RASC Series 2004-KS7 Trust
EX 10.3 INSURANCE CLASS A-I
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ks7ins2.txt
<DESCRIPTION>EX 10.3 INSURANCE CLASS A-I
<TEXT>
DFinancial Guaranty Insurance Company
125 Park Avenue
New York, New York 10017
(212) 312-3000 (800) 352-0001

SURETY BOND

Form 9140
Page 1 of 4

                                                     Policy Number:  04030022
                                                     Control Number:  0010001


Insured Obligations:
$175,000,000 in aggregate principal amount of Home Equity Mortgage  Asset-Backed
Pass-Through  Certificates,  Series 2004-KS7,  Class A-I-1,  Class A-I-2,  Class
A-I-3, Class A-I-4, Class A-I-5 and Class A-I-6 (collectively, the "Class A-I
Certificates")

Trustee:  JPMorgan Chase Bank

Financial Guaranty Insurance Company  ("Financial  Guaranty"),  a New York stock
insurance  company,  in  consideration  of the right of  Financial  Guaranty  to
receive  monthly  premiums as provided in the  Insurance  Agreement  (as defined
below) and subject to the terms of this Surety Bond, hereby  unconditionally and
irrevocably agrees to pay each Insured Payment (as defined below) to the Trustee
named  above or its  successor,  as  trustee  for the  Holders  of the Class A-I
Certificates,  to the extent set forth in the Pooling and Servicing Agreement(as
defined below).  Capitalized  terms used and not otherwise  defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing  Agreement
as in effect and executed on the date hereof.

The following terms used herein shall have the meanings assigned to them below:

"Class  A-I  Overcollateralization  Deficiency  Amount"  shall  mean  if on  any
Distribution Date, after giving effect to all distributions on that Distribution
Date (without  regard to any  principal  payments to be made under the Policies,
other than payments in respect of Excess Realized Losses),  the aggregate of the
Certificate  Principal  Balances of the Class A Certificates  exceeds the Stated
Principal  Balance of the Mortgage  Loans on that  Distribution  Date, an amount
equal to the excess, if any, of (a) the aggregate  Certificate Principal Balance
of the Class A-I  Certificates  after giving effect to all  distributions  to be
made on that Distribution  Date (without regard to any principal  payments to be
made under the Group I Policy) over (b) the aggregate Stated  Principal  Balance
of the Group I Loans plus the excess, if any, of (x) the aggregate of the Stated
Principal  Balances of the Group II Loans as of that  Distribution Date over (y)
the Certificate Principal Balance of the Class A-II Certificates,  in each case,
after giving effect to all distributions on that Distribution Date.

"Deficiency  Amount"  shall mean With respect to any  Distribution  Date and the
Class A-I  Certificates,  an amount, if any, equal to the sum of (1) the excess,
if any, of the Accrued  Certificate  Interest on the Class A-I  Certificates for
that  Distribution Date over the Group I Available  Distribution  Amount on that
Distribution  Date,  other than any  portion  thereof  consisting  of an Insured
Payment  payable  as  interest  on the Class A-I  Certificates,  (2) any  Excess
Realized  Losses  on  the  Group  I  Loans  and  (3)  (i)  with  respect  to any
Distribution  Date that is not the  Distribution  Date in August 2034, the Class

<PAGE>

A-I Overcollateralization  Deficiency Amount, if any, for that Distribution Date
and (ii) on the  Distribution  Date in August 2034,  the  aggregate  Certificate
Principal  Balance of the Class A-I  Certificates  (after  giving  effect to all
distributions  to be made  thereon  on that  Distribution  Date  other  than any
portion  thereof  consisting of an Insured  Payment  payable as principal on the
Class A-I Certificates).

 "Insured  Payment"  shall mean with respect to any  Distribution  Date, (i) any
Deficiency  Amount and (ii) any  Preference  Amount (as  defined in this  Surety
Bond).

Financial  Guaranty  will pay a Deficiency  Amount with respect to the Class A-I
Certificates  by 12:00 noon (New York City time) in immediately  available funds
to the Trustee on the later of (i) the second  Business Day following the day on
which Financial  Guaranty shall have Received Notice that a Deficiency Amount is
due in respect of the Class A-I Certificates  and (ii) the Distribution  Date on
which the related  Deficiency  Amount is payable to the Holders of the Class A-I
Certificates  pursuant to the Pooling and Servicing Agreement,  for disbursement
to the  Holders  of the  Class  A-I  Certificates  in the same  manner  as other
payments with respect to the Class A-I Certificates are required to be made.

Upon such payment, Financial Guaranty shall be fully subrogated to the rights of
the  Holders  of the Class  A-I  Certificates  to  receive  the  amount so paid.
Financial  Guaranty's  obligations  with  respect to the Class A-I  Certificates
hereunder  with respect to each  Distribution  Date shall be  discharged  to the
extent funds  consisting  of the related  Deficiency  Amount are received by the
Trustee on behalf of the  Holders of the Class A-I  Certificates  for payment to
such  Holders,  as provided in the Pooling and  Servicing  Agreement and herein,
whether or not such funds are properly applied by the Trustee.

If any  portion  or all of  any  amount  that  is  insured  hereunder  that  was
previously  distributed to a Holder of Class A-I Certificates is recoverable and
recovered  from such Holder as a voidable  preference by a trustee in bankruptcy
pursuant to the U.S. Bankruptcy Code, pursuant to a final  non-appealable  order
of a court  exercising  proper  jurisdiction  (a "Final Order") (such  recovered
amount,  a "Preference  Amount"),  Financial  Guaranty will pay on the guarantee
described in the first paragraph hereof, an amount equal to each such Preference
Amount by 12:00 noon on the next Distribution Date after the second Business Day
following  Receipt by  Financial  Guaranty of (w) a certified  copy of the Final
Order,  (x) an opinion of counsel  satisfactory to Financial  Guaranty that such
order is final and not subject to appeal, (y) an assignment,  in form reasonably
satisfactory to Financial Guaranty,  irrevocably assigning to Financial Guaranty
all  rights  and  claims  of the  Trustee  and/or  such  Holder of the Class A-I
Certificates  relating to or arising under such Preference Amount and appointing

<PAGE>

Financial  Guaranty as the agent of the Trustee and/or such Holder in respect of
such Preference Amount, and (z) a Notice appropriately completed and executed by
the Trustee or such Holder,  as the case may be. Such  payment  shall be made to
the receiver,  conservator,  debtor-in-possession or trustee in bankruptcy named
in  the  Final  Order  and  not to the  Trustee  or  Holder  of  the  Class  A-I
Certificates directly (unless the Holder has previously paid such amount to such
receiver, conservator, debtor-in-possession or trustee named in such Final Order
in which case  payment  shall be made to the  Trustee  for  distribution  to the
Holder  upon  proof  of  such  payment  reasonably   satisfactory  to  Financial
Guaranty).  Notwithstanding the foregoing,  in no event shall Financial Guaranty
be (i)  required  to make any  payment  under this Surety Bond in respect of any
Preference  Amount to the extent such Preference  Amount is comprised of amounts
previously paid by Financial Guaranty  hereunder,  or (ii) obligated to make any
payment in respect of any Preference Amount,  which payment represents a payment
of the  principal  amount  of any  Class  A-I  Certificates,  prior  to the time
Financial  Guaranty  otherwise  would  have been  required  to make a payment in
respect  of such  principal,  in which  case  Financial  Guaranty  shall pay the
balance of the  Preference  Amount  when such amount  otherwise  would have been
required.

All payments  made by  Financial  Guaranty  hereunder  in respect of  Preference
Amounts will be made with Financial Guaranty's own funds.

This Surety Bond is non-cancelable for any reason,  including  nonpayment of any
premium.  The  premium on this  Surety  Bond is not  refundable  for any reason,
including the payment of any Class A-I  Certificates  prior to their  respective
maturities.  This Surety Bond shall expire and  terminate  without any action on
the part of Financial Guaranty or any other Person on the date that is the later
of (i) the date  that is one year and one day  following  the date on which  the
Class A-I  Certificates  shall have been paid in full and (ii) if any proceeding
referenced in the second  preceding  paragraph has been commenced on or prior to
the date specified in clause (i) above, the 30th day after the entry of a final,
non-appealable order in resolution or settlement of such proceeding.

To the fullest extent  permitted by applicable  law,  Financial  Guaranty hereby
waives,  solely for the  benefit of Holders of the Class A-I  Certificates,  all
defenses of any kind  (including,  without  limitation,  the defense of fraud in
inducement  or fact,  any  defense  based on any duty  claimed to arise from the
doctrine of "utmost good faith" or any similar or related  doctrine or any other
circumstances  that would have the effect of discharging a surety,  guarantor or
any other person in law or in equity) that Financial  Guaranty  otherwise  might
have  asserted as a defense to its  obligation  to pay in full any amounts  that
have become due and payable in accordance  with the terms and conditions of this
Surety Bond. Nothing in this paragraph, however, shall be deemed to constitute a
waiver of any rights, remedies,  claims or counterclaims that Financial Guaranty
may have  with  respect  to  Residential  Funding  Corporation,  or any of their
affiliates, whether acquired by subrogation, assignment or otherwise.

A monthly Premium shall be due and payable in arrears as provided in the Pooling
and Servicing Agreement and the Insurance Agreement.
<PAGE>

This Surety Bond is subject to and shall be governed by the laws of the State of
New York.  The proper  venue for any action or  proceeding  on this  Surety Bond
shall be the County of New York,  State of New York.  The insurance  provided by
this  Surety  Bond is not  covered by the New York  Property/Casualty  Insurance
Security Fund (New York Insurance Code, Article 76).

"Notice"  means a written notice in the form of Exhibit A to this Surety Bond by
registered or certified mail or telephonic or telegraphic  notice,  subsequently
confirmed by written notice delivered via telecopy,  telex or hand delivery from
the Trustee to Financial Guaranty  specifying the information set forth therein.
"Holder" means, as to a particular Class A-I Certificate, the person, other than
the Depositor,  the Master  Servicer or any  subservicer  retained by the Master
Servicer who, on the applicable  Distribution  Date, is entitled under the terms
of such Class A-I  Certificate  to a payment  thereon.  "Pooling  and  Servicing
Agreement" means the Pooling and Servicing  Agreement  relating to the Class A-I
Certificates by and among,  the Depositor,  the Master Servicer and the Trustee,
dated  as of July  1,  2004.  "Insurance  Agreement"  means  the  Insurance  and
Indemnity  Agreement,  among Financial  Guaranty,  Residential  Asset Securities
Corporation,  Residential Funding Corporation and the Trustee,  dated as of July
29, 2004. The term "Received"  means actual  delivery to Financial  Guaranty and
occurs on the day  delivered if delivered  before 12:00 p.m. New York City time,
on a Business Day, or on the next Business day if delivered either on a day that
is not a Business Day or after 12:00 p.m., New York City time.

In the event that  payments  under any Class A-I  Certificate  are  accelerated,
nothing herein contained shall obligate  Financial  Guaranty to make any payment
of principal or interest on such Class A-I Certificate on an accelerated  basis,
unless such acceleration of payment by Financial  Guaranty is at the sole option
of Financial  Guaranty;  it being understood that a payment shortfall in respect
of the  retirement  of any Class  A-I  Certificate  by  reason  of the  optional
termination  of either group of Mortgage  Loans  pursuant to Section 9.01 of the
Pooling  and  Servicing  Agreement  does  not  constitute  acceleration  for the
purposes hereof.

IN WITNESS WHEREOF, Financial Guaranty has caused this Surety Bond to be affixed
with its  corporate  seal and to be signed  by its duly  authorized  officer  in
facsimile to become  effective and binding upon Financial  Guaranty by virtue of
the countersignature of its duly authorized representative.



President                                Authorized Representative

Effective Date:  July  29, 2004



<PAGE>


                                    EXHIBIT A

                       NOTICE OF NONPAYMENT AND DEMAND FOR
                                 INSURED PAYMENT

To:            Financial Guaranty Insurance Company
               125 Park Avenue
               New York, New York 10017
               (212) 312-3000
               Attention:    General Counsel

               Telephone: (212) 312-3000
               Telecopier:  (212) 312-3220

Re:
              $175,000,000 in aggregate principal amount of Home Equity Mortgage
              Asset-Backed  Pass-Through  Certificates,  Series 2004-RZ2,  Class
              A-I-1,  Class  A-I-2,  Class A-I-3,  Class A-I-4,  Class A-I-5 and
              Class A-I-6 (collectively, the "Class A-I
              Certificates")

               Policy No:  04030022 (the "Surety Bond")

Distribution Date:    ________________

We refer to that certain  Pooling and Servicing  Agreement,  dated as of July 1,
2004,  by  and  among  Residential  Asset  Securities  Corporation,   Depositor,
Residential  Funding  Corporation,  Master  Servicer and JPMorgan Chase Bank, as
Trustee  (the  "Pooling  and  Servicing  Agreement"),   relating  to  the  above
referenced Class A-I  Certificates.  All capitalized terms not otherwise defined
herein or in the Surety Bond shall have the same respective meanings assigned to
such terms in the Pooling and Servicing Agreement.

(a)     The Trustee has  determined  under the Pooling and  Servicing  Agreement
        that in respect of the Distribution Date:

        (1)    The Deficiency Amount on the Class A-I Certificates in respect of
               the  Distribution  Date  that  is  due  to  be  received  on  the
               Distribution Date specified above under the Pooling and Servicing
               Agreement, is equal to $_____________, consisting of

               (A)    $  ___________  in  respect of  interest  on the Class A-I
                      Certificates, which is calculated as the amount by which:

                      (i)    $____________, constituting the Accrued Certificate
                             Interest  on the  Class  A-I  Certificates  for the
                             Distribution Date; exceeds

<PAGE>

                      (ii)   $___________,  representing  the Group I  Available
                             Distribution Amount on the Distribution Date, other
                             than any portion  thereof  consisting of an Insured
                             Payment payable as interest on the Class

               A-I Certificates; plus

               (B)  $_____________in  respect of Excess  Realized  Losses on the
               Group I Loans; plus

               (C)  $______________  in  respect of  principal  of the Class A-I
               Certificates which with respect to (i) any Distribution Date that
               is not the  Distribution  Date in  August  2034,  the  Class  A-I
               Overcollateralization   Deficiency   Amount,  if  any,  for  that
               Distribution  Date and (ii) on the  Distribution  Date in  August
               2034, the aggregate  Certificate  Principal  Balance of the Class
               A-I Certificates  (after giving effect to all distributions to be
               made  thereon on that  Distribution  Date other than any  portion
               thereof  consisting of an Insured Payment payable as principal on
               the Class A-I Certificates).

[In addition,  attached hereto is a copy of the Final Order in connection with a
Preference  Amount in the amount set forth therein,  together with an assignment
of rights  and  appointment  of agent.  The amount of the  Preference  Amount is
$______________.]

        Please be advised that,  accordingly,  an Insured Payment exists for the
Distribution  Date identified above for the Class A-I Certificates and, pursuant
to the Pooling and Servicing Agreement,  this statement constitutes a notice for
payment of an Insured Payment by the Insurer in the amount of $__________.  This
Insured Payment is payable by the Insurer under the Surety Bond.

(b) No payment  claimed  hereunder is in excess of the amount  payable under the
Surety Bond.

          The  amount  requested  in this  Notice  should  be paid to:  [Payment
Instructions]

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 thereto, commits a fraudulent insurance
act,  which is a crime,  and shall  also be subject  to a civil  penalty  not to
exceed Five Thousand  Dollars  ($5,000.00) and the stated value of the claim for
each such violation.

        IN WITNESS  WHEREOF,  the Trustee has executed and delivered this Notice
of   Nonpayment   and   Demand   for   Insured   Payments   this  _____  day  of
______________________.

                                    ----------------------------------------,
                                    as Trustee

                                    By:     ___________________________________

                                    Title:  ___________________________________




<PAGE>

</TEXT>
</DOCUMENT>
