Exhibit
4.4


 


[MBIA Logo]


 


MBIA INSURANCE CORPORATION


 


FINANCIAL GUARANTEE INSURANCE POLICY

November 26, 2003


 


POLICY NUMBER:  42851


 


	
  Re:

  	
   

  	
  Household
  Automotive Trust 2003-2 (the “Trust”)  $159,000,000
  1.14% Asset Backed Notes, Class A-1 (“Class A-1 Notes”); $205,000,000
  1.56% Asset Backed Notes, Class A-2 (“Class A-2 Notes”); $190,000,000
  2.31% Asset Backed Notes, Class A-3 (“Class A-3 Notes”); and
  $196,000,000 3.02% Asset Backed Notes, Class A-4 (“Class A-4 Notes”
  and together with the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, the
  “Notes”).

  
	
   

  	
   

  	
   

  
	
  Insured
  Obligation:

  	
   

  	
  Obligation
  to pay servicing and trustee fees, timely interest, any Insured Principal
  Balance Shortfalls (as defined in the Series Supplement) and ultimate
  principal on the Notes.

  
	
   

  	
   

  	
   

  
	
  Beneficiary:

  	
   

  	
  Wells
  Fargo Bank Minnesota, National Association, as indenture trustee (the “Indenture
  Trustee”) under the Indenture dated as of November 26, 2003 (the “Indenture”)
  between the Trust and the Indenture Trustee (together with any successor
  indenture trustee duly appointed and qualified under the Indenture) for the
  benefit of the Owners (as defined below).

  



 


MBIA
INSURANCE CORPORATION (“MBIA”), for consideration received,
hereby unconditionally and irrevocably guarantees to the Beneficiary, subject only
to the terms of this Financial Guarantee Insurance Policy (the “Policy”),
payment of the Insured Obligation.  MBIA
agrees to pay to the Indenture Trustee, in respect of each Distribution Date,
an amount equal to the amount by which (A) the sum of the following amounts,
each as of or with respect to such Distribution Date, (i) the Servicing Fee (if
HFC is no longer acting as the Master Servicer), including any unpaid Servicing
Fees (if HFC is no longer acting as the Master Servicer), (ii) any accrued and
unpaid fees and any unreimbursed costs and expenses of the Indenture trustee
and the Owner Trustee, in each case to the extent such fees have not been paid
by the Master Servicer, (iii) the Class A Interest Distributable Amount, (iv)
the Insured Principal Balance Shortfall, if any, if such Distribution Date is
not the Scheduled Maturity Date with respect to any Class of Notes, and (v) if
such Distribution Date is a Scheduled Maturity Date with respect to any Class
of Notes, the outstanding principal amount of such Class of Notes on such
Distribution Date, exceeds (B) the sum of (i) the amount of Available Funds
available to make such payments with respect to such Distribution Date and (ii)
the amount on deposit in the Reserve Account as of such Distribution Date (the
“Deficiency Amount”).  MBIA also
agrees to pay an amount equal to any Avoided Payment (as defined below).  This Policy does not cover shortfalls, if
any,


 

















 


attributable to
the liability of the Trust for withholding taxes, if any (including interest
and penalties in respect of such liability). 
Payments hereunder shall be made only at the time set forth in this
Policy.  This Policy will not guarantee
payment of any Class A Additional Principal Distributable Amount or amounts
that become due on an accelerated basis as a result of (a) a default by the
Trust, (b) the occurrence of an Event of Default under the Indenture, or (c)
any other cause.  MBIA may elect, in its
sole discretion, to pay in whole or in part such principal due upon
acceleration.


 


Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in
the Master Sale and Servicing Agreement dated as of November 26, 2003
amount Household Auto Receivables Corporation, as seller (the “Seller”),
Household Finance Corporation, as Master Servicer (the “Master Servicer”),
the Indenture Trustee and the Trust (as amended, supplemented or otherwise
modified, the “Master Sale and Servicing Agreement”).


 


As used herein the term “Owner”
means each Noteholder who on the applicable Distribution Date is entitled under
the terms of the related Note to receive payments thereunder.


 


Payment of amounts
hereunder shall be made in immediately available funds no later than the later
of (a) 12:00 noon, New York City time, on the related Distribution Date and (b)
12:00 noon, New York City time, on the second Business Day following
presentation to State Street Bank and Trust Company, N.A., as Fiscal Agent for
MBIA or any successor fiscal agent appointed by MBIA (the “Fiscal Agent”)
(as hereinafter provided) and MBIA of a notice for payment in the form of Exhibit
A hereto (“Notice for Payment”), appropriately completed and
executed by the Indenture Trustee.  A
Notice for Payment under this Policy may be presented to the Fiscal Agent and
MBIA on any Business Day following the Determination Date in respect of which
the Notice for Payment is being presented, by (a) delivery of the original
Notice for Payment to the Fiscal Agent and MBIA at its respective address set
forth below, or (b) facsimile transmission of the original Notice for Payment
to the Fiscal Agent and MBIA  at its
respective facsimile number set forth below. 
If presentation is made by facsimile transmission, the Indenture Trustee
shall (i) simultaneously confirm transmission by telephone to the Fiscal Agent
and MBIA at its respective telephone number set forth below, and (ii) as soon
as reasonably practicable, deliver the original Notice for Payment to the
Fiscal Agent and MBIA at its respective address set forth below.  Any Notice for Payment received by the
Fiscal Agent or MBIA after 12:00 noon, New York City time, on a Business Day,
or on any day that is not a Business Day, will be deemed to be received by the
Fiscal Agent and MBIA on the next succeeding Business Day.


 


Subject to the foregoing,
if the payment of any amount previously distributed to an Owner in respect of
the Notes that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy with respect to the Trust, the Seller or
the Originator pursuant to the United States Bankruptcy Code (11 U.S.C.), as
amended from time to time, in accordance with a nonappealable order of a court
having competent jurisdiction is voided (“Avoided Payment”), MBIA will
make such Avoided Payment on behalf of the Owner to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order (as
defined below) and not to any Owner directly, unless such Owner has previously
paid such Avoided Payment to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy, in which case MBIA will make such Avoided Payment to
such Owner upon receipt by the Fiscal Agent and MBIA from the Indenture Trustee
on behalf of such Owner of (i) a certified copy of a final, nonappealable order
of a court having competent jurisdiction to the effect that the Owner is
required to return


 

















 


any such payment
or portion thereof prior to the Termination Date of this Policy because such
payment was voided under applicable law (the “Final Order”) together
with an opinion of counsel satisfactory to MBIA that such Final Order is final
and not subject to appeal, (ii) an assignment, substantially in the form
attached hereto as Exhibit B, properly completed and executed by such
Owner irrevocably assigning to MBIA all rights and claims of such Owner
relating to or arising under such Avoided Payment, (iii) a Notice for Payment
in the form of Exhibit A hereto appropriately completed and executed by
the Indenture Trustee and (iv) appropriate instruments to effect the
appointment of MBIA as agent for such Owner in any legal proceeding relating to
such Avoided Payment.


 


MBIA shall make payments
due in respect of Avoided Payments no later than 12:00 noon, New York City time
on the Business Date following the Fiscal Agent’s and MBIA’s receipt of the
documents required under clauses (i) through (iv) of the preceding
paragraph.  Any such documents received
by the Fiscal Agent or MBIA after 12:00 noon, New York City time, on any
Business Day or on any day that is not a Business Day shall be deemed to have
been received by the Fiscal Agent and MBIA prior to 12:00 noon on the next
succeeding Business Day.  All payments
made by MBIA hereunder on account of any Avoided Payment shall be made to the
receiver or the trustee in bankruptcy named in the Final Order on behalf of
Owner and not to any owner directly unless such Owner has returned such Avoided
Payment to such receiver or trustee in bankruptcy, in which case such payment
will be disbursed to such Owner.


 


If any Notice for Payment
received by the Fiscal Agent and MBIA is not in proper form or is otherwise
insufficient for the purpose of making a claim hereunder, it shall be deemed no
to have been received by the Fiscal Agent and MBIA, and the Fiscal Agent or
MBIA shall promptly so advise the Indenture Trustee, and the Indenture Trustee
may submit an amended Notice for Payment.


 


Payments due hereunder
unless otherwise stated herein will be disbursed by the Fiscal Agent to the
Indenture Trustee on behalf of the Owners by wire transfer of immediately
available funds in the amount of such payment, less, in respect of Avoided
Payments, any amounts held by the Indenture Trustee for the payment of such
Avoided Payment and legally available therefor.


 


The Fiscal Agent is agent
of MBIA only, and the Fiscal Agent shall in no event be liable to Owners for
any acts of the Fiscal Agent or any failure of MBIA to deposit or cause to be
deposited sufficient funds to make payments due under this Policy.


 


MBIA shall be subrogated
to the rights of each Owner to receive payments under the Notes to the extent
of any payment by MBIA hereunder.


 


MBIA hereby waives and
agrees not to assert any and all rights to require the Indenture Trustee to
make demand on or to proceed against any person, party or security prior to the
Indenture Trustee demanding payment under this Policy.


 


No defenses, set-offs and
counterclaims of any kind available to MBIA so as to deny payment of any amount
due in respect of this Policy will be valid and MBIA hereby waives and agrees
not to assert any and all such defenses (including, without limitation, fraud
in the inducement or fact, or any other circumstances that would have the
effect of discharging a surety at law or in equity), set-offs and
counterclaims, including, without limitation, any such rights acquired by
subrogation, assignment or otherwise. 
Any rights of subrogation acquired by MBIA as a result of any payment
made under this Policy shall, in all respects, be subordinate and junior


 

















 


in right of
payment to the prior indefeasible payment in full of all amounts due to the
Indenture Trustee on account of payments due under the Notes.


 


MBIA’s obligations under
this Policy shall be discharged to the extent funds to pay the Insured
Obligation are deposited by the Master Servicer into the Collection Account in
accordance with the Master Sale and Servicing Agreement or disbursed by MBIA as
provided in this Policy, whether or not such funds are properly applied by the
Indenture Trustee.


 


This Policy is neither
transferable nor assignable, in whole or in part, except to a successor to the
Indenture Trustee pursuant to the Indenture. 
All notices, presentations, transmissions, deliveries and communications
made by the Indenture Trustee to MBIA with respect to this Policy shall
specifically refer to the number of this Policy and shall be made to MBIA at:


 


	
  MBIA Insurance Corporation

  
	
  113 King Street

  
	
  Armonk, New York 
  10504

  
	
  Attention: Insured Portfolio Management, Structured
  Finance

  
	
  Telephone:

  	
  (914) 273-4545

  
	
  Facsimile:

  	
  (914) 765-3810

  



 


or such other address, telephone number or facsimile
number as MBIA may designate to the Indenture Trustee in writing from time to
time.  Each such notice, presentation,
transmission, delivery and communication shall be effective only upon actual
receipt by MBIA.


 


All notices,
presentations, transmissions, deliveries and communications made by the
Indenture Trustee to the Fiscal Agent of MBIA shall specifically refer to the
number of this Policy and shall be made at the address listed below for the
Fiscal Agent of MBIA or such other address, telephone number or facsimile
number as MBIA or the Fiscal Agent shall specify in writing to the Indenture
Trustee.


 


The notice address of the
Fiscal Agent is 61 Broadway, 15th Floor, New York, New York 10006
Attention:  Municipal Registrar and
Paying Agency, Telephone: 212-612-3458, Facsimile: 212-612-3203, or such other
address as the Fiscal Agent shall specify to the Indenture Trustee in writing.


 


The obligations of MBIA
under this Policy are irrevocable, primary, absolute and unconditional (except
as expressly provided herein) and neither the failure of the Trust, the
Indenture Trustee, the Owner Trustee, the Originator, HACC, the Subservicer,
the Seller, the Master Servicer or any other person to perform any covenant or
obligation in favor of MBIA (or otherwise), nor the failure or omission to make
a demand permitted hereunder, not the commencement of any bankruptcy, debtor or
other insolvency proceeding by or against the Trust, the Indenture Trustee, the
Originator, HACC, the Subservicer, , the Owner Trustee, the Seller, the Master
Servicer or any other person shall in any way affect or limit MBIA’s
obligations under this Policy.  If a
successful action or proceeding to enforce this Policy is brought by the
Indenture Trustee, the Indenture Trustee shall be entitled to recover from MBIA
costs and expenses reasonably incurred, including without limitation reasonable
fees and expenses of counsel.


 


This Policy and the
obligations of MBIA hereunder shall terminate on the date (the “Termination
Date”)that is one year and one day following the earlier of (a) the Final
Scheduled


 

















 


Distribution Date
and (b) the date on which all amounts required to be paid to the Owners have
been paid in full, provided, that, if any Insolvency Proceeding
is existing by or against the Originator, the Trust, the Seller or the Bank
during such one year and one day period, then this Policy and MBIA’s
obligations hereunder shall terminate on the date of the conclusion or
dismissal of such Insolvency Proceeding without continuing jurisdiction by the
court in such Insolvency Proceeding, provided, further that, and
notwithstanding anything herein to the contrary, this Policy shall not
terminate prior to the date on which MBIA has made all payments required to be
made under the terms of this Policy in respect of Avoided Payments.


 


All payments made
hereunder by MBIA shall be made with MBIA’s own funds.  The payment by MBIA to the Indenture Trustee
of any amount guaranteed by the first paragraph of this Policy, and the payment
by MBIA of any Avoided Payment shall constitute “payments” for all
purposes under this Policy.  In no event
shall any payment be made under this Policy on account of (a) the failure of
the Indenture Trustee to deliver the proceeds of any such payment to any Owner
or (b) the failure of any such Owner to claim any such proceeds from the
Indenture Trustee.


 


This Policy is not covered by the
property/casualty insurance fund specified in Article Seventy-Six of the
New York State insurance law.


 


This Policy sets forth in
full the undertaking of MBIA, and shall not, except with the prior written
consent of the Indenture Trustee or otherwise in accordance with the express
terms hereof, be modified, altered or affected by any other agreement or
instrument, including any modification or amendment thereto and may not be
canceled or revoked by MBIA prior to the Termination Date.  The Premium on this Policy is not refundable
for any reason.


 


This Policy shall be
returned to MBIA by the Indenture Trustee on the Termination Date.


 


THIS POLICY SHALL BE
CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OR THE APPLICATION OF THE LAWS OF
ANY OTHER JURISDICTION.


 

















 


IN WITNESS WHEREOF, MBIA
has caused this Policy to be executed on the date first written above.


 


 


	
   

  	
  MBIA INSURANCE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary C. Dunton

  	
   

  
	
   

  	
  Name:  Gary
  C. Dunton

  
	
   

  	
  Title: 
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Adam M. Carta

  	
   

  
	
   

  	
  Name: Adam M. Carta

  
	
   

  	
  Title: 
  Assistant Secretary

  



 

















 


Exhibit
A to Financial Guarantee Insurance Policy, Number 42851


 


	
  MBIA Insurance Corporation

  
	
  113 King Street

  
	
  Armonk, NY 
  10504

  
	
  Attention: 
  Insured Portfolio Management,

  
	
   

  	
  Structured Finance

  



 


NOTICE FOR PAYMENT

UNDER FINANCIAL GUARANTEE INSURANCE POLICY NUMBER 42851


 


Wells Fargo Bank Minnesota, National Association, as
indenture trustee (the “Indenture Trustee”), hereby certifies to MBIA
Insurance Corporation (“MBIA”) with reference to that certain Financial
Guarantee Insurance Policy, Number 42851, dated November 26, 2003 (the “Policy”),
issued by MBIA in favor of the Indenture Trustee under the Indenture, dated as
of November 26, 2003 between Household Automotive Trust 2003-2 and the
Indenture Trustee as follows:


 


1.               The Indenture
Trustee is the Indenture Trustee under the Indenture and the Beneficiary under
the Policy.


 


2.               The Indenture
Trustee is entitled to make a demand under the Policy pursuant to
Section 3.03(c) of the Series Supplement [in connection with an Avoided
Payment as defined in the Policy].


 


[For a Notice for Payment
in respect of a Distribution Date use the following paragraphs 3, 4 and 5.]


 


3.               This notice relates
to the [insert date] Distribution Date. The amount claimed under the Policy, as
specified to the Indenture Trustee by the Master Servicer, for such
Distribution Date is
$               .
The amount demanded by this notice does not exceed amounts permitted to be
drawn under the Policy.


 


4.               The Indenture
Trustee demands payment of
$               
which is an amount equal to the Deficiency Amount for such Distribution Date.


 


5.               The amount demanded
is to be paid in immediately available funds to the Collection Account at
               ,
account number
               .


 


[For a Notice for Payment
in respect of an Avoided Payment use the following paragraphs 3 and 4.]


 


3.               The Indenture
Trustee hereby represents and warrants, based upon information available to it,
that (i) the amount entitled to be drawn under the Policy on the date hereof in
respect of Avoided Payments is the amount paid or to be paid simultaneously
with such draw on the Policy, by all Noteholders [$                                                   ]
(the “Avoided Payment Amount”), (ii) each Noteholder with respect to
which the drawing is being made under the Policy has paid or simultaneously
with such draw on the Policy will pay such Avoided Payment, and (iii) the
documents required by the Policy


 

















 


to be delivered in
connection with such Avoided Payment and Avoided Payment Amount have previously
been presented to MBIA or are attached hereto.


 


4.               The amount demanded
is to be paid in immediately available funds by wire transfer to
[                                    ].


 


[For a Notice for Payment
relating to both an Avoided Payment and a Distribution Date, use the following
paragraphs 3, 4, 5 and 6.]


 


3.               This notice relates
to the [insert date] Distribution Date. The amount claimed under the Policy, as
specified to the Indenture Trustee by the Master Servicer, for such
Distribution Date is
$               .
The amount demanded by this notice does not exceed amounts permitted to be
drawn under the Policy.


 


4.               The Indenture
Trustee demands payment of
$               
which is an amount equal to the Deficiency Amount for such Distribution Date.


 


5.               The Indenture
Trustee hereby represents and warrants, based upon information available to it,
that (i) the amount entitled to be drawn under the Policy on the date hereof in
respect of Avoided Payments is the amount paid or to be paid simultaneously
with such draw on the Policy, by all Noteholders
[$               ]
(the “Avoided Payment Amount”), and (ii) the documents required by the
Policy to be delivered in connection with such Avoided Payment and Avoided
Payment Amount have previously been presented to MBIA or are attached hereto.


 


6.               The amount demanded
is to be paid in immediately available funds by wire transfer to
[                   ].


 


Capitalized term used
herein and not otherwise defined herein shall have the meaning assigned to them
in the Policy.


 


Any Person Who Knowingly And With
Intent To Defraud Any Insurance Company Or Other Person Files An Application
For Insurance Or Statement Of Claim Containing Any Materially False
Information, Or Conceals For The Purpose Of Misleading Information Concerning
Any Fact Material Thereof, Commits A Fraudulent Insurance Act, Which Is A
Crime, And Shall Be Subject To A Civil Penalty Not To Exceed Five Thousand
Dollars And The Stated Value Of The Claim For Each Such Violation.


 

















 


IN WITNESS WHEREOF, this
notice has been executed this         
day of
                ,
      .


 


	
   

  	
  Wells Fargo Bank Minnesota, National Association

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  



 

















 


Exhibit
B to Financial Guarantee Insurance Policy, Number 42851


 


Form of
Assignment


 


Reference is made
to the Financial Guarantee Insurance Policy No. 42851, dated November 26,
2003, (the “Policy”) issued by MBIA Insurance Corporation (“MBIA”)
relating to the $750,000,000 Household Automotive Trust 2003-2 1.14% Asset
Backed Notes, Class A-1, 1.56% Asset Backed Notes, Class A-2, 2.31% Asset
Backed Notes, Class A-3, and 3.02% Asset Backed Notes, Class A-4.  Unless otherwise defined herein, capitalized
terms used in this Assignment shall have the meanings assigned thereto in the
Policy as incorporated by reference therein. 
In connection with the Avoided Payment of
[$         ] paid by the
undersigned (the “Holder”) on
[               ]
and the payment by MBIA in respect of such Avoided Payment pursuant to the
Policy, the Holder hereby irrevocably and unconditionally, without recourse,
representation or warranty (except as provided below), sells, assigns,
transfers, conveys and delivers all of such Holder’s rights, title and interest
in and to any rights or claims, whether accrued, contingent or otherwise, which
the Holder now has or may hereafter acquire, against any person relating to,
arising out of or in connection with such Avoided Payment.  The Holder represents and warrants that such
claims and rights are free and clear of any lien or encumbrance created or
incurred by such Holder.


 


	
   

  	
   

  	
   

  
	
   

  	
  Holder(1)

  



 


 












(1)     In the event that the terms
of this form of assignment are reasonably determined to be insufficient solely
as a result of a change of law or applicable rules after the date of the Policy
to fully vest all of the Holder’s right, title and interest in such rights and
claims, the Holder and MBIA shall agree on such other form as is reasonably
necessary to effect such assignment, which assignment shall be without recourse,
representation or warranty except as provided above.