FHASI
        2006-AR4

       

    

    
      MORTGAGE
        LOAN PURCHASE AGREEMENT

       

      THIS
        MORTGAGE LOAN PURCHASE AGREEMENT dated as of December 28, 2006 by and between
        FIRST HORIZON HOME LOAN CORPORATION, a Kansas corporation (the “Seller”), and
        FIRST HORIZON ASSET SECURITIES INC. (the “Purchaser”). 

       

      WHEREAS,
        the Seller owns certain Mortgage Loans (as hereinafter defined) which Mortgage
        Loans are more particularly listed and described in Schedule
        A
        attached
        hereto and made a part hereof.

       

      WHEREAS,
        the Seller and the Purchaser wish to set forth the terms pursuant to which
        the
        Mortgage Loans, excluding the servicing rights thereto, are to be sold by
        the
        Seller to the Purchaser.

       

      WHEREAS,
        the Seller will simultaneously transfer the servicing rights for the Mortgage
        Loans to First Tennessee Mortgage Services, Inc. (“FTMSI”) pursuant to the
        Servicing Rights Transfer and Subservicing Agreement (as hereinafter
        defined).

       

      WHEREAS,
        the Purchaser will engage FTMSI to service the Mortgage Loans pursuant to
        the
        Servicing Agreement (as hereinafter defined).

       

      NOW,
        THEREFORE, in consideration of the foregoing, other good and valuable
        consideration, and the mutual terms and covenants contained herein, the parties
        hereto agree as follows:

       

      ARTICLE
        I

      Definitions

       

      Agreement:
        This
        Mortgage Loan Purchase Agreement, as the same may be amended, supplemented
        or
        otherwise modified from time to time in accordance with the terms
        hereof.

       

      Alternative
        Title Product:
        Any one
        of the following: (i) Lien Protection Insurance issued by Integrated Loan
        Services or ATM Corporation of America, (ii) a Mortgage Lien Report issued
        by
        EPN Solutions/ACRAnet, (iii) a Property Plus Report issued by Rapid Refinance
        Service through SharperLending.com, or (iv) such other alternative title
        insurance product that the Seller utilizes in connection with its then current
        underwriting criteria.

      


      Business
        Day:
        Any day
        other than (i) a Saturday or a Sunday, or (ii) a day on which banking
        institutions in the City of Dallas, the State of Texas or New York City is
        located are authorized or obligated by law or executive order to be
        closed.

       

      Closing
        Date:
        December 28, 2006

       

      Code:
        The
        Internal Revenue Code of 1986, including any successor or amendatory
        provisions.

       

      Cooperative
        Corporation:
        The
        entity that holds title (fee or an acceptable leasehold estate) to the real
        property and improvements constituting the Cooperative Property and which
        governs the Cooperative Property, which Cooperative Corporation must qualify
        as
        a Cooperative Housing Corporation under Section 216 of the Code.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Coop
        Shares:
        Shares
        issued by a Cooperative Corporation.

       

      Cooperative
        Loan:
        Any
        Mortgage Loan secured by Coop Shares and a Proprietary Lease.

       

      Cooperative
        Property:
        The
        real property and improvements owned by the Cooperative Corporation, including
        the allocation of individual dwelling units to the holders of the Coop Shares
        of
        the Cooperative Corporation.

       

      Cooperative
        Unit:
        A
        single family dwelling located in a Cooperative Property.

       

      Custodian:
        First
        Tennessee Bank National Association, and its successors and assigns, as
        custodian under the Custodial Agreement dated as of December 28, 2006 by
        and
        among The Bank of New York, as trustee, First Horizon Home Loan Corporation,
        as
        master servicer, and the Custodian.

       

      Cut-Off
        Date:
        December 1, 2006.

       

      Cut-off
        Date Principal Balance:
        As to
        any Mortgage Loan, the Stated Principal Balance thereof as of the close of
        business on the Cut-off Date.

       

      Debt
        Service Reduction:
        With
        respect to any Mortgage Loan, a reduction by a court of competent jurisdiction
        in a proceeding under the Bankruptcy Code in the Scheduled Payment for such
        Mortgage Loan which became final and non-appealable, except such a reduction
        resulting from a Deficient Valuation or any reduction that results in a
        permanent forgiveness of principal.

       

      Deficient
        Valuation:
        With
        respect to any Mortgage Loan, a valuation by a court of competent jurisdiction
        of the Mortgaged Property in an amount less than the then-outstanding
        indebtedness under the Mortgage Loan, or any reduction in the amount of
        principal to be paid in connection with any Scheduled Payment that results
        in a
        permanent forgiveness of principal, which valuation or reduction results
        from an
        order of such court which is final and non-appealable in a proceeding under
        the
        United States Bankruptcy Reform Act of 1978, as amended.

       

      Delay
        Delivery Mortgage Loans:
        The
        Mortgage Loans for which all or a portion of a related Mortgage File is not
        delivered to the Trustee or to the Custodian on its behalf on the Closing
        Date.
        The number of Delay Delivery Mortgage Loans shall not exceed 25% of the
        aggregate number of Mortgage Loans as of the Closing Date.

       

      Deleted
        Mortgage Loan:
        As
        defined in Section 4.1(c) hereof.

       

      Determination
        Date:
        The
        earlier of (i) the third Business Day after the 15th day of each month, and
        (ii)
        the second Business Day prior to the 25th
        day of
        each month, or if such 25th
        day is
        not a Business Day, the next succeeding Business Day.

       

      GAAP:
        Generally accepted accounting principles as in effect from time to time in
        the
        United States of America.

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      Insurance
        Proceeds:
        Proceeds paid by an insurer pursuant to any insurance policy, including all
        riders and endorsements thereto in effect, including any replacement policy
        or
        policies, in each case other than any amount included in such Insurance Proceeds
        in respect of expenses covered by such insurance policy.

       

      Liquidation
        Proceeds:
        Amounts, including Insurance Proceeds, received in connection with the partial
        or complete liquidation of defaulted Mortgage Loans, whether through trustee’s
        sale, foreclosure sale or otherwise or amounts received in connection with
        any
        condemnation or partial release of a Mortgaged Property.

       

      MERS:
        Mortgage Electronic Registration Systems, Inc., a corporation organized and
        existing under the laws of the State of Delaware, or any successor
        thereto.

       

      MERS
        Mortgage Loan:
        Any
        Mortgage Loan registered with MERS on the MERS System.

       

      MERS®
        System:
        The
        system of recording transfers of mortgages electronically maintained by
        MERS.

       

      MIN:
        The
        Mortgage Identification Number for any MERS Mortgage Loan.

       

      MOM
        Loan:
        Any
        Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee
        for the
        originator of such Mortgage Loan and its successors and assigns.

       

      Mortgage:
        The
        mortgage, deed of trust or other instrument creating a first lien on the
        property securing a Mortgage Note.

       

      Mortgage
        File:
        The
        mortgage documents listed in Section 3.1 pertaining to a particular Mortgage
        Loan and any additional documents required to be added to the Mortgage File
        pursuant to this Agreement.

       

      Mortgage
        Loans:
        The
        mortgage loans transferred, sold and conveyed by the Seller to the Purchaser,
        pursuant to this Agreement.

       

      Mortgage
        Loan Purchase Price:
        With
        respect to any Mortgage Loan required to be purchased by the Seller pursuant
        to
        Section 4.1(c) hereof, an amount equal to the sum of (i) 100% of the unpaid
        principal balance of the Mortgage Loan on the date of such purchase, and
        (ii)
        accrued interest thereon at the applicable Mortgage Rate from the date through
        which interest was last paid by the Mortgagor to the first day in the month
        in
        which the Mortgage Loan Purchase Price is to be distributed to the Purchaser
        or
        its designees.

       

      Mortgage
        Note:
        The
        original executed note or other evidence of indebtedness evidencing the
        indebtedness of a Mortgagor under a Mortgage Loan.

       

      Mortgage
        Rate:
        The
        annual rate of interest borne by a Mortgage Note from time to time, net of
        any
        insurance premium charged by the mortgagee to obtain or maintain any primary
        insurance policy.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

       

      Mortgaged
        Property:
        The
        underlying property securing a Mortgage Loan, which, with respect to a
        Cooperative Loan, is the related Coop Shares and Proprietary Lease.

       

      Mortgagor:
        The
        obligor(s) on a Mortgage Note.

       

      Principal
        Prepayment:
        Any
        payment of principal by a Mortgagor on a Mortgage Loan that is received in
        advance of its scheduled Due Date and is not accompanied by an amount
        representing scheduled interest due on any date or dates in any month or
        months
        subsequent to the month of prepayment.

       

      Proprietary
        Lease:
        With
        respect to any Cooperative Unit, a lease or occupancy agreement between a
        Cooperative Corporation and a holder of related Coop Shares.

       

      Purchase
        Price:
        $352,689,804.81

       

      Purchaser:
        First
        Horizon Asset Securities Inc., in its capacity as purchaser of the Mortgage
        Loans from the Seller pursuant to this Agreement.

       

      Recognition
        Agreement:
        With
        respect to any Cooperative Loan, an agreement between the Cooperative
        Corporation and the originator of such Mortgage Loan which establishes the
        rights of such originator in the Cooperative Property.

       

      Scheduled
        Payment:
        The
        scheduled monthly payment on a Mortgage Loan due on the first day of the
        month
        allocable to principal and/or interest on such Mortgage Loan which, unless
        otherwise specified herein, shall give effect to any related Debt Service
        Reduction and any Deficient Valuation that affects the amount of the monthly
        payment due on such Mortgage Loan.

       

      Security
        Agreement: The
        security agreement with respect to a Cooperative Loan.

       

      Seller:
        First
        Horizon Home Loan Corporation, a Kansas corporation, and its successors and
        assigns, in its capacity as seller of the Mortgage Loans.

       

      Servicing
        Agreement:
        The
        servicing agreement, dated as of November 26, 2002 by and between First
        Horizon Asset Securities Inc. and its assigns, as owner, and First Tennessee
        Mortgage Services, Inc., as servicer.

       

      Servicing
        Rights Transfer and Subservicing Agreement:
        The
        servicing rights transfer and subservicing agreement, dated as of November
        26,
        2002 by and between First Horizon Home Loan Corporation, as transferor and
        subservicer, and First Tennessee Mortgage Services, Inc., as transferee and
        servicer.

       

      Stated
        Principal Balance:
        As to
        any Mortgage Loan, the unpaid principal balance of such Mortgage Loan as
        specified in the amortization schedule at the time relating thereto (before
        any
        adjustment to such amortization schedule by reason of any moratorium or similar
        waiver or grace period) after giving effect to any previous partial Principal
        Prepayments and Liquidation Proceeds allocable to principal (other than with
        respect to any Liquidated Mortgage Loan) and to the payment of principal
        due on
        such date and irrespective of any delinquency in payment by the related
        Mortgagor.

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      Substitute
        Mortgage Loan:
        A
        Mortgage Loan substituted by the Seller for a Deleted Mortgage Loan which
        must,
        on the date of such substitution, (i) have a Stated Principal Balance, after
        deduction of the principal portion of the Scheduled Payment due in the month
        of
        substitution, not in excess of, and not more than 10% less than the Stated
        Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Rate
        not
        lower than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have a maximum
        mortgage rate not more than 1% per annum higher or lower than the maximum
        mortgage rate of the Deleted Mortgage Loan; (iv) have a minimum mortgage
        rate
        specified in its related Mortgage Note not more than 1% per annum higher
        or
        lower than the minimum mortgage rate of the Deleted Mortgage Loan; (v) have
        the
        same mortgage index, reset period and periodic rate as the Deleted Mortgage
        Loan
        and a gross margin not more than 1% per annum higher or lower than that of
        the
        Deleted Mortgage Loan (vi) be accruing interest at a rate no lower than and
        not
        more than 1% per annum higher than, that of the Deleted Mortgage Loan; (vii)
        have a loan-to-value ratio no higher than that of the Deleted Mortgage Loan;
        (viii) have a remaining term to maturity no greater than (and not more than
        one
        year less than that of) the Deleted Mortgage Loan; (ix) not be a Cooperative
        Loan unless the Deleted Mortgage Loan was a Cooperative Loan and (x) comply
        with
        each representation and warranty set forth in Schedule
        B
        hereto.

       

      Trustee:
        The
        Bank of New York and its successors and, if a successor trustee is appointed
        hereunder, such successor.

       

      ARTICLE
        II

      Purchase
        and Sale

       

      Section
        2.1 Purchase
        Price.
        In
        consideration for the payment to it of the Purchase Price on the Closing
        Date,
        pursuant to written instructions delivered by the Seller to the Purchaser
        on the
        Closing Date, the Seller does hereby transfer, sell and convey to the Purchaser
        on the Closing Date, but with effect from the Cut-off Date, (i) all right,
        title
        and interest of the Seller in the Mortgage Loans, excluding the servicing
        rights
        thereto, and all property securing such Mortgage Loans, including all interest
        and principal received or receivable by the Seller with respect to the Mortgage
        Loans on or after the Cut-off Date and all interest and principal payments
        on
        the Mortgage Loans received on or prior to the Cut-off Date in respect of
        installments of interest and principal due thereafter, but not including
        payments of principal and interest due and payable on the Mortgage Loans
        on or
        before the Cut-off Date, and (ii) all proceeds from the foregoing. Items
        (i) and
        (ii) in the preceding sentence are herein referred to collectively as “Mortgage
        Assets.”

       

      Section
        2.2 Timing.
        The
        sale of the Mortgage Assets hereunder shall take place on the Closing
        Date.

       

      ARTICLE
        III

      Conveyance
        and Delivery

       

      Section
        3.1 Delivery
        of Mortgage Files.
        In
        connection with the transfer and assignment set forth in Section 2.1 above,
        the
        Seller has delivered or caused to be delivered to the Trustee or to the
        Custodian on its behalf (or, in the case of the Delay Delivery Mortgage Loans,
        will deliver or cause to be delivered to the Trustee or to the Custodian
        on its
        behalf within thirty (30) days following the Closing Date) the following
        documents or instruments with respect to each Mortgage Loan so assigned
        (collectively, the “Mortgage Files”):

      
         

        
          	
                	(a)	
                  (1) the
                    original Mortgage Note endorsed by manual or facsimile signature
                    in blank
                    in the following form: “Pay to the order of ________________, without
                    recourse,” with all intervening endorsements showing a complete chain of
                    endorsement from the originator to the Person endorsing the Mortgage
                    Note
                    (each such endorsement being sufficient to transfer all right,
                    title and
                    interest of the party so endorsing, as noteholder or assignee
                    thereof, in
                    and to that Mortgage Note); or

                


        

         

      

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      (2) with
        respect to any Lost Mortgage Note, a lost note affidavit from the Seller
        stating
        that the original Mortgage Note was lost or destroyed, together with a copy
        of
        such Mortgage Note;

       

      
        	 	
                (b)

              	
                except
                  as provided below and for each Mortgage Loan that is not a MERS
                  Mortgage
                  Loan, the original recorded Mortgage or a copy of such Mortgage
                  certified
                  by the Seller as being a true and complete copy of the Mortgage,
                  and in
                  the case of each MERS Mortgage Loan, the original Mortgage, noting
                  the
                  presence of the MIN of the Mortgage Loans and either language indicating
                  that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
                  MOM Loan or
                  if the Mortgage Loan was not a MOM Loan at origination, the original
                  Mortgage and the assignment thereof to MERS, with evidence of recording
                  indicated thereon, or a copy of the Mortgage certified by the public
                  recording office in which such Mortgage has been
                  recorded;

              


      

       

      
        	 	
                (c)

              	
                a
                  duly executed assignment of the Mortgage in blank (which may be
                  included
                  in a blanket assignment or assignments), together with, except
                  as provided
                  below, all interim recorded assignments of such mortgage (each
                  such
                  assignment, when duly and validly completed, to be in recordable
                  form and
                  sufficient to effect the assignment of and transfer to the assignee
                  thereof, under the Mortgage to which the assignment relates); provided
                  that, if the related Mortgage has not been returned from the applicable
                  public recording office, such assignment of the Mortgage may exclude
                  the
                  information to be provided by the recording
                  office;

              


      

       

      
        	 	
                (d)

              	
                the
                  original or copies of each assumption, modification, written assurance
                  or
                  substitution agreement, if any;

              


      

       

      
        	 	
                (e)

              	
                either
                  the original or duplicate original title policy (including all
                  riders
                  thereto) with respect to the related Mortgaged Property, if available,
                  provided that the title policy (including all riders thereto) will
                  be
                  delivered as soon as it becomes available, and if the title policy
                  is not
                  available, and to the extent required pursuant to the second paragraph
                  below or otherwise in connection with the rating of the Certificates,
                  a
                  written commitment or interim binder or preliminary report of the
                  title
                  issued by the title insurance or escrow company with respect to
                  the
                  Mortgaged Property, or, in lieu thereof, an Alternative Title Product;
                  and

              


      

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (f)

              	
                in
                  the case of a Cooperative Loan, the originals of the following
                  documents
                  or instruments:

              


      

       

      (1) The
        Coop
        Shares, together with a stock power in blank;

       

      (2) The
        executed Security Agreement;

       

      (3) The
        executed Proprietary Lease;

       

      (4) The
        executed Recognition Agreement;

       

      (5) The
        executed UCC-1 financing statement with evidence of recording thereon which
        have
        been filed in all places required to perfect the Seller’s interest in the Coop
        Shares and the Proprietary Lease; and

       

      (6) Executed
        UCC-3 financing statements or other appropriate UCC financing statements
        required by state law, evidencing a complete and unbroken line from the
        mortgagee to the Trustee with evidence of recording thereon (or in a form
        suitable for recordation).

       

      In
        the
        event that in connection with any Mortgage Loan that is not a MERS Mortgage
        Loan
        the Seller cannot deliver (i) the original recorded Mortgage or (ii) all
        interim
        recorded assignments satisfying the requirements of clause (b) or (c) above,
        respectively, concurrently with the execution and delivery hereof because
        such
        document or documents have not been returned from the applicable public
        recording office, the Seller shall promptly deliver or cause to be delivered
        to
        the Trustee or the Custodian on its behalf such original Mortgage or such
        interim assignment, as the case may be, with evidence of recording indicated
        thereon upon receipt thereof from the public recording office, or a copy
        thereof, certified, if appropriate, by the relevant recording office, but
        in no
        event shall any such delivery of the original Mortgage and each such interim
        assignment or a copy thereof, certified, if appropriate, by the relevant
        recording office, be made later than one year following the Closing Date;
        provided, however, in the event the Seller is unable to deliver or cause
        to be
        delivered by such date each Mortgage and each such interim assignment by
        reason
        of the fact that any such documents have not been returned by the appropriate
        recording office, or, in the case of each such interim assignment, because
        the
        related Mortgage has not been returned by the appropriate recording office,
        the
        Seller shall deliver or cause to be delivered such documents to the Trustee
        or
        the Custodian on its behalf as promptly as possible upon receipt thereof
        and, in
        any event, within 720 days following the Closing Date; provided, further,
        however, that the Seller shall not be required to provide an original or
        duplicate lender’s title policy (together with all riders thereto) if the Seller
        delivers an Alternative Title Product in lieu thereof. The Seller shall forward
        or cause to be forwarded to the Trustee or the Custodian on its behalf (i)
        from
        time to time additional original documents evidencing an assumption or
        modification of a Mortgage Loan and (ii) any other documents required to
        be
        delivered by the Seller to the Trustee. In the event that the original Mortgage
        is not delivered and in connection with the payment in full of the related
        Mortgage Loan and the public recording office requires the presentation of
        a
“lost instruments affidavit and indemnity” or any equivalent document, because
        only a copy of the Mortgage can be delivered with the instrument of satisfaction
        or reconveyance, the Seller shall execute and deliver or cause to be executed
        and delivered such a document to the public recording office. In the case
        where
        a public recording office retains the original recorded Mortgage or in the
        case
        where a Mortgage is lost after recordation in a public recording office,
        the
        Seller shall deliver or cause to be delivered to the Trustee or the Custodian
        on
        its behalf a copy of such Mortgage certified by such public recording office
        to
        be a true and complete copy of the original recorded Mortgage.

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      In
        addition, in the event that in connection with any Mortgage Loan the Seller
        cannot deliver or cause to be delivered the original or duplicate original
        lender’s title policy (together with all riders thereto), satisfying the
        requirements of clause (v) above, concurrently with the execution and delivery
        hereof because the related Mortgage has not been returned from the applicable
        public recording office, the Seller shall promptly deliver or cause to be
        delivered to the Trustee or the Custodian on its behalf such original or
        duplicate original lender’s title policy (together with all riders thereto) upon
        receipt thereof from the applicable title insurer, but in no event shall
        any
        such delivery of the original or duplicate original lender’s title policy be
        made later than one year following the Closing Date; provided, however, in
        the
        event the Seller is unable to deliver or cause to be delivered by such date
        the
        original or duplicate original lender’s title policy (together with all riders
        thereto) because the related Mortgage has not been returned by the appropriate
        recording office, the Seller shall deliver or cause to be delivered such
        documents to the Trustee or the Custodian on its behalf as promptly as possible
        upon receipt thereof and, in any event, within 720 days following the Closing
        Date. 

       

      Notwithstanding
        anything to the contrary in this Agreement, within thirty days after the
        Closing
        Date, the Seller shall either (i) deliver or cause to be delivered to the
        Trustee or the Custodian on its behalf the Mortgage File as required pursuant
        to
        this Section 3.1 for each Delay Delivery Mortgage Loan or (ii) (A) substitute
        or
        cause to be substituted a Substitute Mortgage Loan for the Delay Delivery
        Mortgage Loan or (B) repurchase or cause to be repurchased the Delay Delivery
        Mortgage Loan, which substitution or repurchase shall be accomplished in
        the
        manner and subject to the conditions set forth in Section 4.1 (treating each
        Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for purposes of such
        Section 4.1), provided, however, that if the Seller fails to deliver a Mortgage
        File for any Delay Delivery Mortgage Loan within the thirty-day period provided
        in the prior sentence, the Seller shall use its best reasonable efforts to
        effect or cause to be effected a substitution, rather than a repurchase of,
        such
        Deleted Mortgage Loan and provided further that the cure period provided
        for in
        Section 4.1 hereof shall not apply to the initial delivery of the Mortgage
        File
        for such Delay Delivery Mortgage Loan, but rather the Seller shall have five
        (5)
        Business Days to cure or cause to be cured such failure to deliver.


       

      ARTICLE
        IV

      Representations
        and Warranties

       

      Section
        4.1 Representations
        and Warranties of the Seller.
        (a) The Seller hereby represents and warrants to the Purchaser, as of the
        date
        of execution and delivery hereof, that:

       

      (1) The
        Seller is duly organized as a Kansas corporation and is validly existing
        and in
        good standing under the laws of the State of Kansas and is duly authorized
        and
        qualified to transact any and all business contemplated by this Agreement
        to be
        conducted by the Seller in any state in which a Mortgaged Property is located
        or
        is otherwise not required under applicable law to effect such qualification
        and,
        in any event, is in compliance with the doing business laws of any such state,
        to the extent necessary to ensure its ability to enforce each Mortgage Loan
        and
        to perform any of its other obligations under this Agreement in accordance
        with
        the terms thereof.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      (2) The
        Seller has the full corporate power and authority to sell each Mortgage Loan,
        and to execute, deliver and perform, and to enter into and consummate the
        transactions contemplated by this Agreement and has duly authorized by all
        necessary corporate action on the part of the Seller the execution, delivery
        and
        performance of this Agreement; and this Agreement, assuming the due
        authorization, execution and delivery thereof by the other parties thereto,
        constitutes a legal, valid and binding obligation of the Seller, enforceable
        against the Seller in accordance with its terms, except that (a) the
        enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
        receivership and other similar laws relating to creditors’ rights generally and
        (b) the remedy of specific performance and injunctive and other forms of
        equitable relief may be subject to equitable defenses and to the discretion
        of
        the court before which any proceeding therefor may be brought.

       

      (3) The
        execution and delivery of this Agreement by the Seller, the sale of the Mortgage
        Loans by the Seller under this Agreement, the consummation of any other of
        the
        transactions contemplated by this Agreement, and the fulfillment of or
        compliance with the terms thereof are in the ordinary course of business
        of the
        Seller and will not (a) result in a material breach of any term or provision
        of
        the charter or by-laws of the Seller or (b) materially conflict with, result
        in
        a material breach, violation or acceleration of, or result in a material
        default
        under, the terms of any other material agreement or instrument to which the
        Seller is a party or by which it may be bound, or (c) constitute a material
        violation of any statute, order or regulation applicable to the Seller of
        any
        court, regulatory body, administrative agency or governmental body having
        jurisdiction over the Seller; and the Seller is not in breach or violation
        of
        any material indenture or other material agreement or instrument, or in
        violation of any statute, order or regulation of any court, regulatory body,
        administrative agency or governmental body having jurisdiction over it which
        breach or violation may materially impair the Seller’s ability to perform or
        meet any of its obligations under this Agreement.

       

      (4) No
        litigation is pending or, to the best of the Seller’s knowledge, threatened
        against the Seller that would prohibit the execution or delivery of, or
        performance under, this Agreement by the Seller.

       

      (5) The
        Seller is a member of MERS in good standing, and will comply in all material
        respects with the rules and procedures of MERS in connection with the servicing
        of the MERS Mortgage Loans for as long as such Mortgage Loans are registered
        with MERS.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

         

      

      
        	 	
                (b)

              	
                The
                  Seller hereby makes the representations and warranties set forth
                  in
                  Schedule
                  B
                  hereto to the Purchaser, as of the Closing Date, or if so specified
                  therein, as of the Cut-off Date.

              


      

       

      
        	
              	(c)	
                Upon
                  discovery by either of the parties hereto of a breach of a representation
                  or warranty made pursuant to Schedule
                  B
                  hereto that materially and adversely affects the interests of the
                  Purchaser in any Mortgage Loan, the party discovering such breach
                  shall
                  give prompt notice thereof to the other party. The Seller hereby
                  covenants
                  that within 90 days of the earlier of its discovery or its receipt
                  of
                  written notice from the Purchaser of a breach of any representation
                  or
                  warranty made pursuant to Schedule
                  B
                  hereto which materially and adversely affects the interests of
                  the
                  Purchaser in any Mortgage Loan, it shall cure such breach in all
                  material
                  respects, and if such breach is not so cured, shall, (i) if such
                  90-day
                  period expires prior to the second anniversary of the Closing Date,
                  remove
                  such Mortgage Loan (a “Deleted Mortgage Loan”) from the pools of mortgages
                  listed on Schedule
                  B
                  hereto and substitute in its place a Substitute Mortgage Loan,
                  in the
                  manner and subject to the conditions set forth in this Section;
                  or (ii)
                  repurchase the affected Mortgage Loan or Mortgage Loans from the
                  Purchaser
                  at the Mortgage Loan Purchase Price in the manner set forth below.
                  With
                  respect to the representations and warranties described in this
                  Section
                  which are made to the best of the Seller’s knowledge, if it is discovered
                  by either the Seller or the Purchaser that the substance of such
                  representation and warranty is inaccurate and such inaccuracy materially
                  and adversely affects the value of the related Mortgage Loan or
                  the
                  interests of the Purchaser therein, notwithstanding the Seller’s lack of
                  knowledge with respect to the substance of such representation
                  or
                  warranty, such inaccuracy shall be deemed a breach of the applicable
                  representation or warranty.

              


      

       

      With
        respect to any Substitute Mortgage Loan or Loans, the Seller shall deliver
        to
        the Trustee or to the Custodian on its behalf the Mortgage Note, the Mortgage,
        the related assignment of the Mortgage, and such other documents and agreements
        as are required by Section 3.1, with the Mortgage Note endorsed and the Mortgage
        assigned as required by Section 3.1. No substitution is permitted to be made
        in
        any calendar month after the Determination Date for such month. Scheduled
        Payments due with respect to Substitute Mortgage Loans in the month of
        substitution will be retained by the Seller. Upon such substitution, the
        Substitute Mortgage Loan or Loans shall be subject to the terms of this
        Agreement in all respects, and the Seller shall be deemed to have made with
        respect to such Substitute Mortgage Loan or Loans, as of the date of
        substitution, the representations and warranties made pursuant to Schedule
        B
        hereto
        with respect to such Mortgage Loan. 

       

      It
        is
        understood and agreed that the obligation under this Agreement of the Seller
        to
        cure, repurchase or replace any Mortgage Loan as to which a breach has occurred
        and is continuing shall constitute the sole remedy against the Seller respecting
        such breach available to the Purchaser on its behalf.

       

      The
        representations and warranties contained in this Agreement shall not be
        construed as a warranty or guaranty by the Seller as to the future payments
        by
        any Mortgagor.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      It
        is
        understood and agreed that the representations and warranties set forth in
        this
        Section 4.1 shall survive the sale of the Mortgage Loans to the Purchaser
        hereunder.

       

      ARTICLE
        V

      Miscellaneous

       

      Section
        5.1 Transfer
        Intended as Sale.
        It is the express intent of the parties hereto that the conveyance of the
        Mortgage Loans by the Seller to the Purchaser be, and be construed as, an
        absolute sale thereof in accordance with GAAP and for regulatory purposes.
        It
        is, further, not the intention of the parties that such conveyances be deemed
        a
        pledge thereof by the Seller to the Purchaser. However, in the event that,
        notwithstanding the intent of the parties, the Mortgage Loans are held to
        be the
        property of the Seller or the Purchaser, respectively, or if for any other
        reason this Agreement is held or deemed to create a security interest in
        such
        assets, then (i) this Agreement shall be deemed to be a security agreement
        within the meaning of the Uniform Commercial Code of the State of Texas and
        (ii)
        the conveyance of the Mortgage Loans provided for in this Agreement shall
        be
        deemed to be an assignment and a grant by the Seller to the Purchaser of
        a
        security interest in all of the Mortgage Loans, whether now owned or hereafter
        acquired.

       

      The
        Seller and the Purchaser shall, to the extent consistent with this Agreement,
        take such actions as may be necessary to ensure that, if this Agreement were
        deemed to create a security interest in the Mortgage Loans, such security
        interest would be deemed to be a perfected security interest of first priority
        under applicable law and will be maintained as such throughout the term of
        the
        Agreement. The Seller and the Purchaser shall arrange for filing any Uniform
        Commercial Code continuation statements in connection with any security interest
        granted hereby.

       

      Section
        5.2 Seller’s
        Consent to Assignment.
        The
        Seller hereby acknowledges the Purchaser’s right to assign, transfer and convey
        all of the Purchaser’s rights under this Agreement to a third party and that the
        representations and warranties made by the Seller to the Purchaser pursuant
        to
        this Agreement will, in the case of such assignment, transfer and conveyance,
        be
        for the benefit of such third party. The Seller hereby consents to such
        assignment, transfer and conveyance.

       

      Section
        5.3 Specific
        Performance.
        Either
        party or its assignees may enforce specific performance of this
        Agreement.

       

      Section
        5.4 Notices.
        All
        notices, demands and requests that may be given or that are required to be
        given
        hereunder shall be sent by United States certified mail, postage prepaid,
        return
        receipt requested, to the parties at their respective addresses as
        follows:

      

        
          	 	
                  If
                    to

                	 
	 	
                  the
                    Purchaser: 

                	
                  4000
                    Horizon Way

                
	 	 	
                  Irving,
                    Texas 75063

                
	 	 	
                  Attn:
                    Larry P. Cole

                
	 	 	 
	 	
                  If
                    to the Seller:

                	
                  4000
                    Horizon Way

                
	 	 	
                  Irving,
                    Texas 75063

                
	 	 	
                  Attn:
                    Larry P. Cole

                


        

      

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

      Section
        5.5 Choice
        of Law.
        This
        Agreement shall be construed in accordance with and governed by the substantive
        laws of the State of Texas applicable to agreements made and to be performed
        in
        the State of Texas and the obligations, rights and remedies of the parties
        hereto shall be determined in accordance with such laws. 

       

      [remainder
        of page intentionally left blank]


      
        
          
          

        

        
          -12-

          
            

          

        

         

      


      IN
        WITNESS WHEREOF, the Purchaser and the Seller have caused their names to
        be
        signed hereto by their respective officers thereunto duly authorized as of
        the
        28th
        day of
        December, 2006.

       

      
        	 	 	 
	 	FIRST
                HORIZON HOME
                LOAN CORPORATION, as Seller
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                Terry
                  L. McCoy

                Executive
                  Vice President

              
	 	 


      

      
        	 	 	 
	 	FIRST
                HORIZON
                ASSET SECURITIES INC., as Purchaser
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                Alfred
                  Chang

                Vice
                  President

              
	 	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        A

       

      [Available
        Upon Request From Trustee]

       

      
        
          
          

        

        
          
          

          
            

          

        

         

      


      SCHEDULE
        B

       

      Representations
        and Warranties as to the Mortgage Loans

       

      First
        Horizon Home Loan Corporation (the “Seller”) hereby makes the representations
        and warranties set forth in this Schedule
        B
        on which
        First Horizon Asset Securities Inc. (the “Purchaser”) relies in accepting the
        Mortgage Loans. Such representations and warranties speak as of the execution
        and delivery of the Mortgage Loan Purchase Agreement, dated as of December
        28,
        2006 (the “MLPA”), between First Horizon Home Loan Corporation, as seller, and
        the Purchaser and as of the Closing Date, or if so specified herein, as of
        the
        Cut-off Date or date of origination of the Mortgage Loans, but shall survive
        the
        sale, transfer, and assignment of the Mortgage Loans to the Purchaser and
        any
        subsequent sale, transfer and assignment by the Purchaser to a third party.
        Capitalized terms used but not otherwise defined in this Schedule
        B
        shall
        have the meanings ascribed thereto in the MLPA or the Pooling and Servicing
        Agreement, dated as of December 1, 2006, between First Horizon Asset Securities
        Inc., as depositor, First Horizon Home Loan Corporation, as master servicer,
        and
        The Bank of New York, as trustee.

       

      
        	 	
                (1)

              	
                The
                  information set forth on Schedule
                  A
                  to
                  the MLPA, with respect to each Mortgage Loan is true and correct
                  in all
                  material respects as of the Closing
                  Date.

              


      

       

      
        	 	
                (2)

              	
                Each
                  Mortgage is a valid and enforceable first lien on the Mortgaged
                  Property
                  subject only to (a) the lien of nondelinquent current real property
                  taxes
                  and assessments and liens or interests arising under or as a result
                  of any
                  federal, state or local law, regulation or ordinance relating to
                  hazardous
                  wastes or hazardous substances and, if the related Mortgaged Property
                  is a
                  unit in a condominium project or Planned Unit Development, any
                  lien for
                  common charges permitted by statute or homeowner association fees,
                  (b)
                  covenants, conditions and restrictions, rights of way, easements
                  and other
                  matters of public record as of the date of recording of such Mortgage,
                  such exceptions appearing of record being generally acceptable
                  to mortgage
                  lending institutions in the area wherein the related Mortgaged
                  Property is
                  located or specifically reflected in the appraisal made in connection
                  with
                  the origination of the related Mortgage Loan, and (c) other matters
                  to
                  which like properties are commonly subject which do not materially
                  interfere with the benefits of the security intended to be provided
                  by
                  such Mortgage.

              


      

       

      
        	 	
                (3)

              	
                Immediately
                  prior to the assignment of the Mortgage Loans to the Purchaser,
                  the Seller
                  had good title to, and was the sole owner of, each Mortgage Loan
                  free and
                  clear of any pledge, lien, encumbrance or security interest and
                  had full
                  right and authority, subject to no interest or participation of,
                  or
                  agreement with, any other party, to sell and assign the same pursuant
                  to
                  this Agreement.

              


      

       

      
        	 	
                (4)

              	
                As
                  of the date of origination of each Mortgage Loan, there was no
                  delinquent
                  tax or assessment lien against the related Mortgaged
                  Property.

              


      

       

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (5)

              	
                There
                  is no valid offset, defense or counterclaim to any Mortgage Note
                  or
                  Mortgage, including the obligation of the Mortgagor to pay the
                  unpaid
                  principal of or interest on such Mortgage
                  Note.

              


      

       

      
        	 	
                (6)

              	
                There
                  are no mechanics’ liens or claims for work, labor or material affecting
                  any Mortgaged Property which are or may be a lien prior to, or
                  equal with,
                  the lien of such Mortgage, except those which are insured against
                  by the
                  title insurance policy referred to in item (11)
                  below.

              


      

       

      
        	 	
                (7)

              	
                To
                  the best of the Seller’s knowledge, no Mortgaged Property has been
                  materially damaged by water, fire, earthquake, windstorm, flood,
                  tornado
                  or similar casualty (excluding casualty from the presence of hazardous
                  wastes or hazardous substances, as to which the Seller makes no
                  representation) so as to affect adversely the value of the related
                  Mortgaged Property as security for such Mortgage Loan. With respect
                  to the
                  representations and warranties contained within this item (7) that
                  are
                  made to the knowledge or the best knowledge of the Seller or as
                  to which
                  the Seller has no knowledge, if it is discovered that the substance
                  of any
                  such representation and warranty is inaccurate and the inaccuracy
                  materially and adversely affects the value of the related Mortgage
                  Loan,
                  or the interest therein of the Purchaser, then notwithstanding
                  the
                  Seller’s lack of knowledge with respect to the substance of such
                  representation and warranty being inaccurate at the time the
                  representation and warranty was made, such inaccuracy shall be
                  deemed a
                  breach of the applicable representation and warranty and the Seller
                  shall
                  take such action described in Section 4.1(c) of this Agreement
                  in respect
                  of such Mortgage Loan.

              


      

       

      
        	 	
                (8)

              	
                Each
                  Mortgage Loan at origination complied in all material respects
                  with
                  applicable local, state and federal laws, including, without limitation,
                  usury, equal credit opportunity, real estate settlement procedures,
                  truth-in-lending and disclosure laws and specifically applicable
                  predatory
                  and abusive lending laws.

              


      

       

      
        	 	
                (9)

              	
                No
                  Mortgage Loan is a “high cost loan” as defined by the specific applicable
                  predatory and abusive lending laws.

              


      

       

      
        	 	
                (10)

              	
                Except
                  as reflected in a written document contained in the related Mortgage
                  File,
                  the Seller has not modified the Mortgage in any material respect;
                  satisfied, cancelled or subordinated such Mortgage in whole or
                  in part;
                  released the related Mortgaged Property in whole or in part from
                  the lien
                  of such Mortgage; or executed any instrument of release, cancellation,
                  modification or satisfaction with respect
                  thereto.

              


      

       

      
        	 	
                (11)

              	
                A
                  lender’s policy of title insurance together with a condominium endorsement
                  and extended coverage endorsement, if applicable, in an amount
                  at least
                  equal to the Cut-off Date Principal Balance of each such Mortgage
                  Loan or
                  a commitment (binder) to issue the same was effective on the date
                  of the
                  origination of each Mortgage Loan, each such policy is valid and
                  remains
                  in full force and effect, or, in lieu thereof, an Alternative Title
                  Product.

              


      

       

      
        
          
          

        

        
          B-2

          
            

          

        

        
          
          

        

         

      

      
        	 	
                (12)

              	
                To
                  the best of the Seller’s knowledge, all of the improvements which were
                  included for the purpose of determining the appraised value of
                  the
                  Mortgaged Property lie wholly within the boundaries and building
                  restriction lines of such property, and no improvements on adjoining
                  properties encroach upon the Mortgaged Property, unless such failure
                  to be
                  wholly within such boundaries and restriction lines or such encroachment,
                  as the case may be, does not have a material effect on the value
                  of such
                  Mortgaged Property.

              


      

       

      
        	 	
                (13)

              	
                To
                  the best of the Seller’s knowledge, as of the date of origination of each
                  Mortgage Loan, no improvement located on or being part of the Mortgaged
                  Property is in violation of any applicable zoning law or regulation
                  unless
                  such violation would not have a material adverse effect on the
                  value of
                  the related Mortgaged Property. To the best of the Seller’s knowledge, all
                  inspections, licenses and certificates required to be made or issued
                  with
                  respect to all occupied portions of the Mortgaged Property and,
                  with
                  respect to the use and occupancy of the same, including but not
                  limited to
                  certificates of occupancy and fire underwriting certificates, have
                  been
                  made or obtained from the appropriate authorities, unless the lack
                  thereof
                  would not have a material adverse effect on the value of such Mortgaged
                  Property.

              


      

       

      
        	 	
                (14)

              	
                The
                  Mortgage Note and the related Mortgage are genuine, and each is
                  the legal,
                  valid and binding obligation of the maker thereof, enforceable
                  in
                  accordance with its terms and under applicable
                  law.

              


      

       

      
        	 	
                (15)

              	
                The
                  proceeds of the Mortgage Loans have been fully disbursed and there
                  is no
                  requirement for future advances
                  thereunder.

              


      

       

      
        	 	
                (16)

              	
                The
                  related Mortgage contains customary and enforceable provisions
                  which
                  render the rights and remedies of the holder thereof adequate for
                  the
                  realization against the Mortgaged Property of the benefits of the
                  security, including, (i) in the case of a Mortgage designated as
                  a deed of
                  trust, by trustee’s sale, and (ii) otherwise by judicial
                  foreclosure.

              


      

       

      
        	 	
                (17)

              	
                With
                  respect to each Mortgage constituting a deed of trust, a trustee,
                  duly
                  qualified under applicable law to serve as such, has been properly
                  designated and currently so serves and is named in such Mortgage,
                  and no
                  fees or expenses are or will become payable by the holder of the
                  Mortgage
                  to the trustee under the deed of trust, except in connection with
                  a
                  trustee’s sale after default by the
                  Mortgagor.

              


      

       

      
        	 	
                (18)

              	
                As
                  of the Closing Date, the improvements upon each Mortgaged Property
                  are
                  covered by a valid and existing hazard insurance policy with a
                  generally
                  acceptable carrier that provides for fire and extended coverage
                  and
                  coverage for such other hazards as are customarily required by
                  institutional single family mortgage lenders in the area where
                  the
                  Mortgaged Property is located, and the Seller has received no notice
                  that
                  any premiums due and payable thereon have not been paid; the Mortgage
                  obligates the Mortgagor thereunder to maintain all such insurance
                  including flood insurance at the Mortgagor’s cost and expense. Anything to
                  the contrary in this item (18) notwithstanding, no breach of this
                  item
                  (18) shall be deemed to give rise to any obligation of the Seller
                  to
                  repurchase or substitute for such affected Mortgage Loan or Loans
                  so long
                  as the Seller maintains a blanket
                  policy.

              


      

       

      
        
          
          

        

        
          B-3

          
            

          

        

        
          
          

        

         

      

      
        	 	
                (19)

              	
                If
                  at the time of origination of each Mortgage Loan, the related Mortgaged
                  Property was in an area then identified in the Federal Register
                  by the
                  Federal Emergency Management Agency as having special flood hazards,
                  a
                  flood insurance policy in a form meeting the then-current requirements
                  of
                  the Flood Insurance Administration is in effect with respect to
                  such
                  Mortgaged Property with a generally acceptable
                  carrier.

              


      

       

      
        	 	
                (20)

              	
                To
                  the best of the Seller’s knowledge, there is no proceeding pending or
                  threatened for the total or partial condemnation of any Mortgaged
                  Property, nor is such a proceeding currently
                  occurring.

              


      

       

      
        	 	
                (21)

              	
                To
                  best of the Seller’s knowledge, there is no material event which, with the
                  passage of time or with notice and the expiration of any grace
                  or cure
                  period, would constitute a material non-monetary default, breach,
                  violation or event of acceleration under the Mortgage or the related
                  Mortgage Note; and the Seller has not waived any material non-monetary
                  default, breach, violation or event of
                  acceleration.

              


      

       

      
        	 	
                (22)

              	
                Any
                  leasehold estate securing a Mortgage Loan has a stated term at
                  least as
                  long as the term of the related Mortgage
                  Loan.

              


      

       

      
        	 	
                (23)

              	
                Each
                  Mortgage Loan was selected from among the outstanding adjustable-rate
                  one-
                  to four-family mortgage loans in the Seller’s portfolio at the Closing
                  Date as to which the representations and warranties made with respect
                  to
                  the Mortgage Loans set forth in this Schedule
                  B
                  can be made. No such selection was made in a manner intended to
                  adversely
                  affect the interests of the
                  Certificateholders.

              


      

       

      
        	 	
                (24)

              	
                The
                  Mortgage Loans provide for the full amortization of the amount
                  financed
                  over a series of monthly payments.

              


      

       

      
        	 	
                (25)

              	
                At
                  origination, substantially all of the Mortgage Loans in Pool I,
                  Pool II
                  and Pool III had stated terms to maturity of 30
                  years.

              


      

       

      
        	 	
                (26)

              	
                Scheduled
                  monthly payments made by the Mortgagors on the Mortgage Loans either
                  earlier or later than their Due Dates will not affect the amortization
                  schedule or the relative application of the payments to principal
                  and
                  interest.

              


      

       

      
        	 	
                (27)

              	
                The
                  Mortgagors may prepay all of the Mortgage Loans at any time without
                  penalty.

              


      

       

      
        	 	
                (28)

              	
                All
                  of the Mortgage Loans in Pool I and Pool III, and approximately
                  98.64% of
                  the Mortgage Loans in Pool II are jumbo mortgage loans that have
                  Stated
                  Principal Balances at origination that exceed the then applicable
                  limitations for purchase by Fannie Mae and Freddie
                  Mac.

              


      

       

      
        
          
          

        

        
          B-4

          
            

          

        

        
          
          

        

         

      

      
        	 	
                (29)

              	
                Each
                  Mortgage Loan in Pool I was originated on or after May 8, 2006.
                  Each
                  Mortgage Loan in Pool II was originated on or after July 24, 2006.
                  Each
                  Mortgage Loan in Pool III was originated on or after August 19,
                  2006.
                  

              


      

       

      
        	 	
                (30)

              	
                The
                  latest stated maturity date of any Mortgage Loan in Pool I is December 1,
                  2036, and the earliest is June 1, 2036. The latest stated maturity
                  date of
                  any Mortgage Loan in Pool II is December 1, 2036, and the earliest
                  is
                  August 1, 2036. The latest stated maturity date of any Mortgage
                  Loan in
                  Pool III is December 1, 2036, and the earliest is September 1,
                  2036.

              


      

       

      
        	 	
                (31)

              	
                No
                  Mortgage Loan was delinquent more than 30 days as of the Cut-off
                  Date.

              


      

       

      
        	 	
                (32)

              	
                No
                  Mortgage Loan had a Loan-to-Value Ratio at origination of more
                  than 95%.
                  Generally, each Mortgage Loan with a Loan-to-Value Ratio at origination
                  of
                  greater than 80% is covered by a Primary Insurance Policy issued
                  by a
                  mortgage insurance company that is acceptable to Fannie Mae or
                  Freddie
                  Mac.

              


      

       

      
        	 	
                (33)

              	
                Each
                  Mortgage Loan constitutes a “qualified mortgage” within the meaning of
                  Section 860G(a)(3) of the Code.

              


      

       

      
        	 	
                (34)

              	
                No
                  Mortgage Loan is a “high cost loan” as defined by the specific applicable
                  local, state or federal predatory and abusive lending laws. In
                  addition,
                  no Mortgage Loan is a “High Cost Loan” or a “Covered Loan”, as applicable
                  (as such terms are defined in the then current Standard & Poor’s
                  LEVELSâ
                  Glossary which is now Version 5.7 Revised, Appendix E) and no Mortgage
                  Loan originated on or after October 1, 2002 through March 6, 2003
                  is
                  governed by the Georgia Fair Lending
                  Act.

              


      

       

      
        	 	
                (35)

              	
                Appraisal
                  form 1004 or form 2055 with an interior inspection for first lien
                  mortgage
                  loans has been obtained for all related mortgaged properties, other
                  than
                  condominiums, investment properties, two to four unit properties
                  and
                  exempt properties, for which appraisal form 1004 or form 2055 has
                  not been
                  obtained.

              


      

       

      Appraisal
        form 704, 2065 or 2055 with an exterior only inspection for junior lien
        mortgages combined with first lien mortgages (including home equity lines
        of
        credit) has been obtained for all related mortgaged properties, other than
        condominiums, investment properties, two to four unit properties and exempt
        properties, for which appraisal form 1004 or form 2055 has not been obtained.
        Appraisal form 704, 2065 or 2055 with an exterior only inspection for all
        other
        junior lien mortgages has been obtained for all related mortgaged properties,
        other than those related mortgaged properties that qualify for an Automated
        Valuation Model.

       

      
        
          
          

        

        
          B-5