RASC Series 2004-KS7 Trust
EX 10.2 ASSIGNMENT AND ASSUMPTION
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ks7aa.txt
<DESCRIPTION>EX 10.2 ASSIGNMENT AND ASSUMPTION
<TEXT>
                                 EXECUTION COPY

                       ASSIGNMENT AND ASSUMPTION AGREEMENT


        ASSIGNMENT AND ASSUMPTION AGREEMENT,  dated as of July 29, 2004, between
Residential Funding Corporation,  a Delaware corporation ("RFC") and Residential
Asset Securities Corporation, a Delaware corporation (the "Company").

                                    Recitals

        A. RFC has  entered  into seller  contracts  ("Seller  Contracts")  with
certain sellers and servicers.

        B. The Company  wishes to purchase from RFC certain  Mortgage  Loans (as
hereinafter  defined)  originated  pursuant to the Seller Contracts with respect
thereto.

        C. The Company,  RFC, as master  servicer,  and JPMorgan  Chase Bank, as
trustee (the  "Trustee"),  are entering into a Pooling and  Servicing  Agreement
dated as of July 1, 2004 (the  "Pooling and Servicing  Agreement"),  pursuant to
which the Trust proposes to issue Home Equity Mortgage Asset-Backed Pass-Through
Certificates, Series 2004-KS7 (the "Certificates") consisting of fifteen classes
designated as Class A-I-1,  Class A-I-2,  Class A-I-3, Class A-I-4, Class A-I-5,
Class A-I-6, Class A-II-A, Class A-II-B1,  Class A-II-B2,  Class A-II-B3,  Class
SB-I, Class SB-II, Class R-I, Class R-II and Class R-III representing beneficial
ownership  interests solely in a trust fund consisting  primarily of a pool that
will be  divided  into (i) the fixed  rate  one-to  four-family  mortgage  loans
identified on Exhibit F-1 to the Pooling and Servicing  Agreement  (the "Group I
Loans"),  (ii) the adjustable rate one- to four-family mortgage loans identified
on Exhibit F-2 to the Pooling and Servicing  Agreement  (the "Group II-A Loans")
and (iii) the adjustable rate one- to four-family  mortgage loans  identified on
Exhibit F-3 to the  Pooling and  Servicing  Agreement  (the "Group II-B  Loans,"
together with the Group II-A Loans,  the "Group II Loans," and together with the
Group I Loans and Group II-A Loans, the "Mortgage Loans").

        D. In connection  with the purchase of the Mortgage  Loans,  the Company
will assign to RFC the Class SB-I, Class SB-II,  Class R-I, Class R-II and Class
R-III Certificates (collectively, the "Retained Certificates"). The Class A-I-1,
Class A-I-2,  Class A-I-3,  Class A-I-4, Class A-I-5, Class A-I-6, Class A-II-A,
Class  A-II-B1,  Class  A-II-B2 and Class A-II-B3  Certificates  were offered to
investors  pursuant  to  a  Prospectus  Supplement  dated  July  26,  2004  (the
"Prospectus Supplement").

        E. In  connection  with  the  purchase  of the  Mortgage  Loans  and the
issuance of the  Certificates,  RFC wishes to make certain  representations  and
warranties  to the Company and to assign  certain of its rights under the Seller
Contracts  to the  Company,  and the Company  wishes to assume  certain of RFC's
obligations under the Seller Contracts.

        F. The Company and RFC intend that the  conveyance by RFC to the Company
of all its right,  title and interest in and to the Mortgage  Loans  pursuant to
this Agreement shall constitute a purchase and sale and not a loan.



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        NOW THEREFORE,  in consideration of the recitals and the mutual promises
herein and other good and valuable consideration, the parties agree as follows:

1. All  capitalized  terms used but not defined  herein  shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

2.  Concurrently  with the execution and delivery hereof,  RFC hereby assigns to
the Company without recourse all of its right,  title and interest in and to the
Mortgage Loans, including all interest and principal received on or with respect
to the Mortgage  Loans after the Cut-off Date (other than  payments of principal
and interest due on the Mortgage Loans in July 2004). In  consideration  of such
assignment,  RFC will receive from the Company, in immediately  available funds,
an amount equal to $848,266,554.24 and the Retained Certificates.  In connection
with such assignment and at the Company's direction,  RFC has in respect of each
Mortgage  Loan  endorsed  the related  Mortgage  Note (other than any  Destroyed
Mortgage Note, hereinafter defined) to the order of the Trustee and delivered an
assignment  of  mortgage  in  recordable  form to the  Trustee or its  agent.  A
"Destroyed  Mortgage  Note"  means a  Mortgage  Note the  original  of which was
permanently lost or destroyed.

        The Company and RFC intend that the  conveyance by RFC to the Company of
all its right,  title and interest in and to the Mortgage Loans pursuant to this
Section 2 shall be, and be construed as, a sale of the Mortgage  Loans by RFC to
the Company. It is, further, not intended that such conveyance be deemed to be a
pledge of the  Mortgage  Loans by RFC to the  Company  to secure a debt or other
obligation of RFC.  Nonetheless  (a) this Agreement is intended to be and hereby
is deemed to be a security  agreement  within the meaning of Articles 8 and 9 of
the Minnesota  Uniform  Commercial  Code and the Uniform  Commercial Code of any
other applicable  jurisdiction;  (b) the conveyance provided for in this Section
shall be deemed to be a grant by RFC to the  Company of a security  interest  in
all of RFC's right  (including  the power to convey  title  thereto),  title and
interest,  whether now owned or hereafter  acquired,  in and to (A) the Mortgage
Loans,  including  the Mortgage  Notes,  the  Mortgages,  any related  insurance
policies and all other documents in the related  Mortgage Files, (B) all amounts
payable  pursuant to the Mortgage Loans in accordance with the terms thereof and
(C) any and all general  intangibles  consisting of, arising from or relating to
any  of  the  foregoing,  and  all  proceeds  of the  conversion,  voluntary  or
involuntary,  of the  foregoing  into  cash,  instruments,  securities  or other
property,  including,  without limitation, all amounts from time to time held or
invested in the  Certificate  Account or the Custodial  Account,  whether in the
form of cash,  instruments,  securities or other property; (c) the possession by
the Trustee,  the Custodian or any other agent of the Trustee of Mortgage  Notes
or such other  items of  property  as  constitute  instruments,  money,  payment
intangibles,  negotiable documents,  goods, deposit accounts, letters of credit,
advices of credit, investment property, certificated securities or chattel paper
shall be deemed to be  "possession  by the secured  party," or  possession  by a
purchaser  or a  person  designated  by such  secured  party,  for  purposes  of
perfecting the security interest  pursuant to the Minnesota  Uniform  Commercial
Code  and the  Uniform  Commercial  Code of any  other  applicable  jurisdiction
(including without limitation, Sections 8-106, 9-313 and 9-106 thereof); and (d)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property,  shall be deemed notifications
to,   or   acknowledgments,    receipts   or   confirmations   from,   financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting  such security  interest under  applicable  law. RFC shall, to the
extent  consistent with this Agreement,  take such reasonable  actions as may be
necessary to ensure  that,  if this  Agreement  were deemed to create a security
interest in the Mortgage  Loans and the other  property  described  above,  such


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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 this Agreement.  Without limiting the generality of the foregoing,  RFC shall
prepare  and  deliver to the  Company  not less than 15 days prior to any filing
date, and the Company shall file, or shall cause to be filed,  at the expense of
RFC, all filings necessary to maintain the effectiveness of any original filings
necessary under the Uniform  Commercial Code as in effect in any jurisdiction to
perfect  the  Company's  security  interest  in or  lien on the  Mortgage  Loans
including  without  limitation (x) continuation  statements,  and (y) such other
statements as may be occasioned by (1) any change of name of RFC or the Company,
(2) any change of location of the state of  formation,  place of business or the
chief executive office of RFC, or (3) any transfer of any interest of RFC in any
Mortgage Loan.

3.  Concurrently  with the execution  and delivery  hereof,  the Company  hereby
assigns to RFC without  recourse all of its right,  title and interest in and to
the Retained  Certificates  as part of the  consideration  payable to RFC by the
Company pursuant to this Agreement.

4. RFC  represents  and warrants to the Company,  with respect to each  Mortgage
Loan that on the date of execution hereof (or, if otherwise  specified below, as
of the date so specified),

(i) Immediately prior to the delivery of the Mortgage Loans to the Company,  RFC
had good title to, and was the sole owner of, each  Mortgage Loan free and clear
of any pledge, lien or security interest (other than (a) rights to servicing and
related compensation, and (b) any senior lien relating to a Mortgage Loan listed
on Schedule A attached  hereto (the "Junior Lien  Mortgage  Loans") and had full
right and  authority  to sell and assign the  Mortgage  Loans  pursuant  to this
Agreement.

(ii) The proceeds of the Mortgage  Loan have been fully  disbursed,  there is no
requirement  for future advances  thereunder and any and all  requirements as to
completion of any on-site or off-site  improvements  and as to  disbursements of
any escrow  funds  therefor  (including  any escrow  funds held to make  Monthly
Payments pending  completion of such  improvements) have been complied with. All
costs, fees and expenses  incurred in making,  closing or recording the Mortgage
Loans were paid.

(iii) The Mortgagor  (including any party secondarily  liable under the Mortgage
File) has no right of set-off,  defense,  counterclaim or right of rescission as
to any document in the Mortgage File except as may be provided  under the Relief
Act.

(iv) RFC and any other  originator,  servicer  or other  previous  owner of each
Mortgage Loan has obtained all licenses and effected all registrations  required
under all  applicable  local,  state and federal laws,  regulations  and orders,
including without limitation truth in lending and disclosure laws,  necessary to
own or originate  the Mortgage  Loans (the failure to obtain such licenses or to
comply with such laws,  regulations  and orders would make such  Mortgage  Loans
void or voidable).

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(v) A policy of title  insurance,  in the form and  amount  that is in  material
compliance  with the  Program  Guide,  was  effective  as of the closing of each
Mortgage Loan, is valid and binding, and remains in full force and effect except
(a) with  respect  to 0.1% of the  Group I Loans and 0.1% of the Group II Loans,
for which  only a title  search  was  conducted,  and (b)  Mortgaged  Properties
located in the State of Iowa where an attorney's  certificate  has been provided
in accordance  with the Program Guide. No claims have been made under such title
insurance policy and no holder of the related mortgage,  including RFC, has done
or  omitted  to do  anything  which  would  impair  the  coverage  of such title
insurance policy.

(vi) Each Mortgage Loan is a valid and enforceable first lien (or in the case of
the Junior Lien Mortgage Loans,  junior lien) on the Mortgaged  Property subject
only  to  (1)  the  lien  of  nondelinquent  current  real  property  taxes  and
assessments,  (2)  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  acceptable  to mortgage
lending institutions  generally or specifically  reflected in the appraisal made
in connection with the  origination of the related  Mortgage Loan, and (3) other
matters to which like  properties  are commonly  subject that do not  materially
interfere  with the  benefits  of the  security  intended to be provided by such
Mortgage.

(vii) All improvements  which were considered in determining the Appraised Value
of the  Mortgaged  Property lie wholly  within the  boundaries  and the building
restriction  lines of the Mortgaged  Premises,  or the policy of title insurance
affirmatively  insures  against  loss or  damage  by  reason  of any  violation,
variation,  encroachment  or adverse  circumstance  that either is  disclosed or
would have been disclosed by an accurate survey.

(viii) There are no delinquent  tax or delinquent  assessment  liens against the
related  Mortgaged  Property,  and there are no  mechanic's  liens or claims for
work,  labor or material or any other liens  affecting such  Mortgaged  Property
which are or may be a lien  prior to, or equal  with,  the lien of the  Mortgage
assigned to RFC,  except  those liens that are insured  against by the policy of
title insurance and described in (v) above.

(ix) Each  Mortgaged  Property is free of material  damage and is in good repair
and no notice of condemnation has been given with respect thereto.

(x) The  improvements  upon the Mortgaged  Property are insured  against loss by
fire and other  hazards  as  required  by the  Program  Guide,  including  flood
insurance  if  required  under the  National  Flood  Insurance  Act of 1968,  as
amended. The Mortgage requires the Mortgagor to maintain such casualty insurance
at the Mortgagor's  expense, and on the Mortgagor's failure to do so, authorizes
the  holder of the  Mortgage  to  obtain  and  maintain  such  insurance  at the
Mortgagor's expense and to seek reimbursement therefore from the Mortgagor.

(xi) The appraisal was made by an appraiser who meets the minimum qualifications
for appraisers as specified in the Program Guide.

(xii) Each  Mortgage Note and Mortgage  constitutes  a legal,  valid and binding
obligation of the Mortgagor  enforceable in accordance  with its terms except as
limited by bankruptcy,  insolvency or other similar laws affecting generally the
enforcement of creditors' rights.

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<PAGE>

(xiii) Each Mortgage Loan is covered by a standard hazard insurance policy.

(xiv) None of the Mortgage Loans are secured by a leasehold estate.

(xv) The  information  set forth on the Mortgage  Loan  Schedule with respect to
each Mortgage  Loan is true and correct in all material  respects as of the date
or dates which such information is furnished.

(xvi) As of the Cut-off  Date,  none of the  Mortgage  Loans are  Delinquent  in
payment of principal  and interest by 30 or more days.  For the purposes of this
representation a Mortgage Loan is considered  Delinquent if a Subservicer or the
Master  Servicer has made any  advances on the Mortgage  Loan that have not been
reimbursed out of payments by the mortgagor or on the mortgagor's  behalf from a
source other than a Subservicer,  a Seller, the Master Servicer or an affiliated
entity of either.

(xvii)  Approximately  0.1% of the  Group I Loans and none of the Group II Loans
with  Loan-to-Value  Ratios,  or combined  Loan-to-Value  Ratios with respect to
Junior  Lien  Loans,   at  origination  in  excess  of  80%  are  insured  by  a
borrower-paid, primary mortgage insurance policy.

(xviii) The weighted average  Loan-to-Value Ratio with respect to Group I Loans,
the Group  II-A  Loans and the Group  II-B  Loans,  in each case by  outstanding
principal balance at origination, is 80.39%, 82.50% and 82.49%, respectively.

(xix) No more than approximately 0.6%, 0.4% and 0.4% of the Group I Loans, Group
II-A Loans and the Group II-B Loans,  respectively,  in each case by outstanding
principal  balance as of the Cut-off Date,  are located in any one zip code area
in   Massachusetts,   Virginia  and   Maryland,   respectively.   No  more  than
approximately 0.4%, 0.3% and 0.3% of the Group I Loans, Group II-A Loans and the
Group II-B Loans, respectively, in each case by outstanding principal balance as
of  the  Cut-off  Date,  are  located  in any  one  zip  code  area  outside  of
Massachusetts, Virginia and Maryland, respectively.

(xx) The Mortgage  Rates on the Group I Loans are fixed.  The Mortgage  Rates on
the  Group II Loans  are  adjustable.  All of the  Group  II Loans  will  adjust
semi-annually   based  on  Six-Month   LIBOR  (as  defined  in  the   Prospectus
Supplement).  Each Group II Loan will adjust on the Adjustment Date specified in
the related  Mortgage  Note to a rate equal to the sum  (rounded as described in
the  Prospectus  Supplement)  of the related Index  described in the  Prospectus
Supplement and the Note Margin set forth in the related  Mortgage Note,  subject
to the  limitations  described in the Prospectus  Supplement,  and each Mortgage
Loan has an original  term to maturity  from the date on which the first monthly
payment is due of not more than approximately 30 years. On each Adjustment Date,
the  Mortgage  Rate on each Group II Loan will be  adjusted to equal the related
Index plus the related Gross  Margin,  subject in each case to the Periodic Rate
Cap, the Mortgage Rate and the Minimum  Mortgage Rate. The amount of the monthly


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<PAGE>

payment  on each  Group II Loan will be  adjusted  on the first day of the month
following  the month in which the  Adjustment  Date  occurs to equal the  amount
necessary to pay interest at the then-applicable Mortgage Rate to fully amortize
the outstanding  principal  balance of the Group II Loan over its remaining term
to stated maturity. No Mortgage Loan is subject to negative amortization.

(xxi) 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  Loan to the
trustee  under the deed of trust,  except in  connection  with a trustee's  sale
after default by the Mortgagor.

(xxii)  Approximately 4.77%, 7.54% and 6.90% of the Mortgaged Properties related
to the Group I Loans,  Group II-A Loans and the Group II-B  Loans,  respectively
(in each case by  outstanding  principal  balance as of the Cut-off  Date),  are
units in detached  planned unit  developments.  Approximately  4.23%,  2.77% and
3.96% of the Mortgaged Properties related to the Group I Loans, Group II-A Loans
and the Group II-B Loans,  respectively  (in each case by outstanding  principal
balance  as  of  the  Cut-off  Date),   are  units  in  attached   planned  unit
developments.  Approximately  1.10%, 1.12% and 1.33% of the Mortgaged Properties
related  to the  Group I Loans,  Group  II-A  Loans and the  Group  II-B  Loans,
respectively  (in each case by outstanding  principal  balance as of the Cut-off
Date),  are units in  townhouses.  Approximately  4.77%,  2.54% and 1.68% of the
Mortgaged  Properties  related  to the Group I Loans,  Group  II-A Loans and the
Group II-B Loans, respectively (in each case by outstanding principal balance as
of the Cut-off Date) are units in  manufactured  housing.  Approximately  1.74%,
3.09% and 3.01% of the Mortgaged  Properties related to the Group I Loans, Group
II-A Loans and the Group II-B Loans,  respectively  (in each case by outstanding
principal balance as of the Cut-off Date), are condominium units. Each Mortgaged
Property is suitable for year-round occupancy.

(xxiii)  Approximately  93.17%,  94.62% and 94.56% of the  Mortgaged  Properties
related  to the  Group I Loans,  Group  II-A  Loans and the  Group  II-B  Loans,
respectively  (in each case by outstanding  principal  balance as of the Cut-off
Date) are secured by the owner's primary residence.  Approximately  0.58%, 1.08%
and 0.92% of the Mortgaged  Properties  related to the Group I Loans, Group II-A
Loans and the  Group  II-B  Loans,  respectively  (in each  case by  outstanding
principal  balance as of the Cut-off Date) are secured by the owner's  second or
vacation  residence.  Approximately  6.25%,  4.29%  and  4.52% of the  Mortgaged
Properties  related  to the Group I Loans,  Group  II-A Loans and the Group II-B
Loans,  respectively  (in each case by outstanding  principal  balance as of the
Cut-off Date) are secured by a non-owner occupied residence.

(xxiv)  Approximately  79.02%,  78.57%  and 79.94% of the  Mortgaged  Properties
related  to the  Group I Loans,  Group  II-A  Loans and the  Group  II-B  Loans,
respectively  (in each case by outstanding  principal  balance as of the Cut-off
Date), are secured by detached one-family dwelling units.  Approximately  4.38%,
4.27% and 3.18% of the Mortgaged  Properties related to the Group I Loans, Group
II-A Loans and the Group II-B Loans,  respectively  (in each case by outstanding
principal  balance as of the Cut-off  Date),  are secured by two- to four-family
dwelling units.

(xxv)  The  average  outstanding  principal  balance  of the  Group I  Loans  at
origination was approximately $99,415. The average outstanding principal balance
of the Group II-A Loans at origination was approximately  $136,553.  The average
outstanding  principal  balance  of the  Group  II-B  Loans at  origination  was
approximately  $136,446.  No Group I Loan, Group II-A Loan or Group II-B Loan at
origination had a principal balance of less than $10,000, $20,000 and $28,400 or
more than $550,000, $363,750 and $565,000, respectively.

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(xxvi) As of the Cut-off Date,  all Mortgage Rate  adjustments on the Group II-A
Loans and on the Group II-B Loans that have reached an Adjustment Date have been
done in accordance with the terms of the related Mortgage Note.

(xxvii) Any escrow  arrangements  established  with respect to any Mortgage Loan
are in compliance with all applicable  local,  state and federal laws and are in
compliance with the terms of the related Mortgage Note.

(xxviii) Except as otherwise specifically set forth herein, there is no default,
breach,  violation or event of acceleration  existing under any Mortgage Note or
Mortgage and no event  which,  with notice and  expiration  of any grace or cure
period, would constitute a default,  breach, violation or event of acceleration,
and no such default,  breach, violation or event of acceleration has been waived
by RFC or by any other entity  involved in  originating  or servicing a Mortgage
Loan.

(xxix) Each  Mortgage  Loan  constitutes  a  qualified  mortgage  under  Section
860G(a)(3)(A) of the Code and Treasury Regulations Section 1.860G-2(a)(1).

(xxx) No more than  29.58% of any Group I Loans have been  classified  by RFC as
Credit  Grade A4, no more than 49.20% of any Group I Loans have been  classified
by RFC as Credit  Grade AX  Mortgage  Loans,  no more than 13.44% of the Group I
Loans have been  classified  by RFC as Credit Grade AM Mortgage  Loans,  no more
than 5.25% of the Group I Loans have been  classified  by RFC as Credit  Grade B
Mortgage  Loans, no more than 2.12% of the Group I Loans have been classified by
RFC as Credit Grade C Mortgage Loans and no more than 0.40% of the Group I Loans
have been  classified by RFC as Credit Grade CM Mortgage  Loans, in each case as
described generally in the Prospectus Supplement.

(xxxi) No more than 43.34% of any Group II-A Loans have been  classified  by RFC
as  Credit  Grade A4, no more than  26.96%  of any Group  II-A  Loans  have been
classified by RFC as Credit Grade AX Mortgage  Loans, no more than 16.81% of the
Group II-A Loans have been  classified by RFC as Credit Grade AM Mortgage Loans,
no more than 8.20% of the Group II-A Loans have been classified by RFC as Credit
Grade B  Mortgage  Loans,  no more than  3.98% of the Group II-A Loans have been
classified by RFC as Credit Grade C Mortgage Loans and no more than 0.70% of the
Group II-A Loans have been  classified by RFC as Credit Grade CM Mortgage Loans,
in each case as described generally in the Prospectus Supplement.

(xxxii) No more than 42.50% of any Group II-B Loans have been  classified by RFC
as  Credit  Grade A4, no more than  28.74%  of any Group  II-B  Loans  have been
classified by RFC as Credit Grade AX Mortgage  Loans, no more than 17.11% of the
Group II-B Loans have been  classified by RFC as Credit Grade AM Mortgage Loans,
no more than 7.03% of the Group II-B Loans have been classified by RFC as Credit
Grade B  Mortgage  Loans,  no more than  3.21% of the Group II-B Loans have been
classified by RFC as Credit Grade C Mortgage Loans and no more than 1.42% of the
Group II-B Loans have been  classified by RFC as Credit Grade CM Mortgage Loans,
in each case as described generally in the Prospectus Supplement.

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<PAGE>

(xxxiii)  No  Mortgage  Loan  is a  graduated  payment  loan  or  has  a  shared
appreciation or contingent interest feature.

(xxxiv)  With  respect to each  Mortgage  Loan,  either (i) each  Mortgage  Loan
contains a customary provision for the acceleration of the payment of the unpaid
principal  balance  of the  Mortgage  Loan in the  event the  related  Mortgaged
Property is sold without the prior consent of the  mortgagee  thereunder or (ii)
the Mortgage Loan is assumable pursuant to the terms of the Mortgage Note.

(xxxv) No Mortgage Loan provides for deferred interest or negative amortization.

(xxxvi) None of the Mortgage Loans are buydown Mortgage Loans.

(xxxvii) Each  Mortgaged  Property is a single parcel of real estate with a one-
to four-unit single family residence thereon, a condominium unit, a manufactured
housing unit, a unit in a townhouse, a planned unit development,  a leasehold or
a  modular  home;  and no  Mortgage  Property  consists  of a  mobile  home or a
manufactured housing unit that is not permanently affixed to its foundation.

(xxxviii) No more than  approximately  29.33%,  38.03% and 38.23% of the Group I
Loans, Group II-A Loans and the Group II-B Loans,  respectively (in each case by
outstanding  principal  balance as of the Cut-off Date), were made to Mortgagors
with credit scores as described  generally in the Prospectus  Supplement of less
than 600 excluding  Mortgagors whose credit scores are not available to RFC. The
weighted  average  of the credit  scores  for the Group I Loans,  the Group II-A
Loans and the Group II-B Loans for which Credit  Scores are available to RFC was
approximately 626, 613 and 613 and respectively, as of the Cut-off Date.

(xxxix) No instrument of release or waiver has been executed in connection  with
the Mortgage Loans, and no Mortgagor has been released, in whole or in part from
its obligations in connection with a Mortgage Loan.

(xl) The  weighted  average  remaining  term to stated  maturity  of the Group I
Loans,  Group  II-A  Loans and the Group  II-B  Loans,  respectively,  as of the
cut-off date will be approximately 326, 359 and 359 months. The weighted average
original  term to maturity of the Group I Loans,  Group II-A Loans and the Group
II-B Loans, respectively,  as of the cut-off date will be approximately 328, 360
and 360 months.

(xli) None of the Mortgage  Loans are subject to the Home  Ownership  and Equity
Protection Act of 1994 ("HOEPA").

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<PAGE>

(xlii) To the best of RFC's  knowledge,  the  Subservicer for each Mortgage Loan
has  accurately  and fully  reported  its  borrower  credit files to each of the
Credit Repositories in a timely manner.

(xliii)  None of the  proceeds  of any  Mortgage  Loan were used to finance  the
purchase of single premium credit insurance policies.

(xliv) No Group I Loan or Group  II-B Loan has a  prepayment  penalty  term that
extends beyond five years after the date of origination.  No Group II-A Loan has
a  prepayment  penalty  term that  extends  beyond three years after the date of
origination.

(xlv) 4.8% of the Group I Loans are Balloon Mortgage Loans.

(xlvi) None of the  Mortgage  Loans are loans that,  under  applicable  state or
local  law in effect  at the time of  origination  of such  Mortgage  Loan,  are
referred  to as (1) "high  cost" or  "covered"  loans or (2) any  other  similar
designation  if  the  law  imposes  greater  restrictions  or  additional  legal
liability for residential mortgage loans with high interest rates, points and/or
fees.

(xlvii) Each  Mortgage  Loan as of the time of its  origination  complied in all
material respects with all applicable local, state and federal laws,  including,
but not limited to, all applicable predatory lending laws.

(xlviii) The  information set forth in the prepayment  charge schedule  attached
hereto as Exhibit A (the  "Prepayment  Charge  Schedule") is complete,  true and
correct in all material  respects as of the Cut-off  Date,  and each  prepayment
charge set forth on the  Prepayment  Charge  Schedule  ("Prepayment  Charge") is
enforceable and was originated in compliance with all applicable federal,  state
and local laws.

(xlix) No Mortgage  Loan was  originated  on or after October 1, 2002 and before
March 7, 2003, which is secured by property located in the State of Georgia.

(l) The principal  balance at origination for each Group II-A Mortgage Loan that
is  secured by a single  family  property  located  in any state  other than the
States of Alaska or Hawaii did not exceed  $333,700.  The  principal  balance at
origination for each Group II-A Mortgage Loan that is secured by a single family
property located in the States of Hawaii or Alaska did not exceed $500,550.  The
principal  balance at  origination  for each Group  II-A  Mortgage  Loan that is
secured by a two-,  three- or four- family  property  located in any state other
than the  States of  Alaska  or Hawaii  did not  exceed  $427,150,  $516,300  or
$641,650, respectively. The principal balance at origination for each Group II-A
Mortgage Loan that is secured by a two-, three- or four- family property located
in the  States of  Hawaii  or  Alaska  did not  exceed  $640,725,  $774,450  and
$962,475, respectively.

(li) No Mortgage Loan is a High Cost Loan or Covered  Loan,  as  applicable  (as
such terms are defined in Appendix E of the Standard & Poor's  Glossary For File
Format For  LEVELS(R)  Version  5.6  Revised  (attached  hereto as  Exhibit  B);
provided  that no  representation  and warranty is made in this clause (li) with
respect  to 0.3% and 0.2% of the  Group I Loans  and the Group II Loans (in each
case by outstanding  principal  balance as of the Cut-off  Date),  respectively,
secured by property located in the State of West Virginia.

                                       9
<PAGE>

        Upon  discovery by RFC or upon notice from the Company or the Trustee of
a breach of the  foregoing  representations  and  warranties  in  respect of any
Mortgage  Loan, or upon the  occurrence  of a Repurchase  Event (as described in
Section 5 below),  which  materially and adversely  affects the interests of any
holders of the  Certificates,  the  Certificate  Insurer or the  Company in such
Mortgage  Loan  (notice  of which  breach  or  occurrence  shall be given to the
Company by RFC, if it discovers the same),  RFC shall,  within 90 days after the
earlier of its discovery or receipt of notice  thereof,  either cure such breach
or Repurchase Event in all material respects or, except as otherwise provided in
Section 2.04 of the Pooling and  Servicing  Agreement,  either (i) purchase such
Mortgage  Loan from the Trustee or the  Company,  as the case may be, at a price
equal  to the  Purchase  Price  for  such  Mortgage  Loan or (ii)  substitute  a
Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan in the manner
and  subject to the  limitations  set forth in Section  2.04 of the  Pooling and
Servicing  Agreement.  Notwithstanding  the  foregoing,  it is understood by the
parties hereto that a breach of the  representations  and warranties made in any
of clause (xli), (xlii), (xliii),  (xliv), (xlvi), (xlix) or (l) of this Section
4 with respect to any Group II-A Loan will be deemed to materially and adversely
affect the interests of the Holders of the  Certificates in the related Mortgage
Loan. Notwithstanding the foregoing, RFC shall not be required to cure breaches,
Repurchase Events or purchase or substitute for Mortgage Loans as provided above
if the substance of such breach or Repurchase  Event also  constitutes  fraud in
the  origination  of the  Mortgage  Loan.  If the breach of  representation  and
warranty that gave rise to the obligation to repurchase or substitute a Mortgage
Loan  pursuant  to this  Section  4 was the  representation  set forth in clause
(xlvii) of this  Section 4, then RFC shall pay to the Trust  Fund,  concurrently
with and in addition to the  remedies  provided in the  preceding  sentence,  an
amount equal to any liability, penalty or expense that was actually incurred and
paid out of or on behalf of the Trust Fund, and that directly resulted from such
breach, or if incurred and paid by the Trust Fund thereafter,  concurrently with
such payment.

5. With respect to the Mortgage Loans, a repurchase event  ("Repurchase  Event")
shall have occurred if it is discovered that, as of the date hereof, the related
Mortgage  Loan was not a valid first lien or junior lien in the case of a Junior
Lien Loan on the related Mortgaged Property subject only to (i) the lien of real
property  taxes  and  assessments  not  yet  due and  payable,  (ii)  covenants,
conditions,  and  restrictions,  rights of way,  easements  and other matters of
public  record  as of the date of  recording  of such  Mortgage  and such  other
permissible  title exceptions as are listed in the Program Guide and (iii) other
matters to which like  properties  are commonly  subject which do not materially
adversely  affect the value,  use,  enjoyment or  marketability of the Mortgaged
Property.

6.  Concurrently  with the execution and delivery hereof,  RFC hereby assigns to
the Company, and the Company hereby assumes, all of RFC's rights and obligations
under the Seller  Contracts  with respect to the  Mortgage  Loans to be serviced
under  the  Pooling  and  Servicing  Agreement,   insofar  as  such  rights  and
obligations  relate  to (a)  any  representations  and  warranties  regarding  a
Mortgage  Loan  made by a Seller  under any  Seller  Contract  and any  remedies
available under the Seller Contract for a breach of any such representations and
warranties  if (i) the  substance of such breach also  constitutes  fraud in the
origination of the Mortgage Loan or (ii) the representation and warranty relates
to the absence of toxic  materials  or other  environmental  hazards  that could
affect the Mortgaged Property,  or (b) the Seller's obligation to deliver to RFC


                                       10
<PAGE>

the  documents  required to be contained in the Mortgage File and any rights and
remedies  available  to RFC  under  the  Seller  Contract  in  respect  of  such
obligation  or in the  event  of a breach  of such  obligation;  provided  that,
notwithstanding  the  assignment and  assumption  hereunder,  RFC shall have the
concurrent right to exercise remedies and pursue  indemnification  upon a breach
by a  Seller  under  any  Seller  Contract  of any of  its  representations  and
warranties.  If the  Company  or RFC  asserts  that it is not  required  to cure
breaches or to purchase or substitute  for Mortgage  Loans under the Pooling and
Servicing  Agreement  because the substance of the breach also constitutes fraud
in the  origination  of any  Mortgage  Loan,  then the  substance of the related
breach shall automatically be deemed to constitute fraud in the origination of a
Mortgage Loan for purposes of clause (i) of this Section 6.

7. RFC hereby  represents  and warrants to the Company that with respect to each
Mortgage  Loan,  the REMIC's tax basis in each  Mortgage  Loan as of the Closing
Date is equal to or greater than 100% of the Stated Principal Balance thereof.

8. This Agreement  shall inure to the benefit of and be binding upon the parties
hereto and their  respective  successors and assigns,  and no other person shall
have any right or obligation hereunder.

9. RFC,  as master  servicer  under the  Pooling and  Servicing  Agreement  (the
"Master  Servicer"),  shall not waive (or  permit a  sub-servicer  to waive) any
Prepayment Charge unless: (i) the enforceability thereof shall have been limited
by  bankruptcy,  insolvency,  moratorium,  receivership  and other  similar laws
relating  to  creditors'  rights  generally,  (ii) the  enforcement  thereof  is
illegal,  or any local,  state or federal agency has threatened  legal action if
the prepayment penalty is enforced,  (iii) the collectability thereof shall have
been limited due to  acceleration  in  connection  with a  foreclosure  or other
involuntary  payment or (iv) such waiver is standard and  customary in servicing
similar  Mortgage  Loans and  relates to a default or a  reasonably  foreseeable
default and would, in the reasonable  judgment of the Master Servicer,  maximize
recovery  of total  proceeds  taking into  account the value of such  Prepayment
Charge and the related Mortgage Loan. In no event will the Master Servicer waive
a Prepayment  Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably  foreseeable  default.  If a Prepayment
Charge is waived,  but does not meet the  standards  described  above,  then the
Master Servicer is required to pay the amount of such waived  Prepayment  Charge
to the holder of the Class SB  Certificates  at the time that the amount prepaid
on the related  Mortgage  Loan is required to be  deposited  into the  Custodial
Account.  Notwithstanding  any other provisions of this Agreement,  any payments
made by the Master Servicer in respect of any waived Prepayment Charges pursuant
to this  Section  shall be deemed to be paid  outside  of the Trust Fund and not
part of any REMIC.

                      [Signatures begin on following page.]


                                       11
<PAGE>



DOCSLA1:476617.4
        IN WITNESS  WHEREOF,  the parties have entered into this  Assignment and
Assumption Agreement as of the date first above written.


                                RESIDENTIAL FUNDING CORPORATION



                                By:________________________________
                                Name:   Julie Steinhagen
                                Title:  Managing Director



                                RESIDENTIAL ASSET SECURITIES CORPORATION



                                By:________________________________
                                Name:   Benita Bjorgo
                                Title:  Vice President


                                       12
<PAGE>


                                    EXHIBIT A

                           Prepayment Charge Schedule

                                (see attachment)


                                       13
<PAGE>

                                  EXHIBIT B

                APPENDIX E OF THE STANDARD & POOR'S GLOSSARY FOR
                  FILE FORMAT FOR LEVELS(R) VERSION 5.6 REVISED

                              REVISED July 7, 2004

APPENDIX E - STANDARD & POOR'S ANTI-PREDATORY LENDING CATEGORIZATION


Standard & Poor's has categorized loans governed by anti-predatory  lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors  that  include (a) the risk  exposure  associated  with the  assignee
liability and (b) the tests and  thresholds  set forth in those laws.  Note that
certain  loans  classified  by the  relevant  statute as Covered are included in
Standard & Poor's High Cost Loan Category  because they included  thresholds and
tests  that  are  typical  of  what is  generally  considered  High  Cost by the
industry.
<TABLE>
<CAPTION>

STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION

------------------------------------------------------------------------------------------------
    State/Jurisdiction           Name of Anti-Predatory Lending            Category under
    ------------------           -------------------------------           ---------------
                                                                             Applicable
                                                                       Anti-Predatory Lending
                                       Law/Effective Date                        Law
---------------------------- ---------------------------------------- --------------------------

<S>                             <C>                                     <C>
Arkansas                     Arkansas Home Loan Protection Act,       High Cost Home Loan
                             Ark. Code Ann. ss.ss. 23-53-101 et seq.

                             Effective July 16, 2003
---------------------------- ---------------------------------------- --------------------------

Cleveland Heights, OH        Ordinance No. 72-2003 (PSH), Mun. Code   Covered Loan
                           ss.ss.757.01 et seq.

                             Effective June 2, 2003
---------------------------- ---------------------------------------- --------------------------

Colorado                     Consumer Equity Protection, Colo.        Covered Loan
                             Stat. Ann. ss.ss. 5-3.5-101 et seq.

                             Effective for covered loans offered or
                             entered into on or after January 1,
                             2003.  Other  provisions  of the Act took effect on
                             June 7, 2002
---------------------------- ---------------------------------------- --------------------------

Connecticut                  Connecticut Abusive Home Loan Lending    High Cost Home Loan
                             Practices Act, Conn. Gen. Stat.ss.ss.
                             36a-746 et seq.

                             Effective October 1, 2001
---------------------------- ---------------------------------------- --------------------------

District of Columbia         Home Loan Protection Act, D.C. Codess.ss. Covered Loan
                             26-1151.01 et seq.

                             Effective for loans closed on or after
                             January 28, 2003
---------------------------- ---------------------------------------- --------------------------


<PAGE>


Florida                      Fair Lending Act, Fla. Stat. Ann.ss.ss.   High Cost Home Loan
                             494.0078 et seq.

                             Effective October 2, 2002
---------------------------- ---------------------------------------- --------------------------

Georgia (Oct. 1, 2002 -      Georgia Fair Lending Act, Ga. Code       High Cost Home Loan
Mar. 6, 2003)                Ann.ss.ss.7-6A-1 et seq.

                      Effective October 1, 2002 - March 6,
                             2003
---------------------------- ---------------------------------------- --------------------------

Georgia as amended (Mar.     Georgia Fair Lending Act, Ga. Code       High Cost Home Loan
7, 2003 - current)           Ann.ss.ss.7-6A-1 et seq.

                             Effective for loans closed on or after
                             March 7, 2003
---------------------------- ---------------------------------------- --------------------------

HOEPA Section 32             Home Ownership and Equity Protection     High Cost Loan
                             Act of 1994, 15 U.S.C.ss.1639, 12
                             C.F.R.ss.ss.226.32 and 226.34

                             Effective October 1, 1995, amendments
                             October 1, 2002
---------------------------- ---------------------------------------- --------------------------

Illinois                     High Risk Home Loan Act, Ill. Comp.      High Risk Home Loan
                             Stat. tit. 815, ss.ss. 137/5 et seq.

                             Effective  January  1, 2004  (prior  to this  date,
                             regulations under Residential  Mortgage License Act
                             effective from May 14, 2001)
---------------------------- ---------------------------------------- --------------------------

Kansas                       Consumer Credit Code, Kan. Stat. Ann.    High Loan to Value
                             ss.ss.16a-1-101 et seq.                  Consumer Loan (id.ss.
                                                                      16a-3-207)
                                                and;
                                Sections 16a-1-301 and 16a-3-207
                                became effective April 14, 1999;
                                Section 16a-3-308a became effective
                                July 1, 1999
---------------------------- ---------------------------------------- --------------------------

                                                                      High APR Consumer Loan
                                                                      (id.ss.16a-3-308a)
---------------------------- ---------------------------------------- --------------------------

Kentucky                     2003 KY H.B. 287 - High Cost Home Loan   High Cost Home Loan
                             Act, Ky. Rev. Stat.ss.ss.360.100 et seq.

                             Effective June 24, 2003
---------------------------- ---------------------------------------- --------------------------

Maine                        Truth in Lending, Me. Rev. Stat. tit.    High Rate High Fee
                             9-A,ss.ss.8-101 et seq.                    Mortgage

                             Effective September 29, 1995 and as
                             amended from time to time
---------------------------- ---------------------------------------- --------------------------
<PAGE>

Massachusetts                Part 40 and Part 32, 209 C.M.R.ss.ss.     High Cost Home Loan
                             32.00 et seq. and 209 C.M.R.ss.ss.40.01
                             et seq.

                             Effective March 22, 2001 and amended
                             from time to time
---------------------------- ---------------------------------------- --------------------------

Nevada                       Assembly Bill No. 284, Nev. Rev. Stat.   Home Loan
                             ss.ss.598D.010 et seq.

                             Effective October 1, 2003
---------------------------- ---------------------------------------- --------------------------

New Jersey                   New Jersey Home Ownership Security Act   High Cost Home Loan
                             of 2002, N.J. Rev. Stat.ss.ss.46:10B-22
                             et seq.
                             Effective for loans closed on or after
                             November 27, 2003
---------------------------- ---------------------------------------- --------------------------

New Mexico                   Home Loan Protection Act, N.M. Rev.      High Cost Home Loan
                             Stat. ss.ss. 58-21A-1 et seq.

                             Effective as of January 1, 2004;
                             Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------

New York                     N.Y. Banking Law Article 6-l             High Cost Home Loan

                             Effective for applications made on or
                             after April 1, 2003
---------------------------- ---------------------------------------- --------------------------

North Carolina               Restrictions and Limitations on High     High Cost Home Loan
                             Cost Home Loans, N.C. Gen. Stat.ss.ss.
                             24-1.1E et seq.

                             Effective July 1, 2000; amended
                             October 1, 2003 (adding open-end lines
                             of credit)
---------------------------- ---------------------------------------- --------------------------

Ohio                         H.B. 386 (codified in various sections   Covered Loan
                             of the Ohio Code), Ohio Rev. Code Ann.
                             ss.ss.1349.25 et seq.

                             Effective May 24, 2002
---------------------------- ---------------------------------------- --------------------------

Oklahoma                     Consumer Credit Code (codified in        Subsection 10 Mortgage
                             various sections of Title 14A)

                             Effective July 1, 2000; amended
                             effective January 1, 2004
---------------------------- ---------------------------------------- --------------------------


<PAGE>

South Carolina               South Carolina High Cost and Consumer    High Cost Home Loan
                             Home Loans Act, S.C. Code Ann.ss.ss.
                             37-23-10 et seq.

                             Effective for loans taken on or after
                             January 1, 2004
---------------------------- ---------------------------------------- --------------------------

West Virginia                West Virginia Residential Mortgage       West Virginia Mortgage
                             Lender, Broker and Servicer Act, W.      Loan Act Loan
                             Va. Code Ann. ss.ss. 31-17-1 et seq.

                             Effective June 5, 2002
---------------------------- ---------------------------------------- --------------------------



STANDARD & POOR'S COVERED LOAN CATEGORIZATION


---------------------------- ---------------------------------------- --------------------------
    State/Jurisdiction           Name of Anti-Predatory Lending            Category under
    ------------------           -------------------------------           ---------------
                                                                             Applicable
                                                                       Anti-Predatory Lending
                                       Law/Effective Date                        Law
---------------------------- ---------------------------------------- --------------------------

Georgia (Oct. 1, 2002 -      Georgia Fair Lending Act, Ga. Code       Covered Loan
Mar. 6, 2003)                Ann.ss.ss.7-6A-1 et seq.

                             Effective October 1, 2002 - March 6,
                             2003
---------------------------- ---------------------------------------- --------------------------

New Jersey                   New Jersey Home Ownership Security Act   Covered Home Loan
                             of 2002, N.J. Rev. Stat.ss.ss.46:10B-22
                             et seq.

                             Effective November 27, 2003 - July 5,
                             2004
---------------------------- ---------------------------------------- --------------------------



STANDARD & POOR'S HOME LOAN CATEGORIZATION

------------------------------------------------------------------------------------------------
---------------------------- ---------------------------------------- --------------------------
    State/Jurisdiction           Name of Anti-Predatory Lending            Category under
    ------------------           -------------------------------           ---------------
                                                                             Applicable
                                                                       Anti-Predatory Lending
                                       Law/Effective Date                        Law
---------------------------- ---------------------------------------- --------------------------

Georgia (Oct. 1, 2002 -      Georgia Fair Lending Act, Ga. Code       Home Loan
Mar. 6, 2003)                Ann.ss.ss.7-6A-1 et seq.

                             Effective October 1, 2002 - March 6,
                             2003
---------------------------- ---------------------------------------- --------------------------
<PAGE>

New Jersey                   New Jersey Home Ownership Security Act   Home Loan
                             of 2002, N.J. Rev. Stat.ss.ss.46:10B-22
                             et seq.

                             Effective for loans closed on or after
                             November 27, 2003
---------------------------- ---------------------------------------- --------------------------

New Mexico                   Home Loan Protection Act, N.M. Rev.      Home Loan
                             Stat. ss.ss. 58-21A-1 et seq.

                             Effective as of January 1, 2004;
                             Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------

North Carolina               Restrictions and Limitations on High     Consumer Home Loan
                             Cost Home Loans, N.C. Gen. Stat.ss.ss.
                             24-1.1E et seq.

                             Effective July 1, 2000; amended
                             October 1, 2003 (adding open-end lines
                             of credit)
---------------------------- ---------------------------------------- --------------------------

South Carolina               South Carolina High Cost and Consumer    Consumer Home Loan
                             Home Loans Act, S.C. Code Ann.ss.ss.
                             37-23-10 et seq.

                             Effective for loans taken on or after
                             January 1, 2004
---------------------------- ---------------------------------------- --------------------------

</TABLE>


<PAGE>

</TEXT>
</DOCUMENT>
