FHAMS
      2007-AA3

     

    MORTGAGE
      LOAN PURCHASE AGREEMENT

     

    THIS
      MORTGAGE LOAN PURCHASE AGREEMENT dated as of September 27, 2007 by and between
      FIRST HORIZON HOME LOANS, a division of First Tennessee Bank National
      Association, a national banking association (the “Seller”), and FIRST HORIZON
      ASSET SECURITIES INC., a Delaware corporation (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.

    


    Balloon
      Loan:
      A
      Mortgage Loan with an assumed amortization term of forty years, but providing
      for a balloon payment of all outstanding principal and interest to be made
      at
      the end of a specified term of thirty years that is shorter than the assumed
      amortization term.

     

    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:
      September 27, 2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 September 27, 2007 by and
      among The Bank of New York, as trustee, First Horizon, as master servicer,
      and
      the Custodian.

     

    Cut-Off
      Date:
      September 1, 2007.

     

    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.

     

    
      
        
        

      

      
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    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.

     

    First
      Horizon:
      First
      Horizon Home Loans, a division of First Tennessee Bank National Association,
      a
      national banking association.

     

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

     

    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.

     

    
      
        
        

      

      
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    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.

     

    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:
      $186,898,202.16

     

    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 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, as transferor and subservicer, and First
      Tennessee Mortgage Services, Inc., as transferee and servicer.

     

    
      
        
        

      

      
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    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.

     

    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.”

     

    
      
        
        

      

      
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    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

     

    (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;

            


    

     

    
      
        
        

      

      
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              (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

            


    

     

    
      	 	
              (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.

     

    
      
        
        

      

      
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    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.


     

    
      
        
        

      

      
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    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 national banking association and is validly
      existing and in good standing under the laws of the United States of America
      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.

     

    (2) The
      Seller has the requisite 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 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.

     

    
      
        
        

      

      
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    (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.

     

    
      	 	
              (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 pool 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. 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

       

    

    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.

     

    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.

    
       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

         

      

    

    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

            


    

     

    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
      27th
      day of
      September, 2007.

     

    
      	
              FIRST
                HORIZON HOME LOANS, a division of 

              First
                Tennessee Bank National Association, as Seller

            
	 	 
	
              By:

            	  

	 	
              Terry
                L. McCoy

            
	 	
              Executive
                Vice President

            
	 	 
	
              FIRST
                HORIZON ASSET SECURITIES INC., as Purchaser

            
	 	 
	
              By:

            	  

	 	
              Alfred
                Chang

            
	 	
              Vice
                President

            


    

    
       

      Mortgage
        Loan Purchase Agreement - 2007-AA3 Signature Page

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

     

    [Available
      Upon Request From Trustee]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    SCHEDULE
      B

     

    Representations
      and Warranties as to the Mortgage Loans

     

    First
      Horizon Home Loans, a division of First Tennessee Bank National Association
      (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 September
      27,
      2007 (the “MLPA”), between First Horizon Home Loans, 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 September 1, 2007, between First Horizon Asset Securities
      Inc., as depositor, First Horizon Home Loans, 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, other than the Balloon 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 had stated terms
                to
                maturity of 20 to 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)

            	
              Approximately
                57.54% of the Mortgage Loans 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 was originated on or after May 8,
                2006.

            


    

     

    
      	 	
              (30)

            	
              The
                latest stated maturity date of any Mortgage Loan is October 1, 2037,
                and
                the earliest is September 1, 2027.

            


    

     

    
      	 	
              (31)

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

            


    

     

    
      	 	
              (32)

            	
              Substantially
                all of the Mortgage Loans had a Loan-to-Value Ratio at origination
                of not
                more than 100%. 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 version of the Standard
                & Poor’s LEVELSâ
                Glossary, 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