EX-99.3 4 efc7-0020_emailex993.txt Exhibit 99.3 [Insert Credit Insurance Policy] 9 Exhibit 99.3 No. v21 Renewal of Policy No. __________ CREDIT INSURANCE POLICY [LOGO OMITTED] OLD REPUBLIC INSURANCE COMPANY GREENSBURG, PENNSYLVANIA A STOCK COMPANY (hereinafter called the Company) In consideration of the stipulations and provisions hereinafter set forth and of the premium hereinafter specified, does insure The Bank of New York, as trustee for the benefit of the holders of Home Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation, a corporation organized under the laws of NEW YORK, hereinafter called the Assured, whose address is New York, New York, against loss (only as herein defined and limited) due to Default by a Borrower from the Assured in the repayment to the Assured of Loans evidenced by Eligible Notes, reported to the Company and insured hereunder which were made to finance the alteration, repair, conversion, improvement or modernization of real property. This Policy shall be effective from the 1st day of December 2006 at 12:01 A.M. at the place of business of the Assured and shall remain in force continuously until cancelled. The coverage afforded by this Policy shall attach to a particular loan coincident with the actual disbursement by the Assured of the Loan during much period. The Assured shall pay the Company a premium calculated upon the entire term of the Note at the rate of As Endorsed Hereunder % per annum of the net proceeds (as hereinafter defined) of any Loan reported for insurance, which premium shall be payable within 15 days after the close of the month in which the Loan is made or purchased. In computing the premium, no charge shall be made for a fractional period of a month consisting of 15 days or less and a charge for a full month shall be made for a fractional period of a month consisting of more than 15 days. Loans shall be reported to the Company for insurance on the form prescribed by the Company within 15 days after the close of the month in which the Loan is made or purchased. The Company's liability for loss with respect to any Insured Loan or Loans to an individual Borrower who defaults to the Assured hereunder shall be limited to five thousand dollars ($5,000.00) unless a higher limit is specifically approved by the Company and is endorsed hereon. The Company's maximum cumulative liability for Loss under this Policy is further limited to ten percent (10%) of the Aggregate net proceeds of loans insured hereunder made by the Assured during the 12 month period immediately following the effective date of this Policy and during each succeeding 12 month period in which this Policy is in full force and effect. The Company's maximum liability under this Policy shall in no event exceed $49,796,981 during each such 12 month period. This Policy is made and accepted subject to the foregoing provisions and stipulations and those hereinafter stated which are hereby made part of this Policy, together with such other provisions, stipulations and agreements as may be added hereto, as provided in this Policy. IN WITNESS WHEREOF, the Company has duly executed these presents; but this Policy shall not be valid unless countersigned by a duly authorized representative of the Company. Countersigned this 27th /s/ J.A. Kellogg -------------- President day of December, 2006. --------- -- OLD REPUBLIC INSURANCE COMPANY /s/ Spencer LeRoy III Secretary By /s/ _____________________________ Authorized Representative ICS-1C-Rev. 8/59 01/06 PROVISIONS AND STIPULATIONS 1. DEFINITIONS a. "Loan" means an advance of funds, or the purchase of an obligation, evidenced by an Eligible Note, the proceeds of which have been or are to be used for the alteration, repair conversion, improvement or modernization of real property located within the continental limits of the United States of America. b. "Eligible Note" or "Note" means any written evidence of obligation, including a note, bond, mortgage or indenture which: (1) Bears the genuine signature of the Borrower and all other parties to the instrument, is complete and regular on its face, and is valid and enforceable against the Borrower; and (2) Contains an acceleration clause which provides for acceleration of maturity either automatically or at the option of the holder, in the event of default in payment of any installment upon the due date thereof; and (3) Contains payment and maturity requirements meeting the following specifications: The Note shall be payable in approximately equal monthly installments, the first of which shall fall due within six months and the last within sixty months and 32 days from the date of the Note. If the principal income of the Borrower is derived from a seasonal operation or business, the Note may be made payable in installments corresponding with the seasonal variation in Borrower's income shown on his application, for credit; provided the first installment is payable within twelve months of the date of the Notes and further, provided that the sum of installments to be paid in any year subsequent to the first year shall not be greater than the proportion of the total debt which is to be paid in the first year; and further provided that a token payment is due in each off-season month; and (4) Is for an amount such that the net proceeds, as defined below, of such note plus the then unpaid net proceeds of any other loans insured by the Company made by the Assured to the individual Borrower making the note are not in excess of $5,000.00, except that specified notes for greater amounts may be insured hereunder upon endorsement of this policy specifically insuring such notes. c. "Borrower" means one, whether individual, partnership, corporation or other legal entity, who applies for and receives a Loan, evidenced by an Eligible Note, and whose interest in the real property to be improved is: (1) A fee title; (2) a life estate; (3) a leasehold estate having a fixed term expiring after the maturity of the Note; or (4) an equitable interest under a contract or deed of trust to create an interest in real property of the character described in (1), (2) or (3). No such person shall be accepted by the Assured as a Borrower if such person is past due more than fifteen days as to the payment of an obligation owed the Assured or any obligation insured by the Company or is past due more than thirty days as to the payment of any other indebtedness evidenced by a note, bond or contract signed by such person and the Assured through its usual credit investigation is placed on notice of such fact or facts, unless other circumstances known to the Assured make a loan to such person a credit risk acceptable to a prudent lender. d. "Payment" or "Installment" means a deposit by the Borrower with the Assured of funds which represent the full or partial repayment of a Loan according to the terms of the Note evidencing such Loan. e. "Default" means the failure of the Borrower to make any payment to the Assured at the time and in the manner and amount specified in the Note evidencing the Loan. f. "Date of Default" means the earliest date upon which an installment or payment was due which was not paid by the Borrower according to the terms of the Note. g. "Loss" means the amount payable to the Assured by the Company as provided in paragraph 5 hereof. h. "Net Proceeds" means the amount of the loan actually made or the purchase price of the note, exclusive of finance charges, fees, and other deductions. 2. CONDITIONS PRECEDENT TO RECOVERY Prior to leaking a Loan, the Assured shall obtain a dated credit application fully executed by the Borrower. The credit application supplemented by such other information as the Assured deems necessary, must, in the judgment of the Assured, clearly show the Borrower to be solvent, with reasonable ability to repay the Loan, and in other respects a reasonable credit risk. If, after the Loan is made, the Assured discovers any material misstatements in the credit application, or misuse of the proceeds of the Loan by the Borrower, the Assured shall promptly report such discovery to the Company. The Assured shall exercise due diligence in disbursing proceeds of loans and in effecting collections and shall service its Loans in accordance with acceptable practices of prudent lending institutions. All payments received on account of the Note, except late charges, must be applied to the maturing installments in their order, except that any sum received by the Assured in excess of three advanced monthly payments shall be credited to the final installments in the absence of specific written instructions from the Borrower to do otherwise. Claim may be made after Default provided written demand has been made on the Borrower for the full unpaid balance of the Note. The Company reserves the right to require the Assured to reduce the Note to judgment subject to the limitations of the terms of the Note. 3. NOTICE OF DEFAULT AND FILING OF CLAIMS FOR LOSS Should a Default continue the a period of 90 days, notice thereof must be filed with the Company monthly thereafter, on the form prescribed by the Company until the Default is cured or a claim of Logs filed. A claim for Loss may be filed as to an individual Loan at any time after Default but in no event later than six months after Default unless the Company shall grant an extension of the claim period in writing. Claims shall be filed on Proof of Loss forms provided by the Company, which shall include an assignment of the Assured's interest in the defaulted Note to the Company or such other person as may be designated by the Company as assignee. 4. PAYMENT OF LOSS All adjusted claims shall be paid or made good within thirty days after presentation of satisfactory evidence of Loss to the Company. 5. LIMIT OF LOSS In addition to the limitations heretofore set out, the Company shall be obligated to pay hereunder only the full unpaid balance of the Note or of the actual purchase price thereof, whichever is lesser, less the unearned discount thereon, plus a. uncollected earned interest to date of Default and interest at the rate of 4% per annum from the date of Default to the date of presentation of Proof of Loss; plus b. uncollected court costs (including fees paid for issuing, serving and filing summons); plus c. attorneys' fees actually paid, not exceeding: (1) 25 percent of the amount collected by the attorney on the defaulted Note provided the Assured does not waive its claim against the Borrower for such fees; plus (2) $25.00 or 15 percent of the balance due on the Note, whichever is the lesser, if a judgment is secured by suit, or $10.00 or 15 percent of the balance due on the Note, whichever is the lesser, if a judgment is secured by confession after default; plus (3) $50.00 plus 5 percent of the balance due on the Note as an additional fee where the action is contested and judgment is obtained; less any part of the foregoing amounts which the Assured has collected from others, or which the Assured can collect from a reserve or holdback funds in its hands. 6. SUBROGATION In the event any payment under this Policy, the Company shall be subrogated to all of the Assured's rights of recovery against the Borrower and any other person or organization liable under the terms of the defaulted Note and against any reserve or holdback funds in its hands, and the Assured shall execute and deliver at the request of the Company instruments and papers and do whatever else is necessary to transfer, assign and secure such rights. The Assured shall do nothing after Loss to prejudice such rights, and the execution by the Assured of a release or waiver of the right to collect the unpaid balance of a Loan shall equally release the Company from any further obligation under this Policy as to said Loan, anything in this Policy to the contrary notwithstanding. 7. TRANSFER OR PREPAYMENT OF LOANS REPORTED FOR INSURANCE All liability under this Policy with respect to any individual loan shall terminate upon sale or transfer (including without limiting the generality of application of this section, transfers pursuant to, or resulting from merger or consolidation of the Assured with any other corporation or company) of such loan, or the note evidencing same to any transferee not holding a similar Policy issued by the Company. Such sales or transfers may be made to a transferee holding a similar Policy issued by the Company only with the prior written approval of the Company. In the event of such a sale or transfer, the continuing liability of the Company to the transferee with regard to the loan or loans sold or transferred shall be ten percent of the aggregate unpaid balance of the net proceeds of such loan or loans at the time of transfer or sale, and the aggregate limit of liability of the Company to the Assured hereunder shall be reduced by an equal amount. In no event will the Company refund any premium to the Assured upon the sale or transfer of any loan or loans insured hereunder. Nothing contained herein shall be construed to prevent the pledging of such loans, or the notes evidencing the, came, as collateral security under a hone fide loan agreement. In the event that the Borrower shall prepay an eligible loan for which the required premium has been paid by the Assured to the Company, upon receipt of a report of such prepayment and application for premium refund on the form prescribed by the Company, the Company shall return to the Assured a premium refund calculated according to the sum-of-the-digits method, and the aggregate cumulative liability of the Company hereunder shall be reduced by ten percent of the original net proceeds of said loan. 8. REPORTS AND EXAMINATION The Company may at any time call upon the Assured for such reports as it may deem necessary and may inspect the books or the Accounts of the Assured as they pertain to the Loans reported for insurance hereunder. All Loans reported to the Company for insurance hereunder shall be identified by methods satisfactory to the Company on the records of the Assured. 9. AMENDMENTS Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of this Policy or estop the Company from asserting any right under the terms of this Policy. The terms of this Policy may be waived or changed only after written approval of the Company and by an endorsement signed on behalf of the Company by its President, Vice President or Secretary and countersigned by a duly authorized representative of the Company. 10. MISREPRESENTATION AND FRAUD The Policy shall be void if the Assured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof or in case of any fraud, attempted fraud or false swearing by the Assured touching any matter relating to this insurance or the subject thereof whether before or after a loss, or if the Assured shall make any claim which is false or fraudulent either in amount or otherwise. 11. OTHER INSURANCE If at the time of Loss or Default there is any other valid and collectible insurance which would attach if this insurance had not been effected, this insurance shall apply only as excess and in no event as contributing insurance, and then only after all other insurance has been exhausted. 12. ASSIGNMENT OF POLICY This Policy shall be void if assigned or transferred without the written consent of this Company, whether such transfer be voluntary or involuntary. 13. SUIT AGAINST COMPANY No quit, action or proceeding for the recovery of any claim under this Policy shall he instituted or sustainable in any court of law or equity unless Proof of Loss has been duly filed with respect thereto, and unless such suit, action or proceeding be commenced within twelve months next after Default; provided, however, that if by the laws of the State within which this Policy is issued such limitation is invalid, then any such claims shall be void unless such action, suit or proceedings be commenced within the shortest limit of time permitted by the laws of such State to be fixed herein. 14. CANCELLATION This Policy may be cancelled by the Assured by mailing to the Company written notice stating when thereafter such cancellation shall be effective. This Policy may be cancelled by the Company by mailing to the Assured at the address shown in this Policy or last known address written notice stating when, not less than five days thereafter, such cancellation shall be effective. The. mailing of notice as aforesaid shall be sufficient proof of notice and the effective date of cancellation stated in the notice shall become the end of the policy period. Delivery of such written notice either by the Assured or by the Company shall he equivalent to mailing. Cancellation of this Policy shall not affect the insurance privilege of the Assured with respect to any loan previously reported for insurance. 15. CONFORMITY TO STATUTE Terms of this Policy which are in conflict with the statutes of the State wherein this Policy is issued are hereby amended to conform to such statutes. No. v15 Renewal of Policy No. ______________ [LOGO] OLD REPUBLIC Insurance Company GREENSBURG, PENNSYLVANIA (A STOCK COMPANY) The Bank of New York, as trustee for the benefit of the holders of Home Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Capital Insurance Corporation New York, New York ISSUED TO CREDIT INSURANCE POLICY ICS-1C--Rev. 8/59 01/06 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Page 1, Paragraph 5, Sentence 1 of the Policy is deleted in its entirety and replaced with: "The Company's liability for Loss with respect to any Insured Loan or Loans to an individual Borrower who defaults to the Assured hereunder shall be limited to three hundred fifty thousand dollars ($350,000.00), provided such Insured Loan meets all of the qualifications set forth in the Company's qualifying specifications for guideline underwriting and Company 'Sanctioned Guidelines' in effect on the date of such Insured Loan, unless a higher limit is specifically approved by the Company through the issuance of a Certificate of Insurance effective as of the date of the Loan." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-05A006H.0X v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 1, under Provisions and Stipulations, Definition b (3), Sentence 1 is deleted in its entirety and replaced with: "Contains payment and maturity requirements meeting the following specifications: The Note shall he payable in approximately equal monthly installments, the first of which shall fall due within six months and the last within 360 months and 32 days from the date of the Note." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-06A007B.0 v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 1, under Provisions and Stipulations, Definition b. (4) of the Policy is deleted in its entirety and replaced with: "Is for an amount such that the insured Net Proceeds, as defined below, of such Note plus the then unpaid insured Net Proceeds of any other Loans insured by the Company made by the Assured to the individual Borrower making the Note are not in excess of Three Hundred Fifty Thousand Dollars (350,000,000), and that (b) such insured Note meets the Company's qualifying specifications for underwriting and Company 'Sanctioned Guidelines' in effect on the day of the Loan, except that specified Notes for greater amounts may be insured hereunder upon the issuance by the Company of a certificate of insurance specifically insuring such Notes." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-06A008H.0X v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Page 1, Paragraph 2, Sentence 2 and Paragraph 3 are deleted in its entirety and replaced with: "The coverage afforded by this Policy shall attach to a particular Loan commencing with the first premium payment by the Assured to the Company for such Loan. "The Assured shall pay the Company a monthly premium as endorsed hereunder on the unpaid balance outstanding at the beginning of every month of any Loan reported for insurance. The premium shall be payable on the 25th day of every month in which there is an unpaid balance outstanding on a Loan reported for insurance. The first premium payment shall be due on the date upon which the Loan is reported for insurance." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-03A001A.0X v.060127 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Page 1, is supplemented as follows: "Notwithstanding any terms to the contrary in the Policy and each endorsement thereto, the Company acknowledges that the duties and obligations of the Assured under the Policy will be performed by the servicer of the Loans and not by the Assured, other than the duty to pay the premium which shall remain with the Assured. The Company will treat such servicer as the Assured for all such purposes under the Policy. The Assured shall remain the beneficiary of any payments made by the Company under the Policy." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-99A015A.0SO v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania This endorsement is issued in consideration of the Assured's request for the change in mode of premium permitted herein. It is hereby understood and agreed that coincident with the effective date of the Policy, Section 7 under Provisions and Stipulations is deleted in its entirety and replaced with: "All liability for Loss under this Policy with respect to any individual Loan shall terminate upon sale or transfer of such Loan (including, without limiting the generality of application of this section, transfers pursuant to or resulting from merger or consolidation of the Assured with any other corporation or company). Such sales or transfers may be made to a transferee holding a similar Policy issued by the Company only with the prior written approval of the Company. In no event will the Company refund any premium to the Assured upon the sale or transfer of any Loan or Loans insured hereunder. In the event of a sale or transfer, the cumulative liability for Loss for the applicable Policy Period shall be reduced by ten percent (10%) of the Net Proceeds of all such Loans. If at the time of any sale or transfer of Loans the Losses paid by the Company exceed the reduced cumulative liability for Loss for the applicable Policy Period, the Assured shall refund such excess to the Company within thirty (30) days of the Company's invoice and the Company shall have no further liability for Loss for that Policy Period. Nothing contained herein shall be construed to prevent the pledging of such Loans as collateral security under a bona fide loan agreement." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-12A018A.0X v.060906 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 2 under Provisions and Stipulations, Paragraph 4, Sentence 2, which reads: The Company reserves the right to require the Assured to reduce the Note to judgment subject to the limitations of the terms of the Note." is deleted in its entirety. Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-06A026A.0X v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 5.a. under Provisions and Stipulations is deleted in its entirety and replaced with: "uncollected earned interest shall be paid to the date of presentation of proof of Loss; plus". Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-10A027B.0 v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 6, Sentence 1 is deleted in its entirety and replaced with. In the event of any payment under this Policy, the Company shall be subrogated to all of the Assured's rights of recovery against the Borrower and any other person or organization liable under the terms of the defaulted Note and the Assured shall execute and deliver at the request of the Company instruments and papers and do whatever else is necessary to transfer, assign and secure such rights." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-11A028A.0SO v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 2, paragraph 3, sentence 1 under Provisions and Stipulations is deleted in its entirety and replaced with "All payments received on account of the Note, except late charges, must be applied to the maturing installments in their order in the absence of specific written instructions from the Borrower to do otherwise." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-06D033A.0X v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the policy Page 1, Paragraph 3, Sentence 1 is modified to read: The Assured shall pay the Company a monthly premium as indicated on the attached Schedule A on the unpaid balance outstanding at the beginning of every month of each Loan reported for insurance. Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-03A0121S.0 v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 1 under Provisions and Stipulations, Definition c. of the Policy is deleted in its entirety and replaced with: "'Borrower' means one, whether individual, partnership, corporation or other legal entity, who applies for and receives a Loan, evidenced by an Eligible Note." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-10A049A.0SO v.060328 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 1, Definition a., under Provisions and Stipulations is deleted in its entirety and replaced with: "'Loan' means an advance of funds, evidenced by an Eligible Note, the proceeds of which have been or are to be used for any lawful purpose, located within the United States of America." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-06A081A.0SO v.060328 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 5, Sentence 1 under Provisions and Stipulations is deleted: "or of the actual purchase price thereof, whichever is lesser, less the unearned discount thereon," Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-10A082A.0SO v.060328 ENDORSEMENT This endorsement, effective December 20, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 4 under Provisions and Stipulations is deleted in its entirety and replaced with: All Losses shall be paid or made good within thirty days after presentation of satisfactory evidence of Loss to the Company. Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-09A083A.0SO v.060328 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 9, Sentence 2 under Provisions and Stipulations is deleted in its entirety and replaced with: The terms of this Policy may be waived or changed only after written approval of the Company and by an Endorsement signed on behalf of the Company by its President, Vice President or Secretary and countersigned by a duly authorized representative of the Company. Such endorsement shall only be effective with respect to Loans that are reported for insurance after the effective date of that endorsement." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-14A084A.0X v.051101 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 13 is amended as follows: The word "Default" is replaced with the term "Proof of Loss has been filed". Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-17A085A.0SO v.060328 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, the following language in Section 5, under Provisions and Stipulations is deleted: "less any part of the foregoing amounts which the Assured has collected from others, or which the Assured can collect from a reserve or holdback funds in its hands." and replaced with: "unless agreed to by the Company." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-10A086A.0X v.060823 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania This endorsement is issued in consideration of the Assured's request for the change in mode of premium permitted herein. It is hereby understood and agreed that coincident with the effective date of the Policy, Section 14 under Provisions and Stipulations, Paragraph 2 is deleted in its entirety and replaced with: "Cancellation of this Policy by the Company shall not affect the insurance coverage on Loans previously reported to the Company for insurance pursuant to the fourth paragraph of the Policy, and the Assured shall continue to remit monthly premium payment with respect to all such Loans." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-18A088S.0X v.060329 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 1 under Provisions and Stipulations is supplemented by adding an additional definition as follows: i. "Physical Damage" means any unrestored or unremediated tangible injury, other than reasonable wear and tear, to the real property that collateralizes the Loan whether caused by accident or otherwise, including, but not limited to, physical injury to or destruction of the property, defects in construction, land subsidence, earth movement or slippage, earthquake, flood, or any other act of God, riot, insurrection, civil strife, or acts of terrorism or war, that materially affects the use, marketability or value of the property. For the purposes of this definition, "materially" means that the total costs of restoration or remediation of the property due to such injury is at least $1500.00. Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-06A102A.0P v.060808 ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V 21 issued to The Bank of New York, as Trustee for the benefit of the holders of the Equity Loan Asset Backed Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Section 1 (e) under Provisions and Stipulations is deleted in its entirety and replaced with: "Default" means the failure of the Borrower to make any payment to the Assured at the time and the manner and amount specified in the Note evidencing the Loan, provided the failure occurs after the date the Loan is reported for insurance hereunder and before Physical Damage to property collateralizing the Loan occurs. Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ---------------------------------------- 1-06A103A.0P v.060808 [graphics omitted] Countrywide Final Guideline Update ------------------------------------------------------------------------------- Last Revision Date: 11/24/2006 ASSOCIATED BULLETIN(S) ------------------------------------------------------------------------------- Product Change Number Bulletin Number Link to Bulletin ------------------------------------------------------------------------------- SECTION 24: Home Equity Products 24.10: HELOCs and Fixed Rate Seconds ------------------------------------------------------------------------------- Overview This section of the Loan Program Guide includes the guidelines for the Home Equity Line of Credit (HELOC) and fixed rate second products. Special Requirements -------------------- Countrywide's Loan Underwriting Expert System (CLUES) usage is required. Please note that CLUES may accept loans that exceed credit ratio and reserve guidelines when strong copmpensating factors are present. When it does, an explanation of the Accept decision is provided in the CLUES output. Loans not receiving a CLUES Accept that may be manually underwritten must meet all published loan program guidelines. Eligible Occupancy Types ------------------------ ------------------------------------------------------------------------------- Occupancy Type HELOC Fixed Rate Second ------------------------------------------------------------------------------- Owner-Occupied Allowed Allowed ------------------------------------------------------------------------------- Second Home Allowed Allowed ------------------------------------------------------------------------------- Investment Allowed Allowed ------------------------------------------------------------------------------- [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Maximum CLTV ------------ Owner-Occupied
--------------------------------------------------------------------------------- -------------------------------------------------- Full/Alt/Streamlined Documentation Reduced Documentation --------------------------------------------------------------------------------- -------------------------------------------------- Property Type Gold Preferred Flex Expanded Gold Preferred Flex Credit Score Credit Score Credit Score Credit Score Credit Score Credit Score Credit Score >=700 >=660 >=620 >=580 >=700 >=660 >=620 ---------------------------------------------------------------------------------- ------------------------------------------------- Attached/ 100% 100% 100% 90% 100% 100% 100% Detached SFRs Attached/ Detached PUDs Low/High-Rise Condos 2-Units ---------------------------------------------------------------------------------- ------------------------------------------------- 3-4 Units 100% 95% 95% Not Allowed 95% 95% 90% ---------------------------------------------------------------------------------- ------------------------------------------------- Second Home ------------------------------------------------------------------ ----------------------------------------------------------------- Full/Alt/Streamlined Documentation Reduced Documentation ------------------------------------------------------------------ ----------------------------------------------------------------- Property Type Gold Preferred Flex Gold Preferred Flex Credit Score Credit Score Credit Score Credit Score Credit Score Credit Score >=700 >=660 >=620 >=700 >=660 >=620 ------------------------------------------------------------------ ----------------------------------------------------------------- Attached/Detach 100% 100% 95% 100% 100% 90% SFRs Attached/Detach PUDS Low/High-Rise Condos ------------------------------------------------------------------------------------------------------------------------------------ 2-4 Units Not Allowed ------------------------------------------------------------------------------------------------------------------------------------ Investment ------------------------------------------------------------------ ----------------------------------------------------------------- Full/Alt/Streamlined Documentation Reduced Documentation ------------------------------------------------------------------ ----------------------------------------------------------------- Property Type Gold Preferred Flex Gold Preferred Flex Credit Score Credit Score Credit Score Credit Score Credit Score Credit Score >=700 >=660 >=620 >=700 >=660 >=620 ------------------------------------------------------------------ ----------------------------------------------------------------- Attached/Detached 95% 95% 90% 95% 95% 90% SFRs Attached/Detached PUDs Low/High-Rise Condos 2-Units ------------------------------------------------------------------------------------------------------------------------------------ 3-4 Units 95% 90% 90% 95% 90% 90% ------------------------------------------------------------------------------------------------------------------------------------
[graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Minimum Loan/Initial Draw Amount --------------------------------
------------------------------------------------------------------------------------------------------ HELOCs [2] Fixed Rate Seconds [2] --------------------------------------------------- ---------------------------------- Stand Alone Concurrent --------------------------------------------------- Stand Alone Concurrent Cost No Cost[1] Cost No Cost --------------------------------------------------- ---------------------------------- Minimum Loan o $7,500 or state requirement $7,500 or state o $7,500 or state $7,500 Amount (with add-on) requirement requirement (with o $15,000 or state requirement add-on) (without add-on) o $15,000 or state requirement (with add-on) ------------------------------------------------------------------------------------------------------ Draw None required $7,500 None Required Not applicable as the entire loan Requirement ($30,000 if line amount is disbured at funding. > $100,000) ------------------------------------------------------------------------------------------------------ Small Loan Loan amounts between None Loan amounts between None Amount $7,500 and $14,999 are $7,500 and $14,999 are Pricing allowed, subject to pricing allowed, subject to Add-ons add-ons. pricing add-ons. ------------------------------------------------------------------------------------------------------
Restrictions o [1]For no closing cost HELCOs, the minimum initial draw must remain outstanding for 180 days. If the borrower makes a principal reduction below the minimum draw requirement, the borrower will be charged the third party costs incurred at closing for which CFC originally paid. o [2] Loan and draw amounts are further limited by state restrictions as follows: [ ] Arizona: Loan/line amount must be > $10,100. [ ] Connecticut: Cost: Initial draw for a HELCO is $5,100. [ ] Kentucky: Loan/line amount and initial draw must be $15,100.
Maximum Loan/Line Amount ------------------------ ------------------------------------------------------------------------------------------------------------------------- Credit Score Classification ------------------------------------------------------------------------------------------------------------------------- CLTV Gold Preferred Flex Expanded Credit Score >= 700 Credit Score >= 660 Credit Score >= 620 Credit Score >= 580 ------------------------------------------ ------------------------------------------------------ ----------------------- Full/Alt/ Reduced Full/Alt/ Reduced Full/Alt/ Reduced Full Doc Streamlined Doc Streamlined Doc Streamlined Doc Only ------------------------------------------ ------------------------------------------------------ ----------------------- CLTV <= 100% $500,000 $500,000 $500,000 $500,000 $250,000 $250,000 Not Allowed ------------------------------------------ ------------------------------------------------------ ----------------------- CLTV <=95% $750,000 $750,000 $500,000 $500,000 $500,000 $500,000 Not Allowed ------------------------------------------ ------------------------------------------------------ ----------------------- CLTV <=90% $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $200,000 ------------------------------------------ ------------------------------------------------------ ----------------------- CLTV <=80% $2,000,000 $2,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $200,000 ------------------------------------------ ------------------------------------------------------ ----------------------- CLTV <=70% $2,000,000 $2,000,000 $2,000,000 $2,000,000 $1,000,000 $1,000,000 $200,000 -------------------------------------------------------------------------------------------------------------------------
[graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Eligible/Ineligible Senior Liens -------------------------------- The purpose of this section is to assist structuring potential concurrent transactions. THE STRICTER OF FIRST AND SECOND MORTGAGE GUIDELINES PREVAIL. ALWAYS REFER TO THE CONVENTIONAL LENDING PROGRAMS AND TECHNICAL UNDERWRITING MANUALS FOR ADDITIONAL REQUIREMENTS. When a loan is not eligible for concurrent closing, but is allowed on a standalone basis, the application must be dated at least one day after the funding of the first mortgage.
---------------------------------------------------------------------------------------------------------------------- First Lien Piggyback Standalone ---------------------------------------------------------------------------------------------------------------------- Adjustable Rate Mortgage Loans [2] Yes Yes ---------------------------------------------------------------------------------------------------------------------- Balloon Loans No Yes ---------------------------------------------------------------------------------------------------------------------- Fixed Period ARMs [2] Yes Yes ---------------------------------------------------------------------------------------------------------------------- Fixed Rate [2] Yes Yes ---------------------------------------------------------------------------------------------------------------------- Potential Negative Amortization Yes Yes Loans o Allowed behind CFC Pay Option Maximum adjusted CLTV 100%, o Maximum LTV/ (unadjusted) CLTV: Priced based on the adjusted CLTV[1] 80%/90% o Maximum LTC for second liens is 20% o Maximum adjusted CLTV 103%, priced based on the unadjusted CLTV[1] ----------------------------------------------------------------------------------------------------------------------
Notes o [1] The maximum adjusted CLTV is calculated using the original loan amount balance of the first plus the maximum negative amortization plus the amount of the second lien. Refer to the first mortgage note to determine the maximum potential amortization. o [2] When there is a standard and interest only option for the same product, unless called out separately the guidelines apply to both options. o CFC Sub-Prime and FHA/VA are eligible first liens for standalone transactions. The second lien must be full/at doc behind a subprime first lien. o Ineligible liens: All inclusive trust deed, first lien HELOCs, Cal Vet, land contracts, private party, reverse mortgages, recapture lien, REOs, Texas (a)(6), ARM/negative amortization loans without caps. [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Borrower Qualification for all First Liens (Both Piggyback & Standalone)
---------------------------------------------------------------------------------------------------------------------- First Lien Type ---------------------------------------------------------------------------------------------------------------------- Fixed Rate Fixed Period ARM 1-Year or 1-Month and/or Potential Negative (Including Interest (Including Interest 6-Month ARMs 6-Month Interest ARMs Only) Only) Only ---------------------------------------------------------------------------------------------------------------------- Note rate 3/1 or if fewer than Fully indexed rate or Note rate plus 2%. Greater of 4.25% or 36 months are note rate plus 2%, the fully indexed remaining in the whichever is higher. rate. fixed period: Note rate plus 2%. If more than 36 months are remaining in the fixed period: Note rate. Adjustable period: The fully indexed rate or note rate, whichever is higher. ----------------------------------------------------------------------------------------------------------------------
Notes o For interest Only First Mortgage Types : The Interest Only payment based on the qualifying rate should be used if there are 36 or more Interest Only payments remaining. All other times, use the fully amortized payment calculated using the qualifying rate (shown above), the outstanding principal balance, and the remaining term after the end of the Interest Only Period. Eligible Finance Types ---------------------- ------------------------------------------------------------------------------- Finance Types Owner-Occupied Second Home Investment ------------------------------------------------------------------------------- Purchase, Rate and Term Allowed Allowed Allowed ------------------------------------------------------------------------------- Cash-Out Allowed Allowed Allowed ------------------------------------------------------------------------------- [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Rate/Payment Information ------------------------
---------------------------------------------------------------------------------------------------------------------- HELOCs Fixed-Rate Seconds ---------------------------------------------------------------------------------------------------------------------- Introductory/Start Rate A lower introductory rate may be Note rate available ---------------------------------------------------------------------------------------------------------------------- Note Rate Qualification Fully indexed rate Note rate ---------------------------------------------------------------------------------------------------------------------- Index Prime rate Not Applicable ---------------------------------------------------------------------------------------------------------------------- Interest Rate Cap Program rate maximum: 18% Note rate Note the following: Note the following: o NC and NY (NOO): 16% o TN state legal maximum: 24% (this o NC state law maximum: The greater rule applies for terms of 16% or 6-month T-bill + 6% <=180 months) o FL: 17% o TX: 10% APR o TN: lower of 18% or prime + 4% o NC (NOO): Loans <25,000 - 16% (prime + 4% is a cap that floats o NC state law maximum: The greater of with prime for the life of the loan) 16% or 6-month T-bill + 6% o NY (NOO): 16% ---------------------------------------------------------------------------------------------------------------------- Payment Rate Adjustment o First day of the calendar month, o There is no rate adjustment. effective the first day of the o Payment is due on the first of each billing cycle (beginning after the month, with a minimum of 30 days "discounted" rate has expired, if from loan closing. applicable). o Payment is due on the 15th of each month. ---------------------------------------------------------------------------------------------------------------------- Conversion Option Not Allowed Not Allowed ----------------------------------------------------------------------------------------------------------------------
Product Fees ------------ The following identifies the pertinent servicing fees that may be assessed under this program. o HELOCs: An account termination or annual maintenance fee may apply. o Fixed rate seconds: A prepayment penalty may apply. [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Property Valuation Requirements -------------------------------
---------------------------------------------------------------------------------------------------------------------- Copy of Full AVM Desk Review 2055E Full Appraisal Appraisal (ValueGrid) (Exterior Appraisal) ---------------------------------------------------------------------------------------------------------------------- Maximum Line Amounts <=$100,000 o <=$250,000 o <=$250,000 o <=$250,000 <=$2 million (700+) (700+) (700+) o <=$100,000 o <=$100,000 o <=$100,000 (620-699) (660-699) (620-699) ---------------------------------------------------------------------------------------------------------------------- Maximum Property <=$750,000 o <=$700,000 o <=$700,000 o <=$700,000 None Values (100% CLTV) (100% CLTV) (100% CLTV) o <=$1m (90% CLTV o <=$1m (100% o <=$1m (90% CLTV & 700+) CLTV & 700+) & 700+) ---------------------------------------------------------------------------------------------------------------------- Minimum Property None $100,000 None None None Values ---------------------------------------------------------------------------------------------------------------------- Restrictions o 660+: Less o 2-4 units: o Allowed only 2-4 units: Not o Owner-occupied than 1 year Not Allowed when AVM not Allowed only on loan Old. o West Virginia, available amounts o 620+: Less Kansas, Clark o 2-4 units: >$500,000 than 6 months County, NV: Not Allowed old or 12 Not Allowed o West o Field review months old Virginia, may be with recert. Kansas, Clark required for County, NV: <660 FICO Not Allowed ----------------------------------------------------------------------------------------------------------------------
Determining Value ----------------- o Purchase transactions -or- properties owned <12 months: the CLTV should be based on the lesser of the purchase price or the current property valuation. o Properties owned >12 months: The CLTV should be based on the current property valuation. Note Properties eligible for 6 months to less than 12 months seasoning requirements cannot exceed 7% annualized appreciation. Title Requirements ------------------
---------------------------------------------------------------------------------------------------------------------- Requirement Legal & Vesting Insured Legal & Title Search Full ALTA Policy Vesting ---------------------------------------------------------------------------------------------------------------------- Max Line Amounts $50,000 <=$250,000 <=$250,000 None ---------------------------------------------------------------------------------------------------------------------- Min FICO 700 620 None None ---------------------------------------------------------------------------------------------------------------------- Geographic Restrictions o Florida o Delaware o Florida None o Texas o Texas o Oregon (L/A > o Vermont $50,000) o Texas ----------------------------------------------------------------------------------------------------------------------
Notes Legal and vesting requires underwriting of credit report to ensure no second liens exist, and an executed borrower's agreement affirming no other liens exists. Credit ------ Usable Credit Scores All borrowers must meet the credit score requirements as shown in the CLTV tables. For a credit score to be considered usable: [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" o The borrower must have a minimum of a 24 month credit history. o A minimum of four tradelines must be established. Acceptable Credit History The overall credit history is reviewed in addition to the specific requirements outlined below.
---------------------------------------------------------------------------------------------------------------------- Credit Score Gold Preferred Flex Credit Score >=700 Credit Score >= 660 Credit Score >= 620 ---------------------------------------------------------------------------------------------------------------------- Tradelines Minimum of 4 Minimum of 4 Minimum of 4 ---------------------------------------------------------------------------------------------------------------------- Mortgage Lates (30 day) 0 x 24 months 0 x 12 months 1 x 12 months ---------------------------------------------------------------------------------------------------------------------- Consumer Lates (30 day) 0 x 12 months [1] 3 x 12 months ---------------------------------------------------------------------------------------------------------------------- CCCS Greater than 2 years and re-established credit. Active participants not allowed. ---------------------------------------------------------------------------------------------------------------------- Bankruptcy or Foreclosure Discharged or dismissed at Discharged or dismissed at least 5 years and least 7 years and re-established credit re-established credit ---------------------------------------------------------------------------------------------------------------------- Tax liens, Judgments, With prior approval only when over $200. Collections, Charge-Offs All must be paid at closing. (open or paid within the last 12 months) ----------------------------------------------------------------------------------------------------------------------
Note [1] There is no limit to consumer credit delinquencies if the credit score meets the requirement for the program (Gold and Preferred programs only). Cash Reserves -------------
---------------------------------------------------------------------------------------------------------------------- Documentation Type Reserve Requirement [1] ---------------------------------------------------------------------------------------------------------------------- Full/alt/streamlined None ---------------------------------------------------------------------------------------------------------------------- Reduced [2] o Owner-occupied: 3 months P&I o Other: 6 months P&I ----------------------------------------------------------------------------------------------------------------------
[graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Notes o [1] PITI of total housing including the first and second liens. Reserves can be verified by two months bank statements or VOD. o Reserves may not be required with a CLUES Accept. o When multiple loans are concurrently closed for the same borrower(s), each loan must individually meet the reserve requirements. Ratios ------ Maximum 50%. DTI ratios may be up to 55% with a CLUES Accept. Eligible/Ineligible Borrowers ----------------------------- o U.S. citizen: Valid social security number required. o Permanent resident alien and inter vivos revocable trust: Allowed o Non-permanent resident alien: Allowed on owner-occupied or second homes only o Foreign national: Not allowed o Non-occupant co-borrower: See requirements following Note Additional eligibility and documentation requirements may apply. Non-Occupant Co-Borrower If income from non-occupant co-borrowers is to be used to qualify without respect to the owner-occupant's debt ratio, then the second lien must be underwritten and committed to second home guidelines (regardless of guidelines used for the first lien). The following criteria applies: o Occupant and non-occupant are immediate family members (parent, child, or sibling). o Purchase, rate and term refinance only (loan purpose on first lien). o 90 percent maximum CLTV o No cash-out available at funding of second lien. For reduced doc, non-occupant co-borrowers are only allowed if the subject property is the borrower's owner-occupied principal residence. Eligible/Ineligible Properties ------------------------------ -------------------------------------------------------------------------------- Eligible Properties Ineligible Properties -------------------------------------------------------------------------------- o Detached SFRs [1] o Commercial/mixed use properties o Attached SFRs o Condotels o Attached PUDs o Cooperatives (co-ops) o Detached PUDs [1] o Manufactured homes o Condos (low/high-rise) o 2-4 units o Non-warrantable Condos [2] -------------------------------------------------------------------------------- Note [1] Detached SFRs/PUDs include modular, panelized and prefabricated homes. [2] Non-warrantable condos: Full, alt or reduced doc only. Geographic Restrictions ----------------------- o Arkansas: HELOCs and fixed rate seconds not allowed o Maine, South Carolina: Fixed rate second balloon loans not allowed o New Jersey, Texas: IO fixed rate second (closed-end) loans not allowed o Indiana, Texas: IO fixed rate second balloon loans not allowed [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Documentation Requirements -------------------------- Income Documentation Requirements ------------------------------------------------------------------------------ Doc Type Owner-Occupied Second Home Investment ------------------------------------------------------------------------------ Full Allowed Allowed Allowed ------------------------------------------------------------------------------ Alternate Allowed Allowed Allowed ------------------------------------------------------------------------------ Streamline Allowed Allowed Allowed ------------------------------------------------------------------------------ Reduced Allowed Allowed Allowed ------------------------------------------------------------------------------ Notes o Certain restrictions may apply. Refer to Maximum Loan/Line Amount table above for further information. o For details on Super Streamline requirements, see LPG 24.25: Super Streamline Second. Documentation Type
---------------------------------------------------------------------------------------------------------------- Full/Alt Streamlined Reduced "SIVA" ---------------------------------------------------------------------------------------------------------------- Income/Employment (Salaried) o 1 month paystub o 1 month recent paystub o Income stated o 2 years W2 or VOE o Verbal VOE o 2 years verbal VOE o VOE or verbal VOE ---------------------------------------------------------------------------------------------------------------- Income/Employment (Self o 2 years personal and o Recent Year Tax Return o Income stated Employed) business tax returns o 2 years verification of o 2 years verification of o YTD P&L within 5 months self-employment business o FNMA SE analysis o Verbal VOE ---------------------------------------------------------------------------------------------------------------- Assets 2 months bank statements 2 months bank statements 2 months bank statements or or VOD (only if assets or VOD (only if assets VOD are needed to qualify) are needed to qualify) ---------------------------------------------------------------------------------------------------------------- Reserves Not required Nor required o Owner-occupied: 3 months P&I o Other: 6 months P&I ---------------------------------------------------------------------------------------------------------------- Form 4506 o Salaried: Not required o Salaried: Not required Not required o Self-employed: Required o Self-employed: Required ----------------------------------------------------------------------------------------------------------------
Assumability ------------ Not allowed. Temporary Buydowns ------------------ Not permitted. [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Spot Relocation --------------- Allowed with the following restrictions: o Owner-occupied o Full/alt doc Project Warranty ----------------
---------------------------------------------------------------------------------------------------------------------- Eligible Programs Gold Preferred Flex Credit Score >= 700 Credit Score >= 660 Credit Score >= 620 ---------------------------------------------------------------------------------------------------------------------- CFC first lien (age <= 12 Condo/PUD documentation waived Standard Fannie Mae or months) Freddie Mac ---------------------------------------------------------------------------------------------------------------------- CFC first lien (age > 12 Standard Fannie Mae or Freddie Mac. months) or; Non-CFC first lien or; Documentation that exceeds the age limitation noted below ---------------------------------------------------------------------------------------------------------------------- Age of documents 12 months ----------------------------------------------------------------------------------------------------------------------
Associated Loan Program IDs and Available Loan Terms ---------------------------------------------------- LPIDs
---------------------------------------------------------------------------------------------------------------- Concurrent Transactions Standalone Transactions ---------------------------------------------------------------------------------------------------------------- Loan Program LPID Term Loan Program LPID Term Description Description ---------------------------------------------------------------------------------------------------------------- Fxd2nd Equity 10 361 10 years Fxd2nd Equity 361 10 years Year 10 Year ---------------------------------------------------------------------------------------------------------------- Fxd2nd Equity 15 382 15 years Fxd2nd Equity 382 15 years Year 15 Year ---------------------------------------------------------------------------------------------------------------- Fxd2nd Equity 30/15 383 30 years Fxd2nd Equity 383 30 years 30/15 ---------------------------------------------------------------------------------------------------------------- Home Equity Line 373 25 years NonConf HELOC 809 25 years of Credit 10yr Draw/15yr Repay Standalone ---------------------------------------------------------------------------------------------------------------- NonConf Fixed 2nd 1008 10 years NonConf Fixed 1008 10 years Mtg 10 Balloon 2nd Mtg 10 Interest Only Balloon Interest Only ---------------------------------------------------------------------------------------------------------------- NonConf Fixed 2nd 1009 15 years NonConf Fixed 1009 15 years Mtg 15 Balloon 2nd Mtg 15 Interest Only Balloon Interest Only ---------------------------------------------------------------------------------------------------------------- NonConf Fixed 2nd 1010 25 years NonConf Fixed 1010 25 years Mtg 10/15 Interest 2nd Mtg 10/15 Only Interest Only ----------------------------------------------------------------------------------------------------------------
Term Descriptions -----------------
---------------------------------------------------------------------------------------------------------------- HELOCs Fixed Rate Seconds Interest Only Fixed Rate Seconds ---------------------------------------------------------------------------------------------------------------- Term 25 years o 30/15 o 10 year Interest Only o 15/15 balloon o 10/10 o 15 year Interest Only balloon o 10/15 Interest Only fixed rate second ---------------------------------------------------------------------------------------------------------------- Interest Only Draw Period 10 year draw N/A N/A period (5 year initial draw
[graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines"
with a 5 year renewal option), Interest Only payment ---------------------------------------------------------------------------------------------------------------- Repayment Period 15 year repay Loans are amortized and fully o Balloon do not amortize. (each payment funded at closing. o 10/15 Interest Only fixed includes 1/180th o 30/15: 30 year amortized, rate seconds are Interest of the due in 15 years Only for 10 years with a outstanding o 15/15: 15 year amortized, 15-year fully amortized principal at the due in 15 years repay period. end of the draw o 10/10: 10 year amortized, period plus due in 10 years interest) Note: Tennessee limits the repayment period to 10 years. ----------------------------------------------------------------------------------------------------------------
Countrywide Home Loans Seller Loan Program Guidelines Confidential - Unauthorized Distribution Prohibited Edit History: Editor Edit Date & Time [LOGO] Countrywide Final Guideline Update Last Revision Date: 11/24/2005 ASSOCIATED BULLETIN(S) ------------------------------------------------------------------------------- Product Change Number ------------------------------------------------------------------------------- Bulletin Number ------------------------------------------------------------------------------- Link to Bulletin ------------------------------------------------------------------------------- SECTION 24: Home Equity Products 24.25: Enhanced Super Streamline Second ------------------------------------------------------------------------------- Overview This section of the Loan Program Guide includes the guidelines for the Countrywide Super Streamline (lender selected stated income stated assets) Home Equity Line of Credit (HELOC) and fixed rate second product. Special Requirements -------------------- Countrywide's Loan Underwriting Expert System (CLUES) usage is required. Please note that CLUES may accept loans that exceed credit, ratio and reserve guidelines when strong compensating factors are present. When it does, an explanation of the Accept decision is provided in the CLUES output Concurrent loans not receiving a CLUES Accept that may be manually underwritten must meet all published loan program guidelines. An underwriter may approve a loan receiving a CLUES Refer decision if they provide supporting documentation that addresses each Refer reason. A CLUES Accept is required for standalone transactions. Program Limitations -------------------
---------------------------------------------------------------------------------------------------------------------- Documentation Requirements ---------------------------------------------------------------------------------------------------------------------- Application URLA form 1003 ---------------------------------------------------------------------------------------------------------------------- Credit Report A tri-merged credit report with risk score is required on all loans. ---------------------------------------------------------------------------------------------------------------------- Minimum Credit Score 660 ---------------------------------------------------------------------------------------------------------------------- Employment [1] Salaried Borrowers o No income documentation is required. o Income and the employer's same and phone number must be stated on 1003. Self-Employed Borrowers.
[graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines"
o No income documentation is required. o Income and the business name and phone number must be stated on 1003. ---------------------------------------------------------------------------------------------------------------------- Assets No assets/reserves verification is required. Assets should be stated on 1003. ---------------------------------------------------------------------------------------------------------------------- Copy of First Mortgage Note or Statement o Required to determine if the first mortgage is a potential negative amortization loan. o If first lien is a negative amortizing loan, qualification must be based on 115% maximum negative amortization. ---------------------------------------------------------------------------------------------------------------------- Condo Project Approval Not required. ---------------------------------------------------------------------------------------------------------------------- HOA Certification o Not required. o Projects with pending litigation are not allowed o Borrower delinquent on HOA dues not allowed. ---------------------------------------------------------------------------------------------------------------------- Borrower The "Borrower Agreement" is required for all loans affirming the Agreement/Certification following: o First mortgage loan does not have potential to negatively amortize. o Condo projects are not pending litigation. o Borrower is not delinquent on HOA dues. o No other liens currently exists. ----------------------------------------------------------------------------------------------------------------------
Note [1] General employment requirements: o Signed 4506-T required for all borrowers. o Income must be deemed reasonable for the profession. o No employment verification is required. Eligible Occupancy Types ------------------------ ------------------------------------------------------------------- Occupancy Type HELOC Fixed Rate Second ------------------------------------------------------------------- Owner Occupied/Primary Allowed Allowed Residence ------------------------------------------------------------------- Second Home Allowed Allowed ------------------------------------------------------------------- Investment [1] Allowed Allowed ------------------------------------------------------------------- Note [1] Piggyback transactions only. Maximum CLTV ------------ Owner-Occupied/Second Homes ------------------------------------------------------------------------------- SuperStreamline Documentation ------------------------------------------------------------------------------- Property Type Gold Preferred Credit Score >= 700 Credit Score >= 660 ------------------------------------------------------------------------------- o Attached/Detached SFRs 100% 100% o Attached/Detached PUDs o Condos (Low/High-Rise) o 2 Units [1] ------------------------------------------------------------------------------- 3-4 Units Not Allowed ------------------------------------------------------------------------------- [1] Not allowed for second homes. Investment -------------------------------------------------------------------------------- SuperStreamline Documentation -------------------------------------------------------------------------------- Property Type Gold Preferred Credit Score >= 700 Credit Score >= 660 -------------------------------------------------------------------------------- o Attached/Detached SFRs 80% 80% [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" o Attached/Detached PUDs o Condos (Low/High-Rise) o 2 Units -------------------------------------------------------------------------------- 3-4 Units Not Allowed -------------------------------------------------------------------------------- Minimum Loan/Initial Draw Amount --------------------------------
---------------------------------------------------------------------------------------------------------------------- HELOCs [2] Fixed Rate Seconds [2] ---------------------------------------------------------------------------------------------------------------------- Stand Alone Concurrent Stand Alone Concurrent ---------------------------------------------------------------------------------------------------------------------- Cost No Cost [1] Cost No Cost [1] ---------------------------------------------------------------------------------------------------------------------- Minimum Loan Amount o $7,500 or state $7,500 or state o $7,500 or state $7,500 requirement (with add-on) requirement requirement (with o $15,000 or state add-on) requirement (without o $15,000 or state add-on) requirement (without add-on) ---------------------------------------------------------------------------------------------------------------------- Draw Requirement None $7,500 None required Not applicable as the entire loan required ($30,000 if amount is disbursed at funding line >$100,000) ---------------------------------------------------------------------------------------------------------------------- Small Loan Amount Loan amounts between None Loan amounts None Pricing Add-ons $7,500 and $14,999 are between $7,500 and allowed, subject to $14,999 are pricing add-ons. allowed, subject to pricing add-ons ----------------------------------------------------------------------------------------------------------------------
Restrictions o [1] For no closing cost HELOCs, the minimum initial draw must remain outstanding for 180 days. If the borrower makes a principal reduction below the minimum draw requirement, the borrower will be charged the third party costs incurred at closing for which CFC originally paid. o [2] Loan and draw amounts are further limited by state restrictions as follows: |_| ________Arizona: Loan/line amount must be > $10,100. |_| ________Connecticut: Cost: Initial draw for a HELOC is $5,100. |_| ________Kentucky: Loan/line amount and initial draw must be $15,100. Maximum Loan/Line Amount ------------------------ $500,000. Eligible/Ineligible Senior Liens -------------------------------- The purpose of this section is to assist structuring potential concurrent transactions. THE STRICTER OF FIRST AND SECOND MORTGAGE GUIDELINES PREVAIL. ALWAYS REFER TO THE CONVENTIONAL LENDING PROGRAMS AND TECHNICAL UNDERWRITING MANUALS FOR ADDITIONAL REQUIREMENTS. When a loan is not eligible for concurrent closing, but is allowed on a standalone basis, the application must be dated at least one day after the funding of the first mortgage.
-------------------------------------------------------------------------------------- First Lien Piggyback Standalone -------------------------------------------------------------------------------------- Adjustable Rate Mortgage Loans [2] Yes Yes -------------------------------------------------------------------------------------- Balloon Loans Yes Yes -------------------------------------------------------------------------------------- Fixed Period ARMs [2] Yes Yes -------------------------------------------------------------------------------------- Fixed Rate [2] Yes Yes -------------------------------------------------------------------------------------- Potential Negative Amortization Loans Yes Yes o Allowed behind CFC Maximum adjusted CLTV 100%, priced PayOption based on the adjusted CLTV [1] o Maximum LTV/(unadjusted) CLTV: 80%/90% o Maximum LTV for second liens is [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" 20% o Maximum adjusted CLTV 103%, priced based on the unadjusted CLTV [1] ------------------------------------------------------------------------------------------------------------
Notes o [1] The maximum adjusted CLTV is calculated using the loan amount current principal balance of the first PLUS the maximum negative amortization PLUS the amount of the second lien. Refer to the first mortgage note to determine the maximum potential amortization. o [2] When there is a standard and interest only option for the same product, unless called out separately the guidelines apply to both options. o Ineligible liens: All inclusive Trust Deed, first lien HELOCs, Cal Vet, land contracts, private party, reverse mortgages, recapture lien, REOs, Texas (a)(6), ARM/negative amortization loans without caps. o Ineligible liens: All inclusive Trust Deed, first lien HELOCs, Cal Vet, land contracts, private party, reverse mortgages, recapture lien, REOs, Texas (a)(6), ARM/negative amortization loans without caps, all FHA/VA liens, loans with future advances, OTC construction, and any loans with the following documentation types: Reduced, Stated Income/Stated Assets (SISA), No Ratio, No Income/No Assets (NINA). Borrower Qualification for First Lien Transactions (Both Piggyback/Concurrent and Standalone)
---------------------------------------------------------------------------------------------------------------------- First Lien Type ---------------------------------------------------------------------------------------------------------------------- Fixed Rate Fixed Period ARM 1-Year or 6-Month 1-Year or 6-Month Potential Negative Interest Only Interest Only ARMs Interest Only ARMs ---------------------------------------------------------------------------------------------------------------------- Note rate 3/1 or if fewer than Fully indexed rate or Note rate plus 2%. Greater of 4.25% or 36 months are note rate plus 2%, the fully indexed remaining in the whichever is higher. rate. fixed period: Note rate plus 2%. If more than 36 months are remaining in the fixed period: Note rate. Adjustable period: The fully indexed rate or note rate, whichever is higher. ----------------------------------------------------------------------------------------------------------------------
Notes o For Interest Only First Mortgage Types: The Interest Only payment based on the qualifying rate should be used if there are 36 or more Interest Only payments remaining. All other times, use the fully amortized payment calculated using the qualifying rate (shown above), the outstand rig principal balance, and the remaining term after the end of the Interest Only period. Eligible Finance Types ---------------------- -------------------------------------------------------------------------------- Finance Types Owner-Occupied Second Home Investment [1] -------------------------------------------------------------------------------- Purchase, Rate and Term Allowed Allowed Allowed -------------------------------------------------------------------------------- Cash-Out Allowed Allowed Allowed -------------------------------------------------------------------------------- Note [1] Concurrent transactions only Rate/Payment Information ------------------------
----------------------------------------------------------------------------------------------------------------------------- HELOCs Fixed Rate Seconds ----------------------------------------------------------------------------------------------------------------------------- [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Introductory/Start Rate A lower introductory rate may be available Note rate ----------------------------------------------------------------------------------------------------------------------------- Note Rate Qualification Fully indexed rate Note rate ----------------------------------------------------------------------------------------------------------------------------- Index Prime rate Not applicable ----------------------------------------------------------------------------------------------------------------------------- Interest Rate Cap Program rate maximum: 18% Note rate Note the following: Note the following: o NC and NY (NOO): 16% o TN state legal maximum: o NC state law maximum: The greater of 16% 24% (this rule applies for or 6-month T-bill + 6% terms <=180 months) o FL: 17% o TX: 10% APR o TN: lower of 18% or prime + 4% (prime + 4% is o NC (NOO): Loans <=$25,000 - 16% a cap that floats with prime for the life o NC state law maximum: The of the loan) greater of 16% or 6-month T-bill + 6% o NY (NOO): 16% ----------------------------------------------------------------------------------------------------------------------------- Payment Rate Adjustment o First day of the calendar month, effective the first o There is no rate adjustment. day of the billing cycle (beginning after the o Payment is due on the first "discounted" rate has expired, if applicable). of each month, with a o Payment is due on the 15th of each month. minimum of 30 days from loan closing. ----------------------------------------------------------------------------------------------------------------------------- Conversion Option Not Allowed Not Allowed -----------------------------------------------------------------------------------------------------------------------------
Product Fees ------------ The following identifies the pertinent servicing fees that may be assessed under this program. o HELOCs: An account termination or annual maintenance fee may apply. o Fixed rate seconds: A prepayment penalty may apply. Property Valuation Requirements -------------------------------
---------------------------------------------------------------------------------------------------------------------- Requirement Copy of Full AVM Desk Review 2055E Full Appraisal Appraisal (ValueGrid) (Exterior Appraisal) ---------------------------------------------------------------------------------------------------------------------- Maximum Line Amounts <=$100,000 <=$100,000 o <=$250,000 o <=$250,000 <=$250,000 (700+) (700+) o <=$100,000 o <=$100,000 (660-699) (660-699) ---------------------------------------------------------------------------------------------------------------------- Maximum <=$750,000 o <=$700,000 o <=$700,000 o <=$700,000 None Property Values (100% CLTV) (100% CLTV) (100% CLTV) o <=$1m (90% CLTV o <=$1m (100% o <=$1m (90% CLTV & & 700+) CLTV & 700+) 700+) ---------------------------------------------------------------------------------------------------------------------- Minimum Property None $100,000 None None None Values ---------------------------------------------------------------------------------------------------------------------- Restrictions Less than 1 year o 2-4 units: Not o Allowed only o 2-4 units: Not None old Allowed when AVM not Allowed o West Virginia, available Kansas, Clark o 2-4 units: Not County, NV: Not Allowed Allowed o West Virginia, Kansas, Clark county, NV: Not Allowed ----------------------------------------------------------------------------------------------------------------------
Determining Value ----------------- Purchase transactions [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" The CLTV should be based on the lesser of the purchase price or the current appraised value. Refinance Transactions o Properties owned less than 12 months: The CLTV should be based on the lesser of the purchase price or the current appraised value. o Properties owned greater than or equal to 12 months: The CLTV should be based on the current property valuation. Title Requirements ------------------
---------------------------------------------------------------------------------------------------------------------- Requirement Legal & Vesting Insured Legal & Title Search Full ALTA Policy Vesting ---------------------------------------------------------------------------------------------------------------------- Maximum Line Amounts Not Allowed <=$250,000 <=$250,000 None ---------------------------------------------------------------------------------------------------------------------- Geographic Restrictions Not Allowed o Delaware o Florida None o Texas o Oregon (L/A > $50,000) o Texas ----------------------------------------------------------------------------------------------------------------------
Note Legal and vesting requires underwriting of credit report to ensure no second liens exist, and an executed borrower's agreement affirming no other liens exists. Cash Reserves ------------- Not required unless needed to qualify. Ratios ------ Maximum: 50%. DTI ratios may be up to 55% with a CLUES Accept. Eligible/Ineligible Borrowers ----------------------------- o U.S. citizen: Valid social security number required o Permanent resident alien: Allowed o Non-permanent resident alien: Allowed on owner-occupied or second homes only o Foreign national and inter vivos revocable trust : Not allowed o Non-occupant co-borrower: See requirements following Note Additional eligibility and documentation requirements may apply. Non-Occupant Co-Borrower If income from non-occupant co-borrowers is to be used to qualify without respect to the owner-occupant's debt ratio, then the second lien must be underwritten and committed to second home guidelines (regardless of guidelines used for the first lien). The following criteria applies: o Occupant and non-occupant are immediate family members (parent, child, or sibling). o Purchase, rate and term refinance only (loan purpose on first lien). o 90 percent maximum CLTV o No cash-out available at funding of second lien. For reduced doc, non-occupant co-borrowers are only allowed if the subject property is the borrower's owner-occupied principal residence. [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Eligible/Ineligible Properties ------------------------------ ----------------------------------------------------------------------- Eligible Properties Ineligible Properties ----------------------------------------------------------------------- o Detached SFRs [1] o 3-4 Units o Attached SFRs o Rural properties o Attached PUDs o Commercial/mixed use properties o Detached PUDs [1] o Condotels o Condos (low/high rise) o Cooperatives o 2 units o Manufactured homes o Non-warrantable condos ----------------------------------------------------------------------- Note [1] Detached SFRs/PUDs include modular, panelized and prefabricated homes. Geographic Restrictions ----------------------- o Arkansas: HELOCs and fixed sate seconds not allowed o Maine, South Carolina: Fixed rate second balloon loans not allowed Assumability ------------ Not allowed. Temporary Buydowns ------------------ Not allowed. Spot Relocation --------------- Not allowed. Associated Loan Program IDs and Available Loan Terms ---------------------------------------------------- LPIDs -----
---------------------------------------------------------------------------------------------------------------------- Concurrent Transactions Standalone Transactions ------------------------------------------------------------ --------------------------------------------------------- Loan Program LPID Term Loan Program LPID Term Description Description --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Fxd2nd Equity 10 361 10 years Fxd2nd Equity 10 361 10 years Year Year --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Fxd2nd Equity 15 382 15 years Fxd2nd Equity 15 382 15 years Year Year --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Fxd2nd Equity 30/15 383 30 years Fxd2nd Equity 383 30 years 30/15 --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Home Equity Line of 373 25 years NonConf HELOC 809 25 years Credit 10yr Draw/15yr Repay Standalone ----------------------------------------------------------------------------------------------------------------------
Term Description ----------------
---------------------------------------------------------------------------------------------------------------------- HELOCs Fixed Equity Seconds ---------------------------------------------------------------------------------------------------------------------- Term 25 years o 30/15 o 15/15 o 10/10 ---------------------------------------------------------------------------------------------------------------------- Interest Only Draw Period 10 year draw period (5 year Not applicable initial draw with a 5 year renewal option), interest only payment ---------------------------------------------------------------------------------------------------------------------- [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" [graphic omitted] OLD REPUBLIC Insurance Company DEC 01 2006 "Sanctioned Guidelines" Amortization Period 15 year amortized repay Loans are amortized and fully funded at closing. Note that Tennessee limits o 30 year amortized, due in 15 years the repayment period to 10 o 15 year amortized, due in 15 years years. o 10 year amortized, due in 10 years ----------------------------------------------------------------------------------------------------------------------
Countrywide Home Loans Seller Loan Program Guidelines Confidential - Unauthorized Distribution Prohibited Edit History: Editor Edit Date & Time ENDORSEMENT This endorsement, effective December 1, 2006, forms a part of Policy No. V21 issued to The Bank of New York, as Trustee for the benefit of the holders of Home Equity Loan Asset Back Certificates, Series 2006-S9 and MBIA Insurance Corporation by OLD REPUBLIC INSURANCE COMPANY, Greensburg, Pennsylvania It is hereby understood and agreed that coincident with the effective date of the Policy, Page 1, Paragraph 5, Sentence 3 is deleted in its entirety and replaced with: "The Company's maximum liability under this Policy shall in no event exceed $49,674,241 during each such 12 month period." Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, agreements or limitations of the Policy or any Endorsement attached thereto, except as herein set forth. This endorsement shall not be valid until countersigned by a duly authorized representative of the Company. Attest: /s/ J.A. Kellogg /s/ Spencer LeRoy III President Secretary Countersigned at Chicago, Illinois this 27th day of December, 2006 /s/ L. Milzzo Authorized Representative ----------------------------------------