Interim
Certification")
to the effect that all
documents
required to be delivered
pursuant to Section
2.01(b) above have been executed and
received and that such
documents
relate to the
Mortgage
Loans
identified
on the Mortgage
Loan
Schedule,
except for any
exceptions
listed on
Schedule A
attached
to such
Interim
Certification.
Upon
delivery of the Custodial
Files by the Company or the Master
Servicer,
the Trustee
shall
acknowledge
receipt
(or,
with
respect to Mortgage
Loans
subject to a
Custodial
Agreement,
and
based
solely
upon a receipt
or
certification
executed
by the
Custodian,
receipt by the respective
Custodian as the duly
appointed
agent of the Trustee)
of the documents referred to in Section 2.01(c) above.
If the
Custodian,
as the
Trustee's
agent,
finds any
document or documents
constituting
a part of a
Custodial
File to be
missing
or
defective,
the
Trustee
shall
promptly
so notify
the Master
Servicer
and the
Company.
Pursuant
to Section
2.3 of the
Custodial
Agreement,
the
Custodian
will
notify the Master
Servicer,
the Company and the
Trustee of any such
omission or defect found by it in respect of any
Custodial
File held by
it in respect
of the items
reviewed
by it
pursuant
to the
Custodial
Agreement.
If such
omission or defect
materially and adversely
affects the interests of the
Certificateholders
or the Certificate
Insurer,
the Master Servicer shall promptly notify Residential Funding of
such
omission or defect and request
Residential
Funding to correct or cure such omission or
defect
within 60 days from the date the Master
Servicer
was
notified
of such
omission or
defect and, if
Residential
Funding does not correct or cure such
omission or defect
within
such period,
require
Residential
Funding to purchase such Mortgage Loan from the Trust Fund
at its Purchase
Price,
within 90 days from the date the Master Servicer was notified of
such
omission or defect;
provided
that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified
mortgage" as defined in Section
860G(a)(3) of the Code,
any such
cure or
repurchase
must occur within 90 days from the date such breach was
discovered.
The
Purchase
Price for any such
Mortgage
Loan shall be deposited by the Master
Servicer in the
Custodial
Account
maintained by it pursuant to Section 3.07 and, upon receipt by the
Trustee
of written
notification of such deposit signed by a Servicing
Officer,
the Master Servicer,
the Trustee or the
Custodian,
as the case may be, shall
release the contents of any related
Mortgage
File in its
possession
to the
owner
of
such
Mortgage
Loan
(or
such
owners'
designee)
and the
Trustee
shall
execute
and
deliver
such
instruments
of
transfer
or
assignment
prepared
by the
Master
Servicer,
in each case
without
recourse,
as shall be
necessary to vest in Residential
Funding or its designee any Mortgage Loan released
pursuant
hereto
and
thereafter
such
Mortgage
Loan
shall
not be part
of the
Trust
Fund.
It is
understood and agreed that the
obligation of
Residential
Funding to so cure or purchase any
Mortgage
Loan as to which a material
and
adverse
defect in or
omission
of a
constituent
document
exists
shall
constitute
the
sole
remedy
respecting
such
defect
or
omission
available
to
Certificateholders
or the Trustee on behalf of the
Certificateholders
or the
Certificate Insurer.
SECTION 2.03.
REPRESENTATIONS,
WARRANTIES
AND
COVENANTS
OF THE MASTER
SERVICER
AND THE
COMPANY.
(A)
For
representations,
warranties
and covenants of the Master
Servicer,
see Section
2.03(a) of the Standard Terms.
(B)
The
Company
hereby
represents
and
warrants
to the
Trustee
for the
benefit
of
Certificateholders
and the Certificate
Insurer that as of the Closing Date (or, if otherwise
specified below, as of the date so specified):
(I)
No Mortgage
Loan is 30 or more days
Delinquent
in payment of principal and interest
as of the Cut-off Date and no Mortgage
Loan has been so
Delinquent
more than
once in the 12-month period prior to the Cut-off Date;
(II)
The
information set forth in Exhibit One hereto with respect to each
Mortgage Loan or
the
Mortgage
Loans,
as the case may be, is true and correct in all
material
respects at the date or dates respecting which such information is
furnished;
(III)
The Mortgage Loans are payment-option
adjustable-rate
mortgage loans with a negative
amortization
feature with Monthly
Payments due, with respect to a majority of
the
Mortgage
Loans,
on the first day of each month and terms to
maturity at
origination or modification of not more than 40 years;
(IV)
To the best of the
Company's
knowledge,
except with respect to two Mortgage
Loans,
representing
no more than 4.9% of the aggregate
Stated
Principal
Balance of
the Mortgage Loans, if a Mortgage Loan is secured by a Mortgaged
Property with
a
Loan-to-Value
Ratio at
origination in excess of 80%, such Mortgage Loan is
the subject of a Primary
Insurance Policy that insures (a) at least 35% of the
Stated
Principal
Balance
of
the
Mortgage
Loan
at
origination
if
the
Loan-to-Value
Ratio is between
100.00%
and
95.01%,
(b) at least 30% of the
Stated
Principal
Balance
of
the
Mortgage
Loan
at
origination
if
the
Loan-to-Value
Ratio is
between
95.00% and
90.01%,
(c) at least 25% of such
balance
if the
Loan-to-Value
Ratio is
between
90.00% and 85.01% and (d) at
least 12% of such
balance if the
Loan-to-Value
Ratio is
between
85.00% and
80.01%.
To the best of the Company's
knowledge,
each such Primary
Insurance
Policy is in full force and effect and the Trustee is entitled to
the
benefits
thereunder;
(V)
The
issuers
of
the
Primary
Insurance
Policies
are
insurance
companies
whose
claims-paying abilities are currently acceptable to each Rating
Agency;
(VI)
No more than 0.9% of the Mortgage Loans by aggregate
Stated
Principal
Balance as of
the Cut-off
Date are secured by
Mortgaged
Properties
located in any one zip
code
area in
California,
and no more
than
0.5% of the
Mortgage
Loans
by
aggregate
Stated
Principal
Balance
as of the
Cut-off
Date are
secured by
Mortgaged Properties located in any one zip code area outside
California;
(VII)
The
improvements
upon the Mortgaged
Properties are insured against loss by fire and
other hazards as required by the Program Guide,
including
flood
insurance if
required
under the
National
Flood
Insurance
Act of 1968,
as amended.
The
Mortgage
requires the
Mortgagor to maintain
such
casualty
insurance at the
Mortgagor's
expense,
and on the Mortgagor's
failure to do so, authorizes the
holder
of
the
Mortgage
to
obtain
and
maintain
such
insurance
at
the
Mortgagor's expense and to seek reimbursement therefor from the
Mortgagor;
(VIII)
Immediately prior to the assignment of the Mortgage Loans to the
Trustee,
the Company
had good
title to,
and was the sole
owner of,
each
Mortgage
Loan free and
clear of any pledge, lien,
encumbrance or security interest (other than rights
to servicing and related
compensation)
and such assignment
validly transfers
ownership
of the
Mortgage
Loans to the Trustee free and clear of any pledge,
lien, encumbrance or security interest;
(IX)
No more than 88.48% of the Mortgage Loans by aggregate Stated
Principal
Balance as of
the Cut-off Date were underwritten under a reduced loan
documentation
program,
none of the
Mortgage
Loans as of the Cut-off Date were
underwritten
under a
no-stated
income
program,
and none of the
Mortgage
Loans as of the Cut-off
Date were underwritten under a no income/no asset program;
(X)
Except with
respect to no more than 5.8% of the Mortgage
Loans by
aggregate
Stated
Principal
Balance as of the Cut-off
Date,
the Mortgagor
represented
in its
loan
application
with respect to the related Mortgage Loan that the Mortgaged
Property would be owner-occupied;
(XI)
None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(XII)
Each Mortgage Loan
constitutes a qualified
mortgage under Section
860G(a)(3)(A)
of
the Code and Treasury
Regulation Section
1.860G-2(a)(1),
(2), (4), (5), (6),
(7) and (9) without reliance on the provisions of Treasury
Regulation
Section
1.860G-2(a)(3)
or
Treasury
Regulation
Section
1.860G-2(f)(2)
or any other
provision
that
would
allow a Mortgage
Loan to be
treated
as a
"qualified
mortgage"
notwithstanding
its
failure
to meet the
requirements
of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1),
(2),
(4), (5), (6), (7) and (9);
(XIII)
A policy of title
insurance was effective as of the closing of each Mortgage Loan and
is valid
and
binding
and
remains
in full
force
and
effect,
unless
the
Mortgaged
Properties
are
located
in the
State
of Iowa
and an
attorney's
certificate has been provided as described in the Program Guide;
(XIV)
No Mortgage Loan is a Cooperative Loan;
(XV)
With respect to each
Mortgage Loan
originated
under a
"streamlined"
Mortgage Loan
program
(through
which no new or updated
appraisals of Mortgaged
Properties
are obtained in connection
with the refinancing
thereof),
the related Seller
has represented that either (a) the value of the related Mortgaged
Property as
of the date the Mortgage
Loan was
originated
was not less than the appraised
value of such property at the time of origination
of the
refinanced
Mortgage
Loan or (b) the
Loan-to-Value
Ratio
of the
Mortgage
Loan as of the date of
origination
of the Mortgage Loan
generally
meets the Company's
underwriting
guidelines;
(XVI)
Interest
on
each
Mortgage
Loan
is
calculated
on the
basis
of a
360-day
year
consisting of twelve 30-day months;
(XVII)
None of the Mortgage Loans contain in the related
Mortgage File a Destroyed
Mortgage
Note;
(XVIII) Five of the Mortgage
Loans,
representing
no more than 0.1% of the Mortgage Loans by
aggregate Stated Principal Balance, have been made to International
Borrowers;
(XIX)
No Mortgage Loan
provides for payments
that are subject to reduction by
withholding
taxes levied by any foreign (non-United States) sovereign
government; and
(XX)
None of the Mortgage
Loans are Additional
Collateral
Loans and none of the Mortgage
Loans are Pledged Asset Loans.
It is
understood
and
agreed
that the
representations
and
warranties
set
forth in this
Section
2.03(b) shall survive
delivery of the
respective
Mortgage
Files to the Trustee or
any Custodian.
Upon
discovery
by any of the
Company,
the
Master
Servicer,
the
Trustee
or any
Custodian of a breach of any of the
representations
and warranties set forth in this Section
2.03(b) that materially and adversely affects the interests of the
Certificateholders
or the
Certificate
Insurer in any
Mortgage
Loan,
the party
discovering
such
breach
shall give
prompt
written
notice
to the
other
parties
(any
Custodian
being so
obligated
under a
Custodial Agreement);
provided,
however, that in the event of a breach of the representation
and warranty set forth in Section
2.03(b)(xii),
the party discovering such breach shall give
such notice
within five days of
discovery.
Within 90 days of its
discovery
or its receipt
of notice of breach,
the Company
shall either (i) cure such breach in all material
respects
or (ii)
purchase
such
Mortgage
Loan from the Trust Fund at the
Purchase
Price and in the
manner
set
forth in
Section
2.02;
provided
that the
Company
shall
have the
option to
substitute
a
Qualified
Substitute
Mortgage
Loan or Loans for such
Mortgage
Loan if such
substitution
occurs
within
two years
following
the
Closing
Date;
provided
that if the
omission or defect
would cause the Mortgage
Loan to be other than a "qualified
mortgage" as
defined in Section
860G(a)(3) of the Code,
any such cure or repurchase
must occur within 90
days from the date such
breach was
discovered.
Any such
substitution
shall be effected by
the
Company
under
the
same
terms
and
conditions
as
provided
in
Section
2.04
for
substitutions
by
Residential
Funding.
It is understood
and agreed that the
obligation of
the Company to cure such breach or to so purchase or
substitute
for any Mortgage
Loan as to
which
such a
breach
has
occurred
and is
continuing
shall
constitute
the
sole
remedy
respecting
such breach
available to the
Certificateholders
or the Trustee on behalf of the
Certificateholders or the Certificate Insurer.
SECTION 2.04.
REPRESENTATIONS AND WARRANTIES OF SELLERS.
The
Company,
as assignee of
Residential
Funding
under the
Assignment
Agreement,
hereby
assigns to the
Trustee
for the
benefit of
Certificateholders
and the
Certificate
Insurer
all of its
right,
title
and
interest
in
respect
of
the
Assignment
Agreement
applicable
to
a
Mortgage
Loan.
Insofar
as
the
Assignment
Agreement
relates
to
the
representations
and warranties
made by Residential
Funding in respect of such Mortgage Loan
and any remedies provided
thereunder for any breach of such
representations
and warranties,
such
right,
title and
interest
may be
enforced
by the Master
Servicer
on behalf of the
Trustee and the
Certificateholders
and the
Certificate
Insurer.
Upon the discovery by the
Company,
the
Master
Servicer,
the
Trustee
or the
Custodian
of a
breach
of any of the
representations
and warranties made in the Assignment
Agreement (which, for purposes hereof,
will be deemed to include any other cause
giving rise to a
repurchase
obligation
under the
Assignment
Agreement) in respect of any Mortgage Loan which materially and
adversely
affects
the interests of the
Certificateholders
or the
Certificate
Insurer in such Mortgage
Loan,
the party
discovering
such breach shall give prompt written notice to the other parties
(the
Custodian
being
so
obligated
under a
Custodial
Agreement).
The
Master
Servicer
shall
promptly
notify
Residential
Funding of such breach and
request
that
Residential
Funding
either (i) cure such breach in all material
respects
within 90 days from the date the Master
Servicer was notified of such breach or (ii)
purchase
such Mortgage Loan from the Trust Fund
at the Purchase Price and in the manner set forth in Section 2.02;
provided that
Residential
Funding
shall have the option to
substitute a Qualified
Substitute
Mortgage
Loan or Loans
for such Mortgage
Loan if such
substitution
occurs
within two years
following the Closing
Date;
provided
that
if the
breach
would
cause
the
Mortgage
Loan
to be
other
than a
"qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure,
repurchase
or
substitution
must
occur
within 90 days from the date the breach
was
discovered.
If a
breach
of the
Compliance
With
Laws
Representation
has given
rise to the
obligation
to
repurchase or substitute a Mortgage
Loan pursuant to Section 4 of the
Assignment
Agreement,
then the Master
Servicer
shall
request
that
Residential
Funding
pay to the Trust
Fund,
concurrently
with and in addition to the
remedies
provided in the
preceding
sentence,
an
amount equal to any liability,
penalty or expense that was actually
incurred and paid out of
or on behalf of the Trust Fund,
and that directly
resulted from such breach,
or if incurred
and paid by the Trust
Fund
thereafter,
concurrently
with such
payment.
In the event that
Residential
Funding elects to substitute a Qualified
Substitute Mortgage Loan or Loans for a
Deleted
Mortgage
Loan pursuant to this Section
2.04,
Residential
Funding shall deliver to
the Trustee or the Custodian
for the benefit of the
Certificateholders
and the
Certificate
Insurer
with
respect to such
Qualified
Substitute
Mortgage
Loan or Loans,
the
original
Mortgage
Note,
the Mortgage,
an Assignment of the Mortgage in recordable
form, if required
pursuant to Section 2.01,
and such other
documents and agreements as are required by Section
2.01,
with the Mortgage Note endorsed as required by Section
2.01. No
substitution
will be
made in any
calendar
month after the
Determination
Date for such month.
Monthly
Payments
due with respect to Qualified
Substitute
Mortgage Loans in the month of
substitution
shall
not be part of the Trust Fund and will be
retained
by the Master
Servicer
and
remitted by
the Master
Servicer to
Residential
Funding on the next
succeeding
Distribution
Date. For
the month of substitution,
distributions to the
Certificateholders
will include the Monthly
Payment
due on a Deleted
Mortgage
Loan for such month and
thereafter
Residential
Funding
shall be entitled to retain all amounts
received in respect of such
Deleted
Mortgage
Loan.
The Master
Servicer
shall amend or cause to be amended the Mortgage Loan
Schedule,
and, if
the Deleted
Mortgage Loan was a Discount
Mortgage Loan, the Schedule of Discount
Fractions,
for the benefit of the
Certificateholders
and the Certificate Insurer to reflect the removal
of such Deleted Mortgage Loan and the substitution of the Qualified
Substitute
Mortgage Loan
or Loans and the Master
Servicer shall deliver the amended
Mortgage Loan
Schedule,
and, if
the Deleted
Mortgage
Loan was a Discount
Mortgage
Loan,
the amended
Schedule of Discount
Fractions,
to the Trustee.
Upon such substitution,
the Qualified
Substitute
Mortgage Loan
or
Loans
shall be
subject
to the
terms of this
Agreement
and the
related
Subservicing
Agreement
in
all
respects,
Residential
Funding
shall
be
deemed
to
have
made
the
representations
and
warranties
with
respect
to the
Qualified
Substitute
Mortgage
Loan
contained in the related Assignment
Agreement,
and the Company and the Master Servicer shall
be deemed to have made with respect to any Qualified
Substitute
Mortgage
Loan or Loans,
as
of the date of substitution,
the covenants,
representations and warranties set forth in this
Section 2.04,
in Section 2.03 hereof and in Section 4 of the
Assignment
Agreement,
and the
Master
Servicer shall be obligated to repurchase or substitute
for any Qualified
Substitute
Mortgage
Loan as to which a Repurchase
Event (as defined in the
Assignment
Agreement)
has
occurred pursuant to Section 4 of the Assignment Agreement.
In connection
with the
substitution
of one or more
Qualified
Substitute
Mortgage
Loans for one or more Deleted
Mortgage
Loans,
the Master Servicer will determine the amount
(if any) by which the aggregate
principal balance of all such Qualified
Substitute
Mortgage
Loans as of the date of substitution is less than the aggregate
Stated
Principal
Balance of
all such Deleted
Mortgage Loans (in each case after
application of the principal
portion of
the
Monthly
Payments
due in the month of
substitution
that are to be
distributed
to the
Certificateholders
in the month of
substitution).
Residential
Funding
shall
deposit
the
amount of such shortfall into the Custodial
Account on the day of
substitution,
without any
reimbursement
therefor.
Residential
Funding
shall give notice in writing to the Trustee of
such
event,
which
notice
shall
be
accompanied
by an
Officers'
Certificate
as to
the
calculation
of such
shortfall and (subject to Section
10.01(f)) by an Opinion of Counsel to
the effect
that such
substitution
will not cause (a) any
federal
tax to be imposed on the
Trust
Fund,
including
without
limitation,
any
federal
tax
imposed
on
"prohibited
transactions"
under
Section
