Wachovia Asset Sec Series 2004 - HE1
EXHIBIT 10.2
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>a443_exhibit10-2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>


                         NOTE GUARANTY INSURANCE POLICY


Obligations:   $1,000,000,000                              Policy Number:  44389
               Wachovia Asset Securitization Issuance, LLC
               Asset-Backed Notes, Series 2004-HE1


                  MBIA Insurance  Corporation (the "Insurer"),  in consideration
of the payment of the  premium  and  subject to the terms of this Note  Guaranty
Insurance  Policy  (this  "Policy"),   hereby  unconditionally  and  irrevocably
guarantees  to any Owner that an amount equal to each full and complete  Insured
Payment will be received from the Insurer by U.S. Bank National Association,  or
its successors,  as indenture trustee for the Owners (the "Indenture  Trustee"),
on behalf of the Owners, for distribution by the Indenture Trustee to each Owner
of each  Owner's  proportionate  share of the  Insured  Payment.  The  Insurer's
obligations  hereunder  with respect to a particular  Insured  Payment  shall be
discharged  to the extent  funds  equal to the  applicable  Insured  Payment are
received  by the  Indenture  Trustee,  whether  or not such  funds are  properly
applied by the Indenture  Trustee.  Insured  Payments  shall be made only at the
time set forth in this Policy, and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations,  unless such  acceleration is
at the sole option of the Insurer.

         Notwithstanding  the  foregoing  paragraph,  this Policy does not cover
shortfalls,  if any,  attributable  to the  liability  of the Issuer,  the Trust
Estate  or the  Indenture  Trustee  for  withholding  taxes,  if any  (including
interest and penalties in respect of any such liability), Interest Shortfalls or
Relief Act  Shortfalls.  In  addition,  the Policy  does not cover any  payments
required to be made under the Yield Maintenance Agreement.

         The Insurer will pay any Insured Payment that is a Preference Amount on
the  Business  Day  following  receipt on a Business Day by the Fiscal Agent (as
described  below) of (a) a certified copy of the order requiring the return of a
preference payment,  (b) an opinion of counsel  satisfactory to the Insurer that
such order is final and not subject to appeal, (c) an assignment in such form as
is reasonably required by the Insurer,  irrevocably assigning to the Insurer all
rights and claims of the Owner  relating  to or  arising  under the  Obligations
against the debtor which made such preference  payment or otherwise with respect
to such  preference  payment  and (d)  appropriate  instruments  to  effect  the
appointment  of the  Insurer  as agent for such  Owner in any  legal  proceeding
related  to  such  preference   payment,   such  instruments  being  in  a  form
satisfactory to the Insurer,  provided that if such documents are received after
12:00 noon,  New York City time, on such Business Day, they will be deemed to be
received on the following  Business Day. Such payments shall be disbursed to the
receiver  or  trustee  in  bankruptcy  named in the  final  order  of the  court
exercising  jurisdiction  on behalf  of the Owner and not to any Owner  directly
unless such Owner has returned  principal or interest paid on the Obligations to
such  receiver or trustee in  bankruptcy,  in which case such  payment  shall be
disbursed to such Owner.

         The Insurer will pay any other amount  payable  hereunder no later than
12:00 noon,  New York City time,  on the later of the Payment  Date on which the
related Deficiency Amount is due or the second Business Day following receipt in
New York, New York on a Business Day

<PAGE>

by U.S. Bank Trust National Association, as Fiscal Agent for the Insurer, or any
successor  fiscal agent  appointed by the Insurer  (the  "Fiscal  Agent"),  of a
Notice (as  described  below),  provided  that if such Notice is received  after
12:00 noon,  New York City time,  on such  Business Day, it will be deemed to be
received on the  following  Business  Day.  If any such  Notice  received by the
Fiscal Agent is not in proper form or is otherwise  insufficient for the purpose
of making claim  hereunder,  it shall be deemed not to have been received by the
Fiscal  Agent for  purposes  of this  paragraph,  and the  Insurer or the Fiscal
Agent,  as the case may be, shall  promptly so advise the Indenture  Trustee and
the Indenture Trustee may submit an amended Notice.

         Insured 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 the Insured
Payment less, in respect of Insured Payments related to Preference Amounts,  any
amount held by the Indenture Trustee for the payment of such Insured Payment and
legally available therefor.

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

         Subject to the terms of the Agreement,  the Insurer shall be subrogated
to the rights of each Owner to receive  payments  under the  Obligations  to the
extent of any payment by the Insurer hereunder.

         As used herein, the following terms shall have the following meanings:

         "Agreement"  means  the  Indenture  dated  as of June 24,  2004,  among
Wachovia Asset Securitization  Issuance, LLC 2004-HE1 Trust, as Issuer, Wachovia
Bank,  National  Association,  as Paying Agent,  and the Indenture  Trustee,  as
Indenture Trustee, without regard to any amendment or supplement thereto, unless
such amendment or supplement has been approved in writing by the Insurer.

         "Business  Day" means any day other than (a) a Saturday or a Sunday (b)
a day on which the Insurer is closed or (c) a day on which banking  institutions
in New York  City or in the city in which  the  corporate  trust  office  of the
Indenture  Trustee under the Agreement is located are authorized or obligated by
law or executive order to close.

         "Deficiency Amount" means, with respect to any Payment Date, the sum of
(i)  the  excess,  if any,  of (a)  the  accrued  interest  on the  Obligations,
excluding  any  Relief  Act  Shortfalls,  Interest  Shortfalls  and any  amounts
required to be paid under the Yield Maintenance Agreement for such Payment Date,
at the Note Rate over (b) the amount available for interest distributions on the
Obligations on such Payment Date, including, without limitation, from amounts on
deposit in the Note Payment Account and (ii) the Guaranteed Principal Amount.

         "Final Payment Date" means the Payment Date occurring in June 2034.

         "Guaranteed  Principal  Amount"  means (i) with  respect to any Payment
Date other than the Final  Payment  Date,  the  excess,  if any, of (a) the Note
Balance as of such Payment Date, after taking into account all amounts available
under the  Agreement  to reduce the Note  Balance


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<PAGE>

or to increase the amount on deposit in the Funding Account, over (b) the sum of
(I) the Pool  Balance as of the close of business on the last day of the related
Collection  Period and (II) the amount on deposit in the  Funding  Account as of
the last day of the related  Collection Period or (ii) with respect to the Final
Payment Date, the Note Balance as of the Final Payment Date, after giving effect
to all other  distributions of principal on the Obligations on the Final Payment
Date.

         "Insured  Payment"  means (i) as of any Payment  Date,  any  Deficiency
Amount and (ii) any Preference Amount.

         "Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by facsimile  substantially in the form of Exhibit A attached hereto,
the original of which is subsequently delivered by registered or certified mail,
from the Indenture Trustee specifying the Insured Payment which shall be due and
owing on the applicable Payment Date.

         "Owner" means each Noteholder (as defined in the Agreement) who, on the
applicable  Payment  Date,  is  entitled  under  the  terms  of  the  applicable
Obligations to payment thereunder.

         "Pool Balance" means, with respect to any date, the aggregate Principal
Balance of all of the Mortgage Loans as of such date.

         "Preference Amount" means any amount previously distributed to an Owner
on the Obligations  that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy  pursuant to the United States  Bankruptcy
Code (11  U.S.C.),  as  amended  from  time to time in  accordance  with a final
nonappealable order of a court having competent jurisdiction.

         Capitalized  terms used herein and not otherwise  defined  herein shall
have  the  respective  meanings  set  forth in the  Agreement  as of the date of
execution of this Policy,  without giving effect to any subsequent  amendment to
or modification of the Agreement  unless such amendment or modification has been
approved in writing by the Insurer.

         Any notice  hereunder  or service of process on the Fiscal Agent may be
made at the address  listed below for the Fiscal Agent or such other  address as
the Insurer shall specify in writing to the Indenture Trustee.

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

         THIS  POLICY  IS BEING  ISSUED  UNDER  AND  PURSUANT  TO,  AND SHALL BE
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.

         No defenses,  set-offs and  counterclaims  of any kind are available to
the  Insurer so as to deny  payment of any amount due in respect of this  Policy
will be valid and the Insurer hereby waives and agrees not to assert any and all
such defenses,  set-offs and  counterclaims  so as to deny payment of any amount
due in respect of this Policy,  including,  without limitation,  any such rights
acquired by subrogation, assignment or otherwise.


                                       3
<PAGE>

         The   insurance   provided  by  this  Policy  is  not  covered  by  the
Property/Casualty  Insurance  Security  Fund  specified in Article 76 of the New
York Insurance Law.

         This  Policy is not  cancelable  for any  reason.  The  premium on this
Policy is not refundable for any reason,  including payment,  or provision being
made for payment, prior to maturity of the Obligations.


                                       4
<PAGE>

         IN WITNESS  WHEREOF,  the Insurer has caused this Policy to be executed
and attested this 24th day of June 2004.

                                            MBIA INSURANCE CORPORATION


                                            By /s/ Neil G. Budnick
                                              ----------------------------------
                                              Name : Neil G. Budnick
                                              Title:  President


Attest:


By /s/ Adam M. Carta
  --------------------------------------
  Name:   Adam M. Carta
  Title:  Assistant Secretary




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<PAGE>


                                    EXHIBIT A

                           TO NOTE GUARANTY INSURANCE
                              POLICY NUMBER: 44389

                           NOTICE UNDER NOTE GUARANTY

                         INSURANCE POLICY NUMBER: 44389


U.S. Bank Trust National Association, as Fiscal Agent
 for MBIA Insurance Corporation
15th Floor
61 Broadway
New York, NY  10006
Attention:  Municipal Registrar and
            Paying Agency

MBIA Insurance Corporation
113 King Street
Armonk, NY  10504

         The  undersigned,  a duly  authorized  officer  of U.S.  Bank  National
Association, as indenture trustee (the "Indenture Trustee"), hereby certifies to
U.S. Bank Trust  National  Association  (the "Fiscal  Agent") and MBIA Insurance
Corporation  (the "Insurer"),  with reference to Note Guaranty  Insurance Policy
Number:   44389  (the  "Policy")  issued  by  the  Insurer  in  respect  of  the
$1,000,000,000  Wachovia Asset Securitization  Issuance, LLC Asset-Backed Notes,
Series 2004-HE1 (the "Obligations"), that:

                  (a) the Indenture  Trustee is the indenture  trustee under the
         Indenture  dated as of June  24,  2004,  by and  among  Wachovia  Asset
         Securitization  Issuance, LLC 2004-HE1 Trust, as Issuer, Wachovia Bank,
         National Association, as Paying Agent, and the Indenture Trustee;

                  (b) the  amount  due under  clause  (i) of the  definition  of
         Deficiency Amount for the Payment Date occurring on  __________________
         the "Applicable Payment Date") is $__________________;

                  (c) the  amount due under  clause  (ii) of the  definition  of
         Deficiency Amount for the Applicable Payment Date is $___________ ;

                  (d) the sum of the amounts  listed in  paragraphs  (b) and (c)
         above is $____________ (the "Deficiency Amount");

                  (e) the  amount  of  previously  distributed  payments  on the
         Obligations  that  is  recoverable  and  sought  to be  recovered  as a
         voidable  preference  by  a  trustee  in  bankruptcy  pursuant  to  the
         Bankruptcy  Code in accordance  with a final  nonappealable  order of a
         court having  competent  jurisdiction is $__________  (the  "Preference
         Amount");



<PAGE>

                  (f) the total  Insured  Payment  due is  $____________,  which
         amount  equals  the sum of the  Deficiency  Amount  and the  Preference
         Amount;

                  (g) the Indenture Trustee is making a claim under and pursuant
         to the terms of the Policy for the dollar amount of the Insured Payment
         set forth in (d) above to be applied to the  payment of the  Deficiency
         Amount for the Applicable Payment Date in accordance with the Agreement
         and for the dollar amount of the Insured Payment set forth in (e) above
         to be applied to the payment of any Preference Amount; and

                  (h) the Indenture  Trustee directs that payment of the Insured
         Payment  be made to the  following  account  by bank wire  transfer  of
         federal or other  immediately  available  funds in accordance  with the
         terms of the Policy: [INDENTURE TRUSTEE'S ACCOUNT NUMBER].

         Any  capitalized  term used in this  Notice and not  otherwise  defined
herein shall have the meaning assigned thereto 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 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  And The Stated  Value Of The Claim For Each Such
Violation.

         IN WITNESS  WHEREOF,  the Indenture  Trustee has executed and delivered
this Notice under the Policy as of the ___ day of ________________, ___.

                                            U.S. BANK NATIONAL ASSOCIATION, as
                                              Indenture Trustee


                                            By
                                              ----------------------------------
                                            Name
                                                --------------------------------
                                            Title
                                                 -------------------------------





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